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story.lead_photo.caption In this Oct. 5, 2007, file photo, an American flag flies in front of the Walmart Stores Inc. headquarters in Bentonville, Ark. (AP Photo/April L. Brown, File)

Walmart Inc. has reached a settlement with Tesla Inc.'s energy subsidiary in a lawsuit concerning Tesla's solar panel installations on store rooftops, a Walmart spokesman said Tuesday. The suit claimed Tesla's negligence in the installation and maintenance of the panels caused at least seven fires at Walmart stores.

The terms of the settlement were not disclosed, and must still be approved by a judge.

Walmart filed a request Monday with a New York state court to dismiss the suit. The Bentonville-based retailer asked that its complaint against Tesla Energy Operations Inc. be "voluntarily discontinued without prejudice," meaning Walmart retains the right to sue the company again on the same grounds.

Walmart and Tesla said in a joint statement Tuesday that they "are pleased to have resolved the issues raised by Walmart" regarding the installations.

"With the concerns being addressed, we both look forward to a safe re-energization of our sustainable energy systems," the companies said.

Tesla's energy division, founded by cousins of Tesla Inc. founder and Chief Executive Officer Elon Musk, was previously known as SolarCity Corp. Tesla bought SolarCity in 2016 for $2.6 billion.

Tesla's solar energy systems had been installed on dozens of Walmart stores. According to the complaint, which is now sealed, those systems started fires on the roofs of three stores in early 2018.

"By May 2018, it was clear that Tesla had breached its contractual obligations" to design, install, inspect and maintain the panels "non-negligently and in accordance with prudent industry practices," the document states, and "to handle every aspect of the solar panels' operation on Walmart's roofs in a non-negligent manner."

By November 2018, the complaint states, seven Walmart stores with the Tesla systems had experienced rooftop fires. Court documents also show that tension between the two companies was apparently building for more than a year before the suit was filed in August.

Three days after Walmart filed the lawsuit, the two companies issued a joint statement saying they were working out the issues that led to the court action.

"Together, we look forward to pursuing our mutual goal of a sustainable energy future," they said in the statement. "Above all else, both companies want each and every system to operate reliably, efficiently, and safely."

The case is Walmart Inc. v. Tesla Energy Operations Inc.

The lawsuit's filing almost three months ago prompted hedge fund investor and longtime Tesla critic David Einhorn to call on Musk to resign as leader of the company.

"If @Tesla wants to save the human species, it should pay more attention to the safety of its own customers," Einhorn tweeted in August. "You shouldn't have to be Walmart to have your dangerous solar panels fixed."

Business on 11/06/2019

Print Headline: Tesla, retailer resolve lawsuit

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