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1210 Colvin Avenue, Inc. v. Tops Markets

December 27, 2006

1210 COLVIN AVENUE, INC., NOW KNOWN AS DASH MARKETS, INC., PLAINTIFF,
v.
TOPS MARKETS, L.L.C., DEFENDANT.



The opinion of the court was delivered by: John T. Elfvin S.U.S.D.J.

MEMORANDUM and ORDER*fn1

INTRODUCTION

In this action, the plaintiff 1210 Colvin Avenue, Inc. ("Colvin") alleges that the defendant, Tops Markets L.L.C. ("Tops")*fn2 , violated various provisions of the Robinson-Patman Anti- Discrimination Act, 15 U.S.C. §13 et seq., by selling goods to Colvin for Colvin's resale at prices substantially higher than those charged to other retailers ("Favored Purchasers") in that Tops passed along to Favored Purchasers discounts and allowances received by Tops from its suppliers but failed to pass along to Colvin the same discounts and allowances.*fn3 Colvin also alleges that Tops paid money and/or provided services to Favored Purchasers selling certain goods supplied by Tops, while failing to provide proportionally equal sums or assistance to Colvin for its sales of the same or equivalent products. Colvin alleges that Tops's conduct impaired its ability to compete with other local retailers including the Favored Purchasers. Currently pending before the Court is Tops's Motion to Disqualify Colvin's trial consultants Bridgepoint Partners, LLC ("Bridgepoint") and Colvin's counsel, the law firm of McGee & Gelman.*fn4

BACKGROUND

Beginning in 1975, Colvin entered into several agreements with Tops whereby Colvin operated two B-Kwik retail grocery stores. Thereafter, Colvin opened a third store and all three Colvin stores - as of the Fall of 2002 - were subject to License Agreements, Bookkeeping and Administrative Services Agreements, Supply Agreements and Scanning Agreements (collectively "Operating Agreements") with Tops. Pursuant to the Operating Agreements, Colvin deposited money into an account with Tops ("the Code Account") and Tops would utilize those funds in order to satisfy certain financial obligations of Colvin including payments to suppliers and payroll.*fn5

Colvin alleges that Tops - in order to increase its profitability and bolster the flagging finances of its corporate parent, Ahold - began to withhold from Colvin certain price discounts and allowances it had previously provided and failed to provide money payments and/or services for the sale of certain goods, but that Tops continued to provide the discounts and allowances, money payments and/or services to Favored Purchasers. Thereby, Tops's profitability increased and Colvin's profitability decreased. Colvin alleges that such conduct took place from on or before August 2002 until on or about July 2003, when Colvin's affiliation with Tops was terminated.

Colvin first brought this dispute to Tops's attention by a March 2003 letter from its counsel, McGee & Gelman. Upon receipt of Colvin's letter, Tops began an internal investigation of the claims. In April 2003 the parties engaged in negotiations in an effort to resolve the dispute, but such efforts failed and Colvin commenced this lawsuit on May 30, 2003.

On May 6, 2004, Colvin retained Bridgepoint Partners, LLC ("Bridgepoint") to assist Colvin in this litigation. Bridgepoint is a consulting firm owned in part or in whole by Michael Casciano ("Casciano") and Daniel Fulham ("Fulham"), two former Tops employees. Both Casciano and Fulham worked at Tops at the time the dispute came to light and Casciano continued to work at Tops after this lawsuit was commenced and until January 2004.*fn6 In September 2004, Tops filed a motion to disqualify both Bridgepoint and McGee & Gelman. By Order dated November 26, 2004, this Court denied the motion without prejudice and directed the parties to undertake discovery as to the extent of Casciano's and Fulham's exposure, if any, to Tops's privileged information while employed there and the extent of Bridgepoint's work for Colvin. Upon completion of that discovery, Tops re-filed the instant Motion.

FACTS

Tops employed Fulham from August 1996 to May 2003.*fn7 At the time of the relevant events, Fulham was Director of Category Management.*fn8 From November 1993 to January 2004, Tops employed Casciano as, among other things, Senior Director of Category Management Support. (Casciano 2005 Dec. ¶ 9.) In his position, Casciano performed analyses of "billbacks" and other pricing issues relevant to the relationship between Tops and B-Kwik grocery store owners, including Colvin. Casciano routinely provided both the bases for his analyses and the results thereof to B-Kwik owners, including Colvin. (Casciano 2005 Dec. ¶ 16, 18.)

Even after this dispute came to light, Casciano continued to perform such analyses and continued to share his results with Colvin. For example, sometime after the dispute came to light, Casciano informed Colvin that his analyses showed that Tops owed one of Colvin's stores more than $31,000 - significantly more than the $12,000 Colvin claimed it was owed. (Casciano 2005 Dec. ¶ 12, 25.) Not all such information continued to be shared, however. Casciano declined to share with Colvin an analysis of billbacks in July 2003, noting that he was doing so "per John Mineo"*fn9 and that all communications concerning the billbacks were being funneled through Mineo.*fn10 (Casciano 2005 Dec. ¶ 33.) Casciano believed he was instructed not to share the results either because the results were not complete or because in-house counsel wanted a single point of contact with Colvin in light of the litigation. (Casciano 2005 Dec. ¶ 34.)

Casciano and Fulham participated in Tops's efforts to investigate Colvin's complaints and in Tops's efforts to resolve the dispute short of litigation. At their supervisor's request, both Casciano and Fulham reviewed Colvin's March 2003 letter outlining its complaints. (Casciano 2005 Dec. ¶ 13; Casciano Depo. at 22-23.) Both Casciano and Fulham were the recipients of several e-mails pertaining to the dispute from Tops's General Counsel John Mineo.*fn11 In late March or early April 2003 Casciano and Fulham attended a meeting of certain Tops executives and Tops's in-house and litigation counsel in preparation for a negotiation meeting with Colvin and its representatives, including McGee & Gelman. (Casciano 2005 Dec. ¶ 13, 30.) Both Casciano and Fulham attended that negotiation meeting on April 1, 2003.*fn12 (Casciano 2005 Dec. ¶ 13.) Casciano also attended a follow-up meeting after the negotiation. At the meetings, Tops's counsel discussed the facts of the case and divulged their mental impressions, strategy and theories of defense.*fn13 Casciano did not consider any information divulged at those meetings to be protected by the attorney-client privilege and stated that he has no general understanding of the parameters of that privilege.*fn14

Casciano was asked to investigate a portion of Colvin's claims regarding pricing and to provide information to Tops's executives and to counsel regarding the matters in dispute. Casciano asserts that he provided only "factual" information, that he was neither asked for nor did he provide his opinion as to the matters in issue and that he did not recall being present at any time in which legal advice was being dispensed to Tops's executives. (Casciano 2005 Dec. ¶ 31, 43.)*fn15 Casciano spoke with Tops's litigation counsel by telephone on at least one occasion and reviewed at counsel's request a declaration or affidavit in support of a motion to dismiss to be filed with the Court. (Casciano Depo. pp. 117-119.)

Casciano had no further contact with Tops's counsel regarding this matter and performed no task with respect to this litigation after September 2003. Casciano continued to work for Tops until January 2004.*fn16

After Casciano left Tops's employ in January 2004, he formed Bridgepoint together with Fulham. (Casciano 2005 Dec. ¶ 10.) In the Spring of 2004, Bridgepoint solicited Colvin through McGee & Gelman to provide consulting services regarding the instant matter because Casciano and Fulham believed their experience in the industry generally and with Tops in particular would be useful to Colvin. (Casciano Dec. ¶ 49.) Bridgepoint's retention letter of May 6, 2004 indicates that it would provide various services to Colvin and McGee & Gelman, including:

"identify business process and controls prior to 2001; identify changes to B-Kwik with MICS Pricing System in 2000; identify changes to B-Kwik with conversion to BIB bill back System 2001; identify changes to BKwik with initial transition from Wilson Farms Division to Supermarket Division in 2002; identify changes to B-Kwik with transition from Tops Super Distribution Center to C&S Wholesale/Erie Logistics 2002; map process changes and impact to each area of B-Kwik; provide detailed analysis of impact to cost, margin and shrink; provide expert testimony as required."

Bridgepoint Retention Letter (internal numbering omitted).

Casciano and Fulham were repeatedly warned by McGee & Gelman not to disclose any communications they may have had with Tops's counsel. (Fulham Oct. Aff. ¶ 5, 23, 24; Casciano 2005 Dec. ¶ 50-53; McGee 2004 Dec. ¶¶ 5-9.)*fn17 Casciano and Fulham were given such warning at every or nearly every meeting with Colvin's counsel. (Casciano 2005 Dec. ¶ 54.) Casciano and Fulham deny that they have ever disclosed to Colvin or to McGee & Gelman any communications they may have had with counsel for Tops. (Fulham Oct. Aff. ¶ 4, 22; Casciano 2005 Dec. ¶ 1(a), 55.) Likewise, McGee & Gelman denies that ...


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