Magistrate reverses David Marsh deposition ruling

Back to TopCommentsE-mailPrintBookmark and Share

In a striking reversal, a federal court judge now says lawyers representing Marsh Supermarkets Inc. can depose David A. Marsh in the company’s lawsuit against his father, Don Marsh.

Marsh Supermarkets' lawsuit alleges that its former CEO, Don Marsh, misused funds by treating the business “like his personal checkbook” to bankroll extravagant trips, maintain vacation homes and hide relationships with female employees.

The grocery chain is represented by Indianapolis-based Baker & Daniels LLP, which once did estate planning for David Marsh.

U.S. Magistrate Tim A. Baker last month sided with David Marsh in his argument that the law firm’s previous work it did for him presented a conflict of interest.

But, in a June 3 order, Baker said David Marsh since has admitted he waited until three days before the March deposition was to occur before raising the conflict argument even though he previously said he raised the issue in August—when an investigation by the Internal Revenue Service first came to light.

Court filings in April raised the possibility for the first time that the IRS inquiry into the expenses of David Marsh submitted for reimbursement may lead to federal charges.

“It now turns out, contrary to his prior assertion, that David did not raise the conflict in August 2010 when the IRS came into the picture,” Baker wrote in his reversal. “Instead, he waited until March 2011. This new factual scenario provides a proper basis for this court to depart from its prior conclusion.”

Baker said Marsh Supermarkets’ reply to his original ruling “sets forth a compelling litany of undisputed facts that depict an unreasonably delayed response by David.”

Among the facts are invoices Baker & Daniels produced to David Marsh and his lawyer showing that the firm had provided him estate planning services, of which David Marsh and his counsel had been aware for years without ever making an objection, Baker & Daniels’ lawyer David Herzog argued.

David Marsh’s lawyer countered that she was not aware of the conflict until three days before the March deposition after a “refreshed review of the B&D invoices.”

“However, counsel’s failure to adequately review the invoices for a conflict when she received them does not provide a sufficient justification for the delay,” Baker wrote.

David Marsh’s lawyer, Linda Cooley, declined to comment on the reversal.

Herzog would only say that “we’re pleased.”

Local lawyer Alan Brown, chairman of Cincinnati-based Frost Brown Todd LLC’s business litigation practice, said reversals do occur from time to time.

"Pretrial discovery disputes like this are dynamic matters," he said, "so it's not all that unusual for a federal magistrate to reassess a position when new information comes to light."

Like his father, David Marsh has battled the grocery store chain’s new owner, Florida-based private-equity firm Sun Capital Partners, over expenses the firm deemed improper.

David Marsh served as president of Marsh Supermarkets until February 2006. Don Marsh was CEO until September that year, when Sun completed its acquisition of the company. David Marsh now is president of the Crystal Flash convenience store chain.

Baker & Daniels represented Marsh Supermarkets in David Marsh’s suit filed in 2006 charging that Sun Capital Partners shorted him about $102,000 on a $2.1 million severance package. Both sides agreed to a confidential settlement in 2007.

Baker & Daniels helped David Marsh complete estate-planning documents before he sued his former employer in 2006. That legal work presents enough of a conflict that should prevent the firm from deposing him, he had argued in court documents.

Don Marsh got the ax as CEO just after Sun Capital bought the then-publicly owned grocery chain for $88 million in cash, plus the assumption of $237 million in debt.

The issue of what is considered reimbursable expenses is at the crux of Don Marsh’s defense, as well.

The IRS on May 17 reached a settlement with Marsh Supermarkets regarding nearly $5.3 million in personal travel and entertainment expenses reimbursed by the company to Don Marsh.



  • B&D should have known better
    Baker and Danials was aware that they had done work for Marsh. Even before accepting to represent the plaintiff. They new it was a conflict and shold not have accepted the job. Greed is a terrible thing.

Post a comment to this story

We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
You are legally responsible for what you post and your anonymity is not guaranteed.
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
Subscribe to IBJ
  1. By Mr. Lee's own admission, he basically ran pro-bono ads on the billboard. Paying advertisers didn't want ads on a controversial, ugly billboard that turned off customers. At least one of Mr. Lee's free advertisers dropped out early because they found that Mr. Lee's advertising was having negative impact. So Mr. Lee is disingenous to say the city now owes him for lost revenue. Mr. Lee quickly realized his monstrosity had a dim future and is trying to get the city to bail him out. And that's why the billboard came down so quickly.

  2. Merchants Square is back. The small strip center to the south of 116th is 100% leased, McAlister’s is doing well in the outlot building. The former O’Charleys is leased but is going through permitting with the State and the town of Carmel. Mac Grill is closing all of their Indy locations (not just Merchants) and this will allow for a new restaurant concept to backfill both of their locations. As for the north side of 116th a new dinner movie theater and brewery is under construction to fill most of the vacancy left by Hobby Lobby and Old Navy.

  3. Yes it does have an ethics commission which enforce the law which prohibits 12 specific items. google it

  4. Thanks for reading and replying. If you want to see the differentiation for research, speaking and consulting, check out the spreadsheet I linked to at the bottom of the post; it is broken out exactly that way. I can only include so much detail in a blog post before it becomes something other than a blog post.

  5. 1. There is no allegation of corruption, Marty, to imply otherwise if false. 2. Is the "State Rule" a law? I suspect not. 3. Is Mr. Woodruff obligated via an employment agreement (contractual obligation) to not work with the engineering firm? 4. In many states a right to earn a living will trump non-competes and other contractual obligations, does Mr. Woodruff's personal right to earn a living trump any contractual obligations that might or might not be out there. 5. Lawyers in state government routinely go work for law firms they were formally working with in their regulatory actions. You can see a steady stream to firms like B&D from state government. It would be interesting for IBJ to do a review of current lawyers and find out how their past decisions affected the law firms clients. Since there is a buffer between regulated company and the regulator working for a law firm technically is not in violation of ethics but you have to wonder if decisions were made in favor of certain firms and quid pro quo jobs resulted. Start with the DOI in this review. Very interesting.