Case 2:21-cv-00207-RWS Document 1 Filed 09/17/21 Page 1 of 27
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE NORTHERN DISTRICT OF GEORGIA
`GAINESVILLE DIVISION
`
`FOUNDATION FOOD GROUP, INC.;
`PRIME-PAK FOODS, INC.;
`
`Plaintiffs,
`
`v.
`
`SELECTIVE WAY INSURANCE
`COMPANY,
`
`Defendant.
`
`CASE NO.
`
`2:21-CV-207-RWS
`
`COMPLAINT FOR DECLARATORY JUDGMENT
`AND DEMAND FOR JURY TRIAL
`
`Pursuant to 28 U.S.C. § 2201 and Rule 57 of the Federal Rules of Civil
`
`Procedure, Plaintiffs Foundation Food Group, Inc. and Prime-Pak Foods, Inc.
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`(collectively, “FFG”) file this Complaint for declaratory judgment, attorney’s fees,
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`and demand for jury trial against Defendant Selective Way Insurance Company
`
`(“Selective”), and allege as follows:
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`SUMMARY
`FFG owns and operates four poultry production plants in Gainesville,
`
`1.
`
`Georgia.
`
`1
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`
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE NORTHERN DISTRICT OF GEORGIA
`GAINESVILLE DIVISION
`
`FOUNDATION FOOD GROUP, INC.;
`PRIME-PAK FOODS, INC.;
`
`Plaintiffs,
`
`v.
`
`SELECTIVE WAY INSURANCE
`COMPANY,
`
`Defendant.
`
`CASE NO.
`
`2:21-CV-207-RWS
`
`COMPLAINT FOR DECLARATORY JUDGMENT
`AND DEMAND FOR JURY TRIAL
`
`Pursuant to 28 U.S.C. § 2201 and Rule 57 of the Federal Rules of Civil
`
`Procedure, Plaintiffs Foundation Food Group, Inc. and Prime-Pak Foods, Inc.
`
`(collectively, “FFG”) file this Complaint for declaratory judgment, attorney’s fees,
`
`and demand for jury trial against Defendant Selective Way Insurance Company
`
`(“Selective”), and allege as follows:
`
`SUMMARY
`FFG owns and operates four poultry production plants in Gainesville,
`
`1.
`
`Georgia.
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`1
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`Case 2:21-cv-00207-RWS Document 1 Filed 09/17/21 Page 2 of 27
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`2.
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`On and around January 28, 2021, a freezer in one of the poultry
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`production plants, Plant 4, suffered physical damage and malfunctioned, causing a
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`liquid nitrogen (LN2) overflow in the Plant 4 freezer room.
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`3.
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`4.
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`FFG employees were forced to evacuate Plant 4.
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`Six (6) FFG employees died as a result of the freezer incident (the
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`“Incident”), and several others suffered physical injuries.
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`5.
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`The Hall County Fire Department (“HCFD”) responded to the Incident
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`and took control of Plant 4.
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`6.
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`Federal government agencies launched investigations into the Incident
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`and took control of Plant 4 from the HCFD.
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`7.
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`Plant 4 was deemed an accident and crime scene; no one was allowed
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`to enter for several days, and FFG was prevented from operating for several weeks.
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`8.
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`As a result of the Incident, FFG suffered over $2,000,000 in property
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`loss, business income loss, and extra expense.
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`9.
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`FFG maintains commercial general property insurance for Plant 4 with
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`Selective.
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`10. FFG maintains the Selective Policy to cover risks like the January 28,
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`2021 Incident.
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`11. FFG promptly reported the Incident and its losses to Selective.
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`Case 2:21-cv-00207-RWS Document 1 Filed 09/17/21 Page 3 of 27
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`12. For the eight (8) months following the Incident, Selective has failed to
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`pay any amount to cover FFG’s losses.
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`13.
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`Instead of paying covered losses, Selective has drowned FFG in
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`requests for information and further explanations.
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`14. FFG has complied with all of Selective’s requests and produced over
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`2400 pages of Bates-labeled documents to Selective.
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`15. FFG also submitted sworn Proofs of Loss for its claims, as well as
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`follow-up narratives and further explanations requested by Selective.
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`16. Selective rejected FFG’s Proofs of Loss in total and continues to request
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`additional information from FFG.
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`17. By repeatedly failing to pay any amount towards FFG’s over
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`$2,000,000 in losses, Selective has breached its duties to FFG under the Policy.
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`18. Selective’s dilatory failure to pay FFG’s covered losses has caused
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`additional damage to FFG, including a forced sale of the company.
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`19. Without coverage from Selective, FFG continues and will continues to
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`suffer additional damages.
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`Case 2:21-cv-00207-RWS Document 1 Filed 09/17/21 Page 4 of 27
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`PARTIES, JURISDICTION, AND VENUE
`20. Plaintiff Foundation Food Group, Inc. is a Georgia corporation with its
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`principal place of business in Gainesville, Hall County, Georgia. Foundation Food
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`Group, Inc. is a citizen of Georgia.
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`21. Plaintiff Prime-Pak Foods, Inc. is a Georgia corporation with its
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`principal place of business in Gainesville, Hall County, Georgia. Prime-Pak Foods,
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`Inc. is a citizen of Georgia.
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`22. Defendant Selective is a New Jersey corporation with its principal place
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`of business in New Jersey. Selective is a citizen of New Jersey.
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`23. Selective is registered with the Georgia Secretary of State to transact
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`business in Georgia and does in fact transact business in Georgia. Selective may be
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`served through its registered agent Corporation Service Company, 2 Sun Court,
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`Suite 400, Peachtree Corners, Georgia 30092.
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`24. The amount in controversy exceeds $75,000.
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`25. The Court has diversity jurisdiction of this case under 28 U.S.C. § 1332.
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`26. A substantial part of the events or omissions giving rise to the claims in
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`this action occurred in this district and this division.
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`27. Defendants are subject to personal jurisdiction in this district and this
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`division.
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`Case 2:21-cv-00207-RWS Document 1 Filed 09/17/21 Page 5 of 27
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`28. Venue is proper in this district and this division pursuant to 28 U.S.C.
`
`§ 1391.
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`I.
`
`FACTUAL BACKGROUND
`THE UNDERLYING INCIDENT
`A. FFG’S BUSINESS AND THE LN2 FREEZER INSTALLATION
`29. FFG owns and operates four poultry processing plants in Gainesville,
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`Hall County, Georgia.
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`30. One of FFG’s processing plants, Plant 4, is located at 2076 Memorial
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`Park Drive, Georgia.
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`31. Plant 4 houses five (5) production lines (“Lines 1-5”).
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`32. Before 2020, FFG utilized an ammonia-based system in Plant 4 to
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`freeze poultry products.
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`33.
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`In 2020, FFG decided to switch from an ammonia-based freezer system
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`to a liquid nitrogen (“LN2”) freezer system.
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`34. FFG made this decision because LN2 freezer systems are more efficient
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`than ammonia-based freezer systems.
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`35. FFG hired Messer, LLC (“Messer”) to assist with its transition to an
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`LN2 freezer system.
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`36. Messer manufactures, installs, and maintains LN2 freezers for
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`production plants like FFG.
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`37. FFG worked with Messer for several months to investigate and prepare
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`for the transition to LN2 freezers.
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`38. On November 13, 2020, Messer installed LN2 immersion and spiral
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`freezers on Line 4 in Plant 4.
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`39. FFG started using the LN2 freezers on December 16, 2020.
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`40. FFG reported problems with the LN2 immersion freezer to Messer on
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`December 21 and 29, 2020, and January 4, 18, 26, and 27, 2021.
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`41. FFG’s reports about problems with the LN2 immersion freezer include
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`complaints that the “nitrogen dip level control [was] not working correctly,” the
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`freezer belt jammed, the LN2 “bath wasn’t right,” and the alarm activated because
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`the bath “was really low.”
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`42. On January 26 and 27, 2021, Messer sent a technician to work on the
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`immersion freezer issues.
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`B. THE JANUARY 28, 2021 INCIDENT
`43. On January 28, 2021, FFG began operating Line 4 at 7:00 AM.
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`44. At 8:14 am, Line 4 operation was stopped because of a report of “soft
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`product freezer down.”
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`45. The “soft product” complaint meant that the chicken product was not
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`fully frozen by the LN2 equipment on Line 4.
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`46. FFG expected a Messer delivery truck to refill exterior LN2 tanks that
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`fed the Line 4 freezers between 8:30 and 9:00 am.
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`47. Between 8:20 am and 10:00 am, the Line 4 immersion freezer
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`overflowed with LN2.
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`48. The LN2 overflow killed six FFG employees and injured several others.
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`49. The Hall County Fire Department (“HCFD”) responded to the Incident
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`and took control of Plant 4.
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`50. Plant 4 was deemed an accident and crime scene; no one was allowed
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`to enter and FFG was prevented from operating.
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`51. On January 29, 2021, HCFD passed control of Plant 4 to the U.S.
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`Occupational Safety and Health Administration (“OSHA”) and the U.S. Chemical
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`Safety and Hazard Investigation Board (“CSB”).
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`52. OSHA and CSB asked FFG to secure Plant 4 as an active accident
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`investigation.
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`53. FFG was not allowed to reenter Plant 4 until February 3, 2021, and even
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`then, FFG was only allowed inside Plant 4 with OSHA supervision.
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`54. FFG was not allowed to enter Plant 4 without supervision until after
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`signing an Evidence Site Control Agreement (“ESCA”) with OSHA and CSB on
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`February 5, 2021.
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`55. After reentering, FFG was forced to dispose of condemned chicken
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`inventory from Line 4 and the other Lines in Plant 4.
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`56. After February 5, 2021, FFG spent several days disposing of the
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`condemned chicken inventory and sanitizing the facility, in preparation to reopen
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`production.
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`C. FFG RESUMES PARTIAL PRODUCTION
`57. The HCFD did not conduct their annual inspection in September 2020.
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`58. After responding to the Incident, the HCFD asked to perform its
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`inspection before Plant 4 reopened.
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`59. The HCFD completed the annual inspection on February 4, 2021, citing
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`several violations.
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`60. The Fire Chief told FFG that normally FFG could continue operations
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`while correcting the violations. However, HCFD would not let FFG do so because
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`of the freezer Incident.
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`61. FFG corrected the HCFD violations and passed the annual inspection
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`on February 11, 2021.
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`Case 2:21-cv-00207-RWS Document 1 Filed 09/17/21 Page 9 of 27
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`62. As FFG approached being able to resume Plant 4 operations, the State
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`Fire Marshal took the position that nearly all boiler and pressure vessel certificates
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`were out of date.
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`63. FFG disputed the State Fire Marshall’s allegations. However, in an
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`effort to mitigate losses, FFG paid $8,000 in penalties and allowed the State Fire
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`Marshall to inspect the boilers and vessels on February 17 and 18, 2021.
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`64. The State Fire Marshal approved production to resume after the
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`inspection.
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`65. FFG notified the U.S. Department of Agriculture (“USDA”) and the
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`State Department of Agriculture that it planned to resume production on Monday,
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`February 22, 2021.
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`66.
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`In order for FFG to resume production, USDA had to agree to provide
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`an inspector.
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`67. On February 19, 2021, USDA told FFG that they were unwilling to
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`conduct inspections until they received certain reports from local and State Fire
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`Marshall and assurances from OSHA that the facility was safe.
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`68. FFG worked quickly to provide USDA with all requested information.
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`USDA agreed to provide an inspector on February 23, 2021.
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`69. FFG resumed operation of three out of the five lines in Plant 4 on
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`February 24, 2021.
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`D. CAUSE OF THE LN2 OVERFLOW
`70. FFG determined that the Line 4 LN2 immersion freezer suffered
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`damage to the dip tube and Resistance Temperature Detector (“RTD”).
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`71. The dip tube controls the flow of LN2 to the immersion freezer and
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`indicates via alarm when the LN2 is too high and at risk of overflowing.
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`72. An expert inspection after the Incident revealed that the dip tube was
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`bent, creating the overflow and release of LN2 on January 28, 2021.
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`73. At an April 10, 2021 inspection, the bent dip tube was replaced with a
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`new one.
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`74. FFG is still unable to use the LN2 immersion freezer.
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`75. On August 9, 2021, FFG resumed operation of Line 4 with using an
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`ammonia-based freezer system.
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`II.
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`THE POLICY
`A. COVERAGE SECTIONS
`76. FFG obtained Commercial Property Coverage Insurance, Policy No. S
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`2407451, from Selective for the Policy Period January 1, 2021 to January 1, 2022
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`10
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`Case 2:21-cv-00207-RWS Document 1 Filed 09/17/21 Page 11 of 27
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`(the “Policy”). [A true and correct copy of the Policy is attached hereto as Exhibit
`
`A.]
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`77. The Policy provides Business Personal Property (BPP) Coverage of up
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`to $19,435,551 and Business Income (BI) and Extra Expense (EE) Coverage up to
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`$6,950,000.
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`78. Per the Policy, Selective “will pay for direct physical loss of or damage
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`to Covered Property . . . caused by or resulting from any Covered Cause of Loss.”
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`Exhibit A, at 67.
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`79.
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`“Covered Property” includes “Business Personal Property.” Id.
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`80. And Business Personal Property includes “Stock.” Id.
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`81.
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`“Stock” means “merchandise held in storage for sale, raw materials and
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`in-process or finished goods, including supplies used in their packing or shipping,”
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`Id. at 82.
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`82. Per the Causes of Loss—Special Form, a Cause of Loss is covered
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`unless specifically excluded or limited by the Policy. Id. at 97.
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`83. The Policy also covers Business Income (BI) loss and Extra Expense
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`(EE) incurred to “[m]inimize the ‘suspension’ of business.” Policy, at 83.
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`Business Income means the:
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`a.
`Net Income (Net Profit or Loss before income
`taxes) that would have been earned or incurred; and
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`Case 2:21-cv-00207-RWS Document 1 Filed 09/17/21 Page 12 of 27
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`b.
`Continuing normal operating expenses incurred,
`including payroll.
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`Id. at 83.
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`84. The BI coverage section provides:
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`We will pay for the actual loss of Business Income you
`sustain due to the necessary “suspension” of your
`“operations” during the “period of restoration”. The
`“suspension” must be caused by direct physical loss of or
`damage to property at premises which are described in the
`Declarations . . . . The loss or damage must be caused by
`or result from a Covered Cause of Loss.
`
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`Id.
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`85. Per the Policy:
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`Extra Expense means necessary expenses you incur during
`the “period of restoration” that you would not have
`incurred if there had been no direct physical loss of
`damage to property caused by or resulting from a Covered
`Cause of Loss.
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`Id.
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`
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`86. The Policy contains Extended BI Coverage that begins “on the date
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`property . . . is actually repaired, rebuilt or replaced and ‘operations’ are resumed;”
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`and ends on the earlier of:
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`The date you could restore your “operations”, with
`reasonable speed to the level which would generate the
`business income amount that would have existed if no
`direct physical loss or damage had occurred; or
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`Case 2:21-cv-00207-RWS Document 1 Filed 09/17/21 Page 13 of 27
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`[180] consecutive days after the date determined in (1)(a)
`above.
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`Id. at 85, 90 (indicating that the number “60” in the Extended BI Coverage Section
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`should be replaced by the number shown on the Declarations for this Optional
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`Coverage), 64 (showing that the ElitePac Schedule Extended Period of Indemnity is
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`180 days).
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`87. The Policy defines “period of restoration” as the period of time that:
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`Begins:
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`(1) 72 hours after the time fo direct physical loss or
`damage for BI Coverage; or
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`(2) immediately after the time of direct physical loss or
`damage for EE Coverage;
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`caused by or resulting from any Covered Cause of Loss at
`the described premises; and
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`Ends on the earlier of:
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`(1) The date when the property at the described
`premises should be repaired, rebuilt or replaced with
`reasonable speed and similar quality; or
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`(2) The date when business is resumed at a new
`permanent location.
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`Id. at 91.
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`Case 2:21-cv-00207-RWS Document 1 Filed 09/17/21 Page 14 of 27
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`88. The Business Income Coverage section includes a Coinsurance
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`Condition. However, the Coinsurance Condition does not apply if the Insured
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`activates the Business Income Agreed Value (“BIAV”) Optional Coverage. To
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`activate the BIAV Optional Coverage:
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`A Business Income Report/Work Sheet must be submitted
`to [Selective] and must show financial data for your
`“operations”:
`
`a.
`During the 12 months prior to the date of the Work
`Sheet; and
`
`b.
`Estimated for the 12 months immediately following
`the inception of this Optional Coverage
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`[and]
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`The Declarations must indicate that the Business Income
`Agreed Value Optional Coverage applies, and an Agreed
`Value must be shown in the Declarations. The Agreed
`Value should be at least equal to:
`
`a.
`The Coinsurance percentage shown
`Declarations; multiplied by
`
`b.
`The amount of Net Income and operating expenses
`for the following 12 months you report on the Work Sheet.
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`the
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`in
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`Id. at 90.
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`89.
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`If the BIAV Optional Coverage is activated, the Coinsurance Condition
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`is suspended. But Selective will reinstate that Additional Condition, Coinsurance,
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`automatically if the insured does not submit a new Work Sheet and Agreed Value
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`Case 2:21-cv-00207-RWS Document 1 Filed 09/17/21 Page 15 of 27
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`within 12 months of the effective date of the BIAV Optional Coverage or when the
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`insured requests a change in the BI limit of insurance. Id.
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`90. FFG submitted a BI Worksheet to Selective in January 2020.
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`91. The Policy Declarations indicate that the BIAV Optional Coverage
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`applies. Id. at 46.
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`92. FFG submitted an updated BI Worksheet to Selective on June 2, 2021.
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`B. SYSTEMS POWER PAC ENDORSEMENT- SPOILAGE COVERAGE
`93. The Policy also contains a Systems Power Pac Endorsement. Id. at 107.
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`94. The Systems Power Pac Endorsement provides Additional Coverage
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`for Equipment Breakdown. Per the Systems Power Pac Endorsement:
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`The term Covered Cause of Loss includes the Additional
`Coverage Equipment Breakdown as described and limited
`below.
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`We will pay for direct physical damage to Covered
`Property that is the direct result of an “accident.” As used
`in this Additional Coverage, “accident” means a fortuitous
`event that causes direct physical damage to “covered
`equipment.” The event must be one of the following:
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`a. Mechanical breakdown, including rupture or bursting
`caused by centrifugal force.
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`Id.
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`95.
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`“Covered equipment” includes “Covered Property” that “generates,
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`transmits or utilizes energy; . . . . Id. at 110.
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`96. The Systems Power Pac Endorsement provides Spoilage coverage as
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`follows:
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`We will pay:
`
`a.
`For physical damage to “perishable goods” due to
`spoilage;
`
`b.
`For physical damage to “perishable goods” due to
`contamination from the release of refrigerant, including
`but not limited to ammonia;
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`c.
`Any necessary expenses you incur to reduce the
`amount of loss under this coverage to the extent that they
`do not exceed the amount of loss that otherwise would
`have been payable under the coverage.
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`If you are unable to replace the “perishable goods” before
`its anticipated sale, the amount of our payment will be
`determined on the basis of the sales price of the
`“perishable goods” at the time of the “accident,” less
`discounts and expenses you otherwise would have had.
`Otherwise, our payment will be determine in accordance
`with the Valuation condition.
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`The most we will pay for loss, damage or expense under
`this coverage is $250,000 unless otherwise shown in a
`Schedule or the Spoilage Limit endorsement.
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`Id. at 107-08.
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`97. The System Power Pac Endorsement further provides that the BI and
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`EE coverages also apply “to the direct result of an ‘accident.’” Id. In other words,
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`the System Power Pac Endorsement extends the BI and EE coverages in the Policy
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`16
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`Case 2:21-cv-00207-RWS Document 1 Filed 09/17/21 Page 17 of 27
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`to include coverage for BI and EE losses caused by the mechanical breakdown of
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`covered equipment.
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`C. ELITEPAC PROPERTY EXTENSION ENDORSEMENT
`98. The Policy also contains an ElitePac Property Extension Endorsement.
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`Id. at 113.
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`99. The ElitePac Endorsement includes $25,000 coverage for Spoilage as
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`follows:
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`You may extend the insurance provided by Your Business
`Personal Property to apply to direct physical loss or
`damage to Covered Property caused by or resulting the
`following:
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`Breakdown or Contamination, meaning:
`
`a.
`Change in temperature or humidity resulting from
`mechanical breakdown or mechanical
`failure of
`refrigerating, cooling or humidity control apparatus or
`equipment, only while such equipment or apparatus is at
`the described premises;
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`and
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`b.
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`[or]
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`Power Outage, meaning change in temperature or
`humidity resulting from complete or partial interruption of
`electrical power, either on or off the described premises,
`due to conditions beyond your control.
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`Contamination by the refrigerant.
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`Case 2:21-cv-00207-RWS Document 1 Filed 09/17/21 Page 18 of 27
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`Id. at 121.
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`100. The ElitePac Property Extension Endorsement also includes extended
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`BI coverage and EE coverage. Id. at 116, 125.
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`III.
`TENDER OF CLAIMS AND COVERAGE COMMUNICATIONS
`101. FFG promptly reported the Incident to Selective, and Selective
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`acknowledged receipt of the claim by letter on February 26, 2021. [A true and correct
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`copy of the February 26, 2021 Letter from Jasmine Bruce and Ron Rudow
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`(Selective) to Kathy Ford (FFG) is attached hereto as Exhibit B.]
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`102. Selective also provided FFG with Proof of Loss (POL) forms to use for
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`the claim and asked FFG to provide any information regarding government orders
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`or communications to temporarily close the plant and/or dispose of product.
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`103. Selective also requested information from FFG in a February 10, 2021
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`email from Ron Rudow and a February 24, 2021 letter from Larry Stine.
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`104. On March 18, 2021, Selective, through counsel, issued a supplemental
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`request for information (RFI) to FFG. [A true and correct copy of the March 18,
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`2021 RFI Letter is attached hereto as Exhibit C.]
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`105. In the March 18, 2021 RFI, Selective requested seventy (70) additional
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`categories of documents and information about FFG’s claim.
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`106. FFG responded to all of Selective’s RFIs.
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`107. Between the Incident and May 2021, FFG provided over 2400 Bates-
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`labeled documents to Selective in response to Selective’s RFIs.
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`108. On May 24, 2021, FFG provided Selective with sworn POLs for its BPP
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`and EE claims. [True and correct copies of the POLs for the BPP and EE claims are
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`attached hereto as Exhibit D and Exhibit E.]
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`109. In the May 24, 2021 POLs, FFG claimed $465,711.48 in BPP for
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`condemned and disposed chicken product inventory.
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`110. FFG also claimed $1,247,062.84 in EE incurred from January through
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`April 2021.
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`111. On May 28, 2021, Selective issued a Reservation of Rights (ROR)
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`Letter with its preliminary coverage analysis. [True and correct copies of the May
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`28, 2021 ROR and attached Exhibits A-F are attached hereto as Exhibit F and
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`Exhibit G.]
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`112. On June 15, 2015, Selective issued a letter to FFG, rejecting FFG’s BPP
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`and EE POLs. [A true and correct copy of the June 15, 2021 Rejection Letter is
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`attached hereto as Exhibit H.]
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`113. On July 16, 2021, FFG responded and provided additional information
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`to Selective. [True and correct copies of FFG’s July 16, 2021 Response Letter;
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`19
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`Case 2:21-cv-00207-RWS Document 1 Filed 09/17/21 Page 20 of 27
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`Attachment 1 to that Letter; and Responses to Exhibits A-F are attached hereto as
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`Exhibit I, Exhibit J, and Exhibit K.]
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`114. With its July 16, 2021 Response, FFG provided a narrative regarding
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`the condemned and disposed chicken inventory, as well as detailed responses to
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`Selective’s coverage analysis. See Exhibits J & K.
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`115. FFG also submitted a sworn POL for $1,648,873 in BI Losses incurred
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`from February 2021 through April 2021. [A true and correct copy of the BI POL is
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`attached hereto as Exhibit L.]
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`116. On August 10, 2021, Selective issued a response letter to FFG. [A true
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`and correct copy of the August 10, 2021 Response Letter is attached hereto as
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`Exhibit M.]
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`117. Selective also rejected FFG’s BI POL by separate letter on this same
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`date. [A true and correct copy of the August 10, 2021 Rejection Letter is attached
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`hereto as Exhibit N.]
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`IV.
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`THE POLICY PROVIDES COVERAGE FOR FFG’S LOSSES
`RESULTING FROM THE INCIDENT
`A. THE POLICY PROVIDES COVERAGE FOR FFG’S BPP LOSSES
`118. The Business Personal Property Coverage in the Policy provides
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`coverage for FFG’s losses incurred from the physical loss of the chicken inventory.
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`20
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`Case 2:21-cv-00207-RWS Document 1 Filed 09/17/21 Page 21 of 27
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`119. FFG suffered direct physical loss of and damage to Covered Property
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`caused by and resulting from a Covered Cause of Loss.
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`120. In particular, FFG suffered the direct physical loss of and damage to
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`chicken inventory that was on Line 4 and on the other Lines in Plant 4 at the time of
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`the Incident.
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`121. FFG’s loss of the chicken inventory was caused by and resulted from a
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`Covered Cause of Loss.
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`122. FFG’s loss of the chicken inventory does not fall within any of the
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`exclusions in the Policy.
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`123. The System Power Pac Spoilage Coverage also provides coverage for
`
`up to $250,000 of FFG’s losses incurred from the physical loss of the chicken
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`inventory.
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`124. In particular, FFG suffered the direct physical loss of and damage to
`
`chicken inventory due to an accident, or mechanical breakdown, of the LN2
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`immersion freezer.
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`125. The ElitePac Property Extension Endorsement Spoilage Coverage also
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`provides coverage for up to $25,000 of FFG’s losses incurred from the physical loss
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`of the chicken inventory.
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`21
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`Case 2:21-cv-00207-RWS Document 1 Filed 09/17/21 Page 22 of 27
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`126. In particular, FFG suffered direct physical loss of and damage to the
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`chicken inventory due to a “change in temperature or humidity resulting from
`
`mechanical breakdown or mechanical failure of refrigerating, cooling or humidity
`
`control apparatus or equipment, only while such equipment or apparatus is at the
`
`described premises” and/or a “[p]ower outage, meaning change in temperature or
`
`humidity resulting from complete or partial interruption of electrical power, either
`
`on or off the described premises, due to conditions beyond your control.” Exhibit A,
`
`at 121.
`
`127. FFG submitted a POL for the lost chicken inventory to Selective and
`
`complied with all other conditions precedent for Coverage.
`
`128. Selective wrongfully rejected the BPP POL and has refused to pay any
`
`amount to cover FFG’s loss of the chicken inventory.
`
`B. FFG SUFFERED COVERED BUSINESS INCOME LOSSES
`129. FFG suffered business income losses as a result of a necessary
`
`suspension of its operations caused by direct physical loss of and damage to FFG’s
`
`property that was caused by a Covered Cause of Loss.
`
`130. Specifically, FFG was forced to suspend its operations due to the
`
`physical damage and mechanical breakdown of the LN2 immersion freezer on
`
`January 28, 2021.
`
`
`22
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`
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`Case 2:21-cv-00207-RWS Document 1 Filed 09/17/21 Page 23 of 27
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`131. After the Incident, FFG worked diligently and with reasonable speed to
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`resume operations.
`
`132. FFG was able to partially resume operations on February 26, 2021.
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`133. After the Incident, FFG worked with reasonable speed to repair the
`
`physical damage to the LN2 immersion freezer.
`
`134. The physical damage to the LN2 immersion freezer was repaired on
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`April 10, 2021.
`
`135. The period of restoration for purposes of determining FFG’s covered
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`BI losses runs through at least April 10, 2021.
`
`136. The Co-Insurance Condition does not apply to FFG’s BI claim.
`
`137. FFG submitted a POL for the BI losses it incurred as a result of the
`
`Incident and complied with all other conditions precedent for coverage.
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`138. Selective wrongfully rejected the BI POL and has refused to pay any
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`amount to cover FFG’s BI losses.
`
`C. FFG IS ENTITLED TO COVERAGE FOR EXTRA EXPENSES IT INCURRED
`AS A RESULT OF THE INCIDENT
`139. During the period of restoration, FFG incurred expenses that FFG
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`would not have incurred if there had been no direct physical loss of and damage to
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`Covered Property caused by and resulting from a Covered Cause of Loss.
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`
`23
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`
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`Case 2:21-cv-00207-RWS Document 1 Filed 09/17/21 Page 24 of 27
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`140. FFG submitted a POL to Selective with line item Extra Expenses that
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`FFG incurred as a result of the Incident and complied with all other conditions
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`precedent for coverage.
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`141. FFG provided explanations of the expenses, as well as supporting
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`invoices and other documentation.
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`142. Selective rejected the POL and refused to pay any amount to cover extra
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`expenses that FFG incurred as a result of the Incident.
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`COUNT I: DECLARATORY JUDGMENT
`143. FFG repeats and realleges the allegations set forth in paragraphs 1
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`through 144 of this Complaint as if fully restated herein.
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`144. An actual controversy of a justiciable nature presently exists between
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`FFG and Selective regarding Selective’s obligation to reimburse FFG for losses FFG
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`incurred as a result of the Incident.
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`145. FFG seeks a declaratory judgment pursuant to 28 U.S.C. § 2201 to
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`resolve the controversy.
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`146. FFG seeks a declaration that Selective is required to reimburse FFG for
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`business personal property losses, business income losses, and extra expenses that
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`FFG incurred as a result of the Incident.
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`24
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`Case 2:21-cv-00207-RWS Document 1 Filed 09/17/21 Page 25 of 27
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`147. The issuance of a declaratory judgment by this Court will terminate the
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`existing controversy between the parties.
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`COUNT II: BREACH OF CONTRACT
`148. FFG repeats and realleges the allegations set forth in paragraphs 1
`
`through 149 of this Complaint as if fully restated herein.
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`149. Per the Policy, Selective has a contractual duty to pay FFG for business
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`personal property losses, business income losses, and extra expenses that FFG
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`incurred as a result of the Incident.
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`150. FFG submitted sworn POLs for its losses and complied with all other
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`conditions to receive payment under the Policy.
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`151. Selective has breached its duty to pay FFG rejecting the POLs in total
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`and failing to pay any amount towards FFG’s claimed losses.
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`152. FFG has suffered damages as a result of Selective’s breach.
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`COUNT III: ATTORNEY’S FEES
`153. FFG repeats and realleges the allegations in paragraphs 1 through 154
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`of this Complaint as if fully restated herein.
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`154. Selective has acted in bad faith, caused FFG unnecessary trouble and
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`expense and been stubbornly litigious. Accordingly, FFG is entitled to recover from
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`25
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`Case 2:21-cv-00207-RWS Document 1 Filed 09/17/21 Page 26 of 27
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`Selective reasonably attorney’s fees and costs, pursuant to O.C.G.A. § 13-6-11, and
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`as otherwise permitted by law.
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`DEMAND FOR JURY TRIAL
`FFG hereby demands a jury trial on all issues so triable.
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`PRAYER FOR RELIEF
`WHEREFORE, FFG prays for relief as follows:
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`a. FFG requests that this Court enter judgment in favor of FFG and against
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`Selective on all of FFG’s claims;
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`b. FFG requests a declaration that Selective must reimburse FFG for
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`losses that FFG incurred as a result of the Incident;
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`c. FFG requests that the Court hold the Selective has breached its
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`obligations under the Policy by failing to reimburse FFG for any of the
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`losses that FFG incurred as a result of the Incident; and
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`d. FFG requests such other and further relief as this Court deems just and
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`proper.
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`Respectfully submitted, this 17th day of September, 2021.
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`
`
`/s/D. Austin Bersinger
`D. Austin Bersinger
`Georgia Bar No. 144792
`BARNES & THORNBURG LLP
`3475 Piedmont Road N.E., Suite 1700
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`26
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`Case 2:21-cv-00207-RWS Document 1 Filed 09/17/21 Page 27 of 27
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`Atlanta, Georgia 30305
`Tel. (404) 264-4082
`Fax (404) 264-4033
`Email: austin.bersinger@btlaw.com
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`Attorneys for Plaintiff
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`27
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