Bad time for swine
On January 18, 1990, Curtis O. Griess & Sons, Inc., purchased from Farm Bureau Mutual Insurance Company of Nebraska a policy to cover its livestock from harm caused by certain defined perils, including windstorm. Infectious diseases were not excluded.
On March 13, 1990, a windstorm occurred in Clay County, Nebraska. This tornado traveled from the southwest to the northeast. Southwest of the Griess farm, in the path of the tornado, were several herds of pseudorabies-infected swine that had been quarantined by the state department of agriculture.
Farm Bureau did not dispute that the pseudorabies virus was transmitted to the Griess farm by the windstorm. The insurer also did not dispute that the Griess swine herd became infected with pseudorabies and that the pseudorabies resulted in either death or damage to the swine.
The parties agreed that Griess incurred $128,732.38 in veterinarian expenses and that Griess refunded $19,900 to purchasers of breeding gilts shortly after the herd became infected but before the symptoms could be detected.
The affected swine were Lieske Genetics maintained for breeding. They therefore commanded a premium in the breeding stock market. Many pigs died of the infection. Those that did not die could not be used for breeding but only for slaughter. Because the swine could not be used for breeding, a portion of their value was lost.
Farm Bureau denied coverage, and the court granted Griess’s motion for summary judgment while denying that of the insurer. Farm Bureau appealed.
On appeal, Farm Bureau did not argue that there was a genuine issue of material fact; rather it contended that the immediate, dominant, and proximate cause of the loss was pseudorabies and not windstorm. Farm Bureau submitted that because the airborne transmission of an infectious disease was not a covered peril, there was no liability under the policy. Thus causation was the crux of the parties’ dispute. With respect to causation, the parties agreed that the pertinent policy language was the phrase “caused directly.”
The court noted that physical loss by windstorm was a covered peril. “The wind need not pick up and throw the swine to the earth to constitute a direct cause of the loss. … We can see no reason for treating a windborne virus any differently from other windborne objects.”
Additionally, the court stated, “where a virus has been transmitted by means of a covered peril, the covered peril has been held to be the proximate cause of the loss.” Absent the windstorm, the court pointed out, Griess’s swine would not have become infected.
Farm Bureau objected to the veterinarian fees expended to prevent the death of the swine and the refunds Griess made to purchasers of infected swine. The court concluded that the district court properly included both the fees and the refunds when computing the damages in the case.
The court awarded Griess $8,373 for attorney fees.
Griess & Sons, Inc. v. Farm Bureau Insurance Company of Nebraska—Supreme Court of Nebraska—March 10, 1995—No. S-93-342.