STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

MIKE ROSE, )

)

Complainant, )

)

vs. )

)

SOUTH FLORIDA GROWERS )

ASSOCIATION, INC., )

) CASE NO. 96-5654A

Respondent, )

)

and )

) AETNA CASUALTY AND SURETY COMPANY )

)

Co-respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, a formal hearing was held in this case on February 21, 1997, via video teleconference, with the complainant and the respondent appearing at Miami, Florida, before Patricia Hart Malono, a duly-designated Administrative Law Judge of the Division of Administrative Hearings, who was present in Tallahassee, Florida.

APPEARANCES

For Complainant: Mike Rose, pro se

15740 Southwest 240 Street

Miramar, Florida 33031

For Respondent: Harold E. Kendall, Jr., President

South Florida Growers Association Post Office Box 458

Goulds, Florida 33170 For Co-respondent: No appearance

STATEMENT OF THE ISSUES

Whether the respondent is indebted to the complainant for the sale of Florida-grown agricultural products, and, if so, the amount of the indebtedness.

PRELIMINARY STATEMENT

This is an action under the Agricultural Bond and Licensure Law, sections 604.15-.34, Florida Statutes. In a complaint dated October 4, 1996, as amended on October 23, 1996, Mike Rose alleged that the South Florida Growers Association, Inc. ("Growers Association"), owed him a total of $626.52 for 284 pounds of lychee nuts sold to the Growers Association on June 18, 1996. In an answer dated November 19, 1996, Harold E. Kendall, the president of the Growers Association, denied the allegation in the amended complaint, contending that the proceeds from the sale were properly paid to Mr. Rose. Because there are disputed issues of fact, the Department of Agriculture and Consumer Services forwarded the matter to the Division of Administrative Hearings for assignment of an Administrative Law Judge. By notice, this case was scheduled for hearing via video teleconference on February 21, 1997.

At hearing, Mr. Rose testified in his own behalf and offered four exhibits, which were received into evidence. The Growers Association offered the testimony of its president, Harold E. Kendall, Jr., and offered six exhibits, which were received into evidence.

No transcript of the hearing was filed with the Division. Both the complainant and the respondent submitted letters in which they addressed the issues in this case, and these submissions have been duly considered.

FINDINGS OF FACT

Based on the oral and documentary evidence presented at the final hearing and on the entire record of this proceeding, the following findings of fact are made:

1. Mr. Rose has a grove of lychee trees on his property; each year he harvests the lychee nuts for sale, but the sale of agricultural products is not his sole source of income.

2. In mid-June, 1996, Mr. Rose heard that the Growers Association was offering $3.50 per pound for lychees, the highest price of which he was aware. Mr. Rose took his fruit to the Growers Association on June 18, 1996. Mr. Rose had not done business with the Growers Association previously but had sold his fruit to another company.

3. Mr. Rose received a grower's receipt showing that, on June 18, 1996, he had brought in 298 pounds of fruit, that 14 pounds were culls, and that the Growers Association had packed 27.9 ten- pound boxes of fruit. The Growers Association packed only marketable fruit.

4. Ninety-nine percent of the tropical fruit grown in Florida is handled in pools.1 According to industry practice, the "handler" does not purchase the fruit outright but is responsible

   for packing, storing, selling, and shipping the fruit and for accounting for and remitting the proceeds of sale, minus expenses, to the members of the pool on a pro rata basis. The pools are composed of all growers whose fruit is packed during a designated period of time. Prices initially quoted to growers participating in a pooling arrangement are not guaranteed because the actual sales price may vary, depending on market conditions.

5. It was the practice of the Growers Association to handle lychees under a pooling arrangement, and the receipt Mr. Rose received from the Growers Association contained the notation "P- 407LY," which designated the pool to which Mr. Rose's fruit was assigned.

6. The Lychee P-407LY pool to which Mr. Rose's fruit was assigned consisted of fruit packed by the Growers Association between June 15 and 21, 1996. Mr. Rose was told on several occasions by employees of the Growers Association that he would receive $920.70 after expenses for the sale of his lychees. This amount was reflected in a Pool Price Report generated by the Growers Association on July 10, 1997, which also showed that a total of 107.6 pounds of fruit was included in the pool and that the Growers Association anticipated receiving a total of $4,088.65 for the sale of the fruit in the pool.

7. The Growers Association maintained in its files a work order showing that 83 ten-pound boxes of lychees were sold to Produce Services of America, Inc., at a price of $38.00 per box and

   that the fruit was shipped on June 21, 1996. According to the July

   
   

   10 report, the Growers Association had received payment of $932.90 for 24.55 ten-pound boxes of lychees sold to "L & V" on June 21, 1996, at $38.00 per box, but there is no indication in the report that the anticipated payment of $3,154.00 had been received from Produce Services of America.

8. Mr. Rose repeatedly called the Growers Association during July and August to inquire about when he would receive payment for his fruit. In accordance with the information he had consistently been given by employees of the Growers Association, he expected to receive $920.70. When he received a check from the Growers Association dated August 29, 1996, in the amount of $367.48, he called the Growers Association for an explanation of why he had received that amount rather than the $920.70 he was expecting. Ultimately, he spoke with Mr. Kendall in early September, who told him that the $367.48 was all he was going to receive as his pro rata share of the pool because Produce Services of American had not paid in full for the 83 boxes of fruit it purchased.

9. As reflected in the Pool Price Report dated September 19, 1996, the Growers Association received a total payment of only

   $1,847.42 for the fruit in the pool, rather than the $4,088.65 shown in the July 10, 1996, report. After the Growers Association's expenses were deducted, a total of $1,417.25 was distributed to the five growers in the pool. Although a copy of

   this final price report for the P-407LY pool should have accompanied Mr. Rose’s check, it did not.

10. According to the information contained in the September

    
    

    19 Pool Price Report, the shortfall in the amount received for the sale of the fruit in the pool is attributable to the Growers Association's receiving only $913.00, or $11.00 per box, for the sale of the 83 boxes of lychees to Produce Services of America, instead of the anticipated $3,154.00. The $913.00 was paid to the Growers Association by check dated August 19, 1996.

11. Mr. Rose did not present sufficient evidence to establish that he had a contract for the outright sale of 27.9 ten-pound boxes of lychees to the Growers Association. Rather, the evidence establishes that Mr. Rose's fruit was handled by the Growers Association under a pooling arrangement and that, consistent with the practice in the tropical fruit industry, the Growers Association assumed responsibility for packing, storing, selling, and shipping the fruit.

12. The Growers Association failed to offer any credible evidence to explain why Produce Services of America paid only

    $11.00 per box for the 83 boxes of fruit shipped from the pool, notwithstanding that the agreed sales price was $38.00 per box.2 Even if the fruit was damaged or in poor condition when it was delivered to Produce Services of America, the Growers Association packed 27.9 ten-pound boxes of marketable fruit on Mr. Rose’s account, and, once packed, it had complete control of the fruit in

    the pool. The Growers Association failed to offer any evidence to establish that it acted with reasonable care in fulfilling its responsibilities under the pool arrangement. Consequently, it bears the risk of loss rather than Mr. Rose and is indebted to him for $553.22, which is the difference between the $920.70 Mr. Rose would have received as his pro rata share of the pool had Produce Services of America paid the agreed-upon sales price of $38.00 per box and the $367.48 which the Growers Association paid to Mr. Rose by check dated August 29, 1996.

    CONCLUSIONS OF LAW

    
    

13. The Division of Administrative Hearings has jurisdiction over the subject matter of this proceeding and of the parties thereto pursuant to section 120.57(1), Florida Statutes (Supp. 1996).

14. Mr. Rose is a producer of agricultural products in the State of Florida, as defined in section 604.15(5), Florida Statutes.

15. The Growers Association is a dealer in agricultural products, as defined in section 604.15(1), Florida Statutes.

16. Dealers in agricultural products are required to be licensed by the Department of Agriculture and Consumer Services. Section 604.16, Fla. Stat. In order to be licensed, dealers must deliver a surety bond or certificate of deposit to the Department of Agriculture and Consumer Services, which "shall be conditioned to secure the faithful accounting for and payment to producers or their agents or representatives of the proceeds of all agricultural products handled or purchased by such dealer.” Section 604.20(1), Fla. Stat. Producers are permitted to file a complaint against dealers and their sureties for damage claimed as a result of the breach of this condition. Section 604.21(1), Fla. Stat.

17. The complainant in a proceeding initiated pursuant to section 604.21(1) has the burden of proving by a preponderance of the evidence the entitlement to the amounts sought to be recovered. See Florida Department of Transportation v. J.W.C. Co., Inc., 396

    So. 2d 778, 787 (Fla. 1st DCA 1981). However, even though the complainant bears the ultimate burden of proving the truth of the claim, once the complainant has made a prima facie case of entitlement to recover, the dealer has the obligation to come forward with evidence to refute that entitlement. See id.

18. Based on the facts found herein, Mr. Rose has met his burden in that the greater weight of the evidence establishes that he is entitled to recover the difference between the amount he would have been entitled to receive under the pool arrangement had Produce Services of America paid in full for the lychee nuts it purchased from the Growers Association and the amount he actually received as his pro rata share of the pool proceeds.

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 finding that the South Florida Growers Association, Inc., is indebted to Mike Rose for the sale of agricultural products and ordering the South Florida Growers Association, Inc., to pay Mike Rose $553.22 within fifteen

(15) days of the date its order becomes final. The Final Order should also provide that, in the event that the South Florida Growers Association, Inc., fails to pay Mike Rose $533.22 within the time specified, Aetna Casualty and Surety Company, as surety for the South Florida Growers Association, Inc., must provide payment under the conditions and provisions of its bond.

DONE AND ENTERED this 10th day of April, 1997, in Tallahassee, Leon County, Florida.

PATRICIA HART MALONO

Administrative Law Judge

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

(904) 488-9675 SUNCOM 278-9675

Fax Filing (904) 921-6847

Filed with the Clerk of the Division of Administrative Hearings this 10th day of April, 1997.

ENDNOTES

1 Lychees are classified as tropical fruit in section 603.161(1), Florida Statutes.

2 The Growers Association presented the testimony of its president, Harold Kendall, who did not testify from personal knowledge as to the reason Produce Services of America refused to pay the agreed price of $38.00 per ten-pound box for the lychees. No employee of the Growers Association who had personal knowledge of the transaction was called to testify; no U.S.D.A. inspection certificate was offered into evidence to establish the condition of the fruit when it was received by Produce Services of America; and no evidence was offered by the Growers Association to establish that the market price of the lychees was less than the agreed-upon sales price of $38.00 per ten-pound box.

The only evidence presented to explain why Produce Services of America paid only $11.00 per box for the 83 boxes of lychees shipped by the Growers Association was a letter dated August 2, 1996, purportedly from a J. C. Mann of Produce Services of America to a Mr. Jeff McDermot, with an attachment of what purports to be an invoice documenting Produce Services of America's sale of 83 ten-pound boxes of lychee nuts at $11.00 per box to "Sam Cho Produce" in New York City. Mr. Kendall testified that Mr. McDermot was not, and never had been, an employee of the Growers Association. Because both Mr. Kendall's testimony and the contents of the letter and invoice are hearsay and would not be admissible over objection in civil actions, this evidence cannot be the basis for a finding of fact. See section 120.57(1)(c), Fla. Stat.

COPIES FURNISHED:

Mike Rose

15740 Southwest 240th Street Miami, Florida 33031

Harold E. Kendall, Jr.

South Florida Growers Association Post Office Box 458

Goulds, Florida 33170

Aetna Casualty and Surety Company Legal Department

151 Farmington Avenue Hartford, Connecticut 06156

Hon. Bob Crawford Commissioner of Agriculture Department of Agriculture &

Consumer Services The Capitol, PL 10

Tallahassee, Florida 32399-0810

Richard Tritschler, General Counsel Department of Agriculture &

Consumer Services The Capitol, PL 10

Tallahassee, Florida 32399-0810

Brenda D. Hyatt, Chief Department of Agriculture &

Consumer Services

Bureau of License and Bond

508 Mayo Building

Tallahassee, Florida 32399-0800

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within 15 days from the date of 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: 96-005654

Orders for Case No: 96-005654