The Issue Whether the Petitioner has been subjected to employment discrimination by termination, allegedly based upon race, and by retaliation, for filing a charge of discrimination.
Findings Of Fact On or about November 29, 2005, the Petitioner applied for a job as a part-time sales clerk with the Respondent. The Petitioner indicated that she was available to work on Sundays, Mondays, and Wednesdays from 7:00 a.m. to 5:00 p.m. This was because she was already employed in another job. During the course of the hiring and orientation process, the Petitioner learned of the policies of the Respondent against harassment and discrimination of all types. She was instructed in those policies and acknowledged receipt of them. The Petitioner began her employment with the Respondent on December 27, 2005, as a part-time sales clerk at a convenience store (No. 31) in Milton, Florida. When she began her employment, the Store Manager was Bob Kukuk. The Assistant Managers for that store were Michael Morris and "Cynthia." There were also two other sales clerks, Cherie Dorey and Lugenia Word. Both Ms. Dorey and Ms. Word are white. Soon after the Petitioner was hired, Mr. Kukuk announced his resignation as store manager. On January 31, 2006, the Petitioner attended the new employee training session in Milton, Florida, which included training in the equal employment and non-harassment policies of the Respondent. During the question and answer session, concerning the harassment and discrimination portion of the training, the Petitioner told Training Manager, Robert Birks that she had a problem at her store involving a conflict with another employee. She felt that she was being required to do things that other employees were not required to do. Mr. Birks advised Ms. Myles that she should provide a written statement concerning her complaints to her supervisor and he provided her with pen, paper, and envelope to do so on the spot. The Petitioner wrote out a note and returned it to Mr. Birks in a sealed envelope and he gave the envelope to the District Advisor, Jamie Galloway on that same date. After reading the Petitioner's note, Ms. Galloway met with Petitioner on that same day to discuss her complaints. The Petitioner informed Ms. Galloway that Michael Morris, an Assistant Manager at her store, was telling employees that he was going to be the new store manager. The Petitioner told Ms. Galloway that she felt Morris did not like her because of her race. Ms. Galloway informed the Petitioner that, in fact, Morris would not be selected as store manager for store No. 31 and that Mr. Kukuk would be replaced with someone else other than Morris. She also informed the Petitioner that the Respondent had a zero tolerance for harassment and discrimination and that if the Petitioner had any problems with Mr. Morris that she should personally contact Ms. Galloway. In her capacity as District Advisor, Ms. Galloway supervised the day-to-day operations of a number of stores. In fact, during the above-referenced time period, Ms. Galloway was supervising her own normal district area, as well as that of another district manager who had resigned. The three sales clerks at store No. 31, Ms. Dorey, Ms. Word, and Ms. Myles were all reprimanded ("written-up") in February 2006, because of their cash registers being "short," or containing insufficient funds at the close of the business day or shift. The Petitioner was also counseled for insubordination on this occasion because she told Ms. Word, in front of customers, that she was not going to take out the trash because Mr. Morris and Ms. Dorey would be into work soon and "they never did anything anyway." Ms. Word confirmed that Ms. Myles had made that statement to the store management. Sometime in February 2006 the Petitioner expressed the desire to transfer to a store on the West side of Pensacola because she was no longer employed in her other job in the Milton area. She therefore wanted to work for Tom Thumb at a location closer to her residence. The Manager, Mr. Kukuk at that time, informed Ms. Galloway of this wish on the part of the Petitioner. Ms. Galloway contacted the District Advisor for the West side of Pensacola, Bill Jordan, to inquire whether any positions were available that would fit the Petitioner's schedule. Ms. Galloway followed up on the question with Mr. Jordan several days later, but Mr. Jordan said that he had no employment positions available at that time. The Petitioner then filed her Charge of Discrimination on February 16, 2006, (her first charge). In her Discrimination Charge the Petitioner maintains that she was constantly "getting written-up" for unnecessary matters by Mr. Morris, the Manager. In fact, however, she was written-up only once while Mr. Morris was the Assistant Manager of the store, as were Ms. Word and Ms. Dorey, the other clerks. Both Ms. Word and Ms. Dorey are white. Patricia Merritt was installed as the new store manager at store No. 31 on February 24, 2006. Ms. Merritt has worked for the Respondent for 17 years as a clerk, assistant manager, and manager. Ms. Merritt had the responsibility of managing the store, ascertaining that all duties involved in store operation were accomplished and supervising and monitoring the performance of other store employees. She imposed discipline, including termination if necessary, and also hired employees. Mr. Morris failed to appear for work, beginning the first week of March 2006. He was terminated from his employment with the Respondent on March 9, 2006. In February or early March, Ms. Merritt informed Ms. Galloway that she had overheard another employee referring to the Petitioner having filed a claim against the Respondent because of Mr. Morris. Prior to that time Ms. Merritt was unaware of any problem between Mr. Morris and the Petitioner. Between the time that Ms. Galloway met with the Petitioner on January 31, 2006, and the time she heard from store manager Merritt that the Petitioner was still having a problem with Morris in late February or early March, the Petitioner had not contacted Ms. Galloway to report any problem. After being advised of the matter by Ms. Merritt, Ms. Galloway advised Ms. Merritt to contact the Petitioner to find out her version of the events which occurred and to offer her a transfer to any one of five stores that Ms. Galloway was responsible for on the East side of Pensacola. Ms. Merritt met with the Petitioner and offered her the transfer opportunity, which the Petitioner refused at that time because she had a mediation pending. When Ms. Merritt began duties as store manager a misunderstanding occurred about the Petitioner's schedule. Ms. Merritt understood, mistakenly, that the Petitioner was available for fewer hours of work than she actually was. This resulted in the Petitioner being scheduled to work fewer hours for two or three weeks. Ms. Merritt was then informed of the Petitioner's actual scheduling availability by someone from the management office. On March 20, 2006, the Human Resource Manager, Sheila Kates, met with the Petitioner. The Petitioner complained about her reduced hours which Ms. Kates discussed with Ms. Merritt. As soon as Ms. Merritt realized that she had misunderstood the Petitioner's hours of availability she increased the Petitioner's hours on the work schedule. The Petitioner agreed that Ms. Merritt had been unaware about any problem between the Petitioner and Mr. Morris, when she reduced the Petitioner's work hours schedule because of her misunderstanding of the Petitioner's availability. Ms. Kates again offered to allow Ms. Myles to transfer to another store if she wished (apparently to help her avoid her apparent conflict with Mr. Morris), but the Petitioner again declined. Ms. Galloway, as part of her duties as District Advisor, conducted store inventory audits. She conducted a store inventory audit for Store No. 31 on May 30, 2006. During that audit she discovered that the store had a significant inventory shortage. Ms. Galloway therefore scheduled a "red flag" meeting the next day with each employee at the store, as well as meeting with them as a group to discuss inventory control. All of the employees at the store were counseled regarding the inventory shortage, including Ms. Myles and Ms. Word. Ms. Word, who is white, was issued a written reprimand on March 24th and April 24th, 2006, because of cash shortages. Ms. Word was subsequently terminated on June 16, 2006, for causing inventory shortages by allowing her friends to come in and take merchandise out of the store without paying for it, as well as for excessive gas "drive offs," or instances where people pumped gas into their vehicles and failed to pay for it. The Petitioner was given a $1.00 per hour raise by Ms. Merritt on or about April 2006. Ms. Merritt also changed the Petitioner from a part-time to a full-time employee in May 2006. This change enabled the Petitioner to become eligible for employee benefits. Ms. Merritt also, however, reprimanded the Petitioner for a cash shortage on July 14, 2006. The Petitioner admitted that her cash register was $48.00 dollars short on that day. The Petitioner complained to Ms. Galloway sometime in July of 2006 that Mr. Morris, the former store manager, and no longer an employee, had been vandalizing her car when he came to the store as a customer. Although these allegations were uncorroborated at that time, Ms. Galloway advised the Petitioner to call the police about the matter and to contact Ms. Kates directly, in the Human Resources office, if there were any more such incidents. The Petitioner filed a retaliation claim against the Respondent on August 7, 2006. Ms. Merritt had been considering the Petitioner for promotion to assistant store manager. The Petitioner completed a background check authorization for that position on September 19, 2006. Mark Slater is a Regional Manager for the Respondent. His duties include supporting the District Advisor's position, which includes recruitment, hiring and training of managers, reviewing sales trends, and reviewing any other financial trends, such as cash shortages, "drive offs" and inventory losses. In mid-October 2006, in the course of a routine review of reports from Store No. 31, Mr. Slater became aware of a possible problem regarding excessive gasoline drive offs, and an unusual purchase-to-sales ratio. Shortly after his review of those reports, Mr. Slater went to Store No. 31 to review the store's electronic journal. The electronic journal contained a record of all the store transactions. In his review of that journal, he focused on "voids," "no sales," and "drive offs," which could explain the irregularities that he had observed in his initial review. In his review of the "voids" at store No. 31 during the period in question, Mr. Slater noted quite a few voids for cigarette cartons, for large amounts, in a very short period of time. Specifically, in the course of seven minutes, he observed voids in the total amount of $406.23. He found this to be highly irregular and suspicious. Mr. Slater also looked at the drive-offs, because he had noticed some trends on that report as well. In reviewing drive-offs, he noticed that the same employee number was involved in both the voids and the drive-off transactions. Mr. Slater noted in his review that one drive-off was held on a void and then brought down as a drive-off, which appeared suspicious to him. Mr. Slater than matched up the electronic journal transactions with the security video tape that corresponded with that journal entry. In observing the video tape, Mr. Slater identified the transaction entered as a drive-off, but saw from the video tape that a customer had in fact come in and paid for the gas in question with cash. When he began his review Mr. Slater did not know which employee had the employee number that was used in association with the voids and the gasoline drive-offs. However, after he had concluded his investigation, he researched that number and found out that it was the number assigned to the Petitioner. Mr. Slater thus knew that the Petitioner had voided the drive- off transaction, as shown in the electronic journal, while the video tape showed that the Petitioner had actually served the customer who, in fact, did not drive-off without paying, but had paid $20.00 in cash for the gasoline in question. When she was asked about the security video showing the Petitioner accepting the $20.00 for the transaction which she had entered as a gas drive-off, the Petitioner responded that she did not recall it. Mr. Slater concluded that the Petitioner had not properly handled the transaction and took his findings to the Human Resources Manager, Sheila Kates. After consulting with Ms. Kates, the decision was made to terminate the Petitioner's employment. Prior to making his investigation and prior to making his conclusions, Mr. Slater was unaware of any issues between the Petitioner and Michael Morris. None of his findings and decisions regarding the situation with the Petitioner's voids and drive-offs had anything to do, in a retaliatory sense, with any issues or complaints the Petitioner might have had against Michael Morris or to the Respondent concerning Michael Morris. After being discharged for related types of conduct, neither Ms. Lugenia Word, who is white, nor the Petitioner, Ms. Myles, are eligible for re-hire by the Respondent.
Recommendation Having considered the foregoing Findings of Fact, Conclusions of Law, the evidence of record, the candor and demeanor of the witnesses, and the pleadings and arguments of the parties, it is, therefore, RECOMMENDED that a final order be entered by the Florida Commission on Human Relations dismissing the charges of discrimination and retaliation at issue in their entirety. DONE AND ENTERED this 29th day of October, 2007, in Tallahassee, Leon County, Florida. S P. MICHAEL RUFF 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 29th day of October, 2007. COPIES FURNISHED: Latarsha Myles 2103 Haynes Street, Apt. C Pensacola, Florida 30326 Cathy M. Stutin, Esquire Fisher & Philips LLP 450 East Las Olas Boulevard, Suite 800 Ft. Lauderdale, Florida 33301 Cecil Howard, General Counsel Florida Commission on Human Relations 2009 Apalachee Parkway, Suite 100 Tallahassee, Florida 32301 Denise Crawford, Agency Clerk Florida Commission on Human Relations 2009 Apalachee Parkway, Suite 100 Tallahassee, Florida 32301
The Issue The issue is whether Nissan North America, Inc.'s (Nissan) rejection of the proposed transfer of the equity interest in Love Nissan, Inc. (Love), from Robert Halleen and Chad Halleen to Marilyn Halleen, is in violation of the laws regulating the licensing of motor vehicle dealers and manufacturers, maintaining competition, providing consumer protection and fair trade and providing minorities with opportunities for full participation as motor vehicle dealers, as set forth in Sections 320.61-320.70, Florida Statutes.
Findings Of Fact Nissan is a "licensee" as defined by Section 320.60(8), Florida Statutes. Love is a "motor vehicle dealer" as defined by Section 320.60(11)(a)1, Florida Statutes. Love serves a territory centered on Homosassa, Florida. Nissan and Love are parties to a Dealer Sales and Service Agreement (Agreement), which is an "agreement" or "franchise agreement," as defined by Section 320.60(1), Florida Statutes. Robert Halleen and Chad Halleen became owners of Love as the result of a 1999 gift of the equity of Love from Robert's father and Chad's grandfather. Subsequent to the donation, Robert became a 90 percent owner of Love and Chad became a ten percent owner. Robert Halleen and Chad Halleen entered into the Agreement with Nissan on March 4, 1999. Since that time Robert Halleen has served as the Dealer Principal and Principal Owner of Love Nissan, and Chad Halleen has served as the Executive Manager and Other Owner. The Agreement has never been amended. The Agreement clearly states that Nissan relied on the personal qualifications of the Principal Owner, Other Owner, and Executive Manager in entering into the Agreement. In addition to personal qualifications, the Agreement recites expertise, reputation, integrity, experience, and ability, as characteristics expected of the Principal Owner, Other Owner, and Executive Manager. Since Robert and Chad Halleen became owners of Love the dealership has never met the regional average sales penetration. The regional average sales penetration is the measurement used by Nissan to evaluate the sales performance of each of its dealers. Subsequent to the inception of the Agreement, Nissan has issued multiple Notices of Default to Love citing Love's poor sales performance. In an effort to facilitate Love's success, Nissan contracted their primary market area on several occasions. This and other efforts to bolster Love's performance failed. As a result, Nissan issued a Notice of Termination of the Dealer Sales and Service Agreement between itself and Love, dated April 1, 2004. This precipitated a protest and a formal hearing before Administrative Law Judge Ella Jane Davis who recommended that DHSMV dismiss the protest and ratify the Notice of Termination. As noted above, DHSMV has not issued a final order. Because it has not, and because an appeal could follow, Nissan has not yet entered into a franchise with a new dealer for the Homosassa primary market area. It is Nissan's intention to award the area to a qualified minority candidate. Eleven days after the issuance of Judge Davis's order, on July 25, 2005, Robert and Chad Halleen notified Nissan of their intent to sell all of their stock in Love to Marilyn Halleen. In a short letter to Nissan, the selling price was said to be $100 with an increase to $5,000,000 should the sale ultimately be made to a third party. The dealership, if sold on the open market, would bring much more than $100. It could sell for as much as five million dollars. The letter also averred that there would not be a change in the executive management. The decision to sell all of the stock in Love to Marilyn Halleen was made by Robert Halleen. Chad Halleen was instructed by his father to comply with his decision to sell and he did as instructed. Prior to the issuance of Judge Davis's Recommended Order, Robert and Chad Halleen decided that if the termination case had an unfavorable outcome, they would avoid it by selling Love to a family member. They attempted to give effect to this course of action by discussing with Robert Halleen's father the possibility of transferring ownership to him. Robert and Chad Halleen desired to keep the dealership in the family and to ensure that Chad remained employed. Pursuant to the contemplated transfer to Robert Halleen's father, Chad Halleen would continue as Executive Manager, which was also the case in the proposed transfer to Marilyn Halleen. The discussion with Robert Halleen's father did not ripen into a course of action. During their tenure at Love, Robert and Chad Halleen informally divided the operational responsibilities between themselves. Chad Halleen was primarily responsible for the sales department and Robert Halleen focused on supervising the day-to-day operations of the parts, service, and accounting departments. However, it is clear that Robert Halleen, has been since the inception of the Agreement, and was, at least up to the date of the formal hearing, in ultimate overall charge of all of the operations of Love. Robert Halleen asserted at the hearing that he would abandon his role in the management of Love. Love attempted to prove that Chad Halleen was capable of successfully managing the operation without the aid of his father. However, the evidence taken as a whole, indicated that he had never operated the dealership without the assistance of Robert Halleen and that he would have difficulty doing so without that assistance. Subsequent to the proposed transfer, the management of Love would, allegedly, consist of Marilyn Halleen and Chad Halleen. They would be, under the Agreement, the "executive management," which is the term used in the Agreement to describe the Dealer Principal and the Executive Manager. It is not necessary under the Agreement, for a Dealer Principal to be actively involved in the daily business of the dealership, and because a Dealer Principal may own dealerships in more than one geographical area, it is not unusual to find a Dealer Principal who is not active in the day-to-day management of dealerships she or he owns. However, in this case it is contemplated, and Marilyn Halleen has so stated, that she and Chad Halleen would operate the business together. Currently, Marilyn Halleen's participation in the operation of the dealership has been working as a bookkeeper in the accounting department. Marilyn Halleen stated that should the transfer be approved, she would make the decisions about running the dealership, how the dealership is capitalized, new car sales, used car sales, allocation and ordering, marketing, management of the parts and service departments, and all of the other myriad responsibilities incumbent on a manager of an automobile dealership. However, her work experience does not qualify her to successfully accomplish all of these tasks and this plan is contrary to the assertion in the notice to Nissan that there would be no change in executive management. Marilyn Halleen has never owned a dealership or any other business. Her management experience is limited to filling a position as an office manager in a Buick dealership many years ago. In various automobile dealerships she has worked as a title clerk, receptionist, cashier, and in a warranty department. Prior to becoming bookkeeper at Love she worked full-time selling cosmetics for Mary Kay. Nissan was unaware of the details of Marilyn Halleen's business experience, or lack of it, at the time they determined that they would reject the proposed transfer. However, the notice to Love that the proposed transfer was rejected, dated September 20, 2005, recited in the attachment that the rejection was based on Nissan's belief the transfer was a sham. Marilyn Halleen's lack of experience is evidence tending to prove that the transfer was a sham. To find as a fact that Robert and Chad Halleen were really going to give Marilyn Halleen complete ownership and control over Love would require a suspension of disbelief. Having observed the lackluster performance of Robert and Chad Halleen over a five-year period, Nissan reasonably concluded that Marilyn Halleen was unlikely to ramp up Love's performance. Although Section 320.943(2), Florida Statutes, does not require that a transfer of an equity interest be at arms- length, the fact that a purported transfer is not an arms-length transaction, when considered with other evidence, may tend to demonstrate, as it does in this case, that the purported transfer is a sham. The fact that the purchase price is remarkably below market value does not in every case mean that a purported transfer is a sham. Under the facts of this case, however, the below market sales price tends to prove that the purported transfer is illusory. The evidence, taken as a whole, proves that the purported transfer is an artifice or device designed to avoid the consequences of the poor performance of Love while under the command of Robert and Chad Halleen. Thus the proposed transfer is not a real transfer; it is a sham designed to avoid Judge Davis's Recommended Order upholding the termination. Marilyn Halleen, although a human being separate from her spouse and off-spring, cannot be considered "any other person or persons." She is the alter ego of Robert and Chad Halleen and, should the transfer be approved, the evidence demonstrates she will be a mere agent or tool of the current owners and the inept management of Love will continue. It was not proven that Marilyn Halleen lacked good character as that term is used in Section 320.643(2), Florida Statutes, which governs the transfer of an equity interest in a dealership. The question of whether or not the proposed transfer involved a change in executive management at Love, which might trigger consideration of Section 320.643(1) or 320.644, Florida Statutes, a question advanced by Nissan, at the hearing, and in Nissan's Proposed Recommended Order, need not be addressed for the reasons set forth in paragraph 23, above. In order for those sections to be invoked there must first be a valid transfer.
Recommendation Based upon the Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Highway Safety and Motor Vehicles enter a Final Order stating that pursuant to Nissan's verified Petition for Determination of Invalid Proposed Transfer Pursuant to Section 320.643, Florida Statutes, and Notice of Rejection of Proposed Transfer, no transfer under Section 320.643, Florida Statutes, is proposed and Nissan's rejection of it was proper. Further, the Department of Highway Safety and Motor Vehicles should enter a Final Order dismissing Robert Halleen and Chad Halleen's Petition for Determination of Wrongful Turndown. DONE AND ENTERED this 18th day of January, 2006, in Tallahassee, Leon County, Florida. S HARRY L. HOOPER 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 January, 2006. COPIES FURNISHED: Michael J. Alderman, Esquire Department of Highway Safety and Motor Vehicles Neil Kirkman Building, Room A-432 2900 Apalachee Parkway Tallahassee, Florida 32399-0500 S. Keith Hutto, Esquire Nelson, Mullins, Riley & Scarborough, LLP 1320 Main Street Columbia, South Carolina 29201 Dean Bunch, Esquire Sutherland, Asbill & Brennan, LLP 3600 Maclay Boulevard South, Suite 202 Tallahassee, Florida 32312-1267 John W. Forehand, Esquire Lewis, Longman & Walker, P.A. 125 South Gadsden Street, Suite 300 Tallahassee, Florida 32301-1525 Alex Kurkin, Esquire Pathman Lewis, LLP One Biscayne Tower, Suite 2400 Two South Biscayne Boulevard Miami, Florida 33131 Carl A. Ford, Director Division of Motor Vehicles Department of Highway Safety and Motor Vehicles Neil Kirkman Building, Room B-439 Tallahassee, Florida 32399-0600 Enoch Jon Whitney, General Counsel Department of Highway Safety and Motor Vehicles Neil Kirkman Building 2900 Apalachee Parkway Tallahassee, Florida 32399-1701
The Issue Pursuant to Subsection 320.641(3), Florida Statutes (2006),1 the issues in the case are whether Nissan North America, Inc.'s (Respondent), proposed termination of the dealer agreement with Classic Nissan, Inc. (Petitioner), was clearly permitted by the franchise agreement, undertaken in good faith, undertaken for good cause, and based on material and substantial breach of the dealer agreement; and whether the grounds relied upon for termination have been applied in a uniform and consistent manner.
Findings Of Fact Pursuant to definitions set forth at Section 320.60, Florida Statutes, the Petitioner is a "motor vehicle dealer" and the Respondent is a "licensee." In 1997, the Petitioner and the Respondent entered into an agreement whereby the Petitioner took control of an already- existing Nissan dealership located in Orlando, Florida. In 1999, the Petitioner and the Respondent entered into a Dealer Sales and Service Agreement (Dealer Agreement), which is a "franchise agreement" as defined at Subsection 320.60(1), Florida Statutes. The Respondent's proposed termination of the 1999 Dealer Agreement is at issue in this proceeding. At all times material to this case, the dealership has been owned by Classic Holding Company. Classic Holding Company is owned by four members of the Holler family. Christopher A. Holler is identified in the Dealer Agreement as the principal owner and the executive manager of the dealership. The family owns a number of other dealerships, representing a variety of auto manufacturers. The Respondent does not sell cars at retail to individual purchasers. Standard Provision Section 3.A. of the Dealer Agreement requires that the Petitioner "actively and effectively promote" vehicle sales to individual retail purchasers. Standard Provision Section 3.B. of the Dealer Agreement permits the Respondent to develop and select the criteria by which sales are measured, as long as the measurement criteria is reasonable. Standard Provision Section 12.B.1.a. of the Dealer Agreement permits the Respondent to terminate a dealership when a dealer fails to substantially meet its vehicle sales obligation. The Dealer Agreement includes examples of various criteria that may be used to measure dealer performance. Specifically included among the examples is the calculation of a dealer's "sales penetration" within a defined geographic "Primary Market Area" (PMA) around the dealership as compared to other local and regional dealers. Sales penetration is calculated by dividing a dealer's total new vehicle sales by the number of competitive new vehicles registered in the dealer’s PMA. Data related to vehicle registration was compiled by R. L. Polk (Polk), a nationally recognized organization commonly relied upon in the auto industry for such information. There was no evidence offered to suggest the Polk data was incorrect. The dealer's sales penetration is compared to Nissan's regional sales penetration to determine the dealer's sales performance as measured against other Nissan dealer's in the region. A dealer performing at 100 percent of the regional average is performing at an "average" level. Otherwise stated, an average dealer is performing at a "C" level. The use of sales penetration calculations as a measurement of dealer performance is common in the automotive industry. The Respondent has used sales penetration as a measurement of dealer sales performance for more than 20 years. The Respondent's use of sales penetration as a measurement of dealer performance was reasonable or was permitted by the specific terms of the Dealer Agreement. The Respondent's use of the sales penetration measurements was widely communicated to dealers, who were advised on a routine basis as to the performance of their dealerships compared to local dealers and on a regional basis. The Petitioner knew, or should have known, that sales penetration was being used to measure the Petitioner's sales performance. There was no credible evidence presented at the hearing that the Respondent calculated sales penetration in order to disadvantage the Petitioner relative to other Nissan dealers in the region. At the hearing, the Petitioner suggested alternative standards by which sales performance should be reviewed, including consideration of total sales volume. The use of sales volume to measure retail effectiveness would penalize dealerships in smaller markets and fail to reflect the market opportunity available to each dealer. There was no credible evidence presented at the hearing that total sales volume more accurately measured the Petitioner's sales performance than did sales penetration. The Petitioner suggested that the use of sales penetration to substantiate the proposed termination of the Dealer Agreement at issue in this case was unreasonable and unfair because approximately half of Nissan's dealerships will be performing below 100 percent of the regional average at any given time, yet the Petitioner has not proposed termination of dealership agreements with half of its dealer network; however, the proposed termination at issue in this case is not based merely on the Petitioner's sales penetration. In 2002, the Petitioner's sales penetration was 110.5 percent, well above the regional average. At that time, the Respondent was preparing to introduce a number of new vehicles to the market. Some of the new vehicles were revisions of previous models, while others were intended to compete with products against which Nissan had not previously competed. Nissan representatives believed that the new models would substantially expand sales opportunities for its dealerships, and they encouraged their dealer network to prepare for the new environment. Some dealers responded by increasing staff levels and modernizing, or constructing new facilities. The Petitioner failed to take any substantive action to prepare for the new model lineup. Beginning in 2003, and continuing throughout the relevant period of this proceeding, the Petitioner's regional sales penetration went into decline. From 2002 to 2003, the Petitioner's annualized sales penetration fell more than 30 points to 85.13 in 2003. The Petitioner's sales penetration for 2004 was 65.08 percent. The Petitioner's sales penetration for the first quarter of 2005 was 61.78 percent. Following the introduction of the new models and during the relevant period of this proceeding, regional Nissan sales increased by about 40 percent. By 2004, the average Nissan dealer in the Petitioner's region had a sales penetration of 108.8 percent of the regional average. Through the first quarter of 2005, the average dealer in the region had a sales penetration of 108.6 percent of the regional average. Compared to all other Florida Nissan dealers during the relevant period of this proceeding, the Petitioner was ranked, at its best, 54th of the 57 Florida Nissan dealerships and was ranked lowest in the state by January 2005. Every Florida Nissan dealership, other than the Petitioner, sold more new cars in 2004 than in 2002. The Petitioner sold 200 fewer vehicles in 2004 than it had two years earlier. The three other Orlando-area Nissan dealers experienced significant sales growth at the same time the Petitioner's performance declined. The Petitioner has suggested that the Respondent failed to provide the information to appropriate management of the dealership. The Dealer Agreement indicated that Christopher A. Holler was the executive manager of the dealership; however, his address was located in Winter Park, Florida, and he did not maintain an office in the dealership. The Respondent's representatives most often met with managers at the dealership, who testified that they communicated with Mr. Holler. On several occasions as set forth herein, Nissan representatives met with Mr. Holler for discussions and corresponded with him. There was no credible evidence presented at the hearing that the Petitioner was unaware that its sales penetration results were declining or that the Petitioner was unaware that the Respondent was concerned with the severity of the decline. The Respondent communicated with the Petitioner on a routine basis as it did with all dealers. As the Petitioner's sales performance declined, the Respondent communicated the monthly sales report information to the Petitioner, and the topic of declining sales was the subject of a continuing series of discussions between the parties. In February 2003, Tim Pierson, the Respondent's district operations manager (DOM), met with the Petitioner's on- site manager, John Sekula, and discussed the dealership's declining sales penetration. Mr. Sekula was subsequently transferred by the ownership group to another auto manufacturer's dealership. In August 2003, Mr. Pierson met with the Petitioner's new manager, Darren Hutchinson, as well as with a representative from the ownership group, to discuss the continuing decline in sales penetration, as well as an alleged undercapitalization of the dealership and the lack of an on-site executive manager with authority to control dealership operations. On October 1, 2003, the Respondent issued a Notice of Default (NOD) charging that the Petitioner was in default of the Dealer Agreement for the failure to "retain a qualified executive manager" and insufficient capitalization of the dealership. In December 2003, Mr. Pierson met with Christopher A. Holler to discuss the dealership's problems. By the time of the meeting, Mr. Hutchinson had been designated as the executive manager, although Mr. Hutchinson's decision-making authority does not appear to have extended to financial operations. During that meeting, based on the Petitioner's failure to meet the capitalization requirements and respond to the deterioration in sales, Mr. Pierson inquired as to whether the Petitioner was interested in selling the dealership, but Mr. Pierson testified without contradiction that Mr. Holler responded "no." Mr. Hutchinson explained at the hearing that he asked the question because there was little apparent effort being made to address the deficiencies at the dealership, and he was attempting to ascertain the Petitioner's intentions. Mr. Hutchinson was directed to prepare a plan to address the Petitioner's customer service rating, which had fallen to the lowest in the area. Based on an apparent belief that the ownership group was going to remedy the Respondent's concerns about capitalization, the Respondent extended the compliance deadline set forth in the NOD, but the extended deadline passed without any alteration of the dealership's capitalization. A letter to the Respondent dated March 25, 2004, allegedly from Mr. Holler, noted that sales and customer service scores had improved; however, there was no credible evidence presented during the hearing to support the claimed improvement in either sales or customer service. The letter also stated that the capitalization of the dealership would be increased in April 2004 and that new vehicle orders were being reduced. On March 19, 2004, Mr. Pierson spoke with Mr. Holler and believed, based on the conversation, that a meeting would be scheduled to discuss the sales and capitalization issues. In anticipation of the meeting, Pierson sent the sales penetration reports directly to Mr. Holler, but the meeting did not occur. There was no additional capital placed into the dealership during April 2004. In April 2004, Andy Delbrueck, a new DOM for the area, met with Mr. Hutchinson to discuss the continuing decline in sales penetration through the end of March 2004. Other dealers in the area were experiencing increased sales at this time, but the Petitioner's regional sales penetration continued to decline and was below the region for almost all Nissan models. Mr. Hutchinson advised that he was hiring additional staff and had sufficient advertising funds to return the regional sales penetration averages by June. In early May 2004, Mr. Delbrueck and a Nissan vice president, Patrick Doody, sent a letter about the Petitioner's declining sales performance to Mr. Holler and requested that the Petitioner prepare a plan to address the problem. On May 18, 2004, Mr. Delbrueck again met with Mr. Hutchinson and discussed the decline in sales performance and customer service scores, as well as the issue of the dealership's undercapitalization. A May 25, 2004, letter to the Respondent, allegedly from Mr. Holler, noted that the dealership's sales penetration had improved, that additional staff had been hired, and that the Petitioner anticipated reaching or exceeding the regional sales penetration average by the end of the third quarter of 2004. The Petitioner never reached regional sales penetration averages following this letter, and, at the time it was written, there had been no material improvement in the dealership's sales penetration. On June 17, 2004, Mr. Delbrueck met with Mr. Holler to discuss the continuing decline in the Petitioner's sales performance. Mr. Delbrueck believed, based on the meeting, that Mr. Holler was aware of the problem and would make the changes necessary to improve sales, including employing additional sales staff. On July 7, 2004, the Respondent issued an Amended NOD, citing the continuing decline in the Petitioner's sales performance as grounds for the default, in addition to the previous concerns related to capitalization that were identified in the earlier NOD. The Amended NOD established a deadline of November 29, 2004, by which time the cited deficiencies were to be remedied. One day later, Mr. Delbrueck met with Mr. Hutchinson, discussed the Amended NOD, and made various suggestions as to how the Petitioner could improve the dealership's sales, including marketing and staffing changes. Mr. Delbrueck also offered to send in a trained Nissan representative, William Hayes, to review dealership operations and provide suggestions to improve conditions at the facility and ultimately to increase car sales. Mr. Hutchinson accepted the offer. A letter to the Respondent dated July 23, 2004, allegedly from Christopher A. Holler, noted that staffing levels had increased as had sales for the month of July; however, there was no credible evidence presented at the hearing that any substantive increase in staffing had occurred or that the Petitioner's sales penetration had increased. The letter contained no specific plan for remedying the problems cited in the Amended NOD. In late July 2004, a Nissan training representative, William Hayes, performed a focused review of the Petitioner's operations and provided a list of specific recommendations intended to improve the Petitioner's sales performance. He met with Mr. Hutchinson at the dealership and discussed the list of recommendations. At that time, Mr. Hutchinson stated that he believed the recommendations were useful. On September 10, 2004, Nissan Vice President Doody sent another letter to Mr. Holler referencing the Petitioner's declining sales performance and, again, requesting that the Petitioner prepare a plan to address the issue. A September 30, 2004, letter to the Respondent, allegedly from Mr. Holler, noted that staffing levels had been increased, a new executive manager (Mr. Hutchinson) had been hired, advertising funds had been increased, and customer service scores had improved. However, by that time, Mr. Hutchinson had been employed at the dealership since at least August of 2003, and there was no credible evidence presented at the hearing that staffing levels, advertising funds, or customer satisfaction scores had been materially increased. On October 18, 2004, Nissan Vice President Doody, sent another letter to Mr. Holler about the Petitioner's declining sales performance, noting that whatever efforts had been made by the Petitioner to improve sales had been unsuccessful. Thereafter, Mr. Doody arranged a meeting with Mr. Delbrueck, Mr. Holler, and another member of the Holler family to discuss the deteriorating situation at the dealership and between the parties. The meeting occurred on October 26, 2004, during which the Nissan representatives addressed the issues including under- capitalization, declining sales, and customer satisfaction scores. The Nissan representatives noted the Petitioner's failure to respond to any of the continuing problems and advised the Petitioner that, if the situation did not improve, the Respondent could initiate proceedings to terminate the Dealer Agreement. At the hearing, the Nissan representatives testified that the Holler family members in attendance at the October 26th meeting had no response during the discussion and offered no specific plan to resolve the situation. The Petitioner presented no credible evidence to the contrary. Shortly after the meeting, and in the absence of any substantive attempt by the Petitioner to resolve the concerns set forth in the NODs, the Nissan representatives decided to pursue termination of the Dealer Agreement if the Petitioner's sales penetration continued to be unsatisfactory. The Petitioner's regional sales penetration as of November 2004 was 65.69 percent. The year-end sales penetration for 2004 was 64.5 percent of regional average. On January 7, 2005, Mr. Delbrueck met with Mr. Hutchinson to discuss the dealership's sales performance. By that time, more than a year had passed since Mr. Hutchinson's designation as executive manager, yet the dealership's sales performance had not improved. Mr. Delbrueck inquired as to whether the Petitioner would be interested in using an additional Nissan resource (the EDGE program) designed to identify specific deficiencies in the sales process. The EDGE program included an extensive review of the sales process from the customer perspective, including a six-month survey period and four hidden camera "mystery shopper" visits. There was a charge to dealers participating in the EDGE program. Mr. Hutchinson told Mr. Delbrueck that he would have to discuss the program with the owners. The Petitioner subsequently chose not to participate. During the January 7th meeting, Mr. Delbrueck also encouraged Mr. Hutchinson to hire additional sales staff. At the hearing, Mr. Hutchinson testified that at the time of this meeting, he had been "building a sales force" yet by March of 2005, the Petitioner's full-time sales staff was approximately one-half of what it had been in 2003. On February 11, 2005, Mr. Delbrueck met with Mr. Hutchinson and Holler family members to follow up on the NOD and the October 26th meeting, but made no progress towards resolving the problems. On February 23, 2005, Mr. Delbrueck and Mr. Hayes met with Mr. Hutchinson to follow up on the recommendations Mr. Hayes made in July 2004. Mr. Hutchinson continued to state that the recommendations were useful, but very few had been implemented, and he offered no plausible explanation for the delay in implementing others. On February 24, 2005, the Respondent issued a Notice of Termination (NOT) of the Dealer Agreement that set forth the continuing decline in sales penetration as grounds for the action, as well as the alleged undercapitalization. At some point in early 2005, the Petitioner increased the capitalization of the dealership and corrected the deficiency, although it was implied during the hearing that the correction was temporary and that the increased capital was subsequently withdrawn from the dealership. In any event, the Respondent issued a Superceding NOT on April 6, 2005, wherein capitalization was deleted as a specific ground for the proposed termination. The Petitioner's January 2005 sales penetration was 49.3 percent of regional average, the lowest of any Nissan dealer in the State of Florida. Consumers typically shop various automobile brands, and a consumer dissatisfied with a dealer of one brand will generally shop dealers of competing brands located in the same vicinity, in order to purchase a vehicle at a convenient dealership for ease of obtaining vehicle service. The Respondent asserted that it was harmed by the Petitioner's deteriorating sales performance because Nissan sales were "lost" to other manufacturers due to the Petitioner's failure to appropriately market the Nissan vehicles. The Petitioner asserted that because Nissan's overall sales performance in the Petitioner's PMA was average, no Nissan sales were lost. The Respondent offered testimony suggesting that sales lost to Nissan may not have been lost to the Holler ownership group because the group also owned nearby Mazda and Honda dealerships. The evidence regarding the calculation of lost Nissan sales was sufficiently persuasive to establish that Nissan was harmed by the Petitioner's inadequate vehicle sales volume and by the Petitioner's failure to meet its obligation to "actively and effective promote" the sale of Nissan vehicles to individual purchasers as required by the Dealer Agreement. The number of sales lost is the difference between what a specific dealer, who met regional sales averages, should have sold compared to what the dealer actually sold. In 2003, the Respondent lost 185 sales based on the Petitioner's poor sales performance. In 2004, the Respondent lost 610 sales based on the Petitioner's poor sales performance, 200 more lost sales than from the next poorest performing Nissan dealer in Florida. The parties offered competing theories for the Petitioner's declining performance, which are addressed separately herein. The greater weight of the evidence presented at the hearing establishes that as set forth herein, the Respondent's analysis of the causes underlying the Petitioner's poor sales performance was persuasive and is accepted. The Respondent asserted that the sales decline was caused by operational problems, including an inadequate facility, inadequate capitalization, poor management, ineffective advertising, inadequate sales staff, and poor customer service. Competing dealerships in the area have constructed improved or new facilities. Customers are more inclined to shop for vehicles at modern dealerships. Upgraded dealerships typically experience increased customer traffic and sales growth. The Petitioner's facility is old and in disrepair. Some dealership employees referred to the facility as the "Pizza Hut" in recognition of the sales building's apparent resemblance to the shape of the restaurant. Nissan representatives discussed the condition of the facility with the Petitioner throughout the period at issue in this proceeding. When the Respondent began preparing for the introduction of new models in 2002, the Respondent began to encourage dealerships including the Petitioner, to participate in the "Nissan Retail Environment Design Initiative" (NREDI), a facility-improvement program. Apparently, the Petitioner was initially interested in the program, and, following a design consultation with the Respondent's architectural consultants, plans for proposed improvements to the Petitioner's facility were created. At the time, the Respondent was encouraging dealers to improve facilities, the Respondent had a specified amount of funding available to assist dealers who chose to participate in the NREDI program, and there were more dealers interested than funds were available. Although funds were initially reserved for the Petitioner's use, the Petitioner declined in June of 2003 to participate in the program, and the funds were reallocated to other dealerships. The Respondent implied that one of the reasons the Petitioner did not upgrade the dealership facility was a lack of capitalization. The allegedly inadequate capitalization of the dealership was the subject of continuing discussions between the Petitioner and the Respondent for an extended period of time; however, inadequate capitalization was specifically deleted from the grounds for termination set forth in the NOT at issue in this proceeding. Although the evidence indicates that lack of capitalization can limit a dealer's ability to respond to a multitude of problems at a dealership, the evidence is insufficient to establish in this case that an alleged lack of capitalization was the cause for the dealership's failure to upgrade its facility. In a letter to the Respondent dated June 30, 2003, the Petitioner stated only that it was "not feasible" to proceed and indicated an intention only "to proceed in the future," but offered no additional explanation for the lack of feasibility. Similarly, it is not possible, based on the evidence presented during the hearing, to find that Petitioner's failure to respond to the deteriorating operations at the dealership was due to a lack of financial resources. Daily operations at the dealership were hampered by the lack of appropriate management at the dealership location. Although Mr. Holler was identified in the Dealer Agreement as the principal owner and the executive manager of the dealership, his address was located in Winter Park, Florida, and there was no credible evidence presented that he managed the operation on a daily basis. As sales deteriorated, the Respondent began to insist that the Petitioner designate someone located on-site at the facility as executive manager with full control over the day-to- day operations of the dealership. In June 2003, Mr. Sekula was appointed as executive manager, but his authority was limited and his decisions required approval of the ownership group. At the hearing, Mr. Sekula acknowledged that the ownership group was bureaucratic. Shortly after his appointment, he was transferred by the ownership group to another of their competing dealerships. Several months later, Mr. Hutchinson was appointed as executive manager. There was no credible evidence presented to establish that Mr. Hutchinson ran the fiscal operations of the dealership. He prepared budgets for various expenditures and submitted them to the ownership group. The ownership group apparently controlled the "purse strings" of the dealership. There was no credible evidence presented as to the decision- making process within the group; however, decisions on matters such as the dealership's advertising budget required approval of the ownership group. The failure to provide appropriate on-site management can delay routine decisions and negatively affect the ability to manage and motivate sales staff. For example, when Nissan offered Mr. Hutchinson the opportunity to participate in the Nissan EDGE sales program, Mr. Hutchinson was initially unable to respond, because he lacked the ability to commit the financial resources to pay for the program. Mr. Hutchinson testified that the ownership group routinely approved his advertising budget requests. As the Petitioner's sales declined, so did advertising expenditures, from $694,107 in 2002 to $534,289 in 2004. The Petitioner's declining advertising expenditures were a contributing factor in deteriorating sales. The Petitioner reduced its total advertising budget while the Orlando market was growing, and the Petitioner's sales penetration declined while competing dealerships sales increased. Additionally, the Petitioner did not monitor the effectiveness of its advertising. The Petitioner's advertising was implemented through "Central Florida Marketing," a separate company owned by the Holler organization. There is no evidence that either the Petitioner or Central Florida Marketing monitored the effectiveness of the advertising. A substantial number of Nissan buyers within the Petitioner's PMA purchased vehicles from other dealerships, suggesting that the advertising failed to attract buyers to the Petitioner's dealership. Only eight percent of the Petitioner's customers acknowledged seeing the Petitioner's advertising, whereas about 20 percent of car shoppers in the Orlando area admit being influenced by dealer advertising. The Respondent asserted that the Petitioner failed to have sufficient sales staff to handle the increased customer traffic precipitated by the introduction of new Nissan models in 2002 and 2003. The Respondent offered evidence that the average vehicle salesperson sells eight to ten cars monthly, five to six of which are new cars and that, based on sales expectations, the Petitioner's sales force could not sell enough cars to meet the regional averages. Although the evidence establishes that the Petitioner cut sales staff as sales declined at the dealership, there is no credible evidence that customers at the Petitioner's facility were not served. The assertion relies upon an assumption that the Petitioner experienced increased sales traffic upon the introduction of new models and that the sales staff was inadequate to sufficiently service the increased traffic. The evidence failed to establish that the Petitioner experienced an increase in sales traffic such that sales were lost because staff was unavailable to assist customers. However, the Petitioner's sales staff failed to take advantage of customer leads provided to the dealership by the Respondent. The Respondent gathered contact information from various sources including persons who requested vehicle information from the Respondent's internet site, as well as the names of lease customers whose lease terms were expiring. The contact information was provided to dealers without charge through the Respondent's online dealer portal. The Petitioner rarely accessed the data, and it is, therefore, logical to presume that the leads resulted in few closed sales. The Petitioner's customer satisfaction scores also declined during the time period relevant to this proceeding. Poor customer service can eventually influence sales as negative customer "word-of-mouth" dampens the interest of other prospective customers. The Respondent monitored the customer opinions of dealer operations through a survey process, which resulted in "Customer Service Index" (CSI) scores. Prior to 2003, the Petitioner's CSI scores had been satisfactory, and then CSI scores began to decline. By the close of 2003, the CSI scores were substantially below regional scores, and the sales survey score was the lowest in the Petitioner's district. Although the Petitioner asserted on several occasions that CSI scores were increasing, the evidence established that only the March 2004 CSI scores improved and that no other material improvement occurred during the time period relevant to this proceeding. The Petitioner asserted at the hearing that the sales performance decline was caused by a lack of vehicle inventory, the alteration of the Petitioner's PMA, a lack of available financing from Nissan Motors Acceptance Corporation (NMAC), hurricanes, improper advertising by competing dealers, and the death of Roger Holler, Jr. The Petitioner also asserted that this termination action is being prosecuted by the Respondent because the Petitioner declined to participate in the NREDI dealer-facility upgrade program and declined to sell the Respondent's extended service plan product. A number of the suggested causes offered by the Petitioner during the hearing were omitted from the Petitioner's Proposed Recommended Order, but nonetheless are addressed herein. The Petitioner asserted that the Respondent failed to make available marketable inventory sufficient for the Petitioner to meet sales penetration averages. The evidence failed to support the assertion. Nissan vehicles were distributed according to an allocation system that reflected dealer sales and inventory. The Respondent used a "two-pass" allocation system to distribute 90 percent of each month's vehicle production. The remaining 10 percent were reserved for allocation by Nissan market representatives. Simply stated, dealers earned new vehicles to sell by selling the vehicles they had. New vehicle allocations were based upon each dealer's "days' supply" of cars. The calculation of days' supply is essentially based on the number of vehicles a dealer had available on the lot and the number of vehicles a dealer sold in each month. Through the allocation system, a dealership that failed to sell cars and lower its days' supply would be allocated fewer cars during the following month. More vehicles were made available to dealers with low days' supplies than were available to dealers with higher supplies. It is clearly reasonable for the Respondent to provide a greater supply of vehicles to the dealers who sell more cars. At some point during the period relevant to this proceeding, Nissan removed consideration of sales history from the days' supply-based allocation system calculation; however, there was no credible evidence presented to establish that the elimination of the sales history component from the calculation reduced the vehicle allocation available to the Petitioner. The Respondent applied the same allocation system to all of its dealerships, including the Petitioner. There is no evidence that the Respondent manipulated the allocation system to deny any vehicles to the Petitioner. The Respondent provided current inventory and allocation information to all of its dealerships, including the Petitioner, through a computerized database system. The Petitioner was responsible for managing vehicle inventory and for utilizing the allocation system to acquire cars to sell. Although the Petitioner asserted that the decline in sales was related to a lack of vehicle inventory, there was no evidence that the Petitioner's inventory declined during the period relevant to this proceeding. In fact, the evidence established that the Petitioner's inventory actually increased from 150 vehicles in early 2003 to 300 vehicles in early 2004, at which time the Petitioner reduced vehicle orders and the inventory began to decline. The Petitioner also asserted that it was provided vehicles for sale that were undesirable to the Petitioner's customers, due to expensive or excessive options packages. There was no credible evidence that the Petitioner's sales declines were related to an inventory of undesirable vehicles. Further, there was no evidence that the decline in sales penetration was related to poor supply of any specific vehicle model. Other than two truck models, the Petitioner's sales penetration decline occurred across the full range of Nissan vehicles offered for sale. Every Nissan dealer had the ability to exercise significant control (including color and option package choices) over most of the inventory acquired during the "first pass" allocation. Any inventory deficiencies that may have existed were the result of the Petitioner's mismanagement of inventory. Mr. Hutchinson did not understand the vehicle allocation system or its relationship to the days' supply calculation. The Petitioner routinely declined to order units of Nissan's apparently most marketable vehicles during the allocation process. During 2003, the Petitioner declined 137 vehicles from the "first pass" allocation, including 18 Sentras and 56 Altimas, and declined 225 vehicles from the "second pass" allocation, including 59 Sentras and 59 Altimas. During the first half of 2004, the Petitioner declined 58 vehicles from the "first pass" allocation and 42 vehicles from the "second pass" allocation. During the hearing, one of the Petitioner's witnesses generally asserted that the Respondent's turndown records were erroneous; however, the witness was unable to identify any errors of significance, and the testimony of the witness was disregarded. After the two-pass allocation process was completed, there were usually some vehicles remaining for distribution to dealers. Nissan assigned responsibility to DOMs to market these units to dealers. The DOMs used the days' supply calculation to prioritize the order in which they contacted dealers, although the vehicles were available to any dealer. There is no evidence that any DOM manipulated the days' supply-based prioritization of vehicles for denying the Petitioner the opportunity to obtain vehicles to sell. Any vehicles remaining available after the DOM attempts to distribute the vehicles were identified as "Additional Vehicle Requests" (AVR) and were made available to all dealers simultaneously. Dealerships were notified of such availability by simultaneous facsimile transmission or through the Nissan computerized database. There was no evidence that the Petitioner was denied an opportunity to obtain AVR vehicles, and in fact, the Petitioner obtained vehicles through the AVR system. The Petitioner asserted that the Nissan practice of reserving 10 percent of each month's production for allocation by market representatives rewarded some dealers and punished others. Market representative allocations are standard in the industry, and such vehicles are provided to dealerships for various reasons. Nissan market representative allocations were used to supply extra cars to newly opened dealerships or in situations where a dealership was sold to new ownership. Nissan market representative allocations were also provided to dealers who participated in the NREDI facility upgrade program. The provision of additional vehicles by market representatives to new or expanded sales facilities was reasonable because the standard allocation system would not reflect the actual sales capacity of the facility. The Petitioner presented no evidence that the Respondent, or any of its market representatives, manipulated the 10 percent allocation to unfairly reward any of the Petitioner's competitors or to punish the Respondent for not participating in various corporate programs. Prior to 2001, the Respondent had a program of providing additional vehicles to under-performing dealers in an apparent effort to increase sales by increasing inventory; however, the program did not cause an increase in sales and actually resulted in dealers being burdened with excessive unsold inventory and increased floor plan financing costs. The Respondent eliminated the program in 2001, and there is no evidence that any dealership was provided vehicles through this program during the time period relevant to this proceeding. There is no evidence that the Respondent eliminated the program for the purpose of reducing the vehicles allocated or otherwise provided to the Petitioner. The Petitioner asserted that the Respondent altered the Petitioner's assigned PMA in March 2004 and that the alteration negatively affected the Petitioner's sales penetration calculation because the Petitioner's area of sales responsibility changed. Prior to March 2004, the Petitioner's PMA was calculated using information reported by the 1990 United States Census. After completion of the 2000 Census, the Respondent evaluated every Nissan dealer's PMA and made alterations based upon population changes as reflected within the Census. Standard Provision Section 3.A. of the Dealer Agreement provides that the Respondent "may, in its reasonable discretion, change the Dealer's Primary Market Area from time to time." There was no credible evidence presented to establish that the 2000 PMA was invalid or was improperly designated. There was no evidence that the Respondent's evaluation of the Petitioner's PMA was different from the evaluation of every other PMA in the United States. There was no evidence that the Respondent evaluated or altered the Petitioner's PMA with the intent to negatively affect the Petitioner's ability to sell vehicles or to meet regional sales penetration averages. There was no credible evidence that the 2000 PMA adversely affected the dealership or that the Petitioner's declining sales penetration was related to the change in the PMA. The alteration of the PMA did not sufficiently affect the demographics of the Petitioner's market to account for the decline in sales penetration. Recalculating the Petitioner's sales penetration under the prior PMA did not markedly improve the Petitioner's sales penetration. The Petitioner suggested that the 2000 PMA revision was an impermissible modification or replacement of the Dealer Agreement, but no credible evidence was offered to support the assertion. There was no evidence that the Petitioner did not receive proper notice of the 2000 PMA. At the hearing, the Petitioner implied that the Respondent caused a decline in sales by refusing to make Nissan Motor Acceptance Corporation (NMAC) financing available to the Petitioner's buyers. NMAC is a finance company affiliated with, but separate from, the Respondent. NMAC provides a variety of financing options to dealers and Nissan vehicle purchasers. NMAC relies in lending decisions, as do most lenders, on a "Beacon score" which reflects the relative creditworthiness of a customer's application to finance the purchase of a car. Vehicle financing applications are grouped into four general "tiers" based on Beacon scores. Various interest rates are offered to customers based on Beacon scores. The Petitioner offered data comparing the annual number of NMAC-approved applications submitted in each tier by the Petitioner on behalf of the Petitioner's customers to suggest that the decline in the Petitioner's sales indicated a decision by NMAC to decrease the availability of NMAC credit to the Petitioner's customers. There was no evidence that NMAC treated the Petitioner's customers differently than the customers of competing dealerships or that NMAC-financed buyers received preferential interest rates based upon the dealership from which vehicles were purchased. There was no evidence that the Respondent exercised any control over individual financing decisions made by NMAC. There was no evidence that the Respondent manipulated, or had the ability to manipulate, the availability of NMAC financing for the purpose of negatively affecting the Petitioner's ability to sell vehicles. A number of hurricanes passed through the central Florida region in August and September of 2004. The Petitioner asserted that the dealership's physical plant was damaged by the storms, and that the hurricane-related economic impact on area consumers caused, at least in part, the decline in sales. The evidence failed to establish that the Petitioner's physical plant sustained significant hurricane damage to the extent of preventing vehicle sales from occurring. None of the Petitioner's vehicle inventory sustained hurricane- related damage. There was no evidence presented to indicate that the Petitioner's customers experienced a more significant economic impact than did the customers of competing dealers in the area. There was no credible evidence that the hurricanes had any material impact on the Petitioner's sales penetration. The Petitioner's sales penetration immediately prior to the hurricanes was 62.8 percent. The Petitioner's sales penetration in August 2004 was 61.6 percent, in September was 61.1 percent, and in October was 62.3 percent. Generally, within 30 to 45 days after a hurricane, customers with damaged vehicles use insurance proceeds to purchase new vehicles. The Petitioner's sales volume increased at this time; although because other dealers in the region also experienced increased sales, there was no change to the Petitioner's sales penetration calculation. The Petitioner asserted that improper advertising of "double rebates" by competing dealers caused declining sales, and offered evidence in the form of newspaper advertisements in support of the assertion; however, the Petitioner's own advertising indicated the availability of such rebates on occasion. There was no evidence presented to establish that the Respondent was responsible for creating or approving advertisements for dealerships. The Respondent has a program whereby dealers who meet certain advertising guidelines can obtain funds to defray advertising costs, but the program is voluntary. The Respondent does not regulate vehicle advertising or retail pricing. There was no evidence that the Petitioner reported any allegedly misleading or illegal advertising with any law enforcement agency having jurisdiction over false advertising or unfair trade practices. Mr. Hutchinson testified that the death of Roger Holler, Jr., in February 2004, negatively affected sales at the dealership, but there was no evidence that Roger Holler, Jr., had any role in managing or operating the dealership. The Petitioner's sales decline commenced prior to his death and continued thereafter. The evidence failed to establish that the death had any impact on the operation of the dealership or the Petitioner's sales performance. The Petitioner asserted that the Respondent's effort to terminate the Dealer Agreement was an attempt to punish the Petitioner for declining to participate in the NREDI program and offered a chronology of events intended to imply that the Respondent's actions in this case were a deliberate plan to force the Petitioner to either build a new facility or sell the dealership. The assertion is speculative and unsupported by credible evidence. During the time period relevant to this proceeding, only one of the four Orlando-area Nissan dealers agreed to participate in the NREDI program. Of the four dealerships, three experienced increased sales activity during the period relevant to this proceeding. The Petitioner was the only one of the four dealerships to experience a decline in sales penetration during this period. The Respondent has taken no action against the two other dealerships that declined to participate in the NREDI program. There was no credible evidence that the Respondent has taken any punitive action against any dealership solely based on a dealership's decision not to participate in the NREDI program. The Petitioner asserted that the Respondent's actions in this case were intended to punish the Petitioner for not selling the Respondent's extended service contract (known as "Security Plus") and for selling a product owned by the Petitioner, but there was no evidence supporting the assertion. A substantial number of dealers in the region did not sell the Security Plus product to new car buyers. There was no evidence that the Respondent has penalized any dealer, including the Petitioner, for refusing to sell the Nissan Security Plus product. During the hearing, the Petitioner identified a number of other troubled Nissan dealerships, ostensibly to establish that other dealerships similarly situated to the Petitioner had not been the subject of Dealer Agreement termination proceedings and that the Respondent had failed to enforce the Dealer Agreement termination provisions fairly. A number of the dealerships cited by the Petitioner are outside the State of Florida and are immaterial to this proceeding. The Dealer Agreement provides for termination of an agreement if the dealer materially and substantially breaches the agreement. The Dealer Agreement does not require termination of every dealership that fails to achieve average regional sales penetration. Termination of a Dealer Agreement because of sales performance requires a dealer-specific analysis that includes consideration of the factors underlying poor sales and consideration of conditions that may warrant delaying termination proceedings. As to the other Florida Nissan dealers cited by the Petitioner, many had higher sales penetration levels than did the Respondent. When compared to the Florida dealerships, the magnitude of the Petitioner's sales penetration decline exceeded that of all the other dealerships. Many of the cited dealerships had also initiated changes in management, staffing, and facilities to address sale and service deficiencies. Some of the cited dealers had already shown sales and service-related improvements. One dealership, Love Nissan, had already been terminated, even though its sales penetration had exceeded that of the Petitioner. One dealership cited by the Petitioner was Hampton Nissan, against whom the Respondent had initiated termination proceedings in 2003. Changes to Hampton's PMA based on the 2000 PMA resulted in an increase in the dealership's sales penetration eventually to levels exceeding those of the Petitioner, and Nissan has rescinded the action. There was no evidence that the Hampton Nissan PMA was calculated differently than the Petitioner's PMA, or that either PMA was altered purposefully to affect the dealer's sales penetration results. Other dealerships cited by the Petitioner were being monitored by the Respondent to ascertain whether efforts to improve sales performance succeed. The Respondent may ultimately pursue termination proceedings against underperforming dealerships if sales performance fails to improve. There was no credible evidence that, prior to initiating this termination proceeding, the Respondent failed to consider the facts and circumstances underlying the Petitioner's poor sales and the Petitioner's response to the situation. The Petitioner has experienced a substantial and continuing decline in sales penetration and has failed to respond effectively to the deteriorating situation during the period at issue in this proceeding.
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 dismissing Petitioner's protest and approving the April 6, 2005, Superceding Notice of Termination. DONE AND ENTERED this 20th day of March, 2007, in Tallahassee, Leon County, Florida. S WILLIAM F. QUATTLEBAUM Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 20th day of March, 2007.
The Issue The issues in this case are whether Respondent owes an additional surcharge tax liability on the sale of alcoholic beverages and, if so, how much and what penalties should be imposed.
Findings Of Fact Respondent is licensed by Petitioner as an alcoholic beverage vendor. Since January 1982, Respondent has held a 4COP license, which permits him to operate a package store, in which beer, wine, and liquor are sold for consumption off premises, and a bar, in which these alcoholic beverages are sold for consumption on the premises. Respondent sells beer, wine, and liquor for consumption on and off premises at a place of business known as Big Still Liquors, which is located at 1042 N. Tamiami Trail, North Ft. Myers. The Legislature introduced the surcharge in 1990. By Form DBR 44-005E, which is called "Election of Surcharge Payment Method and Certified Inventory Report," Respondent elected an accounting method by which to track and report sales of alcoholic beverages subject to the surcharge. On July 9, 1990, Respondent checked the box on the form that states: "I hereby permanently elect to pay future surcharges based upon purchases." The other alternative on the form is the sales method, in which the surcharge is calculated directly from retail sales. The sales method requires that the vendor record at retail the gallonage, as well as sales price. Also, the vendor must distinguish among beer, wine, and liquor sold at retail. Like most vendors, however, Respondent records sales by sales price, not volume. The issues in this case arise out of two factors. First, the surcharge applies to volume of alcoholic beverages, not the sales price or purchase cost. As noted above, Respondent's sales records are expressed in dollars. Second, the surcharge applies to alcoholic beverages sold for consumption on premises, not to package sales. Although purchases from wholesalers can easily be determined in terms of volumes, Respondent purchases all alcoholic beverages through the package store and does not purchase alcoholic beverages separately for the bar. Thus, factual issues arise in determining the volume of beer, wine, and liquor sold through the bar. Even though a vendor elects the purchase method, rather than the sales method, Petitioner must calculate the volume of alcoholic beverages sold at retail. Petitioner has devised a formula for this purpose. The audit in the present case took place at the start of 1993 and covered July 1990 through December 1992. The auditor obtained the invoices of the wholesale distributors that sold beer, wine, and liquor to Respondent during December 1992, January 1993, and February 1993. From these invoices, the auditor determined Respondent's cost of goods sold for these three months. The auditor then estimated the markup on the alcoholic beverages. For liquor, the auditor asked Respondent's counterperson the amount of markup for larger bottles and smaller bottles. The percentage markups were 25 percent and 35 percent, respectively. Recording the sales prices of two smaller items and two larger items, the auditor then calculated the actual markup and found that these estimates were quite accurate. The auditor next averaged the markup to 30 percent. It is unclear whether he attempted to estimate the relative proportion of larger items to smaller items. It is clear that this markup applies to liquor and possibly to wine, but not to beer, where the markup is much less. The auditor then found the breakdown between package store sales and bar sales for December 1992 through February 1993. Expressed as a percentage of total sales, package sales accounted for 51.1 percent, 61.3 percent, and 49.3 percent for the three months, respectively. The auditor averaged these figures and determined that 53.9 percent of all Big Still sales were through the package store. Next, the auditor applied the 53.9 percent factor to the total purchases from wholesale distributors during the 30-month audit period. After a reduction to reflect the 30 percent markup, the auditor calculated the package- store factor, which is deducted from total volume to yield the residual volume of beer, wine, and liquor, which is presumed to have been sold through the bar. The lower the markup, the higher the package-sale factor, which is to the vendor's advantage as the package-sale factor is a deduction because it is not subject to the surcharge. Numerous questions arise in the application of Petitioner's formula in this case. Questions include the reasonableness of the methods of estimating markup and differentiating between package and bar sales. In the absence of records from Respondent, however, Petitioner's approach would prevail. However, Respondent has separately accounted for bar and package store sales for years. Motivated by a desire to reduce employee pilferage, Respondent has required employees to record all transfers of beer, wine, and liquor from the package store to the bar. To ensure compliance, Respondent has also required that all empties be returned to the package store in order to monitor bar sales. Respondent reported and paid the surcharge in accordance with the volumes of alcoholic beverages reflected on its internal records. There is no surcharge deficiency.
Recommendation Based on the foregoing, it is hereby RECOMMENDED that the Department of Business Regulation, Division of Alcoholic Beverages and Tobacco, enter a final order dismissing the Administrative Action against Respondent. ENTERED on November 29, 1994, in Tallahassee, Florida. ROBERT E. MEALE 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 on November 29, 1994. APPENDIX Rulings on Petitioner's Proposed Findings 1-3: adopted or adopted in substance. 4-12: rejected as subordinate. 13-14 (first sentence): rejected as recitation of evidence. 14 (remainder)-15: adopted or adopted in substance. 16-18: rejected as recitation of evidence. 19-25: adopted or adopted in substance; provided, however, Petitioner failed to prove that the result was more accurate than the result produced by Respondent. 26: rejected as recitation of evidence. 27-30: adopted or adopted in substance. 31-34: rejected as recitation of evidence and subordinate. Rulings on Respondent's Proposed Findings 1-2: adopted or adopted in substance. 3: rejected as irrelevant. 4: rejected as repetitious. 5-6: adopted or adopted in substance. 7-8: rejected as irrelevant. 9: adopted or adopted in substance. 10-end: rejected as subordinate, repetitious, recitation of evidence, irrelevant, not findings of fact, and not in compliance with order of hearing officer requiring numbered paragraphs with no more than four sentences per paragraph. COPIES FURNISHED: Jack McRay, General Counsel Department of Professional Regulation 1940 North Monroe Street Tallahassee, FL 32399-0792 Richard D. Courtemanche, Jr. Senior Attorney Department of Business and Professional Regulation Division of Alcoholic Beverages and Tobacco 1940 N. Monroe St. Tallahassee, FL 32399-1007 Harold M. Stevens Harold M. Stevens, P.A. P.O. Drawer 1440 Ft. Myers, FL 33902
The Issue The issues in this case are whether Respondent violated Section 721.11 (4)(a), (h), (j), and (k), Florida Statutes (1995), through misrepresentations in the sale of timeshare estates as further stated in the Notice to Show Cause and, if so, what, if any, penalty should be imposed. (All statutory references are to Florida Statutes (1995) unless otherwise stated.)
Findings Of Fact Petitioner is the state agency responsible for regulating sellers of timeshare estates ("timeshares") within the meaning of Section 721.05 (27) and (28). Respondent is a seller of timeshares and a licensed real estate sales person in Florida with approximately 20 years' experience in timeshares. Petitioner charges in the Notice to Show Cause that Respondent violated Section 721.11 (4)(a), (h), (j), and (k). The Notice to Show Cause charges that Respondent violated the respective statutes by misrepresenting: a fact or creating a false or misleading impression regarding a timeshare plan or promotion; the nature or extent of an incidental benefit, within the meaning of Section 721.05(17); the conditions of exchange; and the availability of a resale or rental program. Vocational Corporation ("Vocational") developed a timeshare resort in Orlando, Florida, known as Club Sevilla ("Sevilla"). Vocational hired Respondent in July 1995 as Vocational's sales manager responsible for the sale of all timeshares at Sevilla. Vocational agreed to hire Respondent as an independent contractor and to pay Respondent up to 40 percent commission on cash sales and four to six percent commission on other sales. In 1996, Respondent earned between $380,000 and $457,000 selling timeshares for Sevilla. Respondent employed four or five salespersons to assist him in the sale of Sevilla timeshares. Some of those salespersons testified at the hearing. During the time Respondent sold Sevilla timeshares, Respondent was the president and director of MPW Marketing, Inc. ("MPW"). Respondent's wife was the secretary and treasurer of MPW. MPW employed at least one sales person to sell timeshares at Sevilla. MPW was dissolved in 1997 for failure to file its annual report. As sales manager for Vocational and as an independent contractor, Respondent was solely responsible for the design and content of the salesprogram used to sell timeshares at Sevilla and for the conduct of salespersons employed by Respondent and MPW. When Vocational learned the particulars of Respondent's sales program through complaints from purchasers, Vocational made reasonable efforts to remedy the harm to purchasers and to eliminate the offending practices. Respondent's sales program was directed at occupants of Sevilla. Occupants included owners of Sevilla timeshares, renters, and owners of other timeshare units who were occupying a timeshare at Sevilla through an exchange program. When a new group of occupants arrived at Sevilla, the sales program began with a reception in the form of a pool party, a breakfast, or a dinner. Respondent assigned a salesperson to certain guests and sometimes assigned himself to a few guests. At the reception, each salesperson and Respondent would meet their assigned guests and make appointments for a timeshare sales presentation and tour. At the sales presentation, each salesperson sat at a table with prospective purchasers and performed the sales presentation designed and required by Respondent. Upon completion of the sales presentation, Respondent would come to the table to close the sale. Respondent would go over the sales presentation and emphasize certain points. On October 24, 1995, Clarence and Maxine Shelt attended a sales presentation with their friends Raymond and Charlene Sindel from their respective home city of Delta, Ohio. The Shelts and Sindels owned other timeshares not located at Sevilla. Maxine Shelt purchased a timeshare at Sevilla because Respondent promised her and her husband that they could use the exchange program for a timeshare anywhere in the world for $79, 52 weeks a year. The Shelts tried to use the exchange program through Tri Realty, Inc. ("Tri Realty") because that was the agency Respondent told the Shelts to use. Tri Realty denied any knowledge of such a program, and Tri Realty never offered such a program. Respondent represented that the Shelts could sell their two timeshares relatively easily at a price stated in a price list Respondent provided to the Shelts. Based on Respondent's representation, the Shelts listed their two timeshares for resale with Tri Realty. The two timeshares never sold. The Shelts attempted to discuss the sale of their units with Respondent several times. Respondent became unavailable to the Shelts after the second conversation. Mrs. Shelt went to Orlando and complained to a representative of Vocational concerning her dissatisfaction with Respondent. Vocational refunded the Shelt's purchase money for the Sevilla timeshare. Respondent also represented to the Sindels that the exchange program at Sevilla would allow them to exchange their Sevilla timeshare for a timeshare anywhere in the world for $79, 52 weeks a year. After purchasing a timeshare at Sevilla, the Sindels attempted to use the exchange program described by Respondent but found that no such exchange program existed. Respondent also represented to the Sindels that their existing timeshares could be sold "before the end of the year" and that the sale proceeds would pay for the timeshare at Sevilla. Respondent provided the Sindels with a computer printout purporting to be the market value for the existing timeshares. Respondent represented that the timeshares would sell very quickly, especially those located on the resort coast. The Sindels listed their timeshares with Tri Realty, but the timeshares never sold. The Sindels complained to Vocational about Respondent. Vocational refunded the purchase price of the Sevilla timeshare to the Sindels. On June 26, 1996, Mildred and Eugene Plotkin attended a sales presentation from their home in Greenville, North Carolina. Respondent represented that the Plotkins would be able to obtain a credit card that they could use to pay for the Sevilla timeshare at a very low interest rate. Respondent further represented that he could sell the Plotkin's existing timeshare in Las Vegas in two months so that they could use the sales proceeds to pay off the credit card. The Plotkins used their two existing credit cards to pay for a Sevilla timeshare. The credit card promised by Respondent never came. The Las Vegas timeshare did not sell in the time promised. The Plotkins did not get their low-interest credit card, found that the Las Vegas timeshare had not sold, and began receiving interest charges on their existing cards for the purchase of the Sevilla timeshare. Respondent paid the credit charges incurred by the Plotkins with checks issued on the MPW account. On July 26, 1996, Susan Bailey attended a sales presentation from her home in Wiggins, Mississippi. Respondent represented that Ms. Bailey would receive a credit card with a credit line of $20,000 and an interest rate of 8.9 percent. Respondent gave Ms. Bailey what he represented to her as a confirmation of her right to the credit card. Ms. Bailey purchased a Sevilla timeshare in reliance upon Respondent's representations but never received a credit card. She attempted to speak to Respondent but discovered that Respondent had resigned his position at Sevilla. She spoke to someone else at Sevilla and applied for a different credit card with a lower line of credit and a higher interest rate. On December 11, 1996, Larry and Carla Eshleman attended a sales presentation from their home in Downingtown, Pennsylvania. Respondent represented that Mr. Eshleman would receive a credit card with a credit line of $25,000 and an interest rate of 8.9 percent. Respondent represented that the Eshlemans could use the credit card to pay for the Sevilla timeshare and that Respondent would sell the two timeshares already owned by the Eshlemans before the first payment was due on the new credit card. Respondent provided a computer printout purporting to be the market value of their existing timeshares. Respondent told the Eshlemans that he would pay for families to stay in the Eshelmans' existing timeshares and make sales presentations to these families. Respondent represented that it was in his best interest to sell the timeshares quickly because it would cost Respondent $149 to send each family to each timeshare for eight days and seven nights. Respondent assured the Eshelmans that it would be no problem to sell the existing timeshares because Respondent had done it many times. Respondent also told the Eshelmans that Respondent could rent the Sevilla timeshare for $875 for the lockout unit, $1050 for the one bedroom unit, or $1,650 for both units in any year the Eshelmans did not use the Sevilla timeshare. Respondent represented that the Eshelmans could make money off the timeshare when they did not use it. In reliance upon Respondent's representations, Mr. Eshelman purchased a Sevilla timeshare. Respondent never sold the Eshelmans' existing timeshares. When the Eshelmans complained to Vocational, Vocational refunded their purchase money. On September 19, 1996, Thomas and Betty Prussak attended a sales presentation from their home in Medina, Ohio. Respondent asked Mr. Prussak if Mr. Prussak wanted to buy a Sevilla timeshare. Mr. Prussak stated that he already owned two weeks of timeshares and wanted to sell those two. Respondent offered to sell the existing timeshares if Mr. Prussak purchased a timeshare from Respondent. Respondent represented that the sales proceeds from one of the existing timeshares would pay off the Sevilla timeshare and Mr. Prussak would have cash in hand from the sale of the second timeshare less a 10 percent commission to Respondent on both timeshares. Respondent represented to Mr. Prussak that Respondent would sell the existing timeshares for market value. Respondent made a telephone call or fax communication to an unknown source and then told Mr. Prussak that the two existing timeshares were worth $12,000 each. Respondent represented to Mr. Prussak that Respondent would probably have one of the two existing timeshares sold by the end of the week because it was a "Five Star" unit. Respondent represented that his sales representatives would "get right on it" and that all they had to do was to take people there and "they'll go." In June 1996, Mrs. Cynthia Richards and her now deceased husband attended a sales presentation at Sevilla. Mrs. Richards now lives in Randolph, New Jersey. Respondent represented that if the Richards purchased a Sevilla timeshare, Respondent would sell their existing timeshare for $2,000 over the purchase price of the Sevilla timeshare. Respondent represented that he had buyers in mind from England. The extra cash appealed to the Richards to pay off existing bills. The Richards purchased a Sevilla timeshare in reliance upon Respondent's representations. The existing timeshares never sold. Mrs. Richards attempted to telephone Respondent several times, but was never able to speak to Respondent. Vocational received approximately 50 other complaints from purchasers of Sevilla timeshares describing representations by Respondent similar to those described in previous findings. Petitioner provided Respondent with notice that Petitioner intended to use six of these 50 complaints as similar fact evidence pursuant to Section 120.57(1)(d). Findings based on similar fact evidence are set forth in paragraphs 33-40. In May 1996, Mr. and Mrs. Tim Malone attended a sales presentation from their home in Sturgeon Lake, Minnesota. Respondent represented that he would be able to sell the Malone's existing timeshare "by the end of the year" for its market value of $9,800. Respondent represented that he would pay for families to stay in the Malone's existing timeshare and attempt to sell the unit to them. Respondent assured the Malones that he would sell the existing unit before the end of the year because it cost Respondent to send potential buyers to the existing unit. In reliance upon Respondent's representations, the Malones purchased a Sevilla timeshare. Respondent never sold the Malone's existing timeshare. Respondent never sent potential buyers to the Malone's existing timeshare. The market value was less than $5,000. In July 1996, Mr. and Mrs. Phillip Lambert attended a sales presentation from their home in Sharon Hill, Pennsylvania. Respondent represented that he would be able to sell the Lambert's existing timeshare and that the Lamberts would receive a credit card they could use to pay for the Sevilla timeshare. The Lamberts purchased a Sevilla timeshare in reliance upon Respondent's representations. The Lamberts never received a credit card. Respondent never sold their existing timeshare. Vocational refunded the purchase money for the Sevilla timeshare to the Lamberts. In August 1996, Mr. Andrew Eger attended a sales presentation from his home in Orlando, Florida. Respondent represented that the exchange program at Sevilla would allow Mr. Eger to exchange his timeshare for another anywhere in the world for $149, 52 weeks a year. Mr. Eger discovered that the exchange program started at $149 for units available only in the following 59 days and that the least expensive exchange actually available any other time started at $350. Mr. Eger cancelled the purchase of his Sevilla timeshare within the 10-day rescission period provided in the written contract. Respondent threatened Mr. Eger with lawsuits and with refusing to refund the $8,000 due. In February 1997, Mr. David and Margaret Maybloom attended a sales presentation from their home in Staten Island, New York. Respondent represented that he would sell their existing timeshare for $3,000 and thereby subsidize the cost of the Sevilla timeshare. Respondent's sales person also represented that the Mayblooms would receive a credit card with a credit limit of $20,000 that they could use to purchase the Sevilla timeshare. The Mayblooms purchased a Sevilla timeshare in reliance upon Respondent's representations. They received a credit card with a credit limit of $6,000, but Respondent did not sell the existing timeshare. Vocational did not offer a resale, exchange, or rental program with a purchase of a Sevilla timeshare. Vocational did not have a contract for resale, exchange, or rental with Tri Realty. Vocational did not offer a credit card as an incidental benefit of purchasing a Sevilla timeshare. Vocational did not file the availability of a credit card as an incidental benefit pursuant to Section 721.075(1)(g). At the beginning of Respondent's tenure as sales manager, Vocational did offer a credit card as an incidental benefit for a short period. Vocational terminated the credit card program shortly after Respondent became sales manager. However, Respondent continued to offer the credit card to prospective purchasers as an inducement to purchase a Sevilla timeshare.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Petitioner enter a final order finding Respondent guilty of violating Section 721.11 (4)(a), (h), (j), and (k), entering a cease and desist order prohibiting Respondent from further violations of Chapter 721 in the sale of timeshares, imposing a civil penalty in the amount of $28,000, and requiring Respondent to pay the civil penalty within 45 days of the date of this Recommended Order by certified check made payable to the Treasurer, State of Florida, Department of Business and Professional Regulation which Respondent shall mail by certified mail to Mr. John Floyd, Investigator Supervisor, Department of Business and Professional Regulation, 1940 North Monroe Street, Tallahassee, Florida 32399-1030. DONE AND ENTERED this 13th day of April, 2000, Tallahassee, Leon County, Florida. DANIEL MANRY 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 13th day of April, 2000. COPIES FURNISHED: Philip Nowick, Director Florida Land Sales, Condos, Mobile Homes Department of Business and Professional Regulation Northwood Centre 1940 North Monroe Street Tallahassee, Florida 32399-0792 Barbara D. Auger, General Counsel Department of Business and Professional Regulation Northwood Center 1940 North Monroe Street Tallahassee, Florida 32399-0792 Janis Sue Richardson, Esquire Division of Florida Land Sales, Condominiums and Mobile Homes Department of Business and Professional Regulation Northwood Center 1940 North Monroe Street, Suite 60 Tallahassee, Florida 32399-1007 William S. Walsh 2156 Turnberry Drive, Oviedo, Florida 32756
The Issue The issue in this case concerns whether the Petitioner should issue a cease and desist order and/or impose sanctions against the Respondent on the basis of allegations that the Respondent, by failing to have its books, accounts, and documents available for examination and by refusing to permit an inspection of its books and records in an investigation and examination, has violated Sections 520.995(1)(a), (f), and (g), Florida Statutes.
Findings Of Fact Sometime during the month of February of 1991, Ms. Jennifer Chirolis, a Financial Investigator from the Department of Banking and Finance, visited the offices of the Barat Company. She spoke with Mr. Roque Barat and determined that the Barat Company was conducting retail installment sales without being licensed to do so under Chapter 520, Florida Statutes. Mr. Chirolis advised Mr. Roque Barat that he needed a license and asked him to cease operations until he obtained the necessary license. The Barat Company thereafter obtained the necessary license and was still licensed as of the time of the formal hearing. Thereafter, the Department received a complaint about the Barat Company from a customer. The customer's complaint was to the effect that the Barat Company had made misrepresentations concerning the fee paid by the customer. The Department initiated an "investigation" of the customer's complaint and also decided to conduct an "examination" of the Barat Company. On April 22, 1992, a Department Examiner, Mr. Lee Winters, went to the office of the Barat Company to conduct the "examination" and "investigation". The Barat Company is operated out of a small office with two employees and a few filing cabinets. When Mr. Winters arrived, employees of the Barat Company were conducting business with two customers. Mr. Winters identified himself to the employees and informed them that he had been assigned to conduct an "examination" and "investigation" of the Barat Company. A Barat Company employee, Mr. Fred Vivar, said that he could not produce the company's records without express authorization from Mr. Roque Barat, that Mr. Roque Barat was out of the country, that he could not get in touch with Mr. Roque Barat at that moment, but that when he did get in touch with him, he would advise Mr. Roque Barat of Mr. Winter's desire to examine the company's books and records. Following a number of telephone calls over a period of several days, on May 1, 1992, Mr. Vivar advised Mr. Winters that he had received authorization from Mr. Roque Barat for the Department to inspect the books and records of the Barat Company. An appointment was made for the Department to inspect the books and records on May 6, 1992, beginning at 10:00 a.m. On May 5, 1992, a letter from an attorney representing the Barat Company was hand delivered to Mr. Winters. The letter included the following paragraph: It is my understanding that you have requested the opportunity to view the records of the above-referenced company, said inspection to take place on May 6, 1992. Please be advised that if this "inspection" is purportedly being done by your agency's authority, pursuant to F.S. 520.996, that no records will be produced absent compliance by your department with F.S. 520.994 including, but not limited to, the Barat Company exercising its right to challenge said subpoena. The Department concluded from the letter of May 5, 1992, that the Barat Company not only refused to produce records without a subpoena, but that, even if served with a subpoena, the Barat Company would resist compliance with the subpoena unless and until ordered to comply by a court. For that reason the Department did not pursue the issuance of a subpoena. Mr. Winters has been involved in over one hundred "examinations" under Chapter 520, Florida Statutes. In the course of those "examinations" there have been only two licensees that did not produce their records. Those two licensees were the Barat Company and another company known as Phase One Credit. Mr. Roque Barat is an officer and director of both Phase One Credit and the Barat Company. The license of Phase One Credit was revoked for its failure to produce its books and records. The refusal to produce the books and records of the Barat Company was occasioned by an effort on the part of Mr. Roque Barat to avoid payment of "examination" fees authorized by Section 520.996, Florida Statutes. In the summer of 1992, the Barat Company filed for bankruptcy, closed down its business operations, and is currently winding up the business.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Banking and Finance issue a Final Order in this case to the following effect: Dismissing the charge that the Barat Company has violated Section 520.995(1)(a), Florida Statutes; Concluding that the Barat Company has violated Sections 520.995(1)(f) and (g), Florida Statutes, as charged in the Administrative Complaint; Imposing a penalty consisting of: (a) an administra-tive fine in the amount of one thousand dollars, and (b) revocation of the Barat Company's license; and Ordering the Barat Company to cease and desist from any further violations of Chapter 520, Florida Statutes. DONE AND ENTERED this 23rd day of February, 1993, in Tallahassee, Leon County, Florida. MICHAEL M. PARRISH 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 23rd day of February, 1993. APPENDIX TO RECOMMENDED ORDER, CASE NO. 92-5620 The following are my specific rulings on the proposed findings of fact submitted by the parties. Proposed findings submitted by Petitioner: Paragraph 1: Rejected as constituting a conclusion of law, rather than a proposed finding of fact. Paragraphs 2, 3 and 4: Accepted in substance. Paragraph 5: Accepted in substance, with the exception of the last five words. The last five words are rejected as irrelevant to the issues in this case and as, in any event, not supported by clear and convincing evidence. Paragraph 6: Accepted in substance. Paragraph 7: First sentence accepted in substance. Second sentence rejected as irrelevant to the issues in this case. Paragraph 8: First sentence accepted. Second sentence rejected as inaccurate description of letter. (The relevant text of the letter is included in the findings of fact.) Last sentence rejected as subordinate and unnecessary evidentiary details. Paragraph 9: Rejected as irrelevant to the issues in this case. Paragraph 10: First two sentences rejected as irrelevant to the issues in this case. Last two sentences accepted in substance. Paragraph 11: Accepted in substance. Paragraph 12: First sentence accepted in substance. Second sentence rejected as irrelevant to the issues in this case. Paragraph 13: Accepted. Proposed findings submitted by Respondent: As noted in the Preliminary Statement portion of this Recommended Order, the Respondent's proposed recommended order was filed late. The Respondent's proposed recommended order also fails to comply with the requirements of Rule 60Q-2.031, Florida Administrative Code, in that it fails to contain citations to the portions of the record that support its proposed findings of fact. A party's statutory right to a specific ruling on each proposed finding submitted by the party is limited to those circumstances when the proposed findings are submitted within the established deadlines and in conformity with applicable rules. See Section 120.59(2), Florida Statutes, and Forrester v. Career Service Commission, 361 So.2d 220 (Fla. 1st DCA 1978), in which the court held, inter alia, that a party is not entitled to more than a reasonable period of time within which to submit its proposals. Because the Respondent submitted its proposals late and because those proposals fail to comply with the requirements of Rule 60Q-2.031, Florida Administrative Code, the Respondent is not statutorily entitled to a specific ruling on each of its proposed findings and no such specific findings have been made. (As noted in the Preliminary Statement, the Respondent's proposed recommended order has been read and considered.) COPIES FURNISHED: Ron Brenner, Esquire Office of the Comptroller 401 Northwest 2nd Avenue Suite 708-N Miami, Florida 33128 Louis J. Terminello, Esquire 950 South Miami Avenue Miami, Florida 33130 Michael H. Tarkoff, Esquire 2601 South Bayshore Drive Suite 1400 Coconut Grove, Florida 33133 Honorable Gerald Lewis Comptroller, State of Florida The Capitol, Plaza Level Tallahassee, Florida 32399-0350 Copies furnished continued: William G. Reeves, General Counsel Office of the Comptroller The Capitol, Room 1302 Tallahassee, Florida 32399-0350
The Issue The issue in this case is whether Respondent engaged in an unlawful employment practice by discriminating against Petitioner on the basis of handicap, in violation of section 760.10, Florida Statutes, and, if so, the appropriate remedy.
Findings Of Fact Petitioner is a 37-year-old Caucasian male. Respondent is an insurance agency registered and licensed to do business in Florida and headquartered in Boca Raton, Florida. Respondent is a direct marketer of insured products, including health insurance policies, and non-insured products, such as lifestyle benefit programs and telemedicine. Respondent uses a call center model to market insurance products. At the call center, sales agents take calls from prospective clients and are paid a "base wage" plus commission. Since sales agents are paid a base wage, they must meet minimum sales requirements to help offset the fixed costs associated with their employment. Petitioner became employed at Respondent's Miramar call center as a sales agent starting on or about September 9, 2013. His employment duties entailed calling potential sales leads and selling non-major medical insurance policies over the telephone. The position for which Petitioner was hired did not have a specified term of employment, and Petitioner and Respondent did not execute an employment contract when Petitioner was hired.1/ Petitioner's work hours were from approximately 8:00 a.m. to 5:30 p.m., five days per week. Sales agents, including Petitioner, were paid $12.50 per hour, with a guaranteed salary of $500 per week, plus a commission on sales made. In late September 2013, Petitioner became ill. His illness manifested itself as shortness of breath and coughing. By late October 2013, his illness had progressed to the point that he was experiencing acute respiratory distress episodes. Petitioner testified that he experienced shortness of breath that, at times, made it "physically impossible" to talk on the telephone. However, he also testified that "I was on the phone doing what I was supposed to be doing, making calls and talking to potential customers, and I was doing it in a way in which other agents did it, which was normal and customary."2/ During his employment tenure with Respondent, Petitioner took time off work for medical appointments related to his condition, but he could not recall how many times, or for how long. There was no evidence presented showing that Respondent was aware of the specific reason for Petitioner's medical appointments. On October 30, 2013, the day he was terminated, Petitioner experienced a respiratory distress episode and had to use the nebulizer while at work. He also had experienced a similar episode at work approximately two days before and had had to use the nebulizer. Petitioner did not inform Respondent that he was experiencing shortness of breath, respiratory distress, or any other medical condition that interfered with his ability to perform his job. The persuasive evidence establishes that Respondent's human resources representative had witnessed the acute respiratory distress episode that Petitioner suffered the day he was terminated. However, there is no direct evidence that anyone with Respondent in a position (such as supervisors or managers) to make decisions about Petitioner's employment was made aware of his shortness of breath, acute respiratory distress episodes, or use of the nebulizer while at work. On October 30, 2013, Respondent terminated Petitioner from his employment. The evidence shows that at the time Petitioner was terminated, he was informed that it was due to inadequate sales production.3/ Petitioner testified at the hearing, on rebuttal, that when he was terminated, the manager who fired him "made a comment to me that I couldn't do my job, referring to the fact that I was short of breath on the phone, not to the——to a reference of low sales."4/ There is no other evidence in the record that Petitioner was told that he was being fired because he was physically unable to do his job. Petitioner testified that he did not recall having been informed, before his termination, that he was not meeting performance expectations. He testified that he did not know how his sales performance compared to that of other agents whose employment duties were the same as his. He testified that he did not believe he was the lowest-performing sales agent at the call center. He also testified that he believed he was the only person terminated that day. However, he did not articulate any specific factual or perceptual bases for these beliefs. At the time he was terminated, Petitioner asked to be given two extra days, until Friday of that week, to allow new medications he recently had been prescribed to be given a chance to work so that he could talk on the telephone without experiencing severe shortness of breath. Respondent declined to provide him the two extra days before terminating him. Petitioner had been employed with Respondent for approximately seven-and-a-half work weeks5/ when he was terminated. Petitioner testified that as of October 30, 2013, he was "disabled,"6/ although he did not know it at that time. He testified, persuasively, that he continued to have difficulty breathing after being terminated. Sometime after he was terminated, Petitioner was determined eligible for Supplemental Security Income ("SSI") benefits from the Social Security Administration, and eligible for vocational rehabilitation services from the Florida Department of Education, Division of Vocational Rehabilitative Services.7/ Petitioner asserts that even though he did not notify Respondent that he was disabled before he was terminated, he believes that Respondent's supervisors and managers perceived him being as disabled due to his respiratory distress episodes, shortness of breath, and use of a nebulizer while at work, and that they terminated him on that basis. However, as noted above, the evidence does not show that anyone in a position to make decisions about Petitioner's employment was aware of his health condition before Respondent terminated him. At the time of Petitioner's employment, Stephen Fingal was Respondent's director of enrollment and oversaw the sales department, including the call centers. Petitioner was among the employees Fingal supervised. Fingal testified that each call center sales agent was required to make a minimum of 12 "primary" insurance policy sales per week8/ in order to cover his or her $500 per week salary,9/ as well as the cost of "leads," which are generated through Respondent's commercial advertising programs, and break down to a fixed cost of roughly $1,500 to $2,000 per week per agent. The competent, persuasive evidence, consisting of Fingal's testimony and sales logs,10/ shows that Petitioner consistently failed to meet the minimum sales performance standard over the entire term of his employment with Respondent. During Petitioner's first week of employment, he was being trained, so made no sales. He made four total sales his second week of employment; no sales his third week of employment; one total sale his fourth week of employment; 17 sales of mostly ancillary policies his fifth week of employment; no sales his sixth week of employment; nine total sales his seventh week of employment; and no sales the week he was terminated.11/ The evidence does not establish a pattern linking Petitioner's lack of productivity to any documented episodes of shortness of breath or respiratory distress. Over Petitioner's entire tenure with Respondent, he sold a total of only 33 policies. Of these, only 15 were primary health insurance policies. By contrast, using the 12-sales-per week minimum performance standard, an agent whose sales performance level was marginally adequate would have sold at least 60 primary policies over a five-week period——approximately four times more than Petitioner sold over a six-and-a-half week period. To prove this point, Respondent presented the sales productivity information for two other sales agents, whose performance was characterized as "average," for the same time period as Petitioner's employment. These agents sold approximately two times more primary policies and three times more ancillary policies than Petitioner sold during the same period. On cross-examination, Fingal characterized Petitioner's comparative sales performance as "in the lower quadrant." When asked whether it was possible that 20 to 25 percent of the sales agents performed at a lower level than Petitioner, Fingal answered "probably not." Fingal testified, persuasively, that Respondent declined to give Petitioner the requested two additional days because he asked for them when he was terminated. By that point, Respondent already had determined, based on Petitioner's consistent failure to meet minimum performance standards over his entire employment term, that Petitioner was not going to be a productive employee.12/ Respondent does not hire part-time sales agents, and at the time Petitioner was terminated, there were no sales positions that did not involve speaking on the telephone. Additionally, at the time Petitioner was terminated, Respondent did not have any available non-sales positions into which Petitioner could transfer. Moreover, even if such positions were available, there was no evidence showing that Petitioner was qualified for them. In any event, the evidence shows that Petitioner never requested to be transferred to an alternative employment position that did not entail speaking on the telephone. Petitioner did request what he characterized as an "accommodation" of two additional days, but, as discussed above, Respondent declined because it had already decided to terminate him due to his consistently inadequate performance over the term of his employment. Petitioner posited that he was not the lowest performing sales agent, but he did not present any evidence to support that supposition. He also posited that he was the only sales agent terminated that day, but, again, did not present any evidence supporting that supposition. He did not present any evidence showing that non- disabled call center sales agents who performed at or below the same level as he performed were not terminated. He presented no evidence showing that Respondent subsequently filled his position with a non-disabled person. In fact, approximately ten months after Petitioner was terminated, Respondent substantially reduced its call center sales agent work force, closed the Miramar call center, and consolidated its call center operations at its Boca Raton location, in an effort to reduce the substantial cost associated with having call centers in multiple locations. This is consistent with Respondent's assertion that Petitioner was terminated because he was not a profitable employee and that Respondent was losing money in continuing to employ him.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Florida Commission on Human Relations enter a final order dismissing the Petition for Relief. DONE AND ENTERED this 9th day of February, 2016, in Tallahassee, Leon County, Florida. S CATHY M. SELLERS 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 9th day of February, 2016.
The Issue Whether Respondent Nissan North America, Inc.'s April 1, 2004, Notice of Termination of the Dealer Sales and Service Agreement between itself and Petitioner Love Nissan, Inc., was undertaken in good faith; undertaken for good cause; clearly permitted by the franchise agreement; and was based on a material and substantial breach of the dealer agreement; and whether the grounds relied upon for termination have been applied in a uniform and consistent manner.
Findings Of Fact Nissan is a "licensee" as defined by Section 320.60(8), Florida Statutes. Love is a "motor vehicle dealer," in relationship with Nissan, as defined by Section 320.60(11)(a)1., Florida Statutes. At all times material, Love Nissan's principals have been retailers of both Nissan and Honda automobiles in Homosassa Springs, Citrus County, Florida. The Honda dealership is called, "Love Honda." (See Finding of Fact 11.) Honda is a competitor of Nissan. Nissan and Love are parties to a Dealer Sales and Service Agreement, which is a "franchise agreement" as defined by Section 320.60(1), Florida Statutes, and which is referred to herein as "the dealer agreement." This is an automobile dealer termination case, arising from Nissan's April 1, 2004, Notice of Intent to Terminate the Dealer Sales and Service Agreement. Love's dealer agreement with Nissan, executed March 4, 1999, is the acknowledged contract between the parties. Nissan drafted it. Charles Halleen purchased Love Nissan on July 23, 1990. At all times material, Charles Halleen had a long and successful history in the automotive sales and service industry. From the time Charles Halleen purchased the dealership, his son, Robert Halleen, worked at the dealership. Robert also has been involved in the automotive sales and service industry most of his life. When Charles Halleen acquired Love, Robert took control over most dealership operations, other than sales. Robert Halleen's duties increased as he began to oversee used car sales. Chad Halleen, Charles Halleen's grandson and Robert Halleen's son, also worked part-time or full-time at the dealership from 1990 through the date of hearing. However, until 1994, a non-family member served as Love's executive manager and was responsible for new vehicle sales, advertising, and ordering from Nissan of the vehicles to be sold by Love. From 1994 to 1999, Charles Halleen owned the Love dealership and served as its dealer principal. During the same period, Robert Halleen served as Love's general manager. Since 1994, Love has been a poor performer saleswise. Effective March 4, 1999, Nissan approved Charles Halleen's transfer of ownership of Love Nissan to Robert Halleen, and to Robert's son, Chad Halleen. Robert Halleen became 90 percent owner of the dealership, and Chad Halleen received the remaining 10 percent ownership. At the same time, Robert Halleen and Chad Halleen entered into the dealer agreement with Nissan that is at issue in these proceedings. Pursuant to that dealer agreement, Robert Halleen became Love's dealer principal and Chad Halleen became Love's executive manager. Robert and Chad Halleen also own Love Honda, which is located adjacent to Love Nissan. The Nissan and Honda dealerships have separate showrooms, display areas, and parking areas, but they share a service facility which is located behind the Love Nissan showroom. Section 320.645, Florida Statutes, prohibits a manufacturer from owning a motor vehicle dealership that sells the cars it manufactures directly to the public. Nissan cannot sell cars at retail in Florida and therefore must rely on its dealers to sell cars to the ultimate consumers. Accordingly, Nissan's agreements with its dealers contain provisions to help ensure that dealers achieve and maintain sufficient and satisfactory levels of sales performance. Within the dealer agreement, Love is referred to as "dealer," and Nissan is referred to as "seller." The following provisions of the dealer agreement impact this case: Section 3: Vehicle Sales Responsibilities of Dealer. General Obligations of Dealer. Dealer shall actively and effectively promote through its own advertising and sales promotion activities the sale at retail (and if Dealer elects, the leasing and rental) of Nissan Vehicles to customers located within Dealer's Primary Market Area. Dealer's Primary Market Area is a geographic area which Seller uses as a tool to evaluate Dealer's performance of its sales obligations hereunder. Dealer agrees: that it has no right or property interest in any such geographic area which Seller may designate; that, subject to Section 4 of this Agreement, Seller may add, relocate or replace dealers in Dealer's Primary Market Area; and that Seller may, in its reasonable discretion, change Dealer's Primary Market Area from time to time. Sales of Nissan Cars and Nissan Trucks. Dealer's performance of its sales responsibility for Nissan Cars and Nissan Trucks will be evaluated by Seller on the basis of such reasonable criteria as Seller may develop from time to time, including for example: Achievement of reasonable sales objectives which may be established from time to time by Seller for Dealer as standards for performance. Dealer's sales of Nissan Cars and Nissan Trucks in Dealer's Primary Market Area and/or the metropolitan area in which Dealer is located, as applicable, or Dealer's sales as a percentage of: 3.B.2.(i) registrations of Nissan Cars and Trucks; 3.B.2.(ii) registrations of Competitive Vehicles; 3.B.2.(iii) registrations of Industry Cars; 3.B.2.(iv) registrations of vehicles in the Competitive Truck Segment; A comparison of Dealer's sales and/or registrations to sales and/or registrations of all other Authorized Nissan Dealers combined in Seller's Sales Region and District in which Dealer is located and, where Section 3.C applies, for all other Authorized Nissan Dealers combined in the metropolitan area in which Dealer is located; and A comparison of sales and/or registrations achieved by Dealer to the sales or registrations of Dealer's competitors. The sales and registration data referred to in Section 3 shall be those utilized in Seller's records or in reports furnished to Seller by independent sources selected by it and generally available for such purpose in the automotive industry. If such reports of registration and/or sales are not generally available, Seller may rely on such other registration and/or sales data as can be reasonably obtained by Seller. Metropolitan Markets. If Dealer is located in a metropolitan or other marketing area where there are located one or more Authorized Nissan Dealers other than Dealer, the combined sales performance of all Nissan Dealers in such metropolitan or other marketing area may be evaluated as indicated in Sections 3.B.2 and 3.B.3 above, and Dealer's sales performance may also be evaluated on the basis of the proportion of sales and potential sales of Nissan Vehicles in the metropolitan or other marketing area in which Dealer is located for which Dealer fairly may be held responsible. Additional Factors for Consideration. Where appropriate in evaluating Dealer's sales performance, Seller will take into account such reasonable criteria as Seller may determine from time to time, including, for example, the following: the Dealership Location; the general shopping habits of the public in such market area; the availability of Nissan Vehicles to Dealer and to other Authorized Nissan Dealers; any special local marketing conditions that would affect Dealer's sales performance differently from the sales performance of other Authorized Nissan Dealers; the recent and long term trends in Dealer's sales performance; the manner in which Dealer has conducted its sales operations (including advertising, sales promotion, and treatment of customers); and the other factors, if any, directly affecting Dealer's sales opportunities and performance. * * * Assistance Provided by Seller. Sales Training Courses. Seller will offer from time to time sales training courses for Dealer sales personnel. Based on its need thereof, Dealer shall, without expense to Seller, have members of Dealer's sales organization attend such training courses and Dealer shall cooperate in such courses as may from time to time be offered by Seller. Sales Personnel. To further assist Dealer, Seller will provide to Dealer advice and counsel on matters relating to new vehicle sales, sales personnel training and management, merchandising, and facilities used for Dealer's vehicle sales operations. Evaluation of Dealer's Sales Performance. Seller will periodically evaluate Dealer's performance of its responsibilities under this Section 3. Evaluations prepared pursuant to this Section 3. Evaluations prepared pursuant to this Section 3.H. will be discussed with and provided to Dealer, and Dealer shall have an opportunity to comment, in writing, on such evaluations. Dealer shall promptly take such action as may be required to correct any deficiencies in Dealer's performance of its responsibilities under this Section 3. * * * Section 12. Termination. * * * Termination by Seller for Non- Performance by Dealer. If, based upon the evaluations thereof made by Seller, Dealer shall fail to substantially fulfill its responsibilities with respect to: 12.B.l.a. Sales of new Nissan Vehicles and the other responsibilities of Dealer set forth in Section 3 of this Agreement; Maintenance of the Dealership Facilities and the Dealership Location set forth in Section 2 of this Agreement; Service of Nissan Vehicles and sale and service of Genuine Nissan Parts and Accessories and the other responsibilities of Dealer set forth in Section 5 of this Agreement; The other responsibilities assumed by Dealer in this Agreement including, without limitation, Dealer's failure to: 12.B.1.d.(i)Timely submit accurate sales, service and financial information concerning its Dealership Operations, ownership or management and related supporting data, as required under this Agreement or as may be reasonably requested by Seller; 12.B.1.d.(ii)Permit Seller to make an examination or audit of Dealer's accounts and records concerning its Dealership Operations after receipt of notice from Seller requesting such permission or information; 12.B.1.d.(iii)Pay Seller for any Nissan Products or any other products or services purchased by Dealer from Seller, in accordance with the terms and conditions of sale; or 12.B.1.d.(iv)Maintain net worth and working capital substantially in accordance with Seller's Guides therefore; or In the event that any of the following occur: 12.B.2.(i) any dispute, disagreement or controversy between or among Dealer and any third party or between or among the owners or management personnel of Dealer relating to the management or ownership of Dealer develops or exists which, in the reasonable opinion of Seller, tends to adversely affect the conduct of the Dealership Operations or the interests of Dealer or Seller, or 12.B.2.(ii) any other act or activity of Dealer, or any of its owners or management occurs, which substantially impairs the reputation or financial standing of Dealer or of any of its management subsequent to the execution of this Agreement: Seller will notify Dealer of such failure and will review with Dealer the nature and extent of such failure and the reasons which, in Seller's or Dealer's opinion, account for such failure. Thereafter, Seller will provide Dealer with a reasonable opportunity to correct the failure. If Dealer fails to make substantial progress towards remedying such failure before the expiration of such period, Seller may terminate this Agreement by giving Dealer notice of termination, such termination to be effective at least ninety (90) days after such notice is given. During such period Dealer will commence such actions as may be necessary so that the termination obligations of Seller and Dealer set forth in this Agreement may be fulfilled as promptly as practicable. Therefore, it may be said that Love and Nissan have agreed and contracted that Love will "actively and effectively promote the sale at retail" of new Nissan vehicles; that Love will be evaluated by Nissan on Love's sales performance within its designated Primary Market Area (PMA); and that Nissan may evaluate Love's "performance of . . . sales responsibility . . . on the basis of such reasonable criteria as [Nissan] may develop from time to time." At all times material, Love's PMA has included all of Citrus County and parts of Levy and Hernando Counties, although during the critical period of time, Nissan twice adjusted Love's PMA boundaries as described below. At all times material, Robert and Chad Halleen knew that Nissan makes periodic evaluations of Love's sales performance, and that pursuant to the dealer agreement, Nissan could terminate Love for failure to "substantially fulfill its responsibilities with respect to sales of new Nissan vehicles." Nissan, in fact, used the criteria set forth in Section 3.B.2.(ii), of the dealer agreement to evaluate Love, that is: Love's percentage of competitive vehicle registrations, compared to the "sales and/or registrations of all other Authorized Nissan Dealers combined in [Love's] sales region." It is undisputed that the dealer agreement outlines the "sales penetration" calculation Nissan is permitted to use, and did use, to evaluate Love and all other Nissan dealers' sales performance. This is a statistically dense case, and accordingly, the weight and credibility of testimony in the respective experts' various fields has been analyzed and considered in arriving at the following factual analysis of those statistics, but it is unrefuted that Love's sales performance on Nissan automobiles has always been below Nissan's southeast region average by every standard used to evaluate Love's performance. Nissan has consistently used sales penetration to evaluate the sales performance of all Nissan dealers, not just Love. Sales penetration is calculated by dividing a dealer's total new vehicle sales by the number of competitive new vehicles registered in a dealer's PMA. The resultant quotient is expressed as a percentage, to show the dealer's sales penetration. Each dealer's sales penetration is then compared as a ratio to Nissan's sales penetration throughout the region, to determine whether the dealer being analyzed is penetrating its PMA below, at, or above the average for all Nissan dealers in the region. Historically, by case law, and by expert testimony in the instant proceeding, it is found that Nissan's method for evaluating its dealers' sales performances is a reasonable, industry-accepted practice for evaluating new car dealers.2/ Furthermore, this methodology has "built-in" benefits for the dealers being analyzed. Because all sales are included in the denominator of the calculation, and not just those sales from the geographical market areas assigned to the respective dealers, the total region penetration figure is lowered, thus helping more dealers demonstrate at least average penetration. Nissan advises dealers who are in trouble saleswise, or who are likely to get in trouble saleswise, before it is too late to salvage the dealership. Among other means of doing this is Nissan's practice of sending dealers who rank in the bottom 10 of the sales penetration rankings a quarterly letter expressing Nissan's concern with the dealership's sales performance. From 1997 to 2004, Love Nissan received many such letters. The first such letter arrived in 1997, before Robert and Chad Halleen took over the running of Love Nissan. Robert Halleen claims that in 1997, upon receipt of Love's first "bottom 10" letter, Nissan's District Operations Manager (DOM) told him that bottom 10 letters were a mere formality and that he should not worry about receiving them. While this unrefuted testimony is credible, it does not excuse Love's later failure to respond to requests and advice from Nissan; failure to respond to bottom 10 letters; or failure to respond to notices of default (NODs), by bringing Love's sales penetration into line with the region average for the next six-plus years.3/ From 1997 to April 1, 2004, in addition to bottom 10 letters, Nissan repeatedly notified Love of its evaluations on the basis of Love's sales penetration as compared to the region average and Love's ranking among Nissan dealers; notified Love that it was not meeting Nissan's expected level of sales; and offered advice and counsel, through its DOM, on increasing sales, as more specifically described below. On November 29, 1999, nine months into Robert and Chad Halleen's ownership and administration of Love, Love received Nissan's certified bottom 10 letter, stating that Love needed to improve its sales penetration to meet the region average. As of that date, Love's penetration was 33 percent of the region average. On November 21, 2000, Nissan sent Love an NOD, advising that Love was in default on several provisions of the dealer agreement. The letter notes that it is the third such notice. Love had unilaterally, and without Nissan's prior approval as required by the dealer agreement, added the Daewoo car line to Love's dealership. Daewoo is another import competitor of Nissan. Although Love's showroom for Daewoo was located elsewhere, some Daewoo automotive service was conducted at the Love Nissan service facility, which already was shared with Love Honda. Nissan cited this situation as one of the four elements of a default by Love, along with Love's failure to maintain its facilities, insufficient capitalization, and poor sales performance/penetration. The NOD also advised Love that its sales penetration had been decreasing: 35.5 percent of region average in 1998, which was 390 units short of the region average units sold that year; 32.0 percent of the region average in 1999; and 28.1 percent of region average in 2000, year to date (YTD). Nissan gave Love 90 days to avoid termination by reaching the region's average sales penetration. By year's end, Love was only at 29.5 percent penetration, but Love Nissan's attorney sent an explanation of the Daewoo situation to Nissan on January 9, 2001. His letter stated, in pertinent part: . . . as you note in your letter, Mr. Halleen has purchased land adjacent to the dealership facilities and has already moved the Daewoo sales to that land. Also, the rest of the Daewoo related complaints are not an issue as Mr. Halleen has remedied that problem so that Daewoo service or parts is not infringing on any portion of Nissan's use of any of the facilities. . . . the numbers that have been provided to you are not accurate or have not been appropriately applied to the situation regarding Love Nissan's Guides for Dealership Facilities. At this time, we believe that Love Nissan is now, and has been in substantial compliance with these Guides. [There follows a discussion of alleged square footage of the facility as Love compared it to the Nissan guidelines.] . . . Mr. Halleen . . . disagrees with the current "planning potential" that has been assessed to Love. . . . On February 1, 2001, Nissan sent Love a follow-up NOD, again advising Love that its current sales penetration was the lowest of the 58 Florida dealers, and again advising that Love must remedy its default of the dealer agreement. On June 29, 2001, Nissan sent Love another certified letter. Nissan again informed Love that it was in breach of the dealer agreement based upon its sales penetration through April 2001, which was only 47.2 percent of region average. Nissan requested a response from Love by July 16, 2001, with a plan to cure its default, but Love did not respond. The effect of this correspondence was additional time beyond the 90 days in which Love could show performance improvement. By a July 16, 2001, NOD, Nissan reiterated the same unauthorized addition of Daewoo to the already shared service department, failure to meet facility guidelines, and unsatisfactory sales performance, and set a 30 days' time limit for Love to come up with a written plan for improvement and a 90 days' deadline for Love to meet the region sales average. The July 16, 2001, NOD also advised Love that, at Love's request, Nissan had reduced the size of Love's PMA and had recalculated sales penetration pursuant to the new PMA, but that Love's sales penetration, as recalculated, was still at only 54 percent of the average region sales penetration. The NODs were jointly signed by W. J. Kirrane, Nissan's Vice-President and General Manager, and Brad Bradshaw, Nissan's then-Southeast Region Vice-President. Love's response to the July 16, 2001, NOD came from Robert Halleen, dated August 10, 2001. It was addressed to Mr. Kirrane, in California, and was copied to Mr. Bradshaw. It read, in pertinent part: Your letter sent to me July 16, 2001, Notice of Default . . . shows a total lack of communication within Nissan as well as a total lack of commitment to your dealers. Our DOM's [sic.] have continually worked to adjust our PMA to try to eliminate some of the obstacles in penetrating this market. Even by your own numbers, our penetration is increasing. . . . I would appreciate any help you can give me. . . . We currently have thirty two Nissans in stock (we normally stock 70-80) and had 3 units taken from our last allocation. If Nissan wants me to sell more cars they need to provide them. Regarding your concerns over Daewoo, there is no evidence of Daewoo parts and service in our Nissan facility now or in the past. Daewoo currently resides in a building one mile south of our Nissan facility. Concerning your facilities question, I do not believe anyone who has ever been to our dealership could call it inadequate. We have more than enough land to adequately display and sell Nissans (approximately 4 acres). Our service department is not running at full capacity, so I must assume that it also is more than adequate for the job. * * * Mr. Kirrane, if you are truly interested in Love Nissan improving its penetration, then sit down with me at the upcoming dealer meeting and explain how I can do this. The foregoing letter indicates several troubling things about the Halleens' approach to solving Love's sales penetration problems: a misunderstanding of how a PMA is established; a failure to recognize that Nissan had recently readjusted Love's PMA; and a peculiar belief that the PMA itself somehow inhibited sales, as opposed to being just an evaluation tool. Further, it at least suggests that Robert Halleen misunderstood Nissan's allocation and ordering system as explained by several witnesses. It did not propose any plan for improving sales penetration. The letter also did not re- address, with any specificity, the Nissan facility guidelines by square-footage of each part of the facility, but it did give an owner's reassurance that Daewoo service was no longer being performed in Love's Nissan-Honda facility.4/ Mr. Kirrane, from California, did not meet with Robert Halleen as suggested, or personally respond to the foregoing letter. Nissan's position is that Love was adequately served by its local DOMs and by Nissan's Region Vice-President. On September 5, 2001, a certified letter from Region Vice-President Bradshaw responded to Robert Halleen's August 10, 2001, letter. Mr. Bradshaw's response memorialized a phone conversation between himself and Robert Halleen, which Mr. Bradshaw believed had resolved the PMA issue; offered Love help with allocation of product (inventory); acknowledged Love's relocation of Daewoo service; and cited several visitations by the DOM to assist Love. The Region Vice-President's letter further addressed Love's poor sales penetration and requested that Love propose a plan for achieving the region average. Love did not send Nissan any written plan. On November 26, 2001, Nissan sent another certified letter to Love, advising that, even with Love's new PMA, Love's sales penetration had fallen to 51.1 percent of the region average, and requesting a plan of improvement. No plan was received. Nissan sent a certified letter to Love on March 4, 2002, advising that Love's sales penetration was only 50 percent of region average and requesting a plan for improvement by March 31, 2002. Love did not respond with a plan of correction for improvement of its sales. In October 2002, Nissan's DOM visited Love to discuss sales performance and the need to improve. On March 24, 2003, Nissan sent Love another certified letter, advising that Love's sales penetration percentage had declined in 2002 to 50.6 percent from an already low 50.9 percent the previous year, and that Love was in breach of the dealer agreement. Chad Halleen responded to Nissan's then-Region Vice- President, Patrick Doody, generally stating Love's intent to increase sales via increased advertising and expressing concerns about how Nissan calculates sales penetration versus how Honda calculates sales penetration. He also expressed a concern about getting new Nissan cars/trucks and the desired type of Nissan cars/trucks in time to sell Nissan units in July 2003, based on how few units he currently had on his lot and how few he had on order. This letter also evidenced Chad Halleen's misunderstanding of Nissan's allocation and ordering system, and it proposed no plan of correction. Jon Finkel, Nissan's then-DOM, met with the Halleens on April 11, 2003, at the dealership. Love's then 51.2 YTD percent of region average sales penetration was discussed. On May 23, 2003, Nissan sent Love another certified letter, advising that Love's sales penetration had fallen to 45.9 percent of region average through March 2003, which constituted a decrease from both the previous month and the previous year. On June 24, 2003, DOM Finkel again visited Chad Halleen to assist with new signage, inventory, and "leads" for sales. On June 27, 2003, Nissan issued another NOD to Love, again based on Love's current sales penetration of 46.7 percent and long-term sales penetration deficits. It gave notice of a breach of the dealer agreement and held out to Love the option of curing its breach by increasing sales penetration to reach the region average. At this stage, Love's performance had resulted in 200-plus lost Nissan sales per year, each year since 1999. Mr. Finkel also called on Love in July of 2003 and advised that Love had improved to 48.2 percent of the region average in sales penetration. He also called on August 8, 2003, and advised that Love had climbed to 50.7 percent of average, but reminded Love that under the terms of the current NOD, Love had to attain region average sales penetration by September 2003 or Nissan would terminate the dealer agreement. On August 15, 2003, Nissan sent another bottom ten letter, again advising Love of its deficient sales penetration and requesting that Love submit a plan for improvement to region average by September 15, 2003. Love's response was received by Nissan on September 18, 2003, but it contained no specific plan for the future and mostly related Love's previous July and August 2003 changes in hiring trained personnel in both sales and service areas; discussed compensation incentives already instituted for sales personnel; and stated that Love recently had sometimes lost money on new car deals by pricing them low, just to move Nissan units. These prior changes so far had produced minimal effect and so far had not significantly improved Love's sales penetration figures. Cutting Love's profit margin clearly was not a long-term solution to improve the dealer's sales penetration. On September 24, 2003, Mr. Finkel again met with Love to discuss Love's sales penetration, which was then at 53.1 percent of the region average, through July 2003. He again reminded Love that it needed to meet the region average sales penetration by the end of the month or Nissan would terminate the dealer agreement. However, Love's raw score of new car sales and penetration percentage had modestly increased after the June NOD, and Nissan accordingly extended the NOD as of November 5, 2003. Mr. Finkel met with Love on December 8, 2003, to discuss the October 2003 sales penetration report, which for Love still hovered at only 56.6 percent of region average sales penetration. Mr. Finkel's report memorializes that at that time, Chad Halleen indicated he planned to renovate parts of the facility; Mr. Finkel urged Chad Halleen to "de-dual" with Honda in order to take advantage of the generally improving Nissan market; Mr. Halleen said he did not think he could do that financially, due to Nissan's space requirements; and Mr. Finkel said he would get back to Mr. Halleen about the space requirements. Love did not volunteer capital to build a new facility or to de-dual or offer a comprehensive sales penetration plan. Mr. Finkel also set a sales objective for Love of 400 new Nissan vehicles for 2004. This goal was not a Nissan requirement or an approved Nissan evaluation tool, and the figure has never been used to evaluate Love for active and effective sales performance/penetration. It was Mr. Finkel's own incentive idea. Love contends that an aspirational raw score like this should have been Nissan's requirement all along, yet at no time did Love ever sell 400 new Nissan vehicles in a year. On February 10, 2004, Mr. Finkel again met with Love to discuss that the 2003 year-end data showed that Love had fallen back to a 55.8 percent of region average sales penetration. On April 1, 2004, Nissan issued the NOT which gave rise to the instant case. The NOT was based on Love's historical and continued poor sales performance, as evidenced by statistics and evaluation through December 31, 2003. At the time that the NOT was sent to Love, Nissan did not base the NOT on Love's sales penetration for the first quarter of 2004, which ended March 31, 2004. Due to a nationwide audit, Love's PMA had been inconsequentially changed on March 1, 2004.5/ However, the figures representing actual sales penetration up to the date of termination, April 1, 2004, including calculations based on the latest PMA, have since been reviewed by Nissan, and these statistics support a finding that through March 2004, Love's sales penetration ranked 147th of the 154 Nissan dealers in the region; 56th of the 57 Nissan dealers then in Florida; and 17th of the 17 Nissan dealers in its district. After five years of a variety of counseling sessions, warnings, NODs, and extensions, and after Nissan's realignment of Love's PMA in 2001, at Love's request, Love still had failed to ever meet the regional sales average and, despite repeated solicitation by Nissan of a comprehensive written plan for improvement of Love's sales penetration, Love had failed to submit such a plan. Nonetheless, the Halleens, father and son, testified that since they took over Love in 1999, they have had a private plan that is best described as "slow, stable growth." This seems to mean, among other things, that they chose not to accept all of Nissan's suggestions simultaneously, but wanted to build and improve Love's sales force first, before increasing its advertising, before ordering/stocking certain new models of Nissan vehicles. The problem with this "plan," apparently first advanced at hearing, is that it has never resulted in Love meeting the region sales penetration average. In attempting to fulfill its obligations under Subpart 3.G.2., of the dealer agreement, Nissan, through its DOMs, Region Vice-Presidents, and other corporate management, at various times during the last five years, has advised Love as set out previously (see Findings of Fact 38, 46, and 53) and has also advised Love to stay open on Sundays; increase advertising; and hire and train competent personnel in both sales and service fields, including getting all Love's service personnel trained and certified by Nissan so that Love could offer customers "certified Nissan used cars and service," thereby engendering customer satisfaction and brand loyalty. Nissan also has suggested that Love maintain a steady workforce, conduct off- site sales, and stock and move new models. Few of these suggestions have been implemented by Love. Love had previously tried staying open on Sundays, but found it not to be cost-effective and decided to stay closed on Sundays, even though staying open would have meant Love would have been the only dealer of any brand open on Sundays in Homosassa and therefore more competitive. The Halleens represented at hearing that they intend to eventually stay open one or more Sundays per month, but they did not clearly indicate this to Nissan prior to the NOT or explain why they would not open on Sundays at that time. Only since late 2003, have the current owners significantly increased their advertising budget and spread out their advertising through several newspapers, billboards, coupon books, two radio stations, mail-delivered print ads, cable television spots, various telephone books, and direct mail. This effort was late, and the amounts spent up to the date of the NOT were well below Nissan's advertising recommendations. Love's sales manager testified that sales staff has been adequate for several years at Love. However, traditionally, Love has maintained that there are not a lot of trained dealership personnel in its local community or its PMA and that there are few persons who are willing to move to Homosassa to work. Love asserts that it is difficult to lure trained sales personnel to Love's rural location, and that larger markets, where income and prestige are more attractive, lure away personnel that Love has trained. Yet the fact remains that other dealers with similar problems are outselling Love. Also, traditionally, Love would not follow Nissan's advice to send its salespeople to training sessions conducted at other Nissan dealerships for fear that its employees would be lured away by that dealership, and Love has frequently not had Nissan certified mechanics in its service department. Since 2003, Chad Halleen works on the premises from opening until after closing. He has created an aggressive recruitment program and sales incentive program. He has instituted daily sales meetings with staff, weekly motivational meetings, and promotional cookouts, but these late efforts did not result in effective sales penetration figures prior to the NOT. Traditionally, Love has resisted holding off-site sales, as recommended by Nissan, but Love pointed out only one location where there might, possibly, be a legal impediment to off-site sales, and offered no other reason for not holding off- site sales. Love's recent reduced pricing to increase unit sales has increased its unit sales while adversely affecting its gross profit margin, but even these extraordinary efforts did not result in reaching region average sales penetration figures before termination. Moreover, this sacrifice has the potential of adversely affecting Love's capitalization and long term success. The parties have each formed the opinion that Love's problems with Nissan new car/truck inventory impacted its sales penetration. Love maintains that it could not get the amount and variety of Nissan inventory it needed. Nissan suggests that the Halleens did not understand how to use the Nissan allocation of product and ordering system to their advantage. Nissan established that, over time, Love sometimes failed to confirm its allocations, so that Nissan had to contact Love directly; that over time, Love sometimes declined vehicles offered under Nissan's current production order system; and that over time, Love frequently declined to take "pass 2" vehicle offerings, believing them to be somehow inferior or having been repeatedly rejected by other Nissan dealers, neither of which perceptions is accurate. Nissan further established that on occasion, its DOM intervened to provide units when Nissan complained about availability. The totality of the evidence also shows that there was an on-going discussion between Love and Nissan's successive DOMs to the effect that Nissan repeatedly recommended that Love should stock more cars, in more or different models, in more colors, with more optional packages, in order to make more sales, and that, for a long period of time, the Halleens' concept of slow and steady growth caused them to resist the varietal approach suggested by Nissan. This was because the Halleens believed they knew their potential clientele, up close (see Findings of Fact 59 and 71), better than did Nissan, at a distance, and the Halleens perceived that they might be "stuck" with new Nissan models they believed they could not turn over in a reasonable amount of time. However, Love's inventory regularly stayed at 60-90 days supply,6/ which was the level the Halleens wanted, and Love's inventory sometimes exceeded 90 days' supply, the level advocated by Nissan's representative. Therefore, it is clear that Love got its ordered inventory; had the inventory mix it selected; and that same inventory did not penetrate Love's PMA adequately and never reached the region average sales penetration. Love was responsible for selecting and ordering its own inventory for its potential clientele both by quantity and variety. No fault in this regard has been credibly attached to Nissan. Pursuant to 3.D. of the dealer agreement, there are additional factors beyond just sales penetration/performance that Nissan is obligated to consider in the termination of a dealer. Herein, one of the factors identified by Love as unique is that 32 percent of the residents of Love's PMA as constituted at any time were retirees, the majority of whom are over 65 years of age and who wanted to pay cash, without taking advantage of the several new car financing plans and packages which are the financial lifeblood of most dealerships and which would benefit Love's gross profit margin, capitalization, and cash flow, while Nissan's targeted customer demographic is 29 to 54 years of age. However, the financing issue is a capitalization problem, which periodically has been a concern voiced by Nissan. Likewise, the segmentation analysis, which is part of Nissan's regional evaluations and rankings, divides competitive registrations into separate types or "segments" of vehicles sold in a market. The dealer is evaluated only on its expected penetration for each segment. If one segment does not perform well in a certain PMA, the dealer is held to a lower sales expectation for that type of vehicle. Even adjusting for segments, Love's sales penetration figures do not pass muster. Another unique factor alleged by Love is that there is no significant retail activity in Homosassa or Crystal River to draw consumers to Love from other parts of its PMA. That said, Nissan credibly represented that its sales penetration methodology took into account the local marketing conditions, area, shopping habits of the public, traffic patterns, natural and man-made boundaries, and other relevant issues concerning the Homosassa market when it performed a market study in Love's area and when it twice re-evaluated and altered Love's PMA.7/ Love identified commuting patterns in its PMA to be going away from Love's location to other PMAs and claims this factor exposes commuters to more advertising by other dealers than to Love's advertising, as well as exposing them to the presence of those other dealers in and outside Love's PMA, but this would seem to be a problem with Love's advertising, if anything. Finally, even Love ultimately conceded that this is not a phenomenon unique to Love Nissan but is faced by all dealers near Love experiencing sales into the PMA by competing same line dealers. Demographic factors are a built-in component of the assigned PMA. Region average sales penetration is achievable, regardless of metropolitan or more rural location. Sales penetration by non-metropolitan dealers (as defined by Nissan) in Florida for March 2004 YTD was 98.3 percent versus 98.6 percent for metropolitan dealers (as defined by Nissan). While Florida dealerships are not the comparison required by the dealership agreement, this statistic is meaningful in the present case, because of Love's approach to the issue. More to the point, however, is the fact that each analysis of the region and the PMA found Love lacking in sales and provided a fair comparison with all other dealers. Love complained that its sales penetration success was impeded because there are more domestic car dealerships in its PMA than import dealerships in its PMA, but how this renders Love's situation different from other Nissan dealers in the same region was not clearly enunciated and no nexis between this factor and Love's lack of sales success was clearly established.8/ Love claims, as another unique factor, that dealers in larger communities tend to stock more inventory than dealers in smaller communities and that greater variety can be a reason for potential car buyers to travel further to a larger dealer. Once again, this factor would seem to have been a problem solvable by Love's stocking a larger inventory and a more varied inventory, but it does not render Love's situation unique. (See Findings of Fact 59 and 66-69.) Also, Love asserts that consumers on the periphery of Love's PMA are physically closer to dealers in other PMAs, but this is clearly a factor common to almost every PMA in the nation. Love submits that it should only be required to sell in, and be evaluated on, its sales based on Citrus County, its home county, because Citrus County is the only area Love can "reasonably be expected to serve," but Love offered no credible reason why it should be singled out to be assigned such a limited territory. Robert and Chad Halleen knew the size and extent of Love's PMA when they assumed control of Love in 1999, and the dealership agreement is clear as to how Love's sales were to be evaluated by Nissan. Nissan re-evaluated and adjusted Love's PMA once at Love's request and once pursuant to a national audit of PMAs. A reduction of the PMA to one county was not demonstrated to be a reasonable measuring technique.9/ Even Love's expert, Mr. Roesner, admitted that Love's PMA was properly drawn and that none of the areas included in Love's PMA should be assigned to other dealers. All the foregoing allegedly "unique factors" raised by Love amount to Love's dissatisfaction with its inventory, PMA, or capitalization. As previously stated, Love largely controlled and intentionally limited its own inventory. Capitalization was also under Love's control. Love's PMA is a creation of Nissan, but one which reasonably measures demographics and sales. The PMA adjustments have been previously discussed. Finally, Love contends that Nissan has not treated Love in "a uniform and consistent" manner with other specifically named dealerships that have also, in some years, not met their region sales average. These are: Nissan of Melbourne, which did not meet its region sales average for four years and which had worse results than Love in 2001 and 2003; Alan Jay Nissan, which did not meet its region sales average for four years and had worse results than Love for 2001, 2002, and 2003; Hampton Nissan and Hill Nissan, each of which did not meet the region average for four years and each of which was worse than Love in 2002 and 2003; Nissan of Lakeland/Jenkins Nissan, which did not meet the region sales average for four years; and Lake Nissan, which was worse than Love in 2002. Nissan readily admitted that any individual circumstances considered for one dealer should be considered for all dealers, but in fact, each of the foregoing dealerships presented a unique situation very different than Love's situation. Obviously, the degree of Nissan corporate knowledge about each dealer on the date of Love's April 1, 2004, NOT is pivotal.10/ Nissan of Melbourne experienced two ownership changes between 2001 and April 1, 2004. Its sales penetration improved with the new dealer in 2001, but it was sold again. After the second sale, Nissan also gave the second new dealer a chance to improve sales penetration. After the second sale, Melbourne's sales penetration was still higher than Love's for each of the first three months of 2004, but Nissan would not have known the whole of that quarter's statistics for either dealer on April 1, 2004. Alan Jay Nissan's dealer principal recognized that his dealership was in trouble and personally sought out Nissan's current Southeast Region Vice-President, Patrick Doody, to lobby a comprehensive Nissan sales improvement plan which included relocation and construction of a new, exclusive Nissan dealership separate from Alan Jay's existing Toyota dealership. The dealer presented a detailed marketing plan, personnel changes, changes in compensation, and a plan for increased capitalization. The capitalization of the project was initially raised by the dealer, and he made a "dramatic investment" in Nissan inventory before Nissan committed to his plan. Alan Jay's plan was implemented in 2003. Love had been offered several chances to submit a comprehensive improvement plan to Nissan, but did not. Nissan management perceived Love's principals as not involved and uncooperative in sales improvement; they perceived Alan Jay's principal as implementing a practical plan for success and gave him an opportunity to succeed. Although the first quarter of 2004 figures were not available when Love was terminated, they ultimately showed that, by the time Nissan issued the NOT to Love, Alan Jay's sales penetration had gone from 48.09 percent in 2003, to 88.61 percent of the region sales penetration through March 2004. Hampton Nissan was on the road to termination at one point. After study, Nissan adjusted Hampton's PMA, effective March 1, 2004, as part of a nationwide revision of PMAs. Love's PMA was adjusted at the same time, but was not substantially altered. (See Finding of Fact 57.) Prior to proceeding to termination, Nissan gave Hampton an opportunity to be evaluated upon its new PMA, much as it had given Love the same opportunity in 2001. Nissan had not compiled and analyzed the March 2004 results of its regional evaluations, including the new 2004 PMAs, when it terminated Love on April 1, 2004, but the sales already made by both dealers ultimately showed that Hampton was performing far better than Love by April 1, 2004. When the compiled and analyzed first quarter 2004 sales penetration figures became available shortly after April 1, 2004, they demonstrated that Hampton's penetration had risen to 95.74 percent of the region in March. Neither in 2001, nor 2004, did changes to Love's PMA meaningfully improve Love's sales penetration performance. Sales penetration by Hill Nissan had been adversely affected by the re-routing of a major thoroughfare away from that dealership. Hill responded to Nissan's complaints about Hill's declining sales penetration by requesting to relocate and construct an improved facility, but before Nissan committed to this, Hill demonstrated a dramatic improvement in sales. Nissan of Lakeland was sold to a new dealer and renamed "Jenkins Nissan" in 2003. The new owner instituted a plan to relocate the dealership in order to improve its sales penetration up to the region average, but within a year and even before the move to the new location, there had been significant improvement. As of March 2004, Jenkins had reached sales penetration at 81.68 percent of the region average. The access road in front of Lake Nissan was rerouted and closed for an extended period due to construction. Lake created a plan of correction which included constructing a new facility to attract customers and agreed with Nissan that if Lake did not meet region average sales penetration by June 2005, Lake would sell the dealership, presumably to a retailer who could meet the desired average. Love has not demonstrated that any road construction, sale of the dealership, or any other problem beyond its control affected Love's poor sales penetration. Love also ascribes lack of good faith to Nissan's business decisions to not terminate these other struggling dealers who were confronted with conditions largely beyond their control and who offered Nissan detailed plans to overcome their disadvantages, but Love has not presented any persuasive evidence to that effect. Love only has presented evidence that after Hill, Lake, and Lakeland/Jenkins committed their finances to building new facilities to take advantage of Nissan's growth in the industry, Nissan gave some additional money toward those goals up to amounts consistent with the maximum amounts in Nissan's dealer assistance program for such projects. Nissan will provide assistance money up to $420,000.00 for major facility changes but requires that the dealer submit a plan and/or demonstrate improved performance first. An additional $80,000.00 can be "earned" by the dealer based on improved performance. However, there is no indication that Love has ever considered building a new facility, let alone offered to build a new facility, or has asked for financing from Nissan for such a project. Basically, Love has never offered Nissan any tangible plan of correction or substantial improvement of its penetration percentage, as have the other named dealers. Love demonstrated that Nissan has suggested to Love that it build a new facility and let its Honda dealership go so as to take advantage of the improving Nissan market, but Love was free to reject that suggestion along with all the other Nissan suggestions it rejected. The penetration figures are the result of Love's choices, not Nissan's coercion. Love also has suggested that the NOT herein is related to Nissan's 2001 objection to Love's adding a Daewoo dealership and due to Love's continuing association with Honda. Neither suggestion was proven. Indeed, there was no mention of the Daewoo connection by either party after 2001, and mention of the Honda connection was reasonable in the context it came up. (See Findings of Fact 38 and 53.)
Recommendation Based on the foregoing Findings of Facts and Conclusions of Law, it is RECOMMENDED: that a final order be entered, dismissing Love's Protest/Petition and ratifying the April 1, 2004, Notice of Termination by Nissan. DONE AND ENTERED this 14th day of July, 2005, in Tallahassee, Leon County, Florida. S ELLA JANE P. DAVIS 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 14th day of July, 2005.
The Issue Did Respondent, Ricoh Americas Corporation, (Ricoh), discriminate against Petitioner, Tamara Gleason (Ms. Gleason), because of her gender by demoting her? Did Ricoh retaliate against Ms. Gleason for complaining about gender discrimination?
Findings Of Fact Ricoh is in the business of selling and servicing document imaging and output equipment, including copiers, fax machines, printers, and related supplies and services such as software, paper, and toner. Ricoh has locations across the United States. Ms. Gleason worked for Ricoh from August 2008 until she resigned on March 31, 2010. She worked in its East Florida Marketplace. That area covers the eastern part of Florida from Jacksonville to Miami. In 2008, and at all times relevant to this proceeding, Al Hines (Mr. Hines) was the East Florida Marketplace manager. His responsibilities included supervising sales personnel and meeting sales quotas. Mr. Hines has worked for Ricoh in various positions for over 31 years. He is based in Ricoh's Maitland, Florida, office near Orlando. In 2008, the organizational structure of the East Florida Marketplace consisted of two group sales managers, one in Central Florida and one in South Florida. These group sales managers reported directly to the Marketplace Manager Mr. Hines. They oversaw sales managers who in turn supervised the various account executives. Also, one sales manager in Jacksonville reported directly to Mr. Hines. The group sales managers and sales managers were responsible for supervising the sales personnel, consisting of major account executives, senior account executives, and account executives. Ricoh assigned major account executives to work with specific large client accounts. Senior account executives were more experienced sales representatives. Senior account executives and account executives were assigned territories. Daytona Beach or a series of zip codes are examples of territories. Ricoh also assigned "vertical markets" for a specific industry, such as "faith-based" institutions to an Account Executive. Ms. Gleason applied and interviewed for an account executive position in the central Florida area of the East Florida Marketplace in August 2008. Mr. Hines, General Sales Manager Cecil Harrelson, and Sales Manager Anthony Arritt interviewed Ms. Gleason. On her resume and in her interview, Ms. Gleason represented that she had 20 years of experience as a sales representative in the office equipment field. Her resume stated that she was "[p]roficient in all areas relating to sales and leasing of copiers, printers, scanners, fax machines and various software solutions. Consistently exceeded sales quota." After the interview, Mr. Hines decided to hire Ms. Gleason for Mr. Harrelson's team. Ricoh hired Ms. Gleason as a senior account executive on August 11, 2008. Mr. Hines initially assigned her to work in the vertical "faith-based" market. In September 2008, a sales manager position for the Daytona Beach/Melbourne territories, overseen by Mr. Hines, opened. Three males applied for the position. Ms. Gleason did not apply. Mr. Hines asked Ms. Gleason if she would be interested in being considered for promotion to sales manager. Although Ms. Gleason had no prior management experience and had only worked for Ricoh for two months, Mr. Hines believed that she would be good in the position and asked her to consider it. Ms. Gleason accepted Mr. Hines' proposal. On September 30, 2008, Mr. Hines promoted her to sales manager. Ricoh provided Ms. Gleason manager training. In April and May of 2009, Ricoh restructured its sales positions. Ricoh changed group sales manager positions to strategic account sales manager positions. It removed all major account executives from teams supervised by sales managers and placed them on the teams supervised by the strategic account sales managers. In central Florida, the reorganization resulted in Cecil Harrelson being moved from general sales manager to strategic account sales manager. The major account executives on Ms. Gleason's team (Mary Cobb, David Norman, and Patrick Mull) and Arritt's team (Todd Anderson and Lynn Kent) were moved onto the new team supervised by Harrelson. All of the major account executives in the East Florida Market supervised by Mr. Hines were transferred to strategic account sales manager teams. On average, the sales managers in the East Florida Marketplace each lost two major account executives due to the reorganization. Mr. Hines required all of the sales managers to hire new sales personnel to bring the number of sales personnel on their teams to expected levels. This is known as maintaining "headcount." Ms. Gleason knew of this requirement. Also it was not new. The responsibility to maintain headcount pre-existed the reorganization. From the time of her hire until early 2009, around the time that the Company reorganized its sales positions, Ms. Gleason had no issues with Mr. Hines or complaints about his management. As a sales manager, Ms. Gleason bore responsibility for supervising a team of sales personnel and for ensuring that her team members met their monthly sales quotas. In addition, Ms. Gleason was responsible for maintaining the headcount on her team. Mr. Hines assigned monthly sales quotas for sales managers. He based the quotas on the types of sales representatives on each team. The monthly quota for major account executives was $75,000. For senior account executives, the monthly quota was $40,000. The monthly quota for account executives was $30,000. Mr. Hines conducted bi-monthly two-day sales meetings with all of the sales managers and office administrators to discuss their sales progress. Managers were expected to discuss their completed and forecast sales. Mr. Hines required managers to stand before the group to report on their progress and discuss any issues with quotas or goals based on month-to-date, quarter-to-date, and year-to-date expectations. Mr. Hines also considered "sales in the pipeline," or anticipated sales, to help determine sales trends for the next 90 days and in evaluating sales personnel. In addition, Mr. Hines conducted weekly sales calls with the sales managers to review their sales progress. During the calls, sales managers were to identify which sales they believed had a strong, "95 percent chance," of closing. Mr. Hines also discussed the performance of each individual sales representative on a manager's team during the calls. The discussions included examination of reasons for non-performance. Around the time of the reorganization, Mr. Hines transferred Senior Account Executive Tina Vargas in the Ocala territory from Mr. Arritt's team to Ms. Gleason's team. Mr. Hines made this transfer, in part, to help Ms. Gleason achieve her headcount and sales quotas. At the time of the transfer, Vargas expected to complete a large, one-time $320,000 sale on which she had been working. Mr. Hines anticipated that this sale would help Ms. Gleason achieve her sales quotas. Ms. Vargas was not located in the Daytona Beach/Melbourne territory. But Mr. Hines expected that Ms. Vargas would require minimal supervision because she was an experienced sales representative. Other managers also supervised sales representatives in multiple or large territories. For example, Cecil Harrelson supervised sales representatives in four areas. They were Orlando, Melbourne, Daytona, and Gainesville. Sales Manager Derrick Stephenson supervised a substantially larger geographic area than Ms. Gleason. His area reached from Key West to West Palm Beach. After the reorganization, Ms. Gleason's sales productivity declined. She also was not maintaining her headcount. The other Sales Managers experienced the same problems initially. But they recovered from the changes. Ms. Gleason never did. For the seven-month period of April through October, Ms. Gleason's record of attaining her quota was as follows: April - 35% or $70,867 in sales May - 196% or $385,452 in sales (Due to Ms. Vargas joining the team with a pending sale; 23% without Ms. Vargas.) June - 31% or $61,136 in sales July - 8% or $12,948 in sales August - 12% or $19,521 in sales September - 11% or $18,261 in sales October - 23% or $36,811 in sales During that same period, Ms. Gleason was the lowest performing sales manager in July (19 points less than the next lowest), August (14 points less than the next lowest), September (33 points less than the next lowest), and October (6 points less than the next lowest). She was the second lowest in June when Mr. Comancho was the lowest with 25% attainment compared to Ms. Gleason's 31%. The attainment percentages for all of the sales managers varied. Each had good months and bad months. After April and May, Ms. Gleason, however, had only bad months. For the months June through October, Ms. Gleason was the only sales manager who did not achieve 50% attainment at least twice, with two exceptions. They exceptions were Mr. Comancho and Mr. Rodham. Mr. Comancho chose to return to an account executive position after Mr. Hines spoke to him about his performance. Mr. Rodham joined Ricoh in October and attained 52% of quota that month. In addition to steadily failing to meet 50% of her quota, Ms. Gleason failed to maintain a full headcount for the same period of time. No male sales managers in Ricoh's East Florida Marketplace had similar deficiencies in meeting sales quota. There is no evidence that any male sales managers in Ricoh's East Florida Marketplace had similar failures to maintain headcount. There is no evidence of sales manager productivity or headcount maintenance for any of Ricoh's other markets. Ms. Gleason tried to improve her headcount by hiring additional sales personnel. She conducted a job fair with the assistance of Ricoh's recruiter. They identified 19 applicants for further consideration and second interviews. Mr. Hines reviewed and rejected all 19. They did not meet his requirement for applicants to have outside sales experience and a history of working on a commission basis. Ms. Gleason was aware of Mr. Hines' requirements. But she interpreted them more loosely than he did. Mr. Hines helped Ms. Gleason's efforts to improve her headcount by transferring four sales representatives to her team. At Ms. Gleason's request, Mr. Hines also reconsidered his rejection of one candidate, Susan Lafue, and permitted Ms. Gleason to hire her. Still Ms. Gleason was unable to reach the expected headcount. David Herrick, one of the individuals who Mr. Hines assigned to Ms. Gleason's team, had already been counseled about poor performance. Mr. Hines directed Ms. Gleason to work with Mr. Herrick until he sold something. This was a common practice with newer sales representatives. Mr. Herrick had also been assigned to male sales managers. Mr. Hines asked Ms. Gleason and Mr. Herrick to bring him business cards from their sales visits. He often did this to verify sales efforts. After Mr. Hines reviewed the cards, he threw them in the trash. But he first confirmed that Ms. Gleason had the information she needed from the cards. Mr. Hines often threw cards away after reviewing them to prevent sales representatives providing the same card multiple times. Ricoh's Human Resources Policy establishes a series of steps for disciplinary action. The first is to provide an employee a verbal warning. The next two steps are written warnings before taking disciplinary action. Mr. Hines gave Ms. Gleason a verbal warning about her performance. He spoke to her about improving sales production and headcount. Ms. Gleason's performance did not improve despite her efforts. Later, Mr. Hines gave Ms. Gleason a written warning in a counseling document dated August 31, 2009. The document stated that her performance had not been acceptable. The counseling memorandum directed Ms. Gleason to reach 65% of her quota. It also said that she was expected to maintain a minimum of seven people on her team and work in the field with her sales representatives at least four days a week. Finally the memorandum advised that failure to perform as directed would result in "being moved to sales territory." Around the end of August 2009, Mr. Hines began counseling Israel Camacho, a male, about his performance. Mr. Comancho decided to return to an account executive position. In September Ms. Gleason achieved 11% of her quota. She also did not maintain her headcount. September 24, 2009, Mr. Hines gave Ms. Gleason a second written counseling memorandum. It too said that her performance was unacceptable. The memorandum required her to produce 80% of her quota and maintain a minimum of seven people on her team. It also cautioned that failure to meet the requirements would result in "being moved to sales territory." Ms. Gleason acknowledges that she understood that if she did not perform to the expected levels that she could be demoted. After the written warning of September 24, 2009, Ms. Gleason's performance continued to be unacceptable. For October, Ms. Gleason had $23,811 in sales for a total attainment of 23% of quota. Again, she did not maintain her team's headcount. Sometime during the June through October period, Mr. Hines criticized Ms. Gleason's management style, saying that she "coddled" her personnel too much. He also directed her to read the book "Who Moved My Cheese" and discuss it with him and consider changing her management style. Mr. Hines often recommended management books to all managers, male or female. There is no persuasive evidence that Ms. Gleason is the only person he required to read a recommended book and discuss it with him. Mr. Hines' comments and the reading requirement were efforts to help Ms. Gleason improve her performance and management. During the June through October period, Ms. Gleason yawned during a manager meeting. She maintains that Mr. Hines' statement about her yawn differed from the words he spoke to a male manager who fell asleep in a meeting. The differences, she argues, demonstrated gender discrimination. They did not. In each instance Mr. Hines sarcastically commented on the manager's behavior in front of other employees. He made no gender references. And the comments were similar. Sometime during the June through October period Mr. Hines also assigned Ms. Gleason to serve in an "Ambassador" role. "Ambassadors" were part of a Ricoh initiative to develop ways to improve the customer experience. There is no evidence that males were not also required to serve as "Ambassadors." And there is no persuasive evidence that this assignment was anything other than another effort to improve Ms. Gleason's management performance. Also during the June through October period Ms. Gleason proposed hosting a team building event at a bowling alley. Someone in management advised her that the event could not be an official company sponsored event because the bowling alley served alcohol. Again, there is no evidence that males were subjected to different requirements or that the requirement was related to Ms. Gleason's gender. During this same period, Ms. Gleason received written and oral communications from co-workers commenting on her difficulties meeting Mr. Hines' expectations. They observed that she was having a hard time and that they had seen Mr. Hines treat others similarly before discharging them. Nothing indicates that the others were female. These comments amount to typical office chatter and indicate nothing more than what the counseling documents said: Mr. Hines was unhappy with Ms. Gleason's performance and was going to take adverse action if it did not improve. On November 12, 2009, Ms. Gleason sent an email to Rhonda McIntyre, Regional Human Resources Manager. Ms. Gleason spoke to Ms. McIntyre that same day about her concerns about Hines' management style. Ms. Gleason said she was afraid that she may lose her job and that she was being set up for failure. Ms. McIntyre asked Ms. Gleason to send her concerns in writing. Ms. Gleason did so on November 13, 2009. Ms. Gleason's e-mail raised several issues about Mr. Hines' management. But Ms. Gleason did not state in her email or her conversations that she was being discriminated against or treated differently because of her gender. Ms. Gleason never complained about gender discrimination to any Ricoh representative at any time. On December 1, 2009, Mr. Hines demoted Ms. Gleason from sales manager to senior account executive. He assigned her to work on Mr. Arritt's team. Ms. Gleason had no issues with Mr. Arritt and no objection to being assigned to his team. Mr. Hines has demoted male sales managers to account executive positions for failure to attain quotas or otherwise perform at expected levels. The male employees include Ed Whipper, Kim Hughes, and Michael Kohler. In addition, Mr. Comancho was the subject of counseling before he chose to return to an account executive position. After Mr. Hines demoted Ms. Gleason, he promoted Diego Pugliese, a male, to sales manager. He assigned Mr. Pugliese the same territory that Ms. Gleason had. When Mr. Hines assigned Ms. Gleason to Mr. Arritt's team, Mr. Hines instructed Mr. Arritt to give Ms. Gleason two territories with substantial "machines in field" (MIF) to buttress Ms. Gleason's opportunity to succeed in her new position. Mr. Arritt assigned Ms. Gleason the two territories that records indicated had the most MIF. Ms. Gleason asserts that the preceding account executives maintained the records for the area poorly and that the new territories had no greater MIF than other areas. That fact does not indicate any intent to discriminate against Ms. Gleason on account of her gender. In January 2010, after Ms. Gleason's demotion, Mr. Harrelson invited Ms. Gleason to attend a non-company sponsored, employees' poker party. She had been invited to other employee poker parties and attended some. Mr. Harrelson withdrew the invitation saying that Mr. Hines was attending and that Mr. Harrelson thought Ms. Gleason's presence would be uncomfortable. Mr. Harrelson did not say that Mr. Hines had made this statement. And Mr. Harrelson was not Ms. Gleason's supervisor. Nothing about the exchange indicates that Ms. Gleason's gender had anything to do with withdrawal of the invitation. The incident seems to be based upon the natural observation that Mr. Hines might be uncomfortable socializing with someone he had recently demoted. After her demotion, Ms. Gleason asked Mr. Arritt to go with her on a "big hit" sales call. Ms. Gleason claims that Mr. Arritt told her that Mr. Hines told him not to go on sales calls with her. That may have been Mr. Arritt's interpretation of what Mr. Hines said. Mr. Hines had told Mr. Arritt that because Ms. Gleason was an experienced sales representative Mr. Arritt should focus his efforts on the less experienced sales representatives on his team. This was a reasonable observation. There is no evidence indicating that Mr. Hines treated Ms. Gleason differently in this situation than he had similarly experienced males. Ms. Gleason brought this issue to Ms. McIntyre's attention. The issue was resolved. Mr. Hines told Mr. Arritt that if Ms. Gleason wanted more assistance then Mr. Arritt should attend meetings with Gleason and provide any other assistance she believed she needed. Ms. Gleason had no other issues with Mr. Hines during the remainder of her employment. On March 31, 2010, Ms. Gleason submitted a memorandum stating that she was resigning "effective immediately." There is no evidence of derogatory or harassing comments by Mr. Hines or any other Ricoh representative toward Ms. Gleason referring to gender. There is no evidence of sexually suggestive comments or actions by a Ricoh representative. There also is no evidence of physically intimidating or harassing actions by any Ricoh representative.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Florida Commission on Human Relations deny the Petition of Tamara A. Gleason in FCHR Case Number 2010-01263. DONE AND ENTERED this 18th day of February, 2011, in Tallahassee, Leon County, Florida. S JOHN D. C. NEWTON, II 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 18th day of February, 2011. COPIES FURNISHED: Denise Crawford, Agency Clerk Florida Commission on Human Relations 2009 Apalachee Parkway, Suite 100 Tallahassee, Florida 32301 Kimberly A. Gilmour, Esquire 4179 Davie Road, Suite 101 Davie, Florida 33314 David A. Young, Esquire Fisher & Phillips LLP 300 South Orange Avenue, Suite 1250 Orlando, Florida 32801 Larry Kranert, General Counsel Florida Commission on Human Relations 2009 Apalachee Parkway, Suite 100 Tallahassee, Florida 32301
The Issue The issue for consideration in this matter is whether Petitioner, Classie Sales, Inc. (Classie), is entitled to be compensated for produce sold and delivered to Respondent, Tolar Farms (Tolar), and if so, in what amount.
Findings Of Fact On June 30, 1990, Roger Harloff, on behalf of Roger Harloff Farms, and John A. Tipton, Secretary of Classie Sales, Incorporated, a sales agent founded by Harloff, entered into a written agreement whereby Classie would serve as sales agent for all sales of produce grown by or on Roger Harloff Farms. Between October 17, 1995 and December 9, 1995, Classie, on behalf of Roger Harloff Farms, sold watermelons with a total net sales price of $170,839.27 and tomatoes with a total net value of $1,720.00 to Tolar Farms. These sales were not direct sales to Tolar but transactions wherein Tolar was to sell the produce to whomever would buy it at an agreed price and would withhold its 3/4 per pound commission from the sales price, remitting the balance to Classie. Trucks arranged for by Tolar picked the produce up at the growing field and at the time of pickup, Classie issued to Tolar a packet jacket for each load sold. As the loads were sold Tolar would issue a ticket for that load which bore the shipping date, the lot number, the farmer, the transporting trailer's tag, the truck broker, the truck driver, and the weight of the product. Sometime later, when the produce was sold, Tolar issued an invoice bearing Classie Sales' logo, reflecting Tolar as the buyer and showing the lot number which corresponded to the load ticket, the shipping date, a description of the produce, the quantity, the unit price for that load, and the extended price from which was deducted Tolar's commission and an unspecified assessment. These documents were then forwarded to Classie. The terms of the sale between Tolar and Classie, on behalf of Harloff, were loose. The invoice documents reflected a net due 21 days after invoice date. The first delivery in issue here was made on October 17, 1995, and 21 days after that is November 7, 1995. The amount reflected by the deliveries made after that date is $27,509.72. Respondent, Preferred, claims that since Classie continued to make deliveries to Tolar's drivers after it was not paid within 21 days after the first shipment, it failed to mitigate its damages and should not be paid for any deliveries made after November 7, 1995. Classie was not paid for any of the instant invoices by Tolar, but Classie did not become concerned about Tolar's failure to make timely payment until January 1996. Tolar's payment and pricing practices were no different during this time than in years past. Typically, Tolar would start out quickly notifying Classie of the sales. As the number of shipments grew, however, the time for notification grew longer. It must be noted that less than two months transpired from the date of the first shipment in issue to the last.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Department of Agriculture enter a Final Order in this matter directing Tony and Robert Tolar, d/b/a Tolar Farms, to pay Classie Sales, Inc., the sum of $172,559.27. In the event this sum is not paid by Tolar, the Department should apply the bond posted by Preferred National Insurance Company in the amount of $75,000.00. DONE and ENTERED this 15th day of July, 1996, in Tallahassee, Florida. ARNOLD H. POLLOCK, Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 15th day of July, 1996. APPENDIX TO RECOMMENDED ORDER, CASE NO. 96-1776A To comply with the requirements of Section 120.59(2), Florida Statutes (1995), the following rulings are made on the parties' proposed findings of fact: Petitioner's Proposed Findings of Fact. 1. - 13. Accepted and incorporated herein. Accepted and incorporated herein as the testimony of the witness. Not a Finding of Fact but a comment on the issues. Accepted and incorporated herein. Respondent Preferred's Proposed Findings of Fact. Preferred accepted all of Classie's Proposed Findings of Fact but suggested an amendment to Number 14. The suggested amendment was made a part of the Findings of Fact made by the Hearing Officer. Respondent Tolar's Proposed Findings of Fact: Tolar consented and agreed to all Petitioner's Proposed Findings of Fact except for Number 9. The substance of Tolar's objection to Classie's Number 9, relating to a provision for a commission, has been made a part of the Findings of Fact of the Hearing Officer. COPIES FURNISHED: Hywel Leonard, Esquire Carlton Fields Post Office Box 3239 Tampa, Florida 33601-3239 Scott R. Teach, Esquire Meuers and Associates, P.A. 2590 Golden Gate Parkway, Suite 109 Naples, Florida 34106 David A. Higley, Esquire Higley and Barfield, P.A. The Maitland Forum 2600 Lake Lucien Drive, Suite 237 Maitland, Florida 32751-7234 Honorable Bob Crawford Commissioner of Agriculture The Capitol, PL-10 Tallahassee, Florida 32399-0810 Richard Tritschler General Counsel Department of Agriculture The Capitol, PL-10 Tallahassee, Florida 32399-0810 Brenda Hyatt, Chief Bureau of Licensing and Bond Department of Agriculture 508 Mayo Building Tallahassee, Florida 32399-0800
