STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

CURTIS A. GOLDEN, STATE ATTORNEY ) FOR THE FIRST JUDICIAL CIRCUIT, )

)

Petitioner, )

)

vs. ) CASE NO. 83-1441

)

ART'S MOTORHOMES AND ITS ) PRINCIPAL, A.C. "ART" MURPH, )

)

Respondent. )

)

RECOMMENDED ORDER

This matter came on for hearing in Pensacola, Florida, before the Division of Administrative Hearings by its duly designated Hearing Officer, Robert T. Benton, II, on July 27, 1983. Respondents entered no appearance although duly noticed. Petitioner was represented by counsel:

William P. White, Jr. Assistant State Attorney Post Office Box 12726 Pensacola, Florida 32501

By complaint issued May 5, 1983, petitioner alleged that respondents do business in Pensacola, and in a single judicial circuit, and that

Respondents accept recreational vehicles and motor homes from private individuals for resale on a commission basis . . . Respondents have failed to promptly provide the proceeds of such sales to repay the loan or liens which apply to such vehicles and to assure that the buyers . . . are promptly provided with clear titles . . . and that the sellers are provided with the proceeds of the sales.

The complaint alleges that these practices "violate the law and public policy of the United States and the State of Florida as established by Sections 812.014, 319.34, 501.204, Florida Statutes, common law and/or case law," and that they "constitute unfair and/or deceptive trade practices" in that they are unlawful, "unethical, immoral or unscrupulous . . . and . . . have damaged consumers, competitors or other businessmen," all in violation of Part II, Chapter 501, Florida Statutes.

ISSUE

Whether there is probable cause for petitioner to bring an action against respondents for violation of the Florida Deceptive and Unfair Trade Practices Act?

FINDINGS OF FACT

1. Raymond Howard Hildebrand, Jr., telephoned A. C. "Art" Murph in response to a newspaper ad, and, on November 17, 1981, signed an agreement with Mr. Murph under which, in exchange for title to and possession of the Hildebrands' 1979 Dodge Leisure Craft, Mr. Murph agreed to make specified monthly payments to Pen Air Federal Credit Union (PAFCU) until he could sell the recreation vehicle, and to satisfy the PAFCU lien with the sale proceeds, when it was sold. Under their agreement, Mr. Murph was to retain any sale proceeds in excess of what was needed to satisfy PAFCU's lien, as a commission on the sale.

   
   

2. Mr. Hildebrand left the recreation vehicle with respondent on November 17, 1981. When the December payment on the loan PAFCU had made to the Hildebrands, the loan respondent had undertaken to repay, was overdue, Mr. Hildebrand got a notice to that effect. He got a similar notice in January. Respondent made these payments belatedly.

   
   

3. On December 10, 1981, respondent sold the Hildebrands' vehicle to a third party who at that time paid respondent, in full, a price that exceeded the amount owed PAFCU by almost $2,000. Mr. Hildebrand happened to see the motor home parked at a neighbor's house on January 25, 1982, and, on inquiring, learned of the preceding month's sale.

   
   

4. In a conversation with respondent on January 27, 1982, he was told everything would be straightened out in 10 to 14 days. Respondent told him somebody else had written respondent a bad check so that he needed the proceeds of the sale of the Hildebrands' motor home for some other purpose. Only after the Hildebrands engaged counsel and incurred legal fees did respondent pay PAFCU what was owed, more than a year later. It took that long for the new owner to receive title, as well.

   
   

5. Sylvia Galloway's parents placed a motor home with respondent on consignment last May, and respondent sold it in June of 1982. Also in June, Ms. Galloway's parents received a check representing their agreed share of the sale proceeds. Only several months later, however, did the financing institution receive the moneys owed it, and it was Christmas before the new owners got title.

   
   

   CONCLUSIONS OF LAW

   
   

6. Under the Florida Deceptive and Unfair Trade Practices Act, Sections

   501.201 et seq., Florida Statutes (1981), an "enforcing authority" is authorized to bring an action "to obtain a declaratory judgment that an act or practice violates [Chapter 501, Part II, Florida Statutes (1981)]," Section 501.207(1)(a), Florida Statutes (1981), or an "action on behalf of one or more consumers for . . . damages . . ." Section 501.207(1)(c), Florida Statutes (1981). Before instituting judicial proceedings for declaratory judgment or for damages, however, "the enforcing authority shall, pursuant to an administrative hearing, determine that there is probable cause to bring the action." Section 501.207(2), Florida Statutes (1981).

   
   

7. The "enforcing authority" is the Department of Legal Affairs when a violation "occurs in or affects more than one judicial circuit or if the office of state attorney fails to act upon a violation within 90 days after a written complaint has been filed with the state attorney." Section 501.203(4), Florida

   Statutes (1981). Where the violation occurs solely within or affects only a single judicial circuit, as here, the pertinent office of the state attorney is the "enforcing authority," whether the complaint is filed directly with the office of the state attorney or whether it is referred by the Department of Legal Affairs. The statute contemplates both possibilities.

   
   

8. Petitioner asked the Division of Administrative Hearings to conduct administrative proceedings in the present case even though respondents never disputed the allegations of the complaint. Section 501.207(2), Florida Statutes (1981), requires an administrative hearing but does not require formal proceedings pursuant to Section 120.57(1), Florida Statutes (1981), in the absence of disputed issues of material fact. Because the respondent was not given a "clear point of entry" or a clear opportunity to dispute the factual allegations of the administrative complaint, however, formal proceedings are appropriate here to safeguard respondents' rights. If respondents are apprised, in the future, of their right to dispute the factual allegations of the complaint within a reasonable, specified time period, but fail to do so, probable cause determinations can be handled expeditiously and informally pursuant to Section 120.57(2), Florida Statutes (1981).

   
   

9. On the merits, the question is whether there has been "adequate proof of probable cause for the institution of a civil suit." Kasha v. Department of Legal Affairs, 375 So.2d 43, 44 (Fla. 3d DCA 1979). The quantum of proof is less than a preponderance of the evidence. Id. There must be a showing only that there is reason to believe that respondents have been guilty of "unfair or deceptive acts or practices." Section 401.204(1), Florida Statutes (1981). This language has been held not to apply to real estate transactions, State ex rel. Herring v. Murdock, 345 So.2d 759 (Fla. 4th DCA 1977), and certain

   provisions have been limited to "consumer transactions." Black v. Department of Legal Affairs, 353 So.2d 655 (Fla. 2d DCA 1977). Neither of these limitations pertain there.

10. In construing the language "unfair or deceptive acts or practices," due consideration and great weight shall be

    given to the interpretations of the Federal Trade Commission and the federal courts relating to s. 5(a)(1) of the Federal Trade Commission Act (15 U.S.C. 45(a)(1)), as from time to time amended.

    Section 501.204(2), Florida Statutes (1981).

    
    

    The United States Supreme Court quoted with approval the following formulation by the Federal Trade Commission:

    
    

    1. whether the practiced without necessarily having been previously considered unlawful, offends public policy as it has been established by statutes, the common law, or otherwise--whether, in other words, it is within at least the penumbra of some

common-law, statutory or other established concept of unfairness; (2) whether it is immoral, unethical, oppressive or unscrupulous;

(3) whether it causes substantial injury to consumers (or competitors or other businessmen). Statement of Basis and Purpose of Trade

Regulation Rule 408, Unfair or Deceptive Advertising and Labeling of cigarettes in Relation to the Health Hazards of Smoking. 29 Fed Reg 8355 (1964).

FTC v. Sperry & Hutchinson Co., 405 v. S. 233,

244 n. 5 (1972). (quotation marks omitted)

The facts shown in the present case give probable cause to believe that respondents are guilty of immoral, unethical, oppressive and unscrupulous conduct causing substantial injury to consumers.

RECOMMENDATION

It is, accordingly, RECOMMENDED:

That petitioner find probable cause to institute judicial proceedings against respondents pursuant to Section 501.207(1), Florida Statutes (1981).

DONE and ENTERED this 24th day of August, 1983, in Tallahassee, Florida.

ROBERT T. BENTON II

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 24th day of August, 1983.

COPIES FURNISHED:

William P. White, Jr. Assistant State Attorney Post Office Box 12726 Pensacola, Florida 32501

Art Murph and Art's Motor Homes 6813 Pine Forest Road Pensacola, Florida 32504

Curtis Golden, State Attorney First Judicial Circuit of Florida

Post Office Box 12726

190 Governmental Center Pensacola, Florida 32501

Docket for Case No: 83-001441

Orders for Case No: 83-001441