01-002416 Rio Indio Fruit Company vs. Harbor Island Citrus, Inc., And Fidelity &Amp; Deposit Company Of Maryland Status: Closed Recommended Order on Wednesday, December 12, 2001.

Summary: Complaint dismissed for failure to prove a breach of an oral contract which only required the harvesting of colored grapefruit up to a certain amount.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

RIO INDIO FRUIT COMPANY, )

)

Petitioner, )

)

vs. ) Case No. 01 - 24 16A

)

HARBOR ISLAND CITRUS, INC., and )

FIDELITY & DEPOSIT COMPANY OF )

MARYLAND, )

)

)

Respondents. )

___________________________________)

RECOMMENDED ORDER

Pursuant to Notice, this cause was heard by Linda M. Rigot,

the assigned Administrative Law Judge of the Division of

Administrative Hearings, on September 25, 2001, in Fort Pierce,

Florida.

A PPEARANCES

For Petitioner: Theodore W. Herzog, Esquire

1101 Simonton Street

Key West, Florida 33040

For Respondent: Fred L. Kretschmer, Jr., Esquire

Moss, Henderson, Blanton, Lanier,

Kretschmer & Murphy, P.A.

817 Beachland Boulevard

Post Office Box 3406

Vero Beach, Florida 32964 - 3406

STATEMENT OF THE ISSUE

The issu e presented is whether Respondents Harbor Island

Citrus, Inc., and Fidelity & Deposit Company of Maryland are

indebted to Petitioner Rio Indio Fruit Company in the amount of

$80,684.

PRELIMINARY STATEMENT

By Complaint filed with the Department of Agricult ure and

Consumer Services on April 23, 2001, Petitioner alleged that

Respondent is indebted to it in the amount of $80,684. By

Answer filed May 29, 2001, Respondent denied that Petitioner's

claim is valid. This cause was thereafter transferred to the

Div ision of Administrative Hearings to conduct an evidentiary

proceeding.

Petitioner presented the testimony of Miguel R. Perales and

Rafael Viamontes. Respondent presented the testimony of

James Morris, Albert Valdes, Dennis Downs, Danny Fresch, and

Donald Groves, Jr. Additionally, Petitioner's Exhibits numbered

1 - 4 and 6 - 11 and Respondent's Exhibits numbered 1 - 8 were

admitted in evidence.

Although both parties requested leave to file proposed

recommended orders after the conclusion of the final hearing,

only Respondent did so. That document has been considered in

the entry of this Recommended Order.

FINDINGS OF FACT

1. Petitioner Rio Indio Fruit Company operates a citrus

packinghouse located in St. Lucie County, Florida. Respondent

Harbor Island Cit rus, Inc., operates a citrus packinghouse in

Indian River County, Florida.

2. On approximately November 20, 1999, Albert Valdes from

Harbor Island contacted Ralph Viamontes from Rio Indio to

ascertain if Rio Indio might have a source that Harbor Island

could use to obtain colored grapefruit for Harbor Island's

annual fund - raising program.

3. It was the industry practice, and Harbor Island's

practice, for the fund - raising program to run from late - November

through mid - December. During that time period, students in the

north sell the fruit to raise money for their projects. The

fruit used in such a fund - raising program can be a quality

inferior to the quality demanded by the Japanese market, the

primary market for Harbor's Island's citrus.

4. Viamo ntes told Valdes he would see if he could find a

grower with colored grapefruit suitable for Harbor Island's

fund - raising program. Viamontes telephoned Valdes the following

day and said he had located a grower. On that day or possibly

the following day V aldes and two other Harbor Island employees,

Dennis Downs and James Morris, met Viamontes at the Rio Indio

facility. The four men drove in Viamontes' vehicle to the Sorge

VII grove in Martin County to look at the grove's colored

grapefruit.

5. The amoun t of fruit in the grove was much larger than

Harbor Island needed to fulfill its fund - raising program

commitment. Viamontes estimated that the grove contained the

equivalent of 30,000 boxes of colored grapefruit. Valdes told

Viamontes that Harbor Island might need 18,000 to 20,000 boxes

of the grapefruit for its fund - raising program. Viamontes told

the Harbor Island employees that they could still make a deal

for the grapefruit in the grove because since he had his own

packing house, he would take the fr uit that Harbor Island did

not need.

6. The men discussed that Harbor Island could take 2/3 of

the colored grapefruit in the grove, and Rio Indio could take

1/3. They further discussed that the manager of Sorge VII

wanted $5.50 a box for the fruit, tha t Viamontes would contract

to take all the fruit in the grove, that Harbor Island would pay

Viamontes $5.50 a box for the fruit Harbor Island took, and that

Viamontes would pay the grower. James Morris from Harbor Island

specifically asked Viamontes what would happen if Harbor Island

wanted less than 18,000 to 20,000 boxes. Viamontes told the

Harbor Island employees that there would be no problem if Harbor

Island took less fruit because Viamontes would take whatever was

left after Harbor Island took what it wanted.

7. Valdes consulted with Donald Groves, Jr., the owner of

Harbor Island to verify that Harbor Island would make the

arrangement suggested by Viamontes, and Groves approved the

arrangement. Thereafter, Viamontes entered into a written

contact w ith the manager of Sorge VII to purchase all of the

fruit for $5.50 a box, and that written contract included

deadlines for 20,000 boxes of fruit to be picked by December 31,

1999, and the remainder to be picked by the end of

February 2000.

8. Rather th an the 30,000 field boxes that Viamontes had

estimated the grove contained, the grove contained substantially

more grapefruit than Viamontes estimated. The record in this

cause suggests that the grove may have contained as many as

43,762 boxes of colored grapefruit.

9. In accordance with its understanding of the arrangement

with Viamontes, Harbor Island began harvesting colored

grapefruit from the Sorge VII grove on November 26, 1999, and

completed all picking at the grove on December 8, 1999. During

tha t time Harbor Island picked 9,000 boxes of colored grapefruit

for which it was obligated to pay Viamontes $5.50 per box.

Harbor Island paid Viamontes in full for the fruit it took.

10. During the time Harbor Island was at the Sorge VII

grove picking co lored grapefruit, Rio Indio's crews were there

picking grapefruit. Rio Indio's crews also picked fruit at the

grove during the months after Harbor Island completed its

picking. In addition to Rio Indio's crews knowing that Harbor

Island had completed its picking, James Morris specifically told

Viamontes that Harbor Island had taken all the fruit it wanted

from the Sorge VII grove as of December 8, 1999.

11. During the months of December 1999, January 2000,

February 2000, and the first half of March 2000, Viamontes spoke

with Valdes of Harbor Island several times a day to check on the

status of other unrelated fruit being packed and sold by Harbor

Island for Viamontes. In addition, Viamontes was present at the

Harbor Island packinghouse on a weekly basis to pick up checks

due to him or Rio Indio for the unrelated fruit being sold by

Harbor Island for Viamontes. Yet, at no time between

December 8, 1999, and the middle of March 2000 did Viamontes

tell anyone that he believed Harbor Island had an obligation to

harvest additional fruit from the Sorge VII grove.

12. Rather, in late January 2000 Viamontes asked Valdes if

Harbor Island were going to take any more fruit from Sorge VII.

When Valdes said the fund - raising program was over, Viamontes

told Valdes n ot to worry because Rio Indio would take the rest.

Further, on or about March 1, 2000, during one of Viamontes'

visits to the Harbor Island packinghouse, Dennis Downs of Harbor

Island asked Viamontes how the harvesting in Sorge VII was

proceeding. Viamo ntes responded that Rio Indio was harvesting

the remaining colored grapefruit and that Harbor Island need not

be concerned about any further harvesting at the Sorge VII

grove.

13. On or about March 15, 2000, the price and demand for

colored grapefruit s uddenly and dramatically dropped due to an

oversupply of fruit for which the industry was not prepared.

After the dramatic decline, Viamontes contacted Valdes from

Harbor Island and inquired whether Harbor Island was going to

pick any additional fruit at the Sorge VII grove. Valdes

responded that Harbor Island had no obligation to pick any

additional colored grapefruit from the Sorge VII grove based

upon the agreements between Harbor Island and Rio Indio,

specifically, Viamontes' continued representations that Harbor

Island should not be concerned about picking any additional

colored grapefruit from the grove because Rio Indio would take

the remainder.

14. In July 2000 Viamontes appeared at Harbor Island and

advised Donald Groves, for the first time, t hat Harbor Island

owed Rio Indio the amount of $80,684 for an additional 20,171

boxes of colored grapefruit from the Sorge VII grove, which

Viamontes now contends Harbor Island should have harvested. Rio

Indio claims that it suffered a loss of $4 per box for that

additional fruit.

15. The documentation presented by Rio Indio to support

its demand is questionable and does not substantiate Rio Indio's

claimed damages. First, the majority of the documents submitted

by Rio Indio indicate that the fruit de scribed therein was from

a grove in St. Lucie County, and Sorge VII is in Martin County.

Second, the majority of the documents indicate that the fruit

described therein was from packinghouse eliminations although

Viamontes alleges that the fruit went dire ctly from the field to

the cannery without going through a packinghouse. Third, the

cannery records reflect that the "pound solids per box" are

significantly less than what would be expected from fruit coming

from the Sorge VII grove based upon the grove' s historical

production.

CONCLUSIONS OF LAW

16. The Division of Administrative Hearings has

jurisdiction over the subject matter hereof and the parties

hereto. Sections 120.569, 120.57(1), and 601.66, Florida

Statutes.

17. A party seeking to establ ish the existence of an oral

contract has the burden of proving the existence of the oral

agreement by the greater weight of the evidence. Theocles v.

Lytras , 518 So. 2d 936 (Fla. 3rd DCA 1987). Rio Indio has

proven that it entered into an oral contract with Harbor Island

by which Harbor Island could harvest up to 2/3 of the colored

grapefruit in the Sorge VII grove. Although Harbor Island took

less than 2/3 of the fruit, Rio Indio and Viamontes knew that

Harbor Island had taken all that it wanted and ve rbalized its

agreement to the amount taken by Harbor Island as fulfilling

Harbor Island's obligation on more than one occasion.

18. Accordingly, Harbor Island complied fully with its

obligation under the oral contract with Rio Indio. Even had

Harbor Is land not done so, the documentation submitted by Rio

Indio to support its claim for damages does not do so.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is

RECOMMENDED that a final order be entered finding that

Harbor Island Citrus, Inc., is not indebted to Rio Indio Fruit

Company and dismissing the Complaint filed by Rio Indio Fruit

Company in this cause.

DONE AND ENTERED this 12th day of December, 2001, in

Tallahassee, Leon County, Florida.

___________________________________

LINDA M. RIGOT

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 December, 2001.

COPIES FURNISHED:

Theodore W. Herzog , Esquire

1101 Simonton Street

Key West, Florida 33040

Fred L. Kretschmer, Jr., Esquire

Moss, Henderson, Blanton, Lanier,

Kretschmer & Murphy, P.A.

817 Beachland Boulevard

Post Office Box 3406

Vero Beach, Florida 32964 - 3406

Kathy Elves

The Fidelity a nd Deposit Companies

300 Saint Paul Place

Post Office Box 87

Baltimore, Maryland 21203

Brenda D. Hyatt, Bureau Chief

Department of Agriculture and Consumer Services

500 Third Street, Northwest

Post Office Box 1072

Winter Haven, Florida 33882 - 1072

Brend a D. Hyatt, Bureau Chief

Department of Agriculture and Consumer Services

541 East Tennessee Street

India Building

Tallahassee, Florida 32308

Honorable Charles H. Bronson

Commissioner of Agriculture

Department of Agriculture and Consumer Services

The Capi tol, Plaza Level 10

Tallahassee, Florida 32399 - 0810

Richard Ditschler, General Counsel

Department of Agriculture and Consumer Services

The Capitol, Plaza Level 10

Tallahassee, Florida 32399 - 0810

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties h ave the right to submit written exceptions within

15 days from the date of this Recommended Order. Any exceptions

to this Recommended Order should be filed with the agency that

will issue the Final Order in this case.