Judge dismisses Coughlin’s outrage claim against Mars
Posted on Wednesday, August 20, 2008
BENTONVILLE - The only issue remaining in Wal-Mart's legal fight with Tom Coughlin may be whether the retailer's former vice chairman's retirement agreement is a valid contract.
Circuit Judge Jay Finch may have made the case a little simpler Tuesday by dismissing Coughlin's claim of outrage that he made in a counterclaim against Wal-Mart. Wal-Mart attorneys filed a motion of summary judgment seeking the counterclaim's dismissal.
Wal-Mart originally filed the suit against Coughlin in an attempt to void his retirement agreement. The suit claims Coughlin was part of a conspiracy to defraud Wal-Mart. Wal-Mart claims Coughlin misappropriated hundreds of thousands of dollars for his personal benefit through fraudulent transactions.
Coughlin filed a counterclaim alleging breech of contract and outrage against Wal-Mart. In the counterclaim, Coughlin alleged that Wal-Mart general counsel Tom Mars made threats to destroy Coughlin's relationship with his wife and children. The counterclaim sought unspecified damages from the retailer for emotional distress.
Finch informed attorneys in a letter of his decision to grant Wal-Mart's motion to dismiss Coughlin's counterclaim of outrage.
The judge based his opinion on two issues • Even if true, Mars' statements do not rise to the level of such outrageous behavior as to support the counterclaim; and • There is no evidence that would give rise to a factual dispute that Coughlin's distress was of a nature required to overcome the summary-judgment motion.
Finch also signed an order Monday granting Coughlin's attorney's motion to dismiss Coughlin's breech-of-contract claim.
The only remaining issue in Coughlin's counterclaim is whether his retirement agreement is a binding contract. It's also the issue in the suit Wal-Mart brought against Coughlin.
Wal-Mart seeks to void its retirement agreement with Coughlin, while he wants the court to declare the agreement as valid and binding.
Finch will hold a pretrial hearing at 1: 30 p.m. Wednesday to consider pending motions in limine.
Jury selection in the case is scheduled to begin Thursday morning.
According to court documents, Finch informed the parties that the jury must determine whether Coughlin actually breached his duty to disclose material facts before entering into the retirement agreement. The jury may consider whether Wal-Mart had knowledge of material facts before entering into the agreement with Coughlin.
In January 2006, Coughlin pleaded guilty to five counts of wire fraud and one count of tax evasion. Criminal information charged that Coughlin used his position at Wal-Mart from 1996 to 2002 to execute a scheme to illegally instruct subordinate employees to manipulate the employee travel-reimbursement and vendor-invoice accounting systems at Wal-Mart to embezzle money, gift cards and products that were provided to Coughlin for his personal benefit.
U. S. District Judge Robert Dawson sentenced Coughlin in August 2006 to five years' probation with 27 of the months on home detention. Coughlin was ordered to pay a $ 50, 000 fine, $ 306, 822. 40 in restitution to Wal-Mart and $ 104, 395. 60 to the Internal Revenue Service.
Prosecutors had requested prison time for Coughlin. Federal prosecutors appealed Coughlin's original sentence. The 8 th U. S. Circuit Court of Appeals sent Coughlin's case back for resentencing. In February, Dawson let Coughlin's original sentence stand and added 1, 500 hours of community service.
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