Judge Shoots Down PC Cab Company Owners on Licenses

The current owners of Village Taxi and PC Taxi don't own the licenses to nine cabs operated by the previous owners, despite a sales contract that included those licenses in the deal.

That was the ruling by the Appellate Division of the state's Supreme Court last week, putting an end to a lawsuit between the current and former owners of Port Chester's two largest taxi companies.

At issue: was the contract valid even though it violated municipal taxi regulations? The court held up an earlier decision that said the contract was not valid, cutting to the heart of an issue that's become a hot debate in Port Chester.

Cabs can only be licensed to individual drivers, not taxi companies, under the current regulation scheme in Port Chester. That system has been in place for decades, and for decades cab company owners and drivers have traded licenses, included them in deals and generally skirted the issue of legal ownership while exchanging taxi licenses.

Although it's small change compared to the $1 million plus that cab drivers fork over for a New York City medallion, taxi drivers in Port Chester spend about $30,000 for a license to operate in the village.

That's created a "gray market" for cab licenses here, according to a consultant's report analyzing the taxi industry in Port Chester.

Pedro Montoya and his wife, Yodna Vivanco-Small, purchased Port Chester Taxi and Village Taxi from the previous owners, Ramon Beltre and Janeth Campos, in 2005. Included in the deal were nine licenses.

Montoya and Vivanco-Small sued when individual cab drivers, who legally hold the taxi licenses, began to split off from their companies, which share dispatch and for all purposes operate as a single company.

Montoya and Vivanco-Small paid $300,000 for the two companies, wioth a contract that stipulates "goodwill, a covenant not to compete, equipment, and a leasehold," according to the judgement. "The agreement makes no references to any licenses."

The new owners pointed to a 2006 contract addendum, which said the nine taxi licenses were included in the sale. Montoya and Vivanco-Small claimed ignorance, arguing that Beltre and Campos did not inform them that the company did not legally own those licenses.

In a decision issued last week, the court said it doesn't matter -- the contract violates municipal regulations, and the portion of the deal that included the cab licenses is not valid.

Montoya and Vivanco-Small did not respond to requests for comment this week, although they complained forcefully to Port Chester trustees last month during a public meeting, urging elected officials to maintain the status quo in the village instead of exploring a plan to place taxi regulation in the hands of Westchester County.

Although local cab company owners have complained publicly, drivers have told a different story to municipal officials in private. Although not central to last week's court decision, drivers have complained that cab company owners can punish individual drivers by dispatching them to the least-profitable fares. Drivers also fully absorb the cost of subsidizing senior fares, which allow senior citizens to ride anywhere in the village for $2.

Mayor Dennis Pilla said the court's decision bolstered his argument during last month's public hearing. The details indicate the previous owners sold the companies "before effectuating a legal transfer through the clerk," Pilla wrote, adding it "makes me wonder if some or all the gray market sales and transfers were also done incorrectly."

"The ruling here is consistent with our stance that taxi regulations should exist only to protect public safety, not to safeguard somebody's personal business interest," Pilla wrote in response to a Patch inquiry. "This goes to show that the Village is incapable of adequately regulating taxis in the village. We should transfer the responsibility and the liability to the County immediately."

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