STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

VEGGIE GROWERS, INC., )

)

Petitioner, )

)

vs. ) Case No. 10-0060

) FIVE BROTHERS PRODUCE AND OLD ) REPUBLIC SURETY COMPANY, AS ) SURETY, )

)

Respondents. )

)

RECOMMENDED ORDER

Pursuant to notice, a formal hearing was held in this case on April 7, 2010, by video teleconference, and on May 18, 2010, by telephone, with the parties appearing in Miami, Florida, before Patricia M. Hart, a duly-designated Administrative Law Judge of the Division of Administrative Hearings, who presided in Tallahassee, Florida.

APPEARANCES

For Petitioner: Maria Goody, President

Veggie Growers, Inc. c/o Robert Marquez

188 Lagoon Street Southwest Palm Bay, Florida 32908

For Respondent: Tracy Cash, Finance Manager

Five Brothers Produce, Inc. Post Office Box 349168 Homestead, Florida 33034-9168

STATEMENT OF THE ISSUE

Whether the Respondent Five Brothers Produce owes the Petitioner $16,493.00 for green beans that Five Brothers Produce accepted, sold, and shipped to the buyer as the Petitioner’s agent/broker.

PRELIMINARY STATEMENT

This is an action under the Agricultural Bond and Licensure Law, Sections 604.15-604.34, Florida Statutes (2009).1 On December 8, 2009, Veggie Growers, Inc. (“Veggie Growers”) filed an Amended Agricultural Products Dealer Claim Form with the Department of Agriculture and Consumer Services (“Department”), in which it claimed that Five Brothers Produce owed it $16,493.00 for green snap beans it delivered to Five Brothers Produce, who acted as Veggie Growers’ agent/broker. The Department served a Notice of Filing and a copy of the amended claim to Five Brothers Produce and to Old Republic Surety Company (“surety company”).

Five Brothers Produce responded and disputed that it owed Veggie Growers any amount for the beans; the surety company did not respond and did not appear in this proceeding. The Department transmitted the matter to the Division of Administrative Hearings for assignment of an administrative law judge. Pursuant to notice, the final hearing was held on April 7, 2010.

At the hearing on April 7, 2010, Robert Marquez both spoke for and acted as interpreter for his mother, Maria Goody, who is

the owner and President of Veggie Growers and who does not speak English. Ms. Goody stated through Mr. Marquez, that she had consulted an attorney regarding this matter but that he was unable to appear at the final hearing scheduled on April 7, 2010. Ms. Goody requested a continuance of the final hearing so that her attorney could be present to represent her. Tracy Cash, the representative of Five Brothers Produce, reluctantly agreed to the continuance and requested that the continuation of the final hearing be held prior to the end of May 2010. The final hearing was, therefore, continued and the final hearing was scheduled for May 18, 2010, via telephone.

At the final telephonic hearing on May 18, 2010, Veggie Growers presented the testimony of Robert Marquez and Maria Goody; Veggie Growers did not offer any exhibits into evidence. Five Brothers Produce presented the testimony of Fred Moore and Tracy Cash; Respondent’s Exhibits 1 through 16 were offered and received into evidence.

At the conclusion of the hearing, Mr. Marquez indicated that his attorney would order a copy of the transcript and would contact the Division of Administrative Hearings to confirm that the transcript was ordered. The undersigned indicated that, if Veggie Growers’ attorney did not contact the Division of Administrative Hearings by May 21, 2010, an order would be entered advising the parties of the date on which they were to

file proposed findings of fact and conclusions of law. No word was received within the time specified and an order was entered on May 28, 2010, advising the parties that their proposed findings of fact and conclusions of law were to be filed with the Division of Administrative Hearings no later than June 11, 2010.

No transcript of the proceedings was filed with the Division of Administrative Hearings. Veggie Growers did not file a post- hearing submittal. Five Brothers Produce timely filed proposed findings of fact and conclusions of law, which have been considered in the preparation of this Recommended Order.

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. Five Brothers Produce accepts agricultural products from growers for sale or consignment and acts as an agent/broker for the growers. Currently, Five Brothers Produce represents 25 to

   30 growers as agent/broker. Five Brothers Produce has a surety bond issued by Old Republic Surety Company to secure payment of sums owed to agricultural producers.

2. Veggie Growers grows agricultural produce in fields located in Homestead, Florida.

3. On or about April 28, 2009, a buyer employed by Five Brothers Produce examined Veggie Growers' crop of green beans in

   
   

   the field. He suggested that Veggie Growers pick the beans and deliver them to Five Brothers Produce for sale.

4. On April 28, 2009, Veggie Growers delivered 796 boxes of hand-picked green beans to Five Brothers Produce. The beans were inspected and accepted for sale by an employee of Five Brothers Produce.

5. The Marketing Agreement and Statement included on the Grower Receipt for the produce given to Veggie Growers by Five Brothers Produce provided in relevant part:

   The grower gives Five Brothers Produce the right to sell or consign to the general trade. No guarantees as to sales price are made and only the amounts actually received by Five Brothers Produce, less selling charges, cooler charges, and any other charges will be paid to the grower. Final settlement will be made within a reasonable length of time and may be held until payment is received from the purchaser.

   
   

6. On April 29, 2009, Veggie Growers delivered 514 boxes of hand-picked green beans to Five Brothers Produce. The beans were inspected and accepted for sale by an employee of Five Brothers Produce.

7. The Marketing Agreement and Statement included on the Grower Receipt for the produce delivered by Five Brothers Produce to Veggie Growers on April 29, 2010, included the same provision as quoted above.

   
   

8. Veggie Growers received a picking advance of $3980.00 on the beans from Five Brothers Produce on April 28, 2010, and it delivered a total of 1310 boxes of green beans to Five Brothers Produce on April 28 and 29, 2009. The beans picked by Veggie Growers on April 28 and 29, 2009, were in good condition when they were picked, packed, and delivered to Five Brothers Produce.

9. On April 29, 2009, Five Brothers Produce sold 50 crates of Veggie Growers’ beans to J. H. Harvey for $15.00 per crate.

10. On April 30, 2009, Five Brothers Produce shipped the remaining 1260 crates of green beans received from Veggie Growers to Chenail Fruits et Legumes (“Chenail”) in Montreal, Quebec, Canada. In this shipment, Five Brothers Produce also included 84 crates of beans obtained from growers other than Veggie Growers, for a total of 1344 crates of green beans.

11. The invoice issued by Five Brothers Produce reflecting the sale of 1344 boxes of green beans to Chenail identified the price of the beans as $11.50 per box, together with a Ryan recorder, which is used to measure the temperatures during transit, and pallets furnished by Five Brothers Produce, for a total due from Chenail of $16,671.50.

12. Chenail received the shipment of beans at 11:30 on May 3, 2009, and requested an inspection at 5:32 on May 4, 2009, stating on the inspection request that it was “protesting the

    above described load due to poor condition on arrival.” Pursuant

    
    

    to the agreement between Chenail and Five Brothers Produce, a private inspection report was ordered, which was to include digital temperatures, “as conclusive evidence of the condition of this product noted upon arrival at destination.”

13. The Certificate of Inspection indicated that the inspection report was completed at 7:00 on May 4, 2009, and that no decay was in evidence; that an average of 15 percent of the beans exhibited “dark green pepper spot discoloration ((resembling bruising) affecting materially the appearance),” with a range of six percent to 22 percent; that an average of two percent of the beans exhibited russeting; an average of seven percent of the beans were flabby, with a range of three percent to 12 percent; and that an average of four percent of the beans exhibited wind scars, with a range of one percent to 10 percent. The report also reflected that the bean crates were “in good order properly packed.

14. Finally, the pulp temperature of the beans was noted in the report at 40 degrees Fahrenheit; the warehouse temperature was noted as 40 degrees; and the outside temperature was noted as

    63 degrees. No temperature was noted for the vehicle in which the beans had been shipped, presumably because the beans had been off-loaded.

15. A Commodity References form for beans was attached to the inspection report. It included information that the United

    
    

    States Department of Agriculture recommended storing snap beans at 40 to 45 degrees Fahrenheit; that the “standard grade tolerances” for defects in U.S. No. 1 snap beans is 13 percent total, “including 5 % serious including 1 % soft decay.” The Commodity References form also included information that, for a “[m]aximum percentage for a 5 day normal transit,” the “Suitable Shipping Condition/F.O.B. Good Delivery Guideline” for snap beans is 18 percent total, “including 8 % serious including 3 % decay.” The condition of the beans shipped by Five Brothers Produce exceeded the standard tolerances.

16. The Commodity References form also indicated that, if the beans were held at a temperature cooler than 40 degrees Fahrenheit, there would have been evidence of decay in the form of surface pitting and russeting, with rusty brown specks, and the beans would “then become spotted and sticky when removed to warmer temperatures.” There was no indication on the Certificate of Inspection that the beans exhibited any of these features except that an average of two percent of the beans were russeted.

17. Pursuant to these standards, Chenail properly considered the 1344 crates of beans shipped from Five Brothers Produce to be defective.

18. Based on the results of the inspection report of the 1344 crates of beans, Chenail sent Five Brothers Produce a statement reflecting that it would remit to Five Brothers Produce

    
    

    a total of $1,275.70 U.S. The statement showed that Chenail paid nothing for 374 crates of beans; $6.00 Canadian per crate for

    112 crates; $8.00 Canadian per crate for 336 crates; and

    
    

    $9.00 Canadian per crate for 522 crates.

    
    

19. Based on these figures, Chenail calculated that the total gross amount due to be paid to Five Brothers Produce for the 1344 crates of beans was $6,446.40 U.S. Chenail then deducted $5,170.70 U.S. for inspection, pallets, recorder, transport, and warehousing costs and indicated it would remit to Five Brothers Produce a net total of $1275.70, or an average of

    $0.95 per crate of beans.

    
    

20. Five Brothers Produce subsequently sent an invoice to Chenail for $1,491.20 U.S., or a average of $1.11 per crate, after deducting the charges Chenail had included for the pallets and the recorder, which had been furnished by Five Brothers Produce.

21. Five Brothers Produce sent Veggie Growers a Grower Lot Status form showing the history of the 1310 crates of hand-picked “bush” beans it received from Veggie Growers on April 28 and 29, 2009. The form reflects the sale of 50 crates of beans to J. H. Harvey on April 29, 2009, at $15.00 per crate. It also reflects a price $0.95 per crate for the 1260 crates of Veggie Growers snap beans included in the shipment to Chenail, for a total sale amount of $1,458.09. Five Brothers Produce deducted from this

    
    

    amount a $50.00 loading fee and a $30.00 selling charge for the beans sold to J. H. Harvey and the $3,980.00 advance paid to Veggie Growers for the beans. Five Brothers Produce did not take a loading charge or a selling charge for the 1344 crates of beans sent to Chenail.

22. According to the calculations of Five Brothers Produce, Veggie Growers had a net return of -$2,601.91 on the 1310 crates of beans.

23. The market dictates how quickly Five Brothers Produce can sell the produce it accepts as agent/broker. In late April, snap beans generally do not sell quickly because there are a lot of beans available.

24. Beans should be sold and shipped as soon as possible after picking. Snap beans will usually last only seven days from the date of picking.

25. It normally takes two or three days for a shipment of produce to travel from Five Brothers Produce to Canada. Sometimes beans that are in good condition at the time they are shipped are not good enough to survive the trip to Canada. Summary

26. The evidence presented by Veggie Growers is not sufficient to establish that it is entitled to any additional payment for the beans it delivered to Five Brothers Produce on April 28 and 29, 2009. Veggie Growers established that it picked

    
    

    the beans and delivered them to Five Brothers Produce at the suggestion of a representative of Five Brothers Produce, who inspected the beans in the field and found them acceptable, and that the beans were acceptable when delivered to Five Brothers Produce. Indeed, on April 29, 2009, when the final 514 crates of beans were delivered to Five Brothers Produce, Five Brothers Produce sold 50 crates for $15.00 per crate, establishing that the beans were of good quality when delivered.

27. Nonetheless, there was no evidence presented to suggest that Five Brothers Produce did not use its best efforts to locate a buyer for the remaining 1260 crates of beans within a reasonable time after the beans were delivered, nor was any evidence presented to suggest that Five Brothers Produce did not properly store, load, and ship the beans to Chenail. The beans were shipped from Five Brothers Produce on April 30, 2009; the inspection report shows that the beans were properly packed; and there is no indication that the beans had been stored at an

    improper temperature.

    
    

    CONCLUSIONS OF LAW

    
    

28. The Division of Administrative Hearings has jurisdiction over the subject matter of this proceeding and of the parties thereto pursuant to Sections 120.569 and 120.57(1), Florida Statutes.

    
    

    
    

    part:

29. Section 604.15, Florida Statutes, provides in pertinent

    
    

    For the purpose of ss. 604.15-604.34, the following words and terms, when used, shall be construed to mean:

    
    

    1. "Agricultural products" means the natural products of the farm, nursery, grove, orchard, vineyard, garden, and apiary (raw or manufactured); sod; tropical foliage; horticulture; hay; livestock; milk and milk products; poultry and poultry products; the fruit of the saw palmetto (meaning the fruit of the Serenoa repens); limes (meaning the fruit Citrus aurantifolia, variety Persian, Tahiti, Bearss, or Florida Key limes); and any other nonexempt agricultural products produced in the state, except tobacco, sugarcane, timber and timber byproducts, forest products as defined in s. 591.17, and citrus other than limes.

       
       

    2. "Dealer in agricultural products" means any person, partnership, corporation, or other business entity, 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 the producer's 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 producer's agent or representative and the buyer.

       * * *

       
       

       1. "Producer" means any grower of agricultural products produced in the state.

          
          

       2. "Producer's agent" means the seller of agricultural products for the account of a producer or group of producers on a net return basis, wherein the producer's agent

       
       

       acts as the agent for the producer or group of producers and pays the producer of such products all of the net proceeds after subtracting all authorized and allowable deductions. Allowable deductions may include, but are not limited to: packing charges, shipping charges, boxes, crates, billing, commission fees, cooling charges, pallets, and other deductible charges or fees agreed upon by the producer and producer's agent.

       
       

30. Based on the findings of fact herein, Five Brothers Produce is an dealer in agricultural products and a producer’s agent, and Veggie Growers is a producer pursuant to

    Section 604.15(2), (9), and (10), Florida Statutes.

    
    

31. Dealers in agricultural products are required to be licensed by the Department of Agriculture and Consumer Services. See § 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.”

    § 604.20(1), Fla. Stat. Five Brothers Produce has a surety bond issued by Old Republic Surety Company.

32. Producers are permitted to file a complaint against dealers and their sureties for damage claimed as a result of the breach of this condition. See § 604.21(1), Fla. Stat.

    
    

33. 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.

34. Based on the findings of fact herein, Veggie Growers has not met its burden of proving by a preponderance of the evidence that it is entitled to additional payment from Five Brothers Produce for the snap beans delivered to Five Brothers Produce for sale on April 28 and 29, 2009. Although Veggie Growers presented a prima facie case of entitlement to recover, Five Brothers Produce produced ample evidence to refute the entitlement.

35. The Marketing Agreement and Statement on the Grower Receipt Veggie Growers received from Five Brothers Produce for the 1310 crates of beans advised Veggie Growers that its payment would be limited to “only the amounts actually received by Five Brothers Produce.” Although not expressly stated in the Marketing Agreement and Statement included on the Grower Receipt

provided to Veggie Growers, Five Brothers Produce was obligated to use its best efforts sell the produce and to properly store and ship the produce. The evidence presented by Five Brothers Produce was sufficient to establish that it met these obligations.

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 complaint of Veggie Growers, Inc., against Five Brothers Produce, Inc.

DONE AND ENTERED this 29th day of July, 2010, in Tallahassee, Leon County, Florida.

PATRICIA M. HART

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 29th day of July, 2010.

ENDNOTE

1/ All references to the Florida Statutes herein are to the 2009 edition unless otherwise indicated.

COPIES FURNISHED:

Christopher E. Green, Esquire Department of Agriculture and

Consumer Services

Office of Citrus License and Bond Mayo Building, Mail Station 38 Tallahassee, Florida 32399-0800

Tracy Cash

Five Brothers Produce, Inc. Post Office Box 349168 Homestead, Florida 33034-9168

Maria Goody

Veggie Growers, Inc. c/o Robert Marquez

188 Lagoon Street Southwest Palm Bay, Florida 32908

Jeffrey Passafaro

Old Republic Surety Company Post Office Box 1635

Milwaukee, Wisconsin 53201-1635

Charles H. Bronson, Commissioner Department of Agriculture and

Consumer Services

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

Richard D. Tritschler, General Counsel Department of Agriculture and

Consumer Services

407 South Calhoun Street, Suite 520 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: 10-000060

Orders for Case No: 10-000060