The End of a Row

The End of a Row

By Francis X. Gilpin

Associate Editor

The Falkners should be "a quintessential American success story," a judicial official has lamented.

Instead, for the past two years, the family has battled in and out of court over a multimillion dollar agribusiness in Hillsborough and Manatee counties. (See "Feuding Falkners," May 7-13, 2004 and "Caught in a Pickle," June 6-12, 2003, in the Gulf Coast Business Review.)

Earlier this month, three brothers, a sister and a brother-in-law agreed to drop all claims of drug abuse, kickbacks, misappropriation of profits and perjury against each other, and close a nasty chapter in the family's history.

The confidential settlement, approved April 11 by U.S. District Judge Elizabeth A. Kovachevich in Tampa, comes eight months after a special master, Harley E. Riedel, concluded that brother August John Falkner III was apt to prove at trial that there was no legal partnership between himself and his siblings.

The stakes were considerable for the family, which hails from Michigan. From 1985, when they began farming in the Tampa Bay area, until 2002, when they started squabbling, the Falkners sold more than $220 million in cucumbers and other crops.

Annual earnings sometimes exceeded $10 million, according to sister Linda Falkner Wright, whose family was a major supplier of cucumbers and peppers for pickling by Vlasic Foods International Inc. The produce was harvested on farmland that made the family Manatee's single biggest property owner.

Besides the personal toll, the litigation has taken a chunk out of John Falkner III's bank account, according to a sworn statement he filed with the court three months ago.

Between April 2003 and January of this year, John Falkner III claims to have spent nearly $4.5 million on the lawsuit. That included $2.6 million paid to his Tampa lawyers at Hill, Ward & Henderson PA and Gibbons, Cohn, Neuman, Bello, Segall & Allen PA.

Attorneys in the case either didn't return GCBR calls before deadline or declined comment on the secret settlement.

For his money, John Falkner III clearly had gained an edge in the case.

Master Reidel acknowledged that John Falkner III's siblings probably expected some stake in the family farming enterprise. "They worked incredibly hard, they sacrificed, and they achieved enormous success by any standard," Reidel wrote last August.

Brother Thomas Falkner, for instance, acquired more than $1 million in assets and received average yearly compensation of more than $170,000 for the past decade or more.

Yet such facts weren't enough to sway Reidel. "Even if some form of partnership existed, the weight of the evidence would show John III owned most of the partnership assets and profits," Reidel wrote.

Reidel was clearly disturbed by some of the testimony from brothers Tom and Christopher Falkner and sister Linda:

• "Tom admitted to knowingly giving false testimony on numerous prior occasions.

• "Chris admitted to knowingly giving false testimony and making false statements on numerous prior occasions ... Furthermore, Chris admitted stealing from the Florida farming operation to pay his bills because he had already spent his paycheck on crack cocaine."

• "Finally, Linda admitted lying" in a lawsuit the family brought against a chemical company over a hazardous pesticide.

Noting that the siblings' past testimony undermined their claims in this lawsuit against their brother, Reidel wrote: "Plaintiffs now try to recant their previous testimony by claiming it was perjured.

"There is an enormous financial incentive for the Plaintiffs to lie in this proceeding, as evidenced by Tom's admission that the stakes in this case are far greater than the other cases in which he admitted perjury."

Nevertheless, Reidel noted with sadness that the siblings "were involved as spectators in their early years of a virtually identical dispute between their father, on the one hand, and their grandfather and uncle, on the other."

Father August John Falkner Jr. advised his children to put the nature of their business relationship in writing. Reidel found they had ignored their father's counsel.