14-002700 Recovery Racing, Llc, D/B/A Maserati Of Fort Lauderdale vs. Maserati North America, Inc., And Rick Case Weston, Llc, D/B/A Rick Case Maserati Status: Closed Recommended Order on Wednesday, December 17, 2014.

Summary: Petitioner failed to prove standing to protest the proposed additional dealership; recommend entry of a final order dismissing protest for lack of standing.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

RECOVERY RACING, LLC, d/b/a

MASERATI OF FORT LAUDERDALE,

Petitioner,

vs. Case No. 14 - 2700

MASERATI NORTH AMERICA, INC.,

AND RICK CASE WESTON, LLC, d/b/a

RICK CASE MASERATI,

Respondents.

_________________ ______________/

RECOMMENDED ORDER

A hearing limited to the issue of standing was held in this

matter on November 4 and 10, 2014, in Tallahassee, Fl orida,

before Jessica Varn, an Administrative Law J udge assigned by the

Division o f Administrative Hearings (DOAH) .

APPEARANCES

For Petitioner Recovery Racing, LLC , d/b/a Maserati of Fort

Lauderdale ( Recovery Racing ):

Richard N. Sox, Esquire

Jason T. Allen, Esquire

Bass Sox Mercer, P. A.

2822 Remington Green Circle

Tallahassee, Florida 32308

Elias C. Schwartz, Esquire

Schwartz and Englander, P.A.

1900 Glades Road, Suite 102

Boca Raton , Florida 33431

For Respondent Maserati North America, Inc. (Maserati) :

Robert D. Cultice, Esquire

Wilmer Cutler Pickering

Hale and Door , LLP

60 State Street

Boston, Massachusetts 02109

J. Andrew Bertron, Esquire

Nelson, Mullins, Riley,

and Scarborough, LLP

Suite 202

3600 South Maclay Boulevard

Talla hassee, Florida 32312

For Respondent Rick Case Weston, LLC, d/b/a Rick Case

Maserati (Rick Case):

Robert E. Sickles, Esquire

Hinshaw and Culbertson, LLP

Suite 500

100 South A shley Drive

Tampa, Florida 33602

STATEMENT OF THE ISSUE

Whether Petitioner has standing under section 320.642,

Florida Statutes, to file a petition with the Department of

Highway Safety and Motor Vehicles (Depa rtment) protesting the

est ablishment of an additional dealership at a proposed

location.

PRELIMINARY STATEMENT

On May 12, 2014, notice was published in the Administrative

Register announcing MaseratiÓs intent to establish an additional

Maserati dealership, Rick Case, at a proposed location.

Recovery Racing filed a Petition or Complaint Protesting

Establishment of Additional Dealership Protest with the

Department (Protest) . The Department forwa rded the P rotest to

DOAH , and the case was assigned to the undersigned.

On September 4, 2 014, Respondents filed a Joint Motion for

Bifurcated and Expedited Hearing on PetitionerÓs Lack of

Standing (Joint Motion), seeking the entry of an order

bifurcating the Protest to provide for an expedited hearing

limited to the issue of standi ng under sec tion 320.642(3)(b)2.

Recovery Racing opposed the Joint Motion; a telephone conference

was held on September 18, 2014, wherein the parties were

afforded the opportunity to further address the Joint Motion.

On that same date, the under signed entered an O rd er bifurcating

the case . The hearing limited to the issue of standing was

scheduled for November 4, 2014.

At the hearing limited to standing, Recovery Racing

presented the expert testimony of Edward M. Stockton , who w a s

a ccepted as an expert in the fiel d of aut omotive retailing and

economics, and the testimony of Garret Hayim, general manager

and p resident of Recovery Racing. PetitionerÓs Exhibits 1, a

Composite expert report, and 2 were admitted into evidence. A

composite rebuttal exhibit, PetitionerÓ s Exhibit 3, was also

admitted into evidence.

Maserati presented the expert testimony of Sharif Farhat,

who was accepted as an expert in add point matters.

RespondentÓs Exhibits A, B, and C were admitted into evidence.

Recovery Racing objected to the adm ission of RespondentÓs

Exhibit C; Exhibit C was admitted, but the hearing was

reconvened on November 10, 2014, to allow Recovery Racing to

prepare its rebuttal presentation in ligh t of the admission of

Exhibit C .

The T ranscript of the hearing was filed wit h DOAH on

November 18, 2014. Recovery Racing and Maserati timely filed

proposed orders, which have been considered in the preparation

of this Recommended Order. Unless otherwise indicated, all

statutory refere nces are to the Florida Statutes (2014) .

FIND ING S OF FACT

1. As defined in section 320.60(11)(a), Recovery Racing is

an existing motor vehicle dealer, and is a party to a Maserati

franchise agreement. Recovery Racing sells Maserati vehicles

from a licensed franchise located at 5750 North Federal Hi ghway,

Fort Lauderdale, Florida.

2. As defined in section 320.60(8), Maserati is a

licensee.

3. Rick Case is the additional Maserati dealer that

Maserati seeks to establish at 3500 Weston Road, Davie, Florida

(proposed location).

4. The Proposed L ocatio n is approximately 18 miles from

Recovery RacingÓs dealership located at 5750 North Federal

Highway, Fort Lauderdale, Florida.

5. Recovery Racing is not within a radius of 12.5 miles of

the proposed Rick Case location; accordingly, Recovery Racing is

not claiming standing pursuant to section 320.642(3)(b)1.

Recovery Racing relies on section 320.642(3)(b)2 ., to establish

standing.

6. Mr. Stockton, the expert presented by Recovery Racing,

opined that Recovery Racing has standing to prote st because it

made more than 25 percent of its retail sales to persons with

registered household addresses within a 12.5 mile radius of the

proposed location. Mr. StocktonÓs opinion is based on his

assumption that Ðregistered household address,Ñ as set forth in

section 320. 642(3)(b)2. , means the address where the persons who

use or drive the vehicle reside, regardless of the household

addresses where the purchased vehicles are registered.

7. Mr. Stockton explained that in making his calculation,

he did not rely on vehicle r egistration data; rather, he relied

on the dealership sales files for each sale, and information

pro vided to him by Mr. Hayim, the general m anager for Recovery

Racing.

8. Mr. StocktonÓs opinion on standing was also based

on his definition of Ðretail sale sÑ as set forth in

section 320.642(3)(b)2. According to Mr. Stockton, sales to

businesses are included as retail sales where the business is an

ÐinstrumentÑ of the transaction, and the person using the car is

a Ðbeneficiary.Ñ In contrast, he explained t hat a sale to a

business is excluded as a retail sale when the business is the

ÐbeneficiaryÑ of the transaction.

9. Turning to the time periods referenced in

section 320.642(3)(b)2 . , Florida Administrative Code

Rule 15C - 7.004(9) sets forth the manner in which the 36 - month

period within which the 12 - month pe riod for standing is

calculated. T he period ends on the last day of the month

precedin g the month in which notice is p ublished , running

through the end of the month prior to the date of publication of

the notice. Given the date of the n otice in this case, which is

May 12, 2014, the relevant period in the instant case ends on

April 30, 2014, and begins 36 months be fore that date on May 1,

2011.

10 . In calculating the time periods detailed in

section 320.642(3)(b)2 . , Mr. Stockton was unaware of the Florida

Administrative Code r ule addressing the calculation of the

12 - month period within a 36 - month period. Accordingly, he began

and ended his calculations mid - month , on May 19, 2011 . He

explained that there were approximately 730 possible 12 - month

periods to review; each one starting on a different day, going

forward 12 months. Mr. StocktonÓs method of reviewing the

statutory time periods does not comply with the standards set

forth in the Florida Adm inistrative Code .

11. In making a standing calculation, the automotive

indus try calculates the percentage using the following fraction:

the denominator is the total number of retail sales, and the

numerator reflects the number of retail sales that are wi thin

the geographic radius required by the statute (referred to as

Ðthe ringÑ) .

12 . The records attached to Mr. Stock tonÓs reports, which

are tabs 6 through 128 (although not consecutively numbered) in

Exhibit 1 , contain the documents that Mr . Stockton re lied upon

in making his standing calculation.

13. Mr. Stockton calculated the fraction at least two

different times; both calculations were presented to the

undersigned. The first calculation s we re reported as follows:

Date range Sales Nationwide Percent

within sales within

ring ring

5/19/2011 - 5/18/2012 32 127 25.20%

5/20/2011 - 5/19/2012 32 127 25.20%

5/21/2011 - 5/20/201 2 32 127 25.20%

5/22/2011 - 5/21/2012 32 126 25.40%

5/23/2011 - 5/22/2012 33 127 25.98%

14. Mr. StocktonÓs revised calculations, after receiving

more information about some of the sales , were report ed as

follows:

Date range Sales Nationwide Percent

w ithin sales within

ring ring

5/19/2011 - 5/18/2012 34 127 26.77%

5/20/2011 - 5/19/2012 34 127 26.77%

5/21/2011 - 5/20/2012 34 127 26.77%

5/22/2011 - 5/21/2012 34 126 26.98%

5/23/2011 - 5/22/2012 35 127 27.56%

15. Sixteen of the sales included in the Ðsales within

ringÑ (using either of the two reports detailed above) are not

supported by any vehicle registration data. Those 16 sales are,

as enume rated by the tabs attached to Mr . StocktonÓs report, the

following: 18, 19, 24, 34, 37, 43, 51, 61, 68, 76, 109, 112,

117, 11 8, 119, and 122.

16. Interestingly, for two of the sales, tab 37 and tab

43, Mr. Stockton knew that the cars were registered in New

Hampshire and Orlando, Florida, respectively. He included them,

however, in the sales within the ring because he had knowl edge

that the vehicles were being used by persons with household

addresses within the ring.

17. Mr. StocktonÓs method of reviewing the Ðend userÑ of a

vehicle sale is wholly dependent on documents that vary from

sales file to sales file and on information given to him by the

general manager of the dealership. This methodology is

subjective and easily manipulated by an interested party.

18. Mr. Stockton also included two sales, tabs 24 and 122,

that were sold to non - retail buyers, who purchase the vehicle

wholesale. He included both because he had acquired information

that the Ðend usersÑ of the vehicles were persons with household

addresses within the ring.

19 . MaseratiÓs expert, Mr. Farhat, opined that Recovery

Racing did not have standing to protest b ecause Recovery Racing

did not meet the 25 percent requirement of retail sales within

the 12.5 mile radius, within the time period mandated by the

statute. Mr. FarhatÓs calculations were based on the assumption

that the statutory term Ðregistered househol d addressesÑ means

the household addresses to which vehicles are registered with

the Department. Given this assumption, he reviewed the vehicle

registration data for each retail sale.

20 . Mr. Farhat obtained the data from two authoritative

sources in the automotive industry: Experian and IHS. Both of

these entities obtain their vehicle registration data from state

departments of motor vehicles.

21 . Mr. Farhat defined the term Ðretail saleÑ as sales to

individuals, and to businesses that purchase less than 10

vehicles in a year. He explained that this definition is used

industry - wide.

22 . Mr. Farhat ultimately opined that Recovery Racing

nev er got close to reaching the 25 percent requirement, in any

of the potential rolling 12 - month periods in the preceding 36 -

months .

23. Mr. FarhatÓs testimony as to the definition of

Ðregistered household addressesÑ is found credible, as it gives

meaning to all of the language contained in the statute.

Mr. StocktonÓs definition is not supported by the statutory

language, is unreliabl e, subject to manipulation, fails to give

any meaning to the word Ðreg isteredÑ as used in the statute, and

inserts the term Ðend userÑ into the statute.

24. Mr. FarhatÓs testimony as to the definition of Ðretail

salesÑ is also fou nd credible, as it is an objective standard

used by the automotive industry . Mr. StocktonÓs definition of

Ðretail salesÑ is suspect in that it requires investigation into

whether a business is a ÐbeneficiaryÑ or an ÐinstrumentÑ Ï - again,

information that is highly subjective and easily manipulated.

25. The plain meaning of the words Ð r egistered household

addresses , Ñ as used in section 320.642(3)(b)2 . , is the household

address to which a vehicle is registered with the Department.

Given that 16 of the sale s included in the ring by Mr. Stockton

had no vehicle registration data, they cannot be included in the

numerator. Two of those 16 sales were also not retail sales, as

defined by the automotive industry.

26. Recovery Racing failed to meet its burden of proving

that it has standing to protest the proposed Rick Case

dealership location, as it did not establish that 25 percent of

its retail sales, sold during the defined statutory timeframe,

were within the 12.5 mile radius set forth in section

320.642(3)(b )2 .

CONCLUSIONS OF LAW

27 . The Division of Administrative Hearings has

jurisdiction over this proceeding pursuant to sections 120.569

and 320.699, Florida Statutes.

28. The standing provision applicable to this case is

found in section 320.642(3)(b)2 . , w hich reads as follows:

(3) An existing franchised motor vehicle

dealer or dealers shall have standing to

protest a proposed additional or relocated

motor vehicle dealer when the existing motor

vehicle dealer or dealers have a franchise

agreement for the s ame line - make vehicle to

be sold or serviced by the proposed

additional or relocated motor vehicle dealer

and are physically located so as to meet or

satisfy any of the following requirements or

conditions:

* * *

(b) If the proposed additio nal or relocated

motor vehicle is to be located in a county

with a population of more than 300,000

according to the most recent data of the

United States Census Bureau or the data of

the Bureau of Economic and Business Research

of the University of Florida :

* * *

2 . Any existing motor vehicle dealer or

dealers of the same line - make can establish

that during any 12 - month period of the

36 - month period preceding the filing of the

licenseeÓs application for the proposed

dealership , such dealer or its predecessor

made 25 percent of its retail sales of new

motor vehicles to persons whose registered

household addresses were located within a

radius of 12.5 miles of the location of the

proposed additional or relocated motor

vehicle dealer; provided s uch existing

dealer is located in the same county or any

county contiguous to the county where the

additional or relocated dealer is proposed

to be located. (emphasis added) .

29. Recovery Racing bears the burden of establishing

standing by a preponder ance of the evidence. See Braman

Cadillac v. DepÓt of Highway Safety and Motor Vehicles , 584 So.

2d 1047, 1050 (Fla. 1st DCA 1991).

30. Turning first to the clause of the statute which

addresses the time calculation , that is : Ðany 12 - month period

of t he 36 - month period preceding the filing of the licenseeÓs

application for the proposed dealership,Ñ this clause is further

explained in Florida Administrative Code Rule 15C - 7.004(9). It

provides that the period ends on the last day of the month

preceding the month in which notice is published, running

through the end of the month prior to the date of publication of

the notice. Given the date of the n otice in this case, which is

May 12, 2014, the relevant period ends on April 30, 2014, and

begins 36 month s before that date on May 1, 2011. The rolling

12 - month periods start at the beginning of each month in that

36 - month span.

3 1 . The central issue in this case is the definition of

Ðregistered household addressesÑ as used in the statute.

PetitionerÓs ex pert interpreted the words to mean the household

address of the Ðend userÑ of the vehicle. This interpretation

is rejected, as it ignores the plain meaning of the words used

by the Legislature , gives no meaning to the word ÐregisteredÑ as

used in the stat ute, and inexplicably inserts the term Ðend

userÑ into the statute.

32 . By its plain language, the term Ðregistered household

addressesÑ is not ambiguous. It means the household addresses

where the purchased vehicle is registered. It is well settled

tha t when the language of a statute is clear and unambiguous and

conveys a clear meaning, the statute must be given its plain and

ordinary meaning. See Aetna Casualty & Sur. Co. v. Huntington

NatÓl Bank , 609 So. 2d 1315, 1315 (Fla. 1992); Holly v. Auld ,

450 So. 2d 217 (Fla. 1984).

33 . In addition, c hapter 320 contains multiple references

to vehicle registrations that demonstrate that the word

Ðregistered , Ñ as used in section 320.642(3) (b) 2. , is used in

connection with household addresses where vehicles are

registered with the Department. See § 320.01(31), Fl a . Stat .

(defining ÐregistrantÑ as Ða person in whose name or names a

vehicle is properly registeredÑ); § 320.02 , Fla. Stat.

(requiring that the application for vehicle registration include

the street a ddress of the ownerÓs permanent residence or the

address of his or her permanent place of business); § 320.08 ,

Fla. Stat. (imposing taxes which shall be paid to and collected

by the Department or its agent upon the registration or renewal

of a vehicle regi stration); and § 320.642(2)(b) , Fla. Stat.

(listing 11 factors in determining whether an existing dealer is

providing adequate representation in a community, factor (11) is

the volume of registrations and service business transacted by

the dealer . ).

34 . R ecovery RacingÓs interpretation of Ðregistered

household addressesÑ would also impose an unworkable burden on

the industry in determining which dealers have standing to

protest a proposed dealership. It would require that each sales

file be investigated s o as to determine the Ðend userÑ of the

vehicle. This interpretation lends itself to manipulation by an

interested dealer and is subjective in nature. Vehicle

registration data, on the other hand, is accessible to all

existing dealers, potential dealers, and manufacturers alike, so

that all interested parties can make an efficient, predictable

calculation to determine standing.

35 . Recovery Ra cing provided data for five rolling 12 -

month periods beginning on May 19, 2011. In its supporting

data, 16 sales did not contain vehicle registrations; therefore,

they cannot be included in the numerator.

36 . Recovery Racing has failed to prove, by a

preponderance of the evi dence, that it satisfied the 25 percent

test in section 320.642(3)(b)2 .

RECOMMENDATION

Bas ed on the foregoing Findings of Fact and Conclusions of

Law, it is RECOMMENDED that the Department enter a f inal o rder

dismissing Recovery RacingÓs protest of the proposed

establishment of an additional dealer for lack of standing.

DONE AND ENTERED this 17 th day of December , 2014 , in

Tallahassee, Leon County, Florida.

S

JESSICA E. VARN

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399 - 3060

(8 50) 488 - 9675

Fax Filing (850) 921 - 6847

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 17 th day of December , 2014 .

COPIES FURNISHED:

Jennifer Clark, Agency Clerk

Department of Highway Safety

and Motor Vehicle s

Neil Kirkman Building, Room A430

2900 Apalachee Parkway, MS 61

Tallahassee, Florida 32399

(eServed)

J. Andrew Bertron, Esquire

Nelson, Mullins, Riley,

and Scarborough, LLP

Suite 202

3600 Maclay Boulevard, South

Tallahassee, Florida 32312

(eServed)

Robert E. Sickles, Esquire

Hinshaw and Culbertson , LLP

Suite 500

100 South Ashley Drive

Tampa, Florida 33602

(eServed)

Elias C. Schwartz, Esquire

Schwartz and Englander, P . A .

1900 Glades Road , Suite 102

Boca Raton, Florida 33431

(eServed)

Robert D. Cul tice, Esquire

Wilmer Cutler Pickering

Hale and Door , LLP

60 State Street

Boston, Massachusetts 02109

(eServed)

Richard N. Sox, Esquire

Jason T. Allen, Esquire

Bass Sox Mercer, P.A.

2822 Remington Green Circle

Tallahassee, Florida 32308

(eServed)

Terry L. Rhodes, Executive Director

H ighway S afety and M otor V ehicles

Neil Kirkman Building, Room B - 443

2900 Apalachee Parkway

Tallahassee, Florida 32399 - 0500

(eServed)

Steve Hurm, General Counsel

Highway Safety and Motor Vehicles

Neil Kirkman Building, Room A - 432

2900 Apalachee Parkway

Tallahassee, Florida 32399 - 0500

(eServed)

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 Reco mmended Order should be filed with the agency that

will issue the Final Order in this case.