Sides lay out their cases at grain trial

LONOKE — A bad business plan, coupled with a scheme of a grain dealer, led to the 2014 collapse of Turner Grain Merchandising and caused a group of Lonoke County rice farmers to sustain losses in the millions of dollars, an attorney said Monday.

In an hour-long opening statement, Kendel W. Grooms, an attorney representing the farmers in a civil lawsuit, said the case involved “lies, conspiracy, fraud, scheme, secrets and intentional destruction of evidence.”

The lawsuit, now before a jury in Lonoke County Circuit Court, pits farmers against entities of Turner Grain; its founders; KBX Inc., a grain dealer and exporter in Benton; a former Turner Grain employee, and three people with KBX.

The farmer plaintiffs contend that Turner Grain was an agent of KBX, and that KBX knew of Turner’s financial problems but didn’t alert farmers. The lawsuit seeks an unspecified award of compensatory and punitive damages.

“They knew Turner Grain was utilizing a plan offering higher prices to farmers to gain market share even when they knew it would be at a loss,” Grooms said.

Scott Poynter, a Little Rock attorney for KBX, denied the charges, as did attorneys for the other defendants in the hour allotted for their opening statements.

KBX, Poynter said, had paid Turner Grain for its obligations, including $28 million in the final months of Turner’s operations.

Poynter said the plaintiffs won’t be able to produce any legal connection showing

KBX was the buyer of the rice.

“Who bought the rice?” Poynter said. “The rice was bought by Turner Grain Merchandising and we, along with other people engaged in the grain market, bought corn, wheat, rice and soybeans from Turner.”

Turner Grain Merchandising Inc. isn’t a defendant, because it has filed for federal bankruptcy protection, listing some $14 million in assets and about $47 million in debts. The Brinkley grain company was closed by federal regulators in August 2014 when they found no grain in bins certified as being full.

The only criminal charges filed in the case were for writing hot checks to farmers, leveled by prosecutors in Monroe County against Turner Grain’s founders, Dale Bartlett of Brinkley and the late Jason Coleman, who died early last year. Bartlett was convicted last summer and sentenced to five years in prison. He is free, pending appeal.

Lonoke County Circuit Judge Sandy Huckabee has scheduled testimony for nearly every weekday through Feb. 28.

With opening statements on Monday not getting started until early afternoon, attorneys didn’t get deep into a long witness list produced by both sides.

The first witness for the plaintiffs, Christopher Taylor, also is a defendant.

Jerry Kelly, another attorney for the farmers, walked Taylor through a succession of grain contracts, emails and text messages that the plaintiffs say is a nexus between KBX and Turner Grain.

Some of the text messages, particularly those between Taylor and Coleman, reflect a mounting pressure in the summer of 2014 for Turner to increase rice purchases. “If u have to pay up just get it bought,” Coleman texted Taylor on June 24, 2014.

Andy Turner of Cabot, the attorney for Taylor, said his client, as a mere employee of Turner Grain, never should have been made a defendant in the lawsuit. Taylor couldn’t hire or fire anyone, and didn’t have access to Turner checks or have signing privileges, he said.