Bruce Pearse v. Agricorp

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 Bruce Pearse of Sunderland, Ontario from a decision of Agricorp concerning the adjustment of his claim for his 2006 Red Spring Wheat and Soybean crop, and his fall red wheat planted in 2005 and harvested in 2006.

Before: Gene Trotman, Vice Chair; Denis Perrault, Member and Doug Flook, Member.

Appearances:

Bruce Pearse, appellant
Don Good, Counsel to the appellant

Fred Thomson, Agricorp's representative
Karin Rasmussen, Counsel for Agricorp
Jim Byers, witness for Agricorp
Vicki Sullivan, witness for Agricorp
Brian Stover, witness for Agricorp

This appeal was held on Tuesday, April 15, 2008, in the Saffron South Room, Holiday Inn Peterborough Waterfront, 150 George Street North, Peterborough, Ontario.

Facts

1. The appellant, Bruce Pearse, of Sunderland, Ontario is a sixth generation farmer. He owns jointly with his father a 762 acre farm. In 2004 the appellant took over from his father. He planted Red Spring Wheat and Soybeans in 2006 and insured those crops against specified perils with Agricorp.
2. Agricorp is a Crown Corporation established without share capital to administer, among other things, "plans of crop insurance under the Crop Insurance Act (Ontario), 1996, and to perform the duties conferred on it by that Act:"
3. The Red Spring Wheat, grown on 115 acres, and the soybeans, grown on 270 acres, were both insured against "drought, excessive moisture, excessive rainfall, flood, frost, hail, insect infestation and plant disease provided recommended control practices are followed, wildlife and wind."
4. The month of April which was described as very warm, was followed by three weeks of rain, so much so that the appellant had to plant his Red spring wheat about the middle of May 2006, late according to farming practices. The wheat germinated satisfactorily, but the excessive rain, which was widespread in the area in which the appellant farms, caused the weeds to thrive and to pressurize the wheat.
5. The appellant sprayed the wheat in early August with roundup, a drying agent, but this it appeared made no apparent difference to the weed situation. By October 12, 2006 the appellant had his Red Spring Wheat harvested or most of it. The harvested crops were put into two bins with the cleaner being in one bin. In the other bin the appellant placed Red Spring Wheat commingled with weeds and debris. He claimed that the growing and harvesting of the wheat was adversely impacted by excessive rain and his ill health.
6. According to Agricorp's Crop Insurance Report dated October 12, 2006, there was moderate damage to the Red Spring Wheat due to "excessive rain", which made conditions "wetter than normal". The document further stated that "loss due to uninsured peril (failure to harvest on time) is applied to acres remaining unharvested...Yield will be verified when screening process is complete" The report concluded by stating "Crop may be in a claim"
7. On January 10, 2007 Agricorp's adjuster, Jim Byers, and the Regional manager of Agricorp, Mr. Fred Thomson, met with the appellant, at which time the appellant indicated that that he would have a small claim with respect to the Red Spring Wheat. The Adjuster's Special Report regarding the Red Spring Wheat dated January 10, 2007 made the following notation: "Agricorp requests that client report the final yield of the red spring wheat crop on or about Jan. 19, 2007. If this requirement cannot be met, Agricorp will assign a yield i.e. 36 bu per acre (AFY) & no claim would be paid." This document was signed by the appellant and Jim Byers.
8. By letter dated January 15, 2007, Mr Fred Thomson wrote at length to the appellant and informed him, among other things, that:
   1. "Concerning your spring wheat contract, it is noted that you have failed to provide Agricorp with an accurate harvested yield from the 115 acres insured in 2006…Failure to provide an accurate yield…would normally result in a penalty…I have waived the imposition of that penalty on condition that you provide said yield to Agricorp on or before the end of business day, Friday, January 19, 2007."
   2. "The crop insurance provides that "Harvested production shall be reported to Agricorp immediately after the insured crop is harvested."
9. A typewritten note dated January 23, 2007 placed on the backside of the document referred to in paragraph 6 above, entitled Adjuster's Special Report and dated Jan. 10-07 stated that: "Mr. Pearse has reported a yield for his red spring wheat. What was supposed to be a possible small claim as per our conversation on Jan. 10 is now a significant claim of $10, 428.87. This is based on a declared yield of 12.31 bushels per acre, as AFY value in 2006 of 36 bu. Per acre at 85% coverage level and a price of $5.13 per bushel…This declared yield is less than half of the next lowest yield in the township, and examining other individual yields as a percentage of their AFY values, Mr. Pearse's yield is less than 50% of the average of the other producers." According to the appellant his claim of $10,428.87 was based on his measurement of the Red Spring Wheat in the storage bins.
10. The January 23, 2007 notation stated further that …There were…two other producers with yields less than 80% of their AFY, so it is possible that an insured peril did contribute to Mr. Pearse's loss, although not to the extent shown by the final reported yield. Therefore Agricorp cannot pay a full claim based on the declared yield." The report added that "The other growers achieved an average yield of 82.18% of AFY. One producer who farms near Mr. Pearse had a yield of 68.9% of his AFY. Mr. Pearse had a coverage level of 85%. The difference between 68.9% and 85% is 16.1 %. Agricorp will pay Mr. Pearse 16.15 of the total GP of 3448.62 bushels or 555.23 bushels at a claim price of $5.13 per bushel…If the declared acreage is correct, the claim payable would be $2,848.32." Mr. Pearse objected to the contents of this document.
11. On July 23, 2007, Production Insurance Plan Coordinator of Agricorp, Erin Adams, wrote to the appellant and informed him as follows: "Under the Contract of Insurance, a Proof of Loss form must be filed within 60 days after harvest. Since we did not receive your completed form, your 2006 red spring wheat production claim-in the amount of $10,428.88, has been cancelled.
12. By letter dated August 21, 2007 Agricorp informed the appellant that: "The offer of settlement which was made on both occasions amounted to a total claim payable of $2,848.32 calculated as follows: 16.1% of the total Guarantee Production of 3448.62 bushels=555.23 bushels at a claim price of $5.13 per bushel=$2,848.32" A notation at the bottom of the first page of this letter conveyed the fact that the appellant had rejected the offer and, as a consequence, the same was withdrawn and the claim involved cancelled.
13. Mr. Good submitted on behalf of the appellant that when the initial evaluation of the Red Spring Wheat was done, the bin containing the weeds and debris had not been fully cleaned and that upon cleaning there was a declared yield of 12.31 bushels per acre which would entitle the appellant to claim a loss of $10, 000.00 from his crop insurer, Agricorp. Mr. Good submitted further that the primary cause of the loss was excessive rain and the secondary cause was the weeds and that it should be borne in mind that the appellant had health concerns in 2006 and 2007.
14. Mr. Thomson submitted on behalf of Agricorp that the appellant's loss was due to poor management practices and gave examples of the same by citing the fact that one does not harvest Red Spring Wheat in October, but in August. He added that the harvested wheat stored with commingled weeds and debris would suggest that it was the "the fields had been pretty dirty." He concluded that poor management is not an insured peril, and moreover, that the appellant did not comply with the terms of his insurance contract.
15. With regard to the Soybeans, which carried a 90% coverage, on October 12, 2006 Agricorp issued a Crop Inspection Report pertaining to Soybeans planted in the spring of 2006. It stated that conditions of the 270 acres was subjected to "excess rain" and that the extent of the damage caused thereby was "severe" as the acreage was "wetter than normal" The report also noted that there was a failure to control weeds and that there was heavy weed pressure from either "foxtail or pigweed." The report further commented that "Herbicide treatment was delayed till Aug. 2, -06. Client was waiting for spring advance funding…herbicide application was delayed until later than label recommendations. Yield will be reported following harvest".
16. On January 10, 2007 Agricorp issued an Adjuster's Special Report with respect to the Soybeans. It informed the appellant as follows: "This report is a follow-up to the crop inspection report of Oct. 12, 2006. The soybean crop in question has excessive weed damage which is not an insured peril. Client has spread paper sludge into standing crop during the period Nov. 20-26th, 2006 by ODL…The farm location on the 69th (1545) concession has been chisel ploughed without notification to Agricorp. These circumstances constitute crop abandonment …Agricorp cannot authorize a claim payment. Mr. Pearse claims to have waited a prolonged amount of time for approval of his loan from ACC farmers financial& claims this impacted production practices…" This document was signed by the appellant and Jim Byers. (Agricorp's Adjuster)
17. By letter dated January 15, 2007, Mr. Fred Thomson wrote to the appellant and stated in part:
    "Concerning the 2006 Contract of Insurance for soybeans, I have on January 10, 2007 in the company of the adjuster Jim Byers…examined the planted acreage …and in respect of that inspection visit, would offer the following observations:
    1. "Almost all of the acreage remained unharvested at that date."
    2. "All the acreage examined showed evidence of heavy weed infestation, the degree of which would have significantly limited the yield of this crop."
    3. "Some of the acreage examined had previously been destroyed by tillage without having been released for destruction by Agricorp."
    4. "All of the unharvested crop examined was severely damaged by wheel tracks occasioned by equipment which applied paper sludge to this acreage; this effectively resulted in almost one-half of the entire standing crop being destroyed."
    5. "the application of paper sludge confirmed to Agricorp that on or before November 20, 2006 you had abandoned this crop and this action signifies that you had no intention to continue with attempts to harvest."
    6. Based on this information and the results of our inspection visit, I advised that Agricorp would deny any claim payable in respect of this 2006 soybean production…at no time did Agricorp release any of your soybean production for destruction
18. Mr. Good submitted that the appellant should be paid $39, 321.91 for his Soybean loss, based on the assumption that there was full yield loss at 90% coverage. Failing that, he said that there should be a 50% payable claim based on the suggestion by Agricor's adjuster to the appellant on October 12, 2006, based on the fact that the appellant "was not as well as he could have been" and the additional fact that the appellant did not get the funding he had applied for in time to pay for the spraying of the weeds.
19. Mr. Thomson submitted, as he did regarding the Red Spring Wheat, that the loss was due to poor crop management which included late harvesting. He indicated that there was a discussion of a claim between the adjuster and the appellant but he destroyed the crop. As a result, there was no evidence available on which Agricorp could entertain a claim. Mr Thomson asked that the Tribunal rule in Agricorp's favour and decline the claims of the appellant with respect to both the Red spring Wheat and the Soybeans.

The Issue

All things considered, is the appellant entitled to crop loss insurance payments from Agricorp for his Red Spring Wheat loss and the Soybean loss? ,

The Findings

The Tribunal finds from the preponderance of the evidence that there were four conditions responsible for the loss occasioned by the appellant. They are as follows:

1. excessive rainfall,
2. severe weeds conditions,
3. the ill health of the appellant which prevented him from operating at his optimum during the planting, growing and harvesting of the crops: and
4. poor farm management including the inability to obtain a loan on time to finance the required spraying of the weeds.
   

Out of the 4 conditions enumerated above the only one which qualifies as an insurable peril is "excessive rainfall" (See paragraph.). All the other conditions avail the appellant nothing under the terms of his contract of insurance with Agricorp, which must be interpreted strictly.

Regarding the Red Spring Wheat the Tribunal finds that Agricorp's rationale for quantifying the loss to the appellant quite compelling and acceptable, as it was based on the yield of others farmers in the same neighbourhood. The claim put forth by the appellant was found unacceptable as it had no such comparative component to it.

With respect to the Soybeans there was no basis on which Agricorp could assess a claim as the evidence for so doing was destroyed by the appellant. Likewise the Tribunal, for the same reason, cannot make a determination pertaining to the same.

The Order

Based on the foregoing findings, the Tribunal hereby orders the payment of the sum of $2,848.32 to the appellant, Mr. Pearse, by Agricorp for his Red Spring Wheat loss. The claim by appellant for his Soybeans is hereby dismissed.

Dated at Ottawa, Ontario this 22nd day of May, 2008.