01-002846 Spyke`s Grove, Inc., D/B/A Fresh Fruit Express, Emerald Estate, Nature`s Classic vs. Alilev Corporation, D/B/A Bay Harbor Fine Foods And Travelers Casualty &Amp; Surety Company Of America Status: Closed Recommended Order on Tuesday, October 2, 2001.

Summary: Petitioner proved entitlement to payment for citrus fruit shipped pursuant to orders submitted by citrus fruit dealer Respondent, and Department should enter order requiring Respondent to pay balance owing, plus pre-judgment interest.

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. 01-2846A

)

ALILEV CORPORATION, d/b/a BAY )

HARBOR FINE FOODS, AND TRAVELERS )

CASUALTY & SURETY COMPANY )

OF AMERICA , )

)

Respondents. )

_________________________________)

RECOMMENDED ORDER

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

on August 29, 2001, by video teleconference, with the parties

appearing in Fort Lauderdale, Florida, before Patricia Hart

Malono, a duly-designated Administrative Law Judge 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 Alilev Corporation/Bay Harbor Fine Foods:

Arthur C. Bergen, Owner

Alilev Corporation

1077 95th Street

Bay Harbor, Florida 33154

For Respondent Traveler's Casualty & Surety Company:

No appearance.

STATEMENT OF THE ISSUE

Whether the Respondent Alilev Corporation failed to pay

amounts owing to the Petitioner for the shipment of citrus

fruit, as set forth in the Complaint dated April 30, 2001, and,

if so, the amount the Petitioner is entitled to recover.

PRELIMINARY STATEMENT

On or about April 30, 2001, the Spyke's Grove, d /b/a Fresh

Fruit Express ("Fresh Fruit Express"), filed a Complaint with

the Department of Agriculture and Consumer Services

("Department") alleging that Alilev Corporation, d/b/a Bay

Harbor Fine Foods ("Bay Harbor Fine Foods"), had failed to pay

Fresh Fruit Express for "gift fruit" that it had shipped during

the 1999-2000 citrus shipping season pursuant to instructions

from Bay Harbor Fine Foods. Fresh Fruit Express alleged that

Bay Harbor Fine Foods owed $1,034.62 for the "gift fruit" in

questionaveler's Casualty & Surety Company of America was

named in the Complaint as the surety for Bay Harbor Fine Foods.

On or about July 5, 2001, Arthur C. Bergen, as an owner of

Bay Harbor Fine Foods, filed an answer on behalf of Bay Harbor

Fine Foods denying that it was indebted to Fresh Fruit Express

and requesting a hearing. The Department duly forwarded the

matter to the Division of Administrative Hearings for assignment

of an administrative law judge. Pursuant to notice, the final

hearing was held on August 29, 2001. At the hearing, Barbara

Spiece testified on behalf of Fresh Fruit Express, and

Petitioner's Exhibits 1 through 11 were offered and received

into evidence. Arthur C. Bergen testified on behalf of Bay

Harbor Fine Foods, and Respondent's Exhibits 1 and 2 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

filed on or before September 12, 2001. On August 31, 2001, and

September 6, 2001, respectively, Bay Harbor Fine Foods and Fresh

Fruit Express filed their proposals, which have been considered

in the preparation of this Recommended Order.

FINDINGS OF FACT

Based on the oral and documentary evidence presented at the

final hearing and on the entire record of this proceeding, the

following findings of fact are made:

1. At all times material to this proceeding, Fresh Fruit

Express and Bay Harbor Fine Foods were "citrus fruit dealers"

licensed by the Department.

2. Bay Harbor Fine Foods is a retail grocery store. As

part of its business, it sells to its retail customers "gift

fruit" consisting of oranges and grapefruit for shipment to

third persons identified by the customers. Arthur C. Bergen is

an owner of Bay Harbor Fine Foods and acted on its behalf with

respect to the transactions that are the subject of this

proceeding.

3. Fresh Fruit Express is in the business of packaging and

shipping "gift fruit" consisting of oranges and grapefruit

pursuant to orders placed by other citrus fruit dealers.

Barbara Spiece is the president of Fresh Fruit Express and acted

on its behalf with respect to the transactions that are the

subject of this proceeding.

4. In November and December 1999, Fr esh Fruit Express

received via facsimile transmittal a number of orders for "gift

fruit" from Bay Harbor Fine Foods. Most of the orders were for

single shipments of fruit, although a few orders were for

12 monthly shipments of fruit. This was the first y ear Bay

Harbor Fine Foods had done business with Fresh Fruit Express,

and Bay Harbor Fine Foods and Fresh Fruit Express did not

execute a written contract governing their business

relationship.

5. On the night of Sunday, December 12, 1999, Fresh Fruit

Express's packinghouse was destroyed by fire, and its offices

were substantially damaged. The fire could not have happened at

a worse time because it was at the peak of the holiday fruit-

shipping season. Fresh Fruit Express was able to move into

temporary offices and to obtain the use of a 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 its

had received.

6. Mr. Bergen, the owner of Bay Harbor Fine Foods, learned

of the fire at Fresh Fruit Express and attempted to contact its

offices for an update on the orders Bay Harbor Fine Foods had

placed for shipment during the holidays. Mr. Bergen was unable

to contact anyone at Fresh Fruit Express for three or four days

after the fire, and he was worried that his customers' orders

for "gift fruit" would not be shipped on time. 1 Mr. Bergen

called two other packinghouses and placed orders duplicating

some of the orders Bay Harbor Fine Foods had placed with Fresh

Fruit Express. Mr. Bergen directed these packinghouses to ship

the duplicate orders via expedited Federal Express and United

Parcel Service shipping, and Bay Harbor Fine Foods incurred

extra costs for the expedited shipping.

7. Meanwhile, Fresh Fruit Express was giving priority to

its smaller wholesale customers such as Bay Harbor Fine Foods,

and it shipped all of the orders it had received from Bay Harbor

Fine Foods.

8. Bay Harbor Fine Foods did not cancel its orders with

Fresh Fruit Express or otherwise notify Fresh Fruit Express that

it should not ship the fruit; Mr. Bergen assumed that Fresh

Fruit Express would contact him if it intended to ship the fruit

ordered by Bay Harbor Fine Foods.

9. Fresh Fruit Express prepared invoices for Bay Harbor

Fine Foods dated January 24, 2000, in the amounts of $60.01,

$599.43, and $511.80, respectively, for "gift fruit" shipments

made in November and December 1999; it prepared an invoice for

Bay Harbor Fine Foods dated February 18, 2000, in the amount of

$92.00 for "gift fruit" shipments made in January and

February 2000; it prepared an invoice for Bay Harbor Fine Foods

dated March 21, 2000, in the amount of $69.34 for "gift fruit"

shipments made in February and March 2000; and it prepared an

invoice for Bay Harbor Fine Foods dated April 17, 2000, in the

amount of $44.40 for "gift fruit" shipments made in April 2000.

According to the invoices, Bay Harbor Fine Foods owed Fresh

Fruit Express $1,376.98 as of April 17, 2000.

10. All of the invoices to Bay Harbor Fine Foods that were

submitted by Fresh Fruit Express contain the following: "Terms :

Net 14 days prompt payment is expected and appreciated. A 1½%

monthly service charge ( A.P.R. 18% per annum) may be charged on

all past due accounts. . . ."

11. By late April 2000, Fresh Fruit Express had not

received payment for any of the "gift fruit" shipped pursuant to

the orders placed by Bay Harbor Fine Foods. Ms. Spiece

contacted Bay Harbor Fine Foods in late April 2000 and inq uired

about payment of the amounts owing. Ms. Spiece was told that

Bay Harbor Fine Foods had no invoices from Fresh Fruit Express.

Ms. Spiece sent duplicate invoices to Bay Harbor Fine Foods, and

she called to confirm that the invoices had been received.

12. After several attempts by Fresh Fruit Express to

collect the amounts invoiced to Bay Harbor Fine Foods,

Mr. Bergen tendered a check dated July 11, 2000, to Fresh Fruit

Express on the Bay Harbor Fine Foods account in the amount of

$591.90. The check was accompanied by a letter signed by

Mr. Bergen, in which he stated:

Enclosed is a check in the amount of

$591.90 covering the shipments that we know

were not duplicated due to your fire in late

December .

This amount reflects a deduction of

$341.95 in freight charges paid by us to

U.P.S. and Fed. Ex. to make our promised

Christmas deadline.

13. In the statement attached to the complaint filed with

the Department, Fresh Fruit Express claims that Bay Harbor Fine

Foods owes it a total of $1,034.62, which amount includes a

credit for the $591.90 paid by Bay Harbor Fine Foods in

July 2000 and amounts shown as "Finance" charges for the months

of February 2000 through April 2001.

14. Bay Harbor Fine Foods does not dispute Fresh Fruit

Express's claim that $1,376.98 worth of "gift fruit" was shipped

by Fresh Fruit Express pursuant to orders Bay Harbor Fine Foods

placed in November and December 1999. Bay Harbor Fine Foods'

position is that it need not pay Fresh Fruit Express for the

fruit because Fresh Fruit Express did not notify it after the

December 12, 1999, fire that it would ship the orders and

because Bay Harbor Fine Foods had to make sure that its

customers' orders were filled.

15. The uncontroverted evidence establishes that Bay

Harbor Fine Foods was, at the times material to this proceeding,

a Florida-licensed and -bonded citrus fruit dealer; that, in

November and December 1999, Bay Harbor Fine Foods submitted

orders to Fresh Fruit Express for the shipment of "gift fruit"

consisting of oranges and grapefruit; that Fresh Fruit Express

shipped all of the "gift fruit" ordered by Bay Harbor Fine Foods

in November and December 1999; that the price of the "gift

fruit" shipped by Fresh Fruit Express pursuant to Bay Harbor

Fine Foods' orders totaled $1,376.98; that Bay Harbor Fine Foods

paid Fresh Fruit Express $591.90 on its account on July 11,

2000; and that Fresh Fruit Express timely filed its complaint

alleging that Bay Harbor Fine Foods failed to promptly pay its

indebtedness to Fresh Fruit Express for citrus products shipped

pursuant to orders placed by Bay Harbor Fine Foods. Fresh Fruit

Express is, therefore, entitled to payment of the principal

amount of $785.08, plus pre-judgment interest.

16. Fresh Fruit Express presented no evidence to establish

that it actually sent the invoices to Bay Harbor Fine Foods on

or about the dates stated on the invoices. Therefore, payment

of the $1,376.98 was due on May 1, 2000, after Ms. Spiece sent

duplicate invoices to Bay Harbor Fine Foods and confirmed that

they had been received, and pre-judgment interest on this amount

would begin accruing on May 1, 2000. The payment of $591.90 on

July 11, 2000, reduced the principal balance owing to Fresh

Fruit Express to $785.08, and pre-judgment interest on this

amount would begin accruing on July 12, 2000.

CONCLUSIONS OF LAW

17. 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 (2000).

18. Fresh Fruit Express has the burden of proving the

allegations in its complaint against Bay Harbor Fine Foods 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 Fresh Fruit Express has the ultimate burden of

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

case of entitlement to recover from Bay Harbor Fine Foods, Bay

Harbor Fine Foods has the obligation to come forward with

evidence to refute the entitlement. See J.W.C. , 396 So. 2d at

787.

19. Chapter 601, Flor ida 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 Citrus.

Grapefruit and oranges are "citrus fruit" pursuant to this

definition.

20. A "citrus fruit dealer" is defined in

Section 601.03(8), Florida Statutes, as:

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.

Bay Harbor Fine Foods is a "citrus fruit dealer" under this

definition.

21. Citrus fruit dealers 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 surety 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." Section 601.61(3),

Florida Statutes. Based on the findings of fact herein, Bay

Harbor Fine Foods is licensed and bonded pursuant to Florida

law.

22. 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 transaction [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."

23. 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.

24. Any person may file a complaint with the Department

alleging a violation of the provisions 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 amount 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.

25. Based on the findings of fact herein, Fresh Fruit

Express has met its burden of proving that Bay Harbor Fine Foods

was indebted to Fresh Fruit Express in the principal amount of

$1,376.98 from May 1, 2000, through July 1 1, 2000, and in the

principal amount of $785.08 ($1,376.98 - $591.90) subsequent to

July 11, 2000.

26. Fresh Fruit Express included monthly "finance charges"

of one and one-half percent of the balance owing as part of the

$1,034.62 that it seeks to recover from Bay Harbor Fine Foods.

However, such "finance charges" should not be included in the

calculation of Bay Harbor Fine Foods' indebtedness to Fresh

Fruit Express because they are not part of the amounts owed

Fresh Fruit Express for shipping the "gift fruit" ordered by Bay

Harbor Fine Foods.

27. Rather, because the claims of Fresh Fruit Express are

based in contract, see Florida Fruit Sales, Inc. v. Kingfisher

Groves , 343 So. 2d 840 (Fla. 2d DCA 1976), Fresh Fruit Express

is entitled to pre-judgment interest if the Department

determines that Bay Harbor Fine Foods is indebted to Fresh Fruit

Express, 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 date 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

from the due date. . . . The purpose in awarding such interest

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

28. The evidence establishes that there was no written

contract governing the dealings between Fresh Fruit Express and

Bay Harbor Fine Foods. Fresh Fruit Express 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 Fresh Fruit Express

is the statutory rate specified in Section 55.03, Florida

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 Alilev

Corporation, d/b/a Bay Harbor Fine Foods, to pay $785.08 to

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

and 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 2nd day of October, 2001, in

Tallahassee, Leon County, Florida.

___________________________________

PATRICIA HART MALONO

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 2nd day of October, 2001.

ENDNOTE

1 / Fresh Fruit Express did not offer into evidence all of the

orders it received from Bay Harbor Fine Foods, but Petitioner's

Composite Exhibit 9 contains five of the nine orders Bay Harbor

Fine Foods placed. The Bay Harbor Fine Foods' order form

contains several choices for when the shipment of fruit was to

arrive: "Soon as possible"; " Honeybell season"; "Thanksgiving";

"Christmas"; "Hanukkah"; and "Arrive week beginning Monday: ".

With the exception of one order form on which it was noted that

the two shipments should arrive by "Thanksgiving," the order

forms either had no "Ship to arrive" choice marked or "Soon as

possible" was the "Ship to arrive" choice indicated.

COPIES FURNISHED:

Alilev Corporation

1077 95th Street

Bay Harbor, Florida 33154

Spyke's Grove, Inc.

7250 Griffin Road

Davie, Florida 33314

Travelers Casualty and

Surety Company

One Tower Square

Hartford, Connecticut 06183

Honorable Terry L. Rhodes

Commissioner of Agriculture

Department of Agriculture and

Consumer Services

The Capital, Plaza Level 10

Tallahassee, Florida 32399-0810

Richard D. Tritschler, General Counsel

Department of Agriculture and

Consumer Services

The Capital, 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

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.