07-004597 Department Of Agriculture And Consumer Services vs. American Auto Glass Network, Inc. Status: Closed Recommended Order on Tuesday, March 11, 2008.

Summary: The agency failed to prove that the Respondent engaged in the business of motor vehicle repair. The Respondent was not, therefore, required to register as a motor vehicle repair shop and did not violate statute.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF AGRICULTURE AND )

CONSUMER SERVICES, )

)

Petitioner, )

)

vs. ) Case No. 07-4597

)

AMERICAN AUTO GLASS NETWORK, )

INC., )

)

Respondent. )

_________________________________)

RECOMMENDED ORDER

Pursuant to notice, a formal hearing was held in this case

on December 13, 2007, by video teleconference, with the parties

appearing in Fort Lauderdale, Florida, before Patricia M. Hart,

a duly-designated Administrative Law Judge of the Division of

Administrative Hearings, who presided in Tallahassee, Florida.

APPEARANCES

For Petitioner: Eric H. Miller, Esquire

Department of Agriculture &

Consumer Services

2005 Apalachee Parkway

Tallahassee, Florida 32301

For Respondent: Magdalena Gore, President

American Auto Glass Network, Inc,

11355 Southwest 53rd Terrace

Miami, Florida 33165

STATEMENT OF THE ISSUE

Whether the Respondent committed the violations alleged in

the Administrative Complaint dated August 23, 2007, and, if so,

the penalty that should be imposed.

PRELIMINARY STATEMENT

On August 23, 2007, the Department of Agriculture and

Consumer Services ("Department") filed an Administrative

Complaint charging that American Auto Glass Network, Inc.,

("American Auto Glass") was operating as a motor vehicle repair

shop without being properly registered with the Department as

required by Section 559.904, Florida Statutes (2007), 1 which

constituted a violation of Section 559.920(17), Florida

Statutes. Magdalena Gore, the President of American Auto Glass,

disputed material facts in the Administrative Complaint and

requested a formal administrative hearing. The Department

transmitted the matter to the Division of Administrative

Hearings for assignment of an administrative law judge.

Pursuant to notice, the final hearing was held on December 12,

2007.

At the hearing, the Department presented the testimony of

Richard Strong and Ms. Gore; Petitioner's Exhibits 4 through 9

were offered and received into evidence. Ms. Gore testified on

behalf of American Auto Glass; American Auto Glass did not offer

any documents into evidence. Official recognition was granted,

at the Department's request, to Sections 559.901, .902, .903,

.904, .920, and .921, Florida Statutes.

The transcript of the proceedings was filed with the

Division of Administrative Hearings on February 6, 2008, and the

parties timely filed their proposed findings of fact and

conclusions of law, which have been considered in the

preparation of this Recommended Order.

FINDINGS OF FACT

Based on the oral and documentary evidence presented at the

final hearing and on the entire record of this proceeding, the

following findings of fact are made:

1. The Department is the state agency responsible for

registering and regulating motor vehicle repair shops. See

§§ 559.904, .920, and .921, Fla. Stat.

2. Ms. Gore is the current president and sole shareholder

of American Auto Glass. She is also its only employee.

3. American Auto Glass's physical address is 873 Orchid

Drive, Plantation, Florida 33317, which is Ms. Gore's residence.

American Auto Glass's business records are kept at this address,

and its invoices and billings to various insurance companies are

prepared there. All business correspondence and payments go to

Post Office Box 17484, Fort Lauderdale, Florida 33318; and its

the business telephone is Ms. Gore's cell phone. American Auto

Glass is a "Sub-Chapter S" corporation.

4. Prior to June 2006, Ms. Gore and Ana Diaz jointly owned

American Auto Glass; Ms. Gore purchased the business in

June 2006, and Ms. Diaz has not been involved in the business

since that time.

5. American Auto Glass is an approved vendor of automobile

glass replacement claims for several insurance companies, and it

acts as a broker handling automobile glass replacement claims

for persons insured by those insurance companies.

6. When an insurance company receives a claim from an

insured for replacement of damaged automobile glass, the

insurance company assigns the claim to American Auto Glass.

American Auto Glass receives the assignment either through a

telephone call from the insurance company's claims department or

in a facsimile transmission from a glass vendor, that is, an

administrator under contract with the insurance company to sub-

contract automobile glass replacement claims to other agents in

the field.

7. The insurance company or glass vendor tells its

insureds that it will handle the assignment of the claims and

does not refer its insureds to American Auto Glass. Rather, it

advises the insureds that they will be contacted by the person

who will do the work of replacing the glass.

8. Once American Auto Glass receives the claim referral,

Ms. Gore contacts an independent sub-contractor who will do the

installation of the automobile glass replacement. The sub-

contractors used by American Auto Glass also work for other

companies.

9. As part of the assignment, American Auto Glass receives

complete information regarding the type of vehicle, the damages,

and the materials that need to be replaced, which Ms. Gore

transmits to the sub-contractor.

10. The sub-contractor assigned the installation job

contacts the insured and arranges an appointment with the

insured to bring in the car to the sub-contractor for the

replacement installation.

11. American Auto Glass does not, at any time, have

possession of the vehicles for which it arranges automobile

glass replacement installations, nor does it share a business

location with the sub-contractors it engages to do the

automobile glass replacement installations.

12. Some sub-contractors used by American Auto Glass for

automobile glass replacement installations furnish both parts

and labor. If the sub-contractor does not furnish the parts but

only the labor, the sub-contractor orders the necessary parts

from AGS Auto Glass Export or another parts supplier.

13. American Auto Glass has an account with AGS Auto Glass

Export. The sub-contractor picks up the necessary parts for a

job, and AGS Auto Glass Export bills American Auto Glass

directly for these parts.

14. Once the glass replacement installation is completed,

the sub-contractor either sends an invoice to American Auto

Glass or contacts Ms. Gore and provides the vehicle information

required by the insurance company and the cost of the

installation.

15. American Auto Glass bills the insurance company for

the work done, and the insurance company pays American Auto

Glass.

16. American Auto Glass pays the sub-contractors for parts

and labor if the sub-contractor has furnished the parts

necessary for the replacement or for labor only if the sub-

contractor has ordered the parts from AGS Auto Glass Export, the

cost of which are billed directly to American Auto Glass.

Ms. Gore adds a certain percentage to these charges when she

bills the insurance company.

17. American Auto Glass's primary sub-contractor does not

furnish parts, and he has a negotiated price with American Auto

Glass for each installation.

18. American Auto Glass acts exclusively as a broker

arranging with independent sub-contractors for the automobile

glass replacement installations on behalf of insurance

companies. 2 American Auto Glass at no time has any contact with

the insurance company's insureds or their vehicles.

19. At one time prior June 2006, when Ms. Gore purchased

sole interest in the business, American Auto Glass employed an

"installer" who did the actual work of installing automobile

glass replacements. During this time, American Auto Glass was

registered with the Department as a motor vehicle repair shop.

The registration expired on May 29, 2007. 3

20. The evidence presented by the Department is not

sufficient to establish that American Auto Glass is a motor

vehicle repair shop whose business is motor vehicle repairs.

Rather, American Auto Glass acts as a middleman between

insurance companies and motor vehicle repair shops that do the

actual glass replacement installation. Its only physical

location is Ms. Gore's residence, and the business activities

that take place at that location do not include any activities

related to the actual work of motor vehicle repair.

CONCLUSIONS OF LAW

21. The Division of Administrative Hearings has

jurisdiction over the subject matter of this proceeding and of

the parties thereto pursuant to Sections 120.569 and 120.57(1),

Florida Statutes.

22. In its Administrative Complaint, the Department seeks

to impose an administrative fine on American Auto Glass for its

failure to register as a motor vehicle repair shop. Because an

administrative fine constitutes a penalty, the Department has

the burden of proving by clear and convincing evidence that

American Auto Glass is guilty of the offense alleged in the

Administrative Complaint. Department of Banking and Finance,

Division of Securities and Investor Protection v. Osborne Stern

and Co. , 670 So. 2d 932 (Fla. 1996); and Ferris v. Turlington ,

510 So. 2d 292 (Fla. 1987).

23. The Department has charged American Auto Glass with a

violation of Section 559.20(17), Florida Statutes, which

provides:

559.920 Unlawful acts and practices.--It

shall be a violation of this act for any

motor vehicle repair shop or employee

thereof to:

* * *

(17) Perform any other act that is a

violation of this part or that constitutes

fraud or misrepresentation. [4]

24. The underlying violation alleged by the Department is

found in 559.904(1), Florida Statutes, which provides: "Each

motor vehicle repair shop engaged or attempting to engage in the

business of motor vehicle repair work must register with the

department prior to doing business in this state. . . ." In

order to prove that American Auto Glass is required to register

as a motor vehicle repair shop, it must first prove that

American Auto Glass is a motor vehicle repair shop.

25. Section 559.903, Florida Statutes, contains the

following definitions, which are pertinent to this proceeding:

(3) "Employee" means an individual who is

employed full time or part time by a motor

vehicle repair shop and performs motor

vehicle repair.

* * *

(6) "Motor vehicle repair shop" means any

person who, for compensation, engages or

attempts to engage in the repair of motor

vehicles owned by other persons and

includes, but is not limited to: mobile

motor vehicle repair shops, motor vehicle

and recreational vehicle dealers; garages;

service stations; self-employed individuals;

truck stops; paint and body shops; brake,

muffler, or transmission shops; and shops

doing glass work. Any person who engages

solely in the maintenance or repair of the

coach portion of a recreational vehicle is

not a motor vehicle repair shop.

(7) "Place of business" means a physical

place where the business of motor vehicle

repair is conducted, including any vehicle

constituting a mobile motor vehicle repair

shop from which the business of motor

vehicle repair is conducted.

(8) "Motor vehicle repair" means all

maintenance of and modifications and repairs

to motor vehicles, and diagnostic work

incident thereto, including, but not limited

to, the rebuilding or restoring of rebuilt

vehicles, body work, painting, warranty

work, and other work customarily undertaken

by motor vehicle repair shops.

26. Based on the findings of fact herein, the Department

has failed to prove that American Auto Glass is a motor vehicle

repair shop as defined in Section 559.903(6), Florida Statutes.

The Department presented no evidence to support a finding that

American Auto Glass engages in motor vehicle repairs as defined

in Section 559.903(8), Florida Statutes.

27. In the alternative, Section 559.904(9) provides: "No

registration application or fee is required for an individual

with no employees and no established place of business. . . ."

Based on the findings of fact herein, American Auto Glass does

not have a "place of business" as defined in Section 559.903(7),

Florida Statutes, and it has no employees, as defined in

Section 559.903(3), Florida Statutes, because Ms. Gore does not

perform motor vehicle repairs. Accordingly, American Auto Glass

is not required to register as a motor vehicle repair shop

because it has no "employees" and no "place of business."

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is RECOMMENDED that the Department of Agriculture and

Consumer Services enter a final order dismissing the

Administrative Complaint filed against American Auto Glass

Network, Inc.

DONE AND ENTERED this 11th day of March, 2008, in

Tallahassee, Leon County, Florida.

S

___________________________________

PATRICIA M. HART

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

[phone] SUNCOM 278-9675

Fax Filing [phone]

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 11th day of March, 2008.

ENDNOTES

1 / All references to the Florida Statutes are to the 2007

edition unless otherwise indicated.

2 / In order to do business as a motor vehicle repair shop in

Broward County, a business is required to carry garage keeper's

insurance. American Auto Glass cannot qualify for this

insurance because no insurance company will agree to indemnify

American Auto Glass for potential damage caused by a third-party

independent sub-contractor. As a result, American Auto Glass

cannot register as a motor vehicle repair shop in Broward

County.

3 / The investigation that gave rise to the Administrative

Complaint in this case was initiated when the Department became

aware that American Auto Glass's registration as a motor vehicle

repair shop had expired. The purpose of the investigation was

to determine if American Auto Glass was still doing business as

a motor vehicle repair shop. The Administrative Complaint was

issued after the investigator had a conversation with Ana Diaz,

who had sold her interest in American Auto Glass to Ms. Gore in

June 2006. The investigator did not make a site visit to

American Auto Glass. He spoke with Ms. Gore by phone, but he

did not discuss with her the manner in which American Auto Glass

operated or its business practices.

4 / Interestingly, the Department did not charge American Auto

Glass with a violation of Section 559.920(1), Florida Statutes,

which provides:

It shall be a violation of this act for any

motor vehicle repair shop or employee

thereof to:

(1) Engage or attempt to engage in repair

work for compensation of any type without

first being registered with or having

submitted an affidavit of exemption to the

department.

It would seem that this violation would more precisely describe

the basis for the Department's charge against American Auto

Glass than would the violation set forth in

Section 559.9210(17), Florida Statutes.

COPIES FURNISHED:

Eric H. Miller, Esquire

Department of Agriculture and

Consumer Services

2005 Apalachee Parkway

Tallahassee, Florida 32301

Magdalena Gore

American Auto Glass Network, Inc.

11355 Southwest 53rd Terrace

Miami, Florida 33165

Richard Tritschler, General Counsel

Department of Agriculture and Consumer Services

407 South Calhoun Street, Suite 520

Tallahassee, Florida 32399-0800

Honorable Charles H. Bronson

Commissioner of Agriculture

Department of Agriculture and Consumer Services

The Capitol, Plaza Level 10

Tallahassee, Florida 32399-0810

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within

15 days from the date of this recommended order. Any exceptions

to this recommended order should be filed with the agency that

will issue the final order in this case.