Helena Chem. Co.v Wilkins
| Decision Date | 08 March 2000 |
| Docket Number | No. 04-99-00107-CV,04-99-00107-CV |
| Citation | 18 S.W.3d 744 |
| Parties | (Tex.App.-San Antonio 2000) HELENA CHEMICAL CO. and Hyperformer Seed Co. Appellants / Cross-Appellees v. Kenneth WILKINS and Tom Wilkins, Individually and d/b/a Chapotal Farms and Porciones 99 Properties; Geen Wilkins and Mark Wilkins, Individually and d/b/a Tabasco and Wilkins Family Limited Partnership Appellees / Cross-Appellants |
| Court | Texas Court of Appeals |
Sitting: Phil Hardberger, Chief Justice Catherine Stone, Justice Sarah B. Duncan, Justice
Helena Chemical Company and Hyperformer Seed Company (collectively "Helena") appeal the trial court's entry of judgment, in which Kenneth, Tom, Geen, and Mark Wilkins, as well as their respective business entities, (collectively "the Wilkins") were awarded $360,000 plus attorney's fees following a jury trial.
Helena raises five issues on appeal. In its fourth issue, Helena asserts that the Wilkins are barred from asserting their claims because of their alleged failure to fulfill the arbitration requirements of the Texas Agriculture Code. In its fifth issue, Helena claims the trial court abused its discretion in admitting testimony by the Wilkins' expert. In its first, third, and second issues, Helena asserts that the evidence is legally and factually insufficient to support the jury's verdict as to causation, liability, and damages. On cross-appeal, the Wilkins claim the trial court erred in its manner of assessing pre-judgment interest.
The Wilkins manage farms in Hidalgo and Starr Counties. Helena sells seed. The Wilkins purchased Cherokee grain sorghum1 from Helena in 1992, 1993, and 1994. The Wilkins claim to have relied upon Helena's promotional literature, which states that Cherokee has "excellent dryland [(farmland with little or no irrigation)] yield potential."2
Although the Wilkins' 1992 Cherokee crop produced a high yield, their 1993 and 1994 Cherokee crops suffered from reduced yields. The parties disagree as to the cause of the reduced yield. The Wilkins claim that the 1993-94 crops "failed to produce or perform as expected, or as represented by [Helena]." They argue that the Cherokee failed because it is not drought resistant or tolerant to charcoal rot.
Helena argues that the Cherokee seed failed because the Wilkins had planted cotton (which reduces soil moisture) a year earlier on a portion of the field, which reduced the Cherokee yield significantly on that part of the field. According to Helena, Cherokee is tolerant to charcoal rot (but is not immune) and grows well in dryland conditions (but not when the underlying soil has been depleted of its moisture in a previous cotton crop).
The Wilkins sued Helena on February 7, 1995, alleging that Helena had violated the Deceptive Trade Practices Act ("DTPA"), breached implied and express warranties, and committed fraud. On February 21, 1995, Helena filed a plea in abatement and motion to compel arbitration of the Wilkins' claims. On April 5, 1995, the trial court abated the proceeding and granted Helena's motion to compel. On August 30, 1996, the Wilkins submitted the matter to arbitration. On October 16, 1996, the Texas Plant and Seed Board declined to arbitrate the matter because the crops were not in "field conditions." The trial court subsequently lifted the abatement.
A jury found for the Wilkins on the different theories of recovery, except on the question of fraud and whether Helena had committed these acts knowingly. The jury awarded damages to the Wilkins in the amount of $360,000. The trial court entered judgment against Helena, awarding prejudgment interest from October 23, 1996 (the day the Seed and Plant Board stated that the Wilkins' claims did not qualify for arbitration). Helena appeals; the Wilkins appeal as to the date from which prejudgment interest is computed.
In its fourth issue, Helena asserts that the Wilkins are barred from asserting their claims because they failed to comply with the requirements imposed by the Texas Agriculture Code. The Agriculture Code provides, in part:
(a) When a purchaser of seed designed for planting claims to have been damaged by the failure of the seed to produce or perform as represented by warranty or by the label required to be attached to the seed under this subtitle or as a result of negligence, the purchaser must submit the claim to arbitration as provided by this chapter as a prerequisite to the exercise of the purchaser's right to maintain a legal action against the labeler....
(b) Any period of limitations that applies to the claim shall be tolled until the 11th day after the date of filing with the commissioner of the report of arbitration by the board of arbitration.
(c) A claim of damages due to the failure of the seed as described by Subsection (a) of this section may not be asserted as a counterclaim or defense in any action brought by a seller against a purchaser until the purchaser has submitted a claim to arbitration.
(d) When the court in which an action has been filed by a seller of seed described by Subsection (c) of this section receives from the purchaser a copy of the purchaser's complaint filed in arbitration, accompanied by a written notice of intention to use the claim as a counterclaim or defense in the action, the seller's action shall be stayed. Any period of limitations that applies to the claim is suspended until the 11th day after the date of filing with the commissioner of the report of arbitration by the board of arbitration.
Tex. Agric. Code Ann. 64.002 (Vernon 1995) (emphasis added). The code requires seed bags to provide a notice alerting the farmer to the requirement of submitting claims to arbitration. See id. 64.003. The seed bag tendered as an exhibit to this court contains such a notice.
The Agriculture Code sets forth the arbitration procedure, in part, as follows:
(a) A purchaser may begin arbitration by filing...a sworn complaint and a filing fee, as provided by department rule. The purchaser shall send a copy of the complaint to the seller by certified mail. Except in the case of seed that has not been planted, the complaint must be filed within the time necessary to permit effective inspection of the plants under field conditions.
....
(c) The commissioner shall refer the complaint and the answer to the arbitration board for investigation, findings, and recommendations.
....
(e) The report of the arbitration board shall include findings of fact, conclusions of law, and recommendations as to costs....
(f) In the course of its investigation, the...board or any of its members may:
(1) examine the purchaser and the seller on all matters that the arbitration board considers relevant;
(2) grow to production a representative sample of the seed through the facilities of the commissioner or a designated university under the commissioner's supervision; or
(3) hold informal hearings....
....
(h) The arbitration board shall consider any field inspection or other data submitted by either party in its report and recommendation....
Id. 64.006 (Vernon Supp. 2000). The effect of arbitration is that:
In any litigation involving a complaint that has been the subject of arbitration under this chapter, any party may introduce the report of arbitration as evidence of the facts found in the report, and the court may give such weight to the arbitration board's findings of fact, conclusions of law, and recommendations as to damages and costs as the court determines advisable. The court may also take into account any findings of the board of arbitration with respect to the failure of any party to cooperate in the arbitration proceedings, including any finding as to the effect of delay in filing the arbitration claim or the arbitration board's ability to determine the facts of the case.
Id. 64.004 (Vernon 1995). We did not locate any Texas case law reviewing these sections of the Agriculture Code as they relate to this case. If the Wilkins' claims are barred, then the trial court did not have subject matter jurisdiction to hear the case.
The question of whether a trial court has subject matter jurisdiction is a question of law subject to de novo review. See Mayhew v. Town of Sunnyvale, 964 S.W.2d 922, 928 (Tex. 1998). We construe the petition in favor of the Wilkins and, if necessary, review the entire record to determine if any evidence supports the district court's jurisdiction to hear the cause. See Texas Ass'n of Bus. v. Texas Air Control Board, 852 S.W.2d 440, 446 (Tex. 1993). Unless the pleadings demonstrate the absence of jurisdiction, we assume the trial court properly had jurisdiction over the case. See Peek v. Equipment Serv. Co., 779 S.W.2d 802, 804 (Tex.1989).
The purpose of statutory construction is to ascertain legislative intent. See Woods v. Littleton, 554 S.W.2d 662, 665 (Tex.1977). Where the intent is clear, it will be given effect, even if the result appears to be harsh. See Boudreaux v. Texas and N.O.R. Co., 78 S.W.2d 641, 644 (Tex. Civ. App.-Beaumont 1935, writ ref'd). In ascertaining this intent, the Legislature has provided that words and phrases shall be read in context and construed according the rules of grammar and common usage. See Tex. Gov't Code Ann. 311.011(a) (Vernon 1998). A court may consider, among other things, the object sought to be obtained and the consequences of any particular construction. See id. 311.023; Cole v. Texas Employment Comm'n, 563 S.W.2d 363, 367 (Tex. Civ. App.-Fort Worth 1978, writ dism'd).
(1) Framing the Issue Properly
Public policy favors agreements to resolve legal disputes through agreements to arbitrate. See EZ Pawn...
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