LOL Finance Co. v. Enger, 4:20-cv-04158

LOL Finance Co. (LOLFC), a Minnesota lender to agricultural producers, made a $250,000 loan on March 25, 2019 to Steven C. Enger, Christopher S. Enger, Darla M. Enger, and Enger Farms GP.
The loan required proceeds be used for commercial farming and was secured by crops and related proceeds.
Enger Farms filed Chapter 12 bankruptcy on November 21, 2019, which stayed collection against the partnership.
The loan matured February 1, 2020 and was not paid; LOLFC sent a default/demand letter on September 4, 2020 and then sued for breach to recover the $250,000 plus interest, fees, and costs.
Steven and Darla Enger moved to dismiss under Rule 12(b)(6), joined by Christopher Enger, arguing LOLFC failed to comply with SDCL § 54‑13‑10 (mandatory agricultural mediation) before suing.
The district court denied dismissal, holding the mediation statute did not bar LOLFC’s federal money‑judgment suit and, in any event, failure to seek mediation is not jurisdictional.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether SDCL § 54‑13‑10 (mandatory mediation) applies to bar this federal suit seeking a money judgment	LOLFC: statute applies only when enforcing a debt against agricultural land/property or enforcing a secured interest; here LOLFC seeks only a money judgment, so statute does not apply	Engers: a judgment attaches to real property (SDCL § 15‑16‑7), so any enforcement affects agricultural property and triggers mediation	Court: § 54‑13‑10 does not apply to LOLFC’s action for a federal money judgment; but LOLFC must comply with § 54‑13‑10 before docketing a federal judgment in state court to create a lien on agricultural property
Whether failure to comply with § 54‑13‑10 requires dismissal of the suit	LOLFC: even if statute applied, its requirement is non‑jurisdictional and noncompliance does not mandate dismissal	Engers: failure to request mediation warrants dismissal	Court: statute is not jurisdictional; failure to file for mediation does not justify dismissal (court denied dismissal)

Ashcroft v. Iqbal, 556 U.S. 662 (pleading standard: factual allegations must state a plausible claim)
Bell Atl. Corp. v. Twombly, 550 U.S. 544 (plausibility pleading standard described)
Schriener v. Quicken Loans, Inc., 774 F.3d 442 (8th Cir.) (district court must accept well‑pleaded allegations and draw inferences for nonmoving party)
Great Plains Trust Co. v. Union Pac. R.R. Co., 492 F.3d 986 (8th Cir.) (choice‑of‑law: apply state substantive law in diversity cases)
Walsh v. Larsen, 705 N.W.2d 638 (S.D.) (South Dakota Supreme Court: § 54‑13‑10 is not jurisdictional; failure to request mediation does not require dismissal)