Findings Of Fact The Petitioner, Triple M Packing, Inc. (Triple M) is in the business of selling produce, particularly tomatoes from its principal business address of Post Office Box 1358, Quincy, Florida. The Respondent, Fair Chester Tomato Packers, Inc. (Fair Chester), is primarily engaged in the business of packaging, distributing and brokering tomatoes in the New York City metropolitan area. It purchases produce from various sellers around the country in tomato-producing areas for resale at markets in the New York City area. Since it is a licensed agricultural dealer, the Respondent is required under the pertinent provisions of Chapter 604, Florida Statutes, to file a surety bond with the Department of Agriculture and Consumer Services (Department), designed to guarantee payment of any indebtedness to persons selling agricultural products to the bonded dealer to whom the dealer fails to make accounting and payment. Fair Chester has thus obtained a 50,000 surety bond which is underwritten by its Co-Respondent, Hartford Accident and Indemnity Company (Hartford). During the 1984 growing season, the Petitioner sold certain shipments of tomatoes to the Respondent for a price of $12,276. Thereafter, curing middle-to-late 1984, the Respondent Fair Chester, found itself in straitened financial circumstances such that it was unable to pay its various trade creditors, including the Petitioner. In view of this, various creditors at the behest of a lawyer retained by Fair Chester, eventually entered into a composition agreement, whereby the unsecured trade creditors agreed to settle, release and discharge in full their claims against Fair Chester on the condition that each creditor signing that agreement be paid thirty-three and one-third percent of its claim. It was determined that the composition agreement would be operative if the trade creditors representing 95 percent or more in dollar amount of all unsecured debts accepted the terms and provisions of that composition agreement on or before November 13, 1984. All the Respondent's unsecured trade creditors were contacted and ultimately those representing more than 95 percent of the outstanding creditor claims against Respondent accepted the terms and provisions of the composition agreement by the deadline. A document indicating acceptance by the Petitioner was signed by one Robert Elliott, purportedly on behalf of the Petitioner, Triple M Packing, Inc. In this connection, by letter of November 13, 1984 (Respondent's Exhibit 4) Attorney Howard of the firm of Glass and Howard, representing the Respondent, wrote each trade creditor advising them that the required acceptance by 95 percent of the creditors had been achieved, including the acceptance of the agreement signed and stamped "received November 8, 1984" by Robert Elliott, sales manager of Triple M. In conjunction with its letter of November 13, 1984, Glass and Howard transmitted Fair Chester's check for one-third of the indebtedness due Triple M or $4,092. The Petitioner's principal officer, its president, Kent Manley, who testified at hearing, acknowledged that he received that letter and check, but he retained it without depositing it or otherwise negotiating it. In the meantime, on October 29, 1984 a complaint was executed and filed by Triple M Packing, Inc. by its president, Kent Manley, alleging that $12,276 worth of tomatoes had been sold to Respondent on June 13, 1984 and that payment had not been received. The purported acceptance of the composition agreement executed by Robert Elliott, sales manager, was not executed until November 8, 1984 and the check for $4,092 in partial payment of the Triple M claim was not posted until November 13, 1984. Mr. Manley's testimony was unrefuted and established that indeed Mr. Elliott was a commissioned salesman for Triple M, was not an officer or director of the company and had no authority to bind the company by his execution of the composition of creditors agreement. Mr. Manley acted in a manner consistent with Elliott's status as a commissioned salesman without authority to bind the Petitioner corporation since, upon his receipt of the "one- third settlement" check with its accompanying letter, he did not negotiate it, but rather pursued his complaint before the Department. In fact, in response to the Department's letter of December 20, 1984 inquiring why the complaint was being prosecuted in view of the purported settlement agreement, Mr. Manley on behalf of Triple M Packing, Inc. by letter of December 28, 1984, responded to Mr. Bissett, of the Department, that he continued to hold the check and was not accepting it as a final settlement. Thus, in view of the fact that the complaint was filed and served before notice that 95 percent of the creditors had entered into the composition agreement and never withdrawn, in view of the fact that on the face of the complaint Robert C. Elliott is represented as a salesman indeed, for an entity known as "Garguilo, Inc.," and in view of the fact that Mr. Manley as president of Triple M, retained the check without negotiating it and availing himself of its proceeds, rather indicating to the Department his wish to pursue the complaint without accepting the check as settlement, it has not been established that the Respondent, Fair Chester, was ever the recipient of any representation by Manley, or any other officer or director of the Petitioner corporation, that it would accept and enter into the above-referenced composition of creditors agreement. It was not proven that Triple M Packing, Inc. nor Mr. Manley or any other officer and director either signed or executed the composition agreement or authorized its execution by Robert C. Elliott. Respondent's position that Mr. Manley and Triple M acquiesced in the execution of the settlement agreement by Elliott and the payment of the one-third settlement amount by the subject check has not been established, especially in view of the fact that the complaint was filed after Attorney Howard notified Triple M of Respondent's settlement offer and prior to notice to Triple M that the settlement agreement had been consummated by 95 percent of the creditors and prior to the sending of the subject check to Triple M. Mr. Manley then within a reasonable time thereafter, on December 28, 1984, affirmed his earlier position that the entire indebtedness was due and that the settlement had not been accepted.
Recommendation Having considered the foregoing Findings of Fact and Conclusions of Law, the candor and demeanor of the witnesses, the evidence of record and the pleadings and arguments of the parties, it is, therefore RECOMMENDED: That Fair Chester Tomato Packers, Inc. pay Triple M Packing Company, Inc. $12,276. In the event that principal fails to or is unable to pay that indebtedness, Hartford Accident and Indemnity Company should pay that amount out of the surety bond posted with the Department of Agriculture and Consumer Services. DONE and ENTERED this 16th day of September, 1985 in Tallahassee, Florida. Hearings Hearings 1985. COPIES FURNISHED: Mr. Kent Manley, Jr. Post Office Box 1358 Quincy, Florida 32351 P. MICHAEL RUFF Hearing Officer Division of Administrative The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative this 16th day of September, Arthur Slavin, Esquire BLUM, HAIMOFF, GERSEN, LIPSON, GARLEY & NIEDERGANG 270 Madison Avenue New York, New York 10016 Honorable Doyle Conner Commissioner of Agriculture The Capitol Tallahassee, Florida 32301 Mr. Joe W. Kight Bureau of Licensing & Bond Department of Agriculture Mayo Building Tallahassee, Florida 32301 =========================================================== ======
Findings Of Fact Upon consideration of the oral testimony and the documentary evidence adduced at the hearing, the following relevant facts are found: At all times pertinent to this proceeding, Petitioner, Carl Hiers and Rachel Hiers were "producers" of agricultural products in the State of Florida as defined in Section 604.15(5), Florida Statutes. At all times pertinent to this proceeding, Respondent, Jay Nichols, Inc., (Nichols was a licensed "dealer in agricultural products" as defined in Section 604.15(1), Florida Statutes, issued license number 1547 by the Department, and bonded by the U.S. Fidelity & Guaranty Co. (Fidelity for the sum of $50,000.00, bond number 790103-10-115-88-1, with an effective date of March 22, 1988 and a termination date of March 22, 1989. At all times pertinent to this proceeding, Nichols was authorized to do business in the State of Florida. The Complaint filed by Petitioners was timely in accordance with Section 604.21(1), Florida Statutes. Prior to Petitioners selling or delivering any watermelons (melons) to Nichols, Petitioners and Nichols agreed verbally that: (a) Petitioners would sell Nichols melons on a per pound basis at a price to be quoted by Nichols on the day of shipment; (b) Petitioners would harvest and load the melons on trucks furnished by Nichols; (c) a weight ticket with the weight of the truck before and after loading would be furnished to Petitioners; (d) Nichols or its agent in the field would have the authority to reject melons at the place of shipment (loading) which did not neet the guality or grade contracted for by Nichols; (e) the melons were to be of U.S. No. 1 grade; and, (f) settlement was to be made within a reasonable time after shipment. Although Nichols assisted Petitioners in obtaining the crew to harvest and load the melons, Petitioners had authority over the crew and was responsible for paying the crew. On a daily basis, L. L. Hiers, would contact Nichols and obtain the price being paid for melons that day. The price was marked in a field book with the net weight of each load. Nichols contends that the price quoted each day was the general price melons were bringing on the market that day. The price to be paid Petitioners was the price Nichols received for the melons at their destination minus 1 cent per pound commission for Nichols, taking into consideration freight, if any. Nichols was not acting as Petitioners' agent in the sale of the melons for the account of the Petitioners on a net return basis nor was Nichols acting as a negotiating broker between the Petitioners and the buyer. Nichols did not make the type of accountiig to Petitioners as required by section 604.22, Florida Statutes, had Nichols been Petitioners' agent. The prices quoted by Nichols to L. L. Hiers each day was the agreed upon price to be paid for melons shipped that day subject to any adjustment for failure of the melons to meet the quality or grade contracted for by Nichols. On June 11, 1988, L. L. Hiers contacted Nichols and was informed that the price to be paid for melons shipped that day was 6 cents per pound. This price was recorded in the field book with the net weight of the load of melons shipped on June 11, 1988. Only a partial load, no. 10896 weighing 11,420 pounds for which Nichols paid 5 cents per pound, is in dispute. The amount in dispute is $114.70. On June 13, 1988, L. L. Hiers contacted Nichols and was informed that the price to be paid for melons shipped that day was 5 cents per pound. This price was recorded in the field book with the net weight of 3 loads of melons shipped that day that are in dispute. The 3 loads in dispute are as follows: (a) Load No. 10906, weighing 48,620 pounds for which Nichols paid 4 cents per pound; (b) Load No. 10904, weighing 50,660 pounds for which Nichols paid 4 cents per pound, and; (c) Load No. 10902, weighing 45,030 pounds for which Nichols paid 4 cents per pound. The amount in dispute is as follows: (a) Load No. 10906, $486.20; (b) Load No. 10904, $253.30; and (c) Load No. 10902, $450.30. On June 20, 1988, L. L. Hiers contacted Nichols and was informed that the price to be paid for melons shipped that day was 5 cents per pound. This price was recorded in the field book with the weight of 52,250 for which Nichols paid 2 cents per pound. The amount in dispute is $1,567.50. On June 23, 1988, L. L. Hiers contacted Nichols and was informed that the price to be paid for melons shipped that day was 5.25 cents per pound. This price is 0.25 cent per pound less than that quoted on the same day in Case No. 88-5632A which is apparently due to the variety, Crimson Sweet, as opposed to Charmston Grey, since the average size of the melons shipped that day was within 4 ounces. This price was recorded in the field book with the load of melons shipped that day weighing 44,140 pounds for which Nichols paid 5 cents per pound. The load in dispute is load no. 11251, and the amount in dispute is $110.35. The total amount in dispute is $2,982.35. Load no. 11090 was federally inspected and failed to meet U.S. No. 1 grade on account of condition, not quality requirements. Therefore, the price of 2 cents per pound is a reasonable price and within the terms of the verbal contract. On all other loads, Nichols contends that the quality was low resulting in a lesser price than that agreed upon. However, Nichols failed to present sufficient evidence to support this contention. Nichols has refused to pay Petitioners the difference between the agreed upon price for load nos. 10896, 10902, 10904, 10906, 11090, and 11251, and the price paid by Nichols as indicated in the settlement sheet. The total difference is $2,982.35. However, subtracting $1,567.50, the difference in load no. 11090 that was rejected, from the total differnce results in a net difference of $1,414,85 and the amount owed to Petitioners.
Recommendation Upon cnsideration of the foregoing Findings of Fact and Conclusions of Law, the evidence of record and the candor and demeanor of the witnesses, it is therefore, RECOMMENDED that Respondent, Jay Nichols, Inc., be ordered to pay the Petitioners, Carl Hiers and Rachel Hiers, the sum of $1,414.85. It is further RECOMMENDED that if Respondent, Jay Nichols, Inc., fails to timely pay Petitioners, Carl Hiers and Rachel Hiers, as ordered, then Respondent, U.S. Fidelity & Guaranty Co., be ordered to pay the Department as required by Section 604.21, Florida Statutes, and that the Department reimburse the Petitioners in accordance with Section 604.21, Florida Statutes. RESPECTFULLY SUBMITTED AND ENTERED this 20th day of March, 1989, in Tallahassee, Leon County, Florida. WILLIAM R. CAVE 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 20th day of March, 1989. COPIES FURNISHED: Honorable Doyle Conner, Commissioner Mr. Carl Heirs Depaftment of Agriculture and Mrs. Rachel Hiers Consumer Service Route 5, Box 339 The Capitol Dunnellon, Florida 32630 Tallahassee, Florida 32301 Mallory Horne, Esquire Jay Nichols, Inc. Department of Agriculture and Post Office Box 1705 Consumer Services Lakeland, Florida 33802 513 Mayo Building Tallahassee, Florida 32399-0800 U.S. Fidelity & Guaranty Company Ben H. Pridgeon, Chief Post Office Box 1138 Bureau of License and Bond Baltimore, Maryland Mayo Building 21203 Tallahassee, FL 32399-0800
Findings Of Fact Based upon all of the evidence, the following findings of fact are determined: Petitioners, Mark K. Mast and Kirk E. Mast d/b/a Mast Farm, operate a sixty-acre potato farm on Cracker Swamp Road in or near East Palatka, Florida. The 1991 crop year was the first year in which the two brothers had operated their own farm. This activity was a part-time endeavor since the brothers worked full-time as logging contractors for Georgia Pacific Corporation. Respondent, G & G Sales Corporation, a Minnesota corporation licensed to do business in this state, is a dealer (broker) in agricultural products that purchases potatoes from growers throughout the country for resale to various potato chip companies. Its president and vice-president are Loren R. Girsbirger and George Wilkerson, respectively. As an agricultural dealer, respondent is required to obtain a license from and post a surety bond with the Department of Agriculture and Consumer Affairs (Department). In this case, the bond has been posted by respondent, St. Paul Fire & Marine Insurance Company. The amount of the bond is not of record. In order to start their farming operation, it was necessary for the Mast brothers to secure a loan from the North Florida Production Credit Association. That lending institution had a practice of requiring farmers to secure their loans with contracts for the sale of all or a portion of their crop. That is to say, the lender required a farmer to have a sales contract which equaled the amount of the loan. So that petitioners could meet this requirement, on January 29, 1991, the parties executed a contract wherein petitioners agreed to sell respondent 8,000 bags of Atlantic variety potatoes at an agreed upon price of $5.75 per bag, for a total price of $46,000. The lending institution then agreed to loan petitioners that amount of money. Although the brothers asked that respondent purchase more than 8,000 bags, respondent declined since it had only that contract amount (with chip companies) available. A copy of the contract has been received in evidence as joint exhibit The contract was drafted by respondent and it may be inferred from the evidence that it is a "standard" type of contract used by farmers and dealers in the potato business. The contract contained the following relevant conditions in paragraphs 4, 5 and 6: Buyer assumes that Seller will have sufficient amount of potatoes to cover all contracts, including open market sales. This contract does not restrict these open market sales, but Seller does protect Buyer's amount due. In the event of fire, unauthorized strikes, wars, transportation shortages, Acts of God, or events beyond the control of Seller or Buyer which prevent Seller or Buyer from performance in full or in part of the terms of this agreement, it is agreed that such failure to perform shall not be excused and shall not form the basis for any claim of damage or breach of contract. Seller agrees to seed sufficient acreage to cover the potatoes sold for delivery under this contract and other contracts to all purchasers with whom the Seller has contracted for the delivery of potatoes during the upcoming farm season. If, however, on account of shortages of crops not due to any act within the Seller's control or other causes beyond the control of the Seller, he is unable to deliver the full amount of potatoes called for in this contract, the Buyer will accept a prorated delivery with other buyers of the potatoes covered by similar contracts without any claim for damages against the Seller. Seller will grant Buyer all necessary rights to insure and verify that he is receiving his fair and just pro-rate share. Such rights to include, but not limited to, inspection of all records, books, field reports, shipments, etc. Burden of proof rests with Sellers. Finally, paragraph 11 of the contract provided in part that "the terms of this contract cannot be re-negotiated without the written consent of the Buyer and the Seller." Thus, under the terms of the contract, petitioners were obliged to "have sufficient amount of potatoes to cover all contracts". However, if an Act of God prevented the seller from "deliver(ing) the full amount of potatoes called for in (the) contract", the seller was excused from full performance and could prorate its crop. Under those circumstances, respondent was required to "accept a prorated delivery with other buyers of the potatoes covered by similar contracts." In this case, there were no other buyers of potatoes covered by similar contracts. Finally, except for changes approved in writing by both parties, the terms of the contract could not be changed. Petitioners planted their crop on February 2 and 10, 1991. At that time, the brothers hoped to harvest 16,000 bags of potatoes, or around 267 bags per acre. Although the average yield per acre for Atlantic type potatoes in the area had been between 250 and 270 bags, most growers assume a more conservative yield of around 200 bags per acre to insure that all contractual requirements can be met. Here, however, except for a contract with respondent, petitioners had no other contracts with other dealers or individuals. When the contract was signed in January, the brothers expected to sell the remainder of their crop to other buyers on the open market. In this regard, they entered into an agreement (presumably verbal) with their father, who had co-signed the bank note, to split the net proceeds on all sales over and above that required under the G & G Sales Corporation contract. This latter agreement with the father was not a "similar contract" within the meaning of paragraph 6 of the contract and thus the G & G Sales Corporation contract is found to be the only relevant contract for crop year 1991. On April 23, 1991, a severe thunderstorm swept through a part of Putnam County. The storm was accompanied by high winds and hail and followed a path which ran through the potato farm belt in East Palatka. The Circle S farm, which lies about one-half mile from petitioner's farm, was "devastated" by the storm. Petitioners' farm received high winds, heavy rains and some hail. The extent of damage caused by the storm to petitioners' farm is in dispute, but it is agreed that the storm diminished the size of the crop. As it turned out, petitioners dug only 8,802 bags of potatoes, which still exceeded the amount required under their only contract. After the storm struck, Mark Mast immediately contacted Wilkerson by telephone and advised him that the farm had been hit with hail and asked that Wilkerson and Girsbirger survey the damage. On April 24, 1991, Wilkerson and Girsbirger visited the farm and found it "very wet" and muddy but the leaves on the plants still intact. This level of damage was generally corroborated by various other witnesses. Although the above conditions were present at that time, it was still impossible then for anyone to forecast exactly how the storm impacted the volume and quality of petitioners' crop. Most potato farmers purchase crop insurance prior to each farming season. A farmer has the option of purchasing either 50%, 65% or 75% coverage, although 65% coverage is the most common. This means that a farmer must lose at least 50%, 35% or 25% of his crop due to weather or insects in order to file a claim. The amount of insurance is based on a function of the percent of crop the farmer wishes to insure times the value per hundred weight of the crop. For first year farmers, such as petitioners, the Federal Crop Insurance Corporation (FCIC) establishes a designated yield per acre which is based on FCIC's estimate, albeit conservative, of what the average yield should be. In the case of petitioners, who purchased 65% coverage, the FCIC (and insurer) set a designated yield of 184 bags per acre which meant petitioner would have a crop approximating 184 hundred weight per acre. Although petitioners had a crop insurance policy in 1991, they did not file a claim after the April 23 storm since they failed to meet the threshold requirements for coverage. Indeed, the local crop insurance agent visited the farm shortly after the storm and verified there was not enough damage to file a claim. However, he noted that there was excessive water for a few days and some of the leaves on the vines had holes caused by the hail. Between May 4 and 18, 1991, petitioners sold respondent nine loads of potatoes totaling 4,101 bags at a price of $5.75 per bag. During the period from April 30, 1991, through May 18, 1991, they sold ten other loads on the open market to two other buyers. The open market sales totaled 4,701.2 bags. Because potato prices had dramatically increased after the contract was executed, nine of these latter loads were sold at an open market price of $19 per bag while one was sold at a price of $18.50 per bag, for a total of $88,806. Petitioners contend respondent agreed that the above ten loads could be sold on the open market and thus it should not be heard now to complain that it was shorted on the contract. In this regard, the evidence shows that after the storm, which is the time period relevant to this contention, Wilkerson told Mark Mast that he had no problem with petitioners selling any extra potatoes on the open market as long as respondent received its 8,000 bags. Girsbirger also advised the Masts that it was okay to sell ten loads of potatoes on the open market if production was 200 bags per acre. However, he cautioned them to sell no more than four loads on the open market if the yield fell to 180 to 185 bags per acre since the remainder would be necessary to meet the terms of the contract. Thus, it is found that respondent did not agree to the sale of the ten loads on the open market if total production did not exceed 8,000 bags. Around May 3, 1991, Mark Mast approached Wilkerson and asked if respondent would renegotiate the contract price upward. Wilkerson declined to do so. On May 6, Mast sent Wilkerson a notice by registered mail advising him that due to the crop loss, which he estimated to be one-third of the crop, he intended to adjust the contract pursuant to paragraph 6 of the contract and supply only two-thirds of the 8,000 bags. This unilateral offer to modify the contract was never accepted by respondent, and in any event, petitioners failed to supply the amount offered in their May 6 letter. In all, respondent received only 51.3% of its contracted amount of 8,000 bags. Petitioners allocated respondent this amount on the theory they had originally planned to sell one-half of their total anticipated crop of 16,000 bags to respondent, that one-half of the anticipated crop was lost in the storm, and thus respondent should receive only one-half of the remaining crop, or around 4,000 bags. At hearing, petitioners defended this decision by treating the April 23 storm as an Act of God within the meaning of paragraph 6 of the contract. However, reliance on this provision was inappropriate since, despite the effects of the storm, petitioners could still deliver the full amount of potatoes called for in the contract. The testimony is in conflict as to whether petitioners offered respondent more than 4,101 bags during the harvest season. At various times, respondent was offered several "extra" loads at the market price of $19 per bag but declined since it still wanted the contract honored. According to petitioners, they were ready to load a truck on two occasions but respondent failed to send a truck. Respondent denies this assertion. In addition, petitioners claim that a truck arrived late one Sunday afternoon when their farm equipment was inoperable and thus they could not load any potatoes. Conversely, Wilkerson contended that Mark telephoned him on several occasions and told him not to send a truck because Mark was loading for "another contract". Accordingly, it is found that petitioners offered respondent only the 4,101 bags at the contract price but that additional loads were offered at the substantially higher open market price. After receiving the 4,101 bags, respondent presented petitioners a check dated June 17, 1991, in the amount of $4,777.92 as full payment for the 4,101 bags of potatoes. The check carried the notation "The undersigned, upon cashing check, accepts payment in full for attached invoices, with no recourse." It was never cashed by petitioners. Attached to the check was an invoice which calculated the $4,777.92 in the following manner. Respondent first calculated $23,598 by multiplying 4,101 bags times $5.75 per bag and then subtracted $82.08 for "Not Pat dues", an amount not explained but nonetheless unchallenged by petitioners. It then deducted $19,038 from that total for a net amount due of $4,777.92. The latter deduction of $19,038 represented a set-off for damages incurred by respondent in having to buy potatoes elsewhere by virtue of petitioners failing to supply the contracted amount of potatoes. It was calculated by assuming that petitioners would supply 2/3 (or 68%) of its commitment, or 5,440 bags. 1/ Since only 4,104 bags were delivered, this amounted to a shortage of 1,336 bags. Respondent represented, without contradiction, that it had to replace this shortage at the same price which petitioners received for non-contract sales on the open market. Respondent assumed that petitioners sold their potatoes at an open market price of $20, or $14.25 more than the contract price. Thus, it deducted 1,336 x $14.25, or $19,038 from the final payment. In actuality, petitioners sold the bulk of those potatoes at a price of $19 per bag. Thus, respondent's set-off should have been $17,702 rather than $19,038. This amount of set-off ($17,702) is deemed to be reasonable and should be subtracted from the amount owed by respondent to petitioners.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that a final order be entered by the Department of Agriculture and Consumer Services requiring respondent to pay petitioners $5,813.92 within thirty days of date of final order. Otherwise, the surety should be required to pay that amount. DONE and ENTERED this 21st day of May, 1992, in Tallahassee, Florida. DONALD R. ALEXANDER 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 21st day of May, 1992. 1/ For purposes of determining damages, respondent decided that petitioners were entitled to some relief under the contract due to the storm. Accordingly, respondent assumed that it would receive only two-thirds of the contract requirement. APPENDIX Petitioners: 1. Covered in the preliminary statement. 2. Accepted in finding of fact 2. 3-4. Accepted in finding of fact 1. 5. Accepted in finding of fact 2. 6. Accepted in finding of fact 3. 7-8. Accepted in finding of fact 4. 9. Accepted in finding of fact 3. 10. Accepted in finding of fact 5. Accepted in findings of fact 1 and 5. Accepted in finding of fact 6. 13-14. Accepted in finding of fact 7. Accepted in finding of fact 8. Rejected as being unnecessary. Partially accepted in finding of fact 10. The remainder has been rejected as being contrary to the more persuasive evidence. Partially accepted in findings of fact 11 and 12. Accepted in finding of fact 11. Accepted in finding of fact 9. 21-22. Accepted in finding of fact 14. Accepted in finding of fact 6. Rejected as being contrary to more persuasive evidence. Partially accepted in finding of fact 6 but this finding does not excuse performance under the contract. See finding of fact 12. Respondent: * Partially accepted in finding of fact 14. The remainder is covered in the preliminary statement. Accepted in finding of fact 1. Accepted in findings of fact 2 and 3. Accepted in finding of fact 4. Accepted in findings of fact 3 and 5. 6-8. Accepted in finding of fact 7. 9-10. Accepted in finding of fact 10. Accepted in finding of fact 7. Accepted in finding of fact 9. Accepted in finding of fact 14. * Respondent G & G Sales Corporation filed thirteen unnumbered paragraphs containing proposed findings of fact. The paragraphs have been numbered 1-13 by the undersigned for the purpose of making these rulings. COPIES FURNISHED: Joe C. Miller, II P. O. Box 803 Palatka, Florida 32178-0803 Ronald W. Brown, Esquire 66 Cuna Street, Suite B St. Augustine, Florida 32084 Honorable Bob Crawford Commissioner of Agriculture The Capitol, PL-10 Tallahassee, Florida 32399-0810 Brenda D. Hyatt, Chief Bureau of License & Bond 508 Mayo Building Tallahassee, Florida 32399-0800 Charles T. Shad, Esquire 601 Blackstone Building East Bay & Market Street Jacksonville, Florida 32202 (on behalf of St. Paul Fire and Marine Insurance Co.) Richard A. Tritschler, Esquire Department of Agriculture & Consumer Affairs The Capitol, PL-10 Tallahassee, Florida 32399-0810
Findings Of Fact Based upon the testimony of the witnesses and the documentary evidence received at the hearing, the following findings of fact are made: In January, 1990, the Respondent filed an application for credit with the Petitioner. The terms and conditions of the credit application provided: "All written 'Terms and Conditions of Sale' on invoices, statements, contracts or other written agreements must be observed and performed as stated." Further, the application provided: Payment of all amounts due shall be made not later than 30 days from the billing date. Amounts in default will be subject to a SERVICE CHARGE of 1 1/2 % per month (18 % Per Annum) on the unpaid balance. Failure to make payment within terms will result in cancellation of credit. Following acceptance of that application, Respondent sought to purchase sod from Petitioner's LaBelle sod farm. Invoices issued by Petitioner to Respondent at the time of the delivery of the sod provided that the amounts owed would be payable upon receipt of invoice. Further, the printed invoice required the purchaser to make claims within 24 hours of delivery or pick up. The invoices reiterated the 18 percent service charge for past due accounts. From December, 1990, through January 17, 1991, Respondent purchased and accepted in excess of $45,000 worth of sod from the Petitioner. The invoices for those purchases are identified in this record as Petitioner's exhibit 2. From January 30, 1991 until March 4, 1991, Respondent purchased and accepted $4,664.00 worth of sod from the Petitioner. The invoices for those purchases are identified in the record as Petitioner's exhibit 3. In February, 1991, when the Petitioner became concerned about nonpayment for the amounts claimed, contact with the Respondent was made for the purpose of resolving the matter. When those efforts failed to secure payment, the Petitioner instituted action through the Department of Agriculture against the Respondent's bond. The Petitioner claimed $45,080.25 was due for the invoices prior to January 30, 1991. The Petitioner claimed $4,664.00 was owed for the invoices subsequent to January 30, 1991. Subsequent to its claims, Petitioner received payments from the Respondent in the following amounts: $5,000.00 on March 11, 1991; $5,000 on March 26, 1991; and $2,000.00 on April 30, 1991. Applying the total of those payments ($12,000) to the indebtedness on the first claim reduces that amount to $33,080.25. Prior to the claims being filed, Respondent had notified Petitioner that some sod deliveries had been unacceptable because of the quality of the sod or the amount. Respondent claimed the Petitioner had "shorted" the square footage amounts per pallet so that Respondent was being charged for a pallet that did not contain the requisite square footage of sod. On one occasion, in January, 1991, the Petitioner gave Respondent a credit in the amount of $1,173.75 for either refund on poor quality sod or a shortage. The Respondent continued to purchase sod from Petitioner until its credit was no longer accepted by Petitioner, i.e. March 4, 1991. Respondent did not, within 24 hours of receipt of sod, make a claim regarding the quality of the sod or the amount. By letter dated March 14, 1991, the Respondent, through its attorney, advised Petitioner as follows: St. Amour Sod Services, Inc., does not dispute the balance due to you as set forth in your letter and they will pay same in payments that are being determined now. For your information, the balance accrued because of the loss of several of our customers resulting from the poor quality of sod purchased from your firm. Respondent did not timely challenge the quality of the sod accepted, and did not present evidence regarding its alleged poor quality.
Recommendation Based on the foregoing, it is RECOMMENDED: That the Department of Agriculture and Consumer Services enter a final order finding that Respondent is indebted to Petitioner in the amounts of $33,080.25 and $4,664.00, with service charge to be computed through the date of the final order; directing Respondent to make payment of the amounts to Petitioner within 15 days following the issuance of the order; and, notifying all parties that if such payment is not timely made, the Department will seek recovery from Respondent's surety, Aetna Casualty and Surety Company. DONE and ENTERED this 13th day of March, 1992, in Tallahassee, Leon County, Florida. JOYOUS D. PARRISH Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32301 (904)488-9675 Filed with the Clerk of the Division of Administrative Hearings this 13th day of March, 1992. APPENDIX TO CASE NOS. 91-6388A AND 91-6389A RULINGS ON THE PROPOSED FINDINGS OF FACT SUBMITTED BY PETITIONER: 1. Paragraphs 1 through 4 are accepted. RULINGS ON THE PROPOSED FINDINGS OF FACT SUBMITTED BY RESPONDENT: Paragraph 1 is accepted. Paragraphs 2, 3, 4, 6, 7, and 8 are rejected as contrary to the weight of the credible evidence or unsupported by the record in this case. With regard to paragraph 5, that portion of the paragraph which states the amount of payments made by Respondent ($12,000) is accepted. Otherwise, rejected as stated in 2. above. COPIES FURNISHED: Barry L. Miller P.O. Box 1966 Orlando, FL 32802 Gary A. Ralph 2272 Airport Rd. South, Ste. 101 Naples, FL 33962 Hon. Bob Crawford Commissioner of Agriculture The Capitol, PL-10 Tallahassee, FL 32399-0810 Richard Tritschler General Counsel Dept. of Agriculture & Consumer Svcs. The Capitol, PL-10 Tallahassee, FL 32399-0810 Aetna Casualty & Surety Company Attn: Legal Dept. 151 Farmington Ave. Hartford, CT 06156
The Issue Whether respondents owe petitioner money on account of sales of potatoes?
Findings Of Fact In order to finance his 1991 crops, petitioner Daniel Methvin of Hastings, had to borrow money at the end of the year before. To do that, he was told, he needed to execute contracts for the sale of the potatoes he intended to grow. He had been glad to have future contracts for the 1990 season, when a glut of potatoes pushed the price below three dollars a hundredweight (cwt). Respondent J.P. Mach Agri-Marketing, Inc. (or the company of which it is a subsidiary) had honored those contracts and paid considerably more than the market price for potatoes then. On November 24, 1990, Mr. Methvin executed a contract entitled "Sales Confirmation" agreeing to sell 10,000 cwt of "REPACK REDS", Petitioner's Exhibit No. 1 ("92% US #1 INCH AND 1/2 MIN. AT LEAST 95% SKIN, Id.) to J.P. Mach, Inc. during the period April 28 to May 31, 1991, at $6.50 per cwt. Petitioner's Exhibit No. 1. Consolidating smaller, earlier agreements, Mr. Methvin executed another contract entitled "Sales Confirmation" agreeing to sell 45,000 cwt of Atlantics ("85% U.S. #1") to J.P. Mach, Inc. during the period April 28 to May 31, 1991, at $5.75 per cwt, guaranteeing the potatoes would be suitable for chips. Petitioner's Exhibit No. 2. With these contracts (or, as to the chipping potatoes, their predecessors) as collateral, Mr. Methvin raised the funds necessary to plant. Both contracts between Mr. Methvin and J.P. Mach, Inc. had "act of god clauses" excusing Mr. Methvin's nondelivery of potatoes he failed to harvest on account of, among other things, tornadoes or hail. As it happened, tornadoes and hail prevented Mr. Methvin's reaping all he had sown. Petitioner only harvested 6,300 cwt of red potatoes and approximately 43,000 cwt of Atlantic potatoes. Another result of the bad weather was extremely high market prices, at some times exceeding $20 per cwt. On April 27, 1991, J.P. Mach visited Mr. Methvin's farm and the two men discussed incentives to keep Mr. Methvin from "jumping his contract," i.e., selling his potatoes to others at the market price. In the course of their conversation, Mr. Methvin said he needed to realize $450,000 from that year's potatoes; and Mr. Mach replied, "I will help you out", and "I will keep you in business." There was general talk of incentives and bonuses. Eventually, Mr. Mach said he would pay a premium over the contract price if Mr. Methvin fulfilled the original contracts to the fullest extent possible, by delivering all the potatoes he had; and Mr. Mach began remitting premium prices, as promised. On June 1, 1991, however, Mr. Methvin advised Mr. Mach of his intention to sell what remained of his harvest, some 1100 cwt of Atlantics, on the open market. When he carried through on this, Mr. Methvin realized approximately $200,000. Even at that, he lost $40,000 that season. Meanwhile Mr. Mach and his companies were sued for $550,000 for failure to deliver potatoes; and were not paid another $172,000 for potatoes they shipped to chip plants and others to whom they had promised still more potatoes. (Mr. Methvin was not the only grower who defaulted on contracts to ship potatoes to J.P. Mach, Inc.) As of June 1, 1991, Mr. Mach, his companies or his agents had paid Mr. Methvin "about $200,000," which was more than the contract price of the potatoes Mr. Methvin had loaded. Neither Mr. Mach nor his companies paid Mr. Methvin anything after June 1, 1991. At hearing, Mr. Methvin calculated the value of the loads as to which nothing had been remitted as of June 1, 1991, as "a few hundred more than $36,000," assuming the contract price plus the premium. But Mr. Mach and his companies or employees recalculated the price of the loads he had paid for by eliminating the premium, since Mr. Methvin had not, as promised on his side, delivered all his potatoes. J.P. Mach, Inc. was duly licensed during the 1990 season. After its license lapsed, a new license was issued to J.P. Mach Agri-Marketing, Inc. on April 24, 1991. A $50,000 certificate of deposit was filed with First Performance Bank as a condition of licensure.
Recommendation It is, accordingly, RECOMMENDED: That petitioner's complaint be denied. DONE and ENTERED this 3rd day of April, 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 3rd day of April, 1992. COPIES FURNISHED: Daniel Methvin Route 1, Box 92 Palatka, Florida 32131 Jeffrey P. Mach, President J. P. Mach Agri-Marketing, Inc. P.O. Box 7 Plover, Wisconsin 54467 Brenda Hyatt, Chief Bureau of Licensing & Bond Department of Agricutlure 508 Mayo Building Tallahassee, Florida 32399-0800 Richard Tritschler, General Counsel Department of Agriculture and Consumer Services The Capitol, PL-10 Tallahassee, Florida 32399-0810
The Issue Whether or not Petitioners (complainants) are entitled to recover $5,640.19 or any part thereof against Respondent dealer and Respondent surety company.
Findings Of Fact Petitioners are growers of watermelons and qualify as "producers" under Section 604.15(5) F.S. Respondent Eddie D. Griffin d/b/a Quality Brokerage is a broker-shipper of watermelons and qualifies as a "dealer" under Section 604.15(1) F.S. Respondent United States Fidelity & Guaranty Company is surety for Respondent Griffin d/b/a Quality. Petitioners' claims against the dealer and his bond are listed in the Amended Complaint in the following amounts and categories: 6-18-92 Inv. #657 45,580 lbs. Crimson melons @ .05 lb. $2,279.00 Advance - 700.00 NWPB* - 9.12 $1,569.88 6-19-92 Inv. #668 2,490 lbs. Crimson melons @ .05 lb. $ 124.50 (paid for 42,860 lbs. short 2,490 lbs.) NWPB* - .50 124.00 6-20-92 Inv. #695 6,818 lbs. Crimson melons @ .05 lb. $ 340.90 (paid for 39,062 lbs. short 6,818 lbs.) NWPB* 1.36 339.54 6-20-92 Inv. @ #702 .05 39,880 lbs. Sangria melons lb. $1,994.00 Advance - 700.00 Packing Straw - 10.00 NWPB* - 7.98 Pmt. - 90.00 1,186.02 6-21-92 Inv. @ #706 .05 44,740 lbs. Sangria melons lb. $2,237.00 Advance - 700.00 Packing Straw - 10.00 NWPB* - 8.95 1,518.05 6-22-93 Inv. @ #716 .04 11,280 lbs. Crimson melons lb. NWPB* - 2.32 460.88 6-22-92 Inv. @ #709 .04 46,740 lbs. Crimson melons lb. $1,869.60 Advance - 700.00 Packing Straw - 10.00 NWPB* - 9.35 1,150.25 Deducted for #706 - 441.82 441.82 PAID 708.43 Total Claimed $5,640.19 *NWPB = National Watermelon Promotion Board Fee Petitioners and Respondent dealer have had an oral business relationship for four to five years. Both parties agree that their oral agreement initially called for a federal inspection to be done on each load if the load were refused in whole or in part by the ultimate recipient. Respondent Griffin contended that over the years there had been further oral agreements to "work out" or "ride out" small discrepancies or partial refusals of loads without resorting to federal inspections, the cost of which inspections could eliminate the entire profit on single loads. Petitioners denied that such an amended oral agreement was ever reached and further maintained that the amounts of the loads at issue herein could not be considered "small" by any interpretation. Respondent submitted no evidence as to what the relative terms, "large" and "small," mean in the industry. Consequently, it appears that there was never a meeting of the minds of the parties on the alleged oral contract amendments relied upon by Respondent. Respondent testified that in past years, prior to 1992, he had interpreted the term "ride it out" to mean that he would simply accept the hearsay statements of ultimate recipients that named poundages of melons were bad and he would let the ultimate recipients pay for only the melons they said were good. Respondent would thereafter absorb any losses himself, not passing on the loss by deducting any amount from the full amount he would normally pay to the growers within ten days. However, 1992 was such a bad year for melons that the Respondent dealer chose not to absorb the greater losses and passed them on to the growers by way of deductions on "settlement sheets." In 1992 Respondent sent Petitioners the settlement sheets with the deductions explained thereon with the net payments as much as thirty days after the ultimate sales. Upon the foregoing evidence, it appears that Respondent had established a course of business whereby Petitioners could reasonably have expected him to absorb any losses occasioned by Respondent's reliance on hearsay statements of the ultimate recipients concerning poor quality melons unless Respondent chose not to test the questionable melons with a federal inspection. Petitioners obtained Exhibit P-5 for load 657 at Respondent dealer's place of business, but were not certain it applied to the load Mr. Tucker claimed he delivered to Respondent on 6-18-92 because Mr. Tucker did not know his load number that day. The exhibit represents the weight ticket Petitioners believe applies to the load which Mr. Tucker claimed to have delivered to Respondent dealer on 6-18-92. However, the exhibit bears two other names, "Jones and Smith," not Petitioners' respective names of Tucker or Watson. It has "WACC" handwritten across it, which Mr. Tucker claimed signified the name of his watermelon field. The number "657" also has been handwritten across it. There is no evidence of who wrote any of this on the exhibit. Respondent denied that load 657 was received from Mr. Tucker. The exhibit shows a printed gross weight of 78,900 lbs., tare weight of 32,860 lbs. and net weight of 66,800 lbs. Net weights are supposed to signify the poundage of melons delivered to the dealer. Nothing on the exhibit matches Mr. Tucker's journal entry (Petitioners' Exhibit 3) of delivering 45,580 lbs. of watermelons to Respondent dealer on 6- 18-92. Mr. Tucker testified that he was never paid for his delivery. Respondent denied there was such a delivery and testified that he paid Jones and Smith for load 657. Petitioners have established no entitlement to their claim of $1,569.88 on Invoice 657. Petitioners' Exhibit P-4 represents two weight tickets secured from Respondent dealer's records that Petitioners contend apply to load 668. The first page has "45,350/6-19-92/Scott Tucker WACC" handwritten across it. None of the four poundages imprinted thereon match any of the amounts claimed by Petitioners for invoice 668, and subtracting amounts testified to also does not conform these figures to Petitioners' claim on load 668. The second page weight ticket shows a date of 6-18-92 and a weight of 34,260 lbs. It also does not match Petitioner's claim that they were owed for 45,350 lbs. but were paid for only 42,860 lbs., being paid 2,490 lbs. short. Exhibit P-8 is the 668 invoice/settlement sheet which Respondent provided to Petitioners and shows invoice 668 with date of 6-19-92, tare and pay weight of 42,860 lbs. at $.05/lb. for $2,143.00 less $8.57 melon adv. association (a/k/a NWPB, see supra) for $2,134.43, less a $700.00 advance and $10.00 for packing straw for a total due Petitioners of $1,424.43 which Respondent has already paid. Petitioners have established no entitlement to their claim of $124.00 on Invoice 668. Petitioners Exhibit P-6 represents two weight tickets secured from Respondent dealer's records. The first page has "45,880 lbs./6-20-92/Scott Tucker Crimson WACC 695" handwritten across it. None of the printed gross, tare, or net weights thereon match any of the amounts claimed by Petitioners for invoice 695. The second page shows the date 6-20-92 and a printed net weight of 32,000 lbs. Respondent dealer provided Petitioners with Exhibit P-7, invoice/settlement sheet 695 dated 6-20-92 showing tare and pay weights of 39,062 lbs. priced at $.05/lb. totalling $1,953.10, less melon adv. assoc. (a/k/a NWPB) fee of $7.81, for $1,945.29, less $700.00 advanced, less $10.00 for packing straw for a total of $1,235.29. The foregoing do not support Petitioner Tucker's claim based on his journal entry (P-3) that he was entitled to be paid for 45,880 lbs. he claims he delivered that day instead of for 39,062 pounds (short by 6,818 pounds) with balance owing to him of $339.54. Respondent has paid what was owed on invoice 695. By oral agreement at formal hearing, Petitioners' Composite Exhibit 9 shows that Petitioner Tucker delivered 39,880 lbs. of melons to Respondent dealer on 6-20-92 and Petitioner Watson received back from Respondent dealer an invoice/settlement sheet 702 showing 39,880 pounds @ $.05/lb. equalling $1,994.00 and that although $1,994.00 was owed Petitioners, Respondent thereafter subtracted for $800.00 worth of returned melons, a $700.00 advance, $7.98 for melon adv. association (a/k/a NWPB), and $10.00 for packing straw, and that a balance was paid to Petitioners of only $90.00. This is arithmetically illogical. The subtractions total $1,517.98. Therefore, if all of Respondent's subtractions were legitimate, the total balance due Petitioners would have been $476.02. If the right to deduct for the $800.00 in returned melons were not substantiated by Respondent dealer, then Petitioners would be due $1,276.02. Since all parties acknowledge that $90.00 was already paid by Respondent dealer, then Petitioners are due $1,186.02 if Respondent did not substantiate the right to deduct the $800.00. Load 702 was "graded out," i.e. accepted as satisfactory, by a representative of Respondent dealer or a subsequent holder in interest when the melons were delivered by Petitioners to Respondent dealer. That fact creates the presumption that the melons were received in satisfactory condition by the Respondent dealer. Nothing persuasive has been put forth by the Respondent dealer to show that the situation concerning the melons' quality had changed by the time the load arrived at its final destination. Respondent got no federal inspection on this load and relied on hearsay statements by persons who did not testify as to some melons being inferior. In light of the standard arrangement of the parties over the whole course of their business dealings (see Findings of Fact 5-7 supra), Petitioners have proven entitlement to the amount claimed on load 702 of $1,186.02. By oral agreement at formal hearing, Petitioners' Composite 10 shows Petitioners Tucker and Watson delivered 44,740 lbs. of melons to Respondent dealer on 6-21-92. At $.05/lb., Petitioners were owed $2,237.00, less melon adv. association fee (a/k/a NWPB) of $8.95, $700.00 for an advance, and $10.00 for straw. Those deductions are not at issue. Therefore, Petitioners would be owed $1,518.05, the amount claimed, from Respondent. However, the invoice also notes that Respondent made a $268.18 deduction for melons returned. Respondent's Composite Exhibit 1 purports to be a BB&W Farms Loading Sheet and Federal Inspection Sheet. Respondent offered this exhibit to show that only $68.18 was realized by him on load 706 which he attributed to Petitioner Watson. However, the federal inspector did not testify as to the results of the inspection, the inspection sheet itself is illegible as to "estimated total," the "estimated total" has been written in by another hand as "$62.60," and there was no explanation on the Composite Exhibit or in testimony as to how Respondent dealer came up with $200.00 in "return lumping charges" as also indicated on Exhibit R-1. Accordingly, Petitioners have established that with regard to load/invoice 706, they delivered watermelons worth $2,237.00 to Respondent dealer and Respondent dealer did not affirmatively establish that any melons were bad, despite the federal inspection sheet introduced in evidence. Petitioners have proven entitlement to their claim on invoice 706 for $1,518.05. However, Petitioners conceded that Respondent actually paid them $441.82 on invoice/settlement sheet 706. Therefore, they are only entitled to recoup a total of $1,076.23 on their claim for Invoice 706. In the course of formal hearing, Respondent dealer admitted that, with regard to load invoice 716, (Tucker) he did owe Petitioners $460.88 for 275 watermelons, and that it had not been paid purely due to clerical error. By oral agreement at formal hearing, Petitioners' Composite Exhibit 12 (Invoice and Weight Tickets 709, Watson) shows Petitioner Watson delivered 46,740 lbs. of melons to Respondent dealer on 6-22-92 and at $.04 lb., Petitioners were owed $1,869.60, less appropriate deductions. Petitioners conceded that Respondent dealer appropriately deducted $9.35 for melon adv. association (a/k/a NWPB), $700.00 for an advance, and $10.00 for packing straw, bringing the amount they were owed to $1,150.25. Petitioners and Respondent are in agreement the Respondent paid only $708.43 of the $1,150.25 owed on invoice/settlement sheet 709 because Respondent dealer also deducted from the amount owed on invoice 709 the $441.82 he had previously paid out on Invoice 706. See, Finding of Fact 13, supra. Since Petitioners have established that they were owed $1,518.05 on invoice 706 but were paid only $441.82 thereon, it appears that Petitioners should be paid $1,076.23 on Invoice 706 and realize nothing on Invoice 709.
Recommendation Upon the foregoing findings of fact and conclusions of law, it is recommended that the Department of Agriculture enter a final order awarding Petitioners $1,186.02 on invoice 702, $1,076.23 on invoice 706, and $460.88 on invoice 716 for a total of $2,723.13, dismissing all other claimed amounts, and binding Respondents to pay the full amount of $2,723.13, which in United States Fidelity & Guaranty Company's case shall be only to the extent of its bond. RECOMMENDED this 30th day of June, 1993, at Tallahassee, Florida. ELLA JANE P. DAVIS Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 30th day of June, 1993. COPIES FURNISHED: Scott Tucker and Phillip Watson Route 2 Box 280 Trenton, FL 32693 Eddie D. Griffin d/b/a Quality Brokerage Post Office Box 889 Immokalee, FL 33934 William J. Moore USF&G Post Office Box 31143 Tampa, FL 33631 United States Fidelity & Guaranty Company Post Office Box 1138 Baltimore, MD 21203 Brenda Hyatt, Chief Department of Agriculture Division of Marketing, Bureau of Licensure and Bond Mayo Building Tallahassee, FL 32399-0800 Honorable Bob Crawford Department of Agriculture and Consumer Services Commissioner of Agriculture The Capitol, PL-10 Tallahassee, FL 32399-0810 Richard Tritschler, Esquire General Counsel Department of Agriculture and Consumer Services The Capitol, PL-10 Tallahassee, FL 32399-0810
The Issue Whether Respondent owes payment to Petitioner in the amount of $60,748.78 for watermelons sold by Petitioner to Respondent.
Findings Of Fact Between May 18 and June 5, 1990, Petitioner James G. Young sold a total of 40 truckloads of watermelons to Respondent Maddox Brothers Produce, Inc. Petitioner was to have received a price of five cents per pound through May 26, 1990 and four cents per pound through the remainder of the shipping season. Respondent has failed to pay $60,748.78 of the amount owed to Petitioner for such produce. At no time did Petitioner received any complaint that the watermelons were unsatisfactory. Respondent is a licensed agricultural dealer engaged in the business of brokering agricultural products, Florida license #0030. Respondent is subject to regulation by the Department. Respondent has posted a Fireman's Fund Insurance Company surety bond #11141308327 in the amount of $50,000 with the Department. Respondent did not appear at the hearing. No evidence was presented to contradict the testimony of the Petitioner.
Recommendation Based on the foregoing, it is hereby RECOMMENDED that The Florida Department of Agriculture and Consumer Services enter a Final Order requiring Maddox Brothers Produce, Inc., to pay to Petitioner the sum of $60,748.78. DONE and RECOMMENDED this 26th day of April, 1991, in Tallahassee, Florida. WILLIAM F. QUATTLEBAUM 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 26th day of April, 1991. COPIES FURNISHED: The Honorable Bob Crawford Commissioner of Agriculture The Capitol, PL-10 Tallahassee, Florida 32399-0810 Richard Tritschler General Counsel 515 Mayo Building Tallahassee, Florida 32399-0800 Brenda Hyatt, Chief Bureau of Licensing and Bond Department of Agriculture 508 Mayo Building Tallahassee, Florida 32399-0800 James G. Young Route 3 Box 272-A Wildwood, Florida 34758 Patricia M. Harper, President Maddox Brothers Produce, Inc. 2124 Forest Avenue Knoxville, Tennessee 37916 Fireman's Fund Insurance Company Surety Claims Center Post Office Box 193136 San Francisco, Florida 94119-3136
Findings Of Fact Respondent-Principal, a licensed dealer in agricultural products, routinely ordered plants from Petitioner by telephone for pick up at Petitioner's warehouse in Apopka. Petitioner issued invoice statements on each order individually, which Respondent-Principal customarily paid by check, with a notation on each instrument showing the invoice number(s) to which payment applied. The transaction at issue commenced with a telephone order for tropical foliage placed on June 28, 1979. Petitioner began preparing this order on June 29 by removing plants from its greenhouse, but did not complete assembly of the foliage until sometime after June 29. Respondent-Principal picked up the shipment on July 2, 1979, as agreed. Concurrently, Petitioner billed Respondent-Principal for $2,647.34 on a two-page document identified as invoice 21561 (page 1) and 21562 (page 2). Petitioner continued to receive and fill Respondent-Principal's plant orders through August 20, 1979, after which sales transactions ceased. However, Respondent-Principal continued to make payments against various outstanding invoices. Respondent-Principal issued a check for $2,000.00 dated November 26, 1979, with no notation other than "pd on acct." Petitioner's president received this check on November 28, and instructed the bookkeeper to apply it to the largest invoice balance. Although the $2,647.34 due on invoice 21561/21562 was the oldest debt outstanding, the $3,489.31 due on invoice 21588 was the largest invoice balance, and the bookkeeper applied the payment to the latter debt accordingly. By letter dated January 11, 1980, Respondent-Principal advised Petitioner that it had ceased operations and would make a final payment on all of its debts to Petitioner in April or May, 1980. However, no payments were received after the November 26, 1979, check for $2,000.00.
Recommendation Upon consideration of the foregoing, it is RECOMMENDED: That the Department of Agriculture and Consumer Services enter its final order finding that Petitioner, Blalock Foliage, Inc., is due $2,647.34 from the sale of tropical foliage to Respondent, Exotic Plant Sales, Inc., as stated in Petitioner's Invoice 21561/21562; and, further, discharging Respondent, Fidelity & Deposit Company of Maryland, from liability under Chapter 604, Florida Statute, on this sale. DONE AND ENTERED this 22nd day of August, 1980, in Tallahassee, Florida. R. T. CARPENTER Hearing Officer Division of Administrative Hearings 101 Collins Building Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 22nd day of August, 1980. COPIES FURNISHED: Blalock Foliage, Inc. Mr. Timothy J. Blalock Post Office Drawer F West Kelly Park Drive Apopka, Florida 32703 Exotic Plant Sales, Inc. 1902 Charles Houston, Texas 77093 Fidelity & Deposit Company of Maryland 777 South Post Oak Building Suite 700 Houston, Texas 77903 Robert A. Chastain, Esquire General Counsel Department of Agriculture and Consumer Services Mayo Building Tallahassee, Florida 32301
The Issue Whether respondents or either of them owe petitioner money for two carloads of potatoes shipped on June 12, 1990?
Findings Of Fact On June 12, 1990, Stone, Inc. loaded 472.4 hundredweight of Atlantic potatoes in Hastings, Florida, on a truck owned by Gemini Transportation Services (Gemini) of Greensburg, Pennsylvania, for shipment to Mike Sell's Potato Chip Company (Sell's) in Dayton, Ohio. Stone, Inc. assigned this load number AT 1263232. The same day Stone, Inc. also loaded in Hastings 477.9 hundredweight of Atlantic potatoes on a truck owned by Ranger Transportation, Inc. (Ranger) of Jacksonville, Florida, for shipment to Sell's plant in Ohio. Stone, Inc. assigned this load number AT 1263235. Both loads evidently reached the potato chip plant in Dayton early on June 14, 1990. At half past nine that morning, Sell's notified Stone, Inc. by telephone that it was accepting 76 hundredweight of load No. AT 1263235, but that it was refusing the rest of load No. AT 1263235, and all of load No. AT 1263232. Stone, Inc. did not exercise its right to demand that an independent agricultural inspector examine the potatoes to determine whether their condition justified Sell's refusal to accept them. Instead, on the afternoon of June 14, 1990, Mr. Stone called Frank R. Thomson, Jr., vice-president of Black Gold, and told him Sell's had rejected the potatoes, but that Sell's sometimes rejected loads for no good reason. There was no discussion of price or of freight charges. Mr. Thomson has never bought potatoes rejected by a buyer and knows of no other broker who has, at least without seeing them, but he agreed on Black Gold's behalf to take both loads on consignment. He told Mr. Stone he would "try to find a home for the potatoes." Mr. Thomson told Mr. Stone he would send one load to Bockers Potato Chip Plant and the other to Howard Dennis' farm. For several years, the standard brokerage fee has been $0.25 a hundredweight, if a sale is consummated, but no mention was made of this in the telephone conversation. Customarily the grower bears the expense of transporting rejects. Black Gold directed load No. AT 1263232 to Bockers Potato Chip Plant in Fulton, Missouri; and, when Bockers turned it down, to a repacker, Neumiller rarms, Inc., in Savanna, Illinois. There it was "dumped because of excess rot and breakdown," Respondent's Exhibit No. 1, or so Black Gold was eventually advised. Vicki McDonald said the potatoes had been "running out the back of the truck," when they reached the Bockers plant. Black Gold directed load No. AT 126235, i.e., the 401.9 hundredweight that Sell's had not accepted, to the H. Dennis Potato Farm (Dennis), a repacker in Wauseon, Ohio. As was customary, Dennis reportedly unloaded the potatoes thought suitable for packaging for retail sale, and placed them in coolers to arrest spoilage. Dennis told Black Gold that soft rot was a problem on the day it said the potatoes arrived or the day after. At least nine days to two weeks later, but before August 10, 1990, Dennis told Black Gold, Dennis "ran" the potatoes on a conveyor belt, and concluded they were unusable. Under Stone, Inc.'s agreement with Sell's, Sell's reimbursed Stone, Inc. in full for freight charges incurred on loads Sell's accepted, or at the rate of $2.50 per hundredweight for partially accepted loads, but not at all for loads totally rejected. Stone, Inc. paid Gemini $2,287.75 for freight on load No. AT 126232. Of this sum, $1,181 was charged for shipment to Sell's, while $1,106.75 was charged for detention at Dayton, Ohio, shipment to Fulton, Missouri, and thence to Savanna, Illinois. Stone, Inc. paid Ranger $1,177.25 for freight on load No. AT 126235. Ranger did not charge extra to take the potatoes from Sell's to Dennis. Stone, Inc. deduced that load No. AT 126235 had reached Wauseon, Ohio, from Ranger's invoice, which it received shortly after June 19, 1990. But Stone, Inc. was not told the final disposition of either load until August 21, 1990, when Black Gold advised that load No. AT 126232 had been dumped. In mid-June of 1990, the market price for Atlantic potatoes in bulk, free on board in Hastings, was $2.75 per hundredweight. Black Gold was never paid anything on account of either load. Attached to its answer are statements purportedly from both repackers attesting to excess rot. `CONCLUSIONS OF LAW Since the Department of Agriculture and Consumer Services referred respondent's hearing request to the Division of Administrative Hearings, in accordance with Section 120.57(1)(b)3., Florida Statutes (1989), "the division has jurisdiction over the formal proceeding." Section 120.57(1) (b)3., Florida Statutes (1989). As a "person . . . engaged within this state in the business of purchasing, receiving or soliciting agricultural products from the producer," Section 604.15(1), Florida Statutes (1989), Black Gold is a dealer in agricultural products for purposes of Chapter 604, Florida Statutes, required to be licensed by Sections 604.17 and 604.18, Florida Statutes (1989) and, as a condition of licensure, to "deliver to the department a surety bond or certificate of deposit in the amount of at least $3,000 . . . ." Section 604.20(1), Florida Statutes (1990 Supp.). Potatoes are "agricultural products" because they are "natural products of the farm, nursery, grove [or] orchard," Section 604.15(3), Florida Statutes (1989), and Stone, Inc. is a producer within the meaning of Section 604.15(5), Florida Statutes (1989). Petitioner has the burden to establish the allegations of the complaint by a preponderance of the evidence. J.T. Cochran and R.B. Strange d/b/a C & S Tree Farm v. Beach Landscaping, Inc. d/b/a Landscape Technologies and Regency Insurance Co., No. 90-7494 (DOAH; April 19, 1991); Pine Stand Farms, Inc. v. Five Brothers Produce, Inc. and Florida Farm Bureau Mutual Insurance Co., No. 90-6460A (DOAH: Mar. 18, 1991); Florida Farm Management, Inc. v. DeBruyn Produce Co. and Peerless Insurance Co., No. 90-2966A (DOAH; Cct. 23, 1990). Black Gold has not proven any written agreement, but relies on the verbal agreement it alleged. See J.R. Sales, Inc. v. Dicks, 521 So. 2d 366, 369 (Fla. 2d DCA 1988). In its complaint, Stone, Inc. alleges that Black Gold "agreed to purchase the potatoes at . . . $2.75 cwt plus freight," and contends, "If there was a problem with either or both loads we should have been notified timely to allow us to market the potatoes elsewhere." But the evidence did not establish either that Black Gold agreed to purchase the potatoes or that belated notice caused petitioner any loss attributable to an inability to market the potatoes after their rejection in Ohio, Missouri and Illinois. In its post-hearing submission, Stone, Inc. argues that respondent, as a grower's agent, was "required to give an account of sale within 48 hours," citing Section 604.22, Florida Statutes (1989). But here there were no sales, so respondent had no duty to account for any sales. For the first time in its post-hearing submission, Stone, Inc. also invokes federal regulations promulgated under the Perishable Agricultural Commodities Act of 1930, notably for the proposition that documentation of the dumpings was inadequate under federal law. However this may be, petitioner failed to prove the indebtedness it claimed in its complaint.
Recommendation It is, accordingly, RECOMMENDED: That the Department of Agricultural and Consumer Services enter an order dismissing petitioner's complaint. DONE and ENTERED this 3rd day of July, 1991, in Tallahassee, Florida. ROBERT T. BENTON, II 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 3rd day of July, 1991. APPENDIX Respondent's proposed findings of fact Nos. 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11 and 14 have been adopted, in substance, insofar as material. With respect to respondent's proposed finding of fact No. 12, all evidence regarding the quality of the potatoes at their destinations was hearsay. With respect to respondent's proposed finding of fact No. 13, the actual disposition was not established by competent evidence. Respondent's proposed finding of fact No. 15 is properly argument rather than a finding of fact, for the most part. These loads apparently took two days to reach Sell's. COPIES FURNISHED: John W. Stone Post Office Box 74 Hastings, FL 32045 John Michael Traynor, Esquire 22 Cathedral Place St. Augustine, FL 32084 Brenda Hyatt, Chief Bureau of Licensing & Bond Department of Agriculture 508 Mayo Building Tallahassee, FL 32399-0800 Richard Tritshcler, General Counsel Department of Agriculture 515 Mayo Building Tallahassee, FL 32399-0800
Findings Of Fact Upon consideration of the oral testimony and documentary evidence adduced at the hearing, the following relevant facts are found: At all times pertinent to this proceeding, Petitioners were producers of agricultural products in the State of Florida as defined in Section 604.15(5), Florida Statutes (1983). At all times pertinent to this proceeding, Respondent GMS was a licensed dealer in agricultural products as defined by Section 604.15(1), Florida Statutes (1983), issued license no. 936 by the Department and bonded by Commercial Union Insurance Company (Commercial) in the sum of $50,000.00 - Bond No. CZ 7117346. At all times pertinent to this proceeding, Respondent Commercial was authorized to do business in the State of Florida. The complaint filed by Petitioner was timely filed in accordance with Section 604.21(1), Florida Statutes (1983). Prior to Petitioners selling or delivering any watermelons (melons) to Respondent GMS, Petitioners and Respondent GMS entered into a verbal contract whereby: (a) Petitioners would harvest and load their melons on trucks furnished by Respondent GMS at Petitioners' farm; (b) the loading, grading and inspection, if any, was to be supervised by, and the responsibility of Respondent GMS or its agent; (c) the melons were to be U.S. No. 1 grade; (d) the melons were purchased F.O.B. Petitioner's farm subject to acceptance by Respondent GMS, with title and risk of loss passing to Respondent GMS at point of shipment (See Transcript Page 95 lines 5-7); (e) the price was left open subject to Petitioners being paid the market price for the melons at place of shipment on the day of shipment as determined by Respondent GMS less one (1) or two (2) cent sales charge, depending on the price; and requiring Respondent GMS to notify Petitioners on a daily basis of that price and; (f) the settlement was to be made by Respondent GMS within a reasonable time after the sale of the melons by Respondent GMS. Respondent GMS was not acting as Petitioners agent in the sale of the melons for the account of the Petitioners on a net return basis nor was it acting as a negotiating broker between the Petitioners and the buyers. Respondent GMS did not make the type of accounting to Petitioners as required by Section 604.22, Florida Statutes had it been their agent. Although Respondent GMS purchased over twenty (20) loads of melons from the Petitioners, there are only ten (10) loads of melons in dispute and they are represented by track report numbers 536 dated April 29, 1985, 534 dated April 30, 1985, 2363 and 537, dated May 1, 1985, 2379, 2386 and 538 dated May 2, 1985, and 2385, 2412 and 2387 dated May 3, 1985. Jennings W. Starling (Starling) was the agent of Respondent GMS responsible for loading; grading- inspecting and accepting and approving the loads of melons for shipment that Respondent GMS was purchasing from Petitioners during the 1985 melon season. Petitioners and Starling were both aware that some of the melons had hollow hearth a conditions if known, would cause the melons to be rejected. Aware of this condition in the melons, Starling allowed Petitioners to load the melons on the truck furnished by Respondent GMS. Starling rejected from 20 percent to 40 percent of the melons harvested and brought in from Petitioners' fields before accepting and approving a load for shipment. Starling accepted and approved for shipment all ten (10) of the disputed loads of melons. On a daily basis, Robert E. McDaniel, Sr., one of the Petitioners, would contact the office of Respondent GMS in Lakeland Florida to obtain the price being paid that day by Respondent GMS to Petitioners but was not always successful, however, he would within a day or two obtain the price for a particular day. Robert E. McDaniel did obtain the price to be paid by Respondent GMS for the ten (10) disputed loads and informed his son Robert E. McDaniel, Jr. of those prices. The prices quoted to Robert E. McDaniel, Sr. by Respondent GMS on the ten (10) disputed loads were 12 cents, 10 cents, 8 cents, 8 cents, 8 cents, 8 cents, 8 cents, 7 cents, 7 cents, and 7 cents on tract reports number 536, 534, 2363, 537, 2379, 2386, 538, 2385, 2412 and 2387, respectively. No written record of their prices was produced at the hearing but the testimony of Robert E. McDaniel Sr. concerning these prices was the most credible evidence presented. After the melons were shipped, sometimes as much as one week after, a track report was given to Robert E. McDaniel Jr. by Starling for initialing. Sometimes a price would be indicated on the track report but this price was based on selling price at point of destination and not the market price at point of shipment. Also, the letters "H.H." would also appear on the track report which, according to the testimony of Starling, indicated hollow heart but the evidence was insufficient to prove that Starling had rejected these loads for shipment because of a hollow heart condition in the melons. The loads in question were paid for by Respondent GMS based on a price at point of destination under its drafts no. 831912 and 851311. The amount in dispute is as follows: DATE TRACK NET AMOUNT AMOUNT SHIPPED
Recommendation Based upon the Findings of Fact and Conclusions of Law recited herein, it is RECOMMENDED that Respondent GMS be ordered to pay to the Petitioners the sum of $11.212.31. It is further RECOMMENDED that if Respondent GMS fails to timely pay the Petitioners as ordered, then Respondent Commercial be ordered to pay the Department as required by Section 604.21, Florida Statutes (1983) and that the Department reimburse the Petitioners in accordance with Section 604.21, Florida Statutes (1983). Respectfully submitted and entered this 13th day of June, 1986, in Tallahassee, Leon County, Florida. Hearings Hearings WILLIAM R. CAVE Hearing Officer Division of Administrative The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 FILED with the Clerk of the Division of Administrative this 13th day of June, 1986.
