STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

SIX L'S PACKING COMPANY, INC., )

)

Petitioner, )

)

vs. ) CASE NO. 80-2281A

) MORRIS OKUN, INC. and AETNA ) CASUALTY AND SURETY COMPANY, )

)

Respondents. )

)

RECOMMENDED ORDER

Pursuant to notice a hearing was held in Hollywood, Florida on February 2, 1981 before the Division of Administrative Hearings and its duly designated Hearing Officer, R. T. Carpenter. The parties were represented by:

APPEARANCES

For Petitioner: Mary Cheryl Matheis, Esquire

1627 K Street, Northwest Washington, D. C. 20006

For Respondent: Arthur Slavin, Esquire Morris Okun, Inc. 270 Madison Avenue

New York, New York 10016

No appearance for Respondent, Aetna Casualty and Surety Company.

This matter arose on the complaint of Six L's Packing Company, Inc. (Six L's) filed with the State of Florida, Department of Agriculture and Consumer Services, under the provisions of Sections 604.15 through 604.30, Florida Statutes. The complaint alleges that Respondent, Morris Okun, Inc. (Okun), or alternatively, its surety Aetna Casualty and Surety Company, is obligated to Petitioner in the amount of $10,198.50 for tomatoes sold by Petitioner on March 25, 1980.

Respondent Okun contends that the tomatoes failed to meet grade and merchantability standards resulting in offsetting damages of $5,062. As a separate counterclaim, Okun alleges it purchased a second load of tomatoes which Petitioner failed to deliver, resulting in damages of $4,662 to Okun.

FINDINGS OF FACT

1. On March 25, 1980, Willard Sutliff, broker for Okun and Charles Weisinger, salesman for Six L's, met at the Six L's packing facility in Immokalee. On that date, Sutliff inspected, purchased and took delivery of a load of tomatoes for an agreed price of $10,198.50.

2. The tomatoes were shipped the same day by transport arranged by Sutliff, and arrived in New York at the Okun facility on March 28, 1980. They were immediately inspected by a United States Department of Agriculture (U.S.D.A.) representative and found to be "Now approximately 60 percent U.S. No.

   1 quality, 9 percent soft, 5 percent decay."

   
   

3. Following harvesting, sorting and packing, tomatoes are taken to the Six L's "gas room" where they are normally held for a period of 48 to 60 hours prior to shipment. During this period the tomatoes continue to ripen. The tomatoes at issue here had been placed in the gas room on March 19 and were well past the optimum shipping point at the time of sale on March 25.

   
   

4. These tomatoes were initially inspected by a U.S.D.A. representative on March 19 at the Six L's facility and were assigned a U.S. combination grade. This grade indicates the tomatoes are a combination of U.S. No. 1 and U.S. No. 2 grade, but are at least 60 percent U.S. No. 1.

   
   

5. Sutliff was aware of the March 19 U.S.D.A, report, but contends he purchased the load with the understanding from Weisinger that the tomatoes would grade at least 75 percent U.S. No. 1, and his broker's memorandum so indicates. Weisinger denies such representation. The Six L's office manager received his copy of the broker's memorandum on April 3 and regarded the 75 percent U.S. 1 entry as a minor error not requiring repudiation since the tomatoes had already been delivered.

   
   

6. Sutliff was accorded ample opportunity to inspect the tomatoes prior to purchase. Although the tomatoes were in crates on pallets which limited his access, Sutliff did observe the color of the tomatoes and also determined that they were "second picking" rather than "crown picking". Had he elected to do so, Sutliff could have required the crates to be opened or requested a further

   U.S.D.A. inspection.

   
   

7. Sutliff purchased the load at a price somewhat lower than market for high grade tomatoes. Weisinger contends he "discounted" the price due to their ripeness while Sutliff contends he paid the lower price because the tomatoes were second picking and were not represented to be 85 percent U.S. No. 1 which would have justified a higher price. The price was arrived at through negotiation and, obviously, all relevant factors including the ripened condition of this highly perishable commodity were taken into account by the parties.

   
   

8. The tomatoes were acknowledged to be in good condition by the trucker when he accepted them for loading on March 25th. The temperature records and the three days for transit to New York indicate reasonable shipping conditions. Thus, the deterioration was not due to mishandling, but primarily to the age of the tomatoes when they arrived in New York on March 28th.

   
   

9. Okun did not attempt to reject this shipment upon delivery in New York, nor did it furnish any written notice of a price dispute. Okun did, however, furnish Six L's a copy of the March 28 U.S.D.A. inspection report.

   
   

10. The parties became involved in a separate dispute in late March when Sutliff claims he purchased a second load of tomatoes from Weisinger which he intended to leave in the gas room for further ripening. When he attempted to take delivery, Petitioner refused claiming no promise of sale or contract had been made. Sutliff's diary and broker's memorandum indicate the purchase was made. However, no signed agreement was produced and Six L's denied the purported sale by telegrams on March 26 and March 31, 1980.

11. Further testimony surrounding the two disputes was given by both parties regarding their face to face end telephone conversations. Their recollections of these conversations were self-serving and conflicting, and are thus assigned no evidentiary weight.

    
    

    CONCLUSIONS OF LAW

    
    

12. Sections 604.19 and 604.20, Florida Statutes (1979) require a dealer in agricultural products to be licensed and to post surety bond. Section 604.20(1) provides in part:

    
    

    "Such bond . . . shall be conditioned to secure the faithful accounting for and payment to producers . . . of the proceeds of all agricultural products handled or purchased by such dealer."

    
    

13. Section 604.21, Florida Statutes, sets forth the procedures for filing of complaints and resolving disputes. The complaint and counterclaim for damages on the March 25, 1980 shipment are within the purview of this statute. However, the separate counterclaim for the alleged second shipment was not shown to be within the purview of Chapter 604, Florida Statutes, or any other provision which assigns jurisdiction to the Division of Administrative Hearings. Therefore, the separate counterclaim must be dismissed.

14. Section 672.401(2), Florida Statutes, provides in part: "Unless otherwise explicitly agreed

    title passes to the buyer at the

    time and place which the seller completes his performance with reference to the physical delivery of the goods . . ."

    
    

15. Since there was no agreement to the contrary, Okun obtained title to the tomatoes on March 25 at the Six L's facility, and must bear any loss associated with their later condition and salability. The contract price of

    $10,198.50 was mutually agreed upon by the parties and must be paid to Petitioner by Respondent Okun or its surety.

    
    

16. Subsequent to hearing, Petitioner filed copies of broker's memoranda from its files requesting they be received as Petitioner's Exhibits 21 and 22. Respondent does not object and the documents are hereby identified as requested and received into evidence.

    
    

17. Subsequent to hearing, Okun filed Respondent's Exhibit No. 23, a garbage receipt dated March 28, 1980 for 200 boxes of tomatoes. Petitioner objects to receipt into evidence on the grounds that it has had no opportunity to cross-examine and on the absence of any tie-in of the receipt to the tomatoes at issue. The objection is sustained.

    
    

18. Proposed findings of fact were submitted by the parties. To the extent these proposed findings have not been adopted or are inconsistent with the findings herein, they have been specifically rejected as irrelevant or not supported by the evidence.

RECOMMENDED ORDER

From the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED:

That the Department of Agriculture and Consumer Services enter a final order finding that Morris Okun, Inc. is indebted to Six L's Packing Company, Inc. in the amount of $10,198.50 on the March 25, 1980 sale of tomatoes. It is further

RECOMMENDED that the Department of Agriculture and Consumer Services enter a final order dismissing the separate counterclaim of Morris Okun, Inc. It is further

RECOMMENDED that the Department of Agriculture and Consumer Services call upon Respondent Aetna Casualty and Surety Company to pay any portion of the indebtedness not paid by Respondent, Morris Okun, Inc.

DONE AND ENTERED this 10th day of March, 1981 in Tallahassee, Leon County, Florida.

R. T. CARPENTER Hearing Officer

Division of Administrative Hearings Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32301

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 10th day of March, 1981.

COPIES FURNISHED:

Mary Cheryl Matheis, Esquire 1627 K Street, N.W. Washington, D. C. 20006

Arthur Slavin, Esquire

270 Madison Avenue

New York, New York 10016

Docket for Case No: 80-002281

Orders for Case No: 80-002281