A Pennsylvania judge has ruled that an AIG insurance unit is not required to pay FedEx nearly $200 million in post-judgment interest tied to a fatal trucking accident, while allowing separate claims accusing the insurer of bad faith and broken promises to proceed toward trial.
A state court judge in Pennsylvania on Wednesday rejected FedEx’s attempt to recover post-judgment interest from National Union Fire Insurance Company of Pittsburgh, an American International Group subsidiary, ruling that the insurance policy does not support FedEx’s claim for interest payments following a $165 million verdict.
In a written decision, Judge Mary C. McGinley concluded that the policy language did not obligate National Union to cover interest that accrued while FedEx pursued years of appeals related to a wrongful death case stemming from a 2011 highway crash in New Mexico.
The ruling blocks FedEx from collecting roughly $200 million in additional interest, which the company argued should be paid at an annual rate of 15 percent. The judge determined that the insurer’s obligation to pay post-judgment interest would have been triggered only if the insurer itself had chosen to appeal the verdict, which did not occur.
While dismissing FedEx’s breach-of-contract claims, the court allowed the company’s bad faith and promissory estoppel claims against National Union to move forward, finding unresolved factual disputes that must be decided at trial. Two other insurers named in the case, Great American Insurance Company and Liberty Mutual Insurance, were dismissed from the lawsuit.
The long-running dispute traces back to a deadly crash involving a FedEx Ground driver that resulted in the deaths of a young mother and her four-year-old daughter, along with serious injuries to an infant passenger. After extensive litigation and appeals, the New Mexico Supreme Court upheld the $165 million verdict against FedEx in 2022.
FedEx later sought coverage from its insurers, but National Union capped its payments at $50 million, prompting multiple lawsuits in different states over coverage responsibilities and interest obligations.
Judge McGinley noted that key questions remain regarding whether National Union acted improperly in handling FedEx’s claims and whether the insurer made assurances that FedEx reasonably relied upon during the appeals process.
Neither FedEx nor the insurers immediately commented on the ruling.
The case will now proceed toward trial on the remaining claims, potentially extending litigation that has already spanned more than a decade.
