Death of Livestock In Blizzard Was a Covered Loss by “Drowning”

Many farmers view insurance as a necessary “evil,” whether it be life insurance, disability insurance, crop insurance or insurance covering livestock losses, just to name a few.  With insurance, it is absolutely critical that the contract language be read and understood and that any lack of understanding of policy language be adequately explained, preferably in writing, by the insurer.  The rule of law with respect to ambiguous policy language is that, in the event of a dispute, the ambiguous language is construed against the drafter – the insurance company.  It is also important in some cases that if a lawsuit is brought against the insurance company, that the case be carefully briefed, filed and argued so as to not open up additional policy provisions that could defeat the insured’s position.  These points were on display in a recent case from South Dakota.

The plaintiffs (a married couple) operate a cattle and row-crop operation in South Dakota. A storm in the fall of 2013 began as rain and turned into a blizzard in which 93 of their cattle (yearling heifers) died. Their veterinarian necropsied some of the cattle and determined that their death was by drowning because the lungs of the cattle were saturated with water and their airways were obstructed with foam (air trapped in water), and there was clear liquid in all airways and running from the noses of the cattle. This was all the result of the cattle inhaling large amounts of rain and snow during the storm which triggered cardiac arrest and death. The plaintiffs insured the cattle against loss by “drowning.” The plaintiffs filed a claim for the death of the cattle by drowning, but the insurance company denied the claim due to none of the cattle being found submerged in water. The trial court agreed with the insurance company and granted them summary judgment.

On appeal, the state Supreme Court reversed. The Court noted that “drowning” was not defined in the policy and that because both parties offered reasonable interpretations of the term, the term was deemed ambiguous and the ambiguity was to be construed in the insured’s favor. The Court also held that exclusionary language contained in the policy excluding coverage for loss to livestock due to “smothering, suffocation or asphyxiation” or “freezing in blizzards or snowstorms,” didn’t apply because the plaintiffs only claimed coverage under drowning provision which didn’t contain similar exclusionary language.

The case is Papousek v. De Smet Farm Mutual Insurance Company of South Dakota, No. 27658-r-JMK, 2016 S.D. LEXIS 93 (S.D. Sup. Ct. Jul. 20, 2016).