Opinion
Certified for Partial Publication.
Pursuant to the California Rules of Court, rule 976(b), it is ordered that the opinion be certified for partial publication in the Official Reports, with the exception of part D.
Review Denied Dec. 22, 1998.
Clifford & Brown, Stephen T. Clifford and Stephen P. Wainer, Bakersfield, for Petitioner.
No appearance for Respondent.
McInerney & Dillon, Robert L. Leslie and Alexander Bannon, Oakland, for Real Parties in Interest.
O'HARA, J.
OPINION
The law firm of McCormick, Barstow, Sheppard, Wayte & Carruth (hereinafter McCormick or the McCormick firm) represented Dwight Nelson and his business entities in approximately 175 different matters over a period of many years. As of at least early 1994 Nelson made various statements which caused McCormick to believe that Nelson intended to sue the McCormick firm. In or about October of 1994 McCormick retained the services of another law firm, Clifford & Brown, due to McCormick's concerns about the possibility of Nelson suing McCormick. On November 27, 1996, Nelson and several of Nelson's businesses (hereinafter collectively Nelson) did indeed file a legal malpractice action against the McCormick firm and three of the firm's attorneys. In that action Nelson served McCormick with a request for production of documents. McCormick objected on various grounds to much of the request. These included an objection of "attorney-client privilege." Nelson ultimately moved to compel further responses to its request and for production of the requested documents. McCormick's opposition to Nelson's motion included a list of 73 documents, identified by title and date, claimed by McCormick to be privileged. The titles of the 73 documents identified most of the documents as being memos from one or more McCormick attorneys or employees to
"4. As of at least early 1994, Mr. Nelson made various statements to McCormick, Barstow which caused McCormick, Barstow to believe that Mr. Nelson intended to institute litigation against the firm. McCormick, Barstow has a Management Committee which monitors internal activities of the firm, including potential or threatened claims of legal malpractice. I have substantial experience in defending legal malpractice claims, and began advising/informing the firm as of early 1994 regarding Mr. Nelson's comments relating to potential institution of litigation against the firm.
"5. Reports, memoranda and other documents were created in anticipation that litigation would be instituted by Mr. Nelson. McCormick, Barstow has asserted the attorney-client and work product privileges to these documents, which are referenced in defendants' Privilege Log. This documentation was intended for the ultimate use of McCormick, Barstow in representing its own interest and other counsel ultimately retained by McCormick, Barstow in the event that Mr. Nelson did file a lawsuit.
"6. In or about October, 1994, McCormick, Barstow retained the firm of Clifford & Brown due to ongoing concerns about the possibility of Mr. Nelson instituting litigation against the firm."
After a hearing, the court ordered production of 61 of the 73 documents listed. The 12 documents listed but not ordered to be produced are not the subject of the present case. The present case concerns the court's order that the remaining 61 documents be produced by McCormick for Nelson's inspection. Only one of these 61 documents was dated earlier than October 1994, the time when McCormick retained the Clifford firm. McCormick contends that the production of these documents would violate the attorney-client privilege, and has petitioned this court for extraordinary relief from the superior court's order that the documents be produced. Because the attorney-client privilege "is clearly one which our judicial system has carefully safeguarded" (Mitchell v. Superior Court (1984) 37 Cal.3d 591, 600, 208 Cal.Rptr. 886, 691 P.2d 642), we deemed it appropriate to issue an order to show cause and to carefully examine McCormick's contention that compliance with the trial court's order would violate the privilege. (See Pacific Tel. & Tel. Co. v. Superior Court (1970) 2 Cal.3d 161, 170, fn. 11, 84 Cal.Rptr. 718, 465 P.2d 854; Roberts v. Superior Court (1973) 9 Cal.3d 330, 335-336, 107 Cal.Rptr. 309, 508 P.2d 309; and Sav-On Drugs, Inc. v. Superior Court (1975) 15 Cal.3d 1, 5, 123 Cal.Rptr. 283, 538 P.2d 739.) As we shall explain, we find no error in the trial court's order that the 61 documents be produced.
DISCUSSION
A. The Attorney-Client Privilege
The attorney-client privilege "authorizes a client to refuse to disclose, and to prevent others from disclosing, confidential communications between attorney and client." (Mitchell v. Superior Court, supra, 37 Cal.3d 591, 599, 208 Cal.Rptr. 886, 691 P.2d 642.) Once the attorney-client relationship is established, the privilege "attaches Moeller v. Superior Court
The privilege is called both the "attorney-client privilege" and the "lawyer-client privilege." The terms are synonymous, and we use both of them in this opinion. Although much of the case law uses the term "attorney-client privilege," the Evidence Code uses "lawyer-client privilege." (See Evid.Code, § 912, subd. (a).) In California, rules pertaining to the privilege are codified and appear primarily at sections 950 through 958 of the Evidence Code. The basic rule appears at section 954, which states:
When the attorney-client privilege is asserted, the party relying on the privilege must show that there was a "communication between client and lawyer" (Evid.Code, § 954; State Farm Fire & Casualty Co. v. Superior Court (1997) 54 Cal.App.4th 625, 639, 62 Cal.Rptr.2d 834.) Once that showing is made, "the communication is presumed to have been made in confidence and the opponent of the claim of privilege has the burden of proof to establish that the communication was not confidential." (Evid.Code, § 917; accord, see also State Farm Fire & Casualty Co. v. Superior Court, supra, 54 Cal.App.4th at p. 639, 62 Cal.Rptr.2d 834.) The typical or garden variety privileged attorney-client communication is the situation in which the lawyer and client are alone and speak to each other in confidence. Another example would be the client writing to the lawyer, or the lawyer writing to the client. Whether there is a "communication between client and lawyer" has been a more difficult issue, however, when a party asserting the privilege claims to have been a "client" preparing a written "communication" to a "lawyer" even though the client was not an individual person, but rather a business or a political subdivision. These latter scenarios have been the subject of several published cases.
B. Case Law Interpretation of the Attorney-Client Privilege
In Holm v. Superior Court (1954) 42 Cal.2d 500, 267 P.2d 1025, a passenger on a
Several years later the case of Gene Compton's Corp. v. Superior Court (1962) 205 Cal.App.2d 365, 23 Cal.Rptr. 250, appeared to hold that statements and reports of employees concerning an accident on the employer's premises were privileged, as a matter of law, if those statements and reports were sent, pursuant to the terms of an insurance policy, to the employer's insurance carrier. (See 205 Cal.App.2d at p. 366, 23 Cal.Rptr. 250.) Subsequently in D.I. Chadbourne, Inc. v. Superior Court (1964) 60 Cal.2d 723, 36 Cal.Rptr. 468, 388 P.2d 700, the California Supreme Court expressly disapproved of Gene Compton's and reaffirmed Holm. The court said "Holm ... holds ... that a statement required of an employee for two or more purposes, one of which would bring it within the attorney-client privilege, will be protected as privileged if that is determined to be the dominant purpose of making the statement in the first instance." (D.I. Chadbourne, Inc. v. Superior Court, supra, 60 Cal.2d at p. 733, 36 Cal.Rptr. 468, 388 P.2d 700.) The D.I. Chadbourne court also stated "[t]o the extent that Compton's failed to recognize the [superior] court's duty to decide a question of fact, it is disapproved." (60 Cal.2d at p. 739, fn. 6, 36 Cal.Rptr. 468, 388 P.2d 700.) D.I. Chadbourne also reaffirmed that "[t]he party claiming privilege carries the burden of showing that the evidence which it seeks to suppress is within the terms of the statute" and that "[w]hen the facts, or reasonable inferences from the facts, shown in support of or in opposition to the claim of privilege are in conflict, the determination of whether the evidence supports one conclusion or the other is for the trial court, and a reviewing court may not disturb such finding if there is any substantial evidence to support it." (D.I. Chadbourne, Inc. v. Superior Court, supra, 60 Cal.2d at p. 729, 36 Cal.Rptr. 468, 388 P.2d 700.) The court in D.I. Chadbourne went on to observe, however, that Holm "failed to state whose purpose was involved," i.e., "[i]s it the purpose of the employee, or that of the corporation?" (60 Cal.2d at p. 733, 36 Cal.Rptr. 468, 388 P.2d 700.) The D.I. Chadbourne court said that when an employee is free to give or not to give a statement to the employer, "the employer should not be free to claim the privilege on the ground that the freely made statement was subsequently passed on to its attorney." (60 Cal.2d at p. 734, 36 Cal.Rptr. 468, 388 P.2d 700.) This is because "[t]o allow such claim would be to hold that a litigant, into whose hands a nonprivileged communication falls, may create privilege in the subject matter merely by transmitting it to his attorney" and "[t]hat is not and should not be the law." (60 Cal.2d at p. 734, 36 Cal.Rptr. 468, 388 P.2d 700.) On the other hand, if the employee is required by the corporate employer to give a statement, "then the employee's frame of mind ceases to be of great importance" and the corporation's "basic reason for requiring the statement (including, but not confined to, the 'dominant purpose') must be inquired into." (60 Cal.2d at p. 734, 36 Cal.Rptr. 468, 388 P.2d 700.) The D.I. Chadbourne court further stated that "the public policy behind the attorney-client privilege requires that an artificial person be given equal opportunity with a natural person to communicate with its attorney, within the professional relationship, without fear that its communication will be made public," but also that "reason dictates that the corporation not be given greater privileges
Evidence Code section 917, which pertains to several types of privileges including the lawyer-client privilege, was enacted after D.I. Chadbourne was decided. As we have already mentioned, that section places the burden on the opponent of the privilege to establish that the lawyer-client communication was not confidential. But this burden only arises after the proponent of the privilege establishes that there was indeed a lawyer-client communication. (See Alpha Beta Co. v. Superior Court (1984) 157 Cal.App.3d 818, 824-825, 203 Cal.Rptr. 752.) As we shall explain, it is this first hurdle that McCormick has not cleared.
Nineteen years after D.I. Chadbourne, the court in Travelers Ins. Companies v. Superior Court (1983) 143 Cal.App.3d 436, 191 Cal.Rptr. 871, attempted to apply D.I. Chadbourne 's principles to the following factual scenario. Attorney Rodney Klein represented Elnora Becknell. Becknell was a plaintiff in a medical malpractice action. The medical malpractice action was dismissed under former Code of Civil Procedure section 583, subdivision (b) due to the plaintiff's failure to be bring the case to trial within five years of the filing of the complaint. For approximately 10 months after the dismissal of Becknell's medical malpractice case, Klein continued to represent her. This included filing an appeal of the dismissal. At the end of these 10 months, Becknell fired Klein. Becknell ultimately sued Klein "and his associated professional corporations" (143 Cal.App.3d at pp. 439-440, 191 Cal.Rptr. 871, collectively Klein) for legal malpractice. She also named Klein's legal malpractice insurer as a defendant. She alleged that the insurer "requested that Klein make Becknell's file available to it without her consent or knowledge; that he did so, although it contained confidential, private, privileged information; and that [Klein and his legal malpractice insurer] acted with fraud and malice in agreeing among themselves that the fact of the examining and copying of the file would be withheld from her...." (143 Cal.App.3d at p. 440, 191 Cal.Rptr. 871.) In her action against Klein and the legal malpractice insurer, Becknell sought inspection of the insurer's correspondence to or from Klein regarding Becknell's medical malpractice action, and notes of the insurer's employees' conversations with Klein about Becknell or her medical malpractice action. Klein and his insurer asserted the attorney-client privilege. The trial court ordered production of all such documents designated with, or generated prior to, the date on which Klein substituted out as attorney of record for Becknell in Becknell's medical malpractice action. It ruled that documents designated with a later date, or generated after that date, need not be produced. (143 Cal.App.3d at p. 442, 191 Cal.Rptr. 871.) The appellate court concluded, however, that the trial court erred in ordering total production of all communications generated or dated prior to the end of Klein's representation of Becknell. It held that even though Klein still represented Becknell in Becknell's medical malpractice action in the 10 months after that action had been dismissed for lack of timely prosecution, this fact alone did not prevent Klein from seeking legal advice from his (Klein's) attorney. With this background in mind, we now turn to McCormick's argument that the superior court's ruling violated the attorney-client privilege. McCormick focuses on the portion of the court's ruling which reads as follows:
"The court refuses to extend the holding of Travelers Insurance Companies v. Superior Court (1983) 143 Cal.App.3d 436, 191 Cal.Rptr. 871 to the facts of this case by analogy. Here, Defendant had no contractual obligation to communicate facts which could lead to litigation (as between an insured and its insurer) and at best, Travelers would require this court to review each communication to determine, as a question of fact, whether or not the 'dominant purpose' of the communication was 'made to or for further communication to an attorney.' (Id. at p. 449, 191 Cal.Rptr. 871.) Once Defendant retained the services of Mr. Clifford, there is no question that its communications were privileged. But prior to such employment, the communications of attorneys between themselves do not enjoy the protections of the attorney-client privilege."
We begin our analysis by observing that there appears to be no dispute about the applicable law. McCormick argues that "rules governing the application of the attorney-client privilege set forth in Chadbourne ... justify the privilege as to the disputed documents." Nelson agrees that "the analysis articulated in Chadbourne should be applied to the facts of this case." Rather, the disputes in this case appear to be about whether McCormick did or did not demonstrate the applicability of the attorney-client privilege, and about whether the trial court in fact applied the applicable law. McCormick contends (1) the evidence (i.e., the declaration of Marshall Whitney) showed the applicability of the attorney-client privilege to the 61 documents, and therefore the court erred in not finding the documents to be privileged, and (2) even if the evidence did not conclusively demonstrate the applicability of the privilege, the court nevertheless still erred in ordering production of the documents because the court failed to apply the "dominant purpose" test of D.I. Chadbourne. McCormick also contends (3) that the trial court erred in ordering McCormick to pay $1,530 in monetary sanctions. We do not find any of these contentions to be persuasive.
McCormick appears to contend that its internally generated documents were attorney-client communications because it suspected it might be sued by Nelson. But McCormick presented no evidence attempting to explain how any of these documents would qualify as a "confidential communication between client and lawyer." (Evid.Code, § 954.) If the McCormick firm was the Id written account of events would be a privileged lawyer-client communication because he, the motorist, was communicating with himself, the lawyer. As we have explained, we do not view such a document as being a "communication between client and lawyer" and thus it would not be eligible for the privilege.
Nelson has filed in this court a motion requesting an order that McCormick's reply brief be returned to McCormick with an order that McCormick strike out three portions of the reply brief and then redeposit the brief with the clerk of this court. The three portions of the McCormick reply brief to which Nelson objects read as follows:
In order for the documents in question to be privileged under the lawyer-client privilege, McCormick would have had to demonstrate that the documents were intended to be communications between a client and another person, i.e., the client's lawyer, or at least that such was the dominant purpose of those documents. We do not view the trial court's ruling as having refused to undertake that inquiry. Rather, we view McCormick's evidentiary showing as a concession that a major purpose of the documents was for McCormick's own, internal "ultimate use ... in representing its own interest...." McCormick appears to want to treat its intent to help it represent itself, and its concomitant intent "ultimately" to cooperate with any outside counsel which might be retained, as essentially the same concept for purposes of the lawyer-client privilege. They are not. The privilege protects a confidential communication between a client and a lawyer. It does not protect writings that are not confidential communications between a client and a client's lawyer.
In the present case, McCormick retained the Clifford firm in October of 1994. Sixty of the sixty-one documents ordered produced were authored in or after October of 1994. The trial court could properly have concluded that if these 60 documents had been intended to be confidential communications from the McCormick firm to the Clifford firm, they would have been addressed to the Clifford firm and not to other members or employees of the McCormick firm. Nothing in the Whitney declaration attempts to explain why one pre-October 1994 document (an April 5, 1994, memo to Marshall Whitney from Steve Rau) should be treated any differently than the other sixty documents. The trial court thus could properly have concluded that the dominant purpose of each of these 61 documents was for one McCormick principal or employee to communicate to another McCormick principal or employee, and not for the McCormick firm to communicate confidentially to its lawyer.
McCormick cites and quotes D.I. Chadbourne 's "basic principles" Nos. 1, 4 and 5, and says these "are particularly appropriate here." The three principles state:
"1. When the employee of a defendant corporation is also a defendant in his own right (or is a person who may be charged with liability), his statement regarding the facts with which he or his employer may be charged, obtained by a representative of the employer and delivered to an attorney who represents (or will represent) either or both of them, is entitled to the attorney-client privilege on the same basis as it would be entitled thereto if the employer-employee relationship did not exist;
"W27
"4. Where the employee's connection with the matter grows out of his employment to the extent that his report or statement is required in the ordinary course of the corporation's business, the employee is no longer an independent witness, and his statement or report is that of the employer;
"5. If, in the case of the employee last mentioned, the employer requires (by standing rule or otherwise) that the employee make a report, the privilege of that report is to be determined by the employer's purpose in requiring the same; that is to say, if the employer directs the making of the report for confidential transmittal to its attorney, the communication may be privileged;".... (D.I. Chadbourne, Inc. v. Superior Court, supra, 60 Cal.2d at pp. 736-737, 36 Cal.Rptr. 468, 388 P.2d 700.)
McCormick argues that because Nelson also named three individual McCormick attorneys (Marshall Whitney, Steven Rau and Stephen Carroll) as defendants in Nelson's legal malpractice action, this fact, coupled with principles No. 1, 4 and 5, somehow makes privileged any documents authored by these three gentlemen and addressed to other attorneys or employees of the McCormick firm. McCormick does not explain, however, how these three principles call for McCormick's D. The Award of Sanctions was Proper
See footnote *, ante.
DISPOSITION
The order to show cause is discharged. This court's March 19, 1998, order staying further proceedings in Tulare County Superior Court action No. 176819 is dissolved. McCormick's petition for writ of mandate or other appropriate relief is denied. Costs are awarded to real parties in interest. (See Cal.Rules of Court, rule 56.4.)
HARRIS and BUCKLEY, JJ., concur.
"Subject to Section 912 and except as otherwise provided in this article, the client, whether or not a party, has a privilege to refuse to disclose, and to prevent another from disclosing, a confidential communication between client and lawyer if the privilege is claimed by:
"(a) The holder of the privilege;
"(b) A person who is authorized to claim the privilege by the holder of the privilege; or
"(c) The person who was the lawyer at the time of the confidential communication, but such person may not claim the privilege if there is no holder of the privilege in existence or if he is otherwise instructed by a person authorized to permit disclosure.
"The relationship of attorney and client shall exist between a law corporation as defined in Article 10 (commencing with Section 6160) of Chapter 4 of Division 3 of the Business and Professions Code and the persons to whom it renders professional services, as well as between such persons and members of the State Bar employed by such corporation to render services to such persons. The word 'persons' as used in this subdivision includes partnerships, corporations, limited liability companies, associations and other groups and entities." Section 952 states:
"As used in this article, 'confidentialcommunication between client and lawyer' meansinformation transmitted between a client and his or herlawyer in the course of that relationship and inconfidence by a means which, so far as the client isaware, discloses the information to no third personsother than those who are present to further theinterest of the client in the consultation or those towhom disclosure is reasonably necessary for thetransmission of the information or the accomplishmentof the purpose for which the lawyer is consulted, andincludes a legal opinion formed and the advice given bythe lawyer in the course of that relationship. Acommunication between a client and his or her lawyer isnot deemed lacking in confidentiality solely becausethe communication is transmitted by facsimile, cellulartelephone, or other electronic means between the clientand his or her lawyer."
(1) "McCormick's Management Committee, which monitors internal activities of the firm including potential claims of malpractice, required the reports, memorandum and other documents in anticipation that plaintiffs might ultimately file a malpractice suit. The sole purpose of those documents were for McCormick's own use in defending the litigation.... (McCormick 4/24/98 "Petitioner's Reply to Return," etc. (hereinafter "Reply"), p. 3, lines 14-19.)
(2) "The only evidence before the trial court proved the documents were intended to be confidential and have always been maintained as confidential." (McCormick 4/24/98 Reply, p. 5, lines 6-8.)
(3) "[P]laintiffs later argue that McCormick was sanctioned for not complying with Rule 3-700 of the Rules of Professional Conduct." (McCormick 4/24/98 Reply, p. 10, lines 22-24.)
Nelson argues that the three above-quoted statements are not "supported by appropriate reference to the record." (Cal.Rules of Court, Rule 15(a).) Rule 18 states: "When a brief fails to comply with the requirements of these rules the reviewing court, on application of any party or on its own motion, and with or without notice as it may determine, may: (1) order the brief to be returned to counsel for correction by interlineation, cancellation, revision or replacement in whole or in part, and to be redeposited with the clerk within a time specified in the order; (2) order the brief stricken from the files, with leave to file a new brief within a specified time; or (3) disregard defects and consider the brief as if it were properly prepared." We deny Nelson's motion. Nevertheless, we emphasize that our analysis of the facts applicable to McCormick's claim of attorney-client privilege utilizes only the evidence presented to the superior court, and not any characterization of or paraphrasing of that evidence in any party's written arguments. In short, we "disregard" any characterization of the evidence that is "not supported by an appropriate reference to the record." (Rule 18, option "(3)" and Rule 15(a).) We take the same approach to what Nelson says is a mischaracterization by McCormick of Nelson's argument. We regard Nelson's argument to be the argument Nelson actually made. It appears in the record.