Idahoan Foods takes insurer to court over 2016 potato plant fire

The Idaho Supreme plant in Firth, Idaho had a major fire on Sept. 5, 2016, which resulted in a more than three-month closure (Courtesy: Bingham County Sheriff's Office)

Dehydrated potato manufacturer Idahoan Foods has filed lawsuit related to a 2016 fire at the Idaho Supreme potato dehydration plant in Firth.

In the suit, first filed in May, Idahoan Foods alleges that its insurer breached contracts and fair dealing requirements. Idahoan Foods contracts with Idaho Supreme to supply dehydrated potatoes.

The Idaho Supreme plant had a major fire on Sept. 5, 2016, which resulted in a more than three-month closure. During that time Idahoan Foods, an Idaho Falls-based company that distributes dehydrated mashed potatoes and similar products nationally, alleges it suffered nearly $3.6 million in losses due to the shutdown.

The company alleges it was insured against such losses by Allied World Assurance Company, but when the time came to pay out the claim, the insurer wouldn’t agree to pay for all of the covered losses.

Idaho Supreme Fire

Idaho Supreme Plant

The fire on September 5, 2016 at at the Idaho Supreme plant in Firth occurred in the part of the plant where mechanical operations occur and the potatoes are received.

Fire officials said that fire was caused by a spark from some welding being done that ignited the cellar’s insulation.

No one was injured in the blaze.

Source: Idaho State Journal

The suit, still in its early stages, doesn’t say how much of the $3.6 million claim Allied agreed to pay. The suit seeks an uncertain amount of damages to be determined at trial.

In its answer to the complaint — which doesn’t refute each claim in detail, as is typically the case early in a civil suit — Allied states that it has paid about $540,000 for the claims it believes are covered under the policy

Idahoan also alleges Allied hired two claims management firms — McLarens Global Claims Service and Hagen, Streiff, Newton and Oshiro — with the aim of limiting the claims Idahoan could recover.

Idahoan Foods alleges breach of contract, breach of good faith and fair dealing, bad faith breach of duty, and negligent breach of duty.

Originally filed in Bonneville County, the suit may be moved to federal court following a motion by Allied, which alleges that the amount of claimed damages is likely to exceed the $75,000 maximum needed to keep the case in state court.