Can we dispute A LIEN of sale, on towed/totaled vehicle that is on the towing lot in california?

My dad got into an accident 2 months ago, it was the other driver fault, it involved 2 other people. He wasn't at the car at the time.

Next thing he knows, the towing guy came in his towing truck to pick up the vehicle to tow back to the towing lot, i was wondering if it would make any difference if it was towed back to our residence instead. Can the TOWING guy do this, he falsely told my dad, that the driver at fault had "AAA" insurance. When in fact the police report showed us that the driver at fault had no insurance at all, We had a one-way insurance on our 2004 Honda.
It cost 100/day for the car being at the towing lot. And towing company recently filed a lien of sale, attempting to sell the vehicle. Now it cost 5k to remove it from the lot, for some reason my dad left it in the towing lot all this time.
From my dad, the towing guy is claiming he needs 700$cash to sell it, can they do this.
on the notice it says we can stop the lien of sale, by disputing it in car, how much weight do we have to stop the sale.
Is it possible to give him the car, and be done with it, but we use a written contract: saying, we will give you the car to sell, but you can't come after us for other cost, such as the 100/day expense.
what does this mean, on the notice it says: "Disregard the notice if you no longer own or want this vehicle so i can proceed with the sale. However, if you are the last owner of record, you may be liable for removal and disposition costs and lien not sale.
How will

Added (1). they come after us, after the towing company has sold the car? Can we dispute in court that he made these outrageous claims., that he convinced my dad to tow it back to the lot instead to our residence, and also claimed the other person that they have insurance. What can we do?

If Dad had got the car out of the towers lot immediately, this wouldn't be happening.
To solve the problem, Dad must work with and communicate with the tower. Telling the story here on Y/A isn't going to solve the problem

You write: "My dad got into an accident 2 months ago, it was the other driver fault, it involved 2 other people. He wasn't at the car at the time."
How could your Dad get into an accident if he wasn't in the car?
What in the world is "one way insurance"?
The dollar sign goes before the number ($700.) not after it.

Grammar matters

Wow, sounds like a pretty shady operation to me, so the obvious question is WHY THE FOCK DID YOU WAIT 2 MONTHS TO DO ANYTHING?!

Better yet, why did you only have liability coverage on a 10 year old Honda? Yeah, the car isn't new, but it should still have enough of a value that you wouldn't want to pass on comprehensive/collision/uninsured coverage to protect yourself from loss. Sorry, but when you make it this easy for the world to take advantage of you then you deserve to be poor.

At this point I don't know what else you can do besides take the matter to small claims court, but in that case what's the best you can hope for? To get a wrecked 10 year old car back? I don't really know if there's any good answer for you.