The Issue The issue is whether Petitioners' Motions for Attorney's Fees should be granted, and if so, in what amount.
Findings Of Fact Based upon the stipulation of counsel, the papers filed herein, and the underlying record made a part of this proceeding, the following findings of fact are determined: Background In this attorney's fees dispute, Petitioners, Anderson Columbia Company, Inc. (Anderson Columbia) (Case No. 00-0754F), Panhandle Land & Timber Company, Inc. (Panhandle Land) (Case No. 00-0755F), Support Terminals Operating Partnership, L.P. (Support Terminals) (Case No. 00-0756F), Commodores Point Terminal Corporation (Commodores Point) (Case No. 00-0757F), and Olan B. Ward, Sr., Martha P. Ward, Anthony Taranto, Antoinette Taranto, J.V. Gander Distributors, Inc., J.V. Gander, Jr., and Three Rivers Properties, Inc. (the Ward group) (Case No. 00-0828F), have requested the award of attorney's fees and costs incurred in successfully challenging proposed Rule 18-21.019(1), Florida Administrative Code, a rule administered by Respondent, Board of Trustees of the Internal Improvement Trust Fund (Board). In general terms, the proposed rule essentially authorized the Board, through the use of a qualified disclaimer, to reclaim sovereign submerged lands which had previously been conveyed to the upland owners by virtue of their having filled in, bulkheaded, or permanently improved the submerged lands. The underlying actions were assigned Case Nos. 98- 1764RP, 98-1866RP, 98-2045RP, and 98-2046RP, and an evidentiary hearing on the rule challenge was held on May 21, 1998. That proceeding culminated in the issuance of a Final Order in Support Terminals Operating Partnership, L.P. et al. v. Board of Trustees of the Internal Improvement Trust Fund, 21 F.A.L.R. 3844 (Div. Admin. Hrngs., Aug. 8, 1998), which determined that, except for one challenged provision, the proposed rule was valid. Thereafter, in the case of Anderson Columbia Company, Inc. et al. v. Board of Trustees of the Internal Improvement Trust Fund, 748 So. 2d 1061 (Fla. 1st DCA 1999), the court reversed the order below and determined that the rule was an invalid exercise of delegated legislative authority. Petitioners then filed their motions. Fees and Costs There are eleven Petitioners seeking reimbursement of fees and costs. In its motion, Anderson Columbia seeks reimbursement of attorney's fees "up to the $15,000 cap allowed by statute" while Panhandle Land seeks identical relief. In their similarly worded motions, Support Terminals and Commodores Point each seek fees "up to the $15,000 cap allowed by statute." Finally, the Ward group collectively seeks $9,117.00 in attorney's fees and $139.77 in costs. In the Joint Stipulations of Fact filed by the parties, the Board has agreed that the rate and hours for all Petitioners "were reasonable." As to all Petitioners except the Ward group, the Board has further agreed that each of their costs to challenge the rule exceeded $15,000.00. It has also agreed that even though they were not contained in the motions, requests for costs by Support Terminals, Commodores Point, Anderson Columbia, and Panhandle Land in the amounts of $1,143.22, $1,143.22, $1,933.07, and $1,933.07, respectively, were "reasonable." Finally, the Board has agreed that the request for costs by the Ward group in the amount of $139.77 is "reasonable." Despite the stipulation, and in the event it does not prevail on the merits of these cases, the Board contends that the four claimants in Case Nos. 00-754F, 00-755F, 00-0756F, and 00- 757F should be reimbursed only on a per case basis, and not per client, or $7,500.00 apiece, on the theory that they were sharing counsel, and the discrepancy between the amount of fees requested by the Ward group (made up of seven Petitioners) and the higher fees requested by the other Petitioners "is difficult to understand and justify." If this theory is accepted, it would mean that Support Terminals and Commodores Point would share a single $15,000.00 fee, while Anderson Columbia and Panhandle Land would do the same. Support Terminals and Commodores Point were unrelated clients who happened to choose the same counsel; they were not a "shared venture." Each brought a different perspective to the case since Commodores Point had already received a disclaimer with no reversionary interest while Support Terminals received one with a reversionary interest on June 26, 1997. The latter event ultimately precipitated this matter and led to the proposed rulemaking. Likewise, in the case of Anderson Columbia and Panhandle Land, one was a landowner while the other was a tenant, and they also happened to choose the same attorney to represent them. For the sake of convenience and economy, the underlying cases were consolidated and the matters joined for hearing. Substantial Justification From a factual basis, the Board contends several factors should be taken into account in determining whether it was substantially justified in proposing the challenged rule. First, the Board points out that its members are mainly lay persons, and they relied in good faith on the legal advice of the Board's staff and remarks made by the Attorney General during the course of the meeting at which the Board issued a disclaimer to Support Terminals. Therefore, the Board argues that it should be insulated from liability since it was relying on the advice of counsel. If this were true, though, an agency that relied on legal advice could never be held responsible for a decision which lacked substantial justification. The Board also relies upon the fact that it has a constitutional duty to protect the sovereign lands held in the public trust for the use and benefit of the public. Because lands may be disclaimed under the Butler Act only if they fully meet the requirements of the grant, and these questions involve complex policy considerations, the Board argues that the complexity and difficulty of this task militate against an award of fees. While its mission is indisputably important, however, the Board is no different than other state agencies who likewise are charged with the protection of the health, safety, and welfare of the citizens. The Board further relies on the fact that the rule was never intended to affect title to Petitioners' lands, and all Petitioners had legal recourse to file a suit to quiet title in circuit court. As the appellate court noted, however, the effect of the rule was direct and immediate, and through the issuance of a disclaimer with the objectionable language, it created a reversionary interest in the State and made private lands subject to public use. During the final hearing in the underlying proceedings, the then Director of State Lands vigorously supported the proposed rule as being in the best interests of the State and consistent with the "inalienable" Public Trust. However, he was unaware of any Florida court decision which supported the Board's views, and he could cite no specific statutory guidance for the Board's actions. The Director also acknowledged that the statutory authority for the rule (Section 253.129, Florida Statutes) simply directed the Board to issue disclaimers, and it made no mention of the right of the Board to reclaim submerged lands through the issuance of a qualified disclaimer. In short, while the Board could articulate a theory for its rule, it had very little, if any, basis in Florida statutory or common law or judicial precedent to support that theory. Although Board counsel has ably argued that the law on the Butler Act was archaic, confusing, and conflicting in many respects, the rule challenge case ultimately turned on a single issue, that is, whether the Riparian Rights Act of 1856 and the Butler Act of 1921 granted to upland or riparian owners fee simple title to the adjacent submerged lands which were filled in, bulkheaded, or permanently improved. In other words, the ultimate issue was whether the Board's position was "inconsistent with the . . . the concept of fee simple title." Anderson Columbia at 1066. On this issue, the court held that the State could not through rulemaking "seek to reserve ownership interests by issuing less than an unqualified or unconditional disclaimer to riparian lands which meet the statutory requirements." Id. at 1067. Thus, with no supporting case law or precedent to support its view on that point, there was little room for confusion or doubt on the part of the Board. E. Special Circumstances In terms of special circumstances that would make an award of fees unjust, the Board first contends that the proposed rule was never intended to "harm anyone," and that none of Petitioners were actually harmed. But the substantial interests of each Petitioner were clearly affected by the proposed rules, and the appellate court concluded that the rule would result in an unconstitutional forfeiture of property. The Board also contends that because it must make proprietary decisions affecting the public trust, it should be given wide latitude in rulemaking. It further points out that the Board must engage in the difficult task of balancing the interests of the public with private rights, and that when it infringes on the private rights of others, as it did here, it should not be penalized for erring on the side of the public. As previously noted, however, all state agencies have worthy governmental responsibilities, but this in itself does not insulate an agency from sanctions. As an additional special circumstance, the Board points out that many of the provisions within the proposed rule were not challenged and were therefore valid. In this case, several subsections were admittedly unchallenged, but the offending provisions which form the crux of the rule were invalidated. Finally, the Board reasons that any moneys paid in fees and costs will diminish the amount of money to be spent on public lands. It is unlikely, however, that any state agency has funds set aside for the payment of attorney's fees and costs under Section 120.595(2), Florida Statutes (1999).
The Issue The issue is whether Respondent, a Florida-licensed yacht salesman, should be disciplined for violation of Rule 61B- 60.006(2), Florida Administrative Code, as alleged in the Administrative Complaint dated May 10, 2000.
Findings Of Fact At all times pertinent to the issues herein, DBPR, through its Division of Florida Land Sales, Condominiums and Mobile Homes (the Division) was the state agency in Florida responsible for the licensing and discipline of yacht salespersons and brokers in this state and the regulation of the yacht-brokering profession. Respondent, Justo Lamar (Lamar), has been licensed as a yacht salesperson since November 1976. Prior to this action, Lamar has never been the subject of disciplinary action arising out of the practice of his profession. This action was precipitated by a yacht owner, Juan A. Galan (Galan), who unsuccessfully attempted to sell his yacht to a client of Lamar's. In July 1998, Galan listed his yacht, the Caliente, for sale through Ardell Yacht and Ship Brokers (Ardell). The listing resulted in negotiations for the purchase of the Caliente by one Larry Griggs (Griggs), a prospective customer represented by Lamar. At all times relevant to this case, Lamar was acting as a sales agent for Allied Marine and its broker, Dwight Tracy (Tracy). As set forth in more detail below, the negotiations between Galan and Griggs took place over a three-month period from October 1998 through December 1998 with no meeting of the minds. On July 12, 1999, some seven months after negotiations between Griggs and Galan terminated, Galan lodged a complaint with DBPR. Although the complaint was ostensibly directed against salesman Lamar and broker Tracy, each and every allegation in the complaint was directed to the broker's conduct, not Lamar's. Galan, who did not testify at final hearing, alleged in his complaint that "Broker presented a contract representing that deposit had been received/deposited (upon acceptance). In fact, broker never deposited check and we wasted our time and money on survey/sea trial as buyer was not (at that time or any time later) financially capable of buying boat @ $1.75 million." Galan provided some, but by no means all, of the documents which revealed the details of the prolonged and ultimately unsuccessful negotiations between Galan and Griggs. In the narrative portion of his complaint, Galan asserted that he lost money on sea trials and implied, without actually stating, that the Caliente had been taken off the market during the pendency of negotiations with Griggs. For reasons which remain unclear, the Division did not focus its investigation on Tracy, who was the obvious target of Galan's complaint. Instead, it targeted Lamar, who was an obvious add-on target of Galan's ire. The exhibits reveal a complex series of offers and counteroffers and jockeying for negotiating advantage, not just between Galan and Griggs as prospective Seller and Buyer of the Caliente, but also between Lamar and the two brokers, all three of whom stood to profit if the transaction were consummated. Negotiations for the Caliente began in late October 1998. On October 30, 1998, Lamar's client Griggs, through a corporation he controlled, issued a $150,000 check for "Deposit, 72' (sic) Caliente Sportfisherman." This check accompanied a Brokerage Purchase and Sale Agreement dated October 29, 1998, offering to purchase the Caliente for $1,500,000. That same day, Galan's representatives faxed Lamar to advise that Griggs' offer was insufficient. Lamar forthwith provided the check to his broker, Tracy. Negotiations between Galan and Griggs continued in November. Galan chose to by-pass his own Broker and negotiate directly with Lamar over lunch on November 18, 1998. Lamar wrote Galan's demands on the back of a restaurant placemat. The primary sticking point was Galan's insistence on a "bottom line" of $1,665,000 to him, after all commissions and other expenses, if any, were paid. Griggs nevertheless persevered in his effort to buy the Caliente for $1,500,000. On November 24, 2000, Griggs executed another Brokerage Purchase and Sale Agreement in which he offered an entity called Majua, Inc., of which Galan was President, the opportunity to sell the Caliente to Griggs for $1,500,000. Galan signed the November 24 agreement, but added an addendum which materially changed the terms. The addendum unilaterally purported to raise the sales prices to Galan's previously stated "bottom line" of $1,665,000. Thanksgiving passed, and negotiations wore on. On December 4, 1998, Griggs executed a third Brokerage Purchase and Sale Agreement, raising his offer to $1,755,000. The new offer expressly stipulated that Griggs' $150,000 earnest money check could be deposited when and if all parties executed this new proposed agreement. Like the October 29 and November 24 brokerage purchase and sale agreements, the December 4 document never ripened into a contract. The December 4 document was a clear and unembarrassed reminder from Griggs that an earnest money check had been written by Griggs, but was not on deposit, and was not going to be on deposit until such time as Galan had signed off on the contract as written by Griggs. Galan nevertheless permitted a sea trial of the Caliente in furtherance of negotiations, now in their fifth week. Also as part of the negotiating process, Galan permitted some, but not all, of the inspections requested by Griggs. Expenses for the sea trial and inspections were borne entirely by Griggs. By Christmas Eve, relations between the parties had deteriorated to the point where Lamar retrieved the check from the Allied Marine corporate files and returned it to Griggs. At no time did negotiations with Lamar's client Griggs preclude or interfere with efforts by Galan to negotiate with and sell the Caliente to any other prospective purchaser.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that DBPR enter a final order dismissing the Administrative Complaint against Respondent. DONE AND ENTERED this 1st day of March, 2001, in Tallahassee, Leon County, Florida. FLORENCE SNYDER RIVAS Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 1st day of March, 2001.
Findings Of Fact At all times pertinent to the allegations contained in the Administrative Complaint, the Respondent, Larry A. Moore, was certified as a law enforcement officer and corrections officer in Florida. The Petitioner, Criminal Justice Standards and Training Commission, (Commission), is the state agency responsible for the certification of law enforcement and corrections officer in Florida. During the months of November and December, 1987, Respondent was employed as a police officer by the City of Riviera Beach, Florida. In December, 1987, Officer Chris Hamori was a traffic officer with the same department. He had been issued certain equipment for his personal use on duty in which he had placed his personal identification mark. The equipment, primarily a windbreaker, a raincoat, a flashlight and other items necessary for traffic accident investigation, was kept in the trunk of the patrol car signed out to him. He was the only operator of that vehicle, though numerous department cars, all of the same make and model, were identically keyed. Therefor, any key for any of the vehicles would open and operate any of the other identical vehicles. On December 8, 1987, Officer Hamori was assigned to teach a class at a junior college in the next county to the south. When he got there, it was raining and he went to the trunk to get his raincoat but found it missing. He had to get to class and so did not search the trunk at that time. During the mid-class break, however, he again went to the car to make a more thorough search and discovered that his trunk had been rifled and not only his raincoat but his windbreaker as well were missing. There was no evidence of breaking into the trunk. Officer Hamori reported the theft the next morning and went to the Department's property custodian to let them know as well. At that time he was issued another raincoat and windbreaker which, according to the property custodian, Ms. Bell, had just been turned in by the Respondent who was leaving employment with the Department. Officer Hamori noted, from the lack of patches on the windbreaker, that it was much like his and upon further checking, noted that his name appeared on the underside of the right sleeve where he had placed it when the garment was initially issued to him. He also noted that the raincoat had his name written on the inside of the placket where he had placed it when the coat was initially issued to him. From this, he determined that these two garments were the ones taken from his car, without his knowledge or permission, the previous day. Ms. Bell was quite certain that the items in issue here had been turned in to her that same day by the Respondent. When he brought them in, she cleared his property account and placed the items off to the side. She had not had time to place them back into stock. Notwithstanding Respondent's urging that other individuals than Ms. Bell had access to the property storage area, she indicated that no one else turned in any items of that nature that day. Respondent was the only one to turn in equipment that day and, as was stated, she had not put it back into stock when Hamori came in to ask for a reissue. It is found, therefore, that the property turned in by Respondent was the property issued to Officer Hamori and was the same property which had been taken from him without permission. Respondent urges that numerous people could have gotten into Respondent's patrol car and taken his property because of the large number of keys out that would fit it. This is true, but the evidence is uncontrovertible that the property turned in by the Respondent was the property taken from Officer Hamori's car the day before and there is some evidence in fact, that Respondent indicated to Sergeant Lobeck, his immediate supervisor, that he needed some equipment, including a raincoat, to turn in when he left the Department's employ. It is found, therefore, that Respondent is the individual who took the property in question from Officer Hamori's car. Had this not been discovered, the Department would have been out the cost of the equipment since, because it had been stolen from Hamori, Hamori would have been released from liability for it. Only the property initially issued to Respondent was not returned, and though he ultimately paid for it, at the time in issue, he took it from Hamori without authority. Toward the end of 1988, Assistant Chief of the West Palm Beach Department, attempted to locate the Respondent, then a patrolman with that agency, due to a schedule change. At that time, Respondent was not where he was supposed to be and had not advised the Department of his whereabouts. He was finally located at the Mt. Vernon Motor Lodge in West Palm Beach. Discussions with the manager of that facility indicated that the Respondent had moved out without paying the full amount of the room rent owed and had left his room in a messy and unclean condition. Abel Menendez was the manager of the Mount Vernon Motor Lodge during the period September through November, 1988. During that time, Respondent, who represented himself incorrectly as an employee of the Sheriff's office, rented a room at the motel, paying a rate therefor of $135.00 per week. Respondent was to pay his rent in advance and at first did so, but after a while, he began to get behind in his payments and Mr. Menendez had trouble finding him. When it became clear that Respondent could not bring his arrears current, Mr. Menendez agreed that he could make partial payments to catch up, but he never did so. Finally, in November, along with Mr. Fishbein, the motel owner, Mr. Menendez told Respondent he would have to pay up or move out. When Respondent first began to fall behind in his rent, Mr. Menendez contacted representatives of the West Palm Beach Police Department and gave them a summary of the charges owed by Respondent. The last payment made by Respondent was $135.00 on November 11, 1988, which left a balance due of $500.00 which was never paid. Respondent is alleged to have left the motel during the night of November 11, 1988. According to Mr. Menendez, Respondent "destroyed" the room before his departure. Some of his clothes and things were left in the room. The room was examined the following day by Sgt. Chappell, also of the Department, who had gone there to look for the Respondent at the direction of Captain Griffin. This officer observed holes punched in the walls, and trash and dirty diapers in the room. He never located Respondent. Chief Bradshaw subsequently spoke with the Respondent about this situation and based on the facts as he determined them, terminated Respondent's probationary status with the Department and discharged him. In their discussion, Respondent indicated he had an arrangement with the motel manager, but this was only partially true. The arrangement was to pay in installments but Respondent abandoned the room without doing so. He was locked out by the management the following day. Even though Respondent agreed with Chief Bradshaw to make payments of the amounts owed, he may not have done so. As a result, criminal charges were filed against him. The criminal charges were subsequently disposed of by a Deferred Prosecution Agreement entered into by the Respondent and the State in June, 1989. By the terms of that agreement, Respondent agreed to pay off the obligation at a rate no less than $100.00 per month. However, Mr. Moore never paid any money to the motel because, due to a total mixup in the motel's paperwork, they were never able to establish to whom the money was to be paid. As a result, the matter was ultimately disposed of by the State entering a nolle prosequi in the case. Respondent's public defender, Ms. Kretchmer, remembers Respondent's repeatedly indicating he wanted to pay off the obligation, however. Respondent's wife, with whom he was living in the motel prior to their marriage, recalls having offered Mr. Menendez $300.00 the day before the Moores moved out. Mr. Menendez would not take it, however, indicating he wanted to receive it from Respondent. When Respondent came by, she gave him the money and they went to Menendez to pay him but he would accept only $150.00 and told Moore to keep the rest and not worry about it because, due to the fact he was a policeman, they "needed him around there." Shortly thereafter, however, Mrs. Moore heard Mr. Menendez complaining to the police about the amount owed. She claims Moore tried to make payments several times and whenever he would do so, Menendez would get upset. It was her understanding that Menendez was getting pressure from his boss to collect what was due and get the records straight. He mentioned to her that the motel cash account was short and he was being accused of taking the money. There is some evidence that Moore was not the only one having trouble with rent payments at the motel at that time. When he found that out, he decided to move but Mr. Menendez begged him not to go because his presence as a policeman helped in curbing drugs, gambling and prostitution there. Mrs. Moore absolutely denies that she and Respondent ever hid from Mr. Menendez nor did they sneak out during the night. They checked out in broad daylight at 11:45 in the morning with Mr. Menendez standing by. At that time, Menendez threatened to call the police but, according to Respondent, he, Moore did so instead, but could get no one in authority to listen or help him. Even after they left, Moore called and spoke with Menendez several times but was still subsequently arrested on the defraud charge. According to Mrs. Moore, they at no time damaged the room. At the time they left, the motel was fixing the air conditioner which caused some damage, but that's the only damage in the room when they left. Before they left, she cleaned the room so that it was in the same condition when they left as it was when they moved in. Respondent claims that when he began work with the West Palm Beach Police Department he discussed his rent problems with police officials and told them he had an arrangement with the motel to pay off the arrears. He admits he then got behind and when he tried to pay, the figures kept changing because of the absence of rental records. When he left, his disagreement with the motel was over the amount owed. He called the police to get a witness to his request for a firm bill, but by that time, he had already been terminated and the police would not come out. He had already had his discussion with Chief Bradshaw who, he claims, had told him to take care of the bill whatever the amount. He felt this was unfair, however, because he was told to pay whatever was asked regardless of whether he owed it or not. Respondent was ordained and licensed as a minister by the Church of God, 629 5th Street, West Palm Beach, on January 3, 1992. His minister the Reverend Preston Williams has found him to be a nice person and a well mannered person dedicated to his work, who has served with him in the local ministry since 1985.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is, therefore; RECOMMENDED that a Final Order be entered in this case, dismissing the allegation of defrauding an innkeeper as alleged in the original Administrative Complaint, finding Respondent guilty of unlawfully taking the property issued to officer Hamori as alleged in the Amended Administrative Complaint, and revoking his certification as a correctional officer and as a law enforcement officer. RECOMMENDED in Tallahassee, Florida this 24th day of April, 1992. ARNOLD H. POLLOCK Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 24th day of April, 1992. COPIES FURNISHED: Gina Cassidy, Esquire Department of Law Enforcement Post Office Box 1489 Tallahassee, Florida 32302 Larry A. Moore 5100 45th Street, Apt. 1-A West Palm Beach, Florida 33401 James T. Moore Commissioner Department of Law Enforcement Post Office Box 1489 Tallahassee, Florida 32302 Rodney Gaddy General Counsel Department of Law Enforcement Post Office Box 1489 Tallahassee, Florida 32302 Jeffrey Long, Director Criminal Justice Standards Training Commission P. O. Box 1489 Tallahassee, Florida 32302
Findings Of Fact Based on the evidence received at the final hearing, the following findings of fact are made. At all times material to this case the Respondent, Willie Whittington, was licensed as a certified general contractor in the State of Florida, holding license number CG C006966. At all times material to this case the Respondent was the sole qualifying agent for Whittington & Sons Builders, Inc. On May 15, 1987, Edwin W. Brown and Sandra J. Brown, husband and wife, contacted Respondent, in response to Respondent's advertising, to discuss the construction of a log house and an outbuilding on a lot owned by the Browns in Palm Beach County, Florida. The outbuilding was to be used as a combination garage and barn. During this initial meeting, the Browns described the project to Respondent. At the conclusion of the meeting on May 15, 1987, the Browns gave Respondent a $2,000.00 deposit to get started on the project. Respondent was to use that deposit to have plans drawn for the two buildings and to secure the necessary building permits. On June 23, 1987, Whittington & Sons Builders, Inc. entered into two contracts with the Browns, one for the house and the other for the outbuilding. Respondent signed both contracts on behalf of Whittington & Sons Builders, Inc. Both contracts were clear and unambiguous as to the work that was to be performed, as to the price that was to be paid for the work, and as to the schedules by which the construction draws would be made. The price for the house was set at $73,506.00. The price of the outbuilding was set at $11,665.00. Both contracts provided that construction would be completed within 130 days. On June 23, 1987, the Browns paid to Respondent the sum of $6,871.60 as required by the two contracts. Sandra Brown began keeping a log of her contacts with Respondent as of August 4, 1987, because she had experienced difficulty reaching Respondent by telephone and because no progress was being made on the project. Around August 4, 1987, Respondent told the Browns that he needed an additional $175.00 to pay to the architect to complete the plans. Because this was not provided for by their contracts, the Browns refused Respondent's request for this additional sum of money. On August 7, 1987, the Browns paid to Respondent the sum of $3,822.90 that Respondent was to use to order the logs. The building permits were not obtained until October 9, 1987. The permits were not obtained earlier than that date because Respondent did not diligently pursue his obligation to get the permits. As of early November 1987, the only work that had been done was the preparation of the lot for the foundation. On November 7, 1987, Respondent requested that the Browns advance him $5,000.00 so he could proceed with the construction. Respondent was financially unable to proceed because the Internal Revenue Service had garnished the account in which Respondent had placed the Browns' deposits. The Browns refused to advance Respondent this additional sum of money, but they remained willing to pay Respondent according to the draw schedules of the contracts. In December 1987 the Browns received a notice to owner form from Rinker Materials. In response to this notice, the Browns paid to Rinker Materials the sum of $2,664.77 and asked that no further materials be delivered on a credit basis to the job site. The Browns received a release of lien from Rinker Materials on December 28, 1987, for the materials Respondent had previously ordered on credit. In the middle of December 1987, the Browns learned that Respondent had neither ordered the logs for the construction nor determined the quantity of logs that would be required. On or about December 18, 1987, the foundation for the house was poured. Little work was done on the project between that date and January 4, 1988, the date Respondent told the Browns that his back was hurt and he could not work. The Browns filed a written complaint with the Palm Beach County Contractors Certification Board on January 8, 1988. As of January 13, 1988, Respondent was unable to account for the funds the Browns had deposited with him. At a meeting on January 19, 1988, among Respondent, the Browns, and a representative of Palm Beach County Contractors Certification Board, Respondent agreed to furnish receipts and an accounting of the construction funds by the next meeting on January 27, 1988. Respondent also agreed, during the meeting of January 19, 1988, to perform certain work on the project before the next meeting. At the next meeting, Respondent did not provide the Browns with receipts or with an accounting of the construction funds. Instead Respondent submitted a non-itemized bill in the amount of $18,131.20 for labor and materials supposedly expended by Respondent through January 27, 1988. The Browns refused to pay this bill. Respondent had worked only approximately 16 hours on the project between January 19 and January 27 and had not completed the additional work he had promised to have done January 27, 1988. The Browns fired Respondent and his company on January 27, 1988. At that time, Respondent had completed approximately 10% of the project `whereas it should have been approximately 60-70% completed. The delays by Respondent throughout his association with this project were not justified. After the Browns fired Respondent, they were forced to pay a materialman, MacMichael Lumber Company, to prevent the foreclosure of a lien against the property. This lien resulted because Respondent did not pay for certain materials he had ordered on credit before the Browns fired him. On February 4, 1988, Respondent agreed to repay the Browns the sum of $4,200.00. As of the date of the final hearing, Respondent owed the Browns $1,400.00. A subsequent contractor completed the project without undue delay in June 1988 for an additional $74,000. This price reflects changes the Browns made after the subsequent contractor began his work. Petitioner is the state agency charged with the regulation of contractors in the State of Florida. The Administrative Complaint filed by Petitioner against Respondent alleges, in pertinent part, the following: Respondent failed to perform in a reasonably timely manner, and or abandoned said job(s), in violation of 489.129(1)(m),(k). There was financial mismanagement and/or misconduct in connection with this matter, attributable either to Respondent directly, or to Respondent's failure to properly supervise, in violation of Section 489.129(1)(h) & (m), as generally exhibited by, but not limited to, the following: Subject double billed Customer on several occasions; failure to pay subcontractors and suppliers; and failure to buy materials. There was no allegation in the Administrative Complaint or evidence presented at hearing that Respondent has been the subject of prior disciplinary action. Respondent has been licensed as a certified general contractor by the State of Florida since 1973. Following receipt of the Administrative Complaint, Respondent denied the violations and timely requested a formal administrative hearing.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that a final order be entered which finds Respondent guilty of having violated Section 489.129(1)(h), Florida Statutes and which imposes a fine against Respondent in the amount of $1,500 for such violation and which further finds Respondent guilty of having violated Section 489.129(1)(m), Florida Statutes and which imposes a fine against Respondent in the amount of $1,500 for such violation so that the total fine to be imposed against Respondent is $3,000. DONE and ENTERED this 7th day of July, 1989, in Tallahassee, Leon County, Florida. CLAUDE ARRINGTON Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 7th day of July, 1989. APPENDIX CASE NO. 89-0743 The proposed findings of fact submitted by Petitioner are addressed as follows. Addressed in paragraph 1. Addressed in paragraph 27. Addressed in paragraph 3. 4-5. Addressed in paragraph 4. Addressed in paragraph 5. Addressed in paragraph 6. Rejected as being unnecessary to result reached. Addressed in paragraph 7. Addressed in paragraph 8. Addressed in paragraph 9. Rejected as being subordinate to the conclusions reached. Addressed in paragraph 10. 14-15. Rejected as being subordinate to the conclusions reached. Addressed in paragraph 12. Addressed in paragraph 17. Rejected as being unnecessary to result reached. Addressed in paragraph 14. Addressed in paragraph 15. Addressed in paragraph 15. Addressed in paragraph 16. 22-26. Rejected as being subordinate to the conclusions reached. Addressed in paragraph 17. Addressed in paragraph 19. Addressed in paragraph 23. Rejected as being subordinate to the conclusions reached. Addressed in paragraph 24. Rejected as being subordinate to the conclusions reached. Addressed in paragraph 22. 34-35. Rejected as being recitation of testimony and as being subordinate to the conclusions reached. COPIES FURNISHED: Elizabeth R. Alsobrook, Esquire Department of Professional Regulation 1940 North Monroe Street, Suite 60 Tallahassee, Florida 32399-0729 Willie Whittington 342 Walker Street Greenacres City, Florida 34974 Fred Seely, Executive Director Construction Industry Licensing Board Department of Professional Regulation Post Office Box 2 Jacksonville, Florida 32201 Kenneth Easley General Counsel Department of Professional Regulation 1940 North Monroe Street Suite 60 Tallahassee, Florida 32399-0729 =================================================================
The Issue Whether the Respondent committed the violations alleged in the Order of Probable Cause entered March 4, 2005, and, if so, the penalty that should be imposed.
Findings Of Fact Based on the oral and documentary evidence presented at the final hearing, the stipulation of the parties, and on the entire record of these proceedings, the following findings of fact are made: The FEC is the statutory entity that is responsible for investigating complaints and enforcing Florida's election laws, Chapters 104 and 106, Florida Statutes. See § 106.25, Fla. Stat. Lieutenant Wills has been employed by the West Palm Beach Police Department for approximately 23 years and has served as a lieutenant for approximately three years. At the time he was promoted to lieutenant, Lieutenant Wills was serving as the president of the West Palm Beach Police Benevolent Association, Inc. ("PBA"), which is a police union for officers, sergeants, and lieutenants employed by the West Palm Beach Police Department. Lieutenant Wills resigned this position when he was promoted. In May 2004, the time material to this proceeding, Lieutenant Wills served as a representative to the PBA. In May 2004, Lieutenant Wills worked the night shift, from 5:00 p.m. to 6:30 a.m. He supervised a uniformed patrol squad of 10-to-12 police officers and two sergeants. The squad was divided into two units; the first night-shift unit began work at 5:00 p.m., and the second night-shift unit began work at 7:00 p.m. Sergeant Riddle supervised the first night-shift unit, and Sergeant Kapper supervised the second night-shift unit, under Lieutenant Wills's command. The police officers in Lieutenant Wills's squad were required to attend a briefing or "line-up" before they began their patrol or other duties. During the line-up, the officers were briefed on arrest information, bulletins, training, work assignments, and other employment-related matters. The briefings were conducted by Sergeant Kelly, an administrative sergeant who was not under the direct supervision of Lieutenant Wills. Lieutenant Wills often participated with Sergeant Kelly in conducting the briefings for his squad. Officers in the first night-shift unit went on duty at 5:00 p.m., and the briefing for this shift began promptly at 5:00 p.m.; an officer was considered late for work if he or she arrived in the briefing room after 5:00 p.m. The officers in Lieutenant Wills's first night-shift unit routinely began congregating in the briefing room 15 or 20 minutes before the 5:00 p.m. briefing began. They watched television; talked about many different topics, including politics; and generally interacted informally until briefings began at 5:00 p.m. When a police officer was on the police department premises, the officer was expected to obey a direct order from a superior officer, even if he or she was not on duty. If an officer was given an order by a superior officer to carry out work-related duties prior to the beginning of his or her shift, the officer was eligible for overtime pay for the time spent performing these work-related duties. An off-duty officer was not, however, expected to obey anything but a direct order from a superior officer. In an e-mail dated May 4, 2004, Sergeant Peneque, who was the president of the PBA, advised that the PBA planned to endorse Ric Bradshaw, a former chief of the West Palm Beach Police Department, as a candidate for Palm Beach County Sheriff and that the endorsement would be announced at a press conference to be held on May 25, 2004. Sergeant Peneque related in the e-mail that the "chief" was asking that the members of the police department support him by coming to the press conference. Sergeant Peneque sent this e-mail out on the West Palm Beach Police Department "Lotus notes" e-mail system, and it appeared on all of the police department computers. The PBA routinely sent e-mails regarding union business through the police department e-mail system, and the information was generally disseminated to the assembled police officers prior to the start of shift briefings. On May 10, 2004, about 10 or 15 minutes before the beginning of the briefing for the 5:00 p.m. shift, Sergeant Kelly read Sergeant Peneque's e-mail to the officers who had congregated in the briefing room. There were about five or six officers present at that time, and few of them indicated to Sergeant Kelly that they would attend the Bradshaw rally. Sergeant Kelly was upset by this lackluster response and made several remarks to the officers in the briefing room to the effect that they should support "Chief" Bradshaw, that Bradshaw had hired most of them, and that they should show their loyalty by supporting his candidacy for sheriff. Lieutenant Wills came into the briefing room in time to hear Sergeant Kelly's remarks about the lack of support for the Bradshaw candidacy, between 5 and 10 minutes before 5:00 p.m. By that time, more officers had assembled in the briefing room. Before the 5:00 p.m. briefing began, Lieutenant Wills read the PBA e-mail to the officers in the briefing room. Lieutenant Wills asked how many officers planned to attend the Bradshaw rally. Lieutenant Wills was disappointed when only a few officers indicated that they were going to attend the rally, and he said something to the effect that "Chief" Bradshaw had done a lot for the West Palm Beach Police Department.3 A police officer named Paul Creelman spoke up when Lieutenant Wills told the assembled officers about the Bradshaw rally, after one of the officers in the briefing room made a remark that a group of anti-Bradshaw officers were planning to show up for the rally. Officer Creelman remarked, "What time do they get there."4 Officer Creelman meant his remark as a joke. At the time he made the remark, Officer Creelman was sitting in the back of the briefing room; he was eavesdropping on the discussion between Lieutenant Wills and the officers at the front of the briefing room but was not one of the officers engaged in the discussion with Lieutenant Wills. Lieutenant Wills heard Officer Creelman's remark, but he did not respond to the remark. He went on to discuss other matters. In May 2004, Officer Creelman was assigned to the Neighborhood Enhancement Team ("NET"). Officer Creelman and the other NET officers were not members of Lieutenant Wills's squad and attended the 5:00 p.m. briefing as guests, primarily to gather officer safety information. Sergeant Luciano was the sergeant in charge of the night-shift NET officers, and Lieutenant Sargent supervised Sergeant Luciano and the NET officers. Lieutenant Wills had no direct supervisory authority over Officer Creelman. Officer Creelman was present at the 5:00 p.m. briefing for Lieutenant Wills's squad on May 17, 2004. During the briefing, Sergeant Kelly discussed problems that the squad was having with officers abusing sick leave by calling in sick when they wanted a few days off. Lieutenant Wills joined the discussion, and he was emphatic that he would not tolerate the abuse of sick leave by the officers in his squad because it left the squad short-handed and caused safety concerns. Lieutenant Wills discussed the police department's policies regarding sick leave, and, at one point, Lieutenant Wills stated that he had been the president of the PBA; that he knew how things worked; and that he would "fuck over" anyone who "fucked" with him about sick leave. Officer Creelman interjected a comment under his breath, saying "That's sad."5 Lieutenant Wills asked Officer Creelman to repeat his comment, and Officer Creelman did so. Lieutenant Wills demanded to know what Officer Creelman meant by the remark, and Officer Creelman told Lieutenant Wills that he considered his comment about using what he had learned as PBA president against his subordinate officers to be inappropriate. Lieutenant Wills was angry about Officer Creelman's remark and told Sergeant Luciano that he wanted to see him and Officer Creelman in his office after the briefing. When Officer Creelman and Sergeant Luciano came into his office, Lieutenant Wills expressed his anger about what he considered Officer Creelman's derogatory and disrespectful conduct towards him during the briefing. Lieutenant Wills told Officer Creelman that he did not want him "mouthing off" during his squad's briefing and that he thought Officer Creelman was a "smart aleck." To make the point that the incident on May 17, 2004, was not the first time Officer Creelman had "smarted off" to him, Lieutenant Wills told Officer Creelman that he had not forgotten his remark about the anti-Bradshaw rally. Lieutenant Wills then told Officer Creelman and Sergeant Luciano to leave his office. According to Officer Creelman, the reason Lieutenant Wills called him into his office was to address Officer Creelman's conduct in making inappropriate comments during the briefing of Lieutenant Wills's squad.6 Officer Creelman described Lieutenant Wills's manner during the time he was in Lieutenant Wills's office as "normal" and stated that Lieutenant Wills spoke in a low tone of voice.7 In a memorandum dated May 18, 2004, to Assistant Chief Van Reeth, Officer Creelman set out his version of the events that took place on May 10, 2004, regarding Lieutenant Wills's discussion of the Bradshaw rally; his version of Lieutenant Wills's conduct during the May 17, 2004, briefing; and his version of the meeting in Lieutenant Wills's office on May 17, 2004.8 In the May 18, 2004, memorandum, Officer Creelman requested permission to speak with Assistant Chief Van Reeth and the Chief of Police "so that we can all resolve this matter." On May 21, 2004, Officer Creelman filed a complaint against Lieutenant Wills regarding "the manner in which the Lieutenant spoke to officers in briefing." Officer Creelman's complaint was that Lieutenant Wills used "inappropriate language." A copy of Officer Creelman's May 18, 2004, memorandum was attached to the complaint form. Captain Olsen conducted the investigation of Officer Creelman's complaint against Lieutenant Wills, and she concluded that Lieutenant Wills used inappropriate language during the May 17, 2004, briefing when discussing the abuse of sick leave by members of his squad. Lieutenant Wills was disciplined for this misconduct with a verbal reprimand documented in his personnel file. Captain Olsen concluded after her investigation that Lieutenant Wills read the PBA e-mail before the May 10, 2004, briefing began, when Lieutenant Wills and the police officers he supervised were off duty. Because of this, Captain Olsen concluded that Lieutenant Wills did not violate any of the rules or policies of the West Palm Beach Police Department with respect to his remarks about the Bradshaw rally. Neither Lieutenant Wills nor any other member of the West Palm Beach Police Department is expected to enforce Florida's election laws as part of their duties as police officers, and no training with respect to the provisions of Florida's election laws is provided for police officers by the West Palm Beach Police Department or the Florida Department of Law Enforcement. Lieutenant Wills is not familiar with the provisions of Florida's election laws in his professional capacity as a law enforcement officer. Lieutenant Wills has never run for public office or served as a committee chair, a committee treasurer, or a campaign treasurer for a candidate in a municipal, county, or state political campaign. Lieutenant Wills is not familiar with the provisions of Florida's election laws in his personal, individual capacity. Lieutenant Wills was provided with a copy of the rules and regulations of the West Palm Beach Police Department, and he was aware in May 2004 that it was against the police department's rules and regulations for an officer to engage in or discuss political activities during work hours. Notwithstanding this policy, Bradshaw's candidacy for Palm Beach County Sheriff generated a lot of interest among the police officers and was a topic of general discussion at the police department, even when officers were on duty, because Bradshaw had been the Chief of the West Palm Beach Police Department until he retired in early 2004. Summary The evidence presented by the FEC is not sufficient to establish with the requisite degree of certainty that Lieutenant Wills willfully used his supervisory position, authority, or influence for the purpose of coercing or influencing the vote of any of the officers present during the discussion of Bradshaw's candidacy before the May 10, 2004, briefing or of affecting the result of the election for Palm Beach County Sheriff. The evidence presented reflects that none of the officers present in the briefing room prior to the May 10, 2004, briefing had a clear memory of the specific statements made by Lieutenant Wills, and the evidence is not sufficiently persuasive to support a finding of fact that Lieutenant Wills told the police officers assembled in the briefing room that they should support Bradshaw's candidacy for sheriff or that they should attend the Bradshaw rally. It cannot reasonably be inferred from the evidence presented that Lieutenant Wills's purpose in reading the PBA e-mail or in making the statement to the officers that Bradshaw had done a lot for the West Palm Beach Police Department was to coerce or influence anyone present in the briefing room to attend the Bradshaw rally, to vote for Bradshaw, or to effect the results of the election for sheriff.9 Even if the evidence were sufficient to support a finding that Lieutenant Wills's purpose was to coerce or influence the officers to attend the Bradshaw rally or to support or vote for Bradshaw for sheriff, the evidence presented by the FEC is not sufficient to support a finding that Lieutenant Wills was aware that his actions violated Florida's elections laws or that he acted in disregard of the law. Evidence that Lieutenant Wills knew that the West Palm Beach Police Department rules and regulations prohibited him from engaging in political activities while on duty is not sufficient to support an inference that Lieutenant Wills should have been on notice that he should consult Florida's election laws prior to reading the PBA e-mail or making any remarks about Bradshaw's candidacy for sheriff. Finally, the evidence presented by the FEC is not sufficient to support a finding that Lieutenant Wills's purpose in telling Officer Creelman on May 17, 2004, that he remembered his remark about the anti-Bradshaw rally was to coerce or influence Officer Creelman's vote for sheriff or the affect the result of the election for sheriff. It is uncontroverted that Lieutenant Wills's purpose in calling Officer Creelman and Sergeant Luciano into his office on May 17, 2004, was to talk to Officer Creelman about his making disrespectful comments during the briefings of Lieutenant Wills's squad, and it cannot reasonably be inferred from the evidence presented that Lieutenant Wills's purpose in reminding Officer Creelman of his remark was other than to illustrate Lieutenant Wills's point that Officer Creelman had been disrespectful during briefings on more than one occasion.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Florida Elections Commission enter a final order dismissing in its entirety the Order of Probable Cause entered against Thomas L. Wills on March 4, 2005. DONE AND ENTERED this 2nd day of December, 2005, in Tallahassee, Leon County, Florida. S PATRICIA M. HART Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 2nd day of December, 2005.
The Issue The issue presented for determination herein is whether or not the existing Pontiac dealers serving the West Palm Beach area are providing inadequate representation.
Findings Of Fact Art Moran filed an application with the Department seeking licensure as a franchised Pontiac-GMC motor vehicles dealer. The GMC license is not at issue herein. By its application, it sought the issuance of a license to operate a new Pontiac dealership in Palm Beach County on Northlake Boulevard (stipulation of the parties). A letter of protest to the application was timely filed by Stewart pursuant to Section 320.642, Florida Statutes. (stipulation of the parties) THE MARKET AREA The relevant market area for purposes of Section 320.642 is the West Palm Beach multiple dealer area (MDA). 1/ The West Palm Beach MDA consists of the densely populated portion of eastern Palm Beach County (Exhibits 9-10). The West Palm Beach MDA has been divided into three smaller markets known as areas of geographic sales and service advantage ("AGSSA") (GM Exhibit 6-7). AGSSA's are developed by GM as a dealer network planning tool. (I-92, 100, 103). Each AGSSA consists of those census tracts closest to a proposed or existing dealer and identifies an area of shopping convenience for consumers in that AGSSA. (GM Exhibits 19 and 20) Each AGSSA represents the area in which an existing or proposed resident dealer has or would have an advantage over the same line make dealer(s) in the MDA by virtue of the resident dealer's location. (I-103). AGSSA I is that portion of eastern Palm Beach County generally lying between 45th Street and Lantana Road. AGSSA II is south of AGSSA I and essentially surrounds the Delray Beach area. AGSSA III is the area of Palm Beach County north of 45th Street where Art Moran has proposed to be located. (GM Exhibit 6, 7). Stewart offered no alternative market definition for performing a registration penetration analysis of the West Palm Beach community. MARKET PENETRATION IN THE WEST PALM BEACH MDA General Motors conducts periodic analyses of market penetration in each MDA by reviewing registration data provided by R. L. Polk and Company ("Polk") at both the county and census tract levels (GM Exhibit 8). The registration data provided by Polk includes every vehicle registered to an address within a particular area of geography (county or census tract) regardless of the selling dealer. Stewart raised an issue during the hearing respecting the reliability of certain market penetration data gleaned from the Polk figures for 1985. This issue was raised based on the parties' inability to affirmatively state whether certain transactions calculated by Polk were fleet or retail transactions. Both parties relied on the Polk data and it is the industry standard for tracking automobile registrations. The Polk data is reliable for the purposes introduced by GM. Adequacy of representation is primarily determined by using retail registration data. The Polk data includes the components of retail and fleet as well as total registrations. (GM Exhibits 25-27). Both parties have used Polk retail registration data to analyze market penetration. (GM Exhibits 25-35, Stewart Exhibits I-N). Retail market penetration is a relative concept that compares the retail registration of one line make with all industry registrations in a particular geographic area. For example, 7.02 percent of all the vehicles registered in the Jacksonville zone for retail use were Pontiac in 1985. Thus, Pontiac's market penetration in the zone was 7.02 percent. (I- 107; GM Exhibit 17). Correspondingly, 5.32 percent of all retail vehicles registered in the West Palm Beach MDA in 1985 were Pontiacs for an MDA average of 5.32 percent, or 1.70 percent below zone average. (GM Exhibits 34 and 35). Market penetration compares total industry retail registrations in an area to the retail registrations of a particular line make in that area. An individual dealer's sales records are not helpful when evaluating market penetration. Retail registration efficiency to Jacksonville's zone average is the percentage relationship between retail penetration in a geographic area and zone penetration. In 1985, the retail registration efficiency of the West Palm Beach MDA to zone areas was 75.8 percent, the lowest penetration in the Jacksonville zone. (GM Exhibit 3). Retail registration efficiency in the West Palm Beach MDA has steadily declined since 1985. (I-154, 155, 157; GM Exhibit 27 utilizing the Polk community registration reports). MDA Retail Reg: 1981 1982 1983 1984 1985 March, 1986 annualized INDUSTRY 31,845 31,328 39,273 42,247 43,797 41,128 PONTIAC 2,356 2,220 2,590 2,639 2,460 2,152 PONTIAC percent 7.4 7.1 OF INDUSTRY 6.6 6.4 5.6 5.2 Zone Retail Reg: PONTIAC percent 8.5 7.4 7.4 7.2 7.0 7.6 OF INDUSTRY Further, from 1981 to 1985, industry retail registrations in the MDA have increased 11,952 vehicles or 38 percent while Pontiac retail registrations increased only 104 units or 4 percent (GM Exhibits 27 and 28). Stewart's sales increased only 41 units or 3 percent in the same time period. (I-159). The sales performance of the West Palm Beach dealers has declined 10 percent from 1984 to 1985. Stewart's sales were also down in 1985 (I-159). Perhaps a contributing factor to Stewart's sales performance is his practice of putting supplemental dealer price stickers averaging $800 extra on each car. According to Mr. Stewart, such additional charges make cars more difficult to sell (GM Exhibit 66, p. 345). In 1985, the Pontiac West Palm Beach MDA ranked 123rd in retail penetration when compared with the 159 largest Pontiac markets in the United States. (I-95; GM Exhibit 4). Based on retail penetration, the West Palm Beach MDA has been the worst MDA in Pontiac's Jacksonville zone since 1983 (GM Exhibits 30, 32 and 34) In AGSSA III The most current registration data available at the AGSSA level is year-end 1985 data. This data was available to both parties prior to the hearing. The parties agree that the most current data is required to do market research. In this regard, Stewart relied on outdated data in a number of its exhibits (see, for example, Stewart Exhibits D, J, O, P and W.) The West Palm Beach MDA retail penetration has been consistently below zone and national retail penetration. (GM Exhibit 27). AGSSA III has repeatedly had the worst penetration in the MDA (GM Exhibit 35). For the years 1983, 1984 and 1985, Pontiac's retail penetration figures nationally in the Jacksonville zone, in the West Palm Beach MDA and in the three AGSSA's were as follows-utilizing census tract reports: Zone National West Palm Beach MDA AGSSA 1 AGSSA II (middle) (south) AGSSA III (north) 1983 7.42 6.13 6.86 7.8 6.3 6.2 1984 7.15 6.00 6.41 6.8 6.3 5.9 1985 7.02 6.99 5.32 5.6 5.4 4.7 Recognizing the growth in northern Palm Beach County, Pontiac established AGSSA III as a study area--an area set aside to determine the potential for representation--as early as 1978. Due to the growth, the decline in market penetration, and other factors, the study was converted to a proposed additional point. An additional dealer in an area tends to increase market penetration in its line make to the benefit of the existing same line make dealers. (GM Exhibits 49, 50, 54, 55 and 57). The parties agreed that size class is a factor that may be considered in addressing market penetration. (GM Exhibits 38 through 40; Stewart Exhibits I through Q). Mr. Gahrs testified that model mix is not as significant as line make. Pontiac competes with the full line of vehicles offered by Ford, Chevrolet and the imports (I-168). LOST OPPORTUNITIES "Lost opportunities" is the difference between actual Pontiac retail registrations in an area and the number of registrations that would have occurred had a given norm (i.e. zone average penetration) been achieved. The number of lost opportunities represents the number of registrations available to the Pontiac dealers in the MDA had zone average penetration been attained. (GM Exhibits 30, 32, 34, 39 and 40). The parties agree that lost opportunities exist in AGSSA III and that those losses are increasing: LOST OPPORTUNITIES COMPARED TO ZONE RETAIL PENETRATION 1983 1984 1985 Zone Penetration 7.42 7.15 7.02 MDA (241) (312) (733) AGSSA I no loss (54) (227) AGSSA II (182) (164) (320) AGSSA III (84) (95) (187) The above graphically portrayed the poor market penetration in the West Palm Beach MDA and AGSSA III. (GM Exhibits 30 through 35). Stewart also recognizes the theory of lost opportunity but calculates the loss by comparing the MDA to itself. The car loss which has almost doubled from 1984 to 1985 appears to be growing, based upon the first three months of 1986. Annualized for 1986, the MDA car loss will be 976 (GM Exhibit 27). The lost opportunity in the MDA when adjusted for product popularity drops slightly. However, when the high level of in-sells (cars sold by dealers outside an area but registered in an area in the West Palm Beach MDA) is considered (GM Exhibit 21), the lost opportunity to the dealers doubles from 733 to 1,524 (GM Exhibits 22, 34 and 35). The parties agree that high levels of in-sells can be caused by deficient dealer performance or inadequate representation. The parties also agree that there is a shortfall in registration performance in AGSSA III and that lost opportunities exist in AGSSA III. (GM Exhibit 34; Stewart Exhibit Q, last two pages). CUSTOMER CONVENIENCE The parties also agree that if a manufacturer offers better convenience, better penetration will result. According to Mr. Stewart, the closer the people are to his dealership, the higher the penetration. (GM Exhibit 66, page 332). In fact, there is a high concentration of retail registrations surrounding each Pontiac MDA dealer. (GM Exhibits 19 and 20). Stewart, the Pontiac dealer with the best level of convenience (4.5 miles) has the highest level of sales (1,391 sales) and the highest level of penetration in the MDA (5.6 percent). (Stewart Exhibit E, weighted average distance by dealer, by AGSSA; GM Exhibit 35). In AGSSA III, where Pontiac has its lowest level of customer convenience in the MDA, Pontiac retail penetration is also lowest. (GM Exhibits 35 and 45). Potential buyers in AGSSA's I and II enjoy far greater convenience to the nearest Pontiac dealer than does a potential buyer living in AGSSA III. (GM Exhibit 45; Stewart Exhibit E, Section 2, page 2). All manufacturers represented in AGSSA I and AGSSA II offer similar levels of convenience. On the other hand, the average consumer must travel almost twice as far from his residence in AGSSA III to reach a Pontiac dealer than to reach a Chevrolet, Honda, Ford, Nissan, Volkswagen or Toyota dealer. Correspondingly, Chevrolet, Honda, Ford, Nissan and Volkswagen have higher penetration in AGSSA III than their MDA average. (GM Exhibits 43 and 44). Easy access to a dealer can help improve penetration for a manufacturer. Similarly, an improper location can result in low penetration. (GM Exhibit 43). The sales and service facilities offered by the existing Pontiac dealers in AGSSA's I and II are or soon will be adequate. However, even expanding, optimally located facilities cannot adequately serve a large and growing market. Facilities expansion will not, standing alone, result in increased sales, improved penetration or higher rates of registrations. The West Palm Beach market has simply outgrown the existing 2-dealer network for Pontiac. Proximity is the distance between the home address of a customer or prospective customer of an automobile and the location of the selling dealer. The parties agree that proximity relates to intra-brand competition--competition among dealers of the same line make, and inter-brand competition--competition among dealers of different line makes. The parties also agree that proximity affects intra-brand competition. Seventy-five percent of Pontiac buyers in West Palm Beach travel to the closest Pontiac dealer to purchase a Pontiac. Nationally, sixty percent of purchasers buy from the nearest dealer. (Stewart Exhibit F, Power's Study). The majority of Pontiac purchasers in West Palm Beach are proximity sensitive. Proximity affects inter-brand competition. Manufacturers providing convenience to customers in AGSSA III have a greater opportunity to enjoy above- average penetration performance than manufacturers that do not offer similar levels of convenience. (GM Exhibits 43 and 44; Stewart Exhibit S). Further, Dr. Ostlund admits that the addition of a different line make dealer in AGSSA III could adversely affect Pontiac if it is not represented in AGSSA III, but he cannot determine the degree of the impact. Further indication that proximity affects inter-brand competition is a 1980 Power's Study of Pontiac purchases. That study showed that 72.4 percent of Pontiac purchasers nationwide visited one or more different line make dealerships before buying a Pontiac. The availability of a Pontiac dealership to proximity sensitive buyers is therefore very important. The Power's Study, deemed reliable by Stewart, contradicts the 1958 Ford study offered by Dr. Ostlund. (Stewart Exhibit F, Ford study). The Cort Dissertation, another source recognized by Stewart as reliable, also cautioned against broad use of the Ford results due to the methodology employed therein. Proximity only becomes a factor for Pontiac, however, when the competition offers relatively better level of proximity in comparison to Pontiac. The addition of a Pontiac dealer in AGSSA III would provide Pontiac customers convenience commensurate with the convenience offered by competitive line makes. Further, the customer convenience offered by Pontiac in AGSSA III would be twice as good as the convenience currently offered by Pontiac in AGSSA III and would be consistent with its convenience offered (by Pontiac) in AGSSA's I and II. (GM Exhibits 44 and 45). The proposed Pontiac location in AGSSA III will be 8.1 air miles from its nearest same line make competitor in AGSSA I. That distance is greater than the distance between the Ford, Toyota, Nissan, Volkswagen and Chevrolet dealers in AGSSA III and their nearest same line make competitor. Thus, the distance of the proposed Pontiac dealer from Stewart is consistent with the respective distances between nearest same line make dealers in the MDA. (GM Exhibit 46). Measured by the shortest route in non-rush hour traffic, drive time from the proposed Art Moran location to the Stewart location is long when compared to the convenience levels offered by other line makes. The drive time between the two locations range from 12:50 minutes (Stewart Exhibit C, second to last page) to 14:30 minutes (GM Exhibit 1, page 35) via Interstate 95. The drive time between the proposed location and Stewart's location via US 1 is over 23 minutes (GM Exhibit 1, page 34). A consumer living in a typical residential area in AGSSA III, such as Old Port Cove traveling to Art Moran would travel less than half the time now required to reach Stewart and drive less than one- fourth of the distance (GM Exhibit 1, pages 34 and 35) Pontiac's lack of competitive convenience in AGSSA III is a significant factor in its inadequate retail market penetration. Stewart offered no current data or objective, quantifiable evidence to rebut GM's evidence that customer convenience is directly related to retail market penetration. THE STANDARD Pontiac's zone average penetration, 7.02 percent, is a reasonable norm to use in evaluating the West Palm Beach MDA for five reasons: All Florida markets exceeded national average in 1983, and three of those markets exceeded zone average. In West Palm Beach, AGSSA I exceeded both the zone and national average. (GM Exhibits 30 and 31). Pontiac's penetration in Jacksonville and Pensacola exceeded both zone and national average in 1984. In West Palm Beach, AGSSA I was virtually at national average. (GM Exhibits 32 and 33). Adjusting for product popularity, the MDA should be attaining a penetration level of 95 percent of zone average (GM Exhibits 39 and 40). The demographic characteristics of the community approach national average. (GM Exhibits 36 and 37). Some census tracts in the West Palm Beach MDA are currently attaining or exceeding zone and national average penetration. (GM Exhibits 17 and 18). To develop a reasonable norm, it is necessary to determine what level of penetration an MDA can attain. Selecting a market which is inadequate to develop a standard of adequacy is not proper. Nor is it proper to compare an MDA with a level it is achieving in a given year and contend that it has achieved its full potential. Zone or national average penetration is the proper level of performance for an MDA that is performing at substandard levels. Compared to the 1985 zone average of 7.02 percent, only 5.32 percent of the vehicles registered in the MDA were Pontiacs, and in AGSSA III only 4.66 percent of the vehicles registered were Pontiacs. That deficiency results in a penetration shortfall of 733 units in the MDA compared to zone average (GM Exhibits 34 and 35). That lost opportunity is even more significant in AGSSA III where the lost units amount to 187 in an area where only 369 Pontiacs were registered in 1985 (GM Exhibits 34 and 35). THE NEED FOR MARKET REPRESENTATION Pontiac is not achieving adequate levels of penetration in either the West Palm Beach MDA or in AGSSA III. The cause of that inadequacy is that the market has outgrown the existing 2-dealer network for Pontiac. Since 1950, population in the MDA has increased seven-fold, but the number of dealers has remained at two (GM Exhibit 42). In Florida, the ratio of population to approved Pontiac dealer points is approximately 250,000 to 1 (GM Exhibit 42). The ratio of registrations per approved dealer point is approximately 10,000 to 1 (GM Exhibit 41). Based on the size of the market alone, West Palm Beach could support at least one additional dealer. The relative levels of convenience in the MDA also support additional Pontiac representation in AGSSA III. Six manufacturers offer higher levels of relative convenience to AGSSA III buyers than does Pontiac: Volkswagen, Honda, Chevrolet, Ford, Nissan and Toyota (GM Exhibit 44). Those manufacturers have a competitive advantage over Pontiac in AGSSA III. The most recent data available supports the proposition that, in order to have an opportunity to achieve areas of better than average penetration in an area, a manufacturer must be represented in that area (GM Exhibits 43 and 44). Of the 13 major line makes represented in the MDA, only those manufacturers represented in AGSSA III exceed their MDA average in that AGSSA (GM Exhibit 43). Convenience is not an issue in AGSSA's I and II where relative proximity is provided by all manufacturers. However, in AGSSA III, the prospective Pontiac purchaser must travel twice as far than other Pontiac purchasers in the MDA (GM Exhibit 45), and twice as far as purchasers of vehicles from manufacturers represented in AGSSA III to purchase a vehicle (GM Exhibit 44). The distance between the proposed Art Moran site and Stewart is consistent with the distance between dealers in AGSSA's III and the closest same line make dealer in AGSSA I (GM Exhibit 46). Lack of proximity was one factor influencing those individuals in AGSSA III who desired a Pontiac, but who did not purchase Pontiacs since seventy-five percent of Pontiac purchasers in the MDA are proximity-sensitive. Pontiac cannot be adequately represented in AGSSA III without establishing an additional dealership in AGSSA III. In 1985, the AGSSA I dealer placed 24 percent of its retail sales in AGSSA III (GM Exhibit 47) and the AGSSA II dealer placed less than five percent making it an insignificant factor in AGSSA III (GM Exhibit 22). To correct the penetration shortfall in AGSSA III, the AGSSA I dealer would have to sell over 750 additional units, an 80 percent sales increase (GM Exhibits 27, 28). This is highly unlikely given the historically flat sales performance of Stewart (GM Exhibit 27). It is industry practice to place a dealer in a market where market penetration is lowest. In order to achieve above-average penetration, a manufacturer must be represented (GM Exhibits 43, 47, 49, 50, 54-57). The combined efforts of the new dealer in an area coupled with those of the next closest dealer are usually required (GM Exhibit 47). Dealer additions in other markets have resulted in a consistent pattern (GM Exhibits 49, 50, 54-57): The existing dealers improve their sales performance; Penetration efficiency increases; and The distribution pattern of the dealer adjacent to the new point remains constant, despite addition of a dealer. GROWTH OF THE WEST PALM BEACH AREA Since 1950, the population of the area as a whole has increased more than sevenfold. The metropolitan area is expected to be the fastest growing in the nation by the turn of the century. (Moran Exhibit 1, Florida Forecast, January 1, 1986) There has been no change in the Pontiac dealer count in the last 36 years (GM Exhibit 43). Palm Beach County's 1985 population was 713,253, a 23.6 percent increase over the 1980 population of 576,863. (GM Exhibit 1, Table 1) As significant as that increase is, it is less than the 1980-85 increase experienced in AGSSA III, which went from 111,228 to 140,007 or a 26.1 percent increase (GM Exhibit 1, Tables 30 and 31). Dealers are usually added in growing areas. Palm Beach County has become economically diversified and its population is heterogeneous. AGSSA III mirrors these patterns. Consistent with these trends in population are increases in households, construction, employment, which are all growing rapidly for Palm Beach County as a whole and even faster for AGSSA III. (GM Exhibit 1, Tables 27 and 28) Per capita income, as well as the average household income, remains high in Palm Beach County and in AGSSA III. (GM Exhibits 12, 13 and 14) Moreover, in 1985 all but one of the census tracts in AGSSA III had a median household income higher than the county median. (GM Exhibit 1, Table 34) Most of the people of driving age in the market can afford automobiles. In fact, people in the country spend more on their automotive needs, in the aggregate, than on food. Similarly, all measures of residential and industrial commercial growth indicate substantial growth for Palm Beach County as a whole and even more growth in AGSSA III (GM Exhibit 1, Tables 2-7, and GM Exhibit 2). Building permit valuations have increased 700 percent from 1975 to 1985. Residential construction, either underway or approved, reflects the actual and anticipated growth of population in Palm Beach County. Retail sales in Palm Beach County increased 47 percent from 4.5 million dollars in 1980 to 6.6 million dollars in 1985. From 1984 to 1985, the civilian labor force increased by more than 3 percent, employment increased 4.6 percent and unemployment decreased 15.2 percent (GM Exhibit 1, Table 14). Large industrial and commercial firms such as IBM and Pratt and Whitney have located in AGSSA III. Traffic counts near the proposed point more than doubled from 1976 to 1984. (GM Exhibit 1, Table 35) Traffic volume is 5 times greater on I-95 near the location of the proposed dealer than on US-1 where Stewart is located. The "explosive" growth in the northern part of the West Palm Beach MDA has attracted extensive public and media attention. Research conducted by Mr. Stewart revealed a special section in the Palm Beach Post headline "Horizon Bright for North County." (Moran Exhibit 1, Palm Beach Post, July 21, 1985) As stated by the mayor of Palm Beach Gardens, "We are ready to explode. This is the hot spot for development." A regional mall is being constructed on PGA Boulevard in AGSSA III. The distance between this new mall and its nearest competitor to the south is similar to the distance between Moran's proposed location and Stewart. This mall, located in Palm Beach Gardens, "is actually a downtown. . . The 322 million dollar project combines residential, commercial and retail uses on property on the north side of PGA Boulevard between US-1 and Alternate A1A." (Moran Exhibit 1, Palm Beach Post, July 21, 1985, p. F-4) In addition to the development in the northern section of the county (essentially AGSSA III), development in the central section of Palm Beach County is also significant. Stewart, located in AGSSA I just east of the central section of Palm Beach County, is in a position to take advantage of this growth. Growth in the areas near the existing and proposed dealerships is strong. DEMOGRAPHICS Growth has led to demographic diversity in Palm Beach County. While the very wealthy remain, they have become less important as the middle and upper middle income groups have grown. Palm Beach County has become more like other urbanized counties in Florida. The entire MDA, in AGSSA III in particular, show heavy concentrations of household annual incomes between 15 and 40 thousand dollars and at levels above 40 thousand dollars (GM Exhibits 36 and 37). As of 1985, there were no census tracts in AGSSA III where the average household income was less than 15 thousand dollars. West Palm Beach and AGSSA III have residents in every age group. (GM Exhibit 36) Stewart has not performed any study which demonstrates a link or relationship between demographics and market penetration. ALLOCATION The Pontiac allocation system is based upon the number of sales reported by a dealer. The more cars sold by the dealer, the more car the dealer earns from the factory. Stewart Pontiac has had a history of not reporting sales promptly. Earl D. Stewart recognized the benefits of the Pontiac allocation system when he testified in the Fischer-Mazda case in 1980. In discussing the Phoenix, a hot or popular car that year (a car easy to sell), he compared the Pontiac system to that of Mazda. (GM Exhibit 66, pages 311-312): I would say that the Phoenix shortage compares most closely of any car I have in the line with the Mazda problem. However, the interesting thing with the Phoenix is that through sales efforts there is a direct correlation between selling more cars and earning more cars. . . With the Phoenix I have started out with a relatively small number of cars, and through my rates of sales, I have earned additional cars. So my experience, since the new X-body came out, I have earned additional products. Stewart maintains a large number of vehicle orders to ensure sufficient numbers of vehicles to sell. While Mr. Stewart suspects that other Pontiac dealers have a greater supply of popular vehicles and estimates that other manufacturers have more new cars at model introduction, he admitted that "my total inventory compares equitably with other Pontiac dealers in the zone. . ." (III-51) CUSTOMER SATISFACTION Both Pontiac and its dealers strive to satisfy the ultimate customer-- the automobile purchaser. Both the manufacturer and dealer must provide a level of satisfaction the customers expect. The customer is the best judge of whether satisfaction has been achieved. Customer satisfaction is measured through an involved market research procedure. General Motors measure customer satisfaction with both the product and the selling dealer. Overall experience with the selling dealer measures the customer satisfaction with the dealer's sales staff, delivery condition of the vehicle, and warranty service. 2/ Most dealers with low CSI ratings usually offer customers poor service (Montgomery deposition, pages 4 and 5). Responses from consumers regarding overall satisfaction are verified and evaluated. The parties agree that higher CSI scores are preferable. CSI results are used as a management tool. CSI assist the zone office and the dealer to identify problems in the dealership and allows the dealer an opportunity to correct noted deficiencies. Zone average is the minimum level of satisfaction acceptable to General Motors. Zone average is sales weighted, which tends to reduce the standard below the average of all consumer responses in the zone. A dealer whose CSI rating is below zone average is not providing the levels of satisfaction expected by either GM or the customer. Stewart Pontiac is significantly below zone average and does not provide adequate representation of GM relative to the other zone dealers. Over the past six quarters, Stewart Pontiac's CSI has declined from 6 points below zone average to 10 points below zone average: Quarter Zone Average CSI Stewart Pontiac CSI Difference 4th-1984 75 69 (6) 1st-1985 76 69 (7) 2nd-1985 77 71 (6) 3rd-1985 77 69 (8) 4th-1985 77 67 (10) While other dealers have improved their CSI during this period of time, Stewart has consistently been one of the worst performing dealers in the zone. The other Pontiac dealers in the MDA are performing at zone average. As of March, 1986, Stewart Pontiac is 13 points below national average and 10 points below zone average, a statistically significant difference. Moreover, developing a comparison with certain sub-groups of dealers, Stewart Pontiac is significantly below those averages. Utilizing GM's methodology, the parties agree that there is a significant difference between Stewart and any other sub-group or combination thereof (GM Exhibit 67). Comparing all GM dealers in West Palm Beach, the ratings range from 67 to 90. Stewart Pontiac is at67, six points below the nearest automobile dealer (GM Exhibit 59). Stewart Pontiac is the lowest rated dealer in West Palm Beach. Indeed, in terms of product evaluation, Cadillac is rated lower than Pontiac, yet the Cadillac dealers in West Palm Beach are able to perform at higher levels of satisfaction for their customers. CUSTOMER SERVICE PROVIDED BY STEWART PONTIAC Stewart Pontiac receives the same products as other Pontiac dealers. The Pontiac zone office has sent personnel over to Stewart Pontiac in order to assist the dealership in improving its CSI rating. About the same time as the protest was filed, Stewart Pontiac commenced improvement efforts (GM Exhibit 65). Stewart's CSI improvement program was necessitated by the absence of any such program at the dealership (Montgomery deposition, pages 15-17). The attitude of the dealer and desire of its management to improve CSI will have a greater impact on CSI performance than the mere spending of substantial sums as a means to correct a CSI problem. Clyde Montgomery, Pontiac's district manager, is familiar with the CSI for Stewart Pontiac. Montgomery has discussed the improvement programs with Stewart's dealership personnel and expects Stewart's CSI to increase. Montgomery noted that there were numerous attitude problems at the dealership which needed attention to include the following: Customer relations manager, recently hired and has little authority; Service manager is not consumer oriented; Earl D. Stewart does not appear to have a sufficient interest in the service department; The dealership has not properly implemented a number of programs suggested. To improve a CSI rating, the dealership must be attentive and a positive attitude must be sustained to earn the approval of its customers. IMPACT OF SERVICE ON PENETRATION Dealers with higher sales rates usually have lower CSI ratings. However, there are major exceptions to that rule. Three of the top ten dealers in the Jacksonville zone have high CSI ratings. Both parties agree that good service leads to customer retention and increased sales while poor service means lost sales. As Dr. Ostlund stated (IV-215, 216): There is no question that people are more likely to buy a car from their nearest Pontiac dealer, but that is not something that is axiomatic. They will buy a car from other dealers if there are reasons that prompted that condition, such as. they may buy from a dealer who is known to have a good service operation . . . Convenience of service is extremely important to a dealer after the warranty expires. (GM Exhibit 66, page 292) The proposed Art Moran dealership would provide prospective purchasers a high level of convenience and increased market penetration. Service convenience is an important factor in establishing a dealership. Convenience for service returns is at least if not more important to a customer than convenience for purchasing. If a dealer is too far, a consumer may not return to the dealer but have work done elsewhere. AGSSA III customers must drive longer distances for both sales and service than the average customer in the MDA.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Art Moran Palm Beach Pontiac-GMC Inc., application for a motor vehicle dealer license as a Pontiac dealer be GRANTED. RECOMMENDED this 5th day of September, 1986 in Tallahassee,, Florida. JAMES E. BRADWELL Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 5th day of September, 1986.
