Ethics in Brief

Ethics in Brief is designed to present ethical issues that practitioners might well face on a daily basis. It is a service of the Legal Ethics Committee of the San Diego County Bar Association for SDCBA members.

Can Adverse Parties Maintain Attorney Client Communications Under the “Common Interest” Privilege?   Yes, Under the Right Circumstances

In Seahaus La Jolla Owners Assn. v. Superior Court (2014) 224 Cal. App. 4th 754 (“Seahaus”), the Division One of the Fourth District Court of Appeal held a homeowners association’s (“HOA”) litigation meetings related to the HOA’s construction defect lawsuit were subject to protection under the attorney-client privilege concluding the “common interest doctrine” applied to the subject litigation meetings, thereby barring the defendants in the HOA’s lawsuit from seeking discovery related to the content and disclosures made during those meetings.

The plaintiff HOA initiated a construction defect lawsuit against a residential developer and builder, seeking damages for construction defects related to common areas. The defendants took the depositions of individual homeowners and inquired regarding the communications and disclosures made at informational litigation update meetings. The meetings were conducted by the HOA’s counsel with groups of homeowners, some of whom had filed their own, separate lawsuits against the same defendants. Motions to compel were filed after attorney-client privilege objections were asserted by counsel for the HOA. After the court-appointed discovery referee opined that the common interest doctrine applied and that the communications presented at the meetings were subject to the attorney-client privilege, the trial court rejected this recommendation and overruled the HOA’s privilege objections. The HOA filed a petition for a writ of mandate.

Defendants argued the privilege had been waived based on the presence of persons who were not the clients of the HOA’s attorney, that the subject communications were not “confidential communications” and that there was no “common interest” between the the individual homeowners HOA.

Section 954 of the California Evidence Code establishes a privilege “to refuse to disclose, and to prevent another from disclosing, a confidential communication between client and lawyer.” A “confidential communication between client and lawyer” is defined in Section 952 of the Evidence Code. Third persons may be present if they are there “to further the interests of the client in the consultation” or when “disclosure is reasonably necessary for the transmission of the information or the accomplishment of the purpose for which the lawyer is consulted”.

“Accordingly, section 952 allows privileges to be preserved when a family member, business associate or joint client (and/or the attorney for same) meets with the client and attorney who claim privilege, in regard to a matter of joint concern, ‘when disclosure of the communication is reasonably necessary to further the interest of the [claimant/litigant].’” (Seahaus, supra, 224 Cal. App. 4th at p. 768.) The common interest doctrine is “a nonwaiver doctrine, analyzed under standard waiver principles applicable to the attorney-client privilege and the work product doctrine.” (OXY Resources California LLC v. Superior Court (2004) 115 Cal.App.4th 874, 889.)

In analyzing these principals, the Court of Appeal relied upon the association’s duties and powers, as defined by statute and the common interest developments governing CC&R’s, which required communication concerning the HOA’s litigation to the individual homeowners. The court also found that the homeowners did, in fact, have interests which were closely aligned with the HOA. Although the common interest was upheld under these facts, each practitioner should carefully consider the presence of third parties to attorney client communications to avoid possible waiver.

– Andrew Servais

**No portion of this summary is intended to constitute legal advice. Be sure to perform independent research and analysis. Any views expressed are those of the author only and not of the SDCBA or its Legal Ethics Committee.**