The Issue The issue in this case is whether Respondents John and Shelby Mahon (the "Mahons"), d/b/a John's Citrus Trees, committed any or all of the violations alleged in the Administrative Complaint dated March 12, 2010, and, if so, what penalty should be imposed.
Findings Of Fact The Department is the state agency statutorily charged with protecting the State of Florida from invasive and destructive plant pests and diseases. See § 581.031, Florida Statutes (2010).1/ John's Citrus Trees is a wholly owned business of the Mahons, and holds nursery registration number 47218720. Citrus canker Citrus canker (Xanthomonas axonopodis pv. citri) is a bacterial disease of citrus. It affects all types of citrus. The bacteria requires water to enter the plant tissue and is easily spread by wind driven rain, by movement of infected trees, and by contact with contaminated tools or people. Citrus canker in plants cannot be cured. The only treatment is the destruction of infected and exposed plants. If the infected plants were in the ground, then the ground must be dried out and treated with chemicals, because the bacteria can remain in the ground water after the plant has been removed. The scientific consensus is that 95 percent of new infections occur within 1900 feet of infected trees, when the trees are outdoors. Thus, trees within 1900 feet of an infected tree are considered to have been "exposed" to citrus canker. Within an enclosed structure, citrus canker infection can be spread by worker contact or by overhead irrigation systems. For many years, Florida has followed a program aimed at citrus canker eradication. Several hurricanes swept through the state in 2004 and 2005, resulting in widespread citrus canker. Since the most recent outbreak, the Department has tracked and sought to eradicate citrus canker through the Citrus Health Response Program ("CHRP") developed by the Department in coordination with the United States Department of Agriculture's Animal and Plant Health Inspection Service ("USDA/APHIS"). See Fla. Admin. Code R. 5B-63.001. In the two years preceding the hearing in this matter, the Department found citrus canker in three commercial nurseries, out of 56 commercial nurseries that grow citrus in Florida. One of the three nurseries, in Polk County, has been released from quarantine and is now free of citrus canker. In that case, the owners destroyed the entire bench on which the infected plants were found. Depending on the size of the propagation house, one bench may contain from 10,000 to 40,000 plants. When a follow-up inspection found canker, the nursery destroyed all infected and exposed plants. Subsequent inspections found no further infection. The second location, in Desoto County, was still under quarantine at the time of the hearing. Citrus canker remained in one of the three growing structures at the nursery even after the destruction of 1,200 trees. The Department intended to release the nursery from quarantine if the follow-up destruction entirely eliminated the infection. The process of inspection, quarantine, destruction and, if necessary, repeat, as followed in the cases of the Polk and Desoto County nurseries, is the standard industry practice for the control of citrus canker in nurseries. The third commercial nursery with a citrus canker infestation was John's Citrus Trees in Clermont. As of the date of the hearing, there was still a citrus canker infection in all parts of the nursery, and the quarantine remained in effect at both the Clermont and Fruitland Park locations of John's Citrus Trees. Movement of citrus trees from quarantined locations The Mahons operate a citrus nursery at 7401 Laws Road in Clermont and a retail operation in Fruitland Park at the front of the North Lake Flea Market on U.S. 441. At the Clermont location, the Mahons have a propagation house, a screened enclosure and an outdoor retail area. The nursery is classified as a propagation nursery because the operators grow citrus from budwood that is grafted onto rootstock and then matured for sale. A propagation house is an enclosed structure that is entered through a decontamination station to prevent the introduction of pests and diseases into the propagation area. Commercial citrus propagation houses are also required to have a double entryway with positive airflow, so that when inspectors or workers enter, air is pushing out against them, to blow away any pests. A screen house is an additional structure in which plants are stored prior to sale. The screening prevents insects from infecting the plants and provides some protection from windblown infection by bacterial diseases such as citrus canker. On June 1, 2009, inspectors from the Department's Division of Plant Industry ("DPI") conducted a routine inspection of the Clermont nursery. The inspectors found structural deficiencies in the propagation house itself, as well as plants outside the screen house that they suspected of having citrus canker. The inspectors collected samples and sent them to the DPI pathology laboratory in Gainesville. The pathology report confirmed citrus canker on the leaves of the plant samples taken from outside the Clermont nursery's screen house. On June 3, 2009, a total of 1281 screen house and outside plants at the Clermont nursery were quarantined until follow-up sampling showed no signs of citrus canker. The inspection report notes that 36 plants at the nursery showed positive signs of citrus canker. The Clermont nursery was re-inspected on June 29, 2009. Following the re-inspection, the quarantine was extended to the 27,400 plants in the propagation house due to the presence of citrus canker there. Re-inspections were conducted on July 31, September 3, October 12, November 12, and December 14, 2009, and on January 15, 2010. Samples were taken at each re-inspection, and pathology testing revealed a continuing infection of plants with citrus canker at the Clermont nursery. During each inspection, the inspectors made a count of the plants in each area of the nursery. On two of the dates, June 29, 2009 and July 31, 2009, the inspection report shows only a total for the outside and screen house areas combined. The other reports give a separate number for the outside and screen houseplants. The counts for the outside location were as follows: 2009 June 3 471 plants September 3 402 plants October 12 439 plants November 12 391 plants December 14 400 plants 2010 January 15 524 plants On July 1, 2009, DPI inspectors conducted an inspection at the Fruitland Park retail location of John's Citrus Trees. The inspectors took samples from plants that displayed the visual symptoms of citrus canker. The samples were sent to the DPI laboratory in Gainesville for analysis. The Fruitland Park location was placed under temporary quarantine pending the results of the laboratory analysis. A DPI pathology report dated July 2, 2009, confirmed that the plants were infected with citrus canker. On July 7, 2009, the quarantine was extended for an additional 30 days to allow time to confirm that the Fruitland Park location was free of citrus canker. On July 6, 2009, the Department's inspectors witnessed the destruction of 21 citrus trees at the Fruitland Park location. Four of these trees had been confirmed with citrus canker, and the other 17 were suspected of having citrus canker. On July 10, 2009, a Department representative witnessed the destruction of another nine trees at the Fruitland Park location. On August 26, 2009, DPI inspectors conducted a re- inspection at the Fruitland Park location, taking additional samples from plants showing signs of citrus canker. In a pathology report completed on the same date, the samples were confirmed to be infected with citrus canker. Subsequent inspections on October 19 and December 15, 2009, and on January 20, February 23, March 29, April 19, and May 24, 2010, each resulted in additional samples of suspected citrus canker being taken for analysis. Pathology reports dated October 21 and December 15, 2009, and January 27, February 25, April 1, April 23, and May 26, 2010, confirmed the continuing infection of the Fruitland Park location with citrus canker. At each of the inspections at the Fruitland Park location, the inspectors made a count of the plants at the nursery. On December 15, 2009, a DPI inspector discovered that the Mahons had between 50 and 100 citrus trees (later determined to be 76 plants) in a spot at the North Lake Flea Market, near a recreational vehicle approximately 200 feet behind the retail location at the front of the flea market. The inspector, James Holm, a supervisor in DPI's Tavares office, gave the Mahons notice that that these plants were under quarantine because of their proximity to the infected plants already under quarantine. The Mahons received written notice of the quarantine on December 18, 2009. The Department considered the additional plants to be at John's Citrus Trees' registered location at Fruitland Park. The alternative would have been to consider the additional trees to be placed at an unregistered location, which would have constituted a different violation than that alleged in the Administrative Complaint. The plant counts, based on the inspection reports and taking into account the plant destruction witnessed by Department inspectors, were as follows: 2009 July 1 470 plants July 6 449 plants, accounting for 21 destroyed July 10 440 plants, accounting for 9 destroyed August 26 449 plants September 10 444 plants, accounting for 5 destroyed October 19 437 plants December 15 452 plants in front area and 50-100 new plants in rear December 18 528 total plants (76 plants counted in rear plus 452 plants in front) 2010 January 20 529 total plants and 22 (424 plants in front area, 76 in rear and 29 plants farther to the rear) Even when the destroyed plants are accounted for, the plant counts appear to show movement of trees exposed to or infected with citrus canker into and out of the Fruitland Park location while it was under quarantine for citrus canker and the owners had knowledge of the continuing infection. The tree count rose from 440 plants on July 10, 2009 to 449 plants on August 26, 2009. The Mahons had no explanation for this change, which they attributed to counting error by the Department. The tree count dropped from 444 plants on September 10, 2009 to 437 plants on October 19, 2009. The Mahons had no evidentiary explanation for this change. They speculated that the seven trees in question were stolen, noting that they were kept in an unlocked, unprotected area of the flea market directly off U.S. 441. As to the additional trees discovered by the Department in the rear area of the flea market on December 15, 2009, the Mahons testified that their conversations with Mr. Holm led them to believe that the Department would approve of their bringing in plants from other locations and selling them in the rear area. The Mahons testified that the plants in the rear area actually belonged to their son, Danny Mahon. The Mahons produced invoices for trees purchased by Danny Mahon from Pokey's Lake Gem Citrus Nursery. (Gary "Pokey" Mahon is the brother of Respondent John Mahon.) The plants named on the invoices could not be definitely matched with the 76 trees in the rear area of the flea market, though the dates on the receipts leave open the possibility that the 76 trees were the property of Danny Mahon. See Findings of Fact 80 and 81, infra, for detailed findings as to the invoices. Even if the Mahons testimony as to the provenance and ownership of the trees is credited, Mr. Holm denied giving the Mahons permission to sell trees from the rear area of the flea market while maintaining a quarantine on the location at the front of the flea market. Mr. Holm acknowledged having a discussion with Mr. Mahon along those lines, but also stated that he told Mr. Mahon that DPI headquarters in Gainesville would have to approve such a plan. The Mahons would have had to register the rear area as a separate retail location. As noted above, on December 15, 2009, Mr. Holm gave the Mahons telephonic notice that the both the front and rear sites at the flea market were under quarantine. The new plants in the rear area were quarantined due to their proximity to the known infected plants in the front of the flea market. Mr. Holm provided the Mahons with written notice of the quarantine on December 18, 2009. Danny Mahon did not have a registered nursery at the Fruitland Park location. The Department therefore attributed ownership of all of the trees, in the front and the back areas of the flea market location, to the only registered location at the North Lake Flea Market on U.S. 441 in Fruitland Park: John's Citrus Trees. On January 22, 2010, inspectors found another 29 plants at a third site, behind the recreational vehicle near which the 76 plants were found on December 15, 2009. The Mahons did not clarify whether these were new plants or plants that had been moved from one of the other two flea market locations. It is noted that the number of plants in the front area was 452 on December 15, 2009, and 424 on January 20, 2010, a difference of 28 plants, very nearly the number of plants found at the third site. The total count of trees at the Fruitland Park location changed from 528 on December 18, 2009, to 529 on January 20, 2010. The Mahons plausibly attributed these small discrepancies to a counting error. The sale of trees to Fred Thomas In 2009, Fred Thomas contacted John's Citrus Trees regarding the availability of 720 Minneola tangelo, or "honeybell," citrus trees. Mr. Thomas, an experienced grove caretaker, had been hired by Victor Roye, the owner of an abandoned grove, to remove the existing trees and replant the grove with honeybell citrus. Mr. Thomas testified that honeybells are "packing house fruit," and that Mr. Roye's intention was to sell the honeybells as edible fruit. The value of such market fruit is much greater than the value of fruit sold for juice. Citrus infected with citrus canker can be sold for juice, but is not salable as market fruit. On the telephone, Mr. Mahon assured Mr. Thomas that he could supply the requested trees. On March 3, 2009, Mr. Mahon and Mr. Thomas met in a McDonald's parking lot and signed a contract for the purchase of 720 honeybell citrus trees. Mr. Thomas gave Mr. Mahon a 25 percent deposit of $1620.00 towards the purchase price of $6,480.00 (720 trees x $9.00 per tree). At the time the contract was entered, the Mahons' propagation location in Clermont was not under quarantine. Under the terms of the contract, the trees were to be delivered by June 10, 2009. When the appointed date passed and he had not received the trees, Mr. Thomas contacted Mr. Mahon, who stated that the trees hadn't grown as they should. Mr. Mahon asked for an additional 30 days to deliver the trees. Mr. Thomas agreed to the extension only because he already had a contract with Mr. Mahon. Mr. Thomas thought it would likely take longer to find a new seller and negotiate a contract than the 30 days requested by Mr. Mahon. Mr. Mahon knew that Mr. Thomas was upset, and asked him to come to the Clermont nursery and see what he had. Mr. Thomas and his wife subsequently met with Mr. Mahon at the Clermont location. Mr. Mahon took the Thomases into the propagation house and showed them some trees in the ground that he identified as their honeybells. Mr. Thomas agreed that the trees were too small and reiterated his agreement to the 30-day extension. Mr. Mahon stated that he might obtain half of the 720 trees from his brother Pokey, and promised full delivery in July. Mr. Thomas testified that when he visited another nursery's propagation house, there was a pan of disinfectant outside the first door, and he was required to step into the disinfectant before proceeding. When the first door was opened, he was hit with a gust of air from a fan. As Mr. Thomas stated, "You walk into the second door, you're clean." Mr. Thomas noted that the Mahons' propagation house had none of those protections from infection. Mr. Thomas further noted that the propagation house itself was in poor condition, with gaps and openings in the enclosure. On about July 10, 2009, Ms. Mahon and one of her sons delivered about half of the promised 720 trees, then delivered the remaining trees two or three days later. Mr. Thomas testified that the trees were delivered "bare root," not in pots. Mr. Thomas paid the remainder of the purchase price to Ms. Mahon as the trees were delivered. Mr. Thomas testified that the trees did not look good when he planted them. "I didn't like the looks of them from the word 'go,' 'cause they were so small, and I seen stuff on them." In August, Mr. Thomas went to Triangle Chemical Company in Mascotte to seek the advice of Richard Hoffman, a salesman who was familiar with citrus pests. Mr. Hoffman was not available, but another Triangle Chemical employee accompanied Mr. Thomas to the grove. This man told Mr. Thomas, "Your trees are eat up with citrus canker." Mr. Thomas was incredulous and chose not to believe the man, though Mr. Thomas acknowledged his expertise. Mr. Thomas simply could not believe that the trees he had just planted were infested with canker, and decided to "try to take care of them." Later, Mr. Hoffman came out to the grove, because it still did not look right. Mr. Hoffman agreed with the earlier Triangle Chemical employee's assessment that the trees were "eat up with canker," in Mr. Thomas' words. Justin Nipaver, a CHRP inspector, is charged with ensuring that all citrus groves can be tracked in the Department's database. During the summer, Mr. Nipaver had noted that an old grove on the Roye property had been pulled out and destroyed. On November 22, 2009, Mr. Nipaver stopped in to inspect the newly planted grove, in order to obtain the information necessary to add the grove to the Department's database. During this inspection, Mr. Nipaver noted visible symptoms of citrus canker on the plants. He collected samples for laboratory analysis. He spoke with Mrs. Thomas, who told him that she and her husband had planted the grove for Mr. Roye and were acting as caretakers. Mrs. Thomas told Mr. Nipaver that the plants had been purchased from John's Citrus Trees. Mr. Nipaver did not tell Mrs. Thomas that he suspected a citrus canker infestation, preferring to wait for laboratory confirmation. Mr. Nipaver returned to the grove on November 30, 2009, accompanied by Mr. Holm, Detective Daniel Shaw of OALE, and two other Department employees. The team surveyed part of the grove and determined that 65 to 70 percent of the trees were suspected of having citrus canker. Mr. Nipaver testified that there was no need to survey the entire grove because of the severity of the infestation in the sample portion. Detective Shaw attempted to contact the Thomases but was unable to reach them. In a report dated December 2, 2009, the DPI pathology laboratory confirmed that the samples taken from the grove on November 30 were infected with citrus canker. The grove was placed under quarantine. Mr. Thomas testified that he told Mr. Mahon about the situation and that Mr. Mahon assured him that he could sell the fruit for juice. Mr. Thomas found this an inadequate response because his entire purpose in planting honeybells was to produce packing house fruit. He asked Mr. Mahon for a refund, but Mr. Mahon claimed that the Department had him "broke and tied up." Mr. Thomas subsequently pulled all of the trees and burned them under the supervision of Department employees. Mr. Nipaver testified that there were no groves with citrus canker near the Roye grove. The Mahons Clermont nursery was released from quarantine on April 1, 2009. Mr. Mahon testified that he feared that the Department would impose another quarantine on his nursery, not necessarily for good reason but just because "they were gunning for me." He therefore potted the 720 honeybell trees promised to Mr. Thomas and moved them, along with many other trees, to his son Paul Mahon's nursery in Groveland. Mr. Mahon testified that the plants were kept in a screen house at Paul's nursery until they were delivered to Mr. Thomas in July. Mr. Mahon's testimony conflicts with Mr. Thomas' testimony regarding his visit to the Mahon's nursery in June. Mr. Mahon had shown him plants in the propagation house that Mr. Mahon stated were the plants to be delivered to Mr. Thomas. Mr. Mahon had also stated that, in the alternative, he might obtain half of the plants from his brother Pokey. This June meeting was well after the April time period during which Mr. Mahon claimed to have moved the plants to Paul's nursery. Mr. Mahon's testimony that the plants being held for Mr. Thomas at Paul's nursery were potted is contradicted by Mr. Thomas' testimony that the plants were delivered bare root. Mr. Holm testified that Paul Mahon's nursery in Groveland was a propagation nursery and as such was inspected every thirty days. Mr. Holm testified that between April 2009 and early July 2009, the period during which Mr. Mahon claimed to be holding Mr. Thomas' plants in pots at Paul Mahon's nursery, there were no such potted plants on the nursery grounds. Mr. Holm testified that in April 2009, Paul Mahon's screen house was overgrown with grass and had "an issue" with tropical spiderwort, an aggressive, difficult to control weed. Part of the screen house structure was collapsed and the entryways were open. Mr. Holm described it as in a "deteriorating condition," and testified that this condition remained unchanged through October 2009. Mr. Mahon testified that Paul Mahon was very ill and awaiting a liver transplant during the period in question. Paul Mahon's illness accounts for the abandoned appearance of his nursery but not for the absence of the 720 plants that Mr. Mahon testified were stored there. Mr. Thomas' testimony was consistent and credible, and was supported by the testimony of Mr. Holm as regards the provenance of the 720 honeybell plants. Based on all the evidence, it is found that the plants delivered to Mr. Thomas in July 2009 came directly from the Mahons' propagation house at the Clermont nursery, and that they had not been stored at Paul Mahon's nursery between April and July 2009. Mr. Mahon knew that these plants were under quarantine and had a substantial probability of being infected with citrus canker. Sale of infected plants to a homeowner On October 20, 2009, DPI fruitfly inspection trapper Wayne Nichols drove past the John's Citrus Trees location at Fruitland Park and noticed plants being unloaded from a Budget rental truck. Mr. Nichols, who had prior experience as a citrus canker inspector with the Department, knew that the Fruitland Park Flea Market location was under quarantine for citrus canker. He therefore phoned his supervisor, Mr. Holm, to inform him of the activity. Mr. Nichols parked his car at the north entrance of the flea market and watched the activity while waiting for instructions from Mr. Holm. He saw a hatchback car leaving the flea market with two citrus trees hanging out of the back window. Mr. Nichols recognized driver of the car as a man he had just seen in the canopy tent from which John's Citrus Trees conducted business at the flea market. Mr. Nichols followed the car until it reached a gated portion of The Villages community. He could not follow further. The next day, Mr. Nichols and Mr. Holm returned to the gated neighborhood in The Villages. They located recently planted citrus trees in a homeowner's yard. Further inspection revealed that at least one of the trees had a citrus nursery identification tag with the registration number of John's Citrus Trees. Trees are tagged in this fashion by the original producer to allow the regulatory authorities to trace the origin of diseased plants. Mr. Nichols and Mr. Holm called the OALE and were met at The Villages location by Detective Shaw, who took over the investigation and photographed the trees and their location. The photographs were entered into evidence at the hearing. Mr. Mahon testified that during the periods when the Fruitland Park location was under quarantine, he would nonetheless take "special orders." He would purchase trees from other certified nurseries to satisfy the customers making these special orders. Mr. Mahon testified that this particular sale was to have been performed "truck to truck," with the plants never touching the ground at the flea market before being loaded into the customer's car. Mr. Mahon stated that if one of the trees had a tag indicating that its place of origin was John's Citrus Trees, then one of his employees must have mistakenly tagged the tree. Mr. Mahon testified that these special order plants were purchased from Pokey's, and were brought to the flea market via pickup truck. The plants in the pickup were covered and kept away from the other plants at the flea market, and they never touched the ground. This testimony is inconsistent with Mr. Nichols' credible testimony that he saw plants being unloaded from a Budget rental truck at the flea market. Mr. Mahon's testimony as to the origin and handling of "special order" trees is not credible. If the plants were kept covered in the back of a pickup truck until the customer took them away, and they never touched the ground at the flea market, it is difficult to see when an employee would have had the opportunity to "mistakenly" affix a John's Citrus Trees identification tag to one of the plants. Even if Mr. Mahon's testimony were credited, the act of bringing the "special order" trees into a quarantined nursery and selling them from that location would itself violate the quarantine. Purchase by undercover officers On December 18, 2009, officers from OALE went to the Fruitland Park location of John's Citrus Trees to purchase citrus trees as part of an undercover investigation. The attendant, Charles Harris, identified himself as an employee of John's Citrus Trees. He told the officers that he could not sell trees from the front portion of the flea market, but that there were trees further back near a recreational vehicle that he could sell. Mr. Harris told the officers that the trees in the back belonged to John's Citrus Trees. The officers purchased four citrus trees from Mr. Harris at the location near the recreational vehicle. As described at Finding of Fact 31, supra, the rear location near the recreational vehicle was within 200 feet of the quarantined location that held trees known to have citrus canker. Trees within this range are considered to have been exposed to citrus canker. See Finding of Fact 5, supra. As set forth at Findings of Fact 37 through 41, the rear location was not separately registered either to the Mahons or to their son Danny. Therefore, the rear location was either a part of the quarantined John's Citrus Trees facility at Fruitland Park, or it was an unregistered location. In either event, sale of trees from that location was unlawful. As noted at Finding of Fact 40, supra, Mr. Holm had given the Mahons telephonic notice that the both the front and rear sites at the flea market were under quarantine, and then provided the Mahons with written notice of the quarantine on December 18, 2009. The Mahons claimed that the trees had been purchased from Pokey's nursery by their son Danny Mahon. They submitted into evidence several invoices ranging in date from April 27, 2009, to November 27, 2009. The Mahons contended that the invoices proved that the trees in the rear location on December 18, 2009, belonged to Danny Mahon, not to John's Citrus Trees. However, the six invoices merely show that on four occasions Danny Mahon purchased citrus trees from Pokey's Lake Gem Citrus Nursery, and on two occasions John's Citrus Trees purchased citrus trees from Pokey's. In total, the invoices show that 254 plants were purchased from Pokey's. John's Citrus Trees is listed as the customer for 110 of the plants, and Danny Mahon is listed as the customer for 114 of the plants. The Mahons offered no details as to the numbers in the invoices, the timing of the deliveries, or how or where the deliveries were made. The invoices establish no necessary connection between the trees purchased by Danny Mahon and the trees found in the rear location of the flea market in December 2009. As stated in Finding of Fact 41, supra, the Department reasonably attributed ownership of all of the trees at the flea market location to the only registered location at the North Lake Flea Market on U.S. 441 in Fruitland Park: John's Citrus Trees. The Budget rental truck On October 8, 2009, a Budget rental truck containing a large number of potted citrus trees was intercepted at the Department's interdiction station on U.S. 90 in White Springs. The driver and passenger of the truck were asked for the bills of lading. The driver of the truck was Bruce Turner, who told Detective Shaw that he was an employee of Danny Mahon. The passenger was Gary Mahon, the youngest son of John and Shelby Mahon. They produced invoices indicating that the trees were to be delivered to eight different nurseries in Madison, Perry, Tallahassee, Marianna, and Kinard. The inspectors found that the invoices lacked the nursery certification that is required to accompany citrus plants transported in the state for commercial purposes. The invoices purported to come from "Danny Mahon Citrus." The invoices carried no street address. They listed an address of P.O. Box 120399, Clermont, which is the mailing address of John's Citrus Trees. Gary Mahon told the interdiction officers that the Danny Mahon nursery was located at 12603 Phillips Road in Groveland. The officers checked the Department's database and found no registered nursery at that address. They also failed to find any registration under the name "Danny Mahon Citrus." They did find a registration for "Danny's Citrus Trees" at the same address as the Mahons' registered location at Laws Road in Clermont. Additional DPI personnel were summoned to the interdiction station. Upon inspection, some of the citrus plants in the truck showed visible symptoms of citrus canker infection. Samples of the plants were sent to the DPI pathology laboratory in Gainesville. Subsequent test results confirmed the presence of citrus canker. Because he suspected citrus canker, the interdiction officer issued a "refusal of transport" form, sealed the lock on the truck with a metal Department seal, and ordered the truck to return to its initial location. Gary Mahon indicated that the initial location was 12603 Phillips Road in Groveland. Mr. Holm and Detective Shaw arranged to meet the truck when it returned that day. Detective Shaw drove to the Phillips Road address and found an empty field and no Budget truck. Mr. Holm arrived a short time later with Mr. Nichols. Mr. Holm made a phone call to Shelby Mahon, who directed him to drive to the Mahons' registered location at 7401 Laws Road in Clermont. Mr. Holm, Mr. Nichols, and Detective Shaw drove to the Clermont location, where they found a Budget rental truck carrying the Department's metal seal on its lock, inside the gates of John's Citrus Trees. Shelby Mahon insisted that the truck be taken to the Phillips Road location, which she stated was the origination point of the plants. On the morning of October 9, 2009, the truck was driven to the Phillips Road location. Detective Shaw followed the truck from Clermont to Phillips Road. Also present at Phillips Road were Mr. Holm, DPI regional administrator Christine Zamora, and DPI canker inspector Mike Hatcher. The Phillips Road property gave the appearance of a derelict orange grove. There was no disturbance on the ground to indicate that the plants had been stored at that location prior to being loaded onto the truck, either in individual pots or on pallets. There was no nursery infrastructure such as sheds or equipment. There was no irrigation system, though Shelby Mahon told Ms. Zamora that there was a well and pump on the property. OALE officers broke the seal on the truck. Shelby Mahon supervised the unloading, which was done by Mr. Turner and other employees of the Mahons. The plants were set out in blocks of 50 to make it easier for the Department's personnel to count them. There were 517 potted citrus plants on the truck, ranging in size from three gallon to 30-gallon pots. The plants in the three and five-gallon pots looked very young. Ms. Zamora noted that the trees fell out of the pots easily. The plants' root systems were very undeveloped and did not conform to the circular shape of the pots, indicating that they had only recently been placed in the pots. The DPI personnel agreed it was unlikely that the plants had been in the pots for more than a week. Many of the trees bore handwritten tags with the registration number of Paul Mahon's nursery. Many of the plants were double-tagged, bearing tags from Pokey's nursery as well as those from Paul Mahon's. None of the plants bore tags from John's Citrus Trees. Many of the plants had visible symptoms of citrus canker. Samples were taken and sent to the DPI pathology laboratory, and subsequent results confirmed that the plants were infected with citrus canker. Shelby Mahon told the Department's inspectors and investigators that the smaller plants had been stored at the Phillips Road location since February 2009. She stated that the smaller plants belonged to Danny Mahon, who had purchased them from his brother Paul Mahon. At the hearing, Ms. Mahon testified that her son Danny was the source of her knowledge as to where the plants had been since February 2009. Ms. Mahon stated that the larger plants in the 15 and 30-gallon pots were from Pokey's nursery, and that her son Gary had brokered the sales to the nurseries named on the invoices on behalf of Pokey and Danny Mahon. At the hearing, Ms. Mahon admitted that she prepared the invoices. Detective Shaw testified that Ms. Mahon told him that she drew up the invoices because Danny Mahon had never sold citrus before. Ms. Mahon recalled at least one customer calling her after obtaining the number of John's Citrus Trees on the internet. Ms. Mahon testified that she took the order on behalf of her son Danny because her own nursery was still under quarantine. She stated that orders were taken for the exact number and type of plants that had been stored at Danny Mahon's nursery since February 2009. The invoices indicated that the trees in the shipment consisted of 449 three-gallon, 15 five-gallon, and 33 ten-gallon plants, for a total of 497 plants. On October 5, 2009, three days before the Budget truck was interdicted at the White Springs station, the Mahons refused access to DPI inspectors at their Clermont nursery. John Mahon claimed that this denial was based on the agreement of DPI's bureau chief, Tyson Emery, to give the Mahons a little more time to clean up the nursery after cutting down and trimming seedling trees. According to Mr. Mahon, the inspector who turned up at the nursery was unaware of Mr. Emery's agreement and demanded access to the nursery. An argument ensued and the Mahons refused to allow the inspector on their property. Mr. Emery was not called as a witness in this proceeding. The inspector named by Mr. Mahon, Bryan Benson, was called as a witness by both sides, and testified a third time in rebuttal. However, the Mahons failed to question him regarding the events of October 5, 2009. The Mahons had previously refused to allow DPI inspectors to conduct an inspection on September 28, 2009.2/ At the hearing, John Mahon stated that access was refused on this date because he had a previous commitment and because he believed that DPI was attempting to schedule the inspection too soon after the previous one. Evidence at the hearing established that the Budget rental truck had been parked at the Laws Road location in Clermont overnight on October 7, 2009, prior to embarking on its intended deliveries to the nurseries listed on the invoices early on the morning of October 8. The Budget rental truck agreement indicated that the truck was rented on October 7 by Rebecca Mahon, the wife of Danny Mahon. At the hearing, John Mahon stated that the truck was parked overnight at the Laws Road location because Danny Mahon feared leaving it unprotected at the Phillips Road location. The Laws Road property is fenced, whereas the Phillips Road property is unfenced. The Mahons steadfastly denied that the trees on the Budget truck came from their Clermont nursery. There was no evidence presented that directly tied the trees to the Mahons' nursery, though the circumstances clearly indicate that Shelby Mahon was involved in arranging the sale of the trees, that there was no indication the plants had been kept at Danny Mahon's Phillips Road property, and that the Budget truck was parked at the Mahons' nursery the night before it set out to deliver the plants. The nearly contemporaneous refusal to allow the Department to inspect their nursery also directs some suspicion at the Mahons. The Department contends that one further piece of circumstantial evidence makes its case convincing: the presence of citrus canker in the plants on the Budget truck. As noted at Findings of Fact 8 through 12, supra, John's Citrus Trees was the only nursery in the state under quarantine for citrus canker at the time of the hearing, with the exception of one in DeSoto County that had destroyed all infected and exposed plants. Because the Mahons asserted that the trees on the Budget truck came from either Pokey's nursery or Paul Mahon's nursery, DPI inspectors sampled citrus trees at both nurseries after the truck was unloaded. Neither nursery showed any sign of citrus canker. The location where Danny Mahon was said to have stored approximately 500 citrus trees between February and October 2009 showed no signs of potted plants having been stored at that location. Nowhere did the ground show matting from having been under pots or pallets. On October 9, 2009, Shelby Mahon pointed the inspectors to a large oak tree, freshly trimmed, on the Phillips Road property. She stated that all of the plants had been stored under that tree, and that she could prove it because Sumter Electric and its tree service had forced her to move the potted plants in order to trim the tree. Detective Shaw contacted Sumter Electric and its contractor, Nelson's Tree Service. Their employees recalled trimming the tree on the Phillips Road property, but had no recollection of potted plants under the tree or anywhere in the vicinity of the tree. Ralph Bowman, the Nelson's Tree Service employee who oversaw the Sumter Electric contract trimming work at Phillips Road, testified at the hearing. He stated that when his team worked on the property during the first two weeks of September 2009, there were no potted plants on the property. An equipment problem forced Mr. Bowman to stop work in September. When he returned during the second week of October, there were potted plants on the property. Mr. Bowman described them as dry, with spots on the leaves. Failure to produce records On June 3, 2009, Tyson Emery, chief of the Bureau of Plant Inspection, sent a letter to the Mahons requesting records of their inventory since January 1, 2009. As of the date of the hearing, the Mahons had not responded to this request. The Mahons contended that the Department already had all of their records. However, the records referenced by the Mahons in their response pertained to transactions that occurred in 2008, not 2009. Further, even if the Mahons contention were correct, such would not justify their complete failure to respond to Mr. Emery's letter. Failure to maintain quarantine tape During a routine inspection of the Fruitland Park location on January 20, 2010, the Department discovered that yellow agriculture hold tape with the statement "Do Not Move" that had been wrapped around citrus trees at the quarantined location at the Fruitland Park flea market location was missing. The Mahons testified that they did not know how the tape went missing. They noted that the flea market is on a highway, that the trees were not secured, and that the presence of quarantine tape was not popular with their fellow vendors at the flea market. I. Ultimate findings As to the allegations that the Mahons moved citrus trees infected with citrus canker from quarantined locations, the evidence was clear and convincing that they moved plants into and out of the quarantined nursery in Clermont. The wide variations in the plant count between June 2009 and January 2010 is otherwise inexplicable. With one exception, the evidence was clear and convincing that the Mahons moved citrus trees into and out of their Fruitland Park location on numerous occasions while it was under quarantine. Regardless of their source, trees offered for sale at that location were under quarantine and could not lawfully be sold. The exception was the change in the count from 528 plants on December 18, 2009, to 529 plants on January 20, 2010, which could reasonably be attributed to a counting error. As to the allegations regarding the sale of trees to Fred Thomas, the evidence was clear and convincing that the Mahons sold and delivered citrus trees to Mr. Thomas directly from the propagation house of their Clermont nursery, and that Mr. Mahon knew that the plants were under quarantine and had a substantial probability of being infected with citrus canker. As to the allegations regarding the sale of two citrus trees from the Fruitland Park location to a purchaser who subsequently planted the trees at his home in The Villages, the evidence was clear and convincing that the Mahons knowingly sold citrus plants to the homeowner while their location was under quarantine for citrus canker. Mr. Mahon's explanation regarding the treatment of "special orders" was not credible. As to the allegations regarding the undercover purchase of citrus trees from the Mahon's quarantined location at Fruitland Park, the evidence was clear and convincing that the Mahons sold trees from a quarantined location to OALE officers on December 18, 2009. As to the allegations regarding the interdiction of the Budget rental truck, the evidence was not clear and convincing that the trees on the truck were taken from the Mahons' registered location in Clermont. While the presence of citrus canker in the interdicted fruit strongly suggested that the plants came from the Mahons' nursery, and other circumstantial evidence pointed toward the Clermont nursery as the origination point of the plants, nothing directly tied the plants to John and Shelby Mahon. All of the tags on the plants were from either Paul or Pokey Mahon's nursery. Mr. Turner identified himself as an employee of Danny Mahon. Shelby Mahon's testimony that her son Gary was brokering the plants for Danny and Pokey Mahon was not implausible in light of all the evidence. Though a preponderance of the evidence indicates that the Mahons' Clermont nursery was the most likely origination point of the trees on the Budget rental truck, the undersigned cannot find that the Department's proof on this point met the standard of clear and convincing evidence. As to the allegation regarding the failure to produce records, the evidence was clear and convincing that the Mahons failed to comply with the Department's letter of June 3, 2009, requesting the production of their inventory records since January 1, 2009. As to the allegation regarding the removal of the quarantine tape, the evidence was not clear and convincing that the Mahons were responsible for the missing quarantine tape at the Fruitland Park location.
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 revoking the nursery registration of John L. and Shelby Mahon, d/b/a John's Citrus Trees, imposing an administrative fine of $18,500 on John L. and Shelby Mahon, and ordering the destruction of the citrus trees at both of the registered locations of John's Citrus Trees. DONE AND ENTERED this 15th day of February, 2011, in Tallahassee, Leon County, Florida. S LAWRENCE P. STEVENSON Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 15th day of February, 2011.
The Issue The issues in this case are whether Respondent, a licensed citrus fruit dealer, violated the Florida Citrus Code by failing to pay Petitioner the full purchase price for grapefruit that the dealer had harvested from Petitioner's grove and sold in the ordinary course of business to its (the dealer's) customers; and, if so, the amount of the indebtedness owed by the dealer.
Findings Of Fact Petitioner Frontier Fresh of Indian River, LLC ("Seller"), is in the business of growing citrus fruit and hence is a "producer" as that term is defined in the Florida Citrus Code. § 601.03(33), Fla. Stat. Respondent United Indian River Packers, LLC ("Buyer"), is a "citrus fruit dealer" operating within the regulatory jurisdiction of the Department of Agriculture and Consumer Services (the "Department"). See § 601.03(8), Fla. Stat. On September 6, 2013, Seller and Buyer entered into a Production Contract Agreement (the "Contract") under which Buyer agreed to purchase and harvest red and flame grapefruit (both generally called "colored grapefruit") then growing in Seller's "Emerald Grove" in St. Lucie County. Buyer promised to pay Seller $7.75 per box plus "rise" for all colored grapefruit harvested from the Emerald Grove during the 2013/2014 season. ("Rise" is an additional payment due Seller if Buyer's net revenue from marketing the fruit exceeds the Contract price or "floor payment.") The Contract gave Buyer and its "agents, employees and vehicles" the right to "enter upon SELLER'S premises . . . from time to time for the purpose of inspecting, testing and picking fruit, and for the purpose of removing said fruit." Buyer was obligated to make scheduled payments to Seller totaling $250,000 between September and December 2013, with the balance of the floor payment "to be made within 45 days from week of harvest." The deadline for making the final rise payment was June 30, 2014. The Contract described the Seller's duties as follows: SELLER agrees to maintain the crop merchantable and free from Citrus Canker, Mediterranean fruit fly, Caribbean fruit fly, and any and all impairments which would alter the ability to market the crop. It is further agreed that in the event of such happening BUYER has the option to renegotiate with SELLER within 10 days of such find, or terminate contract and receive any monies that may be remaining from deposit. It is understood and agreed that the word "merchantable" as herein used, shall mean fruit that has not become damaged by cold, hail, fire, windstorm, insects, drought, disease or any other hazards to the extent it cannot meet all applicable requirements of the laws of the State of Florida and the Federal Government, including without limitation those relating to pesticides, and the regulations of the Florida Department of Citrus relating to grade and quality. With regard to default, the Contract provided: It is further agreed that in case of default by either the BUYER or SELLER the opposite party may, at his option, take legal action to enforce this contract or may enter into negotiations to carry out the terms and provisions thereof, in which event the party found to be in default shall pay reasonable costs in connection with either negotiation or litigation, such cost to include a reasonable attorney's fee to party prevailing in such controversy. The Contract acknowledged the existence of a "Citrus Fruit Dealers Bond" posted with the Department but cautioned that the bond "is not insurance against total 1iabilities that may be incurred if a citrus fruit dealer should default" and "does not necessarily insure full payment of claims for any nonperformance under this contract." Buyer began picking colored grapefruit from the Emerald Grove on October 17, 2013, and initially things went well. For the first month, Buyer achieved encouraging packout percentages of between 60% and 90%. (The packout percentage expresses the ratio of fruit deemed acceptable for the fresh market to the total fruit in the run. A higher packout percentage means fewer "eliminations" for the juice processing plant and thus a more valuable run.) On November 13, 2013, however, the packout rate plunged to around 38%. Although there were some good runs after that date, for the rest of the season the packout percentages of grapefruit picked from the Emerald Grove mostly remained mired in the 30% to 50% range, which is considered undesirably low. Everyone agrees that the 2013/2014 grapefruit crop in the Emerald Grove was disappointing. Representatives of Buyer and Seller met at the Emerald Grove in mid-November to discuss the reduced packout percentages. Mild disagreement about the exact reason or reasons for the drop-off in quality arose, but some combination of damage by rust mites and a citrus disease known as greasy spot is the likeliest culprit.1/ The problems were not unique to Emerald Grove, as the 2013/2014 citrus season was generally poor in the state of Florida. Seller's grapefruit crop was consistent with the statewide crop for that year. Despite the low packout percentages, and being fully aware of the crop's condition, Buyer continued to harvest colored grapefruit from the Emerald Grove, which it packed and exported for sale to its customers in Europe, Japan, and Southeast Asia. After picking fruit on February 3, 2014, however, Buyer repudiated the Contract and left the colored grapefruit remaining in the Emerald Grove to Seller. As a result, Seller sold the rest of the crop to another purchaser.2/ At no time did Buyer notify Seller that it was rejecting any of the grapefruit which Buyer had picked and removed from the Emerald Grove pursuant to the Contract. For months after Buyer stopped performing under the Contract, Seller endeavored to collect the amounts due for all the fruit that Buyer had harvested. By mid-April, however, Buyer still owed several hundred thousand dollars. At a meeting between the parties on April 22, 2014, Buyer proposed that Seller discount the purchase price given the disappointing nature of the crop, which Buyer claimed had caused it to lose some $200,000 in all. Buyer requested that Seller forgive around $100,000 of the debt owed to Buyer, so that Seller, in effect, would absorb half of Seller's losses. Buyer expected that Seller would agree to the proposed reduction in price and maintains that the parties did, in fact, come to a meeting of the minds in this regard, but the greater weight of the evidence shows otherwise. Seller politely but firmly——and unequivocally——rejected Buyer's proposal, although Seller agreed to accept installment payments under a schedule that would extinguish the full debt by August 31, 2014. This response disappointed Buyer, but Buyer continued to make payments to Seller on the agreed upon payment schedule. By email dated June 4, 2014, Buyer's accountant asked Seller if Seller agreed that the final balance due to Seller was $108,670.50. Seller agreed that this was the amount owing. After that, Buyer tried again to persuade Seller to lower the price, but Seller refused. Buyer made no further payments. At no time did Buyer notify Seller that it was revoking its acceptance of any of the fruit harvested from the Emerald Grove during the 2013/2014 season. Having taken physical possession of the fruit, Buyer never attempted to return the goods or demanded that Seller retrieve the fruit. Rather, exercising ownership of the goods, Buyer sold all the colored grapefruit obtained under the Contract to its customers for its own account. On October 14, 2014, Seller brought suit against Buyer in the Circuit Court of the Nineteenth Judicial Circuit, in and for Indian River County, Florida, initiating Case Number 31-2014-CA-001046. Buyer filed a counterclaim against Seller for breach of contract. On February 4, 2015, Seller filed a Notice of Voluntary Dismissal of its judicial complaint, opting to take advantage of available administrative remedies instead, which it is pursuing in this proceeding. As of the final hearing, Buyer's counterclaim remained pending in the circuit court.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Agriculture and Consumer Services enter a final order awarding Frontier Fresh of Indian River, LLC, the sum of $108,670.50, together with pre-award interest at the statutory rate from June 4, 2014, to the date of the final order, and establishing a reasonable time within which said indebtedness shall be paid by United Indian River Packers, LLC. DONE AND ENTERED this 27th day of August, 2015, in Tallahassee, Leon County, Florida. S JOHN G. VAN LANINGHAM Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 27th day of August, 2015.
The Issue Whether Respondent A & J Pak Ship, Inc., owes Petitioner $551.16 for "gift fruit,” as alleged in Petitioner's Complaint.
Findings Of Fact Based upon the evidence adduced at the final hearing and the record as a whole, the following findings of fact are made: At all times material to the instant case, Petitioner and A & J have been licensed by the Department of Citrus as "citrus fruit dealers." As part of its operations, A & J sells "gift fruit" to retail customers. The "gift fruit" consists of oranges or grapefruits, or both, that are packaged and sent to third parties identified by the customers. In November and December of 1999, A & J took orders for "gift fruit" from retail customers that it contracted with Petitioner (doing business as Fresh Fruit Express) to fill. Under the agreement between A & J and Petitioner (which was not reduced to writing), it was Petitioner's obligation to make sure that the "gift fruit" specified in each order was delivered, in an appropriate package, to the person or business identified in the order as the intended recipient at the particular address indicated in the order. Among the intended recipients identified in the orders that Petitioner agreed to fill were: the Uthe family, the Weckbachs, Mr. and Mrs. T. Martin, Angelo's, Susan Booth, Mr. and Mrs. E. Coello, Mr. and Mrs. Dalbey, Carol Baker and family, the Tarvin family, Shelly and Mark Koontz, Pamela McGuffey, Jerome Melrose, Russell Oberer, Mrs. Josephine Scelfo, Curt and Becky Tarvin, Heidi Wiseman, Kay and Artie Witt, and the William Woodard family, who collectively will be referred to hereinafter as the "Intended Recipients in Question." A & J agreed to pay Petitioner a total of $438.18 to provide "gift fruit" to the Intended Recipients in Question, broken down as follows: $21.70 for the Uthe family order, $21.70 for the Weckbachs order, $22.82 for the Mr. and Mrs. T. Martin order, $27.09 for the Angelo's order, $21.70 for the Susan Booth order, $31.67 for the Mr. and Mrs. E. Coello order, $17.50 for the Mr. and Mrs. Dalbey order, $21.70 for the Carol Baker and family order, $27.09 for the Tarvin family order, $21.70 for the Shelly and Mark Koontz order, $21.70 for the Pamela McGuffey order, $32.44 for the Jerome Melrose order, $21.70 for the Russell Oberer order, $17.60 for the Mrs. Josephine Scelfo order, $21.70 for the Curt and Becky Tarvin order, $17.50 for the Heidi Wiseman order, $17.50 for the Kay and Artie Witt order, and $31.67 for the William Woodard family order. All of these orders, which will be referred to hereinafter as the "Intended Recipients in Question 'gift fruit' orders," were to be delivered, under the agreement between A & J and Petitioner, by Christmas day, 1999. On Sunday night, December 12, 1999, fire destroyed Petitioner's packing house and did considerable damage to Petitioner's offices. With the help of others in the community, Petitioner was able to obtain other space to house its offices and packing house operations. By around noon on Tuesday, December 14, 1999, Petitioner again had telephone service, and by Friday, December 17, 1999, it resumed shipping fruit. Scott Wiley, A & J's President, who had learned of the fire and had been unsuccessful in his previous attempts to contact Petitioner, was finally able to reach Petitioner by telephone on Monday, December 20, 1999. After asking about the status of the Intended Recipients in Question “gift fruit” orders and being told by the employee with whom he was speaking that she was unable to tell him whether or not these orders had been shipped, Mr. Wiley advised the employee that A & J was "cancelling" all "gift fruit" orders that had not been shipped prior to the fire. Mr. Wiley followed up this telephone conversation by sending, that same day, the following facsimile transmission to Petitioner: As per our conversation on 12-20-99, please cancel all orders sent to you from A & J Pak-Ship (Fresh Fruit Express). After trying to contact your company numerous times on December 13, I called the Davie Police Department, who [sic] informed me that you had experienced a major fire. I tried to contact you daily the entire week with no luck. Since I had no way to contact you, it was your responsibility to contact me with information about your business status. Without that contact, I had to assume that you were unable to continue doing business. With Christmas fast approaching and with no contact from anyone on your end, I had no choice but to begin to issue refunds. While I understand the fire was devastating for you, understand that my fruit business is ruined, and will take years to reestablish. Please note that I will not pay for any orders shipped past the date of your fire, 12-13-99, as I have already issued refunds, and I will need proof of delivery for all those orders delivered before the fire. Again, cancel all orders including the remainder of multi-month packages, and honeybell orders. Your lack of communication has put me in a very bad situation with my customers. One short phone call to me could have avoided all this difficulty. Had I not tried your phone on 12-20, I would still have no information from you. Petitioner did not contact Mr. Wiley and tell him about the fire because it did not think that the fire would hamper its ability to fulfill its obligations under its agreement with A & J. By the time Mr. Wiley made telephone contact with Petitioner on Monday, December 20, 1999, Petitioner had already shipped (that is, placed in the possession of a carrier and made arrangements for the delivery of) all of the Intended Recipients in Question "gift fruit" orders (although it had not notified A & J it had done so). Petitioner did not ship any A & J "gift fruit" orders after receiving Mr. Wiley's December 20, 1999, telephone call. On or about February 18, 2000, Petitioner sent A & J an invoice requesting payment for "gift fruit" orders it had shipped for A & J. Among the orders on the invoice for which Petitioner was seeking payment were the Intended Recipients in Question "gift fruit" orders (for which Petitioner was seeking $438.18). The invoice erroneously reflected that all of these orders had been shipped on December 25, 1999. They, in fact, had been shipped on December 18, 1999, or earlier. 1/ Mr. Wiley, acting on behalf of A & J, wrote a check in the amount of $858.26, covering all of the invoiced orders except the Intended Recipients in Question "gift fruit" orders, and sent it to Petitioner, along with the following letter dated February 22, 1999: As per my conversation on 12/20/90 at 11:20 a.m. with Yvette we cancelled all orders shipped after the fire, and also followed up with a certified letter. We had to reorder all of those orders and also refunded a lot of orders as they were not there in time for Xmas as all orders are required to arrive before Xmas. As I said in my certified letter to you it was a[n] unfortunate fire but all you had to do was to inform me what was going on and we could have worked something out. Our fruit business has been ruined by this incident, and quite possibly our entire company. It is unbelievable that more than sixty days after the fire we still have had no correspondence from you whatsoever. We have deducted those orders that were cancelled and arrived well after Xmas and remitted the remainder. A & J has not yet paid Petitioner the $438.18 for the Intended Recipients in Question "gift fruit" orders.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that the Department enter a final order dismissing Petitioner’s Complaint. DONE AND ENTERED this 12th day of September, 2001, in Tallahassee, Leon County, Florida. STUART M. LERNER Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 12th day of September, 2001.
The Issue Whether there is substantial justification or special circumstances to preclude Petitioner from receiving an award of attorneys’ fees and costs pursuant to section 120.595(2), Florida Statutes (2017).1/
Findings Of Fact Based on the oral and documentary evidence, written submissions from the parties following issuance of ALJ McKibben’s Final Order, and the entire record in this proceeding, the following Findings of Fact are made: Section 381.986(8), Florida Statutes and the Proposed Rule Section 381.986(8), Florida Statutes, establishes a mechanism for the licensing of medical marijuana treatment centers (“MMTC”). The statute was amended in 2017 to provide, in pertinent part, that: (8) MEDICAL MARIJUANA TREATMENT CENTERS. (a) The department shall license medical marijuana treatment centers to ensure reasonable statewide accessibility and availability as necessary for qualified patients registered in the medical marijuana use registry and who are issued a physician certification under this section. * * * The department shall license as medical marijuana treatment centers 10 applicants that meet the requirements of this section, under the following parameters: [Previously denied applicants meeting certain requirements not relevant to the instant action.] [One applicant from a specific class pursuant to a federal lawsuit.] As soon as practicable, but no later than October 3, 2017, the department shall license applicants that meet the requirements of this section in sufficient numbers to result in 10 total licenses issued under this subparagraph, while accounting for the number of licenses issued under sub-subparagraphs a. and b. For up to two of the licenses issued under subparagraph 2., the department shall give preference to applicants that demonstrate in their applications that they own one or more facilities that are, or were, used for the canning, concentrating, or otherwise processing of citrus fruit or citrus molasses and will use or convert the facility or facilities for the processing of marijuana. (emphasis added). The Proposed Rule was intended to implement the changes to section 381.986; but, where section 381.986(8)(a)3., uses the term “facility,” the Proposed Rule substitutes the term “property.” For instance, the Proposed Rule provides, in pertinent part, that: (1)(f) For applicants seeking preference for registration as a medical marijuana treatment center pursuant to ss. 381.986(8)(a)3., F.S., the applicant must provide evidence that: The property at issue currently is or was previously used for the canning, concentrating, or otherwise processing of citrus fruit or citrus molasses. In order to demonstrate the property meets this criteria, the applicant may provide documentation that the applicant currently holds or has held a registration certificate pursuant to section 601.40, F.S. A letter from the Department of Citrus certifying that the property currently is or was previously used for the canning, concentrating, or otherwise processing of citrus fruit or citrus molasses will be accepted as sufficient evidence; The applicant as an individual holds, in his or her name, or the applicant as an entity holds, in the legal name of the entity, the deed to property meeting the criteria set forth in subparagraph 1. above; and A brief explanation of how the property will be used for purposes of growing, processing, or dispensing medical marijuana if the applicant is selected for registration. * * * Subject matter experts will substantively and comparatively review, evaluate, and score applications using [the Scorecard incorporated by reference]. * * * (a)7.(b) Scores for each section of the application will be combined to create an applicant’s total score. The department shall generate a final ranking of the applicants in order of highest to lowest scores. . . . (c) In accordance with ss. 381.986(8)(a)3., F.S., the two highest scoring applicants that own one or more facilities that are, or were, used for the canning, concentrating, or otherwise processing of citrus fruit or citrus molasses and will use or convert the facility or facilities for the processing of marijuana will receive an additional 35 points to their respective total score. Licenses will be awarded, subject to availability as set forth in ss. 381.986(8)(a)2. and 381.986(8)(a)4., F.S., based on the highest total score in the following manner: The highest scoring applicant that is a recognized member of Pigford or [African American Farmers Discrimination Litigation] will receive a license. The remaining highest scoring applicants, after the addition of the preference points for applicants pursuant to paragraph (7)(c) above, will receive licenses up to the statutory cap set forth in ss. 381.986(8)(a)2., F.S. The remaining highest scoring applications, after removing any preference points received under paragraph (7)(c), will receive licenses up to the statutory cap set forth in ss. 381.986(8)(a)4., F.S. (emphasis added). The Parties The Department is the state agency charged with implementing the Compassionate Medical Cannabis Act of 2014. See § 381.986, Fla. Stat. Del Favero has been incorporated since 1974 and has been primarily engaged in the business of growing orchids. At the time of the final hearing in this matter, Del Favero aspired to apply for licensure as a medical marijuana treatment center. After Senate Bill 8A became law and substantially rewrote section 381.986, Del Favero elected to seek the citrus preference described in section 381.986(8)(a)3. In order to accomplish that goal, Del Favero purchased the real property and facilities of a citrus processing business in Safety Harbor, Florida, for approximately $775,000. The purchase occurred prior to the Proposed Rule’s publication. Del Favero intends to convert the citrus processing facility located on the Safety Harbor property into a medical marijuana processing facility if Del Favero becomes a licensed MMTC. Pertinent Portions of ALJ McKibben’s Analysis In ruling that the Proposed Rule was invalid, ALJ McKibben made the following findings: The Legislature clearly intended to give a preference to applicants who “own . . . facilities that are, or were, used for canning, concentrating, or otherwise processing of citrus . . . and will use or convert the . . . facilities for the processing of medical marijuana.” The Legislature failed, however, to provide guidance by way of definitions. While the Legislature chose the words “facility or facilities” in the Preference Statute, the Department complicated the issue by using the word “property” for the most part, but also using the words “facility” and “facilities” at times. Favero contends that a property is much broader in scope than a facility, and the Department therefore exceeded its delegated legislative authority. The Department argues that facilities used to process citrus must be located on some property, obviously. But, facilities located on a property might be leased, so that the fee simple owner of the property is different from the leaseholder of that facility. Thus, if an applicant for a medical marijuana treatment center license wants to avail itself of the preference, it would need to own the facility. Whether that means the applicant must own the property on which the facility is located is not clear in the Preference Statute or in the Proposed Rule. The Department argues that the way to show ownership of a facility is by way of a deed to the property on which the facility is located. In fact, Favero will use a warranty deed to prove ownership of the facilities it purchased in order to obtain the preference. But if Favero purchased land on which citrus had been grown but not processed, i.e., if there had been no facilities on the land to can, concentrate or otherwise process the fruit, except in fresh fruit form, the preference would not apply. And if an applicant obtained a leasehold interest in a facility, it would not be able to “show ownership” by way of a deed to the property. The Preference Statute requires the applicant to convert the facility in order to gain the preference. It is unclear how a piece of unimproved property can be “converted” to another use; land is land. This begs the question of whether growing citrus on a piece of property, and then removing all the citrus trees in order to grow medical marijuana, is a “conversion” of a facility as contemplated by the Legislature. Neither the Preference Statute nor the Proposed Rule contain any definitional assistance to answer that question. An important question to be answered is whether the growing of citrus constitutes “processing” as alluded to by the Legislature. The Preference Statute provides no definition of the word. The Citrus Code (chapter 601, Florida Statutes) also does not define “processing,” but does describe a “processor” of citrus as: ‘[A]ny person engaged within this state in the business of canning, concentrating, or otherwise processing citrus fruit for market other than for shipment in fresh fruit form.” § 601.03(32), Fla. Stat. (Emphasis added) (sic). Processing must therefore mean something other than merely growing citrus and packing it up for shipment. That being the case, a property where citrus is grown that is “converted” to a property growing marijuana would not afford an applicant a preference. There must be some “facility” that is or has been used to process citrus, i.e., doing something more with the raw product, in order to constitute “processing.” Therefore, a “packinghouse,” i.e., “[a]ny building, structure, or place where citrus fruit is packed or otherwise prepared for market or shipment in fresh fruit form,” would not be engaged in “processing” citrus. See § 601.03(29), Fla. Stat. (emphasis added). ALJ McKibben then made the following Conclusions of Law: In this instance, the Department interprets the statutory language concerning “facility or facilities” to include “property.” It is impossible to reconcile that interpretation, especially in light of the fact the Legislature contemplated conversion of the facilities. The Department’s interpretation is hereby rejected as being outside the range of permissible interpretations. See Cleveland v. Fla. Dep’t of Child. & Fams., 868 So. 2d 1227 (Fla. 1st DCA 2004).[2/] The test is whether the agency’s proposed rule properly implements specific laws. See § 120.52(8)(f), Fla. Stat. The Preference Statute specifically provided a preference for using or converting citrus facilities, not properties. The Proposed Rule does not implement that specific provision of the law. (emphasis added). The Department’s Rationale for Substituting “Property” for “Facility” The Department asserted during the final hearing that it consulted with the Citrus Department on how to interpret the phrase “otherwise processing.”3/ See § 381.986(8)(a)3. (providing that “the department shall give preference to applicants that demonstrate in their applications that they own one or more facilities that are, or were, used for the canning, concentrating, or otherwise processing of citrus fruit . . .”). (emphasis added). Ms. Shepp, the Citrus Department’s executive director, testified that activities such as picking, grading, sorting, polishing, and packing citrus fruit constitute “otherwise processing.” She also testified that a packinghouse conducts the aforementioned activities. Section 601.03(29), Florida Statutes, defines a “packinghouse” as “any building, structure, or place where citrus is packed or otherwise prepared for market or shipment in fresh form.” (emphasis added) See the Department’s Proposed Final Order at 9, 10, and 15. Because “a place” can be an area without a physical structure, the Department concluded that using the word “property” in the Proposed Rule rather than “facility” would enable applicants who engage in “otherwise processing” to be eligible for the preference. The Department also argued that this substitution is justified because “it is not uncommon in the citrus industry to conduct citrus operations in the open air or in a tent.” See Department’s Memorandum of Law in Opposition to Petitioner’s Motion for Attorney’s Fees at 9.4/ Ms. Coppola explained that the Department substituted “property” for “facility” in order to assist the distressed citrus industry. Finally, Ms. Coppola stated that using the term “property” serves the legislative intent to extend the preference to applicants that are not presently engaged in canning, concentrating, or otherwise processing but had been in the past.5/ As discussed below in the Conclusions of Law, the Department had no substantial justification for substituting the word “property” for “facility” and thus extending the citrus preference beyond what the Florida Legislature had intended. Moreover, there are no special circumstances that would make an award of attorneys’ fees to Del Favero unjust.
The Issue The issue in this case is whether Respondent H & R Packing & Sales Company, LLC, must pay Petitioner the full contract price for citrus fruit that said Respondent accepted upon tender despite knowing that the goods were nonconforming.
Findings Of Fact Petitioner Betty H. Shinn, d/b/a Shinn Groves ("Shinn"), is in the business of growing citrus fruit and hence is a "producer" within the regulatory jurisdiction of the Department of Agriculture and Consumer Services ("Department"). Respondent H & R Packing & Sales Company, LLC ("HRPS"), is a "citrus fruit dealer" operating within the Department's jurisdiction. On November 3, 2004, Shinn and HRPS entered into a contract (the "Contract") whereby HRPS agreed to harvest "fresh fruit quality" navel oranges from a particular section of Shinn's grove, which oranges Shinn agreed to sell to HRPS for the price of $8.00 per field box. The Contract provided, in pertinent part, as follows: The SELLER [that is, Shinn] shall take all reasonable and normal precautions to maintain fresh fruit quality during the life of this agreement. Failure to exercise close control to mites and other pests shall constitute a violation of this agreement. Further, the BUYER [i.e. HRPS] may at his option cancel this contract or renegotiate the price to be paid and the conditions of sale. In addition, the parties agreed that HRPS would pick the fruit no later than January 1, 2005, and pay for the oranges "within 45 days of the week of the harvest." An agent of HRPS's named Frederick Gaines inspected the crop identified to the Contract on a couple of occasions in November and December 2004. At some point he notified Shinn that the oranges were being damaged by rust mites. Shinn arranged to have the crop sprayed with Thiolux (a miticide), which was done around December 6, 2004. HRPS harvested the crop on January 3, 2005. (HRPS's performance in this regard was nonconforming, because the oranges were to be picked no later than January 1, 2005. By allowing HRPS to proceed after the deadline, however, Shinn waived HRPS's untimely performance.) At or about the time of the harvest, Mr. Gaines orally notified Charles Shinn (who is the son——and an agent——of Petitioner Betty Shinn) that the oranges had been damaged by rust mites and consequently were not fresh fruit quality. Mr. Shinn suggested that the oranges be "run through" the packing house (where the fruit would be graded on its quality), after which the parties could renegotiate the price, if necessary, to adjust for any material deficiencies in the quality of the crop. This proposal was evidently acceptable to HRPS, for it proceeded to harvest the oranges with knowledge that the crop was (or might not be) fresh fruit quality. HRPS picked 790 field boxes of oranges from Shinn's grove pursuant to the Contract. When these oranges were graded at the packing house, an unusually small percentage (approximately 34%) could be "packed out," that is, packaged and delivered for sale as fresh fruit.i The rest "graded out," i.e. failed to meet the standards for sale as fresh fruit, and were sold, at a loss, to juice processors. HRPS was obligated under the Contract to pay Shinn for the oranges on or before February 22, 2005, but HRPS let the deadline pass without either paying for the oranges or notifying Shinn of a breach with respect thereto. By letter dated March 17, 2005, Shinn demanded that HRPS pay the full contact price of $6,320 for the fruit harvested under the Contract.ii HRPS responded to Shinn's demand-letter via correspondence dated March 24, 2005. In this letter, HRPS acknowledged the Contract's existence but disclaimed the duty to pay in full due to the fruit's generally poor quality. HRPS expressed some willingness to resolve the matter amicably but offered no payment. Shinn was not satisfied and initiated this administrative proceeding. Ultimate Factual Determinations HRPS harvested and hauled away the oranges identified to the Contract. This performance constituted acceptance of the goods, and such acceptance was made with knowledge of a (possible) nonconformity, namely that the oranges were not fresh fruit quality due to rust mite damage. The apparent nonconformity was made manifest to HRPS shortly after the harvest, when an unusually small percentage of the pertinent crop was "packed out." HRPS failed, however, to notify Shinn of the breach within a reasonable time after confirming the nonconformity. Consequently, HRPS is barred from any remedy for breach. HRPS's failure to pay for the oranges at the Contract rate constituted a breach of the Contract entitling Shinn to recover the full price, together with pre-award interest. Accordingly, HRPS is obligated to pay Shinn the principal amount of $6,320.00, together with statutory interest of $378.20 (for the period 02/22/05 - 12/31/05). Interest will continue to accrue on the outstanding balance of $6,320.00 in the amount of $1.56 per day from January 1, 2006, until the date of the final order.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department enter a final order awarding Shinn the sum of $6,320.00, together with pre-award interest in the amount of $378.20 (through December 31, 2005), plus additional interest from January 1 2006, until the date of the final order, which will accrue in the amount of $1.56 per day. DONE AND ENTERED this 13th day of December, 2005, in Tallahassee, Leon County, Florida. S JOHN G. VAN LANINGHAM Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 13th day of December, 2005.
Findings Of Fact Petitioner, Deerfield Groves Company (Deerfield), is a licensed citrus fruit dealer under Chapter 601, Florida Statutes, and Chapter 20-34, Florida Administrative Code. As a licensee, Deerfield is subject to administrative and criminal prosecution for violation of the statutes and rules governing licensed citrus fruit dealers and was under administrative prosecution for alleged violations of Section 601.33, Florida Statutes, and Rule 20-34.11, Florida Administrative Code, at the time of the final hearing. Deerfield has legal standing as a party petitioner in this case. Respondent, Department Of Citrus (DOC), promulgated Rule 20-34.11, Florida Administrative Code, under the authority of Section 601.10, Florida Statutes. Rule 20-34.11 is designed to implement Section 601.33, Florida Statutes. Respondent, Department Of Agriculture And Consumer Services, (DACS), is the agency charged with the duty to enforce Section 601.33, Florida Statutes, and Rule 20- 34.11, Florida Administrative Code. Personnel of DACS' Division Of Fruit And Vegetable Inspection also are responsible for testing fresh citrus for maturity under Chapter 20-34, Florida Administrative Code. Licensees such as Deerfield furnish a testing room for DACS inspectors to perform maturity tests and certify fresh citrus, as required for marketing fresh fruit. DACS leases an extractor, used for squeezing juice from fruit samples, and subleases the extractor to the licensee. Under the sublease, the extractor is kept in the testing room for use by DACS inspectors and, when not being used by DACS inspectors, for use by the licensee in performing its own tests. Typically, the licensee furnishes the testing room with a table for two and a chair or two. When DACS inspectors perform maturity tests at the beginning of the early harvest, they bring most of the things they need for testing. The licensee provides the bins in which the fruit samples are carried into the testing room. The inspectors bring either a DACS slicing knife or their own. The licensee provides buckets it owns for use by the inspector during the test to collect juice extracted from fruit samples. The DACS inspectors also bring: a sizer to measure the fruit samples; a 2000 c.c. graduated cylinder to measure juice quantities; a 500 c.c. graduated cylinder to hold juice being tested for solids content and for temperature; aluminum pans to hold the graduated cylinders; a combination hydrometer for measuring juice solids content and temperature; a 25 m.1. pipet for transferring a measured amount of juice into a flask; the flask; a bottle of phenothaline with eyedropper top used for adding measured amounts of phenothaline to the flask of measured juice; a bottle of alkaline solution; and a burette for adding a measured amount of the alkaline solution to the flask of measured juice. During the harvest season, DACS leaves its equipment, instruments and solutions referred to in the preceding paragraph in the testing room. They are kept separate from the licensee's property and are not supposed to be used by the licensee. However, DACS allows the licensee to use its own bins and buckets and the extractor to conduct its own tests in the testing room when DACS inspectors are not using it. 1/ Some DACS inspectors request or allow licensees to assist during testing or to handle the fruit samples. 2/ Some allow licensees to attempt to influence the inspector's judgment by questioning the validity of the test or the accuracy of the inspector's observations or by comparing the inspector's results with the results of its own tests. Sometimes, this results in correction of an error the inspector otherwise would have made. It was not proved, however that there is an agency policy of requesting or allowing licensees to conduct themselves in those ways during testing. DACS has a policy to allow only one licensee representative in the testing room with the DACS inspector during testing. Violation of this policy is viewed as a violation of Section 601.33, Florida Statutes (1983). However, not all DACS inspectors strictly enforce this policy. Some allow more than one licensee representative in the testing room.
Findings Of Fact On November 10, 1977, Henry was employed as a teacher working under a continuing contract for the Citrus County School Board in Citrus High School, Inverness, Florida. At or about 12:35 p.m., on that date, Henry was responsible for a fourth period driving education class. At that time, class was beginning when Henry removed himself from the classroom to investigate a commotion in the hallway. The door of the classroom swung shut by itself and the lights to the classroom were switched off. A general commotion ensued in the classroom. After a brief period of time, Henry reentered the classroom and closed the door behind him. Henry removed his belt from his pants and did not turn on the lights. There was very little light in the classroom because the room had only two windows, one leading to an interior office which had no light on and the other approximately 1 square foot in size and located in the door leading to the hallway. There was, however, barely enough light for some students to observe the ensuing sequence of events. Henry then angrily asked the class who had turned the lights off and at the same time swung his belt in a threatening manner striking not only desks in the classroom but also a student, one Tracy White, between one and five times on the leg. Miss White was not seriously injured but she did experience some anxiety. One other student shared Miss White's concern for her personal welfare and moved from her seat near Miss White to another portion of the room in which she was out of danger. The incident was terminated several minutes later when someone turned the lights on. On September 8, 1977, a recommended order was entered in Citrus County School Board v. Allen P. Henry, Jr., Case No. 77-970, Division of Administrative Hearings, which order was adopted by the Citrus County School Board on September 27, 1977. In that case, Henry was found to have used his belt to break up a fight between students. It was concluded that such injudicial use of force constituted inconsiderate treatment of the pupils and it was recommended that Henry be formally advised by the School Board that the methods he employed were improper and were not to be repeated. On September 30, 1977, the School Board mailed a letter to Henry, which letter Henry subsequently received, referring to the recommended order of the Hearing Officer and advising Henry that the methods he employed in the circumstances of that case were improper and were not toe be repeated.
The Issue Whether Respondent, a citrus dealer, owes Petitioner, a citrus producer/grower, compensation for breach of a contract to buy, pick, haul, and sell fruit from Petitioner’s grove. If so, what is the reasonable amount of compensation.
Findings Of Fact Mecca includes a thirty-six acre Murcott tangerine grove in Lakeworth, Florida, purchased by Leonard Mecca in 2003. Murcott tangerines are primarily sold as fresh fruit. Through its owner, Mr. Mecca, Petitioner entered into a contract, on January 3, 2006, Emerald to pick fruit from the grove by April 10, 2006. Old Republic Surety Company is surety on the contract performance bond for $59,000.00, the maximum amount of compensation that can be recovered, if any. On behalf of Emerald, Keith Emmett, a fruit buyer with 25 years of experience, personally visited the Mecca grove and, on January 3, 2006, estimated the number of boxes of fruit at 5,000 boxes and sales price at $14.00 a box. Mr. Emmett’s estimate was the basis for the terms of the contract that was accepted by Mr. Mecca. Mr. Mecca also testified that he contracted with another organization, River Citrus, to be the caretaker of the grove. Mr. Mecca’s contract with Emerald included the statement that “[g]rower agrees to keep said fruit clean and to protect said fruit against fire, and to dust, spray and fertilize the same in such a manner that will not cause injury to said fruit or groves.” Emerald was, under the terms of the contract, required to pay for all “merchantable” fruit at picking time. At sometime in February or March, Mr. Mecca (not his caretaker) discovered that the irrigation system at the grove was not working. Mr. Mecca testified that he had the system repaired within two days. Weed control at the grove was to be done by the use of herbicides and mowing. Mr. Mecca testified that he had a conversation about the condition of the grove with Mr. Emmett, but only about water. Mr. Emmett visited the Mecca grove in late February or early March to see if the fruit was ready to pick to fill pending orders. He described the condition of the grove as having a “hard wilt,” meaning leaves curled, with soft, spongy green fruit. The weeds indicated to him an absence of mowing and herbicides. Mr. Emmett returned to the grove in April and described the fruit as still soft to the touch with a green cast. He also testified that he notified Mr. Mecca, in conversations through the month of March, that the grove needed watering and that the fruit was soft and needed more time. Mr. Mecca testified that he contacted Mr. Emmett several times in March and April to find out when the fruit would be picked because he believed it was getting overripe. Mr. Mecca testified that Mr. Emmett was waiting to pick the fruit late in the season when market prices rose enough to justify the $14.00 a box contract price. Mr. Mecca also testified regarding when he decided to stop negotiating with Emerald and to use another packing house, as follows: It had to be the day that Keith Emmett had his man, Bill Turner, call me to tell me that he was not going to be able to use the fruit unless I wanted -- to wait another two weeks. So -- which would have been around the 20th of April. Q. So that would have been the -- on or about the time that the -- you were informed that the fruit couldn’t be used as fresh fruit; is that correct? By Emerald? A. I was informed -- I was informed by Emerald that they didn’t want to pick any more fruit unless I wanted to wait two more weeks and try again, which was the story I heard every two weeks. Bill Turner, who was in charge of harvesting the fruit for Ridge Harvesting, previously had visited and inspected the Mecca grove in February, after Emerald received a report that the well was broken. He testified that he found wilted trees and lots of weeds. By the time he talked to Mr. Mecca about the condition of the grove, he recalled that the well had already been fixed. One load of 500 boxes of Mecca fruit was picked by Ridge Harvesting for Emerald on April 19, 2006, but failed to pass state inspection. Emerald, nevertheless, paid Mecca $14.00 a box for the 500 boxes, or $7,000.00, and on April 20, 2006, sent a letter to Mecca releasing the fruit back to Mecca and, in effect, terminating the January contract based on the poor condition of the fruit. The letter specified that the fruit was “. . . spongy, soft and indented from the weight of the fruit in the box.” Mr. Emmett testified that he suggested that Mr. Mecca agree to sell the fruit at lower prices for juice, rather than as fresh fruit. He testified that Mr. Mecca declined the offer and notified Mr. Emmett that he was going to use a different packing house. Donald Owens, a field buyer for Rio Citrus (Rio) had driven by the Mecca grove some time in April, and noticed that the fruit had not been picked. He was familiar with the grove, having picked it in prior years before it changed ownership. Mr. Owens searched out the new grower and called Mr. Mecca about picking the fruit, but was told that the fruit was under contract with another picker. On or about April 20, 2006, after Emerald’s representative notified him that they were not going to use the fruit, Mr. Mecca called Donald Owens back, met him at the grove and entered into a verbal contract for Rio to pick the fruit in what Mr. Mecca and Mr. Owens described as a “salvage operation.” When Donald Owens saw the grove, on or about April 20, 2006, he testified that the grass was high, the fruit was small but, he believed, within the criteria that you can pack as fresh fruit and otherwise merchantable. He testified that he told Mr. Mecca that, before he did anything, the grass had to be mowed. Mr. Owen’s company picked a total of 2,106 boxes of tangerines on April 24, April 25, May 1, and May 4, 2006, based on the dates on the trip tickets. Of those, according to Donald Owens and his settlement statements, 69 percent passed inspection and were packed to sell as fresh fruit, but 31 percent were so-called “eliminations” and had to be taken to a canning processing plant to be juiced. Mr. Owens testified that his company, Rio, stopped picking fruit because the canning processing plant stopped taking Murcotts. If Rio had continued, then he estimated that from 25 to 30 percent of the fruit would have ended up in cow pastures at a significant financial loss, considering the expense of picking, loading, hauling, separating, and hauling fruit by grade to a cow pasture. Rio paid Mecca approximately $12,000 for the fruit it picked and sold. The remaining fruit in the grove fell to the ground. In 2004, Emerald picked 9,000 boxes of fruit from the Mecca grove. Donald Owens, whose Rio company picked 2,106 boxes from a part of one of the three divisions of the grove, estimates that each of the three sections could have provided about 3,000 boxes each, or an approximate total of 9,000 boxes of fruit from the Mecca grove, of which approximately 6,000 remained after Rio stopped picking the fruit. In 2005, Mecca produced only 600 boxes of fruit due to hurricane damage and also because Murcott tangerines produce in large volumes every other year. In the Mecca contract with Emerald in 2006, Mr. Emmett estimated the number of boxes at 5,000 merchantable boxes for the 2006 growing season. Although Emerald picked 9,000 boxes in 2004, it is reasonable to believe that the yield would be lower after some trees were damaged during the hurricanes of 2005. The estimate and agreement made prior to this contractual dispute, 5,000 boxes, is accepted as the most reasonable estimate for the 2006 growing season. Stuart Arost, the owner of Emerald, testified that he had contracts to sell elimination Murcott tangerines through April and into the first part of May to canning plants in Umatilla and Haines City. One of those plants, he testified, is cooperative-owned and will take Murcotts as long as the owners are still harvesting the fruit, even into June. Emerald, more likely than not, could have sold the fruit for juice for $10.00 a box with net proceeds to Mecca of $8.00 a box if allowed to further revise the contract or mitigate damages. Mr. Arost testified that further damages could have been mitigated if Don Owens and Rio had continued to pick fruit and used the available processors for the elimination, but there is no evidence that Mr. Owens was aware of the alternative. The evidence, based on the testimony of all of the witnesses who entered the grove, supports a conclusion that some of the fruit in the grove was damaged due to lack of proper care, and that, more likely than not, resulted in the initial failure to pass inspection and the subsequent rate of eliminations. Although 500 boxes taken by Emerald failed USDA inspection, the fact that 2,106 boxes subsequently passed inspection indicates that Emerald correctly advised Mr. Mecca to wait another two weeks until about the time that Rio harvested the fruit rather than insisting that Emerald resume harvesting before the fruit was firm. While Mr. Mecca had agreed to the two-week extensions in the past, his refusal to agree on or about April 20, 2006, resulted in Emerald’s termination of the contract and his decision to use a different packing house.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law it is RECOMMENDED that a final order be entered denying any recovery by Petitioner Mecca Farms from Respondents Emerald Packing Company, Inc. and Old Republic Surety Company, as Surety. DONE AND ENTERED this 23rd day of January, 2007, in Tallahassee, Leon County, Florida. S ELEANOR M. HUNTER Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 23rd day of January, 2007. COPIES FURNISHED: Christopher E. Green Department of Agriculture and Consumer Services Office of Citrus License and Bond Mayo Building, M-38 Tallahassee, Florida 32399-0800 Franklin T. Walden, Esquire Law Offices of Franklin T. Walden 1936 Lee Road, Suite 100 Winter Park, Florida 32789 Eric Severson, Esquire Alley, Maass, Rogers & Lindsay, P.A. 340 Royal Poinciana Way, Suite 321 Palm Beach, Florida 33480-0431 Old Republic Surety Company Post Office Box 1635 Milwaukee, Wisconsin 53201 Richard D. Tritschler, General Counsel Department of Agriculture and Consumer Services 407 South Calhoun Street, Suite 520 Tallahassee, Florida 32399-0800 Honorable Charles H. Bronson Commissioner of Agriculture Department of Agriculture and Consumer Services The Capitol, Plaza Level 10 Tallahassee, Florida 32399-0810
The Issue The issues for determination in this case are whether Respondent, as a licensed citrus fruit dealer, breached the terms of an oral contract for the purchase of citrus fruit during the 1992-1993 shipping season, whether Respondent misappropriated certain other citrus fruit owned by Petitioner during the 1992-1993 shipping season, and further, whether such actions by Respondent constitute violations of the Florida Citrus Code for which the proceeds of the citrus fruit dealer's bond executed by Co-Respondent should be paid to Petitioner in satisfaction of Petitioner's claim pursuant to Section 601.66, Florida Statutes.
Findings Of Fact Petitioner, Riverfront Groves, Inc., is a corporation with an office in Vero Beach, Florida. At all material times, Petitioner was in the business of selling and marketing citrus fruit. At all material times, Daniel R. Richey was vice-president of Petitioner, in charge of the fresh fruit packing operation. Respondent, Bagaley Groves, is a business with an office in Vero Beach, Florida. At all material times, Respondent operated a citrus fruit gift shipping packinghouse. At all material times, Robert G. Bagaley was the owner of Respondent. Co-Respondent, Nationwide Mutual Insurance Company, is an insurance company, which was authorized to write surety bonds during the 1992-1993 citrus fruit shipping season. On December 10, 1992, Co-Respondent executed, as surety, Citrus Fruit Dealer's Bond No. 77-LP-007-245-0002, in the principal sum of $10,000.00, binding Co-Respondent as surety, to the Florida Commissioner of Agriculture. The terms and conditions of the bond were that Respondent, as the principal executing such bond, would comply with the provisions of the Florida Citrus Code during the 1992-1993 citrus fruit shipping season, and with the terms and conditions of all contracts relating to the purchase, handling, sale, and accounting of citrus fruit. Respondent held a valid citrus fruit dealer's license issued by the Department of Citrus for the 1991-1992 shipping season. On July 16, 1992, Respondent, by and through its owner Robert Bagaley, filed with the Department of Citrus an application for license as a citrus fruit dealer for the 1992-1993 shipping season. As indicated above, Respondent's bond required for licensure was not executed until December 10, 1992, and it was not until January 25, 1993, that Respondent was issued citrus fruit dealer's license No. 0269 for the 1992-1993 shipping season. The license is not specifically retroactive, and merely states that Respondent is ". . . granted a license to engage in the business of Citrus Fruit Dealer through July 31, 1993." At all material times Respondent, by and through its owner Robert Bagaley, held itself out as a licensed citrus fruit dealer in the state of Florida. In the fall of 1992, Respondent learned from a mutual friend, Henry Schacht, that Petitioner had navel oranges located in a grove in Indian River County, Florida, suitable for use in Respondent's fresh fruit packinghouse. In mid-November 1992, Petitioner, through its authorized representative Daniel R. Richey, and Respondent, through its owner Robert Bagaley, agreed that Respondent would purchase approximately 2,400 boxes of navel oranges from Petitioner at $7.00 per box. Respondent did not hold a valid license as a citrus fruit dealer in the state of Florida at the time this oral contract was entered into with Petitioner. Respondent harvested a total of 150 boxes of these navel oranges during the period of November 13 - 17, 1992, for which Respondent paid Petitioner the agreed upon price of $7.00 per box. This payment in the amount of $1,050.00 was made by check dated November 18, 1992. On December 3, 1992, Petitioner delivered a written contract to Respondent setting forth Petitioner's understanding of the terms of their agreement. The contract was executed by Petitioner. Respondent declined to sign the written contract, and the contract was returned to Petitioner on December 10, 1992. In early December 1992, Respondent learned from James Earl Brantley that some of the navel oranges in Petitioner's grove had green mold, a condition that would make the fruit unsuitable for fresh fruit packing. On December 10, 1992, Respondent repudiated the oral contract and notified Petitioner that Respondent could not use, and did not need, any more of Petitioner's navel oranges. Respondent did not inform Petitioner that some of the navel oranges had developed green mold, or that the navel oranges were otherwise not merchantable. At the time Respondent repudiated the oral contract, Respondent did not hold a valid license as a citrus fruit dealer in the state of Florida. By December 10, 1992, the marketing conditions for navel oranges were substantially deteriorating. From December 11 and 15, 1992, Petitioner harvested and processed the balance of the navel orange crop from the grove, some 2,785 boxes. Petitioner attempted to pack the oranges as fresh fruit. The packout ratio of these 2,785 boxes was approximately 18 percent, yielding Petitioner a net return of $78.01, ($129.38 return for 640 boxes picked December 11 and 12, 1992, and a loss of $51.37 on the remainder picked between December 12 and 15, 1992. Petitioner incurred a loss of $19,365.62, as result of Respondent's failure to pay the agreed upon contract price of $7.00 per box for the balance of the navel oranges. At the time Respondent (through Bagaley) notified Petitioner (through Richey) that Respondent did not intend to harvest the balance of the fruit, Petitioner informed Respondent that the remaining fruit would be harvested, that an accounting of the net proceeds for the remaining fruit would be made, and that the parties could then review the matter as to any outstanding indebtedness which might be due under the terms of the oral agreement. Respondent stated that a review after harvesting and accounting was acceptable. Within sixty days thereafter Petitioner (through Richey) received the accounting and met with Respondent (through Bagaley). At that time Respondent did not acknowledge the indebtedness, nor promise to pay the indebtedness to Petitioner. Subsequent to January 25, 1993, Respondent mistakenly picked red grapefruit from a grove owned by Petitioner, which was adjacent to a grapefruit block Respondent had purchased from a different owner. The parties agree that Respondent owes Petitioner $375.00 or $2.50 for 150 boxes of grapefruit picked from this grove. Respondent tendered a check to Petitioner in the amount of $375.00 for payment of the grapefruit; however, Petitioner declined to accept payment for the grapefruit pending resolution of Petitioner's claim for the navel oranges.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that: The Department enter a Final Order adjudicating the amount of indebtedness owed Petitioner by Respondent in accordance with Section 601.66, Florida Statutes, is $375.00 for 150 boxes of grapefruit mistakenly harvested. It is further recommended that Petitioner's claim for damages resulting from the contract for navel oranges entered into prior to Respondent's licensure as a citrus fruit dealer during the 1992-1993 shipping season be dismissed. RECOMMENDED in Tallahassee, Leon County, Florida, this 4th day of August, 1995. RICHARD HIXSON Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 4th day of August, 1995. APPENDIX As to Petitioner's Proposed Findings: 1-9. Adopted and incorporated. Adopted, except to the extent that Respondent's repudiation of the contract was solely related to market conditions. Adopted except as to Respondent's promise to pay subsequent to January 25, 1993. 12-14. These paragraphs constitute conclusions of law. COPIES FURNISHED: Douglas A. Lockwood III, Esquire PETERSON, MYERS, CRAIG, CREWS BRANDON & PUTERBAUGH, P.A. Post Office Drawer 7608 Winter Haven, Florida 33883-7608 Eugene J. O'Neill, Esquire GOULD, COOKSEY, FENNELL, BARKETT, O'NEILL & MARINE, P.A. 979 Beachland Boulevard Vero Beach, Florida 32963 Brenda Hyatt, Chief Bureau of License & Bond Department of Agriculture Mayo Building, Room 508 Tallahassee, Florida 32399-0800 Mr. David Z. Cutright Nationwide Mutual Insurance Company 1324 16th Street Vero Beach, Florida 32960
