Going to Trial
Most cases don’t go to trial, with many resolved through a summary judgment or through the ADR process.
“The law is so in the supplier’s favor,” Quesenbery observes, “it’s pretty rare that you don’t win.”
But when a case does end up going to trial, it is up to a judge and, in some cases a jury, to determine the outcome. “At the end of the day,” De Falco comments, “It will come down to who is more believable or credible. In a he said/she said scenario, it comes down to the kind of documentation you have.” And while each side may have a different recollection of what occurred, De Falco has even seen cases where the court says “I’d like to believe you, but the other side has all this documentation.”
Asked about those in the industry who still like to do business with a handshake, De Falco says he hears almost weekly about how things used to be done, but warns that not having the particulars of a deal in writing could be disastrous if a lawsuit is filed. Relying on a handshake may be honorable, but a follow-up letter or email confirming the understanding will go a long way in a dispute.
Quesenbery agrees it is nice to be able to conduct business on a handshake, “but by the same token, you have to be really careful about who your customers are and if they have the assets and wherewithal to pay you.”
Possible Outcomes
It is important to realize that winning a lawsuit does not mean you will be paid. “Winning is not going to produce the money,” De Falco cautions.
On the other hand, the judgment certainly has meaning and carries weight. “You never know, principals may win the lottery down the road and now you’ve got the magic ticket,” De Falco remarks. “Sometimes the easiest part is getting the judgment; the hard part is getting paid.”
While the PACA trust provides great protection for produce sellers, paying careful attention to who you do business with, maintaining proper documentation, and knowing a customer’s reputation and pay history can help avoid the headache and expense of having to file a lawsuit. Quesenbery sums it up best: “No one likes to spend time in litigation except attorneys.”
