STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

THOMPSON FRUIT COMPANY, )

)

Petitioner, )

)

vs. ) CASE NO. 94-5398

) GOLDEN GEM GROWERS, INC., and ) FIDELITY & DEPOSIT COMPANY OF ) MARYLAND, )

)

Respondents. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, Richard Hixson, held a formal hearing in this case on April 6, 1995, in Lakeland, Florida.

APPEARANCES

For Petitioner: Ray Mattox, Esquire

170 East Central Avenue Post Office Box 917

Winter Haven, Florida 33882-0917

For Respondent: Jerri A. Blair, Esquire

Post Office Box 130 Tavares, Florida 32778

For Co-Responent: No appearance

STATEMENT OF THE ISSUES

The issues for determination in this case are whether Respondent, as a licensed citrus fruit dealer, misappropriated and marketed citrus fruit owned by Petitioner during the 1992-1993 shipping season, and further, whether such actions constitute a violation of the Florida Citrus Code for which proceeds of the citrus fruit dealer's bond executed by Co-Respondent should be paid to Petitioner in satisfaction of Petitioner's claim pursuant to Section 601.66, Florida Statutes.

PRELIMINARY STATEMENT

On September 27, 1993, Petitioner, Thompson Fruit Company, in accordance with section 601.66, Florida Statutes, filed a verified Complaint with the Department of Agriculture and Consumer Services (Department) alleging that Respondent, Golden Gem Growers, Inc., had taken citrus fruit belonging to Petitioner from a grove in Manatee County, Florida, during the 1992-1993 shipping season. Petitioner specifically alleged that 1540 boxes of grapefruit

at a value of $5.00 per box had been taken without permission by Respondent which resulted in damages to Petitioner in the amount of $7,700.00.

On April 18, 1994, Respondent filed a verified Answer denying the allegations of the Complaint, and requested a formal hearing in this case. Co- Respondent, Fidelity & Deposit Company of Maryland, did not make a separate appearance in this case.

The case was initially assigned to Robert R. Crittenden, a hearing officer designated by the Department, and hearing was set for July 11, 1994. By Order of the Department dated July 1, 1994, the initial hearing date was cancelled, and on September 26, 1994, the case was transferred without objection to the Division of Administrative Hearings for all further proceedings.

The hearing officer assigned by the Division set the case for hearing January 19, 1995. Subsequent to hearing, James Thompson, Jr., president of Petitioner and a primary witness in this case, became incapacitated as the result of a stroke, and the hearing was continued, and thereafter rescheduled for April 6, 1995.

At hearing on April 6, 1995, counsel for Petitioner appeared and reported that Mr. Thompson remained incapacitated and continued to be unavailable to appear and testify in this case. Upon motion of counsel for Respondent, and without objection, Mr. Thompson was declared unavailable pursuant to section 90.804(1)(d), Florida Statutes, and the deposition of Mr. Thompson filed in this case on September 26, 1994, was admitted into evidence.

At hearing Petitioner presented the deposition testimony of James Thompson, Jr., as indicated above, and the three exhibits attached to the verified Complaint filed in this case, which were admitted into evidence. Respondent presented the testimony of Phillip Conant and Martin Stephens, both of whom are officers of Respondent, Golden Gem Growers Inc., and also Frank Donahoe, the General Manager of Dundee Citrus Grower's Association, a witness who was qualified as an expert in citrus fruit marketing. Respondent also presented twelve exhibits which were admitted into evidence. Co-Respondent did not make a separate appearance at hearing. The Department's representative, Chet Payne, was in attendance at hearing.

No transcript of the hearing was filed. Respondent filed proposed findings of fact and conclusions of law on April 20, 1995. Petitioner did not file proposed findings of fact or conclusions of law. Separate determinations as to Respondent's proposed findings of fact are set forth in the Appendix attached hereto.

FINDINGS OF FACT

1. Petitioner, Thompson Fruit Company, is a Florida company with an office in Winter Haven, Florida. Petitioner has been in the business of buying and selling citrus fruit for many years. James Thompson, Jr., (Thompson) is the President of Petitioner. Petitioner was actively engaged in the business of buying and selling citrus fruit during the 1992-1993 shipping season.

   
   

2. Respondent, Golden Gem Growers, Inc., is a Florida corporation located in Umatilla, Florida, and was, at all material times, a licensed citrus fruit dealer under the provisions of chapter 601, Florida Statutes.

3. Respondent is a cooperative organization comprised of citrus fruit grower members. Respondent offers various services to its members including harvesting and marketing services. Respondent enters into individual contracts with its grower members to accept and market citrus fruit. During the 1992-1993 shipping season Respondent entered into more than one hundred contracts with its grower members relating to the acceptance and marketing of citrus fruit.

   
   

4. Co-Respondent, Fidelity & Deposit Company of Maryland, is a surety company qualified to do business in Florida, which, pursuant to section 601.61, Florida Statutes, during the 1992-1993 shipping season, executed a citrus fruit dealer's bond for Respondent in the amount of $100,000.

   
   

5. E.J. Higgins (Higgins) at all material times hereto was a citrus fruit grower and member of Respondent's cooperative organization. On July 23, 1991, Higgins entered into a Revised Grower Member Agreement with Respondent. In accordance with its contract with Higgins, Respondent was obligated to provide citrus fruit harvesting and marketing services to Higgins.

   
   

6. On July 5,1990, Higgins had entered into a Crop Agreement and a separate Lease Agreement relating to a citrus grove owned by Pomco Associates, Inc., (Pomco) in Manatee, County, Florida. The grove consisted of approximately

   52 acres of red grapefruit trees. The Crop Agreement made no reference to the duration of the agreement. The separate Lease Agreement between Higgins and Pomco expressly stated that the lease ended one year from the date of signing.

   
   

7. Higgins provided Respondent with a copy of his July 5, 1990 Crop Agreement and Lease Agreement with Pomco. Respondent thereafter accepted citrus fruit from Higgins which was harvested in the Pomco grove in the 1991-1992 season, and Respondent paid Higgins for the citrus fruit from the Pomco grove at that time.

   
   

8. In 1992 and early 1993, Higgins informed Phillip Conant, a Vice- President and Director of the Grower Division of Respondent, that Higgins was a holdover lessee under the Pomco lease, and was entitled to harvest the fruit from the Pomco grove. Under Higgins' contract with Respondent, Respondent was required to provide Higgins with harvesting equipment including trailers and boxes. Respondent was further required under the contract to accept and market the citrus fruit on Higgins' behalf. Respondent advanced Higgins $2,400 toward the marketing of the citrus fruit from the Pomco grove.

   
   

9. On January 23, 1993, Higgins requested that Respondent provide him with trailers and boxes to set up Higgins' crew for harvesting the Pomco grove. Respondent complied with Higgins' request, and dispatched a truck and trailer with a load of boxes to the Pomco grove. The truck, trailer and boxes were clearly marked and identified as belonging to Respondent.

   
   

10. Prior to this time, on or about December 2, 1992, Petitoner, by and through its President, James Thompson, Jr., had entered into a Purchase Contract and Agreement for the citrus fruit on the same Pomco grove in Manatee County, Florida, for the 1992-1993 season. Under the terms of the contract, Petitioner advanced Pomco $3,000 toward the purchase of the citrus fruit from the Pomco grove.

    
    

11. Shortly after Respondent dispatched its equipment to the Pomco grove on January 23, 1993, Thompson was informed that citrus fruit was being harvested from the Pomco grove. Thompson went to the grove, observed the boxes and trailers which were identified as belonging to Respondent, and called Phillip

    Conant to inform Conant that Thompson had a purchase contract and agreement for the citrus fruit from the Pomco grove. Thompson furnished Conant with a copy of the Petitioner's contract with Pomco. Thompson also contacted the Manatee County Sheriff's Department to remove Higgins' harvesting crew from the Pomco grove.

    
    

12. Respondent, by and through its director, Conant, then contacted Higgins who stated that he had obtained a legal opinion that as a holdover lessee under his prior crop agreement and lease with Pomco, he had a right to harvest the fruit from the Pomco grove. Higgins further stated that he expected Respondent to fulfill its contractual obligations to provide harvesting services and to market the citrus fruit.

    
    

13. Conant, by telephone, informed Thompson that in light of Higgins' representations, Respondent was unsure as to whether Higgins or Petitioner had a right to harvest the fruit. In response to this information, Thompson stated that he would pursue judicial remedies to resolve the dispute.

    
    

14. By letter dated February 4, 1993, Conant confirmed to Thompson that Respondent was taking a "hands off" position as to the dispute between Petitioner and Higgins over the citrus fruit from the Pomco grove. On February 5, 1993, Conant also sent a facsimile copy of the February 4, 1993, letter to Thompson and reiterated to Thompson that Respondent was not knowledgeable of the facts of Petitioner's dispute with Higgins, and would not be involved in the dispute.

    
    

15. Between February 7, 1993, and February 13, 1993, Respondent accepted three shipments of citrus fruit from the Pomco grove harvested by Higgins. The three shipments totalled 1,230 boxes. All the fruit accepted by Respondent from the Pomco grove was red grapefruit. At that point in the season, the market for red grapefruit was not good. The net value received by Respondent for the red grapefruit from the Pomco grove was $.9889 per box.

    
    

16. A reasonable average price for red grapefruit at that time was $.97 per box. Respondent received a reasonable price per box for the red grapefruit from the Pomco grove during the 1992-1993 shipping season.

    
    

17. Respondent received a total of $2,418.86 for the red grapefruit from the Pomco grove. The harvesting costs incurred by Respondent during the 1992- 1993 relating to the Pomco fruit were $1,402.40, leaving a balance of $1,216.34.

    
    

18. Respondent has placed the funds received from the Pomco grove fruit during the 1992-1993 shipping season in its escrow account pending a determination as to who is the rightful owner of the funds.

    
    

19. Respondent has provided an accurate accounting of the harvesting and marketing of the Pomco grove citrus fruit during the 1992-1993 season.

    
    

20. There has not been a judicial resolution of the dispute between Petitioner and Higgins.

    
    

    CONCLUSIONS OF LAW

    
    

21. The Division of Administrative Hearings has jurisdiction over the subject matter of and the parties to this action pursuant to section 120.57(1), and section 601.66, Florida Statutes.

22. Section 601.66, Florida Statutes, provides for the adjudication by the Department of Agriculture and Consumer Services of complaints against licensed citrus fruit dealers. The dispute in this case is between two sellers. Respondent, as a licensed citrus fruit dealer, is holding funds as to which it claims no interest, other than as a stakeholder. This case appears to be more in the nature of an interpleader action pursuant to Rule 1.240, Florida Rules of Civil Procedure, than an administrative complaint against Respondent as a licensed citrus fruit dealer for violations of the Florida Citrus Code under Section 601.64, Florida Statutes.

    
    

23. The evidence fails to establish the facts and circumstances of the complaint, in that there is insufficient competent substantial evidence to find that during the 1992-1993 shipping season, Respondent, as a licensed citrus fruit dealer, misappropriated, or otherwise failed to properly account for, citrus fruit owned by Petitioner.

RECOMMENDATION

Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that:

The Department of Agriculture and Consumer Services enter a Final Order pursuant to Section 601.66(4), Florida Statutes, dismissing the proceeding.

RECOMMENDED in Tallahassee, Leon County, Florida, this 18th day of May, 1995.

RICHARD HIXSON

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 18th day of May, 1995.

APPENDIX

Respondent's Proposed Findings:

Paragraphs 1 through 21 adopted and incorporated. Paragraphs 22 revised as to amount remaining due.

COPIES FURNISHED:

Commissioner Bob Crawford Commissioner of Agriculture The Capitol, PL-10 Tallahassee, FL 32399-0810

Brenda Hyatt, Chief Department of Agriculture

and Consumer Services Mayo Building, Room 508

Tallahassee, FL 32399-0800

Richard Tritschler, Esquire Department of Agriculture

and Consumer Services The Capitol, PL-10

Tallahassee, FL 32399-0810

Jerri A. Blair, Esquire Post Office Box 130 Tavares, FL 32778

Ray Mattox, Esquire

170 East Central Avenue Post Office Box 917

Winter Haven, FL 33882-0917

Golden Gem Growers Post Office Box 9 Umatilla, FL 32784

Fidelity & Deposit Company of Maryland

Post Office Box 1227 Baltimore MD 31203

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions to the 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 their 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: 94-005398

Orders for Case No: 94-005398