STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

HOMESTEAD TOMATO PACKING )

COMPANY, INC., )

)

Petitioner, )

)

vs. ) CASE NO. 85-3487A

) DADE TOMATO COMPANY, INC. and ) STATE AUTOMOBILE INSURANCE CO. )

)

Respondents. )

)

RECOMMENDED ORDER

Final hearing in the above-styled case was held on December 10, 1985, in Miami, Florida, before Hearing Officer Mary Clark.

The parties were represented as follows:

Homestead Tomato Alexander Pires, Esquire Packing Go., Inc. 2501 M. Street Northwest "Homestead Tomato: Washington, D. C. 20037

Dade Tomato Co., David V. Lococo, Esquire Inc. Stuart Saltzman, Esquire

"Dade Tomato": 901 Northeast 125th Street, Suite C

North Miami, Florida 33161

State Automobile No appearance Insurance Company:

ISSUES AND PROCEDURAL MATTERS

This proceeding was initiated on June 27, 1985, when Petitioner filed its complaint for $51,680.00 with the Florida Department of Agriculture. Respondents were Dade Tomato and its surety, State Automobile Mutual Insurance Co. of Columbus, Ohio. After payment of $38,880.00 was received, Homestead Tomato reduced its claim to $12,800.00 in an amended complaint dated July 22,

1985. Dade Tomato responded with a timely request for formal hearing.

The issue at hearing was whether $12.00 or $16.00 was the price per box of 5 x 7 tomatoes purchased by Dade Tomato from Homestead Tomato on January 13th and 21st, 1985.

Homestead Tomato presented the testimony of two witnesses and nineteen exhibits; Dade Tomato presented seven witnesses and thirteen exhibits; State Automobile Insurance Company was noticed, but did not appear. Both parties submitted Proposed Findings of Fact and Conclusions of Law. These have been carefully considered in the preparation of this Recommended Order, and an outline of the adoption or rejection of each proposed finding is included in Appendix A, attached to, and incorporated in this order. A document styled Reply Brief of Petitioner Homestead Tomato Packing Company, Inc., was filed on January 9, 1986. It was not authorized and was not considered in the preparation of this Recommended Order.

FINDINGS OF FACT

1. Homestead Tomato is agent for Strano Farms of Florida City, Florida, a producer of tomatoes. Rosario Strano is president of Homestead Tomato and co-owner of Strano Farms. (R. Strano)

   
   

2. Dade Tomato, a tomato repacking company, is located in Miami, Florida. Its president is Joe Lococo. It is licensed as a dealer in agricultural products and is bonded by State Automobile Mutual Insurance Company. (J. Lococo, Amended Complaint dated July 22, 1985)

   
   

3. The week of January 20-26, 1985, was a memorable week for the Florida tomato industry: a savage freeze hit south Florida, crops were devastated and the market awoke from its earlier torpor. For days prior to the 20th, Rosario Strano had carefully watched the weather services. By the 15th, when the freeze forecast appeared to be a sure thing, Strano Farms worked night and day and into the weekend harvesting tomatoes. (T. Banks, R. Strano)

   
   

4. On January 19th, a representative from Dade Tomato contacted Tom Banks, an employee of Homestead Tomato, and asked for a load (1600 boxes) of 6 x 7 tomatoes. Banks explained that they were ready to sell, but not ready to price, since they expected a high demand as a result of the impending freeze. It

   was established that the "following week's price would control." The load was shipped that same day. On Monday, the Dade Tomato called for another load the same size. Prices still had not been established, but the load was shipped, again the same day. (T. Banks)

   
   

5. After the freeze, around the middle of the week, Rosario Strano called together Tom Banks and a few other key employees and established a price for their tomatoes:

   
   

   $20.00 box for 5 x 6 (largest)

   $18.00 box for 6 x 6 (next size down)

   $16.00 box for 6 x 7 (medium)

   $12.00 box for 7 x 7 (small)

   
   

   Banks was instructed that the buyers were to be notified the price was set. Anyone "booked in" didn't have to take the order or could back out. Strano wanted to be told immediately of any problems with the tomatoes on the other end, and he would take them back. He was confident that he had a good market for his unique, pre-freeze tomato supply. Several buyers backed out, some tomatoes did come back, but the entire supply was sold (approximately 40-48 loads). (T. Banks. R. Streno)

   
   

6. In setting his prices for the week of the freeze, Strano obtained information from the Florida Fruit and Vegetable Report, a daily publication of the U.S. Department of Agriculture and the Florida Department of Agriculture and Consumer Services, out of Winter Park, Florida. (R. Strano) The sheets include price quotations for a wide variety of commodities in different parts of the state obtained by telephone survey of packing houses and producers the prior date. (Petitioner's Exhibits #15-19) It is a guideline rather than an "official" market price indicator. (J. Strother, R. Cohen) In some eases the prices quoted to the survey are later adjusted by the producer. (R. Cohen) The issue dated January 24, 1985, reflected for #1 quality tomatoes a price of

   $20.00, $18.00 and $16.00 for 5 x6, 6 x 6, and 6 x 75 respectively. The following two days showed the same. Prior days, January 22 and 23 quoted no prices but stated "practically all sales prices to be established later". (Petitioner's Exhibits #15-19)

   
   

7. After hearing the prices established by Strano, some of his customers, including Joe Lococo and his broker, began to protest. (T. Banks, J. Lococo) While refusing to budge, end arguing that he was charging the same price to his other customers for his pre-freeze, quality tomatoes, Strano resorted to offering

   rebates of 2.00 a box for prompt payment and, later, for settlement of cases that otherwise would have gone to court. (T. Banks) In short, Strano had difficulty getting some of his customers to pay the price he had set. Not all of Strano's customers bought and had tomatoes shipped on a price to be settled basis. Of the ten invoices admitted as Petitioner's Exhibits #5- 14, three represented sales on the same basis as the sales to Dade Tomato: Exhibits 5, 6 and 7. The remaining invoices represented sales to customers who had the price established prior to sale.

   Each of the invoices reflect the price of a box of 5 x 7 tomatoes to be $15.00. The invoices do not reveal which may have received the $2.00 rebate.

   
   

8. Dade Tomato purchased ten loads of tomatoes during the week of the freeze. With the exception of the two loads from Homestead Tomato, the highest price for 6 x 75 was $12.00. Most of the tomatoes picked prior to the freeze were priced from $10- 12.00, with tomatoes picked after the freeze (salvage) going for as low as $6.00 for 6 x 7s. (J. Lococo, Respondent's Exhibits #1- 12)

   
   

9. "Market price" is a highly fluid, highly subjective standard. During the course of a tomato season from 25-30% of sales are made on a "market price" basis, that is, the parties do not establish a firm price prior to sale, but wait to see what the market does. The market can be settled in a few days in a normal condition or longer in an abnormal condition, such as after a freeze. Market relates to supply and demand. A price is tried, then accepted or rejected, depending on whether the buyer in turn can find a market to sell at this price. Failure by a seller to adjust downward, or overpricing can result in animosity and the refusal of customers later to purchase at reasonable prices in a different season. (J. Strother, R. Cohen, F. Campisi)

   
   

10. Various agents and brokers testified at the hearing on behalf of Dade Tomato as to what they felt was the market during the week of January 20-26th, 1985. James Strother, with thirty- three years in the produce business, came out that week with prices of $16.00, $14.00 and $12.00, and $16.00, $15.00 and

    $12.00, with $12.00 for the 6 x 75. He told his customers, "You're looking at the low and I expect to get paid for it." He had heard rumblings of a higher market, but set his market price to insure that he would get paid, and he moved his tomatoes.

    While he avowed respect for Strano, he testified that their thoughts on the market that week differed. He knew others were quoting higher than $12.00, he just wanted to be sure he sold. Florida Tomato Packers, Inc., is one of the largest packers in

    Florida. They initially sold 6 x 7 tomatoes during the freeze market at $16.00, but later adjusted the invoices down to $12.00. (D. Holden, Respondent's Exhibit #1) No one explained exactly how or why this was done by Florida Tomato Packers. Other exhibits produced by Respondent showed adjustments downward to varying prices. (Respondent's Exhibits # 7 and 8)

    
    

11. After the initial complaint was filed by Homestead Tomato, Lococo made two payments for a total which amounts to

    $12.00 a box, the level which he insists the proper price should be. He does not dispute the quality or condition of the tomatoes sold by Homestead Tomato. (J. Lococo)

    
    

    CONCLUSIONS OF LAW

    
    

12. The Division of Administrative Hearings has jurisdiction over this proceeding pursuant to Section 120.57(1) and Section 604.24(6) Florida Statutes.

    
    

13. Dade Tomato is a "dealer" and Homestead Tomato a "producer" of agriculture products, as those terms are defined in Section 604.15 Florida Statutes. Section 604.21 Florida Statutes, provides a procedure for resolution or administrative adjudication of complaints filed with the Florida Department of Agriculture and Consumer Services by persons alleged to be damaged by breach of an agreement by a licensed dealer in agricultural products. The complaint is directed against the dealer and his surety. Appropriately, this procedure was utilized by Homestead Tomato when Dade Tomato refused to pay the full invoiced amount for two loads of tomatoes.

    
    

14. Black's Law Dictionary, 5th Edition, defines market price as:

    
    

    The price at which a seller is ready and willing to sell and a buyer ready and willing to buy in the ordinary course of trade. The price actually given in current market dealings, the actual price at which given stock or commodity is currently sold, or has recently been sold in open market, that is, not at forced sale, but in the usual and ordinary course of trade and competition between sellers and buyers equally free to bargain, as established by records of late sales,

    * * *

    Market price is synonymous with market value, and means the price actually given in current market dealings, or the price at which the supply and demand are equal. . .

    
    

15. No authority exists for Respondent's proposition that "'market price' is ultimately established by what the majority of buyers and sellers have negotiated the price to be for a given item." (Respondent's proposed finding of fact. paragraph 17). If that were the case, the market would never settle, as buyers and sellers would continually wait to find out what the majority was doing, and the majority's price would never be established.

    
    

16. As agreed by the parties at the time the two loads were ordered and shipped, Rosario Strano set his price after the freeze. That price was based on his best estimation of the market and upon an industry guideline: The Florida Fruit and Vegetable Report . Respondent never rebutted Strano's testimony that his customers were given an opportunity to back dawn once they were told his set price of $16.00 per box. Dade Tomato protested, but didn't return the tomatoes. Others had differing estimations of the market, but Strano found buyers at his market. It is immaterial that some buyers at $16.00 were at a set price, and others were at market price to be established later. The price was the same. Later, like others, Strano was willing to negotiate by offering rebates, but only on conditions that the invoices be paid promptly, or as settlement to avoid litigation. Those conditions were not met by Joe Lococo. Therefore, the established price remained at $16.00.

RECOMMENDATION

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

RECOMMENDED:

That a Final Order be entered requiring that the balance of

$12,800.00 be paid by Dade Tomato to Homestead Tomato. In the absence of payment, Co-Respondent, State Automobile Insurance Company, should be required to pay said sum in accordance with Section 604.21(8), Florida Statutes.

DONE and ORDERED this 15th day of January, 1986, in

MARY CLARK

Hearing Officer

Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 15th day of January, 1986.

APPENDIX TO RECOMMENDED ORDER, CASE NO. 85-3487A

The following constitutes my specific rulings pursuant to Section 120.59(2) Florida Statutes, on all of the Proposed

Findings of Fact submitted by the parties to this case.

Submitted by the Petitioner

1. Adopted in paragraph 1, Findings of Fact.

2. Adopted in paragraph 2, Findings of Fact.

3. Adopted in paragraph 3, Findings of Fact.

4. Adopted in substance in paragraph 4, Findings of Fact.

5. Adopted in paragraph 4, Findings of Fact.

6. Adopted in paragraph 4, Findings of Fact.

7. Adopted in paragraph 3, Findings of Fact.

8. Adopted in paragraph 3, Findings of Fact.

9. Adopted in paragraph 5, except that instead of a set number of loads of tomatoes sold, the testimony of R. Strano was a range from forty to forty-eight loads.

10. Adopted in paragraph 5, Findings of Fact.

11. Adopted in substance in paragraph 7. The names of the buyers and total amounts of each purchase are immaterial.

12. Adopted in paragraph 6, Findings of Fact.

13. The substance of this paragraph relating to Florida Tomato Packers, Inc., is adopted in paragraph 10, Findings of Fact. The sentence relating to the market price is incorporated in essence in paragraph 5, Conclusions of Law.

14. These facts are covered in the "Issues and Procedural Matters" preceding the Findings of Fact, and in paragraph 11, Findings of Fact.

1. The substance of this paragraph relating to when the market settles is adopted in paragraph 9, Findings of Fact.

2. The bias of witnesses who testified as to when the market settled is irrelevant as the time that the market settled is irrelevant. The statement that " Respondent agrees that the contract for the tomatoes was at a price to be established during the week of January 21-26 1985' . . . " is not supported by competent substantial evidence.

3. Adopted in substance in paragraph 10, Findings of Fact.

Rulings on Proposed Findings of Fact Submitted by the Respondent

1. The first sentence is adopted in paragraph 4, Findings of Fact. The second sentence is substantially modified in paragraph

   4 by a finding that the agreement was that the following week's price would control".

2. Same as paragraph 1, above.

3. Adopted in substance in paragraph 5, Findings of Fact.

4. Adopted in paragraph 7, Findings of Fact.

5. Adopted in paragraph 11, Findings of Fact.

6. Adopted in paragraph 5, Findings of Fact.

7. The second sentence, relating to all of the sales at

   $16.00 as being a set price, is rejected as contrary to the weight of the evidence. The remaining sentences are adopted in paragraphs 5 and 7, Findings of Fact.

8. Partially adopted in paragraph 8, Findings of Fact. The basis of the price paid is immaterial.

9. Adopted in paragraph 10, Findings of Fact.

10. Rejected as cumulative and unnecessary.

11. Rejected as cumulative and unnecessary.

12. Rejected as a misconstruction of the testimony. James Strother testified that his price was 12.00 a box.

13. Adopted in paragraph 6, Findings of Fact.

14 - 16. The substance of these paragraphs have been adopted. However, they are presented here as simply testimony of witnesses rather than findings of fact.

1. The "market price" description is rejected for reasons set out in paragraph 4, Conclusions of Law.

2. Adopted in paragraph 11, Findings of Fact.

COPIES FURNISHED:

David V. Lococo, Esquire LOCOCO, KLEIN, TOUBY & SMITH

901 Northeast 125th Street Suite C North Miami, Florida 33161

Joe W. Kight, Chief

Bureau of License and Bond

Florida Department of Agriculture and Consumer Services Room 416 - Mayo Building

Tallahassee, Florida 32301

Ron Weaver, Esquire

Florida Department of Agriculture and Consumer Services Mayo Building,

Tallahassee, Florida 32301

State Automobile Insurance Company

515 E. Broad Street Columbus, Ohio 43216

Alexander Pires, Esquire SCOTT, HARRISON and McLEOD

2501 M. Street N.W. Suite 400

Washington, D.C. 20037

Robert Chastain, Esquire

Department of Agriculture and Consumer Services Room 513 - The Mayo Building

Tallahassee, Florida 32301

Honorable Doyle Conner Commissioner of Agriculture The Capitol

Tallahassee, Florida 32301

Docket for Case No: 85-003487

Orders for Case No: 85-003487