WILLMAR — The sale of the Cedar Hills family farm property along Shakopee Creek in northern Kandiyohi County can go forward for its development as a destination golf course.
Kandiyohi County District Court Judge Stephen Wentzell ruled in favor of the defendants in a civil case seeking to block the sale. The judge found that the defendants have the right to sell the property to a third party.
The court “finds no basis to void the land sale" between defendant Cedar Hills Century Farm Inc. and Tepetonka Club LLC , the judge stated in the ruling filed March 17.
The civil dispute involves a 187-acre property near Sibley State Park owned by three siblings, Dean Thorson, Don Thorson and Sherry Ulman. Don Thorson and Ulman voted at a meeting on Oct. 29, 2021, to sell the property to Tepetonka Golf Club LLC. The club has offered $1.2 million for the rural New London property.
Dean Thorson did not attend the meeting at which the sale was approved. A few days following the vote, he filed a civil lawsuit to block it.
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He charged that the sale violated the bylaws of the Cedar Hills Century Farm, which called for maintaining the land for agricultural use and requiring that it be kept in family ownership. He subsequently amended the civil case to also charge that his siblings violated their fiduciary duties in approving the sale.
Dean Thorson told the West Central Tribune on Tuesday that he is disappointed by the decision and is considering a possible appeal. He said the ruling essentially means that the bylaws of family farm operations have no meaning.
Thorson said he is also upset that the judge awarded the defendants a 100% victory in the case. The court had the option of dividing the property among the three siblings, he said.
Messages left Tuesday with the defendants' attorney were not returned by deadline.
In the ruling, the judge noted that the Cedar Hills Century Farm did not meet state requirements as a family farm since the land was enrolled in the Conservation Reserve Program. Without status as a family farm, the majority shareholders of the corporation had the right to sell the property for non-agricultural use.
Also, the law does not allow for limitations on the conveyance of property to non-family members. Defendant Ulman had testified that she believed the original requirement to keep the land in family ownership was intended so that their mother could reside there as long as she wished. The plaintiff, Dean Thorson, had argued that the requirement was meant to maintain the property in family ownership for the next generation as well.
The court also rejected the plaintiff’s claim that the defendants had violated their fiduciary duties. While the judge noted that there was obvious strife among the siblings, the two defendants had apprised their brother of the land sale offers and properly informed him about the meeting at which they chose to accept the offer by Tepetonka Golf. He chose not to attend.
The court record shows that Tepetonka Golf originally offered $1 million for the property. After that offer was made, Dean Thorson offered to purchase his brother’s share of the property for $333,333. He indicated that another family member was interested in purchasing his sister’s share. He expressed interest in a discount to keep the property in the family.
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Tepetonka Golf increased its offer for the property to $1.2 million. Dean Thorson did not trust that the offers would not continue to increase, and decided he was no longer interested in purchasing his brother’s share, according to the court decision.
Tepetonka Golf is proposing what was originally estimated to be a $20 million investment to develop the site as a private, destination golf course. Tepetonka Golf has also made purchase offers for land from adjoining property owners for the course, according to the court records.
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