4

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

ROBERT E. WOOD, )

)

Petitioner, )

)

vs. ) CASE NO. 80-286

) FLORIDA DEPARTMENT OF STATE, )

)

Respondent, )

and )

)

DR. DONALD E. JOHNSON, )

)

Intervenor. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its designated Hearing Officer, Michael Pearce Dodson, held a final hearing in this case on April 18, 1980, and on September 4, 1980, in Fort Lauderdale, Florida. The following appearances were entered:

APPEARANCES

For Petitioner: Stephen J. Finta, Esquire

524 South Andrews Avenue, Suite 302 Fort Lauderdale, Florida 33301

For Respondent: William J. Gladwin, Jr., Esquire

Assistant General Counsel Secretary of State, The Capitol Tallahassee, Florida 32301

For Intervenor: Anthony J. Scremin, Esquire

37 Northeast 26th Street Miami, Florida 33137

These proceedings began on February 12, 1980, when the Petitioner wrote a letter to the Secretary of State to protest the application of Dr. Donald E. Johnson for the use of a corporate name, Air Unlimited, Inc. In response to that letter, the Department of State forwarded the matter to the Division of Administrative Hearings on February 19, 1980, for the assignment of a Hearing Officer and the scheduling of a final hearing.

The final hearing began on April 18, 1980, and after a continuance, was concluded on September 4, 1980. As its witnesses the Petitioner presented Edward Conrad Sawyer, Esquire and Robert E. Wood, and offered Exhibits 1-5 which were received into evidence. The Department of State presented Ms. Lettie Sims as its witness and offered Exhibits A-C which were received into evidence. The Intervenor-Respondent presented himself as his witness and offered Intervenor's Exhibit 1 which was received into evidence.

After the commencement of the hearing, Dr. Donald E. Johnson moved to be allowed to intervene in these proceedings. Even though the Motion was not timely 1/ and a proper petition was not filed, he was allowed to intervene because it is the validity of his application which is at issue here.

FINDINGS OF FACT

1. Prior to December 5, 1979, Robert E. Wood was incorporated under the name of Air Unlimited, Inc., to operate an aircraft fixed base operation at the Opa Locka Airport. He purchased the company in January or February 1979 but failed to inform the Department of State to mail correspondence concerning the company's registration to his address.

   
   

2. In the course of operating Air Unlimited, Mr. Wood sold a Cessna 172 to Dr. Johnson. There is a dispute between the parties over whether or not the plane was sold as new or as used. That dispute remains unresolved today.

   
   

3. Dr. Johnson through is business dealings with Air Unlimited, Inc., became aware that the name Air Unlimited, Inc., was being used by an aircraft servicing company in Dade County. The company as operated by Mr. Wood and known by Dr. Johnson provides fueling, repair, rental, and other aircraft services. Dr. Johnson also knew that considerable good will is attached to the name Air Unlimited, Inc.

   
   

4. The deadline for the submission of Air Unlimited's 1979 annual report was June 30, 1979. Air Unlimited failed to file its report by that date.

   
   

5. On December 5, 1979, the Secretary of State dissolved Air Unlimited as a corporation because it failed to file its 1979 annual report.

   
   

6. On February 6, 1980, at 11:05 a.m. Dr. Donald E. Johnson requested the Secretary of State to reserve for him the name of Air Unlimited, Inc., for a period of ninety (90) days.

   
   

7. At 4:50 p.m. February 5, 1980, Robert Wood sent the overdue Air Unlimited report and back corporate taxes to the Secretary of State. The evidence does not indicate when it was received.

   
   

8. As indicated by Dr. Johnson's own testimony the reason he chose to reserve the name Air Unlimited, Inc., was because it had been in use before, the public knew it, and he thought it would help in his new business of leasing aircraft.

   
   

9. It is the practice of the Department of State that as soon as a corporation is dissolved, its name is immediately available for reservation by a new company.

   
   

   CONCLUSIONS OF LAW

   
   

10. The Division of Administrative Hearings has jurisdiction over the parties and the subject matter of this case. Section 120.57(1) and Section 120.65, Florida Statutes (1979).

    
    

11. Section 607.357, Florida Statutes (1979), requires each domestic corporation to file an annual report on or before July 1 of each year. Air Unlimited, Inc., did not file its report as required.

12. The penalty for failing to file the required annual report is an involuntary dissolution of the corporation by an order of the Secretary of State. Section 607.271(2)(a), Florida Statutes (1979). Such an order dissolving Air Unlimited, Inc., was entered on December 5, 1979. If the name of the dissolved corporation has been lawfully assumed by another company the dissolved corporation on reinstatement will be required to choose a new name before it can be reinstated. Section 607.271(5), Florida Statutes (1979).

    
    

13. By the operation of Section 607.271 and as a result of its failing to file its annual report, Air Unlimited, Inc., lost the right to use that name on December 5, 1979.

    
    

14. The reservation of corporate names is governed by Section 607.027, Florida Statutes (1979) which provides in Subsection 1 that:

    
    

    1. The exclusive right to the use of a corporate name may be reserved by any person or corporation, foreign or domestic, by filing with the Department of State an application, executed by the applicant, to reserve a specified corporate name. If the Department of State finds that the name is available for corporate use, it shall reserve the same for the exclusive use of the applicant for a period of 120 days, and the reservation may be renewed.

It further provides in Subsection 3 that:

The Department of state may revoke any reservation if, after a hearing, it finds that the application therefor or any transfer thereof was not made in good faith.

Dr. Johnson's reservation of the name Air Unlimited, Inc., should be revoked as it was not made in good faith. The evidence shows that he knew the name of Air Unlimited, Inc., was in use by a business in the same field in which he intended to operate. It also shows that he chose the name in order to appropriate the good will associated with it. Even aside from his continuing dispute with Robert Wood over the Cessna sale, the foregoing facts indicate that Dr. Johnson is not entitled to reserve the name under the provisions of Section 607.027, Florida Statutes (1979).

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the State of Florida, Department of State revoke the reservation of the corporate name, Air Unlimited, Inc., by Dr. Donald E. Johnson.

DONE AND ENTERED this 20th day of November 1980 in Tallahassee, Florida.

MICHAEL PEARCE DODSON

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 26th day of November 1980.

ENDNOTE

1/ See Section 28-5.07, Florida Administrative Code.

COPIES FURNISHED:

Stephen J. Finta, Esquire

524 South Andrews Avenue Suite 302

Fort Lauderdale, Florida 33301

William J. Gladwin, Jr., Esquire Assistant General Counsel Secretary of State

The Capitol

Tallahassee, Florida 32301

Anthony J. Scremin, Esquire

37 Northeast 26th Street Miami, Florida 33137

Docket for Case No: 80-000286

Orders for Case No: 80-000286