01-002649 Spyke`s Grove, Inc., D/B/A Fresh Fruit Express, Emerald Estate, Nature`s Classic vs. Carlyn R. Kulick, D/B/A Carlyn`s And Western Surety Company Status: Closed Recommended Order on Thursday, November 1, 2001.

Summary: Petitioner proved that citrus fruit dealer was indebted to Petitioner for value of fruit shipped by Petitioner at dealer`s request.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

SPYKE'S GROVE, INC., d/b/a )

FRESH FRUIT EXPRESS, EMERALD )

ESTATE, NATURE'S CLASSIC, )

)

Petitioner, )

)

vs. ) Case No. 01 - 2649A

)

CARLYN R. KULICK, d/b/a CARLYN'S )

and WESTERN SURETY COMPANY, )

)

Respondents. )

____________ _____________________ )

RECOMMENDED ORDER

Pursuant to notice, a final hearing was held in this case

on September 19, 2001, by video teleconference with the parties

appearing in Fort Lauderdale, Florida, before Administrative Law

Judge Michael M. Parrish of the Division of Administrative

Hearings, who was present in Tallahassee, Florida.

APPEARANCES

For Petitioner: Barbara Spiece, President

Spyke's Grove, Inc.

7250 Griffin Road

Davie, Florida 33314

For Respondent Carlyn R. Kulick, Owner

Carlyn's: Carlyn's

1601 Fifth Avenue, North

St. Petersburg, Florida 33713

For Respondent No appearance

Western Surety:

S TATEMENT OF THE ISSUE

Whether the Respondent Carlyn R. Kulick, d/b/a Carlyn's,

failed to pay amounts owing to the Petitioner for the shipment

of citrus fruit, as set forth in the Complaint dated April 30,

2001, and, if so, the amount the Petitioner is ent itled to

recover.

PRELIMINARY STATEMENT

On or about April 30, 2001, the Petitioner, Spyke's Grove,

Inc., d/b/a Fresh Fruit Express, Emerald Estate, Nature's

Classic ("Spyke's Grove") filed a Complaint with the Department

of Agriculture and Consumer Service s ("Department") alleging

that Respondent, Carlyn R. Kulick, d/b/a Carlyn's ("Kulick or

Carlyn's"), had failed to pay Spyke's Grove for "gift fruit"

that it had shipped during the 1999 - 2000 citrus shipping season

pursuant to instructions from Kulick. Spyk e's Grove alleged

that Kulick owed $1,335.22 for the "gift fruit" in question.

Respondent, Western Surety Company ("Western"), was named in the

Complaint as the surety for Kulick.

On or about June 29, 2001, Carlyn R. Kulick, as owner of

Carlyn's, filed an answer on behalf of Carlyn's denying that it

was indebted to Spyke's Grove and requested a hearing. The

Department duly forwarded the matter to the Division of

Administrative Hearings for assignment of an administrative law

judge. Pursuant to notice, th e final hearing was held on

September 19, 2001. At the hearing, Barbara Spiece testified on

behalf of Spyke's Grove, and Petitioner's Exhibits 1 through 19

were offered and received into evidence. Carlyn R. Kulick

testified on behalf of Carlyn's, and Res pondent's Exhibits 1

through 31 were offered and received into evidence.

No transcript of the proceeding was filed. At the close of

the evidentiary hearing, the parties were advised that their

proposed findings of fact and conclusions of law were to be

fi led on or before September 29, 2001. Thereafter, Spyke's

Grove filed a timely Proposed Recommended Order. Carlyn's did

not file a proposed recommended order.

FINDINGS OF FACT

1. At all times material to this proceeding, Spyke's Grove

and Carlyn's were "citrus fruit dealers" licensed by the

Department.

2. As part of its business, Carlyn's sells to its retail

customers "gift fruit" consisting of oranges and grapefruit for

shipment to third persons identified by the customers.

Carlyn R. Kulick is the own er of Carlyn's and acted on its

behalf with respect to the transactions that are the subject of

this proceeding.

3. Spyke's Grove is in the business of packaging and

shipping "gift fruit" consisting of oranges and grapefruit

pursuant to orders placed by o ther citrus fruit dealers.

Barbara Spiece is the president of Spyke's Grove and acted on

its behalf with respect to the transactions that are the subject

of this proceeding.

4. In November and December 1999, Spyke's Grove received a

number of orders for "gift fruit" from Carlyn's. Most of the

orders were for single shipments of fruit. One order was for

six monthly shipments of fruit. This was the first year

Carlyn's had done business with Spyke's Grove, and Carlyn's and

Spyke's Grove did not execute a written contract governing their

business relationship.

5. On the night of Sunday, December 12, 1999, the Spyke's

Grove's packinghouse was destroyed by fire, and its offices were

substantially damaged. The fire could not have happened at a

worse time bec ause it was at the peak of the holiday fruit -

shipping season. Spyke's Grove was able to move into temporary

offices and to obtain the use of another packinghouse very

quickly. It had telephone service at approximately noon on

Tuesday, December 14, 1999, and it began shipping "gift fruit"

packages on Friday, December 17, 1999, to fill the orders it had

received.

6. Carlyn R. Kulick, the owner of Carlyn's, learned of the

fire at Spyke's Grove and attempted to contact the Spyke's Grove

offices for an update on the orders Carlyn's had placed for

shipment during the holidays. Mr. Kulick was unable to contact

anyone at Spyke's Grove for three or four days after the fire,

and he was worried that his customers' orders for "gift fruit"

would not be shipped on tim e. Mr. Kulick called another

packinghouse and placed orders duplicating some of the orders

Carlyn's had placed with Spyke's Grove.

7. Meanwhile, Spyke's Grove was giving priority to its

smaller wholesale customers such as Carlyn's, and it shipped all

of the orders it had received from Carlyn's.

8. Carlyn's did not cancel its orders with Spyke's Grove

or otherwise notify Spyke's Grove that it should not ship the

fruit; Mr. Kulick assumed that Spyke's Grove would contact him

if it intended to ship the fru it ordered by Carlyn's.

9. Spyke's Grove sent numerous invoices and statements of

account to Carlyn's Regarding the gift fruit at issue here.

According to the statement of account dated June 1, 2001, as of

that date Carlyn's owed Spyke's Grove $1,069.78 for the gift

fruit at issue here.

10. Most of the invoices to Carlyn's that were submitted

by Spyke's Grove contain the following: "Terms: Net 14 days

prompt payment is expected and appreciated. A 1½% monthly

service charge (A.P.R. 18% per annum) may b e charged on all past

due accounts. . . ." Relying on this language, Spyke's Grove

also seeks to recover a monthly service charge for each month

that Carlyn's account was past due.

11. Carlyn's does not dispute Spyke's Grove's claim that

$1,069.78 worth of "gift fruit" was shipped by Spyke's Grove

pursuant to orders Carlyn's placed in November and

December 1999. Carlyn's' basic position is that it need not pay

Spyke's Grove for the fruit because Spyke's Grove did not notify

it after the December 12, 1999 , fire that it would ship the

orders and because Carlyn's had to make sure that its customers'

orders were filled.

12. The uncontroverted evidence establishes that Carlyn's

was, at the times material to this proceeding, a Florida -

licensed and bonded citru s fruit dealer; that, in November and

December 1999, Carlyn's submitted orders to Spyke's Grove for

the shipment of "gift fruit" consisting of oranges and

grapefruit; that Spyke's Grove shipped all of the "gift fruit"

ordered by Carlyn's in November and De cember 1999; that the

price of the "gift fruit" shipped by Spyke's Grove pursuant to

Carlyn's' orders totaled $1,069.78; and that Spyke's Grove

timely filed its complaint alleging that Carlyn's failed to

promptly pay its indebtedness to Spyke's Grove for c itrus

products shipped pursuant to orders placed by Carlyn's. Spyke's

Grove is, therefore, entitled to payment of the principal amount

of $1,069.78, plus pre - judgment interest. Based on the date of

the last invoice which contained a charge for any of the gift

fruit at issue here, the prehearing interest would run from

May 1, 2000.

CONCLUSIONS OF LAW

13. The Division of Administrative Hearings has

jurisdiction over the subject matter of this proceeding and of

the parties thereto pursuant to Sections 120. 569 and 120.57(1),

Florida Statutes.

14. Spyke's Grove has the burden of proving the

allegations in its complaint against Carlyn's by a preponderance

of the evidence. See Florida Department of Transportation v.

J.W.C. Co., Inc. , 396 So. 2d 778, 788 (Fla. 1st DCA 1981);

Florida Department of Health and Rehabilitative Services v.

Career Service Commission , 289 So. 2d 412, 415 (Fla. 4th DCA

1974); Section 120.57(1)(j), Florida Statutes. However, even

though Spyke's Grove has the ultimate burden of proving t he

truth of the claim, once it has made a prima facie case of

entitlement to recover from Carlyn's, Carlyn's has the

obligation to come forward with evidence to refute the

entitlement. See J.W.C. , 396 So. 2d at 787.

15. Chapter 601, Florida Statutes, is known as "The

Florida Citrus Code of 1949." Section 601.01, Florida Statutes.

"Citrus fruit" is defined in Section 601.03(7), Florida

Statutes, as

all varieties and regulated hybrids of

citrus fruit and also means processed citrus

products containing 20 percent or more

citrus fruit or citrus fruit juice, but, for

the purposes of this chapter, shall not mean

limes, lemons, marmalade, jellies,

preserves, candies, or citrus hybrids for

which no specific standards have been

established by the Department of Ci trus.

Grapefruit and oranges are "citrus fruit" pursuant to this

definition.

16. A "citrus fruit dealer" is defined in

Section 601.03(8), Florida Statutes, as:

any consignor, commission merchant,

consignment shipper, cash buyer, broker,

association, coop erative association,

express or gift fruit shipper, or person who

in any manner makes or attempts to make

money or other thing of value on citrus

fruit in any manner whatsoever, other than

of growing or producing citrus fruit, but

the term shall not includ e retail

establishments whose sales are direct to

consumers and not for resale or persons or

firms trading solely in citrus futures

contracts on a regulated commodity exchange.

Carlyn's is a "citrus fruit dealer" under this definition.

17. Citrus fruit d ealers are required to be licensed by

the Department in order to transact business in Florida.

Section 601.55(1), Florida Statutes. As a condition of

obtaining a license, such dealers are required to provide a cash

bond or a certificate of deposit or a s urety bond in an amount

to be determined by the Department "for the use and benefit of

every producer and of every citrus fruit dealer with whom the

dealer deals in the purchase, handling, sale, and accounting of

purchases and sales of citrus fruit." Sect ion 601.61(3),

Florida Statutes. Carlyn's is licensed and bonded pursuant to

Florida law.

18. Section 601.64(4), Florida Statutes, defines as an

"unlawful act" by a citrus fruit dealer the failure to "make

full payment promptly in respect of any such tra nsaction [the

purchase, handling, sale or accounting of sales] in any such

citrus fruit to the person with whom such transaction is had, or

to fail or refuse on such account to make full payment of such

amounts as may be due thereon."

19. Section 601.65, Florida Statutes, provides that "[I]f

any licensed citrus fruit dealer violates any provision of this

chapter, such dealer shall be liable to the person allegedly

injured thereby for the full amount of damages sustained in

consequence of such violation." This liability may be

adjudicated in an administrative action brought before the

Department or in a "judicial suit at law in a court of competent

jurisdiction." Id.

20. Any person may file a complaint with the Department

alleging a violation of the provi sions of Chapter 601, Florida

Statutes, by a citrus fruit dealer. Section 601.66(1), Florida

Statutes. The Department is charged with the responsibility of

determining whether the allegations of the complaint have been

established and adjudicating the am ount of indebtedness or

damages owed by the citrus fruit dealer. Section 601.66(5),

Florida Statutes. The Department shall "fix a reasonable time

within which said indebtedness shall be paid by the [citrus

fruit] dealer," and, if the dealer does not pay within the time

specified by the Department, the Department shall obtain payment

of the damages from the dealer's surety company, up to the

amount of the bond. Section 601.66(5) and (6), Florida

Statutes.

21. Based on the findings of fact herein, Spyke's Grove

has met its burden of proving that Carlyn's was indebted to

Spyke's Grove in the principal amount of $1,069.78 from May 1,

2000, and that the debt remains unpaid.

22. Spyke's Grove also seeks to recover monthly "finance

charges" of one and one - half percent of the balance. However,

such "finance charges" should not be included in the calculation

of Carlyn's' indebtedness to Spyke's Grove because they are not

part of the amounts owed to Spyke's Grove for shipping the "gift

fruit" ordered by Carlyn's. Rather, because the claims of

Spyke's Grove are based in contract, see Florida Fruit Sales,

Inc. v. Kingfisher Groves , 343 So. 2d 840 (Fla. 2d DCA 1976),

Spyke's Grove is entitled to pre - judgment interest if the

Department determines that Carlyn's is ind ebted to Spyke's

Grove, to be calculated on the amount of the indebtedness from

the date payment was due until the Department enters its final

order. See Celotex Corp. v. Buildex, Inc. , 476 So. 2d 294, 295

(Fla. 3d DCA 1985)("The settled law is that where a disputed

contractual claim becomes liquidated . . . as to the amounts

recoverable, interest should be awarded from the date payment

was due."); Cooper v. Alford , 477 So. 2d 31, 31 (Fla. 1st DCA

1985)("In an action ex contractu , interest runs from the da te a

liquidated debt is due. This is so even if there exists an

honest dispute as to whether the debt was in fact due. Once it

is finally determined the debt was due, the person to whom it

was owed is entitled to payment of the principal plus interest

fr om the due date. . . . The purpose in awarding such interest

is to compensate a party for deprivation of property.").

23. The evidence establishes that there was no written

contract governing the dealings between Spyke's Grove and

Carlyn's. Spyke's Grov e is, therefore, not entitled to recover

interest on the amount owing at the rate of 18 percent per annum

as stated in the invoices. Rather, the amount of pre - judgment

interest payable to Spyke's Grove is the statutory rate

specified in Section 55.03, Flo rida Statutes. See

Section 687.01, Florida Statutes; Celotex , 476 So. 2d at 295 - 96

("It is undisputed that invoices sent to Buildex over the course

of dealings with the parties contained a statement that

'interest will be charged at the rate of 1 1/2% per month or 18%

per annum on all past due accounts.' No proof was presented

however, that the parties ever agreed in writing that interest

shall accrue at 18% per annum."). Accord Nelson v. Ameriquest

Technologies, Inc. , 739 So. 2d 161 (Fla. 3d DCA 1999).

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is RECOMMENDED that the Department of Agriculture and

Consumer Services enter a final order ordering Carlyn R. Kulick,

d/b/a Carlyn's, to pay $1,069.78 to Spyke's Grove, Inc ., d/b/a

Fresh Fruit Express, Emerald Estate, Nature's Classic, together

with pre - judgment interest calculated at the rate specified in

Section 55.03, Florida Statutes, on the amounts owing.

DONE AND ENTERED this 1st day of November, 2001, in

Tallahassee, Leon County, Florida.

___________________________________

MICHAEL M. PARRISH

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399 - 3060

(850) 488 - 9675 SUNCOM 278 - 9675

Fax Filing (850) 921 - 6847

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 1st day of November, 2001.

COPIES FURNISHED:

Carlyn R. Kulick, Owner

Carlyn's

1601 Fifth Avenue, North

St. Petersburg, Florida 33713

Barbara Spiece, President

Spyke's Grove, Inc.

7250 Griffin Road

Davie, Florida 33314

Western Surety Company

Post Office Box 5077

Sioux Falls , South Dakota 57117

Honorable Charles H. Bronson

Commissioner of Agriculture

Department of Agriculture and

Consumer Services

The Capitol, Plaza Level 10

Tallahassee, Florida 32399 - 0810

Richard Ditschler, General Counsel

Department of Agriculture and

Consumer Services

The Capitol, Plaza Level 10

Tallahassee, Florida 32399 - 0810

Brenda D. Hyatt, Bureau Chief

Bureau of License and Bond

Department of Agriculture and

Consumer Services

541 East Tennessee Street

India Building

Tallahassee, Florida 32308

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have 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 Fin al Order in this case.