Walmart Sued For Collecting Life Insurance on Employees

Tallahassee, FL – The Florida Supreme Court is deciding whether Walmart widowers can sue the corporation for a share of the life insurance policies Walmart purchased in their wives' names. They want some of the $9.6 million the corporation collected when the insurance benefits were paid.

Walmart got the money when 132 Florida employees enrolled in a corporate-owned life insurance program died. When a company names itself a beneficiary on a policy bought in the name of a rank and file employee, it is known as Dead Peasants Insurance. Walmart stopped the practice in 2000, saying it was losing money. In the case before the Florida Supreme Court, a federal judge is asking the court to decide at the time the policies were purchased whether Florida law provided family members standing -- the right to sue to claim the life insurance money.

Eileen Moss represents Walmart. It has paid more than $15 million to settle class action dead peasant suits in Texas and Oklahoma, but in Florida, she argued the law is on Walmart's side.

"You have to have standing. They were not parties to the contract, and they weren't harmed by it. They didn't pay the premiums, and so the decision was made no standing. Now, where they started creating standing was through statutory rights."

Moss argued the Florida Legislature in 2008 gave families the right to sue, standing. New rights cannot be applied retroactively. The estates of Rita Atkinson and Karen Armatrout see it differently. They argued that two years ago lawmakers clarified Florida law, and the rights were already there.

Michael Myers represents Atkinson, Armatrout, and others. He points to the case of a Port St. Lucie banker. Seventy-three years ago his estate argued all the way to the Supreme Court that it had a legal claim on the life insurance money.

"I think the importance of that case is a bank president's family had the right to sue. So if a bank executive's family had the right to sue in 1937, why wouldn't the families of pharmacy workers and administrative people in the office have the right to sue in 2010?"

That case is McMullen, and Moss argued Myers is misreading it. She said McMullen did not decide standing. Therefore, prior to 2008 the only remedy available would be to declare the policies void. Her remarks drew these comments from Justice Barbara Pariente.

"I would have agreed with you that I thought the only remedy was to be able to void a policy. But I don't think McMullen can be dispensed with as simply in terms of that this court was saying, certainly didn't say they didn't have standing and certainly didn't say that they wouldn't have that cause of action. They wouldn't adjudicate the dispute if those thresholds to findings were contrary."

The silence in the courtroom was the opening through which Myers drove home his point. Precedence was established in 1937.

"The only difference is that was the estate of a key person who sued. Here we have the estate of rank and file employees. If these insured's have standing to sue, then the seamless web of the law works perfectly. McMullen was correct. Gerstell was correct. List versus List with the living person was correct. The Legislature was correct when it said it was only clarifying the existing law. The dictionary definition of clarify is just to make clear, easy to understand, it doesn't add anything. This seamless web of the law is seamless. Public policy is promoted."

In court filings, Walmart says the amounts of payouts on the 132 Florida employee policies ranged from $55,000 to $90,000. It said the program was intended to help pay rising employee healthcare costs. It didn't work out and was cancelled in 2000. Surviving family members, like Armatrout and Atkinson, want a share of the $9.6 million Walmart collected on employee life insurance policies. But first, the Florida Supreme Court has to decide if they have standing, that is, the right to sue.