In the Matter of the Complaint Against

PEORIA SCALE SERVICE BOB'S SCALE SERVICE
P. O. Box 156
at Washington, IL 61571

P.S. Docket No. 14/31;

12/17/82

Grant, Quentin E.

APPEARANCES FOR COMPLAINANT:
H. R ichard Hefner, Esq.
Consumer Protection Division
Law Department
United States Postal Service
Washington, DC 20260
Steven B. Caver, Esq.
Regional Inspector Attorney Rm. 715,
Main post Office Bldg.
Chicago, IL 60607
Niall K. Doyle, Esq.
Postal Inspector
San Bernardino, CA 92412

APPEARANCE FOR RESPONDENT:
Bradley W. Swearingen, Esq.
Moehle, Smith & Day, Ltd.
118 Peoria Street
Washington, IL 61571

INITIAL DECISION

The Complaint filed in this matter alleges that Respondent is in violation of 39 U.S.C. § 3005 in seeking remittances of money or property through the mails by means of several false representations, made orally and in advertisements, concerning the installation and accuracy of commercial scales sold by Respondent. As set forth in paragraph 3 of the Complaint, the specific allegations of representations falsely made by Respondent are as follows:

(a) Respondent has the requisite training, knowledge and experience to make competent installations of commercial scales;

(b) Respondent will make delivery and competent installation of new or reconditioned commercial scales within a specific or reasonable time of his receipt of partial payment;

(c) The agreed upon total purchase price is for the complete, competent installation of a properly functioning and legally certifiable commercial scale without the purchaser incurring any additional installation costs; and

(d) The completed scales when installed will weight accurately and will otherwise conform to the appropriate regulatory agencies' standards in order to be certified for commercial use.

Except for an admission of the allegation that Respondent has placed advertisements similar to those attached to the Complaint, Respondent's Answer denied all of the material allegations contained in the Complaint.

A hearing was held in Chicago, Illinois, on October 7, 1982, at which both parties presented evidence. Complainant's witnesses were Postal Inspectors Karl Kell and Rickey Dell Dodd; Cecil Damery, an expert witness on the matter of scale installation and repair; Sidney Colbrook, Manager of the Weights and Measures Program, Department of Agriculture, State of Illinois; and so-called (by Complainant) "victim" witnesses Bruce Steinacker, Richard E. Van Cloostere, and Wilbur Davis. Respondent's only witness was Robert D. Alexander, the owner and operator of the captioned Respondents.

Each party has filed proposed findings of fact and conclusions of law.

FINDINGS OF FACT

1. For approximately 25 years Robert D. Alexander sold and installed commercial and non-commercial truck scales doing business as Peoria Scale Service, P.O. Box 156, Washington, IL. About the end of 1981, following an extended period of aggravated financial problems, Alexander was declared a bankrupt in a proceeding brought by his creditors. Since that time he has sold scales doing business as Bob's Scale Service, P.O. Box 156, Washington, IL (Tr. 250-258).

2. In his scale business Alexander, for many years, has employed advertisements, appearing in numerous publications, in the following, or substantially similar, form:

FIFTY TON, 60' x 10' Truck Scales, completely reconditioned. Also other sizes. Will install if desired. PEORIA SCALE SERVICE, P.O. Box 156, Washington, Illinois 61571. Phone (309) 444-2837.

While operating as Bob's Scale Service, Respondent has used ads such as the following:

60' x 10', 50 TON, 24' x 10', 30 ton truck scales. Also many other sizes. Completely reconditioned and installed if desired. Bob's Scale Service, P.O. Box 156, Washington, ILL 61571. Phone 309, 444-2837.

3. In connection with some of his sales, Respondent has received payment through the mail (CX-1, 12-A; Tr. 49). The evidence introduced by Complainant indicates that most payments are made to Respondent by wire or are hand delivered (Tr. 49). In a test contact made by Postal Inspector Karl Kell during an investigation of Respondent, Mr. Alexander stated a strong preference for transmittal of payment by wire (CX-2, pp. 6, 10, 15; Tr. 30). The evidence does not support a finding that Respondent routinely, or even frequently, asks that payment be sent by mail.

4. Respondent has installed approximately 1200 scales over the past 30 years. The geographical range in which he has conducted business is limited to an approximate 1000-mile radius from Peoria (Tr. 245). He is licensed or registered to install scales in all states within this range which require licensing or registration in March 1981. The administrative revocation was upheld on appeal to the Circuit Court of the Tenth Judicial Circuit. A further appeal was still pending at the time of the hearing in the instant matter (CX-22; Tr. 230).

5. Complainant placed in evidence through Postal Inspector Rickey Dell Dodd a document entitled "Schedule of VIctims" (CX-12A). It lists 47 individuals or businesses said by Inspector Dodd to have paid Respondent for the purchase and/or installation of weigh scales and who complained that the scales furnished by him did not meet the specifications set by the state where they were installed (Tr. 50, 51). Inspector Dodd obtained the information contained in CX-12 from the office of the Attorney General and the Department of Agriculture of the State of Illinois and the Department of Agriculture of the State of Iowa, all of which had received complaints about Respondent. Other information was obtained from the records of Mr. Alexander's involuntary bankruptcy proceeding. The information placed in the record concerning most of these "victims" and the basis of their complaints was sketchy. Some of it was in the form of "victims'" answers to questionnaires generated by the Postal Inspection Service. Some of it was derived by the Inspection Service from letters of complaint to the states of Illinois and Iowa. Inspector Dodd interviewed 10 of the "victims" (Tr. 45). Inspector Dodd described the general nature of the complaints as failure of Respondent to fulfill contracts for installation of weigh scales in that either a scale was not delivered or that installation of the scale was not completed or did not meet state requirements or was not in accordance with the terms of a contract with Respondent (Tr. 50, 51, 69, 70, 79).

6. Nine of the 47 "victims" purchased scales from Respondent in 1981. The remainder made purchases in years from 1973 through 1980 (1973-one; 1974-two; 1975-six; 1976-four; 1977-six; 1978-five; 1979-nine; 1980-five) (CX-12A). Inspector Dodd was not aware of any dissatisfied customer whose contract with Respondent occurred after January 1, 1982 (Tr. 76). Fourteen of the 47 made payment by mail. There is no evidence that Respondent asked that these payments be made by mail.

7. Inspector Dodd was apparently not aware of any complaints by dissatisfied customers other than the 47 listed in CX-12A. He did know of some satisfied customers (Tr. 75).

8. Three "victim" witnesses testified at the hearing.

a. Bruce Steinacker, a farmer residing at Hortonville, Wisconsin, heard about Respondent through Steinacker's seed dealer. Steinacker contacted Mr. Alexander by telephone in November 1980 and told him what kind of scale he wanted. On January 1, 1981, Alexander called Steinacker offering a 50 ton, 54-ft. reconditioned truck scale, installed to State of Wisconsin requirements, complete turnkey job, for a total price of $12,000. Alexander told Steinacker the work would be performed as soon as the frost was out of the ground. No specific date was mentioned. Steinacker accepted the offer. The down payment required was $9,000. The record does not show that Respondent asked that the down payment be sent by mail but Steinacker did so on January 14, 1981. Respondent never delivered the scale and did not refund the down payment (Tr.106-121).

b. Richard E. Van Cloostere, a farmer and contractor, residing in Murphysboro, Illinois, read Respondent's ad in newspapers. He called the telephone number in the ad and talked with Mr. Alexander. After several telephone conversations Van Cloostere and Alexander, on or about September 1, 1980, agreed on a price of $15,000 for a 100-ton used scale, installed, to meet State of Illinois requirements. Van Cloostere was to excavate a pit for the scale and pay for the necessary concrete. Respondent was to supervise and pour all concrete footings, install the scale, complete with concrete deck 10 ft. x 60 ft. The work was to be completed by the 1981 wheat harvest in late May or early June 1981. Alexander said working capital was hard to come by so he would need a down payment of $12,000. Van Cloostere sent a check in that amount by mail. The record does not indicate that Respondent directed or suggested use of the mail for transmittal of the down payment. Van Cloostere prepared the necessary pit. Respondent in spite of repeated requests by Van Cloostere neither prepared the foundation and deck nor furnished a scale. Van Cloostere finally procured a scale, installed, from another source for $24,000 (CX-14A, 14B; Tr. 124-141).

c. Wilbur Davis lives in Ottumwa, Iowa. He is an engineer with the Deere Co. and also operates a farm. Needing a scale to weigh feed and livestock, Davis responded by telephone to one of Respondent's advertisements. He talked with Mr. Alexander. On or about December 1, 1981, they settled on a price of $1500, to be paid immediately, for a scale to be installed soon. Davis was to prepare the foundation. Davis sent Respondent a check dated December 1, 1981, by mail. The record is silent as to any indication by Alexander as to how payment was to be made and transmitted. Respondent started work on fabricating the scale. Severe winter weather set in. By the time the weather moderated Alexander was in involuntary bankruptcy. The scale paid for by Davis was never delivered. Davis was listed as a creditor of Alexander in bankruptcy (CX-15A thru 15F; Tr. 141-158).

Respondent intended to complete its contracts with Van Cloostere and Davis but was prevented from doing so by involuntary bankruptcy proceeding (Tr. 251, 254).

9. Complainant's witness Cecil Damery, an expert in scale installation and repair, repaired a scale installed by Respondent in 1976 for W. W. Hill Feed and Grain Company of Williamsville, Illinois. The scale had been condemned by the State of Illinois (Tr. 160-162). In Damery's opinion Respondent's work in installing that scale had been "kind of sloppy" (Tr. 167) because it hadn't been leveled up properly (Tr. 165).

10. Based on Mr. Damery's testimony I find that the average time required to install a truck scale, without interference by bad weather or other problems, is 7 to 10 days (Tr. 175).

11. In spite of the poor quality of Respondent's installation of the scale for W. W. Hill, Damery was of the opinion that Respondent has the knowledge and ability to install scales properly (Tr. 182, 183).

12. According to a complaint filed in an injunction action in the State of Illinois brought by the State against Respondent, the revocation of Robert Alexander's certificate as a registered repairman in that state was based on failure of four scales sold and installed by Respondent to weigh accurately, failure of two of those scales to pass state inspection, and refusal of Respondent to repair two of such scales (CX-23, Count II, paragraphs 1-7). Two of these scales were sold and installed by Respondent in 1976 (Vissering, B & B products), one in 1978 (O'Reilly), and one in 1979 (Miller Bros. Fertilizer) (CX-12A).

Although Mr. Alexander had been tested and registered as a scales repairman in the State of Illinois in 1978 and 1979 (Tr. 232) the order of revocation held that Respondent did not have a working knowledge of weighing and measuring devices covered by his registration and that he lacked a working knowledge of appropriate weights and measures laws, rules and regulations (CX-22).

As found above, the revocation of Respondent's certificate was on appeal in the Illinois Courts on the date of the hearing in the instant matter (F of F No. 4, supra).

13. Respondent may legally sell, but not install, commercially- used scales in the State of Illinois. He may sell and install scales not to be used commercially. The Illinois revocation order does not prevent Respondent from selling and installing commercially- used scales in any other state (Tr. 232).

14. In the past two years Respondent has sold and installed 30 to 40 scales outside of Illinois with which customers are satisfied (Tr. 285).

15. Since the date of the Circuit Court order upholding the administrative revocation of his registration, Respondent has not installed scales in Illinois. However, he has sold four or five scales and delivered them (Tr. 261, 284)

16. Respondent now deals mainly in portable scales requiring little, if any, installation (Tr. 263, 269).

17. At the time of the hearing in the instant matter, financial difficulties would not have interfered with Respondent's delivery and installation of scales (Tr. 264, 278).

18. It is probably that in most of his sales Respondent expressly or impliedly made representations similar to those alleged in paragraph 3 of the Complaint. The evidence is insufficient for a finding that such representations were made falsely.

DISCUSSION

Complainant has not made out a case under 39 U.S.C. § 3005. It has failed to establish the necessary engagement by Respondent in a "scheme or device" and the making of false representations by Respondent.

Distilled, the evidence simply shows that Respondent, Robert Alexander, has operated a weigh scale business for about 25 years in which he has sold and installed approximately 1200 scales; that proper installation of such scales requires certain skill and knowledge which Alexander possesses but that in the past ten years 47 customers have complained about the quality of Respondent's installation or about the accuracy of the scales installed and that in 1981, on the basis of 4 such complaints, the State of Illinois revoked Alexander's certificate as a registered scales repairman (in a proceeding still in the courts) with the result that Alexander presently may not install scales in that state, although he is not barred from installing scales in other states in which he performs contracts. The evidence also shows a few failures by Respondent to deliver scales for which he had received a down payment.

The bulk of the customer complaints about Respondent, including his failures to deliver, coincide with serious financial difficulties he was having, culminating in involuntary bankruptcy. There is no evidence of complaints about the quality of the work he has done or any failures to deliver scales he has been paid for since the bankruptcy proceeding in 1981.

The picture painted by the record is, at most, one of a small businessman who, over many years, has failed to one degree or another, to live up to the terms of a number of contracts, small relative to the total number he has performed. The evidence does not support a finding that in making any contract Respondent misrepresented his ability to perform or his intentions, at the time, about delivery of the scales, the quality thereof, or the workmanship of installation.

Further the evidence does not show consistent use of the mails by Respondent to receive payments under his sales agreements. The indication is that most payments are hand-delivered or wired.

CONCLUSIONS OF LAW

Complainant has failed to prove by a preponderance of the credible evidence Respondent's violation fo 39 U.S.C. § 3005 as alleged in the Complaint. Therefore, Complainant's request for a mail stop order is denied and the Complaint is dismissed.