The Issue Should the Department of Insurance (now known as the Department of Financial Services, Office of Insurance Regulation) (Department) approve three insurance endorsement forms that State Farm Florida Insurance Company (State Farm) filed on November 15, 2001?
Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the hearing, the following relevant findings of fact are made: State Farm is a domestic insurance company that the Department has licensed to transact property and casualty insurance in the State of Florida. The Department is the state agency charged with the duty to regulate insurers doing business in the State of Florida. State Farm offers five types of homeowners' policies that have been approved for use in Florida, an FP-7921 (HO1), FP-7923 (HO3), FP-7924 (HO4), FP-7925 ( HO5-Extra), and FP-2926 (HO6). The HO1 is a "named perils" policy and provides coverage only for those perils specifically named in the policy. This policy is not offered in other states, and in Florida accounts for less than one percent of all of all policies in force. The HO3, HO5, and HO6 policies are known as "open perils" policies providing coverage for all risks unless specifically excluded by the policy. Although similar to HO3, the HO5 policy provides somewhat broader coverage with respect to settlement provisions. The HO6 policy is specifically geared toward condominium owners and the HO4 policy is the policy form that applies to renters. Of all the policies offered in Florida, the HO3 is the most widely used policy form and will be quoted from and used as the exemplar in this Recommended Order. The HO3 policy contains introductory provisions entitled "Declarations" and "Definitions," and is then divided into two coverage sections, Sections I and II. Section I refers to property coverage and with Section II referring to liability coverage. Section I is divided into a number of subcategories including the following: Coverage A (Dwelling), Coverage B (Personal Property), Section C (Loss of Use), Additional Coverage, Losses Insured, Losses Not Insured, and Conditions. Following the Section II provisions there are additional sections entitled "Section I and II-Conditions" and a section entitled "Optional Provisions." The HO3 policy provides coverage under Coverage A (Dwelling) for all risks of loss unless it is a "loss not insured." As stated in the policy: "We insure for accidental direct physical loss to the property described in Coverage A, except as provided in SECTION I - LOSSES NOT INSURED." (Emphasis in the original.) However, coverage for personal property (Coverage B) does not provide such "open perils" coverage. Rather, it provides coverage only for 16 named perils, contains a number of limitations on personal property that it does cover, and reflects a number of personal property items that it does not cover. All of State Farm's homeowners' policies currently provide some limited coverage relating to mold. Although the policies exclude mold as a covered peril, they provide some limited coverage for mold-related losses resulting from covered perils, such as a covered water loss that causes mold-related damage. Historically, there have been exclusions in property insurance for ordinance of law, earth movement, flood, war, the neglect of the insured, and nuclear hazard. Mold that resulted from a covered peril has historically not been excluded. On November 15, 2001, State Farm filed three proposed endorsement forms (Fungus (Including Mold) Exclusion Endorsement): (1) FE-5397 for use with HO1 policies; (2) FE- 5398, for use with HO3, HO5, and HO6 policies; and (3) FE-5399 for use with HO4 policies. The homeowners' policies, which the endorsements were to apply, had been previously approved by, and were on file with the Department, in accordance with Section 627.410, Florida Statutes. The goal of the endorsements was to eliminate mold coverage from State Farm's existing homeowners policies in Florida. State Farm's current rates do not include the cost of providing the mold coverage that the endorsements seek to exclude. However, there is insufficient evidence to establish facts to show that State Farm would need to substantially raise its rates to include those costs. Before filing the mold-exclusion endorsements, State Farm entered into discussions with the Department about giving policyholders the choice of buying back some of the to-be- excluded mold coverage through buy-back endorsements (buy- backs). State Farm filed its buy-backs in June 2002, after failing to work out a solution with the Department that would have allowed for their approval. Although the Department disapproved the buy-backs in December 2002, State Farm has committed itself to provide policyholders with the optional buy-backs, if the exclusions are approved. If the exclusion endorsements are approved along with the buy-back provisions, any cost increase would be restricted to those policyholders who choose to purchase mold coverage through a buy-back. State Farm's filings of mold-exclusion endorsements are consistent with a nationwide effort by State Farm Fire & Casualty Insurance Company, an affiliate of State Farm to eliminate mold coverage in homeowners policies. In Florida, State Farm's endorsements accomplish the complete elimination of mold coverage chiefly through the addition of a new exclusion for fungus, including mold, within "SECTION I - LOSSES NOT INSURED." (Emphasis in the original.) The endorsements, when coupled with the underlying policy, state in relevant part as follows: 2. We do not insure under any coverage for any loss which would not have occurred in the absence of one or more of the following excluded events. We do not insure for such loss regardless of: (a) the cause of the excluded event; or (b) other causes of the loss; or (c) whether other causes acted concurrently or in any sequence with the excluded event to produce the loss; or (d) whether the event occurs suddenly or gradually, involves isolated or widespread damage, arises from natural or external forces, or occurs as result of any combination of these: * * * g. Fungus. (Emphasis in the original.) (The text of the endorsement is underlined.) The endorsements delete all references to the term mold found in SECTION 1 - LOSSES INSURED. (Emphasis in the original.) The endorsements define fungus as follows: "fungus" means any type or form of fungus, including mold, mildew, mycotoxins, spores, scents or byproducts produced or released by fungi. (Emphasis furnished.) This total exclusion of mold coverage, using language clearly encompassing all manner of causation and occurrence, replaces the mold exclusions in the existing policies that do not use such broad language. The difference between the post- and pre-endorsement policies can be seen from comparing the above-quoted endorsement as incorporated into HO3 policy on the one hand, with the mold exclusions as they currently exist in the HO3 policy on the other hand. While the endorsements totally exclude coverage for fungus (mold), and deny payment for mold damage historically provided to insureds, the endorsements are not ambiguous, notwithstanding the testimony offered by the Department to the contrary, which lacks credibility. The endorsements do not add coverage. Instead, the endorsements eliminate coverage for mold that currently exists. However, this fact alone does not render the endorsements inconsistent, misleading, or deceptive when the endorsements are read in their entirety along with the remaining provisions of the policies. State Farm's endorsements were initially deemed approved pursuant to Section 627.410, Florida Statutes, which provides that an endorsement filed with the Department is deemed approved if it is not approved or disapproved within 30 days, or 45 days if there has been an extension, of its filing.. By letter dated June 28, 2002, the Department withdrew its deemed approval of the three endorsements and notified State Farm of its basis for disapproval. The Department's original disapproval letter cites three bases for disapproval. The Department asserts that State Farm's endorsements: (1) contain ambiguities in violation of Section 627.411(1)(b), Florida Statutes; (2) deceptively affect the risk purported to be assumed in the general coverage of the contract, also in violation of Section 627.411(1)(b), Florida Statutes; and (3) deny policyholders the right to obtain "comprehensive coverage" as that term is used in Section 626.9641(1)(b), Florida Statutes, which is part of the policyholders' bill of rights. On December 4, 2002, the Department moved for leave to amend its original disapproval letter. The motion was granted. The Department's amended disapproval letter, which the Department back-dated to June 28, 2002, reiterates the previously alleged bases for disapproval and cites two additional bases for disapproval: (1) the alleged violation of Section 626.9641(1)(b), Florida Statutes, itself constitutes a violation of Section 627.411(1)(a), Florida Statutes; and (2) the endorsements, because they exclude coverage that "through custom and usage has become a standard or uniform provision" in Florida, violate Section 627.412(2), Florida Statutes. There is insufficient evidence to establish facts to show that the provision for mold coverage has, through custom and usage, become a standard or uniform provision. Likewise, there is insufficient evidence to establish facts to show that there is a "natural association between mold and water." In the fall of 2001, the Department began receiving a large influx of filings seeking to exclude or severely limit coverage for mold. Including State Farm's filing, the Department received between 400 and 450 filings representing between 200 and 250 insurers primarily between October 1, 2001, through the end of 2002. In the face of the inordinate number of filings, the Department sought input from all sectors of the public. The Department met with insurers and other interested persons and held four public forums around the state to determine the impact the filings would have on insurance contracts, the industry, and the market place. In the mean time, the Department routinely sought waivers from the insurers of the statutory review period set forth in Section 627.410(2), Florida Statutes, and additionally requested that insurers withdraw their filings. Insurers were advised by the Department that failure to waive the statutory review period or to withdraw their filings would result in the filing being disapproved. The Department initially approved the endorsements to limit or exclude mold coverage of three insurers: USAA, Maryland Casualty, and American Strategic. However, the Department withdrew its approval for each of these companies in letters dated September 18, 2002. The Department asserts that it does not have a policy to disapprove filings simply because they discuss mold or seek to limit or exclude coverage for claims involving mold damage. The Department admits that it is required to examine all filings based upon the statutory scheme. However, the Department has not approved a single one of the over 450 filings, regardless of the language or structure of the endorsements. The simple fact is that the Department had a policy from the fall of 2001 through December 16, 2002, imposing a moratorium on the exclusion or limitation of mold coverage. The Department altered that policy on December 17, 2002, when it entered into a settlement with Florida Farm Bureau General Insurance Company (Farm Bureau), wherein Farm Bureau's endorsement was approved allowing a reduction in mold coverage from policy limits to a sub-limit of $10,000.00 per occurrence, $20,000.00 annual aggregate. The Department's previous position that policies offered to Florida's consumers should not be significantly reduced was abandoned at that time. There was insufficient evidence to establish facts to show that the $10,000.00 coverage was a reasonable amount of coverage for the vast majority of claims for mold damage. The endorsements seek to limit or exclude coverage for mold that has existed for decades. There is scant Florida experience to support the need for limitations or exclusions on mold coverage. Even so, the Department cannot disapprove endorsement forms without authority to do so. There is no statutory authority mandating mold coverage to the extent of policy limits or otherwise in order for policyholders to have comprehensive coverage. Beginning September 15, 2001, the Department did not approve a single mold endorsement seeking to exclude or limit coverage for mold as a resulting loss from a covered peril until December 17, 2002, when it approved a filing by Farm Bureau as a part of a settlement of an administrative proceeding in which the parties were awaiting ruling after a final hearing.
Recommendation Based on the foregoing Findings of Fact and conclusions of Law, it is RECOMMENDED that the Department enter a final order approving the endorsements filed with the Department by State Farm on November 15, 2001. DONE AND ENTERED this 5th day of June, 2003, in Tallahassee, Leon County, Florida. WILLIAM R. CAVE 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 5th day of June, 2003. COPIES FURNISHED: S. Marc Herskovitz, Esquire Division of Legal Services Department of Financial Services Office of Insurance Regulation 612 Larson Building 200 East Gaines Street Tallahassee, Florida 32399-0333 Anthony B. Miller, Esquire Division of Legal Services Department of Financial Services Office of Insurance Regulation 612 Larson Building 200 East Gaines Street Tallahassee, Florida 32399-0333 C. Ryan Reetz, Esquire Jim Toplin, Esquire Amie Riggle, Esquire Greenberg Traurig, P.A. 1221 Brickell Avenue Miami, Florida 33131 Vincent J. Rio, III, Esquire State Farm Florida Insurance Company 315 South Calhoun Street, Suite 344 Tallahassee, Florida 32301 Mark Casteel, General Counsel Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300 Honorable Tom Gallagher Chief Financial Officer Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300
The Issue Whether respondents owe petitioner money on account of watermelon sales?
Findings Of Fact Last spring, her first working on behalf of respondent McKay & Associates, Inc., Pat Harper nee ' Maddox accompanied Randy Finch, the company president, to Florida to help buy and ship produce. Because petitioner Bubba Hurst had sold watermelons to Ms. Harper season before last, she sought him out again. On Tuesday night, May 28, 1991, Ms. Harper orally agreed on behalf of McKay & Associates, Inc. (after Ruth Neuman, the company's secretary-treasurer, had been consulted by telephone) to pay Mr. Hurst 12 cents a pound for two truckloads of watermelons "as is." (Earlier she had seen the watermelons piled in the smaller trucks in which petitioner's crew had brought them from the fields to the melon yard, after harvesting them that day.) With Wednesday morning came a truck and driver (engaged by Ms. Harper or Mr. Finch) to haul the watermelons from petitioner's melon yard to truck scales some ten miles away, then to a farm in Denton, Georgia, for crating and transshipment to their ultimate intended destinations in Maryland and Pennsylvania. After the first truck left at 4:58 that afternoon, loaded with watermelons aggregating 43,280 pounds, Petitioner's Exhibits Nos. 1 and 2, a second truck and driver arrived. Mr. Finch had agreed to pay Mr. Hurst cash for the watermelons, but a complication arose before they could settle that night: Only after the crew had gone home was it discovered that the second truck was overloaded by some 9,000 pounds; and the driver refused to risk the fines he might incur by hauling an overload. As a result, it was not clear exactly how many watermelons McKay & Associates, Inc. would owe petitioner for. After some discussion, Mr. Finch wrote and signed a check in petitioner's favor but left blank the amount; petitioner then endorsed and returned the check. The plan was, once the exact amount was known, for Mr. Finch to complete the check, cash it, and give Mr. Hurst the proceeds. Afterwards it occurred to Mr. Hurst that if the check were made out for more than what he was to be paid for the watermelons, he could have problems with the Internal Revenue Service. Apprehensive, he asked Mr. Finch to void the check, which he did, by writing "VOID" across it. Respondent's Exhibit No. 1. Later somebody filled in an amount ($5,193.60, which corresponds to the first load, 43,280 pounds at 12 cents per) and wrote "melons no good," perhaps in anticipation of a formal administrative proceeding like the present one. The check was never negotiated. On Thursday, May 30, 1991, while watermelons were being unloaded from the second truck, two men with a brief case full of cash expressed an interest in the lightening truckload. When Ms. Harper told Mr. Hurst, he said the watermelons were hers to do with as she pleased. She then sold the load to the two men for 12 cents a pound cash, and handed the money over to petitioner. The excess watermelons on the second truck had been offloaded onto a third truck. Of like capacity as the first, the third truck was empty when it accompanied the overloaded truck to the melon yard on Thursday morning. With the departure of the second truck, Ms. Harper and Mr. Finch told Mr. Hurst to fill the third truck up and agreed to buy that truckload. For a while, Mr. Finch was actually "in the line" handing some watermelons along for loading in the third truck, and rejecting others. They weighed 20 pounds each on average. Meanwhile, when Ms. Neuman saw the first truckload, after its arrival in Denton, Georgia, on Thursday morning, she exclaimed, "My God! These are sun scald[ed]!" At hearing, she testified she was incredulous Florida would let such watermelons leave the state. Ms. Neuman telephoned Mr. Finch and told him she was sending the first load back, but that she would take the other load if it "meets federal." She also called the trucking company (then reportedly owned by the late Sam Walton), however, and told the trucker not to load any more watermelons. When Evelyn Hurst, Bubba's mother, answered the telephone at the melon yard lunchtime Thursday, she was asked to tell the driver of the third truck to call home because there was an emergency. The driver made a telephone call, after which he told Mrs. Hurst nothing was wrong at his home. Then he made a second telephone call. After that call, he ordered a stop to the loading then in progress. Bubba Hurst was eating when his mother called with word that no more watermelons were being loaded onto the third truck. He then telephoned the motel where Mr. Finch was staying, and inquired. Mr. Finch told him to finish loading the third truck; and later went to the melon yard and told the driver that loading should go forward. Loading resumed. Later Mr. Finch raised with the driver the possibility of taking the load to New York, but the driver declined the suggestion. Around four o'clock Thursday, the renewed efforts to fill the third truck with watermelons came to an abrupt end, about 250 melons shy of a full load, and the driver, who had ordered the halt, drove away. Mr. Hurst called the motel, and spoke to Ms. Harper, in hope of obtaining the cash he had been promised for his watermelons, but to no avail. The next day the first truck returned from Georgia with the watermelons whose presence on the other side of the state line had so surprised Ms. Neuman; and a federal agricultural inspector, a friend of Mr. Hurst's father, arrived at petitioner's melon yard to inspect them. Mr. Hurst told the inspector (who had been called by Ms. Neuman) that he was welcome to inspect but that the whole load had been sold "as is" and that he - Mr. Hurst - would not be paying for the inspection. Hearing this, the inspector left. Disinterested testimony established that inspections by USDA- certified inspectors are routinely called for by shippers when produce is refused by buyers claiming that produce spoiled before reaching them; but that, at least in the environs of Wildwood, Florida, it is not customary to call for a federal inspection at the point from which watermelons are shipped (unless the shipment is to the Government itself.) Of course, these particular watermelons had already been to Georgia and back. After the inspector left, the driver of the first truck asked that the watermelons be removed from his truck. When Mr. Hurst told him he was trespassing and asked him to leave the melon yard, the driver (or Ms. Neuman by long distance telephone call) summoned a Sumter County deputy sheriff. But the deputy sheriff, informed upon his arrival that the melon yard was a good quarter mile on the Marion County side of the county line, left to perform other duties. Still loaded, the first truck eventually left the melon yard a second time.
Recommendation It is, accordingly, RECOMMENDED: That DACS order McKay & Associates, Inc. to pay petitioner nine thousand seven hundred eighty seven dollars and twenty cents ($9,787.20) within fifteen (15) days of the final order. That, in the event McKay & Associates, Inc. fails to pay petitioner nine thousand seven hundred eighty seven dollars and twenty cents ($9,787.20) within fifteen (15) days of the final order, DACS order payment by State Farm Fire & Casualty Co., to the extent necessary to satisfy the requirements of Section 604.21(8), Florida Statutes (1991), for disbursal to petitioner. DONE and ENTERED this 7th day of May, 1992, in Tallahassee, Florida. ROBERT T. BENTON, II Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 7th day of May, 1992. APPENDIX Petitioner's proposed findings of fact Nos. 1, 2, 3, 4, 5, 8, 9 and 10 have been adopted, in substance, insofar as material. With respect to petitioner's proposed finding of fact No. 6, see findings of fact Nos. 5 and 6. With respect to petitioner's proposed finding of fact No. 7, petitioner said the load may have been as many as 250 melons light. With respect to petitioner's proposed finding of fact No. 11, the value of the second load established by the evidence is $4,591.60, representing 38,280 pounds at 12 cents a pound. Respondent's proposed finding of fact No. 1 has been adopted, in substance, insofar as material. With respect to Respondent's proposed findings of fact Nos. 2 and 3, Ms. Neuman's testimony that she directed her agents to procure federal inspection before the first truck left has not been credited, but she did try to arrange one later. With respect to respondent's proposed finding of fact No. 4, the second truck load was never rejected. Respondent's proposed finding of fact No. 5 is rejected. With respect to respondent's proposed finding of fact No. 6, see paragraphs 5 and 6 of the findings of fact. Respondent's proposed finding of fact No. 7 is immaterial. With respect to respondent's proposed finding of fact No. 8, Mr. Finch agreed to buy the third truckload and ordered that loading go forward even after Ms. Neuman registered her dissatisfaction with the first load. COPIES FURNISHED: Honorable Bob Crawford Commissioner of Agriculture Department of Agricultural and Consumer Services The Capitol, PL-10 Tallahassee, Florida 32399-0810 Richard Tritschler, General Counsel Department of Agricultural and Consumer Services The Capitol, PL-10 Tallahassee, Florida 32399-0810 Julian E. Harrison, Esquire 324 West Dade Avenue Bushnell, Florida 33513 John Sowa, Esquire Robert L. Rehberger, Esquire 5025 North Henry Boulevard Stockbridge, Georgia 30281
The Issue Whether Respondent knowingly submitted an inaccurate timesheet for April 4, 2018, as charged in the agency action letter dated May 11, 2018.
Findings Of Fact ECUA is a public utility that provides water, wastewater, and sanitation services to customers in Escambia and Santa Rosa counties. ECUA’s mission statement specifies that the Board and employees of ECUA “are committed to providing the highest quality service” and that “ECUA will always provide cost- effective services.” The Manual sets forth the terms and conditions of employment with ECUA. The Manual specifies that: Overtime work should be for emergency or unforeseen situations and to solve problems which are not a part of the daily activities. Supervisors are expected to use overtime work sparingly and employees should respond when called upon. Overtime and compensatory time authorization will be established by the supervisor with the approval of the department director. During the relevant time period, ECUA employed Mr. Boyd as an Industrial Plant Mechanic I. On June 26, 2012, Mr. Boyd signed a document acknowledging that a copy of the Manual was available to him in his supervisor’s office, via ECUA’s intranet, in ECUA’s Human Resources Department, and via compact disc upon request. Mr. Boyd also acknowledged on June 26, 2012, that it was his “responsibility to read the entire Manual/Handbook and to comply with the plans, guidelines, directives, and procedures contained in the Manual/Handbook and any revisions to it.” As an Industrial Plant Mechanic I, Mr. Boyd works under the supervision of a senior mechanic. He normally begins his workday by reporting to the Central Wastewater Reclamation Facility (“CWRF”) at 7:00 a.m. and is dispatched to assigned worksites. He uses an ECUA truck to travel to and from those sites. Mr. Boyd has a 30-minute lunch break for which he is not compensated. He is also allowed one 15-minute break in the morning and another in the afternoon. Mr. Boyd’s typical workday ends at 3:30 p.m. With a 30-minute lunch break, that amounts to an eight-hour workday. In April of 2018, ECUA needed to replace all of the diffusers at its Bayou Marcus Water Reclamation Facility (“the BMWRF”). Mack H. Weeks, ECUA’s Plant Maintenance Manager at the time, had supervisory authority over Mr. Boyd. Shortly before April 4, 2018, Mr. Boyd mentioned to Mr. Weeks that he wanted to stop at the BMWRF on April 4, 2018, prior to reporting to the CWRF, in order to see if the water level had decreased to a point where the diffusers in question were visible. According to Mr. Boyd, that information would enable him and the three other members of his four-person work crew to ascertain what parts they needed to complete the repair. However, there was no benefit for Mr. Boyd to stop at the BMWRF prior to reporting to the CWRF.3/ At 6:32 a.m. on April 4, 2018, ECUA’s security system recorded Mr. Boyd passing through a gate at the BMWRF. Mr. Boyd took a picture of a portion of the BMWRF a few minutes later. The security system at the CWRF recorded Mr. Boyd entering the facility at 7:13 a.m. on April 4, 2018. Mr. Boyd traveled back to the BMWRF with Kevin Spinks, an ECUA co-worker, in an ECUA work truck that had been assigned to Mr. Spinks. Carl Ayliffe and another ECUA employee were the remainder of the four-person work crew assigned to that job, and they traveled to the BMWRF in a separate ECUA truck. The tank at the BMWRF was on-line by 3:00 p.m. on April 4, 2018. Every ECUA truck has a global positioning system that enables ECUA to know precisely where each truck is at virtually any given point in time. The GPS on Mr. Spinks’ truck was not functioning because the antenna had been disconnected. However, the GPS on Mr. Ayliffe’s truck was functioning and recorded that he was done working at 4:29 p.m., on April 4, 2018.4/ Rather than returning his truck to the CWRF, Mr. Ayliffe drove the truck to his home because he was on call that night. A camera at the back gate of the CWRF recorded Mr. Spinks returning his truck at 5:07 p.m. on April 4, 2018. ECUA’s security system recorded Mr. Boyd using his employee badge to enter the CWRF through the southeast shop door at 5:09 p.m. on April 4, 2018. In consideration of a need to gather any belongings and/or complete paperwork, Mr. Boyd’s work on April 4, 2018, should have ended at approximately 5:30 p.m. on April 4, 2018. On April 16, 2018, Mr. Boyd, Mr. Spinks, and Mr. Ayliffe submitted timesheets indicating that they each worked eight regular hours and three overtime hours on April 4, 2018. Ultimate Findings The greater weight of the evidence demonstrates that there was no benefit to Mr. Boyd stopping at the BMWRF on April 4, 2018, prior to reporting for work at the CWRF. The greater weight of the evidence also demonstrates that his stop at the BMWRF was unauthorized by anyone who supervised Mr. Boyd. As a result, Mr. Boyd’s stop at the BMWRF on April 4, 2018, was an attempt to accumulate unnecessary overtime pay. The undisputed evidence demonstrates that Mr. Boyd began his workday at 7:13 a.m. on April 4, 2018, and his workday should have ended at approximately 5:30 p.m. after he reported back to the CWRF at 5:09 p.m. Given that Mr. Boyd was entitled to a 30-minute, unpaid lunch break, the undisputed evidence indicates that he worked 9.75 hours on April 4, 2018, rather than the 11 hours indicated on his timesheet.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Executive Director of the Emerald Coast Utilities Authority find that Robert D. Boyd, II, violated Section B-3, attendance records; Section B-13 A (4), conduct unbecoming an ECUA employee; Section B-13 A (13), falsification of records; and Section B-13 A (33), violation of ECUA rules or guidelines or state or federal law. DONE AND ENTERED this 17th day of September, 2018, in Tallahassee, Leon County, Florida. S G. W. CHISENHALL 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 17th day of September, 2018.
The Issue Whether A. J. Sales Company owes petitioner $1,712.80 for watermelons loaded on June 18, 1986.
Findings Of Fact Petitioner, Michael C. Jones, is a watermelon grower who resides in Summerfield, Florida. In June of 1986, petitioner arranged to sell his watermelons through Larry Dimaria for four cents a pound. Mr. Dimaria advised petitioner that he would get four cents a pound at the weighing. In his complaint, the petitioner described Mr. Dimaria as his "salesman." At the hearing he stated that Mr. Dimaria was his broker working on commission. Regardless of the characterization, it is clear that Mr. Dimaria was acting as petitioner's agent for the sale of the watermelons in question. Acting on behalf of petitioner, Mr. Dimaria called Carl Boyles, an employee of A. J. Sales Company, to advise that petitioner had watermelons for sale. Mr. Boyles was able to locate a buyer for the watermelons, the Auster Company in Chicago, Illinois. Mr. Boyles then called Mr. Dimaria to inform him of the sale. Mr. Dimaria was specifically advised by Mr. Boyles that the melons would have to be in good condition, meaning that they would pass a USDA inspection, and that petitioner would have to "ride the watermelons in," meaning that petitioner would have to guarantee arrival of the watermelons in good condition in Chicago. In other words, if the melons failed a USDA inspection in Chicago, the Auster Company had the right to reject the watermelons and the risk of the loss would be on petitioner. Petitioner was guaranteed four cents a pound for the watermelons only upon successful delivery. The terms and conditions of the sale were made clear to Mr. Dimaria. Indeed, because A. J. Sales Company had experienced problems with Mr. Dimaria in 1985, which included Mr. Dimaria's misrepresenting the quality of the watermelons he was selling, A. J. Sales Company had determined that the only terms on which it would do business with Mr. Dimaria were that the farmers Mr. Dimaria represented would have to guarantee arrival of the watermelons in good condition and that the farmers would bear the risk of loss if the melons were not in good condition when delivered. Since A. J. Sales Company's representatives do not see the watermelons themselves and could not rely on Mr. DiMaria's representations, A. J. Sales Company felt these terms were necessary to protect its interests. The subject watermelons were shipped to Chicago on June 18, 1986. They were inspected in Chicago on June 20, 1986, by a United States Department of Agriculture inspector. The watermelons failed to grade U.S. No. 1 on account of their condition, which was that the samples averaged 66 percent overmature. Mr. Boyles was advised of the problem with the watermelons on Friday, June 20, the day they were inspected. He attempted to telephone Mr. Dimaria but was unable to reach him. He therefore called the petitioner to advise of the condition of the melons and find out what petitioner wanted done. Petitioner told Mr. Boyles that he knew of no buyer in the area and told Mr. Boyles to do what he could. Mr. Boyles called several people in the Chicago area but could not find anyone who was willing to buy the watermelons. The only possibility was to take the watermelons to a flea market being held on Sunday and sell as many melons as possible directly from the truck. Mr. Boyles was advised that the melons might get $400 or $500 at the flea market, but he knew it would cost $300 to keep the driver in Chicago through Sunday. Therefore, the best return possible from selling the watermelons at the flea market would be $100 or $200. Further, the truck driver advised Mr. Boyles that the melons were popping open and juice was running out the bottom of the truck. Based on all the information that he had, Mr. Boyles determined that the best option was not to add an additional $300 to the freight bill, but simply to tell the truck driver to dump the watermelons. Respondent received a receipt indicating that one load of watermelons, constituting 46 x 2.05 cubic yards, had been dumped at the Inox County, Illinois, landfill and that the charge for dumping had been $94.30. A. J. Sales Company never received any payment for the watermelons in question. A. J. Sales Company invoiced petitioner for the freight charges on the watermelons, but petitioner never paid the invoice. Petitioner never invoiced A. J. Sales Company for the watermelons. What apparently happened in this case is that the petitioner was not fully advised by his agent, Mr. Dimaria, of the terms and conditions of the sale. All negotiations concerning the watermelons were conducted between Mr. Dimaria and Carl Boyles. The petitioner did not talk to any representative of A. J. Sales Company concerning the terms and conditions of the sale. Petitioner's only knowledge of the terms and conditions of the sale came from Mr. Dimaria, and petitioner admitted that he had experienced problems with representations made by Mr. Dimaria on other loads of watermelons he handled for petitioner. On other loads, petitioner was advised by Mr. Dimaria that he would receive a half cent more per pound for the watermelons than he actually got. After the instant dispute, Mr. Dimaria ceased being a broker representing the petitioner.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that a final order be entered dismissing petitioner's complaint. DONE AND ENTERED this 18th day of February, 1988, in Tallahassee, Leon County, Florida. DIANE A. GRUBBS 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 18th day of February, 1987. APPENDIX TO RECOMMENDED ORDER Respondent's proposed findings of fact: 1-2. Accepted in paragraphs 1 and 2. Accepted in paragraph 9. Accepted in paragraphs 3 and 9. Rejected, not a finding of fact. 6-8. Accepted generally in paragraph 4. Accepted generally in paragraph 3. Accepted generally in paragraph 5. 11-12. Accepted generally in paragraphs 6 and 7. 13-15. Accepted in paragraph 8. Petitioner's proposed findings of fact: Accepted in paragraph 5. Accepted in paragraphs 3 and 9. Accepted in paragraph 9. Rejected in that the watermelons failed to grade USDA 1 due to their condition. Rejected as unnecessary and irrelevant. COPIES FURNISHED: Mr. Michael C. Jones Route 2, Box 26-E Summerfield, Florida 32691 Thomas B. Smith, Esquire McGUIRE, VOORHIS & WELLS, P.A. Two South Orange Plaza Post Office Box 633 Orlando, Florida 32802 Honorable Doyle Conner Commissioner of Agriculture The Capitol Tallahassee, Florida 32399-0810 Ben Pridgeon, Chief Bureau of Licensing & Bond Department of Agriculture Lab Complex Tallahassee, Florida 32399-1650 Robert Chastain, Esquire General Counsel Department of Agriculture 513 Mayo Building Tallahassee, Florida 32399-0800
Findings Of Fact Robert J. Walsh and Company, Inc. has been in the business of selling agricultural products since 1962. It is a "dealer in agricultural products" as defined in s. 604.15(1), Florida Statutes (1985). It is not a "producer" as defined in s. 604.15(5), Florida Statutes (1985). Walsh's modus operandi which it has used for many years is to have its salesmen call on landscapers, nurseries and other customers for trees, plants and other agricultural products to determine their needs. These salesmen have the prices of products and their availability from producers and the salesmen take orders from these purchasers. This order is sent to the producer who delivers the product to the purchaser and sends Walsh a copy of the delivery ticket. Walsh bills the customer for the product delivered and the producer bills Walsh for the consumer-cost of the product less a 20-25 percent discount from which Walsh derives its profit from the sale. The producer relies solely on Walsh for payment for the product it produces and delivers to the customer. Walsh has no authority to sell the product at a price other than that set by the producer. In any event, the producer bills Walsh for the product delivered at the producer's established price less the discount it gives Walsh for acting as intermediary in the sale. If products are damaged in transit, the producer's driver will make any necessary adjustment with the customer or return the damaged plant for replacement by the producer. Walsh does not represent the grower if such a situation develops. Similarly, if the product is rejected by the purchaser for not meeting quality standards, that issue is resolved between the grower and the customer without input from Walsh. Whatever agreement is reached between the grower and the customer is reflected on the invoice signed by the customer and forwarded to Walsh who has the responsibility of collecting from the customer. The grower bills Walsh for the cost of the product less Walsh's commission. The sales forming the bases for the complaints filed by Walsh with Respondent involve sales to Paul Pent, d/b/a Paul Pent Landscape Company, Dean Pent and J & W Landscape. On January 31, 1985, Walsh sold Pent three laurel oaks grown by Stewart Tree Service for a total price of $467.46 including sales tax (Ex. 2). On March 27, 1985, Walsh sold various trees and plants grown by Goochland Nurseries to J & W Landscape for a total price of $403.98 (Ex. 3). On April 22, 1985, Walsh sold two live oaks grown by Stewart Tree Service to Pent Landscape Company for a total price of $336.00 (Ex. 4). On July 3, 1985, Walsh sold various plants grown by Goochland Nurseries to J & W Landscape for a total price of $564.96 (Ex. 5). On all of these sales the producers billed Walsh for the product and were paid by Walsh. Walsh billed the customers who did not pay and Walsh filed the complaints (Ex. 8, 9 and 10), denied by Respondent on grounds Walsh was not an agent or representative of the producers. In 1976, Petitioner filed a complaint against the bond of the Ernest Corporation, a licensed dealer in agricultural products and received $5,589.20 from Respondent who recovered from the bonding company. In the complaint Walsh alleged that it was agent for Southeast Growers, Inc., selling their nursery stock throughout Florida. Respondent's witnesses could not recall what additional evidence they saw to conclude that Walsh was, in fact, an agent for the producer. However, these witnesses all testified that had they then believed Walsh was solely responsible to the producer for payment for the products sold they would not have concluded Walsh was the agent or representative of the producer. The bond on which Petitioner is attempting to recover provides that if the principal "shall faithfully and truly account for and make payment to producers, their agents or representatives, as required by Sections 604.15 - 604.30, Florida Statutes, that this obligation to be void, otherwise to remain in full force and effect." (Ex. 11 and 12)
Conclusions The Division of Administrative Hearings has jurisdiction over the parties to, and the subject matter of these proceedings. Section 604.21, Florida Statutes (1985) provides in pertinent part: Any person claiming himself to be damaged by any breach of the conditions of a bond or certificate of deposit, assignment or agreement given by a licensed dealer in agricultural products as herein before provided may enter complaints thereof against the dealer and against the surety, if any, to the department, which complaint shall be a written statement of the facts constituting the complaint. Section 604.15(1) , Florida Statutes (1985) provides: "Dealers in agricultural products" means any person, whether itinerant or domiciled within this state, engaged within this state in the business of purchasing, receiving, or soliciting agricultural products from the producer or his agent or representative for resale or processing for sale; acting as an agent for such producer in the sale of agricultural products for the account of the producer on a net return basis; or acting as a negotiating broker between the producer or his agent or representative and the buyer. (emphasis supplied) One of the complexities of this case which leads to some confusion is the fact that both Pent and Walsh were dealers in agricultural products as above defined. Walsh fits into the category of a person claiming himself to be damaged by a breach of any condition of the bond of Pent. However, he has the burden of showing that he is a person covered by the bond. According to the terms of the bond, coverage is provided only for "producers, their agents or representatives." Walsh is clearly not a producer in this case but claims coverage as an agent or representative. In construing "agent" or "representative" the legislative intent should be considered. The purpose of these provisions of the statute requiring licensing and bonding of dealers in agricultural products, as expressed in Section 604.151, Florida Statutes, is to protect producers from economic harm. Economic harm sustained by an agent or representative is imputed back to the principals, which in this case are the producers. An agency may be defined as a contract either expressed or implied upon a consideration, or a gratuitous undertaking, by which one of the parties confides to the other the management of some business to be transacted in the former's name or on his account, and by which the latter assumes to do the business and render an account of it. 2 Fl. Jur. 2d "Agency," Section 1. Here, Walsh was selling agricultural products on its own account, which products it was purchasing from the producers. The producer sold its product to Walsh and delivered it to the address Walsh indicated. The customer receipted for the product and the producer billed Walsh for the total cost, including transportation, to the ultimate buyer, less the 20-25 percent commission Walsh received. Walsh paid the producer and billed the customer. Whether or not Walsh collected from the customer had no bearing on the debt Walsh owed the producer for the product. It could be said that the producer was the agent for Walsh in delivering the product to the user. Even though Walsh never had actual possession of the product the sale to Walsh was complete when the producer delivered the product to the user. The entire transaction clearly is a buy-and-sell operation by Walsh and not Walsh acting as an agent for the producer. The fact that Walsh sells the producer's product does not make Walsh the agent or representative of the producer, when the producer holds only Walsh responsible to pay for the product. Nor was Walsh a representative of the producers. Representative is defined in Webster's New Collegiate Dictionary (1977 Ed.) as: "standing or acting for another esp. through delegated authority." Walsh had no delegation of authority to act for the producer. Walsh had no authority to modify the price, settle disputes, or any other function normally performed by a representative. The above interpretation of those having standing to file a complaint against a dealer in agricultural products is the same interpretation of the applicable statutory provisions that is made by Respondent. As stated in Natelson v. Dept. of Insurance, 454 So.2d 31 (Fl 1st DCA 1984): Agencies are afforded a wide discretion in the interpretation of a statute which it [sic] administers and will not be overturned on appeal unless clearly erroneous. The reviewing court will defer to any interpretation within the range of possible interpretations. (citations omitted). This interpretation limiting recovery on an agricultural bond to producers and their agents or representatives is certainly within the range of possible interpretations, especially considering the purpose of these statutory provisions to be the protection of the economic well being of the producer. From the foregoing, it is concluded that Robert J. Walsh & Company, Inc. was not the agent or representative of Goochland Nurseries and Stewart Tree Service and does not have standing to file a complaint against Dean Pent, d/b/a Pent Landscape Company, and Paul Pent, d/b/a Paul Pent Landscape Company, and their surety, Transamerica Insurance Company.
Recommendation It is recommended that a Final Order be entered dismissing the petition as contained in Petitioner's letter dated March 24, 1986. ENTERED this 14th day of July 1986 in Tallahassee, Leon County, Florida. K. N. AYERS 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 14th day of July 1986. COPIES FURNISHED: Honorable Doyle Conner Commissioner of Agriculture The Capitol Tallahassee, Florida 32301 Robert Chastain, Esquire General Counsel Mayo Building, Room 513 Tallahassee, Florida 32301 Thomas M. Egan, Esquire Phillip Kuhn, Esquire Post Office Box 7323 Winter Haven, Florida 33883 Ronnie H. Weaver, Esquire Mayo Building, Room 513 Tallahassee, Florida 32301 Mr. Joe W. Right Bureau of Licensing & Bond Department of Agriculture Mayo Building Tallahassee, Florida 32301
Conclusions An Administrative Law Judge of the Division of Administrative Hearings entered an Order Closing File and Relinquishing Jurisdiction in this proceeding. A copy of the Order is attached to this Final Order as Exhibit A.
Other Judicial Opinions REVIEW OF THIS FINAL ORDER PURSUANT TO SECTION 120.68, FLORIDA STATUTES, AND FLORIDA RULES OF APPELLATE PROCEDURE 9.030(b)(1)(C) AND 9.110, TO INITIATE AN APPEAL OF THIS ORDER, A NOTICE OF APPEAL MUST BE FILED WITH THE DEPARTMENT’S AGENCY CLERK, 2555 SHUMARD OAK BOULEVARD, TALLAHASSEE, FLORIDA 32399-2100, WITHIN 30 DAYS OF THE DAY THIS ORDER IS FILED WITH THE AGENCY CLERK. THE NOTICE OF APPEAL MUST BE SUBSTANTIALLY IN THE FORM PRESCRIBED BY FLORIDA RULE OF APPELLATE PROCEDURE 9.900(a). A COPY OF THE NOTICE OF APPEAL MUST BE FILED WITH THE APPROPRIATE DISTRICT COURT OF APPEAL AND MUST BE ACCOMPANIED BY THE FILING FEE SPECIFIED IN SECTION 35.22(3), FLORIDA STATUTES. YOU WAIVE YOUR RIGHT TO JUDICIAL REVIEW IF THE NOTICE OF APPEAL IS NOT TIMELY FILED WITH THE AGENCY CLERK AND THE APPROPRIATE DISTRICT COURT OF APPEAL. MEDIATION UNDER SECTION 120.573, FLA. STAT., IS NOT AVAILABLE WITH RESPECT TO THE ISSUES RESOLVED BY THIS ORDER. CERTIFICATE OF FILING AND SERVICE I HEREBY CERTIFY that the original of the foregoing has been filed with the undersigned Agency Clerk of the Department of Community Affairs, and that true and correct G LA copies have been furnished by U.S. Mail to each of the persons listed below on this 7 — day of QO. | elf Ah August, 2011. Agency Clerk By U.S. Mail The Honorable J. Lawrence Johnston Administrative Law Judge Division of Administrative Hearings The Desoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 Jeffrey Steinsnyder, Esquire Joseph M. Mason, Jr., Esquire Elizabeth Blair, Esquire Carole Joy Barice, Esquire Office of the Pasco County Attorney McGee & Mason, P.A. 7530 Little Road, Suite 340 101 South Main Street New Port Richey, Florida 34654 Brooksville, Florida 34601 Jacob D. Varn, Esquire McMillan Davis Fowler, White, Boggs, Banker, P.A. Post Office Box 534 Post Office Box 11240 Aripeka, Florida 34679 Tallahassee, Florida 32302
The Issue The issues in this case are whether Respondent committed the allegations contained in the Second Amended Administrative Complaint, and if so, the penalty that should be imposed.
Findings Of Fact The Parties Since 1999, Respondent has been licensed in the State of Florida as a health insurance agent. Pursuant to chapter 626, Florida Statutes, Petitioner Department of Financial Services has regulatory jurisdiction over licensed health insurance agents. The Events On or about December 12, 2006, Respondent was appointed as an agent with SunCoast Physicians Health Plan, Inc. ("SunCoast"), an insurer that offered Medicare Advantage HMO plans. Although Respondent was one of its appointed agents, he did not receive a salary from SunCoast, nor was he provided an office.1 In or around January 2007, Respondent was contacted by telephone by an individual——previously unknown to Respondent and whose name Respondent no longer recalls——who claimed that a local physician was interested in converting a number of consumers from other coverage to SunCoast. As the conversation progressed, it appeared to Respondent that the individual was presenting a legitimate business opportunity, as he mentioned the names of several of Respondent's acquaintances. At the conclusion of the call, Respondent agreed to meet the individual (and the individual's associate, whose name Respondent likewise does not remember) later that day at an office building at the intersection of Flagler Street and Fontainbleau Boulevard in Miami. Respondent proceeded to the agreed upon location and met with the two individuals, both of whom demonstrated substantial knowledge regarding SunCoast and its benefits. During the meeting, the two individuals advised that Dr. Abreau, a physician familiar to Respondent, desired to perform a membership conversion. As the discussion progressed, the individuals presented Respondent with approximately 30 enrollment applications for the SunCoast plan, all of which were blank with the exception of the pre-printed material. As a purported sign of "good faith,"2 the two individuals insisted that Respondent sign each of the forms on the signature line reserved for persons (e.g., agents or brokers) who assisted consumers in completing the application. Respondent ultimately agreed to do so——and to allow the unknown individuals, at their insistence, to temporarily retain the blank applications bearing his signature——with the understanding that he would return to the office the next morning, at which point Respondent would speak personally with Dr. Abreau and make arrangements to meet with the potential enrollees.3 On the following day, Respondent returned to the office building to continue with the transaction. Unable to find any trace of the two individuals, Respondent eventually located a custodian within the building, who advised that the office had been vacant for "a while." After repeated attempts over the next several days, Respondent was able to reach one of the unknown individuals by telephone, at which time Respondent was informed that the "deal was off" and that the enrollment forms would be mailed to him. Although Respondent never received the enrollment application as promised, he believed——based upon his prior experience in the industry that enrollment forms could only be submitted to an insurance company by the agent, i.e., Respondent——that the forms could not be misused and therefore no further action on his part was necessary. As such, Respondent never notified SunCoast that third parties were in possession of blank enrollment forms that bore his signature. Later during the month of January 2007, one or more unknown persons submitted approximately 30 enrollment forms (the same applications signed by Respondent) to SunCoast for processing. There is no record of who delivered the applications or by what means. Although SunCoast should have utilized the Centers for Medicare and Medicaid Services (CMS) computer database to confirm the accuracy of the personal information of each applicant that appeared on the forms, SunCoast did not do so. Had SunCoast performed such a verification, it would have discovered that the residential addresses for all of the applicants were incorrect——a clear sign that the applications were fraudulent. SunCoast processed the applications shortly thereafter, which resulted in unauthorized changes in health coverage for approximately 30 persons. In February 2007, Gabrial San Quintin was hired by SunCoast as its Director of Enrollment and Member Administration. Shortly thereafter, Mr. San Quintin discovered that an unusual number of SunCoast's mailings to its enrollees were being returned due to incorrect address information. Mr. San Quintin investigated the matter and ultimately determined that the January 2007 enrollment forms bearing Respondent's signature had not been authorized by the persons whose names appeared on the applications. However, neither Mr. San Quintin nor any other SunCoast employee notified Respondent of this information.4 In fact, Respondent credibly testified that he did not learn of the improperly submitted applications until approximately one year after his meeting with the unknown individuals. Although the approximately 30 applications processed by SunCoast in January 2007 had not been authorized by the enrollees, SunCoast continued to provide full insurance coverage until such time that the enrollees were switched back to their original coverage. During the final hearing, Petitioner presented the testimony of two of the individuals whose insurance coverage was improperly switched to SunCoast pursuant to applications bearing Respondent's signature: Digna Blanzaco and Rafael Alpizar. From the testimony of Ms. Blanzaco, it is apparent that she suffered no financial harm due to the unauthorized switch, nor was she denied any medical services. Likewise, there is no evidence that Mr. Alpizar suffered any physical harm or financial loss as a result of the improper change in coverage.5 In August 2007, SunCoast became insolvent and was subsequently liquidated. The undersigned credits Respondent's testimony that: he was not the person who submitted the applications to SunCoast in January 2007 and has no knowledge of who did so; he had no knowledge that the applications bearing his signature were going to be misused in any manner whatsoever, nor did he intend or desire for the applications to be misused; the reason he signed the forms and left them with the unknown individuals was because he believed it was necessary to do so in order to preserve what reasonably appeared to be a legitimate business opportunity; the January 2007 incident was the only occasion in which he left blank applications bearing his signature with third parties; and he received no remuneration as a result of the fraudulently submitted applications. The undersigned also finds, based upon the evidence adduced during the final hearing, that Respondent acted in good faith at all times in connection with the SunCoast applications. Ultimate Findings of Fact Petitioner has failed to prove by clear and convincing evidence that Respondent has demonstrated a lack of fitness or trustworthiness to engage in the business of insurance. Petitioner has failed to adduce clear and convincing evidence that Respondent has demonstrated the lack of reasonably adequate knowledge and technical competence to engage in insurance transactions. Petitioner failed to present clear and convincing evidence that Respondent engaged in unfair or deceptive acts or practices, as defined and prohibited by Part IX of Chapter 626, Florida Statutes, or has otherwise shown himself to be a source of injury or loss to the public.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Financial Services enter an order dismissing the Second Amended Administrative Complaint. DONE AND ENTERED this 2nd day of September, 2011, in Tallahassee, Leon County, Florida. S EDWARD T. BAUER 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 2nd day of September, 2011.
The Issue Whether Respondent, Unity Groves Corporation (Unity Groves), owes Petitioner, Maria Rodriguez, $1,321.00 for peppers purchased from Petitioner in March 2013.
Findings Of Fact The Parties Petitioner owns property in the Miami, Florida, area on which she grows a variety of peppers which she sells to agricultural retailers. Unity Groves is a family-owned and operated agricultural dealer which purchases produce from growers and growing facilities and resells to vendors across the country. During March and May 2013, Petitioner sold peppers on 14 separate dates to Unity Groves. Unity Groves then resold the peppers to retail vendors. During the brief course of dealings between parties, Petitioner would either contact Unity Groves and indicate the type and quantity of peppers she had available to determine whether Unity Groves needed to fill an order for a vendor or she would be contacted by an employee of Unity Groves to determine whether Petitioner had peppers available. The price for Petitioner's peppers would be negotiated prior to, or at the time of, delivery of the peppers to Unity Groves. Petitioner primarily negotiated with the receiver for Unity Groves, Emilio (last name unknown), or another employee, Pete (last name unknown). On ten occasions, Petitioner received a receipt prepared by Unity Groves at the time of delivery indicating the quantity of half or full bushels of the particular types of peppers and the agreed upon rate per half or full bushel that she would be paid. As demonstrated by the receipts and "Grower Payout" sheets submitted into evidence by both parties, the course of dealings between the parties supports Petitioner's testimony that in all but two instances, she in fact received payment in the amount indicated as the purchase price on the delivery receipts received from Unity Groves. Unity Groves' contention that the price indicated on the receipts was merely a desired "target price" is rejected because it is contrary to the greater weight of the evidence. On the four occasions for which Petitioner received a receipt with no indication of price, Petitioner was paid in accordance with her agreement with a Unity Groves' employee, Pete, which was reached in a telephone conversation prior to her delivery of the peppers to Unity Groves. Petitioner did not submit formal invoices to Unity Groves because the receipts provided by Unity Groves at the time of delivery accurately reflected the quantities of peppers sold by type and price, and she received the indicated price for all transactions except for the two instances which are the subject of this dispute. Petitioner was never informed that her products supplied to Unity Groves were deteriorating or that the quantity delivered was rejected because it was more than requested or needed. The Grower Payout sheets reflect that Petitioner received one duplicate payment in the amount of $130.00 for peppers delivered to Unity Groves on March 13, 2013. The Dispute Giving Rise to This Proceeding In March 2013, Petitioner received a telephone call from a Unity Groves' employee, Dennis (last name unknown), who requested a pallet of Hungarian Wax peppers and a pallet of Anaheim peppers. A pallet for Unity Groves is approximately 120 half bushel boxes of peppers. Petitioner advised Dennis that she did not think she could fill such a large order and that her workers could not yet pick those peppers. Petitioner told Dennis she would call him back and let him know how much she had available after picking. After the peppers were picked, Petitioner contacted Emilio and advised that she could deliver 78 half bushels of Hungarian Wax peppers and 84 half bushels of Anaheim peppers. Emilio confirmed with Dennis that, although Petitioner could not supply a pallet of each, Unity Groves still wanted those peppers. Petitioner delivered them to Unity Groves on March 22, 2013. Petitioner received receipt 4055 indicating delivery of the peppers and an agreed upon price of $10.00 per half bushel for the Hungarian Wax peppers and $12.00 per half bushel for the Anaheim peppers for a total price of $1,788.00. On March 25, 2013, Petitioner delivered the following to Unity Groves: 13 half bushels of Finger Hot peppers at $8.00 per half bushel; 20 bushels of Long Hot at $14.00 per bushel; 5 half bushels of Banana peppers at $12.00 per half bushel; 10 half bushels of Anahie peppers at $12 per half bushel. Petitioner received receipt 4067 from Unity Groves, and the total price based upon the prices indicated on the receipt for this delivery was $564.00. When Petitioner went to Unity Groves on April 14, 2013, to pick up her check in payment for the March 22 and 25 deliveries, she was given check 11439 in the amount of $1,031.00. She was also provided a "Grower Payout" sheet number 3807 indicating the breakdown by pepper, quantity, and price paid by Unity Groves for receipt numbers 4055 and 4067. Respondent immediately noticed that the prices paid for the large delivery of Hungarian Wax and Anaheim peppers was significantly lower than the agreed upon price as reflected on receipt 4055. Unity Groves also paid less for four out of five types of peppers on receipt 4067 for the March 25 delivery. The total difference between the total based upon the agreed upon receipt prices and the amount actually paid by Unity Groves was $1,321.00. When Petitioner realized the magnitude of the discrepancy, she and her daughter, Susana Rodriguez, went to discuss the issue with Carricarte. She inquired why she was paid $3.00 per unit versus $10.00 for the Hungarian Wax peppers and $4.00 per unit versus $12.00 for the Anaheim peppers (the prices reflected on receipt 4055). Carricarte told Petitioner that she was paid the price he received from his customer. He did not believe that Dennis purchased such a large quantity of peppers and wanted to verify this with him. Emilio confirmed in the presence of Petitioner and her daughter that Unity Groves, through Dennis, had requested two pallets of peppers from Petitioner. Dennis was out of the country and Carricarte told Petitioner he would call her after speaking with Dennis upon his return. Dennis was terminated by Unity Groves upon his return. Petitioner met with Carricarte two additional times. Each time she had one of her daughters present and, at the third meeting, she brought a representative from the Department. During these meetings, Carricarte disputed that Unity Groves would order such an unusually large quantity of peppers and that the price reflected on the receipt was not an agreed upon price but rather the "target price" Unity Groves hoped to be able to secure for the grower. Unity Groves never notified Petitioner that any of the peppers received on March 22 and 25, 2013, were defective or non- conforming, nor did it seek to revoke acceptance of the peppers or return the peppers to Petitioner.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Agriculture and Consumer Services enter a final order (1) finding that Unity Groves is indebted to Petitioner in the amount of $1,191.00 for the balance due for the peppers it purchased from Petitioner on March 22 and 25, 2013 ($1,321.00, minus $130.00 for the duplicate payment for the March 13 delivery); (2) directing Unity Groves to make payment to Petitioner in the amount of $1,241.00 ($1,191.00, plus $50.00 for reimbursement of the filing fee Petitioner paid) within 15 days following the issuance of the order; and (3) announcing that, if Unity Groves fails to make timely payment in full, the Department will seek recovery from FCCI, Unity Groves' surety. DONE AND ENTERED this 10th day of October, 2013, in Tallahassee, Leon County, Florida. S MARY LI CREASY 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 10th day of October, 2013.
