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Dump Certificates

Conclusion and effect
Reparation Report

The following summaries of reparation decisions issued under the Perishable Agricultural Commodities Act (PACA) are intended to help companies understand their rights and responsibilities under PACA. The key facts and core reasoning used to decide cases are presented.

TOPIC: DUMP CERTIFICATES

E.W. Merritt Packing Company
(Tipton, CA)
v.
Kleiman & Hochberg, Inc.
(Bronx, NY)

47 A.D. 584, decided March 3, 1988

E.W. Merritt Packing Company (E.W. Merritt) shipped three truckloads of mixed melons to Kleiman & Hoch-berg, Inc. (Kleiman & Hochberg) for a total contract price of $12,485.00. There were no disputes concerning the first two loads. Upon arrival of the third load, however, Kleiman & Hoch-berg inspected the product and complained to E.W. Merritt about high levels of condition defects. Kleiman & Hochberg remitted payment to E.W. Merritt of only $4,553.19 claiming losses of $7,931.81 in connection with the third shipment.

For its part, E.W. Merritt argued that no breach of the sales agreement had been shown and sought to recover the full balance of its invoices. Although Kleiman & Hochberg attempted to argue that the load was rejected and handled for E.W. Merritt’s account, PACA found that Kleiman & Hochberg had failed to show it rejected the product or any agreement to handle the melons on consignment.

With respect to the breach of the sales contract alleged by Kleiman & Hochberg, PACA explained that after accepting a shipment of produce, the buyer becomes liable for the full price of the product, less any damages it can show resulting from the seller’s breach.

Here, no inspection was taken on a lot of honeydew melons included with this third shipment; therefore, PACA summarily held that full payment for this product was owed. With respect to the crenshaw and casaba melons, however, a USDA inspection was performed, showing an average of 11 percent of the crenshaws were soft and turning yellow in color while 12 percent of the casabas were soft and yellow in color, suggesting the product may have failed to comply with the warranty of suitable shipping condition.

In support of its damages, however, Kleiman & Hochberg’s account of sale reported approximately 75 percent of the crenshaws and 90 percent of the casabas were dumped; yet no dump certificates were provided.

The results of the inspections, in PACA’s view, did not support the “enormous amount of dumping” reported and held that Kleiman & Hochberg had failed to show the allegedly dumped product had no commercial value. Having failed to prove its damages, Kleiman & Hochberg was found liable for the full amount sought, or $7,931.81 plus interest.

These summaries are not issued by the USDA, nor the PACA Branch, and should not be mistaken for an official government statement or release.

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Compiled by Cliff Sieloff, Blue Book Services