Wal-Mart Seeks Federal Venue in Tracy Morgan Coverage Dispute

Charles Toutant writes in the New Jersey Law Journal that Wal-Mart says its dispute with five insurance companies over payouts to actor Tracy Morgan and others injured in a collision with one of its trucks belongs in federal court now that it has reached a settlement with one insurer.

Wal-Mart Stores Inc. removed the dispute to U.S. District Court in Trenton for the second time on July 5. An October 2015 removal action based on diversity jurisdiction failed and the case was remanded to state court, according to Toutant’s report

Toutant adds in his article that according to Wal-Mart, a suit filed by Liberty Insurance Underwriters Inc. and Ohio Casualty Insurance Co. in state Superior Court in Middlesex County fraudulently joined three other insurance companies—QBE Insurance Corp., St. Paul Fire & Marine Insurance Co. and XL Insurance America Inc.—as defendants in the case, along with Wal-Mart. QBE, St. Paul and XL were fraudulently joined as defendants because Liberty and Ohio Casualty had no intention to prosecute any claim against them, Wal-Mart claims in its court papers. All five insurance companies are seeking to disclaim coverage of Wal-Mart in connection with the crash on grounds that it paid too much to settle claims by Morgan and three others, it failed to obtain their prior consent, and part of the settlement is attributed to punitive damage claims.

Read more: www.njlawjournal.com

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