STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

BMW OF NORTH AMERICA, LLC,

Petitioner,

vs.

DEPARTMENT OF HIGHWAY SAFETY AND MOTOR VEHICLES,

Respondent.

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) Case No. 03-4250

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POMPANO IMPORTS, INC., d/b/a VISTA MOTORS,

Petitioner,

vs.

DEPARTMENT OF HIGHWAY SAFETY AND MOTOR VEHICLES,

Respondent.

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) Case No. 03-4257

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RECOMMENDED ORDER

This case came before Administrative Law Judge John G. Van Laningham for final hearing in Tallahassee, Florida, on

February 10, 2004.

APPEARANCES

For Petitioner BMW of North America, LLC:

Dean Bunch, Esquire

C. Everett Boyd, Jr., Esquire Sutherland, Asbill & Brennan, LLP 2282 Killearn Center Boulevard Tallahassee, Florida 32309-3576

For Petitioner Pompano Imports, Inc.:

John W. Forehand, Esquire Walter E. Forehand, Esquire Lewis, Longman & Walker, P.A.

125 South Gadsden Street, Suite 300 Tallahassee, Florida 32301

For Respondent: Enoch J. Whitney, Esquire

Michael J. Alderman, Esquire Department of Highway Safety

and Motor Vehicles

Neil Kirkman Building, Room A-432 2900 Apalachee Parkway

Tallahassee, Florida 32399

STATEMENT OF THE ISSUE

The issue in this case is whether Petitioners' notice of intent to establish a supplemental motor vehicle dealership was effective to commence the statutory protest period, which must be completed as a necessary condition of licensure.

PRELIMINARY STATEMENT

By letter dated October 15, 2003, Respondent Department of Highway Safety and Motor Vehicles notified Petitioners that Petitioner Pompano Imports, Inc. would be denied a license to operate a BMW dealership at 744 North Federal Highway in Pompano Beach unless certain conditions were met. Each Petitioner timely requested a formal hearing to challenge this decision, and the matters were referred to the Division of Administrative Hearings, initiating Case Nos. 03-4250 and 03-4257. In due course the related cases were consolidated, and the undersigned scheduled a final hearing for February 10, 2004.

At the final hearing, Petitioner BMW of North America, LLC, presented the testimony of Edward J. Huzyak, its Center Development Manager of the Southern Region. Petitioner Pompano Imports, Inc. called two witnesses: Jonathon Chariff, its Vice- President; and Ronald D. Reynolds, Respondent's Dealer License Administrator. Respondent also presented Mr. Reynolds' testimony. Petitioners jointly offered Exhibits 1 through 35, which were received in evidence.

The final hearing transcript was filed on February 24, 2004. Thereafter, each party timely submitted a Proposed Recommended Order before the established deadline, which was—— after a brief enlargement of time, jointly requested——March 12, 2004.

Unless otherwise indicated, citations to the Florida Statutes refer to the 2003 Florida Statutes.

FINDINGS OF FACT

1. By letter dated September 13, 2002, Petitioner BMW of North America, LLC ("BMW NA") notified Respondent Department Of Highway Safety and Motor Vehicles (the "Department") that Petitioner Pompano Imports, Inc., d/b/a Vista Motors ("Vista"), intended to relocate its dealership, where BMW cars and light trucks were being sold and serviced, from 700 North Federal Highway in Pompano Beach ("Source Site") to 4401 West Sample Road in Coconut Creek ("Target Site").1 BMW NA and Vista took

   the position that, pursuant to Section 320.642(5), Florida Statutes,2 the proposed reopening of the "relocatee-dealership"3 at the Target Site should not be considered subject to competing dealers' administrative protests.

2. Pursuant to Section 320.642(1)(d), Florida Statutes, the Department caused BMW NA's September 13, 2002, notice of relocation to be published in the September 27, 2002, edition of the Florida Administrative Weekly.

3. On September 27, 2002, also in accordance with Section 320.642(1)(d), the Department mailed copies of BMW NA's September 13, 2002, notice of relocation to all existing BMW passenger car dealers and BMW light truck dealers in Collier, Palm Beach, Miami-Dade, and Broward Counties. Within two weeks, however, the Department mailed letters to these same dealers explaining that the proposed reopening of Vista's relocatee- dealership at the Target Site would not be a "protestable" event after all.

4. A little more than seven months later, by letter dated May 5, 2003, BMW NA notified the Department that Vista planned to establish an additional or "supplemental" dealership for selling and servicing BMW cars and light trucks at 744 North Federal Highway in Pompano Beach (the "Supplemental Site"), a parcel which is contiguous to the Source Site where the relocatee-dealership then remained open for business, the

   previously announced relocation having not yet taken place. As required by statute, the Department not only caused a notice to be published in the May 16, 2003, edition of the Florida Administrative Weekly regarding this putative supplemental dealership, but also it mailed copies of BMW NA's May 5, 2003, notice to all existing BMW passenger car dealers and BMW light truck dealers in Collier, Palm Beach, Miami-Dade, and Broward Counties. No dealer timely protested Vista's intended opening of a supplemental dealership at the Supplemental Site.

5. Generally speaking, after the Department has received notice from a licensee or applicant regarding the latter's intent either to establish an additional dealership or to relocate an existing dealership, and after such notice has been duly published in accordance with Section 320.642, Florida Statutes, the Department routinely enters a final order authorizing the issuance of a license for the proposed additional or relocated dealership upon the applicant's satisfaction of all other requirements for licensure, unless a timely protest is filed, in which case final agency action must be taken pursuant to Chapter 120.4 In this case, however, by letter dated July 10, 2003, the Department informed BMW NA and Vista of its decision that because the putative relocatee- dealership was still doing business at the Source Site, and because the Supplemental Site was immediately adjacent to the

   Source Site, the proposed supplemental dealership would be deemed an "expansion" of the putative relocatee-dealership, as opposed to an "additional" dealership.

6. Based on this determination, the Department concluded in its July 10, 2003, correspondence that: (1) a license would not be issued for the expansion of Vista's dealership into the Supplemental Site; (2) the opening of the dealership that Vista proposed to establish at the Target Site, which would come into being as the putative relocatee-dealership expanded, could not be considered exempt from protest, for no "relocation" would be occurring; and (3) notice and an opportunity to protest would need to be provided with respect to the Target Site before a license for an additional dealership at that location could be issued.

7. BMW NA and Vista each requested a hearing to challenge the Department's findings and conclusions, initiating, respectively, DOAH Case Nos. 03-2969 and 03-2970. These cases were subsequently consolidated. On September 30, 2003, before the final hearing in the consolidated proceeding, the Department, BMW NA, and Vista entered into a settlement agreement. Upon being advised of the settlement, the presiding administrative law judge (not the undersigned) closed DOAH's files in Case Nos. 03-2969 and 03-2970 and relinquished jurisdiction to the Department.

8. Pursuant to the referenced settlement agreement, the Department, on October 7, 2003, approved Vista's application to relocate its BMW passenger car and BMW light truck dealership from the Source Site to the Target Site, as had been proposed in the September 13, 2002, notice of relocation. Vista's motor vehicle dealer license was, accordingly, modified to permit Vista to conduct dealership activities with regard to BMW passenger cars and BMW light trucks at the Target Site. This modification effectively "de-licensed" Vista as a BMW dealer at the Source Site.

9. On October 7, 2003, Vista stopped selling and servicing BMW passenger cars and BMW light trucks at the Source Site. (Vista continued to operate a preexisting, separately licensed Volkswagen dealership at the Source Site.)

10. On October 8, 2003, Vista started selling and servicing BMW passenger cars and BMW light trucks at the Target Site. (Vista continued to operate a preexisting, separately licensed MINI dealership at the Target Site.)

11. Also pursuant to the settlement agreement referenced above, the Department notified BMW NA and Vista, by letter dated October 15, 2003, of the following relevant findings:5

    1. Pursuant to Rule 15C-7.004(3)(d)2, Florida Administrative Code, the Department views [Vista's] proposed additional motor vehicle BMW dealership . . . at [the Supplemental Site] as an expansion of Vista

       Motors' existing licensed BMW dealership at [the Source Site.]

       
       

    2. Therefore, the [proposed project at the Supplemental Site] . . . , [being] in fact merely an expansion of Vista Motors' existing location [i.e. the Source Site], [is] not [an additional BMW dealership] subject to Section 320.642, Florida Statutes.

       
       

    3. [T]hus BMW is essentially intending to remain open at its existing . . . location [meaning, apparently, the Source Site] at the same time it is relocating to [the Target Site].

       
       

       Based on the foregoing findings, the Department concluded as follows:6

       1. [The exemption from protest afforded under Section 320.642(5), Florida Statutes, cannot apply where the putative relocatee- dealership of] Vista Motors . . . remain[s] open at the [Source Site] as a franchise BMW dealer . . . [while] at the same time [Vista] move[s] [the putative relocatee- dealership] to the [Target Site].

          
          

       2. Therefore, Vista may not be issued a license as a franchise BMW dealer at the [Supplemental Site], until

       
       

       1. it relocates to [the Target Site] and

          
          

       2. thereafter publishes a new notification of an additional dealership for the [Supplemental Site], and those proceedings, if any, are concluded in favor of the additional dealership.

       
       

       (Emphasis added.)

       
       

12. At first blush, the October 15, 2003, notice seems curiously oblivious to the fact that the Department had already

    approved Vista's relocation to the Target Site and modified Vista's license accordingly. Indeed, there appears to be some tension between the "facts" found in the notice and the actual facts on the ground. For example, while the notice refers to Vista's existing licensed BMW dealership at the Source Site, the undisputed fact is that Vista was not licensed to operate a BMW dealership at the Source Site as of October 7, 2003. Thus, if the Department believed, as a literal reading of the notice suggests, that Vista's intent on October 15, 2003, was to expand an existing BMW dealership at the Source Site, then it would be reasonable to wonder why the Department did not conclude that Vista was operating at the Source Site without a license.

13. Conclusion 1 seems likewise to be at odds with what had transpired in fact. On the one hand, the Department concludes that Vista has remained open at the Source Site, which it cannot do and also claim, as it had done, the Section 320.642(5) exemption. Yet, on the other hand, the Department had, in fact, previously authorized Vista to operate a BMW dealership at the Target Site under the auspices of the very exemption that the October 15, 2003, notice concludes cannot apply because Vista is still open (according to the "findings") at the Source Site.

14. To properly understand the October 15, 2003, notice, it is necessary to focus on the word "thereafter" in Conclusion

    2(b). Clearly, the timing of the "new notification" is critical. The Department is saying that, where a dealer has previously given notice of its intent to relocate an existing dealership, taking advantage of Section 320.642(5) to exempt the reopening of such relocatee-dealership at the target site, if the dealer now wants to establish a "supplemental" dealership at the source site7 (hereafter, such a dealership will be called a "backfill dealership"8) then the relocatee-dealership must truly be relocated before effective notice of the proposed backfill dealership may be published.

15. Under this policy,9 hereafter called the "Exempt Relocation/Backfill Policy," it is appropriate for the Department, in determining retrospectively10 whether the notice of the proposed "supplemental" dealership was effective, to look at the facts as of the date of the notice. In this case, the subject notice was given to the Department on May 5, 2003, and published in the Florida Administrative Weekly on May 16, 2003. With these points in mind, it becomes apparent that the "findings" in the October 15, 2003, notice, which seem inconsistent with the facts on the ground, actually refer to the state of affairs in May 2003.

16. Once the findings in the October 15, 2003, notice are understood as being retrospective in nature, the notice begins to make sense. What the Department found was that Vista had not

    relocated its BMW dealership from the Source Site to the Target Site as of May 5, 2003, when notice of the proposed backfill dealership was furnished to the Department. As a result, because Vista had previously sought the protection of Section 320.642(5) for the reopening of its relocatee-dealership, the May 5, 2003, notice respecting the backfill dealership was premature and ineffective. To remedy the problem of premature notice, the Department would afford Vista a second chance to give effective notice in the proper sequence, after the relocation of its BMW dealership from the Source Site to the Target Site had taken place.11

17. It is important to note that, in the October 15, 2003, notice, the Department neither needed to make nor made a finding, one way or the other, as to whether Vista's putative relocatee-dealership has, in fact, moved from the Source Site to the Target Site.12 Thus, such a determination should not be made in and through this proceeding, but, rather, by the Department (preliminarily) either (a) at the time BMW NA gives notice to the Department, again, of the proposed backfill dealership at Supplemental Site or (b) after publication of such notice in the Florida Administrative Weekly but before a license for the proposed backfill dealership is issued or denied.13 It is also not necessary, and indeed would be inappropriate, to determine in this case what action, if any, the Department should take if

    it subsequently determines that Vista's putative relocatee- dealership has not in fact relocated from the Source Site to the

    Target Site.

    
    

    CONCLUSIONS OF LAW

    
    

18. The Division of Administrative Hearings has personal and subject matter jurisdiction in this proceeding pursuant to Sections 120.569 and 120.57(1), Florida Statutes.

19. Petitioners challenge the Department's intended decision along two principal fronts. First, they claim that the Department has treated the Vista relocation/backfill differently than previous dealers' similar maneuvers, departing from established policy. Second, Petitioners argue that the Department's Exempt Relocation/Backfill Policy is irrational, illogical, arbitrary, and capricious. These contentions will be taken up in turn.

20. Petitioners assert that the Department, through past actions, has established a policy whereby a licensee, having previously notified the Department that a dealer's existing dealership will be relocating, may give effective notice, before the relocatee-dealership has moved to the target site, of its intent to establish for the same dealer an additional dealership at the source site. In other words, according to Petitioners, there has not been, until now, a requirement that notice regarding the establishment of a backfill dealership be delayed

    until after the relocatee-dealership has actually moved to the target site.

21. In support of this assertion, Petitioners introduced into evidence various documents purportedly demonstrating the Department's approval of backfill dealerships in three previous instances under the circumstances just described. Of these, however, only the case of J. O. Stone Buick, Inc., which was concluded in January 1992, seems clearly to have involved a straightforward relocation/backfill where notice regarding the establishment of the backfill dealership was given before the relocation had occurred.14

22. Nevertheless, the Department does not dispute that, on one or two occasions, it has allowed a licensee to give notice of intent to establish a backfill dealership before the relocatee-dealership has moved from the source site. As the Department rightly points out, however, these "precedents" are inapposite because none involved, as does the instant case, a claim that the reopening of the relocatee-dealership at the target site should be exempt from protest. For reasons that will be discussed presently, the fact that Petitioners have taken advantage of Section 320.642(5) to exempt from protest the reopening of Vista's dealership at the Target Site makes the present case materially distinguishable from any backfill situation that the Department previously has encountered.

23. It is concluded, therefore, that this case, being factually unique, is one of first impression. In light of this conclusion, Petitioners' argument that the Department's intended action would contravene past agency policy and practice is necessarily unpersuasive. Succinctly put, the Department has not dealt with a situation quite like this one before and hence could not have developed a routine for handling similar cases.15

24. Explaining why Petitioners' claim of exemption distinguishes this case from any backfill situation that the Department previously has encountered will answer Petitioners' second main charge, which is that the Exempt Relocation/Backfill Policy is irrational, etc. As will be seen, a stricter approach to backfills following exempt relocations is warranted to discourage dealer abuse of the exemption through deception, a potential problem that does not exist in connection with protestable relocations, even when the latter occur concurrently with the establishment of backfill dealerships.16

25. First consider the situation that exists when a dealer17 gives notice of relocating an existing dealership without also asserting that the reopening of the relocatee- dealership will be exempt from protest under Section 320.642(5). This, obviously, exposes the reopening at the target site to protest. If at some later date the dealer were to notify the Department of plans to open a backfill dealership at the source

    site, then the backfill dealership would be subject to protest, too.

26. Now suppose that this dealer's true intention all along was to remain in business at the putative source site by resuming dealership operations there immediately after the purported "relocation" to the target site. If, as posited, no real "move" were contemplated, then it would be foolish for the dealer to try to mislead the Department into believing that a protestable "relocation" was about to take place. Doing so would not only be wrong on several levels (e.g. legal, moral, ethical) but also would be pointless and even self-defeating, for the deception needlessly would expose the existing dealership, once notice was given regarding the renewal of dealership operations at the putative source site, to protest. A rational dealer in this situation would simply give notice of its intent to establish an additional dealership at the other site and thereby expose only one location (the newer one) to protest, rather than both.

27. When the Department receives notice regarding a protestable relocation, therefore, it has good reason to accept such notice at face value and assume that the dealership in question really is going to move from the source site to the target site. Further, should the dealer thereafter give notice that it intends to establish an additional dealership at the

    source site——no problem. The Department reasonably can continue to take a laissez-faire approach, because the end result in every instance will be not fewer opportunities to protest but more, even if such notice is received before the previously announced relocation has occurred, and even if the dealer was not candid with the Department regarding its intent to "relocate" (or lack thereof).

28. Now consider the contrasting situation that obtains when the Department receives notice regarding a relocation that, according to the parties who stand to benefit from the exemption, is exempt from protest. Whenever such a notice is accepted at face value, as has been the Department's practice,18 the result is that competing dealers are denied not only an invitation to protest the reopening of the relocatee-dealership at the target site, but also a clear opportunity to challenge the Department's "decision" to treat the dealership's reopening as exempt. The exemption is practically a fait accompli. Obviously, this is a desirable outcome for the dealer whose dealership is being relocated.

29. Little imagination is required, however, to see that the Department's trustful approach to notices of exempt relocation could be exploited. For example, merely by telling the Department that its existing dealership is being "relocated," when in fact the plan is to resume dealership

    operations at the putative source site immediately following the purported "relocation," with little or no business interruption at the premises being "vacated," a dealer could shield the new location from protest at the cost of exposing the existing location to protest. This trade-off would make sense, for example, if the dealer believed its existing dealership would be "safer" in a protest than the newer one——or that the existing dealership was less likely to be protested.

30. The possibility of such deception, which is practically nonexistent when a protestable relocation is announced, rises to the point of reasonable concern in the exempt relocation/concurrent backfill scenario. If a dealer who is supposedly relocating its dealership tells the Department that it plans to open a backfill dealership at the source site, and if such notice is given before the previously announced relocation has occurred, then the Department has good reason for skepticism about whether a "relocation," which term ordinarily denotes the leaving of one place and resettling at another, is really about to take place. The reason is that when the dealer announces its intent, pre-move, to resume dealership operations at the source site, making clear beyond doubt that the dealer19 will not be vacating the source site but rather staying there—— for the purpose, no less, of operating at that location the very dealership that is supposed to have moved away——it is debatable,

    at least, whether, the new dealership at the target site should be considered a "relocated" dealership or just an additional place of business for the dealer, which latter could not be exempt from protest. This is reason enough for not accepting the dealer's self-serving notices at face value, and for taking a closer look at the facts.

31. In this particular case, the Department decided to require, evidently as a means of verifying Vista's true intentions, that notice regarding the backfill dealership not be given until after the putative relocatee-dealership had actually relocated. This is not the only conceivable way of handling the situation, to be sure, but it is certainly a rational and nonarbitrary solution. By deferring until after relocation the point at which effective notice of the backfill dealership can be given, the Department has said, in effect, "We'll decide whether you've relocated after you've relocated." This has the salutary effect of permitting the Department to determine retroactively, based on actual facts as opposed to the dealer's representations, whether the relocation was real or a sham. If the Department ultimately decides that the relocation was real, then the backfill dealership will likely be licensed in due course, assuming a successful protest does not scuttle the project. If, on the other hand, the Department decides that Vista has not relocated its dealership from the Source Site,

    then, one would expect, the Department will take appropriate regulatory action to remedy the problem.

32. It is concluded, therefore, that the Department's Exempt Relocation/Backfill Policy is not arbitrary or capricious, illogical or irrational, but rather is a reasonable expression of the Department's regulatory discretion.

33. In applying the Exempt Relocation/Backfill Policy to the Vista scheme, the Department made a separate policy decision regarding the identity of the Source Site and the Supplemental Site. Recall that Vista's proposed backfill dealership would not be located precisely at the Source Site but rather would be situated on the Supplemental Site, which is an adjacent, contiguous parcel. Strictly speaking, therefore, it could be argued that Vista's proposed backfill dealership is not really a backfill dealership at all. The Department determined, however, at least implicitly, that, for purposes of the Exempt Relocation/Backfill Policy, a parcel contiguous to a source site will be viewed as indistinguishable from the source site; hence, the renewal of dealership operations at such a contiguous site following a purported relocation from the source site will be considered a backfill. This can be called the "Contiguous Parcel Corollary."

34. In its October 15, 2003, notice of intent to deny Vista a license to operate a BMW dealership at the Supplemental

    Site, the Department invoked Rule 15C-7.004(3)(d)2., Florida Administrative Code, as support for the Contiguous Parcel Corollary. This Rule, which implements Section 320.27(5), Florida Statutes,20 provides in pertinent part that a license "shall not be required of a dealer who desires to add or expand its dealership to a contiguous piece of real estate." The Department reasoned then, and continues to maintain, that in May 2003, when notice was given regarding BMW NA's intent to authorize a Vista dealership at the Supplemental Site, Rule 15C- 7.004(3)(d)2 required the Department to deem the proposed project an "expansion" because Vista was still operating its BMW dealership at the Source Site. The Department takes the additional position, also based on the Rule, that an expansion project is subject neither to the notice and protest requirements of Section 320.642 nor to the licensure requirements of Section 320.27. Thus, it concludes, the May 5, 2003, notice was, in effect, a nullity.

35. Petitioners counter this contention by arguing that while Section 320.27(5) and Rule 15C-7.004(3)(d)2 make clear that a license is not required to operate a supplemental dealership on property contiguous to an existing dealership's location, these provisions do not prohibit the issuance of a license for such a supplemental dealership. Therefore, Petitioners seemingly postulate, if BMW NA had not notified the

    Department in September 2002 that Vista intended to relocate to the Target Site under a claim of exemption, then Vista, had it wanted gratuitously to incur needless expense, could have given effective notice in May 2003 regarding the establishment of an additional dealership at the Supplemental Site, and thereafter obtained a superfluous license therefor, even though such notice and licensure plainly are not required. Having established this "premise," Petitioners suggest (albeit implicitly) that the fact BMW NA did notify the Department in September 2002 regarding Vista's intended relocation should make no difference as far as Vista's "right" to obtain a superfluous license is concerned.

    If this reasoning were persuasive, one might conclude that the May 2003 notice was effective.

36. The problem with Petitioners' position, however, is that the underlying reasoning is unpersuasive. First, whether or not a license to operate a supplemental dealership on property contiguous to an existing dealership's location is legally obtainable, it is obvious that no reasonable dealer would go through the trouble and expense of obtaining one gratuitously. The undersigned is confident that but for the purported relocation to the Target Site——that is, if all Petitioners were proposing to do was allow Vista to operate its BMW dealership at the Supplemental Site——BMW NA and Vista never would have sought the license that Section 320.27(5) instructs

    is not necessary. The "premise" stated in the preceding paragraph is much too implausible to anchor a persuasive argument.

37. Second, even if the premise were accepted, it is simply not true that Petitioners' prior claim of exempt relocation is irrelevant to the question whether a superfluous license successfully may be sought in this particular instance. Indeed, the preexisting claim of exemption changes everything. As we have seen, when the Department receives notice of plans to open a backfill dealership, the Department has good reason to wonder whether a feigned "relocation" might be afoot, at least if such notice is given, as here, before the previously announced relocation has occurred. The Department was justified, therefore, in considering whether Vista's proposed "supplemental" dealership should be treated as a de facto backfill dealership, given that this new project would be located on property contiguous to the Source Site.

38. That said, the Department's reliance on Rule 15C- 7.004(3)(d)2, though well taken, was not well explained. The fact is, as of July 10, 2003, the Department knew that (a) Vista planned to execute an exempt relocation from the Source Site and

    (b) Vista planned to open a "supplemental" dealership at the contiguous Supplemental Site. Thus, in its October 15, 2003, notice, rather than use Rule 15C-7.004(3)(d)2 to label the

    proposed "supplemental" dealership an "expansion" project, which was inconsistent with the actual facts, the Department might better have cited the Rule, and Section 320.27(5), as support for the general proposition that contiguous property is treated differently than noncontiguous property for purposes of notice, protest, and licensure under Chapter 320. To the point, under the subject regulatory provisions, contiguous properties (unlike noncontiguous properties) are treated as being one and the same. As the Department might then have explained, it is reasonable, in view of the recognition that contiguous properties present a unique situation in this context, to deem Vista's proposed "supplemental" dealership a backfill dealership, especially since Petitioners' relocation and renewal play is indistinguishable, in substance, from the situation where a dealer, having previously announced an exempt relocation, gives notice of intent to establish a dealership at the source site while the purported relocation is pending.

39. It is concluded, for the reasons just expressed, that the Department's Contiguous Parcel Corollary is not arbitrary or capricious, illogical or irrational, but rather is a reasonable expression of the Department's regulatory discretion.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department enter a final order

providing that Vista shall be issued a license to operate a BMW dealership at 744 North Federal Highway only if: (a) prior to the time notice is given to the Department pursuant to Section 320.642, Florida Statutes, regarding the proposed dealership, Vista has actually relocated the dealership that existed at 700 North Federal Highway to 4401 West Sample Road in Coconut Creek;

1. any protest filed against the proposed dealership is resolved in Petitioners' favor; and (c) all other legal requirements for licensure are met.

   DONE AND ENTERED this 15th day of April, 2004, in Tallahassee, Leon County, Florida.

   S

   
   

   JOHN G. VAN LANINGHAM

   Administrative Law Judge

   Division of Administrative Hearings The DeSoto Building

   1230 Apalachee Parkway

   Tallahassee, Florida 32399-3060

   (850) 488-9675 SUNCOM 278-9675

   Fax Filing (850) 921-6847 www.doah.state.fl.us

   
   

   Filed with the Clerk of the Division of Administrative Hearings this 15th day of April, 2004.

   
   

   ENDNOTES

   
   

   1/ The terms "source site" and "target site," uncapitalized, will be used herein to refer, respectively, to (a) any site from which a dealership moves or plans to move and (b) any site to which a dealership moves or plans to move.

   
   

   2/ Section 320.642(5), Florida Statutes, provides as follows:

   
   

   1. The opening or reopening of the same or a successor motor vehicle dealer within 12 months shall not be considered an additional motor vehicle dealer subject to protest within the meaning of this section, if:

      
      

      1. The opening or reopening is within the same or an adjacent county, is within 2 miles of the former motor vehicle dealer location,

         
         

      2. The proposed location is further from each existing dealer of the same line-make than the prior location is from each dealer of the same line-make within 25 miles of the new location,

         
         

      3. The opening or reopening is within 6 miles of the prior location and, if any existing motor vehicle dealer of the same line-make is located within 15 miles of the former location, the proposed location is no closer to any existing dealer of the same line-make, or

         
         

      4. The opening or reopening is within 6 miles of the prior location and, if all existing motor vehicle dealers of the same line-make are beyond 15 miles of the former location, the proposed location is further

than 15 miles from any existing motor vehicle dealer of the same line-make.

Any other such opening or reopening shall constitute an additional motor vehicle dealer within the meaning of this section.

3/ As used herein, the term "relocatee-dealership" means a dealership that has been identified as one that will relocate, is in the process of relocating, or has relocated from a source site to a target site.

4/ It should be noted that, apart from giving notice pursuant to Section 320.642(1), the licensee or applicant must also apply for a license, which application the Department will grant or deny, as appropriate, only after a final order has formally concluded the protest period that commences with the publication of notice that an additional or relocated dealership has been proposed. Thus, to restate for emphasis the point made in the text, the final order which terminates the protest period is neither a license nor even a guarantee that a license will be issued; the final order is a necessary, but not a sufficient, condition for issuance of a license.

5/ The undersigned has added the bracketed numbers and, as well, rearranged the sequence of the findings, for the sake of clarity and for ease of reference.

6/ Once again, the bracketed numbers and, this time, letters were added by the undersigned for ease of reference.

7/ In this case, to be clear, the proposed "supplemental" dealership would be located at the Supplemental Site, which is not exactly the Source Site. Because the Supplemental Site is contiguous to the Source Site, however, it has been deemed the equivalent of the Source Site by the Department, a policy decision that will be examined below.

8/ "Backfill" is the term the Department uses to refer to the renewal of dealership operations at a source site following (in theory at least) the relocation of the relocatee-dealership from that location to a target site. As will be seen, this has happened a few times in the past, but never, as here, where the dealer claimed the Section 320.642(5) exemption for the reopening at the target site.

9/ The text sets forth what the undersigned has found to be a fair and accurate statement of the policy that underlies the Department's intended action. By stating the policy in general terms, however, the undersigned does not find or imply that the Department has developed a rule-by-definition. To the contrary, the policy in question is clearly incipient at this point.

10/ The Department could make this determination prospectively,

i.e. before causing notice to be published in the Florida Administrative Weekly, but that is not what happened in this case. The Department is in a position to decide the issue retrospectively if it so chooses because, as here, licensure of the proposed backfill dealership can be denied if the notice was prematurely published.

11/ In this regard the Department compromised its earlier position, expressed in the July 10, 2003, notice, that Vista and BMW NA would need to lay down the Section 320.642(5) shield and expose Vista's dealership at the Target Site to protest as an ordinary additional or supplemental dealership.

12/ It could reasonably be inferred of course, from the fact that on October 7, 2003, the Department authorized Vista to operate a BMW dealership at the Target Site even though such dealership had not been exposed to protest, that the Department had determined, as of that date, that Vista's purported relocation to the Target Site actually had occurred. This inference is reasonable because the Department probably would not have licensed Vista's dealership at the Target Site without insisting upon the statutorily required protest period unless it had determined beforehand that Vista's relocatee-dealership really had relocated, making the "reopening" thereof exempt from protest. This "de facto determination" that a relocation in compliance with Section 320.642(5) actually occurred is the subject of a separate administrative proceeding being prosecuted by a competitor of Vista's. That case, styled Palm Beach Imports, Inc., d/b/a Braman Motorcars v. Department of Highway Safety and Motor Vehicles, et al., DOAH Case No. 03-4251, is awaiting final hearing as of this writing.

13/ A third possibility is that, in taking final agency action in DOAH Case No. 03-4251, see endnote 12, the Department will decide whether or not Vista's putative relocatee-dealership has, in fact, relocated.

14/ In the matter involving the relocation of Carmax Auto Superstores, Inc.'s dealership, the source site was taken over by a different dealer (T.T. of Sand Lake, Inc.); thus, the new dealership at the source site was not a backfill dealership.

With respect to Kissimmee Toyota, the renewed operation at the source site was a service-only shop and hence at most a partial backfill.

15/ This is not a case, therefore, where the agency needed to offer a sufficient record predicate or other reasonable explanation for abandoning preexisting policy or past practice. Cf. Beverly Enterprises-Florida, Inc. v. Department of Health and Rehabilitative Services, 573 So. 2d 19, 23 (Fla. 1st DCA 1990).

16/ The undersigned is making two dispositive legal conclusions with respect to the Exempt Relocation/Backfill Policy. The first, recently stated in the text, is that the policy does not conflict with or depart from past agency policy or practice.

The second, which will be announced in the text after a discussion of the reasons therefor, is that the policy is not irrational or capricious. (Either or both conclusions might plausibly be considered ultimate findings of fact, but whether legal or factual in nature, the undersigned has decided these outcome determinative issues in the Department's favor.)

As the parties will quickly discern, however, the undersigned has found the policy to be rational and reasonable for reasons other than those articulated by the Department.

This is because, while the undersigned is convinced that the Department has made a valid and appropriate regulatory decision, the undersigned was not persuaded by the reasons that the Department advanced in support of its decision. The undersigned has concluded, in short, that the Department reached a defensible, and indeed desirable, result, despite its failure to spell out what the undersigned considers the best supporting rationale.

The undersigned does not believe that he is bound to consider only the rationale advanced by the Department, for several reasons. First, this is "a de novo proceeding intended to formulate agency action, and not to review action taken earlier and preliminarily." Beverly Enterprises-Florida, Inc. v. Department of Health and Rehabilitative Services, 573 So. 2d 19, 23 (Fla. 1st DCA 1990); Szkolny v. State Awards Committee, 395 So. 2d 1290, 1293-94 (Fla. 1st DCA 1981)("Section 120.57(1)

proceedings do not perform a review function; rather, this procedure is utilized to formulate agency action."). Therefore, the undersigned has a duty, as an active (yet impartial) participant in the decision-making process, to make an independent recommendation, based strictly on the evidentiary record of course, regarding the form and substance of final agency action in the cause. See Gulf Coast Home Health Services of Florida, Inc. v. Department of Health and Rehabilitative Services, 513 So. 2d 704, 706 (Fla. 1st DCA 1987)("In Section 120.57(1) proceedings, the hearing officer 'independently serves the public interest by providing a forum to expose, inform and challenge agency policy and discretion.'").

Second, while it is true that an agency must explicate, defend, and support with evidence an incipient or developing policy when such is urged as the basis for adjudicating a party's substantial interests in a formal administrative proceeding, see, e.g., id. at 707, this charge can only reasonably extend to matters susceptible of ordinary methods of proof. In this instance, the supporting rationale is far less a factual or even legal matter as it is a function of logical reasoning, which latter cannot be proved conventionally. The undersigned does not regard evidence as prescriptive of how to think about a particular subject.

Finally, at bottom, the question whether the Department's proposed regulatory action is appropriate strikes the undersigned as being, in these circumstances, one infused with overriding policy considerations, and hence best left to the agency's discretion. See Brookwood-Walton County Convalescent Center v. Agency for Health Care Admin., 845 So. 2d 223, 228 (Fla. 1st DCA 2003). Having decided independently that the agency's proposed action is reasonable, the undersigned concludes that it would be anomalous, if not unwarranted, to recommend an alternative course of action merely because the Department has chosen to act sensibly for reasons that, in and of themselves, are not satisfactory to the undersigned.

17/ Technically, it is the licensee (e.g. manufacturer) who gives the notice, not the dealer. The term "dealer" is being used here, where the substance of the discussion will not be affected, to convey without constantly repeating the fact that in these relocation/backfill situations the same dealer is planning to operate dealerships at both the source site and the target site.

18/ Recall that in this case the Department initially accepted BMW NA's notice of Vista's exempt relocation with no questions asked.

19/ The "dealer" is a person (or entity), not a place like a "dealership." See §§ 320.27(1)(c) and 320.60(11), Fla. Stat. (defining "motor vehicle dealer").

20/ Section 320.27(5), Florida Statutes, provides in relevant part:

(5) SUPPLEMENTAL LICENSE.--Any person licensed hereunder shall obtain a supplemental license for each permanent additional place or places of business not contiguous to the premises for which the original license is issued, on a form to be furnished by the department, and upon payment of a fee of $50 for each such additional location.

(Emphasis added.)

COPIES FURNISHED:

Dean Bunch, Esquire

C. Everett Boyd, Jr., Esquire Sutherland, Asbill & Brennan, LLP 2282 Killearn Center Boulevard Tallahassee, Florida 32309-3576

John W. Forehand, Esquire Walter E. Forehand, Esquire Lewis, Longman & Walker, P.A.

125 South Gadsden Street, Suite 300 Tallahassee, Florida 32301

Enoch J. Whitney, General Counsel Department of Highway Safety

and Motor Vehicles Neil Kirkman Building 2900 Apalachee Parkway

Tallahassee, Florida 32399

Michael J. Alderman, Esquire Department of Highway Safety

and Motor Vehicles

Neil Kirkman Building, Room A-432 2900 Apalachee Parkway

Tallahassee, Florida 32399

Fred O. Dickinson, III, Executive Director Department of Highway Safety and

Motor Vehicles Neil Kirkman Building

2900 Apalachee Parkway

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. 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: 03-004257

Orders for Case No: 03-004257