STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

JOHN W. STONE, INC., )

)

Petitioner, )

)

vs. ) CASE NO. 86-1073A

) SAM COMPTON PRODUCE COMPANY, INC. ) and ST. PAUL FIRE AND MARINE ) INSURANCE COMPANY, )

)

Respondent, )

) JOHN W. STONE, INC., )

)

Petitioner, )

)

vs. ) CASE NO. 86-1188A

) SAM COMPTON PRODUCE COMPANY, INC. ) and ST. PAUL FIRE AND MARINE ) INSURANCE COMPANY, )

)

Respondent, )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, William R. Cave, held a public hearing in the above- styled case on July 1, 1986 in Orlando, Florida.

APPEARANCES

For Petitioner: John W. Stone

Qualified Representative John W. Stone, Inc.

Post Office Box 74 Hastings, Florida 32054

For Respondents: No appearances

By complaints filed with the Bureau of License and Bond, Florida Department of Agriculture and Consumer Services (Department) on January 20, 1986 and submitted to the Division of Administrative Hearings for hearing on March 31, 1986, Petitioner, in this consolidated proceeding, seeks payment of a balance due on potatoes sold and delivered to Respondent Sam Compton Produce Company, Inc. (Compton) between May 1, 1986 and June 13, 1986, plus interest on unpaid balance.

In support of the allegations, Petitioner presented the testimony of John

1. Stone and Tommie Bennett. Petitioner's exhibits 1-6 were received into evidence.

   
   

   Respondents did not appear and offer any testimony or exhibits at the hearing.

   
   

   Petitioner waived submission of posthearing proposed findings of fact and conclusion of law as allowed by Section 120.57(1)(b)(4), Florida Statutes (1985).

   
   

   FINDINGS OF FACT

   
   

   Upon consideration of the oral and documentary evidence adduced at the hearing, the following facts are found:

   
   

   1. At all times pertinent to this proceeding, Petitioner was a producer of agricultural products in the State of Florida as defined in Section 604.15(5), Florida Statutes (1985)

      
      

   2. At all times pertinent to this consolidated proceeding, Compton was a licensed dealer in agricultural products as defined by Section 604.15(1), Florida Statutes (1985), issued licensed no. 502 by the Department, and bonded by Respondent St. Paul Fire and Marine Insurance Company (St. Paul) in the sum of $50,000.00, Bond No. 400 EK 1860, with inception date of May 13, 1984 and expiration date of May 12, 1985; and in the sum of $50,000.00, Bond No. 400 HA 4339, with inception date of May 13, 1985 and expiration date of May 12, 1986.

      
      

   3. At all times pertinent to this proceeding, St. Paul was authorized to do business in the State of Florida.

      
      

   4. The complaints filed by Petitioner were timely filed in accordance with Section 604.21(1), Florida Statutes (1985)

      
      

   5. On January 7, 1985 Compton and Petitioner entered into a written contract wherein Petitioner was to deliver and Compton was to purchase 20,000 hundredweight (cwt) or 2,000,000 pounds of chipping quality potatoes, unwashed, in bulk at $5.25 per cwt F.O.B. loaded on Compton's truck at Hastings, Florida, during the 1985 potato selling season, with payment due thirty (30) days after billing and any account unpaid after thirty (30) days from the date of filing to be charged one and one-half (1 1/2) per cent per month or eighteen per cent per annum on the unpaid principal balance.

      
      

   6. Although Jim Boss (Boss), Compton's agent, located in Hastings, Florida, whose responsibility it was to arrange for trucks to haul the potatoes and notify Petitioner as to when and how the potatoes were to be loaded, was not present at all times during the loading, he had general overall authority to inspect and reject any load not in good condition and meeting the requirement of a chipping potato.

      
      

   7. From May 1, 1985 through May 7, 1985, Petitioner loaded and invoiced thirteen (13) loads of potatoes for Compton with a total of 6,105.6 cwt at

      $5.25/cwt for a total amount of $32,054.40 for the thirteen (13) loads. None of these potatoes have been paid for by Compton and the interest earned up until

      July 1, 1986 amounts to $6,709.39 for a total amount owed of $38,763.79 by Compton on these thirteen (13) loads of potatoes. These thirteen (13) loads of potatoes were sold and delivered during the time Bond No. 499 EK 1860 was in effect.

      
      

   8. From May 21, 1985 through June 13, 1985 Petitioner loaded and invoiced thirty-four (34) loads of potatoes, including a partial load on June 12, 1986, with a total of 16,391.4 cwt of which 13,894.4 cwt were invoiced at $5.25 per cwt, the contract price, and 2,497.0 cwt invoiced at $5.50 per cwt for a total amount of $86,679.10. None of these potatoes have been paid for by Compton and interest earned up until July 3, 1986 amounts to $16,661.21 for a total amount of $103,340.31 owed by Compton on these thirty-four (34) loads of potatoes. These thirty four (34) loads of potatoes were sold and delivered during the time that Bond No. 400 AA 4339 was in effect.

      
      

   9. Jim Boss did not reject any of the forty-seven (47) loads of potatoes loaded and sold to Compton by Petitioner from May 1, 1985 through June 13, 1985.

      
      

   10. The testimony of John W. Stone that the forty- seven (47) loads of potatoes were in good condition when loaded and met the requirements of a quality chipping potato and that Compton did not advise him of any problems with the condition or quality of the potatoes when received, until after the complaint had been filed, was credible.

       
       

   11. Petitioner did not receive any inspection reports or other documentary evidence from Compton or anyone else showing that the condition or the quality of the potatoes was less than that contracted for by Compton, i.e., chipping quality potatoes in good condition.

       
       

       CONCLUSIONS OF LAW

       
       

   12. The Division of Administrative Hearings has jurisdiction over the parties to, and the subject matter of, this proceeding.

       
       

   13. Compton was a "dealer in agricultural products" as defined in Section 604.15(1), Florida Statutes (1985) and, as such, was required to be licensed by the Department pursuant to Section 604.17, Florida Statutes (1985) and, as a requirement of licensing, had to show the Department evidence of a surety bond or a certificate of deposit in accordance with Section 604.20, Florida Statutes (1985) and Rule 5H-1.01, Florida Administrative Code. Compton was properly and sufficiently bonded by St. Paul in the sum of $50,00.00 at all times pertinent to Case No. 86- 1073A and was properly but insufficiently bonded by St. Paul in the sum of $50,000.00 at all times pertinent to Case No. 86- 1188A.

       
       

   14. The Petitioner, a "producer" of agricultural products as defined by Section 604.15(5), Florida Statutes (1985) filed a timely complaint in each of the above-styled causes against Compton and his surety, St. Paul in accordance with Section 604.21, Florida Statutes (1985) alleging, among other things, that Compton had refused to pay for "agricultural products" as defined by Section 604.15(3), Florida Statutes (1983) sold and delivered to Compton between May 1, 1985 and June 13, 1985.

       
       

   15. The evidence is clear that Compton owes Petitioner $38,763.79 which includes $6,709.39 interest for potatoes shipped beginning May 1, 1985 through May 6, 1985 which is covered by St. Paul's Bond No. 400 EK 1860 and $103,340.31 which includes $16,661.21 interest for potatoes shipped beginning May 21, 1985 through June 13, 1985 which is covered by St. Paul's Bond No. 400 HA 4339.

   16. Based on the contract between Petitioner and Compton, Petitioner is entitled to recover interest when Compton failed to timely pay under the contract for the potatoes. 32 Fla. Juris. 2d, Interest and Usury Section 2. Although Section 604.20(1), Florida Statutes (1985) does not specifically provide for the recovery of interest under the bond where the dealer has expressly obligated himself by contract to pay interest when the dealer fails to timely pay for agricultural products purchased from a "producer" of agricultural products, it does provide that the bond "shall be conditioned to secure the faithful accounting for and payment to producer or their agents or representatives of the proceeds of all agricultural products handled or purchased by such dealers." (emphasis supplied). Webster's New Twentieth Century Dictionary Second Edition, defines "proceeds" as: "that which proceeds or results, as from a transaction, esp., the sum or profits derived from a sale, venture, etc." It is readily apparent that any moneys received as a result of a dealer's failure to timely pay for agricultural products purchased from a "producer" of agricultural products would come within the meaning of proceeds to be covered by the bond required under Section 604.20, Florida Statutes (1985) and in line with the purpose set forth by the legislature in Section 604.151, Florida Statutes (1985).

RECOMMENDATION

Based upon the Findings of Fact and Conclusions of Law recited herein, it is RECOMMENDED that Compton be ordered to pay to the Petitioner in Case No. 86- 1073A the sum of $38,763.79 and in the Case No. 86-01188A the sum of

$103,340.31. It is further RECOMMENDED that if Compton fails to timely pay the Petitioner as ordered, then St. Paul be ordered to pay the Department as required by Section 604.21, Florida Statutes (1985) and that the Department reimburse the Petitioner in accordance with Section 604.21, Florida Statutes (1985).

Respectfully submitted and entered this 11th day of July, 1986, in Tallahassee, Leon County, Florida.

WILLIAM R. CAVE

Hearing Officer

Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32301

(904) 488-9675

FILED with the Clerk of the Division of Administrative Hearings this 11th day of July, 1986.

COPIES FURNISHED:

Doyle Conner, Commissioner Department of Agriculture and

Consumer Services The Capitol

Tallahassee, Florida 32301

Robert Chastain, General Counsel Department of Agriculture and

Consumer Services

Mayo Building, Room 513 Tallahassee, Florida 32301

Ron Weaver, Esquire Department of Agriculture and

Consumer Services Mayo Building

Tallahassee, Florida 32301

Mr. Joe W. Kight, Chief Bureau of License and Bond Department of Agriculture and

Consumer Services Mayo Building

Tallahassee, Florida 32301

John W. Stone, President John W. Stone, Inc.

Post Office Box 74 Hastings, Florida 32045

Sam Compton Produce Company, Inc.

2208 Forest Avenue, Northwest Knoxville, TN 39716

St. Paul Fire and Marine Insurance Company

385 Washington Street St. Paul, MN 55102

Docket for Case No: 86-001073

Orders for Case No: 86-001073