Daler Singh, Dba Gilzian Enter. LLC v. City of N.Y.
| Citation | 2017 NY Slip Op 32215 (U) |
| Decision Date | 21 September 2017 |
| Docket Number | Index Number: 701402/2017 |
| Parties | Daler Singh, DBA Gilzian Enterprise LLC, Danielle Eve Taxi LLC, EAC Taxi LLC, DEC Taxi LLC, EC Taxi LLC, Chips Ahoy Taxi LLC, ECDC Taxi LLC and Dyre Taxi LLC, individually and on behalf of all others similarly situated, Plaintiffs, v. The City of New York and The New York City Taxi and Limousine Commission, Defendants. |
| Court | United States State Supreme Court (New York) |
Present: HONORABLE Hon. Kevin J. Kerrigan Justice
Motion Date: July 11, 2017
Motion Cal. Number: 57
The following papers numbered 1 to 5 read on this motion by defendant City of New York and defendant New York City Taxi and Limousine Commission for an order pursuant to CPLR 3211(a)(1) and (7) dismissing the complaint against them
PapersNumbered Notice of Motion - Affidavits - Exhibits 1 Answering Affidavits - Exhibits 2 Reply Affidavits Memoranda of Law 3-5
Upon the foregoing papers it is ordered that: Those branches of the motion which are for an order dismissing the first, second, and fourth causes of action and that part of the fifth cause of action which is based on fraud, on the ground of a failure to comply with the notice of claim provisions of New York City Administrative Code §7-201 and General Municipal Law §50-e are granted. Those branches of the motion which are for an order dismissing the first cause of action on other grounds are also granted. The remaining branches of the motion are denied.
Plaintiff Danielle Eve Taxi LLC, plaintiff EAC Taxi LLC, plaintiff DEC Taxi LLC, plaintiff EC Taxi LLC, plaintiff Chips Ahoy Taxi LLC, plaintiff ECDC Taxi LLC, and plaintiff Dyre Taxi LLC successfully bid for New York City corporate wheelchair accessible taxi medallions at a public auction held on November 13, 2013. In February, 2014, plaintiff Daler Singh d/b/a Gilzian Enterprise LLC successfully bid for an independent wheelchair accessible taxi medallion at a public auction. Before the auctions, defendant City of New York and defendant New York City Taxi and Limousine Commission (TLC) (collectively the city defendants) made public statements and issued promotional materials concerning medallions, medallion prices, and price trends. In the months prior to auctions held over several years, TLC published reports on the average sale price of both individual and corporate medallions. The plaintiffs allege that the reports issued by TLC contained false, inaccurate, and misleading statements. TLC allegedly exaggerated the price of medallions in public reports while concealing the true prices and made false statements concerning the directional trend in medallion prices.
Plaintiff Singh formed Gilzian Enterprise LLC for the purpose of owning the taxi medallion, which cost the company $821,215. Richard Chipman organized Danielle Eve Taxi LLC, EAC Taxi LLC, DEC Taxi LLC, EC Taxi LLC, Chips Ahoy Taxi LLC, ECDC Taxi LLC, and Dyre Taxi LLC (the Chipman companies) for the purpose of owning two yellow taxi medallions each (a company with two medallions is called a minifleet). The purchase price for the mini-fleets ranged from $2,118,000 to $2,518,000 and totaled $16,426, 000..
After the plaintiffs made their purchases, the value of their medallions allegedly fell, and the plaintiffs attribute their losses not only to alleged fraud committed by the TLC, but also to the TLC's failure to restrict the activity of companies like Uber Technologies, Inc. The plaintiffs allege that a medallion gives them the exclusive right to pick up passengers via "street hail" in certain areas of the city and that Uber infringes on this right by picking up passengers who arrange for transportation through the use of an application on their smart phones.
The relevant regulatory background and distinctions concerning yellow cabs, black cars (which Uber vehicles supposedly are), and other types of vehicles for hire are given in three decisions issued by the Honorable Allan Weiss, a Justice of the New York State Supreme Court, County of Queens, in three cases : (1) Glyca Trans LLC v. City of New York, Index No. 8962/15 ( September 8, 2015), (2) XYZ Two Way Radio Service, Inc. v. TheCity of New York, Index No. 5693/15 ( September 8, 2015), and (3) Melrose Credit Union v. The City of New York, Index No. 6443/15 (September 8, 22015).
The cases decided by Justice Weiss were largely Article 78 in nature, the petitioners, who were parties with interests in medallions, essentially seeking to compel TLC to enforce laws and regulations protecting the exclusive rights of medallion holders. (Justice Weiss granted the respondents' CPLR 3211 dismissal motions.) The instant action, which purports to be a class action, is very different from those decided by Judge Weiss, but it is very similar in structure to another case previously decided by this court.
On September 30, 2015, plaintiff Jaspreet Singh, plaintiff CGS Taxi LLC, plaintiff D&P Baidwan, LLC, plaintiff C&R Bhogal, LLC, and plaintiff PEG Taxi, NYC, LLC who had also successfully bid for New York City taxi medallions at public auction and who had thereafter experienced a fall in their value allegedly due to Uber and other technological transportation companies, began an action in the New York State Supreme Court, County of Queens which was very similar to the case at bar ( CGS Taxi LLC v. The City of New York, Index No. 713014/15). The case was assigned to this part. The law firm of Wolf Haldenstein Adler Freeman & Herz LLP represented the plaintiffs in CGS Taxi, and the same law firm represents the plaintiffs in the instant action.
On March 16, 2016, the defendants in CGS Taxi submitted a motion for an order pursuant to CPLR 3211(a)(1), (5), and (7) dismissing the complaint against them. Pursuant to a decision and order dated April 18, 2016 (one paper), this court converted the motion into one for summary judgment pursuant to CPLR 3211(c). (CGS Taxi LLC v. The City of New York , 2016 WL 2939774,) The case proceeded to discovery, On March 8, 2017, defendant City of New York and defendant TLC submitted a motion for summary judgment dismissing the complaint against them and the plaintiffs submitted a cross motion for, inter alia, partial summary judgment and an order certifying this action as a class action. Pursuant to a decision and order dated May 2, 2017 (one paper) and entered May 9, 2017, this court granted the motion by the city defendants for summary judgment and denied the cross motion by the plaintiffs. (CGS Taxi LLC v. The City of New York , 2017 WL 2734862.) The court found that the plaintiffs had not complied with notice of claim requirements. On June 2, 2017, the plaintiffs in CGS Taxi filed a notice of appeal.
The first cause of action is for violation of General Business Law §349 which prohibits "deceptive acts or practices in the conduct of any business, trade, or commerce or in the furnishing of any service." The second cause of action is for fraud. The third cause of action is for breach of the implied covenant of good faith and fair dealing. The fourth causeof action is for negligent misrepresentation. The fifth cause of action is for rescission of the auction sale transactions.
The court notes that the complaint in this case differs from the complaint filed in CGS Taxi which contained a sixth cause of action labeled "violation of licensing statutes and regulations" and which apparently sought damages and/or rescission and a seventh cause of action labeled "failure to enforce codes and rules pertaining to black car operations,"also apparently for damages and/or rescission. The plaintiffs in CGS Taxi demanded consequential damages, punitive damages, rescission of the auction sale transactions, costs and attorney's fees, as the plaintiffs in this case do, but the complaints in both cases are without a demand for Article 78 relief.
II. CPLR 3211(a)(7)
The failure to comply with statutory notice of claim requirements can result in the dismissal of the complaint pursuant to CPLR 3211(a)(7). (See, e.g., Mosheyev v. New York City Dept. of Educ., 144 AD3d 645; Bertolotti v. Town of Islip, 140 AD3d 907.)
The complaint in the instant action alleges the following:
The city defendants argue that causes of action for tort or in the nature of tort must be dismissed because the plaintiffs did not file timely notices of claim.
The Chipman companies successfully bid for New York City corporate wheelchair accessible taxi medallions at a public auction held on November 13, 2013. The Chipman companies filed a notice of claim with the New York City Comptroller on on February 9, 2017. In February, 2014, plaintiff Daler Singh d/b/a Gilzian Enterprise LLC successfully bid for an independent wheelchair accessible taxi medallion at a public auction. Plaintiff Singh filed a notice of claim with the New York City Comptroller on December 16, 2016.
General Municipal Law §50-e, "Notice of claim," provides in relevant part: ...
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