Dep t of Consumer Affairs v. Riverdale Towing Associates, Inc. OATH Index No. 1848/17, mem. dec. (Aug. 3, 2017)

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1 Dep t of Consumer Affairs v. Riverdale Towing Associates, Inc. OATH Index No. 1848/17, mem. dec. (Aug. 3, 2017) In default proceeding, petitioner established that respondent licensees unlawfully towed vehicles, overcharged customers, refused to accept credit cards, engaged in unlawful booting of a vehicle, and violated several of DCA s record-keeping, reporting, and licensing requirements. ALJ ordered a total civil penalty of $20,350, as well as $351 in restitution to consumers. ALJ further ordered revocation of tow truck company s license, and a 20-day suspension of tow truck driver s license. However, ALJ found violations did not warrant a finding that respondents are permanently unfit to hold a DCA license. NEW YORK CITY OFFICE OF ADMINISTRATIVE TRIALS AND HEARINGS In the Matter of CITY OF NEW YORK DEPARTMENT OF CONSUMER AFFAIRS Petitioner - against - RIVERDALE TOWING ASSOCIATES, INC. and SALVADOR COLLAZO Respondents JOHN W. BURNS, Administrative Law Judge MEMORANDUM DECISION Petitioner, the New York City Department of Consumer Affairs ( DCA ), brought this proceeding pursuant to City Charter section 2203(h), Administrative Code sections and , and rule 6-01 of title 6 of the Rules of the City of New York ( Rules or RCNY ). Respondent Riverdale Towing Associates, Inc. ( Riverdale ) holds a DCA towing company license and respondent Salvador Collazo, the company s manager, holds a DCA tow truck driver s license. Petitioner alleges that respondents have violated several of the DCA laws and rules governing tow truck companies and drivers, and seeks a total of $258,800 in civil penalties, $351 in restitution to consumers, and revocation of respondents DCA licenses. Additionally,

2 - 2 - petitioner seeks a finding that Riverdale is unfit to hold any DCA licenses in the future and that Mr. Collazo is permanently unfit to manage, operate, or own a business that holds a DCA license. At trial on April 10, 2017, respondents failed to appear. Petitioner submitted proof of service that satisfied the jurisdictional prerequisites for finding respondents in default and the matter proceeded in the form of an inquest (ALJ Exs. 2, 3). Petitioner presented documentary evidence, including affidavits from consumer complainants, and the testimony of three witnesses: a Department Director of Enforcement from the Bronx, Mr. Herencia, a Department compliance associate, Ms. Matatov, and a complaining consumer, Mr. Scher. For the reasons set forth below, I sustain seven violations against Riverdale, and dismiss five violations. Riverdale is ordered to pay a civil penalty of $16,850 and $351 in restitution. For Mr. Collazo, two violations are sustained and four dismissed, and he is ordered to pay a civil penalty of $3,500. Mr. Collazo is jointly liable for $80 in restitution. Further, Riverdale s towing company license is revoked and Mr. Collazo s tow truck driver s license is suspended for 20 days. Respondents, however, are not found permanently unfit to hold any DCA licenses in the future. BACKGROUND DCA initiated this investigation after receiving complaints that respondent, Riverdale Towing Associates, Inc., was unlawfully towing vehicles from a parking lot in the Riverdale section of the Bronx. These incidents took place in October Following these complaints, DCA issued a subpoena to Riverdale on November 9, 2016, requesting towing receipts, credit card receipts, all written authorization forms, and all rosters of drivers for the period for May 2016 and October 2016 (Tr. 63, 64; Pet. Ex. M). In response, Riverdale submitted some, but not all, of their towing receipts and failed to provide credit card receipts, written authorization forms, or rosters of drivers for the period in question (Tr ). As part of their investigation, DCA obtained additional receipts from the 50th precinct of the New York City Police Department ( NYPD ) in the Bronx (Tr. 26, 31). In December 2016, an additional consumer submitted a complaint about Riverdale to DCA. Upon review of the collected records and consumer complaints, DCA has brought twelve charges against Riverdale and six charges against Mr. Collazo. Riverdale and Mr. Collazo are

3 - 3 - charged separately as DCA licensees. Riverdale is licensed as a towing company (Pet. Ex. G; Tr ). Mr. Collazo is the manager of the company and holds a DCA tow truck driver s license (Pet. Exs. H, I; Tr. 42, 44, 47). The charges here include prohibited towing activities as well as various violations of DCA s reporting, licensing, and recordkeeping requirements. As detailed below, seven charges are sustained against respondent Riverdale, and five dismissed. Two charges are sustained against Mr. Collazo, and four are dismissed. ANALYSIS Consumer incidents and violations The following violations are based on incidents in which Riverdale attempted to tow, towed, or booted the vehicles of four different complainants. One complainant testified at trial, and three complainants submitted affidavits. Unlawful removal of properly parked vehicles from private property (Violation I) Petitioner charges both Riverdale and Mr. Collazo with one count each of unlawful removal of a vehicle from a private parking lot. The law provides that a tow truck operator may remove vehicles that are parked on private property in a manner inconsistent with posted instructions, and pursuant to a contract between the owner of the private property and the licensed tow operator for the removal of any such improperly parked vehicles. Admin. Code (a) (Lexis 2017) (emphasis added). To support this charge, petitioner submitted an affidavit from consumer Julia Schwartz- Leeper. According to Ms. Schwartz-Leeper, on December 5, 2016, her vehicle was parked in compliance with the instructions posted in the Skyview Shopping Center parking lot, which indicated that patrons could park in the lot for up to two hours (Pet Exs. E, L). Ms. Schwartz- Leeper parked her car in the lot, which is located at Riverdale Avenue, at approximately 11:00 a.m. to attend a work meeting at the Dunkin Donuts located in the shopping center (Pet. Ex. E). As she approached the entrance to Dunkin Donuts, she received a message that her colleague would be late to the meeting (Pet. Ex. E). Ms. Schwartz-Leeper then briefly crossed the street to check the distance of the post office from the shopping center (Pet. Exs. E, L). She then immediately walked back to the Dunkin Donuts to wait for her colleague (Pet. Exs. E, L).

4 - 4 - At around 12:15 p.m., Ms. Schwartz-Leeper exited the Dunkin Donuts to find that her car was no longer in the lot (Pet. Exs. E, L). She estimated that she had been in the Dunkin Donuts for less than an hour (Pet. Exs. E, L). Petitioner submitted a receipt showing that the car was towed by Riverdale to 2768 Webster Avenue at 11:15 a.m. and that Ms. Schwartz-Leeper was charged $136 for the tow (Pet. Ex. L). The receipt identifies the tow truck driver as Kevin Ortiz (Pet. Ex. L). Petitioner has established that Ms. Schwartz-Leeper s car was parked in the lot for less than two hours. This time limit was the only posted instruction that was presented at trial. Because respondent did not appear to offer proof that Ms. Schwartz-Leeper in fact disobeyed the posted instructions, the inference must be drawn that she was in compliance with the instructions. Here, a driver from Riverdale towed the vehicle approximately 15 minutes after Ms. Schwartz-Leeper had parked, well under the two-hour limit. Accordingly, the charge against Riverdale is sustained. However, since it was Mr. Ortiz, not Mr. Collazo, who was identified on the receipt as the driver in this incident, the count against Mr. Collazo here is dismissed. Overcharging customers (Violation II) DCA charges both Riverdale and Mr. Collazo with two counts of overcharging customers. Under the towing law, a company may not charge more than $125 for removal of a vehicle. Admin. Code (a). However, if a consumer arrives at the lot before his or her vehicle is removed, the towing company may only charge a reasonable service fee of not more than one-half of the charge allowed for removal as provided in subdivision a of this section, for which a receipt shall be given. Admin. Code (g). Therefore the maximum allowable charge for release of the vehicle that is attached to the tow truck but still in the parking lot is $ Here, petitioner alleges that Riverdale overcharged two customers, Robert Scher and Renee Schwartz, for release of vehicles parked in a private parking lot but not yet towed. In both instances, Mr. Scher and Ms. Schwartz arrived prior to the removal of their vehicles from the lot. Mr. Scher testified at trial that on or around October 28, 2016, he parked his car in a Key Food parking lot in order to wait for his wife to exit the store so he could help her carry grocery bags (Tr. 11; Pet. Ex. A). Mr. Scher then walked across the street to Capital One Bank (Tr. 11).

5 - 5 - He estimated that he was in the bank for five minutes (Tr. 11). When he returned to his car, he saw that it was on Riverdale s tow truck (Tr. 20). Mr. Scher spoke to the tow truck driver, identified by Riverdale s receipt as Mr. Collazo (Pet. Ex. A; Tr. 21). Mr. Collazo told Mr. Scher that he would return his vehicle only if he came back to respondent s lot and paid him $150 (Tr. 12). Mr. Collazo then inquired how much money Mr. Scher had taken out at the bank (Tr. 12). Mr. Scher told respondent that he took out $100, but that he needed to keep at least $20 on him (Tr. 12). Mr. Collazo accepted $80 in cash from Mr. Scher and provided him with a receipt, which Mr. Scher signed (Tr. 20; Pet. Ex. A). Mr. Scher s vehicle never left the Key Food s parking lot (Tr. 20, 23). Mr. Collazo released the vehicle as soon as Mr. Scher paid him (Tr. 20). Following this incident, Mr. Scher filed a complaint with DCA (Tr. 14; Pet. Ex. A). A similar incident occurred with consumer Renee Schwartz. According to an affidavit submitted at trial, as well as Ms. Schwartz s consumer complaint, on October 28, 2016, Ms. Schwartz parked her car in the parking lot of Skyview Shopping Center and crossed the street to go to the Riverdale Press (Pet. Exs. B, K). Once she left the Riverdale Press, she crossed the street back to the shopping center, intending to go to Gruenbaum s Bakery located in the shopping center (Pet. Ex. B). As she was crossing the street, she saw individuals attempting to tow her car (Pet. Ex. K). Neither her receipt submitted at trial, which was unreadable, or her complaint identified the name or names of the individual tow truck operators involved in the incident (Pet. Exs. B, K). Ms. Schwartz claimed that the tow truck driver demanded that she give him $135 in cash to release her car (Pet. Ex. B). When she did so, the driver provided her with a receipt from Riverdale Towing LLC (Pet. Ex. K). While the receipt submitted at trial was unreadable, in her affidavit and complaint Ms. Schwartz indicated that the receipt incorrectly stated that she was charged $125 for towing and that it was brought to Riverdale Towing s yard (Pet. Exs. B, K). However, according to Ms. Schwartz, she paid $135 and the driver released her car in the Skyview parking lot (Pet. Ex. B). Ms. Schwartz s vehicle never left the parking lot (Pet. Exs. B, K). After this incident, Ms. Schwartz contacted her local assemblyman, Jeffrey Dinowitz, to complain. His office told her that the maximum that Riverdale should have charged her was $62.50 (Pet. Ex. B).

6 - 6 - In both of these incidents, the consumers returned to their vehicles before they were removed. Riverdale unlawfully charged consumers in excess of the statutory limit of $62.50, $80 and $135 respectively, for return of their vehicles. The unrebutted evidence here therefore establishes that two counts of violations of Admin. Code (g) against Riverdale should be sustained. However, Mr. Collazo was only identified as the driver in the incident involving Mr. Scher. One count is sustained against him. Refusal to accept credits cards (Violation IV) DCA charges respondents Riverdale and Mr. Collazo with three counts each of refusing to accept credit cards based on complaints from three consumers. Section of the Administrative Code provides that [a]ny person licensed pursuant to the provisions of this subchapter shall accept payment in person by credit card for any fees incurred in accordance with generally accepted business practices. Admin. Code DCA claims that on three occasions, respondents either demanded cash or conditioned release of a vehicle upon cash payment. First, Robert Scher testified that when he asked Mr. Collazo, the tow truck driver identified on his receipt, if he would accept payment by credit card, Mr. Collazo told him that he would not unless the transaction took place at his place of business on Jerome Avenue (Tr. 12, 13; Pet. Ex. A). As described above, Mr. Collazo inquired about how much money Mr. Scher had taken out of the bank and then took $80 of the $100 Mr. Scher had with him (Tr. 12). Respondent provided him with a receipt indicating that the $80 in cash satisfied the charge. The receipt includes a large 80 written in the charges field and circled (Tr ; Pet. Ex. A). Additionally, respondent Riverdale refused to allow Ms. Schwartz-Leeper to pay by credit card (Pet. Exs. E, L). Immediately after discovering that her car had been towed, Ms. Schwartz-Leeper called the posted phone number and an unidentified employee told her to come to the lot with $136 in cash (Pet. Exs. E, L). Upon arrival at the lot, the employee told her that she must pay in cash in order for her vehicle to be released (Pet. Exs. E, L). The employee told her that Riverdale rents the tow lot from him and he was instructed by Riverdale to demand cash payment (Pet. Ex. E). The third incident involved Ms. Schwartz, who claimed that a Riverdale tow truck driver demanded $135 in cash to release her car (Pet. Exs. B, K). Mr. Collazo is not identified in either of these two incidents.

7 - 7 - Petitioner s credible evidence establishes that three violations of Administrative Code section should be sustained against respondent Riverdale. On the two counts involving Mr. Scher and Ms. Schwartz-Leeper, there is clear evidence that both asked to use a credit card and were denied. With respect to Ms. Schwartz, Riverdale s demand for cash payment is sufficient to establish that credit card payment was not permitted. Because Mr. Collazo is only identified in the incident with Mr. Scher, one count against him for this violation is sustained. The two counts involving Ms. Schwartz and Ms. Schwartz- Leeper are dismissed. Deceptive trade practices (Violation V) Petitioner alleges two violations of Administrative Code section against each respondent, which prohibits deceptive or unconscionable trade practice in the sale, lease, rental or loan or in the offering for sale, lease, rental, or loan of any consumer goods or services. Admin Code The first count derives from Ms. Schwartz s receipt from Riverdale, which indicates that her car was brought to Riverdale s towing yard (Pet. Exs. B, K). According to Ms. Schwartz, respondent never removed her car from the Skyview parking lot (Pet. Exs. B, K). The copy of Ms. Schwartz s receipt that petitioner submitted at trial was unreadable. However, Ms. Schwartz included credible and consistent descriptions about the content of the receipt in both her contemporaneous complaint and her affidavit (Pet. Exs. B, K). She stated that on her receipt, Riverdale deliberately misrepresented that her vehicle was removed from the Skyview parking lot, in which case would have allowed Riverdale to charge her up to $135 for removal of the vehicle. Yet, as discussed above, Ms. Schwartz s vehicle was never removed from the lot and therefore she was overcharged in excess of $62.50, the maximum allowable charge if a vehicle is not removed from the parking lot. The fact that Riverdale generated a receipt to obscure the overcharge was clearly a deceptive trade practice. One count against Riverdale is sustained. However, because Mr. Collazo s name could not be identified on the receipt, the count against him is dismissed. At trial, petitioner alleged an additional violation of this section of the law that was not included in the petition. Specifically, petitioner offered two receipts gathered in its investigation that it claims were fraudulently produced. Invoice number 155, which was part of the set of

8 - 8 - receipts turned over by Riverdale to DCA, and invoice number 158, which was part of the set of receipts that DCA obtained from the NYPD, have the same date, vehicle information, towing information, and license plate number (Tr. 77, 78; Pet Exs. O, F). However, the receipts have different invoice numbers (Tr. 77). Petitioner suggests that one or both of these receipts were fabricated. While petitioner did not make this specific motion at trial, in essence, petitioner is requesting to amend the petition to add a second violation of this provision based on proof offered at trial (Tr ). However, where respondents did not have notice in the petition of this additional charge, and did not appear to defend against this charge, the inclusion of this additional charge is unfairly prejudicial. See Dep t of Correction v. Griffith, OATH Index No. 925/96 (Dec. 23, 1996), modified as to penalty, Comm'r Decision (Feb. 18, 1997) (confirming a charge to the proof at trial is improper where the respondent did not have fair notice of the new claim to be added and an opportunity to fully litigate it, and noting that special care must be taken where the respondent did not appear for trial and litigate the issues). Accordingly, petitioner s request to add an additional violation based on invoices 155 and 158 is denied. Unauthorized booting (Violation VI) Under Administrative Code section (a), no person shall engage in booting without having first obtained a license therefor pursuant to this subchapter. Petitioner submitted an affidavit from a consumer alleging that Riverdale engaged in unauthorized booting of his car. On October 19, 2016 at approximately 8:00 a.m., Chris McNickle parked his car in the Skyview Shopping Center (Pet. Exs. C, J). He then walked one block north to a restaurant to have breakfast (Pet. Exs. C, J). He returned approximately one half-hour later to find a boot on his car (Tr. 50; Pet. Exs. C, J). Mr. McNickle alleged that Mr. Collazo from Riverdale requested $50 to remove the boot from his vehicle (Pet. Exs. C, J). Petitioner submitted a Certification of Non-Licensure from Bernice Waiters, the supervisor of DCA s record room. According to DCA records, Riverdale Towing LLC is not and never was licensed as a booting company (Tr. 85; Pet. Ex. D). The uncontested evidence, including Mr. McNickle s contemporaneous complaint and affidavit, therefore establishes that Riverdale violated this section of the law by booting Mr. McNickle s car without a license to do so (Pet. Exs. C, J).

9 - 9 - Recordkeeping, reporting, and licensing violations The remaining violations here involve Riverdale and Mr. Collazo s failure to adhere to DCA s recordkeeping, reporting, and licensing requirements. In its subpoena, DCA requested the following: a copy of any lease or sublease for the premises from which Riverdale operates business from; all documents sufficient to show payment for rent for the premises where Riverdale operates from; all utility bills for the property where Riverdale operates business; all documents related to tows performed from May 2016 and October 2016, including, but not limited to all receipts provided to consumers for towing services performed by Riverdale with respect to vehicles parked on private property, copies of all credit card receipts for services provided by Riverdale with respect to vehicles parked on private property, all written authorization forms, all rosters of drivers; and all contracts between Riverdale and any company to arrange for towing services at private parking lots that were in effect in May 2016 and October 2016 (Tr. 63, 64; Pet. Ex. M; ALJ Ex. 1). In response, Riverdale supplied some but not all of the requested documents (Tr ). DCA charged a number of violations based on these documents as well as additional documents from the NYPD that DCA gathered during its investigation. The majority of these violations derive from 31 towing invoices that Riverdale generated in May 2016 and October Improper authorization for towing vehicles from private property (Violation III) DCA s towing law provides that [n]o vehicle shall be removed by a tow operator from private property without express written authorization by the owner of the private property or his or her agent as designated in the contract between the owner of the private property and the tow operator. Admin Code (c). In its subpoena, DCA requested from Riverdale contracts with private property owners for towing services and written authorization to tow for each tow performed from private property (Pet. Ex. M). DCA alleges that three contracts with Riverdale Holding Co., Riverdale Center NY LLC, and Dante Associates LLC name Salvador Collazo as both the designated agent to authorize tows from private property and the tow operator (ALJ Ex. 1). DCA claims in its petition that this is a violation of the law because Mr. Collazo cannot serve as both the towing operator and the designated agent of the private property owner (ALJ Ex. 1).

10 However, at trial, DCA did not produce these contracts or written authorizations, and did not provide testimony about the content of these contracts or written authorizations. Without proof of this alleged improper authorization by Riverdale beyond the assertions set out in the petition, these counts must be dismissed. Failure to maintain electronic records (Violation VII) Petitioner alleges one violation against Riverdale for failing to maintain electronic records, as required by its rules. See 6 RCNY (Lexis 2017) ( Every person or entity licensed to engage in towing must maintain records in an electronic format concerning every tow performed under the authority of the following: the authority to remove vehicles improperly parked on private property provided by section of the Administrative Code ). In its subpoena, DCA specifically requested towing receipts, credit card receipts, written authorization forms, and driver rosters in electronic format (Pet. Ex. M). Riverdale did not supply any electronic records in response to the subpoena (Tr. 26, 31, 72-73; Pet. Exs. F, O). Ms. Matatov, an employee in the records department of DCA, reviewed DCA s electronic filing system and testified that the electronic documents requested in the subpoena were not on record with DCA (Tr. 65). Riverdale s failure to comply with DCA s specific directive to supply electronic records establishes a violation of this rule. Failure to maintain required documentation (Violation VIII) Section 2-363(e) of DCA s rules requires that a towing licensee maintain in chronological order all authorizations to tow and all towing invoices, for a period of three years and further that [a]ll required records shall be readily available at the licensee's premises for inspection by the Police Department and the Department of Consumer Affairs during normal business hours. 6 RCNY 2-363(e)(1), (3). DCA alleges that Riverdale did not keep its tow invoices in chronological order. For example, invoice number 078 is dated October 22, 2016 and invoice number 137 is dated October 11, 2016 (Tr. 73, 74; Pet. Ex. O). Additionally, DCA points to the invoices in the NYPD s possession that Riverdale did provide to DCA, presumably to show that these documents were not readily available for inspection by DCA. Petitioner charges 11 counts under this violation, apparently based on the 11 invoices at the Police Department. The exact

11 breakdown of these counts was not set out clearly in the petition and was not articulated at trial. Moreover, the packet of invoices introduced at trial that were obtained from the police precinct actually included 13 invoices (Pet. Ex. F). Here, the rule requires that a licensee maintain records at its premises for inspection during business hours. However, there is no evidence in the present case that DCA inspected or attempted to inspect Riverdale s records at its premises during business hours. The fact that Riverdale did not provide all invoices directly to DCA in response to the subpoena does not necessarily establish that those invoices were unavailable at their business premises for inspection. Further, while some of the invoice numbers are out of order when aligned by date, this does not indicate that these records were not maintained in chronological order by date at Riverdale s premises. Accordingly, these 11 counts are dismissed. Failure to issue proper receipts (Violation IX) DCA brings 30 counts each against Riverdale and Mr. Collazo for failure to issue proper receipts. The towing rules require that tow truck operators issue a clearly written itemized receipt for towing services for which they have been paid. 6 RCNY 2-366(d). These counts must be dismissed because DCA has failed to provide respondents with sufficient notice of this charge. Under OATH s rules, a petition must meet certain requirements such that a respondent can understand the charges brought against it and adequately prepare a defense. In particular, the rule requires that the petition include a short and plain statement of the matters to be adjudicated, and, where appropriate, specifically allege the incident, activity or behavior at issue as well as the date, time, and place of occurrence. 48 RCNY 1-22 (Lexis 2017). Additionally, the petition must identify the law, rule, regulation, contract provision, or policy that was allegedly violated and provide a statement of the relief requested. Id. Here, in its petition, DCA included the receipt violation under the general heading Riverdale Failed to Properly Maintain and Produce Required Records. The only factual reference to this specific violation appears in paragraph 55 of the petition, which states as follows: [T]ow receipts must contain specific information, including: the amount of charges, the services the tow company provided, the location from which the tow company towed the vehicle, and the location to where the tow company towed the vehicle. Riverdale s own

12 receipts demonstrate that Riverdale fails to document this required information on receipts. (ALJ Ex. 1 at 12-13). In paragraph 57 of the petition, DCA alleges that respondents failed to produce tow receipts to DCA, followed by a table listing towing invoices that DCA obtained from the 50th police precinct. In paragraph 59, DCA alleges that respondents failed to keep towing invoices in chronological order, and sets forth another table of towing invoices. DCA never indicates, however, if the tables of invoices under paragraphs 57 and 59 are also the invoices connected to the improper receipt allegations under rule 2-366(d). Moreover, even if DCA were using these tables to indicate the receipts at issue under this violation, the total number of receipts in the tables only adds up to 24, not the 30 counts DCA claims here for each respondent. At no point in the petition does DCA provide a breakdown of the 30 receipts alleged to contain incorrect or incomplete information. On the question of proper notice, Taxi & Limousine Comm n v. Carniol is instructive. OATH Index No. 1736/11 (June 24, 2011), aff d, 42 Misc. 3d 199 (Sup. Ct. N.Y. Co. 2013), aff d, 126 A.D.3d 409 (1st Dep t 2015). In that case, respondent argued that the Taxi and Limousine Commission s petition did not provide specific notice of the 90 charges in which he was alleged to have overcharged passengers. ALJ Casey addressed the requirements of OATH Rule section 1-22 and found that the petition was sufficient where it specified the rule that respondent allegedly violated, the manner of the violation, and a range of dates. Id. at 4. Additionally, petitioner gave respondent further notice of these charges when a month before the hearing commenced, petitioner provided respondent with an itemized list of 90 alleged overcharges [that] specified the trip numbers, dates, locations, and times that [the higher rate] was activated. Id. However, ALJ Casey noted that the better practice would have been for petitioner to append the list of alleged violations to the charges. Id. In the present matter, DCA has failed to provide a similarly clear outline of the receipt violations. The petition does not delineate these 30 counts by date or invoice number, does not explain the particular ways in which individual receipts were deficient, and does not set forth how each respondent violated this rule. Because it would have been impossible for respondents to decipher the specific counts brought against them here, notice of this charge was insufficient. The 30 counts against each respondent are dismissed.

13 Failure to make records available for inspection (Violation X) Petitioner alleges that Riverdale violated Administrative Code section , which requires that a licensed towing company maintain records, ledgers, receipts, bills and such other written records as the commissioner may prescribe by regulation in electronic format and that these records shall be made available for inspection by the commissioner at his or her request at either the licensee's place of business or at the offices of DCA for a period of five years. Admin Code (emphasis added). Petitioner bases this charge on the fact that Riverdale failed to supply all of the documents that DCA requested in its subpoena. As previously noted, Riverdale did not provide credit card receipts for the subpoena period, written authorization forms, or rosters of drivers, as set out in the subpoena. Because DCA specifically requested these documents, this violation is sustained. Failure to notify police precinct of a tow (Violation XI) DCA charges 13 counts against each respondent for failure to notify a police precinct of a tow. The law requires that a towing company that removes a vehicle notify the NYPD. The specific requirements are as follows: Any person who removes a vehicle pursuant to this section shall, within thirty minutes of the vehicle's arrival at a facility for storage, notify the local police precinct having jurisdiction over the area from which the vehicle was removed, as to the storage site, the time the vehicle was removed, the location from which the vehicle was removed, the name of the person who authorized the removal, and the fact that the removal was pursuant to a contract with the owner of the private property, and shall obtain the name of the person at such police precinct to whom such information was reported and note such name on a trip record together with the time and date that the vehicle was removed. Admin Code (f). Accordingly, if a company tows a vehicle to a facility for storage, after 30 minutes have passed, the company must notify the local police precinct with jurisdiction over the area where the tow took place. DCA bases this charge on the 13 receipts provided to DCA but not the 50th precinct of the NYPD (Pet. Exs. F, O). Because the NYPD was not in possession of the same receipts that

14 Riverdale turned over to DCA, DCA concludes that Riverdale failed to notify the local police precinct about all of its tows (ALJ Ex. 1). DCA has failed to establish that the tows reflected in these 13 receipts should have been reported to the 50th police precinct. Specifically, for each tow, DCA did not show how the receipt indicated that the 50th police precinct had jurisdiction over the area from which the vehicle was removed, or whether the vehicle was at the towing facility for more than 30 minutes. Therefore, the evidence here is insufficient to sustain this violation. The 13 counts against each respondent are dismissed. Failure to timely respond to consumer complaints (Violation XII) DCA alleged in its petition that Riverdale failed to respond to four consumer complaints, but withdrew three of those violations at trial (Tr ). The remaining charge arises from Ms. Schwartz s consumer complaint. DCA s rules provide that when it sends a complaint to a licensee, the licensee must respond in writing to the Department within 20 days of the date the complaint is sent to the licensee and must set forth the licensee s position regarding the transaction which is the subject of the complaint, including the facts which the licensee or applicant believes justify its position. 6 RCNY According to Ms. Matatov, when a complaint is received about a company licensed by DCA, the complaint is stored electronically (Tr. 50). Ms. Matatov confirmed that a complaint filed by Ms. Schwartz was on file with DCA (Tr. 59). DCA alleges that it sent a notice of this complaint to Riverdale. At trial, DCA submitted what appears to be an online printout of the complaint notice, addressed to Riverdale Towing Associates LLC, and dated November 14, The notice indicates that failure to respond to the complaint within 20 days would violate section 1-13 of DCA s rules (Pet. Ex. K). However, there is no proof that this notice was sent to Riverdale, either online or in the mail. DCA did not provide testimony confirming how or when this notice was sent, and there is no proof of online submission or mailing in the record. Without evidence that this notice was actually sent to Riverdale, this charge is dismissed.

15 FINDINGS AND CONCLUSIONS 1. Respondents were properly served with the notice of the trial and failed to appear. 2. Petitioner established that respondents unlawfully removed a properly parked vehicle from private property in violation of Administrative Code section (a) (Violation I). One count against Riverdale is sustained. 3. Petitioner established that respondents overcharged two customers in violation of Administrative Code section (g) (Violation II). Two counts against Riverdale are sustained, and one against Mr. Collazo. 4. Petitioner established that respondents refused to accept credit cards from three customers in violation of Administrative Code Section (Violation IV). Three counts against Riverdale are sustained. One count against Mr. Collazo is sustained. 5. Petitioner established that respondent engaged in a deceptive trade practice in violation of Administrative Code section (Violation V). One count against Riverdale is sustained, and one count against Mr. Collazo dismissed. The other count raised at trial is dismissed. 6. Petitioner established that respondents engaged in unauthorized booting of a vehicle in violation of Administrative Code section (a)(1) (Violation VI). One count is sustained. 7. Petitioner did not establish that respondents failed to obtain proper authorization for towing vehicles from private property in violation of section (c) of the Administrative Code (Violation III). These 30 counts are dismissed. 8. Petitioner established that respondent Riverdale failed to maintain required records in electronic form in violation of section of DCA s rules (Violation VII). This one count is sustained. 9. Petitioner did not establish that respondent Riverdale failed to maintain required documentation in violation of section 2-363(e) of DCA s rules (Violation VIII). These 11 counts are dismissed.

16 Petitioner failed to establish that respondents receipts were issued improperly in violation of section 2-366(d) of DCA s rules (Violation IX). The 30 counts against each respondent are dismissed. 11. Petitioner established that respondents violated section of the Administrative Code by failing to make records available for inspection in response to DCA s subpoena (Violation X). One count against Riverdale is sustained. 12. Petitioner did not establish that respondents failed to notify police precinct about tows under section (f) of the Administrative Code (Violation XI). 13 counts against each respondent are dismissed. 13. Petitioner did not establish that respondents failed to timely respond to consumer complaints in violation of section 1-13 of DCA s rules (Violation XII). This count is dismissed. ORDER Petitioner here seeks a total of $258,800 in penalties, and $351 in restitution to consumers, as well as revocation of Riverdale s license to operate tow trucks and Mr. Collazo s tow truck driver s license (Tr. 89). Additionally, petitioner seeks a finding that Riverdale is unfit to hold any Department licenses in the future and that respondent Mr. Collazo is permanently unfit to manage, operate, or own a business that holds a Department license. Some of DCA s violations entail escalating penalties for repeated violations. Unless otherwise specified by law, a violation is defined as a violation by the same respondent, whether by pleading guilty, being found guilty in a decision, or entering into a settlement agreement for violating the same provision of law or rule, within two years of the prior violation(s). 6 RCNY When issuing this penalty, I requested from DCA a record of violations and penalties issued within the last three years against respondents, pursuant to section 1-47 of this tribunal s rules. 48 RCNY 1-47 (permitting ALJ to request additional records pertaining to penalty or relief). After a search of its records, DCA confirmed that the present violations are both respondents first.

17 Civil penalties The civil penalties set forth below are summarized in a chart annexed to the end of this decision. Riverdale For unlawful removal of a properly parked vehicle from private property in violation of Administrative Code section (a), the law provides a penalty of $500 for the first violation of this section. Admin. Code (j). Riverdale is ordered to pay a civil penalty of $500. For overcharging of two customers in violation of Administrative Code section (g), the law provides a penalty of $500 for the first violation of this section, and $1,000 for the second violation within a period of twelve months of the date of the first violation. Admin. Code (j). Here, both incidents with Ms. Schwartz and Mr. Scher are first violations because respondent was not yet found guilty in a decision (Pet. Exs. A, B, K). Riverdale is ordered to pay a penalty of $1,000 for these two incidents. Petitioner established that Riverdale refused to accept credit cards from three customers in violation of Administrative Code section The DCA penalty schedule for towing vehicles provides that for the first default on this violation, the penalty is $3, RCNY Riverdale is ordered to pay $9,000 for the three counts sustained against it. For the one violation of Administrative Code section for deceptive trade practices established here, the penalty is $350 for the first default under DCA s penalty schedule for consumer protection laws. 6 RCNY Riverdale is ordered to pay $350. DCA s penalty schedule for unlicensed booting, the violation of Administrative Code section (a), provides a penalty of $1,000 for the first default. 6 RCNY Respondent is ordered to pay $1,000 for this violation. For the violation of section of DCA s rules, failure to maintain electronic records, the penalty schedule provides for $2,500 for the first default. 6 RCNY Riverdale is ordered to pay $2,500. Finally, for the violation of section of the Administrative Code, failure to make records available, the penalty is $2,500 for the first default. 6 RCNY Riverdale is ordered to pay $2,500. Riverdale s total civil penalty is $16,850.

18 Mr. Collazo For overcharging a customer in violation of Administrative Code section (g), Mr. Collazo is ordered to pay $500 for a first violation based on the incident with Mr. Scher. For refusing to accept credit cards from Mr. Scher in violation of Administrative Code section , Mr. Collazo is ordered to pay $3,000. Mr. Collazo s total civil penalty is $3,500. Restitution DCA seeks restitution for the complaining consumers pursuant to Administrative Code section (e)(2). Here, Ms. Schwartz was charged $135, Mr. Scher was charged $80, and Ms. Schwartz-Leeper was charged $136. Based on the violations established above, Riverdale is ordered to reimburse consumers for those amounts, for a total of $351 in restitution. Admin. Code (e)(2) ( The commissioner [of DCA] may arrange for the redress of injuries caused by such violations [by DCA licensees]. ) Because Mr. Collazo is identified in the incident with Mr. Scher, he is jointly and severally liable for the $80 owed to that consumer. See, e.g., Dep t of Consumer Affairs v. Riteway Towing Inc. Richard Cintron and Valentin Gallan, Record Nos ADJC, ADJC, ADJC at 19 (May 19, 2015) (noting that tow truck driver was jointly and severally liable with towing company for restitution because he overcharged consumer on company s behalf). License Revocation Petitioner seeks revocation of Riverdale s towing license and Mr. Collazo s tow truck driver s license pursuant to sections (e)(1), (a), and (b) of the Administrative Code. The law sets forth that DCA may suspend or revoke the license of the person holding a tow truck operator's license, or the person holding a license to engage in towing or where applicable its officers have been found by the commissioner to have violated any provisions of the DCA towing laws and rules. Admin. Code (a); see also Admin. Code (e)(1) (granting DCA commissioner authority to revoke license of any DCA licensee, upon due notice and hearing). The law further provides for mandatory license revocation for the following licensees:

19 [I]n a two year period, the person holding a license to engage in towing or where applicable, any of such licensee's officers found by the commissioner to have committed in any combination three or more violations of sections , of this code or any rules promulgated thereunder, or sections , , , , , , , , , , , or of this subchapter or any rules promulgated thereunder. Admin. Code (b) (emphasis added). Riverdale license revoked Here, Riverdale holds a DCA towing company license (Pet. Ex. G; Tr ). Petitioner has established the following mandatory license revocation charges against Riverdale: three counts under Administrative Code section , subsections (a) and (g), one count under Administrative Code section ; and three counts under Administrative Code section Therefore, under the mandatory license revocation subsection, because Riverdale has engaged in more than three counts violating the sections delineated above within a two-year period, its license is revoked. Admin. Code (b). Mr. Collazo license suspended Mr. Collazo is also licensed with DCA as a tow truck driver (Pet. Ex. H; Tr. 42, 44). Petitioner has established the following charges against Mr. Collazo: one count under Administrative Code section , subsection (g); and one count under Administrative Code section While the findings here do not support mandatory license revocation, DCA has discretion to revoke or suspend Mr. Collazo s license. Admin. Code (a). Here, given that Mr. Collazo has no prior record of violations and was only implicated in the incident with consumer Mr. Scher, I do not find license revocation to be appropriate. Rather, Mr. Collazo s tow truck driver s license is suspended for 20 days. See Dep t of Consumer Affairs v. Custom Towing, Inc., Record No ADJC (Jan. 5, 2015) (penalty of license suspension issued for towing company s first violation involving one consumer).

20 Permanent Unfitness Petitioner additionally seeks a finding that Riverdale is permanently unfit to hold any Department licenses in the future and that Mr. Collazo is permanently unfit to manage, operate, or own a business that holds a DCA license. This authority derives from DCA s broad and flexible enforcement powers. Admin. Code (noting that the legislative intent behind DCA s licensing authority is for the protection and relief of the public from deceptive, unfair and unconscionable practices, for the maintenance of standards of integrity, honesty and fair dealing among persons and organizations engaging in licensed activities, for the protection of the health and safety of the people of New York city and that to carry out this purpose, DCA requires powers, remedies and sanctions which are equitable, flexible and efficient ); see also Dep t of Consumer Affairs v. Custom Towing Inc. and Hector Ruiz, Record Nos ADJC, ADJC (Dec. 5, 2014) (citing to Administrative Code section when considering whether to find a towing licensee permanently unit to hold future licenses). Riverdale Here, while Riverdale has been found liable for seven violations, only four of those violations involve direct interactions with consumers. Moreover, while respondent Riverdale did not appear to present proof of the actual posted instructions in the lot, there is some suggestion that the four consumers here may have been parked improperly because each consumer walked away from his or her vehicle at some point to a business outside the lot. Therefore, while Riverdale s practices such as demanding cash or overcharging were in contravention of the law, the initial tows may have been warranted. Additionally, DCA confirmed that no prior penalties or violations have been issued against Riverdale. Accordingly, I find that Riverdale s actions, while unlawful, do not show a level of bad faith and egregiousness that warrant a finding of permanent unfitness. Mr. Collazo Similarly, Mr. Collazo should not be deemed permanently unfit. His violations only involve one consumer, and thus, for the same reasons stated above, these grounds are insufficient to find Mr. Collazo permanently unfit to manage, operate, or own a business that holds a DCA license.

21 Following issuance of this order, DCA shall contact respondents regarding payment of civil penalties and restitution, and the implementation of respondent Riverdale s license revocation and Mr. Collazo s license suspension. John W. Burns Administrative Law Judge August 3, 2017 APPEARANCES: VERONICA DUNLAP, ESQ. JORDAN COHEN, ESQ. Attorneys for Petitioner No Appearance by or for Respondent

22 Violation Counts Penalty Riverdale Collazo Total I. Unlawful removal of vehicles. Admin. Code (a) II. Overcharging. Admin. Code (g) 1 total (Riverdale) 3 total (2 Riverdale, 1 Mr. Collazo) $500 for the first violation. Admin. Code (j). $500 for the first violation. Admin. Code (j). $500 N/A $500 $1,000 $500 $1,500 IV. Failure to accept credit cards. Admin. Code total (3 Riverdale, 1 Mr. Collazo) $3,000 for each first default. 6 RCNY $9,000 $3,000 $12,000 V. Deceptive trade practices. Admin. Code VI. Unlicensed booting. Admin. Code (a) VII. Failure to maintain electronic records. 6 RCNY X. Failure to make records available. Admin. Code total (Riverdale) 1 total (Riverdale) 1 total (Riverdale) 1 total (Riverdale) $350 for first default. 6 RCNY $1,000 for first default. 6 RCNY 6-37 $2,500 for first default. 6 RCNY 6-36 $2,500 for first default. 6 RCNY $350 N/A $350 $1,000 N/A $1,000 $2,500 N/A $2,500 $2,500 N/A $2,500 Total Riverdale Penalty $16,850 Total Collazo Penalty $3,500 TOTAL CIVIL PENALTY $20,350