Tow company files suit against city

Kenneth Ma

HUNTINGTON BEACH -- A local tow truck company has filed a lawsuit against

the city that seeks $321,000 in damages and lost revenue because the city

refused to renew its tow permit.

The lawsuit, filed last month on behalf of Huntington Auto Service,

states the city breached its contract with the company by refusing to

renew the permit in May 1999. The suit also contends that the denial took

effect immediately, depriving the company’s owners of due process.

Under city law, the owner should have been allowed an opportunity to

appeal the denial to the city administrator before it took effect.By

denying the company its permit, the city also denied its right to operate

under contract with the city as a towing company for the Huntington Beach

Police Department, the lawsuit states.The city has not yet been served

with the suit. The Police Department, Chief Ronald Lowenberg and Lt.

Lloyd Edwards are also named as defendants.

“I felt betrayed,” said Karen Pedersen, a co-trustee of the Pedersen

Family Trust, which operates Huntington Auto Service. “I have done so

many things for this city. I think [the permit denial] is strictly

politics.”

Since the ruling, Pedersen said she has been forced to fire six employees

and go on a restrictive budget to make ends meet. The suit does not ask

the city to reinstate the company’s permit. Huntington Auto Service is on

a 60-day temporary permit that expires June 12.

The city contracts with three local towing companies: Mandic Motors, Best

Towing and Huntington Auto Service. All three companies work on a

rotating schedule to handle police-related tows.In a May 1999 memo to

Huntington Auto Service, Lowenberg said the Police Department decided not

to renew the permit after receiving complaints from residents about bad

service. Police officials also said they were concerned the company was

not maintaining its equipment according to the state vehicle code,

Lowenberg said in the statement.

“These complaints have resulted in delays in our department operations

and to the public in general,” Lowenberg wrote. “We find in the past,

your company has not maintained the standards we would expect from a

towing service.”

Rose Marie Hollander, Pedersen’s lawyer, said the complaints were made

over a period of about 10 to 11 years, during which, the company’s towing

permit was renewed on several occasions.

Most of the complaints, she said, were about the company’s use of an

answering service that did not efficiently forward calls to their truck

operators. When Huntington Auto Service sought another company to operate

its answering service, the companies that were contacted said they

refused to work with the Huntington Beach Police Department because there

was too much pressure to expedite calls within the 20-minute response

time required by the city, Hollander said.

Hollander said Huntington Auto Service was not given any warnings by the

department that their permit was in jeopardy of not being renewed.

However, city spokesman Rich Barnard said the company was verbally warned

in advance that the police chief was considering such action.

The matter came before an arbitrator in July. Retired Orange County

Superior Court Judge John L. Flynn Jr. found that the city failed to

produce sufficient evidence to justify its refusal to renew Pedersen’s

permit.

The city, Flynn ruled, based its case on hearsay instead of producing

direct evidence. Flynn ordered the city to reinstate the tow permit,

according to Judicial Arbitration Mediation Services’ records.It took

eight months for the city to issue Huntington Auto Service a 60-day

temporary tow permit, which will expire Monday.

In a May memo to Ray Silver, Lowenberg said the decision to issue

Pedersen a regular permit renewal will be based on a ruling by City Atty.

Gail Hutton as to whether Huntington Auto Service is in compliance with a

city ordinance that forbids tow companies outside of the city to operate

here.

The city contends that Huntington Auto is not being run by the same

company that the contract started with. Under a 1986 city law, towing

companies with facilities outside of the city’s border are not permitted

to do business in Huntington Beach.

Huntington Auto Service, which has been doing business with the city

since 1957, hired Metro Pro Road Services of Santa Ana in 1993 to manage

its business affairs, Pedersen said. She said she continues to oversee

the day-to-day towing operations.

Assistant City Atty. Scott Field declined to comment on the lawsuit until

the city is served. City Atty. Gail Hutton was unavailable for comment.