The Issue Whether or not Petitioner (complainant) is entitled to recover $1,340.50 or any part thereof against Respondent dealer and Respondent surety company.
Findings Of Fact Petitioner is a grower of watermelons and qualifies as a "producer" under Section 604.15(5) F.S. Respondent Steve Helms Fruit Co., Inc. is a broker-shipper of watermelons and qualifies as a "dealer" under Section 604.15(1) F.S. Respondent Ohio Casualty Insurance Co. is listed as surety for Steve Helms Fruit Co., Inc. The amount and period of the bond have not been established. The time material to the amended complaint is June, 1994. Two or three weeks before Petitioner's melons were ready for harvest, Steve Helms personally came to Petitioner's home and requested to ship Petitioner's melons for ultimate retail sale. Petitioner requested to be paid "up front." Mr. Helms would not agree to pay all the money "up front" but agreed to pay some. He also agreed to pay within 14 days of the first shipment. Petitioner had had a bad experience two years previously, so he got Mr. Helms to promise to "clean up" his field. This expression is subject to some interpretation, and although Petitioner initially stated that the agreement was for Respondent broker-shipper to buy all his melons regardless of condition, Petitioner later modified his statement to say that Mr. Helms only promised not to take the best melons and leave the rest. Harvesting began May 15, 1994. Until June 10, 1994, Petitioner's usual contact with Respondent broker- shipper was Frank Favuzza, who oversaw all weighing and loading and assessed the Petitioner's melons on behalf of Respondent broker-shipper. On June 10, 1994, Mr. Helms was again personally in the field. Petitioner told Mr. Helms that he had to get the remainder of the melons off the field by Sunday, otherwise the heat would ruin them. Mr. Helms said he would wait until Monday. Petitioner believes that if the melons had been harvested by Sunday, June 12, 1994, three truckloads could have been harvested. On Monday, less than a full truckload was in good enough condition to be loaded onto a truck. A lot of melons were going bad and were left in the field to rot. On Tuesday, June 14, 1994, Petitioner's melons were weighed at Romeo, Florida and the poundage established at 29,330 pounds. Frank Favuzza estimated to Petitioner that his melons would only bring $.04/lb. From this conversation, related by Petitioner, it may be clearly inferred that Petitioner knew he would not be paid until after Respondent broker-shipper received payment from the ultimate retailer at the other end of the transaction. Petitioner's amended complaint alleged the amounts due as follows: "On June 1, 1994, #92111, 700 lbs. at $.07 equals $49.00, not $490.00; June 3, 1994, #92117, 900 lbs. at $.07 equals $63.00, not $630.00; and June 3, 1994, #92120, 790 lbs. at $.07 equals $55.30, not $553.00. Therefore Item (12) Complaint Total is amended to $1,340.00." The amendments did not alter the original claim for 6-14-94, invoice 92157 for 29,330 lbs. of melons at $.04 for $1,173.20. There was no claim for the melons that rotted in Petitioner's field. Weight tickets and Respondent's corresponding broker-shipper's bills of lading were admitted in evidence. These showed the following amounts were received by Respondent broker-shipper: 6/1/94 INVOICE 92111 46,020 net weight melons 6/3/94 INVOICE 92117 45,580 net weight melons 6/3/94 INVOICE 92120 44,720 net weight melons 6/14/94 INVOICE 92157 29,330 net weight melons Petitioner testified, without refutation, that he was present at each weighing and that he had agreed to take $.07 per pound on all loads except for the June 14, 1994 load for which he was claiming $.04 per pound. The bills of lading support Petitioner's testimony as to the price per pound. The bills of lading also clearly show that the price per pound was "to farm minus labor." This notation means that the net amount to be paid Petitioner by Respondent was subject to a prior deduction for labor, but it cannot reasonably be inferred to include a deduction for shipping. Petitioner's last load of 29,330 lbs. of melons weighed on June 14, 1994 was less than a full truckload, so Respondent added melons from another farm to that truck to make up a full load. Respondent broker-shipper did not pay Petitioner for 700 pounds of the June 1, 1994, invoice 92111 truckload; for 900 pounds of the first June 3, 1994 invoice 92117 truckload; for 790 pounds of the second June 3, 1994 invoice 92120 truckload; or for any (29,330 pounds) of the June 14, 1994 invoice 92157 truckload, upon grounds that those melons were not saleable at their destination. Petitioner put in evidence Exhibit P-3 which is an accounting Respondent had sent him. It shows that Respondent broker-shipper had deducted $690.30 for labor on invoice 92111 and claimed 700 pounds could not be sold; had deducted $683.70 for labor on invoice 92117 and claimed 900 pounds could not be sold; had deducted $670.80 for labor on invoice 92120 and claimed 790 pounds could not be sold; and had paid Petitioner nothing on a June 14, 1994 truckload, invoice 92159. Invoice 92157, which corresponds to Petitioner's June 14, 1994 partial truckload of 29,330 pounds of melons, is not listed or otherwise explained in the exhibit. The exhibit is conclusionary and inexplicably is dated 1993. There is no back-up evidence to support Respondent's making these deductions. No inspection certificate or labor charges are in evidence. Petitioner's initial complaint, which he put in evidence as P-1, constitutes an admission by him. In the complaint, Petitioner contended (1) that he was selling "direct" to Respondent broker-shipper; (2) that he was selling "f.o.b."; and (3) that he was selling "Fob shipping point excectance (sic) after final inspection." Petitioner also stated therein that he was given an inspection sheet showing 46,310 lbs. of watermelons had failed inspection and he did not feel the melons that failed inspection were his melons because Frank Favuzza approved of all melons loaded from Petitioner's field and the inspection sheet did not say that the bad melons were Petitioner's melons. Somewhat contrariwise, Petitioner testified at formal hearing that he had asked Respondent broker-shipper for a government inspection certificate showing that his melons were bad and never got it. From the credible evidence as a whole, it is inferred that Petitioner sold his watermelons on the June 14, 1994 truckload at $.04 per pound contingent upon the melons arriving at their ultimate destination in saleable condition per a federal inspection. It is further inferred that the prior three loads at issue also were sold contingent upon their arriving in saleable condition. The evidence as a whole also supports a finding that Petitioner's melons left the weigh station in a condition capable of being sold for the respective prices agreed upon between Petitioner and Respondent broker-shipper. Any deterioration of melons between June 10, 1994 when Petitioner requested that the broker-shipper take the last load and June 14, 1994 when the last load actually was weighed and shipped is attributable to Respondent broker-shipper, but that fact is not significant since the lesser rate of $.04/lb. was agreed upon prior to shipping and after Respondent broker-shipper had seen and approved the loaded melons. Petitioner's foregoing evidence of delivering saleable quality melons to Respondent broker-shipper is unrefuted. The presumption is thereby created that but for some failure of Respondent broker-shipper, the melons would have arrived at their ultimate destination in saleable condition. There is no evidence of record to support Respondent's deductions for "labor," or for melons which allegedly could not be sold upon delivery at the ultimate destination. Petitioner moved ore tenus to further amend his complaint to include a prayer for reimbursement for the cost of the melons which rotted in his field and became unsaleable between June 10 and June 14, 1994 due to Respondent broker-shipper's delay in loading and to assert a claim for interest on the $1,340.50 claim. This motion was denied as too late.
Recommendation Upon the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the Department of Agriculture enter a final order awarding Petitioner $1,340.50, and binding Respondents to pay the full amount of $1,340.50, which in Ohio Casualty Insurance Co.'s case shall be only to the extent of its bond. RECOMMENDED this 2nd day of June, 1995, 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 2nd day of June, 1995. APPENDIX TO RECOMMENDED ORDER 94-6189A The following constitute specific rulings, pursuant to S120.59(2), F.S., upon the parties' respective proposed findings of fact (PFOF). Petitioner's PFOF: 1-2 Accepted. Rejected as unnecessary Rejected as subordinate and mere argumentation. 5-6 Rejected as mere argumentation. Rejected as these were not the dates testified. Rejected as mere argumentation. Respondent Steve Helms Fruit Co., Inc.'s PFOF: 1 Accepted. 2-4 Rejected as not proven. Accepted as to the June 10-14, 1994 load. Rejected as not proven. Not proven in whole. Covered to the extent proven. While one inference might be that a different invoice number was assigned to the combined load, that is not the only reasonable inference based on the evidence submitted. Likewise, although Petitioner apparently got some inspection certificate, that certificate is not in evidence. There is no record evidence as to what it covered. It is not reasonable to infer or guess that it covered four loads on four trucks on three dates or that there is any way to calculate from it that the only bad melons were Petitioner's melons and not those mixed in from another farm on June 14, 1994. See FOF 19-20. 8-15 Rejected as not proven. Respondent Ohio Casualty Insurance Co.'s PFOF: None filed COPIES FURNISHED: Frank Favuzza, President Steve Helms Fruit Co., Inc. Post Office Box 1682 Auburndale, Florida 33823 Tom Morton Ohio Casualty Insurance Co. Post Office Box 94-5010 Maitland, Florida 32794-5010 L. C. Stevenson 333 NW 46th Avenue Ocala, Florida 34482 Richard Tritschler, Esquire Department of Agriculture and Consumer Services The Capitol PL-10 Tallahassee, Florida 32399-0810 Hon. Bob Crawford Commissioner of Agriculture The Capitol, PL 10 Tallahassee, Florida 32399
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Citrus enter a final order dismissing the application filed by the Petitioner for licensure as a citrus fruit dealer. DONE AND ENTERED this 30th day of May, 2013, in Tallahassee, Leon County, Florida. S WILLIAM F. QUATTLEBAUM Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 30th day of May, 2013. COPIES FURNISHED: Douglas Ackerman, Executive Director Department of Citrus Post Office Box 9010 605 East Main Street Bartow, Florida 33831-9010 Joseph P. Mawhinney, Esquire Reed and Mawhinney, P.L. 1611 Harden Boulevard Lakeland, Florida 33803-1826 Guillermo Vazquez East West Citrus Packers, LLC 11860 Southwest 183rd Street Miami, Florida 33177-2453
Findings Of Fact Suncoast Highland Corp. (Suncoast), is the developer and registrant of Shadow Run Subdivision in Hillsborough County. Prior to 1970, Suncoast was known as Suncoast Peach Corporation. C. Thomas Petersen, Peter Lenhardt, and two other individuals formed Suncoast Peach Corporation in 1964. In 1974 Suncoast registered Unit 1 of Shadow Run with the Division of Land Sales (Division). At that time Suncoast's principals were C. Thomas Petersen, President and Director, and Peter M. Lenhardt, Vice President, Director, and in charge of marketing. As a charter stockholder and owner of 166,000 shares (26-2/3 percent of ownership), Lenhardt filed an affidavit stating he devoted 100 percent of his time five days per week to Suncoast's business affairs. Lenhardt was (and presumably still is) a registered real estate broker and was in charge of sales in Shadow Run. In 1977 Suncoast registered Unit 2 (consolidated with Unit 1) with the Division. At this time Petersen and Lenhardt alleged each owned 13.5 percent of Suncoast and Lenhardt again filed an affidavit stating he devoted 100 percent of his time to Suncoast's business affairs and was in charge of sales in Shadow Run. In the Annual Report filed November 13, 1978, Lenhardt executed an affidavit representing himself to be Suncoast's principal officer in connection with this filing. This report included financial and inventory data for Shadow Run, Units 1 and 2, as well as 16 other registered subdivisions. At this time Petitioner and Lenhardt represented they each owned 38 percent of Suncoast (Exhibit 1E). On January 30, 1979, Lenhardt filed, under oath, renewal applications for Shadow Run, Units 1 and 2. This application (Exhibit 1F) showed out of 277 lots registered in Unit 1, 227 had been deeded and 50 remained to be sold. In Unit 2 out of 89 registered lots, 76 had been deeded and only 13 remained unsold. In August 1978 the Division began receiving complaints from Shadow Run homeowners concerning assessments, placing of utilities, and lack of promised recreational facilities. After meeting with the homeowners association and representatives of Suncoast, the Division issued a Notice to Show Cause against Suncoast. For several months thereafter representatives of the Division, Suncoast, and the homeowners association attempted to resolve the complaints. On April 19, 1979, C. Thomas Petersen, President, and Thomas Coates, Secretary, of Suncoast executed a stipulation in which, inter alia, further sales would remain suspended pending submission of all promotional and advertising materials to the Division, Suncoast would enter into an agreement concerning recreational facilities to be furnished by Suncoast, and Suncoast would pay a $7,500 civil penalty to the Division (Exhibit 1G). On December 10, 1979, Suncoast executed an agreement (Exhibit 1H) whereby it agreed, among other things, to install a concrete boat ramp no longer than 20 feet extending not more than two feet into Lake Grady on Lot 14, Block 1, Shadow Run, Unit 1, and convey legal title of the boat ramp area to the association; and, in conjunction with the boat ramp, provide a parking area 96 feet wide abutting on Shadow Run Boulevard at Lot 14, Unit 1, Shadow Run Subdivision, running from Shadow Run Boulevard to the water. This agreement was not recorded. No evidence was submitted when, or if, Lenhardt disposed of his ownership interest in Suncoast and Timber Oaks and terminated his management role in those companies. Lenhardt was listed as Secretary/Treasurer of Suncoast in the annual corporate report for 1980. His name on the 1981 annual corporate report for Suncoast was lined out and Linda Burr's name was added as Secretary. Lenhardt's name does not appear on subsequent reports. Timber Oaks, Inc., was incorporated February 11, 1980, with C. Thomas Petersen as President, Peter M. Lenhardt as Vice President, and Linda Burr as Secretary (Exhibit 3). On the 1981 annual corporate report Lenhardt's name was lined out and Linda Burr's name was added as Secretary. Coppice-Boden, Inc., was incorporated August 28, 1980, with Peter Lenhardt as President, Helen K. Lenhardt as Vice President, and Delores Hamm as Secretary. Hamm's name was deleted from the 1982 annual corporate report and both Lenhardts continued to be listed through the 1984 annual corporate report. No evidence was submitted showing transfer of the property which included Lot 14, Unit 1, Shadow Run Subdivision 1, from Suncoast to Timber Oaks, Inc.; however, by warranty deed dated October 29, 1982, Timber Oaks, Inc., conveyed property which specifically included Lot 14, Unit 1, Shadow Run Subdivision 1, to Coppice-Boden Corp., for a stated consideration of $340,000 (Exhibit 5). On November 11, 1982, Coppice-Boden, Inc., mortgaged the property which included Lot 14, Block 1, Unit 1, Shadow Run Subdivision, to G. G. Moore to secure a note in the amount of $72,031.63. The Special Warranty Deed dated February 29, 1980 (Exhibit 8) whereby Community Banks of Pinellas conveyed certain property to Timber Oaks, Inc., excluded Lots 1 through 22, inclusive, of Block 1, of Shadow Run, Unit 1.
Findings Of Fact In the summer of 1986, petitioner, Leo R. Fleming, as the agent for a Mr. Griffin, entered into an agreement with Jimmy Davis, representing D & M Pecan Company, to sell an unspecified amount of watermelons to D & M at the "ground" price which was to be determined daily. The parties also agreed to "joint" the melons, meaning that D & M and Mr. Griffin would split whatever profit or loss was made on the sale of the watermelons. Under the terms of the agreement D & M supplied the trucks and petitioner was responsible for harvesting and loading the melons on the trucks. Fifteen loads of watermelons were loaded and sold to D & M between June 28 and July 2, 1986. On June 28, 1986, D & M paid petitioner $3,000 as an advance on the watermelons so that the field crew could be paid. On June 30, 1986, D & M paid $5,000 and on July 2, 1986, D & M paid $3,000. None of the monies paid to petitioner between June 28 and July 2 were for specific loads or lots of melons, but were advances to be credited against the total amount that was ultimately owed to petitioner. From the first day of loading, June 28, 1986, D & M experienced problems with the melons loaded by petitioner. Mr. Davis would call petitioner the night before the loading to advise him as to the type and size of melon that was to be put on each truck to be loaded the following day. However, petitioner would get the orders confused, which resulted in the trucks being loaded with a different size and type of watermelon than was ordered. D & M usually did not discover the problem until the trucks reached their destination. On a few occasions, the discrepancies were discovered when petitioner called back in after the trucks had left the field to report the amount of melons put on each truck. In any event, the failure to load the right melons on the trucks caused D & M to have to find other buyers and reroute the trucks or reduce the price of the melons delivered. On July 12, 1986, petitioner and Mr. Davis met in Cordele, Georgia, for the purpose of determining the amount owed by D & M for the watermelons. Petitioner brought typed invoices with him which reflected the type of watermelon, the number of pounds shipped, and ground price per pound for each lot or load. However, due to the problems with the wrong melons being loaded, the parties agreed to reduce the price per pound on those loads which had not been loaded as ordered. The adjusted price agreed upon was written on the original invoices and the typed price was marked through. No adjustment was made for the lots that were loaded properly. Lot 621 was not included in the negotiations because petitioner did not present an invoice for that lot and neither party at that time knew what had happened to that truck. However, the parties did agree to settle the other 14 loads for a total price of $25,783.60. (See Appendix A which lists the invoiced price and negotiated price per load.) D & M deducted $10,000 from that total for the advances that had been made and gave petitioner a check for $15,783.60. 1/ The stamp marks on the back of the check reveal that the check was deposited by petitioner on or before July 14, 1986. On July 15, 1986, petitioner wrote a check to the grower for the watermelons. The amount of the check was based on the negotiated price minus petitioner's commission and the cost of the harvesters. This amount is reflected on the original invoices. (P.Ex.1) However, Mr. Griffin did not accept the changes in the price and insisted upon payment from petitioner based on the original invoiced amount. Petitioner then paid Mr. Griffin based on the original invoiced amount "for keeping him from going to the PACA." (T-30) Thereafter, on August 6, 1986, petitioner sent D & M a statement reflecting a balance due based on the original invoiced amounts. From thee evidence presented, it is clear that on July 12, 1986, the parties reached an agreement concerning the full amount to be paid for all the loads of watermelons purchased by D & M except for the load labelled Lot No. 621. D & M admits that it owes petitioner for Lot No. 621, but it contends that it only owes $1,898.40 for that load, whereas the invoice indicates that $2,133.90 is owed. Mr. Davis explained that D & M should not have to pay $2,133.90 for that load because that was the total amount it was able to get for the load. In other words, if D & M paid the full invoiced amount, it would not make a profit. Nevertheless, the original agreement of the parties was that D & M would pay ground price for the melons. D & M paid full invoice price on the melons that were correctly loaded and paid an agreed upon adjusted price for the melons that were not loaded as ordered. D & M failed to present any evidence establishing that Lot No. 621 consisted of melons that were not of the type and size ordered. Therefore, D & M owes petitioner $2,133.90 for Lot 621.
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 directing respondent to pay petitioner the sum of $2,133.90 within 15 days after the final order is entered. DONE AND ENTERED this 26th day of February, 1988, in Tallahassee, Leon County, Florida. DIANE A. GRUBBS Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904)488-9675 Filed with the Clerk of the Division of Administrative Hearings this 26th day of February, 1988.
The Issue The issues concern the complaint by Petitioner against Respondents for the alleged failure to pay for $125.00 worth of medium zucchini squash also referred to as medium green squash. See Sections 604.15 through 604.30, Florida Statutes.
Findings Of Fact Petitioner sells produce. East Coast purchases produce and resells that produce at wholesale. The transaction which is in dispute here concerns an April 25, 1990 sale of medium zucchini squash. On that date Jerry B. Portnoy, Vice President for East Coast who runs the day to day operations of the company and buys produce spoke with Petitioner. In that conversation, which took place early in the morning, Petitioner stated that he had the squash to sell. Portnoy told Petitioner that he had plenty of that form of produce on hand. Petitioner stated that this was the last picking and that he would give Portnoy a good price. The price that Petitioner mentioned was $2.50 a crate. Mr. Portnoy said that he could use about 100 crates and he reiterated that he had plenty of that type of produce on hand. That comment by Mr. Portnoy met with the remark by Petitioner which was to the effect, that there might be a few additional crates above the 100 discussed. Portnoy said that he did not need any more than 100 crates in that he had plenty of that produce on hand. As Portnoy described at hearing, he felt that he really did not even need 100 crates; however, based upon the past working relationship between the Petitioner and Portnoy he agreed to take 100 crates. Contrary to the agreement between Portnoy and the Petitioner, sometime on the evening of April 25, 1990, Petitioner delivered 236 crates of the squash. No one was at East Coast at its Jacksonville, Florida business location to receive the squash and inspect them. East Coast would not have accepted 236 crates that were delivered if it had known of that number of crates. No one was available to inspect the squash until the following morning. On April 26, 1990, Mr. Portnoy examined the squash and found that some of the product was inferior and was in a state of decay. As a consequence, Mr. Portnoy called the Petitioner on the telephone on that morning and told the Petitioner that the Petitioner had sent too many crates and some of the squash were bad. Nonetheless, Mr. Portnoy told Petitioner that he would work it out as best he could, meaning that he would sell as much of the product as possible. During contact with the Petitioner on the part of East Coast, Petitioner did not ask for a federal inspection. East Coast was able to sell all but 50 crates of the squash as delivered. It submitted payment in the amount of $465 as reflected on the face of the invoice which Petitioner sent to East Coast. That exhibit is Respondent's Exhibit No. 1, admitted into evidence. It reflects that 50 crates were dumped which had they been sold would have been worth $125.00. It is that $125.00 which is in dispute. Mr. Portnoy called the Petitioner after the squash had been sold. That call took place a couple of weeks later. In the course of this conversation the Petitioner said that he did not want to hear about problems anymore and that he wanted to be paid for the full amount of all crates delivered. Mr. Portnoy said that 50 crates had been lost and that the amount being remitted through a check would relate only to those crates that had been sold. This describes the amount remitted on June 15, 1990 set out in Respondent's Exhibit No. 1. Petitioner replied that he did not know if he would cash the check or not. Mr. Portnoy said that the check in the amount of $465.00 was for payment in full. This concluded their business until the time of the complaint filed by the Petitioner. On that facts as reported, there was no agreement to sell more than 100 crates. The additional crates that were sold by East Coast was a gratuitous gesture on the part of East Coast for which Petitioner was paid the full amount. The 50 crates that were not paid for contained inferior products for which Petitioner was not entitled to payment. This speaks to the 50 crates that were dumped which had they been sold would have been worth $125.00.
Recommendation Based upon the consideration of the facts found and the conclusions of law, it is recommended that a Final Order be entered which dismisses the complaint of the Petitioner and relieves the Respondents of any financial obligation to pay the contested $125.00 claim. RECOMMENDED this 8th day of April, 1991, in Tallahassee, Florida. CHARLES C. ADAMS, 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 8th day of April, 1991. COPIES FURNISHED: David Browning c/o David Browning Wholesale Produce 234 Church Street Starke, FL 32091 East Coast Fruit Company Jerry Portnoy, Vice President Post Office Box 2547 Jacksonville, FL 32203 James W. Sears, Esquire 511 North Ferncreek Avenue Orlando, FL 32803 Clinton H. Coulter, Jr., Esquire Department of Agriculture and Consumer Services Mayo Building Tallahassee, FL 32399-0800 Bob Crawford, Commissioner Department of Agriculture and Consumer Services The Capitol, PL-10 Tallahassee, FL 32399-0810
The Issue The issue in this case is whether Respondent citrus dealer owes Petitioner citrus producer a sum of money for grapefruits that Respondent harvested from Petitioner’s grove.
Findings Of Fact The evidence presented at final hearing established the facts that follow. Sunrise Citrus Groves, Inc. (“Sunrise”) is a producer of citrus, meaning that it grows citrus in this state for market. It is also a Florida-licensed citrus fruit dealer operating within the Department’s regulatory jurisdiction. Tuxedo Fruit Company (“Tuxedo”) is a Florida-licensed citrus fruit dealer. On or about October 18, 2000, Sunrise and Tuxedo entered into a contract under which Tuxedo agreed to harvest “flame” grapefruits from Sunrise’s grove known as “Gulfstream.” are a variety of grapefruit; the varieties are distinguished by the color of the fruit’s meat, e.g. red, ruby, pink.) Tuxedo agreed to pay $4.00 per box of fruit harvested at the Gulfstream grove. Between October 16, 2000 and March 14, 2001, Tuxedo harvested 5,808 boxes of flame grapefruits pursuant to its contract with Sunrise. Accordingly, Tuxedo was obligated to pay Sunrise $23,232 for the fruit. Tuxedo did not pay for the grapefruits harvested from the Gulfstream grove. On October 11, 2001, Sunrise sent Tuxedo an invoice for the past due amount of $23,232. Tuxedo did not object to this statement of account. At hearing, Tuxedo admitted the above facts. Tuxedo’s position was that Sunrise had breached a separate contract relating to red grapefruits which Tuxedo had agreed to harvest from a grove called “Sun Rock.” As a result of this alleged breach, Tuxedo claimed to have suffered damages exceeding the amount sought by Sunrise. It is not necessary to make detailed findings of fact concerning the Sun Rock transaction, however, because the undersigned has concluded that the alleged breach of contract action that Tuxedo attempted to prove is not properly before the Division of Administrative Hearings (“DOAH”). Ultimate Factual Determination Tuxedo failed to pay for the citrus fruit harvested from the Gulfstream grove that was the subject of a contract between Sunrise and Tuxedo. Sunrise performed all of its duties under that contract and is not in breach thereof. Tuxedo, therefore, is indebted to Sunrise in the amount of $23,232. CONSLUSIONS OF LAW The Division of Administrative Hearings has personal and subject matter jurisdiction in this proceeding pursuant to Sections 120.569 and 120.57(1), Florida Statutes. Chapter 601, Florida Statutes, is known as "The Florida Citrus Code of 1949." Section 601.01, Florida Statutes. "Citrus fruit" is defined in Section 601.03(7), Florida Statutes, as all varieties and regulated hybrids of citrus fruit and also means processed citrus products containing 20 percent or more citrus fruit or citrus fruit juice, but, for the purposes of this chapter, shall not mean limes, lemons, marmalade, jellies, preserves, candies, or citrus hybrids for which no specific standards have been established by the Department of Citrus. Additionally, the term “grapefruit” is defined to mean “the fruit Citrus paradisi Macf., commonly called grapefruit and shall include white, red, and pink meated varieties[.]” Section 601.03(22), Florida Statutes. A "citrus fruit dealer" is defined in Section 601.03(8), Florida Statutes, as any consignor, commission merchant, consignment shipper, cash buyer, broker, association, cooperative association, express or gift fruit shipper, or person who in any manner makes or attempts to make money or other thing of value on citrus fruit in any manner whatsoever, other than of growing or producing citrus fruit, but the term shall not include retail establishments whose sales are direct to consumers and not for resale or persons or firms trading solely in citrus futures contracts on a regulated commodity exchange. Both Sunrise and Tuxedo are citrus fruit dealers under this definition. Sunrise also falls within the definition of “producer.” See Section 601.03(29), Florida Statutes (defining the term as “any person growing or producing citrus in this state for market”). Citrus fruit dealers are required to be licensed by the Department in order to transact business in Florida. Section 601.55(1), Florida Statutes. As a condition of obtaining a license, such dealers are required to provide a cash bond or a certificate of deposit or a surety bond in an amount to be determined by the Department "for the use and benefit of every producer and of every citrus fruit dealer with whom the dealer deals in the purchase, handling, sale, and accounting of purchases and sales of citrus fruit." Section 601.61(3), Florida Statutes. Section 601.65, Florida Statutes, provides that "[i]f any licensed citrus fruit dealer violates any provision of this chapter, such dealer shall be liable to the person allegedly injured thereby for the full amount of damages sustained in consequence of such violation." This liability may be adjudicated in an administrative action brought before the Department or in a "judicial suit at law in a court of competent jurisdiction." Id. Section 601.64(4), Florida Statutes, defines as an "unlawful act" by a citrus fruit dealer the failure to pay promptly and fully, as promised, for any citrus fruit which is the subject of a transaction relating to the purchase and sale of such goods. Any person may file a complaint with the Department alleging a violation of the provisions of Chapter 601, Florida Statutes, by a citrus fruit dealer. Section 601.66(1), Florida Statutes. The Department is charged with the responsibilities of determining whether the allegations of the complaint have been established and adjudicating the amount of indebtedness or damages owed by the citrus fruit dealer. Section 601.66(5), Florida Statutes. If the complaining party proves its case, the Department shall "fix a reasonable time within which said indebtedness shall be paid by the [citrus fruit] dealer." Thereafter, if the dealer does not pay within the time specified by the Department, the Department shall obtain payment of the damages from the dealer's surety company, up to the amount of the bond. Section 601.66(5) and (6), Florida Statutes. Sunrise bore the burden of proving the allegations in its Complaint against Tuxedo by a preponderance of the evidence. See Florida Department of Transportation v. J.W.C. Co., Inc., 396 So. 2d 778, 788 (Fla. 1st DCA 1981); Florida Department of Health and Rehabilitative Services v. Career Service Commission, 289 So. 2d 412, 415 (Fla. 4th DCA 1974); Section 120.57(1)(j), Florida Statutes. Sunrise carried its burden of proving that Tuxedo has failed and refused to pay, as agreed, for citrus fruit that Tuxedo harvested from Sunrise’s Gulfstream grove. Tuxedo’s allegation that Sunrise breached a contract unrelated to the one upon which Sunrise has based its demand for payment constitutes an independent cause of action and claim for relief. See Storchwerke, GMBH v. Mr. Thiessen’s Wallpapering Supplies, Inc., 538 So. 2d 1382, 1383 (Fla. 5th DCA 1989). In the parlance of civil litigation, Tuxedo’s contentions would be called a counterclaim. See Haven Federal Savings & Loan Ass’n v. Kirian, 579 So. 2d 730, 733 (Fla. 1991)(“A counterclaim is a cause of action that seeks affirmative relief[.]”). Had Sunrise elected to pursue its claim in circuit court pursuant to Section 601.65, Florida Statutes, rather than before the Department, then Tuxedo properly might have sought leave to bring its claim relating to the Sun Rock transaction as a permissive counterclaim. See Rule 1.170(b), Florida Rules of Civil Procedure. But this is an administrative proceeding, and there exists no procedural vehicle through which Tuxedo may assert a permissive counterclaim for breach of contract. The question whether Tuxedo’s claim of breach is properly before DOAH is not merely procedural, but touches the fundamental consideration of subject matter jurisdiction. To be entitled to administrative remedies for Sunrise’s alleged breach of contract, Tuxedo must file a complaint with the agency having jurisdiction in the matter; it cannot directly initiate proceedings before DOAH. See Section 601.66, Florida Statutes. DOAH’s jurisdiction does not attach until the agency refers the dispute to this tribunal for adjudication. Tuxedo has not filed a complaint against Sunrise with the Department, and thus (obviously) the Department has not referred the matter to DOAH. Therefore, DOAH does not have jurisdiction to entertain Tuxedo’s claim for relief based on the alleged Sun Rock transaction. In the alternative, Tuxedo’s allegations arguably might be regarded——and reached——as an affirmative defense. See Kirian, 579 So. 2d at 733 (“[A]n affirmative defense defeats the plaintiff’s cause of action by a denial or confession and avoidance.”). Specifically, Tuxedo’s allegations, if established, might provide the basis for a set off, which is a recognized affirmative defense. See Kellogg v. Fowler, White, Burnett, Hurley, Banick & Strickroot, P.A., 807 So. 2d 669, 26 Fla. L. Weekly D2811, 2001 WL 1504231, *4 n.2 (Fla. 4th DCA Nov. 28, 2001)(“A set-off is an affirmative defense arising out of a transaction extrinsic to a plaintiff’s cause of action.”). It is concluded, however, that because DOAH does not have subject matter jurisdiction over Tuxedo’s allegations as a counterclaim for breach of contract, the same allegations cannot simply be treated as an affirmative defense and adjudicated on that basis. To be heard, the defense of set off must be within the tribunal’s jurisdiction. See Metropolitan Cas. Ins. Co. of New York v. Walker, 9 So. 2d 361, 363 (Fla. 1942). A contrary ruling would permit Tuxedo to bring in through the back door a claim that was turned away at the front. Even if Tuxedo’s claim were cognizable as an affirmative defense, notwithstanding Tuxedo’s failure properly to initiate such claim pursuant to Section 601.66, Florida Statutes, the issue could not be reached for an independent reason: implied waiver. In the context of a civil suit, a party’s failure to allege an affirmative defense in its responsive pleading effects a waiver thereof. See Gause v. First Bank of Marianna, 457 So. 2d 582, 585 (Fla. 1st DCA 1984)(“Affirmative defenses must be raised in the pleadings or they are waived.”). Since a dealer who disputes the allegations of a complaint filed with the Department under Section 601.66 is required by that statute to submit an answer in writing, it is concluded that a dealer-respondent, like a defendant in a civil lawsuit, waives any affirmative defenses not raised in his responsive pleading. Otherwise, a dealer-respondent could sandbag the claimant at final hearing. Having failed to plead the Sun Rock matter in its response to Sunrise’s complaint, Tuxedo waived the affirmative defense of set off.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department enter a final order awarding Sunrise the sum of $23,232. DONE AND ENTERED this 1st day of April, 2002, in Tallahassee, Leon County, Florida. JOHN G. VAN LANINGHAM Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 1st day of April, 2002. COPIES FURNISHED: John Scarborough, General Manager Sunrise Citrus Groves, Inc. 2410 Southeast Bridge Road Hobe Sound, Florida 33455 John A. Scotto, President Tuxedo Fruit Company 1110 North 2nd Street Fort Pierce, Florida 34950 Sharon Sergeant Continental Casualty Company CNA Plaza Floor 13-South Chicago, Illinois 60685 Honorable Charles H. Bronson Commissioner of Agriculture Department of Agriculture and Consumer Services The Capitol, Plaza Level 10 Tallahassee, Florida 32399-0810 Richard D. Tritschler, General Counsel Department of Agriculture and Consumer Services The Capitol, Plaza Level 10 Tallahassee, Florida 32399-0810 Brenda D. Hyatt, Bureau Chief Department of Agriculture and Consumer Services 500 Third Street Northwest Post Office Box 1072 Winter Haven, Florida 33882-1072
The Issue Does Respondent Sanford Produce Exchange, Incorporated (Sanford), owe Petitioner for agricultural products purchased by Sanford from Petitioner between April 1, 1997, and April 25, 1997?
Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the hearing, the following relevant findings of fact are made: At all times pertinent to this proceeding, Petitioner was in the business of growing and selling "agricultural products" as that term is defined in Section 604.15(3), Florida Statutes, and was a "producer" as that term is defined in Section 604.15(5), Florida Statutes. At all times pertinent to this proceeding, Sanford was licensed as a "dealer in agricultural products" as that term is defined in Section 604.15(1), Florida Statutes. Sanford was issued license number 9434 by the Department, which is supported by bond number 957712 20250566 in the amount of $31,000, written by Auto Owners, as surety, with an inception date of October 25, 1996, and an expiration date of October 24, 1997. The Complaint was timely filed by Petitioner in accordance with Section 604.21(1), Florida Statutes. Beginning April 1, 1997, and ending on April 25, 1997, Sanford ordered and agreed to pay for the following agricultural products from Petitioner, which Petitioner shipped by truck to Sanford: Date Item Quantity Price Total 4/1/97 Green Cabbage 100 $ 4.50 $ 450.00 4/1/97 Green Cabbage Bags 325 $ 3.50 $1,137.50 4/2/97 Green Cabbage 125 $ 4.50 $ 562.50 4/2/97 Green Cabbage Bags 100 $ 3.50 $ 350.00 4/17/97 Green Cabbage Bags 226 $ 3.00 $ 678.00 4/17/97 Medium Green Squash 77 $12.35 $ 950.95 4/18/97 Yellow Crookneck Squash 40 $ 5.00 $ 200.00 Fancy Yellow Squash 110 $ 8.35 $ 918.50 Medium Yellow Squash 40 $ 6.35 $ 254.00 Fancy Zucchini 79 $12.35 $ 975.65 Medium Zucchini 40 $10.35 $ 414.00 4/25/97 Yellow Crookneck Squash 40 $ 8.35 $ 334.00 Number 1 Yellow Crookneck Squash 120 $ 5.35 $ 642.00 Number 2 Fancy Zucchini 80 $ 6.35 $ 508.00 Medium Zucchini 50 $ 4.35 $ 217.50 4/25/97 Fancy Zucchini 92 $ 6.35 $ 584.20 Total $9,176.80 The above shipments are represented by invoice numbers 07987, 07991, 07772, 07773, 07785, 07896, and 07802, respectively. Petitioner has billed Sanford for the amount of $9,176.80, which Sanford has failed to pay. The cabbage, squash, and zucchini shipped to Sanford between April 1, 1997, and April 25, 1997, by Petitioner was of the quality purchased by Sanford and was in good condition when shipped.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Department enter a final order finding that Sanford Produce Exchange, Incorporated, owes Fresh Pride Sales, Incorporated, the sum of $9,176.80. DONE AND ENTERED this 14th day of January, 1998, in Tallahassee, Leon County, Florida. _ WILLIAM R. CAVE Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6947 Filed with the Clerk of the Division of Administrative Hearings this 14th day of January, 1998. COPIES FURNISHED: Honorable Bob Crawford Commissioner of Agriculture Department of Agriculture and Consumer Services The Capitol, Plaza 10 Tallahassee, Florida 32399-0810 Richard Tritschler General Counsel Department of Agriculture and Consumer Services The Capitol, Plaza Level 10 Tallahassee, Florida 32299-0810 Brenda Hyatt, Chief Bureau of Licensing and Bond Department of Agriculture and Consumer Services 508 Mayo Building Tallahassee, Florida 32399-0810 Troy Cobb Qualified Representative Fresh Pride Sales, Incorporated Post Office Box 577 Wauchula, Florida 33873 Anthony L. Thomas, President Sanford Produce Exchange, Incorporated 6060 Hensel Road Port Orange, Florida 32119 F. J. Manuel, Jr., Esquire Sears and Manuel, P.A. 511 North Ferncreek Avenue Orlando, Florida 32803
The Issue The issue in this case is whether Respondent Clark's Country Farmers Market, Inc. owes Petitioner a sum of money for shipments of citrus fruit.
Findings Of Fact The evidence presented at final hearing established the facts that follow. The Parties and Their Problem Spyke's Grove and Clark's are "citrus fruit dealers" operating within the Department's regulatory jurisdiction. As a wholesale shipper, Spyke's Grove packages and arranges for delivery of citrus products pursuant to purchase orders that retail sellers such as Clark's submit. The packages typically are labeled with the retail seller's name, and thus the retail buyer (and the recipient, if the citrus is purchased as a gift) usually will not be aware of Spyke's Grove's involvement. The instant case involves a series of orders that Clark's placed with Spyke's Grove between October and December 1999 for packages of gift fruit. Under a number of informal, largely unwritten contracts, Spyke's Grove agreed, each time it received an order from Clark's, to ship a gift fruit box or basket to the donee designated by Clark's' retail customer, for which fruit shipment Clark's agreed to pay Spyke's Grove. Spyke's Grove alleges that Clark's failed to pay in full for all of the gift fruit packages that Clark's ordered and Spyke's Grove duly shipped. Clark's contends (though not precisely in these terms) that Spyke's Grove materially breached the contracts, thereby discharging Clark's from further performance thereunder. The Transactions From mid-October 1999 until around December 12, 1999, Clark's faxed or e-mailed to Spyke's Grove approximately 350 individual orders for gift fruit packages. Among other information, each order consisted of a shipping label that identified the product (e.g. the type of gift box or basket), the intended recipient, and the destination. Spyke's Grove manifested its intent to fill these orders by faxing statements of acknowledgment to Clark's, by telephoning Clark's, or both. Although the many contracts that arose from these transactions were thus documented, the writings left much unsaid. For example, the parties did not explicitly agree in writing that Spyke's Grove would deliver the subject gift baskets to the donees before Christmas, nor did they make any express oral agreements to this effect.1 Further, the parties did not specifically agree that Spyke's Grove would be obligated to deliver the gift fruit into the hands of the donees and bear the risk of loss until such tender of delivery. Rather, the contracts between Spyke's Grove and Clark's were ordinary shipment contracts that required Spyke's Grove to put the goods into the possession of carriers (such as the U.S. Postal Service or United Parcel Service) who in due course would deliver the packages to the donees. For many weeks, until early December 1999, Clark's placed orders, and Spyke's Grove filled them, under the arrangement just described. The relationship was not completely trouble-free, for the parties had some problems with duplicate orders. Most, if not all, of these difficulties stemmed from the implementation of a computerized ordering system which allowed Clark's to "export" orders directly to Spyke's Grove's electronic database. The parties recognized at the time that errors were occurring, and they attempted contemporaneously to identify and purge unintended duplicates. Pursuant to the course of dealing between these parties, Spyke's Grove filled orders that were not affirmatively identified as errors prior to the scheduled shipment date. The Fire On the night of Sunday, December 12, 1999, a devastating fire at Spyke's Grove's premises caused substantial damage, temporarily disrupting its citrus packing and shipping operations at the peak of the holiday season. Working through and around the loss, Spyke's Grove soon recovered sufficiently to reopen for business. By around noon on Tuesday, December 14, 1999, its telephone service had been restored, and activities relating to shipping resumed on Friday, December 17, 1999. The Aftermath Meantime, Clark's contends, customers had begun calling Clark's on December 10, 1999, to complain that gift fruit packages were not being received as promised. None of the customers testified at hearing, however, and therefore no competent, non-hearsay evidence establishes the contents of their alleged out-of-court statements. On December 14, 1999, following several unsuccessful attempts to communicate with Spyke's Grove shortly after the fire (about which Clark's remained unaware), Denise Clark, acting on behalf of Clark's, reached Robert Spiece, a representative of Spyke's Grove, on his cell phone. At hearing, Ms. Clark and Mr. Spiece gave conflicting accounts as to the substance of their December 14, 1999, telephone conversation. Neither disputed, however, that during this conversation Ms. Clark and Mr. Spiece agreed, at Ms. Clark's request, that all orders of Clark's not yet shipped by Spyke's Grove would be canceled, effective immediately, as a result of the fire. Although Ms. Clark claimed that Mr. Spiece further informed her that Spyke's Grove could not identify which orders had been shipped, the factfinder does not believe that Mr. Spiece made such a sweeping negative statement. Rather, as Mr. Spiece explained at hearing, Ms. Clark probably was told that information regarding the filled orders would not be available that day. Without waiting for further information from Spyke's Grove, Clark's began calling its retail customers to ascertain whether they had received packages that were supposed to have been shipped by Spyke's Grove. Employees of Clark's who had participated in this process——which took four to five days—— testified at hearing about conversations between themselves and various customers. As uncorroborated hearsay, however, the out- of-court statements attributed to these customers were not competent substantial evidence upon which a relevant finding of fact, e.g. that any particular customer or customers had not received their gift fruit, could be based. Moreover, this hearsay evidence, even if competent, would still have been too anecdotal to establish persuasively any widespread failure on the part of the carriers to deliver the packages shipped by Spyke's Grove. On December 15, 1999, Spyke's Grove prepared three draft invoices for the gift fruit packages that Clark's had ordered and which Spyke's Grove had shipped before December 12, 1999. Numbered 1999113001, 1999121101, and 1999121201, the invoices sought payment of $688.72, $2,415.48, and $298.66, respectively. On the first page of Invoice #1999121201, Barbara Spiece, the President of Spyke's Grove, wrote: Some of these were lost in the fire. "A" day left in the morning. "Springfield" was on the floor to go out that night. I realize there are many duplicates in these shipped reports. We tried to watch for them but with different order numbers it was very difficult. Just cross them out [and] you will not be charged for them. I apologize for all of the problems we have had this season [illegible] wish you luck. These bills were faxed to, and received by, Clark's on December 16, 1999. Clark's did not pay the invoices, or dispute them, or cross out the unintended duplicate orders (as it had been invited to do) to effect a reduction in the outstanding balance. Instead, Clark's ignored Spyke's Grove's requests for payment. Not only that, in disregard of its existing contractual obligations and with no advance notice to Spyke's Grove, Clark's proceeded on its own to fill all of the orders that it had placed with Spyke's Grove before December 12, 1999——including those orders that Spyke's Grove, through its draft invoices, claimed to have shipped. Even after the fact, Clark's failed to inform Spyke's Grove that it had, in effect, repudiated its contractual promises to pay Spyke's Grove for the gift fruit packages already shipped as of December 12, 1999 (i.e. the orders not canceled on December 14, 1999). The Inevitable Dispute Having heard nothing from Clark's in response to its December 16, 1999, fax, Spyke's Grove sent its invoices out again, in final form, on January 25, 2000.2 This time, Ms. Spiece did not inscribe any instructions to cross out duplicates for a discount. Numbered 11063001 ($688.72), 11063002 ($2,449.14), and 11063003 ($195.52), these bills totaled $3,333.38. Each of these invoices contained the following boilerplate "terms": Net 14 days prompt payment is expected and appreciated. A 1 ½% monthly service charge (A.P.R. 18% per annum) may be charged on all past due accounts. Customer agrees to pay all costs of collection, including attorneys [sic] fees and court costs, should collection efforts ever become necessary. Clark's did not remit payment or otherwise respond to Spyke's Grove's statements. Accordingly, on June 20, 2000, Spyke's Grove sent a letter to the Department requesting assistance. Clark's was provided a copy of this letter. Shortly thereafter, Spyke's Grove filed a Complaint with the Department, initiating the instant proceeding. Ultimate Factual Determinations Clark's refusal to pay for the goods ordered from and shipped by Spyke's Grove constituted a breach of the contracts between the parties. Spyke's Grove did not materially breach the agreements. Further, Clark's did not object, within a reasonable period of time, to the statements of account that Spyke's Grove rendered preliminarily on December 16, 1999, and finally on January 25, 2000. Accordingly, these invoices amount to an account stated concerning the transactions between the parties. Clark's failed to overcome the presumption of correctness that attaches to an account stated, either by proving fraud, mistake, or error. Spyke's Grove has suffered an injury as a result of Clark's' breach. Spyke's Grove's damages consist of the principal amount of the debt together with pre-award interest at the statutory rate. Accordingly, Spyke's Grove is entitled to recover the following amounts from Clark's: Principal Due Date Statutory Interest $3,333.38 2/08/99 $ 298.66 (2/08/00 - 12/31/00) $ 335.56 (1/01/01 - 11/30/01) $3,333.38 $ 634.22 Interest will continue to accrue on the outstanding balance of $3,333.38 in the amount of $1.00 per day from December 1, 2001, until the date of the final order.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department enter a final order awarding Spyke's Grove the sum of $3,333.38, together with pre- award interest in the amount of $634.22 (through November 30, 2001), plus additional interest from December 1, 2001, until the date of the final order, which will accrue in the amount of $1.00 per day. DONE AND ENTERED this 29th day of November, 2001, in Tallahassee, Leon County, Florida. JOHN G. VAN LANINGHAM Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 29th day of November, 2001.
The Issue The issues presented are whether Respondent, George Mason Citrus, Inc. (Mason), owes Petitioner $10,000 for citrus fruit that Mason purchased from Petitioner and, if so, whether the surety is liable for any deficiency in payment from Mason.
Findings Of Fact Petitioner is a Florida corporation licensed by the Department as a “citrus fruit dealer,” within the meaning of Subsection 601.03(8), Florida Statutes (2005) (dealer).1 The business address for Petitioner is 1103 Southeast Lakeview Drive, Sebring, Florida 33870. Mason is a Florida corporation licensed by the Department as a citrus fruit dealer. The business address for Mason is 140 Holmes Avenue, Lake Placid, Florida 33852. Western is the surety for Mason pursuant to bond number 42292005 issued in the amount of $100,000 (the bond). The term of the bond is August 1, 2004, through July 31, 2005. Petitioner conducts business in Highlands County, Florida, as a dealer and as a “broker” defined in Subsection 601.03(3). In relevant part, Petitioner purchases white grapefruit (grapefruit) for resale to others, including Mason. Mason conducts business in Highlands County as either an “agent,” “broker,” or “handler” defined in Subsections 601.03(2), (3), and (23). On January 31, 2003, Mason contracted with Petitioner to purchase grapefruit from Petitioner pursuant to Fruit Contract number 03-307 (the contract). Mason drafted the contract. The terms of the contract require Petitioner to sell grapefruit to Mason for the 2003, 2004, and 2005 “crop years.” The 2003 crop year began in the fall of 2002 and ended at the conclusion of the spring harvest in 2003. The 2004 and 2005 crop years began in the fall of 2003 and 2004 and ended in the spring of 2004 and 2005, respectively. Only the 2005 crop year is at issue in this proceeding. The contract required Petitioner to deliver grapefruit to a person designated by Mason. Mason designated Peace River Citrus Products, Inc. (Peace River), in Arcadia, Florida, for delivery of the grapefruit at issue. Mason was required by the terms of a Participation Agreement with Peace River to deliver 30,000 boxes of grapefruit to Peace River during the 2005 crop year. In an effort to satisfy its obligation to Peace River, Mason entered into the contract with Petitioner for an amount of grapefruit described in the contract as an “Approximate Number of Boxes” that ranged between 12,000 and 14,000. Petitioner delivered only 2,128 boxes of grapefruit to Peace River. The production of grapefruit was significantly decreased by three hurricanes that impacted the area during the 2005 crop year. The parties agree that Mason owed Petitioner $19,070.03 for the delivered boxes of grapefruit. The amount due included a portion of the rise in value over the base purchase price in the contract caused by increases due to market conditions and participation pay out after the parties executed the contract (the rise).2 On or about October 26, 2005, Mason mailed Petitioner a check for $9,070.03. The transmittal letter for the check explained the difference between the payment of $9,070.03 and the amount due of $19,070.03. Mason deducted $10,000 from the $19,070.03 due Petitioner, in part, to cover the cost of grapefruit Mason purchased from other dealers or growers to make up the deficiency in grapefruit delivered by Petitioner (cover). The $10,000 sum also includes interest Mason claims for the cost of cover and Mason's claim for lost profits. Petitioner claims that Mason is not entitled to deduct lost profits and interest from the amount due Petitioner. If Mason were entitled to deduct interest, Petitioner alleges that Mason calculated the interest incorrectly. The larger issue between the parties is whether Mason is entitled to deduct cover charges from the amount due Petitioner. If Mason were not entitled to cover the deficiency in delivered boxes of grapefruit, Mason would not be entitled to interest on the cost of cover and lost profits attributable to the deficiency. The parties agree that resolution of the issue of whether Mason is entitled to cover the deficiency in delivered boxes of grapefruit turns on a determination of whether the contract was a box contract or a production contract. A box contract generally requires a selling dealer such as Petitioner to deliver a specific number of boxes, regardless of the source of grapefruit, and industry practice permits the purchasing dealer to cover any deficiency. A production contract generally requires the selling dealer to deliver an amount of grapefruit produced by a specific source, and industry practice does not permit the purchasing dealer to cover any deficiency. The contract is an ambiguous written agreement. The contract expressly provides that it is a "Fruit Purchase Contract" and a "delivered in" contract but contains no provision that it is either a box or production contract. The contract is silent with respect to the right to cover. Relevant terms in the contract evidence both a box contract and a production contract. Like the typical box contract, the contract between Mason and Petitioner prescribes a number of boxes, specifically no less than 12,000, that are to be delivered pursuant to the contract. However, the typical box contract does not identify the number of boxes to be delivered as "Approximate No. of Boxes" that ranges between 12,000 and 14,000 boxes. Unlike a production contract, the contract does not identify a specific grove as the source of the required grapefruit. Best practice in the industry calls for a production contract to designate the grove by name as well as the number of acres and blocks. However, industry practice does not require a production contract to identify a specific grove as the source of grapefruit. In practice, Mason treated another contract that Mason drafted with a party other than Petitioner as a production contract even though the contract did not identify a specific grove as the source of grapefruit. The absence of a force majure clause in the contract may evidence either type of contract.3 A box contract typically requires the selling dealer to deliver the agreed boxes of grapefruit regardless of weather events, unless stated otherwise in the contract. However, the absence of such a clause may also be consistent with a production contract because "acts of God" are inherent in a production contract. Such acts, including hurricanes, necessarily limit grapefruit production, and a production contract obligates the selling dealer to deliver only the amount of grapefruit produced. The contract between Petitioner and Mason did not contain a penalty provision for failure to deliver the prescribed boxes of grapefruit (box penalty). The absence of a box penalty in the contract evidences a production contract. The contract identifies Petitioner as the "Grower." A grower typically enters into a production contract. A box contract does not limit the source of grapefruit to be delivered, and the selling dealer in a box contract may obtain grapefruit from anywhere in the state. The contract between Petitioner and Mason limits the source of grapefruit to grapefruit grown in Highlands County, Florida. Mason knew that Petitioner sold only grapefruit from groves in Highlands County, Florida, identified in the record as the Clagget Taylor groves. During the 2003 and 2004 crop years, Petitioner sold only grapefruit from the Clagget Taylor groves. Mason received trip tickets and other documentation related to the delivery of no less than 24,000 boxes of grapefruit, all from the Clagget Taylor groves. The boxes of grapefruit delivered during the 2005 crop year came only from the Clagget Taylor groves. Mason received documentation showing the grapefruit came from the Clagget Taylor groves. Ambiguous written agreements are required by judicial decisions discussed in the Conclusions of Law to be construed against the person who drafted the agreement. Mason drafted an ambiguous agreement with Petitioner. The agreement must be construed against Mason as a production contract. Mason owes Petitioner $10,000 for the delivered grapefruit during the 2005 crop year. The terms of the bond make Western liable for any deficiency in payment from Mason.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department enter a final order directing Mason to pay $10,000 to Petitioner, and, in accordance with Subsections 601.61 and 601.65, requiring Western to pay over to the Department any deficiency in payment by Mason. DONE AND ENTERED this 22nd day of August, 2007, in Tallahassee, Leon County, Florida. S DANIEL MANRY Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 22nd day of August, 2007.
