STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF AGRICULTURE AND ) CONSUMER SERVICES, )

)

Petitioner, )

)

vs. ) CASE NO. 96-5463

) SUPERTECH AUTOMOTIVE, INC., )

)

Respondent. )

) DEPARTMENT OF AGRICULTURE AND ) CONSUMER SERVICES, )

)

Petitioner, )

)

vs. ) CASE NO. 96-5539

)

DYNOTECH AUTOMOTIVE, INC., )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, a formal hearing was held in this case on March 20, 1997, at West Palm Beach, Florida, before J.D. Parrish, a designated Administrative Law Judge of the Division of Administrative Hearings.

APPEARANCES

For Petitioner: Lawrence J. Davis

Senior Attorney

Department of Agriculture and Consumer Services

Room 515, Mayo Building Tallahassee, Florida 32399-0800

For Respondents: James R. Merola, Esquire

JAMES R. MEROLA, P.A.

11380 Prosperity Farms Road, Suite 204 Palm Beach Gardens, Florida 33410

STATEMENT OF THE ISSUES

As to Case No. 96-5539, whether the Respondent, Dynotech Automotive, Inc., committed the violations alleged in the administrative complaint dated October 22, 1996; and, if so, what penalty should be imposed. As to Case No. 96-5463, whether Supertech Automotive, Inc. (the alleged successor to Dynotech) is entitled to registration as a motor vehicle repair shop under the provisions of Section 559.904, Florida Statutes.

PRELIMINARY STATEMENT

This matter began in October, 1996, when the Department of Agriculture and Consumer Services (Department) issued an emergency suspension order which summarily suspended the motor vehicle repair shop registration of Dynotech Automotive, Inc. (Dynotech). At the same time the Department issued an administrative complaint that alleged numerous violations of the Florida Motor Vehicle Act which, the Department argued, established Dynotech and its employees had intentionally defrauded the public through dishonest or deceptive means. The allegations of fact were denied by Dynotech and a request for formal proceeding was furnished to the Department on November 13, 1996. This case was then forwarded to the Division of Administrative Hearings on November 20, 1996.

Case No. 96-5463 began on November 8, 1996, when the Department sent Supertech Automotive, Inc. (Supertech), a denial of registration and notice of intent to impose administrative fine which alleged that Supertech had been operating without being registered. Further, the Department maintained that Supertech was formed within hours of, and in response to, the suspension of Dynotech’s registration in order to continue doing business in circumvention of the suspension order. Supertech was allegedly formed by Johnni Angel, the former receptionist/secretary for Dynotech, who coincidentally resides with Theodore Russo, Dynotech’s manager. Supertech requested a formal proceeding and furnished same to the Department on November 13, 1996. This matter was forwarded to the Division of Administrative Hearings for formal proceedings on November 15, 1996.

At the hearing, the parties stipulated that the cases would be tried together in order to expedite the presentation of evidence. The parties further stipulated to specific allegations of the notice of denial and notice of intent to impose administrative fine. Where pertinent to the conclusions reached herein, such stipulations are fully incorporated in the findings of fact below.

The Department presented testimony from Anthony Golino, Donald Bullard, Glen Eakin, Louis Vincent Zauss, Michelle Lint, Michael Baranowsky, Fred Barnsdale, and Johnni Angel. As

applicable, the testimony of these witnesses has been considered as to both cases. The Department’s exhibits, referred to by page number and letters A and B, in the record, have been admitted into evidence. More specifically as to the pages admitted, pages 8, 9-12, 16-17, 18-19, 113-122, 137-149, 196-203 were admitted

without qualification. As to pages 155-174 and 177-195, such pages were admitted with the proviso that, if hearsay, they would not be used to support a finding of fact unless admissible over objection in a civil action or used for the purpose of supplementing or explaining other evidence. In this regard, the Department argued that the statements were not hearsay as they would fall within the admissions exception found at Section 90.803(18)(d), Florida Statutes.

Section 90.803(18), Florida Statutes, provides, in pertinent part:

A statement that is offered against a party and is:

* * *

(d) A statement by the party’s agent or servant concerning a matter within the scope of the agency or employment thereof, made during the existence of the relationship....

In accordance with the foregoing, an agent or employee may make an admission which is admissible against the employer if it concerns “a matter within the scope of the agency” and it is “made during the existence of the relationship.” It is the moving party’s burden to establish both prongs of the admissibility test. In this case, the sworn statements of Brian

Small, page nos. 155-174, and Jeffrey Dewayne Sasnett, page nos. 177-195, do not meet the second prong of the test. The Department has not established that the statements were made during the existence of the employment relationship. Thus, the Department failed to lay the requisite predicate to establish an exception to the hearsay rule. As hearsay, pages 155-174 and 177-195 have only been considered as corroboration of or explanation to other evidence admitted in this cause.

A transcript of the proceedings has not been filed. The parties were granted leave until April 11, 1997, to file their proposed recommended orders. The parties timely submitted proposed orders and such orders have been considered in the preparation of this recommended order.

FINDINGS OF FACT

1. At all times material to the allegations in this matter, Respondent Dynotech was a motor vehicle repair shop registered under the provisions of Section 559.904, Florida Statutes, located at 2240 North Military Trail, West Palm Beach, Florida.

2. At all times material to the allegations of this matter, Respondent Supertech was an applicant for registration as a motor vehicle repair shop charged with doing business without being appropriately registered, which was also located at 2240 North Military Trail, West Palm Beach, Florida.

3. The Petitioner is the state agency charged with the responsibility of regulating and disciplining motor vehicle

   repair shops under Florida law.

   
   

4. At all times material to the allegations in this matter, Theodore (Ted or Teddy) Russo was the president and manager of Dynotech. Mr. Russo’s home address is listed as 1604 Hollyhock Drive, Wellington, Florida.

5. Prior to June 18, 1996, the Department commenced an investigation of Dynotech based upon suspected acts in violation of Chapter 559, Florida Statutes.

6. In furtherance of the investigation the Department sent investigators with three vehicles to West Palm Beach for use in the operation. One vehicle driven by Investigator Tony Golino went to the Dynotech premises on June 18, 1996.

7. After giving Mr. Russo a story about having just inherited the vehicle and being on the way back to New York, Investigator Golino requested an oil change and Dynotech’s free air conditioner inspection.

8. Immediately prior to taking the vehicle to Dynotech, Investigator Golino’s vehicle had been thoroughly evaluated by a certified mechanic for any repair which might be needed to the air conditioning system. The vehicle, a 1989 Buick, checked out with no problems.

9. On June 19, 1996, when Investigator Golino returned to Dynotech to pick up the vehicle, he was charged $358.94 for the requested oil change, the free air conditioner inspection, and

   for an evac and recharge together with an “acculmater.” Of the foregoing work, only a charge of $14.95 was required for this vehicle (the oil change cost).

10. Investigator Golino had been verbally advised that if the evac and recharge were necessary the cost for same would be approximately $105.00 or $110.00. No estimate was given to him for the “acculmater” which was charged.

11. Investigator Golino had not been given any written estimate for the work which was to be performed on the Buick.

12. When the Buick was returned for inspection by the Department, Mr. Bullard found that the oil had been changed and that a new accumulater had been installed.

13. Donald Bullard is a certified mechanic with 30 years of experience. An evac and recharge of the air conditioning system is appropriate if the system is not performing within acceptable standards. The evac and recharge is the process of cleaning the freon in order to allow it to do its work more efficiently. The freon is removed from the vehicle (evac), run through a machine for cleaning, then returned to the vehicle (recharge). This process takes less than an hour. An accumulator is a device which takes moisture out of the vehicle.

14. The Buick driven by Investigator Golino did not need a new accumulator.

15. On June 20, 1996, Jack Hill, another investigator with the Department, took a Plymouth van to Dynotech for an oil change

    and free air conditioner inspection. This vehicle had also been inspected beforehand and had been fully repaired so that it was in proper working order prior to being driven to Dynotech.

16. Dynotech billed Investigator Hill $95.45 for the work performed on the van and alleged that it had added freon to the air conditioning system. No cost should have been billed for the van as a coupon for a free oil change was used. Additionally, the van did not require an evac and recharge nor freon.

17. A third vehicle, a Ford Tempo, was taken to Dynotech by the Department’s investigator Fred Barnsdale on June 19, 1996. Like the others, prior to being driven to Dynotech the Tempo was inspected and evaluated by Mr. Bullard. The air conditioning system worked properly and did not require an evac and recharge.

18. With regard to the Tempo, Dynotech billed for an evac and recharge which were unnecessary.

19. Glen Eakin, Louis Vincent Zauss, and Michael David Baranowsky are certified mechanics formerly employed by Dynotech. All were hired and supervised by Mr. Russo. During their employment with Dynotech, each was instructed by Mr. Russo to perform work which was unnecessary. In some instances customers were billed for work which was not performed. In some instances customers who were to receive free services were advised work had been performed which was not done.

20. Dynotech paid mechanics a flat hourly rate based upon service work performed. Mechanics did not receive compensation for parts sold in connection with repairs.

21. Dynotech billing was reviewed and approved by Mr. Russo.

22. Mr. Russo was aware of the work performed or not performed by Dynotech’s mechanics.

23. Johnni Angel began working at Dynotech to help Mr. Russo out. Ms. Angel came on board as the receptionist/secretary for the company.

24. She resides with Mr. Russo and decided to incorporate Supertech one day after Dynotech was suspended from doing business by the Department.

25. Ms. Angel intended to operate Supertech from the same business location and retained Mr. Russo to continue the management of the premises.

26. All of the mechanics formerly employed by Dynotech now worked for Supertech and continued to answer to Mr. Russo regarding the day-to-day activities of the business.

27. Ms. Angel is the sole owner of Supertech, she obtained a new tax identification number for the business, and opened new bank accounts. All other aspects of the business operation remained as it had when under the Dynotech name.

28. Ms. Angel filed an application for registration as a motor vehicle repair shop with the Department on November 7, 1996.

29. Estimates and invoices from Supertech established that the company had been operating without being registered as required by law.

30. The invoice forms used by Supertech did not contain a statement indicating what, if anything, was guaranteed in connection with the repair work. Such forms also did not contain the time and mileage period for which the guarantee was effective.

31. Supertech’s written motor vehicle repair estimate and disclosure statements did not contain the proposed work completion date; the customer’s intended method of payment; the name and telephone number of another person who may authorize repair work, if the customer desired to designate such person; a statement allowing the customer to indicate whether replaced parts should be saved for inspection or return; or a statement indicating the daily storage charge for the customer’s vehicle after the customer had been notified that the repair work had been completed.

32. Supertech’s application for registration did not contain a State of Florida tax identification number.

    CONCLUSIONS OF LAW

    
    

33. The Division of Administrative Hearings has jurisdiction over the parties to, and the subject matter of, these proceedings.

34. Section 559.921(4), Florida Statutes, provides:

    
    

    1. The department may enforce the provisions of this part by imposing administrative fines not to exceed $1,000 per violation or by taking action to suspend or revoke the registration of a motor vehicle repair shop when:

       1. The business has a pattern of failing to comply with or violating the provisions of this part;

       2. The business has filed an application in which any material fact is omitted or falsely stated; or

       3. The business has intentionally defrauded the public through dishonest or deceptive means.

          
          

          All hearings under this subsection shall be conducted in accordance with chapter 120.

          
          

35. Section 559.905, Florida Statutes, provides:

    
    

    1. When any customer requests a motor vehicle repair shop to perform repair work on a motor vehicle, the cost of which repair work will exceed $50 to the customer, the shop shall prepare a written repair estimate, which is a form setting forth the estimated cost of repair work, including diagnostic work, before effecting any diagnostic work or repair. The written repair estimate shall also include the following items:

       1. The name, address, and telephone number of the motor vehicle repair shop.

       2. The name, address, and telephone number of the customer.

       3. The date and time of the written repair estimate.

       4. The year, make, model, odometer reading, and license tag number of the motor vehicle.

       5. The proposed work completion date.

       6. A general description of the customer's problem or request for repair work or service relating to the motor vehicle.

       7. A statement as to whether the customer is being charged according to a flat rate or an hourly rate, or both.

       8. The estimated cost of repair.

       9. The charge for making a repair price estimate or, if the charge cannot be predetermined, the basis on which the charge will be calculated.

       10. The customer's intended method of payment.

       11. The name and telephone number of another person who may authorize repair work, if the customer desires to designate such person.

       12. A statement indicating what, if anything, is guaranteed in connection with the repair work and the time and mileage period for which the guarantee is effective.

       13. A statement allowing the customer to indicate whether replaced parts should be saved for inspection or return.

       14. A statement indicating the daily charge for storing the customer's motor vehicle after the customer has been notified that the repair work has been completed. However, no storage charges shall accrue or be due and payable for a period of 3 working days from the date of such notification.

    2. If the cost of repair work will exceed

       $50, the shop shall present to the customer a written notice conspicuously disclosing, in a separate, blocked section, only the following statement, in capital letters of at least 12- point type:

       PLEASE READ CAREFULLY, CHECK ONE OF THE STATEMENTS BELOW, AND SIGN:

       I UNDERSTAND THAT, UNDER STATE LAW, I AM ENTITLED TO A WRITTEN ESTIMATE IF MY FINAL BILL WILL EXCEED $50.

       
       

       I REQUEST A WRITTEN ESTIMATE.

       I DO NOT REQUEST A WRITTEN ESTIMATE AS LONG AS THE REPAIR COSTS DO NOT EXCEED

       $ . THE SHOP MAY NOT EXCEED THIS AMOUNT WITHOUT MY WRITTEN OR ORAL APPROVAL.

       
       

       I DO NOT REQUEST A WRITTEN ESTIMATE.

       
       

       SIGNED DATE

       
       

       
       

    3. The information required by paragraphs (1)(h) and (i) need not be provided if the customer waives in writing his right to receive a written estimate.

    4. Except as provided in subsection (5), a copy of the written repair estimate required by subsection (1) and the disclosure statement required by subsection (2) shall be given to the customer before repair work is begun. The disclosure statement may be provided on the same form as the written repair estimate.

    5. If the customer leaves his motor vehicle at a motor vehicle repair shop during hours when the shop is not open or if the customer permits the shop or another person to deliver the motor vehicle to the shop, there shall be an implied partial waiver of the written estimate; however, upon completion of diagnostic work necessary to estimate the cost of repair, the shop shall notify the customer as required in s. 559.909(1).

    6. Nothing in this section shall be construed to require a motor vehicle repair shop to give a written estimated price if the motor vehicle repair shop does not agree to perform the requested repair.

36. Section 559.920, Florida Statutes, provides, in pertinent part:

    It shall be a violation of this act for any motor vehicle repair shop or employee thereof to:

    1. Engage or attempt to engage in repair work for compensation of any type without first being registered with or having submitted an affidavit of exemption to the department;

    2. Make or charge for repairs which have not been expressly or impliedly authorized by the customer;

    3. Misrepresent that repairs have been made to a motor vehicle;

    4. Misrepresent that certain parts and repairs are necessary to repair a vehicle;

    * * *

    (8) Make or authorize in any manner or by any means whatever any written or oral statement which is untrue, deceptive or misleading, and which is known, or which by the exercise of reasonable care should be known, to be untrue, deceptive or misleading;

    * * *

    1. Cause or allow a customer to sign any work order that does not state the repairs requested by the customer or the automobile's odometer reading at the time of repair;

    2. Fail or refuse to give to a customer a copy of any document requiring the customer's signature upon completion or cancellation of the repair work;

    3. Willfully depart from or disregard accepted practices and professional standards;

    * * *

    (17) Perform any other act that is a violation of this part or that constitutes fraud or misrepresentation.

    
    

37. The Department bears the burden of proof in this case to establish, by clear and convincing evidence, the allegations against Respondents. It has met that burden.

38. As to the charges against Dynotech, the Department alleged, and has proven by clear and convincing evidence, that this Respondent performed work without first providing a written estimate of the charges expected; failed to present the disclosure statement required by Florida law; misrepresented that repairs had been made to a motor vehicle; misrepresented that parts and repairs were necessary to repair a motor vehicle; made

    untrue, deceptive or misleading statements which by the exercise of reasonable care should have been known were untrue, deceptive or misleading; and willfully departed from accepted practices and professional standards in the repair of motor vehicles.

39. Further, the Department has established that Dynotech intentionally defrauded the public through dishonest or deceptive means; and that the pattern of conduct by Dynotech through its employees demonstrates an intentional violation of Florida law.

40. As to the allegations against Supertech, the Department alleged and has proven, by clear and convincing evidence, that this Respondent engaged or attempted to engage in the business of providing motor vehicle repairs without first being registered by the Department; and used invoice forms and estimate statements which did not comply with the requirements of law.

41. Given the undisputed facts regarding the establishment of the business Supertech, its intimate connection to the former entity doing business at the same location, and the serious violations which that entity committed, the Department has demonstrated that Supertech is not entitled to registration as a motor vehicle repair shop.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Agriculture and Consumer Services enter final orders confirming the suspension and revoking the registration for Dynotech, imposing an

administrative fine in the amount of $3,000.00, and denying Supertech’s application for registration as a motor vehicle repair shop.

DONE AND ENTERED this 2nd day of June, 1997, in Tallahassee, Florida.

J. D. PARRISH

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 2nd day of June, 1997.

COPIES FURNISHED:

Lawrence J. Davis Senior Attorney

Department of Agriculture and Consumer Services

Room 515, Mayo Building Tallahassee, Florida 32399-0800

James R. Merola, Esquire JAMES R. MEROLA, P.A.

11380 Prosperity Farms Road, Suite 204 Palm Beach Gardens, Florida 33410

Brenda Hyatt, Chief Department of Agriculture and

Consumer Services

508 Mayo building

Tallahassee, Florida 32399-0800

Richard Tritschler, General Counsel Department of Agriculture and

Consumer Services The Capitol, PL-10

Tallahassee, Florida 32399-0810

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. 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: 96-005463

Orders for Case No: 96-005463