The Issue The issue in this case is whether Respondent H & R Packing & Sales Company, LLC, must pay Petitioner the full contract price for citrus fruit that said Respondent accepted upon tender despite knowing that the goods were nonconforming.
Findings Of Fact Petitioner Betty H. Shinn, d/b/a Shinn Groves ("Shinn"), is in the business of growing citrus fruit and hence is a "producer" within the regulatory jurisdiction of the Department of Agriculture and Consumer Services ("Department"). Respondent H & R Packing & Sales Company, LLC ("HRPS"), is a "citrus fruit dealer" operating within the Department's jurisdiction. On November 3, 2004, Shinn and HRPS entered into a contract (the "Contract") whereby HRPS agreed to harvest "fresh fruit quality" navel oranges from a particular section of Shinn's grove, which oranges Shinn agreed to sell to HRPS for the price of $8.00 per field box. The Contract provided, in pertinent part, as follows: The SELLER [that is, Shinn] shall take all reasonable and normal precautions to maintain fresh fruit quality during the life of this agreement. Failure to exercise close control to mites and other pests shall constitute a violation of this agreement. Further, the BUYER [i.e. HRPS] may at his option cancel this contract or renegotiate the price to be paid and the conditions of sale. In addition, the parties agreed that HRPS would pick the fruit no later than January 1, 2005, and pay for the oranges "within 45 days of the week of the harvest." An agent of HRPS's named Frederick Gaines inspected the crop identified to the Contract on a couple of occasions in November and December 2004. At some point he notified Shinn that the oranges were being damaged by rust mites. Shinn arranged to have the crop sprayed with Thiolux (a miticide), which was done around December 6, 2004. HRPS harvested the crop on January 3, 2005. (HRPS's performance in this regard was nonconforming, because the oranges were to be picked no later than January 1, 2005. By allowing HRPS to proceed after the deadline, however, Shinn waived HRPS's untimely performance.) At or about the time of the harvest, Mr. Gaines orally notified Charles Shinn (who is the son——and an agent——of Petitioner Betty Shinn) that the oranges had been damaged by rust mites and consequently were not fresh fruit quality. Mr. Shinn suggested that the oranges be "run through" the packing house (where the fruit would be graded on its quality), after which the parties could renegotiate the price, if necessary, to adjust for any material deficiencies in the quality of the crop. This proposal was evidently acceptable to HRPS, for it proceeded to harvest the oranges with knowledge that the crop was (or might not be) fresh fruit quality. HRPS picked 790 field boxes of oranges from Shinn's grove pursuant to the Contract. When these oranges were graded at the packing house, an unusually small percentage (approximately 34%) could be "packed out," that is, packaged and delivered for sale as fresh fruit.i The rest "graded out," i.e. failed to meet the standards for sale as fresh fruit, and were sold, at a loss, to juice processors. HRPS was obligated under the Contract to pay Shinn for the oranges on or before February 22, 2005, but HRPS let the deadline pass without either paying for the oranges or notifying Shinn of a breach with respect thereto. By letter dated March 17, 2005, Shinn demanded that HRPS pay the full contact price of $6,320 for the fruit harvested under the Contract.ii HRPS responded to Shinn's demand-letter via correspondence dated March 24, 2005. In this letter, HRPS acknowledged the Contract's existence but disclaimed the duty to pay in full due to the fruit's generally poor quality. HRPS expressed some willingness to resolve the matter amicably but offered no payment. Shinn was not satisfied and initiated this administrative proceeding. Ultimate Factual Determinations HRPS harvested and hauled away the oranges identified to the Contract. This performance constituted acceptance of the goods, and such acceptance was made with knowledge of a (possible) nonconformity, namely that the oranges were not fresh fruit quality due to rust mite damage. The apparent nonconformity was made manifest to HRPS shortly after the harvest, when an unusually small percentage of the pertinent crop was "packed out." HRPS failed, however, to notify Shinn of the breach within a reasonable time after confirming the nonconformity. Consequently, HRPS is barred from any remedy for breach. HRPS's failure to pay for the oranges at the Contract rate constituted a breach of the Contract entitling Shinn to recover the full price, together with pre-award interest. Accordingly, HRPS is obligated to pay Shinn the principal amount of $6,320.00, together with statutory interest of $378.20 (for the period 02/22/05 - 12/31/05). Interest will continue to accrue on the outstanding balance of $6,320.00 in the amount of $1.56 per day from January 1, 2006, until the date of the final order.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department enter a final order awarding Shinn the sum of $6,320.00, together with pre-award interest in the amount of $378.20 (through December 31, 2005), plus additional interest from January 1 2006, until the date of the final order, which will accrue in the amount of $1.56 per day. DONE AND ENTERED this 13th day of December, 2005, in Tallahassee, Leon County, Florida. S JOHN G. VAN LANINGHAM 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 13th day of December, 2005.
The Issue Whether the Respondent owes payment to the Petitioners for citrus sold by the Petitioners to the Respondent and, if so, what amount of payment is due.
Findings Of Fact Rogers Brothers Fruit Company was a licensed Florida citrus dealer in Lakeland, Florida, license #110, and as such posted a dealers bond for the 1992- 93 production season. Rogers Brothers Fruit Company, Incorporated was also a licensed Florida citrus dealer in Lakeland, Florida, license #111, and as such posted a dealers bond for the 1992-93 production season. In these cases, both Rogers Brothers Fruit Company and Rogers Brothers Fruit Company, Incorporated dealt interchangeably with, and are equally liable to, the Petitioners. CASE NO. 94-5393 R. T. Poppell and Carl Carpenter, Jr. are citrus growers in Florida. By contract entered into in October, 1992, Poppell and Carpenter sold oranges to Rogers Brothers. According to the contract, the price for the oranges was "participation based on Erly Juice contract." CASE NO. 94-5394 R. T. Poppell is a citrus grower in Florida. By contract entered into in October, 1992, Poppell sold oranges to Rogers Brothers. According to the contract, the price for the oranges was "participation to be based on Holly Hill contract." CASE NO. 94-5395 Jack P. Sizemore is a citrus grower in Florida. By contract entered into in October, 1992, Sizemore sold oranges to Rogers Brothers. According to the contract, the price for the oranges was "participation to be based on Holly Hill contract." CASE NO. 94-5396 Mac A. Greco, Jr., and R. T. Poppell are citrus growers in Florida. By contract entered into in October, 1992, Greco and Poppell sold oranges to Rogers Brothers. According to the contract, the price for the oranges was "participation to be based on Erly Juice contract." CASE NO. 94-5397 Maple Hill Groves, Inc., is in the business of growing oranges in Florida. By contract entered into in November 1992, Maple Hill sold oranges to Rogers Brothers. According to the contract, the price for the oranges was "participation to be based on Erly Juice contract." Erly Juice was a Florida company in the business of acquiring and processing citrus for juice. Although two of the contracts at issue in this proceeding indicate payment is based on participation in the Holly Hill contract, all parties apparently agree that the Erly Juice contract was the relevant payment reference. In this case, Rogers Brothers had entered into agreements with Erly Juice for a specified quantity of oranges. Rogers, in turn, contracted with growers to obtain the fruit Rogers needed to meet the obligation to Erly. Payment to the growers was to be based on "participation." Essentially, "participation" payment means that individual citrus growers get a proportionate share of the proceeds obtained by the buyer. During the 1993 citrus production season, Erly began experiencing financial difficulties. By letter of August 25, 1993, Erly notified citrus suppliers that the Erly plant in Lakeland had been sold and that the company had been reorganized. The letter further states as follows: We have now completed the calculation of the amount due for participants in our early/mid season orange pool. Our interim estimation of the final participation price is $.57 per lb. solid. We are, however, unable to pay the 25 percent advance amount due at this time. Negotiations continue with our bank to resolve this problem. By letter of September 29, 1993, Erly notified Rogers Brothers that Erly was unable to pay its obligations. The letter states: As we discussed on the phone this morning, ERLY Juice is unable to pay 100 percent of the amount due under our fruit contracts. We have, however, negotiated additional credit to allow us to offer 75 percent of the amount due in order to settle without litigation expense.... ...If you agree to settle our obligations to you for $22,630.54, please sign the attached Settlement Agreement and Release.... Rogers Brothers accepted the settlement offer. The settlement amount was calculated at 75 percent of the originally estimated $.57 lb. solid payment. The resulting payment is $.4275 lb. solid. Rogers Brothers, in turn, paid each Petitioner an amount equal to $.4275 lb. solid for the fruit obtained from each grower. The Petitioners assert that they are entitled to additional funds from Rogers Brothers in the amount of the 25 percent of the original $.57 estimate. The evidence fails to support the assertion.
Recommendation Based on the foregoing, it is hereby RECOMMENDED that: The Florida Department of Agriculture and Consumer Services enter a Final Order dismissing the Petitions for Relief filed in these cases. DONE and RECOMMENDED this 16th day of August, 1995, in Tallahassee, Florida. WILLIAM F. QUATTLEBAUM 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 16th day of August, 1995. APPENDIX TO RECOMMENDED ORDER The following constitute rulings on proposed findings of facts submitted by the parties. Petitioners The Petitioners' proposed findings of fact are accepted as modified and incorporated in the Recommended Order except as follows: I. Rejected, contrary to the evidence. Two of the contracts specify payment is based on the Holly Hill contract. Rejected, cumulative. Rejected, contrary to the evidence which establishes that the $.57 lb. solid payment was estimated. P, Q, R. Rejected, irrelevant. The Petitioners had no contract with Erly. S, T, U, V, W, X. Rejected, unnecessary. The evidence fails to establish that further payment from Rogers Brothers to the Petitioners is due under the terms of the contracts. Respondent The Respondent's proposed findings of fact are accepted as modified and incorporated in the Recommended Order. COPIES FURNISHED: The Honorable Bob Crawford Commissioner of Agriculture The Capitol, PL-10 Tallahassee, Florida 32399-0810 Richard Tritschler, General Counsel 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 Michael S. Edenfield, Esquire 206 Mason Street Brandon, Florida 33511 Michael D. Martin, Esquire 200 Lake Morton Drive, Suite 300 Lakeland, Florida 33801
Findings Of Fact Petitioner, Deerfield Groves Company (Deerfield), is a licensed citrus fruit dealer under Chapter 601, Florida Statutes, and Chapter 20-34, Florida Administrative Code. As a licensee, Deerfield is subject to administrative and criminal prosecution for violation of the statutes and rules governing licensed citrus fruit dealers and was under administrative prosecution for alleged violations of Section 601.33, Florida Statutes, and Rule 20-34.11, Florida Administrative Code, at the time of the final hearing. Deerfield has legal standing as a party petitioner in this case. Respondent, Department Of Citrus (DOC), promulgated Rule 20-34.11, Florida Administrative Code, under the authority of Section 601.10, Florida Statutes. Rule 20-34.11 is designed to implement Section 601.33, Florida Statutes. Respondent, Department Of Agriculture And Consumer Services, (DACS), is the agency charged with the duty to enforce Section 601.33, Florida Statutes, and Rule 20- 34.11, Florida Administrative Code. Personnel of DACS' Division Of Fruit And Vegetable Inspection also are responsible for testing fresh citrus for maturity under Chapter 20-34, Florida Administrative Code. Licensees such as Deerfield furnish a testing room for DACS inspectors to perform maturity tests and certify fresh citrus, as required for marketing fresh fruit. DACS leases an extractor, used for squeezing juice from fruit samples, and subleases the extractor to the licensee. Under the sublease, the extractor is kept in the testing room for use by DACS inspectors and, when not being used by DACS inspectors, for use by the licensee in performing its own tests. Typically, the licensee furnishes the testing room with a table for two and a chair or two. When DACS inspectors perform maturity tests at the beginning of the early harvest, they bring most of the things they need for testing. The licensee provides the bins in which the fruit samples are carried into the testing room. The inspectors bring either a DACS slicing knife or their own. The licensee provides buckets it owns for use by the inspector during the test to collect juice extracted from fruit samples. The DACS inspectors also bring: a sizer to measure the fruit samples; a 2000 c.c. graduated cylinder to measure juice quantities; a 500 c.c. graduated cylinder to hold juice being tested for solids content and for temperature; aluminum pans to hold the graduated cylinders; a combination hydrometer for measuring juice solids content and temperature; a 25 m.1. pipet for transferring a measured amount of juice into a flask; the flask; a bottle of phenothaline with eyedropper top used for adding measured amounts of phenothaline to the flask of measured juice; a bottle of alkaline solution; and a burette for adding a measured amount of the alkaline solution to the flask of measured juice. During the harvest season, DACS leaves its equipment, instruments and solutions referred to in the preceding paragraph in the testing room. They are kept separate from the licensee's property and are not supposed to be used by the licensee. However, DACS allows the licensee to use its own bins and buckets and the extractor to conduct its own tests in the testing room when DACS inspectors are not using it. 1/ Some DACS inspectors request or allow licensees to assist during testing or to handle the fruit samples. 2/ Some allow licensees to attempt to influence the inspector's judgment by questioning the validity of the test or the accuracy of the inspector's observations or by comparing the inspector's results with the results of its own tests. Sometimes, this results in correction of an error the inspector otherwise would have made. It was not proved, however that there is an agency policy of requesting or allowing licensees to conduct themselves in those ways during testing. DACS has a policy to allow only one licensee representative in the testing room with the DACS inspector during testing. Violation of this policy is viewed as a violation of Section 601.33, Florida Statutes (1983). However, not all DACS inspectors strictly enforce this policy. Some allow more than one licensee representative in the testing room.
The Issue Does Respondent, William. G. Roe & Sons, Inc. (Roe & Sons) owe Five Star Packing (Five Star) monies as alleged in the Complaint for citrus contracted for under various written contracts entered into by the parties? Case No. 01-2496A Does Respondent Five Star owe Roe & Sons monies as alleged in the Complaint for damages sustained by Roe & Sons as a result of the breach of alleged oral contracts between the parties by Five Star?
Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the hearing, the following relevant findings of fact are made: At all times pertinent to this proceeding, Five Star was a citrus fruit dealer as that term is defined in Subsection 601.03(8), Florida Statutes, and was licensed and bonded in accordance with Chapter 601, Florida Statutes. At all times pertinent to this proceeding, Roe & Sons was a citrus fruit dealer as that term is defined in Subsection 601.03(8), Florida Statutes, and was licensed and bonded in accordance with Chapter 601, Florida Statutes. At all times pertinent to this proceeding, both Five Star and Roe & Sons were subject to the provisions of Chapter 601, Florida Statutes. Five Star bought, sold, and delivered citrus fruit to various citrus processing facilities and packing houses in Central Florida during the 1999-2000 citrus fruit season. During the 1999-2000 citrus fruit season, Roe & Sons operated a packing house in Winter Haven, Florida, and regularly purchased citrus fruit for the fresh fruit market, and sold citrus fruit that it had purchased to other citrus fruit dealers such as Five Star. The Complaint in Case No. 01-2495A was filed with the Department by Five Star on September 12, 2000, and was timely filed in accordance with Subsection 601.66(1), Florida Statutes. On January 5, 2001, before the Department referred this matter to the Division, Five Star filed its First Amended Complaint with the Department. The Complaint in Case No. 01-2496A was filed with the Department by Roe & Sons on November 10, 2000, and was timely filed in accordance with Subsection 601.66(1), Florida Statutes. On December 6, 1999, Roe & Sons and Five Star entered into a Participation Marketing Agreement, Contract No. B233Q, for tangerines wherein Roe & Sons was to purchase Sunburst Tangerines from Five Star. Roe & Sons purchased 2,124 boxes of Sunburst Tangerines from Five Star for which Roe & Sons paid Five Star $23,534.84. There is no disagreement as to these tangerines. However, Five Star contends that the tangerines supported by Trip Ticket Nos. 225488, 225489, 225490, 225491, and 225492 were delivered to Roe & Sons but that Five Star did not receive payment. Roe & Sons has no Trip Ticket receipts or any other record indicating that these tangerines were delivered to Roe & Sons. However, Larry Thompson of Five Star testified that Trip Ticket Nos. 225488, 225489, and 225490 were filled out by the harvester and that he was present when the tangerines represented by those Trip Tickets were delivered to Roe & Sons. Thompson also testified that he filled out Trip Ticket Nos. 225491 and 225492 and was present when the tangerines represented by those Trip Tickets were delivered to Roe & Sons. The Trip Tickets indicate that the tangerines were being delivered to Roe & Sons under Contract No. B233Q. Copies of the Trip Tickets along with the testimony of Larry Thompson, which is credible, is sufficient to show that the tangerines represented by Trip Tickets Nos. 225488, 225489, 225490, 225491, and 225492 were delivered to Roe & Sons, notwithstanding that Roe & Sons has no records of these tangerines being delivered to Roe & Sons by Five Star. Therefore, Roe & Sons owes Five Star $8,645.67 for the tangerines represented by Trip Ticket Nos. 225488, 225489, 225490, 225491, and 225492. However, Five Star stipulated that it owed Roe & Sons $2,667.60 for 684 boxes of tangerines delivered to Five Star by Roe & Sons on January 13, 2000. The adjusted amount owed Five Star by Roe & Sons for tangerines is $5,978.07. On February 11, 2000, Roe & Sons and Five Star entered into a Fresh Cash Purchase Agreement, Contract No. B333S, wherein Roe & Sons agreed to purchase an estimated 25,000 boxes of Marsh white grapefruit from Five Star for an agreed price of $1.35 Per Pound Solids (PPS) Gross. Contract No. B333S contained the following Special Clauses: "FRUIT MUST BE A MINIMUM 10.00 BRIX AND 9.00 RATIO. PRICE FOR FRUIT NOT MEETING THIS MINIMUM SCORE WILL BE NEGOTIATED AS THE LOADS ARE RECEIVED." The "Movement Date" under Contract No. B333S was to be "SEASONAL," which the parties stipulated meant that there was no specified date for delivery, only that the grapefruit was to be delivered during the 1999/2000 season. Contract No. B333S also contained the following clause: "Fruit not meeting contract ratio or brix requirements but otherwise suitable to BUYER will be discounted by .10 per unit measure P/S or returned to SELLER at BUYER's sole discretion." On March 31, 2000, Roe & Sons entered into a second Agreement, Contract No. B376B, wherein Roe & Sons agreed to purchase an estimated 7,000 boxes of Marsh white grapefruit from Five Star for an agreed price of $1.50 PPS Gross. Contract No. B376B contained the following special clause: "Must be 10 Brix and 9 Ratio minimum or $0.15 PPS Penalty." Although Contract No. B376B contained no Movement Date, the parties agreed that the grapefruit was to be delivered during the 1999/2000 season. Morgan Roe testified that when Roe & Sons entered into multiple contracts with the same party to furnish citrus fruit during same season, Roe & Sons had an unwritten internal policy, which required the other party to the multiple contracts with Roe & Sons to fulfill the requirements of the first contract before Roe & Sons would accept citrus fruit under any subsequent contract. Roe & Sons did not make Five Star aware of this unwritten internal policy at the time that either the first or second contract was executed by Five Star. Likewise, neither the first nor the second contract contained any language which would require Five Star to fulfill the first contract before Roe & Sons would be required to accept grapefruit under the second contract. Between March 28, 2000 and May 9, 2000, Five Star delivered 7,649 boxes of white grapefruit to Roe & Sons. Five Star contends that Roe & Sons owes Five Star $43,614.77 after adjustments for unloading charges and research and advertising taxes for the grapefruit delivered. Roe & Sons contends that it owes Five Star $40,106.96 after adjustments for unloading charges and research and advertising taxes for the grapefruit Five Star delivered. Five Star contends that the majority of the grapefruit was delivered under Contract No. B376B and that Five Star should have been paid $1.50 PPS for the grapefruit delivered under Contract No. B376B. However, only Trip Ticket Nos. 48433, 48434, 77569, 77570, 77571, 77572, and 77573 were specifically marked as being delivered under Contract No. B376B, which Five Star contends it should have been paid $1.50 per pound solids since this grapefruit met all the specifications of the contract. However, Roe & Sons contends that since Five Star's commitment under Contract No. B333S had not been totally fulfilled, Roe & Sons was only required to pay Five Star $1.35 per pound solids for all of the grapefruit delivered between March 28, 2000 and May 9, 2000, notwithstanding that some of the Trip Tickets indicated that the grapefruit was being delivered under Contract B376B. Roe & Sons' contention was based on its internal policy that the first contract, Contract No. B333S, had to be fulfilled before Roe & Sons was required to honor the second contract, Contract No. B376B. There is insufficient evidence to support Roe & Sons' contention that its internal policy is an industry standard, notwithstanding the testimony of W. A. Alford to the contrary, which lacks credibility. Roe & Sons has failed to show that Five Star was required to fulfill Contract No. B333S before Roe & Sons was required to accept fruit under Contract No. B376B. Roe & Sons should have allowed Five Star $1.50 PPS for the grapefruit delivered under Contract No. B376B. Five Star conceded that none of the other Trip Tickets indicated that the grapefruit was being delivered under Contract No. B376B. Therefore, Roe & Sons' Net Return amount should be adjusted upwards to account for the difference ($0.15) in the price PPS for the above listed Trip Tickets. After adjustment (13,497.78 PS x $0.15 PPS = $2,024.67), Roe & Sons owes Five Star the sum of $42,131.63 ($40,106.96 + $2,024.67) for the grapefruit delivered under Contract Nos. B333S and B376B. Other than the adjustment for the difference in PPS, Roe & Sons Net Return amount is correct. Five Star's Net Return amount incorrectly takes credit for grapefruit at $1.50 PPS that was not delivered under Contract B376B and fails to take credit for grapefruit delivered to Roe & Sons on May 9, 2000, under Trip Ticket Nos. 4134 and 212720. Five Star contends that Roe & Sons' cull adjustment was excessive and that Roe & Sons owed Five Star $1,688.52 for excessive cull adjustment. Five Star's contracts with Roe & Sons provides that Roe & Sons has the right to reject unsuitable fruit. Although Five Star presented testimony as to what might constitute "excessive cull adjustment," it failed to present sufficient evidence to show that the "culled fruit" was suitable and that Roe & Sons' "cull adjustment" was excessive. Therefore, Five Star is not entitled to any adjustment for cull adjustment. Roe & Sons contends that sometime around April 11, 2000, Larry Thompson for Five Star and William Roe for Roe & Sons entered into an oral contract wherein Five Star was to purchase 30,000 boxes of field run ruby red grapefruit with a 9.00 ratio at a price of $1.20 PPS. Roe & Sons reduced these terms to writing and designated it as Contract S2057. Roe & Sons also contends that sometime around April 14, 2000, Larry Thompson for Five Star and William Roe for Roe & Sons entered into an oral contract wherein Five Star was to purchase 15,000 boxes of elimination red grapefruit at a price of $1.10 PPS. Roe & Sons reduced these terms to writing and designated it as Contract S2060. Larry Thompson testified that he refused to agree to, or to sign, either of these alleged contracts on the basis that he did not agree to handle any specific quantity (number of boxes) of red grapefruit for Roe & Sons. Larry Thompson testified that he agreed to handle some (no specific quantity) of red grapefruit for Roe & Sons at the price and specifications stated. Based on Larry Thompson's testimony, which is credible, there was never any valid contract, oral or otherwise, wherein Five Star agreed to purchase a specific quantity (boxes) of red grapefruit from Roe & Sons, notwithstanding William Roe's testimony to the contrary, which lacks credibility in this regard, or the fact that Five Star did purchase a number of boxes of red grapefruit from Roe & Sons, for which Five Star agrees that it owes Roe & Sons. Between April 12, 2000 and April 20, 2000, Five Star purchased some 2,760 boxes of red grapefruit at a price of $1.10 PPS, represented by ticket nos. 71146, 71149, 64019, 64024, and 64585. The total PPS of the boxes was 13,094.44 for a gross price of $14,403.88 (13,094.44 PS x $1.10 PPS = $14,403.88). After adjusting the gross price for hauling and unloading charges and advertising tax, the total amount owed Roe & Sons by Five Star was $10,972.86. Between April 12, 2000 and April 20, 2000, Five Star purchased some 4,355 boxes of red grapefruit at a price of $1.20 PPS, represented by ticket nos. 214720, 214721, 71147, 71148, 71150, 214722, 214723, 214724, and 214725. The total PPS of the boxes was 21,387.92 for a gross price of $25,665.50 (21,387.92 PS x $1.20 PPS = $25,665.50). After adjusting the gross price for hauling and unloading charges and research and advertising tax, the total amount owed Roe & Sons by Five Star was $21,621.11. Five Star alleged that it owed Roe & Sons the sum of $32,593.97. However, Five Star stipulated that Roe & Sons should be given credit for $4,336.37 in hauling charges paid by Roe & Sons, which brings the total owed to Roe & Sons for red grapefruit by Five Star to $36,930.34. Subsequent to the purchase of the above red grapefruit by Five Star from Roe & Sons, Five Star advised Roe & Sons that Five Star would not be purchasing any more red grapefruit from Roe & Sons. As a result of this decision by Five Star, Roe & Sons advised Five Star that Five Star could continue to deliver white grapefruit under Contract Nos. B333S and B376B, but that any monies due Five Star for grapefruit delivered on theses contracts would be applied against any damages suffered by Roe & Sons for Five Star's failure to honor the alleged oral contracts to purchase red grapefruit from Roe & Sons. As a result of Roe & Sons' position concerning the alleged oral contracts, Five Star made no further deliveries of white grapefruit to Roe & Sons under Contract Nos. B333S and B376B. Instead, Five Star sold the white grapefruit that was to be delivered to Roe & Sons under Contract Nos. B333S and B376B to Silver Springs Citrus at a much reduced rate PPS due to the decline in the grapefruit market in what Five Star described as an attempt to mitigate damages under Contract Nos. B333S and B376B. Five Star alleged that Roe & Sons owed Five Star $4,822.31 for 840 boxes of temple oranges purchased by Roe & Sons. However, Five Star stipulated that Roe & Sons was entitled to a credit of $355.58 due to an accounting error by Five Star. The adjusted amount owed to Five Star for temple oranges by Roe & Sons is $4,466,73. Roe & Sons alleged in its First Affirmative Defense to Five Star's Complaint that the parties had reached a settlement of their respective claims. However, based on the testimony of Larry Thompson denying that a settlement had been reached, which is credible in this regard, and the fact that the check for the amount of the alleged settlement was never received or negotiated by Five Star, supports Five Star's position that the parties had not reached a settlement. In its Second Affirmative Defense, Roe & Sons alleged that Five Star breached Contract No. B333S by failing to deliver white grapefruit in accordance with the specifications set forth in the contract. Roe & Sons failed to present sufficient evidence to support this affirmative defense. Roe & Sons' Third Affirmative Defense, Setoff, and Counterclaim to Five Star's Complaint is based on Five Star's breach of the alleged oral red grapefruit contracts. Roe & Sons failed to present sufficient evidence to show that the alleged oral red grapefruit contracts were in fact valid contracts. Roe & Sons alleges in its Complaint filed in Case No. 01-2496A that Five Star breached the alleged oral contracts for red grapefruit. Roe & Sons failed to present sufficient evidence to show that the alleged oral red grapefruit contracts were in fact valid contracts.
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 requiring Roe & Sons to pay Five Star the sum of $15,646.09 and denying Five Star any damages in regard to Contract Nos. B333S and B376B. It is further recommended that Roe & Sons be denied any relief in regards to the alleged red grapefruit contracts. DONE AND ENTERED this 5th day of March, 2002, in Tallahassee, Leon County, Florida. WILLIAM R. CAVE Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6947 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 5th day of March, 2002. COPIES FURNISHED: Hank B. Campbell, Esquire Gray, Harris, Robinson, Lane, Trohn Post Office Box 3 Lakeland, Florida 33802 United States Fidelity & Guaranty Company 4311 West Waters Avenue, Suite 401 Tampa, Florida 33614 Brenda D. Hyatt, Bureau Chief Bureau of License and Bond Department of Agriculture and Consumer Services 541 East Tennessee Street India Building Tallahassee, Florida 32308 Richard D. Tritschler, General Counsel Department of Agriculture and Consumer Services The Capitol, Plaza Level 10 Tallahassee, Florida 32399-0810 Douglas A. Lockwood, III, Esquire Peterson & Myers, P.A. 141 5th Street, Northwest Post Office Drawer 7608 Winter Haven, Florida 33883 H. Christopher Thompkins, II, Esquire 1706 South Kings Avenue Brandon, Florida 33509-6216 Jack P. James, Esquire Post Office Box 3 Lakeland, Florida 33802 Honorable Charles H. Bronson Commissioner of Agriculture Department of Agriculture and Consumer Services The Capitol, Plaza Level 10 Tallahassee, Florida 32399-0810
The Issue The issue in this case is whether Respondent Clark's Country Farmers Market, Inc. owes Petitioner a sum of money for shipments of citrus fruit.
Findings Of Fact The evidence presented at final hearing established the facts that follow. The Parties and Their Problem Spyke's Grove and Clark's are "citrus fruit dealers" operating within the Department's regulatory jurisdiction. As a wholesale shipper, Spyke's Grove packages and arranges for delivery of citrus products pursuant to purchase orders that retail sellers such as Clark's submit. The packages typically are labeled with the retail seller's name, and thus the retail buyer (and the recipient, if the citrus is purchased as a gift) usually will not be aware of Spyke's Grove's involvement. The instant case involves a series of orders that Clark's placed with Spyke's Grove between October and December 1999 for packages of gift fruit. Under a number of informal, largely unwritten contracts, Spyke's Grove agreed, each time it received an order from Clark's, to ship a gift fruit box or basket to the donee designated by Clark's' retail customer, for which fruit shipment Clark's agreed to pay Spyke's Grove. Spyke's Grove alleges that Clark's failed to pay in full for all of the gift fruit packages that Clark's ordered and Spyke's Grove duly shipped. Clark's contends (though not precisely in these terms) that Spyke's Grove materially breached the contracts, thereby discharging Clark's from further performance thereunder. The Transactions From mid-October 1999 until around December 12, 1999, Clark's faxed or e-mailed to Spyke's Grove approximately 350 individual orders for gift fruit packages. Among other information, each order consisted of a shipping label that identified the product (e.g. the type of gift box or basket), the intended recipient, and the destination. Spyke's Grove manifested its intent to fill these orders by faxing statements of acknowledgment to Clark's, by telephoning Clark's, or both. Although the many contracts that arose from these transactions were thus documented, the writings left much unsaid. For example, the parties did not explicitly agree in writing that Spyke's Grove would deliver the subject gift baskets to the donees before Christmas, nor did they make any express oral agreements to this effect.1 Further, the parties did not specifically agree that Spyke's Grove would be obligated to deliver the gift fruit into the hands of the donees and bear the risk of loss until such tender of delivery. Rather, the contracts between Spyke's Grove and Clark's were ordinary shipment contracts that required Spyke's Grove to put the goods into the possession of carriers (such as the U.S. Postal Service or United Parcel Service) who in due course would deliver the packages to the donees. For many weeks, until early December 1999, Clark's placed orders, and Spyke's Grove filled them, under the arrangement just described. The relationship was not completely trouble-free, for the parties had some problems with duplicate orders. Most, if not all, of these difficulties stemmed from the implementation of a computerized ordering system which allowed Clark's to "export" orders directly to Spyke's Grove's electronic database. The parties recognized at the time that errors were occurring, and they attempted contemporaneously to identify and purge unintended duplicates. Pursuant to the course of dealing between these parties, Spyke's Grove filled orders that were not affirmatively identified as errors prior to the scheduled shipment date. The Fire On the night of Sunday, December 12, 1999, a devastating fire at Spyke's Grove's premises caused substantial damage, temporarily disrupting its citrus packing and shipping operations at the peak of the holiday season. Working through and around the loss, Spyke's Grove soon recovered sufficiently to reopen for business. By around noon on Tuesday, December 14, 1999, its telephone service had been restored, and activities relating to shipping resumed on Friday, December 17, 1999. The Aftermath Meantime, Clark's contends, customers had begun calling Clark's on December 10, 1999, to complain that gift fruit packages were not being received as promised. None of the customers testified at hearing, however, and therefore no competent, non-hearsay evidence establishes the contents of their alleged out-of-court statements. On December 14, 1999, following several unsuccessful attempts to communicate with Spyke's Grove shortly after the fire (about which Clark's remained unaware), Denise Clark, acting on behalf of Clark's, reached Robert Spiece, a representative of Spyke's Grove, on his cell phone. At hearing, Ms. Clark and Mr. Spiece gave conflicting accounts as to the substance of their December 14, 1999, telephone conversation. Neither disputed, however, that during this conversation Ms. Clark and Mr. Spiece agreed, at Ms. Clark's request, that all orders of Clark's not yet shipped by Spyke's Grove would be canceled, effective immediately, as a result of the fire. Although Ms. Clark claimed that Mr. Spiece further informed her that Spyke's Grove could not identify which orders had been shipped, the factfinder does not believe that Mr. Spiece made such a sweeping negative statement. Rather, as Mr. Spiece explained at hearing, Ms. Clark probably was told that information regarding the filled orders would not be available that day. Without waiting for further information from Spyke's Grove, Clark's began calling its retail customers to ascertain whether they had received packages that were supposed to have been shipped by Spyke's Grove. Employees of Clark's who had participated in this process——which took four to five days—— testified at hearing about conversations between themselves and various customers. As uncorroborated hearsay, however, the out- of-court statements attributed to these customers were not competent substantial evidence upon which a relevant finding of fact, e.g. that any particular customer or customers had not received their gift fruit, could be based. Moreover, this hearsay evidence, even if competent, would still have been too anecdotal to establish persuasively any widespread failure on the part of the carriers to deliver the packages shipped by Spyke's Grove. On December 15, 1999, Spyke's Grove prepared three draft invoices for the gift fruit packages that Clark's had ordered and which Spyke's Grove had shipped before December 12, 1999. Numbered 1999113001, 1999121101, and 1999121201, the invoices sought payment of $688.72, $2,415.48, and $298.66, respectively. On the first page of Invoice #1999121201, Barbara Spiece, the President of Spyke's Grove, wrote: Some of these were lost in the fire. "A" day left in the morning. "Springfield" was on the floor to go out that night. I realize there are many duplicates in these shipped reports. We tried to watch for them but with different order numbers it was very difficult. Just cross them out [and] you will not be charged for them. I apologize for all of the problems we have had this season [illegible] wish you luck. These bills were faxed to, and received by, Clark's on December 16, 1999. Clark's did not pay the invoices, or dispute them, or cross out the unintended duplicate orders (as it had been invited to do) to effect a reduction in the outstanding balance. Instead, Clark's ignored Spyke's Grove's requests for payment. Not only that, in disregard of its existing contractual obligations and with no advance notice to Spyke's Grove, Clark's proceeded on its own to fill all of the orders that it had placed with Spyke's Grove before December 12, 1999——including those orders that Spyke's Grove, through its draft invoices, claimed to have shipped. Even after the fact, Clark's failed to inform Spyke's Grove that it had, in effect, repudiated its contractual promises to pay Spyke's Grove for the gift fruit packages already shipped as of December 12, 1999 (i.e. the orders not canceled on December 14, 1999). The Inevitable Dispute Having heard nothing from Clark's in response to its December 16, 1999, fax, Spyke's Grove sent its invoices out again, in final form, on January 25, 2000.2 This time, Ms. Spiece did not inscribe any instructions to cross out duplicates for a discount. Numbered 11063001 ($688.72), 11063002 ($2,449.14), and 11063003 ($195.52), these bills totaled $3,333.38. Each of these invoices contained the following boilerplate "terms": Net 14 days prompt payment is expected and appreciated. A 1 ½% monthly service charge (A.P.R. 18% per annum) may be charged on all past due accounts. Customer agrees to pay all costs of collection, including attorneys [sic] fees and court costs, should collection efforts ever become necessary. Clark's did not remit payment or otherwise respond to Spyke's Grove's statements. Accordingly, on June 20, 2000, Spyke's Grove sent a letter to the Department requesting assistance. Clark's was provided a copy of this letter. Shortly thereafter, Spyke's Grove filed a Complaint with the Department, initiating the instant proceeding. Ultimate Factual Determinations Clark's refusal to pay for the goods ordered from and shipped by Spyke's Grove constituted a breach of the contracts between the parties. Spyke's Grove did not materially breach the agreements. Further, Clark's did not object, within a reasonable period of time, to the statements of account that Spyke's Grove rendered preliminarily on December 16, 1999, and finally on January 25, 2000. Accordingly, these invoices amount to an account stated concerning the transactions between the parties. Clark's failed to overcome the presumption of correctness that attaches to an account stated, either by proving fraud, mistake, or error. Spyke's Grove has suffered an injury as a result of Clark's' breach. Spyke's Grove's damages consist of the principal amount of the debt together with pre-award interest at the statutory rate. Accordingly, Spyke's Grove is entitled to recover the following amounts from Clark's: Principal Due Date Statutory Interest $3,333.38 2/08/99 $ 298.66 (2/08/00 - 12/31/00) $ 335.56 (1/01/01 - 11/30/01) $3,333.38 $ 634.22 Interest will continue to accrue on the outstanding balance of $3,333.38 in the amount of $1.00 per day from December 1, 2001, until the date of the final order.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department enter a final order awarding Spyke's Grove the sum of $3,333.38, together with pre- award interest in the amount of $634.22 (through November 30, 2001), plus additional interest from December 1, 2001, until the date of the final order, which will accrue in the amount of $1.00 per day. DONE AND ENTERED this 29th day of November, 2001, in Tallahassee, Leon County, Florida. JOHN G. VAN LANINGHAM 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 November, 2001.
Findings Of Fact On October 5, 1976, Gouda Groves agreed to buy and Sherry Groves agreed to sell an estimated ten thousand (10,000) field crates of tangelos at a price of $1.50 per field crate. The contract provided inter alia: Buyer shall not be obligated to accept fruit rendered unmarketable by freeze, hail damage, black fly or other pest infestation. Should any portion of the fruit be deemed unmarketable as above, this agreement shall be considered null and void and all monies deposited shall be refunded to Buyer immediately. Gouda Groves paid to Sherry Groves at the time of entering the contract the sum of $5,000.00 to be applied to the purchase price. The final harvesting date was contracted to be February 5, 1977. Prior to entering the final contract Sherry Groves, on September 27, 1976, made an offer to Gouda Groves for the purchase of the same tangelo crop, estimating therein the number of field boxes to be 20,000. On October 5, 1976, a counter offer was made from Gouda Groves to Sherry Groves, reciting that the estimated number of field crates was $10,000.00. In the cover letter to the counter offer, Gouda Groves asked that if the contract were acceptable that it be signed and returned. On October 13, 1976, in a cover letter Mr. Sid Kline, on behalf of Sherry Groves, acknowledged that he received the contract and that it was satisfactory to him. While the contract itself recites the date of October 5, 1976, it was apparently finalized on October 13, 1976. There was conflicting testimony as to the estimated number of field crates contained in the tangelo crop. The estimates range from 8,000 field rates to over 20,000 field crates. However, since the parties agreed to the estimate contained in the subject contract, it is concluded as a matter of fact that for the purpose of these findings, the number of field crates for which the parties contracted was 10,000. There was no evidence of an actual count of the fruit crop nor was there evidence which would render any estimate other than that of the contracting parties as the most accurate. Gouda Groves harvested 660 field boxes of tangelos and then on about December 15, 1976, advised Sherry Groves that it would harvest no further fruit. On January 3, 1977, the parties had a meeting at which time Gouda Groves declared that they would harvest no fruit because it was not marketable. On January 14, 1977, Gouda Groves formalized its refusal to harvest further fruit in a letter to Sherry Groves. Sherry Groves made an effort to sell the remaining fruit crop to other purchasers but managed to sell only 400 to 500 boxes at a loss. On January 20, 1977, there was a freeze which rendered the remaining portion of the crop virtually unmarketable. At the time of Gouda Groves' refusal to conduct further harvesting, the subject fruit had not been rendered unmarketable by virtue of freeze, hail damage, black fly or other pest infestation.
The Issue Whether Respondent, Donnie Selph, d/b/a The Citrus Store and D & D Citrus (Donnie Selph), failed to pay amounts owning to Petitioner for citrus fruit harvested from Petitioner's groves, as set forth in the Complaint dated October 13, 2003, and, if so, the amount Petitioner is entitled to recover.
Findings Of Fact Based upon observation of the witnesses and their demeanor while testifying; stipulations by the parties; documentary materials received in evidence; evidentiary rulings made pursuant to Sections 120.569 and 120.57, Florida Statutes (2003); and the entire record of this proceeding, the following relevant and material findings of fact are determined: At all times material to this proceeding Russ Putnal was a "producer of citrus fruit" and owner of Putnal Groves located at 10755 Russ Road, Myakka City, Florida. A producer of citrus is one that grows citrus in this state for market. At all times material to this proceeding, Donnie Selph was a "Florida-licensed [License Number 756] citrus fruit dealer" operating within the Department's regulatory jurisdiction. Donnie Selph admitted that he is owner of and does business under the names of The Citrus Store and D & D Citrus. On October 13, 2002, Donnie Selph entered into a written contract with Russ Putnal under which Donnie Selph agreed to harvest 10,000 boxes of mid-season oranges on or before June 1, 2003. Donnie Selph agreed to pay $4.35 per box for the mid-season oranges and agreed to pay $6.35 per box for the late-season (grove production) Valencia oranges harvested from Russ Putnal's groves. The form contract, dated January 29, 2003, entered into by Donnie Selph and Russ Putnal contained the following terms and conditions: [T]he Grower, for and in consideration of the payment this date received and to be received as herein provided, has agreed and do by these presents agree to sell to the Buyer all citrus fruits, of merchantable quality at the time of picking, from the grove or groves hereinafter mentioned. The price to be paid to the Grower by the Buyer for said fruit per standard field crate by volume or weight ["weight" was circled] at election of buyer on the trees, for all fruit of merchantable quality at the time of picking, shall be as follows: Oranges, mids, 10,000 boxes (or production), $4.35 [per] box Valencia Oranges, 40,000 boxes (or production), $6.35 [per] box The term "merchantable" as used herein shall be defined as that standard of quality required by the United States Department of Agriculture for interstate shipment in fresh/juiced ["juiced" was circled] fruit form. . . . * * * It is agreed that the advance payment hereby receipted for is to be deducted from said payment as follows: As fruit is harvested, $12,000.00, ck# 6318 * * * Note: Less all state taxes owned by Grower. Mutual YES[?] NO[ ] A bond or certificate of deposit posted with the Florida Department of Agriculture and Consumer Services does not necessarily ensure full payment of claims for any nonperformance under this contract. . . . (emphasis added) The undisputed evidence established that Donnie Selph harvested mid-season oranges from Russ Putnal's groves and paid Russ Putnal for those mid-season oranges harvested per the terms of the written contract. According to Russ Putnal, the contract was for mid-season oranges "which are basically a pineapple variety." "Mid-season juice oranges and Valencia oranges are late--late-season oranges. The mids were all paid for--the balance is on the Valencia oranges." The undisputed evidence also established that in the contract hereinabove Donnie Selph also agreed to harvest 40,000 boxes (or production) of late-season Valencia oranges and agreed to pay $6.35 per box for the Valencia oranges harvested from Russ Putnal's groves. The undisputed evidence likewise established that Donnie Selph harvested 11,251 boxes of Valencia oranges pursuant to terms of the written contract with Russ Putnal. During the harvesting of the Valencia oranges, Donnie Selph raised no objection or complaints with Russ Putnal regarding the quality or quantity of late-season Valencia oranges that were harvested. The parties recalled discussing one load that was "light," meaning the average weight per box was less than the average weight per box of the other loads of Valencia oranges picked from the same grove. According to the evidence presented, it is not uncommon in the citrus business to have a few "light" loads when picking 11,251 boxes of fruit. Donnie Selph is obligated to pay Russ Putnal for the 11,251 boxes of Valencia oranges harvested from Russ Putnal's groves and sold for processing. The net payment due and owning Russ Putnal Groves is computed as follows: Total Purchase Price [Valencia oranges]: $71,443.85 Less Harvesting, Mutual, Taxes, etc.: $2,373.57 Less Amount Received [on September 30, 2003]: $5,000.00[2] Net Amount or Claim [Balance Due]: $64,070.28 Donnie Selph did not pay Russ Putnal for the 11,251 boxes of Valencia oranges harvested from Russ Putnal's groves. Russ Putnal made repeated demands upon Donnie Selph for the past due amount of $64,070.28, and Donnie Selph refused and failed to pay Russ Putnal the past due amount of $64,070.28. This debt of $64,070.28 was due and owing on October 1, 2003, the date Donnie Selph made his last payment of $5,000 to Russ Putnal. Regarding this contractual transaction, Russ Putnal testified: I regret that we all have to be here for this, and I've put it off as long as I could and tried every way I knew to avoid coming to this, but basically -- or in simple terms Donnie Selph, Donnie Selph Fruit Company and I had a contract, a written contract for mid-season and late-season oranges for last year (2002/2003). Basically, it hadn't been paid and it's my understanding the bond is for situations of this nature. And I realize the bond is less than half of what's owed, but I think if Donnie had the money he'd pay me. We're all in -- the citrus industry is in some serious throws so I'm just trying to get what I can to try and keep my bills paid. Donnie Selph admitted entering into a written contract with Russ Putnal. Both men acknowledged their experience in the business of selling and buying citrus fruit and doing business with each other over the years. Russ Putnal is a seasoned producer of fruit and well versed in the business of selling his fruit to citrus dealers. Donnie Selph is a seasoned purchaser and dealer of citrus fruit, having been in the business for over 20 years, and well versed in the business of buying fruit from citrus fruit producers and selling fruit to plants and other outlets. Donnie Selph set the stage of this transaction by first testifying that he is in the business of "buying and selling [fruit], by contract, to the concentration plants." Regarding the sale of Russ Putnal's Valencia oranges, he testified that "based on $1.10 a pound what I got out of [the sale of] Putnal's fruit and taking out the costs I forwarded [to Russ Putnal] what was left up to the point of where we're at now [i.e. $64,070.28]." Donnie Selph's refusal to pay Russ Putnal for the Valencia oranges, "because I received only $1.10 per pound," does not relieve him of his contractual obligations to pay $6.35 per box for the Valencia oranges harvested. At the conclusion of the hearing and in lieu of submitting a proposed recommended order, Russ Putnal elected to make the following summation of his case that has been considered: We have a simple contract and a simple problem where fruit was contracted for, harvested, marketed and not paid for by the specifics of the contract. We have a bond in place to cover these discrepancies. The bond is only $30,000; the amount owed is some $64,000 plus. The defense has pretty much put up a smokescreen off the subject of the contract. The focusing in on pound solids and there's nothing in the contract about pound solids. The contract is simply in weight boxes. Donnie Selph's first defense, to the debt claimed in the Complaint, was oral modification of the written contract. Donnie Selph's evidence to support his oral modification defense consisted solely of his recollection, "Mr. Putnal agreed with me that the contract price to be paid would be based on pound solid [unknown at the time of entering the contract]." Donnie Selph testified that he and Russ Putnal discussed, and agreed, that the encircled word "juiced" on the written contract meant that he would pay Russ Putnal at the price Donnie Selph received when he sold the Valencia oranges "as juiced." Russ Putnal emphatically denied making the alleged oral modification of the written contract of $6.35 per box for his Valencia oranges. Russ Putnal insisted that throughout this entire episode with Donnie Selph the written contract called for "weight boxes." In his post-hearing Memorandum of Law, Donnie Selph admitted entering into a written contract with Russ Putnal, but raised as a defense to payment of the debt Russ Putnal "is going against the bond of The Citrus Store." Donnie Selph argued that Russ Putnal offered no evidence of entering into a written contract with The Citrus Store or personally with Donnie Selph. Donnie Selph's argument is without a foundation in fact and law in this proceeding and is, therefore, rejected. Donnie Selph's second defense, a claim of "detrimental reliance on fraudulent statements made by Russ Putnal," is without foundation in fact. Russ Putnal adamantly denied making a verbal agreement with Donnie Selph that he would accept as payment for his Valencia oranges some amount Donnie Selph may receive when, and if, he sold the Valencia oranges to processing plants as "juiced" rather than by "pound per box." This defense to the contractual debt obligation is without foundation in fact or law in this proceeding and is likewise rejected. The documentary evidence presented by Russ Putnal in support of his demand for payment is uncontroverted. The majority of the documents submitted by Russ Putnal reflected that the fruit described therein was harvested from Russ Putnal's groves in Manatee County. Likewise, the documents from the processing plants reflected that the fruit from Russ Putnal's Manatee County groves averaged a "pound solids per box weight of 6.03676 pound[s] per box." The undisputed evidence established that Donnie Selph picked 11,251 boxes of Valencia oranges from Russ Putnal's grove. The agreed contract price for each box of Valencia oranges picked was $6.35 per box. Likewise, the undisputed evidence established Donnie Selph entered into a written contract with Russ Putnal to purchase a specific citrus fruit (Valencia oranges) at a specific price ($6.35) per box. The evidence established that Donnie Selph picked Russ Putnal's Valencia oranges, sold those Valencia oranges, and failed and refused to pay Russ Putnal the agreed contracted price of $6.35 per box for his Valencia oranges. The evidence of record demonstrated clearly that Donnie Selph is indebted to Russ Putnal for the net sum of $64,070.28 due and owing as of October 1, 2003. This outstanding debt is computed from the gross sum of $71,443.85, less: harvesting, mutual, and taxes for a subtotal of $2,373.57, and less $5,000.00 money paid and received from Donnie Selph. The uncontroverted evidence establishes that Donnie Selph was, at the times material to this proceeding, a Florida- licensed and bonded citrus fruit dealer and that, as of October 1, 2003, Donnie Selph harvested 11,521 boxes of Valencia oranges from Putnal Groves. Russ Putnal timely filed a complaint alleging that Donnie Selph failed to promptly pay its indebtedness to Russ Putnal for the Valencia oranges harvested pursuant the contract. Russ Putnal is, therefore, entitled to payment of the principal amount of $64,070.28 plus pre-judgment interest. Based on the date of the last payment made by Donnie Selph to Russ Putnal, pre-hearing interest would run from October 1, 2003.
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 ordering Respondent, Donnie Selph, d/b/a The Citrus Store and d/b/a D & D Citrus, to pay to Petitioner, Russ Putnal, d/b/a Putnal Groves, the sum of $64,070.28, together with pre-judgment interest calculated by the Department pursuant to Section 55.03, Florida Statutes, from October 1, 2003, until paid. DONE AND ENTERED this 3rd day of June, 2004, in Tallahassee, Leon County, Florida. S FRED L. BUCKINE Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 3rd day of June, 2004.
The Issue Whether Respondent, The Citrus Store, a citrus fruit dealer, owes Petitioner, Hutchinson Groves, Inc., a grower of Florida citrus products, a sum of money for citrus fruit harvested from Petitioner's groves. SUMMARY DISPOSITION On or about December 16, 2003, Petitioner, Hutchinson Groves, Inc., filed a complaint with the Florida Department of Agriculture and Consumer Services (the "Department"), alleging that Respondent, The Citrus Store, owes Petitioner the sum of $27,117.59, for oranges harvested from Petitioner's groves by Respondent pursuant to a written contract. Respondent conceded that it owed some lesser amount to the owner of the groves in question. However, the matter was complicated by the fact that, subsequent to the execution of the contract with Respondent, Petitioner had sold those groves to a third party who also asserted a claim to the proceeds from the sale of the fruit to Respondent. The matter was the subject of litigation in the Circuit Court of the Tenth Judicial Circuit, in and for Highlands County (Case No. GC-02-587), which caused the Department to delay forwarding the matter to the Division of Administrative Hearings until December 2, 2005. The case was assigned to the undersigned and set for hearing on February 2, 2006. The hearing was convened as scheduled. Prior to the taking of testimony, the parties discussed settlement of the matter. At the conclusion of their discussions, the parties stipulated: that the Division of Administrative Hearings has jurisdiction over this matter and the parties thereto pursuant to Section 120.569 and Subsection 120.57(1), Florida Statutes (2005); that, at all times relevant to this proceeding, Petitioner was a "producer" pursuant to Subsection 601.03(29), Florida Statutes; that, at all times relevant to this proceeding, The Citrus Store was a "citrus fruit dealer" pursuant to Subsection 601.03(8), Florida Statutes; that Respondent owes Petitioner $27,117.59 for the oranges harvested from Petitioner's groves; and that no interest would be sought or assessed against Respondent on the principal amount owing to Petitioner. Based on the foregoing stipulations, it is RECOMMENDED that a final order be entered requiring Respondent, The Citrus Store, to pay to Petitioner, Hutchinson Groves, Inc., the principal sum of $27,117.59, without interest. DONE AND ENTERED this 8th day of February, 2006, in Tallahassee, Leon County, Florida. S LAWRENCE P. STEVENSON Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 8th day of February, 2006. COPIES FURNISHED: Kathy Alves Fidelity & Deposit Company of Maryland Post Office Box 87 Baltimore, Maryland 21203 William Hutchinson Hutchinson Groves, Inc. 1323 Edgewater Point Drive Sebring, Florida 33870 Clifford R. Rhoades, Esquire Clifford R. Rhoades, P.A. 227 North Ridgewood Drive Sebring, Florida 33870 Anthony W. Surber, Esquire Harbsmeier, DeZayas, Harden & DeBari, L.L.P. 5116 South Lakeland Drive Lakeland, Florida 33813 Chris Green, Chief Bureau of License and Bond Division of Marketing 407 South Calhoun Street, Mail Station 38 Tallahassee, Florida 32399-0800 Richard D. Tritschler, General Counsel Office of the General Counsel 407 South Calhoun Street, Suite 520 Tallahassee, Florida 32399-0800
The Issue The issue for determination is whether Department of Citrus Rules 20-1.009 and 20-1.010, Florida Administrative Code, are invalid exercises of delegated legislative authority, as alleged by Petitioners.
Findings Of Fact John Stephens, Inc., Petitioner, was at all times material hereto a Florida corporation duly licensed as a citrus fruit dealer in the State of Florida. J. A. Stephens, Inc., was a Florida corporation, and held a valid fruit dealer’s license in the State of Florida. At all times material to this proceeding, Petitioner, John A. Stephens, served as an officer and director of J. A. Stephens, Inc. John A. Stephens is not an officer, director or shareholder of John Stephens, Inc. John A. Stephens, Jr. is the president and sole director of John Stephens, Inc. and is not an officer, director nor shareholder of J. A. Stephens, Inc. On or about September 26, 1996, Petitioners, John Stephens, Inc., and John A. Stephens, applied to the Florida Department of Agriculture and Consumer Services to register John A. Stephens as an agent of John Stephens, Inc., pursuant to Section 601.601, Florida Statutes. The application form furnished by the Department of Agriculture and Consumer Services indicates that the licensed dealer seeking registration of an agent agrees to “... accept full responsibility for all his activities....” (Petitioners’ Exhibit 1) By letter dated December 26, 1996, Petitioners were advised by the Department of Agriculture and Consumer Services that their application for registration of John A. Stephens as an agent of John Stephens, Inc., had been denied on the basis of Rule 20-1.010, Florida Administrative Code. As indicated in the notice, that rule provides, in part, that an application for registration of a dealer’s agent can be disapproved if a proposed registrant has a “...record, either as an individual, co- partnership, corporation, association or other business unit, showing unsatisfied debts or orders issued by the Commissioner of Agriculture with respect to prior dealings in citrus fruit.” (Petitioners’ Exhibit 1.) Specifically, the Department of Agriculture and Consumer Services advised Petitioners that “...Mr. Stephens has not satisfied orders issued by the Commissioner of Agriculture with respect to prior dealings in citrus fruit...,” listing as the final orders in question Petitioners’ Exhibits 3 through 14. Between April 30, 1991, and September 30, 1992, the State of Florida, Department of Agriculture and Consumer Services entered a total of 12 final administrative orders in which it found that J. A. Stephens, Inc., was indebted to claimants for various sums arising from prior dealings in citrus fruit. (Petitioners’ Exhibits 3 through 14.) At the time of the action of the Department of Agriculture and Consumer Services denying Petitioners’ application, there remained amounts due and unpaid on each of the orders entered by the Department against J. A. Stephens, Inc. Petitioner, John A. Stephens was not named as a party respondent in any of the 12 proceedings culminating in final orders against J. A. Stephens, Inc., which formed the basis for the denial by the Department of the application for registration as a citrus dealer’s agent. (Petitioners’ Exhibits 2, and 3 through 14.) In denying a Motion for Relief for Final Order in the only Department of Agriculture and Consumer Services proceeding in which a claimant sought to join Mr. Stephens individually as a party, the Department found that: The complaint filed by Claimant named J. A. Stephens, Inc. as the respondent. Because the complaint was against J. A. Stephens, Inc., it was served on J. A. Stephens, Inc. J. A. Stephens, an individual, was never subjected to the jurisdiction of the Agency with regard to this matter. J. A. Stephens, an individual, was not afforded an opportunity to defend against the allegations of the complaint. There was no discussion at the hearing about whether J. A. Stephens, Inc. was or was not the proper respondent. There was no allegation at the hearing that J. A. Stephens, an individual, was the proper respondent. The Claimant has failed to express any legal basis for grant of his motion and this Agency could find no such basis. This Agency has no personal jurisdiction over J. A. Stephens, an individual, with regard to this matter and therefore cannot enter an order with respect to him. Further, even if such an order were to be entered, it would be of no force or effect because of the lack of personal jurisdiction. (Petitioners’ Exhibit 4, pg. 2.) The rules that are the subject of this proceeding had their inception in 1964, when the Florida Citrus Commission considered and adopted rules governing the registration of agents acting on behalf of licensed citrus dealers. These rules, which appear in the text of the minutes of the Commission as Regulation 105-1.05, are almost verbatim the same rules now found in Chapter 20-1, Florida Administrative Code. (Respondent’s Exhibits 1 and 2.) As reflected in the minutes of the Florida Citrus Commission, the rules were adopted to help protect the grower and shipper or processor in matters involving the normal movement of citrus fruit in all channels of distribution. The regulation was recommended by the Fresh Citrus Shippers Association and was endorsed by a resolution of the Florida Sheriffs Association. In presenting the Sheriffs’ resolution to the Commission, Sheriff Leslie Bessenger of the Florida Citrus Mutual Fruit Protection Division cited the results of a seven-month investigation that found 71 out of 200 registered agents with criminal records. Those two hundred agents represented only nine dealers. (Respondent’s exhibit 1, June 19, 1964, meeting.) Minutes of Commission meetings after rule adoption thoroughly explain the efforts to require accountability and curb abuse of the dealer- agent relationship. The rules, as they appear today in the Florida Administrative Code, have not been revised since July 1, 1975.
The Issue Whether Sunny Fresh Citrus Export and Sales, Co., LLC, is liable to Petitioner in the amount of $44,032.00 for delivery of fruit which remains unpaid.
Findings Of Fact Petitioner, DP Partners, Ltd. (Partners), is a Florida Limited Partnership located in Lake Placid, Florida, engaged in the business of citrus production. Daniel H. Phypers and Danielle Phypers Daum, brother and sister, and their father Drew Phypers, are limited partners in the business. Respondent, Sunny Fresh Citrus Export and Sales Co., LLC, (the LLC) is a Florida Limited Liability Company headquartered in Vero Beach, Florida, engaged in the business of exporting citrus for retail sale. The LLC was organized and registered with the State of Florida Division of Corporations on November 3, 2011. The members of the LLC are Kelly Marinaro and Jean Marinaro, husband and wife. Kelly Marinaro (Marinaro) formerly conducted business in the name of Sunny Fresh Citrus Export and Sales Co. (the DBA), a fictitious-name entity registered with the Florida Department of State, Division of Corporations, on October 23, 2007. The fictitious-name entity registration expired on December 31, 2012. Marinaro suffered a massive heart attack in November 2011 and was incapacitated. He did not return to work until the Spring of 2013. On November 4, 2011, after suffering the heart attack, and one day after organizing and registering the LLC, Marinaro conveyed durable power of attorney to Joseph Paladin (Paladin) as his Agent. Among the authority granted to Paladin, was the following: 2. To enter into binding contracts on my behalf and to sign, endorse and execute any written agreement and document necessary to enter into such contract and/or agreement, including but not limited to . . . contracts, covenants . . . and other debts and obligations and such other instruments in writing of whatever kind and nature as may be. * * * 9. To open, maintain and/or close bank accounts, including, but not limited to, checking accounts . . . to conduct business with any banking or financial institution with respect to any of my accounts, including, but not limited to, making deposits and withdrawals, negotiating or endorsing any checks . . . payable to me by any person, firm, corporation or political entity[.] * * * 12. To maintain and operate any business that I currently own or have an interest in or may own or have an interest in, in the future. In Marinaro’s absence, Paladin conducted the usual affairs of the business, including entering into contracts to purchase citrus from several growers. On October 19, 2012, Paladin entered into contract number 2033 with Partners to purchase approximately 6000 boxes of Murcots (a tangerine variety) at $12.00 per box.2/ The contract is signed by Paladin as the Agent of “Sunny Fresh Citrus Export & Sales Company, Licensed Citrus Fruit Dealer (Buyer).” On December 13, 2012, Sunny Fresh entered into contract number 2051 with Partners to purchase Hamlins (a different fruit variety) at $6.50 per box.3/ The contract price was for citrus “on the tree,” meaning it was the buyer’s responsibility to harvest the citrus. The contract is signed by Paladin as the Agent of “Sunny Fresh Citrus Export & Sales Company, Licensed Citrus Fruit Dealer (Buyer).” (Contract 2033 and 2051 are hereinafter referred to collectively as “the contracts”.) The contracts were prepared on pre-printed forms used by Marinaro’s businesses pre-dating Paladin’s involvement. The contract form is titled as follows: Citrus Purchase Contract & Agreement Sunny Fresh Citrus Export & Sales Company Cash Fruit Crop Buyer 2101 15th Avenue Vero Beach, Florida 32960 Paladin testified that he was not aware of more than one company for Marinaro’s fruit-dealing business. He testified that he was not aware of any difference between Sunny Fresh Citrus Export and Sales Company and Sunny Fresh Citrus Export and Sales Co., LLC. Paladin was not aware of when the LLC was created. Paladin’s testimony is accepted as credible and reliable. Paladin testified that his intent was to enter into the contracts for the benefit of “Sunny Fresh.” “Sunny Fresh,” written in twelve-point bold red letters over an image of the sun in yellow outlined in red, is a trademark registered with the Florida Division of Corporations. Marinaro first registered the trademark in February 1998. In his trademark application, Marinaro entered the applicant’s name as “Kelly Marinaro D/B/A Sunny Fresh Citrus.” Marinaro renewed the trademark registration in 2007. Marinaro testified that the “Sunny Fresh” trademark is “owned by the LLC.” On February 20, 2012, Paladin, Marinaro and a third partner, Gary Parris, formed another company, Sunny Fresh Packing, LLC, the purpose of which was to run a fruit-packing house in Okeechobee, Florida. Equipment for the packing house was obtained from a packing house in Ft. Pierce, Florida, which was indebted to Marinaro, in some capacity, and went “belly up.” In March 2013, the Okeechobee packing house was struck by lightning. Shortly after the lightning strike, Marinaro, Paladin, and Mr. Parris, signed a letter addressed “To our valued Growers.” The letter explained that, due to both the lightning strike, which shorted out all computers and electrical components at the packing house, and reduced demand for product due to severe weather in the northeastern United States, they had made a “business decision to end the year now and prepare for next year.” The letter further explained that, “rather than spending thousands of dollars all at once, we feel, it makes better sense to use our cash flow to pay our growers first . . . . We will be sending out checks every week or every other week until everyone is paid or until we receive supplemental cash infusions that we are working on. In that case we would just pay everyone in full, from that.” The letter was prepared on letterhead bearing the “Sunny Fresh” trademark logo. Paladin made a number of payments to Partners on the contracts during 2012 and 2013. Each check shows payor name as “Sunny Fresh” with an address of 2101 15th Avenue, Vero Beach, Florida 32960. Mr. Phypers met with Paladin a number of times to collect checks and understood that Paladin was making concerted efforts to pay all the growers. However, Partners did not receive full payment on the contracts. Paladin drafted a Release of Invoices Agreement (Agreement) by which creditor growers could receive partial payment on their outstanding contracts in exchange for a full release of liability from the buyer. The Agreement lists the following entities and persons as being released from liability: “Sunny Fresh Packing, LLC”; “Sunny Fresh Citrus Export and Sales Co., LLC”; and Kelly Marinaro. Paladin presented the Agreement to Partners with an offer to pay $36,449.45 in consideration for signing the Agreement. Partners did not sign the Agreement. The parties stipulated that the amount owed Partners under both contracts is $44,032.00. Respondent contends that Petitioner’s claim is filed against the wrong business entity. Respondent argues that Petitioner’s contracts were with the DBA, and that Petitioner’s claim is incorrectly brought against the LLC. Thus, Respondent reasons, the LLC is not liable to Petitioner for the monies owed. The DBA was registered with the State of Florida in 2007 and held an active fruit dealer’s license through July 31, 2012. Marinaro owned and operated the DBA at 2101 15th Avenue, Vero Beach, Florida 32960. The DBA filed a citrus fruit dealer’s bond with the Department of Agriculture for the 2008-2009 shipping season. Marinaro registered the trademark “Sunny Fresh” logo in the name of the DBA in 2007, and was still using the logo on his business letterhead in 2013. Marinaro formed the LLC in 2011, which holds an active citrus fruit dealer’s license. Marinaro and his wife, Jean, are the only members of the LLC. The principal address is 2101 15th Avenue, Vero Beach, Florida 32960. The LLC filed citrus fruit dealer’s bonds with the Department of Agriculture on June 28, 2012, for the shipping season ending July 31, 2013, and on May 2, 2013, for the shipping season ending July 31, 2014. Marinaro did not refile a bond for the DBA after forming the LLC. At all times relevant hereto, Marinaro’s fruit dealer’s business has been physically located at 2101 15th Avenue, Vero Beach, Florida 32960. The building at that address bears the name “Sunny Fresh.” Marinaro testified that he formed the LLC shortly after his heart attack to “protect his personal assets.” Marinaro explained that he had little revenue in the LLC “for the next two years,” and he planned for the LLC to conduct sales for the packing company. He expected the LLC would be purchasing fruit from other packing houses. In fact, he testified that, during his absence, he was not aware that either the DBA or the LLC were purchasing fruit. Marinaro was clearly upset about the financial state of his business when he resumed control in the Spring of 2013. He testified that, prior to his heart attack, he was running a business with a typical $10 to $12 million yearly revenue, but that he returned to a business in debt to the tune of roughly $790,000.00. Marinaro lamented that Paladin entered into contracts to buy citrus when that was not the plan for the LLC. Alternately, he blamed Paladin for taking too much money out of the LLC to set up the packing house. Marinaro’s testimony was inconsistent and unreliable. He first testified that Paladin had full authority to purchase fruit in his absence, but later professed to be “dismayed” that his company was purchasing fruit in his absence. The evidence does not support a finding that the LLC was formed for any reason other than to continue his fruit dealings in a legal structure that would protect his personal assets. Marinaro’s explanation that the purpose of the LLC was to conduct sales for the packing company also lacks credibility. The LLC was organized in November 2011, but the packing house in Ft. Pierce from which he acquired the equipment to set up a packing house in Okeechobee did not go “belly up” until February 2012. Marinaro would have had to be clairvoyant to set up an LLC for the sole purpose of sales to a packing house about which he was not aware until four months later. Marinaro’s testimony that he was in the dark about the running of his business and that he was somehow duped by Paladin is likewise unreliable. Marinaro testified that, during his absence, he was “concerned that Paladin was entering into contracts where a bond was required, but not secured.”4/ He could not have been concerned about contracts to buy fruit without posting the required bond if he was not even aware that his company was purchasing fruit. Further, Marinaro neither questioned Paladin about entering into the citrus contracts, nor suggested Paladin use a different contract form for the LLC. The evidence establishes that Marinaro knew Paladin was purchasing fruit during Marinaro’s absence to continue the regular fruit-dealer’s business, and further, that Marinaro knew Paladin was entering into contracts on behalf of the LLC, the company formed just one day prior to Marinaro granting Paladin full power of attorney to run his business. Finally, Marinaro knowingly participated in the formation of Sunny Fresh Packing, LLC, in February 2012, four months after he became incapacitated. This required his involvement in a complicated business scheme in which his company collected on a debt owed by a packing house in Ft. Pierce, and acquired the equipment to run the new packing house, with two partners, Parris and Paladin, located in Okeechobee on property owned by a third party, Mr. Smith, who is not a member of Sunny Fresh Packing, LLC. It is unlikely Marinaro was clueless as to the fruit dealings of the LLC in his absence. Further, it is disingenuous, at best, for Marinaro to suggest that the contracts entered into in 2012 are not with the LLC, the corporation he formed in 2011 to protect his personal assets from his business obligations.
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 approving the claim of DP Partners, Ltd., against Sunny Fresh Citrus Export and Sales Co., LLC, in the amount of $44,032.00. DONE AND ENTERED this 30th day of October, 2014, in Tallahassee, Leon County, Florida. S Suzanne Van Wyk 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 30th day of October, 2014.
