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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND NEUBERGER BERMAN REAL ESTATE INCOME FUND, INC. V. * LOLA BROWN TRUST NO. 1B, ET AL. * MEMORANDUM OPINION AND ORDER This case is currently before the Court on two discovery motions (Paper Nos. 73 and 99.) By Order dated March 25, 2005, * * CIVIL NO. AMD-04-3056

Judge Andre M. Davis referred to the undersigned the determination of the discovery disputes. (Paper No. 101.) A

status conference on the pending matter was held on March 31, 2005, and a telephone hearing held on April 22, 2005. For the reasons set forth below, the Court rules as follows, on the pending motions: 1. Plaintiff's Motion to Compel Production of Documents Improperly Withheld on the Basis of Privilege is GRANTED in part and DENIED in part. 2. Plaintiff's Motion to Compel Production of Documents and Responses to Deposition Questions and Interrogatories is GRANTED in part and DENIED in part. This memorandum will discuss each motion seriatim. Background Facts

Plaintiff Neuberger Berman Real Estate Income Fund, Inc. ("NRL"), a closed-end fund investing primarily in real estate securities, seeks responses to its various discovery requests related to the tender offer made by the defendant Trusts for a controlling number of its shares. The present discovery dispute

arises from defendants' assertions of attorney-client privilege and work product doctrine over documents and over communications (1) between and among the defendants, (2) between the defendants and related non-party entities, (3) between related non-party entities, and/or their respective counsel. All of these

documents, however, are within the possession, control or custody of the defendants, identified as responsive to plaintiff's discovery requests, but withheld as protected under the attorneyclient privilege or work product doctrine. A description of the

various defendants and related entities and the relationship between the defendants and other related non-party entities is essential to understand the dispute.1 Defendants Lola Brown Trust No. 1B ("Lola Trust") and Ernest Horejsi Trust No. 1B ("Ernest Trust") are irrevocable grantor trusts ("Trusts") domiciled and administered in South Dakota. The beneficiaries of the Trusts are defendant Stewart R. Horejsi ("Horejsi"), his issue, and their spouses. (Paper No. 124 Ex.

Unless otherwise indicated, this description is based on the complaint, the second Miller affidavit and attachments, and defendants' briefing.

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A.) Defendant Horejsi is a private investor, portfolio manager for Boulder Investment Advisors ("BIA") and Stewart Investment Advisors ("SIA"), two non-defendant investment companies servicing the Trusts, and, as stated above, a beneficiary of the Lola and Ernest Trusts. Trusts. He also serves as an advisor to the

(Paper No. 55 at 4.)

The remaining defendants are sued in their capacity as trustees of the Trusts. Defendant Badlands Trust Company

("Badlands") is a South Dakota corporation that acts as the administrative trustee of Lola Trust and Ernest Trust and of the other non-party Horejsi family trusts.2 (Id. at 3.) Defendant

Susan L. Ciciora is the daughter of defendant Horejsi, a beneficiary of the defendant Trusts, and serves as a trustee of Lola Trust and Ernest Trust. (Id. at 4.) Defendant Larry L. (Id.

Dunlap serves as a trustee of Lola Trust and Ernest Trust. at 3-4.)

There are several other Horejsi family trusts ("the trusts")

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