The Issue Pursuant to Subsection 320.641(3), Florida Statutes (2006),1 the issues in the case are whether Nissan North America, Inc.'s (Respondent), proposed termination of the dealer agreement with Classic Nissan, Inc. (Petitioner), was clearly permitted by the franchise agreement, undertaken in good faith, undertaken for good cause, and based on material and substantial breach of the dealer agreement; and whether the grounds relied upon for termination have been applied in a uniform and consistent manner.
Findings Of Fact Pursuant to definitions set forth at Section 320.60, Florida Statutes, the Petitioner is a "motor vehicle dealer" and the Respondent is a "licensee." In 1997, the Petitioner and the Respondent entered into an agreement whereby the Petitioner took control of an already- existing Nissan dealership located in Orlando, Florida. In 1999, the Petitioner and the Respondent entered into a Dealer Sales and Service Agreement (Dealer Agreement), which is a "franchise agreement" as defined at Subsection 320.60(1), Florida Statutes. The Respondent's proposed termination of the 1999 Dealer Agreement is at issue in this proceeding. At all times material to this case, the dealership has been owned by Classic Holding Company. Classic Holding Company is owned by four members of the Holler family. Christopher A. Holler is identified in the Dealer Agreement as the principal owner and the executive manager of the dealership. The family owns a number of other dealerships, representing a variety of auto manufacturers. The Respondent does not sell cars at retail to individual purchasers. Standard Provision Section 3.A. of the Dealer Agreement requires that the Petitioner "actively and effectively promote" vehicle sales to individual retail purchasers. Standard Provision Section 3.B. of the Dealer Agreement permits the Respondent to develop and select the criteria by which sales are measured, as long as the measurement criteria is reasonable. Standard Provision Section 12.B.1.a. of the Dealer Agreement permits the Respondent to terminate a dealership when a dealer fails to substantially meet its vehicle sales obligation. The Dealer Agreement includes examples of various criteria that may be used to measure dealer performance. Specifically included among the examples is the calculation of a dealer's "sales penetration" within a defined geographic "Primary Market Area" (PMA) around the dealership as compared to other local and regional dealers. Sales penetration is calculated by dividing a dealer's total new vehicle sales by the number of competitive new vehicles registered in the dealer’s PMA. Data related to vehicle registration was compiled by R. L. Polk (Polk), a nationally recognized organization commonly relied upon in the auto industry for such information. There was no evidence offered to suggest the Polk data was incorrect. The dealer's sales penetration is compared to Nissan's regional sales penetration to determine the dealer's sales performance as measured against other Nissan dealer's in the region. A dealer performing at 100 percent of the regional average is performing at an "average" level. Otherwise stated, an average dealer is performing at a "C" level. The use of sales penetration calculations as a measurement of dealer performance is common in the automotive industry. The Respondent has used sales penetration as a measurement of dealer sales performance for more than 20 years. The Respondent's use of sales penetration as a measurement of dealer performance was reasonable or was permitted by the specific terms of the Dealer Agreement. The Respondent's use of the sales penetration measurements was widely communicated to dealers, who were advised on a routine basis as to the performance of their dealerships compared to local dealers and on a regional basis. The Petitioner knew, or should have known, that sales penetration was being used to measure the Petitioner's sales performance. There was no credible evidence presented at the hearing that the Respondent calculated sales penetration in order to disadvantage the Petitioner relative to other Nissan dealers in the region. At the hearing, the Petitioner suggested alternative standards by which sales performance should be reviewed, including consideration of total sales volume. The use of sales volume to measure retail effectiveness would penalize dealerships in smaller markets and fail to reflect the market opportunity available to each dealer. There was no credible evidence presented at the hearing that total sales volume more accurately measured the Petitioner's sales performance than did sales penetration. The Petitioner suggested that the use of sales penetration to substantiate the proposed termination of the Dealer Agreement at issue in this case was unreasonable and unfair because approximately half of Nissan's dealerships will be performing below 100 percent of the regional average at any given time, yet the Petitioner has not proposed termination of dealership agreements with half of its dealer network; however, the proposed termination at issue in this case is not based merely on the Petitioner's sales penetration. In 2002, the Petitioner's sales penetration was 110.5 percent, well above the regional average. At that time, the Respondent was preparing to introduce a number of new vehicles to the market. Some of the new vehicles were revisions of previous models, while others were intended to compete with products against which Nissan had not previously competed. Nissan representatives believed that the new models would substantially expand sales opportunities for its dealerships, and they encouraged their dealer network to prepare for the new environment. Some dealers responded by increasing staff levels and modernizing, or constructing new facilities. The Petitioner failed to take any substantive action to prepare for the new model lineup. Beginning in 2003, and continuing throughout the relevant period of this proceeding, the Petitioner's regional sales penetration went into decline. From 2002 to 2003, the Petitioner's annualized sales penetration fell more than 30 points to 85.13 in 2003. The Petitioner's sales penetration for 2004 was 65.08 percent. The Petitioner's sales penetration for the first quarter of 2005 was 61.78 percent. Following the introduction of the new models and during the relevant period of this proceeding, regional Nissan sales increased by about 40 percent. By 2004, the average Nissan dealer in the Petitioner's region had a sales penetration of 108.8 percent of the regional average. Through the first quarter of 2005, the average dealer in the region had a sales penetration of 108.6 percent of the regional average. Compared to all other Florida Nissan dealers during the relevant period of this proceeding, the Petitioner was ranked, at its best, 54th of the 57 Florida Nissan dealerships and was ranked lowest in the state by January 2005. Every Florida Nissan dealership, other than the Petitioner, sold more new cars in 2004 than in 2002. The Petitioner sold 200 fewer vehicles in 2004 than it had two years earlier. The three other Orlando-area Nissan dealers experienced significant sales growth at the same time the Petitioner's performance declined. The Petitioner has suggested that the Respondent failed to provide the information to appropriate management of the dealership. The Dealer Agreement indicated that Christopher A. Holler was the executive manager of the dealership; however, his address was located in Winter Park, Florida, and he did not maintain an office in the dealership. The Respondent's representatives most often met with managers at the dealership, who testified that they communicated with Mr. Holler. On several occasions as set forth herein, Nissan representatives met with Mr. Holler for discussions and corresponded with him. There was no credible evidence presented at the hearing that the Petitioner was unaware that its sales penetration results were declining or that the Petitioner was unaware that the Respondent was concerned with the severity of the decline. The Respondent communicated with the Petitioner on a routine basis as it did with all dealers. As the Petitioner's sales performance declined, the Respondent communicated the monthly sales report information to the Petitioner, and the topic of declining sales was the subject of a continuing series of discussions between the parties. In February 2003, Tim Pierson, the Respondent's district operations manager (DOM), met with the Petitioner's on- site manager, John Sekula, and discussed the dealership's declining sales penetration. Mr. Sekula was subsequently transferred by the ownership group to another auto manufacturer's dealership. In August 2003, Mr. Pierson met with the Petitioner's new manager, Darren Hutchinson, as well as with a representative from the ownership group, to discuss the continuing decline in sales penetration, as well as an alleged undercapitalization of the dealership and the lack of an on-site executive manager with authority to control dealership operations. On October 1, 2003, the Respondent issued a Notice of Default (NOD) charging that the Petitioner was in default of the Dealer Agreement for the failure to "retain a qualified executive manager" and insufficient capitalization of the dealership. In December 2003, Mr. Pierson met with Christopher A. Holler to discuss the dealership's problems. By the time of the meeting, Mr. Hutchinson had been designated as the executive manager, although Mr. Hutchinson's decision-making authority does not appear to have extended to financial operations. During that meeting, based on the Petitioner's failure to meet the capitalization requirements and respond to the deterioration in sales, Mr. Pierson inquired as to whether the Petitioner was interested in selling the dealership, but Mr. Pierson testified without contradiction that Mr. Holler responded "no." Mr. Hutchinson explained at the hearing that he asked the question because there was little apparent effort being made to address the deficiencies at the dealership, and he was attempting to ascertain the Petitioner's intentions. Mr. Hutchinson was directed to prepare a plan to address the Petitioner's customer service rating, which had fallen to the lowest in the area. Based on an apparent belief that the ownership group was going to remedy the Respondent's concerns about capitalization, the Respondent extended the compliance deadline set forth in the NOD, but the extended deadline passed without any alteration of the dealership's capitalization. A letter to the Respondent dated March 25, 2004, allegedly from Mr. Holler, noted that sales and customer service scores had improved; however, there was no credible evidence presented during the hearing to support the claimed improvement in either sales or customer service. The letter also stated that the capitalization of the dealership would be increased in April 2004 and that new vehicle orders were being reduced. On March 19, 2004, Mr. Pierson spoke with Mr. Holler and believed, based on the conversation, that a meeting would be scheduled to discuss the sales and capitalization issues. In anticipation of the meeting, Pierson sent the sales penetration reports directly to Mr. Holler, but the meeting did not occur. There was no additional capital placed into the dealership during April 2004. In April 2004, Andy Delbrueck, a new DOM for the area, met with Mr. Hutchinson to discuss the continuing decline in sales penetration through the end of March 2004. Other dealers in the area were experiencing increased sales at this time, but the Petitioner's regional sales penetration continued to decline and was below the region for almost all Nissan models. Mr. Hutchinson advised that he was hiring additional staff and had sufficient advertising funds to return the regional sales penetration averages by June. In early May 2004, Mr. Delbrueck and a Nissan vice president, Patrick Doody, sent a letter about the Petitioner's declining sales performance to Mr. Holler and requested that the Petitioner prepare a plan to address the problem. On May 18, 2004, Mr. Delbrueck again met with Mr. Hutchinson and discussed the decline in sales performance and customer service scores, as well as the issue of the dealership's undercapitalization. A May 25, 2004, letter to the Respondent, allegedly from Mr. Holler, noted that the dealership's sales penetration had improved, that additional staff had been hired, and that the Petitioner anticipated reaching or exceeding the regional sales penetration average by the end of the third quarter of 2004. The Petitioner never reached regional sales penetration averages following this letter, and, at the time it was written, there had been no material improvement in the dealership's sales penetration. On June 17, 2004, Mr. Delbrueck met with Mr. Holler to discuss the continuing decline in the Petitioner's sales performance. Mr. Delbrueck believed, based on the meeting, that Mr. Holler was aware of the problem and would make the changes necessary to improve sales, including employing additional sales staff. On July 7, 2004, the Respondent issued an Amended NOD, citing the continuing decline in the Petitioner's sales performance as grounds for the default, in addition to the previous concerns related to capitalization that were identified in the earlier NOD. The Amended NOD established a deadline of November 29, 2004, by which time the cited deficiencies were to be remedied. One day later, Mr. Delbrueck met with Mr. Hutchinson, discussed the Amended NOD, and made various suggestions as to how the Petitioner could improve the dealership's sales, including marketing and staffing changes. Mr. Delbrueck also offered to send in a trained Nissan representative, William Hayes, to review dealership operations and provide suggestions to improve conditions at the facility and ultimately to increase car sales. Mr. Hutchinson accepted the offer. A letter to the Respondent dated July 23, 2004, allegedly from Christopher A. Holler, noted that staffing levels had increased as had sales for the month of July; however, there was no credible evidence presented at the hearing that any substantive increase in staffing had occurred or that the Petitioner's sales penetration had increased. The letter contained no specific plan for remedying the problems cited in the Amended NOD. In late July 2004, a Nissan training representative, William Hayes, performed a focused review of the Petitioner's operations and provided a list of specific recommendations intended to improve the Petitioner's sales performance. He met with Mr. Hutchinson at the dealership and discussed the list of recommendations. At that time, Mr. Hutchinson stated that he believed the recommendations were useful. On September 10, 2004, Nissan Vice President Doody sent another letter to Mr. Holler referencing the Petitioner's declining sales performance and, again, requesting that the Petitioner prepare a plan to address the issue. A September 30, 2004, letter to the Respondent, allegedly from Mr. Holler, noted that staffing levels had been increased, a new executive manager (Mr. Hutchinson) had been hired, advertising funds had been increased, and customer service scores had improved. However, by that time, Mr. Hutchinson had been employed at the dealership since at least August of 2003, and there was no credible evidence presented at the hearing that staffing levels, advertising funds, or customer satisfaction scores had been materially increased. On October 18, 2004, Nissan Vice President Doody, sent another letter to Mr. Holler about the Petitioner's declining sales performance, noting that whatever efforts had been made by the Petitioner to improve sales had been unsuccessful. Thereafter, Mr. Doody arranged a meeting with Mr. Delbrueck, Mr. Holler, and another member of the Holler family to discuss the deteriorating situation at the dealership and between the parties. The meeting occurred on October 26, 2004, during which the Nissan representatives addressed the issues including under- capitalization, declining sales, and customer satisfaction scores. The Nissan representatives noted the Petitioner's failure to respond to any of the continuing problems and advised the Petitioner that, if the situation did not improve, the Respondent could initiate proceedings to terminate the Dealer Agreement. At the hearing, the Nissan representatives testified that the Holler family members in attendance at the October 26th meeting had no response during the discussion and offered no specific plan to resolve the situation. The Petitioner presented no credible evidence to the contrary. Shortly after the meeting, and in the absence of any substantive attempt by the Petitioner to resolve the concerns set forth in the NODs, the Nissan representatives decided to pursue termination of the Dealer Agreement if the Petitioner's sales penetration continued to be unsatisfactory. The Petitioner's regional sales penetration as of November 2004 was 65.69 percent. The year-end sales penetration for 2004 was 64.5 percent of regional average. On January 7, 2005, Mr. Delbrueck met with Mr. Hutchinson to discuss the dealership's sales performance. By that time, more than a year had passed since Mr. Hutchinson's designation as executive manager, yet the dealership's sales performance had not improved. Mr. Delbrueck inquired as to whether the Petitioner would be interested in using an additional Nissan resource (the EDGE program) designed to identify specific deficiencies in the sales process. The EDGE program included an extensive review of the sales process from the customer perspective, including a six-month survey period and four hidden camera "mystery shopper" visits. There was a charge to dealers participating in the EDGE program. Mr. Hutchinson told Mr. Delbrueck that he would have to discuss the program with the owners. The Petitioner subsequently chose not to participate. During the January 7th meeting, Mr. Delbrueck also encouraged Mr. Hutchinson to hire additional sales staff. At the hearing, Mr. Hutchinson testified that at the time of this meeting, he had been "building a sales force" yet by March of 2005, the Petitioner's full-time sales staff was approximately one-half of what it had been in 2003. On February 11, 2005, Mr. Delbrueck met with Mr. Hutchinson and Holler family members to follow up on the NOD and the October 26th meeting, but made no progress towards resolving the problems. On February 23, 2005, Mr. Delbrueck and Mr. Hayes met with Mr. Hutchinson to follow up on the recommendations Mr. Hayes made in July 2004. Mr. Hutchinson continued to state that the recommendations were useful, but very few had been implemented, and he offered no plausible explanation for the delay in implementing others. On February 24, 2005, the Respondent issued a Notice of Termination (NOT) of the Dealer Agreement that set forth the continuing decline in sales penetration as grounds for the action, as well as the alleged undercapitalization. At some point in early 2005, the Petitioner increased the capitalization of the dealership and corrected the deficiency, although it was implied during the hearing that the correction was temporary and that the increased capital was subsequently withdrawn from the dealership. In any event, the Respondent issued a Superceding NOT on April 6, 2005, wherein capitalization was deleted as a specific ground for the proposed termination. The Petitioner's January 2005 sales penetration was 49.3 percent of regional average, the lowest of any Nissan dealer in the State of Florida. Consumers typically shop various automobile brands, and a consumer dissatisfied with a dealer of one brand will generally shop dealers of competing brands located in the same vicinity, in order to purchase a vehicle at a convenient dealership for ease of obtaining vehicle service. The Respondent asserted that it was harmed by the Petitioner's deteriorating sales performance because Nissan sales were "lost" to other manufacturers due to the Petitioner's failure to appropriately market the Nissan vehicles. The Petitioner asserted that because Nissan's overall sales performance in the Petitioner's PMA was average, no Nissan sales were lost. The Respondent offered testimony suggesting that sales lost to Nissan may not have been lost to the Holler ownership group because the group also owned nearby Mazda and Honda dealerships. The evidence regarding the calculation of lost Nissan sales was sufficiently persuasive to establish that Nissan was harmed by the Petitioner's inadequate vehicle sales volume and by the Petitioner's failure to meet its obligation to "actively and effective promote" the sale of Nissan vehicles to individual purchasers as required by the Dealer Agreement. The number of sales lost is the difference between what a specific dealer, who met regional sales averages, should have sold compared to what the dealer actually sold. In 2003, the Respondent lost 185 sales based on the Petitioner's poor sales performance. In 2004, the Respondent lost 610 sales based on the Petitioner's poor sales performance, 200 more lost sales than from the next poorest performing Nissan dealer in Florida. The parties offered competing theories for the Petitioner's declining performance, which are addressed separately herein. The greater weight of the evidence presented at the hearing establishes that as set forth herein, the Respondent's analysis of the causes underlying the Petitioner's poor sales performance was persuasive and is accepted. The Respondent asserted that the sales decline was caused by operational problems, including an inadequate facility, inadequate capitalization, poor management, ineffective advertising, inadequate sales staff, and poor customer service. Competing dealerships in the area have constructed improved or new facilities. Customers are more inclined to shop for vehicles at modern dealerships. Upgraded dealerships typically experience increased customer traffic and sales growth. The Petitioner's facility is old and in disrepair. Some dealership employees referred to the facility as the "Pizza Hut" in recognition of the sales building's apparent resemblance to the shape of the restaurant. Nissan representatives discussed the condition of the facility with the Petitioner throughout the period at issue in this proceeding. When the Respondent began preparing for the introduction of new models in 2002, the Respondent began to encourage dealerships including the Petitioner, to participate in the "Nissan Retail Environment Design Initiative" (NREDI), a facility-improvement program. Apparently, the Petitioner was initially interested in the program, and, following a design consultation with the Respondent's architectural consultants, plans for proposed improvements to the Petitioner's facility were created. At the time, the Respondent was encouraging dealers to improve facilities, the Respondent had a specified amount of funding available to assist dealers who chose to participate in the NREDI program, and there were more dealers interested than funds were available. Although funds were initially reserved for the Petitioner's use, the Petitioner declined in June of 2003 to participate in the program, and the funds were reallocated to other dealerships. The Respondent implied that one of the reasons the Petitioner did not upgrade the dealership facility was a lack of capitalization. The allegedly inadequate capitalization of the dealership was the subject of continuing discussions between the Petitioner and the Respondent for an extended period of time; however, inadequate capitalization was specifically deleted from the grounds for termination set forth in the NOT at issue in this proceeding. Although the evidence indicates that lack of capitalization can limit a dealer's ability to respond to a multitude of problems at a dealership, the evidence is insufficient to establish in this case that an alleged lack of capitalization was the cause for the dealership's failure to upgrade its facility. In a letter to the Respondent dated June 30, 2003, the Petitioner stated only that it was "not feasible" to proceed and indicated an intention only "to proceed in the future," but offered no additional explanation for the lack of feasibility. Similarly, it is not possible, based on the evidence presented during the hearing, to find that Petitioner's failure to respond to the deteriorating operations at the dealership was due to a lack of financial resources. Daily operations at the dealership were hampered by the lack of appropriate management at the dealership location. Although Mr. Holler was identified in the Dealer Agreement as the principal owner and the executive manager of the dealership, his address was located in Winter Park, Florida, and there was no credible evidence presented that he managed the operation on a daily basis. As sales deteriorated, the Respondent began to insist that the Petitioner designate someone located on-site at the facility as executive manager with full control over the day-to- day operations of the dealership. In June 2003, Mr. Sekula was appointed as executive manager, but his authority was limited and his decisions required approval of the ownership group. At the hearing, Mr. Sekula acknowledged that the ownership group was bureaucratic. Shortly after his appointment, he was transferred by the ownership group to another of their competing dealerships. Several months later, Mr. Hutchinson was appointed as executive manager. There was no credible evidence presented to establish that Mr. Hutchinson ran the fiscal operations of the dealership. He prepared budgets for various expenditures and submitted them to the ownership group. The ownership group apparently controlled the "purse strings" of the dealership. There was no credible evidence presented as to the decision- making process within the group; however, decisions on matters such as the dealership's advertising budget required approval of the ownership group. The failure to provide appropriate on-site management can delay routine decisions and negatively affect the ability to manage and motivate sales staff. For example, when Nissan offered Mr. Hutchinson the opportunity to participate in the Nissan EDGE sales program, Mr. Hutchinson was initially unable to respond, because he lacked the ability to commit the financial resources to pay for the program. Mr. Hutchinson testified that the ownership group routinely approved his advertising budget requests. As the Petitioner's sales declined, so did advertising expenditures, from $694,107 in 2002 to $534,289 in 2004. The Petitioner's declining advertising expenditures were a contributing factor in deteriorating sales. The Petitioner reduced its total advertising budget while the Orlando market was growing, and the Petitioner's sales penetration declined while competing dealerships sales increased. Additionally, the Petitioner did not monitor the effectiveness of its advertising. The Petitioner's advertising was implemented through "Central Florida Marketing," a separate company owned by the Holler organization. There is no evidence that either the Petitioner or Central Florida Marketing monitored the effectiveness of the advertising. A substantial number of Nissan buyers within the Petitioner's PMA purchased vehicles from other dealerships, suggesting that the advertising failed to attract buyers to the Petitioner's dealership. Only eight percent of the Petitioner's customers acknowledged seeing the Petitioner's advertising, whereas about 20 percent of car shoppers in the Orlando area admit being influenced by dealer advertising. The Respondent asserted that the Petitioner failed to have sufficient sales staff to handle the increased customer traffic precipitated by the introduction of new Nissan models in 2002 and 2003. The Respondent offered evidence that the average vehicle salesperson sells eight to ten cars monthly, five to six of which are new cars and that, based on sales expectations, the Petitioner's sales force could not sell enough cars to meet the regional averages. Although the evidence establishes that the Petitioner cut sales staff as sales declined at the dealership, there is no credible evidence that customers at the Petitioner's facility were not served. The assertion relies upon an assumption that the Petitioner experienced increased sales traffic upon the introduction of new models and that the sales staff was inadequate to sufficiently service the increased traffic. The evidence failed to establish that the Petitioner experienced an increase in sales traffic such that sales were lost because staff was unavailable to assist customers. However, the Petitioner's sales staff failed to take advantage of customer leads provided to the dealership by the Respondent. The Respondent gathered contact information from various sources including persons who requested vehicle information from the Respondent's internet site, as well as the names of lease customers whose lease terms were expiring. The contact information was provided to dealers without charge through the Respondent's online dealer portal. The Petitioner rarely accessed the data, and it is, therefore, logical to presume that the leads resulted in few closed sales. The Petitioner's customer satisfaction scores also declined during the time period relevant to this proceeding. Poor customer service can eventually influence sales as negative customer "word-of-mouth" dampens the interest of other prospective customers. The Respondent monitored the customer opinions of dealer operations through a survey process, which resulted in "Customer Service Index" (CSI) scores. Prior to 2003, the Petitioner's CSI scores had been satisfactory, and then CSI scores began to decline. By the close of 2003, the CSI scores were substantially below regional scores, and the sales survey score was the lowest in the Petitioner's district. Although the Petitioner asserted on several occasions that CSI scores were increasing, the evidence established that only the March 2004 CSI scores improved and that no other material improvement occurred during the time period relevant to this proceeding. The Petitioner asserted at the hearing that the sales performance decline was caused by a lack of vehicle inventory, the alteration of the Petitioner's PMA, a lack of available financing from Nissan Motors Acceptance Corporation (NMAC), hurricanes, improper advertising by competing dealers, and the death of Roger Holler, Jr. The Petitioner also asserted that this termination action is being prosecuted by the Respondent because the Petitioner declined to participate in the NREDI dealer-facility upgrade program and declined to sell the Respondent's extended service plan product. A number of the suggested causes offered by the Petitioner during the hearing were omitted from the Petitioner's Proposed Recommended Order, but nonetheless are addressed herein. The Petitioner asserted that the Respondent failed to make available marketable inventory sufficient for the Petitioner to meet sales penetration averages. The evidence failed to support the assertion. Nissan vehicles were distributed according to an allocation system that reflected dealer sales and inventory. The Respondent used a "two-pass" allocation system to distribute 90 percent of each month's vehicle production. The remaining 10 percent were reserved for allocation by Nissan market representatives. Simply stated, dealers earned new vehicles to sell by selling the vehicles they had. New vehicle allocations were based upon each dealer's "days' supply" of cars. The calculation of days' supply is essentially based on the number of vehicles a dealer had available on the lot and the number of vehicles a dealer sold in each month. Through the allocation system, a dealership that failed to sell cars and lower its days' supply would be allocated fewer cars during the following month. More vehicles were made available to dealers with low days' supplies than were available to dealers with higher supplies. It is clearly reasonable for the Respondent to provide a greater supply of vehicles to the dealers who sell more cars. At some point during the period relevant to this proceeding, Nissan removed consideration of sales history from the days' supply-based allocation system calculation; however, there was no credible evidence presented to establish that the elimination of the sales history component from the calculation reduced the vehicle allocation available to the Petitioner. The Respondent applied the same allocation system to all of its dealerships, including the Petitioner. There is no evidence that the Respondent manipulated the allocation system to deny any vehicles to the Petitioner. The Respondent provided current inventory and allocation information to all of its dealerships, including the Petitioner, through a computerized database system. The Petitioner was responsible for managing vehicle inventory and for utilizing the allocation system to acquire cars to sell. Although the Petitioner asserted that the decline in sales was related to a lack of vehicle inventory, there was no evidence that the Petitioner's inventory declined during the period relevant to this proceeding. In fact, the evidence established that the Petitioner's inventory actually increased from 150 vehicles in early 2003 to 300 vehicles in early 2004, at which time the Petitioner reduced vehicle orders and the inventory began to decline. The Petitioner also asserted that it was provided vehicles for sale that were undesirable to the Petitioner's customers, due to expensive or excessive options packages. There was no credible evidence that the Petitioner's sales declines were related to an inventory of undesirable vehicles. Further, there was no evidence that the decline in sales penetration was related to poor supply of any specific vehicle model. Other than two truck models, the Petitioner's sales penetration decline occurred across the full range of Nissan vehicles offered for sale. Every Nissan dealer had the ability to exercise significant control (including color and option package choices) over most of the inventory acquired during the "first pass" allocation. Any inventory deficiencies that may have existed were the result of the Petitioner's mismanagement of inventory. Mr. Hutchinson did not understand the vehicle allocation system or its relationship to the days' supply calculation. The Petitioner routinely declined to order units of Nissan's apparently most marketable vehicles during the allocation process. During 2003, the Petitioner declined 137 vehicles from the "first pass" allocation, including 18 Sentras and 56 Altimas, and declined 225 vehicles from the "second pass" allocation, including 59 Sentras and 59 Altimas. During the first half of 2004, the Petitioner declined 58 vehicles from the "first pass" allocation and 42 vehicles from the "second pass" allocation. During the hearing, one of the Petitioner's witnesses generally asserted that the Respondent's turndown records were erroneous; however, the witness was unable to identify any errors of significance, and the testimony of the witness was disregarded. After the two-pass allocation process was completed, there were usually some vehicles remaining for distribution to dealers. Nissan assigned responsibility to DOMs to market these units to dealers. The DOMs used the days' supply calculation to prioritize the order in which they contacted dealers, although the vehicles were available to any dealer. There is no evidence that any DOM manipulated the days' supply-based prioritization of vehicles for denying the Petitioner the opportunity to obtain vehicles to sell. Any vehicles remaining available after the DOM attempts to distribute the vehicles were identified as "Additional Vehicle Requests" (AVR) and were made available to all dealers simultaneously. Dealerships were notified of such availability by simultaneous facsimile transmission or through the Nissan computerized database. There was no evidence that the Petitioner was denied an opportunity to obtain AVR vehicles, and in fact, the Petitioner obtained vehicles through the AVR system. The Petitioner asserted that the Nissan practice of reserving 10 percent of each month's production for allocation by market representatives rewarded some dealers and punished others. Market representative allocations are standard in the industry, and such vehicles are provided to dealerships for various reasons. Nissan market representative allocations were used to supply extra cars to newly opened dealerships or in situations where a dealership was sold to new ownership. Nissan market representative allocations were also provided to dealers who participated in the NREDI facility upgrade program. The provision of additional vehicles by market representatives to new or expanded sales facilities was reasonable because the standard allocation system would not reflect the actual sales capacity of the facility. The Petitioner presented no evidence that the Respondent, or any of its market representatives, manipulated the 10 percent allocation to unfairly reward any of the Petitioner's competitors or to punish the Respondent for not participating in various corporate programs. Prior to 2001, the Respondent had a program of providing additional vehicles to under-performing dealers in an apparent effort to increase sales by increasing inventory; however, the program did not cause an increase in sales and actually resulted in dealers being burdened with excessive unsold inventory and increased floor plan financing costs. The Respondent eliminated the program in 2001, and there is no evidence that any dealership was provided vehicles through this program during the time period relevant to this proceeding. There is no evidence that the Respondent eliminated the program for the purpose of reducing the vehicles allocated or otherwise provided to the Petitioner. The Petitioner asserted that the Respondent altered the Petitioner's assigned PMA in March 2004 and that the alteration negatively affected the Petitioner's sales penetration calculation because the Petitioner's area of sales responsibility changed. Prior to March 2004, the Petitioner's PMA was calculated using information reported by the 1990 United States Census. After completion of the 2000 Census, the Respondent evaluated every Nissan dealer's PMA and made alterations based upon population changes as reflected within the Census. Standard Provision Section 3.A. of the Dealer Agreement provides that the Respondent "may, in its reasonable discretion, change the Dealer's Primary Market Area from time to time." There was no credible evidence presented to establish that the 2000 PMA was invalid or was improperly designated. There was no evidence that the Respondent's evaluation of the Petitioner's PMA was different from the evaluation of every other PMA in the United States. There was no evidence that the Respondent evaluated or altered the Petitioner's PMA with the intent to negatively affect the Petitioner's ability to sell vehicles or to meet regional sales penetration averages. There was no credible evidence that the 2000 PMA adversely affected the dealership or that the Petitioner's declining sales penetration was related to the change in the PMA. The alteration of the PMA did not sufficiently affect the demographics of the Petitioner's market to account for the decline in sales penetration. Recalculating the Petitioner's sales penetration under the prior PMA did not markedly improve the Petitioner's sales penetration. The Petitioner suggested that the 2000 PMA revision was an impermissible modification or replacement of the Dealer Agreement, but no credible evidence was offered to support the assertion. There was no evidence that the Petitioner did not receive proper notice of the 2000 PMA. At the hearing, the Petitioner implied that the Respondent caused a decline in sales by refusing to make Nissan Motor Acceptance Corporation (NMAC) financing available to the Petitioner's buyers. NMAC is a finance company affiliated with, but separate from, the Respondent. NMAC provides a variety of financing options to dealers and Nissan vehicle purchasers. NMAC relies in lending decisions, as do most lenders, on a "Beacon score" which reflects the relative creditworthiness of a customer's application to finance the purchase of a car. Vehicle financing applications are grouped into four general "tiers" based on Beacon scores. Various interest rates are offered to customers based on Beacon scores. The Petitioner offered data comparing the annual number of NMAC-approved applications submitted in each tier by the Petitioner on behalf of the Petitioner's customers to suggest that the decline in the Petitioner's sales indicated a decision by NMAC to decrease the availability of NMAC credit to the Petitioner's customers. There was no evidence that NMAC treated the Petitioner's customers differently than the customers of competing dealerships or that NMAC-financed buyers received preferential interest rates based upon the dealership from which vehicles were purchased. There was no evidence that the Respondent exercised any control over individual financing decisions made by NMAC. There was no evidence that the Respondent manipulated, or had the ability to manipulate, the availability of NMAC financing for the purpose of negatively affecting the Petitioner's ability to sell vehicles. A number of hurricanes passed through the central Florida region in August and September of 2004. The Petitioner asserted that the dealership's physical plant was damaged by the storms, and that the hurricane-related economic impact on area consumers caused, at least in part, the decline in sales. The evidence failed to establish that the Petitioner's physical plant sustained significant hurricane damage to the extent of preventing vehicle sales from occurring. None of the Petitioner's vehicle inventory sustained hurricane- related damage. There was no evidence presented to indicate that the Petitioner's customers experienced a more significant economic impact than did the customers of competing dealers in the area. There was no credible evidence that the hurricanes had any material impact on the Petitioner's sales penetration. The Petitioner's sales penetration immediately prior to the hurricanes was 62.8 percent. The Petitioner's sales penetration in August 2004 was 61.6 percent, in September was 61.1 percent, and in October was 62.3 percent. Generally, within 30 to 45 days after a hurricane, customers with damaged vehicles use insurance proceeds to purchase new vehicles. The Petitioner's sales volume increased at this time; although because other dealers in the region also experienced increased sales, there was no change to the Petitioner's sales penetration calculation. The Petitioner asserted that improper advertising of "double rebates" by competing dealers caused declining sales, and offered evidence in the form of newspaper advertisements in support of the assertion; however, the Petitioner's own advertising indicated the availability of such rebates on occasion. There was no evidence presented to establish that the Respondent was responsible for creating or approving advertisements for dealerships. The Respondent has a program whereby dealers who meet certain advertising guidelines can obtain funds to defray advertising costs, but the program is voluntary. The Respondent does not regulate vehicle advertising or retail pricing. There was no evidence that the Petitioner reported any allegedly misleading or illegal advertising with any law enforcement agency having jurisdiction over false advertising or unfair trade practices. Mr. Hutchinson testified that the death of Roger Holler, Jr., in February 2004, negatively affected sales at the dealership, but there was no evidence that Roger Holler, Jr., had any role in managing or operating the dealership. The Petitioner's sales decline commenced prior to his death and continued thereafter. The evidence failed to establish that the death had any impact on the operation of the dealership or the Petitioner's sales performance. The Petitioner asserted that the Respondent's effort to terminate the Dealer Agreement was an attempt to punish the Petitioner for declining to participate in the NREDI program and offered a chronology of events intended to imply that the Respondent's actions in this case were a deliberate plan to force the Petitioner to either build a new facility or sell the dealership. The assertion is speculative and unsupported by credible evidence. During the time period relevant to this proceeding, only one of the four Orlando-area Nissan dealers agreed to participate in the NREDI program. Of the four dealerships, three experienced increased sales activity during the period relevant to this proceeding. The Petitioner was the only one of the four dealerships to experience a decline in sales penetration during this period. The Respondent has taken no action against the two other dealerships that declined to participate in the NREDI program. There was no credible evidence that the Respondent has taken any punitive action against any dealership solely based on a dealership's decision not to participate in the NREDI program. The Petitioner asserted that the Respondent's actions in this case were intended to punish the Petitioner for not selling the Respondent's extended service contract (known as "Security Plus") and for selling a product owned by the Petitioner, but there was no evidence supporting the assertion. A substantial number of dealers in the region did not sell the Security Plus product to new car buyers. There was no evidence that the Respondent has penalized any dealer, including the Petitioner, for refusing to sell the Nissan Security Plus product. During the hearing, the Petitioner identified a number of other troubled Nissan dealerships, ostensibly to establish that other dealerships similarly situated to the Petitioner had not been the subject of Dealer Agreement termination proceedings and that the Respondent had failed to enforce the Dealer Agreement termination provisions fairly. A number of the dealerships cited by the Petitioner are outside the State of Florida and are immaterial to this proceeding. The Dealer Agreement provides for termination of an agreement if the dealer materially and substantially breaches the agreement. The Dealer Agreement does not require termination of every dealership that fails to achieve average regional sales penetration. Termination of a Dealer Agreement because of sales performance requires a dealer-specific analysis that includes consideration of the factors underlying poor sales and consideration of conditions that may warrant delaying termination proceedings. As to the other Florida Nissan dealers cited by the Petitioner, many had higher sales penetration levels than did the Respondent. When compared to the Florida dealerships, the magnitude of the Petitioner's sales penetration decline exceeded that of all the other dealerships. Many of the cited dealerships had also initiated changes in management, staffing, and facilities to address sale and service deficiencies. Some of the cited dealers had already shown sales and service-related improvements. One dealership, Love Nissan, had already been terminated, even though its sales penetration had exceeded that of the Petitioner. One dealership cited by the Petitioner was Hampton Nissan, against whom the Respondent had initiated termination proceedings in 2003. Changes to Hampton's PMA based on the 2000 PMA resulted in an increase in the dealership's sales penetration eventually to levels exceeding those of the Petitioner, and Nissan has rescinded the action. There was no evidence that the Hampton Nissan PMA was calculated differently than the Petitioner's PMA, or that either PMA was altered purposefully to affect the dealer's sales penetration results. Other dealerships cited by the Petitioner were being monitored by the Respondent to ascertain whether efforts to improve sales performance succeed. The Respondent may ultimately pursue termination proceedings against underperforming dealerships if sales performance fails to improve. There was no credible evidence that, prior to initiating this termination proceeding, the Respondent failed to consider the facts and circumstances underlying the Petitioner's poor sales and the Petitioner's response to the situation. The Petitioner has experienced a substantial and continuing decline in sales penetration and has failed to respond effectively to the deteriorating situation during the period at issue in this proceeding.
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 Petitioner's protest and approving the April 6, 2005, Superceding Notice of Termination. DONE AND ENTERED this 20th day of March, 2007, 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 20th day of March, 2007.
The Issue (1) Whether or not the Department of Highway Safety and Motor Vehicles has subject matter jurisdiction in spite of the 60-day time requirement contained in Section 320.644, Florida Statutes, relating to the filing of a verified complaint and the facts pertaining thereto, and (2) whether the application of Respondents to become dealer/operator of Sugarland disqualified and meets the written, reasonable and uniformly applied standards of Chevrolet for executive management of a dealership.
Findings Of Fact Sugarland Motors, Inc. (Sugarland) was formed on October 26, 1987, in Florida, by Robert W. Boughton. Sugarland was formed to purchase the assets of Nicky Hegley Chevrolet in Clewiston, Florida, pursuant to a stock purchase agreement. Sugarland submitted an application to appoint Colleen Orrico as dealer/operator, replacing Arthur M. Johnson (Johnson) on January 8, 1990. Immediately prior to its purchase by Sugarland, the Nicky Hegley Chevrolet dealership was in poor condition and the business was generally in a state of disrepair. Boughton became involved as a financial investor in Sugarland, becoming owner of 15% of the stock and submitted an application to Chevrolet for approval as a financial investor in Sugarland which was approved. Colleen Orrico first became involved in Sugarland in 1987 when she became a financial investor owning 70% of the stock. Her application for approval as a financial investor in Sugarland was approved by Chevrolet. Johnson first became involved with Sugarland in 1987 when he became the dealer/operator owning 15% of the stock. He completed an application for dealer/operator status which was approved by Chevrolet. Johnson did not pay for his 15% share of Sugarland stock because he did not have the necessary cash. The application of Sugarland to acquire Nicky Hegley Chevrolet was approved by Chevrolet on January 14, 1988, and indicated the approval of Colleen Orrico, Robert Boughton and Ed Stinn, as financial investors and Art Johnson as the dealer/operator. Of the investors in Sugarland, Colleen Orrico's financial statement was the strongest. Sugarland is an authorized Chevrolet dealer in Clewiston, Florida, in addition to being authorized for Oldsmobile, Pontiac and GMC. Art Johnson resigned as dealer/operator of Sugarland on November 30, 1989, and his stock was redeemed by Colleen Orrico. Johnson served as the dealer/operator from January 1988 through approximately September 1989, pursuant to a Dealer Sales and Service Agreement (Agreement between GM and Sugarland). Pursuant to the agreement, Johnson was responsible for exercising full managerial authority on a day-to-day basis over the conduct of Sugarland's entire operations. The dealer/operator is the person upon whose qualification GM relies in entering into a dealer agreement and whose personal services the owner agrees to provide to GM. In September 1989, Johnson resigned as dealer/operator and discontinued all involvement in Sugarland's operations. Respondent 3/ never notified GM of this change in Sugarland's management structure. GM independently learned of the change by discovering that Johnson left the dealership and was no longer providing day-to-day management for Sugarland. The Chevrolet Motor Division, Tampa Branch Office (Branch) immediately sought a written explanation of this situation from Sugarland's principal owner, Colleen Orrico. Since Johnson's departure, Sugarland has continuously been without an approved executive management. On January 8, 1990, GM received from Boughton an application purportedly signed by Orrico seeking to name her as the dealer/operator of Sugarland. Although Orrico purportedly signed the application for General Motors' sales and service agreement and related materials, Boughton, Orrico's longtime lawyer, de facto business manager and confidant, filled out the application himself. Orrico consistently relied on Boughton to complete her applications to GM, including applications for either financial investments or control of at least two of the dealerships. Although Orrico was the dealer/operator candidate, all correspondence to GM on behalf of Sugarland was authored by Boughton. Kurt L. Ritter (Ritter), branch manager of Chevrolet Motor Division in Tampa, immediately notified Sugarland that the materials submitted were unacceptable because they were incomplete. Ritter indicated GM would consider a new proposal and again supplied a complete proposal package to Respondent. Boughton on behalf of Sugarland or Orrico submitted a new second proposal on January 18, 1990, as the original proposal was incomplete. GM, through its staff, investigated the second proposal and advised Sugarland that it was also incomplete based on GM's requirements. During the second review, GM observed discrepancies and inaccuracies in the proposal materials. Specifically, Orrico represented that she owned 85% of Ed Stinn's Chevrolet, Inc. (Stinn), a dealership in the Chevrolet-Pittsburgh Branch, wherein she had previously represented owning 49% of Stinn. Further, the application failed to disclose any litigation whatsoever involving Orrico or the company she was involved with despite GM's awareness of at least one lawsuit naming both Orrico and Boughton, alleging fraudulent stock in property transfers from Stinn to Orrico. Based on these deficiencies and inaccuracies, GM again requested a completed proposal and an explanation of these issues, with GM reiterating its willingness to respond to a new and complete proposal within 60 days of its receipt. Both Orrico and Boughton were familiar with the proposal process, GM applications and related materials. Orrico, through Boughton, had previously submitted at least three such proposal packets to GM concerning ownership/management changes at Stinn. Boughton also was an attorney with an expertise and experience in representing auto dealers in their day-to-day business dealings, including those with a manufacturer. Boughton acted as a business advisor to Orrico and her husband during their attempts to acquire additional ownership and management interest at Stinn. GM's proposed packet is composed of several forms seeking basic business, personal and financial information. Each form contains instructions and uniform requirements that each applicant for a dealer/operator position to submit an identical and complete application. Respondent's made two other submissions, in addition to the submissions on January 5 and January 18, on March 6 and April 24, however, they too were incomplete for reasons stated hereafter. None of the submissions clearly identified the person(s) who would be responsible for the day-to-day management of Sugarland. As example, the first application named Orrico, David Mullins and Boughton all as persons that would operate the dealership. No business experience was provided, however for either Mullins or Boughton. The second application indicated Orrico would run the dealership but was accompanied by a letter naming Donald Schwedo to replace Mullins as general manager. Orrico's listed business experience failed to include at least 13 companies she was employed by or connected with over the past 15 years. In the agreement between Sugarland and GM, Respondents agreed that when seeking to change the dealer/operator ownership, all information customarily requested by GM would be timely provided. Despite this agreement, Respondent never identified who the proposed management at Sugarland would be and a listing of their complete business experience. Based on the incompleteness of the series of documents GM had received, on February 12, 1990, GM advised Orrico that it was prepared to reject her as dealer/operator and file a verified complaint pursuant to Section 320.644, Florida Statutes. However, to avoid litigation, GM offered to consider a new, complete proposal packet if, in return, Orrico and Sugarland would (a) withdraw all prior proposals and (b) agree the sixty (60) day notice provided under Section 320.644, Florida Statutes would commence only upon submission of a complete, new proposal. On March 1, 1990, at Respondent's request, a meeting was held in West Palm Beach, Florida, involving Ritter, and a member of his staff from GM, Orrico, Boughton, Schwedo and Genaro Orrico, Respondent's husband. At the meeting, Ritter re-emphasized the need for full disclosure of (a) Boughton's and Orrico's business experience; (b) their involvement in other companies; and (c) any litigation involving Orrico, Boughton or those companies. Ritter then reaffirmed GM's intent at that time to file a verified complaint. Respondents, however, agreed to withdraw any then pending applications and agreed to resubmit a new and complete proposal under a new 60-day time clock. On March 6, 1990, Sugarland and Orrico, through Boughton, confirmed Sugarland's agreement to resubmit a new package under a new 60-day clock. Specifically, Respondents March 5, 1990 letter clearly provides that "Ms. Orrico and I understand that the approval process will begin anew with respect to all applications." GM relied on that letter and Respondents' representation at the March 1, 1990 meeting and did not file a verified complaint at that time. Consistent with their agreement, Sugarland also submitted a new application to increase Boughton's financial interest in Sugarland on March 6, 1990. On March 26, 1990, GM sent Orrico a letter detailing the deficiencies and discrepancies that needed to be addressed in the new proposal. Ritter also enclosed another proposal package for completion by Respondents. On April 24, 1990, GM received another application from Boughton alone and a description of his role in the pending bankruptcy litigation. However, missing was Orrico's role or an explanation of her involvement in that litigation, nor was any new application from Orrico enclosed. Boughton's package did not identify the intended management at Sugarland nor did Respondents ever resubmit a proposal package. Based on the continuing lack of a complete response from Respondents, on May 7, 1990, GM filed its verified complaint objecting to the proposed change in the executive management at Sugarland to Orrico advising that she was not of good moral character and failed to meet GM's written reasonably and uniformly applied standards and qualifications for dealer/operator, including completion of required proposal materials. While investigating Sugarland's executive management status, GM learned that Orrico's husband, Genaro, was in fact making the policy and management decisions for Sugarland while none of Respondents' submissions disclosed Genaro Orrico's management involvement with Sugarland or his business experience or affiliations. The retail automobile business is a complex business consisting of several profit centers under one roof including new cars, new trucks, used vehicles, parts and service, extended warranties, finance and insurance centers. GM uniformly requires its dealer/operators to be a competent business person, an effective manager and an experience merchandiser of automotive products and service. This requirement is reflected in each dealer sales and service agreement in the additional provision section as well as the dealer organization manual and the dealer operator application which ask for an explanation of how the applicant's experience will apply to management of a dealership. These documents and standards are used to evaluate dealer/operator applications for all Chevrolet dealerships throughout Florida and the United States. GM requires its dealer/operator to be active in the day-to-day operation of the dealership, that the dealer/operator affirmatively state in each case that he/she will maintain his/her principal residence near the dealership and actively participate in the daily management of the dealership. GM also has written requirements regarding submission of information regarding changes in dealer/operator and misrepresentations. The requirement regarding misrepresentations contained in each dealer/operator application states: "(4) Any material misrepresentation, whether intentional or unintentional, in the information submitted ... in connection with this application or in the questionnaire shall be grounds upon which the division may either: a) Elect to no longer consider my application, or (b) immediately terminate any "letter of intent", or (c) immediately terminate any dealer agreement executed by the division with me or the dealer company designated by me." Orrico read and understood the requirement at the time she submitted her applications to GM. She also understood that by signing the application, she acknowledged and agreed to the conditions contained therein and was required to truthfully and completely answer each inquiry. Each application also requires a list and explanation of all "present and previous business experience: (Account for all periods during at least the past 15 years)." Dealer/operator candidates are uniformly required to supply such information. On her application, Orrico listed only four companies in accounting for her business experience: American Southeastern Warranty Association, London American Insurance Agency, Griffin Management Company and Ed Stinn Chevrolet, Inc. Orrico listed her work experience as president of both Southeastern and London American which she classifies as still operating, manager at Griffin Management Company and owner/investor at Stinn. Orrico failed to include Griffin Systems, Inc., where she was an officer and a director from 1984 until 1988, and sole owner until 1988; Great Plains Capital Corporation where she was sole owner and received a salary; Great Plains Capital Insurance Company where she is sole owner (Great Plains Insurance Company is 100% owned by Great Plains Capital Corporation); Great Plains Insurance of the Bahamas, Ltd., where she is sole owner (Great Plains of the Bahamas, Ltd., is 100% owned by Great Plains Capital Corporation); C. Orrico, Inc., of which she is a director; G & C Property, Inc., of which she is a director; United States Acceptance Corporation, of which she is the registered agent, president, treasurer and director; Courtesy-Chrysler Plymouth, Inc., of which she is the registered agent and president; Master Leasing Systems, Inc., where she is the registered agent and director; Sugarland Leasing, Inc., where she is a director; Oracle Management Corporation, where is secretary and a director as well as sole owner; Seaside Realty of the Palm Beaches, Inc., where she is a registered agent and sole owner; and Munchies International Corporation, where she is the registered agent and owner. Orrico's pattern of selective disclosure of business experience is one wherein she failed to disclose those companies that she was involved with that had a history of consumer fraud or licensing litigation. As example, Ed Stinn Chevrolet, where Orrico was past owner/investor, is listed while Griffin Systems, Inc. in which she was an owner, officer and director was not listed. Griffin Systems, Inc. has been involved in a variety of consumer fraud litigation and investigations nationwide. At hearing, Orrico testified to new, previously undisclosed business experiences as a trustee in a commercial bankruptcy matter. Orrico was not involved in the daily operations and management of Ed Stinn Chevrolet and her claim that she meets GM requirement because of her ownership interest in Stinn Chevrolet is not helpful in that Stinn was not operated in compliance with the dealer sales and service agreement, did not meet GM's minimum sales and service standards and the management was so poor that the dealership failed and is no longer operational having ceased all sales in January, 1990. Similarly, Orrico's claims to meet GM requirements due to her ownership interest in Sugarland is also not helpful and that she was never involved in Sugarland's operations at a managerial level by her own admission. Here too, like Stinn, Sugarland was not operated successfully or in compliance with the dealer agreement as Sugarland routinely failed to notify GM of the resignation and replacement of its management, the dealership lost a significant amount of money since its inception and may fairly be characterized as unsuccessful. Orrico identified no other experience with a business involved in retailing new automobiles. Orrico's claimed business experience as a "manager" with Griffin Management Company as a part-time clerk/secretary was by her own words, "menial". As with all dealer/operator applications, Orrico's application asked the following question: "Are you, or any business in which you were or are a principal owner, officer or director, a party to any presently pending civil or criminal action or administrative proceeding?" Orrico answered "No". The application also asked: "Have you, or any business which you were either a principal owner, officer or director been held liable in or settled out of court in a civil action (including administrative proceedings seeking injunctive or other restrictive order)?" Again, Orrico answered "No". As of the date Orrico submitted her last application, thirteen (13) such matters existed. Many of the matters involved consumer fraud litigation. Some of the matters resulted in enforcement orders against companies Ms. Orrico was involved with as either an officer or director. As of the hearing date, at least six additional such matters had been filed. None of these matters were ever disclosed to GM by Respondent in any of the various applications or submissions. Moreover, none of the involved businesses were listed by Orrico in her application. Boughton filled out the application information on Orrico's behalf. Boughton knew Orrico was an owner, director and officer of Griffin Management Company, Inc., within the last five years. Moreover, Boughton was aware of litigation involving these businesses including Griffin Systems, Inc. and could have easily compiled a comprehensive list of Griffin Systems, Inc.'s litigation for inclusion in Orrico's application. He elected not to do so. Orrico's business experience also fails to meet GM's standards in that the business affiliations Orrico that failed to disclose did not reflect competent management or honest business practices. Many of Orrico's thirteen undisclosed business affiliations a) have been or are involved in state licensing enforcement actions; b) have consented to cease and desist orders for questionable business practices; c) are being pursued by state agencies for consumer or other business fraud; and d) are being investigated by the United States Postal Inspector (to the extent of an armed seizure of records at one company) and the Federal Trade Commission under the Consumer Protection Statutes. GM also has written standards contained in the dealer organization and planning manual instructing all GM personnel concerning dealer/operator candidates to require: a) a work history and background that indicates good potential to be a successful operator of a dealership; b) a reputation for integrity; c) a track record of success; and d) experience in the retail/automobile business. The litany of fraud actions and Orrico's prior business failures in the automobile industry clearly failed to meet the standards that GM uniformly require of its dealer/operators. GM's standards are reasonable and are supported by the standards of other manufacturers. Indeed, Respondent's own witness, Glenn Robert Franz of Mitsubishi Motors related that Mitsubishi would likely deny an application of a dealer/operator under circumstances as presented here. Mitsubishi likewise, would have probably not approved a candidate who was involved in similar pending consumer fraud and licensing litigation. More to the point, Orrico's questionable business affiliations have already directly impacted Sugarland's business operations and reputation. Orrico admits that American Southeastern Warranty Association sold extended auto warranties through Sugarland. The Florida Department of Insurance has alleged that the management of American Southeastern Warranty Association (including Orrico) is not competent and trustworthy to manage its affairs within compliance of the law. Each of Orrico's various applications contained numerous affirmative misrepresentations and omissions of material fact, evidencing a pattern of dishonesty and gross negligence that raises questions concerning her integrity and business experience. Orrico was, or certainly should have been aware of the numerous affirmative misrepresentations and omissions of material fact that were filed in her various dealer/operator proposals to GM. Orrico admitted to having read and reviewed her applications before signing them and admitted the falsity of the business experience disclosures and omissions. Despite this fact, her failure to correct these misrepresentations, despite repeated opportunities to do so, reflects an intent to deceive.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that: The Department of Highway Safety and Motor Vehicles enter a Final Order denying Respondent Sugarland Motors, Inc. and Colleen Orrico's proposal to change the executive management at Sugarland. DONE and ENTERED this 8th day of April, 1991, in Tallahassee, Leon County, Florida. JAMES E. BRADWELL Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904)488-9675 Filed with the Clerk of the Division of Administrative Hearings this 8th day of April, 1991.
The Issue The issue is whether Respondent engaged in an unlawful employment practice by discharging Petitioner because of his age.
Findings Of Fact Respondent produces flexible packaging, develops technology to fill that packaging with liquids, and provides services to incorporate its flexible packaging systems into its customers' facilities. Respondent primarily produces "bag-in- box" products and manufacturing systems for customers such as Pepsi-Cola and Wendy's, as well as various customers in the milk, juice, and chemical business. Respondent operates two manufacturing facilities, one located at its headquarters in Romeville, Illinois, and another located in Union City, California. Petitioner was born on April 24, 1946. In 1996, Respondent hired Petitioner as a sales representative, and he served in that position until he was discharged on April 19, 2004. Petitioner initially was assigned to service the Upper Midwest Region and was based in Chicago, Illinois. In 1999, Respondent reassigned Petitioner to the Southeast Region. After his reassignment to the Southeast Region, Petitioner continued to live in the Chicago area for several years. However, in December 2002 or January 2003, Petitioner and Respondent mutually agreed that Petitioner would relocate to Florida. Because the move resulted from a mutual decision between Petitioner and one of Respondent's founders, Respondent paid $25,000 towards Petitioner's moving expenses. After the move, Petitioner continued to be responsible for the same geographical territory and the same customers as before the move. Joe Pranckus is Respondent's vice president of sales. At the time of Petitioner's discharge, the sales department consisted of a customer service department and four geographical sales territories: the Central, Western, Eastern and Mexico Regions. The Central and Western Regions (where Respondent's manufacturing facilities are located) each were overseen by a regional manager. The Eastern and Mexico Regions did not have regional managers. As Petitioner was located in the Eastern Region, Mr. Pranckus served as his direct supervisor. From 1999 until his dismissal, Petitioner was Respondent’s only sales representative in the Southeast. His primary responsibility was to maintain and increase Respondent’s business in that region of the country. The Rapak sales department as a whole is generally responsible for maintaining and increasing Respondent’s overall sales. This involves not only selling products and services, but also following up with customers to help them solve problems and otherwise to ensure their happiness. Because his primary responsibility was maintaining and increasing sales, Mr. Pranckus judged Petitioner almost exclusively by his year-to-date sales numbers as compared to the same period in the previous year. These numbers were calculated by Mr. Pranckus on a fiscal-year basis, from May 1st through April 30th. For the 2003-2004 fiscal year, Mr. Pranckus established a goal for Petitioner of 15 percent growth in sales. The minimum expectation was that Petitioner maintain at least the same amount of sales he had the previous year. During the 2003-2004 fiscal year, Mr. Pranckus e- mailed Petitioner his sales-versus-last-year figures on almost a monthly basis. By the end of June 2003, Petitioner had sold only 84 percent as much as he had sold through June 2002; by the end of July, only 87 percent as much as he had sold through July 2002; by the end of August, 91 percent; September, 81 percent; October, 90 percent; November, 85 percent; December, 87 percent; and by the end of March 2004 (eleven months into the fiscal year), he had sold only 88 percent as much as he had sold through the first eleven months of the 2002-2003 fiscal year. In short, as the fiscal year drew to a close, it was clear that Petitioner was going to suffer a net loss of business for the year. In late October 2003, Petitioner suffered a heart attack and underwent triple bypass surgery. Petitioner was unable to work for approximately two months while recovering from surgery. However, Petitioner returned to work in January 2004, initially working on a limited basis. Petitioner's sales numbers suffered because he lost some certain accounts owing to factors beyond his control (such as product quality and price issues). Nonetheless, Petitioner concedes that it was his job to replace his lost sales, no matter what caused his customers to switch suppliers. Mr. Pranckus typically holds one sales meeting each year for his entire staff. In February 2004, Mr. Pranckus held one of those meetings. At that meeting, Mr. Pranckus informed Petitioner that "changes would be made if [his] numbers didn't improve." In his application for unemployment compensation, Petitioner stated that Mr. Pranckus also warned him on March 10, 2004, that he needed to improve his sales numbers. Finally, Mr. Pranckus sent an e-mail to Petitioner on March 27, 2004. In that e-mail, Mr. Pranckus delivered the following written warning: Your territory is at a critical state. We can not continue along this path. Sales must be improved immediately or we will need to change. We agreed at our sales meeting to get this back on track. It is not showing up in the numbers and activity. Call me and let me know how we can help. On April 19, 2004, Mr. Pranckus discharged Petitioner because of his poor performance. His year-to-date sales figures were unacceptably low, as compared to the previous year, and Mr. Pranckus saw no evidence of plans or activity designed to improve matters. After Petitioner was discharged, he filed an application for unemployment compensation. On the application, Petitioner stated that he was discharged “for failure to achieve sales goals.” Later in that same application, in response to a request to “briefly summarize your reason for separation from this employer,” Petitioner wrote: “I did not achieve my sales goals.” Petitioner did not assert anywhere in his application for unemployment benefits that he was discharged because of his age. At the time of his discharge, Petitioner was 57 years old (almost 58). Mr. Pranckus did not know Petitioner’s exact age, but he would have guessed (based on physical appearance) that Petitioner was in his mid-50s at the time. Mr. Pranckus did not consider this to be “old.” In fact, Petitioner is not much older than Mr. Pranckus. Mr. Pranckus interviewed three individuals to fill Petitioner’s position. He ultimately selected Jim Wulff. Mr. Pranckus did not know their ages at the time of the interviews, but he would have guessed (again, by appearance) that Mr. Wulff was in his mid-50s and that the other two interviewees were in their mid- to late 40s and mid- to late 50s, respectively. In fact, Mr. Wulff was born on May 26, 1948, so he was 55 years old (nearly 56) when Mr. Pranckus hired him. Sales analysis from June 2003 showed that eight Rapak employees or representatives did not meet the 100 percent sales goal. Those listed were either Rapak non-supervising employees with direct responsibility for sales, supervising employees, or non-employee independent brokers. However, none of these employees, whether younger or older, was similarly situated to Petitioner at the time of his discharge. As an initial matter, there were four other non- supervisory employees with direct responsibility for sales: Dennis Hayes, Marvin Groom, Donald Young, and Keith Martinez. The other individuals responsible for sales were either supervisory employees or non-employee independent brokers. Because the two supervisors have management responsibilities and are responsible for their entire regions and the individuals who report to them, they are not judged primarily by whether they personally meet the 100 percent or 115 percent sales-versus- last-year objectives. Brokers, meanwhile, are not employees. Rather, they are independent contractors paid on a straight commission, so Respondent receives value from their services regardless of how much they sell. Mr. Hayes was the only other employee who performed the exact same job as Petitioner, but he reported to Regional Manager Dan Petriekis in the Central Region, not directly to Mr. Pranckus. Moreover, as of March 2004, Mr. Hayes had sold 127 percent as much as he had during the same period the previous year.1 Mr. Hayes is almost ten years older than Petitioner. Mr. Young was also responsible for sales, but he was semi-retired, serviced only one customer and received a base salary for his work. As of March 2004, however, Mr. Young had sold 115 percent as much as he had during the same period the previous year. Mr. Young is more than twelve years older than Petitioner. Finally, while Keith Martinez and Marvin Groom had some responsibility for sales, their positions were “radically different” from Petitioner’s. Whereas Petitioner could identify certain problems with Respondent’s machinery and products and would refer those problems to a service technician to assist his customers, Mr. Groom and Mr. Martinez were both originally hired as service technicians. Based on this experience, they could and did not only identify technical problems, but also performed the necessary maintenance and repair work on the spot, in addition to performing preventative maintenance. Petitioner, by contrast, has spent his entire working life as salesman. Accordingly, he was neither capable of, nor expected to, perform these additional maintenance and repair functions. As a result, Mr. Groom and Mr. Martinez received more leeway on their sales performance than Petitioner because they brought additional value to Respondent’s business that Petitioner could not offer. Nonetheless, as of March 2004, Mr. Groom was running at 100 percent versus the prior year and Mr. Martinez was running at 87 percent. Mr. Groom is roughly three years younger than Petitioner, and Mr. Martinez is 15 and one-half years younger than Petitioner. Respondent paid Petitioner $113,000 in salary and commissions during his last full calendar year of employment with Rapak. Petitioner was out of work for ten months after his dismissal. During that time, he received $8,000 in unemployment compensation from the State of Florida and $8,942.33 in severance pay from Respondent. In his new job, Petitioner projects that he will earn $100,000 in his first year but admits that he could make at least $113,000 because his compensation is once again dependent upon sales commissions.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Florida Commission on Human Relations issue a final order finding that Respondent committed no unlawful employment practice and dismissing the Petition for Relief. DONE AND ENTERED this 26th day of July, 2006, in Tallahassee, Leon County, Florida. S CAROLYN S. HOLIFIELD Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 26th day of July, 2006.
Findings Of Fact The Petitioner is Gail C. Selvaggio, who currently resides in Palm Beach Gardens Florida, and at the time of the events complained of resided in Tallahassee, Florida. The Respondent is the Knight-Ridder Publishing Company, doing business as The Tallahassee Democrat (hereafter "The Democrat"). The Democrat is located in Tallahassee, Florida. The Petitioner commenced her employment with the Respondent as a secretary in its advertising department on February 13, 1978, at a salary of $160 per week. Petitioner's supervisor in the advertising department and the person for whom she primarily performed her secretarial duties was the advertising director, Martin Steinberg. Petitioner was hired to replace Judy McGinnis, who had been an administrative assistant to the previous advertising director whom Steinberg had replaced. McGinnis, who had supervisory duties in her position, had terminated her employment approximately six months prior to the time Petitioner was hired. When McGinnis left, her vacancy was advertised in August, 1977, as administrative assistant pursuant to the instructions of John Veenstra, the then advertising director. No one was hired at that time. When Veenstra left The Democrat in late 1977, the position was frozen. When Steinberg was hired by Respondent as its advertising director, he informed Personnel that he wanted a secretary and not an administrative assistant. Personnel then contacted the people who had earlier applied for the administrative assistant position and invited them to apply again, but informed them that the position had been changed to that of a secretary. Petitioner was referred to The Democrat on February 9, 1978, by Snelling and Snelling, an employment agency. A job counselor at that agency advised Petitioner that The Democrat had an opening for an administrative assistant, information given in a job order when McGinnis left The Democrat in August, 1977. The employment agency did not have any official business connection with The Democrat, and The Democrat had not informed the agency of any job opening when the agency referred Petitioner to The Democrat six months after the agency's job order was written. Based upon the information given her by the agency, Petitioner completed an application for employment with The Democrat by stating that she was applying for the position of administrative assistant. Petitioner was interviewed for employment by Tracy Rowe, who was at that time the personnel assistant at The Democrat. Ms. Rowe conducted approximately ninety percent of the initial employment interviews for The Democrat. She would then refer qualified applicants to the department head where the position was open. Rowe informed Petitioner during the initial interview that the position was not an administrative assistant position but rather was a secretarial position. Petitioner took a typing test as part of this initial interview. Petitioner then interviewed with Mr. Steinberg on February 9, 1978, and on February 10, 1978. Steinberg told Petitioner that the position was that of a secretary and explained to her the history of the position as it was held by Ms. McGinnis and his reasons for not wanting an administrative assistant. Steinberg had earlier told Rebecca Bradner when she interviewed for the position that the position was secretarial. He had also earlier told Mr. Harwell, the publisher of The Democrat, that he expressly did not want an administrative assistant because he did not want anyone with that much authority. Steinberg discussed with Petitioner possibilities of advancement during both her interviews and early employment, including agreeing with Petitioner's suggestion that she might write a training manual, which she never did, and conduct a sales training program. He did not make any promises to her regarding her future advancement or assignments. Petitioner received a salary increase to $180 per week within two weeks after beginning her employment, in accordance with her agreement with Steinberg. This was done to enable Petitioner to pay a lower fee to her employment agency. Steinberg did not promise any other pay increase to Petitioner. Petitioner was given an orientation program at The Democrat so that she could become familiar with the various departments of the newspaper and know who to consult with if problems arose when Steinberg was not in the office. Petitioner had no supervisory responsibilities in her position at The Democrat. During the initial months of her employment, Petitioner was basically a satisfactory employee, although she made mistakes in typing correspondence and various monthly reports. Steinberg brought these errors to her attention during the early months of her employment. Steinberg's practice in correcting documents and correspondence was to circle or underline the error in ink, thereby requiring the page to be retyped even if the error were minor. At times, he would sign correspondence without first reading it and later would find errors on the copy returned to him prior to filing, after the original of the letter had been mailed. Steinberg followed the practice of marking errors in ink from the beginning of Petitioner's employment. This practice was a personal habit of his which he followed with other employees as well. This practice was not an attempt on his part to harass Petitioner. Karen Sheffield, who sometimes handled secretarial duties for Steinberg, did not interpret this practice as harassment, although she frequently retyped the same document several times because of this practice. Petitioner made errors in the addresses and salutations of Steinberg's correspondence, which errors were especially noticeable to those to whom the letters were addressed. Several of the people with who Mr. Steinberg corresponded informed him of errors that had been made, and one person received a letter so full of typographical errors that he involved the publisher of The Democrat in the matter. Petitioner had the responsibility to correct correspondence. Steinberg did not instruct her to leave incorrect punctuation or grammar or spelling in a letter. Steinberg discussed Petitioner's unacceptable performance of her job duties with other management personnel, including Keith Helen, Walter Harwell, and Vernelle Tucker, on several occasions. Mr. Harwell advised Steinberg that it was necessary for Steinberg to turn out better work and that the secretary should be more careful. Steinberg counseled Petitioner about her mistakes and told her she needed to improve her performance on several different occasions. Petitioner was informed specifically about errors in the "Merchant letter" in May, 1978, and about errors in other letters as they occurred. Petitioner occasionally filled in for outside salespersons and made their calls for them when they were on vacation or sick. She performed as well as could be expected, although she made more errors than the regular salespersons made. Steinberg and Petitioner had a friendly, personal relationship in the earlier months of her employment and exchanged confidences with each other. Petitioner is a friendly, outgoing, gregarious person, and it was not unusual for her to put her arms around male employees while at work and hug them and even kiss them. On one occasion, Tracy Rowe observed Petitioner walk up behind Steinberg when he was sitting at a desk and throw her arms around him and kiss him. Steinberg, as a supervisor, was demanding but fair. Petitioner had marital problems in the fall of 1978 and discussed those problems with Steinberg. Her marriage terminated in a divorce in November, 1970. Beginning approximately in August and September, Petitioner's job performance suffered as she began to spend more time away from her desk. Part of the reason for her time away from her duties was her participation as co- chairperson of The Democrat's United Way campaign. She voluntarily assumed duties in connection with that campaign above any required of her and more than her co-chairperson. She frequently returned from United Way luncheons much later than the other employees who were in attendance at those luncheons. Although she chose to entertain at some of the luncheons, she had time to eat during the business portion of the meetings and could have returned to work sooner. During this time period, Steinberg discussed with Petitioner and with other management personnel problems with correspondence typed by Petitioner and with her tardiness. Prior to her divorce, Petitioner began to date another employee of The Democrat, Ron Selvaggio, her present husband, who was then head of the promotion department at The Democrat. Petitioner was frequently observed in his office to an extent greater than her United Way role required. Additionally, she often went to lunch with him and frequently returned late. Petitioner frequently socialized with others in the department. She would leave her desk to socialize with other employees, and other employees would come by her desk. Many employees noticed that Petitioner spent an unusual amount of time not working, and this fact was conveyed to Steinberg by other management personnel. The time spent by Petitioner socializing and participating in the United Way campaign prevented her from completing her work in a timely manner. Steinberg discussed this with her and with other management personnel. There was always work to be done in the advertising department, and Petitioner's neglect of her duties was noticed by other employees of The Democrat who depended on her to get their work done. Steinberg, complained to Vernelle Tucker that his work was not being completed because of Petitioner's activities in the United Way. Mrs. Tucker counseled Petitioner and told her that her job duties still had to be fulfilled despite her participation in the United Way campaign and that her work was priority. Steinberg began to write private memoranda on Petitioner's performance and work habits beginning in November, 1978, at the suggestion of Mrs. Tucker. Steinberg told Tucker that he did not believe Petitioner should get a raise because of her poor work performance, and Tucker told him to start documenting problem areas. Steinberg did not show those memoranda to Petitioner, nor did he forward them immediately to the personnel office to be included in her file. However, in most of these instances, Steinberg counseled Petitioner at the time about the matters he had noted. Other supervisors at The Democrat followed the same practice with regard to private memoranda. This practice allowed them to record their observations and counsel the offending employee in the hope that whatever problem existed might be eliminated. If the problems were not resolved in that manner, the memoranda could then become part of the employee's file. Otherwise, the memoranda could be destroyed without ever being sent to Personnel, so that temporary problems need not become a part of the employee's permanent file. The memoranda by Steinberg were made at the time of the events recorded and were not manufactured as after-the-fact justification for Petitioner's termination. It is the policy of The Democrat to include raises for its employees in the annual budget. The supervisors actually determine which employees will get raises and how much they will receive. The supervisors have authority to withhold any or all of the budgeted raise from an employee. Petitioner did not receive a raise budgeted for December, 1978, because her job performance did not warrant a pay raise. The paperwork Petitioner was required to complete increased during the fall of 1975 due to the normal increase in advertising business experienced by The Democrat from the return of students to school and the Thanksgiving and Christmas holiday seasons. Other reasons for the increase in workload at that time are that budgeting and forecasting for the following year is conducted during the fall, as is preparation of the next year's rate structure. The workload increases for everyone in the advertising department at that time of year. Petitioner's workload did not increase as a result of any attempt by Steinberg to harass her. In December, 1978, Petitioner approached Karen Sheffield about a transfer because of the increased paperwork. Sheffield was the secretary to Mrs. Tucker and Mr. Selvaggio at that time. She did not work in personnel. Petitioner did not approach anyone in Personnel about a transfer. Petitioner was not overworked in comparison with other employees. Petitioner was assigned the responsibility for answering a bank of telephones during the time that the advertising department was in a temporary working area due to construction in the building. Steinberg could give that task to no one else due to spacing in the temporary work area. Petitioner was assigned the task of copying multiples because Jean Ash Webb, who had been performing the duty, had been incurring a considerable amount of overtime because of that duty together with her other duties. Steinberg reassigned this task to Petitioner to reduce that overtime. The amount of overtime worked is a matter of great importance to management at The Democrat. Steinberg instructed Petitioner to use carbons in making copies where practicable rather than using a copying machine. He told her that the reason for using carbons was to save money. This change was effected at the direction of Mr. Harwell, the publisher, who was concerned over expenses at that time. There was a valid business reason for the use of carbons. This policy was instituted throughout The Democrat and not simply against Petitioner. Petitioner resented being given what she considered to be menial tasks and complained to other employees about having to perform such tasks. She complained about having to collate the Belden (Building) Study. She complained about having to perform the task of copying multiples. She complained about being overworked. She complained about having to retype letters. Petitioner's hours of employment were changed to 10:00 a.m. to 7:00 p.m., effective January 18, 1979. Petitioner had changed her own work hours to suit her personal schedule on several occasions prior to her hours being changed to 10:00 a.m. to 7:00 p.m. Her method of changing her hours was simply to begin coming in at a different time and then to secure approval from Steinberg after he noticed the change. The reason for the change to 10:00 a.m. to 7:00 p.m. was to provide assistance to the outside sales staff upon their return to the office in the afternoon after making sales calls. Outside salespersons in the advertising department frequently work late to finish the required paperwork and layouts for ads sold during the day. Persons used to provide such assistance to the outside sales staff after normal hours are known as "ad-assists." Petitioner was assigned ad-assist duties only for part of the day, from 5:00 p.m. to 7:00 p.m. There had been a need for an additional person in the ad-assist position for some time. The need for an additional person in that position had been under discussion by outside salespersons and by the management of the advertising department for several months. Steinberg had discussed the problem with Petitioner and had solicited her advice on how to handle the problem. Mr. Harwell would not approve hiring a new employee for the position because of the financial pressures on The Democrat at that time. Steinberg, with Keith Balon, considered and evaluated the secretaries, clerks and others in the department to see whose hours could be changed and who had the most work flexibility. Steinberg also discussed his selection with Mr. Harwell. Petitioner's duties as secretary were more flexible and less demanding than those of Jean Ash Webb, Dianna Moyer, Becky Savilla, and Linda Crews, who were other employees of the advertising department considered for the move. Jean Ash Webb and Linda Crews could not be moved into the ad-assist position because they had specialized jobs to perform and because they had deadline functions which required their presence at a specific time in the morning and, thus, dictated their departure time in the evening. Also, Dianna Moyer worked for Keith Balon and the sales staff, and Ms. Savilla worked for other supervisors. Steinberg did not have anyone other than Petitioner to place into the ad-assist position. Harwell agreed with Steinberg's decision. There was a legitimate business reason for changing Petitioner's hours to 10:00 a.m. to 7:00 p.m. The Democrat is a twenty-four-hour business. Employees other than Petitioner have left the company because they would not work the hours they were assigned. Petitioner informed Steinberg and others that she would not accept the change in her hours and that she would look for another job. Petitioner complained to other employees about the change in her hours and made derogatory remarks about Steinberg. Mr. Harwell told Steinberg that he should get a timetable for Petitioner's departure so that new people could be interviewed for the position, and he suggested a two-week period. Harwell also instructed Steinberg to caution Petitioner about "bad-mouthing" either the company or Steinberg during her remaining time at The Democrat. He instructed Steinberg that if Petitioner made statements which could hurt the morale of the department, she should be terminated immediately. Steinberg initially advised Petitioner that she could continue to work at The Democrat until she found a new job so long as she did not make derogatory remarks about him or The Democrat. Petitioner initiated conversations with other employees in which she complained about Steinberg. These remarks were creating a morale problem in the department. She also told other employees that her telephone was being tapped. On January 22, 1979, Steinberg asked Petitioner for a timetable for her expected departure so that plans could be made for her replacement. Petitioner refused to provide a timetable. Petitioner continued to make derogatory remarks about Steinberg. Upon the instructions of Mrs. Tucker, Steinberg discharged Petitioner on January 23, 1979. Upon Petitioner's termination, another person assumed the ad-assist duties in the 10:00 a.m. to 7:00 p.m. time slot. The day Petitioner was discharged, she interviewed with Keith Balon, the retail advertising manager, for a position as an outside salesperson in the advertising department. Steinberg was aware of this interview and did nothing to prevent Petitioner from interviewing or from obtaining the position. In fact, he did not include his private memoranda in her personnel file and did not inform Mr. Balon of the existence of such memoranda or their contents. Outside salespersons for The Democrat regularly worked until 7:00 p.m. and frequently as late as 8:30 p.m. in order to complete their duties for that day. Petitioner gave no explanation regarding how she could work those hours for Mr. Balon when she had refused to work until 7:00 p.m. for Mr. Steinberg. Balon hired another person whom he believed to be more qualified than Petitioner. His decision was not made to discriminate against Petitioner in any way. In October, 1978, Steinberg gave Petitioner a 3" X 5" card stating "from one who is one to one who could be one Thanx Marty." Above that notation was drawn a large six-pointed star. Steinberg gave the card to Petitioner in response to several gifts given to him by her and her statement to him that she wanted to be his "Jewish mother." The card did not have any sexual connotation, and Petitioner did not perceive any sexual connotation to the card. Steinberg frequently worked on Saturdays after having been out of the office during the latter part of the workweek. He called Petitioner on occasion at her home on Saturday mornings when he had a question about what had happened at work. Steinberg also called his other employees at their homes on Saturday mornings for the same purpose. Although some social conversation did occur during the calls to Petitioner, the calls were not used to sexually harass her. There were no statements made about sex during these calls. When Petitioner announced her engagement to Mr. Selvaggio, Steinberg expressed a concern since an employee of his would be married to another department head. There was no sexual connotation to this remark. By Petitioner's own testimony, this remark related to Steinberg's concern for the confidentiality of certain information concerning his department. He also discussed his concern about confidentiality with Mr. Harwell and with Mrs. Tucker during this same time period. Steinberg once mentioned to James Reeves, Petitioner's then husband, that Petitioner was like an "office wife." Reeves did not consider the remark to have any sexual connotation but rather understood that Steinberg meant that Petitioner was his confidant. Petitioner married Mr. Selvaggio, who was then the promotion manager of The Democrat, on December 21, 1978. There was some confusion between Steinberg and Petitioner regarding the time she was to take off for her wedding. However, Petitioner admits that this was simply a misunderstanding. This confusion was not an incident of sexual harassment. There were two romantic interludes between Petitioner and Steinberg which occurred in the board room at The Democrat. The first incident occurred in September, 1978, when Petitioner was helping to compile and collate the Belden (Building) Study, which was an advertising research study that had been made. Petitioner complained about having to perform such a menial task although Rebecca Bradner, a supervisor, participated in the collating as did several other employees. Petitioner told Ms. Bradner that the collating was not Petitioner's job, that she was going to lunch, that she would take a long lunch, and that if Steinberg did not like that, he could come in and tell her so. Bradner relayed this information to Steinberg. Steinberg then came to the board room. While Petitioner and Steinberg were alone in the board room, he kissed her, and she kissed him. This was a voluntary act on the part of both persons. The second incident occurred several weeks later when Steinberg invited Petitioner to walk to the board room with him. When they got there, they began kissing each other. Steinberg touched Petitioner's breasts, and Petitioner placed her hands on his genitals. Again, each participated willingly and voluntarily. Steinberg's only superiors at The Democrat were Mrs. Tucker and Mr. Harwell. Petitioner admitted she never reported the board room incidents or any alleged incidents of sexual harassment to either of those persons, to any other management or supervisory personnel at The Democrat, or to any other employee of The Democrat. Further, neither Harwell nor Tucker, nor any other management or supervisory personnel at The Democrat had any knowledge of any alleged incidents of sexual harassment. Petitioner admitted that Steinberg never expressly or indirectly conditioned her continued employment or any term or condition of her employment upon acceptance of sexual advances. Petitioner does not know of anyone who was ever terminated from employment at The Democrat because he or she filed a complaint about a supervisor for any reason, nor of any employee who was ever fired because of making allegations of sexual harassment against a supervisor. On one occasion, Petitioner told Mrs. Tucker that Steinberg wanted to know where and with whom Petitioner went to lunch. This occurred in connection with the concern of Steinberg that Petitioner was returning late from United Way luncheons. Tucker agreed to speak with Steinberg about Petitioner's duties with the United Way. Petitioner told Tucker during this conversation that Steinberg was infatuated with Petitioner; however, Petitioner did not indicate that she found the alleged infatuation to be a problem for her, and she specifically did not inform Tucker of any alleged sexual advance or sexual harassment. Further, Petitioner later told Tucker that things had improved. The Democrat conducts what are called "management coffee breaks," at which "rank and file employees" meet with the publisher, Mr. Harwell, and the personnel director, then Mrs. Tucker. Supervisors and department heads are specifically excluded from attending. These conferences are used so that the employees may present grievances, complaints, or discuss any other problems or policies that they wish. At these sessions, employees are encouraged to speak with management privately on matters that cannot be discussed in a group meeting. Petitioner attended one of these conferences and could have used it to bring her alleged problems to management's attention. The Tallahassee Democrat's employee handbook contains a statement of policy which prohibits discrimination. The Democrat has a policy regarding supervisors having affairs with employees. Two supervisors, one male and one female, had previously been terminated because of sexual relationships with their employees. Other employees of The Democrat knew about these supervisors being terminated, Mr. Harwell testified that he would have taken corrective action by terminating Steinberg had Harwell known of any sexual harassment by Steinberg. Petitioner presented no evidence of discrimination based upon her sex or marital status and failed to request any affirmative relief.
Recommendation Based upon the foregoing findings of fact and conclusions of law, it is RECOMMENDED: That a final order be entered by the Florida Commission on Human Relations declaring that Gail C. Selvaggio was not discriminated against on the basis of her sex or marital status and dismissing her Petition for Relief with prejudice. RECOMMENDED this 18th day of June, 1981, in Tallahassee, Florida. LINDA M. RIGOT, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 18th day of June, 1981. COPIES FURNISHED: Edward S. Jaffry, Esquire S. Jack Carrouth, Esquire Horne, Rhodes, Jaffry, Horne & Carrouth Post Office Box 1140 Tallahassee, Florida 32302 C. Gary Williams, Esquire Charles L. Early, Jr., Esquire Ausley, McMullen, McGehee, Carothers & Proctor Post Office Box 391 Tallahassee, Florida 32302 Dana Baird, Esquire Assistant General Counsel Florida Commission on Human Relations 2562 Executive Center Circle, East Suite 100, Montgomery Building Tallahassee, Florida 32301 Mr. Norman A. Jackson Executive Director Florida Commission on Human Relations 2562 Executive Center Circle, East Tallahassee, Florida 32301
The Issue The issue is whether Respondent committed an act of discrimination in employment based on age, in violation of Section 760.10(1)(a), Florida Statutes.
Findings Of Fact Petitioner was born on December 11, 1951. She was employed by Respondent from 1977 until December 27, 1999, at which time Respondent terminated her. During the entire term of her employment, Petitioner has served as an outside sales representative. As an outside sales representative, Petitioner was typically assigned a territory within which she was to serve existing advertisers and develop new advertisers. Petitioner often helped customers prepare their advertisements and plan and budget their advertising campaigns. While employed with Respondent, Petitioner helped train Mr. Fine, who has been employed with Respondent for nearly 13 years. Mr. Fine is currently the National Advertising Director, but, during the time in question, served as the Broward Advertising Sales Manager, and, as such, he supervised Petitioner. He served as the Broward Advertising Sales Manager from September 1998 through February or March 2000. While Broward Advertising Sales Manager, Mr. Fine supervised eight sales representatives. Mr. Fine found that Petitioner was strong in persuasiveness, but weak at times when she displayed a negative attitude and sense of entitlement to her job and her way of doing her job. She also treated customers inconsistently. In February 1999, Mr. Fine disciplined Petitioner for her handling of an internal fax that the Broward office received from an employee of Respondent in another office. The fax was addressed to a member of management and contained salary information about five persons in the office. Petitioner happened to find the fax and revealed its contents to her coworkers before delivering it to the addressee. When Mr. Fine reprimanded Petitioner for her actions, she denied any wrongdoing. Next, Mr. Fine began receiving complaints from various of Petitioner's customers, mostly over a relatively short period of time. A marketing person at the Swap Shop complained that Petitioner was brusque in dealing with her. Another customer representative mentioned that Petitioner had criticized one of her coworkers in suggesting that the customer place all of its business with Petitioner. A similar situation arose with another customer, to whom Petitioner claimed that its outside sales representative handled only smaller accounts. A representative of the Florida Philharmonic Orchestra requested that Mr. Fine assign it a new outside sales representative because Petitioner raised her voice and talked down to its young, inexperienced marketing person. On June 29, 1999, Mr. Fine sent a memorandum to his supervisor, Donna Sasser, who was then Advertising Director. The memorandum describes Petitioner as "dynamite" and expresses concern as to when she "will blow and who she will hurt." At the time, Mr. Fine was concerned that Petitioner's actions might undermine morale among the other staff for whom he was responsible. Ms. Sasser advised Mr. Fine to communicate to Petitioner specific expectations in terms of job performance and customer interaction in particular. Mr. Fine met with Petitioner and detailed his problems with her job performance and his expectations for improvement. By memorandum dated July 30, 1999, Mr. Fine memorialized the meeting, including specific customer complaints, and warned that Petitioner's job "will end, even within the next few weeks, if you are unable to achieve the following: no additional customer complaints, monthly goals [met] on a consistent basis; positive, collaborative attitude with co-workers, customers, and managers; [and] acceptance of responsibility for what goes well and what does not go well." Petitioner resisted Mr. Fine's criticism. By memorandum dated August 22, 1999, she defended her actions by pointing to shortcomings elsewhere within Respondent. Significantly, the memorandum does not address the complaints about brusque, discourteous treatment of employees of customers. At this point, Mr. Fine, who was a young manager, was legitimately concerned about whether Petitioner's attitude would undermine his ability to do his job. Mr. Fine resolved to assess over the next three to six months whether Petitioner met the goals that he stated in the July 30 memorandum. In late October 1999, a representative of the Cleveland Clinic complained about Petitioner's handling of its account. The complaints included Petitioner's "flip attitude" and "lack of professionalism." Two months later, Mr. Fine received a more serious complaint because it involved a loss of revenue to Respondent and the advertiser. Due to some miscommunication, Respondent published the wrong advertisement for a customer. When the customer's representative telephoned Petitioner and complained, she blamed someone at the Fort Lauderdale Sun Sentinel, who had supplied her the wrong advertisement for publication. When she did not call him back on the day that she had promised, the customer representative called Respondent, complained about the poor handling of the account, noted the reduction in advertising from his company over the past year as compared to the prior year, and requested a different outside sales representative. Mr. Fine consulted with Ms. Sasser and Janet Stone, the Human Relations specialist assigned to advertising. The three agreed that Respondent should terminate Petitioner. Their decision was submitted through four levels of management--up to the level of Publisher--and each level approved the decision before it was implemented. On December 27, 1999--six days after the receipt of the last complaint--Mr. Fine and Ms. Stone met with Petitioner and told her that she had been terminated. At the hearing, Petitioner presented evidence of a contemporaneous complaint about age discrimination that she had made to a Human Relations specialist who had since left the employment of Respondent. Respondent contested this assertion, but Petitioner's August 22 memorandum states that, as a "female over 40 I feel the harassment and stress that you have been putting on me is totally unnecessary." Although not a formal complaint concerning age discrimination, this memorandum is an early mention of Petitioner's age within the context of harassment. Based on the testimony of coworkers, Mr. Fine was a high-pressure manager, given to yelling, but he did not make age-related comments to Petitioner. Even if Petitioner had timely made comprehensive complaints about age discrimination, the record in this case does not support her claim that her termination was due to age discrimination. Mr. Fine hired two outside sales representatives over 40 years old, and the only other outside sales representative whom he fired was under 40 years old. More importantly, he treated employees the same without regard to age. Most importantly, Petitioner's job performance provided Mr. Fine with ample reason to fire her. Without regard to the quality of the support that Petitioner received, customer satisfaction is paramount in advertising. In a competitive environment, Mr. Fine justifiably sought satisfaction of all customers, not just favored customers. Mr. Fine could not reasonably allow Petitioner to continue to treat discourteously representatives of advertisers, regardless of the merits of her claims of inadequate support. Past evaluations suggest that interpersonal relations was never Petitioner's strength. Despite an obvious talent at advertising sales and considerable experience, Petitioner's frustrations with the perceived incompetence of her coworkers and customers' employees weakened her interpersonal skills beyond a critical point, so that her other strengths no longer offset this important deficit.
Recommendation It is RECOMMENDED that the Florida Commission on Human Relations enter a final order dismissing Petitioner's Charge of Discrimination. DONE AND ENTERED this 2nd day of July, 2002, in Tallahassee, Leon County, Florida. ROBERT E. MEALE Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 2nd day of July, 2002. COPIES FURNISHED: Cecil Howard, General Counsel Florida Commission on Human Relations 2009 Apalachee Parkway, Suite 100 Tallahassee, Florida 32301 Denise Crawford, Agency Clerk Florida Commission on Human Relations 2009 Apalachee Parkway, Suite 100 Tallahassee, Florida 32301 Jan Hall-Szugye 3834 Panther Creek Road Clyde, North Carolina 28721 Ellen M. Leibovitch Adorno & Yoss, P.A. 700 South Federal Highway, Suite 200 Boca Raton, Florida 33432
Findings Of Fact Petitioner was employed as a part-time store clerk from January 11, 1983 until January 14, 1986 at Respondent's 7-Eleven Store No. 1413-25564 located at 2990-16th Street, North, St. Petersburg, Florida. Respondent is an employer within the terms of the Human Rights Act of 1977, Chapter 760, Florida Statutes. Upon employment by Respondent, employees must sign an Awareness Form which provides, in pertinent part, that "consumption or possession of alcoholic beverages or illegal drugs while on company property (this includes the parking lot and rear of the store)" is grounds for dismissal. Petitioner signed this Awareness Form, and thereby acknowledged having been informed of Respondent's disciplinary policies set forth on said form. On December 25, 1985, at approximately 1:15 a.m. Petitioner and coworker Debbie Meany consumed one bottle of champagne in 7-Eleven Store 1413- 25564 after closing-up the store at 1:00 a.m. Meany had purchased the champagne during their shift on the evening of December 24, and then drank it with Petitioner "because it was Christmas Eve." Meany testified that she became drunk while she and Petitioner drank the bottle of champagne. Petitioner's testimony at hearing that the champagne he drank with Meany was nonalcoholic is specifically rejected based upon Meany's testimony, the fact that nonalcoholic champagne was not sold in this 7-Eleven store at the time, and the fact that he referred to the champagne as "booze" in a letter written to Fred Nichols, Respondent's personnel manager, on January 10, 1986. Meany was fired along with Petitioner for consumption of alcoholic beverages on the premises, and has no apparent motive to be untruthful in her contention that the champagne was alcoholic. Due to an audit of 7-Eleven Store 1413-25564 which revealed a merchandise shortage of approximately $1300, polygraphs were ordered for all store employees. Meany's polygraph was on January 6, 1986, and it was during her examination by Robert Rathbun that she admitted to consuming the bottle of champagne with Petitioner. She signed a statement, which she confirmed at hearing, indicating Petitioner opened the bottle, and they drank the champagne together. Petitioner was polygraphed on January 10, 1986, after executing a consent form, and during the course of his examination, he showed deception in his answers to questions about the use of alcohol on the job. When he was confronted with this indication of deception and with Meany's statement, he admitted to drinking champagne with Meany in 7-Eleven Store 1413- 25564 after they had closed at 1:00 a.m. on December 25, 1987. Thereafter, Petitioner met with Mike McKenzie, field manager, and Larry Good, district manager, on January 13, 1986 to discuss the results of the polygraph. McKenzie and Good also met with Meany. Petitioner was terminated on January 14, 1986 for consumption of an alcoholic beverage in the 7-Eleven store at which he worked. Petitioner did not disclose any handicap or physical condition which would prevent him from performing the job of store clerk on his initial application for employment, or on an application he completed and submitted to Respondent on May 27, 1986, subsequent to his termination. There is no evidence that Petitioner ever informed McKenzie or Good of his handicap. However, Petitioner's immediate supervisors Watley and Egge, store managers, did know of his handicap, and did not require him to "front shelves." This is a normal part of a store clerk's duties by which merchandise is brought forward to the front of a shelf to take the place of products that have been purchased. It has been established that Petitioner is physically handicapped due to the injury of both his knees while in the Army. He was discharged from the Army due to his disability. This handicap makes it very difficult for him to bend down, and therefore the accommodation which Watley and Egge provided was reasonable and appropriate under the circumstances. Respondent does hold Christmas parties at which alcoholic beverages are consumed in its district office. However, the district office is a separate office building and there is no 7-Eleven store located at said office. Since the district office is not a store licensed to sell alcoholic beverages, the consumption of alcohol at that location is not a violation of Respondent's policy about the consumption of alcohol set forth on the Awareness Form. A review of Petitioner's personnel file indicates prior warnings for writing bad checks, and making unacceptable advances on a female coworker.
Recommendation Based on the foregoing, it is recommended that a Final Order be issued by the Florida Commission on Human Relations dismissing Petitioner's charge of discrimination against Respondent. DONE and ENTERED this 10th day of March, 1988, in Tallahassee, Florida. DONALD D. CONN Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 10th day of March, 1988. APPENDIX Rulings on Petitioner's Proposed Findings of Fact: Adopted in Finding of Fact 9. Rejected as not based on competent substantial evidence. Rejected as irrelevant, unnecessary and as simply a summation of testimony which is not persuasive. Rejected in Findings of Fact 4, 6, 7 and 12. Rejected in Finding of Fact 4. Rejected as irrelevant. Rejected in Finding of Fact 4. Rejected as not based on competent substantial evidence. Rejected in Findings of Fact 5 and 6. Rejected in Finding of Fact 6. Rejected in Finding of Fact 12. Rejected as not based on competent substantial evidence. Rulings on Respondent's Proposed Findings of Fact: Adopted in Findings of Fact 1 and 2. Adopted in Finding of Fact 1. 3-5. Adopted in Finding of Fact 3. 6-7. Adopted in Finding of Fact 4. 8-10. Adopted in Finding of Fact 5. 11-13. Adopted in Findings of Fact 4 and 6. 14-15. Adopted in Findings of Fact 4 and 7. Rejected as irrelevant and unnecessary. Adopted in Finding of Fact 4. 18-19. Rejected as unnecessary. Adopted in Finding of Fact 11. Adopted in Finding of Fact 12. 22-24. Adopted in Finding of Fact 8. 25. Adopted in Findings of Fact 7 and 8. COPIES FURNISHED: WINSTON S. MCCLINTOCK 475 - 41ST AVENUE, NORTH ST. PETERSBURG, FLORIDA 33703 E. JOHN DINKEL, ESQUIRE POST OFFICE BOX 1531 TAMPA, FLORIDA 33601 DONALD A. GRIFFIN EXECUTIVE DIRECTOR FLORIDA COMMISSION ON HUMAN RELATIONS 325 JOHN KNOX ROAD BLDG. F, SUITE 240 TALLAHASSEE, FLORIDA 32399-1925 SHERRY B. RICE, CLERK HUMAN RELATIONS COMMISSION 325 JOHN KNOX ROAD BLDG. F, SUITE 240 TALLAHASSEE, FLORIDA 32399-1925
Findings Of Fact Procedural background: By order dated July 10, 1984, notice of hearing was sent to all parties for a hearing on August 22, 1984. That hearing date was continued and rescheduled to September 11, 1984. On September 11, 1984, counsel for Petitioner moved for a continuance because he had failed to calendar the hearing and was thus not prepared. A continuance was granted upon the condition that Petitioner and counsel pay to Respondent its expenses and reasonable attorney's fees for attending the September 11, 1984, hearing. An order was subsequently entered setting the amount of expenses and attorney's fees. The Petitioner was employed as a store manager at Respondent's Majik Market Store Number 40105, Pinellas County, Florida. He had previously been a convenience store manager for 14 years, and was employed by the Respondent from December 1980 until he was terminated on August 23, 1984. The Petitioner is Black. In the relevant months prior to his termination, he was assigned to the late evening shift, 11:00 p.m. to 7:00 a.m. Ken Hinton was assigned to the 3-11 p.m. shift, and is White. Helen Lee was working the 7:00 a.m. to 3:00 p.m. shift. She is White and had worked at this store for many years. Other persons worked the three shifts on a temporary basis when one of the three regular employees had a day off. Each of the above persons, including the Petitioner, was responsible for sales of merchandise from the store, which included accounting for cash received and inventory, and protection of merchandise from theft. In the summer of 1982, the Majik Market store number 40105 experienced a loss of inventory at the end of several months of more than $1,000 in each month. These shortages were noted in normal monthly audits. Respondent requires employees to submit to a polygraph test prior to employment and when inventory shortages in a month at a single store exceed $1,000. Pursuant to that policy, all three employees of store number 40105 were asked to take a polygraph test administered by Respondent's security manager, Boyd Brown. Part-time employees were not asked to take the test. Petitioner, Helen Lee, and Ken Hinton, all were given a polygraph test. In the opinion of Mr. Boyd who administered the test, Petitioner did not answer truthfully when asked if he knew about or caused the inventory shortages. The relevant questions asked were "Did you steal money or merchandise" from the Respondent' s store. Mr. Boyd graduated from a polygraph school in Atlanta in 1972, has been licensed to administer polygraph examinations since 1974, and has worked in that field since that time. He has worked for Respondent since 1982. In Mr. Boyd's opinion, Helen Lee and Ken Hinton answered the same relevant questions truthfully. Petitioner was first notified that he was terminated by his area superviser, Richard Kenyon, who is the Group Supervisor of Majik Market stores for Pinellas County. Mr. Kenyon said he told Petitioner he was fired due to continuous inventory shortages. Petitioner testified that he was not told why he was being terminated when he met with Mr. Kenyon, but admitted that he was told that "security wouldn't allow me to work." It is apparent that Mr. Kenyon did not explain in detail why he was terminating Petitioner, and did not specifically mention failure of the polygraph as a reason. Several days later, Petitioner received a written separation notice, Petitioner's Exhibit 2, which mentioned only a "drastic" reduction in shift sales compared to other employees. On August 20, 1982, Mr. Kenyon signed an "employee separation form," Petitioner's Exhibit 3, which listed "low shift sales inventory shortages" and "shift sales drastically reduced with this employee" as circumstances surrounding the termination. Mr. Kenyon said he prepared both Petitioner's Exhibit 2 and 3 at about the same time. It does not appear that Petitioner's Exhibit 3 was shown to or given to Petitioner. In neither separation form did the Respondent mention the failed polygraph examination. The Florida Commission on Human Relations, in the process of its investigation, sought from the Respondent all the reasons for termination of Petitioner. Petitioner's Exhibits 5 through 8 contained correspondence with Jack B. Lightfoot, Director, Employee Relations, for the Respondent. Respondent's correspondence with the Commission on Human Relations does not at any point rely upon a failed polygraph examination as the reason for terminating petitioner. Paragraph 6 of a letter to Commission Representative Robert Jones states that "Polygraph not pertinent to case and results are never released without full releases because of state licensing law and Privacy Act." At the hearing on November 2, 1984, Richard Kenyon testified that it was very difficult to accurately determine why inventory shortages occur or to pinpoint responsibility. One method used is to compare shift sales to see if any particular shift is experiencing unusually low sales. Use of the polygraph test is another means. Respondent claimed to have used both methods with regard to the inventory shortages at Store Number 40105 in the summer of 1982. Mr. Kenyon testified that the late evening shift, 11:00 p.m. to 7:00 a.m., which was Petitioner's shift, was more prone to having inventory shortages, and afforded more opportunity to steal. Mr. Kenyon testified that he considered shift sales, store paperwork, the longevity of Helen Lee, the auditor's findings of inventory shortages, and the results of the security interview (polygraph) in determining whether to terminate the Petitioner. Mr. Kenyon further testified that he was most influenced by the fact that petitioner had failed the polygraph test as the basis for terminating him. Mr. Kenyon stated that he had never kept an employee who failed the polygraph test. Respondent's Exhibits 1 and 2 are summaries of the terminations of employees from Store Number 40105 from January 10, 1980 through at least August 20, 1983. Of the thirty-five (35) persons on this summary who are identified by race, two (2) were Black. This exhibit further shows that a large number of persons who were not of the Black race were terminated for reasons similar to those given for termination of Petitioner. The other Black person terminated at this store was Joe Stephens, who was the person who replaced Petitioner when he was terminated in August, 1982. Mr. Stephens was terminated on January 19, 1983. All of the persons listed on Respondent's exhibit 1 who have a circle around the coded reason for termination were terminated for inventory control related reasons, and all of these were White. Respondent's attempts to show that Petitioner's shift sales were significantly lower than other sales persons were not persuasive. Mr. Kenyon referred to Petitioner's Exhibit 4, which sets forth all shift sales at Store Number 40105 for the weeks of July 29, 1982 through October 14, 1982. He pointed to the fact that Petitioner sold only $74.75 on Friday, July 23, 1982, and then sold $186.60 the next night, while Helen Lee on the afternoon shift sold $173.99 and $270.49 for the same Friday and Saturday, respectively. But Mr. Kenyon admitted that Petitioner's late night shift was "notoriously low" in sales due to the lack of customers, and that Ms. Lee's day shift was the most productive. Further, comparison of Petitioner's Friday evening sales with the sales of other persons covering that shift after he was terminated shows their sales to be essentially the same. Similarly, sales for all persons, including Petitioner, were proportionately greater on Saturday nights. Petitioner's Saturday night sales, however, were not significantly less than the sales of other persons for the same shift. Mr. Kenyon's claim that Petitioner's sales were "drastically reduced" has no basis in fact, and indicates that Mr. Kenyon did not in fact closely analyze the sales figures with respect to Petitioner. Mr. Brown, who administered the polygraph test, disclosed the results of the tests of all three shift employees at Store Number 40105 to Mr. Kenyon. Although he did not inform the Petitioner explicitly, Mr. Kenyon did rely upon the results of the polygraph test in making his decision to terminate the employment of the Petitioner, and did inform the Petitioner that "security" had advised not to employ Petitioner any longer. There was no evidence that the polygraph test was administered or graded differently with respect to Petitioner, or that it had been used in the past to discriminate against Black persons.
Recommendation Based upon the findings of fact and conclusions of law recited herein, it is RECOMMENDED that the Florida Commission on Human Relations enter a final order that the Petitioner has failed to establish that Respondent violated Section 760.10(1), Florida Statutes, with respect to the termination of the Petitioner in August 1984. RESPECTFULLY SUBMITTED and ENTERED this 4th day of December, 1984. WILLIAM C. SHERRILL, JR. Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 4th day of December, 1984. COPIES FURNISHED: Morris Milton, Esquire P.O. Box 13517 St. Petersburg, Florida 33733 Robert D. McIntosh, Esquire P.O. Drawer 7025 Ft. Lauderdale, Florida 33338 Mr. Donald A. Griffin, Executive Director Fla. Commission of Human Relations 325 John Knox Road Suite 240, Building F Tallahassee, Florida 32301
The Issue The issues in this case are whether Respondent violated Section 721.11 (4)(a), (h), (j), and (k), Florida Statutes (1995), through misrepresentations in the sale of timeshare estates as further stated in the Notice to Show Cause and, if so, what, if any, penalty should be imposed. (All statutory references are to Florida Statutes (1995) unless otherwise stated.)
Findings Of Fact Petitioner is the state agency responsible for regulating sellers of timeshare estates ("timeshares") within the meaning of Section 721.05 (27) and (28). Respondent is a seller of timeshares and a licensed real estate sales person in Florida with approximately 20 years' experience in timeshares. Petitioner charges in the Notice to Show Cause that Respondent violated Section 721.11 (4)(a), (h), (j), and (k). The Notice to Show Cause charges that Respondent violated the respective statutes by misrepresenting: a fact or creating a false or misleading impression regarding a timeshare plan or promotion; the nature or extent of an incidental benefit, within the meaning of Section 721.05(17); the conditions of exchange; and the availability of a resale or rental program. Vocational Corporation ("Vocational") developed a timeshare resort in Orlando, Florida, known as Club Sevilla ("Sevilla"). Vocational hired Respondent in July 1995 as Vocational's sales manager responsible for the sale of all timeshares at Sevilla. Vocational agreed to hire Respondent as an independent contractor and to pay Respondent up to 40 percent commission on cash sales and four to six percent commission on other sales. In 1996, Respondent earned between $380,000 and $457,000 selling timeshares for Sevilla. Respondent employed four or five salespersons to assist him in the sale of Sevilla timeshares. Some of those salespersons testified at the hearing. During the time Respondent sold Sevilla timeshares, Respondent was the president and director of MPW Marketing, Inc. ("MPW"). Respondent's wife was the secretary and treasurer of MPW. MPW employed at least one sales person to sell timeshares at Sevilla. MPW was dissolved in 1997 for failure to file its annual report. As sales manager for Vocational and as an independent contractor, Respondent was solely responsible for the design and content of the salesprogram used to sell timeshares at Sevilla and for the conduct of salespersons employed by Respondent and MPW. When Vocational learned the particulars of Respondent's sales program through complaints from purchasers, Vocational made reasonable efforts to remedy the harm to purchasers and to eliminate the offending practices. Respondent's sales program was directed at occupants of Sevilla. Occupants included owners of Sevilla timeshares, renters, and owners of other timeshare units who were occupying a timeshare at Sevilla through an exchange program. When a new group of occupants arrived at Sevilla, the sales program began with a reception in the form of a pool party, a breakfast, or a dinner. Respondent assigned a salesperson to certain guests and sometimes assigned himself to a few guests. At the reception, each salesperson and Respondent would meet their assigned guests and make appointments for a timeshare sales presentation and tour. At the sales presentation, each salesperson sat at a table with prospective purchasers and performed the sales presentation designed and required by Respondent. Upon completion of the sales presentation, Respondent would come to the table to close the sale. Respondent would go over the sales presentation and emphasize certain points. On October 24, 1995, Clarence and Maxine Shelt attended a sales presentation with their friends Raymond and Charlene Sindel from their respective home city of Delta, Ohio. The Shelts and Sindels owned other timeshares not located at Sevilla. Maxine Shelt purchased a timeshare at Sevilla because Respondent promised her and her husband that they could use the exchange program for a timeshare anywhere in the world for $79, 52 weeks a year. The Shelts tried to use the exchange program through Tri Realty, Inc. ("Tri Realty") because that was the agency Respondent told the Shelts to use. Tri Realty denied any knowledge of such a program, and Tri Realty never offered such a program. Respondent represented that the Shelts could sell their two timeshares relatively easily at a price stated in a price list Respondent provided to the Shelts. Based on Respondent's representation, the Shelts listed their two timeshares for resale with Tri Realty. The two timeshares never sold. The Shelts attempted to discuss the sale of their units with Respondent several times. Respondent became unavailable to the Shelts after the second conversation. Mrs. Shelt went to Orlando and complained to a representative of Vocational concerning her dissatisfaction with Respondent. Vocational refunded the Shelt's purchase money for the Sevilla timeshare. Respondent also represented to the Sindels that the exchange program at Sevilla would allow them to exchange their Sevilla timeshare for a timeshare anywhere in the world for $79, 52 weeks a year. After purchasing a timeshare at Sevilla, the Sindels attempted to use the exchange program described by Respondent but found that no such exchange program existed. Respondent also represented to the Sindels that their existing timeshares could be sold "before the end of the year" and that the sale proceeds would pay for the timeshare at Sevilla. Respondent provided the Sindels with a computer printout purporting to be the market value for the existing timeshares. Respondent represented that the timeshares would sell very quickly, especially those located on the resort coast. The Sindels listed their timeshares with Tri Realty, but the timeshares never sold. The Sindels complained to Vocational about Respondent. Vocational refunded the purchase price of the Sevilla timeshare to the Sindels. On June 26, 1996, Mildred and Eugene Plotkin attended a sales presentation from their home in Greenville, North Carolina. Respondent represented that the Plotkins would be able to obtain a credit card that they could use to pay for the Sevilla timeshare at a very low interest rate. Respondent further represented that he could sell the Plotkin's existing timeshare in Las Vegas in two months so that they could use the sales proceeds to pay off the credit card. The Plotkins used their two existing credit cards to pay for a Sevilla timeshare. The credit card promised by Respondent never came. The Las Vegas timeshare did not sell in the time promised. The Plotkins did not get their low-interest credit card, found that the Las Vegas timeshare had not sold, and began receiving interest charges on their existing cards for the purchase of the Sevilla timeshare. Respondent paid the credit charges incurred by the Plotkins with checks issued on the MPW account. On July 26, 1996, Susan Bailey attended a sales presentation from her home in Wiggins, Mississippi. Respondent represented that Ms. Bailey would receive a credit card with a credit line of $20,000 and an interest rate of 8.9 percent. Respondent gave Ms. Bailey what he represented to her as a confirmation of her right to the credit card. Ms. Bailey purchased a Sevilla timeshare in reliance upon Respondent's representations but never received a credit card. She attempted to speak to Respondent but discovered that Respondent had resigned his position at Sevilla. She spoke to someone else at Sevilla and applied for a different credit card with a lower line of credit and a higher interest rate. On December 11, 1996, Larry and Carla Eshleman attended a sales presentation from their home in Downingtown, Pennsylvania. Respondent represented that Mr. Eshleman would receive a credit card with a credit line of $25,000 and an interest rate of 8.9 percent. Respondent represented that the Eshlemans could use the credit card to pay for the Sevilla timeshare and that Respondent would sell the two timeshares already owned by the Eshlemans before the first payment was due on the new credit card. Respondent provided a computer printout purporting to be the market value of their existing timeshares. Respondent told the Eshlemans that he would pay for families to stay in the Eshelmans' existing timeshares and make sales presentations to these families. Respondent represented that it was in his best interest to sell the timeshares quickly because it would cost Respondent $149 to send each family to each timeshare for eight days and seven nights. Respondent assured the Eshelmans that it would be no problem to sell the existing timeshares because Respondent had done it many times. Respondent also told the Eshelmans that Respondent could rent the Sevilla timeshare for $875 for the lockout unit, $1050 for the one bedroom unit, or $1,650 for both units in any year the Eshelmans did not use the Sevilla timeshare. Respondent represented that the Eshelmans could make money off the timeshare when they did not use it. In reliance upon Respondent's representations, Mr. Eshelman purchased a Sevilla timeshare. Respondent never sold the Eshelmans' existing timeshares. When the Eshelmans complained to Vocational, Vocational refunded their purchase money. On September 19, 1996, Thomas and Betty Prussak attended a sales presentation from their home in Medina, Ohio. Respondent asked Mr. Prussak if Mr. Prussak wanted to buy a Sevilla timeshare. Mr. Prussak stated that he already owned two weeks of timeshares and wanted to sell those two. Respondent offered to sell the existing timeshares if Mr. Prussak purchased a timeshare from Respondent. Respondent represented that the sales proceeds from one of the existing timeshares would pay off the Sevilla timeshare and Mr. Prussak would have cash in hand from the sale of the second timeshare less a 10 percent commission to Respondent on both timeshares. Respondent represented to Mr. Prussak that Respondent would sell the existing timeshares for market value. Respondent made a telephone call or fax communication to an unknown source and then told Mr. Prussak that the two existing timeshares were worth $12,000 each. Respondent represented to Mr. Prussak that Respondent would probably have one of the two existing timeshares sold by the end of the week because it was a "Five Star" unit. Respondent represented that his sales representatives would "get right on it" and that all they had to do was to take people there and "they'll go." In June 1996, Mrs. Cynthia Richards and her now deceased husband attended a sales presentation at Sevilla. Mrs. Richards now lives in Randolph, New Jersey. Respondent represented that if the Richards purchased a Sevilla timeshare, Respondent would sell their existing timeshare for $2,000 over the purchase price of the Sevilla timeshare. Respondent represented that he had buyers in mind from England. The extra cash appealed to the Richards to pay off existing bills. The Richards purchased a Sevilla timeshare in reliance upon Respondent's representations. The existing timeshares never sold. Mrs. Richards attempted to telephone Respondent several times, but was never able to speak to Respondent. Vocational received approximately 50 other complaints from purchasers of Sevilla timeshares describing representations by Respondent similar to those described in previous findings. Petitioner provided Respondent with notice that Petitioner intended to use six of these 50 complaints as similar fact evidence pursuant to Section 120.57(1)(d). Findings based on similar fact evidence are set forth in paragraphs 33-40. In May 1996, Mr. and Mrs. Tim Malone attended a sales presentation from their home in Sturgeon Lake, Minnesota. Respondent represented that he would be able to sell the Malone's existing timeshare "by the end of the year" for its market value of $9,800. Respondent represented that he would pay for families to stay in the Malone's existing timeshare and attempt to sell the unit to them. Respondent assured the Malones that he would sell the existing unit before the end of the year because it cost Respondent to send potential buyers to the existing unit. In reliance upon Respondent's representations, the Malones purchased a Sevilla timeshare. Respondent never sold the Malone's existing timeshare. Respondent never sent potential buyers to the Malone's existing timeshare. The market value was less than $5,000. In July 1996, Mr. and Mrs. Phillip Lambert attended a sales presentation from their home in Sharon Hill, Pennsylvania. Respondent represented that he would be able to sell the Lambert's existing timeshare and that the Lamberts would receive a credit card they could use to pay for the Sevilla timeshare. The Lamberts purchased a Sevilla timeshare in reliance upon Respondent's representations. The Lamberts never received a credit card. Respondent never sold their existing timeshare. Vocational refunded the purchase money for the Sevilla timeshare to the Lamberts. In August 1996, Mr. Andrew Eger attended a sales presentation from his home in Orlando, Florida. Respondent represented that the exchange program at Sevilla would allow Mr. Eger to exchange his timeshare for another anywhere in the world for $149, 52 weeks a year. Mr. Eger discovered that the exchange program started at $149 for units available only in the following 59 days and that the least expensive exchange actually available any other time started at $350. Mr. Eger cancelled the purchase of his Sevilla timeshare within the 10-day rescission period provided in the written contract. Respondent threatened Mr. Eger with lawsuits and with refusing to refund the $8,000 due. In February 1997, Mr. David and Margaret Maybloom attended a sales presentation from their home in Staten Island, New York. Respondent represented that he would sell their existing timeshare for $3,000 and thereby subsidize the cost of the Sevilla timeshare. Respondent's sales person also represented that the Mayblooms would receive a credit card with a credit limit of $20,000 that they could use to purchase the Sevilla timeshare. The Mayblooms purchased a Sevilla timeshare in reliance upon Respondent's representations. They received a credit card with a credit limit of $6,000, but Respondent did not sell the existing timeshare. Vocational did not offer a resale, exchange, or rental program with a purchase of a Sevilla timeshare. Vocational did not have a contract for resale, exchange, or rental with Tri Realty. Vocational did not offer a credit card as an incidental benefit of purchasing a Sevilla timeshare. Vocational did not file the availability of a credit card as an incidental benefit pursuant to Section 721.075(1)(g). At the beginning of Respondent's tenure as sales manager, Vocational did offer a credit card as an incidental benefit for a short period. Vocational terminated the credit card program shortly after Respondent became sales manager. However, Respondent continued to offer the credit card to prospective purchasers as an inducement to purchase a Sevilla timeshare.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Petitioner enter a final order finding Respondent guilty of violating Section 721.11 (4)(a), (h), (j), and (k), entering a cease and desist order prohibiting Respondent from further violations of Chapter 721 in the sale of timeshares, imposing a civil penalty in the amount of $28,000, and requiring Respondent to pay the civil penalty within 45 days of the date of this Recommended Order by certified check made payable to the Treasurer, State of Florida, Department of Business and Professional Regulation which Respondent shall mail by certified mail to Mr. John Floyd, Investigator Supervisor, Department of Business and Professional Regulation, 1940 North Monroe Street, Tallahassee, Florida 32399-1030. DONE AND ENTERED this 13th day of April, 2000, Tallahassee, Leon County, Florida. DANIEL MANRY 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 13th day of April, 2000. COPIES FURNISHED: Philip Nowick, Director Florida Land Sales, Condos, Mobile Homes Department of Business and Professional Regulation Northwood Centre 1940 North Monroe Street Tallahassee, Florida 32399-0792 Barbara D. Auger, General Counsel Department of Business and Professional Regulation Northwood Center 1940 North Monroe Street Tallahassee, Florida 32399-0792 Janis Sue Richardson, Esquire Division of Florida Land Sales, Condominiums and Mobile Homes Department of Business and Professional Regulation Northwood Center 1940 North Monroe Street, Suite 60 Tallahassee, Florida 32399-1007 William S. Walsh 2156 Turnberry Drive, Oviedo, Florida 32756
The Issue Whether Petitioner’s application for licensure as a preneed sales agent should be approved.
Findings Of Fact Based upon the evidence presented at hearing, the following relevant Findings of Fact are made. Petitioner seeks a license as a preneed sales agent so that she may work at Good Shepherd Memorial Gardens Funeral Home (“Good Shepherd”). Petitioner plans to work as a family service advisor to help families with preneed services. A preneed sales agent assists families with planning for funeral or burial needs prior to death. Petitioner anticipates she would conduct meetings with potential customers at the cemetery or in their homes. Petitioner worked with Good Shepherd from January 2018 until June 2018. Although Petitioner is currently not employed at the funeral home, she anticipates that Good Shepherd would allow her to return to work if her application for licensure is approved. Respondent is the state entity responsible for regulating licensure of persons who provide preneed sales services under chapter 497, Florida Statutes. When applying for any license under chapter 497, Respondent considers whether the applicant has a criminal record. An applicant must disclose any felony offense that was committed within 20 years immediately preceding the application. The Board then considers the applicant’s criminal history and whether the applicant would pose an unreasonable risk to members of the public who might deal with the applicant in preneed transactions. Petitioner has a criminal history involving an incident that occurred two years ago. In September 2016, Petitioner’s husband placed Petitioner’s then eight-year-old daughter in a dog cage because the daughter had allegedly mistreated the family dog. Petitioner returned home from work, found her daughter in the dog cage, and removed her. In a separate but related incident, Petitioner watched her husband take her daughter to her bedroom. Petitioner entered the daughter’s bedroom and saw her husband spanking her child with a flip-flop sandal on her behind. At no point did Petitioner attempt to protect her daughter from her husband’s abusive actions or report him to the appropriate authorities. The abuse was ultimately reported by a roommate who lived in the home. On June 12, 2017, Petitioner (age 28) pled nolo contendere to one count of child neglect without great bodily harm, a third-degree felony, in violation of sections 827.03(1)(e) and 827.02(2)(d), Florida Statutes. The court sentenced Petitioner to: one day of jail time with credit for time served, probation for 24 months, 100 hours of community service (within the 18 months of probation), and peaceful contact with her daughter. Petitioner was also ordered to pay court costs and fees and fines in the amount of $937.00. Adjudication of guilt was withheld. Petitioner’s husband, who was not the child’s biological father, pled guilty to two counts of child abuse without great bodily harm. Among other things, he was ordered to have no contact with the child. Prior to the criminal offense at issue in this matter, Petitioner had no criminal history. In addition, Petitioner has had no known contact with law enforcement since the criminal offense. In a Notice of Intent to Deny issued on April 26, 2018, Respondent notified Petitioner that her application for a preneed sales agent license had been denied as follows: On June 7, 2017, Ms. Hoff pled no contest to a felony charge of child neglect without great bodily harm and was sentenced to 24 months of probation, 100 hours community service, assessed court costs and fines in the amount of $937.00, and her parental rights were terminated. The [A]pplicant stated that her criminal probation will not be completed until June 2019. The Applicant stated that she has not yet paid the fines and fees assessed in this [criminal] matter. The Applicant stated that she is still married to the gentleman she was married to at the time of the arrest. This gentleman was involved in the criminal allegations of child neglect. On May 1, 2018, Petitioner timely requested a hearing disputing the factual basis for the denial of licensure. Petitioner has completed 40 hours of the 100 hours community service requirement. She anticipates that she may be eligible for early termination of her probation after she completes the community service hours. Petitioner did not present any evidence of community service other than court- ordered community service. Prior to submitting her application, Petitioner completed approximately 150 to 175 hours of training in preneed sales, covering family planning, death certificates, Veterans Affair benefits, types of burial products, and financial plan development. Petitioner provided no explanation regarding why she did not protect her daughter from abuse. In addition, Petitioner continues to live with her husband and indicated that she has not yet divorced him due to financial reasons. Petitioner has not presented sufficient evidence to meet her burden to prove that she is not a danger to the public.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Board of Funeral, Cemetery, and Consumer Services enter a final order denying Shayla Hoff’s application for licensure as a preneed sales agent. DONE AND ENTERED this 19th day of September, 2018, in Tallahassee, Leon County, Florida. S YOLONDA Y. GREEN 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 19th day of September, 2018.
The Issue The issue posed for decision herein is whether or not the Petitioner is subject to the Florida corporate income tax for tax years 1972, 1973, 1974 and 1975 plus accrued penalties and interest since July 7, 1977, the date Petitioner was mailed a proposed notice, of deficiency by the Respondent, Department of Revenue.
Findings Of Fact Based on the evidence adduced at the hearing herein; the documentary evidence received; the Respondent's memorandum in support of the assessed deficiency; the Petitioner's memorandum in response thereto; and the entire record compiled herein, the following relevant facts are found.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED: That the Respondent enter a Final Order herein denying Petitioner's protest of the proposed deficiency and penalties as set forth hereinabove. RECOMMENDED this 14th day of March, 1983, in Tallahassee, Florida. JAMES E. BRADWELL, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 14th day of March, 1983.
