The Mobile County District Attorney’s (DA) Office obtained a preliminary injunction March 9 against Rapid Towing of Irvington, alleging its “hold harmless agreement” violates the Alabama Deceptive Trade Practices Act.
Factual allegations in the complaint state the lawsuit was the result of a Feb. 6 incident in which Rapid Towing, owned by Michael Sellers, towed a 2006 Honda Accord from the Barrington Park Apartments on Cottage Hill Road. The car was owned by and registered to Terry Penn, who provided its use to his granddaughter, Aaliya Davis.
Davis had driven to the apartments to visit her sister, a resident, and obtained a visitor’s parking pass when she arrived. But Rapid Towing, which serviced the apartments, towed the vehicle anyway.
Penn alleges when he called Rapid Towing to recover the vehicle, he was not provided the correct time to pick up the vehicle from the impound lot. When the lot eventually reopened hours later, Penn was told he could recover the vehicle without charge, but only if he signed the hold harmless agreement.
There was damage to the front bumper, so Penn refused to do so. Rapid Towing would not release the vehicle until the plaintiff filed a restraining order later in February.
The complaint, written by Assistant District Attorney Clay Rossi, is similar to one the DA’s Office filed against the same defendants in 2019. However, the previous lawsuit lists 98 counts of violating the Alabama Deceptive Trade Practices Act, naming 11 representative victims. The focus of the first lawsuit was a “vehicle/property release form.” Several victims said they signed the form under duress and told the DA’s Office about other experiences with the towing company.
In both instances, prosecutors allege the defendants engaged in “predatory towing” tactics, “designed to impermissibly and illegally artificially extract excessive fees from consumers and/or violate their legal rights.” The hold harmless agreement at the center of the second lawsuit “is deceptive as the defendants have no legal basis remanding the execution of a hold harmless. Moreover, the deceptive practice is purposefully designed to create a ‘chilling effect’ on litigation by tricking consumers into thinking they have no legal recourse against the defendants.”
On Monday, Rossi explained the new action was initiated because prosecutors discovered in 2020 Rapid Towing started using a different “hold harmless waiver.”
“Our position is that people are not legally required to sign away all their legal rights just to get their vehicle back,” Rossi said. “However, Rapid Towing has continued to demand a signed waiver before releasing vehicles. The 2019 case was stayed because Michael Sellers is facing numerous criminal charges arising out of the interactions with the same consumers mentioned in that complaint. Once those criminal cases are concluded we’ll move to lift the stay so that the victims can seek compensation for any damage done to their vehicles.”
Sellers’ criminal cases include auto vehicle theft and at least one is set for trial in April. Meanwhile, he failed to appear at a show cause hearing March 8, where Circuit Court Judge Ben Brooks issued the injunction, allowing the defendants to stay in business but prohibiting them from requiring customers to sign the hold harmless agreement. The order also requires the company to preserve records of the agreements since February 2020 and post a sign on the premises stating “UNDER ALABAMA LAW YOU HAVE THE RIGHT TO SUE FOR UNAUTHORIZED TOWS AND/OR ANY DAMAGE DONE TO YOUR VEHICLE AS A RESULT OF ANY TOW.”
Last year, the DA’s Office sued the owners of four other local towing companies for insurance fraud. An investigation by the Mobile Police Department (MPD), resulting from a review of fees charged by towing companies included in its roster of contractors, accused some of violating state insurance fraud laws because they charged motorists for services in violation of a city ordinance that were ultimately paid for through a third-party insurance company.
In one of the more extreme measures from the case, the MPD seized the tow trucks of one company, although the trucks were eventually returned upon payment of a bond. The Alabama Supreme Court later upheld the seizure action, but expressed discomfort with the state’s civil forfeiture law that allowed it.
Some of the insurance fraud cases remain pending, but in January, Circuit Court Judge Spiro Cheriogotis found there was no probable cause in the case against A+ Towing. Attorney Jason Darley, who represented the defendant, Chadwick Fountain at A+, said it was fairly cut and dried.
“The complaints were that Mr. Fountain was committing insurance fraud, but he was providing a legitimate service to the city and constituents and insurance companies were paying for it,” Darley said. “There was no basis for fraud. At most, you may have had city ordinance violations.”
In Sellers’ latest case, a bench trial has been set for May 10 to address a permanent injunction and any potential additional relief. The DA’s Office is seeking people who have been towed by Rapid Towing since Feb. 1, 2020, and were made to sign a hold harmless agreement or any other waiver of rights. Interested parties may call 251-574-8400 and ask to speak with the White Collar Division.
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