PIERRE, S.D. - Water that kills cattle by suffocation can drown them, whether the animals walked into a pond or not. That’s a point of law that a South Dakota rancher successfully made to receive an insurance claim in the wake of the Atlas blizzard, which occurred nearly three years ago.
Richard and Lorayna Papousek of Quinn, S.D., were denied claims based on the loss of 93 heifers in the Oct. 3 to 5, 2013, Atlas Blizzard. The Papouseks were insured with a farm owner-ranch owner policy from De Smet Farm Mutual Insurance Co. of De Smet, S.D. The Papousks filed a declaratory judgment and, while the circuit court had favored De Smet, the Supreme Court reversed the circuit court’s decision in a ruling filed July 20, in favor of the Papouseks.
Papousek, now 63, says the settlement was about $111,000, but his lawyer’s fees were about $30,000, leaving an $81,000 net payment. “It’s aggravating that, when you’re insured for something, you have to hire lawyers and everything to get it paid,” he says.
In writing, the opinion for the unanimous decision, Justice Janine M. Kern said “drowning” is undefined in the policy. De Smet and Papousek each offer “reasonable interpretations of the term,” the judge said, noting the court decided the provision liberally in Papouseks’ favor.
Vet’s definition
De Smet said the “common understanding” requires “submersion or immersion,” using a dictionary definition, but the veterinarian’s definition was different.
Veterinarian Jim McConaghy, of Wall, S.D., found the cattle’s lungs were saturated with water and their airways were obstructed with foam (air trapped in water) and found clear liquid in all airways and running from the cattle’s noses. McConaghy “speculated that during the storm, the cattle inhaled large quantities of rain and then snow, resulting in a lack of oxygen and eventually cardiac arrest and death,” and the cattle “absolutely died due to drowning.”
De Smet argued they didn’t have to pay because of an “exclusion” that prevents indemnities for losses “caused directly or indirectly by frost, cold weather ice (other than hail) snow or sleet, and loss to livestock caused by or resulting from “smothering, suffocation or asphyxiation” or “freezing in blizzards or snowstorms.” De Smet said the cattle died - in part - from the inhalation of snow. Kern disagreed, saying the drowning policy contained no exclusions or similar explanatory language.”
The Papouseks said “reasonable people understand that the hallmark of drowning is not the presence of water outside the body; rather it’s death caused by water or fluid within the body.”
You keep going
South Dakota Stockgrowers Association President Bill Kluck of Mud Butte, S.D., applauds Kern’s opinion and the court’s decision.
“If you pay your insurance company for coverage, it shouldn’t be too much to ask them to take care of your claim when you have a loss like this,” Kluck says. “It’s hard to keep your business going through a disaster if your insurance company doesn’t back you up. I really hope that we don’t see this type of case again.” Kluck suggested people with livestock insurance policies should “know what’s in the fine print” and work with companies they’re confident “will take care of business when you need them to.”
Papousek said the delay of the payment “sure knocked us back a long way, but when you have farming and ranching in your blood, you don’t give up. You just keep going.”
