California’s Jackson Family Wines sues insurer over $430 million in wildfire damage claims

Jackson Family Wines, one of the largest U.S. vintners, has sued the insurer of properties damaged in North Bay wildfires in the past five years, alleging that the company is delaying payments on more than $430 million in claims.

The Santa Rosa-based producer of brands such as Kendall-Jackson, Arrowood and Matanzas Creek Winery alleges in its federal court filing that Zurich Insurance Co. has paid less than $70 million so far on policy claims from the Nuns, Tubbs and Pocket fires of 2017; the Kincade Fire of 2019; and the Glass Fire of 2020.

That would amount to about 16% of the losses for which the wine company said it submitted invoices and proposals.

The October 2017 fires burned 111,000 acres in Sonoma and Napa counties, killed 40 people and destroyed over 6,000 homes. The Kincade Fire in October–November 2019 burned nearly 78,000 acres in northeastern Sonoma County. The Glass Fire in September–October 2020 burned 67,000 acres in Napa and Sonoma counties, and led to a drop in Napa County wine grape tonnage by roughly half.

Jackson Family Wines owns about 15,000 acres of vines in Napa and Sonoma counties, plus multiple wineries.

“Zurich has engaged in a deliberate campaign to delay the four open fire claims and avoid paying tens of millions of dollars in coverage that is clearly owed under the three insurance policies that (Jackson Family Wines) purchased,” the complaint filed by the vintner’s attorneys from Farella Braun + Martel in the in U.S. District Court in San Francisco Dec. 9.

Jackson said Zurich in September communicated that it wanted complete the summary of all Jackson’s four claims, to “bring it to plumb,” the complaint said.

Zurich attorneys told the vintner’s counsel that the accounting of the claims was taking longer than expected but would be completed by mid-October. That hadn’t been done by the time the lawsuit was filed, the court document said.

But Zurich in early November did deny tree removal expenses for the 2017–2020 fires, the filing said.

A Zurich spokesperson told the Journal Monday that it doesn’t comment on litigation.

Jackson had $400 million in coverage under two policies in 2017–2019 and $300 million for one policy in 2019–2020, according to the complaint.

In the Nuns and Tubbs fires, Jackson had losses at 12 locations, including 13 structures and loss of the equivalent of 23,000 cases of wine, the court filing said. The vintner said it spent $1.7 million on debris removal and another $8 million on taking out damaged or destroyed trees.

In the Pocket Fire, Jackson had losses at two locations and about 65,000 cases of wine.

Jackson said it submitted over $156 million in invoices and proposals related to the Nuns, Tubbs and Pocket fires, but only $12 million (nearly 8%) has been paid to date.

Two years later in the Kincade Fire, the wine company lost 50 structures, many of them homes, at 10 locations, the complaint said. It has spent $12 million so far on debris removal and estimates it will cost over $26 million to remove hundreds of fire-damaged trees. Losses of wine haven’t been determined so far.

Jackson said it submitted more than $288 million in invoices and proposals from Kincade damages, but only $56.35 million (19.6%) has been paid to date.

The 2020 Glass Fire damaged more than five company locations, but only one house was lost because of work by a fire-suppression contractor, the filing said. It has spent over $1.5 million on debris removal and expects more work will be needed to remove hundreds of damaged trees.

From the Glass Fire, Jackson submitted invoices and proposals for over $15 million, but only $1.49 million (9.9%) has been paid to date.

Jeff Quackenbush covers wine, construction and real estate. Before coming to the Business Journal in 1999, he wrote for Bay City News Service in San Francisco. Reach him at jquackenbush@busjrnl.com or 707-521-4256.

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This story has been updated with a response from Zurich to Business Journal inquiries.