Financing company sues Revere for selling off car it had an interest in without alerting it, a practice a judge declared unconstitutional last year

A financing company that had a lien on a Revere resident's car is suing Revere because it let a local tow firm sell it off after police seized it without ever notifying the company - a practice a federal judge told the city a year ago was unconstitutional.

in a suit filed yesterday in US District Court, Source One Financial Corp. says it wants the $1,421.83 it says it was still owed on the 2013 Hyundai Sonata a Revere man owed on the car when police seized his car following his arrest in 2019. The city had the car towed away and then let a local company buy the car - and get a new title that did not mention Source One, which meant under Massachusetts law it effectively no longer could claim a lien on the car.

In addition to the money, Source One is also seeking a declaration from a judge that the state law Revere used to dispose of the car is unconstitutional.

A federal judge ruled in July, 2020 that the state law, and Revere's policy based on it, are unconstitutional when it comes to the rights of financing companies. In that case, involving Honda's financing wing and a car seized by Revere Police in a criminal case, the judge ruled the city had no right to dispose of a car without first notifying anybody who might have a financial interest in it besides the owner.

In her ruling, US District Court Judge Alison Burroughs said the state law, which only requires notification of a vehicle's owner before it's sold off, unconstitutionally deprived Honda of its 14th Amendment right to due process, to contest the disposition of a car in which it still had a financial stake.

The ruling came a year after Source One says police had a local tow company take away the Sonata after its owner was arrested. The month after the car was seized, the suit alleges, the tow company sold the car to Action Management, the company to whose lot it had towed the car. Action, the company alleges, then got a new title to the car, which did not list Source One's interest in the car.

At no point, Source One charges, was it ever notified about the sale and its impending loss of its financial stake in the car.

In the Honda case, the judge awarded the company the amount it said it would have made had it recovered the car and sold it off itself.

Complete complaint (13M PDF).