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`AFFIRMATION OF D.
`STAN O’LOUGHLIN IN
`OPPOSITION TO THE
`PLAINTIFFS’ MOTION
`TO AMEND THE
`COMPLAINT
`
`SUPREME COURT OF THE STATE OF NEW YORK
`COUNTY OF KINGS
`
`28th Street Management et al.,
`
`
`
`
`
` Plaintiffs,
`
`-against-
`
`
`
`
`
`New York State Department of Tax and Finance and the New York
`City Taxi and Limousine Commission,
`
` Defendants.
`
`
`
`
`
`D. STAN O’LOUGHLIN, an attorney admitted to practice in the courts of the State of
`
`New York, affirms under penalty of perjury pursuant to CPLR 2106:
`
`1.
`
`I am an Assistant Attorney General in the Office of Eric T. Schneiderman, Attorney
`
`General of the State of New York, attorney for defendant New York State Department of Taxation
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`and Finance in the above-captioned matter.
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`2.
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` I submit this affirmation in support of DTF’s opposition to plaintiffs’ motion to
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`amend the Complaint.
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`3.
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`In January 2017, plaintiffs’ counsel requested that DTF consent to plaintiffs’ to
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`amending their complaint. We informed plaintiffs’ counsel that we would only consider such a
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`request after reviewing the proposed amendments, including and exhibits incorporated by reference,
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`to determine whether the proposed amendments would cure any of the numerous fatal deficiencies
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`in the Complaint.
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`4.
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`On or around January 12, 2017, counsel provided us with the proposed amendments
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`and the new documents proposed to be incorporated by reference into the proposed amended
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`Complaint.
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`5.
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`On January 23, 2017, we informed counsel that we would not consent to the
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`proposed amendments. Because the proposed amendments do not cure or even attempt to cure the
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`fatal defects present in the Complaint, amendment would be futile.
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`6.
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`On February 21, 2017, plaintiffs filed the instant motion seeking leave to amend the
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`Complaint pursuant to CPLR 3025, and to replace it with the proposed amended complaint.
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`7.
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`A true and correct copy of the affirmation of David Demeter in support of DTF’s
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`order to show cause, dated October 31, 2016 (Dkt. No. 5) is attached hereto as Exhibit A.
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`8.
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`A true and correct copy of DTF’s memorandum of law in support of its motion to
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`dismiss (“MTD Mem.), dated December 20, 2016 (Dkt. No. 13) is attached hereto as Exhibit B.
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`9.
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`A true and correct copy of the affirmation of David Demeter in support of DTF’s
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`motion to dismiss (“Demeter MTD Aff.”), dated December 20, 2016 (Dkt. No. 14) is attached
`
`hereto as Exhibit C.
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`10.
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`A true and correct copy of the affirmation of D. Stan O’Loughlin in support of
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`DTF’s motion to dismiss (“O’Loughlin MTD Aff.”), dated December 20, 2016, together with
`
`exhibits thereto (Dkt. Nos. 15-25) is attached hereto as Exhibit D.
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`Wherefore, DTF requests that the plaintiffs’ motion to amend the Complaint be denied and
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`_/s D. Stan O’Loughlin__________
`D. Stan O’Loughlin
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`2
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`that the Complaint be dismissed.
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`Dated: New York, New York
`March 7, 2017
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`EXHIBIT A
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`!FILED: KINGS COUNTY CLERK 10/31/2016 04:29 Pij
`NYSCEF DOC. NO. 5
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`SUPREME COURT OF THE STATE OF NEW YORK
`COUNTY OF ICINGS
`
`28th Street Management et al.,
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`Plaintiffs,
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`Index No. 514542/15
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`-against-
`
`New York State Department of Tax and Finance and the New York
`City Taxi and Llmousine Commission,
`
`Defendants.
`
`AFFIRMATION OF
`DAVID DEMETER IN
`SUPPORT OF THE
`ORDER TO SHOW
`CAUSE
`
`DAVID DEMETER, an attorney admitted to practice in the courts of the State of New
`
`York, affirms under penalty of perjury pursuant to CPLR 2106:
`
`1.
`
`I am a Director in the Office of Counsel for defendant New York State Department
`
`of Taxation and Finance ("DTF") in the above-captioned matter. I submit this affirmation based on
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`my personal knowledge and the records ofDTF, in support ofDTF's motion by order to show
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`cause for an order pursuant to CPLR §§ 2004 and 3012(d) extending defendants' time to respond to
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`the complaint from November 1, 2016, to December 15, 2016, and staying defendants' time to
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`respond to the complaint pending the determination of this order to show cause.
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`2.
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`This action, which was commenced on November 30, 2015, was purportedly
`
`brought by hundreds of New York Taxi Medallion owners, who seek an "accounting" of the "MTA
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`taxes" owed by them; to compel the DTF and the Taxi and Llmousine Commission ("TLC") (which
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`is not represented by this Office) to provide plaintiffs with all documents relating to their MTA tax
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`obligations from 2010 to the present, including all amounts owed by each plaintiff; and "an Order
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`commanding [TLC] to review and work with Plaintiffs and I.DTP] with respect to issues surrounding
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`Plaintiffs' MTA Tax Obligations." Complaint, Wherefore Clause.
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`I
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`3.
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`Plaintiff has provided no legal basis to support any entitlement to such extraordinary
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`relief, or any justification why plaintiffs, like every other taxpayer, cannot consult and rely on their
`
`own tax records and any bills, assessments, warrants or notices of determination already provided tb
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`them by DTF, to conduct their own "accounting" and determine any amounts of tax due and owing.
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`4.
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`Since this action was commenced more than 11 months ago, plaintiffs have taken rio
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`action to meaningfully prosecute this case. It has been DTF's understanding that plaintiffs brought
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`this action primarily for the purpose of preserving their purported rights, and that they had no
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`present intention to move forward prosecuting this action without further notice to DTF, in the
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`hopes that their tax liabilities could be resolved by other means.
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`5.
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`Accordingly, DTF and plaintiffs engaged in a course of conduct of regularly
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`extending the time to respond to the complaint, most recently, on July 19, 2016, extending DTF's
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`time to respond to November 1, 2016. Without warning, on October 28, 2016, plaintiffs rejected
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`DTF's request for a further extension of the time to respond to the complaint.
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`6.
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`As a threshold matter, because plaintiffs have allowed this action to languish for
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`almost a year, many of the allegations of the complaint are now stale, raising questions, inter alia,
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`about the authorization to proceed with respect to a number of the plaintiffs.
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`7.
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`In particular, on information and belief, some of plaintiffs in this action are entities
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`owned or controlled by Evgeny Freidman, which own one or more taxi medallions. However, on
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`information and belief, many of the plaintiffs are entities that Freidman does not own or control,
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`but for which he has held himself out as the "authorized representative." See Complaint,
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`Verification.
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`8.
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`On information and belief, Mr. Freidman is no longer the authorized representative
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`of many of these plaintiffs, as these representations have been terminated. This means that Mr.
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`Freidman cannot represent these plaintiffs before DTF, and raises serious questions as to his
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`standing to bring this action on their behalf. The Court should not countenance permitting this
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`action to proceed where it is likely not authorized by (or perhaps even known to) many of the
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`plaintiffs, particularly given that Mr. Freidman's attorneys seek sensitive tax information.
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`9.
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`In addition, the request for information about the taxes owed is particularly galling in
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`light of the fact that Mr. Freidman has failed to provide DTF with the requisite information to
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`calculate the amount of tax owed, as he has failed to file a return or pay any tax on behalf of
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`medallions he owns or controls since the fourth quarter of 2015.
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`10.
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`Given the uncertainty surrounding Mr. Freidman's purported authorization to
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`represent hundreds of plaintiffs, as well as the voluminous nature of the records sought, DTF
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`cannot meaningfully respond to the allegations of the Complaint by November 1, 2016. Indeed, as a
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`threshold matter, Mr. Freidman should prove to the Court that he is authorized to bring suit on
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`behalf of all of the named plaintiffs.
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`11.
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`Plaintiffs counsel has provided no basis why, after 11 months of non-action, they
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`did not provide reasonable notice that they did, in fact, intend to prosecute this action, or why they
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`are unwilling to grant an extension of time.
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`12.
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`No prior request for this relief has been made in this or any other court.
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`WHEREFORE, DTF respectfully requests that the Court extend its rime to respond to the
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`complaint from November 1, 2016 until December 15, 2016. Further, I respectfully request that
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`defendants' rime to answer be stayed pending hearing and determination of this order to show
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`cause.
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`Dated: New York, New York
`November 1, 2016
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`October 31, 2016
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`-
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`David Demeter, Director
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`EXHIBITB
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`SUPREME COURT OF THE STATE OF NEW YORK
`COUNTY OF KINGS
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`28th Street Management et al.,
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`Plaintiffs,
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`Index No. 514542/15
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`-against-
`
`New York State Department of Tax and Finance and the New York
`City Taxi and Limousine Commission,
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`Defendants.
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`MEMORANDUM OF LAW IN SUPPORT OF
`DTF's MOTION TO DISMISS THE COMPLAINT
`
`ERIC T. SCHNEIDERMAN
`Attorney General of the State of New York
`Attorney for Respondent Superintendent
`120 Broadway, 24th Floor
`New York, New York 10271
`(212) 416-8593
`
`D. Stan O'Loughlin
`Assistant Attorney General
`Of Counsel
`
`December 20, 2016
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`PRELIMINARY STATEMENT
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`This Memorandum of Law and the accompanying Affirmations of D. Stan O'Loughlin
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`("O'Loughlin Aff.") and David Demeter ("Demeter Aff.") are submitted in support of the motion
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`by the New York State Department of Taxation and Finance ("DTF") to dismiss the complaint for
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`lack of subject matter jurisdiction and failure to state a cause of action.
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`By this action, Evgeny Freidman, the "Taxi King" - purportedly on behalf of numerous
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`entities that he controls or is the agent of - seeks the extraordinary relief of compelling DTF to tum
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`over all records related to the 426 plaintiffs' Article 29-A taxes (a 50 cent per ride tax on taxis) for
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`the last 6 years and all information regarding how much each of these entities owes for that period.
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`This action, purportedly brought as an action for an "accounting" and for a declaratory judgment,
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`seeks to subvert the normal statutory structure, which places the burden squarely on the taxpayer -
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`not DTF - to keep and produce tax records, calculate tax liability, file accurate and complete returns
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`and timely remit payment. The Complaint also seeks to sidestep the statutorily mandated
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`administrative process for challenging a tax determination, which is the exclusive remedy provided
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`by Legislature for the determination and adjudication of tax liability. The demand that DTF
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`"account" to the plaintiffs for the amount of tax owed by the plaintiffs is particularly galling in light
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`of the fact that Mr. Freidman and the management companies he controls have not timely filed
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`returns or made payments of the amounts indicated on the returns that were filed on behalf of any
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`of the plaintiffs. Thus Mr. Freidman's own inaction has deprived DTF of the sort of basic
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`information upon which DTF relies, in part, in making such a determination, and yet Freidman is
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`now the one demanding such information from DTF.
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`In any event, this action must be dismissed as a matter of law, and it borders on frivolous.
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`As explained below, the Tax Law sets forth a clear, exclusive procedure for obtaining determination
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`of a taxpayer's tax obligation from DTF, which the Complaint does not allege was ever exhausted.
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`There is clear legal authority that the Court does not have subject matter jurisdiction to entertain an
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`action seeking a determination of tax liability where an exclusive statutory remedy is available.
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`In addition, even if there were subject matter jurisdiction, the Complaint fails to state a
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`cognizable cause of action. An action for an "accounting" may only lie against a defendant With a
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`fiduciary duty to the plaintiff, and only where that fiduciary duty has been breached. DTF is not a
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`fiduciary of the taxpayers nor is there any allegation that DTF breached any duty to plaintiffs.
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`Likewise, plaintiffs do not state a cause of action for a declaratory judgment. Because they seek to
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`compel DTF, at state agency, to furnish Mr. Freidman with records and information, this action is in
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`the nature of mandamus to compel, even though they have sought to style it as a declaratory
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`judgment action, because they seek to compel performance by DTF. Mandamus to compel cannot
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`lie here because it is an extraordinary remedy, and because plaintiffs have not identified a clear legal
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`right to relief. Moreover, even if the relief requested were declaratory in nature, it is well settled that
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`the existence of an adequate remedy at law - in this case the administrative remedies before DTF -
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`forecloses proceeding against DTF by way of a declaratory judgment action.
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`f~inally, l\1r. Freidman's and counsel's assertions in the Complaint raise senous concerns
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`about permitting this action to proceed without confirmation that he and his counsel actually
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`represent the plaintiffs in this action and have the right to maintain it on their behalf. First, none of
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`the plaintiffs have actually verified the Complaint - only Mr. Freidman, who purports, without
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`corroboration, to be authorized to represent them. And there is compelling evidence that he is not
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`so authorized: 22 of the plaintiffs were taken to bankruptcy by Mr. Freidman and are now
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`represented by a Chapter 7 trustee who has the sole right to maintain lawsuits on behalf of those
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`plaintiffs.
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`In addition, as Mr. Freidman and his counsel are no doubt aware, at least 75 of the
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`plaintiffs have terminated their agency agreements with Mr. Freidman to date, meaning he is no
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`longer their "authorized representative" as he claims. To allow Mr. Freidman to maintain this action
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`on plaintiffs' behalf, ~epresented by Mr. Freidman' personal attorney, is not only improper, but
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`raises potential conflicts of interest inasmuch as these entities are likely to have interests that diverge
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`substantially from Mr. Freidman's. This is particularly likely in light of the fact that Mr. Freidman
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`has repeatedly failed to timely file tax returns on their behalf, or even to pay the amount indicated on
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`the returns he does file, for which these plaintiffs are nonetheless liable.
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`Accordingly, DTF requests that the Complaint be dismissed as to DTF.
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`STATEMENT OF THE CASE
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`A. Statutory Framework
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`On May 7, 2009, the Legislature enacted Article 29-A of the Tax Law, which imposes a tax
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`of 50 cents per taxicab ride on every taxicab vehicle owner for each taxicab ride that originates in
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`New Yark City and terminates within the territorial boundaries of the Metropolitan Commuter
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`Transportation District (MCTD). 1 Article 29-A became effective on November 1, 2009. See Tax
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`Law § 1280, 1281. "[T]o prevent evasion of the tax imposed by this article, it shall be presumed that
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`every taxicab trip ... that originates in the city is subject to the tax imposed by this article. This
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`presumption shall prevail until the contrary is proven, and the burden of proving the contrary shall
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`be on the person liable for tax." Id. § 1282.
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`Taxicab owners are liable for this tax, and "[i]f the taxicab owner has designated an agent,
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`then the agent shall be jointly liable with the taxicab owner." Id. § 1283(a) and (b). "Even if the
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`TLC has specified that the taxicab owner's agent cannot operate as an agent, that agent shall be
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`jointly liable with the taxicab owner if the agent has acted for the taxicab owner."
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`Id. "Every
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`person liable for the tax imposed by this article shall file a return quarterly with the commissioner."
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`1 The MCTD consists of New York City (that is, the five counties of New York (Manhattan), Bronx,
`Kings (Brooklyn), Queens, Richmond (Staten Island)), and the counties of New York (Manhattan),
`Bronx, Kings (Brooklyn), Queens, Richmond (Staten Island)), and the counties of Dutchess,
`Nassau, Orange, Putnam, Rockland, Suffolk, and Westchester. Public Authorities Law§ 1262.
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`Id. § 1284. Each quarterly return must be filed within 20 days of the end of the quarterly period. Id.
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`Payment of "the total of all tax imposed by this article, on the correct number of trips subject to
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`tax" is due and payable at the time that the filing of the return is due, whether or not a return is filed,
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`or whether a filed return contains the correct calculation of tax: Id. § 1285.
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`Where a taxicab owner has designated an agent, "the agent shall file the returns required by
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`this article and pay any tax due with such return." Moreover, "the agent must perform any act this
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`article requires the taxicab owner to perform, but the failure of such agent to perform any such act
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`shall not relieve the taxicab owner from the obligation to perform such act or from any liability that
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`may arise from failure to perform the act." Id.§ 1283(b).
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`Article 29-A explicitly requires all liable parties -
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`taxicab owners and their agents -
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`to
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`maintain certain records, including, inter alia: records of every taxicab trip, and Hall amounts paid,
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`charged or due thereon and of the tax payable thereon"; taxicab lease contracts; any agreement or
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`arrangement concerning appointment of an agent; any records required to be kept by the TLC; and
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`"such other records and information as the commissioner may require to perform his or her duties
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`under this article." Id. 1286(a). Such records "shall be available for inspection and examination at
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`any time upon demand by the commissioner." Id. 1286(c).
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`The provisions of Article 27 of the Tax Law ("Corporate Tax Procedure and
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`Administration") apply to the tax imposed under Article 29-A with respect to its administration and
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`procedure, including, but not limited to, notices of deficiency, assessments, civil penalties,
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`overpayments, refunds, interest, appeals, hearings, collections, levies, and liens. Tax Law§ 1290. If,
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`upon examination of a taxpayer's return, it is determined that there is a deficiency in the amount
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`paid, DTF may send _a notice of deficiency. If a taxpayer does not file a return, DTF may estimate
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`the tax owed and mail a notice of deficiency. Id.§ 1081(a). Such a notice of deficiency becomes an
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`assessment of the tax owed, along with interest and penalties, unless the taxpayer files a petition to
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`the Tax Appeals Tribunal within 90 days after mailing seeking a determination of the amount owed.
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`Id. § 1081(b), 1089(b). Once the Tax Appeals Tribunal makes its determination, the taxpayer is
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`afforded an opportunity to respond. Id. § 1089(d)(3). The taxpayer bears the burden of proof as to
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`the amount of tax owed.
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`Id. § 1089(e). When a determination of the Tax Appeals Tribunal
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`becomes final, it is subject to judicial review by way of a timely CPLR Article 78 proceeding, which
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`must be commenced in the Appellate Division, Third Department. Id. § 1090(a), 2016. Moreover,
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`the Tax Law expressly states that such an Article 78 is a taxpayer's "exclusive remedy": "The review
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`of a decision of the [Tax Appeals Tribunal] provided by this section shall be the exclusive remedy
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`available to any taxpayer for the judicial determination of the liability of the taxpayer for the taxes
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`imposed." Id. § 1090(b) (emphasis added).
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`B. Factual Background
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`According to
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`the Verified Complaint ("Complaint" or "Comp!."), this action was
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`commenced on behalf of 426 plaintiffs who purport to own, operate or "deal with" New York City
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`taxi medallions. Comp!. 'If 6 (a true and correct copy of the Complaint is attached to the O'Loughlin
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`. Aff. as Exhibit 1). Although the Complaint alleges that plaintiffs are "entities and business
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`corporations," it appears that some of the alleged plaintiffs are also individuals (such as "Vera
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`Feldman" and "Wilfredo Fajardo. See Comp!., Caption). None of the named plaintiffs have actually
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`verified the Complaint. Instead, the Complaint has been verified by Evgeny Freidman, who claims,
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`without documentation or corroboration, that he is the "authorized representative of Plaintiffs."
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`Comp!., Verification.
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`With respect to DTF, the Complaint seeks: (a) an order directing DTF to provide plaintiffs
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`with "any and all documents that reflect or relate" to the 426 plaintiffs' Article 29-A tax obligations
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`since 2010; (b) an order directing DTF to provide plaintiffs with "all information relating to all
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`amounts owed by" any of the 426 plaintiffs relating to their Article 29-A tax obligations since 2010; .
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`and (c) an order directing TLC to "work with" plaintiffs and DTF "with respect to the issues
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`surrounding'' plaintiffs' Article 29-A tax filing obligations. Comp!., Wherefore Clause.
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`The Complaint contains two purported causes of action allegedly entitling the plaintiffs to
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`this extraordinary relief: The first cause of action is styled as an "accounting" action against DTF,
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`which the Complaint alleges "has effective control over Plaintiffs [sic] MTA tax records," and
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`"owes a duty to account the Plaintiffs as to the records it maintains on Plaintiffs' behalf." Comp!. iJiJ
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`33-38. The second cause of action is styled as a "declaratory judgment" action, alleging that an
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`"actual and justiciable controversy presently exists" between plaintiffs and DTF concerning the
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`amount of Article 29-A tax filing obligations owed by plaintiffs, because, the Complaint alleges,
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`DTF has "received" payments on behalf of plaintiffs and plaintiffs have not been notified of the
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`total amounts of these payments. The Complaint does not specify the amount, number, date or any
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`other information about the alleged payments, nor the source of the alleged payments, nor the
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`plaintiffs these payments were allegedly made on behalf of. Although, the Complaint alleges that
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`"plaintiffs have no adequate remedy at law," it also admits that DTF has issued "warrants and levies
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`on tax amounts allegedly owed," yet it does not allege that any plaintiff ever attempted to exhaust
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`the exclusive remedies set out in the Tax Law to bring a proper and timely administrative or judicial
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`challenge to any DTF determinations of the amount of their Article 29-A tax liabilities.'
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`As has been widely reported in the media, Evgeny "Gene" Freidman, who is sometimes
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`referred to as the "Taxi I<:ing," holds himself out as one of the largest operators of New York City
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`taxicabs, controlling around 900 medallions either through an ownership interest or as a purported
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`agent for the owner. See Dan Rivoli, Taxi Tycoon Evgeny Freidman Owes $13M In Taxes NYC
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`Blasted For Doing Nothing About It, New York Daily News, August 29, 2016, attached to
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`2 Also, as set forth in Point III, DTF's information is that ?\fr. Freidman is no longer authorized to represent at least 75
`of the plaintiffs, and therefore would not be authorized to proceed administratively on their behalf before DTF (or
`represent them in court).
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`O'Loughlin Affirmation Exhibit 2. 3 According to vanous reports, and Mr. Friedman's own
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`representations, in recent years he· has experienced serious financial troubles relating to a decline in
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`medallion prices due to competition from car services such as Uber and uncertainty in the taxi
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`market. Id.; Josh Barro, New York Taxi Mogul Seeking a Bailout Says He's Too Big to Fail, N.Y.
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`Times, April 10, 2015; Josh Barro, Taxi Mogul, Filing Bankruptcy, Sees Uber-Citibank Plot, N.Y.
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`Times, July 22, 2015. True and correct copies are attached to O'Loughlin Affirmation as Exhibits 3
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`and 4. Last year, the plaintiffs' counsel in the instant action sent a widely-circulated letter on behalf
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`of Freidman to lenders and politicians (and also obtained by the New York Times, see id.) seeking
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`assistance to "address the unparalleled challenges being faced by the country's medallion industry."
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`Brett Berman, Re: Taxi Medallion Industry at 1, April 9, 2015, attached to O'Loughlin Affirmation
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`Exhibit 5. Among other things, the letter asserts "Mr. Freidman has invested in the rollout of a
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`revolutionary new cashiering system that will change the way drivers associate with his fleet by
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`providing real time access with respect to transactions, histories~ reconciliation and leases." Id. at 5.
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`As indicated in the media, these financial problems led to, inter alia, Mr. Freidman seeking
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`bankruptcy protection on behalf of 22 entities (which controlled 46 medallions), all of which are
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`also plaintiffs here, stemming from a dispute with Citibank over loans that the bank says that Mr.
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`Freidman did not repay. Id. These bankruptcy cases were filed on July 22, 2015 and consolidated in
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`the United States Bankruptcy Court for the Eastern District of New York under Index Number 1-
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`15-43300, before Bankruptcy Judge Carla E. Craig. Plaintiffs' attorney of record in the instant
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`action also appeared on Mr. Freidman's behalf in these bankruptcy proceedings. ~ Notice of
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`Appearance and Request for Notice Filed by Brett A. Berman, Esq., Index No. 1-15-43300, Dkt.
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`No. 14, attached to the O'Loughlin Affirmation as Exhibit 6. In an affidavit filed by Mr. Freidman
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`3 "The court may take judicial notice of newspaper publications (CPLR 4511 [d])." Grebow v. City of N.Y., 173 fvfisc.
`2d 473, 479, (Sup. Ct. N.Y. Cry 1997);
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`in those proceedings, he represents that he "is the personal generally responsible for and familiar
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`with the Debtor's day-to-day business operations, books and records, business affairs, and general
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`financial condition." Id., Affidavit of Evgeny Freidman, 'If 10, July 22, 2015, Dkt. No. 2, attached to
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`the O'Loughlin Affirmation as Exhibit 7. Among other things, he alleges that these entities owe
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`"tax liens totaling approximately $919,717.44" and "unsecured tax obligations of approximately
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`$7,844.00." Id. 'If 47.
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`In a related adversary proceeding brought by Citibank, Judge Craig issued a decision,
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`following trial, finding that Freidman's transfers of the assets of a number of these entities (totaling a
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`value of more than $60 million) into four offshore trusts to benefit himself and his family "were
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`tnade with intent to defraud Freidman's creditors." Adversary Proceeding Decision at 1,January 12,
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`2016, Adv. Proc. No. 1-15-01185 (CEC) Dkt No. 73, attached to the O'Loughlin Affirmation as
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`Exhibit 8. On September 22, 2016, the bankruptcy cases were converted from Chapter 11
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`(reorganization) to Chapter 7 (liquidation), and on October 28, 2016, the Bankruptcy Court issued
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`an order, pursuant to 11 U.S.C. § 105(a) and § 721, authorizing the bankruptcy trustee, Gregory
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`Messer, "in order to preserve the value of Debtors' assets ... to operate the Debtors' businesses."
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`Index No. 1-15-43300, Dkt. Nos. 368, 392, attached to the O'Loughlin Affirmation as Exhibits 9
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`and 10.
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`ARGUMENT
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`The Complaint cites no statutory or other legal authority to support the extraordinary relief
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`requested. Essentially, the Complaint asks this Court to subvert entire statutory structure governing
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`the relationship between the DTP and the taxpayer and their relative responsibilities, without any
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`legal authority or precedent, allegedly in service of the narrow self-interest of the plaintiffs. Contrary
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`to the Complaint's assertions, it is plaintiffs' (and plaintiffs' agents') responsibility to maintain the
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`relevant records for calculation of taxes and to provide them to DTP, not the other way around.
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`Likewise, plaintiffs (and plaintiffs' agents) carry the burden and obligation to correctly calculate the
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`amount of taxes owed by them based on their records, to timely submit quarterly returns accurately
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`reflecting these amounts, and to timely remit the correct payment of any tax owed. It is not DTF's
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`burden or obligation to calculate plaintiffs' tax obligations, particularly when, as here, they have not
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`filed returns for some of the time period at issue, and have not furnished requisite records to DTP.
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`The Complaint's allegations purport to turn the taxpayer's obligations on their head. As set forth
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`above, the Legislature has established a clear, unequivocal and exclusive procedure for taxpayers to
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`utilize if they wish to obtain an authoritative determination of their Article 29-A taxes from DTP,
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`which requires that they first exhaust their administrative remedies before DTP, obtain a final
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`administrative determination, and only then seek judicial review. Moreover, the only permissible
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`form of judicial proceeding authorized by the Tax Law is an Article 78 proceeding which must be
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`commenced in the Appellative Division, Third Department. Thus, the Complaint must be
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`dismissed.
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`I.
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`THERE IS NO SUBJECT MATTER JURISDICTION BECAUSE THE TAX LAW
`SETS FORTH THE EXCLUSIVE REMEDY FOR DETERMINATION OF TAX
`LIABILITY, WHICH WAS NOT EXHAUSTED
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`Plaintiffs' claims fail ab initio, because as set forth above, the exclusive procedure for seeking
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`an authoritative determination of a taxpayer's tax liability is prescribed by statute. This is settled law.
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`The Court of Appeals held in the seminal case of Bankers Trust Corp. v New York City Dep't of
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`Fin., 1 N.Y.3d 315, 321, (2003) that "[a]ctions by taxing officers can be reviewed only in the manner
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`prescribed by statute." In that case, the Court held that pursuant to the exclusive remedy provision
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`of Tax Law§ 1190 (also the provision at issue here), review of a decision of the Tax Appeals
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`Tribunal was plaintiffs statutory exclusive remedy, and the courts did not have jurisdiction to hear
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`the plaintiffs declaratory judgment action. Id.
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`Accordingly, where a plaintiff does "not exhaust his exclusive administrative and statutory
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`remedies," the Court does not have jurisdiction to consider any request for a determination of tax
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`liability, regardless of whether that plaintiff attempts to style his cause