The Issue The issue is whether Petitioners are entitled to a proposed motor vehicle dealership in Seminole County, Florida.
Findings Of Fact DOAH provided the parties with adequate notice of the final hearing. On December 3, 2008, DOAH mailed a Notice of Hearing to each of the parties, scheduling the final hearing for April 8, 2009. No Notice was returned as undelivered. No party objected to a final hearing on April 8, 2009. On December 3, 2008, DOAH also issued an Order of Pre- hearing Instructions that, in relevant part, required the parties to file a pre-hearing stipulation, which was to include a list of witnesses and exhibits to be called and submitted at the final hearing. No party complied with the Order. The documents forwarded to DOAH by the Department support the findings. The Notice of Publication for a New Point Franchise Motor Vehicle Dealer in a County of More than 300,000 Population was published in the Florida Administrative Weekly, Volume 34, Number 43, on October 24, 2008. On behalf of Respondent, Mr. James Sursely timely filed a protest letter dated November 7, 2008, with Ms. Nalini Vinayak, the administrator at the Department responsible for receiving such protests. The remaining facts are undisputed in this proceeding. The proposed new point franchise motor vehicle dealer is for a line-make identified in the record as Chongqing Lifan Industry Group Co. Ltd. (CHOL) motorcycles. The proposed location is in Seminole County, Florida. Seminole County has a population in excess of 300,000. The proposed new point franchise motor vehicle dealer is located at 3311 West Lake Mary Boulevard, Lake Mary, Florida. Respondent owns and operates an existing CHOL dealership that is located at 306 West Main Street, Apopka, Orange, County, Florida 32712. The proposed dealership is within a 12.5-mile radius of Respondent's dealership. Respondent has standing to protest the establishment of the proposed dealership. The petitioners submitted no evidence that Respondent is "not providing adequate representation" of the same line-make motor vehicles in the community or territory.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department enter a final order denying the establishment of the proposed franchise dealership. DONE AND ENTERED this 23rd day of April, 2009, in Tallahassee, Leon County, Florida. S DANIEL MANRY 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 23rd day of April, 2009.
The Issue Whether the Petitioners' proposed dealership should be approved.
Findings Of Fact On October 17, 2008, in the Florida Administrative Weekly, Volume 34, Number 42, a Notice of Publication for a New Point Franchise Motor Vehicle Dealer in a County of More than 300,000 Population was published. The notice provided that Snyder Computer Systems, Inc., d/b/a Wildfire Motors intended to allow the establishment of Beach Cycle of Fort Lauderdale, Inc., as a dealership for the sale of motorcycles manufactured by Zhejiang Summit Huawin Motorcycle Co. Ltd. (POPC) at Ravens Wood Road, Fort Lauderdale (Broward County), Florida 33312, on or after November 5, 2008. On November 12, 2008, the Respondent timely filed a protest of the establishment of the Petitioners' dealership. Respondent alleged that it currently services customers for the line-make proposed by the Petitioners and that its location is within 12.5 miles of the location proposed by the Petitioners. The evidence presented established that the Respondent's dealership is within 8.5 miles of the proposed site. Mr. McMahon verified the driving distance and presented the measured distance as computed by the website Mapquest. Further, the driving time between the two points is less than 30 minutes. The Respondent has served the area for not less than 2 years and has successfully promoted the vehicles proposed to be sold by the line-make proposed by the Petitioners. The Respondent established that its sales are within 12.5 miles of the proposed dealership. The Respondent established that it currently markets the motorcycle to be sold by the proposed dealership. More specifically, the Respondent offered testimony that it has an agreement for the same line-make vehicle to be sold by the proposed dealer. Notice of the formal hearing was provided to all parties of record at their addresses of record.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Florida Department of Highway Safety and Motor Vehicles enter a Final Order denying the approval of the Petitioners' proposed dealership. DONE AND ENTERED this 18th day of February, 2009, in Tallahassee, Leon County, Florida. J. D. PARRISH 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 18th day of February 2009. COPIES FURNISHED: Electra Theodorides-Bustle Executive Director Department of Highway Safety and Motor Vehicles Neil Kirkman Building 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 Paul J. Lane, Esquire 2755 East Oakland Park Boulevard, Suite 300 Fort Lauderdale, Florida 33306 Joel Ribler Beach Cycle of Fort Lauderdale, Inc. 2190 Southwest 31st Avenue Fort Lauderdale, Florida 33312 Michael James Alderman, Esquire Department of Highway Safety and Motor Vehicles Neil Kirkman Building, Room A-432 2900 Apalachee Parkway Tallahassee, Florida 32344 Ronald Gardner Snyder Computer Systems, Inc., d/b/a Wildfire Motors 11 Technology Way Steubenville, Ohio 43952
The Issue Whether Respondent, Maserati North America, Inc.’s ("MNA"), proposed 2017 Commercial Policy Program ("2017 Program") is a modification of the franchise agreement between MNA and Petitioner, New Country Motor Cars of Palm Beach, LLC, d/b/a Maserati of Palm Beach ("Palm Beach"), or Petitioner Recovery Racing, LLC, d/b/a Maserati of Ft. Lauderdale ("Fort Lauderdale"); and, if so, whether it is fair and not prohibited by section 320.641(3), Florida Statutes (2016). Whether MNA’s proposed modifications to the Existing Franchise Agreements with Petitioners are fair and not prohibited under section 320.641(3).
Findings Of Fact Based on the evidence presented, the Pre-hearing Stipulation of the parties and the record as a whole, the following relevant and material Findings of Fact are made2/:
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that: A final order be entered by the Department of Highway Safety and Motor Vehicles: (1) DISMISSING Petitioners’ claims regarding MNA’s 2017 Commercial Policy Bonus Program; and (2) GRANTING, IN PART, AND DENYING, IN PART, Petitioners’ claims regarding modifications in the Proposed New Agreement, as set forth above. DONE AND ENTERED this 23rd day of January, 2018, in Tallahassee, Leon County, Florida. S ROBERT L. KILBRIDE 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 23rd day of January, 2018.
The Issue The issue is whether Petitioners are entitled to a motor vehicle dealership that is proposed to be located in Gainesville, Florida.
Findings Of Fact Respondent is an existing franchised dealer of motorcycles manufactured by Shanghai Shenke Motorcycle Co. Ltd. (SHEN). Petitioners have proposed the establishment of a new dealership to sell the same line and make of motorcycles as those sold by Respondent. Respondent's dealership is located at 118 Northwest 14th Avenue, Gainesville, Florida 32601. Petitioners' proposed dealership would be located at 1024 South Main Street, Gainesville, Florida 32601. The proposed dealership is within a 20-mile radius of Respondent's dealership. Respondent has standing to protest the establishment of the proposed dealership.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED: That the Department of Highway Safety and Motor Vehicles enter a final order denying the establishment of Petitioners' proposed franchise. DONE AND ENTERED this 24th day of December, 2009, in Tallahassee, Leon County, Florida. S LAWRENCE P. STEVENSON 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 24th day of December, 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 Martin Solano Solano Cycle, Inc. 1024 South Main Street, Suite A Gainesville, Florida 32601 Leo Su Galaxy Powersports, LLC, d/b/a JCL International, LLC 2667 Northhaven Road Dallas, Texas 75229 Collin Austin Austin Global Enterprise, LLC 118 Northwest 14th Avenue, Suite D Gainesville, Florida 32601 Julie L. Jones, Executive Director Department of Highway Safety and Motor Vehicles Neil Kirkman Building 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
Findings Of Fact Burruss is a licensed and franchised American Motors dealer. Burruss has been the sole AMC dealer in the Tarpon-West Pasco County area since 1960. Burruss is in compliance with its franchise agreement with American Motors Sales Corporation. Both Burruss and New Port are located on U.S. Highway 19, a distance of six miles from each other. U.S. Highway 19 is the only major north-south thoroughfare in the Tarpon-West Pasco area. Portions of U.S. Highway 19 have been improved in the past years so that much of the highway is six-laned in the Tarpon-West Pasco area; the unimproved portions of the highway are four-laned. The recent improvements to U.S. Highway 19 in the Tarpon-West Pasco area have improved the traffic flow along U.S. Highway 19. (Findings 1 through 6 are contained in the Prehearing Stipulation.) Burruss is located in Tarpon Springs, which is in the northernmost part of Pinellas County. New Port is located in New Port Richey, which is in Pasco County. There is presently no AMC dealer in Pasco County. The closest AMC dealer to the north of Burruss his in Brooksville, some 35 miles to the north. The AMC dealers in the area are in Tampa, some 27 miles south of New Port Richey; in Clearwater, some 25 miles south of New Port Richey; and Burruss in Tarpon Springs, some six miles south of the proposed location. New Port has been a franchised Lincoln Mercury automobile dealer for three and a half years and is fully qualified to operate the proposed franchise. New Port has agreed to build a 1600 square foot showroom, to have mechanics factory-trained, and to spend in excess of $41,000 in advertising the AMC products during its first year of operation. It has also agreed to maintain a 60-day supply of automobiles in stock. Pasco County has been one of the fastest growing Florida counties in the past ten years, with most of this growth in the western part of the county near U.S. 19. In 1970 Pasco County had a population of 76,000, which increased to 193,643 in 1980 (Exhibit NP-1). In 1981 a study was conducted in the Pasco County area to determine if there was an open point in this area. A copy of this report was submitted as Exhibit NP-2. From this study AMC determined that the area previously serviced by Burruss should be divided into two areas with the southern area comprising the areas containing the zip codes of Tarpon Springs, Crystal Beach, Holiday, Ozone, and Palm Harbor. This is designated the new Tarpon Springs area. All of these communities are in Pinellas County except Holiday, which is in Pasco County. The northern area, which comprises west Pasco County and is the area in which it is contended that AMC is inadequately represented, includes the zip codes for New Port Richey, Aripeka, Elfers, Odessa, and Port Richey. After obtaining the results of this study, American Motors Sales Corporation solicited dealers in this area to apply for an AMC franchise. Burruss became an AMC dealer in 1960, a Jeep dealer in 1970, and a Renault dealer in 1979. Burruss also sells Datsun vehicles, the sale of which runs 25 to 30 percent, by number of units, above its sales of the AMC-Jeep- Renault line, despite the fact that a competing Datsun dealer is located in Pasco County approximately three miles north of Burruss on U.S. 19. During the past ten years ten major shopping malls or plazas have been built in the New Port Richey-West Pasco area, the number of banks or savings and loan institutions have grown from ten to more than 65, and six new car dealerships have been established, to bring the total to nine. Burruss' sales of AMC vehicles reached a peak of 200 per year in 1975 and have steadily declined since that time. Cross-sales figures show that from 45 percent to 75 percent of the AMC-Jeep-Renault vehicles sold in the New Port Richey area are sold by dealers other than Burruss. Of the three AMC dealers in Pinellas County, Burruss has consistently sold the fewest vehicles. Since the population has been greater in the service area of the other two AMC dealers in Pinellas County, this lower rate would be expected. However, Burruss sales have not kept pace with the population growth in the New Port Richey-West Pasco area. In 1977 AMC automobiles accounted for 1.8 percent of domestic new car sales in this Central Florida district, 2.6 percent of the sales in the Tarpon Springs area, and 1.7 percent of the sales in the New Port Richey area. In 1982 AMC automobiles accounted for 1.4 percent of the district sales, 1.0 percent of the Tarpon Springs area sales, and 0.9 percent of the New Port Richey area sales. In 1977 Jeep automobiles accounted for 14.1 percent of the four-wheel drive vehicle sales in the Central Florida district, 13.5 percent of the sales in the Tarpon Springs area, and 13.8 percent of the sales in the New Port Richey area. In 1982, Renault vehicles accounted for 1.4 percent of the district sales, 1.0 percent of the Tarpon Springs area sales, and 0.5 percent of the New Port Richey area sales. Thus, while AMC penetration in the Tarpon Springs area is comparable to district penetration (although Tarpon Springs penetration seems to be declining), the penetration in the New Port Richey area is well below the district average. Not only has Burruss spent less on advertising than other dealers, but also it has not maintained a 60-day supply of vehicles based on "planning potential." (A minimum estimated number of sales a dealer should make in a year.) Based on the planning potential for the combined Tarpon Springs and New Port Richey areas, Burruss should stock 14 AMC, 10 Jeep, and 36 Renault vehicles. As of January 31, 1982, Burruss had in stock 8 AMC, 3 Jeep and 17 Renault vehicles. AMC consistently allots Burruss more vehicles than it purchases. AMC has received more complaints directly from customers in the West Pasco service area about the products they purchased, but not necessarily from Burruss, than from other service areas in the same district. This is indicative that insufficient attention is paid to providing warranty services in the area by the franchised dealer. That a separate market area in Pasco County exists and has been recognized by several other automobile manufacturers was admitted by Herman Burruss, the principal stockholder of Burruss Motor Company, who was the chief operations officer for Burruss for some 45 years until approximately five years ago when he turned the job over to his son and retreated into semi retirement.
Findings Of Fact DOAH provided the parties with adequate notice of the final hearing. On December 11, 2008, DOAH mailed a Notice of Hearing to each of the parties, scheduling the final hearing for April 6, 2009. No Notice was returned as undelivered. No party objected to a final hearing on April 6, 2009. On December 11, 2008, DOAH also issued an Order of Pre- hearing Instructions that, in relevant part, required the parties to file a pre-hearing stipulation which was to include a list of witnesses and exhibits to be called and submitted at the final hearing. No party complied with the Order. The documents forwarded to DOAH by the Department support the findings. The Notice of Publication for a New Point Franchise Motor Vehicle Dealer in a County of More than 300,000 Population was published in the Florida Administrative Weekly, Volume 34, Number 43, on October 24, 2008. On behalf of Respondent, Mr. James Sursely timely filed a protest letter dated November 7, 2008, with Ms. Nalini Vinayak, the administrator at the Department responsible for receiving such protests. The remaining facts are undisputed in this proceeding. The proposed new point franchise motor vehicle dealer is for a line-make identified in the record as Chunfeng Holding Group Co. Ltd. (CFHG) motorcycles. The proposed location is in Seminole County, Florida. Seminole County has a population in excess of 300,000. The proposed new point franchise motor vehicle dealer is located at 3311 West Lake Mary Boulevard, Lake Mary, Florida. Respondent owns and operates an existing CFHG dealership that is located at 306 West Main Street, Apopka, Orange, County, Florida, 32712. The proposed dealership is within a 12.5-mile radius of Respondent's dealership. Respondent has standing to protest the establishment of the proposed dealership. The petitioners submitted no evidence that Respondent is "not providing adequate representation" of the same line-make motor vehicles in the community or territory.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department enter a final order denying the establishment of the proposed franchise dealership. DONE AND ENTERED this 21st day of April, 2009, in Tallahassee, Leon County, Florida. S DANIEL MANRY 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 21st day of April, 2009.
The Issue Whether the application to relocate the Honda dealership owned by Bengal Motor Company, Ltd., d/b/a Miami Honda should be granted.
Findings Of Fact Bengal Motor Company, Ltd., d/b/a Miami Honda (Miami Honda) submitted its application to relocate its Honda dealership pursuant to Section 320.642, Florida Statutes. The requested relocation is from 3100 Northwest 36th Avenue, Miami, Florida, to a location that is 1350 feet west of the corner of Northwest 57th Avenue and Northwest 167th Street, Miami Lakes, Florida. The existing location is in the vicinity of the Miami International Airport. The proposed location is on the Palmetto Expressway. Miami Honda purchased the real estate for the proposed location without assistance from American Honda and has entered into an agreement with American Honda to relocate to that location if its relocation application is granted. Hollywood Imports, Ltd., Inc., d/b/a Hollywood Honda (Hollywood Honda) timely protested the relocation with the Department of Highway Safety and Motor Vehicles pursuant to the provisions of Section 320.642, Florida Statutes. The parties agree that the relocation is subject to protest and that Hollywood Honda has standing to bring this protest as it is within 12.5 straight line miles of the proposed location. See, Section 320.642(3)(b)1., Florida Statutes. American Honda has decided to relocate Miami Honda to the Miami Lakes area instead of adding a new dealer in Miami Lakes. Section 320.642, Florida Statutes, sets forth the criteria for relocation if a protest is filed. Section 320.642(2)(a), Florida Statutes, provides as follows: (2)(a) An application for a motor vehicle dealer license in any community or territory shall be denied when: A timely protest is filed by a presently franchised motor vehicle dealer with standing to protest as defined by subsection (3); and The licensee fails to show that the existing franchised dealer or dealers who reg- ister new motor vehicle retail sales or retail leases of the same line-make in the community or territory of the proposed dealership are not providing adequate representation of such line-make motor vehicles in such community or territory. The burden of proof in establish- ing inadequate representation shall be on the licensee. Section 320.642(2)(b), Florida Statutes, sets forth factors 1/ which may be considered in determining the adequate representation issue, as follows: (2)(b) In determining whether the existing franchised motor vehicle dealer or dealers are providing adequate representation in the comm- unity or territory for the line-make, the de- partment may consider evidence which may in- clude, but is not limited to: The impact of the establishment of the proposed or relocated dealer on the consumers, public interest, existing dealers, and the licensee; provided, however, that financial impact may only be considered with respect to the protesting dealer or dealers. The size and permanency of investment reasonably made and reasonable obligations incurred by the existing dealer or dealers to perform their obligations under the dealer agreement. The reasonably expected market penetra- tion of the line-make motor vehicle for the community or territory involved, after con- sideration of all factors which may affect said penetration, including, but not limited to, demographic factors such as age, income, education, size class preference, product popularity, retail lease transactions, or other factors affecting sales to consumers of the community or territory. Any actions of the licensee in denying its existing dealer or dealers of the same line-make the opportunity for reasonable growth, market expansion, or relocation, in- cluding the availability of line-make vehicles in keeping with the reasonable expectations of the licensee in providing an adequate number of dealers in the community or territory. Any attempts by the licensee to coerce the existing dealer or dealers into consenting to additional or relocated franchises of the same line-make in the community or territory. Distance, travel time, traffic patterns, and accessibility between the existing dealer or dealers of the same line-make and the loca- tion of the proposed additional or relocated dealer. Whether benefits to consumers will likely occur from the establishment or relo- cation of the dealership which the protesting dealer or dealers prove cannot be obtained by other geographic or demographic changes or expected changes in the community or territory. Whether the protesting dealer or dealers are in substantial compliance with their dealer agreement. Whether there is adequate interbrand and intrabrand competition with respect to said line-make in the community or territory and adequately convenient consumer care for the motor vehicles of the line-make including the adequacy of sales and service facilities. Whether the establishment or relocation of the proposed dealership appears to be warr- anted and justified based on economic and mark- eting conditions pertinent to dealers compet- ing in the community or territory, including anticipated future changes. The volume of registrations and service business transacted by the existing dealer or dealers of the same line-make in the relevant community or territory of the proposed dealership. THE COMMUNITY OR TERRITORY The area that constitutes the "community or territory" (community/territory) as that term is used in Section 320.642, Florida Statutes, is all of Dade and Broward Counties. This area is somewhat unique from a marketing standpoint because it is restricted on the West by the Everglades and on the East by the Atlantic Ocean. These geographic barriers create a concentration of population in a North/South corridor. This area will be referred to as the "Miami Metro", the term used by American Honda. There are presently nine Honda dealers in the Miami Metro. There are five Honda dealers in Dade County and four Honda dealers in Broward County. In comparison, there are five Toyota dealers in Dade County and five Toyota dealers in Broward County. An additional "open point", where a Honda dealer will be added at some undetermined time, has been identified for Plantation, Florida, which is in Broward County. This area has a significant amount of shortfall of Honda sales (compared to sales in other areas of the market area) that indicates that a new dealership would be justified. The relocation to Miami Lakes is not designed to recapture the lost opportunity that presently exists in Broward County. That lost opportunity is a separate problem. Honda considers Toyota and Nissan to be its primary competitors. Honda attempts to have a Honda dealer facing each Toyota dealer. Toyota outsells Honda at a greater percentage in Broward County than it does in Dade County. This discrepancy can be explained, in part, by the fact that Broward County is the home of Southeast Toyota, which is the distributor of Toyotas in the Southeastern United States, and by the fact that until the open point that American Honda has identified for Plantation is filled, Honda has one less dealer in Broward than does Toyota. Although American Honda has identified an open point in Plantation, Florida, and has included that open point in its marketing planning the additional dealership for Plantation is not being pursued by American Honda at this time. It is likely that the addition of a dealership would be subject to protest by existing dealers. It is not likely that a new dealership will exist in Plantation in the next five years. Expert witnesses for both Miami Honda and Hollywood Honda agree that Largo Honda, located in Key Largo, Monroe County, Florida, should be excluded from the Miami Metro. 2/ Data collected from new car registrations 3/ includes the name of the dealer selling the new vehicle and the street address of the purchaser. Retail registration data is analyzed to provide information as to each dealer's market area. The information produced by this analysis, referred to as cross- sale data, is used to determine whether the Miami Metro is one homogeneous, interconnected market or whether it consists of separate identifiable markets. In performing this analysis, each of the existing eight dealers and the proposed location is assigned a primary marketing area, referred to as a PMA. A PMA consists of census tracts 4/ within the Miami Metro and represents the geographical area in which an existing dealer or a proposed dealer would reasonably be expected to have a competitive advantage over competing same-line (Honda) dealers by virtue of its proximity to the customers within the PMA. The PMAs developed by the experts in this proceeding were based upon the exact proposed location of Miami Honda, rather than the existing location or any other hypothetical location. This methodology was reasonable and appropriate. The cross-sale data reflecting shopping patterns of Honda buyers in the Miami Metro demonstrates that customers residing in Dade County primarily purchase from Dade County dealers and that customers residing in Broward County primarily purchase from Broward County dealers. The exception to this is Hollywood Honda, which sells extensively to customers throughout the Miami Metro, including customers in Dade County. REASONABLY EXPECTED MARKET PENETRATION Market penetration is the traditional standard used to measure the performance of a dealer network in a given geographical area, such as a community/territory or a PMA. Market penetration is the percentage of all vehicles registered in a particular area that a particular brand achieves. Market penetration for any area is computed by analyzing all brand-line registrations in the area, without regard to the location of the selling dealer. To determine whether a particular PMA is being adequately represented, it is first necessary to select a standard against which the PMA will be measured. There was a dispute between the expert witnesses in this proceeding as to the appropriate standard against which to measure the PMA for the proposed relocation. The expert for Hollywood Honda used Honda's market penetration for Honda's Southeast Zone, consisting of six states, to determine what should be Honda's reasonably expected market penetration in the Miami Metro. The rationale that supports the use of this standard is not persuasive because of the unique nature of the Miami Metro and because there are many areas in the Southeast Zone within which Honda is not being adequately represented. The use of Dr. Matthews' standard will produce a mediocre target that does not accurately represent Honda's market potential in this unique area. Honda's expert analyzed sales within what he termed the "Balance of Dade" to determine Honda's reasonably expected market penetration in the Miami Metro. The Balance of Dade standard analyzed Honda's market penetration in Dade County with the exception of the PMA identified for the proposed relocation. The PMA for the proposed relocation was excluded from the analysis because it would be inappropriate to compare the area in question to itself. The Broward County portion of the Miami Metro was excluded because it was determined that American Honda is not adequately represented in many areas of Broward County. To develop a reasonable standard, the areas of comparison must be areas in which American Honda is adequately represented by its dealer network. There was extensive testimony by American Honda's expert as to the reasons this standard was used. Mr. Anderson, American Honda's expert, opined that the Balance of Dade standard produced a reasonable and appropriate standard by which to measure Honda's reasonable expected market penetration in this local market area. There was also extensive testimony by Hollywood Honda's expert as to why this standard should not be used. Dr. Matthews, Hollywood Honda's expert, believed that the use of the Balance of Dade standard produced an inappropriately high expectation of what should be Honda's reasonably expected market penetration. Dr. Matthews viewed sales in Dade County to be unreasonably high because of the sales into the market areas by Largo Honda and because of the number of new Honda vehicles sold into Dade County by Honda dealers in Broward County. This conflicting testimony is resolved by finding that the standard selected by American Honda's expert for determining reasonably expected marketing penetration, the so-called Balance of Dade standard, is a reasonable and appropriate standard to determine Honda's reasonably expected market penetration in this local market. By measuring and analyzing each car segment in which American Honda competes in the Balance of Dade, American Honda's expert determined that with a dealer operating at the site of the proposed relocation, its reasonably expected market penetration for the Miami Lakes PMA would be 20 percent of the retail segments in which Honda competes. 5/ ACTUAL PERFORMANCE COMPARED WITH EXPECTED PERFORMANCE Honda market penetration in the Miami Lakes PMA has consistently been below expected levels in 1992, 1993, 1994, and the first half of 1995. Comparing actual penetration with the reasonably expected penetration of 20 percent demonstrates that Honda market penetration in the Miami Lakes PMA has been between 87.2 percent and 90.1 percent effective. The additional new car sales that would have been required to bring the Miami PMA up to its reasonably expected market penetration level were 263 units in 1993, 149 in 1994, and 168 for the first half of 1995. American Honda established that it is not receiving adequate representation in the Miami Lakes PMA. ECONOMIC AND MARKETING CONDITIONS Since 1980, there has been a significant decline in the number of households in the area of Dade County near the airport where Miami Honda is presently located, and a significant increase in the number of households in the Miami Lakes area. Miami Lakes represents a densely populated area which presently has no Honda dealer to serve it. All other densely populated areas of the Miami Metro, with the exception of the Plantation area, have an existing Honda dealer. Demographic factors, such as household income, reflect that the Miami Lakes area is much more affluent than the area surrounding the present Miami Honda location. Current and projected demographic data indicate that Honda's inadequate representation in the Miami Lakes PMA is the result of substantial and continuing growth. The growth pattern in the Miami Lakes area is also typical of the growth pattern for the Hollywood Honda PMA. These growth patterns are expected to continue through the year 2000 so that the opportunities for car sales for Hollywood Honda as well as a dealer in Miami Lakes would be expected to increase as this growth continues. Miami Honda's current facility is located in an industrial area that is blocked on the west from further development by the airport. In the vicinity, there are trailer parks and other low income housing, a cemetery, and a truck depot. Also in the area is a highly industrialized area of the Miami River, where cargo vessels are anchored, and the former headquarters of Eastern Airlines and Pan American Airlines, both of which are empty or partially empty. The present location is not as well suited as the Miami Lakes area for the sale of new automobiles. There are Nissan, Mitsubishi, and Hyundai dealerships in the area where Miami Honda is currently located. These lines are also represented in the Miami Lakes area. Miami Honda is one of the top Honda dealers in the Miami Metro and usually one of the top twenty dealers in the United States. Miami Honda is profitable at its current location, having made a profit of $2.9 million in 1994. The existing sales and service facilities of Miami Honda meet Honda's established guide for minimum facilities requirements. However, these existing facilities are outdated and inefficient. These facilities need to be replaced for Miami Honda to remain competitive. The existing location does not justify the construction of a new facility. It takes approximately 28 minutes to drive from the current Miami Honda location to the Hollywood Honda location. It takes approximately 22 minutes to drive from the proposed Miami Honda location to the Hollywood Honda location. Miami Honda's proposed location is part of an auto row, with the other lines being Toyota, Lincoln/Mercury, Ford, Nissan, Pontiac, GMC, Mitsubishi, Chevrolet, Chrysler Plymouth, Jeep Eagle, and Hyundai. This auto row did not exist ten years ago. Hollywood Honda is located on a similar auto row, with virtually the same lines being represented. Without a representative on the Miami Lakes auto row, American Honda is at a competitive disadvantage in the Miami Lakes area to those competing lines with dealers on the Miami Lakes auto row. The present location of Miami Honda is too close to that of Brickell Honda. The population and household trends of the PMA occupied by Brickell Honda and the PMA presently occupied by Miami Honda shows declining sales opportunity for the two dealers and suggests the need for a relocation of one of the two dealers. Honda has established that it is currently under-represented in the Miami Lakes PMA and that the likely cause of the current under-representation is the absence of a Honda dealer in this PMA. Relocating the Miami Honda dealership to Miami Lakes would strengthen the Brickell Honda dealership and the Miami Honda dealership. The relocation would also be in the best interests of the consuming public because it would bring a Honda dealer into the Miami Lakes area. Honda's chances of achieving a reasonable, adequate level of representations are dependent on how well its dealer network keeps pace with expanding sales opportunities. The proposed relocation would maximize customer convenience in the Miami Metro because the distance the purchasers of new cars would have to drive to reach the nearest Honda dealership would be minimized. It is reasonable to expect that Hollywood Honda would lose sales in the Miami Lakes PMA if the relocation is approved because approximately 34 percent of the sales in the Miami Lakes PMA are presently made by Hollywood Honda. It is also reasonable to expect that these lost sales can be offset by Hollywood Honda concentrating on its marketing opportunities closer to its location. The expected marketing penetration in the market within two miles of the Hollywood Honda dealership is 19.3 percent while the actual penetration is 8.6 percent. While Hollywood Honda is one of American Honda's top dealerships, it is missing opportunity for sales in its immediate marketing area. It is reasonable to expect that the proposed relocation will provoke a competitive response by Hollywood Honda that would positively impact Hollywood Honda's sales. Without a competitive response by Hollywood Honda, it is likely that the relocation of Miami Honda would result in the loss of approximately 250 sales a year for Hollywood Honda, for an approximate monetary loss of $500,000. The decision of American Honda to relocate Miami Honda instead of adding a dealer in Miami Lakes provides the existing dealers, including Hollywood Honda, with the opportunity to take advantage of the growing market within the Miami Metro and the lost opportunity for sales that exist, especially in Broward County. Even when the impacts of the proposed relocation would have on Hollywood Honda are considered, it is concluded that approving the proposed relocation of Miami Honda would strengthen the American Honda dealer network in the Miami Metro and would serve the interests of the consuming public.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Highway Safety and Motor Vehicles enter a final order that adopts the findings of fact and conclusions of law contained herein. It is further recommended that the final order approve Miami Honda's proposed relocation. DONE AND ENTERED this 6th day of June, 1996, in Tallahassee, Leon County, Florida. CLAUDE B. ARRINGTON, 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 6th day of June, 1996.
The Issue The issue is whether Petitioners are entitled to motor vehicle dealerships that are proposed to be located in Orange County, Florida.
Findings Of Fact Based on the Notices of Publication, Respondent's protest letters which were forwarded to DOAH, and the testimony presented at the final hearing, the following Findings of Fact are made: Respondent is an existing franchised dealer for motorcycles manufactured by Benzhou Vehicle Industry Group Company, Ltd. Petitioners have proposed the establishment of new dealerships to sell the same line-make of motorcycles as those sold by Respondent. Respondent's dealership is located at 3838 John Young Parkway, Orlando, Orange County, Florida. Petitioners' dealerships are proposed to be located in Orange County, Florida, at: 4535 34th Street, Orlando, Florida (Case No. 09-3489); and 2650 West Fairbanks Avenue, Winter Park, Florida (Case Nos. 09-3499 and 09-4750). The proposed dealerships are within a 12.5-mile radius of Respondent's dealership. Respondent has standing to protest the establishment of the proposed dealerships. No evidence was presented showing that Respondent was "not providing adequate representation" of the same line-make vehicles in the community or territory.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Highway Safety and Motor Vehicles enter a final order denying the establishment of Petitioners' proposed franchise dealerships for Case Nos. 09-3489, 09-3499, and 09-4750. DONE AND ENTERED this 12th day of November, 2009, in Tallahassee, Leon County, Florida. S JEFF B. CLARK 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 12th day of November, 2009. COPIES FURNISHED: Electra Theodorides-Bustle, Executive Director Department of Highway Safety and Motor Vehicles Neil Kirkman Building 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 Jennifer Clark Department of Highway Safety and Motor Vehicles Neil Kirkman Building, Room A-308 2900 Apalachee Parkway Tallahassee, Florida 32399-0635 Jude A. Mitchell Jude's Cycle Service Post Office Box 585574 Orlando, Florida 32858 Beverly Fox Red Streak Scooters, LLC 427 Doughty Boulevard Inwood, New York 11096 Randy Lazarus Scooter City USA, LLC 4535 34th Street Orlando, Florida 32811 Bobbette Lynott Classic Motorcycles and Sidecars, Inc. Post Office Box 969 Preston, Washington 98050 Lou Ronka Scooter City USA, LLC 2650 West Fairbanks Avenue Winter Park, Florida 32789
The Issue The issue in this cause is whether Petitioners are entitled to a motor vehicle dealership that is proposed to be located in Santa Rosa Beach, Florida.
Findings Of Fact On December 3, 2010, 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 15 minutes, 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 Santa Rosa Beach, Florida. Absent such evidence, the establishment of the proposed dealership should be denied.
Recommendation Based on 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 15th day of April, 2011, 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 15th day of April, 2011. COPIES FURNISHED: Dan Rhoad Ruff and Tuff Electric Vehicles, Inc. 1 Ruff Tuff Drive Winnsboro, South Carolina 29180 Thomas B. Waldrop Electric Cart Company, LLC 5480 US Highway 98 West Santa Rosa Beach, Florida 32459 Rachel Miller Hampton Ruff and Tuff, Inc. 230 South West Hollywood Boulevard Fort Walton Beach, Florida 32548 Steve Hurm, General Counsel Department of Highway Safety and Motor Vehicles Neil Kirkman Building 2900 Apalachee Parkway Tallahassee, Florida 32399-0500 Carl A. Ford, Director Division of Motor Vehicles Department of Highway Safety and Motor Vehicles Neil Kirkman Building 2900 Apalachee Parkway, Room B-439 Tallahassee, Florida 32399-0500
The Issue The issues in these two cases are whether Respondent violated provisions of chapter 475, Florida Statutes (2015),1/ regulating real estate sales brokers, as alleged in the Administrative Complaints, by (1) failing to return a rental deposit to a potential tenant; (2) serving as the qualifying broker for Friendly International Realty, Inc. (“Friendly”), but failing to actively supervise Friendly’s operations and/or sales associates; failing to preserve Friendly’s transaction records and escrow account documents; and (4) acting in a manner that constitutes culpable negligence or a breach of trust. If there was a violation, an additional issue would be what penalty is appropriate.
Findings Of Fact Parties The Department is the state agency that regulates the practice of real estate pursuant to section 20.165, and chapters 455 and 475, Florida Statutes. Ms. King is a licensed real estate broker registered with the Department (license numbers BK 3203595, 3261628, 3293588, 3306619, 3335771, 3354773, and 3363985). Ms. King is registered with the Department as the qualifying broker for 16 brokerages located throughout the state of Florida. At all times relevant to this case, Ms. King’s registered address with the Department was 4430 Park Boulevard North, Pinellas Park, Florida 33781. Friendly International Realty, LLC Friendly was a Florida licensed real estate corporation, holding license number CQ 1040825. Records reflect that James Berthelot was the registered agent for Friendly at the time of incorporation, June 2011. At all times relevant, Mr. Berthelot was a licensed Real Estate Sales Associate (license number SL 3226474) registered with Friendly. In May 2014, Respondent drafted and entered into a Limited Qualifying Broker Agreement (“Broker Agreement”) with Friendly and its owner, Ivania De La Rocha.2/ Friendly and Ms. King entered into the Broker Agreement, “in order to comply with the requirements of the Florida Department of [Business and] Professional Regulation.” Under the terms of the Broker Agreement, Respondent was not paid by Friendly per transaction. Rather, Respondent agreed to serve as the “Corporate Broker of Record” in exchange for a payment of $300 a month “as a flat fee for any and all real estate business conducted by [Friendly].” The Broker Agreement also provided for a “late fee” penalty if Friendly was delinquent in this monthly payment. Section 1.1 of the Broker Agreement outlined Respondent’s duties to Friendly, requiring her to: (1) keep her and Friendly’s licenses active and in good standing under Florida law; (2) keep her other business interests separate from those involving Friendly’s interests; and (3) provide Friendly notice of any governmental inquiry involving her serving as Friendly’s broker. There was no mention in the Broker Agreement of either Respondent’s or Friendly’s responsibilities regarding oversight of transactions, training for sales associates, or day-to-day operations. Regarding document retention, the Broker Agreement provided: Section 9.0 AUDIT & REVIEW RIGHT: Broker shall have the right to enter [Friendly’s] offices upon reasonable advance written notice to verify compliance with the real estate laws of the State of Florida. There was no evidence that Ms. King ever provided Friendly with the kind of notice described in section 9.0 of the Broker Agreement. Although the Broker Agreement did not prohibit Friendly from holding funds or assets on behalf of third parties, section 10.0 (Miscellaneous) explicitly prohibited Friendly from operating an escrow account. (g) Escrow and Ernest Money Accounts. [Friendly] shall not be permitted to hold any escrow account(s). On July 31, 2014, Ms. King was registered with the Florida Department of State, Division of Corporations, as “manager” of Friendly. Ms. King was the qualifying broker for Friendly (license number BK3303898) from August 6, 2014, through September 30, 2015, and November 4, 2015, through January 13, 2016.3/ During the time Ms. King served as the qualifying broker, Friendly operated from a number of addresses in Miami- Dade County, including 11900 Biscayne Boulevard, Suite 292, Miami, Florida 33181; and 2132 Northeast 123rd Street, Miami, Florida 33181. The office door of the Friendly office located on Northeast 123rd Street was painted in large letters, “FRIENDLY INTERNATIONAL REALTY” and “ALICIA KING” painted underneath. At the hearing, when asked about Friendly’s address, Ms. King could only confirm that when she became the broker the office was “on Biscayne.” The Biscayne Boulevard address is the one listed on the Broker Agreement. At the hearing, Ms. King was wrong about when the Friendly office had moved from the Biscayne Boulevard to the Northeast 123rd Street location, insisting it was over the Christmas holidays in 2015. Records establish Friendly moved from the Biscayne Boulevard location to the Northeast 123rd Street location sometime between April and July 2014. In January 2016, Ms. King believed the office was still on Biscayne Boulevard. In reality, it had been over a year since the office had relocated to that location. At the hearing, when asked by her own counsel how many transactions a month Friendly handled, Ms. King replied, “That’s hard to say. It was not many at all. Ten, maybe.” Respondent could not give the exact number of employees or sales associates affiliated with Friendly; when asked, she stated she could not remember the exact amount, but knew it was “very limited.” Respondent did not have any agreements or documentation related to how many sales associates were registered under her broker’s license. Respondent could not name any other sales associates affiliated with Friendly while she was the qualifying broker, except for Mr. Berthelot. While she was Friendly’s qualifying broker, Respondent did not perform any of the training for the sales associates at Friendly. Respondent did not have any face-to-face meetings with any Friendly sales associates, except for Mr. Berthelot. Respondent did not have phone or e-mail contact with any of the Friendly sales associates, except for Mr. Berthelot. Respondent did not have copies of any forms, handbooks, reports or files related to Friendly. All of these documents were in paper form and kept in the Friendly office. Respondent had no access or signatory authority for any of Friendly’s bank accounts. Natalie James was a registered real estate sales associate affiliated with Friendly for approximately five months, from November 2015 through March 2016. Ms. James worked out of the Friendly office and was physically present at the office at least three or four times a week. Ms. James was involved in several rentals and one sales transaction while at Friendly. For each transaction she assembled a file, which was kept in the Friendly office. For rental transactions, Ms. James would negotiate and facilitate lease agreements. When she represented potential tenants, she received deposit funds that she deposited with Friendly. Ms. James attended meetings at Friendly; Ms. King was not present at any of them. Ms. James never had any telephonic, electronic, personal, or other contact with Respondent. While at Friendly, neither Mr. Berthelot nor any of Ms. James’ co-workers mentioned Ms. King to Ms. James. Although Ms. King’s name was on the door of Friendly’s office, Ms. James was unaware Ms. King was Friendly’s broker. There was conflicting testimony as to how often Respondent visited the Friendly office. Ms. King’s testimony at the hearing was at odds with the Department’s evidence and testimony regarding this issue. Ms. King insisted that while she was Friendly’s broker, she would travel from Pinellas Park to the Friendly office once or twice a week. This was not believable for a number of reasons. First, had Ms. King visited Friendly’s office as often as she stated, she would have known about the change in location; she did not. Second, Ms. King could not give one concrete date or detail about her travels to the Friendly office. Third, and most compelling, was the testimony of Ms. James (who worked at Friendly for at least two months while Ms. King was its broker) that she had never seen, communicated with, or heard mention of Ms. King while at Friendly. Ms. James’ unbiased and compelling testimony alone supports a finding that Ms. King did not visit the Friendly office as frequently as she indicated. Ms. King was aware that Friendly and Mr. Berthelot provided rental or “tenant placement” services.4/ Friendly collected security deposits and other move-in funds from potential renters and held them in an escrow account. Ms. King was not aware Friendly had an escrow account until January 2016 when she was contacted by the Department in an unrelated case. On January 13, 2016, Respondent resigned with the Department as the qualifying broker for Friendly effective that same day. On January 14, 2016, Respondent filed a complaint with the Department against Mr. Berthelot for operating an escrow account and collecting deposit funds without her knowledge. Facts Related to the Viton Case In November 2015, during the time Ms. King was Friendly’s qualifying broker, Christian Viton signed a lease agreement to rent an apartment located in Miami at 460 Northeast 82nd Terrace, Unit 8 (“Viton transaction”). The Viton lease agreement listed Friendly as the holder of the deposit monies and required Friendly to transfer the deposit and move-in funds to the owner of the property. Pursuant to the terms of the Viton lease agreement, Mr. Viton remitted an initial deposit of $500, and received a written receipt from Friendly dated November 2, 2015. Mr. Viton gave Friendly a second deposit of $380, and received a written receipt dated November 4, 2015. Mr. Viton never moved into the apartment and demanded a refund of his deposit from Friendly. On December 8, 2015, Friendly issued a check to Mr. Viton in the amount of $530. Three days later, Friendly issued a stop-payment order on the $530 check to Mr. Viton. On February 29, 2016, Mr. Viton filed a complaint with the Department seeking a return of the $880 he had given to Friendly. As a result, the Department initiated an investigation into Mr. Viton’s complaint and contacted Respondent. Upon learning about the Viton complaint, Ms. King contacted Mr. Berthelot who admitted Friendly had stopped payment on the $530 refund check, but had reissued the full amount of the deposit to a third-party not named on the lease. There is no evidence Mr. Viton ever received a refund of his $880 deposit. Facts Related to Dorestant Case In June 2015, during the time Ms. King served as Friendly’s qualifying broker, Cindy Dorestant entered into a lease agreement to rent a condominium located at 1540 West 191 Street, Unit 110 (“Dorestant transaction”). In the lease, Friendly was listed as the “broker” and holder of the deposit; TIR Prime Properties (“TIR”) was listed as the owner’s agent. The Dorestant lease agreement required Friendly to transfer the deposit and move-in funds collected from Ms. Dorestant to TIR. Pursuant to the terms of the Dorestant lease agreement, Ms. Dorestant gave Friendly $1,050 as an initial deposit, and received a written receipt dated June 24, 2015. In late July 2015, Ms. Dorestant contacted TIR’s property manager and sales agent to ask for information about the status of her move into the condominium. TIR explained to Ms. Dorestant that Friendly had not conveyed any of monies collected from Ms. Dorestant to TIR. Both Ms. Dorestant and TIR attempted to contact Friendly, but Friendly was non-responsive. The TIR sales associate relayed this information to TIR’s broker, Mariano Saal, who in turn tried to reach Friendly to resolve the issue. Eventually, TIR was told by Mr. Berthelot that Friendly would release the move-in funds to TIR and that Mr. Berthelot would schedule the move-in. TIR did not receive any funds from Friendly, nor did Mr. Berthelot facilitate Ms. Dorestant’s move into the condominium. On August 31, 2015, Mr. Saal contacted Mr. Berthelot and informed him that if TIR did not receive the move-in funds for the Dorestant transaction by 5:00 p.m. that day, it would be required to find another tenant. Ms. Dorestant did not move into the condominium and demanded a refund from Friendly and TIR. On September 14, 2015, Mr. Saal sent an e-mail to what he believed was Respondent’s address, demanding the $1,050 from Friendly because it considered Ms. Dorestant’s failure to move into the property a default of the lease agreement. Respondent, however, did not have access to Friendly’s e-mails. The e-mail was also sent to Mr. Berthelot, and Ms. De La Rocha. TIR did not receive any funds from Friendly for the Dorestant transaction. After discovering she could not move into the condominium because Friendly had not transferred the deposit to TIR, Ms. Dorestant demanded a refund of her deposit monies from Friendly. She did not receive it. On February 10, 2016, Mariano Saal, TIR’s qualifying broker, filed a complaint against Mr. Berthelot and Friendly with the Department regarding the Dorestant transaction. Ms. Dorestant initially did not receive a refund from Friendly and, therefore, filed a police report against Mr. Berthelot and sued him in small claims court. Eventually, Mr. Berthelot refunded Ms. Dorestant her deposit monies. Department Investigations of Friendly Upon receiving the Viton complaint, the Department assigned the case (DPBR Case No. 2016018731) to Erik Lluy, an Investigator Specialist II in the Miami field office. Similarly, on or around the same time the Department received the Dorestant complaint; it was also assigned to Mr. Lluy (DPBR Case No. 2016018069). On April 25, 2016, Mr. Lluy officially notified Ms. King of each of the complaints. On May 25, 2016, the Department transferred both the Viton and Dorestant complaints from Mr. Lluy to Percylla Kennedy. Ms. King provided a written response to both complaints via e-mail to Mr. Lluy on May 26, 2016. At that time, Mr. Lluy indicated the case had been transferred to Ms. Kennedy and copied Ms. Kennedy on the response. Ms. Kennedy was familiar with Friendly, Mr. Berthelot and Ms. King. In January 5, 2016, she had conducted an investigation of Friendly in an unrelated complaint filed against Friendly by Borys Bilan (“Bilan complaint”). As part of the investigation into the Bilan complaint, Ms. Kennedy arrived at the Friendly office address registered with the Department on Biscayne Boulevard to conduct an official office inspection. When she arrived, however, she found the office vacant. As a result, that same day Ms. Kennedy contacted the registered qualifying broker for Friendly–-Ms. King-–by phone. During that call, Ms. Kennedy asked Ms. King where Friendly’s office was located, but Ms. King did not know. Eventually, Ms. Kennedy determined the Friendly office had relocated to the Northeast 123rd Street location. Ms. Kennedy testified that during this call, Ms. King admitted to her that she had not been to the Northeast 123rd Street location. Respondent testified she did not tell Ms. Kennedy this and as proof insisted that the January call was inconsequential and “a very short call.” The undersigned rejects Respondent’s version of events and finds Ms. Kennedy’s testimony and report regarding the January 2016 interview more reliable. First, although Ms. King describes the conversation as occurring on January 7, 2016, both Ms. Kennedy’s testimony and the Inspection Report establish the conversation occurred on January 5, 2016. Second, Respondent’s characterization of the call as inconsequential contradicts her own May 26, 2016, written response to the Department in which Ms. King outlines a number of substantive issues discussed during this phone conversation, including: the nature of Friendly’s practice, whether Friendly had an escrow account, the type of payment accepted by Friendly, and the address of Friendly’s office. After speaking with Ms. King about the Bilan complaint, Ms. Kennedy conducted the inspection at Friendly’s Northeast 123rd Street location. Respondent was not present when Investigator Kennedy conducted the office inspection. Ms. Kennedy then e-mailed the Office Inspection form to Respondent. As a result of the January 5, 2016, phone conversation with Ms. Kennedy, Ms. King contacted Mr. Berthelot about the Bilan complaint. On January 13, 2016, Mr. Berthelot provided Ms. King with the transaction file related to the Bilan complaint. When Ms. King reviewed the lease agreement, she realized that Friendly was holding deposit funds in escrow. As a result, on December 13, 2016, Ms. King filed a resignation letter with the Department explaining she was no longer the qualifying broker for Friendly. Ms. King did not ask Mr. Berthelot or anyone else at Friendly for any other transaction records at this time, nor did she make any effort to review any of Friendly’s transaction files to determine whether Friendly had obtained other deposit funds or conducted other transactions similar to the one that was the subject of the Bilan complaint. After having knowledge of the Bilan complaint and transaction, and suspecting Friendly had been operating an escrow account, Ms. King made no immediate effort to access the operating or escrow bank accounts or reconcile the escrow account. After resigning as Friendly’s qualifying broker with the Department, Ms. King filed a complaint with the Department against Mr. Berthelot for unlicensed activity involving an escrow deposit.5/ Despite no longer being Friendly’s qualifying broker, on January 21, 2016, Ms. King executed and sent back to Ms. Kennedy the Inspection Report related to the Bilan complaint. Five months later, on or around May 25, 2016, Ms. Kennedy notified Ms. King she was taking over the investigation into the Viton and Dorestant cases. Ms. Kennedy testified that as part of her investigation into the Viton and Dorestant complaints, she interviewed Respondent again. Respondent denies she was interviewed by Ms. Kennedy regarding the Viton and Dorestant complaints, and instead insists she was only interviewed in January 2016 in connection with the Bilan complaint. Ms. King testified she believed Ms. Kennedy lied about interviewing her more than once because Ms. Kennedy was “lazy.” The undersigned rejects this assertion. Ms. Kennedy’s testimony was specific, knowledgeable, and credible, unlike Ms. King’s testimony, which was intentionally vague. Moreover, Ms. Kennedy specifically attributes her findings to specific sources such as Ms. King’s written response, her interview with Ms. King relating to the Viton and Dorestant transactions, and to her previous conversation with Ms. King during the Bilan investigation. The citations to information gleaned from the January 5, 2016, call were marked by the following sub-note. SUBJECT was previously interviewed by this Investigator in January 2016 for the unrelated complaint and was unaware that FRIENDLY INTERNATIONAL REALTY LLC had moved from license location 11900 Biscayne Blvd.[,] Suite 292 Miami, FL 33181 to 2132 NE 123ST[,] Miami, FL 33181 (See Ex. 9). At that time, SUBJECT was unable to provide the transaction file. Ms. Kennedy would have no reason to fabricate the source of the conclusions she reached in her report or the number of times she contacted Ms. King. Ms. Kennedy submitted her original investigative report to the Department for the Viton complaint on October 31, 2016. Per the Department’s request, Ms. Kennedy interviewed Mr. Viton and submitted a supplemental report on December 13, 2016. In this report, Ms. Kennedy determined that on February 25, 2016, Friendly issued a check in the amount of $875 to a person who was not listed on either the lease agreement, the receipts Friendly issued to Mr. Viton, or any other paperwork. Similarly, Ms. Kennedy submitted her original investigative report to the Department for the Dorestant complaint on October 31, 2016. Per the Department’s request, Ms. Kennedy interviewed Ms. Dorestant and submitted a supplemental report on December 13, 2016, indicating Ms. Dorestant did eventually receive a refund. During the course of the Viton investigation, Mr. Lluy and Ms. Kennedy requested that Respondent provide the Department with the file related to the Viton transaction, and documentation for Friendly’s escrow account. Although Respondent provided the Department a response (consisting of a written explanation with a copy of the Bilan file and some communications between Mr. Berthelot and herself from May 2016), she did not provide the Department with the transaction file related to the Viton transaction or Friendly’s escrow account documentation. During the course of the Dorestant investigation Mr. Lluy and Ms. Kennedy requested that Respondent provide the Department with the file related to the Viton transaction, and documentation for Friendly’s escrow account. Although Respondent provided the Department a response (consisting of a written explanation with a copy of the Bilan file and some communications between Mr. Berthelot and herself from May 2016), she did not provide the Department with the transaction file related to the Dorestant transaction or Friendly’s escrow account documentation. Professional Standards Mr. Saal, TIR’s qualifying broker, testified he had served as a broker for approximately ten years. As TIR’s qualifying broker, he kept the documentation related to the transactions handled by TIR’s six sales associates. The testimony of the TIR sales associate and property manager established that they relied on Mr. Saal for advice and to resolve issues. For example, when Ms. Dorestant began contacting TIR’s sales associate and property manager regarding the move-in and then for a refund of her deposit, the sales associate went to Mr. Saal to discuss the situation. Mr. Saal then attempted to resolve the issue by attempting to communicate with Friendly, Mr. Berthelot and Ms. King. Mr. Trafton, an experienced real estate broker and expert in brokerages, reviewed the Department’s investigative files and reports relating to the Viton and Dorestant complaints, as well as applicable Florida Statutes and rules. Mr. Trafton’s testimony and report established that in Florida the usual and customary standard applicable to brokers is that they must promptly deliver funds in possession of the brokerage that belong to others. Petitioner showed that Mr. Viton was entitled to a refund of his deposit from Friendly and that Respondent erred in not ensuring he received this refund. Mr. Trafton also testified that the standard of care applicable to a broker in supervising sales associates requires active supervision. “Active supervision” is not defined by statute or rule, but by usual and customary practices exercised statewide. “Active supervision” requires a broker to: have regular communications with all sales associates, not just communicating when there is a complaint; be aware of problems, issues and procedures in the office and among sales associates; have access to and signatory power on all operating and escrow accounts; hold regular scheduled office/sales meetings; conduct in–person training meetings; provide guidance and advice for sales associates; be intimately involved in how transaction forms and other documents are stored and retrieved; and be available to provide advice and direction on short notice. In other words, a broker should set the tone at the brokerage by overseeing her sales associates’ conduct of transactions. Ms. King failed to manage, direct, and control her real estate sales associate, Mr. Berthelot, to the standard expected of a qualifying broker in both the Viton and Dorestant transactions, if not all of Friendly’s transactions. She did not actively supervise Mr. Berthelot as a sales associate. Mr. Trafton also testified that a broker, not the brokerage, is ultimately responsible for preserving transaction files, forms related to transactions, and other related documents. Although less certain than Mr. Trafton about whether a broker or the brokerage firm is responsible for preservation of transaction files, Mr. Saal testified “the broker is responsible for the . . . transactions. It’s [the broker’s] client at the end of the day.” Ms. King failed to preserve accounts and records relating to Friendly’s accounts, the files related to the Viton and Dorestant rental transactions, or any other documents related to Friendly. Petitioner also clearly established that Respondent was guilty of either “culpable negligence” or “breach of trust” in the Viton or Dorestant transaction. As Investigator Kennedy testified, and as corroborated by cost summary reports maintained by the Department, from the start of the investigation of the Viton complaint through September 14, 2017, the Department incurred $1,625.25 in costs, not including costs associated with an attorney’s time. As Investigator Kennedy testified, and as corroborated by cost summary reports maintained by the Department, from the start of the investigation of the Dorestant complaint through September 14, 2017, the Department incurred $1,608.25 in costs, not including costs associated with an attorney’s time.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered by the Florida Real Estate Commission: Case No. 17-3989 Finding Respondent Alicia Faith King in violation of sections 475.25(1)(d)1., 475.25(1)(u), 475.25(1)(e), and 475.25(1)(b), as charged in Counts I through IV of the Administrative Complaint in the Viton case. Imposing an administrative fine totaling $2,500 ($500 fine per count for Counts I, II and III; and $1,000 fine for Count IV). Imposing license suspension for a total period of nine months (one-month suspensions each for Counts I, II, and III; and a six-month suspension for Count IV). Imposing costs related to the investigation and prosecution of the case in the amount of $1,625.25. Case No. 17-3961 Finding Respondent Alicia Faith King in violation of sections 475.25(1)(u), 475.25(1)(e), and 475.25(1)(b), as charged in Counts I through III of the Administrative Complaint in the Dorestant case. Imposing an administrative fine totaling of $2,000 ($500 fine per count for Counts I and II; and $1,000 fine for Count III). Imposing license suspension for a total period of eight months to be imposed consecutive to the suspension in Case No. 17-3989 (one-month suspensions each for Counts I and II; and a six-month suspension for Count III). Imposing costs related to the investigation and prosecution of the case in the amount of $1,608.75. DONE AND ENTERED this 25th day of January, 2018, in Tallahassee, Leon County, Florida. S HETAL DESAI 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 25th day of January, 2018.
