Nebraska Supreme Court reverses claim denials for some farmers in grain elevator failure case

IndustriesAssociated Press

The Nebraska Supreme Court on Friday reversed a state Public Service Commission's ruling in the case of two farm operations whose claims for compensation were denied when a Pierce grain elevator closed.

The commission wrongly denied the claims of Curt Raabe and James and Diane Herian, all farmers in Pierce County, the high court said.

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The decision came in the aftermath of the failure of Pierce Elevator Inc., which the commission closed in March 2014 after a bank stopped financing the operation. State law gives the commission oversight of the grain elevators.

More than 200 farmers filed claims worth $9.7 million against the company. The commission approved claims of $4.6 million for those who had grain stored at the elevator, which get first priority in the event of a failure. The commission also agreed to $3.3 million for dealer claims, but those were covered by a $300,000 bond, which provided a scant 9 cents on the dollar. The commission denied another $2 million in claims.

The high court ordered Raabe be paid his $88,500 claim to cover a check issued to him four days before the elevator closed. The commission had previously denied Raabe's claim, saying the state's Grain Warehouse Act denies relief to claimants who sold stored grain in the days prior to the elevator's closing. The high court said the commission misinterpreted the law, which specifically allows recovery for holders of checks issued within five business days of the closure.

Raabe could not be reached for comment Friday. His attorney, Richard Garden of Lincoln, declined to comment, saying he and other attorneys in the firm that also represented the Herians and several other claimants still were studying the ruling.

The court also ordered the Herians be compensated for nearly 28,000 bushels of corn in possession of the failed elevator. The commission had denied their claim, saying they failed to prove the elevator stored the grain because they did not produce an official transfer document. The Herians argued they had other ways to prove the elevator had their grain, which the commission should have considered, and the Supreme Court agreed.

"We were very excited when we heard the news this morning," Diane Herian said from her home Friday. "We're guessing it'll be around $120,000."

The state's Supreme Court on Friday also upheld the commission's findings denying the claims of several other farmers in the case.