92-006605RP Chrysler Corporation And Camco Automotive, Inc., D/B/A Spacecoast Chrysler Jeep Dodge vs. Department Of Legal Affairs Status: Closed DOAH Final Order on Tuesday, February 9, 1993.

Summary: Agency interpretation of lemon law rights period to refer to miles of operation by the consumer was reasonable and not clearly erroneous.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

CHRYSLER CORPORATION, )

)

Petitioner, )

)

v. ) CASE NO. 92-6605RP

)

DEPARTMENT OF LEGAL AFFAIRS, )

)

Respondent. )

__________________________________)

FINAL ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly

designated Hearing Officer, William J. Kendrick, held a formal hearing in the

above-styled case on December 7, 1992, in Tallahassee, Florida.

APPEARANCES

For Petitioner: Dean Bunch, Esquire

Cabaniss, Burke & Wagner, P.A.

851 East Park Avenue

Tallahassee, Florida 32301

For Respondent: Janet L. Smith

Michael C. Godwin, Esquire

Department of Legal Affairs

Lemon Law Arbitration Program

The Capitol

Tallahassee, Florida 32399-1050

STATEMENT OF THE ISSUE

At issue in this proceeding is whether respondent's proposed rule 2-

30.001(3)(e), constitutes an invalid exercise of delegated legislative

authority.

PRELIMINARY STATEMENT

This is a rule challenge brought under the provisions of Section 120.54(4),

Florida Statutes, to challenge the propriety of respondent's proposed rule 2-

30.001(3)(e), which would define "24,000 miles of operation," for purposes of

calculating the running of the Lemon Law rights period, as "miles of operation

by the consumer."

At hearing, petitioner called Philip Nowicki, PhD, Executive Director,

Lemon Law Program, Department of Legal Affairs, and Gary Disney, a warranty cost

analysis and control manager for Chrysler Corporation, as witnesses, and its

exhibits 1, 3 and 4 were received into evidence. Respondent called Philip

Nowicki, PhD, accepted as an expert in the implementation, development and

administration of the Florida Lemon Law Program, as a witness, and its exhibits

1-11, 15, and 16, were received into evidence.

The transcript of hearing was filed December 29, 1992, and the parties were

granted leave until January 8, 1993, to file proposed findings of fact. The

parties' proposals have been addressed in the appendix to this final order.

FINDINGS OF FACT

Background

1. Petitioner, Chrysler Corporation (Chrysler), is a "manufacturer" of

motor vehicles as that term is defined by Section 681.102(10), Florida Statutes

(1992 Supp.), 1/ and, as such, is subject to the provisions of Chapter 681,

Florida Statutes, the "Motor Vehicle Warranty Enforcement Act." Consequently,

Chrysler is substantially affected by the rules promulgated by respondent,

Department of Legal Affairs (Department) to implement Chapter 681, and the

parties have stipulated that it has standing to maintain this rule challenge

proceeding.

2. The Motor Vehicle Warranty Enforcement Act (the "Lemon Law") imposes

upon manufacturers, as defined by Section 681.102(10), a duty to repair

nonconformities which are first reported by consumers during the "Lemon Law

rights period," and liability for the refund of the purchase price or

replacement of those motor vehicles if their nonconformities are not corrected

within a reasonable number of repair attempts. A consumer's right to exercise

the remedies provided by the Lemon Law accrue from the date the consumer takes

delivery of the motor vehicle.

3. The "Lemon Law rights period" is defined by Section 681.102(9), Florida

Statutes, as follows:

"Lemon Law rights period" means the period

ending 18 months after the date of the

original delivery of a motor vehicle to a

consumer or the first 24,000 miles of

operation, whichever occurs first.

4. On October 9, 1992, the Department published notice, inter alia, of

proposed rule 2-30.001(3)(e), in volume 18, number 41, of the Florida

Administrative Weekly. Such rule would define "24,000 miles of operation," for

purposes of calculating the running of the Lemon Law rights period established

by Section 681.102(9), Florida Statutes, as "miles of operation by the

consumer."

5. By petition filed with the Division of Administrative Hearings on

October 30, 1992, Chrysler timely challenged the validity of such proposed rule

as an invalid exercise of delegated legislative authority. The predicate for

Chrysler's challenge was its contention that the proposed rule enlarges,

modifies or contravenes Section 618.102(9), Florida Statutes, the provision of

law sought to be implemented. 2/

The proposed rule

6. Proposed rule 2-30.001(3)(e) provides:

When calculating the running of the Lemon Law rights period as defined by

s. 681.102(9), FS., "24,000 miles of operation" means miles of operation by the

consumer. If the consumer is a subsequent transferee as defined in s.

681.102(4), FS., "24,000 miles of operation" means miles of operation by both

the original consumer and the subsequent transferee.

7. The gravamen of the dispute between the parties concerning the

propriety of the proposed rule is a disagreement regarding the interpretation to

be accorded Section 681.102(9), Florida Statutes, which defines the "Lemon Law

rights period" as:

. . . the period ending 18 months after the

date of the original delivery of a motor

vehicle to a consumer or the first 24,000

miles of operation, whichever occurs first.

8. Chrysler contends that the "Lemon Law rights period," as defined by

Section 681.102(9), is clear and unambiguous, and that the "first 24,000 miles

of operation" refers to the actual mileage shown on the odometer of the motor

vehicle, without regard to when or by whom the mileage was accrued. So read,

proposed rule 2-30.001(3)(e) conflicts with the law sought to be implemented.

9. The position advanced by Chrysler is of import to it since Chrysler

impresses new motor vehicles into use as company cars and permits its dealers to

purchase and use new vehicles for demonstration purposes for customers or

personal use, prior to their retail sale. During this period, the motor vehicle

accumulates mileage on its odometer as a result of such "demonstrator" use.

Excluding the mileage so accrued from the running of the "Lemon Law rights

period," as contemplated by the proposed rule, could extend Chrysler's liability

under the Lemon Law beyond the first 24,000 miles of operation registered on the

vehicle, if it issued a warranty as a condition of sale to the consumer. See

Section 681.102(14), definition of "motor vehicle," discussed infra.

10. Contrasted with Chrysler's position, the Department interprets the

"first 24,000 miles of operation" provision of Section 681.102(9), to relate to

operation by a consumer, and would exclude any mileage accrued on the vehicle

prior to its delivery to the consumer when calculating the "Lemon Law rights

period." So interpreted, the proposed rule is consistent with the law sought to

be implemented.

11. The Department's interpretation is premised on its reading of Section

681.102(9) in pari materia with Section 681.102(14) which defines a "motor

vehicle" as:

. . . a new vehicle, . . . and includes a

vehicle used as a demonstrator or leased

vehicle if a manufacturer's warranty was

issued as a condition of sale, or the lessee

is responsible for repairs. . . .

So read, a demonstrator is considered a new vehicle, and no distinction is made

in applying the Lemon Law rights period between consumers who purchase a motor

vehicle with no or minimal mileage on its odometer at delivery and those who

purchase a demonstrator.

The proposed rule's predecessor

12. Pursuant to the provisions of Chapter 88-95, Laws of Florida, Chapter

681, Florida Statutes, was amended effective January 1, 1989, to establish what

has been referred to as the Lemon Law. At that time, the "Lemon Law rights

period" was defined as:

. . . the period ending 1 year after the date

of the original delivery of a motor vehicle to

a consumer or the first 12,000 miles of

operation, whichever occurs first.

Section 681.102(7), Florida Statutes (1988 Supp.).

13. To implement the provisions of the Lemon Law, the Department adopted

Rule 2-30.001, Florida Administrative Code, in or about January 1989. At that

time, the rule included the following definition of the "Lemon Law rights

period":

The "Lemon Law Rights period" is the period

ending one year after the date of the original

delivery of the motor vehicle to the consumer,

or the first 12,000 miles of operation,

whichever occurs first. This period may be

extended if a substantial defect or condition

is reported to the manufacturer or its

authorized dealer during the Lemon Law Rights

period, but has not been cured by the

expiration of the period. If you put 12,000

miles on your vehicle (miles driven minus

miles on the vehicle on the date of delivery)

before the end of the first year of operation,

you should note that date in your personal

records. If a warranty problem is examined or

repaired during the Lemon Law Rights period,

be sure you get and keep a copy of the work

order which contains the date, odometer

reading, and a description of that problem.

Your work order copy provides the best proof

as to when the problem was first reported.

[Respondent's exhibits 3 and 15].

14. Consistent with the foregoing rule, the Florida New Motor Vehicle

Arbitration Board, which is charged with the responsibility of arbitrating

disputes under the Lemon Law, has consistently construed the provisions of the

"Lemon Law rights period" concerning "miles of operation" to relate to operation

by the consumer, and has excluded any mileage accrued on the vehicle prior to

its delivery to the consumer when calculating the "Lemon Law rights period."

[See e.g., Respondent's exhibits 5, 8 and 9].

15. Since the Lemon Law was enacted, there has been no change in the

definition of "Lemon Law rights period," or the Department's rule, until the

passage of Chapter 92-88, Laws of Florida, effective July 1, 1992. Under such

law, the "Lemon Law rights period" was amended to read as follows:

(9)(7) "Lemon Law rights period" means the

period ending 18 months 1 year after the date

of the original delivery of a motor vehicle

to a consumer or the first 24,000 12,000 miles

of operation, whichever occurs first.

Section 681.102(9), Florida Statutes.

16. Here, the proposed rule is designed to reflect the change in the

"Lemon Law rights period" from one year or 12,000 miles to 18 months or 24,000

miles, occasioned by the aforesaid amendment to Chapter 681. The Department's

interpretation of the "Lemon Law rights period" concerning "miles of operation"

to relate to operation by the consumer remains, however, consistent with its

prior rule and interpretation.

CONCLUSIONS OF LAW

17. The Division of Administrative Hearings has jurisdiction over the

parties to, and the subject matter of, these proceedings. Section 120.54(4),

Florida Statutes.

18. To prevail in this case, the burden is upon the petitioner to

demonstrate, by a preponderance of the evidence, that the proposed rule is an

invalid exercise of delegated legislative authority. Humana, Inc. v. Department

of Health and Rehabilitative Services, 469 So.2d 889 (Fla. 1st DCA 1985), and

Agrico Chemical Co. v. Department of Environmental Regulation, 365 So.2d 759

(Fla. 1st DCA 1978).

19. Pertinent to this case, an invalid exercise of delegated legislative

authority is defined by Section 120.52(8), Florida Statutes, as follows:

"Invalid exercise of delegated legislative

authority" means action which goes beyond the

powers, functions, and duties delegated by

the Legislature. A proposed or existing rule

is an invalid exercise of delegated

legislative authority if any one or more of

the following apply.

* * *

(c) The rule enlarges, modifies, or

contravenes the specific provisions of law

implemented, citation to which is required by

s. 120.54(7). . . .

20. Whether the proposed rule enlarges, modifies, or contravenes the

provisions of law implemented is, as heretofore noted in the findings of fact,

dependent upon whether the "first 24,000 miles of operation" provision of

Section 681.102(9), Florida Statutes, may appropriately be interpreted to mean

miles of operation by the consumer.

21. Generally, an administrative construction of a statute by an agency

responsible for its administration is entitled to great deference and should not

be overturned unless clearly erroneous. Department of Environmental Regulation

v. Goldring, 477 So.2d 532 (Fla. 1985), All Seasons Resorts, Inc. v. Division of

Land Sales, Condominiums and Mobile Homes, 455 So.2d 544 (Fla. 1st DCA 1984),

and Sans Souci v. Division of Land Sales and Condominiums, 421 So.2d 623 (Fla.

1st DCA 1982). Moreover, the agency's interpretation does not have to be the

only one or the most desirable one; it is enough if it is permissible. Florida

Power Corp. v. Department of Environmental Regulation, 431 So.2d 684 (Fla. 1st

DCA 1983). However, where the legislative intent as evidenced by a statute is

clear and unambiguous, there is no need for any construction or interpretation,

and the forum need only give effect to the plain meaning of its terms. Van Pelt

v. Hilliard, 75 Fla. 792, 78 So. 693 (1918).

22. The fundamental rules governing construction applicable to the instant

case were aptly set forth in Florida State Racing Commission v. McLaughlin, 102

So.2d 574, 575 (Fla. 1958), as follows:

"It is elementary that the function of the

Court is to ascertain and give effect to the

legislative intent in enacting a statute.

"In applying this principle certain rules have

been adopted to guide the process of judicial

thinking. The first of these is that the

Legislature is conclusively presumed to have a

working knowledge of the English language and

when a statute has been drafted in such a

manner as to clearly convey a specific meaning

the only proper function of the Court is to

effectuate this legislative intent.

"This rule is subject to the qualification

that if a part of a statute appears to have a

clear meaning if considered alone but when

given that meaning is inconsistent with other

parts of the same statute or others in pari

materia, the Court will examine the entire

act and those in para materia in order to

ascertain the overall legislative intent.

"When construing a particular part of a

statute it is only when the language being

construed in and of itself is of doubtful

meaning or doubt as to its meaning is

engendered by apparent inconsistency with

other parts of the same or closely related

statute that any matter extrinsic the statute

may be considered by the Court in arriving at

the meaning of the language employed by the

Legislature.

Accord, State v. State Racing Commission, 112 So.2d 825 (Fla. 1959), and Van

Pelt v. Hilliard, 75 Fla. 792, 78 So. 693 (Fla. 1918). See also, State v. Webb,

398 So.2d 820, 824 (Fla. 1981), ("It is a fundamental rule of statutory

construction that legislative intent is the polestar by which the court must be

guided and this intent must be given effect even though it may contradict the

strict letter of the statute."), and Department of Professional Regulation v.

Florida Dental Hygienist Association, Inc., 18 FLW D326 (Fla. 1st DCA 1993).

23. Here, while the provisions of Section 681.102(9), Florida Statutes, if

read in isolation, could be ascribed the import advanced by Chrysler, a reading

of such subsection with the remaining provisions of Chapter 681 evidences a

different legislative intent or, at a minimum, raises sufficient ambiguity as to

accord deference to the Department's interpretation. Supportive of such

conclusion is the expression of legislative intent at Section 681.101 as

follows:

The Legislature recognizes that a motor

vehicle is a major consumer purchase and that

a defective motor vehicle undoubtedly creates

a hardship for the consumer . . . It is

. . . the intent of the Legislature to provide

the statutory procedures whereby a consumer

may receive a replacement motor vehicle, or a

full refund, for a motor vehicle which cannot

be brought into conformity with the warranty

provided for in this chapter . . . ,

and the definition at Section 681.102(14), which defines a "motor vehicle" for

purposes of the Lemon Law, as follows:

"Motor vehicle" means a new vehicle, . . . and

includes a vehicle used as a demonstrator or

leased vehicle if a manufacturer's warranty

was issued as a condition of sale, or the

lessee is responsible for repairs . . . .

This definition makes clear that a demonstrator is considered a new motor

vehicle as long as a manufacturer's warranty was issued as a condition of sale.

Accord, Chrysler Motors Corp. v. Flowers, 803 P.2d 314 (Wash. 1991). Moreover,

the definition at Section 681.102(18) of "reasonable offset for use," which

provides the method for calculating a credit to the manufacturer for the

consumer's use when it is required to refund the purchase price, implicitly

recognizes that, when acquired by the consumer, the motor vehicle may have

mileage on it not attributable to the consumer.

24. Accordingly, the Department's conclusion that when applying the "Lemon

Law rights period" no distinction should be made between previously unused

vehicles and demonstrator vehicles is consistent with the provisions of Chapter

681, and its interpretation of Section 681.102(9), as evidenced by the proposed

rule, is reasonable and not clearly erroneous.

CONCLUSION

Based on the foregoing findings of fact and conclusions of law, it is

ORDERED that Chrysler has failed to demonstrate that proposed rule 2-

30.001(3)(e) is an invalid exercise of delegated legislative authority, and its

petition is denied.

DONE AND ORDERED in Tallahassee, Leon County, Florida, this 9th day of

February 1993.

___________________________________

WILLIAM J. KENDRICK

Hearing Officer

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

[phone]

Filed with the Clerk of the

Division of Administrative Hearings

this 9th day of February 1993.

ENDNOTES

1/ All references are to Florida Statutes (1992 Supp.) unless otherwise

indicated.

2/ The petition also challenged the validity of proposed rule 2-32.035;

however, the parties resolved their dispute regarding such rule and petitioner

withdrew its challenge at hearing. Accordingly, such challenge is dismissed as

moot.

APPENDIX

Petitioner's proposed findings of fact are addressed as follows:

1. Addressed in paragraphs 4 and 6.

2-4. Addressed in paragraphs 5 and 7.

5-7. Addressed in paragraphs 8 and 10.

8-13. Addressed in paragraphs 1 and 9, otherwise

unnecessary detail.

14 & 15. Addressed in paragraphs 1 and 9, otherwise a

conclusion of law.

16-18. Unnecessary detail.

19, 26 & 27. Not shown to be pertinent since Dr. Norwicki has

been of the opinion that, as drafted, the Lemon Law

rights period with regard to mileage starts upon

delivery to the consumer.

20 & 21. Addressed in paragraph 23.

22-25. Not shown to be relevant.

28 & 29. Addressed in paragraph 13, otherwise rejected as

argument.

30. Addressed in paragraph 14.

31. To the extent pertinent, or necessary to the result

reached, addressed in the response to paragraphs

19, 26 and 27.

Respondent's proposed findings of fact are addressed as follows:

1. Addressed in paragraphs 1 and 4, otherwise

unnecessary detail.

2. Addressed in paragraph 1.

3. Addressed in paragraphs 15 and 16.

4 & 5. Addressed in paragraph 2.

6 & 7. Addressed in paragraphs 15 and 16.

8-11. Addressed in paragraphs 12 and 13.

12. Addressed in paragraph 14.

13. Addressed in paragraph 16.

14-17. Addressed in paragraph 9.

18. Addressed in paragraph 9.

19-21. Addressed in paragraph 2, otherwise a legal

conclusion.

COPIES FURNISHED:

Dean Bunch, Esquire

Cabaniss, Burke & Wagner, P.A.

851 East Park Avenue

Tallahassee, Florida 32301

Janet L. Smith

Michael C. Godwin, Esquire

Department of Legal Affairs

Lemon Law Arbitration Program

The Capitol

Tallahassee, Florida 32399-1050

The Honorable Robert A. Butterworth

Attorney General

The Capitol, Plaza Level

Tallahassee, Florida 32399-1050

Carroll Webb, Executive Director

Administrative Procedures Committee

120 Holland Building

Tallahassee, Florida 32399-1300

Liz Cloud, Chief

Bureau of Administrative Code

Room 1802, The Capitol

Tallahassee, Florida 32399-0250

NOTICE OF RIGHT TO JUDICIAL REVIEW

A party who is adversely affected by this final order is entitled to judicial

review pursuant to Section 120.68, Florida Statutes. Review proceedings are

governed by the Florida rules of appellate procedure. Such proceedings are

commenced by filing one copy of a notice of appeal with the Agency Clerk of the

Division of Administrative Hearings and a second copy, accompanied by filing

fees prescribed by law, with the District Court of Appeal, First District, or

with the District Court of Appeal in the appellate district where the party

resides. The notice of appeal must be filed within 30 days of rendition of the

order to be reviewed.

=================================================================

DISTRICT COURT OPINION

=================================================================

IN THE DISTRICT COURT OF APPEAL

FIRST DISTRICT, STATE OF FLORIDA

CHRYSLER CORPORATION, NOT FINAL UNTIL TIME EXPIRES TO

FILE MOTION FOR REHEARING AND

Appellant, DISPOSITION THEREOF IF FILED.

v. CASE NO. 93-729

DOAH CASE NO. 92-6605RP

THE FLORIDA DEPARTMENT OF

LEGAL AFFAIRS,

Appellee.

_____________________________/

Opinion filed April 26, 1994.

Appeal from an order of the Division of Administrative Hearings. Dean Bunch of

Cabaniss, Burke & Wagner, P.A., Tallahassee, for appellant. Robert A.

Butterworth, Attorney General; Janet L. Smith, Assistant Attorney General,

Tallahassee, for appellee.

PER CURIAM.

AFFIRMED.

BOOTH, WEBSTER and BENTON, JJ., concur.

M A N D A T E

From

DISTRICT COURT OF APPEAL OF FLORIDA

FIRST DISTRICT

To the Honorable, William J. Kendrick, Hearing Officer

Division of Administrative Hearings

WHEREAS, in that certain cause filed in this Court styled:

CHRYSLER CORPORATION

vs. Case No. 93-729

Your Case No. 92-6605RP

DEPARTMENT OF LEGAL AFFAIRS

The attached opinion was rendered on April 26, 1994,

YOU ARE HEREBY COMMANDED that further proceedings be had in accordance with said

opinion, the rules of this Court and the laws of the State of Florida.

WITNESS the Honorable E. Earle Zehmer

Chief Judge of the District Court of Appeal of Florida, First District and the

Seal of said court at Tallahassee, the Capitol, on this 12th day of May, 1994

_______________________________

Clerk, District Court of Appeal of Florida,

First District