Findings Of Fact Respondent is a dealer in agricultural products and is licensed by the Department of Agriculture and Consumer Services, under Sections 604.15-604.34, Florida Statutes. On or about April 29, 1987, Steve Brill, who is a project manager and landscape architect employed by Respondent, placed an order with Petitioner, on behalf of Respondent, for various trees. The order was never reduced to writing by Respondent. Respondent ordered six dogwoods, one 18-foot ilex, three 13-foot ilex, 14 laurel oaks, and two ligustrums. Sandra Couey, who took the telephone order for Petitioner, informed Mr. Brill that he could have a higher quality $350 ligustrum or a lower quality $200 ligustrum. He chose the cheaper tree. Mr. Brill requested 18-foot dogwoods, but Ms. Couey informed him that the largest she had was 12 feet. On May 14, 1987, Respondent's driver picked up the trees at Petitioner's nursery. Ms. Couey had removed the ilex from the shipment because these trees, which had been purchased by her from another nursery, were of poor quality. The driver left a check in the amount of $3003, which, by prior agreement of the parties, was not to be deposited for 30 days. Alberto Ribas, president of Respondent, had asked Ms. Couey on the prior day to hold the check until the customer paid Respondent. Immediately upon receiving the shipment, Mr. Brill and Mr. Ribas noticed that the dogwoods were 12 feet and that the quality of the ligustrums were, in Mr. Brill's words, "shaky." Petitioner and Respondent did not communicate again until June 3, 1988, when Ms. Couey telephoned Mr. Ribas to see if she could deposit the check one week early. During the June 3 conversation or shortly thereafter, Mr. Ribas first complained to Ms. Couey about the quality of the trees. He stopped payment on the check and advised Ms. Couey that he intended to procure replacement trees elsewhere, for which Petitioner would be liable, if she did not replace the trees within seven days. Respondent ordered and Petitioner delivered six dogwood trees for a total agreed-upon price of $720, 14 laurel oak trees for a total agreed-upon price of $840, and two ligustrum trees for a total agreed-upon price of $400, which, plus tax, comes to a total of $2058. To date, Respondent has paid nothing of this amount.
Recommendation Based on the foregoing, it is hereby RECOMMENDED that a Final Order be entered requiring Respondent to pay Petitioner the sum of $2058. DONE and RECOMMENDED this 30th day of September, 1988, in Tallahassee, Florida. ROBERT E. MEALE 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 30th day of September, 1988. APPENDIX Treatment Accorded Respondent's Proposed Findings 1-2. Adopted. 3. First sentence adopted. Second sentence rejected as irrelevant. The dogwoods met the requirements of the contract or agreement between Petitioner and Respondent, regardless whether they met the requirements of Respondent's job. 4-5. Adopted in substance. 6-7. Rejected as irrelevant and against the greater weight of the evidence. 8. Adopted in substance. COPIES FURNISHED: Sandy D. Couey, Owner Southern Trees, Inc. Route 1 Box 60-J High Springs, Florida 32643 Stuart H. Sobel, Esquire Sobel & Sobel, P.A. Penthouse 155 South Miami Avenue Miami, Florida 33130 United States Fidelity & Guaranty Company Post Office Box 14143 Tampa, Florida 33623 Clinton H. Coulter, Jr., Esquire Department of Agriculture Consumer Services Mayo Building Ben Pridgeon Bureau of License & Bond Mayo Building Tallahassee, Florida 32399 Robert Chastain General Counsel Department of Agriculture and Consumer Services Mayo Building, Room 513 Tallahassee, Florida 32399-0810 Honorable Doyle Conner Commissioner of Agriculture The Capitol Tallahassee, Florida 32399-0810
The Issue The issue is whether Respondent owes Petitioner $13,853.00 for failure to harvest Petitioner's 2004 Valencia orange crop, as alleged in the Complaint.
Findings Of Fact Petitioner, Lionel LaGrow, is a resident of Highlands County, Florida. Respondent, Chapman Fruit Company, Inc. (hereinafter "Respondent" or "Chapman"), is a Florida corporation with its principal place of business in Hardee County, Florida. Chapman is a duly licensed fruit buyer in the State of Florida and is owned by Ray Chapman (hereinafter referred to as "Mr. Chapman"). Mr. LaGrow owns and operates a 26-acre grove in Highlands County, Florida. At all times relevant to this proceeding, Mr. LaGrow's grove contained varieties of citrus referred to as "Earlies," "Mids," and "Valencias." The Earlies and Mids varieties are picked early in each fruit season and the Valencias are picked late in each fruit season. At all times relevant to this proceeding Reggie Cooper (hereinafter referred to as "Mr. Cooper") was an employee of Chapman. Mr. Cooper was authorized by Chapman to enter into binding agreements and to make arrangements for and supervise the picking and hauling of Mr. LaGrow's citrus. Mr. LaGrow and Chapman entered into a Pick and Haul Contract (hereinafter referred to as "Contract") dated November 9, 2001, by which Mr. LaGrow agreed to sell, and Chapman agreed to purchase, fruit grown on the 26-acre tract located in Highlands County, Florida, for shipping seasons 2001-2002, 2002-2003, and 2003-2004. The Contract did not provide prices within the Agreement itself for picking and hauling the fruit. The parties verbally agreed to prices for picking and hauling at the time of each year's harvest. The Contract, as written, was a "Delivered-In" Contract, meaning that Mr. LaGrow retained the right to arrange for picking and hauling the fruit at any time during the term of the Contract. Mr. Cooper made arrangements for and supervised the picking and hauling of Mr. LaGrow's citrus. After the citrus was picked, Chapman provided Mr. LaGrow statements that accurately and fairly account for all fruit harvested by Chapman's contracted harvester. The statements showed the gross income, the costs of picking and hauling, as well as other expenses, and the net income to Mr. LaGrow. The parties followed the procedure described in paragraph 7, beginning in November 2001 of the 2001-2002 citrus shipping season through the harvesting of the Earlies and Mids in the 2003-2004 fruit season. There were 3,531 boxes of Earlies and Mids harvested by Chapman's contractor in November 2001 for the 2001-2002 citrus shipping season from the LaGrow property. When multiplied by the total pounds of solids (19,881.16), a gross purchase price of $15,904.93 resulted. Picking and hauling in the amount of $2.00 per box was deducted leaving $8,180.86 payable to Mr. LaGrow. Chapman tendered a check in the amount of $8,180.86 to Mr. LaGrow. There were 3,103 boxes of Valencias harvested by Chapman's contractor in March 2002 for the 2001-2002 citrus shipping season from the LaGrow property. When multiplied by the total pounds of solids (21,085.57), a gross purchase price of $20,031.29 resulted. Picking and hauling in the amount of $2.20 per box was deducted leaving $13,134.87 payable to Mr. LaGrow. Chapman tendered a check in the amount of $13,134.87 to Mr. LaGrow. There were 1,785 boxes of Earlies and Mids harvested by Chapman's contractor in the 2002-2003 citrus shipping season from the LaGrow property. When multiplied by the total pounds of solids (11,063.98), a gross purchase price of $10,068.22 resulted. Picking and hauling in the amount of $2.86 per box was deducted leaving $4,628.44 payable to Mr. LaGrow. Chapman tendered a check in the amount of $4,628.44 to Mr. LaGrow. There were 1,594 boxes of Valencias harvested by Chapman's contractor in the 2002-2003 citrus shipping season from the LaGrow property. When multiplied by the total pounds of solids (10,582.23), a gross purchase price of $10,053.12 resulted. Picking and hauling in the amount of $2.77 per box was deducted leaving $5,601.87 payable to Mr. LaGrow. Chapman tendered a check in the amount of $5,601.87 to Mr. LaGrow. There were 316 boxes of Earlies and Mids harvested by Chapman's contractor in the 2003-2004 citrus shipping season by Chapman's contractor from the LaGrow property. When multiplied by the total pounds of solids (1,847.46), a gross purchase price of $1,385.59 resulted. Picking and hauling in the amount of $3.55 per box was deducted leaving $252.57 payable to Mr. LaGrow. Chapman tendered a check in the amount of $252.57 to Mr. LaGrow. There were no problems or disputes between Chapman and Mr. LaGrow regarding the harvesting of the citrus until the 2003-2004 Valencia crop was to be picked. All harvesting of Mr. LaGrow's fruit during the Contract period was performed by Chapman's contracted harvester. There was no fruit harvested from the LaGrow property by any one other than Chapman's contracted harvester during the Contract period. During the Contract period there was a steady decline in production from the LaGrow grove property. From the first year of the Contract to the second year of the Contract there was a nearly 51 percent reduction in the number of net boxes harvested. From the second year of the Contract to the third year of the Contract, with respect to the Earlies and Mids, there was an 82.3 percent reduction in the number of net boxes harvested. There were an insufficient number of boxes of Valencia oranges on the LaGrow property available for harvest in 2004. Had Chapman harvested, or arranged to harvest the 2004 Valencia crop, once picking and hauling charges were applied, a negative balance owed would have resulted. Mr. Cooper, on behalf of Chapman, made multiple attempts to arrange for harvesting of the 2004 Valencia crop, including, but not limited to, contacting M.E. Stephens, IV, who declined to harvest the fruit based on the quantity available for harvest. For the same reason, other harvesters advised Mr. Cooper that they could not harvest the LaGrow 2004 Valencia crop. Though unsuccessful, Mr. Cooper's efforts to have the crop harvested were reasonable under the circumstances. Mr. Cooper never told Mr. LaGrow that because of the quantity of the Valencia oranges in 2004, he was unable to find a contractor to harvest the fruit. Although it became apparent that Mr. Cooper had not arranged for the Valencia oranges to be harvested, Mr. LaGrow never contacted Mr. Chapman or Mr. Cooper. Under the subject Contract, Mr. LaGrow could harvest or make arrangements to have the Valencia oranges harvested. However, Mr. LaGrow failed to take steps in 2004 to have the Valencia oranges harvested and sold. Mr. LaGrow's Complaint contends that Chapman owes him $13,853.00 for failing to harvest and sell the Valencia oranges in the 2004 season. In Petitioner's Proposed Recommended Order, he seeks $9,586.50 in "damages."
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is: RECOMMENDED that the Commissioner of Agriculture enter a final order dismissing Petitioner's Complaint. DONE AND ENTERED this 7th day of November, 2007, in Tallahassee, Leon County, Florida. S CAROLYN S. HOLIFIELD 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 7th day of November, 2007.
Findings Of Fact Trees of Florida, Inc. by its president, Jerry K. Rigsby, contacted Everglades Tree and Plant Farm, Inc. to purchase 30 live oak trees. Rigsby saw the size trees he wanted and requested Petitioner to sell him those trees. Petitioner refused to sell the trees desired because they had not been root pruned. Some 60 to 90 days to recover from root pruning are required before trees can be safely uprooted and replanted. Other live oaks that had been sold by Petitioner to another company, Swanson and Coleman, were on the premises, had been root pruned, and Respondent inquired if it could buy those trees. Petitioner contacted Swanson and Coleman who did not need early delivery and Petitioner told Respondent it would sell Respondent 30 of those trees on a cash only basis. Respondent agreed and sent his truck to pick up the trees. They had not yet been dug and Respondent was advised it would be several days before the trees could be loaded. When the trees were dug, Respondent appeared with $2000 cash and a check for the $1360 balance owed. Despite telling Rigsby the deal was strictly for cash, Beaty accepted the check and Respondent took away the trees. Respondent stopped payment on the check and complained to Petitioner that the trees were below the 16 to 18 feet height Respondent had contracted for. Petitioner had its bank check with the payor bank on whom the check was written and was advised Respondent had insufficient funds on deposit to honor the $1360 check. After some negotiations between the parties, Petitioner agreed to take back the 30 trees and refund Respondent's payment if Respondent would replant the trees and they all lived. Respondent never returned any trees or paid the $1360 balance claimed by Petitioner.
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 Has Respondent Kelly Marinaro, d/b/a Sunny Fresh Citrus Export and Sales Company (Sunny) paid Petitioner Frances A. Oakes and Daniel Holder, d/b/a Oakes Produce Company (Oakes) in full for watermelons (melons) purchased from Oakes during the 1996 melon season which are represented by Sunny/Oakes purchase order numbers 93981/4051, 93905/4063, 93921/4064, 94006/4066, and 93941/4096?
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, Oakes 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. Melons come within the definition of "agricultural products" as defined in Section 604.15(3), Florida Statutes. At all times pertinent to this proceeding, Sunny was licensed as a "dealer in agriculture products" as that term is defined in Section 604.15(1), Florida Statutes. Sunny was issued license number 831 by the Department, which is supported by bond number BND-262218 in the amount of $29,000, written by American, as surety, with an inception date of May 1, 1996, and an expiration date of April 30, 1997. The complaint was timely filed by Oakes in accordance with Section 604.21(1), Florida Statutes. Sometime before June 27, 1996, the parties entered into an oral agreement wherein Oakes would harvest and load melons onto trucks furnished by Sunny at locations specified by Oakes. The agreement provided that: (a) Oakes would guarantee the quality of the melons to be the quality required under a "good delivery" standard at the time of delivery to Sunny's customers, subject to any transit problems or delays in arrival at the customer's location; (b) Sunny would pay Oakes Produce 4.5 cents per pound for the melons loaded onto the trailers and delivered to Sunny's customers; (c) Sunny would be responsible for the cost of delivering the melons to its customers; and (d) settlement was to be made by Sunny within a reasonable time. Frances Oakes testified that Sunny agreed to pay 5 cents per pound for the load of melons represented by Sunny/Oakes purchase order number 94006/4066. However, the more credible evidence is that the agreed upon price for this load of melons was 4.5 cents per pound. Likewise, Kelly Marinaro testified that it was agreed that if the melons did not met the agreed upon quality standard upon delivery to its customers that Oakes would be responsible for all cost of delivery, including freight. However, the more credible evidence is that this was not agreed upon and was not part of the oral agreement. Oakes did not advise Sunny that it would give Sunny "full market protection" on the melons, or that Sunny was to handle the melons "on account" for Oakes. The more credible evidence shows that the watermelons were purchased by Sunny with title to the melons passing to Sunny upon delivery to Sunny's customers and meeting the agreed upon quality standard. 8 Under the terms of the above oral agreement, Oakes loaded 9 loads of melons onto trucks furnished by Sunny that were shipped to Sunny's customers. Oakes alleged in the complaint that Sunny had failed to pay Oakes for 6 of the 9 loads and owed a balance of $9,521.36. However, at the beginning of the hearing, Oakes withdrew from the complaint the load of melons represented by Sunny Oakes/Oakes purchase order number 93924/4069 in the amount of $1,976.40 leaving an alleged balance owed to Oakes by Sunny of $7,544.96. The 5 loads of melons left in contention are the loads represented by Sunny/Oakes purchase order numbers 93891/4051, 93905/4063, 93921/4064, 94006/4066, and 93941/4096, in the amounts of $1,778.66, $2,044.80, $1,859.40, $91.70, and $1,770,40, respectively. Sunny contends that the melons on the loads represented by Sunny/Oakes purchase order numbers 93891/4051, 93905/4063, 93921/4064, and 93941/4096 arrived at their destination in a condition below the agreed upon quality standard which resulted in prices received by Sunny of less than the agreed upon price of 4.5 cents per pound. Based on this contention, Sunny deducted the freight, other applicable costs and its sales charge from the amount alleged to have been received for the melons represented by Sunny/Oakes purchase order numbers 93905/4063, 93921/4064, and 93941/4096, which resulted in Oakes not receiving any payment from Sunny for those melons. In fact, each of the 3 loads of melons showed a negative balance which was charged against other loads with a positive balance. The price received by Sunny for the load of melons represented by Sunny/Oakes purchase order number 93891/4051 resulted in a balance owed Oakes of $547.50 after deductions for freight and other charges. However, in making payment to Oakes, Sunny charged the negative balances of the loads represented by Sunny/Oakes purchase order numbers 93905/4063, 93921/4064 and 93941/4096 against Sunny/Oakes purchase order number 93891/4051, which resulted in Oakes not receiving any payment for this load. 13 As to the load represented by Sunny/Oakes purchase order number 94006/4066, Sunny paid Oakes $825.30, which represents 4.5 cents per pound for 18,340 pounds without any deduction for loads with negative balances. Oakes has been paid in full for this load. There was insufficient evidence to show that the melons represented by Sunny/Oakes purchase order numbers 93891/4051, 93905/4063, 93921/4064, and 93941/4096 did not meet the agreed upon quality standard upon arrival at their destination. There was no dispute as to the weight of the melons. Sunny furnished Oakes trouble reports on the 4 loads of melons represented by Sunny/Oakes purchase order numbers 93981/4051, 93905/4063, 93921/4064, and 93941/4096, indicating problems with the condition of the melons and that the loads would have to be "worked" in order to "move" the melons. Kelly Marinaro testified that either he or employees of Sunny had discussed at least 3 of these reports with Frances Oakes, and that he had authorized Sunny to do what was necessary to move the loads of melons. Frances Oakes testified that he had seen these trouble reports and had discussed at least some of them with either Kelly Marinaro or Sunny's employees. However, Frances Oakes further testified that he was not aware that there was a severe problem with the melons. The more credible evidence is that Kelly Marinaro or an employee of Sunny's discussed these trouble reports with Frances Oakes, and that Frances Oakes authorized Sunny to find someone to "work" the melons. In disposing of the melons, Sunny received less than the agreed upon price of 4.5 cents per pound. Therefore, Sunny deducted the freight, other applicable costs, and Sunny's sales charge which resulted in a negative balances of $81.84, $582.35, and $345.02 for loads represented by Sunny/Oakes purchase order numbers 93905/4063, 93921/4064, and 93941/4096, respectively. There was a positive balance of $547.50 for the load of melons represented by Sunny/Oakes purchase order number 93891/4051. By check dated August 1, 1996, Sunny made an accounting to Oakes which included the loads of melons in dispute and others that were not in dispute. Each purchase order number was listed on the check stub with either a positive or negative amount. The check was in the amount of $4,413.34. This amount was calculated by adding positive amounts and subtracting negative amounts. This was clearly shown on the check stub which Oakes received. On the back of this check Kelly Marinaro had clearly printed "Troubled Settlements Payment In Full" Using its deposit stamp which was stamped directly beneath the language "Troubled Settlements Payment In Full," Oakes deposited this check.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Department enter a Final Order dismissing Oakes' complaint. DONE AND ENTERED this 18th day of July, 1997, 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 (904) 488-9675 SUNCOM 278-9675 Fax Filing (904) 921-6947 Filed with the Clerk of the Division of Administrative Hearings this 18th day of July, 1997. COPIES FURNISHED: Honorable Bob Crawford Commission of Agriculture The Capitol, Plaza Level-10 Tallahassee, Florida 32399-0810 Richard Tritschler General Counsel Department of Agriculture and Consumer Services The Capitol, Plaza Level-10 Tallahassee, Florida 32399-0810 Brenda Hyatt, Chief Bureau of Licensing and Bond Department of Agriculture and Consumer Services 508 Mayo Building Tallahassee, Florida 32399-0810 Frances A. Oakes, pro se 2722 Edson Avenue Fort Myers, Florida 33916 Arthur C. Fulmer, Esquire Post Office Box 2958 Lakeland, Florida 33806 Robert Walman Claims Management Services American Bankers Insurance Company of Florida 11222 Quail Roost Drive Miami, Florida 33157
Findings Of Fact Robert J. Walsh and Company, Inc. has been in the business of selling agricultural products since 1962. It is a "dealer in agricultural products" as defined in s. 604.15(1), Florida Statutes (1985). It is not a "producer" as defined in s. 604.15(5), Florida Statutes (1985). Walsh's modus operandi which it has used for many years is to have its salesmen call on landscapers, nurseries and other customers for trees, plants and other agricultural products to determine their needs. These salesmen have the prices of products and their availability from producers and the salesmen take orders from these purchasers. This order is sent to the producer who delivers the product to the purchaser and sends Walsh a copy of the delivery ticket. Walsh bills the customer for the product delivered and the producer bills Walsh for the consumer-cost of the product less a 20-25 percent discount from which Walsh derives its profit from the sale. The producer relies solely on Walsh for payment for the product it produces and delivers to the customer. Walsh has no authority to sell the product at a price other than that set by the producer. In any event, the producer bills Walsh for the product delivered at the producer's established price less the discount it gives Walsh for acting as intermediary in the sale. If products are damaged in transit, the producer's driver will make any necessary adjustment with the customer or return the damaged plant for replacement by the producer. Walsh does not represent the grower if such a situation develops. Similarly, if the product is rejected by the purchaser for not meeting quality standards, that issue is resolved between the grower and the customer without input from Walsh. Whatever agreement is reached between the grower and the customer is reflected on the invoice signed by the customer and forwarded to Walsh who has the responsibility of collecting from the customer. The grower bills Walsh for the cost of the product less Walsh's commission. The sales forming the bases for the complaints filed by Walsh with Respondent involve sales to Paul Pent, d/b/a Paul Pent Landscape Company, Dean Pent and J & W Landscape. On January 31, 1985, Walsh sold Pent three laurel oaks grown by Stewart Tree Service for a total price of $467.46 including sales tax (Ex. 2). On March 27, 1985, Walsh sold various trees and plants grown by Goochland Nurseries to J & W Landscape for a total price of $403.98 (Ex. 3). On April 22, 1985, Walsh sold two live oaks grown by Stewart Tree Service to Pent Landscape Company for a total price of $336.00 (Ex. 4). On July 3, 1985, Walsh sold various plants grown by Goochland Nurseries to J & W Landscape for a total price of $564.96 (Ex. 5). On all of these sales the producers billed Walsh for the product and were paid by Walsh. Walsh billed the customers who did not pay and Walsh filed the complaints (Ex. 8, 9 and 10), denied by Respondent on grounds Walsh was not an agent or representative of the producers. In 1976, Petitioner filed a complaint against the bond of the Ernest Corporation, a licensed dealer in agricultural products and received $5,589.20 from Respondent who recovered from the bonding company. In the complaint Walsh alleged that it was agent for Southeast Growers, Inc., selling their nursery stock throughout Florida. Respondent's witnesses could not recall what additional evidence they saw to conclude that Walsh was, in fact, an agent for the producer. However, these witnesses all testified that had they then believed Walsh was solely responsible to the producer for payment for the products sold they would not have concluded Walsh was the agent or representative of the producer. The bond on which Petitioner is attempting to recover provides that if the principal "shall faithfully and truly account for and make payment to producers, their agents or representatives, as required by Sections 604.15 - 604.30, Florida Statutes, that this obligation to be void, otherwise to remain in full force and effect." (Ex. 11 and 12)
Conclusions The Division of Administrative Hearings has jurisdiction over the parties to, and the subject matter of these proceedings. Section 604.21, Florida Statutes (1985) provides in pertinent part: Any person claiming himself to be damaged by any breach of the conditions of a bond or certificate of deposit, assignment or agreement given by a licensed dealer in agricultural products as herein before provided may enter complaints thereof against the dealer and against the surety, if any, to the department, which complaint shall be a written statement of the facts constituting the complaint. Section 604.15(1) , Florida Statutes (1985) provides: "Dealers in agricultural products" means any person, whether itinerant or domiciled within this state, engaged within this state in the business of purchasing, receiving, or soliciting agricultural products from the producer or his agent or representative for resale or processing for sale; acting as an agent for such producer in the sale of agricultural products for the account of the producer on a net return basis; or acting as a negotiating broker between the producer or his agent or representative and the buyer. (emphasis supplied) One of the complexities of this case which leads to some confusion is the fact that both Pent and Walsh were dealers in agricultural products as above defined. Walsh fits into the category of a person claiming himself to be damaged by a breach of any condition of the bond of Pent. However, he has the burden of showing that he is a person covered by the bond. According to the terms of the bond, coverage is provided only for "producers, their agents or representatives." Walsh is clearly not a producer in this case but claims coverage as an agent or representative. In construing "agent" or "representative" the legislative intent should be considered. The purpose of these provisions of the statute requiring licensing and bonding of dealers in agricultural products, as expressed in Section 604.151, Florida Statutes, is to protect producers from economic harm. Economic harm sustained by an agent or representative is imputed back to the principals, which in this case are the producers. An agency may be defined as a contract either expressed or implied upon a consideration, or a gratuitous undertaking, by which one of the parties confides to the other the management of some business to be transacted in the former's name or on his account, and by which the latter assumes to do the business and render an account of it. 2 Fl. Jur. 2d "Agency," Section 1. Here, Walsh was selling agricultural products on its own account, which products it was purchasing from the producers. The producer sold its product to Walsh and delivered it to the address Walsh indicated. The customer receipted for the product and the producer billed Walsh for the total cost, including transportation, to the ultimate buyer, less the 20-25 percent commission Walsh received. Walsh paid the producer and billed the customer. Whether or not Walsh collected from the customer had no bearing on the debt Walsh owed the producer for the product. It could be said that the producer was the agent for Walsh in delivering the product to the user. Even though Walsh never had actual possession of the product the sale to Walsh was complete when the producer delivered the product to the user. The entire transaction clearly is a buy-and-sell operation by Walsh and not Walsh acting as an agent for the producer. The fact that Walsh sells the producer's product does not make Walsh the agent or representative of the producer, when the producer holds only Walsh responsible to pay for the product. Nor was Walsh a representative of the producers. Representative is defined in Webster's New Collegiate Dictionary (1977 Ed.) as: "standing or acting for another esp. through delegated authority." Walsh had no delegation of authority to act for the producer. Walsh had no authority to modify the price, settle disputes, or any other function normally performed by a representative. The above interpretation of those having standing to file a complaint against a dealer in agricultural products is the same interpretation of the applicable statutory provisions that is made by Respondent. As stated in Natelson v. Dept. of Insurance, 454 So.2d 31 (Fl 1st DCA 1984): Agencies are afforded a wide discretion in the interpretation of a statute which it [sic] administers and will not be overturned on appeal unless clearly erroneous. The reviewing court will defer to any interpretation within the range of possible interpretations. (citations omitted). This interpretation limiting recovery on an agricultural bond to producers and their agents or representatives is certainly within the range of possible interpretations, especially considering the purpose of these statutory provisions to be the protection of the economic well being of the producer. From the foregoing, it is concluded that Robert J. Walsh & Company, Inc. was not the agent or representative of Goochland Nurseries and Stewart Tree Service and does not have standing to file a complaint against Dean Pent, d/b/a Pent Landscape Company, and Paul Pent, d/b/a Paul Pent Landscape Company, and their surety, Transamerica Insurance Company.
Recommendation It is recommended that a Final Order be entered dismissing the petition as contained in Petitioner's letter dated March 24, 1986. ENTERED this 14th day of July 1986 in Tallahassee, Leon County, Florida. K. N. AYERS Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 14th day of July 1986. COPIES FURNISHED: Honorable Doyle Conner Commissioner of Agriculture The Capitol Tallahassee, Florida 32301 Robert Chastain, Esquire General Counsel Mayo Building, Room 513 Tallahassee, Florida 32301 Thomas M. Egan, Esquire Phillip Kuhn, Esquire Post Office Box 7323 Winter Haven, Florida 33883 Ronnie H. Weaver, Esquire Mayo Building, Room 513 Tallahassee, Florida 32301 Mr. Joe W. Right Bureau of Licensing & Bond Department of Agriculture Mayo Building Tallahassee, Florida 32301
The Issue The issue is whether Garden World of Holiday, Inc., d/b/a Garden World (Respondent), and its surety, Platte River Insurance Company, owe funds to Sturon, Inc. (Petitioner), for the sale of agricultural products.
Findings Of Fact The Petitioner was a producer of agricultural products, specifically tropical foliage materials. The Respondent was a dealer of agricultural products and was apparently involved in a large project that required obtaining substantial quantities of tropical foliage plant product. In July 2006, the Respondent contacted the Petitioner and inquired as to the availability of tropical foliage plant product. The Petitioner and the Respondent had not previously done business together. At the beginning of the sales transactions, the Respondent sought, and the Petitioner granted, a line of credit for the plant material purchases. Beginning on July 28, 2006, and continuing through September 22, 2006, the Respondent purchased and took delivery of tropical foliage plant product from the Petitioner. All materials sold by the Petitioner to the Respondent were in response to telephone orders placed by the Respondent. There is no evidence that the Petitioner charged for any plant materials that were not ordered by the Respondent. All charges for all plants sold by the Petitioner to the Respondent were billed on invoices that were sent by the Petitioner to the Respondent within one day of each delivery. The quantities and prices of the plants were clearly set forth on the invoices. The evidence establishes that the Respondent received the invoices and was aware of the prices being charged by the Petitioner. The Respondent has asserted that there were conversations about the prices being charged by the Petitioner, but there was no evidence presented that there was any agreement between the parties under which the Petitioner agreed to reduce the prices being invoiced. Despite the alleged price concern, the Respondent continued to order plant materials from the Petitioner. Based on a review of the invoices, the total cost of the plant materials sold by the Petitioner to the Respondent was $164,362.67. The Respondent has paid a total of $66,968.69 to the Petitioner. The total unpaid amount is $97,393.98. The Petitioner routinely grew various types of foliage product. When the Petitioner's own supplies were insufficient, or the material requested was not of a type grown by the Petitioner, the Petitioner located and obtained plant materials from other producers for purposes of resale to dealers. The prices of plants obtained from other producers for resale included a "markup" for locating and obtaining the materials for purchase by a dealer. In supplying the plant materials requested by the Respondent in this case, the Petitioner sold from its own inventory and obtained materials from other producers for resale to the Respondent. There was no evidence that the markup was unreasonable or was not common practice in the industry. There is no evidence that the Respondent attempted to locate and obtain plant materials from other suppliers rather than from the Petitioner because of dissatisfaction with the Petitioner's prices. At the hearing, counsel for the Respondent asserted that the Respondent's refusal to pay was related to "price gouging" by the Petitioner. There is no evidence that the Petitioner engaged in "price gouging." There was no evidence that the Respondent could not have located and obtained the plant materials from the same sources from which the Petitioner obtained the materials it did not produce. Although prior to the hearing, the Respondent asserted that some plant materials were not of appropriate quality; there was no evidence presented at the hearing of any quality problems that were not immediately resolved at the time of delivery. At one time, the Respondent asserted that the entity for which the Respondent was purchasing and installing plant materials was tax exempt and that the amount owed should have been accordingly reduced, but there was no evidence offered in support of the assertion and no reduction has been set forth in this Recommended Order. The Respondent presented no evidence to establish any legitimate reason to avoid payment of the $97,393.98 owed to the Petitioner.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Agriculture and Consumer Services enter a final order directing that the Respondent pay the total of $97,393.98, to the Petitioner, and providing for such other procedures as are appropriate to provide for satisfaction of the debt. DONE AND ENTERED this 9th day of July, 2007, 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 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 9th day of July, 2007.
The Issue The issues for determination are whether Respondents are indebted to Petitioner in the amount of $4,273.15 for agriculture products, plus a $50.00 filing fee, totaling $4,323.15; and whether Respondents are indebted to Petitioner in the amount of $551.00 for agriculture products, plus a $50.00 filing fee, totaling $601.00.
Findings Of Fact No dispute exists that, at all times material hereto, Myrick Produce was a producer of agriculture products. No dispute exists that, at all times material hereto, Royal Palm Produce was a dealer in agriculture products. No dispute exists that, at all times material hereto, Royal Palm Produce purchased agriculture products from Myrick Produce. Edward L. Myrick testified on behalf of Myrick Produce. He is the sole owner of Myrick Produce. No one testified on behalf of Royal Palm Produce. Case No. 09-4306 Myrick Produce had an invoice and a corresponding signed bill of lading for each order of Florida produce that was sold to Royal Palm Produce by Myrick Produce. Each invoice provides, among other things, payment terms of 21 days. The bill of lading for each order indicates, among other things, that the produce was received in good condition and that the quantity was verified. Invoice No. 124814 dated January 15, 2009, reflects, among other things, 60 cartons of choice eggplant at a cost of $381.00. Choice eggplant was at a cost of $6.35 per carton. Invoice No. 124994 dated January 21, 2009, reflects, among other things, 60 cartons of choice eggplant at a cost of $381.00. Invoice No. 125139 dated January 27, 2009, reflects, among other things, 27 cartons of choice eggplant at a cost of $171.45. Invoice No. 125263 dated January 30, 2009, reflects, among other things, 60 cartons of choice eggplant at a cost of $381.00. Invoice No. 125383 dated February 3, 2009, reflects, among other things, 60 cartons of choice eggplant at a cost of $501.00. Choice eggplant increased from $6.35 per carton to $8.35 per carton. Invoice No. 125618 dated February 10, 2009, reflects, among other things, 60 cartons of choice eggplant at a cost of $501.00. Invoice No. 126132 reflects, among other things, 60 cartons of choice eggplant at a cost of $441.00. Choice eggplant decreased from $8.35 per carton to $7.35 per carton. As to the date of the Invoice No. 126132, the invoice only reflects the month of February; however, the corresponding Bill of Lading reflects the same invoice number, the same agriculture produce, and the date of February 19, 2009. Consequently, an inference is drawn and a finding of fact is made that the date of the invoice is February 19, 2009. Invoice No. 126570 dated March 3, without a year, reflects, among other things, two cartons of long hot pepper at a cost of $48.70. Long hot pepper was $24.35 per carton. As to the date of Invoice No. 126570, the corresponding Bill of Lading reflects the same invoice number, the same agriculture produce, and a date of March 3, 2009. Consequently, an inference is drawn and a finding of fact is made that the date of the invoice is March 3, 2009. Invoice No. 128289 reflects, among other things, 60 cartons of choice eggplant at a cost of $501.00. Choice eggplant increased from $7.35 per carton to $8.35 per carton. The corresponding Bill of Lading reflects a signature as the “Shipper,” instead of the “Carrier”; whereas, the prior bill of lading reflects a signature as the “Shipper.” Furthermore, the answer by Royal Palm Produce indicates that the claim by Myrick Produce is admitted and valid. Consequently, an inference is drawn and a finding of fact is made that the signature as the “Shipper” was a mistake and that the signature is the “Carrier.” Invoice No. 128378 reflects, among other things, 50 cartons of large cucumber at a cost of $267.50; 50 cartons of select cucumber at a cost of $317.50; and 60 cartons of choice eggplant at a cost of $381.00. Large cucumber was at a cost of $5.35 per carton. Select cucumber was at a cost of $6.35 per carton. Choice eggplant decreased from $7.35 per carton to $6.35 per carton. Myrick Produce’s total claimed indebtedness for agriculture produce is $4,273.15. Royal Palm Produce admits that Myrick Produce’s claim is valid.1 However, Royal Palm Produce asserts that it has partially satisfied and is making payments toward the indebtedness.2 No evidence was presented to support this assertion. Royal Palm Produce has not satisfied any amount of the debt owed. Further, Royal Palm Produce is not making any payments on the debt owed. Royal Palm Produce is indebted to Myrick Produce in the total amount of $4,273.15. Additionally, Myrick Produce is claiming $50.00 for filing the Amended Claim with the Department. No appearance was made by the casualty company, Capitol Insurance Companies. Case No. 09-4606 Myrick Produce is not pursuing any claim against Royal Palm Produce in this case.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Florida Department of Agriculture and Consumer Services enter a final order in Case No. 09-4306 finding that Sun-Rich America, Inc., d/b/a Royal Palm Produce is indebted to Edward L. Myrick, d/b/a Edward L. Myrick Produce in the amount of $4,273.15 and ordering the payment of same, plus a filing fee of $50.00 for filing the Amended Claim; and in Case No. 09-4606 dismissing the Amended Claim. DONE AND ENTERED this 16th day of November, 2009, in Tallahassee, Leon County, Florida. ERROL H. POWELL 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 16th day of November, 2009.
The Issue The issues presented are whether Respondent, Smallwood Design Group/Smallwood Landscape, Inc. (Smallwood or the company), owes Petitioner $12,817.17 for agricultural products and, if so, whether the surety is liable for any deficiency.
Findings Of Fact Petitioner is a Florida corporation licensed by the Department as a “dealer in agricultural products,” within the meaning of Subsection 604.15(2), Florida Statutes (2006) (agricultural dealer).1 The license number and business address of Petitioner are 68954 and 3930 14th Street North, Naples, Florida 34103. Smallwood is a Florida corporation licensed by the Department as an agricultural dealer pursuant to license number 68513. The sole shareholder and registered agent for Smallwood is Ms. JoAnn Smallwood. The business address for Smallwood is 2010 Orange Blossom Drive, Naples, Florida 34109. Hartford Fire Insurance Company (Hartford) is the surety for Smallwood pursuant to bond number 21BSBCI1473 issued in the amount of $100,000 (the bond). The term of the bond is December 9, 2005, through December 9, 2006. Petitioner conducts a garden center business that, in relevant part, sells agricultural products, defined in Subsection 604.15(1). Petitioner sells products at wholesale and retail to businesses and consumers in the Naples area. Smallwood purchased agricultural products from Petitioner from 1983 until sometime in 2006. The purchases were made in the ordinary course of Smallwood's architectural landscape construction and horticultural management business (landscape business). The terms of purchase required payment from Smallwood within 30 days. Any monthly balance that remained unpaid after 45 days was subject to interest at a monthly rate of 1.5 percent and an annual rate of 18 percent.2 With one exception, Smallwood paid Petitioner within 60 days of delivery. The exception to Smallwood's payment history with Petitioner is the subject of this proceeding. From May 11 through September 26, 2006, Smallwood did not pay Petitioner $12,817.17 for 66 invoices involving 440 items (pallets or pieces) of sod that Petitioner delivered to Smallwood.3 The sod consisted of varieties identified in the record as: Floratam, Seville, Zoysia, Croton, and Fountain Grass.4 Smallwood does not deny that Petitioner should be paid $12,817.17. However, Smallwood alleges that Petitioner has filed its claim against the wrong party. Smallwood alleges that, on June 13, 2006, another corporation purchased the assets of Smallwood, including the right to conduct the landscape business in the name of Smallwood, and assumed Smallwood's liability to Petitioner for any prior purchases. Subsequent purchases are allegedly the obligation of the successor corporation. Ms. Smallwood filed a Response to Amended Claim with the Department on January 7, 2007 (the Response). The Response identifies the successor corporation as Spartan Partners, Inc., an Illinois corporation, located at 350 Pfingsten Road, Suite 109, Northbrook, Illinois 60062 (Spartan), and alleges that Petitioner’s claim is not valid because: [Smallwood] sold its assets and has not been engaged in business since June 13, 2006. Specifically, pursuant to an Asset Purchase Agreement, [Smallwood] sold its assets (including its name) to Spartan . . . , and thereafter, Spartan continued operating the business for a period of time and then sold some of the assets and ceased operations. (emphasis supplied) Smallwood . . . does not have knowledge of the accounts of Spartan, which continued doing business under the Smallwood name after the sale of assets on June 13, 2006. If items purchased from [Petitioner] have not been paid for, Spartan is the responsible and liable party. (emphasis supplied) The Response filed in January of 2007 was not the first time Petitioner had seen the Smallwood defense. Smallwood sent Petitioner a form letter, dated September 14, 2006, that: contained a salutation addressing “All Vendors of [Smallwood],” referenced the "Termination of Credit Arrangements and Guaranties," and was signed by Ms. Smallwood on behalf of Smallwood (notice letter). The notice letter provided in relevant part: The purpose of this letter is to advise you that the assets of [Smallwood], including the company name, were sold to Spartan . . . as of June 13, 2006. Since [Smallwood] sold all of its assets, that corporate entity is no longer actively engaged in any business. The business known as [Smallwood] is now conducted by [Spartan]. (emphasis supplied) As a result of the sale of assets and the fact that [Smallwood] is no longer actively engaged in business, the relationship or agreement you had with that particular corporate entity is hereby terminated and of no further force and effect. If you are continuing to do business with [Spartan], you should, if you have not done so already, make or confirm your business arrangements with that entity. Furthermore, if I signed any document that could be construed as a personal guaranty of payment for any obligations of [Smallwood], please consider this letter to be a formal revocation, cancellation and termination of any such document. (emphasis supplied) Petitioner's Exhibit 3 (P-3). Part of the Smallwood defense is supported by the evidence. Smallwood did sell its assets to Spartan. The Asset Purchase Agreement between Smallwood and Spartan was admitted into evidence as Petitioner’s Exhibit 2 (P-2). The Agreement shows that Spartan purchased the assets of Smallwood on June 13, 2006, for $1.030 million, of which $883,602.11 was allocated to accounts receivable due the seller. The seller is identified in the Asset Purchase Agreement as Ms. Smallwood and the company. The seller received $895,500.00 in cash at the closing. The remaining part of the Smallwood defense involves two allegations. First, Smallwood alleges that Spartan assumed a liability of $3,834.43 for 23 purchases of sod by Smallwood from May 11 through June 13, 2006. Second, Smallwood alleges that Spartan owes Petitioner $8,982.74 for 43 purchases of sod from June 14 through September 26, 2006. If the evidence were to support both allegations, the result may effectively deprive Petitioner of an administrative remedy. The corporate documents attached to the Asset Purchase Agreement do not show that Spartan complied with the bond and license requirements in Subsection 604.19 prior to conducting the landscape business in the name of Smallwood. Spartan sold the assets needed to satisfy a judgment against Spartan, Spartan is a foreign corporation, and Spartan no longer conducts the landscape business in Florida. It would be unnecessary to determine whether Smallwood or Spartan is liable for the $12,817.17 if: the terms of the bond were to allow an assignment of the bond to Spartan, and the Asset Purchase Agreement were to show that the bond was one of the contracts assigned to Spartan or one of the assets purchased by Spartan. The bond would cover both Smallwood and Spartan in such a case, and a determination of which shell hid the proverbial pea would be moot. A copy of the bond did not find its way into the record. Petitioner did not submit a copy of the bond for admission into evidence, and the Department did not transmit a copy of the bond when the agency referred the matter to DOAH. The copy of the Asset Purchase Agreement admitted into evidence does not include a schedule of the contracts assigned to Spartan or a schedule of the assets sold to Spartan. A finding that Spartan expressly assumed Smallwood's liability to pay Petitioner $3,834.43 for sod delivered from May 11 through June 13, 2006, is not supported by the evidence. In relevant part, the Asset Purchase Agreement provides: At Closing, Purchaser shall assume those liabilities of Company specifically defined and listed on the Schedule 1.6(b) attached hereto (“Assumed Liabilities”), and Purchaser shall not assume, incur, guarantee, or be otherwise obligated with respect to any liability whatsoever of Company other than as so stated. . . . (emphasis not supplied) Purchaser shall cause Stockholder [Ms. Smallwood] to be released as guarantor or obligor under the Assumed Liabilities. . . . P-2 at 2. Schedule 1.6(b) is missing from the copy of the Asset Purchase Agreement that was admitted into evidence. Even if a complete exhibit were to show that Spartan assumed Smallwood's liability to Petitioner, neither of the respondents submitted evidence or cited legal authority to support a finding that such an assumption released Smallwood from its obligation to Petitioner or otherwise extinguished that obligation. Nor is there any evidence that Petitioner acquiesced in an assumption by Spartan or otherwise released Smallwood from the obligation to pay Petitioner for sod delivered prior to June 13, 2006. The remaining allegation in the Smallwood defense is that Spartan, rather than Smallwood, purchased the sod Petitioner delivered between June 13 and September 26, 2006. It allegedly is Spartan that owes Petitioner $8,982.74. The remaining allegation implicitly argues that, after June 13, 2006, Smallwood was no longer a viable corporation with the legal capacity to purchase sod from Petitioner because the asset sale resulted in what courts describe as a “de facto merger” of Smallwood into Spartan or a “mere continuation of business” by Spartan. The law pertaining to these two doctrines is discussed in the Conclusions of Law, but certain factual findings are relevant to both doctrines. The Smallwood defense is a mutation of the doctrines of "de facto merger" and "mere continuation of business," either of which have been utilized by courts to hold a successor corporation liable for the obligations of the corporate predecessor. The Smallwood defense takes the relevant judicial doctrines a step further. The defense implicitly assumes that if a "de facto merger" or "mere continuation of business" occurred as a result of the asset sale, Smallwood "merged" into Spartan, and Smallwood was no longer a viable corporate entity with the legal capacity to purchase sod from Petitioner. Two facts preclude the application of either judicial doctrine to the sale of Smallwood's assets. First, there is no commonality or continuity of ownership interests between Smallwood and Spartan. Spartan did not acquire some or all of the stock of Smallwood, and Ms. Smallwood did not become a shareholder in Spartan. The two corporations do not share common directors or officers. The second fact involves the purchase price paid for the Smallwood assets. The purchase price does not suggest a cozy relationship between Smallwood and Spartan that otherwise may have persuaded a court to disregard the separate corporate existence of Smallwood after the asset-sale. No evidence suggests that the price paid was not the fair market value of the Smallwood assets negotiated at arms length between a willing buyer and a willing seller. Smallwood remained in existence as a viable Florida corporation after the asset-sale on June 13, 2006. No legal impediment prevented Smallwood from purchasing sod from Petitioner, and Smallwood had the legal capacity to do so. The purchases may have breached the terms of the Asset Purchase Agreement, but the legal capacity of Smallwood to purchase sod from Petitioner is not driven by contractual arrangements between Smallwood and private third parties. Smallwood remained in existence as a Florida corporation at least through January 7, 2007, when Ms. Smallwood filed the Response with the Department. The Response does not allege as a factual matter that Smallwood had been liquidated and was no longer in existence as a Florida corporation; or that the $895,500 the seller received for the sale of assets was not in corporate solution and available to pay invoices submitted by Petitioner. The Response merely states that Smallwood was not actively engaged in the conduct of business. Smallwood was actively engaged in the landscape business after June 13, 2006. Smallwood maintained its customary banking account; continued to issue checks imprinted with the company name; paid Petitioner for goods that Petitioner delivered to Smallwood before May 11, 2006; accepted without objection or disclaimer 43 invoices totaling $8,982.74 that were billed to the company for sod delivered to the company at the company's business address; issued the notice letter to its creditors; and purported to terminate credit agreements and guarantees. Prior to receiving the notice letter, Petitioner had no reason to believe that Smallwood was not conducting the landscape business. The face of Smallwood remained unchanged. Ms. Smallwood continued to operate the landscape business pursuant to a long-term employment contract with Spartan. Spartan signed Mr. Keith Whipple, another key employee of Smallwood, to a similar contract. Copies of the employment contracts are attached to the Asset Purchase Agreement.5 Between June 13 and September 14, 2006, Ms. Smallwood continued to sign Smallwood checks imprinted with the company name and issued on the Smallwood business account. Ms. Smallwood signed the checks as the authorized representative of Smallwood. Smallwood accepted 35 invoices issued to the company for $7,007.13 and deliveries of the sod at the company's customary business address. The notice letter was dated September 14, 2006, but Petitioner received the letter on or about September 26, 2006. Between September 14 and 26, 2006, Smallwood accepted eight invoices for sod purchased for $1,975.61. The evidence does not show when Smallwood actually mailed the notice letter, and Petitioner did not stamp the notice letter with the date it was received. The chief operating officer for Petitioner testified at the hearing but does not recall the date Petitioner actually received the notice letter. However, the witness testified that Petitioner stopped all sales to Smallwood immediately upon receipt of the notice letter to allow time for Petitioner to complete a credit check of Spartan. The trier of fact finds the relevant testimony to be credible and persuasive. The failure to timely disclose the identity of Spartan as a successor entity operating in the name of Smallwood misled Petitioner, if not other creditors.6 Between June 13 and September 26, 2006, Petitioner extended credit for purchases of $8,982.74 before Petitioner had the opportunity to ensure the credit worthiness of Spartan and, if desired, to obtain a written guarantee from the individual officers and shareholders.7 Smallwood, rather than Spartan, purchased sod from Petitioner from May 11 through September 26, 2006. Smallwood owes Petitioner $12,817.17. Hartford does not claim that the terms of the bond do not ensure payment of the purchases made by Smallwood. Hartford’s sole objection in its PRO is that the bond proceeds must be paid directly to the Department rather than to Petitioner. Hartford correctly cites Subsection 604.21(8) in support of its objection.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department enter a final order directing Smallwood to pay $12,817.17 to Petitioner, and, in accordance with Subsection 604.21(8), requiring Hartford to pay over to the Department any amount not paid by Smallwood. DONE AND ENTERED this 15th 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 15th day of August, 2007.
The Issue Does Respondent Horizon Produce Sales, Inc. (Horizon) owe Petitioner Richard Sapp, d/b/a Sapp Farms (Sapp Farms) $5,484.50 as alleged in the Amended Complaint filed herein by Sapp Farms?
Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the hearing, the following relevant findings of fact are made. At times pertinent to this proceeding, Sapp Farms was a "producer" as defined in Section 604.15(5), Florida Statutes, of agricultural products in the State of Florida. Tomatoes come within the definition of "agricultural products" as defined in Section 604.15(3), Florida Statutes. Horizon is a Florida Corporation, owned entirely by Donald E. Hinton, and located in Sydney, Florida. At times pertinent to this proceeding, Horizon was licensed as a "dealer in agricultural products" as defined in Section 604.15(1), Florida Statutes. Horizon was issued License Number 10584, supported by Bond Number 58 84 19 in the amount of $16,000 written by Gulf Life Insurance Company, as Surety, with an inception date of September 26, 1998, and an expiration date of September 25, 1999. By Invoice numbered 1262, Sapp Farms’ Exhibit numbered 6, dated June 18, 1999, with a shipping date of June 16, 1999, Sapp Farms sold and delivered to Horizon several varieties and sizes of tomatoes in 25-pound cartons at an agreed-upon price of $9.00 per 25-pound carton for 267 cartons and $8.00 per 25-pound carton for 104 cartons for a total amount of $3,235.00. Horizon was given the opportunity to inspect the tomatoes before or during loading and to reject those tomatoes not meeting the standard or condition agreed upon. Horizon furnished the truck driver and truck upon which the tomatoes were loaded. By check dated July 3, 1999, Horizon paid Sapp Farms $1,415.00 on these tomatoes leaving a balance owing of $1,820.00. By Invoice numbered 1263, Sapp Farms’ Exhibit numbered 10, dated June 22, 1999, with a shipping date of June 22, 1999, Sapp Farms sold and delivered to Horizon 122 25-pound cartons of extra large pink tomatoes at $8.00 per 25-pound carton, 51 25- pound cartons of large pink tomatoes at $8.00 per 25-pound carton, and 296 25-pound cartons of 125-150 count Roma tomatoes at $8.00 per 25-pound carton for a total invoiced price of $3,752.00. Horizon was given the opportunity to inspect the tomatoes before or during loading and to reject those tomatoes not meeting the standard or condition agreed upon. Horizon furnished the truck driver and truck upon which the tomatoes were loaded. Sapp Farms has not been paid for these tomatoes. By Invoice numbered 1272, Sapp Farms’ Exhibit numbered 15, dated June 24, 1999, with a shipping date of June 23, 1999, Sapp Farms sold and delivered to Horizon 70 25-pound cartons of extra large tomatoes at an agreed upon price of $8.50 per 25- pound carton for a total price of $595.00. Horizon was given the opportunity to inspect the tomatoes before or during loading and to reject those tomatoes not meeting the standard or condition agreed upon. Horizon furnished the truck driver and truck upon which the tomatoes were loaded. Sapp Farms has not been paid for those tomatoes. Sapp Farms agrees that it owes Horizon $682.50 in freight charges. See Sapp Farms’ Exhibit numbered 12 and the Amended Complaint filed by Sapp Farms. Horizon contends that it did not agree to purchase the tomatoes at an agreed upon price per 25-pound carton but agreed to "work" the tomatoes with Horizon’s customers and to pay Sapp Farms based on the price received for the tomatoes from its customers less any freight charges, etc. Additionally, Horizon contends that it made contact or attempted to make contact with Sapp Farms regarding each of the loads and was advised, except possibly on one load, by either Mark Davis or Richard Sapp that a federal inspection was not necessary and to "work" the tomatoes as best Horizon could. The more credible evidence is that neither Mark Davis nor Richard Sapp was timely advised concerning the alleged condition of the tomatoes. Furthermore, there is insufficient evidence to show that the condition of the tomatoes when delivered to Horizon’s customers had deteriorated to a point that resulted in rejection by Horizon’s customers. The more credible evidence shows that neither Mark Davis nor Richard Sapp advised Horizon that there was no need for a federal inspection or that Horizon could "work" the tomatoes with Horizon’s customers. The more credible evidence is that Horizon agreed to purchase Sapp Farms’ tomatoes at an agreed-upon price and that upon those tomatoes being loaded on Horizon’s truck, Horizon was responsible to Sapp Farms for the agreed-upon price. Sapp Farms timely filed its Amended Complaint in accordance with Section 604.21(1), Florida Statutes, and Horizon owes Sapp Farms for tomatoes purchased from Sapp Farms on Invoice numbered 1262, 1263, and 1272 less the partial payment on Invoice numbered 1262 of $1,415 and freight charges of $682.50 for total amount due of $5,484.50.
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 granting Sapp Farms relief by ordering Horizon Produce Sales, Inc. to pay Sapp Farms the sum of $5,484.50. DONE AND ENTERED this 24th day of May, 2000, in Tallahassee, Leon County, Florida. WILLIAM R. CAVE Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6947 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 24th day of May, 2000. COPIES FURNISHED: Honorable Bob Crawford, Commissioner Department of Agriculture The Capitol, Plaza Level 10 Tallahassee, Florida 32399-0810 Richard Sapp Sapp Farms 4720 Gallagher Road Plant City, Florida 33565 Donald E. Hinton, Qualified Representative President, Horizon Produce Sales, Inc. 1839 Dover Road, North Post Office Box 70 Sydney, Florida 33587 Michael E. Riley, Esquire Rumberger, Kirk and Caldwell A Professional Association Post Office Box 1050 Tallahassee, Florida 32302 Richard Tritschler, General Counsel Department of Agriculture and Consumer Services The Capitol, Plaza Level 10 Tallahassee, Florida 32399-0810 Brenda Hyatt, Chief Bureau of License and Bond Department of Agriculture and Consumer Services 508 Mayo Building Tallahassee, Florida 32399-0800
