The Issue Whether or not Petitioners (complainants) are entitled to recover $5,640.19 or any part thereof against Respondent dealer and Respondent surety company.
Findings Of Fact Petitioners are growers of watermelons and qualify as "producers" under Section 604.15(5) F.S. Respondent Eddie D. Griffin d/b/a Quality Brokerage is a broker-shipper of watermelons and qualifies as a "dealer" under Section 604.15(1) F.S. Respondent United States Fidelity & Guaranty Company is surety for Respondent Griffin d/b/a Quality. Petitioners' claims against the dealer and his bond are listed in the Amended Complaint in the following amounts and categories: 6-18-92 Inv. #657 45,580 lbs. Crimson melons @ .05 lb. $2,279.00 Advance - 700.00 NWPB* - 9.12 $1,569.88 6-19-92 Inv. #668 2,490 lbs. Crimson melons @ .05 lb. $ 124.50 (paid for 42,860 lbs. short 2,490 lbs.) NWPB* - .50 124.00 6-20-92 Inv. #695 6,818 lbs. Crimson melons @ .05 lb. $ 340.90 (paid for 39,062 lbs. short 6,818 lbs.) NWPB* 1.36 339.54 6-20-92 Inv. @ #702 .05 39,880 lbs. Sangria melons lb. $1,994.00 Advance - 700.00 Packing Straw - 10.00 NWPB* - 7.98 Pmt. - 90.00 1,186.02 6-21-92 Inv. @ #706 .05 44,740 lbs. Sangria melons lb. $2,237.00 Advance - 700.00 Packing Straw - 10.00 NWPB* - 8.95 1,518.05 6-22-93 Inv. @ #716 .04 11,280 lbs. Crimson melons lb. NWPB* - 2.32 460.88 6-22-92 Inv. @ #709 .04 46,740 lbs. Crimson melons lb. $1,869.60 Advance - 700.00 Packing Straw - 10.00 NWPB* - 9.35 1,150.25 Deducted for #706 - 441.82 441.82 PAID 708.43 Total Claimed $5,640.19 *NWPB = National Watermelon Promotion Board Fee Petitioners and Respondent dealer have had an oral business relationship for four to five years. Both parties agree that their oral agreement initially called for a federal inspection to be done on each load if the load were refused in whole or in part by the ultimate recipient. Respondent Griffin contended that over the years there had been further oral agreements to "work out" or "ride out" small discrepancies or partial refusals of loads without resorting to federal inspections, the cost of which inspections could eliminate the entire profit on single loads. Petitioners denied that such an amended oral agreement was ever reached and further maintained that the amounts of the loads at issue herein could not be considered "small" by any interpretation. Respondent submitted no evidence as to what the relative terms, "large" and "small," mean in the industry. Consequently, it appears that there was never a meeting of the minds of the parties on the alleged oral contract amendments relied upon by Respondent. Respondent testified that in past years, prior to 1992, he had interpreted the term "ride it out" to mean that he would simply accept the hearsay statements of ultimate recipients that named poundages of melons were bad and he would let the ultimate recipients pay for only the melons they said were good. Respondent would thereafter absorb any losses himself, not passing on the loss by deducting any amount from the full amount he would normally pay to the growers within ten days. However, 1992 was such a bad year for melons that the Respondent dealer chose not to absorb the greater losses and passed them on to the growers by way of deductions on "settlement sheets." In 1992 Respondent sent Petitioners the settlement sheets with the deductions explained thereon with the net payments as much as thirty days after the ultimate sales. Upon the foregoing evidence, it appears that Respondent had established a course of business whereby Petitioners could reasonably have expected him to absorb any losses occasioned by Respondent's reliance on hearsay statements of the ultimate recipients concerning poor quality melons unless Respondent chose not to test the questionable melons with a federal inspection. Petitioners obtained Exhibit P-5 for load 657 at Respondent dealer's place of business, but were not certain it applied to the load Mr. Tucker claimed he delivered to Respondent on 6-18-92 because Mr. Tucker did not know his load number that day. The exhibit represents the weight ticket Petitioners believe applies to the load which Mr. Tucker claimed to have delivered to Respondent dealer on 6-18-92. However, the exhibit bears two other names, "Jones and Smith," not Petitioners' respective names of Tucker or Watson. It has "WACC" handwritten across it, which Mr. Tucker claimed signified the name of his watermelon field. The number "657" also has been handwritten across it. There is no evidence of who wrote any of this on the exhibit. Respondent denied that load 657 was received from Mr. Tucker. The exhibit shows a printed gross weight of 78,900 lbs., tare weight of 32,860 lbs. and net weight of 66,800 lbs. Net weights are supposed to signify the poundage of melons delivered to the dealer. Nothing on the exhibit matches Mr. Tucker's journal entry (Petitioners' Exhibit 3) of delivering 45,580 lbs. of watermelons to Respondent dealer on 6- 18-92. Mr. Tucker testified that he was never paid for his delivery. Respondent denied there was such a delivery and testified that he paid Jones and Smith for load 657. Petitioners have established no entitlement to their claim of $1,569.88 on Invoice 657. Petitioners' Exhibit P-4 represents two weight tickets secured from Respondent dealer's records that Petitioners contend apply to load 668. The first page has "45,350/6-19-92/Scott Tucker WACC" handwritten across it. None of the four poundages imprinted thereon match any of the amounts claimed by Petitioners for invoice 668, and subtracting amounts testified to also does not conform these figures to Petitioners' claim on load 668. The second page weight ticket shows a date of 6-18-92 and a weight of 34,260 lbs. It also does not match Petitioner's claim that they were owed for 45,350 lbs. but were paid for only 42,860 lbs., being paid 2,490 lbs. short. Exhibit P-8 is the 668 invoice/settlement sheet which Respondent provided to Petitioners and shows invoice 668 with date of 6-19-92, tare and pay weight of 42,860 lbs. at $.05/lb. for $2,143.00 less $8.57 melon adv. association (a/k/a NWPB, see supra) for $2,134.43, less a $700.00 advance and $10.00 for packing straw for a total due Petitioners of $1,424.43 which Respondent has already paid. Petitioners have established no entitlement to their claim of $124.00 on Invoice 668. Petitioners Exhibit P-6 represents two weight tickets secured from Respondent dealer's records. The first page has "45,880 lbs./6-20-92/Scott Tucker Crimson WACC 695" handwritten across it. None of the printed gross, tare, or net weights thereon match any of the amounts claimed by Petitioners for invoice 695. The second page shows the date 6-20-92 and a printed net weight of 32,000 lbs. Respondent dealer provided Petitioners with Exhibit P-7, invoice/settlement sheet 695 dated 6-20-92 showing tare and pay weights of 39,062 lbs. priced at $.05/lb. totalling $1,953.10, less melon adv. assoc. (a/k/a NWPB) fee of $7.81, for $1,945.29, less $700.00 advanced, less $10.00 for packing straw for a total of $1,235.29. The foregoing do not support Petitioner Tucker's claim based on his journal entry (P-3) that he was entitled to be paid for 45,880 lbs. he claims he delivered that day instead of for 39,062 pounds (short by 6,818 pounds) with balance owing to him of $339.54. Respondent has paid what was owed on invoice 695. By oral agreement at formal hearing, Petitioners' Composite Exhibit 9 shows that Petitioner Tucker delivered 39,880 lbs. of melons to Respondent dealer on 6-20-92 and Petitioner Watson received back from Respondent dealer an invoice/settlement sheet 702 showing 39,880 pounds @ $.05/lb. equalling $1,994.00 and that although $1,994.00 was owed Petitioners, Respondent thereafter subtracted for $800.00 worth of returned melons, a $700.00 advance, $7.98 for melon adv. association (a/k/a NWPB), and $10.00 for packing straw, and that a balance was paid to Petitioners of only $90.00. This is arithmetically illogical. The subtractions total $1,517.98. Therefore, if all of Respondent's subtractions were legitimate, the total balance due Petitioners would have been $476.02. If the right to deduct for the $800.00 in returned melons were not substantiated by Respondent dealer, then Petitioners would be due $1,276.02. Since all parties acknowledge that $90.00 was already paid by Respondent dealer, then Petitioners are due $1,186.02 if Respondent did not substantiate the right to deduct the $800.00. Load 702 was "graded out," i.e. accepted as satisfactory, by a representative of Respondent dealer or a subsequent holder in interest when the melons were delivered by Petitioners to Respondent dealer. That fact creates the presumption that the melons were received in satisfactory condition by the Respondent dealer. Nothing persuasive has been put forth by the Respondent dealer to show that the situation concerning the melons' quality had changed by the time the load arrived at its final destination. Respondent got no federal inspection on this load and relied on hearsay statements by persons who did not testify as to some melons being inferior. In light of the standard arrangement of the parties over the whole course of their business dealings (see Findings of Fact 5-7 supra), Petitioners have proven entitlement to the amount claimed on load 702 of $1,186.02. By oral agreement at formal hearing, Petitioners' Composite 10 shows Petitioners Tucker and Watson delivered 44,740 lbs. of melons to Respondent dealer on 6-21-92. At $.05/lb., Petitioners were owed $2,237.00, less melon adv. association fee (a/k/a NWPB) of $8.95, $700.00 for an advance, and $10.00 for straw. Those deductions are not at issue. Therefore, Petitioners would be owed $1,518.05, the amount claimed, from Respondent. However, the invoice also notes that Respondent made a $268.18 deduction for melons returned. Respondent's Composite Exhibit 1 purports to be a BB&W Farms Loading Sheet and Federal Inspection Sheet. Respondent offered this exhibit to show that only $68.18 was realized by him on load 706 which he attributed to Petitioner Watson. However, the federal inspector did not testify as to the results of the inspection, the inspection sheet itself is illegible as to "estimated total," the "estimated total" has been written in by another hand as "$62.60," and there was no explanation on the Composite Exhibit or in testimony as to how Respondent dealer came up with $200.00 in "return lumping charges" as also indicated on Exhibit R-1. Accordingly, Petitioners have established that with regard to load/invoice 706, they delivered watermelons worth $2,237.00 to Respondent dealer and Respondent dealer did not affirmatively establish that any melons were bad, despite the federal inspection sheet introduced in evidence. Petitioners have proven entitlement to their claim on invoice 706 for $1,518.05. However, Petitioners conceded that Respondent actually paid them $441.82 on invoice/settlement sheet 706. Therefore, they are only entitled to recoup a total of $1,076.23 on their claim for Invoice 706. In the course of formal hearing, Respondent dealer admitted that, with regard to load invoice 716, (Tucker) he did owe Petitioners $460.88 for 275 watermelons, and that it had not been paid purely due to clerical error. By oral agreement at formal hearing, Petitioners' Composite Exhibit 12 (Invoice and Weight Tickets 709, Watson) shows Petitioner Watson delivered 46,740 lbs. of melons to Respondent dealer on 6-22-92 and at $.04 lb., Petitioners were owed $1,869.60, less appropriate deductions. Petitioners conceded that Respondent dealer appropriately deducted $9.35 for melon adv. association (a/k/a NWPB), $700.00 for an advance, and $10.00 for packing straw, bringing the amount they were owed to $1,150.25. Petitioners and Respondent are in agreement the Respondent paid only $708.43 of the $1,150.25 owed on invoice/settlement sheet 709 because Respondent dealer also deducted from the amount owed on invoice 709 the $441.82 he had previously paid out on Invoice 706. See, Finding of Fact 13, supra. Since Petitioners have established that they were owed $1,518.05 on invoice 706 but were paid only $441.82 thereon, it appears that Petitioners should be paid $1,076.23 on Invoice 706 and realize nothing on Invoice 709.
Recommendation Upon the foregoing findings of fact and conclusions of law, it is recommended that the Department of Agriculture enter a final order awarding Petitioners $1,186.02 on invoice 702, $1,076.23 on invoice 706, and $460.88 on invoice 716 for a total of $2,723.13, dismissing all other claimed amounts, and binding Respondents to pay the full amount of $2,723.13, which in United States Fidelity & Guaranty Company's case shall be only to the extent of its bond. RECOMMENDED this 30th day of June, 1993, at Tallahassee, Florida. ELLA JANE P. DAVIS Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 30th day of June, 1993. COPIES FURNISHED: Scott Tucker and Phillip Watson Route 2 Box 280 Trenton, FL 32693 Eddie D. Griffin d/b/a Quality Brokerage Post Office Box 889 Immokalee, FL 33934 William J. Moore USF&G Post Office Box 31143 Tampa, FL 33631 United States Fidelity & Guaranty Company Post Office Box 1138 Baltimore, MD 21203 Brenda Hyatt, Chief Department of Agriculture Division of Marketing, Bureau of Licensure and Bond Mayo Building Tallahassee, FL 32399-0800 Honorable Bob Crawford Department of Agriculture and Consumer Services Commissioner of Agriculture The Capitol, PL-10 Tallahassee, FL 32399-0810 Richard Tritschler, Esquire General Counsel Department of Agriculture and Consumer Services The Capitol, PL-10 Tallahassee, FL 32399-0810
The Issue The basic issue in this case is whether the Respondent Lawrence J. Lapide, Inc., is indebted to the Petitioner Raiford Dunn for agricultural products purchased by the Respondent from the Petitioner. BACKGROUND AND INTRODUCTION By complaint filed with the Bureau of License and Bond, Florida Department of Agriculture and Consumer Services, on October 7, 1986, and submitted to the Division of Administrative Hearings on November 21, 1986, for hearing, the Petitioner seeks payment of a balance due on watermelons sold and delivered to Lawrence J. Lapide, Inc., on June 17, 18, and 19, 1986. At the hearing the Petitioner and the representative for the Respondent Lapide both testified and both presented the testimony of other witnesses. The Petitioner and the Respondent Lapide also both offered exhibits which were received in evidence. Following the hearing, none of the parties ordered a transcript of the proceedings. Further, none of the parties have filed any post- hearing proposed findings of fact or conclusions of law as allowed by Section 120.57(1)(b)4, Florida Statutes.
Findings Of Fact Based on the parties stipulations, on the testimony at the hearing, and on the exhibits received in evidence I make the following findings of fact. l. The Respondent Lawrence J. Lapide, Inc., is a New York corporation. It is a licensed dealer in agricultural products, having been issued license number 1274. For the time period in question, Lawrence J. Lapide, Inc., had a bond posted through Peerless Insurance Company in the amount of $50,000.00. The bond number was RG-30-44. The Petitioner is a producer of agricultural products, specifically watermelons. The Petitioner has been raising watermelons for approximately 25 years. The Petitioner knows Mr. Lawrence J. Lapide and has had business dealings with Lawrence J. Lapide, Inc., on several occasions during the past 4 or 5 years. During 1986 the Petitioner sold three loads of watermelons to Lawrence J. Lapide, Inc., prior to the four loads which are the subject of this case. (The parties do not have any disputes about the three earlier loads.) During June of 1986, Mr. Lawrence J. Lapide met with the Petitioner to discuss the purchase of watermelons. Mr. Lapide, acting on behalf of Lawrence J. Lapide, Inc., agreed to buy four loads of watermelons. Mr. Lapide purchased 3 loads of small watermelons (referred to as "dinks") at 3 cents per pound and l load of medium watermelons at 5 cents per pound. When the watermelons were loaded and weighed, the totals were as follows: Pig # 676086 43,290 pounds x 3 cents $1,298.70 Pig # 677969 47,980 pounds x 3 cents $1,439.40 Pig # 676036 43,910 pounds x 3 cents $1,317.30 Pig # 677047 45,640 pounds x 5 cents $2,282.00 Thus, the total agreed price for the four loads of watermelons was $6,337.40. When the Petitioner and Mr. Lapide agreed to the sale of the four loads of watermelons, the terms of the sale included an understanding that the transaction was F.O.B. at Sumterville, Florida. The agreement between the parties included an understanding that Mr. Lapide would provide the trailers to haul the watermelons and Mr. Lapide would pay all transportation charges for the watermelons. Pursuant to the agreement of the parties, payment for the watermelons was due "when they moved over the scale," i.e., as soon as the trucks were loaded and weighed. Finally, the evidence shows that the agreement between the parties was to the effect that title and risk of loss to the watermelons passed to the Respondent Lapide on shipment, with all remedies and rights for the Petitioner's breach reserved to the Respondent Lapide. The watermelons in question were loaded on June 17, 18, and 19, 1986, on trailers provided by Mr. Lapide. Pursuant to Mr. Lapide's request, as soon as each truck was loaded, the Petitioner called the transportation company to advise them that the melons were loaded and ready to be shipped. When the watermelons were loaded, they were in good marketable condition and if anthractnose rot was present on the watermelons, it was not visible at the time of loading. During the week of June 16, 1986, the Petitioner loaded watermelons for Mr. James Hill at the same time he was loading watermelons for the Respondent Lapide. The watermelons loaded for Mr. Hill came from the same fields as the watermelons loaded for the Respondent Lapide. Mr. Hill did not have any problems with the loads of watermelons he bought from the Petitioner during the week of June 16, 1986. Two of the loads of watermelons received by the Respondent Lapide were not inspected when received in New York. Those two loads contained saleable watermelons although an unspecified percentage of the watermelons in the two uninspected loads were unsaleable. The Respondent Lapide sold watermelons from the two uninspected loads. Two of the loads of watermelons received by the Respondent Lapide were inspected after they were received in New York. The inspections showed that one load contained anthractnose rot in various stages in 44 percent of the watermelons and that the other load contained anthractnose rot in various stages in 79 percent of the watermelons. The Respondent Lapide dumped the last two loads of watermelons. The Respondent Lapide has previously paid the Petitioner $1,500.00 of the amount due for the four loads of watermelons in question.
Recommendation Based upon all of the foregoing, it is recommended that the Respondent Lawrence J. Lapide, Inc., be ordered to pay to the Petitioner the sum of $4,837.40. It is further recommended that if the Respondent Lawrence J. Lapide, Inc., fails to timely pay the Petitioner as ordered, :the Respondent Peerless Insurance Company then be ordered to pay the Department as required by Section 604.21, Florida Statutes, and that the Department reimburse the Petitioner in accordance with Section 604.21, Florida Statutes. DONE AND ENTERED this 2nd day of June, 1987, at Tallahassee, Florida. MICHAEL M. PARRISH, 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 2nd day of June, 1987. COPIES FURNISHED: William C. Harris, Esquire Florida Department of Agriculture and Consumer Services Mayo Building Tallahassee, Florida 32301 Lawrence J. Lapide, Inc. 3 Willshire Court Freeport, New York 11236 Peerless Insurance Company 62 Maple Avenue Keene, New Hampshire 03431 Ted Helms, Chief Bureau of License and Bond Lab Complex Tallahassee, Florida 32399-1650 Lawrence J. Marchbanks, Esquire MARCHBANKS & FEAN 4700 N.W. 2nd Avenue, Suite 101 Boca Raton, Florida 33432 Hon. Doyle Conner Commissioner of Agriculture The Capitol Tallahassee, Florida 32399-0810 =================================================================
Findings Of Fact The Respondents, F. H. Dicks, III; F. H. Dicks, IV; and F. H. Dicks Company, are wholesale dealers in watermelons which they purchase and sell interstate. The Respondents' agents during the 1991 melon season in the Lake City area were Harold Harmon and his son, Tommy Harmon. The Harmons had purchased watermelons in the Lake City area for several year prior to 1991, and the Petitioner had sold melons through them to the Respondents for two or three seasons. The terms of purchase in these prior transactions had always been Freight on Board (FOB) the purchaser's truck at the seller's field with the farmer bearing the cost of picking. The terms of purchase of the melons sold by Petitioner to Respondents prior to the loads in question had been FOB the purchaser's truck at the seller's field with the farmer bearing the cost of picking. One of the Harmons would inspect the load being purchased during the loading and at the scale when the truck was weighed out. After this inspection, the melons accepted by Harmon were Respondents'. Price would vary over the season, but price was agreed upon before the melons were loaded. Settlement had always been prompt, and the Harmons enjoyed the confidence of the local farmers. On June 11, 1991, Petitioner was unable to fill out a load of regular size melons being sold to Respondent. Tommy Harmon was present and instructed Petitioner to finish the load with Pee Wee (smaller) melons. There were 10,602 pounds of Pee Wee melons loaded which Tommy Harmon agreed to purchase at 10 per pound. On June 18, 1991, a load of 49,330 pounds of Mirage melons was loaded for the Respondents. It is controverted by F. H. Dicks whether Harold Harmon was present when these melons were loaded; however, Dicks was uncertain and Harmon testified he could not remember. Petitioner testified Harmon was present, and inspected and accepted the melons under the same terms as all prior loads for a price of 6 per pound. Petitioner's testimony is uncontroverted, and there is no indication that the terms for this load were different from the other transactions, that is, FOB the purchaser's truck at the seller's field with the farmer bearing the cost of picking. Under the terms of sale, FOB purchaser's truck at seller's field, the Respondent bore the costs of transportation and the risk of refusal of the produce. Respondent's recourse was against the purchaser who refused delivery. If there was a problem with the grade, the Respondents also bore the risk of loss on sales which they made and which were rejected. The Respondents owe the Petitioner $1,060.20 for the Pee Wee melons, and $2,959.80 for the Mirage melons.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is, RECOMMENDED: Respondents be given 30 days to settle with the Petitioner in the amount of $4,020, and the Petitioner be paid $4,020 from Respondents' agricultural bond if the account is not settled. DONE and ENTERED this 6th day of October, 1992, in Tallahassee, Florida. STEPHEN F. DEAN 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 6th day of October, 1992. COPIES FURNISHED: Terry McDavid, Esquire 128 South Hernando Street Lake City, FL 32055 F. H. Dicks, III c/o F. H. Dicks Company P.O. Box 175 Barnwell, SC 29812 Bob Crawford, Commissioner Department of Agriculture The Capitol, PL-10 Tallahassee, FL 32399-0810 Brenda Hyatt, Chief Department of Agriculture Division of Marketing, Bureau of Licensure and Bond 508 Mayo Building Tallahassee, FL 32399-0800 South Carolina Insurance Company Legal Department 1501 Lady Street Columbia, SC 29202 Victoria I. Freeman Seibels Bruce Insurance Companies Post Office Box One Columbia, SC 29202 Richard Tritschler, Esquire Department of Agriculture The Capitol, PL-10 Tallahassee, FL 32399-0810
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 Is Petitioner entitled to $7,433.00, or any part thereof, from Respondent on the basis of a brokered sale of watermelons?
Findings Of Fact At all times material, Petitioner Terry McCully was a first-year independent grower of Sangria watermelons in Jasper, Florida. Respondent is a professional broker of produce. On June 13, 1999, Petitioner and Nolan Mancil, known to Petitioner as a watermelon buyer from Georgia representing Respondent, "walked" Petitioner's sole field. On June 13, 1999, Petitioner and Mr. Mancil agreed that Respondent would pay 10¢ per pound for watermelons from Petitioner's sole field of watermelons. However, Petitioner also understood that ultimately, his payment would be based on whatever the "market price" was, per load. Petitioner had no prior experience with how "market price" is defined or determined. At all times material, Nolan Mancil was acting as an agent of Respondent, and regardless of the extent of the authority actually authorized by Respondent, Mr. Mancil had, with Respondent's concurrence, apparent authority for all agreements reached with Petitioner. According to Respondent's President, Mr. Ward, the standard in the industry is that no value is placed on an agricultural commodity until a final price is determined with the ultimate consumer/retailer. Respondent produced business records tracking each of the six loads harvested from Petitioner's field (including the four loads in dispute) and showing the accepted weights for each load. According to Mr. Mancil, "market price" is "zero," unless some amount is paid by the retailer to the broker on delivery and the amount paid on delivery constitutes "the market price." He denied ever telling Petitioner that their oral contract would use the United States Department of Agriculture National Watermelon Report (USDA Report) to specifically set a daily market price, although he admitted that at a later point in time, under changed conditions (see Finding of Fact No. 19) he had told Petitioner that the USDA Daily Report could be the maximum price. Petitioner conceded that he received the USDA Report from the Department of Agriculture Extension Agent only after a dispute arose and Petitioner had begun to prepare his claim. The undersigned infers therefrom that Petitioner was only aware of this methodology of setting a market price "after the fact." On Monday, June 14, 1999, Nolan Mancil's harvesters and graders entered Petitioner's field. Petitioner agreed to pay for the harvesting by Respondent's deduction of harvesting costs from each load after sale to the ultimate buyer, but at this point Petitioner also expected Respondent to pay him by the load, each load, immediately after sale at the ultimate point of sale (FOB). On Tuesday, June 15, 1999, trucks hired by Mr. Mancil and/or Respondent began removing watermelons from Petitioner's field. On that day, Mr. Mancil indicated that the watermelons being loaded were worth only 8-1/2¢ per pound. Petitioner agreed to the change in the amount to be paid. At some point, Petitioner accommodated Mr. Mancil by getting a truck, driver, and loaders, and by feeding Mr. Mancil's crew members. Petitioner seeks no reimbursement for these accommodations. Respondent took two truckloads away on June 15, 1999. Load #3664 of 46,340 pounds "shipped weight" and 45,830 pounds "accepted weight" were brokered by Respondent to a retailer at 8¢ per pound. Load #3692 of 48,060 shipped weight and 43,392 pounds accepted weight were brokered to a retailer at 9¢ per pound. Respondent's business records show that on the first (undisputed) load, the sale to a retailer was contracted by Respondent at 8¢ per pound, but when the time came to settle- up, the payment was made by Respondent's retail customer at the small melon size (13-plus pounds), not at the medium or large melon size. Respondent's business records further show that the second (undisputed) load was contracted at 9¢ per pound but was ultimately paid-out at the average weight per melon of 15.4 pounds instead of at 19.2 pounds per melon, after an initial rejection by the first buyer. No brokerage fee was imposed by Respondent on either of these undisputed loads, and on each of these loads, Respondent suffered a substantial loss. These losses were not passed on to Petitioner due to their "immediate cash payment" arrangement. Respondent immediately paid Petitioner for both loads at the agreed rate of 8-1/2¢ per pound, less harvesting costs and mandatory government fee. Petitioner does not dispute deduction of the government fee from the first two loads. Indeed, Petitioner's claim does not address the amount, method, or appropriateness of Respondent's payment to Petitioner for these first two loads. Petitioner's claim only addresses the last four loads harvested after June 15, 1999. After the first two loads, Mr. Mancil informed Petitioner that Respondent could no longer pay Petitioner in cash immediately after each load, but would henceforth pay Petitioner within 30 days. There is no dispute that Petitioner reluctantly agreed to this change in the timing of payment. Mr. Mancil claimed that he told Petitioner, either beginning with the third load or sometime between the third and fourth loads, that the USDA Report's daily price would be the highest price Petitioner could be paid by Respondent. According to Mr. Ward, over the four loads in dispute, the price received by Respondent from retailers was 7¢ per pound adjusted downward due to market conditions such as watermelon size being less than expected, smaller watermelons being in less demand, and the watermelons being in poor condition when accepted by the retailer(s). According to Mr. Ward, the net weight of a load is determined by deducting the truck's empty weight from the loaded weight of the truck; then the melons in the truck are counted, and that count is divided into the net weight, to get the average weight per melon. Petitioner maintained that he was never advised by Mr. Ward or Mr. Mancil that the watermelons in the last four loads were the wrong size or that many melons were not good. Mr. Mancil stated that he believed he had indicated to Petitioner that the watermelons in the last four truckloads were actually smaller than the size anticipated when the deal was struck on June 13, 1999, and that the watermelons were of poorer quality. He conceded that he was not sure Petitioner had understood him. There is no dispute that Petitioner's field was rather overgrown or that watermelons could be harvested despite this overgrowth. The overgrowth could have obscured the size and condition of the watermelons until after harvest. After the sixth load, neither Respondent nor Mr. Mancil sent any more trucks. There was never an agreement that Respondent would buy all the watermelons in Petitioner's field. Petitioner found it necessary to obtain trucks himself to haul away and dump the remaining watermelons which were rotting in his field. He seeks no reimbursement for this expense. Upon the foregoing Findings of Fact, I also find that the watermelons in the last four loads were smaller and inferior in quality to what had been expected. On June 16, 1999, 42,140 pounds shipped weight of watermelons were loaded by Respondent from Petitioner's field in Load #3691. Petitioner is claiming 7¢ per pound on the basis of a USDA Report on every pound for $2,879.00, less harvesting costs of $781.00 for $2,098.00. On June 17, 1999, 43,500 shipped weight of watermelons were loaded by Respondent from Petitioner's field in Load #3685. Petitioner is claiming 6¢ per pound on the basis of a USDA Report for every pound for $2,610.00, less harvesting costs of $826.00 for $1,784.00. The same day, 43,620 shipped weight of watermelons were loaded by Respondent from Petitioner's field in Load #3694. Petitioner is claiming 6¢ per pound on the basis of a USDA Report for every pound for $2,617.20, less harvesting costs of $830.00 for $1,787.20. Either on June 20, 21, or 22, 1999 (the dates on exhibits conflict), 43,000 shipped weight of watermelons were loaded by Respondent from Petitioner's field in Load #3702. Petitioner is claiming 6¢ per pound on the basis of a USDA Report for every pound less harvesting costs of $817.00 for $1,763.00. Petitioner bases the price per pound that he is claiming on his Exhibit P-6, the USDA Reports for June 17-18, and 21, 1999. He did not select from those reports the price per largest average weight of Sangria watermelon, but selected the middle or lowest average weight of "other red meat varieties." Except for June 21, 1999, this calculation gives Respondent the benefit of the doubt as to cents per pound for average market price on the respective USDA Reports, but in light of all the other evidence it is not an accurate method of calculating the true market price for the four disputed loads. Although Petitioner considers payment on the first two (undisputed) loads based on accepted weight to be within the parties' agreement and correct, he has not made his calculations of claim on the accepted weight of any of the last four (disputed) loads. Petitioner's calculations of claim also have not addressed the mandatory government fee for any of the last four (disputed) loads, although he considers payment on the first two, (undisputed) loads, for which Respondent deducted the mandatory fee, to be within the parties' agreement and correct. According to Respondent's business records for the four loads shipped after the Mancil-Petitioner re-negotiations of price per pound and discussion on maximum market pricing, these disputed loads were sold to retailers as follows: On June 16, 1999, Load #3691 had a shipped weight of 41,140 pounds and accepted weight of 39,940 pounds. The sale price was $0.055 per pound. The sale amount was $2,196.70. The government fee was $7.99. The harvesting cost was $781.00. A brokerage fee of $399.40 was subtracted, and Respondent's debt to Petitioner was calculated as $1,008.31. On June 17, 1999, Load #3685 had a shipped weight of 43,500 pounds and an accepted weight of 43,280 pounds. The watermelons were originally contracted for retail sale at $.0635 per pound but were refused by the first retailer as undersized. The second, alternative retailer bought these watermelons at a smaller-size market price for melons averaging 18 pounds, instead of 19.5- pound melons, and also made some returns of bad watermelons, so that the sale amount ended-up as $973.80, less a $8.66 government fee, less $826.00 for harvesting, less $216.40 brokerage fee, so that even Petitioner lost $77.26 on the deal. Also on June 17, 1999, Load #3694 had a shipped weight of 43,620 pounds and an accepted weight of 42,848 pounds. The contract sale had been for watermelons averaging 19.3 pounds, and the average size turned to out to be 16.7 pounds, and some of these melons were returned. The ultimate sale amount was $1,692.50, less a government fee of $8.72, less harvesting costs of $830.00, less brokerage fee of $321.36, with Respondent owing Petitioner $532.42. Finally, on or about June 22, 1999, the final load, #3702, had a shipped weight of 43,000 pounds, and accepted weight of 41,157 pounds, for a sale amount of $832.00; a government fee of $8.60; harvesting costs of $817.00; brokerage fee of $200.00; and amount due to Petitioner of $193.60. Again, the contract price of 6¢ from the retailer had been negotiated on melons in good condition of an average weight of 19.6 pounds, and the watermelons actually delivered by Respondent from Petitioner's field averaged 16.8 pounds, and many melons were returned to Respondent based on lack of quality. On the foregoing calculations, Respondent admits to owing Petitioner $1,269.87, rather than the $7,433.00 claimed by Petitioner's calculations. Neither party presented any evidence of an agreement to deduct a brokerage fee or how a brokerage fee was to be calculated. No brokerage fee was deducted by Respondent for the first two loads which are not in dispute, but Respondent actually suffered a loss on those loads which was not passed on to Petitioner (See Finding of Fact No. 14). For the last four loads, the only loads in dispute and the only loads for which a brokerage fee was deducted, the brokerage fee constitutes the only profit made by Respondent on the entire six-load transaction.
Recommendation Upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Agriculture enter a final order requiring Respondent Growers Marketing Service, Inc. to pay Petitioner $1,269.87, plus interest, if any, to be calculated by the Department, and requiring that if Growers Marketing Service, Inc., does not pay the amount specified within 30 days of the final order that its surety, Preferred National Insurance Company, shall be liable to Petitioner for the full amount. DONE AND ENTERED this 3rd day of April, 2000, in Tallahassee, Leon County, Florida. ELLA JANE P. DAVIS Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 3rd day of April, 2000. COPIES FURNISHED: Terry McCully 3245 Northwest 30th Lane Jennings, Florida 33806 William R. Ward, Jr., President Growers Marketing Service, Inc. Post Office Box 2595 Lakeland, Florida 33806 Preferred National Insurance Company Post Office Box 407003 Fort Lauderdale, Florida 33306 Brenda Hyatt, Chief Bureau of License and Bond Department of Agriculture and Consumer Services 508 Mayo Building Tallahassee, Florida 32399-0800 Honorable Bob Crawford Commissioner of Agriculture Department of Agriculture and Consumer Services The Capitol, Plaza Level 10 Tallahassee, Florida 32399-0810 Richard Tritschler, General Counsel Department of Agriculture and Consumer Services The Capitol, Plaza Level 10 Tallahassee, Florida 32399-0810
The Issue The issue in this case is whether Respondents owe Petitioner $13,512.09 for watermelons, as alleged in the Amended Complaint.
Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the hearing, the following relevant findings of fact are made. Cook Brown Farms is a melon farm in Punta Gorda, Florida. At all times pertinent to this proceeding, Cook Brown Farms was a "producer" as defined in Subsection 604.15(5), Florida Statutes, of agricultural products in the State of Florida. Melons come within the definition of "agricultural products" as defined in Subsection 604.15(3), Florida Statutes. J.G.L. Produce is a Florida Corporation, owned by John W. Johnson, Jr., and located in Pompano Beach, Florida. At times pertinent to this proceeding, J.G.L. Produce was licensed as a "dealer in agricultural products" as defined in Subsection 604.15(1), Florida Statutes. Andrew J. Cook, a principal owner of Cook Brown Farms, and Mr. Johnson of J.G.L. Produce entered into an oral agreement regarding the sale of watermelons grown at Cook Brown Farms. The core of this case is a dispute concerning the nature of this agreement. Mr. Cook testified that, under the agreement, J.G.L. Produce would purchase the melons at the farm at their daily market price, plus 1/2 cent to cover Cook Brown Farms' cost of picking, sorting, and placing the melons in special bins and in special pallets required by the ultimate purchaser, Kroger Supermarkets. J.G.L. Produce would provide the bins and pallets and would provide the trucks to ship the melons. Mr. Johnson testified that the agreement was not for purchase but for brokerage of the melons. J.G.L. Produce would act as broker of Cook Brown Farms' watermelons, use its best efforts to sell the melons at the highest price available, and pay Cook Brown Farms the proceeds of the sale, minus expenses and a brokerage fee of one cent per pound. Mr. Johnson testified that J.G.L. Produce never took title to or purchased the melons, and that the risk of loss always remained on Cook Brown Farms. Mr. Johnson testified that he approached Mr. Cook about the melons because he had a ready buyer in another local dealer, Delk Produce, which had a longstanding arrangement to provide melons to Kroger. Mr. Johnson agreed with Mr. Cook that the arrangement included the provision of bins and pallets by J.G.L. Produce, though Mr. Johnson stated that the arrangement also called for J.G.L. Produce to retain $0.015 per pound from the amount paid to Cook Brown Farms to cover the cost of the bins and pallets. J.G.L. Produce took approximately 24 truck loads of watermelons from Cook Brown Farms. J.G.L. Produce deducted a one cent per pound brokerage fee from each load of melons it took, except for certain loads noted below, without contemporaneous objection from Cook Brown Farms. The Amended Complaint claims that J.G.L. Produce owes money to Cook Brown Farms for five of the loads taken by J.G.L. Produce. In sum, the Amended Complaint states that J.G.L. Produce owes Cook Brown Farms $19,991.74 for the five loads, less $6,479.65 already paid, for a total owing of $13,512.09. Item One of the Amended Complaint alleges that J.G.L. Produce owes $4,438.54 for a load of 38,596 pounds at a price of $0.115 per pound, sold on April 20, 2000. Item Two of the Amended Complaint alleges that J.G.L. Produce owes $4,625.30 for a load of 40,220 pounds at a price of $0.115 per pound, sold on April 21, 2000. The Amended Complaint alleges that the melons on these two loads were inspected and approved for shipment during loading by Delk Produce employee Freddie Ellis. The Amended Complaint states that Cook Brown Farms was paid in full for the loads on May 3, 2000, but that the contested amounts were deducted from subsequent settlements by J.G.L. Produce. The evidence established that the melons claimed under Item One were initially sold to Delk Produce for delivery to Kroger. On May 3, 2000, J.G.L. Produce paid Cook Brown Farms the amount of $4,438.54, which constituted the price for 38,596 pounds of melons at $0.125 per pound, less $385.96 for the one cent per pound brokerage fee. Jay Delk, the principal of Delk Produce, testified that this load was rejected by Kroger's buyer in Virginia due to "freshness," meaning that the melons were unsuitably green. Mr. Delk stated that the melons were taken to North Carolina to ripen and eventually sold at $0.06 per pound. The final return on this load, less the brokerage fee, was $1,543.84. In its final settlement with Cook Brown Farms on May 26, 2000, J.G.L. Produce deducted the difference between the original payment of $4,438.54 and the final payment of $1,543.84. The evidence established that the melons claimed under Item Two were initially sold to Delk Produce. On May 3, 2000, J.G.L. Produce paid Cook Brown Farms the amount of $5,809.80, which constituted the price for 50,520 pounds of watermelons at $0.125 per pound, less $505.20 for the one cent per pound brokerage fee. Seminole Produce purchased 10,300 pounds of this load at $0.145 per pound, or $1,493.50. The remainder of the load was rejected by Kroger due to freshness and had to be resold at a lesser price of $0.0346 per pound, or $1,391.00. In its final settlement with Cook Brown Farms on May 26, 2000, J.G.L. Produce deducted the difference between the original payment of $5,809.80 and the final payment (after deduction of the brokerage fee) of $2,576.11. The evidence established that the melons claimed under Item Three were sold to Delk Produce. On May 9, 2000, J.G.L. Produce paid Cook Brown Farms the amount of $2,731.30, which constituted the price for 42,020 pounds of watermelons at $0.0675 per pound, less $105.05 for the brokerage fee, reduced to $0.0025 per pound. Mr. Johnson testified that he decided to forego the full brokerage fee to save money for Mr. Cook and his farm, because it was "hurting" due to the rapidly plummeting price for watermelons. Mr. Johnson discovered at this time that Delk Produce had not been retaining the agreed- upon $0.015 per pound to cover the cost of bins and pallets and decided not to lose any more money on that item. In its final settlement with Cook Brown Farms on May 26, 2000, J.G.L. Produce deducted the difference between the original payment of $2,731.30 and $2,206.05, deducting $525.25 from the original payment to cover the cost of the bins and pallets. The evidence established that the melons claimed under Items Four and Five were originally shipped to Wal-Mart in Kentucky on April 29, 2000, and were rejected on the ground that the melons were not packed to specifications. The melons were trucked back to Florida at J.G.L. Produce's expense. The melons claimed under Item Four totaled 41,100 pounds. J.G.L. Produce divided the melons into four loads and sold them to four local dealers at an average price of $0.775 per pound, totaling $3,185.41. J.G.L. Produce deducted its $0.015 charge for bins and pallets, reducing the total to $2,671.51. J.G.L. Produce then deducted $1,750.00 from the total as reimbursement for the freight charge it paid to bring the melons back to Florida after their rejection by Wal-Mart. J.G.L. Produce did not include a brokerage fee. On May 26, 2000, J.G.L. Produce paid the remaining $921.51 to Cook Brown Farms as part of the final settlement. The melons claimed under Item Five totaled 45,600 pounds. J.G.L. Produce sold 2,426 pounds to Seminole Produce at $0.10 per pound, or $242.60. J.G.L. Produce sold the remaining 43,174 pounds to Belle Glade Produce at $0.065 per pound, or $2,800. From the total for Item Five, J.G.L. Produce deducted its $0.015 charge for bins and pallets and $1,950.00 for the freight charge it paid to bring the melons back to Florida after their rejection by Wal-Mart. J.G.L. Produce did not include a brokerage fee on this load of melons. On May 26, 2000, J.G.L. Produce paid the remaining $416.64 to Cook Brown Farms as part of the final settlement. The weight of the credible evidence, excluding the hearsay that was not supported by the direct testimony of Mr. Johnson, leads to the finding that there was a brokerage arrangement between the parties. J.G.L. Produce routinely deducted brokerage fees from its payments, without objection by Cook Brown Farms. This course of dealing strongly indicates a brokerage arrangement. Mr. Cook testified as to prior dealings with J.G.L. Produce, which also involved a brokerage arrangement. The evidence indicated that J.G.L. Produce fully accounted for the five loads of melons at issue, and paid Cook Brown Farms the full amounts due and owing for those loads.
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 dismissing the Amended Complaint filed by Gin Brown Matthews, d/b/a Cook Brown Farms. DONE AND ENTERED this 21st day of March, 2001, in Tallahassee, Leon County, Florida. ___________________________________ LAWRENCE P. STEVENSON Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6947 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 21st day of March, 2001. COPIES FURNISHED: Redland Insurance Company 222 South 15th Street, Suite 600, North Omaha, Nebraska 65102 Brenda D. Hyatt, Bureau Chief Department of Agriculture and Consumer Services Mayo Building, Room 508 Tallahassee, Florida 32399-0800 John W. Johnson, President Post Office Box 1123 Pompano Beach, Florida 33061 Harold M. Stevens, Esquire Post Office Drawer 1440 Fort Myers, Florida 33902 Edward L. Myrick, Jr., Esquire Beighley & Myrick, P.A. 1255 West Atlantic Boulevard Suite F-2 Pompano Beach, Florida 33069 Richard D. Tritschler, General Counsel Department of Agriculture and Consumer Services The Capitol, Plaza Level 10 Tallahassee, Florida 32399-0810 Honorable Terry L. Rhodes Commissioner of Agriculture Department of Agriculture and Consumer Services The Capitol, Plaza Level 10 Tallahassee, Florida 32399-0810
Findings Of Fact Petitioner Rushton is a grower of watermelons and qualifies as a "producer" 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. The amount and period of the bond have not been established. Petitioner's complaint sets out the amounts owed as follows: DATE OF SALE QUANTITY, AND PRICE PRODUCTS PER UNIT GRADE 6/7/92 Inv.#2051 43,200 lbs. AMOUNT Crimson Sweet Melons @.04 lb. $1,728.00 NWPB - 8.64 Adv. - 700.00 $1,019.36 6/10/92 Inv.#2053 43,900 lbs. Crimson Sweet Melons @3.5 lb. $1,536.50 NWPB - 8.78 Adv. - 700.00 $ 827.72 6/10/92 Inv.#2056 46,180 lbs. Crimson Sweet Melons @3.5 lb. $1,616.30 NWPB - 9.24 Adv. - 700.00 Less Payment of - 933.18 $ 907.06 $2,754.14 TOTAL $1,820.96 Regardless of the form of the complaint, Petitioner acknowledged at formal hearing that his claim relates only to Load 2051, that he did not dispute the deductions made by Respondents for NwPB or the advances paid him by the Dealer. Petitioner's complaint lumped the three loads together only because Respondent chose to cut a single check for all three loads and pay his accounts that way nearly three months after Load 2051 was shipped. With regard to Load 2051, it is not disputed that 43,200 pounds of watermelons were loaded by Dealers in Petitioner's field on June 7, 1992. The 1992 season was Petitioner's initial endeavor at growing watermelons. He was "in a bind" from the beginning of the growing season. Petitioner had originally intended to sell his watermelons to another buyer- dealer, but that person failed to send trucks to Petitioner's field. Petitioner was approached by Bobby Patton who put him in contact with Respondent Jim Smith on Saturday, June 6, 1992. Petitioner testified that Bobby Patton cut into and inspected sample melons and accepted most of his field of melons on Friday, June 5, 1992. After speaking with Petitioner by telephone on Saturday, June 6, 1992, Jim Smith went to Petitioner's field on Sunday, June 7, 1992. Petitioner and Respondents had no prior business dealings before their June 6 phone call. Jim Smith did not arrive at Petitioner's field on June 7, 1992 until the open-topped truck he had sent was half-loaded with Petitioner's melons. At that time, Smith and his employee, Dale Hires, inspected the melons on the truck and found some hollow hearts. At that time, Mr. Smith thought that the melons on the truck had been picked since Friday, but the undersigned accepts Petitioner's testimony and finds as fact that all the melons loaded into Load 2051 had been picked only since Saturday. Petitioner admitted that the melons were, "a little overripe and should have been loaded on Thursday or Friday and moved." Petitioner admitted that he and Smith then discussed that the melons were a little overripe and that they were "close" and had to be moved. Respondent Jim Smith told Petitioner there was a "potential problem," and he would let him know if a problem actually developed. Smith also said that they would try to work together and move the melons and try not to get Respondents "hurt." However, Petitioner did not specifically agree to "help" Respondent on melon loss. Petitioner later thought he was "helping" by putting a trucker up overnight in a motel at Petitioner's own expense. Smith used the phrases, "help each other" "help us" and "not hurt" to mean, "help Respondents so that Respondents would not show a loss." Petitioner testified that he had understood on June 7 that he was "not going to ride no freight" on the load. Smith concurred that this phrase he had used was mutually understood to mean that Respondents agreed to pick up the cost of freight. Respondent Smith considered the arrangement reached on June 7 to be a brokeraged deal wherein Respondent Dealers would "ride the freight" and Petitioner would "ride the melons," that is, Respondents expected Petitioner to absorb any loss occasioned by bad melons. Petitioner, on the other hand, considered all the watermelons accepted without reservation by Hires and Smith when they stepped off the half-loaded truck on June 7, 1992 and continued to load the truck with melons of questionable ripeness. Despite Petitioner's first assertion that he considered Bobby Patton's acceptance of the melons on Friday, June 5 to have been made on behalf of Respondents, that testimony is found to be contrary to his subsequent and more credible testimony that he considered Dale Hires to be acting for Respondents on June 7 and that he personally negotiated with Jim Smith on June 6 and June 7, after Bobby Patton was out of the picture. Respondents did nothing to cloak Bobby Patton, an independent contractor who "finds" melon fields, with apparent agency to negotiate the final "deal" for them with Petitioner. The "deal" between Petitioner and Respondents, such as it was, was finally and fully negotiated on June 7 between Petitioner and Respondent Jim Smith. The "deal" applied only to a certain specified segment of Petitioner's watermelon crop. Respondent Dealers thereafter handled a total of ten loads of watermelons. Respondent Dealers paid Petitioner satisfactorily on nine of the ten loads Only Load 2051, the first load, presented any problems. No agreement as to Respondents accepting all of Petitioner's field of watermelons was ever reached between the parties. Petitioner lost money with regard to the rest of his field, but that loss is in no way attributable to Respondents, despite Petitioner's expressed frustration in that regard. Petitioner heard nothing from Respondents until he requested payment and to "settle up" concerning all ten loads, approximately June 17, 1992. At that time, Jim Smith gave Petitioner settlement documents, including weight tickets and invoices for all ten loads at one time in a large envelope. Petitioner termed these documents "confirmations." At the time Smith handed Petitioner the envelope, Smith mentioned to Petitioner that one load had a problem with it. He did not give Petitioner any further information about which load had the problem. Before putting the confirmations in the envelope, Jim Smith had written across them, " * protect shipper on quality (ripe)." Petitioner testified that if this phrase had been on the documents, he did not see it, and if he had seen the phrase, he would not have understood it. Jim Smith had originally been promised $3,564.00 on Load 2051 in a telephone conversation with the ultimate recipient/receiver. He had based his June 6 offer and "deal" on June 7 with Petitioner for an expected gross to Petitioner of $1,734.04 in anticipation of the Respondents realizing the full amount of $3,564.00 from the receiver. Smith testified that when Load 2051 reached the receiver, it was rejected by the receiver due to the melons being overripe and hollow-hearted and that a federal inspection paid for by the receiver showed 15 percent to 40 percent of the samples were hollow hearted and the overall samples in the load was 25 percent, with bruising throughout but with the highest percentage in the lower layer of the piled watermelons, and some sunburn. He produced a federal inspection sheet dated June 10, 1992 (three days after the melons left Petitioner's field), covering an estimated sixteen hundred melons to the same effect. Respondent Smith had mailed this inspection sheet to Petitioner only in August 1992, with the final settlement documents and Respondents' check covering three loads, including Load 2051. The inspection sheet indicates "Midwest Marketing 2051" and "North Coast Brokerage, Cleveland, Ohio and carrier 39TR337-AL." The settlement sheets show the same trailer license number for Load 2051. (P-2) Smith also produced a bill of lading showing that North Coast Produce received carrier 39TR337 and rejected 15 melons cut for inspection, 238 melons bruised and racked, and seven decayed melons on June 10, 1992. The bill of lading shows 260 out of 1568 melons or roughly 17 percent of the load were rejected by the receiver. (R-5) Smith also produced a Norman's Brokerage invoice for shipping that trailer, for which shipping he says he paid $1,676.16, (R-4) and an invoice showing he was paid only $1,700.00 by the receiver for this load (R-2). Neither the receiver, the federal inspector, nor any trucker testified. Smith testified that after the receiver rejected some or all of Load 2051, he thought he would get at least $1,743.04 from the receiver but the receiver's check to him was rounded to only $1,700.00. The foregoing shows that Respondent Smith ultimately accepted, without dispute, the $1,700.00 paid him by the receiver which amount was less than 50 percent of the originally promised amount and which amount did not comport with a load that was at the worst only 15 percent to 40 percent bad as per the inspection report and which the bill of lading shows contained only 260 or 17 percent rejected melons. When Jim Smith totalled out the final settlement sheets for Petitioner in August 1992, Smith intended to deduct $1,676.16 for shipping and $108.00 as a "finder's fee" he had paid to independent contractor Bobby Patton from the $1,700.00 that he had actually been paid by the receiver, thus showing a net loss to Respondents on Load 2051 of $84.16. Instead, he explained Respondents' loss to Petitioner in the final August 1992 settlement documents as "original invoice $3,564.00, (meaning the originally anticipated revenues to Respondents) less actual receipts $1,743.04, (meaning the amount Smith had expected to receive after federal inspection and rejection of part of Load 2051 by the receiver, and not what Smith actually received from the receiver) for a balance of $1,820.96." Smith labelled that figure of $1,743.04 as "customer deducts" meaning it was Respondents' net loss due to actions of the receiver. He then deducted the $1,820.96 figure from the total amount owed by Respondents to Petitioner for three loads. Mr. Smith admitted he had no authority or justification per his agreement with Petitioner for deducting the finder's fee of $108.00 he paid to Bobby Patton or his additional loss of $43.04, which occurred when the recipient promised $1743.04 and paid $1700.00. He also admitted he had no authority per Respondents' agreement with Petitioner to deduct anything attributable to freight charges.
Recommendation Upon the foregoing findings of fact and conclusions of law, it is recommended that the Department of Agriculture enter a Final Order awarding Petitioner $1,820.96 on Load 2051 only and binding Respondents to pay the full amount, but which in South Carolina Insurance Company's case shall be only to the extent of its bond. RECOMMENDED this 5th day of August, 1993, at Tallahassee, Florida. ELLA JANE P. DAVIS Hearing Officer Division of Administrative Hearings The De Soto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 5th day of August, 1993. COPIES FURNISHED: Honorable Bob Crawford Commissioner of Agriculture Department of Agriculture and Consumer Services The Capitol, PL-10 Tallahassee, Florida 32399-0810 Richard Tritschler, Esquire General Counsel Department of Agriculture and Consumer Services The Capitol, PL-10 Tallahassee, Florida 32399-0810 Brenda Hyatt, Chief Bureau of Licensing & Bond Department of Agriculture and Consumer Services 508 Mayo Building Tallahassee, Florida 32399-0800 Greg Rushton 10940 N. Circle M Avenue Dunnellon, Florida 32630 James R. Smith Randall Smith Midwest Marketing Company Post Office Box 193 Vincennes, IN 47591 South Carolina Insurance Company 1501 Lady Street Columbia, SC 29201
Findings Of Fact Willie J. Woods is a farmer. He entered into an agreement with W. R. Ward, Jr., President of Growers Marketing Service, Inc. (GMS) concerning the disposition of watermelons which he had grown. The testimony of Woods and Ward concerning the nature of the agreement is conflicting. In the absence of a written contract, the nature of the agreement must be determined from the other documents surrounding their transactions. From these documents, it is determined that the agreement between the parties was not for the purchase of Woods' watermelons by GMS. The documentation surrounding the transactions by GMS, show that GMS was acting as a broker or middle man in introducing Woods' watermelons into the stream of commerce. According to Mr. Ward's records, each shipment was assigned a transaction number, and each sale from a lot of watermelons was also assigned a transaction number. The record of each of these transactions was examined in detail. Below each of these transactions is discussed, and where portions of the record are particularly pertinent, they have been copied and attached to this order for ease of reference. In some instances, the settlement statement has been reproduced and corrected to reflect what the actual charges should have been based upon the underlying record. A handwritten explanation of the adjusting entries has been added to these statements. Transaction number 1439: On June 4, 1991, Woods delivered 43,750 pounds of watermelons to GMS The documentation surrounding this transaction shows that GMS, sold the load of watermelons FOB Brooksville, Florida for a price of 14 cents per pound.The purchaser's driver transported the load from Brooksville to Canada where the purchaser "rejected" the load because the melons were immature. By purchasing the watermelons FOB Brooksville, the purchaser waived any right to reject the melons upon their arrival at their destination. Further, the only evidence of immaturity is an inspection report which states that the inspection was limited and may not reflect the condition of the whole load. The inspection report itself is hearsay. The dollar value of this load as stated in the Bill of Lading/Customs Declaration was $6,125.00. The cost of freight was not shown in the file because it was delivered FOB Brooksville and the costs were borne by the purchaser. The GMS's handling fee was 1 cent per pound or $438.00. GMS owed Woods $5,687.00 on transaction number 1439. GMS paid Woods $2,879 on this transaction. GMS still owes Woods $2,808 on this transaction. Transaction number 1424: On June 4th, GMS sold in behalf of Woods $4,320 pounds of watermelons for 20.25 cents per pound. W. R. Ward stated that the price was reduced from 15 to 5 cents per pound, and was a bookkeeping error. The file reflects the sales price for the 46,320 pounds of watermelons was $9,380. The file reflects that transportation on this load of watermelons was $1,683.00, and GMS, was entitled to 2.5 cents per pound for packing and 1 cent handling for a total of $1,621. The total expenses were $3,304.00 for transaction number 1424. GMS owed Woods $6,077.00 for transaction 1424, but only paid him $1,844. GMS still owes Woods $4,233 on this transaction. Transaction number 3534: On June 4th, GMS, handled a load of yellow meat watermelons weighing 4,071 pounds for Willie J. Woods. Subsequently, GMS sold portions of this load of watermelons in transactions number 1565, 1507, 1461, 1403, and 1476. On June the 6th, GMS sold 13,337 pounds of watermelons at 17 cents a pound for a total sales price of $2,267.29 in transaction 1461. On June 6th, Growers Marketing Service sold 18,909 pounds at 14 cents a pound for a total of $2,647.26 in transaction number 403. On June 7th, Growers Marketing Service sold 1,945 pounds at 22 cents a pound for a total of $427.90 in transaction 1476. On June 14th, Growers Marketing Service sold 5,347 pounds on transaction 1565 which were subsequently rejected because of severe decay. See, Dump Report dated July 5 in Transaction 1565. Growers Marketing Service showed no income nor expense to the grower on transaction 1565. Because these melons were not sold until June 14, it is possible that they decayed. GMS's treatment of the transaction on the settlement statement is contrary to the notes on transaction 1565 which treat is as a wash with no income or expense to Woods. The assessment of freight and handling charges was not inappropriate under the circumstances, and are disallowed. See, Corrected Invoice 3534 attached to this Order. The total revenue from the remaining transactions was $6,142. The expenses on the various loads total $2,285. GMS owed Woods $3,857 on this load, but only paid him $1152. GMS still owes Woods $2705 on this transaction. Transaction number 3541: On June 7, 1991, Growers Marketing Service handled 9,997 pounds of watermelons for Willie J. Woods on transaction number 1565. This load was sold to Castellini Produce on transaction 1565, discussed above, where it was rejected for excessive decay. The assessment of the freight charges and handling charges on this load which was handled 10 days after it was picked was inappropriate, and is disallowed. It is treated also as a wash in this transaction just as it was in 3534, and just as GMS treated it in transaction 1565. Transaction number 3546: On June 11th, Growers Marketing Service received 4,949 pounds of yellow meat watermelons from Woods. It subsequently sold these watermelons for Woods in transactions 1589, 1607, and 1613. Regarding transaction 1589, the Growers Marketing Service's settlement statement to Woods reflects that this transaction is subject to PACA Audit; however, GMS included the 14,121 pounds of watermelons in its settlement at a expense to Woods of 5 cents per pound on a sales price of 1.67 cents per pound. Because this transaction is still subject to audit, it was inappropriate to settle with the farmer. For purposes of this accounting, 1589 is not considered. In transaction 1607, GMS sold 16,775 pounds of yellow meat watermelons received from Woods on transaction 3546. Transaction 1607 and the funds received from the transaction are discussed in full below with regard to transaction 3548; therefore, it is not discussed or accounted for as part of transaction 3546. In transaction 1613, Growers Marketing Service sold 10,053 pounds of watermelons at 11.6 cents per pound for a total of $1,069.00. Expenses attributable to transaction 1613 were $554.00. Woods was entitled to $614.00 on transaction 1613; however, he was paid nothing on this transaction; GMS owes Woods $614 on this transaction. Transaction 1475: On June 11th, Growers Marketing Service received 45,050 pounds of watermelons from Woods. Growers Marketing Service asserts that the original price of these watermelons was dropped from 15 cents to 12 cents; however, the checkstub attached to the invoice shows a total payment to GMS of $7,298.10 at the original purchase price of 17.2 cents per pound. Growers Marketing Service's costs in this transaction were $2,358. Because this transaction clearly shows the original price was paid, it reflects adversely on creditability of the witnesses for Growers Marketing Service with regard to their testimony in other transactions that the original price was reduced due to fall in the market. Growers Marketing Service owed Woods $4,940 on transaction 1475, and paid him $4,484. GMS still owes Woods $456 on this transaction. Transaction number 1508: On June 11, 1991, Growers Marketing Service received 46,000 pounds of watermelons from Willie J. Woods. Growers Marketing Service sold these melons at a price of 10.25 cents per pound. Growers Marketing Service received $4,715.00 on transaction 1508 and had expenses in the amount of $2,259.00. Growers Marketing Service owed Woods $2,456.00 on transaction 1508, and paid Woods $2,284. GMS still owes Woods $172 on this transaction. Transaction number 1497: On June 11, 1991, Growers Marketing Service received 45,340 pounds of watermelons in this transaction. Growers Marketing Service sold these watermelons at 16.35 cents per pound and deducted freight of 4.35 cents per pound, showing a net sales price of 12 cents per pound. This resulted in sales revenue of $5,441 from which GMS deducted its 1 cent handling charge and an additional $4,750 listed as a harvesting advance. GMS paid Woods $204. GMS introduced no proof of a harvesting loan; however, Woods' complaint admits this loan. Nothing is owed to Woods on this transaction. Transaction number 3548: On June 12, 1991, Growers Marketing Service received 41,132 pounds of watermelons from Willie J. Woods. Subsequently, Growers Marketing Service sold watermelons received from Woods on this transaction in its transaction numbered 1613, 1607 and 1627. Growers Marketing Service asserts that 24,457 pounds of watermelons were rejected and destroyed on transaction 1607. The records regarding transaction 1607 show handwritten notation on the invoice that Growers Marketing Service received a total after expenses of sale of $3,286.00 on transaction 1607. In transaction 1613, Growers Marketing Service sold 10,032 pounds of watermelons at 11 cents a pound and in transaction 1627 Growers Marketing Service sold 7,899 pounds of watermelons at 7 cents a pound. The original settlement statement reflected incorrectly that Woods owed GMS $810. A corrected settlement statement on transaction 3548 is attached to this Order and reflects that Willie J. Woods was owed the amount of $1,019.00 in transaction 1607, $624.00 in transaction 1613, and $1,019.00 in transaction 1627. GMS paid Woods no money on this transaction, and owes Woods a total of $1,873. Transaction number 1527: On June 12, 1991, Growers Marketing Service received 50,080 pounds of watermelons from Willie J. Woods. Growers Marketing Service sold these watermelons for 17.35 cents per pound receiving a total of $8,689.00 less expenses of $2,441.00. GMS owed Willie J. Woods $6,248.00 on transaction 1527, and paid Woods $247. GMS owes Woods $6,001. Transaction number 1536: On June 12, 1991, Growers Marketing Service received 41,320 pounds watermelons from Willie J. Woods. Growers Marketing Service consigned these watermelons and received $2,078.00 less expenses of $1,473.00. Woods owed $605.00 from Growers Marketing Service on transaction 1536, and paid Woods $307. GMS still owes Woods $298. Transaction number 1535: On June 12, 1991, Growers Marketing Service received 43,240 pounds of watermelons from Willie J. Woods in this transaction. Growers Marketing Service subsequently sold these watermelons at 16.45 cents per pound receiving a total of $7,113.00 less expenses of $2,357.00. Growers Marketing Service owed Willie J. Woods $4,856.00 on transaction 1535, and paid Woods $2,802. GMS still owes Woods $2,054. Transaction number 1505: On June 13, 1991, Growers Marketing Service received 44,950 pounds of watermelons from Willie J. Woods on this transaction. Subsequently, Growers Marketing Service sold these watermelons for a total of $6,967.00 to a dealer in Canada. The dealer in Canada rejected the watermelons upon their receipt serving that they were overripe on June 15, 1991, when they were received. A Canadian agricultural inspection was ordered and conducted on June 21, 1991, which revealed that 28% of the melons showed decay. However, the inspection was not timely and the report is hearsay. GMS failed to exercise due diligence in obtaining a prompt inspection and seeking recovery in behalf of Woods. Therefore, after absorbing expenses of $2,747.00, Growers Marketing Service owed Woods $4,220.00 for his loss in this transaction. GMS paid Woods $1,250 salvage on the load; however, it still owes him $2,970. Transaction number 1520: On June 13, 1991, Growers Marketing Service received 45,940 pounds of watermelons from Willie J. Woods in this transaction. The front of the folder shows that Growers Marketing Service sold this load of watermelons to Winn Dixie in South Carolina for 12 cents per pound, or $5,513. Upon receiving the watermelons on June 15 1991, Winn Dixie rejected the melons because they were "cutting white, green fresh." See copy of front of file. Growers Marketing Service asked another broker to move the load, and that broker and Growers Marketing Service arranged to have the load inspected at its next destination, Staunton, Virginia. The truck broke down in route to Staunton, Virginia and did not arrive until June 18, 1991. The other broker described the melons as looking "cooked" on arrival. Growers Marketing Service charged Woods with freight on this load. Because Growers Marketing Service had a legitimate freight claim against the trucking company, yet charged the loss and freight charges to the grower, GMS owes Woods $5,940 less the salvage, freight and expenses totaling $2,125. GMS owes Woods $3,816. Transaction number 3553: On June 13, 1991, Growers Marketing Service received 29,478 pounds of watermelons from Willie J. Woods on transaction 3553. Subsequently, Growers Marketing Service sold these melons to various concerns realizing $3,450.76 on these sales. GMS's settlement statement with Woods on this transaction reflects a deficit on transaction 1505 of $822.50. According to the records reviewed by the Hearing Officer there was no deficit in transaction 1505; therefore, the deduction of $822.50 was inappropriate. Adding this money back into the amount due Woods, Woods should have received $1,615.74 on transaction number 3553. GMS paid Woods $675, and still owes Woods $941. Transaction number 3552: On June 13, 1991, Growers Marketing Service received 32,769 pounds of watermelons from Willie J. Woods on this transaction. A review of the records reflects that Growers Marketing Service subsequently sold 10,403 pounds of these melons at three cents a pound, realizing $312.09. Growers Marketing Service also sold 19 bins of these melons weighing 22,366 pounds for nine cents a pound for a total of $2,012.94. Growers Marketing Service's settlement statement reflects a packing charge of two and a half cents per pound for 22,366 pounds of melons that were in bins. This is excluded as an expense because the adjustment for packing charges was included in the Hearing Officer's recomputation of the price of nine cents per pound. Similarly, the price adjustment of one and a half cents per pound was included in the recomputation of the price and is therefore excluded. The settlement statement which is attached to this Order reflects total receipts of $2,325 and total expenses of $750. Growers Marketing Services owed Willie J. Woods $1,575 on transaction number 3552, and paid Woods $1,551. GMS owes Woods $24 on this transaction. Transaction number 3549: On June 13, 1991, Growers Marketing Service received 32,564 pounds of watermelon from Willie J. Woods on this transaction. Subsequently, Growers Marketing Service sold 4,008 pounds of watermelons at three cents a pound on transaction 1669, realizing $120.24 on the sale. Growers Marketing Service sold seven bins of watermelons weighing 8,400 pounds at $217.66 for each bin, realizing a total of $1,523.66 on transaction 1532. Growers Marketing Service sold 1,346 pounds of watermelon at eight cents a pound, realizing $107.68 on transaction 1678. Growers Marketing Services sold 18,810 pounds of watermelons at sixteen and a half cents a pound, realizing $3,104 on transaction 1530. The Growers Marketing Services' settlement statement on transaction 3549, corrected as indicated above, shows that Growers Marketing Services received a total of $4,855 on this transaction. Growers Marketing Services' statement reflects packing charges of four cents per pound for 24,164 pounds. This packing charge was not applicable because the melons are indicated to have been in bins, not in cartons. Further, the price adjustment of one and a half cents per pound on 18,810 pounds was included in the Hearing Officer recomputation of the price per pound. Taking into account these corrections, total revenue was $4,855, and the total expenses of Growers Marketing Services were $1,613. Growers Marketing Services owed Woods $3,242 on transaction 3549, and paid him $1,690. GMS still owes Woods $1,552. Transaction 3556: On June 13, 1991, Growers Marketing Services received 32,898 pounds of watermelons from Willie J. Woods on this transaction. Subsequently, Growers Marketing Services sold 2,086 pounds of these watermelons for 12 cents a pound on transaction 1622. Growers Marketing Services sold 2,096 pounds of these watermelons at 10 cents a pound realizing $210 on transaction 1575. Growers Marketing Services sold 1,983 pounds of these watermelons at 10 cents a pound realizing $198 in transaction 1647. Growers Marketing Services' settlement for transaction 3556 is attached to this Order and reflects an original price for these melons of 4 cents per pound; however, Growers Marketing Services sold 1,029 of these watermelons at 11.6 cents a pound in transaction 1613. The settlement statement, a copy of which is attached, is corrected to reflect the sales price of 11.6 cents a pound, and the resulting change in the monies received from $41.16 to $119. GMS sold 2086 pounds of melon for 12 cents per pound realizing $250 on transaction 1622. GMS sold 3,841 pounds of watermelons for 10 cents per pound realizing $384 on transaction 1707. Growers Marketing Services sold 21,862 of these watermelons at 7 cents a pound realizing $1,530 on transaction 1627. The total received by Growers Marketing Services was $2,691 less expenses of $1,952. Growers Marketing Services owed Willie J. Woods $739, and paid him $662 on transaction 3556. GMS still owes Woods $77. Transaction number 3557: On June 14, 1991, Growers Marketing Services received 20,013 pounds of watermelons from Willie J. Woods on this transactions. Subsequently, Growers Marketing Services sold 9,214 watermelons at 12 cents a pound on transaction 1616. Growers Marketing Services 3,418 pounds of watermelons at 3 cents a pound in transaction 1669. Growers Marketing Services sold three bins of watermelons weighing 3,525 pounds at 16.5 cents a pound and an additional 3,852 pounds of watermelons at 16.5 cents a pound in transaction 1530. This is a total of 16,162 pounds of watermelons. The Growers Marketing Service's settlement statement, which is attached, is corrected to show the correct number of pounds sold and the correct amounts of money received by Growers Marketing Service. Growers Marketing Service received a total of $3,301.50 for the sell of these watermelons. Concerning the expenses shown by Growers Marketing Service, the number of pounds handled is adjusted to show that 16,162 pounds was handled. In addition, the 4 cent packing charge for 16,484 pounds of watermelons is deleted since these melons were not packed in cartons but in bins. In addition, the 1.5 cent price adjustment for 3,525 pounds of watermelons handled in transaction 1530 is in the recomputation of the price. The corrected expense total is $254. Growers Marketing Service owes Willie J. Woods $3,048 on transaction 3557. GMS paid Woods $643; however, it still owes Woods $2,405. The total of the sums still owed Mr. Woods by GMS is $32,999.
Recommendation Based upon the foregoing findings of fact and conclusions of law, it is recommended that the parties be notified of these findings, and GMS permitted the opportunity to pay to Willie J. Woods $32,999 within 30 days, and if GMS fails to settle with Mr. Woods, Mr. Woods should be permitted to obtain settlement from the Respondent's bond in the amount of $32,999, or to the limits of the bond. DONE and ENTERED this 29th day of July, 1992, in Tallahassee, Florida. STEPHEN F. DEAN, 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 29th day of July, 1992. COPIES FURNISHED: Bob Crawford, Commissioner Department of Agriculture The Capitol, PL-10 Tallahassee, Florida 32399-1550 Willie J. Woods 1022 Piercewood Point Brooksville, Florida 34602 W. R. Ward, Jr., President Growers Marketing Srevice, Inc. Post Office Box 2595 Lakeland, Florida 33806 Brenda Hyatt, Chief Department of Agriculture Division of Marketing, Bureau of Licensure and Bond Mayo Building Tallahassee, Florida 32399-0800
The Issue Whether the Respondent owes the Petitioner money for watermelons purchased from Petitioner. The factual issues are whether the contract between the parties limited the warrantee of merchantability, and whether melons were of good quality on arrival, and, if not, who was responsible for the failure to meet quality standards.
Findings Of Fact During the 1996 season, the Petitioner contracted with Respondent to sell several loads of watermelons. The claim identified the various loads of melons by date and weight as follows: DATE POUNDS PRICE CLAIM 6/23 44,010 $.04 $1760 6/25 40,300 $.04 $1612 6/25 40,260 $.04 $1610 6/25 41,640 $.04 $1666 6/26 15,750 $.04 $ 600 The Respondent used file numbers to identify the loads which were purchased from Petitioner. These were co-related with the Petitioner’s information by date. The Respondent reduced the amount remitted to the Petitioner on the following loads due to shrinkage (loss of weight during transit) and loss of decayed melons on file number 96057. The Petitioner stated at hearing that, while he had added them to the claim, the differences between his claims and Respondent’s accounting were within the shrinkage and loss limits. The Respondent owed the Petitioner $4,832 on the following: DATE FILE NO. WEIGHT PAID 6/23 96055 43,659 $1746 6/25 96056 39,240 $1570 6/25 96057 38,080 $1516 The controversy between the parties centered upon file numbers 96058 and 96065. Both parties agree regarding the weight of the melons shipped and the price per pound. File number 96058 consisted of 41,640 pounds of melons sold at $.04 per pound. The shipment was sold to Provigo Distribution, Inc. on June 25, and the melons were to be Peewee sized melons (melons weighing 14-17 pounds). The Petitioner loaded the melons on a truck provided by Provigo, and Respondent did not have a person present to inspect the load when it was loaded. The Petitioner asserts that title to the melons transferred when they were loaded on the truck, and that Respondent was liable for the product thereafter. The Respondent acknowledges that it accepted title for the melons when loaded on the truck at the field, but that terms also provided that the melons would be of a specified size and would be of good quality upon delivery. There was no written contract limiting the warrantee of merchantability. Provigo refused acceptance of the melons because they were too big. The melons were around 21 pounds or small mediums (18-24 pounds). When the Respondent sought to sell the melons to another buyer, the buyer had the melons inspected, and 57 percent of the melons were rejected: 15 percent for sunburn, 7 percent for bruising, 10 percent for whitish pink flesh, and 25 percent as overripe. The Respondent introduced a copy of the documents showing the original sale price to Provigo, rejection, inspection and accounting upon resale. The Respondent had sold the melons related to file number 96058 to Provigo for $.06 a pound with Provigo paying the freight. The Respondent would have made $2498.40 on the sale to Provigo. Upon rejection, the Respondent was responsible to Provigo for the transportation costs ($.05 per pound) for the entire load or $2082. The Respondent obtained $613.84 from the sale of the melons after their rejection. File number 96065 related to a partial load which Petitioner had sold on June 26th to Respondent in response to Respondent’s request for Peewee size melons. Petitioner was only able to supply a partial load of 15,750 pounds. These were moved on June 26th from Florida to Georgia, where on June 27th, the truck was finished off with large melons from another farmer. The Respondent had an agent who was in Georgia where the melons were shipped immediately in order to add additional melons to the load. This agent had the authority to purchase melons and cull melons for Respondent, and was in contact with Respondent during the period the truck carrying Petitioner’s melons was waiting. The agent also knew the load was to be shipped to Canada for sale. Respondent’s agent in Georgia saw that the Peewees loaded from Petitioner were spotted, leaking, and decayed prior to loading the large melons. These melons were shipped to Canada at a cost of $.05 a pound for a total of $1138 where the Peewees from Respondent were rejected because of decay. Their condition was such that they could not be given away, and a disposal charge of $350 was charged to Respondent. The Respondent in rendering an accounting of the transaction to Petitioner charged Petitioner $1138 for the transportation of the 15,750 pounds of melons to Canada and $350 for their disposal.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law set forth herein, it is, RECOMMENDED: That the Department enter a final order finding that the Respondent owes the Petitioner a total of $2523 and providing Respondent a reasonable amount of time to produce proof of payment of this amount to Petitioner. DONE and ENTERED this 15th day of May, 1997, in Tallahassee, Florida. STEPHEN F. DEAN 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 15th day of May, 1997. COPIES FURNISHED: Bo Bass, President Bass Farms, Inc. 2829 Southwest SR 45 Newberry, FL 32669 H. Joseph Heidrich 260 Maitland Avenue, Number 1000 Atlamont Springs, FL 32701 Brenda Hyatt, Chief Department of Agriculture and Consumer Services 508 Mayo Building Tallahassee, FL 32399-0800 Richard Tritschler, Esquire Department of Agriculture and Consumer Services The Capitol, Plaza Level 10 Tallahassee, FL 32399-0810 Bob Crawford, Commissioner Department of Agriculture and Consumer Services The Capitol, PL-10 Tallahassee, FL 32399-0810
Findings Of Fact At all times pertinent to the issues herein, Petitioner John Crawford, operated Crawford and Son's Farms located in or near Lakeland, Florida, on which he grows produce including, inter alia, beans of the variety in controversy here. Respondent, Wishnatzki, is a produce broker located in Tampa, Florida, and has been in the business of brokering produce grown by Florida farmers throughout the United States for three generations. Petitioner and Respondent have done business together in the past on many occasions, without controversy, and have, over the years, developed an amicable business and well as personal relationship. For a substantial portion of that time, including the time in issue, the parties' transactions were consummated under a "written statement of terms and conditions" which called on the broker, Wishnatzki, to act as the grower's agent on the basis of "gross proceeds of a sale, less carrier, cooling, packing and palleting charges, if any, and a Grower's Agent's customary commission." At some time prior to April 28, 1994, Mr. Crawford, who was, at the time, carrying a bucket full of the beans later sold through Respondent, saw Mr. Wishnatzki who, he claims, indicated the beans could be worth $25.00 per bushel. The beans at hand were the earliest produced from the Petitioner's fields, however, and the main crop was not yet ready for harvesting. Mr. Crawford acknowledges this comment by Mr. Wishnatzki was no guarantee of price but merely an opinion, and Mr. Wishnatzki claims it was Crawford, not him, who stated a figure. Several days later, however, on or about May 3, 1994, while his beans were being picked, Mrs. Crawford spoke with Mr. Wishnatzki who said he needed beans and had a truck going to New York. According to Mrs. Crawford, Mr. Wishnatzki advised her they could probably get $20.00 per bushel for the beans if Crawford could get them in. Mrs. Crawford immediately went to Petitioner and told him what Respondent had said, and within two days, on May 3 and 4, 1994, Mr. Crawford delivered to Mr. Wishnatzki 164 bushels of beans. The beans were shipped up north, but in the interim, the price of beans, according to the Department of Agriculture's price report, dropped considerably from a price near $18.00 per bushel. Records maintained by Respondent reflect that between May 4 and May 7, 1994, Respondent sold the entire 164 bushels, in varying amounts, to six different customers, as follows: 5/4/94 Scarmardo Produce. 40 bu at $14.00/bu 5/5/94 C & S Wholesale Gro. 73 bu at 12.00/bu 5/5/94 C & S Wholesale Gro. 2 bu at 0.00/bu 5/5/94 Watson's Produce 5 bu at 16.00/bu 5/6/94 Scott Street Tomato Co. 5 bu at 16.00/bu 5/6/94 Sy Katz Produce 5 bu at 16.00/bu 5/7/94 Tamburo Bros. 34 bu at 4.00/bu Respondent received a total of $1,812.00 for the sale of all Petitioner's beans consigned to it for an average price of $11.04 per bushel. Notwithstanding Respondent was entitled, by the terms of the agreement between it and Petitioner, to deduct a commission on the sale, because of the long- standing harmonious relationship which had existed between them, and because Respondent felt it important to support its growers and insure their financial well-being, Respondent, nevertheless paid Petitioner the full amount it received, and an additional sum as well, for a total payment of $2,132.00. In other words, though Respondent received only an average of $11.04 per bushel from its customers for Petitioner's beans, it nevertheless paid Petitioner an average of $13.00 per bushel for the beans it received from him. Petitioner is not satisfied with the amount received, however, and claims Respondent sold the beans at a price below market. He refers to Mr. Wishnatzki's comment in passing in late April that the beans could bring $25.00 per bushel. He also notes that the market should have been good because of an infestation of bean virus due to white flies. He further contends that Respondent should not have sold the beans for such a low price; that Respondent should have checked with the northern markets, and if there was a problem with his beans, Respondent should have procured a government inspection of them. While he admits beans were in a downward fall, he does not believe the price dropped to $13.00 per bushel on a first hand picking. In support of his position, he refers to two separate market reports, the first dated May 4, 1994, and the other dated May 6, 1994. The former reflects a "fairly light" demand for beans, with handpicked beans selling between "16.00 and 18.65, mostly 16.65 few 12.00", and the latter reflects, for handpicked beans, a "fairly light" demand with sales at "14.00 - 16.65 few 12.00 occasional lower." Petitioner does not claim he should have received $18.00 per bushel which he cites, inaccurately, was the fair market price according to the Florida Market Reports cited above, but claims he could have come off that price if he had been contacted to negotiate price. However, the $18.00 price he cites was not, according to the evidence, the usual price received. The usual price was around $16.65, with some lower. In any case, the terms of the brokerage agreement does not provide for price negotiation after delivery is made to the broker. Further, Mr. Wishnatzki did not call Petitioner when he saw the beans were not selling well because they had already been picked and were in Respondent's hands. Not much could have been done at that point, and he had other growers to deal with as well. In addition, Mr. Crawford has access to the market report and knew the price was falling. He did not call Respondent to set a minimum price. According to Mr. Wishnatzki, the price paid to the growers is based upon the price his company receives for the produce. However, Respondent does not wait until it has been paid before paying its growers. When the produce is sold, the grower is paid, and Respondent receives payment from the buyer after that. There is no way to say with certainty when the grower delivers produce to Respondent what price an ultimate buyer will pay for that produce. Many factors come into play, including quality of the produce, current market price, supply and demand and the like. A market bulletin, published at the end of each market day, gives some idea of what the next day's price is likely to be, but only market conditions control the price. Review of the prices received by Respondent for the first 130 bushels of beans sold reflect a price of from $12.00 for the 73 bushels sold to C & S, to $14.00 for the 40 bushels sold to Scarmardo. The 15 bushels sold to three different brokers for $16.00 per bushel is but a small amount of the total. The remaining 34 bushels sold to Tamburo for $4.00 per bushel brought the average price received down, as did the two bushels for which no payment was received. Respondent claims they received only $4.00 per bushel from Tamburo because of a constant decline in the market during the entire week the beans were for sale, and the sale to Tamburo was, in effect, a distress sale. Wishnatzki started the week out offering the beans at $18.00 per bushel. The price was reduced each day until the final Saturday when it is usual to sell what they have left over for what they can get. On Saturday, May 7, Wishnatzki still had 34 bushels of beans left and Tamburo sold them at the lower price. It was lower that Wishnatzki had expected, but consistent with the agreement they had with Tamburo who had the beans on consignment. Mr. Wishnatzki asserts the sale at that price was a judgement call he had to make, but were he confronted with the same situation, he would do it again. At no time did Mr. Wishnatzki advise Mr. Crawford he could, or would, sell a given quantity of beans at a certain price. If he had known what price he would get for the beans at later sale, he would have paid Mr. Crawford on the spot, in advance. Further, even though at the beginning of the week in question the market reports showed beans selling for a good price, sales can not always be made at the reported market price. The price he gets is what his customers are willing to pay. His procedure is to send out a daily inventory sheet to each of his customers, nation-wide, by FAX. At the time these beans were delivered to Respondent, the demand was light, witnessed by the fact that it took a whole week to dispose of 164 bushels. That is not a large volume. While he understands Mr. Crawford's disappointment, it is a result of the fact that Crawford's expectations were higher than reality delivered. This has happened to growers before, and it will, no doubt, happen again.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is, therefore: RECOMMENDED that Petitioner, Crawford & Son's Farms' claim against Respondent, Wishnatzki & Natel, Inc. and Continental Insurance Company, in the amount of $824.00, be denied. RECOMMENDED this 22nd day of November, 1994, in Tallahassee, Florida. COPIES FURNISHED: John Crawford d/b/a Crawford & Son's Farms 2545 Sleepy Hill Road Lakeland, Florida 33809 ARNOLD H. POLLOCK 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 22nd day of November, 1994. David L. Lapides, Esquire W. Edwin Litton, II, Esquire Annis, Mitchell, Cockey, Edwards & Roehn, P.A. Post Office Box 3433 Tampa, Florida 33601 The Honorable Bob Crawford Commissioner of Agriculture The Capitol, PL-10 Tallahassee, Florida 32399-0810 Richard Tritschler General Counsel Department of Agriculture The Capitol, PL-10 Tallahassee, Florida 32399-0810 Brenda Hyatt, Chief Bureau of Licensing & Bond Department of Agriculture 508 Mayo Building Tallahassee, Florida 32399-0800
