The Issue The issue for determination at final hearing was whether Florida Diesel Truck and Industrial, Inc., has standing to protest the termination of its franchise agreement with Mitsubishi Fuso Truck of America, Inc.
Findings Of Fact William Dowdy is the President and owner of Florida Diesel Truck and Industrial, Inc. (Petitioner). He owns all of the stock and controls the day- to-day operation of the business. Dowdy bought out his family members' interest in the business. Petitioner is primarily engaged in industrial, marine and agricultural parts and service. Dowdy has been working with Petitioner as an administrator for approximately 20 years. He joined Petitioner in 1973 in the accounting office when it was Florida Diesel and Marine Service and was primarily engaged in marine repairs. Dowdy has no actual, hands-on repairing experience with Petitioner of any significance. In 1989, Mitsubishi Fuso Truck of America, Inc. (Intervenor), was searching for new dealerships, so it initiated contact with Dowdy. Intervenor's branch manager had numerous conversations, regarding a truck franchise, with Dowdy. At that time, Petitioner had two locations: one in Riviera Beach and one in Ft. Pierce. The Riviera Beach location was the original facility, the larger of the two locations, and the main office. As a result of the talks, in October 1989, Petitioner applied for a dealership. In December 1989, Petitioner entered into an Interim Sales and Service Agreement (Interim Dealer Agreement) with Intervenor, which was the dealership franchise agreement. The Interim Dealer Agreement was for a one-year period (December 1989 to December 1990) only. In order to become an authorized dealer, Petitioner had to comply with the Interim Dealer Agreement. A term and condition made a part of the Interim Dealer Agreement and incorporated by reference as "Exhibit B" was that Petitioner would "show a growth rate in the areas of net worth, working capital, retail sales, parts sales, service sales, and show a positive trend towards profitability at the end of this interim agreement." Also, a development plan was entered into setting forth, among other things, an annual minimum sales objective of 25 units or vehicles for 1990. Petitioner's interim dealership was located at its Ft. Pierce location. Intervenor provided the trucks, through its credit plan, and Petitioner purchased the parts. As a dealer, Petitioner needed a salesperson but did not have one. Dowdy decided that Petitioner's branch manager in Riviera Beach would double as a salesperson for the dealership in Ft. Pierce. In addition to handling parts and service at the Riviera Beach location, the branch manager was also now a truck and parts salesperson. Needing a full-time salesperson for the dealership, Dowdy continued to search for a salesperson. Sometime within the contract year, Petitioner hired a full-time salesperson. The salesperson had no truck sales experience but did have automobile sales experience and local contacts which Petitioner felt was an asset. However, because his sales were lacking, the salesperson was replaced. Intervenor provided Petitioner with assistance during its year of operation. Intervenor's district sales manager met periodically with Dowdy, visited the dealership frequently, assisted with sales and made contacts with customers and potential customers. In December 1990, at the end of its first year of operation as a dealer, Petitioner received written communication from Intervenor regarding deficiencies, among other things, in the submission of monthly financial statements and the timely payment of accounts. Notwithstanding, in December 1990, Intervenor renewed the Interim Dealer Agreement for a second year from December 1990 to December 1991. Petitioner's profit trend did not indicate to Intervenor that it should offer Petitioner a three-year dealer contract as opposed to a one-year interim dealer contract. During the second contract period, Petitioner continued to have a salesperson problem. Petitioner replaced its salesperson with someone who had truck sales experience. However, the new salesperson was not selling a satisfactory number of trucks, so he was dismissed. Again, Petitioner's branch manager in Riviera Beach became the Ft. Pierce dealership salesperson. Additionally, in the second contractual year, on more than one occasion, Petitioner received written communication from Intervenor regarding submission of monthly financial statements and timely payment of accounts. Finally, in December 1991, Intervenor notified Petitioner by written communication that payment for parts shipment would be thereafter on a C.O.D. basis. In January 1992, Intervenor again renewed the Interim Dealer Agreement for a third year from January 1992 to January 1993. Prior to the renewal, Intervenor discussed increased truck sales with Petitioner and both agreed that increased trucks sales were necessary. A term and condition made a part of the Interim Dealer Agreement and incorporated by reference as "Exhibit B" was that Petitioner agreed to [S]ell a minimum of fifteen (15) units during the term of this contract. [S]ubmit monthly financial statements. [P]ay monthly parts account according to MFTA [Intervenor's] terms. Prior to the third contractual year, Dowdy had been having financial difficulty, due to his purchase of his family members' interest in Petitioner. However, during the third contractual year, the financial difficulties worsened with the absence of a salesperson which lead to disappointing truck sales. In March 1992, Intervenor's credit department denied approval for the shipment of a vehicle to Petitioner's dealership because Petitioner had not submitted to Intervenor the 1991 year-end financial statement and monthly financial statement and had not paid prior interest charges. Additionally, in June 1992, Intervenor notified Petitioner by written communication that its floor plan insurance premium was past due, i.e., Petitioner had not paid the premium on its inventory. Also, in May 1992, because of financial concerns, Petitioner sold its Riviera Beach location. Since Petitioner had no full-time salesperson for its Ft. Pierce location, Petitioner's former branch manager, who had remained with the new Riviera Beach owners, agreed to continue to sell trucks for it. This arrangement continued for approximately two or three months before Petitioner's former branch manager severed his salesperson relationship. Petitioner was without a salesperson. The absence of a salesperson continued to plague Petitioner, which affected its sales and in return, its finances. In or around late August 1992, Intervenor's district sales manager who had been working with Petitioner during each of the yearly contractual periods, initiated the subject of Petitioner resigning its dealership. They engaged in several discussions on the subject of resignation; however, during those discussions, the subject of Intervenor terminating the dealership franchise came up. On or about August 31, 1992, Intervenor's district sales manager prepared a letter of resignation for Dowdy's signature. Even though the resignation letter was dated August 31, 1992, it was not presented to Dowdy for his signature until September 11, 1992, when the manager visited Petitioner in Ft. Pierce. On September 11, 1992, Dowdy reviewed the resignation letter, and after discussing it with the sales manager, he signed the letter and had it witnessed. That same day, Intervenor's district sales manager notified Intervenor's manager of dealer operations, who was located at its home office in New Jersey, of the resignation letter being signed, and when he returned to his office in Orlando, the district sales manager gave the resignation to the Regional Vice-President. Prior to signing the resignation letter, on or about September 3, 1992, Petitioner, with Intervenor's assistance, transferred two of its trucks to another dealer in Broward County. On September 15, 1992, Petitioner, by fax transmission, submitted its tool inventory to Intervenor, and shortly thereafter, Intervenor repurchased the tools from Petitioner. In a letter dated September 14, 1992, Intervenor notified Dowdy that it had accepted his "voluntary resignation" of the dealership, and included a proviso that the effective date of the franchise termination was October 11, 1992, 30 days from the date of resignation. The letter was mailed from Intervenor's home office in New Jersey. The Interim Dealer Agreement provides that any notice to be given under the agreement may be delivered, as it pertains to the case at hand, to the party of the agreement if a sole proprietor, to an officer of the party if a corporation, or may be given by sending the notice by registered mail or tested telex addressed to the principal office of the interim dealer or to Intervenor's principal office. It provides further that notice given as indicated is considered given when delivered or mailed. Intervenor's Dealer Sales and Service Agreement Standard Provisions (Standard Provisions) was incorporated by reference and made a part of the Interim Dealer Agreement. Section X.A. of the Standard Provisions provides that a dealer may terminate the agreement upon 30 days prior written notice to Intervenor. Further, Section X.C. provides that the date of the notice of termination is the date of mailing. Shortly after signing the letter of resignation, individuals wishing to invest in Petitioner's truck dealership contacted Dowdy. After receiving positive assurances from the investors, Dowdy attempted to rescind the resignation. He forwarded a witnessed letter dated September 18, 1992, to Intervenor by fax transmission requesting that his "voluntary resignation be abated." At that time, he had not received Intervenor's letter of September 14, 1992. By certified letter dated October 2, 1992, Intervenor notified the State of Florida, Department of Highway Safety and Motor Vehicles (DHSMV) of Petitioner's "voluntary resignation" of its dealership. In response to Dowdy's letter of September 18, 1992, by letter dated October 9, 1992, Intervenor refused to abate Petitioner's resignation and treated his letter of September 18, 1992, as an application for a new franchise. Intervenor indicated in its response that it was not interested in a new franchise. On October 21, 1992, Dowdy sent a letter by fax transmission to Intervenor's CEO regarding the resignation letter and his (Dowdy's) plan to reorganize the dealership. The CEO contacted Dowdy the same day by telephone and discussed the low and decreasing market for truck sales in the Ft. Pierce area and whether Dowdy had been coerced or forced to sign the letter of resignation. Responding to the inquiry of coercion or being forced, Dowdy responded that he was neither coerced nor forced to sign the letter of resignation. Subsequently, however, in a letter dated October 28, 1992, Dowdy informed Intervenor's CEO, among other things, that Intervenor terminated the dealership and that he was requesting a hearing before the DHSMV for unfair cancellation. By letter dated October 28, 1992, Dowdy requested such a hearing from DHSMV. By letter dated November 9, 1992, Dowdy informed the DHSMV that, among other things, he had signed the "voluntary resignation" prepared by Intervenor, but later changed his mind and requested Intervenor to cancel the "voluntary resignation" on September 18, 1992. By certified letter, dated November 12, 1992, the DHSMV notified Dowdy that its determination was that he lacked standing to protest a termination and that he had 21 days from the service of that letter to request a formal hearing. Dowdy received the DHSMV's letter on November 18, 1992. On December 9, 1992, Dowdy forwarded a letter, bearing the same date, by Federal Express to the DHSMV requesting a formal hearing, which was received by the DHSMV on December 10, 1992.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Highway Safety and Motor Vehicles enter a final order denying Florida Diesel Truck and Industrial, Inc.'s, request for an unfair cancellation hearing in that it lacks standing for such a request. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 21st day of March 1994. ERROL H. POWELL 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 21st day of March 1994.
Findings Of Fact On September 19, 1974 Eleanor Van Treese, as agent for Futrell Company, obtained a listing on a residence located at 12250 S. W. 67th Avenue in Miami, Florida from Newton J. Mulford and Elizabeth N. Mulford, the record owners of said property. A copy of this sales management agreement was admitted into evidence as Exhibit number 1. Thereon was shown one existing mortgage with Coral Gables Federal, with a balance of approximately $47,500. At the time the Mulfords executed Exhibit number 1, a second mortgage in the amount of some $25,000 was also recorded against this property and foreclosure proceedings had been instituted. The holder of the second mortgage was James V. O'Connor. George Bender, a Miami attorney, was aware that foreclosure proceedings had been instituted against this property prior to the time that Futrell obtained the listing agreement. He called Mulford to inquire about purchasing the property, but apparently his offer was not high enough to interest Mulford. After the Futrell sign was placed in front of the house, Mrs. Capps met Mrs. George Bender at a social affair. When Mrs. Bender learned that Mrs. Capps was a real estate salesperson working for Futrell Company, she asked if she would show her the Mulford house. In late November or early December Mrs. Bender was shown the house and thereafter her husband also was shown the premises. On January 2, 1975 a final judgment of foreclosure was entered in the Circuit Court of the Eleventh Judicial District of Florida. Therein the court found that James V. O'Connor was the holder of a second mortgage on the premises in the principal sum of $25,000 together with interest accrued thereon from August 15, 1970 in the amount of $12,976.34. The court also awarded O'Connor $500 as a reasonable attorney's fee. The judgment further provided that the defendant, O'Connor, or any of the parties to the suit, may become bidders for purchase of the premises at the forthcoming sale thereof; and that the court would retain jurisdiction of the cause for the purpose of entertaining a Motion for Deficiency Judgment and "settle all other questions under the proceedings not settled by this order." O'Connor thereafter called Eleanor Van Treese to advise her that he had obtained the foreclosure order and that he would bid on the property when the judicial sale was held on the 15th of January. He further advised that he was anxious to turn over the property and get his money out of it. Mrs. Van Treese telephoned Mary Capps on January 10, 1975 to advise her of the information she had received from O'Connor. Not understanding the legal implication thereof Mrs. Capps decided that she should come to Mrs. Van Treese's house and the two of them talk to O'Connor regarding the property. This was done; and, with the two salespersons on the telephone with O'Connor, he read to them the judgment that he had obtained; advised them that he would be bidding on the property on January 15th and expected to purchase same; and that he would consider offers to purchase the property from him. Mrs. Capps, that same evening, called Mrs. Bender to advise that O'Connor was going to bid on the property on January 15th and was interested in selling the property. When Mr. Bender came home, Mrs. Bender and he discussed the purchase of the property and decided to submit an offer. Mrs. Bender so advised Mrs. Capps. The following morning, on Saturday, January 11th, Mr. and Mrs. Bender sent to the Futrell Company office and Mrs. Capps typed an offer to Purchase the property which the Benders executed. This was the deposit receipt and sales purchase agreement dated January 11, 1975 admitted into evidence as Exhibit number 2. While at the office Mr. Bender called another attorney, William A. Friedlander, who he considered to be more knowledgeable in real estate transactions than himself, for legal advice in the premises. Friedlander advised him that it was proper to submit an offer to O'Connor although O'Connor did not have present title and was therefore unable to execute a valid deed for the property until after he purchased the property at the foreclosure sale. Friedlander considered the contract would be based upon a condition subsequent, viz: the acquisition of title by O'Connor, and such contract would be enforceable. Friedlander was also aware that several judgments had been entered against Mulford and that Mulford would be unable to execute a contract and deliver clear title at the amount Bender was offering. This was so because the sum of first mortgage, second mortgage, real estate commission, and other judgments that had been entered against Mulford exceeded the amount Bender was offering to pay for the residence. He advised Bender that, if the foreclosure suit had joined all necessary parties, the deed obtained by O'Connor at the foreclosure sale would be good and O'Connor would be able to give a good and merchantable title. He further advised Bender that a contract with Mulford would have been futile due to the amount of the offer and unworkable due to the short period of time before the foreclosure sale in which to obtain the cash necessary to provide Mulford sufficient funds to pay off all his creditors and the mortgages. At the time the Benders executed the contract for the purchase of the residence in question it was their intention that the offer be presented only to O'Connor. Mary Capps presented this offer by the Benders (Exhibit 2) to O'Connor who accepted same on January 11, 1975. The $6,000 earnest money deposit was delivered by Mrs. Capps to the Secretary of the Futrell Company for deposit in the Futrell Escrow Account. No evidence was presented that the earnest money deposit has ever been refunded to the Benders or that they have requested this earnest money deposit to be refunded. Mr. and Mrs. Mulford were not advised of the existence of the offer to purchase dated January 11, 1975 until long after O'Connor purchased the property at the foreclosure sale.
The Issue Whether the application of Fountain Motors, Inc. (Fountain) for a new motor vehicle dealer license should be granted on the ground that the existing Oldsmobile dealers in the Orlando area are not providing adequate representation.
Findings Of Fact THE MARKET AREA: The relevant market area for purposes of section 320.642 is the Orlando multiple dealer area (MDA). 1/ The Orlando MDA consists of Orange County, Seminole County and the communities of Osteen and DeBary in Volusia County. This area is presently being served by Landmark and Willett Oldsmobile. The Orlando MDA has been subdivided by GM into three market areas known as Areas of Geographic Sales and Service Advantage (AGSSA). 2/ AGSSA 1 includes the extreme southern end of Seminole County and that portion of Orange County generally north of Colonial Drive. It defines the area that, in theory, would be served primarily by Landmark. AGSSA 2 is north of AGSSA 1 and generally surrounds the Sanford area. It defines Willett's area of primary responsibility. AGSSA 3 is the area of Orange County generally south of Colonial Drive and defines the area that would be Fountain's area of primary responsibility. THE DEALERS: LANDMARK OLDSMOBILE John Kitzmiller, the dealer/operator of Landmark Oldsmobile, worked with GM, Pontiac Division, for 24 years and eight months. He held a variety of responsible positions with the Pontiac Division including Zone Manager for the Oklahoma City Zone and Zone Manager for the Los Angeles Zone. Mr. Kitzmiller received high performance ratings throughout the time he was with GM. He left GM on July 6, 1983, to become vice-president and general manager of an import distributorship. In February 1984, Mr. Kitzmiller, in conjunction with Mr. Fred Schneider, executed a buy/sell agreement with Scott Smith Oldsmobile in Orlando, Florida, and the application and documentation to finalize the transaction was presented to the Oldsmobile Zone Office in Jacksonville on February 28, 1984. On March 2, 1984, Mr. Kitzmiller and Mr. Schneider met with Mr. Martabano, the Zone Manager for the Jacksonville Zone, to discuss the application. Mr. Martabano stated that he felt that that both Mr. Kitzmiller and Mr. Schneider were qualified applicants and that he saw no problem with the application being processed. However, Mr. Martabano advised Mr. Kitzmiller and Mr. Schneider that Scott Smith did not have a good performance record either in sales or customer relations. He stated that additional cars would have to be sold to get average national market penetration, and he indicated that he would provide additional car allocations above what Scott Smith had earned, to help Landmark achieve sufficient market penetration. Mr. Martabano also informed Mr. Kitzmiller and Mr. Schneider that a market survey had been started in October of 1983 to determine whether a new dealer point should be added in the Orlando metropolitan area, that all indications were that a new dealer point would be added, and that Orlando would probably become a three-dealer metro area. Because there are numerous factors which affect the time within which a new dealership can be established, Mr. Martabano did not venture an opinion as to the time that it would take to establish the new dealership should the survey indicate the need for one. Although not initially approved, Landmark ultimately entered into a dealer agreement with GM and began operation on July 16, 1984, as an Oldsmobile dealer in Orlando, Florida, at the location formerly occupied by Scott Smith Oldsmobile. Landmark is located just north of the border between Orange and Seminole Counties. 3/ Approximately three weeks after Landmark started operating, Mr. Martabano visited Landmark and informed Mr. Kitzmiller that the survey had been completed and indicated the need for an additional dealer in the Orlando market. Mr. Kitzmiller was asked not to protest the addition of a new dealer point. FOUNTAIN: On September 19, 1984, Fountain filed an application with the Division seeking the issuance of a license to operate a new Oldsmobile dealership in Orange County, at 1406 Sand Lake Road. The application was subsequently amended to state that the Sand Lake Road location had been approved by Oldsmobile on a temporary basis only and that Fountain had secured property at 8621 Orange Blossom Trail for the later construction of the permanent dealership facility. The Orange Blossom Trail location is three-tenths of a mile west on Sand Lake Road and seven-tenths of a mile south on Orange Blossom Trail from the Sand Lake Road location. A letter of protest to the application was filed by Landmark on October 8, 1984. WILLETT: Willett purchased the Joe Creamons Oldsmobile dealership and began operations in March 1985, at the location formerly occupied by Joe Creamons Oldsmobile in Seminole County. Creamons had been dualed with Chevrolet and Cadillac, but Willett was no longer dualed with Chevrolet at the time of the hearing. Willett is not a party in this proceeding. AREA POPULATION AND ECONOMIC GROWTH: While the number of Oldsmobile dealers in the area designated the Orlando MDA has remained at two since 1940, the population of the area as a whole has increased more than seven fold, from slightly under 100,000 in 1940 to over 750,000 in 1984. Orange County's 1985 population is estimated to be 523,300, an 11.1 percent increase over the 1980 population of 471,016. In that portion of Orange County designated AGSSA 3, the population increased from 188,200 in 1980 to an estimated 1985 population of 215,154, an increase of 14.3 percent. The remaining area of Orange County, located within AGSSA 1, experienced an estimated increase in population between 1980 and 1985 of approximately 9 percent. The number of households in Orange and Seminole Counties has substantially increased over the past fifteen years. Between 1970 and 1980 the number of households in Orange County increased from 108,645 to 170,754, a 57.2 percent increase. During the same period the number of households in Seminole County increased from 25,757 to 63,247, an increase of 68.7 percent. Between 1980 and 1984, Orange County added another 26,062 households and Seminole County added 14,708. Of the East Central Florida Regional Planning Council's planning areas which roughly correspond to AGSSA 3 (ECFRPC Planning Areas 7, 9, 14, 15, 16 and 17) planning area 17, located generally to the west of the proposed add point experienced the greatest percentage increase in the number of households, going from 2,559 households in 1970 to 11,122 households in 1984, an increase of almost 335 percent. However, the greatest number of households are located to the north and northeast of the proposed dealer location, the area of AGSSA 3 located closest to Landmark. Of five new schools scheduled to be built in Orange County, four will be located in the AGSSA 3 area. Between 1980 and 1985, both Orange County and AGSSA 3 showed increases in the number of dwelling units, in residential employment (persons living within the area that are employed), and in attendant employment (number of persons whose work place is located in the area regardless of where the person lives). However, the AGSSA 3 area experienced greater growth than the county as a whole. In 1980, AGSSA 3 had 39.3 percent of the total county's residential employment and 36.5 of the attendant employment. AGSSA 3 is estimated to have 40.9 percent of the residential employment and 41.2 percent of the attendant employment in 1985. As can be seen from the Commercial Land Use Inventory map (GM Ex. 2), the AGSSA 3 area south and west of the proposed dealer location is an area of heavy development, containing several developments of regional impact and numerous planned developments and subdivisions. This area of heavy development is generally within ECFRPC planning area 17, the area which also experienced a tremendous gain in the number of households. Another area of heavy development is located to the east and northeast of Orlando, just southeast of Landmark. Although there is some development in the northwest and the southwest areas of the county, it appears that the pattern of growth is to the east and northeast of Orlando and to the southwest. Landmark is located in a good position to capitalize on the growth to the northeast, and Fountain would be in a good location to take advantage of the growth in the southwest. As measured by the Business Barometer of Central Florida's composite index of economic activity, the Orlando area experienced healthy economic growth in every year from 1977 to the present, except 1981 when the growth rate was - 1.8 percent. The two peak years were 1978, with a 14.9 percent growth rate, and 1983, with an 11.3 percent growth rate. The growth rate projected for 1985 is 3.1 percent. In 1982, the per capita income in Orange County was $11,641, as compared to $10,907 for Florida and $11,100 for the United States. The 1982 per capita income in Seminole County was $9,122. The 1985 per capita income for Seminole County is $11,081 and is $14,140 for Orange County. In 1979, the median family income for Orange County was $17,705, and based on inflation, projected at $20,553 in 1984. Of the 171 traffic zones 4/ in AGSSA 3, 90 or 52.6 percent had a median family income higher than the county's average median income. In most of the census tracts comprising the Orlando MDA, the average household income is between $15,000 and $40,000. However, the AGSSA 3 area contains 6 census tracts where the average household income is over $40,000 and it contains no census tracts where the average household income is below $15,000. MARKET PENETRATION: General Motors conducts periodic market penetration analyses of AGSSAs by compiling the registration data provided by R. L. Polk Company at a census tract level. The registration data provided by Polk to GM includes every vehicle registered within a particular census tract regardless of the identity or location of the dealer which sold the vehicle. The R. L. Polk Company is the authoritative source of registration data used for marketing penetration analysis in the automotive industry. This registration data is made up of components including fleet and retail. The most current AGSSA level registration data available is year end 1984 data. Both parties have utilized retail registrations to analyze market penetration. Market penetration for a manufacturer is a relative concept which compares the registrations of one make of vehicle against the total industry registrations in a particular geographic area. For example, in 1984, 10.04 percent of all vehicles registered in the United States were Oldsmobiles; therefore, the market penetration nationally was 10.04 percent. Registration efficiency is the relationship of the marketing area's penetration percentage to the zone or national penetration percentage. Of the six MDAs in Florida, the Orlando MDA ranked 5th in registration efficiency. The Orlando MDA penetration has been consistently below zone and national penetration, and of the three AGSSAs in the MDA, AGSSA 3 has the lowest penetration. For the years 1982, 1983, and 1984, Oldsmobile's retail market penetration nationally, by zone, by MDA, and by AGSSA were as follows: 1982 1983 1984 National 9.59 10.51 10.04 Zone 8.49 8.77 8.25 Orlando Multiple Dealer 6.67 6.99 6.71 Area (MDA) AGSSA 1 6.66 6.9 6.7 AGSSA 2 9.53 9.7 8.7 AGSSA 3 5.2 5.8 5.5 22. In 1984, the Orlando MDA rated 137th in retail penetration percentage of the 159 largest United States markets for Oldsmobile. Only one MDA in the Jacksonville Oldsmobile zone had a worse retail penetration percentage during 1984. Lost opportunity is the difference between actual Oldsmobile retail registrations in an area and the number of registrations which would have occurred if national average penetration or zone average penetration had been achieved. The number of lost opportunities represents the potential number of registrations available to the Oldsmobile dealers if national or zone average penetration were attained. The following chart reflects lost opportunities in the Orlando MDA for 1982, 1983, and 1984: 1982 ZONE NATIONAL 1983 ZONE NATIONAL 1984 ZONE NATIONAL Orlando MDA (438) (702) (522) (1032) (481) (1038) AGSSA 1 (263) (420) (325) (630) (278) (608) AGSSA 2 0 0 0 (33) 0 (66) AGSSA 3 (212) (282) (234) (369) (221) (366) The Orlando MDA and AGSSAs had fewer lost opportunities when compared zone rather than national penetration because in 1982, 1983, and 1984, the Jacksonville zone penetration was below national market penetration. The extremely low retail market penetration rate in the Orlando MDA, particularly the area designated AGSSA 3, is a legitimate cause for concern. However, identifying a problem is less difficult than identifying the reason or reasons for the problem. GM contends that the low market penetration indicates inadequate representation in the Orlando MDA, specifically the lack of an Oldsmobile dealer in the southern part of the MDA, the AGSSA 3 area. Landmark points to other factors which might influence low retail penetration, including large fleet registrations, insufficient car allocations, and area demographics. FLEET REGISTRATIONS: Fleet automobiles are automobiles that are sold to large fleet customers such as rental car companies. Fleet registrations are not counted when determining retail market penetration statistics. The Orlando market has an extremely high number of fleet registrations. In 1984, fleet registrations accounted for almost 62 percent of all Oldsmobile registrations in the Orlando area. 5/ The percentage of fleet registrations nationally, in 1984, was 17.27 percent. Fleet cars are sold by rental car companies both at wholesale and retail after they have been in rental service for a period of time. During 1984 and the first four months of 1985, Budget Rent-a-Car sold 1,364 cars from their rental car sales lot in Orlando, of which 281 were Oldsmobiles. During the same period of time Avis sold 82 Oldsmobiles at retail and 132 Oldsmobiles at wholesale and National Rent-a-Car sold 1 Oldsmobile at retail and 584 at wholesale. The 82 Avis cars and the one car sold by National at retail had limited warranties. At the Orlando Auto Auction held in May 1985, approximately 4,000 fleet cars were sold at wholesale, of which approximately 70 percent stayed in Florida. The average age 6/ of an Avis car sold at retail was 11 months, at wholesale 15 months. The minimum age of an Avis retail car was 6 months; the maximum was 22 months. At wholesale, the minimum age was 6 months; the maximum was 30 months, which could be a 4-year old car. The average age of a Budget Rent-a-Car was about 6 1/2 months, with the minimal amount of time in rental service being 2 months. National keeps a car in rental service from 4 to 20 months, with an average of 11 months. There was insufficient evidence to support a finding that the high fleet penetration of Oldsmobile in the Orlando area had an effect on retail penetration in the area. There was no evidence presented to show that the purchasers of the fleet cars, either the direct retail customers or the ultimate purchasers of the cars sold at wholesale, resided within the Orlando area. Indeed, the only evidence concerning the destination of the wholesaled cars indicates that the great majority of wholesaled cars did not remain in the Orlando area for resell. There was no evidence that a greater percentage of fleet cars were available to the retail purchaser in the Orlando market than in other market areas. Finally, there was not sufficient evidence presented to support a finding that the purchase of a rental car at retail takes a new car purchaser out of the market. Therefore, it cannot be concluded that the high fleet registrations substantially affect the Oldsmobile dealers' opportunities for new car sales within the Orlando market. CAR ALLOCATIONS: The Oldsmobile allocation system is divided into two basic phases called controlled distribution and earned distribution, also known as "earn and turn," travel rate distribution, or computerized phase. The "built-out" phase is part of the earned distribution phase which occurs at the conclusion of the year's model run, when the last of the cars for the current model year are being produced and the plants are being retooled to build the new models. The controlled distribution phase for the upcoming model year begins approximately in July of each year, following build-out. During this period, when the first new models are being produced and accordingly there is a limited number of cars available for distribution, a dealer gets a fixed percentage of the zone's cars based on the percentage of his sale of vehicles within the zone from January 1 through June of that year. 7/ For example, if a dealer sold five percent of the zone's sales of a particular model from January through June, then the number of cars received by that dealer during controlled distribution would be five percent of that model's initial production received by the zone. After a sufficient number of new model cars have been manufactured, the system for arriving at the number of cars distributed to the dealer is converted to the earned distribution formula, this conversion taking place in October or November of each year. Prior to 1984, the earned system compared the new model year sales and availability of each dealer during the preceding approximately 60 days to the sales of each other dealer in the Jacksonville zone. Beginning in November 1984, Oldsmobile began computerized distribution, the earn-and-turn system for all dealers. The system provides a guide to the zone manager on a weekly basis for the allocation of cars to all dealers within the zone. Under the system, all dealers within the zone are competing on a national system with all the other Oldsmobile dealers throughout the United States. The guide uses a 60-day sales rate, comparing the dealer's sales by model within the 60- day period to the inventory of the model for the dealership. An earned rate is then computed for that week with each dealer earning a proportionate share of the national production of that particular model. A factor built into the computerized system is the "protected" car. A protected car is not counted in the dealer's inventory and therefore gives him a better sales rate under the formula. In other words, the dealer will earn more vehicles than he would have had the car been counted as part of his inventory. A car remains protected for approximately six or seven weeks and then it is included in the dealer's inventory if not sold. A dealer may receive protected cars if he is having a special campaign. The zone manager also receives 125 to 130 protected cars every seven weeks that are distributed at his discretion. Cars for a new Oldsmobile dealership, that is, one which has not previously existed, are taken out of the national pool of available production capacity prior to the allocations being made to each dealer. Thus, the establishment of a new dealership impacts each existing dealership in the United States equally. When a dealership is sold by an existing dealer to a replacement dealer, the replacement dealer assumes the previous dealer's sales record. It has been the policy of Mr. Martabano, the Jacksonville zone manager, to allocate additional vehicles beyond the suggested guide figures to the replacement dealer, for the period immediately after the sale. The zone manager has the authority to allocate these additional vehicles to replacement dealers. The zone manager also may allocate to dealers who are opening new facilities and having special sales promotions, because the allocation numbers established through the controlled system and the earned rate system are guides, subject to the discretion of the zone manager to make the final allocation to each dealer. However, every additional vehicle allocated to any dealer within the zone by the zone manager in excess of that dealer's guide figure results in another dealer in the zone getting one less vehicle than his earned number. During the first meeting between Martabano and the prospective purchasers of the Landmark dealership, Mr. Kitzmiller and Mr. Schneider, Mr. Martabano indicated that he would allocate to Landmark cars in addition to guide numbers that had been established by the sales of Scott Smith. However, during the period immediately after Landmark became a dealer, on July 16, 1984, Martabano's ability to allocate additional vehicles to Landmark was limited. During the initial phase of 1985 model year production, product was scare for all dealers. This situation was compounded by a national strike against General Motors in September and, at the conclusion of the strike, production problems on the Cutlass Ciera. However, during the controlled distribution period between July 25 and November 7, 1984, Landmark received fifty- five 1985 model cars in addition to what they would have received using the controlled distribution guide numbers. This was the largest additional number of cars allocated to any dealer in the zone during controlled distribution. 8/ The breakdown on the units earned and received during the controlled distribution system is as follows: Earned percentage of Zone Thru No Units No Units 10/31 Earned Received Difference Firenza 5.65 24 14 -10 Calais 3.25 30 35 + 5 Ciera 2.57 21 38 +17 Supreme 3.42 91 98 + 7 88 2.90 69 90 +21 98 2.20 26 41 +15 Toronado 4.29 14 14 0 TOTAL 3.18 275 330 +55 However, Landmark did not receive any protected cars during that period. During the earned distribution period, between November 14, 1984, and May 1, 1985, Landmark was allocated 553 vehicles in addition to those suggested by the guide number. This was the largest additional number of cars allocated to any dealer during earned rate distribution. 9/ The breakdown on the units earned and received during the computerized period is as follows: #Units Earned #Units Received Firenza 20* 29 Calais 16 93 Ciera 93 205 Supreme 77 213 88 5 147 98 40 100 Toronado 5 22 TOTAL 256 809 *Firenza under controlled distribution until January 10, 1985. INVENTORY AND MODEL MIX: To achieve a sales objective of 125-150 cars per month, a dealer should have a grounded inventory of 300-350 cars per month. The general measure to be applied is that grounded inventory should be between two and three times the proposed sales volume. Moreover, by industry standards a dealership needs a 60-day grounded inventory to achieve a given sales ratio. Although Landmark repeatedly requested extra cars and although Landmark received more cars than they would have received following the guidelines, Landmark's grounded inventory from July through December of 1984 was too low to support the sales objectives projected by Landmark and Oldsmobile. When Landmark took over the Scott Smith dealership there were 79 automobiles in inventory. At the end of July 1984, Landmark had 81 cars in inventory. At the end of August, Landmark had 119 cars in inventory. At the end of September, Landmark had 72 cars in inventory. At the end of October, Landmark had on ground inventory of only 34 cars, at the end of November, Landmark had 106 cars in inventory, and at the end of December, Landmark had 167 cars in inventory. Further, during most of this period of time, the model mix of Landmark's on ground inventory was imbalanced when compared to the zone average. For example at the end of July, Landmark had 23.46 percent of its inventory in Toronadoes, as opposed to the zone average of 7.14 percent, and 20.99 percent of its inventory in the "hot cars," 10/ Ciera and Supreme, as compared to the zone average of 32.09 percent. At the end of October, 76.57 percent of Landmark's inventory were 98s and Toronadoes, compared to the zone average of 34.55 percent, and 8.82 percent of the inventory in "hot cars," compared to the zone average of 14.10 percent. However, by the end of December, Landmark's model mix was quite similar to the zone's average model mix. Landmark had 34.14 percent of its inventory in "hot cars," as compared to the zone average of 34.24 percent, and 4.79 percent of Landmark's inventory were Toronadoes, as compared to the zone average of 4.90 percent. Thus, until the end of 1984, Landmark tended to have higher percentages of slow moving models and lower percentages of fast moving models in its inventory. 11/ Although inventory is a factor in sales, it is not the sole factor. From November 1984, to April 1985, Landmark's rank in sales was lower than its rank in inventory among dealers in the zone at month end in every month except April. The following compares rank in inventory to rank in sales for that period: Nov. Dec. Jan. Feb. Mar. Apr. Sales 7 8 7 8 8 3 Inventory 3 2 4 3 2 4 Mr. Smith, the Director of Sales Analysis and Distribution for Oldsmobile, named several factors which a Zone Manager should take into account when utilizing his discretion in the allocation of cars, both during earn and turn distribution and during controlled distribution. Among these considerations are: a dealer's financial problems if based on his product mix and availability of automobiles, expenditures of dealers for new facilities or additions or improvements to existing facilities, a change in ownership of a dealership, and the sales pattern of the dealer within the 60-day period used to establish the number of cars earned. Most of these factors were present in Landmark's situation. Landmark lost money during each month from July through December of 1984, Landmark had problems with inventory and model mix, and Landmark had expanded and improved its facilities. When presented with a scenario applicable to the Landmark situation, in which a dealer takes over a metropolitan dealership that is poorly run, and in which the new dealer believes that he can sell more cars than would be allocated under the strict terms of the earn and turn allocation system, Mr. Smith stated that, under the system that existed prior to November 1984, the problem should be solved by the Zone Manager, who should "approach the Regional Manager or the Assistant General Sales Manager and plead his case and ask for an allocation of reserve cars to prime the pump and that should get the dealer up and running at whatever rate they want to get into". 12/ Smith further testified that under this illustration, getting this dealer enough cars to establish his own sales rate would be a number one priority, and that in this situation the Regional Manager and Assistant General Sales Manager would always come up with some cars. However, when given the same scenario as above, with the added information that the new car dealer takes over the existing dealership in the middle of the summer, and asked how the problem would be solved, Mr. Smith replied, "I don't know how you would solve that problem." The reason being that the Regional Manager and the Assistant General Sales Manager do not have a reserve available during the period from July until the earn and turn distribution begins, which generally is in October, but in 1984 began in November. Landmark contends that it should have gotten special treatment from the zone manager in terms of additional cars during its start up period, and it did get special treatment. Not only did it get the 55 additional 1985 models previously mentioned, it also received 44 additional 1984 cars out of the 188 available in the last 1984 model year preference, which was the highest allocation of extra 1984 models to any dealer in the Jacksonville zone for that final preference. Also, in late 1984, the leadership of the "super group," an advertising group consisting of all the dealers in the Jacksonville zone, appealed to Oldsmobile management in Lansing for an additional allocation of protected cars and were allocated 600 cars which were divided among all 92 dealers in the zone. The refusal to allow Landmark to keep all 40 of the Citrus Bowl "Brass Hat" cars in its inventory and the failure to approve 150 additional cars for a promotional planned by Landmark were not arbitrary decisions designed to prevent Landmark from getting cars. In both situations, there were sound reasons for the decisions. 13/ Landmark has not been discriminated against by GM in the allocation of cars when compared with other dealers in the zone or with King Oldsmobile, the largest dealer in the zone. DEALER PROXIMITY AND DEMOGRAPHICS: The number of locations of dealerships for various line makes, including Oldsmobile, provide a basis for comparing the relative levels of customer convenience for buyers in a particular AGSSA. Oldsmobile has the worst level of customer convenience in AGSSA 3 of any of the major manufacturers located in the Orlando area. Potential buyers in AGSSA 1 and 2 enjoy far greater convenience to the nearest Oldsmobile dealer than a buyer living in AGSSA 3, and Oldsmobile retail registration penetration is worse in AGSSA 3 than either AGSSA 1 or AGSSA 2. The average consumer must travel farther from a residence in AGSSA 3 to reach an Oldsmobile dealer than to reach a Honda, Ford, Chrysler-Plymouth, Datsun, Pontiac, Chevrolet, Toyota or Buick dealer. The addition of an Oldsmobile dealer in AGSSA 3 would provide Oldsmobile customers convenience commensurate with convenience offered by competitive lines. The customer convenience offered by Oldsmobile in AGSSA 3 would be slightly better than the convenience now offered to consumers in AGSSA 1 and slightly less than the convenience currently offered to consumers in AGSSA 2. The driving time, taking the shortest route in non-rush hour traffic, from the proposed Fountain location to the Landmark location in AGSSA 1 is extreme when compared to the convenience levels offered by other manufacturers. The most direct drive time between the two locations ranged between 35:30 minutes and 29:40 minutes. The shortest measured driving distance was 16.7 miles. A consumer living in an average residential area in AGSSA 3 would travel less than half the distance to get to the proposed location than he presently must travel to get to Landmark. Within two miles of the Landmark location, Oldsmobile achieved national average penetration in the retail market during 1984. Generally, Oldsmobile penetration decreased farther away from the Landmark location until the 12-14 mile distance, which is the approximate location of the dealership in AGSSA 2 to the north. The relation of Oldsmobile retail market penetration to the distance from Landmark is shown below: OLDSMOBILE RETAIL PENETRATION IN 2-MILE RINGS SURROUNDING LANDMARK OLDSMOBILE 2 - 4 miles 7.37 percent 4 - 6 miles 6.26 percent 6 - 8 miles 6.92 percent 8 - 10 miles 6.67 percent 10 - 12 miles 6.19 percent 12 - 14 miles 7.80 percent Distance Ring Oldsmobile Retail Penetration Less than 2 miles 10.00 percent Greater than 14 miles 7.63 percent Proximity affects market penetration, but there are obviously other factors which influence consumer choice in interbrand competition, the foremost of which is the product itself. Product preference can be associated with such characteristics as age and income. Therefore, an analysis of market penetration in a specified area must take into account the demographic characteristics of the people in that area. Therefore, penetration is not solely a function of proximity of a certain line make, but may also reflect the preference of the people contained in a given geographic area. Put simply, consumers' characteristics may give rise to pockets of high penetration and pockets of low penetration by line make and by model. The Continuous Automotive Market Information Program ("CAMIP") report offered into evidence by Landmark shows that Oldsmobile has retail customers in every income group, particularly income groups where the household income exceeds $15,000. The demographics for the entire Orlando MDA, and AGSSA 3 in particular, show heavy concentrations of household income between $15,000 and $40,000 and at levels above $40,000. As of 1984, there were no census tracts in AGSSA 3 where the average household income was less than $15,000. Landmark's evidence regarding age and income demographics only considered 42 percent of the total Oldsmobile buyers from a household income standpoint, and did not consider the majority of known Oldsmobile buyers. Further, and perhaps as a result, in several census tracts where there were purportedly a lack of high propensity Oldsmobile buyers, Oldsmobile penetration was high. Additionally, although age and income demographics for Buick buyers were essentially the same as for Oldsmobile buyers, Buick performed better than Oldsmobile in market penetration. In sum, the age, income, and housing demographics presented do not explain the poor retail penetration for Oldsmobile in the Orlando MDA, and more specifically do not explain why there is lower market penetration in AGSSA 3 than in the rest of the MDA. REPRESENTATION OF LANDMARK Scott Smith Oldsmobile, Landmark's predecessor, had been performing below average in sales and registration effectiveness for several years. 14/ Scott Smith was so deficient in sales and service performance that it had been on the Oldsmobile Action Program for approximately 8 years, which was longer than any other dealer in the zone had ever been on the program. The Action Program is a program for dealerships with deficiencies so serious that they may result in termination of the dealership. John Kitzmiller made every effort to correct these problems from the inception of Landmark Oldsmobile. Immediately upon opening the Landmark dealership Mr. Kitzmiller hired a replacement service manager. This service manager quit within two weeks after discovering the magnitude of the problems with the service department inherited from Scott Smith. A month or so thereafter, Mr. Kitzmiller was able to hire Mr. Bob Dorton from Houston, Texas, to be service manager from Landmark. Mr. Dorton, who had won 9 times Pontiac Motor Division's award for five star service excellence, joined Landmark on November 1. At the time of the hearing, Landmark's Service Department had improved to the point that the Jacksonville Zone Office had, on at least two occasions, requested that Landmark assist it by repairing Oldsmobiles which other Oldsmobile dealerships have been unable to repair. Landmark has complied with the Zone's requests and resolved the problems. Robert L. Woodfork, Zone Development Manager and former District Sales Manager for the district encompassing Orlando, testified that Scott Smith was deficient in sales due to inadequate sales force, poor advertising, and lack of consistency in reporting sales and that a dealership with poor sales performance can remedy that situation by increasing the sales force, increasing advertising, and increasing levels of inventory through prompt reporting. Based upon his knowledge of the total sales opportunity in the Orlando market, Mr. Woodfork concluded that the Scott Smith dealership, now Landmark, should have a sales objective of 125 to 150 retail sales per month. Based upon this sales objective, Scott Smith's sales force of five or ten salesmen was inadequate. In Mr. Woodfork's opinion, 15 salesmen were needed to reach this objective. Due to the limited amount of cars available in the Fall of 1984, Landmark was unable to stabilize its sales force until February 1985, but by April Landmark had 17 salesmen. Landmark also had established sales incentive and bonus programs for salesmen. Landmark spent in excess of $45,000 a month in advertising since it began business which is more than adequate by Mr. Woodfork's standard and perhaps excessive considering the limited availability of cars to Landmark during the Fall of 1984. Additionally, Landmark hired a professional advertising agency to develop an advertising program with the theme "We Care." Landmark also had various promotionals for retail sales. In addition to increasing the sales force and advertising, Landmark immediately hired an experienced Oldsmobile sales manager who came highly recommended by Oldsmobile. Landmark expanded and improved the existing sales and service facilities and established a regular training program for salesmen. Landmark instituted a new method of handling calls from prospective buyers and a system in which each customer who comes on the lot is called and encouraged to come back in. Also, Landmark instituted a system of calling purchasers within a week of purchasing the car and again in 5 months to make sure they are satisfied with the car and service they received. In April 1985, Landmark's total sales were third in the zone and reached or exceeded the sales objectives set for the dealership. From April 1st to and including May 1st Landmark sold 165 cars. 15/ The results of Landmark's comprehensive programs to improve sales, service, and customer relations are further evidenced by Oldsmobile Par Excellence Report for April 1985, in which Landmark was given a 95 percent overall sales rating by its customers. This was higher than both zone (92 percent) and national (91 percent) averages. The travel rates for both Landmark and Willett increased steadily during the first four months of 1985, culminating in the month of April, in which Landmark increased its travel rate 36.4 percent over the previous month, and Willett increased its travel rate 41.4 percent over the previous month. While the travel rate for the zone decreased from May 3, 1984, to May 1, 1985, Landmark's travel rate increased 2.4 percent (from 4.520 to 4.627) over Scott Smith's May 3rd travel rate, and Willett's travel rate increased 38.6 percent (from 1.260 to 1.746) over Creamon's travel rate. The existing Landmark and Willett facilities exceed the quantity of facilities which GM determined were needed to serve the Orlando MDA. TRADE AREAS Trade areas are a commonly used method of identifying dealer sales areas of influence within the automobile industry. A 67 percent trade area is that geographic area within which 67 percent of the cars sold by a particular dealer are registered. In 1984, two-thirds of all cars sold by Landmark were registered within an eight mile radius of Landmark. The 67 percent trade area circle for Scott Smith from 1982-1984 was approximately the same. The geographical distribution of Landmark's sales between January and April 1985, also reflect a similar pattern. The size of the trade area surrounding the AGSSA 1 dealer has remained constant regardless of the dealer, the time period covered, or the source of the data used. The size of the trade area circle does not necessarily increase with increased sales. Indeed, Landmark's 67 percent trade area was slightly smaller during its best sales month, April 1985, than it was during 1984. Landmark's trade area circle extends approximately eight miles from its dealership location or about halfway between Landmark's location and Fountain's proposed location; it is close to the dividing line between AGSSA 1 and AGSSA 3. Although the trade area circle may tend to reflect the distance a purchaser is willing to travel to purchase a particular car, 16/ the size of the trade area circle is related to the dealer's location vis-a- vis the location of areas of high market potential density. In other words, a dealer located in the middle of an area densely populated with potential buyers should have a smaller trade area circle than a dealer located in a sparsely populated rural area. EFFECT OF SALE OF EXISTING DEALERSHIPS At the time of the hearing in this cause, both of the two existing dealerships had been in operation for less than a year under their current ownership. 17/ Scott Smith Oldsmobile was sold to Landmark effective July 1984, and Joe Creamons was sold to Willett Oldsmobile effective March 1985. Replacement dealers are evaluated for sales and service performance after a full calendar year to measure compliance with the dealers' contractual obligation to GM. It is the practice of GM not to consider an additional dealership in an area within one year of the opening of a new dealership or dealer point within that area. However, there is no GM policy providing that the addition of a dealership within an area will be delayed or affected by the sale of an existing dealer in the area. GM does not control the timing of the sale of an existing dealership. ADEQUACY OF REPRESENTATION Oldsmobile has sustained the burden of proof placed upon it by Section 320.642. It has demonstrated that the dealers existing in the Orlando MDA have not provided adequate representation in terms of retail market penetration in the territory as a whole or within the area designated AGSSA 3. The evidence presented shows that retail penetration in the area is and has been below both average zone and average national retail registration rates. The evidence does not support a finding that lower than average penetration is an inherent characteristic of the Orlando market due to high fleet penetration or demographics. Further, the disparity in market penetration between AGSSA 3 and the rest of the Orlando MDA clearly indicates that Oldsmobile is being inadequately represented in the AGSSA 3 area. The only plausible reason for the extremely low market penetration in the AGSSA 3 area is the lack of an Oldsmobile dealer conveniently located to serve that market. The addition of another Oldsmobile dealer at the proposed location will not result in more dealers than the area can support.
Recommendation Based on the foregoing findings of fact and conclusions of law it is RECOMMENDED that Royal Oldsmobile be substituted for Landmark Oldsmobile as a party respondent and that the application of Fountain Motors, Inc. for a motor vehicle dealer's license be granted. DONE and ENTERED this 29th day of October, 1985, in Tallahassee, Leon County, Florida. DIANE A. GRUBBS Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 29th day of October, 1985.
The Issue Whether J.S. Imports, Inc. should be granted a new point Mazda dealership at 631 South Military Trail, West Palm Beach, Florida, pursuant to Section 320.642, Florida Statutes.
Findings Of Fact Petitioner, Mazda Motor of America, Inc., is a manufacturer of automobiles and trucks which are distributed and sold through a network of dealerships. Under Florida law Mazda is denoted a "licensee." On January 5, 1996, a notice of publication for a new point franchise motor vehicle dealer was published which announced Mazda intends to allow the establishment of J.S. Imports, Inc., as a dealership for the sale of Mazda vehicles at 631 South Military Trail, West Palm Beach (Palm Beach County), Florida 33415. The notice further provided, in pertinent part: Mazda Motor of America, Inc., intends to engage in business with J. S. Imports, Inc., as a dealership on or after February 1, 1996. The name and address of the dealer-operator and principal investor of J. S. Imports, Inc., is: John Staluppi, Jr., 42 Davidson Lane East, West Islip, New York 11795. * * * Dealerships of the same line-make which can establish standing to protest the establishment of the new point may do so by filing a written petition or complaint with the Florida Department of Highway Safety and Motor Vehicles. Thereafter, on February 1, 1996, Respondents, Stewart Mazda, Delray Mazda, and Jupiter Dodge Mazda, filed a petition or complaint challenging the proposed new point dealer. Respondents are the existing Mazda dealerships located within Palm Beach County. There are no other same line-make motor vehicle dealerships which are physically located so as to meet or satisfy the requirements of Section 320.642(3), Florida Statutes. Thus, all dealers with the potential for standing have participated in this proceeding. Palm Beach County is a county with more than 300,000 population. Respondent, Stewart Mazda, is located at 2001 South Dixie Highway, West Palm Beach, Florida, and is within 12.5 miles of the proposed location for the new point site. In fact, the Stewart dealership is within five miles of the proposed new point. Respondent, Delray Mazda, is not located within 12.5 miles of the proposed location. Nevertheless, Delray Mazda established that during any 12 month period of the 36 month period preceding the filing of the licensee's application for the proposed dealer Delray Mazda made 25% of its retail sales of new motor vehicles to persons whose registered household addresses were within a radius of 12.5 miles of the proposed site. Respondent, Jupiter Dodge Mazda, is not within 12.5 miles of the location for the proposed new dealership yet it also met the sales standard described in paragraph 7. The proposed new motor vehicle dealer, J.S. Imports, Inc., is owned by John Staluppi, Jr., the son of John Staluppi. No other person or entity owns more than a 10% interest in JSI. It is proposed that J.S. Imports, Inc. will be located at 631 South Military Trail, West Palm Beach. Such real property is part of an automobile mall or auto mall (a cluster of automobile dealerships) which is owned or controlled by John Staluppi. The new Mazda vehicle sales facility would be located at 631 South Military Trail; however, the service facility for the dealership would be located elsewhere within a shared space at 561 South Military Trail, West Palm Beach. Both parcels are owned or controlled by John Staluppi. Both parcels are part of the same auto mall. As part of its documentation to establish the dealership, J.S. Imports, Inc. (JSI) submitted an unsigned lease for the subject property between John Staluppi and the proposed dealer. On or about October 25, 1996, just prior to this case going to hearing, John Staluppi entered into an agreement to sell the assets of the automobile dealerships located within the auto mall. He also agreed to lease the real estate upon which they are located. The lease included the sites for the new Mazda point as well as the service location. Without going into details of the agreement which are not material to the issues of this case, and without listing all of the corporate entities involved in the transaction, the principals in this new agreement were John Staluppi and Terry Taylor. Material to this case, however, is the covenant between Mr. Taylor and John Staluppi, Jr. Those parties reached an agreement to sublease the real estate at 631 South Military Trail and the service department at 561 South Military Trail, West Palm Beach. Such agreement to sublease was also executed October 25, 1996. Based upon the foregoing, as of October 25, 1996, the proposed site for the Mazda new point dealer continued to be 631 South Military Trail with service work to be at 561. These sites are identical to the information submitted by the applicant to the Department of Highway Safety and Motor Vehicles. This information was also disclosed to Respondents during discovery of the case, prior to the prehearing stipulation. Subsequently, the transaction between Mr. Taylor and John Staluppi was abandoned. Mr. Taylor’s deposit on the transaction was refunded. Apparently, these parties no longer intend to abide by the terms of the asset purchase agreement. JSI does not own the proposed site. If approved, JSI will lease the property from John Staluppi or entities he owns or controls. As of the time of hearing, JSI did not have a signed lease for the subject property. Typically, Mazda does not submit applications for new point dealerships without some documentation substantiating control of the proposed site. A proposed dealer would normally either own or control the proposed site. Control of the site may be shown by a lease, an option to purchase or an option to lease. In this instance, Mazda presumed the proposed site would be secured through the efforts of John Staluppi, Jr. on behalf of his company which would lease from his father. Moreover, Mazda believes its agreement with JSI (for the applicant dealer to reimburse it for costs or expenses incurred should the dealership effort fail due to an act or omission of JSI) adequately protected its interests in this regard. As of the dates of filing the application for a new point dealership, the notice of same, and the hearing in this cause, no person or entity, other than John Staluppi, Jr., had a beneficial ownership interest in the proposed dealership. To determine whether an additional same line-make dealer should be approved, the existing network of motor vehicle dealers must be evaluated to determine whether they are providing adequate representation to the community or territory. The applicable statutory criteria do not define "adequate representation" nor the "community or territory." Typically, sales data of past dealership performance is utilized by all parties to establish a community or territory (Comm/Terr) and to evaluate the dealers' effectiveness. In this case how the Comm/Terr should be defined is disputed by the parties. Although entitled to weight in the consideration of how the Comm/Terr should be defined, the dealer agreements with the three existing dealers (Respondents) do not assign an area by geographical boundaries. Respondents believe the Comm/Terr, based upon their interpretation of their agreements, should be defined as Palm Beach County as a whole. In contrast, Mazda studies have defined the market for these dealers in different ways; however, it believes the Comm/Terr should be Palm Beach County excluding the primary market area (PMA) ascribed to Jupiter Dodge Mazda. In making this determination, Mazda constructed the PMAs for the existing dealers as well as the new point (or open point) which has been designated as the Staluppi PMA. Within the Staluppi PMA it is presumed that dealer would have a competitive advantage in the market. Similarly, within the Stewart PMA that dealer would have the competitive edge due to customer preference and convenience. The actual shopping patterns of Mazda customers was also assessed. In this case, the three dealers are located in three distinct geographical areas: one toward the northern boundary of the county at Jupiter; one to the south at Delray; and one in the eastern central portion at downtown West Palm Beach. The proposed Staluppi/JSI site is west of the Stewart location. Based upon the actual shopping patterns the majority of the sales by these three existing dealers are made to customers in the same county. Because few of Mazda's customers come from adjacent counties, the largest area which should be used to define the Comm/Terr is the county itself. Within Palm Beach County there are also identifiable plots associated with the three dealers which show that while Stewart and Delray are connected to the JSI site (via established purchasing patterns), Jupiter is not. For this reason, Mazda's expert in rendering his initial opinions regarding this matter excluded Jupiter from the Comm/Terr. This approach has been deemed persuasive. Currently, there are three clusters of automobile and truck dealerships within the Palm Beach Comm/Terr: Delray, where Mazda is now located; Military Trail/Okeechobee Boulevard, where Mazda wants to be located; and North Lake Boulevard. Eighty percent of the customers who shop for new cars, regardless of brand, go to one of the three clusters. Mazda is not represented in two of these popular shopping venues. Mazda and Dodge are the only brands offered in Jupiter. Less than 5% of the customers from the remainder of Palm Beach County (away from the Jupiter PMA) went to Jupiter to purchase a new vehicle. To determine a reasonable expected market penetration standard, it is appropriate to exclude certain factors, such as the consumer preferences for certain types of vehicles (independent of brand) over which the dealers have no control. Market penetration is the traditional standard used to measure adequacy of representation because it reflects the competitive efforts of the competing dealers. Registration data of all brands is used to comprise a single indicator called market share, which is an objective and accurate measure of market activity. Registration data reflects actual consumer purchases. Actual registrations account for demographic characteristics, including age, income, education, size-class preferences, and product popularity. Market penetration for any area is computed utilizing all registrations to addresses in the area, regardless of the location of the selling dealer. After registration data is compiled, the performance of the Comm/Terr can be compared to another market area (allowing for differences in segment popularity). In this case, Mazda compared the Palm Beach Comm/Terr to the Miami/Ft. Lauderdale market. Typically, manufacturers and companies which compile data regarding vehicle sales classify new vehicle sales into segments. These segments list models which are comparable to one another and are, presumably, competing for the same customer. Mazda classifies its vehicles into nine segments. Although it could be argued Mazda is ineffective against Ford, General Motors, and Chrysler, part of that theoretical ineffectiveness is due to the lack or absence of entries from Mazda into markets or segments flooded by those make vehicles. For example, Mazda does not have a vehicle to compete with a Chevrolet Suburban. Nevertheless, on a segment-by-segment basis where Mazda competes with an entry comparable to the other line-makes (in size and class) Mazda's effectiveness can be computed and demonstrated. By measuring Mazda's penetration in each segment achieved in the Miami/Ft. Lauderdale area, applied to the industry data available in each segment in the Staluppi/JSI PMA, an appropriate standard is established for what could be expected if the latter were receiving adequate representation. Similarly, by applying the penetration rate to the Palm Beach Comm/Terr as a whole it is possible to establish what could be expected if the Comm/Terr were receiving adequate representation. By considering the segment analysis the process takes into account differences in consumer preferences between markets as to the popularity of segments, and thereby gives a more accurate measure of what Mazda's reasonably expected market penetration should be. Utilizing this segment analysis, the reasonably expected 1995 Mazda market share in the Staluppi/JSI PMA was 5.97%. The actual penetration for Mazda in this PMA was 3.81%. Similarly, in the Palm Beach Comm/Terr in 1995, Mazda's reasonably expected share in the segments was 6.21%. The actual penetration for Mazda in the Comm/Terr was 4.49%. Alternatively, adding Jupiter to the Palm Beach Comm/Terr, Mazda's reasonably expected market share in 1995 was 6.19%. The actual penetration in the Palm Beach Comm/Terr (adding Jupiter) was 4.65%. Thus, in each analysis Mazda performance fell short of its reasonably expected penetration. With a properly constructed dealer network, containing the appropriate number of dealerships in proper locations, it is reasonable to expect the dealer network in Palm Beach County to perform as well as the dealer network in Miami/Fort Lauderdale after adjusting for the local consumer patterns that make Palm Beach different from the other area. Net shortfall is the number of additional Mazdas that would have to be registered in order to equal the expected level based on average performance across an area. On the basis of the net shortfall in units, or units required to be registered in order to bring the Staluppi/JSI PMA up to the expected performance, the 1995 shortfall was 246 units. In reviewing the Palm Beach Comm/Terr as a whole over the three year period from 1993 to 1995, the efficiency has changed from 70.1% to 72.4%. For the Comm/Terr plus Jupiter, the efficiency has changed from 68.6% to 75.2% during the three years immediately following the insertion of Jupiter Dodge Mazda. Mazda was not receiving adequate representation from the standpoint of not achieving reasonably expected market share. That conclusion is the same whether the area under review is the Staluppi/JSI PMA, the larger Palm Beach Comm/Terr, or the Palm Beach Comm/Terr with Jupiter included. Increases in performance in 1996 (after the existing dealers knew an additional dealer was being sought for the Palm Beach Comm/Terr) while commendable do not negate the historical pattern of providing inadequate representation. The growth of population and households in Palm Beach County has been predominately to the west and central portions of the county and throughout the Delray Beach area. The proposed Staluppi/JSI PMA has also experienced rapid growth in households and population which is expected to continue. Among Mazda buyers, 28.5% thought that the location of the dealer was extremely important; 35.1% thought it was very important; 22.8% thought it was somewhat important; whereas only 8.7% thought it was not important, and 4.9% not important at all. The Military Trail auto mall into which JSI proposes to open the additional Mazda dealership, now contains Toyota, Jeep Eagle, Chrysler Plymouth, Nissan, Infiniti, Kia, GMC, Saturn, Ford and Isuzu. Other brands considered part of this cluster are on Okeechobee Boulevard. They are VW, Hyundai, Acura, Subaru, Volvo, Oldsmobile, Buick, Audi, BMW, Lexis, Lincoln Mercury, Chevrolet, Dodge, Mitsubishi and Mercedes Benz. Mazda would be required to have 3.2 dealerships in order to have the same share of the franchises in the Palm Beach Comm/Terr as it has in the Miami/Ft. Lauderdale area. Because Jupiter Dodge Mazda does not serve the Palm Beach Comm/Terr in a meaningful way, the Comm/Terr has two Mazda dealerships, and needs at least one more dealership to have a reasonable opportunity to receive adequate interbrand competition and gain expected market share. The likely cause of the current inadequacy of performance for the Palm Beach Comm/Terr is insufficient dealer count and poor dealer location. Without a dealer in the Staluppi/JSI PMA, consumers average 9.9 miles from the nearest Mazda dealer, which is higher than the major competitors located in the Staluppi/JSI PMA. With the addition of a Mazda dealer in the Staluppi/JSI PMA customers will be 7.2 miles, on average, to the nearest Mazda dealer a distance which should be more competitive with other brands such as Ford (3.9 miles), Chevrolet (4.7 miles), Nissan (7.2 miles), and Toyota (7.2 miles). Optimal location analysis also demonstrates that the proposed location would maximize customer convenience. If the J. S. Imports dealership is allowed to "float" in the Palm Beach Comm/Terr, while the other dealer locations are fixed, the location which would maximize customer convenience is near the proposed site. The proposed location is near the optimal location, and in the midst of a cluster of dealerships where approximately 30% of the sales of all Palm Beach County dealers are made. The proposed site is good in terms of solving the customer convenience problem in the area, and providing Mazda a presence in the cluster where many sales are made. The addition of a dealership will likely benefit consumers and the public interest. It will provide the growing population of the Staluppi/JSI PMA with a more convenient place to shop for Mazdas and more convenient Mazda service. It will take Mazda to a growing cluster of dealerships allowing customers a one stop opportunity to comparison shop Mazda and its competitors. Moreover, with increased interbrand and intrabrand competition Mazda and the existing dealers should be able to improve sales penetration and take advantage of the available market for Mazda products. Therefore, because of the large untapped opportunity for Mazda in the Palm Beach Comm/Terr as a whole, in the Comm/Terr plus Jupiter, and in the "identifiable plot" known as the Staluppi/JSI PMA, the addition of a new dealer should not cause a decrease in the existing Mazda dealers' sales over the long term. The addition should have a positive impact upon the overall sales opportunities for all the Mazda dealers. If you compute the total lost opportunity for sales in this market (941 units) and allocate a portion of sales to the Staluppi/JSI PMA (555), the remainder would be available to the existing dealers of the Comm/Terr. This remainder of the lost opportunity, (467 units utilizing the average penetration profile; 386 using the Jupiter profile), would be available for all Palm Beach Mazda dealers. Therefore, the proposed addition of a dealership can take place without taking any sales from existing Mazda dealers. The existing dealers should increase their sales because a large number of customers are now shopping in the Northlake and Okeechobee/Military Trail clusters, and could not previously consider Mazda conveniently because of the lack of a dealer. Having a dealer in the Okeechobee/Military Trail cluster should stimulate interest in Mazdas. All existing dealers have made substantial financial investments to perform their obligations under their dealers' agreements. In Stewart's case, the total investment is close to $5,000,000. Stewart's real estate and building are valued at approximately $3,000,000. Jupiter Dodge Mazda has about $1,000,000 invested in its dealership. Delray Mazda has approximately $3,500,000 invested in its dealership. All three existing dealerships should benefit from an increased Mazda presence in the market place. The reasonably expected market penetration for Mazda should improve with an additional dealership at the Staluppi auto mall. Mazda has not denied its existing dealers an opportunity for reasonable growth, expansion or relocation. In fact, Mazda urged Stewart to establish the dealership at the proposed location. Only when efforts with Stewart failed did Mazda go outside the existing dealers for an operator for the additional point. Mazda has not attempted to coerce the existing dealers into consenting to the additional dealership. In reaching this conclusion the single incident complained of by one existing dealer (that Mazda withdrew some advertising support) has been considered but is not persuasive that Mazda has acted improperly in its efforts to establish the new point. The distance travel time, considering traffic patterns and accessibility, between the proposed site and its nearest same line-make dealer (Stewart) is approximately ten minutes. While geographically closer than other dealers of same line-make vehicles, traffic and accessibility put the proposed site and Stewart at a reasonable distance. No evidence in this case supports a conclusion that consumers could have the same benefits offered by the proposed dealership from other changes. No evidence suggests the existing dealers are not in compliance with their dealer agreements. Intrabrand and interbrand competition should improve with the establishment of the new point. Service and sales facilities will be more convenient to customers. All existing dealers make sales into the area of the proposed site. With anticipated population growth and market availability, any sales lost to the new point should be offset by Mazda’s increased market presence, improved market penetration, and greater overall sales for all dealerships.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED That the Department of Motor Vehicles and Highway Safety enter a final order approving the new point dealership sought by Mazda Motor of America on behalf of J.S. Imports, Inc. DONE AND ENTERED this 1st day of May, 1997, in Tallahassee, Florida. J. D. PARRISH Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (904) 488-9675 SUNCOM 278-9675 Fax Filing (904) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this 1st day of May, 1997. COPIES FURNISHED: Dean Bunch, Esquire Sutherland, Asbill & Brennan, L.L.P. 909 East Park Avenue Tallahassee, Florida 32301 James D. Adams, Esquire Adams & Quinton 7300 West Camino Real Camino Real Centre Boca Raton, Florida 33433 Douglas E. Thompson Post Office Box 16480 West Palm Beach, Florida 33416 Dean J. Rosenbach Lewis, Vegosen, Rosenbach & Silber, P.A. Post Office Box 4388 West Palm Beach, Florida 33402-4388 Michael J. Alderman, Esquire Division of Motor Vehicles Neil Kirkman Building, Room A-432 Tallahassee, Florida 32399-0504 Charles J. Brantley, Director Division of Motor Vehicles Neil Kirkman Building, Room B439 Tallahassee, Florida 32399-0500 Enoch Jon Whitney, General Counsel Division of Motor Vehicles Neil Kirkman Building Tallahassee, Florida 32399-0500
The Issue Whether Respondent, Maserati North America, Inc.’s ("MNA"), proposed 2017 Commercial Policy Program ("2017 Program") is a modification of the franchise agreement between MNA and Petitioner, New Country Motor Cars of Palm Beach, LLC, d/b/a Maserati of Palm Beach ("Palm Beach"), or Petitioner Recovery Racing, LLC, d/b/a Maserati of Ft. Lauderdale ("Fort Lauderdale"); and, if so, whether it is fair and not prohibited by section 320.641(3), Florida Statutes (2016). Whether MNA’s proposed modifications to the Existing Franchise Agreements with Petitioners are fair and not prohibited under section 320.641(3).
Findings Of Fact Based on the evidence presented, the Pre-hearing Stipulation of the parties and the record as a whole, the following relevant and material Findings of Fact are made2/:
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that: A final order be entered by the Department of Highway Safety and Motor Vehicles: (1) DISMISSING Petitioners’ claims regarding MNA’s 2017 Commercial Policy Bonus Program; and (2) GRANTING, IN PART, AND DENYING, IN PART, Petitioners’ claims regarding modifications in the Proposed New Agreement, as set forth above. DONE AND ENTERED this 23rd day of January, 2018, in Tallahassee, Leon County, Florida. S ROBERT L. KILBRIDE Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 23rd day of January, 2018.
The Issue The issue is whether Petitioners are entitled to motor vehicle dealerships that are proposed to be located in Orange County, Florida.
Findings Of Fact Based on the Notices of Publication, Respondent's protest letters which were forwarded to DOAH, and the testimony presented at the final hearing, the following Findings of Fact are made: Respondent is an existing franchised dealer for motorcycles manufactured by Benzhou Vehicle Industry Group Company, Ltd. Petitioners have proposed the establishment of new dealerships to sell the same line-make of motorcycles as those sold by Respondent. Respondent's dealership is located at 3838 John Young Parkway, Orlando, Orange County, Florida. Petitioners' dealerships are proposed to be located in Orange County, Florida, at: 4535 34th Street, Orlando, Florida (Case No. 09-3489); and 2650 West Fairbanks Avenue, Winter Park, Florida (Case Nos. 09-3499 and 09-4750). The proposed dealerships are within a 12.5-mile radius of Respondent's dealership. Respondent has standing to protest the establishment of the proposed dealerships. No evidence was presented showing that Respondent was "not providing adequate representation" of the same line-make vehicles in the community or territory.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Highway Safety and Motor Vehicles enter a final order denying the establishment of Petitioners' proposed franchise dealerships for Case Nos. 09-3489, 09-3499, and 09-4750. DONE AND ENTERED this 12th day of November, 2009, in Tallahassee, Leon County, Florida. S JEFF B. CLARK Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 12th day of November, 2009. COPIES FURNISHED: Electra Theodorides-Bustle, Executive Director Department of Highway Safety and Motor Vehicles Neil Kirkman Building 2900 Apalachee Parkway Tallahassee, Florida 32399-0500 Robin Lotane, General Counsel Department of Highway Safety and Motor Vehicles Neil Kirkman Building 2900 Apalachee Parkway Tallahassee, Florida 32399-0500 Jennifer Clark Department of Highway Safety and Motor Vehicles Neil Kirkman Building, Room A-308 2900 Apalachee Parkway Tallahassee, Florida 32399-0635 Jude A. Mitchell Jude's Cycle Service Post Office Box 585574 Orlando, Florida 32858 Beverly Fox Red Streak Scooters, LLC 427 Doughty Boulevard Inwood, New York 11096 Randy Lazarus Scooter City USA, LLC 4535 34th Street Orlando, Florida 32811 Bobbette Lynott Classic Motorcycles and Sidecars, Inc. Post Office Box 969 Preston, Washington 98050 Lou Ronka Scooter City USA, LLC 2650 West Fairbanks Avenue Winter Park, Florida 32789
The Issue Whether Respondent terminated Petitioner's employment on account of his race in violation of Florida law.
Findings Of Fact Respondent, Road Mart, Incorporated, (Respondent or Road Mart) is a family-owned and operated tire sales and service company. Respondent is an employer within the meaning of Section 760.02(7), Florida Statutes. Road Mart operates stores in North Florida and neighboring states, including the store at which all events relevant to this case occurred. Petitioner, Tyrone White (Petitioner or White), is an African-American male. White was employed by Road Mart at one of its Florida stores at all times material to this case. White held positions of trust from May 24, 1999, when he commenced employment, until October 1, 2001, when he was terminated. While employed at Road Mart, White was offered a promotion to store manager. White declined the position because it would have required him to make other arrangements for his child's transportation. On May 8, 2001, Petitioner was the subject of a disciplinary action report based upon three separate violations of company policy. Specifically, Petitioner charged merchandise to a customer's account without having an approved credit application on file; left work for a half-day without prior supervisor approval; and failed to take adequate measures to collect past due accounts assigned to him for follow-up. On August 31, 2001, Petitioner was reprimanded for not completing daily duties. Petitioner complained to a supervisor that a fellow employee, a Caucasian male, had engaged in substantially similar conduct yet had not been disciplined. Upon investigation, Respondent concluded that the co- worker had in fact committed an infraction, and discipline was imposed upon that individual. On September 18, 2001, Petitioner received two additional written reprimands. The first concerned merchandise that Petitioner had placed "on quote" and removed from the store to show a customer. "On quote" is a term used at Road Mart to indicate that particular merchandise or services are to be made available to the customer at the "on quote" price for a reasonable length of time. "On quote” prices are to be reflected in the company computer under the customer's name. Merchandise held “on quote” is not to be removed from the store unless it is paid in full and documented in accordance with Road Mart's procedures for documenting specific transactions. Road Mart reasonably requires that this policy be followed unless other arrangements acceptable to management are made in advance. After receiving the reprimand, Petitioner billed the parts under his own account, at the employee discount price of Road Mart's cost, plus ten percent. Road Mart policy limits the use of the employee discount to bona fide employee purchases. The employee discount is a significant savings over the retail price charged to the public at large. The second reprimand was given because Road Mart learned that White had, approximately six weeks earlier, purchased parts from a Road Mart supplier at Road Mart’s cost to be used on White’s personal vehicle. White failed to re-bill these charges to his personal account, contrary to company policy. Road Mart reasonably viewed this conduct as dishonest and could have terminated him for this violation, but elected not to. Petitioner offered no persuasive evidence that any of the foregoing reprimands were improper, or racially motivated. To the contrary, all of the persuasive evidence, much of it provided by White himself, established that each of the foregoing reprimands was entirely proper. On September 30, 2001, White committed multiple violations of company policy which resulted in his termination. Unbeknownst to any Road Mart employee, and without authority to do so, White arranged to meet an individual he described as an “associate,” one Robert Newkirk, on September 30, 2001, at the Road Mart store. That date fell on a Sunday, a day when Road Mart is closed to the public. Trusted employees such as White have access to the store to serve the emergency needs of customers. However, as White knew at all material times, such access is only to be exercised under circumstances which did not exist here, and in accordance with specific procedures which White failed to follow. White entered the store using another employee's security code number to de-activate the alarm system. Employees with a valid reason to access the store when it is closed are required to use their own security code. White, by his own admission, met Newkirk at the store for the purpose of installing two deluxe tires on Newkirk's Lexus GS300. Previously, Road Mart had sold a pair of these tires, known as Toyo Proxy 200s, to Newkirk, and on September 30, 2001, Newkirk wanted the mates installed on his car. At least one Toyo Proxy 200 tire was on display in the Road Mart showroom until September 29, 2001, when the store was closed for the balance of the weekend. At that time, this tire and all other showroom inventory were placed in the store's warehouse for the weekend. White installed the display tire and one other on Newkirk's Lexus. Road Mart renders a separate charge to customers who receive such after-hours service. In addition, Road Mart imposes upon all customers a charge for the installation and balancing of tires, as well as for disposing of the old tires. Each of these charges should have been billed to Newkirk and collected when the service was performed, absent other arrangements with White's supervisors. White did none of these things. Newkirk paid White a portion of the retail value of the second pair of tires, in cash. White never informed anyone of this transaction, but, instead, pocketed Newkirk's money. As previously noted, company policy reasonably requires that merchandise and services be paid for in full, and documented in the company computer unless other arrangements acceptable to the owners are made, before merchandise leaves the property and/or services are performed. Apart from protecting the company against theft, the policy is essential for the legal and financial protection of buyer and seller. In this case, documenting the sale of the tires to Newkirk would have obliged the manufacturer to honor warranties in the event the tires proved defective. Additionally Road Mart's insurer would have been obligated to provide coverage if White had installed the tires in a negligent manner, resulting in injury to Newkirk or other parties. Moreover, by giving Newkirk the tires without documenting what had been paid, the balance due, and what arrangements had been made with Newkirk to pay the balance, Newkirk was in a position to claim he had paid in full, which he had not. White's activities on September 30, 2001, violated company policy, placed his employer in legal and financial jeopardy, and, standing alone, warranted termination. When the store opened for regularly scheduled business on Monday, October 1, 2001, White's co-workers almost immediately noticed that the display Toyo Proxy 200 was missing and began to search for it. White, who arrived at work shortly after the store opened, was aware that his co-workers were seeking the missing tire, but said nothing. Mid-morning, White registered the tires in the store computer, placing them “on quote,” in his name, at his employee discount. Apart from the fundamental dishonesty of attempting to rewrite the history of this transaction as his colleagues were expending efforts to locate Respondent's missing tires, White violated company policy by placing the tires “on quote” in his own name and on his own authority. As previously noted, White was not at liberty to extend the employee discount to Newkirk or anyone else. Later that morning, White entered the tires into the computer as a sale to himself at the employee discount rate. By the end of the morning, Road Mart's management had uncovered most of the details regarding White's unauthorized and improper activities of the previous 24 hours. Management confronted White with the results of its investigation, and terminated his employment. White's termination was justified in fact and in law because it was based entirely upon White's multiple violations of company policy. There was no credible or persuasive evidence that race played any factor in Road Mart's decision to terminate White's employment.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Florida Commission on Human Relations enter a final order dismissing the Petition for Relief. DONE AND ENTERED this 1st day of April, 2005, in Tallahassee, Leon County, Florida. S FLORENCE SNYDER RIVAS 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 1st day of April, 2005. COPIES FURNISHED: Denise Crawford, Agency Clerk Florida Commission on Human Relations 2009 Apalachee Parkway, Suite 100 Tallahassee, Florida 32301 Marva A. Davis, Esquire Marva A. Davis, P.A. 121 South Madison Street Post Office Drawer 551 Quincy, Florida 32353-0551 Robert E. Larkin, III, Esquire Allen, Norton & Blue, P.A. 906 North Monroe Street, Suite 100 Tallahassee, Florida 32303 Cecil Howard, General Counsel Florida Commission on Human Relations 2009 Apalachee Parkway, Suite 100 Tallahassee, Florida 32301
The Issue The issue is whether Petitioner's applications to establish new dealerships for the sale of motorcycles manufactured by Shanghai Motorcycle Co., Ltd. (JMSTAR), and Shanghai Shenke Motorcycle Co., Ltd. (SHEN), should be granted. PRELIMANARY STATEMENT In the Florida Administrative Weekly, Volume 34, Number 21, May 23, 2008, the Department of Highway Safety and Motor Vehicles (DHSMV) published two Notices of Publication for a New Point Franchise Motor Vehicle Dealer in a County of Less than 300,000 Population. Said notices advised that Petitioner Gator Moto, LLC and Gator Moto, LLC (Petitioner) intended to establish new dealerships for the sale of motorcycles manufactured by Shanghai Motorcycle Co., Ltd. (JMSTAR), and Shanghai Shenke Motorcycle Co., Ltd. (SHEN). On or about June 3, 2008, Respondent Austin Global Enterprises, LLC, d/b/a New Scooters 4 Less (Respondent) filed two complaints with DHSMV about the proposed new motorcycle dealerships. DHSMV referred both complaints to the Division of Administrative Hearings on June 10, 2008. On July 2, 2008, Respondent filed its Compliance with Initial Order. On July 7, 2008, Petitioner filed Petitioner's Compliance with Initial Order Division of Administrative Hearings (DOAH) Case Nos. 08-2735 and 08-2736. This is the only communication that DOAH has received from Petitioner. On July 23, 2008, Administrative Law Judge Barbara J. Staros entered an Order of Consolidation for DOAH Case Nos. 08-2735 and 08-2736. On July 24, 2008, Judge Staros issued a Notice of Hearing, scheduling a final hearing on December 4, 2008. On November 26, 2008, Respondent filed its Compliance with Pre-hearing Instructions. Petitioner did not respond to the Order of Pre-hearing Instructions. On December 1, 2008, Judge Staros issued an Amended Notice of Hearing. The amended notice only changed the commencement time for the hearing. DOAH subsequently transferred these consolidated cases to the undersigned. On the morning of the December 4, 2008, hearing, DHSMV advised the undersigned's office that DHSMV had failed to arrange for the appearance of a court reporter at the hearing. Accordingly, the undersigned issued an Order Granting Continuance and requiring the parties to confer and provide DOAH with mutually-agreeable dates for re-scheduling the hearing. On December 17, 2008, Respondent filed its unilateral Compliance with Order Granting Continuance. Respondent filed this pleading after an unsuccessful attempt to confer with Petitioner. On December 18, 2008, the undersigned issued a Notice of Hearing and Order of Pre-hearing Instruction. The notice scheduled the hearing for February 9, 2008. On February 3, 2007, Respondent filed its unilateral Compliance with Order of Pre-hearing Instructions. Petitioner did not file a response to the Order of Pre-hearing Instructions. When the hearing commenced, Petitioner did not make an appearance. Respondent made an appearance and presented the testimony of Colin Austin, Respondent's Managing Member. Respondent did not offer any exhibits. The hearing transcript was not filed with DOAH. Neither party filed proposed findings of fact and conclusions of law.
Findings Of Fact Respondent has standing to protest Petitioner's applications pursuant to Section 320.642(3)(a)2., Florida Statutes (2008). According to DHSMV's published notice, Petitioner intended to establish two new motorcycle dealerships at 2106 Northwest 67th Place, Suite 15, Gainesville, Florida, on or after May 9, 2008. This location is only 4.5 miles from Respondent's place of business. At some point in time, Petitioner relocated its business to 7065 Northwest 22nd Street, Suite A, Gainesville, Florida. This location is only 5.3 miles from Respondent's place of business. Petitioner's application indicated that Petitioner intended to establish itself as a dealer of SHEN and JMSTAR motorcycles. Currently, Respondent sells those motorcycles under License No. VF/1020597/1. Respondent currently supplies itself with SHEN and JMSTAR products from a United States distributor. Respondent has a good faith belief that Petitioner intends to import the motorcycles and related products directly from the Chinese manufacturers. In that case, Petitioner would be able to sell the products at a lower price than Respondent and thereby deny Respondent the opportunity for reasonable growth. Petitioner did not notify DOAH about a change of address. DOAH's notices and orders directed to Petitioner at its address of record have not been returned. Petitioner has not communicated with DOAH since filing a response to the Initial Order. Petitioner did not make an appearance at the hearing. Apparently, Petitioner has abandoned its applications to establish the new dealerships.
Recommendation Based on the forgoing Findings of Fact and Conclusions of Law, it is ORDERED: That the Department of Highway Safety and Motor Vehicles enter a final order denying Petitioner's applications. DONE AND ENTERED this 16th day of February, 2009, in Tallahassee, Leon County, Florida. S SUZANNE F. HOOD Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 16th day of February, 2009. COPIES FURNISHED: Michael James Alderman, Esquire Department of Highway Safety and Motor Vehicles Neil Kirkman Building, Room A-432 2900 Apalachee Parkway Tallahassee, Florida 32344 Collin Austin Austin Global Enterprise, LLC 118 Northwest 14th Avenue, Suite D Gainesville, Florida 32601 Justin Jackrel Gator Moto, LLC 4337 Northwest 35th Terrace Gainesville, Florida 32605 Justin Jackrel Gator Moto, LLC 2106 Northwest 67th Place, Suite 15 Gainesville, Florida 32653 Carl A. Ford, Director Division of Motor Vehicles Department of Highway Safety and Motor Vehicles Neil Kirkman Building, Room B-439 2900 Apalachee Parkway Tallahassee, Florida 32399-0500 Robin Lotane, General Counsel Department of Highway Safety and Motor Vehicles Neil Kirkman Building 2900 Apalachee Parkway Tallahassee, Florida 32399-0500
The Issue The issues in the case are whether the allegations set forth in the Administrative Complaint are correct, and, if so, what penalty should be imposed.
Findings Of Fact In June 2005, the Respondent resided at a house located at 14213 Sports Club Way, Orlando, Florida, 32837. The Respondent had no ownership interest in the house. The house was owned by Jack Girton (Mr. Girton), who did not reside in the house, and was "for sale by owner," according to a sign in the yard. In June 2005, the Respondent was contacted by a licensed real estate agent, Eleanor Dioneda (Ms. Dioneda), who was seeking to locate a suitable house for purchase by Arnold Macabugao and his wife (buyers). Ms. Dioneda wrote a contract for purchase of the house between the buyers and Mr. Girton. A separate contract between the buyers and the Respondent, titled "SIDE AGREEMENT TO PURCHASE CONTRACT," required payment of $10,000 directly to the Respondent by the buyers. The document provided in relevant part as follows: This side agreement is between Buyers named above and Kim Capiello wherein the buyers agree to give $10,000 to Kim Capiello for services rendered in the search and purchase of the above named property. This agreement is contingent upon the buyers securing a loan, its lender determining a firm closing date and last but not the least, actual closing and funding of the above named property. The amount will be paid as follows: $5,000 to be paid at the time the Purchase contract is signed by all parties for the above property and contingent upon the buyers securing a loan and its lender determining a firm closing date. $5,000 to be paid the day after the closing under the condition being that the above property has been vacated and in move in condition. Kim Capiello further agrees that this side agreement is between her and the buyers only and has nothing to do with the actual purchase agreement entered into by the buyers and Jack Girton. Ms. Dioneda forwarded the document to the buyers and instructed the buyers on how to make the payments. She collected the first $5,000 installment from the buyers; apparently deposited the funds into her personal checking account; and then wrote a $5,000 check to the Respondent. The buyers eventually completed the purchase of the house from Mr. Girton and wrote a $5,000 check directly to the Respondent from their checking account. The Respondent received both checks for a total of $10,000 as stated in the "side agreement." The Respondent was not licensed in the State of Florida as a real estate broker or sales associate at any time material to this case.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Business and Professional Regulation, Division of Real Estate, enter a final order finding Kimberly D. Casella Capiello guilty of violating section 475.42(1)(a) and imposing a fine of $2,500. DONE AND ENTERED this 10th day of February, 2011, in Tallahassee, Leon County, Florida. S WILLIAM F. QUATTLEBAUM Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 10th day of February, 2011.
The Issue The issue is whether Petitioners are entitled to a motor vehicle dealership that is proposed to be located in Winter Park, Florida.
Findings Of Fact Respondent is an existing franchised dealer of motorcycles manufactured by Zongshen Industrial Group (ZONG). Petitioners have proposed the establishment of a new dealership to sell the same line and make of motorcycles as those sold by Respondent. Respondent's dealership is located at 306 West Main Street, Apopka, Florida 32712. Petitioners' proposed dealership would be located at 2650 West Fairbanks Avenue, Winter Park, Florida 32789. The proposed dealership is within a 12.5-mile radius of Respondent's dealership. Respondent has standing to protest the establishment of the proposed dealership.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED: That the Department of Highway Safety and Motor Vehicles enter a final order denying the establishment of Petitioners' proposed franchise. DONE AND ENTERED this 29th day of May, 2009, in Tallahassee, Leon County, Florida. S LAWRENCE P. STEVENSON Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings 29th day of May, 2009. COPIES FURNISHED: Carl A. Ford, Director Division of Motor Vehicles Department of Highway Safety and Motor Vehicles Neil Kirkland Building, Room B-439 2900 Apalachee Parkway Tallahassee, Florida 32399-0500 Robin Lotane, General Counsel Department of Highway Safety and Motor Vehicles Neil Kirkman Building 2900 Apalachee Parkway Tallahassee, Florida 32399-0500 Michael James Alderman, Esquire Department of Highway Safety and Motor Vehicles Neil Kirkman Building, Room A-432 2900 Apalachee Parkway Tallahassee, Florida 32344 James Sursely Action Orlando Motorsports 306 West Main Street Apopka, Florida 32712 Patricia Fornes Zongshen, Inc. 3511 Northwest 113th Court Miami, Florida 33178 Randy Lozanas Scooter City USA, LLC 2650 West Fairbanks Avenue Winter Park, Florida 32789
