Dinner with family leads to $32M settlement for local farmers

KENANSVILLE - Most people can agree that time spent with family is always time well spent. For the Frederick family and several local farmers who recently received their checks for a cumulative $32 million settlement, a family dinner proved to be a fortuitous coincidence.

In August of last year, Scott Flowers, a Duplin County native, and partner at Hutchens Law Firm was having dinner with his family when he learned about a discrepancy over a crop policy damage compensation.

"My brother-in-law, Bradley Frederick, my sister's husband, at dinner one night … told me about how the farmers had purchased this hurricane insurance. And even though all the news reports said that hurricane Isaias had come through Duplin County, and they all live there, they didn't get paid. So, I told him I'd look into it," said Flowers.

Frederick said that their insurance didn't want to reimburse them for their crop loss and damage even though weather reports from the National Weather Service had published when Hurricane Isaias changed from hurricane to a topical storm. "And in our area the storm was still hurricane force wind speed."

"We experienced wind damage and excessive rain to our corn and tobacco crops as did many other Duplin county farmers I know," said Frederick.

After the conversation with Frederick, Flowers did some research. He examined the insurance policy, the endorsement and how the government had determined who would get paid.

"My conclusion was that Duplin County should have been included," said Flowers.

Every year, farmers purchase crop insurance from a local approved insurance provider. The insurance is issued through the Federal Crop Insurance Corporation and managed by the US Department of Agriculture's Risk Management Agency and is ultimately guaranteed and paid by the USDA.

Under the Common Crop Insurance Policy, every farmer has the same policy. The level of coverage depends on the amount and type of crops they have, as they can purchase various endorsements.

According to Flowers, in 2020 for the first time, the RMA came out with a hurricane wind endorsement that would pay farmers if they had hurricane damage to their crops.

"The way you got paid was, after a hurricane, the RMA would publish a list of counties that are what they call trigger counties,' said Flowers. "If you were in one of these trigger counties and you had purchased this endorsement, you got paid. If you are a trigger county, every county that is adjacent to you also gets paid.

The FCI for hurricane damage differs from the traditional insurance policy as it does not require proof of loss, and policyholders automatically receive a check in the mail.

Flowers noted that although Hurricane Isaias made landfall near the South Carolina-North Carolina border in August 2020 and came through Duplin County, the list of trigger counties published by the RMA did not originally include Duplin.

"We got the letter back from NAD saying that it was a general applicability claim, which gave us then the right to file the suit in Federal Court," said Flowers.

"Between the time we filled the appeal with the NAD and the lawsuit in federal court, I arranged for a meeting at the Warsaw Fire Department with farmers in the area, and we had a bunch of farmers come out," he said.

Flowers presented a PowerPoint sharing with the farmers what they had discovered and what his next steps were.

"Forty different farms ultimately joined our group," said Flowers. "We filed the suit and ultimately the USDA agreed to pay all the claims, which totaled about $32 Million for the farmers of Duplin County and the adjacent counties to the north, which were previously excluded.

After reaching an agreement, an updated list of trigger counties was published.

"Checks automatically went out to the farmers and after all the farmers got their checks, we agreed to dismiss the lawsuit," said Flowers.

The process took about a year of work.

"I was excited to be involved - especially because I am from Duplin County. These are my family and friends," said Flowers.

"The neatest thing about it to me is that not only farmers are getting paid, but I know they are going to use this money in the community. They're going to buy tractors, cloth their kids, and go out to restaurants, and the money is going to flow throughout the community," said Flowers. "Everybody can benefit from it."

His advice to farmers is to make sure they talk to their insurance agent and understand what they are purchasing. Also, to learn how they will get paid in the event of loss under their policy.

"If you feel you are not treated correctly, bring it up to your insurance agent or seek legal advice," he said.

"Without Scott Flowers and Hutchens Law Firm taking on this case for our Duplin County farmers, this 32 million dollars they were due from crop insurance, from hurricane damage, would have never been paid," said Susan Flowers Frederick of Warsaw.