STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

IN RE: Application of Charlie ) Kolb's Auto City Ltd., Inc. for )

Amended Motor Vehicle Dealer's ) CASE NO. 77-847 License to act as Jaguar Franchised )

Dealer. )

)

FINDINGS OF FACT CONCLUSIONS OF LAW

AND RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, G. Steven Pfeiffer, held a public hearing in this case on August 31, 1977, in Miami, Florida.

The following appearances were entered: Douglas Fairhurst, New York, New York, representing the licensee, Leyland Motor Sales, Inc.; Herman Grayson, Miami Beach, Florida, representing the applicant, Charlie Kolb's Auto City Ltd., Inc.; and Shalle Stephen Fine, Miami, Florida, representing the objector, Orange Motors of Coral Gables, Inc.

Leyland Motor Sales, Inc. ("licensee" hereafter) has entered into a franchise agreement with Charlie Kolb's Auto City Ltd., Inc. ("applicant" hereafter). In accordance with the franchise agreement the applicant would become a dealer of Jaguar automobiles which are distributed by the licensee in the Southeastern United States. The applicant has applied to the State of Florida, Department of Highway Safety and Motor Vehicles, Division of Motor Vehicles, for a license permitting it to market Jaguar automobiles. The application was filed in accordance with the provisions of Chapter 320, Florida Statutes (1975). Two Jaguar dealers in Dade County filed formal protests to the application with the Division of Motor Vehicles. These dealers are Orange Motors of Coral Gables, Inc. ("objector" hereafter), and Autorama, Inc.

Autorama, Inc. subsequently withdrew its protest by letter dated July 28, 1977, and did not appear at the final hearing. The final hearing was originally scheduled by Hearing Officer Michael R.N. McDonnell, to be conducted on July 14, 1977, by notice dated June 9, 1977. Upon motion of licensee, a continuance of the hearing was granted, and the hearing was rescheduled for August 31, 1977, by order entered June 22, 1977. On August 19, the objector filed a motion for continuance which was denied by order entered August 23, 1977.

At the hearing the applicant filed a "Motion to Dismiss Objection to Issuance of an Amended Dealer License and to Grant Issuance Thereof Without Hearing". The motion was denied on the record at the hearing. The licensee called the following witnesses: Gary E. Cooper, the licensee's Southeastern Zone Manager; and Barry F. Butler, the licensee's Dealer Development Manager. The applicant called Charles W. Kolb, the applicant's president, as its only witness. The objector called Frank Petrucci, the objector's vice-president, as its only witness. Licensee's Exhibits 1, 2 and 3, applicant's Exhibits 1 through 10, and opponent's Exhibits 2 through 7 were offered into evidence at the final hearing and were received. Opponent's Exhibit 1 was offered into

evidence and was rejected. The parties have submitted post-hearing memoranda of law.

There were discrepancies in the testimony of some of the witnesses. In resolving these discrepancies, due regard has been given to the credibility of the witnesses as reflected in part by the demeanor of the witnesses at the hearing, and in part by the extent to which the witnesses' testimony was corroborated by other evidence.

FINDINGS OF FACT

1. The licensee is a subsidiary of British Leyland Motors, Inc. British Leyland Motors, Inc. is the United States subsidiary of the British corporation which manufactures Triumph, MG, and Jaguar automobiles. The licensee sells British Leyland products to retail dealers throughout the United States. The licensee's Southeast zone, which distributes British Leyland products in Florida and several other southeastern states is headquartered in Jacksonville.

   
   

2. The applicant is a retail dealer of Triumph and MG automobiles. Its offices are located at 13595 South Dixie Highway, Miami, Florida. Applicant has been a Triumph retail dealer since 1972, and a MG dealer since 1976. Applicant has served in these capacities in accordance with written franchise agreements with the licensee. Through the application it filed with the Division of Motor Vehicles, the applicant, already licensed as a MG and Triumph dealer, is seeking a license to act as a retail dealer of Jaguar automobiles.

   
   

3. The objector is a retail dealer of Triumph, MG, and Jaguar automobiles. Objector contends that no additional Jaguar retail dealers should be authorized for Dade County until the supply of Jaguar automobiles increases.

   
   

4. Prior to 1975, the licensee had five (5) retail dealers located in Dade County. No single dealer sold all three British Leyland products. The applicant sold Triumph automobiles, and the objector sold MG and Jaguar automobiles. Orange Motors of Miami, a dealer which apparently was owned by the same persons who own the objector, sold MG and Jaguar automobiles. Autorama, Inc. sold only Triumph automobiles. Wayne Jones, Inc., a dealer no longer in business, sold only MG automobiles. This arrangement caused substantial problems for the licensee, and in late 1975, the licensee sought to implement a plan to reduce the number of retail dealerships from 5 to 3. The licensee wished to have each of the 3 remaining dealers act as "full line" British Leyland dealers. In other words, each of the 3 dealers would sell Triumph, MG and Jaguar automobiles. The licensee obtained agreement from each of its Dade County dealers for this plan. The applicant arranged to purchase the assets of Wayne Jones, Inc., thereby acquiring the MG line. Autorama, Inc., purchased the assets of Orange Motors of Miami, thus acquiring the MG and Jaguar lines. The objector was given a Triumph franchise agreement to add to its existing MG and Jaguar agreement.

   
   

5. The cooperation of all 5 dealers was obviously required in order to accomplish the licensee's plan. Each of the dealers agreed not to protest efforts by the others to take on all three lines. Thus, when the objector sought a license from the Division of Motor Vehicles to operate as a Triumph dealer, the applicant filed a letter expressing no objection. It was anticipated that the objector would do likewise when the applicant requested a permit to act as a Jaguar dealer. The objector expressed this intention through its agents to agents of the licensee. When the applicant first sought its permit from the Division of Motor Vehicles in December, 1976, the objector

   withheld its letter of no protest, stating that it did not wish the applicant to become a Jaguar dealer until it had completed construction of adequate facilities. After the applicant completed its facilities, the objector nonetheless declined to issue a letter of no protest, and instead filed a letter expressing objection to awarding a Jaguar franchise to the applicant.

   
   

6. In anticipation of receiving a Jaguar franchise agreement, the applicant has expended over $600,000.00 in constructing sales and service facilities. The applicant has constructed the largest indoor automobile show room in Dade County, and the largest service facility south of New York City. The applicant's facility is clearly adequate to handle the full line of British Leyland products, including Jaguar automobiles.

   
   

7. Autorama, Inc. is located within the city of Miami, and serves generally a Northern Dade County trading area. The objector is located in the city of Coral Gables, and generally services the central portion of Dade County. While there are numerous exceptions, each dealer generally sells Jaguar automobiles to customers who reside nearer to it than to other dealers. The applicant is located approximately 8 miles south of the opponent, and approximately 13 miles south of Autorama. Neither the opponent, nor Autorama have made significant sales of Jaguar automobiles in the areas of Southern Dade County. The population of the Southern portion of Dade County is growing rapidly, and many persons with the financial means to purchase Jaguar automobiles reside in that area. The licensee is not achieving the sales of Jaguar automobiles in Southern Dade County that it could achieve with a dealer located in that area. The applicant could serve to achieve that market penetration. Most of the sales of Jaguar automobiles made by the opponent and by Autorama, have been made in the areas adjacent to their dealerships. Neither of these dealers have achieved many sales in the areas near to the applicant's location.

   
   

8. The opponent has indicated that if it could receive from the licensee the number of Jaguar automobiles which it desires, it would not object to the applicant being named a Jaguar dealer. The opponent has contended that for the past year it has not received the volume of Jaguar automobiles from the licensee which it has requested, or which the licensee has promised it. The problem that the objector is experiencing is apparently nationwide, or at least Southeast region-wide in scope. The general shortage in availability of Jaguar automobiles has resulted from production problems in England, and is being felt by all Jaguar dealers in the Southeastern region. It is not merely the objector which has had a shortage of Jaguar automobiles in recent months, and it does not appear that the licensee has been prejudicial in delivering automobiles to the objector. It is the licensee's hope that the shortages will be of short duration. It is apparent that within a year prior to the hearing the objector actually turned back Jaguars that were delivered to it by the licensee because they were not the models or the colors which the objector could easily sell.

   
   

9. No evidence was presented to show when the present shortage situation might end. Adding the applicant as a Jaguar dealer in Dade County will not appreciably reduce the number of Jaguar automobiles delivered to the objector or other dealers. The applicant's quota of automobiles would be taken from the total number of vehicles available in the Southeastern United States. It appears that granting the applicant a Jaguar franchise would result in the objector having approximately one Jaguar less to sell every two years.

10. No evidence was presented which would indicate that either of the present Jaguar dealers in Dade County have violated any provisions of the licensee's franchise agreement, and the licensee did not contend such.

    
    

    CONCLUSIONS OF LAW

    
    

11. The Division of Administrative Hearings has jurisdiction over the subject matter of this action, and over the parties. Chapters 120.57(1), 120.60, Florida Statutes (1976 Supp.). Section 320.642, Florida Statutes (1975), provides as follows:

    
    

    The department [Department of Highway Safety and Motor Vehicles] shall deny an application for a motor vehicle dealer license in any community or territory when the licensee's presently licensed franchised motor vehicle dealer or dealers have complied with licensee's agreements and are providing adequate representation in the community or territory for such licensee. The burden of proof in showing inadequate representation shall be on the licensee.

    
    

    The licensee has established that its presently licensed franchised dealers of Jaguar automobiles in Dade County do not provide adequate representation in the Southern portion of Dade County. This is not the result of any failing on the part of the presently licensed dealers, but is because they are not located in the Southern part of Dade County.

    
    

12. In view of the fact that the licensee is not presently receiving adequate penetration in the Southern portion of Dade County, and the fact that the objector formerly agreed to not protest the applicant's efforts to become a Jaguar dealer, which resulted in the applicant expending very large sums of money to prepare itself to become a Jaguar dealer, it would be unreasonable to deny the application for amended motor vehicle dealer license in this case.

    
    

13. The fact that the objector would like to obtain more Jaguar automobiles to sell has no bearing on the issues in this case. Even if the objector obtained all the automobiles it wished, and was able to sell them, the licensee would still, according to the evidence, not have adequate market penetration in Southern Dade County.

RECOMMENDED ORDER

Based upon the foregoing findings of fact and conclusions of law, it is, RECOMMENDED:

That a final order be entered granting the application of Charlie Kolb's Auto City Ltd., Inc., for amended motor vehicle dealer's license to act as a Jaguar franchise dealer.

RECOMMENDED this 14th day of December, 1977, in Tallahassee, Florida.

G. STEVEN PFEIFFER Hearing Officer

Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304

(904) 488-9675

COPIES FURNISHED:

Herman Grayson, Esquire 1000 Lincoln Road

Miami Beach, Florida 33139

Douglas Fairhurst, Esquire

220 East 42nd Street New York, N. Y.

Shalle Fine, Esquire

1237 City National Bank Building Miami, Florida

Docket for Case No: 77-000847

Orders for Case No: 77-000847