STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

HAP'S CYCLE SALES, INC., )

d/b/a BOMBARDIER CAN-AM )

FRANCHISE DEALER, )

)

Petitioner, )

)

vs. ) CASE NO. 81-1498

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

)

Respondent, )

and )

)

BREMAS CYCLES, )

)

Intervenor. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, P. Michael Ruff, held a formal hearing in this cause in Sarasota, Florida.

APPEARANCES

For Petitioner: Albert Poneleit, pro se

Hap's Cycle Sales, Inc. 2530 17th Street

Sarasota, Florida 33580

For Intervenor: Douglas Rickey, Jr., pro se

Bremas Cycles

5715 Pinkney Avenue

Sarasota, Florida 33583

Hap's Cycle Sales, Inc., has filed an application for a dealer's license to sell motorcycles manufactured by Bombardier Corporation (Can-Am motorcycles) .

A protest was received by the Dealer License Supervisor of the Division of Motor Vehicles regarding the issuance of a new Can-Am motorcycle franchise to the Petitioner, and thus a formal proceeding was initiated pursuant to Section 320.642, Florida Statutes (1979). The issue to be resolved herein is whether presently licensed franchised dealers, if any, have complied with franchise agreements in providing adequate representation in the community or marketing territory for the manufacturer.

The Petitioner presented two witnesses and one exhibit and the Intervenor presented two witnesses and three exhibits. At the conclusion of the proceedings the parties were afforded the opportunity to file proposed findings

of fact and conclusions of law, and although they elected to avail themselves of that opportunity, no such pleadings have been filed.

FINDINGS OF FACT

1. The Petitioner, Hap's Cycle Sales, Inc., is a motorcycle dealer with many years of experience in the retail sales of motorcycles and related parts and accessories in the Sarasota, Florida, area. It is a dealer in Honda motorcycles, which are a high-sales-volume item. Its sales of Hondas run 500 to 600 units per year. Hap's proposes to sell Bombardier Corporation Can-Am "dirt bikes" as essentially a "sideline" or minor portion of its marketing effort. This is because the Can-Am bike is an offroad specialized vehicle appealing to a relatively narrow segment of the motorcycle-purchasing public. The Petitioner's President, Mr. Poneleit, believes, based upon his long experience as a dealer, that he can sell 15 to 18 Can-Am bikes per year.

   
   

2. Mr. Poneleit was approached by Mr. Bert Swanson, the regional sales manager for Bombardier Corporation in January, 1981. Mr. Swanson on behalf of his company was seeking a new dealer for the Sarasota area, and upon negotiating with the Petitioner, the Petitioner agreed to become a dealer for Bombardier Corporation, selling the Can-Am dirt bike. With the support of Bombardier Corporation, the Petitioner then filed the subject application for a license. The Petitioner has contracted with Bombardier Corporation, through Mr. Swanson, to represent them as a dealer beginning in February, 1981, and the Petitioner has ordered the agreed and requisite number of motorcycles and related parts from that franchisor. The Petitioner is of the belief that the Sarasota area involved herein can only support one-such specialized motorcycle dealer.

   
   

3. The testimony of Mr. Swanson corroborates the Petitioner's view that the Sarasota area will only support one Can-Am dealer. Mr. Swanson, whose company was in need of a dealer, contracted with the protestant, Bremas Cycles and Douglas Rickey, for a franchise during 1980. That contract expired October 31, 1980, having been entered into November 1, 1979. Bremas, the original franchise dealer and protestant herein, was not an active dealer in that it ordered no cycles or parts as required, during the course of the year during which its franchise contract was in effect. When that contract expired, Bombardier, needing a more active dealership in the Sarasota area, negotiated with, and arranged for the Petitioner to become the Bombardier Can-Am motorcycle dealer. Thee Petitioner, after the contract was entered into, ordered the cycles and parts specified in the contract and upon learning of the need for amendment of its license, initiated this proceeding. The testimony of Mr. Swanson shows that it is difficult to assess Bombardier's market share in the Sarasota area because such cycles are "dirt bikes," not licensed as highway vehicles, and thus records of their ownership is scanty. The testimony of Swanson and the Petitioner, established, however, that the Sarasota County area will only support one such specialized dealer.

   
   

4. On April 15, 1980, the Intervenor, Bremas Cycles, became the authorized dealer for Bombardier Can-Am motorcycles. The franchise agreement was entered into with Mr. Bert Swanson who informed Mr. Rickey of Bremas that his company preferred having a small dealer like Rickey who would represent Can-Am properly. Bremas was approved for the Borg-Warner credit floor plan, but because the floor plan terminated in June, 1980, Mr. Swanson and Mr. Rickey agreed that Rickey could wait until the 1981 floor plan period began before having to order motorcycles. It was also agreed that Bremas and Rickey would act as a dealer, service and parts outlet during the interim before the new floor plan period began. Mr. Rickey contacted Mr. Swanson on several occasions attempting to buy

   fewer machines than the 5 units required by the company policy and contract, but was refused the machines. He learned, however, that in December, 1980, the company had shipped a motorcycle to a private individual who had purchased it directly through Swanson. It should be pointed out, however, that the contract and dealer franchise agreement between Rickey and Bombardier, Inc., had expired as of October 31, 1980. Mr. Rickey, in reliance on Mr. Swanson's verbal assurances of Bombardier's approval of his ordering cycles in December, 1980, on the "new floor plan year," borrowed money for that purpose. Mr. Rickey did not realize that his contract expired on October 31, 1980, and subsequent to that expiration date Mr. Swanson, on behalf of Bombardier, contracted with the Petitioner for the Petitioner to be the Bombardier Can-Am motorcycle dealer in Sarasota County. Mr. Rickey objects that he has not been informed by any communication from Bombardier that he is no longer an authorized Can-Am dealer, and indeed still receives sales information from Bombardier. Near the conclusion of his testimony Mr. Rickey quite candidly stated that he did not challenge the Petitioner's right to the dealership and was no longer actually interested in the dealership. He merely wanted to demonstrate to the Department what he considered to be shabby treatment by the manufacturer licensee in the hope that sanctions might be imposed. He ultimately decided that he did not dispute the right of the Petitioner to be licensed, however.

   
   

   CONCLUSIONS OF LAW

   
   

5. The Division of Administrative Hearings has jurisdiction over the subject matter of, and the parties to, this proceeding. See Section 120.57(1), Florida Statutes (1979)

   
   

6. Section 320.642, Florida Statutes (1979) , makes it incumbent on the manufacturer and its prospective franchisee (the Petitioner) to prove that dealerships in this community of Sarasota for which the license is sought are not providing adequate representation for the manufacturer in that community or territory. This precondition for licensure has been further refined by agency policy accepted by the courts in Florida as evidenced by the opinion in Southside Motor Company, etc. v. Askew, 332 So.2d 613 (Fla. 1976). Pursuant to this refinement to licensure conditions a manufacturer is allowed a grace period to replace an on-going dealer located at a "dealer point" and this replacement of a dealer within the one-year grace period referred to in that decision is not considered new licensure subject to the statutory scheme expressed in Section 320.642, supra.

   
   

7. Thus, the replacement of dealers by a manufacturer occurs outside the confines of this statutory section if it occurs within one year of the loss of the former dealership's franchise with the manufacturer. If that policy is applied to the current situation the grace period began to run when the franchise or dealer agreement with Bremas Cycles expired October 31, 1980, and the record establishes that the manufacturer, Bombardier, contracted with Mr. Poneleit and Hap's Cycles to have that entity, the Petitioner, represent it as the sole dealer in the Sarasota County area some time during the following month of December, 1980. Thus, this situation is within the rationale enunciated in the Southside decision, supra. The facts found above demonstrate that this is a replacement dealer situation and not an instance of a manufacturer supporting and contracting with and attempting to have licensed a brand new or additional dealer where no dealer existed before, at least within one year. Thus, Section 320.642, Florida Statutes (1979) , need not be invoked by the Petitioner or the Respondent Department and is actually inapplicable.

8. Notwithstanding the above conclusion, even if this were not a "replacement dealer" situation, there is no question that the unrefuted evidence in the record establishes that the previous dealer, i.e., Bremas Cycles, was providing inadequate representation to the manufacturer since it was not buying the required number of cycles and parts. Although, it must be conceded that the manufacturer's policy and practice in dealing with Bremas in terminating its dealership without notice is open to inquiry, that inquiry is properly the province of another forum. The fact remains that Bombardier, Inc., was not having its cycles marketed by the previous dealer, Bremas, and is having a satisfactory relationship and adequate representation in the Sarasota County market area with the Petitioner. Further, it must be borne in mind that at the close of the evidence the Intervenor agreed that the Petitioner is entitled to the dealership, but rather simply wanted to point out to the Department that the practices of the manufacturer licensee herein may be the proper subject of inquiry. In short, there has been shown to be no previously adequate representation of Bombardier Can-Am motorcycles in the Sarasota County market and indeed no other active dealer presently, except the Petitioner. The small number of these cycles which are marketed or expected to be marketed in the Sarasota County area each year due to their rather esoteric nature and use as dirt bikes, render it highly unlikely that more than one dealer could share the market for such cycles. In view of the fact that representation was shown to be inadequate prior to the entry of the Petitioner into the market, and inasmuch as he is merely replacing the previous dealership, the Petitioner should be allowed to actively operate the franchise dealership for Bombardier Can-Am motorcycles.

   
   

9. Finally, the purpose of Section 320.642, Florida Statutes (1979) , was to furnish dealers with protection against unfair treatment by the manufacturer/franchisor. See Plantation Datsun, Inc. v. Calvin, 275 So.2d 26 (Fla. 1st DCA 1973). With that purpose in mind, there has been no clear and concrete evidence which would demonstrate that the action taken by Bombardier in opening a replacement dealership with the Petitioner actually involved unfair treatment of the existing dealer, Bremas, since the evidence is unrefuted that Bremas never did order the parts, supplies, and motorcycles it was required to under its agreement, albeit with extenuating circumstances.

RECOMMENDATION

In consideration of the foregoing Findings of Fact and Conclusions of Law, the candor and demeanor of the witnesses, and the pleadings and arguments of the parties, it is therefore

RECOMMENDED:

That the application of Hap's Cycles Sales, Inc., d/b/a Bombardier Can-Am Franchise Dealer for licensure as a Bombardier Can-Am motorcycle dealer in Sarasota, Florida, be GRANTED.

DONE and ENTERED this 22nd day of October, 1981, in Tallahassee, Florida.

P. MICHAEL RUFF, 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 22nd day of October, 1981.

COPIES FURNISHED:

Mr. Douglas Rickey, Jr. Bremas Cycles

5715 Pinkney Avenue

Sarasota, Florida 33583

Mr. Albert C. Poneleit Hap's Cycle Sales, Inc. 2530 - 17th Street Sarasota, Florida 33580

Mr. John D. Calvin Division of Motor Vehicles

Department of Highway Safety and Motor Vehicles

Neil Kirkman Building Tallahassee, Florida 32301

=================================================================

AGENCY FINAL ORDER

=================================================================

STATE OF FLORIDA

DEPARTMENT OF HIGHWAY SAFETY AND MOTOR VEHICLES DIVISION OF MOTOR VEHICLES

In Re: Application of Hap's Cycle )

Sales, Inc., d/b/a Bombardier ) CASE NO. 81-1498 Can-Am, to Act as a Bombardier )

Can-Am Franchised Dealer )

)

FINAL ORDER

This matter having come on for consideration upon the Recommended Order of the Hearing Officer, to which the interested parties have made no exceptions, written or otherwise; and upon consideration of the Recommended Order of the Hearing Officer and the record in this matter, the Director hereby adopts and incorporates by reference only that portion of the findings of fact and conclusions of law set forth in the Recommended Order dated October 22, 1981, by Hearing Officer P. Michael Ruff, which finds that the objection to granting the Application of Hap's Cycle Sales, Inc. to act as a Bombardier Can-Am Franchised Dealer was withdrawn at the hearing by Douglas Rickey, Jr., representing Bremas Cycles, and concludes that Section 320.642, Florida Statutes, is inapplicable to this matter. The Director further adopts the Hearing Officer's Recommendation that the application of Hap's Cycle Sales, Inc., d/b/a Bombardier Can-Am Franchised Dealer for licensure as a Bombardier Can-Am motorcycle dealer in Sarasota, Florida, be granted.

It is accordingly,

ORDERED that the Recommended Order of the Hearing Officer, dated October 22, 1981, be and the same is hereby adopted by the Director and incorporated herein by reference only to the extent that it finds the objection to granting the referenced application has been withdrawn and concludes that Section 320.642, Florida Statutes, is inapplicable to this matter and recommends granting the referenced application, and

IT IS FURTHER ORDERED that the application of Hap's Cycle Sales, Inc., d/b/a Bombardier Can-Am, to Act as a Bombardier Can-Am Franchised Dealer in Sarasota, Florida, be and the same is hereby granted.

DONE AND ORDERED at Tallahassee, Leon County, Florida this 23rd day of November, 1981.

JOHN D. CALVIN, Director Division of Motor Vehicles Department of Highway Safety and Motor Vehicles

CERTIFICATE OF FILING

I DO HEREBY CERTIFY that this Final Order has been placed in the official files of the Division of Motor Vehicles this 23rd day of November, 1981.

HENRY C. NOXTINE, Supervisor Dealer License Section

CERTIFICATE OF SERVICE

I HEREBY CERTIFY that a true and correct copy of this Final Order has been mailed this 23rd day of November, 1981 to:

Mr. Douglas Rickey, Jr. Bremas Cycles

5715 Pinkney Avenue

Sarasota, Florida 33583

Mr. Albert C. Poneleit Hap's Cycle Sales, Inc. 2530 - 17th Street Sarasota, Florida 33580

P. Michael Ruff, Hearing Officer Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32301

John D. Calvin

Docket for Case No: 81-001498

Orders for Case No: 81-001498