The Issue The issues for determination in this case are whether Respondent as a licensed citrus fruit dealer breached an agreement with Petitioner relating to the purchase of citrus fruit during the 1991-1992 shipping season and further whether the breach of such agreement constitutes a violation of the Florida Citrus Code for which the proceeds of the citrus fruit dealer's bond should be paid to Petitioner pursuant to section 601.66, Florida Statutes.
Findings Of Fact Petitioner, Lykes Pasco, Inc., is a Florida corporation located in Pasco County, Florida, in the business of citrus fruit processing. Respondent, L & M Fruit Company, Inc., is a dissolved Florida corporation that formerly was in the business of selling and delivering citrus fruit. Jerry M. Mitchell was the past president of Respondent. During the 1991-1992 shipping season, Respondent was a licensed citrus fruit dealer in Florida. Co-Respondent, American Surety and Casualty Company, a registered surety company, during the 1991-1992 shipping season executed a citrus fruit dealer's bond to Respondent in the amount of $49,000 pursuant to the provisions of section 601.66, Florida Statutes. On or about September 20, 1991, Petitioner entered into an express written contract with Respondent for the sale and delivery of citrus fruit. Specifically, the contract provided for the sale and delivery of 35,000 boxes of early and midseason oranges at $0.85 pounds net delivered, and 35,000 boxes of valencia oranges at $1.05 pounds net delivered. The contract was executed by Tom O'Neal on behalf of Petitioner, and by Jerry M. Mitchell on behalf of Respondent. Of the 35,000 boxes of early and midseason oranges provided for in the contract, Respondent delivered 21,706 boxes leaving a shortage of 13,294 boxes. Of the 35,000 boxes of valencia oranges provided in the contract, Respondent delivered 1,180 boxes, leaving a shortage of 33,820 boxes. Because of the Respondent's breach of contract Petitioner was required to purchase fruit solids on the open market to cover its business needs. Petitioner incurred costs in the amount of $91,980.53 to replace the fruit which Respondent failed to deliver under the terms of the contract. In addition to the costs incurred by the Petitioner in replacing the fruit, Petitioner also made an advancement of funds against the contract to the Respondent. The funds advanced to Respondent which have not been repaid nor applied against the fruit delivered total $15,567.55. The damages incurred by the Petitioner resulting from Respondent's breach of contract total $107,548.08.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED: That the Department of Agriculture and Consumer Services enter a final order adjudicating that the amount of indebtedness owed to Petitioner from Respondent is $107,548.08, that Respondent shall have thirty (30) days in which to satisfy such indebtedness, and that upon failure of the respondent to make satisfaction of this claim, any remaining proceeds of the citrus fruit dealer's bond executed by Co-Respondent shall be distributed to Petitioner. RECOMMENDED in Tallahassee, Leon County, Florida, this 8th day of May, 1995. RICHARD HIXSON Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 8th day of May, 1995. APPENDIX Petitioner' Proposed Findings: Paragraphs 1 through 7 are adopted and incorporated herein. COPIES FURNISHED: Commissioner Bob Crawford Commissioner of Agriculture The Capitol, P1-10 Tallahassee, Florida 32399-0810 Patrick T. Lennon, Esquire H. Vance Smith, Esquire Attorneys for Lykes Pasco, Inc. Post Office Box 1531 Tampa, Florida 33601 Mr. Jerry M. Mitchell, President L & M Fruit Company, Inc. Post Office Box 1048 Bartow, Florida 33880 F. J. Manuel, Jr. Sears & Manual, P.A. Attorneys for American Surety & Casualty Company 511 North Ferncreek Avenue Orlando, Florida 32803 Clerk Department of Citrus Post Office Box 148 Lakeland, Florida 33802-0148 Brenda Hyatt, Chief Bureau of Licensing & Bond Department of Agriculture 508 Mayo Building Tallahassee, Florida 32399-0800 Richard Tritschler General Counsel Department of Agriculture The Capitol, PL-10 Tallahassee, Florida 32399-0810
The Issue Is the general partnership, Schiller Investments, a party to the fruit purchase agreement that is the subject of this proceeding with standing to bring a claim for payment? Does the failure of Schiller Investments to register "Shell Creek Groves" as a fictitious name require abating this proceeding?1/ Does the election of remedies provision of section 601.65, Florida Statutes (2011)2/ prohibit the Florida Department of Agriculture and Consumer Services and the Division of Administrative Hearings from taking jurisdiction of this matter? Is Gulf Citrus Marketing, LLC, liable to Schiller Investments in the amount of $259,817.41?
Findings Of Fact Schiller Investments is a general partnership formed by Friedrich Schiller and his wife, Barbara Ann Schiller, in Kansas on February 1, 2005. In the transactions involved in this matter, Mr. Schiller acted on behalf of Schiller Investments with full authority as a general partner. Although Schiller Investments has sometimes used the name Shell Creek Groves in business transactions, Schiller Investments has never registered Shell Creek Groves as a fictitious name in Florida. Schiller Investments and Mr. Schiller also used the name Shell Creek Citrus interchangeably with Shell Creek Groves. They also did not register Shell Creek Citrus as a fictitious name. Respondent, Gulf Citrus Marketing, LLC (Gulf Citrus), is a licensed fruit dealer in Florida. George Winslow is the managing member of Gulf Citrus and acted on behalf of Gulf Citrus in all of the communications and transactions with Mr. Schiller and Schiller Investments involved in this matter. On September 23, 2009, Schiller Investments and Gulf Citrus entered into Gulf Citrus Marketing Fruit Purchase Agreement No. 936 (Purchase Agreement). Mr. Winslow drafted the agreement with the assistance of a lawyer. Mr. Winslow has a college degree in agronomy. In contrast, Mr. Schiller's formal education ended with completion of the eighth grade. Mr. Schiller executed the Purchase Agreement on behalf of Schiller Investments. Mr. Winslow executed it on behalf of Gulf Citrus. The signature blocks in the document, drafted by Mr. Winslow and Gulf Citrus's lawyer, do not state the position either man held in the entities on whose behalf they signed, as shown below. But it is plain they are signing on behalf of an entity not as individuals. SELLER: SCHILLER INVESTMENTS dba Shell Creek Groves By: Name: Friedrich Schiller BUYER: GULF CITRUS MARKETING, LLC By: Name: George Winslow The Purchase Agreement was a contract between Gulf Citrus and Schiller Investments. The Purchase Agreement provided for Gulf Citrus to purchase all oranges grown in the Prairie Grove and Shell Creek Grove for four consecutive citrus seasons, beginning with the 2009-2010 season and ending with the 2012-2013 season. The Purchase Agreement provides specific descriptions by survey coordinates of the Charlotte County locations of the groves. Shell Creek Grove is much larger than Prairie Grove. It produced the vast majority of the oranges. From 2009 to present day, Mr. Schiller has owned Shell Creek Grove. Mr. Winslow always knew that Mr. Schiller owned Shell Creek Grove. Mr. Winslow brokered the foreclosure sale of the grove to Mr. Schiller from Metropolitan Life. Before then, Mr. Winslow was one of three co-owners of Shell Creek Grove. From May 17, 2002, until January 25, 2012, Prairie Groves, LLC, owned the Prairie Grove. Throughout the course of their various dealings, Mr. Winslow was aware that Mr. Schiller controlled both groves and business dealings involving them. He regularly communicated with Mr. Schiller about the groves and dealt exclusively with him on matters involving the groves. The Purchase Agreement provides that in the event of the sale of the groves, Gulf Citrus has the right, but not the obligation, to terminate the agreement. It contains other clauses that give Gulf Citrus the right to terminate the contract in certain circumstances. The Purchase Agreement also gives Gulf Citrus the right to assign or transfer the Purchase Agreement to any third party or successor in interest. Schiller Investments timely delivered the oranges from both groves for the 2010-2011 season, as provided in the Purchase Agreement. The oranges satisfied all of the quality standards and other requirements of the Purchase Agreement. Gulf Citrus accepted the oranges. It in turn sold the oranges and received payment for them. Gulf Citrus has not paid $259,817.41 owed for the oranges. During this time, Mr. Winslow experienced financial difficulties. Mr. Schiller allowed Mr. Winslow time to cure his problems and pay the debt. In September and October, 2011, Mr. Schiller communicated regularly with Mr. Winslow and his staff about the unpaid amount and Gulf Citrus's plan to pay it. Mr. Winslow promised payment several times and explained various plans to raise the money, including re-financing real estate. But he never delivered. One scheme Mr. Winslow proposed was for Schiller Investments to enter into a new fruit purchase agreement with a New Jersey company named Johanna Foods. Mr. Schiller chose not to do this. He had reasonable concerns. They were the fact that Johanna Foods was not a licensed Florida Fruit dealer4/, that he was unfamiliar with the company, and that the proposal included an unexplained payment described as a "bonus" that was to make up for the money Gulf Citrus had not paid. Mr. Winslow did not propose to assign the agreement to Johanna Foods. And Gulf Citrus never assigned the agreement.5/ Mr. Winslow acknowledged the failure to pay in writing on October 25, 2011. The letter he wrote and signed that day in Mr. Schiller's presence reads: Fred Schiller It is my intent to pay Shell Creek Grove $259,818.00, of past due fruit proceeds due; on or about Nov 10th subject to refinancing of property owned by George Winslow. In the interim I will advise you weekly of the progress beginning November 1st. George Winslow [signature] In the event payment is not tendered to Shell Creek Grove by Nov 15th Gulf Citrus Marketing will cancel the Fruit Purchase agreement between Gulf Citrus Mkt. and Shell Creek Grove. George Winslow [signature] On October 28, 2011, Mr. Schiller sent Mr. Winslow a handwritten letter stating he was terminating the Purchase Agreement. The letter quoted verbatim below states: Dear George, Due to your financial difficulties and your inability to meet your obligations in a timely manner I am terminating the agreements between "Prairie Grove-Shell Creek Citrus" and your companies at Gulf Citrus effective Nov. 30th 2011. I like to thank your staff especially Lori for everything they have done in the past years. Thank you Fred Schiller Prairie Creek Groves Shell Creek Citrus Cc: Lory Sabrina Mr. Schiller and Mr. Winslow have done business with each other since 2001. They and the entities that they controlled were engaged in other business relationships, including ones involving Prairie Grove and Shell Creek Grove. They included business relationships with Citrus Sweet, Inc., and Florida Gulf Citrus Management, Inc. The relationships included an agreement between Mr. Schiller and Gulf Citrus Management, a Mr. Winslow entity, for management of the Shell Creek Grove. In the course of their business dealings, Mr. Schiller twice provided Mr. Winslow with copies of the Schiller Investments partnership agreement. He provided it personally to Mr. Winslow in 2002. He provided it to Mr. Winslow's staff in 2008 or 2009.6/ Through Mr. Winslow, Gulf Citrus was fully aware of the parties that it was dealing with in all the business relationships including the Purchase Agreement. Gulf Citrus has sued Mr. Schiller in circuit court for claims involving the Purchase Agreement. There is no evidence that Schiller Investments has filed suit in circuit court. There is also no evidence that Gulf Citrus filed its circuit court action before the Department took jurisdiction of the claim of Schiller Investments.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is Recommended that the Department enter a final order approving the claim of Schiller Investments against Gulf Citrus Marketing, LLC, in the amount of $259,817.41. DONE AND ENTERED this 24th day of May, 2012, in Tallahassee, Leon County, Florida. JOHN D. C. NEWTON, II 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 24th day of May, 2012.
The Issue Whether Respondent, The Citrus Store, a citrus fruit dealer, owes Petitioner, Hutchinson Groves, Inc., a grower of Florida citrus products, a sum of money for citrus fruit harvested from Petitioner's groves. SUMMARY DISPOSITION On or about December 16, 2003, Petitioner, Hutchinson Groves, Inc., filed a complaint with the Florida Department of Agriculture and Consumer Services (the "Department"), alleging that Respondent, The Citrus Store, owes Petitioner the sum of $27,117.59, for oranges harvested from Petitioner's groves by Respondent pursuant to a written contract. Respondent conceded that it owed some lesser amount to the owner of the groves in question. However, the matter was complicated by the fact that, subsequent to the execution of the contract with Respondent, Petitioner had sold those groves to a third party who also asserted a claim to the proceeds from the sale of the fruit to Respondent. The matter was the subject of litigation in the Circuit Court of the Tenth Judicial Circuit, in and for Highlands County (Case No. GC-02-587), which caused the Department to delay forwarding the matter to the Division of Administrative Hearings until December 2, 2005. The case was assigned to the undersigned and set for hearing on February 2, 2006. The hearing was convened as scheduled. Prior to the taking of testimony, the parties discussed settlement of the matter. At the conclusion of their discussions, the parties stipulated: that the Division of Administrative Hearings has jurisdiction over this matter and the parties thereto pursuant to Section 120.569 and Subsection 120.57(1), Florida Statutes (2005); that, at all times relevant to this proceeding, Petitioner was a "producer" pursuant to Subsection 601.03(29), Florida Statutes; that, at all times relevant to this proceeding, The Citrus Store was a "citrus fruit dealer" pursuant to Subsection 601.03(8), Florida Statutes; that Respondent owes Petitioner $27,117.59 for the oranges harvested from Petitioner's groves; and that no interest would be sought or assessed against Respondent on the principal amount owing to Petitioner. Based on the foregoing stipulations, it is RECOMMENDED that a final order be entered requiring Respondent, The Citrus Store, to pay to Petitioner, Hutchinson Groves, Inc., the principal sum of $27,117.59, without interest. DONE AND ENTERED this 8th day of February, 2006, in Tallahassee, Leon County, Florida. S LAWRENCE P. STEVENSON 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 8th day of February, 2006. COPIES FURNISHED: Kathy Alves Fidelity & Deposit Company of Maryland Post Office Box 87 Baltimore, Maryland 21203 William Hutchinson Hutchinson Groves, Inc. 1323 Edgewater Point Drive Sebring, Florida 33870 Clifford R. Rhoades, Esquire Clifford R. Rhoades, P.A. 227 North Ridgewood Drive Sebring, Florida 33870 Anthony W. Surber, Esquire Harbsmeier, DeZayas, Harden & DeBari, L.L.P. 5116 South Lakeland Drive Lakeland, Florida 33813 Chris Green, Chief Bureau of License and Bond Division of Marketing 407 South Calhoun Street, Mail Station 38 Tallahassee, Florida 32399-0800 Richard D. Tritschler, General Counsel Office of the General Counsel 407 South Calhoun Street, Suite 520 Tallahassee, Florida 32399-0800
The Issue In summary, the issues for decision in this case are: (1) Whether in pari materia rule provisions in Chapter 5B-58, Florida Administrative Code, which define and make operative the term "exposed" to citrus canker disease, together constitute an invalid exercise of delegated legislative authority within the meaning of Section 120.52(8), Florida Statutes; and (2) Whether the Department's policy of removing so-called "exposed" trees located within a 1900-foot radius of infected trees is an unpromulgated rule-by-definition in violation of Section 120.54(1)(a), Florida Statutes.
Findings Of Fact Citrus Canker Background Citrus canker is a bacterial disease that afflicts citrus plants, attacking their fruits, leaves, and stems and causing defoliation, fruit drop, and loss of yield. The disease also causes blemishes on the fruit and loss of quality, which negatively affect marketability, and it can be fatal to the plant. Citrus canker spreads in two ways. First, it can be transmitted through human movement, since the bacteria can, for example, attach to the equipment and clothing of lawn maintenance workers. Second, citrus canker can spread from an infected citrus tree to a previously uninfected citrus tree by wind-driven rain. The Department is the state agency charged with the responsibilities of eradicating, controlling, and preventing the spread of citrus canker in Florida. Although the events that have led to the instant dispute began in 1995 when the Department detected Asian strain citrus canker in Miami-Dade County near the International Airport, the Department’s earlier experience with an outbreak of the disease in the 1980’s sheds light on its recent actions; as well, these past events illuminate a presently-relevant legislative enactment, namely, Section 581.184(2), Florida Statutes. Briefly, in September 1984, the Department’s field inspectors discovered a bacterial plant disease in Ward’s Citrus Nursery. Samples were sent to the U.S. Department of Agriculture (“USDA”) for analysis, and the federal agency mistakenly identified the bacteria as Asian strain citrus canker. On October 16, 1984, the Secretary of the USDA declared an extraordinary emergency in the State of Florida because of citrus canker. See generally Chapter 89-91, Laws of Florida; see also Department of Agriculture and Consumer Services v. Polk, 568 So. 2d 35 (Fla. 1990). Then-Governor Bob Graham summoned the legislature to convene on December 6, 1984, in special session to consider, among other things, “[l]egislation relating to the research and eradication of citrus canker, indemnification for certain private losses relating to citrus canker eradication, and consideration of supplemental appropriations relating to citrus canker.” 1995 Laws of Florida, Vol. I, Part One, pg. xix. During the special session, the legislature enacted an appropriations bill that made funds available for inspection, control, and eradication of citrus canker, and for financial assistance to persons suffering losses because of citrus canker. See Chapter 84-547, Laws of Florida. Meantime, the Department, working with the USDA, began implementing a joint federal-state citrus canker eradication program (from which the federal government later would withdraw in March 1986 due to inadequate funding). See Chapter 89-91, Laws of Florida. The Department promulgated extensive and detailed rules governing this program. These rules, set forth in Chapter 5B-49, Florida Administrative Code, took effect on March 6, 1985. Included within these rules were provisions requiring the destruction of certain commercial plants located within 125 feet in every direction from an infected plant. The legislature’s interest in the apparent citrus canker emergency continued beyond the December 1984 special session. During the 1985 regular session, it passed a bill that enhanced the Department’s powers to respond to the perceived citrus canker threat. See Chapter 85-283, Laws of Florida. Most important to this case, the following year, 1986, the legislature enacted a law that directed the Department to “adopt rules specifying facts and circumstances that, if present, would require the destruction of plants for purposes of [stopping the spread] of citrus canker in this state.” See Chapter 86-128, Laws of Florida. This rulemaking directive, which took effect July 1, 1986, is currently codified in Section 581.184(2), Florida Statutes. The Department responded promptly, publishing proposed revisions to Chapter 5B-49, Florida Administrative Code, in the September 5, 1986, Florida Administrative Weekly. These proposed rules, which took effect March 4, 1987, provided clearer, more comprehensive regulations in the form of a Florida Citrus Canker Action Plan, which was incorporated by reference into the rules. As it turned out, the strain of citrus canker found in Ward’s Citrus Nursery was not the virulent Asian strain after all, but a nonaggressive and less dangerous type of canker later dubbed Florida Nursery strain. See Chapter 89-91, Laws of Florida. After the putative emergency had ended, the Department repealed the remaining provisions of Chapter 5B-49, Florida Administrative Code, effective November 29, 1994. The Current Crisis In 1995, when the Department detected Asian strain citrus canker in Miami-Dade County, it quickly became alarmed that the disease could spread to commercial citrus groves, and accordingly implemented a new Citrus Canker Eradication Program (“Eradication Program”) to eradicate and prevent the spread of citrus canker to other parts of the state.1 Since the initial detection in Miami-Dade County in 1995, the Department has found citrus canker in six additional Florida counties: Hillsborough, Manatee, Hendry, Collier, Broward, and Palm Beach. At the time of the 1995 outbreak, the Department’s policy and practice was to destroy each “infected” tree and all “exposed” trees, the latter which the Department, following historical precedent, then considered to be all citrus trees within a 125-foot radius of an infected tree. In November 1995, the Department commenced rulemaking to adopt regulations governing the Eradication Program. Initially taking effect January 17, 1996, the Department’s citrus canker rules, found in Chapter 5B-58, Florida Administrative Code, have since been amended and revised from time to time. The Department, however, did not adopt its 125-foot radius policy as a rule, then or ever. The primary methods for eradicating and controlling the spread of citrus canker pursuant to the Eradication Program are the prevention of spread by human means and the prevention of spread from infected trees to uninfected trees by wind-driven rain. Chapter 5B-58, Florida Administrative Code, contains numerous, detailed provisions designed to prevent human spread of citrus canker bacteria. Petitioners do not challenge these provisions. The Department also seeks to prevent the spread of the bacteria by removing trees that can host the bacteria. To that end, the Department cuts down two separate categories of trees. The removal of these trees, defined as “infected” or “exposed” to citrus canker, is foundational to the Eradication Program. “Infected” trees are defined in the rule as being trees that harbor the citrus canker bacteria and express visible symptoms. See Rule 5B-58.001(1)(i), Florida Administrative Code. The Rule’s definition of “infected” is substantially the same as the statutory definition of the term “infected or infested,” which is located in Section 581.184(1)(a), Florida Statutes. The Department’s current policy, as expressed in Rule 5B-58.001(5), is that “[a]ll citrus trees which are infected or infested shall be removed.” Pursuant to this policy, the Department is removing every infected tree it finds. Petitioners do not challenge the Department’s policy decision to remove all infected trees. The second category of trees removed by the Department comprises those it defines as “exposed.” In Rule 5B-58.001(h), the Department has defined “exposed” trees as being those that are without visible symptoms of citrus canker but which have been “[d]etermined by the department to likely harbor citrus canker bacteria because of their proximity to infected plants or probable contact with [sources of human spread].” It is the Department’s policy regarding the removal of “exposed” trees that is at the core of Petitioners’ challenge. In Section 581.184(3), Florida Statutes, the Department is given authority to remove healthy trees——that is, trees that are neither infected, nor exposed, nor suspected of being exposed——to create a citrus canker host-free buffer area to “retard the spread of citrus canker from known infected areas.” Unlike trees that are destroyed on grounds of infection or suspected exposure to infection, however, trees removed from a rule-designated buffer area are considered valuable property, and their owners must be paid “subject to annual legislative appropriation.” Id. It is undisputed that the Department is not removing any trees under its authority to establish buffer zones. The “1900-Foot Radius Policy” Despite the Department’s efforts in the early years of the citrus canker outbreak discovered in 1995, the disease continued to spread into other parts of Miami-Dade County and into Broward County. In 1998, the Department commissioned Dr. Timothy R. Gottwald, a plant pathologist with the USDA, to conduct a study that would measure the distances that citrus canker could spread in South Florida. The objectives of the study, which commenced in August 1998, included: determining the amount of citrus canker spread from bacterial hosts (foci of infection); (b) examining the spread resulting from normal and severe weather events; (c) evaluating whether the Department’s then-current use of the 125-foot radius for defining and destroying “exposed” trees was adequate to control spread; and (d) providing, if necessary, evidence for any adjustment of the radius distance. By December 1998, before his report was completed, Dr. Gottwald’s data were sufficiently conclusive that he was able to present his study in Orlando to a group of Department officials, scientists, and citrus industry representatives. As Dr. Gottwald testified during the trial in Broward County circuit court, at that meeting in December 1998, the group reviewed his data and “came to a consensus . . . that we’re using 1,900 feet,” meaning that all trees within a 1900-foot radius of a diseased tree should be destroyed to prevent the further spread of citrus canker. A few months later, Dr. Gottwald presented his study to the Citrus Canker Risk Assessment Group (the “Risk Assessment Group”).2 A creature of the Department, the Risk Assessment Group, as defined in Rule 5B-58.001(1)(e), Florida Administrative Code, is a committee composed of knowledgeable scientists and regulatory officials that makes recommendations for the control and eradication of citrus canker; the Director of the Division of Plant Industry appoints its members.3 Dr. Gottwald persuaded the Risk Assessment Group to recommend that a 1900-foot zone be employed. Accordingly, in May 1999, the Risk Assessment Group recommended to the Department that all “exposed” trees, i.e. all trees within 1900 feet of an infected tree, should be destroyed in order to eradicate citrus canker. Dr. Gottwald completed his preliminary report on or about October 13, 1999. Although the title of his report describes it as a draft, Dr. Gottwald’s cover letter to the Department assures that the “data will not change, so for regulatory purposes this report may be useful for planning eradication/disease suppression activities.” In December 1999, then-Commissioner Bob Crawford approved the previous recommendation of the Risk Assessment Group, adopting on behalf of the Department a policy to remove citrus trees within 1900 feet of infected trees beginning January 1, 2000. This new policy was a bold and aggressive step——breathtaking in scope——that significantly ratcheted-up the Department’s eradication efforts. To grasp its magnitude, consider that the 1900-foot radius policy entails a swath of tree destruction that encompasses approximately 262 acres for each infected tree found. The science underpinning the 1900-foot radius policy has not changed materially or become more refined. After December 1999, any scientific or technical data received by the Department has served to confirm or provide additional support for the decision to adopt the 1900-foot radius policy. The parties disagree about——and the evidence is somewhat in conflict concerning——the substance of the Department's 1900-foot radius policy. Petitioners urge that the policy has two facets: (1) it determines which trees are deemed “exposed”; and (2) it dictates that all trees so identified shall be removed. Both aspects of the Department’s policy, as Petitioners describe it, can be conflated into a single statement: All trees within 1900 feet of an infected tree shall be removed. Petitioners acknowledge that the Department has, in a very few instances in commercial grove settings, spared some trees within the 1900-foot radius, but they maintain that the few exceptions which have been made do not alter the essentially mandatory nature of the Department’s removal policy as it relates to "exposed" trees. The Department counters that its policy is less rigid than Petitioners would have it. While admitting that the 1900-foot radius policy determines which trees are considered “exposed,” the Department denies that all trees so identified must be removed. Instead, claims the department, the 1900-foot radius establishes a bright-line starting point that may be adjusted outward or inward based upon the recommendations of the Risk Assessment Group. The greater weight of the evidence establishes that Petitioners have correctly summarized the Department’s policy. In public statements, such as press releases, in actual practice, and through the sworn testimony of its officials, the Department has made clear that its policy is, in fact, to remove all trees within 1900 feet of an infected tree, barring extraordinary circumstances that have presented only occasionally in commercial grove settings (and never, to date, in noncommercial or residential settings). Indeed, the general applicability, widespread implementation, and public articulation of the Department’s policy are such that three district courts of appeal have described its essence in terms substantially similar to Petitioners’ allegations: “Trees are deemed exposed if they lie within a 1900-foot radius of an infected tree.” Sapp Farms, Inc. v. Florida Department of Agriculture and Consumer Services, 761 So. 2d 347, 348 (Fla. 3d DCA 2000). “The Citrus Canker Risk Assessment Group has determined that in order to assure at least 99% eradication, all trees within 1900 feet of a canker-infested tree must be destroyed.” State v. Sun Gardens Citrus, LLP, 780 So. 2d 922, 924 (Fla. 2d DCA 2001)(emphasis added). “On January 1, 2000, Commissioner Bob Crawford adopted the recommendation of the task force [that the Department adopt a policy to destroy trees within a 1900 foot radius of a diseased tree in order to eradicate citrus canker] and the 1900 foot buffer zone policy became effective.” Florida Department of Agriculture and Consumer Services v. City of Pompano Beach, 2001 WL 770096, *2 (Fla. 4th DCA July 11, 2001). In addition, the legislature described the Department’s policy indirectly in a statement of legislative findings made during the year 2000 regular session: “WHEREAS, the Third District Court of Appeals [sic], in Sapp Farms, Inc., v. Florida Department of Agriculture and Consumer Services, DCA Case No. 3D00-487, held that citrus trees within a certain radius of infection (originally thought to be 125 feet but now scientifically determined to be at least 1,900 feet) necessarily harbor the citrus canker bacteria and thus are diseased and have no value . . . . ” Chapter 2000-308, Laws of Florida, at pg. 3226 (emphasis added).4 Thus, a preponderance of evidence persuasively establishes that the Department adopted a policy of general applicability in December 1999 that took effect on January 1, 2000, and has been applied consistently since that time. A succinct and accurate expression of that policy, taking into account the relatively remote but nevertheless unexcluded possibility that adjustments might be made in exceptional situations in accordance with recommendations arising from the risk assessment process, emerges clearly and convincingly from the evidence as follows: All trees located within a 1900-foot radius (the "Presumptive Removal Zone") of any infected tree shall be removed; provided, however, that the Commissioner, after taking into consideration the recommendations of the Risk Assessment Group, may determine that some or all of the trees within the Presumptive Removal Zone need not be destroyed if such tree(s), which will be specifically identified by the Department, do not pose an imminent danger in the spread of the citrus canker disease. This agency statement will be referred to hereinafter as the "PRZ Policy."5 The Department’s Proposed Rule Revisions Shortly before the final hearing of this matter, the Department initiated rulemaking to amend the existing provisions of Rule 5B-58.001, Florida Administrative Code. The rule amendments proposed by the Department (the “Proposed Amendments”), if adopted, would, among other things: Replace the existing definition of “exposed” found in Rule 5B-58.001(1)(h) with a new definition for the term “exposed to infection” and substitute the newly-defined term “exposed to infection” in place of “exposed” wherever the latter appears in the existing rule. The new definition of “exposed to infection” would be identical to the definition of the same term found in Section 581.184(1)(b), Florida Statutes;6 and Define the phrase “citrus trees harboring the citrus canker bacteria due to their proximity to infected citrus trees,” which is the determinative component of the proposed definition for the term “exposed to infection,” to mean citrus trees located within 1900 feet of an infected citrus tree. The effect of these revisions would be to specify that the Department considers all trees within 1900 feet of an infected tree to be, by definition, “exposed to infection” and subject to removal. Critically, however, the Proposed Amendments do not specify the Department’s policy of general applicability, which exists in fact and has been in effect since January 1, 2000, that all trees within the 1900-foot-radius removal zone shall be destroyed except those, if any, designated by the Commissioner of Agriculture as not posing an imminent danger in the spread of the citrus canker disease. Pursuant to Section 120.54(2), Florida Statutes, a Notice of Proposed Rule Development with respect to the Proposed Amendments was published in the Florida Administrative Weekly on July 6, 2001. Thereafter, on July 20, 2001, the Department caused to be published a notice of proposed rulemaking concerning the Proposed Amendments pursuant to Section 120.54(3), Florida Statutes. As of the date of the final hearing, the Department had scheduled a workshop on the Proposed Amendments to be held in Broward County on Tuesday, July 24, 2001. The Department is currently engaged in the rulemaking process with respect to the Proposed Amendments both expeditiously and, as far as the record in this case shows, in good faith. For reasons that will be discussed in the following Conclusions of Law, however, the Proposed Amendments do not “address” the PRZ Policy as that term (“address”) is used in Section 120.54(1)(a)1.c., Florida Statutes. About the Challengers As set forth more particularly below, Petitioners and Intervenors each own residential or noncommercial citrus trees in Broward or Miami-Dade County that are located within a citrus canker quarantine area and hence are immediately subject to the Department’s PRZ Policy.7 Petitioner Broward County owns a noncommercial citrus grove that is situated in a residential area and lies within 1900 feet of other citrus trees. Broward County owns other residential citrus trees as well, including trees within 1900 feet of infected citrus trees. Petitioner City of Plantation owns at least one “exposed” citrus tree that the Department has earmarked for destruction through the issuance of an IFO. Intervenors John and Patricia Haire own several “exposed” residential citrus trees in Broward County; they have received an IFO notifying them that all such trees will be removed. Intervenor Dr. Melvyn Greenstein owns residential citrus trees in Miami-Dade County that the Department has deemed “exposed.” He, too, has received an IFO giving notice that his “exposed” citrus trees will be removed. CONCUSIONS OF LAW The Division of Administrative Hearings has personal and subject matter jurisdiction in this proceeding pursuant to Sections 120.56, 120.569, and 120.57(1), Florida Statutes. Standing The Department contends that Petitioners Broward County and Pompano Beach lack standing to maintain this proceeding because, according to the Department, they have failed to prove that they are “substantially affected” by the challenged agency statement. See Section 120.56(4)(a), Florida Statutes (“Any person substantially affected by an agency statement may seek an administrative determination that the statement violates s. 120.54(1)(a).”). In particular, the Department argues that these Petitioners have failed to demonstrate that they are subject to a real and sufficiently immediate injury-in-fact as a result of the alleged statement, namely, the PRZ Policy. The burden rests on Petitioners to prove their respective rights to maintain this action. To show that they are “substantially affected” by the alleged rule-by-definition, each Petitioner must establish: (a) a real and immediate injury-in-fact; and (b) that the interest invaded is arguably within the zone of interests to be protected or regulated. E.g. Lanoue v. Florida Department of Law Enforcement, 751 So. 2d 94, 96 (Fla. 1st DCA 2000). The Department does not dispute that the property interests asserted by these Petitioners are within a protected “zone of interests,” and it is concluded that they are. To satisfy the injury-in-fact element, “the injury must not be based on pure speculation or conjecture.” Ward v. Board of Trustees of the Internal Improvement Trust Fund, 651 So. 2d 1236, 1237 (Fla. 4th DCA 1995). These Petitioners have carried their burden on this issue. Each owns trees within a citrus canker quarantine area in Broward County. Clearly, under the Department’s PRZ Policy, Petitioners’ trees are presently located within a potential path of destruction, even if these trees have not already been targeted for removal, and even if they do not all lie within 1900 feet of an infected tree. The threat of danger to these trees——indeed all citrus trees in a quarantine area——is neither speculative nor conjectural but rather real and immediate. Without question, Petitioners and Intervenors have standing to maintain this proceeding. The Existing Rules Section 120.56(1)(a), Florida Statutes, provides that "[a]ny person substantially affected by a rule or a proposed rule may seek an administrative determination of the invalidity of the rule on the ground that the rule is an invalid exercise of delegated legislative authority." The burden is on the challenger to show that an existing rule is an invalid exercise of delegated legislative authority within the meaning of Section 120.52(8), Florida Statutes. See Cortes v. State Board of Regents, 655 So. 2d 132, 136 (Fla. 1st DCA 1995). The phrase "invalid exercise of delegated legislative authority" is defined in Section 120.52(8), Florida Statutes, as "action which goes beyond the powers, functions, and duties delegated by the Legislature." The statute then enumerates seven alternative grounds, upon any one of which a rule must be invalidated: The agency has materially failed to follow the applicable rulemaking procedures or requirements set forth in this chapter; The agency has exceeded its grant of rulemaking authority, citation to which is required by s. 120.54(3)(a)1.; The rule enlarges, modifies, or contravenes the specific provisions of law implemented, citation to which is required by s. 120.54(3)(a)1.; The rule is vague, fails to establish adequate standards for agency decisions, or vests unbridled discretion in the agency; The rule is arbitrary or capricious; The rule is not supported by competent substantial evidence; or The rule imposes regulatory costs on the regulated person, county, or city which could be reduced by the adoption of less costly alternatives that substantially accomplish the statutory objectives. In addition to these grounds, the statute provides general standards "to be used in determining the validity of a rule in all cases." Southwest Florida Water Management District v. Save the Manatee Club, Inc., 773 So. 2d 594, 597-98 (Fla. 1st DCA 2000). Contained in the closing paragraph of Section 120.52(8), Florida Statutes, these general standards consist of the following: A grant of rulemaking authority is necessary but not sufficient to allow an agency to adopt a rule; a specific law to be implemented is also required. An agency may adopt only rules that implement or interpret the specific powers and duties granted by the enabling statute. No agency shall have authority to adopt a rule only because it is reasonably related to the purpose of the enabling legislation and is not arbitrary and capricious or is within the agency's class of powers and duties, nor shall an agency have the authority to implement statutory provisions setting forth general legislative intent or policy. Statutory language granting rulemaking authority or generally describing the powers and functions of an agency shall be construed to extend no further than implementing or interpreting the specific powers and duties conferred by the same statute. See also Section 120.536(1), Florida Statutes (reiterating these general standards regarding rulemaking authority). Plainly, a grant of rulemaking authority, while essential, is not enough, without more, to authorize a rule. Rather, as summarized by the first district, the general rulemaking standards make clear that "authority to adopt an administrative rule must be based on an explicit power or duty identified in the enabling statute." Save the Manatee Club, 773 So. 2d at 599. "Either the enabling statute authorizes the rule at issue or it does not[, and] this question is one that must be determined on a case-by-case basis." Id. Here, the legislature has vested the Department with rulemaking authority through several statutory grants, ranging from the broadest permissible warrant (Section 570.07(23), Florida Statutes8), to a duty-specific commission (Section 581.031(17), Florida Statutes), to the narrowly focused, citrus- canker-oriented charge in Section 581.184(2), Florida Statutes. Through these grants, the legislature clearly has given the Department the general rulemaking authority which is necessary, as a threshold matter, to permit the promulgation of the challenged existing rule; the determinative question, then, is whether the enabling statutes explicitly authorize the rule provisions at issue. In examining the Department’s specific authority to make the existing rules, Section 581.184(2) is of particular interest, not only because it deals directly with citrus canker- related rules, but also because this statute’s mandatory nature distinguishes it from the other grants of rulemaking authority extended to the Department. Enacted in 1986,9 the first sentence of Section 581.184(2)10 requires careful scrutiny: In addition to the powers and duties set forth under this chapter, the department is directed to adopt rules specifying facts and circumstances that, if present, would require the destruction of plants for purposes of eradicating, controlling, or preventing the dissemination of citrus canker disease in the state. Such rules shall be in effect for any period during which, in the judgment of the Commissioner of Agriculture, there is the threat of the spread disease in the state. Section 581.184(2), Florida Statutes (emphasis added). The legislature's use of the verb "direct" (in passive form) in this statute plainly manifests an intent to command the Department to act——and connotes the legislature's expectation that the Department will obey. This, then, is more than a mere grant of authority to make rules; it is also, according to its plain language, an order that requires compliance. By directing (rather than simply authorizing) the Department to promulgate rules specifying facts and circumstances that, if present, would require the destruction of plants to control citrus canker, the legislature effectively, albeit indirectly, placed a qualification——which will be discussed in due course below——on the broad "mandate and grant of authority to deal with problems such as the one at hand"11 found in Section 581.031(17), Florida Statutes. It is this latter section that delegates to the Department the state's power to destroy plants in the interests of controlling citrus canker (among other plant pests).12 Section 581.031(17) provides: The Department has the following powers and duties: * * * (17) To supervise, or cause to be supervised, the treatment, cutting, and destruction of plants, plant parts, fruit, soil, containers, equipment, and other articles capable of harboring plant pests, noxious weeds, or arthropods, if they are infested or located in an area which may be suspected of being infested or infected due to its proximity to a known infestation, or if they were reasonably exposed to infestation, to prevent or control the dissemination of or to eradicate plant pests, noxious weeds, or arthropods, and to make rules governing these procedures.13 As the final clause of Section 581.031(17) makes clear, at the time the legislature directed the Department to adopt rules relating to citrus canker,14 the Department already had the power to adopt rules implementing and interpreting that statute’s specific grant of legislative authority to oversee the destruction of plants infected by or infested with plant pests, or suspected of being infected, or exposed to infestation—— including rules specifying the facts and circumstances under which plants would be destroyed to control citrus canker (a major plant pest). Thus, the first sentence of Section 581.184(2) conferred no new rulemaking authority or regulatory jurisdiction upon the Department. Instead, when in 1986 the legislature enacted the bill that ultimately became Section 581.184(2), Florida Statutes, it imposed a new duty on the Department: the obligation to develop, and adopt as rules, statements of general applicability setting forth, clearly and precisely, facts and circumstances requiring the destruction of plants for purposes of controlling citrus canker. While the Department, if left to its own devices, might have elected to specify such facts and circumstances on a case-by-case basis through adjudication, eschewing the articulation of generally applicable principles (and hence evading the burden of rulemaking), with the passage of the law that is now Section 581.184(2), the legislature took that option away from the agency. The legislature’s rulemaking directive to the Department had (and continues to have) profound consequences for the Department’s regulatory authority because, as a matter of law——and as the legislature is presumed to have known when it gave the command——the rules required by Section 581.184(2) necessarily will control the Department’s exercise of its power and duty to destroy plants for purposes of citrus canker eradication. See Cleveland Clinic Florida Hospital v. Agency for Health Care Administration, 679 So. 2d 1237, 1242 (Fla. 1st DCA 1996), rev. denied, 695 So. 2d 701 (1997)(agencies must follow their own rules.) Accordingly, by ordering the Department to adopt particular rules, the legislature purposefully qualified the Department’s authority under Section 581.031(17)——not by diminishing that authority (no power was taken away), but by requiring that the authority be carried out pursuant to certain pre-determined and publicly available guidelines. It follows, then, that the scope of the Department’s rulemaking authority with regard to citrus canker eradication must be determined based on a reading together of Sections 581.031(17) and 581.184(2), which are, on the common subject of citrus canker, in pari materia;15 these enabling statutes, taken as a whole, either authorize the Department’s existing rules, or they do not. See Southwest Florida Water Management District v. Save the Manatee Club, Inc., 773 So. 2d 594, 599 (Fla. 1st DCA 2000). If the Department’s existing rules fail to comply with the rulemaking directive of Section 581.184(2), then, to the extent of the deficiency, the Department has exceeded its rulemaking authority, by adopting rules that would permit the Department to exercise its power and duty to destroy plants in the absence of legislatively mandated (though Department devised) guidelines. Obviously, therefore, the legislative intent behind the 1986 rulemaking directive is crucial. The plain and unambiguous statutory language is determinative, as it should be, and reveals several important points about the legislative mindset. First, as just mentioned, but to repeat for emphasis, the legislature clearly intended that the Department's citrus canker eradication program be implemented according to, and hence to that extent be governed by, rules specifying the generally applicable facts and circumstances that will require plant destruction. In this regard, it is significant that the legislature did not direct the Department to adopt rules specifying “factors” or “variables” to consider in deciding whether a plant should be destroyed, nor did it mandate that the desired rules specify facts that “might” require the destruction of plants, depending on the presence of other, non-specified circumstances or at the Department’s discretion; rather, the plain language of the statute leaves room for only one contingency: whether the rule- prescribed facts and circumstances exist. When those facts and circumstances are present, the destruction of plants will be required, not as a discretionary matter, but as a function of the statutorily compelled regulatory framework.16 Second, the legislature evidently concluded that the adoption of rules specifying facts and circumstances that would require the destruction of plants in the interests of eradicating citrus canker was, in 1986, feasible and practicable, for it did not condition the directive to make rules on the later concurrence of these or any other factors. Then, as now, whenever the legislature adopts an act that “requires implementation of the act by rules of an agency . . . , such rules shall be drafted and formally proposed . . . within 180 days after the effective date of the act, unless the provisions of the act provide otherwise.” See Section 120.54(12), Florida Statutes (1985). Having said nothing to the contrary, the legislature intended that the Department complete its assigned rulemaking task within 180 days. Third, although this might go without saying, the legislature clearly intended that the Department do more in its rules than merely restate the language in Section 581.031(17) that confers the agency’s powers and duties. That is, because the statute itself already provided (and continues to provide) unambiguously that the Department has the power and duty to supervise the destruction of a plant if the plant is (1) infested; or (2) suspected of being infested or infected due to its proximity to a known infestation; or (3) reasonably exposed to infestation, a rule that simply repeats or paraphrases these statutorily prescribed categories of plants subject to destruction would serve no useful purpose, and so the legislature, being presumed to have had a useful goal in mind, must have intended that the compulsory, rule-specified “facts and circumstances” be more explicit than the existing statute. As the First District Court of Appeal explained (in describing agencies’ rulemaking authority generally): [Agencies have authority] to “implement or interpret” specific powers and duties contained in the enabling statute. A rule that is used to implement or carry out a directive will necessarily contain language more detailed than that used in the directive itself. Likewise, the use of the term “interpret” suggests that a rule will be more detailed than the applicable enabling statute. There would be no need for interpretation if all the details were contained in the statute itself. Southwest Florida Water Management District v. Save the Manatee Club, Inc., 773 So. 2d 594, 599 (Fla. 1st DCA 2000)(emphasis added). In sum, the legislature plainly intended that the Department “flesh out” the broad legislative policy articulated in Section 581.031(17) by formulating specific facts and circumstances pertinent to citrus canker eradication. In addition to examining the plain statutory language, a complete and accurate understanding of the legislative intent is facilitated by the knowledge that before the 1986 regular legislative session began, the Department had adopted a number of rules prescribing detailed guidelines for citrus canker eradication and treatments. First published, as proposed rules, on January 25, 1985, in Volume 11, Number 4, of the Florida Administrative Weekly, Chapter 5B-49, Florida Administrative Code, consisting of Rules 5B-49.01 through 5B-49.21, took effect on March 6, 1985. See Florida Administrative Weekly, Vol. 11, No. 8, at pg. 663 (Feb. 22, 1985). These rules were published in the 1985 Annual Supplement to the Florida Administrative Code Annotated, Volume 2, Titles 4, 5, which was issued about the time the 1986 legislature convened.17 The legislature is presumed to have been aware of and familiar with these then-existing rules at the time it directed the Department to adopt rules specifying the facts and circumstances that would require the destruction of plants in connection with citrus canker eradication. That the legislature directed the Department to make the rules described in Section 581.184(2), with knowledge that the Department recently had promulgated extensive rules on the very subject of the legislative directive, is telling. Presumably aware of the Department’s then-existing citrus canker rules, the legislature must have determined that those rules did not adequately specify the facts and circumstances that, if present, would require the destruction of plants. This observation is as self-evident as the common-sense converse proposition: If the legislature had been completely satisfied with Chapter 5B-49, Florida Administrative Code, as it existed at the time of the 1986 session, then the rulemaking directive not only would have been unnecessary, but also, by gratuitously ordering the Department to write additional or amended rules where none were needed or wanted, it would have engendered a potential for mischief. It is presumed that the legislature did not intend to put the Department to a pointless task but rather desired that the Department supplement its then-existing rules with missing information that the legislature deemed necessary for inclusion within them. With that in mind, the rules that existed as of the 1986 legislative session stand as a benchmark, for whatever else the legislature meant by “rules specifying facts and circumstances,” it surely meant rules that would set forth the required information with greater clarity and precision than had been done to date (i.e. mid-1986).18 Turning now to the existing rules to determine whether the challenged provisions are valid or not, it will be seen, initially, that Chapter 5B-58, Florida Administrative Code, specifies surprisingly few facts and circumstances that, if present, would require the destruction of plants. There are, to be precise, only two. The first such circumstance is the one most expected: “All citrus trees which are infected or infested shall be removed.” Rule 5B-58.001(5)(a), Florida Administrative Code. The term “infected” is defined as “[h]arboring citrus canker bacteria and expressing visible symptoms.” Rule 5B- 58.001(1)(i), Florida Administrative Code. Thus, in other words, if a knowledgeable person can tell just by looking at a plant that it is suffering from citrus canker infection, that plant will be destroyed. Petitioners have not challenged the provisions dealing with the destruction of visibly infected or infested trees. The other circumstance is found in Rule 5B-58.001(15), Florida Administrative Code, which provides that “[c]itrus plants in containers found in quarantine areas will be confiscated immediately and destroyed without compensation,” unless such storage is authorized under one of two narrow exceptions stated in the same subsection. Petitioners have not challenged these provisions either. The bone of contention, of course, concerns the facts and circumstances under which trees not visibly affected by citrus canker bacteria will be destroyed. On this subject, the existing rule is notably non-committal and evasive. It says, in the fourth sentence of Rule 5B-58.001(5)(a), Florida Administrative Code, that "[t]he decision to remove exposed trees will take into consideration the recommendations of the Citrus Canker Risk Assessment Group." (Emphasis added). Although the rule fails to specify any facts and circumstances that would require the removal of "exposed" trees, the implications are that every "exposed" tree is subject to destruction at the discretion of the Department, and that the Department is inclined to exercise its discretion in favor of destruction.19 The critical term "exposed," which is made to operate through and hence must be read in conjunction with the just- quoted sentence of Rule 5B-58.001(5)(a), is defined in the rule to mean: [1] Determined by the department [2] to likely harbor citrus canker bacteria [3] because of [a] proximity to infected plants, or [b] probable contact with personnel, or regulated articles, or other articles that may have been contaminated with bacteria that cause citrus canker, [4] but not expressing visible symptoms. Rule 5B-58.001(1)(h), Florida Administrative Code (bracketed numbers and letters added). Petitioners complain that this definition constitutes an invalid exercise of delegated legislative authority. They are correct. The rule's definition of "exposed" is constructed of four parts. The first clause——"[d]etermined by the department"——makes plain that the Department is the exclusive arbiter of the evidence, the decision-maker. The second clause is a summary statement of the conclusion that the Department must make and frames the ultimate issue for the Department's determination thusly: whether a plant is likely to harbor citrus canker bacteria. The third part, ushered in by the words "because of," purports to set out the factual premises upon which the Department will base its decision. It consists of two clauses, call them (a) the "proximity clause" and (b) the "probable contact" clause. The fourth and final clause confirms that all plants not visibly suffering from citrus canker (which set consists of all plants not "infected" therewith) are subject to being deemed "exposed." As the introductory words "because of" suggest, the third clause is the only structural component of this definition that could plausibly satisfy the rulemaking directive to specify dispositive facts and circumstances. The others make no genuine attempt. To begin, the first clause plainly does not set forth a specific fact and circumstance that would require the destruction of plants. Continuing, the second clause also does not comply with the directive, for reasons that, while equally compelling, are perhaps less plain. Consider whether, if a person were asked to specify facts and circumstances that, if present, would require a finding of negligence, the following would be responsive: a likely failure to have used reasonable care. The answer obviously is "no," because the statement does not, in and of itself, describe a particular factual scenario that can be perceived by the senses; it reflects, rather, a judgment about facts observed but not specified.20 The same is true of the phrase "likely [to] harbor citrus canker bacteria;" it fails to specify a particular factual occurrence capable of objective observation and instead reflects a judgment about perceivable facts. Skipping over the third part momentarily, the fourth clause, unlike the first two, does express a fact—— but it is not one that, if present without more, would require the destruction of plants. Whether the proximity and probable contact clauses that comprise the "exposed" definition's third part comply with the legislative directive requires a closer look. The starting point is Section 581.184(2), Florida Statutes. When, as here, the statute in question does not contain a specific definition of its terms, it is assumed that the words contained therein were used according to their ordinary dictionary definitions. See Save the Manatee Club, 773 So. 2d at 599 (citing WFTV, Inc. v. Wilken, 675 So. 2d 674 (Fla. 4th DCA 1996)). The ordinary meaning of the verb “specify” is “to name or state explicitly[21] or in detail.” See Merriam-Webster’s Online Collegiate® Dictionary (hereafter Merriam-Webster’s)(http://www.m-w.com/). The term "fact," as used in everyday discourse, denotes “information presented as having objective reality.” Id. "Circumstance" commonly means "a condition, fact, or event accompanying, conditioning, or determining another: an essential or inevitable concomitant." Id. Putting these common definitions of ordinary words together, it becomes apparent that the directive in Section 581.184(2), Florida Statutes——to "specify[] facts and circumstances"——requires the Department to state explicitly, that is, with clarity and precision and thus without vagueness or room for doubt, particular pieces of information having objective reality (i.e. that describe perceivable scenarios) which, if found to exist in the real world, will require the destruction of plants. Against this statutory backdrop the subject definition's shortcomings stand out in bold relief. The phrase “proximity to infected plants” does not have intrinsic objective reality; it does not, without more, communicate information that is observable, provable, or falsifiable; it is not, therefore, a “fact.”22 While the phrase may, in a loose sense, describe a “circumstance,” it cannot seriously be contended that “proximity to infected plants” is meaningfully precise or explicit, as the statute requires; in fact, it is neither, being instead both elastic and malleable, an empty vessel for the Department to fill with content at its sole discretion. Indeed, for all that appears in the rule, “proximity” might be ten (or 1900) feet, or ten miles, or ten thousand miles, depending on the unstated facts and circumstances. At bottom, a conclusion of “proximity to infected plants” constitutes a subjective judgment or opinion that must be based upon objective facts and circumstances, in the same way that the judgment whether a plant is "likely [to] harbor citrus canker bacteria" also requires a factual foundation upon which to rest. The puzzle piece missing from the existing rule is the description of facts and circumstances that, if present, would require that conclusions of "proximity"——and hence "likelihood"——be drawn. The definition allows the Department to reach the ultimate conclusion ("likely [to] harbor citrus canker bacteria") based upon an opinion ("proximity to infected plants") grounded upon unspecified facts and circumstances. This deficiency is fatal to the rule’s validity. The probable contact clause contains greater detail but is likewise defective. It says that the Department may consider a plant "exposed" if the plant has probably come into contact with a possibly contaminated person or thing. The problem with this provision is that it is vague and leaves too much unsaid; it fails to set forth facts and circumstances upon which the Department will base determinations of probable contact and possible contamination. It does not, in short, "specify[] facts and circumstances that, if present, would require the destruction of plants," as required by Section 581.184(2), Florida Statutes. In view of these flaws in the definition of "exposed," it is evident that, while the Department has announced in Rule 5B-58.001(5)(a) its intent and power to destroy potentially all trees that are not visibly affected by citrus canker bacteria, it has failed to specify the facts and circumstances under which it will remove such trees, despite a clear legislative directive to articulate those facts and circumstances, precisely and in detail, in its rules. Instead of submitting itself to pre- determined guidelines of its own making, as directed by the legislature, the Department has promulgated a rule that, with regard to “exposed” trees, retains maximum——indeed, essentially unfettered——discretion. The plainest and most egregious example of this is the proximity clause. Nothing in the existing rules would prevent the Department from declaring that the entire state of Florida is exposed to citrus canker because of proximity to infected plants and thereupon commencing to destroy every fruit tree in the state. As the plain language of Section 581.184(2), Florida Statutes, makes clear, the legislature intended and expected a more explicit and informative rule. Contrary to the legislative directive, the rule’s definition of “exposed,” as well as the fourth sentence of Rule 5B-58.001(5)(a), Florida Administrative Code, which expresses the Department’s intent to destroy some or all “exposed” trees (but only after listening to the Risk Assessment Group’s non-binding recommendations), do nothing whatsoever to “flesh out” Section 581.031(17), Florida Statutes. At best, the Department has merely restated its statutory duty to oversee the destruction of plants “located in an area which may be suspected of being infested or infected due to its proximity to a known infestation” or "reasonably exposed to infestation." Id. This is inadequate.23 Reinforcing these conclusions is an examination of the citrus canker rules that were in effect at the time the legislature enacted the law that is now codified at Section 581.184(2), Florida Statutes. As it existed in mid-1986, Chapter 5B-49, Florida Administrative Code, was far more detailed and explicit regarding the facts and circumstances under which plants would be destroyed than is the present rule. See, e.g., Rules 5B-49.09 (provisions for eradication of citrus canker); 5B-49.10 (requirements for greenhouses, slathouses, shadehouses or bench-growing facilities); 5B-49.11 (requirements for ornamental nurseries, dooryard citrus nurseries, stock dealers or agents); 5B-49.13 (requirements for public and private properties not considered to be commercial citrus groves, nurseries, stock dealers, or agent establishments), Florida Administrative Code Annotated, Vol. 2, pp. 167-69 (1985 Supp.) These rules even contained a precursor to the unpromulgated 1900-foot radius policy now under attack: a 125- foot radius rule that applied under certain circumstances. See, e.g., Rules 5B-49.09(2)(b); 5B-49.11(1), Florida Administrative Code Annotated, Vol. 2, pp. 167-68 (1985 Supp.). These relatively detailed citrus canker rules were already in effect when the legislature directed the Department to make rules specifying facts and circumstances that would require the destruction of plants. From that it can only be presumed that the legislature wanted more detailed rules on the subject of plant destruction. By any reasonable measure, however, existing Chapter 5B-58, Florida Administrative Code, is less detailed and explicit than the citrus canker rules which the legislature, by directing the adoption of specific rules, implicitly deemed imprecise. This confirms the conclusion that existing Rule 5B-58.001, as it relates to the destruction of “exposed” plants, fails to satisfy the legislative directive to make particular citrus canker rules. The existing rule is not saved by its enumeration of two dozen or so “variables” that the Risk Assessment Group is supposed to consider in formulating its non-binding recommendation to the Department whether to remove “exposed” trees. Rule 5B-58.001(5)(a) states, in pertinent part: In developing [its] recommendations, the Citrus Canker Risk Assessment Group will take the following variables into consideration: property type, cultivar, cultivar susceptibility, tree size and age, size of block, tree spacing, horticultural condition, tree distribution, tree density, weather events, wind breaks, movement factors, disease strain, exposure, infection age, infection distribution, disease incidence, Asian citrus leafminer damage, survey access, security of property, sanitation, management practices, closeness of other host properties, and closeness of other infected properties. These “variables” provide at most a patina of precision. On inspection, it is clear that the rule merely sets forth a laundry list of potentially relevant factors that conveys little more information than if the rule had simply stated that the Risk Assessment Group will consider all pertinent data. Moreover, Section 581.184(2) requires dispositive “facts and circumstances,” not “variables” for consideration. Listing two dozen unweighted factors for an agency-appointed committee to consider in making a non-binding recommendation is a far cry from “specifying facts and circumstances that, if present, would require the destruction of plants for purposes of eradicating . . . citrus canker[.]” Section 581.184(2), Florida Statutes. Finally, and most important, the Risk Assessment Group is not the Department, and its recommendations, according to Rule 5B-58.001(5)(a), need only be “take[n] into consideration” by the Department in making a decision whether to order the destruction of an “exposed” tree. The Rule pointedly does not require the Department to consider the “variables” (or any other objective criteria) either in determining whether a tree is "exposed" or in deciding to remove an "exposed" tree. The bottom line is that the risk assessment provisions and the definition of "exposed," taken together, do not communicate the information required by Section 581.184(2), Florida Statutes, with anything approaching the intended clarity, precision, and detail. In connection with “exposed” trees (a set that potentially includes all citrus trees in the state that are not visibly affected by citrus canker bacteria), the Department has failed to implement its citrus canker eradication program according to the kind of specific rules that the legislature intended be in place. For that reason, the enabling statutes do not authorize either Rule 5B-58.001(1)(h) or the fourth sentence of Rule 5B-58.001(5)(a), Florida Administrative Code, which implements the “exposed” definition.24 Accordingly, these provisions are invalid exercises of delegated legislative authority. See Section 120.52(8)(b), Florida Statutes. In addition to being unauthorized by the enabling statutes, the fourth sentence of Rule 5B-58.001(5)(a), Florida Administrative Code, is invalid for an independent reason: it “fails to establish adequate standards for agency decisions, [and] vests unbridled discretion in the agency.” Section 120.52(8)(d), Florida Statutes. The leading case on rule-engendered standardless discretion is Cortes v. State Board of Regents, 655 So. 2d 132 (Fla. 1st DCA 1995). There, a rule was challenged that granted university presidents not only (1) the exclusive power to decide, upon being presented with a petition signed by at least a majority of the student body requesting such action, whether to authorize the collection of fees for funding "public interest research groups," but also (2) the "sole discretion" to determine by which of two rule-prescribed means students would be required to assent to the fee, if approved: either a positive checkoff or a negative checkoff on the registration card. Id. at 135. The court held that the enabling statutes authorized the rule to the extent it empowered university presidents to decide, in the first instance, whether to allow the collection of such student fees at their respective institutions. Id. at 140. The court reached a different conclusion, however, regarding the rule's grant of unbridled presidential discretion to decide between the two different methods of obtaining students' consent to pay the fee. The court's analysis is instructive and warrants a lengthy quotation: In one respect, however, the challenged rule itself confers unguided discretion on university presidents that they did not have before the rule was promulgated, viz., the "sole discretion" to decide between a "positive checkoff" and a "negative checkoff." While student contributions are no novelty as a source of funds for student activities, the rule calls certain mechanics into being. Until the rule was adopted, university presidents had no need to choose between "positive" and "negative checkoffs," which [the rule] now requires, under circumstances specified in the rule. An administrative rule which creates discretion not articulated in the statute it implements must specify the basis on which the discretion is to be exercised. Otherwise the "lack of . . . standards . . . for the exercise of discretion vested under the . . . rule renders it incapable of understanding . . . and incapable of application in a manner susceptible of review." Staten v. Couch, 507 So. 2d 702 (Fla. 1st DCA 1987). Because a reviewing "court shall not substitute its judgment for that of the agency on an issue of discretion," § 120.68(12), Fla. Stat. (1993), an agency rule that confers standardless discretion insulates agency action from judicial scrutiny. By statute, a rule or part of a rule which "fails to establish adequate standards for agency decisions, or vests unbridled discretion in the agency," § 120.52(8)(d), Fla. Stat. (1983), is invalid. * * * [T]he rule [under review] "fails to establish adequate standards for agency decisions," . . . for or against employing the "negative checkoff," i.e., collecting "donations" from registering students unless they expressly decline to contribute. In this one respect, [the challenged rule] itself "vests unbridled discretion in the agency." [The challenged rule] is devoid of any standards purporting to guide this exercise of discretion. No such standards are implicit in the statutes implemented. Even students who have signed a petition will not necessarily be alerted that a "negative checkoff" choice must be made when they register for classes. [The rule] supplies no principled basis on which a university president can decide whether a registering student's failure to indicate otherwise should be taken as a decision to contribute to the funding of a public interest research organization. No statute creates the "negative checkoff" device or requires that it be sprung on entering freshmen or other unwary registrants. Id. at 138-39; see also Florida Public Service Commission v. Florida Waterworks Association, 731 So. 2d 836, 843 (Fla. 1st DCA 1999)(distinguishing Cortes and upholding proposed rule against attack because, unlike the rule in Cortes, it did not create discretion not articulated in the enabling statute). In Cortes, the court invalidated the negative checkoff option, and thereby effectively eliminated the rule's unlawful delegation of unfettered discretion. Cortes, 655 So. 2d at 140. Like the rule at issue in Cortes, sentence number four in Rule 5B-58.001(5)(a), Florida Administrative Code, confers unguided discretion on the Department that it did not have before the rule was promulgated, namely, the discretion to accept or reject the Risk Assessment Group's recommendations concerning whether to destroy "exposed" trees. Similar to the negative checkoff device, no statute creates the Risk Assessment Group or requires the Department to consider that committee's recommendations. Just as the board in Cortez created by rule discretion for university presidents that was not articulated in the enabling statute, so too the Department, having created the Risk Assessment Group and devised a non-binding risk assessment process, has conferred upon itself a new and exclusively rule- based discretionary power. Consequently, to be valid, the Department's Rule must specify the bases upon which the newly-created discretion is to be exercised. See Section 120,52(8)(d), Florida Statutes. The existing Rule is devoid of standards purporting to guide this exercise of discretion, however, and no standards are implicit in the enabling statutes. The Rule supplies no principled basis on which the Department can decide, for example, whether to override the Risk Assessment Group's recommendation that a tree be spared or, conversely, to reject its advice that a tree be cut down. The fourth sentence of Rule 5B-58.001(5)(a) must be invalidated because it confers standardless discretion and thereby unlawfully insulates the Department from judicial scrutiny. Cortes, 655 So. 2d at 138. This unlawful grant of discretion is particularly troublesome in light of the context in which it is exercised. The Department wields its power to destroy trees in furtherance of the Eradication Program pursuant to immediate final orders premised on the conclusion that the targeted trees are a source of immediate public danger. Because the exigency of the situation precludes the development of a traditional trial-level record, appellate review is somewhat limited, as the first district explained: When an agency enters an immediate final order as a result of a determination that there exists an immediate danger to the public health, safety, or welfare, [appellate] review will determine whether the order recites with particularity the facts underlying such finding. Denney v. Conner, 462 So. 2d 534, 535-36 (Fla. 1st DCA 1985); see also Nordmann v. Florida Department of Agriculture and Consumer Services, 473 So. 2d 278, 279 (Fla. 5th DCA 1985)("Appellate review centers on the particularity with which the order recites the factual findings"). Plainly, the Department is shielded from searching judicial review simply by virtue of the type of decision it is making——and that shield would remain difficult to penetrate even if the rule were filled with adequate standards to guide the agency's discretion. The existing Rule's conspicuous failure to specify the bases upon which the Department's extraordinarily broad discretion in these matters is to be exercised, however, results, intolerably, in the Department being doubly insulated from judicial scrutiny, to the point of being practically immune. The absence of meaningful appellate review in these circumstances led an obviously fed-up panel of the Third District Court of Appeal to vent its frustration recently in Markus v. Florida Department of Agriculture and Consumer Services, 785 So. 2d 595 (Fla. 3d DCA 2001), a homeowners' appeal from an immediate final order pursuant to which their three fruit trees were destroyed. In a seething opinion, the court wrote: Property owners as well as judicial tribunals are struggling with the issue of how and why the Department of Agriculture embarked on its dogged obliteration of the healthy back (or front) yard citrus tree. The frustrations of challenging this policy, either in a Chapter 120 proceeding or before this court, are staggering. Both infected and condemned trees are removed and ground into dust before any meaningful action can be taken by the property owner. The "final agency order" is nothing but a "Dear Resident" form from the Department of Agriculture. A "record on appeal" is an oxymoron. There is no record. Hence there is no meaningful appeal. We find that situation unacceptable as a mater of law, policy, and principle, yet we must affirm. Id. at 596 (emphasis added). Requiring the Department to promulgate rules setting forth principled grounds upon which to exercise its considerable discretion whether to follow the Risk Assessment Group's recommendations will provide meaningful opportunities, through the rulemaking and rule challenge procedures, for public comment and input, legislative oversight, and, ultimately, judicial scrutiny, based on a complete evidentiary record developed in a Chapter 120 proceeding, of the Department's heretofore hidden factual and policy premises. Such vehicles for accountability are the very least the law should (and does) demand of an executive branch agency that has been vested with enormous discretion to implement a program capable of summarily depriving large numbers of citizens of their private property. The Rule-By-Definition The burden of proof is on the party seeking to prove the affirmative of an issue unless a statute provides otherwise. Florida Department of Transportation v. J.W.C. Company, Inc., 396 So. 2d 778, 786-87 (Fla. 1st DCA 1981). In a proceeding under Section 120.56(4) to determine a violation of Section 120.54(1)(a), Florida Statutes, therefore, the burden is on the petitioner to establish by a preponderance of evidence: (1) the substance of the agency statement; (2) facts sufficient to show that the statement constitutes a rule-by-definition; and (3) that the agency has not adopted the statement according to the rulemaking procedures. Section 120.56(4)(a), Florida Statutes. If the petitioner meets its burden, then the agency must carry the burden of proving that rulemaking is not feasible and practicable as provided in Section 120.54(1)(a). Section 120.56(4)(b), Florida Statutes. Section 120.52(15), Florida Statutes, defines the term “rule” to mean “each agency statement of general applicability that implements, interprets, or prescribes law or policy or describes the procedure or practice requirements of an agency and includes any form which imposes any requirement or solicits any information not specifically required by statute or by an existing rule.” A statement is a rule if it has the effect of a rule regardless whether the agency calls it a rule. In determining whether a statement meets the statutory definition of a rule, the important question is: What consequences does this statement cause within its field of operation? As the Court of Appeal, First District, explained, the breadth of the definition in Section 120.52(1[5]) indicates that the legislature intended the term to cover a great variety of agency statements regardless of how the agency designates them. Any agency statement is a rule if it "purports in and of itself to create certain rights and adversely affect others," [State Department of Administration v.] Stevens, 344 So. 2d [290,] 296 [(Fla. 1st DCA 1977)], or serves "by [its] own effect to create rights, or to require compliance, or otherwise to have the direct and consistent effect of law." McDonald v. Dep't of Banking & Fin., 346 So. 2d 569, 581 (Fla. 1st DCA 1977). State Department of Administration v. Harvey, 356 So. 2d 323, 325 (Fla. 1st DCA 1978); see also Amos v. Department of Health and Rehabilitative Services, 444 So. 2d 43, 46 (Fla. 1st DCA 1983). Because the focus is on effect rather than form, a statement need not be in writing to be a rule-by-definition. See Department of Highway Safety and Motor Vehicles v. Schluter, 705 So. 2d 81, 84 (Fla. 1st DCA 1998). Given the circumstances of this case, it is instructive to take special note that the definition of “rule” expressly includes statements of general applicability that implement or interpret law. An agency’s interpretation of a statute that gives the statute a meaning not readily apparent from its literal reading and purports to create rights, require compliance, or otherwise have the direct and consistent effect of law, is a rule. See Beverly Enterprises-Florida, Inc. v. Department of Health and Rehabilitative Services, 573 So. 2d 19, 22 (Fla. 1st DCA 1990); St. Francis Hospital, Inc. v. Department of Health and Rehabilitative Services, 553 So. 2d 1351, 1354 (Fla. 1st DCA 1989). As set forth in the Findings of Fact, Petitioners have proved, by the required quantum of evidence, that the Department adopted and has implemented a statement of general applicability which has been denominated herein, for convenience, the PRZ Policy.25 The PRZ Policy is, ironically, the kind of rule that Section 581.184(2), Florida Statutes, requires, because (unlike the Department's adopted rules) it specifies facts and circumstances that, if present, would require the destruction of asymptomatic plants for purposes of eradicating citrus canker. That the PRZ Policy includes an exception under which some trees within the Presumptive Removal Zone might be spared does not diminish its general applicability or dampen its effect, which is that of a rule. Rules often have exceptions; there is nothing novel about that, just as there is nothing extraordinary about rule provisions, such as the PRZ Policy's exception, that authorize a discretionary act.26 In addition, the PRZ Policy implements, and constitutes the Department's interpretation of, Section 581.031(17), Florida Statutes, bringing rigor to the inexact statutory phrase: "area which may be suspected of being infested or infected due to its proximity to a known infestation." The wisdom of this interpretation is not presently before the undersigned. The unavoidable conclusion regarding this interpretation, however, is that it gives the statute a meaning which is not readily apparent from a literal reading thereof and, moreover, requires compliance, adversely affects the rights of property owners, and has the direct and consistent effect of law. In sum, the PRZ Policy falls squarely within the meaning of the term "rule" as defined in Section 120.52(1); it is, put simply, a rule-by-definition. According to Section 120.54(1)(a), “[r]ulemaking is not a matter of agency discretion. Each agency statement defined as a rule by s. 120.52 [such as the PRZ Policy] shall be adopted by the rulemaking procedure provided by this section as soon as feasible and practicable.” (Emphasis added). Once Petitioners met their obligation at hearing to prove that the challenged statement is a rule-by-definition, it became the Department’s burden to prove that adopting the PRZ Policy as a rule would have been either unfeasible or impracticable. Section 120.56(4)(b), Florida Statutes. The Department failed to rebut by a preponderance of evidence the presumption, established in Section 120.54(1)(a)2., Florida Statutes, that rulemaking is practicable. Accordingly, it has been presumed that rulemaking was in fact practicable as of January 1, 2000, when the PRZ Policy took effect. In contrast, the Department did prove that it is currently using the rulemaking process expeditiously and in good faith to adopt rules that articulate the PRZ Policy in part, as discussed below. Thus, in accordance with Section 120.54(1)(a)1.c., Florida Statutes, the Department arguably rebutted the statutory prescription that rulemaking "shall be presumed feasible." The Proposed Amendments to Chapter 5B-58, Florida Administrative Code, effectively incorporate so much of the PRZ Policy as deems trees within a 1900-foot radius of an infected tree to be "exposed" (or, in the proposed rule's terminology, "exposed to infection") and hence subject to destruction. The Proposed Amendments do not, however, address that part of the PRZ Policy which requires the destruction of all trees located within the Presumptive Removal Zone except those designated by the Commissioner as posing a less-than-imminent danger. Indeed, the invalid fourth sentence of Rule 5B- 58.001(5) would subsist substantially intact, save only for the substitution of the term "exposed to infection" for "exposed," after adoption of the Proposed Amendments. Thus, the Proposed Amendments are silent on a crucial aspect of the PRZ Policy. To rebut the presumption of feasibility pursuant to Section 120.54(1)(a)1.c., Florida Statutes, an agency must show that it "is currently using the rulemaking procedure expeditiously and in good faith to adopt rules which address the statement." Whether an agency that it is actively attempting to adopt rules which address some portion of a rule-by-definition, as the Department is doing, should be found to have rebutted the presumption of feasibility is the question. Guidance on this issue is found in a closely related statutory provision, Section 120.56(4)(e), Florida Statutes, which provides in relevant part: Prior to entry of a final order that all or part of an agency statement violates s. 120.54(1)(a), if an agency publishes, pursuant to s. 120.54(3)(a), proposed rules which address the statement and proceeds expeditiously and in good faith to adopt rules which address the statement, the agency shall be permitted to rely upon the statement or a substantially similar statement as a basis for agency action if the statement meets the requirements of s. 120.57(1)(e). (Emphasis added). The "substantially similar" statement upon which an agency in such circumstances is permitted to rely should be found, presumably, within its proposed rules. (Why should the agency be allowed to apply a third variation on the same theme?) Sections 120.54(1)(a)1.c. and 120.56(4)(e), being in pari materia, should be construed together to achieve a unified legislative purpose. Accordingly, it is concluded that, for a proposed rule to "address" an agency statement for purposes of Section 120.54(1)(a)1.c., it must be, if not identical, at least "substantially similar" to the statement. The proposed revisions to Chapter 5B-58.001, Florida Administrative Code, do not, taken as a whole, constitute a statement "substantially similar" to the PRZ Policy. The missing component——which specifies the requirement that trees in the Presumptive Removal Zone be destroyed unless exempted by the Commissioner's discretionary act——is fundamental to the rule-by- definition. Without it, the Proposed Amendments fail to articulate——to "address"——the Department's generally applicable policy. As a result, the Department has failed to rebut the presumption of feasibility. The outcome would be the same, however, even if the Department were given the benefit of a decision that its proposed rule revisions "address" the challenged agency statement for purposes of Section 120.54(1)(a)1.c., Florida Statutes. The reason is that, in this alternative ruling, all the Department has done is erase the presumption of feasibility to which Petitioners otherwise would be entitled in aid of their proof. Evidence that an agency is currently engaged in rulemaking with regard to a statement is not, without more than the Department showed, the equivalent of proof that the agency began the rulemaking process as soon as feasible.27 And an agency that belatedly has commenced rulemaking on a statement of general applicability is no less in violation of Section 120.54(1)(a), Florida Statutes, than one that has not begun at all——although the consequences of a violation may be less severe for the dilatory, as opposed to the recalcitrant, agency. See Section 120.54(4)(e), Florida Statutes. Naturally, however, without the benefit of the presumption, the burden returns to the challenger to establish that the agency failed to timely (i.e. as soon as feasible) begin to adopt the statement as a rule.28 In this case, the evidence showed that the Department feasibly could have started to adopt the PRZ Policy as a rule as early as December 1999, if not sooner. It is concluded that rulemaking was feasible as of, and not later than, January 1, 2000, the date upon which the PRZ Policy took effect.29 In short, the Department's current rulemaking efforts are not only too little for it to benefit from Section 120.54(1)(a)1.c., Florida Statutes, but also come too late to avoid a finding that Section 120.54(1)(a) has been violated. Consequently, it is concluded that the Department has violated Section 120.54(1)(a), Florida Statutes, in connection with the PRZ Policy. Attorneys’ Fees and Costs Section 120.595(4)(a), Florida Statutes, provides that “[u]pon entry of a final order that all or part of an agency statement violates s. 120.54(1)(a), the administrative law judge shall award reasonable costs and reasonable attorneys' fees to the petitioner, unless the agency demonstrates that the statement is required by the Federal Government to implement or retain a delegated or approved program or to meet a condition to receipt of federal funds." The Department has not proved the applicability of an exception to the mandate that attorneys’ fees and costs be awarded to the successful petitioner in a Section 120.56(4) proceeding. Accordingly, it is hereby determined that Petitioners are entitled to recover a reasonable sum for the attorneys’ fees and costs they have incurred in the prosecution of this action. The amount of the award shall be determined by separate order.
The Issue Whether Respondent, C & J Fruit and Melons, Inc. (C & J Fruit), a citrus fruit dealer and registered packer, owes Petitioner, John Stephens, Inc., a citrus dealer, a sum of money for grapefruit and oranges sold and delivered to C & J Fruit's citrus fruit-packing house for processing.
Findings Of Fact Petitioner, John Stephens, Inc., is a Florida-licensed citrus fruit dealer operating within the Department of Agriculture and Consumer Services' regulatory jurisdiction. Respondent, C & J Fruit & Melons, Inc., was a Florida- licensed citrus fruit dealer and operated a registered packing house in Frostproof, Florida, during the 2001-2002 citrus shipping season. Respondent, Auto Owners Insurance, was the surety for C & J Fruit's citrus fruit dealer's license in the amount of $14,000.00, for the 2001-2002 season. At the beginning of the 2001-2002 season, Petitioner and C & J Fruit entered into a verbal contract under which Petitioner agreed to contract with various grove owners and grove harvesters in the Polk County, Florida, area. The understanding was that Petitioner would obtain various varieties of grapefruit, oranges, and tangerines from the growers and harvesters and deliver the fruit to C & J Fruit's packing house. Petitioner was responsible for payment to the grove owners and harvesters. C & J Fruit would process the fruit, supply the citrus fruit to retail and wholesale suppliers, and account and pay for the fruit received from Petitioner. Petitioner and C & J Fruit had conducted business in this fashion for many years prior to this season. On October 23, 2001, C & J Fruit sought protection from creditors under Chapter 11 of the United States Bankruptcy Code in the U.S. Bankruptcy Court, Middle District of Florida, Tampa Division, Case No. 01-19821-8W1. Following the filing of bankruptcy, no other supplier would provide C & J Fruit with citrus fruit. With Petitioner's consent, C & J Fruit filed an emergency motion to authorize a secured interest to Petitioner, if it would continue to supply C & J Fruit's packing house with fruit. The bankruptcy court granted the motion, and in November 2001, Petitioner began supplying C & J Fruit's packing house with fresh citrus fruit. The preponderance of evidence proves that Petitioner delivered to C & J Fruit's packing house during November 2001 pursuant to the contract: 540 boxes of grapefruit at $3.00 per box for a total of $1,620.00; 3,044 boxes of oranges at $4.00 per box for a total of $12,176.00; 330 boxes of tangerines at $3.50 per box for a total of $1,155.00; and 1,953 boxes of navel oranges at $2.00 per box for a total of $3,906.00. C & J Fruit was billed for this amount. Accordingly, C & J Fruit was obligated to pay Petitioner the total sum of $18,857.00 for the fruit. When payment was not received in a timely matter, shipment of citrus fruit to the packing house was discontinued. Petitioner performed all of its duties under the contract, and C & J Fruit failed to pay or account for the citrus fruit delivered to its packing house under the terms of the contract. C & J Fruit is, therefore, indebted to Petitioner in the amount of $18,857.00
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that a final order be entered requiring Respondent, C & J Fruit and Melons, Inc., to pay to Petitioner, John Stephens, Inc., the sum of $18,857.00. DONE AND ENTERED this 29th day of December, 2004, in Tallahassee, Leon County, Florida. S DANIEL M. KILBRIDE Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 29th day of December, 2004. COPIES FURNISHED: Brenda D. Hyatt, Bureau Chief Bureau of License and Bond Department of Agriculture and Consumer Services 407 South Calhoun Street, Mail Station 38 Tallahassee, Florida 32399-0800 Honorable Charles H. Bronson Commissioner of Agriculture and Consumer Services The Capitol, Plaza Level 10 Tallahassee, Florida 32399-0810 Richard D. Tritschler, General Counsel Department of Agriculture and Consumer Services The Capitol, Plaza Level 10 Tallahassee, Florida 32399-0810 Clemon Browne, President C & J Fruit & Melons, Inc. Post Office Box 130 Lake Hamilton, Florida 33851-0130 John A. Stephens John Stephens, Inc. Post Office Box 1098 Fort Meade, Florida 33841 Jason Lowe, Esquire GrayRobinson, P.A. Post Office Box 3 Lakeland, Florida 33802
The Issue The 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 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.
The Issue Whether Sunny Fresh Citrus Export and Sales, Co., LLC, is liable to Petitioner in the amount of $44,032.00 for delivery of fruit which remains unpaid.
Findings Of Fact Petitioner, DP Partners, Ltd. (Partners), is a Florida Limited Partnership located in Lake Placid, Florida, engaged in the business of citrus production. Daniel H. Phypers and Danielle Phypers Daum, brother and sister, and their father Drew Phypers, are limited partners in the business. Respondent, Sunny Fresh Citrus Export and Sales Co., LLC, (the LLC) is a Florida Limited Liability Company headquartered in Vero Beach, Florida, engaged in the business of exporting citrus for retail sale. The LLC was organized and registered with the State of Florida Division of Corporations on November 3, 2011. The members of the LLC are Kelly Marinaro and Jean Marinaro, husband and wife. Kelly Marinaro (Marinaro) formerly conducted business in the name of Sunny Fresh Citrus Export and Sales Co. (the DBA), a fictitious-name entity registered with the Florida Department of State, Division of Corporations, on October 23, 2007. The fictitious-name entity registration expired on December 31, 2012. Marinaro suffered a massive heart attack in November 2011 and was incapacitated. He did not return to work until the Spring of 2013. On November 4, 2011, after suffering the heart attack, and one day after organizing and registering the LLC, Marinaro conveyed durable power of attorney to Joseph Paladin (Paladin) as his Agent. Among the authority granted to Paladin, was the following: 2. To enter into binding contracts on my behalf and to sign, endorse and execute any written agreement and document necessary to enter into such contract and/or agreement, including but not limited to . . . contracts, covenants . . . and other debts and obligations and such other instruments in writing of whatever kind and nature as may be. * * * 9. To open, maintain and/or close bank accounts, including, but not limited to, checking accounts . . . to conduct business with any banking or financial institution with respect to any of my accounts, including, but not limited to, making deposits and withdrawals, negotiating or endorsing any checks . . . payable to me by any person, firm, corporation or political entity[.] * * * 12. To maintain and operate any business that I currently own or have an interest in or may own or have an interest in, in the future. In Marinaro’s absence, Paladin conducted the usual affairs of the business, including entering into contracts to purchase citrus from several growers. On October 19, 2012, Paladin entered into contract number 2033 with Partners to purchase approximately 6000 boxes of Murcots (a tangerine variety) at $12.00 per box.2/ The contract is signed by Paladin as the Agent of “Sunny Fresh Citrus Export & Sales Company, Licensed Citrus Fruit Dealer (Buyer).” On December 13, 2012, Sunny Fresh entered into contract number 2051 with Partners to purchase Hamlins (a different fruit variety) at $6.50 per box.3/ The contract price was for citrus “on the tree,” meaning it was the buyer’s responsibility to harvest the citrus. The contract is signed by Paladin as the Agent of “Sunny Fresh Citrus Export & Sales Company, Licensed Citrus Fruit Dealer (Buyer).” (Contract 2033 and 2051 are hereinafter referred to collectively as “the contracts”.) The contracts were prepared on pre-printed forms used by Marinaro’s businesses pre-dating Paladin’s involvement. The contract form is titled as follows: Citrus Purchase Contract & Agreement Sunny Fresh Citrus Export & Sales Company Cash Fruit Crop Buyer 2101 15th Avenue Vero Beach, Florida 32960 Paladin testified that he was not aware of more than one company for Marinaro’s fruit-dealing business. He testified that he was not aware of any difference between Sunny Fresh Citrus Export and Sales Company and Sunny Fresh Citrus Export and Sales Co., LLC. Paladin was not aware of when the LLC was created. Paladin’s testimony is accepted as credible and reliable. Paladin testified that his intent was to enter into the contracts for the benefit of “Sunny Fresh.” “Sunny Fresh,” written in twelve-point bold red letters over an image of the sun in yellow outlined in red, is a trademark registered with the Florida Division of Corporations. Marinaro first registered the trademark in February 1998. In his trademark application, Marinaro entered the applicant’s name as “Kelly Marinaro D/B/A Sunny Fresh Citrus.” Marinaro renewed the trademark registration in 2007. Marinaro testified that the “Sunny Fresh” trademark is “owned by the LLC.” On February 20, 2012, Paladin, Marinaro and a third partner, Gary Parris, formed another company, Sunny Fresh Packing, LLC, the purpose of which was to run a fruit-packing house in Okeechobee, Florida. Equipment for the packing house was obtained from a packing house in Ft. Pierce, Florida, which was indebted to Marinaro, in some capacity, and went “belly up.” In March 2013, the Okeechobee packing house was struck by lightning. Shortly after the lightning strike, Marinaro, Paladin, and Mr. Parris, signed a letter addressed “To our valued Growers.” The letter explained that, due to both the lightning strike, which shorted out all computers and electrical components at the packing house, and reduced demand for product due to severe weather in the northeastern United States, they had made a “business decision to end the year now and prepare for next year.” The letter further explained that, “rather than spending thousands of dollars all at once, we feel, it makes better sense to use our cash flow to pay our growers first . . . . We will be sending out checks every week or every other week until everyone is paid or until we receive supplemental cash infusions that we are working on. In that case we would just pay everyone in full, from that.” The letter was prepared on letterhead bearing the “Sunny Fresh” trademark logo. Paladin made a number of payments to Partners on the contracts during 2012 and 2013. Each check shows payor name as “Sunny Fresh” with an address of 2101 15th Avenue, Vero Beach, Florida 32960. Mr. Phypers met with Paladin a number of times to collect checks and understood that Paladin was making concerted efforts to pay all the growers. However, Partners did not receive full payment on the contracts. Paladin drafted a Release of Invoices Agreement (Agreement) by which creditor growers could receive partial payment on their outstanding contracts in exchange for a full release of liability from the buyer. The Agreement lists the following entities and persons as being released from liability: “Sunny Fresh Packing, LLC”; “Sunny Fresh Citrus Export and Sales Co., LLC”; and Kelly Marinaro. Paladin presented the Agreement to Partners with an offer to pay $36,449.45 in consideration for signing the Agreement. Partners did not sign the Agreement. The parties stipulated that the amount owed Partners under both contracts is $44,032.00. Respondent contends that Petitioner’s claim is filed against the wrong business entity. Respondent argues that Petitioner’s contracts were with the DBA, and that Petitioner’s claim is incorrectly brought against the LLC. Thus, Respondent reasons, the LLC is not liable to Petitioner for the monies owed. The DBA was registered with the State of Florida in 2007 and held an active fruit dealer’s license through July 31, 2012. Marinaro owned and operated the DBA at 2101 15th Avenue, Vero Beach, Florida 32960. The DBA filed a citrus fruit dealer’s bond with the Department of Agriculture for the 2008-2009 shipping season. Marinaro registered the trademark “Sunny Fresh” logo in the name of the DBA in 2007, and was still using the logo on his business letterhead in 2013. Marinaro formed the LLC in 2011, which holds an active citrus fruit dealer’s license. Marinaro and his wife, Jean, are the only members of the LLC. The principal address is 2101 15th Avenue, Vero Beach, Florida 32960. The LLC filed citrus fruit dealer’s bonds with the Department of Agriculture on June 28, 2012, for the shipping season ending July 31, 2013, and on May 2, 2013, for the shipping season ending July 31, 2014. Marinaro did not refile a bond for the DBA after forming the LLC. At all times relevant hereto, Marinaro’s fruit dealer’s business has been physically located at 2101 15th Avenue, Vero Beach, Florida 32960. The building at that address bears the name “Sunny Fresh.” Marinaro testified that he formed the LLC shortly after his heart attack to “protect his personal assets.” Marinaro explained that he had little revenue in the LLC “for the next two years,” and he planned for the LLC to conduct sales for the packing company. He expected the LLC would be purchasing fruit from other packing houses. In fact, he testified that, during his absence, he was not aware that either the DBA or the LLC were purchasing fruit. Marinaro was clearly upset about the financial state of his business when he resumed control in the Spring of 2013. He testified that, prior to his heart attack, he was running a business with a typical $10 to $12 million yearly revenue, but that he returned to a business in debt to the tune of roughly $790,000.00. Marinaro lamented that Paladin entered into contracts to buy citrus when that was not the plan for the LLC. Alternately, he blamed Paladin for taking too much money out of the LLC to set up the packing house. Marinaro’s testimony was inconsistent and unreliable. He first testified that Paladin had full authority to purchase fruit in his absence, but later professed to be “dismayed” that his company was purchasing fruit in his absence. The evidence does not support a finding that the LLC was formed for any reason other than to continue his fruit dealings in a legal structure that would protect his personal assets. Marinaro’s explanation that the purpose of the LLC was to conduct sales for the packing company also lacks credibility. The LLC was organized in November 2011, but the packing house in Ft. Pierce from which he acquired the equipment to set up a packing house in Okeechobee did not go “belly up” until February 2012. Marinaro would have had to be clairvoyant to set up an LLC for the sole purpose of sales to a packing house about which he was not aware until four months later. Marinaro’s testimony that he was in the dark about the running of his business and that he was somehow duped by Paladin is likewise unreliable. Marinaro testified that, during his absence, he was “concerned that Paladin was entering into contracts where a bond was required, but not secured.”4/ He could not have been concerned about contracts to buy fruit without posting the required bond if he was not even aware that his company was purchasing fruit. Further, Marinaro neither questioned Paladin about entering into the citrus contracts, nor suggested Paladin use a different contract form for the LLC. The evidence establishes that Marinaro knew Paladin was purchasing fruit during Marinaro’s absence to continue the regular fruit-dealer’s business, and further, that Marinaro knew Paladin was entering into contracts on behalf of the LLC, the company formed just one day prior to Marinaro granting Paladin full power of attorney to run his business. Finally, Marinaro knowingly participated in the formation of Sunny Fresh Packing, LLC, in February 2012, four months after he became incapacitated. This required his involvement in a complicated business scheme in which his company collected on a debt owed by a packing house in Ft. Pierce, and acquired the equipment to run the new packing house, with two partners, Parris and Paladin, located in Okeechobee on property owned by a third party, Mr. Smith, who is not a member of Sunny Fresh Packing, LLC. It is unlikely Marinaro was clueless as to the fruit dealings of the LLC in his absence. Further, it is disingenuous, at best, for Marinaro to suggest that the contracts entered into in 2012 are not with the LLC, the corporation he formed in 2011 to protect his personal assets from his business obligations.
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 approving the claim of DP Partners, Ltd., against Sunny Fresh Citrus Export and Sales Co., LLC, in the amount of $44,032.00. DONE AND ENTERED this 30th day of October, 2014, in Tallahassee, Leon County, Florida. S Suzanne Van Wyk Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 30th day of October, 2014.
