Ex-Police Garage Agrees to Pay $150,000 to Settle Suit by L. A.
A former Van Nuys police garage, which lost its city franchise last year amid allegations that its operators improperly sold impounded vehicles, has settled a civil suit out of court by agreeing to pay $150,000 in fines and legal fees.
Fay Chu, a deputy city attorney, credited the settlement to overwhelming evidence collected against Fox Motors Inc.
She said investigators had documented 47 cases in which cars impounded by Fox were then sold to Fox-owned dealerships without being properly offered at public auction, a procedure prohibited by law.
But the company’s general manager, William H. Fox, said Tuesday that the family settled the case to avoid costly legal fees and spare patriarch and founder of the family business, Henry F. Fox, 79, “the rigors of litigation.”
The defendants admitted no wrongdoing or liability in settling the case. They included Henry Fox, son William Fox, daughter Lillian Fox and former son-in-law Edward Mulder.
For 38 years, Fox Motors enjoyed the designation of “official police garage,” meaning that it had been granted an open-ended, geographic monopoly on towing and storing vehicles involved in crimes, accidents and traffic violations in the Los Angeles Police Department’s Van Nuys Division.
In a lawsuit filed by Fox Motors against the Los Angeles Police Commission, Fox said it had been taking in about $1.5 million a year in fees at its garage at 15152 Erwin St.
But its longstanding contract came to an end last year after the commission revoked Fox’s franchise and awarded it instead to a Pacoima garage.
The unusual action followed a 14-month investigation into allegations that Fox executives had been illegally selling impounded vehicles to family-owned car dealerships in Van Nuys and Palm Springs by failing to properly advertise their sale at public auction.
In its civil suit filed Oct. 31, the city also accused Fox managers of undervaluing cars before their sale, which enabled the managers to buy the vehicles at below-market prices, and selling some vehicles being held as police evidence.
The Police Commission began investigating Fox Motors in January, 1989, after a murder victim’s ex-wife complained that the man’s Mercedes-Benz, impounded as evidence, had been sold without the family’s knowledge.
