Findings Of Fact At all pertinent times, respondent Beach Landscaping, Inc. d/b/a Landscape Technologies or Landscape Technologies, Inc. or as Land Tech (Beach) operated as a dealer in agricultural products under license No. 2889 issued by the Department of Agriculture and Consumer Services (DACS). On Beach's behalf, respondent Regency Insurance Company posted a surety bond with DACS, No. SF00356 in the amount of $3,000, effective September 24, 1988, through September 23, 1989, to secure payment for Florida agricultural products. Testimony of Brooks. On August 30, 1989, Beach took delivery from petitioners of seven live oak trees petitioners grew near Chiefland, Florida, agreeing to pay $125 for each which, with sales tax, aggregated $927.50. Petitioners's Exhibit No. 1, Inv. No. 716280. Testimony of Cochran. Having earlier made a deposit of $637.50, Beach took delivery from petitioners on September 18, 1989, of 15 Florida-grown live oak trees, agreeing to pay $170 for each. With sales tax (but less the deposit) Beach owed petitioners $2,065.50 on account of this transaction. Petitioners's Exhibit No. 1, Inv. No. 716788. Testimony of Cochran. The next day Beach took delivery from petitioners of 15 more Florida- grown trees again agreeing to pay $170 for each. Again with sales tax and less an earlier deposit, indebtedness on account of the transaction aggregated $2,065.50. Petitioners's Exhibit No. 1, Inv. No. 716790. Testimony of Cochran. Finally, on September 20, 1989, Beach took delivery from petitioners of 16 Florida-grown live oak trees, agreeing to pay $170 for each, which with sales tax and less an earlier deposit, amounted to $2,203.20. Petitioners's Exhibit No. 1, Inv. No. 716791. Testimony of Cochran. On March 3, 1990, Beach or Landscape Technologies, Inc. paid petitioners $1,000, thereby reducing indebtedness to petitioners on account of the foregoing transactions from $7,261.70 to $6,261.70. Petitioners applied a check in the amount of $1,500 to reduce the indebtedness to $4,761.70, even though the check purported to be in payment of another invoice. In the answer it filed with DACS, Landscape Technologies, Inc., admitted indebtedness of $4,661.10.
Recommendation It is, accordingly, RECOMMENDED: That DACS order Beach to pay petitioners four thousand seven hundred sixty-one dollars and seventy cents ($4,761.70) within fifteen (15) days of the final order. That, in the event Beach fails to pay petitioners four thousand seven hundred sixty-one dollars and seventy cents ($4,761.70) within fifteen (15) days of the final order, DACS order Regency Insurance Company to pay three thousand dollars ($3,000) or such lesser sum as satisfies the requirements of Section 604.21(8), Florida Statutes (1989), for disbursal to petitioners. DONE and ENTERED this 19th day of April, 1991, in Tallahassee, Florida. ROBERT T. BENTON, II Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 19th day of April, 1991. COPIES FURNISHED TO: CHRISTOPHER B. PHILLIPS LANDSCAPE TECHNOLOGIES, INC. 523 LAKEVIEW ROAD CLEARWATER, FL 34616 REGENCY INSURANCE COMPANY POST OFFICE BOX 190 HALLANDALE, FL 33009-0190 CLINTON H. COULTER, JR., ESQUIRE DEPARTMENT OF AGRICULTURE AND CONSUMER SERVICES TALLAHASSEE, FL 32399-0800 J. COCHRAN & RUSSELL STRANGE C & S TREE FARM ROUTE 1, BOX 738 CHIEFLAND, FL 32626 HONORABLE BOB CRAWFORD COMMISSIONER OF AGRICULTURE DEPARTMENT OF AGRICULTURAL AND CONSUMER SERVICES THE CAPITOL, PL-10 TALLAHASSEE, FL 32399-0810 RICHARD TRITSCHLER, GENERAL COUNSEL DEPARTMENT OF AGRICULTURAL AND CONSUMER SERVICES 515 MAYO BUILDING TALLAHASSEE, FL 32399-0800
Findings Of Fact Based upon the testimony of the witnesses and the documentary evidence received at the hearing, the following findings of fact are made: In January, 1990, the Respondent filed an application for credit with the Petitioner. The terms and conditions of the credit application provided: "All written 'Terms and Conditions of Sale' on invoices, statements, contracts or other written agreements must be observed and performed as stated." Further, the application provided: Payment of all amounts due shall be made not later than 30 days from the billing date. Amounts in default will be subject to a SERVICE CHARGE of 1 1/2 % per month (18 % Per Annum) on the unpaid balance. Failure to make payment within terms will result in cancellation of credit. Following acceptance of that application, Respondent sought to purchase sod from Petitioner's LaBelle sod farm. Invoices issued by Petitioner to Respondent at the time of the delivery of the sod provided that the amounts owed would be payable upon receipt of invoice. Further, the printed invoice required the purchaser to make claims within 24 hours of delivery or pick up. The invoices reiterated the 18 percent service charge for past due accounts. From December, 1990, through January 17, 1991, Respondent purchased and accepted in excess of $45,000 worth of sod from the Petitioner. The invoices for those purchases are identified in this record as Petitioner's exhibit 2. From January 30, 1991 until March 4, 1991, Respondent purchased and accepted $4,664.00 worth of sod from the Petitioner. The invoices for those purchases are identified in the record as Petitioner's exhibit 3. In February, 1991, when the Petitioner became concerned about nonpayment for the amounts claimed, contact with the Respondent was made for the purpose of resolving the matter. When those efforts failed to secure payment, the Petitioner instituted action through the Department of Agriculture against the Respondent's bond. The Petitioner claimed $45,080.25 was due for the invoices prior to January 30, 1991. The Petitioner claimed $4,664.00 was owed for the invoices subsequent to January 30, 1991. Subsequent to its claims, Petitioner received payments from the Respondent in the following amounts: $5,000.00 on March 11, 1991; $5,000 on March 26, 1991; and $2,000.00 on April 30, 1991. Applying the total of those payments ($12,000) to the indebtedness on the first claim reduces that amount to $33,080.25. Prior to the claims being filed, Respondent had notified Petitioner that some sod deliveries had been unacceptable because of the quality of the sod or the amount. Respondent claimed the Petitioner had "shorted" the square footage amounts per pallet so that Respondent was being charged for a pallet that did not contain the requisite square footage of sod. On one occasion, in January, 1991, the Petitioner gave Respondent a credit in the amount of $1,173.75 for either refund on poor quality sod or a shortage. The Respondent continued to purchase sod from Petitioner until its credit was no longer accepted by Petitioner, i.e. March 4, 1991. Respondent did not, within 24 hours of receipt of sod, make a claim regarding the quality of the sod or the amount. By letter dated March 14, 1991, the Respondent, through its attorney, advised Petitioner as follows: St. Amour Sod Services, Inc., does not dispute the balance due to you as set forth in your letter and they will pay same in payments that are being determined now. For your information, the balance accrued because of the loss of several of our customers resulting from the poor quality of sod purchased from your firm. Respondent did not timely challenge the quality of the sod accepted, and did not present evidence regarding its alleged poor quality.
Recommendation Based on the foregoing, it is RECOMMENDED: That the Department of Agriculture and Consumer Services enter a final order finding that Respondent is indebted to Petitioner in the amounts of $33,080.25 and $4,664.00, with service charge to be computed through the date of the final order; directing Respondent to make payment of the amounts to Petitioner within 15 days following the issuance of the order; and, notifying all parties that if such payment is not timely made, the Department will seek recovery from Respondent's surety, Aetna Casualty and Surety Company. DONE and ENTERED this 13th day of March, 1992, in Tallahassee, Leon County, Florida. JOYOUS D. PARRISH Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32301 (904)488-9675 Filed with the Clerk of the Division of Administrative Hearings this 13th day of March, 1992. APPENDIX TO CASE NOS. 91-6388A AND 91-6389A RULINGS ON THE PROPOSED FINDINGS OF FACT SUBMITTED BY PETITIONER: 1. Paragraphs 1 through 4 are accepted. RULINGS ON THE PROPOSED FINDINGS OF FACT SUBMITTED BY RESPONDENT: Paragraph 1 is accepted. Paragraphs 2, 3, 4, 6, 7, and 8 are rejected as contrary to the weight of the credible evidence or unsupported by the record in this case. With regard to paragraph 5, that portion of the paragraph which states the amount of payments made by Respondent ($12,000) is accepted. Otherwise, rejected as stated in 2. above. COPIES FURNISHED: Barry L. Miller P.O. Box 1966 Orlando, FL 32802 Gary A. Ralph 2272 Airport Rd. South, Ste. 101 Naples, FL 33962 Hon. Bob Crawford Commissioner of Agriculture The Capitol, PL-10 Tallahassee, FL 32399-0810 Richard Tritschler General Counsel Dept. of Agriculture & Consumer Svcs. The Capitol, PL-10 Tallahassee, FL 32399-0810 Aetna Casualty & Surety Company Attn: Legal Dept. 151 Farmington Ave. Hartford, CT 06156
The Issue The issue is whether Respondent Southern Hay Sales Inc., (Southern Hay) and its surety, Respondent Old Republic Surety Company (Old Republic), are liable for funds due to Petitioner from the sale of agricultural products.
Findings Of Fact Petitioner is a producer of agricultural products as defined by Section 604.15(5), Florida Statutes. Petitioner produces hay on a farm owned by Petitioner near Jasper, Florida. Respondent Southern Hay is a dealer in agricultural products as defined by Section 604.15(1), Florida Statutes. Hay is a natural product of a farm and, therefore, an agricultural product as defined in Section 604.15(3), Florida Statutes. Old Republic is Southern Hay's surety. Both Petitioner and Southern Hay have participated in a business arrangement since at least 1997, whereby Petitioner grew and sold to Southern Hay varying quantities of hay. Petitioner would cut, process, and then store the hay in trailers provided by Southern Hay. Petitioner would deem Southern Hay to be indebted for a load of hay when a trailer of hay was hauled away by Southern Hay personnel. On January 16, 2002, Petitioner received a signed check from Southern Hay. While there is a dispute as to who filled out the check, resolution of that question is not relevant for purposes of this matter. Suffice it to say that Southern Hay's check number 1183 was written in the amount of $2,596.45 and dated January 16, 2002. Delivery of the check to Petitioner satisfied all outstanding invoices for payment where hay had been picked up, with the exception of Petitioner's invoice number 302 documenting an obligation to Petitioner from Southern Hay in the amount of $1,241.95 for hay. Southern Hay's representative maintained at final hearing that an additional check was issued on February 15, 2002, which included payment for invoice number 302. No cancelled check was presented to corroborate the testimony of Southern Hay's representative and such omission, coupled with the general demeanor of the representative, prevents the testimony of the representative, Andrew Snider, from being credited in this regard. Southern Hay and its surety, Old Republic, currently owes Petitioner for an unpaid invoice in the amount of $1,241.95.
Recommendation Based upon the findings of fact and conclusions of law, it is RECOMMENDED: That the Florida Department of Agriculture and Consumer Services enter a final order requiring Respondent Southern Hay Sales, Inc., or its surety, Respondent Old Republic Surety Company, to pay Petitioner for an unpaid invoice in the amount of $1,241.95. DONE AND ENTERED this 6th day of November, 2002, in Tallahassee, Leon County, Florida. _ DON W. DAVIS Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 6th day of November, 2002. COPIES FURNISHED: Brenda D. Hyatt, Bureau Chief Department of Agriculture 541 East Tennessee Street India Building Tallahassee, Florida 32308 Richard D. Tritschler, General Counsel Department of Agriculture The Capitol, Plaza Level 10 Tallahassee, Florida 32399-0810 Michael A. Jankowski Old Republic Surety Company Post Office Box 1635 Milwaukee, Wisconsin 53201 Sam Jones Jones Farm 6799 SR 6 West Jasper, Florida 32052 Stephen C. Bullock, Esquire 116 Northwest Columbia Avenue Lake City, Florida 32055
Findings Of Fact From before January 1, 1974, until the time of the final hearing in this matter, petitioner owned a DC-6 airplane, During the calendar year 1974, this airplane was leased to Surinam Air Cargo for approximately a half dozen flights. Petitioner's employees, Messrs. Goodman, Davis and Williams, crewed the airplane back and forth between Miami and Surinam, in accordance with the unwritten agreement between petitioner and Surinam Air Cargo. On some or all of these flights, petitioner transported its own goods as well as Surinam Air Cargo's. The parties stipulated that the purchases listed in schedule B attached to joint exhibit No. 1 were made for the flights back and forth to Surinam. In September of 1975, petitioner entered into agreements with Paul H. Jones & Co., Inc., to lease the DC-6 for approximately four flights, some of which were agreed upon orally; the others were the subject of written agreements. All of the agreements contemplated that petitioner would furnish the airplane crew and petitioner's employees, Messrs. Goodman, Davis and Wright, did in fact operate the DC-6 while it was leased to Paul H. Jones & Co., Inc. Miami International Hatcheries, Inc. (MIH) deals in hatching eggs. CWT Farms of Gainesville, Georgia, is a principal supplier of eggs to MIH and has been for some time. Until the fall of 1975, MIH regularly shipped eggs it received from CWT Farms to Kingston, Jamaica, using the facilities of Pan American Airways or Air Jamaica, which are common carriers. On October 13, 1975, however, petitioner entered into a contract with CWT Farms, which was evidenced by two writings, joint exhibits Nos. 2 and 3. Joint exhibit No. 2 sets up a "proposed flight schedule every Monday and Thursday," requires petitioner "to arrange and pay for cargo insurance" and specifies the manner and amount of CWT Farms' payment to petitioner; payments (covering "all operational costs") vary with the weight of the cargo and are "due and payable at the completion of each flight." Joint exhibit No. 4 is a writing evidencing an extension of the original agreement to a date beyond December 31, 1976. Joint exhibit 3 contains, inter alia, a provision which recites "that the person responsible for the operational control of this aircraft during the term of this lease shall be CWT Farms." The provisions of joint exhibits Nos. 3 and 4 notwithstanding, there was from the beginning a clear understanding between Mr. Goodman, on behalf of petitioner, and Raymond H. Burch, on behalf of CWT Farms, that petitioner would hire the crew and that it was petitioner's "responsibility to take care of the crew and to fly the plane." Petitioner's exhibit No. 5, p. 12. Petitioner's employees, ordinarily Messrs. Goodman, Davis and Wright, did in fact fly the DC-6 twice a week from Miami to Kingston, Jamaica, and back. These employees looked for payment of their salaries to petitioner rather than to CWT Farms or to any predecessor lessee. Occasionally, petitioner transported to Jamaica goods belonging to firms other than CWT Farms, but petitioner did not transport its own cargo on the flights to Jamaica. In aviation jargon, a dry lease is an agreement, analogous to a bareboat charter in maritime law, under which the lessee of aircraft undertakes to furnish the crew and gasoline, takes responsibility for maintenance and pays a pro-rata fee for engine time. A wet lease, in contrast, is an agreement under which the lessor furnishes the crew and gasoline and takes responsibility for maintenance; there is no provision for engine time and no penalty for a failed engine. The Federal Aviation Administration imposes more stringent safety regulations on wet lessors of aircraft than on dry lessors. In February of 1977, the Federal Aviation Administration began an investigation of petitioner which resulted in the filing of a complaint against petitioner and others on April 15, 1977, in the United States District Court for the Southern District of Florida. United States of America v. Kimex, Inc., et al., No. 77-1267-CIV-JE. This proceeding eventuated in a stipulation of dismissal in which petitioner agreed to a civil penalty (partially suspended) of thirty thousand dollars ($30,000.00) and admitted that, under the agreement with CWT Farms, it had "engaged in the carriage of property for compensation or hire in air commerce as a private carrier" and that the leases to CWT Farms "were 'wet leases'." During the period of the lease between petitioner and CWT Farms, MIH was normally in debt to CWT Farms because MIH did not pay in advance for the eggs it received from CWT Farms. At CWT Farms' behest, MIH paid petitioner moneys due petitioner from CWT Farms, in partial discharge of MIH's own obligations to CWT Farms. A practice developed under which MIH drew and delivered four checks to petitioner's employees before each flight, which, in the aggregate, constituted CWT Farms' payment to petitioner for the preceding flight. H. Goodman was the payee on one check, in the amount of one hundred seventy-five dollars ($175.00), C. Wright was the payee on one check in the amount of one hundred fifty dollars ($150.00), R. Davis was the payee on one check, in the amount of one hundred twenty-five dollars ($125.00). These checks also operated to discharge part of petitioner's salary obligations to these employees. Kimex, Inc. was the payee on the fourth check, the amount of which varied, depending on the weight of the cargo petitioner had transported on the previous flight. In calculating the amount of the fourth check, the amount CWT Farms owed petitioner was first computed, and four hundred fifty dollars ($450.00) was then subtracted. Before each flight, MIH delivered eggs in cases, which weighed fifty-two (52) pounds each, to a freight loading company at Miami International Airport. Because MIH kept track of the number of cases it delivered, it was a simple matter to compute CWT Farms' obligation to petitioner, as specified in the lease, viz., "16 per pound for the minimum weight of 26,000 pounds to 30,000 pounds and 15 per pound from 30,001 pounds to 32,000 pounds." Joint exhibit 2. From this figure was subtracted the sum of the checks drawn in favor of petitioner's employees. This procedure obtained until some time after December 31, 1976. By the time of the hearing, however, petitioner's employees were paid with weekly pay checks which petitioner itself drew in their favor; and petitioner received lease payment checks which were not reduced by four hundred fifty dollars ($450.00). Before the change to the practice in effect at the time of the hearing, MIH caused Internal Revenue Service Forms 1099 to be prepared to reflect the total MIH payments to petitioner's employees for each year involved. Petitioner prepared W-2 Forms to reflect the salary moneys it paid to its employees directly for each year involved.
Recommendation Upon consideration of the foregoing, it is RECOMMENDED: That respondent reduce its proposed assessment to four percent of the total dollar cost of the items listed on schedule B attached to the notice of proposed assessment, together with applicable penalties and interest, if any. DONE and ENTERED this 22nd day of December, 1977, in Tallahassee, Florida. ROBERT T. BENTON, II Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675 APPENDIX Paragraphs one, two, four through thirteen, fifteen and sixteen of petitioner's proposed findings of fact have been adopted, in substance. Paragraph three of petitioner's proposed findings of fact recites that petitioner's lease to Jones & Co. was oral whereas the evidence was that the agreements with Jones & Co. with respect to some of the flights were reduced to writing. Paragraph fourteen of petitioner's proposed findings of fact has been adopted, in substance, assuming that "direction or control" is intended to mean responsibility or authority for navigation of the aircraft. Paragraph one of respondent's proposed findings of fact has been rejected as unsupported by or contrary to the evidence. Petitioner employs Messrs. Goodman, Davis and Wright, Miss Goodman and several mechanics. Mr. Goodman, Mr. Davis and Miss Goodman are petitioner's corporate officers. Petitioner's stockholders are Mr. Davis, Mr. and Mrs. Goodman. The evidence did not establish who petitioner's directors are. Although the evidence showed that petitioner owned a DC-6 airplane based in Miami, it was not proven that petitioner had no other assets. Paragraph two of respondent's proposed findings of fact has been adopted in substance, insofar as relevant, except that there was no evidence that petitioner was exporting its own goods on the flights made pursuant to its agreements with Paul H. Jones & Co. Paragraphs three, four, five and six of respondent's proposed findings of fact have been adopted in substance, insofar as relevant. The final paragraph of respondent's proposed findings of fact lacks support in the evidence. For a given flight, CWT Farms would owe petitioner at least the agreed price for shipping 26,000 pounds of eggs, regardless of how few eggs were in fact shipped. On a given flight, CWT Farms could ship up to 32,000 pounds, but, if CWT Farms shipped less, petitioner sometimes transported eggs for other firms. The semiweekly flight schedule was set by mutual agreement between petitioner and CWT Farms. COPIES FURNISHED: Mr. Norman S. Segall, Esquire Suite 607, 100 Biscayne Tower 100 North Biscayne Boulevard Miami, Florida 33132 Mr. Michael A. Rubin, Esquire Suite 4-B 420 South Dixie Highway Coral Gables, Florida 33146 Mr. Edwin J. Stacker, Esquire Assistant Attorney General The Capitol Tallahassee, Florida 32304
The Issue The issue is whether Boyer Produce, Inc. and its surety, Southern Farm Bureau Casualty Insurance Company, owe petitioner $1,751.80 as alleged in the complaint.
Findings Of Fact Based upon all of the evidence, the following findings of fact are determined: In July 1993, petitioner, Patricia Thomas, was given authority by her brother to sell all remaining watermelons on his farm located in Citra, Florida. This amounted to approximately one truckload. She eventually sold them to respondent, Boyer Produce, Inc., a dealer (broker) in agricultural products located in Williston, Florida. Its owner and president is Kennedy Boyer (Boyer), who represented his firm in this proceeding. As an agricultural dealer, respondent is required to obtain a license from and post a surety bond with the Department of Agriculture and Consumer Services (Department). In this case, the bond has been posted by respondent, Southern Farm Bureau Casualty Insurance Company, and is in the amount of $75,000.00. Although the parties had never had business dealings before this transaction, through a mutual acquaintance, Randy Rowe, respondent learned that petitioner was interested in selling her watermelons. After Boyer visited the field and examined three watermelons which he described as "good," Boyer offered to purchase a truckload for 4 per pound if all melons were of the same quality. Thomas declined and counteroffered with a price of 5 per pound. The parties then agreed to split the difference and arrived at a sales price of 4 per pound. During the negotiations, Rowe acted as an intermediary between the parties and observed the formation of the contract as well as the loading of the goods onto the truck. Although the matter is in dispute, it is found that both parties agreed that Thomas would be paid 4 per pound for "good" watermelons delivered. This meant that petitioner would not be paid unless and until the watermelons were delivered to their final destination in "good" condition. In the trade, being in "good condition" meant that the watermelons would meet U. S. Grade No. 1 standards. Respondent also agreed to provide a truck and driver at petitioner's field and to transport the produce to Brooklyn, New York, the final destination. At the same time, petitioner was given the responsibility of loading the watermelons on the truck. To assist petitioner in meeting her up- front labor costs, respondent advanced $500.00 as partial payment for the shipment. Winston Smith was hired by respondent to transport the melons to New York. He arrived at petitioner's field on Saturday, July 16, 1993, and remained there while approximately 46,000 pounds of melons were loaded on an open top flat bed trailer. One of the loaders said the melons were "packed real tight," and four bales of straw were used in packing. According to Rowe, who observed the loading, the watermelons packed that day were in "good" condition, and any nonconforming watermelons were "kicked" off the truck. Also, by way of admission, the driver, as agent for Boyer, acknowledged to Rowe that the melons loaded were in "good" condition. Late that afternoon, a thunderstorm came through the area and, due to lightening, no further loading could be performed. Since around 46,000 pounds had already been loaded, petitioner desired for the truck to be sent on its way north. Smith, however, told petitioner he wanted 50,000 pounds in order to make his trip to New York worthwhile and he would not go with anything less. Acceding to his wishes, petitioner agreed to meet Smith the next morning and load an additional two hundred watermelons, or 4,000 pounds, on the truck. Smith then drove the loaded truck to a nearby motel where he spent the night. That evening it rained, and this resulted in the uncovered watermelons and straw getting wet. The next morning, Smith telephoned petitioner and advised her to meet him at 9:00 a. m. at a local Starvin' Marvin store, which had a weight scale that could certify the weight of the shipment. Petitioner carried two hundred watermelons to the store at 9:00 a. m., but Smith did not arrive. Around noon, she received a call from Smith advising that his truck was broken down at the motel and would not start. The watermelons were then taken to the motel and loaded onto the trailer. In all, 50,040 pounds were loaded. Smith's truck would still not start after the watermelons were loaded, and Smith refused to spend any money out of his own pocket to repair the truck. Not wanting to delay the shipment any longer, petitioner gave Smith $35.00 to have someone assist him in starting the vehicle. In order for the repairs to be made, the loaded trailer had to be jacked up and the truck unhooked from and later rehooked to the trailer. This was accomplished only with great difficulty, and Smith was forced to "jostle" the trailer with the power unit for some two hours altogether. According to Rowe, he warned Smith that such jostling could bruise the melons and "mess them up." Smith was also cautioned early on that he should make the necessary repairs as soon as possible so that the load of watermelons would not continue to sit uncovered in the sun. The truck eventually departed around 9:00 p. m., Sunday evening after the uncovered trailer had sat in the sun all day. The shipment was delivered to Brooklyn on the following Tuesday afternoon or evening, and it was inspected by a government inspector on Wednesday morning. According to the inspection report, which has been received in evidence, the load was split evenly between crimson and jubilee melons, and 23 percent and 21 percent, respectively, of the two types of melons failed to meet grade. No greater than a 12 percent "margin" is allowed on government inspections. Almost all of the defects cited in the report were attributable to the melons being "over-ripe." The buyer in New York rejected the entire shipment as not meeting standards. Respondent then sold the shipment for only $1350.00 resulting in a loss of $350.00 on the transaction. In addition, respondent says the driver (Smith) accepted $1200.00 instead of the $2,000.00 he would have normally charged to transport a load to New York. When petitioner asked for her money a few weeks later, respondent declined, saying the goods had not met specification when delivered to their destination, and if she had any remedy at all, it was against Smith, the driver. If petitioner had been paid 4 per pound for the entire shipment, she would have been entitled to an additional $1,751.80, or a total of $2,251.80. Petitioner contends that the melons failed to meet grade because of the negligence of the driver. More specifically, she says the loaded melons sat in the sun for almost two days, including all day Sunday after being soaked from the Saturday evening rain. If wet melons are exposed to the hot sun for any length of time, they run the risk of "wet burning," which causes decay. But even if this occurred, only 1 percent of the shipment was found to have "decay" by the government inspector. Petitioner also says that by being jostled for two hours on Sunday, the melons were bruised. Again, however, the melons were rejected primarily because they were over-ripe, not bruised. Therefore, and consistent with the findings in the inspection report, it is found that the jostling and wet burning did not have a material impact on the quality of the melons. Respondent contended the melons were close to being fully ripened when they were picked and loaded. In this regard, Charles Strange, Sr. agreed that if the melons sat in the field for another four or five days, they would have started "going bad." By this, it may be reasonably inferred that, unless the melons were loaded and delivered in a timely manner, they would have become over-ripe and would not meet grade within a matter of days. Therefore, a timely delivery of the melons was extremely important, and to the extent respondent's agent, Smith, experienced at least a twenty-four hour delay in delivering the melons through no fault of petitioner, this contributed in part to their failure to meet grade. Petitioner is accordingly entitled to some additional compensation, a fair allocation of which is one-half of the value of the shipment, or $1125.90, less the $500.00 already paid.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that a final order be entered by the Department of Agriculture and Consumer Services requiring respondent to pay petitioner $625.90 within thirty days from date of the agency's final order. In the event such payment is not timely made, the surety should be liable for such payment. DONE AND ENTERED this 2nd day of December, 1993, in Tallahassee, Florida. DONALD R. ALEXANDER Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 2nd day of December, 1993. COPIES FURNISHED: Honorable Bob Crawford Commissioner of Agriculture The Capitol, PL-10 Tallahassee, Florida 32399-0810 Brenda D. Hyatt, Chief Bureau of Licensing & Bond 508 Mayo Building Tallahassee, Florida 32399-0800 Richard A. Tritschler, Esquire The Capitol, PL-10 Tallahassee, Florida 32399-0810 Southern Farm Bureau Casualty Insurance Company Post Office Box 1985 Jackson, Mississippi 39215-1985 Patricia Thomas Post Office Box 522 Archer, Florida 32618 Kennedy Boyer 15A South West 2nd Avenue Williston, Florida 32696
The Issue The issue in this case is whether Respondents owe Petitioner $13,512.09 for watermelons, as alleged in the Amended Complaint.
Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the hearing, the following relevant findings of fact are made. Cook Brown Farms is a melon farm in Punta Gorda, Florida. At all times pertinent to this proceeding, Cook Brown Farms was a "producer" as defined in Subsection 604.15(5), Florida Statutes, of agricultural products in the State of Florida. Melons come within the definition of "agricultural products" as defined in Subsection 604.15(3), Florida Statutes. J.G.L. Produce is a Florida Corporation, owned by John W. Johnson, Jr., and located in Pompano Beach, Florida. At times pertinent to this proceeding, J.G.L. Produce was licensed as a "dealer in agricultural products" as defined in Subsection 604.15(1), Florida Statutes. Andrew J. Cook, a principal owner of Cook Brown Farms, and Mr. Johnson of J.G.L. Produce entered into an oral agreement regarding the sale of watermelons grown at Cook Brown Farms. The core of this case is a dispute concerning the nature of this agreement. Mr. Cook testified that, under the agreement, J.G.L. Produce would purchase the melons at the farm at their daily market price, plus 1/2 cent to cover Cook Brown Farms' cost of picking, sorting, and placing the melons in special bins and in special pallets required by the ultimate purchaser, Kroger Supermarkets. J.G.L. Produce would provide the bins and pallets and would provide the trucks to ship the melons. Mr. Johnson testified that the agreement was not for purchase but for brokerage of the melons. J.G.L. Produce would act as broker of Cook Brown Farms' watermelons, use its best efforts to sell the melons at the highest price available, and pay Cook Brown Farms the proceeds of the sale, minus expenses and a brokerage fee of one cent per pound. Mr. Johnson testified that J.G.L. Produce never took title to or purchased the melons, and that the risk of loss always remained on Cook Brown Farms. Mr. Johnson testified that he approached Mr. Cook about the melons because he had a ready buyer in another local dealer, Delk Produce, which had a longstanding arrangement to provide melons to Kroger. Mr. Johnson agreed with Mr. Cook that the arrangement included the provision of bins and pallets by J.G.L. Produce, though Mr. Johnson stated that the arrangement also called for J.G.L. Produce to retain $0.015 per pound from the amount paid to Cook Brown Farms to cover the cost of the bins and pallets. J.G.L. Produce took approximately 24 truck loads of watermelons from Cook Brown Farms. J.G.L. Produce deducted a one cent per pound brokerage fee from each load of melons it took, except for certain loads noted below, without contemporaneous objection from Cook Brown Farms. The Amended Complaint claims that J.G.L. Produce owes money to Cook Brown Farms for five of the loads taken by J.G.L. Produce. In sum, the Amended Complaint states that J.G.L. Produce owes Cook Brown Farms $19,991.74 for the five loads, less $6,479.65 already paid, for a total owing of $13,512.09. Item One of the Amended Complaint alleges that J.G.L. Produce owes $4,438.54 for a load of 38,596 pounds at a price of $0.115 per pound, sold on April 20, 2000. Item Two of the Amended Complaint alleges that J.G.L. Produce owes $4,625.30 for a load of 40,220 pounds at a price of $0.115 per pound, sold on April 21, 2000. The Amended Complaint alleges that the melons on these two loads were inspected and approved for shipment during loading by Delk Produce employee Freddie Ellis. The Amended Complaint states that Cook Brown Farms was paid in full for the loads on May 3, 2000, but that the contested amounts were deducted from subsequent settlements by J.G.L. Produce. The evidence established that the melons claimed under Item One were initially sold to Delk Produce for delivery to Kroger. On May 3, 2000, J.G.L. Produce paid Cook Brown Farms the amount of $4,438.54, which constituted the price for 38,596 pounds of melons at $0.125 per pound, less $385.96 for the one cent per pound brokerage fee. Jay Delk, the principal of Delk Produce, testified that this load was rejected by Kroger's buyer in Virginia due to "freshness," meaning that the melons were unsuitably green. Mr. Delk stated that the melons were taken to North Carolina to ripen and eventually sold at $0.06 per pound. The final return on this load, less the brokerage fee, was $1,543.84. In its final settlement with Cook Brown Farms on May 26, 2000, J.G.L. Produce deducted the difference between the original payment of $4,438.54 and the final payment of $1,543.84. The evidence established that the melons claimed under Item Two were initially sold to Delk Produce. On May 3, 2000, J.G.L. Produce paid Cook Brown Farms the amount of $5,809.80, which constituted the price for 50,520 pounds of watermelons at $0.125 per pound, less $505.20 for the one cent per pound brokerage fee. Seminole Produce purchased 10,300 pounds of this load at $0.145 per pound, or $1,493.50. The remainder of the load was rejected by Kroger due to freshness and had to be resold at a lesser price of $0.0346 per pound, or $1,391.00. In its final settlement with Cook Brown Farms on May 26, 2000, J.G.L. Produce deducted the difference between the original payment of $5,809.80 and the final payment (after deduction of the brokerage fee) of $2,576.11. The evidence established that the melons claimed under Item Three were sold to Delk Produce. On May 9, 2000, J.G.L. Produce paid Cook Brown Farms the amount of $2,731.30, which constituted the price for 42,020 pounds of watermelons at $0.0675 per pound, less $105.05 for the brokerage fee, reduced to $0.0025 per pound. Mr. Johnson testified that he decided to forego the full brokerage fee to save money for Mr. Cook and his farm, because it was "hurting" due to the rapidly plummeting price for watermelons. Mr. Johnson discovered at this time that Delk Produce had not been retaining the agreed- upon $0.015 per pound to cover the cost of bins and pallets and decided not to lose any more money on that item. In its final settlement with Cook Brown Farms on May 26, 2000, J.G.L. Produce deducted the difference between the original payment of $2,731.30 and $2,206.05, deducting $525.25 from the original payment to cover the cost of the bins and pallets. The evidence established that the melons claimed under Items Four and Five were originally shipped to Wal-Mart in Kentucky on April 29, 2000, and were rejected on the ground that the melons were not packed to specifications. The melons were trucked back to Florida at J.G.L. Produce's expense. The melons claimed under Item Four totaled 41,100 pounds. J.G.L. Produce divided the melons into four loads and sold them to four local dealers at an average price of $0.775 per pound, totaling $3,185.41. J.G.L. Produce deducted its $0.015 charge for bins and pallets, reducing the total to $2,671.51. J.G.L. Produce then deducted $1,750.00 from the total as reimbursement for the freight charge it paid to bring the melons back to Florida after their rejection by Wal-Mart. J.G.L. Produce did not include a brokerage fee. On May 26, 2000, J.G.L. Produce paid the remaining $921.51 to Cook Brown Farms as part of the final settlement. The melons claimed under Item Five totaled 45,600 pounds. J.G.L. Produce sold 2,426 pounds to Seminole Produce at $0.10 per pound, or $242.60. J.G.L. Produce sold the remaining 43,174 pounds to Belle Glade Produce at $0.065 per pound, or $2,800. From the total for Item Five, J.G.L. Produce deducted its $0.015 charge for bins and pallets and $1,950.00 for the freight charge it paid to bring the melons back to Florida after their rejection by Wal-Mart. J.G.L. Produce did not include a brokerage fee on this load of melons. On May 26, 2000, J.G.L. Produce paid the remaining $416.64 to Cook Brown Farms as part of the final settlement. The weight of the credible evidence, excluding the hearsay that was not supported by the direct testimony of Mr. Johnson, leads to the finding that there was a brokerage arrangement between the parties. J.G.L. Produce routinely deducted brokerage fees from its payments, without objection by Cook Brown Farms. This course of dealing strongly indicates a brokerage arrangement. Mr. Cook testified as to prior dealings with J.G.L. Produce, which also involved a brokerage arrangement. The evidence indicated that J.G.L. Produce fully accounted for the five loads of melons at issue, and paid Cook Brown Farms the full amounts due and owing for those loads.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Department of Agriculture and Consumer Services enter a final order dismissing the Amended Complaint filed by Gin Brown Matthews, d/b/a Cook Brown Farms. DONE AND ENTERED this 21st day of March, 2001, in Tallahassee, Leon County, Florida. ___________________________________ LAWRENCE P. STEVENSON Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6947 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 21st day of March, 2001. COPIES FURNISHED: Redland Insurance Company 222 South 15th Street, Suite 600, North Omaha, Nebraska 65102 Brenda D. Hyatt, Bureau Chief Department of Agriculture and Consumer Services Mayo Building, Room 508 Tallahassee, Florida 32399-0800 John W. Johnson, President Post Office Box 1123 Pompano Beach, Florida 33061 Harold M. Stevens, Esquire Post Office Drawer 1440 Fort Myers, Florida 33902 Edward L. Myrick, Jr., Esquire Beighley & Myrick, P.A. 1255 West Atlantic Boulevard Suite F-2 Pompano Beach, Florida 33069 Richard D. Tritschler, General Counsel Department of Agriculture and Consumer Services The Capitol, Plaza Level 10 Tallahassee, Florida 32399-0810 Honorable Terry L. Rhodes Commissioner of Agriculture Department of Agriculture and Consumer Services The Capitol, Plaza Level 10 Tallahassee, Florida 32399-0810
Findings Of Fact Based upon all of the evidence, including the stipulation of the parties, the following findings of fact are determined: Petitioner, Charles W. Ward, Jr., is a co-owner, with other members of his family, of a cattle ranch in south Hendry County known as Ward Farms. Respondent, Maddox Brothers Produce, Inc., is a licensed agriculture dealer engaged in the business of brokering agriculture products in the State of Florida. As an agriculture dealer, respondent is subject to the regulatory jurisdiction of the Department of Agriculture and Consumer Services (Department). One such requirement of the Department is that all dealers post a surety bond with the Department's Division of Licensing and Bond. To this end, respondent has posted a $50,000 surety bond with Fireman's Fund Insurance Company as the surety. In addition to raising livestock, petitioner also grows watermelons on his property. Pursuant to an agreement by the parties, between April 16 and May 15, 1990, respondent harvested and then transported petitioner's watermelons to other destinations outside the state. The parties have stipulated that respondent still owes petitioner $53,980.92 as payment for the watermelons. Respondent has agreed to pay petitioner the above sum of money on or before February 15, 1991, or within fifteen days after the agency's order becomes final, whichever is later. Otherwise, payment shall be made from respondent's bond posted by the surety, Fireman's Fund Insurance Company.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that a final order be entered finding that respondent, a licensed agriculture dealer, is indebted to petitioner in the amount of $53,980.92, and that such debt be satisfied in accordance with the time limitations set forth in this recommended order. Otherwise, Fireman's Fund Insurance Company shall be obligated to pay over to the Department the full amount of the bond, or $50,000. DONE and ENTERED this 24th day of January, 1991, in Tallahassee, Leon County, Florida. DONALD R. ALEXANDER 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 24th day of January, 1991. COPIES FURNISHED: Charles W. Ward, Jr. Star Route, Box 72 LaBelle, Florida 33440 Patricia Maddox Harper 4253 Kingston Pike Knoxville, Tennessee 37919 Barbara J. Kennedy, Esquire Fireman's Fund Insurance Company Post Office Box 193136 San Francisco, California 94119-3136 Bob Crawford Commissioner of Agriculture The Capitol Tallahassee, Florida 32399-0810 Richard D. Tritschler, Esquire General Counsel Department of Agriculture 515 Mayo Building Tallahassee, Florida 32399-0800 Brenda D. Hyatt, Chief Bureau of Licensing & Bond 508 Mayo Building Tallahassee, Florida 32399-0800
Conclusions THIS CAUSE, arising under Florida’s “Agricultural License and Bond Law” (Sections 604.15-604.34), Florida Statutes, came before the Commissioner of Agriculture of the State of Florida for consideration and final agency action. On October 21, 2008, the Petitioner, Ricky A. Branch, III, a producer of agricultural products as defined by Section 604.15(9), Florida Statutes, timely filed an administrative claim pursuant to Section 604.21, Florida Statutes, to collect $31,296.18 for eggplants they sold to Respondent, a licensed dealer in agricultural products. Respondent’s license for the time in question was supported by a surety bond required by Section 604.20, Florida Statutes, written by Fidelity and Deposit Company of Maryland in the amount of $100,000. On January 7, 2009, a Notice of Filing of ‘an Amended Claim was mailed to Respondent and Co-Respondent. On January 27, 2009, the Respondent filed an ANSWER OF RESPONDENT with attachments wherein they denied the claim as being valid, admitted no indebtedness and requested a hearing. Therefore, this matter was referred to the Division of Administrative Hearings (DOAH) for an administrative hearing in accordance with the provisions of Section 120.57(1), Florida Statutes. An administrative hearing was scheduled in this matter for April 17, 2009. Attached to the NOTICE OF HEARING was an ORDER OF PRE-HEARING INSTRUCTIONS with instructions for the parties to follow prior to and at the hearing. On March 30, 2009, the Respondent filed a ' MOTION TO CONTINUE FINAL HEARING. The Administrative Law Judge (“Judge”) issued an ORDER GRANTING CONTINUANCE (“Order”) on April 3, 2009. In the Judge’s Order, he asked the parties to confer and advise him on the status of the matter among other things. An ORDER RE-SCHEDULING. HEARING was issued on April 16, 2009 and a new hearing date was set for June 9, 2009. Prior to the hearing, on June 5, 2009, the Respondent filed a RESPONDENT’S MOTION TO DISMISS claiming their efforts to contact the Claimant have been futile. Additionally, Respondent asserts that Claimant failed to comply with the ORDER GRANTING CONTINUANCE, the ORDER RE-SCHEDULING HEARING and the ORDER OF PRE-HEARING INSTRUCTIONS issued by DOAH. For the aforesaid reasons, the Respondent feels the Claimant’s claim should be denied and the claim dismissed with prejudice. On June 16, 2009, the Judge issued a RECOMMENDED ORDER OF DISMISSAL, a copy of which is attached hereto as EXHIBIT “A”, to which neither party filed written exceptions with this Department. . Upon the consideration of the foregoing and being otherwise fully advised in the premises, it is ORDERED: Based on the fact that the Claimant failed to appear at the final hearing with DOAH on June 9, 2009 and failed to meet his burden of proof in presenting evidence in support of his claim, the Department adopts the Judge’s RECOMMENDED ORDER OF DISMISSAL. The Department hereby dismisses the captioned claim and the file is closed without further action. Any party to these proceedings adversely affected by this Final Order is entitled to seek review of this Final Order pursuant to Section 120.68, Florida Statutes (2002) and Rule 9.110, Florida Rules of Appellate Procedure (2003). Review proceedings must be instituted by filing a petition or notice of appeal with the Agency Clerk, 5" Floor, Mayo Building, Tallahassee, FL 32399-0800. A copy of the petition for review or notice of appeal, accompanied by the filing fees prescribed by law must also be filed with the appropriate District Court of Appeal within thirty (30) days of the date this Final Ondet yas filed with the Agency Clerk. DONE AND ORDERED this77_ day of , 2009. ES H. BRONSON TERRY/L. RHODES Assi Commissioner of Agriculture Ke Filed with Agency Clerk this? _ day of , 2009. (pL Vb AM Agency Clerk COPIES FURNISHED TO: Judge Daniel Manry Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (Certified Receipt No. 7160 3901 9848 2604 4626) Mr. Gary Wishnatzki, Registered Agent Wishnatzki, Inc., d/b/a Wishnatzki Farms 100 Stearn Avenue Plant City, FL 33566 (Certified Receipt No. 7160 3901 9848 2605 1259) Mr. Ricky A. Branch, IIT Post Office Box 42 Webster, FL 33597 (Certified Receipt No. 7160 3901 9848 2605 1266) Ms. Kathy Alves, Claims Specialist Fidelity & Deposit Company of Maryland Post Office Box 87 , Baltimore, MD 21203-0087 (Certified Receipt No. 7160 3901 9848 2605 1273) (Claim No. 6380046897) Thomas F. Munro, Esquire FOLEY & LARDNER LLP 100 North Tampa Street, Suite 2700 Tampa, FL 33602 (Certified Receipt No. 7160 3901 9848 2605 1280) . Mr. Bedford Wilder General Counsel Staff Mayo Building, M-11 Tallahassee, Florida 32399-0800 Ms. Stephenie Butscher and Mr. Mark Moritz, Field Representatives
Findings Of Fact Based upon my observation of the witnesses and their demeanor while testifying, documentary evidence received and the entire record compiled herein, I make the following relevant factual findings: Respondent, William R. Daniels, has been a farm labor contractor since 1949. Respondent retained the services of Edward J. Smith to assist him in fruit harvesting activities during the 1987 season. On February 18, 1988, Tommy L. Sumpter, a Compliance Officer employed by Petitioner, performed a compliance check on fruit harvesting activities located off 66th Avenue in Vero Beach, Florida. The compliance check by Sumpter revealed, that Edward J. Smith was supervising citrus workers on behalf of Respondent. Smith transported workers to the citrus field in Vero Beach in van owned by Respondent. Smith displayed his Federal Certificate of Registration which was valid through December 1988. Smith displayed his State Certificate which expired in December 1987. A confirmation check of Smith's Florida Certificate of Registration reveals that his certificate, in fact, expired on December 31, 1987. Smith registered at the Petitioner's Fort Pierce Job Service Office on February 23, 1988. Mr. Smith was cited for failing to register as required by section 450.30, Florida Statutes. Respondent submitted a verification of employment form which indicates that Smith was employed by him on October 15, 1987, and was paid $75.00 minus social security contributions, per truck load of citrus harvested by Smith's workers. By letter dated May 3, 1988, Respondent was issued the subject Administrative Complaint and notified that a civil money penalty was being assessed against him in the amount of $500.00 on the basis that he contracted for the employment of farm workers with a farm labor contractor before that contractor displayed a current certificate of registration issued by Petitioner. When Respondent retained the services of Smith, as a farm labor contractor, Smith's Florida Certificate of Registration was expired and he therefore could not have displayed a current certificate of registration to Respondent before he was employed.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that: Petitioner enter a final order imposing a $500.00 civil penalty against Respondent payable within thirty days of the issuance of its final order, for contracting for the employment of farmworkers with a farm labor contractor before the farm labor contractor displayed to him a current certificate of registration issued by Petitioner. DONE and ORDERED this 19th day of January, 1989, in Tallahassee, Florida. JAMES E. BRADWELL Hearing Officer Division of Administrative Hearings The Oakland Building 2900 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 19th day of January, 1989. COPIES FURNISHED: Moses E. Williams, Esquire Department of Labor and Employment Security Suite 117, Montgomery Building 590 Executive Center Circle East Tallahassee, Florida 32399-2152 William R. Daniel 227 Sterrett Circle Port St. Lucie, Florida 33395 Hugo Menendez, Secretary Department of Labor and Employment Security 206 Berkeley Building 2590 Executive Center Circle, East Tallahassee, Florida 32399-2152 Kenneth Hart General Counsel Department of Labor and Employment Security 131 Montgomery Building 2562 Executive Center Circle, East Tallahassee, Florida 32399-2152
The Issue Whether the Respondent's real estate license should be disciplined based upon the charge that the Respondent is guilty of fraud, misrepresentation, concealment, false promises, false pretenses, dishonest dealing by trick, scheme or device, culpable negligence or breach of trust in a business transaction in violation of Subsection 475.25(1)(b) F.S.
Findings Of Fact Petitioner is the state licensing and regulatory agency charged with the responsibility and duty to prosecute administrative complaints pursuant to Section 20.30 and Chapters 120, 455, and 475, F.S. and the rules promulgated pursuant thereto. At all times pertinent to the charges, Respondent was a licensed Florida real estate broker, having been issued license numbers 0186971 and 0251278 in accordance with Chapter 475, F.S. The last license issued to Respondent was as a broker c/o C P James Property Management, Inc., 871 Cassat Avenue, Jacksonville, Florida 32205-4856 and at Creative Consultant Service, 1301 Gulf Life Drive, 213, Jacksonville, Florida 32207. Appraising is an element of the practice of real estate in Florida, according to the unrefuted witnesses, Carl E. Moody and Crawford Richardson, both of whom are licensed realtors. In 1985-1986, the Respondent was retained by the Florida National Bank (FNB), 103rd Street Branch, Jacksonville, Florida, to prepare appraisals of certain properties for second mortgage loans. The Respondent knew or should have known that these appraisals would be used by FNB for the purpose of allowing individuals to use the properties as security for mortgage loans. FNB relied on the appraisals submitted by the Respondent in making mortgage loans secured by the properties Respondent had appraised. Among the appraisals performed by Respondent was one upon the property located at 6053 John F. Kennedy Drive North, Jacksonville, Florida. The property was supposedly under contract for sale between Robb Ortega as buyer, and Ray and Beverly H. Davis, as sellers. According to the unrefuted testimony of Waddell Wallace and Crawford Richardson, "Robb Ortega" was a fictional name utilized by Russell Parker. The property's legal description is "Lot Five, Block Six, Washington Lake Estates, Plat Book 34 pg. 62, 62A and 62B Public Records of Duval County, Florida." The Respondent's appraisal as submitted to FNB estimated the market value of this property as of December 27, 1985 to be $65,000. The Respondent's appraisal report reflecting a market value of $65,000 was utilized and resulted in FNB making a second mortgage loan to Ortega/Parker for $43,500 when there was already a first mortgage of $12,000 on the property. When the mortgage loan on the John F. Kennedy Drive property and a number of other mortgage loans written by FNB's employee, Charles Young, were defaulted upon, FNB executives mounted an investigation. On June 25, 1987, FNB employed the appraisal firm of Broom, Moody, and Johnson (Moody) to appraise the Kennedy Drive property, described supra. Carl Moody, Petitioner's expert appraisal witness, estimated the market value of the property as of December 1985 to be $44,000, which was $21,000 less than Respondent's appraisal of $65,000. Upon the testimony of Mr. Moody, whose education, training, and experience in the field of real estate appraisal is impressive, and upon the testimony of Crawford Richardson, who has personal knowledge of the Respondent's qualifications, education, training, and experience in real estate appraisal, the inference is here made that Respondent intentionally and deliberately deviated from standard and accepted practices of appraising real estate in order to create an appraisal value that the Respondent knew to be inflated. It is further found that Respondent, whom witness Richardson described as "knowledgeable," did fraudulently prepare his appraisal with the intention of inducing FNB to rely on the market value represented therein in determining whether to make its mortgage loan to Ortega/Parker secured by the appraised property. Upon the testimony of Wallace and Richardson, the predicate for which went unchallenged, and upon the exhibits identified by and testimony of Beverly Davis, it is found that purchaser and mortgagor Ortega/Parker thus secured money from FNB to which he was not entitled. His fictitious name was utilized to facilitate a scheme to defraud FNB, and the transaction was successful because Charles Young, a FNB mortgage loan officer, willingly participated in the fraud and made the second mortgage check payable to the real estate firm handling the transaction on behalf of the fictitious mortgagor. The Respondent also appraised property located at 2601 Sandra Drive, Jacksonville, Florida, the legal description of which is "Pt. of Lot 1, Isabell Pickett's D/D P.B. 16 Pg. 32." The Respondent estimated the market value of the Sandra Drive property to be $44,000 as of April 22, 1986. The Sandra Drive mortgage also "went bad" from the bank's perspective, so FNB subsequently contracted with Moody to retroactively appraise that property as well. Moody estimated the market value of the property to be $18,500 as of April 1986. His testimony and that of Crawford Richardson is persuasive that Respondent also intentionally and deliberately deviated from accepted practices of appraising in the course of Respondent's appraisal of this property. Only in Paragraph 17 of Count III of the Administrative Complaint, which Count addresses Respondent's appraisal and the subsequent mortgage loan on the Sandra Drive property has Petitioner alleged details of a knowing and active participation of Respondent in the Ortega/Parker and Young scheme or conspiracy. The exhibit pertaining to that property (P-7) does not show Robb/Ortega as the borrower on that transaction with FNB. The borrower on that transaction was apparently one "John Cash." Burden Realty, which was the payee on the FNB check in the John F. Kennedy Drive transaction likewise does not seem to be connected to the Sandra Drive transaction. Also, it is clear on the face of Wallace and Richardson's testimony that these allegations are based upon hearsay statements made by one Mark Brown to Wallace and Richardson and possibly others. Mr. Brown allegedly overheard and repeated conversations between Young and Respondent to the effect that the Respondent had received an extra appraisal fee from Young, over and above the usual and reported fee paid him by FNB and that Young paid the additional appraisal fee in return for Respondent's inflating his appraisal. Neither Respondent, Young, nor Brown testified, and Brown's statements are thus double hearsay and insufficient to establish their contents as fact, despite the latitude of Section 120.58(1) F.S. For the foregoing reasons, Respondent's status as a co-conspirator in the others' scheme to defraud has not been proven. Among Respondent's deviations from standard and accepted practices of appraising real estate with regard to the Kennedy Drive and Sandra Drive properties was Respondent's selection of "comparable" sales from wildly inappropriate neighborhoods so as to maximize the mortgage loan potential when there were sales within each home's respective area by which a true market value could be established. On the Kennedy Drive house, Respondent's cost approach improperly deviated from the national cost guide known as Marshall & Swift. On the Sandra Drive address, Respondent used the cost approach improperly and deliberately overstated that method's results by selecting a depreciation rate five times smaller than the standard depreciation rate.
Recommendation Upon the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Florida Real Estate Commission enter a Final Order suspending Respondent's license for five years, with an established probationary period to follow for one year during which all his appraisals must be reviewed by another appraiser. RECOMMENDED this 5th day of September, 1990, at Tallahassee, Florida. ELLA JANE P. DAVIS, Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 5th day of September, 1990. APPENDIX TO RECOMMENDED ORDER, CASE NO. 89-5553 The following constitute specific rulings pursuant to Section 120.59(2) F.S. upon the parties' respective proposed findings of fact (PFOF): Petitioner's PFOF: Paragraphs 1-5, 7-9, and 11 Accepted. Paragraphs 6, 10 Except for the rhetorical and prejorative legal argument, accepted. Paragraph 12 Rejected as double hearsay for the reasons set forth in the Recommended Order. A complaint in Circuit Court (P-9), by itself, establishes none of the facts alleged therein. Respondent's PFOF: None submitted. COPIES FURNISHED: Steven W. Johnson, Esquire DPR - Division of Real Estate 400 West Robinson Street P. O. Box 1900 Orlando, Florida 32802 Johnny F. Smiley, Esquire Suite 721-22 Towncentre Building 421 West Church Street Jacksonville, Florida 32202 Darlene F. Keller, Division Director Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32801 Kenneth E. Easley, General Counsel Department of Professional Regulation Suite 60 1940 North Monroe Street Tallahassee, Florida 32399-0792 Rufus L. Smith Creative Consultant Service 1301 Gulf Life Drive, 213 Jacksonville, Florida 32207 Rufus L. Smith C P James Property Management, Inc. 871 Cassat Avenue Jacksonville, Florida 32205-4856
