“Our Lips Aren’t Sealed”

Discoverable Attorney-Client Communications
Sierra J. Spitzer, Partner 
Schwartz Semerdjian Cauley & Moot, LLP
Published:  04.01.2015

In the recent decision of Anten v. Superior Court 183 Cal. Rptr. 3d 422 (Ct. App. 2015), the California Court of Appeal examined the issue of whether attorney-client communications made in the course of joint representation are discoverable in a subsequent malpractice suit by only one of the clients against their former attorney.  After consideration of both the statutory and policy implications, the court ultimately determined that said communications were not privileged and were in fact subject to discovery.

In Anten, Lewis Anten and Arnold and Lillian Rubin jointly retained Marvin Gelfand and Allan Kirios of the law firm Weintraub Tobin Chediak Coleman Grodin (“Weintraub”) to advise them concerning faulty tax advice given by their former lawyers (“tax lawyers”) and to represent them an audit arising from that advice. The Weintraub lawyers advised Anten and the Rubins that the tax lawyers’ error barred the favorable tax treatment they had sought for the sale of their business, and this error could not be cured.  Based on the Weintraub lawyers’ assessment, Anten and the Rubins settled with the Internal Revenue Service for over $1,000,000.  The Weintraub lawyers further advised Anten and the Rubins that the tax lawyers’ error warranted a malpractice suit.  At the time, Anten decided he did not want to sue, but rather, wanted to try to resolve the matter by way of settlement.  The Weintraub lawyers proceeded to “fire” Anten as a client and pursued a malpractice suit against the tax lawyers on behalf of the Rubins only.  Anten later changed his mind and filed suit against both the tax lawyers and Weintraub.

In the course of discovery in Anten’s suit, he moved to compel Weintraub to produce further responses to certain form interrogatories and requests for production of documents. Weintraub opposed the motion on the ground that it could not provide further responses without violating the attorney-client privilege, which the Rubins had expressly declined to waive.  A few months later, Anten served additional discovery on Weintraub, and Weintraub, again, objected on multiple grounds including the Rubins’ assertion of the attorney-client privilege.  Anten, in turn, again moved to compel further responses.  The court sustained Weintaub’s objection based on the Rubins’ assertion of the attorney-client privilege and denied Anten’s motion in its entirety.

Anten then petitioned the appeals court for a writ of mandate, seeking to overturn the trial court’s discovery ruling.  Specifically, Anten argued that the trial court abused its discretion by sustaining Weintraub’s objection based on the Rubins’ assertion of the attorney-client privilege and by denying Anten’s motion to compel on that basis. 

In performing its analysis, the appellate court first considered some established tenets in the law on the subject of attorney-client communications and privilege including, the rule the attorney-client privilege does not protect communications between an attorney and client in the circumstance of a lawsuit between an attorney and a client based on an alleged breach of a duty arising out of the attorney-client relationship (Dietz v. Meisenheimer & Herron (2009) 177 Cal.App.4th 771, 786; Evid. Code, §958) or in the case of joint clients later suing one another (Zador Corp. v. Kwan (1995) 31 Cal.App.4th 1285, 1294; §962.)  Further, the court acknowledged that it is a well established rule that one joint client cannot waive the attorney-client privilege for another joint client. (American Mut. Liab. Ins. Co. v. Superior Court (1974) 38 Cal.App.3d 579, 595.)  However, while all these rules touch upon the issue posed by this particular case, of one joint client charging the attorney with a breach of duty while the other joint client does not, none of them directly address it.  

Thus, digging deeper, the court next examined the relevant statutory language for guidance.  Evidence Code section 958 provides that “[t]here is no privilege under this article [i.e., no attorney-client privilege] as to a communication relevant to an issue of breach, by the lawyer or by the client, of a duty arising out of the lawyer-client relationship.” The rationale for the exception is that “‘[i]t would be unjust to permit a client . . . to accuse his attorney of a breach of duty and to invoke the privilege to prevent the attorney from bringing forth evidence in defense of the charge . . . .’ [Citation.]” (Solin v. O’Melveny & Myers (2001) 89 Cal.App.4th 451, 463-464; see also Glade v. Superior Court (1978) 76 Cal.App.3d 738, 746.)  For example, it would be “fundamentally unfair for a client to sue a law firm for the advice obtained and then to seek to forbid the attorney who gave that advice from reciting verbatim, as nearly as memory permits, the words spoken by his accuser during the consultation.” (Solin, supra, 89 Cal.App.4th at p. 463.) Similarly, a written fee contract between an attorney and a client is itself a privileged communication (Dietz, supra, 177 Cal.App.4th at p. 786), but it would be unfair to allow the client to invoke the privilege in order to exclude the contract in an action by the attorney for unpaid fees.  In sum, case law has established that the exception to the privilege is limited to communications between the lawyer charging or charged with a breach of duty, on the one hand, and the client charging or charged with a breach of duty, on the other. (See Schlumberger Limited v. Superior Court (1981) 115 Cal.App.3d 386, 392-393; Glade, supra, 76 Cal.App.3d at pp. 746-747.)

Applying the statutory language and taking into consideration relevant case law, the appeals court determined that this case falls squarely within the exception to the attorney-client privilege established under section 958 due to the fact that Anten sought discovery of communications relevant to issues of Weintraub’s breach of duties arising out of the lawyer-client relationship.  The court further reasoned that, even beyond the plain language of the statute, public policy considerations would lead to the same conclusion.  In particular, because Anten and the Rubins were joint clients of Weintraub, the Rubins’ communications with Weintraub were not confidential as to Anten.  “[I]n a joint client situation, confidences are necessarily disclosed.” (Zador, supra, 31 Cal.App.4th 1285, 1294.)  Second, considerations of fundamental fairness underlying section 958 weigh strongly in favor of applying the statute in this context.  For example, if an attorney breached a duty to one of two joint clients, and the wronged client sued the attorney, it would be unjust to allow the non-suing client to thwart the other’s suit by invoking the privilege to prevent introduction of relevant attorney-client communications made in the course of the joint representation, particularly if the alleged breach was that the attorney favored the interests of the non-suing client.  

Thus, based on both literal interpretation of the statute and relevant policy considerations, the court concluded that section 958 prohibits the Rubins (and Weintraub on behalf of the Rubins) from invoking the attorney-client privilege in Anten’s lawsuit against Weintraub with respect to relevant attorney-client communications made in the course of the joint representation.  For these reasons, the court granted Anten’s petition and directed the lower court to grant his motion to compel.  

As this ruling goes to show, sometime even with respect to initially privileged communications, our lips are not always sealed. Thus, this case provides valuable food for thought to those considering joint client representation.