STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

SUN COAST FARMS OF DADE, INC., )

)

Petitioner, )

)

vs. ) CASE NO. 88-1647A

) HOMESTEAD POLE BEAN CO-OP, INC., ) and FLORIDA FARM BUREAU MUTUAL ) INSURANCE, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, this matter was heard by William R. Dorsey, Jr., the hearing officer office designated by the Division of Administrative Hearings, in Homestead, Florida, on December 21, 1988. No transcript of the hearing was filed. The parties have waived the opportunity to file proposed findings of fact and conclusions of law. Neither party was represented by counsel.

APPEARANCES

For Petitioner, Ms. Phyllis Brnst Sun Coast Farms Vice President

of Dade, Inc.: Sun Coast Farms of Dade, Inc.

Post Office Box 3064 Florida City, Florida 33034

For Respondent, Ms. Libby Butler Homestead Pole Post Office Box 2248 Bean Co-Op, Inc. Naranja, Florida 33032

Prior to the hearing, Homestead Pole Bean Co-Op, Inc., (Homestead) submitted an undated written invoice by invoice refutation of the complaint filed by Sun Coast Farms of Dade, Inc. (Sun Coast). This refutation was received as Homestead's exhibit #1. A rebuttal from Sun Coast dated August 31, 1988, was also received in evidence.

ISSUE

The Issue is whether Homestead in indebted to Sun Coast for agriculture products sold under six invoices. Homestead maintains that the products it purchased were shipped to its customers, who either refused to accept them, or accepted them only after demanding a price concession from Homestead because of the poor condition of the products. Homestead remitted to Sun Coast the amount Homestead had received from its customers. The difference between the agreed sale price in the transactions between Sun Coast and Homestead and the price received by Homestead from its customers sets the amount at issue in this proceeding.

FINDINGS OF FACT

INVOICE 1527

1. Homestead Pole Bean bought 96 cases of fancy crook necked squash from Sun Coast on March 9, 1987, at $12.20 per crate, for a total price of $1,171.20. The squash was shipped on the same day. Homestead paid Sun Coast only $327.20, because Homestead's buyer, Veg Fresh, of Birmingham, Alabama, reported trouble with the product on March 11, 1987, when it received the squash and would not accept it at full price.

   
   

2. The employee of Homestead who handled the sale transaction, Gary Syracuse, was not available to testify. The evidence of trouble with the squash proffered by Homestead for its failure to pay the full price for the squash to Sun Coast is unpersuasive. Because no one with knowledge of the facts testified, Homestead should pay $844.00 to Sun Coast on this invoice, to bring the total paid to the agreed price of $1,171.20.

   
   

   INVOICE 1528

   
   

3. On March 9, 1987, Homestead ordered 254 cases of fancy crook necked squash from Sun Coast at a price of $14.20 per case, for a total amount due of

$3,606.80. The squash was shipped the same day. A number of Homestead's customers either refused to accept delivery of the squash or demanded a price concession due to the poor quality of the squash.

4, Seventy-five crates were delivered to Olympia Produce in Atlanta, Georgia, which notified Homestead by telephone on March 10, 1987, that it did not want to accept the produce due to its poor condition. Jack Johnson, the employee of Sun Coast who had handled the sale to Homestead, requested that Homestead's customer obtain a federal inspection on the squash delivered to it. Because other purchasers had also complained about squash Homestead had purchased under this invoice, Johnson did not request federal inspections on all the deliveries; the squash delivered to Olympia would be typical. The result of that one federal report would indicate the condition of the squash, and save the cost of obtaining federal inspections at each location to which the squash had been shipped. According to the federal inspection, the squash had decay from rhizopus rot of from 8-11 percent, which was mostly advanced. The 75 crates of squash that had been received by Olympia Produce were then dumped, i.e., used as hog feed.

1. Twenty-five crates of fancy crook necked squash from that same lot were sold by Homestead to Josey Brothers Produce in Jacksonville, Florida. When it arrived it was rejected due to wind scarring and rot. Sun Coast did not request Homestead to obtain a federal inspection on this lot of squash for the reason stated above. Homestead received no payment for this squash from Josey Brothers, and consequently remitted no payment to Sun Coast Farms of Dade.

   
   

2. Another twenty-five crates of the crook necked squash were delivered to John Shipp in Atlanta, Georgia, who notified Homestead on March 10 that the squash was unacceptable due to wind scarring. Once again Sun Coast did not request a federal inspection on this squash. The squash was regraded and handled by John Shipp for the account of Homestead. Shipp was able to sell 16 boxes of the squash after regrading it. The purchase price Shipp obtained was sent to Homestead, which in turn paid that amount to Sun Coast.

3. Forty-five cases of the squash were sent to M. G. Syracuse in Greenville, South Carolina, by Homestead. This firm notified Homestead of complaints about the squash, but ultimately paid for it in full, and Homestead remitted the full amount to Sun Coast.

   
   

4. The number of complaints which were received about the squash, coupled with the federal inspection report from Atlanta, gives rise to the inference that there was trouble with the squash Sun Coast sold to Homestead on March 9, 1987. Homestead has remitted to Sun Coast what it received for the squash. Homestead has sustained its burden of showing why it deducted $1,574.80 from the invoice price. No further payment is due to Sun Coast on Invoice 1528.

   
   

   INVOICE 1660

   
   

5. On March 19, 1987, Homestead purchased 150 crates of medium crook necked squash from Sun Coast at a price of $12.20 per crate. The squash was delivered to Homestead that same day. Homestead maintains that it received trouble reports with respect to 55 crates of the squash from Sol Salins in Washington, D.C., on March 23, who claimed the product had a bacterial soft rot. Salins paid only $4.20 per crate for the squash, a deduction in the amount paid to Homestead of $8.00 per crate. This $440 was also deducted from Homestead's remittance to Sun Coast.

   
   

6. The salesperson at Sun Coast who handled the sale to Homestead had received no trouble report from Homestead on this squash. No one with personal knowledge of the sale testified on behalf of Homestead. There is no evidence that the squash was in poor condition when Homestead purchased it on March 19, 1987. Whether Sol Salins was entitled to a reduction due to its condition on March 23, 1987, is a matter between Homestead and Mr. Salins. Homestead should pay the full price agreed upon to Sun Coast of $12.20 per crate, and therefore owes Sun Coast Farms an additional $440 on this invoice.

   
   

   INVOICES 1661-1662

   
   

7. Although Sun Coast Farms initially sought an additional $905 from Homestead Pole Bean on these invoices, at the hearing the representative of Sun Coast indicated that the parties had reached an agreement with respect to these invoices and they were no longer a subject of dispute in this case.

   
   

   INVOICE 1677

   
   

8. On March 20, 1987, Homestead ordered from Sun Coast 307 crates of medium and 200 crates of fancy crook necked squash, at prices of $10.20 and

   $12.20 per crate respectively. The squash was delivered to Homestead on March 20, 1987. Some of the squash was rejected by Homestead itself for poor quality, so that it accepted only 290 crates of medium and 117 crates of fancy squash.

   Homestead Pole Bean in turn sold 50 crates of the medium squash to Pitman Produce in Jacksonville, Florida. Homestead received a trouble report on March 23, 1987, indicating that the medium squash it received had decay. Sun Coast requested a federal Department of Agriculture inspection on the produce, but Pitman failed to obtain an inspection. Pitman instead sold the squash for $3.85 per crate and remitted this reduced amount to Homestead, which in turn paid that amount to Sun Coast. Due to the failure of Pitman to obtain the requested inspection, there is insufficient reason to believe there was any problem with this squash. Moreover, Homestead itself inspected this squash, and accepted it before it was shipped to Pitman. Homestead should pay the full agreed upon

   price of $10.20 per crate to Sun Coast Farms for the squash. The additional amount due to Sun Coast on that invoice is $317.50.

   
   

9. The written statement filed by Homestead had listed several deductions taken by its customers for squash shipped under this invoice which Homestead contended were justified. The rebuttal dated August 31, 1988, by Sun Coast accepted the deductions other than the one for the produce delivered to Pitman. Therefore, no ruling on these other deductions is necessary.

   
   

   INVOICE 1994

   
   

10. On April 16, 1987, Homestead ordered 168 crates of fancy crook necked squash from Sun Coast at an agreed upon price of $22.20 per crate. The produce was shipped the same day. Thirty crates of the squash were sold by Homestead to Tom Lange Produce of Wichita, Kansas. Libby Butler, the salesperson for Homestead, maintains that she notified the salesman at Sun Coast, Jack Johnson, of trouble reported by Lange with the produce, that Johnson did not request a federal Inspection, and that he authorized Lange to sell the product on an open basis for Sun Coast.

    
    

11. Mr. Johnson left the employment of Sun Coast some time after the transaction at issue to work fcr Homestead. Before he left, he met with officers of Sun Coast to discuss the disputes which Sun Coast had with Homestead on the invoices which are the subject of this proceeding. Contemporaneous notes made during that meeting show that Mr. Johnson told Sun Coast's officers that he had received no trouble report from Ms. Butler about the squash which Homestead ultimately sold to Tom Lange in Wichita. At the hearing, Mr. Johnson testified that he now believes that he did receive a trouble report on the squash. The Hearing Officer finds more reason to believe the earlier statement Mr. Johnson made, that he had not receive a trouble report on that squash. That statement was closer in time to the sales transaction. Mr. Johnson's current testimony probably results from confusion of the many sales transactions he has been involved in. In addition, it seems unlikely that of the 168 crates of squash purchased under invoice 1994, 30 cases would have had problems. Lastly, due to the very perishable nature of crook necked squash, even if there may have been trouble with the product when it arrived in Wichita on April 20 this would not prove that there was any problem with the squash at the time it was purchased from Sun Coast by Homestead on the 16th of April 1987. Sun Coast should receive the full purchase price of $22.20 per crate for the squash rather than the

    $12.40 which Homestead received from Mr. Lange. Homestead should pay Sun Coast an additional $294 on this Invoice.

    
    

    INVOICE 2034

    
    

12. On April 20, 1987, Homestead ordered 65 crates of fancy zucchini and

    100 crates of medium zucchini from Sun Coast at prices of $6.20 and $4.20 per crate respectively. The produce was shipped that day. Garren-Teed Produce purchased some of the zucchini from Homestead, and reported trouble with five crates of the fancy zucchini on April 24, 1987. According to records of Homestead, the salesman who handled the matter for it was not one of the employees who attended and testified at the final hearing. The evidence is insufficient to indicate that there was trouble with the five crates of zucchini, and Homestead should pay the agreed upon price of $6.20 per case for the zucchini, not the $1.00 per crate which Homestead Pole Bean received from Garren-Teed Produce. Homestead Pole Bean should pay an additional $26.00 on this invoice.

    CONCLUSIONS OF LAW

    
    

13. The Division of Administrative Hearings has jurisdiction over this matter. Section 120.57(1), Florida Statutes (1987)

    
    

14. There is no dispute that Homestead purchased agriculture products from Sun Coast Farms at the prices recounted in the foregoing findings of fact, and took possession of the products for resale, for its own account, to its own customers. These agreed facts make a prima facia case on all invoices for payment of the agreed price to Sun Coast. The burden falls on Homestead to demonstrate that there was some problem with the produce which would justify a reduction in the price it had agreed to pay. As expressed in the foregoing findings of fact, on invoice 1528, Homestead has sustained its burden of proof. On all other invoices, it has failed to demonstrate that it should not be required to pay the agreed upon price for the produce.

    
    

15. With respect to invoice 1527, Homestead should pay an additional $844; with respect to invoice 1528, no additional money is due; with respect to invoice 1660, an additional $440 is due; with respect to invoice 1677, an additional $471.50 is due; with respect to invoice 1994, an additional $294 is due; and with respect to invoice 2034, an additional $26 is due; for a total of

$2,075.50

RECOMMENDATION

It is recommended that a final order be entered by the Department of Agriculture and Consumer Services requiring Homestead Pole Bean Co-Op, Inc., to pay to Sun Coast Farms of Dade, Inc., the amount of $2,075.50, and that the surety on the agriculture products bond for Homestead Pole Bean Co-Op, Florida Farm Bureau Mutual Insurance Company, also be liable for the payment of this amount.

DONE AND ORDERED in Tallahassee, Leon County, Florida, this 5th day of January, 1989

WILLIAM R. DORSEY, JR.

Hearing Officer

Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florfflda 32399-1050

(904) 488-9765

Filed with the Clerk of the Division Administrative Hearings this 5 day of January, 1989.

COPIES FURNISHED:

Ms. Phyllis Ernst Vice President

Sun Coast Farms of Dade, Inc. Post Office Box 3064

Florida City, Florida 33034

Ms. Libby Butler Post OffIce Box 2248

Naranja, Florida 33032

The Honorable Doyle Conner Commisioner of Agriculture The Capitol

Tallahassee, Florida 32399-0810

Mallory Horne, Esquire Ceneral Counsel

513 Mayo Building

Tallahassee, Florida 32399-0800

Ben Pridgeon, Chief

Bureau of Licensing & Bond Department of Agriculture Lab Complex

Tallahassee, Florida 32399-1650

Docket for Case No: 88-001647

Orders for Case No: 88-001647