Laplante Combining Inc. v Agricorp, 2001 ONAFRAAT 16

Agriculture, Food and Rural Affairs Appeal Tribunal 1 Stone Road West

Tribunal d’appel de l’agriculture, de l’alimentation et des affaires rurales 1 Stone Road West

Guelph, (Ontario) N1G 4Y2 Tel: (519) 826-3433, Fax: (519) 826-4232 Email: AFRAAT@ontario.ca

Guelph (Ontario) N1G 4Y2 Tél.: (519) 826-3433, Téléc.: (519) 826-4232 Email: AFRAAT@ontario.ca

AGRICULTURE, FOOD AND RURAL AFFAIRS APPEAL TRIBUNAL

APPEAL: Laplante Combining Inc. v Agricorp Laplante Combining Inc. v Agricorp 2001 ONAFRAAT 16

STATUTE: Crop Insurance Act

HEARING: February 9, 12, and 13, 2001

DATE OF DECISION: March 12, 2001

2001-16

NEUTRAL CITATION: 2001 ONAFRAAT 16

Laplante Combining Inc. 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 Laplante Combining Inc., Cumberland, Ontario, from the decision of AGRICORP to deny it a claim for unseeded land compensation in the 2000 crop year. The Unseeded Acreage Benefit (USAB) is provided under the Grain and Oilseeds Insuring Agreement.

Before: Jim Rickard, Chair; Andrew Osyany, Vice Chair; Gertrude Levac, Member; Arden Schneckenburger, Member

Appearances: Luc Laplante, President, Laplante Combining Inc., appellant Pascale Giguère, counsel to the appellant Sean McGowan, Manager Customer Action Centre, AGRICORP, respondent Peter Wechselmann, counsel to the respondent Brian Hughes, General Manager and CEO, Agricultural Commodity Corporation Rejèan Leclerc, Territory Sales Manager, AGRICORP Barry Roberts, Regional Claims Manager, AGRICORP Rose Vlcek, Customer Service Representative, AGRICORP

DECISION OF THE TRIBUNAL

This appeal was heard via conference call on Friday, February 9, 2001 and face-to-face in Ottawa, Ontario on Monday, February 12, 2001 and Tuesday February 13, 2001.

The Background

In proposing and administering the Unseeded Acreage Benefit program, AGRICORP derives its authority from Section 5 of the Crop Insurance Act (Ontario), 1996 and Regulation 380/97, Crop Insurance Act (Ontario) 1996 and the 1999 Crop Plans.

The Crop Insurance Act (Ontario), 1996, specifically, sections 5(1), (2), (4), (10) state:

5. (1) AGRICORP shall fix the terms of contracts of insurance, or proposed contracts of insurance, subject to section 4 and the regulations made under section 12.

(2) AGRICORP has all the powers necessary to perform its duties including the power to,

(a) determine the qualifications and requirements for a person to enter into a contract of insurance:

(b) enter into contracts of insurance:

(c) fix terms of contracts of insurance relating to replanting benefits and unplanted acreage benefits;

(d) fix premium rates payable by insured persons;

(e) fix the duration of contracts of insurance;

(f) specify the circumstances in which an insured person may terminate a contract of insurance and the methods that the person may use to terminate the contract;

(g) specify penalties imposed on an insured person who breaches the terms of a contract of insurance;

(h) reinsure with any other insurer the risk or any portion of the risk under its contracts of insurance; and

(i) terminate a contract of insurance on the terms that it considers appropriate.

(4)AGRICORP shall not enter into a contract of insurance with a person to insure an agricultural crop or a type of perennial plant if,

(a) the contract insures less than the entire crop or all the plants of the type of perennial plant, as the case may be, in respect of which the person could enter into a contract of insurance under this Act; or

(b) a contract of insurance is already in effect to insure the crop or the type of perennial plant, as the case may be, in which the person has an interest.

10 (1) If AGRICORP and a person disagree on a matter described in subsection (2) or if AGRICORP and an insured person fail to resolve a dispute arising out of the adjustment of a claim under a contract of insurance, either may appeal the matter in dispute to the appeal board for the purpose of this section.

(2) Subsection (1) applies to a question whether a person qualifies for a contract of insurance except if the disagreement relates to the time during which a person may apply for a contract of insurance or file a final acreage report or its equivalent.

Ontario Regulation 380/97, sections 3 and 10 state:

3(1) A contract of insurance consists of,

(a) the application;

(b) the renewal notice and change notice, if any;

(c) the final acreage report or its equivalent;

(d) the terms fixed by AGRICORP under section 5 of the Act; and

(e) this Regulation.

14. No term of a contract of insurance shall be deemed to be waived or altered by AGRICORP unless the waiver or alteration is given in writing.

The role of the Tribunal is set out in Ontario Regulation 140/96. Specifically, clauses 2 and 3 of the regulations state:

2 The Board has exclusive jurisdiction to hear and determine all disputes between the Commission and an insured person arising out of the adjustment of a loss under a contract of insurance.

3(1)If the Commission and an insured person have failed to resolve any dispute arising out of the adjustment of a loss under a contract of insurance and have complied with all requirements respecting the filing of proof of loss forms, either party may appeal the matter in dispute to the Board.

(2)To appeal the matter in dispute, the appellant shall file a notice of appeal with the Board and send a copy of the notice to the other party within one year of filing the proof of loss form.

(3)Where a party has appealed in accordance with subsection (2), the Board shall fix a day, a time and a place for considering the matter in dispute and hearing the parties, and shall notify the parties accordingly.

(4)On the day, and at the time and place so fixed, the Board shall hear the evidence of the parties respect the matter in dispute, and shall make a decision on the matter.

The appellant, Laplante Combining Inc. had been insured by AGRICORP since 1998, under the name Richard Laplante. The company name was changed to Laplante Combining Inc. in 2000.

Laplante Combining Inc. was insured for 810 acres of corn and 700 acres of soybeans in 2000. The dispute related to the number of acres of land that was insured for Unseeded Acreage Benefit (USAB). The appellant understood that the company had USAB coverage for 2,500 acres of land, the amount the company had intended to plant in 2000. AGRICORP denied the USAB claim by Laplante Combining Inc. as it maintained the company was only insured for 750 acres of USAB coverage, the amount of land that was insured with AGRICORP in 1999. AGRICORP requires growers to report their planting intentions by May 1st if they are going to increase their acreage more than 10% from the year before.

Unseeded acreage benefits are paid on the difference between the acreage seeded and the acreage covered by the contract of insurance, after acreage is reduced by 1% or 3 acres for tiled land, or 3% or 6 acres for untiled land. Premiums for USAB coverage are deducted from the claim payable to the grower. There is no up front payment for this type of insurance.

The Tribunal had determined in a previous hearing that it had the jurisdiction to hear this appeal.

The Issue

The issues before the Tribunal are:

1. How much USAB coverage did Laplante Combining Inc. have in 2000?

2. Did AGRICORP fairly adjust the 2000 USAB claim for Laplante Combining Inc.?

Preliminary Matters

The Tribunal heard a number of preliminary motions.

The appellant applied for an order excluding witnesses. This was granted. The effect of the order is that each counsel has the assistance of his or her client throughout the hearing, but otherwise witnesses are excluded until after they have given evidence.

Ms. Giguère made a motion for disclosure of documents and recordings in AGRICORP’s possession relating to Laplante Combining Inc. and Richard Laplante, including information on interactions between her client, AGRICORP and the Agricultural Commodity Council (ACC). She argued that she required access to this information in order to prepare a full defence. She said it was an issue of fairness, as AGRICORP had information on her client that she did not have and she submitted that it was inappropriate for AGRICORP’s legal counsel to determine which documents would be put before the Tribunal and which would not. She suggested it would be helpful to the Tribunal if more information was brought forward. Ms. Giguère also moved for an adjournment of the Hearing, in order for her to review the information she sought, in the event the information could not be produced expeditiously.

Mr. Wechselmann objected to the motion for disclosure. He submitted that the request for disclosure had been submitted too late for him to supply the information requested, that data relating to 1998 and 1999 contracts was not readily available and that the data relating to those years was irrelevant. Mr. Wechselmann pointed out that Ms. Giguère could have asked for discovery or for an examination of witnesses and that the matter could have been resolved in a pre-hearing conference had more notice been given. He said he did not know if there was confidential information in the files, as he had not had a chance to review them in detail. He estimated it would take at least two days to examine the files and determine what additional information could be released.

Mr. Wechselmann argued that he had disclosed documents he intended to rely upon on November 9, 2000. He objected to the late disclosure of documents by the appellant and moved to exclude documents that Ms. Giguère sent to him on February 8, 2001. He also requested a change of venue to Guelph, in the event that the Tribunal decided to grant Ms. Giguère’s request for an adjournment.

Ms. Giguère submitted that her clients had very few documents in their files, that many were the same as the documents in AGRICORP’s file, and that all their documents were in AGRICORP’s possession. She stated there were no surprises in the documents in question. She objected to a change of venue as she pointed out her clients were farmers and should not be put to the expense of travelling to Guelph.

The Tribunal decided not to order disclosure, not to adjourn the Hearing, and not to exclude documents filed late by the appellant. The Tribunal was of the view that there was sufficient time between the Hearing in November 2000 on this matter and the February 2001 Hearing for parties to obtain the information they required. The Tribunal also believed that information sought by the appellants could be obtained through cross-examination of witnesses. The Tribunal found that the late filing of documents by the appellant would not disadvantage the respondent in this particular case.

It was not necessary for the Tribunal to rule on the motion for a change of venue, given that the motion for an adjournment was denied.

Both parties made submissions to the Tribunal with regard to an order for costs. The Tribunal cannot award costs on crop insurance appeals.

The Findings

Luc Laplante’s Evidence

Mr. Luc Laplante testified on behalf of the appellant, Laplante Combining Inc.. He explained that he had started the business with his brother Jean Laplante and his father Richard Laplante in 1998 under the name Richard Laplante. He said the business expanded rapidly as the family acquired land and rented land. He said the decision to incorporate the business in 2000 was made for tax reasons, but that it was the same business that they started in 1998. Mr. Laplante stated that he was the partner who normally dealt with crop insurance coverage.

Mr. Laplante told the Tribunal:

1. The company first bought crop insurance in 1998 and it opted for the most complete coverage it could have. The family applied for USAB coverage at that time. He understood that no payment was required for this coverage until it was used. He understood that all spring sown, planted acres must be offered for insurance in order to be eligible for USAB coverage. He did not recall receiving any documents from AGRICORP in 1998 except the final acreage report. In following years, he renewed the insurance coverage by phoning in his acreage.

2. He had an arrangement with the Agriculture Commodity Council (ACC) such that ACC paid the crop insurance premiums and added them onto the farm loan. ACC was the first to be paid insurance if the crop failed. Laplante Combining Inc. needed crop insurance in order to obtain ACC financing. The bill for crop insurance was sent directly to ACC by AGRICORP once he gave AGRICORP his acreage report and client number by phone.

3. ACC has full details on the business as he includes these in a loan application booklet he fills in each year. He sent this booklet to ACC early in 2000 and submitted additional information to ACC on April 11, 2000. Correspondence received from ACC in November 2000 confirmed the company intended to plant 2,472.1 acres of corn and soybeans in 2000 and that it expressed a clear intent to plant this acreage to ACC, prior to May 1, 2000.

4. The company only planted 1,510 acres in 2000. Excessive rain prevented them from planting as much as they had intended. They farmed a mixture of tiled and untiled fields. Some of the land is contoured, so that the highest elevation is in the middle of the field, sloping to the ditches along the edges of the field, every 150 feet. Soil tests indicated it was good land. Approximately 1,000 acres of Laplante Combining Inc. land is near Cumberland, Ontario. An additional 1,500 acres is located near Alfred, Ontario.

5. The company had a large increase in acreage between 1998 and 1999. AGRICORP had increased Laplante Combining Inc.’s USAB coverage in 1999, even though Mr. Laplante had not notified AGRICORP of the increased acreage before May 1, 1999. Laplante Combining Inc. had not made a claim for USAB in 1999.

6. Early in 2000 Mr. Laplante had numerous conversations by telephone with AGRICORP representative Ms. Rose Vleck. She helped him register the company’s name change from Richard Laplante to Laplante Combining Inc. It took a month or more to complete the name change and for a time the company operated under its original client number. The client number was eventually changed. He told Ms. Vlcek that the reason the company was incorporating was because their acreage was increased. He did not recall Ms. Vlcek asking him any questions.

7. He reported his USAB claim by telephone to the AGRICORP call centre on June 19, 2001. Local AGRICORP adjusters, Mr. Gerald Poupart and Mr. Barry Roberts knew he intended to make a claim. Three representatives of AGRICORP had been on Laplante Combining Inc. fields in May 2001, checking germination.

8. The outcome of his USAB claim was that Laplante Combining Inc. received no payment. Mr. George Sutton notified him of this in a letter dated July 26, 2000. Mr. Jim Zavitz confirmed this in a letter dated November 29, 2000. The only reason given for denying the claim was that the increased acreage was not reported before May 1, 2000.

9. He received a copy of the AGRICORP Crop Insurance Policy Contract of Insurance booklet in January or February 2000. This was the first time he had seen it and he thought it was just a summary of past dealings. There was nothing to alert him that this document was special. He received the English version of the contract. His correspondence with AGRICORP was normally in French.

In response to questions from Mr. Wechselmann, Mr. Laplante said:

• He did not read the Contract of Insurance he received in early 2000.
• He understood that he was to notify AGRICORP by May 1, 2000 of Laplante Combining Inc.’s increased acreage. He believed he did so when he spoke to Ms. Vlcek. He did not recall the specific dates of their telephone conversations but agreed that it was late February or early March 2000. Most of the calls related to the company’s name change. He told Ms. Vlcek that the company would be planting between 1,500 and 2,500 acres in 2000. At that time, all of his rental contracts were not completed. He did not recall specifically mentioning USAB coverage to Ms. Vlcek.
• He recalled reading an insurance renewal notice dated March 13, 2000. He understood the document to mean that his USAB coverage was approved for 2000. The document stated that the company had USAB coverage for 750 acres of land in 1999. He did not believe it was necessary to modify the insurance coverage listed in this form as he believed that Laplante Combining Inc. had USAB coverage for 2,500 acres in 2000 and that this would be indicated on the 2001 form. The 2000 form was similar to one he received in 1999.
• He did not inform AGRICORP of the company’s intention to increase acreage in 1999 but the USAB coverage was increased automatically. He understood the wording on the back page of the document to mean he was required to verify his yield guarantee by May 1st.
• He understood the mention of 750 acres of USAB coverage on the May 24, 2000 final acreage report referred to the acreage covered the year before. He understood the final acreage report but pointed out that the French and English versions were different.
• He sent information on the increased acreage to ACC so as to receive a larger loan. He did not feel that ACC and AGRICORP were the same operation, but he understood that they worked together, as ACC would not loan money without insurance coverage. He did not recall discussing USAB coverage with ACC.
• He recalled meeting Mr. Richard Charlebois by chance in one of the Laplante Combining Inc. fields in late May. He remembered meeting with several people from AGRICORP at the home farm on May 31, 2000. He recalled three representatives at that meeting - Mr. Poupart, Mr. Roberts and one other. He did not recall meeting Mr. Rejean Leclerc in a field on June 12, 2000 and he did not recall discussing the eligibility of grassland for USAB with the AGRICORP representatives he did meet at that time. He recalled that on July 20, 2000 he was told that the company was not eligible for USAB insurance because the field had not been sprayed by May 15, 2000. He said it made no sense to spray by that date with a no till cropping system.

In response to questions from the Tribunal, Mr. Laplante said:

• He had no notes of his telephone conversations with Ms. Vlcek.
• The only report he was asked to sign by AGRICORP was related to his yield guarantee.
• He did not see any reports or notes of meetings between himself and the AGRICORP adjusters.
• He filed his business plan with ACC in 2000. This included the location of all the land to be farmed that year. The leases on the additional cropland the company gained access to in 2000 were finalized by April 12, 2000.
• Laplante Combining Inc. received no USAB payment in 2000 because they seeded more than 750 acres of land. He had understood that they would be paid for at least 750 acres of the unseeded land.
• Of the unseeded land, approximately half was newly rented land and half was land rented the previous year. The land was untiled but drained well as there were many ditches. Some of the land was in pasture but it had been planted in corn 2-3 years before.
• The ACC pays his crop insurance premium at some point after he receives his final acreage report. He telephoned both AGRICORP and ACC to tell them the full acreage was not planted. He felt it was a good policy to keep ACC informed.
• He recalled telling Ms. Vlcek that one reason for incorporating was due to the increase in acreage. He believed he told her the company was going from 800 acres to 1500-2500 acres. Laplante Combining Inc. received the benefit of the family’s first two years of farming, even though the company name and client number changed in 2000.
• ACC was authorized to get information from AGRICORP on Laplante Combining Inc.. The company’s ACC loan was paid off for 2000.
• He could purchase crop insurance without USAB coverage, but he could not get USAB coverage without purchasing crop insurance. He understood he had USAB coverage in 2000.
• He wrote to Mr. Sutton after his USAB claim was denied. He asked for a reconsideration as he was not sure that AGRICORP understood the situation.
• Of the unseeded land, approximately 500 acres was pastureland and the balance was land that had been planted in soybeans or corn the year before.

Sean McGowan’s Evidence

Mr. Sean McGowan stated that he was the Manager of the AGRICORP Customer Action Centre (call centre), and that Ms. Rose Vlcek reported to him. He told the Tribunal Ms. Vlcek had been employed by AGRICORP for 10 years, that she was an excellent employee, and that there had been no problems with her in the past. He explained that all calls received in the call centre are recorded in a log and that his staff are trained in how to enter these records.

Mr. Gowan stated that:

1. Customers are responsible for reporting USAB acreage by May 1steach year in order to establish coverage. Growers generally know by that date how many acres they will plant. This provision in the policy saves AGRICORP from having producers claim extra acres later on in the year.

2. AGRICORP has a policy such that if a customer increases his acreage by more than 100 acres the head office staff notify field adjusters. At most, there is only one business day between the receipt of a report of a large increase in acreage and notification of the territory sales manager of the increase.

3. If a customer makes no changes after receiving the Crop Insurance Renewal Notice form, no action is taken by AGRICORP. If changes are made, a Confirmation of Change notice is sent to the customer to show the change in the policy. Customers have 10 working days to report errors in this form to AGRICORP.

4. The French version of the Crop Insurance Renewal Notice is a mirror image of the English version. The reference to 750 acres on the Laplante Combining Inc. form referred to the acreage the customer was insured for. If the customer had called to change this acreage, AGRICORP would have recorded it. The “Y” on the form means the customer signed up for USAB. The benefit coverage was at the acreage stated on the form.

5. The Crop Insurance Final Acreage Reporting and Confirmation form is sent to customers prior to final reporting. The Laplante Combining Inc. form showed that 750 acres had USAB coverage in 2000. If the customer was unhappy, he should have called the call centre.

6. AGRICORP’s Scopus Central software program was used to record interactions with customers. In 2000, five entries were made regarding Laplante Combining Inc., all entries were made by Ms. Vlcek. There was no reference to USAB coverage in any entry. The entries made all concerned the name change and the issuing of a new customer number.

7. A fax from Mr. Laplante dated March 10, 2000 was received by AGRICORP. It referred to a name change package that had previously been sent to AGRICORP. A staff worksheet dated March 24, 2000 recorded 750 acres, there was no reference to any increases in acreage.

8. An electronic mail transmission from AGRICORP to ACC referred to the name change, a concern regarding the client number and yield data. There was no reference to USAB.

9. AGRICORP does not accept reports of acreage increases from a third party. The organization requires written authorization from a client before they will release information on a client’s accounts.

In response to questions from Ms. Giguère, Mr. McGowan said:

• He had reviewed the information she sent to AGRICORP and the information that AGRICORP supplied to the Tribunal. He examined the 2000 paper file for Laplante Combining Inc. and the 2000 electronic files from the company, but none of the Richard Laplante files from 1998 or 1999. He was not aware of anything in the paper file that had not been disclosed. He had not seen any electronic data collected under the Richard Laplante client number, other than the information disclosed by AGRICORP. He agreed it was possible that a record was recorded that was not disclosed.
• In late February and early March there are usually 6-8 operators in the call centre. They service 25,000 clients in all, 18,000 clients had crop insurance. The operators do not work in formalized shifts but they take breaks and lunch. One operator may have been on maternity leave when the Laplante Combining Inc. calls were received.
• Early March was usually a slow period for the call centre; the frequency of calls ranged from 75-200 calls/day that time of year. Later in March the frequency rose to 400 calls/day. There should not be a telephone queue at the beginning of March, but there could be at the end of March or in April. A one-hour wait in the telephone queue is not possible. The maximum wait is 15 minutes before the caller is transferred to voice mail.
• Operators receive a variety of requests for information and it is not unusual for them to collect several pieces of information in one call. It is possible for them to miss information.
• He did not ask Ms. Vlcek if she recalled the specific calls made by Mr. Laplante but he did ask if she remembered the case. She told him she did remember the case because of the number of calls, and because Mr. Laplante had asked to speak to her specifically.
• He agreed that the Laplante Combining Inc. name change took approximately three weeks to complete and that this was unusual as name changes were normally completed in 2 – 3 days. He explained Ms. Vlcek could take time off answering calls to deal with the AGRICORP staff handling the name change. He understood that Mr. Laplante was very concerned about the name change, as his financing depended on it being completed.
• AGRICORP records did not indicate that ACC called regarding USAB coverage for Laplante Combining Inc.. He reiterated that AGRICORP needs written or verbal permission from a grower for a third party to change a policy. He agreed that there were three growers under the Richard Laplante client number and that Mr. Luc Laplante was not considered a third party.
• It was not unusual for Ms. Vlcek to receive requests for name changes in March and she would be aware that there was some urgency to this type of request. He assumed that all critical information given to his employees was recorded. If a piece of information was missed, the client would see the error on the confirmation report and could then correct it.
• AGRICORP paid many claims in 2000. The call centre received a record number of calls. He expected that the value of claims paid would exceed one hundred million dollars. He did not know the ratio of claims denied to claims paid.
• He was aware that the Laplante Combining Inc. claim was denied because the increased acreage was allegedly not reported in time. He was not aware of any other reason that the claim was denied, but he pointed out that there are rules as to what types of land is eligible for USAB coverage.
• The 1998 application for crop insurance indicated the applicant qualified for USAB. All planted acres must be offered for insurance to get USAB. The acreage covered for USAB should have been recorded on the 1998 form.
• He agreed growers would not normally finish planting by May 1st. He agreed that Laplante Combining Inc. reported all planted acres by July 10, 2000. He agreed that the company had USAB coverage, but noted that recording USAB coverage was not the purpose of Column G of the crop insurance form.
• Point 1 of the Notice of Change form asked growers to verify information in the table on the form. Point 2 indicated that if the information was correct the grower’s insurance contract was automatically renewed. The form indicated that any changes greater than 10% in planted acres, not acres intended to be planted, must be reported to AGRICORP. He agreed that in the French version of the form there was no indication that the full acreage must be reported to AGRICORP by May 1st and that planted acres would not be known by May 1st.
• He agreed that the Final Report for Laplante Combining Inc. was not prepared by AGRICORP until the May 1st deadline was past. He agreed that the number of acres of USAB coverage was reported underneath the table on that form. He agreed the table indicated the client had USAB coverage.
• He explained that the Market Revenue program was separate from the crop insurance program, that AGRICORP administers both programs and that he understood Laplante Combining Inc. was eligible for a claim under the Market Revenue program.
• He did not believe there was a contradiction between the Contract of Insurance and the crop insurance forms, but he agreed there was less information on the forms. He agreed AGRICORP had some discretion as to whether or not to deny claims if the increased acreage was not reported by May 1st.
• He agreed that Laplante Combining Inc. was insured in 2000. He pointed out the USAB coverage is an option that the grower must ask for to receive and that there is no premium paid on it unless there is a claim.
• There was nothing in the contract of insurance or other documentation that explained how the USAB benefit was calculated.

In response to questions from the Tribunal, Mr. McGowan indicated:

• Planted acres are subtracted from acres covered by the policy before a USAB payment is made. Since Laplante Combining Inc. planted more acres than its guaranteed acreage, no payment was made on the claim. AGRICORP does cover up to 10% more acres than were planted the year before, without requiring the additional acres to be reported. This would increase the Laplante Combining Inc. coverage to 825 acres but there would still be no payment made as the company planted 1,510 acres.
• The year 2000 was the first year the crop insurance contract was presented in a booklet format. Previously, the contract was made by regulation and there was a concern that growers were not reading these regulations. The new format put all crop insurance policies together in a form similar to that used by other insurers. He was not aware of any changes to the policies between 1999 and 2000. Any changes would be announced in the AGRICORP newsletter.
• AGRICORP no longer used the Scopus software package. The new software system is more interactive. At the time of the Laplante Combining Inc. name change parts of both systems were in use. All the documents from the Laplante Combining Inc. file recorded in 2000 were before the Tribunal. Paper copies of documents sent to clients were not kept by AGRICORP.
• The Contract of Insurance is available in French. Sending an English copy to Laplante Combining Inc. was an oversight.
• It was clear that the USAB coverage was changed in 1999 on the Richard Laplante file.
• Laplante Combining Inc. inherited the yield data of Richard Laplante.
• Calls to the call centre are logged into the computer but not taped. If the information regarding increased acreage had been received, there would be a dated notation in the electronic file, indicating the amount of acreage and indicating that the Territory Sales Manager had been notified.
• The Laplante acreage increase was too large to have been missed by AGRICORP if the information had been received.
• The planting deadline was extended in 2000 to allow more people to plant their crop. There had been planting delays due to poor weather. The deadline was extended for soybeans to June 20, 2000 and for corn to July 5, 2000.

Brian Hughes’ Evidence

Brian Hughes stated he was the General Manager and Chief Executive Officer of the Agricultural Commodity Corporation (ACC). He explained ACC provided low cost loans to growers. He said that ACC was not in partnership with AGRICORP and was not an agent of AGRICORP or the borrowers. He said that ACC would not notify AGRICORP of any changes in a grower’s situation and that it had never advised the insurer of any change in USAB coverage for any client.

With regard to Laplante Combining Inc., Mr. Hughes said that he dealt with the name change and there was no mention of USAB coverage to him, nor was there any evidence in ACC documents regarding USAB coverage.

In response to questions from Ms. Giguère, Mr. Hughes indicated that:

• ACC assumes risk when it makes loans to growers but it does not assume liability. To minimize risk, ACC verifies that clients have insurance coverage. ACC verifies that there is sufficient insurance to cover the acreage to be planted. Loans are issued in two stages; this allows for an adjustment in the amount of the loan if less acreage is planted than originally intended.
• With regard to Laplante Combining Inc., he was satisfied that the company intended to plant approximately 2000 acres and was granted a loan on that basis. Laplante Combining Inc.was in excellent standing with ACC. ACC has paid the company’s insurance premium in 2000 and AGRICORP cashed the cheque. ACC was the assignee of the insurance.
• ACC was authorized by its clients to discuss their crop insurance history with AGRICORP. ACC can verify yields and past yields. His staff communicate regularly with AGRICORP, mainly via electronic mail.
• To the best of his knowledge there was no communication between ACC and AGRICORP with regard to Laplante Combining Inc.’s increased acreage in 2000.
• ACC was not concerned with whether or not a grower obtains USAB coverage, except for the first year they deal with the grower.

In response to questions from the Tribunal, Mr. Hughes stated:

• A general security agreement was taken to protect ACC but it was seldom needed as the corporation had an adequate credit review process. Crop insurance does not mitigate giving a loan to a bad credit risk.
• ACC only loans money for acreage planted.
• ACC makes a very pointed effort to inform clients that it is not an agent of AGRICORP and it does not act as an agent in any way. If clients have difficulty with AGRICORP they are referred to their marketing board or crop association.
• AGRICORP invoices ACC for crop insurance. Premiums are added to clients’ loans. ACC receives no compensation from AGRICORP for doing this. AGRICORP knows that if ACC is the assignee of insurance then ACC pays the premium.

Rejean Leclerc Testimony

Mr. Rejean Leclerc explained he was the Territory Sales Manager in the area Laplante Combining Inc. farms. He said he is responsible for sales and underwriting, and that as soon as he finds out about large acreage increases he verifies the information. Normally AGRICORP head office staff notify him of acreage increases, by e-mail, before May 1st.

In the case of Laplante Combining Inc., he learned of the increased acreage at a meeting of insurance adjusters on May 31, 2000. At that time, he and two adjusters and Mr. Barry Roberts, Claim Manager decided to tour some of the land. They walked through two fields and met Mr. Richard Laplante. They discussed the possibility that the underwriting would be adjusted due to the increased acreage and the difference in land base. He did not recall any discussion of the USAB coverage at that time.

On June 23, 2000 he met Luc Laplante and Richard Laplante at the home farm and explained that the yield guarantee for corn was to be reduced to 75 acres/bu. At that meeting, USAB eligibility was discussed and Mr. Gerald Breault told them Laplante Combining Inc. was not eligible because did they not report the increased acreage. Mr. Richard Laplante said he reported it to ACC, and that was the same as reporting to AGRICORP.

In response to questions from Ms. Giguère, Mr. Leclerc said:

• He did not recall who informed him of the acreage increase. It came up in a discussion he had with Mr. Richard Charlebois and Mr. Gerald Poupart. He understood they had both discussed it with Mr. Barry Roberts, the day before and that they had not known of it for long.
• They visited one field east of Alfred and on the south side of Hwy #17. The fields were rounded land, not tile drained land. He estimated that he saw approximately 700 acres already planted or being planted.
• He did not recall receiving any dispatches from AGRICORP head office regarding increased acreage in 2000. Normally he did not receive many dispatches of this nature, but the number fluctuated from year to year. He did not always visit the new land, as he was able to change the underwriting on the basis of a telephone call.
• He was aware of an Adjusters Special Report prepared by Mr. Barry Roberts. He noted the number of acres was recorded on that report.
• In his area, June 5, 2000 was the final planting date for corn and June 20, 2000 was the final planting date for soybeans. He did not believe the AGRICORP extension applied to the area as the deadline was extended after the regional planting deadlines were reached.

In response to questions from the Tribunal, Mr. Leclerc explained:

• The underwriting changes he made in May and June due to the increased acreage were the same as those he would have made prior to May 1st, had he been notified. It was important that clients know their guaranteed yield has changed so they have the opportunity to decline insurance, in light of the change. Laplante Combining Inc. did not cancel its insurance in 2000 when the guaranteed yield was adjusted.
• He believed he received a note from AGRICORP head office regarding the Laplante file in 1999. He recalled the reason for the review of underwriting was that Mr. Laplante had requested that the yield guarantee for corn be reassessed, due to a change in the operation. He did not believe that the increase in acreage in 1999 triggered the review.
• He believed Mr. Richard Charlebois informed him the Laplante family was planting more acres in 2000 at the May 31, 2000 adjusters’ meeting. He understood that Mr. Barry Roberts discovered that the total acreage that Laplante Combining Inc. intended to plant was 2,500 acres at some point after that. AGRICORP knew about the Laplante Combining Inc. planting intentions before the 2000 insurance invoice was prepared.

Barry Roberts’ Evidence

Mr. Barry Roberts stated he was the AGRICORP Regional Claims Manager in the area that Laplante Combining Inc. farm. He recalled the adjusters’ meeting of May 31, 2000. He said that the Laplante Combining Inc. increase in acreage was brought up by Mr. Richard Charlebois. He said the adjusters did not believe the new land had the same potential as their other land and it was decided that they would visit nearby fields. He confirmed that the underwriting issue was raised that day with Mr. Richard Laplante.

Mr. Roberts also told the Tribunal that:

1. He met Luc and Jean Laplante on June 12, 2000. The underwriting issue was raised on that day and Mr. Luc Laplante mentioned that he had USAB coverage.

2. He told Mr. Laplante that some of his fields were sod that had not been plowed by May 1st and were therefore not eligible for USAB coverage. He estimated the aggregate size of these fields as 540 acres. He did not recall discussing the eligibility of other fields.

3. On June 20, 2000 he met with AGRICORP adjuster Mr. Gerald Poupart and the Laplante family at the home farm. He told them Laplante Combining Inc. was only eligible for 750 acres of USAB coverage at that time. He explained that this was because the increased acreage was not reported by the May 1st deadline. Richard Laplante told him that he had spoken to ACC and Ms. Vlcek that Spring. Richard Laplante appeared to be confused when told that ACC and AGRICORP were not the same organization.

4. He wrote a Special Adjusters Report on June 20, 2000 at the Laplante farm. He did not have the report signed as it was an emotional meeting.

In response from questions From Ms. Giguere, Mr. Roberts said:

• He believed Mr. Luc Laplante provided a list of properties to Mr. Gerard Poupart.
• He knew that under the no till cropping methodology land was not plowed. In his view the crop insurance contract should be updated to allow for herbicide kill down, rather than plowing, where no till was used.
• He did not recall whether or not Mr. Laplante told him both ACC and AGRICORP were informed of the increased acreage. The name change was also discussed at the June 20, 2000 meeting.
• The Laplantes appeared to be fair and honest.

In response to questions from the Tribunal, Mr. Roberts said:

• AGRICORP did not discriminate against no till cropping practices, provided approved farm practices were followed.
• Normally he signs his reports and asks clients to sign as well. He did not write the final report for Laplante Combining Inc..
• In the area that Laplante Combining Inc. farmed, June 20th was the final planting date for soybeans.
• He did not believe the sod field would have qualified for USAB coverage if AGRICORP had been notified in time. But, he did not pursue the matter once he learned that it was not reported in time.

Rose Vlcek Evidence

Ms. Rose Vlcek testified that she had been an AGRICORP Customer Service Representative for four years and had been with the organization for ten years. She explained it was her job to answer calls, document all interaction with growers and to service growers’ requests. She said she had been trained in customer service, program administration for crop insurance and operation of the computer programs used by AGRICORP. With respect to Laplante Combining Inc., Ms. Vlcek stated:

1. On February 28, 2000 she first spoke with Mr. Luc Laplante about a company name change. He needed quick service due to a pending ACC loan. She remembered him because he had called several times in a short period, he had asked to speak to her specifically, he was friendly and she went out of her way to expedite his company’s name change.

2. She was certain that there was no discussion of USAB benefits on February 28, 2000.

3. Her workload was average at that time of year. She received approximately 50 calls/day at that time.

4. There was no reference to an increase in USAB coverage in written material she received from Mr. Laplante regarding the company name change.

5. She had no further communication with Mr. Laplante after the name change was completed until June 2000.

6. On June 18, 2000 she spoke to Mr. Laplante about a USAB claim. They did not discuss his level of coverage at that time.

7. On June 26, 2000 Mr. Laplante called to verify conversations they had. She told him she did not recall any reference to increased acreage or increased USAB and he asked for an appeal booklet.

In response to questions from Ms. Giguère, Ms. Vlcek verified:

• AGRICORP has approximately 25,000 clients. The corporation has 11 operators at busy times, perhaps 6 in March 2000.
• She discussed the Laplante Combining Inc. name change with Adjusters and the Claim Manager in June. She discussed it with Mr. McGowan after the appeal was underway.
• It normally takes 2-3 weeks to complete a name change. It was not surprising to receive a name change request at that time of year.
• If she received information on more than one topic during a single call, she would document all requests. She only logged calls when new information was received.
• It was possible for her to miss information but she was certain she had not in this case.
• Reported acreage was an important topic at that time of year.
• The final documentation was not completed on the Laplante Combining Inc. name change for almost a month but she recalled that the name change had been processed fairly quickly.
• She did not have her voice mail messages transcribed. Handwritten lists of items requiring action were not retained once the actions were completed.

In response to questions from the Tribunal, Ms. Vlcek indicated that the Scopus software was no longer routinely used by AGRICORP but that past records could be retrieved. She said there was a USAB issue logged in the Richard Laplante file in 1999.

Summations

Ms. Giguère told the Tribunal that the appellant had done all it was required to do in order to qualify for USAB coverage on the entire operation. She submitted that the forms sent to Laplante Combining Inc. by AGRICORP suggested that increases in acreage larger than 10% should be reported, but that this was not a requirement and that in any event, there was no indication that the acreage had to be reported by May 1, 2000. Further, she pointed out that Mr. Laplante had reported the increased acreage to AGRICORP in February or March, and suggested that Ms. Vlcek may have missed this information, due to the urgency of the name change request received at the same time. Ms. Giguère dismissed the Contract of Insurance as she submitted there was no evidence that it was given to the appellant at the time of contract renewal, and because no notice was given that the terms of insurance had been changed. She pointed out that proper notice of changes in the contract was required by regulation.

Ms. Giguère reminded the Tribunal that by late May 2000 AGRICORP knew about the acreage increase and visited the fields. She suggested that as there had been no adjusters report made that the Tribunal should adjust the claim on the basis of the evidence. She noted that Mr. Roberts said he did not like the look of the land, but that soil tests commissioned by Laplante Combining Inc. showed it was fine land. She said that a ruling to adjust the claim on the total acreage would be fair.

Ms. Giguère reminded the Tribunal that Mr. McGowan had agreed that the AGRICORP interpretation as to how USAB claims are adjusted was not documented. She suggested that the doctrine of contra proferentum applied. This stated that when there is ambiguity in the interpretation of a written document, it should be interpreted in favour of the party that did not write it. In this case that was the appellant.

Ms. Giguère also asked that the Tribunal take into account that AGRICORP was in breach of the law as it had attempted to amend the contract without notice. She submitted that the appellant’s USAB coverage was increased in 1999, and that the appellant was not required to report the large increase in acreage at that time. She also reminded the Tribunal that the French version of AGRICORP’s forms outlined different requirements than the English versions.

Mr. Wechselmann took the position that no payment was due on the Laplante Combining Inc. claim. He pointed out that Mr. Laplante had testified that he received the Contract of Insurance in February 2000 but that he did not read it. He submitted that the contract was very clear in setting out the requirement to report increased acreage by May 1st. He said the instructions on AGRICORP forms also directed clients to report increased acreage. He suggested that Mr. Laplante had misunderstood the insurance policy and that he had erred in assuming that information reported to ACC would be forwarded to AGRICORP.

Mr. Wechselmann pointed out that Ms. Vlcek was a trained and experienced staff member and he submitted that it was unlikely that she would have missed something as important as a report of a large increase in acreage. He pointed out that even if she had missed reported information, that Mr. Laplante had 15 days to resolve the matter when he received his confirmation form.

Mr. Wechselmann pointed out that under Clause 5(3) of the Crop Insurance Act insured growers are deemed to have accepted terms of their insurance contract unless they notify AGRICORP within the prescribed time period. He acknowledged that there were differences in the wording on the French and English versions of the AGRICORP forms. But he submitted that the contract was clear, and that taking all the information into consideration, the appellant should have known that increased acreage was to be reported by May 1, 2000. He submitted that there had been no change in the insurance policy with regard to USAB coverage between 1999 and 2000.

Mr. Wechselmann reiterated that the AGRICORP position was that there was only 750 acres covered in the contract and that since 1510 acres were planted Laplante Combining Inc. could not receive a benefit. He also reminded the Tribunal that AGRICORP staff had testified that at least 540 acres would not have qualified under the terms of the policy. He suggested that Ms. Giguère was requesting that the Tribunal punish AGRICORP by awarding a full adjustment of the claim and he submitted that this was not appropriate.

Findings

The Tribunal finds that there was a Contract of Insurance between AGRICORP and Laplante Combining Inc. and that AGRICORP gave effective notice of the contract to the company, then known as Richard Laplante, in early 2000. The evidence was that Mr. Luc Laplante received this Contract of Insurance. The Tribunal finds there were no new provisions with regard to USAB coverage or requirements in this contract. USAB remains consistent with previous Crop Insurance policy.

In considering the argument of doctrine of contra proferentum the Tribunal carefully examined the documents submitted. The Tribunal finds that the Contract of Insurance was crystal clear in outlining the requirement that insured growers must report acreage increases of greater than 10% to the insurer by May 1st. The Tribunal notes that the need to report increased acreage was also referenced in the Notice of Renewal (French version), dated March 13, 2000 and the Final Report (French version), dated May 24, 2000. It notes the reporting deadline was not as clear on these forms as in the contract.

The Tribunal accepts the testimony of Mr. Luc Laplante that he informed Ms. Vlcek that the reason the company was changing its name was because it was expanding. The Tribunal also accepted the testimony of Ms. Vlcek that Mr. Laplante did not mention his desire to extend USAB coverage over his increased acreage in February 2000 or March 2000. The evidence was that Mr. Laplante did not know the full planting intentions of Laplante Combining Inc. at that time, as the company had not yet finalized its land leasing arrangements. The Tribunal finds that Mr. Laplante gave no effective notice of the increased land base to AGRICORP before May 1, 2000. Therefore, the Tribunal finds that Laplante Combining Inc. had 750 acres of USAB coverage in 2000.

The Tribunal finds that the Contract of Insurance allowed AGRICORP the flexibility of extending the USAB coverage beyond 750 acres, despite the late notice. The conditions under which the reporting deadline might be extended were not documented. AGRICORP clearly knew that Laplante Combining Inc. had increased its acreage by late May 2000. It may have been possible for the insurer to inspect the new land to determine its eligibility at that time. The evidence was that AGRICORP did not attempt to do so as it determined that the insured grower had not reported the increased acreage in time. Whether or not adequate notice has been served will always be a question for the Tribunal to determine.

After further careful consideration of the evidence and submissions made, the Tribunal recommends that AGRICORP should modify its reporting forms to harmonize the French and English versions and to clarify that May 1st is the date by which increased acreage must be reported if additional USAB coverage is desired.

A review of the criteria for denying USAB coverage listed in Part II, Section E of the Contract of Insurance may be appropriate, given evolving farm production practices.

Decision and Reasons

After careful consideration of the evidence and submissions made, the Tribunal decided to deny the appeal for the following reasons:

1. The appellant did not give effective notice of his intention to increase his Unseeded Acreage Benefit coverage to AGRICORP as stated in the Crop Insurance Policy Contract of Insurance booklet.

2. AGRICORP acted within the terms of the Contract of Insurance in denying the payment of the claim.

DATED AT Guelph, Ontario this 12th day of March, 2001.