The Issue The issues presented are whether Respondent, George Mason Citrus, Inc. (Mason), owes Petitioner $10,000 for citrus fruit that Mason purchased from Petitioner and, if so, whether the surety is liable for any deficiency in payment from Mason.
Findings Of Fact Petitioner is a Florida corporation licensed by the Department as a “citrus fruit dealer,” within the meaning of Subsection 601.03(8), Florida Statutes (2005) (dealer).1 The business address for Petitioner is 1103 Southeast Lakeview Drive, Sebring, Florida 33870. Mason is a Florida corporation licensed by the Department as a citrus fruit dealer. The business address for Mason is 140 Holmes Avenue, Lake Placid, Florida 33852. Western is the surety for Mason pursuant to bond number 42292005 issued in the amount of $100,000 (the bond). The term of the bond is August 1, 2004, through July 31, 2005. Petitioner conducts business in Highlands County, Florida, as a dealer and as a “broker” defined in Subsection 601.03(3). In relevant part, Petitioner purchases white grapefruit (grapefruit) for resale to others, including Mason. Mason conducts business in Highlands County as either an “agent,” “broker,” or “handler” defined in Subsections 601.03(2), (3), and (23). On January 31, 2003, Mason contracted with Petitioner to purchase grapefruit from Petitioner pursuant to Fruit Contract number 03-307 (the contract). Mason drafted the contract. The terms of the contract require Petitioner to sell grapefruit to Mason for the 2003, 2004, and 2005 “crop years.” The 2003 crop year began in the fall of 2002 and ended at the conclusion of the spring harvest in 2003. The 2004 and 2005 crop years began in the fall of 2003 and 2004 and ended in the spring of 2004 and 2005, respectively. Only the 2005 crop year is at issue in this proceeding. The contract required Petitioner to deliver grapefruit to a person designated by Mason. Mason designated Peace River Citrus Products, Inc. (Peace River), in Arcadia, Florida, for delivery of the grapefruit at issue. Mason was required by the terms of a Participation Agreement with Peace River to deliver 30,000 boxes of grapefruit to Peace River during the 2005 crop year. In an effort to satisfy its obligation to Peace River, Mason entered into the contract with Petitioner for an amount of grapefruit described in the contract as an “Approximate Number of Boxes” that ranged between 12,000 and 14,000. Petitioner delivered only 2,128 boxes of grapefruit to Peace River. The production of grapefruit was significantly decreased by three hurricanes that impacted the area during the 2005 crop year. The parties agree that Mason owed Petitioner $19,070.03 for the delivered boxes of grapefruit. The amount due included a portion of the rise in value over the base purchase price in the contract caused by increases due to market conditions and participation pay out after the parties executed the contract (the rise).2 On or about October 26, 2005, Mason mailed Petitioner a check for $9,070.03. The transmittal letter for the check explained the difference between the payment of $9,070.03 and the amount due of $19,070.03. Mason deducted $10,000 from the $19,070.03 due Petitioner, in part, to cover the cost of grapefruit Mason purchased from other dealers or growers to make up the deficiency in grapefruit delivered by Petitioner (cover). The $10,000 sum also includes interest Mason claims for the cost of cover and Mason's claim for lost profits. Petitioner claims that Mason is not entitled to deduct lost profits and interest from the amount due Petitioner. If Mason were entitled to deduct interest, Petitioner alleges that Mason calculated the interest incorrectly. The larger issue between the parties is whether Mason is entitled to deduct cover charges from the amount due Petitioner. If Mason were not entitled to cover the deficiency in delivered boxes of grapefruit, Mason would not be entitled to interest on the cost of cover and lost profits attributable to the deficiency. The parties agree that resolution of the issue of whether Mason is entitled to cover the deficiency in delivered boxes of grapefruit turns on a determination of whether the contract was a box contract or a production contract. A box contract generally requires a selling dealer such as Petitioner to deliver a specific number of boxes, regardless of the source of grapefruit, and industry practice permits the purchasing dealer to cover any deficiency. A production contract generally requires the selling dealer to deliver an amount of grapefruit produced by a specific source, and industry practice does not permit the purchasing dealer to cover any deficiency. The contract is an ambiguous written agreement. The contract expressly provides that it is a "Fruit Purchase Contract" and a "delivered in" contract but contains no provision that it is either a box or production contract. The contract is silent with respect to the right to cover. Relevant terms in the contract evidence both a box contract and a production contract. Like the typical box contract, the contract between Mason and Petitioner prescribes a number of boxes, specifically no less than 12,000, that are to be delivered pursuant to the contract. However, the typical box contract does not identify the number of boxes to be delivered as "Approximate No. of Boxes" that ranges between 12,000 and 14,000 boxes. Unlike a production contract, the contract does not identify a specific grove as the source of the required grapefruit. Best practice in the industry calls for a production contract to designate the grove by name as well as the number of acres and blocks. However, industry practice does not require a production contract to identify a specific grove as the source of grapefruit. In practice, Mason treated another contract that Mason drafted with a party other than Petitioner as a production contract even though the contract did not identify a specific grove as the source of grapefruit. The absence of a force majure clause in the contract may evidence either type of contract.3 A box contract typically requires the selling dealer to deliver the agreed boxes of grapefruit regardless of weather events, unless stated otherwise in the contract. However, the absence of such a clause may also be consistent with a production contract because "acts of God" are inherent in a production contract. Such acts, including hurricanes, necessarily limit grapefruit production, and a production contract obligates the selling dealer to deliver only the amount of grapefruit produced. The contract between Petitioner and Mason did not contain a penalty provision for failure to deliver the prescribed boxes of grapefruit (box penalty). The absence of a box penalty in the contract evidences a production contract. The contract identifies Petitioner as the "Grower." A grower typically enters into a production contract. A box contract does not limit the source of grapefruit to be delivered, and the selling dealer in a box contract may obtain grapefruit from anywhere in the state. The contract between Petitioner and Mason limits the source of grapefruit to grapefruit grown in Highlands County, Florida. Mason knew that Petitioner sold only grapefruit from groves in Highlands County, Florida, identified in the record as the Clagget Taylor groves. During the 2003 and 2004 crop years, Petitioner sold only grapefruit from the Clagget Taylor groves. Mason received trip tickets and other documentation related to the delivery of no less than 24,000 boxes of grapefruit, all from the Clagget Taylor groves. The boxes of grapefruit delivered during the 2005 crop year came only from the Clagget Taylor groves. Mason received documentation showing the grapefruit came from the Clagget Taylor groves. Ambiguous written agreements are required by judicial decisions discussed in the Conclusions of Law to be construed against the person who drafted the agreement. Mason drafted an ambiguous agreement with Petitioner. The agreement must be construed against Mason as a production contract. Mason owes Petitioner $10,000 for the delivered grapefruit during the 2005 crop year. The terms of the bond make Western liable for any deficiency in payment from Mason.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department enter a final order directing Mason to pay $10,000 to Petitioner, and, in accordance with Subsections 601.61 and 601.65, requiring Western to pay over to the Department any deficiency in payment by Mason. DONE AND ENTERED this 22nd day of August, 2007, 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 22nd day of August, 2007.
The Issue Whether or not Petitioners (complainants) are entitled to recover $5,640.19 or any part thereof against Respondent dealer and Respondent surety company.
Findings Of Fact Petitioners are growers of watermelons and qualify as "producers" under Section 604.15(5) F.S. Respondent Eddie D. Griffin d/b/a Quality Brokerage is a broker-shipper of watermelons and qualifies as a "dealer" under Section 604.15(1) F.S. Respondent United States Fidelity & Guaranty Company is surety for Respondent Griffin d/b/a Quality. Petitioners' claims against the dealer and his bond are listed in the Amended Complaint in the following amounts and categories: 6-18-92 Inv. #657 45,580 lbs. Crimson melons @ .05 lb. $2,279.00 Advance - 700.00 NWPB* - 9.12 $1,569.88 6-19-92 Inv. #668 2,490 lbs. Crimson melons @ .05 lb. $ 124.50 (paid for 42,860 lbs. short 2,490 lbs.) NWPB* - .50 124.00 6-20-92 Inv. #695 6,818 lbs. Crimson melons @ .05 lb. $ 340.90 (paid for 39,062 lbs. short 6,818 lbs.) NWPB* 1.36 339.54 6-20-92 Inv. @ #702 .05 39,880 lbs. Sangria melons lb. $1,994.00 Advance - 700.00 Packing Straw - 10.00 NWPB* - 7.98 Pmt. - 90.00 1,186.02 6-21-92 Inv. @ #706 .05 44,740 lbs. Sangria melons lb. $2,237.00 Advance - 700.00 Packing Straw - 10.00 NWPB* - 8.95 1,518.05 6-22-93 Inv. @ #716 .04 11,280 lbs. Crimson melons lb. NWPB* - 2.32 460.88 6-22-92 Inv. @ #709 .04 46,740 lbs. Crimson melons lb. $1,869.60 Advance - 700.00 Packing Straw - 10.00 NWPB* - 9.35 1,150.25 Deducted for #706 - 441.82 441.82 PAID 708.43 Total Claimed $5,640.19 *NWPB = National Watermelon Promotion Board Fee Petitioners and Respondent dealer have had an oral business relationship for four to five years. Both parties agree that their oral agreement initially called for a federal inspection to be done on each load if the load were refused in whole or in part by the ultimate recipient. Respondent Griffin contended that over the years there had been further oral agreements to "work out" or "ride out" small discrepancies or partial refusals of loads without resorting to federal inspections, the cost of which inspections could eliminate the entire profit on single loads. Petitioners denied that such an amended oral agreement was ever reached and further maintained that the amounts of the loads at issue herein could not be considered "small" by any interpretation. Respondent submitted no evidence as to what the relative terms, "large" and "small," mean in the industry. Consequently, it appears that there was never a meeting of the minds of the parties on the alleged oral contract amendments relied upon by Respondent. Respondent testified that in past years, prior to 1992, he had interpreted the term "ride it out" to mean that he would simply accept the hearsay statements of ultimate recipients that named poundages of melons were bad and he would let the ultimate recipients pay for only the melons they said were good. Respondent would thereafter absorb any losses himself, not passing on the loss by deducting any amount from the full amount he would normally pay to the growers within ten days. However, 1992 was such a bad year for melons that the Respondent dealer chose not to absorb the greater losses and passed them on to the growers by way of deductions on "settlement sheets." In 1992 Respondent sent Petitioners the settlement sheets with the deductions explained thereon with the net payments as much as thirty days after the ultimate sales. Upon the foregoing evidence, it appears that Respondent had established a course of business whereby Petitioners could reasonably have expected him to absorb any losses occasioned by Respondent's reliance on hearsay statements of the ultimate recipients concerning poor quality melons unless Respondent chose not to test the questionable melons with a federal inspection. Petitioners obtained Exhibit P-5 for load 657 at Respondent dealer's place of business, but were not certain it applied to the load Mr. Tucker claimed he delivered to Respondent on 6-18-92 because Mr. Tucker did not know his load number that day. The exhibit represents the weight ticket Petitioners believe applies to the load which Mr. Tucker claimed to have delivered to Respondent dealer on 6-18-92. However, the exhibit bears two other names, "Jones and Smith," not Petitioners' respective names of Tucker or Watson. It has "WACC" handwritten across it, which Mr. Tucker claimed signified the name of his watermelon field. The number "657" also has been handwritten across it. There is no evidence of who wrote any of this on the exhibit. Respondent denied that load 657 was received from Mr. Tucker. The exhibit shows a printed gross weight of 78,900 lbs., tare weight of 32,860 lbs. and net weight of 66,800 lbs. Net weights are supposed to signify the poundage of melons delivered to the dealer. Nothing on the exhibit matches Mr. Tucker's journal entry (Petitioners' Exhibit 3) of delivering 45,580 lbs. of watermelons to Respondent dealer on 6- 18-92. Mr. Tucker testified that he was never paid for his delivery. Respondent denied there was such a delivery and testified that he paid Jones and Smith for load 657. Petitioners have established no entitlement to their claim of $1,569.88 on Invoice 657. Petitioners' Exhibit P-4 represents two weight tickets secured from Respondent dealer's records that Petitioners contend apply to load 668. The first page has "45,350/6-19-92/Scott Tucker WACC" handwritten across it. None of the four poundages imprinted thereon match any of the amounts claimed by Petitioners for invoice 668, and subtracting amounts testified to also does not conform these figures to Petitioners' claim on load 668. The second page weight ticket shows a date of 6-18-92 and a weight of 34,260 lbs. It also does not match Petitioner's claim that they were owed for 45,350 lbs. but were paid for only 42,860 lbs., being paid 2,490 lbs. short. Exhibit P-8 is the 668 invoice/settlement sheet which Respondent provided to Petitioners and shows invoice 668 with date of 6-19-92, tare and pay weight of 42,860 lbs. at $.05/lb. for $2,143.00 less $8.57 melon adv. association (a/k/a NWPB, see supra) for $2,134.43, less a $700.00 advance and $10.00 for packing straw for a total due Petitioners of $1,424.43 which Respondent has already paid. Petitioners have established no entitlement to their claim of $124.00 on Invoice 668. Petitioners Exhibit P-6 represents two weight tickets secured from Respondent dealer's records. The first page has "45,880 lbs./6-20-92/Scott Tucker Crimson WACC 695" handwritten across it. None of the printed gross, tare, or net weights thereon match any of the amounts claimed by Petitioners for invoice 695. The second page shows the date 6-20-92 and a printed net weight of 32,000 lbs. Respondent dealer provided Petitioners with Exhibit P-7, invoice/settlement sheet 695 dated 6-20-92 showing tare and pay weights of 39,062 lbs. priced at $.05/lb. totalling $1,953.10, less melon adv. assoc. (a/k/a NWPB) fee of $7.81, for $1,945.29, less $700.00 advanced, less $10.00 for packing straw for a total of $1,235.29. The foregoing do not support Petitioner Tucker's claim based on his journal entry (P-3) that he was entitled to be paid for 45,880 lbs. he claims he delivered that day instead of for 39,062 pounds (short by 6,818 pounds) with balance owing to him of $339.54. Respondent has paid what was owed on invoice 695. By oral agreement at formal hearing, Petitioners' Composite Exhibit 9 shows that Petitioner Tucker delivered 39,880 lbs. of melons to Respondent dealer on 6-20-92 and Petitioner Watson received back from Respondent dealer an invoice/settlement sheet 702 showing 39,880 pounds @ $.05/lb. equalling $1,994.00 and that although $1,994.00 was owed Petitioners, Respondent thereafter subtracted for $800.00 worth of returned melons, a $700.00 advance, $7.98 for melon adv. association (a/k/a NWPB), and $10.00 for packing straw, and that a balance was paid to Petitioners of only $90.00. This is arithmetically illogical. The subtractions total $1,517.98. Therefore, if all of Respondent's subtractions were legitimate, the total balance due Petitioners would have been $476.02. If the right to deduct for the $800.00 in returned melons were not substantiated by Respondent dealer, then Petitioners would be due $1,276.02. Since all parties acknowledge that $90.00 was already paid by Respondent dealer, then Petitioners are due $1,186.02 if Respondent did not substantiate the right to deduct the $800.00. Load 702 was "graded out," i.e. accepted as satisfactory, by a representative of Respondent dealer or a subsequent holder in interest when the melons were delivered by Petitioners to Respondent dealer. That fact creates the presumption that the melons were received in satisfactory condition by the Respondent dealer. Nothing persuasive has been put forth by the Respondent dealer to show that the situation concerning the melons' quality had changed by the time the load arrived at its final destination. Respondent got no federal inspection on this load and relied on hearsay statements by persons who did not testify as to some melons being inferior. In light of the standard arrangement of the parties over the whole course of their business dealings (see Findings of Fact 5-7 supra), Petitioners have proven entitlement to the amount claimed on load 702 of $1,186.02. By oral agreement at formal hearing, Petitioners' Composite 10 shows Petitioners Tucker and Watson delivered 44,740 lbs. of melons to Respondent dealer on 6-21-92. At $.05/lb., Petitioners were owed $2,237.00, less melon adv. association fee (a/k/a NWPB) of $8.95, $700.00 for an advance, and $10.00 for straw. Those deductions are not at issue. Therefore, Petitioners would be owed $1,518.05, the amount claimed, from Respondent. However, the invoice also notes that Respondent made a $268.18 deduction for melons returned. Respondent's Composite Exhibit 1 purports to be a BB&W Farms Loading Sheet and Federal Inspection Sheet. Respondent offered this exhibit to show that only $68.18 was realized by him on load 706 which he attributed to Petitioner Watson. However, the federal inspector did not testify as to the results of the inspection, the inspection sheet itself is illegible as to "estimated total," the "estimated total" has been written in by another hand as "$62.60," and there was no explanation on the Composite Exhibit or in testimony as to how Respondent dealer came up with $200.00 in "return lumping charges" as also indicated on Exhibit R-1. Accordingly, Petitioners have established that with regard to load/invoice 706, they delivered watermelons worth $2,237.00 to Respondent dealer and Respondent dealer did not affirmatively establish that any melons were bad, despite the federal inspection sheet introduced in evidence. Petitioners have proven entitlement to their claim on invoice 706 for $1,518.05. However, Petitioners conceded that Respondent actually paid them $441.82 on invoice/settlement sheet 706. Therefore, they are only entitled to recoup a total of $1,076.23 on their claim for Invoice 706. In the course of formal hearing, Respondent dealer admitted that, with regard to load invoice 716, (Tucker) he did owe Petitioners $460.88 for 275 watermelons, and that it had not been paid purely due to clerical error. By oral agreement at formal hearing, Petitioners' Composite Exhibit 12 (Invoice and Weight Tickets 709, Watson) shows Petitioner Watson delivered 46,740 lbs. of melons to Respondent dealer on 6-22-92 and at $.04 lb., Petitioners were owed $1,869.60, less appropriate deductions. Petitioners conceded that Respondent dealer appropriately deducted $9.35 for melon adv. association (a/k/a NWPB), $700.00 for an advance, and $10.00 for packing straw, bringing the amount they were owed to $1,150.25. Petitioners and Respondent are in agreement the Respondent paid only $708.43 of the $1,150.25 owed on invoice/settlement sheet 709 because Respondent dealer also deducted from the amount owed on invoice 709 the $441.82 he had previously paid out on Invoice 706. See, Finding of Fact 13, supra. Since Petitioners have established that they were owed $1,518.05 on invoice 706 but were paid only $441.82 thereon, it appears that Petitioners should be paid $1,076.23 on Invoice 706 and realize nothing on Invoice 709.
Recommendation Upon the foregoing findings of fact and conclusions of law, it is recommended that the Department of Agriculture enter a final order awarding Petitioners $1,186.02 on invoice 702, $1,076.23 on invoice 706, and $460.88 on invoice 716 for a total of $2,723.13, dismissing all other claimed amounts, and binding Respondents to pay the full amount of $2,723.13, which in United States Fidelity & Guaranty Company's case shall be only to the extent of its bond. RECOMMENDED this 30th day of June, 1993, at Tallahassee, Florida. ELLA JANE P. 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 30th day of June, 1993. COPIES FURNISHED: Scott Tucker and Phillip Watson Route 2 Box 280 Trenton, FL 32693 Eddie D. Griffin d/b/a Quality Brokerage Post Office Box 889 Immokalee, FL 33934 William J. Moore USF&G Post Office Box 31143 Tampa, FL 33631 United States Fidelity & Guaranty Company Post Office Box 1138 Baltimore, MD 21203 Brenda Hyatt, Chief Department of Agriculture Division of Marketing, Bureau of Licensure and Bond Mayo Building Tallahassee, FL 32399-0800 Honorable Bob Crawford Department of Agriculture and Consumer Services Commissioner of Agriculture The Capitol, PL-10 Tallahassee, FL 32399-0810 Richard Tritschler, Esquire General Counsel Department of Agriculture and Consumer Services The Capitol, PL-10 Tallahassee, FL 32399-0810
The Issue The issue in this case is whether Respondent, the Department of Children and Families, properly rejected all bids received on an Invitation to Bid on Proposed Lease No. 590:2622.
Findings Of Fact The Existing Lease and the Decision to Look for New Space. District 7 of the Respondent, the Department of Children and Families (at all times relevant to this proceeding, the Department of Children and Families was known as the Department of Health and Rehabilitative Services)(hereinafter referred to as the “District”), leases approximately 26,955 spare feet of office space located in Palm Bay, Brevard County, Florida. The space is used as a client service center. Pursuant to the District’s current lease, the lease will expire on April 30, 1997. The current lease (hereinafter referred to as the “Existing Lease”) was still in effect at the time of the formal hearing of this matter. The Existing Lease also provides for a five-year renewal. For the first two years of the renewal period, the Existing Lease provides for a rental rate of $11.50 per square foot. For the third and fourth years of the renewal the rate is $11.75 and for the last year, $12.00. In June of 1995, the District submitted a Letter of Agency Staffing (hereinafter referred to as a “LAS”) and a Request for Prior Approval of Space Need (hereinafter referred to as a “RSN”), to the Department of Management Services. Pursuant to the LAS and RSN, the District sought approval from the Department of Management Services to seek a new lease of 26,872 square feet of office space in Palm Bay. The reasons given for seeking approval of a new lease set out in the RSN were as follows: New Service Center in Brevard County(Palm Bay Area). The existing lease is up! 4/30/97. The current space does not adequately provide for : (1) Secured storage, visitation areas, and case file storage. The June of 1995, RSN was approved. The District, however, did not immediately seek the approved space. The evidence failed to prove why. In July of 1996 the District submitted another Request for Space Need (hereinafter referred to as the “Second RSN”). The same amount of space was sought and the same justification for seeking new space was described in the Second RSN. The Second RSN was approved by the Department of Management Services on or about July 8, 1996. The RSN and the Second RSN were prepared by Jim Birch. Mr. Birch is the District’s Facilities Services Manager. The reason for seeking a new lease set out in the RSN and the Second RSN was provided to Mr. Birch by Bill Rawlings and Philip Penley. Mr. Penley is the District’s Sub-District Administrator for Brevard County. Mr. Rawlings is the Program Administrator for Brevard County. The Existing Lease was first entered into in 1977. The amount of space leased has increased over the years and is located in more than one building. Mr. Penley decided to request approval to seek new space in the hopes that the client service center in Palm Bay could be moved under one roof and in the hopes that more ideal space could be obtained. The representation in the RSN and the Second RSN that the existing space “does not adequately provide for: (1) Secured storage, visitation areas, and case file storage” is misleading and incorrect. The programs located in the existing space in Palm Bay can, in fact, be carried out without relocating. The Invitation to Bid. The District released an Invitation to Bid (hereinafter referred to as the “ITB”), between July 16 and July 19, 1996. The ITB provided that the “Project Contact Person” was Mr. Birch. The ITB sought bids on proposed lease number 590:2622, for approximately 26,872 square feet of office space in an existing building. The ITB sought office space in Palm Bay. The building was to be used as the District’s client service center. The term of the lease was to be ten years with five one-year optional renewal periods. The ITB scheduled a pre-bid meeting for August 8, 1996. Attendance at the meeting was not mandatory. The ITB specified, however, that “information and explanations provided at this meeting must be complied with by the bidder ” A representative of Petitioner, Executive Ventures (hereinafter referred to as “Executive”), attended the pre-bid meeting on August 8, 1996. During that meeting, the lessor under the Existing Lease asked questions about the renewal terms of the Existing Lease. Executive’s representative informed Executive of the discussions soon after the meeting. Executive was, therefore, aware of the existence of the Existing Lease and the fact that it could be renewed prior to submitting a bid in response to the ITB. The ITB provided that bids could be submitted at any time up to 10:00 a.m., September 12, 1996. Bids were to be opened at the close of the bidding period. The ITB provided that all bids received were to be evaluated first for technical responsiveness. Nonresponsive bids were to be withdrawn from further consideration. Responsive bids were to be presented to a bid evaluation committee “for comparison and formulation of a recommendation for award.” The ITB informed potential bidders that the District reserved the right to reject all bids received in response to the ITB. The first page of the ITB provides that “[t]he Florida Department of [Children and Families] reserves the right to reject any and all bids and award to the bid judged to be in the best interest of the state.” At page A1-5-8 of the ITB the following is provided concerning the rejection of bids: ITB. REJECTION OF BIDS 1. The department reserves the right to reject any and all bids when such rejection is in the interest of the State of Florida. Such rejection shall not be arbitrary, but be based on strong justification which shall be communicated to each rejected bidder by certified mail. [Emphasis in original]. . . . . Bids Submitted in Response to the ITB. A total of four bids were submitted in response to the The bids were opened on September 12, 1996. A bid tabulation sheet was prepared by Mr. Birch. The annual rental rates per square foot for the ten years of the lease were included on the tabulation as required by the ITB. Pursuant to the ITB, no other information was provided at the time the bids were opened and tabulated Executive submitted one of the four bids. Executive’s bid consisted of 90 to 100 pages. Executive expended a good deal of effort and incurred expenses in the amount of approximately $17,000.00 in preparing its bid. The suggestion that Executive incurred unnecessary expenses is not supported by the weight of the evidence. The rental rates per square foot bid by Executive for the term of the proposed leased are as follows: Year Rate 1 $14.56 2 15.00 3 15.53 4 16.08 5 16.73 6 17.40 7 18.10 8 19.01 9 19.96 10 20.96 The District’s Decision to Reject All Bids. Mr. Birch had expected to receive rental rate bids in the range of $12.00 to $13.00. Mr. Birch’s expectation was based upon what he had been told to expect by John Stewart and Mr. Penley. Mr. Stewart is the District’s General Service Manager. Upon tabulating the bids, Mr. Birch discovered that the bids were higher than expected. He realized that the bids were $3.00 per square foot higher than the Existing Lease. Mr. Birch contacted Mr. Stewart and informed him of the difference in rates. Mr. Stewart informed Mr. Penley of the rates that had been bid. Mr. Penley informed Mr. Stewart that the bid rates were too high. Mr. Stewart then informed Sid McAlister, the Deputy District Administrator, and Paul Sneed. Mr. McAlister and Mr. Sneed told Mr. Stewart that the rates bid were excessive. Mr. Stewart subsequently directed Mr. Birch to notify the bidders that all bids were being rejected. Had the bids received in response to the ITB been accepted, the District would have been required to pay an additional approximately $80,000.00 in rent during the first year of the lease. The amount of rent required in the second year would be in excess of $80,000.00. The decision to reject all bids was based upon a realization of the impact the rates contained in the bids would have on the District’s budget if the lowest bid were accepted in relation to the impact on the District’s budget of the rates of the Existing Lease. The District realized that the increase in rent would have a substantial negative impact on its budget. It was also suggested that the impact on the District’s budget as a result of the newly enacted Federal “Welfare Reform Act” was also considered. In particular, the impact of the Welfare Reform Act’s “Work and Gaining Economic Self Sufficiency” or “WAGES” program was considered. The Welfare Reform Act and, consequently WAGES, was signed into law in August of 1996. WAGES was effective October 1, 1996. Among other things, WAGES establishes time limits for the District’s clients' receipt of cash benefits. It also results in the integration of programs of the District and the Department of Labor. This integration of programs will have impacts on the District’s space needs, staffing levels and the ability to pay rental rates in the future. Mr. Penley was aware of WAGES. It was suggested that at the time the ITB was issued little was known about the impact on the District that WAGES would have and that it was not until the bids were received that Mr. Penley had sufficient information concerning WAGES to be concerned about the impact of WAGES on the District’s budget. The weight of the evidence in this case failed to prove that when the decision of the District to reject all bids was made that the decision was based upon WAGES. While the impact of WAGES was of greater concern at the time of the formal hearing, the evidence failed to prove that the District’s concern about WAGES as explained at the formal hearing was taken into account at the time the bids were rejected. Notice of the District’s Decision to Reject All Bids. On September 13, 1996, the day after the bids were opened, the District sent a letter to Executive and the other bidders informing them of the decision to reject all bids: This is to give notice that in the best interest of the State of Florida and the Department of [Children and Families], that any and all bids are hereby rejected. The letter was signed by Mr. Birch. The letter informing Executive of the decision was sent by certified mail. “Strong justification” for the rejection was not “communicated to each rejected bidder by certified mail.” After receiving the September 13, 1996 rejection letter, Executive was informed during a telephone call with Mr. Birch that all bids had been rejected due to excessive rental rates and budgetary constraints. The District failed to comply with the requirement of the ITB that it inform bidders by certified mail of the reason why it rejected all bids. The appropriate remedy for this error, however, would not be to require that the District now evaluate the bids. The appropriate remedy for the error would be to require that the District send out a corrected notice by certified mail containing the explanation of the reasons for rejecting the bids required by the ITB. This remedy would only be appropriate, however, if Executive had sought such a remedy AND the evidence had proved that Executive had been prejudiced by the failure to provide the explanation of the District’s justification for rejecting all bids contemplated by the ITB. Evidence to support such a finding was not presented. In fact, the evidence proved that Executive was not prejudiced by the District’s error. Executive was given additional information concerning the bid rejection during a telephone conversation and it had an opportunity to explore the reasons for the rejection through discovery prior to the formal hearing of this case. Executive, therefore, had the opportunity to determine the specific justification for the rejection in preparation for the hearing on this matter. Zone Rates. The Department of Management Services establishes maximum rental rates which agencies can agree to pay without obtaining approval of the Department of Management Services. The rates are established for geographic zones on what is referred to as a “Zone Rate Schedule”. Zone Rate Schedules may be obtained from the Department of Management Services or other agencies by potential bidders. At all times relevant to this proceeding Executive was aware of the Zone Rate Schedule applicable to Palm Bay. Rental rates which do not exceed the zone rate by more than 10% may be accepted by an agency without further approval from the Department of Management Services. Any rate in excess of 10% over the zone rate must be approved by the Department of Management Services before an agency may accept it. The rental rates submitted by Executive in response to the ITB exceeded the zone rate but not by more than 10%. Individuals involved with the District’s decision in this matter either were not aware of the Zone Rate Schedule or gave it no consideration in deciding to reject all bids. The evidence also failed to prove that agreeing to pay a rate included on a Zone Rate Schedule for which approval from the Department of Management Services need not be obtained is necessarily in the “best interest of the state”. Additionally, the evidence failed to prove that the District did not have a reasonable basis for rejecting all bids despite the fact that the rates bid by Executive were within the Zone Rate Schedule plus 10%. Executive’s Challenge. Executive filed a Protest dated September 25, 1996, challenging as arbitrary the Department’s decision to reject all bids. In its Protest Executive alleged the following “facts” in support of its argument that the District’s rejection of all bids was arbitrary: The District failed to “communicate to each rejected bidder any justification whatsoever for rejecting any and all bids.” The District had decided to “reject any and all bids if the bid rental per square foot exceeded the rental they were paying under their present Lease, since such Lease had an option to renew for an additional five years. The present Lease renewal failed to comply with the requirements and specifications set forth in the Invitation to Bid.” The District, “at all times, knew that if such bids exceeded the square foot rental of the present Lease, that they intended to reject all bids and renew the existing Lease, although the existing Lease failed to meet the bid specifications.” The District “violated the competitive bidding procedure by failing to include in their Invitation to Bid a provision that any bid exceeding a specific dollar amount per square foot would be rejected in favor of the existing Lease. ” Although the evidence proved the first fact cited in finding of fact 51, that fact does not support a conclusion that the District’s decision was arbitrary. As to the other facts alleged by Executive in its Protest cited in finding of fact 53, the evidence simply failed to prove those alleged facts. At hearing, Executive presented the testimony of Mary Goodman, a consultant and former Chief of the Bureau of Property Management, Department of Management Services. Ms. Goodman was accepted as an expert witness. Ms. Goodman opined that the District’s actions in this matter were arbitrary. Ms. Goodman’s opinion was based in part on her conclusion that the submittal of the RSN and the Second RSN constituted a “determination by the Department to not renew the existing lease.” The evidence failed to support this contention. Executive has failed to cite any provision of Florida law which supports this contention. Ms. Goodman also based her opinion on the assumption that the District had established a rental rate cap which it failed to inform prospective bidders of. The evidence failed to support this assumption. Ms. Goodman also based her opinion on the fact that the bid submitted by Executive was within the Zone Rate Schedule for the area. The evidence in this case failed to prove that the fact that the bids were within 10% of the Zone Rate Schedule rates means that the decision to reject bids that would have cost the District approximately $80,000.00 the first year in additional rent was arbitrary because the rental bids did not require approval of the Department of Management Services. Executive has cited no provision of Florida law that requires agencies to accept bids simple because they do not require approval from the Department of Management Services. Ms. Goodman also based her opinion on her conclusion that the District should have known of its budgetary constraints before issuance of the ITB. Ms. Goodman, however, acknowledged that she knew nothing specifically about the District’s budget. Finally, Ms. Goodman based her opinion on the District’s failure to provide the notice of the District’s reason for rejecting the bids required by the ITB. As discussed, supra, the evidence failed to support this conclusion. The evidence failed to prove that Executive filed the action for an improper purpose.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be entered by the Department of Children and Families dismissing the Protest filed by Executive Ventures. DONE and ORDERED this 30th day of April, 1997, in Tallahassee, Florida. LARRY J. SARTIN Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 488-9675 SUNCOM 278-9675 Fax Filing (904) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this 30th day of April, 1997. COPIES FURNISHED: Walter Smith, Esquire SMITH, GRIMSLEY, BAUMAN, PINKERTON, PETERMANN, SAXER, WELLS Post Office Box 2379 Fort Walton Beach, Florida 32549 Eric D. Dunlap Assistant District Legal Counsel Department of Children and Families 400 West Robinson Street Suite S-1106 Orlando, Florida 32801 Richard A. Doran General Counsel Department of Children & Families Building 2 Room 204 1317 Winewood Boulevard Tallahassee, Florida 32399-0700 Gregory D. Venz, Agency Clerk Department of Children & Families Building 2, Room 204 1317 Winewood Boulevard Tallahassee, Florida 32399-0700
The Issue The questions presented here concern the entitlement of the Petitioner or Intervenor to be awarded lease rights under the Respondent's proposed Lease No. 590:8026, in that Petitioner and Intervenor have claimed that entitlement to the exclusion of the other party.
Findings Of Fact Respondent invited bid proposals for the provision of approximately 32,000 square feet of office space for its District VIII operation in Fort Myers, Florida. Petitioner, Chuck Bundschu, Inc., and Intervenor, Walter Lee Johnson d/b/a Walco Leasing Company, responded to the bid proposal by offering to provide the office space. Those responses may be found as part of the Composite Hearing Officer's Exhibit. Following the October, 1981, submittal of bid proposals, a bid evaluation committee was appointed by the Subdistrict Administrator for District VIII to consider the bids. In turn, he afforded guidance to that committee on the subject of the evaluation of the proposed bids offered by Bundschu and Walco, the only bidders for the project. The evaluation committee performed the task of weighing the bid proposals, in keeping with evaluation criteria which are outlined in Respondent's "Facilities, Acquisition and Management Manual" dealing with the procurement of lease space, which criteria are set forth in a form referred to as "HRSM 70-1, page A1-4-8," which is attached to chapter four of the manual. All criteria used for the evaluation process were drawn from that form with the exception of criterion No. 7, related to staff and client marking which was a product of this bid evaluation effort. (A copy of the HRS manual and forms may be found as Respondent's Exhibit No. 1, admitted into evidence. The evaluation committee's summarization utilizing the form criteria and the additional parking criterion may be found as a part of the Hearing Officer's Composite Exhibit, which is a replication of the original.) The HRS manual for procuring leased space is a publication of February, 1980, and establishes uniform guidelines by which bid proposals are considered by local officials who are part of Respondent's organization. Nonetheless, the exact weight to be afforded each criterion outlined in the manual is determined by the local evaluation committee. Weighing concerns the subject of awarding numerical values for beach bidder related to the various criteria with a maximum possible score being 100 points. On the basis of the evaluation performed by the committee, the Bundschu total was 88.25 points and the The Walco point total was 82 out of the possible 100 points. Consequently, the evaluation committee recommended that Bundschu be awarded the lease. Mark Geisler, in his capacity as Subdistrict Administrator, for District VIII, concurred in this evaluation as may be seen in his November 6, 1981, transmittal of the bid materials and associated evaluation, which transmittal may be found as pert of the Hearing Officer's Composite Exhibit. The District Administrator, District VII, in the person of Frances Clendenin, who was acting for the District Administrator, Ivor D. Groves, Ph.D., also recommended acceptance of the Bundschu bid. This position was made known by a memorandum of November 16, 1981. A copy of that recommendation is found as a part of the Hearing Officer's Composite Exhibit. The recommendations spoken to thus far were made known to Lester C. Missman, an official within the Division of General Services of the Department of Health and Rehabilitative Services. This division was, at the time of the bid proposals, and is now, headed by Dr. Homer Ooten, whose function within Respondent's organization includes the responsibility to evaluate lease proposals involving the Respondent agency and to make a final decision on the question of the lease award, based upon a review of the local subordinate unit's recommendation. By this, it is meant that the lease by Health and Rehabilitative Services as "user agency" is signed by Ooten based upon a delegation of authority to him through the vehicle of correspondence signed by the agency head. Ooten, upon considering the recommendation of the District Administrator's office, the Subdistrict Administrator and the evaluation committee, did not find fault with the criteria nor the point weighing scheme used in the evaluation process. He did question the cost analysis performed by the evaluation committee on the subject of client mileage for those clients receiving services from Respondent in a move from the HRS office in the Bundschu building where they were located at the time, to the building where Walco intended to let property. This was a distance of seven/tenths (7/10) of a mile and based upon the number of clients receiving services, there would be an estimated $100,000.00 in client mileage cost increase. This item was not deemed to be an appropriate consideration by Ooten and was disregarded in his review of the cost analysis performed by the evaluation committee. That cost analysis may be found as part of Respondent's Composite Exhibit No. 2, and includes interlineations by Ooten in his opinion on the subject of the cost analysis. That analysis had indicated an overall advantage of approximately $11,000.00 in favor of Bundschu and was premised upon costs related to Item 12 in the criteria, which criterion is cost of moving. It assumed a difference of over $131,000.00 in moving costs, the majority of which costs pertained to client inconvenience ($100,000.00), discounting $120,000.00 plus dollars related to the difference in the bid amount between the Walco and Bundschu bids which bid estimate was in favor of Walco. Ooten's opinion on the subject of the priority of including $100,000.00 plus dollars in clients' travel costs, when considered in the context of point awards under Item 12 in the criteria, lead Ooten to believe that the differential in point awards would not result in a 9.25 value of Bundschu versus a zero value for Walco. In his mind, the differential would be much less. Ooten made his own evaluation of moving costs per se, and through that process determined that approximately $15,600.00 would be necessary for a move into the Walco facility whereas $5,600.00 would be involved in the Bundschu move, which required the expansion of existing space in the Bundschu facility. Based upon an evaluation of the point differential in the rental rate criterion which was a differential of 2, that is 30 points out of a possible 30 for Walco and 28 points out of a possible 30 for Bundschu, Ooten also opined the this was an unreasonable assessment in view of the fact that the Walco bid amount was more than $120,000.00 less than the Bundschu bid. This taken together with the fact that there only existed approximately a $9,000.00 difference on moving costs between Bundschu and Walco, which was in favor of Bundschu, and there having been indicated a 9.25 out of a possible 10 point difference in Item 12 on the question of costs related to moving, led Ooten to believe that the true factual status of criteria Nos. 1 and 12 was not as depicted by the evaluation committee. Per Ooten, with proper assessment Walco would have received a higher point count than Bundschu through the process of applying the bid criteria, as well as being the lower bidder from the point of view of rental rates alone. After several exchanges with the District level personnel of Respondent who had been involved in the lease evaluation process, in which, on two (2) occasions, the local officials continued to support their initial opinion of the propriety of the award to Bundschu, a decision was made at the District VIII level to support the award of the lease to Walco as may be seen in the January 6, 1982, correspondence from the District Administrator to Missman, a copy of which may be found as Respondent's Exhibit No. 4, admitted into evidence. On January 6, 1982, Ooten issued a letter to the District VIII Administrative Services Director indicating the authority to award Lease No. 590:8026, formerly referred to as No. 590:1472, for the benefit of Walter Lee Johnson d/b/a Walco Leasing Company. Having learned of this decision and in keeping with the provision Subsection 120.53(5), Florida Statutes, Bundschu, through counsel, indicated opposition to that award on January 12, 1982, followed by a formal petition letter setting forth grounds for the opposition, which petition was filed on January 19, 1982. This series of documents is part of the Hearing Officer's Composite Exhibit, through copies. Subsequently, Items 4 and 6 in the petition letter were resolved between the parties without the necessity of a hearing and this is borne out by a copy of the February 1, 1982, correspondence from counsel for the Respondent to counsel to the Petitioner, part of the Hearing Officer's Composite Exhibit. The matter was then referred to the Division of Administrative Hearings for a formal Subsection 120.57(1), Florida Statutes, hearing by correspondence from the Assistant General Counsel for Respondent, dated February 4, 1982, a copy of which may be found as a part of the Hearing Officer's Composite Exhibit. There followed the intervention of Walter Lee Johnson as a party of record and the hearing was held on April 27, 1982. Petitioner's first contention deals with the idea of discounting the lease value based on the value of the "stream of future lease payments." This theory is contended for through Robert Sizemore, C.P.A., expert witness of the Petitioner. He would call for the discount of lease payments on the theory that present dollars will have a discounted value in the future, as the lease period unfolds. Taking into account the method of payment by the Respondent and the vicissitudes involved in attempting to establish the value of today's dollar at a future time, this theory of discounted dollars at a 10 percent or 12 percent rate per annum in succeeding years is not indicated. Assessment through the legislative appropriations process of sufficient funds to meet lease payment demands is not contingent upon the value of the dollar at any given point in the history of the lease. Therefore, the "stream of future lease payments" concept is inapplicable here. Likewise, trying to project the value of today's dollar at some future date is so tenuous as to be an unacceptable method to evaluate the competing lease proposals. Finally, even if this method was used, a 10 percent discount rate for inflation would leave approximately a $67,000.00 difference in the bid proposals and a 12 percent per annum discount rate related to inflation would leave approximately $52,000.00 difference in the bid proposals, in favor of the Walco bid. Petitioner has contended that Respondent failed to properly account for direct moving expenses. In that regard, the calculations made by Ooten on the question of moving expenses as reported above are accepted as fact. As a third claim, Petitioner has alleged the agency s disregard for recommendation of its evaluation committee in making the lease award. While the initial recommendations of the evaluation committee and staff were disregarded, the District Administrator eventually accepted the point of view of the Division of General Services within the Respondent's Department. Moreover, even if the local officials within the Respondent's Department had not accepted Ooten's viewpoint, the initial evaluation committee's development of criteria was flawed and the Ooten perception was correct, leading to a decision in favor of Walco. Finally, the contention by Petitioner that the agency did not seek adequate input from third parties affected by the relocation of the facility was not demonstrated through testimony. The method for review of the proposed lease was acceptable and to the extent that it required an appreciation and response to the needs of others not directly involved in the lease process, it has been amply afforded. Evaluation was in keeping with Respondent's "Facilities, Acquisition and Management Manual, HRSM 70-1, fourth chapter" and the award is based upon concurrence of the Division Director of the General Services Division of HRS pursuant to that chapter. Through argument, counsel for the Petitioner has also referred to the fact that in the initial evaluation process set forth in the sixth criterion, superior points of 2.5 for Walco as opposed to 2.25 for Bundschu had been awarded, when in fact the narrative summary of the reasons for such awards indicate an advantage to Bundschu. Even if the .25 points were allowed in the favor of Bundschu, this would not change the result.
The Issue The issue is whether the decision of Respondent Florida Housing Finance Corporation (FHFC) to waive, as a minor irregularity, the failure of Respondent Midtown Lofts, LTD. (Midtown) to disclose in its application for federal low-income housing tax credits (LIHTC) the existence of two occupied dwelling units on the property proposed for development is clearly erroneous, contrary to competition, arbitrary, or capricious (Clearly Erroneous), as provided by section 120.57(3)(f), Florida Statutes.
Findings Of Fact The purpose of FHFC is to administer programs to promote affordable housing, including a program to allocate LIHTCs, pursuant to section 420.507(48). To make these allocations equitably, FHFC implements a competitive application process featuring a request for applications. Stating that FHFC expects to offer approximately $2,465,000 in LIHTCs to the successful applicant or applicants, the RFA sets forth the requirements for applications for LIHTCs. The purpose of the LIHTCs is to support new construction, redevelopment, or rehabilitation of family or elderly properties in areas where local governments are implementing planned initiatives to partner with private or other public entities to rejuvenate an area. The RFA identifies six scoring items. With a total of 118 points, the items are: the submission of a Principal Disclosure Form preapproved by FHFC (5 points), the experience of the developer or management company with local revitalization initiatives (15 points), the commitment to reserve a portion of the units as market rate (5 points), the alignment of the proposed development with local revitalization initiatives (45 points), access to community-based services and resources (28 points), and application and screening procedures for processing lease applications from households with a special- needs person (20 points). RFA, pp. 57-58. The RFA states: "Only Applications that meet all of the following Eligibility Items will be eligible for funding and considered for funding selection." RFA, p. 55. The RFA lists 40 Eligibility Items, including the Submission Requirements, which include a requirement to submit an application by the stated deadline (RFA, p. 56); the disclosure of the "[o]ccupancy status" of any existing units; a statement of evidence of site control; and a total score of at least 70 points. RFA, p. 55. Evidence of site control is evidenced by the applicant's "providing . . . the documentation required in items (1), (2) and/or (3), as indicated below. . . . Eligible Contract--. . . an eligible contract is one that has a term that does not expire before September 30, 2018 ; specifically states that the buyer's remedy for default on the part of the seller includes or is specific performance; and the buyer MUST be the Applicant unless an assignment of the eligible contract which assigns all of the buyer's rights, title and interests in the eligible contract to the Applicant, is provided. . . . Deed or certificate of title . . .. Lease . . .. RFA, pp. 25-26. Other provisions of the RFA include a statement that FHFC reserves the right to waive "Minor Irregularities" and a provision allowing a protest the specifications of the RFA. RFA, p. 5. Addressing the issue of this case, the RFA states: The Applicant must indicate whether there are any existing units on the Development site as of the Application Deadline, and if so, the occupancy status of such units. If the Applicant indicates that there are existing occupied units and if the Development is funded, the Applicant will be required to provide to the Credit Underwriter a plan for relocation of existing tenants . . .. RFA, p. 19. Pursuant to this requirement, the application form attached to the RFA directs each applicant to indicate one of the following: The Applicant must indicate which of the following applies to the Development site as of Application Deadline: Existing units are current occupied. Existing units are not currently occupied. There are no existing units. RFA, p. 65. The RFA details additional requirements of any relocation plan. RFA, p. 94. The reference to the Credit Underwriter refers to a unique feature of solicitations conducted by FHFC, including solicitations involving the LIHTC allocation program: credit underwriting. The application process that culminates in FHFC's selection of an applicant to receive an award of LIHTCs does not result in the allocation of LIHTCs to the winning applicant. As the RFA explains, "[n]othwithstanding an award by [FHFC] pursuant to this RFA, funding will be subject to a positive recommendation from the Credit Underwriter based on criteria outlined in the credit underwriting provisions in Rule Chapter 67-48, F.A.C." RFA, p. 59. In reality, the award is no more than an "invitation to enter credit underwriting." RFA, p. 60. Florida Administrative Code Rule 67-48.0072 explains credit underwriting as follows: Credit underwriting is a de novo review of all information supplied, received or discovered during or after any competitive solicitation scoring and funding preference process, prior to the closing on funding, including the issuance of IRS Forms 8609 for [LIHTCs]. The success of an Applicant in being selected for funding is not an indication that the Applicant will receive a positive recommendation from the Credit Underwriter or that the Development team’s experience, past performance or financial capacity is satisfactory. The credit underwriting review shall include a comprehensive analysis of the Applicant, the real estate, the economics of the Development, the ability of the Applicant and the Development team to proceed, [and] the evidence of need for affordable housing in order to determine that the Development meets the program requirements and determine a recommended . . . Housing Credit allocation amount[.] An applicant that has earned an award may decline its invitation to enter credit underwriting. Rule 67-48.0072(3). The Credit Underwriter is required to report any "inconsistencies, . . . discrepancies, or changes" to the applicant's application during credit underwriting. Rule 67-48.0072(7). In credit underwriting, the applicant and development must meet numerous conditions, including satisfactory performance in producing affordable housing and acceptable debt service ratios on first and second mortgages. Rule 67-48.0072(6) and (11). In sum, the Credit Underwriter subjects the winning applicant and the proposed development to a rigorous examination prior to making a recommendation on funding. Sixteen applicants, including Petitioner, Midtown, and Intervenor, timely submitted applications in response to the RFA. FHFC deemed only one applicant ineligible for earning only 56 points, if not also for other reasons. Midtown earned the highest score, so FHFC allocated its applied-for amount of LIHTCs, $1,510,000. Petitioner earned the second highest score, but it had applied for $1,632,887 in LIHTCs. Because this amount would have exceeded the total allocation of LIHTCs available in the RFA, FHFC chose Intervenor, which had submitted the eligible application with the next highest score that sought an allocation that, when combined with Midtown's allocation, would not exceed the total of $2,465,000 in LIHTCs. If FHFC had selected Petitioner instead of Midtown, Intervenor would not have been awarded an allocation because there would not have been sufficient LIHTCs to allocate the LIHTCs for which Intervenor has applied. After FHFC announced that Midtown had won the right to enter credit underwriting, Petitioner's principal discovered that Midtown had failed to disclose in its application the existence on the property of two occupied dwelling units, as of the application deadline. When the Prehearing Stipulation was filed, only one dwelling unit remained occupied. In certain affordable housing solicitations, the disclosure of occupied dwelling units may respond to the requirement imposed by a federal or state agency, including FHFC, that the developer, at its expense, relocate certain occupants; however, the present solicitation includes no such requirement. Even in a solicitation free of such a requirement, the disclosure of occupied dwelling units is relevant because the solicitation document may contemplate that the property will be clear of occupants during construction. Here, the above-quoted RFA provisions addressing occupied dwelling units clearly contemplate that the property will be clear of occupants during construction. Additionally, regardless of the provisions of the solicitation document, the disclosure of occupied dwelling units is relevant, for many projects, because holdover occupants would delay the start of construction on safety grounds. Although the justification for asking about unoccupied dwelling units is unclear, the justification for asking about occupied dwelling units is ample. Midtown's documented evidence of control of the site is an agreement of purchase and sale, which the buyer has assigned to Midtown. The agreement provides that, at closing, the buyer agrees to pay $324,000, and the seller agrees, among other things, to deliver to the buyer "[s]ole and exclusive possession" of the property. By this agreement, to which a portion of the purchase price may be attributed, the seller has assumed the responsibility for ensuring that no tenant would occupy any dwelling unit on the property as of the closing date. Additionally, in the agreement, the seller warrants that it has not entered into any contracts, leases, or other agreements that will not have been terminated or expired prior to closing. It is unlikely that the seller on a $324,000 contract would have any difficulty in delivering sole and exclusion possession when, as is relevant here, the only impediment is two occupied dwelling units. But if the seller failed to deliver sole and exclusive possession of the property, the Credit Underwriter would likely have discovered the two occupied dwelling units and condition funding on the timely and appropriate relocation, at Midtown's expense, so that construction could commence timely. In the very unlikely event that the Credit Underwriter would have missed the two occupied dwelling units, as a practical matter, Midtown would have had to relocate the occupants prior to commencing construction. In sum, even ignoring the bargained-for undertaking in the agreement for purchase and sale to deliver sole and exclusive possession, there is no chance that Midtown's failure to disclose the two occupied dwelling units would have allowed it to escape the relatively modest cost of relocating any occupants on the property, post- closing.
Recommendation It is RECOMMENDED that Florida Housing Finance Corporation enter a final order dismissing the formal written protest of Petitioner. DONE AND ENTERED this 6th day of September, 2018, in Tallahassee, Leon County, Florida. S ROBERT E. MEALE 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 6th day of September, 2018. COPIES FURNISHED: Michael P. Donaldson, Esquire Carlton Fields Jorden Burt, P.A. 215 South Monroe Street, Suite 500 Post Office Drawer 190 Tallahassee, Florida 32302-0190 (eServed) Lawrence E. Sellers, Jr., Esquire Tiffany A. Roddenberry, Esquire Holland & Knight, LLP 315 South Calhoun Street, Suite 600 Tallahassee, Florida 32301 (eServed) M. Christopher Bryant, Esquire Oertel, Fernandez, Bryant & Atkinson, P.A. Post Office Box 1110 Tallahassee, Florida 32302-1110 (eServed) Betty Zachem, Esquire Assistant General Counsel Florida Housing Finance Corporation 227 North Bronough Street, Suite 5000 Tallahassee, Florida 32301 (eServed) Maureen McCarthy Daughton, Esquire Maureen McCarthy Daughton, LLC 1725 Capital Circle Northeast, Suite 304 Tallahassee, Florida 32308 (eServed) Hugh R. Brown, General Counsel Florida Housing Finance Corporation 227 North Bronough Street Suite 5000 Tallahassee, Florida 32301-1329 (eServed) Corporation Clerk Florida Housing Finance Corporation 227 North Bronough Street, Suite 5000 Tallahassee, Florida 32301-1329 (eServed)
The Issue Whether the Petitioners, Pete Capparelli and Robin L. Stone, d/b/a Capparelli Farms, Inc., are entitled to the payment of $15,710.02 as proceeds due the Petitioners for loads of potatoes delivered to the Respondent, Orlowski Produce Co., Inc.
Findings Of Fact The Respondent, Orlowski Produce Co., Inc., was licensed as a dealer in agricultural products for the period April 20, 1973, to September 24, 1978, which license was issued by the State of Florida, Department of Agriculture and Consumer Services. In connection with its activity in the State of Florida, the Respondent was required to make a surety bond in the amount of $20,000.00 as security for its business transactions with Florida agricultural producers, their agents or representatives for those agricultural products bought from or handled or sold for the Florida agricultural producers, their agents or representatives. The licensure provisions and requirement for bond are set out in the Sections 604.15 through 604.30, Florida Statutes. A copy of the license and bond may be found in the State of Florida, Department of Agriculture and Consumer Services Composite Exhibit No. 1 admitted into evidence. All exhibits of that Department will henceforth be referred to as "Department Exhibits." The Petitioners, Pete Capparelli and Robin L. Stone, d/b/a Capparelli Farms, Inc., producers of agricultural products in the State of Florida, filed a complaint with the State of Florida, Department of Agriculture and Consumer Services, alleging that the Respondent failed to pay moneys due and owing to the Petitioners for loads of potatoes. This complaint was filed on November 8, 1978, and may be found as Department's Exhibit No. 2 admitted into evidence. Following the filing of the complaint and in keeping with Section 604.21, Florida Statutes, the Department informed the Respondent that a complaint had been filed by forwarding the notice and complaint by certified mail with a return receipt requested. A copy of the notice of filing a complaint and return receipt may be found as Department's Composite Exhibit No. 3 admitted into evidence. The Respondent did not reply to the complaint, notwithstanding the fact that one of its officials had signed the return receipt request, indicating that it had received the complaint and explanation. In view of the fact that the Respondent had failed to reply to the complaint within the twenty-five days allowed to answer the complaint, and had failed to request a hearing within that twenty-five day period, the Commissioner of Agriculture, State of Florida, Department of Agriculture and Consumer Services, entered an order in favor of the Petitioners. A copy of this order was served on the Respondent by certified mail with a return receipt requested. The Respondent received that order. The order itself may be found as the Department's Exhibit No. 4 admitted into evidence. In the order, the Commissioner of Agriculture makes the following findings of fact: Complainant, Pete Capparelli and Robin L. Stone, is a partnership doing business as Capparelli Farms whose address is Route 1, Box 247, Elkton, Florida. Respondent, Orlowski Produce Company, is a corporation whose address is Post Office Box 128, Water Mill, New York. At the time of the transactions involved, respondent was licensed as a dealer in agricultural products supported by a $20,000 surety bond. Between May 19, 1978 and June 14, 1978, the respondent, acting an an agent for the complainant, handled potatoes produced by the complainant. The complainant initially sent the respondent a statement showing $17,149.83 as the net proceeds due from the potatoes mentioned in Fact 3 after allowing for the 25 cents per hundredweight selling charge. Subsequent to the filing of the complaint, the complainant visited Mr. Bobby Carpenter of respondent firm who altered and initialed a copy of complainant's statement of June 15, 1978 to show an amount of $15,710.02. A copy of the altered statement shown in Fact 5 is attached to this Order. The complaint was received in this office within nine (9) months from the date of the last transaction. There are no known disputed facts in this matter. The Commissioner of Agriculture also concluded as a matter of law that the Respondent was justly indebted to the Petitioners in the amount of $15,710.02 and for that reason had violated the conditions and provisions of the bond, within the meaning of Subsection 604.21(1), Florida Statutes. After establishing the apparatus for default judgment, the Commissioner of Agriculture afforded the Respondent and others with a material interest in the outcome of the case, one final opportunity to request a hearing before the Commissioner of Agriculture's conclusions of law became binding. The Respondent, in the person of one of its officers, Robert Carpenter, made such a request for a hearing, but having made such a request, elected not to attend the hearing, for reasons that are more completely detailed through the pleadings filed in this cause. On the date and time scheduled for hearing, alluded to in the introductory statement of this Order, a de novo hearing was conducted. Testimony was offered and that testimony substantiated the findings of fact of the Commissioner of Agriculture in his order of January 26, 1979, except paragraph eight (8). Therefore, those findings of fact reported herein, excepting paragraph eight (8), are adopted as the findings of fact of this Hearing Officer.
Recommendation It is recommended that the State of Florida, Department of Agriculture and Consumer Services, uphold the claim of the Petitioners, Pete Capperelli and Robin L. Stone, d/b/a Capparelli Farms, Inc., against 0rlowski Produce Co., Inc., in the amount of $15,710.02 and allow the Petitioners to share in the bond proceeds which the Respondent, Orlowski Produce Co., Inc., has on file with the State of Florida, Department of Agriculture and Consumer Services. DONE AND ENTERED this 17th day of May, 1979, in Tallahassee, Florida. CHARLES C. ADAMS Hearing Officer Division of Administrative Hearings Room 101 Collins Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 COPIES FURNISHED: Pete Capparelli and Robin L. Stone d/b/a Capparelli Farms, Inc. Route 1, Box 247 Elkton, Florida 32022 Leonard Hanser, Esquire 1509 North Military Trail West Palm Beach, Florida 33409 Robert A. Chastain, Esquire Department of Agriculture and Consumer Services Mayo Building Tallahassee, Florida 32301
The Issue The issue is whether Respondent is guilty of concealment, culpable negligence, or breach of trust in any business transaction, in violation of Section 475.25(1)(b), Florida Statutes, and, if so, what penalty should be imposed.
Findings Of Fact At all material times, Respondent has been a licensed real estate salesperson, holding license number 0440058. During the relevant period, Respondent was licensed as a salesperson with Professional Realty Consultants of Lee County, Inc. (PRC). By Listing Contract executed September 4, 1996 by both parties, Ronald L. Davis, as trustee (Mr. Davis), listed the Mid- Cape Commercial Center, located at 1020 Pine Island Road (Property), with PRC. The listing price was $850,000, and the listing expired on March 3, 1997. Davis is listed as a co- listing agent entitled to 50 percent of the listing commission. On December 6, 1996, Renn Lamaster, a real estate broker, contacted Respondent and told him that he had a client who might be interested in the Property. By no later than December 10, Respondent faxed Mr. Lamaster a one-page description of the Property, Respondent's business card, and a one-page projection of 1996 income and expenses with itemized rents. Respondent also sent Mr. Lancaster a full appraisal. However, Respondent's testimony concerning his thinking at even this early stage reveals a troubling misunderstanding of his role as an agent: I [sent the information to Mr. Lamaster] in the expectation that possibly I might not buy the property, and I wanted then to be able to have somebody I could turn to and function as an agent and make a real estate commission if I introduced this property to them. [Transcript, p. 196.] At an unspecified point in time, Mr. Lamaster transmitted the information that he had received about the Property to his sales representative, Steve Ramunni, who transmitted the information to the client, Hans Faass. Mr. Faass examined the summary information and directed Mr. Ramunni to obtain more detailed financial information, such as rent rolls, for the Property. The next contact that Respondent received from anyone representing Mr. Faass was on January 22, 1997, when Mr. Ramunni called Respondent and said that he was representing a client who might be interested in the Property. Respondent confirmed with Mr. Ramunni that it was the same client represented by Mr. Lamaster. Mr. Ramunni said that his client wanted more detailed financial information on the Property. On January 24, Respondent sent more detailed information by fax to Mr. Ramunni. This information contained itemized rents by unit and tenant, for commercial office space, and unit, for mini-warehouses; a somewhat more detailed statement of income and expenses, evidently for 1996; and a 1997 statement of projected income and expenses. Respondent's cover letter accompanying these materials is to Mr. Ramunni, but concludes: "I am sending this to Mr. Faass as he just called me and wants the info because he is unable to locate you." Respondent himself had been interested in the Property since December and had been discussing purchase conditions with Ms. Jackson. These discussions probably began around the time of the first contact from the Faass group in early December 1996, although the record does not supply a basis to determine the level of detail of these discussions. On January 24--the same date that he faxed additional information to Messrs. Ramunni and Faass--Respondent presented a contract to purchase the Property by his wife, as trustee. The purchase price was $625,000 cash. The contract, which required acceptance by January 30, contained numerous common contingencies, such as 45 days to secure financing of $500,000 and 45 days to obtain a building inspection. However, the contract contained a more unusual contingency, which effectively reduces the contract to an option to purchase at no cost or risk to Respondent's wife. The contingency provides: If at any time during the buyer's 45 day due diligence period the buyer notifys [sic] the seller in writing that the buyer wishes to terminate this contract, this contract shall be terminated and any deposits given by the buyer shall be returned to the buyer without deduction. Interest accrued on the deposit shall accrue to the buyer. At this point, Respondent had not mentioned his contacts with Mr. Faass's representatives to Mr. Davis; Gidget Jackson, the PRC salesperson who obtained the listing; or John Harrington, the qualifying broker for PRC. In fact, Respondent never mentioned to Mr. Davis, Ms. Jackson, or Mr. Harrington anything about the interest of Mr. Faass group in the Property until February 12, 1997, when, as described below, Respondent spoke to Mr. Harrington. On January 29, Respondent faxed to Mr. Lamaster a note stating that Mr. Faass wanted various specific documents and stating where they were. The documents and their location included: survey--not available; appraisals--"gave to Renn"; and last three years' income and expense statements generated by CPA or other professional--"with Gidget." Following the receipt of this information, Mr. Lamaster called Respondent and said that he had an offer to purchase the Property to deliver to Respondent. On February 12, 1997, which was the same day or the day after the call disclosing the existence of an offer, Mr. Lamaster brought the signed contract to Respondent. The contract was signed February 11, 1997, by Mr. Faass on behalf of the LaBelle Trade Center, Inc., and offered $700,000 cash. The contract contained a financing contingency clause granting the buyer 45 days to find $560,000 financing, but at a more realistic interest rate (one percentage point higher) than is contained in the LaGrave/Ringer contracts. The LaBelle contract contains a contingency calling for termination only if the seller fails to provide certain financial information within 10 days, but does not contain a buyer-termination clause of the type found in the LaGrave/Ringer contracts or even a narrower clause allowing termination if the financial information is unacceptable. When Mr. Lamaster visited Respondent's office and gave the contract to Respondent, Respondent told Mr. Lamaster that Respondent was already a "vendee under contract." At this point, Respondent first informed Mr. Harrington about the situation. Later, Respondent offered to sell his contract to Mr. Faass. Even now, Respondent did not inform Mr. Davis of the situation; Mr. Davis learned of Mr. Faass's interest when Mr. Lamaster or Mr. Faass called Mr. Davis. In the meantime, on January 24, Mr. Davis had counteroffered the offer of Respondent's wife, as trustee. He counteroffered a sales price of $730,000 and did not delete any of the cited contingencies, including the 45-day buyer- termination clause. On January 28, 1997, Respondent hand delivered another contract to Mr. Davis. In this contract, the buyer is Ringer, Inc., of which Respondent was disclosed on the contract to be a "co-owner." The contract is for $650,000. The contract contains an even-stronger buyer-termination clause, which states: If any ANY time during this "due diligence" period [of 60 days] the buyer wishes to terminate this contract for any reason whatsoever, the buyer shall notify the seller IN WRITING of his intention to cancel and any deposits shall be returned immediately to the buyer without deduction. The contract was initially to be accepted by January 30, but Ringer extended the acceptance date to February 7. Mr. Davis signed the contract on February 10, and Ringer did not re-execute the contract. Eventually, Mr. Davis cancelled the Ringer contract. LaBelle offered $750,000 by a contract signed by Mr. Faass on February 14. This contract contained the same contingencies as the preceding LaBelle contract (although the financed amount increased to $600,000), but added a new contingency for a determination that Respondent did not have a valid contract to purchase the Property. Mr. Davis countered at $800,000. LaBelle offered $750,000 by a contract signed by Mr. Faass on March 6. This contract was largely in the same form as the preceding LaBelle contract, but provided, as to the Respondent contingency: Seller shall pursue any & all remedies available to void or negate [Respondent's] contract on or before April 1, 1997. In the event of litigation between Seller & LaGrave, Buyer shall extend the closing date until litigation is favorably resolved for Seller. Unable to obtain Respondent's agreement to rescind the Ringer contract, Mr. Davis filed an action for damages and rescission. In some fashion, Respondent or Ringer pursued Ringer's claims under the contract, and the case eventually resolved itself in mediation with both parties dropping their claims. In the meantime, though, LaBelle withdrew its offer. Respondent justifiably claims that he, as an agent, is not required to notify his principal, Mr. Davis, of every expression of interest in the Property. As noted in the Conclusions of Law, Respondent is required to notify Mr. Davis only of material information, which is information that might reasonably influence Mr. Davis in his negotiations with Respondent or consideration of the contracts from Respondent's wife and company. The materiality of undisclosed information depends on the circumstances. A casual expression of interest by a prospective purchaser, without more, may not be material, but may become material when the principal is negotiating with his agent to give the agent's affiliate a free, no-risk option to purchase the Property at a price $150,000 less than the asking price and $100,000 less than another buyer is willing to pay. Mr. Ramunni's request for information on January 22 was material information. The materiality of this expression of interest was confirmed in the next couple of days. By January 24, Mr. Faass did not want to wait for this information, so he told Respondent to sent the information directly to Mr. Faass, rather than to Mr. Ramunni. The prospective buyer's interest in the Property had become urgent. Rather than inform Mr. Davis of these material developments, Respondent instead delivered the first of two contracts in which Respondent essentially sought to purchase his principal's property. By the time Mr. Faass insisted that Respondent send the information directly to Mr. Faass, Respondent's failure to disclose Mr. Faass's failure to disclose Mr. Faass's interest in the Property constituted at least culpable negligence and breach of trust. When Respondent instead submitted his wife's contract for a free option, Respondent's failure to disclose Mr. Faass's interest in the Property constituted fraudulent concealment. On the day following the submittal of the Ringer contract, but over two weeks before Mr. Davis signed it, Respondent provided additional information to Mr. Faass and his representatives. This information, which suggested growing interest in the Property, was material, and Respondent's failure to disclose this information, while trying to obtain the signature of his principal to the Ringer contract, constitutes culpable negligence, breach of trust, and fraudulent concealment. Surprisingly, Respondent's betrayal of the loyalty he owed Mr. Davis did not immediately extinguish Mr. Faass's interest in the Property. However, Respondent eventually achieved this result by attempting to enforce the Ringer contract, which, as explained in the Conclusions of Law, was unenforceable. No longer merely omitting to perform the duties that he owed his principal, Respondent unconscionably tried to force upon Mr. Davis an unenforceable contract greatly inferior to the LaBelle contract.
Recommendation It is RECOMMENDED that the Florida Real Estate Commission enter a final order finding Respondent guilty of culpable negligence, breach of trust, and concealment in a business transaction and revoking his real estate salesperson's license. DONE AND ENTERED this 11th day of June, 1999, 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 11th day of June, 1999. COPIES FURNISHED: Sunia Y. Marsh Senior Attorney Department of Professional Regulation Post Office Box 1900 Orlando, Florida 32802 Peter Edmund LaGrave 4921 Southwest 11th Avenue Cape Coral, Florida 33914 William Woodyard, General Counsel Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0792 Herbert S. Fecker, Division Director Division of Real Estate Department of Business and Professional Regulation Post Office Box 1900 Orlando, Florida 32802-1900
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, Oglesby Nursery, Inc., is a commercial nursery providing a variety of landscape agricultural products. The principal office for Petitioner is located at 3714 SW 52nd Avenues Hollywood, Florida. Respondent, Garden of Eden Landscape and Nursery, Inc., is an agricultural dealer with its office located at 3317 So. Dixie Highway, 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 August 22, 1986, Garden of Eden ordered and received delivery of $7673.40 worth of agricultural products from Petitioner. This purchase consisted of nine may pan coconuts and thirty green malayans trees. All of the trees were accepted and no issue was made as to their condition. On or about September 2, 1986, Garden of Eden ordered and received delivery of $1190.00 worth of agricultural products from Petitioner. This purchase consisted of seven coconut malayans dwarf trees. All of the trees were accepted and no issue was made as to their condition. The total amount of the agricultural products purchased by Garden of Eden from Petitioner was $8863.40. The total amount Garden of Eden paid on this account was $5000.00. The balance of indebtedness owed by Garden of Eden t o Petitioner for the purchases listed above is $3863.40. Petitioner claims it is due an additional sum of $247.77 representing interest on the unpaid account since the assessment of interest to an unpaid balance is standard practice in the industry and since Respondent took delivery of additional products knowing interest on past due accounts to be Petitioner's policy. No written agreement of acknowledgment executed by Garden of Eden was presented with regard to the interest claim.
Findings Of Fact Petitioner, J. R. Brooks and Sons, Inc. (Brooks), is in the business of selling agricultural products. Its offices are located in Homestead, Florida. Respondent, Fair Chester Tomato Packers, Inc. (Fair Chester), is a licensed agriculture dealer under Chapter 604, Florida Statutes. Its offices are in Mamaroneck, New York. As a licensed agriculture dealer, respondent is required to file a surety bond with the Department of Agriculture and Consumer Services (Department) to insure payment of any indebtedness to persons selling agricultural products to Fair Chester. In this regard, it has filed a $50,000 surety bond underwritten by respondent, Hartford Accident and Indemnity Company (Hartford). Between February and April, 1984, Brooks sold six shipments of `Pony Limes" to Fair Chester for a price of $25,039. Shortly thereafter, Fair Chester experienced financial problems and was unable to pay Brooks and other trade creditors. Because of this the creditors formed a committee in an effort to secure payment of their claims. A composition agreement was eventually drawn whereby the unsecured trade creditors agreed to settle, release and discharge in full their claims against Fair Chester on condition that each creditor signing the agreement be paid one-third of its claim "in full payment and settlement thereof, and provided further that 95 percent or more in dollar amount of all the debtor's unsecured trade creditors accepted the terms and provisions in writing on or before November 13, 1984. On or about September 2, 1984, Brooks filed a complaint against respondents with the Department which was pending when the offer to participate in the composition agreement was made. Brooks initially refused to accept the composition agreement. Because Brooks' acquiescence was necessary in order to achieve the 95 percent participation, Fair Chester, through its counsel advised Brooks by letter dated November 1, 1984 that its "acceptance of the Composition Agreement . . . shall be without prejudice to the complaint against (respondents) before the Department of Agriculture and Consumer Services of the State of Florida." After receiving this letters Brooks agreed to execute the agreement and did so on November 7, 1984. Accordingly, it is found that it was the intention of the parties to allow Brooks to maintain the action herein. Thereafter, in accordance with the agreement, Fair Chester issued a check in the amount of $7,449.66 to Brooks on November 9, 1984, which represented one-third of its total claim. 1/ The check was endorsed by Brooks and deposited in its bank account. It has never rescinded that agreement. The letter of November 1, 1984, was not disclosed by Fair Chester to Hartford or any other trade creditor who executed the agreement. However, there was no effort on the part of Brooks to have the letter remain secret.
Recommendation Based on the foregoing findings of fact and conclusions of lawn, it is RECOMMENDED that the complaint of J. R. Brooks and Sons, Inc. a against respondents be DISMISSED with prejudice, and its claim against them DENIED. DONE and ORDERED this 3rd day of June, 1985, in Tallahassee, Florida. DONALD R. ALEXANDER Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 3rd day of June, 1985.
The Issue Whether Respondent, Redland Brokers, a dealer in agricultural products, is indebted to Petitioner, a producer of agricultural products, for 529 hampers of peas delivered by Petitioner to Redland Brokers on May 2, 3, and 7, 1996, and subsequently resold by Redland Brokers on behalf of Petitioner.
Findings Of Fact Petitioner is a producer of agricultural products. Respondent, Redland Brokers Exchange, Inc. (Redland), is a dealer in agricultural products. At all times pertinent to this proceeding, there was a marketing agreement in effect between Petitioner and Redland. This agreement provided, in pertinent part, as follows: The grower (Petitioner) gives Redland Brokers Exchange, Inc. the right to sell or consign to the general trade. No guarantees as to sales price are made and only amounts actually received by Redland Brokers Exchange less selling charges, loading charges, cooling charges and any other charges will be paid to the grower. Final settlement will be made within a reasonable length of time and may be held until payment is received from the purchaser. On May 2, 1996, Martin Ruiz, the son of the Petitioner, delivered to Redland 233 hampers of peas for sale on consignment. On May 3, 1996, Mr. Ruiz delivered to Redland 38 hampers of peas for sale on consignment. On May 3, 1996, Mr. Ruiz delivered to Redland 124 hampers of peas. On May 7, 1996, Mr. Ruiz delivered to Redland 134 hampers of peas. These peas were produced by Petitioner and her family. Petitioner asserts that the sale price for the peas delivered on May 2 and 3, 1996, should have been $20.00 per hamper. Petitioner asserts that the sale price for the peas delivered May 7, 1996, should have been $14.00 per hamper. Petitioner does not challenge the amounts deducted from the sales price by Redland for its commission, advances it made to the grower, and for crates. The greater weight of the evidence established that Mr. Ruiz was misinformed as to the fair market value for the peas that were delivered to Redland in May 1996 and that he believed the price to be greater than the actual fair market value. Redland did not misrepresent to Petitioner the fair market value of these peas. The greater weight of the evidence established that Redland sold the peas that Petitioner delivered to it in the regular course of business and that it paid Petitioner in full for that product consistent with the marketing agreement that was in effect. The lower prices were the result of falling market prices and the poor quality of some of the peas. Petitioner failed to establish that Redland was indebted to her as a result of these transactions.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Petitioner’s complaint be dismissed. DONE AND ENTERED this 7th day of April, 1997, in Tallahassee, Leon County, Florida. CLAUDE B. ARRINGTON 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 April, 1997. COPIES FURNISHED: Oralia Vera, pro se 14500 Southwest 280th Street, Lot 4 Homestead, Florida 33032 Frank T. Basso, Jr., President Redland Brokers Exchange, Inc. Post Office Box 343544 Florida City, Florida 33034 Florida Farm Bureau General Insurance Company (Legal Dept.) Post Office Box 147030 Gainesville, Florida 32614 Brenda Hyatt, Chief Bureau of Licensing & Bond Department of Agriculture 508 Mayo Building Tallahassee, Florida 32399-0800 Richard Tritschler, General Counsel Department of Agriculture The Capitol, Plaza Level 10 Tallahassee, Florida 32399-0810 Honorable Bob Crawford Commissioner of Agriculture The Capitol, Plaza Level 10 Tallahassee, Florida 32399-0810
