STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

ROSARIO AND VITO STRANO, d/b/a ) STRANO FARMS, )

)

Petitioner, )

)

vs. ) CASE NO. 88-1454A

) MAGER CORPORATION d/b/a GULF ) PROVISION COMPANY and AETNA ) CASUALTY AND SURETY COMPANY, )

)

Respondents. )

)

RECOMMENDED ORDER

Pursuant to notice, the above matter was heard by telephone conference call before the Division of Administrative Hearings by its duly designated Hearing Officer, Donald R. Alexander, on June 1, 1988.

APPEARANCES

For Petitioner: Rosario Strano

representative)

Post Office Box 3064

Florida City, Florida 33034

For Respondent Neil R. Sandler

Mager Corporation (qualified representative) d/b/a Gulf Provision 3335 Bright Avenue

Company: Jacksonville, Florida 32205

For Respondent Aetna Casualty

and Surety Company: No appearance

BACKGROUND

This matter began on September 17, 1987, when petitioner, Rosario and Vito Strano d/b/a Strano Farms, filed a sworn complaint with the Department of Agriculture and Consumer Services (agency) alleging that respondent, Mager Corporation d/b/a Gulf Provision Company, was indebted to petitioner in the amount of $618.80 for a load of tomatoes sold by petitioner to respondent on February 3, 1987. Also named a respondent in this matter was Aetna Casualty and Surety Company, the surety company which posted a surety bond with the agency on behalf of respondent. Respondent filed its answer on March 10, 1987 denying the claim.

Because of the existence of disputed facts, the matter was transmitted by the agency to the Division of Administrative Hearings on March 29, 1988 with a request that a Hearing Officer be assigned to conduct a formal hearing,

By notice of hearing dated April 14, 1988, a final hearing was scheduled for May 26, 1988, in Miami, Florida. On May 23, 1988 the case was transferred from Hearing Officer Linda M. Rigot to the undersigned. Because of the geographical distance between the parties, and by agreement of the same, a hearing by telephone conference call was conducted on June 1, 1988. At final hearing petitioner presented the testimony of Rosario Strano, its partner.

Respondent presented the testimony of its President, Neil R. Sandler. It also offered respondent's exhibit 1 which was received in evidence. There was no appearance by the surety company. The parties stipulated into evidence joint exhibits 1-6 which included various documentation pertaining to the transaction in question.

The transcript of hearing was filed on June 9, 1988. Neither party filed proposed findings of fact and conclusions of law.

The issue is whether respondent is indebted to petitioner as alleged in the complaint, and if so, in what amount.

Based upon all of the evidence, the following findings of fact are determined:

FINDINGS OF FACT

1. Petitioner, Rosario and Vito Strano d/b/a Strano Farms (Strano Farms), is a grower and shipper of fresh produce in Florida City, Florida (Dade County). Respondent, Mager Corporation d/b/a Gulf Provision Company (GPC), is an agricultural dealer in Jacksonville, Florida, subject to the licensing requirements of the Department of Agriculture and Consumer Services (agency).

   As such, GPC is obligated to obtain a dealer's license from the agency and to post a surety bond executed by a surety corporation to ensure that payment is made to producers for agricultural products purchased by the dealer. To meet this latter requirement, GPC has obtained a surety bond in an undisclosed amount from respondent, Aetna Casualty and Surety Company.

   
   

2. This controversy involves a dispute over payment for a shipment of tomatoes purchased from Strano Farms by GPC for further sale to retail vendors. The origins of the dispute began on or about February 2, 1987, when a salesman for Strano Farms accepted a telephone order from Neil R. Sandler, president of GPC, for two lots of "Poppa's Famous" tomatoes. The order was later memorialized by petitioner in a memorandum dated February 7, 1987 reflecting the following:

   
   

   Quantity	Description	Pkq.	Grade	Size	Price	Amount
   176	Tomatoes	20#	Poppa's Famous	5x6	5.60	$985.00
   176	Tomatoes	20#	Poppa's Famous	6x6	3.80	528.00
   	Palletizing				.15	52.80
   352	Total Due:					1566.40

   
   

   In addition, Strano Farms prepared a broker's memorandum on February 5, 1987 reflecting that GPC ordered two lots of "breakers," a specific grade of tomato.

   However, Strano Farms contended the reference to "breakers" was a typographical error by the clerical employee who prepared the document and that actually a different grade had been ordered. According to Rosario Strano, a partner and owner of petitioner, Sandler ordered 176 cartons each of light pink and pink tomatoes. This was corroborated by the fact that in early February, 1987 petitioner had no breaker tomatoes in stock. Sandler could not dispute this since more than fifteen months had passed since the order was placed, and he had no independent recollection of the transaction.

   
   

3. The United States Department of Agriculture has established a color classification for tomatoes that sets forth the color of tomatoes by stage of maturity. In ascending order of maturity and color, they are green, breakers, turning, pink, light red and red.

   
   

4. Homestead Tomato Packing Company, Inc. (Homestead) is the exclusive packer and shipper for Strano Farms. Homestead processed GPC's order and shipped the tomatoes to GPC on February 3, 1987. Prior to the shipment, sub-lot inspections of the produce from which GPC's shipment was drawn were made by an agency inspector on January 28 and February 2, 1987. The inspector's report indicates that the produce had a "mixed color", that there was no decay and the produce was within the tolerance limits for defects. It reflected further that the shipment met the pink and light pink standards.

   
   

5. When the tomatoes arrived in Jacksonville on February 4 or 5, Sandler inspected the produce but was not satisfied with the condition of the tomatoes. He ordered a federal inspection the same day. The report reflected that the 6x6 lot of tomatoes was within federal standards while the 5x6 lot deviated slightly because of bruising and decay. However, the tomatoes conformed to pink and light pink standards. Sandler telephoned Strano Farms and requested that a price adjustment be made. When no agreement could be reached, GPC unilaterally adjusted the amount due to $894.80 and tendered Strano Farms a check in that amount. This amount was based upon a total price of $880.00 for both lots of tomatoes, $52.80 for pelletizing, less $38.00 spent by GPC for an inspection. The total payment was $618.80 less than originally agreed upon by the parties, or the amount being claimed by petitioner.

   
   

6. Petitioner contends the adjustment made by respondent is "excessive" and not justified by the actual condition of the tomatoes. Strano Farms is willing to allow an adjustment of up to $1.15 per box for that percentage of boxes in the 5x6 lot that failed to meet standards. This adjustment is consistent with the quality of the tomatoes reflected in the federal inspection report. It is also consistent with the industry practice that any price adjustments should correspond with the condition of the produce as reflected on the federal inspection report. Because the adjustment proposed by petitioner is reasonable and consistent with the report, it should be made. Therefore, respondent should deduct $1.15 per box for those boxes in the 5x6 lot that failed to meet federal standards because of bruising and decay. It should also deduct the cost of the inspection report ($38) and pay petitioner all other amounts due.

   
   

   CONCLUSIONS OF LAW

   
   

7. The Division of Administrative Hearings has jurisdiction of the subject matter and the parties thereto pursuant to Subsection 120.57(1), Florida Statutes (1987).

8. This complaint arises under the provisions of Section 604.21, Florida Statutes (1987). Subsection (1) thereof provides that:

   
   

   Any 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 herein before provided may enter 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. Such complaint shall be filed within nine months from the date of sale in instances involving direct sales or from the date on which the agricultural product was received by the dealer in agricultural products, as agent, to be sold for the producer.

   
   

   An agricultural dealer is defined by Subsection 604.15(1) Florida Statutes (1987), to be:

   
   

   . . . any person . . . 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.

   
   

9. In the case at bar, GPC, an agricultural dealer, was acting as a broker between the producer (Strano Farms) and the various retail vendors. By its complaint, Strano Farms seeks payment for the difference between what it agreed to sell the tomatoes for ($1,513.60) and what it was actually paid by GPC ($894.80).

   
   

10. The parties have submitted this matter to the Division of Administrative Hearings for resolution of the price dispute -- therefore, the existence of a valid oral contract can be presumed. J. R. Sales, Inc. v. Earl Dicks, 521 So.2d 366 (Fla. 1st DCA 1988).

    
    

11. The evidence reflects that respondent ordered two lots of tomatoes at a specified grade, that petitioner furnished the required grade on both lots as to color and maturity but failed to meet standards as to bruising and decay on some boxes in the 5x6 lot, that an adjustment of $1.15 per box for those failing to meet standards is appropriate, and that respondent should accordingly deduct that amount plus $38.00 for the federal inspection from the total amount owed. Since respondent has already paid $894.80, he should be credited for this amount towards the balance owed.

RECOMMENDATION

Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that respondent pay petitioner the additional amount due within

thirty days from date of final order. In the event payment is not timely made, the surety company should be required to pay this amount.

DONE AND ORDERED this 14th day of June, 1988, in Tallahassee, Leon County, Florida.

DONALD R. ALEXANDER

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 14th day of June, 1988.

Docket for Case No: 88-001454

Orders for Case No: 88-001454