Opinion
1681CV03554
01-24-2018
Dino DETHOMAS v. CUMBERLAND FARMS, INC.
MEMORANDUM AND ORDER ON PLAINTIFF’S MOTION TO COMPEL AND DEFENDANT’S MOTION FOR PROTECTIVE ORDER
Edward P. Leibensperger, Justice
These motions raise an issue as to the scope, and possible waiver, of the attorney-client privilege.
BACKGROUND
Dino DeThomas commenced this action against his former employer, Cumberland Farms, Inc. He joined Cumberland in 2010 as Senior Vice President of Real Estate and was promoted to Chief Real Estate Officer. On September 16, 2016, DeThomas’ employment was terminated. He sues Cumberland for violation of the Wage Act, breach of contract, breach of the implied covenant of good faith and fair dealing and unjust enrichment. The crux of his claims is an averment of wrongful termination.
Cumberland asserts counterclaims. Cumberland alleges that in connection with a project to demolish three buildings on Aliens Avenue in Providence, R.I. (the " Aliens Avenue Project"), DeThomas, on behalf of Cumberland, engaged a contractor, D.F. Pray, with whom he had a prior relationship. DeThomas allegedly failed to disclose to his employer, Cumberland, that he was involved in unrelated real estate deals with D.F. Pray and one of its principals. This relationship, according to Cumberland, caused DeThomas to act for the benefit of D.F. Pray rather than Cumberland when issues arose as to D.F. Pray’s performance on the Aliens Avenue Project.
In fact, Cumberland alleges that DeThomas " denied that he has any business relationship with D.F. Pray or Scott Pray and assured Cumberland Farms that there was no conflict of interest." Counterclaim, 117.
Among the specific allegations are the following. When a subcontractor of D.F. Pray sued D.F. Pray for payment arising from the Aliens Avenue Project, DeThomas approved a settlement whereby Cumberland paid part of the consideration, even though Cumberland had not been sued by the subcontractor. Allegedly, " DeThomas did not consult with the CEO or the Chief Legal Officer of Cumberland Farms regarding the settlement agreement or its terms." Counterclaim ¶ 14. DeThomas also approved payment to D.F. Pray for amounts far in excess of the original contract price. DeThomas refused to terminate D.F. Pray when there were performance issues. Moreover, Cumberland alleges that DeThomas " failed to disclose to the CEO of Cumberland Farms any of the issues associated with the Project, including the substantially increased costs." Counterclaim, ¶ 23. On the basis of these allegations, Cumberland asserts claims of breach of fiduciary duty, breach of the implied covenant of good faith and fair dealing, and conversion.
DeThomas propounded requests for Cumberland to produce documents. Several of the requests sought documents constituting communications among Cumberland personnel concerning the Aliens Avenue Project and DeThomas’ performance regarding the Project. In response, Cumberland produced non-privileged documents but objected to producing documents constituting communications with Cumberland’s in-house counsel and outside lawyers. Cumberland prepared a privilege log listing memoranda and emails, by date, and noting the names of the individuals receiving or participating in the communications. DeThomas moves to compel the production of the documents on the privilege log arguing that the attorney-client privilege was waived by Cumberland by putting " at issue" the question of whether DeThomas breached fiduciary duties to Cumberland. In his motion, DeThomas fails to specify, paragraph by paragraph, the requests for which he is moving to compel. Instead, he argues that Cumberland broadly waived the privilege with respect to all documents on the privilege log.
Cumberland amended and supplemented the privilege log several times. The last version of the privilege log submitted to the court is the Fifth Amended Privilege Log. The Log runs to 172 pages. Assuming approximately 12 entries per page, the Log describes approximately 2, 000 documents that have been withheld from production.
In response, Cumberland broadly asserts the attorney-client privilege even when the communications, as described on the privilege log, are with DeThomas. For example, many documents listed on the privilege log are emails or memoranda from DeThomas to a Cumberland attorney. Other documents listed on the privilege log are emails among Cumberland personnel, including Cumberland attorneys, where DeThomas is also included as one of the recipients.
Cumberland also moves for a protective order preventing the testimony at deposition of two in-house lawyers (Howard and Glennon) and two lawyers from the law firm that represented Cumberland on the Aliens Avenue Project, Adler Pollack & Sheehan, P.C. (Noonan and Chaudary), " regarding communications protected by the attorney-client privilege and attorney work product." The motion raises the same legal issue regarding " at issue" waiver of privilege that is the subject of DeThomas’ motion to compel. Cumberland contends that none of its lawyers should be compelled to testify regarding privileged communications, including communications received from or made to DeThomas.
DISCUSSION
DeThomas concedes that there is an attorney-client privilege protecting confidential communications with Cumberland’s lawyers for the purpose of seeking legal advice. Further, the privilege belongs to the corporation and only the corporation may assert or waive the privilege. Here, Cumberland asserts the privilege with respect to all documents listed on its privilege log. Cumberland also asserts the privilege with respect to anticipated testimony by its lawyers concerning those documents and other subjects coming within the privilege.
In his motion to compel, DeThomas does not challenge the validity of the assertion of privilege with respect to any of the approximately 2, 000 documents listed on the log. For purposes of this motion, therefore, I assume that every document on the log is, in fact, a confidential communication, not shared with any third party, constituting or reflecting the provision of legal advice. The only ground for DeThomas’ motion to compel is the argument that Cumberland waived the privilege by putting certain matters " at issue" by the filing of its counterclaim. " [A] litigant may implicitly waive the attorney-client privilege, at least partly, by injecting certain claims or defenses into a case." Darius v. City of Boston, 433 Mass. 274, 277 (2001). On that basis, DeThomas asks that the privilege be deemed to have been waived with respect to all documents on the privilege log.
DeThomas’ broad-brush approach is antithetical to the Supreme Judicial Court’s recognition of the limited " at issue" waiver. In the seminal case of Darius the Court recognized the general principle of " at issue" waiver but noted that such a waiver " should not be tantamount to a blanket waiver of the entire attorney-client privilege in the case. By definition, it is a limited waiver of the privilege with respect to what has been put ‘at issue.’ " Id. at 283. Accordingly, I must determine whether a subject has been put " at issue" by Cumberland’s counterclaims, and whether there are documents on the privilege log that should be released from privilege protection as a result. I must also consider that in order to substantiate an " at issue" waiver, it should be shown that the privileged information sought to be discovered is not readily available from another source. Id. at 284.
A review of Cumberland’s counterclaim demonstrates beyond argument that Cumberland puts " at issue" certain communications regarding the Aliens Avenue Project. The central premise of Cumberland’s breach of fiduciary duty claim is that DeThomas allegedly failed to inform Cumberland of his relationship with D.F. Pray and, more importantly, acted to the detriment of Cumberland in connection with managing the relationship with D.F. Pray. The explicit allegation is made that DeThomas did not consult with the CEO or the Chief Legal Officer of Cumberland regarding a settlement DeThomas agreed to on behalf of Cumberland. More generally, Cumberland alleges DeThomas failed to disclose to Cumberland any of the issues associated with the Aliens Avenue Project, including the substantially increased costs. Consequently, the substance of communications between DeThomas and Cumberland, including what was said to or by Cumberland’s lawyers, is essential to determining whether Cumberland was or was not aware of DeThomas’ decisions, about which Cumberland now complains. Likewise, Cumberland’s internal communications with lawyers about the Aliens Avenue Project are critical to evaluate the claim of breach of fiduciary duty and the defenses thereto.
Both sides cite the Supreme Judicial Court’s decision in Clair v. Clair, 464 Mass. 205 (2013), for their respective positions on these motions. Clair supports DeThomas’ argument for finding " at issue" waiver. In Clair, " at issue" waiver of privileged communications was found where the holder of the privilege, the company, asserted counterclaims for breach of fiduciary duty against James Clair (through his executrix). The Court held that " the disclosures that James may or may not have made to [the company’s directors and legal counsel] regarding [the subject matter of the company’s counterclaim] are at the heart of proving or disproving the counterclaim." Id. at 220. As a result, the Court held that James Clair’s executrix " is entitled to discovery of all privileged communications between the companies and corporate counsel, both testimonial and documentary, that specifically relate to the [subject matter of the counterclaim]." Id. at 221. See also, Zabin v. Picciatto, 73 Mass.App.Ct. 141, 158 (2008) (to defend a claim, a party is entitled to obtain discovery from lawyer for the other side whose participation in the underlying dispute is at issue).
Applying the " at issue" waiver principle described in Clair to this case dictates the following result. DeThomas is entitled to discovery of privileged communications between Cumberland and its lawyers, both testimonial and documentary, that specifically relate to the Aliens Avenue Project.
Cumberland attempts to distinguish Clair. Cumberland points to the fact that James Clair died prior to the litigation. Thus, he was not available to testify as to what he told the company and its legal counsel about the subject matter of the counterclaim. The Court, in reaching its decision to find " at issue" waiver, made note of the fact that the only available source of the information about what James Clair told the company and its legal counsel was the individuals, including counsel, who were " within the circle of privilege." Id. at 220. In contrast, Cumberland argues, there are non-privileged communications about the Aliens Avenue Project available to DeThomas.
In Clair, the Court cited, favorably, Greater Newburyport Clamshell Alliance v. Public Serv. Co. of N.H., 838 F.2d 13, 22 (1st Cir. 1988), for the proposition that parties seeking to discover privileged communications do not have to prove that the information sought is absolutely unavailable from other sources. Clair, 464 Mass. at 220. The Court in Greater Newburyport described a balancing of the relevance and importance of the privileged material against the policy behind the attorney-client privilege as a test for when to enforce an " at issue" waiver. " In a civil damages action ... fairness requires that the privilege holder surrender the privilege to the extent that it will weaken, in a meaningful way, the defendant’s ability to defend." Greater Newburyport, 838 F.2d at 20.
Cumberland is non-specific about what other sources DeThomas might have to defend himself against Cumberland’s claim of breach of fiduciary duty. It appears, based on oral argument, that Cumberland will object to DeThomas, himself, testifying about his communications with Cumberland’s lawyers. While not saying so directly, Cumberland’s motion for a protective order to limit the depositions of its lawyers, if allowed, would bar those lawyers from testifying at trial about any confidential communications with DeThomas or other Cumberland personnel about the Aliens Avenue Project. On the privilege log, Cumberland claims privilege with respect to a plethora of documents reflecting communications in which DeThomas was a participant, along with other business personnel, but also including a Cumberland lawyer. In sum, Cumberland, while making a claim that DeThomas was a rogue employee, acting on his own concerning the Aliens Avenue Project, seeks to suppress the evidence of what it actually knew or, perhaps, agreed to. A claimant cannot fairly be permitted to disclose as much as it pleases and then withhold the remainder to the detriment of the other side. Id.
For these reasons, I find a limited " at issue" waiver by Cumberland of the attorney-client privilege. The waiver is limited by subject matter and time. The subject matter is the Aliens Avenue Project. The temporal limitation is taken from the allegations in Cumberland’s counterclaim. The beginning date is the date before March 2013, when Cumberland considered entering into a contract with D.F. Pray. The ending date is the date, sometime after July 2014, when Cumberland paid the last invoice from D.F. Pray. That is the relevant time period.
ORDER
DeThomas’ motion to compel is ALLOWED, in part, and DENIED, in part. The motion is allowed to the extent that Cumberland shall produce to DeThomas those documents on its privilege log concerning (see definition in S.Ct. Rule 30A) the Aliens Avenue Project, so long as the documents fall within the relevant time period. The motion to compel is otherwise denied.
Cumberland’s motion for a protective order is DENIED, DeThomas is entitled to discover communications concerning the Aliens Avenue Project, for the relevant time period, as described above. Otherwise, the attorney-client privilege may be asserted on a question by question basis.