The Issue The issue is whether Respondent, Greenblades of Central Florida, Inc., and its surety, Western Surety Company, are liable for funds due to Petitioner from the sale of agricultural products.
Findings Of Fact Petitioner is a producer of agricultural products as defined by Section 604.15(5), Florida Statutes. Petitioner operates a nursery supply company that produces trees, plants, and other landscaping supplies at a location in Bunnell, Florida. Respondent is a dealer in agricultural products as defined by Section 604.15(1), Florida Statutes. At the time of the transactions in question, Respondent was a licensed dealer in agricultural products supported by a surety bond provided by Western Surety Company. This matter arose over a Producer Complaint filed by Petitioner on June 24, 2005, in which it alleged that Respondent owed $20,512.97, based upon five invoices for nursery goods delivered to various job sites where Respondent was providing landscaping services. The five invoices set forth in the original Producer Complaint are as follows: Date of Sale Invoice # Amount Dec. 28, 2004 64679 $2,884.72 Jan. 11, 2005 64828 3,878.75 Jan. 11, 2005 64829 1,926.00 Feb. 1, 2005 65229 2,086.50 Feb. 3, 2005 65127 9,737.00 Petitioner later amended its Complaint to withdraw its claims under Invoice Nos. 65229 and 65127, as untimely filed, resulting in an amended amount due of $8,689.47. Respondent filed a Response to the Producer Complaint on August 15, 2005, admitting the amounts due under Invoice Nos. 64679 and 64828, totaling $6,763.47, and denying the amount claimed in Invoice No. 64829, $1,926.00, as never having been filled, resulting in Respondent's using another vendor to fill the order. Respondent admitted the amounts due under Invoice Nos. 64679 and 64828; therefore, no further discussion is necessary for those items, except to note that Delivery Receipt No. 17751, relating to Invoice No. 64828 contains the note "Reject 1 Live Oak." Therefore, the amount of Invoice No. 64828 must be reduced by $214.00 ($200 for the tree and 7 percent Florida Sales Tax). With respect to Invoice No. 64829, however, Petitioner produced at hearing only an unsigned invoice without either a sales order or a receipt for delivery of goods, as was its custom concerning deliveries of nursery goods. Accordingly, Petitioner provided no proof that the order under Invoice No. 64829 was actually delivered to Respondent. Respondent and its surety, Western Surety Company, currently owe Petitioner $2,884.72 under Invoice No. 64679, and $3,664.75 under Invoice No. 64828, for a total amount owed of $6,549.47.
Recommendation Based upon the Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Florida Department of Agriculture and Consumer Services enter a Final Order requiring Respondent, Greenblades of Central Florida, Inc., or its surety, Respondent, Western Surety Company, to pay Petitioner $6,549.47 for unpaid invoices. DONE AND ENTERED this 25th day of January, 2006, in Tallahassee, Leon County, Florida. S ROBERT S. COHEN 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 25th day of January, 2006. COPIES FURNISHED: Christopher E. Green, Chief Bureau of License and Bond Department of Agriculture and Consumer Services Division of Marketing 407 South Calhoun Street, Mail Station 38 Tallahassee, Florida 32399-0800 Joseph Robbins, Jr. Greenblades of Central Florida, Inc. 11025 Southeast Highway 42 Summerfield, Florida 34491 Tom Snyder Western Surety Company Post Office Box 5077 Sioux Falls, South Dakota 57117-5077 Donald M. DuMond Skinner Nurseries, Inc. 2970 Hartley Road, Suite 302 Jacksonville, Florida 32257 Tom Robinson Skinner Nurseries, Inc. 13000 State Road 11 Bunnell, Florida 32110 Honorable Charles H. Bronson Department of Agriculture and Consumer Services Commissioner of Agriculture 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
Findings Of Fact Respondent administers Florida's Medical Assistant Program (Medicaid Program) which is jointly funded by the state and federal government under Title XIX of the Social Security Act. Under the Medicaid Program, eligible recipients receive services from providers who voluntarily participate in the program. Under the Medicaid Program, Respondent is required to reimburse providers only reasonable costs, not all costs incurred. Petitioner is a licensed Florida nursing home facility and at all times material hereto, was certified to and was participating in the Medicaid Program. Participation in the program is subject to all State and Federal laws, regulations, standards and guidelines relating to medicaid. The methodology for determining reimbursement to a nursing home such as Petitioner under the Medicaid Program is set forth in the Title XIX Long-Term Care Reimbursement Plan (Gainesville Plan) which is incorporated by reference in Rule 10C-7.0482, Florida Administrative Code. The validity of the amended rule is not being challenged in this proceeding, only its application to Petitioner. Prior to implementation of the Gainesville Plan on April 1, 1983, Medicaid's reimbursement to nursing homes was more restrictive. The Gainesville Plan resulted from settlement of a lab suit challenging the reasonableness of reimbursement to nursing homes. The Gainesville Plan as implemented on April 1, 1983, placed ceilings on the reimbursement for operating and patient care costs but not reimbursement for property costs. In 1982 Petitioner ended years of litigation when it won approval to build a nursing home without a certificate of need. Due to the extended litigation, Petitioner lost an earlier financing arrangement which, due to the then existing economic conditions, resulted in the Petitioner being forced to seek financing for the construction of the nursing home through the issuance and sale of Industrial Development Revenue Bonds authorized pursuant to City of Gainesville, Florida Resolution R- 82-13 of January 13, 1982. Under the terms of the bond issue, the facility cannot be leased, resold or refinanced before 1990 and, therefore, Petitioner is still paying the "high rate" of interest negotiated in 1982. In determining the financial feasibility of the nursing home, the auditors preparing the bond documents based their calculations on the more restrictive reimbursement methodology for Medicaid which was in effect before the Gainesville Plan. Petitioner was projecting a forty per cent (40 percent) Medicaid utilization and the bond documents warned investors of the possibility of changes in the Medicaid Program. The present Medicaid utilization is in excess of eighty per cent (80 percent) At the time it financed the nursing home, Petitioner was aware of the upcoming changes to be implemented by the Gainesville Plan but those changes were not reflected in the bond issue. The State of Florida was not involved in the bond issue. Petitioner built its nursing home to Florida licensure standards and was not required by Respondent to meet any more stringent requirements than for other Florida nursing homes. Upon entering the Medicaid Program, Petitioner was warned that its property costs appeared excessive. Petitioner's property costs were the highest of all nursing homes participating in Florida's Medicaid program as of January 1, 1985. Because the Gainesville Plan placed no A limitations on property costs, Petitioner was allowed to recover all of those costs in its Medicaid per diem rate. Petitioner could not recover all of its operating and patient care costs because those costs exceeded caps that were placed in the Gainesville Plan. The medicaid per patient day amount of such total property costs was initially approved by Respondent in the sum of $37.6740, based on a low occupancy during the start up phase of the facility. The implementation of the Gainesville Plan created a significant increase in the state funds budgeted for nursing homes. It was estimated that the first year increase would be approximately $50 million. The Florida Legislature, which appropriates the funds for Medicaid and makes recommendations as to how that money is to be spent, directed Respondent to implement ceilings on property costs. On September 1, 1984, the Gainesville Plan was amended to include caps for property costs. In determining reasonable caps, Respondent through the Gainesville Plan, utilized a formula similar to that which it utilizes in capping operating and patient care caps. That formula took the median of the per diem property costs for the 100 newest nursing homes participating in Medicaid and increased it by one standard deviation. New nursing homes were given a higher property cost cap during their first 18 months of operation to allow for startup costs. As a result of Respondent using this new formula for determining reimbursement rates for property cost, the Petitioner was notified in August, 1984 that effective in September 1, 1984 its property costs reimbursement rate would be reduced to $15.91 per patient day and further reduced to $12.56 effective January 1, 1985. Respondent considered the property costs reimbursement rate caps reasonable based upon a comparison of statewide per diem rates. As of January 1, 1985, only 38 or 10 percent of nursing homes participating in Medicaid had their property costs capped. The Gainesville Plan was subsequently approved by the federal government which considers the reasonableness of cost reimbursement in approving such plans. Since property costs reimbursement rates must be set at a level which will be adequate to reimburse allowable and reasonable property costs of an economically and efficiently operated facility, property costs of existing facilities that exceeded the "cap" were not "grandfathered" in under the September 1, 1984 amendment to the Gainesville Plan because they were considered not to be reasonable. Petitioner was immediately affected by the reduction in the property costs reimbursement rates which became effective on September 1, 1984. Because of its financing arrangement and because of a large Medicaid population, Petitioner experienced a large shortfall between actual costs incurred and costs that would be reimbursed by the Medicaid Program. Petitioner's property costs were the highest of all nursing homes participating in Florida's Medicaid Program as of January 1, 1985. Nationwide, Florida ranks in the top ten percent (10 percent) in average Medicaid nursing home per diem payment. There is no requirement that a nursing home accept Medicaid's patients. On October 1, 1985, Respondent went to a fair rental value system to determine allowable Medicaid property costs. Under that system, through negotiations with representatives of the nursing home industry, $28,500 was established as a reasonable cost per bed. In 1982, Petitioner's cost per bed, including financing, was approximately $41,000. Petitioner's Medicaid per diem rate has been calculated in accordance with the method set forth in the Gainesville Plan and Petitioner has not been treated differently than any other provider in the determination of its Medicaid per diem rate. Although Petitioner had been previously allowed to recover all its property cost under the Gainesville Plan prior to amendment, there was insufficient evidence in the record to prove that Petitioner's property costs not reimbursed under the plan as amended were allowable and reasonable costs of an economically and efficiently run facility.
Recommendation Having considered the foregoing Findings of Fact, Conclusions of Law, the evidence of record and the candor and demeanor of the witnesses, it is, therefore, RECOMMENDED that the Respondent enter a Final Order denying Petitioner's request for an adjustment to its Medicaid per diem rate. Respectfully submitted and entered this 21st day of May, 1987, in Tallahassee, Leon County, Florida. WILLIAM R. CAVE Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 21st day of May, 1987. APPENDIX TO RECOMMENDED ORDER, CASE NO. 84-3405 The following constitutes my specific rulings pursuant to Section 120.59(2), Florida Statutes, on all of the Proposed Findings of Fact submitted by the parties in this case. Rulings on Proposed Findings of Fact Submitted by the Petitioner Covered in the Background. Adopted in Finding of Fact 20. Adopted in Finding of Fact 4. 4.-5. Adopted in Finding of Fact 8 but clarified. 6.-8. Adopted in Finding of Fact 12 but clarified. Adopted in Finding of Fact 12 as clarified and 14. Adopted in Finding of Fact 14. Adopted in Finding of Fact 17. Rejected as immaterial and irrelevant. Rejected as not supported by substantial competent evidence in the record and as immaterial and irrelevant. Rejected as immaterial and irrelevant. Rejected as not supported by substantial competent evidence in the record. Rejected as immaterial and irrelevant. 17.-21. Rejected as not supported by substantial competent evidence in the record. Rejected as immaterial and irrelevant. Rejected as not supported by substantial competent evidence in the record. Rulings on Proposed Findings of Fact submitted by the Respondent 1.-13. Adopted in Findings of Fact 1 through 13, respectively. 14. Adopted in Finding of Fact 21. 15. Adopted in Finding of Fact 14. 16. Adopted in Finding of Fact 15. 17. Adopted in Finding of Fact 16. 18. Adopted in Finding of Fact 17. 19. Adopted in Finding of Fact 18. 20. Adopted in Finding of Fact 19. 21. Adopted in Finding of Fact 22. 22. Adopted in Finding of Fact 23. 23. Adopted in Finding of Fact 20. 24. Adopted in Finding of Fact 24. 25. Adopted in Finding of Fact 25. COPIES FURNISHED: Grafton B. Wilson, II, Esquire Gregory L. Coler, Post Office Box 1292 Secretary Gainesville, Florida 32602 Department of HRS 1323 Winewood Boulevard Tallahassee, Florida 32399-0700 Theodore E. Mack, Esquire 1323 Winewood Boulevard Building 1, Room 40 Tallahassee, Florida 32399
Findings Of Fact On August 6, 1986, an indemnity bond was executed between RAINMAKER as principal and FIDELITY as surety. The effective dates of the bond were from October 21, 1986, to October 20, 1987. The bond was required under Sections 604.15-604.30, Florida Statutes, in order for RAINMAKER to become licensed as a dealer in agricultural products in Florida. The purpose of the bond is to secure the faithful accounting for a payment to producers or their agents or representatives of the proceeds of all agricultural products handled or purchased by RAINMAKER. The Petitioner, SHAN-RON, is a corporation whose address is 276 Cypress Street, La Belle, Florida. Its purpose is to conduct business by finding buyers for sod located on acreage owned by various cattle ranchers in Lee County, Florida. This practice is commonly known as "bird dogging" in the agricultural trade. The way the business is conducted is as follows: SHAN-RON is contracted by sod installers to whom it sells sod in specific quantities for a fixed price. Once the oral agreement is made, SHAN-RON tells the sod installer where a sod field is located. At this point in the business transaction, the sod installer sends independent truck drivers to the designated sod field. If the sod installer is unable to locate truckers, he telephones a SHAN-RON field foreman. The foreman, as a courtesy, will check to see if any of the independent truckers currently as the sod field can haul a load for the sod installer. Once a trucker is located, employees from SHAN-RON mow the grass, cut the sod, and load it onto pallets owned by SHAN-RON. The truck is loaded with pallets by SHAN-RON employees and the driver is given two copies of the load ticket, one for him and one for the sod installer. The driver delivers the sod and pallets to the address placed upon the load tickets. Upon delivery, the driver has the responsibility to deliver the load ticket to the business office of the sod installer. If he does not deliver the ticket, he does not get paid for hauling the sod. Employees of the sod installer are usually at the delivery site. The sod is laid and the empty pallets are returned to the sod field by the truckers. Every Friday, a representative of SHAN-RON personally delivers a weekly bill to the sod installer in order to collect is owed. When the money is collected, the funds are divided between the rancher whose sod was sold and SHAN-RON. The accountability system used within the sod industry leaves room for a high margin of error at various stages. The SHAN-RON employees occasionally short pallet loads or two layers of sod. The truck drivers occasionally misnamed the sod installer to whom the sod is to be delivered. The truck drivers also occasionally do not take empty pallets under their control back to SHAN-RON. They sell the pallets and pocket the money. The sod installer is financially responsible for the pallet costs. RAINMAKER is a corporation whose address is Post Office Box 7385, Ft. Myers, Florida. The company is primarily in the business of installing sod. It transacted business with SHAN-RON between November 11, 1986, and January 8, 1987. At the time of these transactions, RAINMAKER was licensed as a dealer in agricultural products supported by surety bond number 974 52 23 in the amount of $13,500.00. SHAN-RON, through testimony and the introduction of its business records, proved a prima facie case that RAINMAKER owes $12,964.00 for the purchase of sod between November 11, 1986, and January 8, 1987. Both parties Stipulated that $4,000.00 has been paid on the balance of the account which should be deducted from the balance owed SHAN-RON. In rebuttal to SHAN-RON's presentation, RAINMAKER presented testimony and a business record summary which revealed that six invoices were improperly charged, against its account in the amount of $1,260.00. The record summary was based upon a comparison of load tickets against production records during the time period involved. In addition, RAINMAKER's records reveal that the two drivers, Stormy and Fred Bower, were not paid for delivering the sod to RAINMAKER under the load ticket presentation to the sod installer which was previously described as an accounting method within the business. Because RAINMAKER set forth the issue of delivery discrepancies in its answer to the complaint and competent evidence was presented, $1,260.00 should be deducted from the `balance owed. SHAN-RON presented testimony that it is customary for the company to spray the sod for pest control. RAINMAKER received defective sod from SHAN-RON which contained "Creeping Charlie" weeds during the time of the deliveries in dispute. SHAN-RON was timely notified of the problem, and toad RAINMAKER to have the sod sprayed. A copy of the invoice for $300.00 was sent to SHAN-RON and has not been paid. Although the issue was not raised in RAINMAKER's answer to the complaint, it is properly before the Hearing Officer because of RAINMAKER's timely notification and cure of the defect in the product. The $300.00 should be deducted from the amount owed. Testimony relating to possible sod shortages was rejected as no evidence was presented that shortages occurred in the orders for which SHAN-RON seeks payment. The customary procedure In the sod business for handling credits for shortages requires the buyer to notify the seller within a responsible length of time of the shortages. Such notification did not take place as to the orders in dispute. The amount owed to SHAN-RON by RAINMAKER is $7,404.00. It is officially noticed that SHAN-RON's complaint was originally filed with the department on June 19, 1987, within nine months from the date of sale.
Recommendation Based upon the foregoing, it is RECOMMENDED: That the Department of Agriculture enter a final order requiring the Respondent RAINMAKER to make payment to the petitioner SHAN-RON in the amount of $7,404.00. In the event that RAINMAKER does not comply with the department's order within fifteen days from the date it final, FIDELITY should be ordered to provide payment and the conditions and provisions of the bond furnished to RAINMAKER. DONE and ENTERED this 12th day of April, 1988, in Tallahassee, Florida. VERONICA E. DONNELLY Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 12th day of April, 1987. COPIES FURNISHED: Clinton H. Coutler, JR., Esquire Department of Agriculture Mayo Building Tallahassee, Florida 32399-0800 Ben Pridgeon, Chief Bureau of License and Bond Department of Agriculture Lab Complex Tallahassee, Florida 32399-1650 Shan Ron Sod, Inc. 276 Cypress Street LaBELLE, FLORIDA 33935 Rainmaker Sod, Inc. 2290 Bruner Lane, South East Fort Myers, Florida 33912 Fidelity & Deposit Company of Maryland Post Office Box 1227 Baltimore, Maryland 21203 Honorable Doyle Conner Commissioner of Agriculture The Capitol Tallahassee, Florida 32399-0810 Robert Chastain General Counsel Department of Agriculture Mayo Building, Room 513 Tallahassee, Florida 32399-0800
The Issue The issue for determination is whether Respondents engaged in loan transactions with Florida consumers in which the combined rate of interest for each of the loans exceeded 18 percent in violation of Subsection 516.02(2)(a), Florida Statutes (2007).1
Findings Of Fact Petitioner is the state agency responsible for the enforcement of Chapter 516 (the Florida Consumer Finance Act) and Chapter 560, part IV (the Deferred Presentment Act). The Florida Consumer Finance Act regulates consumer lending transactions of amounts less than $25,000. The Deferred Presentment Act regulates deferred presentment transactions and provides an exception to the requirements of Chapter 516 for entities registered thereunder. Neither of the respondents is registered with Petitioner pursuant to Chapters 516 or 560, or any other chapter regulated by Petitioner. Respondent, EZPawn Florida, Inc. (EZPawn), is a Delaware corporation with its principal offices located at 1901 Capital Parkway, Austin, Texas 78746. EZPawn is licensed in Florida as a credit services organization (CSO), operating pursuant to Chapter 817, Part III, the Credit Service Organizations Act (CSO Act). Respondent, Integrity Florida Funding, L.P. (Integrity), is a Florida Limited Partnership with its principal place of business located at 84 Villa Road, Greenville, South Carolina 29615. Integrity lends money to Florida residents in consumer finance transactions. EZPawn and Integrity are independent entities. The entities are not affiliated entities and do not otherwise share common ownership, control, or management. Neither entity discloses to the other information regarding their cost of funds, profit margins, or overhead expenses. On November 30, 2005, EZPawn and Integrity entered into a business arrangement pursuant to written contract. The contract is identified in the record as the Credit Services Organization and Lender Agreement (the CSO/Lender Agreement). The CSO/Lender Agreement, in relevant part, authorizes EZPawn to take loan applications from Florida residents and submit them to Integrity for approval. Integrity charges an interest rate of 18 percent on each loan. EZPawn charges a fee of either $15.00 or $30.00 for each $100.00 loaned by Integrity. If Integrity approves a loan, Integrity funds the loan through the local EZPawn office. The EZPawn fee is added to the loan amount. If the fee charged by EZPawn was aggregated with the interest charged by Integrity, the rate of interest for the loan would exceed 18 percent. The factual issue is whether the fee charged by EZPawn is a "cost of obtaining a consumer finance loan" (cost of the loan) within the statutory definition of interest in Subsection 516.01(5). The quoted statutory phrase is not defined by statute or rule. Nor did the parties cite any controlling judicial decisions defining the quoted phrase in Florida. The trier-of-fact finds the evidence to be clear and convincing that the fee charged by EZPawn is a cost of the loan and must be aggregated with the interest charged by Integrity to determine the total amount of interest. Although EZPawn structures the legal form of its services as those provided by a CSO, the legal form is without economic substance. Economic reality demonstrates that the EZPawn fee is a cost of the loan. EZPawn casts its fee in the form of a charge for CSO services. The CSO agreement between EZPawn and each of its customers states that EZPawn will assist customers in preparing applications and compiling documentation necessary to apply for loans, will issue letters of credit (LOCs) on behalf of the customer to improve the customer's creditworthiness, will assist the customer in obtaining a loan, and will enroll customers in a credit reporting service, identified in the record as the PRBC, to report their loan payments. The enumerated CSO services are expressly authorized in the CSO Act. EZPawn does not share any of its fee with Integrity, and Integrity does not share any of the loan principal or interest with EZPawn. The two entities have separate rating, or underwriting requirements, and they do not share that proprietary information. Integrity determines the total amount of loans it will make and funds the loans out of its own capital. The LOC issued by EZPawn does not eliminate the risk of loss to Integrity. The economic substance of the loan transactions is substantially different than the legal form in which Respondents have chosen to cast the transactions. The legal form of the transactions has no economic effect. The EZPawn fee is not a fee for separate CSO services. EZPawn does not receive a fee unless Integrity funds a loan. If Integrity does not fund a loan, nothing happens, the EZPawn customer owes EZPawn nothing, and there are no loan payments to be reported by PRBC to improve the customer's creditworthiness. The EZPawn customer owes EZPawn no fee for separate CSO services unless Integrity funds a loan. No customer of EZPawn obtains a loan from Integrity unless the customer agrees to pay the EZPawn fee. Each of the approximately 36,000 loans at issue in this case share meaningful characteristics of payday loans. Each loan is a short-term single payment loan for a relatively low dollar amount that is more than $100.00 and less than $1,000.00. Payment is due on the next day the customer is paid between seven and 37 days after the date of the loan. Integrity charged an annualized percentage rate of interest of 18 percent on each of the loans. The EZPawn fee varies directly with the amount borrowed. Payment of the EZPawn fee is financed and is due and payable at the same time the principal and interest is due and payable to Integrity. The fee charged by EZPawn is an economic function of the amount and term of the loan from Integrity. EZPawn charges a fee on loans with a term of seven to 23 days in an amount equal to $15.00 per $100.00 borrowed. For loans with a term of 24 to 37 days, EZPawn charges a fee of $30.00 per $100.00 borrowed. EZPawn charges an additional fee, in addition to the accumulated interest charged by Integrity, each time a borrower refinances his or her loan. A borrower may refinance a loan up to six times. The first six refinances result in no payment on the loan principal. After refinancing a loan six times (a rollover loan), a borrower may continue to roll the loan over. However, the borrower must pay $50.00 toward principal for each rollover loan after six. An economically significant amount of the fees that EZPawn charged for titular CSO fees consist of rollover fees. Of the total fees that EZPawn charged for denominated CSO services, approximately 28,829 transactions were charged in rollover loans and approximately 11,631 transactions were for first-time loans. EZPawn charges a fee for every loan that Integrity makes. Integrity has not made any loans to any Florida borrowers to whom EZPawn did not provide alleged CSO services. Each note conditions the loan on the agreement to pay the 18 percent interest to Integrity and the charge identified as a CSO fee to EZPawn. Each note requires the borrower to, “promise to pay [Integrity] the Total of Payments in 1 payment on the due date indicated.” The "Total of Payments" includes the reputed CSO fee. Customers do not pay the alleged CSO fee to EZPawn independently from the loan made by Integrity. Rather, the EZPawn fee is included on the face of each loan note as part of the finance charge and total of payments. The EZPawn fees are payable only through an electronic debit transaction that deducts the money from the borrowers bank account automatically on payday (ACH). The loan documents processed by EZPawn treat the so- called CSO fee as an interest charge for federal reporting and disclosure requirements. The documents that memorialize the loans are substantially the same in substantive form for each of the approximately 36,000 loans. The note treats the CSO fee as a finance charge for purposes of the federal Truth in Lending Act (TLA). The note specifically recognizes that the CSO fee is part of, “[t]he dollar amount the credit will cost you [the borrower].” The CSO fee is also included in the TLA calculation of the actual percentage rate (APR) of finance charge. The loan documents acknowledge the charge to be part of, “[t]he cost of your credit as an annual percentage rate.” The economic substance of the charge identified in the loan documentation as a CSO fee, in relevant part, is a charge by EZPawn for its extension of credit to the borrower. The extension of credit is cast in the form of an LOC. The charge for the extension of credit by EZPawn, in the form of an LOC, is not for a separate loan of a different sum of money. The charge by EZPawn and the interest charged by Integrity are each part of the aggregate economic cost of the loan to the borrower. EZPawn agrees in the LOC to pay Integrity principal, interest, and a non-sufficient funds fee in the event of default by the borrower. In every one of the loan transactions at issue, EZPawn issued an LOC. In response to over 36,000 loan applications, Integrity made a loan every time EZPawn issued an LOC. Integrity never made a loan without an LOC. EZPawn applies its own loan guidelines or underwriting requirements. Once EZPawn approves a loan application, EZPawn issues an LOC in favor of Integrity in an amount not to exceed principal, interest, and dishonored item fee as applicable to the loan arranged by EZPawn. The LOC provides that EZPawn will pay Integrity the principal and interest owed upon the loan: (1) becoming past due and unpaid, (2) the dishonoring of any ACH debit or other payment device, and (3) not more than three days elapses since the latter of the above things occurs. Upon default, Integrity collects on the LOC automatically. Integrity immediately receives payment of its principal along with any accrued interest and a non-sufficient funds fee. The economic reality of each loan transaction is that the risk of loss and burden of collection is on EZPawn. Any risk of loss shouldered by Integrity is limited to the financial health of EZPawn, which has been significantly enhanced after entering into the CSO/Lender agreement with Integrity. Integrity requires EZPawn to issue an LOC as a prerequisite for each loan. An LOC is an underwriting requirement that a borrower must satisfy to obtain the loan. Integrity will not approve a loan without an LOC. EZPawn controls the distribution of loan proceeds to the borrower. Integrity sends an electronic direct draft to EZPawn (the draft). EZPawn prints the draft, which is payable to the borrower. EZPawn then immediately provides cash to the borrower in exchange for the draft. EZPawn employees instruct borrowers that the draft can only be cashed with EZPawn or Integrity. No borrower ever leaves an EZPawn store without cash. The Operation Manual adopted by EZPawn contains specific instructions emphasizing that EZPawn employees should not give a draft to a borrower. The economic effect of each loan transaction is that two lenders charge for the same loan. Integrity funds the loan and charges interest as a cost of the loan. EZPawn charges a fee for extending credit to the borrower, assuming the risk of loss, and undertaking the burden of collection. The economic reality is that the charges imposed by both lenders are aggregated to determine the cost of the loan to the borrower. EZPawn’s Operations Manual identifies the "CSO fee" as interest in Florida. In the table identifying “Interest Rates by State” the entry for the Interest Rate in Florida includes “18% APR Lender Fee + $15 per hundred broker fee.” A determination that the charge imposed by EZPawn is part of the cost of the loan to the borrower is made based on the finding that EZPawn and Integrity are separate and independent businesses which are not associated, affiliated, or engaged in a joint venture. If two separate lenders charge interest for the same loan, and the aggregate interest exceeds the legal amount, neither party informed the ALJ of any legal authority that exonerates the two lenders. A determination that the charge imposed by EZPawn is part of the cost of the loan is not dependent on a determination that EZPawn is a loan broker for Integrity. However, the trier- of-fact considers findings relevant to the broker issue to be appropriate given the ample hearing time and evidence that the parties devoted to the issue. EZPawn is a loan broker. In addition to maintaining the exclusive contractual right to market, offer, and promote Integrity loans, EZPawn performs numerous functions on behalf of Integrity pursuant to the CSO/Lender Agreement. The CSO/Lender Agreement identifies EZPawn customers as joint customers of both entities. EZPawn is permitted to use Customer Information to market and sell other loan products without Integrity’s consent. However, Integrity must obtain written consent from EZPawn before using Customer Information in a similar fashion. Similarly, EZPawn may assign its rights or obligations to an affiliate without written consent from Integrity, but Integrity must obtain EZPawn’s permission to do so. A borrower completes one four-page application for both the stated CSO services from EZPawn and the loan from Integrity. Customers complete the application at one of EZPawn’s stores located in Florida. Before the loan is ever evaluated by Integrity, EZPawn uses the information on the application to make an independent determination based on its own underwriting criteria of whether to issue an LOC. EZPawn gives each borrower a document entitled a Credit Services Organization Disclosure Statement (CSO2). The CSO2 lists the services EZPawn will provide to the borrower for the fee identified as a CSO fee. The services include all collection functions related to the loans, maintaining substantially all records, issuing all adverse action notices on behalf of Integrity, and delivering all legally required disclosures on behalf of Integrity. The third document that EZPawn provides to a borrower is the Credit Services Organization Agreement (CSO3). The CSO3 is the actual agreement between EZPawn and the borrower regarding the services identified as CSO services. The CSO3 identifies the same CSO services as those disclosed in the CSO2. The fourth document that EZPawn provides to a borrower is the promissory note, which includes the TLA disclosure (the CSO4). The CSO4 prescribes the terms of the loan from Integrity. The cost of each loan at issue in this proceeding exceeds 18 percent. The details of the 36,000 loan transactions are well documented in the record. At the hearing, Petitioner introduced paper copies of files that contain loan documents for two representative borrowers as sample documents. The sample documents were also attached to the Amended Administrative Complaint. Respondents also introduced paper copies of representative loan documents. Petitioner’s Exhibit N is a printout of a spreadsheet file listing the name and other pertinent information of each customer. Each customer on the spreadsheet is associated with a unique Customer identification (ID) number. Petitioner’s Exhibit GG contains an electronic spreadsheet with a number of pieces of data associated with each of the loans. The information includes the customer ID number and loan number for each transaction. The disclosed APR for each of the loans is far in excess of 18 percent. The APR listed for every loan exceeds 18 percent by hundreds of percentage points. The APRs range from 210.31 percent to 1,472.23 percent. The loan made to borrower Y.M. on June 7, 2006, carries an APR of 439.18 percent. The loan made to borrower N.H. on June 6, 2006, carries an APR of 626.34 percent. The loan made to the borrower in the example loan note provided by Respondents carries an APR of 515.85 percent. On June 6, 2006, N.H. obtained a loan of $1,000.00 that matured on June 15, 2006. On May 15, 2006, N.H. obtained a rollover loan of $270.00 that matured on May 30, 2006. In the first loan to N.H., the cost of the loan included an annualized rate of interest of 18 percent, or $4.44, payable to Integrity and a stated CSO fee of $150.00 payable to EZPawn. The cost of the loan for the rollover loan to N.H. included an annualized rate of interest of 18 percent, or $1.86, payable to Integrity and a stated CSO fee of $40.50 payable to EZPawn. The TLA disclosure in the first loan to N.H. stated that the true cost of her credit was an APR of 626.34 percent. The TLA disclosure in the rollover loan stated the true cost to be an APR of 409.03 percent. The loan documents in each of the loans to N.H. required N.H. to authorize Integrity to execute an ACH debit transaction from the borrower’s checking account. The cost of the $1,000.00 loan to N.H. was $154.44, which was financed and rolled into the loan amount. The loan documents authorize EZPawn to collect a fee of $150.00 from the $154.44, or 97.1 percent of the cost of the loan. The balance of $4.44 represented interest payable to Integrity at an annualized rate of 18 percent. The rollover loan did not result in the distribution of any loan proceeds to N.H. Rather, the loan amount of $270.00 was paid on the existing account. Nevertheless, loan documents authorize EZPawn to collect $40.50 and Integrity to collect $1.86 in annualized interest. EZPawn collected approximately 95 percent of the cost of the rollover loan. The workings of the original and rollover loan to N.H. are illustrative of those in the other borrower files Petitioner entered into evidence. On May 26, 2006, Y.M. obtained a loan of $500.00 that matured on June 8, 2006. On June 7, 2006, Y.M. obtained a rollover loan of $500.00 that matured on June 22, 2006. The cost of the first loan included $3.21 charged by Integrity at an annualized rate of interest of 18 percent and a charge of $75.00 by EZPawn for a stated CSO fee. The cost of the rollover loan included a charge by Integrity of $3.45 at an annualized interest rate of 18 percent and a charge of $75.00 by EZPawn for a stated CSO fee. The TLA disclosure for the first loan to Y.M. disclosed that the true cost of credit was 439.18 percent. The true cost of credit for the rollover loan was 409.06 percent. A preponderance of the evidence showed intent to violate the statute. However, the trier-of-fact finds the evidence less than clear and convincing that Respondents intentionally violated Florida law. The legal structure of the business conducted in Florida is fashioned after a similar mechanism that is lawful in Texas. Although the statutes in the two states are different, there is ample evidence that Respondents undertook reasonable due diligence, including appropriate legal opinions, to ensure that the mechanism used in Florida complies with Florida law. This proceeding is apparently the first enforcement effort of this type by Petitioner in the state. Petitioner has not previously advised either of the respondents that Petitioner considers their business practice to be unlawful. Petitioner has not promulgated a rule, has not issued a written policy, has not issued a personal letter of advisement, and has not conducted public seminars to publish its statutory interpretation.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Petitioner enter a final order requiring Respondents to cease and desist the business practices proven in this proceeding. DONE AND ENTERED this 25th day of March, 2008, in Tallahassee, Leon County, Florida. S DANIEL MANRY 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 25th day of March, 2008.
The Issue Whether the Respondent Terra Bella and Associates, Inc., owes the Petitioner $17,806.20 for sod purchased from Petitioner, Action Sod and Landscape, LLC.
Findings Of Fact Action Sod is a 25-year-old business that sells plants and sod for lawn and landscaping. Terra Bella is a construction landscape maintenance company that has been in existence since 2004. 2011. Great American was the surety for Terra Bella during In the latter part of 2011, Action Sod sold and invoiced Terra Bella the following sod orders: Invoice 114825 on November 16, 2011, for Vero Beach in the amount of $1,979.50; Invoice 114828 for Parkland Heron Bay on November 16, 2011, in the amount of $1,979.50; Invoice 114875 for Parkland on November 16, 2011, in the amount of $2,268.40; Invoice 115360 for Pickup at Okechobbe Farm on November 21, 2011, in the amount of 1,455.20; Invoice 116151 for Harron Beach on November 29, 2011, in the amount of 3,852.00; Invoice 116350 for Enin 5613480172 on December 1, 2011, in the amount of $3,852.00; and Invoice 116880 for Pickup at Okechobbe Farm on December 6, 2011, in the amount of $1,369.60. Action Sod expected payment of each invoice within 30 days from date of pick up or delivery. After Barbara Callado Lopez ("Lopez"), Action Sod's President and Director, did not receive payment for the outstanding November and December invoices totaling $26,396.90, she called Terra Bella repeatedly to request payment. On January 24, 2012, Terra Bella paid Action Sod $9,640.00 for Invoices 113134, 113750, 114132, and 114626, leaving an outstanding balance of $16,756.20. On February 22, 2012, Action Sod filed a claim against Terra Bella with the Department because $16,756.20 had not been paid. Action Sod ultimately amended the claim to $16,806.20 to include the remaining monies owed for sod purchased plus the $50.00 filing fee for a claim. On February 29, 2012, Lopez went to Terra Bella's office requesting payment. The parties had a heated argument about the sod and monies owed. Lopez requested payment in the amount of $16,756.20. Terra Bella provided a counter offer to Action Sod of $13,006.20, which was calculated by subtracting $750.00 for pallets returned and $3,000.00 for the sod that didn't pass inspection and had to be replaced. Even though Lopez was dissatisfied with the offered amount of $13,006.20, she accepted it. Terra Bella paid Action Sod $13,006.20 with check #5098, which stated in the memo section, "Final Payment of Agreed Upon Open Bal." During the meeting, Lopez also signed six Final Waiver and Release of Lien forms for the following properties: Vero Lago, LLC,; The Ranches at Cooper City, LLC; Parkland Reserve, LLC; Miami Dade Aviation Department; Heron Bay; and Monterra Clubhouse. The waivers neither provided invoice numbers nor identified and described the property locations as listed on the invoices. Each waiver provided in relevant part the following: The undersigned lienor, received FINAL payment and hereby waives and releases its lien and right to claim a lien for labor, services, equipment, or materials furnished to Terra Bella & Associated, Inc., though February 29, 2012, on the . . . project. . . to the following property. . . Action Sod cashed check #5098 and therefore Terra Bella is not indebted to Petitioner for any sod sold in November and December of 2011.
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 Action Sod and Landscape against Terra Bella and Associates. DONE AND ENTERED this 5th day of September, 2012, in Tallahassee, Leon County, Florida. S JUNE C. McKINNEY 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 5th day of September, 2012. COPIES FURNISHED: Christopher E. Green, Esquire Department of Agriculture and Consumer Services Office of Citrus License and Bond Mayo Building, M-38 Tallahassee, Florida 32399-0800 Lorena Holley, General Counsel Department of Agriculture and Consumer Services Suite 520 407 South Calhoun Street Tallahassee, Florida 32399-0800 Honorable Adam Putnam Commissioner of Agriculture Department of Agriculture and Consumer Services The Capital, Plaza Level 10 Tallahassee, Florida 32399-0810 Barbara Callado, President Action Sod and Landscape, LLC Post Office Box 833143 Miami, Florida 33283-3143 Dan Hurrelbrink Great American Insurance Company 580 Walnut Street Post Office Box 2119 Cincinnati, Ohio 45201-3180 Dennis Hall, President Terra Bella and Associates, Inc. PO Box 22397 Hialeah, Florida 33002
The Issue The issue to be resolved in this proceeding concerns whether the Petitioner is owed the sum of $4,787.00 representing 14 shipments of cucumbers supplied to the Respondent for which the Petitioner has allegedly not been paid. Consequently, it must be determined whether the Petitioner is entitled to recompense from the bond posted by the Respondent, through its surety, in accordance with the provisions of Sections 604.15-604.34, Florida Statutes.
Findings Of Fact The Petitioner, Long & Scott Farms, Inc., is a grower of cucumbers for the commercial market. The Respondent, Mo-Bo Enterprises, Inc., is a buyer and broker of such agricultural produce. During the fall 1994 harvesting and shipping season for cucumbers, a problem arose in the business relationship between the Petitioner and the Respondent, which had not previously occurred. On October 21, 1994, the Petitioner sold and shipped to the Respondent, or to its consignee, a shipment of 84 crates of dill-pickle-sized cucumbers, at a price of $15.00 per crate. Thus, the invoice billing for that shipment was $1,260.00. The payment for that shipment was delayed for a long period of time; but finally, on February 15, 1994, a partial payment of $1,071.00 was made for that shipment and invoice. The Respondent's representatives assured the Petitioner that the remainder of that bill would be paid promptly, but no payment has ever been made. Between the dates of October 21, 1994 and November 8, 1994, some 13 other shipments of cucumbers were made on the order and purchase of the Respondent, sold and shipped by the Petitioner, for which the Respondent has never paid any amount to the Petitioner. The 14 shipments resulted in a balance due to the Petitioner from the Respondent of $4,787.00. That amount includes the deficiency in payment for the shipment of October 21, 1994, for which the above-referenced partial payment was made. The Petitioner and the Respondent had a business arrangement, whereby the Respondent would notify the Petitioner of any problem with any shipment, such as deficient quality, rot, or other deterioration, shortage in amount shipped, and the like. This arrangement, whereby notification of any problem with a shipment should be provided to the Petitioner within eight hours of the shipment's arrival, was printed on each invoice form, which forms were submitted to the Respondent upon the dispatch of each shipment. The Respondent never informed the Petitioner of any problems with any of the shipments involved in this proceeding. The shipments were all duly and timely made to the Respondent and received by it or its consignees. Moreover, in their prior discussions and negotiations concerning the relevant unpaid bill, the Respondent has never denied owing that amount. It simply has not paid the amount due, although it or its representatives have offered to negotiate some sort of payment arrangement. The unrefuted evidence thus shows that the Respondent and its surety company, Armor Insurance Company, are indebted to the Petitioner in the amount of $4,787.00 and that payment for that amount has not been made.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be entered by the Department ordering the Respondent to pay the above-referenced sum of $4,787.00 to the Petitioner and in the event of failure of the Respondent to remit such payment, that the Respondent, Armor Insurance Company, pay over to the Department the amount herein found to be due and owing from the bond posted by that surety company for the Respondent dealer, which sum should then be remitted over to the Petitioner. DONE AND ENTERED this 30th day of October, 1995, in Tallahassee, Florida. P. MICHAEL RUFF, Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 30th day of October, 1995. COPIES FURNISHED: Mr. Frank D. Scott Post Office Box 1228 Zellwood, FL 32798 Charles D. Barnard, Esq. 200 S.E. 6th St., Ste. 205 Fort Lauderdale, FL 33301 Mark J. Albrechta, Esq. Armor Insurance Company Box 15250 Tampa, FL 33684-5250 Honorable Bob Crawford Commissioner of Agriculture Department of Agriculture and Consumer Services The Capitol, PL-10 Tallahassee, FL 32399-0810 Richard Tritschler, Esq. General Counsel Department of Agriculture and Consumer Services The Capitol, PL-10 Tallahassee, FL 32399-0810
The Issue Whether C. Fullerton and Landscaping Co., Inc., is indebted to Other Side Sod, LLC, for the purchase of sod and pallets; and, if so, in what amount.
Findings Of Fact Petitioner is a Florida Limited Liability Corporation located in Arcadia, Florida, and at all times relevant hereto was a producer of agricultural products, as defined by section 604.15(9), Florida Statutes. Petitioner is also a “dealer in agricultural products” within the meaning of section 604.15(2). Respondent, during all times relevant hereto, was a “dealer in agricultural products,” within the meaning of section 604.15(2). At all times relevant to this proceeding, Great American served as surety for Respondent. At all times relevant to this proceeding, Respondent was a customer of Other Side Sod. Respondent purchased sod from Petitioner and thereafter resold and installed the sod to Respondent’s customers. Petitioner sold sod to its customers on wooden pallets. An integral part of each transaction involved the pallets. There are 10 invoices in dispute which cover the period October 14, 2016, through February 10, 2017. For the underlying transactions that relate to the invoices in question, the following language is contained on each field/delivery ticket: Terms of Sale: Payment due upon receipt. All payment[s] applied to pallet balance first. Interest at the rate of 1 1/2% per month will be charged on unpaid invoice amounts after 14 days. Invoices will be charged $0.02 per square foot additional after 30 days. Purchaser agrees to pay all costs of collection, including attorney fees, in [the] event it is necessary to institute suit for collection. Venue will be in DeSoto County, Florida. All Sales F.O.B. Shipping Point. On or about October 14, 2016, Petitioner sent Respondent invoice 47293, which showed a balance due of $462 for pallets related to the sale of Bahia sod. The invoice remained unpaid for more than 30 days and Petitioner, in accordance with the terms of sale, amended the original invoice and added a charge of two cents for each of the 83,200 units of Bahia sod related to the transaction ($1,664). Petitioner also added to the invoice a charge of $124.80 for sales tax related to the late payment penalty ($1,664 x 7.50 percent). On or about October 23, 2016, Petitioner sent Respondent invoice 47378, which showed a balance due of $224 for pallets related to the sale of Bahia sod. The invoice remained unpaid for more than 30 days and Petitioner, in accordance with the terms of sale, amended the original invoice and added a charge of two cents for each of the 70,400 units of Bahia sod related to the transaction ($1,408). Petitioner also added to the invoice a charge of $105.60 for sales tax related to the late payment penalty ($1,408 x 7.50 percent). On or about October 24, 2016, Petitioner sent Respondent invoice 47420, which showed a balance due of $280 for pallets related to the sale of Bahia sod. The invoice remained unpaid for more than 30 days and Petitioner, in accordance with the terms of sale, amended the original invoice and added a charge of two cents for each of the 16,000 units of Bahia sod related to the transaction ($320). Petitioner also added to the invoice a charge of $24 for sales tax related to the late payment penalty ($320 x 7.50 percent). On or about November 13, 2016, Petitioner sent Respondent invoice 47549, which showed a balance due of $1,526 for pallets related to the sale of Bahia sod. The invoice remained unpaid for more than 30 days and Petitioner, in accordance with the terms of sale, amended the original invoice and added a charge of two cents for each of the 103,200 units of Bahia sod related to the transaction ($2,064). Petitioner also added to the invoice a charge of $154.80 for sales tax related to the late payment penalty ($2,064 x 7.50 percent). On or about December 6, 2016, Petitioner sent Respondent invoice 47755, which showed a balance due of $434 for pallets related to the sale of Bahia sod. The invoice remained unpaid for more than 30 days and Petitioner, in accordance with the terms of sale, amended the original invoice and added a charge of two cents for each of the 30,400 units of Bahia sod related to the transaction ($608). Petitioner also added to the invoice a charge of $45.60 for sales tax related to the late payment penalty ($608 x 7.50 percent). On or about January 8, 2017, Petitioner sent Respondent invoice 48093, which showed a balance due of $1,256 for 12,800 units of Bahia sod, $224 for a pallet deposit, and $72 for sales tax. The invoice remained unpaid for more than 30 days and Petitioner, in accordance with the terms of sale, amended the original invoice and added a charge of two cents for each of the 12,800 units of Bahia sod related to the transaction ($256). Petitioner also added to the invoice a charge of $19.20 for sales tax related to the late payment penalty ($256 x 7.50 percent). On or about December 13, 2016, Petitioner sent Respondent invoice 48166, which showed a balance due of $343 for pallets related to the sale of Bahia sod. The invoice remained unpaid for more than 30 days and Petitioner, in accordance with the terms of sale, amended the original invoice and added a charge of two cents for each of the 163,200 units of Bahia sod related to the transaction ($3,264). Petitioner also added to the invoice a charge of $244.80 for sales tax related to the late payment penalty ($3,264 x 7.50 percent). On or about January 29, 2017, Petitioner sent Respondent invoice 48285, which showed a balance due of $3,000 for 40,000 units of Bahia sod, $308 for a pallet deposit, and $225 for sales tax (total = $3,533). On February 3, 2017, Respondent submitted to Petitioner partial payment in the amount of $3,210.50, which left an unpaid balance of $322.50. The balance remained unpaid for more than 30 days and Petitioner, in accordance with the terms of sale, amended the original invoice and added a charge of two cents for each of the 40,000 units of Bahia sod related to the transaction ($800). Petitioner also added to the invoice a charge of $60 for sales tax related to the late payment penalty ($800 x 7.50 percent). On or about January 31, 2017, Petitioner sent Respondent invoice 48301, which showed a balance due of $390 for 5,200 units of Bahia sod, $91 for a pallet deposit, and $29.25 for sales tax (total = $510.25). On February 15, 2017, Respondent submitted to Petitioner partial payment in the amount of $468.33, which left an unpaid balance of $41.92.1/ The balance remained unpaid for more than 30 days and Petitioner, in accordance with the terms of sale, amended the original invoice and added a charge of two cents for each of the 5,200 units of Bahia sod related to the transaction ($104). Petitioner also added to the invoice a charge of $7.80 for sales tax related to the late payment penalty ($104 x 7.50 percent). On or about February 10, 2017, Petitioner sent Respondent invoice 48409, which showed a balance due of $390 for 5,200 units of Bahia sod, $21 for a pallet deposit, and $29.25 for sales tax (total = $440.25). On February 15, 2017, Respondent submitted to Petitioner partial payment in the amount of $398.33, which left an unpaid balance of $41.92. The balance remained unpaid for more than 30 days and Petitioner, in accordance with the terms of sale, amended the original invoice and added a charge of two cents for each of the 5,200 units of Bahia sod related to the transaction ($104). Petitioner also added to the invoice a charge of $7.80 for sales tax related to the late payment penalty ($104 x 7.50 percent).
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 approving the claim of Other Side Sod, LLC, against C. Fullerton and Landscaping Co., Inc., in the amount of $4,981.34. DONE AND ENTERED this 7th day of November, 2017, in Tallahassee, Leon County, Florida. S LINZIE F. BOGAN 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 7th day of November, 2017.
The Issue The issue is whether Petitioner timely filed his request for claim form requesting reimbursement for certain covered expenses under the Florida Flexible Benefits Program--Reimbursement Plan.
Findings Of Fact Petitioner is a member of the faculty of the University of South Florida. He participates in the Florida Flexible Benefits Program--Reimbursement Program (Program). The Plan allows participants to pay certain eligible medical or dependent day care expenses with pretax earnings. Each year, during an open enrollment period, an employee may elect to participate in the Program and select an amount of salary to be deducted from his or her pay. The amount of salary so deducted is not subject to federal income tax, but is available to reimburse the employee for covered expenses. In order for the Program to continue to enjoy preferential treatment under the federal income tax law, Respondent, which administers the Program, must adhere to certain rules. Most relevant to this case is that that the deducted salary must be at risk. Specifically, an employee is not entitled to a refund of all or part of the deduction if he or she does not timely submit sufficient reimbursable expenses to exhaust his or her account. The Program brochure clearly warns participants of this "use it or lose it" rule. The plan year for the Program is the calendar year. In 1997, Petitioner was a participant in the Program. He and his wife chose not to submit claims for covered expenses, as they paid them during the year. Instead, they accumulated the receipts with the intent of submitting a single claim for their account balance at the end of the plan year. The Program sets a claims filing deadline of April 15 for filing claims arising out of the expenses paid in the preceding calendar year. The Program brochure warns that this deadline means all claims for expenses incurred during a plan year must be postmarked by midnight, April 15 of the following year to be considered for processing. Any claims received after this date will be returned to the participant unprocessed, regardless of the account balances. Participants should file claims as soon as the required documentation is obtained. This case involves only one issue: whether Petitioner timely submitted his claims for reimbursement under the Program. There is no issue concerning Petitioner's payment of these expenses or his account balance. There is no issue whether these expenses are eligible for reimbursement. In early March 1998, Petitioner and his wife collected their receipts for covered expenses from 1997. Petitioner completed a reimbursement form and addressed the envelope to Respondent at the correct address. Wanting to make copies of the materials, Petitioner did not immediately mail the package to Respondent. A few days later, prior to copying the materials or mailing the package, Petitioner's father became ill in the Mideast, where he lives. Petitioner and his wife agreed that she would copy the materials and mail the package to Respondent. On March 21, which marks the birthday of Petitioner's wife and a cultural holiday for Petitioner and his wife, Petitioner's wife telephoned her husband, who was still visiting his sick father. In the ensuing discussion, Petitioner learned that she had not yet mailed the package. They discussed the matter and again agreed that she would copy the materials and mail the package without further delay. Without further delay, Petitioner's wife copied the materials and mailed the package to Respondent at the correct address. She placed the package with sufficient postage in a mailbox across from her home. The package consisted of a claims reimbursement form and receipts for eligible expenses. It appears that she may have written an old return address on the envelope. Respondent never received the package. Respondent's procedures are carefully designed and executed to ensure that it will not lose a claim form. Repeated searches for the missing form never uncovered it. The package was lost after its mailing by Petitioner's wife and prior to its delivery to Respondent. Possibly, the incorrect address precluded notification to Petitioner of problems with delivery. Possibly, the package was just lost. Unfortunately, Petitioner learned only after the April 15 deadline that Respondent had never received the package.
Recommendation It is RECOMMENDED that the Department of Management Services, Division of State Group Insurance, enter a final order determining that Petitioner timely submitted the claim and eligible expenses that were the subject of this case. DONE AND ENTERED this 8th day of March, 2000, in Tallahassee, Leon County, Florida. ROBERT E. MEALE 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 8th day of March, 2000. COPIES FURNISHED: Paul A. Rowell, General Counsel Department of Management Services 4050 Esplanade Way Tallahassee, Florida 32399-0950 Thomas D. McGurk, Secretary Department of Management Services 4050 Esplanade Way Tallahassee, Florida 32399-0950 Mohsen M. Milani 15927 Ellsworth Drive Tampa, Florida 33647 Julia Forrester Assistant General Counsel Department of Management Services 4050 Esplanade Way, Suite 260 Tallahassee, Florida 32399
The Issue The central issue in this case is whether the Respondent is indebted to the Petitioner for agricultural products and, if so, in what amount.
Findings Of Fact Based upon the testimony of the witnesses and the documentary evidence received at the hearing, I make the following findings of fact: Petitioner, Holmes Nursery & Gardens Associates, LTD., is a wholesale and retail nursery providing a variety of landscape agricultural products. The east coast regional office for Petitioner is located at 1600 SW 20th Street, Fort Lauderdale, Florida. Respondent, Garden of Eden Landscape and Nursery, Inc., is an agricultural dealer with its office located at 3317 So. Dixie Highways Delray Beach, Florida. Respondent, Garden of Eden is subject to the licensing requirements of the Department of Agriculture and Consumer Services. As such, Garden of Eden is obligated to obtain and to post a surety bond to ensure that payment is made to producers for agricultural products purchased by the dealer. To meet this requirement, Garden of Eden delivered a certificate of deposit from Sun Bank of Palm Beach County to the Department. On or about April 23, 1986, Garden of Eden ordered and received delivery of $1770.00 worth of agricultural products from Petitioner. This purchase consisted of four viburnum odo., five weeping podocarpus and one bottlebrush. On or about April 25, 1986, Garden of Eden ordered and received delivery of $420.00 worth of agricultural products from Petitioner. This purchase consisted of three live oaks. On or about April 28, 1986, Garden of Eden ordered and received delivery of $312.50 worth of agricultural products from Petitioner. This purchase consisted of twenty-five viburnum odo. On or about April 29, 1986, Garden of Eden ordered and received delivery of $520.00 worth of agricultural products from Petitioner. This purchase consisted of four laurel oaks. On or about May 5, 1986, Garden of Eden ordered and received delivery of $1,130.00 worth of agricultural products from Petitioner. This purchase consisted of forty-seven crinum lily and six hundred and twenty-two liriope muscari. On or about May 13, 1986, Garden of Eden ordered and received delivery of $2,943.00 worth of agricultural products from Petitioner. This purchase consisted of seven cattley grava, and six paurotes. On or about May 28, 1986, Garden of Eden ordered and received delivery of $315.00 worth of agricultural products from Petitioner. This purchase consisted of one roebelinii single and one roebelinii double. On or about June 19, 1986, Garden of Eden ordered and received delivery of $300.00 worth of agricultural products from Petitioner. This purchase consisted of one paurotis 5 stem. The total amount of the agricultural products purchased by Garden of Eden was $7,710.50. On August 8, 1986, Garden of Eden paid $1060.00 on the account. On September 24, 1986, another $2500.00 was remitted to Holmes Gardens on this account. The balance of indebtedness owed by Garden of Eden to Holmes Gardens for the purchases listed above is $4,150.00. Petitioner claims it is due an additional sum of $436.04 representing interest on the unpaid account since the assessment of interest to an unpaid balance is standard practice in the industry; however, no written agreement or acknowledgment executed by Garden of Eden was presented with regard to the interest claim.
