STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

ODIS PHILLIPS and JAMES E. ) HIERS, )

)

Petitioners, )

)

vs. )

)

GROWERS MARKETINC SERVICE, ) CASE NO. 83-3013A INC., and PEERLESS INSURANCE )

COMPANY, )

)

Respondents, )

) ODIS PHILLIPS and W. D. )

HAMILTON, )

)

Petitioners, )

)

vs. )

)

GROWERS MARKETING SERVICE, ) CASE NO. 83-3014A INC., and PEERLESS INSURANCE )

COMPANY, )

)

Respondents, )

) ODIS PHILLIPS, J. CLAYTON ) PRUITT, and JAMES E. HIERS, )

)

Petitioners, )

)

vs. )

)

GROWERS MARKETING SERVICE, ) CASE NO. 83-3015A INC., and PEERLESS INSURANCE )

COMPANY, )

)

Respondents. )

)

RECOMMENDED ORDER

This order addresses three Department of Agriculture and Consumer Services cases which were consolidated for hearing. Odis Phillips, the primary Petitioner in all three cases, and the other Petitioners were joint venturers in the production of watermelons who sold their melons through Phillips to the Respondent Growers Marketing Service, Inc. ("GMS"). These cases were consolidated because the facts are essentially similar with regard to all three cases. The Petitioners are proceeding against GMS, an agricultural dealer, and the Respondent Peerless Insurance Company ("Peerless"), the bonding agent for GMS, to recover money allegedly owed to the Petitioners by GMS. This case is

governed by Chapter 604, Florida Statutes, and the formal hearing was conducted pursuant to the provisions of Section 604.21 and Section 120.57(1), Florida Statutes.

The formal hearing in this matter was held pursuant to notice on February 16, 1984, in Lakeland, Florida, by Stephen F. Dean, the assigned Hearing Officer of the Division of Administrative Hearings. These cases arose when the Petitioners filed a complaint with the Department of Agriculture and Consumer Services alleging that GMS had failed to pay them the agreed price for watermelons which GMS had received from the Petitioners. The amount claimed in Case No. 83-3013A was $5,107.30, in Case No. 83-3014A was $907.20, and in Case No. 83-3015A was $4,733.15. The Department was unsuccessful in mediating a settlement, GMS denied the allegations, and the matter was forwarded to the Division of Administrative Hearings to conduct a formal hearing.

APPEARANCES

For Petitioners: Frederick E. Landt, III, Esquire

Post Office Box 2045 Ocala, Florida 32678

For Respondents: N. Craig Massey, Esquire

1701 South Florida Avenue Post Office Box 2878 Lakeland, Florida 33806-2787

The controversy in each of these cases involves loads of watermelons received by GMS on June 27, 28 and 29, 1983, and the terms for the sale of those watermelons--specifically, what was the price agreed between the parties for the melons, did Petitioners agree to ship the melons as "rollers," and was the price contingent upon the sale of the melons by GMS.

Proposed findings of fact and conclusions of law were submitted by both the Petitioners and GMS, which proposed findings were read and considered. Those findings not incorporated herein are found to be subordinate, cumulative, immaterial, unnecessary, or not supported by the evidence.

FINDINGS OF FACT

1. The Petitioners in this matter are agricultural producers. Respondent GMS is an agricultural dealer.

   
   

2. Petitioners, through their agent, Odis Phillips, contracted to sell a portion of their watermelons to GMS through its agent, J. W. Starling. Neither side controverts that prior to June 25, 1983, the terms of their verbal contract were as follows:

   
   

   1. The watermelons were to be loaded on the shipper's truck at the field by the grower at the grower's expense;

   2. GMS would confirm a firm sale price at the time of delivery; and

   3. Settlement would be on the day following the delivery of the melons to the shipper.

3. The price was the local market price paid producers of watermelons by the shippers, which price was generally acknowledged to be one cent per pound less than the price for which the shipper could sell the melons.

   
   

4. The above terms were not renegotiated between Phillips and Starling.

   
   

5. Immediately prior to June 25, 1983, the market

   price paid to GMS by shippers had been falling at approximately one cent per pound per day. On or about June 25, 1983, William Ward, Jr., manager of GAS, called Starling and advised him that the watermelon market was falling and they no longer had any confirmed sales. Ward advised Starling that Starling could no longer quote fixed prices to the growers from whom GMS had been purchasing watermelons. This constituted a change from the way these transactions had been handled prior to that date, when the price of the melons was fixed and GMS had a confirmed sale for the melons. After that date, GMS sought to obtain the melons for sale as `rollers." A "roller" is a load of melons shipped without a confirmed purchaser, for which a sale is attempted to be negotiated while the melons are in transit. The loads of melons in question were shipped by GMS as "rollers."

   
   

6. Testimony regarding whether the Petitioners agreed to the sale of the watermelons in question as "rollers" or continued to demand a fixed price for their melons is conflicting. After June 25, 1983, Starling was in contact with Phillips and advised him that the market was off and the price was dropping. Starling felt he had advised Phillips that the melons would henceforth be "rollers" and the price contingent upon the sale price. Phillips did not feel that there had been any change, but felt that the price would continue to be based upon local market conditions. It is specifically found that the terms in Case Nos. 83-3013A and 83-3014A remained unchanged. The local market price on June 27, 1983, was six cents per pound.

   
   

7. Starling was in contact with Petitioner James E. Hiers at Starling's office on the morning of June 29, 1983. Hiers was functioning as a field supervisor, keeping a record of the number of loads, their weight, the buyer, the price, and what was paid for all loads sold involved in Case No. 83-3015A.

   
   

8. Starling testified that he advised Hiers that the price of the watermelons shipped on June 28 and 29, 1983, was not firm but would be based upon the price for which GMS could sell them. Starling testified that he told Hiers the price was contingent upon price when the melons sold. Hiers responded to Starling on June 29, 1983, that he was not selling based upon the sales price for the melons received by GMS but would sell only for a firm price at the rate other brokers were paying producers for melons in the local area. Starling did not clearly state that the melons were "rollers;" however, there was definitely no assent on the part of Hiers to ship the Petitioners' melons as "rollers."

   
   

9. Starling testified that he did not quote Hiers a price for the watermelons. Hiers testified that it was his practice not to load melons for shipment until a firm, fixed price for them was quoted by the purchaser. Heirs' testimony was the more credible and supported by others who had purchased melons from him. Each morning during the season, Heirs ascertained the market price for watermelons. His records reflect a price of four to five cents per pound for June 29, 1983, which Hiers took to be an effective price of four cents per pound. This price of four cents per pound was consistent with the local market price for watermelons on June 28 and 29, 1983.

10. After Hiers rejected the new terms tendered by Starling and restated that the terms of sale were firm price based upon local market price, GMS trucks were sent with Hiers to the field for loading.

    
    

11. It costs a farmer between two and a quarter and two and a half cents per pound to load and ship watermelons. The price eventually tendered by GMS for the melons in question was three cents per pound, or one cent less than the price quoted by Starling.

    
    

12. The following reflects by the case number, the date, weight, and tendered settlement price for each load of watermelons purchased by GMS based upon track reports; Petitioners Exhibits 1, 2 and 3; and evidence of price based

    upon the	testimony	and records of the Petitioners:
    		Case No. 83-3013A
    Date	Wght.	Local Amount Pound Market Tendered Difference Price by GMS Claimed	Total Difference Claimed
    06/27/83	40,610	$.06 $.05 $.01	$406.10
    06/27/83	43,540	.06 .05 .01	435.40
    06/27/83	47,900	.06 .04 .02	958.00
    06/27/83	41,410	.06 .05 .01	414.10
    06/27/83	40,000	.06 .05 .01	400.00
    06/28/83	41,130	.05 .04 .01	411.30
    06/28/83	42,610	.05 .03 .02	852.20
    06/28/83	40,250	.05 .03 .02	805.00
    06/28/83	42,520	.04 .03 .01	425.20
    			$ 5,107.30
    		Case No. 83-3014A
    Date	Wght.	Local Amount Pound Market Tendered Difference Price by GMS Claimed	Total Difference Claimed
    06/27/83	47,950	$.06 $.05 $.01	$479.50
    06/28/83	42,770	.05 .04 .01	427.70
    			$ 907.20
    		Case No. 83-3015A
    Wght.	Price	Local Amount Pound Market Tendered Difference by GMS Claimed Claimed	Total Difference Date
    06/28/83	44,220	$.05 $.03 $.02	$884.40
    06/28/83	44,070	.05 .03 .02	881.40
    06/29/83	46,450	.04 .03 .01	464.50
    06/29/83	41,350	.04 .03 .01	413.50
    06/29/83	39,880	.04 .03 .01	398.80
    06/29/83	42,100	.04 .035 .005	210.50

    06/29/83 40,260	.04	.04	.00	- 0 -
    06/29/83 42,420	.04	.03	.01	424.20
    				$ 3,676.30

    
    

13. In addition to the money already tendered, the Respondents owe the Petitioners the following amounts: in Case No. 83-3013A, $5,107.30; in Case No. 83-3014A, $907.20; and in -Case No. 83-3015A, $3,676.30; or a total of

    $9,690.80.

    
    

    CONCLUSIONS OF LAW

    
    

14. The Department of Agriculture and Consumer Services has authority to administer disputes between agricultural dealers and producers pursuant to the provisions of Chapter 604, Florida Statutes. This Recommended Order is entered pursuant to the provisions of Section 120.57(1), Florida Statutes.

    Specifically, the formal hearing in this matter was held under the provisions of Section 604.21, Florida Statutes, which are applicable upon the finding that Respondent GMS is a dealer in agricultural products and that the Petitioners are agricultural producers, as defined in Section 604.15, Florida Statutes. If the dealer denies the allegations contained in a complaint filed with the Department of Agriculture and Consumer Services, Section 604.21(4), supra, provides that the Department shall determine whether the allegations have been established, enter its findings of fact accordingly, and thereupon enter its order adjudicating the amount of indebtedness due to be paid by the dealer to the complainants.

    
    

15. There is no controversy that GMS received the loads of watermelons in question from the Petitioners on June 27, 28 and 29, 1983. There is no controversy that GMS is a dealer in agricultural products or that Petitioners are agricultural producers. The controversy in this matter centers around three primary factual issues, as follows:

    
    

    1. Was a firm price fixed for the watermelons delivered on June 27, 28 and 29, 1983;

    2. If so, what was the fixed price; and

    3. If not, were the melons received by GMS as "rollers."

       
       

16. Addressing the third issue first, the most credible evidence supports a finding that none of the Petitioners in any of the cases agreed to deliver their watermelons to GMS as "rollers." As to the first and second issues, the more credible evidence shows that in Case Nos. 83-3013A and 83-3014A Phillips did not agree to any alteration in the terms of sale, and in Case No. 83-3015A Hiers did not agree to any alteration in the terms of sale. By accepting watermelons from the Petitioners after their rejection of his proposed new terms, Starling assented to continue to do business on the original terms.

17..Therefore, an agreement existed between the parties for the sale and purchase of the watermelons on the terms set forth above in paragraphs 2 and 3. The course of conduct of the parties ratified their agreement. Although on or about June 25, 1983, GMS sought to alter the terms of the original agreement, neither Phillips nor Hiers agreed to the new terms.

18. It is inherent that one party to a contract cannot unilaterally alter the terms of an existing contract. The Petitioners refused the terms offered by

GMS. At that point, GMS could either refuse to purchase any more watermelons, or it could purchase melons on the previously agreed terms. GMS elected to take delivery of the melons by sending its trucks to the fields of the Petitioners and thereby assented to a continuation of the original agreement. GMS owes the Petitioners the amounts indicated in paragraph 13 above, together with any money tendered but not accepted by the Petitioners.

RECOMMENDATION

Having determined that the allegations of the complaint have been established, and having determined that Respondent GMS owes the Petitioners respectively the following sums, it is recommended that the Department of Agriculture and Consumer Services order Respondent GMS to pay the Petitioners the following amounts in these cases in addition to the amounts tendered: (a) in Case No. 83-3013A, $5,107.30; (b) in Case No. 83-3014A, $907.20; and (c) in Case No. 83-3015A, $3,676.30.

DONE and RECOMMENDED this 17th day of April, 1984, in Tallahassee, Leon County, Florida.

STEPHEN F. DEAN

Hearing Officer

Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32301

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 17th day of April, 1984.

COPIES FURNISHED:

Frederick E. Landt, III, Esquire Post Office Box 2045

Ocala, Florida 32678

M. Craig Massey, Esquire 1701 South Florida Avenue Post Office Box 2787

Lakeland, Florida 33806-2787

Glenn Bissett, Chief

Bureau of Licensing and Bond Department of Agriculture

& Consumer Services Mayo Building, Room 418

Tallahassee, Florida 32301

Robert A. Chastain, Esquire Department of Agriculture & Consumer Services

Mayo Building, Room 513 Tallahassee, Florida 32301

The Honorable Doyle Conner Commissioner of Agriculture & Consumer Services

The Capitol

Tallahassee, Florida 32301

Docket for Case No: 83-003013

Orders for Case No: 83-003013