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A W.R. Berkley unit is not obligated to defend a rice seed producer and seller in litigation over a rice crop that was allegedly ruined after its agent sprayed herbicide over it, says a Texas appeals court in reversing a lower court ruling.
In September 2015, the Dishman Rice Farms Partnership in Beaumont, Texas, filed suit against Alvin, Texas-based RiceTec Inc., which produces and sells rice seeds, alleging its agent and fellow defendants began aerial spraying of herbicide on RiceTec-farmed plots adjacent to its property, which killed or damaged 742 acres of its rice crop, causing more than $1 million in damage, according to Tuesday’s ruling by the Texas court of appeals in Houston in Starnet Insurance Co. v. RiceTec, Inc.
RiceTec filed suit in state court against W.R. Berkley unit Starnet after it denied coverage. The trial court ruled the insurer was obligated to defend RiceTec, but was overturned by the state appeals court.
A policy endorsement states coverage is excluded for property damage resulting from the “application of herbicides, pesticides, fertilizers or similar agricultural chemicals by aircraft owned, operated by, rented or loaned to (RiceTec) or by any non-owned aircraft,” said the ruling.
“The language of this exclusion in the Endorsement is broad enough to encompass applications of herbicides by aircraft that is owned, or not owned, by RiceTec,”’ said the ruling.
The Dishman lawsuit “undisputedly alleged that the herbicides that damaged the rice corps were applied aerially” and therefore falls under the endorsement’s exclusion, the ruling said, in reversing the trial court’s ruling, and remanding the case for further proceedings.
Berkley’s attorney could not be reached for comment, while RiceTec’s attorney had no comment.
A W.R. Berkley Corp. unit has prevailed in litigation with an au pair firm based on a prior knowledge exclusion in its errors and omissions policy, in a ruling Thursday.