The Issue The issue is whether respondent is indebted to petitioner in the amount $5,838.59 as alleged in the complaint filed on September 19, 1996.
Findings Of Fact Based upon all of the evidence, the following findings of fact are determined: Petitioner, Bo Bass, is a watermelon farmer in Alachua County, Florida. Respondent, Hapco Farms, Inc., is licensed as a dealer in agricultural products having been issued License No. 8456 by the Department of Agriculture and Consumer Services. As required by state law, respondent has posted a $75,000 bond written by Insurance Company of North America, as surety, to assure proper accounting and payment to producers. Freddie Bell is also a watermelon farmer who operates under the name of B & G Produce. That firm is located in Williston, Florida. According to petitioner, whenever Bell has extra trucks during watermelon season, he will load petitioner’s watermelons on those trucks, deliver them to B & G Produce’s shed for packing, and then sell them to various dealers. Upon collection of the moneys for the sale of such produce, Bell would then pay petitioner. On June 17, 18 and 19, 1996, petitioner verbally agreed to entrust four loads of watermelons to B & G Produce for resale to third parties. Petitioner expected to be paid six cents per pound for his produce. On the same dates, respondent, through its field buyer, entered into an agreement with B & G Produce, but not petitioner, for the purchase of four loads of watermelons. The weight bills for those shipments reflect that, while Bo Bass was the grower on two of those shipments, B & G Produce was the seller of all four loads. After the watermelons were sold to respondent and transported to its customers, a federal inspection determined that a number of watermelons were overripe and rotten. Because of this, a portion of the loads was “dumped.” This in turn reduced the amount of money due the seller. However, respondent made a proper accounting and payment to B & G Produce, and no claim has been filed by the seller against respondent. When petitioner ultimately received only $4,691.30 from B & G Produce, he filed a complaint against respondent seeking an additional $5,838.59. There is no competent evidence that petitioner ever entered into an agreement to sell his watermelons to respondent. Therefore, if petitioner has a dispute over any moneys allegedly due, it lies with Bell, and not respondent.
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 denying petitioner’s claim against the bond of respondent. DONE AND ENTERED this 31st day of March, 1997, in Tallahassee, Florida. DONALD R. ALEXANDER Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (904) 488-9675, SUNCOM 278-9675 Fax Filing (904) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this 31st day of March, 1997. COPIES FURNISHED: Honorable Bob Crawford Commissioner of Agriculture The Capitol, PL-10 Tallahassee, Florida 32399-0810 Richard Tritschler, Esquire Department of Agriculture and Consumer Services The Capitol, PL-10 Tallahassee, Florida 32399-0810 Bo Bass 2829 Southwest State Road 45 Newberry, Florida 32669 Andrew B. Hellinger, Esquire First Union Financial Center, Suite 2350 200 South Biscayne Boulevard Miami, Florida 33131-2328 Insurance Company of North America 1601 Chestnut Street Philadelphia, Pennsylvania 19192 Brenda D. Hyatt, Chief Bureau of License and Bond Mayo Building Tallahassee, Florida 32399-0800
Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the hearings the following facts are found: At all times pertinent to this proceeding, Petitioner was a producer of agricultural products in the State of Florida as defined in Section 604.15(5), Florida Statutes (1983). At all times pertinent to this proceedings Respondent Pagano was a licensed dealer in agricultural products as defined by Section 604.15(1); Florida Statutes (1983), issued license no. 1624 by the Departments and bonded by Sentry Indemnity Company (Sentry) in the sum of $29,000.00 - Bond No. 88-04453-01. At all times pertinent to this proceeding, Respondent Sentry was authorized to do business in the State of Florida. The complaint filed by Petitioner was timely filed in accordance with Section 604.21(1), Florida Statutes (1983). Petitioner sold several loads of watermelons to Respondent Pagano during the 1985 watermelon season but only three (3) loads are in disputed and they are: (a) 1 load of Crimson Sweet Watermelons loaded from Barron Farm No. 3 on April 19, 1985, weighing 46,180 pounds and billed on Petitioner's invoice, No. 24-2264 at $0.274 per pound for a total invoice price of $12,653.32; (b) 1 load of Crimson Sweet Watermelons loaded from Barron Farm No. 3 on April 19, 1985, weighing 44,920 pounds and billed on Petitioner's invoice, No. 24-2265 at $0.274 per pound for a total invoice price of $12,308.08; and (c) 1 load of Grey Watermelons loaded from Barron Farms No. 2 on April 20, 1985, weighing 41,620 pounds and billed on Petitioner's invoice No. 24-2298 at $0.274 per pound for a total invoice price of $11,403.88. Each truck was weighed before and after loading on the date loaded to determine the net weight of watermelons. There was no evidence presented that this net weight was incorrect. Although the price included the cost of delivery to Respondent Pagano at 62 Brooklyn Terminal Market, Brooklyn, New York, the more credible evidence shows that the agreement between Petitioner and Respondent Pagano was that title and risk of loss passed to Respondent Pagano on shipments with all remedies and rights for Petitioner's breach reserved to Respondent Pagano. When each of the three (3) loads arrived at their destinations the total pounds to be paid for, either at the agreed upon price or at a reduced price; was adjusted downward. On each of the loads there were some watermelons paid for at a reduced price because of alleged bruising which together with the reduction in total pounds and a deduction for "protect advance", caused a reduction in the total invoice price as follows: INVOICE NO. ORIGINAL PRICE ADJUSTED PRICE DIFFERENCE 24-2264 $12,653.32 $11,397.39 $1,255.93 24-2265 12,308.08 8,667.84 3,640.24 24-2298 11,403.88 10,478.50 925.38 TOTAL: 36,365.28 30,543.73 5,821.55 There was no federal or state inspection performed at the time the watermelons were loaded or after arrival at their destination. The more credible evidence shows that petitioner was not advised of the condition of the watermelons before the adjustment was made to allow petitioner an opportunity to ask for an inspection or give any other instruction with regards to the watermelons. Petitioner sold and shipped to different buyers, five (5) loads of Crimson Sweet Watermelons and two (2) loads of mixed watermelons from Barron Farms Nos. 2 and 3 on April 19, 1985 which were received without any incident of loss due to bruising or otherwise. Petitioner sold and shipped to different buyers five (5) loads of Grey watermelons from Barron Farm No. 2 and three (3) loads of Crimson Sweet Watermelons from Barron Farms Nos. 2 and 3 on April 20, 1985 which were received without any incident of loss due to bruising or otherwise. Petitioner made adjustments in the amount of freight owed on all three (3) loads due to differences in weight at point of shipment and weight at destination and for the weight of watermelons rejected. On invoice No. 24- 2265 the freight was reduced from $1,976.48 to $1,651.20 which included a reduction for 5,120 pounds of rejected watermelons at $4.40 per hundred weight plus $100.00 protect advanced on invoice No. 24-2298 the freight was reduced from $1,831.28 to $1,704.00 which includes a reduction for 620 pounds of watermelons due to difference in weight at point of shipping and weight at destinations plus $100.00 protect advanced and on invoice No. 24-2264 the freight was reduced from $2,031.92 to $1,847.88 which includes a reduction for 1910 pounds of watermelons rejected or difference in shipping and receiving weights plus $100.00 protect advance. The total difference in freight on all three loads is $636.60. On May 12 and 29, 1985, Respondent Pagano paid Petitioner the total sum of $30,543.73 leaving a balance owed on the three (3) loads of $5;82l.55 which Respondent Pagano has refused to pay.
Recommendation Based upon the Findings of Fact and Conclusions of Law recited herein, it is RECOMMENDED that Respondent Pagano be ordered to pay to the Petitioner the sum of $5,821.55 with the Petitioner being held responsible for any freight due as a result of this recommendation. It is further RECOMMENDED that if Respondent Pagano fails to timely pay the Petitioner as ordered, then Respondent Sentry be ordered to pay the Department as required by Section 604.21, Florida Statutes (1983) and that the Department reimburse the Petitioner in accordance with Section 604.21, Florida Statutes (1983). Respectfully submitted and entered this 24th day of February, 1985, in Tallahassee, Leon County, Florida. Hearings Hearings 1985. WILLIAM R. CAVE Hearing Officer Division of Administrative The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative this 24th day of February, COPIES FURNISHED: Doyle Conner, Commissioner Department of Agriculture and Consumer Services The Capitol Tallahassee, Florida 32301 Robert Chastain, General Counsel Department of Agriculture and Consumer Services Mayo Building, Room 513 Tallahassee, Florida 32301 F. J. Manuel, Jr., Esquire Post Office Box 3626 Orlando, Florida 32802 Robert Hanshaw and Bruce Hanshaw Post Office Box 996 LaBelle, Florida 33935 Ron Weaver, Esquire Department of Agriculture and Consumer Services Mayo Building Tallahassee, Florida 32301 Joe W. Kight, Chief License and Bond Room 418, Mayo Building Tallahassee, Florida 32301 Tony Pagano & Sons, Inc. 62 Brooklyn Terminal Market Brooklyn, New York 11236
Findings Of Fact Petitioner, Am-Pro Distributors, Inc., d/b/a Am-Pro of Florida (hereinafter referred to as "Am-Pro"), is a producer-broker of watermelons. Keith Warren has been the chief operating officer of Am-Pro at all times pertinent to this proceeding. Respondent, Brown's Produce, Inc. (hereinafter referred to as "Brown's"), is also a watermelon producer-broker. Brown's is located in Gilchrist County, Florida. Jerry Brown has been Brown's chief operating officer at all times relevant to this proceeding. In early 1994, James Dukes informed Mr. Warren that he was interested in purchasing watermelons. Mr. Warren was concerned about selling watermelons to Mr. Dukes because of doubts about whether Mr. Dukes would pay for the watermelons. When Mr. Warren told Mr. Dukes that he would not sell watermelons to him, Mr. Dukes mentioned Mr. Brown. Subsequent to Mr. Warren's conversation with Mr. Dukes, Mr. Warren received a telephone call from Mr. Brown. Mr. Brown informed Mr. Warren that he had been doing business with Mr. Dukes. Mr. Brown also told Mr. Warren that he did not have sufficient watermelons to supply Mr. Dukes. During the telephone conversation, Mr. Brown told Mr. Warren that, if he would send watermelons to Mr. Dukes as requested, he would pay for the watermelons. Mr. Warren told Mr. Brown that he would send the watermelons to Mr. Dukes, but that he would look to Mr. Brown for payment and not Mr. Dukes. Mr. Brown agreed. The agreement between Mr. Brown and Mr. Warren was not reduced to writing, consistent with industry practices. Nor did Mr. Brown or Mr. Warren agree on the amount of watermelons that were to be sent to Mr. Dukes. Watermelons were first shipped to Mr. Dukes on or about April 20, 1994. A total of nine shipments of watermelons were made to Mr. Dukes. The following shipments of watermelons were made to Mr. Dukes during April of 1994: DATE AMOUNT CHARGED April 20: $7,272.60 April 26: 7,139.20 April 27: 7,484.40 April 28: 5,909.50 April 28: 6,468.65 April 29: 6,551.20 On or about April 30, 1994, Mr. Warren decided not to send any further shipments of watermelons to Mr. Dukes because no payment had been made for the April shipments. Mr. Warren telephoned Mr. Brown about the lack of payment. Mr. Brown indicated that he would send some money and that he would get Mr. Dukes to send money directly to Mr. Warren that Mr. Dukes owed him. Mr. Brown asked Mr. Warren to continue sending watermelons to Mr. Dukes. Shortly after speaking to Mr. Brown about the nonpayment for watermelons sent to Mr. Dukes, Mr. Warren received three checks from Mr. Dukes. The checks were dated May 2, 1994. The total amount paid by Mr. Dukes was $10,000.00. These payments were credited against the indebtedness for watermelons shipped to Mr. Dukes. Mr. Warren informed Mr. Brown that he had received partial payment. Mr. Brown asked Mr. Warren to send more watermelons because he still did not have sufficient melons to supply Mr. Dukes. In reliance on Mr. Brown's statements, made additional shipments of watermelons to Mr. Dukes during May of 1994. The following shipments of watermelons were made to Mr. Dukes: DATE AMOUNT CHARGED May 2: 5,913.30 May 3: 4,620.60 May 3: 3,780.00 A total of $55,139.45 was invoiced for watermelons shipped to Mr. Dukes. The evidence failed to prove whether invoices for the individual shipments of watermelons to Mr. Dukes were provided to Mr. Brown. Invoices accepted into evidence are addressed to Brown's and J.B. Farms, Inc. Those invoices, however, were generated by an office of Am-Pro located in Plant City, Florida. The evidence failed to prove that the invoices were actually transmitted to Browns. The first written confirmation of the shipments was sent on or about May 21, 1994. Mr. Brown was, however, verbally informed of the shipments by Mr. Warren. Mr. Brown subsequently paid $20,000.00 to Am-Pro by check dated May 18, 1994. The payment was made by Mr. Brown through J.B. Farms, Inc. The payment was credited against the remaining indebtedness of $45,139.45, leaving a balance of $25,139.45. Mr. Warren made additional requests to Mr. Brown for payment of the remaining indebtedness after the $20,000.00 payment. Mr. Brown told Mr. Warren that additional payments would be made. During late May of 1994 or early June of 1994 Mr. Brown first informed Mr. Warren that he would not pay any further amount of the indebtedness for watermelons shipped to Mr. Dukes. On or about May 21, 1994, Johnna Thompson, an employee of Am-Pro, spoke with Mr. and Ms. Brown about the outstanding debt for watermelons shipped to Mr. Dukes. Ms. Thompson was asked to send a summary of the amounts invoiced for the watermelons. Ms. Thompson sent a summary of the watermelons shipped during April and May of 1994 by fax to Ms. Brown by Johnna Thompson. The check for $20,000.00 received by Am-Pro was sent in response to Ms. Thompson's request for payment. For some unexplained reason the check was dated May 18, 1994. The check, however, was not received until after May 21, 1994 and was paid May 27, 1994. At no time during Ms. Thompson's conversations with the Browns did either Mr. Brown or Ms. Brown indicate that only one shipment of watermelons to Mr. Dukes was to be paid for by Brown's. Nor did Mr. Brown, who had earlier told Mr. Warren that he would have Mr. Dukes send Mr. Warren money that Mr. Dukes owed Mr. Brown, tell Ms. Thompson that all or part of the $10,000.00 sent by Mr. Dukes was in payment for the one load of watermelons Mr. Brown allegedly agreed to pay for. Ms. Thompson also overheard one other conversation between Mr. Warren and Mr. Brown concerning the shipment of watermelons to Mr. Dukes. At no time during that conversation did Mr. Brown indicate that he was only paying for one shipment of watermelons.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Agriculture and Consumer Affairs enter a Final Order requiring that Brown's Produce, Inc., pay to Petitioner the sum of $25,139.45, within fifteen days of the Final Order and, absent such payment, requiring Lawyers Surety Corporation, after notice of nonpayment, to pay the same amount to Petitioner to the extent of the amount remaining under the bond. DONE and ENTERED this 21st day of May, 1996, in Tallahassee Florida. LARRY J. SARTIN, 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 21st day of May, 1996. APPENDIX TO RECOMMENDED ORDER DOAH CASE NO. 94-5999A The parties have submitted proposed findings of fact. It has been noted below which proposed findings of fact have been generally accepted and the paragraph number(s) in the Recommended Order where they have been accepted, if any. Those proposed findings of fact which have been rejected and the reason for their rejection have also been noted. Petitioner's Proposed Findings of Fact Accepted in 5. Accepted in 6-7. Accepted in 8. Accepted in 8-10. 5-6 Summary of some events and testimony at the final hearing. Accepted in 12. See 20. Accepted in 13. Accepted in 12. Accepted in 13. Accepted in 13 and hereby accepted. Accepted in 14. 14-15 Summary of some events and testimony at the final hearing. Accepted in 15. Accepted in 18. 18-19 Accepted in 19. 20 Accepted in 20. 21-22 Accepted in 9 and 15 23 Accepted in 14 and 18. 24-25 Hereby accepted. Not supported by the weight of the evidence. Accepted in 21-22. Accepted in 21. Accepted in 23. 30-35 Not relevant. Summary of some events and testimony at the final hearing. 36-39 These proposed findings are a summary of events and testimony at the final hearing. The statement of Mr. Dukes was given no weight in this Recommended Order. 40-44 Summary of some events and testimony at the final hearing. Accepted in 8-9. Summary of some events and testimony at the final hearing. Cumulative. Accepted in 16. Summary of some events and testimony at the final hearing. Hereby accepted Browns' Proposed Findings of Fact Accepted in 1-2. Accepted in 3-4. Hereby accepted. Statement of the issue. Accepted in 5. Accepted in 6-7. Accepted in 8-9. 8-9 Not supported by the weight of the evidence. See 10. Hereby accepted. See 17 and 21. Accepted in 21. Accepted in 17 and 21. 15-16 Accepted in 17. 17-19 Hereby accepted. 20-21, 24-25 and 33-34 These proposed findings of fact are generally correct. The "discrepancies" in dates were not sufficient to raise doubt as to the pertinent facts in this case. The discrepancies relate to when the invoices were run. Not supported by the weight of the evidence. See 13. Hereby accepted. The last sentence is not, however, supported by the weight of the evidence. 26-27 Not supported by the weight of the evidence. 28-29 Not relevant. Not supported by the weight of the evidence. Not relevant and not supported by the weight of the evidence. Hereby accepted. 35 See 8 36-38 Not supported by the weight of the evidence. Hereby accepted. Not supported by the weight of the evidence. Not relevant. Not supported by the weight of the evidence. COPIES FURNISHED: James H. Buzbee, Esquire Post Office Drawer HHH Plant City, Florida 33564-9053 Theodore M. Burt, Esquire Post Office Box 308 Trenton, Florida 32693 Lawyers Surety Corporation 1025 South Semoran, Suite 1085 Winter Park, Florida 32792 Brenda D. Hyatt, Chief Bureau of License and Bond Department of Agriculture & Consumer Services Mayo Building Tallahassee, Florida 32399-0800 Honorable Bob Crawford Commissioner of Agriculture The Capitol, PL-10 Tallahassee, Florida 32399-0810 Richard Tritschler, Esquire The Capitol, PL-10 Tallahassee, Florida 32399-0810
Findings Of Fact In 1983 William Lovett, Jr., Complainant, planted 65 acres of water melons, most of which were bought by Doyle L. Wadsworth, Respondent, either for himself or for William Manis Company. The only entity for which Respondent acted as agent was the Manis Company, for whom he has bought melons as its agent for many years. On behalf of himself or Manis, Respondent, in 1983, purchased melons from Complainant on June 16, 17, 20, 23, 24, 27, and 29. Complainant's melons were bought at prices ranging from seven cents to ten cents per pound. The melons were paid for by check signed by Respondent, dated zero to five days after the invoice date, on either Respondent's checking account at the Barnett Bank of Brandon or on Manis Company's account at Sun Bank of Tampa. Total payments to Complainant for these melons were $285,104.25 (Exhibits 2 and 3). Complainant and Respondent had met shortly before the 1983 water melon season through a mutual friend. Wadsworth agreed to buy water melons from Lovett, not to act as his broker. The grower had the water melons harvested, the buyer provided trucks and trailers to pick up the melons at the field, and the sale occurred when the melons were loaded. Wadsworth testified that he explained to Lovett that he buys melons on a load basis which he has done for many years, that he does not act as a broker to sell the melons, and that once the melons are loaded they are the responsibility of the then-owner, Wadsworth. 1983 was a good year for water melons and Wadwsorth bought nearly all of Lovett's production. Lovett asked Wadsworth if he would handle his melons if Lovett planted a crop in 1984 and Wadsworth agreed. Wadsworth also told Lovett that he preferred "grays," which Lovett planted. Lovett understood that Wadsworth had agreed to buy all of his water melons except for those Lovett sold independently, and to pay the prevailing prices. Wadsworth had no such understanding. Lovett's primary occupation is doctor of veterinary medicine and he relied on others for harvesting information. For reasons not fully explained at the hearing, the harvesting of Lovett's 1984 crop of water melons was a little late. Accordingly, any further delays resulted in overripe or sunburned water melons. The first harvesting of Lovett's melons occurred on Saturday, June 2, 1984, and Wadsworth bought 46,480 pounds at 3-1/2 cents per pound on behalf of Manis Company. Harvesting next occurred Monday, June 4, 1984, when Wadsworth bought 40,680 pounds for Manis and just over 100,000 pounds for himself. Payment for these water melons was made June 5, 1984, by a check in the amount of $3,050.60 on the Manis bank and $3,626.70 00 Wadsworth's bank. During the loading on June 4 a large number of water melons were discarded as culls. This made the task of grading and overseeing the grading much more onerous, and Wadsworth advised Lovett he would not be buying any more water melons from him that season. Lovett came to Wadsworth's motel to persuade him to do otherwise, but without success. Lovett asked Wadsworth if he could refer him to someone else to handle his melons, which request Wadsworth declined. Lovett subsequently obtained the services of a broker to handle his water melons but the additional delay in getting the crop harvested and the extra brokerage cost he incurred resulted in less income to Lovett than he would have received had Wadsworth bought all of Lovett's melons. Conflicting evidence was presented regarding the condition of the water melons grown by Lovett in 1984. Lovett's witnesses described the field as the finest ever seen, while Wadsworth testified that recent excess rainfall left part of the field wet, and some vines were wilting. All witnesses agreed that there were a large number of culls discarded from the water melons graded No. 1 on the first harvesting. In view of the recommended disposition of this case, a definitive finding of fact on this issue is unnecessary.
The Issue The issue in this case is whether Petitioner is entitled to additional payment for a shipment of watermelons that he delivered to Respondent in May, 1993.
Findings Of Fact Growers Marketing Services, Inc. (Respondent) is a broker of watermelons and other agricultural produce. Preferred National Insurance Company, Inc. is the surety for Respondent. Petitioner has grown watermelons for about six years. In 1993, as in past years, Petitioner sold watermelons to Respondent and other brokers. Late on the afternoon of May 5, 1993, and continuing past darkness, Petitioner loaded a trailer full of watermelons for C & C, which is another agricultural broker to which Petitioner sells watermelons. Because Petitioner lacks sufficient lighting at the place of loading, the crew could not sufficiently determine the quality of the watermelons that they were loading. Many misshapen and substandard watermelons were loaded, but the trailer was not quite full. The conformance of the shipment, which was supposed to be all large watermelons, suffered further when a C&C representative told Petitioner to complete the load with smaller melons. Petitioner did so. The C & C shipment was taken to the scales, weighed, and trucked that night to Miami, where the recipient rejected the shipment due to poor quality and small size. On the morning of May 6, Petitioner learned that C & C was returning the shipment to him and would not pay for it. A field representative of Respondent learned of the rejected shipment and offered to try to sell it for whatever he could. Petitioner agreed. When the melons returned to the area on May 6, they were immediately taken to Respondent's packing house in Plant City. The packer immediately recognized that the melons were quite distressed. Misshapen, flat, and leaking, the melons needed to be sold fast. The packer so informed representatives of Respondent, who directed the packer to place the melons in large bins, rather than boxes, so they could be more easily marketed. A representative of Respondent immediately informed Petitioner of this development, and he said that they should get whatever they could for the melons. Respondent called a customer in Jacksonville, explained the situation, and agreed to sell them on consignment to the customer. The customer successfully remarketed a large number of the melons and, on May 25, 1993, remitted to Respondent a check in the amount of $5000, representing full payment for the melons. Respondent deducted from the $5000 its normal binning charge of $1260 and its normal sales charge of $420, leaving $3320. After a small mandatory deduction for National Watermelon Promotion Board, Respondent remitted to Petitioner, by draft dated June 10, 1993, the net of $3311.60. With the above-described payment, Petitioner has been paid in full for the watermelons.
Recommendation Based on the foregoing, it is hereby RECOMMENDED that the Department of Agriculture and Consumer Services enter a final order dismissing the Complaint. ENTERED on January 10, 1994, in Tallahassee, Florida. ROBERT E. MEALE Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings on January 10, 1994. COPIES FURNISHED: Hon. Bob Crawford Commissioner of Agriculture The Capitol, PL-10 Tallahassee, FL 32399-0810 Richard Tritschler, General Counsel Department of Agriculture The Capitol, PL-10 Tallahassee, FL 32399-0810 Brenda Hyatt, Chief Bureau of Licensing and Bond Department of Agriculture 508 Mayo Building Tallahassee, FL 32399-0800 Kye Bishop, pro se 145 N. Osceola Arcadia, FL 33821 Arthur C. Fulmer P.O. Box 2958 Lakeland, FL 33806 Preferred National Insurance P.O. Box 40-7003 Ft. Lauderdale, FL 33340-7003
The Issue The issue is whether Respondent The Heidrich Corporation owes Petitioner money for watermelons and, if so, how much.
Findings Of Fact In June 1996, Petitioners, who are growers, sold watermelons to Respondent The Heidrich Corporation (Respondent), which is a broker. Respondent shipped the watermelons directly from Petitioners' fields to Canada for resale. This case involves eight deliveries of watermelons from Petitioners to Respondent. Petitioners' invoice numbers and dates of sale are as follows: 1392 on June 14, 1393 on June 15, 4004 on June 18, 4005 on June 19, 4013 and 4015 on June 22, 4016 on June 23, and 4034 on June 25. The understanding between Petitioners and Respondent relieved Respondent of the responsibility of paying for watermelons that were nonconforming when received by Respondent's customer. Nonconforming melons are melons that are decayed, undermature, overmature, destroyed for inspection, or otherwise reasonably unacceptable to Respondent's customer. However, nonconforming melons do not included melons that are unacceptable due to damage in transit; such damage would consist of cracking or bruising. The parties did not explicitly agree who would bear freight, inspection, and disposal expenses of nonconforming melons. After deduction for nonconforming melons, the June 14 shipment comprised 40,102 pounds. The parties agreed to a price of 4.5 cents per pound for this shipment, so the amount due Petitioners is $1804.59. Respondent paid freight of $92.31 attributable to decayed watermelons. After deduction for nonconforming melons, the June 15 shipment comprised 45,181 pounds. The parties agreed to a price of 4.5 cents per pound for this shipment, so the amount due Petitioners is $2033.15. Respondent paid freight of $33.75 attributable to decayed watermelons. After deduction for nonconforming melons, the June 18 shipment comprised 35,963 pounds. The parties agreed to a price of five cents per pound for this shipment, so the amount due Petitioners is $1798.15. Respondent paid freight of $226.16 attributable to decayed watermelons. The June 19 shipment was substantially nonconforming. Sixty-eight percent of the watermelons were defective on receipt in Canada, possibly due to excessive rainfall and premature cutting. Respondent's customer rejected the entire load, rather than try to find the few salable melons. For the purposes of the present case, the proper accounting for this shipment is to multiply the unloaded weight of 32,890 pounds by the percentage of conforming watermelons (32 percent). The result of 10,525 pounds represents the weight of conforming melons on receipt in Canada. The parties agreed to a price of five cents per pound, so the amount due Petitioners is $526.25. Respondent did not separately state the freight attributable to the nonconforming fruit that was not the result of shipping. Expressed as percentages of the shipping weight (not unloaded weight), eight percent of the melons were decayed, 38 percent were undermature, and five percent were overmature, for a total of 51 percent, or 20,981 pounds, of nonconforming melons. Freight on this shipment was 5.5 cents per pound, so the freight expenses for these nonconforming melons is $1153.96. Respondent also credited its customer with $700 to pay for the disposal of the melons. There were two relevant shipments on June 22. The first is documented by Petitioners' invoice 4013. After deduction for nonconforming melons, this shipment comprised 41,316 pounds. The parties agreed to a price of five cents per pound for this shipment, so the amount due Petitioners is $2065.80. Respondent paid freight of $231.20 attributable to decayed watermelons. The second June 22 shipment is documented by Petitioners' invoice 4015. The deduction for nonconforming melons requires two calculations. On arrival in Canada, prior to governmental inspection, Respondent's customer reasonably rejected 13,572 pounds out of 47,270 shipped pounds; 12,612 pounds were nonconforming (the remaining 960 pounds were bruised). Of the remaining 33,698 pounds, 15 percent, or 5055 pounds, were also nonconforming, as reflected in an ensuing governmental inspection. This means that 18,627 pounds of the original shipment were nonconforming, leaving 28,643 pounds of conforming melons. The parties agreed on five cents per pound for this shipment, so the amount due Petitioners is $1432.15. Respondent paid freight of $931.35 attributable to the nonconforming melons. Respondent's customer reasonably rejected 68 percent of the June 23 shipment of 44,120 pounds. However, 19 percent of the rejected melons were bruised, so the net deduction for nonconforming melons in the June 23 shipment is 20,736 pounds, leaving conforming melons of 23,384 pounds. The parties agreed to a price of five cents per pound for this shipment, so the amount due Petitioners is $1169.20. Respondent paid freight of $1036.80 35 attributable to the nonconforming melons. Respondent also paid its customer $850 for dumping and inspection fees. The final shipment, which took place on June 25, was by bins, rather than loose watermelons. There were no nonconforming melons in this shipment. The parties agreed that Respondent would pay $1272.55 for this shipment.
Recommendation It is RECOMMENDED that the Department of Agriculture and Consumer Services enter a final order determining that Respondent owes Petitioners the sum of $12,101.84. DONE AND ENTERED this 7th day of July, 1997, 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 (904) 488-9675 SUNCOM 278-9675 Fax Filing (904) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this 7th day of July, 1997. COPIES FURNISHED: Brenda Hyatt, Chief Bureau of Licensing and Bond Department of Agriculture and Consumer Services 508 Mayo Building Tallahassee, Florida 32399-0800 Francis A. Oakes Oakes Produce Company 2744 Edison Avenue Fort Myers, Florida 33916 Francis X. Heidrich, President The Heidrich Corporation Post Office Box 151059 Altamonte Springs, Florida 32715-1059 Aetna Casualty & Surety Company 151 Farmington Avenue Hartford, Connecticut 06156
The Issue Whether Respondent owes Petitioner $41,783.69 as alleged in the complaint filed on December 2, 1996.
Findings Of Fact Based upon all of the evidence, the following findings of fact are determined: Background Petitioner, Lenard Powell (Petitioner), is a watermelon farmer in Lake Panasoffkee, Florida. Respondent, Joe Marinaro (Respondent), is a licensed dealer in agricultural products doing business as Atlantic Fruit Company in Fort Pierce, Florida. He has been in the business for more than forty years and has an unblemished record. As a licensed dealer, Respondent is subject to the regulatory authority of the Department of Agriculture and Consumer Services (Department). Respondent has posted a bond written by Reliance Insurance Company, as surety, to assure proper accounting and payment to producers such as Petitioner. In a complaint filed with the Department on December 11, 1996, Petitioner alleged that he entered into an agreement with Howard Bailey (Bailey) on behalf of Tom Lange Company (Lange), a distributor of fresh fruits and vegetables, to market his 1996 watermelon crop. Under that alleged agreement, Lange would advance "up front seed money, $900.00 per trailer for labor advance, when road truck crossed the scales, [and] supply the boxes and cartons which were to be deducted from the final payment." According to the complaint, Petitioner was to pay Lange and Bailey "a fee of one cent per pound on seeded varieties and two cents per pound on seedless watermelons." The complaint goes on to allege that in May 1996, Bailey advised Petitioner that he no longer represented Lange, but now represented Respondent, and "the deal was still the same." Finally, Petitioner has alleged that the final summary from Respondent "had inconsistent weights, document numbers and prices" and that Petitioner's calculations showed an unaccounted for balance of $45,506.97. As amended at hearing, Petitioner now claims he is owed $41,783.63. In his Amended Response, Respondent contends that even though the agreement called for him to have an exclusive right to sell Petitioner's 1996 crop, a portion of the crop was sold directly by Petitioner or Bailey to third parties without Respondent's knowledge. He further contends that the watermelons were to be sold on a twenty percent of gross proceeds commission basis rather than the one and two cents per pound commission basis alleged in the complaint. Respondent also asserts that some of the watermelons were dumped because of spoilage and that a part of the bins or cartons were packed with oversize watermelons, thus "short-counting" the number of melons in each container. This resulted in the buyers making deductions upon delivery of the produce. After taking these factors into consideration, Respondent claims that no money is owed. The Agreement It is customary in the watermelon business to enter into agreements to buy and sell watermelons without a written contract. Therefore, it was not unusual for the parties to base their agreement on a handshake or verbal understanding. Bailey is a "part-time watermelon broker," farmer, and owner of Bailey Farms, Inc., in Schoolcraft, Michigan. Although he says he has been licensed as a dealer in the past, Bailey had no license or bond when these events occurred. Bailey has had dealings with Respondent since around 1989. In 1995, Bailey was involved in a "relationship" with Lange in which they worked "joint deals" splitting profits and commissions. Under that relationship, Bailey would arrange to market a grower's watermelons through Lange's customers and split the profits or commissions with Lange. In November 1995, two Lange representatives (Phil Gumpert and Michael E. Smith) and Bailey met with Petitioner in Wildwood, Florida, for the purpose of exploring the possibility of marketing Petitioner's 1996 crop. Under the arrangement proposed by Lange, Petitioner would receive the proceeds from the sale of his watermelons handled by Lange, less a commission, less the usual and customary weight differences between the gross weight shipped and the net weight paid by buyers, less the advances made by Lange for plants, seeds, materials and supplies, and less deductions for non-conforming watermelons in general, improper sizing, inaccurate counts in bins, and oversizing in cartons. As to the amount of commission, Lange proposed to charge twenty percent of gross sales proceeds. Bailey acknowledges that Petitioner initially balked at paying a twenty percent commission on the ground that amount was too high but contended he eventually agreed to that figure when it was explained there was no incentive for the dealer to get a good price for the watermelons if the dealer was paid a flat one or two cents per pound commission. Petitioner contends, however, that he did not agree with this amount and instead wanted only to pay one cent per pound for seeded watermelons and two cents per pound for seedless watermelons. His version of the events is accepted as being the most credible, and thus it is found that, as of November 1995, there was no agreement on that issue. It is noted that except for the amount of commissions, Petitioner basically agreed with all other terms and conditions discussed by Lange and Bailey. In view of the lack of agreement on the amount of the commission, there was no meeting of the minds by the parties. This was confirmed by Michael Smith, a Lange representative, who described the meeting as simply "exploratory" in nature and nothing more. Sometime after the meeting, Lange sent Petitioner an unsigned copy of a "Marketing Agreement" which contained the terms under which Lange would advance moneys to Petitioner in return for an exclusive right to sell his 1996 crop. The agreement was sent to Petitioner merely "as an example" in the event the parties might reach an agreement. It contained terms and conditions pertaining to commission, grower advances, and other relevant considerations. Paragraph 7 of the agreement called for the dealer to receive "a commission equal to twenty percent (20%) of the final gross selling price of each shipment." After receiving the agreement, Petitioner consulted his attorney, who at that time was his father-in-law. The attorney lined out a part of the provision relating to commissions, and in paragraph 8, he inserted a requirement that the dealer provide Petitioner with a "verified" accounting of the sales. However, the amended agreement was never signed by Petitioner nor returned to Lange or Bailey. Petitioner did not immediately notify Lange orally or in writing that he was dissatisfied with the terms described in the agreement. It was his intention, however, to further negotiate the amount of the commission. A short time later, he contacted Bailey regarding his disagreement with the amount of commission and was told by Bailey, "don't worry about it." Based on this conversation, Petitioner assumed that only a one or two cents commission would be paid and that an agreement had been formed. Bailey never conveyed Petitioner's concerns to Lange. Events Prior to the Harvesting of the Crop Petitioner received and accepted advances of funds for plants, seeds, and materials to produce the watermelons. While the precise amount is not known, it approximated around $40,468.00. A part of these moneys initially came from Bailey and the remainder from Respondent. Petitioner used these funds to plant and harvest his 1996 watermelon crop. In March 1996, Bailey learned that because the venture "was not attractive," Lange was no longer interested in marketing Petitioner's watermelons. Indeed, in his deposition testimony, a Lange representative suggested that an agreement between Lange and Petitioner had never been reached before Lange bowed out of the picture. In any event, because Bailey had cash invested in the venture, and he was in dire need of a new broker with financial backing and customers to buy the watermelons, he contacted Respondent to ascertain if he was interested in the venture. Among other things, Bailey represented that in return for Respondent providing up-front money to Petitioner, Respondent would have an "exclusive right of sale" and they would share in a twenty percent commission. It is noteworthy that Bailey did not show Respondent a copy of the Marketing Agreement previously sent by Lange to Petitioner, and he did not tell Respondent that Petitioner would pay a commission of only one cent per pound for seeded watermelons and two cents per pound for seedless watermelons. Based on Bailey's less than candid representations, Respondent agreed to take Lange's place in the venture. Under their arrangement, Bailey and Respondent had a community of interest in a common purpose, that is, the sale of Petitioner's crop. By virtue of the exclusive right of sale, they had joint control or right to control to whom they sold the watermelons. In addition, the two had joint control or right to control a checking account established in Michigan for that venture. They intended to share profits by splitting the commissions, and they likewise intended to share in any losses. Finally, they both expended their knowledge, time, labor, and skill in furtherance of the joint venture. Around April 1996, Bailey contacted Petitioner and advised him that Lange was no longer in the transaction, but that Respondent's company, Atlantic Fruit Company, would stand in Lange's shoes and handle the watermelons on the same basis as they had previously agreed. Because Respondent had a good reputation and a sufficient bond, Petitioner agreed to the substitution of dealers. Petitioner and Respondent did not discuss the terms and conditions of the agreement, including the amount of commissions to be paid, since they both relied on the representations of Bailey. The Sale of the Produce In all, fifty loads of watermelons were shipped from Petitioner's field at the direction of either Respondent or Bailey. Because Petitioner never received bills of lading for two of those shipments, and he has abandoned a claim as to those two, only forty-eight shipments are in dispute. Without Respondent's knowledge, Petitioner sold eight loads of watermelons directly to third parties and received a total of $21,069.70. These proceeds were used by Petitioner to pay labor costs. Bailey knew and agreed to the third party sales. Bailey sold thirteen loads of watermelons without Respondent's knowledge. On these loads, Bailey was paid a commission of one cent per pound of the weight of the melons, which amount is consistent with the parties' agreement. Bailey did not split the commission he received on these loads with Respondent. These transactions reinforce the view, as more fully discussed below, that Bailey knew that Petitioner had agreed to a different commission basis than the one he described to Respondent. Petitioner kept track of the harvest by making notes in a "log book." The log book contains the date, variety of watermelon, net weights, and price per pound that he was to receive. The book was prepared contemporaneously. In addition to the log book, Petitioner was given a copy of a bill of lading for each truck load of watermelons that was shipped. The bills of lading indicated the weight, variety, broker, and destination and were prepared on forms of either Atlantic Fruit Company or Bailey Farms, Inc. Petitioner's claim is comprised of five categories. First, he is claiming the difference between the twenty percent commission charged by Respondent and the one or two cents commission to which he agreed. Second, he is claiming the value of the weight difference between what the buyer received and what was shipped from his fields and recorded on the bills of lading. Third, he is claiming the difference between what the buyer paid per pound and the price per pound Petitioner reflects in his log book. Fourth, Petitioner is claiming the amount the buyer deducted from the purchase price because of spoilage or short counts. Finally, Petitioner claims the unaccounted weight shortage in watermelons shipped by Bailey to Bailey's cooler in White Springs, Florida. Each of these categories will be discussed below. Twenty percent commission Petitioner first contends he is owed the difference between a twenty percent commission charged on thirty-five shipments by Respondent and the one and two cents per pound commission to which he agreed. The total amount in controversy is $14,503.18. The underlying documentation for these loads is found in Petitioner's Exhibits 1, 5, 7, 9, 10, 12, 13, 15-20, 23- 28, 31, 33-39, and 41-48. The evidence established that, consistent with Petitioner's claim, it is customary in the industry that brokers receive a one cent per pound commission for the sale of seeded watermelons and a two cents per pound commission for the sale of seedless watermelons. While Bailey contended at hearing that some growers were paying a twenty percent commission on seedless (but not seeded) watermelons, he could not identify any such growers. Further, in deposition testimony, Lange acknowledged that it had no customers in Florida in 1996 using that commission basis. Finally, on thirteen loads sold directly by Bailey to third parties, he was paid a one cent per pound commission, which is consistent with Petitioner's position. Given these considerations, the undersigned is persuaded that Petitioner never agreed to a twenty percent commission arrangement. Therefore, Petitioner is only obligated to pay a one cent per pound commission on seeded watermelons and two cents per pound on seedless watermelons sold by Respondent. Petitioner is entitled to reimbursement for the difference between a twenty percent commission and the agreed upon amount. Since it was not shown that Petitioner's suggested amount of $14,503.18 should be modified if adjustments to other claims are made, that amount is found to be appropriate. This amount, however, should be offset by the commission which Respondent should have received from Petitioner for the sale by Petitioner of eight loads of watermelons to third parties. This is because those sales contravened the parties' agreement that Respondent had an exclusive right to sell all of Petitioner's 1996 crop since he had advanced the money to produce and harvest the crop. While Respondent is also entitled to share in the commission received by Bailey for thirteen loads sold by Bailey to third parties without Respondent's knowledge, Respondent's remedy is against Bailey, and not Petitioner. Buyer deductions Petitioner contends that he is owed $7,121.99 for miscellaneous deductions improperly made by the buyers. In this case, the buyers made deductions for short counts, that is, there were fewer watermelons in a bin or carton than are normally packed in a standard size carton or bin. The underlying documentation for this portion of the claim is found in Petitioner's Exhibits 15, 17, 24, 25, 28, 29, 36, 38, 39, 41, and 43-46. For the following reasons, this claim is found to without merit. The custom and usage in the industry is for the grower to provide good and marketable quality watermelons at the size and state of maturity required by the buyers. Petitioner experienced harvesting problems, and his watermelons were too large, resulting in improper sizing, inaccurate counts in bins, and oversizing in cartons. This ultimately affected the number that could be packed into a carton or bin and resulted in many containers having fewer watermelons than are normally packed. Under these circumstances, the buyers made deductions for non-conforming watermelons. Petitioner argues that he should have been consulted by Bailey or Respondent and allowed to request a government inspection each time a buyer found a non-conforming load. The evidence shows, however, that this would have been impractical, time-consuming, and futile since an inspection would simply confirm that there was a short count in the bins. Moreover, given the time of the year (June 1996), inspections may well have caused additional spoilage since loads would remain unpacked in the truck in the hot weather until a government inspector became available. Then, too, the inspection process would tie up the facilities of the buyer until the process was completed. Weight differences Petitioner next contends that he is owed $5,064.23 for the difference in weight shown on the bills of lading and the weight the buyer received. In other words, on thirteen shipments, the delivered weight was less than the weight shown on the bill of lading. These shipments are documented in Petitioner's Exhibits 2, 4, 6, 8, 9, 11, 14, 16, 21, 22, 30, 32, and 40. The usual and customary practice in the industry is for the buyer to pay for the delivered weight of watermelons and not the shipped weight. In this case, most of the weight differences occurred with respect to bulk load shipments of watermelons. The evidence shows that it is not unusual for bulk load shipments to have weight differences of up to 2,000 pounds. For differences of more than 2,000 pounds, the standard practice is for the broker to contact the grower, advise that there is a problem, and ask if the grower desires a government inspection. The shipments identified in Petitioner's Exhibits 2, 6, 8, 11, 14, 22, 30 and 32 had weight differences of less than 2,000 pounds and therefore were not unusual. On the remaining five loads, however, Petitioner was not told that there was a problem, nor was he asked if he wanted a government inspection. This was contrary to industry practice. Accordingly, as to the shipments identified in Petitioner's Exhibits 4, 9, 16, 21, and 40, Petitioner should be compensated for the difference between the delivered weight and the bill of lading, or $4,420.53, less any commissions due Respondent. Log price differences Petitioner next contends that he is entitled to $7,489.55 for the price difference between the log book price and the price paid by the buyer. In other words, he is contending that he was guaranteed a certain sales price, but the produce was sold for a lesser amount. To determine the amount allegedly due, Petitioner multiplied the difference between his log book price per pound and what the buyer paid per pound times the weight received by the buyer. The standard practice in the industry is that a broker or dealer does not guarantee a price for the grower when the produce is being handled on a commission basis. The dealer is simply obligated to make a "best effort" to get the top price back to the farmer. This industry practice was incorporated into the Marketing Agreement, and Petitioner was aware of this industry standard. Although Petitioner may have been led to believe by Bailey that he would receive a specified amount per pound on some future loads, and Petitioner then recorded that amount in his log book, there was no way that such a price could be guaranteed until the produce was actually sold to the buyer. Accordingly, Petitioner is only entitled to be paid the amount for which the watermelons were sold. Therefore, this portion of his claim should be denied. Cooler loads Finally, Petitioner has claimed reimbursement in the amount of $7,513.74 for 47,798 pounds of watermelons shipped to a cooler in White Springs, Florida, for which he alleges he never received any compensation. The underlying documents for this claim are found in Petitioner's Exhibits 49 through 55. Because some watermelons were ripe in the field but still unsold, and Bailey did not want them to spoil, he shipped seven loads to a cooler in White Springs for storage for delivery on future sales. Bailey had leased the cooler for just this purpose. The total weight shipped from Petitioner's farm to the cooler was 271,464 pounds. The total weight sold from the cooler was 213,666 pounds, or a difference of 57,798 pounds. Through no fault of Bailey, however, some of the produce became spoiled and had to be dumped. According to Bailey, at least 40,000 pounds or more were dumped. However, the individual who was in charge of the cooler, William G. Poucher, estimated the amount to be no more than 10,000 pounds. Poucher's testimony is accepted as being more credible on this issue. This left approximately 47,798 pounds of unaccounted watermelons, for which Petitioner should be compensated. Petitioner apparently calculated his claim by multiplying the unaccounted weight (47,798) by an average price of around fifteen cents per pound to arrive at a figure of $7,513.74. This yardstick has not been challenged, and it is accordingly found that Petitioner is owed $7,513.74, less any commissions due Respondent. Respondent has contended that because the cooler movements were never disclosed to him by Bailey and Petitioner, he should not be held liable for any missing produce. However, the shipments were made at the direction of Respondent's agent and partner, Bailey, and thus he should be accountable for the actions of his agent/partner. Respondent also suggests that the 47,798 pounds of unaccounted watermelons were non-conforming produce unable to be sold. The more credible evidence suggests otherwise.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the Department of Agriculture and Consumer Affairs enter a final order determining that Respondent owes Petitioner the moneys discussed in paragraph 44. In the event payment is not timely made, the surety should be responsible for the indebtedness. DONE AND ENTERED this 18th day of November, 1997, in Tallahassee, Leon County, Florida. DONALD R. ALEXANDER Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (904) 488-9675, SUNCOM 278-9675 Fax Filing (904) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this day 18th of November, 1997. COPIES FURNISHED: Honorable Bob Crawford Commissioner of Agriculture The Capitol, Plaza Level 10 Tallahassee, Florida 32399-0810 Brenda Hyatt, Chief Bureau of Licensing and Bond 508 Mayo Building Tallahassee, Florida 32399-0800 Felix M. Adams, Esquire 138 Bushnell Plaza, Suite 201 Bushnell, Florida 33516 Richard D. Sneed, Esquire 1905 South 25th Street Suite 206, Mardi Executive Center Fort Pierce, Florida 34947 Nick Cerulli, Esquire Bond Claim Department Reliance Insurance Company 4 Penn Center Plaza Philadelphia, Pennsylvania 19103 Richard D. Tritschler, Esquire Department of Agriculture and Consumer Services The Capitol, Plaza Level 10 Tallahassee, Florida 32399-0810
Findings Of Fact The Petitioner, Triple M Packing, Inc. (Triple M) is in the business of selling produce, particularly tomatoes from its principal business address of Post Office Box 1358, Quincy, Florida. The Respondent, Fair Chester Tomato Packers, Inc. (Fair Chester), is primarily engaged in the business of packaging, distributing and brokering tomatoes in the New York City metropolitan area. It purchases produce from various sellers around the country in tomato-producing areas for resale at markets in the New York City area. Since it is a licensed agricultural dealer, the Respondent is required under the pertinent provisions of Chapter 604, Florida Statutes, to file a surety bond with the Department of Agriculture and Consumer Services (Department), designed to guarantee payment of any indebtedness to persons selling agricultural products to the bonded dealer to whom the dealer fails to make accounting and payment. Fair Chester has thus obtained a 50,000 surety bond which is underwritten by its Co-Respondent, Hartford Accident and Indemnity Company (Hartford). During the 1984 growing season, the Petitioner sold certain shipments of tomatoes to the Respondent for a price of $12,276. Thereafter, curing middle-to-late 1984, the Respondent Fair Chester, found itself in straitened financial circumstances such that it was unable to pay its various trade creditors, including the Petitioner. In view of this, various creditors at the behest of a lawyer retained by Fair Chester, eventually entered into a composition agreement, whereby the unsecured trade creditors agreed to settle, release and discharge in full their claims against Fair Chester on the condition that each creditor signing that agreement be paid thirty-three and one-third percent of its claim. It was determined that the composition agreement would be operative if the trade creditors representing 95 percent or more in dollar amount of all unsecured debts accepted the terms and provisions of that composition agreement on or before November 13, 1984. All the Respondent's unsecured trade creditors were contacted and ultimately those representing more than 95 percent of the outstanding creditor claims against Respondent accepted the terms and provisions of the composition agreement by the deadline. A document indicating acceptance by the Petitioner was signed by one Robert Elliott, purportedly on behalf of the Petitioner, Triple M Packing, Inc. In this connection, by letter of November 13, 1984 (Respondent's Exhibit 4) Attorney Howard of the firm of Glass and Howard, representing the Respondent, wrote each trade creditor advising them that the required acceptance by 95 percent of the creditors had been achieved, including the acceptance of the agreement signed and stamped "received November 8, 1984" by Robert Elliott, sales manager of Triple M. In conjunction with its letter of November 13, 1984, Glass and Howard transmitted Fair Chester's check for one-third of the indebtedness due Triple M or $4,092. The Petitioner's principal officer, its president, Kent Manley, who testified at hearing, acknowledged that he received that letter and check, but he retained it without depositing it or otherwise negotiating it. In the meantime, on October 29, 1984 a complaint was executed and filed by Triple M Packing, Inc. by its president, Kent Manley, alleging that $12,276 worth of tomatoes had been sold to Respondent on June 13, 1984 and that payment had not been received. The purported acceptance of the composition agreement executed by Robert Elliott, sales manager, was not executed until November 8, 1984 and the check for $4,092 in partial payment of the Triple M claim was not posted until November 13, 1984. Mr. Manley's testimony was unrefuted and established that indeed Mr. Elliott was a commissioned salesman for Triple M, was not an officer or director of the company and had no authority to bind the company by his execution of the composition of creditors agreement. Mr. Manley acted in a manner consistent with Elliott's status as a commissioned salesman without authority to bind the Petitioner corporation since, upon his receipt of the "one- third settlement" check with its accompanying letter, he did not negotiate it, but rather pursued his complaint before the Department. In fact, in response to the Department's letter of December 20, 1984 inquiring why the complaint was being prosecuted in view of the purported settlement agreement, Mr. Manley on behalf of Triple M Packing, Inc. by letter of December 28, 1984, responded to Mr. Bissett, of the Department, that he continued to hold the check and was not accepting it as a final settlement. Thus, in view of the fact that the complaint was filed and served before notice that 95 percent of the creditors had entered into the composition agreement and never withdrawn, in view of the fact that on the face of the complaint Robert C. Elliott is represented as a salesman indeed, for an entity known as "Garguilo, Inc.," and in view of the fact that Mr. Manley as president of Triple M, retained the check without negotiating it and availing himself of its proceeds, rather indicating to the Department his wish to pursue the complaint without accepting the check as settlement, it has not been established that the Respondent, Fair Chester, was ever the recipient of any representation by Manley, or any other officer or director of the Petitioner corporation, that it would accept and enter into the above-referenced composition of creditors agreement. It was not proven that Triple M Packing, Inc. nor Mr. Manley or any other officer and director either signed or executed the composition agreement or authorized its execution by Robert C. Elliott. Respondent's position that Mr. Manley and Triple M acquiesced in the execution of the settlement agreement by Elliott and the payment of the one-third settlement amount by the subject check has not been established, especially in view of the fact that the complaint was filed after Attorney Howard notified Triple M of Respondent's settlement offer and prior to notice to Triple M that the settlement agreement had been consummated by 95 percent of the creditors and prior to the sending of the subject check to Triple M. Mr. Manley then within a reasonable time thereafter, on December 28, 1984, affirmed his earlier position that the entire indebtedness was due and that the settlement had not been accepted.
Recommendation Having considered the foregoing Findings of Fact and Conclusions of Law, the candor and demeanor of the witnesses, the evidence of record and the pleadings and arguments of the parties, it is, therefore RECOMMENDED: That Fair Chester Tomato Packers, Inc. pay Triple M Packing Company, Inc. $12,276. In the event that principal fails to or is unable to pay that indebtedness, Hartford Accident and Indemnity Company should pay that amount out of the surety bond posted with the Department of Agriculture and Consumer Services. DONE and ENTERED this 16th day of September, 1985 in Tallahassee, Florida. Hearings Hearings 1985. COPIES FURNISHED: Mr. Kent Manley, Jr. Post Office Box 1358 Quincy, Florida 32351 P. MICHAEL RUFF Hearing Officer Division of Administrative The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative this 16th day of September, Arthur Slavin, Esquire BLUM, HAIMOFF, GERSEN, LIPSON, GARLEY & NIEDERGANG 270 Madison Avenue New York, New York 10016 Honorable Doyle Conner Commissioner of Agriculture The Capitol Tallahassee, Florida 32301 Mr. Joe W. Kight Bureau of Licensing & Bond Department of Agriculture Mayo Building Tallahassee, Florida 32301 =========================================================== ======
The Issue The issue for determination is whether Respondents owe Petitioner approximately $3,807.00 for a quantity of watermelons provided to Respondents by Petitioner; secondarily, resolution of this issue requires a determination of whether Respondents acted as an agent for Petitioner as opposed to a direct purchase of Petitioner's melons by Respondents.
Findings Of Fact Petitioner is a resident of Suwannee County, Florida and a farmer who produces agricultural products, including watermelons. Respondent John W. Hill, is a dealer of such products in the course of normal business activity. Respondent Hill's services include arranging for the harvesting and loading of melons for shipment to northern markets, as well as the location of buyers for the melons. Respondent Hill acts as a broker in these arrangements, receives the gross sales receipts from buyers and from that sum deducts costs of labor, freight, inspections, any other associated costs and his commission. The net balance of the gross sales receipts are paid to the melon producers. Respondent Florida Farm Bureau Mutual Insurance Company is the bonding agent for Respondent pursuant to Section 604.20, Florida Statutes. Petitioner knew Respondent Hill and had discussed brokerage or trading of watermelons with him on occasion. Shortly before or on July 2, 1992, Petitioner's watermelon crew left him and he telephoned Respondent Hill. Unable to speak with Hill, Petitioner spoke with Hill's wife. She and Petitioner discussed a possible price for Petitioner's melons of five cents a pound. Shortly thereafter, Respondent Hill later contacted Petitioner by telephone and confirmed the five cents per pound price, provided the melons met requirements. Respondent was using a cellular telephone in his truck and when Petitioner hung up his telephone and walked out of his barn, he observed Respondent's employees in the field starting to cut the vines connected to the melons. Respondent Hill was nearby in his truck. Petitioner and Respondent Hill drove around the farm and looked at Petitioner's various melon plots. Respondent Hill agreed to attempt to market a variety of the melons known as sangaria at the five cents per pound price. The parties did not reduce their agreement to writing. Respondent Hill felt that Petitioner understood that they were partners, that he was acting as Petitioner's broker for the eventual sale of the melons to a specified buyer, FRESH PLUS, a buyer in Philadelphia, Pennsylvania. At one point during the process of driving around the watermelon field, Hill and Petitioner discussed the condition of the melons and that they would run the melons in and see if they could get five cents per pound for them. Hill also was convinced that Petitioner understood that the melons must be accepted by the receiver or meet certain conditions in order to get that price for the melons. It is customary within the industry that, unless stated otherwise, all melons must grade US #1 at the time of delivery to a buyer. Petitioner did not accompany the loads of watermelons to the shipping facility where the sangaria melons were weighed and loaded for shipment. As a result, he did not receive a copy of Respondent Hill's July 2, 1992, track report documenting a 48,320 pound load of sangaria watermelons bearing the written statement "must be accepted by receiving or grade U.S. #1." The melons were rejected by the buyer upon arrival in Philadelphia as not meeting requirements and Respondent Hill, when learning of the rejection, called for and received an official USDA inspection of the melons. The July 6, 1992 inspection revealed that the melons were not US #1. Respondent Hill then shipped the melons to an alternate perspective buyer, T & K Binning in Jessup, Maryland. Upon arrival, T & K rejected 375 of the melons and accepted 2,127 melons at $1.25 per melon for a total purchase price of $2,685.75 which was received by Respondent Hill. After subtraction of labor costs of $733.12, freight costs of $1,965.00, and inspection costs of $133.50, Respondent Hill absorbed a net loss of $212.93. Another 27,280 pounds of melons that were not of the sangaria variety were loaded from Petitioner's farm and shipped to a seller, Park-N-Shop, in Charlotte, North Carolina, along with melons grown by several other producers. These commingled melons were sold for a gross sales price of $1,344.00. After substraction of labor costs of $792.83 and freight costs of $714.20, Hill absorbed a net loss of $163.03 for the melons. Testimony of Respondent Hill at the final hearing was corroborated by documentation of Respondent Hill's absorption of all costs connected with the sale of the melons, including initial loading costs. Hill's testimony establishes that the arrangement between the parties was a brokerage arrangement and that the sale of the melons was subject to conditions common to the industry, i.e., that the melons grade #1 upon receipt by buyer. Testimony of Petitioner is uncorroborated and fails to establish that the agreement between the parties contemplated a direct sale of the melons to Respondent Hill.
Recommendation Based on the foregoing, it is hereby RECOMMENDED that a Final Order be entered dismissing Petitioner's complaint. DONE AND ENTERED this 15th day of July, 1993, in Tallahassee, Leon County, Florida. DON W. DAVIS 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 15th day of July, 1993. APPENDIX The following constitutes my rulings, pursuant to requirements of Section 120.59, Florida Statutes, on proposed findings of fact submitted by the parties. Petitioner's Proposed Findings 1. Accepted in substance. 2.-3. Rejected, subordinate to HO findings on this point. 4. Rejected, argument. Respondent's Proposed Findings 1.-9. Accepted in substance. 10. Rejected, cumulative. COPIES FURNISHED: David Hingson Route 4, Box 330 Live Oak, Florida 32060 William A. Slaughter, II, Esquire P.O. Box 906 Live Oak, Florida 32060 Florida Farm Bureau Mutual Insurance Company Legal Department 5700 SW 34th Street Gainesville, Florida 32608 Hon. Bob Crawford Commissioner of Agriculture The Capitol Tallahassee, Florida 32399-1550 Richard Tritschler General Counsel 513 Mayo Building Tallahassee, Florida 32399-0800 Brenda Hyatt, Chief Bureau of Licensing & Bond Department of Agriculture Mayo Building, Rm 508 Tallahassee, Florida 32399-0800
The Issue The issue in the proceeding is what amount, if any, is owed by M. G. Ford Produce to Spessard Putnal for two and a half loads of watermelons. A determination of this issue requires a determination of the character of the transaction regarding the watermelons: Was it a "sale", or was it an agreement to "handle" the melons as a broker?
Findings Of Fact Spessard Putnal grows watermelons in Lafayette County and operates out of Mayo, Florida. M. G. Ford owns M. G. Ford Produce Company, a licensed and bonded brokerage business and the successor to his father's business, Malvin Ford Produce. Both S. J. Ridgdill and Rodney Ridgdill own a fraction of the business. The principal office is in LaBelle, Florida; however, other offices are located temporarily elsewhere, including Mayo, during the various growing seasons. The watermelons which are the subject of this dispute are described as follows: Load number 218 This was 44,340 pounds of Charleston Grey watermelons: 28,260 pounds of melons grown by Cory Buchanan from Mayo, and 16,080 pounds of melons grown by Spessard Putnal. The truck left Lafayette County on June 22, 1986, and arrived at A & P Stores in Edison, New Jersey, on June 24, 1986. The load was inspected by an A & P inspector and was rejected for excessive rind rot. The load was then consigned to Eckert Produce, Inc. in Philadelphia on June 25, 1986. Eckert sold the melons for $.75 and $1.00 each, and after deducting its unloading, handling and selling charges ($534.88), paid M. G. Ford Produce $1,057.62. M. G. Ford's accounting to Spessard Putnal and Cory Buchanan which, after deducting freight expense of $1,640.58 and $75.00 handling charge, indicated a net loss of $657.96. The loss was apportioned between the two growers according to their share of the load. Load number 227 This was a full load of Spessard Putnal's Charleston Grey melons; 46,070 pounds. It left by truck on June 30, 1986, and was inspected by a U.S. Department of Agriculture inspector in New York on July 3, 1986. Six per cent damage by "transit rubs" was found, and 7 percent decay. The load arrived at Wakefern Foods in Linden, New Jersey, on July 3, 1986, where it was rejected. The load was then consigned to Eckert Produce Company in Philadelphia on July 7, 1986. A few melons sold for $1.25 each; most sold for $1.00 each. After deducting its various charges ($587.74), Eckert paid M. G. Ford Produce $1,098.51 for the load. M. G. Ford's accounting to Spessard Putnal showed deductions of $1,773.69 for freight and $75.00 for handling, for a net loss of $750.18. Load number 228 This was 43,890 pounds of Spessard Putnal's Charleston Grey melons. The truck left on July 2, 1986, and the load was inspected in New Jersey for a prospective distributor, Anthony Gangemi, Inc. The U.S. Department of Agriculture inspection form dated July 5, 1986, is stamped "Rejected" with notations of internal rind spots, bruising, bacterial soft rot, and "overripe". The load was consigned to Eckert Produce on July 7, 1986. The melons that were not discarded were sold for $1.00 each. After deducting its charges ($545.55), Eckert paid M. G. Ford Produce $1,143.45 for the load. In turn, M. G. Ford deducted freight of $1,645.87 and handling charges of $75.00, and its accounting to Spessard Putnal showed a net loss of $577.42. 1/ The end of the watermelon season in Lafayette County in 1986 was around the Fourth of July. Because of heavy rains and because of the end of the season, M. G. Ford Produce had considerable trouble with rind rot on Charleston Greys by the time they got to the northern markets. John Hull works for M. G. Ford Produce. He inspects the melons in the field and supervises the loading by contract crews. He thought Spessard Putnal's watermelons looked good and would "ride" (go north and pass inspection and be accepted). He told Putnal that he (Putnal) should be able to get at least $.03 per pound. When the two men called M. G. Ford, who was in North Carolina, he told them that the only way he would take the loads was on a consignment basis and that he would pay $.03 a pound or better if they passed inspections. The melons were loaded and their fate is described in Paragraph 3, above. Spessard Putnal claims that the agreement was that M.D. Ford bought his melons for $.03 a pound. He says that he never sells his melons on consignment but is paid "when they cross the scale". He said that the reason he wasn't paid immediately in this case was that M. G. Ford was in North Carolina. He admits that on other occasions he was paid by M. G. Ford according to the prices the melons brought "up the road". Sonya Ridgdill is M. G. Ford's mother and Malvin's widow. She served as bookkeeper, office manager and secretary for Malvin Ford Produce for 15 years and now works with her son's company. She was in the Mayo office when the arrangements were made regarding Mr. Putnal's melons and she could have paid him immediately if that had been the agreement. M. G. Ford Produce both "buys" produce and "handles" (consignment) produce for growers. When the produce is bought, the grower is paid immediately. The company has "handled" melons for both Spessard Putnal and Cory Buchanan. Cory Buchanan did not contest the accounting on his share of load number 218. A negative inspection will not necessarily result in a load being "kicked" (rejected). The market supply and demand also governs whether the load will be sold. As is common in such transactions, the arrangement between Spessard Putnal and M. G. Ford Produce is not reflected in writing. Nor is there evidence of written or verbal consent from Spessard Putnal to the consignment by M. G. Ford to Eckert Produce.
Recommendation Based upon the foregoing, it is recommended that a Final Order be entered finding that no funds are owed by Respondents to Petitioner for the watermelons in question and dismissing Petitioner's complaint. DONE AND RECOMMENDED this 25th day of February, 1987, at Tallahassee, Florida. MARY CLARK, 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 25th day of February, 1987.
