HEINTZELMAN'S TRUCK CENTER, INC. )
vs. ) CASE NO. 87-5308
Respondent. )
Pursuant to notice, final hearing in the above-styled case was held on March 31, 1988, in Orlando, Florida, before Robert E. Meale, Hearing Officer of the Division of Administrative Hearings.
For Petitioner: Joseph E. Foster, Esquire
Rumberger, Kirk, Caldwell, Cabaniss, Burke & Wechlser, P.A.
By letter dated September 15, 1988, Respondent provided Petitioner with notice of the termination of the dealer agreement under which Petitioner sold trucks manufactured by Respondent.
By letter dated September 22, 1988, the Florida Department of Highway Safety and Motor Vehicles informed Petitioner of its receipt of a copy of the September 15 letter and informed Petitioner of its right to protest the proposed cancellation.
By letter dated October 23, 1988, Petitioner protested the proposed cancellation.
Petitioner presented three witnesses. Respondent presented one witness.
Petitioner offered into evidence 15 exhibits. Respondent offered into evidence
4 exhibits. All exhibits were admitted into evidence, except Petitioner's Exhibit Number 7 as to which ruling was reserved. Petitioner's Exhibit Number 7 is hereby admitted.
Each party filed a proposed recommended order. Treatment accorded the proposed findings of fact is detailed in the Appendix.
Petitioner is a franchised truck dealer for three manufacturers, including Respondent. The parties entered into a three-year franchise agreement on September 17, 1986, which agreement took effect on September 15, 1986 (Dealer Agreement). Under the Dealer Agreement, Petitioner is assigned a 12-county area that includes Polk County, Florida.
In March, 1987, John Drakesmith entered into negotiations with R. N. Heintzelman for the purchase of all of the stock of Petitioner. The negotiations culminated in the execution on July 8, 1988, of an Agreement for Purchase, Sale and Redemption of Stock in Heintzelman's Truck Center, Inc. (Stock Purchase Agreement). The transaction was closed on the same day, and Mr. Drakesmith, as the new owner of Petitioner, assumed the management of Petitioner's business at that time.
The Dealer Agreement provides that, to the extent permitted by local law, Respondent may terminate the agreement prior to its expiration date in the event of "[a]ny change... in the ownership or active management of [Petitioner] from that indicated [as described above], without the prior written consent of [Respondent]."
The Dealer Agreement provides that, to the extent permitted by local law, Respondent may terminate the agreement prior to its expiration date in the event of "[a]ny actual or attempted assignment of this Agreement or any right or obligation hereunder."
Around the end of May, 1987, one of Respondent's regional sales managers learned of the negotiations between Mr. Drakesmith and Mr. Heintzelman. On June 24, 1987, J. L. Brown, Respondent's director of dealer relations, telephoned Mr. Drakesmith at his Ford truck dealership in Cleveland to discuss his impending purchase of the stock of Petitioner. Mr. Drakesmith confirmed that a sale was taking place. Mr. Brown indicated that he and some other representatives of Respondent were going to be in Cleveland and would like to meet Mr. Drakesmith. They tentatively agreed to meet on July 2, 1987.
By letter dated June 24, 1987, Mr. Brown confirmed the conversation of the same day. The letter informed Mr. Drakesmith that the Dealer Agreement "is a personal service agreement which can not be transferred or assigned." Accompanying the letter was an application package for a Western Star franchise.
On July 2, 1987, Mr. Brown, Dennis Trittin, Respondent's parts and service representative, Mr. Roland Smith, Respondent's regional sales manager for the region including Florida, and Richard Dean, Respondent's Great Lakes regional sales manager, met with Mr. Drakesmith at his Cleveland dealership. Respondent's representatives told Mr. Drakesmith that they were looking forward to his marketing their product more aggressively than Mr. Heintzelman had in the past. They discussed Mr. Drakesmith's possible interest in handling Western Star trucks in his Cleveland dealership. Mr. Brown left Mr. Drakesmith with another copy of the application package.
Following the July 2 meeting, Mr. Drakesmith concluded that Respondent was very favorably disposed toward having him as a dealer, although he recognized that he had not yet been formally approved. By letter dated July 8,
1987, Mr. Brown confirmed their July 2 discussion of Mr. Drakesmith's "interest in representing the Western Star product line in Orlando and possibly Cleveland." He added that he was looking forward to receiving the completed documentation "in order to formally complete the application process for the Orlando Dealership."
Mr. Drakesmith mailed the completed application, together with some but not all materials, to Respondent on July 13, 1987. The materials were mailed to Respondent at the address shown in the application as that to which the application should be mailed. Respondent had moved from that address over one year earlier. When the application package was returned to Petitioner a few days later as undeliverable, Mr. Drakesmith had it remailed promptly to Respondent's correct address. The remailed package was never received by Respondent or, if received, lost prior to its delivery to Mr. Brown, who never received it.
Two or three weeks after the closing, Mr. Smith visited Mr. Drakesmith at Petitioner's dealership. At the time, Mr. Heintzelman and his former general manager, Harry Gates, were both gone. The purpose of the visit was for Mr. Smith and Mr. Drakesmith to get acquainted with each other. Sometime after his visit and before September 15, 1987, Mr. Smith told Mr. Brown by telephone that Mr. Drakesmith had taken over Petitioner and was operating the dealership.
Between Mr. Smith's visit in late July and September 15, 1987, Mr. Drakesmith had one or two telephone conversations with Mr. Smith concerning pending orders for trucks that Petitioner had submitted and sales in general. At no time during the visit or telephone calls did Mr. Smith mention the receipt, nonreceipt, or approval of Mr. Drakesmith's application.
In August, 1987, Respondent received an expression of interest from a third party for a dealership including the Polk County area. At the time, Respondent had no dealers in Florida except for a dealer in Jacksonville and Petitioner.
By letter dated September 15, 1987, Mr. Brown gave Mr. Heintzelman, addressed at Petitioner's dealership, notice of the termination of the Dealer Agreement, effective 90 days from the date of the receipt of the letter. The grounds for the termination were that Petitioner had breached the Dealer Agreement by assigning or attempting to assign the agreement and changing its active management or selling or otherwise changing its ownership without Respondent's prior written consent. The letter also stated that Petitioner had violated Florida statutory law by changing its executive management or ownership or assigning the agreement without first giving Respondent written notice and without providing Respondent with the opportunity and information necessary to evaluate and, if appropriate, object to the new owner, manager, or assignee. Copies of the letter were provided to Mr. Drakesmith and the Florida Department of Highway Safety and Motor Vehicles (Department).
Mr. Drakesmith telephoned Mr. Brown on or about September 17 to object to the termination. Mr. Brown explained that he had felt that Mr. Drakesmith had lost interest in the Western Star franchise because he had not bothered to submit his application. When Mr. Drakesmith replied that he had sent it in, Mr. Brown said that he had not received it and suggested that Mr. Drakesmith resubmit it.
On September 22, Mr. Drakesmith resubmitted the application materials that he had mailed on July 13 and remailed a few days later. After additional
materials were requested and provided, Mr. Brown offered Petitioner a new dealer agreement with the same territory as in the Dealer Agreement, except that Polk County would be replaced by two less profitable counties.
By letter dated September 22, 1987, the Department informed Petitioner of its receipt of a copy of the September 15 letter and informed Petitioner of its right to protest the proposed cancellation. The letter called Petitioner's attention to Section 320.641(3), Florida Statutes, which was cited in full. The letter also contained a copy of Sections 320.60-320.70, Florida Statutes. The letter informed Petitioner that it had 90 days from the date of the September 15 letter within which to file with the Department a "verified (notarized) complaint" for a determination of an unfair cancellation of the Dealer Agreement.
By letter dated October 23, 1987, Petitioner notified the Department of its protest of the intended cancellation. The letter was signed by Mr. Drakesmith as president of Petitioner. The letter bore only the signature of Mr. Drakesmith, which was not notarized. The letter did not contain any information beneath Mr. Drakesmith's signature and title.
As a result of a conversation between Henry C. Noxtine of the Department and Mr. Drakesmith, Mr. Drakesmith learned that his October 23 letter did not meet the verification requirement.
Lacking the original letter, Mr. Drakesmith had an employee of Petitioner, Eileen C. Mercer, retype the letter and add in the lower right-hand corner of the second page the notation, "Signed before me this Oct. 29, 1987." She then signed beneath the notation and added her notary's stamp showing that her commission expires August 28, 1990. The record does not reflect whether Ms. Mercer applied her notary's seal to the letter. However, at no time did Ms. Mercer require Mr. Drakesmith to swear or affirm that the information in the October 23 letter was true and correct.
Following the above-described additions, the letter was promptly resubmitted to the Department. By letter dated November 24, 1987, the Department transmitted the file to the Division of Administrative Hearings on the sole issue of the propriety of the cancellation of Dealer Agreement. The Department's transmittal letter, a copy of which was sent to and received by Mr. Drakesmith, noted that the Department had received a "verified" complaint from Petitioner.
Mr. Drakesmith personally performs the duties of a general manager at Petitioner's dealership. Mr. Drakesmith is of good moral character. At no time has Respondent filed a verified complaint for a determination of Mr. Drakesmith's moral character.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has no jurisdiction over the subject matter for the reasons set forth below.
A licensee must give at least 90 days' written notice to the dealer and the Department of the licensee's intention to cancel a franchise agreement. Section 320.641(1)(a), Florida Statutes.
During the 90-day period, an affected dealer may file with the Department a "verified" complaint for a determination whether the cancellation is "unfair or prohibited." Section 320.641(3), Florida Statutes.
Whenever authorized or required by law, the verification of a document may be accomplished by an oath or affirmation administered before an officer authorized to administer oaths under Section 92.50, Florida Statutes, or by the signing of a written declaration, typed or printed immediately below the document being verified but above the signature of the person making the declaration, stating: "[u]nder penalties of perjury, I declare that I have read the foregoing [document] and that the facts stated in it are true." Where a verification by information or belief is allowable by law, "to the best of my knowledge and belief" may be added. Section 92.525(1) and (2), Florida Statutes.
Respondent's letter of September 15, 1987, satisfied the requirements of Section 320.641(1)(a), Florida Statutes.
Petitioner's letter of October 23, 1987, was unverified by any standard and did not satisfy the statutory requirement of a verified complaint. The October 29, 1987 addition of Ms. Mercer's signature did not satisfy the statutory requirement of verification. Mr. Drakesmith did not swear or affirm to the contents of the October 23 letter to Ms. Mercer or anyone else at anytime within 90 days after receiving the September 15 letter. The letter does not on its face include even an unverified statement from Mr. Drakesmith that the contents of the letter are true and correct.
In Fiat Motors of North America, Inc. v. Calvin, 356 So.2d 908 (Fla. 1st DCA), cert. denied, 360 So.2d 1247 (Fla. 1978), the court granted a writ of prohibition to prevent the Department from hearing a dealer's claim of an unfair termination. Noting that the dealer had filed only an unsworn letter to the Department within the applicable 90-day period, the court held that the failure to file timely a verified complaint left the Department without jurisdiction or, after the 90 days had run, the power to acquire jurisdiction. The court reasoned that administrative agencies are created by statute and have only such powers as statutes confer.
Jurisdiction may not be conferred upon the Department through Mr. Noxtine's letter of November 24 in which he incorrectly stated that Petitioner's complaint was verified. An agency cannot, by waiver, estoppel, or other means, enlarge its jurisdiction beyond those powers conferred upon it by the legislature.
Swebilius v. Florida Construction Industry Licensing Board, 365 So.2d 1069 (Fla. 1st DCA 1979). Lacking jurisdiction over the subject matter of Petitioner's complaint, the Department has no jurisdiction to entertain questions pertaining to the complaint or the reason why it was not timely filed. Id.
Petitioner's reliance upon Machules v. Department of Administration, 523 So.2d 1132 (Fla. 1988) is misplaced. The Machules court stated that a 20-day appeal period established by rule was not jurisdictional but more analogous to a statute of limitations. Id. at 1133 n.2. Under Fiat, the requirement of filing a verified complaint within 90 days has been held to be jurisdictional. The Machules appeal period was likened to a limitations period, not a jurisdictional requirement, because there was no "explicit statutory authority" for the agency's creation of the limitations period or even the act taken by the agency after expiration of the limitations period. Machules v. Department of Administration, 502 So.2d 437, 444 (Fla. 1st DCA 1986)(Zehmer, J., dissenting),
rev'd, 523 So.2d 1132 (Fla. 1988). Statutes establish jurisdictional time limits; agencies, unless empowered by statute, may not. 502 So.2d 444 n.4.
For these reasons, the undersigned is without jurisdiction to permit Petitioner to amend its complaint by adding a verification, find an estoppel, or otherwise overlook the jurisdictional defect caused by Petitioner's failure to file a verified complaint within 90 days.
The Order Denying Respondent's Motion to Dismiss and Alternative Motion to Strike dated February 10, 1988, relied upon an affidavit from Ms. Mercer dated December 30, 1987. In the affidavit, Ms. Mercer attested to the fact that Mr. Drakesmith swore to her that the facts stated in the October 23 letter were true and correct. At the commencement of the final hearing, the contents of Ms.
Mercer's deposition, which had been taken on February 24, 1988, were disclosed to the undersigned. In the deposition, which has been admitted as Respondent's Exhibit Number 3, Ms. Mercer clarifies her apparent misunderstanding as to what was included in her earlier affidavit and explains that she never swore in Mr. Drakesmith with respect to the October 23 letter.
At the parties' request, the hearing was nevertheless conducted to promote administrative efficiency in the event that the jurisdictional ruling were later rejected or overturned. The remainder of the recommended order, except for the recommendation, assumes arendo that the Department and, thus, the Division of Administrative Hearings has jurisdiction over the subject matter of Petitioner's complaint.
Notwithstanding anything to the contrary in the franchise agreement, a licensee shall not by contract or otherwise prevent, prohibit, or penalize, or attempt to prevent, prohibit, or penalize any dealer or shareholder therein from selling or otherwise transferring all or part of his equity interest in the dealer unless the licensee proves at a hearing that the purchaser or his executive management is not of good moral character. A dealer or shareholder therein who "desires" to sell or otherwise transfer any interest in a dealer shall notify or cause the proposed transferee to notify the licensee in writing of the identity and address of the proposed transferee. A licensee receiving such notice may, within 60 days of receipt, file with the Department a verified complaint for a determination that the proposed transferee is not of good moral character. Failure to do so results in the franchise agreement being deemed amended to reflect the change in ownership. Section 320.643(2)(a), Florida Statutes.
Petitioner may show that the proposed cancellation is unfair. This is a fact question that may require, among other things, consideration of the motivation and subjective intent of the licensee in trying to cancel the franchise agreement. See, e.g., International Harvester Company v. Calvin, 353 So.2d 144 (Fla. 1st DCA 1977).
Petitioner may also show that the proposed cancellation is prohibited. Absent any limiting language in the statute, Petitioner may cite any available authority that it may find for the prohibition of a proposed cancellation. In this case, Section 320.643(2)(a) prevents Respondent from interfering with the subject stock sale and thus prohibits the cancellation of the Dealer Agreement under Section 320.641(3).
Sections 320.60-320.70 were enacted to ensure "fair dealing at all levels between motor vehicle manufacturers, the dealers and the consuming public" by, in part, "redress[ing] the economic imbalance which customarily exists between national manufacturers and local dealers." International
Harvester Company v. Calvin, 353 So.2d 144, 147 (Fla. 1st DCA 1977). A statute enacted to protect the public should be interpreted liberally in favor of the public. See, e.q., State v. Hamilton, 388 So.2d 561 (Fla. 1980).
Section 320.643(2)(a) requires 60 days' prior written notice so that a licensee may object to a proposed stock sale. This requirement should be interpreted liberally in order to give full effect to the public benefit sought to be served in this statute. The requirement of prior notice is not jurisdictional. It is intended only to give notice to the licensee of an impending sale or transfer The event that triggers the Department's jurisdiction is the filing of a verified complaint by the licensee within the 60-day period. The importance of this jurisdictional act is evident by the requirement that the complaint must be verified. No such requirement attaches to the written notice required of the dealer, transferrer or transferee
The notice required by Section 320.643(2)(a) was effected or dispensed on June 24 when Mr. Drakesmith confirmed the impending sale to Mr. Browns who then acknowledged this fact in writing. Respondent's insistence upon additional documentation is irrelevant for present purposes. The statute requires only that Respondent be informed of Mr. Drakesmith's identity and address.
Respondent may use this information only for the purpose of determining whether to challenge Mr. Drakesmith's moral character. Even if Mr. Drakesmith's indentity and address are insufficient for such a determination, Mr. Drakesmith has discharged his statutory obligations. When Respondent failed to file a verified complaint with the Department within 60 days after June 24, it lost its right to prevent the transfer of the stock to Mr. Drakesmith. It is irrelevant under the circumstances that the stock sale was closed prior to the expiration of the 60 days. (The consequence of Respondent filing a verified complaint after the closing but before the 60 days had expired is not raised in this case.)
No purpose is served by Respondent's insistence upon formal written notice of the proposed transfer in this case. In addition to Respondent's actual notice prior to the transfer, the futility of requiring prior written notice is demonstrated by the fact that Respondent could not have prevented the sale. Because Mr. Drakesmith is of good moral character, Respondent could not have withheld approval of the sale in any event.
For the reasons set forth in the preceding paragraph, Respondent's attempt to cancel the Dealer Agreement was also unfair.
Under the circumstances, it is unnecessary to consider whether Respondent's abrupt attempt to cancel the Dealer Agreement was unfair for other reasons requiring consideration of factors such as the sudden availability of another prospective dealer for the Polk County area and Petitioner's historic market penetration, both in its entire territory and, to the extent relevant, Polk County.
RECOMMENDED that a Final Order be entered dismissing the complaint of Petitioner for lack of subject-matter jurisdiction.
ENTERED this 15th day of July, 1988, in Tallahassee, Florida.
ROBERT E. MEALE
Filed with the Clerk of the Division of Administrative Hearings this 15th day of July, 1988.
APPENDIX TO THE RECOMMENDED ORDER IN CASE NO. 87-5308
Treatment Accorded Petitioner's Findings 1-2. Adopted in substance.
10-11. Adopted in substance. 12-13. Adopted.
17. Rejected as irrelevant.
Treatment Accorded Respondent's Findings 1,3,4. Adopted.
2. Rejected as irrelevant.
8,14,16. Rejected as irrelevant.
15. Adopted in substance. 17,18. Adopted.
19-21. Rejected as irrelevant. 22-23. Adopted.
35-37. Rejected as irrelevant.
40-44. Adopted.
52-57. Rejected as irrelevant.
Joseph E. Foster, Esquire Akerman, Senterfitt & Eidson Post Office Box 231 Orlando, Florida 32802
Rumberger, Kirk, Caldwell, Cabaniss, Burke & Wechlser, P.A.
