Taxi Firm Risks Losing Permit for Withholding $20,000 Bond : Transit: Valley Cab refuses to pay a penalty over its ads. But Los Angeles is losing patience and may consider taking action.

A San Fernando Valley taxi firm may be in jeopardy of losing its permit to operate because it has withheld a $20,000 bond that the city of Los Angeles ordered forfeited nearly a year ago, city officials said.

Van Nuys-based Valley Cab Co. was ordered by the city’s Board of Transportation Commissioners to give up the bond last October as a penalty for running ads in telephone books under the names of other cab companies.

But Valley Cab has challenged the board’s order in a lawsuit, insisting that it has the right to advertise under other names, including the name of its chief competitor in the Valley, Burbank-based San Fernando Checker Cab.

City officials say they are beginning to lose patience with Valley Cab and may begin to consider revoking its franchise permit to operate in the city if the delays continue.

“I think it’s in the best interest of Valley Cab to clear this up as soon as possible,” said Transportation Commissioner Nathan Chroman, who has been critical of Valley Cab.

He noted that all taxi franchise agreements with the city of Los Angeles will expire in August, 1994, requiring renewal by the board. “Anybody reviewing its record would have second thoughts about renewing the franchise,” Chroman said.

When the board ordered Valley Cab’s bond forfeited on Oct. 29, 1992, it also ordered the company to post within 30 days a new $100,000 performance bond.

During the same hearing, Checker Cab Co., the only other taxi firm permitted to operate in the Valley, was also ordered to forfeit its $20,000 bond for failing to provide services as promised.

While Checker Cab agreed to turn over the bond as ordered, Valley Cab fought the penalties, instructing its insurance company to withhold the bond.

The penalties assessed against both firms resulted from a long, heated business dispute between the two firms that began when Checker Cab won a city franchise in March, 1992, 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.

Chroman said the money from Valley Cab’s bond was to be used to set up an account to help the taxi industry fight against “bandit” taxis, those cabs that operate without city permits.

Valley Cab owner Lloyd Conway said he will withhold the bond pending the outcome of a lawsuit filed by his lawyer about six months ago, challenging the city’s right to assess the penalty.

He contends that Valley Cab purchased the right to the name Checker Cab, and said other cab companies in the city have been allowed to advertise under other names.

“If they win in court we will write them a check in two seconds,” he said. “We don’t really care about the $20,000.”

But Assistant City Atty. Shelley Smith, who oversees the case for the city, said there is no reason for the delays. She said city officials have determined that Conway cannot use other fictitious names.

Furthermore, she said the city may begin to consider revoking the company’s franchise unless the bond is forfeited soon.

“The bond forfeiture was appropriate, and that means Mr. Conway and Valley Cab should pay the amount or forfeit the bond,” Smith said.

In January, she said, it seemed as though Conway was going to give up his fight when his attorney, Steven M. Neimand, said Conway was willing to pay $20,000 in lieu of giving up the bond. But that never materialized, Smith said.

“Why those monies haven’t been remitted to date is a mystery to me,” she said.