Mar 15, 2010

Michigan Supreme Court Rules Against Appletree Marketing

A unanimous Michigan Supreme Court ruled Wednesday that apple producers and distributors that do not pay into the state’s marketing fund can be liable for more than just the fees and fines under the Agricultural Commodities Marketing Act, according to Michigan Farm Bureau (MFB).

Steven Kropf, owner of Appletree Marketing, used the Michigan Apple Committee assessments he collected in 2004 and 2005 to pay business debts rather than remitting them to the committee as required. The committee and the Michigan Department of Agriculture sued not only for the fees, but also for damages for conversion of the funds, according to MFB.

Both a trial court and the Court of Appeals found that the marketing act, since it provided the requirement to collect the fees, provided the sole remedies for not remitting them to the state. But Justice Robert Young Jr., joined by the rest of the court, said both common law and statutory conversion existed before the marketing act and were not abrogated by it, so the state can bring the claims where it can show the distributor not only withheld the funds but adopted them for its own use, according to MFB.