The Tenth Circuit Court of Appeals issued its opinion in Leprino Foods Co. v. Factory Mutual Ins. Co. on Wednesday, July 27, 2011.
The Tenth Circuit affirmed the district court’s decision. Petitioner is a “Denver-based mozzarella manufacturer that customarily stores its products in third-party warehouses. In one of these warehouses, flavoring compounds derived from nearby-stored fruit products contaminated a large quantity of cheese.” Petitioner’s “all-risk” insurance policy with Respondent excluded contamination unless it was caused by “other physical damage.” When coverage was disputed, a jury determined the contamination was caused by other physical damage and therefore covered by the insurance policy. On appeal, Respondent claims the district court erred in several ways.
Respondent contends that the verdict is supported by insufficient evidence because Colorado law requires expert testimony, as opposed to lay testimony, to prove causation. The Court, however, concluded that Petitioner did in fact present sufficient expert testimony on this element. Respondent also challenges the district court’s jury instructions and its evidentiary ruling on Petitioner’s revised cold-storage guidelines. But, the Court did not find the instructions or ruling to be erroneous. The Court did agree with Respondent that Petitioner’s damages should be reduced by its settlement with the warehouse, so long as the setoff does not include the attorneys’ fees that Petitioner incurred in pursuing that litigation.