STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

FIRST BANK OF HOLLYWOOD BEACH ) and OFFICE OF THE COMPTROLLER, )

)

Petitioner, )

)

vs. ) CASE NO. 80-1581

) AMERICAN BANK OF HOLLYWOOD, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, this cause came on for hearing before Linda M. Rigot, the assigned Hearing Officer of the Division of Administrative Hearings, on January 2, 1981, in Fort Lauderdale, Florida.

APPEARANCES

For Petitioner Leonard L. Levenstein, Esquire (First Bank): Coral Gables, Florida

For Petitioner Walter L. Wood, Esquire (Comptroller): Tallahassee, Florida

For Respondent: Robert B. Butler, Esquire

Hollywood, Florida

At the inception of the hearing, the undersigned sua sponte amended the style of the case so that the style now is as reflected above.

Petitioner First Bank requested approval of the Department to amend its charter by changing its name to First American Bank of Broward County.

Thereafter, Respondent American Bank objected to approval of the requested name change and requested a public hearing on the name change. Accordingly, the issue for determination is whether First Bank's request for change of name should be approved.

First Bank presented the testimony of David Starke and Roy W. Talmo.

Respondent American Bank presented the testimony of David L. Cory. A copy of the Pre-Hearing Stipulation filed by the parties was admitted into evidence as Hearing Officer's Exhibit 1,and Petitioner First Bank's Exhibit 1 and Composite Exhibit 2 were received into evidence.

First Bank and American Bank have submitted proposed recommended orders.

To the extent that any of their proposed findings of fact have not been adopted in this Recommended Order, they have been rejected as not having been supported by the evidence, as having been irrelevant to the issue under consideration herein, or as constituting conclusions of law.

FINDINGS OF FACT

1. First Bank of Hollywood Beach is a state-chartered bank duly authorized and empowered under the laws of the State of Florida and of the United States to conduct a general banking business in and from offices in the State of Florida. First Bank's main office is located in Broward County, and it has three authorized branch offices in Broward County. (Hearing Officer's Exhibit 1)

   
   

2. American Bank of Hollywood is a state-chartered bank duly authorized and empowered under the laws of the State of Florida and of the United States to conduct a general banking business in and from offices in the State of Florida. (Hearing Officer's Exhibit 1) It conducts business in its main office in Broward County, has a branch office in Broward County, and has applied for a second branch office in Broward County.

   
   

3. Gerald A. Lewis is the Comptroller of the State of Florida and, as such, is the head of the Department of Banking and Finance. On August 1, 1980, the Department received request from the First Bank of Hollywood Beach for approval of an amendment to its charter changing its name to First American Bank of Broward County. On August 22, 1980, the department received an objection to the requested name change from American Bank of Hollywood. (Hearing Officer's Exhibit 1)

   
   

4. Both banks have engaged in the banking business in Broward County, Florida, for more than eight years using their current corporate names. (Hearing Officer's Exhibit 1)

   
   

5. Some of the principals of First Bank of Hollywood Beach, either as directors, officers, or shareholders, are and have been directors, officers, or shareholders of the First American Bank of Palm Beach County, which bank conducts a business through a main office and ten branch offices in Palm Beach County, Florida. Said principals desire to change the name of First Bank of Hollywood Beach to reflect its affiliation with the First American Bank of Palm Beach County. Additionally, substantially the same group of individuals has pending with the Department an application to organize a new bank to be named First American Bank of Broward County, which bank will also conduct its business through its main office in Broward County, Florida. If the de novo charter is approved, the new bank would also function as part of the "group" comprised of the First American Bank of Palm Beach County and the First Bank of Hollywood Beach. (Hearing Officer's Exhibit 1)

   
   

6. As of the date of hearing in this cause, banks with the word "American" in their names were located in thirteen different counties within the State of Florida. At that time, within Broward County, the following commercial banks and savings and loan associations used the word "American" in their titles:

   
   

   American Bank of Hollywood + 1 branch (+ 1 branch applied for)

   Transamerica Bank of Florida + 1 branch Pan American Bank of Broward + 3 branches Great American Bank of Davie

   Great American Bank of Broward County Gulfstream American Bank & Trust Company

   + 5 branches

   AmeriFirst Federal Savings & Loan Associa- tion + 5 branches

   American Savings & Loon Association +

   14 branches

   
   

   The proposed First American Bank of Broward County, together with First Bank's group if its requested name change is approved, would produce five additional locations of banks with "American" in their titles in Broward County.

   
   

7. The sole basis for American Bank's objection to First Bank's requested name change is confusion based upon name similarity. No confusion exists between the First American Bank of Palm Beach County and the Pan American Bank of Palm Beach County or between the First American Bank of Palm Beach County and any bank in Broward County with "American" in its name, although the First American Bank of Palm Beach County has a branch within one mile of the Palm Beach/Broward County line. David Starke, an economist who specializes in consulting work with financial institutions, was not tendered as an expert witness and, accordingly, was not accepted as one. However, the surveys of banks with similar names in the State of Florida prepared by him reveal that all banks using the word "American" in their names also use either a first-word adjective and/or a geographic designation to distinguish one from the other. According to those surveys, both the banks and the savings and loam associations in Broward County with "American" in their titles use these two methods of distinguishing themselves. Both methods of distinction would be utilized by the requested one change in this cause.

   
   

8. Other than uncorroborated hearsay evidence, American Bank introduced four items of correspondence which David L. Cory personally obtained from mail erroneously received by American Bank on one Saturday. All of the items of correspondence originated from persons outside of Broward County, with two of them originating from outside of the State of Florida. None of the items was addressed to the American Bank of Hollywood; however, three of the four items specifically carried American Bank's mailing address.

   
   

9. The 1980 Hollywood (Broward County, Florida) telephone directory contains a listing for a First American Bank of Broward County, a bank formerly known as Executive Bank of Fort Lauderdale and now known as Great American Bank of Broward County.

10 . In March, 1979 the American Bank of Hollywood reserved with the Secretary of State's office the corporate name of American Bank of Broward. Other than reserving the name, American Bank has taken no steps toward using that name.

1. The Department takes no position on the requested name change herein and recommends neither approval nor disapproval.

   
   

   CONCLUSIONS OF LAW

   
   

2. The Division of Administrative Hearings has jurisdiction over the subject matter and the parties hereto. Section 120.57(1), Florida Statutes (1979).

   
   

3. The parties hereto have relied upon Section 659.07, Florida Statutes (1979), which provided that:

   
   

   A bank or trust company shall not amend its articles of incorporation without the written approval of the department,

   and if any amendment requests a change in name of the bank or trust company, the department shall not approve such change if the new name is so similar as to cause confusion with the name

   of an existing bank. (e.s.)

   
   

   Chapter 659, Florida Statutes, was repealed by Section 151, Chapter 80-260, Laws of Florida, effective July 1, 1980. However, Section 21 of Chapter 80-260 created Section 863.410, Florida Statutes [now renumbered as Section 658.31), which provides as follows:

   
   

   1. A bank or trust company shall not amend its articles of incorporation without the written approval of the department.

   2. The department shall not approve any amendment to the articles of incor- poration which requests a change in name of the bank or trust company if the new name is so similar as to be likely to cause confusion with the

      name of an existing financial insti- tution in this state. Evidence that a bank or trust company has reserved a corporate name with the Department

      of State shall not preclude the depart- ment from disapproving the name on the grounds of the likelihood of confusion with the name of an existing financial institution. (e.s.)

      
      

      Insofar as the Department received First Bank's request for name change on August 1, 1980, this cause is governed by Section 658.31, Florida Statutes.

      
      

4. The Department of Banking and Finance has passed no rules or regulations amplifying the statutory provision or setting forth any criteria for determining what constitutes the likelihood of confusion within the meaning of the statute. At the hearing in this cause, the Department suggested certain criteria to be used by the undersigned in determining whether First Bank's request for name change should be approved; however, the Department failed to present any evidence regarding the factual validity of those criteria. Although adjudication is one method of policy development consistent with the Administrative Procedure Act, where an industry-wide practice is being altered, established, or restricted, rules--prospective in their application--are preferable to orders--usually retrospective in their application. To apply the criteria suggested by the Department in the absence of any evidentiary basis for those criteria would constitute, improperly, the emergence of incipient agency policy through adjudication without record foundation and, accordingly, the suggested criteria cannot be applied in this cause.

   
   

   In other words . . . if by reason of the generality of the statute certain conduct is not predictably objection- able, but it may be proscribed or not depending on how the agency views the effect of that conduct and the objects

   of the statute, then, to the extent the agency's reasoning can be isolated, identified, and demonstrated by evi- dence appropriate to the occasion, the agency must create a record foundation for its order that the conduct objected to has effects which the statute is con- strued to condemn. It is insufficient for an agency to prove only the empiri- cal events which are the chosen vehicle for policymaking . . . and then to expound elegantly, but without a record foundation, that [the conduct is] for-

   bidden by [the statute] . Anheuser-Busch, Inc. v. Dept. of Business Regulation,

   393 So.2d 1177, 1182 (1 DCA Fla. 1981).

   
   

5. The testimony of David Starke that the use of an adjectival first word and/or the use of a geographic designation is sufficient to avoid confusion appears to set forth the Department's established policy in determining name confusion. The name Royal Palm Bank has been held to be so similar to the name Royal Trust Bank of Palm Beach, N.A., as to cause confusion since the name begins with the same word and since the Royal Trust Bank historically uses a palm tree in all of its advertising and service literature. Boca Raton Nat'l Bank v. Royal Palm Bank (Proposed New Bank), et al., and Royal Trust Bank of Palm Beach, N.A., Intervenor, DOAH Case No. 79-213; Gulfstream First Bank and Trust, N.A., etc. v. Royal Palm Bank (Proposed New Bank), et al., and Royal Trust Bank of Palm Beach, N.A., Intervenor, DOAH Case No. 79-261; Citizens Nat'l Bank v. Royal Palm Bank (Proposed New Bank), Et al., and Royal Trust Bank of Palm Beach, N.A., Intervenor, DOAH Case No. 79-214. Likewise, the Department has approved name changes for a group of banks where the names begin with the words "Great American" and no other banks in the State of Florida begin their names with those words. (Petitioner First Bank's Exhibit 1)

   
   

6. In the past, use of generic names by banks has been qualified or limited by some type of geographic designation. Recent amendments to the Florida Banking Code, however, now permit branch banking on a countywide basis and permit acquisition by banks of other banks outside the county so that branch banking can now cross county lines. The public is surely entitled to know with certainty the financial institution with which they are doing business, and it is illogical to conclude that expanded branch banking, as now permitted, will do less than substantially increase confusion in the minds of the public and also within the banking community. Accordingly, the need for criteria as to what is likely to cause confusion has been substantially increased by the recent amendments to the Florida Banking Code. The record in this cause illustrates the increasing problem by the number of times counsel for the parties used the wrong name in referring to a particular bank.

   
   

7. First Bank of Hollywood Beach has met its burden of showing entitlement to the requested name change in accordance with current Department policy. Regarding the four items of correspondence erroneously received by American Bank, no testimony was presented to show the frequency of this mistake occurring between banks with "American" in their titles as compared to the frequency of this same mistake between American Bank and any other bank not having the word "American" in its title. Further, no evidence was presented as to how many items of correspondence were correctly delivered on that fate or as to how the ratio of misdelivery that day related to the normal rate of

misdelivery by the post office. In other words, no testimony was presented to show that the "confusion" resulted from the names of banks rather than from any normal rate of errors. American Bank of Hollywood, because of its abbreviated proof, has failed to show either that confusion between banks with "American" in their names is greater than that between banks without "American" in their names in general or, specifically, that confusion existed between it and the former First American Bank of Broward County and is likely, therefore, to exist between it and the proposed First American Bank of Broward County. Most noteworthy is the failure of American Bank to show any confusion between it and the former First American Bank of Broward County before or after that latter bank changed its name to Great American Bank of Broward County.

RECOMMENDATION

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

RECOMMENDED:

That a final order be entered approving the request of First Bank of Hollywood Beach to change its name to First American Bank of Broward County.

RECOMMENDED this 13th day of May, 1981, in Tallahassee, Florida.

LINDA M. RIGOT, Hearing Officer Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32301

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 13th day of May, 1981.

COPIES FURNISHED:

Leonard L. Levenstein, Esquire 1500 South Dixie Highway

Coral Gables, Florida 33146

Walter W. Wood, Esquire Assistant General Counsel Office of the Comptroller Suite 1302, The Capitol Tallahassee, Florida 32301

Robert B. Butler, Esquire Ellis, Spencer, Butler & Kisslan 1909 Tyler Street

Post Office Box 6 Hollywood, Florida 33022

The Honorable Gerald A. Lewis Comptroller, State of Florida The Capitol

Tallahassee, Florida 32301

=================================================================

AGENCY FINAL ORDER

=================================================================

STATE OF FLORIDA

DIVISION OF BANKING AND FINANCE DIVISION OF BANKING

IN THE MATTER OF:

APPLICATION OF FIRST BANK OF

HOLLYWOOD BEACH TO CHANGE ITS ADMINISTATIVE PROCEEDING NAME TO FIRST AMERICAN BANK OF NUMBER 81-1-DOB BROWARD COUNTY, CASE NO. 80-1581

Petitioner,

/

FINDINGS OF FACT, CONCLUSIONS OF LAW, AND FINAL ORDER

GERALD LEWIS, as head of the Department of Banking and Finance of the State of Florida, having fully considered the facts and information contained in the record relating to this matter, hereby renders the following FINDINGS OF FACT, CONCLUSIONS OF LAW AND FINAL ORDER in these proceedings:

FINDINGS OF FACT

1. The Petitioner, FIRST BANK OF HOLLYWOOD BEACH, a state-chartered bank under the provisions of Chapters 658-661, Florida Statutes, did file with the Department of Banking and Finance of the State of Florida (hereinafter referred to as the Department), its application dated June 30, 1980, as prescribed by Section 658.31, Florida Statutes, for approval by the Department permitting the Petitioner to change its name from FIRST BANK OF HOLLYWOOD BEACH to the FIRST AMERICAN BANK OF BROWARD COUNTY.

   
   

2. Notice of such application was duly published in the Florida Administrative weekly on August 8, 1980, and thereafter on August 22, 1980, the AMERICAN BANK OF HOLLYWOOD did file with the Department its objection to such proposed name change and its request for a public hearing.

   
   

3. A public hearing concerning the application for name change was held on January 2, 1981, in Ft. Lauderdale, Florida, as provided in Chapter 120, Florida Statutes, by the Division of Administrative Hearings, Department of Administration of the State of Florida.

4. Linda M. Rigot, the duly assigned Hearing Officer of the Division of Administrative Hearings, did issue her Findings of Fact, Conclusions of Law and Recommended Order under date of May 13, 1981.

   
   

5. As of the date hereof no party to these proceedings has filed with the Department any exceptions to the Recommended Order of the Division of Adminstrative Hearings as provided by Section 120.57(1)(b)12, Florida Statutes.

   
   

6. At the hearing of this matter before the Division of Administrative Hearings, the First Bank of Hollywood Beach presented the testimony of Roy W. Talmo and of David Starke. American Bank of Hollywood introduced the testimony of David L. Cory. The parties also introduced a pre-hearing stipulation. Insofar as the Recommended Order of the Hearing Officer constitutes findings of fact and rulings on evidence under the provisions of Section 120.57(1)(b)12, Florida Statutes, the findings of fact as established by the Hearing Officer are adopted as the findings of fact by the Department. Such findings of fact are as follows:

   
   

   1. First Bank of Hollywood Beach is a state-chartered bank duly authorized and empowered under the laws of the State of Florida and of the United States to conduct a general banking business in and from offices in the State of Florida. First Bank's main office is located in Broward County, and it has three authorized branch offices in Broward County. (Hearing Officer's Exhibit 1)

      
      

   2. American Bank of Hollywood is a state-chartered bank duly authorized and empowered under the laws of the State of Florida and of the United States to conduct a general banking business in and from offices in the State of Florida. (Hearing Officer's Exhibit 1) It conducts business in its main office in Broward County, has a branch office in Broward County, and has applied for a second branch office in Broward County.

      
      

   3. Gerald A. Lewis is the Comptroller of the State of Florida and, as such, is the head of the Department of Banking and Finance. On August 1, 1980, the Department received request from the First Bank of Hollywood Beach for approval of an amendment to its charter changing its name to First American Bank of Broward County. On August 22, 1980, the department received an objection to the requested name change from American Bank of Hollywood. (Hearing Officer's Exhibit 1)

      
      

   4. Both banks have engaged in the banking business in Broward County, Florida, for more than eight years using their current corporate names. (Hearing Officer's Exhibit 1)

      
      

   5. Some of the principals of First Bank of Hollywood Beach, either as directors, officers, or shareholders, are and have been directors, officers, or shareholders of the First American Bank of Palm Beach County, which bank conducts a business through a main office and ten branch offices in Palm Beach County, Florida. Said principals desire to change the name of First Bank of Hollywood Beach to reflect its affiliation with the First American Bank of Palm Beach County. Additionally, substantially the same group of individuals has pending with the Department an application to organize a new bank to be named First American Bank of Broward County, which bank will also conduct its business through its main office in Broward County, Florida. If the de novo charter is approved, the new bank would also function as part of the "group" comprised of the First American Bank of Palm Beach County and the First Bank of Hollywood Beach. (Hearing Officer's Exhibit 1)

   6. As of the date of hearing in this cause, banks with the word "American" in their names were located in thirteen different counties within the State of Florida. At that time, within Broward County, the following commercial banks and savings and loan associations used the word "American" in their titles:

      
      

      American Bank of Hollywood + 1 branch (+ 1 branch applied for)

      Transamerica Bank of Florida + 1 branch Pan American Bank of Broward + 3 branches Great American Bank of Davie

      Great American Bank of Broward County Gulfstream American Bank & Trust Company

      + 5 branches

      AmeriFirst Federal Savings & Loan Associa- tion + 5 branches

      American Savings & Loon Association +

      14 branches

      
      

      The proposed First American Bank of Broward County, together with First Bank's group if its requested name change is approved, would produce five additional locations of banks with "American" in their titles in Broward County.

      
      

   7. The sole basis for American Bank's objection to First Bank's requested name change is confusion based upon name similarity. No confusion exists between the First American Bank of Palm Beach County and the Pan American Bank of Palm Beach County or between the First American Bank of Palm Beach County and any bank in Broward County with "American" in its name, although the First American Bank of Palm Beach County has a branch within one mile of the Palm Beach/Broward County line. David Starke, an economist who specializes in consulting work with financial institutions, was not tendered as an expert witness and, accordingly, was not accepted as one. However, the surveys of banks with similar names in the State of Florida prepared by him reveal that all banks using the word "American" in their names also use either a first-word adjective and/or a geographic designation to distinguish one from the other. According to those surveys, both the banks and the savings and loam associations in Broward County with "American" in their titles use these two methods of distinguishing themselves. Both methods of distinction would be utilized by the requested one change in this cause.

      
      

   8. Other than uncorroborated hearsay evidence, American Bank introduced four items of correspondence which David L. Cory personally obtained from mail erroneously received by American Bank on one Saturday. All of the items of correspondence originated from persons outside of Broward County, with two of them originating from outside of the State of Florida. None of the items was addressed to the American Bank of Hollywood; however, three of the four items specifically carried American Bank's mailing address.

      
      

   9. The 1980 Hollywood (Broward County, Florida) telephone directory contains a listing for a First American Bank of Broward County, a bank formerly known as Executive Bank of Fort Lauderdale and now known as Great American Bank of Broward County.

      
      

   10. In March, 1979 the American Bank of Hollywood reserved with the Secretary of State's office the corporate name of American Bank of Broward. Other than reserving the name, American Bank has taken no steps toward using that name.

       CONCLUSIONS OF LAW

       
       

7. The undersigned, as head of the Department of Banking and Finance of the State of Florida, has jurisdiction of the subject matter of these proceedings and of the parties. Chapters 658-661, Florida Statutes.

   
   

8. The Hearing Officer prepared and submitted to the parties a Recommended Order including Findings of Fact and Conclusions of Law as specified in Section 120.57(1)(b)8, Florida Statutes, however, Section 120.57(1)(b)12, Florida Statutes, is an exception to the first cited Section and provides that in proceedings for licensing or merger under Title XXXVII or Title XXXVIII, Florida Statutes, the Hearing Officer shall complete and submit to the parties a written report consisting of findings of fact and rulings on evidence. An application for name change of a state-chartered bank is a proceeding under Titles XXXVII and XXXVIII (Section 658.31, Florida Statutes, Supp. 1980) and will, if granted, require the amendment to the previously approved Articles of Incorporation. It is therefore a part of licensing as defined by Section 120.52(8), Florida Statutes, and is controlled by Section 120.57(1)(b)12, Florida Statutes. Therefore, to the extent the Recommended Order of the Hearing Officer exceeds the provisions of Section 127.57(1)(b)12, Florida Statutes, such Recommended Order will be treated and accepted as a written report including only findings of fact and rulings on evidence.

   
   

9. The testimony introduced on behalf of the First Bank of Hollywood Beach by David Starke that the use of an adjectival first word and/or the use of a geographical designation, as in the name requested by Applicant, is sufficient to avoid confusion and uncertainty in the minds of the public was uncontroverted by any substantial competent evidence. It is therefore accepted by the Department and the Applicant has met its burden of proof showing entitlement to the requested mane change. Gard, Florida Evidence, 2nd Ed., Chapter 23, et seq.

   
   

10. Section 658.31(2), Florida Statutes (Supp. 1980) provides that the Department shall not approve any amendment to the Articles of Incorporation of an existing bank changing the name of such bank if such new name is so similar to that of any other bank as to cause confusion. The Department, on the basis of the foregoing, concludes that the name FIRST AMERICAN BANK OF BROWARD COUNTY is not so similar to the name of any other bank now operating in Broward County as to cause confusion and this section is therefore no bar to the granting of approval by the Department.

FINAL ORDER

Based upon the foregoing findings of fact and conclusions of law, the application of FIRST BANK OF HOLLYWOOD BEACH for authority to change its name to FIRST AMERICAN BANK OF BROWARD COUNTY is approved and Applicant may proceed to accomplish such change as otherwise provided by law.

DONE AND ORDERED at Tallahassee, Florida, this 17th day of June, 1981.

GERALD LEWIS as Comptroller of the State of Florida and Head of the Department of Banking and Finance

Copies furnished:

Robert B. Butler, Esquire Linda M. Rigot, Hearing Officer Attorney for American Bank Division of Administrative Hearings

of Hollywood Oakland Building Ellis, Spencer, Butler 2009 Apalachee Parkway

and Kisslan Tallahassee, Florida 32301 Post Office Box 6

Hollywood, Florida 33022

Leonard L. Levenstein, Esquire Walter W. Wood

Attorney for First Bank of Assistant General Counsel Hollywood Beach Office of the Comptroller

1400 South Dixie Highway Suite 1302, The Capitol Coral Gables, Florida 33146 Tallahassee, Florida 32301

Gerald Oliver, Director Division of Banking Office of the Comptroller Suite 1301, The Capitol

Tallahassee, Florida 32301

Docket for Case No: 80-001581

Orders for Case No: 80-001581