Opinion
1 CA-SA 12-0282
01-10-2013
JAMES C. SELL, Trustee of the Participating Trust established under Debtors' First Amended Joint Plan of Reorganization dated 7-7-06 in U.S. Bankruptcy Case No. 05-27993-PHX-GBN, on behalf of the Trust's Participating Investors, Petitioner, v. THE HONORABLE J. RICHARD GAMMA, Judge of the SUPERIOR COURT OF THE STATE OF ARIZONA, in and for the County of MARICOPA, Respondent Judge, RUSSELL L. SEWELL and ANN SEWELL, husband and wife; ASPEN GROVE CAPITAL, L.L.C., a Utah limited liability company; ASPEN GROVE CAPITAL GROUP, L.L.C., a Delaware limited liability company; ASPEN GROVE CAPITAL PARTNERS I, L.P., a Delaware limited partnership; BRENT WILLIAMS and PATRICIA WILLIAMS, husband and wife; DOUGLAS E. TOWLER and STACIE TOWLER, husband and wife; TOWLER & ASSOCIATES, L.L.C., an Arizona limited liability company; RUSSEL O. RIGGS and SHARON RIGGS, husband and wife; KARI M. LAITINEN and JANE DOE LAITINEN, husband and wife; JAMES S. CUNDIFF and JANE DOE CUNDIFF, husband and wife; CTAC GROUP L.L.C., an Arizona limited liability company; ASCENT FINANCIAL STRATEGIES, L.L.C., an Arizona limited liability company; JASON O. BUCK and JANE DOE BUCK, husband and wife; MARC DIDIER and JANE DOE DIDIER, husband and wife; PASSPORT FINANCIAL, L.L.C., a Utah limited liability company; ROBERT C. RIGGS and JANE DOE RIGGS, husband and wife; MARK D. LARSEN and JANE DOE LARSEN, husband and wife; SCOTT MALONE and JANE DOE MALONE, husband and wife; SQUIRE & COMPANY, P.C., a Utah professional corporation; LYNN G. HILLSTEAD and JANE DOE HILLSTEAD, husband and wife; DWAYNE ASAY and JANE DOE ASAY, husband and wife; LEWIS AND ROCA L.L.P., an Arizona limited liability partnership KEITH BEAUCHAMP and JULIET LIM, husband and wife Real Parties in Interest.
Decision Order
Maricopa County
Superior Court
No. CV2007-005734
The court, Presiding Judge Andrew W. Gould, Judge Randall M. Howe, and Judge Donn Kessler participating, has considered the special action petition of James C. Sell ("Trustee"), who has filed this petition on behalf of himself and the participating investors of the Trust (collectively, "Petitioners"). Trustee seeks relief from an order of the trial court filed October 30, 2012, compelling Trustee to produce to defense counsel for Lewis and Roca, Keith Beauchamp, and Juliet Lim (collectively, "the Lewis and Roca Defendants") all "investor questionnaires" and related documents.
We accept jurisdiction of Petitioner's special action petition because the trial court's order compels discovery over the objection of a party asserting a privilege or protection from discovery; accordingly, Petitioners have no equally plain, speedy, or adequate remedy by appeal. See Ariz. R.P. Spec. Act. 1(a); Twin City Fire Ins. Co v. Burke, 204 Ariz. 251, 252, ¶ 3, 63 P.3d 282, 283 (2003).
Further, we grant relief. The parties do not dispute that the questionnaires were protected from discovery under the work-product doctrine. None of the questionnaires were listed on the privilege log, but counsel for the trustee segregated and did not disclose thirty-five of those questionnaires. Only two questionnaires were attached to emails and produced. While it was appropriate for the trial court to sanction Petitioners for failing to list the investor questionnaires on the privilege log, the sanction imposed was too great. We need not decide whether the work-product doctrine was waived as to the two documents disclosed because we do not understand Petitioners to be requesting that we order the Lewis & Roca Defendants to return such documents and not use them in the litigation. Assuming without deciding that the disclosure of those two documents waived the work-product doctrine as to them, the inadvertent failure to list the questionnaires on the privilege log was not so extreme as to imply a subject matter waiver for all related documents. Counsel for the Trustee took the necessary steps to protect the other questionnaires from discovery and took the necessary steps after learning about the inadvertent production of two questionnaires to preserve the protection as to those thirty-five questionnaires. Accordingly, the privilege was not waived with respect to these documents. See Scanlon v. Bricklayers and Allied Craftworkers, Local No. 3, 242 F.R.D. 238, 247-48 (W.D.N.Y. 2007) (explaining that "to constitute waiver of work-product protection, disclosure of an otherwise protected document must [have] 'evinced such extreme carelessness as to suggest that it was not concerned with protection of asserted privileges'") (quoting Desai v. Am. Int'l Underwriters, 1992 WL 110731 at *1 (S.D.N.Y. May 12, 1992)). Here, the two undisclosed questionnaires were attached to emails and appear to have been unintentionally overlooked by counsel.
In addition, we find that the penalty of being required to produce "all related documents," which would include significant ongoing attorney-client communications and work-product protected materials in this litigation, is a penalty disproportionate to the offense. Consequently, we reverse the court's October 30, 2012 order except with regard to the two investor questionnaires that were not properly identified on the privilege log. Accordingly,
IT IS ORDERED accepting jurisdiction of Petitioners' special action petition.
IT IS FURTHER ORDERED granting Petitioners' request for relief.
IT IS FURTHER ORDERED that the clerk of this court provide a copy of this Decision Order to each party appearing herein and to the Honorable J. Richard Gama, a Judge of the Superior Court.
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ANDREW W. GOULD, Presiding Judge