By law, U.S. Metro Towing can't hold a car towed from a private lot until the funds are paid. That would constitute a lien, which is illegal under the law.
According to a Flagstaff Police Department training bulletin sent earlier this month in response to complaints, the owner of the vehicle is liable for towing costs, but no lien can be placed on the vehicle for those funds -- even if a tow company posts a sign saying otherwise.
"Does a tow company have to release a vehicle under Arizona law? Yes," the bulletin says.
The city attorney's office says it constitutes felony auto theft if a tow company takes possession of a car from a private lot and refuses to return it when asked.
However, a car towed from a street because of a municipal parking violation can be held in lieu of payment.
Michael Katt, owner of U.S. Metro Towing, says he's well aware of the law and contends he offers to send a bill to anyone who hints that they don't have the money for an on-the-spot payment. He says he's only negotiable on price because he'd rather take a lesser amount than have to fight to get the full payment.
But Michael Chadburn, who paid $175 to get his car back, and others say they didn't know they could have just taken their cars and gotten a bill in the mail.