car stolen then towed

What is the name of your state? California

About two years ago, when my car died, I left it with a mechanic who offered to junk it for me, but before he could it was stolen from his shop. He filed a report on the car and when they found it a month later I started getting messages charging me for towing and storage. I did everything I could to make it clear that I didn't want the car and was not responsible for abandoning it. I remember a lot of phone calls, police paperwork and DMV paperwork, asserting that the car had been stolen before towage and surrendering my ownership of the car to the state or whoever. Now, a year and a half after all that, I have just recieved a letter from a new collection agency in charge of my "account" saying that I am responsible for the car according to DMV records and charging me $700 in towing and storage fees (more than the car was worth!) from January '03.
I was totally shocked because I thought the car had been destroyed long ago and that I had been cleared of all responsibility for it. Worse, I got rid of all my documentation on the car-that-will-not-die and am fuzzy remembering the details from the last time I contested. I am certain I never heard such a high fee quoted at me before, which makes me wonder if it has been growing in interest for over a year without my knowing it. But it is altogether suspicious to me that I haven't heard about this in so long if this fee is actually legit. If whatever actions I took before weren't enough to clear me, why the long hiatus in making me pay?
I should not still be the registered owner of that car, but if I was at towing time, is it my tough luck that it wasn't me who abandoned it? Can they charge me for storing a car I didn't even want? Is there any condition under which I would not be responsible, and what "proof" would I have to have?
The letter says my fee is growing daily and threatens to hit my credit, so I am nervous about taking the time to make a case as I did so laboriously before. Maybe this new collection agency just doesn't have all the information, but I don't know how to remedy that at this point, and I am just so sick of this issue haunting me! Please advise!