STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

HILLSIDE SOD FARMS, INC., )

)

Petitioner, )

)

vs. ) CASE NO. 90-8018A

)

BILL HATFIELD ENTERPRISES, )

INC., and OHIO CASUALTY )

INSURANCE COMPANY, )

)

Respondents. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, Mary Clark, held a formal hearing in the above- styled case on March 6, 1991, in Orlando, Florida.

APPEARANCES

For Petitioner: Avery P. Wisdom, President

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

Geneva, Florida 32732

For Respondent: Bill Hatfield President

Bill Hatfield Enterprises, Inc. d/b/a Bill's Landscaping

1116 State Road 434

Winter Springs, Florida 32708 For Co-Respondent: (no appearance)

STATEMENT OF THE ISSUES

Petitioner claims that Respondent owes approximately $6,000.00 for the purchase of grass sod. Respondent argues that the funds claimed by Petitioner are for repairs on equipment, not sod, and that its only indebtedness to Petitioner is $6.00, mistakenly omitted from a payment.

The issue is whether Petitioner's claim is proper and cognizable under section 604.31, F.S., related to complaints of breach of agreement by a licensed dealer in agricultural products.

PRELIMINARY STATEMENT

Hillside Sod Farms, Inc., through its President, Avery Wisdom, filed its complaint with the Florida Department of Agriculture and Consumer Affairs on September 19, 1990, alleging that Bill Hatfield Enterprises, Inc., d/b/a Bill's Landscaping owes $6,230.89 for sod. The complaint named Respondent's surety, Ohio Casualty Insurance Co., as co-respondent.

The complaint was provided to Respondent, who filed a timely answer, with invoices and copies of checks, and an explanation that the unpaid balance was related to equipment repairs for which Respondent denies liability.

At the hearing each party appeared without counsel. Avery Wisdom testified on behalf of his company, Hillside Sod Farms, Inc., and presented two exhibits, a packet of invoices for sod and equipment repairs, and a packet of repair orders.

Bill Hatfield, President, and Debra Ludewig, Bookkeeper/Office Manager, testified on behalf of Bill Hatfield Enterprises, Inc. They presented three exhibits: a packet of invoices, copies of checks, and a handwritten worksheet prepared by Ms. Ludewig reconciling the checks with the invoices.

No transcript was prepared, and neither party filed proposed orders.

FINDINGS OF FACT

1. Hillside Sod Farms, Inc. (Hillside) produces grass sod for sale to landscaping firms and similar customers. Its business address is 1620 East State Road 46, Geneva, Florida.

   
   

2. Bill Hatfield Enterprises, Inc. d/b/a Bill's Landscaping (Hatfield) is a licensed dealer in agricultural products, bonded by Ohio Casualty Insurance Company, as surety. Hatfield's business address is 1116 State Road 434, Winter Springs, Florida.

   
   

3. Sometime around April 1989, Hatfield began purchasing sod from Hillside. Hatfield uses a lot of sod in his landscaping business. The arrangement between the parties was that Hillside would charge an extra 1/2 cent a square foot on his price for the sod for the use of heavy equipment (forklifts). Hillside owns twenty-seven such machines and loaned three out to Hatfield.

   
   

   The equipment stayed at Hatfield's job sites and was operated by Hatfield's crew. When the equipment broke down, Hatfield notified Hillside, who had it repaired. At least some of the repair bills were sent to Hatfield, who paid them.

   
   

4. Sometime around the end of September 1989, Avery Wisdom complained to Bill Hatfield about what he thought was an excessive amount of repairs on his equipment. He felt Hatfield's workers were rough on the machines. He suggested several alternatives, including pulling the machines off the jobs and letting Hatfield provide his own machines. He also suggested that he could purchase new equipment and let Hatfield pay all its expenses over a period of time, ultimately buying the equipment, in a lease-purchase type of arrangement. Another suggestion was that he would get the equipment overhauled and let Hatfield pay all the repair bills.

5. Suggestions one and two were apparently rejected, and it is not clear that suggestion three was formally accepted. Nothing was put in writing.

   
   

   Hatfield claims now that he offered to pay an additional 1/2 cent per square foot of sod for the use of the equipment. Avery Wisdom claims that he did raise the price of his sod, but that it was an across-the-board price increase for all of his customers due to increased costs of production, and not related to rental.

   
   

6. The October 9, 1989 invoice #13290 from Hillside to Bill's Nursery reflects an increase of $2.00 per pallet of Bahia sod and $2.50 per pallet of Floratam sod, or 1/2 cent per square foot increase.

   
   

   Debra Ludewig, the bookkeeper and general office manager for Hatfield, asked Hatfield why the price" went up, and he told her it was for the equipment.

   
   

7. Hillside continued to bill Hatfield for repairs on the equipment after October 1989. These repair costs are reflected on invoices to Bill's Landscaping and are backed up by separate special "repair order" forms itemizing each repair bill. The "special repair order" forms were also furnished to Bill's Landscaping. The repairs are listed on the invoices with a date, reference to the "special repair order" (SRO number), and a total cost which is calculated into the purchaser's running total at the bottom of the invoice.

   
   

8. Payments were made on a continuing basis by Hatfield in varying amounts, and rarely in an exact amount to correspond to the total on an invoice. That is, Bill's Nursery maintained a running balance of its account with Hillside, sometimes totalling as much as $20,000.00.

   
   

9. Each time she made a payment to Hillside, Debra Ludewig wrote the invoice number on the check. Sometimes more than one check would reflect a single invoice number.

   
   

   After October 1989, Debra Ludewig started deducting the repair bill portion of the invoices when she computed her payments to Hillside. She did this on her own initiative, without direction from Hatfield, because she understood that the 1/2 cent price increase was to cover the repairs. She did not question why the repair bills were being sent and were still being included on the invoices; she just deducted them without any notice to Hillside.

   
   

10. In the meantime, the invoices kept coming from Hillside, showing the running balance on Hatfield's account. The top of the invoices reflected the prior outstanding balance, then payments since the last invoice, then additional charges for sod, then repair orders (if any), and then the total amount outstanding. It is clear from the invoices maintained by Hillside and provided to Hatfield, that Hillside was applying Hatfield's checks to the total outstanding balance, which balance included any repair bills, as well as sod delivered.

    
    

    On the other hand, the invoice numbers referenced on Hatfield's checks to Hillside substantiate that Ms. Ludewig was unilaterally deducting sums from certain invoices, which sums corresponded to the amounts being charged for repairs.

11. It is not clear that Hillside was aware of the bookkeeping discrepancy, as nothing was said about deducting the repair bills until the parties' relationship came to an end in June 1990. Hatfield found a new sod producer, claiming that a customer complained about the quality of Hillside's sod.

    
    

12. The total amount of repairs charged by Hillside to Hatfield between October 1, 1989, and June 1990, was $7150.25, compared to approximately

    $300,000.00 for sod,.

    
    

13. The final invoice from Hillside to Bill's Landscaping reflected a total balance due of $13,872.59. This invoice #14070 is dated June 18, 1990.

    
    

    On June 21, 1990 and June 29, 1990, payments were made by Hatfield in the amounts of $3,000.70 and $4,641.00 respectively. This left a balance due of

    $6,230.89. Avery Wisdom concedes that this total should be adjusted: an invoice #13256 (9/22/89) charged $4.50 sales tax in error, and invoice #13406 (11/13/89) included a math error in the amount of $206.70. The proper adjusted total is

    $6,019.69.

    
    

14. The last invoice to include repairs to equipment is dated April 16, 1990. After that date, according to invoices dated from April 23, 1990 to June 18, 1990, Hatfield purchased $39,943.98 in sod from Hillside. The most recent

    $6,019.69, therefore, is not attributable to repairs.

    
    

    CONCLUSIONS OF LAW

    
    

15. The Division of Administrative Hearings has jurisdiction in this matter pursuant to Section 120.57(1), F.S. and Section 604.21(6), F.S.

    
    

16. Section 604.21(1), F.S. provides:

    
    

    1. Complaint; investigation; hearing. -

       1. Any person claiming himself to be damaged by an breach of the conditions of a bond or certificate of deposit assignment or agreement 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. Such complaint shall be filed within 9 months from the date of sale in instances involving direct sales or from the date on which the agricultural product was received by the dealer in agricultural products, as agent, to be sold for the producer.

    
    

17. The Florida Department of Agriculture and Consumer Affairs investigates the complaint and the Respondent is given an opportunity to answer. If the matter is controverted, a fact-finding hearing is conducted pursuant to Section 120.57(1), F.S. and Section 604.21(6), F.S.

18. If the result of the hearing is a final order of the Department finding indebtedness by the dealer, the dealer must make payment within fifteen days, or the surety becomes liable. Section 604.21(7) and (8), F.S.

    
    

19. "Agricultural products" are defined in Section 604.15(3), F.S.:

    
    

    (3) "Agricultural products" means the

    natural products of the farm, nursery, grove, orchard, vineyard, garden, and apiary (raw or manufactured); livestock; milk and milk products; poultry and poultry products; and limes (meaning the fruit Citrus aurantifolia, variety Persian, Tahiti, Bearss, or Florida Key limes) produced in the state, except tobacco, tropical foliage, sugarcane, and citrus other than limes.

    
    

20. Sod is included within this definition, but clearly repairs on equipment is not.

    
    

21. The issue is, therefore, whether Hatfield is entitled to its affirmative defense that its indebtedness is for repairs, not sod, and is therefore beyond the purview of Section 604.21, F.S.

    
    

22. Petitioner, Hillside Sod Farms, proved indebtedness by Bill Hatfield Enterprises Inc., in the amount of $6,019.69. In the absence of an agreement between the parties, which agreement was not clearly established by Hatfield, Hillside was entitled to apply each payment from Hatfield to its running account, including that portion of the account for repairs. Under this method of accounting, nine of the outstanding indebtedness is attributable to repairs.

RECOMMENDATION

Based on the foregoing, it is hereby RECOMMENDED:

That the Department enter its final order finding Respondent indebted to Petitioner in the amount of $6,019.69 and requiring payment within fifteen (15) days after the order becomes final as provided in Section 604.21(7), F.S.

DONE and ORDERED this 9th day of April, 1991, in Tallahassee, Florida.

MARY CLARK

Hearing Officer

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, FL 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 9th day of April, 1991.

COPIES FURNISHED:

Avery P. Wisdom, President Hillside Sod Farms, Inc.

1620 E. State Road 46

Geneva, FL 32732

Bill Hatfield, President

Bill Hatfield Enterprises, Inc. d/b/a Bills Landscaping

1116 State Road 434 Winter Springs, FL 32708

Ohio Casualty Insurance Company

136 North Third Street Hamilton, OH 45025

Clinton H. Coulter, Jr., Senior Counsel

Dept. of Agriculture & Consumer Services

515 Mayo Building Tallahassee, FL 32399-0800

The Honorable Bob Crawford Commissioner of Agriculture Dept. of Agriculture &

Consumer Services The Capitol, PL-10

Tallahassee, FL 32399-0810

Richard Tritschler, General Counsel

Dept. of Agriculture & Consumer Services

515 Mayo Building Tallahassee, FL 32399-0800

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

ALL PARTIES HAVE THE RIGHT TO SUBMIT WRITTEN EXCEPTIONS TO THIS RECOMMENDED ORDER. ALL AGENCIES ALLOW EACH PARTY AT LEAST 10 DAYS IN WHICH TO SUBMIT WRITTEN EXCEPTIONS. YOU SHOULD CONTACT THE AGENCY THAT WILL ISSUE THE FINAL ORDER IN THIS CASE CONCERNING AGENCY RULES ON THE DEADLINE FOR FILING EXCEPTIONS TO THIS RECOMMENDED ORDER. ANY EXCEPTIONS TO THIS RECOMMENDED ORDER SHOULD BE FILED WITH THE AGENCY THAT WILL ISSUE THE FINAL ORDER IN THIS CASE.

Docket for Case No: 90-008018

Orders for Case No: 90-008018