The Issue Whether Florida Administrative Code Rule 15C-7.005 is a invalid exercise of legislatively delegated authority in violation of Section 120.52(8), Florida Statutes.
Findings Of Fact The Department is an agency of the State of Florida. The Department adopted Florida Administrative Code Rule 15C- 17.005, which became effective March 3, 1996. The Rule has not been amended since its initial adoption. JM Lexus and Lexus of Orlando are both licensed franchised motor vehicle dealers in the State of Florida. Lexus of Orlando has filed a complaint in the Ninth Circuit Court, Orange County, Florida, alleging, that JM Lexus violated Rule 15C-7.005 in connection with the alleged sale for resale of new Lexus vehicles to non-Lexus dealerships. FADA and SFADA are trade associations whose members are licensed motor vehicle dealers in the State of Florida and are substantially affected by the rule. Florida Administrative Code Rule 15C-7.005 provides the following: 15C-7.005 Unauthorized Additional Motor Vehicle Dealerships - Unauthorized Supplemental Dealership Locations. An additional motor vehicle dealership, as contemplated by Sections 320.27(5) and 320.642, Florida Statutes, shall be deemed to be established when motor vehicles are regularly and repeatedly sold at a specific location in the State of Florida for retail purposes if the motor vehicle dealer transacting such sales: Is not located in this state, or Is not a licensed motor vehicle franchised for the specific line-make, or Is a licensed motor vehicle dealer franchised for such line-make, but such sales are transacted at a location other than that permitted by the license issued to the dealer by the Department. Such sales are not subject to this rule, however, when a motor vehicle dealer occasionally and temporarily (not to exceed seven days) sells motor vehicles from a location other than the motor vehicle dealer's licensed location provided such sales occur within the motor vehicle dealer's area of sales responsibility (except a motor vehicle dealer who may be deemed a licensee under this rule). For the purpose of this rule, a sale for retail purposes is the first sale of the motor vehicle to a retail customer for private use, or the first sale of the motor vehicle for commercial use, such as leasing, if such commercial motor vehicle is not resold for a period of at least ninety days. Furthermore, this rule shall apply regardless of whether the titles issued, either in this or another state, pursuant to such sales are designated as "new" or "used." An additional motor vehicle dealership established in this fashion is unlawful and in violation of Section 230.642, Florida Statutes. A licensed motor vehicle dealer of the same line-make, as the vehicle being sold in violation of this rule, may notify the Department of such violation. The notice shall include motor vehicle identification numbers or other data sufficient to identify the identity of the selling dealer and initial retail purchaser of the motor vehicles involved. Within 30 days from receipt of a request from the Department containing motor vehicle identification numbers or other data sufficient to identify the motor vehicles involved, the licensee shall provide to the Department, to the extent such information is maintained by the licensee, copies of documents showing the dealer to whom each vehicle was originally delivered, any inter- dealer transfer and the initial retail purchaser as reported to the licensee. Upon a showing of good cause, the Department may grant the licensee additional time to provide the information requested under this paragraph. Examples of good cause include, but are not limited to, request for information on more than 100 vehicles, information on vehicle sales which accrued more than 2 years prior to the date of the request, and information which is no longer maintained in the licensee's current electronic data base. Within forty days of receipt of notice from the motor vehicle dealer, the Department shall make a determination of probable cause and if it determines that there is probable cause that a violation of this rule has occurred, the Department shall mail, by certified mail, return receipt requested, to the line-maker motor vehicle dealership or dealerships involved a letter containing substantially the following statement: Pursuant to Rule 15C-7.005, F.A.C., the undersigned has received a notice that you have allegedly supplied a substantial number of vehicles on a regular and repeated basis, which were sold at a location in the State of Florida, at which you are not franchised or licensed to sell motor vehicles. If these allegations are true, your conduct may violate Florida law including, but not limited to, the above-mentioned rule, Sections 320.61 and 320.642, Florida Statutes. It may also cause you to be deemed a licensee, importer and/or distributor pursuant to Florida law and subject you to disciplinary action by the Florida Department of Highway Safety and Motor Vehicles, including fines and/or suspension of your Florida Dealer license, if applicable. The Division of Motor Vehicles is putting you on notice, if you are conducting such activity, that you cease and desist such activity immediately. If you fail to do so, this agency will take appropriate action. If the dealer supplying vehicles in violation of subsections (1) and (4) is not located in the State of Florida, the Department shall notify such dealer in writing that they may be operating as a distributor of motor vehicles without proper authorization in violation of Section 320.61, Florida Statutes, and may be violating Section 320.642, Florida Statutes. A motor vehicle dealer, whether located in Florida or not, which supplies a substantial number of vehicles on a regular and repeated basis which are sold in the manner set forth in subsection (1), shall be deemed to have established a supplemental location in violation of Section 320.27(5), Florida Statutes, and Rule 15C-7.005, F.A.C. Furthermore, a motor vehicle dealer which supplies vehicles in this manner shall be deemed to have conducted business within the State of Florida and acted as a "licensee," "importer" and "distributor" as contemplated by Section 320.60, Florida Statutes, and thus such activity shall constitute a violation of Sections 320.61 and 320.642, Florida Statutes. Furthermore, this paragraph neither imposes any liability on a licensee nor creates a cause of action by any person against the licensee, except a motor vehicle dealer who may be deemed to have acted as a licensee under this paragraph. Furthermore, no provision of this entire rule creates a private cause of action by any person against a licensee, other than a dealer who is deemed a licensee pursuant to the provisions of subsection (4) of this rule, for civil damages; provided, however, if a licensee fails to comply with the requirements of paragraph (3)(a) of this rule, the Department may bring an action for injunctive relief to require a licensee to provide the information required. No other action can be brought against the licensee pursuant to this entire rule other than a dealer who is deemed to be a licensee pursuant to the provisions of subsection (4) of this rule. Any franchised motor vehicle dealer who can demonstrate that a violation of, or failure to comply with, the provisions of subsection (4) of this rule by a motor vehicle dealer, or a motor vehicle dealer which pursuant to subsection (4) shall be deemed to have conducted business and acted as a licensee, importer, and distributor, has adversely affected or caused pecuniary loss to that franchised motor vehicle dealer, shall be entitled to pursue all remedies against such dealers, including, but not limited to the remedies, procedures, and rights of recovery available under Sections 320.695 and 320.697, Florida Statutes. Rule 15C-7.005 identifies as specific authority Section 320.011, Florida Statutes. Section 320.011 states: The department shall administer and enforce the provisions of this chapter and has authority to adopt rules pursuant to ss. 120.536(1) and 120.54 to implement them. The Rule lists as "Law Implemented" Sections 320.27 and Sections 320.60-.70, Florida Statutes. Sections 320.60 through 320.70, Florida Statutes, are commonly referred to as the Motor Dealers Act. Section 320.27(1)(c), Florida Statutes, provides the following definitions for a motor vehicle dealer and a franchised motor vehicle dealer: (c) "Motor vehicle dealer" means any person engaged in the business of buying, selling, or dealing in motor vehicles or offering or displaying motor vehicles for sale at wholesale or retail, or who may service and repair motor vehicles pursuant to an agreement as defined in s. 320.60(1). Any person who buys, sells, or deals in three or more motor vehicles in any 12-month period or who offers or displays for sale three or more motor vehicles in any 12-month period shall be prima facie presumed to be engaged in such business. The terms "selling" and "sale" include lease-purchase transactions. . . The transfer of a motor vehicle by a dealer not meeting these qualifications shall be titled as a used vehicle. The classifications of motor vehicle dealers are defined as follows: 1. "Franchised motor vehicle dealer" means any person who engages in the business of repairing, servicing, buying, selling, or dealing in motor vehicles pursuant to an agreement as defined in s. 320.60(1). Subsection 320.27(2), Florida Statutes, requires motor vehicle dealers to be licensed. Subsection (5) of this same provision requires that "any person licensed hereunder shall obtain a supplemental license for each permanent additional place or places of business not contiguous to the premises for which the original license is issued." Section 320.27(9) authorizes the Department to discipline motor vehicle dealers for a variety of enumerated offenses. Among those enumerated offenses is the willful failure to comply with any administrative rule adopted by the department or the provisions of Section 320.131(8), Florida Statutes. § 320.27(9)(a)16., Fla. Stat. Section 320.60, Florida Statutes, provides definitions for terms used in Sections 320.61 through 320.70, Florida Statutes. Pertinent to this case are the following: "Agreement" or "franchise agreement" means a contract, franchise, new motor vehicle franchise, sales and service agreement, or dealer agreement or any other terminology used to describe the contractual relationship between a manufacturer, factory branch, distributor, or importer, and a motor vehicle dealer, pursuant to which the motor vehicle dealer is authorized to transact business pertaining to motor vehicles of a particular line-make. * * * (5) "Distributor" means a person, resident or nonresident, who, in whole or in part, sells or distributes motor vehicles to motor vehicle dealers or who maintains distributor representatives. * * * "Importer" means any person who imports vehicles from a foreign country into the United States or into this state for the purpose of sale or lease. "Licensee" means any person licensed or required to be licensed under s. 320.61. * * * (10) "Motor vehicle" means any new automobile, motorcycle, or truck, including all trucks, regardless of weight . . . the equitable or legal title to which has never been transferred by a manufacturer, distributor, importer, or dealer to an ultimate purchaser; (11)(a) "Motor vehicle dealer" means any person, firm, company, corporation, or other entity, who, Is licensed pursuant to s. 320.27 as a "franchised motor vehicle dealer" and, for commission, money, or other things of value, repairs or services motor vehicles or used motor vehicles pursuant to an agreement as defined in subsection (1), or Who sells, exchanges, buys, leases or rents, or offers, or attempts to negotiate a sale or exchange of any interest in, motor vehicles, or Who is engaged wholly or in part in the business of selling motor vehicles, whether or not such motor vehicles are owned by such person, firm, company, or corporation. * * * (14) "Line-make vehicles" are those motor vehicles which are offered for sale, lease, or distribution under a common name, trademark, service mark, or brand name of the manufacturer of same. Section 320.61, Florida Statutes, requires all manufacturers, factory branches, distributors or importers to be licensed. Section 320.63, Florida Statutes, describes the application process for obtaining licensure for manufacturers, factory branches, distributors or importers. The section authorizes the Department to require certain enumerated information as well as "any other pertinent matter commensurate with the safeguarding of the public interest which the department, by rule, prescribes." § 320.63(7), Fla. Stat. Section 320.64, Florida Statutes, provides in pertinent part: 320.64 Denial, suspension, or revocation of license; grounds.--A license of a licensee under s. 320.61 may be denied, suspended, or revoked within the entire state or at any specific location or locations within the state at which the applicant or licensee engages or proposes to engage in business, upon proof that the section was violated with sufficient frequency to establish a pattern of wrongdoing, and a licensee or applicant shall be liable for claims and remedies provided in ss. 320.695 and 320.697 for any violation of any of the following provisions. A licensee is prohibited from committing the following acts: * * * (3) The applicant or licensee willfully has failed to comply with significant provisions of ss. 320.60-320.70 or with any lawful rule or regulation adopted or promulgated by the department. * * * A motor vehicle dealer who can demonstrate that a violation of, or failure to comply with, any of the preceding provisions by an applicant or licensee will or can adversely and pecuniarily affect the complaining dealer, shall be entitled to pursue all of the remedies, procedures, and rights of recovery available under ss. 320.695 and 320.697. Section 320.642, Florida Statutes, provides the process for a licensee to establish additional motor vehicle dealerships or to relocate existing dealerships to a location where the same line-make vehicle is presently represented by a franchised motor vehicle dealer or dealers. Section 320.642, does not, by its terms, authorize rulemaking. Section 320.69, Florida Statutes, states in its entirety that "the department has the authority to adopt rules pursuant to ss. 120.536(1) and 120.54 to implement the provisions of this law." Section 320.695, Florida Statutes, which contains no additional grant of rulemaking authority, provides: In addition to the remedies provided in this chapter, and notwithstanding the existence of any adequate remedy at law, the department, or any motor vehicle dealer in the name of the department and state and for the use and benefit of the motor vehicle dealer, is authorized to make application to any circuit court of the state for the grant, upon a hearing and for cause shown, of a temporary or permanent injunction, or both, restraining any person from acting as a licensee under the terms of ss. 320.60-320.70 without being properly licensed hereunder, or from violating or continuing to violate any of the provisions of ss. 320.60-320.70, or from failing or refusing to comply with the requirements of this law or any rule or regulation adopted hereunder. Such injunction shall be issued without bond. A single act in violation of the provisions of ss. 320.60-320.70 shall be sufficient to authorize the issuance of an injunction. However, this statutory remedy shall not be applicable to any motor vehicle dealer after final determination by the department under s. 320.641(3). Section 320.697, Florida Statutes, which also contains no additional grant of rulemaking authority, provides: Civil damages.--Any person who has suffered pecuniary loss or who has been otherwise adversely affected because of a violation by a licensee of ss. 320.60-320.70, notwithstanding the existence of any other remedies under ss. 320.60-320.70, has a cause of action against the licensee for damages and may recover damages therefor in any court of competent jurisdiction in an amount equal to 3 times the pecuniary loss, together with costs and a reasonable attorney's fee to be assessed by the court. Upon a prima facie showing by the person bringing the action that such a violation by the licensee has occurred, the burden of proof shall then be upon the licensee to prove that such violation or unfair practice did not occur.
Conclusions This matter came before the Department for entry of a Final Order upon submission of an Order Closing File and Relinquishing Jurisdiction by Robert E. Meale, Administrative Law Judge of the Division of Administrative Hearings, pursuant to Respondent’s Notice of Filing withdrawing its Notice of Intent to Establish Additional Dealership, a copy of which is attached and incorporated by reference in this order. The Department hereby adopts the Order Closing File and Relinquishing Jurisdiction as its Final Order in this matter. Accordingly, it is hereby ORDERED that this case is CLOSED and no license will be issued to Genuine Scooters, LLC and Boca Scooters, LLC to sell Genuine Scooters-manufactured by Motive Power Industry Co., Ltd. (MOTI) and LML Limited (LMLL) at 389 Northwest 1 Avenue, Boca Raton (Palm Beach County), Florida 33432. Filed June 19, 2014 7:43 AM Division of Administrative Hearings DONE AND ORDERED this 1 day of June, 2014, in Tallahassee, Leon County, Florida. Filed in the official records of the Division of Motorist Services this day of June, 2014. Wal» On c Nalini Vinayak, Dealer License Administrator Copies furnished to: Nalini Vinayak Dealer License Section Kenneth L. Paretti, Esquire Quinton and Paretti, P.A. 80 Southwest 8" Street, Suite 2150 Miami, Florida 33130 kparetti@quintonparetti.com Trey Duren Genuine Scooters, LLC 5400 North Damen Avenue Chicago, Illinois 60625 Cobur Julie Baker, Chief Bureau of Issuance Oversight Division of Motorist Services Department of Highway Safety and Motor Vehicles Neil Kirkman Building, Room A338 Tallahassee, Florida 32399 Colton Ralston Boca Scooters, LLC 389 Northwest 1st Avenue Boca Raton, Florida 33432 Robert E. Meale Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 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.
The Issue Whether Volkswagen of America, Inc., should be permitted to establish an additional franchised dealership in Broward County, Florida, as more specifically described in the written notice it provided the Department of Highway Safety and Motor Vehicles advising of its intention to establish such a dealership.
Findings Of Fact Based upon the evidence adduced at hearing and the record as a whole, the following findings of fact are made: VWoA is a Florida-licensed importer and distributor of Volkswagen (VW) vehicles. It is a wholly-owned subsidiary of Volkswagen AG (VAG). VAG, which is headquartered in Germany, manufactures VW- brand motor vehicles. On a worldwide basis, it produces more vehicles than any other manufacturer except Ford Motor Company and General Motors Corporation. VWoA distributes to its franchised dealerships in the United States and Canada VW vehicles manufactured by VAG. VWoA establishes annual planning volumes or sales objectives for each of its franchised dealerships (based upon the dealership's past sales performance and other pertinent factors). For the first quarter of each year, VWoA's allocation of vehicles to the dealership is based upon the established planning volume for that dealership. In determining the number of vehicles to allocate to a dealership during the remainder of the year, VWoA takes into consideration the dealership's to-date sales performance for the year in relation to VWoA's expectations (as reflected by the dealership's planning volume previously established for that year). VWoA's franchised dealerships (VW dealerships) in the United States are assigned to one of five regions, each headed by a VWoA regional team leader. VW dealerships in Florida are assigned to the Southeast Region. James Wolter has been the regional team leader for VWoA's Southeast Region since January 1, 1999. Each region, including the Southeast Region, is divided into districts, each headed by a VWoA area executive. The area (defined in terms of zip codes) around each dealership in a district in which the dealership is deemed to have a geographic advantage over other VW dealerships because of the dealership's proximity (in terms of distance by air) to consumers living in that area is referred to by VWoA as the dealership's Primary Area of Influence or PAI. Three digit numbers are used to designate each dealership's PAI. VW dealerships in southeast Florida, from Indian River County (to the north) to Dade County (to the south), are assigned to District 22. Charles Westly has been the area executive of District 22 since January 1, 1999. At present, there are 11 existing VW dealerships located in District 22: Vista Volkswagen, whose PAI is 012; Esserman International, whose PAI is 029; Vero Beach Motorsports, whose PAI is 031; South Motors, whose PAI is 041; Gunther Volkswagen, whose PAI is 073; Stuart Volkswagen, whose PAI is 087; Esserman Volkswagen, whose PAI is 095; Deel Volkswagen, whose PAI is 223; Borton Volkswagen, whose PAI is 237; Palm Beach Volkswagen, whose PAI is 241; and Schumacher Volkswagen, whose PAI is 242. Nine of these 11 dealerships are located in Dade, Broward, or Palm Beach Counties (which, collectively, are also known as the "Miami Metro"). The dealerships located in Dade County are Esserman International, South Motors, Esserman Volkswagen, and Deel Volkswagen. The dealerships located in Palm Beach County are Borton Volkswagen, Palm Beach Volkswagen, and Schumacher Volkswagen. Borton Volkswagen, which is operated by Borton, is located at 2201 North Federal Highway in Delray Beach in southeast Palm Beach County. Palm Beach Volkswagen and Schumacher Volkswagen are located to the north of Borton Volkswagen. The dealerships located in Broward County are Vista Volkswagen and Gunther Volkswagen. Although Broward County presently has fewer VW dealerships than either of the other two counties which comprise the Miami Metro, of the three Miami Metro counties, Broward County is (based on 1998 registration data) the largest market in terms of the sale of new automobiles (of all makes). Vista Volkswagen, which is operated by Vista (an entity owned by Charles Dascal, Larry Hoffman, and Richard Buttafuoco, who also have an ownership interest in the entity that operates South Motors) is located 17.2 miles south of Borton Volkswagen at 700 North Federal Highway in Pompano Beach in northeast Broward County. Vista also operates (out of separate facilities and using a separate sales and service staff) a BMW dealership at this location. Gunther Volkswagen is located 11.4 miles to the southwest of Vista Volkswagen at 1660 South State Road 7 (441) in the Fort Lauderdale/Plantation area. It is operated by Gunther Motor Company of Plantation, Inc. (Gunther Plantation), which prior to July 15, 1999, was known as Gunther Motor Company, and, which prior to 1991, was known as Gunther Volkswagen, Inc. Gunther Plantation also operates (out of separate facilities and using separate sales and service staff) Kia and Mazda dealerships on the 15-acre tract on which Gunther Volkswagen is located. Joseph F. Gunther, Jr. (Mr. Gunther) is the President of Gunther Plantation and its majority (51%) shareholder. The remaining 49% of the shares of the corporation are owned by Mr. Gunther's three sons, Joseph F. Gunther III (16%), John Casey Gunther (Casey Gunther) (16%), and Michael Gunther (17%). The elder Mr. Gunther has had an ownership interest in Gunther Plantation and has been actively involved in the operations of Gunther Volkswagen since 1970. In 1970, when Gunther Volkswagen opened (as the third VW dealership in Broward County), VWoA had annual sales in the United States of 569,292 units, which were made through a dealer network of 1,160 dealerships. 6/ Thereafter, as Japanese imports became increasingly popular, annual sales of new VWs (VW sales) in the United States declined. There was also a decline in the number of VW dealerships in the United States starting in 1973. (The number of VW dealerships in the United States peaked at 1,203 in 1972.) In 1993, VW sales in the United States were 49,533 units, fewer than had been made in any year since 1955. By that year, the nationwide VW dealership network was "pretty fragmented." It consisted of 639 dealerships (564 less than had been in operation in 1972), not all of which were at the "right" locations. In 1993, Dr. Ferdinand Piech (an engineer by profession) became the Chief Executive Officer of VAG. Under his leadership, VAG took measures that significantly improved the quality of the product it manufactured. At the same time, VWoA reorganized its management structure and began the task of rebuilding the VW dealership network in the United States by closing underperforming dealerships, relocating dealerships to better locations, and selectively adding new dealerships in markets where it was either not represented or not adequately represented. In the years subsequent to 1993, VW sales in the United States have rebounded significantly. In 1994, 1995, 1996, 1997, and 1998, VW sales in the United States were 97,043, 115,114, 135,907, 137,885, and 219,679 units, respectively. While VW sales in the United States have increased over this period of time, the number of United States VW dealerships has declined each year. At the end of 1998, there were 600 VW dealerships in the United States, 39 less than in 1993 and 603 less than in 1972. VWoA anticipates that VW sales in the United States will continue to rise. It has a sales objective of 306,000 units for 1999 and 348,000 units for 2000. There has also been, subsequent to 1993, a substantial increase in VW sales by dealerships in what is now District 22 (the District 22 area) and by dealerships in the Miami Metro. In 1993, 1994, 1995, 1996, 1997, and 1998, VW sales by dealerships in the District 22 area totaled 1,226, 2,448, 3,041, 3,913, 4,264, and 7,757 units, respectively, and VW sales by dealerships in the Miami Metro totaled 1,187, 2,351, 2,941, 3,816, 4,236, and 7,648 units, respectively. In the first six months of 1999, VW sales by dealerships in the District 22 area totaled 5,739 units, and VW sales by dealerships in the Miami Metro totaled 5,509 units. In 1998, Gunther Volkswagen sold more VWs than any other dealership in the United States. In terms of the total number of VW sales made during 1998, the other VW dealerships in the Miami Metro ranked 44th (South Motors), 56th (Esserman Volkswagen), 57th (Deel Volkswagen), 61st (Vista Volkswagen), 88th (Palm Beach Volkswagen), 100th (Schumacher Volkswagen), 105th (Borton Volkswagen), and 319th (Esserman International 7/) out of the 600 VW dealerships in the United States. Out of the 170 dealerships in VWoA's Southeast Region, the Miami Metro dealerships' sales rankings for 1998 were as follows: Gunther Volkswagen: 1st; South Motors: 10th; Esserman Volkswagen: 13th; Deel Volkswagen: 14th; Vista Volkswagen: 16th; Schumacher Volkswagen: 22nd; Borton Volkswagen: 24th; and Esserman International: 84th. For the first six months of 1999, three of the Miami Metro dealerships were among the top 50 VW dealerships in the United States in total VW sales. Gunther Volkswagen was number one, with 1,829 VW sales; South Motors was number 17, with 708 VW sales; and Vista Volkswagen was number 44, with 548 VW sales. The increases in VW sales in the District 22 area and the Miami Metro have occurred despite supply shortages of certain popular models with features desired by consumers that have resulted in dealerships creating "waiting lists" for these vehicles (a nationwide problem VWoA and VAG are taking measures to rectify 8/); the absence of a VW dealership in Martin County in 1997 and 1998; and having one less dealership in Broward County since the closing of Arnie Smith Volkswagen in or about July of 1995. Arnie Smith Volkswagen was located in an older facility in a deteriorating area on Sunrise Boulevard in Fort Lauderdale, approximately halfway between Gunther Volkswagen and Vista Volkswagen. In addition to being in a bad location, it suffered from management problems and high employee turnover. As a result, its VW sales were declining. (From January of 1995 through July of 1995, its VW sales were 63 units, 43 less than the number of VW sales it had made during the first seven months of the previous year.) Arnie Smith Volkswagen was bought out by VWoA and Gunther Plantation (which at the time was known as Gunther Motor Company). Vista was asked to participate in the buy-out, but declined to do so. The closing of Arnie Smith Volkswagen left VWoA with two dealerships in Broward County, neither of which was located in the rapidly growing western portion of the county. At the time of the closing of Arnie Smith Volkswagen, VWoA believed that the most prudent course of action was to keep the Broward County VW dealership count at two to allow the two remaining dealerships to "get some meat on their bones." These two dealerships, Gunther Volkswagen and Vista Volkswagen, did enjoy an increase in VW sales after the closing of Arnie Smith Volkswagen. In the first half of 1995, when Arnie Smith Volkswagen was still in business, Gunther Volkswagen and Vista Volkswagen had 571 and 121 VW sales, respectively. In the second half of 1995, when Arnie Smith Volkswagen was no longer selling VWs, Gunther Volkswagen and Vista Volkswagen had 664 and 160 VW sales, respectively. Gunther Volkswagen's VW sales in 1996, 1997, and 1998 were 1,657, 1,657, and 2,565 units, respectively. Vista Volkswagen's VW sales in 1996, 1997, and 1998 were 370, 515, and 722 units, respectively. By late 1996 to early 1997, VWoA determined that the time was right to establish another VW dealership in Broward County and bring its dealership count in the county to three (which is the same number of VW dealerships that VWoA had in the county from 1970 until Arnie Smith Volkswagen went out of business in or about July of 1995). After reviewing vehicle registration and sales data, which reflected that its principal competitors with dealerships in the Coconut Creek area of northwest Broward County were outperforming VWoA in that area, VWoA made the further determination that this third Broward County VW dealership should be located in the Coconut Creek area (which, in 1970, consisted of either swamp or farm land and today is one of the fastest growing areas in the nation, with a population having income characteristics that make it a "great spot to be selling . . . new vehicles"). There has been no showing that VWoA, at any time, attempted to coerce any of the existing VW dealers to consent to the establishment of such an additional VW dealership. After determining to establish an additional VW dealership in the Coconut Creek area, VWoA began looking for an operator for this additional dealership, and it also retained the services of a real estate company, the Core Company (which is now known as Travel Pro), to search for a suitable site in the Coconut Creek area for the dealership. Vista and Gunther Plantation were among the candidates VWoA considered to operate the dealership. VWoA had several conversations about the Coconut Creek market with Vista (which recognized that the Coconut Creek area was a "boom" area with considerable market potential). At no time during these conversations did Vista indicate that it was willing to operate full-scale VW dealerships in both Pompano Beach and the Coconut Creek area. After reviewing the qualifications and credentials of the candidates under consideration, VWoA, exercising reasonable and sound business judgment, determined that the principals of Gunther Plantation (which at the time was third in the nation in the number of VW sales) were best suited to operate the additional VW dealership in the Coconut Creek area. It then entered into negotiations with them. Thereafter, some time before March 18, 1998, Vista approached VWoA and proposed that it be allowed to either relocate its Pompano Beach VW dealership to the Coconut Creek area or operate a full-scale VW dealership in the Coconut Creek area, while maintaining a satellite VW dealership with limited sales, service, and parts facilities (as opposed to a full-scale VW dealership) in Pompano Beach. VWoA rejected both alternatives inasmuch as it had already selected an operator for the Coconut Creek area VW dealership. It does not appear that, in denying Vista the opportunity to operate a VW dealership in the Coconut Creek area, VWoA acted unreasonably; nor is there evidence that VWoA, in any other respect, acted in a manner that unreasonably denied Vista the opportunity to grow and expand its VW dealership. Notwithstanding VWoA's rejection of Vista's proposal, Vista still intends to proceed with plans to relocate its Pompano Beach BMW dealership to the Coconut Creek area, a move that would result in an increase in Vista's operating expenses. In middle to late 1997, VWoA acquired property in the Coconut Creek area for a VW dealership. The property is located on the northeast corner of State Road 7 (441) and Collum Road (Coconut Creek Site), which is in Vista Volkswagen's PAI. The Coconut Creek Site is in an area where existing dealerships representing other major brands (including brands against which the VW brand competes) are clustered. (Such clustering promotes inter-brand competition and makes it more convenient for consumers to shop for automobiles.) There are six such "automobile clusters" in Broward County and southern Palm Beach County, one each in the Delray Beach, the Pompano Beach, the Coconut Creek, the Plantation, the Ft. Lauderdale, and the Hollywood/Davie/Pembroke Pines areas. In 1997, these clusters generated the following new vehicle sales: Delray Beach area cluster: 22,270 units; Pompano Beach area cluster: 28,281 units; Coconut Creek area cluster: 29,602 units; Plantation area cluster: 24,225 units; Ft. Lauderdale area cluster: 16,968 units; and Hollywood/Davie/Pembroke Pines area cluster: 31,449 units. VWoA is presently represented in only three of these six "automobile clusters": the Plantation area cluster (where Gunther Volkswagen is located); the Pompano Beach area cluster (where Vista Volkswagen is located); and the Delray Beach area cluster (where Borton Volkswagen is located). The three existing VW dealerships closest to the Coconut Creek Site are Vista Volkswagen, which is 6.9 miles away, Gunther Volkswagen, which is 12.7 miles away, and Borton Volkswagen, which is 16.3 miles away. (There are existing dealerships in the Coconut Creek area representing brands other than VW (Chevrolet, Dodge, Ford, Lincoln Mercury, Mazda, Mitsubishi, and Toyota) that are 6.9 miles or less from their closest intrabrand competitor.) The driving time between the Coconut Creek Site and Gunther Volkswagen is anywhere between 26 and 40 to 45 minutes (depending on traffic). It takes from approximately 17 minutes to 30 to 35 minutes (depending on traffic) to drive from the Coconut Creek Site east to Vista Volkswagen. East-west movement in Broward County has become increasingly difficult over the years as the western portion of the county has become more densely populated. As a result, consumers in Broward County tend to move in a north-south, rather than an east-west, direction to make their vehicle purchases. On March 16, 1998, after a period of negotiation and the exchange of draft agreements, VWoA sent the following letter of understanding to Mr. Gunther and Casey Gunther: 9/ This letter will summarize our understanding of the actions to which you and Volkswagen of America, Inc. ("VWoA") are prepared to commit to establish a new, exclusive Volkswagen dealership for the Gunther organization ("Gunther") in Coconut Creek, FL. The following bullet points are a recap of our meeting on January 30, 1998, and include the following. In light of what we believe to be the potential growth in this market, it is the intent of VWoA to designate Coconut Creek as an open point and to construct a new dealership facility on the property owned by VWoA in Coconut Creek. While the building architecture will be based on the new Volkswagen Corporate Design guidelines, VWoA agrees to seek your input into the size of the building and land requirements needed to operate the dealership. The actual facility construction costs are estimated to be approximately $100 per square foot, but this may vary depending on local requirements and conditions. VWoA will defend its right to designate Coconut Creek as an open point in the event that another dealer in the market protests VWoA's action. Once the facility is completed, VWoA and Gunther will enter into a lease agreement for the land and building. The annual lease will be negotiated based on the cost to purchase the land used by the dealership, the final facility construction costs and local market value. Prior to entering into a new lease for the Coconut Creek dealership, Gunther will have purchased or entered into an intent to purchase from VWoA the existing Gunther Volkswagen, Inc. 10/ building and real property located in Ft. Lauderdale, FL. 11/ It is understood by both parties that it will take time to establish service and parts business at the new point in Coconut Creek, which business will be an integral part of the Volkswagen operations at that facility. The parties further understand that to establish that business will require sufficient New and Used Vehicle sales volumes to generate a gross profit reasonably sufficient to support the facility lease. Because this will be a new point, and because at this time there is not an established sales rate for the Coconut Creek market, VWoA agrees to establish annual new vehicle planning volumes in the following manner: At a minimum, an annual new vehicle planning volume will equal one percent (1%) of the national retail sales objective for the respective year. By way of example only, if the national new vehicle retail objective for a given year is 200,000 vehicles, the planning volume for Coconut Creek would be 2,000 vehicles. 12/ This method of calculating planning volumes will remain in effect for the first three years of operation of the new Coconut Creek point. After the third year, the dealership's new vehicle planning volume will be calculated in the same manner then used by VWoA to establish the planning volume for every Volkswagen dealer. After the first year of operation, the dealership's annual planning volume may be set at a level higher than the calculated 1% of national retail objective if supported by actual retail sales rates at the dealership. All requirements as delineated in the then current Volkswagen Dealer Agreement, Standard Provisions and Operating Standards shall apply to your appointment as a Volkswagen dealer in Coconut Creek. In the event that Gunther elects not to pursue this opportunity to operate an exclusive Volkswagen dealership in Coconut Creek, then Gunther (a) acknowledges VWoA's intent to designate Coconut Creek as an open point and (b) agrees to waive its right to protest the appointment of another dealer operator in Coconut Creek. As previously mentioned, this letter is intended to confirm issues we discussed in January. If you are in agreement with the above, please sign the attached copy of this letter and return it to me. Once we receive the executed copy, we will file the necessary documents with the city and state to obtain their approvals to move forward with our plans. This is an exciting opportunity for both Volkswagen and the Gunther organization, 13/ and we look forward to working closely with you as we get this project underway. Please feel free to give me a call if you have any questions. Mr. Gunther and Casey Gunther both signed this letter on March 25, 1998, indicating that they "concur[red]" with the representations made in the letter. VWoA customarily makes special arrangements concerning allocation of vehicles, like those set forth in the letter of understanding signed by Mr. Gunther and Casey Gunther, with dealers operating newly created VW dealerships to "get the dealership[s] going." This is a reasonable business practice. Following the execution of this letter of understanding, Debra L. Kingsbury, Esquire, VWoA's attorney, sent the following letter, dated April 2, 1998, to Ronald Reynolds, the Administrator of the Department's Dealer License Section: Dear Mr. Reynolds: Pursuant to the requirements of Florida Statutes, Section 320.642, notice is hereby given that Volkswagen of America, Inc. ("VWoA") intends to establish Gunther Motor Company as a dealership for the sale of Volkswagen vehicles at Block 89, Lots 22 and 23, Coconut Creek, Broward County, Florida 33073. This vacant property is on the northeast corner of State Rd. 441 and Collum Rd. VWoA intends to engage in business with Gunther as a dealership on or after April 1, 1999, assuming that no protest is filed. The dealer(s) of the same line-make vehicles in the county where the new dealership will be located and all counties adjoining that county are as follows: County Palm Beach County Borton Volkswagen 2201 N. Federal Highway Delray Beach, FL 33483 Palm Beach Volkswagen 6870 Okeechobee Blvd. West Palm Beach, FL 33415 Schumacher Automotive 3720 Northlake Blvd. Lake Park, FL 33403 Broward County Vista Volkswagen 700 N. Federal Highway Pompano, Beach, FL 33062 Gunther Volkswagen 1660 S. State Road 7 Ft. Lauderdale, FL 33317 Collier County A+ Car World 601 Airport Pulling Rd. Naples, FL 33942 Dade County Deel Volkswagen 3650 Bird Rd. Miami, FL 33133 South Motors of Dade County 16125 South Dixie Highway Miami, FL 33157 Esserman Volkswagen 16825 NW 57th Ave. Miami, FL 33055 The names and address of the dealer-operator and principal investors of Gunther Motor Company are: Dealer-Operator Joseph F. Gunther, Jr. Principal Investors Joseph F. Gunther, Jr. 1660 S. State Road 7 Ft. Lauderdale, FL 33317 If you have questions or require additional information, please do not hesitate to let me know. To the extent that Ms. Kingsbury's letter reflected that Joseph F. Gunther, Jr., would be the "dealer-operator" of the dealership VWoA proposed to establish in Coconut Creek, the letter was inconsistent with the representations made in the March 16, 1998, letter of understanding VWoA had sent to Mr. Gunther and Casey Gunther that the "dealer-operator" of this proposed dealership would be the entire "Gunther organization" (that is, the corporate entity which was owned by Mr. Gunther and his three sons, each of whom had an ownership interest in excess of 10%). 14/ By letter dated April 22, 1998, Mr. Reynolds notified Ms. Kingsbury that a "notice of publication to establish a franchise for Gunther Motor Company" was "published in the Florida Administrative Weekly on April 17, 1998." A copy of the "notice of publication" was enclosed, and it read as follows: Pursuant to Section 320.642, Florida Statutes, Volkswagen of America, Inc. ("VWoA"), intends to allow the establishment of Gunther Motor Company, as a dealership for the sale of Volkswagen vehicles, at Block 89, Lots 22 and 23. This vacant property is on the northeast corner of State Road 441 and Collum Road, Coconut Creek (Broward County), Florida 33073, on or after April 1, 1999. The name and address of the dealer operator(s) and principal investor(s) of Gunther Motor Company is Joseph F. Gunther, Jr., 1660 S. State Road 7, Fort Lauderdale, Florida 33317. The notice indicates an intent to establish the new point location in a county of more than 300,000 population, according to the latest population estimates of the University of Florida, Bureau of Economic and Business Research. Certain dealerships of the same line-make may have standing, pursuant to Section 320.642, Florida Statutes, to file a petition or complaint protesting the application. Written petitions or complaints must be received by the Department of Highway Safety and Motor Vehicles within 30 days of the date of the publication of this notice and must be submitted to: Mr. Ronald D. Reynolds, Administrator, Dealer License Section, Department of Highway Safety and Motor Vehicles, Room A-312, Neil Kirkman Building, 2900 Apalachee Parkway, Tallahassee, Florida 32399-0635. A copy of such petition or complaint must also be sent by U.S. Mail to: Debra L. Kingsbury, Attorney, Volkswagen of America, Inc., 3800 Hamlin Road, Auburn Hills, MI 48326. If no petitions or complaints are received within 30 days of the date of publication, a final order will be issued by the Department of Highway Safety and Motor Vehicles approving the establishment of the dealership, subject to the applicant's compliance with the provisions of Chapter 320, Florida Statutes. As noted above, in 1998, including the time when Ms. Kingsbury wrote to Mr. Reynolds and when the April 17, 1998, edition of the Florida Administrative Weekly was published, the corporate entity that is now known as Gunther Motor Company of Plantation, Inc., was known as Gunther Motor Company. It was not until July 15, 1999, that its name was changed to its present name. On that same day, July 15, 1999, a new Florida corporation, named Gunther Motor Company and having Mr. Gunther as its sole shareholder, was formed. If an additional VW dealership is established on the Coconut Creek Site (Proposed Dealership), it would be assigned a PAI consisting of zip codes that are now included in the PAIs of existing VW dealerships which are located further away from the centroids of these zip codes than is the Coconut Creek Site. (The Proposed Dealership's PAI will be referred to herein as the "Coconut Creek PAI.") In 1998, 782 new retail VWs were registered in what would have been the Coconut Creek PAI had the Proposed Dealership been in operation that year. (Only Gunther Volkswagen's PAI (with 1642) and Deel Volkswagen's PAI (with 942) had more than 782 new retail VW registrations that year.) Of these 782 vehicles, 327 were sold by Gunther Volkswagen (constituting approximately 13% of its VW sales), 219 were sold by Vista Volkswagen (constituting approximately 30% of its VW sales), and 113 were sold by Borton Volkswagen (constituting approximately 20% of its VW sales). VWoA takes the position in this proceeding that it is not adequately represented in the "community or territory" in which the Proposed Dealership is located. To evaluate the merits of this claim, it is first necessary to identify this "community or territory." VWoA and Vista agree, and the undersigned finds, that the relevant "community or territory" in the instant case (Comm/Terr) consists of the PAIs now assigned to Gunther Volkswagen and Vista Volkswagen (the two existing VW dealerships in Broward County) and to Borton Volkswagen (which is the southernmost VW dealership in Palm Beach County). In 1998, there was a total of 3,371 new retail VWs registered in the Comm/Terr. While there is no dispute regarding the identity of the relevant "community or territory" in the instant case, VWoA and Vista are not in agreement as to the standard that should be used to measure the performance of VWoA's dealership network in the Comm/Terr. Dealership network performance is generally assessed based upon the "market share" or "market penetration" (which are synonymous terms) achieved by the brand in the market in question during the applicable time period, compared to the "market share" or "market penetration" the brand was "reasonably expected" to achieve. ("Market share" or "market penetration" is expressed as a percentage, and it represents a brand's share of the total number of new vehicle registrations in the market.) A "reasonably expected" "market share" or "market penetration" for the VW brand in the Comm/Terr may be determined by: (a) selecting an appropriate comparison market area separate from the Comm/Terr (but preferably in the same local area) where the brand appears not to be inadequately represented; (b) ascertaining the brand’s "market share" or "market penetration" in that comparison market area; and (c) utilizing a process called "segmentation analysis" to account for any differences in consumer preferences and demographic characteristics that may exist between the comparison market area and the Comm/Terr. VWoA suggests, and the undersigned agrees, that it is reasonable and appropriate to assess VWoA's performance in the Comm/Terr by comparing it with VWoA's performance in the PAIs for Schumacher Volkswagen and Palm Beach Volkswagen (Palm Beach PAIs), as segment adjusted (Palm Beach Standard). 15/ The undersigned rejects Vista's contention that, to properly evaluate VWoA's performance in the Comm/Terr, VWoA's "market share" or "market penetration" in the Comm/Terr should be compared, not with the Palm Beach Standard, but "with [VWoA's] average penetration in the U.S. major metros, the Southeast major metros, and the Florida major metros" (Vista's Approach). Vista's Approach does not take into account, or make adjustments for, any consumer preferences, such as import bias, 16/ and demographic characteristics that may distinguish the Comm/Terr from the "average" "metro" market in the United States, in the southeastern United States, and in Florida. Moreover, Vista's Approach fails to take into consideration that VWoA has an incomplete national dealership network and is inadequately represented in various markets included in "the U.S. major metros, the Southeast major metros, and the Florida major metros." As a result, Vista's Approach yields a standard that, unlike the Palm Beach Standard, is too conservative to reflect a "reasonably expected" "market share" or "market penetration" for the Comm/Terr. Employing the Palm Beach Standard (as segment adjusted), the "reasonably expected" "market shares" or "market penetrations" in the Comm/Terr and the Coconut Creek PAI for the VW brand for the years 1995, 1996, 1997, and 1998 were as follows: Comm/Terr: 1995- 1.9%, 1996- 3.5%, 1997- 3.5%, and 1998- 6.2%; and Coconut Creek PAI: 1995- 1.8%, 1996- 3.5%, 1997- 3.4%, and 1998- 6.1%. The actual "market shares" or "market penetrations" in the Comm/Terr and the Coconut Creek PAI for the VW brand for these years were as follows: Comm/Terr: 1995- 2.2% (which was more than "reasonably expected"), 1996- 3.8% (which was more than "reasonably expected"), 1997-3.2% (which was less than "reasonably expected"), and 1998- 5.4% (which was less than "reasonably expected," but more than VWoA's "average penetration in the U.S. major metros [4.6%], the Southeast major metros [4.4%], and the Florida major metros [4.4%]"); and Coconut Creek PAI: 1995- 2.0% (which was more than "reasonably expected"), 1996- 3.2% (which was less than "reasonably expected"), 1997- 2.8% (which was less than "reasonably expected"), and 1998- 4.6% (which was less than "reasonably expected," but the same as "the average penetration in the U.S. major market metros" and more than the "average penetration in the . . . Southeast major metros, and the Florida major metros"). Accordingly, for every full year after 1996, VWoA's "market share" or "market penetration" in the Comm/Terr has been less than "reasonably expected," and for every full year after 1995, VWoA's "market share" or "market penetration" in the Coconut Creek PAI has been less than "reasonably expected." Comparing VWoA's actual versus its "reasonably expected" "market share" or "market penetration" in the Comm/Terr and the Coconut Creek PAI reveals the "retail registration effectiveness" of its dealership network in those markets. The "retail registration effectiveness" of VWoA's dealership network in the Comm/Terr in 1995, 1996, 1997, and 1998 was 119%, 108.1%, 93%, and 87.1%, respectively. The "retail registration effectiveness" of VWoA's dealership network in the Coconut Creek PAI during those years was 111.6%, 93.4%, 84%, and 76.3%, respectively. Accordingly, for every full year after 1995, the last year that VWoA was represented by four dealerships in the Comm/Terr, the "retail registration effectiveness" of VWoA's dealership network in the Comm/Terr and the Coconut Creek PAI has declined. During this period of decline in VWoA's "retail registration effectiveness" in the Comm/Terr and the Coconut Creek PAI, demographic factors in these markets, insofar as retail vehicle sales are concerned, have been favorable. In fact, such sales increased in absolute terms in the Comm/Terr in 1996, 1997, and 1998 (from 1,367 in 1995, to 1,715 in 1996, to 2,341 in 1997, to 3,902 in 1998), but not enough in 1997 and 1998 to meet reasonable expectations with respect to "market share" or "market penetration" (which measures a brand's performance relative to other brands). The likely cause of VWoA's recent "retail registration [in]effectiveness" in the Comm/Terr is the absence of an adequate number of VW dealerships located within its boundaries (which negatively impacts consumer convenience). There are 132 franchised dealerships (of all brands) in the Comm/Terr. Only three (or 2.3%) of these dealerships are VW dealerships. (The Comm/Terr has had only three VW dealerships since the closing of Arnie Smith Volkswagen in or about July of 1995.) In contrast, in the Palm Beach PAIs, 4% of the franchised dealerships are VW dealerships It does not appear that the recent "retail registration [in]effectiveness" in the Comm/Terr has been caused by the supply shortages of VW product (that have led to the creation of "waiting lists" for certain types of VW vehicles) inasmuch as there is no indication that such supply shortages existed only in the Comm/Terr and were not present elsewhere (including, most significantly, in the Palm Beach PAIs). Having identified the cause of VWoA's recent "retail registration [in]effectiveness" in the Comm/Terr as an insufficient number of VW dealerships, the solution to this problem is obvious: the addition of at least another VW dealership in the Comm/Terr. The Coconut Creek area cluster (where the Coconut Creek Site is located) is an appropriate location for this additional dealership. Relocating one of the existing VW dealerships in the Comm/Terr to the Coconut Creek area would not solve the "retail registration effectiveness" problem that VWoA is experiencing in the Comm/Terr inasmuch it would still leave VWoA with an inadequate share of the franchised dealerships in the Comm/Terr. The establishment of an additional VW dealership on the Coconut Creek site would benefit not only VWoA (by increasing its VW sales and enabling it to attain greater "market share" or "market penetration" in the Comm/Terr than it would with just three dealerships in the Comm/Terr). Consumers, particularly those in the Coconut Creek PAI (Coconut Creek consumers), would benefit as well. At present, with three VW dealerships in the Comm/Terr (none of which is located in the Coconut Creek area) Coconut Creek consumers, on the average, have to travel a further distance (8.6 miles) to buy new VWs (or to have their VWs serviced or repaired) than they do to purchase (or have serviced or repaired) vehicles of any of the 27 major brands that are represented in the Coconut Creek PAI. To purchase (or have serviced or repaired) vehicles manufactured by VAG's and VWoA's principal import competitors, Honda, Mitsubishi, Toyota, Mazda, and Nissan, these consumers have to travel, on the average, 4.1, 4.4, 4.4, 4.6, and 4.8 miles, respectively. If the Proposed Dealership is established on the Coconut Creek Site, Coconut Creek consumers would, on the average, be 4.6 miles away from a VW dealership. The establishment of the Proposed Dealership would not only reduce the distance Coconut Creek consumers, on the average, have to travel to get to a VW dealership, it would also increase the number of service stalls available in the Coconut Creek PAI to service and repair VW vehicles. These additional service stalls are badly needed. For example, consumers wanting to have their vehicles serviced or repaired at Gunther Volkswagen (which has 17 service stalls, four more than the number of stalls Vista Volkswagen has that are completely devoted to VW service and repair 17/), must wait, on average, a minimum of two weeks from the time they make an appointment before the dealership is able to service or repair their vehicles. If there is not an increase in the number of service stalls in the area, as VW sales rise, Coconut Creek PAI VW owners seeking to have their vehicles serviced will face even greater delays and resulting inconvenience. Consumers would also benefit from the increase in interbrand competition and intrabrand competition (among VW dealerships) that would occur as a result of the establishment of an additional VW dealership on the Coconut Creek Site. 18/ The benefits VWoA and consumers would derive from the establishment of the Proposed Dealership would not come at the expense of the existing VW dealers in the Comm/Terr, if these existing dealerships were to respond competitively to a new intrabrand competitor in the market. It is reasonable to anticipate that these dealerships would respond in such a competitive manner and that, among other things, they would increase their marketing efforts in the Comm/Terr. Such increased marketing efforts, along with the addition of a fourth VW dealership in the Comm/Terr, would produce an increased awareness of the VW brand, which, given the significant untapped potential of the brand in the Comm/Terr, would enable each of the existing dealerships, including Vista Volkswagen, to increase its VW sales. Indeed, even if the positive impact (of an additional VW dealership in the Comm/Terr) on consumer demand for the VW brand were disregarded, the opportunity (in terms of VW sales) presently available in the Comm/Terr (that is, the opportunity that the existing VW dealerships have not taken advantage of and therefore have "lost," hereinafter referred to as "lost opportunity" would be sufficient to support a fourth VW dealership in the Comm/Terr and, at the same time, allow the three existing VW dealerships to increase their VW sales in the Comm/Terr inasmuch as this "lost opportunity" in the Comm/Terr is significantly greater than the number of VW sales that it is reasonable to expect the Proposed Dealership would make to Comm/Terr consumers. Vista has made a significant investment ($3,311,971.00 as of October 1998) to perform its obligations under its dealer agreement with VWoA (with which it is in substantial compliance). The establishment of the Proposed Dealership, however, would not cause Vista to be deprived of a fair return on its investment, nor would it have "a significant and unfair negative financial impact on Vista," as Vista claims in its Proposed Recommended Order. While it is true that the size of Vista Volkswagen's PAI would be reduced by the addition of a VW dealership on the Coconut Creek Site, having a smaller PAI 20/ would not have any adverse impact on Vista's VW business if Vista were to respond in an effective, competitive manner 21/ and aggressively take advantage of the opportunity that would be available in the Comm/Terr as a whole 22/ (which, as noted above, would be sufficient to support four dealerships), with its efforts being focused upon the geographic areas closest to its dealership. There is no reason to believe that Vista would not be able to respond in such a fashion and offset any loss of Coconut Creek consumer business that it might suffer as a result of the establishment of the Proposed Dealership with an increase in business from consumers residing in its newly configured PAI and in other areas outside of the Coconut Creek PAI. There is no evidence that VWoA has unreasonably denied Vista opportunities for growth within the Miami Metro market. The establishment of the Proposed Dealership appears to be warranted and justified based upon present and anticipated economic and marketing conditions in 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 approving the proposal/application of Volkswagen of America, Inc., to establish an additional dealership in the Coconut Creek area of Broward County. DONE AND ENTERED this 17th day of December, 1999, 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 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 17th day of December, 1999.
Conclusions This matter came before the Department for entry of a Final Order upon submission of an Order Closing File by James H. Peterson, Il, Administrative Law Judge of the Division of Administrative Hearings, pursuant to Respondent’s Notice of Withdrawal, 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 and ADJUDGED that Petitioner, First Coast CIDR LLC, be granted a license for the sale of automobiles of the line-make Dodge (DODG) at 10979 Atlantic Boulevard, Jacksonville (Duval County), Florida 32225, upon compliance with all applicable requirements of Section 320.27, Florida Statutes, and all applicable Department rules. Filed August 6, 2010 3:47 PM Division of Administrative Hearings. DONE AND ORDERED this Yin, of August 2010, in Tallahassee, Leon County, L A. FORD, LES Division of Motor Vehicles Department of Highway Safety and Motor Vehicles Neil Kirkman Building Tallahassee, Florida 32399 Florida. Filed with the Clerk of the Division of Motor Vehicles this day of August 2010. . . Vinayak, 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: C. Everett Boyd, Esquire Nelson Mullins Riley & Scarborough LLP 3600 Maclay Boulevard South, Suite 202 Tallahassee, Florida 32312 Dean Bunch, Esquire Nelson Mullins Riley & Scarborough LLP 3600 Maclay Boulevard South, Suite 202 Tallahassee, Florida 32312 Benjamin C. Moore, Esquire St. Denis & Davey, P. A. 1300 Riverplace Boulevard, Suite 101 Jacksonville, Florida 32207 James H. Peterson, III 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 Respondent knowingly sold rebuilt vehicles without disclosing in writing to the purchaser, customer, or transferee that the vehicles were previously titled as rebuilt vehicles.
Findings Of Fact The Respondent, Charles R. Kuhn, III, is and was at all times relevant to the allegations in the administrative complaint a licensed independent motor vehicle dealer in Florida. The Respondent did business in the name A-1 Auto and Truck Center and was located at 12180-1 Phillips Highway, Jacksonville. The Department is the state agency authorized by statutes to regulate licensed independent motor vehicle dealers and to maintain the titles of motor vehicles in the State of Florida. Pam A. Albritton testified about her experiences buying a vehicle from the Respondent. On August 22, 2003, as reflected by the date on the installment sales contract, Albritton purchased a 2000 Volkswagen (VW), VIN (Vehicle Identification Number) 3 VWSD 29 M1YM 197846, for $8,281.80. The Respondent did not at any time provide Albritton with a written statement that the vehicle she purchased, VIN 3 VWSD 29 M1YM 197846, hereafter the Albritton vehicle or car, was a rebuilt vehicle and had been previously titled as a rebuilt vehicle. The Respondent did not tell Albritton that this vehicle was a rebuilt vehicle. Albritton did not see the certificate of title to the vehicle until after the sale of the vehicle. Albritton took the car to an authorized VW dealer in November of 2003 because it was not shifting gears properly. The dealer found that the vehicle had suffered extreme damage from an accident and needed extensive repairs to the engine control system and the airbag in order to make the car safe to drive. The dealer told Albritton what had been found and advised her not to drive the car until it had been repaired. Albritton confronted the Respondent about the problems with the vehicle, and the Respondent gave her a handwritten "warranty" dated November 20, 2003. Pursuant to this agreement, Albritton took the car to the Respondent to have the seatbelts fixed; however, the repairs did not actually make the belts safe because the seatbelt retractor mechanism would not lock. In December of 2003, the wheel bearings on Albritton's car broke, and she contacted the Respondent about getting the car fixed. She was informed that the Respondent was away for two weeks, and nothing could be done until he returned. Needing her car for transportation in her work, she paid $200 to have the wheel bearings repaired. Pursuant to a mediation agreement, Albritton agreed to settle her complaint against the Respondent on the basis that he would get her a comparable vehicle. The Respondent was supposed to contact Albritton within 30 days of the mediation but failed to do so. The records introduced at hearing show that Albritton's vehicle had been re-titled as a rebuilt vehicle. Such a title indicates that the vehicle in question had been written off as an insurance loss and the original title cancelled or destroyed. Thereafter, the vehicle was repaired, and the person making the repair obtained a new title, which when issued, showed that the vehicle was rebuilt. Aylwin S. Bridges testified regarding his purchase of a VW from the Respondent. On or about June 14, 2003, Aylwin S. Bridges, purchased a 2000 VW, VIN 3 VWTE 29 MXYM 135556, from the Respondent for $11,555.00. Neither prior to nor at the time of the sale did the Respondent provide Bridges a written statement that the 2000 VW, VIN 3 VWTE 29 MXYM 135556, was a rebuilt vehicle. The Respondent did not tell Bridges that the car he was purchasing was rebuilt. The records introduced at hearing show that the Bridges' car had been re-titled as rebuilt. Bridges did not see a certificate of title to the vehicle prior to the sale of the vehicle. The Bridges' vehicle had extensive mechanical problems. For example, the engine control module had been spliced into the car and several codes had been deleted from it; the seat belts would not work; and the horn would not work. When Bridges sought to trade the vehicle, he found that the most he was offered for the car was only $2,500 because it was rebuilt. The Respondent testified in his own behalf. He did not deny having failed to disclose to Albritton and Bridges in writing prior to selling them their cars that the vehicles had previously been titled as rebuilt vehicles. The Respondent introduced a general disclaimer, Respondent's Exhibit 7, which was provided to Albritton and Bridges. This disclaimer states that the purchaser is buying a used car and that used cars may have any one or more of the listed problems. The Respondent testified that he knew the cars were rebuilt, but felt he had complied with the legal requirements of disclosure by providing the buyers with the aforementioned disclaimer. The specifics of the disclaimer are discussed in the Conclusions of Law for purposes of continuity, but are findings of fact.
Recommendation Based upon the foregoing findings of fact and conclusions of law, it is RECOMMENDED: That the Department enter its final order finding that the Respondent violated Section 319.14, Florida Statutes, on two occasions; fine Respondent $1,000 for each violation; and suspend the Respondent's license for six months for each violation, said suspensions to run consecutively, and that payment of the fine be a condition precedent to re-issuance of a license. DONE AND ENTERED this 1st day of February, 2005, in Tallahassee, Leon County, Florida. S STEPHEN F. DEAN 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 February, 2005. COPIES FURNISHED: Charles Patrick Kuhn, III A-1 Auto and Truck Center 12180-1 Philips Highway Jacksonville, Florida 32256 Michael J. Alderman, Esquire Department of Highway Safety and Motor Vehicles Neil Kirkman Building, Suite A432 2900 Apalachee Parkway Tallahassee, Florida 32399 Carl A. Ford, Director Division of Motor Vehicles Department of Highway Safety and Motor Vehicles Neil Kirkman Building, Suite B439 2900 Apalachee Parkway Tallahassee, Florida 32399
Conclusions This matter came before the Department for entry of a Final Order upon submission of an Order Closing File by R. Bruce McKibben, Administrative Law Judge of the Division of Administrative Hearings, pursuant to Petitioner’s request for withdrawal, 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 June 14, 2011 10:27 AM Division of Administrative Hearings DONE AND ORDERED this /O day of June, 2011, in Tallahassee, Leon County, Florida. Sandra C. Lambert, Interim Director Division of Motor Vehicles Department of Highway Safety and Motor Vehicles Neil Kirkman Building Tallahassee, Florida 32399 Filed with the Clerk of the pivisionof Motor Vehicles this_7 day of June, 2011. 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. SCLijdc Copies furnished: John Drier Scoot, Inc. 1819 Wharf Road Sarasota, Florida 34231 Lynnette Pagnini Johnny Pag Com., Inc. 5820 Central Avenue, Unit 230 Riverside, California 92504 R. Bruce McKibben Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399 Nalini Vinayak Dealer License Administrator
The Issue The issue in these cases is whether two applications for new point franchise motor vehicle dealerships filed by Puma Cycles Corporation and Wild Hogs Scooters and Motorsports, LLC (Respondents), should be approved.
Recommendation Based on the foregoing Finding of Facts and Conclusions of Law, it is RECOMMENDED that the Department of Highway Safety and Motor Vehicles enter a final order denying the two applications filed by the Respondents to establish new point franchise motor vehicle dealerships at Wild Hogs Scooters and Motorsports, LLC, for the sale of line-make FSTI motorcycles. DONE AND ENTERED this 22nd day of February, 2012, in Tallahassee, Leon County, Florida. S WILLIAM F. QUATTLEBAUM Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 22nd day of February, 2012.
The Issue Whether the Petitioner's application for a Class 09 04 permit should be approved.
Findings Of Fact On or about August 16, 1999, the Petitioner, Joseph M. Toth, executed an application for a Class 09 04 permit. The application represented that the Petitioner had previously possessed a permit, number 788995000196, and worked for a company identified as Fire Tech Equipment (Fire Tech). A review of the agency's record determined Fire Tech did not possess a valid license subsequent to December 31, 1998. Any work performed by that company subsequent to that time would have been without proper authorization from the Department. All companies in the business of servicing, repairing, recharging, testing, marking, inspecting, or installing any fire extinguisher or pre-engineered system in this state must possess a valid license. All individuals employed by a licensed business must hold a valid permit in order to perform such work. The Petitioner was the only "Joe" employed by Fire Tech subsequent to December 31, 1998. An individual using the Petitioner's expired permit number (and who was identified as "Joe") performed activities requiring licensure for Fire Tech subsequent to December 31, 1998. It is an individual's responsibility to ascertain the status of a permit and to timely renew. The Department does not question the expiration of permits if the holder does not timely renew it. As a former permit holder (and the former qualifier for a licensed business) the Petitioner knew or should have known his responsibilities regarding permit renewal. It is undisputed that Fire Tech continued to perform activities requiring licensure after December 31, 1998, and that the Petitioner was employed by the company. A pending criminal investigation of Fire Tech's unlicensed activities encompasses at least eighty (80) instances of jobs performed without proper authorization. Further, some of the jobs were performed so inexpertly that the client incurred additional expenses in order to correct the work.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Insurance enter a final order denying the Petitioner's permit application. DONE AND ENTERED this 31st day of July, 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 31st day of July, 2000. COPIES FURNISHED: Elenita Gomez, Esquire Department of Insurance Division of Legal Services 612 Larson Building 200 East Gaines Street Tallahassee, Florida 32399-0333 Joseph M. Toth 2420 Hayes Street Hollywood, Florida 33020 Honorable Bill Nelson State Treasurer and Insurance Commissioner Department of Insurance The Capitol, Plaza Level 02 Tallahassee, Florida 32399-0300 Daniel Y. Sumner, General Counsel Department of Insurance The Capitol, Plaza Level 26 Tallahassee, Florida 32399-0307
