October 26, 2020

Wal-Mart accuses insurer of bad faith in Tracy Morgan case


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Walmart.  December 13, 2014.  Photo by Diego M. Radzinschi/THE NATIONAL LAW JOURNAL.

Walmart. December 13, 2014. Photo by Diego M. Radzinschi/THE NATIONAL LAW JOURNAL.

By Michael Booth,From New Jersey Law Journal

Wal-Mart Stores Inc. has alleged that one of its largest insurers is attempting to pull out of its obligation to pay into the settlement reached between the retail giant and comedian Tracy Morgan over a New Jersey Turnpike crash in which a Wal-Mart truck slammed into a van carrying the entertainer and others.

In papers filed in the U.S. District Court for the District of New Jersey on Oct. 12, lawyers for Wal-Mart said two subsidiaries of the carrier, Liberty Mutual Insurance Co., are seeking a declaration that they are not obligated to reimburse Wal-Mart for losses covered in the settlement.

The confidential May settlement ended a suit in federal court in Newark in which Morgan and three other plaintiffs sought compensation for injuries sustained in the June 7, 2014, crash. Morgan and two other occupants of the van, Ardley Fuqua Jr. and Jeffrey Millea, were seriously injured in the crash. Fuqua, a comedian, and Millea, who was Morgan’s personal assistant, are also plaintiffs in Morgan’s suit, and Millea’s wife, Krista Millea, brought a claim for loss of consortium.

Morgan’s suit claimed that the Wal-Mart truck driver, Kevin Roper, had been awake for 24 consecutive hours at the time of the crash and had traveled 700 miles from his home in Georgia to a company warehouse in Delaware before beginning his shift. Morgan’s suit claimed that Wal-Mart knew or should have known that Roper’s schedule was not in compliance with federal rules designed to combat driver fatigue. A preliminary report by the National Transportation Safety Board said Roper was going 20 mph over the speed limit at the time of his crash with Morgan’s vehicle.

Roper has been charged with vehicular homicide in connection with the June 2014 crash. He sought to intervene in the civil suit, in order to stay discovery so his testimony could not be used to incriminate him in the criminal case. But U.S. Magistrate Judge Lois Goodman denied Roper’s motion to intervene in the civil suit Feb. 3. Goodman found Roper had no right to intervene because he had no interest to protect, since the plaintiffs did not seek discovery or relief from him.

Morgan was returning home after performing at the Dover Downs Hotel and Casino in Delaware when the accident occurred. Another occupant of the van, James McNair, a comedian who performed under the name Jimmy Mack, died in the crash. His family brought a separate suit, which settled for a reported $10 million in January.

According to papers filed in federal court by Wal-Mart’s lawyers at Anderson Kill and Susman Godfrey in New York, Liberty Mutual’s two subsidiaries—Ohio Casualty Insurance Co. and Liberty Insurance Underwriters Inc.—have filed a lawsuit in Middlesex County Superior Court seeking a declaratory judgment stating that they are not obligated to indemnify Wal-Mart.

The papers, which seek to have that lawsuit removed to federal court, also allege that the two subsidiaries “fraudulently” added three other carriers—QBE Insurance Corp., St. Paul Fire and Marine Insurance Co. and XL Insurance America Inc.—in their complaint.

“Some of Wal-Mart’s insurers have met their obligations under the insurance policies they sold and have compensated Wal-Mart for a portion of the settlement amounts,” the retailer’s lawyers said in their notice of removal. “Other of Wal-Mart’s insurance companies—including the plaintiffs—have in bad faith refused to consent to the settlements and have refused to pay their portions of the settlement under their insurance policies they sold to Wal-Mart.”

Spokespersons for Wal-Mart and Liberty Mutual did not immediately return calls seeking comment.

The Wal-Mart papers said Ohio Casualty and Liberty Insurance filed their lawsuit in Middlesex County almost immediately after Wal-Mart sued them in Arkansas. In the Arkansas suit, Wal-Mart is seeking a declaration of its rights under the policies, and is alleging breach of contract, negligent failure to settle claims within policy limits, bad faith and wrongful failure to provide insurance coverage.

The papers filed by Wal-Mart said that the carriers have “no real intention” of acting in good faith.

IMAGE: Photo: Diego M. Radzinschi/NLJ

For more on this story go to: http://www.njlawjournal.com/id=1202739795664/WalMart-Accuses-Insurer-of-Bad-Faith-in-Tracy-Morgan-Case#ixzz3orK5K8c8


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