Robbie Kiwan v. Agricorp Addendum

In the matter of Ontario Regulation 140/96 under the Crop Insurance Act (Ontario) 1996, S.O. 1996, C. 17, Schedule C.

And in the matter of: An appeal to the Agriculture, Food and Rural Affairs Appeal Tribunal by Robbie Kiwan, in Gloucester, Ontario from a decision of Agricorp concerning the adjustment of his claim for his 2007 pepper, eggplant, pumpkin and melon crops.

Before:
Marthanne Robson, Vice Chair; Denis Perrault, Member; Richard Smelski, Member

Appearances:
Robbie Kiwan, the appellant
Fred Thompson, representative for the respondent, Agricorp
Mark Van Vliet, witness for the respondent
Dean Patterson, witness for the respondent
Kevin Schooley, witness for the respondent
Richard Charlebois, witness for the respondent
Wendell Gourlay, witness for the respondent

This appeal was heard in Ottawa, Ontario, on October 20, 2008.

Addendum to the Decision of the Tribunal

Background

In the Decision of the Tribunal, dated February 12, 2009, the Tribunal ordered that, with respect to Mr. Robbie Kiwan's 2007 eggplant, pumpkin, and watermelon crops:

1. Mr. Kiwan is to provide complete and detailed information to Agricorp, copying the Tribunal, regarding expenses, including all relevant receipts and invoices, and a summary list of the product used and expenses incurred for the production of the above noted crops.
2. Agricorp is to recalculate Mr. Kiwan's insurance claim, taking into consideration Mr. Kiwan's actual expenses, as ordered to be provided in point "a.", above, as well as Mr. Schooley's evidence that the fertilizer amounts were appropriate, and specifying any deduction related to poor farm management practices. Agricorp shall provide to Mr. Kiwan, copying the Tribunal, revised claim calculations for the above noted crops.
3. The parties are to discuss the settlement of Mr. Kiwan's insurance claim for the above noted crops, and attempt to reach an agreement on the new calculations provided by Agricorp, as noted in point "b.", above.

Following the action taken by the parties, in points "a" through to "c", above, the parties were to report to the Tribunal within 30 days from the date of the above noted Decision of any agreement reached. If no agreement was reached, the parties were to provide further written submissions to the Tribunal within 60 days from the date of the above noted Decision.

Pursuant to the above noted Decision of the Tribunal, the Tribunal received the following items:

1. With respect to point "a", above, a letter from Mr. Kiwan, dated February 15, 2009, with a series of receipts attached;
2. With respect to point "b", above, a letter from Agricorp, dated March 12, 2009, with a revised claim calculation amount noted therein; and
3. With respect to point "c", above, letters from Mr. Kiwan, dated March 9, 2009, and from Agricorp, dated April 16, 2009, both outlining their positions regarding the insurance claim dispute, and the ensuing settlement discussions.

Letter from Robbie Kiwan, dated February 15, 2009

Attached to Mr. Kiwan's above noted letter were receipts for a series of product, with delivery charges, totaling approximately $9,000 including: Triple 13, Potassium Nitrate, Pounce 3.2, Diazinon 500 EC, Ridomil Gold 480 EC, Thiodan 400 EC, black embossed plastic mulch, Glyfos 360 SC, web trays, boxes, and hybrid pumpkin seeds.

In his letter, Mr. Kiwan also notes that other operational expenses incurred for his crops were not quantified, including greenhouse heating, fuel, labour, and equipment.

Letter from Agricorp, dated March 12, 2009

In this letter, Agricorp notes that representatives from Agricorp met with Mr. Kiwan on March 6, 2009, in an effort to resolve the dispute regarding Mr. Kiwan's claim payment. Agricorp notes that Mr. Kiwan did not accept Agricorp's offer of an additional $669.59 toward the payment of his crop insurance claim, which, they note, does not take into consideration farm management practices.

Letter from Robbie Kiwan, dated March 9, 2009

In this letter, Mr. Kiwan states that Agricorp's offer was not acceptable to him. He notes that claim calculation processes were never explained to him, and further notes he was anticipating coverage of 80% for his insured crops.

Attached to this letter were several documents, including: claim calculations by Mr. Kiwan, noting a total expected claim payment of $17,368.00; an ACC Farmers Financial Loan Statement; signed and dated confirmation by Mr. Kiwan and Mr. Dean Patterson, dated March 6, 2009, of Mr. Kiwan's disapproval of Agricorp's revised claim calculation; and pages with claim calculations.

Letter from Agricorp, dated April 16, 2009

In this letter, Agricorp reiterates its position regarding the payment of Mr. Kiwan's crop insurance claims for his 2007 eggplant, watermelon, and pumpkin crops. It is noted that Mr. Kiwan attempted to enroll 8 crops for insurance, 5 of which were not accepted for coverage due to acreage requirements, the remaining 3 were accepted. Agricorp referenced Mr. Kiwan's farm management practices, evidence presented during the Hearing before the Tribunal on October 20, 2008, and the Final Release documents signed by Mr. Kiwan in acceptance of the claim offers previously provided by Agricorp.

Findings

The Tribunal finds that:

1. Within the receipts provided by Mr. Kiwan, pursuant to the order made in the Decision of the Tribunal, dated February 12, 2009, expenses were incurred by Mr. Kiwan for the purchase of pesticides for use on his watermelon, eggplant, and pumpkin crops that were not registered for such uses by OMAFRA.
2. No "summary list of the product used and expenses incurred for the production of the … noted crops" was provided to the Tribunal by Mr. Kiwan, as ordered in the Decision of the Tribunal, dated February 12 2009. In particular:
   1. No information was provided as to the allocation of such products among the insured crops, for the quantity of product used on the insured crops, nor for the labour costs incurred by Mr. Kiwan.
   2. No information was provided regarding the allocation of product toward insured crops versus non-insured crops.
   3. No log was maintained or provided by Mr. Kiwan for the usage and allocation of product, or for labour costs incurred for their application.
   4. Many of the products for which receipts were submitted were not registered by OMAFRA, as product to be used for the crops noted in Mr. Kiwan's insurance claim.
   5. There was insufficient information provided to the Tribunal to determine the amount of mulch used by Mr. Kiwan on the insured crops.
3. In its written submissions, Agricorp repeated allegations raised at the hearing against Mr. Kiwan, of tampering with crops, abandonment before verifying with Agricorp, and poor farm management practices. Agricorp could have denied the claims based on any of these, but chose not to do so. Having chosen to process the claims, those issues are no longer relevant. Agricorp clarified that it did not reduce the claims for poor farm management practices.
4. The revised claim calculation provided by Agricorp, leading to an increase in the claim by $669.59, is a fair adjustment of Mr. Kiwan's crop insurance claim for his 2007 eggplant, watermelon, and pumpkin crops.
5. Although Mr. Kiwan's 2007 eggplant, watermelon, and pumpkin crops were insured at up to 80%, the insurance claim paid may be lower than this proportion, on the basis of Agricorp's policy.

Recommendations

The Tribunal notes that even after a full day of hearing, and further written submissions, it was still not completely clear how or on what basis Agricorp deducted certain amounts. However, on balance, Agricorp was able to demonstrate that Mr. Kiwan did not provide sufficient documentation to receive a full payment of 80%.

The Tribunal strongly encourages Agricorp to:

1. Be as transparent as possible with farmers seeking to be insured under this program. The simple phrase "non-incurred expenses will be deducted" does not, in the mind of the average person, translate into the spreadsheet calculations submitted by Agricorp at the hearing. The Tribunal suggests that Agricorp disclose the exact detail of how a claim will be calculated, prior to signing up farmers for insurance. That way, farmers can make a fully informed decision about the insurance they are paying for.
2. If it has not done so already, provide more detail in its materials, such as the "fact sheet", on how "non-incurred expenses" are defined and calculated.

Order of the Tribunal

The Tribunal orders as follows:

1. Agricorp shall forthwith pay the balance of the claim, of $669.59 to Mr. Kiwan.
2. The fifth paragraph on the sixth page of the Decision of the Tribunal dated February 12, 2009, is to be replaced with the following text:

   Agricorp establishes tables of costs of production for each insured crop in the program. Input costs include seed, fertilizer, pesticide, machinery expense, labor and fixed costs such as interest, taxes, insurance, etc. These tables were not provided to Mr. Kiwan but were used in the calculation of claims. Mr. Kiwan was provided with a "Fact Sheet" about the insurance program, which included the following statement: "Non-Incurred Expenses: Will be deducted from compensation, if any." There was no evidence that Mr. Kiwan had received a copy of the actual Crop Insurance Policy. (emphasis added)

Dated at Ottawa, Ontario, this 21st day of May, 2009.