Stuttgart Mess Leads to Lawsuit for Mid-South Industrial

A contractor has been hit with a $2.6 million lawsuit for allegedly failing to clean up after itself at a Stuttgart food plant in 2013.

Continental Insurance Co. and Transportation Insurance Co., both of Chicago, have sued Mid-South Industrial Inc. of Bells, Tennessee, in U.S. District Court in Pine Bluff. The carriers are seeking the $2.6 million it paid on behalf of its policyholder, Sage V Foods LLC of Boulder, Colorado.

The alleged trouble began when Sage V needed some work done at its Stuttgart plant in 2013, according to the lawsuit. Sage hired Mid-South to do the work, which included rerouting a discharge chute on a surge hopper tank that Mid-South had installed.

But the insurance companies allege that Mid-South failed “to clean its work after cutting and grinding.” That allegedly left small steel balls behind.

In late July 2013, one of Sage’s customers, Nestle Nutrition N.A., “discovered small metal particles in a lot of rice flour it had purchased from Sage and reported it to Sage,” the lawsuit said. The contaminated rice was traced to the hopper tank that Mid-South worked on, the lawsuit said.

Nestle submitted a claim to Sage for $3.85 million, which included lost sales, inventory and destruction costs.

Nestle eventually settled the claim for $2.6 million: $1 million was paid by Continental and $1.6 million by Transportation.

The insurance companies are seeking that amount plus other money for alleged damages tied to the claim.

An official from Mid-South didn’t return a call.