STATE OF FLORIDA

DEPARTMENT OF AGRICULTURE AND CONSUMER SERVICES

RONALDW. CARTER and ROSHAM JUMAN,

vs.

Petitioners,

DOCKET NO. 96-0034

SOUTHERN CORPORATE PACKERS, INC.,

Respondent,

and

AMWESTSURETYINSURANCE COMPANY,

Co-Respondent.

FINAL ORDER

This cause came before the Cmmnissioner of Agriculture of the State of Florida upon a complaint filed under Florida's Agricultural License and Bond Law, sections 604.15 -- 604.34, Florida Statutes, by Ronald W. Carter and Rosham Juman (Petitioners) against Southern Corporate Packers, Inc., (Southern) and Amwest Surety Insurance Company (Amwest). Southern is a licensed dealer in agricultural products and has filed a bond with the Department as required by section 604.20, Florida Statutes, in the amount of $75,000. Amwest is the surety on the bond.

The complaint alleged that Southern was indebted to Petitioners in the amount of $48,176.29 for the sale of watennelons. Respondent filed a written response to the claim denying liability.

The Department referred the matter to the Division of Administrative Hearings (DOAH) for an administrative proceedingpursuanttotheprovisions of section 120.57(1), Florida Statutes. The hearing was held on November 17, 1995, in Ft. Myers, Florida. Testimony and docmnents were received into evidence by the hearing officer. On December 20, 1995, the hearing officer rendered his Recommended Order, a copy of which

Filed June 1, 2009 4:11 PM Division of Administrative Hearings.

is attached as " Exhibit A." The hearing officer recommended that the Department enter a final order requiring Respondent to pay $10,982.17. Respondent filed written exceptions to the Recommended Order.

RULING ON EXCEPTIONS

The exception to the recommended Order filed by Respondent Southern is rendered moot by the ruling which follows.

DISCUSSION

The facts of this case establish that the Petitioners and Respondent entered into a partnership agreement whereby the partnership was to grow and sell watermelons. Some of the partners contributed cash others contributed farm equipment or services. The venture was not as successful as expected and controversies developed regarding additional contributions, expenses, and in general an accounting of the funds of the partnership. The Respondent transported the watennelon and sold them deducting certain expenses, and retained the balance of the proceeds.

111is is not a typical action between a producer and a dealer for the payment of money in the sense that they are separate parties. Section 604.15, Florida Statutes, defines a dealer in agricultural products as follows:

"Dealer in agricultural products" means any person, whether itinerant or domiciled within this state, engaged within this state in the business of purchasing, receiving, or soliciting agricultural products from the producer or his agent or representative for resale or processing for sale; acting as an agent for such producer in the sale of agricultural products for the account of the producer on a net return basis; or acting as a negotiating broker between the producer or his agent or representative and the buyer.

The Respondent did not, in a strict sense, purchase, receive, or solicit the watermelons from Petitioners; it was acting on behalf of the partnership which was also the producer of the watermelons. Respondent was acting on behalf of the same legal entity that produced the melons, the partnership itself. Neither was Respondent acting as an agent for such producer in the sale of agricultural products for the account of the producer on a net return basis or acting as a negotiating broker between the producer or his agent or representative and the buyer. Respondent does not meet the statutory definition of a dealer

2

in agricultural products under these circumstances. See also, section 604.21(1), Florida Statutes.

Nor does the transaction fall within the type sought to be protected by the bond. Section 604.20, Florida Statutes, sets forth the requirements for the dealer's bond:

Such bond or any certificate of deposit assigmnent or agreement shall be upon a form prescribed or approved by the department and shall 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.

TI1e Department agrees with the hearing officer's ruling that"... the purpose of Section 604.21(6) is to invoke the liability of the surety for misatisfied debts in the purchase and sale of agricultural products, not for unsatisfied debts among partners under a partnership agreement." The hearing officer may also be correct in conducting that the Respondent failed to pay over the proceeds from the sale of the watermelons and that the money is owed to Petitioners; however, it was the partnership that both produced and sold the melons. The Respondent was acting as a parlner of the legal entity which also included the Petitioners as its copartners. The Department lacks authority to enter a final order m1der these circumstances.

This view is supported by the general law on partnerships; as stated in 8 Fla. Jur., Business Relationships,§ 646:

TI1e general rule is that an action ex contractu at law, as distinguished from an action in equity,

is not maintainable between partners with respect to partnership trmisactions, mtless there has been an accom1ting or settlement of the partnership affairs. Until such final settlement, the general rule is that the finn, not the individual partner, is the debtor; and in that case it cannot be said correctly that there is a debt due from one partner to the other. And one partner

cannot maintain at1 action at law to recover a share of the proceeds of a sale of partnership property, the reason being that the sale by one partner of partnership property within the scope of the business operations of tl1e partnership is a sale by the partnership notwithstanding that the title to the property was in his own name.

Generally, a partner cmmot maintain atl action at law against another partner to recover a share of partnership profits, until after a full accounting to the partnership affairs. The remedy in such cases is ordinarily to be sought in a court of equity by request for an accom1ting in the settlement of the partnership affairs.

The Deparb.nent lacks jurisdiction to award a money judgment in an action between partners concerning

the accounting of partnership affairs.

IT IS ORDERED AND ADJUDGED as follows:

1. The Department adopts the hearing officer's findings of fact contained in paragraphs 1--10 of the Recommended Order.

2. For the reasons stated above, the Department rejects the hearing officer's conclusions of law contained in paragraphs 12 of the Recommended Order.

3. The complaint is dismissed for lack of jurisdiction.

REVIEW

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 Clerk, 515 Mayo Building, Tallahassee, FL 32399-0800, and a copy of the same with the appropriate District Court of Appeal

within thirty (30) days of rendition of this Order.

DONE AND ORDERED this :J7 day of ,J .::4At96.

BOB CRAWFORD

COMMISSIONER OF AGRICULTURE

Assistant Commissioner

j,t, t

Florida Department of Agriculture and Consumer Services

FILED with tl1e Clerk, tllis ;J') day of 996. . .

cy Clerk , 1

<j:Fn,J//,a,In<.,

Copies furnished to:

Ronald W. Carter and Rosham Juman 321 7th Street

LaBelle, Florida 33935

Bryan Arrigo, President Southern Corporate Packers, Inc. 424 New Market Rd.

hnmokalee, Florida 33934

Amwest Surety Insurance Company

P.O. Box 4500

Woodlands Hills, CA 91365-4500

Brenda Hyatt, Chief

Bureau of License and Bond

Department of Agriculture and Consumer Services Black Building #2

545 East Tennessee Street Tallahassee, Florida 32308

Robert E. Meale, Esq.

Hearing Officer

Division Of Administrative Hearings 1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

RONALD W. CARTER and ROSHAN JUMAN,

Petitioners,

vs. CASE NO. 95-4950A

SOUTHERN CORPORATE PACKERS, INC. and AMWEST SURETY INSURANCE COMPANY,

Respondents.

RECOMM:ENDED ORDER

Final hearing in the above-styled case was held on November 17, 1995. The parties, witnesses, and court reporter attended the hearing in Ft. Myers. Robert E. Meale, Hearing Officer of the Division of Administrative Hearings, participated by videoconference from Tallahassee.

APPEARANCES

The parties were represented at the hearing as follows: For Petitioner: Ronald W. Carter

Roshan Juman

321 7th St. LaBelle, FL 33935

For Respondent Southern Corporate Packers, Inc.:

Bryan Arrigo, President

Southern Corporate Packers, Inc.

424 New Market Rd. Immokalee, FL 33934

For Respondent American Surety Insurance Company:

no appearance

STATEMENT OF THE ISSUE

The issue in this case is whether Respondent Southern

Corporate Packers, Inc. owes Petitioners money for watermelons and, if so, how much.

PRELIMINARY STATEMENT

By Complaint dated August 15, 1995, Petitioners alleged that Respondent Southern Corporate Packers, Inc. owes them $48,176.29 for several loads of watermelons sold to it from May 5-17, 1995.

By Answer dated September 19, 1995, Respondent Southern Corporate Packers, Inc. denied the allegations.

At the heariqg, Petitioners called two witnesses and offered into evidence 21 exhibits, which were all admitted. Respondent Southern Corporate Packers, Inc. called one witness and offered into evidence no exhibits.

Neither party filed a proposed recommended order or ordered a transcript. To the extent that a post-hearing filing of Respondent Southern Corporate Packers, Inc. may be deemed a proposed recommended order, the proposed findings that are not incorporated in this recommended order have been rejected as unsupported by the record.

FINDINGS OF FACT

1. Prior to the 1995 growing season, Petitioners and Respondent Southern Corporate Packers, Inc. (Respondent) formed a partnership. Their respective interests were Respondent--40%, Petitioner Juman--38%, and Petitioner Carter--22%. Petitioners agreed to grow the watermelons, and Respondent agreed to sell them and remit the sale proceeds to the partnership after deduction for a standard one cent sales commission and freight

   costs.

2. Petitioner Juman agreed to contribute farming equipment to the partnership. Petitioner Carter agreed to contribute

   $10,000 cash, and Respondent agreed to contribute $25,000. Petitioner Juman and Respondent made their respective contributions of equipment and money, but Petitioner Carter may not have made his contribution of money.

3. In any event, the actual contributions were insuffic•ient. The agreement required each partner to advance any additional expenses based on his respective share in the partnership. Petitioner Juman and Respondent made additional contributions of equipment and cash, but Petitioner Carter did not, unless his contribution could be made in services, which the evidence does not address.

4. Problems plagued the farming operation from the start. Petitioners planted crimson sweet watermelons because Petitioner Carter could acquire these seeds inexpensively. Such watermelons are less valuable than the more-marketable sangria watermelons.

5. The watermelons grew poorly. Petitioners failed to produce a single load of large melons. Instead, they produced twelve loads of mediums and nine loads of peewees, for which demand is relatively slight.

6. As agreed, Respondent transported the watermelons to distant markets for sale. Unable to demand market prices, Respondent sold the melons for the highest possible price. In 21 transactions Respondent realized gross proceeds of $59,184.55.

7. The parties dispute the available price for the watermelons. Respondent failed to obtain inspections of the melons, as it was required to do. Despite this failure, Respondent has shown that it obtained the highest available prices for the melons.

8. In transporting the melons Respondent incurred freight charges of $22,288.76 and earned sales commissions of $6780.75. Additionally, Respondent paid an additional partnership expense of $11,799.53 in harvesting costs, which were not its obligation under the partnership agreement. Thus, the total allowable reductions are $40,880.94, leaving Responsible liable to pay the partnership the remaining $18,303.61.

9. A partnership accounting might identify additional setoffs and counterclaims available to Respondent against the partnership or one or both of the partners. However, the record does not permit such an accounting, even if the law were to provide for such a remedy in this administrative proceeding.

10. The central facts are that Respondent acquired watermelons from the partnership, sold the melons on behalf of the partnership, properly deducted from the sales proceeds certain allowable expenses in the form of freight, sales commissions, and harvesting expenses, and improperly retained the remaining $18,303.61 that it should have paid to the partnership. Less Respondent's share of 40% of the net proceeds, which Respondent may properly retain, the final balance due at this time to the two partners is $10,982.17.

    CONCLUSIONS OF LAW

11. The Division of Administrative Hearings has jurisdiction over the subject matter. Sections 120.57(1) and 604.21(6), Florida Statutes.

12. Petitioners have proved that Respondent owes them

$10,982.17 for watermelons that it sold on their behalf. An accounting of partnership finances would probably revise this amount. However, the purpose of Section 604.21(6) is to invoke the liability of the surety for unsatisfied debts in the purchase and sale of agricultural products, not for unsatisfied debts among partners under a partnership agreement. For the purpose of Section 604.21(6) Respondent has failed to pay for watermelons, and the unpaid balance is $10,982.17 after allowable deductions for sales commissions, freight, harvesting expenses, and Respondent's partnership share. The sales commissions and freight effectively reduced the net sales proceeds, and Petitioners agreed that Respondent could retain an amount equal to the harvesting expenses that Respondent advanced. It would be improper to require the surety to pay the total sum due, without reduction for Respondent's 40% share; otherwise, 40% of the surety's payment would go to the defaulting principal.

RECOMMENDATION

It is

RECOMMENDED that the Department of Agriculture and Consumer Services enter a final order requiring Respondent to pay Petitioners $10,982.17 within 10 days of the final order and,

absent such a payment, requiring Amwest Surety Insurance Company, after notice of nonpayment, to pay the same amount to Petitioners up to the total amount remaining under the bond.

ENTERED on December 20,

MEALE

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 on December 20, 1995.

COPIES FURNISHED:

Hon. Bob Crawford Commissioner of Agriculture The Capitol, PL-10 Tallahassee, FL 32399-0810

Richard Tritschler, General Counsel Department of Agriculture

The Capitol, PL-10 Tallahassee, FL 32399-0810

Brenda Hyatt, Chief

Bureau of Licensing and Bond Department of Agriculture

508 Mayo uilding Tallahassee, FL 32399-0800

Ronald W. Carter Roshan Juman

321 7th St. LaBelle, FL 33935

Bryan Arrigo, President

Southern Corporate Packers, Inc.

424 New Market Rd. Immokalee, FL 33934

Amwest Surety Insurance Co. Legal Department

P.O. Box 4500

Woodland Hills, CA 91365-4500

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.

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Docket for Case No: 95-004950

Orders for Case No: 95-004950