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Maryland Casualty Tries to Escape Listeria Judgment

The insurance company for San Antonio-based Sangar Fresh Cut Produce says its own fine print is enough to excuse it from paying a $1.1 million default judgment to the family of a man killed by Listeria-contaminated celery.

Hermilo Castellanos, 81, was one of five people who died in Listeriosis outbreak last fall where 10 people were infected in the Austin, San Antonio, and Hidalgo areas of Texas.   Kenneth Sanquist Jr., who owned Sangar, failed to respond to the lawsuit by the Castellano family, and Texas  District Judge Barbara Nellermoe ordered a $1.1 million judgment in favor of the plaintiff. 

Sangar’s insurance carrier, however, says it should not have to pay the judgment because Sanquist did not notify them as required by the terms of the policy.

Nine of the 10 Texas listeriosis outbreak cases were tied through a DNA match to the celery produced by Sangar, which was shutdown on an emergency order last Oct 10 by the Texas Department of State Health Services.

At that time, Sangar had recalled all products produced at the facility and shipped to more than 300 retail, wholesale and institutional customers going back to Jan. 1, 2010.

Maryland Casualty says it did not know about the lawsuit or the default judgment until it was provided to them by the attorney for the Castellanos family.

David Babcock, an attorney with the food safety law firm of Marler Clark, (sponsor of Food Safety News) said the insurance company’s action was “frustrating.” He said no one wants to accept responsibility.

A new company with a new license has taken over the Sangar facility. Nino’s Produce and Processing Co. is doing business there now after extensive inspections, according to Texas officials.

© Food Safety News
  • And how exactly was the Maryland Casualty to fulfill its contractual obligation to defend its insured, Sangar Fresh Cut Produce, if it didn’t know a lawsuit had been filed?
    The requirement of notification of a lawsuit is NOT in the “fine print” as David Babcock and Marler Clark would like everyone to believe. Rather, the requirement of notification of lawsuits is in EVERY standard liability policy issued in the USA.
    And, of course, every competent plaintiff’s attorney knows that.
    It is reports like this one that make me question Food Safety News’ commitment to good journalism.

  • And how exactly was the Maryland Casualty to fulfill its contractual obligation to defend its insured, Sangar Fresh Cut Produce, if it didn’t know a lawsuit had been filed?
    The requirement of notification of a lawsuit is NOT in the “fine print” as David Babcock and Marler Clark would like everyone to believe. Rather, the requirement of notification of lawsuits is in EVERY standard liability policy issued in the USA.
    And, of course, every competent plaintiff’s attorney knows that.
    It is reports like this one that make me question Food Safety News’ commitment to good journalism.