Court allows lawsuit to move forward over sale of Kandiyohi County land for proposed golf course
District Judge Stephen Wentzell agreed with the defendants in a property dispute that the property does not qualify as a family farm corporation, and consequently its bylaws were not violated when two of the three shareholder siblings approved its possible sale. However, the judge allowed the lawsuit by the third sibling to be amended to consider allegations of breach of fiduciary duty by the two defendants.
WILLMAR — A civil dispute over the fate of the land being eyed for a destination golf course in Kandiyohi County will move forward in the courts following a recent order issued in the case.
District Judge Stephen Wentzell issued an order May 6 that will allow Dean Thorson to amend his civil complaint against siblings Dan Thorson and Sherry Ulman. It allows the lawsuit to include counts accusing the two siblings of breach of fiduciary. The order also includes the two as individual defendants.
The three siblings own Cedar Hills Century Farm in northern Kandiyohi County. Dan Thorson and Sherry Ulman approved a purchase agreement in November 2021 that allows Tepetonka LLC to acquire the 187-acre property from Cedar Hills Century Farm for the proposed golf course.
Dean Thorson did not participate in the vote to approve the agreement, and brought the civil lawsuit. He charged that the sale as approved by his two siblings violated the bylaws of Cedar Hills Century Farm as a family farm.
Dan Thorson and Sherry Ulman asked the court for a summary judgment to dismiss the lawsuit by their brother. In court documents, they charged that Cedar Hills Century Farm does not meet the legal requirements of a farming corporation since the land has not been actively farmed since 1987, and none of the owners reside on it.
Judge Wentzell agreed that Cedar Hills does not qualify as a family farm, and issued a summary judgment to dismiss the count that the bylaws were violated.
This by itself would have ended the civil lawsuit, except that the judge also allowed Dean Thorson to amend the civil complaint to include the accusations of breach of fiduciary duty.
The civil suit now alleges that the siblings “committed corporate waste by agreeing to sell the Kandiyohi County agricultural property at a significant discount and without having the property appraised.”
The purchase agreement provides for its sale for $1.2 million, or $6,398.63 per acre. The lawsuit alleges that Tepetonka Golf Club offered to purchase an adjoining 20 acres from a different owner for $10,000 per acre.
The counts of breach of fiduciary duty also include allegations that the siblings did not meet their duty of loyalty as shareholders by failing to act with candor in their negotiations and by not including Dean Thorson in them. He also alleged that the siblings acted with unfair prejudice against him.
In the order, the judge stated that the claims by Dean Thorson “do not appear meritless, and there is insufficient evidence of prejudice to deny plaintiff’s motion.”
A pretrial hearing is scheduled for the case May 23 and a court trial June 28.