Judge tosses out Wal-Mart secret life insurance lawsuit

By Kevin Graham, Times Staff Writer
Published March 11, 2008

TAMPA - A federal judge has dismissed a Hillsborough County man's lawsuit against Wal-Mart over a life insurance claim the company received when the man's wife died.

Friday, U.S. District Judge James S. Moody Jr. dismissed the suit filed by Richard Armatrout, because it failed to reach the $75,000 threshold for a civil complaint to go before a federal judge.

When Karen Armatrout, 50, died of cancer in 1997, Wal-Mart collected $72,820.30 from an insurance policy the retail giant had in her name. Armatrout's husband sued, saying the couple never knew about the policy and he received none of the payout.

Armatrout's attorney argued the lawsuit exceeded the $75,000 limit if punitive damages were included.

Karen Armatrout worked at a Wal-Mart pharmacy on Waters Avenue in Tampa and took a leave of absence when doctors diagnosed her with cancer.

Michael D. Myers, a Texas attorney representing Richard Armatrout, said Monday he anticipated the case would be thrown out because of the technicality. Before Moody's ruling, Myers filed Armatrout's lawsuit in Pasco County, along with a similar case for Pasco resident Wayne Atkinson. Myers said Wal-Mart also collected on a policy when Atkinson's wife, Rita, died.

Myers estimates Wal-Mart secretly insured about 350,000 employees for two years beginning in 1993. Wal-Mart officials said they dropped the policies by the start of 2000.

He has won settlements against Wal-Mart in Texas and Oklahoma. In Oklahoma, a judge approved a $5.1-million class-action settlement in a case brought by the estates of deceased Wal-Mart employees. A $10-million settlement was reached in Texas.

Myers is waiting to see if a Pasco County judge will grant his motion to give Armatrout's case class-action status for similar estate claims in Florida.

Kevin Graham can be reached at kgraham@sptimes.com or 813 226-3433.