Wal-Mart Stores, Inc. v. Coughlin

369 Ark. 365 (2007)

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Nature of the Case

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Facts

In 1978, D began working for P as its Director for Loss Prevention. From 1983 until 2003, D held various executive positions and eventually became a member of the Board of Directors. During this time, he retained responsibility for the management of the Loss Prevention Department. D eventually made it up to Vice Chairman of D's Board of Directors. In 2004, P announced that D would retire in 2005. P and D entered into a Retirement Agreement, which included the Release between the parties, under which D was to receive millions of dollars in benefits over the ensuing years. In February 2005, after the execution of the agreement, P learned of D's fraudulent conduct after a store associate alerted an internal investigations group that D had used a Wal-Mart gift card, issued internally for associate relations, for personal purchases. P discovered that D had abused his position of authority and conspired with subordinates to misappropriate hundreds of thousands of dollars in cash and property through various fraudulent schemes. Three months after the agreement was signed, P suspended D's retirement benefits. P sued D to void the Retirement Agreement and Release claiming fraud, fraudulent concealment, breach of fiduciary duty, conversion, accounting, restitution based on rescission of the Retirement Agreement, declaratory judgment that D is not entitled to retirement benefits under the Retirement Agreement, restitution based on unjust enrichment, judgment for money had and received by D, and conspiracy. D moved to dismiss the complaint for failure to state a claim upon which relief could be granted under Rule 12(b)(6). The court ruled that P had failed to plead specifically that it was fraudulently induced to sign the Retirement Agreement and Release. The court further stated that whether D had a duty to disclose material facts to P before signing the Retirement Agreement and Release was an issue of first impression. P amended the complaint to add fraudulent inducement. P asserted that D's misrepresentations induced it to enter into the Agreement and Release. The circuit found that 'P failed to specifically plead a nexus between P's alleged fraud and the signing of the Release.' It dismissed the complaint. P appealed.