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EASTERN MILK PRODUCERS' COOPERATIVE ASSOCIATION v. COMMONWEALTH PENNSYLVANIA (07/25/84)

decided: July 25, 1984.

EASTERN MILK PRODUCERS' COOPERATIVE ASSOCIATION, INC.,
v.
COMMONWEALTH OF PENNSYLVANIA, MILK MARKETING BOARD, RESPONDENT



Appeal from the Order of the Milk Marketing Board in the case of In Re: Pennsylvania Milk Marketing Board v. Sun Re Cheese Corporation, Docket No. S.F. 4.

COUNSEL

Henry B. Fitzpatrick, Jr., with him, Marcy B. Tanker, Liebert, Short, Fitzpatrick & Lavin, and Frederick J. Micale, Williams, Micale & Wells, for petitioner.

Mollie A. McCurdy, Deputy Attorney General, with her, Allen C. Warshaw, Deputy Attorney General, Chief, Litigation Section, and LeRoy S. Zimmerman, Attorney General, for respondent.

President Judge Crumlish, Jr. and Judges Rogers, Williams, Jr., Craig, MacPhail, Barry and Colins. Opinion by President Judge Crumlish, Jr.

Author: Crumlish

[ 84 Pa. Commw. Page 194]

Eastern Milk Producers' Cooperative Association, Inc. (Eastern) appeals a Milk Marketing Board (Board) order which certified the payment to Eastern of a claim from the Milk Producers and Cooperative Security Fund.*fn1 We affirm in part and reverse in part.

In 1982, Sun Re Cheese Corporation (Sun Re) defaulted in payments to milk producers. On November 24, 1982, the Board notified all milk producers of the default. Three producers, including Eastern, who was the major supplier of milk to Sun Re, filed verified claims with the Board by December 16, 1982.*fn2 Subsequent

[ 84 Pa. Commw. Page 195]

    to Sun Re's default, two other milk dealers, Shadowbrook Farms, Inc. (Shadowbrook)*fn3 and Damon Dairy Processing (Damon),*fn4 defaulted on payments to producers for delivered milk.*fn5

Upon Damon's default, the claims against the security fund far exceeded the amount available, which was $734,157.04 at the end of December, 1982. The Act does not establish an order of priority among creditors who file claims under the Act. On January 5, 1983, the Board asked the Attorney General to delineate in a formal opinion the priority of payment schematic from the security fund. On February 24, 1983, he recommended a pro rata distribution of the fund.*fn6 On March 30, 1983, the Board certified the claims against Sun Re, Shadowbrook and Damon even

[ 84 Pa. Commw. Page 196]

    though Sun Re was the first dealer in default. The Board divided the total available funds ($734,157.04) by the total combined certified claims ($1,603,005.10) and determined that each claimant should receive 45.7988% of its certified claim instead of the 75% of the certified claim provided in the Act.*fn7 Eastern received $264,033.69 out of its proposed certified amount, $576,507.88.

The Act provides the procedures in processing claims against the security fund.*fn8 Eastern contends first that the Board abused its discretion by extending the time period for certification of claims caused by Sun Re (and Shadowbrook) until the claims caused by Damon's default were certified. Eastern argues that the Board was mandated under Section 8(c) of the Act*fn9 to certify its claim within forty-five days from the filing of its verified claims. The certification was required to be filed by January ...


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