The Issue The issues for determination in this case are whether Respondent, as a licensed citrus fruit dealer, breached an agreement with Petitioner relating to the purchase of citrus fruit during the 1993-1994 citrus shipping season; and further whether the breach of such agreement constitutes a violation of the Florida Citrus Code for which the proceeds of the citrus fruit dealer's bond executed by Co-Respondent should be paid to Petititioner pursuant to Section 601.66, Florida Statutes.
Findings Of Fact Petitioner, BBC & F Corporation, Inc., is a Florida corporation located in Zolfo Springs, Florida, which is in the business of buying and selling citrus fruit. Charles J. "Chuck" Young is the vice-president and a director of Petitioner. Respondent, Jim Robinette, is a citrus fruit dealer with an office in Lakeland, Florida, who was licensed during the 1993-1994 citrus shipping season by the Florida Department of Agriculture and Consumer Affairs. Co-Respondent, Aetna Casualty and Surety Company, is a surety company qualified to do business in Florida, which pursuant to Section 601.61, Florida statutes, executed Respondent's citrus fruit dealer's bond for the 1993-1994 citrus shipping season in the amount of $5,000.00. On or about March 1, 1994, Petitioner, by and through its director and representative, Charles J. "Chuck" Young, entered into an oral contract with Respondent for the sale and delivery of certain citrus fruit from Petitioner's grove in Dundee, Florida. At that time, Respondent had made a prior agreement with the Redi-Made Foods Corporation to supply citrus fruit to Redi-Made's facility in Tampa, Florida. Specifically, the contract between Petitioner and Respondent provided for the purchase of valencia oranges to be used as salad fruit. The fruit was to be delivered by Petitioner to Redi-Made's facility in Tampa, Florida. The initial terms of the contract provided for a purchase price of $10 per box for fruit delivered to Redi-Made. Of the $10 contract price, $7 was for the grower (Petitioner), $1.90 was to cover the harvesting costs, $.25 was a brokerage fee paid to James Porter of Redi-Made, and $.85 was for Respondent. The first few loads were delivered to Redi-Made and paid for at the contract price of $10 per box. Subsequent to the delivery of the initial few loads, the terms of the contract were amended to incorporate a deduction of $.20 per box of fruit delivered for the purpose of expediting the processing of the payments from Redi-Made. The Petitioner and Respondent agreed to share equally this reduction from the original price. Accordingly, under the amended terms of the contract, Petitioner would receive $6.90 per box delivered, the harvesting costs remained at $1.90 per box delivered, the payment to James Porter remained at $.25 per box delivered, and the Respondent would receive $.75 per box delivered. In accordance with the terms of the amended contract, Petitioner during March of 1994, delivered six loads of valencia oranges totalling 2210 boxes to Redi-Made for which payment has not been made by Respondent. Under the terms of the amended contract, Petitioner is owed $15,249 for the fruit delivered. In addition, Petitioner paid for the harvesting costs of the fruit, for which under the terms of the amended contract, Petitioner is owed $4,199. Respondent was paid by Redi-Made for three of the six loads. These loads are evidenced by trip tickets 70144, 70146 and 82960, and show that 930 boxes of fruit were delivered by Petitioner to Redi-Made; however, Redi-Made paid Respondent for only 890 boxes of this fruit, and did not pay Respondent for the remainder of the 2210 boxes of fruit delivered by Petitioner. There is an ongoing dispute between Respondent and Redi-Made regarding Redi-Made's failure to make payment for the remainder of the fruit; however, resolution of the Respondent's dispute with Redi-Made is independent of, and does not affect the obligations of the Respondent with respect to Respondent's contract with Petitioner.
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 adjudicating that the amount of indebtedness owed to Petitioner from Respondent is $19,488.00, that Respondent shall have thirty (30) days in which to satisfy such indebtedness, and that upon failure of the Respondent to make satisfaction of this claim, the proceeds of the citrus fruit dealer's bond executed by Co-Respondent shall be distributed to Petitioner. RECOMMENDED in Tallahassee, Leon County, Florida, this 9th day of May, 1995. RICHARD HIXSON 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 9th day of May, 1995. APPENDIX Petitioner's Findings 1.-3. Adopted and Incorporated COPIES FURNISHED: Commissioner Bob Crawford Commissioner of Agriculture The Capitol, P1-10 Tallahassee, Florida 32399-0810 Brenda Hyatt, Chief Department of Agriculture and Consumer Services Mayo Building, Room 508 Tallahassee, Florida 32399-0800 Richard Tritschler, Esquire Department of Agriculture and Consumer Services The Capitol, PL-10 Tallahassee, Florida 32399-0810 Allan L. Casey, Esquire Post Office Box 7146 Winter Haven, Florida 33883-7146 Jim Robinette 2025 Sylvester Road, Suite J4 Lakeland, Florida 33803
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Citrus enter a final order dismissing the application filed by the Petitioner for licensure as a citrus fruit dealer. DONE AND ENTERED this 30th day of May, 2013, in Tallahassee, Leon County, Florida. S WILLIAM F. QUATTLEBAUM 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 May, 2013. COPIES FURNISHED: Douglas Ackerman, Executive Director Department of Citrus Post Office Box 9010 605 East Main Street Bartow, Florida 33831-9010 Joseph P. Mawhinney, Esquire Reed and Mawhinney, P.L. 1611 Harden Boulevard Lakeland, Florida 33803-1826 Guillermo Vazquez East West Citrus Packers, LLC 11860 Southwest 183rd Street Miami, Florida 33177-2453
The Issue Whether the Respondent Carlyn R. Kulick, d/b/a Carlyn's, failed to pay amounts owing to the Petitioner for the shipment of citrus fruit, as set forth in the Complaint dated April 30, 2001, and, if so, the amount the Petitioner is entitled to recover.
Findings Of Fact At all times material to this proceeding, Spyke's Grove and Carlyn's were "citrus fruit dealers" licensed by the Department. As part of its business, Carlyn's sells to its retail customers "gift fruit" consisting of oranges and grapefruit for shipment to third persons identified by the customers. Carlyn R. Kulick is the owner of Carlyn's and acted on its behalf with respect to the transactions that are the subject of this proceeding. Spyke's Grove is in the business of packaging and shipping "gift fruit" consisting of oranges and grapefruit pursuant to orders placed by other citrus fruit dealers. Barbara Spiece is the president of Spyke's Grove and acted on its behalf with respect to the transactions that are the subject of this proceeding. In November and December 1999, Spyke's Grove received a number of orders for "gift fruit" from Carlyn's. Most of the orders were for single shipments of fruit. One order was for six monthly shipments of fruit. This was the first year Carlyn's had done business with Spyke's Grove, and Carlyn's and Spyke's Grove did not execute a written contract governing their business relationship. On the night of Sunday, December 12, 1999, the Spyke's Grove's packinghouse was destroyed by fire, and its offices were substantially damaged. The fire could not have happened at a worse time because it was at the peak of the holiday fruit- shipping season. Spyke's Grove was able to move into temporary offices and to obtain the use of another packinghouse very quickly. It had telephone service at approximately noon on Tuesday, December 14, 1999, and it began shipping "gift fruit" packages on Friday, December 17, 1999, to fill the orders it had received. Carlyn R. Kulick, the owner of Carlyn's, learned of the fire at Spyke's Grove and attempted to contact the Spyke's Grove offices for an update on the orders Carlyn's had placed for shipment during the holidays. Mr. Kulick was unable to contact anyone at Spyke's Grove for three or four days after the fire, and he was worried that his customers' orders for "gift fruit" would not be shipped on time. Mr. Kulick called another packinghouse and placed orders duplicating some of the orders Carlyn's had placed with Spyke's Grove. Meanwhile, Spyke's Grove was giving priority to its smaller wholesale customers such as Carlyn's, and it shipped all of the orders it had received from Carlyn's. Carlyn's did not cancel its orders with Spyke's Grove or otherwise notify Spyke's Grove that it should not ship the fruit; Mr. Kulick assumed that Spyke's Grove would contact him if it intended to ship the fruit ordered by Carlyn's. Spyke's Grove sent numerous invoices and statements of account to Carlyn's Regarding the gift fruit at issue here. According to the statement of account dated June 1, 2001, as of that date Carlyn's owed Spyke's Grove $1,069.78 for the gift fruit at issue here. Most of the invoices to Carlyn's that were submitted by Spyke's Grove contain the following: "Terms: Net 14 days prompt payment is expected and appreciated. A 1½% monthly service charge (A.P.R. 18% per annum) may be charged on all past due accounts. . . ." Relying on this language, Spyke's Grove also seeks to recover a monthly service charge for each month that Carlyn's account was past due. Carlyn's does not dispute Spyke's Grove's claim that $1,069.78 worth of "gift fruit" was shipped by Spyke's Grove pursuant to orders Carlyn's placed in November and December 1999. Carlyn's' basic position is that it need not pay Spyke's Grove for the fruit because Spyke's Grove did not notify it after the December 12, 1999, fire that it would ship the orders and because Carlyn's had to make sure that its customers' orders were filled. The uncontroverted evidence establishes that Carlyn's was, at the times material to this proceeding, a Florida- licensed and bonded citrus fruit dealer; that, in November and December 1999, Carlyn's submitted orders to Spyke's Grove for the shipment of "gift fruit" consisting of oranges and grapefruit; that Spyke's Grove shipped all of the "gift fruit" ordered by Carlyn's in November and December 1999; that the price of the "gift fruit" shipped by Spyke's Grove pursuant to Carlyn's' orders totaled $1,069.78; and that Spyke's Grove timely filed its complaint alleging that Carlyn's failed to promptly pay its indebtedness to Spyke's Grove for citrus products shipped pursuant to orders placed by Carlyn's. Spyke's Grove is, therefore, entitled to payment of the principal amount of $1,069.78, plus pre-judgment interest. Based on the date of the last invoice which contained a charge for any of the gift fruit at issue here, the prehearing interest would run from May 1, 2000.
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 Carlyn R. Kulick, d/b/a Carlyn's, to pay $1,069.78 to Spyke's Grove, Inc., d/b/a Fresh Fruit Express, Emerald Estate, Nature's Classic, together with pre-judgment interest calculated at the rate specified in Section 55.03, Florida Statutes, on the amounts owing. DONE AND ENTERED this 1st day of November, 2001, in Tallahassee, Leon County, Florida. MICHAEL M. PARRISH 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 1st day of November, 2001. COPIES FURNISHED: Carlyn R. Kulick, Owner Carlyn's 1601 Fifth Avenue, North St. Petersburg, Florida 33713 Barbara Spiece, President Spyke's Grove, Inc. 7250 Griffin Road Davie, Florida 33314 Western Surety Company Post Office Box 5077 Sioux Falls, South Dakota 57117 Honorable Charles H. Bronson Commissioner of Agriculture Department of Agriculture and Consumer Services The Capitol, Plaza Level 10 Tallahassee, Florida 32399-0810 Richard D. Tritschler, General Counsel Department of Agriculture and Consumer Services The Capitol, Plaza Level 10 Tallahassee, Florida 32399-0810 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
The Issue The issue is whether Respondent, Golden Gem Growers, Inc. (Golden Gem), owes Petitioner the money alleged in the Amended Complaint based on two written contracts between Petitioner and Golden Gem.
Findings Of Fact During the citrus growing season of 2000-2001, Golden Gem was a citrus fruit dealer defined in Subsection 601.03(8) and was licensed and bonded in accordance with Chapter 601. Golden Gem operated a packinghouse in Alturas, Florida, and regularly purchased citrus fruit for sale in the fresh fruit market. Fidelity & Deposit Company of Maryland (Fidelity) is the surety on the fruit dealer's bond issued to Golden Gem for the 2000-2001 season. On September 14, 2000, Petitioner and Golden Gem entered into Contract No. AS-7199. The contract provided, in relevant part, that Petitioner was to deliver Valencia oranges and other citrus fruit to Golden Gem and that Golden Gem was to handle, pack, ship, sell, and market the fresh fruit provided by Petitioner. On May 9, 2001, Petitioner and Golden Gem entered into Contract No. AS-7208. The contract provided, in relevant part, that Petitioner was to deliver Valencia oranges to Golden Gem and that Golden Gem was to handle, pack, ship, sell, and market the fresh fruit provided by Petitioner. Contracts AS-7199 and AS-7208 require Golden Gem to detail and account for all the Valencia oranges delivered by Petitioner and packed by Golden Gem. Each contract provides for attorney's fees to the prevailing party. Petitioner delivered 115,740 boxes of Valencia oranges to Golden Gem and Golden Gem processed all 115,740 boxes. Golden Gem packed the oranges into 182,650 cartons but accounted to Petitioner for only 159,731 cartons. Golden Gem collected $1,172,715.40 for 159,731 cartons of Petitioner's Valencia oranges. Golden Gem was entitled to deduct expenses for packing, shipping, and handling in the total amount of $630,475.10. Golden Gem owed a net payment to Petitioner of $542,240.30. Golden Gem paid $518,284.82 to Petitioner. The balance owed for the fruit accounted for by Golden Gem is $23,955.48. Golden Gem owes Petitioner an additional $85,757.36 for the proceeds of an additional 22,919 cartons of Valencia oranges for which Golden Gem has not accounted to Petitioner. The amount due is net after adjusting the gross price for handling charges that Golden Gem is entitled to under the terms of the contracts. Golden Gem owes Petitioner a total amount of $109,712.84 for Valencia oranges that Petitioner delivered to Golden Gem in the 2000-2001 shipping season. Petitioner is the prevailing party. Petitioner incurred reasonable attorney's fees of $10,570.00 and costs of $398.24.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department enter a Final Order adopting the findings and conclusions in this Recommended Order and requiring Respondents to pay Petitioner the sum of $109,712.84. DONE AND ENTERED this 25th day of October, 2002, in Tallahassee, Leon County, Florida. DANIEL MANRY 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 25th day of October, 2002. COPIES FURNISHED: Kathy Alves Fidelity & Deposit Company of Maryland Post Office Box 87 Baltimore, Maryland 21203 Golden Gem Growers, Inc. Post Office Drawer 9 Umatilla, Florida 32784 Maggie Evans, Esquire 131 Waterman Avenue Mount Dora, Florida 32757 Brenda D. Hyatt, Bureau Chief Department of Agriculture and Consumer Services 500 Third Street, Northwest Post Office Box 1072 Winter Haven, Florida 33882-1072 Brandon J. Rafool, Esquire Post Office Box 7286 Winter Haven, Florida 33883-7286 Honorable Charles H. Bronson Commissioner of Agriculture Department of Agriculture and Consumer Services The Capitol, Plaza Level 10 Tallahassee, Florida 32399-0810 Richard D. Tritschler, General Counsel Department of Agriculture and Consumer Services The Capitol, Plaza Level 10 Tallahassee, Florida 32399-0810 Brenda D. Hyatt Bureau of License and Bond Department of Agriculture 407 South Calhoun Street Mayo Building, Mail Stop 38 Tallahassee, Florida 32399-0800
The Issue The issues for determination in this case are whether Respondent, as a licensed citrus fruit dealer, misappropriated and marketed citrus fruit owned by Petitioner during the 1992-1993 shipping season, and further, whether such actions constitute a violation of the Florida Citrus Code for which proceeds of the citrus fruit dealer's bond executed by Co-Respondent should be paid to Petitioner in satisfaction of Petitioner's claim pursuant to Section 601.66, Florida Statutes.
Findings Of Fact Petitioner, Thompson Fruit Company, is a Florida company with an office in Winter Haven, Florida. Petitioner has been in the business of buying and selling citrus fruit for many years. James Thompson, Jr., (Thompson) is the President of Petitioner. Petitioner was actively engaged in the business of buying and selling citrus fruit during the 1992-1993 shipping season. Respondent, Golden Gem Growers, Inc., is a Florida corporation located in Umatilla, Florida, and was, at all material times, a licensed citrus fruit dealer under the provisions of chapter 601, Florida Statutes. Respondent is a cooperative organization comprised of citrus fruit grower members. Respondent offers various services to its members including harvesting and marketing services. Respondent enters into individual contracts with its grower members to accept and market citrus fruit. During the 1992-1993 shipping season Respondent entered into more than one hundred contracts with its grower members relating to the acceptance and marketing of citrus fruit. Co-Respondent, Fidelity & Deposit Company of Maryland, is a surety company qualified to do business in Florida, which, pursuant to section 601.61, Florida Statutes, during the 1992-1993 shipping season, executed a citrus fruit dealer's bond for Respondent in the amount of $100,000. E.J. Higgins (Higgins) at all material times hereto was a citrus fruit grower and member of Respondent's cooperative organization. On July 23, 1991, Higgins entered into a Revised Grower Member Agreement with Respondent. In accordance with its contract with Higgins, Respondent was obligated to provide citrus fruit harvesting and marketing services to Higgins. On July 5,1990, Higgins had entered into a Crop Agreement and a separate Lease Agreement relating to a citrus grove owned by Pomco Associates, Inc., (Pomco) in Manatee, County, Florida. The grove consisted of approximately 52 acres of red grapefruit trees. The Crop Agreement made no reference to the duration of the agreement. The separate Lease Agreement between Higgins and Pomco expressly stated that the lease ended one year from the date of signing. Higgins provided Respondent with a copy of his July 5, 1990 Crop Agreement and Lease Agreement with Pomco. Respondent thereafter accepted citrus fruit from Higgins which was harvested in the Pomco grove in the 1991-1992 season, and Respondent paid Higgins for the citrus fruit from the Pomco grove at that time. In 1992 and early 1993, Higgins informed Phillip Conant, a Vice- President and Director of the Grower Division of Respondent, that Higgins was a holdover lessee under the Pomco lease, and was entitled to harvest the fruit from the Pomco grove. Under Higgins' contract with Respondent, Respondent was required to provide Higgins with harvesting equipment including trailers and boxes. Respondent was further required under the contract to accept and market the citrus fruit on Higgins' behalf. Respondent advanced Higgins $2,400 toward the marketing of the citrus fruit from the Pomco grove. On January 23, 1993, Higgins requested that Respondent provide him with trailers and boxes to set up Higgins' crew for harvesting the Pomco grove. Respondent complied with Higgins' request, and dispatched a truck and trailer with a load of boxes to the Pomco grove. The truck, trailer and boxes were clearly marked and identified as belonging to Respondent. Prior to this time, on or about December 2, 1992, Petitoner, by and through its President, James Thompson, Jr., had entered into a Purchase Contract and Agreement for the citrus fruit on the same Pomco grove in Manatee County, Florida, for the 1992-1993 season. Under the terms of the contract, Petitioner advanced Pomco $3,000 toward the purchase of the citrus fruit from the Pomco grove. Shortly after Respondent dispatched its equipment to the Pomco grove on January 23, 1993, Thompson was informed that citrus fruit was being harvested from the Pomco grove. Thompson went to the grove, observed the boxes and trailers which were identified as belonging to Respondent, and called Phillip Conant to inform Conant that Thompson had a purchase contract and agreement for the citrus fruit from the Pomco grove. Thompson furnished Conant with a copy of the Petitioner's contract with Pomco. Thompson also contacted the Manatee County Sheriff's Department to remove Higgins' harvesting crew from the Pomco grove. Respondent, by and through its director, Conant, then contacted Higgins who stated that he had obtained a legal opinion that as a holdover lessee under his prior crop agreement and lease with Pomco, he had a right to harvest the fruit from the Pomco grove. Higgins further stated that he expected Respondent to fulfill its contractual obligations to provide harvesting services and to market the citrus fruit. Conant, by telephone, informed Thompson that in light of Higgins' representations, Respondent was unsure as to whether Higgins or Petitioner had a right to harvest the fruit. In response to this information, Thompson stated that he would pursue judicial remedies to resolve the dispute. By letter dated February 4, 1993, Conant confirmed to Thompson that Respondent was taking a "hands off" position as to the dispute between Petitioner and Higgins over the citrus fruit from the Pomco grove. On February 5, 1993, Conant also sent a facsimile copy of the February 4, 1993, letter to Thompson and reiterated to Thompson that Respondent was not knowledgeable of the facts of Petitioner's dispute with Higgins, and would not be involved in the dispute. Between February 7, 1993, and February 13, 1993, Respondent accepted three shipments of citrus fruit from the Pomco grove harvested by Higgins. The three shipments totalled 1,230 boxes. All the fruit accepted by Respondent from the Pomco grove was red grapefruit. At that point in the season, the market for red grapefruit was not good. The net value received by Respondent for the red grapefruit from the Pomco grove was $.9889 per box. A reasonable average price for red grapefruit at that time was $.97 per box. Respondent received a reasonable price per box for the red grapefruit from the Pomco grove during the 1992-1993 shipping season. Respondent received a total of $2,418.86 for the red grapefruit from the Pomco grove. The harvesting costs incurred by Respondent during the 1992- 1993 relating to the Pomco fruit were $1,402.40, leaving a balance of $1,216.34. Respondent has placed the funds received from the Pomco grove fruit during the 1992-1993 shipping season in its escrow account pending a determination as to who is the rightful owner of the funds. Respondent has provided an accurate accounting of the harvesting and marketing of the Pomco grove citrus fruit during the 1992-1993 season. There has not been a judicial resolution of the dispute between Petitioner and Higgins.
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 pursuant to Section 601.66(4), Florida Statutes, dismissing the proceeding. RECOMMENDED in Tallahassee, Leon County, Florida, this 18th day of May, 1995. RICHARD HIXSON 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 18th day of May, 1995. APPENDIX Respondent's Proposed Findings: Paragraphs 1 through 21 adopted and incorporated. Paragraphs 22 revised as to amount remaining due. COPIES FURNISHED: Commissioner Bob Crawford Commissioner of Agriculture The Capitol, PL-10 Tallahassee, FL 32399-0810 Brenda Hyatt, Chief Department of Agriculture and Consumer Services Mayo Building, Room 508 Tallahassee, FL 32399-0800 Richard Tritschler, Esquire Department of Agriculture and Consumer Services The Capitol, PL-10 Tallahassee, FL 32399-0810 Jerri A. Blair, Esquire Post Office Box 130 Tavares, FL 32778 Ray Mattox, Esquire 170 East Central Avenue Post Office Box 917 Winter Haven, FL 33882-0917 Golden Gem Growers Post Office Box 9 Umatilla, FL 32784 Fidelity & Deposit Company of Maryland Post Office Box 1227 Baltimore MD 31203
The Issue The issues in this case are whether Respondent, a licensed citrus fruit dealer, violated the Florida Citrus Code by failing to pay Petitioner the full purchase price for grapefruit that the dealer had harvested from Petitioner's grove and sold in the ordinary course of business to its (the dealer's) customers; and, if so, the amount of the indebtedness owed by the dealer.
Findings Of Fact Petitioner Frontier Fresh of Indian River, LLC ("Seller"), is in the business of growing citrus fruit and hence is a "producer" as that term is defined in the Florida Citrus Code. § 601.03(33), Fla. Stat. Respondent United Indian River Packers, LLC ("Buyer"), is a "citrus fruit dealer" operating within the regulatory jurisdiction of the Department of Agriculture and Consumer Services (the "Department"). See § 601.03(8), Fla. Stat. On September 6, 2013, Seller and Buyer entered into a Production Contract Agreement (the "Contract") under which Buyer agreed to purchase and harvest red and flame grapefruit (both generally called "colored grapefruit") then growing in Seller's "Emerald Grove" in St. Lucie County. Buyer promised to pay Seller $7.75 per box plus "rise" for all colored grapefruit harvested from the Emerald Grove during the 2013/2014 season. ("Rise" is an additional payment due Seller if Buyer's net revenue from marketing the fruit exceeds the Contract price or "floor payment.") The Contract gave Buyer and its "agents, employees and vehicles" the right to "enter upon SELLER'S premises . . . from time to time for the purpose of inspecting, testing and picking fruit, and for the purpose of removing said fruit." Buyer was obligated to make scheduled payments to Seller totaling $250,000 between September and December 2013, with the balance of the floor payment "to be made within 45 days from week of harvest." The deadline for making the final rise payment was June 30, 2014. The Contract described the Seller's duties as follows: SELLER agrees to maintain the crop merchantable and free from Citrus Canker, Mediterranean fruit fly, Caribbean fruit fly, and any and all impairments which would alter the ability to market the crop. It is further agreed that in the event of such happening BUYER has the option to renegotiate with SELLER within 10 days of such find, or terminate contract and receive any monies that may be remaining from deposit. It is understood and agreed that the word "merchantable" as herein used, shall mean fruit that has not become damaged by cold, hail, fire, windstorm, insects, drought, disease or any other hazards to the extent it cannot meet all applicable requirements of the laws of the State of Florida and the Federal Government, including without limitation those relating to pesticides, and the regulations of the Florida Department of Citrus relating to grade and quality. With regard to default, the Contract provided: It is further agreed that in case of default by either the BUYER or SELLER the opposite party may, at his option, take legal action to enforce this contract or may enter into negotiations to carry out the terms and provisions thereof, in which event the party found to be in default shall pay reasonable costs in connection with either negotiation or litigation, such cost to include a reasonable attorney's fee to party prevailing in such controversy. The Contract acknowledged the existence of a "Citrus Fruit Dealers Bond" posted with the Department but cautioned that the bond "is not insurance against total 1iabilities that may be incurred if a citrus fruit dealer should default" and "does not necessarily insure full payment of claims for any nonperformance under this contract." Buyer began picking colored grapefruit from the Emerald Grove on October 17, 2013, and initially things went well. For the first month, Buyer achieved encouraging packout percentages of between 60% and 90%. (The packout percentage expresses the ratio of fruit deemed acceptable for the fresh market to the total fruit in the run. A higher packout percentage means fewer "eliminations" for the juice processing plant and thus a more valuable run.) On November 13, 2013, however, the packout rate plunged to around 38%. Although there were some good runs after that date, for the rest of the season the packout percentages of grapefruit picked from the Emerald Grove mostly remained mired in the 30% to 50% range, which is considered undesirably low. Everyone agrees that the 2013/2014 grapefruit crop in the Emerald Grove was disappointing. Representatives of Buyer and Seller met at the Emerald Grove in mid-November to discuss the reduced packout percentages. Mild disagreement about the exact reason or reasons for the drop-off in quality arose, but some combination of damage by rust mites and a citrus disease known as greasy spot is the likeliest culprit.1/ The problems were not unique to Emerald Grove, as the 2013/2014 citrus season was generally poor in the state of Florida. Seller's grapefruit crop was consistent with the statewide crop for that year. Despite the low packout percentages, and being fully aware of the crop's condition, Buyer continued to harvest colored grapefruit from the Emerald Grove, which it packed and exported for sale to its customers in Europe, Japan, and Southeast Asia. After picking fruit on February 3, 2014, however, Buyer repudiated the Contract and left the colored grapefruit remaining in the Emerald Grove to Seller. As a result, Seller sold the rest of the crop to another purchaser.2/ At no time did Buyer notify Seller that it was rejecting any of the grapefruit which Buyer had picked and removed from the Emerald Grove pursuant to the Contract. For months after Buyer stopped performing under the Contract, Seller endeavored to collect the amounts due for all the fruit that Buyer had harvested. By mid-April, however, Buyer still owed several hundred thousand dollars. At a meeting between the parties on April 22, 2014, Buyer proposed that Seller discount the purchase price given the disappointing nature of the crop, which Buyer claimed had caused it to lose some $200,000 in all. Buyer requested that Seller forgive around $100,000 of the debt owed to Buyer, so that Seller, in effect, would absorb half of Seller's losses. Buyer expected that Seller would agree to the proposed reduction in price and maintains that the parties did, in fact, come to a meeting of the minds in this regard, but the greater weight of the evidence shows otherwise. Seller politely but firmly——and unequivocally——rejected Buyer's proposal, although Seller agreed to accept installment payments under a schedule that would extinguish the full debt by August 31, 2014. This response disappointed Buyer, but Buyer continued to make payments to Seller on the agreed upon payment schedule. By email dated June 4, 2014, Buyer's accountant asked Seller if Seller agreed that the final balance due to Seller was $108,670.50. Seller agreed that this was the amount owing. After that, Buyer tried again to persuade Seller to lower the price, but Seller refused. Buyer made no further payments. At no time did Buyer notify Seller that it was revoking its acceptance of any of the fruit harvested from the Emerald Grove during the 2013/2014 season. Having taken physical possession of the fruit, Buyer never attempted to return the goods or demanded that Seller retrieve the fruit. Rather, exercising ownership of the goods, Buyer sold all the colored grapefruit obtained under the Contract to its customers for its own account. On October 14, 2014, Seller brought suit against Buyer in the Circuit Court of the Nineteenth Judicial Circuit, in and for Indian River County, Florida, initiating Case Number 31-2014-CA-001046. Buyer filed a counterclaim against Seller for breach of contract. On February 4, 2015, Seller filed a Notice of Voluntary Dismissal of its judicial complaint, opting to take advantage of available administrative remedies instead, which it is pursuing in this proceeding. As of the final hearing, Buyer's counterclaim remained pending in the circuit court.
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 awarding Frontier Fresh of Indian River, LLC, the sum of $108,670.50, together with pre-award interest at the statutory rate from June 4, 2014, to the date of the final order, and establishing a reasonable time within which said indebtedness shall be paid by United Indian River Packers, LLC. DONE AND ENTERED this 27th day of August, 2015, 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 27th day of August, 2015.
The Issue The issues in this case are whether, and to what extent, the Respondent, a licensed citrus fruit dealer, is liable to the Petitioner for damages resulting from the purchase, handling, sale, and accounting of purchases and sales occurring during the 1992-1993 growing season, and further whether the Co- Respondent, Surety Company, is therefore liable on the citrus fruit dealer's bond issued to the Respondent.
Findings Of Fact Petitioner, Newbern Groves Inc., is a Florida corporation engaged in the business of producing, buying, and selling citrus fruit. Petitioner's business address is in Tampa, Florida. Newbern Groves, Inc. was founded in 1947 by Copeland Newbern, who at all relevant times in this case served as Chairman of the Board of Directors. The President of Newbern Groves, Inc., is John Shepard. The Secretary- Treasurer of Newbern Groves, Inc., is Peter Skemp. At all relevant times, Respondent, Inter-Floridana, Inc., (full name, Inter-Floridana Imports and Exports, Inc.) was a citrus fruit dealer, licensed by the State of Florida during the 1992-1993 growing season. Respondent's business address was Brooksville, Florida, where Respondent operated a processing plant. The 1992-1993 growing season was the first year Respondent operated this processing plant. Respondent also maintained offices and warehouses in Orange County, Florida. In addition to its citrus fruit business, Respondent corporation also engaged in other business enterprises including blending other fruit drinks, processing tomato juice concentrate, and the sale of imported beer. At all relevant times, Jacques Bobbe was President and Chief Executive Officer of Inter-Floridana, Inc. At all relevant times, Larry Cail was the manager of the Respondent's processing plant in Brooksville, Florida. Beginning in May of 1992, Jacques Bobbe, on behalf of Inter-Floridana, and Peter Skemp and Copeland Newbern, on behalf of Newbern Groves, entered into discussions relating to Newbern's supplying Inter-Floridana with citrus fruit for the Inter-Floridana plant in Brooksville, Florida. Prior to this time the parties had not met, and there was no established course of business dealings between the parties. Specific meetings between the parties took place on July 30, 1992 in Brooksville; September 2, 1992 in Tampa; September 17, 1992 in Tampa; September 29, 1992 in Orlando; and November 25, 1992 in Tampa. The discussions conducted by the parties generally related to Newbern supplying Inter-Floridana with 1,500,000 boxes of citrus fruit which would accommodate the capacity of Inter-Floridana's Brooksville plant. The parties also generally discussed prices of various citrus fruit. There is no written documentation of the parties' negotiations. It is common practice in the citrus fruit industry to purchase and sell citrus fruit without written contracts. On November 3, 1992, Newbern delivered its first shipment of citrus fruit to Inter-Floridana's Brooksville plant. The shipment was delivered pursuant to Inter-Floridana's request to conduct a test-run of the processing plant's production capability. In December of 1992, Larry Cail of Inter- Floridana specifically requested grapefruit be delivered from Newbern. At that time Newbern was selling grapefruit to Chapman Fruit Company at $1.15 a pound. Thereafter Newbern continued to deliver citrus fruit shipments to Inter- Floridana's Brooksville plant on a regular basis until April 14, 1993. Inter- Floridana accepted the deliveries of citrus fruit from Newbern. The total pounds solids of Newbern fruit delivered to Inter-Floridana was 1,375,359.98, consisting of: 1,261,323.38 pound solids of orange juice 8,087.87 pound solids of mandarin 63,426.55 pound solids of white grapefruit juice 42,522.18 pound solids of red grapefruit juice. Beginning in December of 1992 Newbern representatives Peter Skemp and Copeland Newbern demanded payment for the fruit delivered to the Inter-Floridana plant in Brooksville. The customary practice in the citrus fruit business is payment is due one week after delivery. In this case, however, Newbern had agreed to a two-week after delivery payment. The price of the citrus fruit was to be calculated on the cost to Newbern of obtaining the fruit from the growers plus .05 for Newbern's expenses in making the deliveries to Inter-Floridana. On February 26, 1993, Inter-Floridana made its first payment to Newbern in the amount of $80,000. Thereafter Inter-Floridana made three more payments of $40,000, $40,000, and $30,000. The final payment from Inter-Floridana was made on April 1, 1993. After the April 1, 1993 payment, representatives of Newbern continued to demand payment from Inter-Floridana. No further payments were received, and Newbern ceased delivery of citrus fruit to Inter-Floridana on April 14, 1993. On May 12, 1993 the parties met in Brooksville, Florida. At this meeting Jacques Bobbe informed Peter Skemp and Copeland Newbern that Inter- Floridana's position was that Inter-Floridana was not purchasing citrus fruit from Newbern, but processing the citrus fruit for Newbern, and accordingly, Newbern owed Inter-Floridana approximately $400,000 for the costs of production, which was documented in a letter from Inter-Floridana to Newbern on May 14, 1993. At hearing on May 10, 1994, Jacques Bobbe testified that Inter-Floridana retracted its previous position, and did purchase citrus fruit from Newbern during the 1992-1993 growing season. On May 24, 1993, Copeland Newbern sent a letter to Jacques Bobbe demanding payment of $789,374.01 based on the Florida Citrus Mutual citrus statistics for the citrus fruit at that time, plus .05 for Newbern's services. On June 1, 1993, Jacques Bobbe sent a letter to Copeland Newbern requesting additional information regarding the calculation of the payment demanded from Newbern. On June 23, 1993, Copeland Newbern sent a certified letter to Jacques Bobbe detailing the problems associated with this transaction, and requesting assistance in resolving the matter in a timely manner. On June 25, 1993, Newbern filed the formal complaint against Inter- Floridana with the Department of Agriculture and Consumer Services which is the basis for this proceeding. Representatives of the parties met again on July 8, 1993; and on July 9, 1993, Jacques Bobbe sent a letter to John Shepard offering to resolve this matter as follows: Inter-Floridana would sell the frozen concentrated orange juice at $1.29 per pound solid; Newbern would receive $.83 per pound solid; Inter-Floridana would receive $.29 for packing and $.17 profit per pound solid. If the product sold for more than $1.29 per pound solid, the parties would divide the excess profit equally. On July 16, 1993, John Shepard, as President of Newbern Groves Inc., wrote to Jacques Bobbe and accepted this agreement. On July 19, 1993, Inter-Floridana filed its answer to the formal complaint filed by Newbern. The answer was verified by Jacques Bobbe. The answer denied that Inter-Floridana purchased citrus fruit from Newbern, and further claimed Newbern owed Inter-Floridana $442,133.21 for various services in connection with the processing and storage of the Newbern fruit. As set forth above, this position was subsequently retracted, and Inter-Floridana acknowledged the purchase of citrus fruit from Newbern. On August 5, 1993, Jacques Bobbe, on behalf of Inter-Floridana, filed a verified statement with the Department of Citrus attesting that Inter-Floridana did not purchase any fruit during the 1992-1993 growing season. The verified statement further attested that Inter-Floridana processed fruit for Newbern, and that Inter-Floridana had accounts payable of $978,580, and accounts receivable of $489,378.83. The accounts payable represented funds owed by Inter-Floridana to Newbern, and the accounts receivable consisted of the various production charges from Newbern as claimed by Inter-Floridana. On August 26, 1993, Newbern received an accounting from Inter-Floridana showing 500,651.26 pound solids of orange juice, 2,512.02 pound solids of mandarin, 39,809 pound solids of white grapefruit, and 11,602.50 pound solids of red grapefruit. This balance was substantially less than the amount delivered to Inter-Floridana. Unbeknown to Newbern, in February of 1993, Inter-Floridana had sold a substantial portion of the Newbern product to Windsor-Premium (Premium), a European business concern that Jacques Bobbe had been negotiating with since February of 1992. On February 26, 1993 Premium paid Inter-Floridana $807,825.29 for the product. This sale was the first part of a proposed ongoing transaction between Premium and Inter-Floridana to market citrus products in Europe. The proposed transaction would have been approximately $2 million; however, Premium did not complete the transaction with Inter-Floridana, and Premium eventually filed for bankruptcy in the United States District Court for the Southern District of Florida. The four payments totalling $190,000 that Inter-Floridana made to Newbern were derived from the proceeds of the sale to Premium. On October 1, 1993 Inter-Floridana sent a letter to John Shepard informing Newbern that of 1,375,359.57 pound solids, 848,558.76 had been sold. Thereafter in October of 1993, Inter-Floridana returned to Newbern 501,130.73 pound solids of orange, 18,018.92 pound solids of white grapefruit, and 11,614.39 pound solids of pink grapefruit. Newbern resold the returned orange citrus product to Indian River Fruits by means of a citrus broker, Merrill Lynch, which received a brokerage fee of $5,011.30. Some of the grapefruit citrus product had gelled and could not be resold.
Recommendation Based on the foregoing, it is, hereby, RECOMMENDED: That the Department of Agriculture and Consumer Services enter a final order adjudicating that the amount of indebtedness owed to the Petitioner from Respondent is $543,126.53, that the Respondent shall have thirty (30) days in which to satisfy such indebtedness, and upon failure of the Respondent to satisfy such indebtedness, the citrus fruit dealer's bond in the amount of $24,000 shall be distributed to Petitioner. DONE AND RECOMMENDED this 13th day of February, 1995, in Tallahassee, Leon County, Florida. RICHARD HIXSON 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 13th day of February, 1995. APPENDIX TO RECOMMENDED ORDER, CASE NO. 94-6775 Petitioner's proposed findings of fact. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted in part. Respondent acknowledged discussion of prices for the citrus fruit. Accepted in part. Respondent acknowledged an indebtedness of $978,580. Accepted. Accepted. Rejected as not supported by the evidence. Respondent's proposed findings of fact. Accepted. Accepted. Accepted. Rejected as not supported by the evidence. Rejected as not supported by the evidence. Rejected as not supported by the evidence. Accepted. Rejected in part. Rejected as to the frozen concentrated orange juice, accepted as to grapefruit. Rejected as irrelevant. Rejected as not supported by the evidence. Rejected as not supported by the evidence. Rejected as not supported by the evidence. Rejected as not supported by the evidence. COPIES FURNISHED: Timothy G. Hayes, Esquire 21859 State Road 54, Suite 200 Lutz, Florida 33549 Eric S. Mashburn, Esquire Post Office Box 771277 Winter Garden, Florida 34777-1277 The Honorable Bob Crawford Department of Agriculture and Consumer Services The Capitol, PL-10 Tallahassee, Florida 32399-0810 Richard Tritschler, General Counsel Department of Agriculture and Consumer Services The Capitol, PL-10 Tallahassee, Florida 32399-0810 Brenda Hyatt, Chief Bureau of Licensing & Bond Department of Agriculture 508 Mayo Building Tallahassee, Florida 32399-0800
The Issue The issue presented is whether Respondents Harbor Island Citrus, Inc., and Fidelity & Deposit Company of Maryland are indebted to Petitioner Rio Indio Fruit Company in the amount of $80,684.
Findings Of Fact Petitioner Rio Indio Fruit Company operates a citrus packinghouse located in St. Lucie County, Florida. Respondent Harbor Island Citrus, Inc., operates a citrus packinghouse in Indian River County, Florida. On approximately November 20, 1999, Albert Valdes from Harbor Island contacted Ralph Viamontes from Rio Indio to ascertain if Rio Indio might have a source that Harbor Island could use to obtain colored grapefruit for Harbor Island's annual fund-raising program. It was the industry practice, and Harbor Island's practice, for the fund-raising program to run from late-November through mid-December. During that time period, students in the north sell the fruit to raise money for their projects. The fruit used in such a fund-raising program can be a quality inferior to the quality demanded by the Japanese market, the primary market for Harbor's Island's citrus. Viamontes told Valdes he would see if he could find a grower with colored grapefruit suitable for Harbor Island's fund-raising program. Viamontes telephoned Valdes the following day and said he had located a grower. On that day or possibly the following day Valdes and two other Harbor Island employees, Dennis Downs and James Morris, met Viamontes at the Rio Indio facility. The four men drove in Viamontes' vehicle to the Sorge VII grove in Martin County to look at the grove's colored grapefruit. The amount of fruit in the grove was much larger than Harbor Island needed to fulfill its fund-raising program commitment. Viamontes estimated that the grove contained the equivalent of 30,000 boxes of colored grapefruit. Valdes told Viamontes that Harbor Island might need 18,000 to 20,000 boxes of the grapefruit for its fund-raising program. Viamontes told the Harbor Island employees that they could still make a deal for the grapefruit in the grove because since he had his own packing house, he would take the fruit that Harbor Island did not need. The men discussed that Harbor Island could take 2/3 of the colored grapefruit in the grove, and Rio Indio could take 1/3. They further discussed that the manager of Sorge VII wanted $5.50 a box for the fruit, that Viamontes would contract to take all the fruit in the grove, that Harbor Island would pay Viamontes $5.50 a box for the fruit Harbor Island took, and that Viamontes would pay the grower. James Morris from Harbor Island specifically asked Viamontes what would happen if Harbor Island wanted less than 18,000 to 20,000 boxes. Viamontes told the Harbor Island employees that there would be no problem if Harbor Island took less fruit because Viamontes would take whatever was left after Harbor Island took what it wanted. Valdes consulted with Donald Groves, Jr., the owner of Harbor Island to verify that Harbor Island would make the arrangement suggested by Viamontes, and Groves approved the arrangement. Thereafter, Viamontes entered into a written contact with the manager of Sorge VII to purchase all of the fruit for $5.50 a box, and that written contract included deadlines for 20,000 boxes of fruit to be picked by December 31, 1999, and the remainder to be picked by the end of February 2000. Rather than the 30,000 field boxes that Viamontes had estimated the grove contained, the grove contained substantially more grapefruit than Viamontes estimated. The record in this cause suggests that the grove may have contained as many as 43,762 boxes of colored grapefruit. In accordance with its understanding of the arrangement with Viamontes, Harbor Island began harvesting colored grapefruit from the Sorge VII grove on November 26, 1999, and completed all picking at the grove on December 8, 1999. During that time Harbor Island picked 9,000 boxes of colored grapefruit for which it was obligated to pay Viamontes $5.50 per box. Harbor Island paid Viamontes in full for the fruit it took. During the time Harbor Island was at the Sorge VII grove picking colored grapefruit, Rio Indio's crews were there picking grapefruit. Rio Indio's crews also picked fruit at the grove during the months after Harbor Island completed its picking. In addition to Rio Indio's crews knowing that Harbor Island had completed its picking, James Morris specifically told Viamontes that Harbor Island had taken all the fruit it wanted from the Sorge VII grove as of December 8, 1999. During the months of December 1999, January 2000, February 2000, and the first half of March 2000, Viamontes spoke with Valdes of Harbor Island several times a day to check on the status of other unrelated fruit being packed and sold by Harbor Island for Viamontes. In addition, Viamontes was present at the Harbor Island packinghouse on a weekly basis to pick up checks due to him or Rio Indio for the unrelated fruit being sold by Harbor Island for Viamontes. Yet, at no time between December 8, 1999, and the middle of March 2000 did Viamontes tell anyone that he believed Harbor Island had an obligation to harvest additional fruit from the Sorge VII grove. Rather, in late January 2000 Viamontes asked Valdes if Harbor Island were going to take any more fruit from Sorge VII. When Valdes said the fund-raising program was over, Viamontes told Valdes not to worry because Rio Indio would take the rest. Further, on or about March 1, 2000, during one of Viamontes' visits to the Harbor Island packinghouse, Dennis Downs of Harbor Island asked Viamontes how the harvesting in Sorge VII was proceeding. Viamontes responded that Rio Indio was harvesting the remaining colored grapefruit and that Harbor Island need not be concerned about any further harvesting at the Sorge VII grove. On or about March 15, 2000, the price and demand for colored grapefruit suddenly and dramatically dropped due to an oversupply of fruit for which the industry was not prepared. After the dramatic decline, Viamontes contacted Valdes from Harbor Island and inquired whether Harbor Island was going to pick any additional fruit at the Sorge VII grove. Valdes responded that Harbor Island had no obligation to pick any additional colored grapefruit from the Sorge VII grove based upon the agreements between Harbor Island and Rio Indio, specifically, Viamontes' continued representations that Harbor Island should not be concerned about picking any additional colored grapefruit from the grove because Rio Indio would take the remainder. In July 2000 Viamontes appeared at Harbor Island and advised Donald Groves, for the first time, that Harbor Island owed Rio Indio the amount of $80,684 for an additional 20,171 boxes of colored grapefruit from the Sorge VII grove, which Viamontes now contends Harbor Island should have harvested. Rio Indio claims that it suffered a loss of $4 per box for that additional fruit. The documentation presented by Rio Indio to support its demand is questionable and does not substantiate Rio Indio's claimed damages. First, the majority of the documents submitted by Rio Indio indicate that the fruit described therein was from a grove in St. Lucie County, and Sorge VII is in Martin County. Second, the majority of the documents indicate that the fruit described therein was from packinghouse eliminations although Viamontes alleges that the fruit went directly from the field to the cannery without going through a packinghouse. Third, the cannery records reflect that the "pound solids per box" are significantly less than what would be expected from fruit coming from the Sorge VII grove based upon the grove's historical production.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered finding that Harbor Island Citrus, Inc., is not indebted to Rio Indio Fruit Company and dismissing the Complaint filed by Rio Indio Fruit Company in this cause. DONE AND ENTERED this 12th day of December, 2001, in Tallahassee, Leon County, Florida. LINDA M. RIGOT 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 12th day of December, 2001. COPIES FURNISHED: Theodore W. Herzog, Esquire 1101 Simonton Street Key West, Florida 33040 Fred L. Kretschmer, Jr., Esquire Moss, Henderson, Blanton, Lanier, Kretschmer & Murphy, P.A. 817 Beachland Boulevard Post Office Box 3406 Vero Beach, Florida 32964-3406 Kathy Elves The Fidelity and Deposit Companies 300 Saint Paul Place Post Office Box 87 Baltimore, Maryland 21203 Brenda D. Hyatt, Bureau Chief Department of Agriculture and Consumer Services 500 Third Street, Northwest Post Office Box 1072 Winter Haven, Florida 33882-1072 Brenda D. Hyatt, Bureau Chief Department of Agriculture and Consumer Services 541 East Tennessee Street India Building Tallahassee, Florida 32308 Honorable Charles H. Bronson Commissioner of Agriculture Department of Agriculture and Consumer Services The Capitol, Plaza Level 10 Tallahassee, Florida 32399-0810 Richard D. Tritschler, General Counsel Department of Agriculture and Consumer Services The Capitol, Plaza Level 10 Tallahassee, Florida 32399-0810
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.
