FILED: KINGS COUNTY CLERK 10/12/2017 12:04 AM
`NYSCEF DOC. NO. 44
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`INDEX NO. 514542/2015
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`RECEIVED NYSCEF: 10/12/2017
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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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`-against-
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`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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`Index No. 514542/15
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`AFFIRMATION OF D.
`STAN O’LOUGHLIN IN
`OPPOSITION TO THE
`PLAINTIFFS’ MOTION
`SECOND MOTION TO
`AMEND THE
`COMPLAINT
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`D. STAN O’LOUGHLIN, an attorney admitted to practice in the courts of the State of
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`New York, affirms under penalty of perjury pursuant to CPLR 2106:
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`1.
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`I am an Assistant Attorney General in the Office of Eric T. Schneiderman, Attorney
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`General of the State of New York, attorney for defendant New York State Department of Taxation
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`and Finance (“DTF”) in the above-captioned matter.
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`2.
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`I submit this affirmation in opposition to plaintiffs’ second, successive motion to for
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`leave to amend their original complaint (“Complaint”) pursuant to CPLR 3025(b), filed on
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`September 24, 2017 (“Second Motion to Amend”) (Dkt. Nos 41) – nearly two years after
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`commencement of this action.
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`3.
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`Plaintiffs’ first motion for leave to amend the Complaint (“First Motion to Amend”),
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`filed on February 21, 2017 (Dkt. No. 27) is still pending and has yet to be decided.
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`4.
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`Procedurally, it is nonsensical and improper for plaintiff to maintain two pending,
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`and potentially contradictory, motions for leave to amend the same Complaint in different ways,
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`FILED: KINGS COUNTY CLERK 10/12/2017 12:04 AM
`NYSCEF DOC. NO. 44
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`INDEX NO. 514542/2015
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`RECEIVED NYSCEF: 10/12/2017
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`particularly when the Second Motion to Amend does not attach a copy of the proposed amended
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`complaint, unfairly prejudicing the defendants’ and the Court’s ability to meaningfully address the
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`propriety of any proposed amendment.
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`5.
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`It is black letter law that under CPLR 3025(b) that “[a]ny motion to amend . . .
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`pleadings shall be accompanied by the proposed amended or supplemental pleading clearly showing
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`the changes or additions to be made to the pleading.” Scialdone v. Stepping Stones Associates, L.P.,
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`148 A.D.3d 950, 952 (2d Dept. 2017) (quoting CPLR 3025(b)) (denying leave to amend for failure to
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`attach a proposed amend complaint); Chang v. First American Title Ins. Co. of New York, 20
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`A.D.3d 502, 502 (2d Dept. 2005) (“the Supreme Court providently exercised its discretion in
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`denying the plaintiff's motion for leave to serve an amended complaint since she did not provide a
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`copy of her proposed amended complaint”).
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`6.
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`Furthermore, plaintiffs’ Second Motion to Amend is as futile as “their” First Motion
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`to Amend. The only support provided by plaintiffs for “their” purported motion for leave to amend
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`the Complaint is a 5-page affirmation provided by Mr. Freidman (Dkt. No. 43), the animating force
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`behind this action since its inception. Although Mr. Freidman’s motion is styled as a Second Motion
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`to Amend the Complaint, the relief he explicitly actually seeks is that the Court “dismiss” all of the
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`400+ plaintiff medallion holders, leaving only Mr. Freidman and four “Management Plaintiffs” that
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`he still controls remaining in the action. See, e.g., id. ¶¶ 2-3, 11, 14.
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`7.
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`Contradictorily, Mr. Freidman purports to seek dismissal on behalf of plaintiff
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`medallion holders, while at the same time finally admitting that he is not authorized to represent
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`them – a fact that DTF has raised repeatedly for over a year. Id. ¶¶ 1, 6-7. Although recent events
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`in the public record have made it impossible for Mr. Freidman to maintain the fiction that he may
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`legally or ethically continue to claim authority to act on behalf of the plaintiff medallion holders, he
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`FILED: KINGS COUNTY CLERK 10/12/2017 12:04 AM
`NYSCEF DOC. NO. 44
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`INDEX NO. 514542/2015
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`RECEIVED NYSCEF: 10/12/2017
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`nonetheless continues to whitewash his repeated failures during the last two years that this action
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`has been pending to fully and accurately describe the nature of that relationship. Although plaintiff
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`demands specific and detail information from the defendants, his own averments in support of his
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`sudden request to dismiss over 400 plaintiffs from this action are characteristically non-specific,
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`vague, conclusory and contradictory. For example:
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`a. Despite repeatedly alleging that he was the “authorized representative” of the plaintiffs
`(Complaint, Verification, Dkt. No. 1), Mr. Freidman now claims he is the authorized
`representative of “certain plaintiffs,” although tellingly fails to identify which plaintiffs,
`and that “certain taxicab medallion management licenses were not renewed.” Dkt. No.
`43 ¶ 1, 7.
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`b. Mr. Freidman explains his sudden decision to seek dismissal of plaintiffs he has claimed
`to represent for two years on the basis that “many events occurred.” Id. ¶ 6.
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`c. Mr. Freidman has repeatedly claimed that he acts “on behalf of all plaintiffs” who he
`alleges are “parties united in interest,” (Complaint, Verification, Dkt. No. 1), and yet now
`admits that “some of the plaintiffs have commenced litigation against other plaintiffs.”
`Dkt. No. 43 ¶ 1. Notable, he does not admit the most pertinent fact: that numerous
`plaintiff medallion holders have commenced litigation against him personally.
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`d. Mr. Freidman cites the fact that “dozens” of the plaintiff medallion holders are in
`bankruptcy (although does not identify which ones) as a basis for dismissal, despite the
`fact that Mr. Freidman had already placed “dozens” of the plaintiff medallion holders in
`bankruptcy prior to the commencement of this action, which DTF has repeatedly
`identified as deeply problematic and rife with impropriety. Id. ¶ 7; See also Dkt. No. 5.
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`e. Mr. Freidman again contradicts himself and claims that pursuant to “New York City
`Taxicab and Limousine Rules and Regulations, the Management Plaintiffs had valid and
`enforceable powers of attorney at the inception of this litigation and at times relevant to
`this action that permitted the Management Plaintiffs to act as the duly authorized agents
`for each of the remaining plaintiffs with respect to all matters relating to the operation of
`the subject taxicabs, including the filing of this lawsuit.” Dkt. No. 43 ¶ 10 (emphasis
`added). Tellingly, Mr. Freidman does not actually identify a single specific provision of
`the TLC rules that purportedly provided him with a “power of attorney” to bring this
`action on behalf of the plaintiff medallion owner (let alone authorizing him to
`commence and maintain it in the presence of unwaivable conflicts of interest).1
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`1 To the contrary, the TLC Rules make it clear the a licensed agents scope of authority is limited to certain actions before
`the TLC only, and do not grant plenary authority to represent any medallion holder outside the scope of the TLC, let
`alone commence civil actions on behalf. A true and correct copy of Chapter 63 of TLC’s Rules, entitled “Taxicab Agent
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`FILED: KINGS COUNTY CLERK 10/12/2017 12:04 AM
`NYSCEF DOC. NO. 44
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`INDEX NO. 514542/2015
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`RECEIVED NYSCEF: 10/12/2017
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`Moreover, he does not explain what he means by the “remaining” plaintiffs; the
`Complaint has not been amended, so all of the plaintiffs are “remaining.” Notably,
`although DTF has questioned Mr. Freidman’s authority to represent the plaintiffs since
`the inception of this action, he has never provided the alleged “powers of attorney” he
`claims cloak him with broad, undefined authority on behalf of plaintiffs.
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`8.
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`Plaintiff’s half-hearted and incomplete admissions that he lacks authority to represent
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`the plaintiff medallion holders and has interests that are divergent interests to them is long overdue,
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`but not necessary as there has been a growing public record for months or years in some cases that:
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`(1) Freidman did not have lawful control over numerous plaintiff medallion holders who had been
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`placed in bankruptcy and under control of the trustee; (2) any authorization that Freidman may have
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`had as an agent for any of the plaintiffs in proceedings before TLC has been terminated; (3) many
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`plaintiff medallion holders have, in fact, brought actions against Mr. Freidman, alleging that he failed
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`to fulfill his obligations to them, including, inter alia, taking their money but failing to pay their MTA
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`taxes, for which they are now jointly and severally liable; and (4) Mr. Freidman has been indicted in
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`an ongoing criminal proceeding for criminal tax fraud and grand theft in connection with, inter alia,
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`the taxes he failed to pay on behalf of plaintiff medallion holders, and nonetheless seeks to maintain
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`this action to improperly seek discovery of plaintiff medallion holders’ confidential tax information.
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`See Dkt Nos. 5; 13-15; 33-35; 40.
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`9.
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`For example, as identified by DTF early in this action (Dkt. No 5), 22 of the plaintiff
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`medallion holders had already filed for bankruptcy prior to commencement of this action, and have
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`been under control of the bankruptcy trustee for some time. On September 20, 2017, these
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`plaintiffs filed an adversary proceeding against Mr. Freidman seeking, inter alia, repayment of over
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`Rules” is attached hereto as Exhibit A, and is also available at http://www.nyc.gov/html/tlc/html/rules/rules.shtml.
`Moreover, TLC rules mandate suspension or revocation of an agent’s authority for improper conduct such as “material
`misrepresentation or omission” and for failure to “remit to the appropriate party all taxes and surcharges collected on
`behalf of a Medallion Owner.” §§ 63-08 (a)(1), 63-11(g).
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`FILED: KINGS COUNTY CLERK 10/12/2017 12:04 AM
`NYSCEF DOC. NO. 44
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`INDEX NO. 514542/2015
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`RECEIVED NYSCEF: 10/12/2017
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`$1 million dollars in MTA taxes, for which they are jointly and severally liable, that Mr. Freidman
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`collected but never remitted to DTF. See Messer v. Freidman, Index No. 1-17-01143, Dkt. No. 1
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`(Bankr. E.D.N.Y), a true and correct copy of which is attached hereto as Exhibit B.
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`10.
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`In another case, other plaintiff medallion holders sued Mr. Freidman in Nassau
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`County Supreme Court for, inter alia, failing to remit over $100,000 in taxes due in connection with
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`the operation and management of their medallions. Mr. Freidman never appeared in the lawsuit,
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`and the Court ultimately entered a default judgment for nearly $500,000. See Freemont Taxi et al v.
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`Woodside Management, Inc and Evegeny A. Freidman, Index No. 607386 (Sup Ct. Nassau Cty),
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`Dkt. Nos. 2, 40.
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`11. Mr. Freidman illogically and repeatedly conflates his authority to represent the
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`plaintiff medallion holders with “plaintiffs’ ability to proceed in this action.” Dkt. 43 ¶ 8. The Court
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`should not countenance any request by Mr. Freidman to seek any sort relief, including
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`“amendment” of the Complaint, on behalf of the plaintiff medallion holders, with whom he likely
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`has serious, active conflicts of interest. Contradictorily, he nonetheless continues to ask this Court
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`to “permit the Management Plaintiffs to proceed on behalf of all parties,” (id. ¶ 13) despite having
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`admitted he has no such authority, and having produced no evidence, in nearly two years, that he
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`ever had any authority to represent any of the plaintiff medallion holders or bring this action on
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`their behalf.
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`12.
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`The Court need not resolve the issue of Mr. Freidman’s lack of authority to
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`represent the plaintiff medallion holders or seek relief on their behalf, because removing them from
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`the caption or the case does not resolve the fatal defects in the Complaint, which must be dismissed.
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`in any event. The Complaint’s fatal defects have already been detailed extensively in DTF’s still-
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`pending motion to dismiss to the Complaint (the “MTD”). See Dkt. Nos. 12-25. These motion
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`FILED: KINGS COUNTY CLERK 10/12/2017 12:04 AM
`NYSCEF DOC. NO. 44
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`INDEX NO. 514542/2015
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`RECEIVED NYSCEF: 10/12/2017
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`papers include DTF’s memorandum of law in support of the MTD (Dkt. No. 13), and the
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`supporting affirmations of David Demeter (Dkt. No. 14) and D. Stan O’Loughlin (Dkt. No. 15),
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`along with the exhibits thereto. Dkt. Nos. 16-25.
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`13.
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`Furthermore, the Second Motion to Amend should be denied as futile for the same
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`reasons that the First Motion to Amend must be denied. DTF’s opposition to plaintiff’s First
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`Motion to Amend addresses the futility of the proposed amended complaint, attached to plaintiffs’
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`First Motion, and is equally applicable to the Second Motion to Amend. See Dkt. Nos. 33-35. These
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`papers include DTF’s memorandum of law in opposition to the First Motion to Amend (Dkt. No.
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`33), and the supporting affirmations of David Demeter (Dkt. No. 34) and D. Stan O’Loughlin (Dkt.
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`No. 35).
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`14.
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`The Supplemental Affirmation of David Demeter, filed on August 1, 2017, sets forth
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`additional factual developments pertinent to the pending motions, particularly in relation to the fact
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`that amendment is futile because the Complaint also should be dismissed in light of the ongoing
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`criminal prosecution against Mr. Freidman’s relating to the same subject matter. Dkt. No. 40.
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`Wherefore, DTF requests that the plaintiffs’ motions to amend the Complaint be denied and
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`that the Complaint be dismissed.
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`Dated: New York, New York
`October 11, 2017
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`_/s D. Stan O’Loughlin__________
`D. Stan O’Loughlin
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