The Issue The issue here presented concerns the attempted cancellation of the dealer franchise held by Ken's Kawasaki, Inc., petitioner, to sell Kawasaki motorcycles; specifically, Kawasaki Motors Corp, U.S.A., is taking action which would bring about the cancellation of Petitioner's motorcycle franchise. The alleged authority for considering the propriety of this action is as found in Section 320.641, Florida Statutes (1979).
Findings Of Fact The Petitioner, Ken's Kawasaki, lic., is a licensed-franchised Kawasaki motorcycle dealer in Gainesville, Alachua County, Florida. Its dealer license is as authorized by the State of Florida, Department of Highway Safety and Motor Vehicles, Division of Motor Vehicles, and its franchise is as issued by the Respondent, Kawasaki Motors Corp, U.S.A. The dispute arises following action on January 31, 1980, when the Respondent sent a letter to the petitioner indicating that the Sales and Service Agreement (franchise) between the parties would be terminated effective April 30, 1980. The reason for this termination, as expressed in the correspondence directed to the Petitioner, was the belief held by the Respondent that the terms and conditions of the aforementioned Sales and Service Agreement, in particular paragraph 26, subsection 4, allowed for the termination or cancellation if there was a "discontinuance if the operation of dealer's business for a period of five (5) consecutive days unless such discontinuance is the result of a national disaster," which term was felt to have occurred. In response to this notification of cancellation, the Petitioner through one of its owners filed a verified complaint before the State of Florida, Department of Highway Safety and Motor Vehicles, Division of Motor Vehicles. This complaint was referred to the State of Florida, Division of Administrative Hearings, for consideration pursuant to Section 120.57(1), Florida Statutes, and the hearing was conducted on October 1 and 2, 1980, in Gainesville, Florida. (The procedural conduct of that hearing is as set forth in the transcript of the hearing.) The history of the Petitioner's franchise with Respondent began on February 3, 1978, with the acceptance by those parties of a Kawasaki 1978 Model Year Authorized Dealer's Sales and Service Agreement. This agreement terminated on September 30, 1978. This franchise was then extended to include the period December 31, 1981, in keeping with a Kawasaki Authorized Dealer's Sales and Service Agreement which was executed on January 29, 1979, and this is the agreement which was in effect at the time of the entry of the termination letter dated January 31, 1980. In the spring of 1979, Kenneth Meyers, a principal in the Petitioner's corporation, informed Jimmy Capps, who was the District Manager for the Respondent in the Georgia - and Florida area, that the Petitioner intended to sell Ken's Kawasaki, Inc., motorcycle business. In pursuit of its decision to sell, the petitioner listed its business with a number of real estate agencies in the Gainesville, Florida, area. Among those brokers was Sherwood Commercial Brokers and within that brokerage firm Walter E. Murphree, Jr., was a principal. In September, 1979, the brokerage firm referred George O. Hack to Meyers as a prospective purchaser of the Petitioner's motorcycle business. During the same month, on September 13, 1979, District Manager Capps visited the petitioner's business location to discuss with the Petitioner the fact that the dealership was "out of trust". ("Out of trust" means that the inventory of the dealership subject to a floor plan financing arrangement, has been sold without obtaining the title documents held as security for the floor plan financing and without accounting for the proceeds, and was therefore in violation of the financing arrangement.) In this instance, some of the motorcycles that had been financed by the Respondent through a floor plan had been sold "out of trust". Again in September, 1979, Meyers contacted Capps in Atlanta, Georgia, and indicated that George O. Hack, James W. Opp, and Walter E. Murphree, Jr., had shown an interest in acquiring the petitioner's business. This contact occurred subsequent to the entry between the Petitioner and Hack, Opp and Murphree as principals in Gainesville Motorcycle Corporation, Inc., into an arrangement referred to as a "Contract for Purchase and Sale of Assets" of the Petitioner corporation. None of the principals in Gainesville Motorcycle had held any position with the petitioner prior to this contract agreement. To effectuate the purpose of transferring the franchise from the petitioner to Gainesville Motorcycle Corporation, Inc., an arrangement was made by Hack to have a meeting with Capps to discuss the acceptance by the Respondent Gainesville Motorcycle Corporation, Inc., as franchisee of the Respondent. This meeting was held on October 22, 1979, in Gainesville, Florida. In the course of the meeting, a discussion was held on the requirements of the Respondent which must be met before the prospective franchisee would be accepted. This included the necessity to execute an application provided by the Respondent and the necessity to demonstrate the financial liquidity of Gainesville Motorcycle Corporation, Inc., in the person of its principals, by having them provide sound financial statements to the Respondent. One of the principals of Gainesville Motorcycle Corporation, Inc., Hack, owned and operated a Yamaha dealership in Gainesville, Florida, and this was a matter of which Capps either knew about prior to the meeting or learned of in the course of the meeting. In dealing with this subject as it related to the possibility that two motorcycle lines would be sold from one store, Capps made known that the acceptability of his circumstance would be dependent on the expectation by the Respondent that the Kawasaki line of product would be promoted on an equal basis with the existing Yamaha line. The idea of selling other manufacturers' motorcycles from the same store in which the Kawasaki product line was being offered is not foreign to the Respondent. The arrangement for the sale of two product lines from one store, to include the Kawasaki line, is acceptable, subject only to equal treatment in the promotion and sales of the Kawasaki product line when contrasted with that of the competing motorcycle product. Sometime in late October, 1979, Hack forwarded three financial statements for the principals Hack, Opp and Murphree to the Respondent in Atlanta, Georgia, together with an application for franchise in the name "Gainesvi1le Motorcycle Corporation". (This application of Gainesville Motorcycle Corporation was not presented as evidence in the hearing.) After receiving the material from the Gainesville Motorcycle Corporation and its principals, a decision was made by the Respondent not to approve their request for franchise and this decision was based upon the unacceptable financial position of those principals. The decision not to accept was communicated by letters addressed to those three principals, dated November 2, 1979. Subsequent to the receipt of the letters, Hack contacted the Respondent to ascertain if it was a possibility that other materials could be submitted in support of the application which would cause the Respondent to change its position on the franchise question. Hack was told that the Respondent would evaluate additional information if it was presented. On November 5, 1979, William A. Parsons, attorney representing the Petitioner, wrote to the Respondent to advise the Respondent that a closing on the pending sale of the Petitioner's business was scheduled for November 19, 1979, and in particular, requesting information from the Respondent. In response to Parsons's correspondence, the Respondent wrote to him on November 8, 1979, and advised Parsons that the sale of the franchise to Hack, Opp, Murphree or anyone in general had not been approved at that time. On November 8, 1979, another dealer visit was made by Capps to the petitioner's location. Further discussion was held between Capps and Meyers on the reason for disapproval of the Gainesville Motorcycle group's reguest for franchise, and Capps also determined in the course of that visit that some of the other floor plan financers of the petitioner, namely, ITT Diversified Credit, had removed one of the Petitioner's motorcycles and other items associated with the business; the effect of that action by ITT being to place the Petitioner in the position of no longer having available inventory in motorcycles to be sold. On November 17, 1979, the petitioner closed the doors to its Kawasaki motorcycle store for the purpose of taking inventory and had not reopened at the time of the hearing in this cause, October 1 and 2, 1980. At no time since the November 17, 1979, date has the Petitioner been engaged as a Kawasaki dealer. Notwithstanding the communication through the letter of November 8, 1979, from the Respondent to attorney Parsons indicating that the Hack, Opp, and Murphree group had not been approved as a Kawasaki franchise dealer, the parties to the purchase contract went to the closing scheduled for November 19, 1979, and on that date through a telephone call directed to officials within the Respondent corporation in Atlanta, Georgia, the parties to the closing were informed that the Hack group had not been approved as prospective franchisees to sell Kawasaki motorcycles, in substitution for the Petitioner corporation. In late November, 1979, Meyers contacted Gary Warren, who operated a Suzuki motorcycle dealership in Gainesville, Florida, to determine if Warren was interested in buying the petitioner's business. Warren thereafter determined to make an application to the Respondent to be granted the Kawasaki franchise for Gainesville, Florida, and agreed with Meyers that he would discuss the possibility of purchasing some of the merchandise items held by Ken's Kawasaki. On November 30, 1979, the Respondent forwarded the necessary material to Warren for Warren to make an application to be the Kawasaki franchise dealer. On December 1, 1979, Hack, Opp and Murphree entered into an arrangement with the Petitioner's landlord by which these parties agreed to lease, with the option to buy, those premises which were then occupied by the Petitioner, on the condition that the new group pay those arrearages in rent then owed by the Petitioner to the landlord. After reviewing Warren's application to become a Kawasaki dealer, Warren was informed that he had been approved. This approval was made known in late December, 1979. Also in late December, 1979, Hack informed Capps that the Yamaha dealership would be moved Petitioner's premises around Christmas of that year. Capps came to Gainesville on January 23, 1980, to enter into a mutual commitment agreement leading to the completion of arrangement s to establish Warren as the local Kawasaki dealer. (During that same trip, Capps went to the location of the Petitioner's dealership and discovered that the Yamaha dealership was in place at that location and there were no signs indicating that the Kawasaki dealership was still in operation at that locale. On that date, the mutual commitment agreement was executed and in provisions of that document was an agreement that Warren would buy his parts kit, accessory kit, and special tools from the Petitioner and that the dealership would operate as "Suzuki- Kawasaki of Gainesville". In pursuit of the agreement to purchase the parts kit, accessory kit and special tools from tie petitioner, discussion was held between Meyers and Warren. Prior to the discussion, Warren had been solicited by ITT Diversified Credit to buy certain products which they had removed from the Petitioner's business. In addition, the petitioner's landlord took Warren to a storage facility where some of the Petitioner's parts and accessories had been stored. Warren was concerned about the Petitioner's merchandise and for that reason asked Meyers to provide bills of sale and to conduct an inventory prior to any purchase by Warren. No bills of sale were forthcoming and Meyers having placed the value of the goods above their fair market value, Warren declined to purchase any of the items owned by the Petitioner in association with its Kawasaki dealership. After receipt of the January 31, 1980, letter or termination end prior to filing his protest to the the cancellation on April 26, 1980, meetings were held between Meyers and the principals of Gainesville Motorcycle Corporation on the subject of filing the protest and after discussion the decision was made to have Hack, on behalf of Gainesville Motorcycle Corporation, finance the protest with the expectation that the Gainesville Motorcycle Corporation would gain the award of the Kawasaki motorcycle franchise through the present action. It is not the intention of Kenneth Meyers to continue to operate the Kawasaki motorcycle business in keeping with his existing franchise issued by the Respondent and Meyers, in making this statement, is authorized to speak for the Petitioner. At present, Kawasaki motorcycles are not being sold from any Kawasaki dealership located in Gainesville, Florida, and this has been the case since November 17, 1979. This lack of sales has not been the result of the Respondent failing to deliver products to the Petitioner. There was no showing in the course of the hearing that the Respondent failed to fairly evaluate the applications of Gainesville Motorcycle Corporation and Gary Warren, prior to determining to accept Warren as the replacement dealer for the Petitioner.
Recommendation Based upon the full consideration of the facts found therein and the Conclusions of Law reached it is RECOMMENDED that the Petitioner, Ken's Kawaski, Inc.'s complaint for unfair cancellation of its dealer franchise agreement be DISMISSED and the cancellation of the Petitioner's franchise agreement with Respondent, Kawasaki Motors Corp, U.S.A., be UPHELD. 1/ DONE AND ENTERED this 3rd day of November 1980, in Tallahassee, Florida. CHARLES C. ADAMS Hearing Officer Division of Administrative Hearings 101 Collins Building Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 3rd day of November, 1980.
Conclusions This matter came before the Department for entry of a Final Order upon submission of an Order Closing File by T. Kent Wetherell, II, an Administrative Law Judge of the Division of Administrative Hearings, a copy of which is attached and incorporated by reference in this order. The Department hereby adopts the Order Closing File as its Final Order in this matter. Said Order Closing file was predicated upon Respondent's notice of withdrawal. Accordingly, it is hereby ORDERED that the Dealer Agreement between JH Global Services, Inc. and Golf Cart Connection, Inc. is terminated. DONE AND ORDERED this I fP: I '1 day of September, 2009, in Tallahassee, Leon County, Florida. CARL A. FORD, Director Division of Motor Vehicles Department of Highway Safety and Motor Vehicles Neil Kirkman Building Tallahassee, Florida 32399 Filed September 15, 2009 3:32 PM Division of Administrative Hearings. Filed with the Clerk of the Division of Motor Vehicles this /ifll day of September, 2009. NOTICE OF APPEAL RIGHTS Judicial review of this order may be had pursuant to section 120.68, Florida Statutes, in the District Court of Appeal for the First District, State of Florida, or in any other district court of appeal of this state in an appellate district where a party resides. In order to initiate such review, one copy of the notice of appeal must be filed with the Department and the other copy of the notice of appeal, together with the filing fee, must be filed with the court within thirty days of the filing date of this order as set out above, pursuant to Rules of Appellate Procedure. CAF:vlg Copies furnished: Les Levy c/o Golf Cart Connection, Inc. 1220 Camp Avenue Mount Dora, Florida 32776 Jane Zhang JH Global Services, Inc. 52 Pelham Davis Circle Greenville, South Carolina 29615 T. Kent Wetherell, II Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 2 Michael J. Alderman, Esquire Assistant General Counsel Department of Highway Safety and Motor Vehicles Neil Kirkman Building, Rm. A-432-02 Tallahassee, Florida 32399-0504 Florida Administrative Law Reports Post Office Box 385 Gainesville, Florida 32602 Nalini Vinayak Dealer License Section 3
Conclusions This matter came before the Department for entry of a Final Order upon submission of an Order Closing File by James H. Peterson, III, an Administrative Law Judge of the Division of Administrative Hearings, a copy of which is attached and incorporated by reference in this order. The Department hereby adopts the Order Closing File as its Final Order in this matter. Said Order Closing File was predicated upon correspondence filed by Respondent, withdrawing its petition. Accordingly, it is hereby ORDERED and ADJUDGED that Petitioner, Swanders, Inc. d/b/a Swanders Auto Mart be granted a license for the sale of motorcycles manufactured by Qianjiang Motorcycles Group Corporation (QINJ) at 5546 North Lecanto Highway, Beverly Hills (Citrus County), Florida 34465 upon compliance with all applicable requirements of Section 320.27, Florida Statutes, and all applicable Department rules. Filed February 26, 2010 8:00 AM Division of Administrative Hearings. DONE AND ORDERED this 2'/'iofFebruary, 2010, in Tallahassee, Leon County, Florida. or Division of Motor Vehicles Department of Highway Safety and Motor Vehicles Neil Kirkman Building Tallahassee, Florida 32399 Filed with the Clerk of the Division of Motor Vehicles this 11.5-1- day of February, 2010. NOTICE OF APPEAL RIGHTS Judicial review of this order may be had pursuant to section 120.68, Florida Statutes, in the District Court of Appeal for the First District, State of Florida, or in any other district court of appeal of this state in an appellate district where a party resides. In order to initiate such review, one copy of the notice of appeal must be filed with the Department and the other copy of the notice of appeal, together with the filing fee, must be filed with the court within thirty days of the filing date of this order as set out above, pursuant to Rules of Appellate Procedure. CAF:vlg Copies furnished: Derick David Affordable ATV's, Inc. d/b/a Axis Powersports 3131 East Gulf to Lake Highway Inverness, Florida 34453 Bobbette Lynott Classic Motorcycles and Sidecars, Inc. Post Office Box 969 Preston, Washington 98050 Carl Swanders Swanders, Inc. d/b/a Swanders Auto Mart 5546 North Lecanto Highway Beverly Hills, Florida 34465 James H. Peterson, III Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 Florida Administrative Law Reports Post Office Box 385 Gainesville, Florida 32602 Nalini Vinayak Dealer License Section
The Issue Whether the Petitioner, JSL Automotive, Inc. d/b/a Ft. Lauderdale Mitsubishi (JSL), is entitled to relocate its motor vehicle dealership.
Findings Of Fact The Petitioner MMSA is a distributor and licensee of motor vehicles as defined by Section 320.60, Florida Statutes. Compared to other established licensees, MMSA is a relative newcomer to the market in Broward County, Florida. Nevertheless MMSA is emerging as a brand able to effectively compete in the segments in which it offers vehicles. Motor vehicle sales are divided into segments so that new car registrations may be tracked by popularity and dealer performance may be compared as to the vehicles it sells and not with those against which it cannot compete. For example, Mitsubishi does not compete in the truck market as it does not offer a new truck for sale. Therefore, Mitsubishi dealers are not expected to effectively compete in the new truck market. MMSA does, however, offer a vehicle to compete in the following segments: basis small (Mirage), lower middle (Galant), upper middle (Diamante), sporty coupe (Eclipse/Spyder), sports car (3000 GT/Spyder), middle SUV (Montero Sport), and upper middle SUV (Montero). As to all of these segments, MMSA has experienced a significant growth in sales in Broward County, Florida. Historically, there were only two franchised Mitsubishi dealers in Broward County. One of those dealerships is the Petitioner JSL. The other long-time Mitsubishi dealer is located to the north of the Petitioner JSL. That dealer is identified in this record as Lighthouse Point. Principal owners of the Respondent King also own the Lighthouse Point dealership. The Petitioner JSL is a franchised motor vehicle dealer fully authorized to lease, sell, and service the product of MMSA. The Petitioner JSL is located at 200 East Sunrise Boulevard, Fort Lauderdale, Florida. The Petitioner JSL has always been located at its current address. The former owner of the franchise owns the real estate and JSL rents the land and facilities in order to conduct its business. The current owners of the Petitioner JSL purchased the dealership in 1997/1998. The lease with the former owner will expire in the next few years and it is the Petitioners’ goal to relocate the dealership to a more modern, larger facility. If unable to relocate, however, the Petitioner could extend its lease with the former owner until approximately 2012. The condition of the property as well as the terms of the lease were known to the Petitioner JSL at the time it elected to purchase the dealership. Because it does not own the facility, the Petitioner JSL has few incentives to improve the physical appearance of the dealership. Thus far it has done little more than paint the buildings. Both the Petitioner JSL and Lighthouse Point are located in the eastern portion of Broward County. The Respondents King and Seidle are also franchised motor vehicle dealers fully authorized to lease, sell, and service the product of MMSA. These dealerships are located in the western portion of the county. The Respondent King's dealership is located at 4950 North State Road 7, Coconut Creek, Florida. The Respondent Seidle's dealership is located at 5395 South University Drive, Davie, Florida. The population growth in Broward County over the last five years is predominantly in the western portion of the county. The areas west of the Petitioner’s dealership have mushroomed in growth both in households and numbers of drivers. Employment and incomes have also increased. As an emerging brand seeking to capitalize on the growth opportunities in the western portion of the county, the Petitioner MMSA encouraged two existing franchised dealers (the Respondents herein) to open new point dealerships in the western portion of Broward County. Consequently, the Respondent King built and opened a new point dealership in the northwest quadrant of the county. This new dealership opened in 1998 and has thus far proven to be a successful franchise. Despite its investment of more than three million dollars (some of which might be allocated to another dealer) in the acquisition, construction, and opening of the dealership, this Respondent has already established itself as the leading sales franchise in the county. Similarly the Respondent Seidle was offered a new point in the southwest quadrant of the county. It acquired, and with MMSA’s help, constructed, and opened its new franchise dealership in March of 2000. The sales data for this dealer is limited due to its recent opening. Based upon conservative estimates, however, it is expected that this new dealership will prove successful at its location. Like the Respondent King, the Respondent Seidle spent in excess of a million dollars in order to open its new point. Unlike the dealership Mr. Seidle owns in Miami, the new point in Davie is considered state of the art in design and function. It is projected that the Davie dealership will perform more successfully than the Miami Seidle dealership. When both King at Coconut Creek and Seidle at Davie were proposed the Respondents assumed they would be the only Mitsubishi dealers authorized to locate in the western half of the county. The Petitioner MMSA did not make any assurances of that nature. The Petitioner MMSA did not become aware of or consider the Petitioner’s request to relocate until after the other two dealers were either under construction or in the final stages of establishing their dealerships in the western portion of the county. The Petitioner MMSA did not misrepresent the relocation request or hide its intention to support the request from the Respondents. The Petitioner JSL seeks to relocate its dealership to the west to a parcel owned by its principal investor, Mr. Smith. The dealership would occupy a portion of the lot now housing Mr. Smith’s Buick dealership. Additionally, the entire facility would be improved in appearance and amenities. Theoretically, the Petitioner JSL would be more able to compete with the newer facilities also located in the western portion of the county. The Petitioner’s current location is nearer to the downtown area of Fort Lauderdale. It is located in a marginal neighborhood with crime and undesirable areas in close proximity. The physical plant itself is dated in appearance and opportunities. The Petitioner JSL has not spent any substantial amount of funds to improve the physical plant, its security, or to acquire off-site storage or support facilities. The proposed relocation site is also in a crime- stricken area however it is west of the predominant crime area. The Petitioner JSL is desirous of improving the proposed site. One of JSL's primary investors would also benefit from such improvements. The Buick dealership owned by Mr. Smith would continue to operate at the property but would have the benefit of the improved facilities. All four Mitsubishi dealers have to shuttle customers to work if service work is to be performed during the day. The driving times for such shuttles would increase depending on the work location of the customers. Persons working in the downtown Fort Lauderdale area would most conveniently utilize the Petitioner’s current location for service. All four dealerships have facilities that meet or exceed the Mitsubishi standards for sales and service volumes. The proposed relocation site would also comply with the Mitsubishi guidelines for sales and service. On August 20, 1999, the Department of Highway Safety and Motor Vehicles published a notice in the Florida Administrative Weekly indicating MMSA's intention to allow the Petitioner JSL to relocate its dealership from its current address to 2300 North State Road 7, Fort Lauderdale, Florida. The notice of the proposed relocation correctly specified that the dealer operator of the relocated Mitsubishi dealership to be Tak Liu a/k/a Ted Johnson. Mr. Johnson is the current dealer operator and is responsible for the day-to-day operations of the Petitioner JSL. Mr. Johnson assumed his role with the company when it was purchased from the former owner of the dealership, a Mr. Holman. Originally, the principal investors of the Petitioner JSL were Ted Johnson, Philip P. Smith, and Jon F. Lutter. Mr. Lutter subsequently sold his interest in the Petitioner JSL to Michael Dayhoff. Regardless of the accuracy of the notice published in the Florida Administrative Weekly regarding the ownership of the Petitioner JSL, such notice correctly identified the dealer seeking to relocate and accurately described its current and proposed locations. Thus all dealers presumably affected by the proposed relocation were put on adequate notice of the proposal submitted by the Petitioners. The Respondent King's dealership is approximately 13 miles in straight line distance from the existing location of the Petitioner JSL. If relocated to the proposed site, JSL would be approximately 11.5 miles in straight line distance from the Respondent King. In terms of driving time, the Respondent King's dealership is approximately 26 minutes in driving time from the Petitioner's existing location. Comparatively the Respondent King's location is approximately 20 minutes in driving time from the Petitioner's proposed location. As for the Respondent Seidle, the Petitioner's current location is approximately 11 miles in straight line distance from the existing JSL dealership. If relocated to the proposed site, the Respondent Seidle would be approximately 9 miles in distance from the Petitioner JSL. If JSL were allowed to relocate, the driving time to the Respondent Seidle's dealership would not significantly change. For purposes of this case, it is determined that the community or territory (comm/terr) served by these dealers is Broward County, Florida. The growth in this market will continue in the foreseeable future as the growths in population, employment, and industry new vehicle registrations have demonstrated. Moreover, the current and future demographic factors indicate that Mitsubishi should be adequately represented by four dealers in this comm/terr. As presently configured the Mitsubishi dealers in the comm/terr are on average 5.2 miles from the consumers in this market area. If allowed to relocate, the distance for consumers would be reduced to 4.4 miles. Either of these distances would allow Mitsubishi to effectively compete with like segment products. The traffic patterns along the major north/south and east/west corridors in Broward County make all existing dealers easily accessible either north to south or east to west. There are no barriers to prevent customers from conveniently accessing dealers to the east, west, south, or north. The relocation of the Petitioner JSL to the proposed site would not dramatically improve this accessibility except for those customers who reside in the western portions of the county. And while the relocation of the JSL dealership to the proposed site would increase the convenience to the western customers, the Mitsubishi customers to the east who were previously served by this dealer would be required to travel a greater distance for sales or service. With the opening and establishment of Seidle in Davie, Mitsubishi customers to the southwest will also have that point for sales and service convenience. The proposed site does not constitute an identifiable plot within the comm/terr to support the relocation of the existing dealer. The newly opened Seidle together with King should adequately provide sales and service to the western portion of this market. Any inconvenience in sales or service previously experienced by the customers in the western portion of the county will be quickly cured. With the expansion of the two new dealers in the western portion of the comm/terr, the Petitioner MMSA should experience increased visibility and sales. The relocation of the Petitioner JSL would diminish the expected success of the Respondents in this western portion of the comm/terr. It is too early to determine whether the Respondent Seidle will be as successful as the Respondent King. Given the investments of both of these dealers, however, it is reasonable to afford them more time to demonstrate the strengths of their abilities to market to the western portion of the comm/terr. Both dealers should be able to meet their obligations to the Petitioner MMSA. Given the demonstrated success of the Respondent King, and the projections for this comm/terr, it is reasonably expected market penetration of the existing dealers as presently located will adequately serve the comm/terr. In this case the Petitioner MMSA has encouraged the existing dealers by offering the existing dealers the opportunities to establish new points in the west, by recognizing the opportunity for sales growth in this comm/terr, and by assuring an adequate number of dealers for this market. The relocation of the Petitioner's dealership will not greatly improve the network of Mitsubishi dealers in Broward County. The Petitioner MMSA has not attempted to coerce the existing dealers into consenting to the proposed relocation of the Petitioner JSL. All existing Mitsubishi dealers are in substantial compliance with their dealer agreements. Without the proposed relocation there is adequate interbrand and intrabrand competition in the comm/terr. Without the proposed relocation there is adequate customer convenience in terms of sales and service. Without sufficient actual data from the sales for the Respondent Seidle, it is impossible to determine whether the relocation is warranted and justified based on economic and market conditions pertinent to dealers competing in the comm/terr. The reasonable projected sales suggest the current dealer configuration to be sufficient and adequate as contemplated by the statute. If future population or household growths exceed the levels projected or if actual sales demonstrate a stronger market than projected, additional points in the western portion of the county may be warranted. The actual volumes of registrations by the existing dealers suggest that the Petitioner JSL could perform stronger without encroaching on the sales reasonably expected to be made by the Respondents. With regard to the Petitioners' assertions that the current neighborhood limits the JSL's ability to do business, it is determined that other motor vehicle dealerships in proximity to the Petitioner's store have remained in business in the neighborhood. Those dealers (Lincoln-Mercury, Rolls Royce, Bentley, Oldsmobile, Saturn, Isuzu, Ford, Jaguar, and Honda) have not relocated due to crime or other neighborhood problems. It is further determined that the data relied upon by Petitioners to calculate a shortfall in the comm/terr failed to recognize that the fourth dealer, the Respondent Seidle, was not in business until March 2000. The addition of the fourth point will relieve an deficiency in performance for the comm/terr.
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 request to relocate the motor vehicle dealership. DONE AND ENTERED this 11th day of September, 2000, in Tallahassee, Leon County, Florida. J. D. Parrish Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 11th day of September, 2000. COPIES FURNISHED: Michael J. Alderman, Esquire Department of Highway Safety and Motor Vehicles Neil Kirkman Building, Room A432 2900 Apalachee Parkway Tallahassee, Florida 32399-0504 John Forehand, Esquire Walter E. Forehand, Esquire Myers, Forehand & Fuller, P.A. 402 North Office Plaza Drive Tallahassee, Florida 32301 Kieran P. Fallon, P.A. 80 Southwest 80th Street, Suite 2804 Miami, Florida 33130 Dean Bunch, Esquire Sutherland, Asbil & Brennan, L.L.P. 2282 Killearn Center Boulevard Tallahassee, Florida 32308-3561 James Gregory Humphries, Esquire Shutts & Bowen 20 North Orange Avenue, Suite 1000 Orlando, Florida 32801-4626 Enoch John Whitney, General Counsel Department of Highway Safety and Motor Vehicles Neil Kirkman Building 2900 Apalachee Parkway Tallahassee, Florida 32399-0500 William T. Joyce, Director Division of Motor Vehicles Department of Highway Safety and Motor Vehicles Neil Kirkman Building, Room B-439 2900 Apalachee Parkway Tallahassee, Florida 32399-0600
Conclusions This matter came before the Department for entry of a Final Order upon submission of an Order Closing File by Daniel Manry an Administrative Law Judge of the Division of Administrative Hearings , a copy of which is attached and incorporated by reference in this order. The Department hereby adopts the Order Closing File as its Final Order in this matter. Said Order Closing File was predicated upon a Second Joint Status Report. On October 2, 2009, the Department received a copy of the Respondent's Withdrawal of Protest. Accordingly, it is hereby ORDERED that the Dealer Agreement between American Suzuki Motor Corporation and Con's Cycle Center, Inc. d/b/a House of Power is terminated. Filed October 23, 2009 9:48 AM Division of Administrative Hearings. DONE AND ORDERED this 22 ay of October, 2009, in Tallahassee, Leon County, Florida. tor Division of Motor Vehicles Department of Highway Safety and Motor Vehicles Neil Kirkman Building Tallahassee, Florida 32399 2,:. .ct. Filed with the Clerk of the Division of Motor Vehicles this n day of October, 2009. Vlriaylllc,O... Admlnlslrlltor NOTICE OF APPEAL RIGHTS Judicial review of this order may be had pursuant to section 120.68, Florida Statutes, in the District Court of Appeal for the First District, State of Florida, or in any other district court of appeal of this state in an appellate district where a party resides. In order to initiate such review, one copy of the notice of appeal must be filed with the Department and the other copy of the notice of appeal, together with the filing fee, must be filed with the court within thirty days of the filing date of this order as set out above, pursuant to Rules of Appellate Procedure. CAF:vlg Copies furnished: Alex Kurkin, Esquire Kurkin Brandes, LLP 4300 Biscayne Boulevard, Suite 300 Miami, Florida 33137 J. Andrew Bertron, Esquire Nelson Mullins Riley & Scarborough, LLP 3600 Maclay Boulevard South, Suite 202 Tallahassee, Florida 32312 Daniel Manry Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 Michael J. Alderman, Esquire Assistant General Counsel Department of Highway Safety and Motor Vehicles Neil Kirkman Building, Rm. A-432 Tallahassee, Florida 32399 Florida Administrative Law Reports Post Office Box 385 Gainesville, Florida 32602 Nalini Vinayak Dealer License Section
Findings Of Fact By stipulation, Jones & Dabney, Inc. has standing. Jones & Dabney, Inc. does business as Tri City Honda Suzuki (Tri City). Tri City sells Honda and Suzuki motorcycles at a dealership located at 14996 US Rte. 19 North. The location, which is in the south-central part of Pinellas County, is east of Largo, southeast of Clearwater, and northwest of St. Petersburg. Tri City formerly sold and serviced only Honda motorcycles. American Suzuki Motor Corporation (American Suzuki) approved Tri City's application for a Suzuki franchise on April 1, 1991. Tri City used its existing Honda location for the Suzuki dealership. Tri City spent $3000 in non-resale items, with nearly half of that amount for special Suzuki tools. Tri City also spent about $12,500 for parts. The initial non-vehicle expenditure of about $15,500 is about $3000 less than usual because American Suzuki allowed Tri City to use existing Honda equipment, such as video equipment, where possible. At the time of the application and approval process, Mr. Jones of Tri City and representatives of American Suzuki discussed the fact that American Suzuki would need a dealer for Pasco and north Pinellas counties. Mr. Jones said that he might be interested in moving his dealership into north Pinellas County. American Suzuki representatives indicated that they would listen to any proposal that Mr. Jones might like to make. However, he never raised the issue after he was awarded the Suzuki franchise. American Suzuki is represented presently in the area of Pinellas, Hillsborough, and Pasco counties by Tri City, a multiline dealer in Tampa (handling Suzuki, Honda, and Kawaski) and a multiline dealer in Zephyrhills, which is in eastern Pasco County (handling Suzuki and Kawaski). Previously, Suzukis were sold and serviced in south Pinellas County by a long-term dealer in Pinellas Park about 4.3 miles south of Tri City's location. The Pinellas Park dealer retired and sold the business, which shortly thereafter failed on January 2, 1991. American Suzuki was also represented in Pasco County and north Pinellas County by a dealer located in Holiday. The Holiday dealership was on US Rte. 19 about one-quarter mile north of the Pasco-Pinellas county line. At one time the fourth largest single-line Suzuki dealer in Florida, the Holiday dealer diversified, lost interest in the Suzuki motorcycle line, and closed the Suzuki dealership on March 2, 1990. The application to which Tri City objects was made more than one year following the closing of the Holiday dealership, so Tri City has a right to protest the establishment of the new dealer. The present case involves the decision of American Suzuki to award a Suzuki franchise to Cycle Springs, Inc. Cycle Springs, is currently a Yamaha dealer located at 37182 US Rte. 19, Palm Harbor. The location is in north Pinellas County just south of Tarpon Springs. Cycle Springs is located about 4 miles south of the former Holiday dealer. The distance between the Cycle Springs and Tri City locations is about 13 miles. It takes about 30 minutes to drive the distance during rush hour. American Suzuki's market share has been slipping in Pasco and Pinellas counties. In 1987, American Suzuki's market share in the national, Florida, Pasco County, and Pinellas County markets was, respectively, 11.57 percent, 12.75 percent, 21.66 percent, and 15.59 percent. By 1990, the manufacturer's market shares had risen to 14.65 percent nationally and remained about the same in Florida at 12.78 percent. But the shares for Pasco and Pinellas counties had fallen to 9.52 percent and 9.91 percent, respectively. In 1991, American Suzuki's market shares climbed in the country to 16.34 percent, in the state to 14.3 percent, and in Pasco County to 13.82 percent. The market share for Pinellas County remained roughly unchanged at 9.88 percent. In 1992, slight changes in market share for the country and Florida (to 15.92 percent and 14.62 percent, respectively) were accompanied by a decline of market share in Pasco County (to 12.2 percent) and an increase in market share in Pinellas County (to 14.44 percent). Market penetration in Pinellas County has improved compared to market penetration in Pasco County, which remains only 56 percent of what it was in 1987. However, even in Pinellas County market penetration is slightly less than it should be. It is about 1.5 percentage points less than it was in 1987 and almost three percentage points less than the average market penetration for American Suzuki in comparable Florida urban markets. Market penetration is based on motorcycle registrations, which, in Florida, exclude a large number of motorcross-type dirt and racing motorcycles and almost all all- terrain vehicles. Market penetration reflects the county in which vehicles are registered, not the location of dealers making sales. Thus, market penetration figures do not precisely reflect actual sales by dealers. However, the sales figures also indicate that Pinellas and Pasco counties are underperforming in terms of Suzuki sales. For 1992, for example, American Suzuki sold only 35 percent of expected sales in Pasco County and Pinellas County. By contrast, in 1988, American Suzuki sold 98 percent of expected sales in Pasco County, but only 39 percent of expected sales in Pinellas County, which suggests that the expected sales in Pasco County is realistic, but the expected sales in Pinellas County--due to demographic reasons-- is not realistic. American Suzuki has given Tri City a reasonable opportunity to increase Suzuki market share in the area. Tri City's initial order of vehicles has been sold except for one 250 cc dirt bike and one 350 cc dirt bike, which Mr. Jones chose to order with guidance from an American Suzuki representative, and two 80 cc motorcycles, which Mr. Jones ordered at the request of the American Suzuki representative in order to obtain these small, relatively inexpensive bikes for another dealer, who unfortunately reneged on his agreement to buy the bikes from Tri City. As of May 3, 1993, a total of 12 vehicles in Tri City's 55-vehicle inventory remain from 1991 orders, including the four described in the preceding paragraph. Except for three vehicles ordered in 1993, the rest of the inventory was purchased in 1992. From May, 1992, to April, 1993, Tri City has worked down its inventory of Suzukis from 90 to 55 vehicles. This corresponds to Tri City's initial order of 58 vehicles. In reducing its inventory during 1992, when Tri City took 77 vehicles from Suzuki, Tri City took only 27 vehicles in 1993, including only 18 of the 31 motorcycles allocated to it. American Suzuki has given Tri City a reasonable opportunity to increase market share and sales. Tri City has generally not been out of the better-selling Suzukis, but apparently has elected to reduce inventory, rather than try to increase sales, in order to sustain a more comfortable ratio of inventory to vehicles than the ratio that prevailed in 1992. At present, Tri City does not appear well-situated to increase sales in Pinellas County or Pasco County, and the failure to do so, especially in Pasco County where American Suzuki has lost considerable sales and market share, tends to demonstrate inadequate representation. Tri City and Cycle Springs are about eight miles, or 38 percent, closer than the former Holiday and Pinellas Park Suzuki dealers. While greater geographic spread might be optimal, American Suzuki attempted to fill the Pasco County location for some time without success. Due to the reduced profitability of motorcycle dealerships, when compared to many automobile dealerships, it is often necessary to obtain an existing dealer or to convert a small retail operation, such as a lawnmower store. In this case, American Suzuki investigated the available possibilities and Cycle Springs appears to have emerged as the lone suitable applicant that was interested in taking on the Suzuki line. Analysis of recent Suzuki sales by Tri City, recent Yamaha sales by Cycle Springs, and older Suzuki sales by the former Holiday dealer discloses that Tri City would not likely lose Suzuki sales to Cycle Springs. Tri City sales will likely concentrate in north-central Pinellas County, and Cycle Springs sales will predominate in Pasco and north Pinellas counties. The availability of another Suzuki dealer for sales and service may increase Tri City's Suzuki sales as potential customers perceive competitive advantages in the pricing and availability of products and service. For the reasons set forth above, American Suzuki has proved that Suzuki is inadequately represented in the relevant market and that the establishment of Cycle Springs as a new Suzuki dealer is justified. There is no evidence that Tri City's investment in American Suzuki products is excessive. American Suzuki has not denied Tri City the opportunity for reasonable growth and market expansion. There is no evidence that the establishment of the new dealership would seriously jeopardize the investment in Suzuki products and equipment already made by Tri City. The availability of another Suzuki sales and service location may enhance sales and service for both dealers and will favorably impact consumers and the public interest.
Recommendation Based on the foregoing, it is hereby RECOMMENDED that the Department of Highway Safety and Motor Vehicles enter a final order dismissing the protest of Jones & Dabney, Inc. to the proposed establishment by American Suzuki Motor Corporation of a Suzuki dealership at Cycle Springs, Inc., 37182 US Rte. 19 North, Palm Harbor, Florida. ENTERED on May 19, 1993, in Tallahassee, Florida. ROBERT E. MEALE Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings on May 19, 1993. COPIES FURNISHED: Charles J. Brantley, Director Division of Motor Vehicles Room B439, Neil Kirkman Building Tallahassee, Florida 32399-0500 Enoch Jon Whitney, General Counsel Department of Highway Safety and Motor Vehicles Neil Kirkman Building Tallahassee, Florida 32399-0500 Dean Bunch Cabaniss, Burke & Wagner 851 East Park Ave. Tallahassee, Florida 32301 Philip L. Jones Jones & Dabney, Inc. 14996 US Rte. 19 North Clearwater, Florida 34624
