STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

ROBERT J. WALSH AND COMPANY, )

)

Petitioner, )

)

vs. ) CASE NO. 86-1422A

)

FLORIDA DEPARTMENT OF )

AGRICULTURE AND CONSUMER )

SERVICES, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by duly designated Hearing Officer K. N. Ayers, held a public hearing in the above- styled case on June 13, 1986 in Lakeland, Florida.

APPEARANCES

FOR PETITIONER: Thomas M. Egan, Esquire

Phillip Kuhn, Esquire Post Office Box 7323

Winter Haven, Florida 33883

FOR RESPONDENT: Ronnie H. Weaver, Esquire

Mayo Building, Room 513 Tallahassee, Florida 32301

By letter dated March 24, 1986, Robert J. Walsh and Company, Inc., ("Walsh" or "Petitioner") requested a formal hearing to contest the holding in Florida Department of Agriculture and Consumer Services Order entered February 3, 1986 that Petitioner was not an agent or representative of a producer in buying and selling agriculture products. Petitioner had filed a complaint against Dean Pent, d/b/a Pent Landscape Company, and Paul Pent, d/b/a Paul Pent Landscaping Company, for non-payment for plants sold to the Pents. In the Order entered February 3, 1986, Respondent denied Petitioner's standing to bring the complaint against the Pents and Pents' bonding company as an agent or representative of the producer.

At the hearing, Petitioner called three witnesses, Respondent called three witnesses and twelve exhibits were admitted into evidence. There is no dispute regarding the operational facts in this case. The only dispute is in the legal conclusions to be drawn from these facts, viz. whether Petitioner was an agent or representative of the producers so as to be eligible to file a complaint against the purchaser and its bonding company for non-payment for agricultural products sold to the purchaser.

Proposed findings were not timely submitted by the parties.

FINDINGS OF FACT

1. Robert J. Walsh and Company, Inc. has been in the business of selling agricultural products since 1962. It is a "dealer in agricultural products" as defined in s. 604.15(1), Florida Statutes (1985). It is not a "producer" as defined in s. 604.15(5), Florida Statutes (1985).

   
   

2. Walsh's modus operandi which it has used for many years is to have its salesmen call on landscapers, nurseries and other customers for trees, plants and other agricultural products to determine their needs. These salesmen have the prices of products and their availability from producers and the salesmen take orders from these purchasers. This order is sent to the producer who delivers the product to the purchaser and sends Walsh a copy of the delivery ticket. Walsh bills the customer for the product delivered and the producer bills Walsh for the consumer-cost of the product less a 20-25 percent discount from which Walsh derives its profit from the sale. The producer relies solely on Walsh for payment for the product it produces and delivers to the customer. Walsh has no authority to sell the product at a price other than that set by the producer. In any event, the producer bills Walsh for the product delivered at the producer's established price less the discount it gives Walsh for acting as intermediary in the sale.

   
   

3. If products are damaged in transit, the producer's driver will make any necessary adjustment with the customer or return the damaged plant for replacement by the producer. Walsh does not represent the grower if such a situation develops. Similarly, if the product is rejected by the purchaser for not meeting quality standards, that issue is resolved between the grower and the customer without input from Walsh. Whatever agreement is reached between the grower and the customer is reflected on the invoice signed by the customer and forwarded to Walsh who has the responsibility of collecting from the customer. The grower bills Walsh for the cost of the product less Walsh's commission.

   
   

4. The sales forming the bases for the complaints filed by Walsh with Respondent involve sales to Paul Pent, d/b/a Paul Pent Landscape Company, Dean Pent and J & W Landscape. On January 31, 1985, Walsh sold Pent three laurel oaks grown by Stewart Tree Service for a total price of $467.46 including sales tax (Ex. 2). On March 27, 1985, Walsh sold various trees and plants grown by Goochland Nurseries to J & W Landscape for a total price of $403.98 (Ex. 3). On April 22, 1985, Walsh sold two live oaks grown by Stewart Tree Service to Pent Landscape Company for a total price of $336.00 (Ex. 4). On July 3, 1985, Walsh sold various plants grown by Goochland Nurseries to J & W Landscape for a total price of $564.96 (Ex. 5). On all of these sales the producers billed Walsh for the product and were paid by Walsh. Walsh billed the customers who did not pay and Walsh filed the complaints (Ex. 8, 9 and 10), denied by Respondent on grounds Walsh was not an agent or representative of the producers.

   
   

5. In 1976, Petitioner filed a complaint against the bond of the Ernest Corporation, a licensed dealer in agricultural products and received $5,589.20 from Respondent who recovered from the bonding company. In the complaint Walsh alleged that it was agent for Southeast Growers, Inc., selling their nursery stock throughout Florida. Respondent's witnesses could not recall what additional evidence they saw to conclude that Walsh was, in fact, an agent for the producer. However, these witnesses all testified that had they then believed Walsh was solely responsible to the producer for payment for the products sold they would not have concluded Walsh was the agent or representative of the producer.

6. The bond on which Petitioner is attempting to recover provides that if the principal "shall faithfully and truly account for and make payment to producers, their agents or representatives, as required by Sections 604.15 - 604.30, Florida Statutes, that this obligation to be void, otherwise to remain in full force and effect." (Ex. 11 and 12)

   
   

   CONCLUSIONS 0F LAW

   
   

7. The Division of Administrative Hearings has jurisdiction over the parties to, and the subject matter of these proceedings.

   
   

8. Section 604.21, Florida Statutes (1985) provides in pertinent part:

   
   

   Any person claiming himself to be damaged by any breach of the conditions of a bond or certificate of deposit, assignment or agreement given by a licensed dealer in agricultural products as herein before provided may enter complaints thereof against the dealer and against the surety, if any, to the department, which complaint shall be a written statement of the facts constituting the complaint.

   
   

   Section 604.15(1) , Florida Statutes (1985) provides:

   
   

   "Dealers in agricultural products" means any person, whether itinerant or domiciled within this state, engaged within this state in the business of purchasing, receiving, or soliciting agricultural products from the producer or his agent or representative for resale or processing for sale; acting as an agent for such producer in the sale of agricultural products for the account of the producer on a net return basis; or acting as a negotiating broker between the producer or his agent or representative and the buyer. (emphasis supplied)

   
   

9. One of the complexities of this case which leads to some confusion is the fact that both Pent and Walsh were dealers in agricultural products as above defined. Walsh fits into the category of a person claiming himself to be damaged by a breach of any condition of the bond of Pent. However, he has the burden of showing that he is a person covered by the bond.

   
   

10. According to the terms of the bond, coverage is provided only for "producers, their agents or representatives." Walsh is clearly not a producer in this case but claims coverage as an agent or representative. In construing "agent" or "representative" the legislative intent should be considered.

11. The purpose of these provisions of the statute requiring licensing and bonding of dealers in agricultural products, as expressed in Section 604.151, Florida Statutes, is to protect producers from economic harm. Economic harm sustained by an agent or representative is imputed back to the principals, which in this case are the producers.

    
    

12. An agency may be defined as a contract either expressed or implied upon a consideration, or a gratuitous undertaking, by which one of the parties confides to the other the management of some business to be transacted in the former's name or on his account, and by which the latter assumes to do the business and render an account of it. 2 Fl. Jur. 2d "Agency," Section 1.

    
    

13. Here, Walsh was selling agricultural products on its own account, which products it was purchasing from the producers. The producer sold its product to Walsh and delivered it to the address Walsh indicated. The customer receipted for the product and the producer billed Walsh for the total cost, including transportation, to the ultimate buyer, less the 20-25 percent commission Walsh received. Walsh paid the producer and billed the customer. Whether or not Walsh collected from the customer had no bearing on the debt Walsh owed the producer for the product. It could be said that the producer was the agent for Walsh in delivering the product to the user.

    
    

14. Even though Walsh never had actual possession of the product the sale to Walsh was complete when the producer delivered the product to the user. The entire transaction clearly is a buy-and-sell operation by Walsh and not Walsh acting as an agent for the producer. The fact that Walsh sells the producer's product does not make Walsh the agent or representative of the producer, when the producer holds only Walsh responsible to pay for the product.

    
    

15. Nor was Walsh a representative of the producers. Representative is defined in Webster's New Collegiate Dictionary (1977 Ed.) as: "standing or acting for another esp. through delegated authority." Walsh had no delegation of authority to act for the producer. Walsh had no authority to modify the price, settle disputes, or any other function normally performed by a representative.

    
    

16. The above interpretation of those having standing to file a complaint against a dealer in agricultural products is the same interpretation of the applicable statutory provisions that is made by Respondent. As stated in Natelson v. Dept. of Insurance, 454 So.2d 31 (Fl 1st DCA 1984):

    
    

    Agencies are afforded a wide discretion in the interpretation of a statute which it [sic] administers and will not be overturned on appeal unless clearly erroneous. The reviewing court will defer to any interpretation within the range of possible interpretations. (citations omitted).

    
    

17. This interpretation limiting recovery on an agricultural bond to producers and their agents or representatives is certainly within the range of possible interpretations, especially considering the purpose of these statutory provisions to be the protection of the economic well being of the producer.

    
    

18. From the foregoing, it is concluded that Robert J. Walsh & Company, Inc. was not the agent or representative of Goochland Nurseries and Stewart Tree

Service and does not have standing to file a complaint against Dean Pent, d/b/a Pent Landscape Company, and Paul Pent, d/b/a Paul Pent Landscape Company, and their surety, Transamerica Insurance Company.

RECOMMENDATION

It is recommended that a Final Order be entered dismissing the petition as contained in Petitioner's letter dated March 24, 1986.

ENTERED this 14th day of July 1986 in Tallahassee, Leon County, Florida.

K. N. AYERS 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 14th day of July 1986.

COPIES FURNISHED:

Honorable Doyle Conner Commissioner of Agriculture The Capitol

Tallahassee, Florida 32301

Robert Chastain, Esquire General Counsel

Mayo Building, Room 513 Tallahassee, Florida 32301

Thomas M. Egan, Esquire Phillip Kuhn, Esquire Post Office Box 7323

Winter Haven, Florida 33883

Ronnie H. Weaver, Esquire Mayo Building, Room 513 Tallahassee, Florida 32301

Mr. Joe W. Right

Bureau of Licensing & Bond Department of Agriculture Mayo Building

Tallahassee, Florida 32301

Docket for Case No: 86-001422

Orders for Case No: 86-001422