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March 2023

Minneapolis Team Secures Over $27 Million for Cargill

United States - Minnesota

On March 7, 2023, a team of Faegre Drinker business litigators obtained a complete victory at the United States Court of Appeals for the Eighth Circuit for firm client Cargill. The decision entitles Cargill to over $27 million in insurance coverage plus prejudgment interest.

The case involved a significant employee theft by a Cargill employee in Albany, New York. The employee had devised a fraudulent scheme where she sold grain at a loss while falsifying financial records to make it seem like Cargill had made a profit, thereby inducing Cargill to continue buy and ship grain to Albany. After Cargill discovered the theft, it provided a notice of claim to its insurer, National Union Insurance Company of Pittsburgh (“National Union"). The parties then engaged in a contractually-agreed-upon investigation process, which determined Cargill's losses, including those for increased freight costs, totaled over $32 million. National Union refused to cover $29 million of that total.

The parties then sued each other in Minnesota federal court, seeking dueling declaratory judgments about whether National Union had to cover the $29 million loss that Cargill suffered as a result of the theft. The district court held that Cargill had suffered a loss resulting directly from employee theft under the terms of the insurance policy and granted judgment on the pleadings to Cargill. The district court further held that the statutory interest of ten percent per year began accruing in 2016 when Cargill initially submitted its notice of claim.

National Union appealed and Cargill hired Faegre Drinker's team of appellate lawyers to represent it on appeal. After full briefing and argument in the fall of 2022, the Eighth Circuit affirmed the district court entirely, holding that Cargill was entitled to the $29 million in coverage because its employee exercised sufficient control over the grain which amounted to theft under the insurance policy and that Cargill's $29 million loss resulted directly from that theft. It further affirmed that Cargill was entitled to prejudgment interest beginning in 2016. 

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