Suit Alleges Boersen Stole Equipment

This article was originally posted at 12:35 p.m. CST on Wednesday, Feb. 28. It was last updated with additional information at 2:26 p.m. CST on Wednesday, Feb. 28.

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LINCOLN, Neb. (DTN) -- Dennis Boersen and Boersen Farms in Zeeland, Michigan, allegedly leased farm equipment and sold it to a third party even though the farm did not hold title to the equipment, according to a new federal lawsuit filed by a leasing company against an equipment company that also did business with Boersen Farms.

Florida-based Utica Leasco LLC filed a complaint against Illinois-based JW Equipment LLC in the U.S. District Court for the District of Western Michigan, alleging JW Equipment knew Boersen did not own equipment he sold to JW.

Utica has alleged three counts against JW Equipment, including conversion of property, common law conversion and unjust enrichment. Utica also has levied similar allegations against Boersen Farms in Ottawa County Circuit Court in Michigan.

The federal lawsuit outlines an alleged equipment scheme undertaken by Boersen, pointing to information shared with Utica by federal investigators as a basis for legal action.

Utica conducted one of several inspections at Boersen Farms in June 2023 after Boersen defaulted on an equipment lease with Utica for a second time, the lawsuit said.

After that inspection, Utica said it began to foreclose and repossess several items of equipment from Boersen Farms.

That is when Utica said it "learned that Boersen, by his own admission, stole 112 items of equipment and fraudulently transferred them to numerous entities, including defendant (JW Equipment)."

Throughout the summer of 2023, Utica said it obtained information from federal authorities about Boersen's alleged actions.

That included "documentary evidence from federal investigators revealing that since around August 2019, Boersen had been fraudulently transferring equipment to third parties like defendant, who were on notice of plaintiff's interest in the equipment," the lawsuit alleges.

"Those transactions included equipment that defendant had just sold to plaintiff (Utica) and delivered to Boersen," the complaint said.

"In each of these transactions, Boersen acted fraudulently through either Boersen Farms or Hilltop Equipment LLC (a Boersen business entity) and defendant (JW Equipment) took delivery of and paid Boersen Farms for the equipment with no notice to plaintiff (Utica)."

That same summer, two limited liability corporations owned by the farm and operated by Boersen's wife, Stacy, and son, Nicholas, sued the Great American Insurance Company, the Federal Crop Insurance Corporation and USDA after the entities delayed payment on 2019 crop insurance claims totaling at least $2.3 million, according to documents filed in that lawsuit, which was eventually dismissed by the same district court.

Boersen attorney Ronald J. Vander Veen did not respond to DTN's requests for comment.

DTN reached out to a Boersen Farms email address for comment and received the following response: "At this time, it's scheduled for mediation. All parties ask it not be reported on. Thank you."

JW attorney Andrew C. Vredenburg did not respond to DTN's request for comment.

However, JW Equipment filed a response to the lawsuit in the federal court.

"The defendant (JW Equipment) paid fair consideration for any equipment purchased from Boersen Farms and Affiliates LLC or any of its owners, shareholders, members, employees, representatives, affiliated entities, divisions, successors and assigns," JW said in its response.

"The defendant denies having any knowledge of plaintiff's alleged ownership or interest in any of the equipment or personal property purchased from Boersen. The defendant denies knowing that the property obtained from Boersen was allegedly stolen, embezzled or converted by Boersen. Boersen fraudulently transferred the identified equipment described in plaintiff's complaint to the defendant."

JW has countered with a third-party complaint filed against Boersen Farms. In that complaint, JW alleged Boersen committed a breach of contract by "misrepresenting that there were no liens recorded or existing against the various equipment sold by them to JW Equipment."

JW said that as a result, it may "suffer damages arising from the allegations made against it in the plaintiff's complaint."

In addition, JW also alleges one count of common law indemnity. That is based on the idea that when the "conduct of one person results in the liability of another" the latter is entitled to restitution.

The company also alleges Boersen committed fraud and misrepresented his situation to JW, among other issues.

LEASE AGREEMENT DEFAULT

Utica said in the complaint that it entered into an equipment lease agreement with Boersen Farms and Affiliates LLC beginning in March 2018. It was agreed that Utica would purchase and then lease equipment to Boersen. Boersen would select equipment through a vendor such as JW Equipment.

The vendor would then issue an invoice to Utica with instructions on how to wire payment to make equipment purchases. Utica would then lease the equipment to Boersen.

As part of the lease agreement, Utica said in the lawsuit it conducted a series of five inspections at Boersen Farms to "protect its rights to the equipment."

According to the lawsuit, Boersen Farms first defaulted on the lease agreement on Jan. 6, 2020, by "failing to make several payments pursuant to Schedules 1-26." Each schedule represents separate pieces of leased equipment.

"From that time until June 22, 2020, plaintiff (Utica) attempted to accommodate Boersen Farms through a series of amendments to the lease, permitting Boersen Farms to make forbearance payments," the lawsuit said.

"Following plaintiff's issuance of Schedule 32 on March 16, 2021, plaintiff conducted an onsite inspection at Boersen Farms premises in July 2021, using an independent inspector."

That inspection took place just about a month after the IRS executed a search warrant on June 9, 2021, at Boersen Farms.

Utica said none of the inspections showed Boersen Farms had been transferring equipment to third parties, "even though Boersen and Boersen Farms had been 'selling' plaintiff's equipment to defendant (JW Equipment) as early as August 2019."

TRANSACTION CATCHES ATTENTION

Sometime between July 23-Aug. 12, 2019, JW Equipment sold a John Deere four-wheel-drive tractor (Item 247) directly to Boersen and Boersen Farms for $139,500, according to the lawsuit.

That transaction was not part of Boersen's lease agreement with Utica.

After the Boersen purchase closed, Utica bought the same machine from Michigan Truck and Equipment Sales Inc. in Byron Center, Michigan, for $199,500. Boersen then continued to use it under the lease through Utica that closed Aug. 8, 2019 -- meaning Boersen sold the machine to a third party although he didn't own it. Byron Center is about 16 miles east of Zeeland.

Boersen then sold the machine back to JW Equipment 10 days later on Aug. 18, 2019, for an unknown amount, according to the lawsuit, although Utica actually owned the machine.

The lawsuit alleges JW Equipment allowed the transaction and others to take place despite knowing Boersen did not hold titles to the equipment. As a result, Utica alleges JW Equipment committed one count of conversion, which is taking unjust ownership of property.

"The transaction documents indicate that Boersen had been negotiating the transaction as early as July 23, 2019, and likely before that, mere weeks before the corresponding Schedule 24 (Item 247) closing on Aug. 8, 2019," the lawsuit alleges.

JW Equipment bought 20 items from Utica as part of 12 different transactions between August 2019 and December 2020, according to the lawsuit.

In each equipment transaction after JW Equipment's purchase of Item 247 (John Deere tractor) from Boersen Farms, the lawsuit said, JW was aware Boersen did not own the equipment and made subsequent purchases from him anyway.

"Defendant thereby committed willful and wrongful acts of domain and control over the equipment, inconsistent with any rights it had in the equipment, given that it did not acquire legal title to any of it after receiving it from Boersen and Boersen Farms," the lawsuit said.

"Defendant presumably sold each item of equipment and earned a profit, well before plaintiff ever learned that Boersen and Boersen Farms 'sold' it to defendant, and despite defendant knowing that it was plaintiff's property, presumably distributing the equipment into interstate commerce such that plaintiff was without any means of knowing its location, let alone who was and remains in possession of it."

Utica has asked the court to order the recovery of any financial losses from JW Equipment.

PREVIOUS LAWSUITS

Boersen Farms has for years been sued by companies that provided products and services to the farm that once operated about 83,000 acres. Those lawsuits were filed to force Boersen Farms to pay money owed to the companies.

CHS Capital Inc. sued Boersen Farms in 2017 for defaulting on a $145.3 million loan.

The CHS lawsuit leveled several allegations against Boersen Farms, including that it "fraudulently and intentionally misrepresented to CHS Capital the quantity of harvested 20l6 grain available for sale, which quantity and resulting expected sale proceeds were included in the budget."

In October 2017, LT Capital LLC agreed to take on the CHS debt and asked for a dismissal of the CHS court action against the farm.

In November 2017, the U.S. District Court for the District of Utah issued a $16.2 million judgment in favor of equipment company TFG-Michigan. TFG filed a lawsuit claiming it had not been paid for more than 120 center pivots leased by Boersen Farms.

In the U.S. District Court for the District of Kansas, Boersen Farms was sued for breach of contract related to its pursuit of finding someone to acquire the CHS debt.

Read more on DTN:

"Court Dismisses Boersen Farms Lawsuit," https://www.dtnpf.com/…

"Michigan Farm Raided by IRS Sues Feds," https://www.dtnpf.com/…

Todd Neeley can be reached at todd.neeley@dtn.com

Follow him on X, formerly known as Twitter, @DTNeeley

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