Findings Of Fact On or about May 28, 1986, Petitioner, T. J. Chastain, was engaged in the business of farming in Punta Gorda, Florida. One of his crops was watermelons. William P. Douberly, Jr., representing himself to be a licensed agricultural dealer, came to him and asked to buy what watermelons he had for sale. Petitioner and Mr. Douberly entered into negotiations for the purchase and Petitioner offered to sell the melons for 5.5 cents per pound. After some deliberation, the parties orally agreed to a sale at 5 cents per pound. Nothing was reduced to writing. The agreement was quite loose and much was left unstated. Costs of freight and other costs incidental to the sale were not mentioned by either party. It was understood, according to Petitioner, that Respondent would provide transport and, in fact, Douberly did contract with a trucker to provide transport of the melons to the ultimate delivery location. Petitioner claims that Mr. Douberly, the only individual with whom he dealt, looked over the watermelons prior to agreeing to the purchase. No conditions or qualifications were placed on the melons by Mr. Douberly and Petitioner contends that a requirement the melons be #1 grade was not stated. Petitioner had his helpers load the truck provided by Mr. Douberly who, according to Petitioner, remained on the scene over the three to four hours it took to put the melons on the truck and, he contends, Douberly saw them being loaded. Mr. Douberly, on the other hand, contends that he observed only the first half of the first truckload being placed on the truck. Thereafter, because he had other things to do, he left and did not return until the next day at which time the original truck was fully loaded as was the second truck he had provided. He contends, therefore, that he saw only one quarter of the entire load placed on the trucks. According to Mr. Chastain, when the first truck was loaded Mr. Douberly asked Petitioner if he wanted to follow the truck to the scale to see how much the load weighed. Mr. Chastain declined, stating that Mr. Douberly should weigh the melons and bring him back the weigh ticket along with payment for the load. He contends that when Mr. Douberly came back that same day with the ticket, he indicated that he wanted another load, alleging that the first load was somewhat overweight and some of the melons had been removed from the truck, to be placed on a second truck as the first part of a second load. Mr. Chastain relates that when the Respondent asked for the second truckload of melons, they engaged in no discussion about any change in the terms of sale. Mr. Chastain assumed that the purchase price would still be 5 cents per pound and the same procedure was to be followed for the second load. Though Respondent was to have paid for the first load after the weight was calculated, Petitioner assumed that when the second load was weighed, the Respondent would come back and pay for both. In fact, Mr. Douberly did not return after the second truck left and did not pay for either load. Numerous attempts to locate him were unsuccessful until ultimately, Mr. Chastain was able to reach him through Douberly's father. Notwithstanding his request for payment, Mr. Chastain did not receive any communication regarding the two loads of melons until some time later when by undated letter from Mr. Douberly, he received a check for slightly over $250.00 in full payment for all the melons. This letter described the condition of the melons at the time they were inspected by a federal inspector and indicated that 43 percent of at least the first shipment was defective in some fashion or another. The letter also indicated that Mr. Chastain was charged freight on both shipments at the rate of 4.4 cents per pound on the good melons sold. The only evidence to show the total weight of the two shipments consists of the letter from Mr. Douberly, Respondent's agent, indicating that the first load weighed 46,250 pounds and that the second weighed 29,990 pounds. This admission of weight by Respondent's agent is dispositive of any issue of the total weight involved and it is found that the total weight of melons shipped was the total of the two, 76,240 pounds. A federal inspection certificate dated June 2, 1986, reflecting an inspection which took place in Joplin, Mo., indicates that the applicant, Millsap Produce, counted 39,500 pounds. This is less than one of Mr. Douberly's load counts and more than the second. Since it cannot be shown which load was involved, or if both were involved in that inspection, as was indicated above, the letter from Mr. Douberly is considered the best evidence of the number of pounds of melons sold by Mr. Chastain to the Respondent. It must be noted that as of the time of the inspection, the refrigeration unit on the truck was inoperative. Returning to the description of the melons inspected by federal officials, the load was described as containing mature, clean, fairly well to well shaped melons. The flesh was described as having a good color with varying percentages of defects such as scars, misshapes, overmaturity, sunburn, and bruises, with 2 percent decay. Notwithstanding this, the melons were graded as meeting quality requirements but not coming up to US Grade #1 standards only because of their condition. Because he inspected only one quarter of the total melon shipment, which he graded as US Grade #1 at the time, Mr. Douberly contends that the Petitioner must have substituted substandard melons for the remaining melons in order to bring the overall grade of the shipment down below standards. He admits that the shipment was picked up from Mr. Chastain's field with the truck parked beside the road, but alleges that since he was not present throughout the entire loading process, Mr. Chastain had the opportunity to bring in substandard melons. Mr. Chastain denies bringing in any other melons and it is found there was no substitution. Mr. Chastain further indicates that nothing was discussed between him and Mr. Douberly regarding the necessity that the entire shipment be #1 grade fruit. He at no time agreed to guarantee the quality of melons and at no time did he agree to be responsible for the cost of transportation if the melons were determined to be of insufficient quality for sale at destination. This was never mentioned. Mr. Chastain pointed out, that in the industry, shipments of produce, where the purchasing broker provides transport, are FOB point of loading sales. No evidence to contradict this was presented by Respondent and it is so found. There were no alternative arrangements made or suggested by the buyer and Mr. Chastain indicated that it is his practice to always sell FOB point of loading. This was a cash sale, according to Chastain, and he expected to be paid by Douberly that night after weighing or, at the latest, the next morning when the second load was weighed. Mr. Douberly contends that the terms of the agreement between him and Mr. Chastain called for him to buy two loads of watermelons at 5 cents per pound pending delivery. The term, "pending delivery", means that the melons were of questionable quality and that Mr. Douberly would pay the grower depending upon how much the melons sold for when delivered. However, this contention is not supportable. It is highly unlikely, and denied by Mr. Chastain, that as grower, he would sell melons for the low price of 5 cents per pound to a buyer who provided the transportation and still agree to assume the risk of spoilage and transportation when he had no control over the method of transport and the time of sale. Mr. Douberly denies having seen the loading of any more than the first half of the first truck. Though he had the opportunity to do so, he did not inspect the melons being placed aboard the trucks nor did he inspect the field. He did, however, examine the first half of the first load, which came out of the same fields and, by his own admission, graded them as US #1. When Mr. Hogan advised Mr. Douberly several days later that there was a problem with the melons, Mr. Douberly claims he tried four or five times while he was still in Petitioner's area, to contact Chastain and left messages for him to call back. Even though, he claims, Mr. Chastain knew where he was staying and had his phone number, no calls were returned. On the other hand, Mr. Chastain indicated he never heard from Mr. Douberly after the second truck was loaded and his efforts to find him to collect his money were unsuccessful. It is unlikely that Mr. Chastain, who had not been paid, would have allowed from May 28 to on or after June 2, some five days or so, to go by without trying to contact his buyer if he knew where he was. More likely, Mr. Douberly was no longer in the area.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is therefore: RECOMMENDED that the Department of Agriculture issue a Final Order providing that Petitioner recover from Respondent or its bonding agent, the sum of $3,812.00. RECOMMENDED this 30th day of December, 1987, at Tallahassee, Florida. ARNOLD H. POLLOCK 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 30th day of December, 1987. COPIES FURNISHED: David K. Oaks, Esquire 201 West Marion Avenue Suite 205 Punta Gorda, Florida 33950 Gary Hogan Post Office 626 Clarkton, Missouri 63837 Honorable Doyle Conner Commissioner Department of Agriculture and Consumer Services The Capitol Tallahassee, Florida 32399-0810 Clinton H. Coulter, Jr., Esquire Department of Agriculture and Consumer Services Mayo Building, Room 513 Tallahassee, Florida 32399-0800 Ted Helms, Chief Bureau of License and Bond Department of Agriculture and Consumer Services Mayo Building Tallahassee, Florida 32399-0800 American State Insurance Company Attn: Bill Kaminski 801 94th Avenue North St. Petersburg, Florida 33702
The Issue The issue for determination is whether Respondents owe Petitioner approximately $591 for a quantity of watermelons provided by Petitioner; secondarily, resolution of this issue 1 Correction of obvious error has been made to the style of this case, adding the name of Co-Respondent U.S. Fidelity and Guaranty Co., and eliminating the Department of Agriculture and Consumer requires a determination of whether Respondents acted as an agent for Petitioner as opposed to a direct purchase of Petitioner's melons by Respondents.
Findings Of Fact Petitioner is a farmer who produces agricultural products, including watermelons. Petitioner also has trucks in which he hauls agricultural products, including watermelons. When all his trucks are in use, he frequently calls a friend, Freddy Bell, to provide some of Bell’s trucks to haul his products. Petitioner, in turn, helps Bell when Bell’s trucks are all in use. Respondent Wilson is a dealer of such products in the course of normal business activity. Respondent Wilson acts as a broker in these arrangements, receives the gross sales receipts from buyers and from that sum deducts costs of labor, freight, inspections, any other associated costs and his commission. The net balance of the gross sales receipts are paid to the melon producers. Respondent U. S. Fidelity and Guaranty Company is the bonding agent for Respondent pursuant to Section 604.20, Florida Statutes. Petitioner had not discussed any arrangement for the sale of his melons with Respondent Wilson. Instead, Petitioner discussed the sales price of his melons with Freddy Bell. Petitioner testified that Bell represented to Petitioner that he could get a price of $4.00 per hundred weight for Petitioner’s melons. Petitioner relied on Bell to provide transport his melons and obtain the promised price. While Bell did not testify at the final hearing, the parties are in agreement that Bell arranged for sale and shipment of Petitioner’s melons through Wilson. Wilson’s President, Robert M. Wilson, testified at hearing that Bell was not empowered by him to represent a guaranteed price for melons to anyone and that he could not affirm that Bell operated as his agent. He added that Melons were plentiful this past season and no melons were brokered on a guaranteed price basis. Testimony of Robert M. Wilson at the final hearing establishes that the arrangement between Respondent Wilson and Freddy Bell on Petitioner’s behalf was a brokerage arrangement and that the sale of the melons was subject to conditions and demands of the market place, i.e., that the melons would sell for the best possible price which Wilson could obtain for them. Testimony of Petitioner is uncorroborated and fails to establish that the agreement between the parties contemplated a direct sale of the melons to Respondent Wilson or a guaranteed price by Wilson.
Recommendation Based on the foregoing, it is hereby RECOMMENDED that a Final Order be entered dismissing Petitioner's complaint.DONE AND ENTERED this 12th day of March, 1997, in Tallahassee, Leon County, Florida. DON W. DAVIS Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (904) 488-9675 SUNCOM 278-9675 Fax Filing (904) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this 12th day of March, 1997. COPIES FURNISHED: Bo Bass 2829 Southwest SR 45 Newberry, FL 32669 John M. Martirano, Esquire US Fidelity and Guaranty Co Post Office Box 1138 Baltimore, MD 21203-1138 Robert M. Wilson, President Wilson and Son Sales, Inc. 2811 Airport Road Plant City, FL 33567 Bob Crawford Commissioner of Agriculture The Capitol, Plaza Level 10 Tallahassee, FL 32399-0810 Richard Tritschler, Esquire Department of Agriculture and Consumer Services The Capitol - Plaza Level 10 Tallahassee, FL 32399-0810 Brenda Hyatt, Chief Bureau of Licensing and Bond Department of Agriculture Mayo Building, Room 508 Tallahassee, FL 32399-0800
Findings Of Fact D. L. Wadsworth buys watermelons in the field and sells them to parties to whom the melons are delivered. In 1984 he agreed to buy melons from Charles Shackelford. In conducting his business Wadsworth is not an agent for the grower nor does he act as broker between the grower and the person who ultimately takes delivery of the melons. There was obviously a misunderstanding on the part of Petitioner as to the exact role played by Wadsworth in his buying of watermelons. Shackelford testified that Wadsworth agreed to handle his watermelon crop for the 1984 harvest. Wadsworth, on the other hand, does not buy fields but only "loads" on a daily basis. The harvesting of the watermelons is done by an agent of the grower, not by Respondent. Respondent buys the melons which he loads and ships out. On June 1, 1984, Respondent bought two loads of melons from Petitioner for which he paid four cents per pound. This is the same price Wadsworth paid to other growers from whom he purchased melons on June 1. On June 2, 1984, Respondent bought three loads of watermelons from Petitioner. Petitioner testified that he asked Respondent on June 2 what melons were bringing and was told four cents per pound. Wadsworth denies quoting a price to Shackelford but acknowledges that even if melons were bringing four cents a pound in New York he could not pay four cents per pound in Wauchula and ship them to New York without losing money on every watermelon he bought. Petitioner also testified that Respondent ceased handling his melons after June 2, 1984, that Respondent told him he was sick and was going back to Brandon and that he (Respondent) was not going to handle any more watermelons. Respondent denied that he was sick during this period or that he could not be contacted. Respondent paid his motel bill in Wauchula on June 9, 1984. On June 5, 1984, Respondent gave Petitioner his check for the watermelons he had purchased and an invoice (Exhibit 1) which showed the price for one load on June 1 at four cents per pound and three loads on June 2 at three and a half cents per pound. Respondent did not receive any complaint from Petitioner until the Complaint that is the basis of this hearing was filed. To support his testimony that he paid all growers the same price for watermelons purchased, Respondent submitted a list of those growers from whom he bought watermelons on May 31 through June 3 showing that he paid four cents per pound on the first two days of that period and three and a half cents per pound the last two days (Exhibit 2).
The Issue The issue that came on for hearing in this case is whether the Respondent, Quality Melon Sales, Inc., properly accounted for produce either sold or cosigned by the Petitioner, Agro House Farms.
Findings Of Fact The Petitioner though its authorized representatives, entered into an oral agreement with Mr. Mack Fulmer, President and General Manager of Quality Melon Inc. to buy or a quality of cucumbers remaining in Petitioner's Greenhouse. At the time of the oral agreement, neither the Petitioner nor the Respondent discussed the brokerage fee due the Respondent on the sale of such cucumbers. On or about the time of the brokerage agreement, the Respondent entered into negotiations with the Petitioner regarding the sale and/or management of Petitioner's business. The Respondent was sent five shipments of cucumbers by the Petitioner which were sold in the Canadian market. On each of these shipments, the Petitioner was charged a brokerage fee of from $1.00 to $1.60 per box of produce sold. The Respondent charges a minimum of $1.00 per box for packing and handling produce. The first shipment of cucumbers were not sold on account but were purchased by the Respondent from Mr. John Shirley. the Petitioner's Manager. The Respondent agreed to pay five dollars a box for the initial shipment of cucumbers. After receipt of the initial shipment the Respondent contacted Mr. Shirley and requested a $1.00, credit per box which was agreed to. The four subsequent shipments of cucumbers were sold on account rather than purchased outright by the Respondent. On the first shipment, Invoice #1159, the Petitioner is entitled to $1,580.00 for 395 boxes of cucumbers @ $4.00 per box rather than the $3.50 per box paid by the Respondent. On Invoice #1159, the difference between the amount paid and owed is $197.50. ($1,580.00 - $1,382.50 = $197.50. The accounting on the remaining Invoices Numbers 1160, 1161, 1162 and 1163 is correct and represents the amount the Respondent received from the produce minus brokerage, handling and shipping charges ranging from $1.00 to $1.60 per box. As part of the final accounting the Respondent set off certain charges for items bought by the Petitioner which included for rolls of plastic, seeds, a cash advance, transportation for tires, four phone calls, fertilizer and an attorneys fee. At the final hearing, the Petitioner agreed to all of the charges except the attorneys fee in the amount of $400.00. The claim for the attorneys fee arose out of a separate transaction involving the sale of the business to the Respondent. This deduction was not authorized by the Petitioner and is not entitled to be set off by the Respondent except pursuant to an order of a court of competent jurisdiction.
Recommendation Upon consideration of the foregoing, it is RECOMMENDED: That the Department enter an order finding that the Petitioner is due the amount of $687.38 from the sale of the agricultural products which were the subject of this administrative proceeding. DONE and ORDERED this 26th day of November, 1980, in Tallahassee, Florida. SHARYN L. SMITH, Hearing Officer Division of Administrative Hearings Room 101, Collins Building Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 26th day of November, 1980. COPIES FURNISHED: William H. Fulford, Jr. Agro House Farms, Inc. Post Office Box 1106 Umatilla Florida 32784 Richard A. Wagner, Esquire Rodgers Wagner & Satava Suite 405, Meltcalfe Building 100 South Orange Avenue Orlando, Florida Robert A. Chastain, Esquire General Counsel Department of Agriculture and Consumer Services Mayo Building Tallahassee, Florida 32301
The Issue Whether Respondent owes Petitioner $41,783.69 as alleged in the complaint filed on December 2, 1996.
Findings Of Fact Based upon all of the evidence, the following findings of fact are determined: Background Petitioner, Lenard Powell (Petitioner), is a watermelon farmer in Lake Panasoffkee, Florida. Respondent, Joe Marinaro (Respondent), is a licensed dealer in agricultural products doing business as Atlantic Fruit Company in Fort Pierce, Florida. He has been in the business for more than forty years and has an unblemished record. As a licensed dealer, Respondent is subject to the regulatory authority of the Department of Agriculture and Consumer Services (Department). Respondent has posted a bond written by Reliance Insurance Company, as surety, to assure proper accounting and payment to producers such as Petitioner. In a complaint filed with the Department on December 11, 1996, Petitioner alleged that he entered into an agreement with Howard Bailey (Bailey) on behalf of Tom Lange Company (Lange), a distributor of fresh fruits and vegetables, to market his 1996 watermelon crop. Under that alleged agreement, Lange would advance "up front seed money, $900.00 per trailer for labor advance, when road truck crossed the scales, [and] supply the boxes and cartons which were to be deducted from the final payment." According to the complaint, Petitioner was to pay Lange and Bailey "a fee of one cent per pound on seeded varieties and two cents per pound on seedless watermelons." The complaint goes on to allege that in May 1996, Bailey advised Petitioner that he no longer represented Lange, but now represented Respondent, and "the deal was still the same." Finally, Petitioner has alleged that the final summary from Respondent "had inconsistent weights, document numbers and prices" and that Petitioner's calculations showed an unaccounted for balance of $45,506.97. As amended at hearing, Petitioner now claims he is owed $41,783.63. In his Amended Response, Respondent contends that even though the agreement called for him to have an exclusive right to sell Petitioner's 1996 crop, a portion of the crop was sold directly by Petitioner or Bailey to third parties without Respondent's knowledge. He further contends that the watermelons were to be sold on a twenty percent of gross proceeds commission basis rather than the one and two cents per pound commission basis alleged in the complaint. Respondent also asserts that some of the watermelons were dumped because of spoilage and that a part of the bins or cartons were packed with oversize watermelons, thus "short-counting" the number of melons in each container. This resulted in the buyers making deductions upon delivery of the produce. After taking these factors into consideration, Respondent claims that no money is owed. The Agreement It is customary in the watermelon business to enter into agreements to buy and sell watermelons without a written contract. Therefore, it was not unusual for the parties to base their agreement on a handshake or verbal understanding. Bailey is a "part-time watermelon broker," farmer, and owner of Bailey Farms, Inc., in Schoolcraft, Michigan. Although he says he has been licensed as a dealer in the past, Bailey had no license or bond when these events occurred. Bailey has had dealings with Respondent since around 1989. In 1995, Bailey was involved in a "relationship" with Lange in which they worked "joint deals" splitting profits and commissions. Under that relationship, Bailey would arrange to market a grower's watermelons through Lange's customers and split the profits or commissions with Lange. In November 1995, two Lange representatives (Phil Gumpert and Michael E. Smith) and Bailey met with Petitioner in Wildwood, Florida, for the purpose of exploring the possibility of marketing Petitioner's 1996 crop. Under the arrangement proposed by Lange, Petitioner would receive the proceeds from the sale of his watermelons handled by Lange, less a commission, less the usual and customary weight differences between the gross weight shipped and the net weight paid by buyers, less the advances made by Lange for plants, seeds, materials and supplies, and less deductions for non-conforming watermelons in general, improper sizing, inaccurate counts in bins, and oversizing in cartons. As to the amount of commission, Lange proposed to charge twenty percent of gross sales proceeds. Bailey acknowledges that Petitioner initially balked at paying a twenty percent commission on the ground that amount was too high but contended he eventually agreed to that figure when it was explained there was no incentive for the dealer to get a good price for the watermelons if the dealer was paid a flat one or two cents per pound commission. Petitioner contends, however, that he did not agree with this amount and instead wanted only to pay one cent per pound for seeded watermelons and two cents per pound for seedless watermelons. His version of the events is accepted as being the most credible, and thus it is found that, as of November 1995, there was no agreement on that issue. It is noted that except for the amount of commissions, Petitioner basically agreed with all other terms and conditions discussed by Lange and Bailey. In view of the lack of agreement on the amount of the commission, there was no meeting of the minds by the parties. This was confirmed by Michael Smith, a Lange representative, who described the meeting as simply "exploratory" in nature and nothing more. Sometime after the meeting, Lange sent Petitioner an unsigned copy of a "Marketing Agreement" which contained the terms under which Lange would advance moneys to Petitioner in return for an exclusive right to sell his 1996 crop. The agreement was sent to Petitioner merely "as an example" in the event the parties might reach an agreement. It contained terms and conditions pertaining to commission, grower advances, and other relevant considerations. Paragraph 7 of the agreement called for the dealer to receive "a commission equal to twenty percent (20%) of the final gross selling price of each shipment." After receiving the agreement, Petitioner consulted his attorney, who at that time was his father-in-law. The attorney lined out a part of the provision relating to commissions, and in paragraph 8, he inserted a requirement that the dealer provide Petitioner with a "verified" accounting of the sales. However, the amended agreement was never signed by Petitioner nor returned to Lange or Bailey. Petitioner did not immediately notify Lange orally or in writing that he was dissatisfied with the terms described in the agreement. It was his intention, however, to further negotiate the amount of the commission. A short time later, he contacted Bailey regarding his disagreement with the amount of commission and was told by Bailey, "don't worry about it." Based on this conversation, Petitioner assumed that only a one or two cents commission would be paid and that an agreement had been formed. Bailey never conveyed Petitioner's concerns to Lange. Events Prior to the Harvesting of the Crop Petitioner received and accepted advances of funds for plants, seeds, and materials to produce the watermelons. While the precise amount is not known, it approximated around $40,468.00. A part of these moneys initially came from Bailey and the remainder from Respondent. Petitioner used these funds to plant and harvest his 1996 watermelon crop. In March 1996, Bailey learned that because the venture "was not attractive," Lange was no longer interested in marketing Petitioner's watermelons. Indeed, in his deposition testimony, a Lange representative suggested that an agreement between Lange and Petitioner had never been reached before Lange bowed out of the picture. In any event, because Bailey had cash invested in the venture, and he was in dire need of a new broker with financial backing and customers to buy the watermelons, he contacted Respondent to ascertain if he was interested in the venture. Among other things, Bailey represented that in return for Respondent providing up-front money to Petitioner, Respondent would have an "exclusive right of sale" and they would share in a twenty percent commission. It is noteworthy that Bailey did not show Respondent a copy of the Marketing Agreement previously sent by Lange to Petitioner, and he did not tell Respondent that Petitioner would pay a commission of only one cent per pound for seeded watermelons and two cents per pound for seedless watermelons. Based on Bailey's less than candid representations, Respondent agreed to take Lange's place in the venture. Under their arrangement, Bailey and Respondent had a community of interest in a common purpose, that is, the sale of Petitioner's crop. By virtue of the exclusive right of sale, they had joint control or right to control to whom they sold the watermelons. In addition, the two had joint control or right to control a checking account established in Michigan for that venture. They intended to share profits by splitting the commissions, and they likewise intended to share in any losses. Finally, they both expended their knowledge, time, labor, and skill in furtherance of the joint venture. Around April 1996, Bailey contacted Petitioner and advised him that Lange was no longer in the transaction, but that Respondent's company, Atlantic Fruit Company, would stand in Lange's shoes and handle the watermelons on the same basis as they had previously agreed. Because Respondent had a good reputation and a sufficient bond, Petitioner agreed to the substitution of dealers. Petitioner and Respondent did not discuss the terms and conditions of the agreement, including the amount of commissions to be paid, since they both relied on the representations of Bailey. The Sale of the Produce In all, fifty loads of watermelons were shipped from Petitioner's field at the direction of either Respondent or Bailey. Because Petitioner never received bills of lading for two of those shipments, and he has abandoned a claim as to those two, only forty-eight shipments are in dispute. Without Respondent's knowledge, Petitioner sold eight loads of watermelons directly to third parties and received a total of $21,069.70. These proceeds were used by Petitioner to pay labor costs. Bailey knew and agreed to the third party sales. Bailey sold thirteen loads of watermelons without Respondent's knowledge. On these loads, Bailey was paid a commission of one cent per pound of the weight of the melons, which amount is consistent with the parties' agreement. Bailey did not split the commission he received on these loads with Respondent. These transactions reinforce the view, as more fully discussed below, that Bailey knew that Petitioner had agreed to a different commission basis than the one he described to Respondent. Petitioner kept track of the harvest by making notes in a "log book." The log book contains the date, variety of watermelon, net weights, and price per pound that he was to receive. The book was prepared contemporaneously. In addition to the log book, Petitioner was given a copy of a bill of lading for each truck load of watermelons that was shipped. The bills of lading indicated the weight, variety, broker, and destination and were prepared on forms of either Atlantic Fruit Company or Bailey Farms, Inc. Petitioner's claim is comprised of five categories. First, he is claiming the difference between the twenty percent commission charged by Respondent and the one or two cents commission to which he agreed. Second, he is claiming the value of the weight difference between what the buyer received and what was shipped from his fields and recorded on the bills of lading. Third, he is claiming the difference between what the buyer paid per pound and the price per pound Petitioner reflects in his log book. Fourth, Petitioner is claiming the amount the buyer deducted from the purchase price because of spoilage or short counts. Finally, Petitioner claims the unaccounted weight shortage in watermelons shipped by Bailey to Bailey's cooler in White Springs, Florida. Each of these categories will be discussed below. Twenty percent commission Petitioner first contends he is owed the difference between a twenty percent commission charged on thirty-five shipments by Respondent and the one and two cents per pound commission to which he agreed. The total amount in controversy is $14,503.18. The underlying documentation for these loads is found in Petitioner's Exhibits 1, 5, 7, 9, 10, 12, 13, 15-20, 23- 28, 31, 33-39, and 41-48. The evidence established that, consistent with Petitioner's claim, it is customary in the industry that brokers receive a one cent per pound commission for the sale of seeded watermelons and a two cents per pound commission for the sale of seedless watermelons. While Bailey contended at hearing that some growers were paying a twenty percent commission on seedless (but not seeded) watermelons, he could not identify any such growers. Further, in deposition testimony, Lange acknowledged that it had no customers in Florida in 1996 using that commission basis. Finally, on thirteen loads sold directly by Bailey to third parties, he was paid a one cent per pound commission, which is consistent with Petitioner's position. Given these considerations, the undersigned is persuaded that Petitioner never agreed to a twenty percent commission arrangement. Therefore, Petitioner is only obligated to pay a one cent per pound commission on seeded watermelons and two cents per pound on seedless watermelons sold by Respondent. Petitioner is entitled to reimbursement for the difference between a twenty percent commission and the agreed upon amount. Since it was not shown that Petitioner's suggested amount of $14,503.18 should be modified if adjustments to other claims are made, that amount is found to be appropriate. This amount, however, should be offset by the commission which Respondent should have received from Petitioner for the sale by Petitioner of eight loads of watermelons to third parties. This is because those sales contravened the parties' agreement that Respondent had an exclusive right to sell all of Petitioner's 1996 crop since he had advanced the money to produce and harvest the crop. While Respondent is also entitled to share in the commission received by Bailey for thirteen loads sold by Bailey to third parties without Respondent's knowledge, Respondent's remedy is against Bailey, and not Petitioner. Buyer deductions Petitioner contends that he is owed $7,121.99 for miscellaneous deductions improperly made by the buyers. In this case, the buyers made deductions for short counts, that is, there were fewer watermelons in a bin or carton than are normally packed in a standard size carton or bin. The underlying documentation for this portion of the claim is found in Petitioner's Exhibits 15, 17, 24, 25, 28, 29, 36, 38, 39, 41, and 43-46. For the following reasons, this claim is found to without merit. The custom and usage in the industry is for the grower to provide good and marketable quality watermelons at the size and state of maturity required by the buyers. Petitioner experienced harvesting problems, and his watermelons were too large, resulting in improper sizing, inaccurate counts in bins, and oversizing in cartons. This ultimately affected the number that could be packed into a carton or bin and resulted in many containers having fewer watermelons than are normally packed. Under these circumstances, the buyers made deductions for non-conforming watermelons. Petitioner argues that he should have been consulted by Bailey or Respondent and allowed to request a government inspection each time a buyer found a non-conforming load. The evidence shows, however, that this would have been impractical, time-consuming, and futile since an inspection would simply confirm that there was a short count in the bins. Moreover, given the time of the year (June 1996), inspections may well have caused additional spoilage since loads would remain unpacked in the truck in the hot weather until a government inspector became available. Then, too, the inspection process would tie up the facilities of the buyer until the process was completed. Weight differences Petitioner next contends that he is owed $5,064.23 for the difference in weight shown on the bills of lading and the weight the buyer received. In other words, on thirteen shipments, the delivered weight was less than the weight shown on the bill of lading. These shipments are documented in Petitioner's Exhibits 2, 4, 6, 8, 9, 11, 14, 16, 21, 22, 30, 32, and 40. The usual and customary practice in the industry is for the buyer to pay for the delivered weight of watermelons and not the shipped weight. In this case, most of the weight differences occurred with respect to bulk load shipments of watermelons. The evidence shows that it is not unusual for bulk load shipments to have weight differences of up to 2,000 pounds. For differences of more than 2,000 pounds, the standard practice is for the broker to contact the grower, advise that there is a problem, and ask if the grower desires a government inspection. The shipments identified in Petitioner's Exhibits 2, 6, 8, 11, 14, 22, 30 and 32 had weight differences of less than 2,000 pounds and therefore were not unusual. On the remaining five loads, however, Petitioner was not told that there was a problem, nor was he asked if he wanted a government inspection. This was contrary to industry practice. Accordingly, as to the shipments identified in Petitioner's Exhibits 4, 9, 16, 21, and 40, Petitioner should be compensated for the difference between the delivered weight and the bill of lading, or $4,420.53, less any commissions due Respondent. Log price differences Petitioner next contends that he is entitled to $7,489.55 for the price difference between the log book price and the price paid by the buyer. In other words, he is contending that he was guaranteed a certain sales price, but the produce was sold for a lesser amount. To determine the amount allegedly due, Petitioner multiplied the difference between his log book price per pound and what the buyer paid per pound times the weight received by the buyer. The standard practice in the industry is that a broker or dealer does not guarantee a price for the grower when the produce is being handled on a commission basis. The dealer is simply obligated to make a "best effort" to get the top price back to the farmer. This industry practice was incorporated into the Marketing Agreement, and Petitioner was aware of this industry standard. Although Petitioner may have been led to believe by Bailey that he would receive a specified amount per pound on some future loads, and Petitioner then recorded that amount in his log book, there was no way that such a price could be guaranteed until the produce was actually sold to the buyer. Accordingly, Petitioner is only entitled to be paid the amount for which the watermelons were sold. Therefore, this portion of his claim should be denied. Cooler loads Finally, Petitioner has claimed reimbursement in the amount of $7,513.74 for 47,798 pounds of watermelons shipped to a cooler in White Springs, Florida, for which he alleges he never received any compensation. The underlying documents for this claim are found in Petitioner's Exhibits 49 through 55. Because some watermelons were ripe in the field but still unsold, and Bailey did not want them to spoil, he shipped seven loads to a cooler in White Springs for storage for delivery on future sales. Bailey had leased the cooler for just this purpose. The total weight shipped from Petitioner's farm to the cooler was 271,464 pounds. The total weight sold from the cooler was 213,666 pounds, or a difference of 57,798 pounds. Through no fault of Bailey, however, some of the produce became spoiled and had to be dumped. According to Bailey, at least 40,000 pounds or more were dumped. However, the individual who was in charge of the cooler, William G. Poucher, estimated the amount to be no more than 10,000 pounds. Poucher's testimony is accepted as being more credible on this issue. This left approximately 47,798 pounds of unaccounted watermelons, for which Petitioner should be compensated. Petitioner apparently calculated his claim by multiplying the unaccounted weight (47,798) by an average price of around fifteen cents per pound to arrive at a figure of $7,513.74. This yardstick has not been challenged, and it is accordingly found that Petitioner is owed $7,513.74, less any commissions due Respondent. Respondent has contended that because the cooler movements were never disclosed to him by Bailey and Petitioner, he should not be held liable for any missing produce. However, the shipments were made at the direction of Respondent's agent and partner, Bailey, and thus he should be accountable for the actions of his agent/partner. Respondent also suggests that the 47,798 pounds of unaccounted watermelons were non-conforming produce unable to be sold. The more credible evidence suggests otherwise.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the Department of Agriculture and Consumer Affairs enter a final order determining that Respondent owes Petitioner the moneys discussed in paragraph 44. In the event payment is not timely made, the surety should be responsible for the indebtedness. DONE AND ENTERED this 18th day of November, 1997, in Tallahassee, Leon County, Florida. DONALD R. ALEXANDER Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (904) 488-9675, SUNCOM 278-9675 Fax Filing (904) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this day 18th of November, 1997. COPIES FURNISHED: Honorable Bob Crawford Commissioner of Agriculture The Capitol, Plaza Level 10 Tallahassee, Florida 32399-0810 Brenda Hyatt, Chief Bureau of Licensing and Bond 508 Mayo Building Tallahassee, Florida 32399-0800 Felix M. Adams, Esquire 138 Bushnell Plaza, Suite 201 Bushnell, Florida 33516 Richard D. Sneed, Esquire 1905 South 25th Street Suite 206, Mardi Executive Center Fort Pierce, Florida 34947 Nick Cerulli, Esquire Bond Claim Department Reliance Insurance Company 4 Penn Center Plaza Philadelphia, Pennsylvania 19103 Richard D. Tritschler, Esquire Department of Agriculture and Consumer Services The Capitol, Plaza Level 10 Tallahassee, Florida 32399-0810
The Issue The issue for determination is whether Respondents owe Petitioner approximately $3,807.00 for a quantity of watermelons provided to Respondents by Petitioner; secondarily, resolution of this issue requires a determination of whether Respondents acted as an agent for Petitioner as opposed to a direct purchase of Petitioner's melons by Respondents.
Findings Of Fact Petitioner is a resident of Suwannee County, Florida and a farmer who produces agricultural products, including watermelons. Respondent John W. Hill, is a dealer of such products in the course of normal business activity. Respondent Hill's services include arranging for the harvesting and loading of melons for shipment to northern markets, as well as the location of buyers for the melons. Respondent Hill acts as a broker in these arrangements, receives the gross sales receipts from buyers and from that sum deducts costs of labor, freight, inspections, any other associated costs and his commission. The net balance of the gross sales receipts are paid to the melon producers. Respondent Florida Farm Bureau Mutual Insurance Company is the bonding agent for Respondent pursuant to Section 604.20, Florida Statutes. Petitioner knew Respondent Hill and had discussed brokerage or trading of watermelons with him on occasion. Shortly before or on July 2, 1992, Petitioner's watermelon crew left him and he telephoned Respondent Hill. Unable to speak with Hill, Petitioner spoke with Hill's wife. She and Petitioner discussed a possible price for Petitioner's melons of five cents a pound. Shortly thereafter, Respondent Hill later contacted Petitioner by telephone and confirmed the five cents per pound price, provided the melons met requirements. Respondent was using a cellular telephone in his truck and when Petitioner hung up his telephone and walked out of his barn, he observed Respondent's employees in the field starting to cut the vines connected to the melons. Respondent Hill was nearby in his truck. Petitioner and Respondent Hill drove around the farm and looked at Petitioner's various melon plots. Respondent Hill agreed to attempt to market a variety of the melons known as sangaria at the five cents per pound price. The parties did not reduce their agreement to writing. Respondent Hill felt that Petitioner understood that they were partners, that he was acting as Petitioner's broker for the eventual sale of the melons to a specified buyer, FRESH PLUS, a buyer in Philadelphia, Pennsylvania. At one point during the process of driving around the watermelon field, Hill and Petitioner discussed the condition of the melons and that they would run the melons in and see if they could get five cents per pound for them. Hill also was convinced that Petitioner understood that the melons must be accepted by the receiver or meet certain conditions in order to get that price for the melons. It is customary within the industry that, unless stated otherwise, all melons must grade US #1 at the time of delivery to a buyer. Petitioner did not accompany the loads of watermelons to the shipping facility where the sangaria melons were weighed and loaded for shipment. As a result, he did not receive a copy of Respondent Hill's July 2, 1992, track report documenting a 48,320 pound load of sangaria watermelons bearing the written statement "must be accepted by receiving or grade U.S. #1." The melons were rejected by the buyer upon arrival in Philadelphia as not meeting requirements and Respondent Hill, when learning of the rejection, called for and received an official USDA inspection of the melons. The July 6, 1992 inspection revealed that the melons were not US #1. Respondent Hill then shipped the melons to an alternate perspective buyer, T & K Binning in Jessup, Maryland. Upon arrival, T & K rejected 375 of the melons and accepted 2,127 melons at $1.25 per melon for a total purchase price of $2,685.75 which was received by Respondent Hill. After subtraction of labor costs of $733.12, freight costs of $1,965.00, and inspection costs of $133.50, Respondent Hill absorbed a net loss of $212.93. Another 27,280 pounds of melons that were not of the sangaria variety were loaded from Petitioner's farm and shipped to a seller, Park-N-Shop, in Charlotte, North Carolina, along with melons grown by several other producers. These commingled melons were sold for a gross sales price of $1,344.00. After substraction of labor costs of $792.83 and freight costs of $714.20, Hill absorbed a net loss of $163.03 for the melons. Testimony of Respondent Hill at the final hearing was corroborated by documentation of Respondent Hill's absorption of all costs connected with the sale of the melons, including initial loading costs. Hill's testimony establishes that the arrangement between the parties was a brokerage arrangement and that the sale of the melons was subject to conditions common to the industry, i.e., that the melons grade #1 upon receipt by buyer. Testimony of Petitioner is uncorroborated and fails to establish that the agreement between the parties contemplated a direct sale of the melons to Respondent Hill.
Recommendation Based on the foregoing, it is hereby RECOMMENDED that a Final Order be entered dismissing Petitioner's complaint. DONE AND ENTERED this 15th day of July, 1993, in Tallahassee, Leon County, Florida. DON W. DAVIS Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 15th day of July, 1993. APPENDIX The following constitutes my rulings, pursuant to requirements of Section 120.59, Florida Statutes, on proposed findings of fact submitted by the parties. Petitioner's Proposed Findings 1. Accepted in substance. 2.-3. Rejected, subordinate to HO findings on this point. 4. Rejected, argument. Respondent's Proposed Findings 1.-9. Accepted in substance. 10. Rejected, cumulative. COPIES FURNISHED: David Hingson Route 4, Box 330 Live Oak, Florida 32060 William A. Slaughter, II, Esquire P.O. Box 906 Live Oak, Florida 32060 Florida Farm Bureau Mutual Insurance Company Legal Department 5700 SW 34th Street Gainesville, Florida 32608 Hon. Bob Crawford Commissioner of Agriculture The Capitol Tallahassee, Florida 32399-1550 Richard Tritschler General Counsel 513 Mayo Building Tallahassee, Florida 32399-0800 Brenda Hyatt, Chief Bureau of Licensing & Bond Department of Agriculture Mayo Building, Rm 508 Tallahassee, Florida 32399-0800
The Issue The issue is whether respondent is indebted to petitioner in the amount $5,838.59 as alleged in the complaint filed on September 19, 1996.
Findings Of Fact Based upon all of the evidence, the following findings of fact are determined: Petitioner, Bo Bass, is a watermelon farmer in Alachua County, Florida. Respondent, Hapco Farms, Inc., is licensed as a dealer in agricultural products having been issued License No. 8456 by the Department of Agriculture and Consumer Services. As required by state law, respondent has posted a $75,000 bond written by Insurance Company of North America, as surety, to assure proper accounting and payment to producers. Freddie Bell is also a watermelon farmer who operates under the name of B & G Produce. That firm is located in Williston, Florida. According to petitioner, whenever Bell has extra trucks during watermelon season, he will load petitioner’s watermelons on those trucks, deliver them to B & G Produce’s shed for packing, and then sell them to various dealers. Upon collection of the moneys for the sale of such produce, Bell would then pay petitioner. On June 17, 18 and 19, 1996, petitioner verbally agreed to entrust four loads of watermelons to B & G Produce for resale to third parties. Petitioner expected to be paid six cents per pound for his produce. On the same dates, respondent, through its field buyer, entered into an agreement with B & G Produce, but not petitioner, for the purchase of four loads of watermelons. The weight bills for those shipments reflect that, while Bo Bass was the grower on two of those shipments, B & G Produce was the seller of all four loads. After the watermelons were sold to respondent and transported to its customers, a federal inspection determined that a number of watermelons were overripe and rotten. Because of this, a portion of the loads was “dumped.” This in turn reduced the amount of money due the seller. However, respondent made a proper accounting and payment to B & G Produce, and no claim has been filed by the seller against respondent. When petitioner ultimately received only $4,691.30 from B & G Produce, he filed a complaint against respondent seeking an additional $5,838.59. There is no competent evidence that petitioner ever entered into an agreement to sell his watermelons to respondent. Therefore, if petitioner has a dispute over any moneys allegedly due, it lies with Bell, and not respondent.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the Department of Agriculture and Consumer Services enter a final order denying petitioner’s claim against the bond of respondent. DONE AND ENTERED this 31st day of March, 1997, in Tallahassee, Florida. DONALD R. ALEXANDER Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (904) 488-9675, SUNCOM 278-9675 Fax Filing (904) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this 31st day of March, 1997. COPIES FURNISHED: Honorable Bob Crawford Commissioner of Agriculture The Capitol, PL-10 Tallahassee, Florida 32399-0810 Richard Tritschler, Esquire Department of Agriculture and Consumer Services The Capitol, PL-10 Tallahassee, Florida 32399-0810 Bo Bass 2829 Southwest State Road 45 Newberry, Florida 32669 Andrew B. Hellinger, Esquire First Union Financial Center, Suite 2350 200 South Biscayne Boulevard Miami, Florida 33131-2328 Insurance Company of North America 1601 Chestnut Street Philadelphia, Pennsylvania 19192 Brenda D. Hyatt, Chief Bureau of License and Bond Mayo Building Tallahassee, Florida 32399-0800
Findings Of Fact Upon consideration of the oral 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 Petitioners are growers of watermelons and qualify as "producers" under Section 604.15(5) F.S. Respondents Smith are broker-shippers of watermelons and qualify as "dealers" under Section 604.15(1) F.S. Respondent South Carolina Insurance Company is surety for Respondents Smith. Petitioners Brewton and Respondents Smith have had a good business relationship overall, including the 1992 growing season during which several loads of high quality watermelons were sold by the Brewtons through the Smiths. Of the several loads of melons sold, only one load, the one invoiced on June 18, 1992, is at issue. Regardless of oral agreements with varying conditions for other loads, the parties agreed as of June 18, 1992 that the load of June 18, 1992, invoice 2088, (R-5), would be paid for by Respondents Smith advancing harvest costs and agreeing to pay Petitioners for the load, minus the costs of harvesting, after Respondents had received payment from the recipient. At the time of loading, everyone concerned felt the June 18, 1992 load might have some problems with it, but every attempt was made to load only quality product. Petitioners and Respondents each had input on which specific melons were loaded. At that time, Mr. Rick Smith o/b/o Respondents Smith advised Mr. Dewey Brewton, III that because the quality of the load was borderline and as a result of its borderline condition the whole load could be rejected at its ultimate destination, Respondents Smith wanted Petitioners Brewton to protect the Respondents Smith on the quality of the melons. He also specifically advised Dewey Brewton, III that the whole load could be rejected. The parties then entered into an agreement, partly oral and partly written. Rick Smith and Dewey Brewton, III understood their agreement to mean that Petitioners would absorb any loss as a result of the quality of the watermelons from that point forward, but that Respondents would not come back against Petitioners for the costs Respondents had advanced on Petitioners' behalf or for the cost of the freight. To signify this, the words "grower protects shipper on quality" was written on the invoice. On or about June 22, 1992, Rick Smith informed Dewey Brewton, III that the entire June 18, 1992 load had been rejected by the first receiver. At that time, Dewey Brewton, III accepted Rick Smith's representation and did not require further proof of rejection at the first point of delivery or request an independent inspection at the first point of delivery. He also acquiesced in Respondents shopping around for a second buyer who might take all or some of the load originally sent out on June 18, 1992, and did not request the return of Petitioners' watermelons. At that time, Rick Smith also told Dewey Brewton, III that the load might have to be held on the truck a day or two to ripen some of the watermelons for a second point of delivery. He again indicated that the whole load could be rejected again when the load was sent on to a second receiver. Dewey Brewton, III specifically agreed to let the melons ripen "a day or so," and did not request any change in the grower protection plan initially agreed to between the parties. Respondents Smith were eventually able to market the melons to a second delivery point (consignee) in Michigan. That receiver complained that the melons started breaking down and he had to dump 735 melons. Pursuant to standard custom of the trade, Respondents accepted payment of $1,944.00 for the melons, subtracted $1,831.98 they had laid out in freight costs and also subtracted the $675.18 they had advanced on behalf of Petitioners to the harvester. Thus, Respondents sustained a net loss of $563.16. Respondents absorbed the $563.16 loss and did not require any repayment of harvesting costs advanced or any freight charges from Petitioners. Dewey Brewton, III testified that he originally understood that "grower protection" meant that Petitioners "would stand behind their quality product until the ultimate point," but that he had interpreted a comment by Mr. Rick Smith on June 22, 1992 to the effect that "the grower (Petitioners) agreed to 'ride' the watermelons and the shipper (Respondent) agreed to 'ride' the freight" to mean that the growers (Petitioners) no longer had any duty to cover their own losses on the June 18, 1992 load of watermelons after the first rejection and up to final sale to the second buyer. In light of Mr. Brewton's failure to change the written language concerning protection on the invoice, his knowledge from the day of initial shipment that the June 18, 1992 load was of dubious quality, his acceptance that the first recipient had rejected the load, and his agreement that Respondents could have a further waiting/ripening/shopping around period before ultimate sale, coupled with his knowledge from the very beginning that the June 18, 1992 load could be utterly rejected at any point so as to render the endeavor a complete loss to the Petitioners, Mr. Brewton's assumption that on June 22, 1992, Respondents Smith were voluntarily waiving their written agreement that "grower protects shipper on quality" was not reasonable. On June 22, 1992, the load had already been rejected once. At that stage, the outcome of the proposed sale was considerably more precarious than when the crop was loaded on June 18, 1992. It is also found Mr. Brewton's assumption that the agreement had been modified was not knowingly or intentionally induced by the Respondents and that the assumption was not contemporaneously conveyed to Respondents Smith so that they could disabuse Mr. Brewton of his error. Upon the foregoing, it is further found that the written initial agreement that "grower protects shipper on quality" was not altered on June 22, 1992 but continued in force.
Recommendation Upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED That the Department of Agriculture and Consumer Services enter a Final Order dismissing Petitioner's complaint. RECOMMENDED this 26th day of March, 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 26th day of March, 1993. COPIES FURNISHED: Honorable Bob Crawford Commissioner of Agriculture Department of Agriculture and Consumer Services The Capitol, PL-10 Tallahassee, FL 32399-0810 Richard Tritschler, Esquire Department of Agriculture and Consumer Services The Capitol, PL-10 Tallahassee, FL 32399-0810 Brenda D. Hyatt, Chief Department of Agriculture and Consumer Services The Capitol, PL-10 Tallahassee, FL 32399-0810 Jacquelyn J. Brewton 8876 NW 115th Avenue Ocala, FL 34482 Dewey Brewton III 8876 NW 115th Avenue Ocala, FL 34482 Richard L. Smith Midwest Marketing Company P. O. Box 193 Vincennes, IN 47591 South Carolina Insurance Company Legal Department 1501 Lade Street Columbia, SC 29201-0000
The Issue Whether or not Petitioners (complainants) are entitled to recover $10,258.98, or any part thereof against Respondent dealer and his 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 Brokerage. This cause is governed by the claims made in the amended complaint. (Exhibit P-13) That amended complaint sets out the parameters of the claimed amounts as follows: AGREED PRICE PAID PRICE DIFFERENCE CLAIMED 6-13-92 Inv.#573 45,429 lbs. Jub. melons @ .04/lb.$1,816.80 (paid on 41,720 lbs.) Adv. -700.00 NWPB - 9.08 1,107.72 950.46 157.26 6-14-92 Inv.#586 48,060 lbs. Jub. melons @ .05/lb. 2,403.00 (paid @ .04/lb.) Adv. -700.00 NWPB - 9.61 1,693.39 1,202.79 490.60 6-14-92 Inv.#587 50,610 lbs. Jub. melons @ .05/lb. 2,530.50 (paid @ .04/lb.) Adv. -700.00 NWPB - 10.12 1,820.38 1,304.28 516.10 6-15-92 Inv.#592 44,800 lbs. Crim. melons @ .05/lb. 2,240.00 (paid @ .04/lb.) Adv. -700.00 NWPB - 8.96 1,531.04 1,153.04 378.00 6-15-92 Inv.#593 46,340 lbs. Crim. melons @ .05/lb. 2,317.00 (paid @ .04/lb.) Adv. -700.00 NWPB - 9.27 1,607.73 1,144.33 463.40 6-16-92 Inv.#598 47,170 lbs. Crim. melons @ .05/lb. 2,358.50 (paid @ .04/lb.) Adv. -700.00 NWPB - 9.43 1,649.07 1,177.37 471.70 6-16-92 Inv.#607 48,320 lbs. Crim. melons @ .05/lb. 2,416.00 (paid @ .04/lb.) Adv. -700.00 NWPB - 9.66 1,706.34 1,223.14 483.20 6-17-92 Inv.#628 1/ 40,890 lbs. Jub. melons @ .05/lb. 2,044.50 (no inv.# provided producer) Adv. -700.00 NWPB - 8.18 1,336.32 .00 1,336.32 6-17-92 Inv.#626 36,690 lbs. Jub. melons @ .05/lb. 1,834.50 (paid on 27,890 lbs.) Adv. -700.00 NWPB - 7.34 1,127.16 688.92 438.24 6-17-92 Inv.#627 37,300 lbs. Jub. melons @ .05/lb. 1,865.00 (paid on 30,500 lbs.) Adv. -700.00 NWPB - 7.46 1,157.54 818.90 338.64 6-17-92 Inv.#642 43,350 lbs. Job. melons @ .05/lb. 2,167.50 (paid @ .04/lb.) Adv. -700.00 NWPB - 8.67 1,458.83 1,025.33 433.50 6-18-92 Inv.#643 44,150 lbs. Crim. melons @ .05/lb. 2,207.50 (paid @ .04/lb.) Adv. -700.00 NWPB - 8.83 1,498.67 1,057.17 441.50 6-18-92 Inv.#644 45,060 lbs. Crim. melons @ .05/lb. 2,253.00 Adv. -700.00 NWPB - 9.01 1,543.99 .00 1,543.99 6-18-92 Inv.#646 43,180 lbs. Crim. melons @ .05/lb. 2,159.00 (paid on 38,380 lbs.) Adv. -700.00 NWPB - 8.64 1,450.36 1,211.32 239.04 6-18-92 Inv.645 47,070 lbs. Jub. melons @ .05/lb. 2,353.50 Adv. -700.00 NWPB - 9.41 1,644.09 .00 1,644.09 6-19-92 Inv.#663 43,520 lbs. Crim. melons @ .05/lb. 2,176.00 (paid @ .04/lb.) Adv. -700.00 NWPB - 8.70 1,467.30 1,032.10 435.20 6-19-92 Inv.#685 44,820 Crim. melons lbs. @ .05/lb. 2,241.00 Adv. -700.00 NWPB - 8.96 1,532.04 1,083.84 448.20 TOTAL DUE $10,258.98 The amended complaint admits that Respondent's deductions for advances and NWPB were appropriate on each load/invoice, and these are not in contention. The amended complaint admits that Respondent has already made the payments to Petitioners, which are indicated. It is only the claimed shortfall on each load that is at issue. At formal hearing, Petitioners discussed a load they claimed they had delivered to Respondent on 6-20-92. They had neither receipts, weight tickets, nor settlement sheets, (invoices) nor payment from Respondent on this load. This "lost load," as the parties described it, is not named in the amended complaint. Therefore, no findings of fact can be made thereon, due to lack of jurisdiction. Petitioner's Exhibit 1 appears to apply to loads 560, 561, 562, and 563, all loads occurring on 6-11-92. That date and those load numbers also are not listed in the amended complaint. Accordingly, no findings of fact will be made with regard to loads 560, 561, 562 or 563, due to lack of jurisdiction. Petitioners delineated two theories of recovery as to the seventeen claims actually named in the amended complaint. Petitioners claimed the right to recover from Respondents due to Respondent dealer's failure to pay for all or some of the poundage delivered by Petitioners to Respondent dealer on the following loads: 6-13-92 #573, 6-17-92 #628, 6-17-92 #626, 6-17-92 #627, 6-18-92 #644, 6-18-92 #646, 6-18-92 #645, 6- 19-92 #685. Petitioners claim the right to recover from Respondents due to Respondent dealer's failure to pay per pound at the rate of one cent below the "wire price" per pound on the following loads: 6-14-92 #586, 6-14-92 #587, 6- 15-92 #592, 6-15-92 #593, 6-16-92 #598, 6-16-92 #607, 6-17-92 #642, 6-18-92 #643, and 6-19-92 #663. For 6-15-92 18-24 lb. average 4.50 - 5.00 cents, few 6.00 26-32 lb. average 4.50 - 5.00 cents, few 6.00 For 6-16-92 18-24 lb. average 5.00 - 6.00 cents 26-32 lb. average 5.00 - 6.00 cents For 6-17-92 18-24 lb. average 6.00 cents, few higher and lower 26-32 lb. average 6.00 cents, few higher and lower For 6-18-92 18-24 lb. average 6.00 - 6.50 cents, "Wire prices" are printed in "spread" form. Evidence was presented (Composite Exhibit P-14), and the parties are agreed, that the following were the "wire prices" at certain times material. Otherwise, there is no evidence in this record concerning amounts or dates of "wire prices." mostly 6.00, few higher 26-32 lb. average 6.00 - 6.50 cents, mostly 6.00, few higher and lower For 6-19-92 18-24 lb. average 6.00 - 6.50 cents, mostly 6.00, few higher 26-32 lb. average 6.00 - 6.50 cents mostly 6.00, few higher and lower Since no "wire prices" were proven up for the days involved in loads 586, and 587, Petitioners are not entitled to recover on their theory of entitlement for those loads. Upon the allegations of the amended complaint and the "wire prices" proven, it appears that Petitioners have already received payment from Respondent dealer at one cent (or better) below the proven low-end "wire price" on loads 592, 593, 598, and 607. Therefore, Petitioners are not entitled to recover on their theory of entitlement for those loads. Petitioners (grower-producers) believed that they had negotiated an oral contract with Respondent dealer to the effect that the dealer would pay Petitioners at the rate of one cent below the "wire price" per pound on those days that Respondent took delivery from them of their watermelons. Respondent testified contrariwise that although such an arrangement was discussed, the parties' final oral agreement was concluded in terms of an excellent quality of every melon, and after negotiations were completed, the dealer understood that the price he was to pay the producers was just the same price per pound he paid all his other producers on any given day. In determining the daily uniform price per pound, Respondent admitted that he used the "wire price" as a guideline, but never explained exactly how the "wire price" constituted a guideline. The Petitioners and Respondent dealer had dealt with one another over a period of years. In past years they had discussed what was to occur if any loads were refused, in whole or in part, by retail buyers at their ultimate destinations. Over the years, the parties had agreed that for loads involving a "small deduct," that is, a small amount of refused melons, Respondent had unilateral authority to informally agree to dump the bad melons or take whatever he could get for the load and pass on the monetary loss to Petitioners. Petitioners conceded that the discretion to take or not take such losses always had been entirely that of Respondent during the parties' several years of past dealing, and that before 1992, whenever an ultimate recipient had refused melons, the "deduct" had been "worked out" this way with no prior notice to Petitioners. In short, by Petitioners' own evidence, it appears that up until the loads at issue in 1992, Petitioners had always simply accepted the Respondent's calculations concerning refusals for quality without requiring proof by way of a federal inspection. Mr. Randal Roberts Sr. testified that in his opinion, any "deduct" over 300 pounds was not "small." However, no evidence defining an industry standard for the relative terms of "small deducts" or "large deducts" was introduced. In light of the parties' standard arrangement over the whole course of their business dealings, it is deemed that Respondent continued to be within his rights in 1992 to unilaterally decide which melons to pay Petitioners for and which melons not to pay Petitioners for where quality became an issue between himself and the ultimate recipients. Petitioners estimated that on a scale of one to ten, the melons they had delivered to Respondent dealer in 1992 were "about a seven" when they delivered them to him, even though Respondent's agents culled out the really bad melons. It may be inferred therefrom that the loads were no better and were probably in worse condition when they reached their ultimate destinations. Respondent testified that he had dumped all or part of the remaining loads in question or reduced the price per pound from that of the "wire price" due to the poor quality of the melons based on complaints or refusals by the recipients when the melons reached their ultimate destinations. These are loads 573, 628, 626, 627, 644, 646, 645, 685, 642, 643, and 663. Although Petitioners adamantly denied that they had ever agreed to rely on federal inspections to determine which melons were bad and which were good, Respondent had gotten federal inspection sheets (R-2) to support his decision to dump all or part of loads 628, 643, 645, 663, and 685. Respondent dealer introduced his business journal (R-3) to show that load 643 was "bad" and load 644 was "dumped" due to poor quality. Respondent dealer introduced his contemporaneous business journal (R- 3) to show that except for loads 607, 643, 644, 663, and 685 he had paid as much to Petitioners per pound as to anyone else on the respective days he had taken delivery. On those loads he had paid Petitioners less than some other producers whom he dealt with on those days, but contended that he had reduced the price per pound paid to Petitioners on those days on the basis of poor quality, too. Nonetheless, 607 was paid at least at one cent below the "wire price" (See Finding of Fact 14), 643 was shown bad by inspection, 644 was dumped in its entirety per the dealer's journal, and 663 and 685 were shown bad by inspection. Upon the foregoing, it is determined that Respondent was within the parameters of his standard dealings with Petitioners where he reduced the price per pound of loads 643 and 663 on the basis of quality, just as he was within his clear unilateral authority and discretion to dump or discard whole melons from loads 628, 644, 645, and 685. After accounting for the foregoing loads, that leaves only loads 573, 626, 627, and 646 left in issue as to poundage and only load 642, (for which Respondent paid 4 cents per pound instead of one cent below the "spread" of the "wire price" for that day) at issue as to price per pound. As to each of these loads, Respondent produced business records wherein he had made contemporaneous notations concerning the quality complaints and/or number of melons rejected by the ultimate recipients. (R-2) Respondent did not pay Petitioners anything on load 645 because of freight deductions and Respondent also made freight deductions on some other invoices. There is no evidence in this record regarding how the parties had negotiated who would bear the ultimate cost of the freight. However, the Petitioners have not proven any entitlement to recover these charges which Respondent advanced and paid. Likewise, Petitioners also have not set out any trail by which the undersigned can trace any mathematical errors on any loads/settlement sheets to the Respondent dealer over Petitioners. Under the parties' standard mode of doing business, Respondent had clear unilateral authority and discretion to dump or discard whole melons for quality and pay Petitioners nothing for the whole melons dumped or discarded in loads 573, 626, 627, and 646. Upon the foregoing, it is determined that Respondent was also within the parameters of his standard dealings with Petitioners in not paying full negotiated price per pound on load 642 where some lesser price per pound could be negotiated with the ultimate recipient as to quality.
Recommendation Upon the foregoing findings of fact and conclusions of law, it is recommended that the Department of Agriculture enter a final order dismissing all named claims against Respondents. RECOMMENDED this 7th day of July, 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 7th day of July, 1993.
