Texas Seed Arbitration Case Law
In furtherance of the non-binding seed arbitration process, the statute requires only that the arbitration board produce a report containing "findings of fact, conclusions of law, and recommendations as to costs." TEX. AGRIC. CODE ANN. 64.006 (Vernon 1995).
Neither party is required to introduce the report of arbitration into evidence. Id. 64.004. the court has discretion to "give such weight to the arbitration board's report as it determines advisable." Id.
Even if the language in the first sentence of Section 64.004 ("has been the subject of arbitration") is read to require actual arbitration of the claim (as opposed to submission of the claim to arbitration), the second sentence explains what the court may do, regardless of whether the claim was submitted to arbitration. See id. the court is empowered to consider the parties' failure to cooperate, "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. In Asgrow Seed Co. v. J. R. Gulick, 420 S.W.2d 438 (Tex. Civ. App.-San Antonio 1967) , the court reversed a trial court's judgment in favor of a purchaser of seed; the sales contract, seed bags, and invoices all contained a non-warranty clause that provided, in part, "Asgrow gives no other or further warranty, express or implied." Id. at 440 n.1, 444; see also John Deere Co. v. Tenberg, 445 S.W.2d 40, 42-43 (Tex. Civ. App.-Beaumont 1969, no writ) (stating that the appellee "cannot rely upon breach of implied warranties because implied warranties were excluded in the written instrument" that the appellee signed and accepted).
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)
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).