STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

SECTION 1 FARMS, INC., )

)

Petitioner, )

)

vs. ) CASE NO. 94-1906A

) THOMPSON SALES CO., INC., and UNITED ) STATES FIDELITY AND GUARANTY COMPANY, )

)

Respondents. )

)

RECOMMENDED ORDER OF DISMISSAL

THIS CAUSE is before the undersigned pursuant to the Motion for Summary Judgment filed by Petitioner Section 1 Farms, Inc., on May 19, 1994; on the Order entered by the undersigned on May 31, 1994; and on the correspondence filed in response to that Order by Respondent Thompson Sales Co., Inc., on June 13, 1994. The record in this cause now reveals the following uncontroverted facts.

Petitioner filed a complaint and then an amended complaint seeking to recover the amount of $47,994.85 from Respondent Thompson Sales Co., Inc., or, alternatively, from Respondent United States Fidelity and Guaranty Company.

That matter was referred by the Department of Agriculture and Consumer Services to the Division of Administrative Hearings to conduct a formal proceeding. That cause was assigned DOAH Case No. 92-2049A and was subsequently scheduled for final hearing.

During the final hearing in that cause conducted on April 23, 1993, the parties entered into a settlement resolving all issues involved in that proceeding. The final hearing was thereafter adjourned, and the file of the Division of Administrative Hearings was closed by Order Closing File entered May 13, 1993.

The parties memorialized the terms of their agreement by entering into a formal Settlement Agreement which was signed by Respondent Thompson on May 7 and by Petitioner on May 21, 1993. Under the terms of that Settlement Agreement Respondent Thompson agreed to pay Petitioner the amount of $40,000 plus interest in accordance with a specific installment payment schedule. That Settlement Agreement further provided that if Respondent Thompson failed to make a required payment within 10 days of that payment's due date, Petitioner would give written notice to Respondent Thompson that if the installment were not paid within 8 days, Petitioner would accelerate the remaining unpaid balance and petition the Department for an order adjudicating Thompson Sales Co. to be indebted to Petitioner for the entire remaining obligation. That Settlement Agreement further provided that should Respondent Thompson fail to comply with the 8-day notice; the entire remaining obligation would immediately become due and payable without further notice, Petitioner would petition the Department for an order adjudicating Respondent Thompson indebted for the entire remaining obligation; and the Department, upon being presented with an affidavit attesting to the fact

of non-payment, the balance due, and a copy of the 8-day notice, shall enter an order adjudicating the amount due and further order the payment of such amount. Lastly, the Settlement Agreement provided that the Department would retain jurisdiction over the matter to enforce the terms of the Settlement Agreement.

Respondent Thompson made the initial payment of $6,421 required by the Settlement Agreement but failed to make the next installment payment of $7,021 which was due on October 25, 1993. Instead, Respondent Thompson sent a letter dated October 28, 1993, to Petitioner advising that Thompson was unable to maintain the payment schedule called for in the Settlement Agreement, offering instead to make payments as company income permitted. That letter specified that Respondent Thompson was not refusing to honor its obligation but would be delayed in doing so due to weather conditions.

On November 4, 1993, Petitioner sent Respondent Thompson the required letter notifying Thompson that it had failed to make the payment due on October 25, 1993, and that if that installment payment were not paid within 8 days, Petitioner would accelerate the remaining unpaid balance and petition the Department for an order adjudicating Thompson indebted for the remaining unpaid balance which amount was due and payable immediately. In response to that demand letter, Respondent Thompson still failed to make the payment due on October 25, 1993, in the amount of $7,021.

On or about November 15, 1993, Petitioner filed with the Department its Petition for Entry of Award pursuant to Settlement Agreement, attaching the documentation required to be filed with the Department. On March 10, 1994, the Department entered its order adjudicating the amount then due and owing to Petitioner as a result of the default in payment, providing that Respondent Thompson pay the outstanding balance within 15 days, and providing that Respondent United States Fidelity and Guaranty Company pay the accelerated remaining balance if Respondent Thompson failed to pay Petitioner within 15 days. That Order noted that there were no known disputed facts between Petitioner and Respondent Thompson. However, that Order advised that any party having a material interest affected by that Order could seek a hearing pursuant to Chapter 120, Florida Statutes.

By letter dated March 17, 1994, Respondent Thompson requested a hearing, pointing out that Petitioner had not included in its Petition the amounts of several payments made by Respondent Thompson after Petitioner sent its notice of default to Respondent Thompson. Upon receiving that request for hearing, the Department referred this matter to the Division of Administrative Hearings with instructions to conduct a second hearing. That transmittal letter did not identify any issues in dispute in this cause.

By Notice of Hearing entered May 9, 1994, this cause was scheduled for final hearing to be conducted on July 20, 1994, to determine whether Respondent Thompson had defaulted under the terms of its Settlement Agreement with Petitioner, thereby entitling Petitioner to immediate payment of the remaining unpaid balance from either Respondent Thompson or Respondent United States Fidelity and Guaranty Co.

On May 19, 1994, Petitioner filed a Motion for Summary Judgment alleging that Petitioner was entitled to immediate payment of the remaining unpaid balance since Respondent Thompson had failed to timely make the payments required under the Settlement Agreement, that Petitioner had sent the required 8-day notice letter, and that Petitioner had filed a petition with the Department requesting an order finding Thompson to be in default. The Motion

for Summary Judgment also advised that after Petitioner had filed its Petition for Entry of An Award Pursuant to Settlement Agreement, Respondent Thompson had made some additional payments as follows:

08/03/93 $ 6,421.00

12/29/93 1,500.00

01/31/94 1,500.00

04/06/94 750.00

04/06/94 1,000.00

Total $11,171.00

There is no authority for the entry of a summary judgment by a Hearing Officer of the Division of Administrative Hearings in this type of proceeding. In view of the allegations contained in Petitioner's Motion for Summary Judgment indicating there may not be any dispute among the parties hereto, however, an Order was entered on May 31, 1994, affording Respondent Thompson an opportunity to provide a written statement setting forth all facts which Thompson believes to be in dispute. Respondent Thompson timely responded to that Order by correspondence filed June 13, 1994. That correspondence reveals that Respondent Thompson does not dispute the Settlement Agreement entered into with Petitioner or its responsibility to make payments pursuant to that Settlement Agreement.

Rather, Respondent Thompson only alleges that it has suffered financial losses due to severe weather, is unable to comply with the payment schedule outlined in the Settlement Agreement, and is highly desirous of negotiating a different installment payment schedule. The exhibits to Respondent Thompson's correspondence, like the exhibits to Petitioner's Motion for Summary Judgment, reveal that Petitioner and Respondent Thompson agree that to date, Thompson has paid to Petitioner the total sum of $11,171 of the $40,000 owed pursuant to the Settlement Agreement.

Any relief from the installment payment schedule set forth in the Settlement Agreement can only come from Petitioner. No authority has been cited, and none has been found, that the Division of Administrative Hearings or the Department can modify or re-write settlement agreements entered into between private litigants. In the absence of Petitioner's consent to modification of the Settlement Agreement, the terms of the Settlement Agreement are clear: Respondent Thompson agreed to pay $40,000 plus interest, it has paid $11,171, it has defaulted by failing to maintain the installment payment schedule, the entire balance is now due and owing, and Petitioner is entitled to an order requiring Respondent Thompson to pay the entire remaining obligation. Should Respondent Thompson fail to timely pay the remaining unpaid balance, then Respondent United States Fidelity and Guaranty Company, as surety, shall satisfy Respondent Thompson's obligation.

Petitioner's Motion for Summary Judgment and the correspondence subsequently filed by Respondent Thompson reveal that the parties agree that the balance due and owing to Petitioner is the sum of $28,829 plus interest. The Settlement Agreement recites that the settlement amount of $40,000 shall bear interest at the rate of 6 percent per annum, simple interest, commencing on July 25, 1993, and ending on October 25, 1994. It is appropriate that the Department compute the interest as of the date of entry of its Final Order.

It is, therefore,

ORDERED that the final hearing in this cause scheduled for July 20, 1994, be and the same is hereby cancelled. It is further

RECOMMENDED that a Final Order be entered determining that Respondent Thompson Sales Co., Inc., is indebted to Petitioner in the amount of $28,829, together with interest computed in accordance with the Settlement Agreement between them. It is further

RECOMMENDED that the Final Order provide that should Respondent Thompson Sales Co., Inc., fail to pay the entire indebtedness to Petitioner by a date certain, then the indebtedness shall be paid by Respondent United States Fidelity and Guaranty Company.

DONE and ENTERED this 27th day of June, 1994, at Tallahassee, Florida.

LINDA M. RIGOT

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 27th day of June, 1994.

COPIES FURNISHED:

Steve Jones, Manager United States Fidelity &

Guaranty Company Post Office Box 17500

Jacksonville, Florida 32245

Nathan E. Nason, Esquire Nason, Gildan, Yeager, Gerson

& White

1645 Palm Beach Lakes Boulevard, Suite 1200 West Palm Beach, Florida 33401

Brenda Hyatt

Bureau of License & Bond

Department of Agriculture & Consumer Services

May Building, Room 508 Tallahassee, Florida 32399-0800

Richard Tritschler, Esquire Department of Agriculture & Consumer

Services

The Capitol PL-10

Tallahassee, Florida 32399-0810

John T. Thompson, President Thompson Sales Company, Inc. Post Office Box 515

Belle Glade, Florida 33430

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: 94-001906

Orders for Case No: 94-001906