2 Cab Firms Fail to Forfeit Bonds

The city of Los Angeles has been unable to collect $20,000 performance bonds from two San Fernando Valley taxi firms that were penalized seven months ago for violating franchise agreements.

The city’s Board of Transportation Commissioners assessed the penalties on Oct. 29 against Valley Cab Co., which was accused of running misleading ads in phone books, and San Fernando Valley Checker Cab Co., which failed to provide services as promised.

While Valley Cab has fought the penalties, saying the panel exceeded its jurisdiction by ordering the bond to be forfeited, a Checker Cab representative said his company is trying to comply.

Senior Transportation Engineer Alan Willis, who oversees taxi franchises for the city, said he has been meeting with lawyers in the city attorney’s office to decide how the city should respond.

For now, he said the city will allow both firms to continue operating.

The assessment of the penalties against both firms was the latest episode in a long, heated business dispute between the two cab companies that began when Checker Cab won a city franchise to operate in the Valley. For eight years prior, Valley Cab had been the only cab company authorized by the city to operate in the Valley.

Both firms have complained to the Board of Transportation Commissioners that the other was violating city regulations.

At the Oct. 29 meeting, city transportation officials accused Valley Cab of running ads in several telephone books under various names, including the name of its rival, Checker Cab.

Lloyd Conway, president of Valley Cab, and his attorney, Steven M. Neimand, argued that Valley Cab has the right to use the other names. They also argued that some of the ads were placed by the company’s general manager, George Piedra, independently of Valley Cab.

The board rejected Conway and Neimand’s arguments and ordered Conway to forfeit a $20,000 bond that the firm had with the city. The board also ordered Conway to post within 30 days a new $100,000 performance bond, which the board promised to revoke if the firm continued to run such ads.

Neimand said Valley Cab has told its bonding company to withhold the bond because it is disputing the panel’s action based on several “technical legal points,” about which he declined to elaborate. But he said, foremost, the panel exceeded its jurisdiction in ordering the bond to be forfeited.

On behalf of Valley Cab, Neimand filed a writ of mandate on March 25 in Van Nuys Superior Court, urging the court to keep the city from taking the bond and requiring a second $100,000 bond, according to court records. The writ described the actions of the Board of Transportation Commissioners as “unreasonable and arbitrary and an abuse of discretion,” according to court records.

The request was rejected the same day, court records said.

At that same Oct. 29 meeting, Checker Cab was ordered by the board to forfeit its performance bond for failing to put 44 cabs on the road by Oct. 22, as promised. A Checker Cab representative said the company missed the deadline by five days because of delays in getting the cabs from the automobile manufacturer.

Masood Babaeian, president of Babaeian Transportation Co., said Tuesday that he has ordered his bond company to forfeit the bond in compliance with the city order.

“I don’t know why they are dragging their feet,” he said.

A spokeswoman for the insurance firm that manages Babaeian’s bond said the firm is in the process of turning it over to the city as requested.