IV. The CPSD Allegations

According to the Act, 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.⁹ On its own motion, the Commission may suspend, change, or revoke any issued permit for a carrier's violations of the law, of any Commission rule or regulation, or of any term, condition, or limitation of the permit. A carrier is entitled to a hearing, which may be requested within 30 days after receiving the notice of the Commission action. ¹⁰ Every household goods carrier and every officer, employee, or agent of a carrier, is subject to a fine of $500 for each offense.¹¹ 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.¹² Each violation is separate and distinct offense, as well as each day's continuance of the offense. ¹³

A. Operating in corporate form as a household goods carrier without a valid permit

Since April 11, 2000, AAEMSS has been operating as a household goods carrier without a valid permit. Subsequently on July 27, 2000, the Respondents applied for a transfer of Permit T - 189,147 to AAEMSS. The Commission denied this request on February 14, 2002.

Under Section 5313.5, AAEMSS and its two officers could each be held liable for a fine of $5,000 per violation. CPSD alleges 167 instances of operating without having a valid permit in violation of Section 5133. If these allegations were proven at a hearing, each of the three Respondents could be held liable for $835,000, or when viewed collectively, the total fines would amount to $2,505,000.

B. Operating with a suspended Permit

Section 5286 prohibits a carrier from operating with a suspended Permit. According to CPSD, the Respondents performed 23 moves while the Permit was suspended: from January 29 through March 5, 2000, and from April 26 through May 7, 2000. Section 5313.5 imposes a fine of not more than $5,000 for each offense of Section 5286. Therefore, the Respondents' total fines for 23 violations of Section 5286 could amount to $115,000.

Section 5313 authorizes a $500 fine for each of the 11 days (from April 26 through May 7, 2000) during which the violations continued. Under Section 5313 each of the Respondents - the corporation and its two officers - could be held liable for an additional $5,500 in fines, or collectively a total of $16,500.

C. Operating without proper insurance coverages

According to Sections 5139 and 5161, and Commission General Orders (GOs) 100-M and 136-C, a carrier must maintain inter alia liability, property, and cargo insurance coverages in effect and on file with the Commission. In this case, the Respondents failed to maintain the required insurance coverages for a total of 47 days: from January 29 through March 5, 2000 (36 days), and from April 26 through May 7, 2000 (11 days). Section 5313 authorizes $500 fine per violation; at 47alleged violations, the Respondents could be held jointly liable for a total fine of $23,500.

D. Failure to comply with rules for the performance of household goods carrier services.

Section 5139 requires every carrier to comply with Max 4 and other Commission rules and regulations governing the performance of carrier services. The Max 4 regulations, for example, prescribe the applicable maximum rates, the units of measurement, the disclosures of estimated total costs required in advance of the move, and other aspects of a carrier's services. Section 5313 imposes a $500 fine on the carrier and/or any of its officers, agents, or employees who violate these rules.

CPSD specifically alleges over 1,716 violations of Max 4 and other Commission rules and regulations. The nature of these offenses, their counts, and the resulting potential fines include the following:

1. Charging a customer interstate tariff rates for moves that were solely within California, in violation of Max 4, Item 16(1)(b) (prescribed distance rates); 1 count at a $500 fine per offense, amounting to a total potential fine of $500.

2. Quoting or assessing rates and charges based on a unit of measurement inconsistent with Max 4 rates and charges; 2 counts at $500 fine per offense, amounting to a potential fine of $1,000;

3. Failing to use the weight of the property tendered for transportation in assessing charges based on weight; failing to determine the weight of shipments transported and to obtain a weigh master's certificate or weight ticket before delivery; and/or otherwise failing to comply with Max 4, e.g., Items 300, 310, 380, or 390. A total of 2 counts involving one or more of the above described offenses at a $500 fine per violation, resulting in potential fine of $1,000;

4. Billing customers for packing and sealing materials, such as dividers, paper, tape, and labels, which is prohibited by Max 4, Item 340 and footnote 6. A total of 5 counts at a $500 fine per offense, amounting to a potential fine of $2,500;

5. Failure to provide customers with a completed Agreement for Moving Services or other shipping document no less than 3 days before the date of the move, as required by Max 4, Items 128 and 132. A total of 59 counts at a $500 fine per offense, amounting to a potential fine of $29,500;

6. Arbitrarily stating a Not To Exceed Price of $5,000 or $10,000 that was not based on the Estimated Cost of Services or any Change Order for Services issued before an Agreement for Services was signed. CPSD alleges a total of 103 violations of Section 5245 and Max 4, Items 108 and 128 at Paragraph 2(q) involving a fine of $500 per offense and resulting in potential fine of $51,500;

7. Failing to disclose charges for packing services or materials prior to the move and as part of the Agreement for Moving Services or a Change Order; and failing to refund customers approximately $50,385.97 of collected overcharges. CPSD alleges a total of 213 violations of Section 5245 and Max 4, Items108, 120, and 128, each offense carrying a $500 fine and resulting in a total potential fine of $91,500;

8. Charging customers in excess of the stated "Not to Exceed Price," "Estimated Cost of Services," or "Change Order." CPSD alleges a total of 3 violations of Sections 5139 and 5245 and Max 4, Item 128, Paragraph 2(q), involving a $500 fine per offense and resulting in a total potential fine of $1,500;

9. Charging customers for unsubstantiated or unauthorized "flight carry" or "long carry." CPSD alleges 36 violations of Section 5139 and Max 4, Item 140, each offense involving a $500 fine, which would result in a total potential fine of 18,000;

10. Failing to respond to customer claims of loss or damage in accordance with Max 4, Item 92. CPSD alleges a total of 3 violations, each involving a $500 fine and resulting in a total potential fine of $1,500;

11. Failing to provide customers with a written Agreement for Moving Services in advance of the move. CPSD alleges 2 violations of Max 4, Item 128, with each offense carrying a $500 fine and resulting in a total potential fine of $ 1,000;

12. Imposing a $500 deductible for "basic coverage" insurance of loss or damage in violation of Max 4, Items 136 and 470. CPSD alleges 1 count at a $500 fine per offense and resulting in a potential fine of $500;

13. Failing to provide adequately trained or competent moving crew and failing to supervise or control crews' inappropriate conduct on the job, a violation of GO 142. A total of 5 counts at a $500 fine per offense, amounting to a total potential fine of $2,500;

14. Approximately 1,716 miscellaneous violations of Max 4, Items 128 and 132 ¹⁴, as enumerated in the CPSD Declaration at pp. 13-14, Paragraph 30, and Attachment K at pp. 19-40. A total of 1,716 violations at a $500 fine per offense, amounting to a total potential fine of $858,000.

If the record of evidence produced at an administrative hearing proves these or any other allegations, the Respondents would be subject to fines, restitution, suspension, and/or revocation with prejudice of their Permit.

IT IS ORDERED that:

1. An investigation on the Commission's own motion is instituted into the operations and practices of the following Respondents:

a. Laurie Rose Nelson-Akst, an individual doing business as All America Express Moving and Storage; and

b. All America Express Moving and Storage Services, Inc., a California corporation, and its two corporate officers, President Laurie Rose Nelson-Akst and Vice-President Etay Akst.

2. If the Respondents request it within 30 days after receiving this OII, a public evidentiary hearing on this matter will be held before an assigned Administrative Law Judge (ALJ) at a time and date as scheduled at a Prehearing Conference. At the evidentiary hearing, the Respondents will have an opportunity to present evidence and cross-examine witnesses regarding the following CPSD allegations:

a. The Respondents violated Section 5133, when from April 11, 2000 through the end of November 2000, they performed household goods carrier services as a California corporation, the "All America Moving and Storage, Inc.," without a valid Permit. CPSD alleges 167 counts based on the following:

· Attachs. D, F, I, and O and CPSD Decl. at pp. 1-6 and 13, business records (e.g., bank checks, correspondence) showing that after becoming incorporated, Respondents engaged in the household goods carrier business as "All America Express Moving and Storage Services, Inc.";

· Attach. K and CPSD Decl. at p. 13, CPSD listing of Respondents' moves, by customer name and according to month of occurrence during inter alia February through November 2000; and

· Attach. L and CPSD Decl. at pp. 12-14, Respondents' shipping records for 295 moves during 2/2000 through 11/2000.

b. The Respondents violated Section 5286, when they performed household goods carrier services while Permit T-189,147 was suspended from January 29 through March 5, 2000, and from April 26 through May 7, 2000. CPSD alleges 23 counts based on the following:

· Attachs. A - H and CPSD Decl. pp. 2 - 6, Permit history;

· Attach. L and CPSD Decl. at pp.13-14, shipping records evidencing household goods carrier services performed during periods of suspension, dated and numbered as follows:

o Count 1, January 29, 2000, No. 00-0020;

o Count 2, January 31, 2000, No. 00-0024;

o Count 3, February 4, 2000, No. 00-0035;

o Count 4, February 5, 2000, No. 00-0032;

o Count 5, February 6, 2000, No. 00-0039;

o Count 6, February 8, 2000, No. 00-0041;

o Count 7, February 9, 2000, No. 00-0033;

o Count 8, February 11, 2000, No. 00-0036;

o Count 9, February 12, 2000, No. 00-0044;

o Count 10, February 15, 2000, No. 00-0047;

o Count 11, February 19, 2000, No. 00-0050;

o Count 12, February 27, 2000, No. 00-0062;

o Count 13, February 29, 2000, No. 00-0052;

o Count 14, March 1, 2000, No. 00-0063;

o Count 15, March 4, 2000, No. 00-0069;

o Count 16, April 27, 2000, No. 00-0148;

o Count 17, April 29, 2000, No. 00-0152;

o Count 18, April 30, 2000, No. 00-0145;

o Count 19, May 2, 2000, No. 00-0161;

o Count 20, May 4, 2000, No. 00-0166;

o Count 21, May 5, 2000, No. 00-165;

o Count 22, May 6, 2000, No. 00-0144; and

o Count 23, May 7, 2000, No. 00-0131.

c. The Respondents violated Sections 5139, 5161, and GOs 100-M and 136-C, during the times from January 29 through March 5, 2000 (36 days), and from April 26 through May 7, 2000 (12 days), when the Respondents failed to maintain the requisite insurance coverages on file with the Commission. A total of 48 counts based on the following:

· Attachs. A - H and CPSD Decl. pp. 2 - 6, Commission records of Permit suspensions.

d. The Respondents violated Sections 5139 and 5191 and Max 4, Item 16(1)(b), when they charged customers interstate rates for moves that occurred solely within California. A total of 1 count according to the following:

· Attachs. I and J and CPSD Decl. at pp. 6-12, records of customer Natasha Harris, showing interstate rates were applied to her intrastate move.

e. The Respondents violated Section 5139 and Max 4, Item 44, when they quoted or assessed rates and charges based on units of measurement that did not comply with the prescribed Max 4 rates and charges. A total of 2 counts based on the following:

· Count: 1: Attach. L at p. L-529, records of customer Steve Kagan, including Freight Bill No. 99-0119; and

· Count 2: Attach. L. at p. L-579, records of customer Janice Tan, including Freight Bill No. 99-0153.

f. The Respondents violated Section 5139 by failing (i) to use the weight of the property tendered for transportation in assessing charges based on weight, (ii) to determine the weight of shipments transported by obtaining a weigh master's certificate or weight ticket before delivery, and/or (iii) otherwise to comply with Max 4, e.g., Items 300, 310, 380, or 390. A total of 2 counts based on the following:

· Count 1: Attachs. I - J and CPSD Decl. at pp.6 - 12, records of customer Natasha Harris; and

· Count 2: Attachs. V and W and CPSD Decl. at pp. 34-35, records of customer M. McHugh Jr.

g. The Respondents violated Section 5139 and Max 4, Item 340, Note 6, when they billed additionally for packing and sealing materials, e.g., dividers, paper, tape and labels. A total of 5 counts:

· Count 1: Attachs. I and J and CPSD Decl. at pp. 6-12, records of customer Natasha Harris;

· Count 2: Attach. N and CPSD Decl. at p. 15-19, records of customer Leonard Benedetto;

· Count 3, Attachs. P, Q, and R and CPSD Decl. at pp. 19 - 22, records of customer Caron Kuhl-Gentry;

· Count 4: Attachs. V, W, X, and Y and CPSD Decl. at pp. 32-36, records of customer M. McHugh, Jr.; and

· Count 5, Attachs. Z and AA and CPSD Decl. at 00. 37-40, records of customer Douglas Equils.

h. The Respondents violated Section 5139 and Max 4, Items 128 and 132, when they failed to provide customers with a completed Agreement for Moving Services no less than 3 days before the date of the move. A total of 59 counts, according to the following:

· Counts 1 through 58: Attach. L at pp. 1 through 3, listing customer shipping records and their page location in Attach. L; and

· Count 59: Attach. U and CPSD Decl. at pp. 30-32, records of customer Ellen Bay.

i. The Respondents violated Section 5139 and Max 4, Items 108 and 128, paragraph 2(q), when they arbitrarily stated a Not To Exceed Price of $5,000 or $10,000, that was not based on the Estimated Cost of Services or any Change Order for Services issued before the Agreement was signed. A total of 103 counts, according to the following:

· Counts 1 through 101: Attach. L at pp.3 through 5, listing customer shipping records and their page location in Attach. L;

· Count 102: Attachs. P, Q, and R and CPSD Decl. at pp. 19 - 22, records of customer Caron Kuhl-Gentry;

· Count 103: Attach. HH and CPSD Decl. at pp. 43 - 44, records of customer Stephanie Glenn.

j. The Respondents violated Section 5139, Section 5245, and Max 4, Items 108, 120, and 128, when before the move they failed to disclose in a written Agreement for Moving Services or a Change Order the charges for packing services or materials, and/or Respondents failed to refund customers approximately $50,385.97 of collected overcharges.15 A total of 213 counts, according to the following:

· CPSD Declaration at p. 13, and Attach. K at pp. 1 and 4-10 listing customer shipping records and their page location in Attach. L.

k. The Respondents violated Sections 5139, 5245, and Max 4, Item 108, when they charged customers in excess of the stated Not to Exceed Price, Estimated Cost of Services, or Change Order. A total of 3 counts according to the following:

· Count 1: Attach N and CPSD Decl. at p. 15-19, records of customer Leonard Benedetto;

· Count 2: Attachs. P, Q, and R and CPSD Decl. at pp. 19 - 22, records of customer Caron Kuhl-Gentry;

· Count 3: Attachs. V, W, X, and Y and CPSD Decl. at pp. 34-36, records of customer M. McHugh, Jr.

l. The Respondents violated Section 5139 and Max 4, Item 140, when they assessed customers unsubstantiated or unauthorized flight carry or long carry charges; a total of 36 counts, according to following:

· Counts 1-34: Attach. K, "Summary," at pp. 1-3, listing of customer shipping records and their location in Attach. L, and CPSD Decl. at p. 13;

· Count 35: Attachs. I and J and CPSD Decl. at pp. 6-12, records of customer Natasha Harris; and

· Count 36: Attachs. FF, GG, HH, and II, and CPSD Decl. at pp. 43-45, records of customer Stephanie Glenn.

m. The Respondents violated Section 5139 and Max 4, Item 92, when they failed to respond to customer claims for loss or damage as required by regulations. A total of 3 counts, according to the following:

· Count 1: Attach N and CPSD Decl. at p. 15-19, records of customer Leonard Benedetto;

· Count 2: Attachs. V, W, X, and Y and CPSD Decl. at pp. 32-36, records of customer M. McHugh, Jr.; and

· Count 3: Attach. EE and CPSD Decl. at pp. 41-43, records of customer Tiffany Philpott.

n. The Respondents violated Section 5139 and Max 4, Item 128, when they failed to provide customers in advance of the move, a written Agreement For Moving Services. A total of 2 counts, according to the following:

· Count 1: Attachs. S and T and CPSD Decl. at pp. 23-30, records of customer Sophia Sherman; and

· Count 2: Attachs. Z and AA - CC and CPSD Decl. at pp. 37-40, records of customer Douglas Equils.

o. The Respondents violated Section 5139 and Max 4, Item 136, when they imposed a $500 deductible on customers for basic insurance coverage of customers' household goods. A total of 1 count, according to the following:

· Count 1: Attachs. V, W, X, and Y and CPSD Decl. at pp. 32-36, records of customer M. McHugh, Jr.;

p. The Respondents violated Section 5135, Section 5139, and GO 142 by failing to provide adequately trained or competent crews, and by failing to supervise or control employees who abused or threatened customers. A total of 5 counts, as follows:

· Count 1: Attach N and CPSD Decl. at p. 15-19, records of customer Leonard Benedetto;

· Count 2: Attachs. S and T and CPSD Decl. at pp. 23-30, records of customer Sophia Sherman;

· Count 3: Attachs. U and CPSD Decl. at pp. 30-32, records of customer Ellen Bay;

· Count 4: Attachs. Z and AA - CC and CPSD Decl. at pp. 37-40, records of customer Douglas Equils; and

· Count 5: Attach. EE and CPSD Decl. at pp. 41-43, records of customer Tiffany Philpott.

q. Miscellaneous violations of Max 4, Items 128 and 132, a total of 1,716 counts, based on the following:

· Attach. K at pp. K-19 to K-40 listing customer shipping records and their page location in Attach. L, and CPSD Declaration, pp. 13-14, paragraph 30, numbered items (1) - (18).

3. The Respondents are placed on notice of, but not limited to, the following:

· They may be fined to the extent provided in Sections 5311 through 5322, for each and every violation described in this Order and adjudged as proven at an evidentiary hearing;

· They may be ordered to repay customer overcharges of approximately $ 50, 385.97 or more;

· Permit T-189, 147 may be suspended, canceled, or revoked pursuant to Section 5285(b); and/or

· Any subsequent application by any of the Respondents may be denied based on the outcome of this proceeding, pursuant to Section 5286.

4. During the pendency of this investigation, the following individuals and persons are ordered to cease and desist from violating any provision of the Household Goods Carriers Act¹⁶ or any pertinent Commission rules and regulations, e.g., Max 4:

· Laurie Rose Nelson-Akst, an individual dba All America Express Moving and Storage;

· All American Moving and Storage Services, Inc., and its two corporate officers, President Laurie R. Nelson Akst and Vice President Etay Akst.

5. The Consumer Protection and Safety Division may present additional evidence pertaining to the Respondents' operations and practices, whether by testimony or documentation, that may extend beyond the scope of the evidence presented in the CPSD Declaration and its attachments which accompanies the service of this Order on the Respondents. That Declaration including attachments constitutes the Staff's direct prepared testimony. The additional evidence may show whether any or all of the Respondents continue to engage in improper conduct after the issuance of this Order. Such evidence would bear upon the appropriate type and level of sanctions or fines to impose. At a Prehearing Conference or as otherwise directed by the assigned Administrative Law Judge, the Respondents will advise CPSD how many, if any, of CPSD's customer witnesses whom they wish to cross-examine at the evidentiary hearing.

6. Scoping Information: This paragraph suffices for the "preliminary scoping memo" required by Rule 6(c). This enforcement proceeding is adjudicatory. Absent a settlement pursuant to Rule 51 et seq., this matter will be set for an evidentiary hearing. A hearing may also be held to determine whether any proposed settlement is in the public interest or to answer inquiries by the assigned ALJ or Commissioner about the terms and conditions of settlement proposed.

7. If necessary and appropriate, a hearing may be held and the assigned ALJ will convene a Prehearing Conference to schedule a time and/or a place for the hearing. Objections to the Order may be filed but must be confined to jurisdictional issues that would nullify any eventual Commission decision on the merits of the issues regarding violations of statutes or of Commission rules and regulations.

The Executive Director shall cause a copy of this Order and the CPSD Declaration to be personally served upon the Respondents in the following names and at the following addresses:

Laurie Rose Nelson Akst

dba All America Express Moving and Storage

417 Park Avenue

San Fernando, CA 91340

All America Express Moving and Storage Services, Inc.

Attention: President Laurie Rose Nelson-Akst

417 Park Avenue

San Fernando, CA 91340

All America Express Moving and Storage Services, Inc.

Attention: Vice President Etay Akst

417 Park Avenue

San Fernando, CA 91340

A courtesy copy of this Order and the CPSD Declaration will also be mailed via first class mail, postage prepaid, to the Respondents at the above stated addresses.

This order is effective today.

Dated September 5, 2002, at San Francisco, California.

LORETTA M. LYNCH

President

CARL W. WOOD

GEOFFREY F. BROWN

MICHAEL R. PEEVEY

Commissioners

Commissioner Henry M. Duque, being necessarily absent, did not participate..