STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

HOWELL WALKER, d/b/a WALKER FARMS, )

)

Petitioner, )

)

vs. ) CASE NO. 92-5597A

) SOUTHERN CORPORATE PACKERS, INC., ) and AMWEST SURETY INSURANCE CO., )

)

Respondent. )

)

RECOMMENDED ORDER

A hearing was held in this case in Tampa, Florida on December 15, 1992, before Arnold H. Pollock, a Hearing Officer with the Division of Administrative Hearings.

APPEARANCES

For the Petitioner: Howell J. Walker, pro se

Route 3, Box 52

Branford, Florida 32008

For the Respondent: John B. Grandoff, III, Esquire

Hill, Ward & Henderson, P.A. Suite 3700 - Barnett Plaza

101 East Kennedy Blvd. Tampa, Florida 33601

STATEMENT OF THE ISSUE

The issue for consideration is whether Respondent, Southern Corporate Packers, Inc., and its surety, are liable to Petitioner for additional payment for the sale of watermelons during the months of June and July, 1992.

PRELIMINARY MATTERS

By Complaint dated July 23, 1992, amended by letter dated August 1, 1992, Petitioner, Howell J. Walker, claims an additional $12,977.10 from the Respondent, Southern Corporate Packers, Inc., for full payment for watermelons sold by Petitioner to Respondent during the months of June and July, 1992. By Answer dated August 31, 1992, submitted subsequent to a letter to the Department dated August 24, 1992 which enclosed a check in the amount of $2,253.14 in purported final payment of the amount owed, Respondent denied any further obligation to Petitioner.

On September 11, 1992, the Department of Agriculture notified Petitioner of this payment and Respondent's position and advised that it was forwarding the matter to the Division of Administrative Hearings for appointment of a Hearing Officer. Thereafter, by Notice of Hearing dated October 13, 1992, entered after

Respondent's Response to the Initial Order, the undersigned set the matter for hearing in Tampa on December 15, 1992, at which time it was heard as scheduled.

At the hearing, Petitioner testified in his own behalf and presented the testimony of his wife, Pamela L. Walker. Petitioner also introduced Petitioner's Exhibits 1 through 3. Respondent presented the testimony of Ronald Carter, Brian Arrigo, and J. Grayson Duer, an employee, President, and Secretary/Treasurer, respectively, of Southern Corporate Packers, Inc., and introduced Respondent's Exhibits A and B.

No transcript was provided and neither party submitted Proposed Findings of Fact.

FINDINGS OF FACT

1. During June, 1993, Petitioner, Howell J. Walker, a farmer in Branford, Florida for more than 30 years, was able to sell the majority of his watermelon crop to a produce broker. That sale is not pertinent to the issues herein except in that there remained, after the sale, a substantial number of smaller melons in which his other broker apparently was not interested. This broker, however, referred him to Southern Corporate Packers, Inc., a broker with which Petitioner had not, to that time, done business.

   
   

2. Ron Carter, a buyer for the Respondent came to Petitioner's farm and agreed to buy "whatever they could use" at a "guaranteed" price of 3.5 cents per pound. Petitioner claims that he advised Mr. Carter then, that his usual practice was to get his labor costs for loading right away and get the balance at a later date. This seemed to be agreeable to Respondent and a deal was struck. Petitioner received a wire transfer of $10,000.00 from Respondent at the completion of loading on July 3, 1992, and was to get an additional

   $8,000.00 shortly thereafter, with the balance due payable soon after that. Based on the weights recorded for the melons loaded, the total price for the shipment was $30,977.10. It was not a "cash in the field" transaction.

   
   

3. Unfortunately the parties did not clearly define the exact terms of the sale. Both agree the Petitioner was to get a "guaranteed" price of 3.5 cents per pound. Petitioner contends that at no time did he agree to "ride the load", and assume the risk of loss or spoilage of the shipment. Respondent contends that by taking a "guaranteed" price, Petitioner, according to the custom of the trade, agreed to assume the risk of loss due to spoilage or shrinkage, and that the price he was to be paid was the price received by the broker after deducting for spoilage or shrinkage. Petitioner claims he shipped at least 20 truckloads, figuring from the amount of pounds he paid his help to load. However, he has loading receipts and bills of lading for only 18 truck loads. Respondent claims only 18 truckloads were shipped and, absent any further proof that the exact number exceeds 18, it is found that the number of loads shipped was 18. Of this number, one truck load was lost entirely. It completely disappeared and never arrived at the destination in Canada to which it was sent. Respondent assumed the risk of that loss and paid Petitioner for the full amount of the load.

   
   

4. There were several other loads that were "in trouble", however, for which a market could not be found at the "guaranteed" price. In each case, when Respondent was notified the load was rejected or could not be delivered, Mr. Arrigo, Respondent's President, would try to find an alternative buyer. In each case, the amount received for that load was considerably less than the expected price for a full load. When Respondent was advised that the first shipment was

   in trouble, he contacted Mr. Walker by phone with Mr. Carter, Respondent's buyer, also involved. He advised Petitioner of the situation and claims that Petitioner told him to get the best price possible. This is not unreasonable and does not, by itself, indicate Petitioner agreed to "ride the load." As to many of the others, which were delivered as sent, they, too, suffered from shrinkage in which the delivery weight was somewhat less than the shipping weight.

   
   

5. After the last shipment was dispatched and Petitioner did not receive any further payment after several phone calls to Respondent's Immokalee, Florida's office, Petitioner and his wife went there and still were not able to get a firm answer as to when they would be paid. Petitioner was ultimately able to contact Mr. Arrigo by phone and at that time was told that because he had accepted a "guaranteed" price, he was considered to be "riding the load" and assuming the risk of loss.

   
   

6. At this point one must consider the meaning of the term "guaranteed" as used in the instant context. In the produce buying business, the word, "guaranteed price" means that the grower/shipper guarantees safe delivery, and also that the buyer/broker guarantees no less than the agreed-upon price if the produce arrives in good condition, regardless of the fluctuations in the market at the time of delivery. Respondent contends, then, that if Petitioner did not want to assume the risk of spoilage/shrinkage, he should have sold at a lower, "cash at the field", price. Petitioner claims he never does this.

   
   

7. Petitioner ultimately received a check for $8,000.00 from Respondent. The check was dated July 8, 1992 but the postmark on the envelope in which it was received reflects a mailing date from Ft. Myers, Florida of July 23, 1992.

   
   

8. Petitioner claims a balance due of $12,977.10 based on a total price of

   $30,299.10 for the total weight of melons shipped, less the $10,000.00 wire transfer and the $8,000.00 check received. Respondent claims a balance due of only $2,253.14 based on a total price of $20,253.14, (total weight received on

   13 loads, plus actual price received on 3 "troubled" shipments, minus the freight charge for 2 rejected shipments), less the $10,000.00 wire transfer and

   $8,000.00 check, and forwarded a check for that amount to the Department to hold in escrow for Petitioner pending resolution of this hearing.

   
   

9. Petitioner was able to produce shipping documents for only 18 loads, of which one was unweighed. However, figuring the total weight for the other 17 shipments (753,060 pounds) and adding thereto the average weight per shipment, (44,297 pounds) indicates 797,357.64 pounds were shipped at 3.5 cents per pound. This results in a total price for the 18 loads of $27,907.52 instead of the

   $30,977.10 indicated by Mr. Walker.

   
   

10. Petitioner unequivocally denies he agreed to "ride the load" and assume the risk for loss or spoilage of any shipment. Neither Mr. Carter nor Mr. Arrigo, the only two individuals from Respondent with whom Petitioner negotiated, can specifically recall if either told Petitioner his acceptance of the "guaranteed" price of 3.5 cents per pound meant he agreed to ride the load. Notwithstanding Mr. Duer's testimony that the custom of the industry so indicates, Petitioner's clear denial, not clearly offset by any definitive evidence to the contrary, here must be accepted as the better evidence.

    CONCLUSIONS OF LAW

    
    

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

    
    

12. The burden of proof, absent a statutory directive to the contrary, is on the party asserting the affirmative of the issue of the proceeding. Antel v. Department of Professional Regulation, 522 So.2d 1056 (Fla. 5DCA 1988); Department of Transportation v. J.W.C. Co., Inc., 396 So.2d 778 (Fla. 1DCA 1981. In this proceeding it is Howell Walker, d/b/a Walker Farms that is asserting the affirmative; that the Respondents should be required to pay it additional money for the water melons purchased. Therefore, the burden is on Walker.

    
    

13. The evidence establishes that Southern Corporate Packers, Inc. is a "dealer in agricultural products" in this state as defined in Section 640.15(1), Florida Statutes. As such it was required to be, and was, licensed by the Department of Agriculture and, as a part of the licensing activity, was required to show evidence of a surety bond or certificate of deposit as called for in Section 640.20, Florida Statutes, and Rule 5H-1.01, F.A.C..

    
    

14. Walker Farms was a "producer " of agricultural products as defined in Section 640.15(5), Florida Statutes, and as such, filed a timely complaint against Southern alleging, inter alia, that Southern had failed to completely pay for "agricultural products" sold and delivered to it, in the amount of

    $12,977.10.

    
    

15. The evidence clearly shows that the parties entered into an agreement whereby Southern would buy all Walker's leftover watermelons and pay a "guaranteed price" of 3.5 cents per pound. The issue for determination is what the implications of the term, "guaranteed price" are. Whereas Petitioner believed he would be paid no less than 3.5 cents per pound for the entire shipment at the time of dispatch, Respondent claims he guaranteed Petitioner he would get no less than 3.5 cents per pound for those melons which arrived safely and could be sold at market value and that if Petitioner wanted to provide against loss due to spoilage or shrinkage, he should have sold at a lower "cash at field" price.

    
    

16. In this case, at least one truck load was lost and some others were partially spoiled in transit resulting in a lower weight on delivery than at shipment and the requirement for a distress sale of some loads at a lower price than 3.5 cents per pound. Two loads were rejected entirely. Southern properly deducted from the amount it received for the melons it sold the advances paid to Walker at the time of shipment and thereafter. It also, however, deducted the freight charges for the two rejected shipments and it only paid Walker the price received on the troubled shipments. It paid on full for the lost shipment.

    
    

17. There was scant evidence as to the meaning of the term "guaranteed price." While Respondent claims that means the grower guarantees safe delivery and the price is guaranteed only if the shipment arrives in condition to bring top price, Petitioner claims that in his 30 years in the growing and shipping business he never agreed to "ride the load" and assume responsibility for the load until it is sold at final destination. It is clear, however, that neither of the Respondent's employees who dealt with Mr. Walker can recall if they made it clear to him that he was guaranteeing this load. In such a case where the claimant is quite sure what he said, and the Respondent's agents can't be sure if they made their conditions of sale clear to Petitioner, the weight of the

evidence falls in favor of Petitioner and it must be concluded he is entitled to recovery of additional monies. From the $27,907.52 due, Mr. Walker was paid

$20,253.14 and is therefore due an additional $7,654.38.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is, therefore:

Recommended that a Final Order be entered requiring Respondents to pay to the Petitioner, Howell Walker, d/b/a Walker Farms, Inc., the sum of $7,654.38 for watermelons sold and delivered.

RECOMMENDED in Tallahassee, Florida this 19th day of January, 1993.

ARNOLD H. POLLOCK

Hearing Officer

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 19th day of January, 1993.

COPIES FURNISHED:

Howell J. Walker Route 3, Box 52

Branford, Florida 32008

John B. Grandoff, III, Esquire Hill, Ward & Henderson, P.A. Suite 300 - Barnett Plaza

101 East Kennedy Blvd. Tampa, Florida 33601

Hon. Bob Crawford Commissioner of Agriculture The Capitol, PL-10

Tallahassee, Florida 32399-0810

Richard Tritschler General Counsel Department of Agriculture The Capitol, PL-10

Tallahassee, Florida 32399-0810

Brenda Hyatt, Chief

Bureau of Licensing & Bond Department of Agriculture

508 Mayo Building

Tallahassee, Florida 32399-0800

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. Some agencies allow a larger period within which to submit written exceptions. You should consult with the agency which will issue the Final Order in this case concerning its rules on the deadline for filing exceptions to this Recommended Order. Any exceptions to this Recommended Order should be filed with the agency which will issue the Final Order in this case.

Docket for Case No: 92-005597

Orders for Case No: 92-005597