06-001215 Drs. Robert H. Biggs And S.V. Kossuth, D/B/A Bk Cedars vs. Chase Landscaping And Nursery, Inc., And Fidelity And Deposit Company Of Maryland, As Surety Status: Closed Recommended Order on Friday, July 28, 2006.

Summary: Petitioners are not entitled to recovery because the named Respondent is not the entity to whom they sold the trees at issue.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DRS. ROBERT H. BIGGS AND S. )

V. KOSSUTH, d/b/a BK CEDARS, )

)

Petitioners, )

)

vs. ) Case No. 06 - 1215

)

CHASE LANDSCAPING AND )

NURSERY, INC ., AND FIDELITY )

AND DEPOSIT COMPANY OF )

MARYLAND, AS SURETY, )

)

Respondents. )

RECOMMENDED ORDER

On July 12, 2006, a hearing was held in Gainesville,

Florida. The authority for conducting the hearing is set

forth in Sections 120.569 and 120.57(1), Florida Statutes.

The case was considered by Lisa Shearer Nelson, Administrative

Law Judge.

APPEARANCES

For Petitioners: Dr. Susan V. Kossuth, pro se

Co - owner, BK Cedars

20874 Northwest 94th Street

Alachua, Florida 32615

For Respondent: Jan Chase, pro se

President, Chase Landscaping &

Nursery, Inc.

10675 Southwest 100th Avenue

Ocala, Florida 34481 - 7321

No appearance for Fidelity & Deposit Company of Maryland.

STATEMENT OF THE ISSUE

Whether Respondent, Chase Landscaping and Nursery, Inc.

(Chase Landscaping), and its surety, Fidelity & Deposit

Company of Maryland (Fidelity), are liable for funds due to

Petitioners from the sale of agricultural products.

PRELIMINARY STATEMENT

On or about November 10, 2005, Petitioners filed a

Producer Complaint with the Florida Department of Agricul ture

and Consumer Services. The Complaint alleged that Respondent

Chase Landscaping or its surety owed $3,661 to Petitioners for

nursery products purchased by Chase Landscaping under the

provisions of the Agricultural Bond and License Law, Sections

604.15 through 604.34, Florida Statutes. An Amended Complaint

was filed February 9, 2006, making changes required by the

Department. Respondent Chase Landscaping thereafter filed a

response denying that any funds were owed because the product

did not meet stat ed specifications. Fidelity acknowledged the

Complaint in a letter to the Department, but did not contest

the matter or request a hearing.

The matter was referred to the Division of Administrative

Hearings April 5, 2006. Formal hearing was held as notice d

July 12, 2006.

At hearing, Petitioners Dr. Robert H. Biggs and Dr. Susan

V. Kossuth testified and presented four exhibits that were

received into evidence. Respondent Chase Landscaping's

president, Jan Chase, testified and that Respondent's four

exh ibits were received into evidence. Fidelity did not

appear.

No transcript of the hearing was filed with the Division.

None of the parties prepared proposed recommended orders.

FINDINGS OF FACT

1. Petitioners Dr. R.H. Biggs and Dr. Susan V. Kossu th

own and do business as BK Cedars. BK Cedars is a producer of

agricultural products as defined by Section 604.15(5), Florida

Statutes.

2. Respondent Chase Landscaping is a licensed and bonded

dealer in agricultural products as defined by Section

604.15 (1), Florida Statutes. During the time period covered

by the transaction in question Chase Landscaping was covered

by bond number 7507757 issued by Fidelity.

3. On May 24, 2005, Petitioners received a phone message

from Chase Nurseries, Inc. (Chase Nurse ries) inquiring about

the possible purchase of 157 five to six feet Leyland cypress

trees.

4. Chase Nurseries is a separate entity from Chase

Landscaping, although both are owned by the same person, Jan

Chase. Chase Nurseries is also located at the sam e address as

Chase Landscaping, but apparently is not licensed and has no

bond.

5. Jan Chase's customer wanted Leyland cypress trees

that were six feet tall. BK Cedars sold Leyland cypress five -

to - six feet tall for $23.00 eachees six - to - seven feet

tall were offered for sale priced at $27.00 each. Chase opted

to purchase the trees five - to - six feet tall at the lower

price.

6. On June 1, 2005, Mike Bruns and another employee from

Chase Nurseries came out to pick up the trees. Bruns declined

the off er to choose, measure and flag the trees himself, and

instead watched Susan Kossuth do so. Mike Bruns loaded the

trees into the truck, paid for the trees with a Chase

Nurseries check that he asked Petitioners to hold for a day,

and left.

7. The cypress t rees were billed for $3,611.00.

Although a check was tendered for that amount, it was returned

to Petitioners marked "insufficient funds." Shortly

thereafter, Jan Chase stopped payment on the check. Mr. Chase

claimed that he was refusing to pay for the trees because his

customer indicated that they were far from six feet tall and

refused them.

8. It is irrelevant how tall the trees actually were.

Chase Nurseries had the opportunity to measure them and chose

not to do so before accepting them. If the y were

significantly shorter than six feet, as claimed, Mike Bruns

should have been able to tell that they were not tall enough

when he loaded them into the truck. Further, Petitioners did

not represent the trees as being six feet or over. They

represent ed them as being five - to - six feet tall, which would

not have met the specifications of Chase Nurseries' client in

any event.

9. Petitioners made several efforts to collect the funds

due them for purchase of the trees. Dr. Biggs made numerous

telephone c alls to Mike Bruns in an effort to receive payment.

After Chase Nurseries stopped payment on the check,

Petitioners filed a complaint with the State Attorney's office

in addition to filing a claim through the Department of

Agriculture and Consumer Servic es. All responses by Jan Chase

were through Chase Nurseries.

10. When Petitioners filed their original complaint with

the Department of Agriculture, they listed the respondent as

"Chase Landscaping and Nursery, Inc.," and listed "Chase

Nurseries" as a trade or d/b/a name for Chase Landscaping.

The Department directed Petitioners to remove this designation

from the complaint filed by Petitioners, because Department

staff advised that Chase Landscaping did not have a "d/b/a"

name.

11. When Jan Chase filled out the Answer for Respondent,

he listed the Respondent as "Jan Chase d/b/a Chase Nurseries,

Inc." He did not indicate that Petitioners had named the

wrong party. He also indicated on the form Answer that the

trees were purchased by Jan Chase. Ch ase testified that his

current bond for Chase Landscaping is being held up by

Fidelity because of this case, but that Chase Landscaping had

nothing to do with this case. He claimed Chase Nurseries did

not meet the threshold amount required to hold a bond. This

transaction alone exceeds the threshold required by the

Department of Agriculture for an agricultural dealer to be

licensed and bonded.

12. Petitioners came to hearing believing that the

entity with which they dealt was covered by the Fidelity bond .

They did not realize that Chase Landscaping was a separate

entity from Chase Nurseries.

CONCLUSIONS OF LAW

13. The Division of Administrative Hearings has

jurisdiction over the subject matter and the parties to this

action in accordance with Section s 120.569 and 120.57(1),

Florida Statutes.

14. Section 604.15, Florida Statutes (2005), includes

the following definitions:

(1) "Agricultural products" means the

natural products of the far, nursery,

grove, orchard, vineyard, garden, and

apiary (raw o r manufactured); . . .

(2) "Dealer in agricultural products"

means any person, partnership, corporation,

or other business entity, whether itinerant

or domiciled within this state, engaged in

this state in the business of purchasing,

receiving, or solic iting agricultural

products from the producer or the

producer's agent or representative for

resale or processing for sale; acting as an

agent for such producer in the sale of

agricultural products for the account of

the producer on a net return basis; or

a cting as a negotiating broker between the

producer or the producer's agent or

representative and the buyer.

* * *

(9) "Producer" means any grower of

agricultural products produced in the

state.

15. Section 604.21, Florida Statutes, provides in

perti nent part:

(1)(a) Any person, partnership,

corporation, or other business entity

claiming to be damaged by any breach of the

conditions of a bond or certificate of

deposit assignment or agreement given by a

dealer in agricultural products as

hereinbefor e provided may enter complaint

thereof against the dealer and against the

surety company, if any, to the department,

which complaint shall be a written

statement of the facts constituting the

complaint. Such complaint shall include

all agricultural produc ts defined in

s.604.15(1), as well as any additional

charges necessary to effectuate the sale

unless these additional charges are already

included in the total delivered price.

Such complaint shall be filed within 6

months from the date of sale. . . . No

complaint shall be filed pursuant to this

section unless the transactions involved

total at least $500 and occurred in a

single license year. Before a complaint

can be processed, the complainant must

provide the department with a $50 filing

fee. In the e vent the complainant is

successful in proving the claim, the dealer

in agricultural products shall reimburse

the complainant for the $50 filing fee as

part of the settlement of the claim.

16. Petitioners have the burden of proving, by a

preponderance of the evidence, that they are entitled to the

remedy claimed in the Amended Complaint. Florida Department

of Transportation v. J.W.C. Company, Inc. , 396 So. 2d 778

(Fla. 2d DCA 1981).

17. Chase Nurseries is a dealer as defined by Section

604.15(2), Flori da Statutes. It is however, by its own

admission, not licensed and bonded as required by Section

604.18, Florida Statutes. More importantly, it is also not

the respondent named in the complaint in this case.

18. While Petitioners have proven that Cha se Nurseries

breached its agreement to pay for the Leyland cypress trees

purchased from BK Cedars, they have not proven any wrongdoing

by the named respondent, Chase Landscaping.

19. It could be argued that inasmuch as Chase Nurseries

and Chase Landscapi ng are at the same address and are owned by

the same person who appeared at the hearing, the corporate

structure could be disregarded where, as here, Chase Nurseries

has failed to meet the licensure requirements imposed by

Chapter 604, Florida Statutes. H owever, neither the

Commission nor the undersigned has the authority to disregard

the corporate structure and pierce the corporate veil. As

stated by the Supreme Court in Roberts' Fish Farm v. Spencer ,

153 So. 2d 718 (Fla. 1963), only duly - established cou rts of

law or equity may pierce the corporate existence and look

beyond it to the stockholders or to other entities. The Court

stated:

Those who utilize the laws of this state in

order to do business in the corporate form

have every right to rely on the r ules of

law which protect them against personal

liability, unless it be shown that the

corporation is formed or used for some

illegal, fraudulent or other unjust purpose

which justifies piercing of the corporate

veil. This the reason for the rule, stated

in all Florida cases, that the courts are

reluctant to pierce the corporate veil and

will do so only in a court of competent

jurisdiction, after notice to and full

opportunity to be heard by all parties, and

upon a showing of cause which necessitates

the c orporate entity being disregarded in

order to prevent some injustice.

153 So. 2d at 721. Because the Department of Agriculture does

not have the authority to require payment from Chase

Landscaping for the wrongs committed by Chase Nurseries,

Petitioners' complaint cannot succeed.

RECOMMENDATION

Upon consideration of the facts found and conclusions of

law reached, it is

RECOMMENDED:

That Petitioners' Amended Complaint against Respondents

Chase Landscaping and Fidelity be dismissed.

DONE AND ENTER ED this 28th day of July, 2006, in

Tallahassee, Leon County, Florida.

S

LISA SHEARER NELSON

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 28th day of July, 2005.

COPIES FURNISHED:

Dr. Robert H. Biggs

Dr. S. V. Kossuth

208 74 Northwest 91st Street

Alachua, Florida 32615

Jan Chase

Chase Landscaping and Nursery, Inc.

10675 Southwest 100th Avenue

Ocala, Florida 34481 - 7321

Robert L. Lawrence

Fidelity & Deposit Company

of Maryland

3910 Keswick Road

Baltimore, Maryland 2121 1

Kathy Alves

Fidelity & Deposit Company

of Maryland

Post Office Box 87

Baltimore, Maryland 21203

Chris Green, Chief

Bureau of License and Bond

Department of Agriculture

and Consumer Services

407 South Calhoun Street, MS 38

Tallahassee, Florida 3 2399 - 0800

Richard Ditschler, General Counsel

Department of Agriculture

and Consumer Services

407 South Calhoun Street, Suite 520

Tallahassee, Florida 32399 - 0800

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.