Court: Insurer not on the hook for contaminated wheat

Couple sued for delivering wheat to elevator contaminated with fertilizer

An insurance company that insured a Miranda, South Dakota couple has no duty to defend that couple for delivering wheat contaminated with fertilizer, the South Dakota Supreme Court has ruled.

State Farm Mutual Automobile Insurance Co. sought a declaratory judgement that it was not responsible to defend Mike and Nancy Grunewaldt. The Court agreed with Circuit Court Judge Tony Portra, who ruled that State Farm had no duty to defend the Grunewaldts, nor to indemnify the couple for any damages related to the contaminated wheat.

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The Grunewaldts were sued by Agtegra Cooperative, which alleged the couple delivered contaminated wheat on Oct. 15-16, 2019 to its elevator in Redfield. That wheat was placed in a bin containing about 400,000 bushels of wheat. While the company was able to segregate the contaminated wheat, it alleged that it “received considerably less” than what it otherwise would have gotten for uncontaminated wheat.

Agtegra sought damages of more than $325,000 for loss of income, increased labor costs, loss of the use of the bin and other expenses. The company said that Mike Grunewaldt had done business with Agtegra for 20 years and was aware the company couldn’t accept “seed or grain contaminated with pesticides or other foreign substances, including fertilizer.”

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