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Marsh Supermarkets, former CEO spar over attorney fees

Scott Olson
September 12, 2013
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The years-long legal spat between Don Marsh and the company he once led appeared to have concluded this summer, but has now turned to attorney fees and who’s paying the million-dollar bills.

In court documents, attorneys for Marsh and Marsh Supermarkets Inc. each have submitted expenses totaling roughly $1.7 million and are seeking reimbursement from the other. The requests have drawn sharp rebukes from both sides.

“Neither the court nor the company can determine without discovery the extent to which Mr. Marsh’s request is over-inclusive,” lawyers for Marsh Supermarkets wrote in a Sept. 3 court document. “But the fact that it is over-inclusive is apparent on the face of the request.”

The argument over attorney fees marks the latest dispute in the four-year federal court battle in which Don Marsh won a partial victory.

In July, Judge Sarah Evans Barker issued an order allowing him to keep nearly $2.2 million in severance paid by Marsh Supermarkets, which had attempted to recover the payments from its former CEO.

However, Marsh ended up losing nearly the same amount on another issue. Barker's order followed a two-week civil trial in February after which a federal jury ordered Marsh to pay the local grocery chain $2.2 million, finding that he used company money to finance global travels to entertain mistresses and other unnecessary personal expenses.

Many of the arguments presented by both sides involved the Employee Retirement Income Security Act, or ERISA, a federal law governing pension plans. Marsh’s victory on his ERISA claim for his severance also is at the crux of the fight over attorney fees.

Barker found that Marsh can recover attorney fees relating to his ERISA claims. But she also determined that the company can recover fees relating to non-ERISA claims.

Lawyers for Don Marsh argue that because the ERISA- and non-ERISA-related issues flow from the same set of facts presented at trial, “all fees and expenses in this case are ERISA-related.”

Marsh Supermarkets strongly disagrees.

“It was not his prerogative to say, ‘Here is just about everything’ and then leave it to the court and the company to try to determine from his supporting records what was attributable to ERISA and what was not,” company lawyers wrote.

Conversely, Marsh Supermarkets is asking Marsh to pay its $1.7 million attorney bill for costs relating to only the non-ERISA claims that it succeeded in proving during the trial.

Marsh argues that there’s no legal basis to award the company attorney fees.

“The plain language of the ERISA plan leaves the court with a ‘straightforward’ task that is ‘not a matter of discretion’ when it grants Mr. Marsh his attorneys’ fees, litigation expenses, and costs but makes no provision for the company,” Don Marsh’s lawyers wrote in a Sept. 9 court filing.

Marsh Supermarkets is represented by David Herzog of Faegre Baker Daniels and Don Marsh by Andrew McNeil of Bose McKinney & Evans LLP. Both declined to comment on the fee dispute.

The fight between the two erupted in 2009, when Marsh Supermarkets sued Marsh in federal court. He countersued, asserting the company improperly withheld his post-retirement payouts in 2008 and still owed him about $2.1 million.

Marsh left the company he had led since the late 1960s following its purchase in September 2006 by Sun Capital Partners, a Florida private equity firm.

Marsh Supermarkets stopped the severance payments after it said an Internal Revenue Service audit found “disallowed deductions” for personal expenses he racked up from April 2004 to September 2006. The company ultimately paid the IRS a $616,000 penalty.

The nine-member jury in February found that Marsh committed breach of contract and fraud, but stopped short of delivering Marsh Supermarkets a total victory.

Although the grocery chain asked for $1.6 million to cover expenses and penalties related to the IRS audit, the jury awarded the company half that amount on its fraud claim, saying it shared responsibility. The jury also awarded the company $1.4 million on its breach-of-contract claim.

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  1. What a fine article, thank you! I can testify firsthand and by detailed legal reports (at end of this note) as to the dire consequences of rejecting this truth from the fine article above: "The inclusion and expansion of this right [to jury] in Indiana’s Constitution is a clear reflection of our state’s intention to emphasize the importance of every Hoosier’s right to make their case in front of a jury of their peers." Over $20? Every Hoosier? Well then how about when your very vocation is on the line? How about instead of a jury of peers, one faces a bevy of political appointees, mini-czars, who care less about due process of the law than the real czars did? Instead of trial by jury, trial by ideological ordeal run by Orwellian agents? Well that is built into more than a few administrative law committees of the Ind S.Ct., and it is now being weaponized, as is revealed in articles posted at this ezine, to root out post moderns heresies like refusal to stand and pledge allegiance to all things politically correct. My career was burned at the stake for not so saluting, but I think I was just one of the early logs. Due, at least in part, to the removal of the jury from bar admission and bar discipline cases, many more fires will soon be lit. Perhaps one awaits you, dear heretic? Oh, at that Ind. article 12 plank about a remedy at law for every damage done ... ah, well, the founders evidently meant only for those damages done not by the government itself, rabid statists that they were. (Yes, that was sarcasm.) My written reports available here: Denied petition for cert (this time around): http://tinyurl.com/zdmawmw Denied petition for cert (from the 2009 denial and five year banishment): http://tinyurl.com/zcypybh Related, not written by me: Amicus brief: http://tinyurl.com/hvh7qgp

  2. Justice has finally been served. So glad that Dr. Ley can finally sleep peacefully at night knowing the truth has finally come to the surface.

  3. While this right is guaranteed by our Constitution, it has in recent years been hampered by insurance companies, i.e.; the practice of the plaintiff's own insurance company intervening in an action and filing a lien against any proceeds paid to their insured. In essence, causing an additional financial hurdle for a plaintiff to overcome at trial in terms of overall award. In a very real sense an injured party in exercise of their right to trial by jury may be the only party in a cause that would end up with zero compensation.

  4. Why in the world would someone need a person to correct a transcript when a realtime court reporter could provide them with a transcript (rough draft) immediately?

  5. This article proved very enlightening. Right ahead of sitting the LSAT for the first time, I felt a sense of relief that a score of 141 was admitted to an Indiana Law School and did well under unique circumstances. While my GPA is currently 3.91 I fear standardized testing and hope that I too will get a good enough grade for acceptance here at home. Thanks so much for this informative post.

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