STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

SHAN-RON SOD, INC. )

)

Petitioner, )

)

vs. ) CASE NO. 88-0156A

) RAINMAKER SOD COMPANY, INC., and ) FIDELITY & DEPOSIT CO. OF )

MARYLAND, )

)

Respondents. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, Veronica E. Donnelly, held a formal hearing on March 16, 1988, in Ft. Myers, Florida.

APPEARANCES

For Petitioner: Ronald W. Carter, President

Shan Ron Sod, Inc.

276 Cypress Street LaBelle, Florida 33935

For Respondent: James W. Jenkins, President

Rainmaker Sod Inc.

2290 Bruner Lane, South East. Ft. Myers, Florida 33912

The Petitioner, SHAN-RON SOD, INC. (hereinafter referred to as SHAN-RON) filed a complaint with the Department of Agriculture, against Respondent, RAINMAKER SOD COMPANY, INC. (RAINMAKER) and his surety, FIDELITY & DEPOSIT CO.

OF MARYLAND (FIDELITY) to enforce a bond and recover a debt due under Chapter 604, Florida Statutes, for $12,964. This sum represents he purchase price owed to SHAN-RON for bahia sod which was delivered to RAINMAKER.

When RAINMAKER and FIDELITY did not answer the complaint in the time allotted, the Commissioner of, Agriculture entered an order on November 19, 1987, in which he found was indebted to SHAN-RON for $12,964. RAINMAKER was ordered to pay the sum within fifteen days from the date this order became final. In the event that payment was not made, FIDELITY was ordered to provide payment under the conditions and provisions of its bond.

Before the Commissioner's order became final, RAINMAKER answered the original complaint on the Department of Agriculture Form L & B 14. Although the form made provisions for a respondent to request a hearing, that part of the form was left blank by RAINMAKER. The department, under the authority of Section 604.21(5), timely requested a hearing upon its order.

Before the hearing, RAINMAKER questioned the jurisdiction of the Department of Agriculture and the Division of Administrative Hearings over the parties and the subject matter involved in the hearing. It is RAINMAKER's contention that SHAN-RON does not come under the provisions of sections 604.15-604.34, Florida Statutes, because the company is not a producer as defined in Section 604.15(5). SHAN-RON does not plant the sod. Cattle ranchers allow the company to cut sod out of their fields. The ranchers plant the sod and control the tract of land. SHAN-RON is allowed to cut sod out of the fields and sell it to landscapers.

The Hearing Officer reserved ruling on the jurisdiction issue and began the hearing.

FIDELITY did not appear, nor was it represented at the proceedings. SHAN- RON and RAINMAKER each called a corporate representative as a witness to present testimony on their business dealings. Three exhibits were submitted by SHAN-RON and three were submitted by RAINMAKER. A copy of the bond was requested by the Hearing Officer from Kathleen Finn, and employee of the department, who was present at the hearing. The copy of the bond was received on March 24, 1988.

No additional evidence was submitted by the parties.

A transcript of the hearing was not ordered by the parties. The opportunity to submit Proposed Findings of Fact and Conclusions of Law was waived prior to the close of the proceedings. It was mutually agreed that the Hearing Officer would have until April 25, 1988, to file the Recommended Order because of the time needed to obtain a copy of the bond from the department.

FINDINGS OF FACT

1. On August 6, 1986, an indemnity bond was executed between RAINMAKER as principal and FIDELITY as surety. The effective dates of the bond were from October 21, 1986, to October 20, 1987.

   
   

2. The bond was required under Sections 604.15-604.30, Florida Statutes, in order for RAINMAKER to become licensed as a dealer in agricultural products in Florida. The purpose of the bond is to secure the faithful accounting for a payment to producers or their agents or representatives of the proceeds of all agricultural products handled or purchased by RAINMAKER.

   
   

3. The Petitioner, SHAN-RON, is a corporation whose address is 276 Cypress Street, La Belle, Florida. Its purpose is to conduct business by finding buyers for sod located on acreage owned by various cattle ranchers in Lee County, Florida. This practice is commonly known as "bird dogging" in the agricultural trade.

   
   

4. The way the business is conducted is as follows: SHAN-RON is contracted by sod installers to whom it sells sod in specific quantities for a fixed price. Once the oral agreement is made, SHAN-RON tells the sod installer where a sod field is located. At this point in the business transaction, the sod installer sends independent truck drivers to the designated sod field. If the sod installer is unable to locate truckers, he telephones a SHAN-RON field foreman. The foreman, as a courtesy, will check to see if any of the independent truckers currently as the sod field can haul a load for the sod installer.

   
   

5. Once a trucker is located, employees from SHAN-RON mow the grass, cut the sod, and load it onto pallets owned by SHAN-RON. The truck is loaded with pallets by SHAN-RON employees and the driver is given two copies of the load ticket, one for him and one for the sod installer. The driver delivers the sod

   and pallets to the address placed upon the load tickets. Upon delivery, the driver has the responsibility to deliver the load ticket to the business office of the sod installer. If he does not deliver the ticket, he does not get paid for hauling the sod.

   
   

6. Employees of the sod installer are usually at the delivery site. The sod is laid and the empty pallets are returned to the sod field by the truckers.

   
   

7. Every Friday, a representative of SHAN-RON personally delivers a weekly bill to the sod installer in order to collect is owed. When the money is collected, the funds are divided between the rancher whose sod was sold and

   SHAN-RON.

   
   

8. The accountability system used within the sod industry leaves room for a high margin of error at various stages. The SHAN-RON employees occasionally short pallet loads or two layers of sod. The truck drivers occasionally misnamed the sod installer to whom the sod is to be delivered. The truck drivers also occasionally do not take empty pallets under their control back to SHAN-RON. They sell the pallets and pocket the money. The sod installer is financially responsible for the pallet costs.

   
   

9. RAINMAKER is a corporation whose address is Post Office Box 7385, Ft. Myers, Florida. The company is primarily in the business of installing sod. It transacted business with SHAN-RON between November 11, 1986, and January 8, 1987. At the time of these transactions, RAINMAKER was licensed as a dealer in agricultural products supported by surety bond number 974 52 23 in the amount of

   $13,500.00.

   
   

10. SHAN-RON, through testimony and the introduction of its business records, proved a prima facie case that RAINMAKER owes $12,964.00 for the purchase of sod between November 11, 1986, and January 8, 1987.

    
    

11. Both parties Stipulated that $4,000.00 has been paid on the balance of the account which should be deducted from the balance owed SHAN-RON.

    
    

12. In rebuttal to SHAN-RON's presentation, RAINMAKER presented testimony and a business record summary which revealed that six invoices were improperly charged, against its account in the amount of $1,260.00. The record summary was based upon a comparison of load tickets against production records during the time period involved. In addition, RAINMAKER's records reveal that the two drivers, Stormy and Fred Bower, were not paid for delivering the sod to RAINMAKER under the load ticket presentation to the sod installer which was previously described as an accounting method within the business. Because RAINMAKER set forth the issue of delivery discrepancies in its answer to the complaint and competent evidence was presented, $1,260.00 should be deducted from the `balance owed.

    
    

13. SHAN-RON presented testimony that it is customary for the company to spray the sod for pest control. RAINMAKER received defective sod from SHAN-RON which contained "Creeping Charlie" weeds during the time of the deliveries in dispute. SHAN-RON was timely notified of the problem, and toad RAINMAKER to have the sod sprayed. A copy of the invoice for $300.00 was sent to SHAN-RON and has not been paid. Although the issue was not raised in RAINMAKER's answer to the complaint, it is properly before the Hearing Officer because of RAINMAKER's timely notification and cure of the defect in the product. The $300.00 should be deducted from the amount owed.

14. Testimony relating to possible sod shortages was rejected as no evidence was presented that shortages occurred in the orders for which SHAN-RON seeks payment. The customary procedure In the sod business for handling credits for shortages requires the buyer to notify the seller within a responsible length of time of the shortages. Such notification did not take place as to the orders in dispute.

    
    

15. The amount owed to SHAN-RON by RAINMAKER is $7,404.00.

    
    

16. It is officially noticed that SHAN-RON's complaint was originally filed with the department on June 19, 1987, within nine months from the date of sale.

    
    

    CONCLUSIONS OF LAW

    
    

17. The Division of Administrative Hearings has jurisdiction over the parties and the subject matter pursuant to Sections 120.57(1) and 604.21, Florida Statutes. Although SHAN-RON is not a "producer" as defined in Section 604.15(5), Florida Statutes, the company acts as the agent or representative of a producer in the sale of sod, an agricultural product. The relationship is recognized under Florida case law. Quality Fruit Buyers Inc. v. Killarney Fruit Co., 269 So.2d 424 (Fla. 2nd DCA 1971). Sections 604.15-604.34, Florida Statutes, often refer to the rights and responsibilities of "...producers or their agents or representatives..." SHAN-RON is clearly within the class of people the agricultural bonding statutes seek to protect. In addition, the statutorily required bond conditions provide for payment to the agents or representatives of a producer for agricultural products purchased by dealers such as RAINMAKER. Section 604.20(1), Florida Statutes, states:

    
    

    Any person claiming himself to be damaged by any breach of the conditions of a bond...given by a licensed dealer in agricultural products as hereinbefore

    provided may enter complaint thereof against the dealer and against the surety, if any, to the department, which complaint shall be a written statement of the facts constituting the complaint...

    
    

18. During the hearing, the Petitioner, SHAN-RON, requested interest on the outstanding balance owed by RAINMAKER. The Department of Agriculture recently held that interest is not an item under its jurisdiction in proceedings brought under Section 604.21, Florida Statutes. Oglesby Nursery, Inc. v. Garden of Eden Landscape & Nursery, Inc., 10 F.A.L.R. 624 (1987). An administrative construction of a statute is entitled to great weight and should not be overturned unless clearly erroneous. Department of Insurance v. Southeast Volusia Hospital District, et al., 438 So.2d 815 (Fla. 1983), cert denied, 466

1. 901, 104 S.Ct. 1673, 80 L.Ed. 2d 149 (1984). Therefore, interest will not be added to the balance owed by RAINMAKER.

   
   

   Based upon the foregoing Findings of Fact, it is concluded as a matter of law that RAINMAKER was a licensed and bonded agricultural dealer under Sections 604.17-604.20, Florida Statutes. FIDELITY provided the bond as surety as required in Section 604.21(1), Florida Statutes. SHAN-RON established the delivery and acceptance of an agricultural product, and proved that 7,404.00 is owed to the company by RAINMAKER for deliveries made between November 11, 1986, and January 8, 1987.

   RECOMMENDATION

   
   

   Based upon the foregoing, it is RECOMMENDED:

   1. That the Department of Agriculture enter a final order requiring the Respondent RAINMAKER to make payment to the petitioner SHAN-RON in the amount of

      $7,404.00.

      
      

   2. In the event that RAINMAKER does not comply with the department's order within fifteen days from the date it final, FIDELITY should be ordered to provide payment and the conditions and provisions of the bond furnished to RAINMAKER.

DONE and ENTERED this 12th day of April, 1988, in Tallahassee, Florida.

VERONICA E. DONNELLY

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 12th day of April, 1987.

COPIES FURNISHED:

Clinton H. Coutler, JR., Esquire Department of Agriculture

Mayo Building

Tallahassee, Florida 32399-0800

Ben Pridgeon, Chief

Bureau of License and Bond Department of Agriculture Lab Complex

Tallahassee, Florida 32399-1650

Shan Ron Sod, Inc.

276 Cypress Street LaBELLE, FLORIDA 33935

Rainmaker Sod, Inc.

2290 Bruner Lane, South East Fort Myers, Florida 33912

Fidelity & Deposit Company of Maryland

Post Office Box 1227 Baltimore, Maryland 21203

Honorable Doyle Conner Commissioner of Agriculture The Capitol

Tallahassee, Florida 32399-0810

Robert Chastain General Counsel

Department of Agriculture Mayo Building, Room 513

Tallahassee, Florida 32399-0800

Docket for Case No: 88-000156

Orders for Case No: 88-000156