A San Francisco credit union is accusing city officials of dragging their feet in a lawsuit alleging that the city promised to repay the credit union for millions of dollars in taxi medallion loans that went into default.
The San Francisco Federal Credit Union contends, in a suit filed in San Francisco County Superior Court, that the city’s transit agency agreed to sell transferable taxi medallions to drivers for $250,000. The city asked the credit union to assist in the sales by making loans to drivers purchasing the loans, according to the suit, filed in March 2018.
In exchange, the credit union said, the city agreed to guarantee the loans that were made to drivers.
The city denies it has responsibility for the loans.
As the Sep. 28 trial date approaches, the credit union said that the city is using the coronavirus crisis to unnecessarily delay the case.
As in many cities, the taxi business has faltered and many of those loans were foreclosed. The credit union, which is seeking at least $155 million, contends that city officials had agreed to work to transfer the medallions.
The city has denied responsibility for repaying the loans or for reselling the medallions.
“As a matter of law, the Credit Union can present no evidence that [the city’s transit agency] breached any statutory or contractual obligation,” they said, in responding to the lawsuit.
The two sides entered into mediation earlier this year, but that effort failed, according to court documents.
The city has asked for the trial to be delayed until March 22, 2021.
“The additional time will provide an opportunity for the parties to complete document discovery, conduct the 13 outstanding depositions, and prepare for this complex high-stakes trial in an orderly manner under the continuing constraints of the Covid-19 pandemic,” city officials said.
The credit union replied that the delay was not needed, arguing that the coronavirus crisis has caused an even deeper dive in the taxi business, placing an even heavier financial burden on the credit union.
“For months, the [city] has dragged its feet and delayed producing relevant documents requested months or even years before,” the credit union said, adding that, “the ongoing COVID-19 Pandemic does not itself constitute independent good cause to continue civil trial dates.”
Judge Harold Kahn has not ruled on the city’s request for delay.