MARCH 2017
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Information and Insight for Florida Used Car Dealers
What is FIADA? Representation, Education, Dedication. Get RED Page 4.
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Dealer Independent
MAILING ADDRESS 1840 Fiddler Court Tallahassee, FL 32308 TELEPHONE (850) 385-2712 (800) 237-0448 FAX (850) 385-3251 WEBSITE www.FIADA.com EXECUTIVE COMMITTEE Lisa Compagno President Scott Lanier, CMD Senior Vice President Jim Winterick, Sr. Chairman of the Board
Contents March 2017
For members of the Florida Independent Automobile Dealers Association
C O L U M N S & F E AT U R E S 4
President’s Message Lisa Compagno
6
Executive Director’s Message Lisette Mariner, CAE
8
In Memoriam: Bob Galloway Remembering a FIADA legend.
Brandi Noegel Regional Vice President
10
Back to Basics FIADA Dealer Training School Instructor Terry Myers brings some clarity on the topic of Dealer Fees.
FIADA STAFF Lisette Mariner, CAE Executive Director
12
Membership News
14
Keys to Insurance FIADA Preferred Provider Kevin O'Connor has an update on the current dealer bond situation in Florida.
26
A Look at Current Legal Issues Attorneys Tom Hudson and Nicole Munro recap recent federal and legal developments of interest to dealers.
30
Industry News
Christopher Leedom Secretary Brad Joel Treasurer Frank Fuzy Regional Vice President George Hickey Regional Vice President Steve Marbais, CMD Regional Vice President Dino Mercurio Regional Vice President
Terry Myers Educational Instructor Jason Berthiaume Education and Marketing Coordinator Amelia Tillman Membership Director Christy Taylor Editorial/Advertising
POSTMASTER:
Send address changes to
FIADA • 1840 Fiddler Court Tallahassee, FL 32308 (850) 385-2712 • Call/Text: (800) 237-0448 Fax (850) 385-3251 • www.FIADA.com The Independent Dealer is a publication of: Florida Independent Automobile Dealers Association, 1840 Fiddler Court, Tallahassee, FL 32308 The magazine is published every month in Tallahassee and distributed to Florida new, used, wholesale and lease/retail car dealers. Advertising rates are available upon request. The statements and opinions expressed herein are those of the individual authors and do not necessarily represent the views of Independent Dealer or the Association. Likewise, the appearance of advertisers, or their identification as members of FIADA, does not constitute an endorsement of the products or services featured.
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Heads Up! The 2017 Legislative Session has started! FIADA Dealer Alerts are the best way to notify you of upcoming legislative news that needs your attention. Look for these e-mail alerts in your inbox this legislative season. March 2017 — Independent Dealer — 3
FROM THE PRESIDENT
Get R.E.D.
BY LISA COMPAGNO, FIADA PRESIDENT
G
reetings to Members and Non-members alike! If you have received this issue of our Independent Dealer Magazine, it means that you are a licensed independent dealer in the State of Florida. You may or may not be an FIADA member. If you are a member, excellent! Thank you for supporting our association and our industry. If you are not a member, well that means you’ve already missed several previous publications of this magazine, but it also means you’re missing out on all the incredible benefits of FIADA membership! As one of our Board Members, Dennis Cook of Copart, likes to say, FIADA membership is R.E.D. It provides Representation, Education and Dedication. Representation: The FIADA represents the independent auto industry before the Florida Legislature in Tallahassee. Additionally, as an FIADA member you automatically become a member of the National Independent Automobile Dealer Association (NIADA). The NIADA represents the independent auto industry before Congress in Washington, D.C. Having a seat at these tables in Tallahassee and D.C. is critical to the survival of our industry. No one else is going to be a voice for our industry. We have to be our own voice. And, as I’m sure we’re all familiar with from our own businesses, “the squeaky wheel gets the grease.” The louder and stronger the voice, the more attention it gets. Some statistics from one of my earlier messages is worth repeating: “[t]here are over 4000 licensed independent dealers in Florida. With 821 FIADA members, that means we are the voice of only 20% of the licensed independent dealers in Florida. That is not good enough. We should be the voice of the majority of this group. So, we need your help. We need your help to grow our membership. We need your help so we can go to Tallahassee and D.C. and say to our legislators, ‘we are the voice of 2000 independent automobile dealers. These dealers represent 10,000 individuals and families throughout the State of Florida and this is what you need to do for us and our industry.’” If you are not a member, then you don’t have a voice. Education: The FIADA offers pre-licensing classes, continuing education classes and webinars on a variety of topics. As an FIADA member, the continuing education classes and webinars
4 — Independent Dealer — March 2017
are free. More importantly, however, the FIADA keeps its members up to date on developing areas of concern in the industry such as recall notice issues, bond/insurance issues, employment law issues, compliance issues, and legislative issues. For instance, this issue of the magazine includes an article by Kevin O’Connor of Dealers Insurance Services that discusses a major change in the bond industry in Florida. We are the exclusive source of information regarding these developing areas of concern in our industry. If you are not a member, then you are not in the know. Dedication: The FIADA is dedicated to your success. As a member, you receive over $8,000 in discounts! There are $1,000 in auction buy/sell fees at over 12 auctions in Florida, Georgia and Charleston and over $7,000 in discounts on floor plan fees, advertising, software, office supplies and other service including AFC, Autotrader, Carsforsale.com, and Carfax. These discounts are now available through our mobile app; but you need to be a member to have access. Additionally, the FIADA offers an unmatched network of over 100 vendors who specialize in auto industry needs and over 800 dealers Statewide who deal with issues like yours. This includes access to the decision makers for many of the vendors you deal with. For instance, our Board of Directors includes Ellen Westpfahl, the Assistant General Manager of Manheim, Orlando, Dennis Cook, the Regional Sales Manager for Copart and Jeff Zupec, the manager of Insurance Auto Auctions. The quality of networking and camaraderie offered through FIADA membership is not available anywhere else. Finally, FIADA membership includes access to our technical assistance hotline. This allows you to ask any question you may have, such as business, compliance, licensing, legal, or regulatory questions. The technical assistance line offers an entire industry of experts to handle any question you might have. If you are not a member, don’t “go it alone.” Join today and let the FIADA help add to your bottom line. Visit www.fiada.com under the “Membership” tab to get your application or flip to page 17. www.fiada.com
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EXECUTIVE DIREC TOR’S MESSAGE
But Wait, There's More! BY LISET TE MARINER, CAE, EXECUTIVE DIRECTOR
I
want to take just a minute and talk directly to the nonmembers who are reading this message. We send out these quarterly magazines to all Florida dealers for a few reasons. It gives you an update of what is happening in our industry around the state. It gives you a glimpse at the benefits, services, programs and opportunities that FIADA provides its members. It gives us a chance to build a relationship with you, and help emphasize that we need ALL licensed Florida dealers to get involved with their industry if we want to ensure the conditions are right for success. In her President's Message, Lisa Compagno makes a compelling case for what FIADA can do for you. Our "Get RED" cover promotes our mission even more, of offering members representation, education and dedication. I really can't say much more that has not already been said. What I can do, however, is add a little icing on the cake. An extra incentive that if you have been thinking about becoming an FIADA member, might help you decide to go ahead and send in that application. Membership in FIADA gives you a simultaneous membership in the NIADA, the national association for independent dealers. When you become a FIADA member you automatically become an NIADA member and receive all the benefits of membership that they offer as well. NIADA just announced details on an exciting new contest that is EXCLUSIVELY for new members, and I think you'll be excited about it. From now until May 15, all new members will be eligible to win some really great prizes sponsored by NIADA and NIADA endorsed Member Services partner firms. Four first place winners (one from each region) in this new member contest is going to win: • AutoZone $200 Yeti mug package • $100 discount on 2 months of CARFAX vehicle history reports 6 — Independent Dealer — March 2017
• • • • • •
2 complimentary co-branded CAR FOX marketing/PR resources 8 free inventory listings on eBay Motors ($450 value) Free access to Automated Income Check from Equifax for 1 month (up to a $225 value) Manheim complimentary buyers fee 2017 NIADA Convention & Expo complimentary registration Airfare to 2017 NIADA Convention & Expo
In addition to these 1st Place Winners, there will also be four 2nd place winners (one from each region) who will receive: • AutoZone $100 Yeti mug package • $100 discount on 2 months of CARFAX vehicle history reports • 1 complimentary co-branded CAR FOX marketing/PR resource • Manheim complimentary buyers fee • 2017 NIADA Convention & Expo complimentary registration So, if you've been thinking about joining FIADA, don't miss out on this chance to not only get the full benefits of membership but also win these fabulous prizes. You can find out more at our website www.FIADA.com or at the NIADA website at www.NIADA.com. We've also included an application for membership in this issue of the magazine on page 17. Don't wait. Join us today! Now, to all of our current FIADA members THANK YOU for your support. I hope you can attest to the top-notch benefits that are associated with membership. I don't want you to feel left out with this membership contest so from now until May 15, you can earn a $50 credit towards your dues with every new member you recruit. Can you imagine what would happen if EVERY licensed dealer was a FIADA member? What an impact that would have on our industry. Let's make it happen! www.fiada.com
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IN MEMORIAM
BOB GALLOWAY May the road rise up to meet you, May the wind be always at your back, May the sun shine warm upon your face The rains fall soft upon your fields And, until we meet again, may God Hold you in the palm of His hand.
B
ob Galloway was a pillar of the Florida Independent Automobile Dealers Association. His booming voice and boisterous personality led many curious dealers into membership and his personal mentorship ensured that several of them became leaders of the association. (Just ask Frank Fuzy or Dino Mercurio.) Bob's leadership as a FIADA President, an NIADA President, a National Quality Dealer and a tireless Membership Committee Chair pushed FIADA throughout the 1980s and 1990s to become one of the top independent dealers associations in the country and the national association to a much respected organization. Robert “Bob” Galloway, 84, was born and raised in LA (Lower Alabama). He passed away on February 15, 2017. Bob had an incredible faith, commitment to family, friends, and the community. Bob lived in the Cape Canaveral and Cocoa Beach area since 1959.
In 1959, Bob packed the car with his wife and 3 kids and moved to Cape Canaveral. He found employment at the Car Exchange (the Yellow “X”). It wasn’t long, 1962 at age 30, before Bob owned the Car Exchange. Bob’s reputation in the used car industry gained both state and national recognition and he earned every available award at the state and national levels for Used Car Dealers including: Quality Dealer of the Year and President for each of the respective organizations. Bob sold his dealership, at the corner of 520 and US1, to Mike Erdman Trucks.
Bob’s faith was unwavering as a member at Our Savior’s Catholic Church. Bob was active in the school and the church, and one of the silent deed’s Bob did in his life was giving the nuns free Some of Bob's best memories were from his cars to drive. He was involved in involvement with FIADA and NIADA, including numerous events, fund raisers and serving as President and winning the National Quality Dealer Award in 1980. the annual fair.
Bob’s father died when he was just 4 years old. Raised in the depression era, Bob had a hard childhood. He graduated high school, and served honorably in the Navy during the Korean war. On shore leave, he met his soulmate, Natalie a USS hostess. They were married and stayed together over 62 years. Bob was trained as an Electrician, and as he was stepping off his ship for the last time, he overheard a man saying his brother had just made over $500 in a week selling cars. Bob had heard his 8 — Independent Dealer — March 2017
true calling, and immediately moved to Akron, Ohio and started selling Cars.
In Cape Canaveral, Bob was the “voice” in the press box, coach and sponsor for numerous baseball and football teams over the years. Many of the children, without fathers, described him as “their dad.” He use to have a small sign in the outfield in CC, and if a player hit the ball over his sign, he would give them $20. As you can imagine, over the years, that 8-foot sign stretched across the outfield from left to right fields. www.fiada.com
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BACK TO BASICS
Solving the Dealer Fee Mystery BY TERRY MYERS
N
EVER PAY ANOTHER DEALER FEE AT XYZ AUTOS! DEALER FEE $99. DEALER FEE $199. DEALER FEE $899. What's up with this?
Do you charge a ‘Dealer Fee’? If you do, how much is it? Is there a set or maximum amount you are allowed to charge or must charge? Are there Federal and/or state laws applicable to the ‘Dealer Fee’? Are your required to charge a ‘Dealer Fee’? Each of these questions pop up constantly, from existing licensed dealers and those about to enter the business. How would you answer them? Here is what the statutes say:
501.976 Actionable, unfair, or deceptive acts or practices.—It is an unfair or deceptive act or practice, actionable under the Florida Deceptive and Unfair Trade Practices Act, for a dealer to: (18) Charge a customer for any predelivery service without having printed on all documents that include a line item for predelivery service the following disclosure: “This charge represents costs and profit to the dealer for items such as inspecting, cleaning, and adjusting vehicles, and preparing documents related to the sale.” Are you aware that there have been some legal challenges relevant to the amount the dealer charges? Would you be able to defend that the fee you charge truly represents what it costs on average, to support the sale of your vehicles? What do you think your customers believe the Dealer Fee actually represents?
GOT A TECHNICAL QUESTION AND NEED SOME ADVICE?
Use the R.E.D. Phone! FIADA is your number one source for advice and information. Technical questions, legal questions, regulatory questions...bring them on! Our network of industry veterans, professionals and consultants can help you find the answers you are looking for. Members can call or text us anytime at (800) 237-0448 or access our online resources 24/7 at www.FIADA.com. It pays to be a member!
REPRESENTATION | EDUCATION | DEDICATION—FIADA! 10 — Independent Dealer — March 2017
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What you charge for one, charge for all and charge the appropriate sales tax. Size does not matter. Does Florida say it is OK to negotiate the fee? Are you allowed to discriminate? Would not discrimination laws dictate the identical fee be listed on the final invoice? You may offset the fee by lowering the price of the vehicle or increasing the value of the trade, while still displaying the matching fee on the final invoice. It is not uncommon for different governing agencies to have conflicting rules. I am not an authorized representative of any governing authority. Like you, we are all just trying to do the best we can with what we know and/or think we know.
Trying to be ‘cute’ may work at home but it does not work in court. Remember, “What you know makes you money. What you don’t know costs you a fortune.” Articles are the opinion of the author and are not intended to be legal or accounting advice. The intent is to share thoughts and concepts that help the business owner(s) find new and perhaps revisit, ways to be as successful as they are capable of being. Terry can be reached at (727) 804-7375. Email: tmyers@floridaautodealerschool.com. Feedback is appreciated and encouraged. Terry LB Myers, author, lecturer, FIADA instructor, FADS owner/ instructor.
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Yes, it is important to know what your competitors are doing and charging, so that you may remain competitive. Just because they are doing something you might want to copy, that does not automatically make it OK for you to do it. Do your due diligence, before you commit.
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When challenged, It is not what we say or think that matters. It is what we can prove. The best advice is to check the relevant state and Federal statutes and run all this by a qualified attorney, before you incorporate this or any terminology to any invoice or contract, etc...
March 2017 — Independent Dealer — 11
MEMBERSHIP NEWS
New Members ADCOCK BROTHERS, INC. Panama City, FL Chris Young Sponsor: Independent Dealer Magazine ASDRUBAL AUTO SALE INC. Doral, FL Asdrubal Espinosa Sponsor: FIADA AUTO BANKS LLC DBA HOLMES MOTORS INC Pensacola, FL Jason Barq Johnson Sponsor: Amelia Tillman AUTO HAUS OF FORT MYERS Fort Myers, FL Tom Stanfield Sponsor: Amelia Tillman BYWAY MOTORS LLC Bradenton, FL Kourosh Attari Sponsor: Kevin Scott COASTAL AUTO RANCH INC Port St Lucie, FL Lori Kinney Sponsor: Kevin Scott
Rejoining Members
FEBRUARY 2017 COREMAN0324 Weeki Wachee, FL Carmine Castoria Sponsor: FIADA
JOHN PAUL MOTORS LLC. Sebring, FL John Paul Hensley Sponsor: FIADA.com
CRUISIN AUTOS LLC Largo, FL Takis Marangos Sponsor: FIADA
MOTOR CITY DELAND Deland, FL Latif Qadri Sponsor: FIADA
DIGITAL RECOGNITION NETWORK Fort Worth, TX Brent Sturman Sponsor: FIADA
PETE'S AUTOS Panama City, FL Pete Vitulli Sponsor: NIADA RAMSWOOD Ocoee, FL Prabhudyal Ramrattan Sponsor: Terry Myers
GET FINANCED Miami, FL Oscar Benedetti Sponsor: Amelia Tillman
SIXT RENT A CAR LLC Fort Lauderdale, FL Todd Sazera Sponsor: FIADA
INSURE-MY-GARAGE.COM Winter Springs, FL Derrick Vance Sponsor: FIADA
UNIFI AUTO SALES Orlando, FL Raynaldo Ligene Sponsor: Kevin Scott
IRONMAN MOTORS INC Crawfordville, FL Steve Cushman Sponsor: Tallahassee Auto Auction
Renewing Members
A & B AUTO SALES OF CHIPLEY INC Chipley, FL Samuel Bell Sponsor: FIADA BIG O'S NORTHSIDE AUTO SALES Interlachen, FL Lewin L. Otte Sponsor: Amelia Tillman
FEBRUARY 2017
METICULOUS MOTORS, INC. Pinellas Park, FL Peter Corbissero Sponsor: Amelia Tillman PALM BEACH AUTOMOTIVE SALES West Palm Beach, FL Leonid Gerstein Sponsor: Amelia Tillman
CAR COLLECTION OF TAMPA Tampa, FL Louis Llovio Sponsor: Amelia Tillman
PATRIOT AUTO SALES INC. Jacksonville, FL Harwood Dees Sponsor: John Cousins/Dealers Auto Auction
EMERALD COAST MOTOR CARS LLC Destin, FL Stan Hall Sponsor: Amelia Tillman
PRICELINE AUTOMOTIVE, LLC Tampa, FL Jason Stroppel/Diane Becker Sponsor: DMV
EUROSPEC, INC. Jacksonville, FL Luis Merchan Sponsor: FIADA.com
SNIDER'S TRUCK & AUTO SALES Mims, FL Joe Becker Sponsor: Amelia Tillman
FIRST FLORIDA MOTOR SPORTS, INC. Pompano Beach, FL Donald Payette Sponsor: Amelia Tillman
FEBRUARY 2017
20+ Year Members Auction Insurance Agency Bubba Hill Auto Plaza, Inc. Caicos Trading & Equipment Donny Mills Auto Sales, Inc. Economy Motors Larry Condon Auto Sales Mears Transportation Group Northwest Florida Auto Sales O'Donnell Automotive 10+ Year Members ADESA Ocala Auto Add-Ons, Inc. College Auto Sales of FL, LLC EJ's Quality Autosales Galeria Auto Mart, Inc. J.D. Byrider Southeast Fleet Auto Sales, Inc. Under 10 Year Members Advantage Funding America Choice RV ASI 3 LLC 12 — Independent Dealer — March 2017
Birmingham, AL Panama City, FL Miami, FL Largo, FL Live Oak, FL Stuart, FL Orlando, FL Ft Walton Beach, FL Orlando, FL Ocala, FL Tavares, FL Miami, FL Jacksonville, FL Apopka, FL Jacksonville, FL Clearwater, FL New Hyde Park, NY Ocala, FL Tampa, FL
Auto Sales Plaza Inc Auto Simplify LLC. Baseline Auto Sales, INC. Big Truck Rental LLC Brown's Auto Sales C & J Auto Collection Car Buying Service of Jacksonville Diamond II Auto Sales, Inc. Golden Eagle Management Services LLC Lane Mashburn Inc. dba Amelia Auto Mart Mikes Trucks & Cars Outdoor Recreation World, Inc. Palm Tree Auto Sales Pegasus Classic Cars LLC Penske Truck Leasing Co LLP Ponce Used Cars, Inc. Purvis, Gray and Company, LLP Spartan Financial Partners Strickland Auto Solutions Inc TCB Autos The Garage Inc United Auto USA Corp Wheel City Auto Finance Centers
West Palm Beach, FL Davie, FL Ocala, FL Tampa, FL Leesburg, FL Crestview, FL Jacksonville, FL Orlando, FL Land O Lakes, FL Fernandina Beach, FL Port Orange, FL Panama City, FL Stuart, FL West Palm Beach, FL Reading, PA Fort Myers, FL Gainesville, FL Spartanburg, SC Chiefland, FL Gainesville, FL Doral, FL Doral, FL Sioux Falls, SD www.fiada.com
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March 2017 — Independent Dealer — 13
KEYS TO INSURANCE KEYS TO INSURANCE
Is There a Bond Storm Insurance Predictions for on the Horizon? the New Year BY KEVIN O'CONNOR, DEALERS INSURANCE SER VICES BY KEVIN O’CONNOR, INSURANCE AGENT OF RECORD
II
While conditions are currently calm, the Dealer Bond forecast in Florida has the potential to worsen quickly. Be prepared by understanding the factors.
’ve written a couple articles over “cover” the dealer. The intent is to happen if other carriers decide to the years about the Motor Vehicle cover the dealer’s customers. It simply throw in the towel? am excited to announce the resurrection of “Keys to it difficult to find policies on dealers that never had an Dealer Surety Bond—"what it does guarantees to the state of Florida that Insurance,” a column I wrote for many years in this issue in past years. These changes caused a number of and why you need it” sort of stuff. a dealer can provide up to $25,000 in THE BOND magazine throughout the 1990s and up until 2005. The insurance companies to withdraw from the Florida market This one is a little different. damages to any parties they harmed. bond is simply a financial guaranty. column touched on the subjects relating toAthe insurance or limit what they offer causing a supply and demand issue states that the dealer: needs of the non-franchised motor vehicleItdealer. which subsequently raised rates. On the positive side, the By now, the word is out that the If the dealer refuses, or is unable to insurance industry has record surplus capital thanks in largest writer of Independent settle the dispute and the bond is 1. “shall comply with the conditions Starting this month, we will be doing a quarterly edition large part to lower than expected catastrophe losses over Automobile Dealer Surety Bonds forced to pay, the dealer principal written contract made by of the column. We plan to discuss subjects suchofasany risk the last few years and increased investments yields. Most in the state has decided to exit the will be held personally liable for the such dealer with management ideas to help reduce your insurance costs andin connection of the insurance industry analysts expect the trend of market. I thought it may be a good amount of the claim. the sale or exchange of any motor eliminate unnecessary claims, changes in insurance market increasing rates to slow or even reverse in the near future. time to explain why this may have vehicles”new and… conditions, trends in pricing and coverage availability, Unfortunately there are no crystal balls to tell us what to happened and discuss how we can WHAT’S SUPPOSED TO HAPPEN 2. “shall not violate any of the products available to the dealer industry and more. expect in 2014. All we can do is keep a close eye on the possibly keep it from happening again When issuing bonds, sureties make provisions of Chapter 319 and industry and do our best to keep the readers of this column in the future. two key assumptions: 320, Florida Statutes, in the This past year was a challenging year in our business, ahead of the curve. conduct of the business for which especially here in Florida. A new “wind modeling” system Fortunately, that carrier’s decision 1. "that the aggregate liability of he way is licensed” was implemented which completely changed the On a personal note, I wanted to thank the FIADA Board hasn’t made as big an impact as I had the surety hereunder shall in no carriers look at certain areas. This new system of Directors for the vote of confidence in electing us their originally thought it might. At the event, in any one (1) year, exceed It goes on to say that in the event identified that non-coastal areas had Agent of Record. Our team of insurance professionals time I write this, it appears that there the sum of the bond”. In other “any person in a retail or wholesale more hurricane exposure than was specialize in your industry and make it our job to know are still enough other carriers in the words, the loss is to be capped at transaction who shall suffer any loss previously believed and pricing how your business works and understand what your marketplace to “pick up the pieces.” $25,000, including any award for as arevised result of any violation of the of policies were dealership needs to best protect your assets. We are However, there is no guarantee that attorney’s fees. conditions hereinabove contained, ” accordingly. The available for questions from any association member a crisis is not looming around the 2. That claims will be based on the theclaims surety from company will make that whether they are clients or not and we will do our best to corner. breach of a written contract and individual the $25,000 2012’swhole, up to answer those questions in a completely impartial manner. not fraud or negligence claims. penal Hurricane sum on the bond. Supply and demand is a funny Sandy had We hope that Keys to Insurance is an informative and thing. Bonds are much more of a The Florida Supreme Court stated WHAT’S WRONG a devastating interesting column and proves GONE to the readers that insurance commodity than insurance. All 12,000 the legislative intent when enacting The big issue at hand is that the effect on the Dealers can be fun. bonds issued in Florida all look, feel theLot statute was to “provide a very statute simply does not specifically Open insurance and smell the same. Price is primarily modest fund of $25,000 from which address attorney’s fees. marketplace. As a decided by supply and demand. Like I consumers could recover damages result, the insurance Kevin O’Connor of Dealers Insurance Services, Inc. is the said…a commodity. whenare carnow dealers went out of business Though plaintiff ’s attorneys had carriers FIADA Insurance Agent of Record. If you have insurance and defaulted in their obligations. ” claimed theyatwere to or visit looking more closely at flood related questions, contact FIADA (800)entitled 237-0448 Since there are still a large number attorney’s fees since at least exposure than ever before making the DIS website at www.dealersinsurance.com. 2000, a of bond carriers in Florida, demand case in 2010, Snow v. Rathman, made PERSONAL INDEMNIFICATION is not an issue hence pricing hasn’t it clear that sureties are liable for fees It’s important to point out that the really changed much. But— what could www.fiada.com 10 — Independent Dealer January 2014 bond is not insurance and doesn’t under section 627.428. Chapter 627 14 — Independent Dealer — March 2017
FIADA Jan 2k14.indd 10
www.fiada.com 1/10/2014 11:03:59 AM
is a Chapter relating to Insurance, NOT Dealer Licensing. In some circumstances attorneys have been successfully going after fees on these bonds not only up to the $25,000 bond limit, but well in excess of that limit. Normally these attorneys fees are in relation to minor claims made by a vehicle purchaser.
WHY SHOULD YOU CARE?
Personal indemnification. In the event your dealership gets caught up in one of these cases and the plaintiff and their attorney prevail, the dealership principal is personally liable for not only the amount of the damages, but also for the legal fees. These fees can be thousands of dollars and in many cases have been in excess of $100,000. To make matters even worse, when the dealer informs the surety company that they are unable to meet the obligation, the surety simply
cancels the bond. Until the dealer meets the obligation owed to the surety company, no bond company will offer them a replacement bond - thus putting the dealer out of business. Imagine being out of business and having a six figure personal judgement against you. You should definitely care.
POSSIBLE SIGNS OF SANITY?
A case was filed in 2011 that was the Continued on Page 16.
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The Snow v Rathman ruling in the 5th District Court of Appeals held that attorney’s fees are in fact recoverable against the dealer bond surety company and, until the Florida Supreme Court rules otherwise, this is considered the “law of the land”. Sureties can still argue their liability is capped at the $25,000 penal sum based on the Dealer’s Licensing Statutes. However, there is not yet an appellate case squarely addressing this issue in the context of motor vehicle bonds so this issue is decided by the trial judges on a case by case basis.
In the event your dealership gets caught up in one of these cases and the plaintiff and their attorney prevail, the dealership principal is personally liable for not only the amount of the damages, but also for the legal fees.
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March 2017 — Independent Dealer — 15
KEYS TO INSURANCE continued from Page 15.
“poster child” for this abuse. Hakes v Orlando Auto Specialists was a suit alleging a $13,000 claim of damages. The plaintiff attorney sought an award of almost $190,000 in attorneys fees! Fortunately, the trial court said enough is enough and rejected the request stating “Sureties are not cash cows to be milked by attorneys”. The plaintiff attorney in the Hakes case appealed the trial court’s decision to the 5th District Court of Appeals. The appellate court upheld the trial court’s decision however unfortunately did so Per Curiam Affirmed. This generally means that the appellate court
affirmed the lower court’s decision but the issues involved in the appeal were not deemed significant enough to warrant writing a full opinion. While this was definitely a win for the motor vehicle dealers, it doesn’t provide enough teeth to eliminate the problem in the future.
CONCLUSION
Since there are a number of conflicting trial court opinions on the subject, the problem will never resolve itself until the statute is rewritten clearly defining what an attorney can charge in these cases.
that surety companies will continue to exit the marketplace and dealers will continue to be forced out of business with financial burdens they can never rectify. Now let’s talk about the suggestions out there to raise the bond to a higher limit… on second thought, let’s just fight one battle at a time. Kevin O'Connor (Dealers Insurance Services) is a FIADA Preferred Insurance Provider. Contact him at (941) 981.5160 or online at www.dealersinsurance.com.
Until that happens, it’s our opinion
FIADA's app has been revamped and is ready to go. Download it now at your mobile app store. With the new app, you'll have all your FIADA benefits right in your back pocket:
upcoming events The entire Association calendar is synced with the app and you can register to attend with a simple tap.
coupons Access your FIADA Member Coupons from the auction lane if you want. No paper needed! The app keeps track of coupons that have been redeemed.
social Connect with FIADA via Facebook, twitter or YouTube and get updates of social interaction.
additional features Get mobile-ready features of www.FIADA.com from our new app, including photos, videos and other resources. 16 — Independent Dealer — March 2017
SINCE 1940
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Protect. Promote. Preserve. SINCE 1940
Florida Independent Automobile Dealers Association
“
Why Join FIADA? representation A lobbyist and legislative committee that fights for you and the industry’s interests.
EDUCATION FREE continuing education and free unlimited technical assistance calls with FIADA legal counsel.
The number of benefits you receive as a member pays for the price of your membership. For $325 you can’t afford not to be a member.
It costs less than $1.00 per day to get connected.
dedication Access 100+ vendors who specialize in auto industry needs and over 800 dealers Statewide who handle issues like yours.
”
savings
Lisa Compagno,
FIADA member discounts at over 15 auctions in Florida, Georgia and Charleston. A savings of over $2,000.
FIADA President Palm Tree Auto Sales, Stuart, FL
discounts Exclusive savings on advertising opportunities, DMS, financing, floorplanning, GPS and other dealer services. Licensed dealers receive complimentary membership and additional benefits with NIADA.
DUES: $325 Annually
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Company Name:________________________________________________________
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Address:___________________________________ City:__________________________ State:_________ Zip:________ Phone:________________________________Fax:__________________________ Email:_________________________ By signing I agree to the FIADA
code of ethics and FCC Consent. Principal Contact:__________________________________ Signature:________________________________________
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Card Number:_________________________________________________ Expiration Date:____________CVV:_________ I authorize FIADA to charge my credit card listed above. Name on Card:_____________________________________________________________________________________
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FCC Communications Consent: I understand that by providing my mailing address, email address, telephone number and fax number, I consent to receive valuable and timely communications via mail, parcel, email, telephone, text and/or fax from or on behalf of the Florida Independent Automobile Dealers Association (FIADA). This consent shall remain in effect until FIADA receives written revocation signed by an authorized representative. 800.237.0448 | Fax: 850-385-3251 | Email: info@fiada.com | www.FIADA.com | Florida Independent Automobile DealersMarch Association, Fiddler Court, Tallahassee, FL 32308 20171840 — Independent Dealer — 17 www.fiada.com
SUPPORT THE FIADA PAC Your PAC Contribution helps spread awareness and gain support of issues affecting independent dealers in the state’s capitol. There’s still time to get your contribution in before the session starts if you make it today.
CONTRIBUTION INFORMATION Contributor’s Name:_________________________________________________________________________ Dealership/Company:________________________________________________________________________ Street Address, City, State, Zip:____________________________________________________________________
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Make your check payable to FIADA-PAC and mail to: FIADA • 1840 Fiddler Court • Tallahassee, FL 32308 If making payment via credit card, you may fax your contribution form to 850.385.3251
18 — Independent Dealer — March 2017
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20 — Independent Dealer — March 2017
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CONTINUING EDUCATION TRADE SHOW AWARDS BANQUET
Find out more at www.FIADA.com 22 — Independent Dealer — March 2017
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March 2017 — Independent Dealer — 23
TOWN HALL Join us for a day of learning and networking where you will have the opportunity to ask industry experts important questions as well as get up-to-date on the latest legal issues facing auto dealers.
FRIDAY
Grand Hyatt Tampa Bay 2900 Bayport Dr Tampa, Florida 33607
10:00 AM - 2:30 PM
Room rate is $139/night. Make a reservation by calling (888) 421-1442. Be sure to mention you are with the FIADA group. The deadline to reserve a room in the FIADA block is Tuesday, June 27, 2017.
july 28, 2017
register online at www.fiada.com/events Town Hall meetings are FREE for all dealers to attend. Attendees enjoy a complimentary lunch made possible by event sponsors Auto Data Direct, Inc. and Wayne Reaves Software.
come for the town hall and stay for the fiada board of directors meeting Here’s your chance to help your industry. Attend the FIADA Board of Directors meeting and offer your input and insight. All members are encouraged to join the conversation on July 29, 2017. Details available at FIADA.com 24 — Independent Dealer — March 2017
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March 2017 — Independent Dealer — 25
LEGAL ROUND-UP
A Look At Current Legal Issues BY THOMAS B. HUDSON AND NICOLE FRUSH MUNRO, HUDSON COOK, LLC
A monthly collection of selected legislative and regulatory highlights, and a recap of some of the many auto sale and financing lawsuits followed each month. COMPLIANCE TIP Your dealership is probably a corporation or a partnership. If so, and the dealership is sued by a consumer or a regulator, it’s likely that your adversary in the litigation will want to poke around your corporate records looking for ways to make or bolster its case. When that happens, what will the minutes of your board of directors or partnership meetings reveal? Will they show regular meetings, with reports by your compliance, red flags, and privacy officer(s), reports on customer complaints, root cause analysis, and the resolution of those complaints, an update of applicable laws and regulations affecting your operation, the effectiveness of your training program, and similar sorts of things? If not, maybe you ought to meet with your attorney and discuss the topics and operational issues that should be reflected in those minutes. FEDERAL DEVELOPMENTS The FTC and Selling Recalled Vehicles. On December 16, the FTC announced that CarMax, Inc., Asbury Automotive Group, Inc., and West-Herr Automotive Group, Inc. settled allegations that the dealerships advertised rigorous used car inspections, but failed to adequately disclose that some cars were subject to unrepaired safety recalls. The proposed consent orders prohibit the dealerships from claiming their used vehicles are safe, have been repaired for safety issues, or have been subject 26 — Independent Dealer — March 2017
to safety-related inspections, unless the vehicles are free of open recalls or the companies clearly and conspicuously disclose that the vehicles may be subject to unrepaired recalls for safety issues and explain how consumers can determine whether a vehicle is subject to such a recall that has not been repaired. The FTC also approved final consent orders in similar cases, settled earlier this year, against General Motors Company, Jim Koons Management Company, and Lithia Motors, Inc. Curbing Debt Collectors. Buy-here, pay-here dealers need to keep a careful eye on the CFPB’s actions involving debt collectors. On January 9, the CFPB announced a consent order with two Oklahoma-based law firms, resolving allegations under the Fair Debt Collection Practices Act that the law firms' debt collection letters and phone calls misrepresented that attorneys had reviewed consumers' accounts before initiating collection efforts. The CFPB also alleged that the law firms improperly notarized affidavits in collection lawsuits against consumers and furnished information to credit reporting agencies without written policies or procedures to ensure the information’s accuracy and integrity, in violation of the Fair Credit Reporting Act. The order requires the law firms to refund $577,135 to consumers harmed by the allegedly illegal debt collection actions and to pay a civil money penalty of $78,800.
House Republicans Hammer CFPB on Discrimination Actions – Again. On January 18, the Republican staff of the House of Representatives' Committee on Financial Services released a report titled "Unsafe at Any Bureaucracy, Part III: The CFPB's Vitiated Legal Case Against Auto Lenders." This is the third staff report released by committee Republicans over the last 14 months about the CFPB's efforts to regulate auto financing and the CFPB’s Equal Credit Opportunity Act enforcement actions against indirect auto financers. This report makes public additional CFPB documents that discuss the CFPB's disparate impact methodology in more detail and that reveal potential legal problems with the CFPB’s 2015 rule authorizing it to supervise the larger participants of the auto finance market. The report also discusses whether the CFPB’s use of the disparate impact theory in enforcement actions against auto financers would survive judicial scrutiny. CASE OF THE MONTH Sale of Extended Warranty that Did Not Cover Consumer's Vehicle Deemed Unfair or Deceptive Trade Practice: A consumer bought a used truck from a dealership. The truck’s odometer read 157,000 miles. The dealership sold the buyer a 3-month/3,000-mile "deluxe extended warranty." After Continued on Page 28. www.fiada.com
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March 2017 — Independent Dealer — 27
LEGAL ROUND-UP continued from Page 26.
the truck broke down twice within the first month, the buyer replaced the engine and transmission at a cost of $6,000. The warranty only covered half of that expense because the mileage on the truck exceeded the 125,000-mile limit for the full, deluxe extended coverage. The buyer sued the dealership, claiming that it knew that the warranty would not provide full coverage when it sold the warranty. The trial court ruled for the buyer, and the Court of Appeals of Ohio affirmed. The appellate court explained that the dealership engaged in an unfair or deceptive trade practice when it sold the warranty to the buyer because he paid for a warranty that he did not get. The invoice showed that the repair shop charged the buyer for parts that the warranty supposedly covered. The sales contract, warranty, and invoice together were enough to convince the court that the buyer did not get the benefit of the warranty. As a result, the court concluded that the dealership made a false representation when it told the buyer that the "deluxe extended warranty" covered the truck. Note that “extended warranty” is the term used in the court’s decision – the product sold was most likely a vehicle service contract or similar product. See Greenwood v. Quality Motor Cars by Butch Miller, 2016 Ohio App. LEXIS 5027 (Ohio App. December 15, 2016). Tom (thudson@hudco.com) and Nikki (nmunro@hudco.com) are partners in the law firm of Hudson Cook, LLP. For information, visit www. counselorlibrary.com. Copyright CounselorLibrary.com 2017, all rights reserved. Single publication rights only, to the Association. (2/16). HC# 4848-8454-3277. 28 — Independent Dealer — March 2017
Do you have an interesting hobby? A secret talent no one knows about? Received a special accomplishment? Our dealers are more than just their dealerships. We want to know more about what you do when you leave the lot. Send us a photo and tell us about it. You can email your submission to us at info@fiada.com or post it on our social media pages. You could be featured in the next magazine!
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March 2017 — Independent Dealer — 29
INDUSTRY NEWS Manheim Orlando Earns Chamber Honor Manheim Orlando was named Big Business of the Year by the Orlando Chamber of Commerce at the organization’s “Big Orange Awards.” Manheim Orlando is one of the largest operating locations of Manheim North America. Throughout the past year, Manheim Orlando has supported Christmas in July, Arnold Palmer Children’s Hospital, the Epilepsy Association of Central Florida, Orlando Science Center, Christian Service Center, the YMCA and the Pet Alliance of Greater Orlando. In addition, Manheim Orlando hosted Chamber members through Leadership West Orange. Calif. The team was also recognized for hosting the Chamber’s Hob Nob and Straw Poll event, which boasted record attendance, by political candidates and interested voters. Manheim Orlando partnered with Ben’s Maintenance, Mike’s Security and Danny’s Outside Ops to make the event an all-around success.
Updates to the Volkswagen/ Audi/Porsche 3.0-Liter Diesel Emissions Settlements
Volkswagen, Audi, and Porsche have submitted proposed Settlements to resolve legal claims regarding emissions systems of vehicles that have a 3.0-liter TDI Diesel engine, including claims on behalf of certain NonVolkswagen/Audi/Porsche dealers and other companies (with fleets) that own or owned such vehicles. The Court has granted preliminary approval of the proposed Class Action Settlement for affected 3.0-liter diesel vehicles in the United States. View the detailed notice at: https://www. vwcourtsettlement.com/en/docs/3Liter/Notices/VW%20 3L%20Settlement%20Notice.pdf. For additional information, visit the official Settlements website at www. VWCourtSettlement.com. The website has been updated with additional FAQs and functionality that will allow you to determine if you may be eligible for benefits under the proposed Settlements. The website will also allow you to take steps to determine what options may be available, if the Settlements receive final Court approval.
Congratulations Grand Prize Winner: Rikers Auto Financial
FIADA member Rikers Auto Financial in Kissimmee, FL was chosen as a Grand Prize Winner in the AutoZoneNIADA member benefit program sweepstakes. The prize includes a trip to Memphis in April, compliments of AutoZone.
Don’t forget to Like us on Facebook! www.facebook.com/FLIndAutoDealersAssoc 30 — Independent Dealer — March 2017
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2016-2017 FIADA EXECUTIVE COMMITTEE:
LISA COMPAGNO President Palm Tree Auto Sales Stuart, FL (772) 288-2099
JIM WINTERICK, SR. Chairman of the Board Gulfstream Motor Credit Miami, FL (305) 253-2335
STEVE MARBAIS, CMD GEORGE HICKEY Regional Vice President Regional Vice President Bond Auto Sales, Inc. Marbais Enterprises, Inc. Ocoee, FL Tampa, FL 33604 (407) 877-7422 (813) 238-7478
CHRISTOPHER LEEDOM BRAD JOEL Secretary Treasurer AutoMaxx Splish Splash Auto Sales Sarasota, FL Princeton, FL 33032 (941) 309-1111 (305) 258-1191
BRANDI NOEGEL DINO MERCURIO Regional Vice President Regional Vice President Noegel’s Auto Sales Independent Credit, Inc. Starke, FL West Palm Beach, FL (904) 964-6461 (561) 686-8673
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FRANK FUZY Regional Vice President Century Motors of S. Fla., Inc. Pompano Beach, FL 33064 (954) 785-0369
SCOTT LANIER, CMD Senior Vice President Credit Cars Orlando, FL 32808 (407) 295-6211
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March 2017 — Independent Dealer — 31
MANHEIM FLORIDA ALWAYS NEARBY.
Manheim Daytona Beach 1305 Indian Lake Road Daytona Beach, FL 32124 386.255.2500 Sale: Wed 3 PM Total Resource Auction every Wed 2:30 PM Manheim Fort Lauderdale 5353 S State Road 7 Davie, FL 33314 954.791.3520 Sale: Fri 9 AM Total Resource Auction Tue 9 AM Ford Open Sale every other Fri Manheim Fort Myers 2100 Rockfill Rd Fort Myers, FL 33916 239.476.9800 Sale: Wed 4 PM Total Resource Auction every other Wed 3 PM Specialty Sale last Wed monthly 2 PM Galloway Direct Off Site Sale 2nd & 4th Tues 12 PM Manheim Jacksonville 10817 New Kings Rd Jacksonville, FL 32219 904.768.9981 Sale: Thurs 1 PM Total Resource Auction every Thurs 12:40 PM Manheim Lakeland 8025 N State Road 33 Lakeland, FL 33809 863.984.1551 Sale: Wed 2 PM Specialty RV/Boat Sale 1st Wed monthly 9 AM
32 — Independent Dealer — March 2017
Manheim Orlando 11801 W Colonial Dr Ocoee, FL 34761 Sale: Tues 9 AM Highline Exotic Sale Kicks off every 4th Tues 11 AM with Mercedes & BMW Chrysler Closed Factory Sale bi-weekly on Mon 12:30 PM GM Closed Sales bi-weekly on Mon 1 PM Nissan Infiniti Closed Sale 1st Wed monthly 9 AM Manheim Palm Beach 600 Sansbury Way West Palm Beach, FL 33411 561.790.1200 Sale: Thursday 9 AM Exotic Highline Sale every 4th Wed 9:30 AM Manheim St Pete 14950 Roosevelt Blvd Clearwater, FL 33762 727.531.7717 Sale: Thurs Weekly 2:30 PM inops Regular Sale 3 PM Manheim Tampa 401 S 50th St Tampa, FL 33619 813.247.1666 Sale: Thursday 9 AM Total Resource Auction Mon 9:30 AM at Cone Road location Ford Factory Sale every other Wed 10 AM Manheim Caribbean 1050 Carretera 865 KM 4.7 Bo. Candelaria Toa Baja, PR 00949 787.261.7300 Sale: Thurs 12 PM Salvage Sale Thurs 11 AM
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Manheim Central Florida 9800 Bachman Rd Orlando, FL 32824 407.438.1000 Sale: Wed 9 AM Total Resource Auction Wed 8:30 AM “Manheim Imperial Nights” Sale Tues 4 PM Specialty Heavy Truck & Equipment Sale Second Thurs Monthly at 10 AM
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