(CN) - The 5th Circuit reinstated a class action accusing Wal-Mart of improperly taking out life insurance policies on its workers.
The federal appeals court in New Orleans ruled that lead plaintiff Jennifer Bruney Richard is not time-barred from claiming that the mega-retailer improperly took out a life insurance policy on her relative in 1993.
Wal-Mart's Corporate Owned Life Insurance (COLI) program lasted from 1993 to 2000. Under COLI, Wal-Mart took out life insurance policies on its employees.
Employee Dewey Bruney died in 1996, and Wal-Mart collected the funds in 1998.
Richard discovered the existence of the COLI policy in 2005 and sued for recovery of the insurance funds. She filed a class action against Wal-Mart over the COLI program.
Richard cited a Louisiana law prohibiting the execution of insurance policies on individuals with a legitimate insurance interest in that person.
The trial court granted summary judgment to Wal-Mart, accepting the company's argument that the one-year statute of limitations had expired.
However, Judge Clement reversed the decision, ruling that the claim was one of unjust enrichment, not conversion.
Therefore, the statute of limitations is 10 years, not one.
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