The Issue Whether Respondent is indebted to Petitioner for Florida- grown citrus products sold to Respondent.
Findings Of Fact Petitioner and Respondent are Florida-licensed citrus fruit dealers operating within the Department's regulatory jurisdiction. Great American was the surety for J and G Citrus' fruit dealer's license for the 2006-2007 citrus shipping season. J and G Citrus is Petitioner's customer. Petitioner ships fruit on behalf of J and G Citrus under their name for a service charge and fee for fruit, the cost of packing, and shipping. Petitioner and Respondent entered a written contract on November 12, 2004, for such services. Cushman's replacements policy provides that a customer should notify Cushman of any problem and the company will refund the monies for the order or replace the package. Cushman guarantees to "honor all replacement requests in a timely manner at no cost to you." J and G Citrus utilized the policy during its contract with Cushman. Cushman delivered the following fruit orders for J and G Citrus from December 22, 2006, to February 16, 2007: 292 navel fruit trays at $3.35 a tray; 168 grapefruit trays at $3.35 a tray; 87 honeybells trays at $6.88 a tray; and 29 tangerine trays for $6.88 at tray. The costs for the fruit shipped totaled $2,339.00. J and G Citrus was invoiced this amount. Accordingly, Respondent was obligated to pay Petitioner the total sum for the fruit. After Cushman Fruit invoiced J and G Citrus for the outstanding balance, no payment was received. On March 28, 2007, Cushman informed J and G Citrus of its bill and told Respondent that "You need to get current." J and G Citrus responded on the same day that it would provide a payment schedule by Monday. On April 23, 2007, J and G Citrus confirmed by email that they were going to start paying and would provide a payment. On May 7, 2007, Cushman requested the payment schedule from J and G Citrus again and informed the company, "I need a response from you today." Cushman never heard further from Respondent regarding payment. To date, the invoices are unpaid and the monies are owed to Cushman. Petitioner performed all of its duties under the contract with J and G Citrus and Respondent failed to pay for the services. J and G Citrus is, therefore, indebted to Petitioner.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED: That a final order be entered requiring Respondent pay to Petitioner the sum of $2,339.00 DONE AND ENTERED this 11th day of February, 2009, in Tallahassee, Leon County, Florida. S JUNE C. McKINNEY 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 11th day of February, 2009. COPIES FURNISHED: Elizabeth Alvarez Cushman Fruit Company, Inc. 3325 Forest Hill Boulevard West Palm Beach, Florida 33406 Rob Brehm Great American Insurance Company Post Office Box 2119 Cincinnati, Ohio 45201 Christopher E. Green, Esquire Department of Agriculture and Consumer Services Office of Citrus License and Bond Mayo Building, M-38 Tallahassee, Florida 32399-0800 Brian D. Jerome Carla Dupleich J & G Citrus Groves 5781 Seminole Way Fort Lauderdale, Florida 33314 Honorable Charles 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 407 South Calhoun Street, Suite 520 Tallahassee, Florida 32399-0800
The Issue Whether Respondent's, Department of Citrus, proposed changes to Rules 20-71.005, 20-71.006, and 20-72.009, Florida Administrative Code, are invalid exercises of delegated legislative authority.
Findings Of Fact Based on the evidence and the testimony of witnesses presented and the entire record in this proceeding, the following findings of fact are made: In Florida, all citrus processing plant operations are under continuous inspection by USDA inspectors as a result of a Cooperative Agreement, which has an effective date of July 1, 1968, between the Consumer and Marketing Services (now known as Agricultural Marketing Services), the USDA, and the Florida Department of Agriculture (now known as Department of Agriculture and Consumer Services). By its terms, the Cooperative Agreement contemplates that the State of Florida agency (Respondent herein) may develop standards for processed citrus products under authority granted by Florida state law. As such, Respondent establishes policy and the USDA implements the policy established by Respondent. Since 1949, Chapter 601, Florida Statutes (the "Florida Citrus Code"), has vested Respondent with general and specific legislative authority to inspect, grade, develop minimum quality and maturity standards, and to do myriad other things to ensure the quality of processed citrus products. In addition, the Florida citrus industry has implemented internal quality control testing and standards in an effort to instill consumer confidence in Florida citrus products. Not unlike many other segments of commerce, the Florida citrus industry has evolved from small, local operators to large multi-state conglomerates. Innovation and consolidation has resulted in new products, production techniques, and citrus processing methodology. Where bulk concentrate was stored in 55-gallon drums in the 1950s, it is now stored in 100,000-gallon tanks, and can be transported in huge container trailers towed by semi-tractors. As the Florida citrus industry has changed, so too has governmental and internal testing for product wholesomeness, maturity, grade, and safety. Upon delivery to a citrus processing plant, all citrus fruit is tested for wholesomeness and maturity before it is processed. This initial inspection is accomplished by the arbitrary selection of approximately 38-45 pounds of citrus from throughout a 500-box load. If the citrus passes this initial testing, it proceeds to be processed. Processed citrus product is later tested for grade and, finally, undergoes microbial, pathogen, and safety testing by the Food and Drug Administration. In addition, processors undertake private testing to assure particular quality assurance. In 2001, the Florida Legislature repealed Subsection 601.48(1), Florida Statutes, and, as a result, deleted the statutory requirement for inspections of grade standards in registered citrus processing plants. The repeal of Subsection 601.48(1), Florida Statutes, eliminated legislative direction for a grade inspection; however, there remained other inspection requirements. Section 601.49, Florida Statutes, provides that it is unlawful for any person to sell or transport canned or concentrated products unless the same has been inspected and accompanied by a certificate of inspection or manifest indicating that an inspection has taken place. Subsection 601.48(3), Florida Statutes, exempts intrastate shipment of processed citrus products between licensed citrus fruit dealers who operate processing plants from grade labeling requirements. In 2000, Respondent, by Rule 20-71.005, Florida Administrative Code, established manifest requirements and statements for in-state transport of processed citrus products between registered facilities owned by the same processor. This was the precursor to the proposed rule changes, which are the subject of this rule challenge. Proposed Rule 20-71.005, Florida Administrative Code, allows the intrastate transport of bulk processed citrus products between registered facilities, eliminating the requirement that both facilities be owned by the same individual or entity and establishes informational requirements for the shipping manifest. One of the informational requirements for the shipping manifest established in the proposed rule is a certified statement that "the processed citrus products are being transported in bulk as processor grade." "Processor grade" is a new designation. Proposed Rule 20-71.006, Florida Administrative Code, establishes manifest requirements for transport of processed citrus products with the exception of bulk processed citrus product shipments specified in Rule 20-71.009, Florida Administrative Code. Proposed Rule 20-71.009, Florida Administrative Code, authorizes an inspector to issue a certificate of processor grade, which reflects that the bulk processed citrus product has been inspected for wholesomeness and maturity and ensures that the bulk processed citrus product will be inspected and/or re- graded before final shipment. The proposed rules reflect changes that are taking place in citrus processing methodology; the rule changes ensure that inspection as required by Section 601.49, Florida Statutes, takes place.
The Issue The issues for determination in this case are whether Respondent, as a licensed citrus fruit dealer, breached the terms of an oral contract for the purchase of citrus fruit during the 1992-1993 shipping season, whether Respondent misappropriated certain other citrus fruit owned by Petitioner during the 1992-1993 shipping season, and further, whether such actions by Respondent constitute violations of the Florida Citrus Code for which the proceeds of the citrus fruit dealer's bond executed by Co-Respondent should be paid to Petitioner in satisfaction of Petitioner's claim pursuant to Section 601.66, Florida Statutes.
Findings Of Fact Petitioner, Riverfront Groves, Inc., is a corporation with an office in Vero Beach, Florida. At all material times, Petitioner was in the business of selling and marketing citrus fruit. At all material times, Daniel R. Richey was vice-president of Petitioner, in charge of the fresh fruit packing operation. Respondent, Bagaley Groves, is a business with an office in Vero Beach, Florida. At all material times, Respondent operated a citrus fruit gift shipping packinghouse. At all material times, Robert G. Bagaley was the owner of Respondent. Co-Respondent, Nationwide Mutual Insurance Company, is an insurance company, which was authorized to write surety bonds during the 1992-1993 citrus fruit shipping season. On December 10, 1992, Co-Respondent executed, as surety, Citrus Fruit Dealer's Bond No. 77-LP-007-245-0002, in the principal sum of $10,000.00, binding Co-Respondent as surety, to the Florida Commissioner of Agriculture. The terms and conditions of the bond were that Respondent, as the principal executing such bond, would comply with the provisions of the Florida Citrus Code during the 1992-1993 citrus fruit shipping season, and with the terms and conditions of all contracts relating to the purchase, handling, sale, and accounting of citrus fruit. Respondent held a valid citrus fruit dealer's license issued by the Department of Citrus for the 1991-1992 shipping season. On July 16, 1992, Respondent, by and through its owner Robert Bagaley, filed with the Department of Citrus an application for license as a citrus fruit dealer for the 1992-1993 shipping season. As indicated above, Respondent's bond required for licensure was not executed until December 10, 1992, and it was not until January 25, 1993, that Respondent was issued citrus fruit dealer's license No. 0269 for the 1992-1993 shipping season. The license is not specifically retroactive, and merely states that Respondent is ". . . granted a license to engage in the business of Citrus Fruit Dealer through July 31, 1993." At all material times Respondent, by and through its owner Robert Bagaley, held itself out as a licensed citrus fruit dealer in the state of Florida. In the fall of 1992, Respondent learned from a mutual friend, Henry Schacht, that Petitioner had navel oranges located in a grove in Indian River County, Florida, suitable for use in Respondent's fresh fruit packinghouse. In mid-November 1992, Petitioner, through its authorized representative Daniel R. Richey, and Respondent, through its owner Robert Bagaley, agreed that Respondent would purchase approximately 2,400 boxes of navel oranges from Petitioner at $7.00 per box. Respondent did not hold a valid license as a citrus fruit dealer in the state of Florida at the time this oral contract was entered into with Petitioner. Respondent harvested a total of 150 boxes of these navel oranges during the period of November 13 - 17, 1992, for which Respondent paid Petitioner the agreed upon price of $7.00 per box. This payment in the amount of $1,050.00 was made by check dated November 18, 1992. On December 3, 1992, Petitioner delivered a written contract to Respondent setting forth Petitioner's understanding of the terms of their agreement. The contract was executed by Petitioner. Respondent declined to sign the written contract, and the contract was returned to Petitioner on December 10, 1992. In early December 1992, Respondent learned from James Earl Brantley that some of the navel oranges in Petitioner's grove had green mold, a condition that would make the fruit unsuitable for fresh fruit packing. On December 10, 1992, Respondent repudiated the oral contract and notified Petitioner that Respondent could not use, and did not need, any more of Petitioner's navel oranges. Respondent did not inform Petitioner that some of the navel oranges had developed green mold, or that the navel oranges were otherwise not merchantable. At the time Respondent repudiated the oral contract, Respondent did not hold a valid license as a citrus fruit dealer in the state of Florida. By December 10, 1992, the marketing conditions for navel oranges were substantially deteriorating. From December 11 and 15, 1992, Petitioner harvested and processed the balance of the navel orange crop from the grove, some 2,785 boxes. Petitioner attempted to pack the oranges as fresh fruit. The packout ratio of these 2,785 boxes was approximately 18 percent, yielding Petitioner a net return of $78.01, ($129.38 return for 640 boxes picked December 11 and 12, 1992, and a loss of $51.37 on the remainder picked between December 12 and 15, 1992. Petitioner incurred a loss of $19,365.62, as result of Respondent's failure to pay the agreed upon contract price of $7.00 per box for the balance of the navel oranges. At the time Respondent (through Bagaley) notified Petitioner (through Richey) that Respondent did not intend to harvest the balance of the fruit, Petitioner informed Respondent that the remaining fruit would be harvested, that an accounting of the net proceeds for the remaining fruit would be made, and that the parties could then review the matter as to any outstanding indebtedness which might be due under the terms of the oral agreement. Respondent stated that a review after harvesting and accounting was acceptable. Within sixty days thereafter Petitioner (through Richey) received the accounting and met with Respondent (through Bagaley). At that time Respondent did not acknowledge the indebtedness, nor promise to pay the indebtedness to Petitioner. Subsequent to January 25, 1993, Respondent mistakenly picked red grapefruit from a grove owned by Petitioner, which was adjacent to a grapefruit block Respondent had purchased from a different owner. The parties agree that Respondent owes Petitioner $375.00 or $2.50 for 150 boxes of grapefruit picked from this grove. Respondent tendered a check to Petitioner in the amount of $375.00 for payment of the grapefruit; however, Petitioner declined to accept payment for the grapefruit pending resolution of Petitioner's claim for the navel oranges.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that: The Department enter a Final Order adjudicating the amount of indebtedness owed Petitioner by Respondent in accordance with Section 601.66, Florida Statutes, is $375.00 for 150 boxes of grapefruit mistakenly harvested. It is further recommended that Petitioner's claim for damages resulting from the contract for navel oranges entered into prior to Respondent's licensure as a citrus fruit dealer during the 1992-1993 shipping season be dismissed. RECOMMENDED in Tallahassee, Leon County, Florida, this 4th day of August, 1995. RICHARD HIXSON Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 4th day of August, 1995. APPENDIX As to Petitioner's Proposed Findings: 1-9. Adopted and incorporated. Adopted, except to the extent that Respondent's repudiation of the contract was solely related to market conditions. Adopted except as to Respondent's promise to pay subsequent to January 25, 1993. 12-14. These paragraphs constitute conclusions of law. COPIES FURNISHED: Douglas A. Lockwood III, Esquire PETERSON, MYERS, CRAIG, CREWS BRANDON & PUTERBAUGH, P.A. Post Office Drawer 7608 Winter Haven, Florida 33883-7608 Eugene J. O'Neill, Esquire GOULD, COOKSEY, FENNELL, BARKETT, O'NEILL & MARINE, P.A. 979 Beachland Boulevard Vero Beach, Florida 32963 Brenda Hyatt, Chief Bureau of License & Bond Department of Agriculture Mayo Building, Room 508 Tallahassee, Florida 32399-0800 Mr. David Z. Cutright Nationwide Mutual Insurance Company 1324 16th Street Vero Beach, Florida 32960
The Issue The issue for determination is whether Department of Citrus Rules 20-1.009 and 20-1.010, Florida Administrative Code, are invalid exercises of delegated legislative authority, as alleged by Petitioners.
Findings Of Fact John Stephens, Inc., Petitioner, was at all times material hereto a Florida corporation duly licensed as a citrus fruit dealer in the State of Florida. J. A. Stephens, Inc., was a Florida corporation, and held a valid fruit dealer’s license in the State of Florida. At all times material to this proceeding, Petitioner, John A. Stephens, served as an officer and director of J. A. Stephens, Inc. John A. Stephens is not an officer, director or shareholder of John Stephens, Inc. John A. Stephens, Jr. is the president and sole director of John Stephens, Inc. and is not an officer, director nor shareholder of J. A. Stephens, Inc. On or about September 26, 1996, Petitioners, John Stephens, Inc., and John A. Stephens, applied to the Florida Department of Agriculture and Consumer Services to register John A. Stephens as an agent of John Stephens, Inc., pursuant to Section 601.601, Florida Statutes. The application form furnished by the Department of Agriculture and Consumer Services indicates that the licensed dealer seeking registration of an agent agrees to “... accept full responsibility for all his activities....” (Petitioners’ Exhibit 1) By letter dated December 26, 1996, Petitioners were advised by the Department of Agriculture and Consumer Services that their application for registration of John A. Stephens as an agent of John Stephens, Inc., had been denied on the basis of Rule 20-1.010, Florida Administrative Code. As indicated in the notice, that rule provides, in part, that an application for registration of a dealer’s agent can be disapproved if a proposed registrant has a “...record, either as an individual, co- partnership, corporation, association or other business unit, showing unsatisfied debts or orders issued by the Commissioner of Agriculture with respect to prior dealings in citrus fruit.” (Petitioners’ Exhibit 1.) Specifically, the Department of Agriculture and Consumer Services advised Petitioners that “...Mr. Stephens has not satisfied orders issued by the Commissioner of Agriculture with respect to prior dealings in citrus fruit...,” listing as the final orders in question Petitioners’ Exhibits 3 through 14. Between April 30, 1991, and September 30, 1992, the State of Florida, Department of Agriculture and Consumer Services entered a total of 12 final administrative orders in which it found that J. A. Stephens, Inc., was indebted to claimants for various sums arising from prior dealings in citrus fruit. (Petitioners’ Exhibits 3 through 14.) At the time of the action of the Department of Agriculture and Consumer Services denying Petitioners’ application, there remained amounts due and unpaid on each of the orders entered by the Department against J. A. Stephens, Inc. Petitioner, John A. Stephens was not named as a party respondent in any of the 12 proceedings culminating in final orders against J. A. Stephens, Inc., which formed the basis for the denial by the Department of the application for registration as a citrus dealer’s agent. (Petitioners’ Exhibits 2, and 3 through 14.) In denying a Motion for Relief for Final Order in the only Department of Agriculture and Consumer Services proceeding in which a claimant sought to join Mr. Stephens individually as a party, the Department found that: The complaint filed by Claimant named J. A. Stephens, Inc. as the respondent. Because the complaint was against J. A. Stephens, Inc., it was served on J. A. Stephens, Inc. J. A. Stephens, an individual, was never subjected to the jurisdiction of the Agency with regard to this matter. J. A. Stephens, an individual, was not afforded an opportunity to defend against the allegations of the complaint. There was no discussion at the hearing about whether J. A. Stephens, Inc. was or was not the proper respondent. There was no allegation at the hearing that J. A. Stephens, an individual, was the proper respondent. The Claimant has failed to express any legal basis for grant of his motion and this Agency could find no such basis. This Agency has no personal jurisdiction over J. A. Stephens, an individual, with regard to this matter and therefore cannot enter an order with respect to him. Further, even if such an order were to be entered, it would be of no force or effect because of the lack of personal jurisdiction. (Petitioners’ Exhibit 4, pg. 2.) The rules that are the subject of this proceeding had their inception in 1964, when the Florida Citrus Commission considered and adopted rules governing the registration of agents acting on behalf of licensed citrus dealers. These rules, which appear in the text of the minutes of the Commission as Regulation 105-1.05, are almost verbatim the same rules now found in Chapter 20-1, Florida Administrative Code. (Respondent’s Exhibits 1 and 2.) As reflected in the minutes of the Florida Citrus Commission, the rules were adopted to help protect the grower and shipper or processor in matters involving the normal movement of citrus fruit in all channels of distribution. The regulation was recommended by the Fresh Citrus Shippers Association and was endorsed by a resolution of the Florida Sheriffs Association. In presenting the Sheriffs’ resolution to the Commission, Sheriff Leslie Bessenger of the Florida Citrus Mutual Fruit Protection Division cited the results of a seven-month investigation that found 71 out of 200 registered agents with criminal records. Those two hundred agents represented only nine dealers. (Respondent’s exhibit 1, June 19, 1964, meeting.) Minutes of Commission meetings after rule adoption thoroughly explain the efforts to require accountability and curb abuse of the dealer- agent relationship. The rules, as they appear today in the Florida Administrative Code, have not been revised since July 1, 1975.
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.
The Issue The issues in this case are whether Respondent, a licensed citrus fruit dealer, violated the Florida Citrus Code by failing to pay Petitioner the full purchase price for grapefruit that the dealer had harvested from Petitioner's grove and sold in the ordinary course of business to its (the dealer's) customers; and, if so, the amount of the indebtedness owed by the dealer.
Findings Of Fact Petitioner Frontier Fresh of Indian River, LLC ("Seller"), is in the business of growing citrus fruit and hence is a "producer" as that term is defined in the Florida Citrus Code. § 601.03(33), Fla. Stat. Respondent United Indian River Packers, LLC ("Buyer"), is a "citrus fruit dealer" operating within the regulatory jurisdiction of the Department of Agriculture and Consumer Services (the "Department"). See § 601.03(8), Fla. Stat. On September 6, 2013, Seller and Buyer entered into a Production Contract Agreement (the "Contract") under which Buyer agreed to purchase and harvest red and flame grapefruit (both generally called "colored grapefruit") then growing in Seller's "Emerald Grove" in St. Lucie County. Buyer promised to pay Seller $7.75 per box plus "rise" for all colored grapefruit harvested from the Emerald Grove during the 2013/2014 season. ("Rise" is an additional payment due Seller if Buyer's net revenue from marketing the fruit exceeds the Contract price or "floor payment.") The Contract gave Buyer and its "agents, employees and vehicles" the right to "enter upon SELLER'S premises . . . from time to time for the purpose of inspecting, testing and picking fruit, and for the purpose of removing said fruit." Buyer was obligated to make scheduled payments to Seller totaling $250,000 between September and December 2013, with the balance of the floor payment "to be made within 45 days from week of harvest." The deadline for making the final rise payment was June 30, 2014. The Contract described the Seller's duties as follows: SELLER agrees to maintain the crop merchantable and free from Citrus Canker, Mediterranean fruit fly, Caribbean fruit fly, and any and all impairments which would alter the ability to market the crop. It is further agreed that in the event of such happening BUYER has the option to renegotiate with SELLER within 10 days of such find, or terminate contract and receive any monies that may be remaining from deposit. It is understood and agreed that the word "merchantable" as herein used, shall mean fruit that has not become damaged by cold, hail, fire, windstorm, insects, drought, disease or any other hazards to the extent it cannot meet all applicable requirements of the laws of the State of Florida and the Federal Government, including without limitation those relating to pesticides, and the regulations of the Florida Department of Citrus relating to grade and quality. With regard to default, the Contract provided: It is further agreed that in case of default by either the BUYER or SELLER the opposite party may, at his option, take legal action to enforce this contract or may enter into negotiations to carry out the terms and provisions thereof, in which event the party found to be in default shall pay reasonable costs in connection with either negotiation or litigation, such cost to include a reasonable attorney's fee to party prevailing in such controversy. The Contract acknowledged the existence of a "Citrus Fruit Dealers Bond" posted with the Department but cautioned that the bond "is not insurance against total 1iabilities that may be incurred if a citrus fruit dealer should default" and "does not necessarily insure full payment of claims for any nonperformance under this contract." Buyer began picking colored grapefruit from the Emerald Grove on October 17, 2013, and initially things went well. For the first month, Buyer achieved encouraging packout percentages of between 60% and 90%. (The packout percentage expresses the ratio of fruit deemed acceptable for the fresh market to the total fruit in the run. A higher packout percentage means fewer "eliminations" for the juice processing plant and thus a more valuable run.) On November 13, 2013, however, the packout rate plunged to around 38%. Although there were some good runs after that date, for the rest of the season the packout percentages of grapefruit picked from the Emerald Grove mostly remained mired in the 30% to 50% range, which is considered undesirably low. Everyone agrees that the 2013/2014 grapefruit crop in the Emerald Grove was disappointing. Representatives of Buyer and Seller met at the Emerald Grove in mid-November to discuss the reduced packout percentages. Mild disagreement about the exact reason or reasons for the drop-off in quality arose, but some combination of damage by rust mites and a citrus disease known as greasy spot is the likeliest culprit.1/ The problems were not unique to Emerald Grove, as the 2013/2014 citrus season was generally poor in the state of Florida. Seller's grapefruit crop was consistent with the statewide crop for that year. Despite the low packout percentages, and being fully aware of the crop's condition, Buyer continued to harvest colored grapefruit from the Emerald Grove, which it packed and exported for sale to its customers in Europe, Japan, and Southeast Asia. After picking fruit on February 3, 2014, however, Buyer repudiated the Contract and left the colored grapefruit remaining in the Emerald Grove to Seller. As a result, Seller sold the rest of the crop to another purchaser.2/ At no time did Buyer notify Seller that it was rejecting any of the grapefruit which Buyer had picked and removed from the Emerald Grove pursuant to the Contract. For months after Buyer stopped performing under the Contract, Seller endeavored to collect the amounts due for all the fruit that Buyer had harvested. By mid-April, however, Buyer still owed several hundred thousand dollars. At a meeting between the parties on April 22, 2014, Buyer proposed that Seller discount the purchase price given the disappointing nature of the crop, which Buyer claimed had caused it to lose some $200,000 in all. Buyer requested that Seller forgive around $100,000 of the debt owed to Buyer, so that Seller, in effect, would absorb half of Seller's losses. Buyer expected that Seller would agree to the proposed reduction in price and maintains that the parties did, in fact, come to a meeting of the minds in this regard, but the greater weight of the evidence shows otherwise. Seller politely but firmly——and unequivocally——rejected Buyer's proposal, although Seller agreed to accept installment payments under a schedule that would extinguish the full debt by August 31, 2014. This response disappointed Buyer, but Buyer continued to make payments to Seller on the agreed upon payment schedule. By email dated June 4, 2014, Buyer's accountant asked Seller if Seller agreed that the final balance due to Seller was $108,670.50. Seller agreed that this was the amount owing. After that, Buyer tried again to persuade Seller to lower the price, but Seller refused. Buyer made no further payments. At no time did Buyer notify Seller that it was revoking its acceptance of any of the fruit harvested from the Emerald Grove during the 2013/2014 season. Having taken physical possession of the fruit, Buyer never attempted to return the goods or demanded that Seller retrieve the fruit. Rather, exercising ownership of the goods, Buyer sold all the colored grapefruit obtained under the Contract to its customers for its own account. On October 14, 2014, Seller brought suit against Buyer in the Circuit Court of the Nineteenth Judicial Circuit, in and for Indian River County, Florida, initiating Case Number 31-2014-CA-001046. Buyer filed a counterclaim against Seller for breach of contract. On February 4, 2015, Seller filed a Notice of Voluntary Dismissal of its judicial complaint, opting to take advantage of available administrative remedies instead, which it is pursuing in this proceeding. As of the final hearing, Buyer's counterclaim remained pending in the circuit court.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Agriculture and Consumer Services enter a final order awarding Frontier Fresh of Indian River, LLC, the sum of $108,670.50, together with pre-award interest at the statutory rate from June 4, 2014, to the date of the final order, and establishing a reasonable time within which said indebtedness shall be paid by United Indian River Packers, LLC. DONE AND ENTERED this 27th day of August, 2015, in Tallahassee, Leon County, Florida. S JOHN G. VAN LANINGHAM Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 27th day of August, 2015.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Citrus enter a final order dismissing the application filed by the Petitioner for licensure as a citrus fruit dealer. DONE AND ENTERED this 30th day of May, 2013, in Tallahassee, Leon County, Florida. S WILLIAM F. QUATTLEBAUM Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 30th day of May, 2013. COPIES FURNISHED: Douglas Ackerman, Executive Director Department of Citrus Post Office Box 9010 605 East Main Street Bartow, Florida 33831-9010 Joseph P. Mawhinney, Esquire Reed and Mawhinney, P.L. 1611 Harden Boulevard Lakeland, Florida 33803-1826 Guillermo Vazquez East West Citrus Packers, LLC 11860 Southwest 183rd Street Miami, Florida 33177-2453
The Issue The issues for determination in this case are whether Respondent as a licensed citrus fruit dealer breached an agreement with Petitioner relating to the purchase of citrus fruit during the 1991-1992 shipping season and further whether the breach of such agreement constitutes a violation of the Florida Citrus Code for which the proceeds of the citrus fruit dealer's bond should be paid to Petitioner pursuant to section 601.66, Florida Statutes.
Findings Of Fact Petitioner, Lykes Pasco, Inc., is a Florida corporation located in Pasco County, Florida, in the business of citrus fruit processing. Respondent, L & M Fruit Company, Inc., is a dissolved Florida corporation that formerly was in the business of selling and delivering citrus fruit. Jerry M. Mitchell was the past president of Respondent. During the 1991-1992 shipping season, Respondent was a licensed citrus fruit dealer in Florida. Co-Respondent, American Surety and Casualty Company, a registered surety company, during the 1991-1992 shipping season executed a citrus fruit dealer's bond to Respondent in the amount of $49,000 pursuant to the provisions of section 601.66, Florida Statutes. On or about September 20, 1991, Petitioner entered into an express written contract with Respondent for the sale and delivery of citrus fruit. Specifically, the contract provided for the sale and delivery of 35,000 boxes of early and midseason oranges at $0.85 pounds net delivered, and 35,000 boxes of valencia oranges at $1.05 pounds net delivered. The contract was executed by Tom O'Neal on behalf of Petitioner, and by Jerry M. Mitchell on behalf of Respondent. Of the 35,000 boxes of early and midseason oranges provided for in the contract, Respondent delivered 21,706 boxes leaving a shortage of 13,294 boxes. Of the 35,000 boxes of valencia oranges provided in the contract, Respondent delivered 1,180 boxes, leaving a shortage of 33,820 boxes. Because of the Respondent's breach of contract Petitioner was required to purchase fruit solids on the open market to cover its business needs. Petitioner incurred costs in the amount of $91,980.53 to replace the fruit which Respondent failed to deliver under the terms of the contract. In addition to the costs incurred by the Petitioner in replacing the fruit, Petitioner also made an advancement of funds against the contract to the Respondent. The funds advanced to Respondent which have not been repaid nor applied against the fruit delivered total $15,567.55. The damages incurred by the Petitioner resulting from Respondent's breach of contract total $107,548.08.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED: That the Department of Agriculture and Consumer Services enter a final order adjudicating that the amount of indebtedness owed to Petitioner from Respondent is $107,548.08, that Respondent shall have thirty (30) days in which to satisfy such indebtedness, and that upon failure of the respondent to make satisfaction of this claim, any remaining proceeds of the citrus fruit dealer's bond executed by Co-Respondent shall be distributed to Petitioner. RECOMMENDED in Tallahassee, Leon County, Florida, this 8th day of May, 1995. RICHARD HIXSON Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 8th day of May, 1995. APPENDIX Petitioner' Proposed Findings: Paragraphs 1 through 7 are adopted and incorporated herein. COPIES FURNISHED: Commissioner Bob Crawford Commissioner of Agriculture The Capitol, P1-10 Tallahassee, Florida 32399-0810 Patrick T. Lennon, Esquire H. Vance Smith, Esquire Attorneys for Lykes Pasco, Inc. Post Office Box 1531 Tampa, Florida 33601 Mr. Jerry M. Mitchell, President L & M Fruit Company, Inc. Post Office Box 1048 Bartow, Florida 33880 F. J. Manuel, Jr. Sears & Manual, P.A. Attorneys for American Surety & Casualty Company 511 North Ferncreek Avenue Orlando, Florida 32803 Clerk Department of Citrus Post Office Box 148 Lakeland, Florida 33802-0148 Brenda Hyatt, Chief Bureau of Licensing & Bond Department of Agriculture 508 Mayo Building Tallahassee, Florida 32399-0800 Richard Tritschler General Counsel Department of Agriculture The Capitol, PL-10 Tallahassee, Florida 32399-0810
The Issue The issue in this case is whether Respondent Dooley Groves, 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 Dooley 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 Dooley submit. The packages typically are labeled with the retail seller's name (e.g. Dooley), 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 Dooley placed with Spyke's Grove between November 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 Dooley, to ship a gift fruit box or basket to the donee designated by Dooley's retail customer, for which fruit shipment Dooley agreed to pay Spyke's Grove. Spyke's Grove alleges that Dooley failed to pay in full for all of the gift fruit packages that Dooley ordered and Spyke's Grove duly shipped. Dooley contends (though not precisely in these terms) that Spyke's Grove materially breached the contracts, thereby discharging Dooley from further performance thereunder. Dooley also claims, as an affirmative defense, that the alleged debt was extinguished pursuant to an accord and satisfaction. The Transactions From mid-November 1999 until around December 12, 1999, Dooley faxed to Spyke's Grove approximately 150 individual orders for gift fruit packages. Each order consisted of a shipping label that identified the product (e.g. the type of gift box or basket), the intended recipient, the destination, and a proposed shipping date. Spyke's Grove manifested its intent to fill these orders by faxing statements of acknowledgment to Dooley. Although the many contracts that arose from these transactions were thus documented, the writings left much unsaid. For example, contrary to Dooley's assertion, the parties did not 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. 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 Dooley 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 several weeks, until early December 1999, Dooley placed orders, and Spyke's Grove filled them, under the arrangement just described, without controversy. 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. Dooley's Response Dooley did not immediately learn about the fire that had interrupted Spyke's Grove's operations. Continuing with business as usual on Monday, December 13, 1999, Dooley attempted then and throughout the week to fax orders to Spyke's Grove but consistently failed to connect because the lines were busy. With unplaced orders piling up, Dooley began to worry that the gift baskets its customers had ordered earlier in the month——orders that Sypke's Grove already had agreed to fill—— would not arrive by Christmas, as Dooley had guaranteed when taking those orders. Then, on December 16, word of the Spyke's Grove fire reached Dooley. Dooley's worry escalated into alarm. That same day, Dooley placed telephone calls to as many of its retail customers or their donees as it could reach, to ascertain whether Spyke's Grove had shipped any of the gift fruit baskets that Dooley had ordered before December 12, 1999. Dooley was unable to confirm the receipt of a single package—— and it panicked. Disregarding its existing contractual obligations and with no advance notice to Spyke's Grove, Dooley made alternative arrangements for filling all of the orders that it had faxed to Spyke's Grove in December 1999. Dooley packaged and shipped some of the subject gift boxes on its own, and it placed orders for the rest with another wholesale shipper. These substitute packages were being shipped as early as December 17 or 18, 1999. Even after the fact, Dooley failed to inform Spyke's Grove that it had, in effect, repudiated the existing shipment contracts between them. Having no knowledge of Dooley's actions, Spyke's Grove packaged and shipped all of the gift fruit that Dooley had ordered pursuant to the contracts entered into before December 12, 1999. The Inevitable Dispute On January 27, 2000, Spyke's Grove sent three invoices to Dooley seeking payment for most of the citrus shipped pursuant to Dooley's orders. These bills totaled $3,242.55. A fourth and final invoice, for $70.57, was sent on February 18, 2000. Combined with the other bills, this last brought the grand total to $3,313.12. Each of these invoices contained the following boilerplate "terms": Net 14 days prompt payment is expected and appreciated. A 1 1/2% 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. Dooley 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. Dooley was provided a copy of this letter. On June 30, 2000, Dooley sent a letter to Spyke's Grove in which it explained the reasons why Dooley believed Spyke's Grove was not entitled to full payment of $3,313.12. Dooley had decided, unilaterally, that a deduction of $1,723.53 was in order. In its letter, Dooley described the remaining balance of $1,589.59 as the "final total payment," and a check for that amount was enclosed therewith. Nothing in Dooley's letter fairly apprised Spyke's Grove that the check for $1,589.59 was being tendered, in good faith, in full satisfaction of Spyke's Grove's demand for payment of $3,313.12. No language in that June 30, 2000, letter so much as hinted that Spyke's Grove's acceptance of the check would be considered a manifestation of assent to Dooley's position or an agreement to accept the lesser sum in satisfaction of a greater claim. In short, the parties did not make a mutual agreement, either expressly or by implication, to settle Spyke's Grove's claim for a total payment of $1,589.59. Spyke's Grove was entitled to accept Dooley's check for $1,589.59 as a partial payment against the total indebtedness, and it did. Shortly thereafter, Spyke's Grove filed a Complaint with the Department, initiating the instant proceeding. Ultimate Factual Determinations Dooley's refusal to pay in full for the goods it ordered from Spyke's Grove constituted a breach of the contracts between the parties. Spyke's Grove did not materially breach the agreements, nor was the indebtedness discharged pursuant to an accord and satisfaction. Spyke's Grove has suffered an injury as a result of Dooley's breach. Spyke's Grove's damages consist of the principal amount of the debt together with pre-award interest at the statutory rate, less the partial payment that Dooley made on June 30, 2000. Accordingly, Spyke's Grove is entitled to recover the following amounts from Dooley: Principal Due Date Statutory Interest $3,242.55 2/10/99 $ 18.66 (2/10/99 - 3/03/99) $ 70.57 3/04/99 $3,313.12 3/04/99 LESS: <$1,589.59> $ 437.56 (3/04/99 - 6/29/00) $1,723.53 6/30/00 $ 86.89 (6/30/00 - 12/31/00) $ 157.92 (1/01/01 - 10/31/01) $1,723.53 $ 701.03 Interest will continue to accrue on the outstanding balance of $1,723.53 in the amount of $0.52 per day from November 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 $1,723.53, together with pre- award interest in the amount of $701.03 (through October 31, 2001), plus additional interest from November 1, 2001, until the date of the final order, which will accrue in the amount of $0.52 per day. DONE AND ENTERED this 12th day of October, 2001, in Tallahassee, Leon County, Florida. COPIES FURNISHED: 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 12th day of October, 2001. Barbara Spiece, President Spyke's Grove, Inc. 7250 Griffin Road Davie, Florida 33314 Diane M. Houghtaling, Vice President Dooley Groves, Inc. 1651 Stephens Road Post Office Box 7038 Sun City, Florida 33586-7038 Reliance Insurance Company Three Parkway Philadelphia, Pennsylvania 19102 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
