2000, Respondent Heartland Citrus, Inc. (hereinafter "Respondent") failed to make full payment promptly to five sellers of the agreed purchase prices in the total amount of $119,031.56 for 110 lots of perishable agricultural commodities which it purchased, received, and accepted in interstate commerce, and failed to remit net proceeds to four growers, in the total amount of $86,882.75, for 101 lots of perishable agricultural commodities consigned to and sold by Respondent in interstate commerce. A copy of the Complaint was mailed to Respondent by certified mail at its last known principal place of business on July 12, 2002, and was returned as refused to the office of the Hearing Clerk on August 19, 2002. A copy of the Complaint was re-mailed to Respondent by regular mail on September 10, 2002 pursuant to Section 1.147 (c) of the Rules of Practice Governing Formal Adjudicatory Proceedings Instituted by the Secretary Under Various Statutes (7 C.F.R. §1.130 et seq., hereinafter "Rules of Practice"). Respondent has not answered the Complaint. The time for filing an Answer having expired, and upon motion of the Complainant for the issuance of a Default Order, the following Decision and Order shall be issued without further procedure pursuant to Section 1.139 of the Rules of Practice. Finding of Fact 1. Respondent is a corporation organized and existing in the state of Florida. Its business address is 712 Gooch Road, Fort Meade, Florida 33841. Its mailing address is P.O. Box 10, Fort Meade, Florida 33841. 2. At all times material herein, Respondent was licensed under the PACA. License number 960127 was issued to Respondent on October 18, 1995. This license terminated on October 18, 2000, pursuant to Section 4(a) of the PACA (7 U.S.C. §499d(a)), when Respondent failed to pay the required annual renewal fee. 3. The Secretary has jurisdiction over Respondent and the subject matter involved herein. 4. As set forth in paragraph III of the Complaint, Respondent, during the period January 2000 through June 2000, failed to make full payment promptly to five sellers of the agreed purchase prices in the total amount of $119,031.56 for 110 lots of perishable agricultural commodities, which it purchased, received, and accepted in interstate commerce. 5. As set forth in paragraph IV of the Complaint, Respondent, during the period November 1999 through June 2000, failed to remit net proceeds to four growers, in the total amount of $86,882.75, for 101 lots of perishable 62 Agric. Dec. 373 agricultural commodities consigned to and sold by Respondent in interstate commerce. Conclusions Respondent's failure to make full payment promptly with respect to the 110 transactions set forth in Finding of Fact No. 4 above, and failure to remit net proceeds to growers with respect to the 101 transactions set forth in Finding of Fact No. 5 above constitute wilful, repeated and flagrant violations of Section 2(4) of the Act (7 U.S.C. § 499b(4)), for which the Order below is issued. Order Respondent has committed willful, flagrant and repeated violations of Section 2 of the Act (7 U.S.C. 499b), and the facts and circumstances of the violations shall be published. This order shall take effect on the 11th day after this Decision becomes final. Pursuant to the Rules of Practice, this Decision will become final without further proceedings 35 days after service hereof unless appealed to the Secretary by a party to the proceeding within 30 days after service as provided in Sections 1.139 and 1.145 of the Rules of Practice (7 C.F.R. 1.139 and 1.145). Copies hereof shall be served upon parties. [This Decision and Order became final February 7, 2003, and effective February 18, 2003. - Editor] In re: D & C PRODUCE, INC. PACA Docket No. D-02-0005. Decision Without Hearing by Reason of Admissions. Filed January 21, 2002. PACA - Default - Payment, failure to make prompt. Clara Kim, for Complainant William L. Yaeger, for Respondent Decision and Order issue by James W. Hunt, Administrative Law Judge. Preliminary Statement This is a disciplinary proceeding under the Perishable Agricultural Commodities Act, 1930, as amended (7 U.S.C. § 499a et seq.; hereinafter referred to as the "Act" or "PACA") and the regulations issued thereunder (7 C.F.R. Part 46; hereinafter referred to as the "Regulations"), instituted by a Complaint filed on January 8, 2002, by the Associate Deputy Administrator, Fruit and Vegetable Programs, Agricultural Marketing Service, United States Department of Agriculture. Complainant alleged that Respondent D & C Produce, Inc., (hereinafter "Respondent"), during the period May 2000 through June 2001, failed to make full payment promptly to 8 sellers of the agreed purchase prices in the total amount of $454,017.20 for 47 lots of perishable agricultural commodities which it purchased, received and accepted in interstate commerce. Complainant also alleged that PACA license number 000960, which was issued to Respondent on April 5, 2000, terminated on April 5, 2001, when it was not renewed. The Complaint requested a finding be made that Respondent committed willful, flagrant and repeated violations of Section 2(4) of the PACA (7 U.S.C. § 499b(4)) and an order that the facts and circumstances of Respondent's violations be published. On March 21, 2002, Respondent filed a voluntary petition in the United States Bankruptcy Court for the Middle District of North Carolina pursuant to Chapter 7 of the Bankruptcy Code (11 U.S.C. § 701 et seq.), designated Case Number 02-80864, in which Respondent admitted owing the 8 sellers named in the Complaint amounts totaling $545,125.60. On March 22, 2002, Respondent filed an Answer to the Complaint with the Department hearing clerk. In that Answer, Respondent's counsel William L. Yaeger wrote "It is my understanding that Chad Barnett, the President of the now bankrupt [Respondent] D & C Produce, Inc., admits to the material allegations of the complaint and will consent to the sanctions dictated by PACA, including that he will be barred for up to two years from holding a license under PACA regulations (emphasis added)..." In the attachment to that Answer, President Barnett wrote, "I, Chad Barnett, agree to the consent work out [sic] by Bill Yagers [sic] office and the PACA, concerning my rights and responsibilities in any business governed by the PACA.” Complainant also filed a motion with supporting memorandum seeking a Decision Without Hearing by Reason of Admissions made by Respondent in its Answer and in its bankruptcy petition. In that motion, Complainant also noted that official notice may be taken of the documents that Respondent has filed in connection with its Chapter 7 bankruptcy proceeding. Based upon a careful consideration of the pleadings and precedent decisions cited by Complainant, official notice is taken of the bankruptcy documents filed by Respondent and 62 Agric. Dec. 373 the following Decision is issued without further procedure or hearing pursuant to Section 1.139 of the Rules of Practice (7 C.F.R. § 1.139). Pertinent Statutory Provisions Section 2(4) of the PACA (7 U.S.C. § 499b(4)) provides: It shall be unlawful in or in connection with any transaction in interstate or foreign commerce: (4) For any commission merchant, dealer, or broker to make, for a fraudulent purpose, any false or misleading statement in connection with any transaction involving any perishable agricultural commodity which is received in interstate or foreign commerce by such commission merchant, or bought or sold, or contracted to be bought, sold, or consigned, in such commerce by such dealer, or the purchase or sale of which in such commerce is negotiated by such broker; or to fail or refuse truly and correctly to account and make full payment promptly in respect of any transaction in such commodity to the person with whom such transaction is had; or to fail, without reasonable cause, to perform any specification or duty, express or implied, arising out of any undertaking in connection with any such transaction; or to fail to maintain the trust as required under section 5(c) of this title. However, this paragraph shall not be considered to make the good faith offer, solicitation, payment, or receipt of collateral fees and expenses, in and of itself, unlawful under this Act. (emphasis added) Section 8(a) of the PACA (7 U.S.C. § 499h(a)) provides: (a) Whenever (1) the Secretary determines, as provided in section 6 of this Act (7 U.S.C. § 499f) that any commission merchant, dealer, or broker has violated any of the provisions of section 2 of this Act (7 U.S.C. § 499b), or (2) any commission merchant, dealer, or broker has been found guilty in a Federal court of having violated section 14(b) of this Act (7 U.S.C. § 499n(b)), the Secretary may publish the facts and circumstances of such violation and/or, by order, suspend the license of such offender for a period not to exceed ninety days, except that, if the violation is flagrant or repeated, the Secretary may, by order, revoke the license of the offender. Pertinent Regulation Section 46.2(aa) of the Regulations (7 C.F.R. § 46.2 (aa)) provides: (aa) "Full payment promptly" is the term used in the Act in specifying the period of time for making payment without committing a violation of the Act. "Full payment promptly," for the purpose of determining violations of the Act, means: (5) Payment for produce purchased by a buyer, within 10 days after the day on which the produce is accepted; (11) Parties who elect to use different times of payment than those set forth in paragraphs (aa)(1) through (10) of this section must reduce their agreement to writing before entering into the transaction and maintain a copy of the agreement in their records. If they have so agreed, then payment within the agreed upon time shall constitute "full payment promptly", Provided, That the party claiming the existence of such an agreement for time of payment shall have the burden of proving it... Findings of Fact 1. D & C Produce, Inc., (hereinafter "Respondent") is a corporation organized and existing under the laws of the State of North Carolina. Its business address while operating was 2145 Foxfire Road, Suite 12-B, Jackson Springs, North Carolina 27281. Its mailing address while operating was P.O. Box 1016, Vass, North Carolina 28394. Its current addresses are: c/o Chad Barnett, 1607 Hoffman Road, Jackson Springs, North Carolina 27821; and c/o Chad Barnett, 153 Vivian Street, West End, North Carolina 27376. 2. At all times material herein, Respondent was either licensed or operating subject to license under the provisions of the PACA. PACA license number 000960 was issued to Respondent on April 5, 2000. That license terminated on April 5, 2001, when Respondent failed to pay the applicable annual fee to renew its license. 3. Respondent, during the period May 2000 through June 2001, on or about the dates and in the transactions set forth in paragraph III of the Complaint, failed to make full payment promptly to 8 sellers of the agreed purchase prices in the total amount of $454,017.20 for 47 lots of perishable agricultural commodities which it purchased, received and accepted in interstate commerce. 4. On March 21, 2002, Respondent filed a voluntary petition pursuant to Chapter 7 of the Bankruptcy Code (11 U.S.C. § 701 et seq.) in the United States Bankruptcy Court for the Middle District of North Carolina. That petition has been designated Case Number 02-80864. |