Wal-Mart Stores, Inc. v. United States Fidelity & Guaranty Co.

76 S.W.3d 895, 77 Ark. App. 217, 2002 Ark. App. LEXIS 247
CourtCourt of Appeals of Arkansas
DecidedApril 24, 2002
DocketCA 01-1140
StatusPublished
Cited by2 cases

This text of 76 S.W.3d 895 (Wal-Mart Stores, Inc. v. United States Fidelity & Guaranty Co.) is published on Counsel Stack Legal Research, covering Court of Appeals of Arkansas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Wal-Mart Stores, Inc. v. United States Fidelity & Guaranty Co., 76 S.W.3d 895, 77 Ark. App. 217, 2002 Ark. App. LEXIS 247 (Ark. Ct. App. 2002).

Opinion

Karen R. Baker, Judge.

This case involves the application of the doctrine offorum non conveniens. The Benton County Circuit Court dismissed a suit filed by Wal-Mart, whose corporate headquarters are in Benton County, on the ground that Pennsylvania would be a more convenient forum. The lawsuit involved Wal-Mart’s attempt to seek insurance coverage from appellees United States Fidelity & Guaranty and Lexington Insurance Company for losses involving a Dickson City, Pennsylvania Wal-Mart store. We affirm the trial court’s decision.

The following facts are taken from Wal-Mart’s complaint and the insurance policies attached thereto. On December 6, 1996, a large boulder fell from a rock face behind the Dickson City Wal-Mart store, damaging the rear of the building. Geo-Science Engineering Company and Irwin & Leighton, a construction company, told Wal-Mart that a dangerous situation existed. Geo-Science reported that there were other unstable cracks in the rock face that could cause further damage. The company provided Wal-Mart with a list of remedial measures that could reduce the risk, such as relocating gas and electric utilities, moving overhead power lines underground, evacuating part of the store, and constructing a twenty-foot buffer against the rock face; however, the company stated that, if those measures could not be implemented within twelve to fifteen days, the store should be abandoned.

Wal-Mart decided to abandon the store. In January 1997, it resumed operations at a smaller, temporary location, and in March 1998, opened a new, permanent location. During this process, Wal-Mart allegedly incurred relocation expenses and experienced lost sales, which together totaled $4,822,790.95. Wal-Mart sought coverage from appellees, who had contracted to provide property loss and business interruption coverage to Wal-Mart for the period beginning April 1, 1996, and ending April 1, 1997.1 Appellees denied coverage, and Wal-Mart filed suit in Benton County Circuit Court.

Wal-Mart sought coverage, in part, based on the policies’ “sue and labor” provision. That provision permitted Wal-Mart to “sue, labor, and travel” in order to defend or safeguard property in case of actual or imminent loss to the property, and it further provided that appellees would contribute to the expenses Wal-Mart incurred in doing so. According to a pleading later filed by Wal-Mart, appellees denied coverage because “the geological condition of the hillside did not threaten ‘imminent loss or damage’ to the building, and the relocation of retail operations . . . was not necessary to ‘safeguard the insured property.’ Additionally, each insurer has questioned whether the loss was fortuitous.”

Appellees filed motions to dismiss Wal-Mart’s complaint on the basis offorum non conveniens. Neither insurer attached affidavits, depositions, or other exhibits to its motion, but each argued that Pennsylvania was the more convenient forum for the lawsuit based on the following factors: 1) Pennsylvania is where the property loss occurred; 2) Pennsylvania is where witnesses such as the store employees, store manager, the owner of the store property, the engineering company that investigated the damage, and Dickson City municipal employees were located; 3) other lawsuits concerning the rock slide were pending in Pennsylvania; and 4) Pennsylvania law would likely apply. Wal-Mart responded by characterizing the lawsuit as one merely involving the construction of insurance agreements, and therefore the case would involve legal issues not dependent on a factual inquiry into the circumstances of the loss. It argued that the negotiation, delivery, and performance of the insurance policies occurred not in Pennsylvania but in Arkansas and New York (where Wal-Mart’s insurance broker is located). The relevant witnesses, therefore, were not the Pennsylvania witnesses but Wal-Mart’s corporate personnel who had knowledge of the claim. Wal-Mart also argued that dismissal of its complaint would deprive it — an Arkansas resident — of the right to litigate in the courts of its own state.

Attached to Wal-Mart’s response were the affidavits of Rita Stephens, Wal-Mart’s Director of Risk Management, and Dale Snowden, Wal-Mart’s Property Claims Manager. Stephens’s affidavit set out the following pertinent information: Either she or her colleague, both of whom are located in Benton County, are required to ratify an insurance policy before coverage is bound; insurance premiums are paid from Wal-Mart’s Benton County office; the insurance broker’s representative involved in the adjustment of the claim would be willing to travel to Benton County for trial; and all records relating to the administration of insurance policies and coverage claims are maintained in Benton County. Snowden stated in his affidavit that he was responsible for investigating and preparing the claim in this case and that he and others in his department have knowledge of the circumstances attendant to the claim.

On August 10, 2001, a hearing was held on the motion to dismiss. Appellees’ attorney told the court that the issues at trial would be fact-intensive and would involve such inquiries as whether Wal-Mart knew that there was an unsafe condition prior to the policy period, whether Wal-Mart should have done something to prevent the rock slide, whether there had been a history of rock slides at that location, and whether the danger involved was imminent. According to the attorney, persons located in Pennsylvania would have knowledge of such matters. He stated that Wal-Mart store personnel and employees had supplied information to the insurance companies regarding how much damage was caused by the falling rock and for how long the rock slides had been occurring. Additionally, the insurance adjuster who worked the claim was located in Pennsylvania, and he had visited the site numerous times, taking photographs and talking to witnesses. Further, the property owner, a Pennsylvania company, would have knowledge about the condition of the hillside and whether any measures had been undertaken to prevent a rock slide. The attorney also mentioned that the engineering and construction companies named in Wal-Mart’s complaint were located in Pennsylvania, as were two other engineers who had given opinions about the situation. Further, he said, the city council of Dickson City also had an interest in the matter, and the council’s consulting engineer had knowledge regarding the hill in question.

Following the hearing, the trial judge granted appellees’ motion. The judge stated that he was reluctant to deny an Arkansas citizen access to the state’s courts and that he was hesitant to require Wal-Mart to litigate its claim elsewhere. However, he found that, because the case was “heavily burdened with factual issues,” it would be more convenient for the trial to be held in Pennsylvania, where the fact witnesses were located. Further, he noted that it would be a minor inconvenience to require Wal-Mart’s corporate employees to make the trip to Pennsylvania as compared with attempting to bring the Pennsylvania witnesses to Benton County. He referred to the fact that “the impact on the parties trying to litigate this and take depositions and compel attendance of numerous witnesses to the court just to take depositions, . . . would be an overwhelming burden and a needless burden when there is a court in Pennsylvania that could satisfy all of those needs.”

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Bluebook (online)
76 S.W.3d 895, 77 Ark. App. 217, 2002 Ark. App. LEXIS 247, Counsel Stack Legal Research, https://law.counselstack.com/opinion/wal-mart-stores-inc-v-united-states-fidelity-guaranty-co-arkctapp-2002.