July 2012 Vol. 9, No. 2

9.2.12

Attorney-Client Privilege

Case:

Kerner v. Superior Court (2012) 206 Cal.App.4th 84

Issue:

Attorney-husband sued the law firm and members of the firm where he had been a named partner for breach of fiduciary duty, breach of contract, and other claims after firm fired attorney because of allegations of domestic violence by his then-wife, also an attorney at the firm.  Law firm was engaged primarily in workers’ compensation defense.  Attorney ultimately was found factually innocent of domestic violence.  Was wife properly compelled to answer deposition questions about her consultations with another firm attorney (“firm attorney”) where:  (1) firm attorney and wife previously failed to state that they had an attorney-client relationship and failed to claim the privilege; (2) firm attorney testified in deposition that all he did for wife was to hire a private investigator and act as a friend in connection with husband’s criminal prosecution for domestic violence; but where (3) both firm attorney and wife later testified than an attorney-client relationship did exist; (4) wife testified that firm attorney had advised her in various litigation against husband; and (5) attorney later explained that he did not understand the deposition question to be asking about the legal advice he gave to wife in the criminal matter and other proceedings?

Holding:

No.  The trial court finding that there was no attorney-client relationship between firm attorney and wife was not supported by substantial evidence.  Wife’s deposition testimony and firm attorney’s declaration were “consistent, plausible, and not inherently unbelievable” in establishing that wife sought and received legal advice from firm attorney in connection with a variety of legal proceedings against husband.  (206 Cal.App.4th 84, 118-119.)   Firm attorney and wife were never directly questioned about the existence of an attorney-client relationship between them and lacked a compelling reason to disclose it until wife was asked deposition questions in husband’s employment lawsuit against the firm where they both once worked.  They did not contradict their prior testimony.  Accordingly, the Court of Appeal granted wife’s petition challenging the order requiring her to answer deposition questions about communications between firm attorney and her and ordered the trial court to reconsider that order in light of the Court of Appeal’s opinion.

The Court of Appeal also found that the finding of husband’s factual innocence in connection with the domestic violence prosecution was not entitled to collateral estoppel effect in his employment action against the law firm.  The Court of Appeal rejected husband’s contention that the law firm was in privity with wife in the domestic violence proceeding because there certain members of the firm advised wife in connection with the domestic violence action. 

The Court noted the paradox in the trial court finding that firm attorneys had no attorney-client relationship with wife for purposes of asserting the attorney-client privilege, while also finding that there was an attorney-client relationship for purposes of establishing privity for purposes of collateral estoppel.  (Id. at 126, note 21.)  “[A]n attorney for a party is not the party and does not share the party’s legal rights and interests.  Although an attorney may control the litigation to a significant degree, the attorney does so on behalf of the client rather than in the service of the attorney’s own interests.”  (Id. at 126.)  To find an attorney in privity with his or her client for purposes of collateral estoppel based on the attorney-client relationship could cause attorneys to subordinate their clients’ interests to their own, creating a potential conflict of interest and compromising “the attorney’s ability to faithfully serve the client’s best interests.”  (Ibid.)  The Court rejected as unpersuasive non-California authorities holding that an attorney-client relationship establishes privity for purposes of res judicata and collateral estoppel.  (Id. at 127.)    

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