Opinion
Civil Action BCD-RE-2019-14
09-01-2022
RANDY SLAGER and SYBIL BAIRD, Plaintiffs v. LORI L. BELL and JOHN W. SCANNELL, Defendants.
Randy Slager Alan R. Atkins, Esq. Fulton Rice, Esq. Andrew Sparks, Esq. William Kennedy, Esq. Lori L. Bell Daniel L. Rosenthal, Esq. John W. Scannell Jennie Clegg, Esq. Trey Milam, Esq.
Randy Slager Alan R. Atkins, Esq. Fulton Rice, Esq. Andrew Sparks, Esq. William Kennedy, Esq.
Lori L. Bell Daniel L. Rosenthal, Esq. John W. Scannell Jennie Clegg, Esq. Trey Milam, Esq.
ORDER
Thomas R. McKeon Justice, Maine Business & Consumer Court.
Before the court is Defendants'/Counterclaim-Plaintiffs' Lori L. Beil and John W. Scannell ("Defendants") request that this court order 1) that Defendants be permitted to reconvene the deposition of Plaintiff/Counterclaim-Defendant Randy Slager, 2) that Slager must answer questions about his communications with counsel concerning the Notice of Lis Pendens at issue in this matter ("Notice"), and 3) that Defendants be permitted to depose Plaintiffs' former counsel Attorney David Lourie (and/or other counsel with whom Slager testifies he communicated concerning the Notice) about the Notice and without the imposition of attorney client privilege. Memoranda of Law were submitted by the parties for consideration by the court following the Rule 26(g) conference held on August 8, 2022. For the reasons set forth below, Defendants' request is GRANTED. Defendants may conduct narrow discovery of Slager that is strictly limited in scope to communications with former counsel about the Notice.
BACKGROUND
Plaintiffs asserted claims for nuisance and trespass against Defendants. (Def.'s Br. 2.) Plaintiffs, through their counsel, recorded the Notice, which is dated March 19, 2020, against Defendants' property at the York County Registry of Deeds on or about April 2, 2020. (Pl.'s Br. 2; Def.'s Br. 2.) On April 2, 2020, Defendants were informed by Plaintiffs' former counsel that the Notice was recorded. (Def.'s Br. 2.) Defendants objected to the filing of the Notice on the basis that Plaintiffs had no claim against Defendants' title to real property, and they requested Plaintiffs' former counsel withdraw it. (Pl.'s Br. 2; Def.'s Br. 3.) Plaintiffs' former counsel declined to do so. (Pl.'s Br. 2.)
Defendants filed a Motion to Discharge Notice of Lis Pendens with this court on April 13, 2020, which motion was granted by Order of the court (Murphy, J.) dated April 28, 2020. Order on Defendants' Motion to Cancel Notice of Lis Pendens, Stager v. Bell, No. BCD-RE-2019-14, at * 1-2 (Me. B.C.D. April 28, 2020). The Order was recorded with the York County Registry of Deeds on May 11, 2020. (Pl.'s Br. 2.) Underlying its order, the court confirmed that title for real estate is not at issue in this case. (Def.'s Br. 3.) Defendants subsequently filed their Slander of Title claim against Plaintiffs, alleging Plaintiffs' recording of the Notice was baseless and that their refusal to withdraw it until ordered to do so by this court injured the Defendants. (Def.'s Br. 3.) The Defendants' Slander of Title counterclaim survived Plaintiffs' motion to dismiss and persists as an issue before this court. Slager v. Bell, No. BCD-RE-2019-14, 2021 WL 3700682, at *8-10 (Me. B.C.D. July 15, 2021) (Order on Counterclaim-Defendant's Motion to Dismiss).
Slager was deposed by Defendants with regards to their Slander of Title claim on July 8, 2022. (Def.'s Br. 3.) When shown the Notice and asked questions about it, Slager testified that he "relied on counsel," and that he had no knowledge on the topic outside of his communications with his attorney. (Def.'s Br. 4.) He also testified that he understood what his attorney told him, and that for him to answer whether he was aware that the Notice would be recorded before it was filed would require him to disclose communications with that attorney. (Def.'s Br. 4.) When Defendants asked about Slager's communications with his former counsel about the Notice, counsel instructed Slager not to answer any such questions on the basis of attorney-client privilege. (Def.'s Br. 3-4.)
DISCUSSION
Defendants assert Slager is not entitled to attorney-client privilege as to the communications he had with his former counsel with respect to the Notice because he waived it by answering that he relied on advice of counsel when approving the recording of the Notice.
The "Lawyer-Client" privilege protects against disclosure of the contents of any confidential communication between the client and their lawyer. Me. R. Evid. 502(b). This privilege is not absolute; the attorney-client privilege is subject to numerous statutory exceptions. See Me. R. Evid. 502(d). Additionally, a person entitled to the privilege may waive it by voluntarily disclosing or consenting to the disclosure of any significant part of a privileged matter. Me. R. Evid. 510(a).
"The proposition that a privilege is waived by voluntary disclosure is universally recognized." Jensen v. S.D. Warren Co., 2009 ME 35, ¶ 31, 968 A.2d 528 (quoting Field &Murray, Maine Evidence § 510 at 252 (6th ed. 2007)). Voluntary disclosure occurs "when a significant part or key element of the privileged communication has been disclosed by the party claiming entitlement to the privilege." Id. Waiver by voluntary disclosure may be express or implied. See In re Keeper of the Records (Grand Jury Subpoena Addressed to XYZ Corp.), 348 F.3d 16, 22 (1st Cir. 2003). This common law "exception[]" to attorney-client privilege is "based on considerations of forensic fairness." Jensen, 2009 ME 35, ¶ 31, 968 A.2d 528 (quoting Restatement (Third) of the Law Governing Lawyers § 80 (Am. Law Inst. 2000)); see In re Keeper of the Records, 348 F.3d at 23-24; Brauner v. Valley, 187 N.E.3d 349, 448-49 (Mass. App. Ct. 2022) ("the attorney-client privilege cannot be both a shield and a sword") (citation omitted).
Applying these principles, courts End that "an implied waiver occurs when the party asserting the privilege places protected information at issue for personal benefit through some affirmative act, and to protect against disclosure of that information would be unfair to the opposing party." Metropolitan Prop, and Cas. Ins. Co. v. Savin Hill Fam. Chiropractic, Inc., Civil Action No. 15-12939-LTS, 2019 WL 13180456, at *2 (D. Mass. Mar. 15, 2019) (citing In re Keeper of the Records, 348 F.3d at 24). Thus, a party otherwise entitled to privilege impliedly waives it through their own affirmative conduct when: 1) assertion of the privilege was a result of some affirmative act, such as filing suit, by the asserting party; 2) through this affirmative act, the asserting party put the protected information in issue by making it relevant to the case; and 3) application of the privilege would deny the opposing party access to information vital to their case, Id.; Hearn v. Rhay, 68 F.R.D. 574, 581 (E.D. Wash. 1975).
The "paradigmatic example" of an implied waiver of attorney-client privilege is a client's assertion of their reliance on advice of counsel as a defense to discovery. In re Keeper of the Records, 348 F.3d at 24. "When such a defense is raised, the pleader puts the nature of its lawyer's advice squarely in issue, and, thus, communications embodying the subject matter of the advice typically lose protection." Id. As observed by the First Circuit, were the law otherwise a client could selectively disclose only information helpful to their cause, withhold other information unhelpful or prejudicial to it, and in that way "kidnap the truth-seeking process." Id. The Law Court also recognizes that no client should "be allowed to state [their] reliance on his or her lawyer's advice and then assert the client's privilege ... [as to] the advice actually given." Jensen, 2009 ME 35, ¶ 32, 968 A.2d 528 (quoting Field &Murray, Maine Evidence § 510.1 at 253). This is because it would be "unjust" to permit a client to waive the privilege by asserting their reliance on advice of counsel but preclude discovery of the substance of that advice. See Estate of McCormick, 2001 ME 24, ¶ 33, 765 A.2d 552.
Finding an implied waiver of attorney-client privilege is a case-specific analysis that requires a careful weighing of facts. See U.S. v. Desir, 273 F.3d 39, 45-46 (1st Cir. 2001). The party asserting attorney-client privilege has the initial burden to demonstrate its applicability. Harris Mgmt., Inc. v. Coulombe, 2016 ME 166, ¶ 24, 151 A.3d 7; Poor v. Lindell, No. BCD-CV-2018-27, 2022 WL 1539584, at *2 (Me. B.C.D. May 12, 2022). A party seeking to show that an exception applies has the burden of proving, by a preponderance of the evidence, that the elements requisite for the exception exist. Harris Mgmt., Inc., 2016 ME 166, ¶ 24, 151 A.3d 7.
To prove their Slander of Title claim, Defendants must, in part, establish that the Notice was filed with "malice or .. . with reckless disregard of its falsity." Harvey v. Furrow, 2014 ME 149, ¶ 25, 107 A.3d 604. Malice and reckless disregard of falsity are purely subjective elements. Lester v. Powers, 596 A.2d 65, 71 (Me. 1991). An attorney's advice to their client may inform, and bear upon, the client's state of mind with respect to the client's own conduct. See U.S. v. Kinsella, 545 F.Supp.2d 148,156 (D. Me. Apr. 8, 2008). This is especially the case when the client's state of mind with respect to their conduct is the "central focus" of a claim or defense. Id.
The problem with a Slander of Title claim regarding a Us pendens is that the parties litigate over one another's litigation tactics and decisions. Generally, privileges attach to prevent these disputes. It is often the case that a party will simply rely on their attorney to determine when to file a Notice of Lis Pendens. An attorney has to be careful not to omit a tactic that might be available to them depending on how the court rules in an area that has not been addressed by the Law Court. At this of the case the court already decided the Slander of Title claim will go forward. Slager v. Bell, No. BCD-RE-2019-14, 2021 WL 3700682, at *8-10 (Me. B.C.D. July 15, 2021) (Order on Counterclaim-Defendant's Motion to Dismiss). Therefore, the court cannot limit the Defendants' discovery rights on their counterclaim.
A. Slager's contention that he relied on advice of counsel when he filed the Notice was Slager's affirmative act.
Slager argues that his testimony that he relied on counsel is not akin to an affirmative defense, and that Defendants seek to use his communications with his former counsel to satisfy their own affirmative burden to demonstrate that the Notice was recorded with malice or reckless disregard of its falsity. (Pl.'s Br. 4.) Defendants argue Slager took several affirmative steps: 1) he testified that he "relied on counsel" when asked about the Notice during Defendants' deposition; 2) Plaintiffs' use of the catchall affirmative defense ("each and every . . . affirmative defense available . .. under Maine law"); and 3) lack of any indication by Plaintiffs that they are not invoking an advice of counsel defense. (Def.'s Br. 6-7.)
Plaintiffs, not Defendants, caused the Notice to be recorded. (Def.'s Br. 2-3; Pl.'s Br. 2.) Slager asserted his entitlement to attorney-client privilege when deposed about his knowledge of the Notice and its recordation. (Def.'s Br. 4.) In essence, Slager's assertion of privilege was in aid of his contention that the Notice was not filed with malice or reckless disregard of its falsity. See In re Keeper of the Records, 348 F.3d at 24; Heitzenrater v. OfficeMax, Inc., No. 12-CV-900S(F), 2015 WL 10987110, * 1 (W.D.N.Y. June 22, 2015) (holding that a party's reliance on privileged advice from counsel to make their claim or defense provides grounds for an implied waiver claim). Slager's assertion that he was relying on advice of counsel when he filed the Notice was an affirmative act.
B. Slager's reliance on advice of counsel put the attorney communications at issue.
Slager's responses to Defendants' questions during deposition placed his former counsel's advice with respect to the Notice and its recordation squarely in issue. Slager offered that he relied on the advice of his former counsel when shown the Notice and asked questions about it. (Def.'s Br. 2-3.) He also testified that he had no knowledge of the topic beyond his communications with his former counsel. (Def.'s Br. 3.) Plaintiffs' state of mind is an element Defendants' must prove to prevail in their Slander of Title counterclaim. See Harvey, 2014 ME at ¶ 25, 107 A.3d 604. By submitting his reliance on advice of counsel when filing the Notice, Slager placed his communications with former counsel about the Notice at issue. See Kinsella, 545 F.Supp.2d at 156. Without learning about the substance of those communications, Defendants cannot prove that Slager acted with malice or reckless disregard of falsity when they filed the Notice.
C. Preservation of the privilege asserted by Slager would deny Defendants discovery of information vital to their case.
Plaintiffs contends that, through past briefing, former counsel explained the purpose for filing the Notice, and therefore that other means are available for Defendants to discover whether the Notice was filed with malice or reckless disregard of its falsity. (Def.'s Br. 9.) Principally, Plaintiffs asserts that Defendants can adequately discover the information they seek about Slager's state of mind as regards the Notice in the Objections of Plaintiff to Defendants' Motion to Cancel Lis Pendens dated April 16, 2020. (Def.'s Br. 9.) But neither parties' discovery of any disputed material facts should be limited to the other's averments in the record. Moreover, the allegations contained in the pleadings were not given under oath. See Farrell v. Theriault, 464 A.2d 188, 193 (Me. 1983).
Further, Slager's responses to Defendants' questioning during their deposition of him support Defendants' claim that upholding privilege under these circumstances would deny them information vital to their case. During the deposition, Defendants questioned Slager about what a lispendens certificate is and does. (Pl.'s Br. 3.) In response to these questions, Slager testified that he had no such knowledge that did not come from communications with counsel. (Pl.'s Br. 3.) He did not undertake to learn about what a lispendens is or does himself, for example by personally researching the topic. (Pl.'s Br. 3.) Instead, Slager confirmed that he relied on counsel. (Pl.'s Br. 3.) Implicitly, Slager's only knowledge about what a lispendens is and does came from his communications with counsel. As these communications are the "only" source of Slager's knowledge on the topics at issue, Defendants cannot discover the true extent of his knowledge through other sources.
D. Narrow scope of waiver and renewed deposition questioning.
Slager impliedly waived attorney-client privilege only as to his communications with his former counsel regarding the Notice and its recordation. In the event of a dispute, the court will interpret a waiver of privilege narrowly. Such waivers extend only to communications relevant to the issue asserted by the client. Jensen, 2009 ME 35, ¶ 33, 968 A.2d 528 (quoting Restatement (Third) of The Law Governing Lawyers § 80 (2000)). During renewed deposition, Defendants are permitted only to ask Slager what he learned during his conversation about the Notice with his former counsel. In the event Defendants find it necessary to depose Plaintiffs' former counsel, Attorney David Lourie, the scope of that deposition must also be strictly limited to inquiry about Attorney Lourie's communications with Slager about the Notice. Finally, any documents discovered should be redacted to preserve Plaintiffs' privilege as to all other matters.
CONCLUSION
For the reasons set forth above, Defendants' requests that 1) they be permitted to reconvene the deposition of Plaintiff/Counterclaim-Defendant Randy Slager, 2) that he be ordered to answer questions about his communications with counsel concerning the Notice, and 3) that Defendants be permitted to depose Attorney David Lourie (and/or other counsel with whom Plaintiffs testify they communicated concerning the Notice) about the Notice and without the imposition of attorney-client privilege are GRANTED. The renewed deposition and any deposition of Attorney Lourie or other counsel with whom Slager testifies he communicated concerning the Notice must be narrowly limited to what is strictly necessary to probe whether the Notice was made with the Plaintiffs' knowledge or reckless disregard of its falsity.
The entry is:
Defendant's request for limited discovery of attorney client communications is granted. The discovery is specifically limited to attorney client communications regarding the recording of the lis pendens up to the date of the court's order dissolving the lis pendens.
This Order is incorporated on the docket by reference pursuant to M.R.Civ.P. 79(a).