vs. )
) LARRY D. HENSON, d/b/a CORDELE, ) MELON DEPOT AND WESTERN SURETY, ) COMPANY, )
Respondents. )
Case No. 03-3514
Upon due notice, a disputed-fact hearing was conducted in this case on October 24, 2003, in Gainesville, Florida, before the Division of Administrative Hearings by its duly-assigned Administrative Law Judge, Ella Jane P. Davis.
As Qualified Representative 1516 Northeast 156th Avenue Gainesville, Florida 32609
For Respondent: Allan H. Kaye, Esquire
Whether Respondent, Larry D. Henson d/b/a Cordele Melon Depot, is liable to Petitioners for $5,817.40 for watermelons
grown by Petitioners and brokered by Respondent, pursuant to Chapter 604, Florida Statutes.
This cause was referred to the Division of Administrative Hearings on or about September 25, 2003.
It was scheduled for hearing on October 24, 2003, and at that time, Petitioner Owens was accepted as the qualified representative for both Petitioners. Petitioners presented the oral testimony of Tavaries Brown, Ermon Owens, Andy Mulberry, and Hardy Tate. Exhibits P-4, 5, and 6 were admitted in evidence.
Respondent's oral motion to dismiss at the close of Petitioners’ case was denied.
Respondent presented the oral testimony of Larry Henson, Hardy Tate, and Robbie Alvarez, and had Exhibits R-1, 2, 3, 4, and 5 admitted in evidence.
At the close of evidence, Respondent orally moved for attorney's fees, pursuant to Chapter 604, Florida Statutes. He was instructed to make any case therefor within his proposed recommended order.
A Transcript was filed on November 21, 2003.
The parties' respective timely-filed Proposed Recommended Orders have been considered in preparation of this Recommended Order.
Petitioner Andy Mulberry owns real property in Alachua County, Florida. He and Petitioner Ermon Owens (the growers) were partners or joint venturers for the purpose of producing a profitable watermelon crop on Mr. Mulberry's property during the summer of 2003.
Respondent Larry Henson is a licensed "dealer in agricultural products," as defined in Section 604.15(1), Florida Statutes. He lives out of state and his business is located in Cordele, Georgia.
On June 21, 2003, Hardy Tate contacted Andy Mulberry, stating that he had noticed Petitioners' crop of watermelons was of excellent quality. Mr. Tate stated that he believed his "boss," Respondent Larry Henson, would be interested in buying the watermelons. Mr. Tate had never worked with either Petitioners or Respondent before the present "deal," and had only met Mr. Henson a few months earlier.
Mr. Tate is a "watermelon bird dog." That means that he is a freelance promoter of agreements between growers and dealers. His business is connecting growers (in this case, Owens and Mulberry) and dealers, a/k/a brokers, (in this case, Henson, d/b/a Cordele Melon Depot) and facilitating their negotiations and harvest. He does not work regularly for any
one grower or dealer, but on his own initiative, acts as "go- between" for many growers and dealers.
Mr. Tate resides in Ft. Pierce, Florida, and does not maintain his own crew of harvesters. However, Mr. Tate will pick up laborers wherever he travels and oversee their harvesting of agricultural products. These laborers may be described as "local," "day," "itinerant," or "casual," depending upon which of several federal or state statutes may apply.
On June 21, 2003, Mr. Tate cajoled Mr. Mulberry into letting him put Mulberry and Henson together so Mr. Tate and his harvesters could “make a little money."
After being assured by Mr. Tate by telephone that
Mr. Mulberry had a good crop of medium-sized melons, Mr. Henson dealt directly with Mr. Mulberry by telephone to set the terms of their oral contract. Mr. Henson told Mr. Mulberry that he had a buyer in Ohio who needed quality, medium-sized watermelons. It was estimated that the Petitioners' field would yield three truckloads of such melons. Messrs. Henson and Mulberry initially negotiated a price of seven cents per pound for the first truckload and six cents per pound for all subsequent truckloads, to be paid by Mr. Henson to Petitioners after sale of the melons at the ultimate point of delivery in Ohio. There were apparently no price variations considered for
potential market price fluctuations or for the cost of freight (truck and driver).
Despite some vacillation in Mr. Mulberry's testimony, it is found that he clearly understood that Mr. Henson expected to receive top quality, medium-sized melons at the ultimate point of delivery in Cleveland, Ohio, for the first truckload.
Also, upon a preponderance of the credible evidence, it is found that Mr. Henson made clear to Mr. Mulberry that he expected the second truckload of melons also to consist of top quality medium-sized melons at the ultimate point of delivery in Cleveland, Ohio.
While there is some suggestion within the testimony that if the first two truckloads sold well in Cleveland, Ohio, Mr. Henson might have accepted a third truckload of mixed large and small melons, that is irrelevant in calculating what, if anything, the parties owe each other, because that truckload was sold elsewhere, and as a result, Petitioners are not seeking money from Respondent for that truckload. (See Finding of Fact
36.)
Petitioners had been ready to harvest several days
earlier, but had no harvesting crew on the premises or on standby 1/ and were short of money to hire one, so it was finally agreed between Mr. Henson, Mr. Mulberry, and Mr. Tate that
Mr. Henson would advance Petitioners the cost of harvesting and
loading (calculated at two cents per pound) and would forward to Mr. Tate the money to pay harvesters secured by Mr. Tate, with the understanding that this amount was to be deducted from the amount due from Mr. Henson to Petitioners for the first truckload of watermelons. This arrangement meant that Petitioners could then expect to be paid only five cents per pound and only four cents per pound for the first and second truckloads, respectively.
Mr. Tate hired a local crew, set the crew to picking, picked up the money advanced by Mr. Henson, and ultimately paid the crew for harvesting and loading.
It is also noted that on the two nights Mr. Tate's crew worked on Petitioners’ crop, Mr. Owens and his wife bought dinner for the crew.
Mr. Henson hired and sent a third-party truck and driver to Petitioners’ field on June 21, 2003. Although it is clear that all concerned were aware Mr. Henson was paying the cost of the freight by providing the truck and driver, there is no competent evidence that the parties ever reached any meeting of the minds as to how the cost of freight was ultimately to be allocated between the growers and broker. There also is no evidence in this record setting out the standard operating procedure or business custom by which such freight costs are normally allocated in the trade.
The crew selected by Mr. Tate harvested the first truckload of melons on or about June 21, 2003. Before they began harvesting, Mr. Tate cut open some medium-sized melons and showed the crew and Mr. Mulberry the size and quality of melons Mr. Henson wanted. Mr. Tate personally oversaw approximately 750 of the 2000 melons that went into the first truck provided by Mr. Henson. These melons appeared to be of good quality and the correct size (medium). However, Mr. Tate was not in the field all of the time.
In addition to being gone for approximately five hours on June 21, 2003, to pick up the wages of the harvesters which Mr. Henson had advanced, Mr. Tate was apparently off-premises on other days in other fields with other crews.
Although Mr. Tate testified that Mr. Henson would hold him responsible for the size and quality of the melons loaded, Mr. Tate assumed that Mr. Mulberry was in charge of loading his melons while he, Mr. Tate, went to pick up the funds advanced by Mr. Henson to pay the harvesting crew. According to Mr. Tate, it is common procedure for him to rely on the grower to see that the correct kind of melons are loaded, because if the right type and quality of melons do not arrive at the ultimate destination, the grower will not be paid. Because Mr. Tate's commission from Mr. Henson also would be based on the size and quality of the melons at the ultimate point of delivery, in Mr. Tate's opinion,
his and Mr. Mulberry's interests in loading good melons were the same.
With regard to the first truckload of melons, Mr. Tate was gone from Petitioners' field for approximately five hours. When he returned to the field, the first truckload was fully loaded. Mr. Tate remembered the quality of the first 700 melons he had seen loaded and was satisfied with the melons on the top of the truck, but he did not check the full depth of the first truckload for size and quality. The entire first truckload amounted to approximately 2000 melons, including approximately 1250 melons Mr. Tate had not personally checked.
The greater weight of the credible evidence is that the first truckload of melons left Mr. Mulberry’s field after midnight on June 22, 2003, that is, plus or minus 12:01 a.m. June 23, 2003.
The greater weight of the credible evidence is that the first truckload weighed in at 42,820 pounds of melons. Given Mr. Henson’s and Mr. Mulberry’s agreement with regard to harvesting costs, this weight would mean that the growers would be paid five cents per pound upon delivery of that weight of medium-sized, good quality melons in Cleveland, Ohio.
The first truckload of melons was delivered to Mr. Henson's customer in Cleveland, Ohio, on the morning of
June 24, 2003. There is no competent evidence that there was
any unreasonable delay in transit. Due to the poor quality and varying sizes of these melons (from small to large instead of all medium), the customer at the point of delivery refused delivery and telephoned Mr. Henson with that information.
Mr. Henson told the Ohio customer to call for a federal inspection of the first truckload of Petitioners' melons.
Mr. Henson then telephoned Mr. Mulberry and told him of the problem with the first truckload.
The federal inspection report, dated 11:20 a.m.,
June 24, 2003, declared that the average defects were 34 percent and serious defects were 26 percent of the first truckload, and further noted that many of the melons were in an advanced state of decay. On this basis, the Ohio customer, the Economy Produce Company, rejected the first truckload.
Ultimately, the Economy Produce Company sold the first truckload at a vastly reduced rate and transmitted the full amount received to Mr. Henson. This amount was $700.00.
There is considerable dispute about whether the second truckload had been loaded and had actually left Petitioners' field before Mr. Henson faxed the federal inspection report to Mr. Mulberry. The best reconstruction of chronological events is that Mr. Tate started to oversee the loading of the second truckload in Mr. Mulberry’s field on June 23, 2003, but loading
was not completed until June 24, 2003. On the morning of
June 24, 2003, when Mr. Henson telephoned Mr. Tate to tell him that the first truckload had been bad (see Finding of Fact 23), Mr. Tate was not in Mr. Mulberry’s melon field. Mr. Henson then faxed the federal inspection sheet to Mr. Mulberry. When
Mr. Tate later arrived at Mr. Mulberry's melon field, Mr. Tate explained the inspection sheet to Mr. Mulberry. Then,
Mr. Mulberry and Mr. Tate went to inspect the second truck which was still being loaded. Mr. Tate cut open several melons from the second truck and showed them to Mr. Mulberry, citing their large size and over-ripeness as probably the same problems that had occurred with the first truckload.
Reconciling the differences in the witnesses’ respective testimony as much as possible, it appears that both Mr. Mulberry and Mr. Tate knew that there were some off-size and some over-ripe melons in the second truckload, but Mr. Henson was allowed to believe, during his phone calls concerning the problems with the first truckload, that the second truckload had left the field and could not be held.
Mr. Tate warned Mr. Mulberry that there would be some problems with the second load too. Mr. Tate told Mr. Mulberry not to load any more large melons and to leave the large melons under a tree packed in straw. Mr. Tate then left the melon field. When Mr. Tate returned, the second truckload had already
left the field, and there were no large melons stacked under the tree. At that point, Mr. Tate realized Mr. Mulberry had allowed all sizes of melons to be loaded into the second truck.
If the second truckload, containing 47,000 pounds of melons, had arrived in Cleveland, Ohio, with the right size and quality of melons, Petitioners would have been entitled to four cents per pound from Mr. Henson, on the basis of their ultimate harvesting agreement.
When the truck driver radioed to Mr. Henson on
June 24, 2003, that he was en route to Cleveland, Ohio, with the second truckload of melons and that the truck was passing Lake City, Florida, Mr. Henson diverted the second truckload of melons to his wholesale warehouse in Cordele, Georgia.
Mr. Henson did this because he did not want to incur freight charges of approximately $1,800.00 on a second load of melons which could be as bad as the first.
Mr. Henson’s calling the truck into the Georgia facility did not sit well with the third-party truck driver, because he already had arranged a return run from Cleveland, Ohio, to Florida.
Upon Mr. Henson's own inspection and that of his qualified employee, Robbie Alvarez, in Cordele, Georgia,
Mr. Henson determined that the second truckload contained many melons which were over-ripe; some melons which were under-ripe;
some melons which were the wrong size; and some melons which were "bottle necks." Mr. Henson decided not to send the second truckload on to Ohio and sustain shipping charges in excess of what he could reasonably expect in payment for the watermelons.
Mr. Henson made several telephone calls to
Mr. Mulberry urging him to come to Cordele, Georgia, to inspect the second truckload and to work out some fair monetary arrangement. Mr. Mulberry promised to come to Cordele, Georgia, and so Mr. Henson let the second truckload sit, awaiting
Mr. Mulberry's arrival. However, Mr. Mulberry did not go to Cordele and did not notify Mr. Henson that he had changed his mind on the advice of the Alachua County Agent. Mr. Mulberry did not ever inform Mr. Henson that he was not coming to inspect the second truckload.
Messrs. Owens and Mulberry testified that Mr. Henson sent them "release from liability" papers to sign, so that Mr. Henson would not have to pay them for the two loads of
watermelons. Mr. Henson testified that he sent "release papers" so that he could sell the second load of watermelons in Cordele, Georgia. Given the evidence as a whole, Mr. Henson is the more credible witness on this issue.
After approximately a day and one-half, during which Mr. Mulberry failed to come to Georgia as he had promised,
Mr. Henson sold the second truckload of watermelons to By-Faith
Co. for $2,150.00 and let the irate third-party truck driver go about his business. Mr. Henson did this in order to minimize his loss on the second truckload of inferior watermelons.
Messrs. Mulberry and Owens sold the 1,300 melons of various sizes that would have made up the third truckload to Tavaries Brown, a local trucker, who testified that "they [the melons] were in pretty good shape, no sunburn." However, the sizes and prices of these melons were not proven-up, and “sunburn” is a different problem than decay. Therefore,
Mr. Brown’s testimony does not demonstrate that the preceding two truckloads consigned to Respondent were medium-sized, good quality melons.
Messrs. Mulberry and Owens sold other melons from their crop at a roadside stand, without any complaints from customers. However, the sizes and prices of these melons also was never proven-up so those sales also do not demonstrate that the first two truckloads consigned to Respondent were medium- sized, good quality melons.
Petitioners seek to receive $2,997.40 for the first load of melons and $2,820.00 for the second load of melons. These figures are based on Petitioners’ contention that both truckloads of melons consigned to Respondent were the right size and of good quality. Their calculations are based upon 42,820 pounds of melons in the first load, at seven cents per pound,
and 47,000 pounds of melons in the second load, at six cents per pound. Neither monetary amount accounts for the price Petitioners agreed they would owe Mr. Henson for the costs he advanced to them for harvesting at two cents per pound. Those figures would be $2,142.50 and $1,880.00, respectively.
Respondent calculated the following amounts as due to him as follows:
Load No. 1 Net return |
$ 700.00 |
Less 2¢ per pound advance (harvesting) | -856.40 |
Less freight to Cleveland, Ohio | -1,712.80 |
Less NWPD Dues | -8.56 |
Cordele Melon Depot Commission (waived) | 0.00 |
Net due Cordele Melon Depot | $1,877.76 |
Load No. 2 Net return from By-Faith Co. |
$2,150.00 |
Less 2¢ per pound advance (harvesting) | -940.00 |
Less freight to Cordele, Georgia | -400.00 |
Less NWPD Dues | -9.40 |
Net due Petitioners | $ 800.60 |
Net due Cordele Melon Depot | $1,877.76 |
Less net due Petitioners | -800.60 |
Balance due Cordele Melon Depot | $1,077.16 |
The evidence of the amounts paid to Respondent dealer is sufficient to establish the net returns of $700.00 and
$2,150.00 respectively. The charges for harvesting costs are a matter of simple arithmetic and appear correct. At the hearing, Petitioners did not challenge Respondent's charge for the NWPD dues, but neither was there any evidence of a meeting of the minds or a standard mode of conduct with regard to this amount.
Since there was no clear agreement that Petitioners would reimburse Respondent for freight costs, those calculations by Respondent are not substantiated. The amounts claimed for freight costs by Respondent also may not be established merely upon Respondent's testimony without some corroborating bill of lading or other document itemized by the third-party hauler.
CONCLUSIONS OF LAW
The Division of Administrative Hearings has jurisdiction of the parties and subject matter of this cause, pursuant to Section 120.57(1), Florida Statutes.
Petitioners are growers and sellers of "agricultural products," as defined in Section 604.15(3), Florida Statutes. Respondent is a licensed dealer.
The parties agree that there was an oral agreement, and up to a point, they do not disagree as to the terms of the agreement. Therefore, Petitioners must prove by a preponderance of the evidence that the terms of the oral agreement are as stated by them and that Respondent has defaulted on the agreement by failing to pay them in full under the terms of the oral agreement. Thereafter, Respondent has the burden of presenting evidence that Petitioners violated the oral agreement by failing to furnish melons that met the agreed-upon quality standard upon arrival at their destination. Dept. of Banking
and Finance v. Osborne Stern and Company, 670 So. 2d 932 (Fla. 1995).
Petitioners established, as their prima facie case, that if everything went well, they were entitled to five cents per pound for the first truckload of melons weighing 42,820 pounds and four cents for the second load of melons weighing 47,000 pounds. They proved that the parties' agreement was based on payment to them by Respondent out of the proceeds of the ultimate sale and that they had not been paid. Respondent showed that the ultimate sale price was reduced significantly by the quality of the product upon arrival at the point of retail sale. There was insufficient evidence to attribute the decay of the fruit to Respondent or to truck drivers hired by him. Therefore, unless there were some intervening cause or Respondent were otherwise responsible for the selection of poor melons, Petitioners must bear responsibility for the quality of melons at the ultimate point of sale.
If Mr. Tate were an employee of Respondent, Respondent would bear the cost of Mr. Tate's errors and omissions. Normally, the fact that Respondent agreed to pay Mr. Tate, an independent contractor, a commission for harvesting, would render Mr. Tate's errors and omissions in the selection of the melons attributable to Respondent also. However, here, there is a slightly different situation.
There was no clear agreement that Mr. Tate would be responsible for selecting good melons, or the correct size of melon. The preponderance of the evidence is that it was agreed that Mr. Tate did not direct the harvesting. It was only agreed that he would supply the harvesting crew and be a conduit for payment of the harvesting crew with money Respondent was essentially loaning to Petitioners in anticipation of a good sale. The whole of the evidence suggests that Mr. Mulberry had reason to suspect that the melons had been in the field too long and that Messrs. Mulberry and Tate took the risk on both loads that some melons were the wrong size. The testimony of Mr. Tate can be interpreted that he was scammed on the second load of melons by Mr. Mulberry's simply not following his directions. There is no evidence either of them was candid with Respondent as to what melons were being loaded, or when the second truckload was being loaded. Everyone concerned had essentially "bet" on each load's value at the point of sale. Under the circumstances of this case, Mr. Tate did not have apparent authority from Mr. Henson to select the melons. Therefore, errors in harvesting cannot be laid at Mr. Tate's feet, and certainly not at Respondent's feet. Moreover, the greater weight of the evidence is that medium-sized melons were what Respondent required for both truckloads, and even Mr. Mulberry conceded that only medium-sized melons were what Respondent
required for the first truckload. Since the parties' oral agreement contemplated only medium-sized melons, Petitioner Mulberry's knowingly loading other than medium-sized melons offended that oral agreement.
The federal inspection report on the first truckload was admitted into evidence without objection. It is an independent assessment that carries great weight.
The greater weight of the evidence supports Respondent's contention that the parties had a brokerage arrangement and that Petitioners therefore assumed the risk for the condition of the melons and the price they might bring at the ultimate point of sale.
Respondent's subsequent behavior also demonstrated an effort to minimize loss and treat Petitioners fairly under unfortunate circumstances.
Therefore, Petitioners must bear any loss occasioned by size and quality flaws in the melons.
Accordingly, on the first truckload, the sale price realized on the size and quality of melons actually delivered was $700.00. With the two cents per pound advance, Petitioners would still owe Respondent $856.40 minus $700.00, or $156.40. On the second truckload, the sale price of the melons was
$2,150.00. With the two cents per pound advance, Respondent would owe Petitioners $2,150.00 minus $940.00 or $1,210.00.
Under these calculations, the resultant total amount due to Petitioners would be $1,210.00 minus $156.40 or $1,053.60.
Respondent seeks to further reduce his debt to Petitioners by subtracting the cost of freight, but it is difficult to infer that the agreement allocated the cost of freight to Petitioners. Sparing Respondent that cost would leave Respondent in a largely risk-free transaction. The pivotal point, however, is that the record is simply silent on this element of the oral agreement and the amount of freight costs claimed by Respondent are uncorroborated. Therefore, Respondent is not entitled to set-off freight costs against Petitioner's proven claim, and Petitioners are entitled to be paid $1,053.60 by Respondent.
It is noted that Respondent's Proposed Recommended Order does not argue the attorney's fee issue, but under the foregoing Conclusions of Law that issue is moot.
RECOMMENDED that the Department of Agriculture and Consumer Services enter a Final Order requiring Respondent and/or its surety to pay Petitioners $1,053.60.
DONE AND ENTERED this 12th day of February, 2004, in Tallahassee, Leon County, Florida.
ELLA JANE P. DAVIS
Filed with the Clerk of the Division of Administrative Hearings this 12th day of February, 2004.
1/ The facts are disputed as to whether or not Petitioners could have either on their own, or with help from a local packer named Mr. Bell, gotten a pickup harvesting crew to Mr. Mulberry's field on or about June 21, 2003. [According to admissions in Petitioners' opening statement, which were not reiterated in all respects in the testimony presented, the following occurred: On or about June 15, 2003, Mr. Ross, an employee of Mr. Bell, a local produce packer located in nearby Williston, checked Petitioners' field and stated that Petitioners' melons were ready to pick at that time. However, Mr. Ross did not bring his harvesting crew to Petitioners' field on June 16, 2003, because of another harvesting job, and he sent word to Petitioners that Bell and Ross could not get their crew to Petitioners' field until June 18, 2003. In an act of generosity, Mr. Bell apparently sent Mr. Tate to Petitioners' field to make a different and independent "deal".] However, it is undisputed that Petitioners had no stand-by crew on their premises when Mr. Tate arrived.
As Qualified Representative 1516 Northeast 156th Avenue Gainesville, Florida 32609
Allan H. Kaye, Esquire
Brenda D. Hyatt, Bureau Chief Bureau of License and Bond
Richard D. Tritschler, General Counsel Department of Agriculture and Consumer Services The Capitol, Plaza Level 10
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.
