STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

HILLANDALE FARMS, INC., )

)

Petitioner, )

)

vs. ) Case No. 98-0041A

) GULF COAST FOODSERVICE, INC., ) and UNITED PACIFIC INSURANCE ) COMPANY, )

)

Respondents. )

)

RECOMMENDED ORDER

Pursuant to notice, a formal hearing was held in this case on September 17, 1998, in Lake City, Florida, before the Division of Administrative Hearings, by its designated Administrative Law Judge, Suzanne F. Hood.

APPEARANCES

For Petitioner: Stephen C. Bullock, Esquire

Brannon, Brown, Haley, Robinson and Bullock, P.A.

10 North Columbia Street

Lake City, Florida 32056-1029

For Respondent: Saul Zalka, pro se

No Appearance

STATEMENT OF THE ISSUE

The issue is whether Respondent Gulf Coast Foodservice, Inc., or its surety, Respondent United Pacific Insurance Company, is liable for funds due to Petitioner Hillandale Farms, Inc. for the sale of agricultural products.

PRELIMINARY STATEMENT

On or about October 28, 1997, Petitioner Hillandale Farms, Inc. (Petitioner), filed a complaint with the Florida Department of Agriculture and Consumer Services (Department). The complaint alleged that Respondent Gulf Coast Foodservice, Inc. (Respondent Gulf Coast), or its surety, Respondent Union Pacific Insurance Company (Respondent Union Pacific), owed funds to Petitioner for the sale of Florida-grown agricultural products under the provisions of the Agricultural Bond and License Law, Sections

604.15 through 604.34, Florida Statutes.

Respondent Gulf Coast filed an answer on or about

December 17, 1997. The answer denied the factual allegations of the complaint and requested an administrative hearing.

On January 7, 1998, the Department referred this matter to the Division of Administrative Hearings. The undersigned issued a Notice of Hearing scheduling the case for formal hearing on March 6, 1998.

On or about February 2, 1998, Respondent Gulf Coast filed a Voluntary Petition for Relief under Chapter 11 of Title 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Southern District of Florida. After a telephone conference with the parties on March 4, 1998, the undersigned issued an order canceling the hearing and placing the case in abeyance pending the issuance of an order from the federal bankruptcy judge lifting the automatic stay of relief.

The Honorable Raymond B. Ray, United States Bankruptcy Judge, entered an Order Granting Florida Department of Agriculture Stay Relief as to Debtor's Bonds on May 7, 1998. This order lifted the automatic stay as to these proceedings to the extent of insurance limits. A copy of the federal court's order was filed with the Division of Administrative Hearings on June 4, 1998.

On June 8, 1998, the undersigned issued an order rescheduling the formal hearing for September 17, 1998. That same day, the undersigned also issued an Order of Prehearing Instructions.

At the hearing, Petitioner presented the testimony of one witness and offered one composite exhibit which was accepted into evidence. Neither of the Respondents made an appearance.

A transcript of the hearing procedure was not filed with the Division of Administrative Hearings. Petitioner advised the undersigned that it did not intend to file proposed findings of fact and conclusions of law.

FINDINGS OF FACT

1. Petitioner is a producer of agricultural products as defined by Section 604.15(5), Florida Statutes. Petitioner produces eggs on a farm that it owns in or near Lake City, Florida.

2. Respondent Gulf Coast is a dealer in agricultural products as defined by Section 604.15(1), Florida Statutes.

   Respondent Gulf Coast operates a food service distributorship in the state of Florida.

3. Eggs are agricultural products as defined in Section 604.15(3), Florida Statutes.

4. Respondent United Pacific is Respondent Gulf Coast's surety.

5. Pursuant to an agreement between Petitioner and Respondent Gulf Coast, Petitioner sold and shipped eggs to Respondent Gulf Coast from Petitioner's Hillandale-Bushnell Division. Respondent Gulf Coast initially paid thousands of dollars on invoices for shipments of eggs it received from Petitioner.

6. On August 25, 1997, Respondent Gulf Coast paid $1,287.00 on its account with Petitioner. This payment created an overpayment in the amount of $247.50 for Invoice No. 21938 dated May 31, 1997. As of October 23, 1997, Respondent Gulf Coast's account with Petitioner included the following unpaid/overpaid invoices:

   6/19/97	22144	810.00
   7/2/97	22489	1,665.00
   7/15/97	22870	1,701.00
   7/28/97	23211	2,340.00
   8/11/97	23606	2,043.00
   8/18/97	23800	1,665.00
   8/25/97	24318	1,233.00
   Total Balance	Due	$11,209.50

   Invoice Date Invoice No. Balance Due 5/31/97 21938 $ (247.50)

7. Respondent Gulf Coast currently owes Petitioner for unpaid invoices in the amount of $11,209.50.

   CONCLUSIONS OF LAW

   
   

8. The Division of Administrative Hearings has jurisdiction over this subject matter and the parties to this action pursuant to Sections 120.569, 120.57(1), and 604.21(6), Florida Statutes.

9. Section 604.15 contains the following definitions in pertinent part:

   1. '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 her 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 her or his agent or representative and the buyer.

      * * *

      (3) 'Agricultural products' means the natural products of the farm, nursery, grove, orchard, vineyard, garden, and apiary (raw or manufactured); livestock; milk and milk products; poultry and poultry products; . . .

      * * *

      (5) 'Producer' means any producer of agricultural products produced in the state.

      
      

10. Section 604.17, Florida Statutes, requires dealers in agricultural products to have a license to engage in such business.

11. Before dealers receive their licenses, they must deliver to the Department a surety bond or a certificate of deposit. The surety bond or certificate of deposit secures

    payment to producers for agricultural products sold to dealers. Section 604.20(1), Florida Statutes.

12. Section 604.21(9), Florida Statutes, states as follows:

    
    

    (9) Nothing in this section may be construed as relieving a surety company from responsibility for payment on properly established complaints against dealers involved in a federal bankruptcy proceeding and against whom the department is prohibited from entering an order.

    
    

13. Petitioner has met its burden of proving, by a preponderance of the evidence, that Respondent Gulf Coast, or its surety, Respondent United Pacific, is indebted to Petitioner for unpaid invoices in the amount of $11,209.50

RECOMMENDATION

Based upon the findings of fact and conclusions of law, it

is

RECOMMENDED:

That the Florida Department of Agriculture and Consumer

Services enter a Final Order requiring Respondent Gulf Coast, or its surety, Respondent Union Pacific, to pay Petitioner for unpaid invoices in the amount of $11,209.50.

DONE AND ENTERED this 1st day of October, 1998, in Tallahassee, Leon County, Florida.

SUZANNE F. HOOD

Administrative Law Judge

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

(850) 488-9675 SUNCOM 278-9675

Fax Filing (850) 921-6847

Filed with the Clerk of the Division of Administrative Hearings this 1st day of October, 1998.

COPIES FURNISHED:

Stephen C. Bullock, Esquire Brannon, Brown, Haley,

Robinson, and Bullock, P.A.

10 North Columbia Street

Lake City, Florida 32056-1029

Saul Zalka, President

Gulf Coast Foodservice, Inc. 8402 Lemon Road

Port Richey, Florida 34668

United Pacific Insurance Company

4 Penn Center Plaza

Philadelphia, Pennsylvania 19103

Phillip H. Hudson, III, Esquire One Biscayne Boulevard, Suite 3400 Miami, Florida 33131

Soneet R. Kapila, Chapter 7 Trustee Suite 2601

1 East Broward Boulevard

Fort Lauderdale, Florida 33301

Geoffrey S. Aaronson, Esquire Suite 1050

200 South Biscayne Boulevard Miami, Florida 33131

Steven Turner, Esquire Suite 1204

51 Southwest 1st Avenue Miami, Florida 33131

Brenda Hyatt, Chief Department of Agriculture and

Consumer Services

508 Mayo Building

Tallahassee, Florida 32399-0800

Richard Tritschler, General Counsel Department of Agriculture

and Consumer Services

The Capitol, Plaza Level 10 Tallahassee, Florida 32399-0810

Bob Crawford, Commissioner Department of Agriculture

and Consumer Services The Capitol, Plaza Leve 10

Tallahassee, Florida 32399-0810

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within

15 days from the date of 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: 98-000041

Orders for Case No: 98-000041