STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

LYKES PASCO, INC., )

)

Petitioner, )

)

vs. ) CASE NO. 94-5656

) L & M FRUIT COMPANY, INC. and ) AMERICAN SURETY & CASUALTY COMPANY )

as surety, )

)

Respondents. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, Richard Hixson, held a formal hearing in this case on April 7, 1995, in Lakeland, Florida.

APPEARANCES

For Petitioner: Patrick Lennon, Esquire

H. Vance Smith, Esquire

MacFarlane, Ausley, Ferguson & McMullen Post Office Box 1531

Tampa, Florida 33601 For Respondent: No appearance

For Co-Respondent: No appearance

STATEMENT OF THE ISSUES

The issues for determination in this case are whether Respondent as a licensed citrus fruit dealer breached an agreement with Petitioner relating to the purchase of citrus fruit during the 1991-1992 shipping season and further whether the breach of such agreement constitutes a violation of the Florida Citrus Code for which the proceeds of the citrus fruit dealer's bond should be paid to Petitioner pursuant to section 601.66, Florida Statutes.

PRELIMINARY STATEMENT

On July 30, 1992, Petitioner, Lykes Pasco Inc., in accordance with section 601.66, Florida Statutes, filed a verified complaint with the Department of Agriculture and Consumer Services (Department) alleging that Respondent, L & M Fruit Company, Inc., had breached a contract relating to the sale and delivery of citrus fruit during the 1991-1992 shipping season, and seeking payment of the proceeds of Respondent's citrus fruit dealer's bond executed by Co-Respondent, American Surety and Casualty Company, as surety. The matter was initially assigned to Robert R. Crittenden, a hearing officer designated by the Department.

Subsequent to the filing of the complaint, Bryan Paul Citrus, Inc., filed a motion to intervene and further alleged that the Department was without jurisdiction to consider this matter. On November 23, 1993, the Department entered an order finding that jurisdiction was properly established and denying the motion to intervene. The order of the Department was appealed to the Second District Court of Appeal which affirmed the Department's order on July 20, 1994, for which mandate issued on August 9, 1994.

On October 7, 1994, the Department referred this case to the Division of Administrative Hearings to conduct all further proceedings. The Department notified all parties of the referral to the Division, and no objection to the Department's referral to the Division was filed.

On October 14, 1994, an Initial Order was entered by the Division requiring the parties to file a joint response for purposes of establishing the hearing procedure in this case. By letter dated October 17, 1994, Co-Respondent American Surety and Casualty Company, filed its response stating that the complete penal sum of the citrus fruit dealer's bond had been paid in other claims, and that Co-Respondent had no further interest, and would not appear in these proceedings. On November 2, 1994 Petitioner filed its response to the Initial Order stating that efforts to contact the Respondent through Jerry M. Mitchell, Surviving Trustee and former President of the Respondent, L & M Fruit Company, Inc., a dissolved Florida corporation, had been unsuccessful.

Respondent, L & M Fruit Company, Inc., did not file any response, letter, or otherwise contact the Division as required by the Initial Order.

On February 13, 1995, the Notice of Hearing was sent to all parties. The hearing in this matter was held April 7, 1995. Petitioner appeared and presented the testimony of Jerry Sellers, senior fruit buyer for Lykes Pasco, Inc. The Petitioner also introduced one exhibit consisting of the contract between the parties. Neither Respondent nor Co-Respondent appeared at hearing. A representative of the Department, Chet Payne, was present at hearing.

On April 17, 1995, Petitioner filed proposed findings of fact and conclusions of law. A determination of each of the proposed findings of fact is attached as an Appendix hereto.

FINDINGS OF FACT

1. Petitioner, Lykes Pasco, Inc., is a Florida corporation located in Pasco County, Florida, in the business of citrus fruit processing.

   
   

2. Respondent, L & M Fruit Company, Inc., is a dissolved Florida corporation that formerly was in the business of selling and delivering citrus fruit. Jerry M. Mitchell was the past president of Respondent. During the 1991-1992 shipping season, Respondent was a licensed citrus fruit dealer in Florida.

   
   

3. Co-Respondent, American Surety and Casualty Company, a registered surety company, during the 1991-1992 shipping season executed a citrus fruit dealer's bond to Respondent in the amount of $49,000 pursuant to the provisions of section 601.66, Florida Statutes.

   
   

4. On or about September 20, 1991, Petitioner entered into an express written contract with Respondent for the sale and delivery of citrus fruit. Specifically, the contract provided for the sale and delivery of 35,000 boxes of

   early and midseason oranges at $0.85 pounds net delivered, and 35,000 boxes of valencia oranges at $1.05 pounds net delivered. The contract was executed by Tom O'Neal on behalf of Petitioner, and by Jerry M. Mitchell on behalf of Respondent.

   
   

5. Of the 35,000 boxes of early and midseason oranges provided for in the contract, Respondent delivered 21,706 boxes leaving a shortage of 13,294 boxes.

   
   

6. Of the 35,000 boxes of valencia oranges provided in the contract, Respondent delivered 1,180 boxes, leaving a shortage of 33,820 boxes.

   
   

7. Because of the Respondent's breach of contract Petitioner was required to purchase fruit solids on the open market to cover its business needs. Petitioner incurred costs in the amount of $91,980.53 to replace the fruit which Respondent failed to deliver under the terms of the contract.

   
   

8. In addition to the costs incurred by the Petitioner in replacing the fruit, Petitioner also made an advancement of funds against the contract to the Respondent. The funds advanced to Respondent which have not been repaid nor applied against the fruit delivered total $15,567.55.

   
   

9. The damages incurred by the Petitioner resulting from Respondent's breach of contract total $107,548.08.

   
   

   CONCLUSIONS OF LAW

   
   

10. The Division of Administrative Hearings has jurisdiction over the subject matter of and the parties to this action pursuant to section 120.57(1), and section 601.66, Florida Statutes.

    
    

11. Respondent breached an express written contract with Petitioner for the sale and delivery of citrus fruit during the 1991-1992 shipping season.

    
    

12. Respondent's breach of contract constitutes a violation of section 601.64(4), Florida Statutes, in that such breach of contract constitutes a failure to perform a specification or duty arising or expressly undertaken in connection with the sale or delivery of citrus fruit.

    
    

13. The amount of indebtedness owed to Petitioner by Respondent is

    $107,548.08.

    
    

14. Pursuant to section 601.66, Florida Statutes, failure of the Respondent to satisfy its indebtedness to Petitioner subjects any remaining proceeds of the citrus fruit dealer's bond executed by Co-Respondent to payment of the Petitioner's claim.

RECOMMENDATION

Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED:

That the Department of Agriculture and Consumer Services enter a final order adjudicating that the amount of indebtedness owed to Petitioner from Respondent is $107,548.08, that Respondent shall have thirty (30) days in which to satisfy such indebtedness, and that upon failure of the respondent to make satisfaction of this claim, any remaining proceeds of the citrus fruit dealer's bond executed by Co-Respondent shall be distributed to Petitioner.

RECOMMENDED in Tallahassee, Leon County, Florida, this 8th day of May, 1995.

RICHARD HIXSON

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 8th day of May, 1995.

APPENDIX

Petitioner' Proposed Findings:

Paragraphs 1 through 7 are adopted and incorporated herein.

COPIES FURNISHED:

Commissioner Bob Crawford Commissioner of Agriculture The Capitol, P1-10

Tallahassee, Florida 32399-0810

Patrick T. Lennon, Esquire

H. Vance Smith, Esquire Attorneys for

Lykes Pasco, Inc. Post Office Box 1531 Tampa, Florida 33601

Mr. Jerry M. Mitchell, President L & M Fruit Company, Inc.

Post Office Box 1048 Bartow, Florida 33880

F. J. Manuel, Jr.

Sears & Manual, P.A.

Attorneys for

American Surety & Casualty Company

511 North Ferncreek Avenue Orlando, Florida 32803

Clerk Department of Citrus Post Office Box 148

Lakeland, Florida 33802-0148

Brenda Hyatt, Chief

Bureau of Licensing & Bond Department of Agriculture

508 Mayo Building

Tallahassee, Florida 32399-0800

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

Tallahassee, Florida 32399-0810

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions to the 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 that will issue the Final Order in this case concerning their 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: 94-005656

Orders for Case No: 94-005656