The Issue The issue in this case is whether Respondent H & R Packing & Sales Company, LLC, must pay Petitioner the full contract price for citrus fruit that said Respondent accepted upon tender despite knowing that the goods were nonconforming.
Findings Of Fact Petitioner Betty H. Shinn, d/b/a Shinn Groves ("Shinn"), is in the business of growing citrus fruit and hence is a "producer" within the regulatory jurisdiction of the Department of Agriculture and Consumer Services ("Department"). Respondent H & R Packing & Sales Company, LLC ("HRPS"), is a "citrus fruit dealer" operating within the Department's jurisdiction. On November 3, 2004, Shinn and HRPS entered into a contract (the "Contract") whereby HRPS agreed to harvest "fresh fruit quality" navel oranges from a particular section of Shinn's grove, which oranges Shinn agreed to sell to HRPS for the price of $8.00 per field box. The Contract provided, in pertinent part, as follows: The SELLER [that is, Shinn] shall take all reasonable and normal precautions to maintain fresh fruit quality during the life of this agreement. Failure to exercise close control to mites and other pests shall constitute a violation of this agreement. Further, the BUYER [i.e. HRPS] may at his option cancel this contract or renegotiate the price to be paid and the conditions of sale. In addition, the parties agreed that HRPS would pick the fruit no later than January 1, 2005, and pay for the oranges "within 45 days of the week of the harvest." An agent of HRPS's named Frederick Gaines inspected the crop identified to the Contract on a couple of occasions in November and December 2004. At some point he notified Shinn that the oranges were being damaged by rust mites. Shinn arranged to have the crop sprayed with Thiolux (a miticide), which was done around December 6, 2004. HRPS harvested the crop on January 3, 2005. (HRPS's performance in this regard was nonconforming, because the oranges were to be picked no later than January 1, 2005. By allowing HRPS to proceed after the deadline, however, Shinn waived HRPS's untimely performance.) At or about the time of the harvest, Mr. Gaines orally notified Charles Shinn (who is the son——and an agent——of Petitioner Betty Shinn) that the oranges had been damaged by rust mites and consequently were not fresh fruit quality. Mr. Shinn suggested that the oranges be "run through" the packing house (where the fruit would be graded on its quality), after which the parties could renegotiate the price, if necessary, to adjust for any material deficiencies in the quality of the crop. This proposal was evidently acceptable to HRPS, for it proceeded to harvest the oranges with knowledge that the crop was (or might not be) fresh fruit quality. HRPS picked 790 field boxes of oranges from Shinn's grove pursuant to the Contract. When these oranges were graded at the packing house, an unusually small percentage (approximately 34%) could be "packed out," that is, packaged and delivered for sale as fresh fruit.i The rest "graded out," i.e. failed to meet the standards for sale as fresh fruit, and were sold, at a loss, to juice processors. HRPS was obligated under the Contract to pay Shinn for the oranges on or before February 22, 2005, but HRPS let the deadline pass without either paying for the oranges or notifying Shinn of a breach with respect thereto. By letter dated March 17, 2005, Shinn demanded that HRPS pay the full contact price of $6,320 for the fruit harvested under the Contract.ii HRPS responded to Shinn's demand-letter via correspondence dated March 24, 2005. In this letter, HRPS acknowledged the Contract's existence but disclaimed the duty to pay in full due to the fruit's generally poor quality. HRPS expressed some willingness to resolve the matter amicably but offered no payment. Shinn was not satisfied and initiated this administrative proceeding. Ultimate Factual Determinations HRPS harvested and hauled away the oranges identified to the Contract. This performance constituted acceptance of the goods, and such acceptance was made with knowledge of a (possible) nonconformity, namely that the oranges were not fresh fruit quality due to rust mite damage. The apparent nonconformity was made manifest to HRPS shortly after the harvest, when an unusually small percentage of the pertinent crop was "packed out." HRPS failed, however, to notify Shinn of the breach within a reasonable time after confirming the nonconformity. Consequently, HRPS is barred from any remedy for breach. HRPS's failure to pay for the oranges at the Contract rate constituted a breach of the Contract entitling Shinn to recover the full price, together with pre-award interest. Accordingly, HRPS is obligated to pay Shinn the principal amount of $6,320.00, together with statutory interest of $378.20 (for the period 02/22/05 - 12/31/05). Interest will continue to accrue on the outstanding balance of $6,320.00 in the amount of $1.56 per day from January 1, 2006, 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 Shinn the sum of $6,320.00, together with pre-award interest in the amount of $378.20 (through December 31, 2005), plus additional interest from January 1 2006, until the date of the final order, which will accrue in the amount of $1.56 per day. DONE AND ENTERED this 13th day of December, 2005, 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 13th day of December, 2005.
The Issue The issues are whether Respondent Delicious Citrus Packing, LLC (Respondent), as a citrus fruit dealer, has failed to pay Petitioner for citrus fruit, as required by section 601.64(4), Florida Statutes; and, if so, the amount that Respondent owes Petitioner.
Findings Of Fact Respondent holds a Citrus Fruit Dealer's License number 252, effective August 31, 2015, for the 2015-16 season. The surety is Respondent Platte River Insurance Company. During the 2015-16 season, Petitioner picked citrus fruit from the groves of various third parties and transported the fruit to Respondent, which cleaned, waxed, and graded the fruit prior to selling it to various retailers, primarily, it seems, in South Florida. During the 2014-15 season, Petitioner and Respondent entered into contracts covering their respective rights and obligations in connection with transactions identical to those set forth in the preceding paragraph. An example is a contract dated April 10, 2015, signed by Petitioner and Respondent, specifying that Petitioner would purchase from a named third party from a named portion of a grove approximately 2000 citrus fruit for a delivered price of $16 per box with payment due upon delivery. The contract provides that Petitioner makes no allowance for fruit not meeting Respondent's specifications because Respondent had examined and preapproved the fruit on the tree. The parties did not document their agreement during the 2015-16 season, but the conditions were identical, although the price per box decreased, as set forth below. As was their practice during the preceding season, prior to the purchase and delivery by Petitioner, representatives of both companies visited the grove with the fruit still on the tree, and Respondent's representative approved the fruit, so, again, the agreement permitted no allowances for nonconforming fruit. Petitioner produced trip tickets documenting the delivery of 791 boxes of citrus fruit--all oranges--from September 25, 2015, through October 24, 2015. At this point, representatives of Petitioner and Respondent met to discuss the price of the fruit. Respondent complained that the fruit was too expensive based on what it could charge its purchasers, so Petitioner went back to the grove owners and negotiated a reduction in price. On November 2, 2015, Petitioner agreed to reduce its price from an undisclosed price per box to $15.50 per box, so as to reduce the outstanding balance for the 7791 boxes already delivered to $120,760.50. At that time, Respondent paid $85,250.50, leaving a balance due of $35,510. The parties promptly resumed their business dealings. A trip ticket dated November 2, 2015, documented the delivery of 550 boxes, for which the agreed-upon price was the $15.50 that the parties had set for the previous deliveries. However, even this price proved too high for Respondent, so the next two trip tickets, dated November 3 and 4, 2015, for a total of 1072 boxes, were priced at $13.50 per box. At some point, Respondent made two payments totaling $8811, and Respondent processed other fruit for Petitioner, earning a total credit of $2486 to be applied to the outstanding balance. These transactions reduced the balance to $47,210, which is the amount that Respondent presently owes Petitioner. The finding in the preceding paragraph reduced Petitioner's claim by $7157. As shown on the invoice dated April 6, 2016, received into evidence as Petitioner Exhibit 5, this balance was carried forward from the 2014-15 season. As explained in the Conclusions of Law, this case is limited to the 2015-16 season due to the timing of the filing of the Complaint. The findings in the preceding paragraphs discredit the testimony of Respondent's witnesses as to bad fruit that could not be sold. First, Respondent bore the risk of fruit that could not be sold for any reason, including spoilage. Second, Respondent did not assert this complaint when it negotiated a new purchase price on November 2, 2015. Third, Respondent did not object to the series of invoices that Petitioner submitted to Respondent, culminating in the April 6 invoice. Fourth, the testimony of Respondent's owner was vague and confusing, but twice seemed to confirm the indebtedness.
Recommendation It is RECOMMENDED that the Department of Agriculture and Consumer Services enter a final order determining that Respondent has violated section 601.64(4) by failing to pay Petitioner the sum of $47,210 for citrus fruit that Petitioner sold to Respondent during the 2015-16 shipping season and fixing a reasonable time within which Respondent shall pay such sum to Petitioner. DONE AND ENTERED this 6th day of March, 2017, in Tallahassee, Leon County, Florida. S ROBERT E. MEALE 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 6th day of March, 2017. COPIES FURNISHED: W. Alan Parkinson, Bureau Chief Bureau of Mediation and Enforcement Department of Agriculture and Consumer Services Rhodes Building, R-3 2005 Apalachee Parkway Tallahassee, Florida 32399-6500 (eServed) Emmitt King, Jr. KAD Harvesting and Hauling, LLC 850 South 21st Street Fort Pierce, Florida 34950 Platte River Insurance Company Attn: Claims Department Post Office Box 5900 Madison, Wisconsin 53705-0900 Douglas A. Lockwood, Esquire Straughn & Turner, P.A. 255 Magnolia Avenue Southwest Post Office Box 2295 Winter Haven, Florida 33880 (eServed) Dwight Johnathan Rhodeback, Esquire Rooney & Rooney, P.A. 1517 20th Street Vero Beach, Florida 32960 (eServed) Lorena Holley, General Counsel Department of Agriculture and Consumer Services 407 South Calhoun Street, Suite 520 Tallahassee, Florida 32399-0800 (eServed) Honorable Adam Putnam Commissioner of Agriculture Department of Agriculture and Consumer Services The Capitol, Plaza Level 10 Tallahassee, Florida 32399-0810
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 Whether Respondent, a citrus dealer, owes Petitioner, a citrus producer/grower, compensation for breach of a contract to buy, pick, haul, and sell fruit from Petitioner’s grove. If so, what is the reasonable amount of compensation.
Findings Of Fact Mecca includes a thirty-six acre Murcott tangerine grove in Lakeworth, Florida, purchased by Leonard Mecca in 2003. Murcott tangerines are primarily sold as fresh fruit. Through its owner, Mr. Mecca, Petitioner entered into a contract, on January 3, 2006, Emerald to pick fruit from the grove by April 10, 2006. Old Republic Surety Company is surety on the contract performance bond for $59,000.00, the maximum amount of compensation that can be recovered, if any. On behalf of Emerald, Keith Emmett, a fruit buyer with 25 years of experience, personally visited the Mecca grove and, on January 3, 2006, estimated the number of boxes of fruit at 5,000 boxes and sales price at $14.00 a box. Mr. Emmett’s estimate was the basis for the terms of the contract that was accepted by Mr. Mecca. Mr. Mecca also testified that he contracted with another organization, River Citrus, to be the caretaker of the grove. Mr. Mecca’s contract with Emerald included the statement that “[g]rower agrees to keep said fruit clean and to protect said fruit against fire, and to dust, spray and fertilize the same in such a manner that will not cause injury to said fruit or groves.” Emerald was, under the terms of the contract, required to pay for all “merchantable” fruit at picking time. At sometime in February or March, Mr. Mecca (not his caretaker) discovered that the irrigation system at the grove was not working. Mr. Mecca testified that he had the system repaired within two days. Weed control at the grove was to be done by the use of herbicides and mowing. Mr. Mecca testified that he had a conversation about the condition of the grove with Mr. Emmett, but only about water. Mr. Emmett visited the Mecca grove in late February or early March to see if the fruit was ready to pick to fill pending orders. He described the condition of the grove as having a “hard wilt,” meaning leaves curled, with soft, spongy green fruit. The weeds indicated to him an absence of mowing and herbicides. Mr. Emmett returned to the grove in April and described the fruit as still soft to the touch with a green cast. He also testified that he notified Mr. Mecca, in conversations through the month of March, that the grove needed watering and that the fruit was soft and needed more time. Mr. Mecca testified that he contacted Mr. Emmett several times in March and April to find out when the fruit would be picked because he believed it was getting overripe. Mr. Mecca testified that Mr. Emmett was waiting to pick the fruit late in the season when market prices rose enough to justify the $14.00 a box contract price. Mr. Mecca also testified regarding when he decided to stop negotiating with Emerald and to use another packing house, as follows: It had to be the day that Keith Emmett had his man, Bill Turner, call me to tell me that he was not going to be able to use the fruit unless I wanted -- to wait another two weeks. So -- which would have been around the 20th of April. Q. So that would have been the -- on or about the time that the -- you were informed that the fruit couldn’t be used as fresh fruit; is that correct? By Emerald? A. I was informed -- I was informed by Emerald that they didn’t want to pick any more fruit unless I wanted to wait two more weeks and try again, which was the story I heard every two weeks. Bill Turner, who was in charge of harvesting the fruit for Ridge Harvesting, previously had visited and inspected the Mecca grove in February, after Emerald received a report that the well was broken. He testified that he found wilted trees and lots of weeds. By the time he talked to Mr. Mecca about the condition of the grove, he recalled that the well had already been fixed. One load of 500 boxes of Mecca fruit was picked by Ridge Harvesting for Emerald on April 19, 2006, but failed to pass state inspection. Emerald, nevertheless, paid Mecca $14.00 a box for the 500 boxes, or $7,000.00, and on April 20, 2006, sent a letter to Mecca releasing the fruit back to Mecca and, in effect, terminating the January contract based on the poor condition of the fruit. The letter specified that the fruit was “. . . spongy, soft and indented from the weight of the fruit in the box.” Mr. Emmett testified that he suggested that Mr. Mecca agree to sell the fruit at lower prices for juice, rather than as fresh fruit. He testified that Mr. Mecca declined the offer and notified Mr. Emmett that he was going to use a different packing house. Donald Owens, a field buyer for Rio Citrus (Rio) had driven by the Mecca grove some time in April, and noticed that the fruit had not been picked. He was familiar with the grove, having picked it in prior years before it changed ownership. Mr. Owens searched out the new grower and called Mr. Mecca about picking the fruit, but was told that the fruit was under contract with another picker. On or about April 20, 2006, after Emerald’s representative notified him that they were not going to use the fruit, Mr. Mecca called Donald Owens back, met him at the grove and entered into a verbal contract for Rio to pick the fruit in what Mr. Mecca and Mr. Owens described as a “salvage operation.” When Donald Owens saw the grove, on or about April 20, 2006, he testified that the grass was high, the fruit was small but, he believed, within the criteria that you can pack as fresh fruit and otherwise merchantable. He testified that he told Mr. Mecca that, before he did anything, the grass had to be mowed. Mr. Owen’s company picked a total of 2,106 boxes of tangerines on April 24, April 25, May 1, and May 4, 2006, based on the dates on the trip tickets. Of those, according to Donald Owens and his settlement statements, 69 percent passed inspection and were packed to sell as fresh fruit, but 31 percent were so-called “eliminations” and had to be taken to a canning processing plant to be juiced. Mr. Owens testified that his company, Rio, stopped picking fruit because the canning processing plant stopped taking Murcotts. If Rio had continued, then he estimated that from 25 to 30 percent of the fruit would have ended up in cow pastures at a significant financial loss, considering the expense of picking, loading, hauling, separating, and hauling fruit by grade to a cow pasture. Rio paid Mecca approximately $12,000 for the fruit it picked and sold. The remaining fruit in the grove fell to the ground. In 2004, Emerald picked 9,000 boxes of fruit from the Mecca grove. Donald Owens, whose Rio company picked 2,106 boxes from a part of one of the three divisions of the grove, estimates that each of the three sections could have provided about 3,000 boxes each, or an approximate total of 9,000 boxes of fruit from the Mecca grove, of which approximately 6,000 remained after Rio stopped picking the fruit. In 2005, Mecca produced only 600 boxes of fruit due to hurricane damage and also because Murcott tangerines produce in large volumes every other year. In the Mecca contract with Emerald in 2006, Mr. Emmett estimated the number of boxes at 5,000 merchantable boxes for the 2006 growing season. Although Emerald picked 9,000 boxes in 2004, it is reasonable to believe that the yield would be lower after some trees were damaged during the hurricanes of 2005. The estimate and agreement made prior to this contractual dispute, 5,000 boxes, is accepted as the most reasonable estimate for the 2006 growing season. Stuart Arost, the owner of Emerald, testified that he had contracts to sell elimination Murcott tangerines through April and into the first part of May to canning plants in Umatilla and Haines City. One of those plants, he testified, is cooperative-owned and will take Murcotts as long as the owners are still harvesting the fruit, even into June. Emerald, more likely than not, could have sold the fruit for juice for $10.00 a box with net proceeds to Mecca of $8.00 a box if allowed to further revise the contract or mitigate damages. Mr. Arost testified that further damages could have been mitigated if Don Owens and Rio had continued to pick fruit and used the available processors for the elimination, but there is no evidence that Mr. Owens was aware of the alternative. The evidence, based on the testimony of all of the witnesses who entered the grove, supports a conclusion that some of the fruit in the grove was damaged due to lack of proper care, and that, more likely than not, resulted in the initial failure to pass inspection and the subsequent rate of eliminations. Although 500 boxes taken by Emerald failed USDA inspection, the fact that 2,106 boxes subsequently passed inspection indicates that Emerald correctly advised Mr. Mecca to wait another two weeks until about the time that Rio harvested the fruit rather than insisting that Emerald resume harvesting before the fruit was firm. While Mr. Mecca had agreed to the two-week extensions in the past, his refusal to agree on or about April 20, 2006, resulted in Emerald’s termination of the contract and his decision to use a different packing house.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law it is RECOMMENDED that a final order be entered denying any recovery by Petitioner Mecca Farms from Respondents Emerald Packing Company, Inc. and Old Republic Surety Company, as Surety. DONE AND ENTERED this 23rd day of January, 2007, in Tallahassee, Leon County, Florida. S ELEANOR M. HUNTER 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 23rd day of January, 2007. COPIES FURNISHED: Christopher E. Green Department of Agriculture and Consumer Services Office of Citrus License and Bond Mayo Building, M-38 Tallahassee, Florida 32399-0800 Franklin T. Walden, Esquire Law Offices of Franklin T. Walden 1936 Lee Road, Suite 100 Winter Park, Florida 32789 Eric Severson, Esquire Alley, Maass, Rogers & Lindsay, P.A. 340 Royal Poinciana Way, Suite 321 Palm Beach, Florida 33480-0431 Old Republic Surety Company Post Office Box 1635 Milwaukee, Wisconsin 53201 Richard D. Tritschler, General Counsel Department of Agriculture and Consumer Services 407 South Calhoun Street, Suite 520 Tallahassee, Florida 32399-0800 Honorable Charles H. Bronson Commissioner of Agriculture Department of Agriculture and Consumer Services The Capitol, Plaza Level 10 Tallahassee, Florida 32399-0810
The Issue The issue in this case is whether Respondent owes Petitioner money on a citrus contract and, if so, how much.
Findings Of Fact Petitioner owns citrus groves in Wauchula and one is near Zolfo Springs. Due to its proximity to a homesite, the latter grove is called the homeplace grove. Respondent operates a citrus packinghouse and a small retail outlet for citrus. On October 7, 1994, Petitioner and Respondent entered into a contract under which Petitioner agreed to sell to Respondent naval oranges at the price of $6 per box on the tree. Petitioner insisted on the contract and supplied the form. The contract states that the fruit "will be picked by Dec. 20, 1994." This is handwritten in the blank space for quantity of fruit. Elsewhere the contract provides a space for a completion date for picking, but this space is left blank. The contract adds: "However, notwithstanding the foregoing provision, Buyer, at its sole discretion[,] shall determine the dates and times for accomplishing the picking, loading, or hauling of said fruit." The contract notes that there are an estimated 3000 boxes at the Wauchula grove and an estimated 500 boxes at the homeplace grove. The contract states: Buyer shall only be required hereunder to accept delivery of the estimated quantity of fruit set forth herein; however, Buyer may, at its sole option, elect to accept delivery of all fruit grown or being grown at the grove locations described above at the prices specified herein. After signing the contract, the price of navel oranges dropped considerably. Also, Respondent had been relying on a third party to purchase much of the fruit from him, but the third party did not do so. Through December 9, 1994, Respondent took delivery on 1662 boxes of navel oranges. Petitioner picked the first 820 boxes, for which Respondent paid an additional, agreed-upon $2 per box. Respondent picked the remainder of the 1662 boxes, for which Respondent paid $11,612, pursuant to the contract. Petitioner became increasingly concerned with Respondent's slow progress. They agreed to reduce the price to $5 per box for 60 boxes picked on December 13, 1994, and then $4 per box for 360 boxes picked after the December 20 picking date stated in the contract. Pursuant to their new agreement, Respondent paid $300 for the 60 boxes picked on December 13, 1994, and $1440 for the remaining 360 boxes picked between December 27, 1994, and January 11, 1995. Believing that Respondent was obligated to take the entire output from the two groves, which proved to be a total of 4232 boxes, Petitioner's principal concluded that Respondent could not meet its contractual obligations. Without notice to Respondent, Petitioner agreed with Mt. Dora Growers Cooperative to pick the remaining fruit. The growers coop picked 920 boxes on January 11, 1995, 900 boxes on January 12, 1995, and 330 boxes on January 16, 1995. For a total of 2150 boxes, the growers coop paid Petitioner $498.84, or $0.23 per box. Petitioner had better luck with the homeplace oranges. By contract dated January 24, 1995, again without notice to Respondent, Petitioner sold 500 boxes of navel oranges to Keith Watson, Inc. for $2 per box. Respondent took delivery of 1220 boxes in October, 122 boxes in November, 320 boxes through December 9, 380 boxes at reduced prices for the rest of December, and 40 boxes in the first 11 days of January. This declining trend suggests problems. However, this fact alone does not prove an anticipatory breach by Respondent. Nothing in the record establishes Respondent's intent to repudiate the contract. There was still time for Respondent or, more likely, a third party to pick the remaining boxes for which Respondent was liable (1418). The growers coop removed 1820 boxes in two days. Also, the price and urgency of the growers coop sale are undermined by the sale two weeks later of 500 boxes at $2 per box.
Recommendation It is RECOMMENDED that the Department of Agriculture and Consumer Services enter a final order dismissing the complaint. ENTERED on July 7, 1995, in Tallahassee, Florida. ROBERT E. MEALE 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 on July 7, 1995. COPIES FURNISHED: W. Ralph Durrance, Jr. P.O. Box 5647 Lakeland, FL 33807-5647 Gary Whidden Whidden Citrus & Packinghouse, Inc. 396 Country Road 630A Frostproof, FL 33843 Florida Farm Bureau General Insurance Company P.O. Box 147030 Gainesville, FL 32614-7030 Hon. Bob Crawford Commissioner of Agriculture The Capitol, PL-10 Tallahassee, FL 32399-0810 Richard Tritschler, General Counsel Department of Agriculture The Capitol, PL-10 Tallahassee, FL 32399-0810 Brenda Hyatt, Chief Bureau of Licensing and Bond Department of Agriculture 508 Mayo Building Tallahassee, FL 32399-0800
The Issue Whether Respondent, C & J Fruit and Melons, Inc. (C & J Fruit), a citrus fruit dealer and registered packer, owes Petitioner, John Stephens, Inc., a citrus dealer, a sum of money for grapefruit and oranges sold and delivered to C & J Fruit's citrus fruit-packing house for processing.
Findings Of Fact Petitioner, John Stephens, Inc., is a Florida-licensed citrus fruit dealer operating within the Department of Agriculture and Consumer Services' regulatory jurisdiction. Respondent, C & J Fruit & Melons, Inc., was a Florida- licensed citrus fruit dealer and operated a registered packing house in Frostproof, Florida, during the 2001-2002 citrus shipping season. Respondent, Auto Owners Insurance, was the surety for C & J Fruit's citrus fruit dealer's license in the amount of $14,000.00, for the 2001-2002 season. At the beginning of the 2001-2002 season, Petitioner and C & J Fruit entered into a verbal contract under which Petitioner agreed to contract with various grove owners and grove harvesters in the Polk County, Florida, area. The understanding was that Petitioner would obtain various varieties of grapefruit, oranges, and tangerines from the growers and harvesters and deliver the fruit to C & J Fruit's packing house. Petitioner was responsible for payment to the grove owners and harvesters. C & J Fruit would process the fruit, supply the citrus fruit to retail and wholesale suppliers, and account and pay for the fruit received from Petitioner. Petitioner and C & J Fruit had conducted business in this fashion for many years prior to this season. On October 23, 2001, C & J Fruit sought protection from creditors under Chapter 11 of the United States Bankruptcy Code in the U.S. Bankruptcy Court, Middle District of Florida, Tampa Division, Case No. 01-19821-8W1. Following the filing of bankruptcy, no other supplier would provide C & J Fruit with citrus fruit. With Petitioner's consent, C & J Fruit filed an emergency motion to authorize a secured interest to Petitioner, if it would continue to supply C & J Fruit's packing house with fruit. The bankruptcy court granted the motion, and in November 2001, Petitioner began supplying C & J Fruit's packing house with fresh citrus fruit. The preponderance of evidence proves that Petitioner delivered to C & J Fruit's packing house during November 2001 pursuant to the contract: 540 boxes of grapefruit at $3.00 per box for a total of $1,620.00; 3,044 boxes of oranges at $4.00 per box for a total of $12,176.00; 330 boxes of tangerines at $3.50 per box for a total of $1,155.00; and 1,953 boxes of navel oranges at $2.00 per box for a total of $3,906.00. C & J Fruit was billed for this amount. Accordingly, C & J Fruit was obligated to pay Petitioner the total sum of $18,857.00 for the fruit. When payment was not received in a timely matter, shipment of citrus fruit to the packing house was discontinued. Petitioner performed all of its duties under the contract, and C & J Fruit failed to pay or account for the citrus fruit delivered to its packing house under the terms of the contract. C & J Fruit is, therefore, indebted to Petitioner in the amount of $18,857.00
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that a final order be entered requiring Respondent, C & J Fruit and Melons, Inc., to pay to Petitioner, John Stephens, Inc., the sum of $18,857.00. DONE AND ENTERED this 29th day of December, 2004, in Tallahassee, Leon County, Florida. S DANIEL M. KILBRIDE Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 29th day of December, 2004. COPIES FURNISHED: Brenda D. Hyatt, Bureau Chief Bureau of License and Bond Department of Agriculture and Consumer Services 407 South Calhoun Street, Mail Station 38 Tallahassee, Florida 32399-0800 Honorable Charles H. Bronson Commissioner 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 Clemon Browne, President C & J Fruit & Melons, Inc. Post Office Box 130 Lake Hamilton, Florida 33851-0130 John A. Stephens John Stephens, Inc. Post Office Box 1098 Fort Meade, Florida 33841 Jason Lowe, Esquire GrayRobinson, P.A. Post Office Box 3 Lakeland, Florida 33802
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
