Consumer Violations (Phase II)

CPSD obtained the declarations of 58 Starving Students customers. Those declarations contain 234 allegations of violations of our rules and regulations concerning Starving Students' customer service.² (Exhibit 10, Attachment G.) CPSD has the burden of proving that Respondents violated our rules and regulations. (See CTS, D.97-05-089, 72 CPUC 2d 621, 642.)

Consumer Declarations

We summarize a sample of the 58 customer declarations presented by CPSD in order to illustrate the types of allegations raised by Starving Students' customers. Jeffrey Mazik told Starving Students his move would require special care and materials but the crew did not bring proper materials. Mazik's goods were placed in storage and when he wanted them moved, he was told that they had been stolen. The police report noted the suspects in the theft were Starving Students' employees hired to guard the truck where the goods were left instead of in a storage facility. Starving Students quoted Kim Vierra the lowest price for her move, which involved goods from a three-bedroom house. The movers arrived with too small a truck and had to wait for a second truck, which would cost extra. They intimidated her into signing a statement that they had done a good job, arrived too late to complete the work and told her she would have to pay and to sign a damage waiver before they unloaded. Her claim noted items were missing or damaged and she was offered a small amount of money and other customers' goods.

Scott Randol's mover claimed he had to rush to the scales to weigh the load in time, resulting in damage to many items. Randol paid with his credit card, which had fraudulent charges for the following three days. Michelle Elemore was quoted a specific price for her move. The movers showed up a day late and the move took three days rather than the promised two days. When the movers arrived they began to fight with each other, throwing her furniture and boxes at each other and out of the truck. Every item Elemore moved was damaged. When she tried to break up the fight, the movers were verbally abusive. She purchased the extra valuation option but was only offered $108, because she could not prove it was the movers who had damaged her goods. Kent Kruse and Kenneth Golub both had one mover divert attention from the actions of another mover and ended up having goods taken. In the civil action brought by Golub after Starving Students denied the claim, Starving Students' testimony revealed that it did not conduct background checks on movers and that one of the movers had been released from prison shortly before the move after serving time for armed robbery.

Reneda Wright's movers arrived late and made her pay $300 in cash over the quoted price after inspecting her goods. The movers made her children assist in the move, refused to box or wrap anything, and left some goods on the ground in front of her new apartment. Wright's claim for damaged goods was denied, because the movers denied doing any damage. Anthony Branch and Maria Sandoval had to make other arrangements for their moves after Starving Students failed to show on the original and rescheduled move dates. Dolores Hoover's movers did not deliver her goods the next day as promised. When they called the following day to say they would deliver the goods in a few hours and had been asleep since the day of the move, she called Starving Students and the Highway Patrol. When the movers were unloading the truck the S.W.A.T. team arrived because there was an arrest warrant outstanding for one of the movers. Hoover also was arrested but was released after an hour. Drug paraphernalia was found in the truck. A Starving Students manager arrived later to finish unloading the truck. Hoover was offered a discount on the move, but further relief was denied when she filed a claim because she had accepted the discount as restitution.

The Consumer Declarations Support CPSD's Allegations

Starving Students asserts we cannot rely on the declarations and complaints CPSD provides to support allegations that Starving Students violated our rules and regulations because they are inadmissible hearsay. Our rules on the admissibility of hearsay are liberal. We have noted:

Rule 64 of the Commission's Rules of Practice and Procedure provides that "although technical rules of evidence ordinarily need not be applied in hearings before the Commission, substantial rights of the parties shall be preserved." Under this rule the Commission allows admissions of hearsay although it is given less weight than other evidence. In general, hearsay in administrative proceedings is admissible if a responsible person would rely upon it in the conduct of serious affairs, regardless of its possible inadmissibility in civil actions. (Investigation re North Shuttle Service, Inc., D.98-05-019, 80 CPUC 2d 223, 230.)

In this proceeding, CPSD filed the 58 customer declarations with the OII after contacting 176 customers. CPSD obtained these customers' names primarily from Starving Students' claims register, so Starving Students was familiar with these customers and their claims before this OII issued. CPSD also cross-checked the claims register with CPSD's informal complaint files. Most declarants also filed complaints at the Commission, corroborating the concerns raised in their claims.

Starving Students also had the opportunity, if it chose, to depose or subpoena the declarants or to work with CPSD on producing declarants who lived in the area. Starving Students did not avail itself of those opportunities. After a scheduling conference prior to the hearings, CPSD, at the assigned ALJ's direction, made available a list of 14 declarants who could testify in person and by telephone.³ Again, Starving Students declined to cross-examine all but one of the declarants. Starving Students cannot reasonably object to our reliance on the declarations of customers it declined to subpoena, depose, or cross-examine. It is reasonable to rely on declarations of consumers who filed complaints with a respondent in determining whether that respondent violated our rules and regulations.

In the OII, CPSD summarized a review of 150 of Starving Students' shipping documents, including customer complaint records, for the years 2000 and 2001. (Exhibit 10, Attachment P.) Because the documents comprise three boxes, CPSD did not produce those records and instead compiled a list of the alleged violations by consumer. These complaints raise an additional 388 counts of alleged violations of our rules and regulations. In a supplemental declaration, CPSD provides 19 complaints from CPSD's informal complaint files that allege 64 violations of our rules and regulations. (Exhibit 11, Attachment 1.)

Starving Students again objects that these records are inadmissible hearsay. It is not clear which allegations arise solely from CPSD's shipping document review and which are based on the complaints and corroborated by review of the other shipping document. CPSD did not obtain sworn declarations from these customers, and Starving Students did not subpoena or depose them. Shipping documents could, on their face, illustrate violations of our rules and regulations but the voluminous documentation did not permit CPSD the opportunity to demonstrate how each of those records supported the allegations of violations. Although we have considered complaints in determining violations in other proceedings, we reluctantly find that in this proceeding these records are insufficient to find additional counts for particular violations. Unlike the declarations, informal complaints are not sworn. Although CPSD compared CPSD's records when selecting individuals to interview from Starving Students' claims register, no such comparison was done here, and CPSD did not interview these complainants. However, these documents are business records that demonstrate complaints received concerning Starving Students from late 2001 until mid-2002. In addition, the complaints do support the counts alleged in the declarations and demonstrate that Starving Students' customer service problems are ongoing. Had CPSD the time and the resources to interview these complainants, CPSD clearly could have supported additional counts for alleged violations.⁴

CPSD also includes 13 complaints received by the BBB from October 2001 to June 2002, which CPSD determined allege 25 violations of our rules and regulations. Although these complaints are business records, CPSD did not interview these consumers and did not obtain sworn declarations. We similarly find that these complaints are insufficient to prove additional counts for alleged violations. However, they demonstrate that complaints were received during that period and can corroborate the allegations contained in the sworn statements and the counts resulting therefrom.

Failure to Explain Valuation Options is Beyond the Scope of this OII

Starving Students states that some alleged violations exceed the scope of this proceeding, that CPSD failed to file a motion to amend the scope as required in the OII, that Starving Students had no notice of the additional charges, and that this OII is limited to the charges set forth in the OII. Specifically, Starving Students claims CPSD expanded the scope of the OII to charge Starving Students with 14 counts of allegedly failing to offer or explain consumers the choice of valuation options, 9 counts of dispatching trucks of inadequate size, 85 counts of failing to provide scheduled moving services, 57 counts of failing to observe quoted rates when charging consumers a price higher than the verbal estimate, 48 counts of failing to acknowledged customer claims in a timely manner, and 54 counts of failing to complete pertinent items on shipping documents.

The counts concerning explaining valuation options are not contained in the OII's alleged violations. Because these violations are not part of the OII, they will not be addressed in this decision. CPSD has no separate charge for failing to complete pertinent items on shipping documents, and no finding on that issue will be made in this decision. The remaining charges are part of the OII. The charges concerning dispatching trucks are an alleged violation of GO 142 and the remaining charges all are components of Max Tariff 4, concerning dishonesty, providing an estimate, and acknowledging claims. We will consider them in this proceeding.

Starving Students Failed to Follow Standards Re Capable Employees in Violation of Commission Rules and Regulations

GO 142 requires that carriers shall not permit any driver, helper, and/or packer to be used in the transportation of any household goods shipment unless such person is trained and experienced in the movement of used household goods. GO 142 also requires that carriers shall not knowingly permit drivers, helpers, and/or packers to go on duty who are under the influence of alcohol or drugs; employees are prohibited from drinking alcohol while on duty. CPSD contends that Starving Students' movers exhibited unprofessional conduct by often appearing untrained and unprofessional (Exhibit 10, 32 counts), or intoxicated (Exhibit 10, 3 counts) and that consumers' goods were damaged or lost as a result. CPSD also contends consumers were aggressively solicited or intimidated for tips or cash and many report that Starving Students movers threatened to stop moving their goods if they did not pay a tip, in contravention of the requirement to supervise employees. (Exhibit 10, 11 counts.)

CPSD contends a large number of Starving Students' customers had their personal goods stolen by Starving Students' employees (Exhibit 10, 23 counts) and that Starving Students still hires convicted felons who have a history of convictions for robbery or theft. Starving Students also dispatched trucks that were too small to complete the job in violation of GO 142 (Exhibit 10, 5 counts.)

Starving Students responds that the company trains its employees in proper moving procedures, behavior towards customers, safety, customer rights and responsibilities, and compliance with federal and state moving regulations and that newly hired employees also receive on-the-job training from the company's more experienced workers. (Exhibit 33.) Starving Students conducts background checks and will not hire anyone who has a felony conviction for robbery, theft or any violent offense. Starving Students states it did not knowingly allow any movers to go on duty while under the influence of drugs or alcohol and would terminate employees who use drugs or alcohol while on duty. Starving Students claims that customers often provide inaccurate information on the amount of goods to move and that in one instance where it was alleged it provided a truck that was too small it was accommodating a customer who was not ready on the date of her scheduled move.

A former Starving Students employee, Deborah Borrego, testified that Starving Students hired workers off the street, without any training or background checks, and used workers on moves without providing training. (Exhibit 10, Attachment K.) A review of the complaints provided and the summary documentation demonstrate a consistent pattern of conduct contrary to our rules and regulations. We find Starving Students violated GO 142 at least 50 times by not providing capable help (46 counts) and providing a truck that was too small (4 counts) as established through the declarations and corroborated by the Starving Students, CPSD, and BBB complaints and Borrego's testimony. We cannot equate the condition of equipment and facilities with the alleged theft of consumer goods and decline to find additional violations of GO 142 on that basis.

Starving Students Violated Commission Rules Re Loss and Damage Claims

Pub. Util. Code § 521 states no claim against a household goods carrier for lost or damaged goods shall be denied solely because the lost or damaged goods were not noted at the time of delivery. In addition, Max Tariff 4, Item 92, provides that consumers have nine months in which to file a claim for loss or damage. Under item 136, if no value is declared, the default protection is actual cash value up to $20,000. A carrier shall acknowledge receipt of a claim for loss or damage in writing within 30 days and either pay the claim, decline to pay, or make a firm compromise offer to the claimant within 60 days. (Item 92, ¶15; GO 139-B, Rule 2.7.)

CPSD contends Starving Students routinely denied claims solely because the lost or damaged goods were not noted in the consumer's shipping documents. (Exhibit 10, 13 counts.) Starving Students did not apply consumers' chosen valuation option but instead limited the consumer to $.60 per pound per article. (Exhibit 10, 5 counts.) Starving Students also did not give consumers the opportunity to review the "Agreement for Services" prior to the move, and they did not have the opportunity to declare the value of their shipment. (Exhibit 10, 18 counts.) CPSD alleges that Starving Students ignored customer claims. (Exhibit 10, 5 counts.)

Starving Students states its standard Agreement for Moving Services lists the valuation options offered by the company. Starving Students testified that it applies a valuation equal to actual cash value if the customer does not expressly declare a valuation other than $20,000 of actual cash value. Starving Students states that its denial letters, attached to CPSD's investigative report, demonstrate that the lack of exceptions was considered among other factors, including the lack of any evidence that damage was caused by Starving Students. Finally, Starving Students states carriers have the right to deny a claim if all charges for transportation services have not been made and the right to collect all transportation and accessorial charges prior to relinquishing physical possession of a customer's shipment. (Item 104.)

A review of the complaints provided and the summary documentation demonstrate a consistent pattern of conduct contrary to our rules and regulations. We find Starving Students violated § 521 and items 92 and 136 at least 41 times as established through the declarations and corroborated by the Starving Students, CPSD, and BBB complaints.

Starving Students Misrepresented Its Services in Violation of Commission Rules

Max Tariff 4, Item 88, prohibits carriers from misrepresenting the scope of services offered to the public. Max Tariff 4, Item 100, requires carriers to give consumers 24-hour notice, by telephone or fax, that there will be delays in pickup or delivery of the consumers' household goods.

CPSD contends consumers often had to wait hours for Starving Students movers to arrive, without any notice from Starving Students. (Exhibit 10, 15 counts.) Starving Students also failed to show up on the date schedule for the move. (Exhibit 10, 14 counts.) Consumers had to cancel and make other arrangements because Starving Students never arrived, causing unexpected expenses and loss of time. CPSD also contends Starving Students had a pattern and practice of overbooking scheduled moves. Starving Students informed some customers that they were overbooked. (Exhibit 10, 3 counts.)⁵

Starving Students states Item 100 does not require a carrier to commit to a specific date or time for a move. Starving Students does not agree to a specific time for a pick-up but provides customers with an estimated time. Also, Item 100 does not apply to shipments weighing less than 5,000 lbs or transported less than 75 constructive miles. Starving Students makes a reasonable effort to determine the size of the truck needed for a move as required by GO 142(1)(b) by asking the customer about the goods to be moved, including the number of rooms of furniture the customer will be moving. If the customer does not provide accurate information, Starving Students could dispatch the wrong size truck for the move.

Borrego stated Starving Students consistently overbooked moves, scheduling more moves than trucks available. She was instructed to give excuses, such as the truck broke down, even though the cause of the delay or failure to show up was overbooking. (Exhibit 1, Attachment K.)

Item 100 does not apply to certain short-haul moves, and the evidence fails to establish the exact distance of the moves in the declarations and complaints. Nonetheless, a persistent pattern of scheduling moves that could not be completed is misrepresentation. We find Starving Students violated item 88 and 100 at least 32 times as established through the declarations and corroborated by the Starving Students, CPSD, and BBB complaints, Borrego's testimony, and CPSD's analysis of booked versus completed moves.

Starving Students Violated Commission Rules Re Estimates

Item 108 requires that all estimates shall be in writing upon prescribed forms, and shall be based upon visual inspection of the goods to be moved. Item 108 also provides for a maximum allowable charge for estimated shipments. Item 112 requires that carriers complete a Basis for Estimated Cost of Services after an estimator visually inspects the goods prior to determining the estimated cost of requested services. Pub. Util. Code § 5245 provides that failure to observe Commission rules and regulations regarding estimates is unlawful. Item 120 requires a carrier to prepare a change order for services if there are additional services or additional articles not covered in the estimate.

CPSD contends that Starving Students provided verbal estimates over the telephone without conducting any visual inspection. (Ex. 10, 23 counts.) Some of these estimates result from Starving Students providing consumers with a cost per hour and an estimate of the hours needed to complete the move. (Ex. 10, 2 counts.) CPSD also contends that customers were surprised by unexpected overcharges, because Starving Students did not provide a change order, particularly after providing improper verbal estimates. (Exhibit 10, 16 counts.)

Starving Students acknowledges that a computer glitch may have resulted in some Agreements for Moving Services to be sent to customers without a "not to exceed price," but this problem has been corrected. Starving Students states it provides shippers with rate quotes but does not provide verbal estimates of the cost of a move. Finally, Starving Students asserts CPSD did not prove there was an estimate that required the preparation of a change order.

A review of the complaints provided and the summary documentation demonstrate a consistent pattern of conduct contrary to our rules and regulations. We find Starving Students violated items 108, 112 and 120 at least 25 times as established through the declarations and corroborated by the Starving Students, CPSD, and BBB complaints. We find Starving Students violated item 120 at least 7 times when it increased upfront charges (1 count) and exceeded verbal estimates (6 counts). The other declarations do not establish that there was an estimate or charge that was exceeded.⁶

Starving Students Failed to Provide Required Information in Violation of Commission Rules

Max Tariff 4, Item 28, requires carriers to provide the "Agreement for Moving Services," which contains the rights and obligations of the consumer and carrier, no less than three days prior to the date of the move where possible. That agreement should contain a "Not to Exceed Price," which is the maximum amount the consumer can be charged for the services listed. Item 88 requires that carriers provide consumers with a booklet entitled "Important Information for Persons Moving Household Goods" prior to the move.

CPSD contends that Starving Students did not provide the "Agreement for Service" three days prior to the date of the move. (Exhibit 10, 18 counts.) CPSD contends that Starving Students, by providing the documents on the day of the move, prevented consumers from having a full and fair opportunity to inventory their belongings and write them on the forms, and to be fully informed about their move. CPSD contends Starving Students completely failed to provide consumers with the important information booklet. (Exhibit 10, 25 counts.)

Starving Students states it has procedures that ensure all customers are mailed an agreement the day after they call to place an order with Starving Students, unless the move is ordered less than three days before it occurs. The important information booklet is mailed with the agreement.

A review of the complaints provided and the summary documentation demonstrate a consistent pattern of conduct contrary to our rules and regulations. We find Starving Students violated items 28 and 88 at least 43 times as established through the declarations and corroborated by the Starving Students, CPSD, and BBB complaints.