Opinion
NO. 2019-CA-000429-MR
03-20-2020
JODY M. JOHNSON, D.O.; AND WILLIAMS, HALL AND LATHEROW, LLP APPELLANTS v. PHILLIP P. CRACE, M.D. APPELLEE
BRIEF FOR APPELLANTS: David S. Strite Louisville, Kentucky Robert Elliott Georgetown, Kentucky BRIEF FOR APPELLEE: Lesley Cayton Lexington, Kentucky
NOT TO BE PUBLISHED APPEAL FROM FLOYD CIRCUIT COURT
HONORABLE EDDY COLEMAN, SPECIAL JUDGE
ACTION NO. 11-CI-00439 OPINION
AFFIRMING
** ** ** ** **
BEFORE: JONES, LAMBERT, AND L. THOMPSON, JUDGES. THOMPSON, L., JUDGE: Dr. Jody M. Johnson, D.O. ("Dr. Johnson") and Williams, Hall and Latherow, LLP ("WHL") appeal from an order of the Floyd Circuit Court compelling the production of an attorney file. Johnson and WHL (collectively referred to as "Appellants") argue that the circuit court abused its discretion in concluding that Morrow v. Brown, Todd and Heyburn, 957 S.W.2d 722 (Ky. 1997), entitles Dr. Phillip P. Crace, M.D. ("Dr. Crace") to WHL's client file. Having closely examined the record and the law, we find no error and AFFIRM the order on appeal.
FACTS AND PROCEDURAL HISTORY
A prior and related action commenced when Charles and Tammy Adams ("the Adamses") filed a medical malpractice claim against Drs. Johnson and Crace alleging that Mr. Adams suffered compensable injuries during the course of surgery and subsequent treatment provided by Drs. Johnson and Crace. The defendants in that proceeding were each insured by ProAssurance Casualty Company ("ProAssurance"), which provided separate trial counsel to the doctors. Dr. Crace was initially represented by Offute & Nord ("O&N"), and Dr. Johnson was represented by WHL.
While the medical malpractice claim was pending, the Adamses instituted a bad-faith claim against ProAssurance. Dr. Crace joined that claim as an intervening plaintiff. He asserted that ProAssurance acted in bad faith in defending his case because ProAssurance refused to seek a settlement in the case in order to protect their pecuniary interest in delaying the payment of claims, and had actively concealed information favorable to Dr. Crace. The medical malpractice claim was settled, and that action was dismissed. The bad-faith claims were then bifurcated and proceeded independently.
On February 4, 2014, and as part of their bad-faith claim, the Adamses served on WHL a subpoena duces tecum seeking a copy of WHL's file in the Adams v. Johnson suit excluding any attorney-client communications. WHL objected to the subpoena, arguing that Dr. Johnson had not waived any privileges afforded him by law. On February 26, 2014, the Adamses moved to compel the production of the file, and a hearing on the matter was conducted on July 30, 2014. Thereafter, the Floyd Circuit Court entered an order granting the Adamses' motion. The court determined that the file was sufficiently relevant to the pending claim so as to meet the discoverability requirements of Kentucky Rules of Civil Procedure ("CR") 26. It instructed WHL to produce everything in the file other than records it believed were attorney-client communications or attorney work product. The court directed WHL to set out the redacted portions in a privilege log, and to provide the unredacted documents to the court under seal. WHL complied with the order on September 5, 2014.
On October 6, 2014, the Adamses moved to compel disclosure of the work product documents set out in the privilege log. Judge Johnny Ray Harris later recused himself, having not ruled on the motion. The matter was then assigned to Special Judge Eddy Coleman, who entered an order on May 5, 2016, instructing WHL to provide to him the documents listed on the privilege log for in camera review. WHL submitted the documents on May 13, 2016.
The court conducted an in camera review of the documents set out in the privilege log, and on May 30, 2017, ruled that certain documents were protected by the attorney-client privilege and were not discoverable. The court determined that other documents did not contain communications between attorney and client, and were therefore not protected by the privilege. As to the issue of work product, the court applied Morrow v. Brown, Todd and Heyburn, supra, to find that some documents listed on the privilege log were discoverable despite being work product.
Shortly thereafter, the Adamses' bad-faith claim was settled. As a result, the documents at issue in the May 30, 2017 order were not produced and the matter was rendered moot. Intervening plaintiff Dr. Crace's bad-faith claim as against ProAssurance continued.
On January 23, 2019, Dr. Crace moved to compel the production of the same documents previously ordered disclosed in the Adamses' bad-faith action on May 30, 2017. A hearing on the matter was conducted, after which the circuit court incorporated in its entirety the reasoning set out in the May 30, 2017 order, and for the same reasons expressed in the Adamses' bad-faith action ruled that the documents at issue were discoverable by Dr. Crace. This appeal followed.
Though discovery orders are normally interlocutory and non-appealable, the Kentucky Supreme Court recently reaffirmed that a nonparty may appeal from the denial of a motion to quash a discovery order. See Allstate Prop. & Cas. Ins. Co. v. Kleinfeld, 568 S.W.3d 327, 333 (Ky. 2019), stating that "[a] trial court order denying a nonparty's motion to quash a discovery request is a final and immediately appealable judgment." (Footnote omitted.) Appellants are nonparties to Dr. Crace's bad-faith claim against ProAssurance.
ARGUMENT AND ANALYSIS
Appellants now argue that the Floyd Circuit Court committed reversible error by ordering the production of privileged documents from WHL's client file. They assert that an attorney's client file is privileged unless it is produced with the client's consent, or in the context of criminal or legal malpractice actions under court order. Appellants direct our attention to Kentucky Supreme Court Rules ("SCR") 3.130(1.6) for the proposition that WHL is ethically obligated to protect all information gathered and assimilated in the course of its representation of Dr. Johnson because Dr. Johnson has not consented to the disclosure of that information. Appellants note that Dr. Johnson absented himself in 2012 from the Adamses' medical malpractice claim, and cannot be subjected to the disclosure of his private documents in an unrelated action at an undetermined time in the future. Further, Dr. Johnson states that he and Dr. Crace are still co-defendants in a separate, unrelated medical malpractice case dating back to the time of the events underlying the Adams case, which is set for trial in January 2020. He contends that Dr. Crace and his lawyers should not be able to access the mental impressions, work product and other materials of Dr. Johnson's attorneys from the Adams case while Drs. Crace and Johnson are co-defendants in the pending medical malpractice litigation. Appellants go on to argue that the Floyd Circuit Court misinterpreted Morrow, supra, and improperly applied its holding in support of the order compelling the production of documents. In sum, Appellants seek an opinion reversing the February 27, 2019 order on appeal and remanding the matter with directions to quash the WHL subpoena.
Stamper v. HRMC, et al., Floyd Circuit Court action No. 11-CI-01134.
The first question for our consideration is whether the Floyd Circuit Court properly ordered the production of documents which Appellants argue are protected by the attorney-client privilege. It is well-established that a "client has a privilege to refuse to disclose and to prevent any other person from disclosing a confidential communication[.]" Kentucky Rules of Evidence ("KRE") 503(b). The privilege applies only to communication between attorney and client. Id. "Whether a particular communication is privileged depends (absent waiver) not on what use was ultimately made of the communication, but on the facts and circumstances under which the communication was made." Lexington Pub. Library v. Clark, 90 S.W.3d 53, 59 (Ky. 2002).
In the matter before us, Appellants point to SCR 3.130(1.6) for the general proposition that a lawyer may not reveal information relating to the representation of a client. They do not, however, direct our attention to any specific communication in the privilege log or the appellate record which they maintain is shielded by the attorney-client privilege, and cite no case law, civil rule or statutory law as to the privilege. In examining this issue, the Floyd Circuit Court found that "certain documents for which a claim of attorney-client privilege had been asserted contained no attorney-client communications and were therefore outside the scope of the privilege." "[T]he burden of proving that a privilege applies rests on the party claiming its benefit." Grange Mut. Ins. Co. v. Trude, 151 S.W.3d 803, 818 (Ky. 2004), as modified (Dec. 1, 2004) (footnote, citation, and quotation marks omitted). Appellants could have moved for this panel to undertake its own in camera review of the attorney file, id., but did not. We conclude that Appellants have not met the burden of demonstrating entitlement to the attorney-client privilege, and find no error.
Morrow, supra, does not address attorney-client communications, and Appellants acknowledge that the "singular issue presented on appeal is whether a trial court can order production of an attorney's client file under Morrow[.]" Appellants' brief at p. i.
Order on appeal at p.2.
Appellants' next and primary argument is that the Floyd Circuit Court improperly applied Morrow as to WHL's work product. In Morrow, Dr. Len Morrow, D.M.D., performed oral surgery on patient W.C. Poe consisting of the installation of dental implants. Unhappy with the medical problems he experienced as a result of the procedure, Poe engaged the services of attorney John W. Hays. After being unable to produce expert testimony adverse to Dr. Morrow, Mr. Hays contacted an oral surgeon in Connecticut, Dr. Roger Harris, who offered expert testimony that Dr. Morrow deviated from the standard of care in the installation of Poe's implants. Hays filed the medical malpractice action against Dr. Morrow alleging negligent treatment, misrepresentation, fraudulent representations, concealment of material facts, and malicious conduct. All claims were resolved in favor of Dr. Morrow.
Thereafter, Dr. Morrow sued attorney Hays' law firm of Brown, Todd & Heyburn for wrongful use of civil proceedings alleging that Hays lacked probable cause for bringing the medical malpractice action against Dr. Morrow. In support of the claim, Dr. Morrow asserted that all expert opinion other than that of Dr. Harris was favorable to Dr. Morrow, and that Dr. Harris' opinion was based on incomplete records because Hays had not provided Dr. Harris with all of Poe's medical records.
During the course of discovery, Dr. Morrow sought to obtain the complete litigation file of attorney Hays. Poe, through new counsel, then expressly waived his attorney-client privilege as to all communications between himself and Hays and the firm of Brown, Todd & Heyburn. The defendants produced only a selected portion of the file, while claiming that other portions were protected from disclosure as attorney work-product. The trial court granted summary judgment on this issue in favor of Brown, Todd & Heyburn, and a panel of the Court of Appeals affirmed the decision.
Morrow then proceeded before the Kentucky Supreme Court, which interpreted CR 26.02(3)(a) as,
CR 26.02(3)(a) addresses the scope of discovery. --------
not as an absolute protection, but rather a requirement that the party seeking discovery show that it has a more substantial need to review opinion work product than would be required to review non-opinion work product. The question then necessarily becomes what constitutes a stronger showing of substantial need. We are of the view that the opinion work product sought to be discovered must be directed to the pivotal issue in the subsequent litigation and the need for the material must be compelling.Morrow, 957 S.W.2d at 726 (citation omitted).
Pursuant to Morrow, then, 1) there is no absolute work product protection, and 2) the work product is discoverable if it is directed to the pivotal issue in the subsequent litigation and the need is compelling. Id. And again, the burden of proving that a privilege applies rests on the party claiming its benefit. Grange Mut. Ins. Co., 151 S.W.3d at 818. Upon reviewing the documents at issue, the Floyd Circuit Court concluded that the WHL file contained documents relevant to ProAssurance's handling of the claim against Dr. Crace because the documents demonstrated that experts retained on behalf of Dr. Johnson gave opinions critical of Dr. Crace's care. It determined that these files documented ProAssurance's handling of the claims against Dr. Crace. The pivotal issue in Dr. Crace's bad-faith claim against ProAssurance is its handling of the claims against him, and we find no error in the circuit court's determination that the need for those documents is compelling. Morrow, 957 S.W.2d at 726. While Appellants properly forward the general principles underlying the legitimate need for a work product privilege, there are narrow circumstances under which that privilege may be abrogated. We conclude that the Floyd Circuit Court properly applied Morrow to the facts before us, and in so doing balanced Appellants' desire for confidentiality with Dr. Crace's bona fide need for material pivotal to his subsequent litigation. The court was careful to exclude from production all WHL documents reflecting counsel's mental impressions, conclusions, opinions and legal theories. This analysis comports with Morrow, and we find no error.
CONCLUSION
For the foregoing reasons, we AFFIRM the order of the Floyd Circuit Court.
ALL CONCUR. BRIEF FOR APPELLANTS: David S. Strite
Louisville, Kentucky Robert Elliott
Georgetown, Kentucky BRIEF FOR APPELLEE: Lesley Cayton
Lexington, Kentucky