Nodak Mutual Insurance Co.'s directors have ignored appeals to allow contested elections for the company's board, according to a lawsuit that seeks to overhaul how its directors are chosen. Nodak's chief executive officer said the claim was baseless.

The Ward County Farm Bureau, which filed the lawsuit in Northwest District Court in Minot last week, wants Nodak Mutual to allow policyholders to nominate board candidates and propose changes in the company's bylaws.

Nodak is based in Fargo and is one of North Dakota's largest insurers. The company has rebuffed attempts to put candidates on the ballot to run against incumbent directors, said John Fjeldahl, president of the Ward County Farm Bureau. In the past two years, five of Nodak's 12 directors have been re-elected without opposition.

"I've served on quite a few boards, and this is probably the most bizarre thing I've seen, as far as isolating the owners of the company," Fjeldahl said. "When you've got a board of directors that is supposedly representing the owners of a company, if you can't elect them or unelect them, what impact are you going to have?"

The president of Nodak's board is Menoken farmer Doug Goehring, who is the Republican candidate for North Dakota agriculture commissioner. Goehring is opposing Democratic incumbent Roger Johnson for the second time in two years, after narrowly losing to Johnson in 2004.

Its board members include former Republican U.S. Sen. Mark Andrews, North Dakota Farm Bureau President Eric Aasmundstad and two GOP state lawmakers, Grand Forks Sen. Duaine Espegard and Finley Rep. William Devlin.

The Ward County Farm Bureau has pushed unsuccessfully in court to overhaul Nodak Mutual's management practices. It wanted Insurance Commissioner Jim Poolman to order the company to make changes, but a district judge and the North Dakota Supreme Court ruled Poolman could not be forced to do so.

"It's unfortunate that we have one policyholder that continues to file lawsuits about issues that have already been decided," Alexander said Monday.

The lawsuit demands that Nodak Mutual's board adopt rules to permit contested elections for its 12-member board, and to allow policyholders to suggest changes to the company's bylaws. Minot attorney Lynn Boughey, who is a former deputy state insurance commissioner, is representing the Ward County Farm Bureau.

"The fact of ownership demands the right to control that which is owned," the court filing says. "This right has been denied, and must be remedied."

The Ward County Farm Bureau has twice nominated Jim Lee, who farms near Max in rural Ward County, as a potential candidate, only to have the committee refuse to put him on the ballot. Instead, incumbent directors were allowed to run unopposed.

Lee and Goehring competed for the Republican endorsement for agriculture commissioner, with GOP convention delegates favoring Goehring at the party's convention in Minot last month.

Alexander said the nominating committee determined Lee was not qualified to serve on Nodak's board. Shareholders of most companies do not have the right to demand ballot access, Alexander said.

"What we do, I think, is fairly typical in corporate America," he said. "If I said, 'I want to serve on General Electric's board,' I don't think I could automatically be put on their ballot."

The Ward County Farm Bureau has suggested that Nodak allow candidates to be nominated for the board by getting petition signatures from 25 or more policyholders, at least three months before the election. The proposed bylaw has never been put to a vote of policyholders.

Nodak's five senior vice presidents had asked Poolman to intervene, claiming company directors had attempted to squelch questions about Nodak's management and approved dubious royalty payments to the North Dakota Farm Bureau for use of the organization's logo. Farm Bureau members founded the company in 1946.

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