August 21, 2012
DIEGO DE LA ROSA and OTAR KUKHALASHVILI, Individually and on behalf of all other similarly situated, Plaintiffs,
ALL TAXI MANAGEMENT, INC., Defendant Index No.653424/11
DECISION AND ORDER
Melvin L. Schweitzer, J.:
The core questions in this case are whether the plaintiffs, Diego De La Rosa and Otar Kukhalashvili (together referred to as Taxi Drivers), state valid causes of action for breach of contract, unjust enrichment and violations of TLC Rules 58-21(C)(4) and 58-21(F)(3). Defendant All Taxi Management, Inc. (Medallion Owner) moves to dismiss the complaint pursuant to CPLR 3211 (a) (7).
Plaintiffs are Taxi Drivers who leased medallions from the defendant for cabs that are operated within the City of New York. As alleged in the Third Amended Complaint (Complaint), pursuant to written contracts with each plaintiff, defendant and plaintiffs agreed that each plaintiff would pay defendant a weekly rate of $800, with the amount being slightly higher for hybrid vehicles. As further alleged in the Complaint, the defendant systematically overcharged the Taxi Drivers who leased medallions, leading to weekly payments in excess of $800. The Taxi Drivers paid the alleged overcharges that the Medallion Owner demanded.
The Taxi Drivers allege that the basic lease fees at issue were capped in the form contract at $800, as set by the rules of the New York City Taxi and Limousine Commission (TLC). TLC rules place a cap, which apply to weekly leases and driver-owned-vehicle leases, on the amount a taxi medallion owner, broker or agent can charge when leasing a taxi medallion. The Medallion Owner, on a systematic basis, has allegedly charged drivers in excess of the lease cap.
In assessing a pleading under CPLR 3211 (a) (7), the court must determine whether "from the complaint's four corners, 'factual allegations are discerned which taken together manifest any cause of action cognizable at law.'" Gorelik v Mount Sinai Hosp. Ctr., 19A.D.3d 319, 319 (1st Dept 2005) (quoting Guggenheimer v Ginzburg, 43 N.Y.2d 268, 275 (1977)). Also, under this rule, the facts alleged in the complaint are "true and accorded every favorable inference." Quatrochi v Citibank, N.A., 210 A.D.2d 53 (1st Dept 1994). However, allegations that "consist of bare legal conclusions" or are "inherently incredible or flatly contradicted by documentary evidence" are in adequate to sustain a complaint. Ullman v Norma Kamali, Inc., 207 A.D.2d 691, 692 (1st Dept 1994); accord DeIran v Prada USA, Corp., 23 A.D.3d 308 (1st Dept 2005); HT Capital Advisors, LLC v Optical Res. Group, Inc., 276 A.D.2d 420 (1st Dept 2000).
The Taxi Drivers assert an unjust enrichment argument against the Medallion Owner (Third Cause of Action), specifically that "by overcharging and by circumventing the lease cap, [the Medallion Owner has] been enriched at plaintiffs expense . . ." The unjust enrichment theory "lies as a quasi-contract claim. It is an obligation imposed by equity to prevent injustice, in the absence of an actual agreement between the parties concerned." IDT Corp. v Morgan Stanley Dean Witter &Co., \2 N.Y.3d 132, 142 (2009). Since the Taxi Drivers also assert a contract claim concerning the lease cap (First Cause of Action), their unjust enrichment claim is dismissed, as it is duplicative of the contract claim. See Katz v American Mayflower Life Ins. Co. of N.Y., 5 N.Y.3d 561.
Likewise, the Taxi Drivers' claim related to excessive credit card fees (Second Cause of Action) fails. The parties do not dispute that the TLC rule concerning credit card fees authorizes a fee of up to 5%. In the Complaint, the Taxi Drivers never claim to have been charged more than 5% on credit card transactions, which fatally harms this cause of action.
Additionally, the Taxi Drivers' claims (Fourth and Fifth Causes of Action) regarding how the Medallion Owner violated TLC Rule 58-21(C)(4) and (F)(3) regarding express vehicle fees and credit card overcharges are dismissed for lack of standing. This court agrees with the Medallion Owner's argument that there is no explicit private right of action for a violation of the TLC rules. When a statute does not contain a provision allowing for civil damages, a potential litigant may only recover damages if a private right of action can be implied. See Sheehy v Big Flats Cmty. Day, Inc., 73 N.Y.2d 629, 633-34 (1989). A private right of action can be implied if each prong of a three-part test is satisfied, in which a plaintiff must demonstrate: (1) that he is a member of the class that the statute was enacted to benefit; (2) that the recognition of a private right of action would promote the legislative purpose; and (3) that the creation of such a right would be consistent with the legislative scheme. Carrier v Salvation Army, 88 N.Y.2d 298, 302. This court agrees with the defendant's contention that the plaintiffs fail to satisfy the second and third prongs.
However, the defendant's contention that the breach of contract claim concerning the violation of the express vehicle fees (First Cause of Action) should be dismissed pursuant to CPLR 3211(a)(7) is untenable. A signed contract exists with a lease rate of $800, as specified in the Complaint. Further, the plaintiffs state sufficient facts in their Complaint to allow this action to reach discovery.
Accordingly, it is
ORDERED that Medallion Owner's motion to dismiss the First Cause of Action pursuant to CPLR 3211 (a)(7) is denied; and it is further
ORDERED that Medallion Owner's motion to dismiss the Second, Third, Fourth and Fifth Causes of Action pursuant to CPLR 3211 (a)(7) is granted.