STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

RECOMMENDED ORDER

Pursuant to notice, a final hearing was conducted in this case on September 11, 2008, in Tampa, Florida, before Administrative Law Judge (ALJ) R. Bruce McKibben of the Division of Administrative Hearings (DOAH).

APPEARANCES

For Petitioner: Jake Alderman, pro se

Florida Sod, Inc. Post Office Box 404

LaBelle, Florida 33975 For Respondent Raysbrook Sod, Inc.:

Joseph E. Bushong, pro se Raysbrook Sod, Inc.

6604 Simmons Loop

Riverview, Florida 33569

For Respondent United Fire and Casualty Company, as surety: (No appearance)

STATEMENT OF THE ISSUES

The issues in this case are whether Raysbrook Sod, Inc. (Respondent), is indebted to Florida Sod, Inc. (Petitioner), related to the sale and purchase of sod, and, if so, in what

amount.

PRELIMINARY STATEMENT

In September 2007, the parties were engaged in a business transaction involving the sale of sod by Petitioner to Respondent. Petitioner filed a complaint with the Department of Agriculture and Consumer Services in February 2008, claiming that Respondent had failed to pay for the sod purchased from Petitioner. Respondent filed a response, claiming payment in full had been made. The matter was forwarded to DOAH, and the undersigned ALJ was assigned to the case. A final hearing was held at the place and time set forth above.

At the final hearing, neither party was represented by counsel. Petitioner's representative was Jake Alderman. Two other persons also testified on behalf of Petitioner: Jennifer Alderman and Danielle Hayes. Petitioner offered seven exhibits into evidence. Respondent's representative was Joseph Bushong. Jennifer Miller and Gabriel Monsivais also testified on Respondent's behalf. Respondent offered one exhibit into evidence.

The parties indicated at the final hearing that a transcript of the hearing would be ordered. The parties were given ten days from the date the transcript was filed at DOAH in which to filed their proposed findings of fact and conclusions of law. On October 13, 2008, over a month after the final hearing had occurred, but no transcript having been filed, the ALJ issued an Order to Show Cause why a recommended order should not be entered. In response, Petitioner filed a Proposed Recommended Order. As of the date of this Recommended Order, Respondent has not filed its proposed recommended order.

FINDINGS OF FACT

1. Petitioner is a corporation engaged in the business of harvesting sod. Petitioner is located in LaBelle, Florida.

2. Respondent is a corporation located in Riverview, Florida, and is also engaged in the sod business.

3. In September 2007, Respondent was interested in purchasing some sod in order to satisfy a customer's needs. Respondent's regional supervisor, Gabriel Monsivais, approached a gentleman by the name of Trampis Dowdle about purchasing sod. Monsivais had never met Dowdle and, in fact, knew him only as "Mr. Trampis."

4. Dowdle represented that he could obtain sod from Petitioner, and a deal was struck. There was no written contract between Monsivais and Dowdle, nor--quite interestingly-

   -between Petitioner and Respondent. Nonetheless, Respondent had its drivers go to Petitioner's sod field and begin loading sod for Respondent's use. In all, approximately 1,700 pallets of sod were acquired from Petitioner's field by Respondent.

5. Each time a load of pallets was taken, a Load Sheet was created to show the number of pallets, the location of the field, and the name of the person taking the sod. The driver of the truck was expected to sign the Load Sheet, indicating that the sod had indeed been received. There is no dispute between the parties about the number of pallets taken by Respondent's drivers.1

6. As sod was taken by Respondent, Petitioner would issue an invoice reflecting the amount of sod and the price to be paid. The invoices were sent to Respondent via U.S. Mail. The total amount billed for the sod was $42,559.16.

7. Respondent issued a check (No. 8899) in the amount of $1,271.16, made payable to Petitioner on November 30, 2007, in payment of the first invoice from Petitioner. No further checks from Respondent were received by Petitioner, leaving a balance due of $41,288.00.2

8. Respondent, however, did attempt to make payments for the sod it purchased. Respondent wrote checks to Dowdle based on Dowdle's representations that he either owned Petitioner's company or was working for Petitioner. In fact, Dowdle neither

   owned nor was in any way affiliated with Petitioner. Dowdle was apparently defrauding Respondent (and possibly Petitioner as well).

9. Respondent's representative, Joseph Bushong, and Petitioner's representative, Jake Alderman, had never met prior to the day of the final hearing in this matter. There was no written contract between the parties. The entire business relationship between the parties was done orally, based on conversations between Monsivais and Dowdle.

10. Nonetheless, Respondent did obtain over $42,000.00 worth of sod from Petitioner. Respondent does not contest this fact. Respondent's actions indicate acknowledgement of the presumed relationship between the parties.

11. Respondent submitted a credit application to Petitioner with references and credit information to be used by Petitioner in extending credit to Respondent for the sod it was purchasing. Respondent issued at least one check directly to Petitioner for payment of the sod in response to an invoice issued by Petitioner. The check was made payable to "Florida Sod" in the amount of $1,271.16. That check directly corresponds to the amount in Invoice No. 1697 from Petitioner dated October 8, 2007.

12. Respondent did receive additional invoices from Petitioner for the sod Respondent had purchased and received.

    Clearly, there was an understanding between the two companies that a business relationship existed.

13. After making its first payment to Petitioner, Respondent's subsequent payments for the sod were made directly to Dowdle and his companies. One such payment, made by way of a credit card, was actually applied to a restaurant with which Dowdle apparently had some business connection. Other payments were made via checks made payable to other Dowdle interests. Respondent made payments to Dowdle in the mistaken belief that Dowdle was the agent of or employed by Petitioner. In fact, Dowdle has never been affiliated with Petitioner.

14. Petitioner did not receive any of the payments made by Respondent to Dowdle. Petitioner and Dowdle are not related or affiliated in any fashion (other than a prior arm's-length sod purchase between the two).

15. It is clear that Dowdle received the payments intended for Petitioner in payment for the sod purchased by Respondent. Dowdle, whose whereabouts are unknown by the parties, did not provide Petitioner with the payments. Rather, from the evidence, it appears that Dowdle kept the payments, thereby committing a fraud on both Petitioner and Respondent.

16. Though both parties are somewhat at fault in this matter for failure to utilize normal and acceptable business practices, one or the other party must necessarily bear the

    burden of payment. The evidence supports Petitioner in this regard because it best followed normal business procedures. Had Respondent made its remittance checks payable to Petitioner (who had issued the invoices), Dowdle would not have been able to abscond with the money. Had Respondent obtained some affirmative proof that Dowdle was an agent of Petitioner, Respondent would have known better than to provide money to Dowdle. Had Respondent contacted Petitioner directly instead of relying on third parties (its foreman and Dowdle), the deception would have been uncovered.

17. However, the facts of this case support the proposition that Petitioner made a valid sale of sod to Respondent, and Respondent did not pay Petitioner for the sod.

    CONCLUSIONS OF LAW

    
    

18. The Division of Administrative Hearings has jurisdiction over the parties to and the subject matter of this proceeding pursuant to Section 120.569 and Subsection 120.57(1), Florida Statutes (2008).

19. The burden of proof in an administrative proceeding is on the party asserting the affirmative of an issue. Department

    of Banking and Finance, Division of Securities and Investor Protection v. Osbourne, Stern and Co., 670 So. 2d 932 (Fla. 1996); Ferris v. Turlington, 510 So. 2d 292 (Fla. 1987); Evans Packing Co. v. Department of Agriculture and Consumer Services,

    550 So. 2d 112 (Fla. 1st DCA 1989). In this case, Petitioner must prove by clear and convincing evidence that it provided goods or services to Respondent and that Respondent failed to pay for such goods or services. Based upon the testimony at final hearing, offered in full candor by each witness, it is clear there is no dispute as to receipt of goods by Respondent and non-receipt of payment by Petitioner.

20. Respondent's defense is essentially one of mistake and reliance of the apparent authority of Dowdle as an agent of Petitioner. An apparent agency exists only if three of the following elements are present: (1) A representation by the purported principal; (2) A reliance on that representation by a third party; and (3) A change in the position by the third party in reliance on the representation. Lensa Corporation v. Poinciana Gardens Association, Inc., 765 So. 2d 296, 298 (Fla. 4th DCA 2000), citing Ideal Foods, Inc. v. Action Leasing Corp.,

    413 So. 2d 416, 418 (Fla. 5th DCA 1982). There is no evidence whatsoever that Petitioner made any representation to Respondent concerning Dowdle's status as an agent. In fact, Petitioner and Respondent did not talk until the day of final hearing in this matter. Rather, the purported agent--Dowdle--made a representation to Respondent, and Respondent relied upon that representation to change its position.

21. "The rationale for the doctrine of apparent authority is that a principal should be estopped to deny the authority of an agent when the principal permitted an appearance of authority in the agent and, in so doing, justified a third party's reliance upon that appearance of authority as if it were actually conferred upon the agent." Roessler v. Novak, et al., 858 So. 2d 1158, 1161 (Fla. 2nd DCA 2003), citing Liberty Mutual Insurance Co. v. Sommers, 472 So. 2d 522, 524 (Fla. 1st DCA 1985); Irving v. Doctors Hosp. of Lake Worth, Inc., 415 So. 2d 55, 59 (Fla. 4th DCA 1982). In the instant case, there is no evidence that Petitioner gave Dowdle leave to act as if he had apparent authority for Petitioner.

22. This case involves an unfortunate scenario wherein neither party had an obvious intent to harm the other. However, Respondent's failure to use due care in carrying out his business resulted in harm to Petitioner for which recompense is warranted.

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 requiring Respondent to pay Petitioner the sum of $41,288.00 within 30 days of entry of a final order.

DONE AND ENTERED this 31st day of October, 2008, in Tallahassee, Leon County, Florida.

R. BRUCE MCKIBBEN Administrative Law Judge

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

(850) 488-9675

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

Filed with the Clerk of the Division of Administrative Hearings this 31st day of October, 2008.

ENDNOTES

1/ It appears the Load Sheets may not have fully complied with the administrative rule requirements in that they did not contain all required terms. However, inasmuch as the parties are not disputing the amount of sod, this discrepancy is not relevant to the current matter.

2/ The original invoices were somewhat in excess of the final stated amount. That is due to the fact that Respondent had not provided its Florida Resale Certificate for Sales Tax to Petitioner until after the first invoices were entered. A correction to the invoices, subtracting the sales tax, was made.

COPIES FURNISHED:

Joseph E. Bushong Raysbrook Sod, Inc. 6604 Simmons Loop

Riverview, Florida 33569

Christopher E. Green Department of Agriculture and

Consumer Services

Office of Citrus License and Bond Mayo Building

407 South Calhoun Street, Mail Station 38 Tallahassee, Florida 32399-0800

Jake Alderman Florida Sod, Inc. Post Office Box 404

LaBelle, Florida 33975

David A. Lange

United Fire & Casualty Company

118 Second Avenue Southeast Post Office Box 73909

Cedar Rapids, Iowa 52407-3909

Richard D. Tritschler, General Counsel Department of Agriculture and

Consumer Services

Mayo Building, Suite 520

407 South Calhoun Street Tallahassee, Florida 32399-0800

Honorable Charles H. Bronson 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 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: 08-003621

Orders for Case No: 08-003621