STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

CROWN AUTO DEALERSHIPS, INC., ) d/b/a CROWN JAGUAR, )

)

Petitioner, )

)

vs. ) CASE NO. 96-4657

)

JAGUAR CARS, a division of )

FORD MOTOR COMPANY, )

)

Respondent. )

)

RECOMMENDED ORDER OF DISMISSAL

1. On October 16, 1996, the Respondent (Jaguar) filed a Motion to Dismiss Complaint in this case. On October 23, 1996, the Petitioner (Crown) filed a Response to Motion to Dismiss. The Motion to Dismiss Complaint was heard on October 29, 1996. On November 5, 1996, Jaguar filed its Supplemental Memorandum in Support of Motion to Dismiss Complaint, and Crown's response was filed on November 8, 1996. All of the written and oral arguments have been considered. (The Department presented no arguments, either written or oral, to indicate its position.)

   
   

2. Crown's Complaint was filed under Sections 320.641 and 320.699, Fla. Stat. (1995). It alleged that, by letter dated July 1, 1996, Jaguar gave Crown notice of its intent to change the "geographic Area of Primary Sales Responsibility ("AOR") that has been assigned to [Crown's] dealership." Crown further alleged that the change in its AOR constituted a change in the Dealer Agreement between Jaguar and Crown in that it would change Crown's market and allegedly enable Jaguar to add another dealership in Crown's market area assigned by the Dealer Agreement. Finally, Crown alleged that Jaguar did not follow the procedures for modifying the Dealer Agreement set out in Section 320.641(1)(a), Fla. Stat. (1995).

   
   

3. Jaguar's Motion to Dismiss Complaint is based primarily on the arguments (1) that the Dealer Agreement does not limit Jaguar's ability to add dealerships and (2) that a change in Crown's AOR is not a modification of the Dealer Agreement.

   
   

4. The validity of Jaguar's arguments turns on whether the Dealer Agreement is clear and unambiguous so as to preclude Crown's extrinsic evidence to prove the contrary under the parol evidence rule. The Dealer Agreement states in part: "The Company [Jaguar] hereby appoints the Dealer [Crown] as a non- exclusive authorized dealer in Jaguar Products at the Dealership Facilities." (Emphasis added.) This appointment clearly does not make Crown the exclusive authorized Jaguar dealer in its location. See BMW of North Amer., Inc., v. New Motor Vehicle Board, et al., 162 Cal.App.3d 980 (Cal. 3d Ct. App. 1984); Kinn v. Coast Catamaran Corp., 582 F.Supp. 682 (E.D. Wis. 1984).

5. It seems clear that, if Jaguar was agreeing not to add dealerships within a certain distance of Crown, notwithstanding the clear language of the non-exclusive appointment, the Dealer Agreement would say so explicitly. Yet, nowhere in the Dealer Agreement does Jaguar agree not to add dealerships within a certain distance of Crown.

   
   

6. Crown makes several arguments why the Dealer Agreement should not be viewed as being clear and unambiguous.

   
   

7. First, Crown proposes that the "non-exclusive" appointment was intended to convey only that Crown would be permitted to sell another automobile line- make's products "at the Dealership Facilities." In a Performance Agreement, which is incorporated in the Dealer Agreement, Crown agreed to build a new dealership facility and to "design and construct an exclusive Jaguar sales and service wing." However, the Performance Agreement also contemplated that Crown could use the "exclusive Jaguar sales and service wing" to sell and service the automobiles of other line-makes, for it included the caveat that, should Crown do so, Crown's Jaguar vehicle allocation would be adjusted. But it is concluded, as a matter of law, that the provisions in the Performance Agreement for "an exclusive Jaguar sales and service wing" do not create ambiguity as to the meaning of the appointment of Crown "as a non-exclusive authorized dealer in [Jaguar Products] at the Dealership Facilities." [Emphasis added.]

   
   

8. Second, Crown proposes that Article 7 of the Standard Provisions of the Dealer Agreement creates ambiguity as to the meaning of the appointment of Crown "as a non-exclusive authorized dealer in Jaguar Products at the Dealership Facilities." Article 7.2 provides:

   
   

   Dealer acknowledges and agrees that the Company has appointed Dealer as an authorized Dealer in Jaguar Products at the Dealership Facilities for the primary purpose of selling and servicing Jaguar Products in the market in which Dealer is located (which, in the absence of a more specific definition, shall for the purposes of this Agreement mean the geographic area in which Dealer is located and its immediate environs. While nothing in this Agreement limits Dealer as to the geographic area into which, or the persons to whom, Dealer may sell Jaguar Products, Dealer acknowledges

   that it has assumed the obligation of selling and servicing Jaguar Products in [its] market.

   
   

   [Emphasis added.] While Article 7.2 refers to Crown's "market," it does not indicate in any way that Crown's market was intended to be exclusive. To the contrary, it refers to Crown as "an authorized Dealer" in its market, not as the authorized dealer in the market. Similarly, while Article 7.3 requires that a dealer "use its best efforts to achieve the best sales performance possible in the market it has been appointed to serve," it also alludes to the existence of "certain multi-dealer markets" and provides that performance of a dealer in those markets will be evaluated based on a dealer's penetration "in that portion of its market which the Company determines is most conveniently served by Dealer

   . . .

9. Finally, Crown proposes that the New Vehicle Allocation System in the Dealer Agreement creates ambiguity as to the meaning of the appointment of Crown "as a non-exclusive authorized dealer in Jaguar Products at the Dealership Facilities." Crown argues that the New Vehicle Allocation System ties into Article 7 of the Standard Provisions and defines Crown's "market" more specifically as a 75-mile radius from Crown's facility. To the contrary, by its terms, the "Seventy- Five Mile Radius Rule" in the New Vehicle Allocation System relates only to the new vehicle allocation computation. But even if it defined Crown's "market," it would do nothing to make that "market" any more exclusive than Article 7 of the Standard Provisions does.

   
   

10. In conclusion, the Dealer Agreement clearly does not make Crown the exclusive authorized Jaguar dealer in its location. To the contrary, it appointed Crown "as a non-exclusive authorized dealer in Jaguar Products at the Dealership Facilities." (Emphasis added.) If Jaguar was agreeing not to add dealerships within a certain distance of Crown, the Dealer Agreement would say so. There being no ambiguity in the Dealer Agreement, the parol evidence rule precludes Crown from alleging and proving the contrary by use of extrinsic evidence. See BMW of North Amer., Inc., v. New Motor Vehicle Board, et al., supra; Kinn v. Coast Catamaran Corp., supra.

    
    

11. It also is clear from the Dealer Agreement that a change in Crown's AOR has no impact whatsoever on the new vehicle allocation computation under the New Vehicle Allocation System. (Indeed, Crown makes no allegation that it does.) The only change in the Dealer Agreement effected by the intended change in Crown's AOR would be to [reduce] the extent of Crown's sales and service obligations under Article 7 of the Standard Provisions of the Dealer Agreement. It is concluded as a matter of law that such a [reduction] in Crown's sales and service obligations cannot "[adversely] alter the rights or obligations of a motor vehicle dealer under an existing franchise agreement or will substantially impair the sales, service obligations, or investment of the motor vehicle dealer" so as to require Jaguar to follow the procedures for modifying the Dealer Agreement set out in Section 320.641(1)(a), Fla. Stat. (1995). [Emphasis added.] (Again, Crown makes no allegation that it does.)

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

the final order dismissing Crown's Complaint.

RECOMMENDED this 18th day of December, 1996, in Tallahassee, Florida.

J. LAWRENCE JOHNSTON, Administrative Law Judge

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

(904) 488-9675 SUNCOM 278-9675

Fax Filing (904) 921-6847

Filed with the Clerk of the Division of Administrative Hearings this 18th day of December, 1996.

COPIES FURNISHED:

Loula M. Fuller, Esquire Walter E. Forehand, Esquire Myers, Forehand and Fuller

402 Office Plaza Drive Tallahassee, Florida 32301

Dean Bunch, Esquire Cabaniss and Burke, P. A. 909 East Park Avenue Tallahassee, Florida 32301

Michael J. Alderman, Esquire Department of Highway Safety

and Motor Vehicles

Neil Kirkman Building, Room A-432 Tallahassee, Florida 32399-0500

Charles J. Brantley, Director Division of Motor Vehicles Department of Highway Safety

and Motor Vehicles

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

Enoch Jon Whitney General Counsel

Neil Kirkman Building Tallahassee, Florida 32399-0500

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within 15 days from the date of this Recommended Order of Dismissal. Any exceptions to this Recommended Order of Dismissal should be filed with the agency that will issue the final order in this case.

Docket for Case No: 96-004657

Orders for Case No: 96-004657