Fullerton Municipal Code Ch. 3.40 Advance Payment for Goods, Services, Labor and Materials

(A) Except as otherwise provided in § 3.40.130 of this chapter, no person shall accept any payment for any merchandise in advance of the delivery thereof or for the performance of any service in advance of such performance or for the furnishing of any labor and materials in advance of the furnishing thereof, without having on his or her person or exposed to view of the public in the place where such payment is received at the time of the receipt thereof, a permit to receive such advance payment which has been issued to such person, or his or her employer, by the Chief of Police as authorized by this chapter and not revoked, or without exhibiting such permit to any police officer or person upon his or her request. The purpose of this chapter is to protect the public welfare by protecting persons purchasing merchandise or contracting to obtain the performance of services or the furnishing of labor and materials from suffering substantial loss as the result of the payment for merchandise which is never delivered or for the performance of services which are never performed or for the furnishing of labor and materials which are never furnished and from suffering substantial loss from the receipt of merchandise which substantially fails to correspond in quality or quantity from that upon which a substantial payment was made in advance of delivery and from the performance of services and the furnishing of labor and materials which substantially fail to correspond in quality or quantity to those promised when any substantial advance payment thereon was made and for the purpose of discouraging theft, misrepresentation and unfulfilled promises in such transactions and to provide a practical remedy for relief therefrom.

(B) This chapter shall apply only to payments made in the city to a person there and then present.

(Ord. 1845, passed - -1972)

For the purpose of this chapter, the following definitions shall apply unless the context clearly indicates or requires a different meaning.

MERCHANDISE. Any individual item of personal property, also any collection of items of personal property offered for sale at the same time, for which the total price then asked for each or all of such articles sold to any one person is $40 or more, except any article of personal property, the selling of which is regulated by any law of the state, or is sold for resale, or is sold by any governmental agency.

SERVICE. Any labor performed, with or without materials, equipment or tools upon any real or personal property or upon any person and includes any teaching or instruction, except any service the performance of which is regulated by any law of the state and except any service performed or instruction given by any governmental agency.

(Ord. 1845, passed - -1972)

To obtain such permit, an application therefor shall be filed in duplicate with the Chief of Police upon a form provided by him or her. Such application shall be accepted only upon a showing that $100 for each initial permit applied for pursuant to the provisions of this chapter, and a fee of $25 for each annual renewal thereof has been paid to the City Treasurer as a fee to cover the cost of investigating such applicant. A copy of such application shall be promptly sent by the Chief of Police to the Business Registration Division of the city. Such application shall be executed as a declaration of the applicant under the penalty of perjury.

(Ord. 1845, passed - -1972; Ord. 2411, passed - -1982)

The Chief of Police shall promptly cause to be made such investigation of the applicant as he or she deems necessary and shall determine whether the applicant is a person of good moral character or has any propensity toward theft, embezzlement, falsification or misrepresentation and whether the applicant has the ability to hold harmless any person from any loss, including attorneys’ fees and court costs resulting from the payment of any money to the applicant upon the sale of any merchandise in advance of the delivery thereof or upon any contract for services in advance of the performance thereof or upon any contract for the furnishing of labor and materials in advance of the furnishing thereof and whether the applicant is, or will be for at least one year thereafter, available for the service of process in any action or by any person paying any such money and for contact by law enforcement officers.

(Ord. 1845, passed - -1972)

Applicants for a permit under this chapter shall give in writing the following information:

(A) Name and description of the applicant;

(B) Addresses and telephone numbers of his or her residence and business for the past five years;

(C) A brief description of all items, services and work to be offered and the time when the delivery or performance thereof will be offered and whether any money will be obtained before the full and complete delivery or performance thereof and if so the amount thereof and the nature of all business intended to be transacted pursuant to such service and all activities which such permit is requested to authorize;

(D) If employed, the name and address of the employer together with written evidence of the exact relationship;

(E) The applicant shall file with his or her application two photographs taken within 60 days immediately prior to the date of the filing of the application; said pictures shall be two inches by two inches showing the head and shoulders of the applicant in a clear and distinguishing manner;

(F) He or she shall also provide in his or her application a list and detailed description of all of his or her assets and a statement of the amount of any encumbrance against any thereof, together with the location thereof and his or her opinion of the value thereof;

(G) The applicant shall submit to being fingerprinted by the Police Department and shall furnish the names of at least two property owners of the county, who will certify that the applicant is of good moral character and business responsibility, or in lieu of such names, any other available evidence showing the good moral character and business responsibility of the applicant; and

(H) A statement as to whether or not, other than for traffic violations, the applicant has ever been arrested, or found guilty of, or plead guilty or nolo contendere to, violating any law, and if so, a statement as to each event, stating when and where it occurred and the nature of the offense involved and the punishment or penalty assessed therefor or other disposition of such charge.

(Ord. 1845, passed - -1972)

No such permit shall be issued to any person who, according to his or her application or the investigation made pursuant to this chapter, is deemed by the Chief of Police reasonably probable to have any propensity toward theft, embezzlement, falsification or misrepresentation or to be a person who is not law abiding or of good moral character or a person who is not then, and for one year thereafter reasonably probable to be, available to be contacted by law officers and by process servers for the service of process in any action brought by any person paying money to such applicant upon any transaction described in this chapter or is reasonably probable to receive advance payments described in this chapter which will total, as to all items of merchandise not delivered, services not performed and labor and materials not furnished, an amount in excess of one-half of the net worth of the applicant over and above all liabilities and exempt property; provided however that the applicant may remove the objection to his or her not being available for the service of process, by executing and filing with the Chief of Police a written authorization designating him or her as the agent of the applicant to accept the personal service of process in any civil action involving the return of the advance payment made to the applicant upon any transaction described in this chapter and provided further that the applicant may remove the objection to his or her inadequate net worth, and may be excused from submitting a statement of his or her assets and liabilities under this chapter, by filing with the Chief of Police a surety bond, or other security approved by the City Attorney to ensure the return of any advance payment by the applicant upon any transaction described in this chapter, to which sum the applicant may not be entitled, together with court costs and reasonable attorneys’ fees in any action to recover such advance payment. A permit to accept such advance payment good for a period of one year shall be issued by the Chief of Police to each applicant therefor who complies with the provisions of this chapter and is not herein prohibited from having such a permit. Such permit shall specify the activity which it authorizes and the amount or percentage of advance payment authorized thereby. No person shall accept any advance payment upon any transaction described in this chapter except as authorized by such permit. A person who gives false information in his or her application shall not be deemed to be a person of good moral character unless the Chief of Police determines such falsification to have been the result of inadvertence, excusable neglect, a lack of understanding or that it does not impair the good moral character of the applicant.

(Ord. 1845, passed - -1972)

No permit authorized by this chapter shall be transferable to, or used by, a person not named in the permit as the person to whom it was issued.

(Ord. 1845, passed - -1972)

The Chief of Police shall revoke any permit granted under the provisions of this chapter whenever he or she determines that there is a reasonable probability that the permittee has any of the propensities described in § 3.40.060 or has committed any act therein described, or is not a law abiding person or of good moral character.

(Ord. 1845, passed - -1972)

(A) Upon any permit required by this chapter being refused or revoked by the Chief of Police, the applicant or permittee may, within 15 days after notice thereof has been sent by certified mail, addressed to him or her at his or her address shown on his or her application, or otherwise on file with the Chief of Police, file a written request, containing his or her address, with the City Manager for a hearing by him or her to review such action. He or she shall set such hearing within 30 days from his or her receipt of any such request and send by certified mail addressed to the person making such request at the address shown therein, a notice of the time and place of such hearing at least 15 days in advance thereof.

(B) Within 30 days after the date set for such hearing, the City Manager shall make his or her decision which shall be final and not subject to appeal to the Council and shall exhaust the administrative remedy of the applicant or permittee for any such refusal or revocation of such permit. If such decision is that the issuance of such permit to the applicant is not prohibited by § 3.40.060 of this chapter, but is thereby required to be issued, the City Manager shall direct the Chief of Police to issue or reinstate such permit and he or she shall do so forthwith. If such decision is that the issuance of such permit to the applicant is prohibited by § 3.40.060 of this chapter, the City Manager shall affirm the denial or revocation of such permit. A copy of any decision by the City Manager hereunder shall be sent by him or her by certified mail addressed to the person who requested such review at the address shown therein.

(Ord. 1845, passed - -1972)

No person may apply for any permit authorized by this chapter within one year from any denial of any such permit to such person or from the revocation of any such permit issued to such person, unless the cause of the denial or revocation has been to the satisfaction of the Chief of Police or City Manager removed within such time.

(Ord. 1845, passed - -1972)

Each person to whom a permit has been issued under this chapter shall immediately surrender his or her permit to the Chief of Police upon its revocation.

(Ord. 1845, passed - -1972)

(A) It shall be the duty of any police officer of the city to require any person he or she sees receiving any advance payment upon any transaction described in this chapter, in the city, who is not known by such officer, to have such permit or to be exempt from the provisions of this chapter, to exhibit to such officer a valid permit required by this chapter or proof of such exemption.

(B) Any police officer shall arrest and charge with a violation of § 3.40.010 of this code any person who accepts an advance payment upon any transaction described in this chapter, in the city in the presence of such officer without having, or exhibiting to such officer upon his or her request therefor, a permit issued pursuant to this chapter and which has not been revoked, authorizing such person to accept such advance payment in the city, or proof of exemption therefrom.

(C) If an investigation by a police officer of the city shall disclose that a person has accepted an advance payment upon any transaction described in this chapter, in the city, not in the presence of such officer, without a permit for him or her to do so as required by this chapter, such police officer shall proceed by a criminal complaint to charge such person with such violation and carry such charge to a final disposition by the court.

(D) All arrests under this chapter shall be made pursuant to Cal. Penal Code Part 2, Title 3, Chapter 5 (commencing with § 833) so that the person arrested shall be eligible for release as provided by said code, and if released upon a citation, as authorized by Cal. Penal Code § 853.6, the arresting officer shall comply with Cal. Penal Code §§ 853.6 and 853.8, so that the person arrested shall be subject to the provisions thereof and of Cal. Penal Code § 853.7.

(Ord. 1845, passed - -1972)

(A) No permit under this chapter shall be required by any person whose occupation is regulated or to pursue which occupation a permit is required by any law of the state or to accept any advance payment of $20 or less upon any transaction described in this chapter or by any person who has assets subject to execution under the laws of the state or of the state in which such assets are located of a total fair market value over and above all exemptions and liabilities of such person in an amount equal to or more than $5,000 free and clear from encumbrances. Nor shall this chapter apply to any person if he or she is, and will be for at least one year thereafter, available for contact by law enforcement officers and for the service of process in the state or irrevocably nominates a person upon which process may be served within the state within one year after the receipt of any advance payment referred to in this chapter and delivers to the person from whom such advance payment is received the name of the person receiving such payment and the place where he or she will be available to be contacted by law enforcement officers and the place where he or she will be available to be served with process or the name of the person so appointed by him or her upon whom such process may be served, together with the place where such person will be available for such service.

(B) An employee of any person complying with, or exempt from, the provisions of this chapter shall also be exempt from its provisions while acting as such employee in the course of his or her employment, if at the time of receiving any advance payment described in this chapter such employee has upon his or her person and exhibits to any police officer or other person upon request therefor a statement by such employer identifying the employee and containing a recent picture two inches by two inches showing the head and shoulders of the employee in a clear and distinguishing manner, and delivers to the person making such payment at the time thereof a statement containing a promise of the employer to return any such advance payment and to pay all court costs and attorneys’ fees incurred in obtaining the return thereof in the event the merchandise, service or labor and material involved in the transaction upon which such advance payment is made, is not delivered, performed or provided within 30 days after the time promised therefor when such advance payment is made or if the same is not of the quality or quantity so promised.

(Ord. 1845, passed - -1972)

If any word, phrase, clause, sentence or of this chapter is for any reason invalid, such invalidity shall not impair the validity of any other part of this chapter and the Council declares that it would have enacted each and every part of this chapter without any such invalid or any other part thereof.

(Ord. 1845, passed - -1972)