STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

BUBBA HURST, )

)

Petitioner, )

)

vs. ) CASE NO. 91-7366A

) MCKAY & ASSOCIATES, INC., )

d/b/a G.S.P. FARMS and ) MADDOX FARMS and STATE FARM ) FIRE & CASUALTY CO., )

)

Respondents. )

)

RECOMMENDED ORDER

This matter came on for hearing in Bushnell, Florida, before Robert T. Benton, II, Hearing Officer of the Division of Administrative Hearings, on March 12, 1992. Nobody appeared on behalf of respondent State Farm & Casualty Company.

APPEARANCES

Julian E. Harrison, Esquire For Petitioner: 324 West Dade Avenue

Bushnell, FL 33513

John Sowa, Esquire

For Respondent: Robert L. Rehberger, Esquire

5025 North Henry Boulevard Stockbridge, GA 30281

STATEMENT OF THE ISSUE

Whether respondents owe petitioner money on account of watermelon sales?

PRELIMINARY STATEMENT

Petitioner alleged that respondent McKay & Associates, Inc. d/b/a G.S.P. Farms & Maddox Farms owed him $10,473.60 it failed to pay him for two loads of watermelons he delivered on May 29 and 30, 1991.

At the time of the alleged transactions, McKay & Associates, Inc. held a Florida agricultural dealer's license and had deposited with the Department of Agriculture and Consumer Services a surety bond, No. 90BA07908, in the amount of

$50,000 written by State Farm Fire and Casualty Company.

After petitioner filed a complaint on June 7, 1991 in accordance with Section 604.21(1), Florida Statutes (1991), and respondent filed an answer, the matter was referred to the Division of Administrative Hearings, in apparent conformity with Sections 120.57(1)(b)3. and 604.21(6), Florida Statutes (1991).

FINDINGS OF FACT

1. Last spring, her first working on behalf of respondent McKay & Associates, Inc., Pat Harper nee ' Maddox accompanied Randy Finch, the company president, to Florida to help buy and ship produce. Because petitioner Bubba Hurst had sold watermelons to Ms. Harper season before last, she sought him out again.

   
   

2. On Tuesday night, May 28, 1991, Ms. Harper orally agreed on behalf of McKay & Associates, Inc. (after Ruth Neuman, the company's secretary-treasurer, had been consulted by telephone) to pay Mr. Hurst 12 cents a pound for two truckloads of watermelons "as is." (Earlier she had seen the watermelons piled in the smaller trucks in which petitioner's crew had brought them from the fields to the melon yard, after harvesting them that day.)

   
   

3. With Wednesday morning came a truck and driver (engaged by Ms. Harper or Mr. Finch) to haul the watermelons from petitioner's melon yard to truck scales some ten miles away, then to a farm in Denton, Georgia, for crating and transshipment to their ultimate intended destinations in Maryland and Pennsylvania. After the first truck left at 4:58 that afternoon, loaded with watermelons aggregating 43,280 pounds, Petitioner's Exhibits Nos. 1 and 2, a second truck and driver arrived.

   
   

4. Mr. Finch had agreed to pay Mr. Hurst cash for the watermelons, but a complication arose before they could settle that night: Only after the crew had gone home was it discovered that the second truck was overloaded by some 9,000 pounds; and the driver refused to risk the fines he might incur by hauling an overload. As a result, it was not clear exactly how many watermelons McKay & Associates, Inc. would owe petitioner for.

   
   

5. After some discussion, Mr. Finch wrote and signed a check in petitioner's favor but left blank the amount; petitioner then endorsed and returned the check. The plan was, once the exact amount was known, for Mr. Finch to complete the check, cash it, and give Mr. Hurst the proceeds. Afterwards it occurred to Mr. Hurst that if the check were made out for more than what he was to be paid for the watermelons, he could have problems with the Internal Revenue Service.

   
   

6. Apprehensive, he asked Mr. Finch to void the check, which he did, by writing "VOID" across it. Respondent's Exhibit No. 1. Later somebody filled in an amount ($5,193.60, which corresponds to the first load, 43,280 pounds at 12 cents per) and wrote "melons no good," perhaps in anticipation of a formal administrative proceeding like the present one. The check was never negotiated.

   
   

7. On Thursday, May 30, 1991, while watermelons were being unloaded from the second truck, two men with a brief case full of cash expressed an interest in the lightening truckload. When Ms. Harper told Mr. Hurst, he said the watermelons were hers to do with as she pleased. She then sold the load to the two men for 12 cents a pound cash, and handed the money over to petitioner.

   
   

8. The excess watermelons on the second truck had been offloaded onto a third truck. Of like capacity as the first, the third truck was empty when it accompanied the overloaded truck to the melon yard on Thursday morning. With the departure of the second truck, Ms. Harper and Mr. Finch told Mr. Hurst to fill the third truck up and agreed to buy that truckload. For a while, Mr. Finch was actually "in the line" handing some watermelons along for loading in the third truck, and rejecting others. They weighed 20 pounds each on average.

9. Meanwhile, when Ms. Neuman saw the first truckload, after its arrival in Denton, Georgia, on Thursday morning, she exclaimed, "My God! These are sun scald[ed]!" At hearing, she testified she was incredulous Florida would let such watermelons leave the state.

   
   

10. Ms. Neuman telephoned Mr. Finch and told him she was sending the first load back, but that she would take the other load if it "meets federal." She also called the trucking company (then reportedly owned by the late Sam Walton), however, and told the trucker not to load any more watermelons.

    
    

11. When Evelyn Hurst, Bubba's mother, answered the telephone at the melon yard lunchtime Thursday, she was asked to tell the driver of the third truck to call home because there was an emergency. The driver made a telephone call, after which he told Mrs. Hurst nothing was wrong at his home. Then he made a second telephone call. After that call, he ordered a stop to the loading then in progress.

    
    

12. Bubba Hurst was eating when his mother called with word that no more watermelons were being loaded onto the third truck. He then telephoned the motel where Mr. Finch was staying, and inquired. Mr. Finch told him to finish loading the third truck; and later went to the melon yard and told the driver that loading should go forward.

    
    

13. Loading resumed. Later Mr. Finch raised with the driver the possibility of taking the load to New York, but the driver declined the suggestion. Around four o'clock Thursday, the renewed efforts to fill the third truck with watermelons came to an abrupt end, about 250 melons shy of a full load, and the driver, who had ordered the halt, drove away. Mr. Hurst called the motel, and spoke to Ms. Harper, in hope of obtaining the cash he had been promised for his watermelons, but to no avail.

    
    

14. The next day the first truck returned from Georgia with the watermelons whose presence on the other side of the state line had so surprised Ms. Neuman; and a federal agricultural inspector, a friend of Mr. Hurst's father, arrived at petitioner's melon yard to inspect them. Mr. Hurst told the inspector (who had been called by Ms. Neuman) that he was welcome to inspect but that the whole load had been sold "as is" and that he - Mr. Hurst - would not be paying for the inspection. Hearing this, the inspector left.

    
    

15. Disinterested testimony established that inspections by USDA- certified inspectors are routinely called for by shippers when produce is refused by buyers claiming that produce spoiled before reaching them; but that, at least in the environs of Wildwood, Florida, it is not customary to call for a federal inspection at the point from which watermelons are shipped (unless the shipment is to the Government itself.) Of course, these particular watermelons had already been to Georgia and back.

    
    

16. After the inspector left, the driver of the first truck asked that the watermelons be removed from his truck. When Mr. Hurst told him he was trespassing and asked him to leave the melon yard, the driver (or Ms. Neuman by long distance telephone call) summoned a Sumter County deputy sheriff. But the deputy sheriff, informed upon his arrival that the melon yard was a good quarter mile on the Marion County side of the county line, left to perform other duties. Still loaded, the first truck eventually left the melon yard a second time.

    CONCLUSIONS OF LAW

    
    

17. 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).

    
    

18. 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), McKay & Associates, Inc. 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).

    
    

19. Watermelons 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). State Farm Fire & Casualty Co. reportedly delivered a bond in the amount of $50,000 as a condition of the licensure of respondent McKay & Associates, Inc.

    
    

20. Petitioner has the burden to establish the allegations of his complaint by a preponderance of the evidence. 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). Even though petitioner and respondent entered into a verbal agreement only, see J.R. Sales, Inc. v. Dicks, 521 So.2d 366, 369 (Fla. 2d DCA 1988), petitioner has met his burden here.

    
    

21. Because both Mr. Finch and Ms. Harper "examined the goods . . . as fully as . . . desired . . . there [wa]s no implied warranty with regard to defects which an examination ought in the circumstances to have revealed," Section 672.316(3)(b), Florida Statutes (1991) like "sun scalding." For better or worse, the company relied on their inspection, not on Ms. Neuman's, and took delivery "as is" at petitioner's melon yard, not in Denton, Georgia.

    
    

22. Petitioner has shown that respondent is indebted to him in the amount of nine thousand seven hundred eighty seven dollars and thirty cents ($9.787.20) on account of accepting delivery of a total of 81,560 pounds of watermelons for which its agents had agreed to pay twelve cents a pound.

    
    

23. The evidence included truck scale slips showing what the first truck weighed empty and what it weighed once it was full of watermelons from petitioner's yard. The difference of 43,280 pounds is, as far as the evidence showed, also what the third truck load would have weighed if 250 melons had been added. At an average weight of 20 pounds, the 250-melon shortfall represented a 5,000 pound deficit.

    
    

24. Petitioner is entitled to an "order adjudicating the amount of indebtedness due to be paid by the dealer." Section 604.21(4), Florida Statutes (1991). The statute further provides:

    1. Any indebtedness set forth in a departmental order against a dealer shall be

       paid by the dealer within 15 days after such order becomes final.

    2. Upon the failure by a dealer to comply with an order of the department directing payment, the department shall, in instances involving bonds, call upon the surety company to pay over to the department out of the bond

       posted by the surety for such dealer . . . under the conditions of the assignment or agreement, the amount called for in the order of the department, not exceeding the amount of the bond

       . . . . If the bond . . . is insufficient to pay in full the amount due each complainant as set forth in the order of the department, the department shall distribute the proceeds pro rata among such complainants. The proceeds from a bond . . . shall be paid directly to the department to be distributed by it to successful complainants, . . . .

       
       

25. Section 604.21, Florida Statutes (1991). In the absence of other successful claimants, petitioner would be entitled to the full amount of the indebtedness, unless respondent pays him within 15 days of DACS' final order.

RECOMMENDATION

It is, accordingly, RECOMMENDED:

1. That DACS order McKay & Associates, Inc. to pay petitioner nine thousand seven hundred eighty seven dollars and twenty cents ($9,787.20) within fifteen (15) days of the final order.

   
   

2. That, in the event McKay & Associates, Inc. fails to pay petitioner nine thousand seven hundred eighty seven dollars and twenty cents ($9,787.20) within fifteen (15) days of the final order, DACS order payment by State Farm Fire & Casualty Co., to the extent necessary to satisfy the requirements of Section 604.21(8), Florida Statutes (1991), for disbursal to petitioner.

DONE and ENTERED this 7th day of May, 1992, in Tallahassee, Florida.

ROBERT T. BENTON, II

Hearing Officer

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, FL 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 7th day of May, 1992.

APPENDIX

Petitioner's proposed findings of fact Nos. 1, 2, 3, 4, 5, 8, 9 and 10 have been adopted, in substance, insofar as material.

With respect to petitioner's proposed finding of fact No. 6, see findings of fact Nos. 5 and 6.

With respect to petitioner's proposed finding of fact No. 7, petitioner said the load may have been as many as 250 melons light.

With respect to petitioner's proposed finding of fact No. 11, the value of the second load established by the evidence is $4,591.60, representing 38,280 pounds at 12 cents a pound.

Respondent's proposed finding of fact No. 1 has been adopted, in substance, insofar as material.

With respect to Respondent's proposed findings of fact Nos. 2 and 3, Ms. Neuman's testimony that she directed her agents to procure federal inspection before the first truck left has not been credited, but she did try to arrange one later.

With respect to respondent's proposed finding of fact No. 4, the second truck load was never rejected.

Respondent's proposed finding of fact No. 5 is rejected.

With respect to respondent's proposed finding of fact No. 6, see paragraphs 5 and 6 of the findings of fact.

Respondent's proposed finding of fact No. 7 is immaterial.

With respect to respondent's proposed finding of fact No. 8, Mr. Finch agreed to buy the third truckload and ordered that loading go forward even after Ms.

Neuman registered her dissatisfaction with the first load. COPIES FURNISHED:

Honorable Bob Crawford Commissioner of Agriculture Department of Agricultural and

Consumer Services The Capitol, PL-10

Tallahassee, Florida 32399-0810

Richard Tritschler, General Counsel Department of Agricultural and

Consumer Services The Capitol, PL-10

Tallahassee, Florida 32399-0810

Julian E. Harrison, Esquire

324 West Dade Avenue Bushnell, Florida 33513

John Sowa, Esquire

Robert L. Rehberger, Esquire 5025 North Henry Boulevard Stockbridge, Georgia 30281

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

ALL PARTIES HAVE THE RIGHT TO SUBMIT WRITTEN EXCEPTIONS TO THIS RECOMMENDED ORDER. ALL AGENCIES ALLOW EACH PARTY AT LEAST 10 DAYS IN WHICH TO SUBMIT WRITTEN EXCEPTIONS. YOU SHOULD CONTACT THE AGENCY THAT WILL ISSUE THE FINAL ORDER IN THIS CASE CONCERNING AGENCY RULES ON THE DEADLINE FOR FILING EXCEPTIONS

TO THIS RECOMMENDED ORDER. ANY EXCEPTIONS TO THIS RECOMMENDED ORDER SHOULD BE FILED WITH THE AGENCY THAT WILL ISSUE THE FINAL ORDER IN THIS CASE.

Docket for Case No: 91-007366

Orders for Case No: 91-007366