Panel Levies Penalties on Both Valley Taxi Firms : Transportation: The city’s revocation of their $20,000 performance bonds is the latest turn of events in a heated rivalry between the two companies.

A Los Angeles city transportation panel Thursday ordered both taxi firms serving the San Fernando Valley to forfeit bonds of $20,000 on the grounds that one company ran misleading ads and the other failed to provide the service it had promised.

Saying they wanted to send a message to the entire taxi industry, city transportation commissioners increased one firm’s bond against possible repeat offenses to $100,000.

The commissioners also ordered Valley Cab Co. to disconnect two telephones lines listed in several telephone books under the names of other cab companies, including the rival Checker Cab Co.

Since 1986, the Board of Transportation Commissioners’ staff has repeatedly ordered Valley Cab to stop running ads under such names as Checker Cab, Checker Car, Yellow Cab and Yellow Cab-San Fernando Valley, according to a city Department of Transportation report. But the ads have continued to run, the report said.

The board ordered Valley Cab to post within 30 days a new $100,000 performance bond, which the board members promised to revoke if the firm continued to run such ads.

Although the cab companies’ bonding companies suffered the greatest loss, the penalties, which a Valley Cab attorney promised to fight in court, are considered severe. It will be difficult for Valley Cab to get a $100,000 bond after losing the $20,000 bond. Canceling its telephone lines means losing a primary source of business.

Meanwhile, San Fernando Valley Checker Cab, owned by Burbank-based Babaeian Transportation Co., was ordered to forfeit its performance bond for failing to put 44 cabs on the road by Oct. 22, as promised. Scott Schaffer, Babaeian general manager, said his company missed the deadline by five days because of delays in getting the cabs from the automobile manufacturer.

“We should have been applauded for what we have achieved so far,� he said.

The board’s action against both firms is the latest episode in a heated business dispute between the two cab companies that began when Babaeian Transportation won a city franchise in May to operate Checker Cab in the San Fernando Valley. Since then, both firms have complained to the board that the other was violating city regulations.

At the meeting Thursday, representatives of both firms urged the board to give the other a stiff penalty.

Lloyd Conway, president of Valley Cab, and his attorney Steven M. Neimand had argued at a previous meeting that the misleading telephone ads were placed by the company’s general manager, George Piedra, who had hoped to start his own taxi service, independent of Valley Cab.

Neimand said Thursday that Valley Cab had already disconnected the telephone number that callers get when asking directory assistance for Checker Cab.

But during the meeting, Alan Willis, a city senior transportation engineer, called directory assistance and asked for Checker Cab. He said the operator gave him the number for Valley Cab--the rival of the real Checker Cab Co.

Willis also presented the board with billing documents from Pacific Bell that showed that several representatives of Valley Cab had placed ads in telephone books that advertised the company under different names.

On July 12, 1991, Thomas Hefferan, former Valley Cab general manager, placed an ad under the names Valley Cab, Checker Cab, Yellow Cab and Valley Car Co., according to a report by Willis. On Jan. 21 of this year, Piedra placed an ad for Valley Cab, Checker Cab and Yellow Cab-San Fernando Valley, the report said. And finally, on March 9 this year, Conway himself placed an ad for Checker Cab, Yellow Cab, Checker Limousine Service and Checker Car, the report said.

Willis said the documents were obtained through a subpoena.

“This is in direct contradiction to testimony already given to the board,� Willis said.

On Thursday, Conway and Neimand changed their defense, saying Valley Cab has the right to use the other names. Neimand said he had filed papers at a Los Angeles courthouse seeking “declaratory relief� to allow Valley Cab to place ads under the various names. He said he also planned to sue the board and the city.

“It will all end up in court,� Conway said after the meeting.

Conway and Schaffer had said Oct. 8 that they had reached an agreement to settle the dispute over the misleading ads. But Conway said Thursday that those agreements were never finalized because Piedra refused to cooperate. Piedra could not be reached for comment.

Shelly Smith, an assistant city attorney, said the board has the right to penalize Valley Cab for placing the ads and told board members not to worry about the threat of litigation from Neimand.

Willis had recommended that the board members consider stiff penalties against Valley Cab, including suspending the firm for 29 days and fining it as much as $3.3 million.

But board President David A. Leveton said he did not want to impose a penalty that would put Valley Cab’s taxi drivers out of work. He said that he wanted to impose a penalty that would make an example of the two firms.

“I think the taxicab industry should be mindful that this commission will follow the letter of the franchise agreements,� he said.

All taxi firms franchised by the city are required to post a performance bond of the type revoked by the board. The board has the right to increase the value of the bond, take a portion of the bond or take it all.

Valley Cab has been paying a bonding company $1,000 a year to provide its $20,000 bond, a city transportation official said. Babaeian paid a bonding company $2,000 for its $20,000 bond, Schaffer said, and is out no additional money. The bonding company loses the $20,000.

Once a bond is revoked, it is difficult for a company to get a bonding company to put up a new bond, especially one for $100,000, as is required of Valley Cab, city officials said.