STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
LAKE WALES CHRYSLER PLYMOUTH ) DODGE, INC. and CHRYSLER MOTORS ) CORPORATION, )
)
Petitioners, )
)
vs. ) CASE NO. 87-0962
)
TOM EDWARDS, INC. and ) DEPARTMENT OF HIGHWAY SAFETY ) AND MOTOR VEHICLES, )
)
Respondent. )
)
RECOMMENDED ORDER
The formal administrative hearing in this case was held before William C. Sherrill, Jr., in Lakeland, Florida, on July 1 and 2, 1987. The issue in this case is whether the Petitioner should be granted a license as a franchised new motor vehicle dealer in Lake Wales, Florida. Appearing for the parties were:
For Petitioner, Chrysler Motors Corporation:
Allan M. Huss, Esquire Senior Staff Counsel Chrysler Motors Corporation Post Office Box 1919 Detroit, Michigan 48288
For Petitioner, Lake Wales Chrysler Plymouth Dodge, Inc.: Dean Bunch, Esquire
Rumberger, Kirk, Caldwell Cabaniss & Burke, P.S.
Suite 900, 101 North Monroe Street
Tallahassee, Florida 32301
For Respondent, Tom Edwards, Inc.:
Frank J. Rouse, Esquire 680 East Main Street Bartow, Florida 33830
For Respondent, the Department of Highway Safety
and Motor Vehicles:
No appearance.
The Petitioners presented 62 exhibits, which were admitted into evidence, and the testimony of John R. Peters, Richard M. Snyder, and John R. McLeod. The Respondent presented 10 exhibits, 4 of which were admitted into evidence, and the testimony of Tom Edwards. There is a transcript. The parties have submitted proposed findings of fact and conclusions of law.
FINDINGS OF FACT
The Petitioner, Lake Wales Chrysler-Plymouth Dodge, Inc. has applied to the Department of Highway Safety and Motor Vehicles for a license as a motor vehicle dealer to sell new Chrysler, Plymouth, and Dodge vehicles. The Petitioner proposes to locate the new dealership at 1900 U.S. Highway 27 North, Lake Wales, Florida, which is in Polk County, Florida.
The Petitioner, Chrysler Motors Corporation is willing to enter into an agreement with Lake Wales Chrysler-Plymouth Dodge, Inc., establishing a new dealership in Lake Wales if a license is obtained. Chrysler Motors Corporation is a licensed motor vehicle manufacturer qualified to do business in the State of Florida and licensed pursuant to Chapter 320, Florida Statutes.
Tom Edwards, Inc., is a licensed and franchised new car dealership located at 690 East Main Street, Bartow, Florida, in Polk County, Florida. T.
308. Tom Edwards, Inc., initially opened in 1973 with four lines, Chrysler, Plymouth, Dodge, and Dodge Trucks. T. 309. Tom Edwards, Inc., has been in operation continuously since 1973, and now sells Chrysler, Dodge, and Dodge Trucks, but does not sell Plymouth. T. 98-99.
On January 27, 1987, Tom Edwards, Inc., filed with the Department of Highway Safety and Motor Vehicles a formal protest against the grant of a license to Lake Wales Chrysler-Plymouth Dodge, Inc.
On February 27, 1987, the Department of Highway Safety and Motor Vehicles referred the application and protest to the Division of Administrative Hearings to conduct a formal administrative hearing pursuant to section 120.57(1), Fla. Stat. (1986).
Chrysler Corporation has not contended and does not now contend that Tom Edwards, Inc., has breached its sales agreement. Tom Edwards, Inc., has satisfactorily met its sales agreement requirements with respect to fair market share since 1982, and has received several "5 star awards" from Chrysler. Chrysler Corporation has never in writing advised Tom Edwards, Inc., that it was dissatisfied with penetration in the Bartow or Lake Wales sales localities, or in comparison to other dealerships in Polk County.
Chrysler Corporation does contend, however, that recent registrations of Chrysler vehicles in Polk County and the Lake Wales sales locality are inadequate when compared to recent Chrysler registrations in the United States and in what is known as the Orlando zone, and that this inadequacy has occurred despite sales potential and efforts by all Chrysler dealers wherever located.
Whether Chrysler Corporation has assigned Tom Edwards, Inc., to represent the Lake Wales sales locality
In May, 1980, the Chrysler dealership in Lake Wales, Florida, closed. T. 310-11.
Chrysler Corporation asked Tom Edwards, Inc., if it would advertise in the yellow pages of the telephone directory in Lake Wales, and offered to pay the cost. T. 310. Tom Edwards, Inc., agreed, and took out advertising in the 1981 Lake Wales yellow pages. T. 310-11. Tom Edwards, Inc., has advertised in the Lake Wales yellow pages continuously since then. T. 311.
By 1985, Chrysler Corporation no longer paid the cost. The cost was billed to the parts account of Tom Edwards, Inc., by Chrysler. R. Ex. 7.
Tom Edwards, Inc., does not limit its advertising to Lake Wales. It advertises in the telephone yellow pages in Bartow, Mulberry, Plant City, Lakeland, Winter Haven, Lake Wales, and Fort Meade. T. 375. Tom Edwards, Inc., also advertises in the Lakeland Ledger, a newspaper that circulates throughout all of Polk County, and on a radio station received throughout all of Polk County. T. 373-74. In short, all of the advertising by Tom Edwards, Inc., is county-wide. T. 375.
In the sales agreement between Tom Edwards, Inc., and Chrysler Corporation, Tom Edwards, Inc., is assigned the Bartow sales locality, which includes post office towns near Bartow, but does not include the Lake Wales sales locality. T. 368.
While Chrysler Corporation has encouraged Tom Edwards, Inc., to serve the Lake Wales sales locality through yellow page advertising, and has allowed Tom Edwards, Inc., to actively represent Chrysler Corporation in Lake Wales, Chrysler Corporation has not contractually assigned that sales locality to Tom Edwards, Inc.
Economic impact upon Tom Edwards, Inc. for purposes of determining the existence of a substantial interest
In 1986, Tom Edwards, Inc., sold 25 new motor vehicles in the Lake Wales sales locality for a gross profit of $31,257.93. T. 317-18. The total gross profit from Lake Wales customers in 1986, including service and parts, was
$44,000. T. 320. It is inferred that Tom Edwards, Inc., would lose some of that gross profit if a new competing Chrysler dealership is established by the Petitioners.
Determination of the community or territory of representation
The Chrysler Corporation identifies sales localities for potential placement of dealerships, defining a sales locality as a principal town reasonably close and accessible from surrounding communities. T. 90.
Chrysler Corporation designates sales localities in sales agreements with dealers. T. 91. Pursuant to such sales agreements, Chrysler holds the dealer responsible only for performance and adequacy of facilities with respect to the designated sales locality. T. 94.
Chrysler has identified four sales localities in Polk County: Lakeland, Winter Haven, Bartow, and Lake Wales. T. 91; P. Ex. 0-6 and 1. These sales localities are separate geographic areas of Polk county.
Chrysler has new vehicle dealerships in Lakeland, Winter Haven, and Bartow, but not in Lake Wales. P. Ex. 0-35 and 1. All of these dealerships carry Chrysler, Dodge, and Dodge Truck. The dealerships in Lakeland and Winter Haven also carry Plymouth. T. 99. Chrysler has selected a proposed site for a dealership in Lake Wales. T. 83.
The driving time and distance between existing Chrysler dealerships or the proposed Lake Wales new dealership site are as follows:
Lake Wales to Bartow: 17.3 miles, 22:20 minutes.
Bartow to Lakeland: 15.6 miles, 27:43 minutes.
Lakeland to Winter Haven: 17.5 miles, 31:40 minutes.
Winter Haven to Lake Wales: 11.6 miles, 17:45 minutes.
Bartow to Winter Haven: 11.0 miles, 17:05 minutes. T. 83-88.
It is inferred that one-way driving times of 17 to 31 minutes, while not a major impediment to travel, are sufficiently large that for some types of social and economic activity, a resident of one of the four urban areas (Bartow, Lakeland, Winter Haven, and Lake Wales) may choose to stay within the area rather than to invest the round-trip time to travel to another area.
The post offices serving Polk County serve only Polk County, and no part of Polk County is served by a post office outside of Polk County. T. 39.
Polk County is designated by the United States Bureau of the Census as a statistical metropolitan area (SMA). T. 82.
The statistical metropolitan area that is Polk County is composed of census tracts as depicted in P. Exs. C-7 and C-8. T. 109. The four Chrysler sales localities are roughly composed of the census tracts depicted on P. Ex. 9.
T. 111. The differences between the sales localities as designated by Chrysler and the census tract boundaries are negligible for purposes of demographic analysis with respect to the four sales localities. T. 111-12.
The estimated population for Polk County in 1986 was 375,997. T. 116.
P. Ex. C-14 is a computer-generated map. Each dot represents 75 persons, but has been randomly placed within each discrete census tract by the computer, rather than located by actual residence. T. 114-16. With that limitation, P. Ex. C-14 shows that the census tracts associated with the cities of Lakeland and Winter Haven have the greatest concentrations of Polk County population, with secondary centers of population in Bartow, Haines City, and Lake Wales.
From 1980 to 1986, Polk County population increased by 16.9 percent.
T. 119; P. Ex. C-15. For the same period, Florida grew 18.9 percent, which was more than three times the national growth rate. T. 119. Almost all of the census tracts in Polk County experienced gain in population from 1980 to 1986.
T. 118. The areas experiencing the highest net gain in population were the areas near the cities of Lakeland, Winter Haven, Haines City, and Bartow. P. Ex. C-15. The population of the Lake Wales sales locality increased by 13.47 percent. P. Ex. C-22.
From 1986 to 1991, it is projected that the population of Polk County will grow by 11.9 percent, to a population of 420,606. T. 120; P. Ex. C-17. By 1991, the concentrations of population will continue to be in the same areas of concentration as in 1986. P. Ex. C-16; T. 120. The areas expected to have the greatest population gains are those near Lakeland, Winter Haven, Haines City, and Bartow. P. Ex. C-17.
Census tracts 143 and 155, which comprise Lake Wales, indicate that Lake Wales itself will not have the same degree of population growth as the other four cities. Compare P. Exs. C-17 and C-7. T. 130-31. The Lake Wales sales locality is nonetheless expected to grow from about 35,447 persons to 38,887 persons from 1986 to 1991, a gain of about 9.7 percent. P. Ex. 0-22. A major portion of the growth of the Lake Wales sales area is expected to be in census tracts 154 and 156, which are southeast of the City of Lake Wales, as well as to the east. T. 129-132; P. Ex. C-22.
The same demographic pattern is shown by analyzing the distribution and estimated change of households in Polk County. From 1980 to 1986, the number of households in Polk County increased by 21.12 percent, and the number is expected to increase by 15.3 percent by 1991. Areas nearest Lakeland and Winter Haven, followed by Haines City, and Bartow, showed the greatest concentration of gain in number of households in the 1980 to 1986 period, and are expected to see the greatest gains by 1991. P. Exs. C-18, C-19, C-20, and
C-21; T. 122-24. However, households in the Lake Wales sales locality increased by 18.3 percent in the period 1980 to 1986, and the locality is expected to grow from about 13,487 households in 1986 to 15,321 households in 1991, an expected gain of 13.6 percent. P. Ex. C-22.
New vehicle dealers all over Polk County advertise the sale of their new vehicles in the Lake Wales telephone directory. T. 89. At least one dealer, the Respondent, also advertises in telephone directories in other cities in Polk County, T. 375, and it is inferred that other dealers also advertise in such directories.
The Lakeland Ledger is a newspaper published in Lakeland that is circulated throughout all of Polk County. T. 89-90. One new vehicle dealer advertises in the Lakeland Ledger, T. 373, and it is inferred that competitor dealers also advertise in the Lakeland Ledger.
At least one new vehicle dealer advertises by radio that reaches all of Polk County, T. 374, and it is inferred that other dealers advertise by radio as well.
With the exception of a few new vehicle dealerships in nearby Fort Meade, Haines City, and Frostproof, all new vehicle dealerships in Polk County that directly compete with the Chrysler line, not including foreign imports, are in and very near the four principal towns designated by Chrysler as the centers of sales localities. T. 97, 99-101; P. Ex. C-35 and 1.
At least one new vehicle dealer in Polk County, the Respondent, sells a significant number of vehicles to purchasers located throughout Polk County,
P. Ex. C-66, and it is inferred that competitor new vehicle dealers do likewise.
Based upon the designation of Polk County by the Bureau of the Census as statistical metropolitan area, the location of the four major market areas within the interior of the county, the travel distances between the centers of those four markets, and the county-wide advertising and marketing behavior of existing new vehicle dealerships, Polk County is an appropriate geographical area to use for consideration of the market for the sale of new vehicles.
Based upon the location of major highways, growth patterns and location of population centers, and location of retail trade centers, Polk County contains four major metropolitan centers for the marketing of new vehicles: Lakeland, Winter Haven, Bartow, and Lake Wales. T. 81-82; P. Ex. C-
Each of these four markets are appropriate for consideration of the market for sale of new vehicles. In particular, the Lake Wales sales locality is an appropriate separate market with respect to analysis of the sale of new vehicles.
Standards for determination of adequacy of representation
"Penetration" is the term used in the marketing of new motor vehicles for the market share of a line of motor vehicles, or the degree of acceptance of that line of motor vehicles by the consumer in a given market area. T. 133-34.
"Industry" means marketing performance of a particular product within a relevant market.
One reliable way of measuring industry is by counting the number of new vehicle registrations in a market area. Such records are available in the official records of the State of Florida, and can be grouped into market areas by post office locality. T. 19-33.
Registrations reflect the vehicles registered to persons located in a given area. The actual sale of the vehicle may have occurred in any area of the country, but is counted by the registered location of the new vehicle. T. 19- 20.
The data presented by the Petitioners concerning new vehicle registrations was reliable. The Respondent did not present any evidence to cause a doubt as to reliability.
Determination of the adequacy of Chrysler's current market share of new motor vehicles in Polk County and the four sales localities of Polk County requires the establishment of a benchmark of adequacy. T. 134, 190-91.
A reasonable benchmark may be established by reference to market behavior in a geographic area that encompasses a broader spectrum of types of dealers and geographic characteristics than Polk County alone. T. 134. The benchmark geographic market areas proposed by the Petitioners are the Orlando zone and the United States. T. 134-36.
Use of registrations performance in the United States for purposes of comparison to smaller markets is a standard practice in the new vehicle industry. T. 136.
The Orlando zone is all of the State of Florida with the exception of the counties west of the Apalachicola River. T. 140. The Orlando zone contains only territory within the State of Florida. Id.
Fleet sales are defined as the sale of ten or more new vehicles to a single purchaser in a calendar year. T. 137, 44. Fleet sales are not counted as retail sales. Id.
The Orlando zone contains large metropolitan areas that have a substantial amount of rental car and other fleet business; Orlando, Miami, and Ft. Lauderdale are examples. T. 135.
With its heavy fleet sales influence, the Orlando zone is less like Polk County and its four sales localities, and is more like the United States. T. 139, 150; P. Exs. C-36, C-38.
The Lake Wales sales locality is almost exclusively an area of retail sales, with only about 3 percent of the industry of both cars and trucks devoted to fleet registrations. P. Ex. C-36, C-38. Nonetheless, the Lake Wales sales locality is more like the United States than the Orlando zone. Id.
The Bartow sales locality is mixed. It has 17.1 percent of its car registrations in 1986 devoted to fleet registrations, which is the same as the United States, at 17.9 percent. P. Ex. C-36. The truck registrations are quite unlike either the United States or Orlando zone registrations. In 1986, Bartow had 36.6 percent fleet truck registrations, compared to 15.6 percent for the United States and 20.6 percent for the Orlando zone. P. Ex. C-38.
The Winter Haven sales locality is more like Lake Wales. In 1986, its car sales registrations were 7.9 percent fleet, and 13.1 percent fleet for truck registrations. P. Exs. C-36, C-38.
The Orlando zone is less like Polk County and its four sales localities than the United States with respect to imports and other vehicles as a percentage of total truck industry. T. 152; P. Ex. 39. With respect to imports as a percentage of car industry, the Orlando zone and the United States seem to be functionally the same, but each show larger percentages of imports than either Polk County or Lake Wales. P. Ex. C-37.
Based upon the foregoing comparisons of fleet versus retail registrations, as well as comparison of the percentage of imports in the truck industry, it is more appropriate to compare Polk County and Lake Wales with the United States rather than to the Orlando zone.
Comparison to the Orlando zone is still acceptable, however, though less acceptable than comparison to the United States. T. 140, 149, 216, 238-39.
Adequacy of representation in Polk County and in the Lakes Wales sales locality
The retail car industry in Polk County is about 86 percent of the total motor vehicle industry as measured by registrations in Polk County. T.
154. Thus, retail car sales is an important matter to consider in determining the adequacy of Chrysler penetration of the relevant market area.
In 1984, the Chrysler corporate line registrations in Polk County were
8.9 percent of the retail car industry and 7.7 percent of the retail truck industry. The corporate registrations in the United States market 1984 were 9.9 percent and 12.7 percent, respectively. Thus, Chrysler registrations in Polk County lagged behind the United States market by 1.0 percent in cars and 5.0 percent in trucks. P. Ex. C-45.
In 1985, the Polk County registrations for retail cars were 9.0 percent, 2.1 percent less than the United States percentage of 11.1 percent, and for retail trucks were 8.5 percent, which were 4.2 percent less than the United States percentage of 12.7 percent. P. Ex. C-45.
In 1986, the Polk County registrations for retail cars were 7.1 percent, which were 4.0 percent less than the United States percentage of 11.1 percent, and for retail trucks were 7.0 percent, which were 5.0 percent less than the United States percentage of 12.0 percent. T. 154-58; P. Ex. C-45.
Analysis of Chrysler penetration of the Lakeland, Winter Haven, Bartow, and Lake Wales sales localities in Polk County reveal substantially the same loss of market penetration as shown for Polk County as a whole. P. Exs. C- 46, C-47, C-48, C-49, and C-50; T. 159-69.
In particular, registrations of new retail cars in the Lake Wales locality was 0.6 percent less than United States registrations in 1984, was 1.4 percent less in 1985, and was 4.1 percent less in 1986. Registrations of new retail trucks in the Lake Wales locality was 5.3 percent less than United States registrations in 1984, was 5.1 percent less in 1985, and was 4.8 percent less in 1986. P. Ex. C-50. For these years, Chrysler had registrations of 9.9 percent,
11.1 percent, and 11.1 percent for retail cars, and 12.7 percent, 12.7 percent, and 12.0 percent for retail trucks in the United States. Id.
These are significant shortfalls. For example, the 1986 shortfall for retail cars in Polk County of 4.0 percent is, comparatively speaking, a loss of
36 percent of the potential market shown by the United States registrations. That is, United States registrations were 11.1 percent of total car retail industry, while Polk County registrations were only 7.1 percent; the shortfall,
4.0 percent, is 36 percent of 11.1 percent. The other shortfalls both in Polk County and in the Lake Wales sales locality are similar in comparison to the United States potential.
The shortfall of penetration of the Polk County and Lake Wales markets has come during a period when the overall retail trade for cars in those markets has been increasing. In Polk County, the total number of cars registered at retail went from 11,530 to 12,191 from 1984 to 1986, but Chrysler registrations dropped from 1,025 to 866 in the same period. P. Ex. C-45. Similarly, retail truck registrations in Polk County increased in those years from 5,836 to 6,434, but the Chrysler share of those registrations held steady, from 448 to 451. Id. In Lake Wales, retail car registrations increased slightly, from 1,210 to 1,237 from 1984 to 1986, but the Chrysler share dropped from 113 to 86. P. Ex. C-50.
The same analysis of Chrysler penetration of Polk County and the four sales localities was made, but comparisons were made to the Orlando zone statistics for registrations rather than to the United States registrations. P. Exs. C-60 through C-65; T. 171. The results were substantially the same as discussed with respect to the United States registrations.
Retail buyers of new vehicles are motivated to buy due to price, style, and convenience. T. 177. While it is arguable that a round-trip of from
30 to 60 minutes is not a major impediment to a potential buyer of a new vehicle, nonetheless the buyer will very likely first stop at nearer dealerships, and may enter into a contract for purchase before reaching the more distant dealership. Thus, for the initial sale, a travel distance one-way of from 17 to 31 minutes could have a significant impact upon the sales by the more distant dealership. But more important, a buyer will tend to buy as close to home as possible since it is inferred that there may be a number of service trips during the warranty period of a new vehicle. A round-trip of from 30 to
60 minutes to deliver a car for service in the morning and again to pick up the car in the evening would be a significant impediment to sales by the distant dealership. Retail buyers, therefore, are more likely to buy close to home to avoid longer drives for the initial sale and subsequent service trips. T. 178.
Polk County has substantially more Ford and General Motors dealerships than Chrysler dealerships. T. 174; P. Ex. C-35. There are nine Ford dealerships (two Lincoln-Mercury dealers), an apparent fifteen General Motors
dealerships, and only three Chrysler dealerships in Polk County. Id.; T. 99- 100.
Ford has 11 car line outlets represented through a storefront, General Motors has 20 car line outlets, and Chrysler has 8 line outlets in Polk County.
P. Ex. 41; T. 176. Polk County has 7 places to buy a Ford, 6 places to buy a Chevrolet, 2 places to buy a Mercury, 2 places to buy a Lincoln, 4 places to buy a Buick, 4 places to buy an Oldsmobile, 4 places to buy a Pontiac, and 2 places to buy a Cadillac. Polk County has only 2 places to buy a Plymouth, 3 places to buy a Chrysler, and 3 places to buy a Dodge. Id.
Tom Edwards, Inc., asserts that Polk County has comparatively more Chrysler sales outlets than Hills borough or Pinellas Counties. Since those counties have greater populations than Polk County, Tom Edwards, Inc., argues that there are too many Chrysler outlets now in Polk County. Respondent's proposed finding of fact 8. But an outlet in Hillsborough County, for example, typically has a much larger planning potential than an outlet in Polk County. Some have a planning potential of as much as 1,797. T. 305-07. Thus, an outlet in Hillsborough County may well be expected to serve many more people than an outlet in Polk County having a planning potential of only 225. (See the discussion of planning potential ahead.) The record lacks the type of comparative evidence and expert opinion to establish a proper comparative standard between counties.
Thus, Ford and General Motors vehicles are more likely to be purchased than Chrysler vehicles by residents of Polk County due to the comparatively greater number of such dealerships and line outlets. T. 179-80; P. Exs. C-40.
Chrysler Corporation establishes its own concept of the "planning potential" for a given sales locality based upon the size of the market, past sales, and zone penetration. T. 253.
Chrysler Corporation sets its own standards for the size and character of buildings and land that should be a part of a dealership in a sales locality having a particular planning potential. T. 255.
The Respondent's dealership is in the Bartow sales locality. The Bartow sales locality has a planning potential set by Chrysler of 225. T. 257. Chrysler's standard for the square footage of buildings and land for the Bartow sales locality is 40,950 square feet. T. 255. Thus, Respondent's dealership does not meet the standards set by Chrysler for the square footage of buildings and land.
The Chrysler dealership in the Lakeland sales locality similarly has buildings and land of lesser square footage than set by Chrysler as a standard for the planning potential of that locality. T. 259-60.
The Chrysler dealership in the Winter Haven sales locality has adequate land for its planning potential by Chrysler standards, but has inadequate square footage for buildings by Chrysler standards. T. 262-63.
Based upon all of the foregoing, Chrysler Motors Corporation is not being adequately represented in either Polk County or the Lake Wales sales locality by Chrysler dealers located in Polk County, in Florida, or elsewhere in the United States. T. 183-84.
CONCLUSIONS OF LAW
The Division Administrative Hearings has jurisdiction of the subject matter and parties to this proceeding.
The issues in this case are limited by section 320.462, Fla. Stat. (1986), the statute governing the grant of a new motor vehicle dealership license:
The Department shall deny an application for a motor vehicle dealer license in any community or territory where the licensee's presently licensed 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.
Thus, the statute limits the issues in this case to whether there is noncompliance with dealership agreements and whether there is adequate representation in the community or territory. Questions of the qualifications of the applicant, raised by the Respondent in argument in its proposed findings of fact and conclusions of law, are irrelevant.
Tom Edwards, Inc., has complied with its dealership agreement with Chrysler Corporation, and there is no evidence or contention by the Petitioners that any of Chrysler dealers have failed to comply with such dealership agreements. Thus, the only issue in this case is whether Chrysler dealers are providing adequate representation in the community or territory.
The burden of proving inadequate representation is upon the Petitioners.
Polk County is a distinct marketing area for new motor vehicles. See finding of fact 34. Polk County may properly be considered to be the "community or territory" for consideration of adequacy of representation as intended by section 320.642, Fla. Stat. (1986).
The Petitioners have shown that Chrysler dealers are not providing adequate representation in Polk County. See findings of fact 54-73.
Alternatively, the Lake Wales sales locality may be considered to be the relevant "community or territory" since the Petitioners have shown that it is a distinct market for new motor vehicles. See finding of fact 35.
As a second alternative, the Lake Wales sales locality may be considered to be an "identifiable plot not yet cultivated" within the community or territory of Polk County. Bill Kelley Chevrolet, Inc. v. Calvin, 322 So.2d 50, 52 (Fla. 1st DCA 1975); Dave Zinn Toyota v. Department of Highway Safety and Motor Vehicles, 432 So.2d 1320, 1322 (Fla. 3rd DCA 1983).
The Petitioners have shown that Chrysler dealers are not providing adequate representation in the Lake Wales sales locality, either as a "community or territory," or as an "identifiable plot." See findings of fact 54-73.
Evidence submitted by the Respondent concerning the economic impact upon Tom Edwards, Inc., should a new Chrysler dealership be established in Lake Wales may be relevant to show the substantial interest of the Respondent to obtain a formal administrative hearing, but is not relevant to the question of whether the application of the Petitioner should be granted. Stewart Pontiac Company v. Department of Highway Safety and Motor Vehicles, et al., 12 F.L.W. 1880 (Fla. 4th DCA 1987). The Hearing Officer reserved ruling on this issue during the formal administrative hearing. Since the conclusion of the formal administrative hearing, the matter has been conclusively determined by the Stewart Pontiac case, supra. Thus, the objection of the Petitioners to such evidence presented by the Respondent is now granted. Testimony and documents showing economic impact to Tom Edwards, Inc., are admitted into evidence only to show the substantial interest of the Respondent to obtain a formal administrative hearing, but are not admitted into evidence with respect to the central issue of whether the application of the Petitioner should be granted.
Since the Petitioners have clearly shown that all Chrysler lines are inadequately represented both in Polk County and in Lake Wales, it is unnecessary to reach the issue of whether Tom Edwards, Inc., has a substantial interest to obtain a formal administrative hearing with respect to the Petitioner's application for licensure as a Plymouth dealer, a line not carried by Tom Edwards, Inc.
For these reasons, it is recommended that the Department of Highway Safety and Motor Vehicles enter its final order approving the application of Lake Wales Chrysler Plymouth Dodge, Inc., for a license as a dealer of Chrysler, Plymouth, and Dodge automobiles, and Dodge trucks, Lake Wales, Florida.
DONE and ENTERED this 24th day of September, 1987.
WILLIAM C. SHERRILL, JR.
Hearing Officer
Division of Administrative Hearings The Oakland Building
2009 Apalachee Parkway
Tallahassee, Florida 32399-1550
(904) 488-9675
Filed with the Clerk of the Division of Administrative Hearings this 24th day of September, 1987.
APPENDIX TO RECOMMENDED ORDER, CASE NO. 87-0962
The following are rulings upon findings of fact proposed by the parties which have been rejected in this Recommended Order. The numbers correspond to the numbers of the proposed findings of fact as used by the parties.
Findings of fact proposed by the Petitioners:
24 through 28. These proposed findings of fact are true, but are subordinate to findings of fact adopted in the recommended order. These findings of fact, however, are adopted by reference.
38. Cumulative to other findings of fact, and thus not necessary.
42 through 44. These proposed findings of fact are true, but are subordinate to findings of fact adopted in the recommended order. These findings of fact, however, are adopted by reference.
47 through 65. These proposed findings of fact are true, but are subordinate to findings of fact adopted in the recommended order. These findings of fact, however, are adopted by reference.
74, 76, and 77. These proposed findings of fact are true, but are subordinate to findings of fact adopted in the recommended order. These findings of fact, however, are adopted by reference.
81 through 84. The statistics relative to domestic-import mix were significant only with respect to trucks. The truck percentages of penetration in Polk County (24.5 percent and 23.8 percent) were very similar to the percentages for respective penetration in the United States (23.1 percent and
23.4 percent). Lake Wales (20.0 percent and 20.5 percent) was less similar. The percentages in Polk County and Lake Wales for car were not sufficiently similar to either the zone or the United States for any conclusion to be drawn. Thus, the conclusion in proposed finding of fact 84 is rejected.
93 and 94. Cumulative to other findings of fact, and thus not necessary.
95. Cumulative to other findings of fact, and thus not necessary. Failure to meet the national average penetration is, by definition, failure of average penetration.
96 through 100. True, but cumulative to other findings of fact, and thus not necessary. The analysis in these proposed findings of fact simply views the numbers from another perspective. The basic numbers are the same.
101. The third sentence is an issue of law, not fact.
103. The fact that Mr. Edwards could not remember the name of the Chrysler representative is true, but does not persuade the Hearing Officer that his memory of the contact with a Chrysler representative was faulty. R. Ex. 7 clearly shows that the Chrysler Corporation took the initiative in a general sense to encourage Tom Edwards, Inc., to advertise in the yellow pages.
105. While R. Ex. 7 shows that Tom Edwards, Inc., alone paid for yellow pages advertising in the Lake Wales telephone directory in 1985, this is not evidence as to what happened in 1981. Mr. Edwards' testimony that Chrysler paid for such advertising in 1981 is believed rather than an inference to be drawn from 1985 evidence.
Findings of fact proposed by the Respondent:
4. As discussed in the conclusions of law, the qualifications of the applicant to operate a new vehicle dealership are not relevant in this case. Further, the qualifications of the protesting dealership are not relevant either. There is no issue in this case concerning noncompliance with dealership agreements. The only issue is the adequacy of representation in the community or territory as shown by registrations of new Chrysler vehicles, regardless of origin.
This proposed finding of fact is rejected for the reasons stated in finding of fact 63.
This proposed finding of fact is rejected for the reasons stated in finding of fact 66.
That the Respondent has been allowed and encouraged to sell vehicles in Lake Wales, or may be harmed economically if the Lake Wales dealership is established, may be important to show that the Respondent has a substantial interest and is entitled to a formal administrative hearing, but is essentially
irrelevant to the question of whether the Petitioner's application should be approved. The question is whether Polk County and Lake Wales have adequate representation as shown by registrations of new vehicles, regardless of the origin of the sale.
The Respondent did not present any evidence as to the historic comparative sales of General Motors, Ford, and Chrysler, or how such comparative data might be instructive as to the proper number of outlets that should be allowed based upon historic market share. If such evidence exists within the data presented by the Petitioners, it was the Respondent's burden to identify it either by testimony or by argument. It has done neither. Thus, the fifth through ninth sentences of this proposed finding of fact are rejected for lack of citation to evidence in the record.
12. This proposed finding of fact is irrelevant. The performance of Tom Edwards, Inc., is not at issue in this case. The issue is whether there have been an adequate number of registrations in either Polk County or the Lake Wales area. The failure of such registrations to reach an adequate level, as shown by the evidence, is the failure of all Chrysler dealerships, despite what may have been relatively good, or at least acceptable, performance by Tom Edwards, Inc.
COPIES FURNISHED:
Allan M. Huss, Esquire Senior Staff Counsel Chrysler Motors Corporation Post Office Box 1919 Detroit, Michigan 48288
Dean Bunch, Esquire Rumberger, Kirk, Caldwell
Cabaniss & Burke, P.A.
Suite 900, 101 North Monroe Street
Tallahassee, Florida 32301
Frank J. Rouse, Esquire 680 East Main Street Bartow, Florida 33830
Leonard R. Mellon Executive Director
Department of Highway Safety and Motor Vehicles
Neil Kirkman Building Tallahassee, Florida 32399-0500
Charles J. Brantley, Director Division of Motor Vehicles Department of Highway Safety
and Motor Vehicles Neil Kirkman Building
Tallahassee, Florida 32399-0500
Enoch Jon Whitney, Esquire General Counsel
Department of Highway Safety and Motor Vehicles
Neil Kirkman Building Tallahassee, Florida 32399-0500
| Issue Date | Proceedings |
|---|---|
| Sep. 24, 1987 | Recommended Order (hearing held , 2013). CASE CLOSED. |
| Issue Date | Document | Summary |
|---|---|---|
| Nov. 10, 1987 | Agency Final Order | |
| Sep. 24, 1987 | Recommended Order | Petitioner's application for a dealership license is approved because petitioner proved that Chrysler lines are inadequately represented in Polk County and Lake Wales. |
