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Pervaiz v. Queens Medallion Leasing, Inc.

Sup Ct, New York County

August 14, 2013

KHALID PERVAIZ, Individually and on behalf of all other similarly situated, Plaintiff,
QUEENS MEDALLION LEASING, INC., Defendant. Index no. 450220/12

Unpublished Opinion


Melvin L. Schweitzer, J.

The core questions in this case are whether the plaintiff, Khalid Pervaiz (Taxi Driver), states 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 Queens Medallion Leasing, Inc. (Medallion Owner) moves to dismiss the complaint pursuant to CPLR 3211 (a) (7).


The plaintiff is a Taxi Driver who leased a medallion from the defendant for a taxi cab that is operated within the City of New York. As alleged in the Third Amended Complaint (Complaint), pursuant to a written contract, defendant and plaintiff agreed that 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 Driver who leased the medallion, leading to weekly payments in excess of $800. The Taxi Driver paid the alleged overcharges that the Medallion Owner demanded.

The Taxi Driver alleges 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 the Taxi Driver in excess of the lease cap.


Queens Medallion Leasing's motion to dismiss the complaint is pursuant to CPLR 3211(a)(7).

In assessing a pleading under CPLR 3211, 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 taken as "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 inadequate to sustain a complaint. Ullman v Norma Kamali, Inc., 207 A.D.2d 691, 692 (1st Dept 1994); accord Delran 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 plaintiff asserts an unjust enrichment argument against the defendant (Third Cause of Action), alleging 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., 12 N.Y.3d 132, 142 (2009). Since the Taxi Driver also asserts a contract claim concerning the lease cap (First Cause of Action), his 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 Driver's 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 Driver never claims to have been charged more than 5% on credit card transactions, which fatally harms this cause of action.

Additionally, the Taxi Driver's 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 plaintiff fails 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. The plaintiff states a ...

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