08-004040 Peace Industry Group, Inc., And Bayside Auto Sales, Inc. vs. Moto Imports Distributors, Llc Status: Closed Recommended Order on Friday, February 13, 2009.

Summary: Petitioner presented no evidence regarding market share or expected market share. There is no evidence of inadequate representation.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

PEACE INDUSTRY GROUP, INC., )

AND BAYSIDE AUTO SALES, INC., )

)

Petitioners, )

)

vs. ) Case No. 08-4040

)

MOTO IMPORTS DISTRIBUTORS, LLC, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, a formal hearing was held on January 6,

2009, in Panama City, Florida, before Diane Cleavinger, a duly-

designated Administrative Law Judge of the Division of

Administrative Hearings.

APPEARANCES

For Petitioner Peace Industry Group:

No appearance

For Petitioner Bayside Auto Sales:

Larry Bradberry

1301 Harrison Avenue

Panama City, Florida 32401

For Respondent Moto Imports Distributors, Inc.:

Wayne Wooten

12202 Hutchison Boulevard Suite 72

Panama City Beach, Florida 32407

STATEMENT OF THE ISSUE

Whether the application of Peace Industry Group (Peace) and

Bayside Auto Sales, Inc. (Bayside) to establish an additional

franchised dealership for the sale of Astronautical Bashan

motorcycles to be located at Bayside Auto Sales, 1301 Harrison

Avenue, Panama City, Bay County, Florida, should be granted.

PRELIMINARY STATEMENT

By publication in the August 1, 2008, Florida Administrative

Law Weekly, Petitioners Peace and Bayside, provided notice of

their intent to establish Bayside as a dealership for the sale of

Astonautical Bashan motorcycles at 1301 Harrison Avenue, Panama

City, Florida. Pursuant to Section 320.642, Florida Statutes

(2008), Respondent, Moto Imports Distributors, Inc. (Moto or

Respondent), timely filed a protest of the establishment of the

proposed dealership with the Department of Highway Safety and

Motor Vehicles (Department).

The Department forwarded the letter of protest to the

Division of Administrative Hearings for assignment of an

Administrative Law Judge to conduct a formal hearing.

At hearing, Petitioner Bayside presented the testimony of

one witness. Bayside did not offer any exhibits into evidence.

Petitioner Peace did not appear at the hearing. Respondent Moto

presented the testimony of one witness and offered two exhibits

into evidence.

After the hearing, neither party filed Proposed Recommended

Orders.

FINDINGS OF FACT

1. Petitioner Peace is a licensed distributor of motor

vehicles in Florida and is authorized to sell motor vehicles to

its dealers in Florida.

2. Petitioner Bayside is a licensed motor vehicle dealer in

Florida and is located at 1301 Harrison Avenue, Panama City,

Florida.

3. Respondent Moto is a licensed motor vehicle dealer in

Florida and an existing Astronautical Bashan dealer located at

12202 Hutchison Blvd Suite 72, Panama City Beach, Florida.

4. Currently, Moto sells the product line of Peace,

including the Astronautical Bashan product line. Additionally,

Moto has a franchise agreement with Peace. The agreement

establishes a franchise territory with a 25-mile radius around

Moto’s location.

5. Petitioner Peace proposes to establish Bayside as a

dealership for the sale of Astronautical Bashan motorcycles. The

proposed dealership would be within six miles of Moto’s

dealership.

6. The two dealerships are located in Bay County and are

separated by the Hathaway Bridge. Both draw customers from Bay

County, with at least 20 percent of Moto’s customers located

within 20 miles of Moto’s location. There was no consumer data

or analysis of sales in the motorcycle industry offered into

evidence. However, Moto’s franchise agreement with Peace

establishes a market area of at least a 25-mile radius from

area.

7. There was no evidence which demonstrated Peace’s market

share in the motorcycle market. There was no evidence presented

analyzing the motorcycle market in the Panama City area.

Likewise, there was no evidence presented regarding anticipated

growth in the market area. This type of evidence is generally

presented by the distributor or manufacturer of the product. As

indicated, Peace did not appear at the hearing. Given this lack

of evidence, the market share for Peace or Astronautical Bashan

motorcycles cannot be established.

8. Moreover, a determination that the establishment of a

second dealership in the Panama City territory is warranted must

be based on the economic and marketing conditions pertinent to

dealers competing in the territory. Given this lack of evidence,

Petitioners failed to establish that Peace was underrepresented

in the Panama City/Bay county area. Since there is no evidence

to support the establishment of a second dealership, Petitioners’

application to establish such a dealership should be denied.

CONCLUSIONS OF LAW

9. The Division of Administrative Hearings has jurisdiction

over the parties to and the subject mater of this proceeding.

§§ 120.57 and 120.569, Fla. Stat. (2008).

10. The scope of the inquiry in the case is set forth in

Section 320.642, Florida Statutes (2008), which provides in

pertinent part:

(1) Any licensee who proposes to establish

an additional motor vehicle dealership or

permit the relocation of an existing dealer

to a location within a community or territory

where the same line-make vehicle is presently

represented by a franchised motor vehicle

dealer or dealers shall give written notice

of its intention by certified mail to the

department.

* * *

(2)(a) An application for a motor vehicle

dealer license in any community or territory

shall be denied when:

1. A timely protest is filed by a

presently existing franchised motor vehicle

dealer with standing to protest as defined in

subsection (3); and

2. The licensee fails to show that

the existing franchised dealer or dealers who

register new motor vehicle retail sales or

retail leases of the same line-make in the

community or territory of the proposed

dealership are not providing adequate

representation of such line-make motor

vehicles in such community or territory. The

burden of proof in establishing inadequate

representation shall be on the licensee.

(b) In determining whether the existing

franchised motor vehicle dealer or dealers

are providing adequate representation in the

community or territory for the line-make, the

department may consider evidence which may

include, but is not limited to:

1. The impact of the establishment

of the proposed or relocated dealer on the

consumers, public interest, existing dealers,

and the licensee; provided, however, that

financial impact may only be considered with

respect to the protesting dealer or dealers.

2. The size and permanency of

investment reasonably made and reasonable

obligations incurred by the existing dealer

or dealers to perform their obligations under

the dealer agreement.

3. The reasonably expected market

penetration of the line-make motor vehicle

for the community or territory involved,

after consideration of all factors which may

affect said penetration, including, but not

limited to, demographic factors such as age,

income, education, size class preference,

product popularity, retail lease

transactions, or other factors affecting

sales to consumers of the community or

territory.

4. Any actions by the licensees in

denying its existing dealer or dealers of the

same line-make the opportunity for reasonable

growth, market expansion, or relocation,

including the availability of line-make

vehicles in keeping with the reasonable

expectations of the licensee in providing an

adequate number of dealers in the community

or territory.

5. Any attempts by the licensee to

coerce the existing dealer or dealers into

consenting to additional or relocated

franchises of the same line-make in the

community or territory.

6. Distance, travel time, traffic

patterns, and accessibility between the

existing dealer or dealers of the same line-

make and the location of the proposed

additional or relocated dealer.

7. Whether benefits to consumers

will likely occur from the establishment or

relocation of the dealership which the

protesting dealer or dealers prove cannot be

obtained by other geographic or demographic

changes or expected changes in the community

or territory.

8. Whether the protesting dealer

or dealers are in substantial compliance with

their dealer agreement.

9. Whether there is adequate

interbrand and intrabrand competition with

respect to said line-make in the community or

territory and adequately convenient consumer

care for the motor vehicles of the line-make,

including the adequacy of sales and service

facilities.

10. Whether the establishment or

relocation of the proposed dealership appears

to be warranted and justified based on

economic and marketing conditions pertinent

to dealers competing in the community or

territory, including anticipated future

changes.

11. The volume of registrations

and service business transacted by the

existing dealer or dealers of the same line-

make in the relevant community or territory

of the proposed dealership.

11. The burden of proof in this proceeding is on

Petitioners must establish by a preponderance of the evidence

that the existing franchised dealer is not providing adequate

representation of the same line-make motor vehicles in the

designated community or territory.

12. Having weighed the statutory criteria enumerated in

Section 320.642(2), Florida Statutes, in light of the facts found

herein, Petitioners have not met their burden of proving by a

preponderance of the evidence that the existing Peace dealer is

providing inadequate representation to the Panama City/Bay County

territory. There was no evidence that demonstrated the benefits

of establishing the proposed dealership would outweigh any

negative impact on the existing dealer. Therefore, the

establishment of Peace’s dealership at Bayside’s location should

be denied.

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions of

Law, it is RECOMMENDED that the Department of Highway Safety and

Motor Vehicles enter a final order denying the establishment of

Peace's dealership at Bayside, 1301 Harrison Avenue, Panama City,

Florida.

DONE AND ENTERED this 13th day of February, 2009, in

Tallahassee, Leon County, Florida.

S

DIANE CLEAVINGER

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

[phone]

Fax Filing [phone]

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 13th day of February, 2009.

COPIES FURNISHED :

Michael James Alderman, Esquire

Department of Highway Safety and

Motor Vehicles

Neil Kirkman Building, Room A-432

2900 Apalachee Parkway

Tallahassee, Florida 32344

Larry Bradberry

Bayside Auto Sales, Inc.

1301 Harrison Avenue

Panama City, Florida 32401

Wayne Wooten

Moto Import Distributors, LLC

12202 Hutchison Boulevard, Suite 72

Panama City Beach, Florida 32407

Lily Ji

Peace Industry Group, Inc.

6600-B Jimmy Carter Boulevard

Norcross, Georgia 30071

Carl A. Ford, Director

Division of Motor Vehicles

Department of Highway Safety

And Motor Vehicles

Neil Kirkman Building, Room B-439

2900 Apalachee Parkway

Tallahassee, Florida 32399-0500

Robin Lotane, General Counsel

Department of Highway Safety

And Motor Vehicles

Neil Kirkman Building

2900 Apalachee Parkway

Tallahassee, Florida 32399-0500

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.