07-004904 Michael H. Revell vs. Wilson And Son Sales, Inc., And The Ohio Casualty Insurance Company, As Surety Status: Closed Recommended Order on Friday, March 7, 2008.

Summary: Petitioner failed to prove that Respondent violated their agreement that Respondent would do his best to sell Petitioner`s squash at the best price.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

MICHAEL H. REVELL, ) )

)

Petitioner, )

) Case No. 07-4904

vs. )

)

WILSON AND SON SALES, INC., and )

THE OHIO CASUALTY INSURANCE )

COMPANY, AS SURETY, )

)

Respondents. )

RECOMMENDED ORDER

The final hearing in this case was held by video-

teleconference on January 21, 2008, at video sites in Tampa and

Tallahassee, Florida, before Administrative Law Judge Bram D.E.

Canter of the Division of Administrative Hearings (DOAH).

APPEARANCES

For Petitioner: Michael H. Revell, pro se

Post Office Box 812

Zolfo Springs, Florida 33890

For Respondent Wilson & Sons, Inc.:

Johnnie B. Byrd, Esquire

Byrd & Stitzel, P.A.

206 North Collins Street

Plant City, Florida 33563

For Respondent Ohio Casualty Insurance Company:

No appearance

STATEMENT OF THE ISSUES

The issue to be determined in this proceeding is whether

Respondents Wilson and Son Sales, Inc. (Wilson), and Ohio

Casualty Insurance Company, as surety, are indebted to

Petitioner for certain Florida-grown agricultural products.

PRELIMINARY STATEMENT

On or about August 30, 2007, Petitioner filed a claim with

the Department of Agriculture and Consumer Services (Department)

alleging that Wilson was indebted to Petitioner for squash that

Petitioner produced and delivered to Wilson to sell for

Petitioner on commission as a broker in agricultural products.

Ohio Casualty Insurance Company was identified in the complaint

as the surety for Wilson.

The Department subsequently asked Petitioner to amend its

claim to include the mailing address of the surety, and notified

Petitioner that he could also include palettizing charges in his

amended complaint. Petitioner filed an amended claim on or

about September 21, 2007, claiming Wilson was indebted to

Petitioner for $27,250.63.

The Department notified Wilson and its surety of the filing

of Petitioner's amended claim and of their opportunity to file a

written answer to the claim and to request a hearing on the

matter. Wilson answered the amended complaint, denying

Petitioner’s allegations, and requested an administrative

hearing. The Department then referred the matter to the

Division of Administrative Hearings to conduct the requested

hearing.

For the videoconference final hearing, the Administrative

Law Judge was at the Tallahassee site and all other participants

were at the Tampa site. Petitioner testified on his own behalf.

Petitioner’s Exhibits 1 through 11 and 14 through 16 were

admitted into evidence. Wilson presented the testimony of

Robert Wilson, Kenny Moore, and Jeff Jensen. Respondent’s

Exhibits 1 through 6 were admitted into evidence. Official

recognition was given to certain regulations promulgated by the

United States Department of Agriculture under the Perishable

Agricultural Commodities Act, as well as an excerpt from a court

case interpreting the Act.

A court reporter recorded the final hearing, but a

transcript was not ordered. Petitioner and Wilson filed post-

hearing submittals which have been carefully considered in the

preparation of this Recommended Order.

FINDINGS OF FACT

Based upon the evidence adduced at hearing, and the record

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

1. Petitioner is a producer of several vegetable crops in

Hardee County.

2. Wilson is a dealer in agricultural products. More

specifically, Wilson operates an agricultural broker business in

Plant City.

3. Wilson’s surety is Ohio Casualty Insurance Company.

4. Although Wilson has written contracts with some

producers, Wilson does not have written contracts with all

producers. In the absence of a contract, the terms of Wilson’s

broker services are almost always the same; that is, Wilson gets

a commission of 10 percent on the sale of the produce and $.35

per box for palletizing and pre-cooling the produce, in return

for which Wilson makes a reasonable and good faith effort to

sell Petitioner’s produce for the best price.

5. Petitioner contacted Wilson in January 2007, about

bringing flat beans to Wilson to sell. Wilson expressed

interest and informed Petitioner about Wilson’s standards terms

as described above. These terms were agreeable to Petitioner

and he brought the beans to Wilson later that month. Although

Petitioner and Wilson had no written contract, the parties’

mutual understanding of the terms of their agreement created an

enforceable oral contract.

6. Wilson sold Petitioner’s beans and no dispute arose

from this first transaction. The parties’ subsequent

transactions for other produce were undertaken pursuant to the

same oral contract terms.

7. Because Wilson works on a commission basis, it is

generally in Wilson’s self-interest to sell growers’ produce for

the best price.

8. Petitioner contacted Robert Wilson, Wilson’s owner, by

telephone in February 2007, and informed Wilson of his plans to

grow wax beans and “hard squash.” It was not stated in the

record whether all three varieties of hard squash later grown by

Petitioner, butternut squash, acorn squash, and spaghetti

squash, were discussed by Petitioner and Robert Wilson during

their February 2007 telephone conversation. A major dispute in

the case was whether the parties’ February discussion about hard

squash created some obligation on the part of Wilson beyond the

oral contract terms described above. Petitioner claims that

Wilson encouraged him to plant the squash and that Petitioner

would not have planted the squash otherwise.

9. Petitioner never made clear, however, what additional

obligation was created by Robert Wilson’s encouragement beyond

the obligation to accept delivery of and make good faith efforts

to sell Petitioner’s squash at the best price. Petitioner did

not use the word “guarantee,” but his claim seems to be that

Wilson became obligated to guarantee that the squash would be

sold for a price close to the price published in the Columbia

(South Carolina) Market Report, a periodic publication of

produce prices.

10. Such an obligation on the part of a broker is contrary

to the general practice in the trade. Petitioner’s evidence was

insufficient to prove more than that Robert Wilson thought he

could sell Petitioner’s squash and had a genuine interest in

acting as broker for Petitioner’s squash. The evidence was

insufficient to prove the existence of a contractual guarantee

that Wilson would obtain a certain price for Petitioner’s hard

squash or do more than was promised with regard to the beans

that Wilson had sold for Petitioner; that is, to try to sell the

produce for the best price.

11. When Petitioner’s wax beans were picked in late April,

he brought them to Wilson to sell. No dispute arose regarding

the sale of the wax beans.

12. Petitioner brought squash to Wilson in five deliveries

between May 12 and May 29, 2007. Petitioner said that on one of

these deliveries, he had to leave the boxed squash in the

parking lot of Wilson’s facility because there was so much

cantaloupe that had been delivered ahead of him. Petitioner

says he was told by a Wilson employee that the squash would not

be put in the cooler. Petitioner thinks Wilson was more

interested in moving the cantaloupe than the hard squash.

Petitioner thinks his squash was not put in the cooler or was

put in too late. Wilson denies that Petitioner’s squash was not

put into the cooler or was put in late.

13. Robert Wilson claims that he made many calls in an

effort to sell Petitioner’s squash, but he could not find

interested buyers for all of the squash because (1) the demand

for hard squash dried up, (2) some of Petitioner’s squash was of

low quality, and (3) the squash began to spoil. Petitioner

denied these allegations.

14. Petitioner received invoices and other paperwork from

Wilson showing that Wilson sold Petitioner’s first delivery of

490 boxes of acorn squash for $10.18 per box. It sold

Petitioner’s second delivery of 519 boxes of acorn squash for

$2.08 per box. For Petitioner’s third delivery of 110 boxes of

acorn squash and 240 boxes of spaghetti squash, Wilson “dumped”

the acorn squash by giving it to away for free to the Society of

St. Andrews food bank, and sold the spaghetti squash for $5.15

per box. Wilson sold petitioner’s fourth delivery of 279 boxes

of butternut squash for $.55 per box. 1

15. Competent substantial evidence in the record

established that it is a regular occurrence for agricultural

products awaiting sale to decay and become unsellable, and for

the broker to dump the products in a landfill or give the

products to a charitable organization and then provide the

grower a receipt for tax deduction purposes.

16. It was undisputed that Wilson did not notify

Petitioner before disposing of his squash. Petitioner claims he

should have been notified by Wilson if the squash was beginning

to spoil. However, Petitioner did not prove that prior

notification was a term of their oral contract.

17. Petitioner claims further that the federal Perishable

Agricultural Commodities Act required Wilson to notify

Petitioner before dumping the squash and to have the squash

inspected to determine whether, in fact, it was spoiled. As

discussed in the Conclusions of Law below, this federal law is

not applicable.

18. Competent substantial evidence in the record

established that the market for agricultural products fluctuates

and, at times, can fluctuate rapidly.

19. For hard squash, which is normally prepared in an

oven, the market demand can drop dramatically due to the onset

of warm weather simply because people tend not to cook hard

squash dishes in warm weather. Petitioner’s squash was being

marketed in May, which means the beginning of warm weather for

most areas of the United States. This fact supports Wilson’s

claim that the demand for hard squash had been good, but fell

rapidly just at the time Wilson was trying to sell Petitioner’s

squash.

20. The problem with the claims made by Petitioner in this

case is simply one of insufficient proof. It is not enough for

Petitioner to offer theories about what he thinks happened or to

raise questions which are not fully answered. Petitioner had no

proof that his squash was not put in Wilson’s cooler, that his

squash did not begin to decay, that the demand for hard squash

did not fall rapidly, that Wilson did not make reasonable

efforts to sell the squash, that Wilson had willing buyers for

Petitioner’s squash at a better price, or that Wilson sold

squash from other growers at a better price.

21. Petitioner’s evidence for his claims consisted

primarily of market price reports that he contends show the

approximate price Wilson should have gotten for the hard squash.

Market price reports have some relevance to the issues in this

case, but competent evidence was presented that the prices

quoted in the publications are not always reliable to indicate

the price a grower can expect to get on any given day, because

there are factors that cause the published market price to be an

inflated price (and applicable to the highest grade of produce)

and because the market price can change rapidly with a change in

demand for the product. The oral contract between Petitioner

and Wilson required Wilson to try to get the best price for

Petitioner’s squash, not some particular price appearing in a

particular market price report.

22. Petitioner did not show that Wilson got a better price

for hard squash of equal quality, or that other brokers in the

area got a better price for hard squash of equal quality at the

times relevant to this case.

23. Petitioner’s evidence was insufficient to prove that

Wilson did not make a reasonable and good faith effort to sell

Petitioner’s squash at the best price.

CONCLUSIONS OF LAW

24. The Division of Administrative Hearings has

jurisdiction of the subject matter pursuant to Sections 120.569,

120.57, and 604.21(6), Florida Statutes (2007). 2

25. Under Florida law, a dealer in agricultural products

must be licensed by the Department to transact business in the

State of Florida. The licensee must make and deliver to the

Department a surety bond or certificate of deposit.

§ 604.20(1), Fla. Stat.

26. Wilson is a "dealer in agricultural products," as

defined in Section 604.15(2), Florida Statutes.

27. Squash is an “agricultural product” as defined in

Section 604.15(1), Florida Statutes.

28. Section 604.21(1)(a), Florida Statutes, provides:

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. Such

complaint shall be filed within 6 months

from the date of sale in instances involving

direct sales or from the date on which the

agricultural product was received by the

dealer in agricultural products, as agent,

to be sold for the producer. 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 event 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.

29. Petitioner’s claim was timely, involved transactions

greater than $500, and the filing fee was paid by Petitioner.

30. Petitioner has the burden of proving the allegations

of his amended claim by a preponderance of the evidence.

Florida Department of Transportation v. J.W.C. Company, Inc .,

396 So. 2d 778, 788 (Fla. 1st DCA 1981).

31. There is no provision in Chapter 604, Florida

Statutes, or in the rules of the Department that governs the

conduct of a dealer in agricultural products with regard to the

dumping of agricultural products consigned to the dealer.

32. Petitioner cited several rules promulgated by the

United States Department of Agriculture pursuant to the

Perishable Agricultural Commodities Act, Title 7 United States

Code, Section 499a et seq ., that he believes Wilson violated.

The federal act contains its own procedures for seeking redress

of violations through the U.S. Department of Agriculture. No

Florida statute or rule was cited by Petitioner which adopts

these federal dumping regulations by reference or otherwise

makes them enforceable in a state administrative hearing

initiated pursuant to Section 604.21(6), Florida Statutes.

33. Furthermore, the federal regulations requiring prior

notice and inspection for dumping agricultural products apply to

“commission merchants.” 7 U.S.C. § 499b(3). Wilson is not a

commission merchant.

34. The preponderance of the evidence adduced at the final

hearing was insufficient to demonstrate that Wilson is indebted

to Petitioner the transactions in dispute.

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 amended claim.

DONE AND ENTERED this 7th day of March, 2008, in

Tallahassee, Leon County, Florida.

BRAM D. E. CANTER

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 7th day of March, 2008.

ENDNOTES

1 / Petitioner introduced Exhibits 6 and 7 which he claims show

that 415 “packages” of his acorn and butternut squash were given

by Wilson to the food bank, but he did not explain how the 415

figure matches up with any of the invoices from Wilson that

account for its sales of Petitioner’s squash.

2 / All references to the Florida Statutes are to the 2007

codification.

COPIES FURNISHED :

Richard Ditschler, General Counsel

Department of Agriculture and

Consumer Services

407 South Calhoun Street, Suite 250

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

Christopher E. Green

Department of Agriculture and

Consumer Services

Office of Citrus License and Bond

Mayo Building, M-38

Tallahassee, Florida 32399-0800

Johnnie B. Byrd, Esquire

Byrd & Stitzel, P.A.

206 North Collins Street

Plant City, Florida 33563

Douglas Gibbe

The Ohio Casualty Insurance Company

136 North Third Street

Hamilton, Ohio 45025

Michael Revell

Post Office Box 812

Zolfo Springs, Florida 33890

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.