Helena Chem. Co. v. Wilkins

Decision Date26 April 2001
Docket NumberNo. 00-0418,00-0418
Citation47 S.W.3d 486,44 Tex. Sup. Ct. J. 675
Parties(Tex. 2001) Helena Chemical Company and Hyperformer Seed Company, Petitioners 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, Respondents
CourtTexas Supreme Court
On Petition for Review from the Court of Appeals for the Fourth District of Texas

[Copyrighted Material Omitted]

[Copyrighted Material Omitted]

[Copyrighted Material Omitted] Justice Baker delivered the opinion of the Court, in which Chief Justice Phillips, Justice Enoch, Justice Hankinson, Justice O'Neill, and Justice Jefferson joined.

This is a case of first impression involving the Texas Seed Arbitration Act.1 The Act requires that certain defective-seed claims be submitted to arbitration as a prerequisite to maintaining a legal action against the labeler. We must decide whether the timeliness requirement for submitting claims to arbitration is jurisdictional under the Act. We conclude that it is not, and that the evidence was legally sufficient to support the jury's verdict on liability, causation, and damages. Accordingly, we affirm the court of appeals' judgment.

I. BACKGROUND

The Wilkinses began farming in 1989 and first planted grain in 1992. Most of their land is nonirrigated dryland. They purchased a Cherokee-variety grain sorghum seed from Helena Chemical Company in 1992, 1993, and 1994. The Wilkinses claim that when they purchased this seed, they relied on Helena's advertising that it had "excellent dryland yield potential." Helena also represented that the seed had a "good field tolerance" to charcoal rot, a condition that causes the grain's stem to weaken and "fall down," reducing yield.

The 1992 crop had a good yield, but the 1993 crop yield was much lower. The Wilkinses claim that Helena's agent blamed this low yield on the seeds being planted too close together and that the agent recommended planting Cherokee seed on the entire tract with increased spacing between seeds. The Wilkinses followed this advice in 1994 with no increase in yield. Helena claims that insufficient rainfall and soil moisture depletion brought about by the Wilkinses' planting cotton on part of the property in 1993 caused the reduced yield.

In February 1995, the Wilkinses sued Helena alleging Deceptive Trade Practices Consumer Protection Act (DTPA) violations, breach of express and implied warranties, and fraud. In March, Helena filed a plea in abatement and motion to compel nonbinding arbitration under the Act. In April, the trial court granted Helena's motion and abated the proceedings. Fifteen months later, the Wilkinses submitted their claims to the Texas Plant and Seed Board for arbitration. The Board declined to arbitrate because the crops were no longer in "field condition" and thus the Board could not inspect the crops.

The trial court lifted the abatement and the case proceeded to trial. The jury found for the Wilkinses on all claims except fraud. It did not find that Helena had acted knowingly. It awarded the Wilkinses $360,000 in damages. The trial court also awarded prejudgment interest from the date the Board declined to arbitrate. Helena and the Wilkinses appealed.

The court of appeals held that Helena had effectively disclaimed any warranties. 18 S.W.3d at 758. But it affirmed the judgment on the DTPA claims, holding that the Board's refusal to arbitrate the Wilkinses' claims did not jurisdictionally bar their suit. 18 S.W.3d at 751-52. It also held that the evidence was legally and factually sufficient to support the jury's verdict on causation, liability, and damages. 18 S.W.3d at 754-59. Finally, in response to the Wilkinses' cross-appeal, the court held that the trial court properly calculated prejudgment interest. 18 S.W.3d at 760. Only Helena petitioned this Court for review.

II. TEXAS SEED ARBITRATION ACT

Helena argues that the trial court did not have jurisdiction over the Wilkinses' claims because the Act requires that all defective-seed claims first be timely submitted to nonbinding arbitration so the Board may effectively inspect the plants under field conditions. Thus, Helena argues, the Wilkinses' delay in submitting their claims for arbitration which caused the Board to refuse to arbitrate jurisdictionally barred the claims.

In response, the Wilkinses argue that submitting their claims to arbitration is all the Act requires. They posit that Helena's interpretation would render other statutory provisions meaningless and note that the Act does not authorize dismissal as a remedy under its arbitration procedures. Thus, the Wilkinses argue, the court of appeals correctly held that once they submitted their claims to arbitration under the Act, the trial court had jurisdiction to hear the claims regardless of whether arbitration actually occurred.

A. Applicable Law
1. Texas Seed Arbitration Act

The Legislature enacted the Act in 1989 to "provide[] for an unbiased third party investigation by the State Seed and Plant Board of the Texas Department of Agriculture of complaints concerning seed performance." House Comm. on Agriculture and Livestock, Bill Analysis, Tex. S.B. 64, 71st Leg., R.S. (1989). Pertinent to this appeal, the Act provides:

§ 64.002. Requirement of Arbitration

(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 . . . .

Tex. Agric. Code § 64.002 (a) (emphasis added).

§ 64.004. Effect of Arbitration

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.

Tex. Agric. Code § 64.004 (emphasis added).

§ 64.005. Arbitration Board

(b) As a board of arbitration, the State Seed and Plant Board shall conduct arbitration as provided by this chapter . . . .

Tex. Agric. Code § 64.005 (b) (emphasis added).

§ 64.006. Arbitration Procedures

(a) A purchaser may begin arbitration by filing with the commissioner a sworn complaint and a filing fee, as provided by department rule. . . . 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.

(d) On referral of the complaint for investigation, the arbitration board shall make a prompt and full investigation of the matters complained of and report its findings and recommendations to the commissioner not later than the 60th day after the date of the referral, or before a later date determined by the parties.

(e) The report of the arbitration board shall include findings of fact, conclusions of law, and recommendations as to costs, if any . . . .

. . . .

(h) The arbitration board shall consider any field inspection or other data submitted by either party in its report and recommendation.

Tex. Agric. Code § 64.006 (emphasis added).

2. Statutory Construction

We must construe statutes as written and, if possible, ascertain legislative intent from the statute's language. Morrison v. Chan, 699 S.W.2d 205, 208 (Tex. 1985). Even when a statute is not ambiguous on its face, we can consider other factors to determine the Legislature's intent, including: the object sought to be obtained; the circumstances of the statute's enactment; the legislative history; the common law or former statutory provisions, including laws on the same or similar subjects; the consequences of a particular construction; administrative construction of the statute; and the title, preamble, and emergency provision. Tex. Gov't Code § 311.023; Ken Petroleum Corp. v. Questor Drilling Corp., 24 S.W.3d 344, 350 (Tex. 2000).

Additionally, we must always consider the statute as a whole rather than its isolated provisions. Morrison, 699 S.W.2d at 208. We should not give one provision a meaning out of harmony or inconsistent with other provisions, although it might be susceptible to such a construction standing alone. Barr v. Bernhard, 562 S.W.2d 844, 849 (Tex. 1978). We must presume that the Legislature intends an entire statute to be effective and that a just and reasonable result is intended. Tex. Gov't Code § 311.021(2),(3).

When used in a statute, the term "must" creates or recognizes a condition precedent. Tex. Gov't Code § 311.016(3). While Texas courts have not interpreted "must" as often as "shall," both terms are generally recognized as mandatory, creating a duty or obligation. See Tex. Gov't Code § 311.016(2), (3); Wright v. Ector County Indep. Sch. Dist., 867 S.W.2d 863, 868 (Tex. App. El Paso 1993, no writ) ("The ordinary meaning of 'shall' or 'must' is of a mandatory effect."); Inwood N. Homeowners' Ass'n, Inc. v. Meier, 625 S.W.2d 742, 743 (Tex. Civ. App. Houston [1st Dist.] 1981, no writ) (same); Mitchell v. Hancock, 196 S.W. 694, 700 (Tex. Civ. App. Fort Worth 1917, no writ) (same)....

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