STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

HILLSIDE SOD FARMS, INC., )

)

Petitioner, )

)

vs. ) CASE NO. 89-1986A

) ARSHAM & ASSOCIATES, INC., ) and SAFECO INSURANCE COMPANY ) OF AMERICA, )

)

Respondents. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, Don W. Davis, held a formal hearing in the above- styled case on May 24, 1989, in Orlando, Florida.

APPEARANCES

For Petitioner: Avery P. Wisdom, pro se

Vice-President

Hillside Sod Farms, Inc. 1620 E. State Road 46

Geneva, Florida 32732

For Respondent Tom Shaldjian, pro se Ashram & President

Associates: Arsham & Associates, Inc.

254 Longwood Hills Road Longwood, Florida 32750

For Respondent Safeco Insurance

Company: No Appearance

STATEMENT OF THE ISSUES

The issue for determination is whether Respondents owe Petitioner approximately $65 for one pallet of sod which Petitioner delivered to a third party building contractor's construction site at the instigation of Respondent.

PRELIMINARY STATEMENT

On or about December 21, 1988, Avery Wisdom, Petitioner's vice-president, filed a complaint with the Florida Department of Agriculture and Consumer Services, alleging that Respondents owed Petitioner the sum of $65 for a pallet of sod.

Respondent Arsham & Associates, Inc., filed an answer denying the claim.

Subsequently, the matter was transferred to the Division Of Administrative Hearings to conduct a formal hearing pursuant to Section 120.57(1), Florida Statutes.

At the hearing, Petitioner presented the testimony of two witnesses and one evidentiary exhibit. Respondent Arsham & Associates, Inc., presented the testimony of two witnesses and seven evidentiary exhibits.

No transcript of the hearing was provided by the parties. Neither Petitioner nor Respondents timely filed proposed findings of fact, and no findings had been received at the time of the preparation of this recommended order.

FINDINGS OF FACT

1. Petitioner is a producer of agricultural products, grass sod, and Respondent Arsham & Associates, Inc., (Arsham), is a dealer of such products in the course of its normal landscaping business activity.

   
   

2. Respondent Safeco Insurance Company is the bonding agent for Respondent Arsham pursuant to Section 604.20, Florida Statutes.

   
   

3. Petitioner generally deals on a cash basis with customers, unless the customer is licensed by the Department of Agriculture and Consumer Services for the sale of agricultural or horticultural products. Customers, who are licensed, may maintain an open account status with Petitioner. Respondent Arsham was such a customer.

   
   

4. For approximately two years, Respondent Arsham and Petitioner enjoyed a relationship whereby Petitioner sold Respondent Arsham grass sod for various projects. An employee of Petitioner provided sod installation services on an independent basis to Respondent Arsham for these shipments.

   
   

5. On Monday, September 26, 1988, Tom Shaldjian, the president of Respondent Arsham, discussed with Petitioner's personnel an arrangement whereby Petitioner would provide grass sod for a particular project under construction by a third party builder. Shaldjian told Petitioner that billing for the sod should be made directly to this builder, rather than to Respondent Arsham as had been the practice on previous occasions. However, Shaldjian promised Petitioner personnel that if payment for the sod was not made by the builder, then Respondent Arsham would pay the bill. Petitioner agreed with this arrangement.

   
   

6. Confirmation of the required quantity of sod, approximately 15 pallets or 7500 square feet, was made by Shaldjian on Wednesday, September 28, 1988. Petitioner delivered 15 pallets of grass sod to the building site on Friday, October 28, 1988. In his independent capacity, an employee of Petitioner provided installation services at the site for the grass sod.

   
   

7. Subsequent to the delivery and installation of the sod, Petitioner followed Respondent's instructions and submitted a bill to the construction builder for a total amount of $ 1033.50. Of this amount, $975 was allocated to

   15 pallets of sod at a cost per pallet of $65. The remainder of the amount consisted of sales tax in the amount of $58.50. The builder paid only $964.60, or an amount equal to the cost of 14 pallets plus 6 per cent sales tax.

8. Shaldjian, Respondent Arsham's president, visited the construction site after what he determined to be the completion of the grass sod installation and noted that almost one complete pallet of grass sod had not been utilized. Only a few pieces of sod were missing from the pallet. As a result of this observation, he later advised Petitioner that Respondent Arsham would not be responsible for paying the $65 deducted by the builder from the initial bill for the 15th pallet of sod.

   
   

9. Shaldjian's testimony that Petitioner worked this particular sod job alone and without the involvement of Respondents is not credited in view of other testimony establishing that Petitioner had no arrangement or contract with the builder regarding the sale of the grass sod in question beyond submission of the bill for the product, after delivery, to the builder as opposed to Respondent Arsham.

   
   

10. Testimony of personnel employed by Petitioner establishes that the sod in this instance was a perishable product in view of weather conditions at the time, making salvage of any sod remaining after the installation impossible.

    The proof fails to establish that Petitioner took possession of any grass sod remaining at the conclusion of its installation or otherwise obtained any salvage value from any of the product which may have been left over.

    
    

    CONCLUSIONS OF LAW

    
    

11. The Division of Administrative Hearings has jurisdiction over the parties and the subject matter. Section 120.57(1), Florida Statutes.

    
    

12. Dealers of agricultural products are licensed by the Department of Agriculture and Consumer Services. Section 604.17, Florida Statutes. Dealers must post a bond or other security as a precondition to licensure, insuring payment to producers for all agricultural products purchased. Sections 604.19 and 604.20, Florida Statutes. The grass sod in question is an agricultural product. Section 604.15(3), Florida Statutes.

    
    

13. Respondents failed to present any direct admissible evidence demonstrating that Petitioner dealt independently with the builder in this instance, or was acting in any manner other than as an agent for Respondent Arsham. As a result of reliance upon assurances of indemnification by Respondent Arsham in the event of nonpayment by the builder, Petitioner was damaged in the amount of $65 for the 15th pallet of sod which was delivered and for which payment was not received. This amount, plus six percent sales tax equals a total of $68.90 owed to Petitioner by Respondents.

RECOMMENDATION

Based on the foregoing, it is hereby

RECOMMENDED that a Final Order be entered requiring Respondents to pay Petitioner the sum of $68.90.

DONE AND ENTERED this 7th day of June, 1989, in Tallahassee, Leon County, Florida.

DON W. DAVIS

Hearing Officer

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 7th day of June, 1989.

COPIES FURNISHED:

Arsham & Associates, Inc.

254 Longwood Hills Road Longwood, Florida 32750

Safeco Insurance Company of America Safeco Plaza

Seattle, Washington 98185

Hillside Sod Farms, Inc. 1620 E. State Road 46 Geneva, Florida

Hon. Doyle Conner Commissioner of Agriculture The Capitol

Tallahassee, Florida 32399-1550

Mallory Horne General 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: 89-001986

Orders for Case No: 89-001986