08-000382 A.D. Andrews Nursery, Inc. vs. L.M.I East, Incorporated, D/B/A L.M.I. Landscapes, Inc., And Western Surety Company, As Surety Status: Closed Recommended Order on Tuesday, June 3, 2008.

Summary: Without a brokerage agreement, he who has complete control of the product has bought same and is responsible to pay for it. Substantial evidence of sale at the point of transfer of product is not the final arrival point.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

A.D. ANDREWS NURSERY, INC., )

)

Petitioner, )

)

vs. ) Case No. 08-0382

)

L.M.I. EAST, INCORPORATED, )

d/b/a L.M.I. LANDSCAPERS, INC., )

AND WESTERN SURETY COMPANY, AS ) )

SURETY, )

)

Respondent. )

RECOMMENDED ORDER

Upon due notice, a disputed-fact hearing was held in this

case on April 16, 2008, by video teleconferencing between

Jacksonville, Florida, and Tallahassee, Florida, before

Ella Jane P. Davis, a duly-assigned Administrative Law Judge of

the Division of Administrative Hearings.

APPEARANCES

For Petitioner A.D. Andrews Nursery, Inc:

Teal Pomeroy

Qualified Representative

A.D. Andrews Nursery, Inc.

Post Office Box 1126

Chiefland, Florida 32644-1126

For Respondent L.M.I. East, Incorporated d/b/a L.M.I.

Landscapers, Inc.:

Pat Tronzano

Qualified Representative

1437 Halsey Way

Carrollton, Texas 75007-4410

For Respondent Western Surety Company:

(No appearance)

STATEMENT OF THE ISSUE

Whether Respondent, L.M.I. East, Incorporated d/b/a L.M.I.

Landscapers, Inc. and its surety, Western Surety Company owes

Petitioner $4,210.00 for East Palatka Holly Trees.

PRELIMINARY STATEMENT

This cause was referred to the Division of Administrative

Hearings on or about January 23, 2008. On February 26, 2008, a

Notice of Hearing by Video Teleconference for April 16, 2008, was

entered, together with an Order of Pre-Hearing Instructions.

At the time set for hearing, Teal Pomeroy appeared at the

Tallahassee site for Petitioner. Pat Tronzano on behalf of

Respondent and the court reporter appeared at the Jacksonville,

Florida, site. Upon examination by the undersigned and by oral

authorization by Petitioner corporation’s principal, A.D.

Andrews, Mr. Pomeroy was accepted to act as Petitioner's

Qualified Representative. Mronzano was examined and

conditionally accepted to act as Respondent's Qualified

Representative, subject to Respondent's written corporate

approval being filed within 10 days of hearing. That approval

was timely filed.

Respondent's surety did not appear.

Petitioner presented the oral testimony of Pomeroy Teal,

Mary Andrews, and A.D. Andrews, and had five exhibits admitted in

evidence. Mronzano testified on behalf of Respondent and had

seven exhibits admitted in evidence, several of which were

composites.

No transcript was provided.

Pursuant to their oral stipulation at the close of hearing,

each of the parties timely filed its Proposed Recommended Order

on April 24, 2008, and May 5, 2008, respectively.

FINDINGS OF FACT

1. Petitioner A.D. Andrews, Inc. is a producer of

agricultural products, pursuant to Section 604.15 (9), Florida

Statutes.

2. Respondent L.M.I. East, Incorporated d/b/a L.M.I.

Landscapes, Inc. is a dealer in agricultural products pursuant

to Section 604.15 (2), Florida Statutes. Respondent’s surety is

Western Surety Company

3. Teal Pomeroy, a salesman for Petitioner, and Pat

Tronzano, Purchasing Manager for Respondent, have a business

history representing their respective principals. All previous

dealings have been satisfactory, and they share a mutual respect.

4. While at a trade show in Orlando, Florida, Teal and

Tronzano entered into an oral agreement for the sale of 31 East

Palatka Holly bushes/trees (30 at the rate of $135.00 each, and

one for $160.00) at a total price of $4,210.00, due from

Respondent to Petitioner. Neither participant in this

arrangement testified to any oral terms covering “point of sale”

or a guarantee of any condition of the hollies at a final

destination. Neither participant testified that a standard

course of business on these issues had arisen between them as a

result of their prior transactions.

5. On October 9, 2007, Mronzano sent a third party

freighter (trucker) to pick-up the hollies at Petitioner's

nursery in Chiefland, Florida, and transport them, at

Respondent’s expense, to Selena, Texas, for planting and

landscaping by Respondent.

6. Mronzano did not accompany the third party freighter

to Petitioner's nursery or on the subsequent trip to Texas. He

never saw the hollies in question prior to loading or while they

were still on the truck after loading.

7. The trucker selected by Respondent was one specially

skilled in the transport of landscape plants, and Respondent has

successfully used him for prior purchases and transports.

8. The third party freight truck arrived at Petitioner’s

Chiefland, Florida, nursery at approximately 11:00 a.m. on

October 9, 2007, before all the hollies had been dug up.

However, the trees that were ready to load and those that had to

be dug up were loaded by Petitioner, and by 2:00 p.m., the truck,

fully loaded, left Petitioner’s property.

9. Petitioner’s invoice clearly states:

ATTENTION: If these trees are not in

satisfactory condition when received, do not

accept them. We do not replace trees.

Please note any discrepancies or problems

with materials.

10. The invoice does not show the trucker noted any

problems with the hollies.

11. The trucker also signed the delivery ticket under the

statement, “I acknowledge that trees were received in good

condition.”

12. Approximately 48 hours later, Mronzano received a

report from Texas that when the freighter delivered the hollies

to the Selena, Texas site, some hollies were dead and other were

dying. Mronzano did not personally witness anything at the

final destination. Respondent's photographs in evidence, the

date of which has not been automatically printed on them, show

some trees which had already been unloaded in Texas with dried-

out root balls. They show no trees with dried-out root balls

still on the truck. All photographs show intact root balls,

although they are dusty and some trees are clearly dead or dying.

One tree is dead in a pot.

13. Although it had taken Respondent’s trucker

approximately 48 hours to get the hollies to their ultimate

destination in Texas, the normal driving time is 16-20 hours.

Because federal regulations require a period of rest for

commercial drivers every eight hours, Respondent put forth the

theory that because there had been a delay of three hours at

Petitioner’s nursery while some hollies were dug up and loaded,

the delaying effect of three hours snowballed to a total delay of

as much as 22-28 hours for the truck’s arrival time at the final

destination. This theory is speculative and unsubstantiated by

the evidence.

14. Despite some earlier attempts, Respondent did not

notify Petitioner of the condition of the hollies at the final

destination until October 15, 2007.

15. Respondent concedes that 11 of the 131 hollies were

accepted in good condition. Whether one of the survivors was the

single holly tree sold for $160.00, is not in evidence.

Respondent has not paid Petitioner for any of the hollies.

16. Mronzano has not had a dry-out problem like this

one in ten years. Respondent's second theory of why the hollies

arrived at the Texas destination in poor shape is an assertion

that the way Petitioner processed and handled the harvesting of

the hollies adversely affected their health. Respondent

speculates that Petitioner’s digging and immediately loading the

just-dug hollies onto the truck sent by Respondent resulted in

shock to the hollies’ root systems so that the root systems dried

out.

17. Mr. Teal and Mronzano agree that previous trees

(not necessarily East Palatka hollies) sold by Petitioner to

Respondent had been "pre-dug" and "staged" by Petitioner in

anticipation of the arrival of the freighter. “Staging” means

that Petitioner dug up the trees, put them on a trailer, and took

them to a centralized loading area at the nursery for

Respondent’s pick-up.

18. According to Mr. Teal, the foregoing “pre-dig and

stage” method prevents "double-handling" of trees, but many trees

are dug up only when a truck arrives at the nursery to take them

away. Mr. Teal was not present at the nursery on October 9,

2007, but opined that if the hollies on this occasion had been

pre-watered, they would be unlikely to die of shock, despite

being dug up and loaded right away. Moreover, the particular

trees sold to Respondent came out of a field that Petitioner

irrigates, so "dry out" should not have been a problem.

19. Mary Andrews works in Petitioner's business office.

She did not know about Respondent's order until the truck arrived

on October 9, 2007, but she managed the "dig and load" within

three hours of the truck’s arrival. She testified that

Petitioner digs trees throughout the year so that when a truck

arrives, the trees have not been sitting dry in a field for

lengthy periods of time.

20. Petitioner sold 3500 similar trees in the previous year

without any dry-out problems.

21. Petitioner had admitted in evidence, without objection,

Florida Division of Forestry rainfall records for three locations

near Petitioner's nursery. All three official records show six

inches of rainfall for the week immediately preceding October 9,

2007.

22. Petitioner maintains that the trucker should have

watered the hollies en route . Respondent believes the trucker

did water them, but the trucker did not testify, so there is no

direct evidence that the trucker watered the hollies en route .

23. The parties have tried to work this situation out, but

their respective offers of compromise are not admissible herein,

pursuant to Section 90.408, Florida Statutes.

CONCLUSIONS OF LAW

24. The Division of Administrative Hearings has

jurisdiction over the parties and subject matter of this cause,

pursuant to Sections 120.569 and 120.57(1), Florida Statutes,

(2007).

25. Petitioner is a producer of "agricultural products,"

as defined in Section 604.15(1), Florida Statutes.

26. Petitioner has the burden of presenting evidence that

Respondent has defaulted on paying the agreed amount pursuant to

the oral agreement as stated by them. Thereafter, Respondent

has the burden of presenting evidence that Petitioner violated

their agreement by failing to furnish hollies of the agreed-upon

quality standard. Dept. of Banking and Finance v. Osborne Stern

and Company , 670 So. 2d 932 (Fla. 1995).

27. Respondent was acting in the capacity of a buyer when

Mronzano negotiated the sale of Petitioner’s hollies and as

a buyer, Respondent is responsible for payment to Petitioner

unless Petitioner can be shown to have breached the contract.

28. The parties agree that there was an oral agreement.

Because there was no clear specification of a different "point

of sale," the point of sale herein occurred when care, custody,

and control of the hollies passed to Respondent. The freighter,

who was selected and paid solely by Respondent, was, in effect,

Respondent's agent when he assumed custody and responsibility

for the hollies.

29. There is no evidence herein that an up-front agreement

was reached for the parties to share transportation costs or for

Respondent to "broker" a sale to some other entity.

Respondent's agent signed for the hollies and took sole

possession of them. By signing and taking possession of the

hollies for Respondent without noting any problem with the

hollies on the invoice and/or delivery ticket, and without any

other “point of sale” arrangement, the trucker acknowledged that

the hollies were satisfactory, pursuant the printed disclaimer

on Petitioner’s invoice and delivery ticket. Thereafter, only

Respondent's agent (not Petitioner) had complete control of the

hollies.

30. Absent some other understanding (such as a clear

brokerage agreement, an agreement to share freight costs, mutual

control of the third party freighter, an agreement on guaranteed

quality of the product at the final destination, or something

similar), he who has complete control of the product bears any

loss to that product. In this case, that would be Respondent.

30. Even so, Petitioner presented sufficient evidence to

demonstrate that Respondent's mere speculations (concerning

shock from harvesting, the cause of the inordinate delay in

Respondent's trucker's travel time, and selection of products

with dried-out root balls) were reasonably unlikely, and

therefore these conjectures cannot shift responsibility for the

dead and dying hollies back to Petitioner.

RECOMMENDATION

Based on the foregoing Findings of Facts and Conclusions of

Law, it is

RECOMMENDED that a final order be entered that Respondent

L.M.I. East, Incorporated d/b/a L.M.I. Landscapers, Inc., shall

pay Petitioner, A.D. Andrews Nursery, Inc., the sum of

$4,210.00, and that if L.M.I. East, Incorporated d/b/a L.M.I.

Landscapers, Inc., fails to pay Petitioner, A.D. Andrews

Nursery, Inc., within 30 days of the final order, then

Respondent, Western Surety Company, shall pay the Department as

required by Section 604.21, Florida Statutes, and that the

Department reimburse Petitioner in accordance with Section

604.21, Florida Statutes.

DONE AND ENTERED this 3rd day of June, 2008, in

Tallahassee, Leon County, Florida.

S

___________________________________

ELLA JANE P. DAVIS

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 3rd day of June, 2008.

COPIES FURNISHED:

Teal Pomeroy

Qualified Representative

A.D. Andrews Nursery, Inc.

Post Office Box 1126

Chiefland, Florida 32644-1126

Pat Tronzano

Qualified Representative

L.M.I. East, Incorporated d/b/a

L.M.I. Landscapers, Inc.

1437 Halsey Way

Carrollton, Texas 75007-4410

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

Western Surety Company

Post Office Box 5077

Sioux Falls, South Dakota 57117-5077

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.