Mach P.O. Box 7
Petitioner alleged that respondent J.P. Mach Agri-Marketing, Inc. owed him
$40,469.35 it failed to pay him for five loads of Atlantic potatoes he delivered on May 22, 1991, and for nine loads of red potatoes he delivered on and after May 20, 1991.
After petitioner executed a complaint in accordance with Section 604.21(1), Florida Statutes (1991), and respondent J.P. Mach Agri-Marketing, Inc. filed an answer, the matter was referred to the Division of Administrative Hearings, in keeping with Sections 120.57(1)(b)3 and 604.21(6), Florida Statutes (1991).
In order to finance his 1991 crops, petitioner Daniel Methvin of Hastings, had to borrow money at the end of the year before. To do that, he was told, he needed to execute contracts for the sale of the potatoes he intended to grow.
He had been glad to have future contracts for the 1990 season, when a glut of potatoes pushed the price below three dollars a hundredweight (cwt). Respondent J.P. Mach Agri-Marketing, Inc. (or the company of which it is a subsidiary) had honored those contracts and paid considerably more than the market price for potatoes then.
On November 24, 1990, Mr. Methvin executed a contract entitled "Sales Confirmation" agreeing to sell 10,000 cwt of "REPACK REDS", Petitioner's Exhibit No. 1 ("92% US #1 INCH AND 1/2 MIN. AT LEAST 95% SKIN, Id.) to J.P. Mach, Inc. during the period April 28 to May 31, 1991, at $6.50 per cwt. Petitioner's Exhibit No. 1.
Consolidating smaller, earlier agreements, Mr. Methvin executed another contract entitled "Sales Confirmation" agreeing to sell 45,000 cwt of Atlantics ("85% U.S. #1") to J.P. Mach, Inc. during the period April 28 to May 31, 1991, at $5.75 per cwt, guaranteeing the potatoes would be suitable for chips. Petitioner's Exhibit No. 2.
With these contracts (or, as to the chipping potatoes, their predecessors) as collateral, Mr. Methvin raised the funds necessary to plant. Both contracts between Mr. Methvin and J.P. Mach, Inc. had "act of god clauses" excusing Mr. Methvin's nondelivery of potatoes he failed to harvest on account of, among other things, tornadoes or hail.
As it happened, tornadoes and hail prevented Mr. Methvin's reaping all he had sown. Petitioner only harvested 6,300 cwt of red potatoes and approximately 43,000 cwt of Atlantic potatoes.
Another result of the bad weather was extremely high market prices, at some times exceeding $20 per cwt. On April 27, 1991, J.P. Mach visited Mr. Methvin's farm and the two men discussed incentives to keep Mr. Methvin from "jumping his contract," i.e., selling his potatoes to others at the market price.
In the course of their conversation, Mr. Methvin said he needed to realize $450,000 from that year's potatoes; and Mr. Mach replied, "I will help you out", and "I will keep you in business." There was general talk of incentives and bonuses.
Eventually, Mr. Mach said he would pay a premium over the contract price if Mr. Methvin fulfilled the original contracts to the fullest extent possible, by delivering all the potatoes he had; and Mr. Mach began remitting premium prices, as promised.
On June 1, 1991, however, Mr. Methvin advised Mr. Mach of his intention to sell what remained of his harvest, some 1100 cwt of Atlantics, on the open market. When he carried through on this, Mr. Methvin realized approximately $200,000. Even at that, he lost $40,000 that season.
Meanwhile Mr. Mach and his companies were sued for $550,000 for failure to deliver potatoes; and were not paid another $172,000 for potatoes they shipped to chip plants and others to whom they had promised still more potatoes. (Mr. Methvin was not the only grower who defaulted on contracts to ship potatoes to J.P. Mach, Inc.)
As of June 1, 1991, Mr. Mach, his companies or his agents had paid Mr. Methvin "about $200,000," which was more than the contract price of the potatoes Mr. Methvin had loaded. Neither Mr. Mach nor his companies paid Mr. Methvin anything after June 1, 1991.
At hearing, Mr. Methvin calculated the value of the loads as to which nothing had been remitted as of June 1, 1991, as "a few hundred more than
$36,000," assuming the contract price plus the premium. But Mr. Mach and his companies or employees recalculated the price of the loads he had paid for by eliminating the premium, since Mr. Methvin had not, as promised on his side, delivered all his potatoes.
J.P. Mach, Inc. was duly licensed during the 1990 season. After its license lapsed, a new license was issued to J.P. Mach Agri-Marketing, Inc. on April 24, 1991. A $50,000 certificate of deposit was filed with First Performance Bank as a condition of licensure.
CONCLUSIONS OF LAW
Since the Department of Agriculture and Consumer Services referred respondent's hearing request to the Division of Administrative Hearings, in accordance with Section 120.57(1)(b)3., Florida Statutes (1991), "the division has jurisdiction over the formal proceeding." Section 120.57(1)(b)3., Florida Statutes (1991).
Potatoes are "agricultural products" because they are "natural products of the farm, nursery, grove [or] orchard," Section 604.15(3), Florida Statutes (1991), and petitioner is a producer, within the meaning of Section 604.15(5), Florida Statutes (1991).
As a "person . . . engaged within this state in the business of purchasing, receiving or soliciting agricultural products from the producer," Section 604.15(1), Florida Statutes (1991), respondent is a dealer in agricultural products for purposes of Chapter 604, Florida Statutes, required to be licensed by Sections 604.17 and 604.18, Florida Statutes (1991) and, as a condition of licensure, to "deliver to the department a surety bond or certificate of deposit in the amount of at least $3,000 . . . ." Section 604.20(1), Florida Statutes (1991).
Section 604.20(1), Florida Statutes (1991) requires that the "bond or any certificate of deposit assignment or agreement . . . be conditioned to secure the faithful accounting for and payment to producers or their agents or representatives of the proceeds of all agricultural products handled or purchased by such dealer."
Section 604.21(1), Florida Statutes (1991) authorizes any "person claiming himself to be damaged by any breach of the conditions of a bond . . . [to] 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." Petitioner has the burden to establish allegations in such complaints by a preponderance of the evidence. J.T. Cochran and R.B. Strange d/b/a C & S Tree Farm v. Beach Landscaping, Inc. d/b/a Landscape Technologies and Regency Insurance Co., No. 90-7494 (DOAH; April 19, 1991); Pine Stand Farms, Inc. v. Five Brothers Produce, Inc. and Florida Farm Bureau Mutual Insurance Co., No. 90-6460A (DOAH: Mar. 18, 1991); Florida Farm Management, Inc. v. DeBruyn Produce Co. and Peerless Insurance Co., No. 90-2966A (DOAH; Oct. 23, 1990).
In order to show entitlement to damages for breach of an agreement, petitioner must first show that an agreement supported by consideration came into existence. A mountain of precedents under Chapter 604 has buried the notion that contract interpretation and enforcement cannot occur in administrative proceedings like these. E.g., J.R. Sales, Inc. v. Dicks, 521 So.2d 366, 369 (Fla. 2d DCA 1988); John W. Stone, Inc. v. Black Gold Potato Sales, Inc. and Valley Bank & Trust Co., No. 91-250A (DOAH; July 3, 1991); J.T. Cochran and R.B. Strange d/b/a C & S Tree Farm v. Beach Landscaping, Inc. d/b/a Landscape Technologies and Regency Insurance Co., No. 90-7494 (DOAH; April 19, 1991); Pine Stand Farms, Inc. v. Five Brothers Produce, Inc. and Florida Farm Bureau Mutual Insurance Co., No. 90-6460A (DOAH: Mar. 18, 1991); Florida Farm Management, Inc. v. DeBruyn Produce Co. and Peerless Insurance Co., No. 90-2966A (DOAH; Oct. 23, 1990). To determine whether respondent "paid petitioners all proceeds that they are entitled to," any agreement between them must necessarily be construed.
In the present case, petitioner has failed to prove that a legally binding agreement requiring respondent to pay a premium over and above the contract price existed. Since petitioner was obligated to perform at the contract price, no consideration flowed to the respondent for the premium he agreed to pay to keep petitioner from reneging. An amendment to a contract, like the original contract itself, must be supported by consideration. Spann v. Baltzell, 1 Fla. 338, (1847); Scherer v. Laborers' International Union of North America, 746 F. Supp. 73 (N.D. Fla. 1988).
Even if, moreover, petitioner's reaffirmation of his original obligation could be deemed adequate consideration for the premiums, petitioner did not keep his promise to deliver as many potatoes as he could, so that any arguable consideration for the higher price failed. See Narus v. Narus, 382 So.2d 144 (Fla. 4th DCA 1980). Petitioner received full payment at the lower, originally agreed price.
