Towing Issues: liability question, tow company, release of liability

Question
Hi, I'm not sure if I'm asking this in the right category, but any advice you could give me would be appreciated. I'm in CA, btw.

I gave a car to my nephew's mother, for my nephew's use. I gave her all the required paperwork, but I have no record of this for myself. The next day I filed a release of liability with the DMV. Fast forward a few weeks and I get a notice from a tow company that the car has been towed and I am the last registered owner and I can pick up the car or they will sell it and I will be liable for the fees.

It turns out my nephew wrecked the car and they never transferred ownership. Am I going to be liable for the fees over and above what they sell it for? I think my nephew had a non owner's insurance policy and I have gotten some letters from them requesting my insurance coverage I had on the car, but I had already cancelled my insurance. I am just so confused, I just want no part of it. What should I do? Thank you!

Answer
If you reported the vehicle sold to DMV the day after the sale they should have a record of this. If they don't and failed to do their job you are still responsible for the vehicle. Since you don't have any documentation stating otherwise my suggestion is paying the tow company or find other options available. Contact the tow company and find a solution. Good luck.