STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

FLORIDA DIESEL TRUCK AND )

INDUSTRIAL, INC., )

)

Petitioner, )

)

vs. ) CASE NO. 92-7572

) FLORIDA DEPARTMENT OF HIGHWAY ) SAFETY AND MOTOR VEHICLES, )

)

Respondent, )

and )

) MITSUBISHI FUSO TRUCK OF AMERICA, ) INC. )

)

Intervenor. )

)

RECOMMENDED ORDER

Pursuant to written notice, a formal hearing was held in this case before Errol H. Powell, a duly designated Hearing Officer of the Division of Administrative Hearings, on April 20, 1993, in West Palm Beach, Florida.

APPEARANCES

For Petitioner: Steven Warm, Esquire

2000 Glades Road, Suite 208 Boca Raton, Florida 33431

For Respondent: No Appearance

For Intervenor: Dean Bunch, Esquire

Cabaniss, Burke & Wagner, P.A. 851 East Park Avenue Tallahassee, Florida 32301

STATEMENT OF THE ISSUE

The issue for determination at final hearing was whether Florida Diesel Truck and Industrial, Inc., has standing to protest the termination of its franchise agreement with Mitsubishi Fuso Truck of America, Inc.

PRELIMINARY STATEMENT

By letter dated August 31, 1992, but signed and witnessed on September 11, 1992, the President of Florida Diesel Truck and Industrial, Inc. (Petitioner), notified Mitsubishi Fuso Truck of America, Inc. (Intervenor), that Petitioner was terminating its dealership franchise agreement, providing Intervenor with a 30-day written notice of its resignation. By letter dated September 14, 1992,

Intervenor notified Petitioner that its resignation of the franchise was accepted, with the franchise termination effective October 11, 1992. By letter dated October 2, 1992, Intervenor notified the Florida Department of Highway Safety and Motor Vehicles (Respondent) that it had accepted Petitioner's resignation, with the termination effective October 11, 1992.

Petitioner requested a hearing from Respondent by letter dated October 28, 1992, on the issue of an unfair cancellation of the franchise by Intervenor. By certified letter dated November 12, 1992, Respondent notified Petitioner of its intended action to deny Petitioner's request on the basis of Petitioner's lack of standing to protest due to its (Petitioner's) voluntary termination of the franchise. In response, by letter dated December 9, 1992, Petitioner requested a hearing on the issue of standing and indicated that it had received Respondent's certified letter on November 18, 1992.

On December 22, 1992, the matter was referred to the Division of Administrative Hearings. A formal hearing was scheduled on April 20, 1993, pursuant to notice.

At the hearing, Petitioner presented the testimony of one witness and entered 20 exhibits into evidence. 1/ Intervenor presented the testimony of one witness and entered 31 exhibits into evidence.

A transcript of the formal hearing was ordered. Petitioner and Intervenor submitted proposed findings of fact and conclusions of law. The parties' proposed findings of fact are addressed in the appendix to this recommended order.

FINDINGS OF FACT

1. William Dowdy is the President and owner of Florida Diesel Truck and Industrial, Inc. (Petitioner). He owns all of the stock and controls the day- to-day operation of the business. Dowdy bought out his family members' interest in the business.

   
   

2. Petitioner is primarily engaged in industrial, marine and agricultural parts and service.

   
   

3. Dowdy has been working with Petitioner as an administrator for approximately 20 years. He joined Petitioner in 1973 in the accounting office when it was Florida Diesel and Marine Service and was primarily engaged in marine repairs. Dowdy has no actual, hands-on repairing experience with Petitioner of any significance.

   
   

4. In 1989, Mitsubishi Fuso Truck of America, Inc. (Intervenor), was searching for new dealerships, so it initiated contact with Dowdy. Intervenor's branch manager had numerous conversations, regarding a truck franchise, with Dowdy. At that time, Petitioner had two locations: one in Riviera Beach and one in Ft. Pierce. The Riviera Beach location was the original facility, the larger of the two locations, and the main office.

   
   

5. As a result of the talks, in October 1989, Petitioner applied for a dealership. In December 1989, Petitioner entered into an Interim Sales and Service Agreement (Interim Dealer Agreement) with Intervenor, which was the dealership franchise agreement. The Interim Dealer Agreement was for a one-year period (December 1989 to December 1990) only. In order to become an authorized dealer, Petitioner had to comply with the Interim Dealer Agreement. A term and

   condition made a part of the Interim Dealer Agreement and incorporated by reference as "Exhibit B" was that Petitioner would "show a growth rate in the areas of net worth, working capital, retail sales, parts sales, service sales, and show a positive trend towards profitability at the end of this interim agreement." Also, a development plan was entered into setting forth, among other things, an annual minimum sales objective of 25 units or vehicles for 1990.

   
   

6. Petitioner's interim dealership was located at its Ft. Pierce location. Intervenor provided the trucks, through its credit plan, and Petitioner purchased the parts.

   
   

7. As a dealer, Petitioner needed a salesperson but did not have one. Dowdy decided that Petitioner's branch manager in Riviera Beach would double as a salesperson for the dealership in Ft. Pierce. In addition to handling parts and service at the Riviera Beach location, the branch manager was also now a truck and parts salesperson. Needing a full-time salesperson for the dealership, Dowdy continued to search for a salesperson.

   
   

8. Sometime within the contract year, Petitioner hired a full-time salesperson. The salesperson had no truck sales experience but did have automobile sales experience and local contacts which Petitioner felt was an asset. However, because his sales were lacking, the salesperson was replaced.

   
   

9. Intervenor provided Petitioner with assistance during its year of operation. Intervenor's district sales manager met periodically with Dowdy, visited the dealership frequently, assisted with sales and made contacts with customers and potential customers.

   
   

10. In December 1990, at the end of its first year of operation as a dealer, Petitioner received written communication from Intervenor regarding deficiencies, among other things, in the submission of monthly financial statements and the timely payment of accounts. Notwithstanding, in December 1990, Intervenor renewed the Interim Dealer Agreement for a second year from December 1990 to December 1991. Petitioner's profit trend did not indicate to Intervenor that it should offer Petitioner a three-year dealer contract as opposed to a one-year interim dealer contract.

    
    

11. During the second contract period, Petitioner continued to have a salesperson problem. Petitioner replaced its salesperson with someone who had truck sales experience. However, the new salesperson was not selling a satisfactory number of trucks, so he was dismissed. Again, Petitioner's branch manager in Riviera Beach became the Ft. Pierce dealership salesperson.

    
    

12. Additionally, in the second contractual year, on more than one occasion, Petitioner received written communication from Intervenor regarding submission of monthly financial statements and timely payment of accounts. Finally, in December 1991, Intervenor notified Petitioner by written communication that payment for parts shipment would be thereafter on a C.O.D. basis.

    
    

13. In January 1992, Intervenor again renewed the Interim Dealer Agreement for a third year from January 1992 to January 1993. Prior to the renewal, Intervenor discussed increased truck sales with Petitioner and both agreed that increased trucks sales were necessary. A term and condition made a part of the Interim Dealer Agreement and incorporated by reference as "Exhibit B" was that Petitioner agreed to

    1. [S]ell a minimum of fifteen (15) units during the term of this contract.

    2. [S]ubmit monthly financial statements.

    3. [P]ay monthly parts account according to MFTA [Intervenor's] terms.

       
       

14. Prior to the third contractual year, Dowdy had been having financial difficulty, due to his purchase of his family members' interest in Petitioner. However, during the third contractual year, the financial difficulties worsened with the absence of a salesperson which lead to disappointing truck sales.

    
    

15. In March 1992, Intervenor's credit department denied approval for the shipment of a vehicle to Petitioner's dealership because Petitioner had not submitted to Intervenor the 1991 year-end financial statement and monthly financial statement and had not paid prior interest charges. Additionally, in June 1992, Intervenor notified Petitioner by written communication that its floor plan insurance premium was past due, i.e., Petitioner had not paid the premium on its inventory.

    
    

16. Also, in May 1992, because of financial concerns, Petitioner sold its Riviera Beach location. Since Petitioner had no full-time salesperson for its Ft. Pierce location, Petitioner's former branch manager, who had remained with the new Riviera Beach owners, agreed to continue to sell trucks for it. This arrangement continued for approximately two or three months before Petitioner's former branch manager severed his salesperson relationship. Petitioner was without a salesperson. The absence of a salesperson continued to plague Petitioner, which affected its sales and in return, its finances.

    
    

17. In or around late August 1992, Intervenor's district sales manager who had been working with Petitioner during each of the yearly contractual periods, initiated the subject of Petitioner resigning its dealership. They engaged in several discussions on the subject of resignation; however, during those discussions, the subject of Intervenor terminating the dealership franchise came up.

    
    

18. On or about August 31, 1992, Intervenor's district sales manager prepared a letter of resignation for Dowdy's signature. Even though the resignation letter was dated August 31, 1992, it was not presented to Dowdy for his signature until September 11, 1992, when the manager visited Petitioner in Ft. Pierce. On September 11, 1992, Dowdy reviewed the resignation letter, and after discussing it with the sales manager, he signed the letter and had it witnessed. That same day, Intervenor's district sales manager notified Intervenor's manager of dealer operations, who was located at its home office in New Jersey, of the resignation letter being signed, and when he returned to his office in Orlando, the district sales manager gave the resignation to the Regional Vice-President.

    
    

19. Prior to signing the resignation letter, on or about September 3, 1992, Petitioner, with Intervenor's assistance, transferred two of its trucks to another dealer in Broward County. On September 15, 1992, Petitioner, by fax transmission, submitted its tool inventory to Intervenor, and shortly thereafter, Intervenor repurchased the tools from Petitioner.

    
    

20. In a letter dated September 14, 1992, Intervenor notified Dowdy that it had accepted his "voluntary resignation" of the dealership, and included a proviso that the effective date of the franchise termination was October 11,

    1992, 30 days from the date of resignation. The letter was mailed from Intervenor's home office in New Jersey.

    
    

21. The Interim Dealer Agreement provides that any notice to be given under the agreement may be delivered, as it pertains to the case at hand, to the party of the agreement if a sole proprietor, to an officer of the party if a corporation, or may be given by sending the notice by registered mail or tested telex addressed to the principal office of the interim dealer or to Intervenor's principal office. It provides further that notice given as indicated is considered given when delivered or mailed. Intervenor's Dealer Sales and Service Agreement Standard Provisions (Standard Provisions) was incorporated by reference and made a part of the Interim Dealer Agreement. Section X.A. of the Standard Provisions provides that a dealer may terminate the agreement upon 30 days prior written notice to Intervenor. Further, Section X.C. provides that the date of the notice of termination is the date of mailing.

    
    

22. Shortly after signing the letter of resignation, individuals wishing to invest in Petitioner's truck dealership contacted Dowdy. After receiving positive assurances from the investors, Dowdy attempted to rescind the resignation. He forwarded a witnessed letter dated September 18, 1992, to Intervenor by fax transmission requesting that his "voluntary resignation be abated." At that time, he had not received Intervenor's letter of September 14, 1992.

    
    

23. By certified letter dated October 2, 1992, Intervenor notified the State of Florida, Department of Highway Safety and Motor Vehicles (DHSMV) of Petitioner's "voluntary resignation" of its dealership.

    
    

24. In response to Dowdy's letter of September 18, 1992, by letter dated October 9, 1992, Intervenor refused to abate Petitioner's resignation and treated his letter of September 18, 1992, as an application for a new franchise. Intervenor indicated in its response that it was not interested in a new franchise.

    
    

25. On October 21, 1992, Dowdy sent a letter by fax transmission to Intervenor's CEO regarding the resignation letter and his (Dowdy's) plan to reorganize the dealership. The CEO contacted Dowdy the same day by telephone and discussed the low and decreasing market for truck sales in the Ft. Pierce area and whether Dowdy had been coerced or forced to sign the letter of resignation. Responding to the inquiry of coercion or being forced, Dowdy responded that he was neither coerced nor forced to sign the letter of resignation.

    
    

26. Subsequently, however, in a letter dated October 28, 1992, Dowdy informed Intervenor's CEO, among other things, that Intervenor terminated the dealership and that he was requesting a hearing before the DHSMV for unfair cancellation.

    
    

27. By letter dated October 28, 1992, Dowdy requested such a hearing from DHSMV. By letter dated November 9, 1992, Dowdy informed the DHSMV that, among other things, he had signed the "voluntary resignation" prepared by Intervenor, but later changed his mind and requested Intervenor to cancel the "voluntary resignation" on September 18, 1992. By certified letter, dated November 12, 1992, the DHSMV notified Dowdy that its determination was that he lacked standing to protest a termination and that he had 21 days from the service of that letter to request a formal hearing. Dowdy received the DHSMV's letter on November 18, 1992. On December 9, 1992, Dowdy forwarded a letter, bearing the

    same date, by Federal Express to the DHSMV requesting a formal hearing, which was received by the DHSMV on December 10, 1992.

    
    

    CONCLUSIONS OF LAW

    
    

28. The Division of Administrative Hearings has jurisdiction over the subject matter of this proceeding and the parties thereto, pursuant to Section 120.57(1), Florida Statutes. The parties were duly noticed for the formal hearing.

    
    

29. In its proposed recommended order, Intervenor raises a threshold issue as to whether Petitioner's request for a formal hearing was timely. Intervenor contends that the request was untimely. 2/ Petitioner contends that this issue was not specified as an issue by the referring agency, the Department of Highway Safety and Motor Vehicles (DHSMV), was waived in that it was never raised as an issue prior to or during hearing and is, therefore, not a proper issue for determination in this proceeding. Intervenor counters that the DHSMV had no authority to make a factual determination on timeliness and could not limit the issues before the Division of Administrative Hearings and that the issue was not waived in that part of Petitioner's burden is to show that it (Petitioner) made a timely request for a formal hearing.

    
    

30. As challenger to the agency's action, the burden is upon Petitioner to show that this matter is properly before the Division of Administrative Hearings. Consequently, Petitioner must show through the evidence presented that the request for formal hearing was timely.

    
    

31. A timely request for formal hearing would have had to been filed by Petitioner with the DHSMV on December 9, 1993. The evidence is clear that Petitioner prepared and sent its request on December 9, 1993, and that the request was received by the DHSMV on December 10, 1993, which was one day beyond the required day of receipt by the DHSMV. Furthermore, the evidence is clear that Intervenor made no claim of prejudice due to the untimely request. The doctrine of equitable tolling is applicable to the case at hand, and therefore, Petitioner is allowed to pursue its claim in this proceeding. Stewart v. Department of Corrections, 561 So.2d 15 (Fla. 4th DCA 1990); Machules v. Department of Administration, 523 So.2d 1132 (Fla. 1988).

    
    

32. Next, the focal point of this proceeding is whether Petitioner's resignation of its franchise was voluntary. The evidence is overwhelmingly clear that at the time Dowdy, Petitioner's owner and President, signed the resignation letter on September 11, 1992, he believed that the resignation was the correct course of action to take and that Intervenor was not coercing or forcing him to resign the franchise. The fact that Intervenor's district sales manager prepared the resignation letter had little or no effect on Dowdy signing the resignation letter; he and Dowdy had discussed the issue of resignation on several occasions prior to the actual signing of the resignation. Moreover, even though the evidence shows that, subsequent to Dowdy signing the resignation letter, he had a change of mind regarding relinquishing the franchise, the evidence is overwhelmingly clear that Dowdy was not coerced or forced to sign the resignation letter. There is no evidence to support a position that Dowdy's resignation letter was anything other than voluntary. Thus, Petitioner's relinquishment of its dealer franchise, through Dowdy, was voluntary.

    
    

33. Additionally, the parties addressed the issue of whether Intervenor had to accept Petitioner's resignation before it became effective and, if so, whether Intervenor accepted Petitioner's resignation prior to Petitioner

    requesting rescission of the resignation. Intervenor was not required to accept Petitioner's resignation. Looking to the contractual terms of the Interim Sales and Service Agreement (Interim Dealer Agreement) for guidance, it is void of any terms addressing the acceptance of a voluntary relinquishment of a franchise.

    However, the Interim Dealer Agreement does provide that any notice required by the agreement is considered given when delivered or mailed, and the Dealer Sales and Service Agreement Standard Provisions, made a part of and incorporated by reference in the Interim Dealer Agreement, provide that a dealer may terminate the agreement by giving 30 days prior written notice and that the date of the termination is the date of mailing of the notice.

    
    

34. In the instant case, the case of Capriccio Restaurant v. Poinciana Properties, Ltd., 492 So.2d 849 (Fla. 4th DCA 1986), is persuasive. In Capriccio, the parties had agreed in their lease agreement that an option to renew the lease had to be exercised within a specified period, in writing and mailed. The court held that, because the parties to a contract had specified in the contract the method to be given in providing notice of exercising the option in the contract, exercising the option was complete upon using the method agreed upon, i.e., complete upon mailing. In the case at hand, the parties agreed that dealer termination of the Interim Dealer Agreement would be by written notice within a specified time period, that the notice could be delivered or mailed and that the date of the termination would be the date of mailing. Petitioner exercised its option to terminate the Interim Dealer Agreement on September 11, 1992, by signing the resignation letter and delivering it that same day to Intervenor's district sales manager, who in turn delivered it to Intervenor's manager of dealer operations, who in turn forwarded the resignation to Intervenor's main office in New Jersey. In accordance with the holding in Capriccio, supra, the termination of the franchise was complete on September 11, 1994. 3/ Therefore, no requirement was placed upon Intervenor to accept Petitioner's resignation in order to complete the termination.

    
    

35. Hence, the evidence shows that Petitioner lacks standing to request a hearing on a claim of unfair cancellation of a franchise agreement.

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Highway Safety and Motor Vehicles enter

a final order denying Florida Diesel Truck and Industrial, Inc.'s, request for

an unfair cancellation hearing in that it lacks standing for such a request.

DONE AND ENTERED in Tallahassee, Leon County, Florida, this 21st day of March 1994.

ERROL H. POWELL

Hearing Officer

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 21st day of March 1994.

ENDNOTES

1/ Two exhibits represented the testimony of two witnesses in deposition form.

2/ In a post hearing submission, Petitioner objected to this issue being raised after the filing of the parties' proposed recommended order since Petitioner perceived it as not an issue as indicated in the text of this recommended order. Responding to Petitioner's objection, Intervenor addressed Petitioner's objection as a motion to strike.

3/ Assuming that Intervenor's acceptance of the resignation letter was required before it became effective, Intervenor's acceptance was complete upon mailing, which was on September 14, 1992, prior to Petitioner's request to rescind the resignation. Morrison v. Thoelke, 155 So.2d 889 (Fla. 2nd DCA 1963).

APPENDIX

The following rulings are made on the parties' proposed findings of fact: Petitioner's Proposed Findings of Fact

1-5, 10, 11 and 15. Accepted in substance.

6. Partially accepted in substance; and partially rejected as to the last sentence. *

7, 9, 13 and 14. Rejected *

8. Partially accepted in substance; and partially rejected as to why resignation suggested and Intervenor pressing the issue of resignation. *

12. Partially accepted in substance as to Intervenor not agreeing to rescind the resignation and advising Petitioner of same; and remainder rejected.

*

Intervenor's Proposed Findings of Fact

1, 3-17, 19-28, 30-36 and 38-48. Accepted in substance.

2. Rejected. *

18. Partially accepted in substance; and partially rejected as to "bird- dogging." *

29. Partially accepted in substance; and partially rejected as to everything after the word "but." *

37. Partially accepted in substance; and partially rejected as to the last sentence. *

*Rejected as being subordinate to the issues herein, irrelevant to the issues herein, unnecessary, contrary to the evidence, recitation of testimony, argument, or conclusions of law.

COPIES FURNISHED:

Steven Warm, Esquire

2000 Glades Road, Suite 208 Boca Raton, Florida 33431

Dean Bunch, Esquire

Cabaniss, Burke & Wagner, P.A. 851 East Park Avenue Tallahassee, Florida 32301

James E. Magee, Esquire

Reboul, MacMurray, Hewitt, et al 1111 Nineteenth Street N.W. Suite 406

Washington, D.C. 20036

Michael J. Alderman, Esquire Department of Highway Safety

and Motor Vehicles Neil Kirkman Building Room A-432

Tallahassee, Florida 32399-0504

Charles J. Brantley, Director Division of Motor Vehicles

Room B439, Neil Kirkman Building Tallahassee, Florida 32399-0500

Enoch Jon Whitney

Department of Highway Safety and Motor Vehicles

Neil Kirkman Building Room A-432

Tallahassee, Florida 32399-0504

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions to this recommended order. All agencies allow each party at least 10 days in which to submit written exceptions. Some agencies allow a larger period within which to submit written exceptions. You should contact the agency that will issue the final order in this case concerning agency rules on the deadline for filing exceptions to this recommended order. Any exceptions to this recommended order should be filed with the agency that will issue the final order in this case.

Docket for Case No: 92-007572

Orders for Case No: 92-007572