15-003728 Gateway Farms, Llc vs. Landscape Service Professionals, Inc., And The Gray Insurance Company, As Surety Status: Closed Recommended Order on Friday, March 18, 2016.

Summary: Petitioner established that it is entitled to payment from Respondent for 58 slash pine trees, in the amount of $7,983.46.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

GATEWAY FARMS, LLC,

Petitioner,

vs. Case No. 15 - 3728

LANDSCAPE SERVICE PROFESSIONALS,

INC., AND THE GRAY INSURANCE

COMPANY, AS SURETY,

Respondent s .

_______________________________/

RECOMMENDED ORDER

Pursuant to notice, a final hearing in this cause was held

via video teleconference with locations in Fort Lauderdale and

Gainesville, Florida, on December 9, 2015, before W. David

Watkins, a designated Administrative Law Judge of the Division

of Administrative Hearings (Division).

APPEARANCES

For Petitioner: David Hajos, pro se

Gateway Farms, LLC

22413 Northwest 227 th Drive

High Springs, Florida 32643

For Respondent: Mark John Lab ate, Esquire

Mark J. Labate, P.A.

2748 East Commercial Boulevard

Fort Lauderdale, Florida 33308

STATEMENT OF THE ISSUE S

Whether Petitioner, Gateway Farms, LLC, is entitled to

payment from Landscape Servi ce Professionals, Inc., and the

Gray Insurance Company, as Surety, pursuant to sections 604.15

through 604.34, Florida Statutes (2015), for the purchase of

trees; and, if so, in what amount.

PRELIMINARY STATEMENT

On May 1, 2015, Gateway Farms, LLC (Gateway ), filed an

Agricultural Products Dealer Clai m Form (claim) with the

Florida Department of Agriculture and Consumer Services

(Department), alleging that Landscape Service Professionals,

Inc. (Landscape) , and its surety, The Gray Insurance Company

(Insuranc e Company), owed Gateway payment for slas h pine,

bald cypress, and sable palm trees supplied by Gateway. The

claim was for a total of $13,462.30, 1/ which included shipping

costs for the trees and applicable taxes. Gateway is also

claiming a $50.00 filing fee for filing the claim. The

Department provided Notice of the claim to Landscape and the

Insurance Company. Respondent Landscape answered the Complaint

on June 5 , 2015 . By letter dated June 26 , 2015 , the Department

referred the matter to the Division to schedule an evidentiary

hearing.

The matter was initially sch eduled for hearing on

September 11, 2015, in Gainesville, Florida. The final hearing

was continued once, and at the request of Landscape, was

rescheduled for a video teleconference hearing on December 9 ,

2015 .

At the final hearing , Gateway presented the testimony of

its owner, David Hajos , and offered two exhibits in evidence.

Respondents presented the testimony of Sandra Benton,

Guy Michaud, and John Harris, who was accepted as an expert.

Respondents offered 14 exhibits in evidence.

At the conclusion of the hearing , the parties agreed that

proposed recommended orders would be due 10 days following the

filing of the official hearing transcript at the Division. The

one - volume final hearing Transcript was filed on January 20,

2016. Respondents timely filed their P roposed R ecommended O rder

(PRO) by the established deadline, February 1, 2016. Twe n ty - two

days later, on February 23, 2016, Petitioner filed its PRO.

PetitionerÓs PRO was not tim ely filed, and accordingly, has not

been considered in the preparation of this Recommended Order.

Unless otherwise indicated, citations are to the 2015

version of the Florida Statutes.

FINDING S OF FACT

The Parties

1 . Gateway is a producer and seller of ag ricultural

products, including slash pine trees. Gateway operates tree

farms on 200 acres in five different locations in Columbia,

Alachua, and Suwannee Counties. David Hajos is the owner and

principal operator of Gateway.

2 . Mr. Hajos has 17 years of e xperience in growing,

harvesting, and selling pine and other species of trees in

Florida.

3 . Respondent Landscape is a Florida licensed dealer in

agricultural products, pursuant to chapter 604. Landscape is a

full - service landscape business located in Tamarac, Florida.

Sandy Benton has been the president of Landscape for 18 years.

4 . Respondent , Insurance Company , filed a denial of the

claim and was represented at hearing by LandscapeÓs counsel.

5 . Gateway has been doing business with Landscape f or many

years, with no indication of prior problems relating to the

quality of trees provided. Lynn Griffith, LandscapeÓs plant and

soil expert, considers Gateway to be a competent and

professional grower.

The Setting

6 . At all relevant times, Landscape was a contractor

responsible for installing landscaping at the Palm Beach County

Solid Waste Authority (SWA) site on Jog Road in Palm Beach

County, Florida.

7 . Pursuant to orders placed by Landscape, Gateway sold a

total of 148 slash pines for use at th e SWA site. The invoices

for those pines are dated Januar y 22 and 23, and February 9

and 16, 2015. Upon their arrival at the site, authorized

personnel of Landscape received, inspected, and accepted the

148 slash pine trees. No problems or concerns were expressed

regarding the delivery or condition of the slash pines.

The Dispute Giving Rise to this Proceeding

8 . Between 20 and 30 of the trees ordered from Gateway

were intended as replacement trees for the approximately

150 slash pines provided by six o ther vendors that had been

planted by Landscape, and then died. When the dead trees were

removed by Landscape , pine beetles were observed infesting the

trees.

9 . Within several weeks of planting, 58 of the slash pines

purchased from Gateway began to show signs of decline, resulting

in their eventual death. La ndscape consulted with the

Palm Beach County Extension Service and industry professionals

as to the cause of the death and decline of the slash pine

trees, who undertook an investigation into the sam e.

10 . Slash pine trees are very sensitive and can be easily

stressed. Stress can be caused by a variety of factors

including: transplanting; harsh handling; bark exposure to

sunlight, including superficial wounds to the bark; too much or

too little wa ter; or planting too deeply. The stress will cause

a tree to emit chemicals that attract beetles, which inhabit the

trees and may kill a stressed tree within a week or two of the

infestation.

11 . In March 2015, Lynn Griffith, an agricultural

consultant, conducted an SWA site visit. Mr. Griffith noted

that a majority of the planted pines were healthy, but there

were some that were not doing well; some had holes in them

indicative of a pine beetle infestation.

12 . In h is report dated March 12, 2015, M r . Griffith

opined on the impact of the ambrosia (pine) beetle infestation

on the slash pines:

The quantities of boreholes in some of the

dead or declining pines would lead me to

conclude that borers could be a primary

cause of death, but in other cases the

number of holes was low, indicating the pine

decline was initiated by other factors.

13 . In an e - mail dated April 24, 2015, Ms. Benton advised

Gateway (and JWD Trees, another supplier of slash pines to the

SWA site) that the cause of the death and declin e of the

slash pine trees w ere because the two suppliers failed to

properly prepare them in the nursery, and had sold them to

Landscape with root systems inadequate to support the normal

performance of the plant.

14 . At hearing, Ms. BentonÓs opinion regar ding the cause

of death of the pines was echoed by John Harris, accepted as an

expert in landscape economics and arborism. Mr. HarrisÓ s

opinion centered on only one possible explanation for the treesÓ

demise: a failure to have an adequate root system or an

inability of the roots to generate new growth. Typically, this

is caused by improper Ðhardening offÑ of the root system by the

grower. However, on cross - examination , Mr. Harris acknowledged

that while pine beetles typically infest stressed trees, if t he

beetle population builds up enough in an area they will attack

otherwise healthy trees.

15 . At hearing , Mr. Hajos testified that the pine trees he

supplied to Landscape had been properly hardened off for a

period of six weeks:

Hardened off is a process when you dig a

tree and you hold it until it starts to

regenerate new roots, so instead of just

digging it up and selling it we dig it up

and hold it under optimal irrigation and

nursery conditions before we ship the tree.

16 . Mr. Hajos further testifie d that any trees that are

going to die due to the stress of being dug out of the ground

will die during the hardening off process.

17 . Mr. Hajos attributed the death of the Gateway trees to

several factors, including stress caused by improper lifting of

t he trees during loading and unloading, stress caused by a delay

in planting the trees after they arrived at the SWA site, and

the pre - existing pine beetle infestation.

18 . Mr. Hajos examined a photograph received in evidence

and explained that it showed a tree being improperly lifted by

Landscape personnel during unloading. The photograph showed the

strap around the tree trunk doing the primary lifting. The

result is that rather than distributing the pressure between the

trunk and the strap on the root b all, the root ball will be

loosened , which will stress the tree.

19 . Mr. Hajos testified that he was aware that the

Gateway trees that had been delivered to the SWA site were left

on the ground for days before being planted. This testimony was

corrobora ted by LandscapeÓs Daily Job Report log which reflected

the delivery of the first load of Gateway pines to the SWA site

on January 23 and 24, 2015, but that planting of those trees did

not begin until January 29 , 2015 .

20 . On one occasion , a Landscape tru ck that had picked up

trees from Gateway , broke down in Ocala on its return trip to

Palm Beach County and had to ret urn to the Gateway site in

High Springs. There , the trees were unloaded, and then reloaded

onto a different truck where they were delivered two days later

to the SWA job site. This inordinate delay and additional

loading and unloading further stressed the trees.

21 . Once Landscape became aware that it had a beetle

infestation at the SWA site, it began a preventative spray

program. However, once a pine beetle has entered the bark of a

pine tree preventative spraying will be ineffective at

eradicating the pest. Newly planted pine trees at the SWA site

were not sprayed on the day of planting, thereby providing the

pine beetles an opportunity to infest the new trees.

22 . Guy Michaud was Landscape Ós job foreman at the

SWA site. Mr. Michaud has been in the business of planting

trees since 1983, and has worked for Landscape for 14 years.

Mr. Michaud could not testify with certainty that the Gat eway

trees died of inadequate roots, as opposed to a beetle

infestation.

23 . None of the other species of trees sold by Gateway for

use at the SWA site experienced problems.

24 . Based on the totality of the evidence, it is more

likely than not that a com bination of factors contributed to the

SWA slash pine deterioration, including delays in planting the

trees after delivery, rough handling, and the beetles. None of

these causes are attributable to the actions of Gateway.

Likewise, the greater weight of the evidence does not support a

conclusion that the trees sold by Gateway to Landscape were non -

viable nursery stock.

25 . Subsequent to filing its claim in the amount of

$13,462.30 with the Department, Gateway received a payment of

$5,528.84 from Landscap e. Thus, the unpaid balance due Gateway

for the 58 slash pines is $7,933.46.

26 . Gateway is entitled to payment in the amount of

$7,933.46 for the slash pine trees it provided to Landscape.

Besides the amount set forth above, Gateway claims the sum of

$ 50.00 paid for the filing of the claim against Landscape and

its bond. The total sum owed to Gateway by Landscape is

$7,983.46.

CONCLUSIONS OF LAW

27 . The Division has jurisdiction over the parties and the

subject matter of this proceeding. §§ 120.569, 120.57(1),

and 604.21(6), Fla. Stat.

28 . The Department is the state agency responsible for

licensing dealers in agricultural products and investigating and

taking action on complaints against such dealers. §§ 604.15

through 604.34, Fla. Stat.

29 . The d efinition of Ðagricultural productsÑ includes the

Ðnatural products of the . . . farm [and] nursery . . . produced

in the state[.]Ñ £ 604.15(1), Fla. Stat. The trees produced

and sold by Gateway are Ðagricultural productsÑ within the

meaning of section 6 04.15(1).

30 . The definition of a Ðdealer in agricultural productsÑ

includes any, Ðcorporation . . . engaged within this state in

the business of purchasing, receiving, or soliciting

agricultural products from the producer . . . for resale or

processing f or sale[.]Ñ £ 604.15(1), Fla. Stat. Landscape is a

dealer in agricultural product s within the meaning of

section 604.15(1).

31 . Any business claiming to be damaged by any breach of

the conditions of an agreement made with a dealer in

agricultural produc ts may file a complaint with the Department

against the dealer and against the surety company. See

§ 604.21(1)(a), Fla. Stat.

32 . The burden of proof in an administrative proceeding is

on the party asserting the affirmative of an issue. DepÓt of

Banking & Fin. v. Osborne, Stern & Co. , 670 So. 2d 932 (Fla.

1996); Ferris v. Turlington , 510 So. 2d 292 (Fla. 1987);

Evans Packing Co. v. DepÓt of Agric. & Consumer Servs. , 550 So.

2d 112 (Fla. 1st DCA 1989). In this case, Petitioner must prove

by a preponderan ce of the evidence that it provided goods or

services to Respondent and that Respondent failed to pay for

such goods or services.

33 . Gateway bears the burden of proving the allegations of

its complaint by a preponderance of the evidence. See DepÓt of

Ba nking & Fin. v. Osborne Stern & Co. , supra (ÐThe general rule

is that a party asserting the affirmative of an issue has the

burden of presenting evidence as to that issue.Ñ); DepÓt of

Transp. v. J.W.C. Co. , 396 So. 2d 778, 788 (Fla. 1st DCA 1981);

Vero Bea ch Land Co., LLC v. IMG Citrus, Inc. , Case No. 08 - 5435

(Fla. DOAH Mar. 4, 2009; Fla. DACS July 20, 2009), affÓd ,

IMG Citrus, Inc. v. Westchester Fire Ins. Co. , 46 So. 3d 1014

(Fla. 4th DCA 2010).

34 . Gateway has satisfied its burden. As set forth in the

Findings of Fact, Respondent , Landscape , owes Gateway $7,933.46

for 58 slash pine trees.

35 . Gateway additionally seeks recovery of the filing fee

paid to the Department for the claim filed against Respondents

on May 1, 2015. Gateway paid a $50 filing fe e, which is

specifically recoverable against Respondent. See

§ 604.21(1)(a), Fla. Stat. (ÐIn 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 o f the settlement of the claim.Ñ).

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 a pproving the

claim of Gateway Farms, LL C, against Landscape Professional

Services, Inc., in the total amount of $7,983.46 ($7,933.46 plus

$50 filing fee); and if Landscape Professionals Services, Inc.,

fails to timely pay Gateway Farms, LLC, as ordered, that

Respondent, The Gray Insurance Compa ny, as Surety, be ordered to

pay the Department of Agriculture and Consumer Services as

required by section 604.21, Florida Statutes, and the Department

reimburse the Petitioner as set out in section 604.21, Florida

Statutes.

DONE AND ENTERED this 1 8 th day of March , 2016 , in

Tallahassee, Leon County, Florida.

S

W. DAVID WATKINS

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399 - 3060

(850) 488 - 9675

Fax Filing (850) 921 - 6847

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 1 8 th day of March , 2016 .

ENDNOTE

1/ The evidence established that payment had been made for the

sabal palms and cypress purchased from Gateway. At issue is

payment for 58 slash pines, totaling $7,933.46.

COPIES FURNISHED:

Tina Robinson

Department of Agriculture and Consumer Services

Division of Consumer Services

Bureau of Mediation and Enforcement

2005 Apalachee Parkway

Tallahass ee, Florida 32399 - 0800

Sandra R. Wilson - Benton

Landscape Service Professionals, Inc.

6115 Northwest 77th Way

Tamarac, Florida 33321

Cristopher Stephen Rapp, Esquire

Tobin & Reyes, P.A.

Mizner Park Office Tower, Suite 510

225 Northeast Mizner Boulev ard

Boca Raton, Florida 33432

(eServed)

Mark John Labate, Esquire

Mark J. Labate, P.A.

2748 East Commercial Boulevard

Fort Lauderdale, Florida 33308

(eServed)

David Hajos

Gateway Farms, LLC

22413 Northwest 227th Drive

High Springs, Florida 32643

Lor ena Holley, General Counsel

Department of Agriculture and Consumer Services

407 South Calhoun Street, Suite 520

Tallahassee, Florida 32399 - 0800

(eServed)

Honorable Adam Putnam

Commissioner of Agriculture

Department of Agriculture and Consumer Services

Th e Capitol, Plaza Level 10

Tallahassee, Florida 32399 - 0810

Paul J. Pagano, Bureau Chief

Bureau of Mediation and Enforcement

Department of Agriculture and Consumer Services

Rhodes Building, R - 3

2005 Apalachee Parkway

Tallahassee, Florida 32399 - 6500

(eServ ed)

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.