SC Administrative Law Court Decisions

3. The Respondent NCHW, LLC, is a limited liability company organized under the laws of the state of South Carolina, and at the times concerned herein offered physical fitness services as defined in S.C. Code Ann. § 44-79-20(5), to consumers at 5101 Ashley Phosphate Road, N. Charleston, Charleston County, South Carolina.

4. Upon information and belief, the Respondent Omar Aguilar (Aguilar) is the principle member of Respondent NCHW, LLC doing business as LifeQuest.

5. Upon information and belief, Respondent Sebold sold, licensed, or relinquished ownership of the Ashley Phosphate location of LifeQuest to Respondents Aguilar and NCHW, LLC, in August 2004.

6. Upon information and belief, Respondent Sebold may also have re-taken control of the Ashley Phosphate location of LifeQuest at some unknown time in 2005 from Respondent Aguilar and continues to operate this location which has some1100 members;

7. Respondents Aguilar and NCHW, LLC have not filed for a Certificate of Authority at the Ashley Phosphate LifeQuest or otherwise responded to letters from the Department regarding expiration of their Certificate and canceling of the bond, in violation of § 44-79-80 of the Act.

8. Respondents Aguilar and NCHW, LLC, maintained special deposit bond #40070744 issued by Platte River Insurance Company in the amount of $25,000.00, to secure their financial responsibility for the Ashley Phosphate Rd. location of LifeQuest, pursuant to S.C. Code Ann. §44-79-80(1).

9. Petitioner received notice February 6, 2006, that Respondents Aguilar and NCHW, LLC, bond #40070744 would be canceled effective forty-five days from the date of notice.

10. Upon information and belief, the Respondents have engaged in false, fraudulent, or deceptive conduct by selling or continuing to sell pre-paid and monthly installment memberships at or near the closure of their facilities, with full knowledge that their respective businesses were in financial peril and/or in imminent danger of closing. Respondents deny this allegation and no admission to this allegation is made herein.

11. The special deposit bonds submitted on behalf of the Respondents and made payable to the Administrator is to reimburse those consumers who may have a claim against Respondents for violations of the Act.

I find that:

(1) Petitioner is an administrative agency of the State of South Carolina as defined in

§1-23-310(1) of the Administrative Procedures Act and is responsible for administering and enforcing the South Carolina Physical Fitness Act. (The Act) (S.C. Code Ann. §44-79-10 et seq.).

(2) The Respondent NCHW, LLC, is a limited liability company organized under the laws of the state of South Carolina, and at the times concerned herein offered physical fitness services as defined in S.C. Code Ann. § 44-79-20(5), to consumers at 5101 Ashley Phosphate Road, N. Charleston, Charleston County, South Carolina.

(3) The Respondent Omar Aguilar (Aguilar) is the principle member of Respondent NCHW, LLC doing business as LifeQuest.

(4) Respondent Sebold sold, licensed, or relinquished ownership of the Ashley Phosphate location of LifeQuest to Respondents Aguilar and NCHW, LLC, in August 2004. Respondents Aguilar and NCHW, LLC properly maintained Certificates of Authority for 2004 and 2005.(Petitioner’s Exhibit D-II).

(5) Respondents Aquilar and NCHW, LLC did not file for a 2006 Certificate of Authority for the Ashley Phosphate location of LifeQuest or otherwise respond to letters from the Department regarding expiration of their Certificate and canceling of the bond before March 2006. Respondents Aquilar and NCHW, however, notified the bonding company by letter of January 30, 2006, that the business had been sold and to cancel bond #40070744.(Respondent’s Exhibit E).

(6) Respondent Sebold re-took control of the Ashley Phosphate location of LifeQuest in February 2006, from Respondent Aguilar and continued to operate this location.(Respondent’s Exhibit A). The Ashley Phosphate location of LifeQuest closed sometime in March or April 2006, with approximately 800 members.

(7) Respondents Aguilar and NCHW, LLC, maintained special deposit bond #40070744 issued by Platte River Insurance Company in the amount of $25,000.00, to secure their financial responsibility for the Ashley Phosphate Rd. location of LifeQuest, pursuant to S.C. Code Ann. §44-79-80(1).

(8) Petitioner received notice February 6, 2006, that Respondents Aguilar and LCHW, LLC, bond #40070744 would be canceled effective forty-five days from the date of notice or March 24, 2006. (Petitioner’s Exhibit D-I).

(9) There are, or may be, consumer complaints for un-refunded monies on prepaid contracts with the Ashley Phosphate Road location of LifeQuest. (Petitioner’s Exhibit K).

(10) This Consent Order is binding on, and relates only to settlement by and between the named Respondents NCHW, LLC, Omar Aguilar, Dawn Aguilar, the other member of NCHW, LLC, and the Petitioner.

THEREFORE, based upon the above, Petitioner and Respondents NCHW, LLC, and Aguilar through their respective attorneys, have consented and agreed to the following terms as a full and final resolution of this matter as to these parties.

Respondents NCHW, LLC, and Aguilar will:

(a) Agree to assessment in full of their special deposit bond #40070744 issued by Platte River Insurance Company in the amount of $25,000.00, to secure their financial responsibility for the Ashley Phosphate Rd. location of LifeQuest, pursuant to S.C. Code Ann. §44-79-80(1);

(b) Allow Petitioner to hold such monies from special deposit bond #40070744 issued by Platte River Insurance Company in the amount of $25,000.00, for the statutory period until Petitioner can determine all consumers who may have been affected during the term of bond #40070744;

(c) Require Respondents NCHW, LLC, and Aguilar, their agents or assigns to provide copies of all membership contracts that may be in their possession from the 5101 Ashley Phosphate Road, N. Charleston location of LifeQuest;

(d) Pay an administrative fine of four-hundred ($400.00) dollars for violations of the Act, pursuant to S.C. Code Ann. §44-79-80(9);

(e) Cease and Desist offering physical fitness services, pursuant to S.C. Code Ann. §44-79-80(8); and

(f) Be restrained from violating the Physical Fitness Act.

WHEREFORE, IT IS ORDERED that:

A. Respondents NCHW, LLC, and Aguilar will comply with all provisions of this Consent Order, as set out in paragraphs (a), (b), (c), (d), (e) & (f), above, immediately upon the signing of this document by both parties; and

B. Special deposit bond #40070744 issued by Platte River Insurance Company in the amount of $25,000.00, and made payable to the Administrator for those affected members of the public who have causes of action against Respondents for violation of S.C. Code Ann. §§44-79-10 et seq. be assessed in full, and such monies held by Petitioner for the statutory period until Petitioner can determine all consumers who may have been affected during the term of bond #40070744.

AND IT IS SO ORDERED

______________________________

CAROLYN C. MATTHEWS

Administrative Law Judge

November 1, 2006

Columbia, South Carolina

We Consent:

____________________________ __________________________

Helen Fennell Brian J. Payne, Esq.

Attorney for Petitioner SCDCA Small Business Firm of Payne & Associates, LLC

P.O. Box 5757 1522 Lady Street

Columbia, S.C. 29250 Columbia, SC 29201

(803) 734-4241 (803) 799-4567

For Respondents NCHW, LLC, and Aguilar

Columbia, South Carolina Columbia, South Carolina

________________, 2006 __________________, 2006

__________________________

Omar Aguilar for NCHW, LLC

__________________, 2006