The Issue Whether or not Petitioner's application for registration as an associated person of Brauer & Associates, Inc., and as an investment adviser of G.G. Brauer & Associates, Inc. should be approved.
Findings Of Fact Respondent, Department of Banking and Finance, is the state agency charged with the administration and enforcement of Chapter 517, Florida Statutes, The Florida Securities and Investor Protection Act and the administrative rules promulgated thereunder. On or about October 30, 1990, Petitioner submitted a Form U-4, Uniform Application for Securities Industry Registration or Transfer, seeking transfer as an associated person of Brauer & Associates, Inc., and as an investment adviser of G.G. Brauer, Inc. On or about January 25, 1991, Respondent denied Petitioner's application for registration based upon its determination that Petitioner had filed a form U-4, which contained material misstatements and had demonstrated prima facie evidence of unworthiness by engaging in prohibited business practices. Petitioner was previously registered as an associated person with the St. Petersburg, Florida branch office of Smith Barney from March 1987 until July 25, 1990, when he was permitted to resign from the firm for ordering securities from the "over the counter" desk without prior client orders. Petitioner was also registered with the NASD and is charged with knowledge of their Rules of Fair Practice. On or about May 9 1990, Ronald Padgett filed a written complaint with Respondent alleging that Petitioner was engaging in unauthorized trading in his account and that the account was trading on margin without a signed margin agreement. Mr. Padgett also alleged that the signed margin agreement on file with Smith Barney was a forgery. After receiving Mr. Padgett's complaint, Respondent commenced its investigation in Petitioner's activities and requested that Smith Barney provide it with information regarding Padgett's complaint. Respondent also requested and was provided with copies of all other customer complaints that had been filed against Petitioner with Smith Barney. Smith Barney provided Respondent with copies of customer complaints that had been filed against Petitioner by Dorothy Juranko, Wayne Schmidt, Mark Madison, Michael Russo, Gloria Fallon, Patricia Schoenberg and William & Verna Bankhead. All of these individuals were investor clients of Petitioner. Prior to his employment with Smith Barney, Petitioner had not been the subject of a customer complaint or industry disciplinary proceeding or licensure revocation, suspension, or denial. Wayne Schmidt Sr. the owner of Suncoast Chrysler-Plymouth (Suncoast) opened his account at Smith Barney in 1985. Initially, the account executive assigned to Schmidt's account at Smith Barney was Steve Ellis. Schmidt maintained two accounts with Smith Barney and Steve Ellis, namely, a profit- sharing account for Suncoast Chrysler-Plymouth and a joint account with his wife. Schmidt exercised no control of the Suncoast account, but rather allowed his associate, Gloria Fallon to initially monitor the transactions in that account. Afterwards, Schmidt started overseeing the trading activities in the Suncoast account. Schmidt had no knowledge of any unauthorized transactions in the Suncoast account after he began monitoring it. Gloria Fallon did not testify at the proceeding. In connection with the maintenance of his joint account at Smith Barney, Schmidt executed a "Securities Account Agreement." During the time Schmidt maintained his account at Smith Barney, the Securities Account Agreement was utilized by Smith Barney as a margin contract. The Securities Account Agreement qualifies as a margin account agreement/margin contract as to form, and is consistent with industry standards, custom and usage. Although Florida Statutes proscribes certain procedures relative to margin agreements, neither the Florida Securities Act nor the rules promulgated thereunder require a broker/dealer to characterize a margin contract as a "margin agreement." The gravamen of Schmidt's complaint against Petitioner was that certain shares of stock were not liquidated from the joint account maintained by him in contravention of his directions to Petitioner. There was no proof submitted to support any conclusion that Petitioner failed to place an order for the liquidation of such securities for Schmidt's account. Likewise, there was no evidence of any unauthorized trading in the Schmidt's joint account. While Petitioner was assigned as account executive to the Schmidts joint account, a profit of approximately $10,000.00 was generated for that account in 1988 and in 1989, a net gain of approximately $15,000.00 was generated. Schmidt conceded at hearing that Petitioner probably did a better job handling his account than his prior broker, Steve Ellis. During the year 1988, Smith Barney generated and sent to Schmidt, monthly statements and confirmation statements regarding every transaction in his joint account. The monthly statements sent to Schmidt for the joint account contained entries regarding margin interest being charged to the account. For the year 1989, Smith Barney also generated and sent to Schmidt, monthly statements and confirms regarding every transaction in his joint account. The 1989 monthly statements sent to Schmidt also showed margin interest. For the years 1988 and 1989, Schmidt deducted from his individual tax returns, the margin interest charged to his account. Also, during 1988 and 1989, Schmidt did not complain to Petitioner or Smith Barney that the use of margin account was unauthorized. During his tenure at Smith Barney, Petitioner was the account executive assigned to the account of Michael Russo (Russo). Petitioner was assigned to the Russo account in approximately May of 1990, an account which was formerly serviced by an account executive whose last name is Dudenhaver. Michael Russo matriculated at City College of New York where he received a Bachelor of Business Administration degree and was a certified public accountant for approximately 30 years. Russo has been in the accounting business for approximately 40 years and during this time period, he operated his own accounting practice. Russo maintained three (3) accounts at Smith Barney which included an account with his wife, an individual account and an IRA account. Russo opened his first brokerage account in the early 1980s with Merrill Lynch, Pierce, Fenner & Smith. Russo has a history is investing in real estate and by mid 1990, he had accumulated a net worth of approximately $750,000.00. On or about July 13, 1990, Russo presented Petitioner a check in the amount of $26,000.00 which was to be deposited into Russo's accounts. The $26,000.00 check was deposited by Petitioner into Russo's accounts but were returned for non-sufficient funds (NSF). Russo then replaced the NSF check with a $22,000.00 check. The funds derived from the $26,000.00 of Russo originated from an interest-bearing money market account from the Fidelity- Spartan Mutual Funds Family. During the period July 13-20, 1990, Russo was on vacation and was away from his home visiting relatives in the Melbourne, Florida area. During that week, Russo spoke by telephone with Petitioner regarding his account on more than one occasion. Russo specifically recalls speaking with Petitioner on July 15, 1990, regarding his account. During that week, Russo spoke with Respondent about selling certain shares of stock in his account and his specific recall is that one of those conversations occurred on July 15, 1990. The shares were to be sold "at market." Russo again spoke with Petitioner on July 21, 1990, regarding transactions in his account. On July 24, 1990, Russo told Larry Youhn, the branch manager at Smith Barney, that he was very happy with Petitioner as his broker. The July 1990 month-end statement for the Russo account indicate that funds were deposited into the Russo accounts in an amount sufficient to satisfy security purchases made in his account during July 1990. Although these transactions appear at month-end in a type-2 margin account, a review of such statements indicate that the transactions initially occurred in a cash account and were mistakenly journaled to the margin account by Smith Barney as a result of an NSF check presented by Russo as payment for the purchase transactions. The individual account of Russo reflects the purchase of 500 shares of Wiley Laboratories on July 16, 1990, for $7,702.00. On that same day, $10,500.00 from the $26,000.00 NSF check was received into the account. The July 1990 monthly statement for Russo's individual account reflected that there would have been a $2,800.00 net credit in the account if Russo had not presented the NSF check. During his tenure at Smith Barney, Petitioner also served as the registered representative for an account maintained by Nicholas and Dorothy Juranko (Juranko). The Jurankos have a substantial history of business experience, having currently owned a service station in the Ohio area and Mrs. Juranko currently owns her own drapery shop and manages eight (8) apartment/rental units that they jointly own. The Jurankos opened their first securities brokerage account in approximately 1962. They have held accounts at several brokerage firms including Merrill Lynch, Blinder-Robinson and First Jersey Securities prior to opening their account at Smith Barney. At Blinder-Robinson, the Jurankos engaged in the purchase of several "Penny" stocks and fully realized that they were speculating. The Blinder- Robinson account was opened by the Jurankos so that Mr. Juranko would "have something to do." The Jurankos maintained a securities brokerage account at First Jersey Securities prior to Petitioner's employment with First Jersey. Petitioner was assigned as account executive for the Juranko account at First Jersey in approximately 1985. When the Jurankos opened their account at Smith Barney, their net worth was approximately $220,250.00. Although Mrs. Juranko maintains that unauthorized trades occurred in her account during the month of December 1987, when asked to identify which trade which unauthorized, she could not do so. This was so, despite an effort to refresh her recollection by presenting her the December 1987 monthly account statement which depicted all securities holdings and transactions generated in their account. Mrs. Juranko also alleged that she was losing money and did not want to deposit any additional funds into her account. However, Mrs. Juranko wanted to have profits generated from the funds that were then existing into her account as of year-end December, 1987. Respecting the December 1987 trades, the Jurankos received confirms for every transaction that occurred during the month. Through December 1987, while Petitioner was assigned to manage the Juranko account, the account generated a net profit. Also, continuing through January 1988, Petitioner had effected trades which produced a net profit for the Juranko account. As testified by Mrs. Juranko, "All I could see...greed, all I could see was $14,200.00 some dollars and $9,900.00 some dollars, and I thought, wow... I thought "wow", he's making me money." Although Mrs. Juranko complained that she was losing money, an analysis of the account revealed that during the two years that Petitioner was assigned her account, it made a net profit. Notwithstanding the documentary evidence to the contrary, Mrs. Juranko admitted that she was upset and complained to Smith Barney's compliance officer, a Mr. Singer, because of her unfounded belief that she had lost money. Mrs. Juranko identified anger as the basis for her inability to understand a letter which was sent by Larry Youhn, Smith Barney's branch manager, which show the activity that had been generated into her account. Notwithstanding the clear language of that letter, Mrs. Juranko maintained that she did not understand it. This is so, despite the fact that Mrs. Juranko did not telephone Smith Barney to complain because she "didn't want to get [Petitioner] in trouble." 1/ The use of margin in the Jurankos account was discussed because Mrs. Juranko believed the account was losing money; she wanted to do whatever was necessary over a period of time to make up for the losses and she refused to deposit additional funds into the account to generate profits in trading the account. In connection with the maintenance of the Juranko account at Smith Barney, Petitioner instructed his sales assistant to send a margin agreement to Mr. and Mrs. Juranko for execution. The use of margin was discussed with the Jurankos in approximately November 1987. Petitioner relied upon the Smith Barney infrastructure to maintain the necessary paperwork for margin accounts, including the Jurankos. This is a customary practice in the securities industry and is utilized by most large brokerage houses. Juranko first complained to Petitioner about the use of margin in January 1988, when she received her monthly account statement which contained an entry for margin interest. Mrs. Juranko explained that she thought the margin charges were too much and that she wanted to reduce the margin charges by liquidating securities from the account. Mrs. Juranko thereafter became uncooperative and it became difficult for Petitioner to transact business in the account consistent with Mrs. Juranko's desired objectives. As a result, in March 1988, Petitioner determined that the only thing he could do for the account was to liquidate positions at or near break-even points. Thereafter, Petitioner never made any other purchase recommendations to the Jurankos. Petitioner also serviced the account of Mark D. Madison while employed at Smith Barney. Madison is a marketing, advertising and management consultant who owns his own business. Madison maintained two (2) accounts at Smith Barney's St. Petersburg branch office, including an individual account and an account in the name of his mother, Mary Jean Madison. Mark Madison was a fiduciary for and conducted all transactions in his mother's account. Prior to Petitioner's assignment as broker to Madison's fiduciary account, it was assigned to broker Steve Ellis. The fiduciary account was maintained as a margin account since its opening in 1984. Commencing on February 13, 1986, broker Ellis and Madison executed several margin transactions in the fiduciary account. Through the period ending October 31, 1987, roughly 95% of the transactions in the fiduciary account were executed on margin. As of year-end 1987, the Madison fiduciary account and Mark Madison's personal account historically traded over-the-counter securities. During this period while Ellis was the broker, margin transactions were executed in both Madison accounts. During this period, broker Ellis actively traded both accounts and generated both profits and losses in the accounts. Mark Madison was familiar with the active trading in both accounts as well as the profit/loss picture. Madison estimated losses in the fiduciary account to be over $20,000.00 while the account was handled by Ellis. These losses all occurred while he was the fiduciary on the account and was in charge of approving trading in the account. When the fiduciary account was transferred from Ellis to Petitioner, Madison expressed his concern about the losses that his mother's fiduciary account had sustained as well as his responsibility for such losses. During his initial conversations with Petitioner, Madison explained his mother's displeasure at the approximately $30,000.00 in losses that had been generated while Ellis was assigned as broker. Madison also explained to Petitioner that his brother had made references to conversations with his mother about suing him as the fiduciary because of the losses generated. During the time that the fiduciary account was handled by Ellis, there were differences in the execution prices of transactions in the same securities which occurred in both the fiduciary account and his (Mark Madison's) personal account. When Petitioner was assigned the account, it became apparent to him that Madison consistently obtained higher prices on liquidating transactions than his mother was obtaining in the fiduciary account for the same securities. Petitioner was concerned with the type of trading in which Madison wanted to engage in for the fiduciary account and brought this trading strategy to the attention of branch manager, Youhn, who explained to Petitioner that it was the fiduciary who had ultimate responsibility for trading the account. In addition to discussing the trading strategy with Youhn, a review of the account history was conducted by Petitioner. Petitioner's review revealed that the account had lost approximately 40% in equity during the time it was handled by account executive Ellis and Mark Madison as fiduciary. As a result of the losses generated, Madison expressed his desire to Petitioner to recoup losses in the account by taking advantage of 2-3 point swings in certain over-the-counter securities. During the months of January through March 1988, Madison, despite his allegations to the contrary, authorized the purchase of a specified number of shares of certain securities and later maintained that certain additional shares of those securities were purchased without his authorization. Throughout this period, Madison maintained continuous telephone conversations with Petitioner regarding such securities. Throughout the period, Madison did not instruct Petitioner to cancel the trades, but rather instructed him that he wanted out of those positions as near as possible to "break even." The Department conducted an investigation of the allegations made by Petitioner's former clients in connection with the denial of his registrations as an associated person an investment advisor. In connection with the investigation, the Department, through its investigative employee, Carol Irizarry (Irizarry), spoke with individuals who had submitted written complaints against Petitioner. In furtherance of her investigation, Irizarry visited the office of William Lyman, Esquire, who represented several of the former customer/complainants, and reviewed the information that Lyman had relative to such complaints. Ms. Irizarry did not testify during the formal hearing herein. Dennis Farrar (Farrar), area financial manager, Division of Securities, Department of Banking and Finance, supervised the writing of the report completed by Irizarry. Farrar's first direct contact with the investors/complainants in this case occurred approximately one (1) week prior to the commencement of the hearing herein. Following Ellis' separation from employment with Smith Barney, several Smith Barney brokers and clients of Petitioner advised him that broker Ellis was out to get him and urged them to file complaints against Petitioner. Specifically, Petitioner received a telephone call from Gloria Fallon, an associate of Wayne Schmidt, who warned Petitioner that Ellis was "trying to stir up trouble for him." In connection with the initial customer complaint received by the Department, a request for information responsive to the complaint was sent to Smith Barney. Among the documents received by the Department was a securities account agreement which contained language normally contained in a margin contract. The securities account agreement is the document utilized by Smith Barney as its margin contract at all time material hereto. A Form U-4, Uniform Application for Securities Industry Registration for Transfer, is a document generated by the National Association of Securities Dealers (NASD) and the North American Securities Administrators Association (NASAA). The Form U-5, Uniform Termination Notice, also is generated by the above entities. The disclosure section of a Form U-4 requires an applicant to respond to the best of his ability. An intentional falsification of information on a Form U-4 will give rise to a violation of Section 517.161, Florida Statutes. It is customary in the securities industry for a registered representative to rely upon his current broker/dealer employer to determine which complaints, if any, are disclosable on the Form U-4. It is customary in the industry for a representative to rely on the Form U-5, termination notice for completion of his U-4 and usually the information on both forms track each other. Also, the prospective applicant filling out his U-4 usually consults with the firm that he separated from to ensure that both Forms U-4 and U-5 are consistent. Petitioner's completion of the Form U-4 on August 30, 1990 in connection with his employment at Brauer & Associates contained a disclosure of customer complaints consistent with the disclosures made by Smith Barney on its amended Form U-5 Termination Notice dated August 17, 1990. Petitioner's reliance on the information contained in his files and that provided by his employers was reasonable and there was no evidence that Petitioner intentionally falsified his Form U-4 application.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that Respondent enter a Final Order granting Petitioner's application for registrations as an associated person or broker/dealer of Brauer & Associates, Inc. and investment adviser to G.G. Brauer, Inc. RECOMMENDED this 13TH day of August, 1991, in Tallahassee, Leon County, Florida. JAMES E. BRADWELL Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904)488-9675 Filed with the Clerk of the Division of Administrative Hearings this 13th day of August, 1991.
The Issue Whether the Respondent is indebted to Petitioner as alleged in the Complaint filed with the Department of Agriculture and Consumer Services.
Findings Of Fact Robert Sepos is the comptroller for Ben-Bud Growers, Inc. As such Mr. Sepos maintains the company records which document amounts owed to it by others. As to this case, Mr. Sepos presented the invoices and statements due and owing from the Respondent. Based upon the unpaid invoices, Respondent owes Petitioner the sum of $2,626.00. Respondent acknowledged that the sum of $2,626.00 is owed but claimed that such amount was not for the purchase of agricultural products as contemplated by Chapter 604, Florida Statutes. According to Mr. Towell the bulk of the debt owed to Petitioner is for packaging and shipping fees for produce from growers represented by Fantastic Produce. Mr. Towell maintains that packing and shipping fees are not encompassed within Chapter 604, Florida Statutes. Mr. Sepos could not verify what sum, if any, of the total amount claimed was for agricultural products (versus packing or shipping). Based upon the admissions made by Mr. Towell, Respondent owes the Petitioner for agricultural products the sum of $347.25 in this case.
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 Petitioner's claim in the amount of $347.25 and disallowing the remainder. DONE AND ENTERED this 7th day of November, 1997, in Tallahassee, Leon County, Florida. J. D. Parrish Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (904) 488-9675 SUNCOM 278-9675 Fax Filing (904) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this 7th day of November, 1997. COPIES FURNISHED: Brenda D. Hyatt, Chief Department of Agriculture and Consumer Services Mayo Building, Room 508 Tallahassee, Florida 32399 Richard Tritschler, General Counsel Department of Agriculture and Consumer Services The Capitol, Plaza 01 Tallahassee, Florida 32399 Ben Litowich, President Ben-Bud Growers, Inc. 6261 West Atlantic Boulevard Margate, Florida 33063 George Towell, President George Towell Distributors, Inc. d/b/a Fantastic Produce Post Office Box 159 Belle Glade, Florida 33430 American Southern Insurance Company Legal Department 3715 Northside Parkway, 8th Floor Atlanta, Georgia 30327
The Issue Whether Respondents are indebted to Petitioner for 35 boxes of beans sold by Petitioner to Respondent, Weis-Buy Services, Inc., and, if so, the amount of the indebtedness.
Findings Of Fact Respondent, Weis-Buy Services, Inc., is a dealer in agricultural products licensed by the Florida Department of Agriculture and Consumer Services. Respondent, Aetna Casualty & Surety Company of Maryland acts as surety for Weis-Buy. On January 5, 1995, Mark A. Underwood, Vice President of the Petitioner, sold to Respondent, Weis-Buy Services, Inc., 35 boxes of beans. This sale was the result of the order placed by Hank Douglas, a duly authorized employee of Weis-Buy. The price agreed to by the Petitioner and Weis-Buy was $28.55 per box, for a total purchase price of $999.25. The beans sold by Petitioner to Weis-Buy had been purchased by Petitioner from another grower, Suncoast Farms. There was no written contract between Petitioner and Suncoast or between Petitioner and Weis-Buy. Weis-Buy took delivery of the beans at Petitioner's dock in Homestead, Florida, on January 5, 1995. The beans were loaded into a refrigerated truck in the employ of Weis- Buy on January 5, 1995. From Homestead, the truck drove to Belle Glade, Florida, a trip of approximately 3.5 hours. In Belle Glade, the truck picked up a load of radishes. The truck then went to Immokalee, Florida, where it picked up a quantity of squash. The following day, the truck picked up a load of cherry tomatoes. On January 9, 1995, the beans were inspected by a federal inspector in Columbus, Ohio. 1/ The inspector noted on his inspection report that the beans showed evidence of freeze damage that was ". . . so located as to indicate freezing injury occurred after packing but not at present location". The inspection report noted that the beans were to be dumped. The parties disagree as to when the freeze damage to the beans occurred. Because Weis-Buy believes that the freeze damage occurred before it took delivery of the beans, it has refused to pay Petitioner for the 35 boxes of beans. The reason Weis-Buy believes that the freeze damage occurred before the beans were loaded onto the truck is because the other vegetables that were transported by the refrigerated truck were not damaged. Partly because the beans had been purchased from another grower, Mr. Underwood inspected the beans immediately prior to their being loaded onto Weis- Buy's truck. Based on his testimony, it is found that there was no freeze damage to the beans when they were loaded on Weis-Buy's truck on January 5, 1995. It is found that the freeze damage to the beans revealed by the federal inspection on January 9, 1995, occurred after the beans had been delivered to Weis-Buy. Consequently, it is concluded that Petitioner fulfilled its obligations under the verbal contract and is entitled to be paid the sum of $999.25.
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 that adopts the findings of fact and conclusions contained herein, that finds Respondent Weis-Buy Services, Inc., is indebted to Petitioners in the amount of $999.25, directs Weis-Buy Services, Inc., to make payment to Petitioner in the amount of $999.25 within 15 days following the issuance of the order, and provides that if payment in full of this $999.25 indebtedness is not timely made, the Department will seek recovery from the Aetna Casualty & Surety Company of Maryland, as Weis-Buy's surety. DONE AND ENTERED this 16th day of February, 1996, in Tallahassee, Leon County, Florida. CLAUDE B. ARRINGTON, Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 16th day of February 1996.
Findings Of Fact Robert Sepos is the comptroller for Ben-Bud Growers, Inc. As such Mr. Sepos maintains the company records which document amounts owed to it by others. As to this case, Mr. Sepos presented the invoices and statements due and owing from the Respondent. Based upon the unpaid invoices, Respondent owes Petitioner the sum of $10,471.80. Respondent acknowledged that the sum of $10,471.80 is owed to Petitioner but claimed that such amount was not for the purchase of agricultural products as contemplated by Chapter 604, Florida Statutes. According to Mr. Towell the bulk of the debt owed to Petitioner is for packaging and shipping fees for produce from growers represented by Fantastic Produce. Mr. Towell maintains that packing and shipping fees are not encompassed within Chapter 604, Florida Statutes. Mr. Sepos could not verify what sum, if any, of the total amount claimed was for agricultural products (versus packing or shipping). Based upon the admissions made by Mr. Towell, Respondent owes the Petitioner for agricultural products the sum of $775.00 in this case.
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 Petitioner's claim in the amount of $775.00 and disallowing the remainder. DONE AND ENTERED this 7th day of November, 1997, in Tallahassee, Leon County, Florida. J. D. Parrish Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (904) 488-9675 SUNCOM 278-9675 Fax Filing (904) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this 7th day of November, 1997. COPIES FURNISHED: Brenda D. Hyatt, Chief Department of Agriculture and Consumer Services Mayo Building, Room 508 Tallahassee, Florida 32399 Richard Tritschler, General Counsel Department of Agriculture and Consumer Services The Capitol, Plaza 01 Tallahassee, Florida 32399 Ben Litowich, President Ben-Bud Growers, Inc. 6261 West Atlantic Boulevard Margate, Florida 33063 George Towell, President George Towell Distributors, Inc. d/b/a Fantastic Produce Post Office Box 159 Belle Glade, Florida 33430 American Southern Insurance Company Legal Department 3715 Northside Parkway, 8th Floor Atlanta, Georgia 30327
The Issue The central issue in this case is whether the Respondent is indebted to the Petitioner for agricultural products and, if so, in what amount.
Findings Of Fact Based upon the testimony of the witnesses and the documentary evidence received at the hearing, I make the following findings of fact: Petitioner, Oglesby Nursery, Inc., is a commercial nursery providing a variety of landscape agricultural products. The principal office for Petitioner is located at 3714 SW 52nd Avenues Hollywood, Florida. Respondent, Garden of Eden Landscape and Nursery, Inc., is an agricultural dealer with its office located at 3317 So. Dixie Highway, Delray Beach, Florida. Respondent, Garden of Eden, is subject to the licensing requirements of the Department of Agriculture and Consumer Services. As such, Garden of Eden is obligated to obtain and to post a surety bond to ensure that payment is made to producers for agricultural products purchased by the dealer. To meet this requirement, Garden of Eden delivered a certificate of deposit from Sun Bank of Palm Beach County to the Department. On or about August 22, 1986, Garden of Eden ordered and received delivery of $7673.40 worth of agricultural products from Petitioner. This purchase consisted of nine may pan coconuts and thirty green malayans trees. All of the trees were accepted and no issue was made as to their condition. On or about September 2, 1986, Garden of Eden ordered and received delivery of $1190.00 worth of agricultural products from Petitioner. This purchase consisted of seven coconut malayans dwarf trees. All of the trees were accepted and no issue was made as to their condition. The total amount of the agricultural products purchased by Garden of Eden from Petitioner was $8863.40. The total amount Garden of Eden paid on this account was $5000.00. The balance of indebtedness owed by Garden of Eden t o Petitioner for the purchases listed above is $3863.40. Petitioner claims it is due an additional sum of $247.77 representing interest on the unpaid account since the assessment of interest to an unpaid balance is standard practice in the industry and since Respondent took delivery of additional products knowing interest on past due accounts to be Petitioner's policy. No written agreement of acknowledgment executed by Garden of Eden was presented with regard to the interest claim.
Findings Of Fact Petitioner's business activities include the sale of tangible personal property such as caskets and burial vaults. The written sales contract utilized by Petitioner sets forth the amount of sales tax and includes that sum in the total amount which the customer agrees to pay. The contracts are in the form of a note, containing a promise to pay, and were sold at discount by the Petitioner at certain times during the audit period. The contracts require a down payment and installment payments thereafter. The contracts further contain a clause allowing the customer three days in which to cancel the contract, under which circumstances the customer is reimbursed all moneys paid by him to Petitioner. Under Petitioner's retained- title, conditional-sale contract, if the customer cancels the contract or stops making payments at any time subsequent to the initial three-day period, Petitioner retains all sums which have been paid to it by the customer. Petitioner's business practice is to pay its salesmen commission from the down payment on a contract. Petitioner operates on the accrual method of accounting, and its sales tax liability is entered on its books at the time of the sale. Petitioner pays the total sales tax due at the time that it enters into the contract. When a contract is cancelled (after the initial three-day cancellation period), Petitioner claims a credit against its current liability for the full amount of sales tax charged on the transaction when it files its sales tax report for the month, even though at least the down payment, and frequently additional payments, has been collected from the customer. On audit, Respondent allowed full credit for the amount of sales tax when a contract had been cancelled within the three-day cancellation period, but disallowed that portion of the credits claimed which related to the down payments and installments which the Petitioner retained when a contract was cancelled after the three-day period. Respondent did allow, however, a credit for taxes attributable to the unpaid balance under each cancelled contract.
Recommendation Based upon the foregoing findings of fact and conclusions of law, it is RECOMMENDED THAT: The Department of Revenue enter its final order disallowing to Petitioner a credit for taxes attributable to amounts retained by it upon the cancellation of its installment sales contracts. DONE AND ORDERED in Tallahassee, Leon County, Florida, this 29th day of May, 1980. LINDA M .RIGOT Hearing Officer Division of Administrative Hearings Room 101, Collins Building Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 29th day of May, 1980. COPIES FURNISHED: Ms. Cynthia Savage Comptroller Restlawn, Inc. 2600 Ribualt Scenic Dr Post Office Box 9306 Jacksonville, FL 32208 E. Wilson Crump, II, Esq. Assistant Attorney General Department of Legal Affairs The Capitol Tallahassee, FL 32301 John D. Moriarty, Esq. Deputy General Counsel Department of Revenue Room 104, Carlton Building Tallahassee, FL 32301 Mr. Randy Miller Executive Director Department of Revenue Room 102, Carlton Building Tallahassee, FL 32301
The Issue The issue is whether the claims of $98,935.20 and $19,147.70, filed by Petitioner under the Agricultural Bond and License Law, are valid. §§ 604.15 - 604.34, Fla. Stat. (2008).
Findings Of Fact At all material times, Petitioner has been a producer of agricultural products located in Plant City, Florida. At all material times, American Growers has been a dealer in agricultural products. Respondent Lincoln General Insurance Company, as surety, issued a bond to American Growers, as principal. American Growers is licensed by the Department of Agriculture and Consumer Services ("DACS"). Between December 16, 2008, and February 4, 2009, Petitioner sold strawberries to American Growers, each sale being accompanied by a Passing and Bill of Lading. Petitioner sent an Invoice for each shipment, and payment was due in full following receipt of the Invoice. Partial payments have been made on some of the invoices, and as of the date of this Recommended Order, the amount that remains unpaid by American Growers to Petitioner is $117,982.90, comprising: Invoice No. Invoice Date Amount Balance Due 103894 12/16/08 $7,419.00 $1,296.00 103952 12/22/08 $18,370.80 $1,944.00 103953 12/23/08 $3,123.60 $648.00 193955 12/26/08 $8,164.80 $1,728.00 103984 12/28/08 $28,764.40 $28,764.40 104076 12/31/08 $17,236.80 $17,236.80 104077 1/5/09 $17,658.00 $17,658.00 104189 1/5/09 $1,320.90 $1,320.90 104386 1/20/09 $16,480.80 $16,480.80 104517 1/29/09 $17,449.20 $17,449.20 104496 2/4/09 $13,456.80 $13,456.80 TOTAL $117,982.90
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Agriculture and Consumer Services enter a final order requiring Respondent, American Growers, Inc., and/or its surety, Respondent, Lincoln General Insurance Company, to pay Petitioner, Crown Harvest Produce Sales, LLC, the total amount of $117,982.90. DONE AND ENTERED this 18th day of May, 2010, in Tallahassee, Leon County, Florida. S JEFF B. CLARK 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 18th day of May, 2010. COPIES FURNISHED: Honorable Charles H. Bronson Commissioner of Agriculture and Consumer Services The Capital, Plaza Level 10 Tallahassee, Florida 32399-0810 Richard D. Tritschler, General Counsel Department of Agriculture and Consumer Services 407 South Calhoun Street, Suite 520 Tallahassee, Florida 32399-0800 Christopher E. Green, Esquire Department of Agriculture and Consumer Services Office of Citrus License and Bond Mayo Building, Mail Station 38 Tallahassee, Florida 32399-0800 Glenn Thomason, President American Growers, Inc. 14888 Horseshoe Trace Wellington, Florida 33414 Katy Koestner Esquivel, Esquire Meuers Law Firm, P.L. 5395 Park Central Court Naples, Florida 34109 Renee Herder Surety Bond Claims Lincoln General Insurance Company 4902 Eisenhower Boulevard, Suite 155 Tampa, Florida 33634 Glenn C. Thomason, Registered Agent American Growers, Inc. Post Office Box 1207 Loxahatchee, Florida 33470
The Issue Whether the Petitioner, Edward J. Miller, is entitled to be licensed as a resident life and variable annuity insurance agent.
Findings Of Fact The Petitioner, Edward J. Miller, is employed at Washington Mutual Bank. His supervisor is Tracy Tarach. It was Ms. Tarach's desire that Mr. Miller become licensed as a resident life and variable annuity insurance agent. To that end, she and Mr. Miller filed the necessary papers with Washington Mutual Bank to approve the application process as well as the course to become licensed. The process of having the bank issue the check to cover the licensing procedure was timely. Additionally, the Petitioner could only be scheduled for the licensure class and completion of the licensing process when the bank took favorable action on the request. Accordingly, for this Petitioner the licensing process was dragged out over the course of several months. In January 2003 the Petitioner completed the state application for licensure but did not transmit it to the state. He submitted the request to the bank for course approval and planned to submit the paperwork when it was successfully completed. At that time, the Petitioner did not have any criminal charges pending against him and the answers noted on the application were all correct and truthful. In February 2003 the Petitioner was stopped for DUI. The next workday the Petitioner went to his supervisor and fully disclosed the arrest as well as the charge. The Petitioner made no effort to hide the arrest from his employer and the employer considers the Petitioner a valuable employee, despite the incident. In March 2003 the Petitioner was formally charged with DUI, a misdemeanor. Meanwhile, the bank approved the Petitioner's request to take the course for licensure. The forty-hour course in another work location required the Petitioner to travel to the school site and reside in a hotel for a week while the course work was completed. Obviously the Petitioner's supervisor was willing to invest the costs of licensure school and accommodations for the Petitioner with full knowledge of the Petitioner's pending criminal matter. After successfully completing the licensure course in April 2003 the Petitioner submitted the license application to the state. He failed to double-check the forms. He failed to correct an answer that was now incorrect. That is, he failed to fully disclose the arrest. Subsequently, the criminal case went to hearing, and the Petitioner entered a plea and was placed on probation. The resolution of the DUI charges was completed after the application was submitted. Section 3 of the license application asks several screening questions of applicants for licensure. Applicants are required to answer "yes" or "no", depending on the information sought. In this case, it is undisputed that the Petitioner failed to correct his answers to the questions posed in Section 3. More specifically, the Petitioner failed to truthfully disclose that he had been arrested for DUI. This failure was an oversight on the Petitioner's part, and not intended to deceive the Department. The answers should have been corrected when the Petitioner amended the application form to include the information regarding his completion of the Gold Coast School of Insurance class on April 11, 2003. He did not do so. When the Department reviewed the Petitioner's application and discovered the false answer, it took action to deny the licensure request. That denial was entered on January 22, 2004. A notice of the denial was provided to the Petitioner and he timely challenged the proposed action. On October 31, 2003, the Petitioner completed all of the terms of his court-ordered probation and the entire DUI incident was put to rest.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Financial Services enter a Final Order granting the Petitioner's application for licensure. DONE AND ENTERED this 30th day of July, 2004, in Tallahassee, Leon County, Florida. S ___________________________________ J. D. 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 30th day of July, 2004. COPIES FURNISHED: Honorable Tom Gallagher Chief Financial Officer Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300 Pete Dunbar, General Counsel Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300 Dana M. Wiehle, Esquire Department of Financial Services 612 Larson Building 200 East Gaines Street Tallahassee, Florida 32399 Edward J. Miller 6205 Northwest West Deville Circle Port St. Lucie, Florida 34986
The Issue The ultimate issue is whether the Respondent owes the Petitioner money for the purchase of landscaping plants from the Petitioner. The controversy specifically involves whether the Respondent owes the Petitioner interest on its open account pursuant to the terms of purchase and how much interest, if any, the Respondent owes.
Findings Of Fact On October 11, 1994, the Petitioner, Jon's Nursery, sold to the Respondent, J & D Tropical Landscape Design, live plants with a value of $6,625.00. See Page 3, Petitioner's Composite Exhibit. The sale was upon credit terms which provided that the terms were 30 days net, and provided for a service charge assessed at a rate of one and one- half percent per month on any past due (over 30 days) balance of the account to be paid by buyer. The credit application was signed "Jane Wilkinson, President" on December 11, 1992. See Page 2, Petitioner's Composite Exhibit. On November 1, 1994, the Petitioner sold to the Respondent live plants with a value of $5,996.82. See Page 4, Petitioner's Composite Exhibit. On November 4, 1994, the Petitioner sold to the Respondent live plants with a value of $2,645.92. See Page 4, Petitioner's Composite Exhibit. On November 30, 1994, the Petitioner charged the Respondent a finance charge of $99.38 on $6,625.00, that portion of the Respondent's balance which had been due and owing over 30 days. The Respondent's total balance was then $15,267.74. See Page 4, Petitioner's Composite Exhibit. On December 30, 1994, the Petitioner charged the Respondent a finance charge of $229.02 on $15,267.74, that portion of the Respondent's balance which had been due and owing over 30 days. The Respondent's total balance was then $15,596.14. See Page 5, Petitioner's Composite Exhibit. On January 30, 1995, the Petitioner charged the Respondent a finance charge of $229.02 on $15,267.74, that portion of the Respondent's balance which had been due and owing over 30 days. The Respondent's total balance was then $15,825.16. See Page 6, Petitioner's Composite Exhibit. On February 23, 1995, the Respondent paid the Petitioner $5,000.00. The Petitioner applied $557.42 to the payment of the accrued interest, and $4,442.58 to the principal balance, which reduced that balance to $10,825.16. See Page 7, Petitioner's Composite Exhibit. On March 2, 1995, the Petitioner charged the Respondent a finance charge of $162.38 on $10,825.16, that portion of the Respondent's balance which had been due and owing over 30 days. The Respondent's balance was then $10,987.54. See Page 8, Petitioner's Composite Exhibit. On March 7, 1995, Rita Rackley, Secretary Treasurer of Jon's Nursery, the Petitioner, filed a complaint with the Department of Agriculture alleging that the Respondent, J & D Tropical Landscape Design, owed the Petitioner a total of $10,825.16 for live plants sold to the Respondent on terms described as "Net 30 days." On April 7, 1995, the Petitioner asked that the complaint be held in abeyance. On March 30, 1995, the Petitioner charged the Respondent a finance charge of $162.38 on $10,825.16, that portion of the Respondent's balance which had been due and owing over 30 days. The Respondent's balance was then $11,149.92. See Page 8, Petitioner's Composite Exhibit. On April 15, 1995, the Respondent paid the Petitioner $1,000.00. The Petitioner applied $324.76 to the payment of the accrued interest, and $675.24 to the principal balance, which reduced that balance to $10,149.92. See Page 9, Petitioner's Composite Exhibit. On April 30, 1995, the Petitioner charged the Respondent a finance charge of $152.25 on $10,149.92, that portion of the Respondent's balance which had been due and owing over 30 days. The Respondent's balance was then $10,302.17. See Page 9, Petitioner's Composite Exhibit. On May 30, 1995, the Petitioner charged the Respondent a finance charge of $152.25 on $10,149.92, that portion of the Respondent's balance which had been due and owing over 30 days. The Respondent's balance was then $10,454.42. See Page 10, Petitioner's Composite Exhibit. On June 12, 1995, the Respondent paid the Petitioner $1,000.00. The Petitioner applied $304.50 to the payment of the accrued interest, and $695.50 to the principal balance, which reduced that balance to $9,454.42. See Page 11, Petitioner's Composite Exhibit. On June 30, 1995, the Petitioner charged the Respondent a finance charge of $141.82 on $9,454.42, that portion of the Respondent's balance which had been due and owing over 30 days. The Respondent's balance was then $9,596.24. See Page 11, Petitioner's Composite Exhibit. On July 30, 1995, the Petitioner charged the Respondent a finance charge of $141.82 on $9,454.42, that portion of the Respondent's balance which had been due and owing over 30 days. The Respondent's balance was then $9,738.06. See Page 12, Petitioner's Composite Exhibit. On August 30, 1995, the Petitioner charged the Respondent a finance charge of $141.82 on $9,454.42, that portion of the Respondent's balance which had been due and owing over 30 days. The Respondent's balance was then $9,879.88. See Page 13, Petitioner's Composite Exhibit. On September 14, 1995, the Respondent paid the Petitioner $1,000.00. The Petitioner applied $425.46 to the payment of the accrued interest, and $574.54 to the principal balance, which reduced that balance to $8,879.88. See Page 14, Petitioner's Composite Exhibit. On September 30, 1995, the Petitioner charged the Respondent a finance charge of $133.20 on $8,879.88, that portion of the Respondent's balance which had been due and owing over 30 days. The Respondent's balance was then $9,013.08. See Page 14, Petitioner's Composite Exhibit. By letter dated October 19, 1995, the Petitioner advised the Department that it desired to amend its original complaint to change the amount owed to $8,879.88, and to lift the abeyance and proceed with the complaint. On October 30, 1995, the Petitioner charged the Respondent a finance charge of $133.20 on $8,879.88, that portion of the Respondent's balance which had been due and owing over 30 days. The Respondent's balance was then $9,146.28. See Page 15, Petitioner's Composite Exhibit. After September 14, 1995, the monthly finance charges on the unpaid balance would remain $133.20.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law set forth herein, it is, RECOMMENDED: That the Department enter its Final Order directing the Respondent to pay to the Petitioner, within 30 days, $8,879.88, and, That, in the event the Petitioner does not pay, the Department order the Fidelity and Deposit Company of Maryland to pay to the Petitioner $8,879.88, or the amount of its bond, whichever is the greater. DONE AND ENTERED this 16th day of April, 1996, in Tallahassee, Florida. STEPHEN F. DEAN, Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 16th day of April, 1996. COPIES FURNISHED: Pen Smith, Sales Manager 24546 Nursery Way Eustis, FL 32726 Jane Wilkinson, President J & D Tropical Landscape Design 5151 S.W. 106th Avenue Cooper City, FL 33328 Fidelity & Deposit Company of Maryland Legal Department Post Office Box 1227 Baltimore, MD 21203 The Honorable Bob Crawford Commissioner of Agriculture Department of Agriculture and Consumer Services The Capitol, PL-10 Tallahassee, FL 32399-0810 Richard Tritschler, General Counsel Department of Agriculture and Consumer Services The Capitol, PL-10 Tallahassee, FL 32399-0810
The Issue The issue is whether Respondent, Greenblades of Central Florida, Inc., and its surety, Western Surety Company, 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 operates a nursery supply company that produces trees, plants, and other landscaping supplies at a location in Bunnell, Florida. Respondent is a dealer in agricultural products as defined by Section 604.15(1), Florida Statutes. At the time of the transactions in question, Respondent was a licensed dealer in agricultural products supported by a surety bond provided by Western Surety Company. This matter arose over a Producer Complaint filed by Petitioner on June 24, 2005, in which it alleged that Respondent owed $20,512.97, based upon five invoices for nursery goods delivered to various job sites where Respondent was providing landscaping services. The five invoices set forth in the original Producer Complaint are as follows: Date of Sale Invoice # Amount Dec. 28, 2004 64679 $2,884.72 Jan. 11, 2005 64828 3,878.75 Jan. 11, 2005 64829 1,926.00 Feb. 1, 2005 65229 2,086.50 Feb. 3, 2005 65127 9,737.00 Petitioner later amended its Complaint to withdraw its claims under Invoice Nos. 65229 and 65127, as untimely filed, resulting in an amended amount due of $8,689.47. Respondent filed a Response to the Producer Complaint on August 15, 2005, admitting the amounts due under Invoice Nos. 64679 and 64828, totaling $6,763.47, and denying the amount claimed in Invoice No. 64829, $1,926.00, as never having been filled, resulting in Respondent's using another vendor to fill the order. Respondent admitted the amounts due under Invoice Nos. 64679 and 64828; therefore, no further discussion is necessary for those items, except to note that Delivery Receipt No. 17751, relating to Invoice No. 64828 contains the note "Reject 1 Live Oak." Therefore, the amount of Invoice No. 64828 must be reduced by $214.00 ($200 for the tree and 7 percent Florida Sales Tax). With respect to Invoice No. 64829, however, Petitioner produced at hearing only an unsigned invoice without either a sales order or a receipt for delivery of goods, as was its custom concerning deliveries of nursery goods. Accordingly, Petitioner provided no proof that the order under Invoice No. 64829 was actually delivered to Respondent. Respondent and its surety, Western Surety Company, currently owe Petitioner $2,884.72 under Invoice No. 64679, and $3,664.75 under Invoice No. 64828, for a total amount owed of $6,549.47.
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, Greenblades of Central Florida, Inc., or its surety, Respondent, Western Surety Company, to pay Petitioner $6,549.47 for unpaid invoices. DONE AND ENTERED this 25th day of January, 2006, in Tallahassee, Leon County, Florida. S ROBERT S. COHEN 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 January, 2006. COPIES FURNISHED: Christopher E. Green, Chief Bureau of License and Bond Department of Agriculture and Consumer Services Division of Marketing 407 South Calhoun Street, Mail Station 38 Tallahassee, Florida 32399-0800 Joseph Robbins, Jr. Greenblades of Central Florida, Inc. 11025 Southeast Highway 42 Summerfield, Florida 34491 Tom Snyder Western Surety Company Post Office Box 5077 Sioux Falls, South Dakota 57117-5077 Donald M. DuMond Skinner Nurseries, Inc. 2970 Hartley Road, Suite 302 Jacksonville, Florida 32257 Tom Robinson Skinner Nurseries, Inc. 13000 State Road 11 Bunnell, Florida 32110 Honorable Charles H. Bronson Department of Agriculture and Consumer Services Commissioner of Agriculture The Capitol, Plaza Level 10 Tallahassee, Florida 32399-0810 Richard D. Tritschler, General Counsel Department of Agriculture and Consumer Services 407 South Calhoun Street, Suite 520 Tallahassee, Florida 32399-0800
