Union Sugar Plant Hillshire Brands trial exhibit

The town of Betteravia surrounded the Union Sugar plant west of Santa Maria in the 1950s.

On Aug. 18, two days after an Alameda County jury awarded an Orcutt family $13 million in a wrongful death suit against Hillshire Brands Co., the company filed a complaint against its own insurers.

Orcutt resident Mark Lopez died two years ago at the age of 61, after contracting mesothelioma as a result of asbestos exposure at the Union Sugar Plant in Betteravia, a small company town west of Santa Maria which was owned by Hillshire Brands Co.

His family's attorney, Jeffrey Kaiser, of Kaiser Gornick LLP in Walnut Creek, filed the lawsuit in 2015. 

Hillshire Brands is seeking indemnity coverage for liability arising out of the Lopez suit, bad faith refusal and breach of policy contract from their insurers, California Casualty Co. (CNA) and American Home Assurance Company (American Home).  

A spokesperson for Hillshire/Tyson Foods said in an email Friday that the company will not comment on the pending lawsuit. Representatives for American Home and CNA could not be reached for comment by press time.

While never stating total damages sought, Hillshire claims in the suit that they were entitled to additional punitive/exemplary damages because their insurers refused to help pay the Lopez family their respective portions of the $13 million.

Hillshire also accused CNA of breaching their contract of good faith, stating that CNA had several chances to settle the Lopez suit for an amount within its policy limits, and that they failed to participate in the two mandatory settlement conferences by sending counsel that had no authority to assist in settling. 

The suit alleges that prior to the Lopez verdict, Hillshire asked CNA participate in settlement discussions in June and July, and both times CNA sent "a rep who didn't have authority to assist in the Lopez suit." 

Furthermore, "CNA refused to engage or meaningfully participate to limit its own and its insured's exposure to damages," according to the complaint.

"At one of these conferences, the Lopez suit plaintiffs made an offer to settle for an amount within policy limits, and CNA failed to accept the demand," Hillshire wrote. 

Hillshire updated CNA on Aug. 11 about the status of the trial and a possible verdict, then urged CNA again to start seriously discussing settlement offers with the Lopez family, and help "fund a portion of a proposed settlement with the Lopez suit plaintiff," to alleviate monetary damage for the both of them.

However, CNA failed to assist Hillshire in settling the suit before the jury's verdict, according to the complaint.

On Aug. 16, the jury attributed 100 percent liability to Hillshire, and ordered them to pay all of the $13 million to the Lopez family.

Both insurance companies have 30 days to file a response to the complaint. 

Gina Kim covers crime and courts for Santa Maria Times. Follow her on Twitter @gina_k210