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.
The Issue The issue in DOAH Case No. 02-3648RE is whether Emergency Rules 20ER02-01, 20ER02-02, and 20ER02-03 constitute an invalid exercise of delegated legislative authority. The issue in DOAH Case No. 02-4607RP is whether Proposed Rules 20-15.001, 20- 15.002, and 20-15.003, Florida Administrative Code, constitute an invalid exercise of delegated legislative authority.
Findings Of Fact Based on the stipulated facts, and the entire record in this proceeding, the following findings of fact are made: The Florida Citrus Commission was established in 1935 to organize and promote the growing and sale of various citrus products, fresh and processed, in the State of Florida. The purpose of the Citrus Commission is today reflected in Section 601.02, Florida Statutes. The powers of the Florida Citrus Commission ("the Commission") and the Department, are set forth in full in Section 601.10, Florida Statutes. The powers of the Department include the power to tax and raise other revenue to achieve the purposes of the Department. In particular, Section 601.10(1) and (2), Florida Statutes, state: The Department of Citrus shall have and shall exercise such general and specific powers as are delegated to it by this chapter and other statutes of the state, which powers shall include, but shall not be confined to, the following: To adopt and, from time to time, alter, rescind, modify, or amend all proper and necessary rules, regulations, and orders for the exercise of its powers and the performance of its duties under this chapter and other statutes of the state, which rules and regulations shall have the force and effect of law when not inconsistent therewith. To act as the general supervisory authority over the administration and enforcement of this chapter and to exercise such other powers and perform such other duties as may be imposed upon it by other laws of the state. The Department is authorized to set standards by Section 601.11, Florida Statutes, as follows: The Department of Citrus shall have full and plenary power to, and may, establish state grades and minimum maturity and quality standards not inconsistent with existing laws for citrus fruits and food products thereof containing 20 percent or more citrus or citrus juice, whether canned or concentrated, or otherwise processed, including standards for frozen concentrate for manufacturing purposes, and for containers therefor, and shall prescribe rules or regulations governing the marking, branding, labeling, tagging, or stamping of citrus fruit, or products thereof whether canned or concentrated, or otherwise processed, and upon containers therefor for the purpose of showing the name and address of the person marketing such citrus fruit or products thereof whether canned or concentrated or otherwise processed; the grade, quality, variety, type, or size of citrus fruit, the grade, quality, variety, type, and amount of the products thereof whether canned or concentrated or otherwise processed, and the quality, type, size, dimensions, and shape of containers therefor, and to regulate or prohibit the use of containers which have been previously used for the sale, transportation, or shipment of citrus fruit or the products thereof whether canned or concentrated or otherwise processed, or any other commodity; provided, however, that the use of secondhand containers for sale and delivery of citrus fruit for retail consumption within the state shall not be prohibited; provided, however, that no standard, regulation, rule, or order under this section which is repugnant to any requirement made mandatory under federal law or regulations shall apply to citrus fruit, or the products thereof, whether canned or concentrated or otherwise processed, or to containers therefor, which are being shipped from this state in interstate commerce. All citrus fruit and the products thereof whether canned or concentrated or otherwise processed sold, or offered for sale, or offered for shipment within or without the state shall be graded and marked as required by this section and the regulations, rules, and orders adopted and made under authority of this section, which regulations, rules, and orders shall, when not inconsistent with state or federal law, have the force and effect of law. The Department is authorized to conduct citrus research by Section 601.13, Florida Statutes. To help pay for these duties of the Department, the Legislature first enacted the "box tax" in 1949. The box tax is now codified as Section 601.15(3), Florida Statutes. Section 601.15(3)(a), Florida Statutes, provides in relevant part: There is hereby levied and imposed upon each standard-packed box of citrus fruit grown and placed into the primary channel of trade in this state an excise tax at annual rates for each citrus season as determined from the tables in this paragraph and based upon the previous season's actual statewide production as reported in the United States Department of Agriculture Citrus Crop Production Forecast as of June 1. Section 601.15(3)(a), Florida Statutes, goes on to set forth specific rates for fresh grapefruit, processed grapefruit, fresh oranges, processed oranges, and fresh or processed tangerines and citrus hybrids. Section 601.15(1), Florida Statutes, sets forth the Department's authority to administer the box tax, as follows: The administration of this section shall be vested in the Department of Citrus, which shall prescribe suitable and reasonable rules and regulations for the enforcement hereof, and the Department of Citrus shall administer the taxes levied and imposed hereby. All funds collected under this section and the interest accrued on such funds are consideration for a social contract between the state and the citrus growers of the state whereby the state must hold such funds in trust and inviolate and use them only for the purposes prescribed in this chapter. The Department of Citrus shall have power to cause its duly authorized agent or representative to enter upon the premises of any handler of citrus fruits and to examine or cause to be examined any books, papers, records, or memoranda bearing on the amount of taxes payable and to secure other information directly or indirectly concerned in the enforcement hereof. Any person who is required to pay the taxes levied and imposed and who by any practice or evasion makes it difficult to enforce the provisions hereof by inspection, or any person who, after demand by the Department of Citrus or any agent or representative designated by it for that purpose, refuses to allow full inspection of the premises or any part thereof or any books, records, documents, or other instruments in any manner relating to the liability of the taxpayer for the tax imposed or hinders or in anywise delays or prevents such inspection, is guilty of a misdemeanor of the second degree, punishable as provided in s. 775.082 or s. 775.083. The box tax was challenged in 1936 and the Florida Supreme Court issued an opinion in 1937 upholding the validity of the box tax. C.V. Floyd Fruit Company v. Florida Citrus Commission, 128 Fla. 565, 175 So. 248 (1937). In 1970, the Legislature enacted the "equalization tax," codified as Section 601.155, Florida Statutes. The statute mirrored Section 601.15, Florida Statutes, but added certain processors who were mixing foreign citrus products with Florida products. The purpose of the equalization tax was to have all Florida processors of citrus products help pay for the costs of the Department, rather than have the burden fall entirely on the Florida growers subject to the box tax. Section 601.155, Florida Statutes, provides, in relevant part: The first person who exercises in this state the privilege of processing, reprocessing, blending, or mixing processed orange products or processed grapefruit products or the privilege of packaging or repackaging processed orange products or processed grapefruit products into retail or institutional size containers or, except as provided in subsection (9) or except if a tax is levied and collected on the exercise of one of the foregoing privileges, the first person having title to or possession of any processed orange product or any processed grapefruit product who exercises the privilege in this state of storing such product or removing any portion of such product from the original container in which it arrived in this state for purposes other than official inspection or direct consumption by the consumer and not for resale shall be assessed and shall pay an excise tax upon the exercise of such privilege at the rate described in subsection (2). Upon the exercise of any privilege described in subsection (1), the excise tax levied by this section shall be at the same rate per box of oranges or grapefruit utilized in the initial production of the processed citrus products so handled as that imposed, at the time of exercise of the taxable privilege, by s. 601.15 per box of oranges. In order to administer the tax, the Legislature provided the following relevant provisions in Section 601.155, Florida Statutes: Every person liable for the excise tax imposed by this section shall keep a complete and accurate record of the receipt, storage, handling, exercise of any taxable privilege under this section, and shipment of all products subject to the tax imposed by this section. Such record shall be preserved for a period of 1 year and shall be offered for inspection upon oral or written request by the Department of Citrus or its duly authorized agent. Every person liable for the excise tax imposed by this section shall, at such times and in such manner as the Department of Citrus may by rule require, file with the Department of Citrus a return, certified as true and correct, on forms to be prescribed and furnished by the Department of Citrus, stating, in addition to other information reasonably required by the Department of Citrus, the number of units of processed orange or grapefruit products subject to this section upon which any taxable privilege under this section was exercised during the period of time covered by the return. Full payment of excise taxes due for the period reported shall accompany each return. All taxes levied and imposed by this section shall be due and payable within 61 days after the first of the taxable privileges is exercised in this state. Periodic payment of the excise taxes imposed by this section by the person first exercising the taxable privileges and liable for such payment shall be permitted only in accordance with Department of Citrus rules, and the payment thereof shall be guaranteed by the posting of an appropriate certificate of deposit, approved surety bond, or cash deposit in an amount and manner as prescribed by the Department of Citrus. * * * (11) This section shall be liberally construed to effectuate the purposes set forth and as additional and supplemental powers vested in the Department of Citrus under the police power of this state. In March 2000, certain citrus businesses challenged Section 601.155(5), Florida Statutes, as being unconstitutional. At the time of the suit, Section 601.155(5), Florida Statutes, read as follows: All products subject to the taxable privileges under this section, which products are produced in whole or in part from citrus fruit grown within the United States, are exempt from the tax imposed by this section to the extent that the products are derived from oranges or grapefruit grown within the United States. In the case of products made in part from citrus fruit grown within the United States, it shall be the burden of the persons liable for the excise tax to show the Department of Citrus, through competent evidence, proof of that part which is not subject to a taxable privilege. The citrus businesses claimed the exemption in Section 601.155(5) rendered the tax unconstitutionally discriminatory, in that processors who imported juice from foreign countries to be blended with Florida juice were subject to the equalization tax, whereas processors who imported juice from places such as California, Arizona and Texas enjoyed an exemption from the tax. The case, Tampa Juice Service, Inc., et al. v. Department of Citrus, Case No. GCG-00-3718 (Consolidated), was brought in the Tenth Judicial Circuit Court, in and for Polk County. Judge Dennis P. Maloney of that court continues to preside over that case. In a partial final declaratory judgment effective March 15, 2002, Judge Maloney found Section 601.155, Florida Statutes, unconstitutional because it violated the Commerce Clause of the United States Constitution due to its discriminatory effect in favor of non-Florida United States juice. In an order dated April 15, 2002, Judge Maloney severed the exemption in Section 601.155(5), Florida Statutes, from the remainder of the statute. The court's decision necessitated the formulation of a remedy for the injured plaintiffs. While the parties were briefing the issue before the court, the Florida Legislature met and passed Chapter 2002-26, Laws of Florida, which amended Section 601.155, Florida Statutes, to read as follows: Products made in whole or in part from citrus fruit on which an equivalent tax is levied pursuant to s. 601.15 are exempt from the tax imposed by this section. In the case of products made in part from citrus fruit exempt from the tax imposed by this section, it shall be the burden of the persons liable for the excise tax to show the Department of Citrus, through competent evidence, proof of that part which is not subject to a taxable privilege. Chapter 2002-26, Laws of Florida, was given an effective date of July 1, 2002. By order dated August 8, 2002, Judge Maloney set forth his decision as to the remedy for the plaintiffs injured by the discriminatory effect of Section 601.155(5), Florida Statutes. Judge Maloney expressly relied on the rationale set forth in Division of Alcoholic Beverages and Tobacco v. McKesson Corporation, 574 So. 2d 114 (Fla. 1991)("McKesson II"). In its initial McKesson decision, Division of Alcoholic Beverages and Tobacco v. McKesson Corporation, 524 So. 2d 1000 (Fla. 1988), the Florida Supreme Court affirmed a summary judgment ruling that Florida's alcoholic beverage tax scheme, which gave tax preferences and exemptions to certain alcoholic beverages made from Florida crops, unconstitutionally discriminated against interstate commerce. The Florida Supreme Court also affirmed that portion of the summary judgment giving the ruling prospective effect, thus denying the plaintiff a refund of taxes paid pursuant to the unconstitutional scheme. The decision was appealed to the United States Supreme Court. In McKesson Corporation v. Division of Alcoholic Beverages and Tobacco, 496 U.S. 18 (1990), the United States Supreme Court reversed the Florida Supreme Court's decision as to the prospective effect of its decision. The United States Supreme Court held that: The question before us is whether prospective relief, by itself, exhausts the requirements of federal law. The answer is no: If a State places a taxpayer under duress promptly to pay a tax when due and relegates him to a postpayment refund action in which he can challenge the tax's legality, the Due Process Clause of the Fourteenth Amendment obligates the State to provide meaningful backward-looking relief to rectify any unconstitutional deprivation. 496 U.S. at 31 (footnotes omitted). The United States Supreme Court set forth the following options by which the state could meet its obligation to provide "meaningful backward-looking relief:" [T]he State may cure the invalidity of the Liquor Tax by refunding to petitioner the difference between the tax it paid and the tax it would have been assessed were it extended the same rate reductions that its competitors actually received. . . . Alternatively, to the extent consistent with other constitutional restrictions, the State may assess and collect back taxes from petitioner's competitors who benefited from the rate reductions during the contested tax period, calibrating the retroactive assessment to create in hindsight a nondiscriminatory scheme. . . . Finally, a combination of a partial refund to petitioner and a partial retroactive assessment of tax increases on favored competitors, so long as the resultant tax actually assessed during the contested tax period reflects a scheme that does not discriminate against interstate commerce, would render petitioner's resultant deprivation lawful and therefore satisfy the Due Process Clause's requirement of a fully adequate postdeprivation procedure. 496 U.S. at 40-41 (citations and footnotes omitted). The United States Supreme Court expressly provided that the state has the option of choosing the form of relief it will grant. In keeping with the United States Supreme Court opinion, the Florida Supreme Court granted the Division of Alcoholic Beverages and Tobacco (the "Division") leave to advise the Court as to the form of relief the state wished to provide. The Division proposed to retroactively assess and collect taxes from those of McKesson's competitors who had benefited from the discriminatory tax scheme. McKesson contended that a refund of the taxes it had paid was the only clear and certain remedy, because retroactive taxation of its competitors would violate their due process rights. McKesson II, 574 So. 2d at 115. The Florida Supreme Court remanded the case to the trial court for further proceedings on McKesson's refund claim, with the following instructions: While McKesson may not necessarily be entitled to a refund, it is entitled to a "clear and certain remedy," as outlined in the Supreme Court's opinion. Because nonparties, such as amici, will be directly affected by the retroactive tax scheme proposed by the state, all affected by the proposed emergency rule must be given notice and an opportunity to intervene in this action. Therefore, on remand, the trial court not only must determine whether the state's proposal meets "the minimum federal requirements" outlined in the Supreme Court's opinion, it also must determine whether the proposal comports with federal and state protections afforded those against whom the proposed tax will be assessed. We emphasize that the state has the option of choosing the manner in which it will reformulate the alcoholic beverage tax during the contested period so that the resultant tax actually assessed during that period reflects a scheme which does not discriminate against interstate commerce. Therefore, if the trial court should rule that the state's proposal to retroactively assess and collect taxes from McKesson's competitors does not meet constitutional muster and such ruling is upheld on appeal, the state may offer an alternative remedy for the trial court's review. However, any such proposal likewise must satisfy the standards set forth by the Supreme Court as well as be consistent with other constitutional restrictions. 574 So. 2d at 116. In the instant case, Judge Maloney assessed the options prescribed by the series of McKesson cases and concluded that the only fair remedy was to assess and collect back assessments from those who benefited from the unconstitutional equalization tax exemption. His August 8, 2002 order directed the Department to "take appropriate steps, consistent with existing law, to assess and collect the Equalization tax from those entities which [benefited] from the unconstitutional exemption." On September 18, 2002, the Department promulgated the Emergency Rules at issue in DOAH Case No. 02-3648RE. The Emergency Rules were filed with the Department of State on September 24, 2002, and took effect on that date. They were published in the October 4, 2002 issue of the Florida Administrative Weekly (vol. 28, no. 40, pp. 4271-4272). The full text of the Emergency Rules is: EQUALIZATION TAX ON NON-FLORIDA UNITED STATES JUICE 20ER02-1 Intent. The Court in Tampa Juice Service, et al v. Florida Department of Citrus in Consolidated Case Number GCG-003718 (Circuit Court in and for Polk County, Florida) severed the exemption contained in Section 601.155(5), Florida Statutes, that provided an exemption for persons who exercised one of the enumerated Equalization Tax privileges on non-Florida, United States juice. The Court had previously determined that the stricken provisions operated in a manner that violated the Commerce Clause of the United States Constitution. On August 8, 2002, the Court ordered that the Florida Department of Citrus "take appropriate steps, consistent with existing law, to assess and collect the Equalization tax from those entities which [benefited] from the unconstitutional exemption." It is the Florida Department of Citrus' intent by promulgating the following remedial Rule 20ER02-01 and Chapter 20-15, F.A.C., to implement a non-discriminatory tax scheme, which does not impose a significant tax burden that is so harsh and oppressive as to transgress constitutional limitations. These rules shall be applicable to those previously favored persons who received favorable tax treatment under the statutory sections cited above. Specific Authority 601.02, 601.10, 601.15, 601.155 FS. Law Implemented 601.02, 601.10, 601.15, 601.155 FS. History-- New 9-24-02. 20ER02-2 Definitions. "Previously favored persons" shall be defined as any person who exercised an enumerated Equalization Tax privilege as defined by Section 601.155, Florida Statutes, but who was exempt from payment of the Equalization Tax due to the exemption for non-Florida, United States juice set forth in the statutory provision, which was ultimately determined to be unconstitutional and severed from Section 601.155(5), Florida Statutes. The "tax period" during which the severed provisions of Section 601.155(5), Florida Statutes, were in effect shall be defined as commencing on October 6, 1997, and ending on March 14, 2002. "Tax liability" shall be defined as the total amount of taxes due to the Florida Department of Citrus during the "tax period," at the following rates per box for each respective fiscal year: Fiscal Year Processed Rate Orange Grapefruit 1997-1998 .175 .30 1998-1999 .17 .30 1999-2000 .18 .325 2000-2001 .175 .30 2001-2002 .165 .18 Specific Authority 601.02, 601.10, 601.15, 601.155 FS. Law Implemented 601.02, 601.10, 601.15, 601.155 FS. History-- New 9-24-02. 20ER02-3 Collection. The Florida Department of Citrus shall calculate the tax liability for each person or entity that exercised an enumerated Equalization Tax privilege outlined in section 601.155, Florida Statutes, upon non-Florida, United States juice based upon inspection records maintained by Florida Department of Agriculture and Consumer Services and the United States Department of Agriculture. Additionally, the Florida Department of Citrus will provide notice of the calculation to the previously favored persons by certified mail. The notice of the calculation shall contain a statement including the following categories: (a) Tax liability; (b) Gallons; Brix; Type of product; (e) Total solids; (f) Conversion rate; (g) Total boxes; (h) Delineation of non-Florida, United States juice. (2)(a) Contained within the notice will be the various legal options available to those who previously enjoyed the exemption, set forth in proposed Rule 20- 15.003(2), F.A.C. (b) Persons who previously enjoyed the exemption may petition to intervene in the case of Tampa Juice Service, Inc., et al, Consolidated Case No. GCG-003718, presently pending before the Circuit Court of the Tenth Judicial Circuit in and for Polk County. A hearing to consider arguments made by any intervenor, the Plaintiffs and the Florida Department of Citrus is currently scheduled to be heard by the Honorable Dennis Maloney on November 12, 2002, in Bartow, Florida. (3) The Florida Department of Citrus will not oppose the timely intervention of persons who previously enjoyed the subject exemption that wish to present a claim to the Court in the Tampa Juice Service, Inc., et al v. Florida Department of Citrus. However, the Florida Department of Citrus does not waive any argument regarding the validity of the calculation of the tax liability or that imposition of this tax is constitutional. Specific Authority 601.02, 601.10, 601.15, 601.155 FS. Law Implemented 601.02, 601.10, 601.15, 601.155 FS. History-- New 9-24-02. The Department's "Specific Reasons for Finding an Immediate Danger to the Public Health, Safety or Welfare" were set forth as follows: On March 18, 2002, the Court in the Tenth Judicial Circuit, State of Florida, in and for Polk County, entered a Partial Final Declaratory Judgment in the case of Tampa Juice Service, Inc., et al v. Florida Department of Citrus, Consolidated Case Number GCG-003718. In this order the Court ruled that the exemption in Section 601.155, F.S., for non-Florida, United States juice was unconstitutional. On or about April 15, 2002, the Court severed the exemption for non-Florida, United States juice from section 601.155(5), F.S. On August 8, 2002, the Court held that the Florida Department of Citrus was required to cure the invalidity of the equalization taxing scheme. To cure this invalidity, the Florida Department of Citrus promulgates Rule 20ER02-1, F.A.C., which will serve to implement the Court's order for a nondiscriminatory tax scheme and provide due process protections for the previously favored taxpayers. These rules are being promulgated on an emergency basis to meet time constraints associated with litigation and to establish guidelines which protect the public's and state's interest for the orderly and efficient collection and payment of the tax liability. Without these guidelines, the welfare of the citizens and the state would be adversely affected because of the immediate and widespread impact of the failure of previously favored persons to properly remit the tax. The Department's "Reason for Concluding that the Procedure is Fair Under the Circumstances" was set forth as follows: Promulgation of these guidelines using the emergency rule procedures is the only available mechanism which adequately protects the public interests under the circumstances which require collection and payment of the tax liability. This procedure is fair to the public and to the previously favored persons. It permits promulgation of the necessary guidelines within a time frame which allows the industry to be adequately informed of their duties, responsibilities and rights with respect to the tax liability. In the November 15, 2002 issue of the Florida Administrative Weekly (vol. 28, no. 46, pp. 4996-4998), the Department published the Proposed Rules at issue in DOAH Case No. 02-4607RP. The text of Proposed Rule 20-15.001, Florida Administrative Code, is identical to that of Emergency Rule 20ER02-1, set forth above. The text of Proposed Rule 20-15.002, Florida Administrative Code, is identical to that of Emergency Rule 20ER02-2, set forth above. The text of Proposed Rule 20- 15.003(1)&(3), Florida Administrative Code, is identical to that of Emergency Rule 20ER02-3(1)&(3), set forth above. The text of Proposed Rule 15.003(2), Florida Administrative Code, varies from the text of Emergency Rule 20ER02-3(2), and reads as follows: 20-15.003 Collection. Subsequent to adoption of this rule, the Florida Department of Citrus will provide to the previously favored persons by certified mail a Notice of Tax Liability which shall contain a demand for payment consistent with the above-referenced itemized statement. The Department will deem late payment of Equalization Taxes owed by previously favored persons to constitute good cause, and shall waive the 5 percent penalty authorized by Section 601.155(10), F.S., as compliance with either of the following is established by Department [sic]: Lump sum payment of the tax liability remitted with the filing of Department of Citrus Form 4R (incorporated by reference in Rule 20-100.004, F.A.C.) for the relevant years and then-applicable tax rate(s) per subsection 20-15.002(3), F.A.C., within 61 days of receiving Notice of Tax Liability; or Equal installment payments remitted with the filing of Department of Citrus Form 4R (incorporated by reference in Rule 20-100.004, F.A.C.) for the relevant years and then-applicable tax rate(s) per subsection subsection [sic] 20-15.002(3), F.A.C., over a 60-month period, the first payment being due within 61 days of receiving Notice of Tax Liability pursuant to subsection 20-15.003(2), F.A.C.; or The Good Cause provisions of 601.155(10), F.S., shall not apply to persons who do not comply with paragraph 20- 15.003(2)(a), F.A.C., or paragraph 20- 15.003(2)(b), F.A.C. Failure to pay the taxes or penalties due under 601.155, F.S. and Chapter 20-15, F.A.C., shall constitute grounds for revocation or suspension of a previously favored person's citrus fruit dealer's license pursuant to 601.56(4), F.S., 601.64(6), F.S., 601.64(7), F.S., and/or 601.67(1), F.S. Peace River is a Florida corporation and licensed citrus fruit dealer regulated by Chapter 601, Florida Statutes. As such, Peace River is subject to the rules of the Department. Peace River buys, sells, and manufactures bulk citrus juices. By correspondence dated October 2, 2002, Peace River was notified by the Department that Peace River would be liable for payment of $86,242.41 in Equalization taxes for the tax period of October 6, 1997 through March 14, 2002 (the "tax period"), pursuant to the terms of the Emergency Rules. Fresh Juice is a Florida corporation and licensed citrus fruit dealer regulated by Chapter 601, Florida Statutes. As such, Fresh Juice is subject to the rules of the Department. Fresh Juice buys, sells, and manufactures citrus juices. By correspondence dated October 2, 2002, Fresh Juice was notified by the Department that Fresh Juice would be liable for payment of $45,052.19 in Equalization taxes for the tax period, pursuant to the terms of the Emergency Rules. Sun Orchard is a Florida corporation and licensed citrus fruit dealer regulated by Chapter 601, Florida Statutes. As such, Sun Orchard is subject to the rules of the Department. Sun Orchard buys, sells, and manufactures citrus juices. By correspondence dated October 2, 2002, Sun Orchard was notified by the Department that Sun Orchard would be liable for payment of $45,052.19 in Equalization taxes for the tax period, pursuant to the terms of the Emergency Rules. During the tax period, Peace River, Fresh Juice, and Sun Orchard imported, stored and blended non-Florida, United States citrus juices. Neither Peace River, Fresh Juice, nor Sun Orchard is a party to the lawsuit styled Tampa Juice Service, Inc., et al. v. Department of Citrus, Case No. GCG-00-3718 (Consolidated). Peace River, Fresh Juice, and Sun Orchard contend that they relied on the tax exemption in making business decisions and had no notice that their activities regarding non-Florida, United States juice would be taxable upon the court's striking of the exemption in Section 601.155(5), Florida Statutes. Accordingly, Peace River, Fresh Juice, and Sun Orchard contend that, during the tax period, they had no opportunity to conform their conduct to avoid the tax or position themselves to claim a refund allowed by Section 601.155, Florida Statutes. Peace River, Fresh Juice, and Sun Orchard contend that they have not been obligated by Chapter 601, Florida Statutes, to keep specific records on their use of non-Florida United States citrus juices for the tax period, but admit they keep business records required by law, which may include some business records related to non-Florida United States juice during the tax period. Peace River, Fresh Juice, and Sun Orchard shipped products made with non-Florida, United States juice during the tax period without payment of the Equalization Tax.
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 is whether Respondent owes Petitioner $13,853.00 for failure to harvest Petitioner's 2004 Valencia orange crop, as alleged in the Complaint.
Findings Of Fact Petitioner, Lionel LaGrow, is a resident of Highlands County, Florida. Respondent, Chapman Fruit Company, Inc. (hereinafter "Respondent" or "Chapman"), is a Florida corporation with its principal place of business in Hardee County, Florida. Chapman is a duly licensed fruit buyer in the State of Florida and is owned by Ray Chapman (hereinafter referred to as "Mr. Chapman"). Mr. LaGrow owns and operates a 26-acre grove in Highlands County, Florida. At all times relevant to this proceeding, Mr. LaGrow's grove contained varieties of citrus referred to as "Earlies," "Mids," and "Valencias." The Earlies and Mids varieties are picked early in each fruit season and the Valencias are picked late in each fruit season. At all times relevant to this proceeding Reggie Cooper (hereinafter referred to as "Mr. Cooper") was an employee of Chapman. Mr. Cooper was authorized by Chapman to enter into binding agreements and to make arrangements for and supervise the picking and hauling of Mr. LaGrow's citrus. Mr. LaGrow and Chapman entered into a Pick and Haul Contract (hereinafter referred to as "Contract") dated November 9, 2001, by which Mr. LaGrow agreed to sell, and Chapman agreed to purchase, fruit grown on the 26-acre tract located in Highlands County, Florida, for shipping seasons 2001-2002, 2002-2003, and 2003-2004. The Contract did not provide prices within the Agreement itself for picking and hauling the fruit. The parties verbally agreed to prices for picking and hauling at the time of each year's harvest. The Contract, as written, was a "Delivered-In" Contract, meaning that Mr. LaGrow retained the right to arrange for picking and hauling the fruit at any time during the term of the Contract. Mr. Cooper made arrangements for and supervised the picking and hauling of Mr. LaGrow's citrus. After the citrus was picked, Chapman provided Mr. LaGrow statements that accurately and fairly account for all fruit harvested by Chapman's contracted harvester. The statements showed the gross income, the costs of picking and hauling, as well as other expenses, and the net income to Mr. LaGrow. The parties followed the procedure described in paragraph 7, beginning in November 2001 of the 2001-2002 citrus shipping season through the harvesting of the Earlies and Mids in the 2003-2004 fruit season. There were 3,531 boxes of Earlies and Mids harvested by Chapman's contractor in November 2001 for the 2001-2002 citrus shipping season from the LaGrow property. When multiplied by the total pounds of solids (19,881.16), a gross purchase price of $15,904.93 resulted. Picking and hauling in the amount of $2.00 per box was deducted leaving $8,180.86 payable to Mr. LaGrow. Chapman tendered a check in the amount of $8,180.86 to Mr. LaGrow. There were 3,103 boxes of Valencias harvested by Chapman's contractor in March 2002 for the 2001-2002 citrus shipping season from the LaGrow property. When multiplied by the total pounds of solids (21,085.57), a gross purchase price of $20,031.29 resulted. Picking and hauling in the amount of $2.20 per box was deducted leaving $13,134.87 payable to Mr. LaGrow. Chapman tendered a check in the amount of $13,134.87 to Mr. LaGrow. There were 1,785 boxes of Earlies and Mids harvested by Chapman's contractor in the 2002-2003 citrus shipping season from the LaGrow property. When multiplied by the total pounds of solids (11,063.98), a gross purchase price of $10,068.22 resulted. Picking and hauling in the amount of $2.86 per box was deducted leaving $4,628.44 payable to Mr. LaGrow. Chapman tendered a check in the amount of $4,628.44 to Mr. LaGrow. There were 1,594 boxes of Valencias harvested by Chapman's contractor in the 2002-2003 citrus shipping season from the LaGrow property. When multiplied by the total pounds of solids (10,582.23), a gross purchase price of $10,053.12 resulted. Picking and hauling in the amount of $2.77 per box was deducted leaving $5,601.87 payable to Mr. LaGrow. Chapman tendered a check in the amount of $5,601.87 to Mr. LaGrow. There were 316 boxes of Earlies and Mids harvested by Chapman's contractor in the 2003-2004 citrus shipping season by Chapman's contractor from the LaGrow property. When multiplied by the total pounds of solids (1,847.46), a gross purchase price of $1,385.59 resulted. Picking and hauling in the amount of $3.55 per box was deducted leaving $252.57 payable to Mr. LaGrow. Chapman tendered a check in the amount of $252.57 to Mr. LaGrow. There were no problems or disputes between Chapman and Mr. LaGrow regarding the harvesting of the citrus until the 2003-2004 Valencia crop was to be picked. All harvesting of Mr. LaGrow's fruit during the Contract period was performed by Chapman's contracted harvester. There was no fruit harvested from the LaGrow property by any one other than Chapman's contracted harvester during the Contract period. During the Contract period there was a steady decline in production from the LaGrow grove property. From the first year of the Contract to the second year of the Contract there was a nearly 51 percent reduction in the number of net boxes harvested. From the second year of the Contract to the third year of the Contract, with respect to the Earlies and Mids, there was an 82.3 percent reduction in the number of net boxes harvested. There were an insufficient number of boxes of Valencia oranges on the LaGrow property available for harvest in 2004. Had Chapman harvested, or arranged to harvest the 2004 Valencia crop, once picking and hauling charges were applied, a negative balance owed would have resulted. Mr. Cooper, on behalf of Chapman, made multiple attempts to arrange for harvesting of the 2004 Valencia crop, including, but not limited to, contacting M.E. Stephens, IV, who declined to harvest the fruit based on the quantity available for harvest. For the same reason, other harvesters advised Mr. Cooper that they could not harvest the LaGrow 2004 Valencia crop. Though unsuccessful, Mr. Cooper's efforts to have the crop harvested were reasonable under the circumstances. Mr. Cooper never told Mr. LaGrow that because of the quantity of the Valencia oranges in 2004, he was unable to find a contractor to harvest the fruit. Although it became apparent that Mr. Cooper had not arranged for the Valencia oranges to be harvested, Mr. LaGrow never contacted Mr. Chapman or Mr. Cooper. Under the subject Contract, Mr. LaGrow could harvest or make arrangements to have the Valencia oranges harvested. However, Mr. LaGrow failed to take steps in 2004 to have the Valencia oranges harvested and sold. Mr. LaGrow's Complaint contends that Chapman owes him $13,853.00 for failing to harvest and sell the Valencia oranges in the 2004 season. In Petitioner's Proposed Recommended Order, he seeks $9,586.50 in "damages."
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is: RECOMMENDED that the Commissioner of Agriculture enter a final order dismissing Petitioner's Complaint. DONE AND ENTERED this 7th day of November, 2007, in Tallahassee, Leon County, Florida. S CAROLYN S. HOLIFIELD Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 7th day of November, 2007.
The Issue What is the amount owed by D. L. Scotto and Company, Inc., d/b/a Tuxedo Fruit Company, to Thomas E. Davis, Inc., for Valencia oranges purchased in January, April, and May 2013?
Findings Of Fact A "dealer in agricultural products" is defined as a person, partnership, corporation, or other business entity, "engaged within this state in the business of purchasing, receiving, or soliciting agricultural products from the producer . . . for resale or processing for sale " § 604.15(2), Fla. Stat. (2013).1/ Respondent is licensed as a dealer in agricultural products. Petitioner is a "producer" for purposes of sections through 604.34, Florida Statutes. See § 604.15(9), Fla. Stat. (defining "producer" as "any producer of agricultural products produced in the state"). Contract #077 On January 25, 2013, Petitioner and Respondent entered into citrus fruit contract #077 wherein Respondent, for the price of $9.50 per box, agreed to purchase 5,000 boxes of Valencia oranges from Petitioner's Cock Pen grove. Petitioner delivered, and Respondent accepted, 2,925 boxes of the promised oranges. To date, Respondent has only paid Petitioner for 1,962 ($9.50 x 1,962 = $18,639) boxes of oranges from the Cock Pen grove. Contract #078 On January 25, 2013, Petitioner and Respondent entered into a second citrus fruit contract (#078) wherein Respondent, for the price of $9.50 per box, agreed to purchase 4,500 boxes of Valencia oranges from Petitioner's Patrick grove. Petitioner delivered, and Respondent accepted, 2,988 boxes of the promised oranges. To date, Respondent has only paid Petitioner for 792 ($9.50 x 792 = $7,524) boxes of oranges from the Patrick grove. Contract #M012 On April 25, 2013, Petitioner and Respondent entered into a third citrus fruit contract (#M012) wherein Respondent, for the price of $11.00 per box, agreed to purchase 1,200 boxes of Valencia oranges from Petitioner's Johnson grove and 1,500 boxes of Valencia oranges from Petitioner's Allegato grove. Petitioner delivered, and Respondent accepted, 1,161 boxes of the promised oranges from the Johnson grove and 1,296 boxes of oranges from the Allegato grove. To date, Respondent has not paid Petitioner for the oranges received from the Johnson and Allegato groves. Contract #M013 On May 2, 2013, Petitioner and Respondent entered into a fourth citrus fruit contract (#M013) wherein Respondent, for the price of $11.00 per box, agreed to purchase 1,500 boxes of Valencia oranges from Petitioner's Tommy Ann grove. Petitioner delivered, and Respondent accepted, 1,674 boxes of the promised oranges from the Tommy Ann grove. To date, Respondent has not paid Petitioner for the oranges received from the Tommy Ann grove. Respondent's defense Each of the citrus fruit contracts at issue provides that the oranges "must be merchantable for fresh usage at the time of harvest and delivery." Respondent claims that significant quantities of the oranges that were received from Petitioner were not merchantable for fresh usage at the time of harvest and delivery. In reviewing the documentary evidence presented by both parties, it is evident that Petitioner's oranges were harvested and delivered to Respondent during the months of January through May 2013. From this period forward to the date of the final hearing held herein, Respondent never informed Petitioner that there was an issue with the merchantability of the oranges. Instead, whenever Petitioner contacted Respondent about the status of payment for the oranges, Respondent repeatedly assured Petitioner that payment was forthcoming. Respondent's testimony regarding the alleged compromised merchantability of the oranges that he received from Petitioner is not credible.
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 finding that D. L. Scotto and Company, Inc., d/b/a Tuxedo Fruit Company, is indebted to Thomas E. Davis, Inc., in the amount of $75,501.50 (includes filing fee) for the balance due for the oranges it purchased from Petitioner on January 25, April 25, and May 2, 2013. DONE AND ENTERED this 17th day of April, 2014, in Tallahassee, Leon County, Florida. S LINZIE F. BOGAN 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 17th day of April, 2014.
The Issue The issue in this case is whether Respondent Clark's Country Farmers Market, Inc. owes Petitioner a sum of money for shipments of citrus fruit.
Findings Of Fact The evidence presented at final hearing established the facts that follow. The Parties and Their Problem Spyke's Grove and Clark's are "citrus fruit dealers" operating within the Department's regulatory jurisdiction. As a wholesale shipper, Spyke's Grove packages and arranges for delivery of citrus products pursuant to purchase orders that retail sellers such as Clark's submit. The packages typically are labeled with the retail seller's name, and thus the retail buyer (and the recipient, if the citrus is purchased as a gift) usually will not be aware of Spyke's Grove's involvement. The instant case involves a series of orders that Clark's placed with Spyke's Grove between October and December 1999 for packages of gift fruit. Under a number of informal, largely unwritten contracts, Spyke's Grove agreed, each time it received an order from Clark's, to ship a gift fruit box or basket to the donee designated by Clark's' retail customer, for which fruit shipment Clark's agreed to pay Spyke's Grove. Spyke's Grove alleges that Clark's failed to pay in full for all of the gift fruit packages that Clark's ordered and Spyke's Grove duly shipped. Clark's contends (though not precisely in these terms) that Spyke's Grove materially breached the contracts, thereby discharging Clark's from further performance thereunder. The Transactions From mid-October 1999 until around December 12, 1999, Clark's faxed or e-mailed to Spyke's Grove approximately 350 individual orders for gift fruit packages. Among other information, each order consisted of a shipping label that identified the product (e.g. the type of gift box or basket), the intended recipient, and the destination. Spyke's Grove manifested its intent to fill these orders by faxing statements of acknowledgment to Clark's, by telephoning Clark's, or both. Although the many contracts that arose from these transactions were thus documented, the writings left much unsaid. For example, the parties did not explicitly agree in writing that Spyke's Grove would deliver the subject gift baskets to the donees before Christmas, nor did they make any express oral agreements to this effect.1 Further, the parties did not specifically agree that Spyke's Grove would be obligated to deliver the gift fruit into the hands of the donees and bear the risk of loss until such tender of delivery. Rather, the contracts between Spyke's Grove and Clark's were ordinary shipment contracts that required Spyke's Grove to put the goods into the possession of carriers (such as the U.S. Postal Service or United Parcel Service) who in due course would deliver the packages to the donees. For many weeks, until early December 1999, Clark's placed orders, and Spyke's Grove filled them, under the arrangement just described. The relationship was not completely trouble-free, for the parties had some problems with duplicate orders. Most, if not all, of these difficulties stemmed from the implementation of a computerized ordering system which allowed Clark's to "export" orders directly to Spyke's Grove's electronic database. The parties recognized at the time that errors were occurring, and they attempted contemporaneously to identify and purge unintended duplicates. Pursuant to the course of dealing between these parties, Spyke's Grove filled orders that were not affirmatively identified as errors prior to the scheduled shipment date. The Fire On the night of Sunday, December 12, 1999, a devastating fire at Spyke's Grove's premises caused substantial damage, temporarily disrupting its citrus packing and shipping operations at the peak of the holiday season. Working through and around the loss, Spyke's Grove soon recovered sufficiently to reopen for business. By around noon on Tuesday, December 14, 1999, its telephone service had been restored, and activities relating to shipping resumed on Friday, December 17, 1999. The Aftermath Meantime, Clark's contends, customers had begun calling Clark's on December 10, 1999, to complain that gift fruit packages were not being received as promised. None of the customers testified at hearing, however, and therefore no competent, non-hearsay evidence establishes the contents of their alleged out-of-court statements. On December 14, 1999, following several unsuccessful attempts to communicate with Spyke's Grove shortly after the fire (about which Clark's remained unaware), Denise Clark, acting on behalf of Clark's, reached Robert Spiece, a representative of Spyke's Grove, on his cell phone. At hearing, Ms. Clark and Mr. Spiece gave conflicting accounts as to the substance of their December 14, 1999, telephone conversation. Neither disputed, however, that during this conversation Ms. Clark and Mr. Spiece agreed, at Ms. Clark's request, that all orders of Clark's not yet shipped by Spyke's Grove would be canceled, effective immediately, as a result of the fire. Although Ms. Clark claimed that Mr. Spiece further informed her that Spyke's Grove could not identify which orders had been shipped, the factfinder does not believe that Mr. Spiece made such a sweeping negative statement. Rather, as Mr. Spiece explained at hearing, Ms. Clark probably was told that information regarding the filled orders would not be available that day. Without waiting for further information from Spyke's Grove, Clark's began calling its retail customers to ascertain whether they had received packages that were supposed to have been shipped by Spyke's Grove. Employees of Clark's who had participated in this process——which took four to five days—— testified at hearing about conversations between themselves and various customers. As uncorroborated hearsay, however, the out- of-court statements attributed to these customers were not competent substantial evidence upon which a relevant finding of fact, e.g. that any particular customer or customers had not received their gift fruit, could be based. Moreover, this hearsay evidence, even if competent, would still have been too anecdotal to establish persuasively any widespread failure on the part of the carriers to deliver the packages shipped by Spyke's Grove. On December 15, 1999, Spyke's Grove prepared three draft invoices for the gift fruit packages that Clark's had ordered and which Spyke's Grove had shipped before December 12, 1999. Numbered 1999113001, 1999121101, and 1999121201, the invoices sought payment of $688.72, $2,415.48, and $298.66, respectively. On the first page of Invoice #1999121201, Barbara Spiece, the President of Spyke's Grove, wrote: Some of these were lost in the fire. "A" day left in the morning. "Springfield" was on the floor to go out that night. I realize there are many duplicates in these shipped reports. We tried to watch for them but with different order numbers it was very difficult. Just cross them out [and] you will not be charged for them. I apologize for all of the problems we have had this season [illegible] wish you luck. These bills were faxed to, and received by, Clark's on December 16, 1999. Clark's did not pay the invoices, or dispute them, or cross out the unintended duplicate orders (as it had been invited to do) to effect a reduction in the outstanding balance. Instead, Clark's ignored Spyke's Grove's requests for payment. Not only that, in disregard of its existing contractual obligations and with no advance notice to Spyke's Grove, Clark's proceeded on its own to fill all of the orders that it had placed with Spyke's Grove before December 12, 1999——including those orders that Spyke's Grove, through its draft invoices, claimed to have shipped. Even after the fact, Clark's failed to inform Spyke's Grove that it had, in effect, repudiated its contractual promises to pay Spyke's Grove for the gift fruit packages already shipped as of December 12, 1999 (i.e. the orders not canceled on December 14, 1999). The Inevitable Dispute Having heard nothing from Clark's in response to its December 16, 1999, fax, Spyke's Grove sent its invoices out again, in final form, on January 25, 2000.2 This time, Ms. Spiece did not inscribe any instructions to cross out duplicates for a discount. Numbered 11063001 ($688.72), 11063002 ($2,449.14), and 11063003 ($195.52), these bills totaled $3,333.38. Each of these invoices contained the following boilerplate "terms": Net 14 days prompt payment is expected and appreciated. A 1 ½% monthly service charge (A.P.R. 18% per annum) may be charged on all past due accounts. Customer agrees to pay all costs of collection, including attorneys [sic] fees and court costs, should collection efforts ever become necessary. Clark's did not remit payment or otherwise respond to Spyke's Grove's statements. Accordingly, on June 20, 2000, Spyke's Grove sent a letter to the Department requesting assistance. Clark's was provided a copy of this letter. Shortly thereafter, Spyke's Grove filed a Complaint with the Department, initiating the instant proceeding. Ultimate Factual Determinations Clark's refusal to pay for the goods ordered from and shipped by Spyke's Grove constituted a breach of the contracts between the parties. Spyke's Grove did not materially breach the agreements. Further, Clark's did not object, within a reasonable period of time, to the statements of account that Spyke's Grove rendered preliminarily on December 16, 1999, and finally on January 25, 2000. Accordingly, these invoices amount to an account stated concerning the transactions between the parties. Clark's failed to overcome the presumption of correctness that attaches to an account stated, either by proving fraud, mistake, or error. Spyke's Grove has suffered an injury as a result of Clark's' breach. Spyke's Grove's damages consist of the principal amount of the debt together with pre-award interest at the statutory rate. Accordingly, Spyke's Grove is entitled to recover the following amounts from Clark's: Principal Due Date Statutory Interest $3,333.38 2/08/99 $ 298.66 (2/08/00 - 12/31/00) $ 335.56 (1/01/01 - 11/30/01) $3,333.38 $ 634.22 Interest will continue to accrue on the outstanding balance of $3,333.38 in the amount of $1.00 per day from December 1, 2001, until the date of the final order.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department enter a final order awarding Spyke's Grove the sum of $3,333.38, together with pre- award interest in the amount of $634.22 (through November 30, 2001), plus additional interest from December 1, 2001, until the date of the final order, which will accrue in the amount of $1.00 per day. DONE AND ENTERED this 29th day of November, 2001, in Tallahassee, Leon County, Florida. JOHN G. VAN LANINGHAM Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 29th day of November, 2001.
The Issue Does Respondent, William. G. Roe & Sons, Inc. (Roe & Sons) owe Five Star Packing (Five Star) monies as alleged in the Complaint for citrus contracted for under various written contracts entered into by the parties? Case No. 01-2496A Does Respondent Five Star owe Roe & Sons monies as alleged in the Complaint for damages sustained by Roe & Sons as a result of the breach of alleged oral contracts between the parties by Five Star?
Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the hearing, the following relevant findings of fact are made: At all times pertinent to this proceeding, Five Star was a citrus fruit dealer as that term is defined in Subsection 601.03(8), Florida Statutes, and was licensed and bonded in accordance with Chapter 601, Florida Statutes. At all times pertinent to this proceeding, Roe & Sons was a citrus fruit dealer as that term is defined in Subsection 601.03(8), Florida Statutes, and was licensed and bonded in accordance with Chapter 601, Florida Statutes. At all times pertinent to this proceeding, both Five Star and Roe & Sons were subject to the provisions of Chapter 601, Florida Statutes. Five Star bought, sold, and delivered citrus fruit to various citrus processing facilities and packing houses in Central Florida during the 1999-2000 citrus fruit season. During the 1999-2000 citrus fruit season, Roe & Sons operated a packing house in Winter Haven, Florida, and regularly purchased citrus fruit for the fresh fruit market, and sold citrus fruit that it had purchased to other citrus fruit dealers such as Five Star. The Complaint in Case No. 01-2495A was filed with the Department by Five Star on September 12, 2000, and was timely filed in accordance with Subsection 601.66(1), Florida Statutes. On January 5, 2001, before the Department referred this matter to the Division, Five Star filed its First Amended Complaint with the Department. The Complaint in Case No. 01-2496A was filed with the Department by Roe & Sons on November 10, 2000, and was timely filed in accordance with Subsection 601.66(1), Florida Statutes. On December 6, 1999, Roe & Sons and Five Star entered into a Participation Marketing Agreement, Contract No. B233Q, for tangerines wherein Roe & Sons was to purchase Sunburst Tangerines from Five Star. Roe & Sons purchased 2,124 boxes of Sunburst Tangerines from Five Star for which Roe & Sons paid Five Star $23,534.84. There is no disagreement as to these tangerines. However, Five Star contends that the tangerines supported by Trip Ticket Nos. 225488, 225489, 225490, 225491, and 225492 were delivered to Roe & Sons but that Five Star did not receive payment. Roe & Sons has no Trip Ticket receipts or any other record indicating that these tangerines were delivered to Roe & Sons. However, Larry Thompson of Five Star testified that Trip Ticket Nos. 225488, 225489, and 225490 were filled out by the harvester and that he was present when the tangerines represented by those Trip Tickets were delivered to Roe & Sons. Thompson also testified that he filled out Trip Ticket Nos. 225491 and 225492 and was present when the tangerines represented by those Trip Tickets were delivered to Roe & Sons. The Trip Tickets indicate that the tangerines were being delivered to Roe & Sons under Contract No. B233Q. Copies of the Trip Tickets along with the testimony of Larry Thompson, which is credible, is sufficient to show that the tangerines represented by Trip Tickets Nos. 225488, 225489, 225490, 225491, and 225492 were delivered to Roe & Sons, notwithstanding that Roe & Sons has no records of these tangerines being delivered to Roe & Sons by Five Star. Therefore, Roe & Sons owes Five Star $8,645.67 for the tangerines represented by Trip Ticket Nos. 225488, 225489, 225490, 225491, and 225492. However, Five Star stipulated that it owed Roe & Sons $2,667.60 for 684 boxes of tangerines delivered to Five Star by Roe & Sons on January 13, 2000. The adjusted amount owed Five Star by Roe & Sons for tangerines is $5,978.07. On February 11, 2000, Roe & Sons and Five Star entered into a Fresh Cash Purchase Agreement, Contract No. B333S, wherein Roe & Sons agreed to purchase an estimated 25,000 boxes of Marsh white grapefruit from Five Star for an agreed price of $1.35 Per Pound Solids (PPS) Gross. Contract No. B333S contained the following Special Clauses: "FRUIT MUST BE A MINIMUM 10.00 BRIX AND 9.00 RATIO. PRICE FOR FRUIT NOT MEETING THIS MINIMUM SCORE WILL BE NEGOTIATED AS THE LOADS ARE RECEIVED." The "Movement Date" under Contract No. B333S was to be "SEASONAL," which the parties stipulated meant that there was no specified date for delivery, only that the grapefruit was to be delivered during the 1999/2000 season. Contract No. B333S also contained the following clause: "Fruit not meeting contract ratio or brix requirements but otherwise suitable to BUYER will be discounted by .10 per unit measure P/S or returned to SELLER at BUYER's sole discretion." On March 31, 2000, Roe & Sons entered into a second Agreement, Contract No. B376B, wherein Roe & Sons agreed to purchase an estimated 7,000 boxes of Marsh white grapefruit from Five Star for an agreed price of $1.50 PPS Gross. Contract No. B376B contained the following special clause: "Must be 10 Brix and 9 Ratio minimum or $0.15 PPS Penalty." Although Contract No. B376B contained no Movement Date, the parties agreed that the grapefruit was to be delivered during the 1999/2000 season. Morgan Roe testified that when Roe & Sons entered into multiple contracts with the same party to furnish citrus fruit during same season, Roe & Sons had an unwritten internal policy, which required the other party to the multiple contracts with Roe & Sons to fulfill the requirements of the first contract before Roe & Sons would accept citrus fruit under any subsequent contract. Roe & Sons did not make Five Star aware of this unwritten internal policy at the time that either the first or second contract was executed by Five Star. Likewise, neither the first nor the second contract contained any language which would require Five Star to fulfill the first contract before Roe & Sons would be required to accept grapefruit under the second contract. Between March 28, 2000 and May 9, 2000, Five Star delivered 7,649 boxes of white grapefruit to Roe & Sons. Five Star contends that Roe & Sons owes Five Star $43,614.77 after adjustments for unloading charges and research and advertising taxes for the grapefruit delivered. Roe & Sons contends that it owes Five Star $40,106.96 after adjustments for unloading charges and research and advertising taxes for the grapefruit Five Star delivered. Five Star contends that the majority of the grapefruit was delivered under Contract No. B376B and that Five Star should have been paid $1.50 PPS for the grapefruit delivered under Contract No. B376B. However, only Trip Ticket Nos. 48433, 48434, 77569, 77570, 77571, 77572, and 77573 were specifically marked as being delivered under Contract No. B376B, which Five Star contends it should have been paid $1.50 per pound solids since this grapefruit met all the specifications of the contract. However, Roe & Sons contends that since Five Star's commitment under Contract No. B333S had not been totally fulfilled, Roe & Sons was only required to pay Five Star $1.35 per pound solids for all of the grapefruit delivered between March 28, 2000 and May 9, 2000, notwithstanding that some of the Trip Tickets indicated that the grapefruit was being delivered under Contract B376B. Roe & Sons' contention was based on its internal policy that the first contract, Contract No. B333S, had to be fulfilled before Roe & Sons was required to honor the second contract, Contract No. B376B. There is insufficient evidence to support Roe & Sons' contention that its internal policy is an industry standard, notwithstanding the testimony of W. A. Alford to the contrary, which lacks credibility. Roe & Sons has failed to show that Five Star was required to fulfill Contract No. B333S before Roe & Sons was required to accept fruit under Contract No. B376B. Roe & Sons should have allowed Five Star $1.50 PPS for the grapefruit delivered under Contract No. B376B. Five Star conceded that none of the other Trip Tickets indicated that the grapefruit was being delivered under Contract No. B376B. Therefore, Roe & Sons' Net Return amount should be adjusted upwards to account for the difference ($0.15) in the price PPS for the above listed Trip Tickets. After adjustment (13,497.78 PS x $0.15 PPS = $2,024.67), Roe & Sons owes Five Star the sum of $42,131.63 ($40,106.96 + $2,024.67) for the grapefruit delivered under Contract Nos. B333S and B376B. Other than the adjustment for the difference in PPS, Roe & Sons Net Return amount is correct. Five Star's Net Return amount incorrectly takes credit for grapefruit at $1.50 PPS that was not delivered under Contract B376B and fails to take credit for grapefruit delivered to Roe & Sons on May 9, 2000, under Trip Ticket Nos. 4134 and 212720. Five Star contends that Roe & Sons' cull adjustment was excessive and that Roe & Sons owed Five Star $1,688.52 for excessive cull adjustment. Five Star's contracts with Roe & Sons provides that Roe & Sons has the right to reject unsuitable fruit. Although Five Star presented testimony as to what might constitute "excessive cull adjustment," it failed to present sufficient evidence to show that the "culled fruit" was suitable and that Roe & Sons' "cull adjustment" was excessive. Therefore, Five Star is not entitled to any adjustment for cull adjustment. Roe & Sons contends that sometime around April 11, 2000, Larry Thompson for Five Star and William Roe for Roe & Sons entered into an oral contract wherein Five Star was to purchase 30,000 boxes of field run ruby red grapefruit with a 9.00 ratio at a price of $1.20 PPS. Roe & Sons reduced these terms to writing and designated it as Contract S2057. Roe & Sons also contends that sometime around April 14, 2000, Larry Thompson for Five Star and William Roe for Roe & Sons entered into an oral contract wherein Five Star was to purchase 15,000 boxes of elimination red grapefruit at a price of $1.10 PPS. Roe & Sons reduced these terms to writing and designated it as Contract S2060. Larry Thompson testified that he refused to agree to, or to sign, either of these alleged contracts on the basis that he did not agree to handle any specific quantity (number of boxes) of red grapefruit for Roe & Sons. Larry Thompson testified that he agreed to handle some (no specific quantity) of red grapefruit for Roe & Sons at the price and specifications stated. Based on Larry Thompson's testimony, which is credible, there was never any valid contract, oral or otherwise, wherein Five Star agreed to purchase a specific quantity (boxes) of red grapefruit from Roe & Sons, notwithstanding William Roe's testimony to the contrary, which lacks credibility in this regard, or the fact that Five Star did purchase a number of boxes of red grapefruit from Roe & Sons, for which Five Star agrees that it owes Roe & Sons. Between April 12, 2000 and April 20, 2000, Five Star purchased some 2,760 boxes of red grapefruit at a price of $1.10 PPS, represented by ticket nos. 71146, 71149, 64019, 64024, and 64585. The total PPS of the boxes was 13,094.44 for a gross price of $14,403.88 (13,094.44 PS x $1.10 PPS = $14,403.88). After adjusting the gross price for hauling and unloading charges and advertising tax, the total amount owed Roe & Sons by Five Star was $10,972.86. Between April 12, 2000 and April 20, 2000, Five Star purchased some 4,355 boxes of red grapefruit at a price of $1.20 PPS, represented by ticket nos. 214720, 214721, 71147, 71148, 71150, 214722, 214723, 214724, and 214725. The total PPS of the boxes was 21,387.92 for a gross price of $25,665.50 (21,387.92 PS x $1.20 PPS = $25,665.50). After adjusting the gross price for hauling and unloading charges and research and advertising tax, the total amount owed Roe & Sons by Five Star was $21,621.11. Five Star alleged that it owed Roe & Sons the sum of $32,593.97. However, Five Star stipulated that Roe & Sons should be given credit for $4,336.37 in hauling charges paid by Roe & Sons, which brings the total owed to Roe & Sons for red grapefruit by Five Star to $36,930.34. Subsequent to the purchase of the above red grapefruit by Five Star from Roe & Sons, Five Star advised Roe & Sons that Five Star would not be purchasing any more red grapefruit from Roe & Sons. As a result of this decision by Five Star, Roe & Sons advised Five Star that Five Star could continue to deliver white grapefruit under Contract Nos. B333S and B376B, but that any monies due Five Star for grapefruit delivered on theses contracts would be applied against any damages suffered by Roe & Sons for Five Star's failure to honor the alleged oral contracts to purchase red grapefruit from Roe & Sons. As a result of Roe & Sons' position concerning the alleged oral contracts, Five Star made no further deliveries of white grapefruit to Roe & Sons under Contract Nos. B333S and B376B. Instead, Five Star sold the white grapefruit that was to be delivered to Roe & Sons under Contract Nos. B333S and B376B to Silver Springs Citrus at a much reduced rate PPS due to the decline in the grapefruit market in what Five Star described as an attempt to mitigate damages under Contract Nos. B333S and B376B. Five Star alleged that Roe & Sons owed Five Star $4,822.31 for 840 boxes of temple oranges purchased by Roe & Sons. However, Five Star stipulated that Roe & Sons was entitled to a credit of $355.58 due to an accounting error by Five Star. The adjusted amount owed to Five Star for temple oranges by Roe & Sons is $4,466,73. Roe & Sons alleged in its First Affirmative Defense to Five Star's Complaint that the parties had reached a settlement of their respective claims. However, based on the testimony of Larry Thompson denying that a settlement had been reached, which is credible in this regard, and the fact that the check for the amount of the alleged settlement was never received or negotiated by Five Star, supports Five Star's position that the parties had not reached a settlement. In its Second Affirmative Defense, Roe & Sons alleged that Five Star breached Contract No. B333S by failing to deliver white grapefruit in accordance with the specifications set forth in the contract. Roe & Sons failed to present sufficient evidence to support this affirmative defense. Roe & Sons' Third Affirmative Defense, Setoff, and Counterclaim to Five Star's Complaint is based on Five Star's breach of the alleged oral red grapefruit contracts. Roe & Sons failed to present sufficient evidence to show that the alleged oral red grapefruit contracts were in fact valid contracts. Roe & Sons alleges in its Complaint filed in Case No. 01-2496A that Five Star breached the alleged oral contracts for red grapefruit. Roe & Sons failed to present sufficient evidence to show that the alleged oral red grapefruit contracts were in fact valid contracts.
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 requiring Roe & Sons to pay Five Star the sum of $15,646.09 and denying Five Star any damages in regard to Contract Nos. B333S and B376B. It is further recommended that Roe & Sons be denied any relief in regards to the alleged red grapefruit contracts. DONE AND ENTERED this 5th day of March, 2002, in Tallahassee, Leon County, Florida. WILLIAM R. CAVE Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6947 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 5th day of March, 2002. COPIES FURNISHED: Hank B. Campbell, Esquire Gray, Harris, Robinson, Lane, Trohn Post Office Box 3 Lakeland, Florida 33802 United States Fidelity & Guaranty Company 4311 West Waters Avenue, Suite 401 Tampa, Florida 33614 Brenda D. Hyatt, Bureau Chief Bureau of License and Bond Department of Agriculture and Consumer Services 541 East Tennessee Street India Building Tallahassee, Florida 32308 Richard D. Tritschler, General Counsel Department of Agriculture and Consumer Services The Capitol, Plaza Level 10 Tallahassee, Florida 32399-0810 Douglas A. Lockwood, III, Esquire Peterson & Myers, P.A. 141 5th Street, Northwest Post Office Drawer 7608 Winter Haven, Florida 33883 H. Christopher Thompkins, II, Esquire 1706 South Kings Avenue Brandon, Florida 33509-6216 Jack P. James, Esquire Post Office Box 3 Lakeland, Florida 33802 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 issues in this case are whether, and to what extent, the Respondent, a licensed citrus fruit dealer, is liable to the Petitioner for damages resulting from the purchase, handling, sale, and accounting of purchases and sales occurring during the 1992-1993 growing season, and further whether the Co- Respondent, Surety Company, is therefore liable on the citrus fruit dealer's bond issued to the Respondent.
Findings Of Fact Petitioner, Newbern Groves Inc., is a Florida corporation engaged in the business of producing, buying, and selling citrus fruit. Petitioner's business address is in Tampa, Florida. Newbern Groves, Inc. was founded in 1947 by Copeland Newbern, who at all relevant times in this case served as Chairman of the Board of Directors. The President of Newbern Groves, Inc., is John Shepard. The Secretary- Treasurer of Newbern Groves, Inc., is Peter Skemp. At all relevant times, Respondent, Inter-Floridana, Inc., (full name, Inter-Floridana Imports and Exports, Inc.) was a citrus fruit dealer, licensed by the State of Florida during the 1992-1993 growing season. Respondent's business address was Brooksville, Florida, where Respondent operated a processing plant. The 1992-1993 growing season was the first year Respondent operated this processing plant. Respondent also maintained offices and warehouses in Orange County, Florida. In addition to its citrus fruit business, Respondent corporation also engaged in other business enterprises including blending other fruit drinks, processing tomato juice concentrate, and the sale of imported beer. At all relevant times, Jacques Bobbe was President and Chief Executive Officer of Inter-Floridana, Inc. At all relevant times, Larry Cail was the manager of the Respondent's processing plant in Brooksville, Florida. Beginning in May of 1992, Jacques Bobbe, on behalf of Inter-Floridana, and Peter Skemp and Copeland Newbern, on behalf of Newbern Groves, entered into discussions relating to Newbern's supplying Inter-Floridana with citrus fruit for the Inter-Floridana plant in Brooksville, Florida. Prior to this time the parties had not met, and there was no established course of business dealings between the parties. Specific meetings between the parties took place on July 30, 1992 in Brooksville; September 2, 1992 in Tampa; September 17, 1992 in Tampa; September 29, 1992 in Orlando; and November 25, 1992 in Tampa. The discussions conducted by the parties generally related to Newbern supplying Inter-Floridana with 1,500,000 boxes of citrus fruit which would accommodate the capacity of Inter-Floridana's Brooksville plant. The parties also generally discussed prices of various citrus fruit. There is no written documentation of the parties' negotiations. It is common practice in the citrus fruit industry to purchase and sell citrus fruit without written contracts. On November 3, 1992, Newbern delivered its first shipment of citrus fruit to Inter-Floridana's Brooksville plant. The shipment was delivered pursuant to Inter-Floridana's request to conduct a test-run of the processing plant's production capability. In December of 1992, Larry Cail of Inter- Floridana specifically requested grapefruit be delivered from Newbern. At that time Newbern was selling grapefruit to Chapman Fruit Company at $1.15 a pound. Thereafter Newbern continued to deliver citrus fruit shipments to Inter- Floridana's Brooksville plant on a regular basis until April 14, 1993. Inter- Floridana accepted the deliveries of citrus fruit from Newbern. The total pounds solids of Newbern fruit delivered to Inter-Floridana was 1,375,359.98, consisting of: 1,261,323.38 pound solids of orange juice 8,087.87 pound solids of mandarin 63,426.55 pound solids of white grapefruit juice 42,522.18 pound solids of red grapefruit juice. Beginning in December of 1992 Newbern representatives Peter Skemp and Copeland Newbern demanded payment for the fruit delivered to the Inter-Floridana plant in Brooksville. The customary practice in the citrus fruit business is payment is due one week after delivery. In this case, however, Newbern had agreed to a two-week after delivery payment. The price of the citrus fruit was to be calculated on the cost to Newbern of obtaining the fruit from the growers plus .05 for Newbern's expenses in making the deliveries to Inter-Floridana. On February 26, 1993, Inter-Floridana made its first payment to Newbern in the amount of $80,000. Thereafter Inter-Floridana made three more payments of $40,000, $40,000, and $30,000. The final payment from Inter-Floridana was made on April 1, 1993. After the April 1, 1993 payment, representatives of Newbern continued to demand payment from Inter-Floridana. No further payments were received, and Newbern ceased delivery of citrus fruit to Inter-Floridana on April 14, 1993. On May 12, 1993 the parties met in Brooksville, Florida. At this meeting Jacques Bobbe informed Peter Skemp and Copeland Newbern that Inter- Floridana's position was that Inter-Floridana was not purchasing citrus fruit from Newbern, but processing the citrus fruit for Newbern, and accordingly, Newbern owed Inter-Floridana approximately $400,000 for the costs of production, which was documented in a letter from Inter-Floridana to Newbern on May 14, 1993. At hearing on May 10, 1994, Jacques Bobbe testified that Inter-Floridana retracted its previous position, and did purchase citrus fruit from Newbern during the 1992-1993 growing season. On May 24, 1993, Copeland Newbern sent a letter to Jacques Bobbe demanding payment of $789,374.01 based on the Florida Citrus Mutual citrus statistics for the citrus fruit at that time, plus .05 for Newbern's services. On June 1, 1993, Jacques Bobbe sent a letter to Copeland Newbern requesting additional information regarding the calculation of the payment demanded from Newbern. On June 23, 1993, Copeland Newbern sent a certified letter to Jacques Bobbe detailing the problems associated with this transaction, and requesting assistance in resolving the matter in a timely manner. On June 25, 1993, Newbern filed the formal complaint against Inter- Floridana with the Department of Agriculture and Consumer Services which is the basis for this proceeding. Representatives of the parties met again on July 8, 1993; and on July 9, 1993, Jacques Bobbe sent a letter to John Shepard offering to resolve this matter as follows: Inter-Floridana would sell the frozen concentrated orange juice at $1.29 per pound solid; Newbern would receive $.83 per pound solid; Inter-Floridana would receive $.29 for packing and $.17 profit per pound solid. If the product sold for more than $1.29 per pound solid, the parties would divide the excess profit equally. On July 16, 1993, John Shepard, as President of Newbern Groves Inc., wrote to Jacques Bobbe and accepted this agreement. On July 19, 1993, Inter-Floridana filed its answer to the formal complaint filed by Newbern. The answer was verified by Jacques Bobbe. The answer denied that Inter-Floridana purchased citrus fruit from Newbern, and further claimed Newbern owed Inter-Floridana $442,133.21 for various services in connection with the processing and storage of the Newbern fruit. As set forth above, this position was subsequently retracted, and Inter-Floridana acknowledged the purchase of citrus fruit from Newbern. On August 5, 1993, Jacques Bobbe, on behalf of Inter-Floridana, filed a verified statement with the Department of Citrus attesting that Inter-Floridana did not purchase any fruit during the 1992-1993 growing season. The verified statement further attested that Inter-Floridana processed fruit for Newbern, and that Inter-Floridana had accounts payable of $978,580, and accounts receivable of $489,378.83. The accounts payable represented funds owed by Inter-Floridana to Newbern, and the accounts receivable consisted of the various production charges from Newbern as claimed by Inter-Floridana. On August 26, 1993, Newbern received an accounting from Inter-Floridana showing 500,651.26 pound solids of orange juice, 2,512.02 pound solids of mandarin, 39,809 pound solids of white grapefruit, and 11,602.50 pound solids of red grapefruit. This balance was substantially less than the amount delivered to Inter-Floridana. Unbeknown to Newbern, in February of 1993, Inter-Floridana had sold a substantial portion of the Newbern product to Windsor-Premium (Premium), a European business concern that Jacques Bobbe had been negotiating with since February of 1992. On February 26, 1993 Premium paid Inter-Floridana $807,825.29 for the product. This sale was the first part of a proposed ongoing transaction between Premium and Inter-Floridana to market citrus products in Europe. The proposed transaction would have been approximately $2 million; however, Premium did not complete the transaction with Inter-Floridana, and Premium eventually filed for bankruptcy in the United States District Court for the Southern District of Florida. The four payments totalling $190,000 that Inter-Floridana made to Newbern were derived from the proceeds of the sale to Premium. On October 1, 1993 Inter-Floridana sent a letter to John Shepard informing Newbern that of 1,375,359.57 pound solids, 848,558.76 had been sold. Thereafter in October of 1993, Inter-Floridana returned to Newbern 501,130.73 pound solids of orange, 18,018.92 pound solids of white grapefruit, and 11,614.39 pound solids of pink grapefruit. Newbern resold the returned orange citrus product to Indian River Fruits by means of a citrus broker, Merrill Lynch, which received a brokerage fee of $5,011.30. Some of the grapefruit citrus product had gelled and could not be resold.
Recommendation Based on the foregoing, it is, hereby, RECOMMENDED: That the Department of Agriculture and Consumer Services enter a final order adjudicating that the amount of indebtedness owed to the Petitioner from Respondent is $543,126.53, that the Respondent shall have thirty (30) days in which to satisfy such indebtedness, and upon failure of the Respondent to satisfy such indebtedness, the citrus fruit dealer's bond in the amount of $24,000 shall be distributed to Petitioner. DONE AND RECOMMENDED this 13th day of February, 1995, in Tallahassee, Leon County, Florida. 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 13th day of February, 1995. APPENDIX TO RECOMMENDED ORDER, CASE NO. 94-6775 Petitioner's proposed findings of fact. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted in part. Respondent acknowledged discussion of prices for the citrus fruit. Accepted in part. Respondent acknowledged an indebtedness of $978,580. Accepted. Accepted. Rejected as not supported by the evidence. Respondent's proposed findings of fact. Accepted. Accepted. Accepted. Rejected as not supported by the evidence. Rejected as not supported by the evidence. Rejected as not supported by the evidence. Accepted. Rejected in part. Rejected as to the frozen concentrated orange juice, accepted as to grapefruit. Rejected as irrelevant. Rejected as not supported by the evidence. Rejected as not supported by the evidence. Rejected as not supported by the evidence. Rejected as not supported by the evidence. COPIES FURNISHED: Timothy G. Hayes, Esquire 21859 State Road 54, Suite 200 Lutz, Florida 33549 Eric S. Mashburn, Esquire Post Office Box 771277 Winter Garden, Florida 34777-1277 The Honorable Bob Crawford Department of Agriculture and Consumer Services The Capitol, PL-10 Tallahassee, Florida 32399-0810 Richard Tritschler, General Counsel Department of Agriculture and Consumer Services The Capitol, PL-10 Tallahassee, Florida 32399-0810 Brenda Hyatt, Chief Bureau of Licensing & Bond Department of Agriculture 508 Mayo Building Tallahassee, Florida 32399-0800
The Issue The issues concern the complaint by Petitioner against Respondents for the alleged failure to pay for $125.00 worth of medium zucchini squash also referred to as medium green squash. See Sections 604.15 through 604.30, Florida Statutes.
Findings Of Fact Petitioner sells produce. East Coast purchases produce and resells that produce at wholesale. The transaction which is in dispute here concerns an April 25, 1990 sale of medium zucchini squash. On that date Jerry B. Portnoy, Vice President for East Coast who runs the day to day operations of the company and buys produce spoke with Petitioner. In that conversation, which took place early in the morning, Petitioner stated that he had the squash to sell. Portnoy told Petitioner that he had plenty of that form of produce on hand. Petitioner stated that this was the last picking and that he would give Portnoy a good price. The price that Petitioner mentioned was $2.50 a crate. Mr. Portnoy said that he could use about 100 crates and he reiterated that he had plenty of that type of produce on hand. That comment by Mr. Portnoy met with the remark by Petitioner which was to the effect, that there might be a few additional crates above the 100 discussed. Portnoy said that he did not need any more than 100 crates in that he had plenty of that produce on hand. As Portnoy described at hearing, he felt that he really did not even need 100 crates; however, based upon the past working relationship between the Petitioner and Portnoy he agreed to take 100 crates. Contrary to the agreement between Portnoy and the Petitioner, sometime on the evening of April 25, 1990, Petitioner delivered 236 crates of the squash. No one was at East Coast at its Jacksonville, Florida business location to receive the squash and inspect them. East Coast would not have accepted 236 crates that were delivered if it had known of that number of crates. No one was available to inspect the squash until the following morning. On April 26, 1990, Mr. Portnoy examined the squash and found that some of the product was inferior and was in a state of decay. As a consequence, Mr. Portnoy called the Petitioner on the telephone on that morning and told the Petitioner that the Petitioner had sent too many crates and some of the squash were bad. Nonetheless, Mr. Portnoy told Petitioner that he would work it out as best he could, meaning that he would sell as much of the product as possible. During contact with the Petitioner on the part of East Coast, Petitioner did not ask for a federal inspection. East Coast was able to sell all but 50 crates of the squash as delivered. It submitted payment in the amount of $465 as reflected on the face of the invoice which Petitioner sent to East Coast. That exhibit is Respondent's Exhibit No. 1, admitted into evidence. It reflects that 50 crates were dumped which had they been sold would have been worth $125.00. It is that $125.00 which is in dispute. Mr. Portnoy called the Petitioner after the squash had been sold. That call took place a couple of weeks later. In the course of this conversation the Petitioner said that he did not want to hear about problems anymore and that he wanted to be paid for the full amount of all crates delivered. Mr. Portnoy said that 50 crates had been lost and that the amount being remitted through a check would relate only to those crates that had been sold. This describes the amount remitted on June 15, 1990 set out in Respondent's Exhibit No. 1. Petitioner replied that he did not know if he would cash the check or not. Mr. Portnoy said that the check in the amount of $465.00 was for payment in full. This concluded their business until the time of the complaint filed by the Petitioner. On that facts as reported, there was no agreement to sell more than 100 crates. The additional crates that were sold by East Coast was a gratuitous gesture on the part of East Coast for which Petitioner was paid the full amount. The 50 crates that were not paid for contained inferior products for which Petitioner was not entitled to payment. This speaks to the 50 crates that were dumped which had they been sold would have been worth $125.00.
Recommendation Based upon the consideration of the facts found and the conclusions of law, it is recommended that a Final Order be entered which dismisses the complaint of the Petitioner and relieves the Respondents of any financial obligation to pay the contested $125.00 claim. RECOMMENDED this 8th day of April, 1991, in Tallahassee, Florida. CHARLES C. ADAMS, Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 8th day of April, 1991. COPIES FURNISHED: David Browning c/o David Browning Wholesale Produce 234 Church Street Starke, FL 32091 East Coast Fruit Company Jerry Portnoy, Vice President Post Office Box 2547 Jacksonville, FL 32203 James W. Sears, Esquire 511 North Ferncreek Avenue Orlando, FL 32803 Clinton H. Coulter, Jr., Esquire Department of Agriculture and Consumer Services Mayo Building Tallahassee, FL 32399-0800 Bob Crawford, Commissioner Department of Agriculture and Consumer Services The Capitol, PL-10 Tallahassee, FL 32399-0810
The Issue Whether Respondent, Donnie Selph, d/b/a The Citrus Store and D & D Citrus (Donnie Selph), failed to pay amounts owning to Petitioner for citrus fruit harvested from Petitioner's groves, as set forth in the Complaint dated October 13, 2003, and, if so, the amount Petitioner is entitled to recover.
Findings Of Fact Based upon observation of the witnesses and their demeanor while testifying; stipulations by the parties; documentary materials received in evidence; evidentiary rulings made pursuant to Sections 120.569 and 120.57, Florida Statutes (2003); and the entire record of this proceeding, the following relevant and material findings of fact are determined: At all times material to this proceeding Russ Putnal was a "producer of citrus fruit" and owner of Putnal Groves located at 10755 Russ Road, Myakka City, Florida. A producer of citrus is one that grows citrus in this state for market. At all times material to this proceeding, Donnie Selph was a "Florida-licensed [License Number 756] citrus fruit dealer" operating within the Department's regulatory jurisdiction. Donnie Selph admitted that he is owner of and does business under the names of The Citrus Store and D & D Citrus. On October 13, 2002, Donnie Selph entered into a written contract with Russ Putnal under which Donnie Selph agreed to harvest 10,000 boxes of mid-season oranges on or before June 1, 2003. Donnie Selph agreed to pay $4.35 per box for the mid-season oranges and agreed to pay $6.35 per box for the late-season (grove production) Valencia oranges harvested from Russ Putnal's groves. The form contract, dated January 29, 2003, entered into by Donnie Selph and Russ Putnal contained the following terms and conditions: [T]he Grower, for and in consideration of the payment this date received and to be received as herein provided, has agreed and do by these presents agree to sell to the Buyer all citrus fruits, of merchantable quality at the time of picking, from the grove or groves hereinafter mentioned. The price to be paid to the Grower by the Buyer for said fruit per standard field crate by volume or weight ["weight" was circled] at election of buyer on the trees, for all fruit of merchantable quality at the time of picking, shall be as follows: Oranges, mids, 10,000 boxes (or production), $4.35 [per] box Valencia Oranges, 40,000 boxes (or production), $6.35 [per] box The term "merchantable" as used herein shall be defined as that standard of quality required by the United States Department of Agriculture for interstate shipment in fresh/juiced ["juiced" was circled] fruit form. . . . * * * It is agreed that the advance payment hereby receipted for is to be deducted from said payment as follows: As fruit is harvested, $12,000.00, ck# 6318 * * * Note: Less all state taxes owned by Grower. Mutual YES[?] NO[ ] A bond or certificate of deposit posted with the Florida Department of Agriculture and Consumer Services does not necessarily ensure full payment of claims for any nonperformance under this contract. . . . (emphasis added) The undisputed evidence established that Donnie Selph harvested mid-season oranges from Russ Putnal's groves and paid Russ Putnal for those mid-season oranges harvested per the terms of the written contract. According to Russ Putnal, the contract was for mid-season oranges "which are basically a pineapple variety." "Mid-season juice oranges and Valencia oranges are late--late-season oranges. The mids were all paid for--the balance is on the Valencia oranges." The undisputed evidence also established that in the contract hereinabove Donnie Selph also agreed to harvest 40,000 boxes (or production) of late-season Valencia oranges and agreed to pay $6.35 per box for the Valencia oranges harvested from Russ Putnal's groves. The undisputed evidence likewise established that Donnie Selph harvested 11,251 boxes of Valencia oranges pursuant to terms of the written contract with Russ Putnal. During the harvesting of the Valencia oranges, Donnie Selph raised no objection or complaints with Russ Putnal regarding the quality or quantity of late-season Valencia oranges that were harvested. The parties recalled discussing one load that was "light," meaning the average weight per box was less than the average weight per box of the other loads of Valencia oranges picked from the same grove. According to the evidence presented, it is not uncommon in the citrus business to have a few "light" loads when picking 11,251 boxes of fruit. Donnie Selph is obligated to pay Russ Putnal for the 11,251 boxes of Valencia oranges harvested from Russ Putnal's groves and sold for processing. The net payment due and owning Russ Putnal Groves is computed as follows: Total Purchase Price [Valencia oranges]: $71,443.85 Less Harvesting, Mutual, Taxes, etc.: $2,373.57 Less Amount Received [on September 30, 2003]: $5,000.00[2] Net Amount or Claim [Balance Due]: $64,070.28 Donnie Selph did not pay Russ Putnal for the 11,251 boxes of Valencia oranges harvested from Russ Putnal's groves. Russ Putnal made repeated demands upon Donnie Selph for the past due amount of $64,070.28, and Donnie Selph refused and failed to pay Russ Putnal the past due amount of $64,070.28. This debt of $64,070.28 was due and owing on October 1, 2003, the date Donnie Selph made his last payment of $5,000 to Russ Putnal. Regarding this contractual transaction, Russ Putnal testified: I regret that we all have to be here for this, and I've put it off as long as I could and tried every way I knew to avoid coming to this, but basically -- or in simple terms Donnie Selph, Donnie Selph Fruit Company and I had a contract, a written contract for mid-season and late-season oranges for last year (2002/2003). Basically, it hadn't been paid and it's my understanding the bond is for situations of this nature. And I realize the bond is less than half of what's owed, but I think if Donnie had the money he'd pay me. We're all in -- the citrus industry is in some serious throws so I'm just trying to get what I can to try and keep my bills paid. Donnie Selph admitted entering into a written contract with Russ Putnal. Both men acknowledged their experience in the business of selling and buying citrus fruit and doing business with each other over the years. Russ Putnal is a seasoned producer of fruit and well versed in the business of selling his fruit to citrus dealers. Donnie Selph is a seasoned purchaser and dealer of citrus fruit, having been in the business for over 20 years, and well versed in the business of buying fruit from citrus fruit producers and selling fruit to plants and other outlets. Donnie Selph set the stage of this transaction by first testifying that he is in the business of "buying and selling [fruit], by contract, to the concentration plants." Regarding the sale of Russ Putnal's Valencia oranges, he testified that "based on $1.10 a pound what I got out of [the sale of] Putnal's fruit and taking out the costs I forwarded [to Russ Putnal] what was left up to the point of where we're at now [i.e. $64,070.28]." Donnie Selph's refusal to pay Russ Putnal for the Valencia oranges, "because I received only $1.10 per pound," does not relieve him of his contractual obligations to pay $6.35 per box for the Valencia oranges harvested. At the conclusion of the hearing and in lieu of submitting a proposed recommended order, Russ Putnal elected to make the following summation of his case that has been considered: We have a simple contract and a simple problem where fruit was contracted for, harvested, marketed and not paid for by the specifics of the contract. We have a bond in place to cover these discrepancies. The bond is only $30,000; the amount owed is some $64,000 plus. The defense has pretty much put up a smokescreen off the subject of the contract. The focusing in on pound solids and there's nothing in the contract about pound solids. The contract is simply in weight boxes. Donnie Selph's first defense, to the debt claimed in the Complaint, was oral modification of the written contract. Donnie Selph's evidence to support his oral modification defense consisted solely of his recollection, "Mr. Putnal agreed with me that the contract price to be paid would be based on pound solid [unknown at the time of entering the contract]." Donnie Selph testified that he and Russ Putnal discussed, and agreed, that the encircled word "juiced" on the written contract meant that he would pay Russ Putnal at the price Donnie Selph received when he sold the Valencia oranges "as juiced." Russ Putnal emphatically denied making the alleged oral modification of the written contract of $6.35 per box for his Valencia oranges. Russ Putnal insisted that throughout this entire episode with Donnie Selph the written contract called for "weight boxes." In his post-hearing Memorandum of Law, Donnie Selph admitted entering into a written contract with Russ Putnal, but raised as a defense to payment of the debt Russ Putnal "is going against the bond of The Citrus Store." Donnie Selph argued that Russ Putnal offered no evidence of entering into a written contract with The Citrus Store or personally with Donnie Selph. Donnie Selph's argument is without a foundation in fact and law in this proceeding and is, therefore, rejected. Donnie Selph's second defense, a claim of "detrimental reliance on fraudulent statements made by Russ Putnal," is without foundation in fact. Russ Putnal adamantly denied making a verbal agreement with Donnie Selph that he would accept as payment for his Valencia oranges some amount Donnie Selph may receive when, and if, he sold the Valencia oranges to processing plants as "juiced" rather than by "pound per box." This defense to the contractual debt obligation is without foundation in fact or law in this proceeding and is likewise rejected. The documentary evidence presented by Russ Putnal in support of his demand for payment is uncontroverted. The majority of the documents submitted by Russ Putnal reflected that the fruit described therein was harvested from Russ Putnal's groves in Manatee County. Likewise, the documents from the processing plants reflected that the fruit from Russ Putnal's Manatee County groves averaged a "pound solids per box weight of 6.03676 pound[s] per box." The undisputed evidence established that Donnie Selph picked 11,251 boxes of Valencia oranges from Russ Putnal's grove. The agreed contract price for each box of Valencia oranges picked was $6.35 per box. Likewise, the undisputed evidence established Donnie Selph entered into a written contract with Russ Putnal to purchase a specific citrus fruit (Valencia oranges) at a specific price ($6.35) per box. The evidence established that Donnie Selph picked Russ Putnal's Valencia oranges, sold those Valencia oranges, and failed and refused to pay Russ Putnal the agreed contracted price of $6.35 per box for his Valencia oranges. The evidence of record demonstrated clearly that Donnie Selph is indebted to Russ Putnal for the net sum of $64,070.28 due and owing as of October 1, 2003. This outstanding debt is computed from the gross sum of $71,443.85, less: harvesting, mutual, and taxes for a subtotal of $2,373.57, and less $5,000.00 money paid and received from Donnie Selph. The uncontroverted evidence establishes that Donnie Selph was, at the times material to this proceeding, a Florida- licensed and bonded citrus fruit dealer and that, as of October 1, 2003, Donnie Selph harvested 11,521 boxes of Valencia oranges from Putnal Groves. Russ Putnal timely filed a complaint alleging that Donnie Selph failed to promptly pay its indebtedness to Russ Putnal for the Valencia oranges harvested pursuant the contract. Russ Putnal is, therefore, entitled to payment of the principal amount of $64,070.28 plus pre-judgment interest. Based on the date of the last payment made by Donnie Selph to Russ Putnal, pre-hearing interest would run from October 1, 2003.
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 ordering Respondent, Donnie Selph, d/b/a The Citrus Store and d/b/a D & D Citrus, to pay to Petitioner, Russ Putnal, d/b/a Putnal Groves, the sum of $64,070.28, together with pre-judgment interest calculated by the Department pursuant to Section 55.03, Florida Statutes, from October 1, 2003, until paid. DONE AND ENTERED this 3rd day of June, 2004, in Tallahassee, Leon County, Florida. S FRED L. BUCKINE 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 3rd day of June, 2004.
