In the Matter of the Complaint Against THE CANADIAN EXPRESS CLUB, C.E.C. SERVICES, 624654 ONTARIO LIMITED FIRST TELEMEDIA GROUP, GEORGE MICHAEL YEMEC, ANITA FERN RAPP, and ELIZABETH TOTH, 1030 Rand Building 14 Lafayette Square at Buffalo, NY 14203-1928 and at Main Post Office Box 823 Niagara Falls, NY 14302-0661 P.S. Docket No. 28/52 07/20/88 Cohen, James A. Judicial Officer APPEARANCES FOR COMPLAINANT: Thomas A. Ziebarth, Esq. Jeffrey S. Kahn, Esq. Consumer Protection Division Law Department United States Postal Service Washington, DC 20260-6100 APPEARANCE FOR RESPONDENTS: Elizabeth St. Clair, Esq. Rabinowitz, Boudin, Standard, Krinsky & Lieberman, P.C. 740 Broadway at Astor Place New York, NY 10003-9518
By Postal Service Decision dated March 7, 1988, Respondents C.E.C. Services, 624654 Ontario Limited, First Telemedia Group, George Michael Yemec, Anita Fern Rapp and Elizabeth Toth (hereafter collectively referred to as Respondents) were determined to be in default and the Orders sought in the Amended Complaint and authorized by 39 U.S.C. 3005 were issued against those Respondents. The proceeding was thereupon remanded for further processing with regard to the remaining Respondent, The Canadian Express Club. Thereafter, Respondents filed a Motion for Reconsideration of the Postal Service Decision and during the pendency of the Motion the proceeding against The Canadian Express Club was suspended.
The default determination against the six Respondents was based on the finding that service of the Amended Complaint was accomplished on October 21, 1987, and Respondents had failed to file Answers or seek an extension of time within fifteen (15) days thereafter. 1/ Respondents allege in their Motion for Reconsideration that they did not receive service of the Amended Complaint until after November 5, 1987, the date for filing their Answers, had service been accomplished on October 21, 1987. Respondents also contend that Complainant will not be prejudiced if the Motion is granted; that Respondents have meritorious defenses to the Amended Complaint; 2/ and that prior Motions filed by Respondents extended or tolled the period for filing the Answers.
Complainant opposes the Motion for Reconsideration, alleging primarily that service was accomplished on October 21, 1987, the date the record indicates the Amended Complaint was delivered by mail to Respondents' 1030 Rand Building address. Complainant also argues that Respondents had notice of the Answer due date since on November 2, 1987, Respondents' counsel received from the Recorder's office a copy of the Notice of Service containing the Answer due date.
Respondents' contention that their Motions extended or tolled the period for filing their Answers was considered and rejected in the March 7, 1988, Postal Service Decision. It is once more rejected for the reasons stated in that Decision. The holding of the March 7, 1988, Postal Service Decision that proper service of the Amended Complaint against the six named Respondents was accomplished on October 21, 1987, is affirmed. Respondents continued to receive mail at the 1030 Rand Building address and thus operations continued there, at least for the receipt of mail through October 21, 1987, the date the Amended Complaint was delivered to that address. Respondents were responsible for establishing proper procedures for the handling of mail at their 1030 Rand Building address. The fact that the procedures for handling mail at that address were insufficient to provide Respond- ents with prompt notice of receipt of the Amended Complaint (see Rix Decl.) does not nullify proper service. Accordingly, it cannot be concluded that service at the 1030 Rand Building address was improper or that Respondents were not served on October 21, 1987, when the mail containing the Amended Complaint was deposited there.
Nevertheless, the circumstances of this appeal present no prejudice to Complainant if Respondents are allowed to present their defenses to the allegations of the Amended Complaint. A hearing is required to be held in the matter of the Complaint against Respondent The Canadian Express Club. The allegations of false representation against The Canadian Express Club are the same as the allegations against the other six Respondents. As Respondents correctly contend, the only disadvantage to Complainant is that they will have to proceed in a hearing involving more than one Respondent. This added burden does not constitute prejudice, since Respondents are represented by the same counsel and the defenses raised should be common to all Respondents.
Accordingly, it is determined that under the circumstances of this case Respondents will be allowed to join with Respondent The Canadian Express Club to defend against the allegations of the Amended Complaint. Since the Default Order was properly issued, False Representation Order No. 88-20 will remain in effect, but the return portion will be stayed during the pendency of this proceeding. The proceeding is remanded to the Administrative Law Judge for further processing with respect to all Respondents.
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