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Clevenger v. Dillard's Dep't Stores

January 11, 2007

CHERYL CLEVENGER, INDIVIDUALLY AND ON BEHALF OF ALL THOSE SIMILARLY SITUATED, PLAINTIFF,
v.
DILLARD'S DEPARTMENT STORES, INC., ET AL., DEFENDANTS/THIRD-PARTY PLAINTIFFS,
v.
TOWERS, PERRIN, FORSTER & CROSBY, INC., THIRD-PARTY DEFENDANT/FOURTH-PARTY PLAINTIFF,
v.
FRIDAY ELDREDGE & CLARK, LLP, FOURTH-PARTY DEFENDANT.



The opinion of the court was delivered by: Timothy S. Hogan United States Magistrate Judge

ORDER

(Beckwith, J.; Hogan, M.J.)

This matter is before the Court on Third-Party Defendant/Fourth-Party Plaintiff Towers Perrin's motion to compel production of documents from Defendants/Third-Party Plaintiffs Dillard's (Doc. 179), Defendants/Third-Party Plaintiffs Dillard's memorandum in opposition thereto (Doc. 187), and Towers Perrin's reply memorandum. (Doc. 194).

Towers Perrin seeks an order requiring the Dillard's Defendants to produce certain communications between the Dillard's Defendants and Friday, Eldredge & Clark relating to Towers Perrin's work on the termination of the pension plan the Dillard's Defendants inherited through its acquisition of Mercantile Stores, Inc. In response to certain discovery requests, the Dillard's Defendants submitted a privilege log for a number of responsive documents. Towers Perrin seeks production of communications between Joe Hurst and the Dillard's Defendants during the time of the Plan termination as listed in Exhibit C to Document 180.*fn1 Towers Perrin asserts that Hurst, an attorney at Friday Eldredge, was primarily responsible for directing Towers Perrin's work on the termination of the Plan and communicated crucial information to the Dillard's Defendants concerning the delays in the distribution of Plan benefits. Towers Perrin further asserts that Hurst was the appointed liaison for the Dillard's Defendants with regard to Towers Perrin. Towers Perrin states that Hurst was fully aware of the delay in lump sum distributions and specifically approved such distributions being made in February and March 1999, after the January 23, 1999 deadline that the Dillard's Defendants allege was missed. Towers Perrin contends that if the documents listed on the privilege log contain privilege communications,*fn2 as asserted by the Dillard's Defendants, Towers Perrin is nevertheless entitled to review such documents because the Dillard's Defendants have waived any claim to the attorney-client privilege by putting those communications "at issue" in this litigation. Towers Perrin points to the Dillard's Defendants Third-Party Complaint which alleges that Towers Perrin had a duty to communicate accurately but "failed to inform" the Dillard's Defendants of certain key information, information which Towers Perrin says was provided to attorney Hurst:

17. Among the duties Towers assumed under its contract with Defendants were: .to communicate accurately and completely with Defendants; [and] to advise Defendants regarding compliance with the Plan and the Employee Retirement Income Security Act of 1974, as amended ("ERISA")..

24. Several weeks after the December 18, 1998 letter, in a status letter dated January 8, 1999 to the Chief Financial Officer of Dillard's, who was a member of the Committee, Towers's Steven H. Klubock made no reference to the status of the questionable employees referenced in the December 18, 1998 letter or that there would be any delays in distributions. . . .

44. Although Towers did not inform Defendants that there would be any change in the schedule for the termination of the Plan, or its responsibility under the schedule for the termination of the Plan, or its responsibility under the schedule for payment of lump sum distributions by January 23, 1999, Towers represented to Defendants in e-mails in November 1998 and subsequently that the payment of lump sum distributions after January 31, 1999 due to Towers's delay in arranging for lump sum distributions would not impact the use of a GATT interest rate of

6.33% in determining the amount of such lump sum distributions.

48. Unknown to Defendants until the Spring of 2004, when it was discovered during the administrative process in this case by Defendants' counsel, a limited number of participants received a lump sum distribution of pension benefits based on Towers's use of 5.01% interest rate calculation. * * *

63. Due to Towers's concealment of this information from Defendants, Defendants were unable to discover the true facts. * * *

87. As set forth supra, Towers knowingly made misrepresentations and omitted disclosing material facts to Defendants. . . . (Third-Party Complaint (emphasis added by Towers Perrin)). Towers Perrin also cites to the Dillard's Defendants' Affirmative Defenses against Towers Perrin, wherein the Dillard's Defendants aver that Towers Perrin failed to inform Dillard's of certain other allegedly key information -- information that Towers Perrin says it provided directly to Mr. Hurst:

66. Towers knew or should have known on or about September 24, 1998 that it could not effect the distribution of all or substantially all lump sum payments to Plan participants by January 30, 1999. Towers never disclosed this fact to any of the Defendants. * * *

82. Two days before Towers's January 8, 1999 status report to Defendants, Towers's Jay Popky sent an e-mail to Towers's Thomas Cannon in which Popky proposed informing Plan participants that they would receive lump sum distributions either on February 28, 1999 or by March 31, 1999. Towers did not inform Defendants of this communication. (Answer of the Dillard's Defendants to Counterclaim of Towers Perrin, filed March 7, 2006 (emphasis added by Towers Perrin)). Towers Perrin contends that the Dillard's Defendants have squarely placed their communications with Friday Eldredge (specifically attorney Hurst) at issue in this litigation by claiming that Towers Perrin failed to notify the Dillard's Defendants that there would be a delay in the payments.

Towers Perrin further contends that the Dillard's Defendants used Hurst as a liaison between the Dillard's Defendants and Towers Perrin and therefore placed the communications with Hurst at issue. Towers Perrin presents evidence from Towers Perrin's employees who worked on the Plan termination that Hurst was the primary party giving them direction on the details of the Plan termination. (Doc. 194 at 15-16 and citations therein). Towers Perrin contends that by placing Hurst in a position where he directed the activities of Towers Perrin with regard to the Plan termination and ...


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