The Issue The issues are whether Respondent Delicious Citrus Packing, LLC (Respondent), as a citrus fruit dealer, has failed to pay Petitioner for citrus fruit, as required by section 601.64(4), Florida Statutes; and, if so, the amount that Respondent owes Petitioner.
Findings Of Fact Respondent holds a Citrus Fruit Dealer's License number 252, effective August 31, 2015, for the 2015-16 season. The surety is Respondent Platte River Insurance Company. During the 2015-16 season, Petitioner picked citrus fruit from the groves of various third parties and transported the fruit to Respondent, which cleaned, waxed, and graded the fruit prior to selling it to various retailers, primarily, it seems, in South Florida. During the 2014-15 season, Petitioner and Respondent entered into contracts covering their respective rights and obligations in connection with transactions identical to those set forth in the preceding paragraph. An example is a contract dated April 10, 2015, signed by Petitioner and Respondent, specifying that Petitioner would purchase from a named third party from a named portion of a grove approximately 2000 citrus fruit for a delivered price of $16 per box with payment due upon delivery. The contract provides that Petitioner makes no allowance for fruit not meeting Respondent's specifications because Respondent had examined and preapproved the fruit on the tree. The parties did not document their agreement during the 2015-16 season, but the conditions were identical, although the price per box decreased, as set forth below. As was their practice during the preceding season, prior to the purchase and delivery by Petitioner, representatives of both companies visited the grove with the fruit still on the tree, and Respondent's representative approved the fruit, so, again, the agreement permitted no allowances for nonconforming fruit. Petitioner produced trip tickets documenting the delivery of 791 boxes of citrus fruit--all oranges--from September 25, 2015, through October 24, 2015. At this point, representatives of Petitioner and Respondent met to discuss the price of the fruit. Respondent complained that the fruit was too expensive based on what it could charge its purchasers, so Petitioner went back to the grove owners and negotiated a reduction in price. On November 2, 2015, Petitioner agreed to reduce its price from an undisclosed price per box to $15.50 per box, so as to reduce the outstanding balance for the 7791 boxes already delivered to $120,760.50. At that time, Respondent paid $85,250.50, leaving a balance due of $35,510. The parties promptly resumed their business dealings. A trip ticket dated November 2, 2015, documented the delivery of 550 boxes, for which the agreed-upon price was the $15.50 that the parties had set for the previous deliveries. However, even this price proved too high for Respondent, so the next two trip tickets, dated November 3 and 4, 2015, for a total of 1072 boxes, were priced at $13.50 per box. At some point, Respondent made two payments totaling $8811, and Respondent processed other fruit for Petitioner, earning a total credit of $2486 to be applied to the outstanding balance. These transactions reduced the balance to $47,210, which is the amount that Respondent presently owes Petitioner. The finding in the preceding paragraph reduced Petitioner's claim by $7157. As shown on the invoice dated April 6, 2016, received into evidence as Petitioner Exhibit 5, this balance was carried forward from the 2014-15 season. As explained in the Conclusions of Law, this case is limited to the 2015-16 season due to the timing of the filing of the Complaint. The findings in the preceding paragraphs discredit the testimony of Respondent's witnesses as to bad fruit that could not be sold. First, Respondent bore the risk of fruit that could not be sold for any reason, including spoilage. Second, Respondent did not assert this complaint when it negotiated a new purchase price on November 2, 2015. Third, Respondent did not object to the series of invoices that Petitioner submitted to Respondent, culminating in the April 6 invoice. Fourth, the testimony of Respondent's owner was vague and confusing, but twice seemed to confirm the indebtedness.
Recommendation It is RECOMMENDED that the Department of Agriculture and Consumer Services enter a final order determining that Respondent has violated section 601.64(4) by failing to pay Petitioner the sum of $47,210 for citrus fruit that Petitioner sold to Respondent during the 2015-16 shipping season and fixing a reasonable time within which Respondent shall pay such sum to Petitioner. DONE AND ENTERED this 6th day of March, 2017, in Tallahassee, Leon County, Florida. S ROBERT E. MEALE Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 6th day of March, 2017. COPIES FURNISHED: W. Alan Parkinson, Bureau Chief Bureau of Mediation and Enforcement Department of Agriculture and Consumer Services Rhodes Building, R-3 2005 Apalachee Parkway Tallahassee, Florida 32399-6500 (eServed) Emmitt King, Jr. KAD Harvesting and Hauling, LLC 850 South 21st Street Fort Pierce, Florida 34950 Platte River Insurance Company Attn: Claims Department Post Office Box 5900 Madison, Wisconsin 53705-0900 Douglas A. Lockwood, Esquire Straughn & Turner, P.A. 255 Magnolia Avenue Southwest Post Office Box 2295 Winter Haven, Florida 33880 (eServed) Dwight Johnathan Rhodeback, Esquire Rooney & Rooney, P.A. 1517 20th Street Vero Beach, Florida 32960 (eServed) Lorena Holley, General Counsel Department of Agriculture and Consumer Services 407 South Calhoun Street, Suite 520 Tallahassee, Florida 32399-0800 (eServed) Honorable Adam Putnam Commissioner of Agriculture Department of Agriculture and Consumer Services The Capitol, Plaza Level 10 Tallahassee, Florida 32399-0810
The Issue 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 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 1993-1994 citrus 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 executed by Co-Respondent should be paid to Petititioner pursuant to Section 601.66, Florida Statutes.
Findings Of Fact Petitioner, BBC & F Corporation, Inc., is a Florida corporation located in Zolfo Springs, Florida, which is in the business of buying and selling citrus fruit. Charles J. "Chuck" Young is the vice-president and a director of Petitioner. Respondent, Jim Robinette, is a citrus fruit dealer with an office in Lakeland, Florida, who was licensed during the 1993-1994 citrus shipping season by the Florida Department of Agriculture and Consumer Affairs. Co-Respondent, Aetna Casualty and Surety Company, is a surety company qualified to do business in Florida, which pursuant to Section 601.61, Florida statutes, executed Respondent's citrus fruit dealer's bond for the 1993-1994 citrus shipping season in the amount of $5,000.00. On or about March 1, 1994, Petitioner, by and through its director and representative, Charles J. "Chuck" Young, entered into an oral contract with Respondent for the sale and delivery of certain citrus fruit from Petitioner's grove in Dundee, Florida. At that time, Respondent had made a prior agreement with the Redi-Made Foods Corporation to supply citrus fruit to Redi-Made's facility in Tampa, Florida. Specifically, the contract between Petitioner and Respondent provided for the purchase of valencia oranges to be used as salad fruit. The fruit was to be delivered by Petitioner to Redi-Made's facility in Tampa, Florida. The initial terms of the contract provided for a purchase price of $10 per box for fruit delivered to Redi-Made. Of the $10 contract price, $7 was for the grower (Petitioner), $1.90 was to cover the harvesting costs, $.25 was a brokerage fee paid to James Porter of Redi-Made, and $.85 was for Respondent. The first few loads were delivered to Redi-Made and paid for at the contract price of $10 per box. Subsequent to the delivery of the initial few loads, the terms of the contract were amended to incorporate a deduction of $.20 per box of fruit delivered for the purpose of expediting the processing of the payments from Redi-Made. The Petitioner and Respondent agreed to share equally this reduction from the original price. Accordingly, under the amended terms of the contract, Petitioner would receive $6.90 per box delivered, the harvesting costs remained at $1.90 per box delivered, the payment to James Porter remained at $.25 per box delivered, and the Respondent would receive $.75 per box delivered. In accordance with the terms of the amended contract, Petitioner during March of 1994, delivered six loads of valencia oranges totalling 2210 boxes to Redi-Made for which payment has not been made by Respondent. Under the terms of the amended contract, Petitioner is owed $15,249 for the fruit delivered. In addition, Petitioner paid for the harvesting costs of the fruit, for which under the terms of the amended contract, Petitioner is owed $4,199. Respondent was paid by Redi-Made for three of the six loads. These loads are evidenced by trip tickets 70144, 70146 and 82960, and show that 930 boxes of fruit were delivered by Petitioner to Redi-Made; however, Redi-Made paid Respondent for only 890 boxes of this fruit, and did not pay Respondent for the remainder of the 2210 boxes of fruit delivered by Petitioner. There is an ongoing dispute between Respondent and Redi-Made regarding Redi-Made's failure to make payment for the remainder of the fruit; however, resolution of the Respondent's dispute with Redi-Made is independent of, and does not affect the obligations of the Respondent with respect to Respondent's contract with Petitioner.
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 $19,488.00, 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, the proceeds of the citrus fruit dealer's bond executed by Co-Respondent shall be distributed to Petitioner. RECOMMENDED in Tallahassee, Leon County, Florida, this 9th 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 9th day of May, 1995. APPENDIX Petitioner's Findings 1.-3. Adopted and Incorporated COPIES FURNISHED: Commissioner Bob Crawford Commissioner of Agriculture The Capitol, P1-10 Tallahassee, Florida 32399-0810 Brenda Hyatt, Chief Department of Agriculture and Consumer Services Mayo Building, Room 508 Tallahassee, Florida 32399-0800 Richard Tritschler, Esquire Department of Agriculture and Consumer Services The Capitol, PL-10 Tallahassee, Florida 32399-0810 Allan L. Casey, Esquire Post Office Box 7146 Winter Haven, Florida 33883-7146 Jim Robinette 2025 Sylvester Road, Suite J4 Lakeland, Florida 33803
The Issue What is the amount owed by D. L. Scotto and Company, Inc., d/b/a Tuxedo Fruit Company, to Thomas E. Davis, Inc., for Valencia oranges purchased in January, April, and May 2013?
Findings Of Fact A "dealer in agricultural products" is defined as a person, partnership, corporation, or other business entity, "engaged within this state in the business of purchasing, receiving, or soliciting agricultural products from the producer . . . for resale or processing for sale " § 604.15(2), Fla. Stat. (2013).1/ Respondent is licensed as a dealer in agricultural products. Petitioner is a "producer" for purposes of sections through 604.34, Florida Statutes. See § 604.15(9), Fla. Stat. (defining "producer" as "any producer of agricultural products produced in the state"). Contract #077 On January 25, 2013, Petitioner and Respondent entered into citrus fruit contract #077 wherein Respondent, for the price of $9.50 per box, agreed to purchase 5,000 boxes of Valencia oranges from Petitioner's Cock Pen grove. Petitioner delivered, and Respondent accepted, 2,925 boxes of the promised oranges. To date, Respondent has only paid Petitioner for 1,962 ($9.50 x 1,962 = $18,639) boxes of oranges from the Cock Pen grove. Contract #078 On January 25, 2013, Petitioner and Respondent entered into a second citrus fruit contract (#078) wherein Respondent, for the price of $9.50 per box, agreed to purchase 4,500 boxes of Valencia oranges from Petitioner's Patrick grove. Petitioner delivered, and Respondent accepted, 2,988 boxes of the promised oranges. To date, Respondent has only paid Petitioner for 792 ($9.50 x 792 = $7,524) boxes of oranges from the Patrick grove. Contract #M012 On April 25, 2013, Petitioner and Respondent entered into a third citrus fruit contract (#M012) wherein Respondent, for the price of $11.00 per box, agreed to purchase 1,200 boxes of Valencia oranges from Petitioner's Johnson grove and 1,500 boxes of Valencia oranges from Petitioner's Allegato grove. Petitioner delivered, and Respondent accepted, 1,161 boxes of the promised oranges from the Johnson grove and 1,296 boxes of oranges from the Allegato grove. To date, Respondent has not paid Petitioner for the oranges received from the Johnson and Allegato groves. Contract #M013 On May 2, 2013, Petitioner and Respondent entered into a fourth citrus fruit contract (#M013) wherein Respondent, for the price of $11.00 per box, agreed to purchase 1,500 boxes of Valencia oranges from Petitioner's Tommy Ann grove. Petitioner delivered, and Respondent accepted, 1,674 boxes of the promised oranges from the Tommy Ann grove. To date, Respondent has not paid Petitioner for the oranges received from the Tommy Ann grove. Respondent's defense Each of the citrus fruit contracts at issue provides that the oranges "must be merchantable for fresh usage at the time of harvest and delivery." Respondent claims that significant quantities of the oranges that were received from Petitioner were not merchantable for fresh usage at the time of harvest and delivery. In reviewing the documentary evidence presented by both parties, it is evident that Petitioner's oranges were harvested and delivered to Respondent during the months of January through May 2013. From this period forward to the date of the final hearing held herein, Respondent never informed Petitioner that there was an issue with the merchantability of the oranges. Instead, whenever Petitioner contacted Respondent about the status of payment for the oranges, Respondent repeatedly assured Petitioner that payment was forthcoming. Respondent's testimony regarding the alleged compromised merchantability of the oranges that he received from Petitioner is not credible.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Agriculture and Consumer Services enter a final order finding that D. L. Scotto and Company, Inc., d/b/a Tuxedo Fruit Company, is indebted to Thomas E. Davis, Inc., in the amount of $75,501.50 (includes filing fee) for the balance due for the oranges it purchased from Petitioner on January 25, April 25, and May 2, 2013. DONE AND ENTERED this 17th day of April, 2014, in Tallahassee, Leon County, Florida. S LINZIE F. BOGAN Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 17th day of April, 2014.
The Issue The issue in this case is whether the licensure application filed by Petitioner, Sun and Earth Citrus, LLC ("Sun and Earth"), for licensure as a citrus fruit dealer should be denied or approved by the Florida Citrus Commission (the "Commission").
Findings Of Fact Sun and Earth is a Florida limited liability company formed for the purpose of buying and selling citrus products. Vazquez is the sole owner of Sun and Earth and serves as its president. The company was formed in January 2012. Vazquez formed the company partly in response to a series of events concerning his brother, William. A discussion of those facts is pertinent to the underlying facts in this case: William operated businesses named Zumoval Citrus Packer and Zumoval Trucking and Cold Storage. William obtained a license to operate a packinghouse after seeing other dealers acting in a way he believed to be illegal. He renewed the license each year for two years, but when he attempted to renew the third year, his application was denied. At the Commission meeting where William's renewal application was considered, Vazquez appeared on William's behalf because William could not adequately articulate his position. The meeting did not go well for William; Vazquez had to calm William down and keep him from yelling at the commissioners during the meeting. The meeting date was January 18, 2012. After the meeting at which William's license renewal was denied, Vazquez announced to Department employees that because his brother could not be licensed, Vazquez would seek his own license. Inasmuch as Vazquez had appeared on William's behalf, and they were siblings, the Department had some concern that Vazquez's application was a subterfuge and simply an attempt to allow William to operate using Vazquez's license. On March 2, 2012, Vazquez filed an application with the Department; it was received on March 6, 2012. The application, as filed, said the proposed business would include operation of a packinghouse, being a fruit broker, operating a roadside stand, and being a wholesaler. The application contained information about Sun and Earth, as well as its owner, Vazquez. An application fee of $25.00 and a cashier's check in the amount of $1,000.00 for a bond were included with the application. Upon its initial review of the application, the Department noticed several errors and omissions. Ms. Wiggins, a license and regulation specialist for the Department, contacted Vazquez via telephone on March 6, 2012, to discuss her findings concerning the application content. She told Vazquez that a substantially larger bond was required for a license that included a packinghouse. She also noted that if the proposed roadside stand was purchasing fruit directly from a grower, then it must also have a bond. If the fruit was being purchased from a packinghouse, no bond would be required. Ms. Wiggins asked Vazquez to identify the packinghouse(s) from whom he intended to purchase fruit. The purpose of her request was to verify that fruit was being purchased from a packinghouse, rather than from a grower. Vazquez sent Ms. Wiggins an email the very next day confirming the telephone discussion. Vazquez, in response, asked that the packinghouse designation be removed from his application. He also stated that according to everything discussed during their telephone conversation, it was his contention that the application was complete. He then questioned why his brother's company--which had recently been denied renewal of its license--was pertinent to his application for a citrus dealer license. Vazquez asked when his application would be considered by the Commission. Ms. Wiggins replied to the Vazquez email via an email dated March 8, 2012. The email noted that Ms. Wiggins had removed the packinghouse request from the application. It also addressed the need for different reference letters relating to Sun and Earth. Then the email set out five enumerated issues that still needed to be addressed, to wit: An explanation as to how he operated Zumoval Citrus, LLC, without a wholesaler license from 2009 to 2011. How Zumoval Citrus, LLC, continued doing business in 2011, when it became inactive in September 2010. An explanation of his probation or parole from New York State relating to a conviction for stolen property. A list of the packinghouses from which he would be purchasing fruit. An address for the roadside stand. Ms. Wiggins also advised Vazquez in her email that the Department could not grant a conditional approval of the application in that there were "unusual or questionable circumstances" surrounding the filing of the application. That is, the relationship between Vazquez and William caused some concern for the Department. Ms. Wiggins reminded Vazquez that the $1,000.00 bond submitted with the application would not be sufficient if Sun and Earth planned to purchase fruit from growers. She then advised Vazquez that if he would submit all the missing information at least five days prior to the Commission meeting scheduled for March 21, 2012, the application would be presented for review. Vazquez responded via email dated March 13, 2012. He provided responses to the five enumerated issues set forth in Ms. Wiggins' email as follows: He explained that neither of his companies continued to do business after they were declared inactive in September 2010. He explained that he had another business entity that was operating, but neither of the questioned businesses was in operation. Included in above response. Vazquez had presented evidence of his conviction in the application; he did not believe anything further was required. He was upset that Ms. Wiggins apparently had information from his other prior transgressions (more on this below) and wanted to know what information she had seen. Vazquez refused to provide names of the packinghouses with whom he planned to do business. He stated that the inquiry was outside of Ms. Wiggins' "scope of duties," and he did not have to comply with her request. He asked that the roadside stand designation be removed from the application. Vazquez's email then became somewhat belligerent and argumentative. He concluded with a demand that his application be presented to the Commission on March 21, 2012. The reason Ms. Wiggins had asked Vazquez for a list of the packinghouses he planned to do business with was two-fold: First, Vazquez had indicated he planned to have a roadside stand. If the stand was going to get its fruit from a grower, then a larger bond would be required. If the fruit was to come from packinghouses, then there would be no bond requirement. Ms. Wiggins attempted to ascertain whether Vazquez was planning to obtain fruit from packinghouses. Second, due to Vazquez first indicating he would operate a packinghouse and then removing that designation, Ms. Wiggins wanted to make sure he was being honest and truthful in his responses. Citrus dealers by and large police themselves, so it is important that the Department know they can trust entities to which they issue licenses. By striking the roadside stand item from his application, Vazquez still did not alleviate the basis for Ms. Wiggins' questions about packinghouses. The Department decided that because of the questionable and unusual circumstances surrounding Vazquez's application, it would not issue a conditional license. Rather, it would process the application and send it on to the Commission for review and approval or denial. After further review, the Department ultimately decided that it would recommend denial of the Sun and Earth application when it was forwarded to the Commission. Vazquez was notified of the decision by way of a letter dated May 3, 2012, sent by certified mail, return receipt requested. The letter advised Vazquez that he could challenge the decision in an administrative hearing. Vazquez chose to do so, thereby staying any further action on the application until a final order could be issued in the instant proceeding. The basis of the Department's decision was that the Sun and Earth application had misrepresented Vazquez's circumstances with respect to his work history, residence, and criminal background. Further, Vazquez had been reluctant to respond to requests for information after reasonable inquiry by the Department. As to Vazquez's reported work history as set forth in the application, Vazquez had initially provided a work history summary in response to question 18. The response indicated employment from March 2007 until January 2011 with Associated Produce in Bronx, New York. In fact, Vazquez was incarcerated in New York for most of that time period. An amended response to question 18 was submitted; it did not list Associated Produce as a former employer. Vazquez explained the erroneous information thusly: The dates of employment were taken directly from his resume. His resume was attached to the application only to show his employment duties, not as evidence of the dates he actually worked. It was simply a mistake, said Vazquez, not an attempt to mislead the Department. Vazquez's testimony in this regard was self-serving and not credible. As to his history of residence in the state, the application said Vazquez had lived at the same address in Florida for the past five years. In truth, Vazquez was in prison in New York and did not move to Florida until 2009. Again, Vazquez said that was simply a mistake and was not meant to mislead the Department. Again, the testimony provided by Vazquez as to this issue was not credible. The issues concerning Vazquez's criminal history are more complex. Question 10 in the application asks for information concerning investigations, charges, arrests or convictions "in the last 10 years." Vazquez provided information concerning an arrest in October 2010 for carrying a concealed weapon. He also provided the Order acquitting him of the charge. The arrest report references probation for a conviction of possession of stolen property in New York. The Department, during its background check of Vazquez, found that he was on parole. Vazquez was asked to clarify the probation versus parole discrepancy. He explained that between the arrest and acquittal, his parole officer had submitted a violation of parole, but that was lifted after his acquittal. The Department's concern about Vazquez's relationship with his brother was founded on the fact that Vazquez represented William before the Commission just prior to the filing of the Sun and Earth application. That representation preceded Vazquez's remark to a Department employee that if his brother could not have a license, he would seek one himself. The statement put the Department on notice that the brothers may be trying to circumvent William's loss of his license. At final hearing, it was evident the brothers had no such intent. In fact, William was not cooperative with Vazquez's efforts to obtain a license that would, in effect, compete with William's business. The Department also raised a concern about the letters of reference received in support of the Sun and Earth application. Normally, the Department would forward Letter of Reference forms to businesses, and they would be returned directly to the Department. In this case, Vazquez took the letters to business owners himself. There is nothing inherently improper about doing this, but it caused some concern to the Department in a case where red flags had already been raised. Ms. Wiggins had never had an applicant refuse to answer questions during the application process. When Vazquez raised his "scope of work" objections, Ms. Wiggins was taken aback. Vazquez, an admitted novice in the citrus business, basically told the Department how to do its job. Faced with this very unique situation, Ms. Wiggins then asked her supervisor to become involved in the application review so that it would be done completely in accordance with Department rules. After the March 13, 2012, email from Vazquez, it was decided that the Department legal counsel should also be involved. The Department was justifiably concerned about the propriety of the Sun and Earth application. Citrus dealers are generally self-governing, and the Department began to have concerns that Vazquez could not be trusted. That, in and of itself, was sufficient basis for the recommendation of denial of Vazquez's application. Vazquez admitted to being less than forthright with the Department on his application. He withheld information that he believed the Department could easily obtain on its own. He refused to answer questions that he did not believe were relevant. He would not cooperate with inquiries made into issues about his past. He disagreed that his affiliation with his brother's company was relevant, so he stonewalled all inquiries about that issue. All in all, Vazquez--the applicant for a license--refused to provide information and assistance to the entity which was reviewing his application. While he may have had his personal reasons for his actions, what he did was not conducive to obtaining approval from the Department. Thus, his application was given a recommendation for denial.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered by the Department of Citrus/Florida Citrus Commission, denying Sun and Earth's application. DONE AND ENTERED this 30th day of August, 2012, in Tallahassee, Leon County, Florida. S R. BRUCE MCKIBBEN 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 August, 2012.
The Issue Whether Respondent, a citrus dealer, owes Petitioner, a citrus producer/grower, compensation for breach of a contract to buy, pick, haul, and sell fruit from Petitioner’s grove. If so, what is the reasonable amount of compensation.
Findings Of Fact Mecca includes a thirty-six acre Murcott tangerine grove in Lakeworth, Florida, purchased by Leonard Mecca in 2003. Murcott tangerines are primarily sold as fresh fruit. Through its owner, Mr. Mecca, Petitioner entered into a contract, on January 3, 2006, Emerald to pick fruit from the grove by April 10, 2006. Old Republic Surety Company is surety on the contract performance bond for $59,000.00, the maximum amount of compensation that can be recovered, if any. On behalf of Emerald, Keith Emmett, a fruit buyer with 25 years of experience, personally visited the Mecca grove and, on January 3, 2006, estimated the number of boxes of fruit at 5,000 boxes and sales price at $14.00 a box. Mr. Emmett’s estimate was the basis for the terms of the contract that was accepted by Mr. Mecca. Mr. Mecca also testified that he contracted with another organization, River Citrus, to be the caretaker of the grove. Mr. Mecca’s contract with Emerald included the statement that “[g]rower agrees to keep said fruit clean and to protect said fruit against fire, and to dust, spray and fertilize the same in such a manner that will not cause injury to said fruit or groves.” Emerald was, under the terms of the contract, required to pay for all “merchantable” fruit at picking time. At sometime in February or March, Mr. Mecca (not his caretaker) discovered that the irrigation system at the grove was not working. Mr. Mecca testified that he had the system repaired within two days. Weed control at the grove was to be done by the use of herbicides and mowing. Mr. Mecca testified that he had a conversation about the condition of the grove with Mr. Emmett, but only about water. Mr. Emmett visited the Mecca grove in late February or early March to see if the fruit was ready to pick to fill pending orders. He described the condition of the grove as having a “hard wilt,” meaning leaves curled, with soft, spongy green fruit. The weeds indicated to him an absence of mowing and herbicides. Mr. Emmett returned to the grove in April and described the fruit as still soft to the touch with a green cast. He also testified that he notified Mr. Mecca, in conversations through the month of March, that the grove needed watering and that the fruit was soft and needed more time. Mr. Mecca testified that he contacted Mr. Emmett several times in March and April to find out when the fruit would be picked because he believed it was getting overripe. Mr. Mecca testified that Mr. Emmett was waiting to pick the fruit late in the season when market prices rose enough to justify the $14.00 a box contract price. Mr. Mecca also testified regarding when he decided to stop negotiating with Emerald and to use another packing house, as follows: It had to be the day that Keith Emmett had his man, Bill Turner, call me to tell me that he was not going to be able to use the fruit unless I wanted -- to wait another two weeks. So -- which would have been around the 20th of April. Q. So that would have been the -- on or about the time that the -- you were informed that the fruit couldn’t be used as fresh fruit; is that correct? By Emerald? A. I was informed -- I was informed by Emerald that they didn’t want to pick any more fruit unless I wanted to wait two more weeks and try again, which was the story I heard every two weeks. Bill Turner, who was in charge of harvesting the fruit for Ridge Harvesting, previously had visited and inspected the Mecca grove in February, after Emerald received a report that the well was broken. He testified that he found wilted trees and lots of weeds. By the time he talked to Mr. Mecca about the condition of the grove, he recalled that the well had already been fixed. One load of 500 boxes of Mecca fruit was picked by Ridge Harvesting for Emerald on April 19, 2006, but failed to pass state inspection. Emerald, nevertheless, paid Mecca $14.00 a box for the 500 boxes, or $7,000.00, and on April 20, 2006, sent a letter to Mecca releasing the fruit back to Mecca and, in effect, terminating the January contract based on the poor condition of the fruit. The letter specified that the fruit was “. . . spongy, soft and indented from the weight of the fruit in the box.” Mr. Emmett testified that he suggested that Mr. Mecca agree to sell the fruit at lower prices for juice, rather than as fresh fruit. He testified that Mr. Mecca declined the offer and notified Mr. Emmett that he was going to use a different packing house. Donald Owens, a field buyer for Rio Citrus (Rio) had driven by the Mecca grove some time in April, and noticed that the fruit had not been picked. He was familiar with the grove, having picked it in prior years before it changed ownership. Mr. Owens searched out the new grower and called Mr. Mecca about picking the fruit, but was told that the fruit was under contract with another picker. On or about April 20, 2006, after Emerald’s representative notified him that they were not going to use the fruit, Mr. Mecca called Donald Owens back, met him at the grove and entered into a verbal contract for Rio to pick the fruit in what Mr. Mecca and Mr. Owens described as a “salvage operation.” When Donald Owens saw the grove, on or about April 20, 2006, he testified that the grass was high, the fruit was small but, he believed, within the criteria that you can pack as fresh fruit and otherwise merchantable. He testified that he told Mr. Mecca that, before he did anything, the grass had to be mowed. Mr. Owen’s company picked a total of 2,106 boxes of tangerines on April 24, April 25, May 1, and May 4, 2006, based on the dates on the trip tickets. Of those, according to Donald Owens and his settlement statements, 69 percent passed inspection and were packed to sell as fresh fruit, but 31 percent were so-called “eliminations” and had to be taken to a canning processing plant to be juiced. Mr. Owens testified that his company, Rio, stopped picking fruit because the canning processing plant stopped taking Murcotts. If Rio had continued, then he estimated that from 25 to 30 percent of the fruit would have ended up in cow pastures at a significant financial loss, considering the expense of picking, loading, hauling, separating, and hauling fruit by grade to a cow pasture. Rio paid Mecca approximately $12,000 for the fruit it picked and sold. The remaining fruit in the grove fell to the ground. In 2004, Emerald picked 9,000 boxes of fruit from the Mecca grove. Donald Owens, whose Rio company picked 2,106 boxes from a part of one of the three divisions of the grove, estimates that each of the three sections could have provided about 3,000 boxes each, or an approximate total of 9,000 boxes of fruit from the Mecca grove, of which approximately 6,000 remained after Rio stopped picking the fruit. In 2005, Mecca produced only 600 boxes of fruit due to hurricane damage and also because Murcott tangerines produce in large volumes every other year. In the Mecca contract with Emerald in 2006, Mr. Emmett estimated the number of boxes at 5,000 merchantable boxes for the 2006 growing season. Although Emerald picked 9,000 boxes in 2004, it is reasonable to believe that the yield would be lower after some trees were damaged during the hurricanes of 2005. The estimate and agreement made prior to this contractual dispute, 5,000 boxes, is accepted as the most reasonable estimate for the 2006 growing season. Stuart Arost, the owner of Emerald, testified that he had contracts to sell elimination Murcott tangerines through April and into the first part of May to canning plants in Umatilla and Haines City. One of those plants, he testified, is cooperative-owned and will take Murcotts as long as the owners are still harvesting the fruit, even into June. Emerald, more likely than not, could have sold the fruit for juice for $10.00 a box with net proceeds to Mecca of $8.00 a box if allowed to further revise the contract or mitigate damages. Mr. Arost testified that further damages could have been mitigated if Don Owens and Rio had continued to pick fruit and used the available processors for the elimination, but there is no evidence that Mr. Owens was aware of the alternative. The evidence, based on the testimony of all of the witnesses who entered the grove, supports a conclusion that some of the fruit in the grove was damaged due to lack of proper care, and that, more likely than not, resulted in the initial failure to pass inspection and the subsequent rate of eliminations. Although 500 boxes taken by Emerald failed USDA inspection, the fact that 2,106 boxes subsequently passed inspection indicates that Emerald correctly advised Mr. Mecca to wait another two weeks until about the time that Rio harvested the fruit rather than insisting that Emerald resume harvesting before the fruit was firm. While Mr. Mecca had agreed to the two-week extensions in the past, his refusal to agree on or about April 20, 2006, resulted in Emerald’s termination of the contract and his decision to use a different packing house.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law it is RECOMMENDED that a final order be entered denying any recovery by Petitioner Mecca Farms from Respondents Emerald Packing Company, Inc. and Old Republic Surety Company, as Surety. DONE AND ENTERED this 23rd day of January, 2007, in Tallahassee, Leon County, Florida. S ELEANOR M. HUNTER Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 23rd day of January, 2007. COPIES FURNISHED: Christopher E. Green Department of Agriculture and Consumer Services Office of Citrus License and Bond Mayo Building, M-38 Tallahassee, Florida 32399-0800 Franklin T. Walden, Esquire Law Offices of Franklin T. Walden 1936 Lee Road, Suite 100 Winter Park, Florida 32789 Eric Severson, Esquire Alley, Maass, Rogers & Lindsay, P.A. 340 Royal Poinciana Way, Suite 321 Palm Beach, Florida 33480-0431 Old Republic Surety Company Post Office Box 1635 Milwaukee, Wisconsin 53201 Richard D. Tritschler, General Counsel Department of Agriculture and Consumer Services 407 South Calhoun Street, Suite 520 Tallahassee, Florida 32399-0800 Honorable Charles H. Bronson Commissioner of Agriculture Department of Agriculture and Consumer Services The Capitol, Plaza Level 10 Tallahassee, Florida 32399-0810
The Issue Whether Respondent's, Department of Citrus, proposed changes to Rules 20-71.005, 20-71.006, and 20-72.009, Florida Administrative Code, are invalid exercises of delegated legislative authority.
Findings Of Fact Based on the evidence and the testimony of witnesses presented and the entire record in this proceeding, the following findings of fact are made: In Florida, all citrus processing plant operations are under continuous inspection by USDA inspectors as a result of a Cooperative Agreement, which has an effective date of July 1, 1968, between the Consumer and Marketing Services (now known as Agricultural Marketing Services), the USDA, and the Florida Department of Agriculture (now known as Department of Agriculture and Consumer Services). By its terms, the Cooperative Agreement contemplates that the State of Florida agency (Respondent herein) may develop standards for processed citrus products under authority granted by Florida state law. As such, Respondent establishes policy and the USDA implements the policy established by Respondent. Since 1949, Chapter 601, Florida Statutes (the "Florida Citrus Code"), has vested Respondent with general and specific legislative authority to inspect, grade, develop minimum quality and maturity standards, and to do myriad other things to ensure the quality of processed citrus products. In addition, the Florida citrus industry has implemented internal quality control testing and standards in an effort to instill consumer confidence in Florida citrus products. Not unlike many other segments of commerce, the Florida citrus industry has evolved from small, local operators to large multi-state conglomerates. Innovation and consolidation has resulted in new products, production techniques, and citrus processing methodology. Where bulk concentrate was stored in 55-gallon drums in the 1950s, it is now stored in 100,000-gallon tanks, and can be transported in huge container trailers towed by semi-tractors. As the Florida citrus industry has changed, so too has governmental and internal testing for product wholesomeness, maturity, grade, and safety. Upon delivery to a citrus processing plant, all citrus fruit is tested for wholesomeness and maturity before it is processed. This initial inspection is accomplished by the arbitrary selection of approximately 38-45 pounds of citrus from throughout a 500-box load. If the citrus passes this initial testing, it proceeds to be processed. Processed citrus product is later tested for grade and, finally, undergoes microbial, pathogen, and safety testing by the Food and Drug Administration. In addition, processors undertake private testing to assure particular quality assurance. In 2001, the Florida Legislature repealed Subsection 601.48(1), Florida Statutes, and, as a result, deleted the statutory requirement for inspections of grade standards in registered citrus processing plants. The repeal of Subsection 601.48(1), Florida Statutes, eliminated legislative direction for a grade inspection; however, there remained other inspection requirements. Section 601.49, Florida Statutes, provides that it is unlawful for any person to sell or transport canned or concentrated products unless the same has been inspected and accompanied by a certificate of inspection or manifest indicating that an inspection has taken place. Subsection 601.48(3), Florida Statutes, exempts intrastate shipment of processed citrus products between licensed citrus fruit dealers who operate processing plants from grade labeling requirements. In 2000, Respondent, by Rule 20-71.005, Florida Administrative Code, established manifest requirements and statements for in-state transport of processed citrus products between registered facilities owned by the same processor. This was the precursor to the proposed rule changes, which are the subject of this rule challenge. Proposed Rule 20-71.005, Florida Administrative Code, allows the intrastate transport of bulk processed citrus products between registered facilities, eliminating the requirement that both facilities be owned by the same individual or entity and establishes informational requirements for the shipping manifest. One of the informational requirements for the shipping manifest established in the proposed rule is a certified statement that "the processed citrus products are being transported in bulk as processor grade." "Processor grade" is a new designation. Proposed Rule 20-71.006, Florida Administrative Code, establishes manifest requirements for transport of processed citrus products with the exception of bulk processed citrus product shipments specified in Rule 20-71.009, Florida Administrative Code. Proposed Rule 20-71.009, Florida Administrative Code, authorizes an inspector to issue a certificate of processor grade, which reflects that the bulk processed citrus product has been inspected for wholesomeness and maturity and ensures that the bulk processed citrus product will be inspected and/or re- graded before final shipment. The proposed rules reflect changes that are taking place in citrus processing methodology; the rule changes ensure that inspection as required by Section 601.49, Florida Statutes, takes place.
The Issue The 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 Respondent, a licensed citrus fruit dealer, violated the Florida Citrus Code by failing to pay Petitioner the full purchase price for grapefruit that the dealer had harvested from Petitioner's grove and sold in the ordinary course of business to its (the dealer's) customers; and, if so, the amount of the indebtedness owed by the dealer.
Findings Of Fact Petitioner Frontier Fresh of Indian River, LLC ("Seller"), is in the business of growing citrus fruit and hence is a "producer" as that term is defined in the Florida Citrus Code. § 601.03(33), Fla. Stat. Respondent United Indian River Packers, LLC ("Buyer"), is a "citrus fruit dealer" operating within the regulatory jurisdiction of the Department of Agriculture and Consumer Services (the "Department"). See § 601.03(8), Fla. Stat. On September 6, 2013, Seller and Buyer entered into a Production Contract Agreement (the "Contract") under which Buyer agreed to purchase and harvest red and flame grapefruit (both generally called "colored grapefruit") then growing in Seller's "Emerald Grove" in St. Lucie County. Buyer promised to pay Seller $7.75 per box plus "rise" for all colored grapefruit harvested from the Emerald Grove during the 2013/2014 season. ("Rise" is an additional payment due Seller if Buyer's net revenue from marketing the fruit exceeds the Contract price or "floor payment.") The Contract gave Buyer and its "agents, employees and vehicles" the right to "enter upon SELLER'S premises . . . from time to time for the purpose of inspecting, testing and picking fruit, and for the purpose of removing said fruit." Buyer was obligated to make scheduled payments to Seller totaling $250,000 between September and December 2013, with the balance of the floor payment "to be made within 45 days from week of harvest." The deadline for making the final rise payment was June 30, 2014. The Contract described the Seller's duties as follows: SELLER agrees to maintain the crop merchantable and free from Citrus Canker, Mediterranean fruit fly, Caribbean fruit fly, and any and all impairments which would alter the ability to market the crop. It is further agreed that in the event of such happening BUYER has the option to renegotiate with SELLER within 10 days of such find, or terminate contract and receive any monies that may be remaining from deposit. It is understood and agreed that the word "merchantable" as herein used, shall mean fruit that has not become damaged by cold, hail, fire, windstorm, insects, drought, disease or any other hazards to the extent it cannot meet all applicable requirements of the laws of the State of Florida and the Federal Government, including without limitation those relating to pesticides, and the regulations of the Florida Department of Citrus relating to grade and quality. With regard to default, the Contract provided: It is further agreed that in case of default by either the BUYER or SELLER the opposite party may, at his option, take legal action to enforce this contract or may enter into negotiations to carry out the terms and provisions thereof, in which event the party found to be in default shall pay reasonable costs in connection with either negotiation or litigation, such cost to include a reasonable attorney's fee to party prevailing in such controversy. The Contract acknowledged the existence of a "Citrus Fruit Dealers Bond" posted with the Department but cautioned that the bond "is not insurance against total 1iabilities that may be incurred if a citrus fruit dealer should default" and "does not necessarily insure full payment of claims for any nonperformance under this contract." Buyer began picking colored grapefruit from the Emerald Grove on October 17, 2013, and initially things went well. For the first month, Buyer achieved encouraging packout percentages of between 60% and 90%. (The packout percentage expresses the ratio of fruit deemed acceptable for the fresh market to the total fruit in the run. A higher packout percentage means fewer "eliminations" for the juice processing plant and thus a more valuable run.) On November 13, 2013, however, the packout rate plunged to around 38%. Although there were some good runs after that date, for the rest of the season the packout percentages of grapefruit picked from the Emerald Grove mostly remained mired in the 30% to 50% range, which is considered undesirably low. Everyone agrees that the 2013/2014 grapefruit crop in the Emerald Grove was disappointing. Representatives of Buyer and Seller met at the Emerald Grove in mid-November to discuss the reduced packout percentages. Mild disagreement about the exact reason or reasons for the drop-off in quality arose, but some combination of damage by rust mites and a citrus disease known as greasy spot is the likeliest culprit.1/ The problems were not unique to Emerald Grove, as the 2013/2014 citrus season was generally poor in the state of Florida. Seller's grapefruit crop was consistent with the statewide crop for that year. Despite the low packout percentages, and being fully aware of the crop's condition, Buyer continued to harvest colored grapefruit from the Emerald Grove, which it packed and exported for sale to its customers in Europe, Japan, and Southeast Asia. After picking fruit on February 3, 2014, however, Buyer repudiated the Contract and left the colored grapefruit remaining in the Emerald Grove to Seller. As a result, Seller sold the rest of the crop to another purchaser.2/ At no time did Buyer notify Seller that it was rejecting any of the grapefruit which Buyer had picked and removed from the Emerald Grove pursuant to the Contract. For months after Buyer stopped performing under the Contract, Seller endeavored to collect the amounts due for all the fruit that Buyer had harvested. By mid-April, however, Buyer still owed several hundred thousand dollars. At a meeting between the parties on April 22, 2014, Buyer proposed that Seller discount the purchase price given the disappointing nature of the crop, which Buyer claimed had caused it to lose some $200,000 in all. Buyer requested that Seller forgive around $100,000 of the debt owed to Buyer, so that Seller, in effect, would absorb half of Seller's losses. Buyer expected that Seller would agree to the proposed reduction in price and maintains that the parties did, in fact, come to a meeting of the minds in this regard, but the greater weight of the evidence shows otherwise. Seller politely but firmly——and unequivocally——rejected Buyer's proposal, although Seller agreed to accept installment payments under a schedule that would extinguish the full debt by August 31, 2014. This response disappointed Buyer, but Buyer continued to make payments to Seller on the agreed upon payment schedule. By email dated June 4, 2014, Buyer's accountant asked Seller if Seller agreed that the final balance due to Seller was $108,670.50. Seller agreed that this was the amount owing. After that, Buyer tried again to persuade Seller to lower the price, but Seller refused. Buyer made no further payments. At no time did Buyer notify Seller that it was revoking its acceptance of any of the fruit harvested from the Emerald Grove during the 2013/2014 season. Having taken physical possession of the fruit, Buyer never attempted to return the goods or demanded that Seller retrieve the fruit. Rather, exercising ownership of the goods, Buyer sold all the colored grapefruit obtained under the Contract to its customers for its own account. On October 14, 2014, Seller brought suit against Buyer in the Circuit Court of the Nineteenth Judicial Circuit, in and for Indian River County, Florida, initiating Case Number 31-2014-CA-001046. Buyer filed a counterclaim against Seller for breach of contract. On February 4, 2015, Seller filed a Notice of Voluntary Dismissal of its judicial complaint, opting to take advantage of available administrative remedies instead, which it is pursuing in this proceeding. As of the final hearing, Buyer's counterclaim remained pending in the circuit court.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Agriculture and Consumer Services enter a final order awarding Frontier Fresh of Indian River, LLC, the sum of $108,670.50, together with pre-award interest at the statutory rate from June 4, 2014, to the date of the final order, and establishing a reasonable time within which said indebtedness shall be paid by United Indian River Packers, LLC. DONE AND ENTERED this 27th day of August, 2015, in Tallahassee, Leon County, Florida. S JOHN G. VAN LANINGHAM Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 27th day of August, 2015.
