STATE OF FLORIDA DIVISION OF ADMINISTRATIVE HEARINGS

QUINCY TOMATO COMPANY, )

)

Petitioner, )

)

vs. ) Case No. 86-3480A

)

1. SAM AND SONS PRODUCE CO., )

   )

   Respondent. )

   )

   
   

   RECOMMENDED ORDER

   
   

   This case was heard pursuant to notice on December 1, 1986, in Tallahassee, Florida, by Stephen F. Dean, assigned Hearing Officer of the Division of Administrative Hearings. This case involves an action by Petitioner against the agricultural bond of the Respondent which basically is a contract dispute concerning the sale of tomatoes.

   
   

   APPEARANCES

   
   

   For Petitioner: Mr. Graves Williams

   Quincy Tomato Company, Inc. Post Office Box 245

   Quincy, Florida 32351

   
   

   For Respondent: Mr. Esau Sam

   1. Sam and Sons Produce Co., Inc. West Lake Road

Dunkirk, New York 14048

ISSUES

Whether the tomatoes sold to A. Sam and Sons Co., Inc. (Sam and Sons), conformed to the terms of the agreement of sale and whether Sam and Sons paid an appropriate adjusted price for the tomatoes.

FINDINGS OF FACT

1. On June 3, 1985, A. Sam and Sons Co., Inc. (Sam and Sons), purchased by telephone two loads of tomatoes from Quincy Tomato Co., Inc. (Quincy Tomato). The terms of this sale were $6.00 per 25 pound box F.O.B. for 85 percent or better per box, U.S. Department of Agriculture number one tomatoes of fine quality. There is contradictory testimony whether the terms included "no rain checked tomatoes." (A rain check tomato is one which has suffered damage due to a combination of rain or humidity and heat which manifests itself in damage to the shoulder of the tomato.) (Testimony of parties and Page 1, Hearing Officer Composite Exhibit 1.)

   
   

2. On June 3, 1985, two loads of tomatoes were picked up by Sam and Sons at Quincy Tomato. Of these two loads, one totalling 1520 25 pound boxes of

   tomatoes is the subject of this case. This load was received by Sam and Sons in Dunkirk, New York, on June 5, 1985, and inspected by the U.S. Department of Agriculture. The report stated, regarding the grade of the tomatoes: "Meets quality requirements, but fails to grade U.S. No. 1 account condition, now contains approximately 75 percent U.S. No. 1 quality." (Testimony of parties and page 2, Hearing Officer Composite Exhibit 1.) This inspection revealed the following percentages regarding the quality and condition of the tomatoes:

   
   

   Damage 7 percent

   Decay less than 1 percent

   Sunscald 1 percent Shoulder bruises 10 percent Skin checks 5 percent

   Total 23+ percent

   
   

3. Sam and Sons sent Quincy Tomato a telegram (See Page 3, Hearing Officer Composite Exhibit 1) on June 5, 1985, which stated as follows:

   
   

   Re UL-127 invoice #3

   
   

   Arrived June 5 1985 on trailer #811TPZ New Jersey Tomato received under protest. Tomatoes show rain check, decay, sun scaled (sic), brown spot and discoloration. Tomatoes will be reinspected by June 10 1985. An adjustment (sic) on prices will be made.

   
   

4. On June 10, 1985, the load of tomatoes was reinspected by the U.S. Department of Agriculture. This inspection report (See Page 4, Hearing Officer Composite Exhibit 1) stated with regard to grade: "Meets quality requirements but fails to grade U.S. No. 1 only account condition. Lot now contains approximately 75 percent U.S. No. 1 Quality." The report revealed the following concerning the quality and condition of the tomatoes:

   
   

   Damage 8 percent

   Decay 1 percent

   Shoulder bruises 9 percent Skin checks 9 percent

   Total 27 percent

   
   

5. When first inspected, the shipment contained over 23 percent of tomatoes which failed to meet the quality and grade standards. When reinspected on June 10, 1985, the shipment 27 percent of the tomatoes did not meet the quality and grade standards. Quincy Tomato was permitted up to 15 percent tomatoes which did not meet the quality and grading standards. The load contained an average of 10 per cent more substandard tomatoes that it was permitted to contain.

   
   

6. Sam and Sons had the right to refuse the shipment or to accept the shipment and adjust the price after notice. They elected to do the latter. Having been notified and having not responded, the Seller is deemed to have accepted these terms.

   
   

7. On September 11, 1985, Sam and Sons tendered a check for $6,266 to

   Quincy Tomato. (See Page 6, Hearing Officer Composite Exhibit 1.) This worked out to $4.1224 per 25 pound box, or a 31 percent reduction in price. Quincy Tomato accepted the check and proceeded against the agricultural bond of Sam and Sons.

   
   

   CONCLUSIONS OF LAW

   
   

8. The Department of Agriculture and Consumer Services is charged with administering the program of bonding agricultural agents pursuant to Chapter 604, Florida Statutes. A seller who has sold to a bonded agent can institutes a proceeding against the bond of the agent by filing a petition with the Department. The Division of Administrative Hearings hears these cases and this recommended order is entered pursuant to Chapter 120, Florida Statutes.

   
   

9. These cases are essentially contract cases, however, most of these transactions are on verbal contracts. There is no evidence of the intent of the parties except their actions and the collateral documents of the transaction. From this data, certain facts can be determined. The pertinent facts are:

   
   

   1. There was a contract.

      
      

   2. The original price agreed upon was $6.00 per 25 pound box.

      
      

   3. The minimum standards which the tomatoes must meet were 85 percent or more U.S. Department of Agriculture number one tomatoes.

      
      

   4. The load contained an average, based upon two inspections, of 75 percent U.S. Department of Agriculture number one tomatoes, or 10 percent more substandard, unacceptable tomatoes.

      
      

   5. Buyers tendered payment of $6,266 which is 31 percent less that the original contract price.

      
      

   6. Buyers list of "exceptional expenses" as an offset against the price are not exceptional expenses but are normal expenses which they would have had to pay had the load contained 85 percent or better U.S. Department of Agriculture number one tomatoes. See Page 5, Hearing officer Composite Exhibit 1.

      
      

10. Buyers were entitled to reduce the contract by an amount equal to the increase in substandard, unacceptable tomatoes or 10 percent. Therefore, the

$9120 contract should have been reduced to $8,208. Buyers has already paid

$6,266, therefore, they owe an additional $1,942 to Petitioner.

RECOMMENDATION

Based upon the foregoing findings of fact and conclusions of law, it is recommended that the Petitioner be permitted to recover up $1,942 from Respondents bond if this amount is not paid by Respondent to Petitioner within

30 days of the entry of the agency's final order.

DONE and ORDERED this 8th day of December 1986 in Tallahassee, Florida.

STEPHEN F. DEAN

Hearing Officer

Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904) 488-9675

FILED with the Clerk of the Division of Administrative Hearings this 8th day of December 1986.

COPIES FURNISHED:

Mr. Graves Williams

Quincy Tomato Company, Inc. Post Office Box 245

Quincy, Florida 32351

Mr. Esau Sam

A. Sam and Sons Produce Co., Inc. West Lake Road

Dunkirk, NY 14048

William C. Harris, Esquire Senior Attorney

Department of Agriculture and Consumer Services

Mayo Building

Tallahassee, Florida 32301

Ted Helms, Chief

Bureau of License and Bond

418 Mayo Building Tallahassee, Florida 32301

Joe W. Kight

Bureau of License and Bond Mayo Building

Tallahassee, Florida 32301

Honorable Doyle Conner Commissioner of Agriculture The Capitol

Tallahassee, Florida 32301

Robert Chastain, Esquire General Counsel Department of Agriculture

and Consumer Services

513 Mayo Building Tallahassee, Florida 32301

Travelers Indemnity Company One Tower Square

Hartford, Conn. 06115

Docket for Case No: 86-003480

Orders for Case No: 86-003480