Hello, my name is***** and I have over 20 years of experience as a veterinarian. I am sorry to hear that your dog is heartworm positive and is going through expensive, uncomfortable treatment. I fully understand your frustration.
First I am going to give you some general information about heartworm disease that may help explain some things and will address some of your concerns.
Heartworm is passed from an infected dog to other dogs via a mosquito bite. The female mosquito bites the infected dog removing blood and microfilaria (baby heartworms), and then the heartworm larvae matures (molts) in the mosquito ending up in the mosquito's mouthparts. The mosquito passes those developed, more mature microfilaria (L-3 stage) to other dogs when it bites other dogs seeking a blood meal. If the heartworm isn't allowed to mature in a mosquito it cannot go through its life cycle. That means blood from an infected dog given to another dog (in utero, blood transfusion) may pass immature larvae, but they will die and will never mature to an adult. The mosquito is essential in development.
It takes at least 6 months from getting bitten by an infected mosquito for a heartworm infection to develop and mature to the point where we can find it in a dog with laboratory testing. That's because we need adult heartworms to release antigens and stimulate antibodies in the newly infected dog's bloodstream and produce baby worms (microfilaria) to find it with the tests we have available.
Heartworm preventions do just that. They only kill larvae at a particular larval life stage. Once a dog has heartworm that have developed past that stage giving prevention won't change that infection. It will prevent any new infections however. That means that Iverhart may have done exactly what it was supposed to do, but if the heartworm infection had already matured past the point where ivermectin could kill the microfilaria then the infection progressed.
Here is a link to a webpage written by the CAPC (Companion Animal Parasite Council) which goes into depth about heartworm disease and has a map of the areas where heartworm has been found in the US: http://www.capcvet.org/capc-recommendations/canine-heartworm
So to answer your questions:
1) In an ideal world all dogs should be tested yearly and on prevention. In reality we often follow what the area we practice in has seen in the past. If there aren't any mosquitos it is very hard to convince owners to put their dogs on prevention. Wisconsin has mosquitos and it certainly has reported heartworm so best practice would be that those kennel dogs should have been on prevention and tested.
2) No worries about puppies getting heartworm from mom in utero because even if some microfilaria are found in the pups they won't mature because they haven't gone through a mosquito (see my write up above).
3) Fault is going to be difficult to prove because she was with you for a year, it is possible that she was infected when she was with you. I know that isn't likely because she went on prevention when she came to you, but no prevention is 100% effective.
Companies will stand behind their heartworm prevention if a dog is tested every year and on their prevention consistently as prescribed. In Niki's case she was not tested before starting the prevention, and she had only been on it for a short part of her life. Thus I would not think that the Iverhart company is liable.
I know this is a bitter pill to swallow, and perhaps it is worth talking to a lawyer and having the draft a letter to the kennel, but that may be an exercise in futility.
Unless you have something in writing that says Niki was tested and on prevention from the kennel or any of their veterinarians the history is all verbal and will likely fall apart in court as "he said, she said" and not real, reliable, provable history.
Ideally your Wyoming veterinarian should have recommended testing her, but we cannot go back and change that. And even if she were negative then if she was within a less than 6 month time frame of being infected by a mosquito then she could have tested negative any way.
I think if your goal is to change behavior then letters to all involved detailing what has happened with Niki could help achieve that.
The veterinarians involved will likely be more open to changing their protocols given the information you can give them. But because pets are considered property even though there is best way to do things we cannot force owners to do so, and that includes a kennel.
I know this information isn't likely what you were hoping to hear, but I wanted give you an explanation and accurate information.
Please let me know if you have any further questions.