Hamm v. Agricorp, 2005 ONAFRAAT 19

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

Tribunal d’appel de l’agriculture, de l’alimentation et des affaires rurales

N1G 4Y2 Tel: (519) 826-3433, Fax: (519) 826-4232 Email:Tribunal@OMAF.gov.on.ca

1, chemin Stone Ouest Guelph (Ontario) N1G 4Y2 Tél.: (519) 826-3433, Téléc.: (519) 826-4232 Email:Tribunal@OMAF.gov.on.ca

AGRICULTURE, FOOD AND RURAL AFFAIRS APPEAL TRIBUNAL

APPEAL:

Hamm v Agricorp

Hamm v Agricorp 2005 ONAFRAAT 19

STATUTE:

Crop Insurance Act

HEARING:

June 23, 2005

DATE OF DECISION:

July 11, 2005

2005-19

NEUTRAL CITATION:

2005 ONAFRAAT 19

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 Diana Hamm, Tilsonburg, Ontario from a decision of AGRICORP concerning the adjustment of her claim for her 2003 cucumber crop under Regulation 380/97 and the Vegetable Crops Insuring Agreement.

Before:

Rod Stork, Chair; Kirk Walstedt, Vice Chair; Doug Flook, Member

Appearances:

Diana Hamm, appellant..

Victor Hamm, on behalf of Diana Hamm.

Jim Zavitz, Senior Manager of Customer Service, on behalf of AGRICORP.

Doug Green, Regional Manager, witness for AGRICORP.

Roger Donais, Compliance Officer, witness for AGRICORP.

Roger Geysens, Adjuster, witness for AGRICORP.

Dave McDowell, formerly Adjuster, witness for AGRICORP.

John Barkovic, Regional Manager, witness for AGRICORP.

DECISION OF THE TRIBUNAL

This appeal was heard in Guelph, Ontario on Thursday, June 23, 2005. Ms. Diana Hamm appealed to the Agriculture, Food and Rural Affairs Appeal Tribunal (the Tribunal) from the decision of AGRICORP concerning the adjustment of loss on her claim for the 2003 cucumber crop under Regulation 380/97 and the Vegetable Crops Insuring Agreement.

The Background

Ms. Diana Hamm is the owner of Diana Hamm, a business entity that produced cucumbers in 2003 under a contract of insurance with AGRICORP.

Mr. Victor Hamm, husband of Ms. Hamm is an operator of Ontario Green Shippers Ltd. The two companies are separate though common staff, equipment and premises are employed to produce their respective crops.

In 2003, AGRICORP issued a 50/50 percentage contract of crop insurance to the two companies. An adjustment of claim was made with respect to a crop insurance claim by Ontario Green Shippers Ltd. Diana Hamm made a claim for the 2003 cucumber crop. Ms. Hamm disputed the adjustment of claim offered by AGRICORP for the 2003 cucumber crop.

Statutory Context

Section 10 of the Crop Insurance Act (Ontario) states:

Referral of disputes

10. (1) If AgriCorp and a person disagree whether the 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, 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 Tribunal.

Notice of appeal

(2) To appeal a matter in dispute, the appellant shall file a written notice of appeal with the Tribunal and send a copy of the notice to the other party within the time specified by the regulations made under this Act.

Exclusive jurisdiction

(3) The Tribunal has exclusive jurisdiction to hear and determine all appeals arising under subsection (1).

Decision binding

(4) The decision of the Tribunal in an appeal is binding on the parties. 1999, c. 12, Sched. A, s. 7 (2).

The Issue

The issue before the Tribunal is:

Should AGRICORP pay $148,649.36 on the adjustment of claim for Diana Hamm on her 2003 cucumber crop.

The Evidence

Diana Hamm and Victor Hamm

Ms. Diana Hamm submitted evidence on behalf of her appeal and was assisted by the testimony of her husband Mr. Victor Hamm.

Ms. Hamm told the Tribunal that AGRICORP alleged that she made misrepresentations with respect to the 2003 cucumber crop. She said that it was important to her that the allegation did not remain unchallenged. Mr. Hamm stated that there was no deliberate attempt to mislead AGRICORP and that the central point of the appeal was not the adjustment of claim, but that injurious allegations had been made by AGRICORP. Ms. Hamm submitted a letter dated July 22, 2004 to the Tribunal. She explained that the letter addressed to herself from Mr. Jim Zavitz, Senior Manager Customer Service indicated that AGRICORP had decided to cancel her contract of insurance based on the alleged planting of cucumbers after the deadline, misrepresentation of the Final Acreage Report (FAR) and not reporting un-harvested acres. Ms. Hamm submitted the records of the spray operator and his affidavit with respect to his activities for the 2003 cucumber crop to the Tribunal. Mr. and Ms. Hamm explained to the Tribunal that:

• They planted half the crop and reported it to AGRICORP. When the balance of the crop was planted, it was reported to AGRICORP. The first half of the crop was planted by mid June. They followed their usual planting and reporting procedures in 2003.
• In 2003 the field staff followed the procedure for planting and spraying the crop as usual, however, a new office employee was hired who did not accurately record the field records with respect to acreage planted and herbicide spraying. The spray records as submitted were incomplete as a result.
• The spray records submitted, contained data related to crop spraying for Diana Hamm and Ontario Green Shippers Ltd..
• Victor Hamm informed AGRICORP of the FAR by way of telephone for the 2003 cucumber crop.
• Though they are operated by the same family; Ontario Green Shippers and Diana Hamm are separate corporate entities. Crop reports are submitted to AGRICORP separately for each company.
• Neither Diana or Victor Hamm attended in the fields to monitor the 2003 cucumber crop, thus they relied on the field staff for reporting the various stages of planting, spraying and harvesting.
• There was tremendous difficulty administering the business affairs of Diana Hamm in 2003 due to financial pressures and ongoing financial monitoring.
• Several business administration functions were assumed by legal and financial parties who did not inform them what had transpired.
• An investigation of the claim was conducted during the winter of 2003 however they were not informed of the results of the investigation and cancellation of the contract of insurance until October 2004. The letter informing of the cancellation was dated July 22, 2004.
• They co-operated with Mr. Larry McKurdy from AGRICORP, during the investigation of the claim which involved the questioning of their staff, growers and truck drivers.
• Several telephone calls were made to AGRICORP during the winter of 2003 to inquire about the status of the claim.
• On June 10, 2004, Mr. Jim Zavitz, Senior Manager of Customer Service with AGRICORP sent a fax indicating that the claim was approved for payment however it remained to determine to whom the claim should be paid.

Mr. and Ms. Hamm submitted a copy of their telephone bill which indicated that on August 19, 2003 and August 22, 2003 telephone calls were made to a St. Thomas number. With regard to the telephone calls they stated that:

• They were calling Mr. David McDowell, (at that time an AGRICORP Adjuster) at his home to inform him that there would be a claim with respect to the 2003 cucumber crop.

Mr. and Ms. Hamm submitted that:

• The cucumber crop was produced to suit customer demand. Some customers required cucumbers earlier in the season than others.
• The cucumber crops for Diana Hamm and Ontario Green Shippers Ltd are 100 percent machine harvested.
• Mr. Victor Hamm took charge of staging the planting of the crop, to suit customer demand.
• The cucumber yields looked promising in August 2003.
• They telephoned Mr. McDowell, as indicated on the telephone records, to inform him that some of the crop was being bypassed in the fields.
• Cucumbers are very susceptible to weed pressures. They had developed their own unique method of managing weed pressure. Roundup is sprayed on no till fields to clear them of vegetation before planting. They employed ‘no till’, a method that leaves the soil cooler, necessitating the planting of the seeds at a deeper level. Deep planting created variations in seedling emergence which in combination with the unpredictability of the weather makes the production of cucumbers more capricious.
• Spraying of cucumbers is done anywhere from two to ten weeks after planting. The spraying of the 2003 cucumber crop can be estimated to have started on June 26, 2003.

Mr. and Ms. Hamm submitted the Crop Inspection Report from September 1, 2003 to the Tribunal. They explained that the Report indicated that Mr. Dave McDowell, Adjuster for AGRICORP gave his permission to destroy 390 acres of the cucumber crop. They told the Tribunal that the Report was signed by Joe Hamm, their Manager in charge of Field Operations. Mr. and Ms. Hamm submitted a copy of an AGRICORP Assignee Cheque Mailer for Ontario Green Shippers Ltd to the Tribunal. The said that payment was made on an adjustment of claim for cucumbers for Ontario Green Shippers Ltd., but the Diana Hamm portion of the contract of insurance had been cancelled.

In response to questions Mr. and Ms. Hamm stated that:

• A settlement of claim was reached for Ontario Green Shippers as a result of a meeting between its lawyers, representatives of AGRICORP and representatives for the ACC Farmers Financial.

Mr. Jim Zavitz, AGRICORP Senior Manager of Customer Service, told the Tribunal that he and Mr. Doug Green, Regional Manager for AGRICORP had tried to contact Mr. and Ms. Hamm to inform them of the settlement with respect to the Ontario Green Shippers Ltd. but that Mr. Hamm had indicated he did not wish to discuss the matter. Mr. Zavitz told the Tribunal that AGRICORP was prepared to meet with Diana Hamm to reach a settlement with respect to her contract of insurance.

The hearing adjourned to allow the parties to discuss a settlement of the Diana Hamm 2003 cucumber claim.

The hearing resumed as the parties indicated that they could not reach a settlement.

Mr. and Ms. Hamm continued their submissions stating that:

• If Ms. Hamm had known that there was a contestation of her claim sooner than the fall of 2004, she may still have been able to obtain some of the handwritten documents that may have verified her position.
• They are aggrieved that AGRICORP neglected to inform them for almost a year that the claim was being reconsidered.

In response to questions Mr. and Ms. Hamm stated that:

• On the Ontario Vegetable Growers’ Marketing Board (OVGMB) Harvest Report as submitted by them, the acres of cucumbers grown and the corresponding yields are equally distributed between Ontario Green Shippers Ltd. and Diana Hamm.
• The average time from cucumber seeding to harvest is 60 days.
• Emergence of the cucumber plants takes from 10 to 14 days on average. Emergence is dependent on the weather.
• Cucumbers can become unmarketable virtually overnight.
• Cucumber growing fields are sprayed, prior to planting, pre-emergent and post emergent.
• The total acreage of cucumbers sprayed was 7,500 acres, however AGRICORP had recorded that 2,200 acres were sprayed.
• The time of planting can be estimated from reviewing the spray records as it is their practice to spray all cucumber fields at least once with Roundup. Late planted fields are sprayed twice with Roundup and sometimes an application of grass control herbicide is applied.
• The spray operator confirmed with Mr. Hamm verbally that spray records for some fields were missing and that he was certain that 1,100 acres of cucumbers had been planted.
• Cucumbers were planted after July 10, 2003 though it is not certain how many acres.
• Historically claims have been adjusted in situations where late planting occurred. The calculation for adjustment was based on the subtraction of the Guaranteed Production from the total acreage planted (the total acreage includes the late planted acreage).
• Mr. Hamm recollected attending a meeting with John Barkovic, Regional Manger for AGRICROP in December 2000, he remembered that he came away from the meeting with the understanding that AGRICORP requires that an insured be given its permission to abandon acres prior to the acreage being abandoned.
• They were not in attendance at the meeting when the claim for Ontario Green Shippers Ltd. was settled, nor were their interests represented.
• AGRICORP proceeded to make an offer of settlement of claim for Diana Hamm, based on the Ontario Green Shippers Ltd. claim which is based on completely different information. It is inappropriate to adjust the Diana Hamm claim using information pertaining to the Ontario Green Shippers Ltd. claim.
• In 2003 they had five harvesting machines in operation. On average 125 acres per day were harvested. The OVGMB Harvest Report confirms the 2003 harvest.
• As indicated on the Proof of Loss Form, submitted by Diana Hamm, the harvest was completed on September 15, 2003.

John Barkovic

Mr. Barkovic testified before the Tribunal stating that he was theAGRICORP’s Regional Manager for South Central Ontario. He stated that his position involved all aspects of crop insurance. Mr. Barkovic explained to the Tribunal that:

• He adjusted a claim for Mr. and Ms. Hamm in 2002 however he was not involved with any adjustments in 2003.
• He met with Mr. Hamm and Dave McDowell, Adjuster, in 2002, to discuss a settlement of claim for the 2002 cucumber crop for Ontario Green Shippers Ltd. He and Mr. McDowell emphasized to Mr. Hamm the necessity of informing AGRICORP prior to by-passing acreage.
• He feels certain that Mr. Hamm understood the procedure for by-passing acreage.
• Separate contracts of insurance could not be issued to Diana Hamm and Ontario Green Shippers Ltd., because they did not meet legislative requirements for financial management, crop storage and disbursement. Therefore Mr. and Ms. Hamm’s respective businesses were insured under a ‘percentage contract’ of insurance. The insurance contract was split; 50 percent for Diana Hamm and 50 percent for Ontario Green Shippers Ltd.
• Mr. and Ms. Hamm understood the necessity for pro rating the acreages for their respective companies.

In response to questions Mr. Barkovic told the Tribunal that AGRICROP had never been concerned that data pertaining to crop insurance was not accurately pro-rated for Diana Hamm and Ontario Green Shippers Ltd..

David McDowell

Mr. McDowell told the Tribunal that he was formerly an Adjuster for AGRICORP. He stated that he had adjusted claims for Mr. and Ms. Hamm in 1999 and 2000. He stated that:

• He was aware of the percentage contracts of insurance held by Mr. and Ms. Hamm.
• He recalled being telephoned in August 2003 as indicated by the telephone records submitted by Mr. and Ms. Hamm. He remembers that Mr. Hamm called to tell him that some acres were not harvestable. The date of first by-pass was August 4, 2003, however he does not know the dates that other fields were by-passed.
• At harvest time in 2003 Mr. and Ms. Hamm provided him with a schedule indicating the harvested and by-passed fields.
• He arrived to inspect the cucumber fields on September 1, 2003. Joe Hamm conducted his tour of inspection. At the time he understood that approximately 390 acres had been by-passed.
• It was not until later in September that he became aware that 447 acres were by-passed as indicated on the second page of the harvest, by-pass schedule submitted in the AGRICORP document brief. He was not in possession of the second page of the harvest by-pass schedule at the time of his September 1, 2003 farm visit.
• He was informed of the intent to by-pass anywhere from one to ten days before the by-pass occurred.
• Cucumbers can become unmarketable in two to three days. On the September 1, 2003 field inspection he observed some fields of unmarketable cucumbers. The cumbers appeared large and yellow; some had begun to decay.
• He cannot estimate what the condition of the cucumbers that he saw September 1, 2003 would have been on August 19th and 22nd; the dates upon which, Mr. Hamm indicated by way of telephone, that they were by-passed..
• On the September 1, 2003 Crop Inspection Report he gave his permission to release fields due to the unsalvageable cucumbers. His permission to release fields should not be construed as agreement that a claim will be paid.
• Joe Hamm did not anticipate that a claim would be made in 2003 as he indicated on September 1, 2003 that yields from other fields would offset the loss of yield from un-harvested fields.
• On the September 1, 2003 Crop Inspection Report he indicated that there was loss due to insured perils but the extent would not be known until harvest was complete.
• The yield declaration, proof of loss form was completed on November 3, 2003; it was at this time that he first became aware that the claim was in the amount of approximately $150,000.
• He did not have the authority to approve a claim of that size.
• As Ms. Hamm was not home he requested Mr. Hamm’s signature on a Non Waiver Agreement on November 3, 2003. Mr. Hamm declined. Signatories to the Non Waiver Agreement indicate their understanding that though a proof of loss form may be signed by the adjuster, AGRICORP makes no promise to pay the amount of claim that may be indicated on the proof of loss form.
• He was unable to sign the proof of loss form as a result of not being able to obtain a signature for the Non Waiver Agreement.
• He is certain that Mr. and Ms. Hamm knew that failure to report abandoned acres prior to by-passing them could result in a reduction of claim.
• In circumstances where double cropping had occurred, it was his practice to exclude any late planted acres from the calculation of claim.

In response to questions Mr. McDowell told the Tribunal that:

• He cannot remember with certainty when he was given the cucumber harvest, by-pass schedule.
• Producers should be able to estimate within a lead time of four to five days that some acres will be un-harvested. They can then meet the requirement of obtaining permission from AGRICORP before by-passing acres.
• Mr. Hamm had by-passed acres before he informed the Adjuster.
• Non Waiver forms are signed in circumstances where an adjuster is not comfortable with a claim.
• Insured perils do not include circumstances where a grower is denied access to a field or equipment failure.

Roger Geysens

Mr. Roger Geysens testified before the Tribunal stating that he has been an Adjuster with AGRICORP since 1991. He stated that he is experienced with adjusting claims arising from losses to insured cucumber crops. Mr. Geysens told the Tribunal that:

• Planting dates are dependant on the method of harvest. Cucumbers that are hand harvested are planted in late May to early June. Cucumbers that are machine harvested are continuously planted.
• Generally, machine harvested cucumbers are planted based on the estimate of yields that will meet 80 percent of the capacity of the harvest machinery.
• Average emergence for cucumbers is seven days.
• Average length of time from planting to harvest is 56 days, depending on the weather.
• It is of the utmost importance that producers inform AGRICORP before they by-pass acres so that an inspection can take place to determine if the by-pass is due to an insured peril.
• By comparing the planting and harvesting schedules, he finds that the range of days from planting to harvest is 49 days to 59 days. In his experience this is a reasonable range.
• Discrepancies in acreages and farm locations arise when the spray schedule is compared to the planting schedule.

Mr. Geysens responded to questions that:

• He does not know at what depth the 2003 Diana Hamm cucumber crop was planted, however it is his understanding that emergence will be delayed due to deeper planting.
• Methods of no till and mulching will leave the soil cooler which delays emergence.

Doug Green

Mr. Doug Green told the Tribunal that he has been a Regional Manager with AGRICORP since March 2004. He stated that prior to March 2004 he was an Adjuster and Claims Manager. Mr. Green told the Tribunal that:

• Mr. Hamm telephoned the FAR for Diana Hamm 2003 cucumbers to AGRICORP on June 12, 2003. Mr. Hamm also called in the FAR for Ontario Green Shippers Ltd. on June 12, 2003.
• The Crop History Reports for Diana Hamm and Ontario Green Shippers Ltd. indicated that each company planted 1,100 acres of cucumbers in 2003.
• The OVGMB Newsletter that was sent to Mr. and Ms. Hamm informed producers of an extension to the deadline for planting cucumbers in 2003.
• AGRICORP Customer Service Records indicate that there were no interactions between Mr. and Ms. Hamm from June 12, 2003 the date upon which Mr. Hamm telephoned the FAR, and September 5, 2003 when a damage report for Diana Hamm cucumbers was telephoned to the Customer Action Center.
• According to the cucumber planting schedule a total of 2,300 acres of cucumbers were planted in 2003. The total acres planted as reported to AGRICORP is 2,200, or 1,100 acres each for Diana Hamm and Ontario Green Shippers Ltd.
• A total of 100.4 acres were planted that were not insured.
• Section P of the Crop Insurance Policy advises of the indemnity limitations and exclusions. The limitations and exclusions of the contract include misconduct by an insured whether deliberate or unintentional. Section P of the contract also provides for limitations or exclusions due to: seeding acreages after the deadline, planting more acres than reported on the FAR and double cropping.
• Pursuant to limitations and exclusions under Section P 4, of the contract, neither Diana Hamm nor Ontario Green Shippers Ltd. obtained permission from AGRICORP to plant any acreage in addition to those previously reported on the FAR.
• The planting schedule indicated that from July 11, 2003 through July 19, 2003 Diana Hamm and Ontario Green Shippers Ltd. late planted 379.5 acres that were not insured.
• In calculating the amount of claim offered, AGRICORP excluded 379.5 late planted acres. The Diana Hamm and Ontario Green Shippers Ltd. contract was based on a 50/50 percent split of insured acreage, the total late planted acres were divided by two for a total of 189.7 acres that were subtracted from the FAR of 1,100 acres for each company. The insurable acres for Diana Hamm and Ontario Green Shippers Ltd. is 910.25.
• The contract of insurance does not contain a by-pass provision for cucumbers, therefore, 201 un-harvested acres per company were not covered as lost due to an insurable peril. The 201 un-harvested acres were covered at level of guaranteed production pursuant to Section F 3 of the contract.

In response to questions Mr. Green stated that:

• It is the policy of the Customer Action Center to record the name of the caller if it is not the insured.
• Production losses are covered under the contract of insurance if it can be determined that the loss was due to an insured peril.
• With regard to Mr. McDowell’s September 1, 2003 Crop Inspection Report, the loss of 390 acres due to mold humidity and accelerated maturity is an insured peril.
• AGRICORP has an approval process for claims. Claims are signed off by a hierarchy of approvers, dependent on the size of the claim. The Diana Hamm claim was outstanding for some time due to its size and the passing away of the adjuster who initiated the processing.
• Most claims are settled within two weeks.
• In circumstances where a processor anticipates that acres must be by-passed he/she should phone the AGRICORP Customer Action Center which will process the damage report and make the arrangements for an adjuster to attend at the farm. Such action is expected of an insured even if he/she is producing cucumbers, a highly perishable crop.
• It is expected that producers will inform AGRICORP of damage due to un-insurable perils, as such damage has an impact on the contract of insurance.

Roger Donais

Mr. Roger Donais told the Tribunal that he is a Compliance Officer with AGRICORP. He stated that he was involved with the Diana Hamm 2003 cucumber claim in the capacity of Director of Operations.

Mr. Donais explained that:

• In circumstances where there is a large claim it is normal procedure to gather field records and review documents.
• The services of a private firm were engaged to investigate the Diana Hamm claim because of the large size of the claim and the complication with respect to the eventual disposition of funds.
• The investigation was initiated at the request of a Director of AGRICORP who did not feel that the information supporting the claim was adequate.
• He explained the deductions and calculations for the offer of settlement submitted by AGRICORP.
• During his review of the claim, it came to his attention that there were un-harvested acres. Abandoned acres are not considered loss due to insured peril. Diana Hamm did not obtain AGRICORP’s permission to abandon acres before doing so. The investigation concluded that the FAR had been misrepresented and that acres had been by-passed without prior permission.
• AGRICORP recognized that there was a production loss, however in acting pursuant to the provisions of the contract of insurance, the claim was adjusted excluding the late planted acres and adjusting the coverage for the abandoned acres to the level of the guarantee of production. The same calculation that was applied to the Diana Hamm claim was also applied to the Ontario Green Shippers Ltd claim for cucumbers for 2003.
• The investigation confirmed that the yield was accurate.

In response to questions, Mr. Donais stated that:

• AGRICORP did not contact Mr. and Ms. Hamm with respect to the investigation, as it believed that it was in possession of all the necessary information for a review of the claim.
• Mr. Zavitz wrote to Ms. Hamm June 10, 2004 to inform her that the claim had been approved and that when the matter of the assignment of the funds had been determined, the claim would be paid. It was Mr. Zavitz’s understanding that the claim had passed through all levels of authorization and was going to be paid.
• The circumstances surrounding the Diana Hamm claim prompted AGRICORP to review and amend its processes with regard to large claim adjustments.
• With respect to the deduction of the cost of the investigation from the settlement offer, he is not certain if such a deduction is standard AGRICORP policy.
• The cost of the investigation was deducted from the Ontario Green Shippers Ltd. claim adjustment as negotiated.

Summations

Mr. and Ms. Hamm submitted their final arguments to the Tribunal. Ms. Hamm stated that she took issue with the amount of time that passed between Mr. Zavitz’s June 10, 2004 letter stating that the adjustment of claim was authorized until the completion of the investigation and presentation of AGRICORP’s offer of settlement. She stated that she expected a higher standard of communication and accountability from AGRICORP.

Ms. Hamm argued that some of the records pertaining to the 2003 cucumber crop were available until mid-July 2004. She stated that, had she been informed of the investigation from the beginning, she could have made them available for AGRICORP’s scrutiny.

Mr. and Ms. Hamm told the Tribunal that they are displeased with the AGRICORP’s laxity in attending at the farm to inspect the crop 13 days after they telephoned to inform AGRICORP of the necessity to by-pass acres. Mr. and Ms. Hamm submitted that they were also displeased that Mr. McKurdy did not specifically indentify himself to them as an investigator from AGRICORP.

Mr. and Ms. Hamm told the Tribunal that AGRICORP attempted to abscond from its responsibility to correctly adjust the claim and that it refused to be accountable for its delays and mistakes in processing the claim. Mr. and Ms. Hamm requested that the cost of the investigation not be deducted from the claim. They also requested that the Tribunal order AGRICORP to pay the initial claim of $148,649.36.

Mr. Jim Zavitz made closing statements on behalf of AGRICORP. He stated that AGRICORP had no need of further documents from Ms. Hamm for the investigation as AGRICORP had in its possession all the evidence from which it eventually completed its investigation.

Mr. Zavitz argued that the spray records submitted by Ms. Hamm were inaccurate and did not correspond with the seeding and harvest schedules. Mr. Zavitz reminded the Tribunal that, although the spray operator had submitted his records and an affidavit, he was not present for cross examination on his activities. Mr. Zavitz told the Tribunal that AGRICORP relied upon the seeding and harvest schedules as reliable indications of the actual acreage that was insurable. He said that the seeding schedule indicated that over 700 acres were planted after July 10. He argued that Mr. and Ms. Hamm should have telephoned AGRICORP to report the late planting; as a result 189.75 acres were deducted from the Diana Hamm contract of insurance.

Mr. Zavitz told the Tribunal that Mr. McDowell and Mr. Barkovic had met with Mr. Hamm and impressed upon him the necessity to report late planting and to obtain the permission of AGRICORP prior to abandoning acres. He said that Mr. and Ms. Hamm’s assertion that AGRICORP was tardy in attending at the farm to verify the need to by-pass acres is inaccurate. He stated that Mr. and Ms. Hamm advised AGRICORP of the by-pass after the fact. Mr. Zavitz stated that AGRICORP must be afforded the opportunity to determine if a loss is due to an insured peril.

Mr. Zavitz told the Tribunal that AGRICORP apologizes for the delay in processing the claim due to communication difficulties and the investigation. He said that the provisions of the contract permitted AGRICORP to cancel the contract due to misrepresentation by the insured, whether the misrepresentation was deliberate or unintentional.

Mr. Zavitz argued that AGRICORP re-instated the contract and made an offer of settlement. He said that AGRICORP cannot make an adjustment of claim based on incorrect information. Mr. Zavitz requested that the Tribunal uphold AGRICORP’s offer of settlement in the amount of $18,663.93.

The Findings

The Tribunal is convinced by Mr. and Ms. Hamm’s testimony and Mr. Zavitz’s assertion that the spray schedule and the affidavit of the spray operator does not provide a complete and accurate indication of acres planted. The Tribunal finds however, that the analysis and comparison of the seeding and harvest schedules submitted by Ms. Hamm is a more reliable method of determining the total acres planted. The seeding and harvest schedule provides an indication of acres planted after the deadline.

The Tribunal accepts the evidence of Mr. Hamm and Mr. Geysens that emergence of the cucumber plant varies due to weather and other factors.

There is no evidence to indicate that Mr. and Ms. Hamm were not aware of the planting deadlines or that they did not receive the Newsletter advising of the extended late planting deadline in the 2003 Cucumber Plan Highlights as distributed by the Ontario Processing Vegetable Growers’ Marketing Board. The evidence indicates that no telephone calls to report additional acres were made to the AGRICORP Customer Action Center from June 12, 2003 when the FAR was reported, until September 5, 2003 when damage was reported.

The Tribunal accepts the evidence as indicated from analysis of the harvest schedule and Mr. McDowell’s testimony, that 447 is the total amount of acres that were planted after the deadline. It is consistent with the administration of the 50/50 percent contract of insurance between Diana Hamm and Ontario Green Shippers Ltd that the total amount of late planted acres be divided by two. The Tribunal agrees with AGRICORP’s calculation that 189.75 acres were planted by Diana Hamm after the deadline. The Tribunal notes that neither Mr. nor Ms. Hamm disputed the evidence with respect to the number of late planted acres.

The Tribunal accepts the evidence of Mr. and Ms. Hamm and Mr. McDowell that cucumbers can become unmarketable within a few days, consequently, it is not convinced that notification of the pending abandonment of acres was the subject of the telephone calls to Mr. McDowell on August 19, 2003 and August 22, 2003 as there was no indication of the urgency for inspection as Mr. and Ms. Hamm’s evidence indicates that they waited until September 1, 2003 for Mr. McDowell to inspect the crop. The Tribunal is not convinced that Ms. Hamm exercised due diligence with respect to obtaining permission from AGRICORP prior to abandoning portions of the crop

Mr. Donais’ evidence with respect to the assessment of cost for the investigation against the insured, is that he does not know if it is a standard procedure and he did not refer to any particulars of the contract of insurance that provided for such costs to be assessed against the insured. The Tribunal finds that there is no contractual obligation incumbent on the insured to pay the costs of the investigation.

From the testimony of Mr. and Ms. Hamm, the Tribunal is convinced that errors and omissions occurred with respect to the records pertaining to the cucumber crop but that there was no deliberate intent on the part of Mr. or Ms. Hamm to misrepresent information pertaining to the 2003 cucumber crop.

Decision and Reasons

After careful consideration of the evidence and submissions made, the Tribunal orders that:

1. AGRICORP pay an adjustment of claim for the Diana Hamm 2003 cucumber crop with no deduction for the cost of the investigation. The total amount AGRICORP shall pay on the claim is $24,747.15.

The reason for this decision is evident in the findings above.

DATED AT Essex, Ontario this 11th day of July, 2005.