The Issue Whether Respondent’s statement contained in June 4, 2004, correspondence to the controller of the Daytona Beach Kennel Club, Inc., constitutes a rule of the agency which has not been adopted by the rule making procedures provided in Section 120.54, Florida Statutes. Statutory references are to Florida Statutes, 2004, absent contrary indication.
Findings Of Fact Petitioners are St. Petersburg Kennel Club, Inc; West Flagler Associates, Ltd. (Flagler Greyhound Track); Washington County Kennel Club, Inc. (Ebro Greyhound Track); Daytona Beach Kennel Club, Inc. (Daytona Beach Kennel Club); and Southwest Florida Enterprises, Inc. (Bonita-Ft. Myers Greyhound Track). Respondent is the State of Florida, Department of Business and Professional Regulation, Division of Pari-mutuel Wagering, an agency created by Section 20.165(2)(f), Florida Statutes. Pursuant to Chapter 550, Florida Statutes, Respondent is vested with general regulatory authority over Petitioners and the operation of cardrooms at licensed and permitted pari-mutuel facilities. Each Petitioner is the holder of a pari-mutuel waging permit and a license issued by Respondent pursuant to provisions of Chapter 550, Florida Statutes, for the conduct of pari-mutuel wagering on greyhound races. Each Petitioner also holds a licensed issued by Respondent pursuant to Section 849.086, Florida Statutes, for conduct of a cardroom at its pari-mutuel facility. Each Petitioner is authorized to conduct a “meet” consisting of live racing. Each authorized meet includes evening performances generally consisting of 14 races. One or more of those races can take place after midnight but before 1:30 a.m. on the next calendar day. Each Petitioner is authorized to accept pari-mutuel wagers on each such race. Petitioner Daytona Kennel Club, by correspondence of May 27, 2004, provided a revised cardroom calendar to Respondent for approval. Respondent, in reply correspondence of June 4, 2004, pointed out that proposed day-long cardroom operation on Sunday as a result of Saturday live racing events that extended into Sunday morning, was not permissible under provisions of Section 849.086(7)(b), Florida Statutes. Respondent’s correspondence, in pertinent part, reads as follows: [Y]ou contend that if at least one Saturday race will occur after 12:00 midnight, then Sunday cardroom operation would be permitted, without any additional pari-mutuel events being held that day, under Section 849.086(7)(b), Florida Statutes. The foregoing statutory section states, “[a] cardroom may be operated at the facility only when the facility is authorized to accept wagers on pari-mutuel events during its authorized meet.” A plain reading of this language makes it evident that the Legislature intended that cardrooms be considered an adjunct to live racing, not a replacement or a substitute. As it stands today, you have not been authorized to conduct a pari- mutuel event on Sundays. Respondent’s letter of June 4, 2004, to Petitioner Daytona Beach Kennel Club, was a specific response to matters raised by that Petitioner in its letter of May 27, 2004. A final declaratory judgment issued on July 26, 2004, in the Second Judicial Circuit in Case No. 2002-CA-2971 invalidates changes to Section 550.615(6), Florida Statutes, resulting from passage of Chapter 96-364, Laws of Florida. Presently under appeal and stayed pending further decision, that ruling also invalidates Section 849.086, Florida Statutes, due to the non-severability language contained in Section 550.71, Florida Statutes. In the event of an appellate decision affirming that ruling, Respondent’s authority to regulate the hours of cardroom operation would be rendered inoperative.
Findings Of Fact Until shortly before his death in December of 1976, Frank Dioguardi ran the business now owned by petitioner. When Mr. Dioguardi left off handling the day to day affairs of the business, his wife's brother, Frank Sutera, took over; and continued to operate the business for some months after Mr. Dioguardi's death. At no time, however, was Mr. Sutera compensated for the work he did for the business. He never held stock or any other ownership interest in the business and he never loaned the business money. In January of 1977, Frank Dioguardi's widow, Camille, and Mr. Sutera, Camille's brother, signed a form addressed to the Bank of Hallandale authorizing the bank to honor checks drawn either by Mrs. Dioguardi or by Mr. Sutera on the business' account. The body of the form begins: This is to advise you that (I am)(we are) the sole owner(s) of the (partnership)(firm) operating under the name of Frank Dioguardi d/b/a Beach Music Company that your bank has been agreed upon and designated as a depository for funds of said partnership . . . Petitioner's exhibit No. 4 (handwritten insertion in printed form underlined). Frank Sutera did in fact draw checks against the business' account during the period that he operated the business. Petitioner's exhibit No. 8. On July 25, 1977, the business was organized as a corporation, Beach Music Co., Inc. Petitioner's exhibit No. 6. Ever since its incorporation, all the shares of Beach Music Co., Inc. have been held by Camille Dioguardi. Beach Music Co., Inc. succeeded to the bank account originally owned by Frank Dioguardi and later controlled by Mrs. Dioguardi and Mr. Sutera. According to bank records, Camille Dioguardi, as president, and her daughter, Rosa Alvarez, as secretary of for Beach Music Co., Inc., gained exclusive control of this account no earlier than December 20, 1977; and had exclusive control at the time of the hearing. At the time of the hearing and continuously for over a year, Carlos Alvarez, Rose's husband, had operated the business. He had been the corporation's only employee for some time. Since August 8, 1977, nobody other than Mrs. Dioguardi had drawn checks on the corporation's account. On or about November 8, 1977, petitioner submitted to respondent a completed application for wholesaler's cigarette permit, dated September 23, 1977. Petitioner's exhibit No. 3. Item No. 8 on this application form directs: "If ownership is by individual or partnership complete this section, listing all persons connected, directly or indirectly, in the business:" Then follow blanks in which to indicate connected persons' names, ages and places of residence for the past five years. These blanks have not been filled in. Item No. 9 directs: "If ownership is by corporation complete this section:" Then follow blanks in which to indicate the corporate officers' names, ages and places of residence for the past five years. In this space, Camille Dioguardi is listed as president and Rosa Alvarez is listed as secretary and as treasurer. After item No. 13 on the application form the initials "A.S." appear. On September 20, 1977, respondent received personal questionnaires dated September 13, 1977, filled out by Mrs. Dioguardi and Mrs. Alvarez, respectively. After conversations with respondent's agents, Frank Camiso and Eddie L. Alford, Mrs. Dioguardi executed an affidavit on February 1, 1978, detailing Anthony Sutera's relationship to the business and stating, inter alia, that "In August [of 1977] . . . Anthony Sutera ceased to render any aid in the operation of the business." Petitioner's exhibit No. 8. This affidavit was furnished to respondent. According to Officer Alford, Mrs. Dioguardi cooperated fully in his investigation and never denied Mr. Sutera's relationship.
Recommendation Upon consideration of the foregoing, it is RECOMMENDED: That respondent grant petitioner's application. DONE and ENTERED this 21st day of December, 1978, in Tallahassee, Florida. ROBERT T. BENTON, II Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: Dennis E. LaRosa, Esquire Staff Attorney 725 South Bronough Street Tallahassee, Florida 32304 William Goldworn, Esquire 285 Sevilla Avenue Coral Gables, Florida 33134
Findings Of Fact The Respondent Louis C. Eder (hereafter Respondent) is a registered building contractor holding license number RB 0010762. At all times pertinent to this proceeding, the Respondent was the qualifying agent for Lujack Construction Company. On September 11, 1979, Dennis Ecks, a complainant in this proceeding, entered into a written contract with Abco Contracting and Construction Company, through its agent Jack Greenblatt, for remodeling his residence for the sum of $5,200. The permit for the Ecks job was pulled by the Respondent in the name of Lujack Construction Company. Ecks paid $4,900 to Abco for the job. He withheld $300 to compensate for the failure of Abco to install a screen door. Ecks paid the $4,900 directly to Abco and never met or spoke to the Respondent during the time the contract was being negotiated and executed. After the job was started, the Respondent sent letters to Ecks rescinding the permit for the job and orally communicated his concern that Ecks should exercise caution in his business dealings with Abco. The Respondent received no monies from either Ecks or Abco for the Ecks' job. On January 21, 1980, Dominic Sicilian, the other complainant in this proceeding, entered into a written contract with Abco General Contracting and Construction Company, through its agent, Jack Greenblatt, to enclose a carport for $11,675. The permit for the Sicilian job was pulled by the Respondent in the name of Lujack Construction Company. Sicilian paid $9,000 of the contract sum directly to Abco. This job was abandoned after approximately fifty percent of the construction work was completed, Sicilian, like Ecks, had no discussions with the Respondent before the contract was executed. Approximately one year after the contract was executed, Sicilian spoke to the Respondent concerning his problems with Abco. At that time the Respondent offered to finish the job for the remainder of the contract price. Additionally, shortly after Abco started the job, the Respondent informed Sicilian, both orally and in writing, that he would not be working on the job because he had not been paid by Abco and Sicilian should exercise caution in his business dealings with Abco. Both Ecks and Sicilian believed that they were dealing with Abco and neither had any knowledge of Lujack Construction or its relationship to Abco. The Respondent did not enter into construction contracts with either Ecks or Sicilian. The Respondent began working for Abco in the capacity of foreman. Shortly after commencing employment with Abco, the Respondent was requested by Abco to obtain permits for pending jobs due to a problem Abco encountered in obtaining permits. The problem resulted from Abco maintaining a business in an area zoned noncommercial. Approximately two weeks after commencing employment with Abco, the Respondent's relationship with Abco changed and he became the contractor on the job under the name Lujack Construction Company, a name which the Respondent had used for many years. Shortly after commencing work at Lujack Construction, the Respondent quit when he was not paid from the first draw. The Respondent terminated his relationship with Abco and notified Ecks and Sicilian that he was no longer working on the job due to non-payment and was rescinding the permits which he had pulled. The Respondent attempted without success to as certain the proper procedure to terminate the permits by directing inquiries to the Cooper City Building Department, Broward County Building Department, Palm Beach County Building Department and the Palm Beach County Construction Industry Licensing Board and the Department of Professional Regulation. The Respondent has been a licensed general contractor for fourteen years. During that period of time, he has built hundreds of homes in the Palm Beach area. Other than the complaints filed in the instant case, the Respondent has not been the subject of any previous complaint or disciplinary proceeding.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED: That a Final Order be entered by the Petitioner Construction Industry Licensing Board dismissing the Administrative Complaint filed against Respondent Louis C. Eder. DONE and ENTERED this 15th day of March, 1983, in Tallahassee, Florida. SHARYN L. SMITH, 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 15th day of March, 1983.
The Issue The issue presented for determination herein is whether or not the existing Pontiac dealers serving the West Palm Beach area are providing inadequate representation.
Findings Of Fact Art Moran filed an application with the Department seeking licensure as a franchised Pontiac-GMC motor vehicles dealer. The GMC license is not at issue herein. By its application, it sought the issuance of a license to operate a new Pontiac dealership in Palm Beach County on Northlake Boulevard (stipulation of the parties). A letter of protest to the application was timely filed by Stewart pursuant to Section 320.642, Florida Statutes. (stipulation of the parties) THE MARKET AREA The relevant market area for purposes of Section 320.642 is the West Palm Beach multiple dealer area (MDA). 1/ The West Palm Beach MDA consists of the densely populated portion of eastern Palm Beach County (Exhibits 9-10). The West Palm Beach MDA has been divided into three smaller markets known as areas of geographic sales and service advantage ("AGSSA") (GM Exhibit 6-7). AGSSA's are developed by GM as a dealer network planning tool. (I-92, 100, 103). Each AGSSA consists of those census tracts closest to a proposed or existing dealer and identifies an area of shopping convenience for consumers in that AGSSA. (GM Exhibits 19 and 20) Each AGSSA represents the area in which an existing or proposed resident dealer has or would have an advantage over the same line make dealer(s) in the MDA by virtue of the resident dealer's location. (I-103). AGSSA I is that portion of eastern Palm Beach County generally lying between 45th Street and Lantana Road. AGSSA II is south of AGSSA I and essentially surrounds the Delray Beach area. AGSSA III is the area of Palm Beach County north of 45th Street where Art Moran has proposed to be located. (GM Exhibit 6, 7). Stewart offered no alternative market definition for performing a registration penetration analysis of the West Palm Beach community. MARKET PENETRATION IN THE WEST PALM BEACH MDA General Motors conducts periodic analyses of market penetration in each MDA by reviewing registration data provided by R. L. Polk and Company ("Polk") at both the county and census tract levels (GM Exhibit 8). The registration data provided by Polk includes every vehicle registered to an address within a particular area of geography (county or census tract) regardless of the selling dealer. Stewart raised an issue during the hearing respecting the reliability of certain market penetration data gleaned from the Polk figures for 1985. This issue was raised based on the parties' inability to affirmatively state whether certain transactions calculated by Polk were fleet or retail transactions. Both parties relied on the Polk data and it is the industry standard for tracking automobile registrations. The Polk data is reliable for the purposes introduced by GM. Adequacy of representation is primarily determined by using retail registration data. The Polk data includes the components of retail and fleet as well as total registrations. (GM Exhibits 25-27). Both parties have used Polk retail registration data to analyze market penetration. (GM Exhibits 25-35, Stewart Exhibits I-N). Retail market penetration is a relative concept that compares the retail registration of one line make with all industry registrations in a particular geographic area. For example, 7.02 percent of all the vehicles registered in the Jacksonville zone for retail use were Pontiac in 1985. Thus, Pontiac's market penetration in the zone was 7.02 percent. (I- 107; GM Exhibit 17). Correspondingly, 5.32 percent of all retail vehicles registered in the West Palm Beach MDA in 1985 were Pontiacs for an MDA average of 5.32 percent, or 1.70 percent below zone average. (GM Exhibits 34 and 35). Market penetration compares total industry retail registrations in an area to the retail registrations of a particular line make in that area. An individual dealer's sales records are not helpful when evaluating market penetration. Retail registration efficiency to Jacksonville's zone average is the percentage relationship between retail penetration in a geographic area and zone penetration. In 1985, the retail registration efficiency of the West Palm Beach MDA to zone areas was 75.8 percent, the lowest penetration in the Jacksonville zone. (GM Exhibit 3). Retail registration efficiency in the West Palm Beach MDA has steadily declined since 1985. (I-154, 155, 157; GM Exhibit 27 utilizing the Polk community registration reports). MDA Retail Reg: 1981 1982 1983 1984 1985 March, 1986 annualized INDUSTRY 31,845 31,328 39,273 42,247 43,797 41,128 PONTIAC 2,356 2,220 2,590 2,639 2,460 2,152 PONTIAC percent 7.4 7.1 OF INDUSTRY 6.6 6.4 5.6 5.2 Zone Retail Reg: PONTIAC percent 8.5 7.4 7.4 7.2 7.0 7.6 OF INDUSTRY Further, from 1981 to 1985, industry retail registrations in the MDA have increased 11,952 vehicles or 38 percent while Pontiac retail registrations increased only 104 units or 4 percent (GM Exhibits 27 and 28). Stewart's sales increased only 41 units or 3 percent in the same time period. (I-159). The sales performance of the West Palm Beach dealers has declined 10 percent from 1984 to 1985. Stewart's sales were also down in 1985 (I-159). Perhaps a contributing factor to Stewart's sales performance is his practice of putting supplemental dealer price stickers averaging $800 extra on each car. According to Mr. Stewart, such additional charges make cars more difficult to sell (GM Exhibit 66, p. 345). In 1985, the Pontiac West Palm Beach MDA ranked 123rd in retail penetration when compared with the 159 largest Pontiac markets in the United States. (I-95; GM Exhibit 4). Based on retail penetration, the West Palm Beach MDA has been the worst MDA in Pontiac's Jacksonville zone since 1983 (GM Exhibits 30, 32 and 34) In AGSSA III The most current registration data available at the AGSSA level is year-end 1985 data. This data was available to both parties prior to the hearing. The parties agree that the most current data is required to do market research. In this regard, Stewart relied on outdated data in a number of its exhibits (see, for example, Stewart Exhibits D, J, O, P and W.) The West Palm Beach MDA retail penetration has been consistently below zone and national retail penetration. (GM Exhibit 27). AGSSA III has repeatedly had the worst penetration in the MDA (GM Exhibit 35). For the years 1983, 1984 and 1985, Pontiac's retail penetration figures nationally in the Jacksonville zone, in the West Palm Beach MDA and in the three AGSSA's were as follows-utilizing census tract reports: Zone National West Palm Beach MDA AGSSA 1 AGSSA II (middle) (south) AGSSA III (north) 1983 7.42 6.13 6.86 7.8 6.3 6.2 1984 7.15 6.00 6.41 6.8 6.3 5.9 1985 7.02 6.99 5.32 5.6 5.4 4.7 Recognizing the growth in northern Palm Beach County, Pontiac established AGSSA III as a study area--an area set aside to determine the potential for representation--as early as 1978. Due to the growth, the decline in market penetration, and other factors, the study was converted to a proposed additional point. An additional dealer in an area tends to increase market penetration in its line make to the benefit of the existing same line make dealers. (GM Exhibits 49, 50, 54, 55 and 57). The parties agreed that size class is a factor that may be considered in addressing market penetration. (GM Exhibits 38 through 40; Stewart Exhibits I through Q). Mr. Gahrs testified that model mix is not as significant as line make. Pontiac competes with the full line of vehicles offered by Ford, Chevrolet and the imports (I-168). LOST OPPORTUNITIES "Lost opportunities" is the difference between actual Pontiac retail registrations in an area and the number of registrations that would have occurred had a given norm (i.e. zone average penetration) been achieved. The number of lost opportunities represents the number of registrations available to the Pontiac dealers in the MDA had zone average penetration been attained. (GM Exhibits 30, 32, 34, 39 and 40). The parties agree that lost opportunities exist in AGSSA III and that those losses are increasing: LOST OPPORTUNITIES COMPARED TO ZONE RETAIL PENETRATION 1983 1984 1985 Zone Penetration 7.42 7.15 7.02 MDA (241) (312) (733) AGSSA I no loss (54) (227) AGSSA II (182) (164) (320) AGSSA III (84) (95) (187) The above graphically portrayed the poor market penetration in the West Palm Beach MDA and AGSSA III. (GM Exhibits 30 through 35). Stewart also recognizes the theory of lost opportunity but calculates the loss by comparing the MDA to itself. The car loss which has almost doubled from 1984 to 1985 appears to be growing, based upon the first three months of 1986. Annualized for 1986, the MDA car loss will be 976 (GM Exhibit 27). The lost opportunity in the MDA when adjusted for product popularity drops slightly. However, when the high level of in-sells (cars sold by dealers outside an area but registered in an area in the West Palm Beach MDA) is considered (GM Exhibit 21), the lost opportunity to the dealers doubles from 733 to 1,524 (GM Exhibits 22, 34 and 35). The parties agree that high levels of in-sells can be caused by deficient dealer performance or inadequate representation. The parties also agree that there is a shortfall in registration performance in AGSSA III and that lost opportunities exist in AGSSA III. (GM Exhibit 34; Stewart Exhibit Q, last two pages). CUSTOMER CONVENIENCE The parties also agree that if a manufacturer offers better convenience, better penetration will result. According to Mr. Stewart, the closer the people are to his dealership, the higher the penetration. (GM Exhibit 66, page 332). In fact, there is a high concentration of retail registrations surrounding each Pontiac MDA dealer. (GM Exhibits 19 and 20). Stewart, the Pontiac dealer with the best level of convenience (4.5 miles) has the highest level of sales (1,391 sales) and the highest level of penetration in the MDA (5.6 percent). (Stewart Exhibit E, weighted average distance by dealer, by AGSSA; GM Exhibit 35). In AGSSA III, where Pontiac has its lowest level of customer convenience in the MDA, Pontiac retail penetration is also lowest. (GM Exhibits 35 and 45). Potential buyers in AGSSA's I and II enjoy far greater convenience to the nearest Pontiac dealer than does a potential buyer living in AGSSA III. (GM Exhibit 45; Stewart Exhibit E, Section 2, page 2). All manufacturers represented in AGSSA I and AGSSA II offer similar levels of convenience. On the other hand, the average consumer must travel almost twice as far from his residence in AGSSA III to reach a Pontiac dealer than to reach a Chevrolet, Honda, Ford, Nissan, Volkswagen or Toyota dealer. Correspondingly, Chevrolet, Honda, Ford, Nissan and Volkswagen have higher penetration in AGSSA III than their MDA average. (GM Exhibits 43 and 44). Easy access to a dealer can help improve penetration for a manufacturer. Similarly, an improper location can result in low penetration. (GM Exhibit 43). The sales and service facilities offered by the existing Pontiac dealers in AGSSA's I and II are or soon will be adequate. However, even expanding, optimally located facilities cannot adequately serve a large and growing market. Facilities expansion will not, standing alone, result in increased sales, improved penetration or higher rates of registrations. The West Palm Beach market has simply outgrown the existing 2-dealer network for Pontiac. Proximity is the distance between the home address of a customer or prospective customer of an automobile and the location of the selling dealer. The parties agree that proximity relates to intra-brand competition--competition among dealers of the same line make, and inter-brand competition--competition among dealers of different line makes. The parties also agree that proximity affects intra-brand competition. Seventy-five percent of Pontiac buyers in West Palm Beach travel to the closest Pontiac dealer to purchase a Pontiac. Nationally, sixty percent of purchasers buy from the nearest dealer. (Stewart Exhibit F, Power's Study). The majority of Pontiac purchasers in West Palm Beach are proximity sensitive. Proximity affects inter-brand competition. Manufacturers providing convenience to customers in AGSSA III have a greater opportunity to enjoy above- average penetration performance than manufacturers that do not offer similar levels of convenience. (GM Exhibits 43 and 44; Stewart Exhibit S). Further, Dr. Ostlund admits that the addition of a different line make dealer in AGSSA III could adversely affect Pontiac if it is not represented in AGSSA III, but he cannot determine the degree of the impact. Further indication that proximity affects inter-brand competition is a 1980 Power's Study of Pontiac purchases. That study showed that 72.4 percent of Pontiac purchasers nationwide visited one or more different line make dealerships before buying a Pontiac. The availability of a Pontiac dealership to proximity sensitive buyers is therefore very important. The Power's Study, deemed reliable by Stewart, contradicts the 1958 Ford study offered by Dr. Ostlund. (Stewart Exhibit F, Ford study). The Cort Dissertation, another source recognized by Stewart as reliable, also cautioned against broad use of the Ford results due to the methodology employed therein. Proximity only becomes a factor for Pontiac, however, when the competition offers relatively better level of proximity in comparison to Pontiac. The addition of a Pontiac dealer in AGSSA III would provide Pontiac customers convenience commensurate with the convenience offered by competitive line makes. Further, the customer convenience offered by Pontiac in AGSSA III would be twice as good as the convenience currently offered by Pontiac in AGSSA III and would be consistent with its convenience offered (by Pontiac) in AGSSA's I and II. (GM Exhibits 44 and 45). The proposed Pontiac location in AGSSA III will be 8.1 air miles from its nearest same line make competitor in AGSSA I. That distance is greater than the distance between the Ford, Toyota, Nissan, Volkswagen and Chevrolet dealers in AGSSA III and their nearest same line make competitor. Thus, the distance of the proposed Pontiac dealer from Stewart is consistent with the respective distances between nearest same line make dealers in the MDA. (GM Exhibit 46). Measured by the shortest route in non-rush hour traffic, drive time from the proposed Art Moran location to the Stewart location is long when compared to the convenience levels offered by other line makes. The drive time between the two locations range from 12:50 minutes (Stewart Exhibit C, second to last page) to 14:30 minutes (GM Exhibit 1, page 35) via Interstate 95. The drive time between the proposed location and Stewart's location via US 1 is over 23 minutes (GM Exhibit 1, page 34). A consumer living in a typical residential area in AGSSA III, such as Old Port Cove traveling to Art Moran would travel less than half the time now required to reach Stewart and drive less than one- fourth of the distance (GM Exhibit 1, pages 34 and 35) Pontiac's lack of competitive convenience in AGSSA III is a significant factor in its inadequate retail market penetration. Stewart offered no current data or objective, quantifiable evidence to rebut GM's evidence that customer convenience is directly related to retail market penetration. THE STANDARD Pontiac's zone average penetration, 7.02 percent, is a reasonable norm to use in evaluating the West Palm Beach MDA for five reasons: All Florida markets exceeded national average in 1983, and three of those markets exceeded zone average. In West Palm Beach, AGSSA I exceeded both the zone and national average. (GM Exhibits 30 and 31). Pontiac's penetration in Jacksonville and Pensacola exceeded both zone and national average in 1984. In West Palm Beach, AGSSA I was virtually at national average. (GM Exhibits 32 and 33). Adjusting for product popularity, the MDA should be attaining a penetration level of 95 percent of zone average (GM Exhibits 39 and 40). The demographic characteristics of the community approach national average. (GM Exhibits 36 and 37). Some census tracts in the West Palm Beach MDA are currently attaining or exceeding zone and national average penetration. (GM Exhibits 17 and 18). To develop a reasonable norm, it is necessary to determine what level of penetration an MDA can attain. Selecting a market which is inadequate to develop a standard of adequacy is not proper. Nor is it proper to compare an MDA with a level it is achieving in a given year and contend that it has achieved its full potential. Zone or national average penetration is the proper level of performance for an MDA that is performing at substandard levels. Compared to the 1985 zone average of 7.02 percent, only 5.32 percent of the vehicles registered in the MDA were Pontiacs, and in AGSSA III only 4.66 percent of the vehicles registered were Pontiacs. That deficiency results in a penetration shortfall of 733 units in the MDA compared to zone average (GM Exhibits 34 and 35). That lost opportunity is even more significant in AGSSA III where the lost units amount to 187 in an area where only 369 Pontiacs were registered in 1985 (GM Exhibits 34 and 35). THE NEED FOR MARKET REPRESENTATION Pontiac is not achieving adequate levels of penetration in either the West Palm Beach MDA or in AGSSA III. The cause of that inadequacy is that the market has outgrown the existing 2-dealer network for Pontiac. Since 1950, population in the MDA has increased seven-fold, but the number of dealers has remained at two (GM Exhibit 42). In Florida, the ratio of population to approved Pontiac dealer points is approximately 250,000 to 1 (GM Exhibit 42). The ratio of registrations per approved dealer point is approximately 10,000 to 1 (GM Exhibit 41). Based on the size of the market alone, West Palm Beach could support at least one additional dealer. The relative levels of convenience in the MDA also support additional Pontiac representation in AGSSA III. Six manufacturers offer higher levels of relative convenience to AGSSA III buyers than does Pontiac: Volkswagen, Honda, Chevrolet, Ford, Nissan and Toyota (GM Exhibit 44). Those manufacturers have a competitive advantage over Pontiac in AGSSA III. The most recent data available supports the proposition that, in order to have an opportunity to achieve areas of better than average penetration in an area, a manufacturer must be represented in that area (GM Exhibits 43 and 44). Of the 13 major line makes represented in the MDA, only those manufacturers represented in AGSSA III exceed their MDA average in that AGSSA (GM Exhibit 43). Convenience is not an issue in AGSSA's I and II where relative proximity is provided by all manufacturers. However, in AGSSA III, the prospective Pontiac purchaser must travel twice as far than other Pontiac purchasers in the MDA (GM Exhibit 45), and twice as far as purchasers of vehicles from manufacturers represented in AGSSA III to purchase a vehicle (GM Exhibit 44). The distance between the proposed Art Moran site and Stewart is consistent with the distance between dealers in AGSSA's III and the closest same line make dealer in AGSSA I (GM Exhibit 46). Lack of proximity was one factor influencing those individuals in AGSSA III who desired a Pontiac, but who did not purchase Pontiacs since seventy-five percent of Pontiac purchasers in the MDA are proximity-sensitive. Pontiac cannot be adequately represented in AGSSA III without establishing an additional dealership in AGSSA III. In 1985, the AGSSA I dealer placed 24 percent of its retail sales in AGSSA III (GM Exhibit 47) and the AGSSA II dealer placed less than five percent making it an insignificant factor in AGSSA III (GM Exhibit 22). To correct the penetration shortfall in AGSSA III, the AGSSA I dealer would have to sell over 750 additional units, an 80 percent sales increase (GM Exhibits 27, 28). This is highly unlikely given the historically flat sales performance of Stewart (GM Exhibit 27). It is industry practice to place a dealer in a market where market penetration is lowest. In order to achieve above-average penetration, a manufacturer must be represented (GM Exhibits 43, 47, 49, 50, 54-57). The combined efforts of the new dealer in an area coupled with those of the next closest dealer are usually required (GM Exhibit 47). Dealer additions in other markets have resulted in a consistent pattern (GM Exhibits 49, 50, 54-57): The existing dealers improve their sales performance; Penetration efficiency increases; and The distribution pattern of the dealer adjacent to the new point remains constant, despite addition of a dealer. GROWTH OF THE WEST PALM BEACH AREA Since 1950, the population of the area as a whole has increased more than sevenfold. The metropolitan area is expected to be the fastest growing in the nation by the turn of the century. (Moran Exhibit 1, Florida Forecast, January 1, 1986) There has been no change in the Pontiac dealer count in the last 36 years (GM Exhibit 43). Palm Beach County's 1985 population was 713,253, a 23.6 percent increase over the 1980 population of 576,863. (GM Exhibit 1, Table 1) As significant as that increase is, it is less than the 1980-85 increase experienced in AGSSA III, which went from 111,228 to 140,007 or a 26.1 percent increase (GM Exhibit 1, Tables 30 and 31). Dealers are usually added in growing areas. Palm Beach County has become economically diversified and its population is heterogeneous. AGSSA III mirrors these patterns. Consistent with these trends in population are increases in households, construction, employment, which are all growing rapidly for Palm Beach County as a whole and even faster for AGSSA III. (GM Exhibit 1, Tables 27 and 28) Per capita income, as well as the average household income, remains high in Palm Beach County and in AGSSA III. (GM Exhibits 12, 13 and 14) Moreover, in 1985 all but one of the census tracts in AGSSA III had a median household income higher than the county median. (GM Exhibit 1, Table 34) Most of the people of driving age in the market can afford automobiles. In fact, people in the country spend more on their automotive needs, in the aggregate, than on food. Similarly, all measures of residential and industrial commercial growth indicate substantial growth for Palm Beach County as a whole and even more growth in AGSSA III (GM Exhibit 1, Tables 2-7, and GM Exhibit 2). Building permit valuations have increased 700 percent from 1975 to 1985. Residential construction, either underway or approved, reflects the actual and anticipated growth of population in Palm Beach County. Retail sales in Palm Beach County increased 47 percent from 4.5 million dollars in 1980 to 6.6 million dollars in 1985. From 1984 to 1985, the civilian labor force increased by more than 3 percent, employment increased 4.6 percent and unemployment decreased 15.2 percent (GM Exhibit 1, Table 14). Large industrial and commercial firms such as IBM and Pratt and Whitney have located in AGSSA III. Traffic counts near the proposed point more than doubled from 1976 to 1984. (GM Exhibit 1, Table 35) Traffic volume is 5 times greater on I-95 near the location of the proposed dealer than on US-1 where Stewart is located. The "explosive" growth in the northern part of the West Palm Beach MDA has attracted extensive public and media attention. Research conducted by Mr. Stewart revealed a special section in the Palm Beach Post headline "Horizon Bright for North County." (Moran Exhibit 1, Palm Beach Post, July 21, 1985) As stated by the mayor of Palm Beach Gardens, "We are ready to explode. This is the hot spot for development." A regional mall is being constructed on PGA Boulevard in AGSSA III. The distance between this new mall and its nearest competitor to the south is similar to the distance between Moran's proposed location and Stewart. This mall, located in Palm Beach Gardens, "is actually a downtown. . . The 322 million dollar project combines residential, commercial and retail uses on property on the north side of PGA Boulevard between US-1 and Alternate A1A." (Moran Exhibit 1, Palm Beach Post, July 21, 1985, p. F-4) In addition to the development in the northern section of the county (essentially AGSSA III), development in the central section of Palm Beach County is also significant. Stewart, located in AGSSA I just east of the central section of Palm Beach County, is in a position to take advantage of this growth. Growth in the areas near the existing and proposed dealerships is strong. DEMOGRAPHICS Growth has led to demographic diversity in Palm Beach County. While the very wealthy remain, they have become less important as the middle and upper middle income groups have grown. Palm Beach County has become more like other urbanized counties in Florida. The entire MDA, in AGSSA III in particular, show heavy concentrations of household annual incomes between 15 and 40 thousand dollars and at levels above 40 thousand dollars (GM Exhibits 36 and 37). As of 1985, there were no census tracts in AGSSA III where the average household income was less than 15 thousand dollars. West Palm Beach and AGSSA III have residents in every age group. (GM Exhibit 36) Stewart has not performed any study which demonstrates a link or relationship between demographics and market penetration. ALLOCATION The Pontiac allocation system is based upon the number of sales reported by a dealer. The more cars sold by the dealer, the more car the dealer earns from the factory. Stewart Pontiac has had a history of not reporting sales promptly. Earl D. Stewart recognized the benefits of the Pontiac allocation system when he testified in the Fischer-Mazda case in 1980. In discussing the Phoenix, a hot or popular car that year (a car easy to sell), he compared the Pontiac system to that of Mazda. (GM Exhibit 66, pages 311-312): I would say that the Phoenix shortage compares most closely of any car I have in the line with the Mazda problem. However, the interesting thing with the Phoenix is that through sales efforts there is a direct correlation between selling more cars and earning more cars. . . With the Phoenix I have started out with a relatively small number of cars, and through my rates of sales, I have earned additional cars. So my experience, since the new X-body came out, I have earned additional products. Stewart maintains a large number of vehicle orders to ensure sufficient numbers of vehicles to sell. While Mr. Stewart suspects that other Pontiac dealers have a greater supply of popular vehicles and estimates that other manufacturers have more new cars at model introduction, he admitted that "my total inventory compares equitably with other Pontiac dealers in the zone. . ." (III-51) CUSTOMER SATISFACTION Both Pontiac and its dealers strive to satisfy the ultimate customer-- the automobile purchaser. Both the manufacturer and dealer must provide a level of satisfaction the customers expect. The customer is the best judge of whether satisfaction has been achieved. Customer satisfaction is measured through an involved market research procedure. General Motors measure customer satisfaction with both the product and the selling dealer. Overall experience with the selling dealer measures the customer satisfaction with the dealer's sales staff, delivery condition of the vehicle, and warranty service. 2/ Most dealers with low CSI ratings usually offer customers poor service (Montgomery deposition, pages 4 and 5). Responses from consumers regarding overall satisfaction are verified and evaluated. The parties agree that higher CSI scores are preferable. CSI results are used as a management tool. CSI assist the zone office and the dealer to identify problems in the dealership and allows the dealer an opportunity to correct noted deficiencies. Zone average is the minimum level of satisfaction acceptable to General Motors. Zone average is sales weighted, which tends to reduce the standard below the average of all consumer responses in the zone. A dealer whose CSI rating is below zone average is not providing the levels of satisfaction expected by either GM or the customer. Stewart Pontiac is significantly below zone average and does not provide adequate representation of GM relative to the other zone dealers. Over the past six quarters, Stewart Pontiac's CSI has declined from 6 points below zone average to 10 points below zone average: Quarter Zone Average CSI Stewart Pontiac CSI Difference 4th-1984 75 69 (6) 1st-1985 76 69 (7) 2nd-1985 77 71 (6) 3rd-1985 77 69 (8) 4th-1985 77 67 (10) While other dealers have improved their CSI during this period of time, Stewart has consistently been one of the worst performing dealers in the zone. The other Pontiac dealers in the MDA are performing at zone average. As of March, 1986, Stewart Pontiac is 13 points below national average and 10 points below zone average, a statistically significant difference. Moreover, developing a comparison with certain sub-groups of dealers, Stewart Pontiac is significantly below those averages. Utilizing GM's methodology, the parties agree that there is a significant difference between Stewart and any other sub-group or combination thereof (GM Exhibit 67). Comparing all GM dealers in West Palm Beach, the ratings range from 67 to 90. Stewart Pontiac is at67, six points below the nearest automobile dealer (GM Exhibit 59). Stewart Pontiac is the lowest rated dealer in West Palm Beach. Indeed, in terms of product evaluation, Cadillac is rated lower than Pontiac, yet the Cadillac dealers in West Palm Beach are able to perform at higher levels of satisfaction for their customers. CUSTOMER SERVICE PROVIDED BY STEWART PONTIAC Stewart Pontiac receives the same products as other Pontiac dealers. The Pontiac zone office has sent personnel over to Stewart Pontiac in order to assist the dealership in improving its CSI rating. About the same time as the protest was filed, Stewart Pontiac commenced improvement efforts (GM Exhibit 65). Stewart's CSI improvement program was necessitated by the absence of any such program at the dealership (Montgomery deposition, pages 15-17). The attitude of the dealer and desire of its management to improve CSI will have a greater impact on CSI performance than the mere spending of substantial sums as a means to correct a CSI problem. Clyde Montgomery, Pontiac's district manager, is familiar with the CSI for Stewart Pontiac. Montgomery has discussed the improvement programs with Stewart's dealership personnel and expects Stewart's CSI to increase. Montgomery noted that there were numerous attitude problems at the dealership which needed attention to include the following: Customer relations manager, recently hired and has little authority; Service manager is not consumer oriented; Earl D. Stewart does not appear to have a sufficient interest in the service department; The dealership has not properly implemented a number of programs suggested. To improve a CSI rating, the dealership must be attentive and a positive attitude must be sustained to earn the approval of its customers. IMPACT OF SERVICE ON PENETRATION Dealers with higher sales rates usually have lower CSI ratings. However, there are major exceptions to that rule. Three of the top ten dealers in the Jacksonville zone have high CSI ratings. Both parties agree that good service leads to customer retention and increased sales while poor service means lost sales. As Dr. Ostlund stated (IV-215, 216): There is no question that people are more likely to buy a car from their nearest Pontiac dealer, but that is not something that is axiomatic. They will buy a car from other dealers if there are reasons that prompted that condition, such as. they may buy from a dealer who is known to have a good service operation . . . Convenience of service is extremely important to a dealer after the warranty expires. (GM Exhibit 66, page 292) The proposed Art Moran dealership would provide prospective purchasers a high level of convenience and increased market penetration. Service convenience is an important factor in establishing a dealership. Convenience for service returns is at least if not more important to a customer than convenience for purchasing. If a dealer is too far, a consumer may not return to the dealer but have work done elsewhere. AGSSA III customers must drive longer distances for both sales and service than the average customer in the MDA.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Art Moran Palm Beach Pontiac-GMC Inc., application for a motor vehicle dealer license as a Pontiac dealer be GRANTED. RECOMMENDED this 5th day of September, 1986 in Tallahassee,, Florida. JAMES E. BRADWELL 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 5th day of September, 1986.
Findings Of Fact At all times material hereto Respondent Howard B. Berman has been a licensed real estate broker having been issued license number 0178090. At all times material hereto Respondent Michael J. Weil has been a licensed real estate broker having been issued license number 0179132. At all times material hereto Respondent Paramount Realty, Inc., has been a corporation licensed as a broker having been issued license number 0196048. Although Respondent Berman was a director of Respondent Paramount Realty, Inc. since at least March 7, 1979, he did not become an officer or stockholder in that corporate broker until December of 1982 or January of 1983. Although Respondent Weil was a director of Respondent Paramount Realty, Inc. since at least March 7, 1979, he did not become an officer or stockholder in that corporate broker until January of 1984. Prior to the time that Respondent Berman and Respondent Weil became officers and stockholders of Paramount Realty, Inc., they were not employed by Paramount but rather had an independent contractor relationship with that corporate broker. On or about June 13, 1979, Respondent Weil, acting as trustee for himself and for Respondent Berman, entered into a contract to purchase a certain parcel of land located in Broward County, Florida, with the intent of developing that land by building a condominium thereon. On or about October 18, 1979, Respondent Weil as trustee sold the above-referenced parcel of land to an investors group known as North Beach Development Group, Ltd., a Florida limited partnership, which the Respondents organized. The general partner in that limited partnership was North Beach Development Company, a Florida corporation, in which none of the Respondents had an interest. On or about October 18, 1979, Respondents Berman and Weil, as employees of North Beach, Inc., a Florida corporation, negotiated and obtained a consultation agreement between North Beach Development Group, Ltd. and North Beach, Inc. under which Respondents Berman and Weil would provide consultation services in connection with the development of a 34 unit condominium complex on the above-referenced parcel of land. On or about October 19, 1979, the general partner North Beach Development Company, and each of its stockholders, and each of the limited partners of North Beach Development Group Ltd. executed an Approval, Consent and Ratification agreement approving the above mentioned consultation agreement, establishing Respondent Paramount as the exclusive real estate agent for the condominium units, and approving the purchase by Respondents Berman and Weil of condominium units Nos. 604 and 607 for a combined total purchase price of $185,000. Prior to the creation of North Beach Development Group, Ltd., Respondents Berman and Weil placed $25,000 of their moneys on deposit under the contract to purchase the above-referenced land. During the existence of the limited partnership Respondents Berman and Weil loaned approximately $40,000 to the partnership. Respondents Berman and Weil also personally guaranteed the three million dollar construction loan involved in the project. Accordingly, both Respondents Berman and Weil had their personal funds at risk in the development of the condominium project. At no time did either Respondent Berman or Respondent Weil represent to Pat Dalton or any other investor or potential investor that either or both of them had invested or would invest any of their personal moneys in either the general partner North Beach Development Company or the partnership North Beach Development Group, Ltd. Five changes were made to Respondent Berman's unit 604, the total cost of all five changes being approximately $2,300. On May 19 and May 20, 1981, two checks were written off the account of North Beach Development Group, Ltd. to pay for the five changes to unit 604. On May 26, 1981, Respondent Berman (and his wife) closed on their purchase of unit 604. At the closing, Respondent Berman totally reimbursed North Beach Development Group, Ltd. the moneys it spent six days earlier for the five changes to unit 604.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is, RECOMMENDED that a Final order be entered finding Respondents Howard B. Berman, Michael J. Well and Paramount Realty, Inc., not guilty of the allegations in the Amended Administrative Complaint filed against them and dismissing that Amended Administrative Complaint with prejudice. DONE and RECOMMENDED this 25th day of January, 1985, in Tallahassee, Leon County, Florida. LINDA M. RIGOT, 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 25th day of January, 1985. COPIES FURNISHED: Harold Huff, Executive Director Division of Real Estate Post Office Box 1900 Orlando, Florida 32802 Fred Roche, Secretary Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Fred Langford, Esquire Department of Professional Regulation Post office Box 1900 Orlando, Florida 32802 Richard S. Rachlin, Esquire 1810 New World Tower 100 N. Biscayne Boulevard Miami, Florida 33132
Findings Of Fact Richard M. Moores is President of the Corporation, Daytona Sands, Inc. (SANDS, INC). He has never been a party to these proceedings. SANDS, INC.'s principal asset in 1981 was a forty unit motel which Moores ran on a day to day basis from an office located across the street. International Time-Share Consultants (ITSC) was, in 1981, a corporation in the business of developing and marketing vacation time-share resorts. Its principals were Donald Bentzoni, Kevin Curran, and Howard Shaw. The principals of ITSC are not parties to these proceedings. A real estate broker, Jimmy Townsend, introduced Moores to Bentzoni, Curran, and Shaw. The principals of ITSC negotiated with Moores for sale of its motel by SANDS, INC. and purchase thereof by ITSC, for conversion by ITSC into a vacation time-share resort. On May 8, 1981, SANDS, INC., represented by Moores, entered into an Agreement for Deed (Joint Exhibit 1). Briefly, this Agreement for Deed provided for a single sale of the SANDS, INC. (motel real property) by payment of a fixed price of $1,450,000.00 to SANDS, INC. (principal and President Richard M. Moores.) A complicated payment arrangement was devised and drafted by SANDS, INC.'s attorney with the primary purpose of imposing obligations on ITSC for the protection of SANDS, INC. and to insure at least the payment in a timely manner of the minimum amount negotiated. Twenty-five thousand dollars ($25,000) was to be paid on or before the signing of the Agreement For Deed; fifty thousand dollars ($50,000) was to be paid at the closing; an additional twenty-five thousand dollars ($25,000) was due on or before sixty (60) days from the closing date. [The initial $100,000 in payments] Thereafter, $950,000 of the remaining balance of the purchase price to bear interest at the rate of 6 percent per annum and to be payable as follows: $10,000 per month, the first such payment being due on the 90th day from and after the closing date and subsequent payments being due at thirty (30) day intervals thereafter until the $950,000 with interest is paid in full, subject to a thirty (30) day grace period, or (2) 25 percent of the gross amount of all cash received monthly . . . from purchasers as down payments at closing on the sale of time-share interests . . . to be developed by Buyer, plus all amounts received each month by the Buyer as developer of the time-sharing project as payments on promissory notes executed by purchasers [the third party installment contract paper] . . . the first such payment being due on the 90th day from and after the closing date, and subsequent payments being due at 30-day intervals thereafter until the $950,000 with interest is paid in full, subject to a 30-day grace period. (Joint Exhibit 1, Provision I). This translates that SANDS INC. was to be paid either $10,000 per month with the first payment due 90 days after closing or 25 percent of the combination of all cash down payments of third party purchasers and payments received on third party purchasers promissory notes, whichever of the two options was greater. The Agreement For Deed does not utilize the statutory term of art, "non-disturbance agreement" but also set out that after the initial one hundred thousand dollars ($100,000) payments were made, SANDS INC. would execute a "covenant not to interfere," as long as sales of time-share units were made out of time-share unit 205 (the old 208-209 motel units). (Joint Exhibit 1, Provision II.) Specifically, the parties agreed that: At date of closing (as per 1(B) above), Seller [Daytona Sands, Inc.] shall execute as to motel units 208 and 209 [the new converted unit 205] an "agreement to release upon sale and closing of sale" in a form mutually agreeable to the parties. Said above described "agreement" shall authorize Buyer to make all desired modifications and upgrading of said rooms in order to appropriately convert the model units as desired of the time-share project. The signing of such an agreement as to those motel units shall also authorize Buyer [ITSC] hereunder to begin marketing the time-share unit weeks as to that motel unit subject to the terms of this Agreement after conversion from a motel unit to a time-share unit. (Joint Exhibit 1, pp. 8-9 Provision IV) Under the Agreement For Deed, sales additionally could be made from units ether than unit 205 (the old 208-209 motel units). SANDS INC. would execute a covenant not to interfere as to those units, provided SANDS INC. first was paid $30,000 as a release price per motel unit and as long as the sales were made in a certain sequence. Specifically, Seller shall likewise sign such above described "agreement to release upon sale and closing of sales" as to additional motel units (above and beyond 208 and 209) upon payment of a release price of $30,000 per motel unit. The parties agree that the sequence of motel units to be subject to the said "agreement" being signed by Seller upon payment of the $30,000 for each unit shall be in the following order: 104, 105, 212, 114 and 115. The signing of such "agreement" as to additional motel units shall likewise authorize Buyer to convert the motel units as above or begin marketing time-share-unit weeks as to those units. Seller, subject to this above sequence, reserves the right to establish which additional motel units, the agreement to release shall relate to from time to time upon payment of the $30,000 per unit price. In interpreting this release clause, each $30,00 reduction in the principal balance due of $950,000 (under paragraph I (D) above) shall entitle Buyer hereunder to have an additional motel unit (of Seller's choosing) subject to the initial agreed upon sequence by the subject for the next "agreement" . . . (Joint Exhibit 1, p. 9 Provision IV). Succinctly, the parties SANDS, INC. and ITSC contemplated that upon payment of each $30,000 increment, a new set of 2 motel rooms would be released (in a certain order) to ITSC by SANDS INC. through an "agreement to release upon sale and closing of sales" for ITSC to convert/renovate and sell time- share units out of. Deposits of third party purchasers' money would be used to meet the minimum increments due SANDS INC. or 25 percent of their gross could be optionally used to pay off ITSC's monetary obligations to SANDS INC. sooner. The Agreement For Deed also permitted ITSC to sell out of non-released units, provided 100 percent of the sale receipts for those units were deposited in escrow: XVI - To clarify the intent of the parties, Buyer, after closing date, shall have a right to market in escrow the time-share estates or interests of rights to use1 whether or not the "agreement" called for in paragraph IV [which provides for the release of a unit in a scheduled sequence followed by the subsequent execution of a "covenant not to interfere"--the non-disturbance clause] above has been executed as to a motel unit. (Joint Exhibit 1, Paragraph XVI page 13). On the side, SANDS, INC. (Moores) was to continue to manage the motel as a motel for a management fee paid from the motel profits pending sequential conversion/renovation of the facility into approximately 20 time-share units from its original 40 motel units. Apparently, everyone involved understood that a "show" or "model unit" would first be sold and then other units would subsequently be converted and marketed sequentially using sales money from previous unit sales. The project was undercapitalized from the beginning. ITSC had insufficient cash flow to meet its obligations to SANDS, INC. and so ITSC assigned its rights and obligations under the Agreement for Deed (Joint Exhibit 1) to Daytona Sands Beach Club. Neither SANDS, INC. nor Richard Moores were a signatory to the Assignment (Joint Exhibit 2). Daytona Sands Beach Club (CLUB) is a corporation organized specifically to fund the time-share project. CLUB's original principals were Donald Bentzoni, Kevin Curran, Howard Shaw, Bill Smith, Gladys Carter, Phyllis Cooper, Dennis Taylor, Dennis Showalter, Walter Foster and Jimmy and Ricky Townsend. With the exception of Jimmy and Ricky Townsend who together purchased a single $10,000 share and Bill Smith who pledged some other real property, each club investor contributed $10,000 so that CLUB was able to make the initial payment to SANDS, INC. On June 24, 1981, SANDS, INC. and CLUB closed with payment to SANDS, INC. of the initial $100,000.000 payment. Some CLUB principals changed over a period of time due to buying and selling of shares but at no time was SANDS INC. or Richard Moores an investor in CLUB. Everyone involved testified that ITSC stayed on as the original marketers for the time-share project pursuant to a contract with CLUB, however there appears to be no witness who has ever seen a formal, written contract between the two entities. Any contract with regard to the sale of real property must be in writing, as must any contract with or between corporate entities, and this one was not. At best, it was, from all the circumstances, an oral de facto contract for personal services of the principals of the ITSC corporation, payable by commission. However, it is also clear from the testimony of Bill Smith that ITSC principals and employees signed on conditional installment sales notes and security agreements with third-party purchasers. Apparently, anyone in CLUB or ITSC signed these contracts. Richard Moores signed none. SANDS, INC. (Moores) continued to manage the motel units. Construction for conversion/renovation to time-share units/weeks by CLUB began June 25, 1981, overseen by Bill Smith for a promised 2 percent of the sales. This "promise" was apparently made by Donald Bentzoni but whether the promise was on behalf of ITSC or CLUB is uncertain. Sales of time-share units/weeks began July 1, 1981. On August 12 or 13, 1981, Richard Moores accompanied Bill Smith, representing CLUB, to open a Sun Bank account for deposit of purchase moneys and paper from third party purchasers (called "escrow account") and an operating account, (called "special" account) but there is no record evidence that Moores was a signatory on any accounts into which monies from installment checks were placed, nor did he sign checks for operating expenses by ITSC or CLUB. Signatories on the so-called "escrow" account were Bill Smith, Howard Shaw, and Walter Foster. Bill Smith was the only signatory on the "special" account. Thereafter, CLUB used the so-called "escrow" account as a collection account until the grace period in which a third party purchaser might cancel a contract had passed, then transferred money (by 2 of the 3 signatures) to the operating account and Bill Smith alone disbursed therefrom to ITSC and others. The bank sent a notice to CLUB after every payment made by a third party purchaser. ITSC forwarded some of these payments to the bank and certainly had access to these notices from the bank to CLUB at least until Donald Bentzoni was terminated in November, 1981. Moores for SANDS, INC. had no access to these notices from the bank. Instead, he received a bank statement which reflected total monies deposited, not the number of installment contracts the bank was holding. CLUB and ITSC provided Moores with copies of each installment sales contract, but no one reported the number of contracts put into the bank account and no one otherwise indicated to Moores the identity of contracts or monies put into the bank account. In the summer and early fall of 1981 Moores had no time-share experience and was actively engaged full-time in running the motel. Because of the initial volume of contracts, numerous cancellations, and sometimes sporadic delivery of the contract copies, Moores piled-up his contract copies as they were delivered and did not maintain a personal day-to-day tally of which weeks or which units were successfully sold and which sales were cancel led within the cancellation period. Delivery of the contract copies to Moores was usually done by Trudy Showalter, bookkeeper for ITSC up until September 1, 1981, or by Bill Smith, a principal and eventually President of CLUB. Delivery was usually daily to either Moores' office or the front desk outside his inner office, but sometimes less frequently. There is no record evidence that Moores ever had anything to do with preparing a public offering statement for the time-sharing project as contemplated by both the Agreement for Deed and Section 721.07, F.S. (1981). Nor is there anything in the record to show Moores ever handled the marketing, talked to prospective third party purchasers, or participated in closings with third party purchasers. His participation in the conversion/renovation appears to have been limited to getting cars moved and cleaning up debris, which activities are reasonably attributable to hi's continued management of the motel. Sales did not meet expectations and internal dissension occurred among the principals of ITSC. Dissent likewise occurred between principals of ITSC and principals of CLUB as early as September, 1981. Sales not meeting expectations, internal conflict among the principals of ITSC, and problems with operating cash flow resulted as early as August, 1981 in Bill Smith becoming involved on a day to day basis with running the time- share project on behalf of CLUB. In September, Bill Smith became President of CLUB. When sales began on July 1, 1981, Bentzoni, Curran, and Shaw, the ITSC principals acting as ITSC, the paid marketers on behalf of CLUB, made the initial decision to sell out of all 20 projected units and not just unit 205. Thereafter, when Moores expressed concern, Donald Bentzoni apparently convinced everyone at ITSC and CLUB that Moores had given him oral permission to sell out of all 20 or at least 10 units not paid for by CLUB and not yet formally released by SANDS INC. On the basis of the published portions of Bentzoni's deposition and Bill Smith's testimony, I find this meeting of Moores and Bentzoni never truly occurred. Not until some time in August, however, did Moores realize that sales out of units other than unit 205 were being made. The undersigned finds this to be so after considering the evidence as a whole. Moores, although a licensed Florida real estate agent, had no previous time-share experience; every principal of ITSC, as well as Bill Smith (with CLUB) and several other CLUB principals did. Bentzoni was running up expenses and rationalizing it due to criticism from ITSC and CLUB principals. Moores had not been involved in active real estate sales for more than a decade. The time-share concept was very new to Florida and the statutory law had not yet congealed. 2/ Moores was off- premises most of the time, and he depended largely on Jimmy Townsend and Bill Smith to keep him informed. Moores apparently made the connection that sales were being made out of sequence just before Trudy Showalter left the project on September 1, 1981 because he then asked her how he could check up to be sure sales would not occur out of order and she explained the use of the inventory board posted in ITSC's offices and her desk inventory sheets. However, as Bill Smith explained, the inventory board intentionally indicated more sales than had actually occurred and indicated sales out of units which had not been sold and which were not being sold out of as part of ITSC's calculated marketing technique to stampede potential third party purchasers into buying on the misrepresentation that "all units are nearly sold out," when few unit-weeks had in fact actually had been sold. The undersigned finds Moores could not be expected to rely on the inventory board. Originally, the CLUB investors were supposed to receive a half-percent per month of gross sales in return for their $10,000 investment but cash flow had dried up. Alternatively, each of the investors was given a week out of unit 205, the only released unit. A non-disturbance drawn by someone associated with CLUB was signed by Moores on September, 17 1981. (Petitioner's Exhibit 2) The actions of all concerned are inconsistent with a suggestion that Moores had agreed to allow sales out of other unreleased units for which he had not been paid or a suggestion Moores had agreed to give non-disturbances (or covenants not to interfere) contrary to the provisions of the Agreement for Deed. The initial regulation of time-sharing in Florida was by rules contained in Chapter 2-23, F.A.C., issued on an emergency basis in 1976 by the Florida Attorney General. None of the Respondents, however, was put on notice by the pleadings of any violation of the earlier rules, which, oddly enough, remained in effect until December 29, 1981. There was a lot of dissatisfaction among CLUB investors with Bentzoni starting in early September. Curran left the project in July or August 1981. Shaw subsequently resigned approximately August 20, 1981, critical of the marketing methods. Following an attempted ouster of Bentzoni at a CLUB shareholders meeting, Bill Smith persuaded Bentzoni to leave as marketer approximately November 10, 1981. However, in fact, sales were being made out of sequence. Moores had not been paid the release price per unit. By the end of the first three months of sales, neither CLUB nor ITSC had paid Moores the first $10,000 payment due September 24, 1981 under the Agreement For Deed. Moores objected to the sales out of these other units, but Moores, for SANDS INC., had no other leverage besides foreclosure, and foreclosure would have scuttled the entire project. Over Thanksgiving weekend, Richard Moores, Bill Smith and Jimmy Townsend took a trip by car and listened to a series of instructional tapes on time-sharing. Moores expressed a number of concerns which he had by way of conversation with other people about what was going on with CLUB's time-share project and ITSC's marketing of it. He thereafter spoke to a formal meeting of CLUB shareholders about these same hearsay concerns. He had heard CLUB and ITSC were employing non-licensed sales persons, failing to pay withholding taxes, failing to obtain the necessary withholding and social security numbers, and selling units out of sequence. Moores admits that at this meeting he told CLUB he wanted veto power over any future marketers they hired. There is no indication CLUB voted him this power or that he ever exercised such a veto. Moores checked the Agreement for Deed and realized at that point that Provision XVI provided for sales out of non- released units as long as the units were marketed in escrow. There is conflicting testimony in that Moores says Bill Smith told him he had no standing to object and Bill Smith says that Moores orally authorized continued sales out of 10 unreleased units instead of the total 20 claimed by Bentzoni, but the uncontradicted testimony of Moores and Bill Smith was that Bill Smith never told Moores that the monies were not being escrowed even though Bill Smith had a fair knowledge of time-sharing as far back as July 1981 and knew the statute required either that funds be escrowed or in the alternative that a non-disturbance instrument be issued. Even Bill Smith admits that he told Moores sales out of a lot of improper units had cancelled. During the time Bill Smith was president of CLUB, he knew that sales were being made without the requisite non-disturbance clauses being given. During the time he handled the sales on an interim basis, Bill Smith sold thirty (30) to forty (40) units but did not escrow monies; he did not give non-disturbance instruments; he did not request that Moores give non-disturbance instruments to third party purchasers. There was never a document of equal dignity entered into by SANDS INC. or Richard Moores which would vary the clauses of the Agreement for Deed concerning conditions precedent to be fulfilled by ITSC or its Assignee, CLUB, before non-disturbances would be granted by SANDS, INC. Bill Smith and perhaps some other unnamed persons participated in sales without being licensed to sell real estate in Florida. Some of these persons may have only been bookkeeping or clerical personnel. It is unclear whether they were employed by the principals of ITSC wearing their ITSC "hat" or their CLUB "hat" or by Bill Smith on behalf of CLUB. On December 15, 1981, Bill Smith wrote Richard Moores assuring him CLUB was in full compliance with all Florida Statutes including real estate sales. (Respondent Moore's Exhibit 2). Sometime in late 1981 or early 1982, CLUB entered into an agreement (which was back-dated to August 14, 1981, the date of the first sale to a third party purchaser which had not cancelled) with Smith & Smith through Steven K. Smith. (Joint Exhibits 3 and 4) Thereby, CLUB obtained additional cash financing in exchange for third party purchasers' time-share installment contracts, presumably worth a certain retail value of unit weeks. These were contracts from which the Agreement for Deed had contemplated proceeds going to SANDS, INC. unless escrowed in a separate third party purchaser escrow account. The proceeds from all sales from all unreleased units should have been escrowed by CLUB and had not been. CLUB retained some of the cash provided by Smith & Smith and used some of it to pay toward its indebtedness to SANDS INC. under the Agreement for Deed. Neither Moores nor SANDS, INC. were signatories to any agreement between CLUB and Smith & Smith or Stephen K. Smith. Based upon the testimony of Petitioner's expert accounting witness, Jerry C. Rhodes, no individual escrow accounts for third party purchasers were maintained; no single account or separate books were kept for these monies; no clear records of any income or disbursements from either CLUB's mislabelled "escrow" or "operating" account have been maintained. It is impossible to establish a completed audit trail of the monies taken in by ITSC or CLUB. The project failed and closed down on February 6, 1982, and third party purchasers did not get their accommodations. CLUB filed no request for formal hearing pursuant to Section 120.57(1), Florida Statutes, and entered nd appearance before the Division of Administrative Hearings. Indeed, by Order of May 20, 1983, Hearing Officer Pfeiffer denied a Motion to join CLUB in these proceedings. The majority of the money from the CLUB "escrow" account at Sun Bank went to Daytona Sands Marketing Group, but Daytona Sands Marketing Group filed no response to the Order to Show Cause, did not request a hearing pursuant to Section 120.57(1), Florida Statutes, and was not represented at formal hearing.
Recommendation Upon the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the Department of Business Regulation enter a Final Order which: Imposes civil penalties of $10,000 upon International Time-Share Consultants, Inc., a corporation, for the misrepresentation charge and $10,000 for the failure to escrow and account for all monies during its period of involvement charge. Determines all principals of International Time-Share, Inc., are not parties to these formal proceedings pursuant to Section 120.57(1), F.S. Dismisses all charges against Daytona Sands, Inc. a corporation, and determines Richard Moores individually is not a party to these proceedings. Determines Daytona Sands Beach Club is not a party to these formal proceedings pursuant to Section 120.57(1), F.S. Determines Daytona Sands Marketing Group is not a party to these formal proceedings pursuant to Section 120.57(1), F.S. DONE and ORDERED this 22nd day of February, 1985, in Tallahassee, Florida. ELLA JANE P. DAVIS 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 22nd day of February, 1985.
The Issue Whether or not the Petitioner, State of Florida, Department of Business Regulation, Division of Alcoholic Beverages and Tobacco, is entitled to relocate its employee, Perry Kirkland, from an assignment in Jacksonville, Florida, to an assignment in West Palm Beach, Florida.
Findings Of Fact Perry Kirkland, the Respondent, is employed as a beverage sergeant with the Petitioner, State of Florida, Department of Business Regulation, Division of Alcoholic Beverages and Tobacco. He has been employed with that division for sixteen years. Within that employment period, he has worked for one year in Orlando, two years in Miami, a period of time in Daytona Beach and then was assigned to Jacksonville, Florida, where he has remained as an employee with the exception of a period of time of 28 days beginning on September 19, 1977, when he was working for the same division in West Palm Beach, Florida. His service in the present type of classification began in 1968 when he was made an enforcement supervisor. His category was later changed to beverage sergeant in 1975. He is a permanent status employee. The underlying nature of the dispute between the Petitioner and Respondent concerns the Petitioner's effort to have the Respondent moved from Jacksonville, Florida, to West Palm Beach, Florida, on a permanent basis, as a condition of the Respondent's employment. The propriety or impropriety of such a requirement may be best understood by discussing the background facts which led to his proposed relocation. In the late fall or early winter of 1976, the Director of the Division of Alcoholic Beverages and Tobacco, Charles A. Nuzum, in conjunction with his subordinates, determined that it was necessary to transfer certain personnel from the Marianna office to the Panama City office. The purpose of such transfer was to promote more comprehensive enforcement in the Panama City area which was thought to be necessary, and had as its correlative purpose the removal of employees from the Marianna office, where the workload was not as substantial as that in Panama City. In essence, it has been decided that a full-fledged office would he opened in Panama City, in contrast to a sort of impromptu office that was in existence at the time. To make this change in personnel, it was necessary for the Director of the Division of Alcoholic Beverages and Tobacco to get the approval of the Department of Administration, Division of Budget. Mr. Nuzum and his chief of law enforcement met with representatives of the Department of Administration, Division of Budget, to include Elton Revell, a senior budget analyst. The purpose of this meeting was to present the request for changes in the Marianna and Panama City Offices. Revell advised the Division of Alcoholic Beverages and Tobacco that the Division of Budget could not go along with the "piecemeal" resolution of the problem of a disparity in the efforts of fulfilling the mission of the Division of Alcoholic Beverages and Tobacco. It was Revell's position that it would be necessary to consider the entire state in evaluating such realignment, before any approval could be granted. As an example of his position, Revell specifically mentioned that he thought that Live Oak and Jacksonville were offices that were overstaffed. At the insistence of the Division of Budget, and in keeping with his own analysis of the needs of the Division of Alcoholic Beverages and Tobacco, Mr. Nuzum undertook the task of analyzing the assignment status of the manpower of the division statewide, in an effort to achieve the mandate of his division's function more uniformly. The director had the benefit of certain weekly and monthly reports filed by the field agents in the categories of the division's overall mission. He also had the benefit of an overview of the conditions in the district offices, having made personal visits to the offices around the state. However, it was determined that a more specific study was necessary to get a true picture of the conditions in the district and sub-district offices for purposes of presenting the proposed realignment of personnel to the Department of Administration, Division of Budget. The principal task of doing the study was assigned to John Berry, an auditor with the Division of Alcoholic Beverages and Tobacco. Berry performed a workload study for a period in 1976, which was designed to determine the time that the agents within the district offices were spending in the primary agency functions, which are licensing and enforcement. The result of this study may he found in Petitioner's Exhibit No. 1, admitted into evidence. Berry in compiling his study, examined the various functions being performed in the Jacksonville District Office and the West Palm Peach District Office, which are Districts III and X respectively. It was determined, per his workload study, that although Jacksonville and West Palm Beach had a comparable number of licenses in their district, the number of manhours being spent in the performance of the licensing and enforcement functions of the division were significantly disproportionate. This is borne out by an examination of the Petitioner's Exhibit No. 1, which shows 2,067 licenses in Jacksonville and 2,015 licenses in West Palm Beach, for the various counties in the districts. Although this number is relatively close, manhours in the licensing function in Jacksonville was some 9,907 hours and the licensing manhours in West Palm Beach were 6,683. Likewise, the enforcement manhours in Jacksonville were 10,250, an even greater gap existed for enforcement in West Palm Beach in comparison to Jacksonville, in that the total manhours spent for that function in West Palm Beach was 3,355. These statistics were derived from an examination of the weekly and monthly reports from the personnel within the Jacksonville and Palm Beach offices. The statistics were also borne out by the testimony of the lieutenant in charge of the West Palm Beach office, who indicated that due to a shortage of manpower, the enforcement function in the West Palm Beach area was woefully inadequate. This discussion of the Jacksonville and West Palm Beach district offices leads to further consideration of the efforts made by the Division of Alcoholic Beverages and Tobacco to have their personnel realigned. After Director Nuzum had received the workload study, he had a further discussion of the authenticity of that study, with members of the staff, to include the district supervisors. His communication with the district supervisors had been by sending them a copy of the workload study to solicit their remarks. This study was forwarded to the district supervisors some time in March, 1977. After this discussion, the study was accepted. On June 7, 1977, the director forwarded the reorganization proposal to Mr. J. Jackson Walter, the Executive Director of the Department of Business Regulation, of which the Division of Alcoholic Beverages and Tobacco is a part. This reorganization proposal was forwarded in conjunction with a request made by Mr. Walter. Again, the contents of this proposal are found as Petitioner's Exhibit No. 1, which includes the workload study and a specific indication of how many persons would be reassigned to the various offices. It also includes a copy of the then present manning chart and a copy of the proposed manning chart after the changes. At that point in time, the exact persons who would be moved had not been determined. Moreover, the criteria for moving individuals from one location to another was still under discussion. Finally, it was determined that the basis for movement would be on the grounds of seniority, should there be two possible candidates for relocation and a decision become necessary for selecting one of those two persons. Sergeant Kirkland was in that category, because within the Jacksonville district there were two beverage sergeants and the other beverage sergeant was a more senior member of the division. Therefore, Kirkland was chosen to be relocated from Jacksonville to West Palm Beach. The purpose of this relocation was primarily to promote a more consistent enforcement pattern in terms of hours spent in that function statewide and between Jacksonville and West Palm Beach. A related reason was to allow some assistance to the lieutenant in charge of the West Palm Beach office, in terms of supervision of the field beverage officers of basic rank. A letter was forwarded to the district supervisors and district auditors from Mr. Nuzum, indicating that the realignment of personnel assignments would be on the basis of seniority. Petitioner's Exhibit No. 2 submitted into evidence is a copy of that notification. After determining that seniority would be the criterion for the relocation of personnel involved, the Division Director submitted his proposals through the Department of Business Regulation for transmittal to the Department of Administration for their approval. The Department of Administration approved the reorganization and J. Revell of the Department of Administration informed Floyd L. Dorn of the Department of Business Regulation's personnel office, that this approval had been granted. This approval came about in August, 1977. After receiving the notification of approval, Director Nuzum then began to advise the personnel who were affected by the reorganization in terms of any relocation. As stated before, Sergeant Kirkland was a person involved in the relocation question. Assistant Chief of Enforcement, Ken Ball, on the basis of the seniority standard, determined that Sergeant Kirkland should be transferred from Jacksonville to West Palm Beach. This was approved by Director Nuzum and this particular change was indicated on the reorganization position chart, which was Petitioner's Exhibit No. 3 submitted into evidence. His position number is 00092. The Respondent had filled the 00092 position while working in Jacksonville. His primary function was as supervisor of the enforcement section of the district, with the exception of the period of time in which he was acting in the dual capacity of enforcement supervisor and acting district supervisor. His duties during that latter period are described in Petitioner's Exhibit No. 4 admitted into evidence. This duty description was made by Sergeant Kirkland. When the present district supervisor, Captain Oganowski, took over the permanent job of district supervisor in Jacksonville, Sergeant Kirkland went back to filling the duties of enforcement supervisor. This function entailed the supervision of the enforcement division, as opposed to enforcement and licensing or licensing. Sergeant Kirkland continued to hold this position except for a short period of time in 1975 when he changed positions with the licensing supervisor. This is reflected in Respondent's Exhibit No. 5 admitted into evidence. Respondent's Exhibit No. 6 shows the reassignment of Kirkland back to the job 00092, (enforcement supervisor) in Jacksonville. During his tenure with the division, Sergeant Kirkland has maintained a high standard of performance in his various assignments. The current description of duties and responsibilities which the Respondent is expected to assume in the West Palm Beach office may be found as a part of Petitioner's Exhibit No. 4 admitted into evidence. This function includes the supervision of both enforcement and licensing personnel. When it was determined that Sergeant Kirkland would be sent to West Palm Beach, the Director of the Division of Alcoholic Beverages and Tobacco telephonically communicated the notice of this transfer. It was followed by a letter indicating the transfer, a copy of which is Respondent's Exhibit No. 1 admitted into evidence. The date of the written notification is August 25, 1977. The official report of personnel action setting the effective date of the relocation was dated September 15, 1977, and made the effective date September 19, 1977. A copy of this report of personnel action is Respondent's Exhibit No. 3 admitted into evidence. The type of action indicated on this form is original appointment, with the additional statement entered as "Continued." In fact, the relocation of Sergeant Kirkland is a reassignment within the meaning of Rule 22A-7.08, F.A.C. It is a reassignment because the appointment involved a move from one position in one class to a different position in the same class. The position move, is a move from the 00092 position in Jacksonville, which involves the supervision of enforcement personnel in Jacksonville, to the 00092 position in West Palm Beach, which involves the supervision of both enforcement and licensing personnel. Under the terms of Rule 22A-7.08, F.A.C., Kirkland may not appeal that reassignment. However, since it involves a geographic transfer of more than fifty miles the Respondent is entitled to appeal this decision to the Career Service Commission, in keeping with the authority of Rule 22A-7.09, F.A.C. The Respondent has challenged this relocation by his Career Service Appeal. That appeal has two principal contentions. The first contention concerns the assertion that the transfer does not fall within any of the types of enumerated appointments found in Rule 22A-7, F.A.C. As already shown, this position has been rejected, because the appointment has been determined to be a reassignment appointment. The second contention of the appeal is that any transfer from Jacksonville to West Palm Beach would cause irreparable financial harm and hardship on the Respondent and his wife. In connection with this assertion, Sergeant Kirkland produced evidence that the housing in the West Palm Beach area is more expensive than that in Jacksonville, and that, not withstanding the amount of equity which he might realize from the sale of his Jacksonville property, he still would incur approximately $15,000 additional cost for housing. This housing would not be comparable to his Jacksonville housing, due to the difference in the available amount of property and size of the home itself being smaller in West Palm Beach. The house that he is purchasing in Jacksonville is a four-bedroom, two-bath, two-carport home. The house being contemplated for purchase in West Palm Beach is a three-bedroom, two-bath home. Furthermore, the cost of the mortgage in Jacksonville is $165 and this cost would be exceeded in West Palm Beach even if the equity realized in the sale of Jacksonville home were put toward the down payment. It was also established that the restaurant cost in the West Palm Beach area is greater than that cost in Jacksonville. Sergeant Kirkland's wife testified that she is a hospital operating room nurse who has established a certain amount of seniority in her present employment. She is also only one year away from being able to retire with retirement benefits. If she is required to move, she would lose those benefits and also have to start at the bottom of the seniority list in any new employment in a hospital operating room in West Palm Beach. Finally, the Respondent demonstrated that to move from the Jacksonville community to West Palm Beach would cause him to lose church membership and other community activities in which he is involved. In spite of the degree of hardship which has been demonstrated by the Respondent in his presentation, a review of all the facts and circumstances would justify the Petitioner's action in its reassignment transfer of the Respondent. The action was not a punishment, it was a circumstance where the needs of the Petitioner in this instance, are more compelling than the hardship which will be caused Sergeant Kirkland and his family.
Recommendation It is recommended that the proposed reassignment appointment transfer of the Respondent from Jacksonville to West Palm Beach in the position 00092 he approved and that the appeal by the Respondent challenging this action by the Petitioner be denied. DONE and ENTERED this 30 day of December, 1977, in Tallahassee, Florida. CHARLES C. ADAMS, Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: Joseph M. Glickstein, Jr., Esquire 1205 Universal Marion Building Post Office Box 1086 Jacksonville, Florida 32201 Francis Bailey, Esquire Department of Business Regulation 725 South Bronough Street Tallahassee, Florida 32201 Dorothy Roberts Appeals Coordinator Division of Personnel and Retirement 530 Carlton Building Tallahassee, Florida 32304
