Hillshire Brands Sues Own Insurers After $13M Asbestos Case Loss

Illustration of legal cases for asbestos and mesothelioma

Hillshire Brands Co. is suing its own insurers after losing a $13 million asbestos case for wrongful death. The case concerned Orcutt resident Mark Lopez who died at 61 years old from mesothelioma cancer. It was determined the cause was asbestos exposure from Hillshire’s Union Sugar Plant in Betteravia.

An investigation uncovered large amounts of asbestos insulation in the plant just six miles from Santa Maria. Lopez grew up in Betteravia, a small coastal town in Central California, which surrounded the plant in the 1960s. Most people who lived there worked for the Union Sugar plant. Then his family moved to Santa Maria in the mid-1960s.

At the plant, the asbestos was contained most of the year except when it closed for maintenance. That’s when workers used claw hammers and other tools to remove the asbestos from the piping and boiler room walls.

“It was an extremely dangerous process if you consider the amount of asbestos released to the air,” said the Lopez family’s lawyer. “There was a dump on site where the asbestos was taken and many children played there, including Mark himself. That entire town of Betteravia was contaminated.”

Lopez’s complaint read, “At all times when [Mark] lived on the premises and came into contact with others who worked at the plant, it was determined that asbestos exposure could cause the incurable cancer called mesothelioma.”

The Alameda County civil jury went through three weeks of testimony and four hours of deliberations before reaching a decision. According to court testimony, many times the asbestos was fed through an electric grinder to be reused as stucco.

Now Hillshire Brands Co. is suing California Casualty Co. and American Home Assurance Company, seeking indemnity coverage and breaching their contract of good faith.

This asbestos battle between company and insurer isn’t uncommon. Goodyear Tire & Rubber Co. was sued by Berkshire Hathaway Inc. over asbestos claims. Berkshire refused payments to Goodyear because Goodyear didn’t say anything about them for seven years.

Plus, mesothelioma cancer is expensive. Hartford Connecticut Financial Services Group Inc.’s profit dropped drastically in the second quarter of 2016 due to an asbestos hit of mesothelioma cancer cases. Drugs cost more than $120,000 per individual annually.

In Hillshire Brand Co.’s case, both insurance companies have 30 days to file a response to the complaint.