Free Trial Memo - District Court of Connecticut - Connecticut

Case 3:02-cv-02237-MRK

Document 45

Filed 07/13/2004

Page 1 of 8

UNITED STATES DISTRICT COURT DISTRICT OF CONNECTICUT TRILEGIANT CORPORATION, Plaintiff, VS. BP PRODUCTS NORTH AMERICA INC. Defendant. : CIVIL ACTION NO. : 3:02CV02237 (MRK) : : : : : : JULY 12, 2004

JOINT PRETRIAL MEMORANDUM

1.

TRIAL COUNSEL Counsel for Plaintiff: Robert P. Dolian Kevin Broughel Cummings & Lockwood LLC Four Stamford Plaza 107 Elm Street Stamford, CT 06902 Tel: (203) 327-1700 Fax: (203) 351-4535 [email protected] [email protected] Counsel for Defendant: Steven M. Greenspan Day, Berry & Howard, LLP City Place I Hartford, CT 06103 Tel: (860) 275-0346 Fax: (860) 275-0343 [email protected] Brian D. Porch, Jr. Day, Berry & Howard, LLP 126 E. 56th Street New York, NY 10022

Case 3:02-cv-02237-MRK

Document 45

Filed 07/13/2004

Page 2 of 8

Tel: (212) 446-6818 Fax: (212) 446-6801 [email protected] 2. JURISDICTION

Jurisdiction is based on 28 U.S.C. § 1332, in that the parities are citizens of different states and the amount in controversy exceeds $75,000.

3.

LENGTH OF TRIAL

The parties have estimated that trial will last no more than five days, from July 26, 2004 until July 30, 2004.

4. trial.

FURTHER PROCEEDINGS The parties do not anticipate the need for conducting any further proceedings prior to

5.

NATURE OF CASE Plaintiff's Claims

This action arises out of defendant's misappropriation of an asset jointly developed with plaintiff. In 1992, the parties entered into a joint marketing agreement under which plaintiff marketed and administered the Horizon Program. Members of the Program received certain services from Trilegiant in return for a $25 annual fee billed to their BP credit card. The parties shared the membership fee revenues pursuant to the terms of their joint marketing agreement. In 2002, without plaintiff's knowledge or permission, defendant converted all of the existing Horizon Program members to its "new" BP MultiCard Program. Since that date, defendant has retained all of the revenues derived from these members. Defendant's Position Trilegiant's claims must fail because it was Trilegiant, not BP, that terminated the BP Horizon Club Agreement thereby relinquishing any right to receive ongoing renewal revenue. After the termination letter, the parties agreed that while BP prepared to offer a new program to existing card holders, Trilegiant would continue to service those card holders even after August 15, 2000, rather than BP canceling their cards. However, the original agreement, including Trilegiant's obligations to market the Program ceased as of the termination date, and -2-

Case 3:02-cv-02237-MRK

Document 45

Filed 07/13/2004

Page 3 of 8

after August 15, 2000, Trilegiant took no steps to solicit new members. Consistent with the parties' understanding, BP discontinued the program in June 2002, when BP's new product was launched. BP paid Trilegiant for continuing to service the BP Horizon members through June, 2002. Moreover, the manner in which BP ultimately discontinued the BP Horizon Club program was consistent with, and would have been permissible under, the terms of the Agreement even if BP had chosen to terminate the Agreement. BP is not in breach of the Agreement. BP's actions in discontinuing the Program in the manner which it chose cannot be characterized as wrongful, unfair or tortious because: (1) BP owed no continuing obligation to pay Trilegiant renewal revenues after Trilegiant's termination; (2) on several occasions BP notified Trilegiant of its intention ultimately to discontinue the BP Horizon Program in order to introduce its new product.; (3) in executing the Agreement with BP, including the inclusion of Paragraphs 14 and 15, Trilegiant expressly consented to BP discontinuing the program in the manner it chose; (4) because the BP Horizon Card was a BP-owned product and the cardholders were customers of Citibank, the credit issuer, Trilegiant could not have had any reasonable expectation to continue benefiting from them indefinitely.

6.

STIPULATIONS AND PROPOSED FINDINGS OF FACT AND CONCLUSIONS OF LAW

Plaintiff's Proposed Findings of Fact and Conclusions of Law are attached hereto as Exhibit A. Defendant's Proposed Findings of Fact and Conclusions of Law are attached hereto as Exhibit B.

7.

TRIAL BRIEFS The parties will not file pre-trial briefs.

8.

WITNESSES

Plaintiff's Witnesses: 1. Tom Rusin: 100 Connecticut Avenue, Norwalk, CT; Executive Vice President, Product Management: nature of plaintiff's business; financial underpinnings of plaintiff's business; terminology used; roles various parties fill in delivering services to the members; plaintiff's corporate history and structure. 2. Chip Vann: 37 North Hillside Lane, Monroe, CT; former Trilegiant employee: the status of the Horizon Program from 1999 to 2000; communications with BP -3-

Case 3:02-cv-02237-MRK

Document 45

Filed 07/13/2004

Page 4 of 8

concerning the Program during that period; communications with BP regarding Trilegiant's notice of termination. 3. Nayr Iglesias: 71 Courtland Avenue, Unit 144, Stamford, CT; former Trilegiant employee: The Horizon Program from 2000 to April 2002; communications with BP during that time period; discussions with BP regarding the continued administering and servicing of the Program by Trilegiant. 4. Greg Hilinski: 100 Connecticut Avenue, Norwalk, CT; Senior VP of Marketing Analysis, Finance: computation of the value as of June 2002 of the net revenues Trilegiant would have received from the Horizon Program, based on the number of active members at that time, a projected attrition rate, and the cost of servicing those members; computations will be provided under various scenarios (discount rates of 5% to 20% and time periods of 10 and 20 years). (Plaintiff's Expert Disclosures for Mr. Hilinski are attached hereto as Exhibit D). Defendant's Witnesses: 1. Ellen Best Eire Direct Marketing LLC 720 North Franklin Suite 310 Chicago, IL 60610-3512

We anticipate that Ms. Best will provide testimony as to the relationship between the parties with respect to their performance of the Agreement, Trilegiant's termination of the Agreement, the strategic planning relating to the harmonization of the BP and Amoco programs after the merger, and BP's ultimate discontinuation of the BP Horizon Program and introduction of the new BP MultiCard product and all other matters generally addressed in her deposition. Defendant expects her direct testimony to be two hours. 2. Lisa Kilrea BP Amoco c/o Ogilvy & Mather 1 Illinois Center, 16th Floor 111 E. Wacker Drive Chicago, IL 60601

We anticipate that Ms. Kilrea will testify to the relationship between the parties with respect to their performance of the Agreement, Trilegiant's termination of the Agreement and the discontinuation of the BP Horizon Program and introduction of the new BP MultiCard product and all other matters generally addressed in her deposition. Defendant expects her direct testimony to be one and one half hours.

-4-

Case 3:02-cv-02237-MRK

Document 45

Filed 07/13/2004

Page 5 of 8

3.

Jennifer Montague c/o BP Comms. & Engagement Department C3-03, Britannic House, 1 Finsbury Circus London EC2M 7BA United Kingdom

We anticipate that Ms. Montague will testify to events taking place regarding the discontinuation of the BP Horizon Program from April, 2002 through June, 2002, and the launching of the new BP MultiCard program and all other matters generally addressed in her deposition. Defendant expects her testimony to be one hour. 4. Alan A. Schachter Willamette Management Associates 305 Madison Avenue, Suite 5000 New York, New York 10165

Mr. Schachter is Defendant's expert witness. If he testifies, Mr. Schachter will rebut the damage analysis issued by Plaintiff's expert, Greg Hilinski. Mr. Schachter will rebut the alleged economic losses suffered by Trilegiant as a result of the alleged failure of BP to perform under the Agreement. Mr. Schachter's analysis is set forth in his report and deposition transcript and is based on the assumption (which defendant contests) that the aforementioned breach occurred, and, will express the opinion that Trilegiant's maximum total damages are $1,465,000 based on a fiveyear future income period. Materials upon which Mr. Schachter may rely, as set forth in his report, Exhibit 151, include: 1. Expert Report of Alan A. Schachter dated March 16, 2004; 2. Amended Complaint dated October 6, 2003; 3. Plaintiff's Supplemental Expert Disclosure dated October 6, 2003; 4. SBBI 2003, Ibbotson Associates; 5. Deposition of Greg Hilinski taken on October 27, 2003; 6. Analyses prepared by Greg Hilinski (Exhibit 184, TRI 2005106 ­ TRI 2005141and TRI 2005758 ­ TRI 2005774); 7. BP Summary (TRI 2005876, TRI 2005774); 8. Draft of letter dated December 13, 1993 to Kathy Thompson at BP Oil (TRI 2005142);

-5-

Case 3:02-cv-02237-MRK

Document 45

Filed 07/13/2004

Page 6 of 8

9. BP Horizon Service Cost Assumption (TRI 2005775); 10. Cendant Corporation Form 10-K December 31, 2002; 11. Notes taken from telephone conversation with Ellen Best on March 15, 2004 (Exhibit 152); 12. BP Private Label ­ Program Request Form ­ BP Fee Card Program Harmonization and Card Reissuance (BP 0558).

9.

TRIAL EXHIBITS

The parties Joint Exhibit List is attached hereto as Exhibit C. In addition, Plaintiff's expert disclosures are attached hereto as Exhibit D and Defendant's expert report is attached as Exhibit E.

10.

DEPOSITION TESTIMONY

The parties reserve the right to interpose objections to the designations set forth below by the time of trial. Plaintiff's Designations: 1. 2. 3. Ellen Best: James DuBoyce: Lisa Kilrea: page 12, line 8 to page 244, line 1 page 9, line 3 to page 77, line 4 page 8 line 10 to page 24, line 7; page 29, line 20 to page 171, line 7; page 181, line 1 to page 270, line 23; page 276, line 6 to page 294, line 20 page 13, line 11 to page 15, line 18; page 17, line 21 to page 19, line 22; page 38, line 2 to line 20; page 43, line 24 to page 53, line 12; page 106, line 21 to page 122, line 22 page 124, line 24 to page 147, line 16 page 23; line 24 to page 37, line 13; page 39, line 24 to page 41, line 16; page 70, line 7 to page 75, line 14 page 12, line 21 to page 94, line 2 -6-

4.

Jennifer Montague:

5.

Terry Walker:

6.

Monica Evans:

Case 3:02-cv-02237-MRK

Document 45

Filed 07/13/2004

Page 7 of 8

7.

Kelley Clift:

page 4, line 9 to page 54, line 6

Defendant's Designations: 1. 2. James DuBoyce: Terry Walker: In its entirety. page 8; line 23 to page 11, line 14; page 21, line 8 to page 21, line 24; page 28, line 17 to page 28, line 25 page 32, line 22 to page 33, line 6 page 44, line 25 to page 46, line 11 page 52, line 18 to page 52, line 25 page 63, line 24 to page 64, line 6 page 68, line 2 to page 68, line 13 page 76, line 11 to page 81, line 8 page 11, line 11 to page 12, line 15 page 15, line 3 to page 17, line 3 page 21, line 15 to page 22, line 17 page 36, line 13 to page 36, line 17 page 37, line 1 to page 38, line 1 page 39, line 15 to page 39, line 20 page 61, line 9 to page 61, line 25 page 68, line 9 to page 68, line 25 page 88, line 8 to page 88, line 19 page 4, line 14 to page 7, line 14 page 12, line 1 to page 12, line 25 page 18, line 1 to page 19, line 13 page 27, line 7 to page 27, line 19 page 54, line 11 to page 62, line 19 page 75, line 1 to page 135, line 4

3.

Monica Evans:

4.

Kelley Clift:

11.

ANTICIPATED EVIDENTIARY PROBLEMS

The parties do not anticipate any evidentiary problems. There are just a few proposed exhibits to which the parties intend to interpose objection on the grounds of relevance and hearsay.

-7-

Case 3:02-cv-02237-MRK

Document 45

Filed 07/13/2004

Page 8 of 8

THE PLAINTIFF, TRILEGIANT CORPORATION BY CUMMINGS & LOCKWOOD LLC ITS ATTORNEYS

By: /s/ Robert P. Dolian Robert P. Dolian (ct04278) Kevin Broughel (ct 25838) Four Stamford Plaza 107 Elm Street Stamford, CT 06902 (203) 327-1700 THE DEFENDANT, BP PRODUCTS NORTH AMERICA, INC. BY DAY, BERRY & HOWARD ITS ATTORNEYS

By: /s/ Brian Porch, Jr. Steven M. Greenspan, Esq. (ct00380) Brian D. Porch, Jr., Esq. (ct23650) Day, Berry & Howard LLP One Canterbury Green Stamford, CT 06901-2047

.StmLib1:1066472.1 07/12/04

-8-