STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

MCCULLOUGH GRASS CORPORATION, )

)

Petitioner, )

)

vs. ) CASE NO. 94-6194A

)

LANDTECH SERVICES, INC., )

and WESTERN SURETY COMPANY, )

)

Respondents. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, James E. Bradwell, held a formal hearing in this case by video teleconference on January 27, 1995, in Tallahassee, Florida.

APPEARANCES

For Petitioner: Alton L. McCullough, President

McCullough Grass Corporation Post Office Box 67

Balm, Florida 33503 For Respondents: No appearance

STATEMENT OF THE ISSUES

Whether Respondents are indebted to Petitioner in the amount of $18,330.00 for agricultural products (bahia sod).

PRELIMINARY STATEMENT

Petitioner filed a Complaint on October 11, 1993, against Respondent, Landtech Services, Inc., for $18,330.00 based on the sale of bahia sod to Respondent. Prior thereto, on October 5, 1993, Petitioner sent a letter to Landtech advising that it would be filing a claim against its bond with Respondent, Western Surety Company, Bond Number 07266.

On November 10, 1993, Landtech filed a written response to Petitioner disputing the claim and denying responsibility to pay.

On October 25, 1993, the Department of Agriculture served Notice of Complaint filing on Respondents, Landtech and Western Surety Company.

On November 3, 1994, the Department transferred this case to the Division of Administrative Hearings for a formal hearing. Following responses from the parties, on December 23, 1994, this case was set for January 27, 1995, and this hearing ensued.

Respondents were duly noticed of the hearing, but did not appear.

The parties did not file proposed recommended orders and a transcript was not provided.

FINDINGS OF FACT

1. Petitioner, McCullough Grass Corporation, is a producer of agricultural products and is located in Balm, Florida.

   
   

2. Respondent, Landtech Services, Inc. (Landtech), is an agricultural dealer located in Largo, Florida.

   
   

3. Co-Respondent, Western Surety Company, is a surety which issued Respondent Landtech a surety bond during times material.

   
   

4. On April 19, 1993 and on May 18 and 19, 1993, Petitioner sold to Respondent Landtech 217,000 square feet of bahia sod for the total price of

   $18,330.00.

   
   

5. The terms of the sale between Petitioner and Respondent Landtech were for net payment for products sold within thirty days after the invoice date.

   
   

6. Respondent, Landtech, has paid Petitioner approximately $8,000.00 toward the purchase price of the sod leaving a balance now due and owing of

   $10,470.70.

   
   

7. Respondents, Landtech and Western Surety Company, did not appear at the hearing to contest or otherwise refute the charges alleged in Petitioner's complaint.

   
   

8. Respondent, Landtech, is indebted to Petitioner in the amount of

   $10,470.70 for bahia sod purchased from Petitioner during April and May of 1993.

   
   

   CONCLUSIONS OF LAW

   
   

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

   
   

10. The authority of the Department of Agriculture is derived from Chapter 604, Florida Statutes.

    
    

11. Petitioner, McCullough Grass Corporation, is an agricultural producer within the meaning of Section 604.05, Florida Statutes.

    
    

12. Respondent, Landtech Services, Inc., is a dealer in agricultural products within the meaning of Section 604.01, Florida Statutes.

    
    

13. During times material, Respondent, Western Surety Company, issued a bond to Respondent, Landtech, for agricultural products pursuant to Section 604.20, Florida Statutes.

    
    

14. Respondent, Landtech, is indebted to Petitioner in the amount of

$10,470.70 for the purchase of sod during April and May, 1993.

RECOMMENDATION

Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that: The Department of Agricultural issue its final order

requiring that Respondent, Landtech, pay to Petitioner the amount of $10,470.70 within fifteen (15) days of its final order.

It is further RECOMMENDED that if Respondent, Landtech, fails to comply with the order directing payment, that the Department shall call upon the surety, Western Surety Company, to pay over to the Department from funds out of the surety certificate, the amount needed to satisfy the indebtedness. 1/

RECOMMENDED this 3rd day of March, 1995, in Tallahassee, Leon County, Florida.

JAMES E. BRADWELL

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 3rd day of March, 1995.

ENDNOTES

1/ There are two other cases filed against Respondents which are not consolidated - DOAH Case Nos. 94-6192A and 94-6193A. In the event that the surety certificate is insufficient to fully pay the amount due each complainant, the Department will distribute the proceeds pro rata among the complainants.

COPIES FURNISHED:

Alton L. McCullough, President McCullough Grass Corp.

P.O. Box 67

Balm, Florida 33503

Chris Phillips

Landtech Services, Inc. 12253 62nd Street

Largo, Florida 34643

The US Trustee 4921 Memorial Hwy.

Tampa, Florida 33634

Western Surety Company

101 South Phillips Avenue Sioux Falls, SD 57192

Brenda Hyatt

Bureau of License & Bond

Dept. of Agriculture & consumer Services Mayo Building

Tallahassee, Florida 32399-0800

Richard Tritschler, Esquire

Department of Agriculture & Consumer Services The Capitol PL-10

Tallahassee, Florida 32399-0810

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 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.

================================================================= AGENCY FINAL ORDER

=================================================================

STATE OF FLORIDA

DEPARTMENT OF AGRICULTURE AND CONSUMER SERVICES

McCullough Grass Corporation, Petitioner,

vs. DOAH CASE No. 94-6194A

LB CASE No. 95-0025

Landtech Services, Inc., and Western Surety Company,

1992-93 LICENSE/BOND YEAR

Respondents.

/

FINAL ORDER

THIS CAUSE came before the Commissioner of Agriculture of the State of Florida upon the complaint of McCullough Grass Corporation against Landtech Services, Inc., and Western Surety Company, under Florida's "Agricultural License and Bond Law," Sections 604.15-604.34, Florida Statutes.

On October 14, 1993, the Petitioner, McCullough Grass Corporation, a producer of agricultural products as defined by Section 604.15(3), Florida Statutes, filed a complaint to collect $18,330 for sod sold to Respondent, Landtech Services, Inc., a licensed dealer in agricultural products.

Respondent's license for the time in question was supported by a bond, as required by Section 604.20, Florida Statutes written by Western Surety Company in the amount of $8,000. Respondent filed an answer denying the validity of the claim.

On October 29, 1993, the Respondent filed a petition for reorganization under chapter 11 of the U.S. Bankruptcy Code. On October 19, 1994, the U.S. Bankruptcy Court entered an order granting the Department's motion for relief from the automatic stay. The order allowed claims to be enforced, in rem, against the debtor's bond, but not directly against the debtor.

No hearing was requested by the parties, but because there were disputed issues of material fact, the Department referred the matter to the Division of Administrative Hearings for an administrative proceeding in accordance with the provisions of Section 120.57(1), Florida Statutes.

In the meantime, the Department received a letter from Petitioner dated November 16, 1994, stating that due to "mistakes" the claim was being amended. The letter listed 11 invoices totaling $10,470.70 with dates commencing February 1, 1993, and ending April 21, 1993. The Department forwarded a copy of this letter to the Hearing Officer with copies to all interested parties. Pursuant to Section 120.57(1)(b)(6) Florida Statutes, this letter became part of the record.

An administrative hearing was held in this matter on January 27, 1995. At the hearing, all 11 invoices were introduced into evidence on behalf of the Petitioner the same invoices listed in the November 16, 1994, letter. Based on the original complaint filing date of October 14, 1993, only one invoice, dated April 21, 1993, in the amount of $1,880 was dated within six months prior to the filing of the complaint. No one appeared at the hearing on behalf of the Respondent or Co- Respondent and no question regarding filing dates was raised.

The Hearing Officer rendered his Recommended Order on March 3, 1995, a copy of which is attached hereto as Exhibit A. The Hearing Officer concluded that the entire sum of S10,470.70 was due from the Respondent and recommended that the Department enter a final order against the Respondent in that amount. Neither party filed written exceptions to the Recommended Order.

While the conclusion of the Hearing Officer may be correct, i.e., the Respondent owes $10,470.70 to the Petitioner, the Department cannot enter a final order as recommended. There are two reason for this. First, this is an action brought pursuant to the provisions of Section 604.21(1), Florida Statutes, which provides that any person claiming to be damaged by the breach of the conditions of an agricultural dealer's bond may file a complaint with the Department against the dealer and the surety. The complaint, however, must be filed within six months from the date of sale of the agricultural product.

Since the date of sale represented by an invoice must necessarily precede the date of the invoice, it appears from the record that only invoice number 2867, dated April 21, 1993, in the amount of $1,880 represents a sale that occurred within six months of the filing of the complaint. The complaint was timely filed only as to that one invoice the rest were dated more than six months prior to October 14, 1993.

Secondly, in accordance with the bankruptcy court's order, this proceeding is limited to claims, in rem, against the bond. What the Respondent may actually owe the Petitioner is not necessarily controlling. Here, only that portion of the claim which was timely filed under Section 604.21(1), Florida Statutes, is allowable against the bond.

Upon consideration of the foregoing and the Department being otherwise fully advised in the premises, it is

ORDERED as follows:

1. Except as modified herein, the Hearing Officer's Findings of Fact are adopted as this agency's Findings of Fact.

   
   

2. Except as modified herein, the Hearing Officer's Conclusions of Law are adopted as this agency's Conclusions of Law.

   
   

3. While the Hearing Officer's conclusion that the Respondent is indebted to the Petitioner in the amount of S1O,470.70 may in fact be true, only that portion of the claim filed within the period of limitation is enforceable against the Respondent's bond. The claim against Respondent's bond is valid and enforceable only to the extent of $1,880.

   
   

4. The Hearing Officer's recommendation is further modified to acknowledge that the Respondent is involved in a bankruptcy proceeding under chapter 11 of the Bankruptcy Code and the claim cannot be enforced against Respondent at this time.

   
   

5. Co-Respondent, Western Surety Company, as surety on the Respondent's bond, is ordered to pay to Bob Crawford, Commissioner of Agriculture, for the use and benefit of Petitioner, McCullough Grass Corporation, the sum of $1,880. Western Surety Company will be notified in writing by this Department when payment in satisfaction of this Final Order is required. This Order is final and effective on the date filed with the Clerk of the Department.

Any party to these proceedings adversely affected by this Final Order is entitled to seek review of this Order pursuant to Section 120.68, Florida Statutes, and Rule 9.110, Florida Rules of Appellate Procedure. Review proceedings must be instituted by filing a petition or notice of appeal with the Agency Clerk, 5th Floor, Mayo Building, Tallahassee, Florida 32399-0800, and a copy of same with the appropriate District Court of Appeal within thirty (30) days of rendition of this Order.

DONE AND ORDERED this 9th day of June, 1995.

BOB CRAWFORD

COMMISSIONER OF AGRICULTURE

ANN H. WAINWRIGHT

Assistant Commissioner of Agriculture

Filed this 9th day June, 1995.

Joann S. Dixon Agency Clerk

COPIES FURNISHED:

Mr. A. L. McCullough, President Mr. Michael H. Dow

McCullough Grass Corporation Assistant V.P./Claim Attorney Post Office Box 67 Western Surety Company

Balm, Florida 33503 101 South Phillips Avenue Sioux Falls, South Dakota 57192

Mr. Chris Phillips, President

Landtech Services, Inc. Mr. Larry M. Foyle, Esquire

12253 62nd Street Debtor's Attorney

Largo, Florida 34643 Post Office Box 800 Tampa, Florida 33601

The U.S. Trustee

4921 Memorial Highway Mr. James E. Bradwell,

Tampa, Florida 33634 Hearing Officer

Division of Administrative

Mr. Mark Moritz Hearings

Field Representative The DeSoto Building 1230 Apalachee Parkway

Tallahassee, Florida 32399-

1550

Docket for Case No: 94-006194

Orders for Case No: 94-006194