STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

MICHAEL JONES, )

)

Petitioner, )

)

vs. ) CASE NO. 87-2214A

)

1. J. SALES COMPANY and ) HARTFORD INSURANCE COMPANY, )

   )

   Respondents. )

   )

   
   

   RECOMMENDED ORDER

   
   

   Pursuant to notice, a hearing was held in this cause on October 14, 1987, in Orlando, Florida, before Diane A. Grubbs, a Hearing Officer with the Division of Administrative Hearings.

   
   

   APPEARANCES

   
   

   For Petitioner: Michael C. Jones, pro se

   Route 2, Box 26-E Summerfield, Florida 32691

   
   

   For Respondent: Thomas B. Smith, Esquire

   1. J. Sales Company: McGUIRE, VOORHIS & WELLS, P.A.

Two South Orange Plaza Post Office Box 633 Orlando, Florida 32802

For Respondent Hartford

Insurance Company: No appearance

ISSUE

Whether A. J. Sales Company owes petitioner $1,712.80 for watermelons loaded on June 18, 1986.

BACKGROUND

On December 16, 1986, petitioner, Michael C. Jones, filed a complaint against A. J. Sales Company and Hartford Insurance Company of the Southeast (Hartford Insurance Company), as surety for respondent, which alleged that A. J. Sales Company was indebted to petitioner for certain agricultural products produced by petitioner and sold to respondent. The complaint specifically alleged that on June 18, 1986, petitioner sold to A. J. Sales Company 42,820 pounds of Crimson Sweet watermelons at four cents a pound. The complaint also alleged that A. J. Sales Company purchased the watermelons by telephone from Larry Dimaria, who was acting as petitioner's salesman. By answer filed March 16, 1987, respondent A. J. Sales Company denied petitioner's claim on the grounds that the watermelons were loaded on a "F.O.B. upon acceptance at

destination basis," that the watermelons were not acceptable, and that the watermelons had to be dumped. The matter was referred to the Division of Administrative Hearings on May 20, 1987, for further proceedings.

At the hearing, petitioner testified on his own behalf. Petitioner did not offer any exhibits into evidence. Respondent presented the testimony of James

A. Travis, a former employee of A. J. Sales Company; Carl Boyles, a broker for

A. J. Sales Company; and Al Thunell, president of A. J. Sales Company. Respondent's exhibits 1-4 were admitted into evidence.

A transcript of the hearing has been filed and both petitioner and respondent filed proposed recommended orders. A ruling on each of the proposed findings of fact has been made in the Appendix to this Order.

FINDINGS OF FACT

1. Petitioner, Michael C. Jones, is a watermelon grower who resides in Summerfield, Florida. In June of 1986, petitioner arranged to sell his watermelons through Larry Dimaria for four cents a pound. Mr. Dimaria advised petitioner that he would get four cents a pound at the weighing.

   
   

2. In his complaint, the petitioner described Mr. Dimaria as his "salesman." At the hearing he stated that Mr. Dimaria was his broker working on commission. Regardless of the characterization, it is clear that Mr. Dimaria was acting as petitioner's agent for the sale of the watermelons in question.

   
   

3. Acting on behalf of petitioner, Mr. Dimaria called Carl Boyles, an employee of A. J. Sales Company, to advise that petitioner had watermelons for sale. Mr. Boyles was able to locate a buyer for the watermelons, the Auster Company in Chicago, Illinois. Mr. Boyles then called Mr. Dimaria to inform him of the sale. Mr. Dimaria was specifically advised by Mr. Boyles that the melons would have to be in good condition, meaning that they would pass a USDA inspection, and that petitioner would have to "ride the watermelons in," meaning that petitioner would have to guarantee arrival of the watermelons in good condition in Chicago. In other words, if the melons failed a USDA inspection in Chicago, the Auster Company had the right to reject the watermelons and the risk of the loss would be on petitioner. Petitioner was guaranteed four cents a pound for the watermelons only upon successful delivery.

   
   

4. The terms and conditions of the sale were made clear to Mr. Dimaria. Indeed, because A. J. Sales Company had experienced problems with Mr. Dimaria in 1985, which included Mr. Dimaria's misrepresenting the quality of the watermelons he was selling, A. J. Sales Company had determined that the only terms on which it would do business with Mr. Dimaria were that the farmers Mr. Dimaria represented would have to guarantee arrival of the watermelons in good condition and that the farmers would bear the risk of loss if the melons were not in good condition when delivered. Since A. J. Sales Company's representatives do not see the watermelons themselves and could not rely on Mr. DiMaria's representations, A. J. Sales Company felt these terms were necessary to protect its interests.

   
   

5. The subject watermelons were shipped to Chicago on June 18, 1986. They were inspected in Chicago on June 20, 1986, by a United States Department of Agriculture inspector. The watermelons failed to grade U.S. No. 1 on account of their condition, which was that the samples averaged 66 percent overmature.

6. Mr. Boyles was advised of the problem with the watermelons on Friday, June 20, the day they were inspected. He attempted to telephone Mr. Dimaria but was unable to reach him. He therefore called the petitioner to advise of the condition of the melons and find out what petitioner wanted done. Petitioner told Mr. Boyles that he knew of no buyer in the area and told Mr. Boyles to do what he could.

   
   

7. Mr. Boyles called several people in the Chicago area but could not find anyone who was willing to buy the watermelons. The only possibility was to take the watermelons to a flea market being held on Sunday and sell as many melons as possible directly from the truck. Mr. Boyles was advised that the melons might get $400 or $500 at the flea market, but he knew it would cost $300 to keep the driver in Chicago through Sunday. Therefore, the best return possible from selling the watermelons at the flea market would be $100 or $200. Further, the truck driver advised Mr. Boyles that the melons were popping open and juice was running out the bottom of the truck. Based on all the information that he had, Mr. Boyles determined that the best option was not to add an additional $300 to the freight bill, but simply to tell the truck driver to dump the watermelons. Respondent received a receipt indicating that one load of watermelons, constituting 46 x 2.05 cubic yards, had been dumped at the Inox County, Illinois, landfill and that the charge for dumping had been $94.30.

   
   

8. A. J. Sales Company never received any payment for the watermelons in question. A. J. Sales Company invoiced petitioner for the freight charges on the watermelons, but petitioner never paid the invoice. Petitioner never invoiced A. J. Sales Company for the watermelons.

   
   

9. What apparently happened in this case is that the petitioner was not fully advised by his agent, Mr. Dimaria, of the terms and conditions of the sale. All negotiations concerning the watermelons were conducted between Mr. Dimaria and Carl Boyles. The petitioner did not talk to any representative of

   A. J. Sales Company concerning the terms and conditions of the sale. Petitioner's only knowledge of the terms and conditions of the sale came from Mr. Dimaria, and petitioner admitted that he had experienced problems with representations made by Mr. Dimaria on other loads of watermelons he handled for petitioner. On other loads, petitioner was advised by Mr. Dimaria that he would receive a half cent more per pound for the watermelons than he actually got. After the instant dispute, Mr. Dimaria ceased being a broker representing the petitioner.

   
   

   CONCLUSIONS OF LAW

   
   

10. The Division of Administrative Hearings has jurisdiction over the subject matter of and the parties to this proceeding. Section 604.21(6) and Section 120.57(1), Florida Statutes (1987).

    
    

11. Respondents do not dispute that A. J. Sales Company is a licensed dealer in agricultural products, as defined in Section 604.15, Florida Statutes, or that Hartford Insurance Company is the surety for respondent.

    
    

12. Section 604.20(1), Florida Statutes, provides that before a license is issued to a dealer in agricultural products, the dealer

    
    

    shall make and deliver to the department a surety bond ... in the amount of at least

    $1,000 or in such greater amount as the Department may determine, [that] [s]uch bond

    must be executed by a surety corporation [and that] [s]uch bond ... shall be

    conditioned to secure the faithful accounting for and payment to the producers or their agents or representatives of the proceeds of all agricultural products handled or purchased by such dealer.

    
    

    Section 604.21(1) provides that:

    
    

    [a]ny person claiming himself to be damaged by any breach of the conditions of a bond or certificate of deposit assignment or agree- ment given by a licensed dealer in agricultural products as hereinbefore provided may enter a complaint 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.

    
    

13. Section 604.21(2) provides that the Department of Agriculture and Consumer Services shall send notice of the filing of the complaint and a copy of the complaint to both the dealer and the surety company, if the facts alleged in the complaint warrant such action. The notice must provide the dealer with a reasonable time within which to answer the complaint by either admitting or denying the allegations set forth in the complaint. Section 604.21(4) provides in pertinent part as follows:

    
    

    If the department determines that the complaint has not been established, the order shall, among other things, dismiss the proceeding. If the department determines that the allegations of the complaint have been established, it shall enter its findings of fact accordingly and thereupon enter its order adjudicating the amount of indebtedness due to be paid by the dealer to the complainant.

    
    

14. The facts alleged by petitioner in his complaint were essentially that Mr. Dimaria, while acting as petitioner's salesman, sold watermelons to A. J. Sales Company, that Mr. Dimaria advised A. J. Sales Company that petitioner would not ride the load, and that a price of four cents a pound was agreed upon. Respondent denied the complaint as valid and specifically disputed the terms and conditions of the sale. A. J. Sales Company alleged that the terms of purchase were "F.O.B. upon acceptance at destination." In its response to the complaint,

    A. J. Sales Company also contended that petitioner should have to pay the freight bill and the dumping charges for the watermelon.

    
    

15. Petitioner has the burden of establishing the facts alleged in his complaint. In other words, "petitioner has the burden of proving by a preponderance of the evidence that respondent defaulted on its agreement and is indebted to petitioner ... " Ernest Leclercq, d/b/a Suncoast Farms v. Orin H. Cope Produce, Inc., d/b/a South Dade Produce, 9 F.A.L.R. 852 (1986)

16. Petitioner in this case failed to establish the allegations set forth in his complaint. In his complaint and at the hearing, petitioner admitted that he did not talk to any representatives of A. J. Sales Company concerning the terms and conditions of the sale. The undisputed evidence presented at the hearing established that Mr. Dimaria, as petitioner's agent, and A. J. Sales Company agreed that the petitioner had the risk of loss if the melons were not in good condition at the time of delivery. When the watermelons arrived in Chicago they failed a U.S.D.A. inspection. Under the terms of the agreement, petitioner was to be paid only if the watermelons were in good condition at delivery. Accordingly, A. J. Sales Company did not default on its agreement and is not indebted to petitioner.

    
    

17. Respondent argues in its proposed order that petitioner should be ordered to pay A. J. Sales Company for the freight charges incurred. However, there is no statutory authority for the department to order a producer to make payment to a dealer in a proceeding brought pursuant to Section 604.21, Florida Statutes.

RECOMMENDATION

Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that a final order be entered dismissing petitioner's

complaint.

DONE AND ENTERED this 18th day of February, 1988, in Tallahassee, Leon County, Florida.

DIANE A. GRUBBS

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 18th day of February, 1987.

APPENDIX TO RECOMMENDED ORDER

Respondent's proposed findings of fact:

1-2. Accepted in paragraphs 1 and 2.

1. Accepted in paragraph 9.

2. Accepted in paragraphs 3 and 9.

3. Rejected, not a finding of fact.

6-8. Accepted generally in paragraph 4.

1. Accepted generally in paragraph 3.

2. Accepted generally in paragraph 5.

11-12. Accepted generally in paragraphs 6 and 7.

13-15. Accepted in paragraph 8.

Petitioner's proposed findings of fact:

1. Accepted in paragraph 5.

2. Accepted in paragraphs 3 and 9.

3. Accepted in paragraph 9.

4. Rejected in that the watermelons failed to grade USDA 1 due to their condition.

5. Rejected as unnecessary and irrelevant.

COPIES FURNISHED:

Mr. Michael C. Jones Route 2, Box 26-E

Summerfield, Florida 32691

Thomas B. Smith, Esquire McGUIRE, VOORHIS & WELLS, P.A.

Two South Orange Plaza Post Office Box 633 Orlando, Florida 32802

Honorable Doyle Conner Commissioner of Agriculture The Capitol

Tallahassee, Florida 32399-0810

Ben Pridgeon, Chief

Bureau of Licensing & Bond Department of Agriculture Lab Complex

Tallahassee, Florida 32399-1650

Robert Chastain, Esquire General Counsel Department of Agriculture

513 Mayo Building

Tallahassee, Florida 32399-0800

Docket for Case No: 87-002214

Orders for Case No: 87-002214