Proof of Damages
Conclusion and effect
The following summaries of precedent-setting 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: PROOF OF DAMAGES
Stake Tomatoes of Ruskin, Inc.
World Wide Consultants, Inc.
PACA Docket No. R-92-72
52 Agri. Dec. 770, decided April 26, 1993
Order: $10,712.40 award issued
Stake Tomatoes of Ruskin, Inc. (Stake Tomatoes) sought to recover $28,263.50 for a shipment of Florida tomatoes sold to World Wide Consultants, Inc. (World Wide). Both parties agreed the tomatoes were to be “light pink on arrival.”
The product was originally supposed to ship on May 18 but was later changed to May 21 by World Wide. What’s more, World Wide had the load delivered to a customer in Cleveland, OH, instead of Dallas, TX per the sales agreement.
The parties disagreed as to the original contract destination, but PACA found the evidence showed that Dallas, TX was the contracted destination. World Wide’s act of diverting the produce to another destination amounts to an acceptance.
Under the warranty of suitable shipping condition sellers only promise that the produce will make good arrival at the agreed-upon contract destination; therefore, diverting produce to a new destination complicates any allegation the buyer may make that the product failed to make good arrival.
In this case, however, because the produce was diverted and inspected at a destination that was roughly the same distance from the shipping point as the original destination, suitable shipping condition may be determined for the original destination by the condition of the produce at the new destination—so the warranty of suitable shipping condition was not entirely void merely because of the diversion.
The travel time from Ruskin, FL to Cleveland, OH is no greater than the travel time from Ruskin to Dallas; thus, the elevated level of condition defects documented in Cleveland by a USDA inspection was sufficient to establish a breach of the warranty of suitable shipping condition despite the diversion.
Having accepted the produce, World Wide owed Stake Tomatoes the agreed-upon selling price less any damages resulting from Stake’s breach of the warranty of suitable shipping condition. The selling price was $28,263.50 and PACA found that World Wide had supported damages of $17,551.10. Consequently, World Wide was ordered to pay Stake Tomatoes $10,712.40.
These summaries are not issued by the USDA, nor the PACA Branch, and should not be mistaken for an official government statement or release.