Ag company settles lawsuit over chemical spills

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Frank Schultz
Thursday, September 12, 2013

MADISON—Three companies will pay the state $774,000 to settle a lawsuit that arose out of the cleanup of agricultural chemical spills in Edgerton more than a decade ago.

The state Department of Justice announced the settlement Thursday.

Defendants Agro Distribution, Agro's owner Agriliance and their insurer, Chartis Specialty Insurance, deny fault and do not admit liability, according to a news release.

The story began in 1999 when state agriculture department investigators collected soil samples at Agro's fertilizer center not far from Edgerton's downtown, at 122 W. Lawton St., court documents indicate.

In a letter in 2000, the investigators asked the company to investigate nitrogen releases at the site, including areas where fertilizers were loaded and where equipment had been parked.

The letter suggests the contamination might have resulted from years of use and not from a single, large spill.

The company operated the site as a fertilizer and pesticide distributor and commercial applicator from 1999 to 2001, court documents indicate. The company's ownership has changed hands several times, with owners including Cenex/Land O'Lakes.

Documents indicate cleanup costs included drilling, excavating, and demolishing of buildings. The owners spent more than $500,000 for the work, court documents indicate.

Even the buildings' concrete foundations were removed in 2005 so the soil underneath could be cleaned up.

The state says Agro and its owners paid the cleanup costs and in 2004 sought reimbursement from the state's Agricultural Chemical Cleanup Program Fund. The fund was set up to cover partial costs of cleanups that insurance does not pay. The state paid $215,167.

In August 2006, the insurance company also paid for the cleanup, issuing two checks totaling $172,893 and committing to paying more than $400,000, the state alleged.

In December 2006, Agro applied for more money from the cleanup fund for additional costs in Edgerton and received $92,492.

Agro's application for the second amount stated that it expected an insurance settlement, but the settlement had not occurred.

“That representation was false, deceptive and misleading,” the state's complaint states.

Some of the same costs the insurer had agreed to pay were listed as costs in Agro's application for state money, the complaint states.

In June 2011, Agro's then-half-owner Land O'Lakes disclosed information showing that the December 2006 application contained false information, the complaint states.

Because the companies had violated the law in the Edgerton case, they were not eligible for later payments from the cleanup fund, the state contended. The companies had received $611,198 in state money for cleanups at various Wisconsin sites.

In all, the state's complaint listed violations that it said should result in payments of $1.56 million.

The state said the companies also were eligible for fines of $10 to $5,000 for each day of ongoing violation.

The settlement comes in two amounts. Agro, Agriliance and Chartis will return $500,000 to the cleanup fund. Agro and Agriliance will forego an additional $224,000 that the fund otherwise would have paid to them as reimbursements for cleanups at other sites.

Those sites are scattered around the state. They include two reimbursements for a site or sites the defendants operated in Clinton.

The fund received applications for reimbursements in Clinton in 2007 and 2010, in the amounts of $1,641 and $87,594, respectively, according to a court document.

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