STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

CAROL VREELAND, )

)

Petitioner, )

)

vs. ) CASE NO. 92-5433A

) LESTER TOWELL DISTRIBUTORS, )

)

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to written notice, a formal hearing was held in this case before Errol H. Powell, a duly designated Hearing Officer of the Division of Administrative Hearings, on March 9, 1993, in Ft. Pierce, Florida.

APPEARANCES

For Petitioner: Richard Vreeland

Post Office Box 1146

Fort Pierce, Florida 34954

For Respondent: Bob Letsinger

Director of Marketing and Development Lester Towell Distributors, Inc.

329 Cindy Court Longwood, Florida 32779

STATEMENT OF THE ISSUE

The ultimate issue for determination at formal hearing was whether Lester Towell Distributors, Inc., is indebted to Carol Vreeland for produce, i.e., squash, sold to Lester Towell Distributors by Carol Vreeland's son, Kurt Vreeland, as grower.

PRELIMINARY STATEMENT

A complaint, dated June 26, 1992, was filed by Carol Vreeland (Petitioner) with the State of Florida, Department of Agriculture and Consumer Services against Lester Towell Distributors, Inc. (Respondent), for indebtedness by Respondent for the failure of Respondent to pay Petitioner for agriculture produce sold to Respondent. The claimed indebtedness was $6,000 plus. On July 24, 1992, Petitioner filed an amendment to its complaint revising the indebted amount to $5,120.55.

An answer, dated August 18, 1992, was filed by the Respondent with the Department of Agriculture and Consumer Services. In essence, Respondent's answer denied that any proceeds from the sale of the agriculture produce was due and owing to Petitioner. Additionally, Respondent requested a hearing on the dispute.

A formal hearing was scheduled pursuant to Notice of Hearing. At the hearing, Petitioner presented the testimony of four witnesses, and Respondent presented the testimony of two witnesses. Petitioner entered five exhibits into evidence, and Respondent entered three exhibits into evidence.

Proposed findings of fact and conclusions of law were filed by representatives of both parties, beyond the agreed deadline, but extensions of time were granted. The findings of fact and conclusions of law have been addressed in the appendix to this recommended order. Also, Respondent filed the transcript of the final hearing, and notice of the filing was forwarded to all parties.

FINDINGS OF FACT

1. Richard Vreeland and Carol Vreeland (Petitioner) are husband and wife. Kurt Vreeland is their adult son. Kurt Vreeland did not appear at the hearing.

   
   

2. In prior years before the incident in this case, Richard Vreeland had grown and sold produce. However, for the 1992 season, because of a neck injury, he had decided not to grow and sell produce. Kurt Vreeland who had no experience in the growing of produce convinced his parents to allow him to grow and sell the produce, i.e., squash. Petitioner and her husband agreed but placed certain conditions on their son. The conditions were that Kurt Vreeland would rent the land from his parents and that from the proceeds of the sale of the squash, he would reimburse his parents for the expenses they incurred in growing the produce and that Kurt Vreeland would receive the balance of the proceeds from the sale of the squash.

   
   

3. The squash was grown on land owned by Petitioner and her husband.

   
   

4. Supervision for the crop of squash was performed by Rodney Willis. Willis had an oral agreement with Kurt Vreeland to supervise the growing of the crop of squash, and in return Kurt Vreeland would pay him for his services and labor expenses that he, Willis, incurred. Willis was aware that the squash would be transported to Lester Towell Distributors, Inc. (Respondent) for sale. Willis has never received any payment from Kurt Vreeland for his services or the labor expenses that he incurred.

   
   

5. Respondent is a company in the business of selling produce for growers at a commission plus expenses.

   
   

6. On or about April 1, 1992, an individual who identified himself as Kurt Vreeland, offered to sell squash to Respondent. Respondent had no reason to doubt that the individual was Kurt Vreeland. No evidence was presented that the individual was not Kurt Vreeland.

   
   

7. On April 14, 1992, a "Packing and Sales Agreement" (Agreement) was entered into by Kurt Vreeland and Respondent, represented by Fred Towell who is Respondent's President. On April 16, 1992, the Agreement was executed by them. In the Agreement, Kurt Vreeland was specifically referred to as "Grower," and Respondent, at times, as "Grower's Agent."

The Agreement states in pertinent part:

[W]hereas, Grower desires to retain LESTER TOWELL DISTRIBUTORS, INC. as its agent for the purpose of sale of the Grower's produce and for the performance of such other services in connection therewith as may be specifically set forth, and whereas,

* * *

Now, therefore, it is agreed as follows: FIRST: Grower hereby retains Grower's Agent during 1992 farm year and entrust him from time to time for the purpose of sale, with the possession and control of Grower's produce.

SECOND: Prior to delivering any produce to the Grower's Agent, Grower will apprise Grower's Agent whether Grower has pledged any of the crop proceeds or granted a security interest therein to any third party and if so the name and address of such third party. Grower will, at all times during the term of this agreement, apprise Grower's Agent of any such additional liens placed on his crops as soon as such has occurred.

Grower shall indemnify Grower's Agent from all losses and expenses, including reasonable attorney fees incurred by Grower's Agent caused by (1) failure of Grower to promptly furnish such information and (2) any misstatements with regard to the information provided.

THIRD: Grower's Agent shall receive at LESTER TOWELL DISTRIBUTORS, INC. located at

900 Lester Towell Blvd., in Belle Glade, Florida 33430, Growers, produce for the purpose of shipping and selling the same at the ten percent (10 percent) of sales charge established between the Grower and Grower's Agent which shall only be changed by mutual agreement. Grower's Agent shall be respon- sible for the INVOICING AND ACCOUNTING of all Grower's produce received by and or sold by Grower's Agent.

* * *

SIXTH: Accounting and/or payment shall be made to Grower within sixty (60) business days from the date Grower's produce is deliv- ered and sold on the terms accepted, but only on the basis of the actual final selling price. By the execution of this agreement, Grower permits that there may be deducted from the actual selling price all actual ex- penses as described in paragraphs Fourth and Fifth, and the agreed upon charges set forth in paragraph Third.

* * * GENERAL CONDITIONS AND STATEMENTS

UNDER THE PERISHABLES AGRICULTURAL COMMODI- TIES ACT, 7 U.S.C. S499 (a)et seq AND REGU- LATIONS OF THE AGRICULTURAL MARKETING SERVICE OF THE UNITED STATES DEPARTMENT OF AGRICUL- TURE, IT IS REQUIRED THAT THERE BE MADE A STATEMENT OF THE TERMS AND CONDITIONS UNDER WHICH THE GROWER'S AGENT WILL HANDLE PRODUCE FOR THE GROWER. THE FOLLOWING IS THAT AGREE- MENT BETWEEN THE GROWER AND THE GROWER'S AGENT, TOGETHER WITH THE CONTRACT TERMS OF THIS DOCUMENT.

* * *

2. Grower shall haul and deliver all produce to Grower's Agent packing house at Grower's expense. Produce must be delivered either in crates, Grower's pallet box or such other containers as have been agreed to by the Grower's Agent.

* * *

1. Grower's Agent shall issue receipts to Grower for all produce received. A lot num- ber or other positive means of identification shall be assigned by Grower's Agent to each lot in order to segregate the various lots

   of produce received from different Growers for similar produce being handled at the same time, and each lot shall be so identified and segregated throughout all operations con- ducted by Grower's Agent.

   
   

2. At the end of April 1992 or first of May 1992, Petitioner telephoned Respondent notifying Respondent that checks for the sale of the produce should be made payable to Petitioner and Kurt Vreeland. Petitioner spoke with Margaret Jeanne "Jeannie" Woodward. Petitioner was assured by Ms. Woodward that the checks would be made payable to Petitioner and her son.

   
   

3. What Ms. Woodward had agreed to do was contrary to Respondent's standard operating procedure which was to issue checks for the sale of produce only to persons with whom Respondent had entered into a contract.

   
   

4. In April 1992, Respondent sold squash supplied to it by Kurt Vreeland. On or about May 4, 1992, a check for squash sold was issued by Respondent and made payable to Petitioner and Kurt Vreeland and was mailed to an address other than Petitioner's address. The check was prepared and signed by Ms. Woodward.

   
   

5. On or about May 19, 1992, Kurt Vreeland and another person appeared at Respondent's place of business, requesting another check, indicating that he had never received the original check. Ms. Woodward attempted to issue the check payable to Petitioner and Kurt Vreeland, but he objected, insisting that the check be made payable only to him, since the contract was with him and no one else. Ms. Woodward complied with the demand and issued another check payable only to Kurt Vreeland.

6. Ms. Woodward complied with Kurt Vreeland's demand because: 1) The contract was in fact with Kurt Vreeland and no one else; 2) Respondent's standard operating procedure was to issue checks only to persons with whom Respondent had entered into a contract; and 3) Kurt Vreeland was demanding that Respondent comply with the contract that he, and only he, receive payment. On the same day the new check was issued, it was cashed at Respondent's bank, showing an endorsement by Kurt Vreeland.

   
   

7. Subsequently, after not receiving any money from Respondent, Petitioner telephoned Respondent. Ms. Woodward notified Petitioner that the checks could only be made payable to Kurt Vreeland because the contract for sale of the squash was with him only. Further, Petitioner was informed by Ms. Woodward that she must present proof to Respondent that she, not Kurt Vreeland, owns the produce. This was the first time that Ms. Woodward had experienced this type of situation and was not sure what kind of evidence or proof Petitioner would need to submit.

   
   

8. Petitioner and her husband telephoned Respondent several times attempting to convince Respondent that they, not their son, Kurt Vreeland, owned the produce and that checks should be made payable to Petitioner and her son. However, their efforts were to no avail.

   
   

9. On May 9, 1992, Petitioner mailed a letter to Respondent, by certified mail, reiterating that the produce was owned by her and checks should be made payable to her and her son. Respondent received the certified letter on May 21, 1992.

   
   

10. On May 19, 1992, prior to receiving Petitioner's certified letter, Respondent issued to Kurt Vreeland another check in the amount of $3,346.20 for the sale of additional squash delivered by Kurt Vreeland to Respondent. The check was prepared and signed on behalf of Respondent by Ms. Woodward. That same day, the check was cashed at Respondent's bank, showing an endorsement by Kurt Vreeland.

    
    

11. After mailing the certified letter, Petitioner and her husband believed that the matter, regarding the checks, had been resolved, but shortly discovered that they were mistaken. Merchants to whom their son had written checks and with whom Petitioner and her husband did business, were complaining to Petitioner and her husband that their son's checks had been returned for insufficient funds. This new development caused Petitioner and her husband to again contact Respondent by telephone. At that time, Respondent informed Petitioner and her husband of the check issued on May 19, 1992, made payable only to Kurt Vreeland, reiterating that the contract was only with their son. Further, Respondent informed them that Florida Department of Health and Rehabilitative Services (HRS) had verbally made a claim on the proceeds from the squash on behalf of Kurt Vreeland's ex-wife for his children and that Respondent was not complying with HRS' request either because it had shown no proof that the ex-wife was entitled to the proceeds.

    
    

12. On June 19, 1992, Ms. Woodward issued to Kurt Vreeland a check in the amount of $1,774.35 for more squash that it had sold in May 1992 on behalf of Kurt Vreeland. That same day, the check was cashed at Respondent's bank, showing an endorsement by Kurt Vreeland.

13. Before the June 19, 1992 check was issued, Petitioner and her husband made numerous telephone calls to Respondent attempting to convince Respondent to make the checks payable to Petitioner and her son, Kurt Vreeland. Again, all to no avail.

    
    

14. After the June 19, 1992 check, Kurt Vreeland did not provide Respondent with any more squash for it to sell. Consequently, no further checks were issued.

    
    

15. At one point in time, out of frustration, Respondent requested Petitioner and her husband to remove some remaining squash that had been brought to Respondent by Kurt Vreeland. However, the squash was not removed.

    
    

16. At all times material hereto, Petitioner and her husband were aware of the different periods that their son removed squash from the land to take to Respondent for sale.

    
    

17. At all times material hereto, at no time did Kurt Vreeland inform Respondent that either Petitioner or her husband had ownership in the squash.

    
    

18. Neither Petitioner nor her husband have received any money from their son, Kurt Vreeland, for the expenses they incurred with the 1992 crop of squash, nor for rent of their land to grow the produce.

    
    

    CONCLUSIONS OF LAW

    
    

19. The Division of Administrative Hearings has jurisdiction over the subject matter of this proceeding and the parties thereto pursuant to Subsection 120.57(1), Florida Statutes. The parties were duly noticed for the formal hearing.

    
    

20. 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 squash in question is an agricultural product. Section 604.15(3), Florida Statutes.

    
    

21. The burden of proof is upon the Petitioner to show by a preponderance of the evidence that she is entitled to the relief sought, that is, that Respondent wrongfully failed to make the checks from the sale of the squash payable to Petitioner and her son, Kurt Vreeland, and therefore, is indebted to Petitioner for $5,120.55. Florida Department of Transportation v. J. W. C. Company, Inc., 396 So.2d 778 (Fla. 1st DCA 1981).

    
    

22. Petitioner's position is (1) that Respondent was on notice that Kurt Vreeland was not sole owner of the crop of squash and, therefore, all checks should have been made payable to her and Kurt Vreeland, and (2) that, since Respondent failed to issue the checks as indicated, Respondent should bear the burden and pay twice, with the second payments made payable to Petitioner. Furthermore, Petitioner contends that Respondent recognized her ownership or co- ownership of the squash when it made the first check payable to her and her son even though Respondent subsequently reissued the check made payable only to her son.

    
    

23. Respondent's position is that it had a written contract with Kurt Vreeland who signed the contract as owner of the crop of squash, that he would

    provide Respondent with squash and that Respondent would sell the squash on behalf of Kurt Vreeland for a 10 percent commission and remit the balance to him. Additionally, Respondent contends that its contract with Kurt Vreeland prevented it from making the checks payable to anyone else unless Kurt Vreeland instructed Respondent to do otherwise, which he did not.

    
    

24. Petitioner has failed to meet her burden. Generally, only the parties to a contract are obligated or bound by a contract. 17A Am. Jur. 2d, Contracts Section 421. Respondent had a contractual agreement with Kurt Vreeland only and was bound by the terms of the agreement to pay Kurt Vreeland only, as grower, and, therefore, to make the checks payable to Kurt Vreeland, not Petitioner and Kurt Vreeland. As a rule, when it comes to enforcing a contract, the rights of the parties are determined by the terms of the contract. 17 Am Jr. 2d, Contracts Section 425. Furthermore, the terms of Respondent's contract with Kurt Vreeland show that Kurt Vreeland could, and did, insist on the checks from Respondent be made payable only to himself.

    
    

25. Petitioner could have an enforcement right if she was a third-party beneficiary. 17A Am. Jr. 2d, Contracts Section 440. Generally, the intent of the parties to a contract is the controlling factor. Id. Both contracting parties must be shown to have agreed to benefit a third party, and the third party must be shown to be a direct and intended beneficiary of the contract. Deanna Construction Co., Inc. v. Sarasota Entertainment Corporation, 563 So.2d 150, 151 (Fla. 2nd DCA 1990), citing Health Application Systems, Inc. v. Hartford Life & Accident Insurance Co., 381 So.2d 294 (Fla. 1st DCA 1990). Petitioner cannot, however, be considered a third party beneficiary since the evidence fails to demonstrate that Kurt Vreeland and Respondent intended their agreement to benefit Petitioner or that Petitioner was a direct and intended beneficiary of the contract.

    
    

26. In reaching such conclusion, the provisions of the agreement between Respondent and Kurt Vreeland that the grower (Kurt Vreeland) would inform Respondent of any third party who has a claim on the proceeds from selling the produce has not been overlooked. However, at no time did Kurt Vreeland apprise Respondent of any third party claim; therefore, Petitioner cannot take advantage of this provision to assist her.

    
    

27. As to Petitioner's argument that Respondent was on notice that Petitioner owned or co-owned the squash, the argument is not persuasive. It was not unreasonable for Respondent to require Petitioner to present proof of ownership of the squash. What was provided by Petitioner or on Petitioner's behalf as proof was insufficient. Furthermore, Respondent requested, at some point after frequent telephone calls from Petitioner asserting that she was the owner of the squash, that Petitioner and her husband remove the remaining squash from his produce yard, but the squash was not removed.

    
    

28. There is no disagreement that Petitioner and her husband have suffered an injury for which relief, if possible, should be granted. However, the relief requested cannot be granted in this proceeding.

RECOMMENDATION

Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the Department of Agriculture and Consumer Services issue

a final order dismissing Petitioner's complaint.

DONE AND ENTERED in Tallahassee, Leon County, Florida, this 17th day of August 1993.

ERROLL H. POWELL

Hearing Officer

Division of Administrative Hearings The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 17th day of August, 1993.

ENDNOTES

1/ Neither party indicated that there was any attempt to obtain testimony from or the presence of Kurt Vreeland.

2/ The person who signed the agreement as Kurt Vreeland was the same person who contacted Respondent on or about April 1, 1992.

3/ No explanation was offered at the hearing as to why Ms. Woodward agreed to comply with Petitioner's request.

4/ No records were available to show when this check was written.

5/ A stop payment was made on the check allegedly not received by Kurt Vreeland. The check has never been cashed.

6/ There was no testimony as to when (date) or at what point this occurred.

APPENDIX TO RECOMMENDED ORDER, CASE NO. 92-5433A

Petitioner's proposed findings of fact:

1. Substantially adopted in finding of fact numbered 3.

2. Substantially adopted in finding of fact numbered 10, but rejected as constituting argument or conclusions of law regarding what it proves.

3 & 4. Substantially adopted in findings of fact numbered 8, 13, 14, 17 and 19.

1. Substantially adopted in finding of fact numbered 15.

2. Substantially adopted in findings of fact numbered 8, 11 and 12, but rejected as contrary to the evidence presented regarding what was known as to who the checks were to be made payable to and where the checks were to be sent.

7 & 8. Rejected as constituting argument or conclusions of law.

Respondent's proposed findings of fact:

1. Rejected as constituting argument or conclusions of law.

2. Rejected as unnecessary to the issues herein.

3. Rejected as constituting recitation of testimony, argument or conclusions of law.

4. Substantially adopted in findings of fact numbered 7, 11, 12, 16, 17 and 18.

5 & 6. Rejected as constituting recitation of testimony, argument or conclusions of law.

1. Rejected as constituting recitation of testimony, argument or conclusions of law; second sentence rejected as no evidence was presented regarding the custom of growing agricultural products on the farms of others.

2. Rejected as constituting recitation of testimony, argument or conclusions of law.

3. Substantially adopted in finding of fact numbered 17, but rejected regarding sentences 3 and 4 as constituting argument or conclusions of law.

4. Substantially adopted in findings of fact numbered 3, 4 and 23.

5. Substantially adopted in finding of fact numbered 4.

6. Adopted in finding of fact numbered 7 only to the extent that Respondent had a written agreement; remainder rejected as constituting argument, conclusions of law or recitation of testimony.

7. Rejected as constituting recitation of testimony, argument or conclusions of law; but last sentence substantially adopted in finding of fact numbered 22.

8. Rejected as constituting recitation of testimony, argument or conclusions of law.

9. Substantially adopted in finding of fact numbered 3; but, last sentenced rejected as constituting recitation of testimony, argument or conclusions of law.

10. Substantially adopted in finding of fact numbered 2.

11. Rejected as constituting recitation of testimony, argument or conclusions of law.

12. Substantially adopted in finding of fact numbered 7; but, third and last sentence rejected as constituting recitation of testimony, argument or conclusions of law.

13. Rejected as constituting recitation of testimony, argument or conclusions of law; but adopted in finding of fact numbered 11 regarding the contract was with Kurt Vreeland.

14. Substantially adopted in findings of fact numbered 2 and 24.

COPIES FURNISHED:

Richard Vreeland Post Office Box 1146

Fort Pierce, Florida 34954

Bob Letsinger Director of Marketing

and Development

Lester Towell Distributors, Inc.

329 Cindy Court Longwood, Florida 32779

The Honorable Bob Crawford Commissioner of Agriculture The Capitol, PL - 10

Tallahassee, Florida 32399-0810

488-3022

Richard Tritschler General Counsel Department of Agriculture The Capitol, PL - 10

Tallahassee, Florida 32399-0810

Brenda Hyatt

Bureau of Licensing & Bond Department of Agriculture

508 Mayo Building

Tallahassee, Florida 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. Some agencies allow a larger period within 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: 92-005433

Orders for Case No: 92-005433