STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

JOHN W. STONE, INC., )

)

Petitioner, )

)

vs. ) CASE NO. 91-0250A

) BLACK GOLD POTATO SALES, ) INC., and VALLEY BANK & ) TRUST CO., )

)

Respondent. )

)

RECOMMENDED ORDER

This matter came on for hearing in Palatka, Florida, before Robert T. Benton, II, Hearing Officer of the Division of Administrative Hearings, on April 23, 1991. Petitioner appeared through its president and principal shareholder, see Maqnolias Nursing and Convalescent Center v. Department of Health and Rehabilitative Services, Office of Licensure and Certification,

428 So. 2d 256 (Fla. 1st DCA 1982); and respondent appeared through counsel.

Petitioner filed a proposed recommended order on May 6, 1991, and respondent filed a proposed recommended order on June 5, 1991. The attached appendix addresses proposed findings of fact by number.

APPEARANCES

For Petitioner: John W. Stone

Post Office Box 74 Hastings, Florida 32045

For Respondent: John Michael Traynor, Esquire

22 Cathedral Place

St. Augustine, Florida 32084 STATEMENT OF THE ISSUE

Whether respondents or either of them owe petitioner money for two carloads of potatoes shipped on June 12, 1990?

PRELIMINARY STATEMENT

Petitioner John W. Stone, Inc. (Stone, Inc.) filed a complaint with the Department of Agriculture and Consumer Services (DACS) alleging that respondent Black Gold Potato Sales, Inc. (Black Gold) agreed to purchase two carloads of potatoes at $2.75 per hundredweight plus freight for a total of

$4,590.07, but failed to pay for the potatoes.

After respondent filed a sworn answer, the Department of Agriculture and Consumer Services forwarded the parties' papers to the Division of Administrative Hearings for formal administrative proceedings here, in accordance with Sections 120.57(1) (b)3 and 604.21(6), Florida Statutes (1990 Supp.)

Mrs. Tommie Bennett and Messrs. John W. Stone, Joseph Lee, Eugene Pete Povia, Frank R. Thomson, Jr. and Richard E. Welch testified at hearing. Petitioner offered a single composite exhibit, and respondent offered four exhibits.

FINDINGS OF FACT

1. On June 12, 1990, Stone, Inc. loaded 472.4 hundredweight of Atlantic potatoes in Hastings, Florida, on a truck owned by Gemini Transportation Services (Gemini) of Greensburg, Pennsylvania, for shipment to Mike Sell's Potato Chip Company (Sell's) in Dayton, Ohio. Stone, Inc. assigned this load number AT 1263232.

   
   

2. The same day Stone, Inc. also loaded in Hastings 477.9 hundredweight of Atlantic potatoes on a truck owned by Ranger Transportation, Inc. (Ranger) of Jacksonville, Florida, for shipment to Sell's plant in Ohio. Stone, Inc. assigned this load number AT 1263235.

   
   

3. Both loads evidently reached the potato chip plant in Dayton early on June 14, 1990. At half past nine that morning, Sell's notified Stone, Inc. by telephone that it was accepting

   76 hundredweight of load No. AT 1263235, but that it was refusing the rest of load No. AT 1263235, and all of load No. AT 1263232.

   
   

4. Stone, Inc. did not exercise its right to demand that an independent agricultural inspector examine the potatoes to

   determine whether their condition justified Sell's refusal to accept them. Instead, on the afternoon of June 14, 1990, Mr. Stone called Frank R. Thomson, Jr., vice-president of Black Gold, and told him Sell's had rejected the potatoes, but that Sell's sometimes rejected loads for no good reason.

   
   

5. There was no discussion of price or of freight charges. Mr. Thomson has never bought potatoes rejected by a buyer and knows of no other broker who has, at least without seeing them, but he agreed on Black Gold's behalf to take both loads on consignment. He told Mr. Stone he would "try to find a home for the potatoes."

   
   

6. Mr. Thomson told Mr. Stone he would send one load to Bockers Potato Chip Plant and the other to Howard Dennis' farm. For several years, the standard brokerage fee has been $0.25 a hundredweight, if a sale is consummated, but no mention was made of this in the telephone conversation. Customarily the grower bears the expense of transporting rejects.

   
   

7. Black Gold directed load No. AT 1263232 to Bockers Potato Chip Plant in Fulton, Missouri; and, when Bockers turned it down, to a repacker, Neumiller rarms, Inc., in Savanna, Illinois. There it was "dumped because of excess rot and breakdown," Respondent's Exhibit No. 1, or so Black Gold was eventually advised. Vicki McDonald said the potatoes had been "running out the back of the truck," when they reached the Bockers plant.

   
   

8. Black Gold directed load No. AT 126235, i.e., the 401.9 hundredweight that Sell's had not accepted, to the H. Dennis Potato Farm (Dennis), a repacker in Wauseon, Ohio. As was customary, Dennis reportedly unloaded the potatoes thought suitable for packaging for retail sale, and placed them in coolers to arrest spoilage.

   
   

9. Dennis told Black Gold that soft rot was a problem on the day it said the potatoes arrived or the day after. At least nine days to two weeks later, but before August 10, 1990, Dennis told Black Gold, Dennis "ran" the potatoes on a conveyor belt, and concluded they were unusable.

   
   

10. Under Stone, Inc.'s agreement with Sell's, Sell's reimbursed Stone, Inc. in full for freight charges incurred on loads Sell's accepted, or at the rate of $2.50 per hundredweight for partially accepted loads, but not at all for loads totally rejected.

    
    

11. Stone, Inc. paid Gemini $2,287.75 for freight on load No. AT 126232. Of this sum, $1,181 was charged for shipment to Sell's, while $1,106.75 was charged for detention at Dayton, Ohio, shipment to Fulton, Missouri, and thence to Savanna, Illinois. Stone, Inc. paid Ranger $1,177.25 for freight on load No. AT 126235. Ranger did not charge extra to take the potatoes from Sell's to Dennis.

    
    

12. Stone, Inc. deduced that load No. AT 126235 had reached Wauseon, Ohio, from Ranger's invoice, which it received shortly after June 19, 1990. But Stone, Inc. was not told the final disposition of either load until August 21, 1990, when Black Gold advised that load No. AT 126232 had been dumped.

    
    

13. In mid-June of 1990, the market price for Atlantic potatoes in bulk, free on board in Hastings, was $2.75 per hundredweight. Black Gold was never paid anything on account of either load. Attached to its answer are statements purportedly from both repackers attesting to excess rot.

    `CONCLUSIONS OF LAW

    
    

14. Since the Department of Agriculture and Consumer Services referred respondent's hearing request to the Division of Administrative Hearings, in accordance with Section 120.57(1)(b)3., Florida Statutes (1989), "the division has jurisdiction over the formal proceeding." Section 120.57(1) (b)3., Florida Statutes (1989).

    
    

15. As a "person . . . engaged within this state in the business of purchasing, receiving or soliciting agricultural products from the producer," Section 604.15(1), Florida Statutes (1989), Black Gold is a dealer in agricultural products for purposes of Chapter 604, Florida Statutes, required to be licensed by Sections 604.17 and 604.18, Florida Statutes (1989) and, as a condition of licensure, to "deliver to the department a surety bond or certificate of deposit in the amount of at least $3,000 . . . ." Section 604.20(1), Florida Statutes (1990 Supp.). Potatoes are "agricultural products" because they are "natural products of the farm, nursery, grove [or] orchard," Section 604.15(3), Florida Statutes (1989), and Stone, Inc. is a producer within the meaning of Section 604.15(5), Florida Statutes (1989).

    
    

16. Petitioner has the burden to establish the allegations of the complaint by a preponderance of the evidence. J.T. Cochran and R.B. Strange d/b/a C & S Tree Farm v. Beach Landscaping, Inc. d/b/a Landscape Technologies and Regency Insurance Co., No. 90-7494 (DOAH; April 19, 1991); Pine Stand Farms, Inc. v. Five Brothers Produce, Inc. and Florida Farm Bureau Mutual Insurance Co., No. 90-6460A (DOAH: Mar. 18, 1991); Florida Farm Management, Inc. v. DeBruyn Produce Co. and Peerless Insurance Co., No. 90-2966A (DOAH; Cct. 23, 1990). Black Gold has not proven any written agreement, but relies on the verbal agreement it alleged. See J.R. Sales, Inc. v. Dicks, 521 So. 2d 366, 369 (Fla. 2d DCA 1988).

    
    

17. In its complaint, Stone, Inc. alleges that Black Gold "agreed to purchase the potatoes at . . . $2.75 cwt plus freight," and contends, "If there was a problem with either or both loads we should have been notified timely to allow us to market the potatoes elsewhere." But the evidence did not establish either that Black Gold agreed to purchase the potatoes or that belated notice caused petitioner any loss attributable to an inability to market the potatoes after their rejection in Ohio, Missouri and Illinois.

18. In its post-hearing submission, Stone, Inc. argues that respondent, as a grower's agent, was "required to give an account of sale within 48 hours," citing Section 604.22, Florida Statutes (1989). But here there were no sales, so respondent had no duty to account for any sales. For the first time in its post-hearing submission, Stone, Inc. also invokes federal regulations promulgated under the Perishable Agricultural Commodities Act of 1930, notably for the proposition that documentation of the dumpings was inadequate under federal law. However this may be, petitioner failed to prove the indebtedness it claimed in its complaint.

RECOMMENDATION

It is, accordingly, RECOMMENDED:

That the Department of Agricultural and Consumer Services enter an order dismissing petitioner's complaint.

DONE and ENTERED this 3rd day of July, 1991, in Tallahassee, Florida.

ROBERT T. BENTON, II

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 3rd day of July, 1991.

APPENDIX

Respondent's proposed findings of fact Nos. 1, 2, 3, 4, 5,

6, 7, 8, 9, 10, 11 and 14 have been adopted, in substance, insofar as material.

With respect to respondent's proposed finding of fact No. 12, all evidence regarding the quality of the potatoes at their destinations was hearsay.

With respect to respondent's proposed finding of fact No.

13, the actual disposition was not established by competent evidence.

Respondent's proposed finding of fact No. 15 is properly argument rather than a finding of fact, for the most part.

These loads apparently took two days to reach Sell's.

COPIES FURNISHED:

John W. Stone

Post Office Box 74 Hastings, FL 32045

John Michael Traynor, Esquire

22 Cathedral Place

St. Augustine, FL 32084

Brenda Hyatt, Chief

Bureau of Licensing & Bond Department of Agriculture

508 Mayo Building Tallahassee, FL 32399-0800

Richard Tritshcler, General Counsel Department of Agriculture

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: 91-000250

Orders for Case No: 91-000250