Ace American Insurance Company v. Walmart, Inc.

Case summary

At a glance

Parties: ACE American Insurance Company and other insurers, among them the AIG Insurers (American Home Assurance Company and National Union Fire Insurance Company of Pittsburgh, PA), the Excess Insurers and QBE Insurance Corporation (appellants), v. Walmart, Inc. (appellee)
Case no.: No. CV-24-417; cited as 2026 Ark. App. 476
Court: Arkansas Court of Appeals, Division IV. Judge Cindy Grace Thyer wrote the opinion; Judges Gladwin and Murphy agreed.
Forum and rules: Appeal from the Benton County Circuit Court (No. 04CV-22-2835, Judge John R. Scott). The appeal concerns a declaratory-judgment action on insurance coverage and a motion to compel arbitration.
Treaty: Arbitration clause in the Endurance excess policies, said to be incorporated into the QBE policies; New York Convention of 10 June 1958 (raised by QBE)
Sector: Insurance (commercial general liability, excess and quota share layers); opioid litigation; retail pharmacy
Outcome: Affirmed (7 October 2026). The insurers must defend Walmart in the Opioid Lawsuits, and QBE's motion to compel arbitration stays denied.

The dispute

Since 2017, individuals, state attorneys general, municipalities and healthcare entities have filed more than 2,400 lawsuits alleging that Walmart contributed to the opioid crisis by selling and dispensing opioid medications. On 7 November 2022, Walmart sued more than thirty of its insurers in the Benton County Circuit Court, seeking a declaration that they must pay for its defense. Its insurance program had several layers: primary commercial general liability policies (the AIG Insurers), excess or umbrella policies (the Excess Insurers), and a quota share layer shared 50/50 between QBE and Endurance Specialty Insurance Ltd. The AIG Insurers argued that the lawsuits allege no "occurrence" (accident). The Excess Insurers argued that the damages sought are not "because of bodily injury." QBE argued that its policies incorporated the New York choice-of-law and arbitration clauses of the Endurance policies, so the dispute had to be arbitrated.

Key holdings

The complaints allege an "accident." Their gravamen is that Walmart failed to put proper controls in place to find and report suspicious opioid orders. That is a lack of reasonable care, not intentional malfeasance. Red Apple, where the gravamen was intentional misrepresentation, is distinguished. pp. 9–10
Following Talley, coverage turns on whether the harm itself was intended or expected. The tort standard of intending the natural and foreseeable consequences of one's acts does not apply. Even if Walmart intentionally filled prescriptions, the alleged result, a nationwide addiction crisis, could have been without foresight or expectation, so there is a possibility of coverage. pp. 11–13
The suits by governmental and healthcare entities seek damages "because of bodily injury." The policy covers damages "claimed by any person or organization for care" resulting from bodily injury, which includes an organization's financial losses. Unigard and Cenark are distinguished as breach-of-contract cases. The individual suits are personal-injury claims and are plainly covered. pp. 14–18
The policy exclusions cover only certain firearm and pollution claims brought by governments. No clear and unambiguous exclusion reaches governmental suits for damages because of bodily injury in other contexts. pp. 18–19
The first QBE policy refers to an Endurance policy ("P003082009") that is not in the record, so there is no evidence that it incorporated any choice-of-law or arbitration provision. The incorporation clause in the second QBE policy reaches only terms that limit coverage. Choice-of-law and arbitration clauses are not coverage terms, and any ambiguity is construed against the insurer. pp. 21–23
Even if New York law had been incorporated, Arkansas will not apply foreign law that contravenes an established and important policy of the State. Its policy against arbitration clauses in insurance contracts, reflected in Ark. Code Ann. §§ 23-79-203 and 16-108-233(b)(3), is such a policy. Any arbitration clause in an insurance contract is void. pp. 23–24
QBE's argument that the New York Convention requires arbitration because its relationship with Walmart is "not entirely domestic" was not preserved. QBE did not make it in the circuit court, so the Court of Appeals did not address it. pp. 24–25

Procedural history

2017The Opioid Lawsuits against Walmart begin to be filed across the United States.
7 November 2022Walmart files its declaratory-judgment action against more than thirty insurers in the Benton County Circuit Court.
5 April 2023Walmart moves for partial summary judgment on the AIG Insurers' duty to defend.
June 2023The AIG Insurers cross-move for partial summary judgment (20 June 2023). On 30 June 2023, the Excess Insurers move for partial summary judgment and QBE moves to compel arbitration.
29 December 2023Circuit court order, dated nunc pro tunc: Walmart's motion is granted, the insurers' motions are denied, and QBE's motion to compel arbitration is denied. A Rule 54(b) certificate is attached.
7 October 2026The Arkansas Court of Appeals affirms on all issues.