My favorite retailer is in the news again. (The source is an article in the Wall Street Journal by Vanessa Fuhrmans, so you need a paid subscription to read it, at least until Rupert Murdoch decides otherwise.) The story concerns Deborah Shank, a 52 year old woman who stocked shelves in the Cape Girardieu, Missouri store. She worked the night shift, so she could be home during the day with her three sons. Seven years ago, she was perusing yard sales with a friend when a tractor trailer plowed into her van. She was left with permanent brain damage. Walmart paid about $470,000 in medical expenses. The Shanks sued the trucking company and collected about $1 million, the limit of liability under the company’s policy.
Jim Shank, Deborah’s husband, used his portion of the settlement to buy an accessible home for his disabled wife. After paying legal fees, his wife was left with $417,000 to help supplement her care. End of sad story? Not quite.
When she signed onto the Walmart health plan, Deborah agreed that her employer would be first in line for payment out of any subrogation. [This type of language in employer health insurance policies is becoming increasingly popular.] Walmart sued Deborah for $470,000 plus legal expenses – in other words, they are suing for more than the balance of her settlement funds. They rejected the Shank’s offer to settle for a portion of their costs. And of course, Walmart being Walmart, they have won the suit.
Life Isn’t Fair
Our many readers in the insurance industry certainly understand the logic of Walmart’s position. Administrators of the company plan have a “fiduciary obligation” to be impartial. In the interests of the group itself, they must pursue every available dollar, regardless of the consequences for one isolated (and devastated) family. The courts may feel some sympathy for Deborah Shank and her long-suffering husband, but the language of the policy is clear and unambiguous. The settlement dollars – and then some – belong to Walmart.
Less than a week after the Shanks lost their appeal, their son Jeremy was killed in Iraq. At that point, Jim Shank wanted to give up, but his lawyer wants to continue with the appeal (which heads for the Supreme Court, if the Court deigns to accept the case. I have no idea why the Shank’s lawyer expects a different result at that level.)
In the meantime, Jim Shank has, on the advice of consultants, divorced his wife, to make her eligible for public aid as a single and totally disabled person. Deborah has not been informed of the divorce, but even if she were, she might not understand what it means. After attending her son’s funeral, she still could not figure out why he was missing from the family circle.
There is, of course, nothing wrong with this story. The language of an insurance policy has been enforced. The fiduciary obligation of Walmart’s health plan administrator has been fulfilled. One family is ruined, but that’s just bad luck on their part. Surely they do not expect Walmart to show any compassion!
I hope Jim Shank can put together a nice turkey dinner on Thursday for his two remaining sons. Despite his many losses, he has much to be thankful for. It might just take a few extra moments to put those thoughts into words. When he does finally bow his head to say grace, there is at least one word that will not cross his lips: Walmart.
