173 DOS 97

------------------------------------------------X

DIVISION OF LICENSING SERVICES,

Complainant,

Respondent.

------------------------------------------------X

1. To insure the safety, welfare, and health of persons who patronize appearance enhancement businesses, General Business Law, Article 27, was enacted and 19 New York Codes, Rules and Regulations, Part 160, was adopted.

2. Provisions of General Business Law: (1) forbid the operation of an unlicensed appearance enhancement business (§401); (2) require a licensed appearance enhancement business (a) to operate at the location named in the license and in accordance with licensing rules and regulations adopted under General Business Law, §404, and (b) to maintain evidence of bond or liability insurance during the licensure term; (3) condition the legality of a transfer or assignment of an appearance enhancement business license on compliance with provisions stated in General Business Law, §§408(3) and 408(4); permit a purchaser of an appearance enhancement business to continue to use the license of the seller for thirty days from the date of the sale (a) if there is endorsed on the face of the license the name of the purchaser, the date of the sale, and the signatures of the seller and the purchaser, and (b) if within five working days from the date of the sale, the purchaser submits an application for an appearance enhancement business license (§408[3]); (4) subject to the monetary fines any licensee who fails to file any change in the status of a license where a change is required to be filed (§408[10]); and (5) define a licensee as a person licensed to operate an appearance enhancement business (§400[3]).

3. The regulations, 19 New York Codes, Rules and Regulations, Part 160: (1) impose on the owner of a licensed appearance enhancement business responsibility for the lawful operation of the business (§160.11); (2) demand that an owner of an appearance enhancement business maintain a surety bond in the amount of $50,000, accidental and professional liability insurance policies, each in the minimum amount of $25,000 per occurrence and $75,000 in the aggregate, or a general liability policy in such amounts and keeps in the appearance enhancement business premises evidence that the required insurance or bond is maintained (§160.9); (3) define an owner as a person who owns, controls or operates an appearance enhancement business (§160.1[d]), and a licensee as a person licensed to operate an appearance enhancement business (§160.1[c]).

4. Neither the statute (General Business Law, Article 27) nor the regulations (19 New York Codes, Rules and Regulations, Part 160) forbid, restrict or require a seller to notify the Division of Licensing Services of the sale of an appearance enhancement business.

5. The sale of an appearance enhancement business is not a change in the status of the seller's business license.

6. The failure of a seller to notify the Division of Licensing Services of the sale of an appearance enhancement business results in the seller being recorded in the agency's records as the licensee (§400[3]; 19 New York Codes, Rules and Regulations, §160.1[c]).

7. After the sale of an appearance enhancement business, the seller does not own, control or operate that business (§160.1[c]); and the responsibilities imposed by statute and by regulation on an owner are not applicable to the seller (§160.11).

173 DOS 97

------------------------------------------------X

DIVISION OF LICENSING SERVICES,

Complainant,

JOHN NGUYEN,
Owner, Nails at Last
Appearance Enhancement Business,

Respondent.

------------------------------------------------X

The respondent, Mr. John Nguyen, 646 East 233rd Street, Bronx, NY 10466, represented himself at the hearing.

The complainant, the Division of Licensing Services, was represented by Scott NeJame, Esq., Litigation Counsel, 84 Holland Avenue, Albany, NY 12208.

Under the provisions of General Business Law, Article 27, State Administrative Procedure Act, Article 3, and 19 New York Codes, Rules and Regulations, Part 400, the State charges that the respondent violated the provisions of 19 New York Codes, Rules and Regulations, §160.9. The complaint alleges that the respondent, licensed to conduct two appearance enhancement businesses, failed to maintain on the premises of those appearance enhancement businesses evidence of insurance or of a surety bond.

Under 19 New York Codes, Rules and Regulations, §400.3, and Civil Practice Law and Rules, §3025, the tribunal granted the State's prehearing motion, unopposed by the respondent, to amend the complaint to add a third appearance enhancement business to the allegations that the respondent violated 19 New York Codes, Rules and Regulations, §160.9.

Evidence admitted included the following:

I. EXHIBITS.

A. The pleadings that consist of notice of hearing and complaint.

B. Computer reports dated March 18, 1997 which state that John Nguyen is licensed to conduct appearance enhancement businesses, Nails at Last, at 646 East 233rd Street, and at 1623 Castle Hill Avenue, Bronx, NY 10466, for the term September 1, 1995 through September 1, 1997, and at 95 West Fordham Road, Bronx, NY 10468, for the term May 31, 1996 through May 31, 1998.

C. Inspection reports dated February 22 and September 5, 1996 which state that inspections of Nails at Last, 646 East 233rd Street, Bronx, NY 10466, occurred on those dates by a license investigator of the Division of Licensing Services who found that the premises housed an uninsured appearance enhancement business, a violation of 19 New York Codes, Rules and Regulations, §160.9.

D. Inspection reports dated March 26 and September 26, 1996 which state that inspections of Nails at Last, 1623 Castle Hill Avenue, Bronx, NY 10466, occurred on those dates by a license investigator of the Division of Licensing Services who found that the premises housed an uninsured appearance enhancement business, a violation of 19 New York Codes, Rules and Regulations, §160.9.

II. OFFICIAL NOTICE. Official notice was taken of the records of the Division of Licensing Services which disclose that Mr. John Nguyen is licensed to conduct an appearance enhancement business, Nails at Last, 646 East 233rd Street, and 1623 Castle Hill Avenue, Bronx, NY 10466, for the term September 1, 1995 through September 1, 1997, and at 95 West Fordham Road, Bronx, NY 10468, for the term May 31, 1996 through May 31, 1996 through May 31, 1998.

III. WITNESSES. Two investigators of the Division of Licensing Services, Ms. Ernita Gannt, Senior License Investigator, and Mr. Ernest Delaney, License Investigator, appeared as witnesses for the State. Essentially, the investigators stated that when the licensed appearance enhancement businesses, Nails at Last, 1623 Castle Hill Avenue and 646 East 233rd Street, Bronx, were inspected, the business owner failed to present evidence of either insurance or bond as required by law.

Mr. John Nguyen testified as follows: The appearance enhancement businesses located at 1623 Castle Hill Road and 646 East 233rd Street, Bronx, New York, were first insured as of April 25, 1996. In June 1996, he sold the appearance enhancement business located at 646 East 233rd Street, Bronx. The insurance policy that covered the premises 646 East 233rd Street, Bronx, was transferred to cover the business located at 95 West Fordham Road, Bronx, first licensed as an appearance enhancement business on May 31, 1996.

By the substantial evidence, I find the following facts:

Mr. John Nguyen is licensed to conduct appearance enhancement businesses, Nails at Last, 646 East 233rd Street, and 1623 Castle Hill Avenue, Bronx, NY 10466, for the term September 1, 1995 through September 1, 1997, and at 95 West Fordham Road, Bronx, NY 10468, for the term May 31, 1996 through May 31, 1998.

On February 22 and September 5, 1996, investigators of the Division of Licensing Services inspected the appearance enhancement business, Nails at Last, 646 East 233rd Street, Bronx, NY 10466. At the time of the inspections, the investigators determined that there was not any evidence on the premises that the required amount of insurance or bond was maintained by the business owner and issued notices of violation.

On March 26 and September 26, 1996, investigators of the Division of Licensing Services inspected the appearance enhancement business, Nails at Last, 1623 Castle Hill Avenue, Bronx, NY 10468. At the time of the inspections, the investigators determined that there was not any evidence on the premises that the required amount of insurance or bond was maintained by the business owner and issued notices of violation.

On February 26 and March 26, 1996, the two appearance enhancement businesses, Nails at Last, 646 East 233rd Street, and Nails at Last, 1623 Castle Hill Avenue, Bronx, NY, were uninsured. Those businesses were first insured on April 25, 1996 by Mr. Nguyen.

Mr. Nguyen sold the business, Nails at Last, 646 East 233rd Street, Bronx, New York, in June 1996 and transferred the insurance from that business to Nails at Last, 95 West Fordham Road, Bronx, New York, licensed as of May 31, 1996. For a duration of time, from May 31, 1996 until sometime in June 1996, insurance or bond was not maintained on the appearance enhancement business, Nails at Last, 95 West Fordham Road, Bronx. But the evidence fails to reveal whether appearance enhancement services were conducted in that facility during that duration of time.

On September 26, 1996, an appearance enhancement business, Nails at Last, was operating at 646 East 233rd Street, Bronx, without the required insurance or bond being maintained on the business. Then and currently, the records of the Division of Licensing Services record Mr. John Nguyen as the person licensed to operate that business.

To insure the safety, welfare, and health of persons who patronize appearance enhancement businesses, General Business Law, Article 27, was enacted and 19 New York Codes, Rules and Regulations, Part 160, was adopted.

Provisions of General Business Law: (1) forbid the operation of an unlicensed appearance enhancement business (§401); (2) require a licensed appearance enhancement business (a) to operate at the location named in the license and in accordance with licensing rules and regulations adopted under General Business Law, §404, and (b) to maintain evidence of bond or liability insurance during the licensure term; (3) condition the legality of a transfer or assignment of an appearance enhancement business license on compliance with provisions stated in General Business Law, §§408(3) and 408(4); permit a purchaser of an appearance enhancement business to continue to use the license of the seller for thirty days from the date of the sale (a) if there is endorsed on the face of the license the name of the purchaser, the date of the sale, and the signatures of the seller and the purchaser, and (b) if within five working days from the date of the sale, the purchaser submits an application for an appearance enhancement business license (§408[3]); (4) subject to the monetary fines any licensee who fails to file any change in the status of a license where a change is required to be filed (§408[10]); and (5) define a licensee as a person licensed to operate an appearance enhancement business (§400[3]).

The regulations, 19 New York Codes, Rules and Regulations, Part 160: (1) impose on the owner of a licensed appearance enhancement business responsibility for the lawful operation of the business (§160.11); (2) demand that an owner of an appearance enhancement business maintain a surety bond in the amount of $50,000, accidental and professional liability insurance policies, each in the minimum amount of $25,000 per occurrence and $75,000 in the aggregate, or a general liability policy in such amounts and keeps in the appearance enhancement business premises evidence that the required insurance or bond is maintained (§160.9); (3) define an owner as a person who owns, controls or operates an appearance enhancement business (§160.1[d]), and a licensee as a person licensed to operate an appearance enhancement business (§160.1[c]).

Neither the statute nor the regulations forbid, restrict or require a seller to notify the Division of Licensing Services of the sale of an appearance enhancement business. The sale of an appearance enhancement business is not a change in the status of the seller's business license. The failure of a seller to notify the Division of Licensing Services of the sale of an appearance enhancement business results in the seller being recorded in the agency's records as the licensee (§400[3]; 19 New York Codes, Rules and Regulations, §160.1[c]). After the sale of an appearance enhancement business, the seller does not own, control or operate that business (§160.1[c]); and the responsibilities imposed by statute and by regulation on an owner are not applicable to the seller (§160.11).

The respondent owned and operated two uninsured appearance enhancement businesses, Nails at Last, 646 East 233rd Street and 1623 Castle Hill Avenue, Bronx, New York, until he obtained insurance for those businesses on April 25, 1996.

Sometime in June 1995 when Nails at Last, 646 East 233rd Street, Bronx, was sold, Mr. Nguyen ceased being the owner of the appearance enhancement business. Yet, he has continued to be licensed to operate the appearance enhancement business that he does not own, control or operate and, therefore, is not required to insure.

The evidence fails to establish that the respondent operated an uninsured appearance enhancement business, Nails at Last, 95 West Fordham Road, Bronx, in the duration of time from May 31, 1996 to sometime in June 1996.

Based on the foregoing findings of fact and opinion and as a matter of law, I conclude:

The respondent, Mr. John Nguyen, operated two uninsured licensed appearance enhancement businesses prior to April 25, 1996, in violation of the provisions of 19 New York Codes, Rules and Regulations, §160.9.

The respondent, Mr. John Nguyen, the recorded licensee of an appearance enhancement business, Nails at Last, 646 East 233rd Street, Bronx, New York, does not own, operate, control or insure that business.

Based on the foregoing findings of fact, opinion, and conclusions of law and under the provisions of General Business Law, §410:

I ORDER that the license issued to John Nguyen to operate the appearance enhancement business, Nails at Last, 646 East 233rd Street, Bronx, New York, is revoked, effective immediately.

I FURTHER ORDER the respondent to pay a fine of one thousand hundred ($1000) dollars to the Division of Licensing Services on or by August 31, 1997.

I FURTHER ORDER that if the fine is not timely paid, the appearance enhancement business licenses issued to the respondent, John Nguyen, for the appearance enhancement businesses, Nails at Last, located at 1623 Castle Hill Avenue, and 95 West Fordham Road, Bronx, New York, shall be suspended for a three-month duration of time, beginning September 1, 1997 and ending November 30, 1997.

I FURTHER ORDER the respondent, John Nguyen, to send immediately the fine imposed and the appearance enhancement business license, Nails at Last, 646 East 233rd Street, Bronx, New York, to Ms. Diane Ramundo, Customer Service Unit, Department of State, Division of Licensing Services, 84 Holland Avenue, Albany, NY 12208.

SO ORDERED: June 17, 1997.