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Parker v. Farm Bureau Property & Casualty Insurance Co.

United States District Court, D. Kansas

March 9, 2017



          J. Thomas Marten Chief United States District Judge

         Plaintiffs claim that Farm Bureau breached the parties' insurance contract by failing to defend or provide coverage on a civil lawsuit against plaintiffs. The lawsuit accused plaintiffs of selling wheat seed in violation of the Plant Variety Protection Act (PVPA), 7 U.S.C. § 2321 et seq., which gives patent-like protection to owners of certain plant varieties. Plaintiffs argue they were entitled to a defense and to coverage under a Business Injury Liability module in their Farm Bureau policy. Farm Bureau refused to provide a defense and denied coverage. The matter is now before the court on the parties' cross-motions for summary judgment.

         I. Uncontroverted Facts.

         The court finds the following facts to be uncontroverted for purposes of summary judgment.

         Brett and Dane Parker are brothers. They operate a farming business known as D&B Parker Farms, L.L.C. They are the sole members of the LLC. In about 2012, D&B Parker Farms performed some harvesting work for Steve Hirt in Waterville. In exchange for this service, Hirt gave Brett Parker over 1, 000 bushels of seed wheat. Hirt told him it contained a combination of varieties, including the Fuller variety.

         After the 2013 planting season, D&B Parker Farms had some of the Hirt seed left over. Brett Parker decided to sell it. Rather than sell it to the local grain elevator, where he would only get $7 or $7.50 a bushel, Brett decided to sell it directly to other farmers, and he took out an ad in the farm magazine Grass & Grain. The ad stated: “SEED WHEAT for sale. 3 Way blend. Art, Fuller & 2137, cleaned.” When Brett received a call in response to the ad, he informed the caller that he had already sold around 1, 000 bushels of the seed wheat and that it was “certified and - probably be one year out.” On October 23, 2013, Brett met with the caller and sold him 148 bushels of the seed wheat at $10 a bushel. He gave the buyer a hand-written receipt specifying that the seed contained “Art, Fuller, [and] 2137” varieties.

         PVPA and the KWA Lawsuit.

         Under the PVPA, a certificate holder generally has the right for 20 years to exclude others from selling a protected variety, or from offering it for sale, or from reproducing it. 7 U.S.C. § 2483. It is an infringement of a certificate holder's rights for a person, without authority, “to sell or market the protected variety, or offer it or expose it for sale, deliver it, ship it, consign it, exchange it, or solicit an offer to buy it, or any other transfer of title or possession of it.” 7 U.S.C. § 2451(a). With certain exceptions, it is not an infringement for a person to save seed produced by the person from seed obtained, or descended from seed obtained, with authority of the certificate holder, and to use it in the production of a crop on the farm of the person. § 2543. Nor is it an infringement to engage in a bona fide sale for other than reproductive purposes, made in channels usual for such purposes, of seed produced on a farm from seed obtained, or descended from seed obtained, by authority of the certificate holder. Id.

         The Kansas State University Research Foundation (KSURF) obtained a PVPA certificate for Fuller wheat seed in 2008. The certificate is now held by the Kansas Wheat Alliance (KWA). Neither Brett, Dane, nor D&B has ever had a license to sell Fuller seed.

         Two weeks after Brett sold the seed, an attorney sent him a letter on behalf of the KWA, informing him that the purchaser of the seed was actually a KWA investigator, and demanding $15, 000 in compensation. The Parkers retained an attorney, who exchanged numerous letters with the KWA attorney. In March 2014, they reached an apparent settlement of $7, 000, but Brett refused to provide the name of the person who sold him the wheat or the locations where the Parkers had planted Fuller seed, and the settlement fell through.

         The KWA and KSURF filed suit against Brett Parker and D&B Parker Farms on April 4, 2014. The complaint alleged that the Parkers violated the PVPA by advertising, selling, and replanting the Fuller wheat seed on land they did not own, without authorization from the KWA or KSURF. It sought monetary damages, an injunction to prevent future infringement, treble damages for willful violations, and attorney's fees.

         Farm Bureau policy.

         D&B Farms had an insurance policy from Farm Bureau that was in effect from July 8, 2013, through July 8, 2014. Brett Parker, his wife Amanda, and D&B [Parker] Farms are the named insureds under the policy.

         The policy included a Farm/Ranch and Personal Liability module that provided coverage for property damage and bodily injury caused by the Parkers during their farming operations (but specifically excluding business damages). This module was added to the policy on or about April 24, 2009. D&B Parker Farms, LLC, was added as a named insured at that time.

         On or about May 6, 2009, the Parkers submitted an application to add a Business Liability module to their policy for a rental dwelling. They had not previously had Business Liability insurance through Farm Bureau. The application lists the address for the rental property as 116 Vista Rd, Waterville, Kansas, and lists annual income ...

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