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UPGI, officers sue insurer to cover price fixing case costs

Published on March 21, 2013 3:01AM

Last changed on April 25, 2013 8:42AM


Capital Press

BOISE, Idaho -- United Potato Growers of Idaho and four of its leaders, targeted by an ongoing federal lawsuit alleging price fixing, are suing to force their insurance provider to cover legal costs.

Plaintiffs in the insurance breach-of-contract case -- UPGI, Keith Cornelison, Michael Cranney, Jeff Raybould and Albert Wada -- filed the suit March 6 in Ada County district court against Twin City Fire Insurance Company and its parent company, Harford Financial Services Group, Inc.

Judge Ronald J. Wilper is assigned to the case, and the plaintiffs have demanded a jury trial, though no trial date has been set.

According to the filing, the insurance company sent a letter Aug. 24, 2010, indicating only claims submitted on behalf of UPGI would be covered and claims for the directors and officers were excluded because they involved "price fixing, monopolization and unfair trade practices."

The lawsuit alleges all premiums were paid for the policy and none of UPGI's defense costs have been covered either, despite the acknowledgment in the letter.

"The defendants have not responded in any fashion, resulting in an effective denial of coverage for the individual plaintiffs," the filing reads.

The plaintiffs made no estimate of legal costs in the federal case, requesting damages to be determined at trial, plus costs, expenses and attorney fees associated with the case against the insurer.

The federal suit was filed in Idaho district court by potato buyers including Jamestown, N.Y.-based Brigotta's Farmland Produce and Garden Center against UPGI, United Potato Growers of America and several affiliated farmers and companies. It alleged they "conspired to fix, raise, maintain and stabilize the price of fresh potatoes in the U.S. starting as early as 2004."

UPGA, based in Salt Lake City, includes regional cooperatives in 10 states and was formed to restore stability to the industry by promoting specific planting guidelines to growers. UPGA believed they had authority to work to improve the potato market under the Capper-Volstead Act, which grants associations of agricultural producers certain exemptions from antitrust laws. Chief U.S. District Judge B. Lynn Winmill ruled in December 2011 the potato cooperative isn't exempt from antitrust laws.

UPGA officials have said they expect that ruling will be reversed.

UPGA CEO Jerry Wright declined to comment on the insurance case.


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