S.F. Federal Credit Union v. S.F. Municipal Transportation Auth. CA1/3

BACKGROUND

I. Factual Background

In 1978, voters passed Proposition K, which provided free, non- transferrable taxi medallions distributed pursuant to a waitlist. Due to various problems with the medallion program, including an almost 15-year waitlist, SFMTA created a new class of taxi medallions. This new class created transferrable taxi medallions, which were available for a $250,000 purchase price. SFFUC became one of two qualified lenders with SFMTA to finance the purchase of new medallions. The parties entered into an initial lender agreement in 2010, and a second similar lender agreement in 2013. Section 4, subdivision (a) of the 2013 lender agreement provides that SFMTA “shall not set the Medallion Transfer Price for the Transfer of a Medallion below the highest Medallion Transfer Price paid by a Medallion Holder to whom any Qualified Lender made a loan that is still outstanding to finance the transfer of a Medallion.” In the event of foreclosure, Section 5, subdivision (c) provides “SFMTA and Lender shall use diligent and good faith efforts to re-transfer each foreclosed Medallion as soon as reasonably possible, which efforts shall include, but need not be limited to,…