17-003275 Other Side Sod, Llc vs. C. Fullerton And Landscaping Co., Inc., And Great American Insurance Group, As Surety Status: Closed Recommended Order on Tuesday, November 7, 2017.

Summary: Respondent is indebted to Petitioner in the amount of $4,981.34 for the purchase of sod. The amount includes Petitioner's filing fee for its complaint filed with the Department.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

OTHER SIDE SOD, LLC,

Petitioner,

vs. Case No. 17 - 3275

C. FULLERTON AND LANDSCAPING

CO., INC. , AND GREAT AMERICAN

INSURANCE GROUP, AS SURETY,

Respondents.

_______________________________/

RECOMMENDED ORDER

Pursuant to notice, a telephonic final hearing in this

cause was held on October 10 , 2017, before Linzie F. Bogan,

Administrative Law Judge of the Division of Administrative

Hearings.

APPEARANCES

For Petitioner: Joel C . Deris o , pro se

Other Side Sod, LLC

3356 Southwest County Road 769

Arcadia, Florida 34269 - 7112

For Respondent s : Jean Fullerton, pro se

C. Fullerton Sod & Landscaping Co., Inc.

Post Office Box 1936

Arcadia, Florida 34265

Douglas J. Aumann , pro se

Senior Claim Representative

Great American Insurance Company

Bond Division

301 East Fourth Street

Cincinnati, Ohio 45202

STATEMENT OF THE ISSUE S

Whether C. Fullerton and Landscaping Co., Inc., is indebted

to Other Side Sod, LLC , for the purchase of sod and pallets ;

and, if so, in what amount.

PRELIMINARY STATEMENT

Other Side Sod, LCC ( Petitioner/Other Side Sod ), has sold

sod to C. Fullerton and Landscaping Co., Inc. (Respondent/

Fullerton) , for many years . By ÐAgricultural Products Dealer

Claim Form , Ñ dated March 20 , 20 17 , and received by the Florida

Dep artment of Agriculture and Consumer Services (Department) on

March 27 , 20 17 , Petitioner claim s that Fullerton ha s not paid

for sod and pallets valued at $ 16,317.74 . Co - Respondent, Great

American Insurance Group (Great American), is RespondentÓs

surety. R espondent timely denied the claim and the matter was

referred to the Division of Administrative Hearings (DOAH) for

final hearing .

At the final hearing, Petitioner presented the testimony of

Joel Deriso , who serves as manager for Other Side Sod.

Responden t offered the testimony of Jean D. Fullerton , who

serves as president of the company.

PetitionerÓs Exhibits 1 and 2 were admitted into evidence.

RespondentÓs Exhibits 1 through 6 were also admitted into

evidence.

A transcript of the final hearing was not filed.

Respondent and Great American filed a Joint Proposed Recommended

Order, which was considered by the undersigned in the

preparation of this Recommended Order. Petitioner did not file

a proposed recommended order . All references to Florida

Statutes will be to 2016, unless otherwise indicated.

FINDING S OF FACT

1. Petitioner is a Florida Limited Liability Corporation

located in Arcadia, Florida, and at all times relevant

hereto was a producer of agricultural products, as defined by

section 604.15(9) , Florida Statutes. Petitioner is also a

Ðdealer in agricultural productsÑ within the meaning of

section 604.15(2).

2. Respondent, during all times relevant hereto, was a

Ðdealer in agricultural products,Ñ within the meaning of section

604.15(2).

3. At all times relevant to this proceeding, Great

American served as surety for Respondent .

4. At all times relevant to this proceeding, Respondent

was a customer of Other Side Sod. Respondent purchased sod from

Petitioner and thereafter resold and installe d the sod to

RespondentÓs customers.

5. Petitioner sold sod to its customers on wooden pallets.

An integral part of each transaction involved the pallets.

6. There are 10 invoices in dispute which cover the period

October 14, 2016 , through February 10, 2017. For the underlying

transactions that relate to the invoices in question, the

following language is contained on each field/delivery ticket:

Terms of Sale : Payment due upon

receipt. All payment[s] applied to

pallet balance first. Interest at the

rate of 1 1/2% per month will be

charged on unpaid invoice amounts after

14 days. Invoices will be charged

$0.02 per square foot additional after

30 days. Purchaser agrees to pay all

costs of collection, including attorney

fees, in [ the ] event it is nec essary to

institute suit for collection. Venue

will be in DeSoto County, Florida. All

Sales F.O.B. Shipping Point.

7. On or about October 14, 2016, Petitioner sent

Respondent invoice 47293 , which showed a balance due of $462 for

pallets related to the sale of Bahia sod. The invoice remained

unpaid for more than 30 days and Petitioner, in accordance with

the terms of sale, amended the original invoice and added a

charge of two cents for each of the 83,200 units of Bahia sod

related to the transaction ($ 1,664). Petitioner also added to

the invoice a charge of $124.80 for sales tax related to the

late payment penalty ($1,664 x 7.50 percent ).

8. On or about October 23, 2016, Petitioner sent

Respondent invoice 47378 , which showed a balance due of $224 for

pallets related to the sale of Bahia sod. The invoice remained

unpaid for more than 30 days and Petitioner, in accordance with

the terms of sale, amended the original invoice and added a

charge of two cents for each of the 70,400 units of Bahia sod

relate d to the transaction ($1,408). Petitioner also added to

the invoice a charge of $105.60 for sales tax related to the

late payment penalty ($1,408 x 7.50 percent ).

9. On or about October 24, 2016, Petitioner sent

Respondent invoice 47420 , which showed a b alance due of $280 for

pallets related to the sale of Bahia sod. The invoice remained

unpaid for more than 30 days and Petitioner, in accordance with

the terms of sale, amended the original invoice and added a

charge of two cents for each of the 16,000 un its of Bahia sod

related to the transaction ($320). Petitioner also added to the

invoice a charge of $24 for sales tax related to the late

payment penalty ($320 x 7.50 percent ).

10. On or about November 13, 2016, Petitioner sent

Respondent invoice 47549 , which showed a balance due of $1,526

for pallets related to the sale of Bahia sod. The invoice

remained unpaid for more than 30 days and Petitioner, in

accordance with the terms of sale, amended the original invoice

and added a charge of two cents for e ach of the 103,200 units of

Bahia sod related to the transaction ($2,064). Petitioner also

added to the invoice a charge of $154.80 for sales tax related

to the late payment penalty ($2,064 x 7.50 percent ).

11. On or about December 6, 2016, Petitioner se nt

Respondent invoice 47755 , which showed a balance due of $434 for

pallets related to the sale of Bahia sod. The invoice remained

unpaid for more than 30 days and Petitioner, in accordance with

the terms of sale, amended the original invoice and added a

charge of two cents for each of the 30,400 units of Bahia sod

related to the transaction ($608). Petitioner also added to the

invoice a charge of $45.60 for sales tax related to the late

payment penalty ($608 x 7.50 percent ).

12. On or about January 8, 2 017, Petitioner sent

Respondent invoice 48093 , which showed a balance due of $1,256

for 12,800 units of Bahia sod, $224 for a pallet deposit, and

$72 for sales tax. The invoice remained unpaid for more than 30

days and Petitioner, in accordance with the t erms of sale,

amended the original invoice and added a charge of two cents for

each of the 12,800 units of Bahia sod related to the transaction

($256). Petitioner also added to the invoice a charge of $19.20

for sales tax related to the late payment penal ty ($256 x 7.50

percent ).

13. On or about December 13, 2016, Petitioner sent

Respondent invoice 48166 , which showed a balance due of $343 for

pallets related to the sale of Bahia sod. The invoice remained

unpaid for more than 30 days and Petitioner, in a ccordance with

the terms of sale, amended the original invoice and added a

charge of two cents for each of the 163,200 units of Bahia sod

related to the transaction ($3,264). Petitioner also added to

the invoice a charge of $244.80 for sales tax related t o the

late payment penalty ($3,264 x 7.50 percent ).

14. On or about January 29, 2017, Petitioner sent

Respondent invoice 48285 , which showed a balance due of $3,000

for 40,000 units of Bahia sod, $308 for a pallet deposit, and

$225 for sales tax (total = $3,533). On February 3, 2017,

Respondent submitted to Petitioner partial payment in the amount

of $3,210.50, which left an unpaid balance of $322.50. The

balance remained unpaid for more than 30 days and Petitioner, in

accordance with the terms of sale, amended the original invoice

and added a charge of two cents for each of the 40,000 units of

Bahia sod related to the transaction ($800). Petitioner also

added to the invoice a charge of $60 for sales tax related to

the late payment penalty ($800 x 7.50 p ercent ).

15. On or about January 31, 2017, Petitioner sent

Respondent invoice 48301 , which showed a balance due of $390 for

5,200 units of Bahia sod, $91 for a pallet deposit, and $29.25

for sales tax (total = $510.25). On February 15, 2017,

Respondent s ubmitted to Petitioner partial payment in the amount

of $468.33, which left an unpaid balance of $41.92. 1/ The

balance remained unpaid for more than 30 days and Petitioner, in

accordance with the terms of sale, amended the original invoice

and added a cha rge of two cents for each of the 5,200 units of

Bahia sod related to the transaction ($104). Petitioner also

added to the invoice a charge of $7.80 for sales tax related to

the late payment penalty ($104 x 7.50 percent ).

16. On or about February 10, 2017 , Petitioner sent

Respondent invoice 48409 , which showed a balance due of $390 for

5,200 units of Bahia sod, $21 for a pallet deposit, and $29.25

for sales tax (total = $440.25). On February 15, 2017,

Respondent submitted to Petitioner partial payment in the amount

of $398.33, which left an unpaid balance of $41.92. The balance

remained unpaid for more than 30 days and Petitioner, in

accordance with the terms of sale, amended the original invoice

and added a charge of two cents for each of the 5,200 units of

Bahia sod related to the transaction ($104). Petitioner also

added to the invoice a charge of $7.80 for sales tax related to

the late payment penalty ($104 x 7.50 percent ).

CONCLUSIONS OF LAW

17. DOAH has jurisdiction over the parties and the subject

matter of this proceeding. §§ 120.569 , 120.57(1) , and 604.21(6),

Fla. Stat.

18. The Department is the state agency responsible for

licensing d ealers in agricultural products and investigating and

taking action on complaints against such dealers. §§ 604 .15

through 604.34, Fla. Stat.

19. The definition of Ðagricultural productsÑ includes sod

that is produced in Florida. § 604.15(1), Fla. Stat. The sod

grown by Petitioner is an agricultural product within the meaning

of section 604.15(1).

20. The defin ition 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 for

sale[.]Ñ § 604.15( 2 ), Fla. Stat. Respondent is a dealer in

agricultural products within the meaning of section 604.15( 2 ).

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

the conditions of an agreement made with a dealer in

agricultural products, may file a complaint with the Department

against the dealer and against the surety company.

See § 604.21(1)(a), Fla. Stat.

22. As the Petitioner, Other Side Sod bears the burden of

proving the allegations of its complaint by a preponderance of

the evidence. See DepÓt of Ba nking & Fin., Div. of Sec. & Inv.

Prot. v. Osborne Stern & Co. , 670 So. 2d 932, 934 (Fla. 1996)

(ÐThe general rule is that a party asserting the affirmative of

an issue has the burden of presenting evidence as to that

issueÑ); Fla. DepÓt of Transp. v. J.W .C. Co. , 396 So. 2d 778,

788 (Fla. 1st DCA 1981); Vero Beach 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).

2 3. Section 604.21(1)(a) provides as follows:

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 agricultura l 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 includ e 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 t he 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, t he dealer in

agricultural products shall reimburse

the complainant for the $50 filing fee

as part of the settlement of the claim.

24. As part of the claim, Petitioner seeks recovery of the

two - cent late payment penalty, and related taxes, charged as a

result of RespondentÓs failure to comply with the 30 - day payment

provision contained in the terms of sale. On its face, the

30 - day late penalty provision kicks in only if Respondent is

delinquent in remitting payment. Petitioner suggests that the

langua ge in section 604.21(1)(a), which allows for recovery of

Ðany additional charges necessary to effectuate the sale,Ñ

authorizes the recovery of the late payment penalty.

25. Chapter 604 does not define the term Ðnecessary.Ñ

According to Merriam - Webster, t he word ÐnecessaryÑ means

Ðabsolutely needed.Ñ Merriam - Webster (2017),

https://www.merriam - webster.com/dictionary/necessary . There is

no credible evidence that a two - cent per square foot late

payment penalty is a charge that is absolutely needed in order

to effectuate the sale of sod, and accordingly this penalty is

not recoverable as an item of damages authorized by section

604.21. 2/ Because section 604.21 does not allow, in this

instance, for the recovery of the late payment penalty, then it

is also th e case that PetitionerÓs claim for the recovery of

additional sales tax is not authorized.

26. Petitioner proved that it is entitled to recover the

amounts set forth in the original invoices, less the partial

payments received from Respondent. Accordingl y, Respondent owes

Petitioner $4,931.34.

27. Petitioner a lso seeks recovery of the filing fee paid

to the Department for the complaint filed against Respondents on

March 27, 2017 . Petitioner paid a $50 filing fee, which is

specifically recoverable agains t Respondent.

See § 6 04.21(1)(a) , Fla. Stat .

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 approving the claim of

Other Side S od, LLC, against C. Fullerton and Landscaping Co.,

Inc., in the amount of $4,981.34.

DONE AND ENTERED this 7 th day of November , 2017 , in

Tallahassee, Leon County, Florida.

S

LINZIE F. BOGAN

Administrative Law Judge

Divisi on 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 7 th day of Novembe r , 2017 .

ENDNOTE S

1/ Ms. Fullerton, on behalf of Respondent, made partial payments

on invoices 48301 and 48409 because she mistakenly believed that

the parties agreed on a lower per unit rate as the purchase

price for the sod.

2/ Mr. Deriso testified that he added the penalty provision to

the sales agreement because he had experienced difficulty with

Respondent timely remitting payment. It was his hope that the

penalty provision would encourage Respondent to timely remit

payment. This testimony clea rly establishes that the penalty

provision was optional and not necessary to effectuate the sale

of the sod.

COPIES FURNISHED:

W. Alan Parkinson, Bureau Chief

Department of Agriculture and Consumer Services

Rhodes Building, R - 3

2005 Apalachee Parkway

Ta llahassee, Florida 32399 - 6500

(eServed)

Jean Fullerton

C. Fullerton Sod & Landscaping Co., Inc.

Post Office Box 1936

Arcadia, Florida 34265

Joel C . Der i s o

Other Side Sod, LLC

3356 Southwest County Road 769

Arcadia, Florida 34269 - 7112

(eServed)

Dougla s J. Aumann

Senior Claim Representative

Great American Insurance Company

Bond Division

301 East Fourth Street

Cincinnati, Ohio 45202

(eServed)

Honorable Adam Putnam

Commissioner of Agriculture

Department of Agriculture and Consumer Services

The Capito l, Plaza Level 10

Tallahassee, Florida 32399 - 0810

Lorena Holley, General Counsel

Department of Agriculture and Consumer Services

407 South Calhoun Street, Suite 520

Tallahassee, Florida 32399 - 0800

(eServed)

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All pa rties 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.