01-002811 Spyke`s Grove, Inc., D/B/A Fresh Fruit Express, Emerald Estate, Nature`s Classic vs. A And J Pak Ship, Inc. And Old Republic Surety Company Status: Closed Recommended Order on Wednesday, September 12, 2001.

Summary: Recommendation made that complaint against citrus fruit dealer seeking payment for "gift fruit" be dismissed where complainant failed to provide proof that it had, in accordance with agreement, delivered gift fruit to intended recipients.

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. 01-2811A

)

A & J PAK SHIP, INC., and OLD )

REPUBLIC SURETY COMPANY, )

)

Respondents. )

_________________________________)

RECOMMENDED ORDER

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

accordance with Section 120.57(1), Florida Statutes, on

August 29, 2001, by video teleconference at sites in Fort

Lauderdale and Tallahassee, Florida, before Stuart M. Lerner, a

duly-designated Administrative Law Judge of the Division of

Administrative Hearings.

APPEARANCES

For Petitioner : Barbara Spiece, Owner

Spyke's Grove, Inc.

7250 Griffin Road

Davie, Florida 33314

For Respondent A & J Pak Ship, Inc:

Scott A. Wiley, President

A & J Pak Ship, Inc.

1616 West Cape Coral Parkway

No. 102

Cape Coral, Florida 33914

For Respondent Old Republic Surety Company:

No Appearance

STATEMENT OF THE ISSUE

Whether Respondent A & J Pak Ship, Inc., owes Petitioner

$551.16 for "gift fruit,” as alleged in Petitioner's Complaint.

PRELIMINARY STATEMENT

On or about April 30, 2001, Petitioner filed a Complaint

with the Department of Agriculture and Consumer Services

(Department) alleging that A & J Pak Ship, Inc. (A & J) had

failed to pay Petitioner for "gift fruit" that Petitioner had

shipped in accordance with A & J's instructions. According to

the Complaint, A & J owed Petitioner a total of $551.16 for the

“gift fruit” in question. Old Republic Surety Company (Old

Republic) was identified in the Complaint as the surety for

A & J.

On or about June 27, 2001, A & J filed with the Department

an answer to Petitioner's Complaint denying that it was indebted

to Petitioner.

On July 16, 2001, the Department referred the matter to the

Division of Administrative Hearings to conduct a "formal

hearing" in accordance with Section 601.66, Florida Statutes.

On July 24, 2001, Old Republic advised the Division in

writing that it would "look to [A & J] to handle the matter and

represent it" in the proceedings before the Division.

As noted above, the final hearing in this case was held on

August 29, 2001. Two witnesses testified at the hearing.

Barbara Spiece, the owner of Petitioner, testified on behalf of

Petitioner. Scott A. Wiley, A & J's president, testified on

behalf of A & J. In addition to Ms. Spiece's and Mr. Wiley's

testimony, the following exhibits were offered and received into

evidence : Petitioner's Exhibits 1 through 7, 9 through 15, 20,

21, and 23 through 25, and Respondent's Exhibits A, A-1, B, B-1,

C, D, F, and G.

At the close of the evidentiary portion of the hearing, the

undersigned announced on the record that proposed recommended

orders had to be filed no later than September 12, 2001.

On September 5, 2001, and September 6, 2001, respectively,

A & J and Petitioner filed their Proposed Recommended Orders.

These post-hearing submittals have been carefully considered by

the undersigned.

FINDINGS OF FACT

Based upon the evidence adduced at the final hearing and

the record as a whole, the following findings of fact are made:

1. At all times material to the instant case, Petitioner

and A & J have been licensed by the Department of Citrus as

"citrus fruit dealers."

2. As part of its operations, A & J sells "gift fruit" to

retail customers. The "gift fruit" consists of oranges or

grapefruits, or both, that are packaged and sent to third

parties identified by the customers.

3. In November and December of 1999, A & J took orders for

"gift fruit" from retail customers that it contracted with

Petitioner (doing business as Fresh Fruit Express) to fill.

Under the agreement between A & J and Petitioner (which was not

reduced to writing), it was Petitioner's obligation to make sure

that the "gift fruit" specified in each order was delivered, in

an appropriate package, to the person or business identified in

the order as the intended recipient at the particular address

indicated in the order.

4. Among the intended recipients identified in the orders

that Petitioner agreed to fill were : the Uthe family, the

Weckbachs, Mr. and Mrs. T. Martin, Angelo's, Susan Booth,

Mr. and Mrs. E. Coello, Mr. and Mrs. Dalbey, Carol Baker and

family, the Tarvin family, Shelly and Mark Koontz, Pamela

McGuffey, Jerome Melrose, Russell Oberer, Mrs. Josephine Scelfo,

Curt and Becky Tarvin, Heidi Wiseman, Kay and Artie Witt, and

the William Woodard family, who collectively will be referred to

hereinafter as the "Intended Recipients in Question."

5. A & J agreed to pay Petitioner a total of $438.18 to

provide "gift fruit" to the Intended Recipients in Question,

broken down as follows: $21.70 for the Uthe family order,

$21.70 for the Weckbachs order, $22.82 for the Mr. and Mrs. T.

Martin order, $27.09 for the Angelo's order, $21.70 for the

Susan Booth order, $31.67 for the Mr. and Mrs. E. Coello order,

$17.50 for the Mr. and Mrs. Dalbey order, $21.70 for the Carol

Baker and family order, $27.09 for the Tarvin family order,

$21.70 for the Shelly and Mark Koontz order, $21.70 for the

Pamela McGuffey order, $32.44 for the Jerome Melrose order,

$21.70 for the Russell Oberer order, $17.60 for the

Mrs. Josephine Scelfo order, $21.70 for the Curt and Becky

Tarvin order, $17.50 for the Heidi Wiseman order, $17.50 for the

Kay and Artie Witt order, and $31.67 for the William Woodard

family order.

6. All of these orders, which will be referred to

hereinafter as the "Intended Recipients in Question 'gift fruit'

orders," were to be delivered, under the agreement between A & J

and Petitioner, by Christmas day, 1999.

7. On Sunday night, December 12, 1999, fire destroyed

Petitioner's packing house and did considerable damage to

Petitioner's offices.

8. With the help of others in the community, Petitioner

was able to obtain other space to house its offices and packing

house operations. By around noon on Tuesday, December 14, 1999,

Petitioner again had telephone service, and by Friday,

December 17, 1999, it resumed shipping fruit.

9. Scott Wiley, A & J's President, who had learned of the

fire and had been unsuccessful in his previous attempts to

contact Petitioner, was finally able to reach Petitioner by

telephone on Monday, December 20, 1999. After asking about the

status of the Intended Recipients in Question “gift fruit”

orders and being told by the employee with whom he was speaking

that she was unable to tell him whether or not these orders had

been shipped, Mr. Wiley advised the employee that A & J was

"cancelling" all "gift fruit" orders that had not been shipped

prior to the fire. Mr. Wiley followed up this telephone

conversation by sending, that same day, the following facsimile

transmission to Petitioner:

As per our conversation on 12-20-99, please

cancel all orders sent to you from A & J

Pak-Ship (Fresh Fruit Express).

After trying to contact your company

numerous times on December 13, I called the

Davie Police Department, who [sic] informed

me that you had experienced a major fire. I

tried to contact you daily the entire week

with no luck. Since I had no way to contact

you, it was your responsibility to contact

me with information about your business

status. Without that contact, I had to

assume that you were unable to continue

doing business. With Christmas fast

approaching and with no contact from anyone

on your end, I had no choice but to begin to

issue refunds. While I understand the fire

was devastating for you, understand that my

fruit business is ruined, and will take

years to reestablish.

Please note that I will not pay for any

orders shipped past the date of your fire,

12-13-99, as I have already issued refunds,

and I will need proof of delivery for all

those orders delivered before the fire.

Again, cancel all orders including the

remainder of multi-month packages, and

honeybell orders.

Your lack of communication has put me in a

very bad situation with my customers. One

short phone call to me could have avoided

all this difficulty. Had I not tried your

phone on 12-20, I would still have no

information from you.

10. Petitioner did not contact Mr. Wiley and tell him

about the fire because it did not think that the fire would

hamper its ability to fulfill its obligations under its

agreement with A & J.

11. By the time Mr. Wiley made telephone contact with

Petitioner on Monday, December 20, 1999, Petitioner had already

shipped (that is, placed in the possession of a carrier and made

arrangements for the delivery of) all of the Intended Recipients

in Question "gift fruit" orders (although it had not notified

A & J it had done so).

12. Petitioner did not ship any A & J "gift fruit" orders

after receiving Mr. Wiley's December 20, 1999, telephone call.

13. On or about February 18, 2000, Petitioner sent A & J

an invoice requesting payment for "gift fruit" orders it had

shipped for A & J. Among the orders on the invoice for which

Petitioner was seeking payment were the Intended Recipients in

Question "gift fruit" orders (for which Petitioner was seeking

$438.18). The invoice erroneously reflected that all of these

orders had been shipped on December 25, 1999. They, in fact,

had been shipped on December 18, 1999, or earlier. 1/

14. Mr. Wiley, acting on behalf of A & J, wrote a check in

the amount of $858.26, covering all of the invoiced orders

except the Intended Recipients in Question "gift fruit" orders,

and sent it to Petitioner, along with the following letter dated

February 22, 1999:

As per my conversation on 12/20/90 at 11:20

a.m. with Yvette we cancelled all orders

shipped after the fire, and also followed up

with a certified letter.

We had to reorder all of those orders and

also refunded a lot of orders as they were

not there in time for Xmas as all orders are

required to arrive before Xmas.

As I said in my certified letter to you it

was a[n] unfortunate fire but all you had to

do was to inform me what was going on and we

could have worked something out. Our fruit

business has been ruined by this incident,

and quite possibly our entire company. It

is unbelievable that more than sixty days

after the fire we still have had no

correspondence from you whatsoever.

We have deducted those orders that were

cancelled and arrived well after Xmas and

remitted the remainder.

15. A & J has not yet paid Petitioner the $438.18 for the

Intended Recipients in Question "gift fruit" orders.

CONCLUSIONS OF LAW

16. Chapter 601, Florida Statutes, is known as the "The

Florida Citrus Code of 1949" (Code). Section 601.01, Florida

Statutes.

17. The Code, among other things, regulates the activities

of "citrus fruit dealers."

18. "Citrus fruit," as that term is used in the Code, is

defined in Section 601.03(7), Florida Statutes, as follows:

"Citrus fruit" means 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 Citrus[.]

Grapefruit and oranges are "citrus fruit," as defined in Section

601.03(7), Florida Statutes.

19. A "citrus fruit dealer," as that term is used in the

Code, is defined in Section 601.03(8), Florida Statutes, as

follows:

"Citrus fruit dealer" means any consignor,

commission merchant, consignment shipper,

cash buyer, broker, association, cooperative

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 include 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[.]

20. Pursuant to Section 601.55(1), Florida Statutes, a

"citrus fruit dealer," as defined in Section 601.03(8), Florida

Statutes, must be licensed by the Department of Citrus to

transact business in the State of Florida. At all times

material to the instant case, Petitioner and A & J were "citrus

fruit dealers," as defined in Section 601.03(8), Florida

Statutes, and were licensed as required by Section 601.55(1),

Florida Statutes.

21. With certain exceptions not applicable to the instant

case, "prior to the approval of a citrus fruit dealer's license,

the applicant therefor must deliver to the Department of

Agriculture and Consumer Services a good and sufficient cash

bond, appropriate certificate of deposit, or a surety bond

executed by the applicant as principal and by a surety company

qualified to do business in this state as surety, in an amount

as determined by the Department of Citrus." Section 601.61(1),

Florida Statutes.

22. "Said bond shall be to the Department of Agriculture

[and Consumer Services], 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." Section 601.61(3),

Florida Statutes.

23. Section 601.64, Florida Statutes, describes "unlawful

acts" in which "citrus fruit dealers" may not engage "in

connection with, any transaction relative to the purchase,

handling, sale, and accounting of sales of citrus fruit." Among

these "unlawful acts" is the failure to "make full payment

promptly in respect of any such transaction in any such citrus

fruit to the person with whom such transaction is had." Section

601.64(4), Florida Statutes.

24. "Any person may complain of any violation of any of

the provisions of [the Code] by any citrus fruit dealer during

any shipping season, by filing of a written complaint with the

Department of Agriculture and Consumer Services at any time

prior to May 1 of the year immediately following the end of such

shipping season." Section 601.66(1), Florida Statutes.

25. A hearing held in accordance with Section 120.57(1),

Florida Statutes, on the complaint must be conducted if there

are disputed issues of material fact. The complainant has the

burden of proving the allegations of the complaint by a

preponderance of the evidence. See Department of Banking and

Finance, Division of Securities and Investor Protection v.

Osborne Stern and Company , 670 So. 2d 932, 935 (Fla. 1996) ("'The

general rule is that a party asserting the affirmative of an

issue has the burden of presenting evidence as to that issue'");

Florida Department of Transportation v. J.W.C. Company, 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); and Section

120.57(1)(j), Florida Statutes ("Findings of fact shall be based

upon a preponderance of the evidence, except in penal or

licensure disciplinary proceedings or except as otherwise

provided by statute. . . .").

26. If the Department determines that the complainant has

met its burden of proof, the Department must "make its findings

of fact accordingly and thereupon adjudicate the amount of

indebtedness or damages due to be paid by the dealer to the

complainant. The administrative order [must] fix a reasonable

time within which said indebtedness shall be paid by the

dealer." Section 601.66(5), Florida Statutes.

27. If the dealer fails to comply with the order, the

Department must "call upon the surety company to pay over to the

Department of Agriculture and Consumer Services, out of the bond

theretofore posted by the surety for such dealer, the amount of

damages sustained but not exceeding the amount of the bond. The

proceeds to the Department of Agriculture and Consumer Services

by the surety company shall, in the discretion of the Department

of Agriculture and Consumer Services, be either paid to the

original complainant or held by the Department of Agriculture

and Consumer Services for later disbursement, depending upon the

time during the shipping season when the complaint was made,

when liability was admitted by the dealer, when the proceeds

were so paid by the surety company to the Department of

Agriculture and Consumer Services, the amount of other claims

then pending against the same dealer, the amount of other claims

already adjudicated against the dealer, and such other pertinent

facts as the Department of Agriculture and Consumer Services in

its discretion may consider material." Section 601.66(6),

Florida Statutes.

28. If the surety company fails to comply with the

Department's demand for payment, the Department must "within a

reasonable time file in the Circuit Court in and for Polk

County, an original petition or complaint setting forth the

administrative proceedings before the Department of Agriculture

[and Consumer Services] and ask for final order of the court

directing the surety company to pay the proceeds of the said

bond to the Department of Agriculture for distribution to the

claimants." Section 601.66(7), Florida Statutes.

29. In the instant case, Petitioner timely filed a

Complaint against A & J pursuant to Section 601.66, Florida

Statutes, alleging that A & J owed Petitioner $551.16 for "gift

fruit" it had shipped for A & J during the 1999-2000 shipping

season, an allegation that, in A & J's subsequently filed answer

to the Complaint, A & J disputed. After receiving A & J's

answer, the Department referred the matter to the Division for a

Section 120.57(1), Florida Statutes, hearing.

30. At the hearing, it was Petitioner’s burden to prove

A & J’s indebtedness by a preponderance of evidence.

31. Petitioner failed to meet its burden of proof.

32. Under its agreement with A & J, Petitioner was

responsible for the delivery of the Intended Recipients in

Question "gift fruit" orders to the Intended Recipients in

Question at the locations specified in the orders. 2/

Accordingly, to show its entitlement to the relief requested in

its Complaint, it was incumbent upon Petitioner to establish, by

a preponderance of evidence, that such delivery was made.

33. Petitioner, however, failed to establish that any of

the orders were delivered in accordance with its agreement with

A & J. 3/

34. Its Complaint, therefore, must be dismissed.

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions

of Law, it is hereby

RECOMMENDED that the Department enter a final order

dismissing Petitioner’s Complaint.

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

Tallahassee, Leon County, Florida.

__________________________ _________

STUART M. LERNER

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

(850) 488- 9675 SUNCOM 278-9675

Fax Filing [phone]

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 12th day of September, 2001.

ENDNOTES

1/ The record, however, is devoid of any competent substantial

evidence that these orders were actually delivered to and

received by the Intended Recipients in Question.

2/ The agreement was a "destination contract," not a "shipment

contract," as those terms are used in the Uniform Commercial

Code. (If it were a "shipment contract," Petitioner would have

been obligated to "promptly notify" A & J of the shipment of the

Intended Recipients in Question "gift fruit" orders, which

Petitioner did not do.) See Pestana v. Karinol Corporation , 367

So. 2d 1096 (Fla. 3d DCA 1979)( "There are two types of sales

contracts under Florida's Uniform Commercial Code wherein a

carrier is used to transport the goods sold : a shipment

contract and a destination contract. A shipment contract is

considered the normal contract in which the seller is required

to send the subject goods by carrier to the buyer but is not

required to guarantee delivery thereof at a particular

destination. Under a shipment contract, the seller, unless

otherwise agreed, must: (1) put the goods sold in the

possession of a carrier and make a contract for their

transportation as may be reasonable having regard for the nature

of the goods and other attendant circumstances, (2) obtain and

promptly deliver or tender in due form any document necessary to

enable the buyer to obtain possession of the goods or otherwise

required by the agreement or by usage of the trade, and (3)

promptly notify the buyer of the shipment. . . . A destination

contract, on the other hand, is considered the variant contract

in which the seller specifically agrees to deliver the goods

sold to the buyer at a particular destination and to bear the

risk of loss of the goods until tender of delivery. . . . Under

a destination contract, the seller is required to tender

delivery of the goods sold . . . at the place of destination."

Pestana v. Karinol Corporation , 367 So. 2d 1096 (Fla. 3d DCA

1979).

3/ While Petitioner presented proof that the Intended

Recipients in Question "gift fruit" orders were shipped prior to

Christmas day, 1999, it failed to establish that these orders

were actually delivered to and received by the Intended

Recipients in Question.

COPIES FURNISHED:

Kent Allen

445 South Moorland Road, Suite 301

Brookfield, Wisconsin 53005

Barbara Spiece, Owner

Spyke's Grove, Inc.

7250 Griffin Road

Davie, Florida 33314

Brenda D. Hyatt, Bureau Chief

Department of Agriculture

and Consumer Services

541 East Tennessee Street

India Building

Tallahassee, Florida 32308

Old Republic Surety Company

Post Office Box 4668

Winter Park, Florida 32793-4668

Scott A. Wiley, President

A & J Pak Ship, Inc.

1616 West Cape Coral Parkway

No. 102

Cape Coral, Florida 33914

Richard D. Tritschler, General Counsel

The Capitol, Plaza Level 10

Tallahassee, Florida 32399-0810

Honorable Terry L. Rhodes,

Commissioner of Agriculture

Department of Agriculture and

Consumer Services

The Capitol, Plaza Level 10

Tallahassee, Florida 32399-0810

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 final order in this case.