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JOHN A. STEPHENS AND JOHN STEPHENS, INC. vs DEPARTMENT OF CITRUS, 97-000545RX (1997)
Division of Administrative Hearings, Florida Filed:Tallahassee, Florida Feb. 03, 1997 Number: 97-000545RX Latest Update: Jul. 29, 1997

The Issue The issue for determination is whether Department of Citrus Rules 20-1.009 and 20-1.010, Florida Administrative Code, are invalid exercises of delegated legislative authority, as alleged by Petitioners.

Findings Of Fact John Stephens, Inc., Petitioner, was at all times material hereto a Florida corporation duly licensed as a citrus fruit dealer in the State of Florida. J. A. Stephens, Inc., was a Florida corporation, and held a valid fruit dealer’s license in the State of Florida. At all times material to this proceeding, Petitioner, John A. Stephens, served as an officer and director of J. A. Stephens, Inc. John A. Stephens is not an officer, director or shareholder of John Stephens, Inc. John A. Stephens, Jr. is the president and sole director of John Stephens, Inc. and is not an officer, director nor shareholder of J. A. Stephens, Inc. On or about September 26, 1996, Petitioners, John Stephens, Inc., and John A. Stephens, applied to the Florida Department of Agriculture and Consumer Services to register John A. Stephens as an agent of John Stephens, Inc., pursuant to Section 601.601, Florida Statutes. The application form furnished by the Department of Agriculture and Consumer Services indicates that the licensed dealer seeking registration of an agent agrees to “... accept full responsibility for all his activities....” (Petitioners’ Exhibit 1) By letter dated December 26, 1996, Petitioners were advised by the Department of Agriculture and Consumer Services that their application for registration of John A. Stephens as an agent of John Stephens, Inc., had been denied on the basis of Rule 20-1.010, Florida Administrative Code. As indicated in the notice, that rule provides, in part, that an application for registration of a dealer’s agent can be disapproved if a proposed registrant has a “...record, either as an individual, co- partnership, corporation, association or other business unit, showing unsatisfied debts or orders issued by the Commissioner of Agriculture with respect to prior dealings in citrus fruit.” (Petitioners’ Exhibit 1.) Specifically, the Department of Agriculture and Consumer Services advised Petitioners that “...Mr. Stephens has not satisfied orders issued by the Commissioner of Agriculture with respect to prior dealings in citrus fruit...,” listing as the final orders in question Petitioners’ Exhibits 3 through 14. Between April 30, 1991, and September 30, 1992, the State of Florida, Department of Agriculture and Consumer Services entered a total of 12 final administrative orders in which it found that J. A. Stephens, Inc., was indebted to claimants for various sums arising from prior dealings in citrus fruit. (Petitioners’ Exhibits 3 through 14.) At the time of the action of the Department of Agriculture and Consumer Services denying Petitioners’ application, there remained amounts due and unpaid on each of the orders entered by the Department against J. A. Stephens, Inc. Petitioner, John A. Stephens was not named as a party respondent in any of the 12 proceedings culminating in final orders against J. A. Stephens, Inc., which formed the basis for the denial by the Department of the application for registration as a citrus dealer’s agent. (Petitioners’ Exhibits 2, and 3 through 14.) In denying a Motion for Relief for Final Order in the only Department of Agriculture and Consumer Services proceeding in which a claimant sought to join Mr. Stephens individually as a party, the Department found that: The complaint filed by Claimant named J. A. Stephens, Inc. as the respondent. Because the complaint was against J. A. Stephens, Inc., it was served on J. A. Stephens, Inc. J. A. Stephens, an individual, was never subjected to the jurisdiction of the Agency with regard to this matter. J. A. Stephens, an individual, was not afforded an opportunity to defend against the allegations of the complaint. There was no discussion at the hearing about whether J. A. Stephens, Inc. was or was not the proper respondent. There was no allegation at the hearing that J. A. Stephens, an individual, was the proper respondent. The Claimant has failed to express any legal basis for grant of his motion and this Agency could find no such basis. This Agency has no personal jurisdiction over J. A. Stephens, an individual, with regard to this matter and therefore cannot enter an order with respect to him. Further, even if such an order were to be entered, it would be of no force or effect because of the lack of personal jurisdiction. (Petitioners’ Exhibit 4, pg. 2.) The rules that are the subject of this proceeding had their inception in 1964, when the Florida Citrus Commission considered and adopted rules governing the registration of agents acting on behalf of licensed citrus dealers. These rules, which appear in the text of the minutes of the Commission as Regulation 105-1.05, are almost verbatim the same rules now found in Chapter 20-1, Florida Administrative Code. (Respondent’s Exhibits 1 and 2.) As reflected in the minutes of the Florida Citrus Commission, the rules were adopted to help protect the grower and shipper or processor in matters involving the normal movement of citrus fruit in all channels of distribution. The regulation was recommended by the Fresh Citrus Shippers Association and was endorsed by a resolution of the Florida Sheriffs Association. In presenting the Sheriffs’ resolution to the Commission, Sheriff Leslie Bessenger of the Florida Citrus Mutual Fruit Protection Division cited the results of a seven-month investigation that found 71 out of 200 registered agents with criminal records. Those two hundred agents represented only nine dealers. (Respondent’s exhibit 1, June 19, 1964, meeting.) Minutes of Commission meetings after rule adoption thoroughly explain the efforts to require accountability and curb abuse of the dealer- agent relationship. The rules, as they appear today in the Florida Administrative Code, have not been revised since July 1, 1975.

Florida Laws (13) 120.52120.536120.56120.569120.57120.68506.19506.28601.03601.10601.57601.59601.601 Florida Administrative Code (2) 20-1.00920-1.010
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GBS GROVES, INC., AND CITRUS GROWERS ASSOCIATES, INC. vs DEPARTMENT OF CITRUS, 02-002936RP (2002)
Division of Administrative Hearings, Florida Filed:Lakeland, Florida Jul. 22, 2002 Number: 02-002936RP Latest Update: Dec. 04, 2002

The Issue Whether Respondent's, Department of Citrus, proposed changes to Rules 20-71.005, 20-71.006, and 20-72.009, Florida Administrative Code, are invalid exercises of delegated legislative authority.

Findings Of Fact Based on the evidence and the testimony of witnesses presented and the entire record in this proceeding, the following findings of fact are made: In Florida, all citrus processing plant operations are under continuous inspection by USDA inspectors as a result of a Cooperative Agreement, which has an effective date of July 1, 1968, between the Consumer and Marketing Services (now known as Agricultural Marketing Services), the USDA, and the Florida Department of Agriculture (now known as Department of Agriculture and Consumer Services). By its terms, the Cooperative Agreement contemplates that the State of Florida agency (Respondent herein) may develop standards for processed citrus products under authority granted by Florida state law. As such, Respondent establishes policy and the USDA implements the policy established by Respondent. Since 1949, Chapter 601, Florida Statutes (the "Florida Citrus Code"), has vested Respondent with general and specific legislative authority to inspect, grade, develop minimum quality and maturity standards, and to do myriad other things to ensure the quality of processed citrus products. In addition, the Florida citrus industry has implemented internal quality control testing and standards in an effort to instill consumer confidence in Florida citrus products. Not unlike many other segments of commerce, the Florida citrus industry has evolved from small, local operators to large multi-state conglomerates. Innovation and consolidation has resulted in new products, production techniques, and citrus processing methodology. Where bulk concentrate was stored in 55-gallon drums in the 1950s, it is now stored in 100,000-gallon tanks, and can be transported in huge container trailers towed by semi-tractors. As the Florida citrus industry has changed, so too has governmental and internal testing for product wholesomeness, maturity, grade, and safety. Upon delivery to a citrus processing plant, all citrus fruit is tested for wholesomeness and maturity before it is processed. This initial inspection is accomplished by the arbitrary selection of approximately 38-45 pounds of citrus from throughout a 500-box load. If the citrus passes this initial testing, it proceeds to be processed. Processed citrus product is later tested for grade and, finally, undergoes microbial, pathogen, and safety testing by the Food and Drug Administration. In addition, processors undertake private testing to assure particular quality assurance. In 2001, the Florida Legislature repealed Subsection 601.48(1), Florida Statutes, and, as a result, deleted the statutory requirement for inspections of grade standards in registered citrus processing plants. The repeal of Subsection 601.48(1), Florida Statutes, eliminated legislative direction for a grade inspection; however, there remained other inspection requirements. Section 601.49, Florida Statutes, provides that it is unlawful for any person to sell or transport canned or concentrated products unless the same has been inspected and accompanied by a certificate of inspection or manifest indicating that an inspection has taken place. Subsection 601.48(3), Florida Statutes, exempts intrastate shipment of processed citrus products between licensed citrus fruit dealers who operate processing plants from grade labeling requirements. In 2000, Respondent, by Rule 20-71.005, Florida Administrative Code, established manifest requirements and statements for in-state transport of processed citrus products between registered facilities owned by the same processor. This was the precursor to the proposed rule changes, which are the subject of this rule challenge. Proposed Rule 20-71.005, Florida Administrative Code, allows the intrastate transport of bulk processed citrus products between registered facilities, eliminating the requirement that both facilities be owned by the same individual or entity and establishes informational requirements for the shipping manifest. One of the informational requirements for the shipping manifest established in the proposed rule is a certified statement that "the processed citrus products are being transported in bulk as processor grade." "Processor grade" is a new designation. Proposed Rule 20-71.006, Florida Administrative Code, establishes manifest requirements for transport of processed citrus products with the exception of bulk processed citrus product shipments specified in Rule 20-71.009, Florida Administrative Code. Proposed Rule 20-71.009, Florida Administrative Code, authorizes an inspector to issue a certificate of processor grade, which reflects that the bulk processed citrus product has been inspected for wholesomeness and maturity and ensures that the bulk processed citrus product will be inspected and/or re- graded before final shipment. The proposed rules reflect changes that are taking place in citrus processing methodology; the rule changes ensure that inspection as required by Section 601.49, Florida Statutes, takes place.

Florida Laws (9) 120.52120.536120.56120.68601.02601.10601.48601.49601.50
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DEPARTMENT OF AGRICULTURE AND CONSUMER SERVICES vs JOHN L. MAHON AND SHELBY MAHON, D/B/A JOHN'S CITRUS TREES, 10-001888 (2010)
Division of Administrative Hearings, Florida Filed:Leesburg, Florida Apr. 12, 2010 Number: 10-001888 Latest Update: Feb. 02, 2012

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.

Florida Laws (13) 120.569120.57120.68570.07570.32581.031581.091581.101581.121581.131581.141581.181581.211 Florida Administrative Code (2) 5B-62.0085B-62.020
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CUSHMAN FRUIT COMPANY, INC. vs CARLA DUPLEICH, BRIAN D. JEROME, D/B/A J AND G CITRUS GROVES AND GREAT AMERICAN INSURANCE COMPANY, AS SURETY, 08-005359 (2008)
Division of Administrative Hearings, Florida Filed:West Palm Beach, Florida Oct. 24, 2008 Number: 08-005359 Latest Update: Oct. 25, 2019

The Issue Whether Respondent is indebted to Petitioner for Florida- grown citrus products sold to Respondent.

Findings Of Fact Petitioner and Respondent are Florida-licensed citrus fruit dealers operating within the Department's regulatory jurisdiction. Great American was the surety for J and G Citrus' fruit dealer's license for the 2006-2007 citrus shipping season. J and G Citrus is Petitioner's customer. Petitioner ships fruit on behalf of J and G Citrus under their name for a service charge and fee for fruit, the cost of packing, and shipping. Petitioner and Respondent entered a written contract on November 12, 2004, for such services. Cushman's replacements policy provides that a customer should notify Cushman of any problem and the company will refund the monies for the order or replace the package. Cushman guarantees to "honor all replacement requests in a timely manner at no cost to you." J and G Citrus utilized the policy during its contract with Cushman. Cushman delivered the following fruit orders for J and G Citrus from December 22, 2006, to February 16, 2007: 292 navel fruit trays at $3.35 a tray; 168 grapefruit trays at $3.35 a tray; 87 honeybells trays at $6.88 a tray; and 29 tangerine trays for $6.88 at tray. The costs for the fruit shipped totaled $2,339.00. J and G Citrus was invoiced this amount. Accordingly, Respondent was obligated to pay Petitioner the total sum for the fruit. After Cushman Fruit invoiced J and G Citrus for the outstanding balance, no payment was received. On March 28, 2007, Cushman informed J and G Citrus of its bill and told Respondent that "You need to get current." J and G Citrus responded on the same day that it would provide a payment schedule by Monday. On April 23, 2007, J and G Citrus confirmed by email that they were going to start paying and would provide a payment. On May 7, 2007, Cushman requested the payment schedule from J and G Citrus again and informed the company, "I need a response from you today." Cushman never heard further from Respondent regarding payment. To date, the invoices are unpaid and the monies are owed to Cushman. Petitioner performed all of its duties under the contract with J and G Citrus and Respondent failed to pay for the services. J and G Citrus is, therefore, indebted to Petitioner.

Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED: That a final order be entered requiring Respondent pay to Petitioner the sum of $2,339.00 DONE AND ENTERED this 11th day of February, 2009, in Tallahassee, Leon County, Florida. S JUNE C. McKINNEY Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 11th day of February, 2009. COPIES FURNISHED: Elizabeth Alvarez Cushman Fruit Company, Inc. 3325 Forest Hill Boulevard West Palm Beach, Florida 33406 Rob Brehm Great American Insurance Company Post Office Box 2119 Cincinnati, Ohio 45201 Christopher E. Green, Esquire Department of Agriculture and Consumer Services Office of Citrus License and Bond Mayo Building, M-38 Tallahassee, Florida 32399-0800 Brian D. Jerome Carla Dupleich J & G Citrus Groves 5781 Seminole Way Fort Lauderdale, Florida 33314 Honorable Charles Bronson Commissioner of Agriculture Department of Agriculture and Consumer Services The Capitol, Plaza Level 10 Tallahassee, Florida 32399-0810 Richard D. Tritschler, General Counsel Department of Agriculture and Consumer Services 407 South Calhoun Street, Suite 520 Tallahassee, Florida 32399-0800

Florida Laws (8) 120.569120.57601.03601.55601.61601.64601.65601.66
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NEWBERN GROVES, INC. vs INTER-FLORIDANA, INC.M, AND OHIO CASUALTY INSURANCE COMPANY, 94-006775 (1994)
Division of Administrative Hearings, Florida Filed:Tampa, Florida Dec. 02, 1994 Number: 94-006775 Latest Update: Jun. 01, 2009

The Issue The issues in this case are whether, and to what extent, the Respondent, a licensed citrus fruit dealer, is liable to the Petitioner for damages resulting from the purchase, handling, sale, and accounting of purchases and sales occurring during the 1992-1993 growing season, and further whether the Co- Respondent, Surety Company, is therefore liable on the citrus fruit dealer's bond issued to the Respondent.

Findings Of Fact Petitioner, Newbern Groves Inc., is a Florida corporation engaged in the business of producing, buying, and selling citrus fruit. Petitioner's business address is in Tampa, Florida. Newbern Groves, Inc. was founded in 1947 by Copeland Newbern, who at all relevant times in this case served as Chairman of the Board of Directors. The President of Newbern Groves, Inc., is John Shepard. The Secretary- Treasurer of Newbern Groves, Inc., is Peter Skemp. At all relevant times, Respondent, Inter-Floridana, Inc., (full name, Inter-Floridana Imports and Exports, Inc.) was a citrus fruit dealer, licensed by the State of Florida during the 1992-1993 growing season. Respondent's business address was Brooksville, Florida, where Respondent operated a processing plant. The 1992-1993 growing season was the first year Respondent operated this processing plant. Respondent also maintained offices and warehouses in Orange County, Florida. In addition to its citrus fruit business, Respondent corporation also engaged in other business enterprises including blending other fruit drinks, processing tomato juice concentrate, and the sale of imported beer. At all relevant times, Jacques Bobbe was President and Chief Executive Officer of Inter-Floridana, Inc. At all relevant times, Larry Cail was the manager of the Respondent's processing plant in Brooksville, Florida. Beginning in May of 1992, Jacques Bobbe, on behalf of Inter-Floridana, and Peter Skemp and Copeland Newbern, on behalf of Newbern Groves, entered into discussions relating to Newbern's supplying Inter-Floridana with citrus fruit for the Inter-Floridana plant in Brooksville, Florida. Prior to this time the parties had not met, and there was no established course of business dealings between the parties. Specific meetings between the parties took place on July 30, 1992 in Brooksville; September 2, 1992 in Tampa; September 17, 1992 in Tampa; September 29, 1992 in Orlando; and November 25, 1992 in Tampa. The discussions conducted by the parties generally related to Newbern supplying Inter-Floridana with 1,500,000 boxes of citrus fruit which would accommodate the capacity of Inter-Floridana's Brooksville plant. The parties also generally discussed prices of various citrus fruit. There is no written documentation of the parties' negotiations. It is common practice in the citrus fruit industry to purchase and sell citrus fruit without written contracts. On November 3, 1992, Newbern delivered its first shipment of citrus fruit to Inter-Floridana's Brooksville plant. The shipment was delivered pursuant to Inter-Floridana's request to conduct a test-run of the processing plant's production capability. In December of 1992, Larry Cail of Inter- Floridana specifically requested grapefruit be delivered from Newbern. At that time Newbern was selling grapefruit to Chapman Fruit Company at $1.15 a pound. Thereafter Newbern continued to deliver citrus fruit shipments to Inter- Floridana's Brooksville plant on a regular basis until April 14, 1993. Inter- Floridana accepted the deliveries of citrus fruit from Newbern. The total pounds solids of Newbern fruit delivered to Inter-Floridana was 1,375,359.98, consisting of: 1,261,323.38 pound solids of orange juice 8,087.87 pound solids of mandarin 63,426.55 pound solids of white grapefruit juice 42,522.18 pound solids of red grapefruit juice. Beginning in December of 1992 Newbern representatives Peter Skemp and Copeland Newbern demanded payment for the fruit delivered to the Inter-Floridana plant in Brooksville. The customary practice in the citrus fruit business is payment is due one week after delivery. In this case, however, Newbern had agreed to a two-week after delivery payment. The price of the citrus fruit was to be calculated on the cost to Newbern of obtaining the fruit from the growers plus .05 for Newbern's expenses in making the deliveries to Inter-Floridana. On February 26, 1993, Inter-Floridana made its first payment to Newbern in the amount of $80,000. Thereafter Inter-Floridana made three more payments of $40,000, $40,000, and $30,000. The final payment from Inter-Floridana was made on April 1, 1993. After the April 1, 1993 payment, representatives of Newbern continued to demand payment from Inter-Floridana. No further payments were received, and Newbern ceased delivery of citrus fruit to Inter-Floridana on April 14, 1993. On May 12, 1993 the parties met in Brooksville, Florida. At this meeting Jacques Bobbe informed Peter Skemp and Copeland Newbern that Inter- Floridana's position was that Inter-Floridana was not purchasing citrus fruit from Newbern, but processing the citrus fruit for Newbern, and accordingly, Newbern owed Inter-Floridana approximately $400,000 for the costs of production, which was documented in a letter from Inter-Floridana to Newbern on May 14, 1993. At hearing on May 10, 1994, Jacques Bobbe testified that Inter-Floridana retracted its previous position, and did purchase citrus fruit from Newbern during the 1992-1993 growing season. On May 24, 1993, Copeland Newbern sent a letter to Jacques Bobbe demanding payment of $789,374.01 based on the Florida Citrus Mutual citrus statistics for the citrus fruit at that time, plus .05 for Newbern's services. On June 1, 1993, Jacques Bobbe sent a letter to Copeland Newbern requesting additional information regarding the calculation of the payment demanded from Newbern. On June 23, 1993, Copeland Newbern sent a certified letter to Jacques Bobbe detailing the problems associated with this transaction, and requesting assistance in resolving the matter in a timely manner. On June 25, 1993, Newbern filed the formal complaint against Inter- Floridana with the Department of Agriculture and Consumer Services which is the basis for this proceeding. Representatives of the parties met again on July 8, 1993; and on July 9, 1993, Jacques Bobbe sent a letter to John Shepard offering to resolve this matter as follows: Inter-Floridana would sell the frozen concentrated orange juice at $1.29 per pound solid; Newbern would receive $.83 per pound solid; Inter-Floridana would receive $.29 for packing and $.17 profit per pound solid. If the product sold for more than $1.29 per pound solid, the parties would divide the excess profit equally. On July 16, 1993, John Shepard, as President of Newbern Groves Inc., wrote to Jacques Bobbe and accepted this agreement. On July 19, 1993, Inter-Floridana filed its answer to the formal complaint filed by Newbern. The answer was verified by Jacques Bobbe. The answer denied that Inter-Floridana purchased citrus fruit from Newbern, and further claimed Newbern owed Inter-Floridana $442,133.21 for various services in connection with the processing and storage of the Newbern fruit. As set forth above, this position was subsequently retracted, and Inter-Floridana acknowledged the purchase of citrus fruit from Newbern. On August 5, 1993, Jacques Bobbe, on behalf of Inter-Floridana, filed a verified statement with the Department of Citrus attesting that Inter-Floridana did not purchase any fruit during the 1992-1993 growing season. The verified statement further attested that Inter-Floridana processed fruit for Newbern, and that Inter-Floridana had accounts payable of $978,580, and accounts receivable of $489,378.83. The accounts payable represented funds owed by Inter-Floridana to Newbern, and the accounts receivable consisted of the various production charges from Newbern as claimed by Inter-Floridana. On August 26, 1993, Newbern received an accounting from Inter-Floridana showing 500,651.26 pound solids of orange juice, 2,512.02 pound solids of mandarin, 39,809 pound solids of white grapefruit, and 11,602.50 pound solids of red grapefruit. This balance was substantially less than the amount delivered to Inter-Floridana. Unbeknown to Newbern, in February of 1993, Inter-Floridana had sold a substantial portion of the Newbern product to Windsor-Premium (Premium), a European business concern that Jacques Bobbe had been negotiating with since February of 1992. On February 26, 1993 Premium paid Inter-Floridana $807,825.29 for the product. This sale was the first part of a proposed ongoing transaction between Premium and Inter-Floridana to market citrus products in Europe. The proposed transaction would have been approximately $2 million; however, Premium did not complete the transaction with Inter-Floridana, and Premium eventually filed for bankruptcy in the United States District Court for the Southern District of Florida. The four payments totalling $190,000 that Inter-Floridana made to Newbern were derived from the proceeds of the sale to Premium. On October 1, 1993 Inter-Floridana sent a letter to John Shepard informing Newbern that of 1,375,359.57 pound solids, 848,558.76 had been sold. Thereafter in October of 1993, Inter-Floridana returned to Newbern 501,130.73 pound solids of orange, 18,018.92 pound solids of white grapefruit, and 11,614.39 pound solids of pink grapefruit. Newbern resold the returned orange citrus product to Indian River Fruits by means of a citrus broker, Merrill Lynch, which received a brokerage fee of $5,011.30. Some of the grapefruit citrus product had gelled and could not be resold.

Recommendation Based on the foregoing, it is, hereby, RECOMMENDED: That the Department of Agriculture and Consumer Services enter a final order adjudicating that the amount of indebtedness owed to the Petitioner from Respondent is $543,126.53, that the Respondent shall have thirty (30) days in which to satisfy such indebtedness, and upon failure of the Respondent to satisfy such indebtedness, the citrus fruit dealer's bond in the amount of $24,000 shall be distributed to Petitioner. DONE AND RECOMMENDED this 13th day of February, 1995, in Tallahassee, Leon County, Florida. RICHARD HIXSON Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 13th day of February, 1995. APPENDIX TO RECOMMENDED ORDER, CASE NO. 94-6775 Petitioner's proposed findings of fact. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted in part. Respondent acknowledged discussion of prices for the citrus fruit. Accepted in part. Respondent acknowledged an indebtedness of $978,580. Accepted. Accepted. Rejected as not supported by the evidence. Respondent's proposed findings of fact. Accepted. Accepted. Accepted. Rejected as not supported by the evidence. Rejected as not supported by the evidence. Rejected as not supported by the evidence. Accepted. Rejected in part. Rejected as to the frozen concentrated orange juice, accepted as to grapefruit. Rejected as irrelevant. Rejected as not supported by the evidence. Rejected as not supported by the evidence. Rejected as not supported by the evidence. Rejected as not supported by the evidence. COPIES FURNISHED: Timothy G. Hayes, Esquire 21859 State Road 54, Suite 200 Lutz, Florida 33549 Eric S. Mashburn, Esquire Post Office Box 771277 Winter Garden, Florida 34777-1277 The Honorable Bob Crawford Department of Agriculture and Consumer Services The Capitol, PL-10 Tallahassee, Florida 32399-0810 Richard Tritschler, General Counsel Department of Agriculture and Consumer Services The Capitol, PL-10 Tallahassee, Florida 32399-0810 Brenda Hyatt, Chief Bureau of Licensing & Bond Department of Agriculture 508 Mayo Building Tallahassee, Florida 32399-0800

Florida Laws (6) 120.57120.68601.65601.66671.103672.706
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RIVERFRONT GROVES, INC. vs BAGALEY GROVES AND NATIONWIDE MUTUAL INSURANCE COMPANY, 94-006774 (1994)
Division of Administrative Hearings, Florida Filed:Lakeland, Florida Dec. 02, 1994 Number: 94-006774 Latest Update: Nov. 16, 1995

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

Florida Laws (5) 120.57601.64601.641601.65601.66
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SUN AND EARTH CITRUS, LLC vs FLORIDA DEPARTMENT OF CITRUS, 12-001837 (2012)
Division of Administrative Hearings, Florida Filed:Bartow, Florida May 18, 2012 Number: 12-001837 Latest Update: Nov. 05, 2012

The Issue The issue in this case is whether the licensure application filed by Petitioner, Sun and Earth Citrus, LLC ("Sun and Earth"), for licensure as a citrus fruit dealer should be denied or approved by the Florida Citrus Commission (the "Commission").

Findings Of Fact Sun and Earth is a Florida limited liability company formed for the purpose of buying and selling citrus products. Vazquez is the sole owner of Sun and Earth and serves as its president. The company was formed in January 2012. Vazquez formed the company partly in response to a series of events concerning his brother, William. A discussion of those facts is pertinent to the underlying facts in this case: William operated businesses named Zumoval Citrus Packer and Zumoval Trucking and Cold Storage. William obtained a license to operate a packinghouse after seeing other dealers acting in a way he believed to be illegal. He renewed the license each year for two years, but when he attempted to renew the third year, his application was denied. At the Commission meeting where William's renewal application was considered, Vazquez appeared on William's behalf because William could not adequately articulate his position. The meeting did not go well for William; Vazquez had to calm William down and keep him from yelling at the commissioners during the meeting. The meeting date was January 18, 2012. After the meeting at which William's license renewal was denied, Vazquez announced to Department employees that because his brother could not be licensed, Vazquez would seek his own license. Inasmuch as Vazquez had appeared on William's behalf, and they were siblings, the Department had some concern that Vazquez's application was a subterfuge and simply an attempt to allow William to operate using Vazquez's license. On March 2, 2012, Vazquez filed an application with the Department; it was received on March 6, 2012. The application, as filed, said the proposed business would include operation of a packinghouse, being a fruit broker, operating a roadside stand, and being a wholesaler. The application contained information about Sun and Earth, as well as its owner, Vazquez. An application fee of $25.00 and a cashier's check in the amount of $1,000.00 for a bond were included with the application. Upon its initial review of the application, the Department noticed several errors and omissions. Ms. Wiggins, a license and regulation specialist for the Department, contacted Vazquez via telephone on March 6, 2012, to discuss her findings concerning the application content. She told Vazquez that a substantially larger bond was required for a license that included a packinghouse. She also noted that if the proposed roadside stand was purchasing fruit directly from a grower, then it must also have a bond. If the fruit was being purchased from a packinghouse, no bond would be required. Ms. Wiggins asked Vazquez to identify the packinghouse(s) from whom he intended to purchase fruit. The purpose of her request was to verify that fruit was being purchased from a packinghouse, rather than from a grower. Vazquez sent Ms. Wiggins an email the very next day confirming the telephone discussion. Vazquez, in response, asked that the packinghouse designation be removed from his application. He also stated that according to everything discussed during their telephone conversation, it was his contention that the application was complete. He then questioned why his brother's company--which had recently been denied renewal of its license--was pertinent to his application for a citrus dealer license. Vazquez asked when his application would be considered by the Commission. Ms. Wiggins replied to the Vazquez email via an email dated March 8, 2012. The email noted that Ms. Wiggins had removed the packinghouse request from the application. It also addressed the need for different reference letters relating to Sun and Earth. Then the email set out five enumerated issues that still needed to be addressed, to wit: An explanation as to how he operated Zumoval Citrus, LLC, without a wholesaler license from 2009 to 2011. How Zumoval Citrus, LLC, continued doing business in 2011, when it became inactive in September 2010. An explanation of his probation or parole from New York State relating to a conviction for stolen property. A list of the packinghouses from which he would be purchasing fruit. An address for the roadside stand. Ms. Wiggins also advised Vazquez in her email that the Department could not grant a conditional approval of the application in that there were "unusual or questionable circumstances" surrounding the filing of the application. That is, the relationship between Vazquez and William caused some concern for the Department. Ms. Wiggins reminded Vazquez that the $1,000.00 bond submitted with the application would not be sufficient if Sun and Earth planned to purchase fruit from growers. She then advised Vazquez that if he would submit all the missing information at least five days prior to the Commission meeting scheduled for March 21, 2012, the application would be presented for review. Vazquez responded via email dated March 13, 2012. He provided responses to the five enumerated issues set forth in Ms. Wiggins' email as follows: He explained that neither of his companies continued to do business after they were declared inactive in September 2010. He explained that he had another business entity that was operating, but neither of the questioned businesses was in operation. Included in above response. Vazquez had presented evidence of his conviction in the application; he did not believe anything further was required. He was upset that Ms. Wiggins apparently had information from his other prior transgressions (more on this below) and wanted to know what information she had seen. Vazquez refused to provide names of the packinghouses with whom he planned to do business. He stated that the inquiry was outside of Ms. Wiggins' "scope of duties," and he did not have to comply with her request. He asked that the roadside stand designation be removed from the application. Vazquez's email then became somewhat belligerent and argumentative. He concluded with a demand that his application be presented to the Commission on March 21, 2012. The reason Ms. Wiggins had asked Vazquez for a list of the packinghouses he planned to do business with was two-fold: First, Vazquez had indicated he planned to have a roadside stand. If the stand was going to get its fruit from a grower, then a larger bond would be required. If the fruit was to come from packinghouses, then there would be no bond requirement. Ms. Wiggins attempted to ascertain whether Vazquez was planning to obtain fruit from packinghouses. Second, due to Vazquez first indicating he would operate a packinghouse and then removing that designation, Ms. Wiggins wanted to make sure he was being honest and truthful in his responses. Citrus dealers by and large police themselves, so it is important that the Department know they can trust entities to which they issue licenses. By striking the roadside stand item from his application, Vazquez still did not alleviate the basis for Ms. Wiggins' questions about packinghouses. The Department decided that because of the questionable and unusual circumstances surrounding Vazquez's application, it would not issue a conditional license. Rather, it would process the application and send it on to the Commission for review and approval or denial. After further review, the Department ultimately decided that it would recommend denial of the Sun and Earth application when it was forwarded to the Commission. Vazquez was notified of the decision by way of a letter dated May 3, 2012, sent by certified mail, return receipt requested. The letter advised Vazquez that he could challenge the decision in an administrative hearing. Vazquez chose to do so, thereby staying any further action on the application until a final order could be issued in the instant proceeding. The basis of the Department's decision was that the Sun and Earth application had misrepresented Vazquez's circumstances with respect to his work history, residence, and criminal background. Further, Vazquez had been reluctant to respond to requests for information after reasonable inquiry by the Department. As to Vazquez's reported work history as set forth in the application, Vazquez had initially provided a work history summary in response to question 18. The response indicated employment from March 2007 until January 2011 with Associated Produce in Bronx, New York. In fact, Vazquez was incarcerated in New York for most of that time period. An amended response to question 18 was submitted; it did not list Associated Produce as a former employer. Vazquez explained the erroneous information thusly: The dates of employment were taken directly from his resume. His resume was attached to the application only to show his employment duties, not as evidence of the dates he actually worked. It was simply a mistake, said Vazquez, not an attempt to mislead the Department. Vazquez's testimony in this regard was self-serving and not credible. As to his history of residence in the state, the application said Vazquez had lived at the same address in Florida for the past five years. In truth, Vazquez was in prison in New York and did not move to Florida until 2009. Again, Vazquez said that was simply a mistake and was not meant to mislead the Department. Again, the testimony provided by Vazquez as to this issue was not credible. The issues concerning Vazquez's criminal history are more complex. Question 10 in the application asks for information concerning investigations, charges, arrests or convictions "in the last 10 years." Vazquez provided information concerning an arrest in October 2010 for carrying a concealed weapon. He also provided the Order acquitting him of the charge. The arrest report references probation for a conviction of possession of stolen property in New York. The Department, during its background check of Vazquez, found that he was on parole. Vazquez was asked to clarify the probation versus parole discrepancy. He explained that between the arrest and acquittal, his parole officer had submitted a violation of parole, but that was lifted after his acquittal. The Department's concern about Vazquez's relationship with his brother was founded on the fact that Vazquez represented William before the Commission just prior to the filing of the Sun and Earth application. That representation preceded Vazquez's remark to a Department employee that if his brother could not have a license, he would seek one himself. The statement put the Department on notice that the brothers may be trying to circumvent William's loss of his license. At final hearing, it was evident the brothers had no such intent. In fact, William was not cooperative with Vazquez's efforts to obtain a license that would, in effect, compete with William's business. The Department also raised a concern about the letters of reference received in support of the Sun and Earth application. Normally, the Department would forward Letter of Reference forms to businesses, and they would be returned directly to the Department. In this case, Vazquez took the letters to business owners himself. There is nothing inherently improper about doing this, but it caused some concern to the Department in a case where red flags had already been raised. Ms. Wiggins had never had an applicant refuse to answer questions during the application process. When Vazquez raised his "scope of work" objections, Ms. Wiggins was taken aback. Vazquez, an admitted novice in the citrus business, basically told the Department how to do its job. Faced with this very unique situation, Ms. Wiggins then asked her supervisor to become involved in the application review so that it would be done completely in accordance with Department rules. After the March 13, 2012, email from Vazquez, it was decided that the Department legal counsel should also be involved. The Department was justifiably concerned about the propriety of the Sun and Earth application. Citrus dealers are generally self-governing, and the Department began to have concerns that Vazquez could not be trusted. That, in and of itself, was sufficient basis for the recommendation of denial of Vazquez's application. Vazquez admitted to being less than forthright with the Department on his application. He withheld information that he believed the Department could easily obtain on its own. He refused to answer questions that he did not believe were relevant. He would not cooperate with inquiries made into issues about his past. He disagreed that his affiliation with his brother's company was relevant, so he stonewalled all inquiries about that issue. All in all, Vazquez--the applicant for a license--refused to provide information and assistance to the entity which was reviewing his application. While he may have had his personal reasons for his actions, what he did was not conducive to obtaining approval from the Department. Thus, his application was given a recommendation for denial.

Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered by the Department of Citrus/Florida Citrus Commission, denying Sun and Earth's application. DONE AND ENTERED this 30th day of August, 2012, in Tallahassee, Leon County, Florida. S R. BRUCE MCKIBBEN Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 30th day of August, 2012.

Florida Laws (8) 120.569120.57120.60120.68601.55601.57601.58601.67
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SPYKE`S GROVE, INC., D/B/A FRESH FRUIT EXPRESS, EMERALD ESTATE, NATURE`S CLASSIC vs CARLYN R. KULICK, D/B/A CARLYN`S AND WESTERN SURETY COMPANY, 01-002649 (2001)
Division of Administrative Hearings, Florida Filed:Fort Lauderdale, Florida Jul. 05, 2001 Number: 01-002649 Latest Update: Jan. 11, 2002

The Issue Whether the Respondent Carlyn R. Kulick, d/b/a Carlyn's, failed to pay amounts owing to the Petitioner for the shipment of citrus fruit, as set forth in the Complaint dated April 30, 2001, and, if so, the amount the Petitioner is entitled to recover.

Findings Of Fact At all times material to this proceeding, Spyke's Grove and Carlyn's were "citrus fruit dealers" licensed by the Department. As part of its business, Carlyn's sells to its retail customers "gift fruit" consisting of oranges and grapefruit for shipment to third persons identified by the customers. Carlyn R. Kulick is the owner of Carlyn's and acted on its behalf with respect to the transactions that are the subject of this proceeding. Spyke's Grove is in the business of packaging and shipping "gift fruit" consisting of oranges and grapefruit pursuant to orders placed by other citrus fruit dealers. Barbara Spiece is the president of Spyke's Grove and acted on its behalf with respect to the transactions that are the subject of this proceeding. In November and December 1999, Spyke's Grove received a number of orders for "gift fruit" from Carlyn's. Most of the orders were for single shipments of fruit. One order was for six monthly shipments of fruit. This was the first year Carlyn's had done business with Spyke's Grove, and Carlyn's and Spyke's Grove did not execute a written contract governing their business relationship. On the night of Sunday, December 12, 1999, the Spyke's Grove's packinghouse was destroyed by fire, and its offices were substantially damaged. The fire could not have happened at a worse time because it was at the peak of the holiday fruit- shipping season. Spyke's Grove was able to move into temporary offices and to obtain the use of another packinghouse very quickly. It had telephone service at approximately noon on Tuesday, December 14, 1999, and it began shipping "gift fruit" packages on Friday, December 17, 1999, to fill the orders it had received. Carlyn R. Kulick, the owner of Carlyn's, learned of the fire at Spyke's Grove and attempted to contact the Spyke's Grove offices for an update on the orders Carlyn's had placed for shipment during the holidays. Mr. Kulick was unable to contact anyone at Spyke's Grove for three or four days after the fire, and he was worried that his customers' orders for "gift fruit" would not be shipped on time. Mr. Kulick called another packinghouse and placed orders duplicating some of the orders Carlyn's had placed with Spyke's Grove. Meanwhile, Spyke's Grove was giving priority to its smaller wholesale customers such as Carlyn's, and it shipped all of the orders it had received from Carlyn's. Carlyn's did not cancel its orders with Spyke's Grove or otherwise notify Spyke's Grove that it should not ship the fruit; Mr. Kulick assumed that Spyke's Grove would contact him if it intended to ship the fruit ordered by Carlyn's. Spyke's Grove sent numerous invoices and statements of account to Carlyn's Regarding the gift fruit at issue here. According to the statement of account dated June 1, 2001, as of that date Carlyn's owed Spyke's Grove $1,069.78 for the gift fruit at issue here. Most of the invoices to Carlyn's that were submitted by Spyke's Grove contain the following: "Terms: Net 14 days prompt payment is expected and appreciated. A 1½% monthly service charge (A.P.R. 18% per annum) may be charged on all past due accounts. . . ." Relying on this language, Spyke's Grove also seeks to recover a monthly service charge for each month that Carlyn's account was past due. Carlyn's does not dispute Spyke's Grove's claim that $1,069.78 worth of "gift fruit" was shipped by Spyke's Grove pursuant to orders Carlyn's placed in November and December 1999. Carlyn's' basic position is that it need not pay Spyke's Grove for the fruit because Spyke's Grove did not notify it after the December 12, 1999, fire that it would ship the orders and because Carlyn's had to make sure that its customers' orders were filled. The uncontroverted evidence establishes that Carlyn's was, at the times material to this proceeding, a Florida- licensed and bonded citrus fruit dealer; that, in November and December 1999, Carlyn's submitted orders to Spyke's Grove for the shipment of "gift fruit" consisting of oranges and grapefruit; that Spyke's Grove shipped all of the "gift fruit" ordered by Carlyn's in November and December 1999; that the price of the "gift fruit" shipped by Spyke's Grove pursuant to Carlyn's' orders totaled $1,069.78; and that Spyke's Grove timely filed its complaint alleging that Carlyn's failed to promptly pay its indebtedness to Spyke's Grove for citrus products shipped pursuant to orders placed by Carlyn's. Spyke's Grove is, therefore, entitled to payment of the principal amount of $1,069.78, plus pre-judgment interest. Based on the date of the last invoice which contained a charge for any of the gift fruit at issue here, the prehearing interest would run from May 1, 2000.

Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Agriculture and Consumer Services enter a final order ordering Carlyn R. Kulick, d/b/a Carlyn's, to pay $1,069.78 to Spyke's Grove, Inc., d/b/a Fresh Fruit Express, Emerald Estate, Nature's Classic, together with pre-judgment interest calculated at the rate specified in Section 55.03, Florida Statutes, on the amounts owing. DONE AND ENTERED this 1st day of November, 2001, in Tallahassee, Leon County, Florida. MICHAEL M. PARRISH Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 1st day of November, 2001. COPIES FURNISHED: Carlyn R. Kulick, Owner Carlyn's 1601 Fifth Avenue, North St. Petersburg, Florida 33713 Barbara Spiece, President Spyke's Grove, Inc. 7250 Griffin Road Davie, Florida 33314 Western Surety Company Post Office Box 5077 Sioux Falls, South Dakota 57117 Honorable Charles H. Bronson Commissioner of Agriculture Department of Agriculture and Consumer Services The Capitol, Plaza Level 10 Tallahassee, Florida 32399-0810 Richard D. Tritschler, General Counsel Department of Agriculture and Consumer Services The Capitol, Plaza Level 10 Tallahassee, Florida 32399-0810 Brenda D. Hyatt, Bureau Chief Bureau of License and Bond Department of Agriculture and Consumer Services 541 East Tennessee Street India Building Tallahassee, Florida 32308

Florida Laws (10) 120.5755.03601.01601.03601.55601.61601.64601.65601.66687.01
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PEACE RIVER CITRUS PRODUCTS, INC.; FRESH JUICE OF FLORIDA, INC.; AND SUN ORCHARD OF FLORIDA, INC. vs DEPARTMENT OF CITRUS, 02-004607RP (2002)
Division of Administrative Hearings, Florida Filed:Arcadia, Florida Dec. 02, 2002 Number: 02-004607RP Latest Update: Mar. 03, 2004

The Issue The issue in DOAH Case No. 02-3648RE is whether Emergency Rules 20ER02-01, 20ER02-02, and 20ER02-03 constitute an invalid exercise of delegated legislative authority. The issue in DOAH Case No. 02-4607RP is whether Proposed Rules 20-15.001, 20- 15.002, and 20-15.003, Florida Administrative Code, constitute an invalid exercise of delegated legislative authority.

Findings Of Fact Based on the stipulated facts, and the entire record in this proceeding, the following findings of fact are made: The Florida Citrus Commission was established in 1935 to organize and promote the growing and sale of various citrus products, fresh and processed, in the State of Florida. The purpose of the Citrus Commission is today reflected in Section 601.02, Florida Statutes. The powers of the Florida Citrus Commission ("the Commission") and the Department, are set forth in full in Section 601.10, Florida Statutes. The powers of the Department include the power to tax and raise other revenue to achieve the purposes of the Department. In particular, Section 601.10(1) and (2), Florida Statutes, state: The Department of Citrus shall have and shall exercise such general and specific powers as are delegated to it by this chapter and other statutes of the state, which powers shall include, but shall not be confined to, the following: To adopt and, from time to time, alter, rescind, modify, or amend all proper and necessary rules, regulations, and orders for the exercise of its powers and the performance of its duties under this chapter and other statutes of the state, which rules and regulations shall have the force and effect of law when not inconsistent therewith. To act as the general supervisory authority over the administration and enforcement of this chapter and to exercise such other powers and perform such other duties as may be imposed upon it by other laws of the state. The Department is authorized to set standards by Section 601.11, Florida Statutes, as follows: The Department of Citrus shall have full and plenary power to, and may, establish state grades and minimum maturity and quality standards not inconsistent with existing laws for citrus fruits and food products thereof containing 20 percent or more citrus or citrus juice, whether canned or concentrated, or otherwise processed, including standards for frozen concentrate for manufacturing purposes, and for containers therefor, and shall prescribe rules or regulations governing the marking, branding, labeling, tagging, or stamping of citrus fruit, or products thereof whether canned or concentrated, or otherwise processed, and upon containers therefor for the purpose of showing the name and address of the person marketing such citrus fruit or products thereof whether canned or concentrated or otherwise processed; the grade, quality, variety, type, or size of citrus fruit, the grade, quality, variety, type, and amount of the products thereof whether canned or concentrated or otherwise processed, and the quality, type, size, dimensions, and shape of containers therefor, and to regulate or prohibit the use of containers which have been previously used for the sale, transportation, or shipment of citrus fruit or the products thereof whether canned or concentrated or otherwise processed, or any other commodity; provided, however, that the use of secondhand containers for sale and delivery of citrus fruit for retail consumption within the state shall not be prohibited; provided, however, that no standard, regulation, rule, or order under this section which is repugnant to any requirement made mandatory under federal law or regulations shall apply to citrus fruit, or the products thereof, whether canned or concentrated or otherwise processed, or to containers therefor, which are being shipped from this state in interstate commerce. All citrus fruit and the products thereof whether canned or concentrated or otherwise processed sold, or offered for sale, or offered for shipment within or without the state shall be graded and marked as required by this section and the regulations, rules, and orders adopted and made under authority of this section, which regulations, rules, and orders shall, when not inconsistent with state or federal law, have the force and effect of law. The Department is authorized to conduct citrus research by Section 601.13, Florida Statutes. To help pay for these duties of the Department, the Legislature first enacted the "box tax" in 1949. The box tax is now codified as Section 601.15(3), Florida Statutes. Section 601.15(3)(a), Florida Statutes, provides in relevant part: There is hereby levied and imposed upon each standard-packed box of citrus fruit grown and placed into the primary channel of trade in this state an excise tax at annual rates for each citrus season as determined from the tables in this paragraph and based upon the previous season's actual statewide production as reported in the United States Department of Agriculture Citrus Crop Production Forecast as of June 1. Section 601.15(3)(a), Florida Statutes, goes on to set forth specific rates for fresh grapefruit, processed grapefruit, fresh oranges, processed oranges, and fresh or processed tangerines and citrus hybrids. Section 601.15(1), Florida Statutes, sets forth the Department's authority to administer the box tax, as follows: The administration of this section shall be vested in the Department of Citrus, which shall prescribe suitable and reasonable rules and regulations for the enforcement hereof, and the Department of Citrus shall administer the taxes levied and imposed hereby. All funds collected under this section and the interest accrued on such funds are consideration for a social contract between the state and the citrus growers of the state whereby the state must hold such funds in trust and inviolate and use them only for the purposes prescribed in this chapter. The Department of Citrus shall have power to cause its duly authorized agent or representative to enter upon the premises of any handler of citrus fruits and to examine or cause to be examined any books, papers, records, or memoranda bearing on the amount of taxes payable and to secure other information directly or indirectly concerned in the enforcement hereof. Any person who is required to pay the taxes levied and imposed and who by any practice or evasion makes it difficult to enforce the provisions hereof by inspection, or any person who, after demand by the Department of Citrus or any agent or representative designated by it for that purpose, refuses to allow full inspection of the premises or any part thereof or any books, records, documents, or other instruments in any manner relating to the liability of the taxpayer for the tax imposed or hinders or in anywise delays or prevents such inspection, is guilty of a misdemeanor of the second degree, punishable as provided in s. 775.082 or s. 775.083. The box tax was challenged in 1936 and the Florida Supreme Court issued an opinion in 1937 upholding the validity of the box tax. C.V. Floyd Fruit Company v. Florida Citrus Commission, 128 Fla. 565, 175 So. 248 (1937). In 1970, the Legislature enacted the "equalization tax," codified as Section 601.155, Florida Statutes. The statute mirrored Section 601.15, Florida Statutes, but added certain processors who were mixing foreign citrus products with Florida products. The purpose of the equalization tax was to have all Florida processors of citrus products help pay for the costs of the Department, rather than have the burden fall entirely on the Florida growers subject to the box tax. Section 601.155, Florida Statutes, provides, in relevant part: The first person who exercises in this state the privilege of processing, reprocessing, blending, or mixing processed orange products or processed grapefruit products or the privilege of packaging or repackaging processed orange products or processed grapefruit products into retail or institutional size containers or, except as provided in subsection (9) or except if a tax is levied and collected on the exercise of one of the foregoing privileges, the first person having title to or possession of any processed orange product or any processed grapefruit product who exercises the privilege in this state of storing such product or removing any portion of such product from the original container in which it arrived in this state for purposes other than official inspection or direct consumption by the consumer and not for resale shall be assessed and shall pay an excise tax upon the exercise of such privilege at the rate described in subsection (2). Upon the exercise of any privilege described in subsection (1), the excise tax levied by this section shall be at the same rate per box of oranges or grapefruit utilized in the initial production of the processed citrus products so handled as that imposed, at the time of exercise of the taxable privilege, by s. 601.15 per box of oranges. In order to administer the tax, the Legislature provided the following relevant provisions in Section 601.155, Florida Statutes: Every person liable for the excise tax imposed by this section shall keep a complete and accurate record of the receipt, storage, handling, exercise of any taxable privilege under this section, and shipment of all products subject to the tax imposed by this section. Such record shall be preserved for a period of 1 year and shall be offered for inspection upon oral or written request by the Department of Citrus or its duly authorized agent. Every person liable for the excise tax imposed by this section shall, at such times and in such manner as the Department of Citrus may by rule require, file with the Department of Citrus a return, certified as true and correct, on forms to be prescribed and furnished by the Department of Citrus, stating, in addition to other information reasonably required by the Department of Citrus, the number of units of processed orange or grapefruit products subject to this section upon which any taxable privilege under this section was exercised during the period of time covered by the return. Full payment of excise taxes due for the period reported shall accompany each return. All taxes levied and imposed by this section shall be due and payable within 61 days after the first of the taxable privileges is exercised in this state. Periodic payment of the excise taxes imposed by this section by the person first exercising the taxable privileges and liable for such payment shall be permitted only in accordance with Department of Citrus rules, and the payment thereof shall be guaranteed by the posting of an appropriate certificate of deposit, approved surety bond, or cash deposit in an amount and manner as prescribed by the Department of Citrus. * * * (11) This section shall be liberally construed to effectuate the purposes set forth and as additional and supplemental powers vested in the Department of Citrus under the police power of this state. In March 2000, certain citrus businesses challenged Section 601.155(5), Florida Statutes, as being unconstitutional. At the time of the suit, Section 601.155(5), Florida Statutes, read as follows: All products subject to the taxable privileges under this section, which products are produced in whole or in part from citrus fruit grown within the United States, are exempt from the tax imposed by this section to the extent that the products are derived from oranges or grapefruit grown within the United States. In the case of products made in part from citrus fruit grown within the United States, it shall be the burden of the persons liable for the excise tax to show the Department of Citrus, through competent evidence, proof of that part which is not subject to a taxable privilege. The citrus businesses claimed the exemption in Section 601.155(5) rendered the tax unconstitutionally discriminatory, in that processors who imported juice from foreign countries to be blended with Florida juice were subject to the equalization tax, whereas processors who imported juice from places such as California, Arizona and Texas enjoyed an exemption from the tax. The case, Tampa Juice Service, Inc., et al. v. Department of Citrus, Case No. GCG-00-3718 (Consolidated), was brought in the Tenth Judicial Circuit Court, in and for Polk County. Judge Dennis P. Maloney of that court continues to preside over that case. In a partial final declaratory judgment effective March 15, 2002, Judge Maloney found Section 601.155, Florida Statutes, unconstitutional because it violated the Commerce Clause of the United States Constitution due to its discriminatory effect in favor of non-Florida United States juice. In an order dated April 15, 2002, Judge Maloney severed the exemption in Section 601.155(5), Florida Statutes, from the remainder of the statute. The court's decision necessitated the formulation of a remedy for the injured plaintiffs. While the parties were briefing the issue before the court, the Florida Legislature met and passed Chapter 2002-26, Laws of Florida, which amended Section 601.155, Florida Statutes, to read as follows: Products made in whole or in part from citrus fruit on which an equivalent tax is levied pursuant to s. 601.15 are exempt from the tax imposed by this section. In the case of products made in part from citrus fruit exempt from the tax imposed by this section, it shall be the burden of the persons liable for the excise tax to show the Department of Citrus, through competent evidence, proof of that part which is not subject to a taxable privilege. Chapter 2002-26, Laws of Florida, was given an effective date of July 1, 2002. By order dated August 8, 2002, Judge Maloney set forth his decision as to the remedy for the plaintiffs injured by the discriminatory effect of Section 601.155(5), Florida Statutes. Judge Maloney expressly relied on the rationale set forth in Division of Alcoholic Beverages and Tobacco v. McKesson Corporation, 574 So. 2d 114 (Fla. 1991)("McKesson II"). In its initial McKesson decision, Division of Alcoholic Beverages and Tobacco v. McKesson Corporation, 524 So. 2d 1000 (Fla. 1988), the Florida Supreme Court affirmed a summary judgment ruling that Florida's alcoholic beverage tax scheme, which gave tax preferences and exemptions to certain alcoholic beverages made from Florida crops, unconstitutionally discriminated against interstate commerce. The Florida Supreme Court also affirmed that portion of the summary judgment giving the ruling prospective effect, thus denying the plaintiff a refund of taxes paid pursuant to the unconstitutional scheme. The decision was appealed to the United States Supreme Court. In McKesson Corporation v. Division of Alcoholic Beverages and Tobacco, 496 U.S. 18 (1990), the United States Supreme Court reversed the Florida Supreme Court's decision as to the prospective effect of its decision. The United States Supreme Court held that: The question before us is whether prospective relief, by itself, exhausts the requirements of federal law. The answer is no: If a State places a taxpayer under duress promptly to pay a tax when due and relegates him to a postpayment refund action in which he can challenge the tax's legality, the Due Process Clause of the Fourteenth Amendment obligates the State to provide meaningful backward-looking relief to rectify any unconstitutional deprivation. 496 U.S. at 31 (footnotes omitted). The United States Supreme Court set forth the following options by which the state could meet its obligation to provide "meaningful backward-looking relief:" [T]he State may cure the invalidity of the Liquor Tax by refunding to petitioner the difference between the tax it paid and the tax it would have been assessed were it extended the same rate reductions that its competitors actually received. . . . Alternatively, to the extent consistent with other constitutional restrictions, the State may assess and collect back taxes from petitioner's competitors who benefited from the rate reductions during the contested tax period, calibrating the retroactive assessment to create in hindsight a nondiscriminatory scheme. . . . Finally, a combination of a partial refund to petitioner and a partial retroactive assessment of tax increases on favored competitors, so long as the resultant tax actually assessed during the contested tax period reflects a scheme that does not discriminate against interstate commerce, would render petitioner's resultant deprivation lawful and therefore satisfy the Due Process Clause's requirement of a fully adequate postdeprivation procedure. 496 U.S. at 40-41 (citations and footnotes omitted). The United States Supreme Court expressly provided that the state has the option of choosing the form of relief it will grant. In keeping with the United States Supreme Court opinion, the Florida Supreme Court granted the Division of Alcoholic Beverages and Tobacco (the "Division") leave to advise the Court as to the form of relief the state wished to provide. The Division proposed to retroactively assess and collect taxes from those of McKesson's competitors who had benefited from the discriminatory tax scheme. McKesson contended that a refund of the taxes it had paid was the only clear and certain remedy, because retroactive taxation of its competitors would violate their due process rights. McKesson II, 574 So. 2d at 115. The Florida Supreme Court remanded the case to the trial court for further proceedings on McKesson's refund claim, with the following instructions: While McKesson may not necessarily be entitled to a refund, it is entitled to a "clear and certain remedy," as outlined in the Supreme Court's opinion. Because nonparties, such as amici, will be directly affected by the retroactive tax scheme proposed by the state, all affected by the proposed emergency rule must be given notice and an opportunity to intervene in this action. Therefore, on remand, the trial court not only must determine whether the state's proposal meets "the minimum federal requirements" outlined in the Supreme Court's opinion, it also must determine whether the proposal comports with federal and state protections afforded those against whom the proposed tax will be assessed. We emphasize that the state has the option of choosing the manner in which it will reformulate the alcoholic beverage tax during the contested period so that the resultant tax actually assessed during that period reflects a scheme which does not discriminate against interstate commerce. Therefore, if the trial court should rule that the state's proposal to retroactively assess and collect taxes from McKesson's competitors does not meet constitutional muster and such ruling is upheld on appeal, the state may offer an alternative remedy for the trial court's review. However, any such proposal likewise must satisfy the standards set forth by the Supreme Court as well as be consistent with other constitutional restrictions. 574 So. 2d at 116. In the instant case, Judge Maloney assessed the options prescribed by the series of McKesson cases and concluded that the only fair remedy was to assess and collect back assessments from those who benefited from the unconstitutional equalization tax exemption. His August 8, 2002 order directed the Department to "take appropriate steps, consistent with existing law, to assess and collect the Equalization tax from those entities which [benefited] from the unconstitutional exemption." On September 18, 2002, the Department promulgated the Emergency Rules at issue in DOAH Case No. 02-3648RE. The Emergency Rules were filed with the Department of State on September 24, 2002, and took effect on that date. They were published in the October 4, 2002 issue of the Florida Administrative Weekly (vol. 28, no. 40, pp. 4271-4272). The full text of the Emergency Rules is: EQUALIZATION TAX ON NON-FLORIDA UNITED STATES JUICE 20ER02-1 Intent. The Court in Tampa Juice Service, et al v. Florida Department of Citrus in Consolidated Case Number GCG-003718 (Circuit Court in and for Polk County, Florida) severed the exemption contained in Section 601.155(5), Florida Statutes, that provided an exemption for persons who exercised one of the enumerated Equalization Tax privileges on non-Florida, United States juice. The Court had previously determined that the stricken provisions operated in a manner that violated the Commerce Clause of the United States Constitution. On August 8, 2002, the Court ordered that the Florida Department of Citrus "take appropriate steps, consistent with existing law, to assess and collect the Equalization tax from those entities which [benefited] from the unconstitutional exemption." It is the Florida Department of Citrus' intent by promulgating the following remedial Rule 20ER02-01 and Chapter 20-15, F.A.C., to implement a non-discriminatory tax scheme, which does not impose a significant tax burden that is so harsh and oppressive as to transgress constitutional limitations. These rules shall be applicable to those previously favored persons who received favorable tax treatment under the statutory sections cited above. Specific Authority 601.02, 601.10, 601.15, 601.155 FS. Law Implemented 601.02, 601.10, 601.15, 601.155 FS. History-- New 9-24-02. 20ER02-2 Definitions. "Previously favored persons" shall be defined as any person who exercised an enumerated Equalization Tax privilege as defined by Section 601.155, Florida Statutes, but who was exempt from payment of the Equalization Tax due to the exemption for non-Florida, United States juice set forth in the statutory provision, which was ultimately determined to be unconstitutional and severed from Section 601.155(5), Florida Statutes. The "tax period" during which the severed provisions of Section 601.155(5), Florida Statutes, were in effect shall be defined as commencing on October 6, 1997, and ending on March 14, 2002. "Tax liability" shall be defined as the total amount of taxes due to the Florida Department of Citrus during the "tax period," at the following rates per box for each respective fiscal year: Fiscal Year Processed Rate Orange Grapefruit 1997-1998 .175 .30 1998-1999 .17 .30 1999-2000 .18 .325 2000-2001 .175 .30 2001-2002 .165 .18 Specific Authority 601.02, 601.10, 601.15, 601.155 FS. Law Implemented 601.02, 601.10, 601.15, 601.155 FS. History-- New 9-24-02. 20ER02-3 Collection. The Florida Department of Citrus shall calculate the tax liability for each person or entity that exercised an enumerated Equalization Tax privilege outlined in section 601.155, Florida Statutes, upon non-Florida, United States juice based upon inspection records maintained by Florida Department of Agriculture and Consumer Services and the United States Department of Agriculture. Additionally, the Florida Department of Citrus will provide notice of the calculation to the previously favored persons by certified mail. The notice of the calculation shall contain a statement including the following categories: (a) Tax liability; (b) Gallons; Brix; Type of product; (e) Total solids; (f) Conversion rate; (g) Total boxes; (h) Delineation of non-Florida, United States juice. (2)(a) Contained within the notice will be the various legal options available to those who previously enjoyed the exemption, set forth in proposed Rule 20- 15.003(2), F.A.C. (b) Persons who previously enjoyed the exemption may petition to intervene in the case of Tampa Juice Service, Inc., et al, Consolidated Case No. GCG-003718, presently pending before the Circuit Court of the Tenth Judicial Circuit in and for Polk County. A hearing to consider arguments made by any intervenor, the Plaintiffs and the Florida Department of Citrus is currently scheduled to be heard by the Honorable Dennis Maloney on November 12, 2002, in Bartow, Florida. (3) The Florida Department of Citrus will not oppose the timely intervention of persons who previously enjoyed the subject exemption that wish to present a claim to the Court in the Tampa Juice Service, Inc., et al v. Florida Department of Citrus. However, the Florida Department of Citrus does not waive any argument regarding the validity of the calculation of the tax liability or that imposition of this tax is constitutional. Specific Authority 601.02, 601.10, 601.15, 601.155 FS. Law Implemented 601.02, 601.10, 601.15, 601.155 FS. History-- New 9-24-02. The Department's "Specific Reasons for Finding an Immediate Danger to the Public Health, Safety or Welfare" were set forth as follows: On March 18, 2002, the Court in the Tenth Judicial Circuit, State of Florida, in and for Polk County, entered a Partial Final Declaratory Judgment in the case of Tampa Juice Service, Inc., et al v. Florida Department of Citrus, Consolidated Case Number GCG-003718. In this order the Court ruled that the exemption in Section 601.155, F.S., for non-Florida, United States juice was unconstitutional. On or about April 15, 2002, the Court severed the exemption for non-Florida, United States juice from section 601.155(5), F.S. On August 8, 2002, the Court held that the Florida Department of Citrus was required to cure the invalidity of the equalization taxing scheme. To cure this invalidity, the Florida Department of Citrus promulgates Rule 20ER02-1, F.A.C., which will serve to implement the Court's order for a nondiscriminatory tax scheme and provide due process protections for the previously favored taxpayers. These rules are being promulgated on an emergency basis to meet time constraints associated with litigation and to establish guidelines which protect the public's and state's interest for the orderly and efficient collection and payment of the tax liability. Without these guidelines, the welfare of the citizens and the state would be adversely affected because of the immediate and widespread impact of the failure of previously favored persons to properly remit the tax. The Department's "Reason for Concluding that the Procedure is Fair Under the Circumstances" was set forth as follows: Promulgation of these guidelines using the emergency rule procedures is the only available mechanism which adequately protects the public interests under the circumstances which require collection and payment of the tax liability. This procedure is fair to the public and to the previously favored persons. It permits promulgation of the necessary guidelines within a time frame which allows the industry to be adequately informed of their duties, responsibilities and rights with respect to the tax liability. In the November 15, 2002 issue of the Florida Administrative Weekly (vol. 28, no. 46, pp. 4996-4998), the Department published the Proposed Rules at issue in DOAH Case No. 02-4607RP. The text of Proposed Rule 20-15.001, Florida Administrative Code, is identical to that of Emergency Rule 20ER02-1, set forth above. The text of Proposed Rule 20-15.002, Florida Administrative Code, is identical to that of Emergency Rule 20ER02-2, set forth above. The text of Proposed Rule 20- 15.003(1)&(3), Florida Administrative Code, is identical to that of Emergency Rule 20ER02-3(1)&(3), set forth above. The text of Proposed Rule 15.003(2), Florida Administrative Code, varies from the text of Emergency Rule 20ER02-3(2), and reads as follows: 20-15.003 Collection. Subsequent to adoption of this rule, the Florida Department of Citrus will provide to the previously favored persons by certified mail a Notice of Tax Liability which shall contain a demand for payment consistent with the above-referenced itemized statement. The Department will deem late payment of Equalization Taxes owed by previously favored persons to constitute good cause, and shall waive the 5 percent penalty authorized by Section 601.155(10), F.S., as compliance with either of the following is established by Department [sic]: Lump sum payment of the tax liability remitted with the filing of Department of Citrus Form 4R (incorporated by reference in Rule 20-100.004, F.A.C.) for the relevant years and then-applicable tax rate(s) per subsection 20-15.002(3), F.A.C., within 61 days of receiving Notice of Tax Liability; or Equal installment payments remitted with the filing of Department of Citrus Form 4R (incorporated by reference in Rule 20-100.004, F.A.C.) for the relevant years and then-applicable tax rate(s) per subsection subsection [sic] 20-15.002(3), F.A.C., over a 60-month period, the first payment being due within 61 days of receiving Notice of Tax Liability pursuant to subsection 20-15.003(2), F.A.C.; or The Good Cause provisions of 601.155(10), F.S., shall not apply to persons who do not comply with paragraph 20- 15.003(2)(a), F.A.C., or paragraph 20- 15.003(2)(b), F.A.C. Failure to pay the taxes or penalties due under 601.155, F.S. and Chapter 20-15, F.A.C., shall constitute grounds for revocation or suspension of a previously favored person's citrus fruit dealer's license pursuant to 601.56(4), F.S., 601.64(6), F.S., 601.64(7), F.S., and/or 601.67(1), F.S. Peace River is a Florida corporation and licensed citrus fruit dealer regulated by Chapter 601, Florida Statutes. As such, Peace River is subject to the rules of the Department. Peace River buys, sells, and manufactures bulk citrus juices. By correspondence dated October 2, 2002, Peace River was notified by the Department that Peace River would be liable for payment of $86,242.41 in Equalization taxes for the tax period of October 6, 1997 through March 14, 2002 (the "tax period"), pursuant to the terms of the Emergency Rules. Fresh Juice is a Florida corporation and licensed citrus fruit dealer regulated by Chapter 601, Florida Statutes. As such, Fresh Juice is subject to the rules of the Department. Fresh Juice buys, sells, and manufactures citrus juices. By correspondence dated October 2, 2002, Fresh Juice was notified by the Department that Fresh Juice would be liable for payment of $45,052.19 in Equalization taxes for the tax period, pursuant to the terms of the Emergency Rules. Sun Orchard is a Florida corporation and licensed citrus fruit dealer regulated by Chapter 601, Florida Statutes. As such, Sun Orchard is subject to the rules of the Department. Sun Orchard buys, sells, and manufactures citrus juices. By correspondence dated October 2, 2002, Sun Orchard was notified by the Department that Sun Orchard would be liable for payment of $45,052.19 in Equalization taxes for the tax period, pursuant to the terms of the Emergency Rules. During the tax period, Peace River, Fresh Juice, and Sun Orchard imported, stored and blended non-Florida, United States citrus juices. Neither Peace River, Fresh Juice, nor Sun Orchard is a party to the lawsuit styled Tampa Juice Service, Inc., et al. v. Department of Citrus, Case No. GCG-00-3718 (Consolidated). Peace River, Fresh Juice, and Sun Orchard contend that they relied on the tax exemption in making business decisions and had no notice that their activities regarding non-Florida, United States juice would be taxable upon the court's striking of the exemption in Section 601.155(5), Florida Statutes. Accordingly, Peace River, Fresh Juice, and Sun Orchard contend that, during the tax period, they had no opportunity to conform their conduct to avoid the tax or position themselves to claim a refund allowed by Section 601.155, Florida Statutes. Peace River, Fresh Juice, and Sun Orchard contend that they have not been obligated by Chapter 601, Florida Statutes, to keep specific records on their use of non-Florida United States citrus juices for the tax period, but admit they keep business records required by law, which may include some business records related to non-Florida United States juice during the tax period. Peace River, Fresh Juice, and Sun Orchard shipped products made with non-Florida, United States juice during the tax period without payment of the Equalization Tax.

Florida Laws (21) 120.52120.54120.56212.13212.21601.02601.10601.11601.13601.15601.155601.29601.47601.49601.51601.56601.64601.67775.08775.082775.083
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