The Issue Whether the application of Kawasaki Motors Corporation USA (Kawasaki Motors) to establish an additional franchised dealership for the sale of Kawasaki motorcycles to be located at Action Jet Sports, Inc. (Action Jet), 2705 1st Street, Bradenton, Manatee County, Florida, should be granted.
Findings Of Fact Based on the evidence presented at the hearing and the record as a whole, the following findings of fact are made: Petitioner Kawasaki Motors, is a licensed distributor of motor vehicles in Florida and is authorized to sell motor vehicles to its dealers in Florida. Petitioner Action Jet is a licensed motor vehicle dealer in Florida and is located at 2705 1st Street, Bradenton, Florida. Respondent Granny's Motorsports is a licensed motor vehicle dealer in Florida and an existing Kawasaki dealer located at 2001 University Parkway, Sarasota, Florida. In 1991, Granny's Motorsports was formed from the purchase of an existing dealership known as "Cycles N' Stuff" located on 17th Street in Sarasota, Florida. However, with the approval of Kawasaki Motors, Granny's Motorsports relocated to its present location in July 1997. Granny's Motorsports sold the full product line of licensed motor vehicles for Kawasaki, Yamaha, and Suzuki at its 17th Street location and currently sells the full product line of these manufacturers. Petitioner Kawasaki Motors proposes to allow the establishment of Action Jet as a dealership for the sale of Kawasaki motorcycles. Granny's Motorsports has standing to protest the proposed establishment of Action Jet as a Kawasaki motorcycle dealership pursuant to Section 320.642(3), Florida Statutes. This proceeding is governed by Section 320.642, Florida Statutes, which sets forth the conditions for establishment of an additional dealer if a protest is filed. According to that provision, Kawasaki Motors will be allowed to establish a new dealership if the existing franchised dealer is not providing adequate representation of Kawasaki vehicles in the subject community or territory. While that provision lists factors which may be considered in making this determination, the statute does not define "community or territory" or "adequate representation." A determination of what constitutes the appropriate "community or territory" is a question of fact that must be made on a case-by-case basis. To determine whether a market is so connected as to form a community or territory, there must be significant cross- sell between the existing dealer in Sarasota/Bradenton and the fringe dealers, those in the surrounding area, to consider if they are, in fact, acting as one market. The consumer data used for analysis of sales in the motorcycle industry is assembled and provided by the Motorcycle Industry Council (MIC). Although MIC data contains information for all motorcycle products for the purposes of establishing adequacy of representation under Section 320.642, Florida Statutes, only information relative to on-road motorcycles and dual-purpose motorcycle sales has been considered. Six Kawasaki dealers in Pinellas, Hillsborough, Polk, and Charlotte counties occupy the area surrounding the Manatee and Sarasota county area. Consumer behavior data indicates that very few of the Kawasaki sales made by these six dealers are made to customers residing in Sarasota and Manatee counties. Rather, the vast majority of the sales into Sarasota and Manatee counties is made by Granny's Motorsports. After excluding these fringe dealers from the potential community or territory, it was necessary to determine whether there was sufficient cross-sell within Sarasota County and Manatee County to determine whether these two counties are connected from a Kawasaki marketing standpoint. However, because the proposed dealer in Bradenton is not in place yet and there is only one existing dealer in the area, there is no cross-sell and this analysis is not possible. Analysis of consumer behavior and cross-sell patterns demonstrate that, for Kawasaki motorcycles, Sarasota and Manatee counties are a single market and comprise the Bradenton/Sarasota community or territory for the purpose of analysis under Section 320.642, Florida Statutes. A primary market area (PMA) or identifiable plot, in which an existing or proposed resident dealer has or should have a competitive advantage over same line-make dealers by virtue of the resident dealer's location. Each dealer, including Granny's Motorsports, is assigned a primary market area of a radius of five miles around his dealership. However, this distance was considered to be too small to constitute a reasonable area for market analysis. The starting point for establishing the PMAs for Granny's Motorsports and the proposed Bradenton dealership, Petitioner Action Jet, was the assignment of zip codes within the Bradenton/Sarasota community or territory. Utilizing this process, generally, zip code areas closest to Granny's Motorsports were assigned to that dealer and those zip code areas closest to the proposed Bradenton dealership, Action Jet, were assigned to that dealership. However, in certain instances, although the center of a zip code was closer to one dealer, the roads and traffic patterns suggested that a zip code should be assigned to a different dealer's PMA. This situation was present in this case and, accordingly, several zip codes were assigned on a basis other than distance. The Sarasota PMA is the area in which Granny's Motorsports is located and in which it has a geographic advantage. Moreover, Granny's Motorsports will continue to have that advantage even after the establishment of Action Jet. The Bradenton PMA is the area in which the proposed Action Jet dealership would have an advantage upon its establishment. In the Bradenton/Sarasota community or territory, there are eleven competing line-make motorcycle dealers. To determine whether the existing Kawasaki dealers are providing "adequate representation" in the Bradenton/Sarasota community or territory, the factors enumerated in Section 320.642, Florida Statutes, may be considered. The most common measure for evaluating the performance of a dealer network is analysis of market penetration data. Market penetration represents the competitive efforts of all the dealers, using data concerning the sale of all brands to comprise a single indicator also called market share. This is the single most objective and accurate measure of market activity. Market share represents the sales of a manufacturer, such as Kawasaki, in proportion to the business available. To develop a standard to measure adequacy of representation for the Bradenton PMA, the Sarasota PMA, or the community or territory, the first step is to attempt to locate an area near the area being studied, but which does not overlap with that area where Kawasaki is adequately represented. After adjusting for product popularity differences, the Polk County standard offers the most appropriate expected market penetration against which to judge the performance of Kawasaki in the Bradenton/Sarasota community or territory and in the Bradenton and Sarasota PMAs which make up that community or territory. In this case, Polk County, which is adjacent to the Bradenton/Sarasota community or territory, appears to be adequately represented because it exceeds the Florida average for Kawasaki. The Florida average is a conservative standard because it takes into consideration Kawasaki's performance in areas with adequate, inadequate, and no representation. Polk County is also an appropriate starting point for determining a reasonably expected market penetration because it represents actual experience of the Kawasaki penetration which is being obtained in an adjacent area. However, when comparing one market to another, adjustments must be made for consumer preferences which might differ from one market to another. This is important because consumer preferences among different types of motorcycles, independent of brand, are beyond the control of the dealers. Market segmentation adjusts for consumer preferences which differ between markets. Sales data by segment reflects actual consumer purchases, implicitly accounting for the effects of all demographic characteristics including age, income, education, size-class preferences, and product popularity on vehicle purchase behavior. In this proceeding, only on-road motorcycle and dual- purpose motorcycles are considered. With regard to these categories, the MIC classifies motorcycles into five segments. These segments list models which are comparable to one another and are presumably, competing for the same customers. By measuring Kawasaki's penetration in each segment achieved in Polk County, compared to the opportunity available in each segment in the Bradenton/Sarasota community or territory, an appropriate standard is established for what the Bradenton/Sarasota community or territory should expect if it were receiving adequate representation. Using the Polk County average and adjusting for local segment popularity, the reasonably expected market share for Kawasaki on-road and dual-purpose motorcycles in the Bradenton/Sarasota community or territory was 16.47 percent in 1996; 13.69 percent in 1997; 16.70 percent in 1998; and 16.21 percent for the first nine months of 1999. Alternatively, using the more conservative Florida average as a standard and adjusting for product popularity, Kawasaki in the Bradenton/Sarasota community or territory would be expected to achieve 16.24 percent in 1996; 13.49 percent in 1997; 13.94 percent in 1998; and 12.89 percent for the first nine months of 1999. The reasonably expected segment penetration for Polk County, adjusted for local segment popularity, is accepted as the appropriate standard against which to judge the performance of the Bradenton/Sarasota community or territory. After making the market segment adjustments, Kawasaki Motors' market penetration in the Bradenton/Sarasota community or territory was below reasonably expected levels for the period 1996 through the last nine months of 1999. This is the case whether using the Polk County average or the Florida average. The actual penetration of Kawasaki in the Bradenton/Sarasota community or territory was 13.69 percent in 1996; 10.37 percent in 1997; 9.12 percent in 1998; and 6.81 percent for the first nine months in 1999. Using the Polk County average standard, from 1996 through the first nine months of 1999, the Bradenton/Sarasota community or territory's performance declined from 83 percent of expected in 1996 to only 42 percent of expected in 1999. By comparison, utilizing the Florida average as a standard, the Bradenton/Sarasota' performance went from 84.3 percent of expected in 1996 to only 52.9 percent of expected in 1999. The net shortfall in units, or the number of on-road and/or dual-purpose motorcycles, which would be required to be sold in order to bring Kawasaki in the Bradenton/Sarasota community or territory up to the expected performance, was 12 units in 1996, 16 units in 1997, 44 units in 1998, and 51 units in 1999. Using the more conservative Florida standard, the net shortfall increased from 11 in 1996 to 33 in 1999. Similar patterns emerge when Kawasaki's penetration in the Bradenton PMA and the Sarasota PMA is compared with expected penetration based upon the Polk County and Florida standards. Utilizing the segment analysis, Kawasaki's actual performance compared to expected in the Bradenton PMA has fallen from 85.7 percent of expected in 1996 to 53.8 percent of expected in the first nine months of 1999. A temporary effect of the relocation of Granny's Motorsports north to its new location, which opened in July 1997, can be seen as the actual penetration reached 100 percent of expected in 1997. However, since that time, the performance of the Bradenton PMA has continued to fall to a point substantially lower than it was prior to the relocation. Similar results are seen when the Bradenton PMA's performance is compared to the Florida average. Kawasaki's representation in the Sarasota PMA, where Granny's Motorsports is located, also has fallen consistently for the past four years. Using the Polk County standard, Granny's Motorsports went from achieving 82 percent of its expected penetration in 1996 to 35.9 percent in 1999. By comparison, using the Florida standard, the Sarasota PMA went from achieving 83.7 percent of its expected penetration in 1996 to 46 percent in 1999. The steady decline over time demonstrates that Granny's Motorsports, the only dealer in the Bradenton/Sarasota community or territory, may not be able to adequately represent Kawasaki in its own PMA because it is attempting to cover an area which is too large for it to adequately serve. In terms of reasonably expected market penetration, the Bradenton/Sarasota community or territory, as well as the Bradenton PMA and the Sarasota PMA, are not receiving adequate representation for Kawasaki. Factors contributing to Kawasaki's receiving inadequate representation in the Bradenton/Sarasota community or territory and in the Bradenton PMA and the Sarasota PMA may be the number and location of the dealers. However, a determination that the establishment of a second dealership in the Bradenton/Sarasota community or territory is warranted must be based on the economic and marketing conditions pertinent to dealers competing in the community or territory, including anticipated changes. The current and future demographic factors in the Bradenton/Sarasota community or territory indicate that the addition of a Kawasaki Motors dealer is justified in terms of economic or marketing conditions pertinent to dealers competing in the community or territory. The Bradenton/Sarasota community or territory has experienced considerable economic and market growth. Since 1980, the community/territory has had a significant increase in the driving age population and households. This trend is predicted to continue through 2003. An additional indication of the economic growth is the increase in the annual employment. In Sarasota and Manatee Counties, the annual average employment has increased by approximately 52,000 jobs between 1990 and 1999. The Bradenton PMA and the Sarasota PMA have also experienced substantial growth with such trends predicted to continue through 2003. Demographic factors in both the Bradenton and Sarasota PMAs are conducive to selling new motorcycles. They both contain a reasonable mix of upper and middle income areas. The median household income of the new motorcycle buyer falls into the range of around $50,000. In terms of the growth of the total motorcycle industry, as reflected by the on-road and dual-purpose segment, there has been a substantial increase in the amount of the total industry sales, for which Granny's Motorsports can compete, available since 1996. This increase is present in both the Bradenton PMA and the Sarasota PMA. In light of the growth in the total available motorcycle market, measured by total industry sales, coupled with the demographic and employment characteristics, the inadequacy of representation is not due to local demographic or economic factors or lack of growth in the motorcycle industry. Rather, the inadequacy of representation is likely due the inability of one dealer to keep pace with the growth in the market. The distance between Granny's Motorsports and the proposed Action Jet location is 7.8 miles and 19 minutes and 8 seconds driving time. From a geographical standpoint, the Bradenton/Sarasota community or territory is large, approximately 40 to 50 miles from north to south. Despite this large area and the increase in the size of the motorcycle market, the Bradenton/Sarasota community or territory is served by only one Kawasaki dealer. Establishment of an additional Kawasaki dealer is justified based on the size of the market in the Bradenton/Sarasota community or territory, measured in comparison to Polk County and the number of Kawasaki dealers and competitors there. For example, in the Bradenton/Sarasota community or territory, where Kawasaki is receiving inadequate representation, Kawasaki has 9.1 percent of the franchises. In Polk County, where Kawasaki is receiving adequate representation, Kawasaki has 20 percent of the franchises. In order to have the same share of the franchises in Bradenton/Sarasota which it has in Polk County, Kawasaki would be required to have 2.5 dealerships. Therefore, in addition to the one dealership present in the Bradenton/Sarasota community or territory at this time, Granny's Motorsports, one additional Kawasaki dealer is needed. The inadequate market penetration for Kawasaki demonstrates that there is insufficient inter-brand competition, or competition between dealers selling different brands. Moreover, there is no intra-brand competition between Kawasaki dealers because none of the other Kawasaki dealers in the surrounding area sell meaningful numbers of units into the Bradenton/Sarasota community or territory. The proposed location in Bradenton has a concentration of motorcycle purchasers which justifies the placement of a Kawasaki dealership in Manatee County. The establishment of the Bradenton dealership will likely benefit consumers and the public interest. It will provide the growing population of the Bradenton/Sarasota community or territory with a more convenient place to shop for Kawasakis and more convenient Kawasaki service. The probable impact of the proposed additional dealership on the existing Kawasaki dealer can be determined by examining the gross sales loss in the Bradenton/Sarasota community or territory. The gross sales loss is the number of on-road and/or dual-purpose motorcycles sold in the subject community or territory by the competitive dealerships in that area. The gross sales loss in the Bradenton/Sarasota community or territory was 48 units for 1998. In addition to this opportunity being available to the existing Kawasaki dealer, there were 9 units of in-sell or Kawasaki units sold by dealers outside the Manatee and Sarasota Counties to local customers. Thus, there is a total lost opportunity of 57 units for which Granny's Motorsports can compete. If the new proposed dealer is established, there will be no necessary negative impact on Granny's Motorsports because there is opportunity available to be captured from inter-brand competitors. When a dealer is added to a market with inadequate representation, typically, competition is enhanced and the market for the product expands over what it otherwise would have been. The addition of Action Jet will have a positive impact on consumers. It will provide additional competition and a much more convenient shopping alternative. The addition of a dealership will likely benefit Kawasaki Motors in terms of additional sales of motorcycles and market share. Granny's Motorsports has made a substantial investment in its current and previous facilities. In 1991, when Granny's Motorsports purchased an existing dealership located on 17th Street in Sarasota, extensive renovations were performed, the equipment was updated, and the staff was increased and trained. In 1996, Granny's Motorsports purchased the property at which its present dealership is located. After applying for and receiving the approval of Kawasaki Motors, in July 1997, Granny's Motorsports moved into the new facility located on University Parkway in Sarasota. However, the University Parkway facility, which had previously been a boat manufacturing plant, required extensive renovations before Granny's Motorsports could occupy the facility. Granny's Motorsports' total investment in the new facility was about $1,000,000. Although Kawasaki Motors approved the relocation of Granny's Motorsports, it never suggested or recommended the relocation. Therefore, the substantial costs associated with and resulting from Granny's Motorsports' relocation were not incurred to perform obligations under the dealer agreement between Kawasaki Motors and Granny's Motorsports. Rather, the investment and expenditures made by Granny's Motorsports were for the business as a whole, which includes the sale of the full product line of not only Kawasaki, but also of Yamaha and Suzuki. Granny's Motorsports' current location on University Parkway is near the Sarasota and Manatee County line and is centrally located between Sarasota and Bradenton and in the middle of two main clusters of population for the Bradenton/Sarasota community or territory. However, the market share deficiency suffered by Kawasaki demonstrates that the facility is not in a location from which Granny's Motorsports has been able to adequately represent Kawasaki in the community or territory and, in specifically in the Bradenton PMA. By allowing Granny's Motorsports to relocate to the location it requested, Kawasaki Motors allowed Granny's Motorsports the opportunity to take advantage of the growing market within Manatee and Sarasota counties in the manner it requested to do so. Granny's Motorsports has been in the University Parkway facility for over two years, but Kawasaki's market share continues well below an acceptable minimal standard and is declining. Granny's Motorsports is an adequate facility and its owner and manager are doing what they believe is the best they can do to maximize their efforts to sell Kawasaki Motors product. Notwithstanding these efforts, Granny's Motorsports was not been able to effectively service the entire Bradenton/Sarasota community or territory. Prior to 1978, a Kawasaki dealership had been established in Bradenton. That dealership had coexisted with the dealership in Sarasota until it went out of business in 1993 because of an absentee owner and management and operation problems. In fact, when Granny's Motorsports brought its dealership in Sarasota in 1991, the Kawasaki dealership was operating in Bradenton. Kawasaki Motors believes that by replacing the dealership in Bradenton which had been very successful for many years, it will be able to better service the Bradenton/Sarasota community or territory. Kawasaki Motors' low market share compared to expected in the Bradenton/Sarasota community or territory indicates that Kawasaki's one dealer network is currently unable to offer adequate inter-brand competition in the Bradenton/Sarasota community or territory. The failure of the efforts of the existing Kawasaki dealer to reach the minimum expected market share in the Bradenton/Sarasota community or territory demonstrates that the existing Kawasaki dealer is not nearly capturing all reasonably available sales. There is significant untapped market opportunity available in the Bradenton/Sarasota community or territory. This is due, at least in part, to the size of the market and a single dealer's inability to serve the entire market. The market opportunity is so great that Action Jet, the proposed dealer to be established in the Bradenton PMA, likely will not be able to capture all of the increased sales from opportunity currently lost to inter-brand competitors. Therefore, Granny's Motorsports will have the opportunity to increase its current sales level. Having a convenient dealer in the Bradenton/Sarasota community or territory can stimulate new sales interest in Kawasaki across the market. If existing Kawasaki dealers respond aggressively and offer competitive value, they will capture some of the increased sales generated by the presence of the additional dealer in the Bradenton/Sarasota 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 approving the establishment of Kawasaki Motors' dealership at Action Jet, 2705 1st Street, Bradenton, Florida. DONE AND ENTERED this 8th day of May, 2000, in Tallahassee, Leon County, Florida. CAROLYN S. HOLIFIELD 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 8th day of May, 2000. COPIES FURNISHED: Dean Bunch, Esquire Kelly A. O'Keefe, Esquire Sutherland, Asbill and Brennan, L.L.P. 2282 Killearn Center Boulevard Tallahassee, Florida 32308 Charles D. Bailey, III, Esquire Bowman, George, Scheb, Toale and Robinson 22 South Tuttle Avenue, Suite 3 Sarasota, Florida 34237 Andrew H. Cohen, Esquire Hankin, Perrson, Davis & Darnell 2033 Main Street, Suite 400 Sarasota, Florida 34237 Charles J. Brantley, Director Department of Highway Safety and Motor Vehicles Neil Kirkman Building 2900 Apalachee Parkway Tallahassee, Florida 32399-0500 Michael J. Alderman, Esquire Department of Highway Safety and Motor Vehicles Neil Kirkman Building, Room A432 2900 Apalachee Parkway Tallahassee, Florida 32399-0500
Conclusions This matter came on for determination by the Department upon submission of an Order Closing Files by Thomas P. Crapps, an Administrative Law J udge 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. Petitioner, Southeast Toyota Distributors, LLC and Germain of Sarasota, LLC d/b/a Germain Toyota of Sarasota and d/b/a Germain Scion of Venice, having previously filed a Notice Of Withdrawal Of Notice Of Establishment And Motion To Dismiss, a copy of which is attached and incorporated by reference in this order, therefore, the proceeding is moot. Accordingly, it is hereby ORDERED that this case is CLOSED Filed December 23, 2010 10:30 AM Division of Administrative Hearings is 25% . DONE AND ORDERED this day of December, 2010, in Tallahassee, Leon } CARL A. FORD, Director Division of Motor Vehicles Department of Highway Safety and Motor Vehicles Neil Kirkman Building Tallahassee, Florida 32399 County, Florida. Filed with the Clerk of the Division of Motor Vehicles this day of December, 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/vig Copies furnished: John W. Forehand, Esquire Kurkin Forehand Brandes, LLP 800 North Calhoun Street, Suite 1B Tallahassee, Florida 32303 William Lawrence Rogers, Esquire William L. Roger, P. L. 218 Raceway Drive Mooresville, North Carolina 28117 L. Taylor Ward, Esquire Linda Kleinman Southeast Toyota Distributors, LLC 100 Jim Moran Boulevard Deerfield Beach, Florida 33442 J. Andrew Bertron, Esquire Nelson Mullins Riley & Scarborough, LLP 3600 Maclay Boulevard South, Suite 202 Tallahassee, Florida 32312 Thomas P. Crapps Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 Nalini Vinayak Dealer License Administrator
The Issue Whether the application of Peace Industry Group (Peace) and Bayside Auto Sales, Inc. (Bayside) to establish an additional franchised dealership for the sale of Astronautical Bashan motorcycles to be located at Bayside Auto Sales, 1301 Harrison Avenue, Panama City, Bay County, Florida, should be granted.
Findings Of Fact Petitioner Peace is a licensed distributor of motor vehicles in Florida and is authorized to sell motor vehicles to its dealers in Florida. Petitioner Bayside is a licensed motor vehicle dealer in Florida and is located at 1301 Harrison Avenue, Panama City, Florida. Respondent Moto is a licensed motor vehicle dealer in Florida and an existing Astronautical Bashan dealer located at 12202 Hutchison Blvd Suite 72, Panama City Beach, Florida. Currently, Moto sells the product line of Peace, including the Astronautical Bashan product line. Additionally, Moto has a franchise agreement with Peace. The agreement establishes a franchise territory with a 25-mile radius around Moto’s location. Petitioner Peace proposes to establish Bayside as a dealership for the sale of Astronautical Bashan motorcycles. The proposed dealership would be within six miles of Moto’s dealership. The two dealerships are located in Bay County and are separated by the Hathaway Bridge. Both draw customers from Bay County, with at least 20 percent of Moto’s customers located within 20 miles of Moto’s location. There was no consumer data or analysis of sales in the motorcycle industry offered into evidence. However, Moto’s franchise agreement with Peace establishes a market area of at least a 25-mile radius from Moto’s location. Bayside clearly is located within Moto’s market area. There was no evidence which demonstrated Peace’s market share in the motorcycle market. There was no evidence presented analyzing the motorcycle market in the Panama City area. Likewise, there was no evidence presented regarding anticipated growth in the market area. This type of evidence is generally presented by the distributor or manufacturer of the product. As indicated, Peace did not appear at the hearing. Given this lack of evidence, the market share for Peace or Astronautical Bashan motorcycles cannot be established. Moreover, a determination that the establishment of a second dealership in the Panama City territory is warranted must be based on the economic and marketing conditions pertinent to dealers competing in the territory. Given this lack of evidence, Petitioners failed to establish that Peace was underrepresented in the Panama City/Bay county area. Since there is no evidence to support the establishment of a second dealership, Petitioners’ application to establish such a dealership should be denied.
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 Peace's dealership at Bayside, 1301 Harrison Avenue, Panama City, Florida. DONE AND ENTERED this 13th day of February, 2009, in Tallahassee, Leon County, Florida. S DIANE CLEAVINGER Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 13th 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 Larry Bradberry Bayside Auto Sales, Inc. 1301 Harrison Avenue Panama City, Florida 32401 Wayne Wooten Moto Import Distributors, LLC 12202 Hutchison Boulevard, Suite 72 Panama City Beach, Florida 32407 Lily Ji Peace Industry Group, Inc. 6600-B Jimmy Carter Boulevard Norcross, Georgia 30071 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
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
The Issue The issue in this case is whether Petitioner's application to establish a dealership to sell motorcycles manufactured by JMSTAR Motorcycle Company should be approved.
Findings Of Fact Petitioner is a Florida-limited liability company located in Pinellas County, Florida.1 Petitioner is in the business of selling motorcycles and motorscooters. In February 2009, Petitioner submitted to DHSMV a letter of intent to establish A1 Motorscooters.com, LLC, as a new dealership for the purpose of selling JMSTAR motorscooters. Notice of that intent was duly published in the February 27, 2009, FAW, Volume 35, Number 8. In its letter of intent to DHSMV, Petitioner did not list Respondent as a dealer with standing to protest its letter of intent. That was due to the fact that Respondent did not appear on the list of licensed dealers provided to Petitioner by DHSMV (as will be discussed more fully herein). Respondent is a Florida-limited liability company doing business in Pinellas County, Florida. It sells different makes of motorcycles. On June 4, 2009, Respondent was made aware of Petitioner's letter of intent (some 98 days after Petitioner's Notice was published). Respondent immediately filed a protest, stating that Respondent was "approved" to sell the same line of motorcycles and that Respondent "just received [their] license and began selling several months ago." In October 2008, Respondent received a Final Order from DHSMV approving Respondent as a dealer for the JMSTAR line of motorcycles. That Final Order gave Respondent a preliminary approval to sell JMSTAR motorcycles, but only upon completion of the application process and issuance of a license by the Department. Respondent's license was, ultimately, issued effective April 21, 2009. Thus, at the time of the FAW Notice as to Petitioner's new dealership, Respondent had been preliminarily approved, but was not a licensed dealer of JMSTAR motorcyles. Respondent had a prior agreement with SunL Group, Inc. ("SunL"), to sell motorcycles as a franchisee or independent contractor. Under that arrangement, Respondent could sell various kinds of motorcycles, including the JMSTAR line. At some point in time, the agreement between SunL and Respondent was terminated. Further, SunL's dealership license was revoked by DHSMV on June 5, 2009. SunL was not a party to this proceeding, and no one appeared on its behalf. When Petitioner filed its letter of intent with DHSMV, it asked for and received a list of all authorized dealers of JMSTAR motorcycles so that those dealers could be appropriately notified. DHSMV provided a list to Petitioner. Respondent was not on the list because, at that time, Respondent was not yet a licensed dealer of JMSTAR motorcyles. (Apparently SunL was a licensed dealer and could have protested Petitioner's letter of intent, but there is no evidence that it did so.) Respondent did not provide any credible testimony or other competent evidence at final hearing as to the impact of Petitioner's proposed dealership on Respondent, nor were any of the review criteria set forth in Florida Statutes concerning the approval or denial of a new dealership discussed by either party.
Recommendation Based on 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 denying Respondent, ECO Green Machine, LLC's, protest of Petitioner, A1 Motorscooter.com, LLC's, proposed dealership. DONE AND ENTERED this 12th day of January, 2010, in Tallahassee, Leon County, Florida. R. BRUCE MCKIBBEN Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 12th day of January, 2010.
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
The Issue 1. Whether the applications which are the subjects of DOAH Case Nos. 96-4970 and 96-4971 should be granted. 2a. Whether the respondents in DOAH Case No. 96-5525 committed the violations alleged in the Amended Administrative Complaint issued in that case. 2b. If so, what sanctions should be imposed.
Findings Of Fact Based upon the evidence adduced at hearing and the record as a whole, the following findings of fact are made: The Department is a state government licensing and regulatory agency, which, among other things issues motor vehicle retail installment seller (MVRIS) licenses. Jack Bowshier Buick-Pontiac-GMC Trucks, Inc. (Bowshier Buick) is a corporation organized under the laws of the State of Florida. Bowshier Buick formerly operated an automobile dealership at 2445 Southeast Federal Highway in Stuart, Florida, and held a MVRIS license issued by the Department. At all times material to the instant cases, Jack A. Bowshier, Sr., in his capacity as owner/director/president, and Jack D. Bowshier, Jr., in his capacity as general manager/director, exercised control over the policies and practices of Bowshier Buick. On or about October 25, 1995, the Department began an investigation into the business affairs of Bowshier Buick. The Department's investigation revealed, among other things, that Bowshier Buick engaged in the practice of reselling "trade-ins" without timely satisfying the existing liens on the vehicles. Such practice, which was the product of cash flow problems the dealership was experiencing, adversely affected the credit ratings of those who had "traded-in" these vehicles and prevented the ultimate purchasers of the vehicles from timely obtaining new certificates of title. In the "deal jackets" that the dealership created to place the paperwork relating to the transactions involving these "traded-in" vehicles, the Department's investigators found copies of checks which were made payable to those who held the liens on these "trade-in" vehicles. The investigators subsequently discovered, however, that these checks had not been timely sent to the lienholders, but instead had been placed in the desk drawer of the dealership's office manager, Christine Casale. On several occasions, when customers who had "traded-in" vehicles complained to the dealership that the liens on their vehicles had not been satisfied, they were told by Casale that the checks to satisfy the liens had been mailed to the lienholders, when in fact they had not been. Such misrepresentations were made in an effort to mislead and deceive these complaining customers. In making these fraudulent misrepresentations, Casale acted pursuant to instructions that had been given to her by Jack A. Bowshier, Sr., and Jack D. Bowshier, Jr. On November 3, 1995, the Department issued an Emergency Immediate Temporary Final Order to Cease and Desist and Suspension of [Bowshier Buick's] Motor Vehicle Retail Installment Seller's License (Emergency Order) in Administrative Proceeding Nos. 4287-F-11/95, 4287a-F-11/95, and 4287b-F-1195. Bowshier Buick, Jack A. Bowshier, Sr., and Jack D. Bowshier, Jr., were named as respondents in the Emergency Order. The Department alleged in the Emergency Order that they had committed the following violations of the law for which they are subject to the penalties as set forth in Section 520.995, Florida Statutes: Violation of Section 520.995(1)(b), Florida Statutes, in that they have perpetrated fraud, misrepresentation, deceit, or gross negligence in retail installment transactions, regardless of reliance by or damage to the buyer. Violation of Section 520.995(1)(b), Florida Statutes, in that they have committed criminal conduct in the course of their Motor Vehicle Retail Installment Sellers business. Violation of Section 520.995(3)(d), Florida Statutes, in that they have demonstrated a lack of financial responsibility. On November 13, 1995, an Administrative Complaint for Imposition of Sanctions was filed against Bowshier Buick, Jack A. Bowshier, Sr., and Jack D. Bowshier, Jr. Jack A. Bowshier, Sr., subsequently engaged in negotiations with William Chamberlain, the owner and president of WAFC Holdings, Inc. (WAFC) concerning the sale of the assets of Bowshier Buick to WAFC in return for, among other things, the assets of two Chamberlain-owned corporations, South Florida Auto Exchange, Inc., d/b/a Palm Beach Motors, and Stuart Motors, Inc., d/b/a Stuart Motors, that were in the business of selling pre- owned motor vehicles in the West Palm Beach and Stuart areas, respectively. On December 5, 1995, Jack A. Bowshier, Sr., and Chamberlain signed paperwork (Sale/Purchase Agreements) in which their corporations agreed to consummate such a transaction. On that same date, they also, on behalf of their corporations, executed Interim Management Agreements, pursuant to which WAFC took over the management of Bowshier Buick's dealership at 2445 Southeast Federal Highway in Stuart and Bowshier Buick assumed responsibility for the management of Palm Beach Motors and Stuart Motors, effective December 5, 1995. Later that month, WPAS, Inc. (WPAS) and DAB, Inc. (DAB) were formed. At all times material to the instant case, Jack A. Bowshier, Sr., has been the sole owner, president and director of WPAS, and, as such, has directed the operations of the corporation. At all times material to the instant case, WPAS maintained its principal place of business at 2815 Okeechobee Boulevard in West Palm Beach, the location of Palm Beach Motors. At all times material to the instant case, Jack D. Bowshier, Jr., was the general manager of Palm Beach Motors. At all times material to the instant case, Jack A. Bowshier, Sr., has been the sole owner, president and director of DAB, and, as such, has directed the operations of the corporation At all times material to the instant case, DAB has maintained its principal place of business at 2695 Southeast Federal Highway in Stuart, the location of Stuart Motors. At all times material to the instant case, Todd Bowshier, has been the general manager of Stuart Motors. A Stipulation for Settlement and Consent to Final Order in Administrative Proceeding Nos. 4287-F-11/95, 4287a-F-11/95, and 4287b-F-1195 (Stipulation) was executed by Jack A. Bowshier, Sr., on behalf of Bowshier Buick and on his own behalf, and by Jack D. Bowshier, Jr., on January 31, 1996, and by Thomas Stouffer, the Regional Director of the Department's Southeast Florida Regional Office, on behalf of the Department, on February 2, 1996. It provided as follows: The State of Florida, Department of Banking and Finance, Division of Finance (hereinafter "Department"), and Respondents Jack Bowshier Buick-Pontiac-GMC Trucks, Inc. (hereinafter "Bowshier Buick"), Jack A. Bowshier (hereinafter "JA Bowshier"), and Jack D. Bowshier (hereinafter "JD Bowshier"), in consideration of the mutual promises herein contained and other good and valuable consideration hereby agree to enter into this Stipulation for Settlement and Consent to Final Order as follows: At all times material hereto Bowshier Buick has been a Florida corporation with its principal place of business located at 2445 SE Federal Highway, Stuart, FL 34994. On or about December 25, 1988 Bowshier Buick was issued a Motor Vehicle Retail Installment Seller's License by the Department, which remains active to date. At all times material hereto JA Bowshier has been a Director, owner and control person of Bowshier Buick. In these capacities JA Bowshier creates, controls, formulates, directs and personally participates in the acts, practices and affairs of Bowshier Buick. At all times material hereto JD Bowshier has been a Director and General Manager of Bowshier Buick. In these capacities JD Bowshier creates, controls, formulates, directs and personally participates in the acts, practices and affairs of Bowshier Buick. On or about October 25, 1995, the Department received information that it believed indicated that Bowshier Buick had accepted motor vehicles as "trade-ins" and resold these vehicles without first satisfying their existing liens. The Department was concerned that purchasers of these motor vehicles could not be issued Certificates of Title. As a result of this information, Department examiners/investigators, on three occasions, visited Bowshier Buick's principal office pursuant to Section 520.996, Florida Statutes. They concluded that Bowshier Buick was engaging in acts and/or practices constituting violations of Chapter 520, Florida Statutes. On November 3, 1995, the Department filed an Emergency Immediate Temporary Final Order to Cease and Desist and Suspension of Motor Vehicle Retail Installment Seller's License (hereinafter "Emergency Order") which was followed, on November 13, 1995, with an Administrative Complaint for Imposition of Sanctions and Notice of Rights (hereinafter "Complaint"). Respondents agree that they have been duly served with both the Emergency Order and Complaint and that the Department has jurisdiction over them and this case. The Department agrees that Respondents timely filed their Answer, Affirmative Defenses and Petition for Formal Proceedings in response to the Complaint. The Department herein makes the following findings of fact, upon which the penalties imposed are based, but which findings Respondents neither admit nor deny: There were approximately thirty trade-ins taken by Bowshier Buick for which the dealership had not satisfied existing liens. Some of these vehicles were resold without first satisfying their existing liens. Some customers who traded in their motor vehicles suffered adverse credit ratings because of the failure of Bowshier Buick to pay off the existing lienholders. Bowshier Buick was experiencing severe cash flow problems. For the month of September, Bowshier Buick incurred a monthly bank charge of $5,000 for dealership bank overdrafts. A total estimated amount of $125,000 in outstanding insufficient funds checks was evident as of November, 1995. Bowshier Buick did not remit premiums collected to the insurance company for credit life, accident & health insurance policies which had been purchased by Bowshier Buick customers. They had not forwarded said premiums for policies purchased by customers since January, 1995. Bowshier Buick records were misleading in that copies of checks made payable to lienholders and in the amount due to satisfy liens were contained within the files for months, when the checks were never delivered and/or funds were never disbursed to the payee. Respondents maintain that subsequent to the Department's filing of its Emergency Order, Bowshier Buick has cooperated with the Department to resolve the lien, title, and premium problems. In an effort to avoid litigation and costs associated therewith, the Department and Respondents now voluntarily agree to enter into this Stipulation for Settlement and Consent to Final Order (hereinafter "Stipulation") addressing the violations raised by the Emergency Order and the Complaint. The Respondents and the Department agree as follows: Respondents will bring and keep all books and records up to date and maintain them accurately and in compliance with the law. Respondents will maintain and keep current all forms required by the automobile dealer's manual, Department of Motor Vehicles and the Department, including the title log. Respondents will keep all title work and registrations current and in compliance with the law. Respondents will write any and all insurance policies and remit all premiums in compliance with the law, including but not limited to credit life, accident and health insurance. Respondents will dismiss with prejudice any and all actions pending in Circuit Court and the District Court of Appeal, not file any further actions in any court which in any fashion or respect arise or tend to arise out of the facts presented by the Emergency Order or the Complaint (see paragraph 6 herein) and, indemnify and hold the Department harmless if such further actions are filed. Respondents shall, within 30 days from the date of execution of this stipulation, reimburse any and all customers who made payment(s) on past due liens which they did not owe. Within 45 days, verifiable proof of reimbursement shall be provided to the Department. Respondent shall, within 90 days from the date of execution of this stipulation, assist any and all customers who have been affected by Respondents untimely payment of liens in repairing their credit. Their assistance shall include, but shall not be limited to, sending letters to lenders wherein Respondents assume all responsibility for the late lien payments. Within 105 days, verifiable proof of such assistance shall be provided to the Department. Respondents shall, within 30 days from the date of execution of this stipulation, reimburse any and all customers due refunds on credit life, accident and health insurance. Within 45 days, verifiable proof of such assistance shall be provided to the Department. Respondents shall, immediately upon execution of this stipulation, pay off any and all outstanding past due customer liens, as well as all liens that have been improperly levied upon customers. Upon repayment, verifiable proof thereof shall be provided to the Department. Respondents shall operate the dealership, at all times in compliance with the law. Respondents shall pay to the Department by cashiers check, within 30 days of the date of execution of this stipulation, $5,000, representing costs of the Department's examination/investigation in this case. Respondents agree to sell Bowshier Buick to WAFC Holdings, Inc., its agents, nominees or assigns. If the sale is cancelled or not consummated within 6 months from the date of the Final Order herein, for any reason: 1.) Respondents will immediately notify the Department, Diane Leeds, Esq., in writing via certified mail, return receipt requested, of that fact. 2.) Respondents' Departmental license(s) shall be placed upon and remain on probation for a period of three (3) years, commencing on the date the sale is cancelled or not consummated. For the duration of the probationary period, Respondents agree to: Provide the Department, on a monthly basis, prior to the 10th day of each month, a copy of the dealership "finance log" attached hereto and made a part hereof as Exhibit "A." Allow the Department to make unannounced visits to the dealership, as frequently as the Department deems necessary, to assure that Respondents are operating in compliance with the law. Prior to the termination of the probationary period the dealership shall have, in reserve, a minimum of three (3) weeks supply of operating capital, to be computed based upon the operating expenses of the dealership at that time, and provide verifiable proof thereof to the Department. The Final Order incorporating the terms of this stipulation constitutes final agency action by the Department for which the Department may seek enforcement pursuant to the provisions of Chapters 120 and 520, Florida Statutes, and Respondents knowingly and voluntarily agree to waive any right to: 1. A formal hearing; 2. To contest the finality of the Final Order; 3. To contest the validity of any term, condition, obligation or duty created hereby; 4. To separately stated Findings of Fact and Conclusions of Law; and 5. To administrative or judicial review hereof. Respondents acknowledge, concur and stipulate that their failure to comply with any of the terms, obligations and conditions of this stipulation and the Final Order adopting it, shall result in their being deemed to be in violation of a written agreement and Final Order issued pursuant to the provisions of Chapters 120 and 520, Florida Statutes, and Respondents stipulate and agree to the issuance of an emergency suspension of their license(s) and a cease and desist order. Respondents waive all rights to prior notice and hearing before entry of such order. However, nothing herein limits Respondents' right to contest any finding or determination made by the Department concerning their alleged failure to comply with any of the terms and provisions of this stipulation or of the Final Order. Respondents waive and release the Department and its agents, representatives, and employees from any and all causes of action they may have including without limitations, any right to attorney fees arising out of this proceeding; libel; slander; violation of a constitutionally protected right; intentional tortious interference with advantageous contractual relationship and the like; arising prior to or out of the filing of the Complaint, Emergency Order, the execution of the stipulation and entry of the Final Order. The Department agrees to accept this release without acknowledging, and expressly denies, that any such causes of action may exist. Respondents further agree that nothing contained herein shall be construed to waive or restrict the Department's right to initiate any legal action based upon facts or information which come to the Department's attention subsequent to the execution of this stipulation and the Department further agrees that nothing contained herein shall be construed to waive or restrict the Respondents' rights to defend any subsequent legal action. The Department and Respondents each agree to bear their own costs and attorneys' fees incurred in connection with this proceeding and entry of the Final Order, except as stated in paragraph 11k. herein. The Department and Respondents represent that the officer(s) executing this stipulation are authorized to act on behalf of the corporations and agency for settlement purposes. The Department and Respondents acknowledge that they have read this stipulation and fully understand the rights, obligations, terms, conditions, duties, and responsibilities with respect to its contents. Execution of this stipulation by the Department shall not be construed as a final acceptance of its terms and conditions absent entry of a Final Order by the Comptroller adopting same, however, the existing Emergency Order shall be null and void immediately upon entry of the Final Order by the Comptroller. The undersigned parties hereby acknowledge and agree to the terms and conditions of the foregoing stipulation by written consent on the last date executed below, subject to final approval by the Comptroller. On February 16, 1996, a Final Order was issued in Administrative Proceeding Nos. 4287-F-11/95, 4287a-F-11/95, and 4287b-F-1195 adopting the parties' Stipulation and requiring the parties to comply with the Stipulation's terms and conditions. The purchases of the assets of Bowshier Buick, South Florida Auto Exchange, Inc., and Stuart Motors, Inc., were finalized in March of 1996. On March 18, 1996, WPAS filed with the Department an Application for Motor Vehicle Retail Installment Seller License (WPAS's Application). In its Application, WPAS indicated that it was doing business as Palm Beach Motors at 2815 Okeechobee Boulevard in West Palm Beach. In response to Question 10 on the application form, which read as follows, WPAS answered "yes" and appended to its completed Application a copy of the Stipulation filed in Administrative Proceeding Nos. 4287-F-11/95, 4287a-F- 11/95, and 4287b-F-1195: Has the applicant, any of the persons listed herein, or any person with power to direct the management or policies of the applicant had a license, registration, or the equivalent, to practice any profession or occupation revoked, suspended, or otherwise acted against? Yes No (If yes, list such persons, give details, and provide a copy of the allegations and documentation of the final disposition of the case.) WPAS's Application was signed by Jack A. Bowshier, Sr. On April 8, 1996, DAB filed with the Department an Application for Motor Vehicle Retail Installment Seller License (DAB's Application). In its Application, which was signed by Jack A. Bowshier, Sr., DAB indicated that it was doing business as Stuart Motors at 2695 Southeast Federal Highway in Stuart. In response to Question 10 on the application form, DAB mistakenly answered "no." Neither a copy of the Stipulation filed in Administrative Proceeding Nos. 4287-F-11/95, 4287a-F-11/95, and 4287b-F-1195, nor a copy of the Final Order entered in these proceedings, was appended to DAB's completed Application. The Department granted DAB's Application and issued DAB a MVRIS license, effective April 11, 1996. On May 1, 1996, Jack A. Bowshier, Sr., sent the following letter to the Department: I am voluntarily surrendering my license from the Department of Banking and Finance issued to DAB, Inc., D/B/A Stuart Motors to you today due to the fact that we have made an honest mistake in the application for the license. I apologize for this mistake. I am reapplying for the license for this corporation. I ask that you please reconsider your position. On that same day, May 1, 1996, Jack A. Bowshier, Sr., on behalf of WPAS, and William Chamberlain, on behalf of South Florida Auto Exchange, Inc., executed an agreement (WPAS Use of License Agreement), which provided as follows: AGREEMENT made this 1st day of May, 1996 by and between SOUTH FLORIDA AUTO EXCHANGE, INC., DBA PALM BEACH MOTORS, INC., a Florida corporation ("PBM") AND WPAS, INC., a Florida corporation ("Operator"). WHEREAS, PBM and Operator, or Operator's affiliate, entered into an agreement for sale and purchase of assets dated December 5, 1995 (the "Asset Purchase Agreement") for the purchase and sale of certain assets of PBM located at 2815 Okeechobee Blvd., West Palm Beach, Florida (the "Dealership"); and WHEREAS, PBM and Operator closed on the sale and purchase on or about the 19th day of March, 1996; and WHEREAS, Operator has submitted an application (the "Application") to the State of Florida, Comptroller's Office, Department of Banking (the "Department") for a license to originate financing in connection with the sale of automobiles at the Dealership, which Application remains pending with the Department; and WHEREAS, Operator has not yet received a license from the Department pursuant to the Application; and WHEREAS, Operator has requested PBM to allow Operator to continue to use PBM's license (the "PBM License") from the Department at the Dealership pending the Department's action on Operator's Application; and WHEREAS, PBM, after obtaining the verbal approval of the Department, has agreed to allow Operator to utilize PBM['s] License at the Dealership on a temporary basis. NOW, THEREFORE, for and in consideration of Ten dollars ($10.00) paid by Operator to PBM, as well as other good and valuable considerations, the receipt and sufficiency of which are hereby acknowledged by PBM, the parties agree as follows: The foregoing recitals are true and correct and incorporated herein by reference. PBM hereby authorizes Operator to originate finance paper under the PBM license at the Dealership until the earlier of: PBM notice to Operator of the revocation of such authority, which notice may be given [by] PBM, in PBM's sole and absolute discretion, at any time upon three (3) days prior notice to Operator, upon the Department's disposition of Operator's application, whether such disposition is a granting of a license or the denial of a license, any demand by the Department that Operator cease the use of the PBM license, upon the infraction of any rule or regulation by Operator applicable to the PBM License. Operator agrees to utilize the PBM License only in strict compliance of all applicable rules and regulations, including, but not limited to the rules and regulations of the Department. Operator does hereby agree to indemnify and hold PBM harmless against any claim arising out of the Dealership or Operator's use of the PBM License. This Agreement contains the entire understanding of the parties and may not be changed or modified orally, but only by written instrument signed by the parties hereto. Any notice required or permitted to be given under this Agreement shall be in writing, delivered by certified mail, return receipt requested, or by a national overnight courier service, such as Federal Express, and mailed to the parties at the following address: PBM: c/o Stuart Buick Pontiac GMC 2445 S.E. Federal Highway Stuart, Florida 34994 Operator: 2815 Okeechobee Blvd. West Palm Beach, Florida 33409 This agreement shall be binding upon the parties, their successors and assigns. This Agreement shall be governed by the laws of the State of Florida. In the event litigation is instituted in connection with the enforcement of the terms of this Agreement, the prevailing party shall be entitled to an award of costs and attorneys fees, including attorneys fees and costs on appeal. The "PBM License" referenced in the WPAS Use of License Agreement had an "expiration date" of December 31, 1996. An agreement between DAB and Stuart Motors, Inc. (DAB Use of License Agreement) containing provisions substantially identical to those in the WPAS Use of License Agreement was executed by Jack A. Bowshier, Sr. (on behalf of DAB) and Chamberlain (on behalf of Stuart Motors, Inc.) also on May 1, 1996. The MVRIS license which was the subject of the DAB Use of License Agreement, like the "PBM License," had an expiration date of December 31, 1996. The WPAS and DAB Use of License Agreements were both drafted by Chamberlain's attorney, Michael Botos. Before drafting these agreements, Botos had spoken to Diane Leeds, an attorney with the Department. Botos erroneously believed that Leeds, acting on behalf of the Department, had given the "verbal approval" referenced in the agreements. On May 6, 1996, Jack A. Bowshier, Sr., filed a corrected Application for Motor Vehicle Retail Installment Seller License on behalf of DAB (DAB's Second Application). Department investigators visited Palm Beach Motors on July 19, 1996. They discovered, from an examination of WPAS's records, that WPAS (acting through Jack D. Bowshier, Jr., the general manager of Palm Beach Motors) had been involved in retail installment transactions with retail buyers of its vehicles, notwithstanding that it did not have a license from the Department authorizing it to engage in such activity. Ten retail installment contracts (signed by Jack D. Bowshier, Jr., on behalf of WPAS) were found and reviewed. In four of these ten retail installment transactions, the buyer was charged a simple interest rate in excess of 18 percent per annum. By letter mailed on July 19, 1996, the Department notified WPAS of its intention to deny WPAS's Application for a Motor Vehicle Installment Seller License. In its notice, the Department advised that its proposed denial was based upon, among other things, WPAS's engaging in the business of a motor vehicle retail installment seller without a license, in violation of Section 520.03(1), Florida Statutes. Department investigators visited Stuart Motors on July 22, 1996. They discovered, from an examination of DAB's records, that DAB (acting through Todd Bowshier, the general manager of Stuart Motors) had been involved in retail installment transactions with retail buyers of its vehicles, notwithstanding that it did not have a license from the Department authorizing it to engage in such activity. Ten retail installment contracts (signed by Todd Bowshier on behalf of DAB) were found and reviewed. In all of these ten retail installment transactions, the buyer was charged a simple interest rate of 19.95 percent per annum. On or about July 26, 1996, Jack A. Bowshier, Sr., met with Department representatives, including Diane Leeds, to discuss the Department's proposed action. At the meeting, Jack A. Bowshier, Sr., was told that "he could not finance without a license at that time under anybody's license." Nonetheless, following the meeting, WPAS (doing business as Palm Beach Motors) and DAB (doing business as Stuart Motors), relying on the legal advice of their attorney (and acting through their general managers), continued to operate as motor vehicle retail installment sellers without having MVRIS licenses of their own (as they had done since May of that year, following the execution of the WPAS and DAB Use of License Agreements). In addition, they continued to knowingly charge buyers simple interest rates in excess of 18 percent per annum. Jack A. Bowshier, Sr., was at all material times aware of these activities, which continued at Palm Beach Motors until approximately September or October of 1996, when the used car operation was sold,1 and continued at Stuart Motors until early 1997. By letter mailed on October 1, 1996, the Department notified DAB of its intention to deny DAB's Second Application for a Motor Vehicle Installment Seller License. In its notice, the Department advised that its proposed denial was based upon, among other things, DAB's engaging in the business of a motor vehicle retail installment seller without a license, in violation of Section 520.03(1), Florida Statutes. Department investigators returned to Stuart Motors on October 6, 1996, to examine DAB's records. Their examination revealed nine retail installment contracts that DAB had entered into since the investigators' July 22, 1996, visit. These contracts were signed by Todd Bowshier on behalf of DAB. In all but one of these retail installment transactions, the buyer was charged a simple interest rate of more than 18 percent per annum. In late January of 1997, personnel from the Office of the State Attorney, 19th Judicial Circuit, assisted by Department personnel, conducted a search (pursuant to a search warrant) of the records maintained by DAB at Stuart Motors. Sixty-four retail installment contracts (signed by Todd Bowshier on behalf of DAB) that DAB had entered into from August 10, 1996, to January 25, 1997, (including eight of the nine contracts that Department investigators had discovered during their October 6, 1996, visit to Stuart Motors) were seized. Thirty-seven of these 64 retail installment transactions took place from August 10, 1996, to October 16, 1996. In all but one of these 37 transactions, the buyer was charged a simple interest rate of more than 18 percent per annum. In all of the post-October 16, 1996, transactions (including eight which occurred after the expiration of the MVRIS license which was the subject of the DAB Use of License Agreement), the buyer was charged a simple interest rate of 17.99 percent. It was not until the Bowshiers received a copy of the following letter, dated February 13, 1997, the Office of the State Attorney, 19th Judicial Circuit, sent to the Department regarding the "Jack Bowshier investigation" that DAB stopped engaging in the business of a motor vehicle retail installment seller: This letter is in response to your investigation of DAB, Inc. d/b/a Stuart Motors etc. As you are aware I have spent the last three weeks reviewing the events between your Department, which began on March 18, 1996, and the above named suspect. It is apparent from the outset of your investigation that Mr. Bowshier and associates have done everything in their power to continue operating a business and finance automobiles without the appropriate Retail Installment Sellers license. However, it is my opinion that I would have insurmountable proof problems in a criminal prosecution based on the events that have occurred to date. Mr. Bowshier maintains that he can continue writing installment loan contracts because the validity of the denial of his application continues to be the subject of litigation. Mr. Bowshier continues to suggest that this is his position at the advi[c]e of his attorney, Mr. Ronald LaFace. After speaking with Mr. LaFace regarding the above I can see why the suspect would reasonably rely on his attorney's advice. Even to me, Mr. LaFace continues to maintain the position that the denial of the licensure application is "nonfinal." While we know this position is irrelevant to both the Department of Banking and Finance, and the criminal prosecution, it still creates the appearance of a defense which would remove the "criminal intent" aspect of our case. I have an ethical obligation to only prosecute cases in which I believe, based on my training and experience, there is a reasonable chance for a conviction at trial. Because this case has become so diluted in "my attorney told me" and "my understanding was . . .," I cannot ethically go forward with a criminal prosecution and still meet my burden of proof at trial. However, I understand the frustration in wanting to go forward in a case of this nature. With that in mind this letter will serve two purposes. While my declination to prosecute this case up through the date of this letter is final, it is not absolute. This letter will be sent to both Mr. Bowshier (and associates) and Mr. Ronald LaFace. In doing so, it will serve a very particular purpose. It will inform the above (including Mr. LaFace), that I will not prosecute the criminal acts that Mr. Bowshier and associates have committed to date because of the above explained proof problems. However, I will prosecute from this date forward any and all financing that occur[s] by the suspect and his associates without a license. I should make it perfectly clear to Mr. Bowshier and his attorney that it does not matter what their position is regarding the "appeal" of the denial of license, they cannot finance automobiles. Mr. Bowshier and associates should also know that the advice of their attorney to continue writing contracts during the pendency of the licensure "appeal" is wrong. If the suspect and his associates continue to write contracts, it will constitute a criminal act despite the advice of his attorney. I will prosecute Mr. Bowshier and associates if he continues to write contracts without the appropriate licenses pr[e]scribe[d] by law. The "appeal" referenced in the letter was taken after the Department, by letter mailed October 1, 1996, advised DAB of its intention to deny DAB's Application for a Motor Vehicle Installment Seller License. In its letter, the Department advised that its proposed denial was based upon, among other things, DAB's engaging in the business of a motor vehicle retail installment seller without a license, in violation of Section 520.03(1), Florida Statutes.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department enter a final order (1) finding the Bowshiers guilty of the violations alleged in the Amended Administrative Complaint; (2) directing the Bowshiers to cease and desist from committing such violations; (3) imposing jointly and severally upon WPAS, Jack A. Bowshier, Sr., and Jack D. Bowshier, Jr., an administrative fine in the amount of $7,000.00; (4) imposing jointly and severally upon DAB, Jack A. Bowshier, Sr., and Todd Bowshier an administrative fine in the amount of $61,500.00; and (5) denying WPAS's and DAB's applications for licensure. DONE AND ENTERED this 28th day of May, 1998, in Tallahassee, Leon County, Florida. STUART M. LERNER 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 Filed with the Clerk of the Division of Administrative Hearings this 28th day of May, 1998.
Conclusions This matter came before the Department for entry of a Final Order upon submission of an Order Closing File by William F. Quattlebaum, Administrative Law Judge of the Division of Administrative Hearings, pursuant to Petitioner’s Notice of Voluntary Dismissal With Prejudice, 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. Accordingly, it is hereby ORDERED that this case is CLOSED. Filed October 1, 2010 4:40 PM Division of Administrative Hearings. DONE AND ORDERED this / & day of October, 2010, in Tallahassee, Leon County, Florida. Y , CARL A. FORD, Director 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_/st day of October, 2010. loos y Nalini Vinayak, Dealer ‘Administrator 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: Dean Bunch, Esquire Nelson, Mullins, Riley & Scarborough LLP 3600 Maclay Boulevard South, Suite 202 Tallahassee, Florida 32312 Jason T. Allen, Esquire Bass, Sox & Mercer 2822 Remington Green Circle Tallahassee, Florida 32308 William F. Quattlebaum Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 Nalini Vinayak Dealer License Administrator
Findings Of Fact American Isuzu is the licensed distributor of Isuzu motorcars and trucks in the United States. American Isuzu licenses franchise dealers to market Isuzu cars and trucks to the consuming public. Isuzu products are manufactured in Japan. American Isuzu began marketing Isuzu products in the United States in March, 1981. Isuzu products compete primarily with other compact imported cars and trucks such as Datsun, Toyota, Volkswagen and others. American Isuzu supports the application of Hollywood Isuzu for licensure to market Isuzu products in Hollywood, Florida. Isuzu of North Miami is owned by David Zinn. Isuzu of North Miami is currently under contract with American Isuzu and duly licensed to market Isuzu products at a location in northwestern Dade County, Florida. Zinn is a capable automobile dealer. He operates a successful Datsun dealership in Stuart, Florida, and a successful Toyota dealership in north Dade County, Florida. Zinn's was the first Toyota dealership in Florida. He has been involved in automobile sales for most of his life. His stature as a successful dealer has been recognized. At the time of the hearing, he was serving as Chairman-Elect of the Board for the American International Automotive Dealership Association, an organization which advances the interests of imported-automobile dealers. Zinn is fully qualified to operate an Isuzu dealership. Isuzu of North Miami is located on U.S. Highway 441 in northern Dade County. The facility is directly across the street from Zinn's Toyota dealership. He has constructed a complete sales and service facility in order to effectively market and service Isuzu automobiles. He has invested approximately $850,000 in the Isuzu dealership. At the time of the hearing, construction on the facility had not been entirely finished, but it was sufficiently completed so that sales and service functions were under way. Hollywood Isuzu is owned by George Nassief. Nassief has been involved in automobile sales for the past thirty years. He currently owns and operates three automobile dealerships in Ohio. He has won dealer awards from Ford, Pontiac, Toyota and Honda. Nassief has been interested in developing an automobile dealership in south Florida. American Isuzu has granted Hollywood Isuzu a franchise contract to operate an Isuzu dealership at 1321 North Sixtieth Avenue, Hollywood, Florida. Sixtieth Avenue is also known as U.S. Highway 441. The Isuzu of North Miami facility is less than five miles from the proposed Hollywood Isuzu location on the same roadway. In order to sell and service Isuzu products, Nassief proposes to construct a complete sales and service facility. He has already purchased land, hired an architect and begun preparation of the site. He plans to invest approximately $700,000 in the venture. Nassief is fully qualified to operate an Isuzu dealership. American Isuzu has developed marketing concepts or strategies to advance its entry into the American automotive market. For initial penetration, American Isuzu chose several market areas primarily in the western and southeastern United States. Florida is a well-recognized imported automobile market, and south Florida is the major Florida market. American Isuzu targeted south Florida as a primary zone for its initial efforts. Initial plans were to locate four dealerships in Broward County and three in Dade County. A decision was made to select dealers from individuals who had demonstrated themselves as successful dealers of other products. American Isuzu decided to establish average-sized dealerships rather than "size-of-market" dealers. Ultimately, American Isuzu desires to have each of its dealers be average in size. Voluntary trade restrictions that have been imposed upon automobiles imported from Japan have interfered somewhat with American Isuzu's initial plans. However, three Broward County and two Dade County dealerships have been established. One Broward dealership is located on U.S. Highway 441 in Plantation, Florida, approximately six miles north of the location proposed by Hollywood Isuzu. The other two Broward County Isuzu dealerships are located in the northern and central portions of the county, along U.S. Highway 1 in the City of Fort Lauderdale. These locations are to the east of the Plantation location, the proposed Hollywood location and Isuzu of North Miami. During the time that Zinn was negotiating with American Isuzu for an Isuzu franchise, he proposed to locate in western Broward County near the presently proposed Hollywood Isuzu location. The then District Manager of American Isuzu, Mr. Mike Bonamy, declined to approve that location, and instead insisted upon the north Miami location. Bonamy suggested that Zinn would be able to serve the west Hollywood market from the northern Dade County location. Zinn was led to believe that a Hollywood location would be approved, but that it would be located along U.S. Highway 1, rather than on the same highway as his dealership. Isuzu of North Miami does not oppose the creation of a fourth Isuzu dealership in Broward County, but rather opposes the location of it on U.S. Highway 441, rather than U.S. Highway 1. American Isuzu has not delineated specific market areas for its dealerships. American Isuzu is seeking to penetrate the broad south Florida market by the introduction of various dealerships. A primary source of customers within this area is located in the western portions of Broward and Dade Counties. Through existing dealerships, Isuzu has obtained a market penetration reflected as a percentage of total import sales which equals its penetration statewide in Florida. American Isuzu's entry into the American market would be facilitated by strongly penetrating certain market areas, then expanding from that base. American Isuzu has sought to accomplish this strategy by locating numerous dealers in south Florida. Despite the emphasis, American Isuzu has not penetrated south Florida more pervasively than it has the state, generally. American Isuzu is clearly capable of marketing additional automobiles in south Florida. In order to accomplish that in harmony with its policy of maintaining average-sized dealerships, it is necessary that American Isuzu establish an additional Broward County dealership. The western portion of Hollywood, where Hollywood Isuzu proposes to locate, is a logical choice for the additional dealership. Numerous clusters of dealerships have been established along U.S. Highway 441 in northern Dade County and western Broward County. In close proximity to Isuzu of North Miami, there are Toyota, Mazda and Volkswagen dealerships. In close proximity to the proposed Hollywood Isuzu location, there are Toyota, Honda and Datsun dealerships. In close proximity to the Plantation Isuzu dealership, there are Mazda, Toyota and Datsun dealerships. Such "clusters" of competing dealerships tend to stimulate sales. Location of an Isuzu dealership at the proposed Hollywood location should not operate to reduce sales on the part of Isuzu of North Miami. Rather, the dealership should aid Isuzu in further penetrating the Broward and Dade County markets. By increasing the visibility of Isuzu generally, the additional facility should also serve to stimulate Isuzu sales. While Isuzu of North Miami can offer Isuzu automobiles to potential customers in the west Hollywood area, it cannot stimulate such sales as well as a specific dealership in that location could. American Isuzu has charged that Isuzu of North Miami has not complied with certain provisions of its licensing agreement. These allegations are not supported by the evidence. Isuzu of North Miami originally proposed to appoint David Zinn's son Craig to manage the Isuzu of North Miami facility. Craig Zinn has, however, decided to pursue another opportunity. It does not appear that the absence of Craig Zinn from the Isuzu of North Miami picture renders Isuzu of North Miami unable to adequately sell and service Isuzu automobiles. Indeed, it appears that Isuzu of North Miami has personnel who are fully capable of operating a successful dealership. American Isuzu has alleged that Isuzu of North Miami does not have a sufficient number of trained service personnel and has not purchased sufficient tools. These allegations are not sustained by the evidence. It does appear that Isuzu of North Miami has at least two trained and qualified Isuzu mechanics and has purchased tools with which it can properly service Isuzu automobiles.
