United States District Court, M.D. Tennessee, Nashville Division
RONALD G. DRIVER, Plaintiff,
PRO AG MANAGEMENT, INC., d/b/a PRODUCERS AG INS - LEXINGTON and ARMTECH INSURANCE SERVICES, INC. Defendant.
WAVERLY D. CRENSHAW, JR. CHIEF UNITED STATES DISTRICT JUDGE
before the Court is a Motion to Stay Pending Arbitration
(Doc. No. 39) filed by Pro Ag Management, Inc. (“Pro
Ag”), and a Motion to Compel Arbitration (Doc. No. 42)
filed by Ronald G. Driver. Those Motions have been fully
briefed by the parties (Doc. Nos. 40, 43, 44,
45-1, 45), and both Motions will be granted.
purposes of the pending motions only, the following facts
appear undisputed: Driver is a farmer who lives in Macon
County, Tennessee. He grows soybeans and Burley tobacco. Pro
Ag and ARMtech Insurance Services, Inc.
(“ARMtech”) are approved insurance providers
(“AIPs”) authorized to issue Multiple Peril Crop
Insurance (“MPCI) coverage under the Federal Crop
Insurance Act (“FCIA”), 7 U.S.C. § 1501,
2011, Driver's crops were insured under a policy issued
by Pro Ag, and he received indemnity for lost soybeans in the
amount of $6, 139. For the next few years, Driver's crops
were insured under policies issued by other AIPs.
point in 2014, Pro Ag determined that Driver had been
overpaid $2, 129 for the 2011 soybean indemnity. Driver did
not dispute this alleged overpayment, and agreed to repay ten
percent immediately, with the remainder due within a year. He
signed a “Pro Ag Payment Agreement - Indemnity
Overpayment, ” memorializing the agreement on August 8,
2014, and thought he had a year from then to repay the
balance. However, under the written terms of the Payment
Agreement, the payment had to be postmarked on or before
August 1, 2015.
2015, Driver planted 228.3 acres of Burley tobacco. That
tobacco was planted in two counties in Tennessee, and three
counties in Kentucky. All of the crops were insured through
five separate policies issued by ARMtech.
bad weather severely damaged the crop, an ARMtech adjuster
authorized Driver to destroy 100 acres of tobacco. Based on
Driver's calculation, that destruction resulted in a
payable indemnity under the ARMtech policies in the combined
amount of $448, 712.
August 5, 2015, Driver was informed by David Leath, an
insurance agent, that the entire balance on the 2011
overpayment was due August 1, 2015, and that Driver risked
losing crop insurance coverage because he did not pay by that
date. The next morning, Driver and Leath contacted Jeanie
Bonewitz, Pro Ag's National Crop Accounting Manager, in
an effort to resolve the matter, but were told that there was
nothing Driver could do.
and not wanting to lose his crop insurance, Driver sent Pro
Ag a cashier's check via FedEx delivery in the amount of
$1, 916, which represented the balance of the 2011
overpayment. Driver called Bonewitz to tell her that the
check had been sent, but was again told that nothing could be
done. Driver then contacted Jeffrey Van Landingham, Pro
Ag's Executive VP, who also advised Driver nothing could
be done, other than to appeal the determination to the
National Appeals Division of the United States Department of
Agriculture (“USDA”). Driver also contacted Sam
Bruce, National Litigation Manager for ARMTech, and Scarlet
Boyd of the Risk Management Agency (“RMA”), which
is an agency of the USDA that manages the Federal Crop
Insurance Corporation (“FCIC”).
Pro Ag received and deposited Driver's $1, 916 payment,
and reinstated his insurance effective August 6, 2015, the
date the cashier's check was given to FedEx.
Nevertheless, on August 12, 2105, Bonewitz notified the RMA
that Driver was ineligible for insurance coverage for crop
year 2015. In turn, the RMA notified ARMtech on August 18,
2015, that Driver was ineligible for federally-reinsured crop
insurance coverage for the 2015 crop year.
though the $448, 712 claim was pending, ARMtech suspended the
claims process. It thereafter refused to pay the claim.
on these events, Driver filed his Complaint alleging
negligence by both ARMtech and Pro Ag. The essence of his
claim is that neither Defendant advised him of the existence
of the February 24, 2015, Informational Memorandum PM-15-010
under the Agricultural Act of 2014, which provided that,
subject to certain conditions, AIPs could reinstate a policy
if the insured demonstrated that the ineligibility was due to
the failure to pay a delinquent debt owed to the AIP or FCIC.
Nor did either Defendant provide Driver with a “Request
for AIP Authorized Reinstatement, ” as required by the
Informational Memorandum. Driver also claims that Pro Ag
negligently failed to transmit his request for reinstatement
to the RMA which led the agency to determine on August 19,
2015 that he was ineligible for insurance for the 2015 crop
addition to filing suit in this Court, Driver filed a Demand
for Arbitration pursuant to the RDA's Bulletin No.
MGR-12-003.1. In those proceedings Driver disputed the
determinations by Pro Ag and ARMtech that (1) he was
ineligible for crop insurance in 2015; (2) he was not
eligible for reinstatement under the Informational
Memorandum; (3) his 2015 ...