Retail giant Walmart (WMT) has settled a lawsuit with insurers that wanted to avoid covering the company’s payout to actor Tracy Morgan. Five insurers reached a settlement with the company in a New Jersey federal court, resolving claims that Walmart “overpaid” a settlement with Morgan.
Morgan was injured in a grisly truck accident in 2014 after a Walmart truck driver collided with his limousine, killing his friend James McNair. The driver, according to reports, was sleep deprived.
Morgan suffered several injuries in the accident, including broken ribs, a broken leg and a “traumatic brain injury.”
Reports indicate that the driver had been awake for more than 24 hours when the collision occurred. The driver pleaded guilty to vehicular manslaughter as part of an agreement to avoid jail time.
The suit was filed in 2015 by Liberty Insurance Underwriters Inc. and Ohio Casualty Insurance Co. The plaintiffs accused Walmart of not doing their due diligence in Morgan’s case and resolving the dispute with a payout the insurers did not agree to.
The size of Morgan’s settlement was never disclosed, but experts estimate it to be around $90 million.
No details were revealed about the settlement reached with the insurance companies.
“We are pleased to have resolved this matter,” said Randy Hargrove, a spokesman for Walmart, in an email.
The settlement ends a case that has been thrown between New Jersey state and federal court twice since being filed in 2015. The case was dismissed by U.S. District Judge Freda Wolfson on Monday.
Walmart settled the suit filed by Morgan in 2015, and admitted no liability. McNair’s family received a $10 million settlement in a separate, out-of-court agreement. Court documents indicate that McNair’s settlement was about 8% of the total amount paid by Walmart.
Morgan received 80% of the settlement, and Ardley Fuqua, another injured passenger, received 12%.
Liberty Insurance Underwriters and Ohio Casualty Insurance Co. said the payout was “excessive” and that they never signed off on it. The plaintiffs added that the retailer opted for a higher settlement to avoid punitive damages, which are required by New Jersey law to be paid by the party at fault – not insurance companies.
Ohio and Liberty questioned whether Walmart would be entitled to coverage in a settlement that resolved its punitive damages.
The settlement comes just months after Liberty and Ohio attempted to get permission to question Fuquoa and Morgan to determine whether Walmart’s payout was excessive.