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Taxicab company owners sue village over unlimited medallions plan

By Dan Hust
MONTICELLO — October 8, 2010 — Despite the village board majority’s approval, no new taxi medallions will be issued in Monticello for at least the next week.
Earlier this week, Alan Kesten, owner of Yellow Cab, and Gary Putter, owner of Sureway Cab, filed suit in state Supreme Court in Sullivan County to block the enactment of the village’s new law allowing an unlimited number of medallions to be made available.
They also are suing for $900,000 in alleged damages, plus attorney’s fees.
Though Judge Mark Meddaugh has not formally ruled on the suit or the request for an injunction and temporary restraining order, he conferred with the involved attorneys – including attorney for the village Dominic Cordisco – and garnered an agreement to not have more medallions issued until papers are submitted to the court on October 18.
Cordisco said the village agreed to the plan because it doesn’t want to create a hardship for companies that buy a new medallion that could suddenly be rendered unusable.
For much of the past century, medallions – each of which allows one taxicab to legally do business in the village – have been limited to 21. These days, Yellow Cab has 16, and Sureway has the other five.
In court documents filed earlier this week, Putter and Kesten affirmed that they bought the medallions from prior cab operators for at least $30,000 apiece.
They argued that the village’s removal of the 21-medallion cap – and the offering of new medallions at just $200 apiece – dramatically lowered the value of their medallions, upon which Putter said they’ve relied for business capital.
Putter and Kesten also told the court through affidavits that their drivers will likely suffer, as they’re paid on commission only and will have to compete for customers with a larger pool of drivers.
“What they did was very detrimental to the drivers and owners,” Putter said in an interview this week.
“What they did was with no investigation, no inquiry to us,” he added, speaking of the board. “I don’t expect these guys to know the taxi business ... but who would they get information from if it isn’t us?”
Putter and Kesten have criticized the board, both in public and in the court documents, for not backing up their 3-2 decision (trustees Carmen Rue and Victor Marinello dissenting) with studies or other documents demonstrating a need for new taxis.
“My objective in this is to simply stop the change of the local law going into effect the way they wrote it,” added Kesten, “because they really haven’t done due diligence and research on this. They haven’t really done anything, actually.”
Mayor Gordon Jenkins is the only board member specifically named in the suit. Village Clerk Janine Gandy, who issues the medallions, and Village Manager John Barbarite are also named.
“I expected a lawsuit,” Jenkins said this week. “The cab companies have, I would say, been monopolized for years.”
The mayor said his job is not to protect businesses but allow free enterprise.
“You can’t deny anyone from coming in here to do business,” he remarked, rejecting allegations that he favors a Middletown businessman who may be interested in bringing new taxi service to the village.
“There’s no favors or sides or friendship deals,” Jenkins insisted.
Gandy said on Wednesday that only one application for one new medallion is on file with the village. While she would not identify the applicant, she confirmed it’s neither Yellow Cab nor Sureway.
Putter, she said, had recently applied for 13 new medallions but was instructed to resubmit his application.

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