Judge Partially Dismisses GA Chicken Plant’s $2M Claims Against Insurer

A Georgia federal district court granted partial summary judgment in favor of an insurer for a Georgia chicken processing plant where six workers died due to a liquid nitrogen leak. The case is Foundation Food Group Inc. et al. v. Selective Way Insurance Co., case number 2:21-cv-00207, U.S. District Court for the Northern District of Georgia.

The court ruled that the plant owners, Foundation Food Group Inc., and Prime-Pak Foods Inc., could not pursue both their declaratory judgment and breach of contract claims against Selective Way Insurance Co. The court reasoned that they were duplicate claims in which the owners sought the same relief. The court also dismissed the plant owners’ claim for attorney fees based on allegations of Selective acting in bad faith, although they may be able to refile that claim in the future. 

The chicken plan owners claim that they lost more than $2 million in property, income, and other expenses due to the liquid nitrogen leak in January 2021. The leak stemmed from a freezer that malfunctioned due to physical damages. As a result, six workers died, other workers suffered injuries, and the plant sustained major property damage. In addition, the plant remained closed for over a month due to the incident. 

The Selective insurance policy that the plant owners had in place at the time of the incident provided up to $19.4 million in business personal property coverage and $6.9 million in business income and extra expense coverage. Additionally, the policy offered $250,000 for equipment breakdowns and associated spoilage and another $25,000 for specific spoilage.

The owners maintain that their commercial property insurance policy with Selective should have covered its claim. They promptly notified Selective of the incident and filed the appropriate claims paperwork. Their claim consisted of $1.2 million in expenses and $465,000 for condemned and disposed-of chicken products. According to the plan owners, Selective refused to pay anything toward their claim and instead barraged them with requests for additional information. The payment delays caused further losses to the plant owners, culminating in the company’s forced sale. 

The owners and other parties are also facing six wrongful death lawsuits due to the loss of life during the incident. The Occupational Health and Safety Administration (OSHA) also fined the owners and other parties almost $1 million related to the incident. 

HBL has experience in all areas of benefits and employment law, offering a comprehensive solution to all your business benefits and HR/employment needs. We help ensure you are in compliance with the complex requirements of ERISA and the IRS code, as well as those laws that impact you and your employees. Together, we reduce your exposure to potential legal or financial penalties. Learn more by calling 470-571-1007.

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