ALJ/TOM/cmf Date of Issuance 9/11/2009

Decision 09-09-005 September 10, 2009

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Application of Alliance Group Services, Inc. (U-7028-C) and Jess P. DiPasquale for authority to Transfer Control of Alliance Group Services, Inc.

Application 07-09-006 (Filed September 13, 2007)

DECISION GRANTING TRANSFER OF CONTROL ON A PROSPECTIVE
BASIS AND FINING ALLIANCE GROUP SERVICES, INC.,
FOR ITS FAILURE TO COMPLY WITH SETTLEMENT AGREEMENT

TABLE OF CONTENTS

Title Page

DECISION GRANTING TRANSFER OF CONTROL ON A PROSPECTIVE BASIS AND FINING ALLIANCE GROUP SERVICES, INC., FOR ITS FAILURE TO COMPLY WITH SETTLEMENT AGREEMENT 11

1. Summary 22

2. The Parties 33

3. Background 55

3.1. The Previous Settlement between AGS and
CPSD in D. 06-09-009 55

3.2. The Failure of Coughlin to Comply with Divestiture
Requirements of Settlement Agreement 66

3.3. Stipulated Facts Regarding Unauthorized Transaction
by Coughlin Which Resulted in an Indirect Transfer
of Control of AGS 77

3.4. Filing of Status Reports by AGS As Required by Settlement Agreement - Protest of CPSD 1010

3.4.1. The March 7, 2007 Status Report 1010

3.4.2. The September 7, 2007 Status Report 1212

4. Procedural History 1313

5. Discussion 1515

5.1. The Transfer of Control of AGS 1515

5.1.1. Whether AGS should be Fined for Coughlin's
Violation of § 854(a) by Transferring Indirect
Control of AGS to Chrysalis 1919

5.1.2. Whether AGS Should Be Fined for Violation
of § 854(a) Based on DiPasquale's
Acquisitionof Control of AGS
Without Prior Commission Authorization 2121

5.1.3. The Filing of Status Reports by AGS As
Required by the Settlement Agreement 2424

5.1.4. The March 7, 2007 Status Report 2525

5.1.5. The September 7, 2007 Status Report 2828

6. Conclusion 3434

7. Category and Need for Hearing 3434

8. Comments on Proposed Decision 3434

9. Categorization and Need for Hearing 3535

10. Assignment of Proceeding 3535

Findings of Fact 3535

Conclusions of Law 4242

ORDER 4444

DECISION GRANTING TRANSFER OF CONTROL ON A PROSPECTIVE

BASIS AND FINING ALLIANCE GROUP SERVICES, INC.,

FOR ITS FAILURE TO COMPLY WITH SETTLEMENT AGREEMENT

1. Summary

This decision grants the application of Alliance Group Services Inc. (AGS) for an indirect transfer of control of AGS to Jess M. DiPasquale (DiPasquale), effective today, on a prospective basis only. We deny Applicants' request for retroactive approval of this transaction, on a nunc pro tunc basis,¹ because this transaction was previously consummated without prior Commission approval in violation of Section 854(a).² Based on the unique circumstances of this case, which involved DiPasquale's purchase of 85 shares of AGS' parent company at public auction, we impose no monetary penalty for this violation of Section 854(a), or for the previous unlawful indirect transfer of control of AGS to Chrysalis Group, Inc. (Chrysalis) by Mr. Thomas Coughlin (Coughlin), former chairperson of AGS, in violation of Section 854(a), without the knowledge or consent of AGS management.

We find that the transfer of control of AGS to DiPasquale fully divests Coughlin and the SMC 2001 Trust (Coughlin Family Trust) from their former controlling interest in AGS, as required by the settlement agreement approved in Decision (D.) 06-09-009 (the Settlement Agreement).

We also find that AGS violated the Settlement Agreement, by failing to file the status report due on September 7, 2007 until after Consumer Protection and Safety Division (CPSD) protested this application and filed a data request asking for a list of AGS' carrier customers. The Settlement Agreement required AGS to file status reports with CPSD every six months in order to certify that any carrier-customers of AGS that have previously been identified by CPSD as unlicensed have either obtained valid certificates of public convenience and necessity (CPCNs) or have had their service terminated by AGS. We therefore impose a monetary penalty in the amount of $2500 pursuant to Section 2107, based on AGS' late filing of this status report, because the late filing caused CPSD to expend its valuable time and resources on enforcement of this requirement. However, we find that AGS substantially complied with the Settlement Agreement's requirement for filing a status report by March 7, 2007, because the company justifiably relied on CPSD's prior statement that AGS had already met the requirement for filing a list of its carrier-customers.

This application is closed.

¹ The phrase "nunc pro tunc" meaning "now for then," refers to those acts which are allowed to be done at a later time "with the same effect as if regularly done." (Blacks Law Dictionary, 4^th Revised Ed. (1968), p. 1,218.)

² All statutory references are to the Public Utilities Code, unless otherwise stated.