Brand New Florida DHSMV Administrative Complaints alleging Untimely or Incomplete Titling Submissions using the Electronic Filing System (EFS)
By: Micah A. Andrews
Over the last ten years many Florida dealers have received Administrative Complaints from the Florida Department of Highway Safety and Motor Vehicles (“DHSMV”) alleging untimely submission of titling paperwork for a motor vehicle transaction and seeking a civil fine in the amount of $1,000 per violation. In the past these complaints were sent when the DHSMV received titling applications and realized based upon the Date of Sale on the paperwork that the submission was made over 30 days after the delivery date and therefore potentially violative of Florida Statute § 320.23(6)(a) and (b).
In the last few months, the DHSMV has begun serving on dealers a brand-new Administrative Complaint that reveals a new approach the Department is taking to, presumably, attempt to curb the late submission of titling paper. These complaints assert violations based on the dealership’s alleged unfinished submission of titling applications using the Department’s Electronic Filing System (EFS) and seeking $1,000 fines per violation.
Under Fla. Stat. § 320.03(10), licensed dealers are authorized to perform Tax Collector and Division of Motorist Services transactions related to motor vehicle title and registrations issuance through the EFS system. Many dealers use Certified Service Providers in lieu of completing the work themselves (ex. CVR, AutoData, Title Technologies). Instead of waiting to receive untimely applications for certificate of title, the DHSMV appears to be taking a more proactive approach and is now serving complaints based on initiated but incomplete title transactions that are still “pending” within the EFS system. The Department has asserted that these unfinished EFS transactions on their system represent untimely titling submissions in violation of Fla. Stat. § 320.23(6)(a) as well as a Florida Administrative Code, Rule 15C-16.013(2)(g), which prohibits “failure [by dealers] to correct errors or clear pending transactions as required by the Department.”
It is still unclear what steps the Department takes to confirm that “pending” EFS submissions were not simply transactions that fell through or were cancelled. While a few instances of unfinished EFS applications may seem fairly innocuous, failure of a dealer to comply with these requirements could carry significant consequences, including, revocation of a dealer’s license and large monetary fines. Section 320.27(9)(b)(6), Florida Statutes, allows the DHSMV to deny, suspend, or revoke any motor vehicle dealer’s license upon proof that a dealer has committed, with sufficient frequency so as to establish a pattern of wrongdoing, violations to include failure to apply for transfer of a title. The DHSMV is further authorized to impose and collect fines up to $1,000 per violation against any licensee if it is found to have violated Fla. Stat. § 320.23(6).
Given this new effort by the DHSMV, it is important that dealers double-check that their EFS submissions are timely finalized and that cancelled transactions are formally withdrawn. If dealership has multiple “pending” submissions in excess of 30 days that are not resolved, there is now a potential they’ll receive an Administrative Complaint asserting titling violations and levying fines. If a dealer does receive an Administrative Complaint, it is imperative that a dealer immediately contact their dealer attorney. Failure by a dealer to respond and/or file a protest within 21 days of receiving the Administrative Complaint waives its right to dispute the factual claims of the Complaint. In effect, failure to respond allows the DHSMV to then issue a penalty of its own choosing against the dealer and strips the dealer of any right to dispute or appeal the decision. These penalties could be as high as a fine of $1,000 for each alleged titling violation, temporary suspension of the dealer’s license, or, at worst, the revocation of a dealer’s license. However, if a response is timely made efforts can be made to request withdrawal of the fine (or a lowering of the fine amount) if it can be shown that the dealership did in fact act diligently.
Any questions regarding these compliance obligations or strategy for responding to an administrative action should be directed to your dealer attorney.