STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DONALD JONES, )

)

Petitioner, )

)

vs. ) CASE NO. 91-7364A

)

JEFF ODOM, INC., and ) LAWYERS SURETY CORPORATION, )

)

Respondents. )

)

RECOMMENDED ORDER

This matter came on for hearing in Wildwood, Florida, before Robert T. Benton, II, Hearing Officer of the Division of Administrative Hearings, on March 3, 1993. Nobody appeared on behalf of Lawyers Surety Corporation.

Petitioner filed no proposed recommended order. The attached appendix addresses by number proposed findings of fact set out in respondent's proposed recommended order.

APPEARANCES

John Coniglio, Esquire For Petitioner: Post Office Box 1119

Wildwood, Florida 34785

W. Scott Wynn, Esquire For Respondent: Post Office Box 447

Groveland, Florida 34736 STATEMENT OF THE ISSUE

Whether respondents owe petitioner money on account of certain pepper sales?

PRELIMINARY STATEMENT

Petitioner alleged that respondent Jeff M. Odom, Inc. owed him $18,176.75 more than what he was paid ($13,923.25) for eight loads of peppers he delivered on May 27 and June 5, 1991. At the time of the alleged transactions, Jeff M. Odom, Inc. held a Florida agricultural dealer's license and had deposited with the Department of Agriculture and Consumer Services an appropriate surety bond, issued by Lawyers Surety Corporation.

After petitioner filed a complaint on or about July 23, 1991, and a subsequent amendment, in accordance with Section 604.21(1), Florida Statutes (1991); and respondent filed an answer, the matter was referred to the Division of Administrative Hearings, in apparent conformity with Sections 120.57(1)(b)3. and 604.21(6), Florida Statutes (1991).

On March 12, 1992, an evidentiary hearing took place in Bushnell, Florida, and a recommended order was entered on May 27, 1992, recommending dismissal of petitioner's amended administrative complaint. On August 25, 1992, however, the Department of Agriculture and Consumer Affairs (DACS) entered an order of remand requiring further proceedings on grounds that:

the burden should have been upon the respondent to disprove the department's nonfinal order of October 23, 1991.

The entire findings of fact in the nonfinal order of October 23, 1991, consist of the following:

1. Complainant, Donald Jones, is an individual whose address is Route 1, Box 175, Oxford, Florida.

2. Respondent, Jeff Odom, Inc., is a corporation whose address is P.O. Box 128, Center Hill, Florida. At the time of the transactions involved, Respondent was licensed as a dealer in agricultural products supported by Surety Bond Number FLA-300287 (the "Bond") in the amount of $50,000.

3. Co-Respondent, Lawyers Surety Corporation, as Surety, provided the Bond for Respondent. The conditions and provisions of the Bond are to assure proper accounting and payment to producers, their agents or representatives for agricultural products purchased by the Respondent.

4. Between May 27 and June 5, 1991, Complainant, Donald Jones, a Florida producer sold Respondent papers for which partial payments were received leaving a claimed indebtness of $18,176.75.

5. The complaint was filed with this office within six (6) months from the date of sale.

6. There are no known disputed facts in this matter.

There is no dispute regarding findings of fact Nos. 1, 2, 3, and 5, which are, accordingly, deemed established, and should be read in conjunction with the following additional

FINDINGS OF FACT.

1. Petitioner Donald Jones caused peppers he had grown "on high ground" to be delivered to respondent's packing house in Center Hill, Florida, on May 16, May 27 (in the rain) and June 4, 1991. As was customary, respondent undertook to grade, size, pack and load the vegetables, to arrange transportation to market, to get the best price possible, and to account for the proceeds, all for an unspecified "reasonable fee." The parties had no written agreement.

   
   

2. Petitioner, who had dealt with respondent in eight preceding seasons, does not take issue with any of the "packing charges" respondent imposed for its services (on average $3.56 per box on May 27, 1991 and $2.36 per box on June 4,

   1991), or raise any question regarding the physical handling of the peppers. He makes no claim of any kind regarding the peppers he delivered on May 16, 1991.

   It affirmatively appears from his verified complaint that respondent gave a timely accounting, and the evidence left no doubt as to the accuracy of the accounting, with one trivial exception.

   
   

3. On May 27, 1991, petitioner delivered to respondent enough large green peppers to fill 903 boxes, enough medium green peppers to fill 1195 boxes, enough small (also called select) green peppers to fill 461 boxes, and enough red peppers to fill 278 boxes. Respondent's Exhibits Nos. 12 and 16.

   
   

4. Respondent authorized Gator Produce, Inc. to sell petitioner's produce for a commission of seven percent, which is within the industry norm. Mr. Odom had known Bob Rutledge, the principal in Gator Produce, Inc. with whom he dealt, for some 25 years. At Mr. Rutledge's direction, Mr. Odom shipped the peppers to their various destinations "free on board, inspection after arrival," in keeping with industry practice.

   
   

5. Respondent loaded 150 boxes of large green peppers and 50 boxes of small green peppers on a truck bound for Columbia, South Carolina, on May 27, 1991. Senn Brothers received the produce that night and eventually paid $16.50 a box for the large and $7.20 a box for the small peppers. Respondent's Exhibit No. 3.

   
   

6. By a second refrigerated truck, respondent shipped another 150 boxes of large green peppers on the night of May 27, 1991, to Mushroom Growers in Chicago, Illinois, and a like number of boxes each of red, small green and medium green peppers to the same buyer. Respondent's Exhibit No. 4.

   
   

7. When the peppers reached Chicago, Bob Rutledge of Gator Produce reported to Mr. Odom, "We've got a problem [with decay]." Instructed by Mr. Odom to "work it out," Mr. Rutledge sold the peppers at prices below those that fresh peppers without decay brought. Respondent received $6.27 a box for large peppers, $7.11 a box for medium peppers, $7.39 a box for small peppers, and

   $7.57 a box for red peppers. Respondent's Exhibit No. 18.

   
   

8. On May 28, 1991, at about two o'clock in the morning, respondent shipped 128 boxes of red peppers, 153 boxes of large peppers and 229 boxes of small peppers to Ag Fresh in Oklahoma City. Respondent received $7.44 a box for the large peppers, $3.72 a box for the small peppers and $4.19 a box for the red peppers. The $9.30 a box for 125 boxes of medium peppers respondent shipped an hour earlier and the $9.06 a box for the 919 boxes of medium peppers respondent shipped to Memphis later the same day represent market price for peppers free from decay.

   
   

9. The $6.51 a box to respondent for 450 boxes of large peppers respondent shipped to New York on May 28, 1991, like the price on the large peppers respondent shipped for petitioner to Chicago and Oklahoma City included an adjustment for decay. Although the New York buyer was billed for 32 boxes of red peppers, it actually received 32 boxes of small or select peppers, for which respondent was eventually paid $4.18 a box.

   
   

10. On June 4, 1991, petitioner delivered to respondent enough large green peppers to fill 205 boxes, enough medium peppers to fill 330 boxes, enough small or select peppers to fill 220 boxes and enough red peppers to fill 120 boxes.

11. On June 6, 1991, respondent shipped all of the large green peppers and all of the red peppers along with 200 boxes of medium peppers he had received from petitioner on June 4, 1991, to Philadelphia. On account of sales in Philadelphia, respondent realized $6.05 a box for large peppers, $4.65 a box for medium peppers, and $3.72 a box for red peppers.

    
    

12. The same day respondent shipped all the small green peppers and 120 boxes of medium green peppers to Lexington Produce in Baltimore, Maryland, the only buyer of petitioner's peppers with whom it had not dealt extensively before. When Lexington Produce reported that petitioner's peppers had decay, respondent or its agent ordered and paid for a "federal inspection" which confirmed the report. After authorizing its agent to work it out, respondent received $2.79 per box for the small peppers and $5.58 per box for the medium peppers.

    
    

13. In the 1991 pepper season, "everybody's" peppers had decay. Peppers rot from the inside out. Whether rot begins around the stem, as usually happens, or shows up suddenly as sidewall rot, it often escapes detection in its early stages. Even an experienced eye may see no sign of rot one day, while the morrow makes decay unmistakable. Several buyers reported that petitioner's peppers had decayed by the time they reached them.

    
    

14. In consultation with Mr. Rutledge, Mr. Odom decided against incurring the expense of government inspections, when spoliage reports came from dealers on whom they had come to rely over many years. As far as the evidence shows, petitioner received fair market value, taking the peppers' condition into account, for each shipment, less commission and packing charges.

    
    

15. Respondent fully accounted to petitioner for every penny that came into its hands, and disbursed some moneys to petitioner before it had itself received the sale proceeds. When asked, respondent made all of its invoices and other records available to petitioner. There is, however, one box of medium peppers petitioner delivered on May 27, 1991, which has not been accounted for. On average, those boxes of medium peppers yielded respondent $8.84 from which a

    $3.56 packing charge should be deducted to determine the value of the missing box to petitioner: $5.28.

    
    

    CONCLUSIONS OF LAW

    
    

16. 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 (1991), "the division has jurisdiction over the formal proceeding." Section 120.57(1)(b)3., Florida Statutes (1991).

    
    

17. 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 (1991), Jeff M. Odom, Inc. 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 (1991) 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 (1991).

    
    

18. Peppers are "agricultural products" because they are "natural products of the farm, nursery, grove [or] orchard," Section 604.15(3), Florida Statutes (1991), and petitioner is a producer within the meaning of Section 604.15(5),

    Florida Statutes (1991). Under the parties' oral agreement, see J. R. Sales, Inc. v. Dicks, 521 So.2d 366, 369 (Fla. 2d DCA 1988), Jeff M. Odom, Inc. was obligated to grade, size, pack, load and arrange for the sale of petitioner's peppers, and to account to petitioner for the proceeds.

    
    

19. Jeff M. Odom, Inc. did not breach this agreement by engaging Gator Produce, Inc. as a broker. The brokerage arrangement reduced overhead respondent would otherwise have recovered in its packing fees, and may have resulted in petitioner's receiving more money for his peppers. But the evidence did show that a box of medium peppers went astray at some point after respondent took possession of petitioner's produce.

    
    

20. Petitioner is entitled to an "order adjudicating the amount of indebtedness due to be paid by the dealer." Section 604.21(4), Florida Statutes (1990 Supp.). The statute further provides:

    
    

    1. Any indebtedness set forth in a departmental order against a dealer shall be paid by the dealer within 15 days after such order becomes final.

    2. Upon the failure by a dealer to comply with an order of the department directing payment, the department shall, in instances involving bonds, call upon the surety company to pay over to the department . . . under the conditions of the assignment or agreement, the amount called for in the order of the department, not exceeding the amount of the bond . . . . If the bond . . . is insufficient to pay in full the amount due each complainant as set forth in the order of the department, the department shall distribute the proceeds pro rata among such complainants. The proceeds from a bond . . . shall be paid directly to the department to be distributed by it to successful complainants,

. . . .

Section 604.21, Florida Statutes (1990 Supp.). Here petitioner is entitled to five dollars and twenty-eight cents ($5.28).

RECOMMENDATION

It is, therefore, RECOMMENDED:

1. That DACS order respondent Jeff Odom, Inc. to pay petitioner five dollars and twenty-eight cents ($5.28) within fifteen (15) days of the final order.

   
   

2. That, in the event Jeff M. Odom, Inc. fails to pay petitioner five dollars and twenty-eight cents ($5.28) within (15) days of the final order, DACS order Lawyers Surety Corporation to pay five dollars and twenty-eight cents ($5.28) or such lesser sum as satisfies the requirements of Section 604.21(8), Florida Statutes (1991), for disbursal to petitioner.

DONE and ENTERED this 10th day of May, 1993, at 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 10th day of May, 1993.

APPENDIX

Petitioner filed no proposed findings of fact.

Respondent's proposed findings of fact Nos. 1 and 2 are properly proposed conclusions of law.

Respondent's proposed findings of fact Nos. 3-8, 10, 11, 13-19 and 21-27 have been adopted, in substance, insofar as material.

With respect to respondent's proposed finding of fact No. 9, the destinations included Oklahoma City, Memphis and New York, but not Philadelphia and Baltimore.

With respect to respondent's proposed finding of fact No. 12, respondent apparently absorbs inspection fees.

Respondent's proposed finding of fact No. 20 is adopted, except that the payments to petitioner were $5.28 short.

COPIES FURNISHED:

Honorable Bob Crawford Commissioner of Agriculture Department of Agricultural and

Consumer Services The Capitol, PL-10

Tallahassee, Florida 32399-0810

Richard Tritschler, General Counsel Department of Agricultural and

Consumer Services The Capitol, PL-10

Tallahassee, Florida 32399-0810

John Coniglio, Esquire Post Office Box 1119 Wildwood, Florida 34785

W. Scott Wynn, Esquire Post Office Box 447 Groveland, Florida 34736

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. Some agencies allow a larger period within which to submit written exceptions. You should consult with 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: 91-007364

Orders for Case No: 91-007364