Findings Of Fact On August 6, 1986, an indemnity bond was executed between RAINMAKER as principal and FIDELITY as surety. The effective dates of the bond were from October 21, 1986, to October 20, 1987. The bond was required under Sections 604.15-604.30, Florida Statutes, in order for RAINMAKER to become licensed as a dealer in agricultural products in Florida. The purpose of the bond is to secure the faithful accounting for a payment to producers or their agents or representatives of the proceeds of all agricultural products handled or purchased by RAINMAKER. The Petitioner, SHAN-RON, is a corporation whose address is 276 Cypress Street, La Belle, Florida. Its purpose is to conduct business by finding buyers for sod located on acreage owned by various cattle ranchers in Lee County, Florida. This practice is commonly known as "bird dogging" in the agricultural trade. The way the business is conducted is as follows: SHAN-RON is contracted by sod installers to whom it sells sod in specific quantities for a fixed price. Once the oral agreement is made, SHAN-RON tells the sod installer where a sod field is located. At this point in the business transaction, the sod installer sends independent truck drivers to the designated sod field. If the sod installer is unable to locate truckers, he telephones a SHAN-RON field foreman. The foreman, as a courtesy, will check to see if any of the independent truckers currently as the sod field can haul a load for the sod installer. Once a trucker is located, employees from SHAN-RON mow the grass, cut the sod, and load it onto pallets owned by SHAN-RON. The truck is loaded with pallets by SHAN-RON employees and the driver is given two copies of the load ticket, one for him and one for the sod installer. The driver delivers the sod and pallets to the address placed upon the load tickets. Upon delivery, the driver has the responsibility to deliver the load ticket to the business office of the sod installer. If he does not deliver the ticket, he does not get paid for hauling the sod. Employees of the sod installer are usually at the delivery site. The sod is laid and the empty pallets are returned to the sod field by the truckers. Every Friday, a representative of SHAN-RON personally delivers a weekly bill to the sod installer in order to collect is owed. When the money is collected, the funds are divided between the rancher whose sod was sold and SHAN-RON. The accountability system used within the sod industry leaves room for a high margin of error at various stages. The SHAN-RON employees occasionally short pallet loads or two layers of sod. The truck drivers occasionally misnamed the sod installer to whom the sod is to be delivered. The truck drivers also occasionally do not take empty pallets under their control back to SHAN-RON. They sell the pallets and pocket the money. The sod installer is financially responsible for the pallet costs. RAINMAKER is a corporation whose address is Post Office Box 7385, Ft. Myers, Florida. The company is primarily in the business of installing sod. It transacted business with SHAN-RON between November 11, 1986, and January 8, 1987. At the time of these transactions, RAINMAKER was licensed as a dealer in agricultural products supported by surety bond number 974 52 23 in the amount of $13,500.00. SHAN-RON, through testimony and the introduction of its business records, proved a prima facie case that RAINMAKER owes $12,964.00 for the purchase of sod between November 11, 1986, and January 8, 1987. Both parties Stipulated that $4,000.00 has been paid on the balance of the account which should be deducted from the balance owed SHAN-RON. In rebuttal to SHAN-RON's presentation, RAINMAKER presented testimony and a business record summary which revealed that six invoices were improperly charged, against its account in the amount of $1,260.00. The record summary was based upon a comparison of load tickets against production records during the time period involved. In addition, RAINMAKER's records reveal that the two drivers, Stormy and Fred Bower, were not paid for delivering the sod to RAINMAKER under the load ticket presentation to the sod installer which was previously described as an accounting method within the business. Because RAINMAKER set forth the issue of delivery discrepancies in its answer to the complaint and competent evidence was presented, $1,260.00 should be deducted from the `balance owed. SHAN-RON presented testimony that it is customary for the company to spray the sod for pest control. RAINMAKER received defective sod from SHAN-RON which contained "Creeping Charlie" weeds during the time of the deliveries in dispute. SHAN-RON was timely notified of the problem, and toad RAINMAKER to have the sod sprayed. A copy of the invoice for $300.00 was sent to SHAN-RON and has not been paid. Although the issue was not raised in RAINMAKER's answer to the complaint, it is properly before the Hearing Officer because of RAINMAKER's timely notification and cure of the defect in the product. The $300.00 should be deducted from the amount owed. Testimony relating to possible sod shortages was rejected as no evidence was presented that shortages occurred in the orders for which SHAN-RON seeks payment. The customary procedure In the sod business for handling credits for shortages requires the buyer to notify the seller within a responsible length of time of the shortages. Such notification did not take place as to the orders in dispute. The amount owed to SHAN-RON by RAINMAKER is $7,404.00. It is officially noticed that SHAN-RON's complaint was originally filed with the department on June 19, 1987, within nine months from the date of sale.
Recommendation Based upon the foregoing, it is RECOMMENDED: That the Department of Agriculture enter a final order requiring the Respondent RAINMAKER to make payment to the petitioner SHAN-RON in the amount of $7,404.00. In the event that RAINMAKER does not comply with the department's order within fifteen days from the date it final, FIDELITY should be ordered to provide payment and the conditions and provisions of the bond furnished to RAINMAKER. DONE and ENTERED this 12th day of April, 1988, in Tallahassee, Florida. VERONICA E. DONNELLY 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 12th day of April, 1987. COPIES FURNISHED: Clinton H. Coutler, JR., Esquire Department of Agriculture Mayo Building Tallahassee, Florida 32399-0800 Ben Pridgeon, Chief Bureau of License and Bond Department of Agriculture Lab Complex Tallahassee, Florida 32399-1650 Shan Ron Sod, Inc. 276 Cypress Street LaBELLE, FLORIDA 33935 Rainmaker Sod, Inc. 2290 Bruner Lane, South East Fort Myers, Florida 33912 Fidelity & Deposit Company of Maryland Post Office Box 1227 Baltimore, Maryland 21203 Honorable Doyle Conner Commissioner of Agriculture The Capitol Tallahassee, Florida 32399-0810 Robert Chastain General Counsel Department of Agriculture Mayo Building, Room 513 Tallahassee, Florida 32399-0800
Findings Of Fact The Petitioner is an agency of the State of Florida charged with licensing and regulating the practice of real estate salesmen and brokers by the various provisions of Chapter 475, Florida Statutes. Included in those duties and enforcement authorities is the duty to investigate conduct by realtors allegedly in violation of Chapter 475, and related rules, and prosecuting administrative proceedings filed as a result of such investigations in order to seek imposition of disciplinary measures against the licensure status of miscreant realtors. The Respondents, at all times pertinent hereto, were licensed real estate brokers or salesmen in the State of Florida, having been issued the license numbers depicted in the Administrative Complaint. Respondent Hurbanis last was issued a license as a broker/salesman located at Sanibel Realty, Inc., Sanibel, Florida. Respondent Pauline Seely was last licensed as a broker/salesman located at VIP Realty Group, Sanibel, Florida. Respondent John M. Parks was licensed as a broker/salesman, last issued for a location at The Realty Shoppe of Lee County in Fort Myers, Florida. Respondent Jean Maxwell was licensed as a broker/salesman located at Suite 205, 1619 Periwinkle Way, Sanibel, Florida. At all times pertinent hereto, the Respondents were licensed and operating in the real estate brokerage business in the employ of VIP Realty Group, Inc., a licensed corporate real estate broker. Concerning the charges in Count I, one Eric Rosen, a real estate salesman employed by VIP Realty Group, Inc., the same firm employing Respondent Pauline P. Seely, obtained Nicholas Fontana and John Priebbe as purchasers of a certain piece of property by sales contract which was owned by Clarence Liebscher and Joseph Kubosch. The sales contract was entered into June 3, 1983, and reflected a purchase price of $315,000, including the sale of certain furniture and other personal property. The complaint alleges that former Respondent Rosen and Respondent Hurbanis, together with the purchasers and sellers, conspired to enter into a second bogus sales contract (so called "double contracting") substantially similar to the first contract, except the sales price was shown to be $350,000 and the terms concerning sale of furniture and other personalty was deleted. It is alleged that this contract was prepared by Rosen under the direction and approval of Respondent Hurbanis for the purpose of obtaining a mortgage loan from a lending institution in an amount greater than the normal percentage of the sales price that the banking laws and policies of such lenders provide as the maximum amount of mortgage financing which can be obtained on a given piece of property. It is alleged that these Respondents were thus attempting to obtain a loan commitment in an amount greater than could have been obtained had the actual sales price of $315,000 been revealed to the lender. The bogus contract showing the $350,000 sales price was allegedly submitted to the lender, AmeriFirst Savings and Loan Association, without the Respondents notifying AmeriFirst that the actual sales price was $315,000. Although witness Rosen for the Petitioner, testified that he believed the contracts involved in this count had been discussed with Mr. Hurbanis he could not say for certain and could not recall the conversation. In fact, another Petitioner witness, Brandy Vallois, stated several times that Mr. Hurbanis was on vacation during the time that the contract was negotiated, executed and submitted to the lender and that, although Respondent Hurbanis was the office manager at VIP Realty Group at the time, others were serving in his stead at the time he was on vacation (the time of the incident alleged in Count I). Although the Department elicited testimony to the effect that seminars had been given where the Respondent, as well as other realtors, had discussed "creative financing," there was no testimony or other evidence that such lectures by the Respondent or others advocated a policy of "double contracting" or in effect deluding lenders into lending more money for real estate purchases than they normally would have if true purchase prices were disclosed. In any event, both the seller and buyer were aware of the situation concerning this transaction and the lender was never deceived or misled because in fact the loan never closed and no funds were disbursed. There was no evidence that the true particulars of this transaction were not disclosed to the lender. Count II Count II concerns a transaction in which Respondent John Parks was the listing and selling salesman and Respondent Hurbanis was the office manager with the same real estate firm. Allegedly, Respondent Hurbanis directed and approved Respondent Parks' preparation of two sales contracts on or about December 16, 1982, calling for the purchase and sale of certain real estate by Mike Volker from Dr. Robert Pascotto and Gaspar Turanna. Both contracts were similar and pertained to the same parcel of property, but one reflected an actual sales price of $149,000, whereas the allegedly bogus, second contract reflected a total sales price of $157,000. It is thus alleged that these two Respondents conspired with the purchasers and sellers to enter into the higher priced, bogus contract for the purpose of obtaining a mortgage loan commitment principal amount at a greater percentage of the sales price than could have been obtained if the actual sales price had been disclosed to the lender. It is alleged that these two Respondents submitted the bogus contract reflecting the $157,000 false sales price together with loan application documents to First Federal Savings and Loan Association of Fort Myers without informing that institution that the actual sales price was $149,000. No competent, substantial evidence was offered, however, to show that Respondent Parks was anything other than the listing salesman. It was not established that he drafted the contract nor that he submitted either contract to the lender. Concerning Respondent Hurbanis, although it was shown that he was the office manager at the time of the incident, it was not established that he directed or approved the drafting of either contract, directed or approved the submission of either contract to the named lender nor that he was involved in the negotiation or closing stage of the transaction in any way. In fact, although the two contracts show differing purchase prices, neither contract depicts any different amount to come from mortgage financing by First Federal. In fact, both contracts reflect that a mortgage would be obtained from First Federal in the amount of $125,600. Nothing any different was disclosed to First Federal. The difference comes in a differing deposit amount held in escrow by VIP Realty Group, Inc., according to the terms of the contract. One contract, that with the lower purchase price, reflects $7,000 in deposit money toward the purchase and the second contract reflects $15,000 deposit money held toward the purchase. This accounts for the $8,000 difference in the amount of the two contracts, but, in any event, the amount to be obtained by mortgage funds from First Federal was the same on each contract. There was no evidence to prove that the deposit amounts depicted on either contract were bogus or other than the result of bona fide arm's length negotiations between the parties. In any event, there was no evidence that First Federal or its lending officers were not aware of any of the particulars in the transaction. There was no showing that that the lender relied on either contract to its detriment. Count III Respondent Pauline Seely, as listing salesman and owner of certain real property, with former Respondent (since dismissed) James O'Neill as selling salesman, and allegedly with Respondent Charles Hurbanis' direction and approval, prepared and obtained execution of two sales contracts on or about December 30, 1982, for the purchase and sale of her real property by Thomas and Sheila Floyd. Both contracts were substantially similar and pertained to the same parcel, but one contract reflected an actual earnest money deposit of $8,660 and a purchase money mortgage in the amount of $24,000, whereas the supposed bogus, second contract reflected a total earnest money deposit of $14,000 and a purchase money mortgage in the principal amount of $18,660. It is alleged that the Respondents then submitted this to the lending institution for the purpose of obtaining a greater percentage of the sales price in mortgage funds than could have been obtained had the actual sales price, terms and conditions been revealed to the lender. In fact, testimony of record and Respondent Seely's Exhibit 2 reveals that the lender was furnished all documents with regard to this transaction which revealed to the lender, as the loan officer involved stated in the letter constituting this exhibit, that the buyers and the seller had agreed that the seller would take back a second mortgage in the amount of $24,000 and that a contract addendum existed (which is in evidence) reflecting this second agreement. Thus, AmeriFirst, the lender, did in fact have a copy of the agreement stating that the seller would hold the second mortgage for the above amount and that AmeriFirst was aware of all details concerning the transaction. In point of fact, both contracts in evidence, one of which reflects a purchase money mortgage of $18,660 which the seller would hold and which reflects that $7,000 would be paid in cash to the seller at the time of contracting, and the second contract, are identical as to purchase price. The second contract also shows a purchase price of $125,000, the difference being essentially that the second contract shows the $24,000 purchase money mortgage amount instead of the figure of $18,660 shown on the first contract. Both contracts merely call for assumption of a mortgage already made in favor of AmeriFirst in the amount of $92,340. There is no evidence that any additional funds are being sought from AmeriFirst at all. There was no evidence that any action by the Respondents would result in any impairment of the security of AmeriFirst's first mortgage lien on the premises. The purchase money mortgage referenced in the testimony and evidence, regardless of its ultimate amount as that relates to the manner in which the total purchase price would be paid the seller, would, in all events, be a subordinate mortgage lien and it is difficult to see how AmeriFirst could rely on either contract to its detriment, even had it not known of one of the contracts. They both represented a purchase price of $125,000 and merely varied as to ways the purchase price would be paid, over and above the $92,340 outstanding first mortgage loan (which was to be assumed). In all events, however, AmeriFirst and its lending officer was fully aware of all details of this transaction and had no objection to the manner in which the transaction was to be closed and disbursements made, nor to the conditions of the assumption of its mortgage. The so called "double contract" that Ms. Seely is alleged to have entered into was shown thus to be an innocent modification of terms of the original sales contract. No wrongdoing or concealment was shown to have been committed by Respondent or any person who participated in the sale of Pauline Seely's property to Thomas and Sheila Floyd. Count V Concerning Count V, it is alleged that Respondents Seely, Parks and Hurbanis obtained two sales contracts on or about January 24, 1983, for the purchase and sale of certain real property by Computer Maintenance Corporation, purchaser, from James and Loretta Cottrell as sellers. Both contracts pertain to the same piece of real property. Both contracts showed a "purchase price" item of $310,000. One contract, however, actually reflected a total price of $344,000, arrived at by combining a $279,000 "90 percent mortgage loan" with a $60,000 purchase money mortgage and a $5,000 cash deposit. This contract contains a notation at the bottom that the "seller agrees that a separate contract for purchase will be given to the Savings and Loan for loan approval." The other contract related to this sale lists a total purchase price of $310,000 only, with a $5,000 deposit noted with no purchase money mortgage being shown, rather there is shown, in addition to the $279,000 90 percent mortgage loan, a balance of $26,000 cash being paid to the seller. This contractual situation is somewhat mysterious and it may indeed be that an attempt was made to conceal the $60,000 purchase money mortgage on the first contract and make it appear to the lender that the purchaser was actually putting up an additional $26,000 in cash at the closing as an inducement to obtain the principal first mortgage of $279,000 from Naples Federal Savings and Loan, AmeriFirst or some other lender. In point of fact, however, the witness, Ms. Heavener, from AmeriFirst indicated that the bank did not act upon the advice contained on the face of the contract, but rather loaned a percentage of their own independent appraisal value and thus did not act to its detriment upon any information contained on the face of either contract. She indicated that that lender was fully informed about all aspects of this transaction in any event. The evidence does not reflect that Mr. Hurbanis nor Ms. Seely had any part in drafting the contract nor presenting it to the lender. Seely's only involvement was as listing agent, that is, the realtor who obtained the listing from the sellers. There is no evidence to indicate that she participated in any fashion in the sale of the property, the negotiations, nor the drafting or presenting of the contracts. No evidence was offered to show for what purpose, whether illicit or innocent, the two different contracts were drafted. In any event, Ms. Seely was not involved in the preparation of the contracts. Mr. Hurbanis was not connected by any competent, substantial evidence, with any activity concerning the drafting of the contracts nor the presenting of them to the lender. A representative of the lending institution testified that she did not recall any discussions at all with Mr. Hurbanis concerning this transaction and upon cross-examination clearly indicated that the lending institution had protected itself against a "double contract" situation by reliance upon its own independent appraisal in making its lending decision, rather than the contract or contracts themselves. Count VI In this count, it is alleged that Hurbanis obtained a sales contract on January 22, 1983, between T N T Partners, a general partnership as seller and Christopher Smith as purchaser. The pertinent terms of the sale were $30,000 total purchase price, $3,000 deposit and $4,500 cash to be allegedly furnished at closing, together with a $22,500 new note and mortgage on the property. It is alleged, in essence, that Respondent Hurbanis falsely represented to Naples Federal Savings and Loan Association that the purchaser would pay $4,500 cash at closing. The transaction closed on April 15, 1983, but instead of the cash, the seller took back a purchase money mortgage in the amount of $4,500. Thus, the issue here is whether the $4,500 mortgage was properly disclosed to the lender. The evidence is silent as to any connection of Mr. Hurbanis with this transaction. In any event, however, it would appear from the face of the contract itself that the lending institution could not have been deceived by the parties to the contract nor any realtor involved, since the contract itself does not require cash in the amount of $4,500 but rather requires "cash or equivalent at closing." Thus, even if there had been a participation by Respondent Hurbanis in this transaction, which was not proven, it is impossible to detect any concealment or deception since the words "or equivalent" would clearly not preclude the use of a purchase money mortgage in the amount of $4,500 as consideration for this portion of the purchase price, rather than actual cash. Indeed, any other thing of equivalent value could have been used as consideration in this particular without violating the terms of the contract, of which the lender clearly had notice.
Recommendation Having considered the foregoing Findings of Fact, Conclusions of Law, the candor and demeanor of the witnesses and the evidence of record, it is, therefore RECOMMENDED that the Administrative Complaint be dismissed in its entirety as to all Respondents. DONE and ORDERED this 7th day of October, 1987, in Tallahassee, Florida. P. MICHAEL RUFF 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 7th day of October, 1987. APPENDIX TO RECOMMENDED ORDER, CASE NO. 86-0140 Petitioner: Petitioner filed no Proposed Findings of Fact and Conclusions of Law. Respondent Hurbanis: The Proposed Findings of Fact by Respondent Hurbanis are subsumed in those made in this Recommended Order to the extent that that Respondent's submissions constitute bona fide Proposed Findings of Fact. In the main, the "Findings of Fact" in the Post-Hearing Submission by this Respondent constitute largely recitations of evidence and testimony, discussion of the weight thereof, inextricably intermingled with Proposed Findings of Fact which cannot be separately ruled upon because of multiple factual findings, legal argument and evidence discussion intertwined in the same paragraph. Respondents Maxwell's and Seely's Proposed Findings of Fact: 1-12. Accepted. COPIES FURNISHED: James H. Gillis, Esquire Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802 John P. Milligan, Jr., Esquire Suite 201, Royal Palm Square 1400 Colonial Boulevard Fort Myers, Florida 33907 Kenneth G. Oertel, Esquire Suite C 2700 Blair Stone Road Tallahassee, Florida 32301 Johnny W. Parks c/o The Realty Shoppe of Lee County 12635 Cleveland Avenue Fort Myers, Florida 33907 Tom Gallagher, Secretary Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32399-0750 William O'Neil, Esquire General Counsel Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32399-0750 Harold Huff, Executive Director Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802
Findings Of Fact The Respondent issued an Invitation to Bid by which sought to lease approximately 21,000 net useable square feet of office space to be located in Tampa, Florida. This Invitation to Bid is referred to as Lease Number 590:1946. Three bids were received in response to the Invitation to Bid, and they were opened on July 29, 1988. Bids were received from the Petitioner, Structures, Inc., and a third bidder that has not filed a protest, and is therefore not relevant to this proceeding. All bidders were initially determined to be responsive to the Invitation to Bid. Petitioner and Structures, Inc., submitted bids involving the same office space and real property. Petitioners' bid for this space was lower that the bid filed by Structures, Inc., when compared on a present value rental cost analysis. Despite Petitioners' lower bid, Respondent awarded this lease to Structures, Inc., due to the receipt of a letter dated August 2, 1988, from Intervenor, the owner of the subject property, stating that, "Mr. Hartley (Petitioner) has no right to propose this property to the Department as Mr. Hartley and I have no agreements with respect to my leasing the property to him." On the basis of this letter, the Respondent concluded that Petitioners had no legal interest in the subject property and therefore did not have the requisite control over the property to submit this bid. The Petitioners' bid was determined to be nonresponsive. Petitioners did not present competent substantial evidence to discredit or refute Intervenor's contention that they lacked any legal interest in this property. It is undisputed that Intervenor owns the property, and Intervenor was present at the hearing to confirm that the letter of August 2, 1988, was, in fact, his letter. The Petitioner, James C. Hartley, was not present at the hearing. The only evidence presented by Petitioners of any alleged interest in this property is a copy of a telecopy letter dated June 29, 1988, filed with its bid, which purports to express the intention of Intervenor and Petitioner Hartley to enter into a lease for certain property described on an Exhibit A, which was not presented in evidence. Thus, there is no indication on the face of this document that the telecopy letter relates to the subject property. However, even if the letter does relate to the property owned by Intervenor, the agreement specifically states that Intervenor's obligation to enter into a lease with Petitioner is expressly conditioned upon Intervenor's approval, In his sole discretion, of any sublease with the Respondent. If for any reason the Intervenor disapproved of the Petitioners' bid and lease with the Respondent, according to this agreement, he could simply refuse to enter into any lease of the subject property with Petitioners, and thus, Petitioners would have no interest or control over the property, and could not then sublease it to the Respondent. Finally, there is no recital of consideration in the purported agreement set forth in the telecopy letter. Based upon a complete review of the evidence presented, it is found that Petitioners did not have a valid, legal interest in the subject property which would be sufficient to allow them to file this bid and propose this lease to the Respondent. As such, Petitioners' bid was unresponsive.
Recommendation Based upon the foregoing, it is recommended that Respondent enter a Final Order dismissing Petitioners' protest Lease Number 590:1946. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 3rd day of November, 1988. DONALD D. CONN 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 3rd day of November, 1988. APPENDIX TO RECOMMENDED ORDER, CASE NO. 88-4645BID Rulings on Petitioners' and Intervenor's Proposed Findings of Fact: Petitioners and Intervenor did not timely file a Proposed Recommended Order containing proposed findings of fact. Rulings on the Respondent' Proposed Finding of Fact: Adopted in Findings of Fact 1 and 2. Adopted in Finding of Fact 3. 3-5. Rejected as irrelevant and unnecessary. 6-8. Adopted in Finding of Fact 4. 9. Rejected in Finding of Fact 2, and as irrelevant. COPIES FURNISHED: Joseph D. McFarland, Esquire 520 Second Avenue, South St. Petersburg, Florida 33701 Robert L. Rocke, Esquire Post Office Box 3433 Tampa, Florida 33601 Jack Farley, Esquire W. T. Edwards facility 4000 West Buffalo Fifth Floor, Room 520 Tampa, Florida 33614 Sam Power, Clerk Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700 Gregory Coler, Secretary Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700 John Miller, General Counsel Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700
The Issue This case arises from a complaint filed by Jay Nelson and Ernest Leclercq, d/b/a Sun Coast Farms, in which it is asserted that H. M. Shield, Inc., is indebted to the Complainants in the amount of $7,266.20 for agricultural products sold to the Respondent. At the hearing the representative for the Complainant stated that most of the matters asserted in the complaint had been resolved by settlement, but that six items remained in dispute and that the total amount remaining in dispute was $1,041.20. Ms. Ernst testified as a witness for the Complainant and also offered several documents as exhibits, which documents were marked as a composite exhibit and received in evidence.
Findings Of Fact Based on the testimony of the witness and on the exhibits offered and received in evidence, I make the following findings of fact: On February 23, 1984, the Complainant sold agricultural products consisting of Snap Beans, Wax Beans, and Zukes (Lot No. 1116) to the Respondent. At the time of the hearing there was still unpaid and owing the amount of $327.00 on this sale. On March 8, 1984, the Complainant sold agricultural products consisting of Snap Beans and Wax Beans (Lot No. 1294) to the Respondent. At the time of the hearing there was still unpaid and owing the amount of $184.20 on this sale. On March 8, 1984, the Complainant sold agricultural products consisting of Wax Beans (Lot No. 1295) to the Respondent. At the time of the hearing there was still unpaid and owing the amount of $184.20 on this sale. On March 19, 1984, the Complainant sold agricultural products consisting of Snap Beans and Zukes (Lot No. 1453) to the Respondent. At the time of the hearing there was still unpaid and owing the amount of $202.50 on this sale. On March 19, 1984, the Complainant sold agricultural products consisting of Snap Beans and Zukes (Lot No. 1454) to the Respondent. At the time of the hearing there was still unpaid and owing the amount of $110.00 on this sale. On March 19, 1984, the Complainant sold agricultural products consisting of Snap Beans and Zukes (Lot No. 1457) to the Respondent. At the time of the hearing there was still unpaid and owing the amount of $202.50. The total amount owed for agricultural products by the Respondent to the Complainant, which amount was unpaid as of the time of the hearing, is $1,401.20.
Recommendation On the basis of all of the foregoing, it is recommended that a Final Order be entered directing H. M. Shield, Inc., to pay Jay Nelson and Ernest Leclercq, d/b/a Sun Coast Farms, the amount of $1,401.20 for the agricultural products described in the findings of fact, above. In the event the Respondent fails to make such payment within 15 days of the Final Order, it is recommended that the surety be required to pay pursuant to the bond. DONE and ORDERED this 6th day of June, 1985, at Tallahassee, Florida. Hearings Hearings MICHAEL M. PARRISH Hearing Officer Division of Administrative The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative this 6th day of June, 1985. COPIES FURNISHED: Jay Nelson & Ernest Leclercq d/b/a Sun Coast Farms P.O. Box 3064 Florida City, Florida 33034 H. M. Shield, Inc. Room 82 State Farmer's Market Pompano Beach, Florida 33060 Hartford Insurance Company of the Southeast 200 East Robinson Street Orlando, Florida 32801 Robert A. Chastain, Esquire Department of Agriculture and Consumer Services Mayo Building Tallahassee, Florida 32301 Joe W. Kight, Chief Bureau of License and Bond Department of Agriculture and Consumer Services Mayo Building Tallahassee, Florida 32301 The Honorable Doyle Conner Commissioner of Agriculture The Capitol Tallahassee, Florida 32301
The Issue The issue is whether, pursuant to section 320.642, Florida Statutes (2013), Respondent Jaguar Land Rover North America LLC (JLRNA) may relocate the dealership of Respondent Warren Henry Jaguar from 20800 Northwest Second Avenue, Miami, to the east side of Biscayne Boulevard, about 306.45 feet south of Northeast 151st Street, in North Miami.
Findings Of Fact Warren Henry Jaguar is an authorized Jaguar dealer located at 20800 Northwest Second Avenue in Miami Gardens. Warren Henry Jaguar has occupied this location since 1985. Since December 2012, Warren Henry Jaguar has shared this location with the Land Rover dealership of Land Rover North Dade, LLC. Both entities are owned by Warren Henry Automobiles, Inc., which also owns Infiniti and Fiscar dealerships near Warren Henry Jaguar's present location, as well as Land Rover South Dade, LLC, which is mentioned below. By notice dated December 2, 2013, JLRNA informed the Department of Highway Safety and Motor Vehicles (DHSMV) that it intended to permit Warren Henry Jaguar to relocate its Jaguar dealership to a new facility to be located on the east side of Biscayne Boulevard in North Miami, about 306.45 feet south of the intersection of Biscayne Boulevard and Northeast 151st Street, in North Miami. The new dealership would be in a development to be known as Biscayne Landing. The existing and proposed locations are both in Dade County, whose population exceeds 300,000 persons. On December 9, DHSMV published notice to this effect in the Florida Administrative Register. Despite an incorrect proposed street address, The Collection's principal, Kenneth Gorin, knew the proposed location of the relocated Jaguar dealership and timely protested the proposed relocation. The Collection is an authorized dealer for Jaguar, Audi, Porsche, Ferrari, Maserati, McLaren, Aston Martin, and Alfa Romeo. The Collection sells and services these vehicles from a single dealership located at 200 Bird Road in Coral Gables, Dade County. Warren Henry Jaguar and The Collection are "motor vehicle dealers" within the meaning of section 320.60(11)(a)1., Florida Statutes. JLRNA is a "distributor" and "licensee" within the meaning of section 320.60(5) and (8), Florida Statutes. As such, JLRNA is authorized to distribute Jaguar and Land Rover motor vehicles to its respective authorized dealers in Florida. In general, JLRNA assigns each of its dealers an area of responsibility (AOR) based on the proximity of zip codes to each dealership. Each Jaguar dealership has a non-exclusive AOR, meaning that JLRNA may unilaterally change a dealer's AOR. Although the AOR of Land Rover of North Dade is also non- exclusive, the AOR of Land Rover of South Dade is exclusive, meaning that JLRNA may not unilaterally change its AOR. The present location of Warren Henry Jaguar is east of the Sun Life Stadium. This area is in economic decline, as evidenced by widespread commercial vacancies and elevated crime levels. Within Warren Henry Jaguar's AOR for its current location, the new location would be about 7.2 road miles and less than five air miles to the southeast of the current location. The proposed location would be directly west of Oleta River State Park, which is separated from Haulover Park on the ocean by a narrow finger of the northernmost portion of Biscayne Bay. The proposed location is in an area that is economically vibrant. During at least one 12-month period within the 36 months preceding publication of notice of the relocation, The Collection made more than 25% of its retail sales of new Jaguars to persons who registered those vehicles within a radius of 12.5 miles of the proposed relocation site. Warren Henry Jaguar's present location is about 16.3 air miles from The Collection's dealership. The proposed location is about 2.4 air miles and 2.2 road miles closer to The Collection's dealership; the new location would be about 13.9 air miles and 15.8 drive miles from the Collection. The drive time between The Collection's dealership, on the one hand, and the present and proposed locations, on the other hand, would be almost unchanged. The "community or territory" within which to judge the performance of the Jaguar brand is the combined AORs of The Collection, Warren Henry Jaguar, and Alpine Motors, which is the Jaguar dealership in Ft. Lauderdale, Broward County (CommTerr). The parties agree upon this designation of the CommTerr, which captures the three Jaguar dealers operating in Dade and Broward counties. As noted in the Conclusions of Law, the adequacy of Jaguar representation in the CommTerr requires consideration of at least 11 factors, as set forth in section 320.642(2)(b). These statutory factors are considered, where appropriate, in groups. Two of the 11 statutory factors are the reasonably expected market penetration for the CommTerr and the volume of registrations and service business transacted by the existing dealers in the CommTerr. See § 320.642(2)(b)3. and 11. The assessment of the performance of the CommTerr requires the establishment of a benchmark against which the CommTerr may be measured. A reliable benchmark must reflect the relevant demographics of the CommTerr. A benchmark relatively close to Broward and Dade counties would better reflect the market and demographic conditions than a more distant benchmark. After considering a number of factors, JLRNA's dealer network analyst selected as a benchmark the AOR of the West Palm Beach Jaguar dealer. The analyst has testified as an expert in almost 100 cases of this type, including 10 to 15 dealer- relocation cases, and has been accepted as an expert in each case that went to trial. In the alternative, JLRNA's dealer network analyst selected as a benchmark the AORs of all Florida Jaguar dealers outside of the CommTerr. The exclusion of the CommTerr from the alternative benchmark was necessitated by the fact that the size of these two counties would have overrepresented their sales performance and effectively distorted the sales of Jaguar dealers through the remainder of Florida. These benchmark selections are reasonable. The Collection's dealer network analyst did not object to the alternative benchmark, although his Florida benchmark includes the CommTerr. However, the Collection's dealer network analyst objected to the West Palm Beach AOR primarily because this was the second-highest-performing AOR in Florida in 2012, although it has since ranked lower. As already noted, reliance on the West Palm Beach AOR as a benchmark tends to control demographic variables. The reasonableness of this selection is further evidenced by the fact, noted below, that Alpine Motors performed quite well when compared to the benchmark West Palm Beach AOR during the period in question. The objection to the West Palm Beach AOR is therefore rejected. To address any material difference in market conditions between the CommTerr and the benchmark area, JLRNA's dealer network analyst analyzed consumer purchase preferences in these two markets. During the relevant period, Jaguar's offerings have been the XF, which is in the medium premium sedan segment, and the XJ, which is in the large premium sedan segment. During most of the relevant period, JLRNA also offered the now-discontinued XK, which was in the large premium sport segment. In the last couple of years, JLRNA replaced the XK model with the F model--first a convertible and then a coupe; the F model is in the premium sport segment. Segmentation analysis applies more objective filters, such as body type (e.g., sedan vs. coupe) and body length, plus more subjective filters, such as eliminating otherwise-eligible line-makes, such as Hyundai, due to the perception that they are not within the core premium brand associated with Jaguar. After applying these filters and making relatively minor adjustments for segment-based market preferences between the CommTerr and the West Palm Beach AOR, the JLRNA dealer network analyst reasonably determined that Jaguar sales in the CommTerr were inadequate. For instance, in 2012, for the medium premium, large premium, and large sport premium (XK not yet replaced by F) segments, the Jaguar dealers would have been expected to generate 1129 retail registrations, but achieved only 822. The expected penetration for Jaguar dealers in the CommTerr was 8.32%, but the actual penetration was only 6.06%; this translates to a retail registration effectiveness of 72.8%. At the time that the JLRNA dealer network analyst prepared his initial report, 2012 was the last year for which retail registration effectiveness data was available. At the time, though, 2012 was not an anomaly. The retail registration effectiveness of the CommTerr compared to the West Palm Beach AOR was 98.1% in 2009, 83.1% in 2010, and 93% in 2011. Updating his earlier work, the JLRNA dealer network analyst showed that the CommTerr underperformed in 2013 and 2014 (through June) with retail registration effectiveness, when compared to the West Palm Beach AOR, of 85.6% and 78.2%, respectively. The downward trend from adequate performance in 2009 and near-adequate performance in 2011 became more pronounced from 2012 through June 2014. As noted above, Alpine Motors performed well during this period. In 2009, 2011, and 2013, its retail registration performance exceeded the performance of the West Palm Beach AOR benchmark. The underperformance of the CommTerr is thus attributable to the underperformance of Warren Henry Jaguar and The Collection, whose retail registration performance fell below that of the West Palm Beach AOR benchmark each year from 2009 through June 2014. The CommTerr performed no better when compared to the alternative benchmark of Florida less the CommTerr. Here, the CommTerr achieved retail registration effectiveness of 100% in 2010, 95.7% in 2011, 87.5% in 2012, 90.83% in 2013, and 84.81% through June 2014. And the below-benchmark performance is attributable to Warren Henry Jaguar and The Collection, as, again, Alpine Motors' retail registration effectiveness exceeded that of Florida less the CommTerr in 2009, 2010, 2011, and 2013. Based on the foregoing, new Jaguar sales have achieved below-expected market penetration in the CommTerr after consideration of all relevant factors, and JLRNA has received inadequate representation in the CommTerr as a whole. These findings are driven by penetration and representation factors applicable to the portion of the CommTerr in Dade County. Two of the 11 statutory factors are: a) whether there is adequate interbrand and intrabrand competition with Jaguar in the CommTerr and adequate consumer care for Jaguar in terms of sales and service and b) whether the relocation is justified based on economic and marketing conditions pertinent to dealers in the CommTerr. See § 320.642(2)(b)9. and 10. Based on population and demographics, the CommTerr encompasses one of the more important markets for luxury vehicle manufacturers in the world in terms of opportunities for sales and corporate branding. The CommTerr promises to continue to represent an important market for new luxury vehicle sales into the future. For relevant segments, new-vehicle registrations in the CommTerr have increased from 10,054 in 2010 to 17,984 in 2013. For the first six months of 2014, these registrations reached 9611, annualizing to another increase in new-vehicle registrations in 2014. For the most part, the period in question covers the recovery of the auto industry from the Great Recession of 2008. However, there is some evidence that Jaguar may be a brand in decline, as its popularity among older buyers has not transferred to younger buyers. From 2006 to 2011, U.S. Jaguar sales dropped from 19,943 to 11,138 new vehicles. But the vast potential of the south Florida market to support more luxury vehicle sales supports the finding that Jaguar sales in the CommTerr are inadequate. Based on the foregoing, inadequate performance by Jaguar in the CommTerr during the period in question has not been due to adverse economic and marketing conditions. Inadequate performance by Jaguar in the CommTerr is due to inadequate representation by The Collection and Warren Henry Jaguar in engaging in interbrand and intrabrand competition. Two factors of the 11 statutory factors are: a) the impact of the relocated dealer on consumers, the public interest, existing dealers, and JLRNA and b) the size and permanency of investment reasonably made and reasonable obligations incurred by existing dealers to perform their obligations under their dealer agreements. See § 320.642(2)(b)1. and 2. There is substantial opportunity for additional Jaguar sales in the CommTerr through two means: conquest sales, meaning the sale of Jaguar models to purchasers who own corresponding models of competitors' vehicles, and the sale of Jaguar models by CommTerr dealers to displace pump-in sales, which are sales by Jaguar dealers outside of the CommTerr to purchasers within the CommTerr. If the CommTerr dealers achieved the retail registration effectiveness of the West Palm Beach AOR, based on 2012 registration data, 350 conquest sales and 106 displaced pump-in sales would be available to the CommTerr dealers. These two categories thus represent a total opportunity of 456 new- vehicle sales. JLRNA's dealer network analyst estimates that Warren Henry Jaguar would obtain about 116 of these sales, if it relocated to the proposed location, leaving about 340 sales to The Collection and Alpine Motors. For 2013, the dealer network analyst estimates that, if it relocated, Warren Henry Jaguar would obtain 127 sales from conquest and pump-in displacement sales, leaving 246 sales to The Collection and Alpine Motors. By some measures, The Collection had, at 103 units, the largest shortfall in sales, when measured against average sales, among all U.S. Jaguar dealers for the 12 months ending in July 2014. Even The Collections' dealer network analyst conceded that sales performance of The Collection--as well as Warren Henry Jaguar (except in 2008), but not Alpine Motors--was below his Florida benchmark every year. (Pet. Ex. 2, Tab 11, p. 4.) The Collection contends that its below-average performance is due to its status as a single-line Jaguar dealer, as contrasted to the dual-line (Jaguar and Land Rover) dealership of Warren Henry Jaguar and its affiliate. The Collection's claim of disadvantage as a single-line dealer fails for two reasons. First, The Collection represents numerous other luxury brands, including Audi, which features SUVs that are competitive with Land Rover SUVs. Second, Alpine Motors, which has consistently outperformed The Collection and Warren Henry Jaguar, is a single-line dealer without other brands--and has earned a profit each year since 2009. Evidence offered by The Collection concerning the financial impact of the relocation was flawed. For instance, The Collection's dealer network analyst could offer no support for his assumption of a direct relationship between reduced sales revenues and reduced service and parts revenues. Worse, The Collection's accountant incorrectly assumed a direct relationship between reduced gross revenues and reduced profits. The relationship between dealership revenues and profits can be complicated. For instance, notwithstanding the lost sales opportunities of 103 units for the 12 months ending in July 2014 and poor sales over the entire period in question, The Collection is the most profitable Jaguar dealership in the United States. From 2011 to 2013, The Collection's net after- tax profit climbed 45% on the sale of seven fewer new Jaguars. Similar indirect relationships between new-Jaguar sales and gross or net after-tax profits exist from 2009 through August 2014. For example, The Collection's gross profit increased 23.3% from 2010 to 2012 while its vehicle sales decreased by 9.2%. Less dramatically, in attempting to demonstrate that The Collection's Jaguar-based financial performance was precarious, The Collection's accountant imputed excessive rent based on an overly generous value assigned to the facility and an excessive allocation to Jaguar of a share of the facility and facility costs. The accountant also distorted The Collection's Jaguar-based financial performance by including one-time legal expenses paid or incurred in 2013 in connection with this dealer-relocation litigation. As noted above, there is little risk posed to The Collection from the proposed relocation because there is plenty of sales opportunity in the CommTerr to go around. Thus, there is little risk posed to The Collection's investment and obligations in connection with its dealer agreement with JLRNA. Moreover, there is little, if any, evidence as to the size or permanency of investment or obligations incurred by The Collection to perform its obligations under its agreement with JLRNA. The record does not permit a precise allocation of facility expenses to Jaguar--and, thus, The Collection's obligations to Jaguar--but the facility-expense allocation is smaller than estimated by The Collection's accountant. JLRNA argues that a Jaguar loss, if any, would be a rounding error, given the sales and profits generated by The Collection's sales and service of the other seven brands. As framed, this argument is irrelevant because it impermissibly enlarges the scope of the issues of these cases. But where, as here, the protesting dealer represents several line-makes in a single facility and the subject line-make is a small fraction of its overall business, the investment risk posed to such a Jaguar dealer, as The Collection, is much less than the risk posed to a single-line Jaguar dealer that represents no other line-makes. Based on the foregoing, the relocation of Warren Henry Jaguar would not have an adverse impact on existing dealers, nor would it have an adverse financial impact on The Collection. And this relocation would not pose an unreasonable risk to The Collection's investment and obligations under its agreement with JLRNA. Another factor of the 11 statutory factors is any action by JLRNA to deny The Collection, as to the Jaguar brand, the opportunity for reasonable growth, market expansion, or relocation, including the availability of line-make vehicles in keeping with the reasonable expectations of JLRNA in providing an adequate number of dealers in the CommTerr. See § 320.642(2)(b)4. Although owned by JLRNA, Land Rover is not the same line-make as Jaguar, so JLRNA's refusal to grant The Collection a Land Rover franchise is not cognizable under this statutory factor. At some point, Mr. Gorin and Mr. Zinn negotiated the sale of Land Rover of South Dade to Mr. Gorin, The Collection, or an affiliate of either of them. But these negotiations were unsuccessful, and, of course, this proceeding cannot serve as a means of forcing Mr. Zinn (or Mr. Gorin) to sell so as to create a dual-line dealership in south Dade County. As noted above, the dealer agreement between Land Rover of South Dade and JLRNA precludes the manufacturer's unilateral revision to the dealer's AOR, so JLRNA could not create for The Collection an AOR out of the AOR of Land Rover of South Dade, even if JLRNA were motivated to do so. The corporate policy of JLRNA is to encourage dual- line dealers. There is nothing inherently objectionable in such a policy. Even with the growing popularity of Land Rover and declining popularity of Jaguar over the past several years, this corporate policy, on the present record, has not denied The Collection a reasonable opportunity for growth. However, Jaguars and Land Rovers share a common engine on a number of models, and JLRNA allocates these engines between the two line-makes. Obviously, the potential exists for JLRNA to restrict the growth of single-line Jaguar dealers by allocating a disproportionately large number of engines to Land Rovers. But the record does not demonstrate that JLRNA has done so in these cases. Except for a few months leading up to the administrative hearing, when the supply of XF and new F models was constrained, all Jaguar models have otherwise been in free supply during the period in question, so JLRNA's allocations of engines between Jaguars and Land Rovers could not have denied The Collection a reasonable opportunity for growth. Further, The Collection may have declined allocations, even of the F model, during the period in question, further underscoring the free-supply status of all Jaguar models during the relevant period. Based on the foregoing, JLRNA has not denied The Collection the opportunity for reasonable growth, market expansion, or relocation, including the availability of Jaguar vehicles in keeping with the reasonable expectations of JLRNA in providing an adequate number of dealers in the CommTerr. Another factor of the 11 statutory factors is any attempt by JLRNA to coerce The Collection into consenting to the relocation of Warren Henry Jaguar. See § 320.642(2)(b)5. On one occasion, JLRNA's Vice President of Dealer Network Development warned Mr. Gorin that he would be "crossing a line" if The Collection persisted in objecting to the relocation of Warren Henry Jaguar. The officer made the comment at an informal encounter with Mr. Gorin during a Jaguar dealer meeting. The officer added that The Collection's relationship with JLRNA would never be the same if Mr. Gorin did not drop its protest of the relocation. The officer characterized the protest as The Collection's "suing" JLRNA. The Vice President of Dealer Network Development has considerable power over Jaguar dealers. He was and is in charge of the Business Builder Program, which is the program by which dealers, such as Warren Henry Jaguar and The Collection, earn manufacturer hold-backs by various activities. For Jaguar, these hold-backs, which are more formally known as a "variable margin program," amount to up to 7% of the manufacturer's suggested retail price (MSRP) of a vehicle and may provide the difference between a profit and loss in Jaguar dealership operations over the course of a year. Notwithstanding the source of these threats, their seriousness is negated by the absence of any attempt whatsoever by JLRNA to punish The Collection for maintaining this protest. Had there been such evidence, the weight that would have been assigned to this factor would have been considerable and possibly jeopardized the proposed relocation. Another factor of the 11 statutory factors is the distance, travel time, traffic patterns, and accessibility between The Collection and the proposed relocation. See § 320.642(2)(b)6. As noted above, as a result of the relocation, the air distance between The Collection and Warren Henry Jaguar would be reduced by about 2.4 miles and the road distance would be reduced by about 2.2 miles. The relationship between relatively small changes in distance between dealers and the lack of meaningful impact on the non-relocating dealer is reflected in section 320.642(5)(a)4., which bars a protest if the relocating dealer reopens less than six miles from its existing location and its new location is more than 15 miles from the non- relocating dealer. The proposed relocation meets the first criterion and, by road miles, the second criterion. But the new location, by air miles, is about one mile short of the 15-mile threshold. Nonetheless, the relatively short distance that Warren Henry Jaguar would be moving and the relatively small change in the proximity of its new location to The Collection are facts to be considered under this statutory factor. In terms of travel time, the existing and new locations of Warren Henry Jaguar are both about 20.6 minutes from The Collection. And the relatively modest distance between the existing and new locations would not produce any changes in average driving time for owners of Jaguars in operation within Warren Henry Jaguar's AOR. Based on the foregoing, there are no material differences in distance, travel time, traffic patterns, and accessibility between The Collection, on the one hand, and, on the other hand, Warren Henry Jaguar's existing and new locations. Another factor of the 11 statutory factors is whether benefits to the consumer will likely occur from the relocation and whether these benefits are not obtainable by other geographic or demographic changes or expected changes in the CommTerr. See § 320.642(2)(b)7. The MSRPs of the Jaguar models at issue range from about $50,000 to over $100,000. Any foreseeable changes in the demographics of the immediate vicinity of Warren Henry Jaguar's present location are not going to be of any benefit to the public that might constitute customers of these luxury cars. The relocation toward the coast benefits the public because the demographics of the immediate vicinity of the new location is more in tune with the luxury car market. After the relocation, more of Jaguar's potential customers would be able to examine JLRNA's offerings in closer proximity to their homes, and all of Jaguar's potential customers would be able to examine Jaguar's offerings in a safer setting that hosts other luxury brands for comparison shopping, such as Audi, Lexus, and Lamborghini, and other high-end retail attractors, such as fine restaurants and high-end stores, including those at the nearby Aventura Mall and planned for the Biscayne Landing development itself. Based on the foregoing, the relocation of Warren Henry Jaguar will provide relevant consumers benefits that cannot be obtained by other geographic or demographic changes. The final factor of the 11 statutory factors is whether The Collections is in substantial compliance with its dealer agreement with JLRNA. It is. Balancing these 11 statutory factors, JLRNA has proved that its existing dealers in the CommTerr--particularly, The Collection and Warren Henry Jaguar--have provided inadequate representation. No other factors persuade otherwise.
Recommendation It is RECOMMENDED that the Department of Highway Safety and Motor Vehicles enter a final order dismissing all protests of The Collection to the proposed relocation of Warren Henry Jaguar to the east side of Biscayne Boulevard, about 306.45 feet south of Northeast 151st Street, in North Miami. DONE AND ENTERED this 22nd day of May, 2015, in Tallahassee, Leon County, Florida. S ROBERT E. MEALE Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 22nd day of May, 2015. COPIES FURNISHED: Jennifer Clark, Agency Clerk Department of Highway Safety and Motor Vehicles Neil Kirkman Building, Room A-430 2900 Apalachee Parkway, MS 61 Tallahassee, Florida 32399 (eServed) Richard N. Sox, Esquire Bass Sox Mercer, P.A. 2822 Remington Green Circle Tallahassee, Florida 32308 (eServed) J. Martin Hayes, Esquire Akerman Senterfitt 106 East College Avenue, Suite 1200 Tallahassee, Florida 32301 (eServed) Stephanie Leigh Carman, Esquire Hogan Lovells US LLP 600 Brickell Avenue, Suite 2700 Miami, Florida 33131 (eServed) John J. Sullivan, Esquire Hogan Lovells US LLP 875 3rd Avenue New York, New York 10022 (eServed) Barrett Rachel Charapp, Esquire Charapp & Weiss, LLP 20801 Biscayne Boulevard, Suite 403 Aventura, Florida 33180 (eServed) Michael G. Charapp, Esquire Charapp & Weiss, LLP 8180 Greensboro Drive, Suite 1000 McLean, Virginia 22102 Brad D. Weiss, Esquire Charapp & Weiss, Llp 8180 Greensboro Drive, Suite 1000 Mclean, Virginia 22102 Ryan L. Ford, Esquire Hogan Lovells Us Llp 555 13th Street, Northwest Washington, Dc 20004 Kimberly S. Maccumbee, Esquire Charapp & Weiss, Llp 8180 Greensboro Drive, Suite 1000 Mclean, Virginia 22102 Terry L. Rhodes, Executive Director Department Of Highway Safety And Motor Vehicles Neil Kirkman Building, Room B-443 2900 Apalachee Parkway Tallahassee, Florida 32399-0500 (Eserved) Steve Hurm, General Counsel Department of Highway Safety and Motor Vehicles Neil Kirkman Building, Room A-432 2900 Apalachee Parkway Tallahassee, Florida 32399-0500 (eServed)
The Issue Whether the Department of General Services should disqualify Savin Corporation's bid for failure to submit a separate supply price list.
Findings Of Fact On April 26, 1984, DGS issued ITB 402-600-38-B entitled "Walk-up Convenience Copiers, Plain Bond Paper" to establish a state contract for the purchase of walk-up convenience copiers. The ITB contains general and special conditions and specifications. The specifications provide for four types and twelve classes of copiers with four acquisition plans -- one-year lease, two- year lease, three-year lease, and outright purchase. Vendors may submit a bid for each type, class, and acquisition plan. Savin submitted a bid for all acquisition plans in Type I, Classes 1-10; Type II, Classes 1-3; Type III, Classes 1-10; and Type IV, Classes 1-10. /4 The special conditions of the ITB require that a price sheet (page 14 of the ITB) be submitted for each machine bid. The price sheets are used to evaluate the bids, and contracts are awarded in each category to the bidder submitting the lowest cost per copy. The cost per copy is determined by a cost formula set for in the special conditions which consist of three factors: machine cost, labor cost, and supply cost. The following special conditions of the Invitation To Bid relates to supply costs: C) SUPPLY COST- The bidder shall compute supply costs on the Manufacturer's Brand. If there is an existing state contract for supplies for the manufacturer's brand equipment; the state contract price may be substituted. Supply costs will be rounded to six (6) decimal points. All other costs will also be rounded off to six (6) decimal points. The volume price used by the vendor to compute supply cost shall be based on the monthly median volume of the type and class being bid. Supply cost submitted shall be firm for the contract period, except for paper, and all supply costs shall be current market price, verifiable. The price list shall also include the manufacturer's standard test pattern as the original document. Vendor must complete the supply price list (See page 13) and include it with his bid and must submit a separate supply price list reflecting volume discount prices to substantiate that correct price volumes were used unless state contract prices were used. A contract award may include supplies during the term of this contract if deemed in the best interest of the State. By electing to substitute state contract supplies, the vendor is certifying that his equipment, using said supplies, will meet all performance requirements of this bid and of the equipment manufacturer. Failure to include the supply price lists and manufacturer's guaranteed yields with your bid shall automatically disqualify the bid. NOTE: In the event of a variance between supply prices listed on the bid sheet and the supply price list submitted with the bid, the supply price list prices shall prevail, and the bidder's cost per copy will be adjusted accordingly. NOTE: All cost formulas will be verified by the Division of Purchasing and errors in extension will be corrected. In the event incorrect supply costs volumes are used by a bidder, the Division of Purchasing will adjust these costs to the median volume range. The above quoted portion of the ITB makes it absolutely clear that each vendor had to submit two supply price lists: the supply price list set forth on page 13 and a separate supply price list, reflecting quantity discounts which was to be used to "substantiate that correct price volumes were used." Further, it was specifically stated that the failure to include both supply price lists with the bid would result in the bid being automatically disqualified. The page 13 supply price list consists of a list of various supplies and two columns for the bidder to complete entitled "Net Delivered Price (per carton)" and "Manufacturer's Guaranteed Yield". Page 13 was included in the ITB to cure a problem the Department had in the 1983-84 contract year with the manufacturer's guaranteed yield. A note at the bottom of page 13 reminds the bidder that a separate supply price list must be submitted with the bid. It states: NOTE: Bidders must submit their quantity discount prices for supplies on a separate sheet for verification and inclusion in the contract should the State elect to award supplies. The separate supply price list reflecting quantity discounts was required to verify the prices submitted by the bidder on pages 13 and 14 and to prevent the practice of low-balling". "Low-balling" occurs when a bidder uses a large quantity supply cost to determine the cost per copy on a low volume machine. This results in an artificially low cost per copy and gives the "low- balling" bidder an advantage over other bidders who use the correct supply price based on the median volume of the machine being bid. To verify that the proper cost per copy is submitted the prices on the separate supply price list are compared to the prices on the bid sheet. If there is a conflict, the prices on the separate supply price list prevail, and the prices on the bid sheet and on page 13 are adjusted to conform to the prices on the separate supply sheet. Prior to the 1984 Invitation to Bid Savin historically offered the state volume discount pricing for supplies. However, for the 1984-85 Invitation to Bid Savin decided to offer set pricing for supplies rather than volume discount pricing. Under set pricing the price of the supply item remains the same regardless of the quantity purchased. By offering a set price for supplies, at the lowest published discount pricing level offered to the Federal government, Savin felt it would gain a competitive advantage in Florida and other states that had competitive bidding. In states where competitive bidding was not used Savin did not offer set pricing but used published quantity discount pricing. In response to the 1984 Invitation to Bid, Savin completed the Supply Price List on page 13 and the bid sheet on page 14 for each machine bid. However, Savin did not submit the separate supply price list for each bid as required by the note at the bottom of page 13 and the underlined portion of the special conditions relating to supply cost. Because the separate supply price lists were not submitted with the bids, the Department determined that Savin's bids were unresponsive. The Department also disqualified three or four other vendors, including Royal, Panasonic, and Southern Copy Products, because they did not submit the separate supply price lists. Savin did not submit the separate supply price list because it interpreted the terms and conditions of the ITB as requiring a separate supply price list only when quantity discount pricing was being offered. Because Savin was offering set pricing, it did not consider that the separate supply price list was necessary. However, the only way the Department could determine whether a vendor was offering set pricing or quantity discount pricing was by referring to the separate supply price list. Several other vendors that offered set pricing including Canon, Mita Copy Star America, Pitney Bowes, Monroe and A. B. Dick, submitted separate supply price lists with their bids which indicated that set pricing was being offered. The separate supply price list not only indicated whether quantity discount pricing or set pricing was being offered, as stated above, it was used by the Department to verify the prices submitted on the bid sheets and on page 13. In one case where the bidder offered set pricing, the supply prices for toner and developer listed on the bid sheets and on page 13 differed from the prices on the separate supply price list, and the prices on the bid sheets and page 13 were adjusted to conform with the prices on the separate supply price list. Therefore, the inclusion of the separate supply price list was not necessary only when discount pricing was offered, it was necessary when set pricing was offered. The separate supply price list established that set pricing was being offered; it established the price at which the bidder must sell the supplies; and it was used to verify the prices on the bid sheet and page 13. /5 Therefore, the omission of the separate supply price list from the response to the ITB cannot be considered a minor irregularity which may be waived. Although a separate supply price list is required by the ITB, the list does not have to follow any particular format. The separate list sufficiently indicates that set pricing is being offered if only one price is quoted for a given supply. If varying prices are offered for a given supply, based on the amount ordered, then quantity discount pricing is being offered. Many of the proposed findings of fact submitted by the Petitioner have been rejected in whole or in part. The majority have been rejected by way of making contrary findings of fact as set forth above. Others have not been addressed in the findings of fact because they are conclusions of law or argument on the issue. However, other proposed findings are rejected for the reasons stated in the subparagraphs below: Paragraphs 17 and 18 are rejected as irrelevant, immaterial and not supported by competent substantial evidence. When Mr. Hittinger was asked whether he assumed that Savin was offering quantity discount pricing, he answered "I didn't assume. I didn't make any assumptions." (T-266). Mrs. Hayes stated: "I am afraid on a bid situation, we can't assume what their pricing would have been if they had submitted it." (T-245) Mr. Nee did indicate that the disqualification of Savin did not make any sense, but explained that statement by stating: "The phrase that didn't make any sense was talking about Savin's failure to submit a quantity discount price list... Because Savin had always done it in the past, and they -- they never left -- if we asked them to cross every T, they crossed every T and it didn't make any sense that something apparently looked to be omitted". Paragraph 15 is rejected as not supported by competent substantial evidence. The evidence indicates that the primary purpose of page 13 was not to establish the price at which vendors would be obligated to sell their supplies, but was included in the ITB for the submission of manufacturer's guaranteed yields (T-144, T-146; T-158-16O, T-166-167, T-242). Further, the witnesses who testified that the vendor would be bound by the prices on page 13 all qualified their answers. In response to the question of whether the bidder would be bound by the prices on page 13, Mrs. Hayes responded, "...if he did submit a substantiating document that he is offering a set price, and that set price agrees with the price that is on page 13, yes." (T-242); Mr. Hittinger responded: "If he receives an award, yes"; "If he had a responsive bid" (T- 264); and "No, in itself it does not. It would have to have a supporting verification sheet to complete that offer." (T-268); Mr. Barker responded, "If they are correct," (T-163). Virtually all the witnesses testified that it was the separate supply price list that established the prices by which the vendors would be bound. Paragraph B is rejected as irrelevant, however, the evidence supports a finding that some state agencies utilize volume discounts on copier supplies and some state agencies do not purchase in sufficient quantities to utilize volume discounts.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is recommended that Savin's bids be disqualified. DONE AND ENTERED this of 7th June 1985, in Tallahassee, Leon County, Florida. DIANE A. GRUBBS Hearing Officer Division of Administrative Hearings 2009 Apalachee Parkway The Oakland Building Tallahassee, Florida 32301 (904)488-9675 Filed with the Clerk of the Division of Administrative Hearings this 7th day of June, 1985.
The Issue The issue for consideration is whether Respondent, Southern Corporate Packers, Inc., and its surety, are liable to Petitioner for additional payment for the sale of watermelons during the months of June and July, 1992.
Findings Of Fact During June, 1993, Petitioner, Howell J. Walker, a farmer in Branford, Florida for more than 30 years, was able to sell the majority of his watermelon crop to a produce broker. That sale is not pertinent to the issues herein except in that there remained, after the sale, a substantial number of smaller melons in which his other broker apparently was not interested. This broker, however, referred him to Southern Corporate Packers, Inc., a broker with which Petitioner had not, to that time, done business. Ron Carter, a buyer for the Respondent came to Petitioner's farm and agreed to buy "whatever they could use" at a "guaranteed" price of 3.5 cents per pound. Petitioner claims that he advised Mr. Carter then, that his usual practice was to get his labor costs for loading right away and get the balance at a later date. This seemed to be agreeable to Respondent and a deal was struck. Petitioner received a wire transfer of $10,000.00 from Respondent at the completion of loading on July 3, 1992, and was to get an additional $8,000.00 shortly thereafter, with the balance due payable soon after that. Based on the weights recorded for the melons loaded, the total price for the shipment was $30,977.10. It was not a "cash in the field" transaction. Unfortunately the parties did not clearly define the exact terms of the sale. Both agree the Petitioner was to get a "guaranteed" price of 3.5 cents per pound. Petitioner contends that at no time did he agree to "ride the load", and assume the risk of loss or spoilage of the shipment. Respondent contends that by taking a "guaranteed" price, Petitioner, according to the custom of the trade, agreed to assume the risk of loss due to spoilage or shrinkage, and that the price he was to be paid was the price received by the broker after deducting for spoilage or shrinkage. Petitioner claims he shipped at least 20 truckloads, figuring from the amount of pounds he paid his help to load. However, he has loading receipts and bills of lading for only 18 truck loads. Respondent claims only 18 truckloads were shipped and, absent any further proof that the exact number exceeds 18, it is found that the number of loads shipped was 18. Of this number, one truck load was lost entirely. It completely disappeared and never arrived at the destination in Canada to which it was sent. Respondent assumed the risk of that loss and paid Petitioner for the full amount of the load. There were several other loads that were "in trouble", however, for which a market could not be found at the "guaranteed" price. In each case, when Respondent was notified the load was rejected or could not be delivered, Mr. Arrigo, Respondent's President, would try to find an alternative buyer. In each case, the amount received for that load was considerably less than the expected price for a full load. When Respondent was advised that the first shipment was in trouble, he contacted Mr. Walker by phone with Mr. Carter, Respondent's buyer, also involved. He advised Petitioner of the situation and claims that Petitioner told him to get the best price possible. This is not unreasonable and does not, by itself, indicate Petitioner agreed to "ride the load." As to many of the others, which were delivered as sent, they, too, suffered from shrinkage in which the delivery weight was somewhat less than the shipping weight. After the last shipment was dispatched and Petitioner did not receive any further payment after several phone calls to Respondent's Immokalee, Florida's office, Petitioner and his wife went there and still were not able to get a firm answer as to when they would be paid. Petitioner was ultimately able to contact Mr. Arrigo by phone and at that time was told that because he had accepted a "guaranteed" price, he was considered to be "riding the load" and assuming the risk of loss. At this point one must consider the meaning of the term "guaranteed" as used in the instant context. In the produce buying business, the word, "guaranteed price" means that the grower/shipper guarantees safe delivery, and also that the buyer/broker guarantees no less than the agreed-upon price if the produce arrives in good condition, regardless of the fluctuations in the market at the time of delivery. Respondent contends, then, that if Petitioner did not want to assume the risk of spoilage/shrinkage, he should have sold at a lower, "cash at the field", price. Petitioner claims he never does this. Petitioner ultimately received a check for $8,000.00 from Respondent. The check was dated July 8, 1992 but the postmark on the envelope in which it was received reflects a mailing date from Ft. Myers, Florida of July 23, 1992. Petitioner claims a balance due of $12,977.10 based on a total price of $30,299.10 for the total weight of melons shipped, less the $10,000.00 wire transfer and the $8,000.00 check received. Respondent claims a balance due of only $2,253.14 based on a total price of $20,253.14, (total weight received on 13 loads, plus actual price received on 3 "troubled" shipments, minus the freight charge for 2 rejected shipments), less the $10,000.00 wire transfer and $8,000.00 check, and forwarded a check for that amount to the Department to hold in escrow for Petitioner pending resolution of this hearing. Petitioner was able to produce shipping documents for only 18 loads, of which one was unweighed. However, figuring the total weight for the other 17 shipments (753,060 pounds) and adding thereto the average weight per shipment, (44,297 pounds) indicates 797,357.64 pounds were shipped at 3.5 cents per pound. This results in a total price for the 18 loads of $27,907.52 instead of the $30,977.10 indicated by Mr. Walker. Petitioner unequivocally denies he agreed to "ride the load" and assume the risk for loss or spoilage of any shipment. Neither Mr. Carter nor Mr. Arrigo, the only two individuals from Respondent with whom Petitioner negotiated, can specifically recall if either told Petitioner his acceptance of the "guaranteed" price of 3.5 cents per pound meant he agreed to ride the load. Notwithstanding Mr. Duer's testimony that the custom of the industry so indicates, Petitioner's clear denial, not clearly offset by any definitive evidence to the contrary, here must be accepted as the better evidence.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is, therefore: Recommended that a Final Order be entered requiring Respondents to pay to the Petitioner, Howell Walker, d/b/a Walker Farms, Inc., the sum of $7,654.38 for watermelons sold and delivered. RECOMMENDED in Tallahassee, Florida this 19th day of January, 1993. 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 19th day of January, 1993. COPIES FURNISHED: Howell J. Walker Route 3, Box 52 Branford, Florida 32008 John B. Grandoff, III, Esquire Hill, Ward & Henderson, P.A. Suite 300 - Barnett Plaza 101 East Kennedy Blvd. Tampa, Florida 33601 Hon. 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
The Issue Whether the Respondent Five Brothers Produce owes Petitioner an additional $13,965.00 for snap beans that Five Brothers Produce received, sold, and shipped to buyers as Petitioner's agent/broker.
Findings Of Fact Respondent Five Brothers Produce, Inc. ("Respondent" or "Five Brothers") accepts agricultural products from growers for sale or consignment and acts as an agent/broker for the growers. It has a surety bond issued by Old Republic Surety Company to secure payment of sums owed to agricultural producers. Petitioner Paul Hernandez ("Petitioner" or "Mr. Hernandez") grows snap beans. On March 26, 2010, Mr. Hernandez delivered 400 boxes of hand-picked snap beans to Five Brothers to sell. On March 27, 2010, Mr. Hernandez delivered an additional 750 boxes of snap beans to Five Brothers to sell for him. Five Brothers' Marketing Agreement and Statement included on the Grower Receipt was given to Mr. Hernandez on March 26 and 27, 2010. It provided in relevant part: The grower gives Five Brothers Produce the right to sell or consign to the general trade. No guarantees as to sales price are made and only the amounts actually received by Five Brothers Produce, less selling charges, cooler charges, and any other charges will be paid to the grower. Final settlement will be made within a reasonable length of time and may be held until payment is received from the purchaser. On March 27, 2010, Five Brothers' invoice showed that it shipped 336 of the first 400 boxes of Mr. Hernandez' beans to Nathel and Nathel, Inc., at the New York City Terminal Market. From that shipment, Five Brothers received $12.00 a box, or a total of $4,032.00. After deducting its fee of $1.60 a box, Five Brothers paid Mr. Hernandez net proceeds of $3,494.40. On the next day, Five Brothers' records show it sold the remaining 64 boxes to Tolbert Produce, Inc., for $22.70 a box. On March 26, 2010, the United States Department of Agriculture ("USDA") Fruit and Vegetable Market News Portal reported sales prices ranging from $24.85 to $25.85 a box for round green handpicked snap beans grown in Central and South Florida. Mr. Hernandez had reason to question the accuracy of Five Brother's invoice, given the USDA data and the Tolbert Produce sale. Nathel and Nathel also documented the sales of the 336 boxes of beans and 160 boxes of squash it received from Five Brothers. By the time of its settlement with Five Brothers, it paid a total of $5,643.50, of which $4,032.00 came from the sales of beans as reported on the Five Brothers' invoice. On March 29, 2010, Five Brothers shipped all 750 boxes of beans it received from Mr. Hernandez on March 27, 2010, to A and J Produce, Inc., at the New York City Terminal in the Bronx. Five Brothers' invoice indicated that it received $9.00 a box, or a total of $6,750.00 from A and J. Five Brother's fee for that shipment was also $1.60 a box, or a total of $1,200.00, leaving Mr. Hernandez with a net return of $5,550.00. USDA market data showed prices for the handpicked snap beans, on March 29, 2010, ranged from $20.00 to $20.85 a box. The actual cost of production for Mr. Hernandez, including seeds, water, fertilizer, and labor can range from $6.00 to $10.00 a box. He would not have paid for the labor to hand-pick beans if he had known he could not get an adequate return on his investment. Relying on the USDA data, Mr. Hernandez reasonably expected his net return to be $13,965.20, higher than it was. Five Brothers sold the beans in a rapidly declining market. Pointing to the same USDA data, Five Brothers showed the drop towards the end of March and into April 2010. On March 30, the price was down to $16.85 to $18.85. On March 31, the price was $14.85 to $16.85. And, from April 1 through April 6, a box of snap beans was selling for $10.00 to $12.85. Mr. Hernandez alleged that Five Brothers' invoice for the sale of the 750 boxes was not correct. He pointed to an exhibit that showed Five Brothers shipped A and J Produce 1344 boxes of beans, including the 750 boxes grown by him, and another exhibit that appeared to show that A and J received the 1344 boxes, on March 31, 2010, and paid Five Brothers $20.00 a box. That same A and J document, however, tracks the declining prices as each part of the shipment was sold. In the end the value was 68.82 percent of the target price of $20.00, which equals an average sales price of $13.76. After Five Brothers deducted the $1.60 a box fee, proceeds for Mr. Hernandez were approximately $12.00 a box consistent with that reported as A and J's final settlement with Five Brothers. The evidence that there was no guarantee of a sales price in the agreement, that market prices were declining rapidly, and that the receivers' documents support those of the shipper, Five Brothers, is sufficient to rebut any evidence that Mr. Hernandez is entitled to additional payments for the beans delivered to Five Brothers on March 26 and 27, 2010.
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 complaint of Paul Hernandez against Five Brothers Produce, Inc. DONE AND ENTERED this 20th day of September, 2010, in Tallahassee, Leon County, Florida. S ELEANOR M. HUNTER Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 20th day of September, 2010.
The Issue Whether the Respondent Five Brothers Produce owes the Petitioner $16,493.00 for green beans that Five Brothers Produce accepted, sold, and shipped to the buyer as the Petitioner’s agent/broker.
Findings Of Fact Based on the oral and documentary evidence presented at the final hearing and on the entire record of this proceeding, the following findings of fact are made: Five Brothers Produce accepts agricultural products from growers for sale or consignment and acts as an agent/broker for the growers. Currently, Five Brothers Produce represents 25 to 30 growers as agent/broker. Five Brothers Produce has a surety bond issued by Old Republic Surety Company to secure payment of sums owed to agricultural producers. Veggie Growers grows agricultural produce in fields located in Homestead, Florida. On or about April 28, 2009, a buyer employed by Five Brothers Produce examined Veggie Growers' crop of green beans in the field. He suggested that Veggie Growers pick the beans and deliver them to Five Brothers Produce for sale. On April 28, 2009, Veggie Growers delivered 796 boxes of hand-picked green beans to Five Brothers Produce. The beans were inspected and accepted for sale by an employee of Five Brothers Produce. The Marketing Agreement and Statement included on the Grower Receipt for the produce given to Veggie Growers by Five Brothers Produce provided in relevant part: The grower gives Five Brothers Produce the right to sell or consign to the general trade. No guarantees as to sales price are made and only the amounts actually received by Five Brothers Produce, less selling charges, cooler charges, and any other charges will be paid to the grower. Final settlement will be made within a reasonable length of time and may be held until payment is received from the purchaser. On April 29, 2009, Veggie Growers delivered 514 boxes of hand-picked green beans to Five Brothers Produce. The beans were inspected and accepted for sale by an employee of Five Brothers Produce. The Marketing Agreement and Statement included on the Grower Receipt for the produce delivered by Five Brothers Produce to Veggie Growers on April 29, 2010, included the same provision as quoted above. Veggie Growers received a picking advance of $3980.00 on the beans from Five Brothers Produce on April 28, 2010, and it delivered a total of 1310 boxes of green beans to Five Brothers Produce on April 28 and 29, 2009. The beans picked by Veggie Growers on April 28 and 29, 2009, were in good condition when they were picked, packed, and delivered to Five Brothers Produce. On April 29, 2009, Five Brothers Produce sold 50 crates of Veggie Growers’ beans to J. H. Harvey for $15.00 per crate. On April 30, 2009, Five Brothers Produce shipped the remaining 1260 crates of green beans received from Veggie Growers to Chenail Fruits et Legumes (“Chenail”) in Montreal, Quebec, Canada. In this shipment, Five Brothers Produce also included 84 crates of beans obtained from growers other than Veggie Growers, for a total of 1344 crates of green beans. The invoice issued by Five Brothers Produce reflecting the sale of 1344 boxes of green beans to Chenail identified the price of the beans as $11.50 per box, together with a Ryan recorder, which is used to measure the temperatures during transit, and pallets furnished by Five Brothers Produce, for a total due from Chenail of $16,671.50. Chenail received the shipment of beans at 11:30 on May 3, 2009, and requested an inspection at 5:32 on May 4, 2009, stating on the inspection request that it was “protesting the above described load due to poor condition on arrival.” Pursuant to the agreement between Chenail and Five Brothers Produce, a private inspection report was ordered, which was to include digital temperatures, “as conclusive evidence of the condition of this product noted upon arrival at destination.” The Certificate of Inspection indicated that the inspection report was completed at 7:00 on May 4, 2009, and that no decay was in evidence; that an average of 15 percent of the beans exhibited “dark green pepper spot discoloration ((resembling bruising) affecting materially the appearance),” with a range of six percent to 22 percent; that an average of two percent of the beans exhibited russeting; an average of seven percent of the beans were flabby, with a range of three percent to 12 percent; and that an average of four percent of the beans exhibited wind scars, with a range of one percent to 10 percent. The report also reflected that the bean crates were “in good order properly packed. Finally, the pulp temperature of the beans was noted in the report at 40 degrees Fahrenheit; the warehouse temperature was noted as 40 degrees; and the outside temperature was noted as 63 degrees. No temperature was noted for the vehicle in which the beans had been shipped, presumably because the beans had been off-loaded. A Commodity References form for beans was attached to the inspection report. It included information that the United States Department of Agriculture recommended storing snap beans at 40 to 45 degrees Fahrenheit; that the “standard grade tolerances” for defects in U.S. No. 1 snap beans is 13 percent total, “including 5 % serious including 1 % soft decay.” The Commodity References form also included information that, for a “[m]aximum percentage for a 5 day normal transit,” the “Suitable Shipping Condition/F.O.B. Good Delivery Guideline” for snap beans is 18 percent total, “including 8 % serious including 3 % decay.” The condition of the beans shipped by Five Brothers Produce exceeded the standard tolerances. The Commodity References form also indicated that, if the beans were held at a temperature cooler than 40 degrees Fahrenheit, there would have been evidence of decay in the form of surface pitting and russeting, with rusty brown specks, and the beans would “then become spotted and sticky when removed to warmer temperatures.” There was no indication on the Certificate of Inspection that the beans exhibited any of these features except that an average of two percent of the beans were russeted. Pursuant to these standards, Chenail properly considered the 1344 crates of beans shipped from Five Brothers Produce to be defective. Based on the results of the inspection report of the 1344 crates of beans, Chenail sent Five Brothers Produce a statement reflecting that it would remit to Five Brothers Produce a total of $1,275.70 U.S. The statement showed that Chenail paid nothing for 374 crates of beans; $6.00 Canadian per crate for 112 crates; $8.00 Canadian per crate for 336 crates; and $9.00 Canadian per crate for 522 crates. Based on these figures, Chenail calculated that the total gross amount due to be paid to Five Brothers Produce for the 1344 crates of beans was $6,446.40 U.S. Chenail then deducted $5,170.70 U.S. for inspection, pallets, recorder, transport, and warehousing costs and indicated it would remit to Five Brothers Produce a net total of $1275.70, or an average of $0.95 per crate of beans. Five Brothers Produce subsequently sent an invoice to Chenail for $1,491.20 U.S., or a average of $1.11 per crate, after deducting the charges Chenail had included for the pallets and the recorder, which had been furnished by Five Brothers Produce. Five Brothers Produce sent Veggie Growers a Grower Lot Status form showing the history of the 1310 crates of hand-picked “bush” beans it received from Veggie Growers on April 28 and 29, 2009. The form reflects the sale of 50 crates of beans to J. H. Harvey on April 29, 2009, at $15.00 per crate. It also reflects a price $0.95 per crate for the 1260 crates of Veggie Growers snap beans included in the shipment to Chenail, for a total sale amount of $1,458.09. Five Brothers Produce deducted from this amount a $50.00 loading fee and a $30.00 selling charge for the beans sold to J. H. Harvey and the $3,980.00 advance paid to Veggie Growers for the beans. Five Brothers Produce did not take a loading charge or a selling charge for the 1344 crates of beans sent to Chenail. According to the calculations of Five Brothers Produce, Veggie Growers had a net return of -$2,601.91 on the 1310 crates of beans. The market dictates how quickly Five Brothers Produce can sell the produce it accepts as agent/broker. In late April, snap beans generally do not sell quickly because there are a lot of beans available. Beans should be sold and shipped as soon as possible after picking. Snap beans will usually last only seven days from the date of picking. It normally takes two or three days for a shipment of produce to travel from Five Brothers Produce to Canada. Sometimes beans that are in good condition at the time they are shipped are not good enough to survive the trip to Canada. Summary The evidence presented by Veggie Growers is not sufficient to establish that it is entitled to any additional payment for the beans it delivered to Five Brothers Produce on April 28 and 29, 2009. Veggie Growers established that it picked the beans and delivered them to Five Brothers Produce at the suggestion of a representative of Five Brothers Produce, who inspected the beans in the field and found them acceptable, and that the beans were acceptable when delivered to Five Brothers Produce. Indeed, on April 29, 2009, when the final 514 crates of beans were delivered to Five Brothers Produce, Five Brothers Produce sold 50 crates for $15.00 per crate, establishing that the beans were of good quality when delivered. Nonetheless, there was no evidence presented to suggest that Five Brothers Produce did not use its best efforts to locate a buyer for the remaining 1260 crates of beans within a reasonable time after the beans were delivered, nor was any evidence presented to suggest that Five Brothers Produce did not properly store, load, and ship the beans to Chenail. The beans were shipped from Five Brothers Produce on April 30, 2009; the inspection report shows that the beans were properly packed; and there is no indication that the beans had been stored at an improper temperature.
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 complaint of Veggie Growers, Inc., against Five Brothers Produce, Inc. DONE AND ENTERED this 29th day of July, 2010, in Tallahassee, Leon County, Florida. PATRICIA M. HART 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 29th day of July, 2010.
The Issue Whether or not Respondent, Dixie Growers, Inc., is indebted to Petitioner, Leah Raulerson, for agriculture produce purchased and not paid for in the amount of $3,722.49.
Findings Of Fact Based upon my observation of the witnesses and their demeanor while testifying, and the entire record compiled herein, I make the following relevant factual findings. During times material, Petitioner, Leah Raulerson, was an agricultural producer within the meaning of Section 604.15(5), Florida Statutes and concentrated primarily in the production of peppers. During times material, Respondent, Dixie Growers, Inc., was an agricultural dealer within the meaning of Section 604.15(1), Florida Statutes, and wholesaler and purchased peppers from Petitioner during May and June, 1992. Respondent, U.S. Fidelity & Guaranty Company, issued a surety bond to Respondent Dixie during times material. During late May and June, 1992, Petitioner sold various types of pepper including hungarian wax, finger hots, long hots, bell pepper, fancy cubanelle and jalopeno to Respondent Dixie. During times material, Petitioner inquired of one of Respondent Dixie's owners, Charles Lawton, what the wholesale market was bringing for the type of peppers that she produced and desired to sell. Respondent Dixie advised that the average wholesale price was $8.00 per box. Petitioner told Respondent Dixie, that she could sell her peppers for that price but if the market deteriorated to the point where the price was $4.00 or less per box that she should be advised whereupon she would cease picking the peppers as her labor and other related costs would be below her breakeven point of $4.00 per box. Respondent Dixie, advised Petitioner that he (Charles Lawton) would let her know if the market declined. The agreement was struck and Petitioner was advised by Respondent Dixie to "bring the peppers on." Based on their agreement, Petitioner continued picking the peppers. Petitioner delivered to Respondent Dixie, a load of the various types of peppers that she produced and expected to be compensated at the rate of an average of $8.00 per box for her produce. Petitioner was not paid for the peppers at that time nor was she told that she should not bring any more peppers to Respondent's warehouse. Approximately two weeks from the date of delivery, Petitioner was paid an average of $1.03 per box by Respondent Dixie. Petitioner provided copies of the wholesale market reports for the types of peppers that she produced and sold to Respondent, Dixie, during May and June, 1992. The reports reflect an average wholesale price of $8.00 per box. Petitioner is owed by Respondent Dixie, the sum of $3,722.49 for nonpayment of produce (peppers) that she delivered to Respondent Dixie during May and June, 1992. Respondent Dixie, has countered that Petitioner's produce was bad and that the market had declined to the point whereupon they (Dixie Growers) were only able to obtain approximately $1.03 per box for the produce that Petitioner sold to Respondent Dixie. However, Respondent Dixie, failed to present any credible evidence which would establish that either Petitioner's produce was bad or that they were only able to obtain $1.03 as contended. No evidence was presented that the market declined or situation was anything different from the prices Petitioner was quoted and as reflected by the prices shown in the wholesale market reports. It is more probable than not that Respondent Dixie received the amounts reflected in the wholesale market reports for the produce that it purchased from Petitioner during May and June, 1992.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that: The Department of Agriculture, Bureau of License and Bond, issue a Final Order requiring that Respondent, Dixie Growers, Inc., pay to Petitioner the sum of $3,722.49 as claimed for agricultural produce purchased from Petitioner. In the event that Respondent Dixie fails to pay Petitioner, within 30 days of the date of the Department's Final Order, the sum of $3,722.49, that Respondent, U.S. Fidelity & Guaranty Company, as surety, remit to the Department that sum which should then be timely remitted to Petitioner. DONE AND ENTERED this 17th day of May, 1993, in Tallahassee, Florida. JAMES E. BRADWELL 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 17th day of May, 1993. COPIES FURNISHED: Linda Terry Lawton P. O. Box 1686 Plant City, Florida 33564 U.S. Fidelity & Guaranty Company Legal Department P. O. Box 1138 Baltimore, Maryland 21203-0000 Richard Tritschler, Esquire Department of Agriculture The Capitol - PL-10 Tallahassee, Florida 32399-0810 Brenda Hyatt, Chief Bureau of Licensing and Bond Department of Agriculture 508 Mayo Building Tallahassee, Florida 32399-0800 Dixie Growers, Inc. P. O. Box 1686 Plant City, Florida 33564 Honorable Bob Crawford Commissioner of Agriculture The Capitol - PL 10 Tallahassee, Florida 32399 0350
