Indigo Ag asks judge to deny arbitration for Fearless Grain Marketing

MEMPHIS, Tenn. — Indigo Ag Inc., on April 6, 2021, asked a federal judge deny a request by Jeremey Frost and his Fearless Grain Marketing LLC of Onida, S.D., to dismiss their Jan. 25, 2021, breach of contract case against him .

Further, Indigo asks the court to deny his request to arbitrate the case in front of a panel of the National Grain and Feed Association.

The court hasn’t ruled on either request.

Indigo Ag of Memphis and Boston, a company that does business in crop technology, carbon credits and grain marketing, filed suit against Fearless and Frost, saying Frost overstepped his advisory bounds as an “independent contractor” in dealing with farmers he was supposed to be gathering to sell grain to Indigo.

Farmers are indirectly involved in the dispute, but it is not clear how many or how many dollars are involved. Some said the consequences were hundreds of thousands of dollars or more.

Separately, the South Dakota Public Utilities Commission on April 4 voted to ask a court to impose an injunction against Frost and Fearless , to prevent their trading grain, and to consider whether they should be fined for trading grain without a license.

Also separately, the South Dakota Insurance Department sanctioned Frost in December 2020 for his role in arranging trading of shares in a company without a license. Frost told Agweek those shares were for Oahe Grain Corp., of Onida, S.D.

Frost had requested that Indigo’s lawsuit against him be dismissed and the judge rule for arbitration by the National Grain and Feed Association. But Indigo attorneys, in a 25-page memorandum, filed on April 6, 2020, asked the judge to order oral arguments on the issue or deny the request.

Brown accused Frost of “cherry picking” a “selective quotation of one sentence” in the Indigo Marketplace Master Grain Marketing Advisor agreement to justify the arbitration request.

Marketplace grain sale transactions “are subject to specialized NGFA grain trade rules and arbitration.”

Indigo said it is suing over the “Master GMA Agreement” between Fearless/Frost and Indigo, and that the contract requires that it must be decided in Tennessee state or federal courts.

Frost formerly served as a “GMA” contractor and entered a series of contracts “to participate in Indigo’s managed pricing and incentive programs.” Indigo said the agreements meant Fearless and Frost would advise growers about their use of the Indigo Marketplace. They said “not one” of the agreements makes the agreement itself subject to arbitration.

Frost entered a Memorandum of Understanding on Dec. 30, 2020, which “for a short time prolonged” his “relationship with Indigo as a GMA.” Contracts between Indigo and grain producers “set the sale price (or mechanism for deriving the price) and quantity, terms for transport and delivery, quality requirements, and other terms and conditions” are subject to NGFA arbitration, Indigo said.

Indigo emphasized their complaint is not against any “grain seller” or farmer.

Instead, they allege their dispute is with Fearless and Frost, who in “2019 and through the end of 2020” had “breached” their contracts on “numerous occasions.” They said the “malfeasance” included “failing to provide accurate and complete information” to grower-clients, and misrepresenting Indigo’s pricing programs as “options" or “futures” in "violation of multiple terms and covenants.”

Their suit came after Jan. 19, 2021, when they said Frost “broadly disseminated” a letter they had sent to Indigo, “detailing a string of false and baseless statements about Indigo,” including details about a settlement agreement between Indigo and Frost, and other “confidential” information about customers and transactions. He also allowed his letter to be published on an Ag Talk Forum website. Frost sent a second, similar letter on Jan. 20, 2021.

Indigo said Frost’s letter was “intentionally designed to injure Indigo.” in that it made threats to “spread false information.” They said falsities pertained to Indigo’s finances, investor relations and “supposed regulatory sanctions, expressly encouraging individuals not to do business with Indigo and to default on existing contracts.” The falsities breached “nondisparagement obligations” in the contract.

Indigo said that in late 2020, Frost “sought to shift blame” onto Indigo for the “reckless positions” that Frost had “counseled their clients to take.” They said Fearless and Frost “fraudulently extracted money from Indigo when the company took measures” to address Fearless’ “wrongful conduct” with no intention of following through on their obligations for payment.

Indigo said the NGFA rules are not designed for this dispute, but are limited to disputes over transaction terms for grade and quality inspections, quality issues resulting from truck or rail transport of grain, and units of weight used in a grain transaction, as well as passage of title and allocation of risk from the seller to the buyer, and the timing for shipment or delivery.” NGFA rules don’t cover obligations Frost owes to Indigo, or matters of “disparagement, defamation, interference, or breach of confidentiality.”