Oyster farmers whose crops were significantly damaged by an outbreak of oyster disease are suing their insurance company for not covering the damage. Dodge Cove Marine Farm of Newcastle and Muscongus Bay Aquaculture, Inc., of Bremen collectively filed a complaint against Farm Family Casualty Insurance and The Nelson Agency in Lincoln County Superior Court February 22.

The insurance company, based in Vassalboro and operating under the larger New York firm, cited a clause in policy excluding disease as a reason for not covering the loss. The two oyster farms, owned by Antonina Simmons, sustained significant damage to crops following an outbreak of an oyster-killing disease called “MSX" (Multinucleate Sphere Unknown), caused by the pathogen Haplosporidium nelsoni, in late summer 2010, according to court documents.

The documents state Simmons upgraded the Nelson Agency insurance policy in summer 2009, from a $250,000 “blanket farm products coverage” to a policy “for all perils” for her company's oyster crops (equaling $750,000 per farm).

In late summer 2010, Simmons and employees found that the disease spread throughout the oyster beds. She contacted the insurance company and, according to the court filing, sought a claim for the insurance money that fall. 

Some months following a water tour of the farms in September 2010, the insurance company told Simmons they would not cover the loss, because the damage stemmed from the outbreak of disease. 

The suit claims that Nelson, “never indicated there were exclusions to the coverage for losses resulting from unusually warm temperatures or from bacteria, parasites, protists and/or infection.”

A March 2011 letter from the insurance company's attorney references such a clause in policy that, “excludes loss directly or indirectly from a change in temperature.”

MSX is described by the Department of Marine Resources as a non-native invasive species. It is a free-living, single-cell organism that enters through the gills of an oyster and inhibits its metabolism. It kills oysters, but has been reported to be not harmful to humans. 

The parasite thrives in low salinity and warm water climates, according to a fact sheet on the history and impact of MSX published by the Northeast Regional Aquaculture Center at the University of Massachusetts in Dartmouth, Mass. Scientists point to a mild winter, a rise in water temperatures and less rainfall in 2010 as a possible reason for an outbreak of MSX in oyster beds along the Damariscotta River in 2010. 

“Our allegations are that the policy was all-inclusive,” attorney Michael Martin of Portland-based law firm Petruccelli, Martin and Haddow said. He is representing Simmons in the suit. The plaintiff statement reads, “Ms. Nelson specifically represented that the farms' oyster crops would be covered for 'all acts of God.'”

The statement further alleges the insurance policy covered oyster crops for the following year, in 2011. According to the documents, the company has recorded crop losses totaling $4.5 million.

The case was initiated some time ago, according to Presque Isle attorney Frank Bishop, who is representing Nelson. He said it was dismissed without prejudice, due to an illness and went through a period of suspended activity. 

The case was then refiled last month. Bishop and Martin both said earlier discovery information would be included in the newly filed suit.

“We are in firm denial of any misconception of coverage,” Bishop said, adding he and Nelson firmly believe that the coverage in the updated policy was adequately explained. Bishop is currently working on a response to the suit, which he will file with the court in the near future. 

Since the outbreak of MSX, oyster farmers have been working on disease-resistant strains of oysters. The parasite may not have fared as well this year with more fresh water entering growing areas and diluting salinity, however scientists, fishermen and farmers are concerned about a warming global climate.