Local trial begins in cattle suit

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With hundreds of thousands of dollars at stake, parties on either side of a more than four-year-old dispute involving a Mount Vernon cattle operation finally met before a jury Tuesday at the Mitchell courthouse.

In a lawsuit filed in 2008, Dry Run Cattle Co. — a family owned cattle feeding operation based in Mount Vernon — claims Dan Knoll, of Grafton City, Ill., an agent of KLC LLC, and the Minnesota-based company Central Livestock Association Inc., breached the terms of an agreement to raise and sell 1,105 head of drug-free cattle by supplying cattle that were sick.

Travis Hostler, part-owner of Dry Run Cattle, was seated next to his attorney, Carl J. Koch, of Mitchell, in the courtroom. Koch also represents Ray Cooper, an Iowa resident and investor in Dry Run Cattle.

They are seeking more than $287,000 in damages for losses they say were the result of a shipment of cattle from North Dakota that included animals with an immune system infection that led to pneumonia.

The circumstances of the dispute began when Hostler, Knoll and Cooper signed an agreement in November 2007 to form a joint venture responsible for raising and selling 1,105 head of drug-free cattle. According to an amended complaint filed in July 2011, 690 head of cattle were delivered to Dry Run Cattle’s feed lot, but due to zoning restrictions, the remaining 415 were delivered to another feed lot in Stickney.

Upon delivery, some of the cattle “appeared sick or under stress and in need of medication and one was dead on the truck,” the complaint says.

An autopsy performed on the dead calf found the cause of death to be pneumonia, Koch said.

As the basis for the lawsuit’s claim, Koch said the cattle could no longer be sold at higher drug-free prices because of medication Dry Run Cattle had to administer to prevent cattle from dying. The infection in the herd also led to a delay in growth, resulting in an increased cost to raise the cattle and missed opportunities to sell at higher prices due to market change, he added.

“When you’re dealing with cattle … you’re talking about some significant losses,” Koch said.

Attorneys for both Knoll and Central Livestock claim the cattle herd was not infected when it was delivered and became sick only after arriving at Dry Run Cattle’s facility.

Gary W. Schumacher, Knoll’s De Smet-based attorney, alleged the damages could have been caused by Dry Run Cattle’s own actions in caring for the cattle.

Eric DeNure, the Sioux Falls-based attorney for Central Livestock, made similar claims.

“It was only after these cattle got to Dry Run that the herd got infected, and the evidence is going to show you that,” DeNure told jurors. “The evidence is going to show that it is literally impossible that the source of the pneumonia came from the North Dakota herd.”

He claimed the evidence will show Central Livestock is not liable for any damages.

“This is a case of buyer’s remorse,” DeNure said.

The trial is scheduled to continue through Friday.

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