The Enid News and Eagle, Enid, OK

Local news

May 24, 2013

Settlement reached in Zaloudek Grain auger accident

ENID, Okla. — The families of two teens who lost legs in the auger of a Kremlin grain elevator two years ago and the owners of the grain company have reached an agreement to settle a multi-million dollar lawsuit.

Brad Gungoll, the Oklahoma City lawyer representing the families of Tyler Zander and Bryce Gannon in a negligence lawsuit against Zaloudek Grain Co. and its shareholders, said Friday morning the agreement was reached about 10:30 p.m. Thursday during a court-ordered settlement conference held at Gungoll’s office.

Trial in the matter had scheduled to begin June 17.

Gungoll said he spoke Friday morning with Joseph Farris, lead attorney for Zaloudek Grain, and agreed that Gungoll would respond to the News & Eagle’s inquiry about the status of the case. Gungoll declined to answer other questions about the settlement.

“The terms are confidential,” Gungoll said.

Gungoll did say the lawsuit will not be formally dismissed until a number of procedural matters are finished.

In the lawsuit, the families contended six counts of negligence. In addition to past and future medical expenses, they sought punitive damages from the company.

Court documents show that for Tyler Zander, they sought $4.6 million for future medical bills and expenses related to the accident, up to $56.7 million for lost future earning capacity, and an unspecified amount for pain and suffering. For his parents, Lee and Rhonda Zander, they sought $1.6 million in medical expenses incurred and $30,000 for lost wages.

For Bryce Gannon, they sought $3.5 million for future medical bills and expenses related to the accident, $234,000 for lost future earning capacity, and an unspecified amount for pain and suffering. For his mother, Cheri Gannon, they sought $794,000 in medical expenses incurred and $10,000 in lost wages.

Court-ordered mediation between the parties took place May 6 and 7.

The agreement reached in the negligence lawsuit does not settle all of the legal wrangling taking place. Days after the Aug. 4, 2011, accident, Zaloudek Grain filed a breach of contract lawsuit against workers’ compensation carrier CompSource Oklahoma in Oklahoma County District Court. CompSource refused to cover the accident based on the fact it had canceled Zaloudek’s insurance months earlier because the grain company failed to timely provide information needed for audit. The grain company had worked through the audit and reapplied for coverage, but the new application reached CompSource the day after the accident.

• Although the original workers’ compensation lawsuit has not been resolved, a new one has been filed. On March 29, Zaloudek Grain Co., James Harris, Paige Harris, Peggy Harris, Gene Iven, Jack Zaloudek, Robert Zaloudek, Thomas Zaloudek and William Zaloudek filed a new lawsuit in Oklahoma County District Court against CompSource Oklahoma. The second lawsuit also claims breach of contract.

Other lawsuits have arisen from the accident as well:

• On April 12, Nationwide Agribusiness Insurance Co. filed in U.S. District Court a lawsuit against 20 people connected to the negligence lawsuit. Nationwide seeks a court ruling that the insurance company does not have to pay any expenses related to the negligence lawsuit.

• On May 8, Jack Zaloudek, Gene Iven and Mary Ann Iven, all shareholders of Zaloudek Grain, filed a lawsuit in Garfield County District Court against Farmers Alliance Mutual Insurance Co., Messer Bowers Co., and Baker Harris Insurance Agency. The plaintiffs seek more than $75,000 from the insurance company and the agents who sold them policies. They contend breach of contract, bad faith and negligence on the part of Farmers Alliance.

Oklahoma City lawyer David Donchin, who filed the petition on behalf of the plaintiffs, wrote in the petition the plaintiffs notified Farmers when they were served a summons in the negligence lawsuit, but Farmers has not honored the policies.

“Farmers Alliance Mutual Insurance Company failed or refused to pay and honor policy benefits due and owing,” Donchin wrote.

Farmers failed to provide a defense in the lawsuit, failed to make a meaningful attempt to settle the litigation, repeatedly threatened to sue Zander and the Ivens, and failed to settle within the policy limits when demanded that they do so, Donchin wrote.

• On May 9, Peggy Harris filed her own lawsuit against Farmers Alliance and Baker Harris Hopkins Insurance Agency. Harris and her husband, James Harris, bought a homeowners and a farm owners policy through Baker Harris Hopkins.

Oklahoma City lawyer Judy Hamilton Morse, who filed Harris’ petition, wrote that even though Harris was earlier dismissed from the negligence lawsuit, her dismissal from the lawsuit could be changed or appealed later.

Jim Patton, superintendent of Kremlin-Hillsdale Schools, said he recently saw Gannon.

“He is attending Northwestern Oklahoma State University at Alva,” Patton said. “He said his grade point average was good this year and he’s retained his scholarships for next year.”

Patton said he believes Gannon is “doing OK under the circumstances” and will be spending the summer at home. 

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