What began as a routine insurance misstep has snowballed into a legal battle over timing, reinsurance, and blame. This week, insurance agency RLS Limited, doing business as Breckenridge Insurance Co., and its executive Jessica Godley, urged a Michigan federal judge to toss Producers Agriculture Insurance Co.’s (ProAg) $1 million lawsuit, arguing the claims are expired and legally redundant.

The lawsuit stems from a dispute over a Federal Crop Insurance Corp. (FCIC) reinsurance denial tied to a Michigan dairy farm. But the defendants say ProAg is “taking another bite at the apple” after being ordered to pay out over $1 million to Mibelloon Dairy LLC in a prior arbitration.

From Clerical Error to Courtroom Clash

At the heart of the dispute is a simple oversight with costly consequences. ProAg alleges that Godley, a Breckenridge VP of agricultural services, failed to enter signature dates on quarterly endorsements for dairy revenue protection (DRP) insurance—effectively rendering those forms invalid and triggering FCIC’s refusal to reinsure the policies.

Mibelloon sued ProAg, Breckenridge, and Godley back in 2021, claiming it lost several months of coverage in 2020 due to the missing paperwork. The matter went to arbitration, and ProAg was ultimately held liable for over $1 million in unpaid coverage.

In April, ProAg returned to court, this time suing Breckenridge and Godley directly, accusing them of negligence, breach of contract, and causing its reinsurance loss.

Defendants Cite Time Limits, Contract Clauses, and Legal Finality

Breckenridge responded Tuesday with a motion to dismiss, contending ProAg's lawsuit misses critical legal deadlines and rehashes settled issues.

They argued that the contractual claims fall under Texas law—per a 2011 agreement—and are thus barred by the state’s four-year statute of limitations. Meanwhile, claims based in tort, such as negligence, fall under Michigan’s three-year window, which has also closed.

Moreover, they say ProAg could’ve brought these claims during arbitration with Mibelloon but didn’t—and can’t now resurrect them after the fact.

Reinsurance Roadblock: Agency Review Required

Breckenridge and Godley also argued the FCIC’s decision not to reinsure ProAg is not a judicial matter, but rather a question of federal administrative policy. As such, ProAg must first obtain a final agency determination from FCIC before seeking redress in court.

They further rebuffed ProAg’s indemnity and contribution claims, pointing out that Michigan no longer recognizes joint liability in most civil cases and that ProAg didn’t prove it was without fault in the original arbitration.

A Case with High Stakes and a Tangled Legal History

The legal wrangling reveals the complexity of insurance relationships, where one missing date can trigger multi-party litigation and millions in exposure. If the judge agrees with Breckenridge’s motion, ProAg’s attempt to recover its reinsurance loss may be shut down for good.

ProAg is represented by Elaine M. Pohl and Joshua R. LaBar of Plunkett Cooney.
Breckenridge and Godley are represented by Carina M. Kraatz of Kitch Attorneys and Counselors PC.

Requests for comment from the parties were not immediately returned as of Wednesday.