21-002096 Ted Vernon Specialty Automobiles, Inc. vs. Department Of Highway Safety And Motor Vehicles Status: Closed Recommended Order on Thursday, January 13, 2022.

Summary: DHSMV failed to show by clear and convincing evidence that Petitioner's 2021 license renewal application should be denied for a wrong answer regarding felonies of officer on its 2019 renewal application. The agency cannot use non-renewal as a revocation.

S TATE OF F LORIDA

D IVISION OF A DMINISTRATIVE H EARINGS

T ED V ERNON S PECIALTY A UTOMOBILES ,

I NC . ,

Petitioner ,

vs. Case No. 21 - 2096

D EPARTMENT OF H IGHWAY S AFETY A ND

M OTOR V EHICLES ,

Respondent .

/

R ECOMMENDED O RDER

Pursuant to notice, a final hearing in this case was conducted before

Administrative Law Judge Mary Li Creasy by Zoom conference on

November 19 , 2021.

A PPEARANCES

For Petitioner: John W. Forehand , Esquire

R. Craig Spickard . Esquire

Kurkin Forehand Brandes, LLP

1089 West Morse Boulevard, Suite D

Winter Park, Florida 32789

For Respo ndent: Sena Marie Lizenbee , Esquire

Department of Highway Safety

and Motor Vehicles

Neil Kirkman Building, Room A - 432, MS - 02

2 900 Apalachee Parkway

Tallahassee, Florida 32399 - 0504

S TATEMENT OF T HE I SSUE

Whether Petitioner , Ted Vernon Specialty Automobiles , Inc. ( Ñ TVSA Ò ) ,

should be denied a renewal of its motor vehicle dealer license based upon th e

allegations contained in the a gency action letter dated May 10, 2021.

P RELIMINARY S TATEMENT

Ted Vernon, the sole owner, officer, and license holder for TVSA, was

convicted of a felony in April 2018. In its 2019 R enewal A pplication, T V SA

answered Ñ N o Ò to the question of whether any officer or director had been

convicted of a felony since the last renewal application. 1 The application was

completed by Ted Vernon under penalty of perjury, on behalf of T V SA. In

Ma rch 2021, Respondent, Department of Highway Sa fety and Motor Vehicles

( Ñ the Department Ò ) , first became aware of Mr. VernonÔs conviction by a

complaint filed by his ex - wife.

TVSA submitted its 2021 R enewal A pplication , and it was received by the

Department on March 24, 2021. On May 10, 2021, the D epar tment sent

TVSA a Notice of Intent to Deny Letter ( Ñ NOID Ò ) based on Mr. VernonÔs 2018

felony conviction and failure to disclose the same on T V SAÔs 2019 renewal

application. No defect was cited for the 2021 Renewal Application.

TVSA timely challenged the N OID. The matter was referred to the

Division of Administrative Hearings (ÑDOAHÒ) on July 1, 2021. TVSA filed a

Motion for C ontinuance of Final Hearing from September 14 , 2021, which

was granted . The final hearing was held on November 19 , 2021.

Because thi s matter is in the nature of a revocation proceeding, the

Department presented its case first . The Department presented one witness,

Jaime Williams, Dealer License Administrator . The Department Ôs Exhibits A

1 Other than a hearsay statement in the d enial l etter, the Department did not provide any

evidence as to when TVSAÔs license was renewed prior to the 2019 Renewal Application.

Because the application asks whether TVSA or an officer or director of TVSA was convicted

of a felony Ñsince your last renewalÒ and because the record pro vides no evidence as to

when the Ñlast renewalÒ of TVSAÔs license occurred prior to the 2019 Renewal Application,

there is in sufficient evidence to determine whether TVSAÔs answer to the q uestion on the

2019 Renewal Application was incorrect. However, for purposes of this Recommended Order,

it is assume d that the 2019 Renewal Application was incorrect.

t hrough E were admitted. TVSA presented no witnes ses. T V SA Ôs Exhibits 1

through 4 were admitted.

The Transcript was filed on December 13 , 2021 . Both parties timely filed

proposed recommended orders , which were considered in the preparation of

this Recommended Order. Unless otherwise indicated, citations to the Florida

Statutes refer to the version in effect at the time of the issuance of the NOID .

F INDINGS OF F ACT

1. TVSA is an independent motor vehicle dealer in Miami, Florida, that is

licensed by the Department.

2. In March 2021, TVSA submitted the r e newal a pplication at issue in this

case ( Ñ 2021 Renewal Application Ò ).

3. The 2021 Renewal Application was timely filed and received by the

Department on March 24, 2021.

4. The 2021 Renewal Application was regular in form and complied with

the provisions of section 320.27, Florida Statutes, and the DepartmentÔs rules

promulgated thereunder.

5. Despite the 2021 Renewal Application meeting the requirements of the

statutes and the DepartmentÔs rules for renewal of its license , on May 10,

2021, the Department se nt the NOID informing TVSA of the DepartmentÔs

intent to deny the 2021 Renewal Application.

6. In the NOID , the Department asserts : (1) Mr. Vernon was convicted of a

felony in 2018 and that such conviction supports a denial of the 2021

Renewal Application pursuant to section 320.27(9)(a)2. ; and (2) on its

2019 Renewal Application , TVSA incorrectly checked the box next to Ñ No Ò for

the question, Ñ Have you or any officer/owner been convicted of a felony or

equivalent in any jurisdiction since your last renewal ? Ò (the Ñ Felony

Question Ò ) and that this incorrect answer on the 2019 Renewal Application

supports a denial of the 2021 Renewal Application pursuant to

section 320.27(9)(a)1.

7. T he Department admits that TVSA , the corporate entity, and not

Mr. Vernon, the individual, is the Ñ applicant Ò and the Ñ licensee Ò for the

2019 and 2021 Renewal Application s for purposes of section 320.27(9)(a) .

8. TVSA has not been convicted of a felony.

9. Thus, with respect to the 2019 and 2021 Renewal Application s (and

TVSAÔs lice nse generally) , neither the applicant nor the licensee has been

convicted of a felony .

10. Mr. Vernon, the individual, was convicted of a felony on April 3, 2018.

The Department was notified of this conviction by Mr. VernonÔs ex - wife at or

near the time o f the submission of the 2021 Renewal Application.

11. The box next to Ñ No Ò was checked for the Felony Question on the

2019 Renewal Application.

12. In reviewing the 2021 Renewal Application, the Department did not

know whether the box was checked Ñ No Ò to t he Felony Question on the

2019 Renewal Application due to a mistake and did not contact TVSA or

otherwise conduct any investigation into TVSAÔs intent in checking the Ñ No Ò

box. The Department has no knowledge or evidence as to TVSAÔs intent with

respect to checking the Ñ No Ò box for the Felony Question on the 2019 Renewal

Application . T he Department only knows that the wrong box was checked on

the 2019 Renewal Application .

13. The DepartmentÔs decision to issue the NOID was not based on any

written or unifor mly applied policies of the Department . T he Department

does not have any rules or guidelines on which it relies in determining

whether it is going to deny, suspend, revoke, or not take any action against a

licensee wh en the Department believes a renewal ap plicant violated

section 320. 27 (9). Indeed, the Department does not deny, suspend, or revoke

a license every time it believes that a violation of section 320.64(9) occur s .

14 . As set forth in the NOID , the Department refused to renew TVSAÔs

license, and, a s a result , the license expired , and TVSA is not able to conduct

business as an independent motor vehicle dealer.

15. The DepartmentÔs action to deprive TVSA of its ability to continue to

operate as a motor vehicle dealer occurred prior to TVSA being prov ided a

hearing to dispute the grounds asserted by the Department and is

tantamount to a suspension or revocation by inaction .

C ONCLUSIONS OF L AW

16 . DOAH has jurisdiction over the parties to, and subject matter of, this

proceeding pursuant to sections 120 .569 and 120.57(1) , Florida Statutes

(2021) .

17. Although the Department has no t suspend ed , revoke d , or discipline d

TVSAÔs license, its issuance of the NOID and the subsequent lapse of the

license is disciplinary in nature.

18. A proceeding to suspend, rev oke, or impose other discipline upon a

license is penal in nature. State ex rel. Vining v. Fla. Real Estate CommÔn ,

281 So. 2d 487, 497 (Fla. 1973). This includes cases in which an agency seeks

to deny a license renewal application. See Dubin v. Dep Ô t of B us . Regul . ,

262 So. 2d 273, 274 - 75 ( Fla. 1st DCA 1972) (Refusal to renew a license to a

person who has once demonstrated he possesses the statutory prerequisites

to licensure cannot be used as a substitute for a license revocation

proceeding.); Coke v. Dep Ô t of Child . & Fam . Servs . , 704 So. 2d 726, 726

(Fla. 5th DCA 1998 ) (applying clear and convincing standard to license

renewal denial case) .

19. The Department must therefore prove the charges against TVSA by

clear and convincing evidence. Fox v. DepÔt of Health , 994 So. 2d 416, 418

(Fla . 1st DCA 2008) ( c iting DepÔt of Banking & Fin. v. Osborne, Stern, & Co. ,

670 So. 2d 932 (Fla. 1996)); Ferris v. Turlington , 510 So. 2d 292 (Fla. 1987) .

20 . As stated by the Florida Supreme Court:

Clear and convincing evid ence requires that the

evidence must be found to be credible; the facts to

which the witnesses testify must be distinctly

remembered; the testimony must be precise and

explicit and the witnesses must be lacking in

confusion as to the facts in issue. The ev idence

must be of such weight that it produces in the mind

of the trier of fact a firm belief or conviction,

without hesitancy, as to the truth of the allegations

sought to be established.

In re Henson , 913 So. 2d 579, 590 (Fla. 2005) (quoting Slomowitz v. Walker ,

492 So. 2d 797, 800 (Fla. 4th DCA 1983)). This burden of proof may be met

where the evidence is in conflict; however, Ñ it seems to preclude evidence that

is ambiguous. Ò Westinghouse Elec. Corp. v. Shuler Bros., Inc ., 590 So. 2d 986,

988 (Fla. 1s t DCA 1991) .

2 1 . Penal statutes must be construed in terms of their literal meaning and

words used by the Legislature may not be expanded to broaden the

application of such statutes. Elmariah v. Dep't of Pro . Reg ul ., Bd. of Med. ,

574 So. 2d 164, 165 (Fla. 1st DCA 1990); Griffis v. Fish & Wildlife Conser.

Comm'n , 57 So. 3d 929, 931 (Fla. 1st DCA 2011); Beckett v. Dep't of Fin.

Servs ., 982 So. 2d 94, 100 (Fla. 1st DCA 2008). Ñ No conduct is to be regarded

as included within a penal statute that is not reasonab ly proscribed by it; if

there are any ambiguities included, they must be construed in favor of the

licensee. Ò McClung v. Crim. Just. Stds. & Training Comm'n , 458 So. 2d 887,

888 (Fla. 5th DCA 1984) ; Munch v. DepÔt. of Pro . Regul . , Div. of Real Estate ,

592 So. 2d 1136, 1143 (Fla. 1st DCA 1992).

2 2 . The allegations of fact set forth in the NOID are the grounds upon

which this proceeding is predicated. Trevisani v. Dep't of Health , 908 So. 2d

1108 (Fla. 1st DCA 2005) (administrative complaint charged physician with a

failure to create medical records; proof of a failure to retain medical records

cannot support a finding of guilt); see also Cottrill v. Dep't of Ins. , 685 So. 2d

1371, 1372 (Fla. 1st DCA 1996). Furthermore, due process prohibits the

Department fro m taking disciplinary action against a licensee based on

matters not specifically alleged in the charging instrument, unless those

matters have been tried by consent. See Delk v. Dep't of Pro . Reg ul . , 595 So.

2d 966, 967 (Fla. 5th DCA 1992).

2 3 . Pursuant t o section 320.27(4)(a), Ñ [a] license certificate shall be issued

by the department in accordance with such application when the application

is regular in form and in compliance with the provisions of this section. Ò

2 4 . Pursuant to the plain terms of the st atute, a license application must

be processed, and the license issued , if the application is Ñ regular in form and

in compliance Ò with section 320.27 .

2 5 . As set forth above, the Department admits that the 2021 Renewal

Application was regular in form and c omplied with the statute. Thus, under

the express terms of the statute, the Department was without authority to

deny the 2021 Renewal Application .

2 6 . According to Jaime Williams, Dealer License Administrator ,

Ñ [ t ]here was no issue with the renewal. Ò The D epartment admits that the

2021 Renewal Application was proper and free from any issues which would

warrant denial. Despite this acknowledgment , the Department denied the

2021 Renewal Application Ñ because we were made aware of the felony Ò of

Mr. Vernon .

2 7 . Because Mr. Vernon was convicted of a felony, the Department

asserted that it was entitled to deny the 2021 Renewal Application pursuant

to section 320.27(9)(a). However, section 320.27(9)(a) does not apply to the

DepartmentÔs review of license applicatio ns; it applies to RespondentÔs ability

to deny, suspend, or revoke a license that has already been Ñ issued

hereunder. Ò Instead, the Department Ôs ability to reject a license application is

controlled by section 320.27(4)(a) .

2 8 . If the Department believes a provision of section 320.27(9)(a) has been

implicated, its recourse is to suspend, revoke , or deny a license that has

already been issued Ð not to deny an application. The Legislature crafted the

statute in this manner to prevent the Department from putting a dealer out

of business without due process. Florida courts have long recognized that a

failure to renew a license is a revocation of the license, and an agency may

not, as the Department has done here, refuse to renew a license to avoid the

protections afforded a licensee relative to revocation. See Dubin , 262 So. 2d

at 274 - 75 ( Ñ The courts of this State have held that refusal to renew a license

to a person who has once demonstrated that he possesses the statutory

prerequisites to licensure cannot be used as a substitute for a license

revocation proceeding. Ò ). That is exactly what has happened in this case.

2 9 . That the DepartmentÔs action in this case violated applicable

provisions of Florida law is further buttressed by the provision in

section 320.27(9) (a) , which only permits action against a license Ñ upon proof Ò

that one of the violations set forth therein has occurred. Thus, the plain

language of the statute makes clear that the Department must prove a

violation before taking action against a license. Indeed, the DepartmentÔs

own NOID seems to indicate that the Department believes it should afford

TVSA a hearing before putting it out of business, because the NOID refers to

the denial as Ñ proposed agency action Ò and advises that TVSA has a Ñ right to

an a dministrative hearing. Ò Notwithstanding its acknowledgement that

TVSA had a right to an administrative hearing , and TVSAÔs timely exercise

of that right, the Department effect ively revo ked TVSAÔs license because

TVSA can no longer operate as a motor vehicl e dealer.

30 . This is exactly the denial of due process that section 320.27 and

FloridaÔs Administrative Procedure Act is structured to avoid and is why

section 320.27(4) requires that an application be approved if regular in

form and in compliance with th e statute . The Department may not create a

backdoor revocation by refusing to renew TVSAÔs license. See Dubin ,

262 So. 2d at 274 ( R efusal to renew a license to a person who has once

demonstrated that he possesses the statutory prerequisites to licensure

ca nnot be used as a substitute for a license revocation proceeding.); Vocelle v.

Riddell , 119 So. 2d 809 (Fla. 2d DCA 1960) ( Ñ [O]nce a license ha[s] been

issued, the annual renewal thereof follows as a ministerial duty; and if a

violation occurs the [agency] must resort to revocation rather than denial of

renewal. Ò ).

3 1 . Section 320. 27 (4) and the DepartmentÔs own testimony make clear

that the 2021 Renewal Application should have been approved. If the

Department believed that TVSA committed an action delineate d in

section 320. 27 (9)(a), the remedy was to serve an administrative complaint

seeking to take action against TVSAÔs license such that TVSA would have

been able to obtain a hearing before having its license suspended or revoked.

What the Department was not permitted to do (and what it did) was to strip

TVSA of its license without an opportunity for a hearing.

3 2 . As grounds for its denial of the 2021 Renewal Application, the

Department alleged in the NOID that: (1) t he April 2018 felony conviction of

Mr. Ve rnon, the individual, constitutes a basis to deny the renewal of TVSAÔs

license under section 320.27(9)(a)2 . ; and (2) TVSA Ôs incorrect response to the

Felony Question on the 2019 Renewal Application constituted a basis to deny

the renewal of TVSA Ôs license in 2021 under section 320.27(9)(a)1.

3 3 . Section 320.27(9)(a)2. provides that the Ñ department may deny,

suspend, or revoke any license issued hereunder È upon proof that an

applicant or a licensee has [b]een convicted of a felony. Ò (emphasis added).

3 4 . T he Department stipulated that , for purposes of this section , TVSA is

both the applicant and licensee and that TVSA has not been convicted of a

felony.

3 5 . Although the evidence is clear, and the parties agree , that the

applicant or licensee has not been co nvicted of a felony, the Department

asserts that section 320. 27 (9)(a)2. is a proper basis for denial. The

DepartmentÔs argument in this regard is that section 320.27(3) requires

officers and directors of corporate applicants to submit fingerprints with the ir

application for initial licensure Ñ for the purpose of determining any prior

criminal record or any outstanding warrants, Ò and, because section 320.27(3)

mentions officers and directors, section 320.27(9)(a) must also apply to

officers and directors.

3 6 . This argument compels the opposite interpretation from what the

Department asserts. Ñ Where the legislature includes wording in one section

of a statute and not in another, it is presumed to have been intentionally

excluded. Ò Fl a . Carry, Inc. v. Univ . of N . Fla ., 133 So. 3d 966, 971 (Fla. 1st

DCA 2013). The L egislatureÔs mention of officers and directors of the

applicant corporation in section 320.27(3) , while not mentioning them in

section 320.27(9)(a) , evidences a clear intent on the part of the L egislatu re to

not include the actions of officers and directors as part of the prohibitions in

section 320.27(9)(a) .

3 7 . It is clear that section 320.27(9)(a) only applies to the actions of a

Ñ licensee or applicant. Ò Ñ When the language of the statute is clear and

unambiguous and conveys a clear and definite meaning, there is no occasion

for resorting to the rules of statutory interpretation and construction; the

statute must be given its plain and obvious meaning. Ò Atwater v. Kortum ,

95 So. 3d 85, 90 (Fla. 2012) (q uoting Holly v. Auld , 450 So. 2d 217, 219

(Fla. 1984)).

3 8 . In this case, TVSA is the licensee and applicant and has not been

convicted of a felony. Accordingly, the Department has not established that

the licensee or applicant has been convicted of a felo ny as required by

section 320.27(9)(a)2., and the DepartmentÔs reliance on that statutory

provision as a basis for denying the 2021 Renewal Application is in error.

3 9 . Section 320.27(9)(a)1. provides that the Ñ department may deny,

suspend, or revoke any l icense issued hereunder È upon proof that an

applicant or a licensee has committed fraud or willful misrepresentation in

application for or in obtaining a license. Ò As set forth above, Munch dictates

that this statutory provision be strictly construed in f avor of TVSA. 592 So.

2d at 1143.

40 . The statuteÔs requirement of fraud or intentional misrepresentation

indicates that the Department must prove something more than a mistake to

take action against TVSAÔs license. The Department must prove by clear and

c onvincing evidence that TVSA acted to intentionally deceive the Department

by way of the 2019 Renewal Application.

4 1 . The First District Court of Appeal addressed this exact issue in

Munch . There the Department of Professional Regulation sought to suspend

a real estate brokerÔs license. The statute at issue in Munch provided that

action could be taken against a license if the licensee was Ñ guilty of fraud,

misrepresentation, concealment, false promises, false pretenses, dishonest

dealing È Ò thereby violat ing s ection 475.25(1)(b) , Florida Statutes . The

agency alleged that the licensee had concealed certain commissions from his

broker such that his license should be suspended. Munch , 592 So. 2d at 1143.

The licensee admitted that he had not told the broker a bout the commissions,

but the statute required more. Id. at 1143 - 44. The First District Court of

Appeal held that the statuteÔs use of fraud, misrepresentation, or

concealment required Ñ that an intentional act be proved before a violation

may be found. Ò Id .

4 2 . The language of section 320.27(9)(a)1 . similarly compels an

interpretation that requires the Department to prove that TVSA acted with

intent to defraud or deceive the Department in obtaining or applying for a

license. The Department cannot prove by c lear and convincing evidence that

TVSA intentionally deceived or defrauded the D epartment with respect to the

2019 Renewal Application. 2

2 Additionally, even if Mr. VernonÔs felony conviction were applicable to section

320.27(9)(a)2., conviction of a felony alone is in sufficient for action aga inst TVSAÔs license.

The Department must establish that the felony is directly related to standards determined to

be Ñnecessary and reasonably related to the protection of the public health, safety, and

welfare for the specific È profession, or business fo r which the license È is sought.Ò

§ 112.011(b), Fla . Stat. The Department has not proven or even alleged that Mr. VernonÔs

4 3 . In fact, the Department presented no evidence at all as to TVSAÔs

intent . The Department does not know whether the box was checked Ñ No Ò to

the Felony Question on the 2019 Renewal Application as a mistake . All the

Department knows is that the wrong box was checked. This is in sufficient to

establish that TVSA intentionally defrauded or deceived the Department

with respec t to the 2019 Renewal Application.

4 4 . The Department has not established that TVSA has committed fraud

or willful misrepresentation with respect to the 2019 Renewal Application as

required by section 320.27(9)(a)2., and the DepartmentÔs reliance on that

s tatutory provision as a basis for denying the 2021 Renewal Application is

not supported by clear and convincing evidence .

R ECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is

R ECOMMENDED that TVSA Ôs March 2021 Renewal A ppli cation to renew its

independent motor vehicle dealer license be accepted and TVSA Ôs license be

renewed.

D ONE A ND E NTERED this 13th day of January , 2022 , in Tallahassee, Leon

County, Florida.

S

M ARY L I C REASY

Administrative Law Judge

1230 Apalachee Parkw ay

Tallahassee, Florida 32399 - 3060

(850) 488 - 9675

www.doah.state.fl.us

conviction was of a felony directly related to a standard determined to be necessary and

reasonably related to the protection of the public health, safety, and welfare as relates to the

business of a n independent motor vehicle dealer.

Filed with the Clerk of the

Division of Administrative Hearings

this 13th day of January , 2022 .

C OPIES F URNISHED :

Joseph R. Gillespie, Agency Clerk Marc E. Brandes, E squire

Department of Highway Safety Kurkin Forehand Brandes , LLP

a nd Motor Vehicles 18851 Northeast 29th Avenue , Suite 303

Neil Kirkman Building, Room A - 432, MS - 02 Aventura, Florida 33180

2900 Apalachee Parkway

Tallahassee, Florida 32399 - 0504 John W. Forehand, Esquire

Robert Craig Spickard, Esquire

Sena Marie Lizenbee, Esquire Kurkin Forehand Brandes, LLP

Department of Highway Safety 1089 West Morse Boulevard , Suite D

and Motor Vehi c les Winter Park, Florida 32789

Neil Kirkman Building, Room A - 432, MS - 02

2900 Apalachee Parkw ay Chris tie S. Utt, General Counsel

Tallahassee, Florida 32399 - 0504 Department of Highway Safety

and Motor Vehi c les

Robert Kynoch, Director Neil Kirkman Building, Room A - 432

Division of Motorist Services 2900 Apalachee Parkway

Department of Highway Safety Tallahassee, Florida 32399 - 0500

and Motor Vehi c les

Neil Kirkman Building, Room B - 439, MS - 80

2900 Apalachee Parkway

Tallahassee, Florida 32399 - 0635

N OTICE OF R IGHT T O S UBMIT E XCEPTIONS

All parties have the right to submit written exce ptions 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.