IN THE UNITED STATES DISTRICT COURT 

FOR THE NORTHERN DISTRICT OF ILLINOIS 

EASTERN DIVISION 

KEVIN DALE, FRANK HOVAR, JAMIE 

LAWSON, MICHAEL LEOPARDO, BRAD 

LONG, FORTUNATO SALAMONE, JOEL 

SJOSTROM, GLEN TURPOFF, CHRIS 

WOOD, AND JOSE ZAMARRIPA, as 

members of the Board of Trustees of the 

NORTHERN ILLINOIS ANNUITY FUND 

AND PLAN, 

on behalf of the Participants of the Northern 

Illinois Annuity Fund and Plan, 

Plaintiffs, 

vs. 

NFP CORP., et al, 

Defendants. 

Case No. 1:20-cv-2942 

Judge John F. Kness

JOINT INITIAL STATUS REPORT UNDER RULE 26(f) 

The parties have conferred as required by Rule 26(f), and jointly submit the following 

discovery plan. See Fed. R. Civ. P. 26(f)(2); Fed. R. Civ. P. 26(f)(3); Fed. R. Civ. P. 16(b). The 

parties understand that the Court will enter a scheduling order under Rule 16(b)(1), and that the 

Court will modify any such schedule “only for good cause.” See Fed. R. Civ. P. 16(b)(4). 

I. Nature of the Case

A. Identify the attorneys of record for each party. Note the lead trial attorney and 

any local counsel. 

Attorneys for Plaintiffs Attorneys for Defendants 

Karen L. Tidwall Kimberly M. Hare 

Joshua B. Levy Kutak Rock LLP 

Husch Blackwell LLP One South Wacker Drive #3910 

55 East Wells Street, Suite 1900 Chicago, IL 60606 

Milwaukee, WI 53202-3819 312-602-4100 

414-978-5527 

 

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Melissa A. Bozeman 

 Kutak Rock LLP 

 1760 Market Street, Suite 1100 

 Philadelphia, PA 19103 

 215-299-4384 

Oliver Griffin 

 Kutak Rock LLP 

1801 California Street, Suite 3000 

 Denver, Colorado 80202 

 303-297-2400 

B. State the basis for federal jurisdiction. If based on diversity, state the domicile 

of all parties. 

This Court has subject matter jurisdiction over this action based on federal question 

jurisdiction, as the claims herein arise under the Employee Retirement Income Security Act of 

1974, as amended (ERISA), 29 U.S.C. § 1001 et seq. 

C. Provide a short overview of the case (five sentences or fewer). 

Plaintiffs are the members of the Board of Trustees (“Plaintiffs”) of a defined contribution, 

multiemployer pension plan that provides retirement benefits to its participants (the “Plan”), and 

bring this action on behalf of the Plan and its participants. Defendants and/or their representatives 

provide various client services, including investment advisory services, investment management 

services, brokerage services, or administrative services.1 Plaintiffs allege that, between September 

2004 through 2017, Defendants functioned as ERISA fiduciaries of the Plan and as parties in 

interest and, through their various acts and omissions relating to Plan assets, breached their ERISA 

fiduciary duties and caused the Plan to engage in prohibited transactions under ERISA Section 

406, resulting in damage and loss to the Plan and its participants. Plaintiffs seek, among other 

ERISA remedies, disgorgement of any fees and profits made by Defendants through the use of 

 

1

 To clarify: Defendants allege that named Defendants NFP Corp. and Kestra Financial, Inc. do not provide any client 

services whatsoever. 

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Plan assets, reimbursement of losses to the Plan, and an accounting. 

Defendants deny Plaintiffs’ allegations and intend to assert several affirmative defenses to 

Plaintiffs’ allegations as well as counterclaims against Plaintiffs for their alleged failures as ERISA 

fiduciaries, in the event Plaintiffs prove certain aspects of their case. 

D. Describe the claims asserted in the complaint and the counterclaims and/or 

third-party claims and/or affirmative defenses. 

There are three claims for relief asserted in the Complaint. The first is for Defendants’ 

breach of fiduciary duty pursuant to ERISA Section 502(a)(2) relating to (a) failure to disclose any 

and all fees and other compensation received in connection with Plan assets; (b) investment of 

Plan assets in PIMCO Class A shares; (c) investment of Plan assets in certain “alternative 

investments;” (d) management of the Plan’s bond portfolio; (e) investment of Plan assets in a 

MetLife guaranteed investment contract; (f) investment of Plan assets in Unit Investment Trusts; 

(g) engagement of other money managers for the Plan, including First Trust Advisors, and failures 

to disclose fees paid; (h) failure to provide ERISA Section 408(b)(2) disclosures; (i) failure to 

implement or follow prudent processes consistent with industry standards with respect to the Plan 

including administration, recordkeeping, and investment of Plan assets; (j) failure to supervise and 

monitor Defendant BPS and the individual Defendants; (k) charging unreasonable and excessive 

fees; and (l) the Plan’s transition to new service providers. 

The second claim is based on Defendants’ alleged violation of Section 406 of ERISA, 

which prohibits plan fiduciaries from causing a plan to engage in certain types of transactions and 

from engaging in conflicted and self-interested acts and omissions involving plan assets. Plaintiffs 

allege that Defendants caused the Plan to engage in prohibited, non-exempt transactions including 

(a) furnishing services or facilities with a “party in interest,” ERISA § 406(a); (b) dealing with 

Plan assets in their own interest and for their own account, ERISA § 406(b)(1); and (c) receiving 

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consideration for their own personal account from a party dealing with the Plan in connection with 

a transaction involving Plan assets, ERISA § 406(b)(3). 

The third claim for relief is for an accounting pursuant to ERISA § 502(a)(3). 

In response to the Complaint, on July 17, 2020, Defendants filed a Motion to Dismiss and 

Motion for a More Definite Statement (the “Pending Motions”), seeking an order (1) dismissing 

Defendants NFP Corp. and Kestra Financial, Inc. from the action, and (2) requiring Plaintiffs to 

revise the Complaint to provide more definite statements. Pursuant to the Court’s July 21, 2020, 

Briefing Schedule, Plaintiff’s response brief is due on August 18, 2020, and Defendants’ reply 

brief is due on September 1, 2020. 

Following the Court’s adjudication of the Pending Motions, Defendants intend to assert a 

variety of affirmative defenses in their answer, including but not limited to defenses based on 

ratification, waiver, the equitable doctrine of laches, the doctrine of unclean hands, estoppel, 

failure to state a claim, and the statute of limitations. Defendants also intend to assert various 

contractual and other defenses, including, without limitation, that Defendants were acting in a 

purely non-discretionary and/or ministerial capacity, undertaking such actions at the direction and 

discretion of Plaintiffs. Defendants also intend to assert several counterclaims against Plaintiffs, 

alleging that Plaintiffs are the Named Fiduciary of the Plan and are liable to the Defendants under 

the federal common law of contribution and indemnity, and liable to the Plan and its participants 

for breach of their fiduciary duties under ERISA. As Defendants have not yet filed their answer, 

the defenses and counterclaims set forth in this Paragraph cannot be comprehensive, and 

Defendants reserve the right to assert defenses and counterclaims not specifically identified herein. 

E. What are the principal factual issues? 

The principal factual issues include: 

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1. The nature and extent of Defendants’ relationship with related parties. 

2. The nature and extent of the Defendants’ relationship with the Plan. 

3. The terms and conditions of the agreements between and among Defendants. 

4. The nature and extent of Plaintiffs’ responsibilities relative to Plan assets and its 

participants. 

5. The nature and amount of any and all fees and other compensation received by each 

Defendant relating to Plan assets, whether direct or indirect. 

6. The nature, extent, and timing of Plaintiffs’ knowledge of the actions, if any, 

alleged as part of its Complaint. 

7. Whether the Plan suffered damages related to any party’s allegations. 

8. If the Plan has suffered a loss, the amount of loss attributable to any party’s breach 

of any fiduciary duty or other violation of ERISA. 

F. What are the principal legal issues? 

The principal legal issues include: 

1. Whether Defendants or Plaintiffs breached any fiduciary duties owed to the Plan 

and its participants. 

2. Whether Defendants or Plaintiffs violated, or caused the Plan to violate, ERISA 

Section 406. 

3. Whether Plaintiffs’ conduct and/or the Plan’s organizational documents/structure, 

respectively and/or in conjunction, adhere to applicable law. 

G. What relief is the plaintiff(s) seeking? Quantify the damages, if any. (An 

estimate is acceptable; the purpose is simply to give the Court a feel for the 

case. This estimate will not be admissible.). 

Plaintiffs seek the following relief: (1) An order declaring that Defendants’ practices 

violate ERISA, pursuant to ERISA § 502(a)(3), 29 U.S.C. § 1132(a)(3); (2) monetary damages, in 

an amount to be determined at trial, pursuant to ERISA § 502(a)(2), 29 U.S.C. § 1132(a)(2); (3) 

equitable relief, including imposition of a constructive trust pursuant to ERISA § 502(a)(3), 

29 U.S.C. § 1132(a)(3), disgorgement or restitution in the estimated amount of approximately 

$7,000,000, pursuant to ERISA § 502(a)(3), 29 U.S.C. § 1132(a)(3), and an accounting for profits, 

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pursuant to ERISA § 502(a)(3), 29 U.S.C. §1132(a)(3); (4) Plaintiffs’ reasonable fees and costs 

pursuant to ERISA § 502(g)(1), 29 U.S.C. § 1132(g)(1); and (5) pre- and post-judgment interest. 

As Counterclaim Plaintiffs, Defendants intend to seek contribution and indemnification 

from Defendants relative to their alleged fault, as well as appropriate equitable relief; a declaratory 

judgment that Plaintiffs are, and have been, operating in violation of Section 302 of the TaftHartley Act (29 U.S.C. § 186), recovery of their reasonable attorney’s fees, court costs, and other 

litigation expenses under ERISA 29 U.S.C. § 1132(g) or otherwise; and such other and further 

relief/damages as may be just and proper. Insomuch as Defendants have yet to file their answer 

and anticipated counterclaims, Defendants reserve the right to seek other relief and/or damages 

not specifically identified herein. 

H. Have all the defendants been served, or waived service of process? If not, 

identify the defendants that have not received service. 

Each Defendant has waived service of process. 

II. Mandatory Initial Discovery (Pilot Program) 

A. Acknowledge that all counsel of record have read the Mandatory Initial 

Discovery Standing Order. 

All counsel of record have read the Mandatory Initial Discovery Standing Order. 

B. Confirm compliance with the mandatory initial discovery responses or state 

the deadline for responses (30 days after filing the answer). The parties must 

file a separate notice of service of their initial responses (but not the responses 

themselves). 

On July 17, 2020, Defendants filed the Pending Motions, seeking a dismissal, in part, and 

more definite statement of Plaintiffs’ Complaint. The matters presented in Defendants’ Pending 

Motions will be ripe for adjudication by the Court no later than September 1, 2020. To date, no 

answer or other pleading has been filed in response to Plaintiffs’ Complaint. The parties have 

conferred and expect to exchange mandatory initial discovery responses as follows: 

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1. At the parties’ Rule 26(f) conference, Plaintiffs proposed that the parties 

exchange mandatory initial discovery responses by September 7, 2020, which is thirty (30) 

days after the Court’s August 6, 2020, Status Conference. Under the 12/1/2018 Amended 

Standing Order Regarding Mandatory Initial Discovery Pilot Project (MIDPP), ¶ A.4, it is 

unclear whether the parties’ mandatory disclosure obligations are stayed pending a decision 

on the Pending Motions and the filing of an Answer, or whether they may proceed before 

such date. Accordingly, Plaintiffs will seek guidance from the Court at the August 6 status 

conference. 

2. Defendants object to Plaintiffs’ proposal above to the extent that it seeks to 

require service of Defendants’ mandatory initial discovery responses by the arbitrary 

deadline of September 7, 2020, or, stated more generally, seeks to accelerate the deadline 

by which Defendants’ mandatory initial discovery responses would otherwise need to be 

timely served under Paragraph A.4 of the Amended Standing Order Regarding Mandatory 

Initial Discovery Pilot Project or as otherwise ordered by this Court. Paragraph A.4 of the 

Amended Standing Order Regarding Mandatory Initial Discovery Pilot Project provides 

for the exchange of the parties’ mandatory initial discovery responses to occur no later than 

thirty (30) days after the filing of the first pleading responding to Plaintiffs’ Complaint, 

stating, in pertinent part: 

A party seeking affirmative relief must serve its responses to the 

mandatory initial discovery no later than 30 days after the first 

pleading filed2 under Rule 12(a) in response to its complaint, 

counterclaim, crossclaim, or third-party complaint. 

 

2

 Although undefined, the referenced “first pleading filed” here presumably is limited to the filing of one of the only 

seven types of permissible “pleadings” enumerated in Fed. R. Civ. P. 7(a) (i.e., a complaint; an answer to a complaint; 

an answer to a counterclaim designated as a counterclaim; an answer to a crossclaim; a third-party complaint; an 

answer to a third-party complaint; and, if the court orders one, a reply to an answer) as distinguishable from the 

“Motions and Other Papers” described at subsection (b) of Rule 7. Fed. R. Civ. P. 7.

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See Amended Standing Order Regarding Mandatory Initial Discovery Pilot Project, ¶A.4 

(emphasis added). 

Here, Defendants expect that the parties’ deadline for exchanging mandatory initial 

discovery responses will be triggered by the filing of their anticipated answer, affirmative 

defenses, and counterclaims to Plaintiffs’ Complaint and, pursuant to paragraph A.4 of the 

Amended Standing Order Regarding Mandatory Initial Discovery Pilot Project, calculated 

to expire thirty (30) days thereafter. Based on the current briefing schedule set by the Court 

for Defendants’ Pending Motions, among other things, Defendants believe that the parties’ 

deadline for serving their respective mandatory initial discovery responses will be no 

sooner than November, 2020. 

Finally, given that most, if not all, of the initial mandatory disclosures required 

under paragraph B of the Amended Standing Order Regarding Mandatory Initial Discovery 

Pilot Project are driven by that party’s asserted claims and defenses, Defendants further 

object to Plaintiffs’ proposal here, seeking to accelerate Defendants’ deadline to serve their 

mandatory initial discovery responses from a date to be calculated in accordance with 

paragraph A.4 of the Amended Standing Order Regarding Mandatory Initial Discovery 

Pilot Project to the proposed arbitrary September 7, 2020, deadline (which, again, is well 

before the date by which Defendants’ anticipated Answer, Affirmative Defenses, and 

Counterclaims – all of which are subject to further investigation, refinement, and final 

client approval – are due in this matter for filing), insomuch as it is inherently premature, 

unduly burdensome, and/or likely to result in prejudice to Defendants. 

C. Briefly describe any disputes concerning the mandatory initial discovery 

responses, if any. 

There are no disputes at this time. 

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III. Discovery

A. Propose a discovery schedule. Include the following deadlines: (1) the 

mandatory initial discovery responses; (2) any amendment to the pleadings to 

add new claims, or new parties; (3) service of process on any “John Doe” 

defendants; (4) the completion of fact discovery; (5) the disclosure of plaintiff’s 

expert report(s); (6) the deposition of plaintiff’s expert; (7) the disclosure of 

defendant’s expert(s); (8) the deposition of defendant’s expert; and (9) 

dispositive motions. Fill in the blanks, below. 

A WORD version of the proposed scheduling order has been submitted to: 

Proposed_Order_Kness@ilnd.uscourts.gov. 

Event Deadline 

Mandatory Initial Discovery Responses 

Plaintiffs’ proposal (subject to guidance from the 

Court) – 9/7/2020 

Defendants’ proposal – Within 30 days of 

answer date

Amendment to the pleadings Through the close of discovery 

Service of process on any “John Does” N/A 

Completion of Fact Discovery Nine (9) months from answer date 

Disclosure of Plaintiffs’ Expert Report(s) One (1) month from close of discovery 

Deposition of Plaintiffs’ Expert One (1) month from Plaintiff Expert Report date 

Disclosure of Defendants’ Expert Report(s) 14 days from Deposition of Plaintiffs’ Expert 

Deposition of Defendants’ Expert One (1) month from Defendants’ Expert Report 

date 

Dispositive Motions One (1) month following Defendant Expert 

deposition date 

B. How many depositions do the parties expect to take? 

10 for each party, or 20 in total. 

C. Do the parties foresee any special issues during discovery? 

COVID-19, and the local, state, and national response thereto, may result in unforeseen 

limitations or delays, including travel restrictions, quarantine obligations, limitations on meeting 

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sizes and frequency, or other restrictions. 

D. Rule 26(f)(2) requires the parties to propose a discovery plan. See Fed. R. Civ. 

P. 26(f)(2). Rule 26(f)(3), in turn, provides that a “discovery plan must state 

the parties’ views and proposals” on six different topics. See Fed. R. Civ. P. 

26(f)(3). Have the parties discussed a discovery plan, including all of the topics 

required by Rule 26(f)(3)? If so, do the parties propose anything? 

The parties have discussed a discovery plan including all topics set forth in Rule 26(f)(3). 

The parties propose an ESI and/or paper document production protocol, as set forth in a 

separate document that will be submitted to the Court, as necessary. 

IV. Trial 

A. Have any of the parties demanded a jury trial? 

No party has made a jury demand. As a general matter, there is no right to a jury trial in 

an ERISA action. 

B. Estimate the length of trial. 

At this time, the parties estimate a seven- to ten-day trial to the Court. 

V. Settlement, Referrals, and Consent 

A. Have any settlement discussions taken place? If so, what is the status? Has the 

plaintiff made a written settlement demand? And if so, did the defendant 

respond in writing? (Do not provide any particulars of any demands or offers 

that have been made.) 

Plaintiffs made a written settlement demand before filing the instant action. Defendants did 

not accept Plaintiffs’ demand and have not yet made a settlement offer. 

B. Do the parties request a settlement conference at this time before this Court 

or the Magistrate Judge? 

Not at this time. 

C. Have counsel informed their respective clients about the possibility of 

proceeding before the assigned Magistrate Judge for all purposes, including 

trial and entry of final judgment? Do all parties unanimously consent to that 

procedure? The Court strongly encourages parties to consent to the 

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jurisdiction of the Magistrate Judge. 

The parties have discussed the possibility with their clients. The parties do not 

unanimously consent to the jurisdiction of the Magistrate Judge. 

VI. Other 

A. Is there anything else that the plaintiff(s) wants the Court to know? 

Not at this time. 

B. Is there anything else that the defendant(s) wants the Court to know? 

Not at this time. 

Respectfully submitted this 3rd day of August, 2020. 

 s/Karen L. Tidwall 

Karen L. Tidwall (IL Bar No. 6216945) 

Joshua B. Levy (WI Bar No. 1017759) 

HUSCH BLACKWELL LLP 

555 East Wells Street, Suite 1900 

Milwaukee, WI 53202-3819 

Ph. (414) 978-5527 

Fx. (414) 223-5000 

joshua.levy@huschblackwell.com 

karen.tidwall@huschblackwell.com 

Attorneys for Plaintiffs 

 s/Melissa A. Bozeman 

Kimberly M. Hare (IL Bar No. 6323326) 

KUTAK ROCK LLP 

One South Wacker Drive, Suite 3910 

Chicago, IL 60606 

Ph. (312) 602-4100 

Fx. (312) 602-4101 

Kimberly.Hare@KutakRock.com 

Melissa A. Bozeman (Pro Hac Vice) 

KUTAK ROCK LLP 

1760 Market Street, Suite 1100 

Philadelphia, PA 19103 

Ph. (215) 299-4384 

Fx. (215) 981-0719 

Melissa.Bozeman@KutakRock.com 

Oliver Griffin (Pro Hac Vice) 

KUTAK ROCK LLP 

1801 California Street, Suite 3000 

Denver, CO 80202 

Ph. (303) 297-2400 

Fx. (303) 292-7799 

Oliver.Griffin@KutakRock.com 

Attorneys for Defendants

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