STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

KROME AVENUE BEAN GROWERS, INC., ) d/b/a KROME AVENUE BEAN SALES, )

)

Petitioner, )

)

vs. ) CASE NO. 95-2819A

) G & B PRODUCE COMPANY, INC., and ) FIDELITY & DEPOSIT COMPANY )

OF MARYLAND, as Surety, )

)

Respondents. )

)

RECOMMENDED ORDER

Pursuant to notice, the Division of Administrative Hearings, by its duly designated Hearing Officer, Claude B. Arrington, held a formal hearing in the above-styled case on September 22, 1995, in Fort Lauderdale, Florida.

APPEARANCES

For Petitioner: Mark Underwood, Vice President

Krome Avenue Bean Growers, Inc. d/b/a Krome Avenue Bean Sales Post Office Box 343536

Florida City, Florida 33034

For Respondent, William Rosenberg, Vice President G & B Produce G & B Produce Company, Inc.

Company, Inc.: 150 Southwest 12th Avenue, Suite 430

Pompano Beach, Florida 33069

For Respondent, Fidelity & Deposit

Company of Maryland: No Appearance

STATEMENT OF THE ISSUES

Whether Respondents are indebted to Petitioner for 106 boxes of beans sold by Petitioner to Respondent, G & B Produce Company, Inc. and, if so, the amount of the indebtedness.

PRELIMINARY STATEMENT

On February 1, 1995, Petitioner sold to Respondent 106 boxes of beans that Petitioner had purchased from another grower. When the beans were inspected in Houston, Texas, on February 6, 1995, a federal inspector found the beans to be "generally shriveled, flabby, watersoaked, or decayed." Based on that inspection, the beans were dumped. Petitioner contends that it is entitled to be compensated because the load of beans was dumped without giving Petitioner

the opportunity to salvage the load. Petitioner also contends that it should have had the opportunity to have a second inspection of the beans.

At the formal hearing, Mark A. Underwood and his father, Alan Underwood, testified on behalf of the Petitioner. No exhibits were offered on behalf of the Petitioner. Respondent did not present any testimony, but it did present one exhibit, which was accepted into evidence.

No transcript of the proceedings has been filed. Neither party filed a post-hearing submittal.

FINDINGS OF FACT

1. On January 30, 1995, Mark A. Underwood, Vice President of the Petitioner, was contacted by telephone by Troy Bennett, an employee of the Respondent, G & B Produce Company, Inc. (G & B). Mr. Bennett wanted to purchase

   150 boxes of beans.

   
   

2. Mr. Underwood informed Mr. Bennett that the Petitioner had sold all of the beans it had grown, but that Petitioner could obtain beans from another grower. Thereafter, Suncoast Farms, a grower that is not a party to this proceeding, sold to Petitioner 106 boxes of beans, which Petitioner re-sold to G & B on February 1, 1995. There was no written contract between Petitioner and Suncoast or between Petitioner and G & B.

   
   

3. Between February 1, 1995, and February 6, 1995, the beans were loaded onto one of G & B's trucks and transported to Houston, Texas. On February 6, 1995, the beans were inspected by a federal inspector in Houston, Texas. The inspector noted on his inspection report that the beans were "generally shriveled, flabby, watersoaked, or decayed". The use of the term "generally" by the inspector indicates that 90 percent or more of the beans were deficient. There is a notation on the inspection report that the beans would be dumped.

   
   

4. On February 7, 1995, Mr. Underwood was told by G & B's employee about the inspection and was notified that the beans had been dumped. Mr. Underwood was sent by fax a copy of the inspection report. He was also provided a copy of the dump certificate.

   
   

5. Petitioner was not consulted by G & B prior to the beans being dumped.

   1/

   
   

6. Since there was no written contract between Petitioner and G & B and no

   verbal agreement as to how a failed inspection would be handled, Petitioner must rely on industry practices to support its contention that it is entitled to be compensated because G & B did not give it the opportunity to salvage the load of beans. Petitioner did not establish what the practices of the industry are when a load of produce fails to pass inspection. In addition, Petitioner did not establish that it was commercially reasonable to attempt to salvage the load of beans at issue in this proceeding. There was no evidence as to the salvage value of the beans and there was no evidence as to costs that would have been incurred in an attempt to salvage the beans.

   
   

   CONCLUSIONS OF LAW

   
   

7. The Division of Administrative Hearings has jurisdiction over the subject matter and the parties hereto pursuant to Subsection 120.57(1), Florida Statutes.

8. Petitioner timely filed its complaint against Respondents pursuant to the provisions of Section 604.21, Florida Statutes.

   
   

9. Pursuant to Section 92.20, Florida Statutes, a federally issued inspection report relating to the grade, classification, quality, or condition of agricultural products is to be accepted as prima facie evidence as to the true grade, classification, condition or quality of the agricultural product at the time of the inspection.

   
   

10. As the party claiming breach of the sales contract with Respondent, Petitioner bears the burden of showing by a preponderance of the evidence its entitlement to the compensation it claims from the Respondents. Rule 28- 6.08(3), Florida Administrative Code. See also, Florida Department of Transportation v. J.W.C., Co., 396 So.2d 778 (Fla. 1st DCA 1981). Petitioner has not met that burden in this proceeding.

    
    

11. Under standard industry practices, Petitioner would not be paid full price unless and until the beans were delivered to destination and met grade. In the absence of evidence that the Respondent was responsible for the load's deteriorated quality, a failure to meet grade would ordinarily relieve a purchaser such as G & B of its obligation to pay the seller the agreed upon price. Since there was insufficient evidence to establish that Respondent was responsible for the poor quality of the beans, it is concluded that Petitioner is not entitled to full price for the load of beans.

    
    

12. Because there was insufficient evidence to establish that it had the right to salvage the beans either by contract or pursuant to commercially reasonable industry practices, Petitioner did not establish that it was entitled to partial compensation for the load of beans. Further, it would be speculation to enter a monetary award against Respondents and in favor of Petitioner in the absence of competent evidence as to the salvage value of the load of beans.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered by the Department of Agriculture

and Consumer Services that adopts the findings of fact and conclusions contained

herein and denies Petitioner's claim against Respondents.

DONE AND ENTERED this 30th day of October 1995 in Tallahassee, Leon County, Florida.

CLAUDE B. ARRINGTON

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 30th day of October 1995.

ENDNOTE

1/ Petitioner asserted that it would have requested a second inspection had it had the opportunity to do so. There was no reason to believe that a second inspection would have produced a different result, since there was no evidence that the first inspection was inaccurate or that the federal inspector misstated the condition of the beans.

COPIES FURNISHED:

Mark A. Underwood, Vice President Krome Avenue Bean Growers, Inc.

Post Office Box 343536 Florida City, Florida 33034

William Rosenberg, Vice President G & B Produce Company, Inc.

Suite 430

150 Southwest 12th Avenue Pompano Beach, Florida 33069

Fidelity & Deposit Company of Maryland Legal Department

Post Office Box 1227 Baltimore, Maryland 21203

Richard Tritschler, Esquire Department of Agriculture

and Consumer Services

The Capitol, Plaza Level 10 Tallahassee, Florida 32399-0810

Brenda D. Hyatt, Chief Department of Agriculture Bureau of License and Bond Mayo Building, Room 508

Tallahassee, Florida 32399-0800

Honorable Bob Crawford Commissioner of Agriculture The Capitol, Plaza Level 10

Tallahassee, Florida 32399-0810

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 ten 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: 95-002819

Orders for Case No: 95-002819