Findings Of Fact Petitioner, Rosario and Vito Strano d/b/a Strano Farms (Strano Farms), is a grower and shipper of fresh produce in Florida City, Florida (Dade County). Respondent, Mager Corporation d/b/a Gulf Provision Company (GPC), is an agricultural dealer in Jacksonville, Florida, subject to the licensing requirements of the Department of Agriculture and Consumer Services (agency). As such, GPC is obligated to obtain a dealer's license from the agency and to post a surety bond executed by a surety corporation to ensure that payment is made to producers for agricultural products purchased by the dealer. To meet this latter requirement, GPC has obtained a surety bond in an undisclosed amount from respondent, Aetna Casualty and Surety Company. This controversy involves a dispute over payment for a shipment of tomatoes purchased from Strano Farms by GPC for further sale to retail vendors. The origins of the dispute began on or about February 2, 1987, when a salesman for Strano Farms accepted a telephone order from Neil R. Sandler, president of GPC, for two lots of "Poppa's Famous" tomatoes. The order was later memorialized by petitioner in a memorandum dated February 7, 1987 reflecting the following: Quantity Description Pkq. Grade Size Price Amount 176 Tomatoes 20# Poppa's Famous 5x6 5.60 $985.00 176 Tomatoes 20# Poppa's Famous 6x6 3.80 528.00 Palletizing .15 52.80 352 Total Due: 1566.40 In addition, Strano Farms prepared a broker's memorandum on February 5, 1987 reflecting that GPC ordered two lots of "breakers," a specific grade of tomato. However, Strano Farms contended the reference to "breakers" was a typographical error by the clerical employee who prepared the document and that actually a different grade had been ordered. According to Rosario Strano, a partner and owner of petitioner, Sandler ordered 176 cartons each of light pink and pink tomatoes. This was corroborated by the fact that in early February, 1987 petitioner had no breaker tomatoes in stock. Sandler could not dispute this since more than fifteen months had passed since the order was placed, and he had no independent recollection of the transaction. The United States Department of Agriculture has established a color classification for tomatoes that sets forth the color of tomatoes by stage of maturity. In ascending order of maturity and color, they are green, breakers, turning, pink, light red and red. Homestead Tomato Packing Company, Inc. (Homestead) is the exclusive packer and shipper for Strano Farms. Homestead processed GPC's order and shipped the tomatoes to GPC on February 3, 1987. Prior to the shipment, sub-lot inspections of the produce from which GPC's shipment was drawn were made by an agency inspector on January 28 and February 2, 1987. The inspector's report indicates that the produce had a "mixed color", that there was no decay and the produce was within the tolerance limits for defects. It reflected further that the shipment met the pink and light pink standards. When the tomatoes arrived in Jacksonville on February 4 or 5, Sandler inspected the produce but was not satisfied with the condition of the tomatoes. He ordered a federal inspection the same day. The report reflected that the 6x6 lot of tomatoes was within federal standards while the 5x6 lot deviated slightly because of bruising and decay. However, the tomatoes conformed to pink and light pink standards. Sandler telephoned Strano Farms and requested that a price adjustment be made. When no agreement could be reached, GPC unilaterally adjusted the amount due to $894.80 and tendered Strano Farms a check in that amount. This amount was based upon a total price of $880.00 for both lots of tomatoes, $52.80 for pelletizing, less $38.00 spent by GPC for an inspection. The total payment was $618.80 less than originally agreed upon by the parties, or the amount being claimed by petitioner. Petitioner contends the adjustment made by respondent is "excessive" and not justified by the actual condition of the tomatoes. Strano Farms is willing to allow an adjustment of up to $1.15 per box for that percentage of boxes in the 5x6 lot that failed to meet standards. This adjustment is consistent with the quality of the tomatoes reflected in the federal inspection report. It is also consistent with the industry practice that any price adjustments should correspond with the condition of the produce as reflected on the federal inspection report. Because the adjustment proposed by petitioner is reasonable and consistent with the report, it should be made. Therefore, respondent should deduct $1.15 per box for those boxes in the 5x6 lot that failed to meet federal standards because of bruising and decay. It should also deduct the cost of the inspection report ($38) and pay petitioner all other amounts due.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that respondent pay petitioner the additional amount due within thirty days from date of final order. In the event payment is not timely made, the surety company should be required to pay this amount. DONE AND ORDERED this 14th day of June, 1988, in Tallahassee, Leon County, Florida. DONALD R. ALEXANDER Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 14th day of June, 1988.
The Issue The issue in this case is whether the Department of Environmental Protection (DEP) should revoke the Petitioner's exemption from the requirement to obtain a General Permit for Disposal of Tomato Wash Water under Florida Administrative Code Rule 62-660.805.
Findings Of Fact The Petitioner, Harllee Packing, Inc., formerly known as Harllee-Gargiulo, Inc., is a grower and shipper of Florida vegetables that generates wastewater from its tomato-washing operation. On January 8, 1992, the Department of Environmental Regulation (DER), the predecessor to the Respondent, the Department of Environmental Protection (DEP), adopted Florida Administrative Code Rule 17-660.805, which not only provided for a General Permit for Disposal of Tomato Wash Water but also provided for an exemption from the requirement to obtain a permit under certain circumstances and conditions. (The rule was renumbered in 1996 and is now Rule 62-660.805.) In 1992, the Petitioner requested an exemption for its tomato-washing operation and entered into discussions with DER regarding the tomato-washing operation. On October 6, 1992, the Petitioner submitted information in support of its request for an exemption. DER issued the Petitioner a Notice of Permit Exemption on November 13, 1992. The Notice of Permit Exemption stated that the information submitted on October 6, 1992, provided "reasonable assurance that proper operation will occur to prevent violations of the Department's rules and regulations." There was no other evidence as to why the exemption was issued. At the time of and since issuance of the Notice of Permit Exemption, the Petitioner's tomato-washing operation has used approximately 16,500 gallons of wash-water a day. After use in the tomato-washing operation, the tomato wash-water is loaded from a storage tank into dedicated tankers for transportation and uniform distribution on uncultivated agricultural fields in accordance with the Notice of Permit Exemption. The Notice of Permit Exemption prohibits distribution during or within 24 hours after a rainfall event greater than a 10-year, 1-hour storm and requires a minimum 5-day resting period between distributions to any one distribution site. Runoff outside the prescribed distribution sites also is prohibited. Although no witness testified, it can be inferred from these provisions themselves that their purpose was to control entry of the tomato wash-water into the groundwater and to prevent surface water runoff. The Notice of Permit Exemption warned that it could be revoked if the tomato-washing operation was substantially modified, if the basis for the exemption was determined to be materially incorrect, or if the Petitioner failed to comply with the specific conditions in the Notice of Permit Exemption. On January 28, 1998, DEP issued a Notice of Exemption Revocation. There was no evidence that the tomato-washing operation has been modified or that the Petitioner failed to comply with the specific conditions in the Notice of Permit Exemption. The exemption was revoked because "tomato washing operations discharging between 5000 and 50,000 gallons per day are required to obtain industrial wastewater general permits from the Department."
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Environmental Protection enter a final order revoking the Petitioner's exemption. DONE AND ENTERED this 16th day of October, 1998, in Tallahassee, Leon County, Florida. COPIES FURNISHED: Terry Cole, Esquire Oertel, Hoffman, Fernandez & Cole, P.A. Post Office Box 1110 Tallahassee, Florida 32301 J. LAWRENCE JOHNSTON 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 Filed with the Clerk of the Division of Administrative Hearings this 16th day of October, 1998. Ricardo Muratti, Assistant General Counsel Jennifer Fitzwater, Assistant General Counsel Department of Environmental Protection 3900 Commonwealth Boulevard, Mail Station 35 Tallahassee, Florida 32399 Kathy Carter, Agency Clerk Office of General Counsel Department of Environmental Protection 3900 Commonwealth Boulevard, Mail Station 35 Tallahassee, Florida 32399-3000 F. Perry Odom, General Counsel Department of Environmental Protection 3900 Commonwealth Boulevard, Mail Station 35 Tallahassee, Florida 32399-3000
The Issue The issue in this case is whether proposed Florida Administrative Code Rule 64-4.002 (the “Proposed Rule”) is an invalid exercise of the legislative authority delegated to the Department of Health (the “Department”).
Findings Of Fact In order to better contextualize the facts presented at final hearing and discussed below, the following excerpts from the Proposed Rule and the underlying statutory provision are provided: Section 381.986, Florida Statutes (8) Medical Marijuana Treatment Centers.- (a) The department shall license medical marijuana treatment centers to ensure reasonable statewide accessibility and availability as necessary for qualified patients registered in the medical marijuana use registry and who are issued a physician certification under this section. * * * The department shall license as medical marijuana treatment centers 10 applicants that meet the requirements of this section, under the following parameters: [Previously denied applicants meeting certain requirements not relevant to the instant action.] [One applicant from a specific class pursuant to a federal lawsuit.] As soon as practicable, but not later than October 3, 2017, the Department shall license applicants that meet the requirements of this section in sufficient numbers to result in 10 total licenses issued under this subparagraph, while accounting for the number of licenses issued under sub-subparagraphs a. and b. For up to two of the licenses issued under subparagraph 2., the department shall give preference to applicants thatdemonstrate in their applications that they own one or more facilities that are, or were, used for the canning, concentrating, or otherwise processing of citrus fruit or citrus molasses and will use or convert the facility or facilities for the processing of marijuana. (Emphasis added). Florida Administrative Code Rule 64-4.002 (Proposed) (1)(f) For applicants seeking preference for registration as a medical marijuana treatment center pursuant to ss. 381.986(8)(a)3., F.S., the applicant must provide evidence that: The property at issue currently is or was previously used for the canning, concentrating, or otherwise processing of citrus fruit or citrus molasses. In order to demonstrate the property meets this criteria, the applicant may provide documentation that the applicant currently holds or has held a registration certificate pursuant to section 601.40, F.S. A letter from the Department of Citrus certifying that the property currently is or was previously used for the canning, concentrating, or otherwise processing of citrus fruit or citrus molasses will be accepted as sufficient evidence. The applicant as an individual holds, in his or her name, or the applicant as an entity holds, in the legal name of the entity, the deed to property meeting the criteria set forth in subparagraph 1. above; and A brief explanation of how the property will be used for purposes of growing, processing, or dispensing medical marijuana if the applicant is selected for registration. * * * Subject matter experts will substantively and comparatively review, evaluate, and score applications using [the Scorecard incorporated by reference]. * * * (a)7.(b) Scores for each section of the application will be combined to create an applicant’s total score. The department will generate a final ranking of the applicants in order of highest to lowest scores . . . . (c) In accordance with ss. 391.986(8)(a)3., F.S., the two highest scoring applicants that own one or more facilities that are, or were, used for the canning, concentrating, or otherwise processing of citrus fruit or citrus molasses and will use or convert the facility or facilities for the processing of medical marijuana will receive an additional35 points to their respective total score. Licenses will be awarded, subject to availability as set forth in ss. 381.986(8)(a)2. and 381.986(8)(a)4., F.S., based on the highest total score in the following manner: The highest scoring applicant that is a recognized member of the Pigford or [the Black Farmers Discrimination Litigation] will receive a license. The remaining highest scoring applicants, after the addition of the preference points for applicants pursuant to paragraph (7)(c) above, will receive licenses up to the statutory cap set forth in ss. 381.986(8)(a)2., F.S. The remaining highest scoring applications, after removing any preference points received under paragraph (7)(c), will receive licenses up to the statutory cap . . . . (Emphasis added). The Department is an agency of the State of Florida charged with administering and enforcing laws related to the general health of the people of the state. § 381.0011(2), Fla. Stat. As part of this duty, the Department is charged with implementing the Compassionate Medical Cannabis Act of 2014. See § 381.986, Fla. Stat. Favero is a Florida corporation in good standing since its incorporation in 1974, primarily engaged in the business of growing orchids. Favero aspires to file an application for licensure as a medical marijuana treatment center (“MMTC”). Following the passage of Senate Bill 8A by the 2017 Florida Legislature, which substantially rewrote section 318.986, Florida Statutes, Favero decided to seek the citrus preference described in section 381.986(3)(a)3. (hereinafter referred to as the “Preference Statute”). To that end, Favero purchased a citrus processing business in Safety Harbor, Florida, for approximately $775,000, including the business’s real property and all facilities located thereon. The purchase took place prior to publication of the Proposed Rule. The purchase of the Safety Harbor property reduced Favero’s financial liquidity but, presumably, not its net worth as the value of the property would replace the cash expenditure made for the purchase. It is Favero’s intent to convert the citrus processing facility located on the property into a medical marijuana processing facility if Favero receives the requisite license as a MMTC. Favero contends, as stated in the following paragraphs of its Petition Challenging the Invalidity of Proposed Rule 64-4.002: The Proposed Rule grants a preference to an applicant who owns “property” that was once used for citrus processing. The statute, however, clearly grants the preference only to applicants who “own one or more facilities that are, or were, used for the canning, concentrating, or otherwise processing ” By using the broader word “property” rather than “facility,” the Department is granting the citrus preference to a broader group of applicants than the statute permits, such as owners of packinghouses and other properties that fail to meet the definition of “processor” or were not used for “canning” or “concentrating.” The statute is clear and unambiguous. The use of the word “property” rather than the statutory term “facilities” renders the rule invalid because the use of that term exceeds the Department’s rulemaking authority, enlarges and modifies and contravenes the requirements of Section 381.986(8)(a)3., is vague, fails to establish adequate standards for agency decisions, vests unbridled discretion in the agency and is arbitrary and capricious. See § 120.52(8)., Fla. Stat. * * * The Proposed Rule allows for a preference to only some applicants that own a citrus processing facility. Under the scoring system, applicants demonstrating that they own a citrus processing facility may receive an additional 35 points. However, the Proposed Rule does not guarantee that any applicant owning a citrus processing facility will actually receive those points or get a license. The Proposed Rule merely grants an additional 35 points to two applicants. The Department of Citrus has indicated that more than a dozen companies will qualify for the citrus preference. Under the Proposed Rule, most of those applicants would receive no additional points despite qualifying for the statutory preference. Additionally, the Proposed Rule provides no assurance that any applicant qualifying for the citrus preference will actually receive a license. The Form adopted by the Proposed Rule allows Department evaluators to award a maximum of 1,150 points in several categories. The additional 35 points available under the Proposed Rule amount to an addition of just a 3% bonus. If those extra 35 points are not enough to exceed the scores of other applicants, then no citrus-preference qualifying applicant will receive a license. Favero contends that reduction of its liquid assets could have a negative impact on its overall financial condition when considered by the Department as it reviews Favero’s MMTC application. Favero is concerned that this negative impact may not be completely offset by the citrus preference it is seeking. Mecca is a Florida corporation located at 7965 Lantana Road, Lantana, Florida. It has existed since November 15, 1973, has operated in Florida since the early 1970s, and began citrus farming on approximately 2,000 acres in 1983. Mecca has been and is currently licensed as a citrus dealer and a regulated citrus processing plant and citrus packinghouse. The “processing” done by Mecca does not involve canning or concentrating citrus. Mecca “processes” citrus in its “fresh fruit form” (discussed more fully below). Mecca intends to convert its property and facilities for the purpose of growing, processing or dispensing medical marijuana if its application for an MMTC license is approved. Mecca contends the citrus preference in the Proposed Rule needs further clarification. Mecca also asserts the evaluation and scoring system with respect to the citrus preference constitutes an invalid exercise of the Department’s delegated legislative authority. The Scoring System The MMTC application has 16 separate sections. An applicant may be awarded up to 50 points on some sections, up to 100 points on other sections. The total number of points any application might receive is 1150, presuming a perfect score on each section. Each of the individual sections, whether for 50 or 100 points, is graded in accordance with an evaluation rubric. The rubric contains five categories of scores which are used by reviewers, allowing for a range of points in each section. The five categories each have a range depending on whether the section allows 50 or 100 points. The rubric directs that a category 5 response could be awarded between 40 and 50 points in the 50-point sections, or between 80 and 100 points in a 100-point section. A category 4 response could get between 30 and 39 points (or 60 to 79 points); a category 3 could award 20 to 29 points (or 40 to 59 points); a category 2 could be worth 10 to 19 points (or 20 to 39 points); and a category 1 might award 0 to 9 points (or 0 to 19 points). Thus, an applicant may be awarded points anywhere within the range in each category for each section of the application. By way of example, category 5 under the rubric (wherein a reviewer may give an application 40 to 50 or 80 to 100 points) directs the reviewer as follows: Applicant addressed all items. When necessary, each item has multiple, specific examples of experience and knowledge. Experience and knowledge are connected to specific, identifiable people in the application. Plans are clear, detailed, well documented, and thorough. All charts, photographs, maps, sketches, and other supplemental information are clear and legible. When necessary, applicant provides full documentation for representations of future performance. Responses related to financial reflect robust financial resources and clear lines of authority within the organizations. By comparison, under Category 3, which could award 20 to 29 or 40 to 59 points, the rubric directs the reviewer to consider: Either: Applicant responded to all items. Applicant responds to items addressing experience and knowledge, though answers tend to lack specificity. Plans are provided, but are lacking in clarity, documentation, or thoroughness. When necessary, some supplemental information is provided. Responses related to financials do not reflect robust financial resources, but do not raise doubts of applicant’s financial viability, or the organization has unclear lines of authority, or; Most responses are sufficient to be considered Category 4 or 5 Responses, but applicant fails to address some items. Favero asserts that allowing a reviewer to award points from an allowable range gives unbridled discretion to the Department. The argument misses the point that the ranges in each category direct the reviewer on how to score, while allowing some leeway in determining which applications are slightly better or worse than their competitors. Depending on the strength or weakness of one applicant’s response vis-à-vis another applicant, it is reasonable to assign more or fewer points in a comparative review. The rubric is quite descriptive and allows for a nuanced review of responses by the Department reviewers. The Preference The Preference Statute asserts a preference “for up to two of the licenses issued,” i.e., past tense. There are no licenses “issued” during the application review process, so the preference is actually assigned before licensure. The Preference Statute is somewhat confusing in this regard. The Proposed Rule attempts to reconcile this discrepancy by assigning preference points as a part of the application review process, while still approving the most qualified applicants. That approach is reasonable and has merit; it allows the preference to be assigned but does not attempt to insert it into the actual licensure process. The Proposed Rule assigns the preference points at the end of the review, i.e., after an application receives its “total score.” Thus, an applicant could conceivably be awarded 1185 points on the 0 to 1150 point scale. Regardless of how the points are assigned, Favero contends that the 35 preference points are too insignificant as compared to a possible (perfect) score of 1150 during application review. That number of points (35) would be only about three percent of a perfect score. The lower the average scores of all applications, however, the more the 35 points might come into play. If all applicants received an average score of 575 total points, the preference points would be twice as important as compared to perfect 1150 scores. The assignment of the preference points only after totaling the scores is a legitimate and acceptable method. Taking the 16 sections of the application separately, 35 points assigned in any one section could be quite significant. In fact, the Department arrived at the 35 points by taking the average number of possible points per section, i.e., 72, and assigning approximately half of that amount to reach the 35- point preference. The preference points are not just an arbitrary number assigned by the Department. Favero also objects that the Proposed Rule only assigns the 35 preference points to the two highest scoring, eligible applicants, i.e., those who will convert a citrus facility to process medical marijuana. If those two eligible applicants were more than 35 points below other, non-eligible applicants’ scores, assignment of the preference points would not result in the approval of any eligible applicants. The plain language in the Preference Statute and the Proposed Rule allows for a preference of “up to two” applicants. There is, therefore, no mandate that any applicants must receive the preference. While the Legislature can be presumed to have wanted preference points to be awarded (else why would the Preference Statute exist?), the language of the statute merely limits the number of entities which could get such a preference. The Department, interpreting a statute it is charged with implementing, interprets section 381.986(8)(a)3. to mean the issuance of available licenses to as many as two entities which are eligible for the preference. The Proposed Rule allows the Department to assess an applicant’s entitlement to the preference, to assign the preference, and to meet its statutory obligation. Property versus Facility The Legislature clearly intended to give a preference to applicants who “own . . . facilities that are, or were, used for canning, concentrating, or otherwise processing of citrus . . . and will use or convert the . . . facilities for the processing of medical marijuana.” The Legislature failed, however, to provide guidance by way of definitions. While the Legislature chose the words “facility or facilities” in the Preference Statute, the Department complicated the issue by using the word “property” for the most part, but also using the words “facility” and “facilities” at times. Favero contends that a property is much broader in scope than a facility, and the Department therefore exceeded its delegated legislative authority. The Department argues that facilities used to process citrus must be located on some property, obviously. But, facilities located on a property might be leased, so that the fee simple owner of the property is different from the leaseholder of that facility. Thus, if an applicant for a medical marijuana treatment center license wants to avail itself of the preference, it would need to own the facility. Whether that means the applicant must own the property on which the facility is located is not clear in the Preference Statute or in the Proposed Rule. The Department argues that the way to show ownership of a facility is by way of a deed to the property on which the facility is located. In fact, Favero will use a warranty deed to prove ownership of the facilities it purchased in order to obtain the preference. But if Favero purchased land on which citrus had been grown but not processed, i.e., if there had been no facilities on the land to can, concentrate or otherwise process the fruit, except in fresh fruit form, the preference would not apply. And if an applicant obtained a leasehold interest in a facility, it would not be able to “show ownership” by way of a deed to the property. The Preference Statute requires the applicant to convert the facility in order to gain the preference. It is unclear how a piece of unimproved property can be “converted” to another use; land is land. This begs the question of whether growing citrus on a piece of property, and then removing all the citrus trees in order to grow medical marijuana, is a “conversion” of a facility as contemplated by the Legislature. Neither the Preference Statute nor the Proposed Rule contain any definitional assistance to answer that question. An important question to be answered is whether the growing of citrus constitutes “processing” as alluded to by the Legislature. The Preference Statute provides no definition of the word. The Citrus Code (chapter 601, Florida Statutes) also does not define “processing,” but does describe a “processor” of citrus as: ‘[A]ny person engaged within this state in the business of canning, concentrating, or otherwise processing citrus fruit for market other than for shipment in fresh fruit form.” § 601.03(32), Fla. Stat. (Emphasis added). Processing must therefore mean something other than merely growing citrus and packing it up for shipment. That being the case, a property where citrus is grown that is “converted” to a property growing marijuana would not afford an applicant a preference. There must be some “facility” that is or has been used to process citrus, i.e., doing something more with the raw product, in order to constitute “processing.” Therefore, a “packinghouse,” i.e., “[a]ny building, structure, or place where citrus fruit is packed or otherwise prepared for market or shipment in fresh fruit form,” would not be engaged in “processing” citrus. See § 601.03(29), Fla. Stat. Mecca, which owns property where citrus was grown, picked, graded, sorted, polished, cleaned and packaged for transfer “in fresh fruit form,” would not be a processor, either. Mecca owns a packinghouse only, not a processing facility as that term seems to be used by the Legislature. Its operations were not part of the “canning, concentrating, or otherwise processing citrus fruit other than for shipment in fresh fruit form.”
The Issue This proceeding was initiated on June 27, 1985, when Petitioner filed its complaint for $51,680.00 with the Florida Department of Agriculture. Respondents were Dade Tomato and its surety, State Automobile Mutual Insurance Co. of Columbus, Ohio. After payment of $38,880.00 was received, Homestead Tomato reduced its claim to $12,800.00 in an amended complaint dated July 22, 1985. Dade Tomato responded with a timely request for formal hearing. The issue at hearing was whether $12.00 or $16.00 was the price per box of 5 x 7 tomatoes purchased by Dade Tomato from Homestead Tomato on January 13th and 21st, 1985. Homestead Tomato presented the testimony of two witnesses and nineteen exhibits; Dade Tomato presented seven witnesses and thirteen exhibits; State Automobile Insurance Company was noticed, but did not appear. Both parties submitted Proposed Findings of Fact and Conclusions of Law. These have been carefully considered in the preparation of this Recommended Order, and an outline of the adoption or rejection of each proposed finding is included in Appendix A, attached to, and incorporated in this order. A document styled Reply Brief of Petitioner Homestead Tomato Packing Company, Inc., was filed on January 9, 1986. It was not authorized and was not considered in the preparation of this Recommended Order.
Findings Of Fact Homestead Tomato is agent for Strano Farms of Florida City, Florida, a producer of tomatoes. Rosario Strano is president of Homestead Tomato and co-owner of Strano Farms. (R. Strano) Dade Tomato, a tomato repacking company, is located in Miami, Florida. Its president is Joe Lococo. It is licensed as a dealer in agricultural products and is bonded by State Automobile Mutual Insurance Company. (J. Lococo, Amended Complaint dated July 22, 1985) The week of January 20-26, 1985, was a memorable week for the Florida tomato industry: a savage freeze hit south Florida, crops were devastated and the market awoke from its earlier torpor. For days prior to the 20th, Rosario Strano had carefully watched the weather services. By the 15th, when the freeze forecast appeared to be a sure thing, Strano Farms worked night and day and into the weekend harvesting tomatoes. (T. Banks, R. Strano) On January 19th, a representative from Dade Tomato contacted Tom Banks, an employee of Homestead Tomato, and asked for a load (1600 boxes) of 6 x 7 tomatoes. Banks explained that they were ready to sell, but not ready to price, since they expected a high demand as a result of the impending freeze. It was established that the "following week's price would control." The load was shipped that same day. On Monday, the Dade Tomato called for another load the same size. Prices still had not been established, but the load was shipped, again the same day. (T. Banks) After the freeze, around the middle of the week, Rosario Strano called together Tom Banks and a few other key employees and established a price for their tomatoes: $20.00 box for 5 x 6 (largest) $18.00 box for 6 x 6 (next size down) $16.00 box for 6 x 7 (medium) $12.00 box for 7 x 7 (small) Banks was instructed that the buyers were to be notified the price was set. Anyone "booked in" didn't have to take the order or could back out. Strano wanted to be told immediately of any problems with the tomatoes on the other end, and he would take them back. He was confident that he had a good market for his unique, pre-freeze tomato supply. Several buyers backed out, some tomatoes did come back, but the entire supply was sold (approximately 40-48 loads). (T. Banks. R. Streno) In setting his prices for the week of the freeze, Strano obtained information from the Florida Fruit and Vegetable Report, a daily publication of the U.S. Department of Agriculture and the Florida Department of Agriculture and Consumer Services, out of Winter Park, Florida. (R. Strano) The sheets include price quotations for a wide variety of commodities in different parts of the state obtained by telephone survey of packing houses and producers the prior date. (Petitioner's Exhibits #15-19) It is a guideline rather than an "official" market price indicator. (J. Strother, R. Cohen) In some eases the prices quoted to the survey are later adjusted by the producer. (R. Cohen) The issue dated January 24, 1985, reflected for #1 quality tomatoes a price of $20.00, $18.00 and $16.00 for 5 x6, 6 x 6, and 6 x 75 respectively. The following two days showed the same. Prior days, January 22 and 23 quoted no prices but stated "practically all sales prices to be established later". (Petitioner's Exhibits #15-19) After hearing the prices established by Strano, some of his customers, including Joe Lococo and his broker, began to protest. (T. Banks, J. Lococo) While refusing to budge, end arguing that he was charging the same price to his other customers for his pre-freeze, quality tomatoes, Strano resorted to offering rebates of 2.00 a box for prompt payment and, later, for settlement of cases that otherwise would have gone to court. (T. Banks) In short, Strano had difficulty getting some of his customers to pay the price he had set. Not all of Strano's customers bought and had tomatoes shipped on a price to be settled basis. Of the ten invoices admitted as Petitioner's Exhibits #5- 14, three represented sales on the same basis as the sales to Dade Tomato: Exhibits 5, 6 and 7. The remaining invoices represented sales to customers who had the price established prior to sale. Each of the invoices reflect the price of a box of 5 x 7 tomatoes to be $15.00. The invoices do not reveal which may have received the $2.00 rebate. Dade Tomato purchased ten loads of tomatoes during the week of the freeze. With the exception of the two loads from Homestead Tomato, the highest price for 6 x 75 was $12.00. Most of the tomatoes picked prior to the freeze were priced from $10- 12.00, with tomatoes picked after the freeze (salvage) going for as low as $6.00 for 6 x 7s. (J. Lococo, Respondent's Exhibits #1- 12) "Market price" is a highly fluid, highly subjective standard. During the course of a tomato season from 25-30% of sales are made on a "market price" basis, that is, the parties do not establish a firm price prior to sale, but wait to see what the market does. The market can be settled in a few days in a normal condition or longer in an abnormal condition, such as after a freeze. Market relates to supply and demand. A price is tried, then accepted or rejected, depending on whether the buyer in turn can find a market to sell at this price. Failure by a seller to adjust downward, or overpricing can result in animosity and the refusal of customers later to purchase at reasonable prices in a different season. (J. Strother, R. Cohen, F. Campisi) Various agents and brokers testified at the hearing on behalf of Dade Tomato as to what they felt was the market during the week of January 20-26th, 1985. James Strother, with thirty- three years in the produce business, came out that week with prices of $16.00, $14.00 and $12.00, and $16.00, $15.00 and $12.00, with $12.00 for the 6 x 75. He told his customers, "You're looking at the low and I expect to get paid for it." He had heard rumblings of a higher market, but set his market price to insure that he would get paid, and he moved his tomatoes. While he avowed respect for Strano, he testified that their thoughts on the market that week differed. He knew others were quoting higher than $12.00, he just wanted to be sure he sold. Florida Tomato Packers, Inc., is one of the largest packers in Florida. They initially sold 6 x 7 tomatoes during the freeze market at $16.00, but later adjusted the invoices down to $12.00. (D. Holden, Respondent's Exhibit #1) No one explained exactly how or why this was done by Florida Tomato Packers. Other exhibits produced by Respondent showed adjustments downward to varying prices. (Respondent's Exhibits # 7 and 8) After the initial complaint was filed by Homestead Tomato, Lococo made two payments for a total which amounts to $12.00 a box, the level which he insists the proper price should be. He does not dispute the quality or condition of the tomatoes sold by Homestead Tomato. (J. Lococo)
Recommendation Based upon the foregoing findings of fact and conclusions of law, it is, hereby RECOMMENDED: That a Final Order be entered requiring that the balance of $12,800.00 be paid by Dade Tomato to Homestead Tomato. In the absence of payment, Co-Respondent, State Automobile Insurance Company, should be required to pay said sum in accordance with Section 604.21(8), Florida Statutes. DONE and ORDERED this 15th day of January, 1986, in MARY CLARK Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 15th day of January, 1986. APPENDIX TO RECOMMENDED ORDER, CASE NO. 85-3487A The following constitutes my specific rulings pursuant to Section 120.59(2) Florida Statutes, on all of the Proposed Findings of Fact submitted by the parties to this case. Submitted by the Petitioner Adopted in paragraph 1, Findings of Fact. Adopted in paragraph 2, Findings of Fact. Adopted in paragraph 3, Findings of Fact. Adopted in substance in paragraph 4, Findings of Fact. Adopted in paragraph 4, Findings of Fact. Adopted in paragraph 4, Findings of Fact. Adopted in paragraph 3, Findings of Fact. Adopted in paragraph 3, Findings of Fact. Adopted in paragraph 5, except that instead of a set number of loads of tomatoes sold, the testimony of R. Strano was a range from forty to forty-eight loads. Adopted in paragraph 5, Findings of Fact. Adopted in substance in paragraph 7. The names of the buyers and total amounts of each purchase are immaterial. Adopted in paragraph 6, Findings of Fact. The substance of this paragraph relating to Florida Tomato Packers, Inc., is adopted in paragraph 10, Findings of Fact. The sentence relating to the market price is incorporated in essence in paragraph 5, Conclusions of Law. These facts are covered in the "Issues and Procedural Matters" preceding the Findings of Fact, and in paragraph 11, Findings of Fact. The substance of this paragraph relating to when the market settles is adopted in paragraph 9, Findings of Fact. The bias of witnesses who testified as to when the market settled is irrelevant as the time that the market settled is irrelevant. The statement that " Respondent agrees that the contract for the tomatoes was at a price to be established during the week of January 21-26 1985' . . . " is not supported by competent substantial evidence. Adopted in substance in paragraph 10, Findings of Fact. Rulings on Proposed Findings of Fact Submitted by the Respondent The first sentence is adopted in paragraph 4, Findings of Fact. The second sentence is substantially modified in paragraph 4 by a finding that the agreement was that the following week's price would control". Same as paragraph 1, above. Adopted in substance in paragraph 5, Findings of Fact. Adopted in paragraph 7, Findings of Fact. Adopted in paragraph 11, Findings of Fact. Adopted in paragraph 5, Findings of Fact. The second sentence, relating to all of the sales at $16.00 as being a set price, is rejected as contrary to the weight of the evidence. The remaining sentences are adopted in paragraphs 5 and 7, Findings of Fact. Partially adopted in paragraph 8, Findings of Fact. The basis of the price paid is immaterial. Adopted in paragraph 10, Findings of Fact. Rejected as cumulative and unnecessary. Rejected as cumulative and unnecessary. Rejected as a misconstruction of the testimony. James Strother testified that his price was 12.00 a box. Adopted in paragraph 6, Findings of Fact. 14 - 16. The substance of these paragraphs have been adopted. However, they are presented here as simply testimony of witnesses rather than findings of fact. The "market price" description is rejected for reasons set out in paragraph 4, Conclusions of Law. Adopted in paragraph 11, Findings of Fact. COPIES FURNISHED: David V. Lococo, Esquire LOCOCO, KLEIN, TOUBY & SMITH 901 Northeast 125th Street Suite C North Miami, Florida 33161 Joe W. Kight, Chief Bureau of License and Bond Florida Department of Agriculture and Consumer Services Room 416 - Mayo Building Tallahassee, Florida 32301 Ron Weaver, Esquire Florida Department of Agriculture and Consumer Services Mayo Building, Tallahassee, Florida 32301 State Automobile Insurance Company 515 E. Broad Street Columbus, Ohio 43216 Alexander Pires, Esquire SCOTT, HARRISON and McLEOD 2501 M. Street N.W. Suite 400 Washington, D.C. 20037 Robert Chastain, Esquire Department of Agriculture and Consumer Services Room 513 - The Mayo Building Tallahassee, Florida 32301 Honorable Doyle Conner Commissioner of Agriculture The Capitol Tallahassee, Florida 32301
Findings Of Fact On March 25, 1980, Willard Sutliff, broker for Okun and Charles Weisinger, salesman for Six L's, met at the Six L's packing facility in Immokalee. On that date, Sutliff inspected, purchased and took delivery of a load of tomatoes for an agreed price of $10,198.50. The tomatoes were shipped the same day by transport arranged by Sutliff, and arrived in New York at the Okun facility on March 28, 1980. They were immediately inspected by a United States Department of Agriculture (U.S.D.A.) representative and found to be "Now approximately 60 percent U.S. No. 1 quality, 9 percent soft, 5 percent decay." Following harvesting, sorting and packing, tomatoes are taken to the Six L's "gas room" where they are normally held for a period of 48 to 60 hours prior to shipment. During this period the tomatoes continue to ripen. The tomatoes at issue here had been placed in the gas room on March 19 and were well past the optimum shipping point at the time of sale on March 25. These tomatoes were initially inspected by a U.S.D.A. representative on March 19 at the Six L's facility and were assigned a U.S. combination grade. This grade indicates the tomatoes are a combination of U.S. No. 1 and U.S. No. 2 grade, but are at least 60 percent U.S. No. 1. Sutliff was aware of the March 19 U.S.D.A, report, but contends he purchased the load with the understanding from Weisinger that the tomatoes would grade at least 75 percent U.S. No. 1, and his broker's memorandum so indicates. Weisinger denies such representation. The Six L's office manager received his copy of the broker's memorandum on April 3 and regarded the 75 percent U.S. 1 entry as a minor error not requiring repudiation since the tomatoes had already been delivered. Sutliff was accorded ample opportunity to inspect the tomatoes prior to purchase. Although the tomatoes were in crates on pallets which limited his access, Sutliff did observe the color of the tomatoes and also determined that they were "second picking" rather than "crown picking". Had he elected to do so, Sutliff could have required the crates to be opened or requested a further U.S.D.A. inspection. Sutliff purchased the load at a price somewhat lower than market for high grade tomatoes. Weisinger contends he "discounted" the price due to their ripeness while Sutliff contends he paid the lower price because the tomatoes were second picking and were not represented to be 85 percent U.S. No. 1 which would have justified a higher price. The price was arrived at through negotiation and, obviously, all relevant factors including the ripened condition of this highly perishable commodity were taken into account by the parties. The tomatoes were acknowledged to be in good condition by the trucker when he accepted them for loading on March 25th. The temperature records and the three days for transit to New York indicate reasonable shipping conditions. Thus, the deterioration was not due to mishandling, but primarily to the age of the tomatoes when they arrived in New York on March 28th. Okun did not attempt to reject this shipment upon delivery in New York, nor did it furnish any written notice of a price dispute. Okun did, however, furnish Six L's a copy of the March 28 U.S.D.A. inspection report. The parties became involved in a separate dispute in late March when Sutliff claims he purchased a second load of tomatoes from Weisinger which he intended to leave in the gas room for further ripening. When he attempted to take delivery, Petitioner refused claiming no promise of sale or contract had been made. Sutliff's diary and broker's memorandum indicate the purchase was made. However, no signed agreement was produced and Six L's denied the purported sale by telegrams on March 26 and March 31, 1980. Further testimony surrounding the two disputes was given by both parties regarding their face to face end telephone conversations. Their recollections of these conversations were self-serving and conflicting, and are thus assigned no evidentiary weight.
The Issue The issue presented for decision herein is whether or not the Petitioner is entitled to an award of $11,952 for payment of a shipment of tomatoes made to Respondent, Georgia Tomato Company, Inc.
Findings Of Fact Based upon my observation of the witnesses and their demeanor while testifying, documentary evidence received and the entire record compiled herein, including the proposed ore tenus requests by Petitioner's counsel, I hereby make the following relevant factual findings. Petitioner, Corky Foods Corporation, is a diversified agri-business company engaged in, among other things, the sale of produce from one of its warehouses in Boynton Beach, Florida. On January 21, 1985, Pat Adams, a broker for Adams brokerage company in Bonita Springs, Florida, placed an order with Petitioner's salesman, Daniel Garcia, for a load of tomatoes from Georgia Tomato Company. The tomatoes were sold to Respondent, Georgia Tomato Company, on January 21, 1985. The invoice of these products (No. 18917) was dated January 23, 1985 and contained a total of 1,440 boxes. Respondent was allowed a $1 credit under the market price which amount reflects the amount of the initial claim by Petitioner against Respondent, Georgia Tomato Company; i.e., $25,560 less the credit of $1,440 for a total claim of $24,120. During this period of time, there was a freeze in South Florida which occurred on January 20, 1985 and the price of produce dropped substantially for products picked after January 20, 1985. The market value for tomatoes picked on January 19, 1985 was as follows: 5 x 6 #1 @ $18.00 6 x 6 #1 @ $16.00 6 x 7 #1 @ $14.00 This amount, less the $1 credit given to Respondent, Georgia Tomato Company, by Petitioner represents the amount initially claimed by Petitioner; i.e., $24,120. Respondent, Georgia Tomato Company, failed to pay Petitioner's invoiced amount which resulted in a complaint being filed by Petitioner against Respondent, Georgia Tomato Company, on March 4, 1985. Once that complaint was filed, Respondent, Georgia Tomato Company, tendered to Petitioner an amount of $12,168 which reduced the complaint by that amount leaving a balance now due and owing Petitioner of $11,952 based on its amended claim filed herein dated April 24, 1985. Respondent, Georgia Tomato Company, contends that it was overcharged on the amount of this shipment of tomatoes and attempted to substantiate its position by showing several invoices for tomatoes that it purchased subsequent to January 21, 1985. Daniel Garcia, Petitioner's vice-president in charge of marketing, determined the market price for the tomatoes shipped to Respondent, Georgia Tomato Company, on January 21, 1985. In doing so, he called brokerage houses in Homestead, Bonita Springs, and other brokers, including Pat Adams, the broker who purchased the tomatoes here in question on behalf of Adams Brokerage House, and established the market price as per the invoice sent to Respondent, Georgia Tomato Company. In addition, Mr. Garcia referred to the Southeastern Fruit and Vegetable Report, Volume 30, No. 17, which is a guide to the pricing information for fruit and vegetables in the southeast and which is relied upon to ascertain fruit and vegetable prices in this area. (Petitioner's Exhibit 1) This data supports Petitioner's claim for the amount invoiced to Respondent, Georgia Tomato Company. Respondent, Georgia Tomato Company, did not dispute the quality of the tomatoes shipped by the Petitioner. Respondent offered no other defenses against the amount claimed by Petitioner. Based thereon, it is herein concluded that the Petitioner is entitled to an award of the amount in its amended claim of $11,952.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that the Respondent, Georgia Tomato Company, Inc., be ordered to pay Petitioner, Corky Foods Corporation, the amount of $11,952 as set forth in its amended complaint filed herein dated April 24, 1985, within fifteen (15) days of the date of entry of the Final Order by the Department of Agriculture and Consumer Services, Bureau of License and Bond. DONE and ORDERED this 9th day of October, 1985, in Tallahassee, Florida. JAMES E. BRADWELL, 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 9th day of October, 1985. COPIES FURNISHED: Roger C. Lambert, Esquire 250 South County Road, Suite 201 West Palm Beach, Florida 33480 Glenn Vaughn, General Manager Georgia Tomato Company, Inc. Building F State Farmers Market Forest Park, Georgia 30050 Joe Kight, Chief Bureau of License & Bond Department of Agriculture and Consumer Services Mayo Building, Room 418 Tallahassee, Florida 32301 Continental Insurance Company Legal Section (License & Bond) 80 Maiden Lane New York, New York Robert Chastain, Esquire Department of Agriculture and Consumer Services Mayo Building Tallahassee, Florida 32301 Doyle Conner Commissioner Department of Agriculture The Capitol Tallahassee, Florida 32301
Findings Of Fact On February 23 and April 19, 1985, Respondent purchased woody ornamental plants from Pleasant View Nursery for a total purchase price of $650.50. The only payment on this account made by Respondent was $100 on November 15, 1985, leaving a balance due of $550.50. On February 23 and March 16, 1985, Respondent purchased citrus trees from Hillsborough Wholesale Nursery for a total purchase price of $720.90. The only payment on this account made by Respondent was $150, leaving a balance due of $570.90. Arthur A. Yambor, Respondent's President, is a licensed dealer in agricultural products under the provisions of Sections 604.15 - 604.30, F.S., and is bonded through United States Fidelity and Guaranty Company, Co- Respondent, as required by Section 604.19. Petitioners filed their complaints concerning this matter with the Department of Agriculture within nine months from the date of sale. Payment in full for the sales in question was to have been made within thirty days of the date of each sale. Respondent admits that the sales were made, and that Respondent did receive the agricultural products from Petitioner, for which these claims are made. However, Arthur A. Yambor testified that Respondent has not made full payment on these accounts because he believes the citrus trees purchased from Hillsborough Wholesale Nursery were infected with citrus canker which resulted in these, as well as other trees in his nursery, having to be destroyed. He has refused to make further payment to Petitioners due to the financial loss he sustained as a result of, what he believes to have been, infected trees he received from Hillsborough Wholesale Nursery. However, no proof was offered on behalf of Respondent that, in fact, trees purchased from Hillsborough Wholesale Nursery were infected. While Respondent did receive citrus canker compensation, there is no evidence that the canker resulted from citrus trees purchased from Hillsborough Wholesale Nursery.
Recommendation Based upon the foregoing, it is recommended that the Department of Agriculture enter a Final Order requiring Respondent to make full payment on the remaining indebtedness claimed by Petitioners. DONE and ENTERED this 9th day of May, 1996 in Tallahassee, Florida. DONALD D. CONN, 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 9th day of May, 1986. COPIES FURNISHED: Douglas A. Holmberg, President Pleasant View Nursery & Hillsborough Wholesale Nursery 1321 N. Valrico Road Valrico, Florida 33594 Paul B. Boswell, Manager 1321 N. Valrico Road Valrico, Florida 33594 Arthur A. Yambor, President Shelton's of Brandon, Inc. 1351 W. Brandon Boulevard Brandon, Florida 33511 United States Fidelity and Guaranty Company Post Office Box 1138 Baltimore, Maryland 21203 Joe Kight, Chief Bureau of License and Bond Room 418, Mayo Building Tallahassee, Florida 32301 Robert A. Chastain, Esquire Department of Agriculture and Consumer Services Mayo Building Tallahassee, Florida 32301 Honorable Doyle Conner Commissioner of Agriculture The Capitol Tallahassee, Florida 32301
The Issue Whether Respondent is indebted to Petitioners for agricultural products and, if so, in what amount?
Findings Of Fact Based upon the evidence adduced at hearing, and the record as a whole, the following Findings of Fact are made: The Parties Petitioners are producers and sellers of tomatoes. They own and operate Sunfresh Farms in Florida City, Florida. Respondent is a dealer in agricultural products. The Controversy The instant case involves two separate transactions involving the sale of tomatoes pursuant to verbal agreements between Petitioners (as the sellers) and Respondent (as the buyer). Both transactions occurred in January of 1995. The First Transaction (Petitioners' Invoice Number 5270) Under the terms of the first of these two verbal agreements (First Agreement), Respondent agreed to purchase from Petitioners, and Petitioners agreed to sell to Respondent (FOB), 96 boxes of cherry tomatoes for $12.65 a box (which was the market price at the time). In accordance with the terms of the First Agreement, Petitioners delivered 96 boxes of cherry tomatoes to Respondent (at Petitioners' loading dock) on January 23, 1995. Respondent accepted the delivery. Respondent sold these 96 boxes of cherry tomatoes to a local produce house, which subsequently sold the tomatoes to another local produce house. The tomatoes were eventually sold to a company in Grand Rapids, Michigan. On January 28, 1995, five days after Petitioners had delivered the 96 boxes of cherry tomatoes to Respondent, the tomatoes were inspected in Grand Rapids, Michigan. According to the inspection certificate, the inspection revealed: "Decay (3 to 28 percent)(mostly early, some advanced stages);" "Checksum;" and "Average approximately 85 percent light red to red." Petitioners have yet to be paid any of $1,214.40 Respondent owes them (under the terms of the First Agreement) for the 96 boxes of cherry tomatoes they delivered to Respondent in accordance with the terms of the agreement. The Second Transaction (Petitioners' Invoice Number 5299) Under the terms of the second verbal agreement at issue in the instant case (Second Agreement), Respondent agreed to purchase from Petitioners, and Petitioners agreed to sell to Respondent (FOB), 132 boxes of ("no grade") cherry tomatoes for $12.65 a box. In accordance with the terms of the Second Agreement, Petitioners delivered 132 boxes of cherry tomatoes to Respondent (at Petitioners' loading dock) on January 27, 1995. Respondent accepted the delivery. Respondent sold 84 of these 132 boxes of cherry tomatoes to a Florida produce house, which subsequently sold the tomatoes to a company in Houston, Texas. These 84 boxes of cherry tomatoes were inspected in Houston, Texas, on January 31, 1995, four days after Petitioners had delivered them to Respondent. The defects found during the inspection were noted on the inspection certificate. Petitioners have yet to be paid in full for the 132 boxes of cherry tomatoes they delivered to Respondent in accordance with the terms of the Second Agreement. Respondent tendered payment (in the form of a check) in the amount of $811.20, but Petitioners refused to accept such payment because it did not represent the full amount ($1,669.80) Respondent owed them (under the terms of the Second Agreement) for these cherry tomatoes. (Although they have not endorsed or cashed the check, Petitioners are still holding it in their possession.)
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that the Department enter a final order (1) finding that Respondent is indebted to Petitioners in the amount of $2,884.20, (2) directing Respondent to make payment to Petitioners in the amount of $2,884.20 within 15 days following the issuance of the order, (3) indicating that the $811.20 check that was previously tendered to Petitioners by Respondent (and is still in Petitioners' possession) will be considered partial payment of this $2,884.20 indebtedness, if Respondent advises Petitioners, in writing, that it desires the check to be used for such purpose and if it provides Petitioners written assurance that the check is still a valid negotiable instrument; and (4) announcing that if payment in full of this $2,884.20 indebtedness is not timely made, the Department will seek recovery from the Farm Bureau, Respondent's surety. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 2nd day of February, 1996. STUART M. LERNER, 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 2nd day of February, 1996.
The Issue The issue presented is whether Respondents Harbor Island Citrus, Inc., and Fidelity & Deposit Company of Maryland are indebted to Petitioner Rio Indio Fruit Company in the amount of $80,684.
Findings Of Fact Petitioner Rio Indio Fruit Company operates a citrus packinghouse located in St. Lucie County, Florida. Respondent Harbor Island Citrus, Inc., operates a citrus packinghouse in Indian River County, Florida. On approximately November 20, 1999, Albert Valdes from Harbor Island contacted Ralph Viamontes from Rio Indio to ascertain if Rio Indio might have a source that Harbor Island could use to obtain colored grapefruit for Harbor Island's annual fund-raising program. It was the industry practice, and Harbor Island's practice, for the fund-raising program to run from late-November through mid-December. During that time period, students in the north sell the fruit to raise money for their projects. The fruit used in such a fund-raising program can be a quality inferior to the quality demanded by the Japanese market, the primary market for Harbor's Island's citrus. Viamontes told Valdes he would see if he could find a grower with colored grapefruit suitable for Harbor Island's fund-raising program. Viamontes telephoned Valdes the following day and said he had located a grower. On that day or possibly the following day Valdes and two other Harbor Island employees, Dennis Downs and James Morris, met Viamontes at the Rio Indio facility. The four men drove in Viamontes' vehicle to the Sorge VII grove in Martin County to look at the grove's colored grapefruit. The amount of fruit in the grove was much larger than Harbor Island needed to fulfill its fund-raising program commitment. Viamontes estimated that the grove contained the equivalent of 30,000 boxes of colored grapefruit. Valdes told Viamontes that Harbor Island might need 18,000 to 20,000 boxes of the grapefruit for its fund-raising program. Viamontes told the Harbor Island employees that they could still make a deal for the grapefruit in the grove because since he had his own packing house, he would take the fruit that Harbor Island did not need. The men discussed that Harbor Island could take 2/3 of the colored grapefruit in the grove, and Rio Indio could take 1/3. They further discussed that the manager of Sorge VII wanted $5.50 a box for the fruit, that Viamontes would contract to take all the fruit in the grove, that Harbor Island would pay Viamontes $5.50 a box for the fruit Harbor Island took, and that Viamontes would pay the grower. James Morris from Harbor Island specifically asked Viamontes what would happen if Harbor Island wanted less than 18,000 to 20,000 boxes. Viamontes told the Harbor Island employees that there would be no problem if Harbor Island took less fruit because Viamontes would take whatever was left after Harbor Island took what it wanted. Valdes consulted with Donald Groves, Jr., the owner of Harbor Island to verify that Harbor Island would make the arrangement suggested by Viamontes, and Groves approved the arrangement. Thereafter, Viamontes entered into a written contact with the manager of Sorge VII to purchase all of the fruit for $5.50 a box, and that written contract included deadlines for 20,000 boxes of fruit to be picked by December 31, 1999, and the remainder to be picked by the end of February 2000. Rather than the 30,000 field boxes that Viamontes had estimated the grove contained, the grove contained substantially more grapefruit than Viamontes estimated. The record in this cause suggests that the grove may have contained as many as 43,762 boxes of colored grapefruit. In accordance with its understanding of the arrangement with Viamontes, Harbor Island began harvesting colored grapefruit from the Sorge VII grove on November 26, 1999, and completed all picking at the grove on December 8, 1999. During that time Harbor Island picked 9,000 boxes of colored grapefruit for which it was obligated to pay Viamontes $5.50 per box. Harbor Island paid Viamontes in full for the fruit it took. During the time Harbor Island was at the Sorge VII grove picking colored grapefruit, Rio Indio's crews were there picking grapefruit. Rio Indio's crews also picked fruit at the grove during the months after Harbor Island completed its picking. In addition to Rio Indio's crews knowing that Harbor Island had completed its picking, James Morris specifically told Viamontes that Harbor Island had taken all the fruit it wanted from the Sorge VII grove as of December 8, 1999. During the months of December 1999, January 2000, February 2000, and the first half of March 2000, Viamontes spoke with Valdes of Harbor Island several times a day to check on the status of other unrelated fruit being packed and sold by Harbor Island for Viamontes. In addition, Viamontes was present at the Harbor Island packinghouse on a weekly basis to pick up checks due to him or Rio Indio for the unrelated fruit being sold by Harbor Island for Viamontes. Yet, at no time between December 8, 1999, and the middle of March 2000 did Viamontes tell anyone that he believed Harbor Island had an obligation to harvest additional fruit from the Sorge VII grove. Rather, in late January 2000 Viamontes asked Valdes if Harbor Island were going to take any more fruit from Sorge VII. When Valdes said the fund-raising program was over, Viamontes told Valdes not to worry because Rio Indio would take the rest. Further, on or about March 1, 2000, during one of Viamontes' visits to the Harbor Island packinghouse, Dennis Downs of Harbor Island asked Viamontes how the harvesting in Sorge VII was proceeding. Viamontes responded that Rio Indio was harvesting the remaining colored grapefruit and that Harbor Island need not be concerned about any further harvesting at the Sorge VII grove. On or about March 15, 2000, the price and demand for colored grapefruit suddenly and dramatically dropped due to an oversupply of fruit for which the industry was not prepared. After the dramatic decline, Viamontes contacted Valdes from Harbor Island and inquired whether Harbor Island was going to pick any additional fruit at the Sorge VII grove. Valdes responded that Harbor Island had no obligation to pick any additional colored grapefruit from the Sorge VII grove based upon the agreements between Harbor Island and Rio Indio, specifically, Viamontes' continued representations that Harbor Island should not be concerned about picking any additional colored grapefruit from the grove because Rio Indio would take the remainder. In July 2000 Viamontes appeared at Harbor Island and advised Donald Groves, for the first time, that Harbor Island owed Rio Indio the amount of $80,684 for an additional 20,171 boxes of colored grapefruit from the Sorge VII grove, which Viamontes now contends Harbor Island should have harvested. Rio Indio claims that it suffered a loss of $4 per box for that additional fruit. The documentation presented by Rio Indio to support its demand is questionable and does not substantiate Rio Indio's claimed damages. First, the majority of the documents submitted by Rio Indio indicate that the fruit described therein was from a grove in St. Lucie County, and Sorge VII is in Martin County. Second, the majority of the documents indicate that the fruit described therein was from packinghouse eliminations although Viamontes alleges that the fruit went directly from the field to the cannery without going through a packinghouse. Third, the cannery records reflect that the "pound solids per box" are significantly less than what would be expected from fruit coming from the Sorge VII grove based upon the grove's historical production.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered finding that Harbor Island Citrus, Inc., is not indebted to Rio Indio Fruit Company and dismissing the Complaint filed by Rio Indio Fruit Company in this cause. DONE AND ENTERED this 12th day of December, 2001, in Tallahassee, Leon County, Florida. LINDA M. RIGOT 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 12th day of December, 2001. COPIES FURNISHED: Theodore W. Herzog, Esquire 1101 Simonton Street Key West, Florida 33040 Fred L. Kretschmer, Jr., Esquire Moss, Henderson, Blanton, Lanier, Kretschmer & Murphy, P.A. 817 Beachland Boulevard Post Office Box 3406 Vero Beach, Florida 32964-3406 Kathy Elves The Fidelity and Deposit Companies 300 Saint Paul Place Post Office Box 87 Baltimore, Maryland 21203 Brenda D. Hyatt, Bureau Chief Department of Agriculture and Consumer Services 500 Third Street, Northwest Post Office Box 1072 Winter Haven, Florida 33882-1072 Brenda D. Hyatt, Bureau Chief Department of Agriculture and Consumer Services 541 East Tennessee Street India Building Tallahassee, Florida 32308 Honorable Charles H. Bronson Commissioner of Agriculture Department of Agriculture and Consumer Services The Capitol, Plaza Level 10 Tallahassee, Florida 32399-0810 Richard D. Tritschler, General Counsel Department of Agriculture and Consumer Services The Capitol, Plaza Level 10 Tallahassee, Florida 32399-0810
Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the hearing, the following facts are found. At all times pertinent to these proceedings, respondent MacDonald was a licensed dealer in agricultural products, licensed by the State of Florida, and bonded by Sentry Indemnity Company in the sum of $10,000.00. At all times pertinent to these proceedings, petitioner was a producer of agricultural products produced in the State of Florida. At all times pertinent to these proceedings, respondent Sentry Indemnity Company was authorized to transact business in the State of Florida. At all times pertinent to these proceedings, Rosario Strano was president of Homestead Tomato Packing Company, Inc. On December 30, 1983, petitioner at respondent MacDonald's request, loaded 704-20 pound flats of Poppas Famous tomatoes, size "5 x 6", and 88-20 pound flats of Poppas Famous tomatoes, size "6 x 7", onto the truck of respondent MacDonald's customer, V. F. Lanasa, Inc., and loaded 88-20 pound flats of Poppas Famous, size "6 x 6", tomatoes on respondent MacDonald's truck. Respondent MacDonald was billed $7.50, $6.50, and $5.50 per flat for size "5 x 6", "6 x 6", and "6 x 7", respectively, plus $132.00 for palletizing, for a total invoice of $6,1460.00. All tomatoes (880 flats) loaded by petitioner on respondent MacDonald's truck and the truck of V. F. Lanasa, Inc. had been inspected by a federal inspector and graded as "U. S. COMB." prior to loading and each flat was stamped as having been inspected. Upon the tomatoes arriving at the warehouse of V. F. Lanasa, Inc., in Richmond, Virginia, they were inspected by USDA Inspector C. E. Short on January 3, 1984. The inspection report indicated some damage. Respondent MacDonald contacted petitioner's business manager, Phyllis Ernst and she, without seeing the inspection report, but relying on respondent MacDonald as to its contents, agreed with respondent MacDonald to a reduction of $1.50 per flat on all sizes. This reduced the original invoice to $5,118.00. On March 12, 1984, respondent MacDonald paid petitioner $3,344.00 leaving a balance of $1,804.00 which respondent MacDonald has refused to pay.
Recommendation Based upon the Findings of Fact and Conclusion of Law recited herein, it is RECOMMENDED that respondent MacDonald Import Company, Inc. be ordered to pay to the petitioner, Homestead Tomato Packing Co., Inc., the sum of $1,804.00. It is further RECOMMENDED that if respondent, MacDonald Import Company, Inc. fails to timely pay the petitioner as ordered, then respondent, Sentry Indemnity Company be ordered to pay the Department as required by Section 604.21, Florida Statutes (1983) and that the Department reimburse the petitioner in accordance with Section 604.21, Florida Statutes (1983). DONE and ORDERED this 10th day of May, 1985, in Tallahassee, Leon County, Florida. WILLIAM R. CAVE 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 10th day of May, 1985. COPIES FURNISHED: Rosario Strano, President Homestead Tomato Packing Company, Inc. P. O. Box 3064 Florida City, Florida 33030 Doyle Conner, Commissioner Department of Agriculture and Consumer Services The Capitol Tallahassee, Florida 32301 Robert Chastain, General Counsel Department of Agriculture and Consumer Services Mayo Building, Room 513 Tallahassee, Florida 32301 Mr. Glenn Bissett Room 418 Mayo Building Tallahassee, Florida 32301 Homestead Packing Company, Inc. Post Office Box 3064 P. O. Box 3064 Florida City, FL MacDonald Import Company, Inc. P. O. Box 97134 Miami, FL
