STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

FIRST FIDELITY SAVINGS AND )

LOAN ASSOCIATION, )

)

Petitioner, )

)

vs. ) CASE NO. 83-0859

) DEPARTMENT OF BANKING AND FINANCE, PIONEER ) FEDERAL SAVINGS AND LOAN ASSOCIATION, AND ) AMERICAN SAVINGS AND LOAN ASSOCIATION OF ) FLORIDA, )

)

Respondent. )

)

HEARING OFFICER'S REPORT

This matter came on for hearing on April 25, 26 and 27, 1984, in Orlando, Florida, before the Division of Administrative Hearings and its duly appointed Hearing Officer, R. T. Carpenter. The parties were represented by:

For Petitioner: Christopher K. Kay, Esquire

Thomas F. Lang, Esquire SWANN and HADDOCK

135 West Central Boulevard, Suite 1100 Post Office Box 640

Orlando, Florida 32802-0640

For Respondent: Carl B. Morstadt, Esquire Department of Office of the Comptroller Banking and The Capitol, Suite 1301 Finance Post Office Box 10544

Tallahassee, Florida 32301

For Respondent: Bruce D. Fischman, Esquire American Savings BROAD and CASSEL

and Loan Assoc- 1108 Kane Concourse

iation of Florida Bay Harbor Island, Florida 33154

For Respondent: Dennis P. Thompson, Esquire Pioneer Federal RICHARDS, NODINE, GILKEY, FITE,

Savings and Loan MEYER and THOMPSON, P.A. Assocation 1253 Park Street

Clearwater, Florida 33516

This matter arose on Respondents' opposition to Petitioner's proposed name change to "American Pioneer Savings and Loan Association" (American Pioneer).

The parties submitted proposed findings of fact which have been adopted and incorporated herein with the exception of those which are found to be subordinate, cumulative, immaterial, unnecessary or not supported by the

evidence. This report contains findings of fact in accordance with Subsection 120.57(1)(b)12, Florida Statutes (1983). Rulings on all motions and evidentiary matters were entered prior to or during the course of the final hearing.

FINDINGS OF FACT

1. First Fidelity Savings and Loan Association (First Fidelity) is a state chartered savings and loan association founded in Winter Park, Florida, in late 1980. In November, 1982, First Fidelity acquired American Pioneer Corporation. On December 31, 1982, First Fidelity also acquired by merger First Federal of Martin County. As of January 1, 1983, the organization consisted of First Fidelity with one retail office in Winter Park and eight retail offices in Martin County, and the American Pioneer Corporation, with its wholly-owned subsidiaries American Pioneer Life Insurance Company, American Pioneer Casualty Insurance Company, American Pioneer Title Insurance Company, American Pioneer Properties, and American Pioneer Land. Since that time, First Fidelity has acquired seven retail offices of Flagship Bank of Orlando.

   
   

2. Pioneer Federal Savings and Loan Association (Pioneer Federal) is a federally chartered savings and loan association formed by a merger between Clearwater Federal Savings and Loan Association and Park Federal Savings and Loan Association on February 1, 1982. Currently, Pioneer Federal has a total of

   50 branch offices in Florida, including Gadsden, Leon, Santa Rosa, Hernando, Pasco, Pinellas, Hillsborough, Sarasota, Lee, Collier, Orange, Seminole, and Lake Counties.

   
   

3. American Savings and Loan Association of Florida (American Savings) is a state chartered savings and loan association with headquarters in Miami. American Savings has a total of 54 branch offices, 48 of which are in Dade, Broward and Palm Beach Counties. Although all three institutions have expansion plans, First Fidelity now competes with American Savings only in Lee County and with Pioneer Federal in Orange, Seminole, Hillsborough, and Lee Counties.

   
   

4. The purpose for Petitioner's name change is to establish a unified corporate image, whereby the public would associate the various companies and their services. The proposed name change would result in advertising cost savings and is expected to increase the opportunities for profits from cross- selling of insurance and financial services.

   
   

5. There is no evidence of actual name confusion since the proposed name change has not been approved. The evidence offered by the parties on the issue of confusion is therefore based on experience in analogous situations and survey responses.

   
   

6. The experience of American Pioneer Title Insurance Company, after use of that name was authorized by the Department of Insurance, was submitted by Petitioner as evidence of whether con fusion would exist if the name change proposed herein is approved. As here, Petitioner previously sought the name American Pioneer Title Insurance Company to identify the relationship of its title insurance business with other American Pioneer services. There has been no known confusion between American Pioneer Title Insurance Company and either American Title Insurance Company or Pioneer National Title Insurance Company (the companies objecting to the change) since this name change was approved. Petitioner's evidence established that no mail has been misdelivered to American Pioneer Title, nor has anyone walked into its offices mistaking them for American Title or Pioneer National.

7. Financial institutions frequently adopt names which imply solidarity or strength and instill confidence. Because of the limited number of such words, names of individual financial institutions are often similar. For example, every savings and loan association based in Brevard County was at one tame named First Federal (First Federal of Titusville, First Federal of Cocoa, First Federal of Brevard County). Although some institutions have changed their names to avoid geographical limitations, there are still a significant number of institutions in Florida doing business as First Federal. Other names of Florida financial institutions which are similar include Sun Bank and Sun Federal, American Savings and Amerifirst, The America's Bank and American Bank of Merritt Island, First Federal of Orlando and First Federal of Seminole, First National Bank and The First Bankers.

   
   

8. The word "America" or "American" is commonly used in the names of financial and insurance institutions. According to the Directory of American Savings and Loan Association and Polk's World Bank Directory, there are 73 different main offices and 1,027 branch offices of savings and loan associations and 415 banks that use the word "America" or "American" in their name. The word "Pioneer" is also commonly used in the names of financial and insurance institutions. According to the Best's Insurance Reports, there are 14 insurance companies using the word "Pioneer" in their names. In addition, a Dun and Bradstreet report revealed there are at least 690 companies in the United States that used the word "Pioneer" in their names. Thus, the public is necessarily accustomed to distinguishing companies which have similar or somewhat similar names.

   
   

9. Petitioner and Pioneer Federal each retained experts to prepare studies on potential name confusion. Petitioner's study was prepared by Datafax, a consumer research company located in Winter Park. Surveys were conducted in Tampa, Orlando, Clearwater, Miami Beach and Stuart with 50 people interviewed in each city.

   
   

10. The Datafax survey indicated that 96 percent of the 250 people surveyed were not confused between the names American Pioneer Savings and Loan and American Savings and Loan of Florida. Similarly, 95.6 percent of the 250 people surveyed were not confused between the names Pioneer Federal and American Pioneer Savings and Loan. The survey further indicated greater confusion between Sun Federal and Sun Bank (17.6 percent) and Amerifirst and American Savings (16.4 percent) than between Petitioner's proposed name and those of either of the Respondent institutions. Further, there was greater confusion indicated between Petitioner's existing name of First Fidelity Savings and Loan and that of First National Bank of Winter Park, than between Petitioner's proposed name and those of either of the Respondent institutions.

    
    

11. The results of the Datafax inquiry relating to logotypes, indicates that the public would differentiate between American Pioneer and Pioneer Federal and American Savings with little difficulty. 99.2 percent of the people surveyed were not confused between the names and logotypes of American Pioneer Savings and Loan and American Savings and Loan of Florida. 95.6 percent of the

    250 people surveyed were not confused between the names and logotypes of Pioneer Federal Savings and Loan and American Pioneer Savings and Loan.

    
    

12. A second purpose of the Datafax study concerned the reasons customers give for selection of their financial institutions. The survey revealed that services, location, convenience and personnel rather than institutional names are the primary considerations.

13. Pioneer Federal's study was prepared by Dr. Joel B. Cohen, of the University of Florida, in association with National Analysts, represented by Dr. Marshall G. Greenberg. The purpose of the study was to determine whether or not customers would he confused by pairs of savings and loan names having word similarities. Three hundred people were surveyed by telephone in Winter Park.

    
    

14. Petitioner's study prepared by Datafax relied on answers to questions where the subjects were asked whether or not they were confused. Results of the Pioneer Federal study are more difficult to quantify since the subjects were not asked directly whether or not they were confused by pairs of names. Rather, a series of questions was asked to test name recognition and recall of hypothetical interest rates offered by various institutions. The results of the Pioneer Federal Study indicated that 70 percent of the sample would experience some confusion between the names Pioneer Federal Savings and Loan and American Pioneer Savings and Loan.

    
    

15. The disparity in results between the two studies can be attributed in part to the difference in interview approach (direct questions as opposed to testing of recall). Further, the Datafax study included face to face contact and the opportunity for subjects to read and visually examine written names and/or logotypes. These sources of stimulation were absent in the Pioneer Federal telephone survey.

    
    

16. The Datafax survey results may not be reliably projected due to the absence of several scientifically necessary survey procedures. Convenience sampling rather than probability sampling procedures were followed in that interviewers were at liberty to select their subjects (within given zones). There were no "call-back" procedures used and no quality control checks performed on the interviewers. Finally, the five cities utilized were not selected on a random basis.

    
    

17. Although the Pioneer Federal survey more closely adhered to accepted survey standards, results cannot be reliably projected beyond the Winter Park community. There was no showing that Winter Park, the city intentionally selected for the survey, is representative of any larger community. However, both studies present credible evidence on the issue of name confusion and their data must be considered in reaching a factual conclusion on this issue.

    
    

18. Overall, the public will experience at least some confusion if the proposed name change is granted Such confusion is most likely to occur where the contact with the institution is brief or casual. It is unlikely that a prudent person seeking to utilize the services of any of the three savings and loan associations which are parties to this proceeding would experience any significant confusion if the requested name change is approved.

FILED this 30th day of July, 1984 in Tallahassee, Florida.

R. T. CARPENTER 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 30th day of July, 1984.

COPIES FURNISHED:

Christopher K. Kay, Esquire Thomas F. Lang, Esquire SWANN and HADDOCK

Post Office Box 640

Orlando, Florida 32802-0640

Carl B. Morstadt, Esquire Office of the Comptroller Post Office Box 10544 Tallahassee, Florida 32301

Bruce D. Fischman, Esquire BROAD and CASSEL

1108 Kane Concourse

Bay Harbor Island, Florida 33154

Dennis P. Thompson, Esquire 1253 Park Street

Clearwater, Florida 33516

Honorable Gerald Lewis, Comptroller

Department of Banking and Finance The Capitol

Tallahassee, Florida 32301

Docket for Case No: 83-000859

Orders for Case No: 83-000859