The District is being sued by the lienholder of a Mercedes-Benz that was impounded for unpaid parking tickets and then sold at auction for less than half its value, without any warning to creditors.
Ten months after selling Stephen Yelverton’s Mercedes SLK350, the District finds itself the defendant in a federal lawsuit, potentially being forced to pay thousands more than the vehicle was worth.
The D.C. Department of Public Works towed the 2006 Mercedes convertible, the subject of seven unpaid parking tickets totaling $980, to the Blue Plains Impoundment Lot in early 2009. Liquidation.com, the District’s online auctioneer, sold the car March 17 for $18,900.
But Yelverton, a D.C. lawyer now in bankruptcy, still owed $42,606 on the car when it was impounded. Michigan-based DCFS USA, the lienholder, had issued a default notice the previous September, according to court documents. Yelverton had not made a car payment since June 2008.
DCFS, a subsidiary of Daimler Investments, claims it was not informed by the District that the vehicle was impounded, as the D.C. Code requires. The firm sued Jan. 11 for due process violations and demanded damages plus interest, costs and attorney’s fees.
It also sued Yelverton for breach of contract.
“Our records did not reveal a lien holder so none was notified,” Christine Davis, DPW general counsel, said in an e-mail.
Yelverton was notified of the impoundment, Davis said. He did not respond.
D.C. statute requires that DPW send an impoundment notice to the last known address of the owner and any lienholders, no matter where the vehicle is registered. Yelverton’s Mercedes was registered in Virginia.
The District “unlawfully deprived DCFS of its property,” the lawsuit alleges.
In an e-mail, Yelverton claimed to know nothing.
“I was never notified at any time by the D.C. government of any unpaid parking tickets, any impoundment, or of any sale of the Mercedes (sic),” he said. “I have not been served with a summons as to any lawsuit in regard to the Mercedes (sic), nor was aware of the pendancy of any such action.”
Yelverton joined the D.C. Bar in 1979. He bought the car in July 2006 for $55,177, court documents show. As of last May he was more than $600,000 in debt, with nine pages of creditors.
Yelverton claims he is owed hundreds of thousands of dollars by business associates for work related to Nigerian oil and real estate deals, according to court filings. The mission of his law firm, according to its Web site, “is to assist international clients in representation in legal and governmental matters in the U.S.”
An attorney for DCFS declined comment.
