STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

GOODSON FARMS, INC., )

)

Petitioner, )

)

vs. ) Case No. 98-4637A

) CONSOLIDATION SERVICES, INC. ) and NEW YORK SURETY COMPANY, )

)

Respondents. )

)

RECOMMENDED ORDER

Pursuant to notice, a hearing was conducted in this case pursuant to Section 120.57(1), Florida Statutes, on February 24, 1999, by video teleconference at sites in West Palm Beach and Tallahassee, Florida, before Stuart M. Lerner, a duly-designated Administrative Law Judge of the Division of Administrative Hearings.

APPEARANCES

For Petitioner: Mike D. Bess

Florida Fruit & Vegetable Association Post Office Box 140155

Orlando, Florida 32814 For Respondent Consolidated Services Inc:

Robert E. Goldman, Esquire 1543 Seventh Street, Suite 202 Santa Monica, California 90401

For Respondent New York Surety Company:

No Appearance

STATEMENT OF THE ISSUE

Whether Respondent Consolidated Services, Inc. (CSI) owes Petitioner $20,674.50 for peppers purchased from Petitioner, as alleged in Petitioner's Complaint.

PRELIMINARY STATEMENT

On or about September 14, 1998, Petitioner filed an Amended Complaint with the Department of Agriculture and Consumer Services (Department) alleging that CSI had failed to pay Petitioner for peppers Petitioner had sold to CSI on April 20, 1998, April 28, 1998, May 23, 1998, May 25, 1998, and May 26,

1998. According to the complaint, CSI owes Petitioner a total of

$20,674.50. New York Surety Company (NYSC) was identified in the complaint as surety for CSI.

By separate letters, each dated September 21, 1998, the Department notified CSI and NYSC of the filing of Petitioner's complaint and of their (CSI's and NYSC's) opportunity to file a written answer to the complaint and request a hearing on the matter.

On or about October 10, 1998, CSI filed with the Department an answer to Petitioner's complaint, in which it "denie[d] the allegations in the Amended Complaint" and "request[ed] a hearing on all matters." NYSC neither filed an answer to the Amended Complaint, nor requested a hearing.

On October 20, 1998, the Department referred the matter to the Division of Administrative Hearings to conduct the hearing

CSI had requested. The hearing was originally scheduled to commence on January 4, 1999, but it was continued and not held until February 24, 1999. Six witnesses testified at the hearing: Craig Sovine, John Haire, Betty Springfield, Harry Guice, Steven Macholl, and Robert Allen. In addition to the testimony of these six witnesses, the following exhibits were offered and received into evidence: Petitioner's Exhibits 1, 1a, 2, 2a, 3, 3a, 3b, 3c, 3d, 4, and 5, Respondent's Exhibits 1-1, 1-2, 1-3, 2-1, 2-2,

2-3, 3-1, 3-2, 3-3, 4-1, 4-2, 4-3, 5-1, 5-2, 5-3, 6, 7, 8,1 and

10, and Joint Exhibits 1A, 1B, 1C, and 1D. (Petitioner's Exhibit

7 was offered by Petitioner, but, at the urging of CSI, rejected by the undersigned.)

At the close of the evidentiary portion of the hearing, the undersigned announced on the record that proposed recommended orders had to be filed no later than April 5, 1999.

On March 31, 1999, the parties filed a motion requesting an extension of the deadline to file proposed recommended orders in the instant case. By Order issued April 1, 1999, the motion was granted and the filing deadline was extended to May 4, 1999.

At 5:12 p.m. on May 4, 1999, CSI filed a motion requesting a further extension of the deadline for filing its proposed recommended order in the instant case. (Earlier that same day, Petitioner had filed its Proposed Recommended Order in this case.) A hearing on the motion was held by telephone conference call on May 4, 1999. On May 6, 1999, the undersigned issued an

Order, in which he ruled on CSI's motion. The Order provided, in pertinent part, as follows:

Upon consideration, it is hereby ORDERED:

1. Consolidation's (CSI's) motion is granted.

   
   

2. Consolidation's proposed recommended order shall be filed no later than May 14, 1999.

   
   

3. Petitioner may file a supplemental or amended proposed recommended order no later than May 14, 1999.

   
   

4. Any mail that counsel for Consolidation receives from Petitioner's representative in this proceeding prior to May 15, 1999, shall be returned to Petitioner's representative unopened. (It appears that the only mail counsel for Consolidation can expect to receive from Petitioner's representative prior to May 15, 1999, is the envelope containing Petitioner's Proposed Recommended Order.)

   
   

5. On Monday, May 17, 1999, Petitioner shall serve on counsel for Consolidation, by facsimile transmission, a copy of the Proposed Recommended Order it has already filed, and any supplemental or amended proposed recommended order it may have decided to file on before May 14, 1999.

CSI filed its Proposed Recommended Order on May 14, 1999. Petitioner has filed neither a supplemental nor an amended proposed recommended order.

On May 22, 1999, CSI filed an additional post-hearing submittal, in which it stated the following:

I (CSI's counsel of record) reviewed Goodson Farms' proposed Recommended Order ("PRO"), and feel compelled to object to an inappropriate paragraph therein. The last

full paragraph on page "3" concerns CSI employee Mr. Paul Boris. There is no citation to the record to support the paragraph. Instead, the citation is to "Information furnished by Florida Department of Agriculture and Consumer Services Bureau of Licenses and Bond Division and USDA's PACA Branch."

Moreover, during the trial, your Honor sustained an objection to Goodson Farms' prior effort to impugn Mr. Boris' character. (T., p.253, lines 18-25; p. 254, lines 1-6).

Thank you for your consideration of this matter.

On May 24, 1999, Petitioner filed a response to CSI's post- hearing submittal, in which it stated that it "included the background information concerning Paul Boris in its argument because it is public information, and is not any 'new evidence.'"

The paragraph to which CSI objects reads, in pertinent part, as follows:

Paul Boris the former owner of MO-BO Enterprises, Pompano Beach, who was the Acting General Manager of CSI while Robert [Allen, CSI's owner] was away, had a difficult time in his own business. His company had 14 cases filed against it under the Florida License and Bond Law, and numerous PACA cases. The large number of unpaid suppliers made MO-BO one of the largest cases the state has seen. . . .

An examination of the record reveals that the statements made by Petitioner concerning Mr. Boris' "former" company are not supported by the record and therefore (unlike the remaining portions of its Proposed Recommended Order and the entirety of CSI's Proposed Recommended Order) have not been taken into

consideration by the undersigned in making his recommendation in the instant case.

FINDINGS OF FACT

Based upon the evidence adduced at hearing, and the record as a whole, the following findings of fact are made:

1. Petitioner is a producer of peppers and other produce. It owns and operates Goodson Farms in Balm, Florida, which is located on the west coast of the Florida peninsula.

2. At all times material to the instant case, Don and Jan Goodson have been the owners of Petitioner.

3. At all times material to the instant case, Steve Macholl has been Petitioner's sales manager.

4. At all times material to the instant case, Craig Sovine has been employed by Petitioner, "handl[ing, along with Mr. Macholl] sales[,] shipping[,] receiving," and related paperwork.

5. At all times material to the instant case, Mr. Macholl and Mr. Sovine have had the authority to enter into agreements on behalf of Petitioner to sell produce Petitioner grows on its farm.

6. At all times material to instant case, it has been Petitioner's practice to sell on only a cash basis, and not to extend credit, to any unbonded and unlicensed dealer who is not listed in either the "Blue Book" or "Red Book" (both of which, among other things, provide credit rating information) and with whom it does not have an established relationship.

7. CSI is a Florida-licensed dealer in agricultural products.

8. At all times material to the instant case, CSI had offices in Nogales, Arizona and Pompano Beach, Florida, which is located on the southeast coast of the Florida peninsula.

9. At all times material to the instant case, Robert Allen has been the owner of CSI.

10. At all times material to the instant case, Harry Guice was employed as a sales representative by CSI. As a sales representative, Mr. Guice had the authority to enter into agreements on behalf of CSI to purchase produce. Mr. Guice no longer works for CSI.

11. In or about April of 1998, Mr. Guice, acting in his capacity as CSI's sales representative, visited Goodson Farms to discuss with Petitioner's representatives, Mr. Macholl and Mr. Sovine, the possibility of CSI obtaining peppers from Petitioner. (Prior to this time, CSI had not had any direct business dealings with Petitioner.) Mr. Guice was accompanied on his visit by John Haire. Mr. Haire owned and operated a business, Signal Produce, from his home in Appollo Beach, Florida, which was located a short distance from Goodson Farms.

12. Although there is a conflict in the evidence, the more credible evidence establishes that the following occurred during and after Mr. Guice's visit.

13. Mr. Guice and Mr. Haire introduced themselves to Mr. Macholl and Mr. Sovine and presented them with their business cards. Mr. Guice's business card reflected that he was a sales representative for CSI. On the back of the card, Mr. Guice wrote down his home telephone number. Mr. Haire's business card reflected that he was with Signal Produce.

14. Mr. Guice told Mr. Macholl and Mr. Sovine that he was familiar with Petitioner's product because he had purchased Goodson Farms' produce (on behalf of CSI) from Don Monteef, who, Mr. Guice related, had recently passed away. (Mr. Monteef had been, like Mr. Haire, unbonded, unlicensed and not listed in either the "Blue Book" or "Red Book." Petitioner, at the outset, had done business with Mr. Monteef on a cash basis exclusively, but after having established a business relationship with him had allowed him to defer payment until "two or three days" after he "picked up" his order.)

15. Mr. Guice advised Mr. Macholl and Mr. Sovine that CSI was interested in purchasing product directly from Petitioner. He further indicated that Mr. Haire would assist him in making such purchases for CSI by visiting Goodson Farms and inspecting the produce available for purchase.

16. After determining that CSI had an exemplary credit rating, Mr. Macholl and Mr. Sovine informed Mr. Guice that Petitioner would sell to CSI on credit. When Mr. Guice indicated that CSI would make payment within seven to ten days, Mr. Macholl

    and Mr. Sovine told him that CSI would receive a discount if payment was actually made within that time frame.

17. During the period beginning April 20, 1998, and ending May 26, 1998, CSI, through Mr. Guice, verbally agreed to purchase from Petitioner, and Petitioner, through its representatives, verbally agreed to sell to CSI (FOB), five separate loads of peppers for a total price of $20,674.50 ($12,515.50 for a load purchased and sold on April 20, 1998; $2,561.00 for a load purchased and sold on April 29, 1998; $2,556.00 for a load purchased and sold on May 23, 1998; $612.00 for a load purchased and sold on May 25, 1998; and $2,430.00 for a load purchased and sold on May 26, 1998).2 All five loads were delivered to and accepted by CSI's agents (the truck drivers Mr. Guice dispatched to Goodson Farms). On one occasion (the May 23, 1998, delivery) Mr. Haire picked up the peppers from Goodson farms for CSI.

18. For each transaction, Petitioner prepared (in triplicate) a "manifest" ("manifest" number 0997 for the

    April 20, 1998, transaction; "manifest" 1089 for the April 29,

    
    

    1998, transaction; "manifest" number 1551 for the May 23, 1998,

    
    

    transaction; "manifest" number 1578 for the May 25, 1998, transaction; and "manifest" number 1601 for the May 26, 1998, transaction). The "manifest" indicated, among other things, the date of the transaction; the number of peppers sold; CSI's status as the purchaser of these peppers; the CSI purchase order number used to make the purchase (2311 for the April 20, 1998, purchase;

    2334 for the April 29, 1998, purchase; 2440 for the May 23, 1998,

    
    

    purchase; 2462 for the May 25, 1998, purchase; and 2327 for the May 26, 1998, purchase); the name of the trucking company and driver picking up the load for CSI, the tag number of the driver's truck; and when the load was picked up. The "manifest" was presented to the truck driver picking up the load for the driver's signature. After signing the "manifest," the driver was given a copy as a receipt.

19. Mr. Macholl thereafter added price information to the "manifest" to reflect the amount that, pursuant to the parties' verbal agreement, CSI owed Petitioner for the peppers in question. He then sent a copy of the "manifest" (with this additional information) to CSI's Pompano Beach office.

20. At all times material to the instant case, documents received at CSI's Pompano Beach Office that were labeled as "manifests" were placed in the mailboxes of the CSI sales representatives responsible for the transaction.

21. At no time prior to the commencement of the instant action did CSI advise Petitioner that it disputed any of the information contained in the above-described "manifests."

22. CSI received and paid invoices from John Haire/Signal Produce dated April 26, 1998, April 30, 1998, May 23, 1998, and May 25, 1998, seeking payment for peppers purportedly purchased by CSI with purchase order numbers 2311 (for $9,955.50), 2334 (for $2,406.00), 2440 (for $3,337.50), and 2462 (for $660.00),

    the same purchase orders that Mr. Guice gave Petitioner when he placed orders, on behalf of CSI, with Petitioner for the peppers that were the subject of the April 20, 1998, April 29, 1998,

    May 23, 1998, and May 25, 1998, transactions described above.

    
    

23. CSI has not yet paid Petitioner for the peppers that were the subject of these transactions; nor has it paid Petitioner for the peppers that were the subject of the May 26, 1998, transaction.

    CONCLUSIONS OF LAW

    
    

24. In accordance with Section 604.18, Florida Statutes, a "dealer in agricultural products," as defined in Section 604.15(1), Florida Statutes, must be licensed by the Department to transact business in the State of Florida. "Before any [such] license is issued, the applicant therefor shall make and deliver to the [D]epartment a surety bond or certificate of deposit in the amount of at least $3,000 or in such greater amount as the [D]epartment may determine, not exceeding the maximum amount of business done or estimated to be done in any month by the applicant." Section 604.20(1), Florida Statutes.

25. A "dealer in agricultural products" is defined in Section 604.15(1), Florida Statutes, as follows:

    "Dealer in agricultural products" means any person, whether itinerant or domiciled within this state, engaged within this state in the business of purchasing, receiving, or soliciting agricultural products from the producer or her or his agent or representative for resale or processing for sale; acting as an agent for such producer in

    the sale of agricultural products for the account of the producer on a net return basis; or acting as a negotiating broker between the producer or her or his agent or representative and the buyer.

    
    

26. At all times material hereto, CSI was a "dealer in agricultural products," as defined in Section 604.15(1), Florida Statutes, and was licensed as required by Section 604.18, Florida Statutes.

27. "Agricultural products," within the meaning of Section 604.15(1), Florida Statutes, are defined in Section 604.15(3), Florida Statutes, as follows:

    "Agricultural products" means the natural products of the farm, nursery, grove, orchard, vineyard, garden, and apiary (raw or manufactured); livestock; milk and milk products; poultry and poultry products; the fruit of the saw palmetto (meaning the fruit of the Serenoa repens); and limes (meaning the fruit Citrus aurantifolia, variety Persian, Tahiti, Bearss, or Florida Key limes) produced in the state, except tobacco, tropical foliage, sugarcane, and citrus other than limes.

28. Peppers are "agricultural products," as defined in Section 604.15(3), Florida Statutes.

29. "Any person claiming herself or himself to be damaged by any breach of the conditions of a bond or certificate of deposit assignment or agreement given by a licensed dealer in agricultural products as hereinbefore provided may enter complaint thereof against the dealer and against the surety, if any, to the [D]epartment, which complaint shall be a written statement of the facts constituting the complaint. Such

    complaint shall be filed within 6 months from the date of sale in instances involving direct sales or from the date on which the agricultural product was received by the dealer in agricultural products, as agent, to be sold for the producer. No complaint shall be filed pursuant to this section unless the transactions involved total at least $250 and occurred in a single license year." Section 604.21, Florida Statutes.

30. A Section 120.57(1), Florida Statutes, hearing on the complaint must be conducted if there are disputed issues of material fact. The complainant has the burden of proving the allegations of the complaint by a preponderance of the evidence. See Florida Department of Transportation v. J.W.C. Company, Inc.,

    396 So. 2d 778, 788 (Fla. 1st DCA 1981); Florida Department of Health and Rehabilitative Services v. Career Service Commission,

    289 So. 2d 412, 415 (Fla. 4th DCA 1974). If the Department determines that the complainant has met his burden of proof, it must "enter its order adjudicating the amount of indebtedness due to be paid by the dealer to the complainant," which order is "final upon issuance." Section 604.21(4), (5) and (6), Florida Statutes.

31. If payment is not made within 15 days after the issuance of the Department's order, the Department must, "in instances involving bonds, call upon the surety company to pay over to the [D]epartment out of the bond posted by the surety for such dealer or, in instances involving certificates of deposit,

    call upon the financial institution issuing such certificate to pay over to the [D]epartment out of the certificate under the conditions of the assignment or agreement, the amount called for in the order of the [D]epartment, not exceeding the amount of the bond or the principal of the certificate of deposit." Section 604.21(7) and (8), Florida Statutes.

32. In the instant case, Petitioner timely filed an Amended Complaint against CSI and its surety, NYSC, pursuant to Section 604.21, Florida Statutes, alleging that CSI had failed to pay Petitioner $20,674.50 for peppers it had purchased from Petitioner on April 20, 1998, April 28, 1998, May 23, 1998,

    May 25, 1998, and May 26, 1998. In its answer to the Amended Complaint, CSI disputed that it was indebted to Petitioner. The preponderance of the evidence adduced at the Section 120.57(1), Florida Statutes, hearing held in this case, however, demonstrates otherwise and establishes that CSI owes Petitioner

    $20,674.50 for the peppers in question.3

33. Accordingly, the Department should issue an order directing CSI to make payment to Petitioner in this amount.

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby

RECOMMENDED that the that the Department enter a final order

(1) finding that CSI is indebted to Petitioner in the amount of

$20,674.50, (2) directing CSI to make payment to Petitioner in

the amount of $20,674.50 within 15 days following the issuance of the order, and (3) announcing that if payment in full of this

$20,674.50 indebtedness is not timely made, the Department will seek recovery from NYSC, CSI's surety.

DONE AND ENTERED this 15th day of June, 1999, in Tallahassee, Florida.

STUART M. LERNER

Administrative Law Judge

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

(850) 488-9675 SUNCOM 278-9675

Fax Filing (850) 921-6847 www.doah.state.fl.us

Filed with the Clerk of the Division of Administrative Hearings this 15th day of June, 1999.

ENDNOTES

1/ Respondent's Exhibits 7 and 8, although marked for identification as CSI's exhibits, were ultimately offered into evidence by Petitioner.

2/ CSI also ordered and received a load of cucumbers from Petitioner, for which CSI paid Petitioner.

3/ While CSI does not dispute that it ultimately received these peppers, it claims that it purchased them, not from Petitioner, but from Mr. Haire (doing business as Signal Produce), whom it has already paid for the peppers, and that it is Mr. Haire, not CSI, who purchased the peppers from Petitioner and who therefore is indebted to Petitioner. Petitioner, on the other hand, contends that it sold the subject peppers directly to CSI. Both CSI and Petitioner presented evidence in support of their respective positions. Having carefully reviewed the evidence submitted by the parties, the undersigned has accepted as truthful and accurate the testimony of Petitioner's witnesses (Mr. Macholl and Mr. Sovine) that Petitioner dealt directly with CSI (through its sales representative, Mr. Guice) and did not

make any sales to Mr. Haire. Mr. Macholl's and Mr. Sovine's version of what transpired during and after their meeting with Mr. Guice and Mr. Haire (particularly when considered in conjunction with the documentary evidence presented at hearing) is simply more plausible than the contrary account given by Mr. Guice and Mr. Haire during their testimony.

COPIES FURNISHED:

Mike D. Bess

Florida Fruit & Vegetable Association Post Office Box 140155

Orlando, Florida 32814

Donn Goodson, President Goodson Farms, Inc.

Post Office Box 246 Balm, Florida 33503

Robert E. Goldman, Esquire 1543 Seventh Street, Suite 202

Santa Monica, California 90401

Robert Allen, President Consolidation Services, Inc.

1591 East Atlantic Boulevard, Suite 205 Pompano Beach, Florida 33060

Joseph Monahan

New York Surety Company

123 William Street

New York, New York 10038-3804

Richard Tritschler, General Counsel Department of Agriculture and

Consumer Services

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

Brenda Hyatt, Chief Department of Agriculture and

Consumer Services Mayo Building, Room 508

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: 98-004637

Orders for Case No: 98-004637