Legal Malpractice

At Issue Privilege in Legal Malpractice

By (Andrew Lavoott Bluestone)

A recent case Carl v. Cohen, Supreme Court, New York County, Justice Edmead 2009 NY Slip OP 30806(U), April 15, 2009 illustrates two distinct principals. The first is privilege and at issue communications.  The second principal, to be discussed on Friday, is relation-back and the statute of limitations.

Plaintiff in this case was an employee at a mutual fund operation, and was embroiled in a market timing case in which it was alleged that someone was utilizing the time-zone differences between the east coast and California to make money in the mutual funds market.  He hired law firm 1, then fired it, and went on to law firm 2 and 3.  This case discusses the question of whether target attorney in the legal malpractice case may obtain otherwise privileged materials from the successor attorneys.

"The issue at bar in this case is whether Cohen may depose plaintiff's successor attorneys about the contents of and subject matter of these documents, as well as other communications "A waiver may also be found where the client places the subject matter of the privileged communication at issue, or where invasion of the privilege is required to determine the validity of the client's claim or defense and application of the privilege would deprive the adversary of vital information [internal citations omitted] (Jakobleff v. Cerrato, Sweeney & Cohn, 97 AD2d 834, 835 [2d Dept 1983] [plaintiff did not place her privileged communications with her present attorney at issue, nor was discovery of such communications required to enable defendants to assert a defense merely by bringing an action against her former attorney for legal malpractice]; Credit Suisse First Boston v. Ultrecht-American Fin. Co., 27 AD3d 253, 254 [1st Dept 2007]; Raphael v. Clune White & Nelson, 146 AD2d 762, 763 [2d Dept 1989] [attorney-client privilege between client and attorneys who had taken over case from law firm was not waived by client's initiating lawsuit. In addition, appellants failed to establish why the disclosure of privileged correspondence was vital to their defense in light of the broad range of materials already supplied by plaintiff]).

However, "that a privileged communication contains information relevant to issues the parties are litigating does not, without more, place the contents of the privileged communication at issue in the lawsuit; if that were the case, a privilege would have little effect [internal quotation marks omitted]" (Deutsche Bank Trust Co. Of Americas v. Tri-Links Inv. Trust, 43 AD3d 56, 64 [1st Dept 2007]; Veras Investment Partners, LLC v. Akin Gump Strauss Hauer & Feld LLP, 52 AD3d 370, 374 [1st Dept 2008] [Court found that it was error for the JHO to have found a waiver on the basis of relevance alone]). Thus, there is no "at issue" waiver where the party asserting privilege "does not need the privileged documents to sustain its cause of action" (Manufacturers & Traders Trust Co. v. Servotronics, Inc., 132 AD2d 392, 397 [4th Dept 1987]; (Deutsche Bank Trust Co. Of Americas v. Tri-Links Investment Trust, 43 AD3d at 64 [at issue waiver occurs when a claim or defense has been asserted by a party that he intends to prove by use of the privileged materials]).

Plaintiff asserts that the testimony of his successor attorneys is not discoverable in this case, as it cannot be said that plaintiff placed his privileged communications with his successor attorneys at issue, or that discovery of these communications is required to enable defendants to assert a defense (see Jakobleff v. Cerrato, Sweeney & Cohn, 97 AD2d at 834). Specifically, plaintiff asserts that, as he did not begin consulting with his successor attorneys until after his termination on November 14, 2003, and, as plaintiff's successor attorneys did not simultaneously counsel him with Cohen in any post-termination matters, there is no possibility that his successor attorneys have any information that Cohen requires in order to defend plaintiff's claims that Cohen had impermissible and undisclosed conflicts of interest, or that he failed to act in plaintiff's best interests regarding Alliance's defamatory U-5 form and subsequent misleading press releases. In addition, plaintiff notes that he concedes and will stipulate that his successor attorneys have not initiated a "whistleblower" cause of action on his behalf.
 

However, Cohen does not need further discovery of plaintiff's successor attorneys to determine whether or not these actions were timely taken, as these facts are plain on their face. Thus, plaintiff is entitled to a protective order denying defendant Cohen's third-party subpoena ad testificandum on his successor attorneys."

Full post as published by New York Attorney Malpractice Blog on April 15, 2009 (boomark / email).