Conclusions This matter came before the Department for entry of a Final Order upon submission of an Order Closing File by P. Michael Ruff, Administrative Law Judge of the Division of Administrative Hearings, pursuant to Petitioner’s request for withdrawal, a copy of which is attached and incorporated by reference in this order. The Department hereby adopts the Order Closing File as its Final Order in this matter. Accordingly, it is hereby ORDERED that this case is CLOSED and no license will be issued to Moto Dealer Import, LLC and A-1 Scooters, LLC to sell motorcycles manufactured by Shanghai JMSTAR Motorcycle Co. Ltd. (IMST) at 2204 West 15" Street, Panama City (Bay County), Florida 32401. DONE AND ORDERED this 4, of July, 2009, in Tallahassee, Leon County, Florida. 'ARL A. FORD, Direct6r Division of Motor Vehicles Department of Highway Safety and Motor Vehicles Neil Kirkman Building Tallahassee, Florida 32399 Filed with the Clerk of the Division Motor Vehicles this VA KE! day of July, 2009. NOTICE OF APPEAL RIGHTS Judicial review of this order may be had pursuant to section 120.68, Florida Statutes, in the District Court of Appeal for the First District, State of Florida, or in any other district court of appeal of this state in an appellate district where a party resides. In order to initiate such review, one copy of the notice of appeal must be filed with the Department and the other copy of the notice of appeal, together with the filing fee, must be filed with the court within thirty days of the filing date of this order as set out above, pursuant to Rules of Appellate Procedure. CAF/vlg Copies furnished: Jack Lin Moto Dealer Import, LLC 4998-B South Royal Atlanta Drive Tucker, Georgia 30084 Wayne Wooten Moto Import Distributors, LLC 12202 Hutchinson Boulevard, Suite 72 Panama City, Florida 32407 Susan Viafora A-1 Scooters, LLC 2204 West 15'" Street Panama City, Florida 32401 Michael J. Alderman, Esquire Department of Highway Safety and Motor Vehicles Neil Kirkman Building 2900 Apalachee Parkway, Room A432 Tallahassee, Florida 32399 P. Michael Ruff Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 Nalini Vinayak Dealer License Administrator Florida Administrative Law Reports Post Office Box 385 Gainesville, Florida 32602 Nov 7 2008 9:51 Fax: Nov 7 2008 09:50am 002/002 Moto Dealer import LLC nig, “4998-5 South Royat Atenas Dr, Tucker, GA 30084 TEL: (6781937-4000 FA (678 997-4695. . waruinotodealerimport.com 14-06-2008 Case # 08-5065 Case # 08-5080 To: P. Michael Ruff - Administrative Law Judge _ MDI no longer wants Big Boys Toys Florida, LLC as an appointed dealer distributor in Florida for line-make Zhejiang Summit Huawin Motoreycle Co. Ltd. (POPC) and Shanghai JMSTAR Motoreycle Co. Ltd (MST). We do not want to sell our products to this company. We do not wish to proceed with the hearing or any other action in this case. If you need any additional information please contact me at 678-937-1690. Thank You, Jack Lin COPIES FURNISHED: Wayne Wooten 770-539-4978 Mr. Michael Alderman -Esquire 850-617-3101 Dept. of Hwy Safety and Motor Vehicles 850-617-2827 — Deborah-Osman A-I Scooters, LLC Susan Viafora 2204 W. 15th St, Panama City, FL
Findings Of Fact Based upon the evidence presented at hearing, the following findings of fact are determined: PARTIES The Applicant has applied to the Department for a motor vehicle dealer license authorizing it to operate a Yamaha franchise motorcycle dealership in Jacksonville, Duval County, Florida, at 8940 Lem Turner Road. (Testimony of Turner; P.E. 2.) Petitioner, Ron Turner Cycles, Inc. (hereinafter "Turner"), owns and operates a dual Yamaha/Suzuki motorcycle dealership in Jacksonville at 10263 Beach Boulevard. The Suzuki franchise for that location was acquired in 1976, and the Yamaha franchise followed in 1979. Turner has owned the exclusive Suzuki motorcycle franchise for Duval County since 1976. In addition to its dealership on Beach Boulevard, Turner owns and operates a Suzuki dealership located at 8940 Lem Turner Road, which opened in September of 1982. Petitioner's President, Ron Turner, has lived in Jacksonville for 39 years and has been in the motorcycle business for 20 years. The Protestant owns and operates an existing Yamaha motorcycle dealership in Jacksonville, located at 4949 Blanding Boulevard. The Protestant also owns Honda and Kawasaki motorcycle dealerships in Duval County, located on Blanding Boulevard. (Testimony of Purcell and Turner; P.E. 1.) The Applicant and the Protestant are the only existing Yamaha franchise dealers in Duval County. Yamaha has determined that a third franchise dealership should be located in the northside area of Jacksonville and has issued the Applicant a letter of intent dated July 30, 1982, indicating its willingness to enter into a Dealer Agreement with the Applicant to operate a Yamaha motorcycle dealership at 8940 Lem Turner Road, Jacksonville, Florida. (Testimony of Turner and Ewing; P.E. 1 and 3.) Yamaha is the national distributor for Yamaha brand motorcycles, parts and accessories in the United States. Its model issue for 1983 is constituted of 42 motorcycles ranging in retail price from $300.00 to $5,000.00. Yamaha offers various street machines, competition machines and dual-purpose motorcycles. The Department is an agency within the State of Florida with regulatory responsibility and authority, among those duties being the requirement to approve or disapprove the application for-new motorcycle dealer licenses in Florida sought by the prospective franchisees of the various motorcycle manufacturers and distributors. TERRITORY INVOLVED Duval County is a large county with a population of approximately 571,003 based on the 1980 census, and has experienced a growth rate of 8 percent from 1970 to 1980, which represents an average annual rate of increase of 0.5 percent to 0.7 percent. During the next ten years, population growth and employment is expected to continue in a modest fashion. The City of Jacksonville encompasses the entire county except for the Beaches and Baldwin. Jacksonville is divided by the St. Johns River running north and south, and the various areas of the county are connected by major federal highways, Interstate 10, Interstate 295, Interstate 95, U.S. 1 and U.S. 90 (Beaver Street). (Testimony of Perry; P.E. 1.) Largely because of wide geographic separation between the population located east and west of the St. Johns River and in northern parts of the county, each area has developed distinct and identifiable marketing areas for general retail businesses. (Testimony of Perry; P.E. 1.) The area west of the St. Johns River (hereinafter "Southwest Jacksonville") may be described as that part of the city south of Beaver Street (U.S. Highway 90) to the county line and west of the St. Johns River to the Whitehouse area. The Jacksonville Naval Air Station and Cecil Field Naval Air Station are located in this market area. Using postal zip code areas, Southwest Jacksonville includes zip codes 32204, 32205, 32210/44, 32221 and 32222, and has a population of 58,643 people. (Testimony of Turner, Lamprecht and Perry; P.E. 11 and 12.) Four major franchise motorcycle dealerships are located in Southwest Jacksonville and the extreme northern part of adjacent Clay County. They are found on Blanding Boulevard. The brands are Honda, Yamaha, Suzuki and Kawasaki, three of which (Honda, Yamaha and Kawasaki) are owned by the Protestant's owner, Gary Purcell. (Testimony of Turner and Purcell; P.E. 1.) The area east of the St. Johns River (hereinafter "Southeast Jacksonville") may be described as that part of the city east of the St. Johns River including the Arlington-Fort Caroline and Southside areas. Numerous shopping centers, residential neighborhoods and Regency Square regional shopping center have developed to serve the population in this area. Using postal zip code areas, Southeast Jacksonville included zip codes 32207, 32211, 32216/24, 32217, 32223 and 32225, and has a population of 181,982 people. (Testimony of Turner, Lamprecht and Perry; P.E 9 and 10.) Four major franchise dealerships are located in Southeast Jacksonville: Honda (2), Kawasaki, and Turner's dual Yamaha/Suzuki dealership on Beach Boulevard. (Testimony of Turner; P.E. 1.) The market areas in the northern part of the city (hereinafter the "Northside") include most of the growing residential and commercial neighborhoods north of Beaver Street within a pie-shaped area lying between Interstate 95, U.S. 1, and zip code 32219 north of Cecil Field Naval Air Station. Using postal zip code areas, the Northside includes zip codes 32206, 32208, 32204, 32218 and 32219, and has a population of 143,308 people. (Testimony of Turner, Lamprecht and Perry; P.E. 1 and 15.) There are no major franchise motorcycle dealerships on the Northside, except for the Suzuki shop owned by Turner on Lem Turner Road. (Testimony of Turner.) MARKET AREA INVOLVED Customers for the sales and service of new Yamaha motorcycles in Duval County are served primarily at two separate locations previously described as the Southwest Jacksonville and Southeast Jacksonville market areas. The Protestant serves the Southwest Jacksonville market area. Turner serves the Southeast Jacksonville market area. (Testimony of Lamprecht and Ewing; P.E. 8.) Two and one-half years ago, Yamaha made a preliminary determination that an additional dealership was needed in Jacksonville, but such action was postponed for two years while Yamaha's district sales managers worked with Turner and the Protestant to try and increase Yamaha's market share in Duval County. When the market penetration as a percentage of market share did not advance, Yamaha decided to open a third dealership in Duval County. (Testimony of Ewing.) July of 1982 was the date the decision to open the additional dealership was formalized. The Northside market area was selected as the location for the new dealership, based upon the fact that there were no other motorcycle dealerships in the northern part of Jacksonville and outlying areas adjacent to that part of Jacksonville. This area was also selected because the majority of people who buy Yamaha products are in the middle-to-low income range, and the Northside has that type population. (Testimony of Ewing.) An inverse relationship exists between the likelihood of selling a person a Yamaha motorcycle and the distance between the dealership and where the customer lives. Generally speaking, consumers shop in their neighborhoods for convenience, and if there is no Yamaha dealer, they will go to competitive brands if available, or not buy if required to drive 30 miles round-trip to purchase a Yamaha motorcycle. (Testimony of Turner and Lamprecht.) The distance between the Protestant's existing dealership on Blanding Boulevard and the Applicant's proposed dealership on Lem Turner Road in the Northside market area is 15 miles and takes approximately 20 to 25 minutes to travel, depending on traffic. The distance and time between the dealerships of the Protestant and Turner and Turner and the Applicant are also 15 miles, and 20 to 25 minutes. (Testimony of Turner; P.E. 1.) ADEQUACY OF REPRESENTATION BY TURNER AND PROTESTANT IN THE NORTHSIDE MARKET AREA Market penetration relative to competitors is a standard tool for measuring the adequacy and performance of a motorcycle dealership. Market penetration is determined by Yamaha by use of: (1) R. L. Polk Company (hereinafter "Polk") motorcycle statistics based on state and county new motorcycle registrations, (2) Yamaha warranty registrations for its existing dealers categorized by dip code designation, and (3) population-per-dealer statistics. (Testimony of Lamprecht.) According to Polk, the four largest selling motorcycle brands in the United States are Honda, Yamaha, Kawasaki and Suzuki. The relative penetration of Yamaha during the year 1982, through October, in comparable market areas is as follows: UNITED STATES Honda - 42.3 Yamaha - 23.2 Suzuki - 14.8 Kawasaki - 13.6 SOUTHEASTERN REGION Honda - 50.1 Yamaha - 20.0 Suzuki - 13.5 Kawasaki - 12.0 DUVAL COUNTY Honda - 48.7 Kawasaki - 18.7 Yamaha - 16.4 Suzuki - 10.9 In both the United States and the Southeastern Region, Yamaha is number two in registrations, but in Duval County Yamaha has dropped to number three below Kawasaki. (Testimony of Lamprecht; P.E. 6.) During the past five years (1978 through October, 1982), Yamaha's market share of Polk registrations in Duval County has been well below both the Southeastern Region and the United States. In 1982, through the month of October, Yamaha's market shares in these areas of comparison were: United States 23.2 Southeastern Region 20.0 Duval County 16.4 Yamaha's market penetration, or share of total import sales, of 16.4 percent in Duval County is 3.6 percent behind its penetration in the Southeastern Region of 20 percent, and 6.8 percent behind its national market share of 23.2 percent. (Testimony of Lamprecht; P.E. 5.) Market penetration is also determined by Yamaha through population- per-dealer statistics. Based upon 1980 census figures, Yamaha has one dealer for every 139,155 people in the United States. In Duval County there are 287,350 people for each of Yamaha's two existing dealers, which is twice the national average. With three dealers in Duval County, the ratio would be one dealer for every 191,567 people, which is still substantially higher than Yamaha's national and regional penetration, and is an indication or explanation that Yamaha's market share in Duval County is lower than it is for the United States and the Southeastern Region because there are not enough dealers to serve the area. (Testimony of Lamprecht; P.E. 7.) Yamaha warranty registration records indicate that its dealers make most of their sales within the general area surrounding their dealerships. This is attributable to the shopping habits of customers; people prefer to purchase motorcycles and have them serviced from dealers which are convenient, close by, and readily accessible to where they live and work. In this case, the Protestant's sales experience is consistent with this customer preference. (Testimony of Lamprecht.) During the period from January 1, 1981, through August 31, 1982, Yamaha has determined that most of the Protestant's motorcycle sales occurred in the Southwest Jacksonville market area from the heavy concentration of population around its dealership. In 1982, through the month of August, the Protestant sold only three Yamaha motorcycles in the Northside market area out of a total of 140 Yamaha sales during that period, or 2.1 percent of its total sales. The Protestant's concentration of sales for the entire year 1981 showed the same pattern, and only 8.4 percent of its total sales were in the Northside market area. (Testimony of Lamprecht; P.E. 11 and 12.) Yamaha's warranty registration records show that during the year 1981, the Protestant sold 113 motorcycles in Southwest Jacksonville zip code areas which, spread over the total population in the area of 58,643, indicates a sales ratio of one motorcycle unit per 519 persons in the Southwest Jacksonville market area. (Testimony of Perry.) During the period from January 1, 1981, through August 31, 1982, Yamaha has determined that most of Turner's motorcycle sales occurred in the Southeast Jacksonville market area concentrated around its dealership. In 1982, through the month of August, Turner sold only ten Yamaha motorcycles in the Northside market area out of a total of 107 Yamaha sales during that period, or 9.3 percent of its total sales. Turner's concentration of sales for the entire year 1981 showed the same pattern and market area. (Testimony of Lamprecht; P.E. 9 and 10.) Yamaha's warranty registration records show that during the year 1981, Turner sold 103 motorcycles in Southeast Jacksonville zip code areas which, spread over the total population in the area of 181,982, indicates a sales ratio of one motorcycle unit per 1,767 persons in the Southeast Jacksonville market area. (Testimony of Perry.) Yamaha's warranty registration records further show that during the year 1981, Turner and the Protestant sold only 39 motorcycles in Northside zip code areas which, spread over the total population in the area of over 140,000, indicates a sales ratio of one motorcycle unit per 3,675 persons in the Northside market area. (Testimony of Perry.) The Protestant and Turner are not reaching the potential motorcycle market in the northern part of the city and, as a result, Yamaha representation and market share in Duval County market is inadequate. (Testimony of Lamprecht and Ewing.) ECONOMIC VIABILITY OF A NEW DEALERSHIP ON THE NORTHSIDE Turner now operates an efficient and profitable Yamaha/Suzuki motorcycle dealership on Beach Boulevard, and its sales during October, November and December, 1982, have been the best the dealership has had in seven years. (Testimony of Turner and Ewing.) Turner has been operating a Suzuki dealership on the Northside since September 1, 1982. Suzuki sales at that location through Christmas were within projections, and the business is operating on a break-even basis. Turner's Suzuki sales during this period were made primarily to customers living in the Northside zip code areas. (Testimony of Turner.) The average motorcycle consumer is a male, age 18 to 34, blue-collar worker, in the lower-middle to middle class. The Yamaha line is designed to capture a market for all age consumers. (Testimony of Lamprecht and Ewing.) The Northside has a population of over 140,000 persons, or 20 percent of the Duval County population. This population is essentially made up of middle or lower-middle income, blue-collar and clerical workers having a basic income of between $16,000 and $18,000 a year. This represents the backbone of the Duval County labor force and economy. The average family home in this area has a market price of approximately $30,000. All of these factors suggest that the Northside area has a good stable population of lower-middle income persons with purchasing power to buy motorcycles, and the area can be expected, like the rest of Duval County, to expand over the next ten years. (Testimony of Perry.) Retail sales studies made by Yamaha in the Southeastern Region establish that through the last quarter of 1982 there has been no change in retail sales from 1981 to 1982. (Testimony of Lamprecht.) Motorcycle registrations for Duval County for fiscal years 1977-1978 through 1980-1981 have shown a modest, stable increased trend consistent with the population growth, and such trend is expected to continue. (Testimony of Perry; P.E. 14.) The location of a Yamaha dealership on the Northside at the proposed Lem Turner location will not operate to reduce sales on the part of the Protestant or Turner. The dealership located in a presently unrepresented area will assist Yamaha in further penetration of the Duval County market. By increasing the visibility of Yamaha generally, the additional facility will increase demand and brand awareness for all Yamaha dealers along, with a greater degree of competition in sales and service. While the Protestant and Turner can offer Yamaha motorcycles to potential customers in the Northside Area, they cannot stimulate such sales as well as a specific dealership in that location could.
The Issue The issue is whether the Dealer Sales and Service Agreement which Gus Machado Buick-GMC, Inc., has with Buick and GMC Truck Divisions of General Motors Corporation may be terminated by General Motors for abandonment under Section 320.641, Florida Statutes (1989), because Machado Buick failed to engage in business for more than ten consecutive business days.
Findings Of Fact Gus Machado is a Cuban-American. He purchased a Buick-GMC Truck dealership formerly known as Seipp Buick in Hialeah on March 3, 1982, after Mr. Machado had been in the automobile business for more than 30 years. The purchase price for the dealership, including the 6.25 acres of real estate on which the dealership was located, was about $4.5 million, $3 million of which was financed. The loan was secured by a mortgage on the dealership's real estate. Shortly after Mr. Machado purchased the dealership, he transferred the ownership of the real estate to himself, and leased it back to the dealership entity known as Gus Machado Buick-GMC, Inc., of which Mr. Machado is the sole shareholder. When he did this, General Motors told Mr. Machado that it regarded the rent to be charged to the dealership as excessive, but Mr. Machado believed that the rental payments were set in the amount which the dealership could pay given his projected sales volume. Mr. Machado was the only Hispanic dealer for the Buick Division in Dade County, Florida. The City of Hialeah is overwhelmingly Hispanic. The staff of the dealership was about 80 percent Hispanic. Mr. Machado focused his marketing efforts on Hispanic customers. The dealership's sales volume increased from about $19 million fiscal in year 1982, to $26 million in fiscal year 1983, the first full year Mr. Machado owed the dealership, to as much as $36 million dollars in later years. Buick recognized Mr. Machado's achievements in the sale of Buick motor cars by designating him the No. 1 Hispanic dealer in the country for a number of years. From 1983 to 1985, the dealership was profitable, and that profit enabled Mr. Machado to purchase a $2 million home in 1985 in an exclusive area. He renovated it from 1985 to 1990 at a substantial cost (about $7 million dollars) which Mr. Machado paid for with cash from his personal funds. 1/ Profitable times continued through the 1987-1988 models years. In 1987 Mr. Machado refinanced the dealership real estate for $4 million, which increased the amount of the mortgage on the property by $1 million. He then distributed that cash to his various companies, which included 1) a separate Ford dealership also located in Hialeah, Florida, 2) a Budget Rental Car day rental business in Puerto Rico, and 3) a long-term automobile leasing business in Puerto Rico. In 1987, Mr. Machado received a $1,306,000.00 dividend distribution from Gus Machado Buick-GMC. Mr. Machado received no salary from Gus Machado Buick-GMC in 1987, but he did receive the annual rental payments from the dealership over and above the dividend distribution and the $1 million obtained from refinancing the real property on which the Buick-GMC Truck dealership was located. After the increase in the mortgage obligation, Gus Machado Buick-GMC Truck paid $107,100.00 in rent to Mr. Machado, in addition to repayment of the mortgage, taxes, insurance, and repairs on the property. The automobile business is inherently cyclical, and sales of cars from the Buick-GMC Truck franchise began to fall off in the 1988 model year and matters became worse in 1989. At the same time, Buick generally lost market share in 1989 and 1990. This difficult period coincided with the closure of several General Motors dealerships in Dade County. The evidence is insufficient to demonstrate exactly why any one of those dealerships failed. The relative increase in popularity of foreign, especially Japanese, automobiles may have played some part in their financial difficulties. Too little is known of their management to make any finding about whether those failures resulted from poor management, poor times for the automobile industry as a whole, problems with the design, engineering, sales or service of General Motors automobiles, or some combination of all of these factors. Mr. Machado also had an unusual problem because of his Hispanic market. The fall of communist regimes in Europe led many Hispanics to believe the downfall of Castro was imminent. They became inclined to save money to invest in a new free market in Cuba. This also depressed sales of new cars and trucks to some degree. The extent of lost sales due to these beliefs was not, and probably could not be quantified. During this period of decline, Mr. Machado came to believe that it would be an advantage to add another line of automobiles to his dealership. Multiple point dealerships were becoming more common, and his dealership was large (6.25 acres) and could handle another line. He sought the assistance of the Buick Division in adding another franchise to his dealership. Mr. Machado also attempted to reduce his inventory, labor and advertising expenses in an effort to control costs. Mr. Machado's problems were greatly compounded when he discovered, in 1989, that his two Puerto Rican companies were in serious financial difficulty as the result of mismanagement. Mr. Machado had not been deeply involved in their day-to-day management. One of the problems in Puerto Rico was that vehicles in the lease fleets were being disposed of "out-of-trust," which meant that automobiles for which Mr. Machado had received financing through General Motors Acceptance Corporation were being disposed of at retail without repayment of their financed purchase price. In the automobile industry, this is regarded as a serious breach on the part of the borrower in his dealings with his financing source. The total outstanding obligations for the two Puerto Rican businesses exceeded $12 million. The magnitude of the Puerto Rican losses required that these businesses become the focus of attention by Mr. Machado. From July 1989 to November of 1990, he began to devote the greatest portion of his time to management of those distressed companies by spending four days of each week in Puerto Rico. Mr. Machado's management efforts were rather successful. Ultimately, the two Puerto Rican companies were sold or liquidated, and at that time the debt owed to GMAC for the Puerto Rican operations had been reduced from $12 million to $2 million. While Mr. Machado devoted most of his attention to his Puerto Rican businesses, the responsibility for the day-to-day operation of the Buick-GMC dealership in Hialeah was left to Mr. Machado's wife, who had worked in real estate, but never in the automobile business, and the senior employees at the Buick-GMC Truck dealership. The operation of a new car dealership is quite complex. A dealership contains five distinct profit centers, new vehicle sales, used vehicle sales, parts sales, vehicle service, and finance and insurance. One of the most difficult aspects of the management of a new car dealership is maintaining adequate cash flow. For example, a dealership does not realize its profit immediately after performing warranty work on a vehicle or upon the sale of a car. Through billing cycles the profit may not show up on the books for some time. Having adequate working capital is necessary so that the dealership is able to pay its obligations as they mature, even though when comparing total assets to total liabilities, the dealership may be solvent. Mrs. Machado did attend a 30 day dealership management course, but that course is not one designed to qualify a person to manage a dealership, rather it is designed by General Motors to provide family members of a dealer with an introduction to dealership management. That training, plus active participation in dealership management, may ultimately qualify that family member, such as a daughter or son, to take over a dealership. It was too limited to give Mrs. Machado the training, or especially the experience, to lead the dealership through a trough in the automobile sale cycle. Mrs. Machado did have the assistance of the dealership's general manager, comptroller, and the managers of the various departments. This is not a substitute for the experienced oversight of the dealership owner, however. Misplaced reliance on on-site managers for Mr. Machado's Puerto Rican operations had lead to the very serious financial problems of those businesses. Gus Machado Buick-GMC Truck sold a larger number of Buick automobiles and GMC trucks in 1989 than the dealership had sold in 1987. Ironically, 1987 was a profitable year, but 1989 was not, even though the gross profit per unit sold in 1989 ($1,171 for cars and $1,210 in trucks) was slightly higher than the gross profit per unit sold in 1987 ($1,166 for cars and $1,019 for trucks). Mr. Machado ultimately requested assistance from Buick in attempting to identify a potential purchaser for his Buick-GMC Truck dealership. General Motors commonly receives these sort of requests from its dealers. A manager for Buick did locate one prospective buyer and Mr. Machado had some contact with him, but nothing came of it. The most serious problem which Gus Machado Buick-GMC Truck ultimately encountered, and which forced its closure in February 1991, was the loss of its floor plan financing through General Motors Acceptance Corporation (GMAC) in late May or early June of 1990. Although credit difficulties began earlier, they came to the fore in mid to late December 1989 after Mr. James R. Hardesty became the branch manager for the GMAC office which handled dealerships in Miami. Mr. Machado met with Mr. Hardesty in January of 1990 because Mr. Hardesty was concerned about Gus Machado Buick-GMC Truck's credit worthiness. A check written to GMAC by the dealership to pay off a vehicle sold at retail had been dishonored by the dealership's bank, Consolidated Bank. This was not a good footing on which to begin Mr. Machado's relationship with Mr. Hardesty. GMAC had extended floor plan financing for new and used vehicles at the Buick dealership, and also had made a $600,000 loan to the dealership, but Mr. Hardesty believed that the books of the Buick dealership showed insufficient working capital available for the day-to-day operation of the business. Under the separate Dealer Sales and Service Agreement which Mr. Machado had with General Motors, the dealership was required to maintain a minimum net working capital of $2 million. Mr. Machado agreed to infuse additional working capital into the business, although Mr. Hardesty did not require that Mr. Machado obtain a specific amount of additional capital. Mr. Machado acknowledged at hearing that he knew the business needed $600,000 to $700,000 in working capital. Mr. Hardesty knew that the dealership was losing money and was being run on a day-to-day basis by Mrs. Machado, not Mr. Machado. This did not give him a great deal of confidence in the dealership's management team. GMAC had other problems in its relationship with the Machado dealership. Even before Mr. Hardesty came to Miami, GMAC was not receiving timely interest payments on the Machado Buick inventory it had financed, on the $600,000 loan GMAC had made to the dealership, or timely payment on dealer reserve chargebacks. Audits of the dealership inventory revealed GMAC was not being paid in a timely manner when cars were sold at retail, which required GMAC to conduct audits of the cars on the Machado lot more frequently than had been customary. One of the things Mr. Hardesty did was to require that for any unit which Gus Machado Buick-GMC Trucks sold, the floor plan financing for that car would have to be paid off within 24 hours of sale. This requirement was consistent with the written agreements which Mr. Machado had with GMAC. It was the practice in the industry, however, for GMAC to permit dealers in good financial condition more time to pay off cars, perhaps as much as three to four days. By insisting on the 24-hour pay-off, Gus Machado Buick-GMC Truck had less float, and consequently needed more working capital. The 24-hour pay-off requirement had the effect of requiring Mr. Machado to infuse the equivalent of about $120,000 working capital into his business in order to keep current on the dealership's bills. Mr. Machado understood Mr. Hardesty's position. When Mr. Hardesty also attempted to obtain additional security through a mortgage on the dealership property, however, Mr. Machado declined. After the initial meeting, the relationship between GMAC and Gus Machado Buick-GMC which began on a difficult footing because of the returned check became more rocky. Mr. Hardesty discovered that checks written to GMAC were being paid only because the bank used by Gus Machado Buick-GMC Truck, Consolidated Bank, provided the dealership with overdraft protection. In effect, the Machado dealership did not have sufficient working capital to pay off the wholesale financing on cars it was selling and was relying on ad hoc extensions of credit by its bank in order to pay off the GMAC liens on those cars. This was an indication of severe lack of working capital in the dealership. Overdraft protection gives the bank the option to hold a check for up to three days before deciding whether to pay it. This put the floor plan financing entity at considerable risk because cars sold by Gus Machado Buick-GMC Truck had an average pay-off due to GMAC of $15,000 per unit. Over three days Consolidated Bank could accumulate substantial dollar volume in checks presented by GMAC for payment. GMAC would not know for three days whether checks it received from Gus Machado Buick-GMC Truck to pay off the financing on those units which had been sold to third parties would be honored. Moreover, the dealership had significant loans from Consolidated Bank, which could exercise a set-off right against the funds in the Machado account to be used to pay off the GMAC liens. For these reasons Mr. Hardesty insisted that Mr. Machado move his dealership account to a bank which did not provide overdraft protection and did not have other loans to the dealership. The checking account was moved to Southeast Bank. The Machado dealership still did not make timely payments on its wholesale interest obligations and on the $600,000 capital loan which GMAC had made to the dealership. Audits conducted by GMAC of the cars on hand at the dealership revealed that vehicles were being delivered to retail customers without payment being made to GMAC within the time period allowed. Perhaps worst of all, GMAC found that the debt which it had loaned Gus Machado Buick-GMC Truck $600,000 to pay off (see Finding 17) had not been paid, and no satisfactory explanation could be made about what had happened to that money. Over several meetings, Mr. Hardesty stressed to Mr. Machado that it was imperative that additional working capital be provided to the dealership in order for GMAC to continue its relationship as the floor plan financing entity for Gus Machado Buick-GMC. Mr. Machado had difficultly in obtaining additional capital because he had chosen to make substantial investments in real estate, including the purchase and renovation of his home. Mr. Machado repeatedly gave assurances to Mr. Hardesty that he would infuse additional capital into the dealership, but did not do so. After the dealership account had been moved to Southeast Bank, in May of 1990, GMAC received checks for seven or eight cars which had been delivered to retail customers which were dishonored by Southeast Bank. Had the Machado account remained at Consolidated Bank, those checks might have been paid by Consolidated Bank using overdraft protection. The significant point, however, is not only that the checks were returned, but that the returns demonstrated that the Machado dealership continued to have inadequate working capital to pay the business' debts as they matured. This lead Hardesty to put Mr. Machado's credit line on hold, which meant that GMAC would not automatically finance new cars for the dealership. Mr. Machado would have to discuss any new purchases with Mr. Hardesty, who would make a decision of whether or not to finance them. Thereafter, Mr. Machado presented to Mr. Hardesty a deposit slip showing that $300,000 had been deposited in the Gus Machado Buick-GMC Truck dealership's working account as additional working capital. Mr. Machado asked that the normal credit relationship be reestablished. Mr. Hardesty discovery shortly thereafter that two days after that deposit was made, $200,000 had been withdrawn and applied elsewhere, and the remaining $100,000 had been used to cover a bank overdraft. The dealership's recent history of problems, including 1) the manipulation of the $600,000 GMAC loan which had been extended to extinguish a dealership debt, 2) the failure to make timely payments to GMAC on that loan and on interest due on floor plan financing, 3) the dealership's repeated overdrafts, 4) the several returned checks, 5) the lack of candor of Mr. Machado in attempting to mislead Mr. Hardesty into believing that $300,000 had been deposited into the business as additional working capital, 6) the dealership's monthly operating losses, and 7) the operation of the dealership by Mrs. Machado, who was not an experienced dealer, led Mr. Hardesty to believe that Gus Machado Buick-GMC was not credit worthy. He suspended the dealership's floor plan financing. The effect of that suspension was dramatic. General Motors will not build cars for a dealer unless the dealer posts a large cash deposit or had an arrangement with a financial institution to pay General Motors for the cars to be built. Mr. Machado was unable to purchase any new automobiles and had to operate only with its remaining inventory. GMAC did not, as it might have, repossess the existing inventory. Without floor plan financing, however, the only way for Gus Machado Buick-GMC Truck to acquire new vehicle inventory was to pay for it with cash, which Mr. Machado could not do. Mr. Machado did attempt to obtain alternate financing. Due to the difficult conditions in the banking industry, Mr. Machado was not able to find a bank willing to take on floor plan financing for his dealership, and although he approached Ford Motor Credit to provide floor plan financing for the automobiles at his Buick dealership, it was unwilling to do so. The suspension of the line of credit by GMAC, as a practical matter, scared off other lenders. The reasons GMAC had for suspending the line of credit should independently have lead any prudent lender in possession of all the facts to a similar conclusion. Lending money to Gus Machado Buick-GMC Truck at that time was risky business. As the inventory of new cars dwindled, so did sales. Many dealership employees were let go. By early November of 1990, Buick Motor Car Division learned that Mr. Machado was considering converting his dealership property into a shopping center. A Buick employee spoke to Mr. Machado and expressed concern about the use of the dealership property in a manner contrary to the terms of the Dealer Sales and Service Agreement. Mr. Machado stated that if the plan to change the use of the dealership property came to fruition, he would like to discuss relocation alternatives with Buick at that time, but it was too premature to consider a relocation of the dealership yet. Mr. Machado acknowledged that any request for relocation would have to be made in writing. In the fall of 1990 Mr. Machado was sued for $7 million by AmeriFirst for a default with respect to the $4 million loan on the dealership property and a separate mortgage on Mr. Machado's Ford dealership for $3 million. Suits were also filed against him by Universal Bank for $210,000, the Bank of Boston for $300,000 for loan defaults, and another suit was filed by a former employee for $21,000. As late as November of 1990, Mr. Machado believed that the Buick dealership could become profitable if it had the necessary inventory of new vehicles and he was able to devote all of his time to management of the dealership. By February 1, 1991, the Machado Buick-GMC Truck dealership ceased operation. It did not have a sales and service facility open and available for work eight hours a day, five days a week, excluding holidays. General Motors advised Mr. Machado on March 5, 1991, that 15 days from the date of that notice the Dealer Sales and Service Agreements Mr. Machado had would be cancelled because the dealership had been closed for more than ten business days, in violation of the agreement. By letter of March 11, 1991, Mr. Machado asked to relocate his dealership to a facility which was then a Mohawk Tire store. That facility did not meet the requirements for dealer operations, and would require extensive modification and enlargement. In addition, Mr. Machado did not have any assurance that if he could arrange to remodel that location he could also obtain the necessary floor plan financing to operate the Buick-GMC dealership. Later, on July 25, 1991, Mr. Machado entered into a Sales Agreement for the Buick-GMC Truck franchise with Alan Potamkin, who either owns or is involved in the ownership of more than 55 automobile dealerships around the country, including General Motors dealerships. Mr. Potamkin has proposed to move the Buick-GMC Truck dealership to other locations in Hialeah or in Dade County. Mr. Potamkin submitted the necessary paperwork for review of a possible transfer of the Buick-GMC Truck dealership from Mr. Machado to Potamkin, but the acquisition agreement which was presented in evidence specifically shows that Mr. Machado is not selling the existing dealership's land or facilities to Mr. Potamkin. Consequently, he would have to find some other location for the Machado dealership. He could not merely take over the dealerships on the same terms and conditions which Mr. Machado had. The location and facilities necessarily would be different. Mr. Machado would be free to use the 6.25 acres on which the dealership was located for some different endeavor.
Recommendation It is RECOMMENDED that a final order be entered by the Department of Highway Safety and Motor Vehicles finding that Gus Machado Buick-GMC Truck, Inc., abandoned its Dealer Sales and Service Agreement with Buick and GMC Truck by failure to engage in business with the public since February 1, 1990, and that Mr. Machado has failed to prove that the closure of the dealership was due to any reason which would excuse its failure to conduct business under Section 320.641(4), Florida Statutes (1989). DONE AND ENTERED in Tallahassee, Leon County, Florida, this 9th day of April 1992. WILLIAM R. DORSEY, JR. Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 9th day of April 1992.
The Issue The issue presented here concerns the question of whether the Respondent, State of Florida, Department of Highway Safety and Motor Vehicles, Division of Motor Vehicles, should grant the Petitioner, Crown Pontiac, Inc., a motor vehicle dealer license in accordance with Section 320.642, Florida Statutes (1979), on the basis that the Petitioners in this cause, in the face of the challenge to Crown's licensure offered by the Respondent, B & L Motors, Inc., d/b/a Bert Jackson Imports, have proven that the existing Fiat automobile dealers in the proposed territory or community for licensure are providing inadequate representation for Fiat.
Findings Of Fact On May 5, 1980, the Petitioner Fiat Motors of North America, Inc., issued a letter of intent to grant a Fiat franchise to the Petitioner Crown Pontiac, Inc., d/b/a Crown Sportscar Center to sell Fiat automobiles. (See Petitioner Fiat's Exhibit No. 13 admitted into evidence.) The Fiat dealership would be located at the sportscar facility of Petitioner Crown's overall operation which is found at 5301 34th Street North, St. Petersburg, Florida. The Respondent B & L Motors, Inc., d/b/a Bert Jackson Imports, having learned of Fiat's intentions to grant the franchise to Crown, protested Crown's licensure before the Respondent, State of Florida, Department of Highway Safety and Motor Vehicles, Division of Motor Vehicles, that protest having been made in keeping with the terms of Section 320.642, Florida Statutes (1979). 2/ After receiving the Respondent, B & L Motors' Petition in protest, the Division of Motor Vehicles forwarded the case to the State of Florida, Division of Administrative Hearings for hearing pursuant to Section 120.57(1), Florida Statutes. That formal hearing was held on December 4, 1980. PARTIES Petitioner Fiat is an automobile distributor that offers Fiat motorcars for sale in the United States through its several franchise retail outlets. Its model line includes two sedans; the Brava and Strada, and two sports convertibles; the X1-9 and the Spider. The Petitioner Crown Pontiac is a retail outlet for the General Motors, Pontiac automobile, JRT-British Leyland, MG, Triumph, Jaguar and Rover, Peugeot, Nissan, and Honda, through its stores in St. Petersburg, Florida. It is the intention of Crown to sell the Fiat line through the sportscar part of its operation which now handles JRT-British Leyland products. The Respondent B & L Motors, is a retail outlet for Volkswagen automobiles, Fiats and Lancias. That dealership is located in Clearwater, Florida, within Pinellas County, Florida, the county in which St. Petersburg is found. The Respondent, Division of Motor Vehicles is an agency of the State of Florida with regulatory responsibility and authority, among those duties being the requirement to approve or disapprove the application for new motor vehicle dealer licenses in Florida sought by the prospective franchisees of the various automobile manufacturers and distributors. HISTORY OF FIAT DEALERSHIPS IN PINELLAS COUNTY, FLORIDA From 1965 through March 1, 1979, Fiat Motors of North America, Inc., had a licensed franchisee in St. Petersburg, Florida, the last of those Fiat dealers in St. Petersburg being Fifth Avenue Motors, Ltd., d/b/a International Motor Cars Limited. Notice of termination of the franchise of International was sent from Fiat on December 1, 1978, leading to the ultimate cancellation of the Florida license on March 2, 1979. Beginning 1967, Fiat has had a licensed franchise outlet in Clearwater, Florida, with B & L Motors becoming the franchise outlet in Clearwater in late 1974, and continuing to operate as a franchise outlet up through the time of the final hearing in this cause. Subsequent to the loss of the franchise by International and the cancellation of its Florida license on or about March 2, 1979, there has been no Fiat dealership in St. Petersburg, Florida. Crown had attempted to obtain the Fiat franchise by acquiring the Fiat franchise and Mercedes franchise held by Fifth Avenue Motors, Ltd., d/b/a International Motor Cars Limited. This agreement was to be consummated through an asset purchase agreement, a copy of which may be found as Petitioner Crown's Exhibit No. 2 submitted into evidence. This agreement was executed on November 1, 1978, but its terms and conditions were never carried out due to difficulty which Crown had in coming to terms with Mercedes on the purchase of that franchise. At present there is an ongoing law suit on that subject. In addition, vandalism and theft of certain parts that Crown was to purchase from Fifth Avenue has held up the contract. Fiat and Crown had begun their negotiations in October 1978 leading Fiat to make overtures to Crown to offer a franchise in early 1979, which was rejected by Crown at that time for reasons discussed above. There was contact between Crown and Fiat from March 1979 through March of 1980, and sometime in April or May Crown determined to go forward with the franchise agreement, notwithstanding the International dispute. This led to the May 5, 1980, intent to grant by Fiat and the ensuing request by Crown that the State of Florida, Division of Motor Vehicles issue a dealer license. (In connection with the question of a grant of a license to operate a Fiat dealership in St. Petersburg, the Respondent Division of Motor Vehicles had had a past policy of allowing a manufacturer to replace a dealer, within one year of the cancellation of the prior license, without entertaining protests from other competing dealers provided, further, the prior dealer lost its franchise agreement with the manufacturer. In this case, the one year grace commenced on or about March 2, 1979, and expired on or about March 2, 1980. See Joint Exhibit No. 1, affidavit of Henry C. Noxtine.) FIAT'S MARKET SHARE IN THE UNITED STATES, MAJOR MARKETS, PINELLAS COUNTY, ST. PETERSBURG AND CLEARWATER Petitioner Fiat's Exhibits Nos. 1 through 4, admitted into evidence are charts which depict the sale of import automobiles in the United States, with particular emphases on the sale of Fiat automobiles in the United States, Florida, Clearwater and St. Petersburg. Exhibit No. 1 shows the number of import auto sales as a percentage of total automobile sales in the years 1977, 1978, 1979, and the first nine months of 1980, for given market areas. From this chart, it can be seen that import automobile sales range from 17.3 percent through 18.4 percent, in 1977, depending on whether the study related to the United States, Florida, Clearwater or St. Petersburg to 27.6 percent through 28.9 percent for the first nine months of 1980, depending on which of the above referenced market areas was under consideration. Although the trend within the import market for automobiles showed an upturn as a percentage of total sales from 1977, through the first nine months of 1980, Exhibit No. 2 demonstrates that Fiat's percentage of total import sales range from a high United States percentage of 3.2 percent in 1977, to 1.6 percent in September 1980, thereby depicting a decline in overall sales of Fiat automobiles as a percentage of total imports sold in the United States. Of particular significance is the fact that the number of Fiat automobiles sold as a percentage of total imports in St. Petersburg is 2 percent in 1977, and 1.9 percent in 1978, at a time when a separate Fiat dealer was located in St. Petersburg and with the advent of the failure of the St. Petersburg dealership in 1979, the sales were 1.2 percent and in the first nine months of 1980, in which B & L was the sole Pinellas County dealer, those sales were only .5 percent in St. Petersburg. In the successive years, 1977 through the first nine months of 1980, Fiat sales in Clearwater were 2.7 percent, 2.2 percent, 2.7 percent and 1.8 percent, respectively. The figures related to Fiat sales in Clearwater in the years 1979 and 1980 and sales of Fiats in St. Petersburg in those two reporting years show a disparate break out in numbers of sales in Clearwater and St. Petersburg in those reporting years when contrasted with the 1977 and 1978 reporting years, which show the percentage of sales in Clearwater and St. Petersburg to be much closer. There are approximately 800,000 people in Pinellas County, Florida, with approximately 250,000 of those persons residing in St. Petersburg and 350,000 in the overall St. Petersburg area, which is in the southern part of the county. There is another major population center in the northern part of the county. Clearwater is the principle municipality in that area. St. Petersburg and Clearwater constitute separate and identifiable trading areas and territories within Pinellas County, Florida. In this connection, Exhibit No. 3 admitted into evidence shows Fiat's performance in 1979, in similar markets to that of Clearwater or St. Petersburg, outlining the Fiat registrations and the percentage of registrations of Fiat automobiles in those communities. This chart should be read in conjunction with Exhibit No. 4, which is admitted into evidence which shows the number of import sales in the St. Petersburg and Clearwater territories and the number of Fiat sales in those territories, together with the number of Fiat sales necessary to gain the 3.5 percent penetration and the increase in number of units sold to achieve that goal. There is a further hypothetical to demonstrate sales penetration at 5 percent and the number of prospective sales if the goal is achieved. Again, this is for the year 1979. Although the last reporting period, i.e., the first nine months of 1980, shows that the overall Fiat sales nationwide are 1.6 percent and the Florida sales are 2.2 percent, sales in what Fiat has called its "major markets" approximated 2.7 percent in 1979. It is within the "major markets" that Fiat intends to offer its future emphasis and these areas are felt to be crucial to the continued success of Fiat Motors. Sales in Clearwater and St. Petersburg, which are considered "major markets," range from .5 percent in St. Petersburg to 1.8 percent in Clearwater for the reporting period 1980, far below the 2.7 percent or even the national and Florida figures for 1980, when examining performance in St. Petersburg. The balance of Exhibits Nos. 1 through 4 by the Petitioner Fiat, although not discussed in this Recommended Order are found to be factually correct. COMPETITION Within Pinellas County, Volkswagen has two franchise dealers; British Leyland has two franchise dealers; Honda has two franchise dealers; Toyota has three franchise dealers; Dodge has three franchise dealers; Plymouth has three franchise dealers; Subaru has three franchise dealers; and Chevrolet and Ford have four franchise dealer outlets. Again referring to the charts Exhibits Nos. 1 through 4, they would show an increase in percentage of market share by the import automobile industry at a time when the overall numbers of automobile sales have declined, and of those automobile sales in decline, at lease two competitive import product lines, Volkswagen and British Leyland, have been part of the picture of general decline. Nonetheless, they have continued to have two franchises within Pinellas County. EFFECT OF INCREASING FIAT DEALERSHIPS IN PINELLAS COUNTY By increasing the number of Fiat dealerships from one to two, it increases the presence of the Fiat name in the territory by 100 percent. It adds a dealership with proper facilities for furnishing warranty and other repair services, by an organization that has already gained familiarity with the Fiat line; it creates the opportunity for the exchange of vehicles and parts between dealers in the county; it creates the opportunity for the public to engage in comparison shopping and it reduces the amount of time which South County owners must travel to receive factory approved service which now ranges from thirty minutes to an hour if the service is to be obtained from B & L Motors. All of these items relate to the success of Fiat and its franchisees in marketing the Fiat product. In this regard, the statistics offered in this hearing demonstrate that the Respondent B & L has continued to keep pace with Fiat's needs in the market in Clearwater, but it has failed take up the slack that occurred when International lost its franchise. The Petitioner Crown is in a position to assist Fiat in regaining this market share without undue detriment to the Respondent B & L. Crown, in its other automobile sales activities, has primarily concentrated on the southern half of Pinellas County, which is the St. Petersburg area or territory and it would use that experience in the market area in attempting to sell Fiat automobiles to the consuming public.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the application of Crown Pontiac, Inc., d/b/a Crown's Sportscar Center, to be licensed as a Fiat dealer in St. Petersburg, Florida, be GRANTED. DONE AND ENTERED this 13th day of February 1981 in Tallahassee, Florida. CHARLES C. ADAMS Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 13th day of February 1981.
Conclusions This matter came before the Department for entry of a Final Order upon submission of a Recommended Order of Dismissal by Administrative Law Judge Jeff B. Clark, of the Division of Administrative Hearings, pursuant to non-compliance to the requirements set out in the Order to Show Cause-—for both parties to file responses no later than August 7, 2009 as to why this matter should not be closed based on lack of response to the Initial Order. The Department hereby adopts the Recommended Order of Dismissal as its Final Order in this matter. Accordingly, it is hereby ORDERED that this case is CLOSED and no license will be issued to Galaxy Powersports, LLC d/b/a JCL International, LLC and Wild Hogs Scooters and Motorsports, LLC to sell motorcycles manufactured by Taizhou Zhongneng Motorcycle Co. Ltd. (ZHNG) at 3311 West Lake Mary Boulevard, Lake Mary (Seminole County), Florida 32746. DONE AND ORDERED this /7“ day of September, 2009, in Tallahassee, Leon County, Florida. L A. FORD, Direct Division of Motor Vehicles Department of Highway Safety and Motor Vehicles Neil Kirkman Building Tallahassee, Florida 32399 Filed with the Clerk of the Division of Motor Vehicles this_/D#}) day of September, 2009. - Vinayak, Dealer Administrator NOTICE OF APPEAL RIGHTS Judicial review of this order may be had pursuant to section 120.68, Florida Statutes, in the District Court of Appeal for the First District, State of Florida, or in any other district court of appeal of this state in an appellate district where a party resides. In order to initiate such review, one copy of the notice of appeal must be filed with the Department and the other copy of the notice of appeal, together with the filing fee, must be filed with the court within thirty days of the filing date of this order as set out above, pursuant to Rules of Appellate Procedure. CAFivlg Copies furnished: Leo Su Galaxy Powersports, LLC d/b/a JCL International, LLC 2667 Northhaven Road Dallas, Texas 75229 Jason Rupp Wild Hogs Scooters and Motorsports, LLC 8181 Via Bonita Street Sanford, Florida 32771 James Sursely Action Orlando Motorsports 306 West Main Street Apopka, Florida 32712 Michael J. Alderman, Esquire Department of Highway Safety and Motor Vehicles Neil Kirkman Building 2900 Apalachee Parkway, Room A432 Tallahassee, Florida 32399 Jeff B. Clark Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 Nalini Vinayak Dealer License Administrator Florida Administrative Law Reports Post Office Box 385 Gainesville, Florida 32602
Findings Of Fact The Petitioner, Lake Wales Chrysler-Plymouth Dodge, Inc. has applied to the Department of Highway Safety and Motor Vehicles for a license as a motor vehicle dealer to sell new Chrysler, Plymouth, and Dodge vehicles. The Petitioner proposes to locate the new dealership at 1900 U.S. Highway 27 North, Lake Wales, Florida, which is in Polk County, Florida. The Petitioner, Chrysler Motors Corporation is willing to enter into an agreement with Lake Wales Chrysler-Plymouth Dodge, Inc., establishing a new dealership in Lake Wales if a license is obtained. Chrysler Motors Corporation is a licensed motor vehicle manufacturer qualified to do business in the State of Florida and licensed pursuant to Chapter 320, Florida Statutes. Tom Edwards, Inc., is a licensed and franchised new car dealership located at 690 East Main Street, Bartow, Florida, in Polk County, Florida. T. 308. Tom Edwards, Inc., initially opened in 1973 with four lines, Chrysler, Plymouth, Dodge, and Dodge Trucks. T. 309. Tom Edwards, Inc., has been in operation continuously since 1973, and now sells Chrysler, Dodge, and Dodge Trucks, but does not sell Plymouth. T. 98-99. On January 27, 1987, Tom Edwards, Inc., filed with the Department of Highway Safety and Motor Vehicles a formal protest against the grant of a license to Lake Wales Chrysler-Plymouth Dodge, Inc. On February 27, 1987, the Department of Highway Safety and Motor Vehicles referred the application and protest to the Division of Administrative Hearings to conduct a formal administrative hearing pursuant to section 120.57(1), Fla. Stat. (1986). Chrysler Corporation has not contended and does not now contend that Tom Edwards, Inc., has breached its sales agreement. Tom Edwards, Inc., has satisfactorily met its sales agreement requirements with respect to fair market share since 1982, and has received several "5 star awards" from Chrysler. Chrysler Corporation has never in writing advised Tom Edwards, Inc., that it was dissatisfied with penetration in the Bartow or Lake Wales sales localities, or in comparison to other dealerships in Polk County. Chrysler Corporation does contend, however, that recent registrations of Chrysler vehicles in Polk County and the Lake Wales sales locality are inadequate when compared to recent Chrysler registrations in the United States and in what is known as the Orlando zone, and that this inadequacy has occurred despite sales potential and efforts by all Chrysler dealers wherever located. Whether Chrysler Corporation has assigned Tom Edwards, Inc., to represent the Lake Wales sales locality In May, 1980, the Chrysler dealership in Lake Wales, Florida, closed. T. 310-11. Chrysler Corporation asked Tom Edwards, Inc., if it would advertise in the yellow pages of the telephone directory in Lake Wales, and offered to pay the cost. T. 310. Tom Edwards, Inc., agreed, and took out advertising in the 1981 Lake Wales yellow pages. T. 310-11. Tom Edwards, Inc., has advertised in the Lake Wales yellow pages continuously since then. T. 311. By 1985, Chrysler Corporation no longer paid the cost. The cost was billed to the parts account of Tom Edwards, Inc., by Chrysler. R. Ex. 7. Tom Edwards, Inc., does not limit its advertising to Lake Wales. It advertises in the telephone yellow pages in Bartow, Mulberry, Plant City, Lakeland, Winter Haven, Lake Wales, and Fort Meade. T. 375. Tom Edwards, Inc., also advertises in the Lakeland Ledger, a newspaper that circulates throughout all of Polk County, and on a radio station received throughout all of Polk County. T. 373-74. In short, all of the advertising by Tom Edwards, Inc., is county-wide. T. 375. In the sales agreement between Tom Edwards, Inc., and Chrysler Corporation, Tom Edwards, Inc., is assigned the Bartow sales locality, which includes post office towns near Bartow, but does not include the Lake Wales sales locality. T. 368. While Chrysler Corporation has encouraged Tom Edwards, Inc., to serve the Lake Wales sales locality through yellow page advertising, and has allowed Tom Edwards, Inc., to actively represent Chrysler Corporation in Lake Wales, Chrysler Corporation has not contractually assigned that sales locality to Tom Edwards, Inc. Economic impact upon Tom Edwards, Inc. for purposes of determining the existence of a substantial interest In 1986, Tom Edwards, Inc., sold 25 new motor vehicles in the Lake Wales sales locality for a gross profit of $31,257.93. T. 317-18. The total gross profit from Lake Wales customers in 1986, including service and parts, was $44,000. T. 320. It is inferred that Tom Edwards, Inc., would lose some of that gross profit if a new competing Chrysler dealership is established by the Petitioners. Determination of the community or territory of representation The Chrysler Corporation identifies sales localities for potential placement of dealerships, defining a sales locality as a principal town reasonably close and accessible from surrounding communities. T. 90. Chrysler Corporation designates sales localities in sales agreements with dealers. T. 91. Pursuant to such sales agreements, Chrysler holds the dealer responsible only for performance and adequacy of facilities with respect to the designated sales locality. T. 94. Chrysler has identified four sales localities in Polk County: Lakeland, Winter Haven, Bartow, and Lake Wales. T. 91; P. Ex. 0-6 and 1. These sales localities are separate geographic areas of Polk county. Chrysler has new vehicle dealerships in Lakeland, Winter Haven, and Bartow, but not in Lake Wales. P. Ex. 0-35 and 1. All of these dealerships carry Chrysler, Dodge, and Dodge Truck. The dealerships in Lakeland and Winter Haven also carry Plymouth. T. 99. Chrysler has selected a proposed site for a dealership in Lake Wales. T. 83. The driving time and distance between existing Chrysler dealerships or the proposed Lake Wales new dealership site are as follows: Lake Wales to Bartow: 17.3 miles, 22:20 minutes. Bartow to Lakeland: 15.6 miles, 27:43 minutes. Lakeland to Winter Haven: 17.5 miles, 31:40 minutes. Winter Haven to Lake Wales: 11.6 miles, 17:45 minutes. Bartow to Winter Haven: 11.0 miles, 17:05 minutes. T. 83-88. It is inferred that one-way driving times of 17 to 31 minutes, while not a major impediment to travel, are sufficiently large that for some types of social and economic activity, a resident of one of the four urban areas (Bartow, Lakeland, Winter Haven, and Lake Wales) may choose to stay within the area rather than to invest the round-trip time to travel to another area. The post offices serving Polk County serve only Polk County, and no part of Polk County is served by a post office outside of Polk County. T. 39. Polk County is designated by the United States Bureau of the Census as a statistical metropolitan area (SMA). T. 82. The statistical metropolitan area that is Polk County is composed of census tracts as depicted in P. Exs. C-7 and C-8. T. 109. The four Chrysler sales localities are roughly composed of the census tracts depicted on P. Ex. 9. T. 111. The differences between the sales localities as designated by Chrysler and the census tract boundaries are negligible for purposes of demographic analysis with respect to the four sales localities. T. 111-12. The estimated population for Polk County in 1986 was 375,997. T. 116. P. Ex. C-14 is a computer-generated map. Each dot represents 75 persons, but has been randomly placed within each discrete census tract by the computer, rather than located by actual residence. T. 114-16. With that limitation, P. Ex. C-14 shows that the census tracts associated with the cities of Lakeland and Winter Haven have the greatest concentrations of Polk County population, with secondary centers of population in Bartow, Haines City, and Lake Wales. From 1980 to 1986, Polk County population increased by 16.9 percent. T. 119; P. Ex. C-15. For the same period, Florida grew 18.9 percent, which was more than three times the national growth rate. T. 119. Almost all of the census tracts in Polk County experienced gain in population from 1980 to 1986. T. 118. The areas experiencing the highest net gain in population were the areas near the cities of Lakeland, Winter Haven, Haines City, and Bartow. P. Ex. C-15. The population of the Lake Wales sales locality increased by 13.47 percent. P. Ex. C-22. From 1986 to 1991, it is projected that the population of Polk County will grow by 11.9 percent, to a population of 420,606. T. 120; P. Ex. C-17. By 1991, the concentrations of population will continue to be in the same areas of concentration as in 1986. P. Ex. C-16; T. 120. The areas expected to have the greatest population gains are those near Lakeland, Winter Haven, Haines City, and Bartow. P. Ex. C-17. Census tracts 143 and 155, which comprise Lake Wales, indicate that Lake Wales itself will not have the same degree of population growth as the other four cities. Compare P. Exs. C-17 and C-7. T. 130-31. The Lake Wales sales locality is nonetheless expected to grow from about 35,447 persons to 38,887 persons from 1986 to 1991, a gain of about 9.7 percent. P. Ex. 0-22. A major portion of the growth of the Lake Wales sales area is expected to be in census tracts 154 and 156, which are southeast of the City of Lake Wales, as well as to the east. T. 129-132; P. Ex. C-22. The same demographic pattern is shown by analyzing the distribution and estimated change of households in Polk County. From 1980 to 1986, the number of households in Polk County increased by 21.12 percent, and the number is expected to increase by 15.3 percent by 1991. Areas nearest Lakeland and Winter Haven, followed by Haines City, and Bartow, showed the greatest concentration of gain in number of households in the 1980 to 1986 period, and are expected to see the greatest gains by 1991. P. Exs. C-18, C-19, C-20, and C-21; T. 122-24. However, households in the Lake Wales sales locality increased by 18.3 percent in the period 1980 to 1986, and the locality is expected to grow from about 13,487 households in 1986 to 15,321 households in 1991, an expected gain of 13.6 percent. P. Ex. C-22. New vehicle dealers all over Polk County advertise the sale of their new vehicles in the Lake Wales telephone directory. T. 89. At least one dealer, the Respondent, also advertises in telephone directories in other cities in Polk County, T. 375, and it is inferred that other dealers also advertise in such directories. The Lakeland Ledger is a newspaper published in Lakeland that is circulated throughout all of Polk County. T. 89-90. One new vehicle dealer advertises in the Lakeland Ledger, T. 373, and it is inferred that competitor dealers also advertise in the Lakeland Ledger. At least one new vehicle dealer advertises by radio that reaches all of Polk County, T. 374, and it is inferred that other dealers advertise by radio as well. With the exception of a few new vehicle dealerships in nearby Fort Meade, Haines City, and Frostproof, all new vehicle dealerships in Polk County that directly compete with the Chrysler line, not including foreign imports, are in and very near the four principal towns designated by Chrysler as the centers of sales localities. T. 97, 99-101; P. Ex. C-35 and 1. At least one new vehicle dealer in Polk County, the Respondent, sells a significant number of vehicles to purchasers located throughout Polk County, P. Ex. C-66, and it is inferred that competitor new vehicle dealers do likewise. Based upon the designation of Polk County by the Bureau of the Census as statistical metropolitan area, the location of the four major market areas within the interior of the county, the travel distances between the centers of those four markets, and the county-wide advertising and marketing behavior of existing new vehicle dealerships, Polk County is an appropriate geographical area to use for consideration of the market for the sale of new vehicles. Based upon the location of major highways, growth patterns and location of population centers, and location of retail trade centers, Polk County contains four major metropolitan centers for the marketing of new vehicles: Lakeland, Winter Haven, Bartow, and Lake Wales. T. 81-82; P. Ex. C- Each of these four markets are appropriate for consideration of the market for sale of new vehicles. In particular, the Lake Wales sales locality is an appropriate separate market with respect to analysis of the sale of new vehicles. Standards for determination of adequacy of representation "Penetration" is the term used in the marketing of new motor vehicles for the market share of a line of motor vehicles, or the degree of acceptance of that line of motor vehicles by the consumer in a given market area. T. 133-34. "Industry" means marketing performance of a particular product within a relevant market. One reliable way of measuring industry is by counting the number of new vehicle registrations in a market area. Such records are available in the official records of the State of Florida, and can be grouped into market areas by post office locality. T. 19-33. Registrations reflect the vehicles registered to persons located in a given area. The actual sale of the vehicle may have occurred in any area of the country, but is counted by the registered location of the new vehicle. T. 19- 20. The data presented by the Petitioners concerning new vehicle registrations was reliable. The Respondent did not present any evidence to cause a doubt as to reliability. Determination of the adequacy of Chrysler's current market share of new motor vehicles in Polk County and the four sales localities of Polk County requires the establishment of a benchmark of adequacy. T. 134, 190-91. A reasonable benchmark may be established by reference to market behavior in a geographic area that encompasses a broader spectrum of types of dealers and geographic characteristics than Polk County alone. T. 134. The benchmark geographic market areas proposed by the Petitioners are the Orlando zone and the United States. T. 134-36. Use of registrations performance in the United States for purposes of comparison to smaller markets is a standard practice in the new vehicle industry. T. 136. The Orlando zone is all of the State of Florida with the exception of the counties west of the Apalachicola River. T. 140. The Orlando zone contains only territory within the State of Florida. Id. Fleet sales are defined as the sale of ten or more new vehicles to a single purchaser in a calendar year. T. 137, 44. Fleet sales are not counted as retail sales. Id. The Orlando zone contains large metropolitan areas that have a substantial amount of rental car and other fleet business; Orlando, Miami, and Ft. Lauderdale are examples. T. 135. With its heavy fleet sales influence, the Orlando zone is less like Polk County and its four sales localities, and is more like the United States. T. 139, 150; P. Exs. C-36, C-38. The Lake Wales sales locality is almost exclusively an area of retail sales, with only about 3 percent of the industry of both cars and trucks devoted to fleet registrations. P. Ex. C-36, C-38. Nonetheless, the Lake Wales sales locality is more like the United States than the Orlando zone. Id. The Bartow sales locality is mixed. It has 17.1 percent of its car registrations in 1986 devoted to fleet registrations, which is the same as the United States, at 17.9 percent. P. Ex. C-36. The truck registrations are quite unlike either the United States or Orlando zone registrations. In 1986, Bartow had 36.6 percent fleet truck registrations, compared to 15.6 percent for the United States and 20.6 percent for the Orlando zone. P. Ex. C-38. The Winter Haven sales locality is more like Lake Wales. In 1986, its car sales registrations were 7.9 percent fleet, and 13.1 percent fleet for truck registrations. P. Exs. C-36, C-38. The Orlando zone is less like Polk County and its four sales localities than the United States with respect to imports and other vehicles as a percentage of total truck industry. T. 152; P. Ex. 39. With respect to imports as a percentage of car industry, the Orlando zone and the United States seem to be functionally the same, but each show larger percentages of imports than either Polk County or Lake Wales. P. Ex. C-37. Based upon the foregoing comparisons of fleet versus retail registrations, as well as comparison of the percentage of imports in the truck industry, it is more appropriate to compare Polk County and Lake Wales with the United States rather than to the Orlando zone. Comparison to the Orlando zone is still acceptable, however, though less acceptable than comparison to the United States. T. 140, 149, 216, 238-39. Adequacy of representation in Polk County and in the Lakes Wales sales locality The retail car industry in Polk County is about 86 percent of the total motor vehicle industry as measured by registrations in Polk County. T. 154. Thus, retail car sales is an important matter to consider in determining the adequacy of Chrysler penetration of the relevant market area. In 1984, the Chrysler corporate line registrations in Polk County were 8.9 percent of the retail car industry and 7.7 percent of the retail truck industry. The corporate registrations in the United States market 1984 were 9.9 percent and 12.7 percent, respectively. Thus, Chrysler registrations in Polk County lagged behind the United States market by 1.0 percent in cars and 5.0 percent in trucks. P. Ex. C-45. In 1985, the Polk County registrations for retail cars were 9.0 percent, 2.1 percent less than the United States percentage of 11.1 percent, and for retail trucks were 8.5 percent, which were 4.2 percent less than the United States percentage of 12.7 percent. P. Ex. C-45. In 1986, the Polk County registrations for retail cars were 7.1 percent, which were 4.0 percent less than the United States percentage of 11.1 percent, and for retail trucks were 7.0 percent, which were 5.0 percent less than the United States percentage of 12.0 percent. T. 154-58; P. Ex. C-45. Analysis of Chrysler penetration of the Lakeland, Winter Haven, Bartow, and Lake Wales sales localities in Polk County reveal substantially the same loss of market penetration as shown for Polk County as a whole. P. Exs. C- 46, C-47, C-48, C-49, and C-50; T. 159-69. In particular, registrations of new retail cars in the Lake Wales locality was 0.6 percent less than United States registrations in 1984, was 1.4 percent less in 1985, and was 4.1 percent less in 1986. Registrations of new retail trucks in the Lake Wales locality was 5.3 percent less than United States registrations in 1984, was 5.1 percent less in 1985, and was 4.8 percent less in 1986. P. Ex. C-50. For these years, Chrysler had registrations of 9.9 percent, 11.1 percent, and 11.1 percent for retail cars, and 12.7 percent, 12.7 percent, and 12.0 percent for retail trucks in the United States. Id. These are significant shortfalls. For example, the 1986 shortfall for retail cars in Polk County of 4.0 percent is, comparatively speaking, a loss of 36 percent of the potential market shown by the United States registrations. That is, United States registrations were 11.1 percent of total car retail industry, while Polk County registrations were only 7.1 percent; the shortfall, 4.0 percent, is 36 percent of 11.1 percent. The other shortfalls both in Polk County and in the Lake Wales sales locality are similar in comparison to the United States potential. The shortfall of penetration of the Polk County and Lake Wales markets has come during a period when the overall retail trade for cars in those markets has been increasing. In Polk County, the total number of cars registered at retail went from 11,530 to 12,191 from 1984 to 1986, but Chrysler registrations dropped from 1,025 to 866 in the same period. P. Ex. C-45. Similarly, retail truck registrations in Polk County increased in those years from 5,836 to 6,434, but the Chrysler share of those registrations held steady, from 448 to 451. Id. In Lake Wales, retail car registrations increased slightly, from 1,210 to 1,237 from 1984 to 1986, but the Chrysler share dropped from 113 to 86. P. Ex. C-50. The same analysis of Chrysler penetration of Polk County and the four sales localities was made, but comparisons were made to the Orlando zone statistics for registrations rather than to the United States registrations. P. Exs. C-60 through C-65; T. 171. The results were substantially the same as discussed with respect to the United States registrations. Retail buyers of new vehicles are motivated to buy due to price, style, and convenience. T. 177. While it is arguable that a round-trip of from 30 to 60 minutes is not a major impediment to a potential buyer of a new vehicle, nonetheless the buyer will very likely first stop at nearer dealerships, and may enter into a contract for purchase before reaching the more distant dealership. Thus, for the initial sale, a travel distance one-way of from 17 to 31 minutes could have a significant impact upon the sales by the more distant dealership. But more important, a buyer will tend to buy as close to home as possible since it is inferred that there may be a number of service trips during the warranty period of a new vehicle. A round-trip of from 30 to 60 minutes to deliver a car for service in the morning and again to pick up the car in the evening would be a significant impediment to sales by the distant dealership. Retail buyers, therefore, are more likely to buy close to home to avoid longer drives for the initial sale and subsequent service trips. T. 178. Polk County has substantially more Ford and General Motors dealerships than Chrysler dealerships. T. 174; P. Ex. C-35. There are nine Ford dealerships (two Lincoln-Mercury dealers), an apparent fifteen General Motors dealerships, and only three Chrysler dealerships in Polk County. Id.; T. 99- 100. Ford has 11 car line outlets represented through a storefront, General Motors has 20 car line outlets, and Chrysler has 8 line outlets in Polk County. P. Ex. 41; T. 176. Polk County has 7 places to buy a Ford, 6 places to buy a Chevrolet, 2 places to buy a Mercury, 2 places to buy a Lincoln, 4 places to buy a Buick, 4 places to buy an Oldsmobile, 4 places to buy a Pontiac, and 2 places to buy a Cadillac. Polk County has only 2 places to buy a Plymouth, 3 places to buy a Chrysler, and 3 places to buy a Dodge. Id. Tom Edwards, Inc., asserts that Polk County has comparatively more Chrysler sales outlets than Hills borough or Pinellas Counties. Since those counties have greater populations than Polk County, Tom Edwards, Inc., argues that there are too many Chrysler outlets now in Polk County. Respondent's proposed finding of fact 8. But an outlet in Hillsborough County, for example, typically has a much larger planning potential than an outlet in Polk County. Some have a planning potential of as much as 1,797. T. 305-07. Thus, an outlet in Hillsborough County may well be expected to serve many more people than an outlet in Polk County having a planning potential of only 225. (See the discussion of planning potential ahead.) The record lacks the type of comparative evidence and expert opinion to establish a proper comparative standard between counties. Thus, Ford and General Motors vehicles are more likely to be purchased than Chrysler vehicles by residents of Polk County due to the comparatively greater number of such dealerships and line outlets. T. 179-80; P. Exs. C-40. Chrysler Corporation establishes its own concept of the "planning potential" for a given sales locality based upon the size of the market, past sales, and zone penetration. T. 253. Chrysler Corporation sets its own standards for the size and character of buildings and land that should be a part of a dealership in a sales locality having a particular planning potential. T. 255. The Respondent's dealership is in the Bartow sales locality. The Bartow sales locality has a planning potential set by Chrysler of 225. T. 257. Chrysler's standard for the square footage of buildings and land for the Bartow sales locality is 40,950 square feet. T. 255. Thus, Respondent's dealership does not meet the standards set by Chrysler for the square footage of buildings and land. The Chrysler dealership in the Lakeland sales locality similarly has buildings and land of lesser square footage than set by Chrysler as a standard for the planning potential of that locality. T. 259-60. The Chrysler dealership in the Winter Haven sales locality has adequate land for its planning potential by Chrysler standards, but has inadequate square footage for buildings by Chrysler standards. T. 262-63. Based upon all of the foregoing, Chrysler Motors Corporation is not being adequately represented in either Polk County or the Lake Wales sales locality by Chrysler dealers located in Polk County, in Florida, or elsewhere in the United States. T. 183-84.
Recommendation For these reasons, it is recommended that the Department of Highway Safety and Motor Vehicles enter its final order approving the application of Lake Wales Chrysler Plymouth Dodge, Inc., for a license as a dealer of Chrysler, Plymouth, and Dodge automobiles, and Dodge trucks, Lake Wales, Florida. DONE and ENTERED this 24th day of September, 1987. WILLIAM C. SHERRILL, JR. Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 24th day of September, 1987. APPENDIX TO RECOMMENDED ORDER, CASE NO. 87-0962 The following are rulings upon findings of fact proposed by the parties which have been rejected in this Recommended Order. The numbers correspond to the numbers of the proposed findings of fact as used by the parties. Findings of fact proposed by the Petitioners: 24 through 28. These proposed findings of fact are true, but are subordinate to findings of fact adopted in the recommended order. These findings of fact, however, are adopted by reference. 38. Cumulative to other findings of fact, and thus not necessary. 42 through 44. These proposed findings of fact are true, but are subordinate to findings of fact adopted in the recommended order. These findings of fact, however, are adopted by reference. 47 through 65. These proposed findings of fact are true, but are subordinate to findings of fact adopted in the recommended order. These findings of fact, however, are adopted by reference. 74, 76, and 77. These proposed findings of fact are true, but are subordinate to findings of fact adopted in the recommended order. These findings of fact, however, are adopted by reference. 81 through 84. The statistics relative to domestic-import mix were significant only with respect to trucks. The truck percentages of penetration in Polk County (24.5 percent and 23.8 percent) were very similar to the percentages for respective penetration in the United States (23.1 percent and 23.4 percent). Lake Wales (20.0 percent and 20.5 percent) was less similar. The percentages in Polk County and Lake Wales for car were not sufficiently similar to either the zone or the United States for any conclusion to be drawn. Thus, the conclusion in proposed finding of fact 84 is rejected. 93 and 94. Cumulative to other findings of fact, and thus not necessary. 95. Cumulative to other findings of fact, and thus not necessary. Failure to meet the national average penetration is, by definition, failure of average penetration. 96 through 100. True, but cumulative to other findings of fact, and thus not necessary. The analysis in these proposed findings of fact simply views the numbers from another perspective. The basic numbers are the same. 101. The third sentence is an issue of law, not fact. 103. The fact that Mr. Edwards could not remember the name of the Chrysler representative is true, but does not persuade the Hearing Officer that his memory of the contact with a Chrysler representative was faulty. R. Ex. 7 clearly shows that the Chrysler Corporation took the initiative in a general sense to encourage Tom Edwards, Inc., to advertise in the yellow pages. 105. While R. Ex. 7 shows that Tom Edwards, Inc., alone paid for yellow pages advertising in the Lake Wales telephone directory in 1985, this is not evidence as to what happened in 1981. Mr. Edwards' testimony that Chrysler paid for such advertising in 1981 is believed rather than an inference to be drawn from 1985 evidence. Findings of fact proposed by the Respondent: 4. As discussed in the conclusions of law, the qualifications of the applicant to operate a new vehicle dealership are not relevant in this case. Further, the qualifications of the protesting dealership are not relevant either. There is no issue in this case concerning noncompliance with dealership agreements. The only issue is the adequacy of representation in the community or territory as shown by registrations of new Chrysler vehicles, regardless of origin. This proposed finding of fact is rejected for the reasons stated in finding of fact 63. This proposed finding of fact is rejected for the reasons stated in finding of fact 66. That the Respondent has been allowed and encouraged to sell vehicles in Lake Wales, or may be harmed economically if the Lake Wales dealership is established, may be important to show that the Respondent has a substantial interest and is entitled to a formal administrative hearing, but is essentially irrelevant to the question of whether the Petitioner's application should be approved. The question is whether Polk County and Lake Wales have adequate representation as shown by registrations of new vehicles, regardless of the origin of the sale. The Respondent did not present any evidence as to the historic comparative sales of General Motors, Ford, and Chrysler, or how such comparative data might be instructive as to the proper number of outlets that should be allowed based upon historic market share. If such evidence exists within the data presented by the Petitioners, it was the Respondent's burden to identify it either by testimony or by argument. It has done neither. Thus, the fifth through ninth sentences of this proposed finding of fact are rejected for lack of citation to evidence in the record. 12. This proposed finding of fact is irrelevant. The performance of Tom Edwards, Inc., is not at issue in this case. The issue is whether there have been an adequate number of registrations in either Polk County or the Lake Wales area. The failure of such registrations to reach an adequate level, as shown by the evidence, is the failure of all Chrysler dealerships, despite what may have been relatively good, or at least acceptable, performance by Tom Edwards, Inc. COPIES FURNISHED: Allan M. Huss, Esquire Senior Staff Counsel Chrysler Motors Corporation Post Office Box 1919 Detroit, Michigan 48288 Dean Bunch, Esquire Rumberger, Kirk, Caldwell Cabaniss & Burke, P.A. Suite 900, 101 North Monroe Street Tallahassee, Florida 32301 Frank J. Rouse, Esquire 680 East Main Street Bartow, Florida 33830 Leonard R. Mellon Executive Director Department of Highway Safety and Motor Vehicles Neil Kirkman Building Tallahassee, Florida 32399-0500 Charles J. Brantley, Director Division of Motor Vehicles Department of Highway Safety and Motor Vehicles Neil Kirkman Building Tallahassee, Florida 32399-0500 Enoch Jon Whitney, Esquire General Counsel Department of Highway Safety and Motor Vehicles Neil Kirkman Building Tallahassee, Florida 32399-0500
Conclusions This matter came before the Department for entry of a Final Order upon submission of an Order Closing File by Lisa Shearer Nelson, an Administrative Law Judge of the Division of Administrative Hearings, a copy of which is attached and incorporated by reference in this order. The Department hereby adopts the Order Closing File as its Final Order in this matter. Said Order Closing File was predicated upon Respondent's notice of withdrawal. Accordingly, it is hereby ORDERED that this case is CLOSED and a license may be issued to Gas Sippers, LLC to sell motorcycles manufactured by Taizhou Zhongneng Motorcycle Co. Ltd. (ZHNG) at 6480 20th Street, #106, Vero Beach (Indian River County), Florida 32966 upon compliance with all applicable requirements of Section 320.27, Florida Statutes, and all applicable Department rules. Filed October 15, 2009 3:39 PM Division of Administrative Hearings. DONE AND ORDERED this ;J? ay of October, 2009, in Tallahassee, Leon County, Florida. Division of Motor Vehicles Department of Highway Safety and Motor Vehicles Neil Kirkman Building Tallahassee, Florida 32399 Filed with the Clerk of the Division of Motor Vehicles this _/;JJJ day of October, 2009. . 0..- .t.dmlnlstrallo NOTICE OF APPEAL RIGHTS Judicial review of this order may be had pursuant to section 120.68, Florida Statutes, in the District Court of Appeal for the First District, State of Florida, or in any other district court of appeal of this state in an appellate district where a party resides. In order to initiate such review, one copy of the notice of appeal must be filed with the Department and the other copy of the notice of appeal, together with the filing fee, must be filed with the court within thirty days of the filing date of this order as set out above, pursuant to Rules of Appellate Procedure. CAF:vlg Copies furnished: John Dikov Valley Scooters, LLC 1687 Blythe Island Drive Brunswick, Georgia 31523 2
