ALJ/KJB/avs DRAFT Agenda ID #2081

Adjudicatory

5/22/2003 CA 10

Decision DRAFT DECISION OF ALJ BEMESDERFER (Mailed 4/16/2003)

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

In the Matter of the Order Instituting Investigation on the Commission's Own Motion into the Operations and Practices of Laurie Rose Nelson-Akst, an Individual Doing Business As All America Express Moving and Storage (T-189, 147), and of All America Express Moving and Storage Services, Inc., a California Corporation, and its President, Laurie Rose Nelson-Akst, and Vice-President, Etay Akst, Respondents.

Investigation 02-09-001 (Filed September 5, 2002)

DECISION REVOKING RESPONDENT'S HOUSEHOLD GOODS
CARRIER PERMIT, IMPOSING FINES AND OTHER CONDITIONS

Background

On September 5, 2002 the Commission adopted an order initiating investigation (OII) on its own motion of the business practices of Respondents. Based on the declaration and prepared testimony of Consumer Product Safety Division (CPSD) staff investigator Toni D. Crowley (CPSD Declaration), the OII states the following:

· Respondent Laurie Rose Nelson-Akst was licensed to do business as a household goods carrier on June 21, 1999 under Permit T-189147. Respondent Nelson-Akst initially did business under the name "All America Express Moving and Storage, a sole proprietorship." From January 29, 2000 to March 5, 2000 and again from April 26, 2000 to May 7, 2000, the Commission suspended Respondent's license for failure to meet insurance requirements. On July 27, 2000 Respondent Nelson-Akst applied to transfer her permit to All America Moving and Storage Services, Inc. (All America). On February 14, 2002, the transfer application was denied for failure to meet insurance requirements.

· Respondents allegedly committed at least 1,953 violations of the Household Goods Carrier Act (Act) and/or the Commission's rules and regulations during the period from June 21, 1999 through November 2000. 167 alleged violations involve All America performing carrier services without a valid permit, in violation of Pub. Util. Code § 5133; 23 alleged violations involve performing carrier services while a license was suspended in violation of Pub. Util. Code § 5286; 47 alleged violations involve operating without required insurance coverage in violation of Pub. Util. Code §§ 5139 and 5161 and Commission General Orders 139-M and 136-C; and 1,716 alleged violations involve failure to comply with Commission rules for performance of household goods moving services in violation of Pub. Util. Code § 5139.

· No individual, corporation, or other person may engage in the business of transporting household goods without first having a valid Commission permit authorizing its carrier operations.¹ Every household goods carrier and every officer, employee, or agent of a carrier, is subject to a fine of $500 for each offense.² Any individual, corporation, or other person operating or holding themselves out as a household goods carrier without having a valid permit in force, is subject to a fine of $5,000 for each offense.³ Each violation is a separate and distinct offense, as well as each day's continuance of the offense.⁴

· For operating in corporate form as a household goods carrier, All America and each of its two officers could be held liable for a fine of $5,000 per violation. CPSD alleges 167 violations which if proven could result in a fine of $835,000 per Respondent or $2,505,000 collectively.

· For operating with a suspended Permit, Respondents could be liable for a fine of not more than $5,000 per violation. CPSD alleges 23 violations which if proven could result in a total fine of $115,000. Pub. Util. Code § 5313 provides for an additional fine of $500 for each Respondent for each day during which the violations continued. CPSD alleges the violations continued for 11 days which if proven could result in a total additional fine of $16,500.

· For operating without proper insurance coverage, Respondents could be liable for a fine of $500 per violation. CPSD alleges 47 separate violations which if proven could result in a total fine of $23,500.

· For failure to comply with rules for the performance of household goods carrier services, Respondents could be liable for a fine of $500 for each such violation. CPSD alleges 1,716 separate violations which if proven could result in a total fine of $858,000.

On September 17, 2002 Respondent Nelson-Akst was personally served with a copy of the Order Instituting Investigation and a copy of the CPSD Declaration. The CPSD Declaration specifically documents the results of the CPSD investigation.

After being served with a copy of the OII and the CPSD Declaration, Respondent Nelson-Akst telephoned the assigned Administrative Law Judge (ALJ) Karl J. Bemesderfer to state that she desired to settle the complaint with CPSD. ALJ Bemesderfer advised her that if no settlement were to be reached within a reasonable period of time, the proceeding would actively resume its course toward a formal resolution. No settlement having been reached by the beginning of December 2002, ALJ Bemesderfer set a Pre Hearing Conference (PHC) for December 18, 2002. Respondents were informed of the time and place of the PHC by a Notice sent on December 9, 2002. Neither Respondents nor their representatives appeared at the PHC.

Following the PHC, Assigned Commissioner Geoffrey F. Brown and ALJ Bemesderfer issued a Scoping Memo and Ruling that gave Respondents until January 31, 2003 to reply to the allegations made in the OII. By a letter dated December 16, 2002, but not received until after the issuance of the Scoping Memo and Ruling, Respondent Nelson-Akst advised the Commission that Respondent All America had ceased operations; that her estranged husband, Respondent Etay Akst, had returned to Israel; and that she was financially unable to appear at the PHC or in any subsequent hearing.

On January 6, 2003, CPSD Supervising Investigator William G. Waldorf unsuccessfully attempted to contact Respondent Nelson-Akst by telephone. On January 7, 2003 staff Investigator Deborah R. Zundel went to the business address on file for All America and found the facility locked, the offices empty of furniture, and no signs of business activity of any kind. On January 8, 2003, Supervising Investigator Waldorf executed a declaration setting out the above facts.

On January 9, 2003, Attorney Cleveland W. Lee, staff counsel for CPSD, sent a letter to ALJ Bemesderfer setting out the above facts, enclosing declarations from Investigators Waldorf and Zundel, and recommending that as of January 31, 2003 the Commission dismiss any further proceedings in this matter, admit into evidence CPSD's prepared testimony, impose CPSD's recommended fines, revoke Respondents' household goods carrier permit with prejudice, and make any future entry into the household goods moving business by any of the Respondents conditional upon payment of the fines to be imposed and compliance with the Commission's formal application process.

On January 29, 2003 ALJ Bemesderfer received a letter from Respondent Nelson-Akst dated January 15, 2003, in which she stated that the business had closed, its assets had been repossessed and she was filing for personal bankruptcy. She asked that any further hearings be cancelled.

The time for responses to the allegations in the OII having passed without any testimony from Respondents, ALJ Bemesderfer admitted the allegations into evidence and accepted them as proven.