STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

GIN BROWN MATTHEWS, d/b/a COOK ) BROWN FARMS, )

)

Petitioner, )

)

vs. ) Case No. 00-4934A

)

J. G. L. PRODUCE COMPANY and )

REDLAND INSURANCE COMPANY, )

)

Respondents. )

_______________________________ )

RECOMMENDED ORDER

Pursuant to notice, a formal hearing was held in this case before Lawrence P. Stevenson, a duly-designated Administrative Law Judge of the Division of Administrative Hearings, in Fort Myers, Florida, on February 28, 2001.

APPEARANCES

For Petitioner: Harold M. Stevens, Esquire

Post Office Drawer 1440 Fort Myers, Florida 33902

For Respondent, J.G.L. Produce Company:

Edward L. Myrick, Jr., Esquire Beighley & Myrick, P.A.

1255 West Atlantic Boulevard Suite F-2

Pompano Beach, Florida 33069 For Respondent, Redland Insurance Company:

No appearance

STATEMENT OF THE ISSUE

The issue in this case is whether Respondents owe Petitioner $13,512.09 for watermelons, as alleged in the Amended Complaint.

PRELIMINARY STATEMENT

By an Amended Complaint filed with the Bureau of License and Bond, Florida Department of Agriculture and Consumer Services (the "Department"), on or about November 8, 2000, Gin Brown Matthews, d/b/a Cook Brown Farms ("Cook Brown Farms") seeks payment of an alleged balance due on watermelons sold and delivered to Respondent J.G.L. Produce Company ("J.G.L. Produce") by Cook Brown Farms pursuant to an oral contract of sale. J.G.L. Produce filed an Answer to the Amended Complaint denying the alleged balance due and requested a formal hearing. By letter dated December 7, 2000, the Department referred this matter to the Division of Administrative Hearings for the assignment of an Administrative Law Judge and for the conduct of a formal hearing.

At the hearing on February 28, 2001, Cook Brown Farms presented the testimony of Andrew J. Cook and William Doberly. Cook Brown Farms offered no exhibits. J.G.L. Produce presented the testimony of John W. Johnson, Jr. and Jay Delk.

1. Produce's Exhibits 1 through 5 were admitted into

   evidence, with the proviso that those portions of the exhibits constituting uncorroborated hearsay could not form the basis of findings of fact.

   No transcript of the hearing was filed with the Division of Administrative Hearings. Cook Brown Farms and J.G.L. Produce timely filed Proposed Recommended Orders, on or before March 9, 2001.

   FINDINGS OF FACT

   
   

   Upon consideration of the oral and documentary evidence adduced at the hearing, the following relevant findings of fact are made.

   1. Cook Brown Farms is a melon farm in Punta Gorda, Florida. At all times pertinent to this proceeding, Cook Brown Farms was a "producer" as defined in Subsection 604.15(5), Florida Statutes, of agricultural products in the State of Florida. Melons come within the definition of "agricultural products" as defined in Subsection 604.15(3), Florida Statutes.

   2. J.G.L. Produce is a Florida Corporation, owned by John W. Johnson, Jr., and located in Pompano Beach, Florida. At times pertinent to this proceeding, J.G.L. Produce was licensed as a "dealer in agricultural products" as defined in Subsection 604.15(1), Florida Statutes.

   3. Andrew J. Cook, a principal owner of Cook Brown Farms, and Mr. Johnson of J.G.L. Produce entered into an oral agreement regarding the sale of watermelons grown at Cook Brown Farms. The core of this case is a dispute concerning the nature of this agreement.

   4. Mr. Cook testified that, under the agreement, J.G.L. Produce would purchase the melons at the farm at their daily market price, plus 1/2 cent to cover Cook Brown Farms' cost of picking, sorting, and placing the melons in special bins and in special pallets required by the ultimate purchaser, Kroger Supermarkets. J.G.L. Produce would provide the bins and pallets and would provide the trucks to ship the melons.

   5. Mr. Johnson testified that the agreement was not for purchase but for brokerage of the melons. J.G.L. Produce would act as broker of Cook Brown Farms' watermelons, use its best efforts to sell the melons at the highest price available, and pay Cook Brown Farms the proceeds of the sale, minus expenses and a brokerage fee of one cent per pound.

   6. Mr. Johnson testified that J.G.L. Produce never took title to or purchased the melons, and that the risk of loss always remained on Cook Brown Farms. Mr. Johnson testified that he approached Mr. Cook about the melons because he had a ready buyer in another local dealer, Delk Produce, which had a longstanding arrangement to provide melons to Kroger.

      Mr. Johnson agreed with Mr. Cook that the arrangement included the provision of bins and pallets by J.G.L. Produce, though Mr. Johnson stated that the arrangement also called for J.G.L. Produce to retain $0.015 per pound from the amount paid to Cook Brown Farms to cover the cost of the bins and pallets.

   7. J.G.L. Produce took approximately 24 truck loads of watermelons from Cook Brown Farms. J.G.L. Produce deducted a one cent per pound brokerage fee from each load of melons it took, except for certain loads noted below, without contemporaneous objection from Cook Brown Farms.

   8. The Amended Complaint claims that J.G.L. Produce owes money to Cook Brown Farms for five of the loads taken by

      J.G.L. Produce. In sum, the Amended Complaint states that

      
      

      J.G.L. Produce owes Cook Brown Farms $19,991.74 for the five loads, less $6,479.65 already paid, for a total owing of

      $13,512.09.

      
      

   9. Item One of the Amended Complaint alleges that J.G.L. Produce owes $4,438.54 for a load of 38,596 pounds at a price of $0.115 per pound, sold on April 20, 2000. Item Two of the Amended Complaint alleges that J.G.L. Produce owes $4,625.30 for a load of 40,220 pounds at a price of $0.115 per pound, sold on April 21, 2000. The Amended Complaint alleges that the melons on these two loads were inspected and approved for shipment during loading by Delk Produce employee Freddie

      Ellis. The Amended Complaint states that Cook Brown Farms was paid in full for the loads on May 3, 2000, but that the contested amounts were deducted from subsequent settlements by

      J.G.L. Produce.

      
      

   10. The evidence established that the melons claimed under Item One were initially sold to Delk Produce for delivery to Kroger. On May 3, 2000, J.G.L. Produce paid Cook Brown Farms the amount of $4,438.54, which constituted the price for 38,596 pounds of melons at $0.125 per pound, less

       $385.96 for the one cent per pound brokerage fee. Jay Delk, the principal of Delk Produce, testified that this load was rejected by Kroger's buyer in Virginia due to "freshness," meaning that the melons were unsuitably green. Mr. Delk stated that the melons were taken to North Carolina to ripen and eventually sold at $0.06 per pound. The final return on this load, less the brokerage fee, was $1,543.84. In its final settlement with Cook Brown Farms on

       May 26, 2000, J.G.L. Produce deducted the difference between the original payment of $4,438.54 and the final payment of

       $1,543.84.

       
       

   11. The evidence established that the melons claimed under Item Two were initially sold to Delk Produce. On May 3, 2000, J.G.L. Produce paid Cook Brown Farms the amount of

       $5,809.80, which constituted the price for 50,520 pounds of

       watermelons at $0.125 per pound, less $505.20 for the one cent per pound brokerage fee. Seminole Produce purchased 10,300 pounds of this load at $0.145 per pound, or $1,493.50. The remainder of the load was rejected by Kroger due to freshness and had to be resold at a lesser price of $0.0346 per pound, or $1,391.00. In its final settlement with Cook Brown Farms on May 26, 2000, J.G.L. Produce deducted the difference between the original payment of $5,809.80 and the final payment (after deduction of the brokerage fee) of $2,576.11.

   12. The evidence established that the melons claimed under Item Three were sold to Delk Produce. On May 9, 2000,

       J.G.L. Produce paid Cook Brown Farms the amount of $2,731.30, which constituted the price for 42,020 pounds of watermelons at $0.0675 per pound, less $105.05 for the brokerage fee, reduced to $0.0025 per pound. Mr. Johnson testified that he decided to forego the full brokerage fee to save money for Mr. Cook and his farm, because it was "hurting" due to the rapidly plummeting price for watermelons. Mr. Johnson discovered at this time that Delk Produce had not been retaining the agreed- upon $0.015 per pound to cover the cost of bins and pallets and decided not to lose any more money on that item. In its final settlement with Cook Brown Farms on May 26, 2000, J.G.L. Produce deducted the difference between the original payment

       of $2,731.30 and $2,206.05, deducting $525.25 from the original payment to cover the cost of the bins and pallets.

   13. The evidence established that the melons claimed under Items Four and Five were originally shipped to Wal-Mart in Kentucky on April 29, 2000, and were rejected on the ground that the melons were not packed to specifications. The melons were trucked back to Florida at J.G.L. Produce's expense.

   14. The melons claimed under Item Four totaled 41,100 pounds. J.G.L. Produce divided the melons into four loads and sold them to four local dealers at an average price of $0.775 per pound, totaling $3,185.41. J.G.L. Produce deducted its

       $0.015 charge for bins and pallets, reducing the total to

       
       

       $2,671.51. J.G.L. Produce then deducted $1,750.00 from the total as reimbursement for the freight charge it paid to bring the melons back to Florida after their rejection by Wal-Mart.

       J.G.L. Produce did not include a brokerage fee. On May 26, 2000, J.G.L. Produce paid the remaining $921.51 to Cook Brown Farms as part of the final settlement.

   15. The melons claimed under Item Five totaled 45,600 pounds. J.G.L. Produce sold 2,426 pounds to Seminole Produce at $0.10 per pound, or $242.60. J.G.L. Produce sold the remaining 43,174 pounds to Belle Glade Produce at $0.065 per pound, or $2,800. From the total for Item Five, J.G.L. Produce deducted its $0.015 charge for bins and pallets and

       $1,950.00 for the freight charge it paid to bring the melons back to Florida after their rejection by Wal-Mart. J.G.L. Produce did not include a brokerage fee on this load of melons. On May 26, 2000, J.G.L. Produce paid the remaining

       $416.64 to Cook Brown Farms as part of the final settlement.

       
       

   16. The weight of the credible evidence, excluding the hearsay that was not supported by the direct testimony of Mr. Johnson, leads to the finding that there was a brokerage arrangement between the parties. J.G.L. Produce routinely deducted brokerage fees from its payments, without objection by Cook Brown Farms. This course of dealing strongly indicates a brokerage arrangement. Mr. Cook testified as to prior dealings with J.G.L. Produce, which also involved a brokerage arrangement.

   17. The evidence indicated that J.G.L. Produce fully accounted for the five loads of melons at issue, and paid Cook Brown Farms the full amounts due and owing for those loads.

       CONCLUSIONS OF LAW

       
       

   18. The Division of Administrative Hearings has jurisdiction over the parties and the subject matter of this proceeding pursuant to Section 120.57(1), Florida Statutes.

   19. The burden of proof is on the party asserting the affirmative of an issue before an administrative tribunal. Department of Banking and Finance v. Osborne Stern and Co.,

       670 So. 2d 932 (Fla. 1996); Florida Department of Transportation v. J.W.C. Company, Inc., 396 So. 2d 778 (Fla. 1st DCA 1981). The parties agree that there was a verbal agreement but disagree as to the terms of that verbal agreement.

   20. As the Petitioner, Cook Brown Farms bears the burden of demonstrating by a preponderance of the evidence that the verbal agreement between the parties was for the direct sale of watermelons. Cook Brown Farms did not meet this burden. The weight of the evidence supported the contention by J.G.L. Produce that the parties had a brokerage arrangement and that Cook Brown Farms therefore assumed the risk for the conditions of the melons and the price they might bring at the ultimate point of sale. The evidence further established that Cook Brown Farms was paid all amounts to which it was entitled under its agreement with J.G.L. Produce.

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 dismissing the Amended Complaint filed by Gin Brown Matthews, d/b/a Cook Brown Farms.

DONE AND ENTERED this 21st day of March, 2001, in Tallahassee, Leon County, Florida.

___________________________________ LAWRENCE P. STEVENSON

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) 921-6947 www.doah.state.fl.us

Filed with the Clerk of the Division of Administrative Hearings this 21st day of March, 2001.

COPIES FURNISHED:

Redland Insurance Company

222 South 15th Street, Suite 600, North Omaha, Nebraska 65102

Brenda D. Hyatt, Bureau Chief Department of Agriculture

and Consumer Services Mayo Building, Room 508

Tallahassee, Florida 32399-0800

John W. Johnson, President Post Office Box 1123

Pompano Beach, Florida 33061

Harold M. Stevens, Esquire Post Office Drawer 1440 Fort Myers, Florida 33902

Edward L. Myrick, Jr., Esquire Beighley & Myrick, P.A.

1255 West Atlantic Boulevard Suite F-2

Pompano Beach, Florida 33069

Richard D. Tritschler, General Counsel Department of Agriculture

and Consumer Services

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

Honorable Terry L. Rhodes Commissioner of Agriculture Department of Agriculture

and Consumer Services

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

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit 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: 00-004934

Orders for Case No: 00-004934