Court Dismisses Boersen Farms Lawsuit

LINCOLN, Neb. (DTN) -- A federal court has dismissed a lawsuit filed by Boersen Farms against the Great American Insurance Company, the Federal Crop Insurance Corporation and USDA. The suit had alleged breach of contract, among other things, in connection with about $2.3 million in unpaid claims filed by the Boersen family for the 2019 growing season.

Boersen Farms based in Zeeland, Michigan, is under investigation for alleged crop insurance fraud.

Last summer, Stacy and Nicholas Boersen filed the lawsuit in the U.S. District Court for the District of Western Michigan on behalf of Boersen LLCs called New Heights Farm I and New Heights Farm II.

The defendants in the case filed motions to dismiss the case based on lack of jurisdiction, failure to state a claim and that the lawsuit was not ripe, or timely.

In its ruling, the district court said the federal agencies have a particularly strong case when it comes to delaying crop insurance payments because of an ongoing fraud investigation.

The agencies have sovereign immunity, which means they cannot be sued without their consent.

"The alleged delay is not sufficiently egregious in the face of a federal fraud investigation of 'the largest farming operation insured by GAI in Michigan' to overcome what 'should remain rare,'" Chief U.S. District Judge Hala Y. Jarbou said in his ruling.

"To summarize, the court concludes that the government defendants have not waived their sovereign immunity with respect to plaintiffs' claims. While the FCIC does contemplate a waiver for denials of federal crop insurance claims, plaintiffs concede that their claims have not been expressly denied and they fail to persuade the court that their claims have been constructively denied. Thus, the court will order these contractual claims against the government defendants to be dismissed."

Boersen family attorney Ron VanderVeen did not respond to DTN's request for comment.

On June 9, 2021, the IRS executed a search warrant at Boersen Farms in connection with an investigation of the troubled farm. Boersen Farms is owned by Dennis Boersen.

According to the Boersens' complaint, Stacy Boersen leased about 9,000 acres for the 2019 crop year.

The lawsuit alleges a claims adjuster for the insurance company "failed to properly measure the corn in the storage bins and submitted falsified storage bin summary records" to the company's office.

"Despite spending more than three years purportedly investigating the background of the claim, GAIC (insurance company), FCIC, USDA and RMA (Risk Management Agency) have failed to find facts upon which they would have a valid basis to deny NHF-I's claim," the complaint said.

The second Boersen farm entity, operated by Nicholas Boersen, leased about 8,600 acres for the 2019 crop year, the lawsuit said. The complaint levels the same allegations against the insurance company as it relates to the second farming entity.

In leveling breach-of-contract allegations in the lawsuit, the Boersens claim several damages. These include "loss of goodwill" with their creditors and landlords, "loss of ability to lease acreage for farming," "inability to secure favorable financing" and "damage to standing and reputation in the community."

In another count, the lawsuit accuses the defendants of "intentional infliction of emotional distress" to Stacy and Nicholas Boersen.

Read more on DTN:

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

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

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