Conclusions This matter came before the Department for entry of a Final Order upon submission of a Recommended Order of Dismissal by Barbara J. Staros, 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 Recommended Order of Dismissal as its Final Order in this matter. Accordingly, it is hereby ORDERED that the Dealer Sales and Service Agreement between Premier Automotive on Atlantic LLC and Kia Motors America, Inc. is terminated. Filed May 12, 2011 1:54 PM Division of Administrative Hearings DONE AND ORDERED this VA day of May, 2011, in Tallahassee, Leon County, Florida. Sandra C. Lambert, Division of Motor Vehicles Department of Highway Safety and Motor Vehicles Neil Kirkman Building, Room A435, MS 80 Tallahassee, Florida 32399 Filed with the Clerk of the Division of Motor Vehicles this_42_ day of May, 2011. ti Vinayak, Dealer ek 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. SCL:vlg Copies furnished: W. Douglas Moody, Jr., Esquire Post Office Box 10336 Tallahassee, Florida 32302 J. Andrew Bertron, Esquire Nelson Mullins Riley & Scarborough LLP 3600 Maclay Boulevard South, Suite 202 Tallahassee, Florida 32312 Jacob A. Brown, Esquire Akerman Senterfitt 50 North Laura Street Jacksonville, Florida 32202 Colm A. Moran, Esquire Hogan Lovells US LLP 1999 Avenue of the Stars, Suite 1400 Los Angeles, California 99067 Barbara J. Staros Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 Nalini Vinayak Dealer License Section
Conclusions This matter came before the Department for entry of a Final Order upon submission of an Order Closing File by Daniel M. Kilbride, 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 without prejudice of protest. Accordingly, it is hereby ORDERED that the proposed transfer of the assets and franchise of Saturn of St. Petersburg, Inc. to Crown Automotive Man: ent, Inc. is denied. DONE AND ORDERED this hg day of September, 2009, in Tallahassee, Leon County,Florida. - /J / Division of Motor Vehicles Department of Highway Safety and Motor Vehicles Neil Kirkman Building Tallahassee, Florida 32399 Filed September 15, 2009 3:28 PM Division of Administrative Hearings. J1J:Ji. Filed with the Clerk of the Division of Motor Vehicles this day of September, 2009. NOTICE OF APPEAL RIGHTS inayak, UDell:er&t..Admlniltralor 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 Barrett Saturn Corporation 100 Renaissance Center Drive MC: 482-A06-C66 Detroit, Michigan 48265-1000 Robert C. Byerts, Esquire Myers & Fuller P.A. 2822 Remington Green Circle Tallahassee, Florida 32308 Daniel M. Kilbride Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 Michael J. Alderman, Esquire Assistant General Counsel Department of Highway Safety and Motor Vehicles Neil Kirkman Building, Rm. A-432-02 Tallahassee, Florida 32399-0504 2 Florida Administrative Law Reports Post Office Box 385 Gainesville, Florida 32602 Nalini Vinayak Dealer License Section 3
The Issue The issue for consideration in this matter is whether Respondent, Michael L. Pappas, Jr., should be granted permission to purchase 20 percent of the stock in Plaza Dodge, Inc., and be recognized as executive management thereof, or whether the purchase should be rejected because of Mr. Pappas's prior conviction of a felony and alleged bad character.
Findings Of Fact At all times pertinent to the issues herein, Chrysler was a motor vehicle manufacturer licensed to do business in Florida; Plaza was a motor vehicle dealer licensed by the state; and Michael L. Pappas, Jr. was an individual seeking to purchase an ownership share in Plaza Dodge. He has been general manager of Plaza Dodge since January, 1993. On May 9, 1994, Plaza notified Chrysler that Mr. Pappas intended to purchase a 20 percent ownership interest in its shares and become executive manager of the dealership. The existing dealership agreement between Chrysler and Plaza reflects Mr. Pappas' father, Michael L. Pappas, is the sole owner and manager of the dealership. This agreement is not assignable without the consent of Chrysler Corporation. In his application submitted to Chrysler, Mr. Pappas indicated he had been convicted in 1987 of several felony counts dealing with his sale and possession of cocaine in 1985. As a result of that conviction, Mr. Pappas was sentenced to four years in prison, fined $50,000, and placed on five years probation. After he had been incarcerated for approximately six months, Mr. Pappas was placed in to a work release program for five months and then released to serve his five years probation. There is some indication this early release was effected because of prison crowding. The probation was terminated in July, 1991, earlier than scheduled. There is no evidence he has been pardoned. Mr. Pappas' civil rights were restored in August, 1992, through the simple process of applying for it. As was previously stated, he has been serving as general manager of Plaza since January, 1993. Since he has been serving in that capacity, Chrysler has been aware of his position and has not complained. In fact, he has, without objection, attended official functions put on by Chrysler in his capacity as the representative of Plaza Dodge. He was identified as an officer of the dealership when it applied to the state for licensure, and revealed his conviction on the licensure application. The application was approved by the Department of Highway Safety and Motor Vehicles Chrysler has rejected Mr. Pappas' application to purchase an ownership share in the dealership and his proposed executive management thereof citing as grounds for its rejection his prior felony convictions as evidence of his bad character. Chrysler contends that Mr. Pappas' conviction would adversely impact on the public confidence in the dealership and would have an adverse effect on sales. It sells and services vehicles only though its dealers and relies upon its dealerships to project its corporate image. Chrysler is also concerned that, since it accepts warranty claims at face value from its dealers, it must be able to rely on the character and integrity of those dealers to insure the warranty service was performed and the vehicles sold as claimed. No evidence exists to indicate this would not be the case here. The only evidence of the potential for problem came in the testimony of Chrysler's own official in explanation of its policy regarding dealership owners was presented and no indication of any dealership misconduct by Plaza under Mr. Pappas' stewardship was shown. Chrysler has adopted a policy prohibiting approval of anyone for ownership of a dealership who has "a prior felony conviction or other derogatory personal or character reputation or background which could be detrimental to or otherwise harm the image of Chrysler, the dealership, other Chrysler dealers of Chrysler products." Chrysler has attempted to enforce that policy uniformly and has taken the position that the conviction of a felony, by itself, will have a detrimental impact on the image of Chrysler Corporation. The evidence of record in this case does not seem to support that position, however. All during the time of his incumbency as Plaza's general manager the dealership's customer relations, as reflected by sales and service performance, has been rated as good, and those ratings have reflected an improvement over previous years. At no time has Chrysler objected to Mr. Pappas' presence at the dealership until now, and Chrysler presented no evidence of a lack of customer satisfaction with dealership performance or of its dissatisfaction with Plaza's share of the market. By the same token, the financial stability of Mr. Pappas or the dealership was not brought into issue. The evidence of record, through the testimony of others including an area Chrysler dealer, indicates that Mr. Pappas is well versed in the intricacies of operating an automobile dealership and has a good reputation for ability as well as character and integrity in the auto sales and service community. In addition to his employment in the management of a popular family restaurant Mr. Pappas has been involved in several other business partnerships and his partners speak well of his character and his business acumen. Mr. Pappas also appears to have earned the confidence of the community at large. Former law enforcement officials who were in office at the time of his arrest indicated there was no evidence of any serious misconduct on his part aside from that for which he was convicted. In the opinion of the former Tarpon Springs Police Chief, he appears to have been rehabilitated. In addition, Mr. Pappas appears to be a concerned parent and is active in community affairs. He shows remorse for his former misconduct and desires to have another opportunity to prove himself. At the time of his arrest, and during the period prior thereto, when he had been heavily into the use of cocaine, Mr. Pappas, along with his two cousins, was employed in the family restaurant in Tarpon Springs and had advanced to a position of responsibility. The three cousins were soon to assume some ownership interest in the establishment, but because of his conviction, Mr. Pappas was determined to be ineligible to be an officer in a corporation which held a liquor license. While using cocaine, Mr. Pappas periodically had it in his possession at work in the restaurant and was using it at least six days a week. He was involved at the time with a woman, Ms. Gleason, a drug and alcohol addict, to whom he supplied cocaine more than half of the times they were together. He sold cocaine to both Ms. Gleason and to others in order to support his own habit. Many of his sales were of large amounts bringing him several thousands of dollars at a time. Even after he was married in 1983, he continued to use cocaine even though he told his wife he had stopped. There is no evidence of his use or possession of cocaine any time after his release from prison, however.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is: RECOMMENDED that the Department enter a final order finding that Michael L. Pappas, Jr. is shown to be of good moral character and is qualified to be an equity owner and executive manager of Plaza Dodge, Inc. DONE and ENTERED this 16th day of April, 1996, in Tallahassee, Florida. ARNOLD H. POLLOCK, 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 16th day of April, 1996. APPENDIX TO RECOMMENDED ORDER, CASE NO. 94-3869 To comply with the requirements of Section 120.59(2), Florida Statutes (1993), the following rulings are made on the parties' proposed findings of fact: Petitioner's Proposed Findings of Fact. - 9. Accepted and, as appropriate, incorporated in this Recommended Order. 10. - 15. Accepted. 16. - 21. Accepted and incorporated herein. 22. - 26. Accepted and incorporated herein. 27. & 28. Accepted and incorporated herein. - 37. Accepted. 38. Accepted and incorporated herein. Respondent's Proposed Findings of Fact. Respondent has listed two paragraphs 5 in his Recommended Order. Therefore, all reference to Proposed Findings of Fact numbered 6 and after related to the paragraph numbered one less in the proposal. - 4. Accepted and incorporated herein. 5. & 6. Accepted and incorporated herein. 7. - 11. Accepted and incorporated herein. - 17. Accepted and incorporated herein. Accepted. Accepted. COPIES FURNISHED: Dean Bunch, Esquire Cabaniss & Burke, P.A. 909 East Park Avenue Tallahassee, Florida 32301 Edward Weeby, Esquire Senior Staff Counsel Chrysler Corporation 12000 Chrysler Drive Highland Park, Michigan 48288-0001 Daniel E. Myers, Esquire Walter E. Forehand, Esquire Myers & Forehand 402-B North Office Plaza Drive Tallahassee, Florida 32301 Marie L. Demarco, Esquire D. Scott Douglas, Esquire MacFarlane, Ausley, Ferguson and McMullen 400 Cleveland Street Clearwater, Florida 34615
The Issue The issue is whether Petitioner's applications to establish new dealerships for the sale of motorcycles manufactured by Shanghai Motorcycle Co., Ltd. (JMSTAR), and Shanghai Shenke Motorcycle Co., Ltd. (SHEN), should be granted. PRELIMANARY STATEMENT In the Florida Administrative Weekly, Volume 34, Number 21, May 23, 2008, the Department of Highway Safety and Motor Vehicles (DHSMV) published two Notices of Publication for a New Point Franchise Motor Vehicle Dealer in a County of Less than 300,000 Population. Said notices advised that Petitioner Gator Moto, LLC and Gator Moto, LLC (Petitioner) intended to establish new dealerships for the sale of motorcycles manufactured by Shanghai Motorcycle Co., Ltd. (JMSTAR), and Shanghai Shenke Motorcycle Co., Ltd. (SHEN). On or about June 3, 2008, Respondent Austin Global Enterprises, LLC, d/b/a New Scooters 4 Less (Respondent) filed two complaints with DHSMV about the proposed new motorcycle dealerships. DHSMV referred both complaints to the Division of Administrative Hearings on June 10, 2008. On July 2, 2008, Respondent filed its Compliance with Initial Order. On July 7, 2008, Petitioner filed Petitioner's Compliance with Initial Order Division of Administrative Hearings (DOAH) Case Nos. 08-2735 and 08-2736. This is the only communication that DOAH has received from Petitioner. On July 23, 2008, Administrative Law Judge Barbara J. Staros entered an Order of Consolidation for DOAH Case Nos. 08-2735 and 08-2736. On July 24, 2008, Judge Staros issued a Notice of Hearing, scheduling a final hearing on December 4, 2008. On November 26, 2008, Respondent filed its Compliance with Pre-hearing Instructions. Petitioner did not respond to the Order of Pre-hearing Instructions. On December 1, 2008, Judge Staros issued an Amended Notice of Hearing. The amended notice only changed the commencement time for the hearing. DOAH subsequently transferred these consolidated cases to the undersigned. On the morning of the December 4, 2008, hearing, DHSMV advised the undersigned's office that DHSMV had failed to arrange for the appearance of a court reporter at the hearing. Accordingly, the undersigned issued an Order Granting Continuance and requiring the parties to confer and provide DOAH with mutually-agreeable dates for re-scheduling the hearing. On December 17, 2008, Respondent filed its unilateral Compliance with Order Granting Continuance. Respondent filed this pleading after an unsuccessful attempt to confer with Petitioner. On December 18, 2008, the undersigned issued a Notice of Hearing and Order of Pre-hearing Instruction. The notice scheduled the hearing for February 9, 2008. On February 3, 2007, Respondent filed its unilateral Compliance with Order of Pre-hearing Instructions. Petitioner did not file a response to the Order of Pre-hearing Instructions. When the hearing commenced, Petitioner did not make an appearance. Respondent made an appearance and presented the testimony of Colin Austin, Respondent's Managing Member. Respondent did not offer any exhibits. The hearing transcript was not filed with DOAH. Neither party filed proposed findings of fact and conclusions of law.
Findings Of Fact Respondent has standing to protest Petitioner's applications pursuant to Section 320.642(3)(a)2., Florida Statutes (2008). According to DHSMV's published notice, Petitioner intended to establish two new motorcycle dealerships at 2106 Northwest 67th Place, Suite 15, Gainesville, Florida, on or after May 9, 2008. This location is only 4.5 miles from Respondent's place of business. At some point in time, Petitioner relocated its business to 7065 Northwest 22nd Street, Suite A, Gainesville, Florida. This location is only 5.3 miles from Respondent's place of business. Petitioner's application indicated that Petitioner intended to establish itself as a dealer of SHEN and JMSTAR motorcycles. Currently, Respondent sells those motorcycles under License No. VF/1020597/1. Respondent currently supplies itself with SHEN and JMSTAR products from a United States distributor. Respondent has a good faith belief that Petitioner intends to import the motorcycles and related products directly from the Chinese manufacturers. In that case, Petitioner would be able to sell the products at a lower price than Respondent and thereby deny Respondent the opportunity for reasonable growth. Petitioner did not notify DOAH about a change of address. DOAH's notices and orders directed to Petitioner at its address of record have not been returned. Petitioner has not communicated with DOAH since filing a response to the Initial Order. Petitioner did not make an appearance at the hearing. Apparently, Petitioner has abandoned its applications to establish the new dealerships.
Recommendation Based on the forgoing Findings of Fact and Conclusions of Law, it is ORDERED: That the Department of Highway Safety and Motor Vehicles enter a final order denying Petitioner's applications. DONE AND ENTERED this 16th day of February, 2009, in Tallahassee, Leon County, Florida. S SUZANNE F. HOOD Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 16th day of February, 2009. COPIES FURNISHED: Michael James Alderman, Esquire Department of Highway Safety and Motor Vehicles Neil Kirkman Building, Room A-432 2900 Apalachee Parkway Tallahassee, Florida 32344 Collin Austin Austin Global Enterprise, LLC 118 Northwest 14th Avenue, Suite D Gainesville, Florida 32601 Justin Jackrel Gator Moto, LLC 4337 Northwest 35th Terrace Gainesville, Florida 32605 Justin Jackrel Gator Moto, LLC 2106 Northwest 67th Place, Suite 15 Gainesville, Florida 32653 Carl A. Ford, Director Division of Motor Vehicles Department of Highway Safety and Motor Vehicles Neil Kirkman Building, Room B-439 2900 Apalachee Parkway Tallahassee, Florida 32399-0500 Robin Lotane, General Counsel Department of Highway Safety and Motor Vehicles Neil Kirkman Building 2900 Apalachee Parkway Tallahassee, Florida 32399-0500
The Issue Whether Daniels Chevrolet, Inc., is a successor dealer within the meaning of section 320.642, Florida Statutes (2010),1/ and whether Daniels Chevrolet, Inc., and General Motors, LLC, are in compliance with the requirements of section 320.645.
Findings Of Fact Petitioners and Respondents stipulate to the following facts as set forth in this paragraph: Petitioners, Ferman Chevrolet and Gordon Chevrolet, are licensed motor vehicle dealers in Tampa, Florida, and are authorized to sell and service Chevrolet motor vehicles. GM is a licensed manufacturer and distributor of Chevrolet motor vehicles. GM owns 81.9 percent of Daniels Chevrolet. Roland C. Daniels (Mr. Daniels) is an African- American and owns 18.1 percent of Daniels Chevrolet. University Chevrolet was previously licensed as a motor vehicle dealer at 11300 North Florida Avenue, Tampa, Florida (Florida Avenue Location), and was authorized to sell and service Chevrolet motor vehicles. On April 19, 2010, University Chevrolet filed articles of dissolution with the Florida Department of State, stating "the date of dissolution: April 6, 2010." On May 12, 2010, the Dealer Sales and Service agreements between University Chevrolet and GM were terminated. On June 30, 2010, University Chevrolet submitted a Voluntary Relinquishment of License form to the Department. On July 1, 2010, the Department entered a Final Order cancelling University Chevrolet's motor vehicle dealer license, effective July 2, 2011. On April 27, 2011, GM sent a letter to the Department giving notice that GM was approving the appointment of Daniels Chevrolet, Inc., d/b/a Summit Chevrolet, as a Chevrolet dealer at the Florida Avenue Location and that the dealership was exempt from notice and protest pursuant to section 320.642(5)(a)1. On May 4, 2011, counsel for Petitioners sent a letter to the Department asserting, among other things, that the establishment of Daniels Chevrolet was not exempt and that Petitioners were entitled to notice and an opportunity to protest. The Department treated the May 4, 2011, letter as a request for administrative hearing and forwarded the letter to the Division of Administrative Hearings, where the matter was assigned DOAH Case Nos. 11-2273 and 11-2274. On June 22, 2011, Administrative Law Judge William Quattlebaum entered an Order Granting Motion to Relinquish Jurisdiction and Closing Files on the basis that there was no dispute as to any material facts. On May 24, 2011, GM sent a letter to the Department substantially identical to its April 27, 2011, letter, but changing the proposed "d/b/a" to "Daniels Chevrolet." On May 24, 2011, the Department accepted the license application filed by Daniels Chevrolet. On June 1, 2011, the Department determined that Daniels Chevrolet's license application was complete. On June 27, 2011, Petitioners filed an Amended Petition with the Department, which was forwarded to the Division of Administrative Hearings and is the present petition in this case. University Chevrolet, during all times relevant hereto, operated as a Florida limited liability company. By correspondence dated May 24, 2010, University Chevrolet was advised by GM that as of that date, all of the conditions described in the wind-down agreement between GM and University Chevrolet had been satisfied. As part of the process associated with University Chevrolet's petition to voluntarily relinquish its motor vehicle dealer's license, the dealership represented to the Department that: (1) all electronic filing system transactions were finalized at the tag office; (2) there were no outstanding consumer complaints; (3) there were no outstanding sales transactions; (4) there were no pending title and registration applications pending at the dealership or tag office; (5) there were no unsatisfied vehicle liens on trade-in vehicles; and (6) there was no remaining vehicle inventory as of June 21, 2010 (six critical tasks). Had University Chevrolet not completed these six critical tasks to the satisfaction of the Department, its petition seeking to relinquish its license would have been denied. On May 13, 2011, Mr. Daniels, on behalf of Daniels Chevrolet, attempted to file with the Department an application for a license as a motor vehicle dealer. Acceptance of the application was initially refused by the Department, in part, because of the May 4, 2011, protest letter filed with the Department by Petitioners' counsel. Prior to May 5, 2011, the date upon which Mr. Daniels received a copy of Petitioners' May 4, 2011, protest letter, Daniels Chevrolet hired a general sales manager and service director to assist with dealership operations. Additionally, in anticipation of opening for business by June 15, 2011, Daniels Chevrolet, prior to May 5, 2011, interviewed and selected a general contractor. The basic plan for getting Daniels Chevrolet operational by June 15, 2011, included engaging in cosmetic remodeling activities that could be completed within the timeframe of about a month. The operational plan provided that the portions of the dealership that customers would interact with the most and that did not require the issuance of any building permits (e.g., painting), would be front-loaded in the remodeling process so as to accommodate the June 15, 2011, targeted opening date. The initial cost to capitalize the operation of Daniels Chevrolet is $2,761,800.00. In order to fund the capital requirements, Mr. Daniels has invested $500,000.00 in Daniels Chevrolet, which represents an initial ownership interest of 18.1 percent. Motors Holding, an entity within GM, has invested $2,261,800.00, which represents initial ownership interests in Daniels Chevrolet of 81.9 percent. For his initial investment, Mr. Daniels received 5,000 shares of common stock from Daniels Chevrolet. For its initial investment, Motors Holding received 22,618 shares of preferred stock from Daniels Chevrolet. As to the issue of stock dividends and the redemption by Mr. Daniels of the preferred stock held by Motors Holding, the terms of the agreement between the parties provide as follows: Each quarter, [Daniels Chevrolet] will pay out dividends and redeem preferred stock if earnings are available for that purpose (that is, if earnings are not needed to make up prior losses). Generally, the amount available to pay dividends will be one half of [Daniels Chevrolet's] net after-tax earnings for the quarter. [Daniels Chevrolet] will pay dividends only on its preferred stock, and the amount of the dividend will be a pro rata share of the amount available for dividends. All remaining after-tax earnings are available to redeem shares of preferred stock at a price of $100 per share, increasing [Mr. Daniel's] ownership of [Daniels Chevrolet]. There are no dividends paid on the common stock. When [Daniels Chevrolet] has used its operating earnings to reduce the preferred stock held by Motors Holding to 20% of the originally issued preferred shares, it is required to redeem the remaining preferred shares at a price of $100 per share, using any available source of funds. At this time, the Motors Holding representatives will resign from the board of directors and the company will be owned solely by [Mr. Daniels]. The agreement between Mr. Daniels and GM also allows for the expedited purchase of the dealership pursuant to the following contractual terms: Notwithstanding any other terms or conditions of the Investment Agreements or any terms or conditions in the GM memorandum dated August 12, 2004, and March 1, 2005, respecting early buyout parameters, Operator [Mr. Daniels] is not precluded from an expedited purchase of the preferred shares using a monetary source other than profits from the dealership's operation. Operator may purchase GM's shares of preferred stock of the Dealer Company [Daniels Chevrolet] using any legal source of funds at any time within ten (10) years after the date that the dealership opens for business with the public, regardless of the percentage of preferred stock that has been redeemed. The agreement between Mr. Daniels and GM also provides as follows: Candidate/Operator understands that the performance and profitability of the dealership will be affected by not only the Operator's performance, but also by factors outside the control of the dealership, including without limitation, general and local economic conditions, industry auto sales, General Motors' auto sales, and any and all types of risks affecting businesses of the relevant size and type. As with any entrepreneurial activity, Candidate/Operator's and GM's investments in the proposed business forecasted here are at risk. Candidate/Operator acknowledges and understands the potential that he or she could lose some or all of Candidate/Operator's investment if he or she invests in an unprofitable dealership. Candidate/Operator acknowledges and agrees that GM shall have no obligation to provide compensation, payment or reimbursement for any losses, and Candidate/Operator shall have no right to reimbursement for any losses. The revenue projections for Daniels Chevrolet show that during the first year of operations, the dealership is estimating that it will sustain a loss, before deducting for any bonus and taxes, of $130,800.00. In the second year of operations, Daniels Chevrolet is projecting, before deducting for any bonus and taxes, that it will earn a net profit of $110,370.00. In operational years three through ten, Daniels Chevrolet is projecting an average annual net profit, before deducting for any bonus and taxes, of $1,294,050.00. Based upon these projections, the preferred stock owned by Motors Holding will be redeemed in approximately 6.25 years. Prior to joining the automobile industry, Mr. Daniels worked in a managerial capacity for the Sears Corporation for approximately 17 years. At one point during his career with the Sears Corporation, Mr. Daniels became a national buyer for women's apparel. As a national buyer, Mr. Daniels was responsible for forecasting the women's apparel needs for some 750 stores throughout the United States of America. After leaving the Sears Corporation, Mr. Daniels became involved with the automobile industry in 1985, when he entered GM's dealer development program. After successfully completing the dealer development program, Mr. Daniels, in 1987, became part owner of an automobile dealership in Colorado. The Colorado dealership ceased operations sometime around the latter part of 1988. In 1991, Mr. Daniels relocated to South Florida where for a period of about five years, he worked as general manager for two Saturn dealerships. In his capacity as general manager, Mr. Daniels was involved in managing vehicle inventory issues and developing forecasts regarding future vehicle sales. Subsequently, Mr. Daniels left South Florida and moved to Gainesville, Florida, where he owned and operated a Saturn dealership for more than ten years. When GM ceased manufacturing the Saturn line of vehicles, Mr. Daniels switched to selling Mitsubishi vehicles until such time as he sold his dealership around March 2011. Mr. Daniels, through training and experience, is skilled at making forecasts regarding the future sales of automobiles. In support of its revenue forecast, Daniels Chevrolet, relying upon the experience of Mr. Daniels and GM, projects that during its first year of operations, it will sell 500 new vehicles. For the second year of operations, Daniels Chevrolet is projecting 600 new vehicle sales. For the remaining relevant operational period, Daniels Chevrolet is projecting that it will average 850 new vehicle sales per year. The number of vehicles sold by Daniels Chevrolet will not reduce the number of new vehicles allocated to Petitioners by GM. What is generically referred to as "additions and deductions" provides another source from which Daniels Chevrolet expects to generate income. Income from additions and deductions can be derived from sources such as insurance recoveries, factory incentive money, and tax adjustments. During its first year of operations, Daniels Chevrolet is projecting $400,000.00 in income from additions and deductions. In its second year of operations, Daniels Chevrolet is projecting that the amount of income derived from additions and deductions will be $851,000.00. Commencing with its third year of operations, Daniels Chevrolet is projecting that its annual average for income derived from additions and deductions will be $1,099,000.00. For the period January 2001 through November 2009, dealers that occupied the Florida Avenue Location had annual new vehicle sales, not including fleet vehicles, as follows: Year 2001 – 890 vehicles Year 2002 – 863 vehicles Year 2003 – 921 vehicles Year 2004 – 915 vehicles Year 2005 – 977 vehicles Year 2006 – 698 vehicles Year 2007 – 674 vehicles Year 2008 – 367 vehicles 1/2009 - 11/2009 – 348 vehicles Mr. Dennis Slater, from 2005 through approximately April 2010, oversaw business operations and served as either chief financial officer or executive manager for University Chevrolet. During this period, Mr. Slater became very familiar with University Chevrolet's day-to-day business operations, as well as the conditions of the market in which University Chevrolet competed. According to Mr. Slater, for the period October 2006 through December 2008, the dealer/operator in charge of University Chevrolet encountered significant self- imposed challenges that compromised the dealer/operator's ability to successfully manage dealership operations. Those challenges eventually lead to Mr. Slater taking over the day-to-day operation of University Chevrolet in January 2009. After having been affiliated with University Chevrolet for approximately five years, and having worked in the auto industry for more than 35 years, Mr. Slater submitted a proposal to GM to operate the Florida Avenue Location as a successor to University Chevrolet. As a part of his proposal, Mr. Slater estimated that during his first year of operations he could sell 916 new vehicles. During his second year of operations, Mr. Slater projected that he could sell 1,119 new vehicles. Additionally, Mr. Slater projected that during his first year of operations, he would generate $718,998.00 in income from additions and deductions. Albert E. Parziale, CPA, CFF, CFE, Petitioners' expert, testified that in his opinion, Daniels Chevrolet would not be able to achieve profits sufficient to allow the dealership to obtain full ownership of the company within ten years of commencing operations. In reaching his conclusion, Mr. Parziale looked at new vehicle sales data in the aggregate for the Florida Avenue Location for the years 2001 through 2009. Mr. Parziale then "averaged" the data and determined that the Florida Avenue Location annually averaged 740 new vehicle sales during the period in question. Mr. Parziale also analyzed the new vehicle sales data for a narrower period of time (2006 through 2009) and found that the Florida Avenue Location during these later years annually averaged 521 new vehicle sales.2/ Mr. Parziale also noted that during the broader period between 2001 and 2009, previous operators at the Florida Avenue Location averaged $1,194,717 in income from additions and deductions, but it would be unreasonable for Respondent Daniels Chevrolet to rely on this income source to meet its buy-out obligation to Motors Holding because of the erratic nature of income flow derived from this source.3/ Currently, the average Chevrolet dealer in the Southeastern region of the United States, which includes Tampa, Florida, receives 1.1 million annually in net income from additions and deductions and the average Chevrolet dealer in the Tampa market receives $914,000.00 annually in net income from additions and deductions. Mr. Parziale acknowledges that it would not be unreasonable for Respondents to project that Daniels Chevrolet will average $1,099,000.00 in income from additions and deductions for the next ten years.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law set forth herein, it is RECOMMENDED that the Department of Highway Safety and Motor Vehicles, Division of Motor Vehicles, enter a final order granting Respondent, Daniels Chevrolet's, licensure application to operate as a successor motor vehicle dealer at 11300 North Florida Avenue, Tampa, Florida, and denying the relief sought by Petitioners, Ferman Chevrolet and Gordon Chevrolet, in their Amended Petition. DONE AND ENTERED this 1st day of December, 2011, in Tallahassee, Leon County, Florida. S LINZIE F. BOGAN Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 1st day of December, 2011.
The Issue The issue in this case is whether Petitioners are entitled to a motor vehicle dealership that is proposed to be located in Fort Walton Beach, Florida.
Findings Of Fact The evidence showed that the dealership proposed by Petitioners would sell the same line and make of motorcycles as those sold by Respondent. The proposed dealership would also compete in the Respondent’s territory since it would be located in the same county as Respondent and would be within 20 miles of Respondent. Respondent has standing to protest the establishment of the proposed dealership. On September 18, 2007, a Notice of Hearing setting the date, time and location of final hearing was issued in this case. The Notice of Hearing was mailed to the last known, valid addresses of the Petitioners, which were also the addresses provided in Petitioners’ Notice of Publication. Neither Notice of Hearing was returned. This cause came on for hearing as noticed. After waiting more than an hour, the Petitioners failed to appear to prosecute their claim. There has been no communication from the Petitioners before, during, or since the hearing to indicate that they would not be attending the final hearing. Because of Petitioners’ failure to appear, there was no evidence to demonstrate that Petitioners are entitled to a franchise motor vehicle dealership in Fort Walton Beach, Florida. Absent such evidence, the establishment of the proposed dealership should be denied.
Recommendation Accordingly, in consideration of the foregoing findings of fact and conclusions of law, it is RECOMMENDED that a final order be entered by the Florida Department of Highway Safety and Motor Vehicles denying the establishment of Petitioners’ proposed franchise. DONE AND ENTERED this 31st day of January, 2008, in Tallahassee, Leon County, Florida. S DIANE CLEAVINGER 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 31st day of January, 2008. COPIES FURNISHED: Michael J. Alderman, Esquire Department of Highway Safety and Motor Vehicles Neil Kirkman Building, Room A-432 2900 Apalachee Parkway Tallahassee, Florida 32399-0635 Carl A. Ford, Director Division of Motor Vehicles Neil Kirkman Building, Room B-439 Tallahassee, Florida 32399-0635 Judson M. Chapman, General Counsel Department of Highway Safety and Motor Vehicles Neil Kirkman Building 2900 Apalachee Parkway Tallahassee, Florida 32399-0500 David Wray Wholesale Nation Automotive, Inc. 319 Miracle Strip Parkway Fort Walton Beach, Florida 32548 Mei Zhou SunL Group, Inc. 8551 Esters Boulevard Irvine, Texas 75063 Curtis Mitchell Coastal Powersports 12 Eglin Parkway Southeast Fort Walton Beach, Florida 32548
The Issue The issues presented herein concern the standing of the Intervenors to challenge the licensure of Caruso Chrysler-Plymouth, Inc., to sell Chrysler- Plymouth automobiles in the State of Florida, particularly in Duval County, Florida. See Section 320.642, Florida Statutes. In considering the standing question, specific attention is given to the meaning of the term "real party in interest" as set forth in Rule 15C-1.08, Florida Administrative Code. 1/ WITNESSES AND EXHIBITS The following witnesses testified in the course of the proceedings: John Caruso, President, Caruso Chrysler-Plymouth, Inc.; John McLeod, Dealer Placement Specialist, Orlando, Florida, zone, Chrysler Corporation; Thomas McMenamy of G. T. Automobile Leasing; Michael Gratiano, Jr., school teacher, Sandalwood High School; Paula Bass, customer of Massey Dodge; Charles Cooper, customer of Westside Dodge and owner of Chrysler-Plymouth products and former Chrysler dealer; Robert E. Keel, used car dealer; Ralph Sarotte, Director of Marketing, Planning and Strategy, Chrysler Corporation; John Burnett, President, Massey Dodge; William Shore, President and owner of Westside Dodge; and George Hanlon, Vice President, Rebuilding Services, Inc., which owns two (2) Chrysler- Plymouth dealerships and (1) Dodge dealership. He is also President of River City Chrysler-Plymouth. Petitioners presented Exhibit 6, brochures related to Chrysler Corporation automobiles. Intervenors presented a series of exhibits; Intervenors' A is a copy of September 3, 1982, correspondence from Benry Noxtine, Dealer/License Supervisor, Division of Motor Vehicles to John E. Caruso as President of Caruso Chrysler- Plymouth, Inc.; Intervenors' 1, Chrysler Corporation brochures related to automobiles for the 1983 model year (disregard numbers which appear on the face of the brochures, in that these exhibits were taken from the materials Intervenors had Provided in responding to an interlocutory motion by Petitioners to close the Division of Administrative Hearings' file); Intervenors' 5, parts and service catalogs issued or made for Chrysler Corporation for the 1983 model year; Intervenors' 7, photographs taken of charts related to sales made by Westside Dodge, Inc., in Duval County, Florida; Intervenors' 9, statistics compiled by Chrysler Corporation referencing market penetration and dealer productivity in Jacksonville, Florida, and the zone which includes Jacksonville; Intervenors' 10 is constituted of descriptions of various groups and packages and options related to select Chrysler Corporation automobiles and is found as an attachment to the deposition of John R. McLeod, excerpts of which are part of the record of the final hearing; Intervenors 11, an advertising flyer related to select 1980 Chrysler Corporation automobiles; Intervenors' 12, photographs of some of the automobiles which were viewed, depicting offerings by Dodge and Chrysler-Plymouth; Intervenors' 13, January, 1983, NADA used car reference guide for Southeast United States, and Intervenors' 14, Black Book on used specialty vehicles and trucks for December, 1982, national. (Other exhibits were identified in the Prehearing Stipulation but were not involved in the presentation related to the standing of the Intervenors to challenge the licensure of Caruso Chrysler-Plymouth.) CASE HISTORY In August, 1982, Caruso Chrysler-Plymouth, Inc., made application for Florida Motor Vehicle Dealer licenses to sell Chrysler-Plymouth products and Imperial automobiles. This followed Chrysler Corporation's stated intent to grant franchises to Caruso to sell the aforementioned automobiles. 2/ Prior to the preparation of the application, River City Chrysler-Plymouth, Inc., which is located in Jacksonville, Florida, on Cassat Avenue, had made known its intention to protest the licensure of Caruso. Caruso would locate its facility on Southside Boulevard in Jacksonville, Florida. A copy of the application and the protest letter, together with a request that the Division of Administrative Hearings conduct a formal hearing was forwarded to the Director of the Division of Administrative Hearings on September 7, 1982. The Division of Administrative Hearings' file was then opened to consider the request of Petitioners in the face of the challenge by River City Chrysler-Plymouth. On September 17, 1982, Intervenors filed a direct petition with the Division of Administrative Hearings and a motion to intervene in the ongoing action. This request was honored by order of September 28, 1982, notwithstanding the position of Henry C. Noxtine, Dealer/License Supervisor for the Division of Motor Vehicles, as found in Intervenors' Exhibit A. In that correspondence, which was made known to the Hearing Officer subsequent to the September 28, 1982, order, Noxtine, in correspondence addressed to the President of Caruso and copied to counsel for Intervenors, states "also, letters of protest has (sic] been received by and through its counsel, for Massey Dodge, Inc., 3333 Main Street, Jacksonville, Florida, and Westside Dodge, Inc., 1672 Cassat Avenue, Jacksonville, which will not be considered." Prior to being informed of the contents of the September 3, 1982, correspondence, the Hearing Officer also attempted to ascertain the Division of motor Vehicles' Director's position on the rights of Intervenors. This occurred after September 28, 1982. No change was made as a result of this inquiry. Further treatment of standing was described in the November 16, 1982, order which has been mentioned before. The November 16, 1982, order was entered in response to a motion to close the Division of Administrative Hearings' file in view of the withdrawal from the action of the original protestant, River City Chrysler-Plymouth. It was determined that the withdrawal did not prejudice the rights of the Intervenors. In particular, the withdrawal did not bar the Intervenors' rights to seek consideration of their opposition to the licensure of Caruso Chrysler-Plymouth. The latter portion of the order identified how those claims of Intervenors would be addressed. Ultimately, a final hearing was held on January 10, 1983, leading to a ruling on the record that Intervenors did not have the requisite standing to challenge the licensure of Caruso to sell Chrysler-Plymouth automobiles in Jacksonville, Florida, as augmented by this Recommended Order.
Findings Of Fact John E. Caruso, owner of the applicant, Caruso Chrysler-Plymouth, Inc., is also the owner of Regency Dodge. The Dodge dealership sells Dodge cars and trucks and services Chrysler products at a location which is approximately one (1) mile from the location of the proposed Caruso Chrysler-Plymouth dealership. Caruso is also part owner of a Dodge, AMC and Renault car store in Green Cove Springs, Florida, Caruso Motors. John Caruso has operational responsibility for Regency Dodge and would have some managerial involvement with Caruso Chrysler- Plymouth. We is not involved in the management of Caruso Motors. Caruso motors and the other automobile dealers in Green Cove make a substantial number of automobile sales in Duval County, Florida, the county in which Regency Dodge and the proposed dealership are to be found. Both Regency and Caruso Chrysler- Plymouth would be in the immediate vicinity of the shopping center known as Regency Square and are both found on the south side of Jacksonville, Florida, also referred to as east Jacksonville. In the past, Chrysler-Plymouth sales have been made from a location which was one block away from the present location of Regency Dodge. That store has closed, and there has been no dealership in that location in the last three years. There was also a Chrysler-Plymouth dealership on Phillips Highway on the south side of Jacksonville until February, 1982, when that organization went out of business. At present, the only Chrysler-Plymouth dealership in Jacksonville, Florida, is River City Chrysler-Plymouth which is on the west side of Jacksonville, Florida, on Cassat Avenue. In 1982, of the approximately 1,000 sales of Dodge products made from Regency Dodge, 600 of those were fleet sales. Regency Dodge does warranty work on Chrysler-Plymouth automobiles as well as Dodge. Chrysler's treatment of warranty claims on all automobiles is uniform. Regency Dodge and other Dodge dealers are required to do warranty work on Dodge products and may do warranty work on Chrysler-Plymouth products at their option. Presently, there are three Dodge dealerships in Duval County, Florida, which are constituted of Regency Dodge and the two Intervenors. Ideally, Chrysler Corporation feels that the best balance would be to have two Dodge dealers and two Chrysler-Plymouth dealers in Duval County, Florida, or Jacksonville, which is essentially the same market area. This is borne out by excerpts of a document dealing with prognostication by Chrysler Corporation on the subject of automobile sales in Jacksonville, Florida, found as a part of Intervenors' Exhibit No. 9. Realization of the marketing goals of Chrysler Corporation in the Orlando, Florida, zone, of which Jacksonville is a part, is discussed in the excerpted portions of the deposition of John R. McLeod taken on January 6, 1983. This deposition is being transmitted with the Recommended Order and the excerpts are fully identified in the transcript of the hearing. As the excerpted testimony in the deposition points out, should Massey Dodge, which is located on Main Street in North Jacksonville, Florida go out of business, at that location, it is not the intention of Chrysler Corporation to open up another Dodge dealership at that location. In that same deposition, McLeod establishes that, with the exception of the Caruso arrangement, there are no Dodge and Chrysler- Plymouth dealerships owned by the same individual within the Orlando zone. McLeod identifies in his deposition that the idea of having two Chrysler- Plymouth and two Dodge dealers in Jacksonville, is premised upon information from industry registrations of automobiles and other basic factors involved in the analysis of the metropolitan market. This did not include a survey of the general public. Finally, McLeod indicated that Chrysler Corporation felt that it needed a Chrysler-Plymouth dealership on the east side of Jacksonville, which would include the Regency area, an area also referred to as southside. This led to Chrysler offering Caruso the opportunity to be Chrysler's dealer. Intervenors' Exhibit 10, which is an attachment to the McLeod deposition, demonstrates the interchangeability of parts for Plymouth Reliant and Dodge Aries; Chrysler Cordoba and Dodge Mirada, and Plymouth Turismo/Horizon and Dodge Charger/Omni. These vehicles are manufactured in the same facility. Thomas McMenamy works for a car leasing firm in Jacksonville, Florida, and indicated the similarity between Chrysler K-Cars and Dodge Sportsman and Plymouth Voyagers in his efforts to satisfy lease customers. Michael Gratiano, Jr., a local teacher in Jacksonville, Florida, is the owner of a 1981, Ram Charger, a vehicle he found to be similar to a Plymouth Trail Duster. He also owns a 1982 Dodge 400 Convertible which he purchased from Massey Dodge. Paula Bass bought a 1982 Dodge 400 from Massey Dodge and in her shopping felt that the Dodge 400 and Chrysler LeBaron were similar automobiles. Charles Coopers who was a Chrysler Corporation dealer from 1940 through 1950, owns a 1977 Chrysler New Yorker and 1980 Plymouth Volare which he has serviced at Westside Dodge at their Cassat Avenue premises. Robert E. Keel gave testimony in this hearing. Mr. Keel is a used car dealer in Jacksonville, Florida, and recalls a conversation with John E. Caruso in which Caruso indicated that he might wish to sell Chrysler-Plymouth and Dodge products in the same location, a comment which Caruso denies. Ralph Sarotte, Chrysler Director of Marketing, Planning and Strategy, gave a break-out of the similarities and dissimilarities between various offerings in the Chrysler Corporation product line. These automobiles are depicted in Intervenors' Exhibit 1 and Petitioners' Exhibit 6. These product lines have formerly been advertised by one firm, an arrangement which is now in transition, with the intention to have a second advertising firm involved, at which point Chrysler-Plymouth products would be advertised by one firm and Dodge products by a second firm. At present, there are some ads that are common to all Chrysler Corporation products, to include comments by the Chairman of the Board of Chrysler Corporation, Lee Iacocca, and advertisements related to financing and warranty matters. There is common advertising for performance Parts for Dodge and Chrysler-Plymouth automobiles. The Colt advertising is a common pursuit for Dodge and Chrysler-Plymouth. The emphasis on the future advertisements of Chrysler Corporation would be that Chrysler-Plymouth products represent value, America's way to get its money's worth and economy. The thrust of the Dodge advertising would depict Dodge as a "driving machine" represented by driving excitement and excellence. Chrysler Corporation offers subcompact cars which are depicted in Petitioners' Exhibit 6, as are all models to be discussed through this Recommended Order. The subcompact Plymouth is referred to as the Horizon and the Dodge is the Omni. There are approximately six unique parts on these automobiles which have to do with the grill, tail light assembly, and name plates, out of approximately 3,500 parts. A speciality type of automobile within the Horizon and Omni families would be the Plymouth Turismo and Dodge Charger whose principal differences have to do with the facia, tail lamps, name plates and graphics such as tape strips. Chrysler Corporation sells compact models referred to as the Dodge Aries and Plymouth Reliant which are known as K-Cars of a five or six passenger capacity in two and four door sedans and a five door wagon. The grills, tail lights and name plates of the two automobiles are the unique features. A more luxurious compact offering by Chrysler Corporation would be the Dodge 400 and Chrysler LeBaron lines which are five and six passenger automobiles. This represents Chrysler Corporation' a contribution to the "middle market" and these automobiles have facia, tail light and body side molding differences with Chrysler automobiles carrying a three to five hundred dollar ($300.00 to $500.00) increase in base unit price. In particular, Dodge offers a two door, four door and convertible version of its 400 series. Chrysler offers a two door, four door, basic convertible and Mark Cross designer series convertible, a town and country wagon and a town and country convertible. The latter three models have no Dodge counterpart. Chrysler Corporation intends to market, as a 1983 1/2 model, an automobile known as a Shelby Charger which is a unique product offered through Dodge affiliates. Its body appearance, wheels and tires and engine are distinguishing features of this automobile. In the front-wheel drive line, in the up-market automobiles, Dodge sells a 600 series to include the 600-ES. In the same market, Chrysler offers the E-Class automobile. Basically, there are differences in the appearances of these automobiles related to the front end, tail lights, name plates and fender designs. Also Dodge 600-ES has a unique transmission/engine combination offering a five speed transaxle. Moreover, it has unique exterior graphics, hood ornament and road wheels. Chrysler, in its E-Class automobiles, intends to offer a Chrysler New Yorker and Executive Sedan as 1983 1/2 models in addition to its current E-Class sedan. There are no comparable Dodge models to the New Yorker or Executive Sedan. The New Yorker has a landau roof treatment, special instrument panel and trim and name plate differences. The Executive Sedan has extended wheel base differences when compared to the Dodge line and offers greater seating capacity. The roof, doors and quarter panels and interior are also unique. Chrysler Corporation offers two cars in the mid-specialty line which are rear wheel drive cars. They are the Chrysler Cordoba and Dodge Mirada whose principal differences are the front end design, tail lights, roof adornment, wheels, tires and instruments. Chrysler Corporation offers rear wheel drive mid-price cars. The Dodge Diplomat is offered in two price classes known as the Salon and Medallion. A Plymouth Gran Fury is sold as a Salon, but not as a Medallion. A third model is the New Yorker Fifth Avenue which is unique to the Chrysler-Plymouth line. Dodge is the truck division of Chrysler Corporation. It is the intent of Chrysler Corporation to sell trucks only through its Dodge affiliates. In 1983, Chrysler-Plymouth dealers will only be able to sell 1982 Voyaoers and Arrow Pick-ups which are found at the dealers and 1983 Voyagers. In 1984, the Voyager truck line will be discontinued at Chrysler-Plymouth dealerships. Chrysler Corporation merchandises automobiles, with a utility feature which are sold as cars and known as Plymouth Scamps and Dodge Rampages. There are minimal differences in these vehicles and those differences are of the types described in its Turismo and Charger. Chrysler Corporation markets import models from Mitsubishi Motors Corporation, a Japanese manufacturer. These are two and four door automobiles whose sole differences are designations which indicate that they are imported for sale by Dodge or Plymouth. These automobiles are known as Colts, and are subcompacts. Chrysler Corporation also offers the Mitsubishi automobiles known as Sapporo and Challenger which are rear wheel drive automobiles whose differences relate to grill and tail light and interior appointments. The Challenger is a Dodge product and the Sapporo a Plymouth product. In 1984, Chrysler Corporation will offer sport automobiles known as G- 24s in both the Dodge and Chrysler-Plymouth line to compete with General Motors' Pontiac Firebird, Chevrolet Camaros, and Ford Mustangs. Dodge will offer an individual performance model known as the Turbo Z which will not be available in the Chrysler-Plymouth line. The Chrysler-Plymouth version will be offered with electronic instrumentation which is unique. In 1984, the T-115 series station wagon will be offered by both Dodge and Plymouth and a Dodge van version of that automobile will be offered. Loan values for the similar product lines in the Chrysler Corporation line are the same. Presently, the marketing and sales functions of Dodge and Chrysler- Plymouth are separate groups. Product development of the corporation is not a separate function between the two lines; however, it is intended that these two lines compete with each other. Reliant is the best selling Chrysler-Plymouth product and the Aries is the best selling Dodge product. John Burnett, the President of Massey Dodge, pointed out that twenty Percent (20 percent) of the sales of his company are in the southside area where Caruso would locate his dealership. The north side of Jacksonville is the main sales area. The Massey dealership can and does work on all Chrysler Corporation products with the exception of Imperial and the information related to all warranty work is sent to the same zone or same location in Detroit, Michigan. The dealership has experienced decreased sales in 1902, as compared to 1981, which has been an industry experience and its officials have been counseled to increase its minimum sales responsibility in 1982. This relates to the Chrysler Corporation's expectations on the number of units sold by its dealer. The dealership at Massey sells sixty percent (60 percent) used cars and half of its new car sales relate to Dodge trucks. William Shore, the President and owner of Westside Dodge, who has been in the car business for thirty-two years, established that approximately twenty percent (20 percent) of his automobile sales are in the southside area which would be the area in which Caruso would be opening its business to sell Chrysler-Plymouths. In 1982, Westside sold 234 Colts and Challengers, 154 Aries Ks, and 86 Omnis, to include Chargers and 71 Dodge 400s, up to the month of December for a total of 545 units and for the total year sold 597 new units. Relating again to automobile sales by Westside, 464 trucks were sold by Westside in 1982, out of a total of 1,061 sales. In 1981, 808 cars out of 1,215 sales were recorded; in 1980, 533 cars out of 983 sales were recorded and in 1979, 487 cars and 344 trucks were sold. The opening of the Caruso Chrysler-Plymouth dealership is felt by Shore to be a negative influence on the sale of its K and Colt cars. Moreover, the close proximity of the existing Regency Dodge and applicant Caruso Chrysler- Plymouth would promote a competitive advantage related to service, parts, body work and sale of new and used cars, as shown by Shore's testimony. Ninety-five percent (95 percent) of Westside sales are in Duval County with five percent (5 percent) out of the county. Within the ninety-five percent (95 percent) in Jacksonville, in addition to the twenty percent (20 percent) sales in southside, ten percent (10 percent) would be in the north side and seventy percent (70 percent) in the west side. The distance between Westside Dodge and River City Chrysler-Plymouth is approximately 250 to 300 feet on the same side of the street. George Hanlon, who is a Vice President of Rebuilding Services, Inc., which owns River City Chrysler-Plymouth, and is President of River City, gave testimony. Rebuilding also has a joint dealership in Tallahassee, Florida, which sells Dodge and Chrysler-Plymouths in one location. The availability of Chrysler-Plymouth and Dodge products from the same premises in Tallahassee, Florida, has been an advantage as it relates to overhead in the operation of that business. The Chrysler-Plymouth franchise in that facility is permanent and the Dodge franchise is for a two-year period with the expectation that the Dodge franchise will be relocated in a separate facility in the future. The Rebuilding Corporation had been involved with Ray Mixon Chrysler- Plymouth on Phillips Highway in Jacksonville, Florida, but that business failed. By way of explanation, Hanlon stated that Rebuilding was unable to successfully run both the Phillips Highway store and the River City operation. River City sells primarily in Duval County and in Baker County, which latter county is west of Jacksonville and Hanlon feels that the Dodge product line is the primary competition to Chrysler-Plymouth dealerships. Reference has been made to the utilization of the same facility to construct certain Chrysler Corporation automobiles which are sold as Dodges or Chrysler-Plymouths. In particular, as shown in the response to reguest for admissions made by the Petitioners to the Intervenors, at paragraph 14 of the first request for admissions; 1983 Plymouth Voyagers and 1983 Dodge Ram Wagons; 1983 Dodge Aries and 1983 Plymouth Reliant; 1983 Dodge 400 and 1983 Chrysler LeBaron; 1983 Dodge Challenger and 1983 Plymouth Sapporo; 1983 Dodge Mirada and 1983 Chrysler Cordoba; 1983 Dodge Omni and 1983 Plymouth Horizon; 1983 Dodge 600 and 1983 Chrysler E Class; and 1983 Dodge Rampage and 1983 Plymouth Turismo/Scamp and 1983 Dodge Diplomat and 1983 Plymouth Gran Fury are produced in the same assembly plants. Responses to the second set of admissions made from the Intervenors to Petitioners also connote similarities between various products within these automobiles within the product lines offered by Dodge and Chrysler-Plymouth, of a type previously described. The request for admissions and responses are transmitted with this Recommended order.
The Issue The issue in the case is whether an application for a new point franchise motor vehicle dealership filed by Zongshen, Inc., and Biker-Barn Source Sales, Inc., should be approved.
Findings Of Fact Biker-Barn is seeking to establish a new point franchise motor vehicle dealership at 924 Del Prado Boulevard South, Cape Coral, in Lee County, Florida, for line-make ZONG. The Respondent is an existing franchise dealer for ZONG-manufactured vehicles and is located within 12.5 miles of the proposed new point motor vehicle dealership location. The majority of the Respondent's vehicle sales come from within a 12.5-mile radius of the proposed dealership. The Respondent timely filed a protest of the proposed Biker-Barn dealership. There is no evidence that the Respondent is not providing adequate representation within the territory of the motor vehicles at issue in this proceeding.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department enter a final order denying the Petitioners' application for establishment of the new point franchise motor vehicle dealer franchise. DONE AND ENTERED this 2nd day of October, 2009, in Tallahassee, Leon County, Florida. S WILLIAM F. QUATTLEBAUM Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 2nd day of October, 2009. COPIES FURNISHED: Jennifer Clark Department of Highway Safety and Motor Vehicles Neil Kirkman Building, Room A-308 2900 Apalachee Parkway Tallahassee, Florida 32399-0635 Howard Chappell, Esquire Law Offices of Howard Chappell 1514 Cumberland Court Fort Myers, Florida 33919 Joe Arguinzoni Biker-Barn Source Sales, Inc. 924 Del Prado Boulevard South, Unit B Cape Coral, Florida 33990 Patricia Fornes Zongshen, Inc. 3511 Northwest 113th Court Miami, Florida 33178 Carl A. Ford, Director Division of Motor Vehicles Highway Safety and Motor Vehicles Neil Kirkman Building, Room B-439 2900 Apalachee Parkway Tallahassee, Florida 32399-0500 Robin Lotane, General Counsel Highway Safety and Motor Vehicles Neil Kirkman Building 2900 Apalachee Parkway Tallahassee, Florida 32399-0500
The Issue The issue for determination in this proceeding is whether Proposed Rules 15C-7.004(4)(a), (4)(b), and (7)(d) and Florida Administrative Code Rule 15C- 1.008 each constitute an invalid exercise of delegated legislative authority.
Findings Of Fact The Parties The Department of Highway Safety and Motor Vehicles (the "Department") is the agency responsible for promulgating and administering the rules challenged in this proceeding. The Department administers Chapter 320, Florida Statutes, 2/ which governs the operation of motor vehicle dealers and manufacturers in Florida. General Motors Corporation ("GM") is a corporation incorporated in Delaware and registered to do business in Florida. GM's corporate address and principal place of business is 3044 West Grand Boulevard, Detroit, Michigan 48202. GM is licensed by the Department, pursuant to Section 320.60, Florida Statutes, as a manufacturer of motor vehicles. GM has entered into and will enter into dealer sales and service agreements to authorize motor vehicle dealers to sell GM vehicles at locations in Florida. The Florida Automobile Dealers Association (??FADA??) and the South Florida Auto Truck Dealers Association ("SFATDA") are trade associations composed of both domestic and foreign line-make franchised motor vehicle dealers. FADA is composed of more than 800 franchised motor vehicle dealers licensed in the state. SFATDA is composed of virtually all franchised motor vehicle dealers in Palm Beach, Broward, Dade, and Monroe Counties. The Motor Vehicle Manufacturers Association of the United States, Inc. ("MVMA") is a trade association whose member companies manufacture motor vehicles produced in the United States. MVMA members include Chrysler Corporation, Ford Motor Company, GM, Honda of America MFG., Inc., Navistar International Transportation Corporation, PACCAR Inc., and Volvo North America Corporation. The principal place of business for MVMA is 7430 Second Avenue, Suite 300, Detroit, Michigan 48202. All of the members of MVVA, including Ford Motor Company ("Ford"), are licensed pursuant to Section 320.61, Florida Statutes. The Association of International Automobile Manufacturers, Inc. ("AIAM") is a trade association of manufacturers and manufacturer-authorized importers which import motor vehicles for sale in the United States. AIAM members and associates affected by the challenged rules include: American Honda Motor Company, Inc.; America Suzuki Motor Corporation; BMW of North America, Inc.; Daihatsu America, Inc.; Fiat Auto U.S.A., Inc.; Hyundai Motor America; Isuzu Motors America, Inc.; Jaguar Cars, Inc.; Mazda Motor of America, Inc., Mitsubishi Motor Sales of America, Inc.; Nissan North America, Inc.; Peugeot Motors of America, Inc.; Porsche Cars North America, Inc., Rolls-Royce Motor Cars, Inc.; Rover Group USA, Inc.; Saab Cars, USA, Inc.; Subaru of America, Inc.; Toyota Motor Sales, U.S.A., Inc.; Volkswagen of America, Inc., Volvo North America Corporation; and Yugo America, Inc. The principal place of business for AIAM is 1001 19th Street North, Suite 1002, Arlington, Virginia 22209. Each member of AIAM is either licensed as an importer, pursuant to Section 320.61, Florida Statutes, or maintains a contractual relationship with a distributor which is licensed pursuant to Section 320.61. Toyota Motor Sales, U.S.A., Inc. ("Toyota"), for example, is not licensed in the state as an importer. Toyota, however, maintains a contractual relationship with Southeast Toyota, Inc., which is licensed as a distributor for the purpose of marketing motor vehicles in Florida. Hyundai Motor America ("Hyundai") is an importer of motor vehicles. Hyundai's principal place of business is 10550 Talbert Avenue, Fountain Valley, California 92728. Members of MVMA and AIAM, as well as Ford and Hyundai, have entered into and will continue to enter into dealer sales and service agreements to authorize motor vehicle dealers to sell GM vehicles at locations in Florida. Ed Morse Chevrolet of Seminole, Inc. ("Morse") is an applicant for a license as a franchised motor vehicle dealer. The application of Morse was approved after a hearing pursuant to Section 320.642, Florida Statues. Morse's facility, however, is not yet completed and it would be adversely affected by the enforcement of Proposed Rules 15C-7.004(7)(d) and Rule 15C-1.008. The portions of the proposed and existing rules challenged in this proceeding will affect the substantial interests of the parties to this proceeding. The Challenged Rules Proposed Rule 15C-7.004 was published in the Florida Administrative Weekly, Vol. 17, NO. 16, at page 1721, on April 19, 1991 (the "Proposed Rule"). The particular portions of the Proposed Rule challenged in this proceeding are hereinafter identified by the underlining in the quoted portion of the Proposed Rule. Proposed Rule 15C-7.004(4)(a) provides: Application for Reopening or Successor Dealership, or for Relocation of Existing Dealership. If the license of an existing franchised motor vehicle dealer is revoked for any reason, or surrendered, an application for a license to permit the reopening of the same dealer or a successor dealer within twelve months of the license revocation or surrender shall not be considered the establishment of an additional dealership if one of the conditions set forth in Section 320.642(5) is met by the proposed dealer. (emphasis added) Proposed Rule 15C-7.004(4)(b) provides: Application for Reopening or Successor Dealership, or for Relocation of Existing Dealership. An application for change of address by an existing dealer under this section shall be filed on form HSMV 84712, Application For Change of Location (Address) Of Dealer In Motor Vehicles, Mobile Homes or Recreational Vehicles, which is hereby adopted by reference, provided by the Department. The dealer shall indicate which provision of Section 320.642(5) Florida Statutes, if any, it contends exempts the proposed location from consideration as an additional dealership. (emphasis added) Proposed Rule 15C-7.004(7)(d) provides: (7) Hearing and Post-Hearing Procedures. (d) If the proposed additional or relocated dealership is approved construction on the dealership shall begin within 12 months of the date of the final order. The applicant must complete construction and finalize its preliminary application for license within twenty-four months of the date of the final order. This period may be extended by the Department for good cause. (emphasis added) Florida Administrative Code Rule 15C-1.008 provides: Any person who contemplates the establishment of a motor vehicle business for the purpose of selling new motor vehicles, for which a franchise from the manufacturer, distributor or importer thereof is required, shall, in advance of acquiring building and facilities necessary for such an establishment, notify the Director of the Division of Motor Vehicles of his intention to establish such motor vehicle business. Such notice shall be in the form of a preliminary filing of his application for license and shall be accompanied by a copy of any proposed franchise agreement with, or letter of intent to grant a franchise from, the manufacturer, distributor or importer, showing the make of vehicle or vehicles included in the franchise; location of the proposed business; the name or names of any other dealer or dealers in the surrounding trade areas, community or territory who are presently franchised to sell the same make or makes of motor vehicles. Upon receipt of such notice the Director shall be authorized to proceed with making the determination required by Section 320.642, Florida Statutes, and shall cause a notice to be sent to the presently licensed franchised dealers for the same make or makes of vehicles in the territory or community in which the new dealership proposes to locate, advising such dealers of the provisions of Section 320.642, Florida Statutes, and giving them and all real parties in interest an opportunity to be heard on the matters specified in that Section. Such notice need not be given to any presently licensed notice dealer who has stated in writing that he will not protest the establishment of a new dealership which will deal in the make or makes of vehicles to be included in the proposed franchise in the territory or community in which the new dealership proposes to locate. Any such statements or letters of no protest shall have been issued not more than three months before the date of filing of the preliminary application. The Director may make such further investigation and hold such hearing as he deems necessary to determine the questions specified under Section 320.642. A determination so made by the Director shall be effective as to such license for a period of twelve (12) months from the date of the Director's Order, or date of final judicial determination in the event of an appeal, unless for good cause a different period is set by the Director in his order of determination. (emphasis added) Rulemaking authority for Proposed Rule 15C-7.004 is found in Sections 320.011 and 320.27(3), Florida Statues. The law implemented by the proposed rule is found in Sections 320.27 and 320.60-320.70. Rulemaking authority for Florida Administrative Code Rule 15C-1.008 is found in Sections 320.011, 320.27(3), and 320.69. The law implemented by the existing rule is found in Sections 320.27 and 320.642.
Conclusions This matter came before the Department for entry of a Final Order upon submission of an Order Closing File by June C. McKinney, Administrative Law Judge of the Division of Administrative Hearings, pursuant to Petitioner’s letter of withdrawal of protest of the establishment of AutoNation Dodge of Pembroke Pines, Inc., 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 and ADJUDGED that Respondent, AutoNation Dodge of Pembroke Pines, Inc. be granted a license for the sale and service of Jeepr passenger cars and light trucks manufactured by Chrysler (JEEP) 13601 Pines Boulevard, Pembroke Pines (Broward County), Filed January 27, 2012 3:47 PM Division of Administrative Hearings Florida 33027 upon compliance with all applicable requirements of section 320.27, Florida Statutes, and all applicable Department rules. DONE AND ORDERED this A‘! day of January, 2012, in Tallahassee, Leon County, Florida. skill, Assistant Deputy Director Division of Motorist Services Department of Highway Safety and Motor Vehicles Neil Kirkman Building, Room A338 Tallahassee, Florida 32399 Filed with the Clerk of the Division of Motorist Services this | __ day of January, 2012. Nalini Vinayak, Dealer Ycense 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. MDM/jde Copies furnished: Thomas H. Yardley, Esquire Law Office of Thomas H. Yardley 1970 Michigan Avenue, Building D Cocoa, Florida 32922 Phil Langley Chrysler Motors, LLC 10300 Boggy Creek Road Orlando, Florida 32824 R. Craig Spickard, Esquire Kurkin Forehand Brandes, LLP 800 North Calhoun Street, Suite 1B Tallahassee, Florida 32303 Dean Bunch, Esquire Nelson, Mullins, Riley and Scarborough LLP 3600 Maclay Boulevard South, Suite 202 Tallahassee, Florida 32312 June C. McKinney Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 Nalini Vinayak Dealer License Administrator STATE OF FLORIDA DIVISION OF ADMINISTRATIVE HEARINGS MASSEY-YARDLEY CHRYSLER PLYMOUTH, INC., Petitioner, vs. Case No. 11-6492 CHRYSLER GROUP CARCO, LLC, AND AUTONATION DODGE OF PEMBROKE PINES, INC., Respondents.
