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
The Issue The issue in DOAH Case No. 02-3648RE is whether Emergency Rules 20ER02-01, 20ER02-02, and 20ER02-03 constitute an invalid exercise of delegated legislative authority. The issue in DOAH Case No. 02-4607RP is whether Proposed Rules 20-15.001, 20- 15.002, and 20-15.003, Florida Administrative Code, constitute an invalid exercise of delegated legislative authority.
Findings Of Fact Based on the stipulated facts, and the entire record in this proceeding, the following findings of fact are made: The Florida Citrus Commission was established in 1935 to organize and promote the growing and sale of various citrus products, fresh and processed, in the State of Florida. The purpose of the Citrus Commission is today reflected in Section 601.02, Florida Statutes. The powers of the Florida Citrus Commission ("the Commission") and the Department, are set forth in full in Section 601.10, Florida Statutes. The powers of the Department include the power to tax and raise other revenue to achieve the purposes of the Department. In particular, Section 601.10(1) and (2), Florida Statutes, state: The Department of Citrus shall have and shall exercise such general and specific powers as are delegated to it by this chapter and other statutes of the state, which powers shall include, but shall not be confined to, the following: To adopt and, from time to time, alter, rescind, modify, or amend all proper and necessary rules, regulations, and orders for the exercise of its powers and the performance of its duties under this chapter and other statutes of the state, which rules and regulations shall have the force and effect of law when not inconsistent therewith. To act as the general supervisory authority over the administration and enforcement of this chapter and to exercise such other powers and perform such other duties as may be imposed upon it by other laws of the state. The Department is authorized to set standards by Section 601.11, Florida Statutes, as follows: The Department of Citrus shall have full and plenary power to, and may, establish state grades and minimum maturity and quality standards not inconsistent with existing laws for citrus fruits and food products thereof containing 20 percent or more citrus or citrus juice, whether canned or concentrated, or otherwise processed, including standards for frozen concentrate for manufacturing purposes, and for containers therefor, and shall prescribe rules or regulations governing the marking, branding, labeling, tagging, or stamping of citrus fruit, or products thereof whether canned or concentrated, or otherwise processed, and upon containers therefor for the purpose of showing the name and address of the person marketing such citrus fruit or products thereof whether canned or concentrated or otherwise processed; the grade, quality, variety, type, or size of citrus fruit, the grade, quality, variety, type, and amount of the products thereof whether canned or concentrated or otherwise processed, and the quality, type, size, dimensions, and shape of containers therefor, and to regulate or prohibit the use of containers which have been previously used for the sale, transportation, or shipment of citrus fruit or the products thereof whether canned or concentrated or otherwise processed, or any other commodity; provided, however, that the use of secondhand containers for sale and delivery of citrus fruit for retail consumption within the state shall not be prohibited; provided, however, that no standard, regulation, rule, or order under this section which is repugnant to any requirement made mandatory under federal law or regulations shall apply to citrus fruit, or the products thereof, whether canned or concentrated or otherwise processed, or to containers therefor, which are being shipped from this state in interstate commerce. All citrus fruit and the products thereof whether canned or concentrated or otherwise processed sold, or offered for sale, or offered for shipment within or without the state shall be graded and marked as required by this section and the regulations, rules, and orders adopted and made under authority of this section, which regulations, rules, and orders shall, when not inconsistent with state or federal law, have the force and effect of law. The Department is authorized to conduct citrus research by Section 601.13, Florida Statutes. To help pay for these duties of the Department, the Legislature first enacted the "box tax" in 1949. The box tax is now codified as Section 601.15(3), Florida Statutes. Section 601.15(3)(a), Florida Statutes, provides in relevant part: There is hereby levied and imposed upon each standard-packed box of citrus fruit grown and placed into the primary channel of trade in this state an excise tax at annual rates for each citrus season as determined from the tables in this paragraph and based upon the previous season's actual statewide production as reported in the United States Department of Agriculture Citrus Crop Production Forecast as of June 1. Section 601.15(3)(a), Florida Statutes, goes on to set forth specific rates for fresh grapefruit, processed grapefruit, fresh oranges, processed oranges, and fresh or processed tangerines and citrus hybrids. Section 601.15(1), Florida Statutes, sets forth the Department's authority to administer the box tax, as follows: The administration of this section shall be vested in the Department of Citrus, which shall prescribe suitable and reasonable rules and regulations for the enforcement hereof, and the Department of Citrus shall administer the taxes levied and imposed hereby. All funds collected under this section and the interest accrued on such funds are consideration for a social contract between the state and the citrus growers of the state whereby the state must hold such funds in trust and inviolate and use them only for the purposes prescribed in this chapter. The Department of Citrus shall have power to cause its duly authorized agent or representative to enter upon the premises of any handler of citrus fruits and to examine or cause to be examined any books, papers, records, or memoranda bearing on the amount of taxes payable and to secure other information directly or indirectly concerned in the enforcement hereof. Any person who is required to pay the taxes levied and imposed and who by any practice or evasion makes it difficult to enforce the provisions hereof by inspection, or any person who, after demand by the Department of Citrus or any agent or representative designated by it for that purpose, refuses to allow full inspection of the premises or any part thereof or any books, records, documents, or other instruments in any manner relating to the liability of the taxpayer for the tax imposed or hinders or in anywise delays or prevents such inspection, is guilty of a misdemeanor of the second degree, punishable as provided in s. 775.082 or s. 775.083. The box tax was challenged in 1936 and the Florida Supreme Court issued an opinion in 1937 upholding the validity of the box tax. C.V. Floyd Fruit Company v. Florida Citrus Commission, 128 Fla. 565, 175 So. 248 (1937). In 1970, the Legislature enacted the "equalization tax," codified as Section 601.155, Florida Statutes. The statute mirrored Section 601.15, Florida Statutes, but added certain processors who were mixing foreign citrus products with Florida products. The purpose of the equalization tax was to have all Florida processors of citrus products help pay for the costs of the Department, rather than have the burden fall entirely on the Florida growers subject to the box tax. Section 601.155, Florida Statutes, provides, in relevant part: The first person who exercises in this state the privilege of processing, reprocessing, blending, or mixing processed orange products or processed grapefruit products or the privilege of packaging or repackaging processed orange products or processed grapefruit products into retail or institutional size containers or, except as provided in subsection (9) or except if a tax is levied and collected on the exercise of one of the foregoing privileges, the first person having title to or possession of any processed orange product or any processed grapefruit product who exercises the privilege in this state of storing such product or removing any portion of such product from the original container in which it arrived in this state for purposes other than official inspection or direct consumption by the consumer and not for resale shall be assessed and shall pay an excise tax upon the exercise of such privilege at the rate described in subsection (2). Upon the exercise of any privilege described in subsection (1), the excise tax levied by this section shall be at the same rate per box of oranges or grapefruit utilized in the initial production of the processed citrus products so handled as that imposed, at the time of exercise of the taxable privilege, by s. 601.15 per box of oranges. In order to administer the tax, the Legislature provided the following relevant provisions in Section 601.155, Florida Statutes: Every person liable for the excise tax imposed by this section shall keep a complete and accurate record of the receipt, storage, handling, exercise of any taxable privilege under this section, and shipment of all products subject to the tax imposed by this section. Such record shall be preserved for a period of 1 year and shall be offered for inspection upon oral or written request by the Department of Citrus or its duly authorized agent. Every person liable for the excise tax imposed by this section shall, at such times and in such manner as the Department of Citrus may by rule require, file with the Department of Citrus a return, certified as true and correct, on forms to be prescribed and furnished by the Department of Citrus, stating, in addition to other information reasonably required by the Department of Citrus, the number of units of processed orange or grapefruit products subject to this section upon which any taxable privilege under this section was exercised during the period of time covered by the return. Full payment of excise taxes due for the period reported shall accompany each return. All taxes levied and imposed by this section shall be due and payable within 61 days after the first of the taxable privileges is exercised in this state. Periodic payment of the excise taxes imposed by this section by the person first exercising the taxable privileges and liable for such payment shall be permitted only in accordance with Department of Citrus rules, and the payment thereof shall be guaranteed by the posting of an appropriate certificate of deposit, approved surety bond, or cash deposit in an amount and manner as prescribed by the Department of Citrus. * * * (11) This section shall be liberally construed to effectuate the purposes set forth and as additional and supplemental powers vested in the Department of Citrus under the police power of this state. In March 2000, certain citrus businesses challenged Section 601.155(5), Florida Statutes, as being unconstitutional. At the time of the suit, Section 601.155(5), Florida Statutes, read as follows: All products subject to the taxable privileges under this section, which products are produced in whole or in part from citrus fruit grown within the United States, are exempt from the tax imposed by this section to the extent that the products are derived from oranges or grapefruit grown within the United States. In the case of products made in part from citrus fruit grown within the United States, it shall be the burden of the persons liable for the excise tax to show the Department of Citrus, through competent evidence, proof of that part which is not subject to a taxable privilege. The citrus businesses claimed the exemption in Section 601.155(5) rendered the tax unconstitutionally discriminatory, in that processors who imported juice from foreign countries to be blended with Florida juice were subject to the equalization tax, whereas processors who imported juice from places such as California, Arizona and Texas enjoyed an exemption from the tax. The case, Tampa Juice Service, Inc., et al. v. Department of Citrus, Case No. GCG-00-3718 (Consolidated), was brought in the Tenth Judicial Circuit Court, in and for Polk County. Judge Dennis P. Maloney of that court continues to preside over that case. In a partial final declaratory judgment effective March 15, 2002, Judge Maloney found Section 601.155, Florida Statutes, unconstitutional because it violated the Commerce Clause of the United States Constitution due to its discriminatory effect in favor of non-Florida United States juice. In an order dated April 15, 2002, Judge Maloney severed the exemption in Section 601.155(5), Florida Statutes, from the remainder of the statute. The court's decision necessitated the formulation of a remedy for the injured plaintiffs. While the parties were briefing the issue before the court, the Florida Legislature met and passed Chapter 2002-26, Laws of Florida, which amended Section 601.155, Florida Statutes, to read as follows: Products made in whole or in part from citrus fruit on which an equivalent tax is levied pursuant to s. 601.15 are exempt from the tax imposed by this section. In the case of products made in part from citrus fruit exempt from the tax imposed by this section, it shall be the burden of the persons liable for the excise tax to show the Department of Citrus, through competent evidence, proof of that part which is not subject to a taxable privilege. Chapter 2002-26, Laws of Florida, was given an effective date of July 1, 2002. By order dated August 8, 2002, Judge Maloney set forth his decision as to the remedy for the plaintiffs injured by the discriminatory effect of Section 601.155(5), Florida Statutes. Judge Maloney expressly relied on the rationale set forth in Division of Alcoholic Beverages and Tobacco v. McKesson Corporation, 574 So. 2d 114 (Fla. 1991)("McKesson II"). In its initial McKesson decision, Division of Alcoholic Beverages and Tobacco v. McKesson Corporation, 524 So. 2d 1000 (Fla. 1988), the Florida Supreme Court affirmed a summary judgment ruling that Florida's alcoholic beverage tax scheme, which gave tax preferences and exemptions to certain alcoholic beverages made from Florida crops, unconstitutionally discriminated against interstate commerce. The Florida Supreme Court also affirmed that portion of the summary judgment giving the ruling prospective effect, thus denying the plaintiff a refund of taxes paid pursuant to the unconstitutional scheme. The decision was appealed to the United States Supreme Court. In McKesson Corporation v. Division of Alcoholic Beverages and Tobacco, 496 U.S. 18 (1990), the United States Supreme Court reversed the Florida Supreme Court's decision as to the prospective effect of its decision. The United States Supreme Court held that: The question before us is whether prospective relief, by itself, exhausts the requirements of federal law. The answer is no: If a State places a taxpayer under duress promptly to pay a tax when due and relegates him to a postpayment refund action in which he can challenge the tax's legality, the Due Process Clause of the Fourteenth Amendment obligates the State to provide meaningful backward-looking relief to rectify any unconstitutional deprivation. 496 U.S. at 31 (footnotes omitted). The United States Supreme Court set forth the following options by which the state could meet its obligation to provide "meaningful backward-looking relief:" [T]he State may cure the invalidity of the Liquor Tax by refunding to petitioner the difference between the tax it paid and the tax it would have been assessed were it extended the same rate reductions that its competitors actually received. . . . Alternatively, to the extent consistent with other constitutional restrictions, the State may assess and collect back taxes from petitioner's competitors who benefited from the rate reductions during the contested tax period, calibrating the retroactive assessment to create in hindsight a nondiscriminatory scheme. . . . Finally, a combination of a partial refund to petitioner and a partial retroactive assessment of tax increases on favored competitors, so long as the resultant tax actually assessed during the contested tax period reflects a scheme that does not discriminate against interstate commerce, would render petitioner's resultant deprivation lawful and therefore satisfy the Due Process Clause's requirement of a fully adequate postdeprivation procedure. 496 U.S. at 40-41 (citations and footnotes omitted). The United States Supreme Court expressly provided that the state has the option of choosing the form of relief it will grant. In keeping with the United States Supreme Court opinion, the Florida Supreme Court granted the Division of Alcoholic Beverages and Tobacco (the "Division") leave to advise the Court as to the form of relief the state wished to provide. The Division proposed to retroactively assess and collect taxes from those of McKesson's competitors who had benefited from the discriminatory tax scheme. McKesson contended that a refund of the taxes it had paid was the only clear and certain remedy, because retroactive taxation of its competitors would violate their due process rights. McKesson II, 574 So. 2d at 115. The Florida Supreme Court remanded the case to the trial court for further proceedings on McKesson's refund claim, with the following instructions: While McKesson may not necessarily be entitled to a refund, it is entitled to a "clear and certain remedy," as outlined in the Supreme Court's opinion. Because nonparties, such as amici, will be directly affected by the retroactive tax scheme proposed by the state, all affected by the proposed emergency rule must be given notice and an opportunity to intervene in this action. Therefore, on remand, the trial court not only must determine whether the state's proposal meets "the minimum federal requirements" outlined in the Supreme Court's opinion, it also must determine whether the proposal comports with federal and state protections afforded those against whom the proposed tax will be assessed. We emphasize that the state has the option of choosing the manner in which it will reformulate the alcoholic beverage tax during the contested period so that the resultant tax actually assessed during that period reflects a scheme which does not discriminate against interstate commerce. Therefore, if the trial court should rule that the state's proposal to retroactively assess and collect taxes from McKesson's competitors does not meet constitutional muster and such ruling is upheld on appeal, the state may offer an alternative remedy for the trial court's review. However, any such proposal likewise must satisfy the standards set forth by the Supreme Court as well as be consistent with other constitutional restrictions. 574 So. 2d at 116. In the instant case, Judge Maloney assessed the options prescribed by the series of McKesson cases and concluded that the only fair remedy was to assess and collect back assessments from those who benefited from the unconstitutional equalization tax exemption. His August 8, 2002 order directed the Department to "take appropriate steps, consistent with existing law, to assess and collect the Equalization tax from those entities which [benefited] from the unconstitutional exemption." On September 18, 2002, the Department promulgated the Emergency Rules at issue in DOAH Case No. 02-3648RE. The Emergency Rules were filed with the Department of State on September 24, 2002, and took effect on that date. They were published in the October 4, 2002 issue of the Florida Administrative Weekly (vol. 28, no. 40, pp. 4271-4272). The full text of the Emergency Rules is: EQUALIZATION TAX ON NON-FLORIDA UNITED STATES JUICE 20ER02-1 Intent. The Court in Tampa Juice Service, et al v. Florida Department of Citrus in Consolidated Case Number GCG-003718 (Circuit Court in and for Polk County, Florida) severed the exemption contained in Section 601.155(5), Florida Statutes, that provided an exemption for persons who exercised one of the enumerated Equalization Tax privileges on non-Florida, United States juice. The Court had previously determined that the stricken provisions operated in a manner that violated the Commerce Clause of the United States Constitution. On August 8, 2002, the Court ordered that the Florida Department of Citrus "take appropriate steps, consistent with existing law, to assess and collect the Equalization tax from those entities which [benefited] from the unconstitutional exemption." It is the Florida Department of Citrus' intent by promulgating the following remedial Rule 20ER02-01 and Chapter 20-15, F.A.C., to implement a non-discriminatory tax scheme, which does not impose a significant tax burden that is so harsh and oppressive as to transgress constitutional limitations. These rules shall be applicable to those previously favored persons who received favorable tax treatment under the statutory sections cited above. Specific Authority 601.02, 601.10, 601.15, 601.155 FS. Law Implemented 601.02, 601.10, 601.15, 601.155 FS. History-- New 9-24-02. 20ER02-2 Definitions. "Previously favored persons" shall be defined as any person who exercised an enumerated Equalization Tax privilege as defined by Section 601.155, Florida Statutes, but who was exempt from payment of the Equalization Tax due to the exemption for non-Florida, United States juice set forth in the statutory provision, which was ultimately determined to be unconstitutional and severed from Section 601.155(5), Florida Statutes. The "tax period" during which the severed provisions of Section 601.155(5), Florida Statutes, were in effect shall be defined as commencing on October 6, 1997, and ending on March 14, 2002. "Tax liability" shall be defined as the total amount of taxes due to the Florida Department of Citrus during the "tax period," at the following rates per box for each respective fiscal year: Fiscal Year Processed Rate Orange Grapefruit 1997-1998 .175 .30 1998-1999 .17 .30 1999-2000 .18 .325 2000-2001 .175 .30 2001-2002 .165 .18 Specific Authority 601.02, 601.10, 601.15, 601.155 FS. Law Implemented 601.02, 601.10, 601.15, 601.155 FS. History-- New 9-24-02. 20ER02-3 Collection. The Florida Department of Citrus shall calculate the tax liability for each person or entity that exercised an enumerated Equalization Tax privilege outlined in section 601.155, Florida Statutes, upon non-Florida, United States juice based upon inspection records maintained by Florida Department of Agriculture and Consumer Services and the United States Department of Agriculture. Additionally, the Florida Department of Citrus will provide notice of the calculation to the previously favored persons by certified mail. The notice of the calculation shall contain a statement including the following categories: (a) Tax liability; (b) Gallons; Brix; Type of product; (e) Total solids; (f) Conversion rate; (g) Total boxes; (h) Delineation of non-Florida, United States juice. (2)(a) Contained within the notice will be the various legal options available to those who previously enjoyed the exemption, set forth in proposed Rule 20- 15.003(2), F.A.C. (b) Persons who previously enjoyed the exemption may petition to intervene in the case of Tampa Juice Service, Inc., et al, Consolidated Case No. GCG-003718, presently pending before the Circuit Court of the Tenth Judicial Circuit in and for Polk County. A hearing to consider arguments made by any intervenor, the Plaintiffs and the Florida Department of Citrus is currently scheduled to be heard by the Honorable Dennis Maloney on November 12, 2002, in Bartow, Florida. (3) The Florida Department of Citrus will not oppose the timely intervention of persons who previously enjoyed the subject exemption that wish to present a claim to the Court in the Tampa Juice Service, Inc., et al v. Florida Department of Citrus. However, the Florida Department of Citrus does not waive any argument regarding the validity of the calculation of the tax liability or that imposition of this tax is constitutional. Specific Authority 601.02, 601.10, 601.15, 601.155 FS. Law Implemented 601.02, 601.10, 601.15, 601.155 FS. History-- New 9-24-02. The Department's "Specific Reasons for Finding an Immediate Danger to the Public Health, Safety or Welfare" were set forth as follows: On March 18, 2002, the Court in the Tenth Judicial Circuit, State of Florida, in and for Polk County, entered a Partial Final Declaratory Judgment in the case of Tampa Juice Service, Inc., et al v. Florida Department of Citrus, Consolidated Case Number GCG-003718. In this order the Court ruled that the exemption in Section 601.155, F.S., for non-Florida, United States juice was unconstitutional. On or about April 15, 2002, the Court severed the exemption for non-Florida, United States juice from section 601.155(5), F.S. On August 8, 2002, the Court held that the Florida Department of Citrus was required to cure the invalidity of the equalization taxing scheme. To cure this invalidity, the Florida Department of Citrus promulgates Rule 20ER02-1, F.A.C., which will serve to implement the Court's order for a nondiscriminatory tax scheme and provide due process protections for the previously favored taxpayers. These rules are being promulgated on an emergency basis to meet time constraints associated with litigation and to establish guidelines which protect the public's and state's interest for the orderly and efficient collection and payment of the tax liability. Without these guidelines, the welfare of the citizens and the state would be adversely affected because of the immediate and widespread impact of the failure of previously favored persons to properly remit the tax. The Department's "Reason for Concluding that the Procedure is Fair Under the Circumstances" was set forth as follows: Promulgation of these guidelines using the emergency rule procedures is the only available mechanism which adequately protects the public interests under the circumstances which require collection and payment of the tax liability. This procedure is fair to the public and to the previously favored persons. It permits promulgation of the necessary guidelines within a time frame which allows the industry to be adequately informed of their duties, responsibilities and rights with respect to the tax liability. In the November 15, 2002 issue of the Florida Administrative Weekly (vol. 28, no. 46, pp. 4996-4998), the Department published the Proposed Rules at issue in DOAH Case No. 02-4607RP. The text of Proposed Rule 20-15.001, Florida Administrative Code, is identical to that of Emergency Rule 20ER02-1, set forth above. The text of Proposed Rule 20-15.002, Florida Administrative Code, is identical to that of Emergency Rule 20ER02-2, set forth above. The text of Proposed Rule 20- 15.003(1)&(3), Florida Administrative Code, is identical to that of Emergency Rule 20ER02-3(1)&(3), set forth above. The text of Proposed Rule 15.003(2), Florida Administrative Code, varies from the text of Emergency Rule 20ER02-3(2), and reads as follows: 20-15.003 Collection. Subsequent to adoption of this rule, the Florida Department of Citrus will provide to the previously favored persons by certified mail a Notice of Tax Liability which shall contain a demand for payment consistent with the above-referenced itemized statement. The Department will deem late payment of Equalization Taxes owed by previously favored persons to constitute good cause, and shall waive the 5 percent penalty authorized by Section 601.155(10), F.S., as compliance with either of the following is established by Department [sic]: Lump sum payment of the tax liability remitted with the filing of Department of Citrus Form 4R (incorporated by reference in Rule 20-100.004, F.A.C.) for the relevant years and then-applicable tax rate(s) per subsection 20-15.002(3), F.A.C., within 61 days of receiving Notice of Tax Liability; or Equal installment payments remitted with the filing of Department of Citrus Form 4R (incorporated by reference in Rule 20-100.004, F.A.C.) for the relevant years and then-applicable tax rate(s) per subsection subsection [sic] 20-15.002(3), F.A.C., over a 60-month period, the first payment being due within 61 days of receiving Notice of Tax Liability pursuant to subsection 20-15.003(2), F.A.C.; or The Good Cause provisions of 601.155(10), F.S., shall not apply to persons who do not comply with paragraph 20- 15.003(2)(a), F.A.C., or paragraph 20- 15.003(2)(b), F.A.C. Failure to pay the taxes or penalties due under 601.155, F.S. and Chapter 20-15, F.A.C., shall constitute grounds for revocation or suspension of a previously favored person's citrus fruit dealer's license pursuant to 601.56(4), F.S., 601.64(6), F.S., 601.64(7), F.S., and/or 601.67(1), F.S. Peace River is a Florida corporation and licensed citrus fruit dealer regulated by Chapter 601, Florida Statutes. As such, Peace River is subject to the rules of the Department. Peace River buys, sells, and manufactures bulk citrus juices. By correspondence dated October 2, 2002, Peace River was notified by the Department that Peace River would be liable for payment of $86,242.41 in Equalization taxes for the tax period of October 6, 1997 through March 14, 2002 (the "tax period"), pursuant to the terms of the Emergency Rules. Fresh Juice is a Florida corporation and licensed citrus fruit dealer regulated by Chapter 601, Florida Statutes. As such, Fresh Juice is subject to the rules of the Department. Fresh Juice buys, sells, and manufactures citrus juices. By correspondence dated October 2, 2002, Fresh Juice was notified by the Department that Fresh Juice would be liable for payment of $45,052.19 in Equalization taxes for the tax period, pursuant to the terms of the Emergency Rules. Sun Orchard is a Florida corporation and licensed citrus fruit dealer regulated by Chapter 601, Florida Statutes. As such, Sun Orchard is subject to the rules of the Department. Sun Orchard buys, sells, and manufactures citrus juices. By correspondence dated October 2, 2002, Sun Orchard was notified by the Department that Sun Orchard would be liable for payment of $45,052.19 in Equalization taxes for the tax period, pursuant to the terms of the Emergency Rules. During the tax period, Peace River, Fresh Juice, and Sun Orchard imported, stored and blended non-Florida, United States citrus juices. Neither Peace River, Fresh Juice, nor Sun Orchard is a party to the lawsuit styled Tampa Juice Service, Inc., et al. v. Department of Citrus, Case No. GCG-00-3718 (Consolidated). Peace River, Fresh Juice, and Sun Orchard contend that they relied on the tax exemption in making business decisions and had no notice that their activities regarding non-Florida, United States juice would be taxable upon the court's striking of the exemption in Section 601.155(5), Florida Statutes. Accordingly, Peace River, Fresh Juice, and Sun Orchard contend that, during the tax period, they had no opportunity to conform their conduct to avoid the tax or position themselves to claim a refund allowed by Section 601.155, Florida Statutes. Peace River, Fresh Juice, and Sun Orchard contend that they have not been obligated by Chapter 601, Florida Statutes, to keep specific records on their use of non-Florida United States citrus juices for the tax period, but admit they keep business records required by law, which may include some business records related to non-Florida United States juice during the tax period. Peace River, Fresh Juice, and Sun Orchard shipped products made with non-Florida, United States juice during the tax period without payment of the Equalization Tax.
The Issue Whether Respondent, Ridge Island Groves, Inc., is liable to Petitioner, Orange Bend Harvesting, Inc., on a contract to purchase citrus fruit, and, if so, the amount owed.
Findings Of Fact Petitioner, Orange Bend Harvesting, Inc. (Petitioner or Orange Bend), is a Florida for-profit corporation located in Leesburg, Florida, engaged in the business of citrus harvesting and management of citrus groves. Joyce D. Caldwell is the president and registered agent of Orange Bend. Ruben Caldwell and Cornelius Caldwell are Ms. Caldwell's brothers and co-owners of the business. Ruben Caldwell is Orange Bend's harvesting manager. Respondent, Ridge Island Groves, Inc. (Respondent or Ridge Island), is a Florida for-profit corporation headquartered in Haines City, Florida, engaged in the business of buying and packing fresh fruit for retail sale and gift-fruit shipping. Ridge Island is known in the industry as a "packing house." Although Ridge Island produces some fruit juice for sample and sale at the packing house, Ridge Island is not a juice processing plant. Respondent, Old Surety Insurance Company, holds the bond for Ridge Island, which has been assigned to the Department as security pursuant to section 601.61, Florida Statutes (2014). Orange Bend and Ridge Island first transacted business in 2010, and Ridge Island purchased fruit from Orange Bend "off and on" from 2010 through 2014. On October 17, 2014, Respondent entered into a contract with Petitioner to purchase fruit from five different citrus groves. The "Standard Fruit Contract" provided that Respondent would purchase from Petitioner the "entire crop of citrus fruit blooming in the year 2014 and merchantable at the time of picking on the grove blocks listed below . . . on the following terms." More specifically, Respondent was entitled to purchase the following described citrus from Petitioner: Variety Block Approximate number of boxes Price per unit Moving Date Red Navels Ronco 300+/- $15 on tree 12/31/14 Red Navels Sweet Blossom 1500+/- $20 on tree 12/31/14 Navels Powers 400+/- $15 on tree 12/31/14 Navels YMCA 400+/- $15 on tree 12/31/15 Satsuma Weatherspoon 400+/- $12 on tree 01/31/15 Prior to entering into the contract, Mr. Ritch visited the named grove blocks with Ruben Caldwell, inspected the blocks, and estimated the number of boxes to be picked from each block. The two men agreed on the price for each type of fruit. Ridge Island paid Orange Bend $2,500 in deposit on the contract. Pursuant to the contract, Orange Bend was responsible to "pick and haul" the fruit only from the Sweet Blossom grove. Respondent was responsible to pick and haul from the remaining groves. In the industry, the "on tree" price for fruit does not include the harvester's cost to pick and haul. If the harvester is to be paid his or her pick-and-haul costs, the pick-and-haul price is separate from the "on tree" price. Orange Bend and Ridge Island agreed on a pick-and-haul price of $3.25 per box. Orange Bend picked the Sweet Blossom block on December 8, 2014, yielding 225 boxes of red navels, which Orange Bend delivered to Ridge Island. Orange Bend picked the Sweet Blossom block again on December 9, 2014, and delivered another 217 boxes to Ridge Island. These first two deliveries "packed out" at nearly 100 percent, meaning there were few eliminations from the load. Citrus intended for the fresh market must be visually appealing, as well as free from insects, disease, and other damage. Fruit that is discolored, diseased, or damaged is eliminated from the packed fruit because it is unsuitable for the fresh fruit market. Ridge Island paid Orange Bend the full contract price per box for the first two deliveries of red navels from the Sweet Blossom block. Orange Bend picked the Sweet Blossom block again on December 26, 2014, yielding 447 boxes of red navels, which were delivered to Ridge Island. This delivery packed out at around 50 percent. Mr. Ritch sold the eliminations to a juice processer in Peace River, Florida.1/ Ridge Island paid Orange Bend the pick-and-haul price of $3.25 per box for eliminations from Orange Bend's deliveries of red navels from the Sweet Blossom block. Decisions regarding eliminations are made by the packing house. Generally, a harvester is unaware of the packing rate of fruit delivered. Ruben Caldwell contacted Mr. Ritch via text message on January 1, 2015, and asked whether Ridge Island was ready for another shipment of red navels from Sweet Blossom. Mr. Caldwell indicated the growers were anxious to get the fruit off the tree. Mr. Ritch responded, as follows: The last load of red navels packed out less than 50%. I tried degreening them but the greening fruit would not color. You can bring me another load but I just want you to know that the greening fruit will only return the cost of the pick and haul. Orange Bend picked the Sweet Blossom block several times between January 5 and 14, 2015, delivering an additional 1,295 boxes of fruit to Ridge Island. Ridge Island paid Orange Bend the contract price for 679 boxes. Orange Bend claims it is owed $16,820 from Ridge Island under the contract for red navels from the Sweet Blossom block. Ridge Island picked the YMCA block on January 15, 2015. The pick yielded 216 boxes of navels, of which 169 were eliminations. Ridge Island paid Orange Bend $705 for 47 boxes at $15 per box. Ridge Island picked the Powers block on November 15, 2014, and January 15, 2015. The picks yielded 284 boxes of navels, of which 119 were eliminations. Ridge Island paid Orange Bend $4,260 for 165 boxes at $15 per box. Ridge Island picked the Ronco block in February 2015.2/ Ridge Island picked 91 boxes, of which 62 boxes were eliminations, and paid the block owner, rather than Orange Bend, for 29 boxes at $15 per box. No evidence was introduced regarding whether the Weatherspoon block was picked by either party or whether Ridge Island paid any amount to Orange Bend under the contract for satsumas from the Weatherspoon block. Orange Bend maintains Ridge Island owes $27,540 for boxes of fruit picked by, or otherwise delivered to, Ridge Island, pursuant to the contract for fruit from the YMCA, Powers, and Ronco blocks. Orange Bend contends that the "on the tree" price quoted in the contract obligated Ridge Island to purchase every piece of fruit on the trees in the specified blocks and to assume the cost of eliminations. Ridge Island contends it was obligated to purchase only the fruit which was "merchantable at the time of picking," pursuant to the contract, and that the greening fruit was not merchantable. Petitioner offered the testimony of Jerry Mincey, owner of Southern Citrus Growers, who has operated as a harvester, fruit buyer, grove manager, and intermediary in the Florida citrus industry at various times throughout the past 50 years. Mr. Mincey testified that when a packing house buys fruit "on the tree," the packing house assumes all costs, including eliminations, as well as pick and haul. However, Mr. Mincey also testified that, while a buyer may make an offer to buy a crop "in bulk" (i.e., $x for the entire crop), the industry standard is "on the tree." The undersigned fails to see the difference between "in bulk" and "on the tree" under Petitioner's interpretation. If "on the tree" means the buyer is purchasing every piece of fruit produced on the trees in the specified block (blocks are just sections of groves), as Petitioner contends, the "in bulk" option would be rendered meaningless. Further, Petitioner's interpretation is contrary to the plain language of the contract, which entitles Respondent to the "entire crop of citrus fruit blooming in the year 2014 and merchantable at the time of picking." If Respondent was obligated to purchase all fruit on the trees in the named blocks, the phrase "and merchantable" would be meaningless. Having weighed all the testimony and evidence introduced, the undersigned finds the "on the tree" price in the subject contract means the buyer assumes the pick-and-haul costs. In the case at hand, Ridge Island purchased fruit in the Ronco, Powers, and YMCA blocks, absorbing its own costs to pick and haul the fruit. Ridge Island paid Orange Bend for Orange Bend's pick and haul costs for deliveries of fruit from the Sweet Blossom block. Pursuant to the contract, Ridge Island contracted for merchantable fruit. The contract does not define the term "merchantable." Citrus greening, or greening, is by all accounts a devastating disease caused by bacteria-infected insects. Trees affected with greening produce hard, knotty, fruit, which never fully colors (i.e., remains green on the bottom, or bottom half, of the fruit). Greening fruit is not fit for the purpose of fresh fruit packaging and gift shipping. Petitioner challenged Respondent's contention that fruit from the Sweet Blossom block was infected with greening. Petitioner presented the testimony of Mr. Mincey on this point. Mr. Mincey testified that he inspected the Sweet Blossom block in early October and made an offer to buy the navels for $18 per box. Mr. Mincey was back in the block in early November and testified that, although the tangerines in that grove were infected with greening, he saw no problem with the navels, which were of good size and on which color was beginning to break. On cross-examination however, Mr. Mincey admitted that, upon inspection, the red navel trees in the Sweet Blossom block did show some signs of greening. Further, Mr. Mincey testified that greening is a devastating disease that has infected almost every tree in Florida. Greening does not manifest itself early in the ripening process. While the fruit may color at the top, it usually does not color all the way to the bottom. Thus, a color break on the fruit in early November is not proof that the trees were not affected by greening. Despite the fact that some of the blocks were not picked by the moving date specified in the contract, neither party objected. In fact, Mr. Ritch testified that the fruit was late maturing throughout the region. Neither party ever terminated the subject contract.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Agriculture and Consumer Services enter a final order approving the claim of Orange Bend Harvesting, Inc., against Ridge Island Groves, Inc., in the amount of $435. DONE AND ENTERED this 20th day of August, 2015, in Tallahassee, Leon County, Florida. S SUZANNE VAN WYK Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 20th day of August, 2015.
The Issue The issue in this case is whether Respondent Clark's Country Farmers Market, Inc. owes Petitioner a sum of money for shipments of citrus fruit.
Findings Of Fact The evidence presented at final hearing established the facts that follow. The Parties and Their Problem Spyke's Grove and Clark's are "citrus fruit dealers" operating within the Department's regulatory jurisdiction. As a wholesale shipper, Spyke's Grove packages and arranges for delivery of citrus products pursuant to purchase orders that retail sellers such as Clark's submit. The packages typically are labeled with the retail seller's name, and thus the retail buyer (and the recipient, if the citrus is purchased as a gift) usually will not be aware of Spyke's Grove's involvement. The instant case involves a series of orders that Clark's placed with Spyke's Grove between October and December 1999 for packages of gift fruit. Under a number of informal, largely unwritten contracts, Spyke's Grove agreed, each time it received an order from Clark's, to ship a gift fruit box or basket to the donee designated by Clark's' retail customer, for which fruit shipment Clark's agreed to pay Spyke's Grove. Spyke's Grove alleges that Clark's failed to pay in full for all of the gift fruit packages that Clark's ordered and Spyke's Grove duly shipped. Clark's contends (though not precisely in these terms) that Spyke's Grove materially breached the contracts, thereby discharging Clark's from further performance thereunder. The Transactions From mid-October 1999 until around December 12, 1999, Clark's faxed or e-mailed to Spyke's Grove approximately 350 individual orders for gift fruit packages. Among other information, each order consisted of a shipping label that identified the product (e.g. the type of gift box or basket), the intended recipient, and the destination. Spyke's Grove manifested its intent to fill these orders by faxing statements of acknowledgment to Clark's, by telephoning Clark's, or both. Although the many contracts that arose from these transactions were thus documented, the writings left much unsaid. For example, the parties did not explicitly agree in writing that Spyke's Grove would deliver the subject gift baskets to the donees before Christmas, nor did they make any express oral agreements to this effect.1 Further, the parties did not specifically agree that Spyke's Grove would be obligated to deliver the gift fruit into the hands of the donees and bear the risk of loss until such tender of delivery. Rather, the contracts between Spyke's Grove and Clark's were ordinary shipment contracts that required Spyke's Grove to put the goods into the possession of carriers (such as the U.S. Postal Service or United Parcel Service) who in due course would deliver the packages to the donees. For many weeks, until early December 1999, Clark's placed orders, and Spyke's Grove filled them, under the arrangement just described. The relationship was not completely trouble-free, for the parties had some problems with duplicate orders. Most, if not all, of these difficulties stemmed from the implementation of a computerized ordering system which allowed Clark's to "export" orders directly to Spyke's Grove's electronic database. The parties recognized at the time that errors were occurring, and they attempted contemporaneously to identify and purge unintended duplicates. Pursuant to the course of dealing between these parties, Spyke's Grove filled orders that were not affirmatively identified as errors prior to the scheduled shipment date. The Fire On the night of Sunday, December 12, 1999, a devastating fire at Spyke's Grove's premises caused substantial damage, temporarily disrupting its citrus packing and shipping operations at the peak of the holiday season. Working through and around the loss, Spyke's Grove soon recovered sufficiently to reopen for business. By around noon on Tuesday, December 14, 1999, its telephone service had been restored, and activities relating to shipping resumed on Friday, December 17, 1999. The Aftermath Meantime, Clark's contends, customers had begun calling Clark's on December 10, 1999, to complain that gift fruit packages were not being received as promised. None of the customers testified at hearing, however, and therefore no competent, non-hearsay evidence establishes the contents of their alleged out-of-court statements. On December 14, 1999, following several unsuccessful attempts to communicate with Spyke's Grove shortly after the fire (about which Clark's remained unaware), Denise Clark, acting on behalf of Clark's, reached Robert Spiece, a representative of Spyke's Grove, on his cell phone. At hearing, Ms. Clark and Mr. Spiece gave conflicting accounts as to the substance of their December 14, 1999, telephone conversation. Neither disputed, however, that during this conversation Ms. Clark and Mr. Spiece agreed, at Ms. Clark's request, that all orders of Clark's not yet shipped by Spyke's Grove would be canceled, effective immediately, as a result of the fire. Although Ms. Clark claimed that Mr. Spiece further informed her that Spyke's Grove could not identify which orders had been shipped, the factfinder does not believe that Mr. Spiece made such a sweeping negative statement. Rather, as Mr. Spiece explained at hearing, Ms. Clark probably was told that information regarding the filled orders would not be available that day. Without waiting for further information from Spyke's Grove, Clark's began calling its retail customers to ascertain whether they had received packages that were supposed to have been shipped by Spyke's Grove. Employees of Clark's who had participated in this process——which took four to five days—— testified at hearing about conversations between themselves and various customers. As uncorroborated hearsay, however, the out- of-court statements attributed to these customers were not competent substantial evidence upon which a relevant finding of fact, e.g. that any particular customer or customers had not received their gift fruit, could be based. Moreover, this hearsay evidence, even if competent, would still have been too anecdotal to establish persuasively any widespread failure on the part of the carriers to deliver the packages shipped by Spyke's Grove. On December 15, 1999, Spyke's Grove prepared three draft invoices for the gift fruit packages that Clark's had ordered and which Spyke's Grove had shipped before December 12, 1999. Numbered 1999113001, 1999121101, and 1999121201, the invoices sought payment of $688.72, $2,415.48, and $298.66, respectively. On the first page of Invoice #1999121201, Barbara Spiece, the President of Spyke's Grove, wrote: Some of these were lost in the fire. "A" day left in the morning. "Springfield" was on the floor to go out that night. I realize there are many duplicates in these shipped reports. We tried to watch for them but with different order numbers it was very difficult. Just cross them out [and] you will not be charged for them. I apologize for all of the problems we have had this season [illegible] wish you luck. These bills were faxed to, and received by, Clark's on December 16, 1999. Clark's did not pay the invoices, or dispute them, or cross out the unintended duplicate orders (as it had been invited to do) to effect a reduction in the outstanding balance. Instead, Clark's ignored Spyke's Grove's requests for payment. Not only that, in disregard of its existing contractual obligations and with no advance notice to Spyke's Grove, Clark's proceeded on its own to fill all of the orders that it had placed with Spyke's Grove before December 12, 1999——including those orders that Spyke's Grove, through its draft invoices, claimed to have shipped. Even after the fact, Clark's failed to inform Spyke's Grove that it had, in effect, repudiated its contractual promises to pay Spyke's Grove for the gift fruit packages already shipped as of December 12, 1999 (i.e. the orders not canceled on December 14, 1999). The Inevitable Dispute Having heard nothing from Clark's in response to its December 16, 1999, fax, Spyke's Grove sent its invoices out again, in final form, on January 25, 2000.2 This time, Ms. Spiece did not inscribe any instructions to cross out duplicates for a discount. Numbered 11063001 ($688.72), 11063002 ($2,449.14), and 11063003 ($195.52), these bills totaled $3,333.38. Each of these invoices contained the following boilerplate "terms": Net 14 days prompt payment is expected and appreciated. A 1 ½% monthly service charge (A.P.R. 18% per annum) may be charged on all past due accounts. Customer agrees to pay all costs of collection, including attorneys [sic] fees and court costs, should collection efforts ever become necessary. Clark's did not remit payment or otherwise respond to Spyke's Grove's statements. Accordingly, on June 20, 2000, Spyke's Grove sent a letter to the Department requesting assistance. Clark's was provided a copy of this letter. Shortly thereafter, Spyke's Grove filed a Complaint with the Department, initiating the instant proceeding. Ultimate Factual Determinations Clark's refusal to pay for the goods ordered from and shipped by Spyke's Grove constituted a breach of the contracts between the parties. Spyke's Grove did not materially breach the agreements. Further, Clark's did not object, within a reasonable period of time, to the statements of account that Spyke's Grove rendered preliminarily on December 16, 1999, and finally on January 25, 2000. Accordingly, these invoices amount to an account stated concerning the transactions between the parties. Clark's failed to overcome the presumption of correctness that attaches to an account stated, either by proving fraud, mistake, or error. Spyke's Grove has suffered an injury as a result of Clark's' breach. Spyke's Grove's damages consist of the principal amount of the debt together with pre-award interest at the statutory rate. Accordingly, Spyke's Grove is entitled to recover the following amounts from Clark's: Principal Due Date Statutory Interest $3,333.38 2/08/99 $ 298.66 (2/08/00 - 12/31/00) $ 335.56 (1/01/01 - 11/30/01) $3,333.38 $ 634.22 Interest will continue to accrue on the outstanding balance of $3,333.38 in the amount of $1.00 per day from December 1, 2001, until the date of the final order.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department enter a final order awarding Spyke's Grove the sum of $3,333.38, together with pre- award interest in the amount of $634.22 (through November 30, 2001), plus additional interest from December 1, 2001, until the date of the final order, which will accrue in the amount of $1.00 per day. DONE AND ENTERED this 29th day of November, 2001, in Tallahassee, Leon County, Florida. JOHN G. VAN LANINGHAM Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 29th day of November, 2001.
The Issue Is the general partnership, Schiller Investments, a party to the fruit purchase agreement that is the subject of this proceeding with standing to bring a claim for payment? Does the failure of Schiller Investments to register "Shell Creek Groves" as a fictitious name require abating this proceeding?1/ Does the election of remedies provision of section 601.65, Florida Statutes (2011)2/ prohibit the Florida Department of Agriculture and Consumer Services and the Division of Administrative Hearings from taking jurisdiction of this matter? Is Gulf Citrus Marketing, LLC, liable to Schiller Investments in the amount of $259,817.41?
Findings Of Fact Schiller Investments is a general partnership formed by Friedrich Schiller and his wife, Barbara Ann Schiller, in Kansas on February 1, 2005. In the transactions involved in this matter, Mr. Schiller acted on behalf of Schiller Investments with full authority as a general partner. Although Schiller Investments has sometimes used the name Shell Creek Groves in business transactions, Schiller Investments has never registered Shell Creek Groves as a fictitious name in Florida. Schiller Investments and Mr. Schiller also used the name Shell Creek Citrus interchangeably with Shell Creek Groves. They also did not register Shell Creek Citrus as a fictitious name. Respondent, Gulf Citrus Marketing, LLC (Gulf Citrus), is a licensed fruit dealer in Florida. George Winslow is the managing member of Gulf Citrus and acted on behalf of Gulf Citrus in all of the communications and transactions with Mr. Schiller and Schiller Investments involved in this matter. On September 23, 2009, Schiller Investments and Gulf Citrus entered into Gulf Citrus Marketing Fruit Purchase Agreement No. 936 (Purchase Agreement). Mr. Winslow drafted the agreement with the assistance of a lawyer. Mr. Winslow has a college degree in agronomy. In contrast, Mr. Schiller's formal education ended with completion of the eighth grade. Mr. Schiller executed the Purchase Agreement on behalf of Schiller Investments. Mr. Winslow executed it on behalf of Gulf Citrus. The signature blocks in the document, drafted by Mr. Winslow and Gulf Citrus's lawyer, do not state the position either man held in the entities on whose behalf they signed, as shown below. But it is plain they are signing on behalf of an entity not as individuals. SELLER: SCHILLER INVESTMENTS dba Shell Creek Groves By: Name: Friedrich Schiller BUYER: GULF CITRUS MARKETING, LLC By: Name: George Winslow The Purchase Agreement was a contract between Gulf Citrus and Schiller Investments. The Purchase Agreement provided for Gulf Citrus to purchase all oranges grown in the Prairie Grove and Shell Creek Grove for four consecutive citrus seasons, beginning with the 2009-2010 season and ending with the 2012-2013 season. The Purchase Agreement provides specific descriptions by survey coordinates of the Charlotte County locations of the groves. Shell Creek Grove is much larger than Prairie Grove. It produced the vast majority of the oranges. From 2009 to present day, Mr. Schiller has owned Shell Creek Grove. Mr. Winslow always knew that Mr. Schiller owned Shell Creek Grove. Mr. Winslow brokered the foreclosure sale of the grove to Mr. Schiller from Metropolitan Life. Before then, Mr. Winslow was one of three co-owners of Shell Creek Grove. From May 17, 2002, until January 25, 2012, Prairie Groves, LLC, owned the Prairie Grove. Throughout the course of their various dealings, Mr. Winslow was aware that Mr. Schiller controlled both groves and business dealings involving them. He regularly communicated with Mr. Schiller about the groves and dealt exclusively with him on matters involving the groves. The Purchase Agreement provides that in the event of the sale of the groves, Gulf Citrus has the right, but not the obligation, to terminate the agreement. It contains other clauses that give Gulf Citrus the right to terminate the contract in certain circumstances. The Purchase Agreement also gives Gulf Citrus the right to assign or transfer the Purchase Agreement to any third party or successor in interest. Schiller Investments timely delivered the oranges from both groves for the 2010-2011 season, as provided in the Purchase Agreement. The oranges satisfied all of the quality standards and other requirements of the Purchase Agreement. Gulf Citrus accepted the oranges. It in turn sold the oranges and received payment for them. Gulf Citrus has not paid $259,817.41 owed for the oranges. During this time, Mr. Winslow experienced financial difficulties. Mr. Schiller allowed Mr. Winslow time to cure his problems and pay the debt. In September and October, 2011, Mr. Schiller communicated regularly with Mr. Winslow and his staff about the unpaid amount and Gulf Citrus's plan to pay it. Mr. Winslow promised payment several times and explained various plans to raise the money, including re-financing real estate. But he never delivered. One scheme Mr. Winslow proposed was for Schiller Investments to enter into a new fruit purchase agreement with a New Jersey company named Johanna Foods. Mr. Schiller chose not to do this. He had reasonable concerns. They were the fact that Johanna Foods was not a licensed Florida Fruit dealer4/, that he was unfamiliar with the company, and that the proposal included an unexplained payment described as a "bonus" that was to make up for the money Gulf Citrus had not paid. Mr. Winslow did not propose to assign the agreement to Johanna Foods. And Gulf Citrus never assigned the agreement.5/ Mr. Winslow acknowledged the failure to pay in writing on October 25, 2011. The letter he wrote and signed that day in Mr. Schiller's presence reads: Fred Schiller It is my intent to pay Shell Creek Grove $259,818.00, of past due fruit proceeds due; on or about Nov 10th subject to refinancing of property owned by George Winslow. In the interim I will advise you weekly of the progress beginning November 1st. George Winslow [signature] In the event payment is not tendered to Shell Creek Grove by Nov 15th Gulf Citrus Marketing will cancel the Fruit Purchase agreement between Gulf Citrus Mkt. and Shell Creek Grove. George Winslow [signature] On October 28, 2011, Mr. Schiller sent Mr. Winslow a handwritten letter stating he was terminating the Purchase Agreement. The letter quoted verbatim below states: Dear George, Due to your financial difficulties and your inability to meet your obligations in a timely manner I am terminating the agreements between "Prairie Grove-Shell Creek Citrus" and your companies at Gulf Citrus effective Nov. 30th 2011. I like to thank your staff especially Lori for everything they have done in the past years. Thank you Fred Schiller Prairie Creek Groves Shell Creek Citrus Cc: Lory Sabrina Mr. Schiller and Mr. Winslow have done business with each other since 2001. They and the entities that they controlled were engaged in other business relationships, including ones involving Prairie Grove and Shell Creek Grove. They included business relationships with Citrus Sweet, Inc., and Florida Gulf Citrus Management, Inc. The relationships included an agreement between Mr. Schiller and Gulf Citrus Management, a Mr. Winslow entity, for management of the Shell Creek Grove. In the course of their business dealings, Mr. Schiller twice provided Mr. Winslow with copies of the Schiller Investments partnership agreement. He provided it personally to Mr. Winslow in 2002. He provided it to Mr. Winslow's staff in 2008 or 2009.6/ Through Mr. Winslow, Gulf Citrus was fully aware of the parties that it was dealing with in all the business relationships including the Purchase Agreement. Gulf Citrus has sued Mr. Schiller in circuit court for claims involving the Purchase Agreement. There is no evidence that Schiller Investments has filed suit in circuit court. There is also no evidence that Gulf Citrus filed its circuit court action before the Department took jurisdiction of the claim of Schiller Investments.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is Recommended that the Department enter a final order approving the claim of Schiller Investments against Gulf Citrus Marketing, LLC, in the amount of $259,817.41. DONE AND ENTERED this 24th day of May, 2012, in Tallahassee, Leon County, Florida. JOHN D. C. NEWTON, II Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 24th day of May, 2012.
Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the hearing, the following relevant facts are found: Citrus Hill Manufacturing Company (Citrus Hill) is a wholly owned subsidiary of Proctor and Gamble. Citrus Hill is in the business of producing, manufacturing, packaging and distributing citrus products throughout the United States. It's main product has been "Select" orange juice which is 100 percent orange juice. Its principal manufacturing facility is located in Frostproof, Florida. While Citrus Hill has four other manufacturing sites outside the State of Florida, its Florida plant is the only facility for manufacturing frozen products. While it can produce chilled products at its plants located outside Florida, Citrus Hill's Florida plant is necessary to supply the demand for its chilled products on a national basis. In an effort to expand its market, Citrus Hill developed three products which it produces and packs at its plant in Frostproof, Florida. These products are and have been labeled as follows: "Lite Citrus Hill Orange Juice Beverage - 60 percent Orange Juice," "Lite Citrus Hill Grapefruit Juice Beverage - 45 percent Grapefruit Juice," and "Plus Calcium Citrus Hill, Calcium Fortified Grapefruit Juice Beverage - 60 percent Grapefruit Juice." The "lite" beverages are reduced calorie diluted juice beverages with the addition of Nutrasweet. The third product is a diluted grapefruit juice beverage fortified with calcium. By a letter dated March 19, 1987, the Department of Citrus ordered Citrus Hill to change its diluted citrus products labels and informed Citrus Hill that the Department would enforce Rule 20-66.001(4), Florida Administrative Code. That rule provides "Labels for diluted citrus products shall not include the word "juice" in the name of the product." As noted above, Citrus Hill markets and sells its product line throughout the United States. It desires to utilize the names of its diluted juice products as indicated in paragraph two above for three reasons. First, Citrus Hill believes that its labeling is in compliance with federal law. Second, it believes that a product name which includes the word "juice" more fully informs the consumer of the nature of the product because it is more exact, descriptive and less ambiguous than any name not using the word "juice", such as "drink", "ade", or "beverage". Third, Citrus Hill fears that if it were unable to disclose through its product name that the product is primarily a juice product, it would be placed at a competitive disadvantage in the national marketplace where non-Florida producers of similar products would not be bound by the challenged Rule's ban on the use of the word "juice" in the name of diluted juice products. While Citrus Hill could move its packaging facilities outside the state and utilize two product labels (one for Florida shipment and one for the non-Florida market), this alternative would be extremely expensive and would constitute a "distribution nightmare." Many distributors and large retail grocery stores work in multi-state regions and may not be willing to segregate and keep track of petitioner's different product labels for shipment in Florida and in non-Florida states. No other state in the United States prohibits the word "juice" in the labeling of diluted citrus juice products. In the late 1960's and early 1970's, the subject of proper labeling of diluted fruit juice beverages was under discussion by both the Florida Department of Citrus and the Federal Food and Drug Administration (FDA) under the Food, Drug and Cosmetic Act. The FDA ultimately rejected the proposal of prohibiting the word "juice" from the name of any product that was not 100 percent pure juice, and also rejected the approach of defining different products through "standards of identity." This latter method of labeling products would have defined a product as "ades" only if containing more than 10 percent, but less than 20 percent, juice, and various other category names based upon the percentage of fruit juice contained in the product. The prohibition against the word "juice" and the "standards of identity" proposals for the labeling of diluted juice products were rejected by the FDA in favor of a common or usual name approach, with a percent declaration of any characterizing ingredient. The pertinent federal regulations addressing the labeling of food products are contained in 21 C.F.R. Chapter 1. The more general regulation appears in 21 C.F.R. 102.5(a) and (b), and states, in pertinent part, as follows: Section 102.5 General Principles. The common or usual name of a food . . . shall accurately identify or describe, in as simple and direct terms as possible, the basic nature of the food or its characterizing properties or ingredients. The name shall be uniform among all identical or similar products and may not be confusingly similar to the name of any other food that is not reasonably encompassed within the same name. Each class or subclass of food shall be given its own common or usual name that states, in clear terms, what it is in a way that distinguishes it from different foods. The common or usual name of a food shall include the percentage(s) of any characterizing ingredient(s) or component(s) when the . . . component(s) . . . has a material bearing on . . . consumer acceptance or when the labeling . . . may otherwise create an erroneous impression that such . . . component(s) is present in an amount greater than is actually the case. The following requirements shall apply unless modified by a specific regulation in Subpart B of this part. The percentage of a characterizing ingredient or component shall be declared on the basis of its quantity in the finished product. . . . The percentage of a characterizing ingredient or component shall be declared-by the words "containing (or contains) --- percent (or percent) ---" . . . with the first blank filled in with the percentage expressed as a whole number not greater than the actual percentage of the ingredient or component named and the second blank filled in with the common or usual name of the ingredient or component. The FDA has also promulgated regulations dealing with the labeling of specific nonstandardized foods, including diluted orange juice beverages and diluted fruit or vegetable juice beverages other than diluted orange juice beverages. With respect to diluted orange juice beverages, 21 C.F.R. Section provides as follows: Diluted Orange Juice Beverages. The common or usual name of a non- carbonated beverage containing less than 100 percent and more than 0 percent orange juice shall be as follows: A descriptive name for the product meeting the requirements of Section 102.5(a) (e.g., diluted orange juice beverage or another descriptive phrase), and A statement of the percent of each juice contained in the beverage in the manner set forth in Section 102.5(b)(2). The percent of the juice shall be declared in 5 percent increments, expressed as a multiple of five not greater than the actual percentage of orange juice in the product, except that the percent of orange juice in products containing more than 0 percent but less than 5-percent orange juice shall be declared in the statement as "less than 5" percent. Diluted fruit or vegetable juice beverages other than diluted orange juice beverages are the subject of 21 C.F.R. Section 102.33, 1/ which provides as follows: Diluted fruit or vegetable juice beverages other than diluted orange juice beverages. The common or usual name of a non- carbonated beverage containing less than 100 percent and more than zero percent fruit or vegetable juice(s), other than only orange juice, shall be as follows: A descriptive name meeting the requirements of Section 102.5(a)(e.g., "diluted grape juice beverage", "grape juice drink", or another descriptive phrase) and A statement of the percent of each juice contained in the beverage in the manner set forth in Section 102.5(b)(2). The percent of the juice shall be declared in five percent increments, expressed as a multiple of five not greater than the actual percentage of juice in the beverage except that the percentage of any juice in beverages containing more than zero percent but less than 5 percent of that juice shall be declared in the statement as "less than 5" percent. The Department of Citrus has conducted two consumer surveys for the purpose of determining whether the word "juice" in a product name of a diluted citrus juice product is confusing or misleading. The Drossler study was conducted in 1972, and concluded that consumers are confused by the word "juice." However, that conclusion appears to be founded on the premise that the only proper use of the word "juice" is in the technical sense of "100 percent pure juice." In other words, what was measured in the survey was the consumer's failure to use the word "juice" in a limited sense to mean "100 percent pure juice." The surveyed consumer was asked to look at several products, and then state "what kind of product is this?" The products viewed consisted of several different dairy products and a citrus beverage. If the consumer used the word "juice" to describe the kind of product pointed to, he was treated as being confused if the product was less than 100 percent juice. No follow-up questions were asked concerning the consumer's understanding of the content of the product. The Chelsea study was conducted at the request of the Department of Citrus in 1987. It, too, concludes that there would be less consumer confusion if the word "juice" were eliminated from products comprised of less than 100 percent pure citrus juice. However, there was evidence that this study attempted to address too many issues, including consumer preferences, and that "question contamination" could well have occurred. This refers to the intentional or unintentional biasing of the interviewees by the ordering or phraseology of the questions asked. Both the Burke study and the Chelsea study indicate that consumers are not confused by a beverage label using the word juice in the product name when it is accompanied by the declaration of the percentage of juice contained in the product. The Burke study was conducted on behalf of the petitioner in 1987. After conducting interviews of 1200 people from all age groups in six different cities throughout the United States, it concluded that there was no significant difference in consumer confusion between the use of the word "juice" and "beverage" in the product name when the percentage of citrus juice content is indicated on the label. In other words, whether the label identified the product as a "juice beverage" or a "beverage", the respondents were able to determine the amount of actual juice contained in the product.
The Issue Whether Respondent, Citrus Direct, LLC, owes Petitioner, Marvin Hajos, the sum of $5,397.00 for citrus that was purchased, but not harvested.
Findings Of Fact At all times material to the instant case, Petitioner and Citrus Direct were involved in the growing and marketing of citrus fruit in the State of Florida. On June 12, 2008, Citrus Direct agreed to purchase fruit from Petitioner. The terms of their agreement were reduced to writing. The "Fresh Fruit Contract" provided that Citrus Direct would purchase from Petitioner all of the varieties of citrus fruits of merchantable quality as delineated in the contract. More specifically, Citrus Direct was entitled to purchase "Valencia" oranges from Petitioner for "$3.00 on tree net" per box. The terms of the contract suggests that it is for "citrus fruit for the year 2005/2006 and merchantable at the time of picking. . . ." The contract does not identify a total amount of fruit expected from the grove. Prior to entering into the above-referenced contract, Petitioner had made arrangements with an unidentified third party to have the grove picked, but for some reason, that agreement fell through. Jason Cooper, known in the citrus business as a "bird dog," brought the parties together. Mr. Cooper is an independent contractor who finds grove owners who need to have their groves picked and refers them to buyers. The "Fresh Fruit Contract" was signed on June 12, 2008. The grove was picked on June 15, 17, 26 and 30, 2008. Two hundred and sixty-four boxes of fruit were picked from Petitioner's grove. Petitioner received payment of $603.00. Citrus Direct forwarded an additional check for $189.00 to Petitioner; however, Petitioner did not receive the check. No admissible evidence was received regarding the number of boxes of fruit that were anticipated from the grove. However, on June 30, 2008, all the fruit that was reasonably available to be picked in the grove had been picked.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Florida Department Agriculture and Consumer Services enter a final order dismissing Petitioner, Marvin Hajos', Amended Complaint, but requiring Respondent, Citrus Direct, LLC, to pay Petitioner $189.00, if that amount has not already been paid. DONE AND ENTERED this 27th day of April, 2009, in Tallahassee, Leon County, Florida. S JEFF B. CLARK Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 27th day of April, 2009. COPIES FURNISHED: Honorable Charles H. Bronson Commissioner of Agriculture Department of Agriculture and Consumer Services The Capitol, Plaza Level 10 Tallahassee, Florida 32399-0810 Richard D. Tritschler, General Counsel Department of Agriculture and Consumer Services 407 South Calhoun Street, Suite 520 Tallahassee, Florida 32399-0800 Christopher E. Green, Esquire Department of Agriculture and Consumer Services Office of Citrus License and Bond Mayo Building, Mail Station 38 Tallahassee, Florida 32399-0800 Marvin Hajos 3510 Northwest 94th Avenue Hollywood, Florida 33024 State Farm Fire and Casualty Company One State Farm Plaza Bloomington, Illinois Hans Katros Citrus Direct, LLC 61710 1406 Palm Drive Winter Haven, Florida 33884
Findings Of Fact Petitioner, Deerfield Groves Company (Deerfield), is a licensed citrus fruit dealer under Chapter 601, Florida Statutes, and Chapter 20-34, Florida Administrative Code. As a licensee, Deerfield is subject to administrative and criminal prosecution for violation of the statutes and rules governing licensed citrus fruit dealers and was under administrative prosecution for alleged violations of Section 601.33, Florida Statutes, and Rule 20-34.11, Florida Administrative Code, at the time of the final hearing. Deerfield has legal standing as a party petitioner in this case. Respondent, Department Of Citrus (DOC), promulgated Rule 20-34.11, Florida Administrative Code, under the authority of Section 601.10, Florida Statutes. Rule 20-34.11 is designed to implement Section 601.33, Florida Statutes. Respondent, Department Of Agriculture And Consumer Services, (DACS), is the agency charged with the duty to enforce Section 601.33, Florida Statutes, and Rule 20- 34.11, Florida Administrative Code. Personnel of DACS' Division Of Fruit And Vegetable Inspection also are responsible for testing fresh citrus for maturity under Chapter 20-34, Florida Administrative Code. Licensees such as Deerfield furnish a testing room for DACS inspectors to perform maturity tests and certify fresh citrus, as required for marketing fresh fruit. DACS leases an extractor, used for squeezing juice from fruit samples, and subleases the extractor to the licensee. Under the sublease, the extractor is kept in the testing room for use by DACS inspectors and, when not being used by DACS inspectors, for use by the licensee in performing its own tests. Typically, the licensee furnishes the testing room with a table for two and a chair or two. When DACS inspectors perform maturity tests at the beginning of the early harvest, they bring most of the things they need for testing. The licensee provides the bins in which the fruit samples are carried into the testing room. The inspectors bring either a DACS slicing knife or their own. The licensee provides buckets it owns for use by the inspector during the test to collect juice extracted from fruit samples. The DACS inspectors also bring: a sizer to measure the fruit samples; a 2000 c.c. graduated cylinder to measure juice quantities; a 500 c.c. graduated cylinder to hold juice being tested for solids content and for temperature; aluminum pans to hold the graduated cylinders; a combination hydrometer for measuring juice solids content and temperature; a 25 m.1. pipet for transferring a measured amount of juice into a flask; the flask; a bottle of phenothaline with eyedropper top used for adding measured amounts of phenothaline to the flask of measured juice; a bottle of alkaline solution; and a burette for adding a measured amount of the alkaline solution to the flask of measured juice. During the harvest season, DACS leaves its equipment, instruments and solutions referred to in the preceding paragraph in the testing room. They are kept separate from the licensee's property and are not supposed to be used by the licensee. However, DACS allows the licensee to use its own bins and buckets and the extractor to conduct its own tests in the testing room when DACS inspectors are not using it. 1/ Some DACS inspectors request or allow licensees to assist during testing or to handle the fruit samples. 2/ Some allow licensees to attempt to influence the inspector's judgment by questioning the validity of the test or the accuracy of the inspector's observations or by comparing the inspector's results with the results of its own tests. Sometimes, this results in correction of an error the inspector otherwise would have made. It was not proved, however that there is an agency policy of requesting or allowing licensees to conduct themselves in those ways during testing. DACS has a policy to allow only one licensee representative in the testing room with the DACS inspector during testing. Violation of this policy is viewed as a violation of Section 601.33, Florida Statutes (1983). However, not all DACS inspectors strictly enforce this policy. Some allow more than one licensee representative in the testing room.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Citrus enter a final order dismissing the application filed by the Petitioner for licensure as a citrus fruit dealer. DONE AND ENTERED this 30th day of May, 2013, in Tallahassee, Leon County, Florida. S WILLIAM F. QUATTLEBAUM 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 May, 2013. COPIES FURNISHED: Douglas Ackerman, Executive Director Department of Citrus Post Office Box 9010 605 East Main Street Bartow, Florida 33831-9010 Joseph P. Mawhinney, Esquire Reed and Mawhinney, P.L. 1611 Harden Boulevard Lakeland, Florida 33803-1826 Guillermo Vazquez East West Citrus Packers, LLC 11860 Southwest 183rd Street Miami, Florida 33177-2453
The Issue The issue in this case is whether Respondent Dooley Groves, Inc. owes Petitioner a sum of money for shipments of citrus fruit.
Findings Of Fact The evidence presented at final hearing established the facts that follow. The Parties and Their Problem Spyke's Grove and Dooley are "citrus fruit dealers" operating within the Department's regulatory jurisdiction. As a wholesale shipper, Spyke's Grove packages and arranges for delivery of citrus products pursuant to purchase orders that retail sellers such as Dooley submit. The packages typically are labeled with the retail seller's name (e.g. Dooley), and thus the retail buyer (and the recipient, if the citrus is purchased as a gift) usually will not be aware of Spyke's Grove's involvement. The instant case involves a series of orders that Dooley placed with Spyke's Grove between November and December 1999 for packages of gift fruit. Under a number of informal, largely unwritten contracts, Spyke's Grove agreed, each time it received an order from Dooley, to ship a gift fruit box or basket to the donee designated by Dooley's retail customer, for which fruit shipment Dooley agreed to pay Spyke's Grove. Spyke's Grove alleges that Dooley failed to pay in full for all of the gift fruit packages that Dooley ordered and Spyke's Grove duly shipped. Dooley contends (though not precisely in these terms) that Spyke's Grove materially breached the contracts, thereby discharging Dooley from further performance thereunder. Dooley also claims, as an affirmative defense, that the alleged debt was extinguished pursuant to an accord and satisfaction. The Transactions From mid-November 1999 until around December 12, 1999, Dooley faxed to Spyke's Grove approximately 150 individual orders for gift fruit packages. Each order consisted of a shipping label that identified the product (e.g. the type of gift box or basket), the intended recipient, the destination, and a proposed shipping date. Spyke's Grove manifested its intent to fill these orders by faxing statements of acknowledgment to Dooley. Although the many contracts that arose from these transactions were thus documented, the writings left much unsaid. For example, contrary to Dooley's assertion, the parties did not agree in writing that Spyke's Grove would deliver the subject gift baskets to the donees before Christmas, nor did they make any express oral agreements to this effect. Further, the parties did not specifically agree that Spyke's Grove would be obligated to deliver the gift fruit into the hands of the donees and bear the risk of loss until such tender of delivery. Rather, the contracts between Spyke's Grove and Dooley were ordinary shipment contracts that required Spyke's Grove to put the goods into the possession of carriers (such as the U.S. Postal Service or United Parcel Service) who in due course would deliver the packages to the donees. For several weeks, until early December 1999, Dooley placed orders, and Spyke's Grove filled them, under the arrangement just described, without controversy. The Fire On the night of Sunday, December 12, 1999, a devastating fire at Spyke's Grove's premises caused substantial damage, temporarily disrupting its citrus packing and shipping operations at the peak of the holiday season. Working through and around the loss, Spyke's Grove soon recovered sufficiently to reopen for business. By around noon on Tuesday, December 14, 1999, its telephone service had been restored, and activities relating to shipping resumed on Friday, December 17, 1999. Dooley's Response Dooley did not immediately learn about the fire that had interrupted Spyke's Grove's operations. Continuing with business as usual on Monday, December 13, 1999, Dooley attempted then and throughout the week to fax orders to Spyke's Grove but consistently failed to connect because the lines were busy. With unplaced orders piling up, Dooley began to worry that the gift baskets its customers had ordered earlier in the month——orders that Sypke's Grove already had agreed to fill—— would not arrive by Christmas, as Dooley had guaranteed when taking those orders. Then, on December 16, word of the Spyke's Grove fire reached Dooley. Dooley's worry escalated into alarm. That same day, Dooley placed telephone calls to as many of its retail customers or their donees as it could reach, to ascertain whether Spyke's Grove had shipped any of the gift fruit baskets that Dooley had ordered before December 12, 1999. Dooley was unable to confirm the receipt of a single package—— and it panicked. Disregarding its existing contractual obligations and with no advance notice to Spyke's Grove, Dooley made alternative arrangements for filling all of the orders that it had faxed to Spyke's Grove in December 1999. Dooley packaged and shipped some of the subject gift boxes on its own, and it placed orders for the rest with another wholesale shipper. These substitute packages were being shipped as early as December 17 or 18, 1999. Even after the fact, Dooley failed to inform Spyke's Grove that it had, in effect, repudiated the existing shipment contracts between them. Having no knowledge of Dooley's actions, Spyke's Grove packaged and shipped all of the gift fruit that Dooley had ordered pursuant to the contracts entered into before December 12, 1999. The Inevitable Dispute On January 27, 2000, Spyke's Grove sent three invoices to Dooley seeking payment for most of the citrus shipped pursuant to Dooley's orders. These bills totaled $3,242.55. A fourth and final invoice, for $70.57, was sent on February 18, 2000. Combined with the other bills, this last brought the grand total to $3,313.12. Each of these invoices contained the following boilerplate "terms": Net 14 days prompt payment is expected and appreciated. A 1 1/2% monthly service charge (A.P.R. 18% per annum) may be charged on all past due accounts. Customer agrees to pay all costs of collection, including attorneys [sic] fees and court costs, should collection efforts ever become necessary. Dooley did not remit payment or otherwise respond to Spyke's Grove's statements. Accordingly, on June 20, 2000, Spyke's Grove sent a letter to the Department requesting assistance. Dooley was provided a copy of this letter. On June 30, 2000, Dooley sent a letter to Spyke's Grove in which it explained the reasons why Dooley believed Spyke's Grove was not entitled to full payment of $3,313.12. Dooley had decided, unilaterally, that a deduction of $1,723.53 was in order. In its letter, Dooley described the remaining balance of $1,589.59 as the "final total payment," and a check for that amount was enclosed therewith. Nothing in Dooley's letter fairly apprised Spyke's Grove that the check for $1,589.59 was being tendered, in good faith, in full satisfaction of Spyke's Grove's demand for payment of $3,313.12. No language in that June 30, 2000, letter so much as hinted that Spyke's Grove's acceptance of the check would be considered a manifestation of assent to Dooley's position or an agreement to accept the lesser sum in satisfaction of a greater claim. In short, the parties did not make a mutual agreement, either expressly or by implication, to settle Spyke's Grove's claim for a total payment of $1,589.59. Spyke's Grove was entitled to accept Dooley's check for $1,589.59 as a partial payment against the total indebtedness, and it did. Shortly thereafter, Spyke's Grove filed a Complaint with the Department, initiating the instant proceeding. Ultimate Factual Determinations Dooley's refusal to pay in full for the goods it ordered from Spyke's Grove constituted a breach of the contracts between the parties. Spyke's Grove did not materially breach the agreements, nor was the indebtedness discharged pursuant to an accord and satisfaction. Spyke's Grove has suffered an injury as a result of Dooley's breach. Spyke's Grove's damages consist of the principal amount of the debt together with pre-award interest at the statutory rate, less the partial payment that Dooley made on June 30, 2000. Accordingly, Spyke's Grove is entitled to recover the following amounts from Dooley: Principal Due Date Statutory Interest $3,242.55 2/10/99 $ 18.66 (2/10/99 - 3/03/99) $ 70.57 3/04/99 $3,313.12 3/04/99 LESS: <$1,589.59> $ 437.56 (3/04/99 - 6/29/00) $1,723.53 6/30/00 $ 86.89 (6/30/00 - 12/31/00) $ 157.92 (1/01/01 - 10/31/01) $1,723.53 $ 701.03 Interest will continue to accrue on the outstanding balance of $1,723.53 in the amount of $0.52 per day from November 1, 2001, until the date of the final order.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department enter a final order awarding Spyke's Grove the sum of $1,723.53, together with pre- award interest in the amount of $701.03 (through October 31, 2001), plus additional interest from November 1, 2001, until the date of the final order, which will accrue in the amount of $0.52 per day. DONE AND ENTERED this 12th day of October, 2001, in Tallahassee, Leon County, Florida. COPIES FURNISHED: JOHN G. VAN LANINGHAM Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 12th day of October, 2001. Barbara Spiece, President Spyke's Grove, Inc. 7250 Griffin Road Davie, Florida 33314 Diane M. Houghtaling, Vice President Dooley Groves, Inc. 1651 Stephens Road Post Office Box 7038 Sun City, Florida 33586-7038 Reliance Insurance Company Three Parkway Philadelphia, Pennsylvania 19102 Honorable Charles H. Bronson Commissioner of Agriculture Department of Agriculture and Consumer Services The Capitol, Plaza Level 10 Tallahassee, Florida 32399-0810 Richard D. Tritschler, General Counsel Department of Agriculture and Consumer Services The Capitol, Plaza Level 10 Tallahassee, Florida 32399-0810 Brenda D. Hyatt, Bureau Chief Department of Agriculture and Consumer Services 500 Third Street Northwest Post Office Box 1072 Winter Haven, Florida 33882-1072
