Opinion
No. CV04 4003402S
December 24, 2008
MEMORANDUM OF DECISION ON MOTION TO COMPEL AND ATTORNEY CLIENT PRIVILEGE
The Lichtenfels have requested that various documents be delivered to them and that the defendants be compelled to answer all questions with regard to the plaintiffs' mortgage and the subsequent foreclosure actions. They generally argue that the attorney-client privilege cannot be raised as a bar to their request and rely on several grounds for this position.
I.
The first claim is that the "defendants have testified as to the substance of said communications" and therefore they cannot refuse to provide the details of communications with the client. The claim is that there has been testimony at Attorney Crook's deposition, first, that while he was a lawyer at Hunt Leibert, "he had a number of emails/conversations with Litton conveying his belief that the Second Foreclosure has a wrong default date and thus was inappropriately instituted." Secondly, Crook testified that "he had numerous communications with Litton regarding the calculation of the debt and the default." Thus it is argued having testified as to a portion of such communications, "the right of confidentiality is waived."
(a)
The court will first discuss the deposition testimony by Attorney Crook that he had conversations with Litton regarding the calculations of the debt and the default. At § 5.2.6.2 of Tait's Handbook of Connecticut Evidence, Tait and Prescott it says that "a client's own testimony as to the purpose for which he or she retained the attorney does not constitute a waiver as to the client's communications to the attorney concerning that subject matter." State v. Barrows, 52 Conn. 323, 325-26 (1984) and Rienzo v. Santangelo, 160 Conn. 391, 393-96 (1971) are cited. In Barrows the court said:
The state also claims that Mrs. Eaton, by her voluntary testimony, that when she called upon Mr. Jones (an attorney) she told him that she did not wish her husband to procure a divorce on the ground of adultery, had waived her privilege, and so authorized him to disclose whatever she said to him in consultation. But this statement was obviously made to inform Mr. Jones of her object in calling upon him, and was preliminary to any consultation indeed nothing more than was implied in retaining him.
Leaving aside the question of whether Crook could waive the client's privilege but assuming that he could have, it is difficult to see why the non-waiver result of Barrows would not apply when the attorney himself gives a generic rendition of his conversations with the client.
Furthermore, the business of Hunt Leibert is well known, particularly to all of the litigants in this case. Thus even if Crook were authorized to waive the privilege and this statement can be considered a partial disclosure, it could not be said that fairness dictates that this general language used by Crook somehow would allow opposing counsel to have access to all the specifics including oral and written communications that might have been had between lawyer and client. cf. Diversified Industries v. Meredith, 572 Fed.2d 596, 603, 609, 2d (1978 CA8). In McCormack on Evidence at Section 93, of Volume 1 in the chapter discussing the attorney-client privilege, it does say waiver can arise from "partial disclosure which would make it unfair for the client to invoke the privilege thereafter." Page 418. The only unfairness scenario would perhaps be one where it was of some relevance in this litigation that in fact Crook did not in fact discuss matters of calculation of the debt and default.
(b)
But the claim is also made, as indicated, that Attorney Crook "testified at his deposition that he had a number of emails/conversations conveying his belief that the Second Foreclosure has a wrong default date, and thus was inappropriately instituted." Referring to the Section 93 observation in McCormick, it is claimed "the defendants have voluntarily testified as to a portion of such communications, thus waiving the right of confidentiality."
First it should be said that not only are communications from the client to the lawyer protected, but also certain communications from the lawyer to the client. Obviously Attorney Crook's advice involving the consequences of a wrong default date must be based on information given the lawyer by Litton and in this way indirectly involves communications from the client Litton. Also the information given by Crook as a result of learning of the default date is "inextricably linked" to the giving of legal advice which Tait indicates would be protected by the privilege, § 5.20.1, page 229; also see Ullman v. State, 230 Conn. 698, p. 713-14 (1994). Olson v. Accessory Controls, 254 Conn. 145, 157 (2000).
Apparently Attorney Crook made a general statement about his communications with Litton regarding the fact that "the Second Foreclosure was erroneously initiated in that Litton had an erroneous default date." That the statement was "general" is indicated by the plaintiff's next assertion that at the deposition, "the specifics of what (was) discussed and when was objected to by counsel." Two issues are raised: the authority to waive and the scope of the waiver.
(i)
Fundamentally, it is the client's privilege, Litton's, that we are discussing so the question arises who waived any privilege, did they have the authority to do so, and was there an implied waiver because of a failure to assert the privilege at the deposition. In Doyle v. Reeves, 112 Conn. 521, 524 (1931). The court said: "Generally, therefore, an attorney is not permitted and cannot be compelled to testify as to communications made to him in his professional character by his (her) client, unless the client consents." Wigmore in Vol. 8, § 2326 at Page 633 notes the confusion in the cases on this issue but takes the position that since the attorney has implied authority from the client to make admissions and handle the case, statements the lawyer makes for settlement purposes "or in the course of taking adverse steps in litigation" can come into evidence or are subject to discovery "as being made under an implied waiver of privilege" (by the client). However, Wigmore goes on to say: "All other voluntary disclosures are inadmissible, except so far as the special circumstances show an implied authority of disclosure from the client over and above the general authority to conduct litigation." No such implied authority has been shown here, but the question becomes what is Connecticut's position on this issue. Tait at § 5.26.2, Page 242-43 states that Connecticut follows the rule that "An attorney cannot waive the privilege without the client's consent." He cites Doyle v. Reeve supra for this proposition but then Tait cites Gebbie v. Cadle Company, 49 Conn.App. 265 (1998). In that case a lawyer attended a deposition on behalf of his client and the court held as the client's agent it was his responsibility to assert the attorney-client privilege, he did not do so and the court held the privilege was waived, id. Page 274. This would seem to support a looser rule than suggested by Doyle v. Reeve or Wigmore — the lawyer can waive the privilege for the client without having been given the explicit authority to do so — the mere fact of engagement gives the lawyer that power absent even the client's knowledge.
The foregoing leads the court to preliminarily observe that it is its understanding that Attorney Crook did not work for Hunt Leibert at the time of the deposition so query as to what right he had to waive the privilege for what in effect was former clients at the time of the deposition. How can it be said that the client could be construed to have given express or implied authority to waive the privilege to a lawyer who was no longer representing the client? But it is the court's further understanding that an attorney for Hunt Leibert, Litton's lawyers, was present at the deposition of Attorney Crook and apparently no objection was made to that lawyer's testimony under the privilege to the effect that the Second Foreclosure had a wrong default date and therefore was improperly instituted. Under Gebbie v. Cadle, supra, there would seem to be a waiver as to this statement if it was sought to be introduced at trial but the issue here does the failure to make the objection permit disclosure of the details everything that was discussed and when the discussion took place.
(ii)
But what we have here really is a scope of the waiver issue and whether, given the partial disclosure, is there unfairness in not allowing further questioning. We are back to where we started in discussing this issue and the court found a comment in McCormick that, at least to it, was helpful. Although it was made in an unrelated context, McCormick was talking about the problem of inadvertent waiver that arises when privileged material is mistakenly included in document discovery compliance. Citing a Michigan Law Review article McCormick notes at section 93, page 420 the following:
A persuasive argument has been made that the treatment of the inadvertent and scope of waiver issues be analyzed in terms of fairness and that the "principal concern is selective use of privileged material to garble the truth, which mandates giving the opponent access to related privileged material to set the record straight."
It has not been established, at least to the court's satisfaction, that this concern is at issue here. But the court would be prepared to make an in camera inspection of the relevant material to determine the scope of any waiver here as long as it is related to an articulated unfairness claim.
II
The plaintiffs (Lichtenfels) next argue that the case is about the defendants' actions prior to the institution of the foreclosure actions, the bringing of such actions, and the failure to remedy what they had wrought thereby.
First it is argued that "the communications among the defendants are essential to this case and should not be shielded by the attorney-client privilege." That standing by itself, cannot be a ground for waiving the privilege. Whenever a waiver claim is made regarding certain material or communications, the side making the claim does so because it is regarding as essential or helpful to their case in that it could advance prosecution of the claim.
More to the point is the second argument; it is said "the (defendants) have placed all such communications directly `at issue' . . . indeed defendant Litton has asserted a Special Defense of contributory negligence, which puts said communications directly at issue."
The "at issue" exception to the attorney client privilege is a subcategory of the notion of implied waiver. The concept is discussed in Metropolitan Life Insurance Co. v. Aetna Casualty Surety Co., 249 Conn. 36, 52 et seq., (1999). The court cites a federal case which it says applied Connecticut law as to the "at issue" exception to the privilege, Remington Arms Co. v. Liberty Mutual Insurance Co., 142 FRD408 (d. Del. 1992). That case provides a helpful discussion at page 415:
The way in which courts have dealt with this type of waiver has become inconsistent and unnecessarily complicated. If the information is actually required for a truthful resolution of the issue on which the party has raised by injecting the issue, the party must either waive the attorney-client privilege as to that information or it should be prevented from using the privileged information to establish the elements of the case. If the court cannot find information necessary for a truthful resolution at this point, it will not find the evidence convincing enough to meet the burden of persuasion . . . In the type of case here the party can still make its choice explicitly and assume the risk for failing to disclose materials claimed to be necessary to determine the truth where the party has the burden of proof. [T]he better rule might be one which restricts subject matter waiver to the case in which the client affirmatively uses an attorney-client communication as evidence. `[T]his waiver doctrine should be limited to cases in which the privilege holder injects the privileged material itself into the case. If the party fails to allow pre-trial discovery of a confidential matter, the party will be precluded from introducing that evidence.'" (Emphasis by this court.)Remington Arms cites Byers v. Burleson, 100 FRD 436, 440 (District of Columbia 1983) puts the "at issue" question more concisely by saying: "The purpose of protecting confidential communications may not apply here because the plaintiff has invited the inquiry which the privilege is designed to protect."
Finally, the Remington Arms court said: "The court cannot justify finding a waiver of privileged information merely to provide the opposing party information helpful to its cross-examination or because information is relevant, "142 FRD at page 415 — a proposition Metropolitan Life agrees with when it says: "Merely because the communications are relevant does not place them at issue." 249 Conn. At page 54 (emphasis by the court). In other words the predicate analysis provided by Remington Arms and quoted from above provides the test.
Applying the Remington Arms test it is difficult to see how the "at issue" exception to the attorney-client privilege would apply here. As counsel for the attorney defendants points out in one of his briefs, "Litton has never denied giving the figures to the attorneys" on which the foreclosure actions were based. There is no issue introduced into the case by the defendants which would make the attorney-client communications germane to the litigation; the actual figures are available to the litigants. Litton is the holder of the privilege and it is unclear to the court how Litton could be said to have put the communications in issue. If anything, the defendants are basically being charged as collaboratively causing harm to the Lichtenfels based on wrong information or information incorrectly applied which they do not apparently deny was available to all defendants.
But if the defendants depart from this line of argument maintaining the right to assert the privilege but later in the litigation assert perhaps contradictory defenses or assertions of defenses as to a particular defendant based on the time when certain information was made available or perhaps based on advice given as regards the figures at issue then the privilege may be waived, cf. Remington Arms or particular defendants may be precluded from making certain trial claims. But the motion to compel is now premature and does not sufficiently indicate how the "at issue" doctrine would apply.
III
The Lichtenfels rely on Hutchinson v. Farm Family Casualty Co., 273 Conn. 33 (2005) for their argument that our court in that case "concluded that in disputes between an insurance company and its insured sounding in bad faith, the insurance company could not hide behind the attorney-client privilege."
Technically the positions of both parties are somewhat confusing, at least to the court, if only to it. In other words there is a crime-fraud exception to the attorney client privilege. Hutchinson dealt with a suit against an insurance company by the plaintiff insured who made a claim against the insurer for underinsured motorist benefits for the death of his daughter. The court explicitly held that an insured making a claim against his or her insurer is entitled to an in camera review of privileged communications between the insurer and its attorneys when, based on non-privileged materials, probable cause has been established to show the insurer acted in bad faith vis-a-vis the insured and the insurer sought advice of counsel in order to hide or facilitate the bad faith conduct, 273 Conn. at pp. 42-43. The court seemed to analyze the problem before it as a subset of the civil fraud exception recognized in Olson v. Accessory Controls Equipment Corp., 254 Conn. 145, 171-72 (2000) — that is given the relationship between an insurance company and an insured, bad faith, given certain proof mentioned, could result in waiver of the privilege.
The specific relationship between the Lichtenfels and Litton here does not fit neatly into Hutchinson's factual context of insurer v. insured. But that is irrelevant to the more relevant point that there is a civil fraud exception to the privilege which must be asserted under the principles set forth in Olson. Under Olson the court adopted the Second Circuit set forth in U.S. v. Doe, 168 F.3d 69 (1999) and held it must be established that the client, here Litton, intended to perpetrate a fraud and the communications to the lawyer were made to further the fraud, Olson, 254 Conn. at pp. 174-76. The same test on bad faith is set forth in Hutchinson, 273 Conn. at pp. 42-43.
In any event the court cannot conclude that there is reasonable evidence or probable cause to believe (1) Litton intended to commit a fraud as opposed to being for example negligent or reckless in advancing its claims against the Lichtenfels or, perhaps more to the point; (2) that Litton sought legal advice to conceal or advance fraud or bad faith actions.
The discussion so far has been confined to a scenario where the issues framed by the parties is whether Litton intended to commit a fraud and communicated with the lawyer to advance that end. The court can envisage a factual scenario, as a result of Crook's deposition statement, that both Crook and Litton knew the figures were wrong and default was not in order, and where the date on which Crook made these statements could be relevant to a civil fraud claim against Litton and the attorney defendants acting in concert if after that communication the litigation was still pressed. This specific issue has not been addressed by the parties but the court is willing to entertain further argument or make an in camera inspection of the communications to resolve it.
IV
The Lichtenfels also argue here and in other motions that the defendant law firm acted as a debt collector under the Federal Debt Collection Practices Act citing Heintz v. Jenkins, 514 U.S. 291, 299 (1995). They cite the case of Yancy v. Hooten, 180 FRD 203 (D.Conn. 1998) for the proposition that "the scope of discovery of a debt collector under the act is extremely broad." The Yancy case does permit broad discovery under the Fair Debt Collection Practices Act. At various points the magistrate did waive claims of attorney-client privilege interposed against broad claims for documents between the creditor and the defendant attorneys. But no reason was given for these rulings. Also in Yancy the plaintiff argued that the interrogatories and production requests it was seeking "relate to whether (1) the defendants are acting as a collection agency or as attorneys . . ." The latter is not at issue here.
In this case two of the defendants are the law firm and Attorney Crook, a member of that firm. They are being sued for their actions or failures to act as attorneys regarding litigation instituted by the firm. It is apparent they instituted the litigation on behalf of Litton and it is difficult to see how it can be said the attorney-client privilege does not apply in the litigation context whether or not the attorneys are subject to the FDCPA. That was not the situation before the court in Yancy.
Even if attorneys could be subject to the act if they act as debt collectors, that does not dictate and the federal act does not dictate that they cannot have an attorney-client relationship with the creditor. At least that proposition is not addressed in Yancy.
For the foregoing reasons and with the foregoing qualifications, the motion to compel is denied.