STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEWEY BREWTON, JR., and DEWEY ) BREWTON, III, )

)

Petitioner, )

)

vs. ) CASE NO. 92-5682A

) JAMES R. and D. RANDALL SMITH, ) d/b/a MIDWEST MARKETING COMPANY, ) and SOUTH CAROLINA INSURANCE ) COMPANY, )

)

Respondent. )

)

RECOMMENDED ORDER

Upon due notice, this cause came on for formal hearing on January 27, 1993 in Ocala, Florida, before Ella Jane P. Davis, a duly assigned hearing officer of the Division of Administrative Hearings.

APPEARANCES

For Dewey Brewton, Jr.: Jacquelyn J. Brewton

as qualified representative for Dewey Brewton, Jr.

8876 NW 115th Avenue Ocala, Florida 34482

For Dewey Brewton, III: Dewey Brewton, III, pro se

8876 NW 115th Avenue Ocala, Florida 34482

For James R. and

D. Randall South d/b/a

Midwest Marketing Company: Richard L. Smith

as qualified representative for James R. and D. Randall Smith d/b/a Midwest Marketing Company

Post Office Box 193 Vincennes, Indiana 47591

For South Carolina

Insurance Co.: No Appearance STATEMENT OF THE ISSUE

Whether or not the claimed amount of $1,545.82 is owed the Petitioner producer by the Respondent shipper for one load of watermelons and whether or not the bond is forfeit in that amount.

PRELIMINARY STATEMENT

Jacquelyn J. Brewton and Richard L. Smith were examined upon the record and accepted as qualified representative for Dewey Brewton, Jr. and Respondent shipper respectively, subject to after-filed authorizations from the named principal litigants. Those authorizations were duly filed, and the named persons are deemed qualified representatives for their principals.

Petitioners presented the oral testimony of Dewey Brewton, III and Jacquelyn J. Brewton and had one exhibit admitted in evidence.

Respondents presented the oral testimony of Richard L. Smith and James R. Smith and had nine exhibits submitted in evidence.

No transcript was filed. The parties waived filing proposed findings of fact.

FINDINGS OF FACT

1. Petitioners are growers of watermelons and qualify as "producers" under Section 604.15(5) F.S.

   
   

2. Respondents Smith are broker-shippers of watermelons and qualify as "dealers" under Section 604.15(1) F.S.

   
   

3. Respondent South Carolina Insurance Company is surety for Respondents Smith.

   
   

4. Petitioners Brewton and Respondents Smith have had a good business relationship overall, including the 1992 growing season during which several loads of high quality watermelons were sold by the Brewtons through the Smiths. Of the several loads of melons sold, only one load, the one invoiced on June 18, 1992, is at issue.

   
   

5. Regardless of oral agreements with varying conditions for other loads, the parties agreed as of June 18, 1992 that the load of June 18, 1992, invoice 2088, (R-5), would be paid for by Respondents Smith advancing harvest costs and agreeing to pay Petitioners for the load, minus the costs of harvesting, after Respondents had received payment from the recipient.

   
   

6. At the time of loading, everyone concerned felt the June 18, 1992 load might have some problems with it, but every attempt was made to load only quality product. Petitioners and Respondents each had input on which specific melons were loaded. At that time, Mr. Rick Smith o/b/o Respondents Smith advised Mr. Dewey Brewton, III that because the quality of the load was borderline and as a result of its borderline condition the whole load could be rejected at its ultimate destination, Respondents Smith wanted Petitioners Brewton to protect the Respondents Smith on the quality of the melons. He also specifically advised Dewey Brewton, III that the whole load could be rejected. The parties then entered into an agreement, partly oral and partly written.

   
   

7. Rick Smith and Dewey Brewton, III understood their agreement to mean that Petitioners would absorb any loss as a result of the quality of the watermelons from that point forward, but that Respondents would not come back against Petitioners for the costs Respondents had advanced on Petitioners'

   behalf or for the cost of the freight. To signify this, the words "grower protects shipper on quality" was written on the invoice.

   
   

8. On or about June 22, 1992, Rick Smith informed Dewey Brewton, III that the entire June 18, 1992 load had been rejected by the first receiver. At that time, Dewey Brewton, III accepted Rick Smith's representation and did not require further proof of rejection at the first point of delivery or request an independent inspection at the first point of delivery. He also acquiesced in Respondents shopping around for a second buyer who might take all or some of the load originally sent out on June 18, 1992, and did not request the return of Petitioners' watermelons. At that time, Rick Smith also told Dewey Brewton, III that the load might have to be held on the truck a day or two to ripen some of the watermelons for a second point of delivery. He again indicated that the whole load could be rejected again when the load was sent on to a second receiver. Dewey Brewton, III specifically agreed to let the melons ripen "a day or so," and did not request any change in the grower protection plan initially agreed to between the parties.

   
   

9. Respondents Smith were eventually able to market the melons to a second delivery point (consignee) in Michigan. That receiver complained that the melons started breaking down and he had to dump 735 melons. Pursuant to standard custom of the trade, Respondents accepted payment of $1,944.00 for the melons, subtracted $1,831.98 they had laid out in freight costs and also subtracted the $675.18 they had advanced on behalf of Petitioners to the harvester. Thus, Respondents sustained a net loss of $563.16. Respondents absorbed the $563.16 loss and did not require any repayment of harvesting costs advanced or any freight charges from Petitioners.

   
   

10. Dewey Brewton, III testified that he originally understood that "grower protection" meant that Petitioners "would stand behind their quality product until the ultimate point," but that he had interpreted a comment by Mr. Rick Smith on June 22, 1992 to the effect that "the grower (Petitioners) agreed to 'ride' the watermelons and the shipper (Respondent) agreed to 'ride' the freight" to mean that the growers (Petitioners) no longer had any duty to cover their own losses on the June 18, 1992 load of watermelons after the first rejection and up to final sale to the second buyer.

    
    

11. In light of Mr. Brewton's failure to change the written language concerning protection on the invoice, his knowledge from the day of initial shipment that the June 18, 1992 load was of dubious quality, his acceptance that the first recipient had rejected the load, and his agreement that Respondents could have a further waiting/ripening/shopping around period before ultimate sale, coupled with his knowledge from the very beginning that the June 18, 1992 load could be utterly rejected at any point so as to render the endeavor a complete loss to the Petitioners, Mr. Brewton's assumption that on June 22, 1992, Respondents Smith were voluntarily waiving their written agreement that "grower protects shipper on quality" was not reasonable. On June 22, 1992, the load had already been rejected once. At that stage, the outcome of the proposed sale was considerably more precarious than when the crop was loaded on June 18, 1992. It is also found Mr. Brewton's assumption that the agreement had been modified was not knowingly or intentionally induced by the Respondents and that the assumption was not contemporaneously conveyed to Respondents Smith so that they could disabuse Mr. Brewton of his error. Upon the foregoing, it is further found that the written initial agreement that "grower protects shipper on quality" was not altered on June 22, 1992 but continued in force.

    CONCLUSIONS OF LAW

    
    

12. The Division of Administrative Hearings has jurisdiction over the parties and subject matter in this cause, pursuant to Section 120.57(1), F.S..

    
    

13. In agricultural product bond enforcement proceedings, a Petitioner has the burden of proving, by a preponderance of the evidence, that the dealer defaulted on its agreement and is indebted to the Petitioner. See, Ernest Leclercq d/b/a Suncoast Farms v. Orin H. Cape Produce, Inc. d/b/a South Dade Product, 9 FALR 852 (1986). In this case, that burden has not been met.

RECOMMENDATION

Upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED

That the Department of Agriculture and Consumer Services enter a Final Order dismissing Petitioner's complaint.

RECOMMENDED this 26th day of March, 1993, at Tallahassee, Florida.

ELLA JANE P. 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 26th day of March, 1993.

COPIES FURNISHED:

Honorable Bob Crawford Commissioner of Agriculture Department of Agriculture and Consumer Services

The Capitol, PL-10 Tallahassee, FL 32399-0810

Richard Tritschler, Esquire Department of Agriculture and Consumer Services

The Capitol, PL-10 Tallahassee, FL 32399-0810

Brenda D. Hyatt, Chief Department of Agriculture and Consumer Services

The Capitol, PL-10 Tallahassee, FL 32399-0810

Jacquelyn J. Brewton 8876 NW 115th Avenue Ocala, FL 34482

Dewey Brewton III 8876 NW 115th Avenue Ocala, FL 34482

Richard L. Smith

Midwest Marketing Company

P. O. Box 193 Vincennes, IN 47591

South Carolina Insurance Company Legal Department

1501 Lade Street

Columbia, SC 29201-0000

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.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEWEY BREWTON, JR., and DEWEY ) BREWTON, III, )

)

Petitioner, )

)

vs. ) CASE NO. 92-5682A

) JAMES R. and D. RANDALL SMITH, ) d/b/a MIDWEST MARKETING COMPANY, ) and SOUTH CAROLINA INSURANCE ) COMPANY, )

)

Respondent. )

)

CORRECTED RECOMMENDED ORDER

Pursuant to Rule 60Q-2.032, Florida Administrative Code, this corrected order is entered solely to correct the date of entry of the Recommended Order in this cause.

Upon due notice, this cause came on for formal hearing on January 27, 1993 in Ocala, Florida, before Ella Jane P. Davis, a duly assigned hearing officer of the Division of Administrative Hearings.

APPEARANCES

For Dewey Brewton, Jr.: Jacquelyn J. Brewton

as qualified representative for Dewey Brewton, Jr.

8876 NW 115th Avenue Ocala, Florida 34482

For Dewey Brewton, III: Dewey Brewton, III, pro se

8876 NW 115th Avenue Ocala, Florida 34482

For James R. and

D. Randall South d/b/a

Midwest Marketing Company: Richard L. Smith

as qualified representative for James R. and D. Randall Smith d/b/a Midwest Marketing

Company

Post Office Box 193 Vincennes, Indiana 47591

For South Carolina

Insurance Co.: No Appearance STATEMENT OF THE ISSUE

Whether or not the claimed amount of $1,545.82 is owed the Petitioner producer by the Respondent shipper for one load of watermelons and whether or not the bond is forfeit in that amount.

PRELIMINARY STATEMENT

Jacquelyn J. Brewton and Richard L. Smith were examined upon the record and accepted as qualified representative for Dewey Brewton, Jr. and Respondent shipper respectively, subject to after-filed authorizations from the named principal litigants. Those authorizations were duly filed, and the named persons are deemed qualified representatives for their principals.

Petitioners presented the oral testimony of Dewey Brewton, III and Jacquelyn J. Brewton and had one exhibit admitted in evidence.

Respondents presented the oral testimony of Richard L. Smith and James R. Smith and had nine exhibits submitted in evidence.

No transcript was filed. The parties waived filing proposed findings of fact.

FINDINGS OF FACT

1. Petitioners are growers of watermelons and qualify as "producers" under Section 604.15(5) F.S.

2. Respondents Smith are broker-shippers of watermelons and qualify as "dealers" under Section 604.15(1) F.S.

   
   

3. Respondent South Carolina Insurance Company is surety for Respondents Smith.

   
   

4. Petitioners Brewton and Respondents Smith have had a good business relationship overall, including the 1992 growing season during which several loads of high quality watermelons were sold by the Brewtons through the Smiths. Of the several loads of melons sold, only one load, the one invoiced on June 18, 1992, is at issue.

   
   

5. Regardless of oral agreements with varying conditions for other loads, the parties agreed as of June 18, 1992 that the load of June 18, 1992, invoice 2088, (R-5), would be paid for by Respondents Smith advancing harvest costs and agreeing to pay Petitioners for the load, minus the costs of harvesting, after Respondents had received payment from the recipient.

   
   

6. At the time of loading, everyone concerned felt the June 18, 1992 load might have some problems with it, but every attempt was made to load only quality product. Petitioners and Respondents each had input on which specific melons were loaded. At that time, Mr. Rick Smith o/b/o Respondents Smith advised Mr. Dewey Brewton, III that because the quality of the load was borderline and as a result of its borderline condition the whole load could be rejected at its ultimate destination, Respondents Smith wanted Petitioners Brewton to protect the Respondents Smith on the quality of the melons. He also specifically advised Dewey Brewton, III that the whole load could be rejected. The parties then entered into an agreement, partly oral and partly written.

   
   

7. Rick Smith and Dewey Brewton, III understood their agreement to mean that Petitioners would absorb any loss as a result of the quality of the watermelons from that point forward, but that Respondents would not come back against Petitioners for the costs Respondents had advanced on Petitioners' behalf or for the cost of the freight. To signify this, the words "grower protects shipper on quality" was written on the invoice.

   
   

8. On or about June 22, 1992, Rick Smith informed Dewey Brewton, III that the entire June 18, 1992 load had been rejected by the first receiver. At that time, Dewey Brewton, III accepted Rick Smith's representation and did not require further proof of rejection at the first point of delivery or request an independent inspection at the first point of delivery. He also acquiesced in Respondents shopping around for a second buyer who might take all or some of the load originally sent out on June 18, 1992, and did not request the return of Petitioners' watermelons. At that time, Rick Smith also told Dewey Brewton, III that the load might have to be held on the truck a day or two to ripen some of the watermelons for a second point of delivery. He again indicated that the whole load could be rejected again when the load was sent on to a second receiver. Dewey Brewton, III specifically agreed to let the melons ripen "a day or so," and did not request any change in the grower protection plan initially agreed to between the parties.

   
   

9. Respondents Smith were eventually able to market the melons to a second delivery point (consignee) in Michigan. That receiver complained that the melons started breaking down and he had to dump 735 melons. Pursuant to standard custom of the trade, Respondents accepted payment of $1,944.00 for the melons, subtracted $1,831.98 they had laid out in freight costs and also

   subtracted the $675.18 they had advanced on behalf of Petitioners to the harvester. Thus, Respondents sustained a net loss of $563.16. Respondents absorbed the $563.16 loss and did not require any repayment of harvesting costs advanced or any freight charges from Petitioners.

   
   

10. Dewey Brewton, III testified that he originally understood that "grower protection" meant that Petitioners "would stand behind their quality product until the ultimate point," but that he had interpreted a comment by Mr. Rick Smith on June 22, 1992 to the effect that "the grower (Petitioners) agreed to 'ride' the watermelons and the shipper (Respondent) agreed to 'ride' the freight" to mean that the growers (Petitioners) no longer had any duty to cover their own losses on the June 18, 1992 load of watermelons after the first rejection and up to final sale to the second buyer.

    
    

11. In light of Mr. Brewton's failure to change the written language concerning protection on the invoice, his knowledge from the day of initial shipment that the June 18, 1992 load was of dubious quality, his acceptance that the first recipient had rejected the load, and his agreement that Respondents could have a further waiting/ripening/shopping around period before ultimate sale, coupled with his knowledge from the very beginning that the June 18, 1992 load could be utterly rejected at any point so as to render the endeavor a complete loss to the Petitioners, Mr. Brewton's assumption that on June 22, 1992, Respondents Smith were voluntarily waiving their written agreement that "grower protects shipper on quality" was not reasonable. On June 22, 1992, the load had already been rejected once. At that stage, the outcome of the proposed sale was considerably more precarious than when the crop was loaded on June 18, 1992. It is also found Mr. Brewton's assumption that the agreement had been modified was not knowingly or intentionally induced by the Respondents and that the assumption was not contemporaneously conveyed to Respondents Smith so that they could disabuse Mr. Brewton of his error. Upon the foregoing, it is further found that the written initial agreement that "grower protects shipper on quality" was not altered on June 22, 1992 but continued in force.

    
    

    CONCLUSIONS OF LAW

    
    

12. The Division of Administrative Hearings has jurisdiction over the parties and subject matter in this cause, pursuant to Section 120.57(1), F.S..

    
    

13. In agricultural product bond enforcement proceedings, a Petitioner has the burden of proving, by a preponderance of the evidence, that the dealer defaulted on its agreement and is indebted to the Petitioner. See, Ernest Leclercq d/b/a Suncoast Farms v. Orin H. Cape Produce, Inc. d/b/a South Dade Product, 9 FALR 852 (1986). In this case, that burden has not been met.

RECOMMENDATION

Upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED

That the Department of Agriculture and Consumer Services enter a Final Order dismissing Petitioner's complaint.

RECOMMENDED this 4th day of March, 1993, at Tallahassee, Florida.

ELLA JANE P. 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 4th day of March, 1993.

COPIES FURNISHED:

Honorable Bob Crawford Commissioner of Agriculture Department of Agriculture and Consumer Services

The Capitol, PL-10 Tallahassee, FL 32399-0810

Richard Tritschler, Esquire Department of Agriculture and Consumer Services

The Capitol, PL-10 Tallahassee, FL 32399-0810

Brenda D. Hyatt, Chief Department of Agriculture and Consumer Services

The Capitol, PL-10 Tallahassee, FL 32399-0810

Jacquelyn J. Brewton 8876 NW 115th Avenue Ocala, FL 34482

Dewey Brewton III 8876 NW 115th Avenue Ocala, FL 34482

Richard L. Smith

Midwest Marketing Company

P. O. Box 193 Vincennes, IN 47591

South Carolina Insurance Company Legal Department

1501 Lade Street

Columbia, SC 29201-0000

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: 92-005682

Orders for Case No: 92-005682