The Issue The issue is whether Respondent committed an act of discrimination in employment based on age, in violation of Section 760.10(1)(a), Florida Statutes.
Findings Of Fact Petitioner was born on December 11, 1951. She was employed by Respondent from 1977 until December 27, 1999, at which time Respondent terminated her. During the entire term of her employment, Petitioner has served as an outside sales representative. As an outside sales representative, Petitioner was typically assigned a territory within which she was to serve existing advertisers and develop new advertisers. Petitioner often helped customers prepare their advertisements and plan and budget their advertising campaigns. While employed with Respondent, Petitioner helped train Mr. Fine, who has been employed with Respondent for nearly 13 years. Mr. Fine is currently the National Advertising Director, but, during the time in question, served as the Broward Advertising Sales Manager, and, as such, he supervised Petitioner. He served as the Broward Advertising Sales Manager from September 1998 through February or March 2000. While Broward Advertising Sales Manager, Mr. Fine supervised eight sales representatives. Mr. Fine found that Petitioner was strong in persuasiveness, but weak at times when she displayed a negative attitude and sense of entitlement to her job and her way of doing her job. She also treated customers inconsistently. In February 1999, Mr. Fine disciplined Petitioner for her handling of an internal fax that the Broward office received from an employee of Respondent in another office. The fax was addressed to a member of management and contained salary information about five persons in the office. Petitioner happened to find the fax and revealed its contents to her coworkers before delivering it to the addressee. When Mr. Fine reprimanded Petitioner for her actions, she denied any wrongdoing. Next, Mr. Fine began receiving complaints from various of Petitioner's customers, mostly over a relatively short period of time. A marketing person at the Swap Shop complained that Petitioner was brusque in dealing with her. Another customer representative mentioned that Petitioner had criticized one of her coworkers in suggesting that the customer place all of its business with Petitioner. A similar situation arose with another customer, to whom Petitioner claimed that its outside sales representative handled only smaller accounts. A representative of the Florida Philharmonic Orchestra requested that Mr. Fine assign it a new outside sales representative because Petitioner raised her voice and talked down to its young, inexperienced marketing person. On June 29, 1999, Mr. Fine sent a memorandum to his supervisor, Donna Sasser, who was then Advertising Director. The memorandum describes Petitioner as "dynamite" and expresses concern as to when she "will blow and who she will hurt." At the time, Mr. Fine was concerned that Petitioner's actions might undermine morale among the other staff for whom he was responsible. Ms. Sasser advised Mr. Fine to communicate to Petitioner specific expectations in terms of job performance and customer interaction in particular. Mr. Fine met with Petitioner and detailed his problems with her job performance and his expectations for improvement. By memorandum dated July 30, 1999, Mr. Fine memorialized the meeting, including specific customer complaints, and warned that Petitioner's job "will end, even within the next few weeks, if you are unable to achieve the following: no additional customer complaints, monthly goals [met] on a consistent basis; positive, collaborative attitude with co-workers, customers, and managers; [and] acceptance of responsibility for what goes well and what does not go well." Petitioner resisted Mr. Fine's criticism. By memorandum dated August 22, 1999, she defended her actions by pointing to shortcomings elsewhere within Respondent. Significantly, the memorandum does not address the complaints about brusque, discourteous treatment of employees of customers. At this point, Mr. Fine, who was a young manager, was legitimately concerned about whether Petitioner's attitude would undermine his ability to do his job. Mr. Fine resolved to assess over the next three to six months whether Petitioner met the goals that he stated in the July 30 memorandum. In late October 1999, a representative of the Cleveland Clinic complained about Petitioner's handling of its account. The complaints included Petitioner's "flip attitude" and "lack of professionalism." Two months later, Mr. Fine received a more serious complaint because it involved a loss of revenue to Respondent and the advertiser. Due to some miscommunication, Respondent published the wrong advertisement for a customer. When the customer's representative telephoned Petitioner and complained, she blamed someone at the Fort Lauderdale Sun Sentinel, who had supplied her the wrong advertisement for publication. When she did not call him back on the day that she had promised, the customer representative called Respondent, complained about the poor handling of the account, noted the reduction in advertising from his company over the past year as compared to the prior year, and requested a different outside sales representative. Mr. Fine consulted with Ms. Sasser and Janet Stone, the Human Relations specialist assigned to advertising. The three agreed that Respondent should terminate Petitioner. Their decision was submitted through four levels of management--up to the level of Publisher--and each level approved the decision before it was implemented. On December 27, 1999--six days after the receipt of the last complaint--Mr. Fine and Ms. Stone met with Petitioner and told her that she had been terminated. At the hearing, Petitioner presented evidence of a contemporaneous complaint about age discrimination that she had made to a Human Relations specialist who had since left the employment of Respondent. Respondent contested this assertion, but Petitioner's August 22 memorandum states that, as a "female over 40 I feel the harassment and stress that you have been putting on me is totally unnecessary." Although not a formal complaint concerning age discrimination, this memorandum is an early mention of Petitioner's age within the context of harassment. Based on the testimony of coworkers, Mr. Fine was a high-pressure manager, given to yelling, but he did not make age-related comments to Petitioner. Even if Petitioner had timely made comprehensive complaints about age discrimination, the record in this case does not support her claim that her termination was due to age discrimination. Mr. Fine hired two outside sales representatives over 40 years old, and the only other outside sales representative whom he fired was under 40 years old. More importantly, he treated employees the same without regard to age. Most importantly, Petitioner's job performance provided Mr. Fine with ample reason to fire her. Without regard to the quality of the support that Petitioner received, customer satisfaction is paramount in advertising. In a competitive environment, Mr. Fine justifiably sought satisfaction of all customers, not just favored customers. Mr. Fine could not reasonably allow Petitioner to continue to treat discourteously representatives of advertisers, regardless of the merits of her claims of inadequate support. Past evaluations suggest that interpersonal relations was never Petitioner's strength. Despite an obvious talent at advertising sales and considerable experience, Petitioner's frustrations with the perceived incompetence of her coworkers and customers' employees weakened her interpersonal skills beyond a critical point, so that her other strengths no longer offset this important deficit.
Recommendation It is RECOMMENDED that the Florida Commission on Human Relations enter a final order dismissing Petitioner's Charge of Discrimination. DONE AND ENTERED this 2nd day of July, 2002, in Tallahassee, Leon County, Florida. ROBERT E. MEALE 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 2nd day of July, 2002. COPIES FURNISHED: 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 Jan Hall-Szugye 3834 Panther Creek Road Clyde, North Carolina 28721 Ellen M. Leibovitch Adorno & Yoss, P.A. 700 South Federal Highway, Suite 200 Boca Raton, Florida 33432
The Issue The issue in this case is whether Respondent is guilty of dishonest dealing by trick, scheme or device in any business transaction in violation of Subsection 475.25(1)(b), Florida Statutes (2008),1 and if so, what penalty should be imposed.
Findings Of Fact Petitioner is the state agency responsible for issuing real estate sales associate licenses and monitoring compliance with all statutes, rules, and regulations governing such licenses. Respondent was at all times relevant to this proceeding a licensed real estate sales associate in the State of Florida and held License No. 3115665. In March 2006, Respondent was introduced to Willie Belle Lewis (Lewis) by a mutual acquaintance. Lewis was interested in selling her house, and Respondent agreed to work for Lewis in that regard. On March 13, 2006, Lewis and Respondent entered into an Exclusive Right of Sale Listing Agreement (the "Agreement"). Under the Agreement, Respondent was to act as Lewis' sales agent for sale of the house. Pursuant to paragraph 7 of the Agreement, Respondent was to receive a commission of six percent of the purchase price. Respondent initially requested a seven percent commission which was the ordinary and customary amount at that time, but agreed to six percent in deference to Lewis' request (and due to the fact that Lewis had recently lost her grandmother and Respondent empathized with her, having just lost her mother). In one version of the Agreement admitted into evidence, there is a notation that any cooperating real estate agent (presumably a buyer's agent) would receive a commission equal to three percent of the purchase price, i.e., one-half of Respondent's six percent commission. Another version of the Agreement admitted into evidence did not address sharing the commission with a cooperating agent. At some point in time (which was not clearly defined during testimony at final hearing) Lewis and Respondent re-negotiated the amount of Respondent's commission.2 Lewis maintains that the re-negotiated commission was three percent; Respondent says the re-negotiated commission was four percent. Respondent's testimony was more credible on this point. The amount of the new commission was not reduced to writing or indicated on either version of the Agreement. There is no indication, for example, what Respondent's commission would have been if a cooperating agent had been involved. It is highly unlikely that Respondent or any other agent would agree to a two percent commission, i.e., one-half of four percent (or 1.5 percent, one-half of three percent). Once the Agreement was signed, Respondent immediately began efforts to sell the Lewis house. Respondent invited Lewis to her (Respondent's) house and offered Lewis plants and flowers from Respondent's yard. Respondent and Lewis dug up various plants and transferred them to Lewis' yard to generate some "curb appeal," i.e., to dress it up for potential buyers. Within days, a potential buyer was found. A Contract for Sale and Purchase (the "Contract") was entered into between Lewis and Mrs. Bibi Khan. Respondent was listed as the seller's agent; no agent was indicated for the buyer. In fact, Respondent agreed to act as buyer's agent as well, performing services as both an agent and a broker. Again, there were two versions of the sales Contract admitted into evidence. On one version, Respondent's signature included only her first name; on the other it included her first and last name. On one version of the Contract, there appears to be "white-out" on Respondent's signature line. Contained and legible under the whited-out portion of the signature is the phrase "3%." Respondent admits she whited out the three percent figure, but that it was done after the closing occurred. The three percent figure appearing at that place in the Contract is confusing. It only makes sense if that was meant to represent Respondent's portion of a six percent commission split between a buyer's agent and a seller's agent. Respondent explained that she whited out the figure because it was not written in both places it was supposed to be. Rather than going through the process of re-doing the entire Contract and re-distributing it to all pertinent parties, she whited it out in one place. The explanation is plausible. However, it seems an unnecessary action inasmuch as the closing had already occurred. When the parties arrived at closing on April 17, 2006, the closing documents--including the HUD Settlement Statement-- indicated a six percent commission for Respondent (as originally stated on the Agreement). Lewis vehemently objected to the commission, saying that it should be three percent as verbally agreed to by her and Respondent.3 Respondent acquiesced at closing and, in front of witnesses, said the commission should be three percent. She asked that a letter be drafted by the closing agent reflecting a three percent commission. In effect, Respondent re-negotiated her commission at that time. She rues having done so and says she was confused, but she did so nonetheless. The closing was only the third closing Respondent had taken part in since becoming licensed. She was not very experienced with the process and seemed to be thinking she was getting a four percent commission, even when three percent was being discussed.4 It is clear, however, that Respondent did verbally agree to a three percent commission during the closing. The closing agent told Lewis to return on Monday and she would re-calculate the commission and provide Lewis with a final check in the appropriate amount. Meanwhile, Respondent attempted to contact Lewis over the weekend to discuss the discrepancy. Respondent wanted to remind Lewis they had agreed on four percent despite what she said at the closing. All attempts at communication with Lewis over the weekend were futile. When Lewis returned to the closing office on the following Monday, she found the check to still be in error as it reflected a four percent commission instead of a three percent commission. Apparently when Respondent advised the closing agent about her mistake regarding the amount of the commission, Respondent still maintained that the verbal agreement was for four percent. This was contrary to her statements during the closing and is not substantiated by any written documentation. Respondent directed the closing agent to issue a check reflecting a four percent commission, instead of the six percent commission reflected on the Agreement. Lewis ultimately, under protest, accepted her $74,264.92 check reflecting a four percent commission to Respondent. The check contained a shortage of $1,600, if a three percent commission had been applied. Lewis continued to seek repayment of the $1,600 she believed she was entitled to receive. Subsequently, Respondent discussed the entire dispute with her sales team and decided that the disputed amount ($1,600) was not worth fighting about. A check was then sent to Lewis in that amount.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered by Petitioner, Department of Business and Professional Regulation, Division of Real Estate, imposing a fine of One Thousand Dollars ($1,000) against Respondent, Marian Lemon Coaxum. DONE AND ENTERED this 26th day of November, 2009, in Tallahassee, Leon County, Florida. R. BRUCE MCKIBBEN 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 26th day of November, 2009.
Findings Of Fact 1.-2. Adopted in Findings of Fact 3 & 4, respectively. Adopted in Findings of Fact 5, 6, 7 and 8. 3.* Adopted in Findings of Fact 9 and 10. Adopted in Findings of Fact 11 and 12. Adopted in Finding of Fact 13. Adopted in Findings of Fact 14 and 15. 7.-10. Adopted in Findings of Fact 16, 17, 2 and 11, respectively. * There were two paragraphs numbered 3. COPIES FURNISHED: Ronald Thomas, Executive Director 133 Larson Building 200 East Gaines Street Tallahassee, Florida 32399-0955 Susan Kirkland, Esquire General Counsel 452 Larson Building 200 East Gaines Street Tallahassee, Florida 32399-0955 Aletha L. Dunn, Pro Se Thumbprint Copy & Printing Center 3723 Southside Boulevard Jacksonville, Florida 32216
Recommendation Based upon the foregoing Findings of Fact, Conclusions of Law, evidence of record, the candor and demeanor of the witness, it is, therefore, RECOMMENDED that a Respondent enter a Final Order denying Petitioner's request for certification as a Minority Business Enterprise. Respectfully submitted and entered this 25th day of March, 1989, in Tallahassee, Florida. WILLIAM R. CAVE 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 28th day of March, 1989. APPENDIX TO RECOMMENDED ORDER IN CASE NO. 88-5533 The following constitutes my specific rulings pursuant to Section 120.59(2), Florida Statutes, on all of the Proposed Findings of Fact submitted by the Respondent in this case. The Petitioner did not file any posthearing Proposed Findings of Fact and Conclusions of Law.
The Issue As stipulated by the parties and as reflected in the Amended Administrative Complaint dated September 28, 1992 the issues for resolution are whether Respondent misrepresented property for sale at auction or made false promises concerning the use, value or condition of such property; whether this conduct demonstrates bad faith or dishonesty; whether Respondent failed to appropriately conduct and maintain control of the auction; and whether the Respondent used false bidders, cappers or shills. (Joint Prehearing Statement filed 9/28/92) If those violations occurred, an appropriate penalty must be determined.
Findings Of Fact Respondent, Ronald Ray Kool, Sr., (Kool) has been licensed continually as an auctioneer in the State of Florida since approximately 1988, having been issued license number AU 0000510. He is the registered owner of the business, A-Plus Auctions, which is issued license number AB 0000071. On July 9, 1990, Respondent contracted with Dr. Florence Alexander for the conduct of an auction at the Ebon Center, in Titusville, Florida. The contract was renegotiated, and a subsequent written contract was entered between the parties on July 26, 1990, for the auction to be held on July 28, 1990. The latter contract provided that the auction was a reserve auction, that is, minimum bids were provided by Dr. Alexander for the items offered for sale. Prior to the auction, on July 27, 1990, some items originally included in the list for the auction were sold by Ebon Galleries, and numerous other items were substituted. This was satisfactory to Kool as the potential commission on the substitute items was considerably larger. This transaction constituted an oral amendment by the parties. As advertised, the auction commenced at 10:00 a.m., July 28, 1990 at the Ebon Center in Titusville. The goods for sale were on display and available for inspection by the bidders prior to, and during the auction in a large warehouse area where the auction was being held. The items were mostly oriental pots, vases, lamps, ceramic figures, mugs, frames, and other decorator pieces and bric-a-brac. There were approximately 200-250 bidders. As they entered the auction area all bidders were given a perforated card to fill out. The lower portion included their name, address, phone number and assigned bidder identification number. This was detached and given to the auction clerk. The top portion was retained by the bidder and included the assigned bidder number and this text: EVERYTHING MUST BE PAID IN FULL ON THE DAY OF THE AUCTION regardless of when it is picked up. Everything will be sold "as is, where is", with no guarantees of any kind, regardless of statement of condition made from the auction block. Buyers shall rely entirely on their own inspection and information Every effort is made to "guard" merchandise throughout the auction; however, the bidder becomes solely responsible for all items purchased by him immediately following his winning bid. Therefore, he is advised to further guard his items at his own discretion. The Bidder is responsible for knowing which items he is bidding on. If he is unsure, he should inquire or not bid. When you become the winning bidder at auction you have effected a contract and will be expected to pay for items in which you were evidenced to be the successful bidder. Auctioneer will not honor "mistakes". The Auctioneer reserves the right to accept bids in any increment he feels is in the best interest of his client, the seller. The Auctioneer reserves the right to reject the bidding of any person whose conduct, auctions, or adverse comments he feels are not in the best interest of the seller. (Petitioner's Ex. #14, deposition of Kool, ex. 6 to deposition) At the commencement of the auction Kool announced various ground rules or terms of the auction, including the fact that this was not an absolute auction, that bidders had an obligation to inspect merchandise because they were responsible for what they bought and that there was a ten percent buyer's premium on the sales. "Buyer's premium" is a surcharge on the bid price, which surcharge is received by the auctioneer, along with his commission from the seller. Kool also introduced his employees and informed the gathered bidders that he and his employees would bid if they wished and the bidders would know when employees were bidding. Kool and his employees were assigned bidder numbers 502 through 509. The male employees wore gray slacks and gray shirts with "A-Plus Auctions" embroidered on the shirts. The women employees wore blue dresses with "A-Plus Auctions" inscribed. The employees were up front working behind the table and in front of the auctioneer. When they bid, they raised their hands like anyone else. Max Algase and Herbert Michaels arrived at the auction just as the introduction was being completed. Max Algase was assigned bidder number 569 and received the card described above. Max Algase describes himself as a "liquidator"; he buys and sells merchandise, including entire stores or chains of stores and occasionally attends auctions. Herbert Michaels is a good friend and sometimes business associate of Algase. Michaels is on disability retirement from Zayre's Department Stores, where he was merchandise manager for twenty years and was responsible for twenty-eight stores' apparel, comprising $85 million in sales. At some point during the auction, Shirley Thompson (now Shirley Thompson Effron) sat down next to the two men and introduced herself. The three individuals decided to form a partnership, each putting up a third for the purchases at the auction, and then reselling the items later in a shop that they would open for that purpose. Algase considered the venture "a lark" rather than a serious business deal. (Transcript, p. 51) So many purchases were made by bidder number 569 (Algase, or Liquidators III, the ad hoc partnership) that during the course of the auction, the computer program utilized by Kool ran out of data space for that number, and another number, 626, was assigned. During the auction the seller, Dr. Alexander obtained bidder number 604 and she purchased three items. When Kool recognized her as a purchaser, he turned the auction block over to another auctioneer and confronted Dr. Alexander, telling her that it was inappropriate for her to bid. The items she had purchased were put back up for sale. Towards the end of the auction, Dr. Alexander approached Kool and asked about placing some racks of clothing up for sale. He agreed, reluctantly, because clothing sales are time-consuming, and the racks of clothes were wheeled out to the warehouse floor. The clothes were in two categories, one group was a large number of heavy woolen items, coats, capes, jackets, suits and the like; the other, smaller group was mostly lightweight dresses, bathing suits and similar items. Kool announced the clothes would be placed for sale and invited the bidders to go look at them. About five or ten minutes later bidding started on the items, "bidders choice". That means the individual who bid highest would get the first choice of the multiple items. The reserve, or lowest bid acceptable, was $75.00 each. After ten or fifteen minutes, only a few items had been sold and Kool told Dr. Alexander to remove them from the floor. She and her father wheeled the racks back into the front showroom of the building. One of the participants interested in the clothing was Herbert Michaels. He inspected the racks, felt and touched the clothing and convinced Algase that the items were well worth $35.00 a piece. The partners bought the woolen items for $35.00 each, and the lighter items at $10.00 each. All three partners have a different version of how the sale took place. Herbert Michaels claims that Kool, while off the auction block, negotiated the sale with Max Algase and Shirley Thompson Effron; Max Algase claims that after the woolen items were offered at "bidders choice", they were offered from the block at "bidder take all", and he won the bid at $35.00 apiece. Shirley Thompson Effron claims that after the clothing was removed from the floor, Dr. Alexander approached their group and negotiated the sale with Max Algase. The latter version is consistent with Kool's testimony and that of his other witnesses and is credited. The latter version is also consistent with a tally sheet identified by Kool as a paper brought to him by Dr. Alexander approving the transaction. (Petitioner's Ex. 14, Kool deposition, exhibit 6 to the deposition) During the clothing deal, Algase, Herbert Michaels and Shirley Thompson Effron went to the showroom while Kool's employees counted the items. There were 550 woolen items and 88 lighter items, with a total cost of $19,250.00 for the former and $880.00 for the latter. The counts are reflected on the tally sheet given to Kool. Algase paid for these and other items purchased at the auction with a check. Later, he made arrangements with Mrs. Kool to substitute cash and he did so on Tuesday of the following week, when he had all of the clothing loaded into large trucks for removal from the Ebon Center. The Liquidators III venture was not successful. Few of the items were resold as they had hoped. The relationship between Shirley Thompson Effron and Max Algase deteriorated and he is suing her husband's corporation. On November 7, 1990, Shirley Thompson Effron, as secretary of the partnership, and at the insistence of Max Algase, sent a letter to Ron Kool complaining that they bargained for, and bought, coats, but that more than half of the items were dresses, suits or skirts. The letter demanded "full restitution immediately". (Petitioner's Ex. 11) In March 1991, Algase complained to the Department of Professional Regulation, and Investigator Bobby Hunter conducted interviews and gathered documents, including the records maintained by A-Plus Auctions for the July 1990 auction. Those records reflect the bidder number 500 for many items, with a "0" final settlement price. That is a number assigned by Mrs. Kool, a licensed auctioneer and the business manager for the company, to account for items which were offered for sale but did not reach the minimum bid set by the seller, Dr. Alexander. Bidder numbers assigned to A-Plus employees show purchases of several items, mostly small, less than $10.00, the largest amount being $40.00. The records also reflect that the 550 woolen items bought by Algase and his partners are described as "coats" on the final settlement printout. This description was assigned by an employee of A-Plus Auctions when the items were offered for sale. There is no credible evidence that Kool described the items from the auction block as only coats. Rather, he described woolen clothing, including alpaca coats from Central or South America. Herbert Michaels conceded that he knew the items were not all coats before the sale was made because he had inspected the racks on the floor. He found capes as well as coats, and tops to ensembles. (Transcript, p. 34) Several expert auctioneers testified on behalf of the parties, one on behalf of Petitioner and two for the Respondent, with a combined experience of 62 years in auctioneering. Their opinions did not vary substantially. They expressed concern with the fact that the owner, Dr. Alexander, managed to bid on several lots, but they agreed that Kool handled the problem properly after he discovered it. They also agreed that side deals like the one involving the clothing deprive the general public of an opportunity to participate, but they are not illegal so long as records are kept and funds, including the commission, are disbursed and accounted for. The experts described the practice, more common in the past than now, of "dropping on the house number". An auctioneer can falsely raise bids by acknowledging a phony bid. If the phony bid is not raised, the auctioneer is stuck with it and announces the sale to a "house number", not associated with any real bidder, but in the words of R. L. Huntsinger, bid by "Mr. Wall", "Mr. Floor", "Mr. Ceiling", etc. The appearance of the number 500 without a bidder identified, in Kool's records of the auction, raised the suspicion that this illegal practice was used. Respondent and his witnesses adequately explained why the number was used, however, to account for items that did not reach the reserve minimum bid. Even Petitioner's expert conceded that he could not say that the practice was used in this case. (Transcript, p. 180) Petitioner's expert also opined that any errors committed by Respondent were due to lack of knowledge and not because of an intent to defraud the public or the seller. (Transcript, p. 193) The weight of evidence, taking into consideration the demeanor and credibility of the witnesses, fails to support a finding that Respondent Kool committed the violations alleged. He did not misrepresent the property being sold. The clothing was described as such, and not as only "coats". The complainants, sophisticated and experienced business people, had an opportunity to inspect the items and knew what they were buying. There is no evidence of bad faith or dishonesty and the evidence presented by Respondent effectively forecloses a finding that he used or permitted the use of false bidders. Although Max Algase was not required to re-register when he was assigned a subsequent number, the records produced at hearing confirm the testimony of Mrs. Kool that Algase was bidder number 626. The auction on July 28, 1990 was an all-day affair with a high volume of goods to be moved. As principal auctioneer, Kool was in charge and maintained control. He hired experienced, competent employees and utilized only licensed auctioneers in calling the bids. Certain tasks were appropriately delegated to his wife, also a licensed auctioneer. Recordkeeping was thorough and substantially accurate. While Respondent regrets that the seller, Dr. Alexander, was given a bidder number and managed to bid, her participation, as concluded below, is not prohibited.
Recommendation Based on the foregoing, it is, hereby, RECOMMENDED: That a final order be entered finding no violation by Respondent and dismissing the amended administrative complaint. DONE AND RECOMMENDED this 24th day of May, 1993, in Tallahassee, Leon County, Florida. MARY CLARK 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 24th day of May, 1993. APPENDIX TO RECOMMENDED ORDER, CASE NO. 92-3112 The following are specific rulings on the findings of fact proposed by the parties: Petitioner's Proposed Findings 1.-2. Adopted in paragraph 1. Adopted in paragraph 2. Rejected as irrelevant. Included in paragraph 3. Rejected as irrelevant. Adopted in paragraph 4. Rejected as irrelevant (see paragraph 3.) Rejected as irrelevant. Included in paragraph 9. Adopted in paragraph 8. 12.-14. Rejected as unnecessary. The clothing was not described at auction as only coats. Rejected as contrary to the weight of evidence. (see 12-14, above) Rejected as unnecessary. Adopted in paragraph 11. 18.-19. Adopted in paragraph 12. Rejected as unnecessary, but addressed by implication in paragraph 21. Adopted in paragraph 13. Adopted in paragraph 14. Adopted in paragraph 13. and 14. Addressed in paragraph 21, but the implication of illegality is rejected as contrary to the law and rules. Rejected as irrelevant. Adopted in paragraph 16. Rejected as unnecessary. Adopted in summary in paragraph 16. Rejected as contrary to the weight of evidence. 30.-31. Rejected as irrelevant, and contrary to the weight of evidence. Adopted in paragraph 17. Rejected as contrary to the weight of evidence and a misstatement of the expert's testimony. The witness was responding to a hypothetical question. 34.-35. Adopted in paragraph 6. 36. Addressed in paragraphs 21. and 26. 37.-44. Rejected as unnecessary. 45. Adopted in paragraph 10. 46.-50. Rejected as immaterial. 51. Rejected as contrary to the weight of evidence. "Control" also means delegation to competent staff. See Rule 21BB-5.001(2), F.A.C. 52.-55. Rejected as irrelevant. These proposed facts do not relate to any alleged violation of statute or rule. Respondent's Proposed Facts 1.-3. Adopted in paragraph 1. 4. Adopted in paragraph 2. 5.-6. Adopted in paragraph 4. 7. Adopted in paragraph 5. 8. Adopted in paragraph 7. 9. Adopted in paragraph 2. and 6. 10. Adopted in paragraph 4. 11. Adopted in paragraph 5. 12. Adopted in paragraph 6. 13. Adopted in paragraph 19. 14. Adopted in paragraph 10. 15. Adopted in paragraph 11. 16. Adopted in paragraph 8. 17. Adopted in paragraph 15. 18. Adopted in paragraph 12. 19. Adopted in paragraph 15. Rejected as unnecessary. Adopted in paragraph 26. Rejected as unnecessary; included by implication in paragraph 24. COPIES FURNISHED: Anthony Cammarata, Senior Attorney Department of Professional Regulation 1940 North Monroe Street, Suite 60 Tallahassee, Florida 32399-0792 Joseph E. Miniclier, Esquire 1970 Michigan Avenue Building E Cocoa, Florida 32924-8248 Jack McRay, General Counsel Department of Professional Regulation 1940 North Monroe Street, Suite 60 Tallahassee, Florida 32399-0792 Suzanne Lee, Executive Director Department of Professional Regulation Board of Auctioneers 1940 North Monroe Street, Suite 60 Tallahassee, Florida 32399-0792
Findings Of Fact Lee County School District (District) Invitation to Bid #4908 (ITB) was provided to the vendors on December 9, 1992. The ITB sought bids for 61 hardware and tool items to be used in the District Supply Department. The District maintains an inventory of hundreds of miscellaneous hardware items. Quantities of available materials are monitored through a computerized system which is used to generate a list of items which need to be replenished. The District has historically utilized ITB's to acquire hardware items in order to maintain appropriate inventory levels. Eight sealed bids were opened on January 6, 1993 at 2:00 p.m. Bids were submitted by Parker-Mahn Ace Hardware, W.W. Grainger, Action Bolt & Tool, Biscayne Electric & Hardware Distributors, Bob Dean Supply, Scotty's, Shadbolt & Boyd, and the Petitioner. The ITB states that the School District of Lee County: reserves the right to waive minor variations to specifications, informalities, irregularities and technicalities in any bids; to reject any and all bids in whole or in part with or without cause, and/or to accept bids that in its judgement will be in the best interest of the District. The District further reserves the right to make awards on a multiple, lump sum, or individual item basis or combination as shall best serve the interest of the District unless otherwise stated. Three of the vendors bid on all 61 items. The remaining vendors bid on some but not all of the items. The bids were tabulated by personnel in the Purchasing Department. The information in the bids is set forth in tabulation sheets which facilitate comparison of buds. On January 7, 1993, the Petitioner sent a letter to the Respondent stating that there were only "two authentic submissions: Ace Hardware and S.W. Supply, Inc." The tabulation sheets and additional materials included in the bid responses were forwarded to the Supply Department where supply personnel reviewed the submissions and made recommendations to the Purchasing Department as to which vendors should receive awards. As part of the evaluation of the bid proposals, the District determined that the cost of the total bid award would be lower if the awards were made on an individual item basis. The District considered prompt payment discounts in making this determination. The total amount of the proposed awards to the eight vendors is $7,104.55. Were the Petitioner to receive awards for all items, the total amount of the award would be $7,965.00, accounting for the Petitioner's proposed prompt payment discount. The Purchasing Department posted a Notice of Intention to Award on January 15, 1993. The proposed awards were made on an individual item basis. All eight vendors received awards. The parties have stipulated that the Petitioner timely filed a notice of protest. Subsequent to the January 15 posting, the Petitioner discovered several errors in determining the proposed awards. In the Petitioner's formal protest, four awards are identified as incorrect. Despite the Petitioner protest, the first item identified was correctly awarded because the Petitioner failed to account for the prompt payment discount offered by the winning vendor. A second item protest was based on clerical error and was withdrawn by the Petitioner. The two remaining items were resolved and were addressed in a corrected Notice of Intention to Award posted February 16, 1993. There is no evidence that the errors were other than mistakes made in calculation or transcription of bid data from the vendor's documents to the bid tabulation form. No further specifically challenged items were identified by the Petitioner prior to the hearing. General condition 1.d. of the ITB states as follows: For purposes of evaluation, the bidder must indicate any variances from specifications, terms and/or conditions regardless of how slight. If variations are not stated in the proposal, it will be assumed that the product or service fully complies with the specifications, terms and conditions herein. (emphasis supplied) General condition 6 of the ITB states as follows: Use of brand names, trade names, make, model, manufacturer, or vendor Catalog Number in the specifications is for the purpose of establishing a grade or quality of material only. It is not the District's intent to rule out other competition; therefore, the phrase OR APPROVED EQUAL is added. However, if a product other that specified is bid, it is the vendor's responsibility to submit with the bid brochures, samples and/or detailed specifications on item(s) bid. The District shall be the sole judge concerning the merits of bids submitted. If a bidder does not indicate what he is offering in the proper blank and if the bidder is successful in being awarded the item(s) then the bidder shall be obligated to furnish the specified item(s). If packing is different from that specified, the bidder must note manner and amounts in which packing is to be made. (emphasis supplied) Only one vendor, Parker-Mahn Ace Hardware, proposed to supply all items exactly as specified in the ITB. The remaining vendor proposals included at least some items which varied in some respects from the items identified in the ITB. Where a vendor fails to identify that a product bid is "not as specified", the proposal is evaluated as if all specifications have been met, in which event, price is the determining factor in determining the award. Where a vendor identifies a variance related to a specified item, the proposal is evaluated as if all specifications other than the identified variance are met. If the product is determined by the Supply Department to be the equivalent of the product identified in the ITB, price is again the determining factor in determining the award. Where the ITB specifies a brand name followed by the word "ONLY", the vendor may not bid another brand. Where the ITB does not qualify the brand name as "only", the vendor may propose an equivalent product. Where a vendor does not identify the brand name of the item to be supplied, the vendor presumed to be bidding an item which will meet the specifications. If the vendor delivers goods which are not as specified, the District rejects delivery and cancels the order. The evidence establishes that, where bid items were not as specified in the ITB, the District had access to sufficient information to permit a determination of equivalency and an award of bids. The evidence fails to establish that, except as stated herein, the Petitioner should have received an award other that as set forth in the February 16, 1993, Notice of Intent to Award. General condition 5 of the ITB states as follows: Cash discount for prompt payment of invoices will be considered in making awards. The District prefers cash discount items which allow at least twenty (20) days for approval and payment of invoices. Four vendors included proposals for prompt payment discounts in the responses. One vendor offered a 2 percent discount for payment within 20 days, one offered a 1 percent discount for payment within 15 days and one offered a 1 percent discount for payment within 10 days. The Petitioner offered a 12 per cent discount for payment within five days, but only if the Petitioner received the award for all items bid. The District preference for a 20 day payment period reflects the time needed to accept delivery, process invoices and make payment for goods received. The District has accepted a five day prompt payment discount when the purchase was for a single item and the delivery date was specified. Such payment is otherwise difficult and results in other vendor payments being delayed. There is no evidence that based on the costs of goods involved in this bid, the savings are of such event as to warrant such extraordinary treatment of deliveries and invoices. General condition 16 of the ITB states as follows: Any and all special conditions that may vary from these General Conditions shall have precedence. Special condition 1 of the ITB states as follows: A SAMPLE OR COMPLETE SPECIFICATION SHEET MUST ACCOMPANY EACH BID ITEM THAT IS NOT "AS SPECIFIED." IF AN ITEM CANNOT BE EVALUATED, IT WILL BE DISQUALIFIED. Parker-Mahn Ace Hardware submitted product brochures or other materials related to items bid. The Petitioner submitted an extensive selection of photocopies pages from a hardware product catalog. W.W. Grainger submitted an index of part numbers and identified where such parts could be located in the Grainger catalog, which was on file with the District. Action Bolt and Tool included product information by brand name and model number in the ITB response. The remaining four vendors (Biscayne Electric & Hardware Distributors, Bob Dean Supply, Scotty's, and Shadbolt & Boyd) attached no specification sheets or other descriptive materials for items bid. As stated previously, the ITB directed vendors to submit specification sheets for "not as specified" items. The request for such information was intended to facilitate the review of the bids by eliminating the need for District personnel to consult vendor product catalogs already in the District files. The ITB also provided for disqualification where an item could not be evaluated. The Petitioner asserts that the failure to submit such product information materials with the bids is a material defect which cannot be waived and which renders the bids nonresponsive. The evidence fails to support the assertion. Of the four vendors which included no specification sheets, all four had product catalogs on file in the Purchasing and/or Supply Departments of the Lee County School Board. The District had sufficient information to evaluate the bids submitted by the vendors with catalogs on file. The Petitioner asserts that it was disadvantaged by the District's decision to waive the failure to attach specification sheets where catalogs were on file, because it was allegedly not possible to compare his bid to those submitted by the other vendors. The evidence does not support the assertion. The relevant catalogs are on file in the Purchasing and Supply Departments of the District and are available for public inspection. There is no evidence that the Petitioner sought at any time to reference the materials on file. The fact that the omitted specification sheets made such a comparison less convenient than it would have been had such sheets been attached to the bids does not render the bid proposals nonresponsive. At hearing, the Petitioner challenged many of the individual intended awards announced by the District. Prior to the hearing, the Petitioner had not asserted that such items were inappropriately awarded. The evidence fails to establish that the Petitioner would be entitled to an award of any of the additional items challenged at hearing. In the case of individual items, a bidder other than the Petitioner would be entitled to the award if the Petitioner's challenge succeeded. None of the other bidders challenged the proposed bid awards. No vendors intervened in this proceeding. Accordingly the Petitioner is not affected by such individual awards and is without standing to challenge the items first identified at hearing. The Petitioner asserted that if the low bidder for each identified product is disqualified, and the next lowest bid included in the total bid calculation, the Petitioner's total bid, including the prompt payment discount, would be lower than the total of individual bids, and that accordingly, he would be entitled to an award of all items. The evidence fails to support the assertion. The Petitioner identified one item at hearing for which the Petitioner should have received the award. The ITB sought bids to supply 24 galvanized one quart metal funnels, item #58115. One of the vendors proposed to supply a plastic funnel at a cost of .56 each. The next lowest bidder was the Petitioner which proposed to supply the metal funnel requested at a cost of $1.44 each. On a previous bid, a plastic funnel was proposed by a vendor and rejected by the District as not meeting the specifications. Although in the instant case, purchasing personnel were informed by supply personnel that a plastic funnel would serve the same purpose and was acceptable, the vendors were not provided the opportunity to bid on the provision of the plastic funnels. General condition 9.c. of the ITB states as follows: If the material and/or services supplied to the District is found to be defective or does not conform to specifications, the District reserves the right to cancel the order upon written notice to the seller and return the product to the seller at the seller's expense. In other words, the District has the right to reject delivery and cancel orders for items which are not as specified in the ITB and for which no variance was identified by the successful vendor. A vendor delivering goods which are not as specified in the vendor's proposal will not be invited to participate in the ITB process for an indeterminate period of time. At hearing, the Petitioner asserted that item #58800 (a plastic sheet of twelve garden hose washers) was mistakenly awarded to a vendor whose proposal was for individual washers rather than the sheet. The Respondent acknowledged that accordingly the proposed vendor's bid was not the lowest. The next two lowest bids (one of which is an "as specified" bid) were received from vendors other than the Petitioner. The Petitioner therefore would not receive this award. The Petitioner asserts that some bidders did not complete "drug-free workplace" forms. Although correct, the assertion is irrelevant. Such forms are used to determine award winners where there are identical bids ("ties"). There were no tie bids related to this case.
Recommendation Based on the foregoing, it is hereby RECOMMENDED that: The School Board of Lee County enter a Final Order directing that the District Purchasing Department refrain from purchasing item #58115 pending the next invitation to vendors to submit bids for miscellaneous hardware supplies and otherwise DISMISSING the Petitioner's Notice of Bid Protest. DONE and RECOMMENDED this 2nd day of June, 1993, in Tallahassee, Florida. WILLIAM F. QUATTLEBAUM 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 2nd day of June, 1993. APPENDIX TO CASE NO. 93-1260BID The following constitute rulings on proposed findings of facts submitted by the parties. Petitioner The Petitioner's proposed findings of fact are accepted as modified and incorporated in the Recommended Order except as follows: 7. Rejected, irrelevant. Item #58038 does not require that ONLY an Ace Hardware item may be bid. Based on the ITB, it is clear that the item bid by Action Bolt & Tool meets the specifications set forth in the proposal. 11-12. Rejected, irrelevant. 14. Rejected, irrelevant. The evidence fails to establish that the Petitioner attempted to obtain the materials used by District personnel to evaluate the bids. 16-17. Rejected, irrelevant. Respondent The Respondent's proposed findings of fact are accepted as modified and incorporated in the Recommended Order except as follows: 9. Rejected, immaterial. 23. Rejected, irrelevant. 28. Rejected, unnecessary. COPIES FURNISHED: Dr. James A. Adams Superintendent School Board of Lee County 2055 Central Avenue Fort Myers, Florida 33901-3988 Garey F. Butler, Esquire Humphrey & Knott 1625 Hendry Street Fort Myers, Florida 33907 Marianne Kantor, Esquire School Board of Lee County 2055 Central Avenue Fort Myers, Florida 33901-3988
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 issue in this case is whether Petitioner's real estate broker's license application should be approved or denied.
Findings Of Fact Petitioner, Rhonda S. Dietz, is a 36-year-old woman who currently holds a real estate sales associate's license. She was first licensed by the State of Florida in December 2001 and has held her license in good standing since that time. At the time Petitioner obtained her sales associate license, she disclosed in her application that she had a criminal background. That background included two grand larcenies, possession of a controlled substance, failure to appear, violation of probation, and obtaining property with a worthless check. Each of the offenses will be further discussed below. Despite the criminal history, Respondent approved Petitioner's sales associate's license, and Petitioner has been selling real estate for the past six years. In 2006, Petitioner first applied for a real estate broker's license. Petitioner maintains that in her 2006 application, she disclosed each of the aforementioned events in her criminal history.1 Nonetheless, her application was denied. In May 2007, Petitioner again filed an application for a real estate broker's license. That application clearly contained documentary evidence of her entire criminal history. The events in that history are hereby discussed: The first grand larceny in Petitioner's background was related to the purchase of goods from a K-Mart in 1994 with a bad check belonging to a roommate. Upon discovering the check was bad, Petitioner immediately turned herself in, made restitution, and paid court costs. She was sentenced to five years' probation for that charge. The second grand larceny involved allegations in 1994 by Petitioner's then-current roommates that Petitioner stole property from them when she moved out of the residence. Although Petitioner denied the charge because the claim was merely retaliation by her roommates for moving out, she agreed to a plea bargain at the advice of counsel. Again, she was given five years' probation and made to pay restitution. In 1998, Petitioner was charged with possession of a controlled substance: a vial of testosterone and some pain pills. She explained that these drugs came from a pharmacy where she was working. The pharmacy specialized in treatment of AIDS patients. She had the drugs in her possession so she could turn them over to a medical group that could disperse them to AIDS patients. The pharmacy supported Petitioner and paid for her defense against the possession charge. Petitioner was sentenced to 24 months' probation, court costs, and 50 hours of community service for that charge. Petitioner also had a probation violation in 1998 for failing to appear and for failing to pay a fine related to one of the aforementioned charges. She did not pay the fine due to lack of funds. She failed to appear due to lack of notice. She was placed on ten months' house arrest for the violation of probation. Petitioner met all other conditions of her probation and has not had any criminal activity since the charges listed above. She does not deny the existence of her prior criminal history and has not attempted to hide it from Respondent. When Petitioner applied for a broker's license in 2005, she filed an application that included her criminal history. The application disclosed all of the charges addressed above. Respondent confirmed the charges by referring to a Florida Department of Law Enforcement (FDLE) report. When Petitioner re-applied in 2007, she personally obtained a FDLE report on her criminal background, which she submitted along with her application. Again, she listed all of her prior history in the application. There is no competent evidence to suggest otherwise. Since the time of her last criminal charge, Petitioner has been gainfully employed. She has worked in an office doing medical billing, in a pharmacy, and as a real estate agent. In her current position, she has been entrusted with large sums of money for clients. She has had no adverse employment actions taken against her. Her co-workers state that she has good moral character and is trustworthy. Petitioner has passed the classroom work needed to become a broker; her application for licensure will complete that process. Meanwhile, she continues to sell real estate and is involved in an investor monitoring program. The broker's license will simply allow Petitioner to make a career move by expanding her capabilities in the area of real estate sales. Respondent did not call any witnesses at the final hearing and did not refute or rebut the facts as stated by Petitioner.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered by the Florida Real Estate Commission granting Petitioner's application for a real estate broker's license. DONE AND ENTERED this 17th day of October, 2007, in Tallahassee, Leon County, Florida. S R. BRUCE MCKIBBEN 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 17th day of October, 2007.
