ISBA Assembly member Robert C. “TJ” Thurston of Huntley has notched another court victory in a series of cases involving the financial failure of an Illinois grain elevator operation (ISBA Bar News, August 2007).

The 15th Circuit decision in State Bank v. Paul Cheeseman, et al., No. 2006-L-8, went in favor of eight farmer defendants who had been sued by the bank for debts owed to Grainary Inc. of Lanark. Two principals of the grain elevator operation were indicted recently for bank fraud.

Judge Victor V. Sprengelmeyer ruled that the State Bank failed to allege, and likely could never prove, that contracts with the farmers for grain sales had not been fulfilled before the grain elevator was shut down in August 2001.

Calling it “manifestly unjust for this litigation to continue,” the judge noted that the defendants had suffered “attendant negative consequences for their individual time and financial expenses, their adverse credit problems and the personal and emotional strains of litigation.”

He also pointed out that the bank “has had every indulgence to plead and prosecute a legitimate claim, but has failed to do so.” The court’s findings and order may be accessed at http://www.thurstonlawpc.wordpress.com/.

In a previous case in U.S. District Court in Chicago, a federal judge ruled in June 2007 that no binding oral contract existed for trading grain futures. A farmer had been sued by another bank that was assigned accounts receivable in a loan default.

Thurston was on the defense team in that case, along with ISBA Agricultural Law Section Council members Greg Bowman of Princeton and John W. Damisch of Chicago.

Other pending cases include one against the estate of a farmer who died before the elevators closed, and another against a non-farmer from Springfield who never delivered any grain.

A consolidated federal court lawsuit, Wells Fargo Bank v. Steve Rich, et al., No 06-C-3925, involving nine other farmers, is pending in the Northern District.