City alleges Volusia County Towing charged unlawful fees, denied card payments; hearing continued

At the City of Daytona Beach special magistrate hearing Oct. 14, 2025, city attorneys and police presented evidence they said shows Volusia County Towing (doing business under Thompson Holdings Enterprises LLC) repeatedly violated Daytona Beach towing rules by refusing credit-card payments, charging fees above the city rate schedule and withholding vehicles or property without legally required documentation.

City attorney Melissa Diaz told the magistrate the city would show by a preponderance of the evidence that the company violated four provisions of the city code — Section 110-2 (compliance required), Section 110-9 (acceptable payment methods), Section 110-38 (rates) and Section 110-39 (prerequisites for towing from private property) — and that the city would seek fines allowed under state law of up to $15,000 per violation. Diaz said the city would prove multiple incidents in which customers were told they could not pay by card, were quoted lower prices by phone and charged substantially more at the tow yard, or were denied itemized receipts required by ordinance.

Detective Ashley Cooper and Sergeant Shawna Connolly, police code liaisons who led the investigation, described multiple citizen complaints and officer contacts. Connolly said the case file produced to the magistrate included a table of contents and 17 incident reports the city plans to use to prove repeated violations. Detective Cooper testified in detail about an incident in which a rental car was towed, the person attempting to retrieve it said Volusia County Towing would not accept card payment, and staff at the tow yard declined to produce the itemized receipt required by city ordinance. Cooper said the company at times insisted a vehicle’s registered owner had to be present despite documentation from the rental agency authorizing the renter to possess the vehicle.

The company’s owner, Derek Thompson, denied the broad allegations in an initial statement on the record, said drivers and subcontractors use a computerized system that generates fees, and disputed some witnesses’ accounts. Thompson and his counsel argued some of the recordings and invoices in the city’s binder could be explained by driver edits or system display differences; Thompson requested more time to examine the materials and prepare a defense. The magistrate said the respondent had not seen the full evidence book in advance and granted additional time to prepare.

The magistrate also allowed two small procedural changes the city requested to the charging document: (1) add subsection (a) to the Section 110-39 count; and (2) remove an erroneous citation (Section 110-37) from the notice of violation. The city said it is seeking civil fines tied to the four listed code sections; the parties agreed the city’s evidentiary binder was the operative record for the incidents cited.

Several former employees of Volusia County Towing testified for the city. Jamie Banks and James Banks said drivers and on-site managers at times told customers they could not pay with cards and instead pushed cash or Zelle; they also described higher-than-ordinance fees applied to rental vehicles. Another former driver, Charles Nedley, testified he raised pricing concerns repeatedly with on-site management and later left the company because the firm continued the disputed practices.

The magistrate heard testimony from Officer Jonathan Abate, who said two customers were charged $62.50 on-scene for a release fee when Daytona Beach ordinance requires a $25 on-scene release fee in the relevant circumstances; Abate said the tow personnel initially referenced another jurisdiction’s rules rather than Daytona Beach ordinance.

The magistrate did not enter a final finding at the Oct. 14 hearing. Instead, after hearing testimony from city witnesses and three former company employees, the magistrate accepted the city’s evidence book into the record for now, allowed the respondent (Thompson) more time to prepare a defense and scheduled a continuation. The magistrate said the matter will return for a “final hearing” on Nov. 11, 2025, and that at that later session the city may present additional witnesses or incidents and the respondent may present rebuttal witnesses and evidence. The magistrate repeated that each side will have cross-examination rights at the next hearing. In the interim the magistrate amended the notice of violation as the city requested (adding Section 110-39(a) and removing Section 110-37 from the charging list).

What the city presented - City counsel: Melissa Diaz (City of Daytona Beach) framed the case and said the city would prove repeated, irreversible harms, including excessive fees and denials of required payment methods and receipts. - Police witnesses: Sergeant Shawna Connolly and Detective Ashley Cooper described citizen complaints, an encounter at a Holly Hill tow yard and multiple incident reports compiled in the city’s evidence binder. - Former employees: Jamie Banks, James Banks and Charles Nedley testified they had worked at Volusia County Towing and described company practices they viewed as inconsistent with city ordinance. Officer Jonathan Abate testified about an on-scene release fee that exceeded the city’s allowed on-scene rate.

What the company said - Derek Thompson (owner) disputed portions of the city’s presentation, said some invoices were modified by subcontractors or drivers and asked for more time to review the evidence and prepare witnesses. Thompson’s counsel asked for a continuance and the chance to produce records and rebuttal testimony.

Next steps - The magistrate scheduled a continuation for Nov. 11, 2025. The magistrate said the Nov. 11 hearing will be treated as the final hearing on the city’s notice of violation; both sides may call witnesses and cross-examine opposing witnesses then. - The city may pursue civil fines under state statute (the city requested amounts up to $15,000 per violation in its opening statement); the magistrate retained jurisdiction to determine any fine after final hearing and argument.

Why it matters City witnesses told the magistrate they will show repeated occurrences in which people who had lost access to vehicles were required to pay in cash or through other non-card means and in which invoices and charges differed substantially from the prices quoted by phone. City counsel described the financial harm to people who “live paycheck to paycheck” and said the harm could not be undone by later compliance. The magistrate’s continuation means a final legal determination — and any civil penalty — will come after additional written materials and contested testimony are presented.