06-004890 Sturon, Inc. vs. Garden World Of Holiday, Inc., D/B/A Garden World And Platte River Insurance Company, As Surety Status: Closed Recommended Order on Monday, July 9, 2007.

Summary: The evidence established that Petitioner was entitled to receive payment for products provided to Respondent.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

STURON, INC., )

)

Petitioner, )

)

vs. ) Case No. 06-4890

)

GARDEN WORLD OF HOLIDAY, INC., )

d/b/a GARDEN WORLD, AND PLATTE )

RIVER INSURANCE COMPANY, AS )

SURETY, )

)

Respondents. )

)

RECOMMENDED ORDER

On June 7, 2007, a formal administrative hearing in this

case was held by video teleconference in Tallahassee and Fort

Myers, Florida, before William F. Quattlebaum, Administrative Law

Judge, Division of Administrative Hearings.

APPEARANCES

For Petitioner: Michael S. Perse, Esquire

Kluger, Peretz, Kaplan & Berlin, P.L.

Miami Center, Seventeenth Floor

201 South Biscayne Boulevard

Miami, Florida 33131

For Respondent Garden World of Holiday, Inc., d/b/a Garden

World:

Kendall T. Jones, Esquire

Paloci & Jones, Chartered

5560 Bee Ridge Road, Suite D-7

Sarasota, Florida 34233

For Respondent Platte River Insurance Company:

(No appearance)

STATEMENT OF THE ISSUE

The issue is whether Garden World of Holiday, Inc., d/b/a

Garden World (Respondent), and its surety, Platte River Insurance

Company, owe funds to Sturon, Inc. (Petitioner), for the sale of

agricultural products.

PRELIMINARY STATEMENT

On or about October 31, 2006, the Petitioner filed a

complaint with the Florida Department of Agriculture and

Consumer Services (DACS) against the Respondent related to the

Respondent's alleged non-payment for plant materials purchased

from the Petitioner. The Respondent denied the allegations and

requested a formal administrative hearing. The complaint and

request were forwarded to the Division of Administrative

Hearings, which scheduled the matter for hearing. The scheduled

hearing was continued several times for a variety of reasons

and, eventually, was conducted on June 7, 2007.

At the hearing, the Petitioner presented the live testimony

of one witness, the deposition testimony of two witnesses, and

had Exhibits 1, 2, and 5 admitted into evidence. The Respondent

presented no testimony or exhibits. Although the Respondent had

pre-filed proposed exhibits prior to the hearing, none were

offered or admitted during the hearing.

No transcript of the hearing was filed. The Petitioner

filed a Proposed Recommended Order.

FINDINGS OF FACT

1. The Petitioner was a producer of agricultural products,

specifically tropical foliage materials.

2. The Respondent was a dealer of agricultural products

and was apparently involved in a large project that required

obtaining substantial quantities of tropical foliage plant

product.

3. In July 2006, the Respondent contacted the Petitioner

and inquired as to the availability of tropical foliage plant

product. The Petitioner and the Respondent had not previously

done business together.

4. At the beginning of the sales transactions, the

Respondent sought, and the Petitioner granted, a line of credit

for the plant material purchases.

5. Beginning on July 28, 2006, and continuing through

September 22, 2006, the Respondent purchased and took delivery

of tropical foliage plant product from the Petitioner.

6. All materials sold by the Petitioner to the Respondent

were in response to telephone orders placed by the Respondent.

There is no evidence that the Petitioner charged for any plant

materials that were not ordered by the Respondent.

7. All charges for all plants sold by the Petitioner to

the Respondent were billed on invoices that were sent by the

Petitioner to the Respondent within one day of each delivery.

The quantities and prices of the plants were clearly set forth

on the invoices.

8. The evidence establishes that the Respondent received

the invoices and was aware of the prices being charged by the

Petitioner.

9. The Respondent has asserted that there were

conversations about the prices being charged by the Petitioner,

but there was no evidence presented that there was any agreement

between the parties under which the Petitioner agreed to reduce

the prices being invoiced. Despite the alleged price concern,

the Respondent continued to order plant materials from the

Petitioner.

10. Based on a review of the invoices, the total cost of

the plant materials sold by the Petitioner to the Respondent was

$164,362.67. The Respondent has paid a total of $66,968.69 to

the Petitioner. The total unpaid amount is $97,393.98.

11. The Petitioner routinely grew various types of foliage

product. When the Petitioner's own supplies were insufficient,

or the material requested was not of a type grown by the

Petitioner, the Petitioner located and obtained plant materials

from other producers for purposes of resale to dealers. The

prices of plants obtained from other producers for resale

included a "markup" for locating and obtaining the materials for

purchase by a dealer.

12. In supplying the plant materials requested by the

Respondent in this case, the Petitioner sold from its own

inventory and obtained materials from other producers for resale

to the Respondent.

13. There was no evidence that the markup was unreasonable

or was not common practice in the industry.

14. There is no evidence that the Respondent attempted to

locate and obtain plant materials from other suppliers rather

than from the Petitioner because of dissatisfaction with the

Petitioner's prices.

15. At the hearing, counsel for the Respondent asserted

that the Respondent's refusal to pay was related to "price

gouging" by the Petitioner. There is no evidence that the

Petitioner engaged in "price gouging."

16. There was no evidence that the Respondent could not

have located and obtained the plant materials from the same

sources from which the Petitioner obtained the materials it did

not produce.

17. Although prior to the hearing, the Respondent asserted

that some plant materials were not of appropriate quality; there

was no evidence presented at the hearing of any quality problems

that were not immediately resolved at the time of delivery.

18. At one time, the Respondent asserted that the entity

for which the Respondent was purchasing and installing plant

materials was tax exempt and that the amount owed should have

been accordingly reduced, but there was no evidence offered in

support of the assertion and no reduction has been set forth in

this Recommended Order.

19. The Respondent presented no evidence to establish any

legitimate reason to avoid payment of the $97,393.98 owed to the

Petitioner.

CONCLUSIONS OF LAW

20. The Division of Administrative Hearings has

jurisdiction over the parties to and subject matter of this

proceeding. §§ 120.569 and 120.57(1), Fla. Stat. (2006). 1

21. Section 604.15, Florida Statutes, sets forth relevant

definitions as follows:

(1) "Agricultural products" means the

natural products of the farm, nursery,

grove, orchard, vineyard, garden, and apiary

(raw or manufactured); . . .

(2) "Dealer in agricultural products" means

any person, partnership, corporation, or

other business entity, whether itinerant or

domiciled within this state, engaged within

this state in the business of purchasing,

receiving, or soliciting 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 acting as a

negotiating broker between the producer or

the producer's agent or representative and

the buyer.

* * *

(5) "Producer" means any producer of

agricultural products produced in the state.

22. As the terms are statutorily defined, the Petitioner

is a "producer" of agricultural products, and the Respondent is

a "dealer" of agricultural products.

23. Florida-based dealers in agricultural products are

required to obtain a license issued by the DACS. § 604.17, Fla.

Stat. One of the requirements for licensure is delivery to the

DACS of a surety bond or a certificate of deposit intended to

secure payment for agricultural products sold to dealers by

producers. § 604.20(1), Fla. Stat.

24. In material part, Section 604.21, Florida Statutes,

provides as follows:

604.21 Complaint; investigation; hearing.--

(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

hereinbefore 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 products 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. . . .

* * *

(g) The surety company or financial

institution shall be responsible for payment

of properly established complaints filed

against a dealer, notwithstanding the

dealer's filing of a bankruptcy proceeding.

* * *

(2) Upon the filing of such complaint in

the manner herein provided, the department

shall investigate the matters complained of;

whereupon, if, in the opinion of the

department, the facts contained in the

complaint warrant such action, the

department shall serve notice of the filing

of complaint to the dealer against whom the

complaint has been filed at the last address

of record. Such notice shall be accompanied

by a true copy of the complaint. A copy of

such notice and complaint shall also be

served to the surety company, if any, that

provided the bond for the dealer, which

surety company shall become party to the

action. Such notice of the complaint shall

inform the dealer of a reasonable time

within which to answer the complaint by

advising the department in writing that the

allegations in the complaint are admitted or

denied or that the complaint has been

satisfied. Such notice shall also inform

the dealer and the surety company or

financial institution of a right to a

hearing on the complaint, if requested.

* * *

(6) Any party whose substantial interest is

affected by a proceeding pursuant to this

section shall be granted a hearing upon

request as provided by chapter 120. Such

hearing shall be conducted pursuant to

chapter 120. The final order of the

department, when issued pursuant to the

recommended order of an administrative law

judge, shall be final and effective on the

date filed with the department's agency

clerk. Any party to these proceedings

adversely affected by the final order is

entitled to seek review of the final order

pursuant to s. 120.68 and the Florida Rules

of Appellate Procedure. Should a complaint

forwarded by the department to the Division

of Administrative Hearings be settled prior

to a hearing pursuant to chapter 120, the

department shall issue a notice closing the

complaint file upon receipt of the

administrative law judge's order closing the

complaint file, and the matter before the

department shall be closed accordingly.

(7) Any indebtedness set forth in a

departmental order against a dealer shall be

paid by the dealer within 15 days after such

order becomes final.

(8) Upon the failure by a dealer to comply

with an order of the department directing

payment, the department shall, in instances

involving bonds, call upon the surety

company to pay over to the department out of

the bond posted by the surety company for

such dealer or, in instances involving

certificates of deposit, call upon the

financial institution issuing such

certificate to pay over to the department

out of the certificate under the conditions

of the assignment or agreement, the amount

called for in the order of the department,

not exceeding the amount of the bond or the

principal of the certificate of

deposit. . . .

* * *

(11) Upon the failure of a surety company

to comply with a demand for payment of the

proceeds on a bond for a dealer in

agricultural products, a complainant who is

entitled to such proceeds, in total or in

part, may, within a reasonable time, file in

the circuit court a petition or complaint

setting forth the administrative proceeding

before the department and ask for final

order of the court directing the surety

company to pay the bond proceeds to the

department for distribution to the

complainants. If in such suit the

complainant is successful and the court

affirms the demand of the department for

payment, the complainant shall be awarded

all court costs incurred therein and also a

reasonable attorney's fee to be fixed and

collected as part of the costs of the suit.

In lieu of such suit, the department may

enforce its final agency action in the

manner provided in s. 120.69.

25. The Petitioner has the burden of establishing by a

preponderance of the evidence entitlement to the relief sought.

Balino v. Department of Health and Rehabilitative Services , 348

So. 2d 349 (1st DCA 1977). In this case, the preponderance of

the evidence establishes that the Respondent owes a total of

$97,393.98 to the Petitioner for agricultural products

identified herein.

26. The Respondent's Answer to the Petitioner's Complaint

identifies Platte River Insurance Company as the surety for the

Respondent. Accordingly, it is presumed that a bond exists

which complies with the dealer licensing requirement, although

no evidence related directly to the bond was admitted during the

hearing.

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 directing that the

Respondent pay the total of $97,393.98, to the Petitioner, and

providing for such other procedures as are appropriate to provide

for satisfaction of the debt.

DONE AND ENTERED this 9th day of July, 2007, in

Tallahassee, Leon County, Florida.

S

WILLIAM F. QUATTLEBAUM

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

[phone] SUNCOM 278-9675

Fax Filing [phone]

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 9th day of July, 2007.

ENDNOTE

1/ Unless otherwise stated, all references to Florida Statutes

are to Florida Statutes (2006).

COPIES FURNISHED :

Christopher E. Green

Department of Agriculture and

Consumer Services

Office of Citrus License and Bond

Mayo Building, M-38

Tallahassee, Florida 32399-0800

Platte River Insurance Company

Attn: Claims Department

1600 Aspen Commons, Suite 400

Middleton, Wisconsin 53562-4772

Michael S. Perse, Esquire

Kluger, Peretz, Kaplan & Berlin, P.L.

Miami Center, Seventeenth Floor

201 South Biscayne Boulevard

Miami, Florida 33131

Kendall T. Jones, Esquire

Paloci & Jones, Chartered

5560 Bee Ridge Road, Suite D-7

Sarasota, Florida 34233

Richard Ditschler, General Counsel

Department of Agriculture and

Consumer Services

407 South Calhoun Street, Suite 520

Tallahassee, Florida 32399-0800

Honorable Charles H. Bronson

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.