Kris Woelfel and Julie Woelfel and City View Dairy, LLC vs. Homestead Mutual Insurance Company

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INSURANCE: $1.5 MILLION

Court: Calumet County Circuit Court

Case no.: 07-CV-219

Case name: Kris Woelfel and Julie Woelfel and City View Dairy, LLC vs. Homestead Mutual Insurance Company

Judge: Donald A. Poppy

Verdict & settlement: Jury returned plaintiff verdict

Original amount sought: $500,000: offer of settlement for all three plaintiffs

Original offer: Zero dollars

Award: $1,503,449 plus interest under §807.01(4)

Date of incident: Sept. 16, 2006

Disposition date: Feb. 24, 2009

Original filing date: Sept. 4, 2007

Plaintiffs attorney (firm): Scott Lawrence, Lawrence Law Office, SC, St. Nazianz; Greg Cook, Greg Cook Law Offices SC, Milwaukee

Defendants attorney (firm): Erik Pless (bad faith), Everson Whitney Everson Brehm, Green Bay; Thomas Terwilliger (coverage), Terwilliger Wakeen, Wausau

Insurance carrier: Homestead Mutual Insurance Company, Larsen

Plaintiffs expert witnesses: Plaintiffs’ local construction and maintenance experts, Peter Ahrens and David Tennessen; Alfred Szews, Ph.D., forensic fire/explosion investigator; Mark Beavers, Richmond, VA, fire investigation (deposition testimony read); Michael Behr, Ph.D., agricultural economist; Kris Woelfel, plaintiff, dairy farmer and construction

Defendants expert witnesses: Bruce Johnson, silo construction; Timothy Grocholski, civil engineer (investigated but did not testify at trial except as his deposition was read in by plaintiffs); Robert Schroeder, Ph.D., fire investigation; Wayne Knoblauch, Ph.D., agricultural economics; Bernard McCartan, J.D., insurance bad faith; Timothy Wiedmeyer, insurance bad faith (by deposition testimony read in by plaintiffs only).

Plaintiff counsel’s summary of the facts: A poured concrete silo failed on plaintiffs’ dairy during the night of Sept. 16, 2006. It fell into the dairy barn and destroyed it, along with approximately 13 head of dairy cattle.

The defendant, the plaintiffs’ farm owners insurer, denied coverage, claiming that neither the explosion nor fire coverage applied. The 70 ft. silo had been filled with approximately 50-55 ft. of corn silage the morning before, finishing approximately 8 hours before the failure. A loud “whoosh” sound accompanied the failure, followed by a crash when the silo hit the barn. Concrete debris of all sizes was spread in all directions, more than 100 yards in many cases. More debris fragments were found further away to the north (away from the direction of the silo fall) than to the south.

The insurer obtained two reports of engineers indicating that the silo had failed simply due to structural deficiency, despite initial reports from the same experts that the silo appeared to have been in pretty good shape structurally based upon initial observations of the debris.

There was clear evidence of fire, although most of it was buried beneath the fresh corn silage that came out of the silo when it failed. Neither of the insurance carrier’s experts noted the evidence of fire, and one affirmatively walked away when he overturned a fork full of silage when he smelled something burnt.

Plaintiffs experts, after investigation, concluded that the silo failure was due to a grain dust explosion triggered by a fire of unknown origin. The explosion traveled in all directions, including up the silo chute, blowing it apart and causing the silo failure. The barn walls were also blown outward all directions and in varying degrees.

The case was tried upon the issues of insurance coverage and bad faith in the same trial. No motion to bifurcate was filed. After a trial of just over six days, the jury returned a verdict finding that the failure had resulted from an explosion. Coverage damages were stipulated at $344,111. The jury further found that the insurance company had handled the claim in bad faith, and awarded compensatory damages totaling $171,514 and punitive damages of $700,000. The verdict was returned on Feb. 24, 2009.

The trial judge entered judgment on the verdict following two hearings, and also awarded attorney fees and litigation expenses related to compensatory damages. The trial court further awarded §628.46 interest, as well as interest under §807.01(3) and (4), because the judgment exceeds plaintiffs’ offers of settlement. Interest runs on the total judgment of $1,503,449 (total of judgments for all three plaintiffs) at the rate of 12 percent from the offers of settlement forward.

An appeal has been filed by the defense.