The Issue Whether Respondent, Ridge Island Groves, Inc., is liable to Petitioner, Orange Bend Harvesting, Inc., on a contract to purchase citrus fruit, and, if so, the amount owed.
Findings Of Fact Petitioner, Orange Bend Harvesting, Inc. (Petitioner or Orange Bend), is a Florida for-profit corporation located in Leesburg, Florida, engaged in the business of citrus harvesting and management of citrus groves. Joyce D. Caldwell is the president and registered agent of Orange Bend. Ruben Caldwell and Cornelius Caldwell are Ms. Caldwell's brothers and co-owners of the business. Ruben Caldwell is Orange Bend's harvesting manager. Respondent, Ridge Island Groves, Inc. (Respondent or Ridge Island), is a Florida for-profit corporation headquartered in Haines City, Florida, engaged in the business of buying and packing fresh fruit for retail sale and gift-fruit shipping. Ridge Island is known in the industry as a "packing house." Although Ridge Island produces some fruit juice for sample and sale at the packing house, Ridge Island is not a juice processing plant. Respondent, Old Surety Insurance Company, holds the bond for Ridge Island, which has been assigned to the Department as security pursuant to section 601.61, Florida Statutes (2014). Orange Bend and Ridge Island first transacted business in 2010, and Ridge Island purchased fruit from Orange Bend "off and on" from 2010 through 2014. On October 17, 2014, Respondent entered into a contract with Petitioner to purchase fruit from five different citrus groves. The "Standard Fruit Contract" provided that Respondent would purchase from Petitioner the "entire crop of citrus fruit blooming in the year 2014 and merchantable at the time of picking on the grove blocks listed below . . . on the following terms." More specifically, Respondent was entitled to purchase the following described citrus from Petitioner: Variety Block Approximate number of boxes Price per unit Moving Date Red Navels Ronco 300+/- $15 on tree 12/31/14 Red Navels Sweet Blossom 1500+/- $20 on tree 12/31/14 Navels Powers 400+/- $15 on tree 12/31/14 Navels YMCA 400+/- $15 on tree 12/31/15 Satsuma Weatherspoon 400+/- $12 on tree 01/31/15 Prior to entering into the contract, Mr. Ritch visited the named grove blocks with Ruben Caldwell, inspected the blocks, and estimated the number of boxes to be picked from each block. The two men agreed on the price for each type of fruit. Ridge Island paid Orange Bend $2,500 in deposit on the contract. Pursuant to the contract, Orange Bend was responsible to "pick and haul" the fruit only from the Sweet Blossom grove. Respondent was responsible to pick and haul from the remaining groves. In the industry, the "on tree" price for fruit does not include the harvester's cost to pick and haul. If the harvester is to be paid his or her pick-and-haul costs, the pick-and-haul price is separate from the "on tree" price. Orange Bend and Ridge Island agreed on a pick-and-haul price of $3.25 per box. Orange Bend picked the Sweet Blossom block on December 8, 2014, yielding 225 boxes of red navels, which Orange Bend delivered to Ridge Island. Orange Bend picked the Sweet Blossom block again on December 9, 2014, and delivered another 217 boxes to Ridge Island. These first two deliveries "packed out" at nearly 100 percent, meaning there were few eliminations from the load. Citrus intended for the fresh market must be visually appealing, as well as free from insects, disease, and other damage. Fruit that is discolored, diseased, or damaged is eliminated from the packed fruit because it is unsuitable for the fresh fruit market. Ridge Island paid Orange Bend the full contract price per box for the first two deliveries of red navels from the Sweet Blossom block. Orange Bend picked the Sweet Blossom block again on December 26, 2014, yielding 447 boxes of red navels, which were delivered to Ridge Island. This delivery packed out at around 50 percent. Mr. Ritch sold the eliminations to a juice processer in Peace River, Florida.1/ Ridge Island paid Orange Bend the pick-and-haul price of $3.25 per box for eliminations from Orange Bend's deliveries of red navels from the Sweet Blossom block. Decisions regarding eliminations are made by the packing house. Generally, a harvester is unaware of the packing rate of fruit delivered. Ruben Caldwell contacted Mr. Ritch via text message on January 1, 2015, and asked whether Ridge Island was ready for another shipment of red navels from Sweet Blossom. Mr. Caldwell indicated the growers were anxious to get the fruit off the tree. Mr. Ritch responded, as follows: The last load of red navels packed out less than 50%. I tried degreening them but the greening fruit would not color. You can bring me another load but I just want you to know that the greening fruit will only return the cost of the pick and haul. Orange Bend picked the Sweet Blossom block several times between January 5 and 14, 2015, delivering an additional 1,295 boxes of fruit to Ridge Island. Ridge Island paid Orange Bend the contract price for 679 boxes. Orange Bend claims it is owed $16,820 from Ridge Island under the contract for red navels from the Sweet Blossom block. Ridge Island picked the YMCA block on January 15, 2015. The pick yielded 216 boxes of navels, of which 169 were eliminations. Ridge Island paid Orange Bend $705 for 47 boxes at $15 per box. Ridge Island picked the Powers block on November 15, 2014, and January 15, 2015. The picks yielded 284 boxes of navels, of which 119 were eliminations. Ridge Island paid Orange Bend $4,260 for 165 boxes at $15 per box. Ridge Island picked the Ronco block in February 2015.2/ Ridge Island picked 91 boxes, of which 62 boxes were eliminations, and paid the block owner, rather than Orange Bend, for 29 boxes at $15 per box. No evidence was introduced regarding whether the Weatherspoon block was picked by either party or whether Ridge Island paid any amount to Orange Bend under the contract for satsumas from the Weatherspoon block. Orange Bend maintains Ridge Island owes $27,540 for boxes of fruit picked by, or otherwise delivered to, Ridge Island, pursuant to the contract for fruit from the YMCA, Powers, and Ronco blocks. Orange Bend contends that the "on the tree" price quoted in the contract obligated Ridge Island to purchase every piece of fruit on the trees in the specified blocks and to assume the cost of eliminations. Ridge Island contends it was obligated to purchase only the fruit which was "merchantable at the time of picking," pursuant to the contract, and that the greening fruit was not merchantable. Petitioner offered the testimony of Jerry Mincey, owner of Southern Citrus Growers, who has operated as a harvester, fruit buyer, grove manager, and intermediary in the Florida citrus industry at various times throughout the past 50 years. Mr. Mincey testified that when a packing house buys fruit "on the tree," the packing house assumes all costs, including eliminations, as well as pick and haul. However, Mr. Mincey also testified that, while a buyer may make an offer to buy a crop "in bulk" (i.e., $x for the entire crop), the industry standard is "on the tree." The undersigned fails to see the difference between "in bulk" and "on the tree" under Petitioner's interpretation. If "on the tree" means the buyer is purchasing every piece of fruit produced on the trees in the specified block (blocks are just sections of groves), as Petitioner contends, the "in bulk" option would be rendered meaningless. Further, Petitioner's interpretation is contrary to the plain language of the contract, which entitles Respondent to the "entire crop of citrus fruit blooming in the year 2014 and merchantable at the time of picking." If Respondent was obligated to purchase all fruit on the trees in the named blocks, the phrase "and merchantable" would be meaningless. Having weighed all the testimony and evidence introduced, the undersigned finds the "on the tree" price in the subject contract means the buyer assumes the pick-and-haul costs. In the case at hand, Ridge Island purchased fruit in the Ronco, Powers, and YMCA blocks, absorbing its own costs to pick and haul the fruit. Ridge Island paid Orange Bend for Orange Bend's pick and haul costs for deliveries of fruit from the Sweet Blossom block. Pursuant to the contract, Ridge Island contracted for merchantable fruit. The contract does not define the term "merchantable." Citrus greening, or greening, is by all accounts a devastating disease caused by bacteria-infected insects. Trees affected with greening produce hard, knotty, fruit, which never fully colors (i.e., remains green on the bottom, or bottom half, of the fruit). Greening fruit is not fit for the purpose of fresh fruit packaging and gift shipping. Petitioner challenged Respondent's contention that fruit from the Sweet Blossom block was infected with greening. Petitioner presented the testimony of Mr. Mincey on this point. Mr. Mincey testified that he inspected the Sweet Blossom block in early October and made an offer to buy the navels for $18 per box. Mr. Mincey was back in the block in early November and testified that, although the tangerines in that grove were infected with greening, he saw no problem with the navels, which were of good size and on which color was beginning to break. On cross-examination however, Mr. Mincey admitted that, upon inspection, the red navel trees in the Sweet Blossom block did show some signs of greening. Further, Mr. Mincey testified that greening is a devastating disease that has infected almost every tree in Florida. Greening does not manifest itself early in the ripening process. While the fruit may color at the top, it usually does not color all the way to the bottom. Thus, a color break on the fruit in early November is not proof that the trees were not affected by greening. Despite the fact that some of the blocks were not picked by the moving date specified in the contract, neither party objected. In fact, Mr. Ritch testified that the fruit was late maturing throughout the region. Neither party ever terminated the subject contract.
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 Orange Bend Harvesting, Inc., against Ridge Island Groves, Inc., in the amount of $435. DONE AND ENTERED this 20th day of August, 2015, 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 20th day of August, 2015.
The Issue The issue in this case is whether Respondent Clark's Country Farmers Market, Inc. owes Petitioner a sum of money for shipments of citrus fruit.
Findings Of Fact The evidence presented at final hearing established the facts that follow. The Parties and Their Problem Spyke's Grove and Clark's are "citrus fruit dealers" operating within the Department's regulatory jurisdiction. As a wholesale shipper, Spyke's Grove packages and arranges for delivery of citrus products pursuant to purchase orders that retail sellers such as Clark's submit. The packages typically are labeled with the retail seller's name, and thus the retail buyer (and the recipient, if the citrus is purchased as a gift) usually will not be aware of Spyke's Grove's involvement. The instant case involves a series of orders that Clark's placed with Spyke's Grove between October and December 1999 for packages of gift fruit. Under a number of informal, largely unwritten contracts, Spyke's Grove agreed, each time it received an order from Clark's, to ship a gift fruit box or basket to the donee designated by Clark's' retail customer, for which fruit shipment Clark's agreed to pay Spyke's Grove. Spyke's Grove alleges that Clark's failed to pay in full for all of the gift fruit packages that Clark's ordered and Spyke's Grove duly shipped. Clark's contends (though not precisely in these terms) that Spyke's Grove materially breached the contracts, thereby discharging Clark's from further performance thereunder. The Transactions From mid-October 1999 until around December 12, 1999, Clark's faxed or e-mailed to Spyke's Grove approximately 350 individual orders for gift fruit packages. Among other information, each order consisted of a shipping label that identified the product (e.g. the type of gift box or basket), the intended recipient, and the destination. Spyke's Grove manifested its intent to fill these orders by faxing statements of acknowledgment to Clark's, by telephoning Clark's, or both. Although the many contracts that arose from these transactions were thus documented, the writings left much unsaid. For example, the parties did not explicitly agree in writing that Spyke's Grove would deliver the subject gift baskets to the donees before Christmas, nor did they make any express oral agreements to this effect.1 Further, the parties did not specifically agree that Spyke's Grove would be obligated to deliver the gift fruit into the hands of the donees and bear the risk of loss until such tender of delivery. Rather, the contracts between Spyke's Grove and Clark's were ordinary shipment contracts that required Spyke's Grove to put the goods into the possession of carriers (such as the U.S. Postal Service or United Parcel Service) who in due course would deliver the packages to the donees. For many weeks, until early December 1999, Clark's placed orders, and Spyke's Grove filled them, under the arrangement just described. The relationship was not completely trouble-free, for the parties had some problems with duplicate orders. Most, if not all, of these difficulties stemmed from the implementation of a computerized ordering system which allowed Clark's to "export" orders directly to Spyke's Grove's electronic database. The parties recognized at the time that errors were occurring, and they attempted contemporaneously to identify and purge unintended duplicates. Pursuant to the course of dealing between these parties, Spyke's Grove filled orders that were not affirmatively identified as errors prior to the scheduled shipment date. The Fire On the night of Sunday, December 12, 1999, a devastating fire at Spyke's Grove's premises caused substantial damage, temporarily disrupting its citrus packing and shipping operations at the peak of the holiday season. Working through and around the loss, Spyke's Grove soon recovered sufficiently to reopen for business. By around noon on Tuesday, December 14, 1999, its telephone service had been restored, and activities relating to shipping resumed on Friday, December 17, 1999. The Aftermath Meantime, Clark's contends, customers had begun calling Clark's on December 10, 1999, to complain that gift fruit packages were not being received as promised. None of the customers testified at hearing, however, and therefore no competent, non-hearsay evidence establishes the contents of their alleged out-of-court statements. On December 14, 1999, following several unsuccessful attempts to communicate with Spyke's Grove shortly after the fire (about which Clark's remained unaware), Denise Clark, acting on behalf of Clark's, reached Robert Spiece, a representative of Spyke's Grove, on his cell phone. At hearing, Ms. Clark and Mr. Spiece gave conflicting accounts as to the substance of their December 14, 1999, telephone conversation. Neither disputed, however, that during this conversation Ms. Clark and Mr. Spiece agreed, at Ms. Clark's request, that all orders of Clark's not yet shipped by Spyke's Grove would be canceled, effective immediately, as a result of the fire. Although Ms. Clark claimed that Mr. Spiece further informed her that Spyke's Grove could not identify which orders had been shipped, the factfinder does not believe that Mr. Spiece made such a sweeping negative statement. Rather, as Mr. Spiece explained at hearing, Ms. Clark probably was told that information regarding the filled orders would not be available that day. Without waiting for further information from Spyke's Grove, Clark's began calling its retail customers to ascertain whether they had received packages that were supposed to have been shipped by Spyke's Grove. Employees of Clark's who had participated in this process——which took four to five days—— testified at hearing about conversations between themselves and various customers. As uncorroborated hearsay, however, the out- of-court statements attributed to these customers were not competent substantial evidence upon which a relevant finding of fact, e.g. that any particular customer or customers had not received their gift fruit, could be based. Moreover, this hearsay evidence, even if competent, would still have been too anecdotal to establish persuasively any widespread failure on the part of the carriers to deliver the packages shipped by Spyke's Grove. On December 15, 1999, Spyke's Grove prepared three draft invoices for the gift fruit packages that Clark's had ordered and which Spyke's Grove had shipped before December 12, 1999. Numbered 1999113001, 1999121101, and 1999121201, the invoices sought payment of $688.72, $2,415.48, and $298.66, respectively. On the first page of Invoice #1999121201, Barbara Spiece, the President of Spyke's Grove, wrote: Some of these were lost in the fire. "A" day left in the morning. "Springfield" was on the floor to go out that night. I realize there are many duplicates in these shipped reports. We tried to watch for them but with different order numbers it was very difficult. Just cross them out [and] you will not be charged for them. I apologize for all of the problems we have had this season [illegible] wish you luck. These bills were faxed to, and received by, Clark's on December 16, 1999. Clark's did not pay the invoices, or dispute them, or cross out the unintended duplicate orders (as it had been invited to do) to effect a reduction in the outstanding balance. Instead, Clark's ignored Spyke's Grove's requests for payment. Not only that, in disregard of its existing contractual obligations and with no advance notice to Spyke's Grove, Clark's proceeded on its own to fill all of the orders that it had placed with Spyke's Grove before December 12, 1999——including those orders that Spyke's Grove, through its draft invoices, claimed to have shipped. Even after the fact, Clark's failed to inform Spyke's Grove that it had, in effect, repudiated its contractual promises to pay Spyke's Grove for the gift fruit packages already shipped as of December 12, 1999 (i.e. the orders not canceled on December 14, 1999). The Inevitable Dispute Having heard nothing from Clark's in response to its December 16, 1999, fax, Spyke's Grove sent its invoices out again, in final form, on January 25, 2000.2 This time, Ms. Spiece did not inscribe any instructions to cross out duplicates for a discount. Numbered 11063001 ($688.72), 11063002 ($2,449.14), and 11063003 ($195.52), these bills totaled $3,333.38. Each of these invoices contained the following boilerplate "terms": Net 14 days prompt payment is expected and appreciated. A 1 ½% monthly service charge (A.P.R. 18% per annum) may be charged on all past due accounts. Customer agrees to pay all costs of collection, including attorneys [sic] fees and court costs, should collection efforts ever become necessary. Clark's did not remit payment or otherwise respond to Spyke's Grove's statements. Accordingly, on June 20, 2000, Spyke's Grove sent a letter to the Department requesting assistance. Clark's was provided a copy of this letter. Shortly thereafter, Spyke's Grove filed a Complaint with the Department, initiating the instant proceeding. Ultimate Factual Determinations Clark's refusal to pay for the goods ordered from and shipped by Spyke's Grove constituted a breach of the contracts between the parties. Spyke's Grove did not materially breach the agreements. Further, Clark's did not object, within a reasonable period of time, to the statements of account that Spyke's Grove rendered preliminarily on December 16, 1999, and finally on January 25, 2000. Accordingly, these invoices amount to an account stated concerning the transactions between the parties. Clark's failed to overcome the presumption of correctness that attaches to an account stated, either by proving fraud, mistake, or error. Spyke's Grove has suffered an injury as a result of Clark's' breach. Spyke's Grove's damages consist of the principal amount of the debt together with pre-award interest at the statutory rate. Accordingly, Spyke's Grove is entitled to recover the following amounts from Clark's: Principal Due Date Statutory Interest $3,333.38 2/08/99 $ 298.66 (2/08/00 - 12/31/00) $ 335.56 (1/01/01 - 11/30/01) $3,333.38 $ 634.22 Interest will continue to accrue on the outstanding balance of $3,333.38 in the amount of $1.00 per day from December 1, 2001, until the date of the final order.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department enter a final order awarding Spyke's Grove the sum of $3,333.38, together with pre- award interest in the amount of $634.22 (through November 30, 2001), plus additional interest from December 1, 2001, until the date of the final order, which will accrue in the amount of $1.00 per day. DONE AND ENTERED this 29th day of November, 2001, in Tallahassee, Leon County, Florida. JOHN G. VAN LANINGHAM Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 29th day of November, 2001.
The Issue Whether Respondent, Citrus Direct, LLC, owes Petitioner, Marvin Hajos, the sum of $5,397.00 for citrus that was purchased, but not harvested.
Findings Of Fact At all times material to the instant case, Petitioner and Citrus Direct were involved in the growing and marketing of citrus fruit in the State of Florida. On June 12, 2008, Citrus Direct agreed to purchase fruit from Petitioner. The terms of their agreement were reduced to writing. The "Fresh Fruit Contract" provided that Citrus Direct would purchase from Petitioner all of the varieties of citrus fruits of merchantable quality as delineated in the contract. More specifically, Citrus Direct was entitled to purchase "Valencia" oranges from Petitioner for "$3.00 on tree net" per box. The terms of the contract suggests that it is for "citrus fruit for the year 2005/2006 and merchantable at the time of picking. . . ." The contract does not identify a total amount of fruit expected from the grove. Prior to entering into the above-referenced contract, Petitioner had made arrangements with an unidentified third party to have the grove picked, but for some reason, that agreement fell through. Jason Cooper, known in the citrus business as a "bird dog," brought the parties together. Mr. Cooper is an independent contractor who finds grove owners who need to have their groves picked and refers them to buyers. The "Fresh Fruit Contract" was signed on June 12, 2008. The grove was picked on June 15, 17, 26 and 30, 2008. Two hundred and sixty-four boxes of fruit were picked from Petitioner's grove. Petitioner received payment of $603.00. Citrus Direct forwarded an additional check for $189.00 to Petitioner; however, Petitioner did not receive the check. No admissible evidence was received regarding the number of boxes of fruit that were anticipated from the grove. However, on June 30, 2008, all the fruit that was reasonably available to be picked in the grove had been picked.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Florida Department Agriculture and Consumer Services enter a final order dismissing Petitioner, Marvin Hajos', Amended Complaint, but requiring Respondent, Citrus Direct, LLC, to pay Petitioner $189.00, if that amount has not already been paid. DONE AND ENTERED this 27th day of April, 2009, in Tallahassee, Leon County, Florida. S JEFF B. CLARK 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 27th day of April, 2009. COPIES FURNISHED: Honorable Charles H. Bronson Commissioner of Agriculture Department of Agriculture and Consumer Services The Capitol, Plaza Level 10 Tallahassee, Florida 32399-0810 Richard D. Tritschler, General Counsel Department of Agriculture and Consumer Services 407 South Calhoun Street, Suite 520 Tallahassee, Florida 32399-0800 Christopher E. Green, Esquire Department of Agriculture and Consumer Services Office of Citrus License and Bond Mayo Building, Mail Station 38 Tallahassee, Florida 32399-0800 Marvin Hajos 3510 Northwest 94th Avenue Hollywood, Florida 33024 State Farm Fire and Casualty Company One State Farm Plaza Bloomington, Illinois Hans Katros Citrus Direct, LLC 61710 1406 Palm Drive Winter Haven, Florida 33884
The Issue Whether Respondent, IMG Citrus, Inc. (Respondent), owes Petitioner, Vero Beach Land Company, LLC, (Petitioner) the sum of $63,318.50 for citrus that was purchased but not harvested.
Findings Of Fact At all times material to the instant case, Petitioner and Respondent were involved in the growing and marketing of citrus fruit in the State of Florida. For purposes of this Order, Petitioner is also described as "the seller"; Respondent is described as "the buyer." On October 26, 2007, Respondent agreed to purchase fruit from Petitioner. The terms of their agreement were reduced to writing. The “Fresh Fruit Purchase Agreement” provided that Respondent would purchase from Petitioner all of the citrus fruits of the varieties of merchantable quality as delineated in the contract. More specifically, Respondent was entitled to purchase the following described citrus from Petitioner: Block Name Variety Est Field Boxes Price Unit of Measure Rise Movement Date Pepper Grove Red Grapefruit 16,000 $4.50 Floor FB ½ Rise to Grower March 15th, 2008 Pepper Grove White Grapefruit 20,000 $2.00 Floor FB All Rise to March 15th, Grower 2008 Pepper Grove Navels 2,500 $5.00 Floor FB All Rise to Grower January 1, 2008 The contract recognized that “only that fruit produced as the result of normal seasonal bloom” and not late maturing or out of season bloom would be included. Additionally, all of the fruit was to be for fresh shipment. Citrus intended for the fresh market must be visually appealing as well as having other attributes associated with the fresh fruit market. Discolorations or damage to the fruit makes it unsuitable for the fresh fruit market. In anticipation of the crop the buyer expected to harvest, Respondent advanced to Petitioner the sum of $34,500.00. Additional payments were to be made to Petitioner as described in paragraph 2 of the contract. Critical to this matter, however, were the terms of the contract set forth in paragraph 3. That paragraph provided: Merchantability of Fruit: Seller represents to Buyer that all fruit sold under this Agreement shall be sound and merchantable, in conformance with industry standards, and fit for their intended purpose of fresh packing and marketing. Grower shall keep said fruit sprayed sufficiently to keep the fruit bright and free from rust mite, disease and insect damage and shall not fertilize or cultivate the grove upon which the fruit is grown, during the term of this Agreement, in anyway that will deteriorate the quality of the fruit. In the event such fruit is rendered not merchantable by virtue of damage from cultivation, fertilization, re-greening, cold, hail, fire, windstorm, or other hazard, the Buyer shall have the right to terminate this Agreement and the Seller shall refund to the Buyer the advance payment this day made, or that portion thereof not applied in the payment for fruit picked prior to termination. The buyer shall have four weeks from the occurrence of such cold, hail, fire, windstorm or other hazard within which to notify Seller that the fruit has been rendered non merchantable and of the termination of this agreement. Seller shall reimburse the Buyer for all deposits and advances made on unpicked fruit within thirty (30) days of notification by Buyer. Paragraph 6 of the parties’ Fresh Fruit Purchase Agreement provided: Default: Should the Buyer, without lawful excuse, fail or refuse to pick and remove the fruit subject to this Agreement within the time specified or any extension thereof, the Seller hereby accepts and agrees to retain the deposit this day made less portion thereof applied and deducted as aforesaid, as his liquidated damages for such failure without any other claim for damage against the Buyer. In the event of any sale or attempted sale of the crop to a third party or other unexcused failure to deliver, Buyer shall be entitled to avail itself of all available legal and equitable remedied [sic] including injunctive relief. If either party fails to materially comply with the provisions of the agreement, the other party must give written notice of non- compliance, stating the nature of the violation or non-compliance and giving the other party thirty (30) days to bring themselves into compliance. If a disagreement exists regarding the interpretation of this Agreement, the parties agree to discuss the issues and negotiate in good faith to resolve the dispute. No waiver of any breach, right or remedy, shall constitute a continuing waiver, nor shall it be construed as a waiver of any other breach, right or remedy. Paragraph 7 of the contract provided, in pertinent part, that the agreement could be “supplemented or modified only by written agreement between the parties.” The parties did not provide any written supplements or modifications to their agreement. Petitioner wanted to have his fruit removed in a timely manner as he did not want the fruit left to potentially interfere with the next year's crop. It was Petitioner's desire to have the fruit picked as early and as quickly as possible. Nevertheless, the contract provided for a pick or "movement date." With regard to the navel oranges, the movement date was January 1, 2008. The movement date for the grapefruit was March 15, 2008. Presumably, these dates were negotiated and agreed to by the parties. Had Petitioner wanted earlier movement dates, that was within a contractual option available at the time of contract negotiations. The "Pepper Grove" that is described in the parties' agreement is a 120 acre grove sectioned into four blocks. The white grapefruit are located on two interior blocks with the red grapefruit on the two outer blocks. The navels were located on a portion of one of the outer blocks adjacent to the roadway. All of the blocks border 122nd Avenue. Presumably, as the four blocks adjoin one another it would be fairly easy to move from one block to the next to complete picking the crop. The contract specified that Respondent would purchase 2,500 boxes of navels. Respondent picked 2,928 boxes of navels from Petitioner's grove. This fruit was harvested between December 6, 2007 and January 10, 2008. Respondent did not meet the "movement date" specified in the contract and Petitioner apparently did not complain, in writing, regarding this technical violation. Moreover, the buyer did not allege that the navels were not acceptable quality or merchantable. This fruit was in the same block as the grapefruit. The contract price for the navels was $5.00 with 100 percent of the rise to go to the seller. On or about December 19, 2007, Petitioner inquired as to whether Respondent wanted to be released from the contract. This request was not reduced to writing and Respondent did not accept the verbal offer. On or about December 22, 2007, Respondent started harvesting the Pepper Grove grapefruit. In total Respondent harvested 4,266 boxes of the white grapefruit. Respondent harvested 5,400 boxes of red grapefruit from the Pepper Grove. In total, Petitioner's Pepper Grove produced 13,077 boxes (out of the contract volume of 16,000) of red grapefruit. In total, Petitioner's Pepper Grove produced 19,289 boxes (out of the contract volume of 20,000) of white grapefruit. Based upon the volumes produced by the Pepper Grove and the contract prices with the rise going to Petitioner for the navels, Respondent owed Petitioner $25,034.40 for the navels harvested, $24,300 for the red grapefruit, and $8,532.00 for the white grapefruit. These amounts total $57,866.40. As of the date of the hearing, Respondent had paid Petitioner $59,126.48. Of the unpicked fruit left on the trees by Respondent, Petitioner was able to market 15,023 boxes of white grapefruit that went to the cannery and yielded $7,965.46. The red grapefruit that went to the cannery yielded $4,162.21. Red grapefruit that was harvested by Minton yielded 1,056 boxes, but only $168.96. Thus, Petitioner recovered only $12,296.63 for the 22,700 boxes of fruit that Respondent left on the Pepper Grove. Respondent maintained that it did not pick Petitioner's fruit because it was damaged by rust mite. If true, Respondent claimed that the fruit would not meet fresh fruit standards. Although Petitioner acknowledged that some of the fruit did have damage, Mr. Hornbuckle maintained that he offered fruit from another grove to make-up the difference in volume. None of the conversations that allegedly occurred regarding the rust mite issue were reduced to writing at the time. Petitioner maintains he had more than sufficient fruit to meet the amounts due under the parties' agreement. On March 6, 2008, Respondent issued a letter to Petitioner that provided, in part: We are very sorry however we are unable to continue to harvest the grapefruit from your groves due to the lack of merchantability of the fruit for the fresh market. Due to the disease and insect damage present on the fruit, the return on the fruit is unable to cover harvesting and packing charges for the fresh channel. On March 11, 2008, Petitioner wrote back to Respondent and stated, in part: Please be advised that refusal to harvest any additional fruit constitutes a breach of the contract, which requires IMG Citrus to harvest all of the red and white grapefruit no later than March 15, 2008. All of the navel fruit was to have been harvested by January 1, 2008. Contrary to your letter, the fruit is merchantable, and does not have disease or insect damage which unreasonably reduces the merchantability of the crop. At the time of the allegations of rust mite or other damage, Petitioner took pictures of his crop to demonstrate that it appeared to be healthy fruit. Respondent did not have pictures to demonstrate its claim that the fruit was not merchantable. Moreover, Respondent did not formally document that the fruit was unacceptable until March 6, 2008. Under the terms of the contract, the harvesting of the grapefruit was to be completed March 15, 2008. Respondent's claim that it purchased fruit from Duda Products, Inc. (Duda) to demonstrate the market price for grapefruit is not persuasive. The contract with Duda named a variety of "Ruby Reds." There is no evidence that the "Ruby Red" variety is comparable to the whites and reds depicted on Petitioner's contract. Respondent claims that the packout percentage for Petitioner's fruit did not support the harvesting of the crop. That is to say, that the percentage of fruit meeting a fresh fruit quality did not justify the harvesting and packing expense associated with Petitioner's fruit. If the fruit were not marketable in the fresh market, the fruit had no value to Respondent. The parties' agreement did not, however, specify what would be an acceptable packout percentage to support a notion that the fruit was merchantable. Taken to extreme, Respondent could claim any percentage short of 100 percent demonstrated fruit that was not merchantable. No evidence of an industry standard for an acceptable packout percentage was presented.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that the Department enter a final order approving Petitioner's complaint against Respondent in the amount of $51,021.87. DONE AND ENTERED this 4th day of March, 2009, in Tallahassee, Leon County, Florida. J. D. PARRISH 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 4th day of March, 2009. COPIES FURNISHED: Robert B. Collins Westchester Fire Insurance Company 436 Walnut Street, Routing WA10A Philadelphia, Pennsylvania 19106 Christopher E. Green, Esquire Department of Agriculture and Consumer Services Office of Citrus License and Bond Mayo Building, M-38 Tallahassee, Florida 32399-0800 Melanie Sallin Ressler, COO IMG Citrus, Inc. 2600 45th Street Vero Beach, Florida 32967 Michel Sallin IMG Citrus, Inc. 7836 Cherry Lake Road Groveland, Florida 34736 Larmarcus E. Hornbuckle Rebecca Hornbuckle Vero Beach Land Company, LLC 6160 1st Street Southwest Vero Beach, Florida 32968 Richard D. Tritschler, General Counsel Department of Agriculture and Consumer Services 407 South Calhoun Street, Suite 520 Tallahassee, Florida 32399-0800 Honorable Charles H. Bronson Department of Agriculture and Consumer Services The Capitol, Plaza Level 10 Tallahassee, Florida 32399-0810
The Issue Whether the Respondent Alilev Corporation failed to pay amounts owing to the Petitioner for the shipment of citrus fruit, as set forth in the Complaint dated April 30, 2001, and, if so, the amount the Petitioner is entitled to recover.
Findings Of Fact Based on the oral and documentary evidence presented at the final hearing and on the entire record of this proceeding, the following findings of fact are made: At all times material to this proceeding, Fresh Fruit Express and Bay Harbor Fine Foods were "citrus fruit dealers" licensed by the Department. Bay Harbor Fine Foods is a retail grocery store. As part of its business, it sells to its retail customers "gift fruit" consisting of oranges and grapefruit for shipment to third persons identified by the customers. Arthur C. Bergen is an owner of Bay Harbor Fine Foods and acted on its behalf with respect to the transactions that are the subject of this proceeding. Fresh Fruit Express is in the business of packaging and shipping "gift fruit" consisting of oranges and grapefruit pursuant to orders placed by other citrus fruit dealers. Barbara Spiece is the president of Fresh Fruit Express and acted on its behalf with respect to the transactions that are the subject of this proceeding. In November and December 1999, Fresh Fruit Express received via facsimile transmittal a number of orders for "gift fruit" from Bay Harbor Fine Foods. Most of the orders were for single shipments of fruit, although a few orders were for 12 monthly shipments of fruit. This was the first year Bay Harbor Fine Foods had done business with Fresh Fruit Express, and Bay Harbor Fine Foods and Fresh Fruit Express did not execute a written contract governing their business relationship. On the night of Sunday, December 12, 1999, Fresh Fruit Express's packinghouse was destroyed by fire, and its offices were substantially damaged. The fire could not have happened at a worse time because it was at the peak of the holiday fruit- shipping season. Fresh Fruit Express was able to move into temporary offices and to obtain the use of a packinghouse very quickly. It had telephone service at approximately noon on Tuesday, December 14, 1999, and it began shipping "gift fruit" packages on Friday, December 17, 1999, to fill the orders its had received. Mr. Bergen, the owner of Bay Harbor Fine Foods, learned of the fire at Fresh Fruit Express and attempted to contact its offices for an update on the orders Bay Harbor Fine Foods had placed for shipment during the holidays. Mr. Bergen was unable to contact anyone at Fresh Fruit Express for three or four days after the fire, and he was worried that his customers' orders for "gift fruit" would not be shipped on time.1 Mr. Bergen called two other packinghouses and placed orders duplicating some of the orders Bay Harbor Fine Foods had placed with Fresh Fruit Express. Mr. Bergen directed these packinghouses to ship the duplicate orders via expedited Federal Express and United Parcel Service shipping, and Bay Harbor Fine Foods incurred extra costs for the expedited shipping. Meanwhile, Fresh Fruit Express was giving priority to its smaller wholesale customers such as Bay Harbor Fine Foods, and it shipped all of the orders it had received from Bay Harbor Fine Foods. Bay Harbor Fine Foods did not cancel its orders with Fresh Fruit Express or otherwise notify Fresh Fruit Express that it should not ship the fruit; Mr. Bergen assumed that Fresh Fruit Express would contact him if it intended to ship the fruit ordered by Bay Harbor Fine Foods. Fresh Fruit Express prepared invoices for Bay Harbor Fine Foods dated January 24, 2000, in the amounts of $60.01, $599.43, and $511.80, respectively, for "gift fruit" shipments made in November and December 1999; it prepared an invoice for Bay Harbor Fine Foods dated February 18, 2000, in the amount of $92.00 for "gift fruit" shipments made in January and February 2000; it prepared an invoice for Bay Harbor Fine Foods dated March 21, 2000, in the amount of $69.34 for "gift fruit" shipments made in February and March 2000; and it prepared an invoice for Bay Harbor Fine Foods dated April 17, 2000, in the amount of $44.40 for "gift fruit" shipments made in April 2000. According to the invoices, Bay Harbor Fine Foods owed Fresh Fruit Express $1,376.98 as of April 17, 2000. All of the invoices to Bay Harbor Fine Foods that were submitted by Fresh Fruit Express contain the following: "Terms: Net 14 days prompt payment is expected and appreciated. A 1½% monthly service charge (A.P.R. 18% per annum) may be charged on all past due accounts. " By late April 2000, Fresh Fruit Express had not received payment for any of the "gift fruit" shipped pursuant to the orders placed by Bay Harbor Fine Foods. Ms. Spiece contacted Bay Harbor Fine Foods in late April 2000 and inquired about payment of the amounts owing. Ms. Spiece was told that Bay Harbor Fine Foods had no invoices from Fresh Fruit Express. Ms. Spiece sent duplicate invoices to Bay Harbor Fine Foods, and she called to confirm that the invoices had been received. After several attempts by Fresh Fruit Express to collect the amounts invoiced to Bay Harbor Fine Foods, Mr. Bergen tendered a check dated July 11, 2000, to Fresh Fruit Express on the Bay Harbor Fine Foods account in the amount of $591.90. The check was accompanied by a letter signed by Mr. Bergen, in which he stated: Enclosed is a check in the amount of $591.90 covering the shipments that we know were not duplicated due to your fire in late December. This amount reflects a deduction of $341.95 in freight charges paid by us to U.P.S. and Fed. Ex. to make our promised Christmas deadline. In the statement attached to the complaint filed with the Department, Fresh Fruit Express claims that Bay Harbor Fine Foods owes it a total of $1,034.62, which amount includes a credit for the $591.90 paid by Bay Harbor Fine Foods in July 2000 and amounts shown as "Finance" charges for the months of February 2000 through April 2001. Bay Harbor Fine Foods does not dispute Fresh Fruit Express's claim that $1,376.98 worth of "gift fruit" was shipped by Fresh Fruit Express pursuant to orders Bay Harbor Fine Foods placed in November and December 1999. Bay Harbor Fine Foods' position is that it need not pay Fresh Fruit Express for the fruit because Fresh Fruit Express did not notify it after the December 12, 1999, fire that it would ship the orders and because Bay Harbor Fine Foods had to make sure that its customers' orders were filled. The uncontroverted evidence establishes that Bay Harbor Fine Foods was, at the times material to this proceeding, a Florida-licensed and -bonded citrus fruit dealer; that, in November and December 1999, Bay Harbor Fine Foods submitted orders to Fresh Fruit Express for the shipment of "gift fruit" consisting of oranges and grapefruit; that Fresh Fruit Express shipped all of the "gift fruit" ordered by Bay Harbor Fine Foods in November and December 1999; that the price of the "gift fruit" shipped by Fresh Fruit Express pursuant to Bay Harbor Fine Foods' orders totaled $1,376.98; that Bay Harbor Fine Foods paid Fresh Fruit Express $591.90 on its account on July 11, 2000; and that Fresh Fruit Express timely filed its complaint alleging that Bay Harbor Fine Foods failed to promptly pay its indebtedness to Fresh Fruit Express for citrus products shipped pursuant to orders placed by Bay Harbor Fine Foods. Fresh Fruit Express is, therefore, entitled to payment of the principal amount of $785.08, plus pre-judgment interest. Fresh Fruit Express presented no evidence to establish that it actually sent the invoices to Bay Harbor Fine Foods on or about the dates stated on the invoices. Therefore, payment of the $1,376.98 was due on May 1, 2000, after Ms. Spiece sent duplicate invoices to Bay Harbor Fine Foods and confirmed that they had been received, and pre-judgment interest on this amount would begin accruing on May 1, 2000. The payment of $591.90 on July 11, 2000, reduced the principal balance owing to Fresh Fruit Express to $785.08, and pre-judgment interest on this amount would begin accruing on July 12, 2000.
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 Alilev Corporation, d/b/a Bay Harbor Fine Foods, to pay $785.08 to Spyke's Grove, Inc., d/b/a Fresh Fruit Express, Emerald Estate, and Nature's Classic, together with pre-judgment interest calculated at the rate specified in Section 55.03, Florida Statutes, on the amounts owing. DONE AND ENTERED this 2nd day of October, 2001, in Tallahassee, Leon County, Florida. PATRICIA HART MALONO 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 2nd day of October, 2001.
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.
The Issue The issue in this case is whether Respondent Dooley Groves, Inc. owes Petitioner a sum of money for shipments of citrus fruit.
Findings Of Fact The evidence presented at final hearing established the facts that follow. The Parties and Their Problem Spyke's Grove and Dooley are "citrus fruit dealers" operating within the Department's regulatory jurisdiction. As a wholesale shipper, Spyke's Grove packages and arranges for delivery of citrus products pursuant to purchase orders that retail sellers such as Dooley submit. The packages typically are labeled with the retail seller's name (e.g. Dooley), and thus the retail buyer (and the recipient, if the citrus is purchased as a gift) usually will not be aware of Spyke's Grove's involvement. The instant case involves a series of orders that Dooley placed with Spyke's Grove between November and December 1999 for packages of gift fruit. Under a number of informal, largely unwritten contracts, Spyke's Grove agreed, each time it received an order from Dooley, to ship a gift fruit box or basket to the donee designated by Dooley's retail customer, for which fruit shipment Dooley agreed to pay Spyke's Grove. Spyke's Grove alleges that Dooley failed to pay in full for all of the gift fruit packages that Dooley ordered and Spyke's Grove duly shipped. Dooley contends (though not precisely in these terms) that Spyke's Grove materially breached the contracts, thereby discharging Dooley from further performance thereunder. Dooley also claims, as an affirmative defense, that the alleged debt was extinguished pursuant to an accord and satisfaction. The Transactions From mid-November 1999 until around December 12, 1999, Dooley faxed to Spyke's Grove approximately 150 individual orders for gift fruit packages. Each order consisted of a shipping label that identified the product (e.g. the type of gift box or basket), the intended recipient, the destination, and a proposed shipping date. Spyke's Grove manifested its intent to fill these orders by faxing statements of acknowledgment to Dooley. Although the many contracts that arose from these transactions were thus documented, the writings left much unsaid. For example, contrary to Dooley's assertion, the parties did not agree in writing that Spyke's Grove would deliver the subject gift baskets to the donees before Christmas, nor did they make any express oral agreements to this effect. Further, the parties did not specifically agree that Spyke's Grove would be obligated to deliver the gift fruit into the hands of the donees and bear the risk of loss until such tender of delivery. Rather, the contracts between Spyke's Grove and Dooley were ordinary shipment contracts that required Spyke's Grove to put the goods into the possession of carriers (such as the U.S. Postal Service or United Parcel Service) who in due course would deliver the packages to the donees. For several weeks, until early December 1999, Dooley placed orders, and Spyke's Grove filled them, under the arrangement just described, without controversy. The Fire On the night of Sunday, December 12, 1999, a devastating fire at Spyke's Grove's premises caused substantial damage, temporarily disrupting its citrus packing and shipping operations at the peak of the holiday season. Working through and around the loss, Spyke's Grove soon recovered sufficiently to reopen for business. By around noon on Tuesday, December 14, 1999, its telephone service had been restored, and activities relating to shipping resumed on Friday, December 17, 1999. Dooley's Response Dooley did not immediately learn about the fire that had interrupted Spyke's Grove's operations. Continuing with business as usual on Monday, December 13, 1999, Dooley attempted then and throughout the week to fax orders to Spyke's Grove but consistently failed to connect because the lines were busy. With unplaced orders piling up, Dooley began to worry that the gift baskets its customers had ordered earlier in the month——orders that Sypke's Grove already had agreed to fill—— would not arrive by Christmas, as Dooley had guaranteed when taking those orders. Then, on December 16, word of the Spyke's Grove fire reached Dooley. Dooley's worry escalated into alarm. That same day, Dooley placed telephone calls to as many of its retail customers or their donees as it could reach, to ascertain whether Spyke's Grove had shipped any of the gift fruit baskets that Dooley had ordered before December 12, 1999. Dooley was unable to confirm the receipt of a single package—— and it panicked. Disregarding its existing contractual obligations and with no advance notice to Spyke's Grove, Dooley made alternative arrangements for filling all of the orders that it had faxed to Spyke's Grove in December 1999. Dooley packaged and shipped some of the subject gift boxes on its own, and it placed orders for the rest with another wholesale shipper. These substitute packages were being shipped as early as December 17 or 18, 1999. Even after the fact, Dooley failed to inform Spyke's Grove that it had, in effect, repudiated the existing shipment contracts between them. Having no knowledge of Dooley's actions, Spyke's Grove packaged and shipped all of the gift fruit that Dooley had ordered pursuant to the contracts entered into before December 12, 1999. The Inevitable Dispute On January 27, 2000, Spyke's Grove sent three invoices to Dooley seeking payment for most of the citrus shipped pursuant to Dooley's orders. These bills totaled $3,242.55. A fourth and final invoice, for $70.57, was sent on February 18, 2000. Combined with the other bills, this last brought the grand total to $3,313.12. Each of these invoices contained the following boilerplate "terms": Net 14 days prompt payment is expected and appreciated. A 1 1/2% monthly service charge (A.P.R. 18% per annum) may be charged on all past due accounts. Customer agrees to pay all costs of collection, including attorneys [sic] fees and court costs, should collection efforts ever become necessary. Dooley did not remit payment or otherwise respond to Spyke's Grove's statements. Accordingly, on June 20, 2000, Spyke's Grove sent a letter to the Department requesting assistance. Dooley was provided a copy of this letter. On June 30, 2000, Dooley sent a letter to Spyke's Grove in which it explained the reasons why Dooley believed Spyke's Grove was not entitled to full payment of $3,313.12. Dooley had decided, unilaterally, that a deduction of $1,723.53 was in order. In its letter, Dooley described the remaining balance of $1,589.59 as the "final total payment," and a check for that amount was enclosed therewith. Nothing in Dooley's letter fairly apprised Spyke's Grove that the check for $1,589.59 was being tendered, in good faith, in full satisfaction of Spyke's Grove's demand for payment of $3,313.12. No language in that June 30, 2000, letter so much as hinted that Spyke's Grove's acceptance of the check would be considered a manifestation of assent to Dooley's position or an agreement to accept the lesser sum in satisfaction of a greater claim. In short, the parties did not make a mutual agreement, either expressly or by implication, to settle Spyke's Grove's claim for a total payment of $1,589.59. Spyke's Grove was entitled to accept Dooley's check for $1,589.59 as a partial payment against the total indebtedness, and it did. Shortly thereafter, Spyke's Grove filed a Complaint with the Department, initiating the instant proceeding. Ultimate Factual Determinations Dooley's refusal to pay in full for the goods it ordered from Spyke's Grove constituted a breach of the contracts between the parties. Spyke's Grove did not materially breach the agreements, nor was the indebtedness discharged pursuant to an accord and satisfaction. Spyke's Grove has suffered an injury as a result of Dooley's breach. Spyke's Grove's damages consist of the principal amount of the debt together with pre-award interest at the statutory rate, less the partial payment that Dooley made on June 30, 2000. Accordingly, Spyke's Grove is entitled to recover the following amounts from Dooley: Principal Due Date Statutory Interest $3,242.55 2/10/99 $ 18.66 (2/10/99 - 3/03/99) $ 70.57 3/04/99 $3,313.12 3/04/99 LESS: <$1,589.59> $ 437.56 (3/04/99 - 6/29/00) $1,723.53 6/30/00 $ 86.89 (6/30/00 - 12/31/00) $ 157.92 (1/01/01 - 10/31/01) $1,723.53 $ 701.03 Interest will continue to accrue on the outstanding balance of $1,723.53 in the amount of $0.52 per day from November 1, 2001, until the date of the final order.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department enter a final order awarding Spyke's Grove the sum of $1,723.53, together with pre- award interest in the amount of $701.03 (through October 31, 2001), plus additional interest from November 1, 2001, until the date of the final order, which will accrue in the amount of $0.52 per day. DONE AND ENTERED this 12th day of October, 2001, in Tallahassee, Leon County, Florida. COPIES FURNISHED: JOHN G. VAN LANINGHAM Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 12th day of October, 2001. Barbara Spiece, President Spyke's Grove, Inc. 7250 Griffin Road Davie, Florida 33314 Diane M. Houghtaling, Vice President Dooley Groves, Inc. 1651 Stephens Road Post Office Box 7038 Sun City, Florida 33586-7038 Reliance Insurance Company Three Parkway Philadelphia, Pennsylvania 19102 Honorable Charles H. Bronson Commissioner of Agriculture Department of Agriculture and Consumer Services The Capitol, Plaza Level 10 Tallahassee, Florida 32399-0810 Richard D. Tritschler, General Counsel Department of Agriculture and Consumer Services The Capitol, Plaza Level 10 Tallahassee, Florida 32399-0810 Brenda D. Hyatt, Bureau Chief Department of Agriculture and Consumer Services 500 Third Street Northwest Post Office Box 1072 Winter Haven, Florida 33882-1072
The Issue The primary issue in this hearing was the existence of a contract between M. Stembridge and Jack's Fruit Company under which monies were owed Stembridge.
Findings Of Fact Prior to August 5, 1974, Mrs. Barbara Stembridge, who was in the grove caretaking business, called Mr. Jack Goldtrap by telephone relative to the sale of citrus fruit on properties managed by her for her mother-in-law and herself. Their discussion regarding the sale of the fruit and the terms was incorporated with the contract, Exhibit 1, which Mr. Goldtrap sent to Mrs. Stembridge together with a check for $7500. Mrs. Stembridge executed the contract, accepted the check, and returned the executed contract to Mr. Goldtrap. This contract recites that Mr. Goldtrap had purchased " all fruit on the following groves at market price at time of picking less 50 cents plus picking cost". Thereafter the contract lists the groves subject to the contract: "Home Bloc, Poor Prospect and R. F. Stembridge grove." The testimony was uncontroverted that the fruit which is the subject of the instant controversy was located within the groves enumerated in the contract, however, Mrs. Barbara Stembridge stated that it had not been her intent to sell the fruit in controversy, but she was uncertain whether this was communicated to Mr. Goldtrap prior to the execution of the contract. Mr. Goldtrap testified that he felt he had purchased all the fruit on the groves as stated in the contract. The Hearing Officer finds that the contract, Exhibit 1, takes precedent over any prior verbal agreement between the parties to the contract and that Mr. Goldtrap purchased all fruit in the grove identified therein. Mrs. Barbara Stembridge and R. M. Stembridge testified that subsequent to the written contract with Mr. Goldtrap that R. M. Stembridge entered into an oral agreement to purchase the fruit in controversy from Mrs. Stembridge (the mother of R. M. Stembridge and mother-in-law of Mrs. Barbara Stembridge, who is the sister-in-law of R. M. Stembridge). R. M. Stembridge desired the fruit for sale in his roadside stand at his service station, and planned to pick the fruit in controversy himself on a piecemeal basis over several months. Pursuant to her mother-in-law's Instructions, Mrs. Barbara Stembridge contacted T. G. Mixon, a field superintendent with 31 years experience to estimate the value of the fruit in controversy. T. G. Mixon looked at the trees and crop in controversy late in 1974 and estimated in value to R. M. Stembridge as $3/box; however, he qualified his estimate stating that this was only a valid estimate of its value to R. M. Stembridge based on his particular intended use and that its market value was no where near that figure. R. M. Stembridge paid the agreed upon price of $900 to his mother-in-law for the fruit in controversy. Prior to picking the fruit he had purchased, Mr. Goldtrap visited the groves and was shown the groves, their boundaries, and the fruit in controversy by Mrs. Barbara Stembridge's foreman. This fruit was red grapefruit which is generally unsuitable for juice production. Such fruit cannot be economically picked for juice because there is no market for the unacceptable fruit. Mr. Goldtrap was advised by Mrs. Stembridge's foreman that Mr. Stembridge was interested in the fruit. Mrs. Barbara Stembridge testified that she thought that her foreman had told an unknown person that the red grapefruit had been promised to her brother-in-law. Mr. Goldtrap decided not to pick the red grapefruit, but to leave the fruit on the trees, and instructed his picking crew supervisors to check with R. M. Stembridge to determine which of the fruit be desired. In addition to the red grapefruit in controversy, R. M. Stembridge also had agreed to purchase white grapefruit from approximately 10 trees adjoining his service station, a fact unknown to Mr. Goldtrap or his supervisors. When the supervisors called on Mr. Stembridge to find out which trees should be spared, Stembridge thinking that they were referring to the white grapefruit trees near his station and that they had been shown the red grapefruit trees by his sister-in-law's foreman told them to begin their picking and when they got down to the station he would show them the trees to spare. Mrs. Barbara Stembridge's foreman did not instruct the picking supervisors and the picking crew picked the red grapefruit in controversy. When Mr. Stembridge became aware of the reds having been picked, he contacted Mr. Goldtrap. Mr. Stembridge was very irate and Mr. Goldtrap was very apologetic not fully realizing how the fruit had been picked when it had been his intent to spare the fruit. At this point, Stembridge demanded $3/box for the fruit, and Mr. Goldtrap stated that was a high price. Thereafter, in either this conversation or a subsequent one, Stembridge stated perhaps he knew a man who would buy them, however, when contacted this individual was not interested. When Goldtrap was advised of this, Goldtrap said he would send another truck and collect the red grapefruit. The issue presented in this controversy, therefore, becomes a question of whether there was a transaction between Mr. Goldtrap and Mr. R. M. Stembridge. It is clear from the contract, Exhibit 1, that Mr. Goldtrap owned the fruit in question at the time Mr. Stembridge "purchased" the fruit from his mother. Goldtrap intended to leave the fruit because of it low value and instructed his supervisors to contact Stembridge so that Stembridge could identify the trees in which be was interested. However, these trees were not identified by Stembridge because Stembridge thinking the supervisors were referring to the white grapefruit trees, did not indicate the trees he desired. Therefore, Goldtrap's intent to relinquish his right to the fruit was never effectively communicated to Mrs. Barbara Stembridge or to R. M. Stembridge. Mr. Stembridge's demand for $3/box for the grapefruit was in essence a demand for damages and not an offer for sale. Even if it were viewed as an offer (overlooking Stembridge's lack of ownership), there is no evidence that Goldtrap accepted the offer. His response was to advise Stembridge that he would send another truck to pick up the fruit. This action was consistent with his prior contract with Barbara Stembridge to purchase all the fruit in the groves and his legal obligation. See Section 601.64(3), Florida Statutes. The testimony was clear that Mr. Goldtrap had not paid out the moneys received from the sale of the red grapefruit because of the questions raised by R. M. Stembridge. However, Barbara Stembridge has filed no complaint in this matter, and based upon the foregoing findings that there is no transaction or contract between R. M. Stembridge and Goldtrap, R. M. Stembridge is not entitled to an accounting or to payment for the fruit in controversy.
The Issue Whether Respondent's, Department of Citrus, proposed changes to Rules 20-71.005, 20-71.006, and 20-72.009, Florida Administrative Code, are invalid exercises of delegated legislative authority.
Findings Of Fact Based on the evidence and the testimony of witnesses presented and the entire record in this proceeding, the following findings of fact are made: In Florida, all citrus processing plant operations are under continuous inspection by USDA inspectors as a result of a Cooperative Agreement, which has an effective date of July 1, 1968, between the Consumer and Marketing Services (now known as Agricultural Marketing Services), the USDA, and the Florida Department of Agriculture (now known as Department of Agriculture and Consumer Services). By its terms, the Cooperative Agreement contemplates that the State of Florida agency (Respondent herein) may develop standards for processed citrus products under authority granted by Florida state law. As such, Respondent establishes policy and the USDA implements the policy established by Respondent. Since 1949, Chapter 601, Florida Statutes (the "Florida Citrus Code"), has vested Respondent with general and specific legislative authority to inspect, grade, develop minimum quality and maturity standards, and to do myriad other things to ensure the quality of processed citrus products. In addition, the Florida citrus industry has implemented internal quality control testing and standards in an effort to instill consumer confidence in Florida citrus products. Not unlike many other segments of commerce, the Florida citrus industry has evolved from small, local operators to large multi-state conglomerates. Innovation and consolidation has resulted in new products, production techniques, and citrus processing methodology. Where bulk concentrate was stored in 55-gallon drums in the 1950s, it is now stored in 100,000-gallon tanks, and can be transported in huge container trailers towed by semi-tractors. As the Florida citrus industry has changed, so too has governmental and internal testing for product wholesomeness, maturity, grade, and safety. Upon delivery to a citrus processing plant, all citrus fruit is tested for wholesomeness and maturity before it is processed. This initial inspection is accomplished by the arbitrary selection of approximately 38-45 pounds of citrus from throughout a 500-box load. If the citrus passes this initial testing, it proceeds to be processed. Processed citrus product is later tested for grade and, finally, undergoes microbial, pathogen, and safety testing by the Food and Drug Administration. In addition, processors undertake private testing to assure particular quality assurance. In 2001, the Florida Legislature repealed Subsection 601.48(1), Florida Statutes, and, as a result, deleted the statutory requirement for inspections of grade standards in registered citrus processing plants. The repeal of Subsection 601.48(1), Florida Statutes, eliminated legislative direction for a grade inspection; however, there remained other inspection requirements. Section 601.49, Florida Statutes, provides that it is unlawful for any person to sell or transport canned or concentrated products unless the same has been inspected and accompanied by a certificate of inspection or manifest indicating that an inspection has taken place. Subsection 601.48(3), Florida Statutes, exempts intrastate shipment of processed citrus products between licensed citrus fruit dealers who operate processing plants from grade labeling requirements. In 2000, Respondent, by Rule 20-71.005, Florida Administrative Code, established manifest requirements and statements for in-state transport of processed citrus products between registered facilities owned by the same processor. This was the precursor to the proposed rule changes, which are the subject of this rule challenge. Proposed Rule 20-71.005, Florida Administrative Code, allows the intrastate transport of bulk processed citrus products between registered facilities, eliminating the requirement that both facilities be owned by the same individual or entity and establishes informational requirements for the shipping manifest. One of the informational requirements for the shipping manifest established in the proposed rule is a certified statement that "the processed citrus products are being transported in bulk as processor grade." "Processor grade" is a new designation. Proposed Rule 20-71.006, Florida Administrative Code, establishes manifest requirements for transport of processed citrus products with the exception of bulk processed citrus product shipments specified in Rule 20-71.009, Florida Administrative Code. Proposed Rule 20-71.009, Florida Administrative Code, authorizes an inspector to issue a certificate of processor grade, which reflects that the bulk processed citrus product has been inspected for wholesomeness and maturity and ensures that the bulk processed citrus product will be inspected and/or re- graded before final shipment. The proposed rules reflect changes that are taking place in citrus processing methodology; the rule changes ensure that inspection as required by Section 601.49, Florida Statutes, takes place.
