Towing company not liable for auctioned car, judge rules

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This article was published 14/03/2017 (3153 days ago), so information in it may no longer be current.

A towing company won’t be held liable for auctioning an abandoned leased car it had towed, a Manitoba judge ruled.

The auction sale put Tartan Towing at odds with the auto dealer, Kobi’s Auto, which argued it hadn’t been given proper notice the BMW it owned was about to go up for sale.

But Kobi’s would have known about the impending sale if the dealer had registered the correct vehicle identification number and checked the sale notice that was required to be advertised by law, Court of Queen’s Bench Justice David Kroft ruled last month.

The judge dismissed Kobi’s civil claim against Tartan Towing after a trial in December. He decided Kobi’s is entitled to $24,664.40 from the woman who leased the car before she abandoned it and stopped making loan payments.

Sonja Pecanac, a retired nurse, testified the 2004 BMW 750Li she was leasing from Kobi’s for more than $600 per month needed servicing so she and her son were told by an Osborne Village garage to park it on Wardlaw Avenue in November 2014.

On Nov. 23, the city ticketed the car as an abandoned vehicle, and Tartan towed it, first to another street about a kilometre away and then to its impound lot.

Pecanac discovered the car was gone and searched the area. She calling the city’s 311 service and local tow truck companies, including Tartan, but no one knew where it was.

She reported it stolen and, on Dec. 9, 2014, police told her they found the car impounded at Tartan’s lot. She couldn’t afford the fee to get the car back, she testified, and told Tartan Towing that in a phone conversation.

There were no keys in the locked vehicle, so court heard Tartan couldn’t identify the registered owner.

The law prevents garage owners from breaking in to vehicles to retrieve ownership information. The car was sold at auction in April 2015 to one of Tartan’s own employees, who bought it for $9,000 with the proceeds of sales from other towed vehicles.

Kobi’s found out about the sale after the car’s dead battery was recharged and a tracking device in the car started working again.

Justice Kroft ruled Tartan Towing did nothing wrong — even though it didn’t give Kobi’s written notice of the sale — because Kobi’s had registered the wrong vehicle identification number (VIN) associated with the BMW. If the VIN had been correct, Tartan’s search of the VIN would’ve led the towing company to issue a written notice to the auto dealer.

The towing company also advertised the upcoming sale of the vehicle in the Manitoba Gazette as required by law. A Kobi’s employee testified the auto dealer doesn’t check the Manitoba Gazette. The auction was also advertised online by Kaye’s auction house and in the Winnipeg Free Press.

The judge suggested it would be a good idea for Kobi’s to check the Manitoba Gazette in the future.

“Given the nature of its business, which includes leases to high-risk leasees, perhaps this practice should be reconsidered,” the judge said in the Feb. 22 decision.

“I am not suggesting that by advertising in the Manitoba Gazette, a garage keeper is somehow relieved from its other notice obligations. I simply am pointing out that in this fact situation, a review of the Manitoba Gazette would have alerted Kobi’s to the auction despite the erroneous VIN,” he said.

Tartan paid Kobi’s the proceeds of the BMW’s auctioning, but as a result of the court’s decision it won’t have to pay damages and will be entitled to some legal costs paid by Kobi’s.

At trial, a Tartan employee said 600 to 700 vehicles that are towed per year are unclaimed, and about one-third of those have no identifiable owner.

—­ with files from Kevin Rollason

katie.may@freepress.mb.caTwitter: @thatkatiemay