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Cab v. City of Elizabeth

April 21, 2008

ELIZABETH YELLOW CAB, PLAINTIFF-APPELLANT,
v.
CITY OF ELIZABETH, DEFENDANT-RESPONDENT.



On appeal from Superior Court of New Jersey, Law Division, Union County, Docket No. L-1204-05.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued December 18, 2007

Before Judges Fuentes and Grall.

Plaintiff, Elizabeth Yellow Cab Inc. ("Yellow Cab") is a taxicab company that has been operating in the City of Elizabeth (the "City") since 1981. In 2005, the City refused to renew plaintiff's certificate of public convenience and necessity and its permits, which are the requisite authorization documents needed to run a taxicab service within the City. The City based its actions on plaintiff's failure to: (1) maintain its corporate charter in good standing; (2) report outstanding judgments against it; (3) report individual judgments against its individual shareholders; and (4) properly maintain insurance by submitting fraudulent insurance documents.

Plaintiff filed an action in lieu of prerogative writs in the Law Division contesting the City's actions. The trial court ordered the City to appoint an independent hearing officer and thereafter hold an administrative hearing. The hearing officer found that the City's decision to refuse to renew plaintiff's certificate and permits was not arbitrary or capricious, and that the hearing conducted afforded plaintiff sufficient due process.

Acting on plaintiff's appeal, the Law Division affirmed the hearing officer's determination and rejected plaintiff's argument that the ordinance is unconstitutional. Plaintiff now appeals the trial court's decision to this court. We affirm.

I.

The corporation operating under the name Yellow Cab is owned by the Pohida family. Pursuant to Elizabeth, N.J., Code ch. 5.100, § 5.100.020, (2005) any individual or company who wishes to operate a taxicab business in the City of Elizabeth must obtain a city certificate of public convenience and necessity ("certificate") and a taxicab permit. Yellow Cab applied for and received its first certificate in 1981. Thereafter, the City renewed Yellow Cab's certificate each year, until 2005.

On February 10, 2005, Yellow Cab submitted its application for renewal. On March 31, 2005, the chief municipal license inspector, Richard T. Lospinosi, sent Yellow Cab a letter informing it that, effective April 1, 2005, the City would not renew Yellow Cab's certificate and permits. The letter ordered Yellow Cab to immediately cease operating its taxicab business. Lospinosi gave the following four reasons for his decision:

1. The Corporation known as Elizabeth Yellow Cab, Inc. has not been in effect and/or in good standing since March 31, 1994. The charter of the corporation was forfeited for failing to submit annual reports. Said corporation failed to account for and/or provide necessary corporate documentation to the City of Elizabeth when previously requested.

2. There are numerous judgments against the entity known as Elizabeth Yellow Cab, Inc. The applicant has failed to disclose judgments on the application, thus submitting [a] fraudulent application.

3. Since the corporation has not been in good standing since March 31, 1994, the personal judgments against all individuals listed as shareholders should have been reported on the application. The existence of these judgments against the corporation and the individuals listed as shareholders on the application, in addition to the failure to disclose this information, demonstrates financial irresponsibility and unfitness to offer public transportation to the residents of the City of Elizabeth.

4. For the period of September 14, 2003 through September 14, 2004, you provided a fraudulent insurance policy and certificate of insurance to the City of Elizabeth and failed to continuously maintain insurance as required by State and Municipal law.

On April 5, 2005, Yellow Cab filed an order to show cause and a verified complaint in lieu of a prerogative writs, seeking authority to remain in business while it challenged the City's actions. The trial court granted plaintiff's request, ordering the City to permit plaintiff to operate its taxi business until further order of the court. On August 18, 2005, the court ordered the City to appoint a hearing officer for the purpose of affording plaintiff an administrative forum in which to challenge the non-renewal of Yellow Cab's certificate and permits.

The hearing officer, Ruth Moscovitch, presided over two days of hearings, during which a total of three witnesses testified. The City presented the testimony of chief license inspector Lospinoso and Ted Merced, an investigator from the Union County ...


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