Village Taxi Corp. v. Beltre

933 N.Y.S.2d 694 (2011)

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Nature of the Case

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Facts

P (Pedro Montoya and his wife, Yodna Vivanco-Small) purchased from Ds (Ramon Beltre and Janeth Campos) all of the outstanding capital stock and assets of two taxi companies, (Village Taxi Corp. and Port Chester Taxi Corp.) for the sum of $300,000. The purchase price specifically includes goodwill, a covenant not to compete, equipment, and a leasehold. The agreement makes no references to any licenses. An addendum to the agreement was executed which states: 'The nine motor vehicles and the nine taxi licenses issued by the Village of Port Chester is included in the transaction as part of the equipment sold...The purpose of this Agreement is to ratify the transfer of the nine cars and the nine licenses.' In July 2007, Ps commenced this action against Ds. Ps claimed fraudulent inducement by Ds claiming the taxicab licenses were 'free and clear of any and all claims, liens, or encumbrances.' It was later learned that the licenses were not properly held by companies Ps just purchased. The licenses were in the names of the drivers. The Supreme Court determined that while the Port Chester Village Code required Ps to apply for permission to transfer the subject taxi licenses, Ps conceded that they did not seek approval of any license transfer. The Supreme Court found that Ds were 'just as guilty in participating in this scheme,' and that because the regulations at issue were established to protect public health and safety, the portion of the parties' addendum pertaining to the licenses was against public policy and therefore unenforceable. The Supreme Court determined, that it was 'not disproportionate to decline to enforce the parties' agreement, especially since Ps have already reaped benefits from their fraudulent action.' Ps appealed and contend that the agreement clearly and unambiguously provides that Ds would furnish Ps with good and marketable title to the nine taxicab licenses. Ps claim that the Supreme Court should not have considered any extrinsic evidence with respect to whether the agreement required Ds to convey the nine taxicabs and the nine taxicab licenses. Ps contend that triable issues of fact exist as to the causes of action, in effect, to recover damages for fraudulent inducement and breach of contract asserted against Ds.