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In the latest chapter in the ongoing Detroit towing scandal, city attorneys have withdrawn a federal court motion in which they accused a tow company and an unnamed Highland Park cop of being part of an “elaborate” stolen vehicle scheme.

Detroit attorneys on Monday filed a “notice of voluntary dismissal without prejudice,” nullifying their Sept. 11 counter-complaint, which was filed in response to a lawsuit brought against the city by Nationwide Recovery Inc.

Nationwide sued the city in July, claiming it had been removed from the Detroit police towing rotation without cause. In its September counter-complaint, the city accused Nationwide and its attorney Marc Deldin of orchestrating the theft of vehicles, which were towed to the company’s lot on Detroit’s east side.

The city also accused the Highland Park officer of purposely failing to inform people their stolen vehicles had been recovered, allowing Nationwide to rack up expensive storage fees; and said towing magnate Gasper Fiore was the shadow owner of Nationwide — an allegation Deldin has disputed.

Fiore has been indicted in federal court as part of an alleged bribery scheme involving Macomb County waste management company Rizzo Environmental Services. After the indictment, Detroit officials suspended Fiore’s companies from doing business with the city. Nationwide was later suspended from the tow rotation.

Deldin said Friday he is drafting an amended lawsuit against the city, whose September counter-claim he called “an act of cowardice.” Deldin added the city’s dismissal came after he threatened sanctions under Federal Rule of Civil Procedure 11, which allows a federal judge to sanction attorneys or parties who submit pleadings for an improper purpose or that contain frivolous arguments without evidence.

“In federal court, if you file something I think is objectionable, instead of filing a motion for sanctions, I send you the motion instead,” Deldin said. “There’s something called the ‘safe harbor provision,’ which says if the offending filing is withdrawn within 21 days, you cannot file the motion.”

Deldin provided The Detroit News four letters he sent to the city threatening to file the sanctions if the counter-complaint was not dismissed.

In its four-page filing Monday, the city did not elaborate on why it had withdrawn its complaint. City attorney Melvin “Butch” Hollowell declined to comment Friday.

In a written statement, Deldin criticized the city’s retained attorney, Ronald Acho of the Livonia law firm Cummings, McClorey, Davis and Acho. Acho was the attorney who filed the September counter-complaint alleging criminal behavior by Deldin, Nationwide and the Highland Park cop.

“I question whether (Detroit Mayor Mike Duggan and police Chief James Craig) know the full extent of Mr. Acho’s conduct in this case,” Deldin said. “Acho has hurt good people, embarrassed the city and continues to do so every day.

Acho could not immediately be reached for comment Friday.

“This was an act of cowardice,” Deldin said of the city’s filing. “To falsely accuse good people of serious crimes to gain an advantage in litigation is disgusting. Nationwide has nothing to do with Gasper Fiore or his companies.”

Deldin, who was once Fiore’s attorney, said he stopped representing him in 2013.

“The City fears the facts of this case,” Deldin said in his statement.

The wrangling over the city’s police towing rotation has been ongoing for years. Last week, Detroit police attorney Celia Washington was indicted in federal court for allegedly pocketing bribes in exchange for helping an unnamed towing mogul get a bigger piece of Detroit’s towing rotation.

ghunter@detroitnews.com

(313) 222-2134

Twitter: @GeorgeHunter_DN

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