Minneapolis is looking to return money to those whose vehicles have been towed and sold in the past seven years.
A class-action lawsuit against the city of Minneapolis over its handling of impounded-vehicle auctions has led to advertisements that tell people they may have money coming if their car has been towed and auctioned off in the past seven years.
The sale of those forgotten or long-lost vehicles created a pool of cash worth at least $770,000 that, under state law, the city must return to people who had their cars or trucks towed to the city’s impound lot and then sold.
The lawsuit, filed on behalf of vehicle owner Garr White, who lost his 1972 Oldsmobile Cutlass to a city auction, came on the heels of a Nov. 4, 2011, Star Tribune story.
The newspaper reported that few people ever showed up to claim their cash because city notifications didn’t mention the state law. Of the 2,250 privately owned vehicles auctioned in the first 10 months of 2011, generating a total of $150,000 in profits, just one owner had come forward for auction proceeds. She took home $960.
The problem was even worse in St. Paul, where city officials said in late 2011 that no one had claimed auction proceeds in at least 10 months.
City officials in both places said after the story ran that they would change the letters sent to people after their vehicle has been towed to make sure the owners knew of their right to auction proceeds.
It was on behalf of people who had already had their vehicles auctioned off that attorney Marshall Tanick, of the Twin Cities law firm Hellmuth & Johnson, filed a class-action lawsuit. It settled Nov. 12, 2012. The city has since developed a system to notify people about the auctions and deliver payment, city spokesman Matt Laible said. Advertisements about the claims started running just over two weeks ago.
Claims must be submitted before Feb. 1 of next year for vehicles auctioned between March 1, 2006, and Feb. 1, 2008. For vehicles auctioned off later, claims must be made before the six-year anniversary of the sale. Vehicle owners will need proof of ownership at the time their vehicle was auctioned, the vehicle’s license plate or identification number (VIN), and the date it was towed.
The city has not yet received any claims, Laible said.
Not every auction claim will lead to a payment. State law allows the city to use some auction proceeds to pay itself back for towing, storage and some administrative costs. A vehicle typically needs to be sold for more than $688 to cover the costs, according to city figures.
A city database of all auctions held between Sept. 24, 2009, and Nov. 17, 2011, for example, shows that just 813 of 7,696 vehicles were sold for more than the cost of towing and storing them. Those resulted in $770,133 in profits that should be returned to vehicle owners.
Staff writer Glenn Howatt contributed to this report.
Matt McKinney • 612-217-1747