Recovery Racing, LLC d/b/a Maserati of Fort Lauderdale v. State of Florida Department of Highway Safety and Motor Vehicles, Maserati North America, Inc.

DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
FOURTH DISTRICT
RECOVERY RACING, LLC d/b/a MASERATI OF FORT LAUDERDALE,
Appellant,
v.
STATE OF FLORIDA DEPARTMENT OF HIGHWAY SAFETY AND
MOTOR VEHICLES, MASERATI NORTH AMERICA, INC., and RICK
CASE WESTON, LLC d/b/a RICK CASE MASERATI,
Appellees.
No. 4D15-0650
[June 1, 2016]
Appeal from the State of Florida, Division of Administrative Hearings;
L.T. Case Nos. DMV 14-1016 and DOAH 14-2700.
Raoul G. Cantero, David P. Draigh, and Ryan A. Ulloa of White & Case
LLP, Miami, for appellant.
Susan V. Warner and Andy Bertron of Nelson Mullins Riley &
Scarborough, LLP, Jacksonville and Tallahassee, and Robert D. Cultice of
Wilmer Cutler Pickering Hale and Dorr LLP, Boston, Massachusetts, for
appellee, Maserati North America, Inc.
Robert E. Sickles and John P. Gaset of Broad and Cassel, Tampa, for
appellee Rick Case Weston, LLC d/b/a Rick Case Maserati.
A. Edward Quinton, III and Kenneth L. Paretti of Quinton & Paretti,
P.A., Miami, for Amicus Curiae South Florida Automobile Dealers
Association in support of Recovery Racing, LLC d/b/a Maserati of Fort
Lauderdale.
DAMOORGIAN, J.
Recovery Racing, LLC appeals an administrative order in which the
Department of Highway Safety and Motor Vehicles (the “Department”)
determined that Recovery Racing lacked standing to protest Rick Case
Weston, LLC, d/b/a Rick Case Maserati’s (the “Proposed Dealership”)
proposal to establish a new Maserati dealership. We affirm.
Legislative Framework
Before delving into the specifics of this case, it is necessary to
understand the legislative framework governing the licensing of
automotive dealerships in the State of Florida. The relevant statutes are
set forth in Chapter 320 of the Florida Statutes, the provisions of which
the Department is charged with administering and enforcing. § 320.011,
Fla. Stat. (2014).
In section 320.605, the Florida Legislature manifested an intent “to
protect the public health, safety, and welfare of the citizens of the state by
regulating the licensing of motor vehicle dealers and manufacturers,
maintaining competition, providing consumer protection and fair trade
and providing minorities with opportunities for full participation as motor
vehicle dealers.” § 320.605, Fla. Stat. (2014). To that end, it enacted
section 320.642, which outlines the procedures for obtaining a license to
relocate an existing dealership or establish a new dealership in an existing
market. § 320.642, Fla. Stat. (2014). Under section 320.642, the potential
licensee must notify the Department of its intent to establish an additional
dealership and the Department must then, in turn, publish a notice in the
Florida Administrative Register. § 320.642(1), Fla. Stat. (2014). At that
point, an existing dealership may protest the proposed dealership so long
as the existing dealership has standing. § 320.642(2)-(3).
In counties with a population exceeding 300,000 people (such as
Broward County), “[a]n 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 same line-make vehicle to be sold or serviced
by the proposed additional or relocated motor vehicle dealer” and is either:
1) located within 12.5 miles of the location of the proposed dealership, or
2) “can establish that during any 12-month period of the 36-month period
preceding the filing of the licensee’s 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.” § 320.642(3)(b)1.-
2., Fla. Stat. (2014). Relevant to this appeal is the second method of
establishing standing, which will be referred to as the “25% Test.”
Factual Background
Recovery Racing is a franchised Maserati dealer which sells cars from
its location in Broward County, Florida. In 2014, the Department
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published a notice that the Proposed Dealership intended to establish a
new Maserati dealership about seventeen miles away from Recovery
Racing’s dealership. Recovery Racing filed a “Petition or Complaint
Protesting the Establishment of Additional Dealership” with the
Department of Administrative Hearings (“DOAH”), alleging that it had
standing under the 25% Test and that Maserati was “receiving adequate
representation for the Maserati line-make in the community or territory of
the proposed additional dealership site by existing franchised same-line
dealers who register sales and leases in the community or territory.”
Thereafter, the Proposed Dealership and Maserati North America, Inc.
(“Maserati”) filed a joint motion requesting a hearing on the limited issue
of Recovery Racing’s standing. The Administrative Law Judge (“ALJ”)
granted the motion and also ruled that Recovery Racing bore the burden
of establishing its standing.
At the standing hearing, Recovery Racing presented the testimony of an
economist, Edward Stockton, who opined that Recovery Racing met the
criteria for standing under the 25% Test. In arriving at this determination,
Mr. Stockton began with all of Recovery Racing’s sales for the applicable
36-month period excluding wholesale sales, used vehicle sales, and sales
of aftermarket parts not associated with new vehicles. He then removed
any sales where the “beneficiary” of the transaction was a business (e.g.,
a company car). Based on the foregoing, Mr. Stockton opined that the
remainder was the total amount of Recovery Racing’s “retail sales of new
motor vehicles.”
To determine which of Recovery Racing’s “retail sales of new motor
vehicles” were made to persons with “registered household addresses”
within 12.5 miles of the Proposed Dealership, Mr. Stockton looked at
Recovery Racing’s sales files to find the primary home address of the
“ultimate beneficiary” of the sale. He looked to the sales files as opposed
to vehicle registration information because many of Recovery Racing’s
clients have multiple homes or use purchasing agents and, therefore, their
primary home address may be different than where the car is registered
with the Department.
After extracting the sales which met his definition of “retail sales of new
motor vehicles to registered household addresses” within 12.5 miles of the
proposed dealership, Mr. Stockton grouped the sales into “standing
periods.” Mr. Stockton described the “standing periods” as any 12-month
period—beginning on any day of a particular month and ending on the
same day of the month 12-months later—within the 36-month period
preceding the Proposed Dealership’s license application.
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Based on the afore-outlined methodology, Mr. Stockton concluded that
Recovery Racing had standing under the 25% Test during five “standing
periods.” None of the “standing periods” during which Mr. Stockton
determined Recovery Racing had standing began on the first of a month.
The Proposed Dealership and Maserati argued that the manner in
which Mr. Stockton interpreted the 25% Test called for manipulated data
and a skewed reading of the governing statute. They maintained that
under a plain language application of the 25% Test, Recovery Racing could
not establish that it had standing. In support of this position, the
Proposed Dealership and Maserati presented testimony from their own
expert, Sharif Farhat. Mr. Farhat opined that the highest percentage of
Recovery Racing’s “retail sales to registered household addresses” within
12.5 miles of the Proposed Dealership during any possible 12-month
period within the 36-months preceding the Proposed Dealership’s
application was 14.2%. In arriving at this conclusion, Mr. Farhat utilized
the following definitions when compiling the data to plug into the 25%
Test:
• “retail sales” meant sales to natural persons and to businesses
that buy fewer than ten vehicles in a year.
• “registered household addresses” meant the address of where the
vehicle sold by Recovery Racing was registered with the
Department.
• “12-month period” meant a period beginning on the first of the
month and ending on the last day of the calendar month.
The ALJ entered a recommended order concluding that Recovery
Racing did not have standing to protest the Proposed Dealership because
it could not satisfy the 25% Test. In so doing, the ALJ rejected Mr.
Stockton’s definition of the term “registered household addresses” as the
primary home address of the ultimate beneficiary of the sale and instead
found that “registered household addresses” as used in the statute meant
the address where the purchased vehicle was registered with the
Department. The ALJ also rejected Mr. Stockton’s interpretation of the
term “retail sales” as “suspect in that it requires investigation into whether
a business is a ‘beneficiary’ or an ‘instrument’ – again, information that is
highly subjective and easily manipulated.” Finally, the ALJ rejected Mr.
Stockton’s “rolling” definition of “12-month period,” reasoning that Rule
15C-7.004(9) of the Florida Administrative Code provides that the 36-
month lookback period is calculated based on the last day of the calendar
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month prior to the date of publication of the notice of intent to open a new
dealership. Thus, the ALJ reasoned the 12-month period must also be
based on whole calendar months. The Department issued a final order
adopting the recommended order in its entirety. This appeal follows.
Analysis
We begin our analysis by noting the well-established principle of law
that “administrative agencies are afforded wide discretion in interpreting
statutes which they administer. An agency’s statutory construction is
entitled to great weight and is not to be overturned on appeal, unless
clearly erroneous.” Braman Cadillac, Inc. v. Dep’t of Highway Safety &
Motor Vehicles, 584 So. 2d 1047, 1050 (Fla. 1st DCA 1991).
Recovery Racing takes issue with the Department’s interpretation of the
25% Test as set forth in section 320.642, arguing that it erroneously
placed the burden of proving standing on Recovery Racing and construed
the data points contained in the 25% Test contrary to the statute’s plain
language. We disagree.
With respect to standing, Recovery Racing analogizes this case to a civil
proceeding where a defendant who seeks to avoid a judgment by raising
the plaintiff’s standing as an affirmative defense bears the burden of
proving lack of standing by a preponderance of the evidence. Cong. Park
Office Condos II, LLC v. First-Citizens Bank & Trust Co., 105 So. 3d 602,
607 (Fla. 4th DCA 2013) (lack of standing is an affirmative defense which
must be raised by the defendant). As such, it maintains that the Proposed
Dealership and Maserati bore the burden of proving that Recovery Racing
lacked standing. We reject Recovery Racing’s argument because section
320.642(3)(b)2. provides that an existing dealer has standing to protest a
proposed dealership under the 25% Test if it “can establish that” it meets
the criteria. § 320.642(3)(b)2., Fla. Stat. (2014). This plain language
places the burden squarely on the existing dealer to show its standing. 1
See id.; see also Braman Cadillac, Inc., 584 So. 2d at 1050 (affirming
because the existing dealer “cannot meet [the standing] requirements” of
section 320.642(3)(b)”).
1 Indeed, in the administrative context, the burden is typically on the
petitioner/intervenor to establish it has standing at the outset. See AmeriSteel
Corp. v. Clark, 691 So. 2d 473, 477 (Fla. 1997); Accardi v. Dep’t of Envtl. Prot.,
824 So. 2d 992, 996 (Fla. 4th DCA 2002); see also Palm Beach Cty. Envtl. Coal.
v. Fla. Dep’t of Envtl. Prot., 14 So. 3d 1076, 1077-78 (Fla. 4th DCA 2009) (chapter
120 requires a petitioner to establish that it has standing in order to initiate an
administrative proceeding).
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Turning to the Department’s interpretation of the data points used to
calculate standing under the 25% Test, we first address its interpretation
of the term “registered household addresses.” The Department interpreted
the term to mean the addresses where the purchased vehicles are
registered with the Department. Recovery Racing argues that this was an
erroneous interpretation. We disagree, as any other interpretation would
ignore the implications of the word “registered” as used in the context of
Chapter 320.
When interpreting statutes, we are required to give effect “‘to every
word, phrase, sentence, and part of the statute if possible, and words in a
statute should not be construed as mere surplusage.’” Am. Home
Assurance Co. v. Plaza Materials Corp., 908 So. 2d 360, 366 (Fla. 2005)
(quoting Hechtman v. Nations Title Ins., 840 So. 2d 993, 996 (Fla. 2003)).
“Further, ‘a basic rule of statutory construction provides that the
Legislature does not intend to enact useless provisions, and courts should
avoid readings that would render part of a statute meaningless.’” Id.(quoting State v. Goode, 830 So. 2d 817, 824 (Fla. 2002)). “[R]elated
statutory provisions must be read together to achieve a consistent whole,
and . . . ‘[w]here possible, courts must give full effect to all statutory
provisions and construe related statutory provisions in harmony with one
another.’” Woodham v. Blue Cross & Blue Shield of Fla., Inc., 829 So. 2d
891, 898 (Fla. 2002) (citation omitted) (quoting Forsythe v. Longboat Key
Beach Erosion Control Dist., 604 So. 2d 452, 455 (Fla. 1992)).
Chapter 320, entitled “Motor Vehicle Licenses,” governs not only the
relationships between automotive manufacturers, distributors, and
dealers, but also governs the registration of motor vehicles within the state.
Indeed, Chapter 320 contains multiple sections discussing vehicle
registration procedures and requirements. See, e.g., §§ 320.02, 320.03,
320.031, 320.04, 320.05, 320.06, 320.0605, 320.071, 320.0715, Fla. Stat.
(2014). One such section requires that when registering a vehicle, the
applicant must provide “the street address of the owner’s permanent
residence or the address of his or her permanent place of business.”
320.02(2)(a). In light of these considerations, the term “registered home
addresses” clearly refers to the addresses where the vehicles are registered
with the Department. Interpreting the phrase any other way would ignore
the implications of section 320.642’s location within Chapter 320. See
Heart of Adoptions, Inc. v. J.A., 963 So. 2d 189, 200 (Fla. 2007)
(interpreting a term contained in a statute by reading the section “in pari
materia with related provisions” of the chapter in which it was located).
Accordingly, the Department did not err in its interpretation of the term
“registered household addresses” as used in section 320.642(3)(b)2.
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Our holding concerning the definition of the term “registered household
addresses” is dispositive to this case. As Mr. Farhat testified and the ALJ
noted, Recovery Racing cannot establish that it has standing under the
25% Test utilizing Mr. Stockton’s proposed definitions of “retail sales” and
“12-month period” so long as “registered household addresses” means the
addresses where the vehicles sold by Recovery Racing are registered with
the Department. Therefore, we affirm without addressing the merits of the
Department’s interpretation of the terms “retail sales” and “12-month
period.”
Affirmed.
LEVINE, J., and HANZMAN, MICHAEL A., Associate Judge, concur.
* * *
Not final until disposition of timely filed motion for rehearing.
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