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Osborn v. Griffin

United States District Court, E.D. Kentucky, Northern Division

September 29, 2014

ELIZABETH A. OSBORN, PLAINTIFF
v.
JOHN M. GRIFFIN, ET AL., DEFENDANTS and LINDA G. HOLT, ET AL., PLAINTIFFS
v.
DENNIS B. GRIFFIN, ET AL., DEFENDANTS

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For Elizabeth A. Osborn, Plaintiff, Counter Defendant (2:11-cv-00089-WOB-REW): Benjamin Joel Lewis, Janet P. Jakubowicz, Natalie Donahue Montell, Bingham Greenebaum Doll LLP - Louisville, Louisville, KY.

For Linda G. Holt, Plaintiff in 2:13-cv-32, Judith E. Prewitt, Plaintiff in 2:13-cv-32, Cynthia L. Roeder, Plaintiff in 2:13-cv-32, Plaintiffs (2:11-cv-00089-WOB-REW): Anthony J. Bickel, LEAD ATTORNEY, Dressman Benzinger LaVelle P.S.C. - Crestview Hills, Crestview Hills, KY; Christopher B. Markus, LEAD ATTORNEY, Dressman Benzinger LaVelle P.S.C. - KY, Crestview Hills, KY; J. Kent Wicker, LEAD ATTORNEY, Dressman Benzinger LaVelle PSC, Louisville, KY; Eva Christine Trout, Trout Law Office, PLLC, Lexington, KY.

For John M. Griffin, Individually, Dennis B. Griffin, Individually, Robert A. Griffin, Defendants (2:11-cv-00089-WOB-REW): Caitlin E. Murphy, LEAD ATTORNEY, PRO HAC VICE, Keating, Muething & Klekamp, PLLC, Cincinnati, OH; John E. Floyd, LEAD ATTORNEY, PRO HAC VICE, Bondurant, Mixson & Elmore LLP, Atlanta, GA; Steven C. Coffaro, LEAD ATTORNEY, Keating, Muething & Klekamp, PLLC, Cincinnati, OH; Joseph M. Callow, Jr., Thomas F. Hankinson, PRO HAC VICE, Keating, Muething & Klekamp, PLLC, Cincinnati, OH.

For John Doe, Jane Doe, Defendants (2:11-cv-00089-WOB-REW): Thomas F. Hankinson, PRO HAC VICE, Joseph M. Callow, Jr., Keating, Muething & Klekamp, PLLC, Cincinnati, OH.

For Keating Muething & Klekamp, PLL, Def. in 2:13-cv-32, Defendant (2:11-cv-00089-WOB-REW): George D. Jonson, LEAD ATTORNEY, Montgomery, Rennie & Johnson, Cincinnati, OH.

For Martom Properties, LLC, Def. in 2:13-cv-32, Defendant (2:11-cv-00089-WOB-REW): John E. Floyd, LEAD ATTORNEY, PRO HAC VICE, Bondurant, Mixson & Elmore LLP, Atlanta, GA; Joseph M. Callow, Jr., Thomas F. Hankinson, LEAD ATTORNEYS, PRO HAC VICE, Keating, Muething & Klekamp, PLLC, Cincinnati, OH; Steven C. Coffaro, LEAD ATTORNEY, Caitlin E. Murphy, Keating, Muething & Klekamp, PLLC, Cincinnati, OH.

For John M. Griffin, Trustee of the Estate of John L. Griffin, Executor defendant (2:11-cv-00089-WOB-REW): Caitlin E. Murphy, LEAD ATTORNEY, PRO HAC VICE, Keating, Muething & Klekamp, PLLC, Cincinnati, OH; John E. Floyd, LEAD ATTORNEY, PRO HAC VICE, Bondurant, Mixson & Elmore LLP, Atlanta, GA; Steven C. Coffaro, LEAD ATTORNEY, Keating, Muething & Klekamp, PLLC, Cincinnati, OH; Joseph M. Callow, Jr., Thomas F. Hankinson, PRO HAC VICE, Keating, Muething & Klekamp, PLLC, Cincinnati, OH.

For Dennis B. Griffin, Trustee of the Estate of, John L. Griffin, Executor defendant (2:11-cv-00089-WOB-REW): Caitlin E. Murphy, LEAD ATTORNEY, PRO HAC VICE, Keating, Muething & Klekamp, PLLC, Cincinnati, OH; Steven C. Coffaro, LEAD ATTORNEY, Keating, Muething & Klekamp, PLLC, Cincinnati, OH; Joseph M. Callow, Jr., Thomas F. Hankinson, PRO HAC VICE, Keating, Muething & Klekamp, PLLC, Cincinnati, OH.

For John M. Griffin, Dennis B. Griffin, Robert A. Griffin, Counter Claimants (2:11-cv-00089-WOB-REW): Caitlin E. Murphy, LEAD ATTORNEY, PRO HAC VICE, Keating, Muething & Klekamp, PLLC, Cincinnati, OH; John E. Floyd, LEAD ATTORNEY, PRO HAC VICE, Bondurant, Mixson & Elmore LLP, Atlanta, GA; Joseph M. Callow, Jr., Thomas F. Hankinson, PRO HAC VICE, Keating, Muething & Klekamp, PLLC, Cincinnati, OH.

For Thompson Hine, LLP, Movant (2:11-cv-00089-WOB-REW): Kimberly Ellen Ramundo, LEAD ATTORNEY, Thompson Hine LLP - Dayton, Dayton, OH; Stephen J. Butler, LEAD ATTORNEY, Thompson Hine LLP - Cincinnati, Cincinnati, OH.

For Griffin Family Trust, Movant (2:11-cv-00089-WOB-REW): Victor A. Walton, Vorys, Sater, Seymour & Pease - Cincinnati, OH, Cincinnati, OH.

For Griffin Industries, LLC, Subpoenaed Non-Party, Other Party (2:11-cv-00089-WOB-REW): Caitlin E. Murphy, LEAD ATTORNEY, PRO HAC VICE, Keating, Muething & Klekamp, PLLC, Cincinnati, OH; Joseph M. Callow, Jr., Thomas F. Hankinson, PRO HAC VICE, Keating, Muething & Klekamp, PLLC, Cincinnati, OH.

For Martom Properties, LLC, Other Party (2:11-cv-00089-WOB-REW): Caitlin E. Murphy, LEAD ATTORNEY, PRO HAC VICE, Keating, Muething & Klekamp, PLLC, Cincinnati, OH; John E. Floyd, LEAD ATTORNEY, PRO HAC VICE, Bondurant, Mixson & Elmore LLP, Atlanta, GA; Steven C. Coffaro, LEAD ATTORNEY, Keating, Muething & Klekamp, PLLC, Cincinnati, OH; Joseph M. Callow, Jr., Thomas F. Hankinson, PRO HAC VICE, Keating, Muething & Klekamp, PLLC, Cincinnati, OH.

For Linda G. Holt, Judith E. Prewitt, Cynthia L. Roeder, Plaintiffs (2:13-cv-00032-WOB-REW): J. Kent Wicker, LEAD ATTORNEY, Dressman Benzinger LaVelle PSC - Louisville, Louisville, KY.

For Dennis B. Griffin, John M. Griffin, Robert A. Griffin, Martom Properties, LLC, Defendants (2:13-cv-00032-WOB-REW): John E. Floyd, LEAD ATTORNEY, PRO HAC VICE, Bondurant, Mixson & Elmore LLP, Atlanta, GA; Joseph M. Callow, Jr., Thomas F. Hankinson, LEAD ATTORNEYS, PRO HAC VICE, Keating, Muething & Klekamp, PLLC, Cincinnati, OH; Steven C. Coffaro, LEAD ATTORNEY, Keating, Muething & Klekamp, PLLC, Cincinnati, OH.

For Keating Muething & Klekamp, PLL, Defendant (2:13-cv-00032-WOB-REW): George D. Jonson, LEAD ATTORNEY, Montgomery, Rennie & Johnson, Cincinnati, OH.

For Griffin Industries, LLC, Other Party (2:13-cv-00032-WOB-REW): Thomas F. Hankinson, Keating, Muething & Klekamp, PLLC, Cincinnati, OH.

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MEMORANDUM OPINION AND ORDER

William O. Bertelsman, United States District Judge.

These cases are before the Court on numerous motions for summary judgment (Docs. 422, 423, 424, 427, 432, 433, 434, 435, 436), a motion to dismiss a counterclaim (Doc. 400), a motion to disregard the deposition testimony of Dennis B. Griffin (Doc. 541), plaintiffs' joint motion for leave to file a surreply (Doc. 553), and objections to three orders of the United States Magistrate Judge (Docs. 556, 559, 563).

The Court previously heard oral argument on these motions, after which it took them under advisement. (Doc. 565) (Minute Entry). After further study, the Court now issues the following Memorandum Opinion and Order.

TABLE OF CONTENTS

I. Factual and Procedural Background

II. Analysis

A. Discovery/Evidentiary Matters

1. The Court overrules all objections to the orders of the Magistrate Judge. Infra at 38-41.
2. The Court denies Defendants' motion to disregard Dennis Griffin's deposition testimony. Infra at 41-43.
B. Breach of Fiduciary Duty and Related Tort Claims
1. The Court denies Defendants' motion for summary judgment to the extent that it alleges Plaintiffs' claims for breach of fiduciary duty are barred by the statute of limitations. Infra at 45-48.
2. The Court holds that Dennis and Griffy breached their fiduciary duties to the Holt plaintiffs as a matter of law with respect to the claims arising out of the 1985-86 stock transactions. Infra at 48-50.
a. The Court holds that a triable issue of fact exists as to Defendants' argument that the Holt plaintiffs would have no interest in Griffin Industries' stock absent the 1985 plan. Infra at 50-52.
b. The Court holds as a matter of law that the affirmative defense of res judicata does not bar the Holt plaintiffs' claims arising out of the 1985-86 stock transactions. Infra at 52-55.
c. The Court holds that a triable issue of fact exists with respect to the equitable defense of acquiescence to the Holt plaintiffs' claims arising out of the 1985-86 stock transactions. Infra at 55-56.
d. The Court holds that a triable issue of fact exists with respect to the affirmative defense of laches to the Holt plaintiffs' claims arising out of the 1985-86 stock transactions. Infra at 56-58.
3. The Court holds as a matter of law that Defendants are entitled to summary judgment on all claims arising out of the ownership of the Cold Spring property. Infra at 58-60.
4. The Court holds that Dennis and Griffy breached their fiduciary duties to Plaintiffs as a matter of law with respect to the transfer of the Craig Protein stock and the sales of land to Martom

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Properties. Triable issues of fact remain, however, with respect to the equitable defense of acquiescence, the affirmative defense of laches, and the defense that Plaintiffs accepted the benefits of the transactions. Infra at 60-66.
C. Professional Negligence Claims
1. The Court holds as a matter of law that the Holt plaintiffs' claims for professional negligence against Keating, Meuthing & Klekamp are barred by the statute of limitations. Infra at 66-71.
D. RICO Claims
1. The Court holds as a matter of law that the Holt plaintiffs cannot invoke the doctrine of equitable tolling and their claims are thus barred by the statute of limitations. Infra at 74-77.
2. The Court holds as a matter of law that Betsy cannot invoke the doctrine of equitable tolling and her claims are thus barred by the statute of limitations. Infra at 77-79.
E. Counterclaim Against Betsy
1. The Court holds as a matter of law that Defendants' counterclaim against Betsy fails to state a claim upon which relief can be granted. Infra at 79-81.

Factual and Procedural Background

A. Introduction

These cases arise out of a dispute among the children of John L. Griffin (" Father" ), founder of Griffin Industries, Inc. (" the Company" ), and his wife, Rosellen Griffin (" Mother" ). The Griffins had twelve children, eleven of whom were living at the times relevant to this lawsuit, six boys and five girls.

Founded by Father in 1943, Griffin Industries is a rendering company that grew into a multi-million dollar business with operations in several states. At all relevant times, the brothers were active in the family business. John M. Griffin (" Griffy" ) and Dennis B. Griffin (" Dennis" ) were board members of Griffin Industries, and Robert was the CEO and President of the Company. Plaintiffs were not involved in the management of the Company.

In the present cases, four of the sisters -- Elizabeth (" Betsy" ), Linda, Judith (" Judy" ), and Cynthia (" Cyndi" ) -- have sued three of their brothers: Griffy, Dennis, and Robert Griffin (" Robert" ), as well as other defendants. Generally speaking, plaintiffs allege that Griffy and Dennis, who were fiduciaries of their parents' estate plans, breached their duties to plaintiffs, beneficiaries of those estates, by failing to follow the terms of their parents' wills and trusts. Plaintiffs allege that defendants took these wrongful actions as part of their larger scheme to retain control of Griffin Industries and to enrich themselves at their sisters' expense.

B. Real Properties and Stock in Dispute

Between 1964 and 1978, Father and Mother purchased land in various locations: Jackson, Mississippi (" the Jackson Property" ); Henderson, Kentucky (" the Henderson property" ); several properties in Pendleton County, Kentucky (" the Bradford property," " the Jay Gee property," and " the Adams property" ); and Scott County, Indiana (" the Scott property" ). These properties, which were titled in either Father's name or in both Father and Mother's names, were used by the Company in its operations. Griffin Industries paid all real estate taxes, insurance, and improvements on these properties, and written leases on several of the properties were made between Father and the Company.

On February 8, 1974, property was purchased at the intersection of U.S. 27 and

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Old Alexandria Pike in Cold Spring, Kentucky (" the Cold Spring property" ). The deed for the property was in the name " John L. Griffin, Trustee," although Father was not then the trustee of any known trust. (Doc. 428-5, Deed). The property was thereafter used as Griffin Industries' headquarters.

Griffin Industries Board minutes of meetings conducted prior to this purchase state that the Board " authorized Dennis Griffin to negotiate for an option" on the property. (Doc. 430-5 at 2) (Minutes of 7/12/73).

Dewey McDougal, an accountant who was employed at Griffin Industries at the time, testified that the Company, rather than Father, paid for the purchase of the Cold Spring property with Company funds. (Doc. 430-4, McDougal Decl. ¶ ¶ 2-3; McDougal Depo. Doc. 409-1 at 23-29).

The check used to purchase the property was drawn on an account of Father's law firm, Paxton & Seasongood, later known as Thompson, Hine & Flory. (Doc. 473-8). The subject line on the letter accompanying this check states: " Griffin Industries, Inc. - Cold Spring, Kentucky Property." ( Id.).

Correspondence between Father's law firm and the sellers of the Cold Spring property identifies Griffin Industries as the purchaser. (Doc. 430-118 at 14) (" This office represents Griffin Industries, Inc. and Dennis B. Griffin, its Vice President, who, on behalf of Griffin Industries, Inc. executed the September 28, 1973 agreement with you for the purchase of the Ragan estate property at the intersection of U.S. Route 27 and Old Alexandria Pike in Cold Spring, Kentucky." ).

Following the purchase, McDougal placed the property in the Company's " fixed asset register." ( Id. ¶ 4).

Board meeting minutes from after the purchase reflect the Company's plans to use Company funds to remodel and improve the Cold Spring property. (Doc. 430-8). Further, Board minutes from October 18, 1974, state that the Company was taking out a mortgage to finance part of the construction of a new office building on the property:

RESOLVED, FURTHER, that John L. Griffin, as Trustee, be, and he hereby is, authorized to execute, acknowledge and deliver a mortgage to said Falmouth Deposit Bank of Falmouth, Kentucky to secure said note, said mortgage to be on the real estate held of record in the name of John L. Griffin, Trustee, and acquired by the Company from George Ragan and others by deed recorded in Deed Book 143, page 42 of the Campbell County Court records.

( Doc. 430-9 at 3) (emphasis added).

It is undisputed that, at all relevant times, Griffin Industries paid for all taxes, maintenance, improvement, insurance, and other expenses associated with the Cold Spring property.

Father's tax returns from 1982-1985 show that he did not include the Cold Spring property on the schedules of real property from which he received rental income. (Def. MSJ Exh. 122).

In 1981, Griffin Industries bought a Dublin, Georgia rendering company called Craig Protein, Inc., with Father holding 23.86 percent of its stock and Griffin Industries holding the remaining shares.

C. Father's Stroke, Mother's Death, and Ensuing Changes

Father suffered a massive stroke on Labor Day in 1983. The parties dispute the extent of his mental impairment following the stroke. At this time, Mother was also gravely ill with Parkinson's Disease.

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Shortly thereafter, at defendants' request, Leonard Meranus,[1] outside counsel for Griffin Industries, analyzed Father's and Mother's estate plans. In a Memorandum dated September 27, 1983, Meranus's firm opined that if Father predeceased Mother, then the " non-working children" -- i.e., those other than Dennis, Griffy, Robert, and another brother, Jim -- would end up with a majority of Griffin Industries' stock. (Doc. 428-18 at 3).

On November 16, 1983, Dennis and Griffy obtained power of attorney for Mother. (Doc. 428-19).

Defendants also consulted Meranus in early 1984 about how to structure Griffin Industries' stock " to insure that the four working children retain control of the Company." (Doc. 428-21, Internal Law Firm Memorandum to Meranus).

Mother died on August 20, 1985. Under the terms of her estate plan, her 15,291 shares of Griffin Industries stock and other property passed to Father, who was still alive.[2] Under Father's then-existing estate plan, at his death his Griffin Industries stock would pass to his eleven children in equal amounts. (Doc. 428-8 at GTE 00041, Fourth Codicil to Father's Will).

Shortly after Mother's death, however, Dennis and Griffy took a series of actions:

o On September 4, 1985, Dennis and Griffy moved the Campbell Probate Court to remove Father as Executor of Mother's will on the grounds that he was " unable to act as such executor by reason of a recent stroke and current paralysis which have rendered him unable to appear before the Court or sign a statement declining his appointment as executor." (Doc. 428-23). Dennis and Griffy were substituted as Co-Executors in Father's place;

o On September 25, 1985, Dennis and Griffy obtained Father's power of attorney (Doc. 428-24);

o On October 10, 1985, Dennis and Griffy had the then-Trustee of the Griffin Family Trust removed and themselves appointed as Co-Trustees;

o On November 14, 1985, Father made Dennis and Griffy the Co-Trustees of Father's 1967 Trust (Doc. 428-10 at 30); and

o By letter dated November 21, 1985, Meranus indicated that Father's ownership in the Griffin Family Trust and his stock in Griffin Industries were being transferred to Father's 1967 Trust. (Doc. 428-25). Father's life insurance policies were also transferred from the bank to Griffin Industries.

As a result of these changes, Dennis and Griffy became Executors of their Mother's will; had power of attorney for Father; and were Trustees for the 1967 Trust, which would receive Father's property upon his death.

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D. The 1985 " Redistribution" Plan

Dennis and Griffy then consulted with counsel to develop a plan to " redistribute" the Griffin Industries stock held by Mother and Father. The following key elements were chosen by Dennis and Griffy, with Meranus's legal advice, after a meeting on November 26, 1985:

o Father would disclaim all the Company stock left to him by Mother. Although this caused the stock to revert to Mother's estate, under which it should have then poured over into the trust and be distributed to all her children equally, the redistribution plan called instead for Mother's Estate to sell that stock (13.6% of the Company) to the six brothers ;

o Father would sell 4% of his Company stock to his grandchildren's trusts, thereby reducing his holding to below 50%. The grandchildren's trusts would then give the six brothers a five-year option to re-purchase the shares at 60% of their book value;

o After the sale of stock to the grandchildren, the sons[3] would purchase Father's remaining Company stock, but at a " minority" discount since his holding would then be less than 50%.

(Doc. 428-28) (emphasis added).

In total, this series of transactions would transfer 66.6% of Griffin Industries stock to the six brothers, leaving Dennis, Griffy, Robert, and Jim in control of 87.6% of the Company's stock.

A family meeting was held on November 29, 1985, at the Drawbridge Inn in Fort Mitchell, Kentucky. The parties agree that the above " redistribution" plan was the topic of discussion at this meeting, but they dispute what the brothers told their sisters. The sisters allege that Dennis told them that their parents' wills were a " mess" because they had not prepared for the possibility that Mother would predecease Father; that this was causing a huge financial strain on the Company and the Company could go bankrupt; that there could be a $5 million tax bill; and that their parents intended for all the Company stock to go to the boys. (Holt Depo. Doc. 410-5 at 176; Holt Depo. Doc. 410-4 at 52-53, 60, 112-13, 116; Prewitt Depo. Doc. 410-1 at 60, 66-69, 79, 90; Roeder Depo. Doc. 410-3 at 154-55).

The Holt plaintiffs allege that these representations were false because: (1) the Company had previously purchased life insurance to cover its obligations to purchase Father's Company shares upon his death; (2) their parents' estate plans had given extensive consideration to Mother predeceasing Father; and (3) the statements were contrary to the intentions set forth in their parents' estate plans.

A second meeting was held shortly thereafter at Dennis's house, attended by a financial planner. (Prewitt Depo. Doc. 410-1 at 70). The planner told the girls about a local company that went bankrupt due to poor financial planning, and he explained how the 1985 plan would work. Plaintiffs allege that Dennis threatened that if the girls didn't agree to the plan, the brothers would buy them out " here and now." (Linda Depo. Doc. 410-5 at 177).

The redistribution plan was then executed. On December 2, 1985, Father disclaimed his interest in Mother's Company

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stock. (Doc. 430-20 at GII50959). In turn, Griffin Industries' Board of Directors waived the Company's rights to buy back Mother's shares and terminated the stock-purchase agreement that gave it certain rights to buy back both Father's and Mother's shares. (Doc. 470-23). The same day, Mother's Estate sold her stock to the six brothers for approximately $5.7 million.[4] (Doc. 428-30) (Meranus's notes of Drawbridge meeting; Doc. 430-20 at GII50936-57). The cash proceeds of this sale poured over into Mother's trust.

Thereafter, Dennis, Griffy, Jim, and Robert purchased Father's shares in Griffin Industries.

On or about September 3, 1987, Dennis and Griffy distributed most of Mother's remaining estate to her trust -- just under $2 million. The money was distributed 38% to Father (because he had previously disclaimed 62% of his interest in Mother's trust), and the rest was distributed to seven of the eleven children. (Doc. 428-39).[5]

In 1988, Dennis arranged for Star Bank, the Trustee of Mother's trust, to take title to the Scott County property from Mother's trust, after which the Bank then sold the property to Griffin Industries for $5,000. (Doc. 428-40) (Letter from Leonard Meranus Letter to Star Bank). Prior to this transfer, Griffin Industries had been leasing the Scott County property from Mother at an annual amount of $6,600. (Doc. 428-41). The $5,000 proceeds from this sale were added to Mother's trust and distributed to the beneficiaries.

A final distribution from Mother's estate was made on April 27, 1990. (Doc. 428-42).

E. Betsy's 1990 Federal Lawsuit

By letter dated May 7, 1990, Betsy's counsel wrote to Meranus demanding that Mother's Estate distribute to Betsy her share of the Griffin Industries' stock that was held in Mother's trust at the time of her death. This letter further stated:

Thereafter, the Estate's co-executors wrongfully sold and transferred this stock to the male children and to the exclusion of the female children and the rights of Griffin Industries, Inc. These transactions contravene the terms of the Will and constitute breaches of fiduciary duties owing to, among others, Elizabeth Griffin Osborn.

( Doc. 430-11).

Betsy thereafter moved to vacate the final settlement and reopen Mother's estate. The probate court, however, found that Betsy lacked standing and that her exceptions were untimely. (Doc. 430-11 at 91).

Betsy filed her first lawsuit in this Court on December 7, 1990, on behalf of herself and derivatively on behalf of other shareholders, against Dennis, Griffy, Meranus, Thompson Hine, Star Bank, and Griffin Industries. (Cov. Civil Case No. 90-209). Betsy alleged various claims, including breach of fiduciary duty and fraud, arising out of the redistribution of the Griffin Industries' stock in 1985-86 after Mother's death. The Holt plaintiffs were shareholders within the derivative claim.

On November 29, 1991, Dennis, Griffy, Robert, Marty, and Thomas, along with Meranus, met with Father at Thompson Hine's offices. Meranus's notes of this meeting state:

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The purpose of the meeting was to advise Mr. Griffin of the law suit which Betsy Osborn had filed against Dennis, John M., TH& F and me in United States District Court in Kentucky and to advise him that Betsy's attorneys were attempting to obtain his medical records. It was also for the purpose of reviewing Mr. Griffin's estate plan with him to determine whether it still reflected his wishes, and if so, to recommend certain changes in his will and trust to clarify certain points that had been raised by Betsy as to his intentions in the litigation.

( Doc. 537-5 at 2) (emphasis added).

These notes state that Dennis explained Betsy's lawsuit to Father; that he appeared upset and angry about it; that Meranus then reviewed the 1985 plan and the sale of the Griffin Industries stock from Mother's estate to the boys; and that Father indicated his agreement that the boys should get stock and the girls should get cash. ( Id.).

Further, Meranus stated:

I told Mr. Griffin that because of the issues Betsy had raised in the litigation, he could help clarify the situation, if he wanted to do so, by ratifying the 1985 sale of his stock to the boys and by making certain changes in his will and his trust to make it clear that only the five girls, or their heirs, would participate in his estate. I showed Mr. Griffin a Sixth Codicil to his Will and the Fourth Amendment to his Trust Agreement and asked him to read them to see if he understood them and wanted to sign them. Mr. Griffin read the documents and indicated that he wished to execute them. Mr. Griffin can articulate a number of words very clearly, including " yes" and " no."

( Id. at 3) (emphasis added).

The day after this meeting, Father executed the Sixth Codicil to his will and the Fourth Amendment to his trust. The Sixth Codicil, states: " I have provided for my sons in other ways, including my sale of my Griffin Industries stock. . . . I now change my Will so that my other property will go to my trust as set out in my Will. In this way, my other property will go to my five daughters or their children." (Doc. 428-8). The Fourth Amendment to the trust states: " I have provided for my sons in other ways, including my sale of my Griffin stock. I again approve that sale. I now change my [] Trust so that at my death, the rest of the trust property shall go to my five daughters equally, free of trust, and the trust shall end." (Def. MSJ Exh. 106).

Also during this litigation, Father executed an affidavit dated January 20, 1992, which states:

1. I want my children, including my daughter, Elizabeth Griffin Osborn, to know that I approve of the sale of my stock in Griffin Industries, Inc. to my sons.

2. I want my sons to have the company now and my daughters to have cash when I die.

3. I changed my will and my Trust to show what I want. Copies of the changes to my will and my trust are attached. [referencing the Sixth Codicil and Fourth Amendment, discussed above].

4. I know that my daughter, Elizabeth Griffin Osborn, has sued my sons, Dennis and John M. Griffin, and my attorney, Leonard S. Meranus. I do not agree with the lawsuit and want my daughter to stop it.

(Def. MSJ Exh. 106).

Cyndi testified that the only thing she knew about this lawsuit was that Dennis

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and Griffy told her that Betsy's husband was greedy, that they otherwise would not discuss it, and that Dennis told her that she didn't need to know anything about it because he had it " taken care of." (Roeder Depo. Doc. 409-4 at 30-32).

Betsy's case settled in early 1993, but the settlement was not finalized until December. By order dated September 29, 1993, this Court noted that an offer of settlement had been made by defendants; that a fairness hearing with respect to the derivative claims was scheduled for September 24, 1993; and that defendants' counsel were directed to mail to each shareholder of Griffin Industries a copy of an attached notice. (Case No. 90-209, Doc. 179). The attached notice stated:

An offer of settlement in the above-captioned matter has been made by Defendants. A hearing to determine the fairness of the settlement with respect to the derivative claim will be held at 3:00 p.m. on Friday, September 24, 1993, in Courtroom 220, United States Post ...

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