## Facts

- Two taxicab companies operated in the Village of Port Chester, New York, where taxi licenses were issued to individual drivers and could not be transferred or reassigned without village approval under public-safety regulations.
- Montoya and Vivanco-Small agreed in writing to purchase all outstanding stock and assets of the two companies for $300,000; the agreement listed goodwill, a noncompete covenant, equipment, and a leasehold.
- The original written agreement contained integration and no-modification clauses and did not mention taxi licenses.
- The parties later executed a written addendum stating that nine motor vehicles and nine village-issued taxi licenses were included in the transaction as part of the “equipment” sold.
- Disputes arose after drivers left and/or licenses were reassigned, and the buyers alleged fraud, breach of contract, and unjust enrichment against the sellers and others.

## Issues

1. Whether contract provisions treating village-issued taxi licenses as transferable assets, without required municipal approval, were illegal and unenforceable as contrary to public policy.
2. Whether fraud and breach of contract claims could be maintained when they depended on the alleged sale or transfer of those licenses.
3. Whether unjust enrichment relief was available where the claimed benefit was tied to an illegal license-transfer arrangement.

## Decision

- The appellate court affirmed summary judgment dismissing the complaint against the moving defendants.
- The court held that the contract provisions (including the addendum) purporting to transfer the taxi licenses were illegal and unenforceable because they violated municipal public-safety regulations.
- The court held that fraud and breach of contract claims premised on the license-transfer provisions could not be maintained.
- The court also upheld dismissal of unjust enrichment and related equitable claims.

## Legal Principles

- A contract that violates municipal regulations enacted for the protection of public health, safety, or morals is illegal and unenforceable as against public policy.
- Courts will not award damages for nonperformance of, or alleged misrepresentations concerning, an illegal bargain when relief would require giving effect to unlawful terms.
- A written integration clause or signed written addendum cannot validate contractual terms that conflict with mandatory public-safety licensing requirements.
- Equitable relief (including unjust enrichment) is generally unavailable where it would effectively recognize or enforce an illegal transaction involving parties participating in the illegality.

## Conclusion

The court refused to enforce contractual language that attempted to treat nontransferable municipal taxi licenses as saleable assets without required governmental approval, and it therefore sustained summary dismissal of claims for fraud, breach of contract, and unjust enrichment to the extent they depended on the unlawful license-transfer arrangement.


Village Taxi Corp. v. Beltre, 91 A.D.3d 92, 933 N.Y.S.2d 694 (N.Y. App. Div. 2d Dep't 2011)