The Issue The issue is whether Petitioners are entitled to a motor vehicle dealership that is proposed to be located in Longwood, Florida.
Findings Of Fact Respondent is an existing franchised dealer of motorcycles manufactured by Zhejiang Taizhou Wangye Power Co. Ltd. (ZHEJ). Petitioners have proposed the establishment of a new dealership to sell the same line and make of motorcycles as those sold by Respondent. Respondent's dealership is located at 306 West Main Street, Apopka, Florida 32712. Petitioners' proposed dealership would be located at 821 South Highway 17-92, Suite 101, Longwood, Florida 32750. The proposed dealership is within a 12.5-mile radius of Respondent's dealership. Respondent has standing to protest the establishment of the proposed dealership.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED: That the Department of Transportation enter a final order denying the establishment of Petitioners' proposed franchise. DONE AND ENTERED this 14th day of January, 2009, in Tallahassee, Leon County, Florida. S LAWRENCE P. STEVENSON Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 14th day of January, 2009. COPIES FURNISHED: Electra Theodorides-Bustle, Executive Director Department of Highway Safety and Motor Vehicles Neil Kirkman Building 2900 Apalachee Parkway Tallahassee, Florida 32399-0500 Robin Lotane, General Counsel Department of Highway Safety and Motor Vehicles Neil Kirkman Building 2900 Apalachee Parkway Tallahassee, Florida 32399-0500 Michael J. Alderman, Esquire Department of Highway Safety and Motor Vehicles Neil Kirkman Building, Room A-432 2900 Apalachee Parkway Tallahassee, Florida 32399-0635 David Levison Mega Power Sports, Corp. 921 West International Speedway Boulevard Daytona Beach, Florida 32114 David Levison Mega Powersports Corp. 390 North Beach Street Daytona Beach, Florida 32114 Leo Su Galaxy Powersports, LLC, d/b/a JCL International, LLC 2667 Northhaven Road Dallas, Texas 75229 James Sursely Action Orlando Motorsports 306 West Main Street Apopka, Florida 32712
The Issue The issue in the case is whether an application for a motor vehicle dealer license filed by Lambretta International, LLC, and Retro Unlimited, Inc., should be approved.
Recommendation Based on the foregoing Finding of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Highway Safety and Motor Vehicles enter a final order denying the application for establishment of the motor vehicle dealer franchise at issue in this case. DONE AND ENTERED this 26th day of August, 2008, 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 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 26th day of August, 2008. COPIES FURNISHED: Michael J. Alderman, Esquire Department of Highway Safety and Motor Vehicles Neil Kirkman Building, Room A-432 2900 Apalachee Parkway Tallahassee, Florida 32399-0635 Caroline Khurana Lambretta International, LLC 14339 Lake City Way Northeast Seattle, Washington 98125 Chris Densmore Scooter Escapes, LLC, d/b/a Scooter Escapes 1450 1st Avenue North St. Petersburg, Florida 33705 Edward G. Dreyer, III Retro Unlimited, Inc. 3200 Dr. Martin Luther King, Jr. Street North St. Petersburg, Florida 33704 Carl A. Ford, Director Division of Motor Vehicles Highway Safety and Motor Vehicles Neil Kirkman Building, Room B-439 2900 Apalachee Parkway Tallahassee, Florida 32399-0500 Robin Lotane, General Counsel Highway Safety and Motor Vehicles Neil Kirkman Building 2900 Apalachee Parkway Tallahassee, Florida 32399-0500
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.
The Issue The issue is whether the Petitioners' proposal for a dealer to sell two new lines of motorcycles should be approved.
Findings Of Fact On October 10, 2008, in the Florida Administrative Weekly, Volume 34, Number 41, two separate Notices of Publication for a New Point Franchise Motor Vehicle Dealer in a County of More than 300,000 Population were published. The first notice provided, in relevant part, as follows: Pursuant to Section 320.642, Florida Statutes, notice is given that [Galaxy] intends to allow the establishment of [Treasure Coast] as a dealership for the sale of motorcycles manufactured by Taizhou Zhongneng Motorcycle Co. Ltd. (ZHNG) at 7320 South U.S. 1, Port St. Lucie (St. Lucie County) Florida 34952 on or after September 26, 2008. The second notice provided, in relevant part, as follows: Pursuant to Section 320.642, Florida Statutes, notice is given that [Galaxy] intends to allow the establishment of [Treasure Coast] as a dealership for the sale of motorcycles manufactured by Zhejiang Taizhou Wangye Power Co. Ltd (ZHEJ) at 7320 South U.S. 1, Port St. Lucie (St. Lucie County) Florida 34952 on or after September 26, 2008. On October 16, 2008, Respondent filed the following letters of protest with the Department of Highway Safety and Motor Vehicles: In regards to the intent of [Galaxy] to establish a Taizhou Zhongneng Motorcycle Co. Ltd. (ZHNG) with [Treasure Coast] for the sale of motorcycles at 7320 South U.S. 1, Port St. Lucie, Fl [sic] 34952. This letter represents a written complaint to their application for this dealership, because we already represent said dealership. and In regards to the intent of [Galaxy] to establish a Zhejiang Taizhou Wangye Power Co. Ltd (ZHEJ) with [Treasure Coast] for the sale of motorcycles at 7320 South U.S. 1, Port St. Lucie, Fl [sic] 34952. This letter represents a written complaint to their application for this dealership, because we already represent said dealership. Both letters made the following additional representations: The proposed dealership would be within 20 miles of our dealership, as measured by straight line distance. They are 8.61 miles away per mapquest. The proposed dealership is to be located within the contractual area outlined in our dealer agreement, as we have a 20 mile exclusivity. We have made more than 25% of our retail sales to persons whose registered household addresses are within 20 straight line miles of the proposed dealership during the past 12 month period. By letter dated October 22, 2008, the Department apparently tried to refer this matter to DOAH. For reasons that were not explained, however, this matter was not received at DOAH until it was referred again by letter dated June 3, 2009. The protest filed by Respondent was timely. The parties agreed that the population of St. Lucie County is over 300,000, and that Respondent's dealership is 8.61 miles from the proposed site. Respondent has dealer agreements to sell various lines of motorcycles, including motorcycles manufactured by Zhejiang Taizhou Wangye Power Co., Ltd. (ZHEJ); and motorcycles manufactured by Taizhou Zhongneng Motorcycle Co. Ltd. (ZHNG). At the hearing, Mr. Young agreed that the evidence showed that, as a dealer for Zhejiang Taizhou Wangye Power Co. Ltd. (ZHEJ), Respondent has adequately promoted that line and has made 25 percent or more of its retail sales to household addresses within 12.5 miles of the proposed dealership. At the hearing, Mr. Young said that the only motorcycles at issue were those manufactured by Taizhou Zhongneng Motorcycle Co. Ltd. (ZHNG). Specifically, he questioned whether the line represented sufficient numbers of sales within the territory. Mr. Mourning explained that the ZHNG line was also called ZNEN before 2009. He produced records that confirm that Taizhou Zhongneng Motorcycle Co. Ltd., used ZNEN as the make of its vehicles in 2008. Taken together, his sales records for ZHNG and ZNEN motorcycles demonstrated that he also adequately and successfully represents that line in the territory.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Florida Department of Highway Safety and Motor Vehicles enter a Final Order denying Treasure Coast's applications to become the licensee to sell motorcycles line-makes manufactured by Zhejiang Taizhou Wangye Power Co. Ltd. (ZHEJ); and by Taizhou Zhongneng Motorcycle Co. Ltd. (ZHNG) at the proposed site. DONE AND ENTERED this 2nd day of November, 2009, in Tallahassee, Leon County, Florida. S ELEANOR M. HUNTER 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 2nd day of November, 2009. COPIES FURNISHED: Electra Theodorides-Bustle, Executive Director Department of Highway Safety and Motor Vehicles 4052 Bald Cypress Way, BIN A02 Tallahassee, Florida 32399-1701 Robin Lotane, General Counsel Department of Highway Safety and Motor Vehicles Neil Kirkman Building 2009 Apalachee Parkway Tallahassee, Florida 32399-0500 Guy Young J & F South Florida Investments, Inc. d/b/a Treasure Coast Scooters and Things 7320 South US 1 Port St. Lucie, Florida 34952 Mark Mourning WenMark Inc., d/b/a All The Wheel Toys 1540 Northwest Federal Highway Stuart, Florida 34994 Jennifer Clark, Esquire Department of Highway Safety and Motor Vehicles Neil Kirkman Building, Room A-308 2900 Apalachee Parkway Tallahassee, Florida 32399-0635 Leo Su Galaxy Powersports, LLC, d/b/a JCL International, LLC 2667 Northhaven Road Dallas, Texas 75229
The Issue The issue in these cases is whether an application for motor vehicle dealer licenses filed by SunL Group, Inc., and Auto Stop, Inc., d/b/a Motorsports Depot, should be approved.
Findings Of Fact There was no evidence presented at the hearing to establish that Scooter Depot has a franchise agreement to sell or service Chunl Motorcycle Manufacturing Co. Ltd. (CHUA) motor vehicles, a line-make to be sold by Motorsports Depot. There was no evidence presented at the hearing to establish that Scooter Depot has a franchise agreement to sell or service Shanghai Meitan Motorcycle Manufacturing Co. Ltd. (MEIT) motor vehicles, a line-make to be sold by Motorsports Depot. There was no evidence presented at the hearing that the Scooter Depot dealership is physically located so as to meet the statutory requirements for standing to protest the establishment of the new point franchise motor vehicle dealerships.
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 dismissing the protests filed by Mobility Tech, Inc., d/b/a Charlie's Scooter Depot, in these cases. DONE AND ENTERED this 5th day of March, 2009, 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 5th day of March, 2009. COPIES FURNISHED: Michael James Alderman, Esquire Department of Highway Safety and Motor Vehicles Neil Kirkman Building, Room A-432 2900 Apalachee Parkway Tallahassee, Florida 32344 Mei Zhou SunL Group, Inc. 8551 Ester Boulevard Irving, Texas 75063 Carlos Urbizu Mobility Tech, Inc., d/b/a Charlie’s Scooter Depot 5720 North Florida Avenue, Unit 2 Tampa, Florida 33604 Robert L. Sardegna Auto Shop, Inc., d/b/a Motorsports Depot 17630 US 41 North Lutz, Florida 33549 Carl A. Ford, Director Division of Motor Vehicles Highway Safety and Motor Vehicles Neil Kirkman Building, Room B-439 2900 Apalachee Parkway Tallahassee, Florida 32399-0500 Robin Lotane, General Counsel Highway Safety and Motor Vehicles Neil Kirkman Building 2900 Apalachee Parkway Tallahassee, Florida 32399-0500
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.
The Issue The issue for determination in this proceeding is whether Proposed Rules 15C-7.004(4)(a), (4)(b), and (7)(d) and Florida Administrative Code Rule 15C- 1.008 each constitute an invalid exercise of delegated legislative authority.
Findings Of Fact The Parties The Department of Highway Safety and Motor Vehicles (the "Department") is the agency responsible for promulgating and administering the rules challenged in this proceeding. The Department administers Chapter 320, Florida Statutes, 2/ which governs the operation of motor vehicle dealers and manufacturers in Florida. General Motors Corporation ("GM") is a corporation incorporated in Delaware and registered to do business in Florida. GM's corporate address and principal place of business is 3044 West Grand Boulevard, Detroit, Michigan 48202. GM is licensed by the Department, pursuant to Section 320.60, Florida Statutes, as a manufacturer of motor vehicles. GM has entered into and will enter into dealer sales and service agreements to authorize motor vehicle dealers to sell GM vehicles at locations in Florida. The Florida Automobile Dealers Association (??FADA??) and the South Florida Auto Truck Dealers Association ("SFATDA") are trade associations composed of both domestic and foreign line-make franchised motor vehicle dealers. FADA is composed of more than 800 franchised motor vehicle dealers licensed in the state. SFATDA is composed of virtually all franchised motor vehicle dealers in Palm Beach, Broward, Dade, and Monroe Counties. The Motor Vehicle Manufacturers Association of the United States, Inc. ("MVMA") is a trade association whose member companies manufacture motor vehicles produced in the United States. MVMA members include Chrysler Corporation, Ford Motor Company, GM, Honda of America MFG., Inc., Navistar International Transportation Corporation, PACCAR Inc., and Volvo North America Corporation. The principal place of business for MVMA is 7430 Second Avenue, Suite 300, Detroit, Michigan 48202. All of the members of MVVA, including Ford Motor Company ("Ford"), are licensed pursuant to Section 320.61, Florida Statutes. The Association of International Automobile Manufacturers, Inc. ("AIAM") is a trade association of manufacturers and manufacturer-authorized importers which import motor vehicles for sale in the United States. AIAM members and associates affected by the challenged rules include: American Honda Motor Company, Inc.; America Suzuki Motor Corporation; BMW of North America, Inc.; Daihatsu America, Inc.; Fiat Auto U.S.A., Inc.; Hyundai Motor America; Isuzu Motors America, Inc.; Jaguar Cars, Inc.; Mazda Motor of America, Inc., Mitsubishi Motor Sales of America, Inc.; Nissan North America, Inc.; Peugeot Motors of America, Inc.; Porsche Cars North America, Inc., Rolls-Royce Motor Cars, Inc.; Rover Group USA, Inc.; Saab Cars, USA, Inc.; Subaru of America, Inc.; Toyota Motor Sales, U.S.A., Inc.; Volkswagen of America, Inc., Volvo North America Corporation; and Yugo America, Inc. The principal place of business for AIAM is 1001 19th Street North, Suite 1002, Arlington, Virginia 22209. Each member of AIAM is either licensed as an importer, pursuant to Section 320.61, Florida Statutes, or maintains a contractual relationship with a distributor which is licensed pursuant to Section 320.61. Toyota Motor Sales, U.S.A., Inc. ("Toyota"), for example, is not licensed in the state as an importer. Toyota, however, maintains a contractual relationship with Southeast Toyota, Inc., which is licensed as a distributor for the purpose of marketing motor vehicles in Florida. Hyundai Motor America ("Hyundai") is an importer of motor vehicles. Hyundai's principal place of business is 10550 Talbert Avenue, Fountain Valley, California 92728. Members of MVMA and AIAM, as well as Ford and Hyundai, have entered into and will continue to enter into dealer sales and service agreements to authorize motor vehicle dealers to sell GM vehicles at locations in Florida. Ed Morse Chevrolet of Seminole, Inc. ("Morse") is an applicant for a license as a franchised motor vehicle dealer. The application of Morse was approved after a hearing pursuant to Section 320.642, Florida Statues. Morse's facility, however, is not yet completed and it would be adversely affected by the enforcement of Proposed Rules 15C-7.004(7)(d) and Rule 15C-1.008. The portions of the proposed and existing rules challenged in this proceeding will affect the substantial interests of the parties to this proceeding. The Challenged Rules Proposed Rule 15C-7.004 was published in the Florida Administrative Weekly, Vol. 17, NO. 16, at page 1721, on April 19, 1991 (the "Proposed Rule"). The particular portions of the Proposed Rule challenged in this proceeding are hereinafter identified by the underlining in the quoted portion of the Proposed Rule. Proposed Rule 15C-7.004(4)(a) provides: Application for Reopening or Successor Dealership, or for Relocation of Existing Dealership. If the license of an existing franchised motor vehicle dealer is revoked for any reason, or surrendered, an application for a license to permit the reopening of the same dealer or a successor dealer within twelve months of the license revocation or surrender shall not be considered the establishment of an additional dealership if one of the conditions set forth in Section 320.642(5) is met by the proposed dealer. (emphasis added) Proposed Rule 15C-7.004(4)(b) provides: Application for Reopening or Successor Dealership, or for Relocation of Existing Dealership. An application for change of address by an existing dealer under this section shall be filed on form HSMV 84712, Application For Change of Location (Address) Of Dealer In Motor Vehicles, Mobile Homes or Recreational Vehicles, which is hereby adopted by reference, provided by the Department. The dealer shall indicate which provision of Section 320.642(5) Florida Statutes, if any, it contends exempts the proposed location from consideration as an additional dealership. (emphasis added) Proposed Rule 15C-7.004(7)(d) provides: (7) Hearing and Post-Hearing Procedures. (d) If the proposed additional or relocated dealership is approved construction on the dealership shall begin within 12 months of the date of the final order. The applicant must complete construction and finalize its preliminary application for license within twenty-four months of the date of the final order. This period may be extended by the Department for good cause. (emphasis added) Florida Administrative Code Rule 15C-1.008 provides: Any person who contemplates the establishment of a motor vehicle business for the purpose of selling new motor vehicles, for which a franchise from the manufacturer, distributor or importer thereof is required, shall, in advance of acquiring building and facilities necessary for such an establishment, notify the Director of the Division of Motor Vehicles of his intention to establish such motor vehicle business. Such notice shall be in the form of a preliminary filing of his application for license and shall be accompanied by a copy of any proposed franchise agreement with, or letter of intent to grant a franchise from, the manufacturer, distributor or importer, showing the make of vehicle or vehicles included in the franchise; location of the proposed business; the name or names of any other dealer or dealers in the surrounding trade areas, community or territory who are presently franchised to sell the same make or makes of motor vehicles. Upon receipt of such notice the Director shall be authorized to proceed with making the determination required by Section 320.642, Florida Statutes, and shall cause a notice to be sent to the presently licensed franchised dealers for the same make or makes of vehicles in the territory or community in which the new dealership proposes to locate, advising such dealers of the provisions of Section 320.642, Florida Statutes, and giving them and all real parties in interest an opportunity to be heard on the matters specified in that Section. Such notice need not be given to any presently licensed notice dealer who has stated in writing that he will not protest the establishment of a new dealership which will deal in the make or makes of vehicles to be included in the proposed franchise in the territory or community in which the new dealership proposes to locate. Any such statements or letters of no protest shall have been issued not more than three months before the date of filing of the preliminary application. The Director may make such further investigation and hold such hearing as he deems necessary to determine the questions specified under Section 320.642. A determination so made by the Director shall be effective as to such license for a period of twelve (12) months from the date of the Director's Order, or date of final judicial determination in the event of an appeal, unless for good cause a different period is set by the Director in his order of determination. (emphasis added) Rulemaking authority for Proposed Rule 15C-7.004 is found in Sections 320.011 and 320.27(3), Florida Statues. The law implemented by the proposed rule is found in Sections 320.27 and 320.60-320.70. Rulemaking authority for Florida Administrative Code Rule 15C-1.008 is found in Sections 320.011, 320.27(3), and 320.69. The law implemented by the existing rule is found in Sections 320.27 and 320.642.
The Issue The issue is whether Petitioners are entitled to motor vehicle dealerships that are proposed to be located in Orange County, Florida.
Findings Of Fact Based on the Notices of Publication, Respondent's protest letters which were forwarded to DOAH, and the testimony presented at the final hearing, the following Findings of Fact are made: Respondent is an existing franchised dealer for motorcycles manufactured by Benzhou Vehicle Industry Group Company, Ltd. Petitioners have proposed the establishment of new dealerships to sell the same line-make of motorcycles as those sold by Respondent. Respondent's dealership is located at 3838 John Young Parkway, Orlando, Orange County, Florida. Petitioners' dealerships are proposed to be located in Orange County, Florida, at: 4535 34th Street, Orlando, Florida (Case No. 09-3489); and 2650 West Fairbanks Avenue, Winter Park, Florida (Case Nos. 09-3499 and 09-4750). The proposed dealerships are within a 12.5-mile radius of Respondent's dealership. Respondent has standing to protest the establishment of the proposed dealerships. No evidence was presented showing that Respondent was "not providing adequate representation" of the same line-make vehicles in the community or territory.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Highway Safety and Motor Vehicles enter a final order denying the establishment of Petitioners' proposed franchise dealerships for Case Nos. 09-3489, 09-3499, and 09-4750. DONE AND ENTERED this 12th day of November, 2009, in Tallahassee, Leon County, Florida. S JEFF B. CLARK Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 12th day of November, 2009. COPIES FURNISHED: Electra Theodorides-Bustle, Executive Director Department of Highway Safety and Motor Vehicles Neil Kirkman Building 2900 Apalachee Parkway Tallahassee, Florida 32399-0500 Robin Lotane, General Counsel Department of Highway Safety and Motor Vehicles Neil Kirkman Building 2900 Apalachee Parkway Tallahassee, Florida 32399-0500 Jennifer Clark Department of Highway Safety and Motor Vehicles Neil Kirkman Building, Room A-308 2900 Apalachee Parkway Tallahassee, Florida 32399-0635 Jude A. Mitchell Jude's Cycle Service Post Office Box 585574 Orlando, Florida 32858 Beverly Fox Red Streak Scooters, LLC 427 Doughty Boulevard Inwood, New York 11096 Randy Lazarus Scooter City USA, LLC 4535 34th Street Orlando, Florida 32811 Bobbette Lynott Classic Motorcycles and Sidecars, Inc. Post Office Box 969 Preston, Washington 98050 Lou Ronka Scooter City USA, LLC 2650 West Fairbanks Avenue Winter Park, Florida 32789
The Issue Whether the application of Peace Industry Group (Peace) and Bayside Auto Sales, Inc. (Bayside) to establish an additional franchised dealership for the sale of Astronautical Bashan motorcycles to be located at Bayside Auto Sales, 1301 Harrison Avenue, Panama City, Bay County, Florida, should be granted.
Findings Of Fact Petitioner Peace is a licensed distributor of motor vehicles in Florida and is authorized to sell motor vehicles to its dealers in Florida. Petitioner Bayside is a licensed motor vehicle dealer in Florida and is located at 1301 Harrison Avenue, Panama City, Florida. Respondent Moto is a licensed motor vehicle dealer in Florida and an existing Astronautical Bashan dealer located at 12202 Hutchison Blvd Suite 72, Panama City Beach, Florida. Currently, Moto sells the product line of Peace, including the Astronautical Bashan product line. Additionally, Moto has a franchise agreement with Peace. The agreement establishes a franchise territory with a 25-mile radius around Moto’s location. Petitioner Peace proposes to establish Bayside as a dealership for the sale of Astronautical Bashan motorcycles. The proposed dealership would be within six miles of Moto’s dealership. The two dealerships are located in Bay County and are separated by the Hathaway Bridge. Both draw customers from Bay County, with at least 20 percent of Moto’s customers located within 20 miles of Moto’s location. There was no consumer data or analysis of sales in the motorcycle industry offered into evidence. However, Moto’s franchise agreement with Peace establishes a market area of at least a 25-mile radius from Moto’s location. Bayside clearly is located within Moto’s market area. There was no evidence which demonstrated Peace’s market share in the motorcycle market. There was no evidence presented analyzing the motorcycle market in the Panama City area. Likewise, there was no evidence presented regarding anticipated growth in the market area. This type of evidence is generally presented by the distributor or manufacturer of the product. As indicated, Peace did not appear at the hearing. Given this lack of evidence, the market share for Peace or Astronautical Bashan motorcycles cannot be established. Moreover, a determination that the establishment of a second dealership in the Panama City territory is warranted must be based on the economic and marketing conditions pertinent to dealers competing in the territory. Given this lack of evidence, Petitioners failed to establish that Peace was underrepresented in the Panama City/Bay county area. Since there is no evidence to support the establishment of a second dealership, Petitioners’ application to establish such a dealership should be denied.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Highway Safety and Motor Vehicles enter a final order denying the establishment of Peace's dealership at Bayside, 1301 Harrison Avenue, Panama City, Florida. DONE AND ENTERED this 13th day of February, 2009, in Tallahassee, Leon County, Florida. S DIANE CLEAVINGER Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 13th day of February, 2009. COPIES FURNISHED: Michael James Alderman, Esquire Department of Highway Safety and Motor Vehicles Neil Kirkman Building, Room A-432 2900 Apalachee Parkway Tallahassee, Florida 32344 Larry Bradberry Bayside Auto Sales, Inc. 1301 Harrison Avenue Panama City, Florida 32401 Wayne Wooten Moto Import Distributors, LLC 12202 Hutchison Boulevard, Suite 72 Panama City Beach, Florida 32407 Lily Ji Peace Industry Group, Inc. 6600-B Jimmy Carter Boulevard Norcross, Georgia 30071 Carl A. Ford, Director Division of Motor Vehicles Department of Highway Safety And Motor Vehicles Neil Kirkman Building, Room B-439 2900 Apalachee Parkway Tallahassee, Florida 32399-0500 Robin Lotane, General Counsel Department of Highway Safety And Motor Vehicles Neil Kirkman Building 2900 Apalachee Parkway Tallahassee, Florida 32399-0500
The Issue Whether Gorilla Motor Works, LLC (Gorilla) should be permitted over Petitioner's protest to establish an additional dealership for the sale of motorcycles manufactured by Taizhou Zhongneng Motorcycle Co. Ltd. (ZHNG) at 188 North Federal Highway, Deerfield Beach, Florida 33441 (the proposed location).
Findings Of Fact Petitioner is an existing franchised dealer of ZHNG Motorcycles. Petitioner's dealership is located at 550 North Flagler Avenue, Pompano Beach, Florida. Petitioner's dealership is approximately 7.2 miles from the proposed location. Respondents offered no evidence that Petitioner has failed to adequately represent ZHNG.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Florida Department of Highway Safety and Motor Vehicles enter a Final Order denying the request to establish a new ZHNG dealership at the proposed location. DONE AND ENTERED this 7th day of December, 2011, in Tallahassee, Leon County, Florida. CLAUDE B. ARRINGTON 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 7th day of December, 2011.
