04-000306 Bayside Sod, Inc. vs. West Florida Irrigation And Landscaping, Inc., And Old Republic Surety Company Status: Closed Recommended Order on Tuesday, March 1, 2005.

Summary: Respondent owes Petitioner for sod puchased by his representative, despite the fact that the representative ultimately defrauded the dealer and the producers.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

SOUTH FLORIDA SOD, INC., )

)

Petitioner, )

)

vs. ) Case No. 04 - 0262

)

WEST FLORIDA IRRIGATION & )

LANDSCAPING, INC., AND OLD )

REPUBLIC SURETY COMPANY, )

)

Respondents. )

)

BAYSIDE SOD, INC., )

)

Petitioner, )

)

vs. ) Case No. 04 - 0306

)

WEST FLORIDA IRRIGATION & )

LANDSCAPING, INC., AND OLD )

REPUBLIC SURETY COMPANY, )

)

Respondents. )

)

RECOMMENDED ORDER

A formal hearing was held pursuant to notice in the

above - styled cases by Lawrence P. Stevenson, assigned

Administrative Law Judge of the Division of Administrative

Hearings, on December 17, 2004, in Bradenton, Florida.

APPEARANCES

For Petitioner South Florida Sod, Inc:

Jeffrey Sullivan, Esquire

Stidham & Stidham, P.A.

Post Office Box 510

Bartow, Florida 33831

For Petitioner Bayside Sod, Inc:

Paul J. Bispham

Bayside Sod, Inc.

7850 Ibis Street

Sarasota, Florida 34241

For Respondent West Florida Irrigation & Landscaping, Inc:

Robert H. Nutter, Esquire

Ferlita, Nutter, Rosello

& Newman, P.A.

610 Azeele Street

Tampa, Florida 33606 - 2273

For Respondent Old Republic Surety Com pany:

No appearance

STATEMENT OF THE ISSUES

DOAH Case No. 04 - 0262: Whether Respondent, West Florida

Landscaping & Landscaping, Inc. ("West Florida Landscaping"),

owes Petitioner, South Florida Sod, Inc. ("South Florida Sod"),

$29,360.80 for the sale of sod during the months of July and

August 2003.

DOAH Case No. 04 - 0306: Whether Respondent, West Florida

Landscaping, owes Petitioner, Bayside Sod, Inc. ("Bayside Sod"),

$18,750.68 for the sale of sod during the month of October 2003.

PRELIMINA RY STATEMENT

On December 5, 2003, South Florida Sod filed an Amended

Producer Complaint with the Department of Agriculture and

Consumer Services (the "Department") alleging that West Florida

Landscaping had failed to pay 43 invoices for various amounts o f

sod for a total of $29,360.80. The Department notified West

Florida Landscaping and its bond surety, Old Republic Surety

Company, of the Amended Producer Complaint by separate letters

dated December 9, 2003. On December 23, 2003, West Florida

Landscapi ng filed a request for an extension of the time in

which to answer the Amended Producer Complaint. By letter dated

December 29, 2003, the Department granted West Florida

Landscaping until January 16, 2004, to answer the Amended

Producer Complaint. On Jan uary 9, 2004, West Florida

Landscaping filed an Answer denying the validity of the Amended

Producer Complaint. West Florida Landscaping asserted that it

did not purchase the agricultural products listed in the

invoices and did not authorize anyone to purc hase those products

on its behalf. West Florida Landscaping stated that the person

who took delivery of the products was not an agent or employee

of West Florida Landscaping and that West Florida Landscaping

did not receive any of the products referred to in the Amended

Producer Complaint. On January 20, 2004, the Department

forwarded the Amended Producer Complaint and the Answer to the

Division of Administrative Hearings ("DOAH") for assignment of

an Administrative Law Judge and conduct of a formal heari ng.

The matter was assigned DOAH Case No. 04 - 0262.

On December 9, 2003, Bayside Sod filed a Producer Complaint

with the Department alleging that West Florida Landscaping had

failed to pay 23 invoices for various amounts of sod for a total

of $17,524.00. On December 23, 2003, Bayside Sod filed an

Amended Producer Complaint to include a 7 percent Florida sales

tax to the amount sought, bringing the total to $18,750.68. The

Department notified West Florida Landscaping and its bond

surety, Old Republic Suret y Company, of the Amended Producer

Complaint by separate letters dated January 6, 2004. On

January 16, 2004, West Florida Landscaping filed its Answer to

Bayside Sod's Amended Producer Complaint. This Answer was

identical to West Florida Landscaping's An swer to South Florida

Sod's Amended Producer Complaint. On January 27, 2004, the

Department forwarded the Amended Producer Complaint and the

Answer to DOAH for assignment of an Administrative Law Judge and

conduct of a formal hearing. The matter was assi gned DOAH Case

No. 04 - 0306.

On February 12, 2004, West Florida Landscaping filed a

motion to consolidate DOAH Case Nos. 04 - 0262, 04 - 0306, and

04 - 0424. 1/ By Order dated February 19, 2004, the cases were

consolidated and were set for hearing on March 30, 20 04.

The final hearing was convened on March 30, 2004. Prior to

the taking of evidence, the parties engaged in settlement

negotiations. They reached a tentative agreement and requested

a period of 60 days in which to finalize matters. By Order

dated Apri l 5, 2004, the cases were placed in abeyance and the

parties directed to file a status report on June 1, 2004.

On June 4, 2004, Paul J. Bispham, a principal of Bayside

Sod, filed a letter notifying the undersigned that the tentative

settlement terms had not been fulfilled and requesting that the

hearing be rescheduled. By Order dated June 21, 2004, the cases

were set for hearing on July 14, 2004. On July 6, 2004, West

Florida Landscaping filed a motion to continue, which was

granted by Order dated July 8, 2004. The hearing was

re - scheduled for September 10, 2004, continued pursuant to an

emergency motion by West Florida Landscaping, re - scheduled for

November 9, 2004, and then continued again. The hearing was

finally held on December 17 , 2004.

At the he aring, South Florida Sod presented the testimony

of Bryant McCall, its vice president. South Florida Sod's

Exhibits 1 and 2 were admitted into evidence. Bayside Sod

presented the testimony of Paul J. Bispham, its president and

part - owner, and Benjamin St rong, field superintendent for Trent

Colony Landscaping. Bayside Sod's Exhibit 1 was admitted into

evidence. West Florida Landscaping presented the testimony of

its owner, Robert W. Owens, and of an employee, Steven Hendley.

West Florida Landscaping off ered no exhibits.

No Transcript of the proceeding was ordered. South Florida

Sod submitted a Proposed Order on December 23, 2004. Neither of

the other parties made a post - hearing submission.

FINDINGS OF FACT

1. Petitioners, South Florida Sod and Baysid e Sod, are

producers of agricultural products as defined by Subsection

604.15(5), Florida Statutes (2003). Both Petitioners grow and

sell sod. South Florida Sod is located in Arcadia, Florida.

Bayside Sod is located in Sarasota, Florida.

2. Responde nt, West Florida Landscaping, located in Plant

City, Florida, is a dealer in agricultural products as defined

by Subsection 604.15(1), Florida Statutes (2003). At the time

of the transactions in question, West Florida Landscaping was

licensed as a dealer in agricultural products supported by a

surety bond provided by Old Republic Surety Company.

3. West Florida Landscaping began purchasing sod from

South Florida Sod in early 2003. The sod was purchased by a man

named Dallas Justice. Bryant McCall, vi ce president of South

Florida Sod, testified that Robert Owens, the owner of West

Florida Landscaping, told him that Mr. Justice worked for him

and would do the ordering for West Florida Landscaping.

4. The initial purchases were cash transactions. At s ome

point during the course of dealings, Mr. Owens contacted South

Florida Sod to request a line of credit. Mr. Owens completed a

credit application, and thereafter West Florida Landscaping

purchased sod on credit.

5. Mr. McCall testified that West Flori da Landscaping was

never a model credit customer. He had to "hound" West Florida

Landscaping to pay its bill. However, up until July and August

2003, West Florida Landscaping always paid the bill, though

often well after payment was due.

6. From July 11 through August 27, 2003, Mr. Justice

placed 43 orders for sod with South Florida Sod in the name of

West Florida Landscaping. The sod was picked up at South

Florida Sod's place of business by truckers sent by Mr. Justice.

The total price for all these o rders was $29,360.80. Invoices

for each of these orders were sent to West Florida Landscaping,

which neither paid them nor disputed their validity.

7. Mr. McCall contacted Mr. Owens about payment of the

invoices. Mr. McCall testified that Mr. Owens stat ed that he

had been out of town during the period of the unpaid invoices.

Mr. Owens told Mr. McCall that upon returning, he discovered

that Mr. Justice was defrauding him. Mr. Justice was ordering

the sod and completing the work for West Florida Landscap ing

projects, but was also collecting the customers' payments and

keeping the money for himself. Mr. Owens did not fire

Mr. Justice or turn him over to law enforcement authorities

because he wanted Mr. Justice to work off the debt.

8. Mr. Owens promised Mr. McCall that he would make good

on the debts incurred by Mr. Justice with South Florida Sod.

Mr. McCall testified that a payment schedule was established,

but that Mr. Owens did not observe it, forcing South Florida Sod

to file a Producer Complaint. As of December 5, 2003, the

balance owed South Florida Sod by West Florida Landscaping was

$29,360.80.

9. West Florida Landscaping began purchasing sod from

Bayside Sod on a cash basis sometime in the middle of 2003. A

man named "Gene," later identified as Dallas Justice, ordered

the sod on behalf of West Florida Landscaping. Bayside Sod

sold 11 truckloads of sod to Mr. Justice and was paid cash.

10. On October 1, 2003, Bayside Sod first extended credit

to Mr. Justice at his request. Between October 2 and

October 22, 2003, Mr. Justice took delivery of 23 orders for

various amounts of sod worth $18,750, with Florida sales tax.

None of these deliveries was paid for by Mr. Justice or West

Florida Landscaping.

11. Paul Bispham, owner and president of Bays ide Sod,

testified that he spoke with Mr. Owens on December 13, 2003.

Mr. Owens assured Mr. Bispham that he and Mr. Justice would pay

the debt.

12. Benjamin Strong is a field superintendent for Trent

Colony Landscaping. He gave West Florida Landscaping' s name to

Mr. Bispham as a reference when the latter contacted him to

solicit new business. Mr. Strong had done business with

Mr. Justice and West Florida Landscaping. His practice was to

make out checks to West Florida Landscaping and give the checks

to Mr. Justice. Mr. Strong testified that Mr. Owens later told

him emphatically not to give any West Florida Landscaping checks

to Mr. Justice.

13. At the hearing, Mr. Owens denied that Mr. Justice was

ever an employee of West Florida Landscaping. Rat her,

Mr. Justice was an independent contractor whom Mr. Owens would

hire on a per - job basis to lay sod. However, Mr. Owens admitted

that he gave Mr. Justice authority to order sod for West Florida

Landscaping, thus mooting the significance of Mr. Justice' s

status as an employee or independent contractor. Mr. Owens

further admitted that he signed the letter seeking a line of

credit from South Florida Sod.

14. Mr. Owens testified that he was in New Orleans for an

extended period. While Mr. Owens was gone, Mr. Justice began

ordering sod for jobs of his own, but had the purchases billed

to West Florida Landscaping. Mr. Owens testified that he has

paid for any sod that Mr. Justice ordered for West Florida

Landscaping projects, but that he believed himself un der no

obligation to pay for sod that Mr. Justice ordered for his own

jobs. He discovered, belatedly, that Mr. Justice was "a liar

and a cheat."

15. Mr. McCall credibly testified that Mr. Owens said

nothing to him about Mr. Justice having used West Flori da

Landscaping's name to fraudulently obtain sod. Rather,

Mr. Owens told him that Mr. Justice was, in Mr. Owens' absence,

completing West Florida Landscaping jobs, but then cashing the

checks made out to West Florida Landscaping and pocketing the

money. This testimony is consistent with that of Mr. Strong and

is credited.

16. Mr. Owens admitted to making some efforts to deduct

money from Mr. Justice's pay in order to settle the debts with

South Florida Sod, but stated that he did not feel a legal

obliga tion to do so.

17. Mr. Justice was subpoenaed to appear and testify at

the hearing in this matter, but he did not appear.

18. By the weight of the evidence and by his own

admission, Mr. Owens authorized Mr. Justice to order sod on

behalf of West Florid a Landscaping. The evidence established

that a course of dealing was established between Mr. Justice, on

behalf of West Florida Landscaping, and the Petitioners in these

cases, whereby Mr. Justice would order and take delivery of the

sod from the Petition ers, and West Florida Landscaping would pay

the invoices for the sod. The greater weight of the evidence is

that Mr. Justice was acting on behalf of West Florida

Landscaping in all his dealings with South Florida Sod and

Bayside Sod.

19. In light of the established course of dealing, West

Florida Landscaping failed to establish any reasonable basis for

its contention that South Florida Sod and Bayside Sod should

have inquired as to Mr. Justice's continuing authority on each

occasion that he ordered their sod. Mr. Owens' testimony that

the sod ordered by Mr. Justice from South Florida Sod and

Bayside Sod was not for West Florida Landscaping jobs cannot be

credited based on the testimony of other witnesses and

Mr. Owens' own actions subsequent to learning t hese suppliers

had not been paid. While there is no question that Mr. Justice

was the actual wrongdoer in these cases, there is also no

question that it was West Florida Landscaping that lent the name

of its legitimate business to Mr. Justice and, thus, e nabled him

to defraud South Florida Sod and Bayside Sod.

CONCLUSIONS OF LAW

20. The Division of Administrative Hearings has

jurisdiction over the parties and subject matter pursuant to

Sections 120.57 and 604.21, Florida Statutes (2004).

21. South Fl orida Sod and Bayside Sod have the burden of

proving the allegations in their respective complaints against

West Florida Landscaping 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). Though South Florida

Sod and Bayside Sod have the ultimate burden of proving their

claims, once each of them has made a prima facie case of

entitlement to recover from West Florida Landscaping, then West

Florida Landscaping has the burden of coming forward with

evidence to refute the entitlement.

22. South Florida Sod and Bayside Sod have satisfied their

burdens of proof. West Florida Landscaping is licensed as a

dealer in agricultural products. West Florida Landscaping

failed to make proper payment and account for sod that South

Florida Sod and Bayside Sod provided to Mr. Justice on behalf of

West Florida Landscaping. West Florida Landscaping failed to

come forward with evidence sufficient to refute the prima facie

case of entitlement made by South Florida Sod and Bayside Sod.

23. Both South Florida Sod and Bayside Sod claim

entitlement to interest (termed "service charges") at a rate

of 1.5 percent monthly, or 18 percent annually, based upon

statements set forth in their invoices reg arding past due

accounts. However, Section 687.01, Florida Statutes (2003),

provides that, in the absence of a special contract, interest

rates are capped at the rate provided in Section 55.03, Florida

Statutes (2003). Case law is clear that a pre - printe d interest

rate contained in an invoice, without more, is insufficient to

establish entitlement to any more pre - judgment interest than the

statute allows. Nelson v. Ameriquest Technologies, Inc. , 739

So. 2d 161, 165 (Fla. 3d DCA 1999), and cases cited the rein.

See also Spyke's Grove, Inc. v. Kulick and Western Surety Co. ,

Case No. 01 - 2649A (DOAH November 1, 2001).

RECOMMENDATION

Based on the foregoing Findings of Facts and Conclusions of

Law, it is

RECOMMENDED that the Department of Agriculture and Consu mer

Services enter a final order ordering Respondent, West Florida

Irrigation & Landscaping, Inc., to pay $29,360.80 to South

Florida Sod, Inc., and $18,750.68 to Bayside Sod, Inc., together

with pre - judgment interest calculated at the rate specified in

Se ction 55.03, Florida Statutes (2003); and further requiring

Old Republic Surety Company to make payment, up to the amount of

its bond, in the event that West Florida Irrigation &

Landscaping, Inc., fails to make payment in a timely manner.

DONE AND EN TERED this 1st day of March, 2005, in

Tallahassee, Leon County, Florida.

S

LAWRENCE P. STEVENSON

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 March, 2005.

ENDNOTE

1/ DOAH Case No. 04 - 0424 involved a third Producer Compla int

against West Florida Landscaping, this one brought by DeSoto

Sod, Inc. On March 22, 2004, DeSoto Sod, Inc., notified DOAH

that it had received payment in full from West Florida

Landscaping and requested that the case be closed. By Order

dated March 2 6, 2004, DOAH Case No. 04 - 0424 was severed from the

other two consolidated cases. By Order dated March 29, 2004,

the file in DOAH Case No. 04 - 0424 was closed.

COPIES FURNISHED :

Brenda D. Hyatt, Bureau Chief

Department of Agriculture and

Consumer Serv ices

Bureau of License and Bond

407 South Calhoun Street, Mayo Building

Mail Station 38

Tallahassee, Florida 32399 - 0800

Richard Ditschler, General Counsel

Department of Agriculture and

Consumer Services

The Capitol, Plaza Level 10

Tallahassee, F lorida 32399 - 0810

Michael A. Jankowski

Old Republic Surety Company

Post Office Box 1635

Milwaukee, Wisconsin 53201

Paul J. Bispham

Bayside Sod, Inc.

7850 Ibis Street

Sarasota, Florida 34241

Jeffery Sullivan, Esquire

Stidham & Stidham, P.A.

Post Offic e Box 510

Bartow, Florida 33831

Robert H. Nutter, Esquire

Ferlita, Nutter, Rosello

& Newman, P.A.

610 West Azeele Street

Tampa, Florida 33606 - 2273

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.