08-003379 Tonya Gladney, D/B/A Tonya Gladney Farms vs. G And S Melons, Llc And Platte River Insurance Company, As Surety Status: Closed Recommended Order on Monday, February 23, 2009.

Summary: Petitioner did not prove entitlement to further payments from Respondent.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

TONYA GLADNEY, d/b/a TONYA )

GLADNEY FARMS, )

)

Petitioner, )

)

vs. ) Case No. 08-3379

)

G AND S MELONS, LLC, AND PLATTE RIVER INSURANCE COMPANY, AS )

SURETY, )

)

)

Respondents. )

)

RECOMMENDED ORDER

Pursuant to notice, a final hearing was conducted in this

case on October 28 and 29, 2008, in Lakeland, Florida, before

Administrative Law Judge R. Bruce McKibben of the Division of

Administrative Hearings.

APPEARANCES

For Petitioner: Ian Horn, Esquire

Post Office Box 691

Brandon, Florida 33509-0691

For Respondents: Lawrence H. Meuers, Esquire

Steven M. DeFalco, Esquire

Meuers Law Firm, P.L.

5395 Park Central Court

Naples, Florida 34109

STATEMENT OF THE ISSUE

The issue in this case is whether Respondent is indebted to

Petitioner relating to the lease of farmland, management of

farmland, and the sale of strawberries pursuant to various oral

contracts.

PRELIMINARY STATEMENT

During the early summer of 2007, Petitioner, Tonya Gladney

("Gladney") approached Glen Grizzaffe ("Grizzaffe"), the owner

of Respondent, G&S Melons, LLC ("G&S"), about the possible lease

of farmland for Gladney's company, Tonya Gladney Farms ("TGF").

The parties reached an oral agreement, and TGF began farming

operations, including the cultivation of strawberries (sometimes

referred to herein as "berries"). Upon completion of the

2007-2008 farming season, TGF filed a claim with the Florida

Department of Agriculture and Consumer Services, asserting G&S's

alleged failure to pay TGF the amount due and owing under the

oral contracts. The matter was referred to the Division of

Administrative Hearings (DOAH) and assigned to the undersigned

Administrative Law Judge.

The final hearing was scheduled for August 13, 2008. By

mutual agreement of the parties, the hearing was re-scheduled

for October 27, 2008, and then moved to October 28 and 29, 2008.

At the final hearing, Petitioner called four witnesses: Tonya

Gladney; Charles "Skeeter" Coleman, Gladney's son; Carol Lester;

and Terry "T.J." Hale. Petitioner offered into evidence

Exhibits 2, 3, 4, 6 and 10, each of which was admitted.

Respondent presented the testimony of two witnesses: Glen

Grizzaffe and Ronald Nelson Young. Respondent offered six

exhibits into evidence, each of which was admitted.

The parties advised the undersigned that a transcript of

the final hearing would be ordered. They were given ten days

from the date the transcript was filed at DOAH to submit

proposed recommended orders. The Transcript was filed at DOAH

on November 24, 2008. The parties thereafter filed a joint

motion seeking additional time to file their proposed orders.

The motion was granted, and the parties were allowed until

February 13, 2009, to file the proposed orders. Each party

timely submitted a Proposed Recommended Order, and they were

given due consideration in the preparation of this Recommended

Order.

FINDINGS OF FACT

1. Tonya Gladney is an individual doing business as Tonya

Gladney Farms, an entity dedicated to the business of farming in

south central Florida. Gladney learned the farming business

from her father. Gladney had been around strawberry farming her

whole life and decided to engage in the business independently

starting with the 2006-2007 growing season.

2. TGF is a fledgling operation and does not own all of

the land, equipment, or resources necessary to actively operate

and maintain a farm. That is, TGF found it necessary to lease

land from various landowners and to use that land for farming

purposes. Further, TGF needed to rent certain farming equipment

in order to prepare the leased lands for farming.

3. G&S Melons, LLC, is a Florida limited liability company

whose managing member is John Glen Grizzaffe. G&S is a farming

operation which has been in existence since 1999. Like Gladney,

farming was in Grizzaffe's blood, and his family had been

farming since the 1920's. G&S started out as a grower of

watermelons, but has grown berries, melons, squash, cucumbers

and other produce as well. In recent years, G&S purchased

25 acres of land to be used primarily for strawberry farming,

and that area of its business has grown considerably. In 2006,

when Grizzaffe and Gladney first started doing business, TGF was

G&S's only strawberry producer.

4. G&S markets its produce to several grocery store

chains, including SuperValue, Acme, Shaws, Jewel Foods, Food

Lion, Sweet Bay, Albertsons and others. Grizzaffe's experience

and business relationship with the various chains have allowed

him to become a broker of goods produced by other farmers. As a

broker, Grizzaffe has experience dealing with buyers and knows

how to negotiate the best prices for products in his custody.

5. In 2007, G&S was subleasing some land from C.W. Stump

who was leasing the land from its owner, Al Repita. The land,

known as Lightfoot Road Farm ("Lightfoot") is located in

Wimauma, Hillsborough County. Grizzaffe was paying $325 per

acre for the Lightfoot property, which was irrigated, but did

not have overhead sprinklers. Grizzaffe held a year-to-year

sublease on the property, primarily because Repita had the land

up for sale. Grizzaffe expected to retain his lease for the

next two or three years, but did not have any long-term

expectations. The most credible evidence indicates that

Lightfoot encompasses approximately 35 acres.

6. After initial discussions between the parties

concerning Lightfoot, Gladney and Grizzaffe met at the farm to

further discuss the possible sublease by TGF. Gladney indicated

she wanted to grow strawberries and Grizzaffe agreed to sublease

the land to her. The sublease agreement was not reduced to

writing, nor are there any written terms or conditions

associated with the sublease. 1

7. Gladney was unclear as to her understanding of what the

terms of the lease were supposed to be. She believed Lightfoot

was between 20 and 25 acres in size and would be available for

at least two to three years, maybe up to five years. Gladney's

testimony was not clear as to what she believed the lease amount

to be, but thought $200 to $225 per acre would be about right

"if there was any charge." Gladney did not provide any

rationale as to why she should not be charged for subleasing the

land. Grizzaffe's testimony that he was subleasing Lightfoot to

TGF for $325 an acre--exactly what he was paying for it--is

credible and makes the most sense in light of all the facts.

8. The size of Lightfoot was a major point of contention

between the parties. Inasmuch as there was no written lease,

the parties' understanding can only be gleaned from their

testimony.

9. Gladney opined the land was 20 to 25 acres based on the

fact that TGF had purchased enough plastic to cover 25 acres.

Three rolls of plastic (2,400 square feet) would cover one acre

and TGF had purchased 75 rolls. It takes 2,000 strawberry

plants to cover one acre, and TGF purchased 50,000 plants.

Mathematically, Gladney determined there was 25 acres of

farmable land at Lightfoot.

10. Grizzaffe's opinion was based on the following

evidence: Net acreage is based on 43,560 square feet-per-acre

divided by the row center. Strawberries are planted at a

distance of four feet between the center of each row, leaving

only 10,890 net square feet for planting on the Lightfoot

acreage. This equates to 29.8 row acres, plus space in between

the rows at Lightfoot, the dirt between the beds, the ditches,

and the roadways around the field. So, although there are

20-to-25 acres of ground actually planted, the total gross

acreage is higher (in this case approximately 35 acres).

Farmland is generally leased by calculating the gross acreage,

not merely the part of the land which can be farmed. 2

11. Gladney advised Grizzaffe that between the Lightfoot

farm and another farm she was working, G&S could expect between

50 and 60 acres of berries. Such calculations are incredibly

important for the effective supply of berries to customers by

the broker.

12. Inasmuch as Lightfoot had only drip irrigation

available at the time of the subject sublease and because

overhead irrigation was necessary to grow strawberries, it was

understood between the parties that an overhead irrigation

system would have to be installed. 3 A major dispute between the

parties concerned who would be responsible for installing the

overhead irrigation system. Inasmuch as Gladney believed the

lease to be less than $225 per acre, it is doubtful she was

leasing land with a sprinkler system. Sprinklered farmland

usually rents for considerably more, i.e., in the neighborhood

of $1,000 per acre.

13. Gladney maintains that Grizzaffe specifically promised

to pay for any overhead irrigation system installed on

Lightfoot. This made sense to Gladney, because she believed

Grizzaffe was going to be able to extend his current lease to a

five-year lease. It takes a few years farming a parcel to

recoup the expense of an overhead irrigation system.

14. Grizzaffe, on the other hand, knew his lease, which

was on a year-to-year basis, might only last two or three more

years and that there was no promise of an extension. In fact,

the farm is currently being offered for sale, meaning no long-

term lease would be available to G&S. Grizzaffe told Gladney

that she needed to install the overhead irrigation system in

order to assure a quality product, but made no promise to pay

for it.

15. While TGF was preparing the farm to plant strawberries

for the upcoming season, an overhead sprinkler system was

installed. The system was apparently paid for by Gladney, but

she claims to have used money furnished by Grizzaffe. There

are, however, no written receipts or cancelled checks that

indicate a payment by G&S for the sprinkler system.

16. Certain bills or invoices addressing irrigation were

generated by James Irrigation, Inc., the company hired to

install the overhead system. The James Irrigation statements of

account were addressed to Gladney. Other invoices concerning

the irrigation system were issued by Gator Pipe and Supply and

indicated they were shipped to "Gladney Farms." Gladney made at

least one payment of $45,000 directly to James Irrigation as

documented in the exhibits admitted at final hearing.

17. The total cost of the overhead irrigation system was

approximately $62,000. There are no checks from G&S or

Grizzaffe to Gladney or TGF designated as payment for a

sprinkler system, nor was there any credible testimony that

Grizzaffe would pay for the Lightfoot sprinkler system.

18. When Gladney ceased operations on Lightfoot, she did

not take the Rainbird sprinkler heads or pvc pipes with her. In

fact, Gladney did not take up the plastic used in growing the

strawberries, although that is common practice when leasing land

from another producer. Gladney did not, therefore, assert an

ownership interest in the sprinkler system. The tenor of the

cessation of business between the parties at that time (each

seemed angry at the other) may account for Gladney's failure to

clean up the Lightfoot property and/or retrieve the sprinkler

system. However, Grizzaffe does not assert ownership of the

sprinkler system either. It apparently belongs to the owner of

the land.

19. The next major point of contention between the parties

was the price that G&S was charging TGF to act as intermediary

between the grower (TGF) and the buyer (food store chains or

others). Gladney contends that G&S agreed to handle and

pre-cool all of TGF's berries at the flat rate of $1.00 per box.

Gladney further contends that at least one other broker had

accepted her berries at the same price. Grizzaffe counters that

while his business would not be profitable giving a $1.00 flat

rate, some brokers may be able to offer that to growers for ad

hoc purchases. However, for a regular arrangement wherein a

grower is providing a broker most of its product, that would not

be feasible.

20. Grizzaffe maintains the charge for TGF berries was the

same charged to all other growers, i.e., 50 cents per box for

pre-cooling the berries and 10 percent of the amount of the

sale. G&S may charge a slightly higher pre-cool fee based on

exceptional circumstances, but 50 cents is the norm. The

purchase orders introduced into evidence by G&S include a

brokerage fee of 10 percent and a pre-cool fee of 50 cents per

box, comporting with his version of the oral contract.

21. Again, the agreement between the parties as to the

charge for handling berries was not reduced to writing. The

more credible evidence supports G&S's position.

22. TGF alleges that G&S misrepresented the amount it

would sell TGF's product to buyers for and that G&S did not sell

for the agreed-upon price. Gladney expected her berries to be

sold at the USDA Market Price (to be discussed further below).

Some purchase orders issued by G&S indicate that TGF berries

were sold for several dollars under the USDA Market Price.

23. The USDA Market Price is calculated by USDA utilizing

the daily sale of berries by all growers in an area. The

average price range is printed in a USDA publication and made

available to growers, brokers and buyers as a guideline for

negotiating prices in the future. The USDA publication

apparently comes out almost daily, setting out the prices paid

to local growers on the previous day or days. It is, therefore,

a recap of what has been paid, not a projection of future prices

to be paid.

24. There is also a less structured means of establishing

the "market price." This method involves local growers talking

to each other and determining what each had been paid for their

product on any given day. Growers often discuss market price,

but seldom distinguish between USDA Market Price and the common

market price.

25. Gladney maintains that she spoke to Grizzaffe

regularly and that he always assured her that her berries would

be getting the market price or higher. She seems to believe

that Grizzaffe was talking about the USDA Market Price.

However, it is generally impossible for any broker to guarantee

a price for a product; that is strictly a matter of supply and

demand at any given point in time. However, Grizzaffe would

benefit from charging the highest price he could get, because he

was getting a percentage of the total sale.

26. It is clear from the evidence that TGF berries

sometimes were sold at an amount several dollars less than the

USDA Market Price. There are reasonable explanations for that

fact. For example, if TGF berries were rejected by one buyer,

they would be sold as lower quality berries to another buyer who

had need for that product. If there was a very high supply, but

low demand, at the time the berries were harvested, a lower

price may result. However, other than for those exceptions, G&S

sold TGF berries for the same price that G&S sold other growers'

berries; and due to his long-standing relationship with several

chains, G&S often got the very best price in the area.

27. One other price issue (although not largely pertinent

to the instant dispute) concerned pre-selling berries by

establishing an "ad price" for the product. An ad price was

essentially an agreed-upon price well in advance of the actual

purchase. This was done in order to allow stores the

opportunity to advertise the price of berries in the newspaper

or other circulars because the store would know the price well

enough in advance. For example, the broker and buyer may agree

to a price of $14 per box for berries to be delivered on a date

certain. When that date came, the market price might be $12 per

box or $16 per box, but the buyer would only pay the ad price

($14 per box). So, some of the TGF berries may have been sold

at below USDA Market Price because they were part of an ad price

arrangement.

28. Gladney contends she was underpaid for supervising

another farm for Grizzaffe. There is no documentation

whatsoever as to the agreement between the parties. The farm

was approximately 25 acres, which would produce about 2,000 to

2,500 flats of berries to the acre (or 50,000 to 62,500 flats).

Gladney maintains she was supposed to receive $.25 a flat for

berries produced on that farm as her management fee. No

accounting of berries produced on the farm was presented into

evidence.

29. Gladney received a check for $10,000 from Grizzaffe to

pay the management fee for the farm. Gladney said that $10,000

would be a "low amount" for her work, but did not substantiate

that more was actually owed.

30. Gladney protested offsets from her earned fees that

related to certain products and materials, specifically fuel and

packing materials. However, the bills and receipts presented by

Grizzaffe justify the materials based on the number of berries

produced and packed by Gladney for sale by Grizzaffe. The

offsets appear reasonable and consistent with normal farming

practices. G&S accurately and appropriately billed TGF for

materials, including pallets, eggshells (small cartons used to

ship berries), and fuel. The charges for those materials are

applied to and deducted from TGF's profits on the berries

delivered to G&S.

31. The last primary point of contention between the

parties is whether or not G&S loaned money to TGF and, if so,

how much was loaned, the interest rate, and whether the loan was

repaid. Again, there is no written loan agreement between the

parties.

32. According to Grizzaffe, G&S agreed to lend TGF up to

$50,000 during the 2007-2008 growing season at a flat ten

percent interest rate. The loan was offered in recognition of

the fact that Gladney was just beginning her farming practice

and would need some assistance on the front end. G&S expected

to recoup its loan as TGF began delivering berries for sale.

Gladney maintains that there was no loan to TGF or herself from

Grizzaffe. Rather, she states that any checks for other than

produce were G&S's payments for the promised irrigation system.

33. G&S issued a number of checks to Gladney identified as

"farm advance" or "loan" or "payroll." These checks were issued

prior to the first sale of TGF berries by G&S. That is, TGF was

not yet entitled to a check from the sale of proceeds at the

time the checks were issued. Grizzaffe says the purpose of the

checks was to advance money to Gladney so that she would have

the funds necessary to rent equipment to prepare the land for

planting, to install the sprinkler system, to pay her workers,

and to cover her farming costs before proceeds from sales

starting coming in. The first check representing sale of TGF

berries by G&S was issued to Gladney on February 7, 2008

(although TGF had started delivering berries in November 2007).

It is clear that Grizzaffe was providing money to Gladney before

money had been earned. Whether it is called an advance or a

loan, the net effect is the same.

34. The total amount loaned by Grizzaffe to Gladney was

far in excess of the agreed-upon $50,000. As TGF experienced

unforeseen start-up expenses, Grizzaffe would write a check to

help them meet any shortfall. These checks, which Gladney

characterized as payments for the irrigation system, far exceed

the cost of that system. The most credible evidence is that

Grizzaffe fronted money to Gladney in the amount of $203,717.00.

35. Further, G&S's charges to TGF exactly reflect a ten

percent charge for certain checks, clearly evidencing the loan

as described by Grizzaffe.

36. Platte River Insurance Company ("Platte River") is a

foreign insurance company authorized to do business in Florida.

Platt River bonded G&S as required under Section 604.20, Florida

Statutes (2008). 4 Platte River did not make an appearance or

file an answer to the Complaint filed by Petitioner in this

matter.

CONCLUSIONS OF LAW

37. The Division of Administrative Hearings has

jurisdiction over the parties to and the subject matter of this

proceeding pursuant to Section 120.569 and Subsections

120.57(1), Florida Statutes.

38. Petitioner, who is asserting the affirmative of the

issue in this case, has the burden of proof. Balino v.

Department of Health and Rehabilitative Services , 348 So. 2d

349, 350 (Fla. 1st DCA 1977). The standard of proof is by a

preponderance of the evidence. Florida Department of

Transportation v. J.W.C. Company, Inc. , 396 So. 2d 778 (Fla. 1st

DCA 1981).

39. Strawberries are an "agricultural product" as defined

in Subsection 604.15(1), Florida Statutes.

40. Gladney is a "producer" of agricultural products as

defined in Subsection 604.15(9), Florida Statutes. In the

present case, Gladney and TGF acted in the capacity of a

producer when growing strawberries for sale.

41. Grizzaffe and G&S are "dealers in agricultural

products" as defined in Subsection 604.15(2), Florida Statutes.

Grizzaffe and G&S acted in the capacity of a dealer when

negotiating for and selling Gladney/TGF's berries.

42. Florida-based dealers in agricultural products are

required to obtain a license issued by the Department of

Agriculture and Consumer Services (Department). § 604.17, Fla.

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

Department 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. In this case, G&S possessed

a surety bond from Platte River, and Gladney is allowed to seek

the proceeds of that bond for her claim.

43. The existence of oral contracts between Gladney and

Grizzaffe is implied by the parties' request for (and

acquiescence to) a formal administrative hearing. See , e.g. ,

J.R. Sales, Inc. v. Earl Dicks , 521 So. 29 366, 369 (Fla. 1st

DCA 1988). And inasmuch as both parties agree that oral

contracts existed between them, the contracts would appear to

satisfy the exception to the statute of frauds prohibiting oral

contracts. § 672.201(3)(b), Fla. Stat.

44. However, in the present case there is no meeting of

the minds as to the provisions of the various contracts. In the

sublease, Gladney contends the contract called for Grizzaffe to

lease 25 acres of land with an overhead sprinkler system to be

paid for by Grizzaffe. Grizzaffe intended to lease 35 acres of

land without an overhead sprinkler system. Gladney presumed

$225 or less per acre in rent; Grizzaffe contends it was $325

per acre. That being the case, there is no valid oral contract

as to the land. Likewise, the parties are in complete

disagreement as to what price G&S would pay TGF for its product.

Gladney presumed a $1.00 per box fee; Grizzaffe contends the fee

was $.50 per box, plus a percentage of sales. Thus, the oral

contract concerning sale and purchase of berries is not

enforceable.

45. Although there is no enforceable contract, Gladney can

still pursue her claim under a quantum meruit claim. See

Harrison v. Pritchett , 682 So. 2d 650 (Fla. 1st DCA 1996).

Under the theory of quantum meruit, TGF received a fair and

reasonable price for the berries it produced. When repayment of

loans to G&S was applied, TGF was paid in full for its products.

46. In short, Petitioner Tonya Gladney, d/b/a Tonya

Gladney Farms, did not prove by a preponderance of the evidence

that it is entitled to any further payment for the berries it

produced for G&S.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is

RECOMMENDED that a final order be entered by the Department

of Agriculture and Consumer Services dismissing the Petition of

Tonya Gladney, d/b/a Tonya Gladney Farms.

DONE AND ENTERED this 23rd day of February, 2009, in

Tallahassee, Leon County, Florida.

R. BRUCE MCKIBBEN

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

[phone]

Fax Filing [phone]

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 23rd day of February, 2009.

ENDNOTES

1/ It is apparent that written contracts or agreements are not

routinely used by growers and brokers in this area despite the

substantial sums of money at issue.

2/ In fact, G&S leases a piece of farmland that includes a

wooded area. It must pay the same amount for the wooded portion

of the farm as it pays for the land actually used for farming.

3/ It is not absolutely necessary to have an overhead

irrigation system to grow strawberries, but failure to do so

creates a very large risk for loosing the crop. It is almost

universal practice to have overhead sprinklers in strawberry

fields.

4/ Unless otherwise stated herein, all references to Florida

Statutes shall be to the 2008 version.

COPIES FURNISHED :

Honorable Charles H. Bronson

Commissioner of Agriculture

Department of Agriculture and

Consumer Services

The Capitol, Plaza Level 10

Tallahassee, Florida 32399-0810

Richard Ditschler, General Counsel

Department of Agriculture and

Consumer Services

407 South Calhoun Street, Suite 520

Tallahassee, Florida 32399-0800

Lawrence H. Meuers, Esquire

Steven M. DeFalco, Esquire

Meuers Law Firm, P.L.

5395 Park Central Court

Naples, Florida 34109

Christopher E. Green, Esquire

Department of Agriculture and

Consumer Services

Office of Citrus License and Bond

Mayo Building, Mail Station 38

Tallahassee, Florida 32399-0800

Ian Horn, Esquire

Post Office Box 691

Brandon, Florida 33509-0691

Ron A. Wills

Capitol Insurance Companies

Claims Department

1600 Aspen Commons

Middleton, Wisconsin 53562-4772

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.