Kunde, Vintage Wine Estates sue insurance carriers for $19 million

Seeking compensation from its insurance carriers for smoke-tainted wine damaged by smoke in the October, 2017 fires, Kunde Enterprises and Vintage Wine Estates filed a $19 million lawsuit in Sonoma County this fall, and will go before a court in January, according to court documents.

“We’re not going to let the insurance companies push us around,” said Pat Roney, CEO and founding partner of Vintage Wine Estates in Santa Rosa. Roney is also a personal shareholder in Kunde.

Smoke filled the air during the 2017 fires and permeated fermenting wine at Kunde and some of Vintage’s properties in Sonoma, Napa and Mendocino counties, Roney said.

Kunde is seeking $7 million and Vintage is seeking $12 million. Roney said wine was damaged at Kunde’s Kenwood property and at several Vintage-owned wineries including Clos Pegas and Girard in Calistoga.

There are seven insurance companies named in the suit: National Surety Corporation, RSA Insurance Group, Liberty Specialty Markets Insurance Group, Navigators Underwriting Agency, Brit Global Specialty, Travelers Marine Cargo, and certain underwriters at Lloyd’s London.

Melissa Dubbs, the attorney representing the insurance carriers, declined to comment.

The insurance companies refused to pay the claims because they say the smoke taint occurred in the vineyard while the grapes were still on the vine and that they are not obligated to pay under the wineries’ insurance policies.

Roney said the wineries keep meticulous records on when grapes were harvested, and they have documentation proving that the grapes had been picked prior to the fires and resulting smoke.

Vintage and Kunde “have several witnesses” that can attest to the harvest dates, Roney said.

“(The insurance carriers) are just trying to not pay out, they do not want to assume the responsibility,” he said.

“We know we’re not the only ones with smoke taint in their wine,” Roney said, and the smaller wineries do not have the “means to fight back.”

“We want to set the precedent,” he said.

Jeff Kunde, chairman of Kunde Family Winery, declined to comment and referred all questions to Roney.

National Surety filed a motion in the U.S. District Court in San Francisco seeking to have the case transferred to the federal court system due to the amounts of the claims, and that hearing – originally set for Nov. 25 – will be held in Oakland District Court on Dec. 20, Dubbs said.

The Sonoma County Court set a Jan. 14 date for case management review.

The issue of smoke-tainted grapes can be costly. This past summer, Westside Winery of Healdsburg filed suit against a New York-based distributor over the distributor’s rejection of nearly 5,000 cases of wine due to alleged smoke taint from California wildfires, according to the New York Post. The lawsuit claims the winery is owed $400,000 for the wine.

Contact Anne at anne.ernst@sonomanews.com.