MARSH SUPERMARKETS, INC. v. MARSH
ORDER - granting 156 Motion in Limine. The Company and ERISA Plan are hereby barred from examining witnesses, offering evidence or commentary, or making reference to Mr. Marsh's prior invocation of the Fifth Amendment. *** SEE ORDER ***. Signed by Judge Sarah Evans Barker on 10/23/2012. (CKM)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF INDIANA
MARSH SUPERMARKETS, INC.,
DON E. MARSH,
DON E. MARSH,
Third Party Plaintiff,
EMPLOYMENT AGREEMENT BY AND )
BETWEEN DON E. MARSH AND
MARSH SUPERMARKETS, INC.,
Third Party Defendant.
ORDER GRANTING DEFENDANT’S MOTION IN LIMINE
Plaintiff, Marsh Supermarkets, Inc. (“the Company”), has filed this lawsuit to
recover financial losses allegedly caused by Defendant, Don E. Marsh, during his tenure as
Chairman and CEO of the Company. Asserting breach of contract, fraud, and a claim
under ERISA § 502(a)(3)(B)(ii) in its Amended Complaint, the Company has accused Mr.
Marsh of diverting Company funds to finance his extravagant lifestyle. The Court
initially denied summary judgment on all counts of the Amended Complaint and Mr.
Marsh’s counterclaim. However, upon reconsideration, the Court granted summary
judgment in Mr. Marsh’s favor with regard to the Company=s claim for fraud in the
inducement of his Employment Agreement and the Company’s obligation to pay his
attorneys’ fees related to the ERISA claim.1
The case is set for trial on February 4, 2013. Mr. Marsh has filed a motion in
limine [Docket No. 156] for an order barring the Company from “examining witnesses,
offering evidence, making reference to, or commenting upon” his earlier assertion of the
Fifth Amendment privilege against self-incrimination. Def.’s Br. at 8. As explained
below, the Court GRANTS the motion.
The purpose of a motion in limine is to “streamline trials and settle evidentiary
issues in advance, so that trials are not interrupted mid-course for the consideration of
lengthy and complex evidentiary issues.” United States v. Tokash, 282 F.3d 962, 968 (7th
Cir. 2002). A ruling on a motion in limine has been compared to “an advisory opinion by
the trial court,” see Wilson v. Williams, 182 F.3d 562, 570 (7th Cir. 1999) (citation
omitted), because it remains dependent upon events that may unfold at trial. See Luce v.
United States, 469 U.S. 38, 41 (1984). “Indeed[,] even if nothing unexpected happens at
trial, the district judge is free . . . to alter a previous in limine ruling.” Mason v. City of
Chicago, 631 F. Supp. 2d 1052, 1055 (N.D. Ill. 2009) (quoting Luce, 469 U.S. at 41-42).
District judges have significant discretion when ruling on a motion in limine. Jenkins v.
Chrysler Motor Corp., 316 F.3d 663, 664 (7th Cir. 2002).
We have instructed the parties that, “to the extent that Mr. Marsh’s attorneys’ fees and
costs relate to his ERISA claim in this lawsuit, the Company committed itself to pay for and,
therefore, must pay Mr. Marsh’s fees and costs as they are incurred.” Docket No. 146 at 10.
The Case Management Plan, as amended, has afforded the parties over two years to
complete all discovery concerning non-expert witnesses and liability. See Docket Nos. 21
(approving case management plan on July 9, 2009), 80 (extending deadlines for non-expert
witness and liability discovery to March 18, 2011), 134 (extending deadline for remaining
discovery to October 1, 2011). Pursuant to this plan, the Company began a lengthy oral
deposition of Mr. Marsh on July 22, 2010. Def.’s Reply at 5. That same day, Mr. Marsh
received a report from the Internal Revenue Service (IRS) indicating that, following its
audit of the Company, the IRS was likely to open a criminal investigation of his alleged
actions. Def.’s Br. at 1; Voyles Aff. ¶¶ 3, 5. The parties postponed the remainder of the
deposition so that Mr. Marsh could review the IRS report and confer with counsel.
Meanwhile, on July 22, 2010, Mr. Marsh engaged attorney James Voyles to represent him
in any criminal matter related to the IRS investigation. Voyles Aff. ¶ 2. Mr. Voyles has
stated as follows regarding his representation of Mr. Marsh:
I advised Mr. Marsh and Mr. McNeil that Mr. Marsh should invoke his Fifth
Amendment right to remain silent if the Company’s counsel asked him questions . .
. related to the subject matter that was under review, or potentially under review,
by the IRS Criminal Investigation Division. I gave such legal advice to Mr. Marsh
on the basis that his answers might be later used against him in a criminal
investigation by the IRS and/or other law enforcement agencies.
Id. ¶ 8.
Mr. Marsh’s deposition resumed on September 13, 2010. Early in that proceeding,
the Company asked him, “If . . . the records contain nothing except your credit card bills,
how do we determine why you spent this or that sum of money?” Marsh Dep. II at 309.
Mr. Marsh was instructed by counsel “not to answer in light of the pending IRS issues and
the suggestion that there[ were] criminal tax evasion charges afoot” and clarified that he
refused to answer the question based on his Fifth Amendment protection against
self-incrimination. Id. at 309, 311. According to the Company, Mr. Marsh asserted his
Fifth Amendment privilege 215 times on September 13, 2010 “in response to questions
bearing on core issues” such as the documentation of his expenditures and use of the
Company’s plane. Pl.’s Resp. at 1. The parties tabled his deposition that day, and the
IRS investigation proceeded in the interim.
On June 23, 2011, Mr. Marsh received a copy of a letter from the IRS reporting that
its investigation against the Company was closed.2 Accordingly, Mr. Voyles notes, on or
about August 22, 2011, he “advised Mr. Marsh and Mr. McNeil that [he] was comfortable
allowing Mr. Marsh to answer questions to which he previously asserted his Fifth
Amendment right to remain silent . . . after it became apparent that a likelihood of a
criminal investigation . . . had diminished.” Voyles Aff. ¶ 10. Counsel for the Company
received notification of Mr. Marsh’s decision to withdraw invocation of his Fifth
Amendment privilege at that time. Def.’s Br. at 2. In the ensuing colloquy of dispositive
motions, the Company included several references to Mr. Marsh’s prior assertion of this
privilege. E.g., Pl.’s Resp. to Mot. to Reconsider at 2, 4, 5; Pl.’s Br. for Second Mot. to
Reconsider at 2, 12, 16. Mr. Marsh now contends that “it is clear that the [C]ompany
The Company settled with the IRS and was assessed a negligence penalty rather than a
civil fraud penalty. Def.’s Br. at 2; Voyles Aff. ¶ 9.
intends . . . to bludgeon [him] at trial with the fact that, at one time, he asserted (upon the
advice of counsel) his constitutional right against self-incrimination.” Def.’s Br. at 3.
The third and final installment of Mr. Marsh’s deposition took place on August 30,
2012. Thus, in Mr. Marsh’s view, “by the time of trial, [he] will have answered every
question posed to him by the [C]ompany.” Def.’s Br. at 3. He filed the instant motion on
August 7, 2012, requesting that the jury hear nothing about his earlier invocation of the
Fifth Amendment privilege against self-incrimination. The Company rejoins that the
motion must be denied because Mr. Marsh “is trying to ‘abuse, manipulate or gain an
unfair strategic advantage.’” Pl.’s Resp. at 15 (quoting S.E.C. v. Smart, 678 F.3d 850, 855
(10th Cir. 2012)). We disagree; based on the record before us, we conclude that there was
nothing improper about Mr. Marsh’s exercise (and subsequent withdrawal) of this
well-enshrined constitutional right which the courts are entrusted to safeguard.
Clearly, “the Fifth Amendment3 does not forbid adverse inferences against parties
to civil actions when they refuse to testify in response to probative evidence offered against
them.” Baxter v. Palmigiano, 425 U.S. 308, 318 (1976); LaSalle Bank Lake View v.
Seguban, 54 F.3d 387, 389-91 (7th Cir.1995) (“The rule that adverse inferences may be
drawn from Fifth Amendment silence in civil proceedings has been widely recognized by
the circuit courts of appeals, including our own.”). The reasoning behind this rule is that
“[s]ilence is often evidence of the most persuasive character.” Daniels v. Pipefitters’
The Fifth Amendment provides, in relevant part, that “no person . . . shall be compelled in
any criminal case to be a witness against himself.” U.S. CONST. amend. V.
Ass’n Local Union No. 597, 983 F.2d 800, 802 (7th Cir. 1993) (quoting United States ex
rel. Bilokumsky v. Tod, 263 U.S. 149, 153-54 (1923)). But it is also clear that, because “a
stigma may somehow result from . . . reliance on the Self-Incrimination Clause,” Emspak v.
United States, 349 U.S. 190, 195 (1955), “any sanction which makes assertion of the Fifth
Amendment privilege ‘costly’” must be limited. Spevack v. Klein, 385 U.S. 511, 515
(1967); see also Baxter, 425 U.S. at 326 (emphasizing the Fifth Amendment’s protection
of “the right of a person to remain silent unless he chooses to speak in the unfettered
exercise of his own will, and to suffer no penalty . . . for such silence”). Consequently, the
Seventh Circuit has interpreted Baxter “to mean that the negative inference against a
witness who invokes the Fifth Amendment in a civil case is permissive, not required.”
Evans v. City of Chicago, 513 F.3d 735, 741 (7th Cir. 2008). Ultimately, the Court must
evaluate a motion based on the assertion of this privilege with an eye toward the particular
facts of the case at bar. See Louis Vuitton Malletier S.A. v. LY USA, Inc., 676 F.3d 83, 100
(2d Cir. 2012); Davis-Lynch, Inc. v. Moreno, 667 F.3d 539, 546 n.10 (5th Cir. 2012) (citing
Evans, 513 F.3d at 743).
Mr. Marsh maintains that the circumstances of this case warrant an order granting
his motion in limine for three reasons. Relying on the Seventh Circuit’s holdings in
Evans, 513 F.3d at 743, and Harris v. Chicago, 266 F.3d 750 (7th Cir. 2001), he asserts that
the Court may exclude evidence of his exercise of the privilege against self-incrimination
because “(1) the privilege was asserted in good faith; (2) the privilege was withdrawn in
time to complete discovery before trial; and . . . (3) the [Company] is not prejudiced by the
withdrawal” of the privilege.” Def.’s Br. at 3. Our review of the record brings us to the
same conclusion; to that end, we address each of Mr. Marsh’s proffered reasons in turn.
It is axiomatic that a civil litigant ought not to invoke the Fifth Amendment to
thwart proceedings. See Ienco v. Angarone, 429 F.3d 680, 685 (7th Cir. 2005) (approving
sanctions for party who relied on the Self-Incrimination Clause as an “obstructionist
tactic”). Conversely, it is proper for a civil litigant to assert the Fifth Amendment
privilege “if [his] testimony would be incriminating, or if it would ‘furnish a link in the
chain of evidence needed to prosecute the claimant for a federal crime.’” United States v.
George, 363 F.3d 666, 671 (7th Cir. 2004) (quoting Hoffman v. United States, 341 U.S.
479, 486 (1951)). This appears to be precisely what Mr. Marsh did, i.e., he asserted his
essential constitutional right because “the surrounding facts and circumstances indicate[d]
a ‘real and appreciable’ risk of incrimination.” Def.’s Br. at 4 (quoting Minor v. United
States, 396 U.S. 87, 98 (1969)). During the course of discovery, he had learned that the
IRS’s criminal division was very likely to investigate the same set of facts giving rise to the
Company’s lawsuit against him. That the IRS was not transparent with Mr. Marsh
concerning the status of its investigation is irrelevant; “[t]he court does not require a
showing that there [was] a pending criminal investigation.” Bear Sterns & Co. v. Wyler,
182 F. Supp. 2d 679, 684 (N.D. Ill. 2002). Rather, Mr. Marsh was entitled to “take the
Fifth” as long as he reasonably believed the disclosures in question could be used against
him in a criminal proceeding. Kastigar v. United States, 406 U.S. 441, 444-45 (1972); see
also United States v. Schaal, No. 08-MC-8, 2008 WL 5423980, at *3-4 (E.D. Wis. Dec. 30,
2008) (noting that the IRS often pursues civil and criminal investigations simultaneously
before making any official recommendation).
Despite the fact that Mr. McNeil (civil counsel for Mr. Marsh) and Mr. Voyles both
advised Mr. Marsh to assert the Fifth Amendment privilege as he did, the Company
maintains that such assertions occurred in bad faith because they were “inconsistent,”
“random,” and “in response to questions that could not possibly have incriminated him.”
Pl.’s Resp. at 12. The Company makes much of an excerpt from the third day of Mr.
Marsh’s deposition wherein Mr. Marsh repeatedly insisted, “Nothing incriminates me.”
See id. at 14-15 (citing Marsh Dep. III). We are not persuaded that this statement
conclusively establishes bad faith. As our colleague in the Northern District of Illinois
wisely noted, “[i]is not necessary . . . that the person [invoking his right against
self-incrimination] establish the precise manner in which he will incriminate himself by
responding.” United Auto. Ins. v. Veluchamy, No. 09-C-5487, 2010 WL 749980, at *2 n.2
(N.D. Ill. Mar. 4, 2010). Such a requirement would vitiate the privilege entirely. Thus,
“[t]o sustain the privilege, it need only be evident from the implications of the question . . .
that a responsive answer to the question or an explanation of why it cannot be answered
might be dangerous because injurious disclosure could result.” Id. (citing Hoffman, 341
U.S. at 486-87).
Comparing the facts of this lawsuit to those in Evans provides clarity regarding the
issue of good faith. Evans involved police officers who invoked their Fifth Amendment
privilege during discovery due to concern regarding a special prosecutor’s pending
investigation of police conduct. Evans, 513 F.3d at 738-39. Three of these officers
explained that they based their decision not to testify on advice of counsel; another officer
explained that he was worried about the breadth of the investigation and whether he was a
target. Id. at 743. After reviewing the record, the Seventh Circuit held that the district
judge “reasonably could have concluded that the officers were not ‘gaming’ the system but
rather were concerned about the special prosecutor’s investigation . . . [, which] indicate[d]
a good-faith invocation of the Fifth Amendment.” Id.
No aspect of Mr. Marsh’s case suggests that we should abandon such reasoning to
infer an intent to thwart the Company. Moreover, although we are well-acquainted with
the operative facts in this lawsuit, it is not our task to predict the likelihood of criminal
prosecution following an IRS audit. Nor would Mr. Marsh’s Fifth Amendment privilege
depend on such prognostication. See Resnover v. Pearson, 965 F.2d 1453, 1462 (7th Cir.
1992) (citing In re Folding Carton Antitrust Litig., 609 F.2d 867, 871 (7th Cir. 1979)). In
any event, our retrospective analysis indicates that Mr. Marsh’s perception of more than a
“fanciful possibility of prosecution,” Resnover, 965 F.2d at 1462, was justified. We
therefore conclude that he asserted his Fifth Amendment privilege against
self-incrimination in good faith.
Furthermore, we agree that Mr. Marsh withdrew his Fifth Amendment privilege in
time to complete discovery before trial in this case. He retracted his assertion of the
privilege on August 22, 2011 and contemporaneously informed the Company that he was
available to finish his deposition. Cognizant of these timing issues, on August 24, 2011,
the Court vacated the settings for the pretrial conference and trial while taking Mr. Marsh’s
summary judgment motion under advisement. The Court reset the trial for October 15,
2012 after ruling on the motion for summary judgment. Curiously, the Company did not
attempt to reopen its deposition of Mr. Marsh until July 19, 2012, see Def.’s Br. at 2, nearly
one year after Mr. Marsh had made clear that he no longer claimed Fifth Amendment
protection. Case law within our circuit supports the Court’s conclusion that the timing of
Mr. Marsh’s actions gave the Company ample time to prepare for trial (which, incidentally,
is now set for early 2013, as previously noted). E.g., Evans, 543 F.3d at 745 (approving
five weeks’ notice); Hawkins v. St. Clair Cnty., No. 07-142-DRH, 2009 WL 559373, at *5
n.2 (S.D. Ill. Mar. 5, 2009) (approving one month’s notice); c.f. Harris, 266 F.3d at 755
(rejecting day-of-trial “notice”). With no explanation from the Company as to any special
circumstances making the above-referenced schedule unsatisfactory, we cannot reach the
conclusion the Company invites. Simply put, the Company is not entitled to wait nearly
one year to continue deposing Mr. Marsh and then complain about insufficient time to
Finally, we address whether Mr. Marsh’s withdrawal of the Fifth Amendment
privilege against self-incrimination prejudiced the Company and impeded its efforts to
obtain discovery. The Company contends that the timing and circumstances of Mr.
We are well aware that, as the Company notes, either party could have sought a stay of
discovery while the IRS investigation was pending. The Company asserts that because such
remedy was available to Mr. Marsh, he should now “bear the consequences.” The same is true
with respect to the Company.
Marsh’s assertion of the privilege clearly evince prejudice. Between September 13, 2010
(privilege assertion) and August 22, 2011 (privilege revocation),5 the Company deposed
twenty-seven witnesses and an expert, filed its expert report, and briefed a summary
judgment motion. Pl.’s Resp. at 7. These efforts notwithstanding, the Company alleges
that Mr. Marsh’s Fifth Amendment silence thwarted discovery of his expense
documentation practices (including whether he used the Company’s customary expense
report). The Company concedes that discovery yielded “valuable information” but argues
that deposing its witnesses “without Mr. Marsh’s full and complete testimony” was
It is the Company’s position that “conducting multiple depositions again to make up
for the fact that Mr. Marsh stonewalled the Company would be neither feasible nor fair.”
Pl.’s Resp. at 8. Our understanding of this lawsuit differs markedly from the Company’s
stance concerning fairness. In the first place, we are not persuaded that Mr. Marsh’s
assertion of the Fifth Amendment privilege against self-incrimination can be fairly
characterized as “stonewalling.” We have already deemed Mr. Marsh’s withdrawal of the
privilege timely; he revoked his exercise of this right to remain silent as soon as he knew
that the possibility of prosecution was remote. Indeed, the eleven months following such
withdrawal afforded the Company a generous opportunity to seek amended answers to all
discovery and conduct any necessary depositions. The Company failed to use this time to
full advantage and, as described above, did not reopen Mr. Marsh’s deposition until August
Fact discovery closed during this time period. Pl.’s Resp. at 7.
2012. Now, without attempting to explain or justify its delay, the Company argues that
obtaining full discovery before trial will be prejudicial. This conclusion is not reflective
of the evidence in the record.
We recognize, of course, that asserting the Fifth Amendment privilege against
self-incrimination does on occasion rise to the level of “stonewalling.” See Cioffi v.
United States, 419 U.S. 917, 917 (1974). Even so, it seems patently inappropriate to apply
this term to situations where the party in question has, in fact, cooperated during the
discovery process. The instant lawsuit presents such circumstances, as Mr. Marsh’s
discovery behavior has left little to be desired. He has provided responses to all written
discovery, documents totaling over 25,000 pages, and three full days of deposition
testimony. Def.’s Reply at 9. Moreover, he cooperated with two sets of interrogatories
served on him after he invoked the Fifth Amendment. Beyond that which Mr. Marsh has
already furnished, the Company has also gained substantial information from thirty-six
depositions (including expert witnesses) and fourteen non-party subpoenas for documents.
Def.’s Br. at 6. We are therefore more than a bit perplexed by the Company’s argument
that it is impracticable and unfair to depose Garry Adams “and likely others,” see Pl.’s
Resp. at 8, before the trial commences in February 2013. Especially puzzling is the
Company’s sudden need for certain information regarding “other witnesses” Mr. Marsh
identified during the final chapter of his deposition. As Mr. Marsh suggests, nothing
prevented the Company from obtaining the answers it now seeks during the first two days
of his deposition. Having reviewed the portions of the deposition to which the Company
cites, we conclude that any remaining knowledge shortfall is attributable not to
“stonewalling” by Mr. Marsh, but rather to the Company’s failure to ask him the questions
that, properly framed, would have elicited that information.
We are similarly unconvinced that Mr. Marsh’s Fifth Amendment silence will have
appreciable probative value at trial. The Company’s argument that such silence
eviscerated its dismissed fraudulent inducement claim is unavailing. Each installment of
Mr. Marsh’s deposition testimony is replete with answers discussing his expenses and
documentation thereof. See Def.’s Reply at 15-19 (providing numerous examples).
None of these responses suggests that, but for Mr. Marsh’s Fifth Amendment silence, the
Company would have successfully met its burden of pleading and proving fraudulent
inducement. In short, there is nothing new about Mr. Marsh’s third day of deposition
testimony that would provide an otherwise lacking factual basis for this extinguished
claim. By the same token, Mr. Marsh’s Fifth Amendment silence bears no relevance to
the following claims and defenses: that his alleged conduct, which never resulted in a
criminal conviction, somehow triggered the “felony or fraud” provision of his
Employment Agreement;6 that such alleged contact constituted criminal conversion; or
that Mr. Marsh may be guilty of fraud and deceit. Any minimal probative attributable to
Mr. Marsh’s invocation of the Fifth Amendment is, in our view, substantially outweighed
by the prejudicial effect of allowing jurors to draw an adverse inference from his good faith
This provision deals with the Company’s prior ability to terminate Mr. Marsh’s
employment “for cause.” Empl. Agrmt. § 8.1.
reliance on this constitutional right. Thus, pursuant to Federal Rule of Evidence 403, we
will exclude all evidence of Mr. Marsh’s prior Fifth Amendment silence.
For the foregoing reasons, the Court concludes that Mr. Marsh has asserted and
subsequently withdrawn his Fifth Amendment privilege against self-incrimination in a
manner that comports with the Constitution, well-established Seventh Circuit case law, and
a sound exercise of our discretion in ruling on this motion in limine. Accordingly, Mr.
Marsh’s Motion in Limine is GRANTED. The Company and ERISA Plan are hereby
barred from examining witnesses, offering evidence or commentary, or making reference
to Mr. Marsh’s prior invocation of the Fifth Amendment.
IT IS SO ORDERED.
SARAH EVANS BARKER, JUDGE
United States District Court
Southern District of Indiana
Christopher William Smith
FAEGRE BAKER DANIELS LLP - Indianapolis
Andrew M. McNeil
BOSE MCKINNEY & EVANS, LLP
Jonathan Lamont Mayes
BOSE MCKINNEY & EVANS, LLP
Kellie M. Barr
BOSE MCKINNEY & EVANS, LLP
Winthrop James Hamilton
BOSE MCKINNEY & EVANS, LLP
David K. Herzog
FAEGRE BAKER DANIELS LLP - Indianapolis
FAEGRE BAKER DANIELS LLP - Indianapolis
Ryan Michael Hurley
FAEGRE BAKER DANIELS LLP - Indianapolis
Bernie W. (Too) Keller
KELLER MACALUSO LLC
C. Joseph Russell
KRIEG DEVAULT LLP
Linda Joy Cooley
KRIEG DEVAULT, LLP
Emily L. Yates
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?