(a) Applicability.
(1) This 35 RCNY § 58-47 applies:
(i) To all Transferees other than Administrators and Legatees.
(ii) To all Transferors other than an Administrator/operator making a distribution to a Legatee.
(2) This 35 RCNY § 58-47 does not apply to Secured Lender Recipients.
(b) Provisions for Satisfaction of Tort Liabilities.
(1) The parties to any applicable transfer must prove that provisions have been made to satisfy all outstanding tort claims against the Transferor of the Taxicab Medallion.
(2) This can be accomplished either by:
(i) Posting a bond with the Chairperson to cover all outstanding tort liabilities; or
(ii) Establishing an escrow account in the Escrow Amount (not exceeding the Maximum Escrow Amount), determined as described in subdivision (c) below.
(3) No transfer of the Taxicab Medallion(s) can occur until:
(i) The bond is posted
(ii) The Escrow Amount is established and the escrow agent has given an undertaking to the Chairperson to establish and hold the escrow account on the terms required by this 35 RCNY § 58-47 and to notify the Chairperson within five days after the escrow account has been established, or
(iii) It is determined by the Chairperson that neither a bond nor an escrow account is required.
(4) Secured Lender Recipients must create an escrow account in the amount of the Secured Lender Escrow Amount.
(c) Determining the Amount of the Escrow Account.
(1) Identify Potential Claimants. The Transferor must identify the holders of all potential Excess Claims, by obtaining and reviewing the following sources of information:
(i) All Valid Claim Letters held in Commission files
(ii) Prior Claim Letters held in Commission files
(iii) Tort Letters
(iv) Potential claims revealed through the lien, judgment and lawsuit searches required under 35 RCNY § 58-45(n), above.
(2) Notify Potential Claimants.
(i) The Transferor must provide adequate mail notice, as described in subdivision (3) below, to the holder of each potential Excess Claim. The notice must state the following:
A. Whether the Transferor believes the holder's claim is a potential Excess Claim and the dollar amount (including $0) that Transferor proposes to establish for that claimant's claim.
B. That the claimant has 30 days from the date of the notice to object to the amount by sending a written response to the Transferor (with a copy to the Commission, attention Legal Department Transfer Division); the response must state the basis for claimant's objection to the proposed Escrow Amount.
C. That if the Commission does not receive the claimant's objection within the 30 day period, the Commission will consider the claimant to have accepted the Transferor's proposal regarding the Escrow Amount to be established for the claim.
D. That claimant's acceptance of or failure to object to the Transferor's proposed Escrow Amount will not affect any rights, claims or remedies the claimant has directly against the Transferor.
(ii) If the Commission does not receive the claimant's objection within 30 days from the date of the notice, the Commission will consider the claimant to have accepted the Transferor's proposal regarding the Escrow Amount to be established for the claim.
(3) Adequate Mail Notice to Potential Claimants. Transferor's notice to potential claimants must be sent by certified mail, return receipt requested, with a copy also sent by regular mail and a copy sent to the Commission, attention "Legal Department Transfer Division," as follows:
(i) For potential claimants disclosed by the lien, judgment and lawsuit searches required under 35 RCNY § 58-45(n) above, adequate notice will be considered given if the following steps are taken:
A. Notice is sent to the address for the claimant disclosed by the search
B. If this mailing is returned as non-deliverable, the notice is sent to any other address for the claimant or claimant's attorney of record disclosed by the search.
(ii) For potential claimants disclosed by a Prior Claim Letter or a Valid Claim Letter, adequate notice will be considered given if the following steps are taken:
A. Notice is sent to the sender of the letter and
i. To the claimant at the address disclosed in the letter, or
ii. If no address for the claimant is disclosed, to whatever address the sender provides in the letter.
B. If these mailings are returned as non-deliverable, notice must be sent to any subsequent address provide for claimant by:
i. The sender of the letter, or
ii. The recipient of the notice at the subsequent address of a further address for claimant.
(iii) For potential claimants disclosed by a Tort Letter, adequate notice will be considered given if the following steps are taken, as necessary:
A. Notice is sent to the address disclosed in, by or through the Tort Letter or to any counsel of record disclosed in, by or through the Tort Letter
B. If neither the claimant's address nor counsel of record is disclosed by the Tort Letter, Transferor must consult with the insurers providing the Tort Letter to ascertain an address for claimant or for claimant's counsel of record and notice must be sent to any address provided by the insurer
C. If a recipient of the notice at this address (or any subsequent recipient who is neither the claimant or claimant's counsel) provides a subsequent address for claimant or claimant's counsel, notice must be mailed to all subsequently provided addresses
D. If no address can be obtained for the claimant or claimant's counsel or representative, public notice of the contents of the notice must be placed in the New York Times and The New York Law Journal as a public notice for one business day.
(iv) The Transferor must provide the Chairperson with proof of all mailings by providing:
A. A copy of the mailing receipts
B. An affidavit or affirmation under penalty of perjury verifying the mailings.
(4) Response to Claimant's Objection. If a claimant sends a timely objection, the Chairperson will refer the matter to OATH to determine the amount of claimant's claim to be included in the Escrow Amount.
(i) OATH's rules of practice will govern the proceedings and OATH will apply principles of tort law.
(ii) For the purposes the this proceeding, the OATH terminology will apply as follows:
A. The claimant will be considered to be the "Petitioner"
B. The response sent by claimant objecting to the proposed Escrow Amount will be considered to be the "Petition"
C. Transferor will be considered the "Respondent"
D. Transferor's original notice to claimant will be considered to be the "Answer."
(5) Settling the Escrow Amount by Agreement.
(i) At any time, the Transferor and claimant can agree on the amount of the claim to be used in establishing the Escrow Amount for the claim.
(ii) If the parties reach an agreement, it must be verified in writing and signed by both parties with a copy provided to the Chairperson.
(6) Finalizing the Escrow Amount. If the parties have not reached agreement:
(i) The Chairperson will make a final determination of the required Escrow Amount for each claim, as follows:
A. Any Escrow Amount determined by OATH will be the Escrow Amount for that claim;
B. When the claimant has not objected, the Chairperson's determination will be based on the Transferor's proposed Escrow Amount for the claim;
C. If the claimant and the Transferor have come to a written agreement, the Chairperson's determination will be based on that agreement.
(ii) The Chairperson's determination will be a final agency determination regarding Escrow Amount(s) for the purpose of transferring the Medallion, but is not and is not intended to determine the actual merits of the claim(s).
(d) When the Escrow Amount Cannot Be Reasonably Determined.
(1) If Tort Letters cannot be obtained for all or any part of the period for which they are required to be provided (see 35 RCNY § 58-45(o) above) the Escrow Amount will be as follows:
(i) When a Secured Lender Recipient is foreclosing on a Taxicab License and the transfer is occurring as a result of that action, the escrow account will be established in the amount of the Secured Lender Escrow Amount;
(ii) For all other applicable Transferors, the escrow account will be established in the Maximum Escrow Amount.
(2) An escrow account created with either a Secured Lender or Maximum Escrow Amount must be maintained for the shorter of:
(i) Six years following the date of transfer, or
(ii) As required by subdivision (e) below, provided that all Tort Letters have been obtained and Transferor has determined the appropriate Escrow Amount under subdivision (c) above.
(e) The Escrow Account When Amount Is Determinable.
(1) Creating the Escrow Account.
(i) Once the Escrow Amount has been determined, an escrow account in that amount will be established from the proceeds of the transfer or other resources of the Transferor and maintained until all claims represented in the account are satisfied or released, as described subdivision (2) below.
(ii) The Escrow Account can be held by either:
A. Counsel for the claimant,
B. Counsel for the Transferor, or
C. Otherwise as the claimant and Transferor agree.
(iii) The parties must notify the Chairperson as to who is holding the account.
(2) Releasing Funds from the Escrow Account.
(i) Any person or entity seeking a release of funds from the escrow account must show that the claim is no longer outstanding by providing one of the following forms of evidence:
A. Proof of release of the claim
B. Proof of satisfaction of the claim
C. Proof of dismissal of the underlying claim
D. Agreement of the parties settling the claim
E. A court judgment directing payment of all or part of the Escrow Amount to a party.
(ii) If the evidence is a court order, it must be a final order, fully executed and, if necessary, filed or entered.
(iii) No funds will be released from the escrow account without the prior written approval of the Chairperson.
35 RCNY § 58-47(e) | Fine: $10,000 | Appearance NOT REQUIRED |