Bad-faith litigation Wal-Mart Stores Inc. has brought against several commercial excess insurers is likely to focus on whether the insurers consented to settlements the retailer reached in the 2014 accident that injured comedian Tracy Morgan.

The Bentonville, Arkansas-based retailer sued six insurers in Benton County, Arkansas, on Sept. 30, alleging they failed to pay their portion of settlements in the case. Other insurers have paid Wal-Mart's claims (see box page 41).

In the June 2014 crash on the New Jersey Turnpike, a Wal-Mart Transportation L.L.C. driver reportedly fell asleep at the wheel, rear-ending a limousine in which Mr. Morgan, comedian James McNair and others were riding. Mr. Morgan and two others were seriously injured, and Mr. McNair was killed.

According to the National Transportation Safety Board, the Wal-Mart driver routinely commuted 700 miles from home in Georgia to work in Delaware and had only 4 hours of sleep in the previous 33 hours when the crash happened.

In May, Wal-Mart said it had settled a lawsuit with representatives of Mr. Morgan and the two others seriously injured. A settlement was also reached with Mr. McNair's family and estate, as well as others affected by the accident.

Terms of the settlement, and the amount Wal-Mart is seeking from its excess insurers in Wal-Mart Stores Inc. et al. v. Liberty Insurance Underwriters Inc. et al., have not been disclosed.

The complaint accuses the insurers of breach of contract, negligence and bad faith for failing to consent to and contribute their portion to the settlements under commercial excess liability coverage Wal-Mart purchased.

“Despite Wal-Mart's early and repeated efforts ... to provide defendants with all relevant documents and information needed to evaluate the survivors lawsuit, defendants persisted in making harassing and perpetual demands for more and more and more information” and used those demands to avoid settling the lawsuit, the Wal-Mart suit says.

It also accuses the insurers of an “intentional scheme” to avoid contributing to the settlements and seeks a declaratory judgment that it is entitled to coverage up to the excess policies' aggregate limits.

“Wal-Mart took full responsibility for the tragic accident and did what was right to ensure the well-being of those who were impacted,” the company said in a statement. “We funded the settlement agreements in full, but some of the insurance carriers have failed to pay their portion of the settlement amount,” although Wal-Mart “has had umbrella liability coverages like this in place for decades.”

“In some instances, insurers will demand information and seek more details than can be provided under the settlement process ... and then later claim the settlement procedure is without their specific consent, that the policyholder made a "voluntary payment' that precludes coverage,” said policyholder attorney Linda D. Kornfeld, a partner at Kasowitz Benson Torres & Friedman L.L.P. in Los Angeles

“Wal-Mart did a very nice job, if the complaint allegations are correct, in setting itself up to overcome a consent-to-settle defense” by insurers, said K. James Sullivan, a partner and policyholder attorney at Calfee, Halter & Griswold L.L.P. in Cleveland.

Insurer defense attorney Todd M. Rowe, a partner a law firm Tressler L.L.P. in Chicago, said, however, that it looks like the insurers “were just looking for more information.” The question, he said, is whether this rises “to the level of vexatious conduct.”

Vincent E. Morgan, a partner and policyholder attorney at Pillsbury Winthrop Shaw Pittman L.L.P. in Houston, said the reason some insurers paid and others did not could be because of a difference in policy language.

“This is going to be one of the key issues in the case,” he said.

The insurers either declined comment or could not be reached for comment.

No date for a hearing has been set, according to a Wal-Mart spokesman.