HUMCO, INC., d/b/a HUMANA HOSPITAL-LEXINGTON PETITIONER v. HONORABLE MARY C. NOBLE, JUDGE, FAYETTE CIRCUIT COURT AND MARY COLEMAN
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RENDERED: December 10, 1999; 2:00 p.m.
TO BE PUBLISHED
C ommonwealth O f K entucky
C ourt O f A ppeals
NO.
1999-CA-002027-OA
HUMCO, INC., d/b/a HUMANA
HOSPITAL-LEXINGTON
v.
PETITIONER
ORIGINAL ACTION
REGARDING FAYETTE CIRCUIT COURT
HONORABLE MARY C. NOBLE, JUDGE
FAYETTE CIRCUIT COURT
RESPONDENT
AND
MARY COLEMAN
REAL PARTY IN INTEREST
* * * * * * * *
OPINION AND ORDER
DENYING CR 76.36 RELIEF
BEFORE: COMBS, EMBERTON, and GUIDUGLI, Judges.
COMBS, JUDGE:
The Court has considered the petition for writ of
mandamus and the response thereto and, being sufficiently
advised, ORDERS the petition be DENIED.
Petitioner, Humco, Inc. d/b/a Humana Hospital-Lexington
(Humana), contends that the decision of the respondent trial
court denying its motion to disqualify counsel for the real party
in interest, Mary Coleman (Coleman), is in error. Humana argues
that Coleman’s former and current counsel made ex parte contacts
with some of its managerial and non-managerial employees — with
the knowledge that Humana was represented by counsel, but without
the knowledge or consent of that counsel.
It submits that those
ex parte contacts violate SCR 3.130 and Rule 4.2, and it relies
on Shoney’s Inc., v. Lewis, Ky., 875 S.W.2d 514 (1994) as
controlling precedent.
Humana also contends that the trial court
should have granted its motion to suppress the statements made by
those employees. Id.
The record discloses that Coleman is a nurse who was
employed by Humana between 1988 and 1995.
The contacts made by
her attorneys occurred in the course of her deposition in 1997.
Humana learned the names of those individuals in September 1998 —
after the trial court had granted its motion to compel.
In
total, it appears that Coleman’s counsel had communications with
several then current, and also former, Humana employees on four
separate occasions.
Humana filed a motion to disqualify and to suppress on
February 5, 1999.1
The trial court based its denial of the
motion on a finding that two of the interviewed employees were
not in management when initially contacted and were no longer
employed by Humana when subsequently contacted; and that another
individual was no longer employed by Humana at the time of the
communication.
1
In its petition, Humana indicates that a supporting
memorandum was appended to the motion. However, the memorandum
was not made part of the record that Humana provided to the
Court.
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Coleman’s former counsel, Virginia Morris Anggelis
(Anggelis), spoke to five then current employees in September
1995.
Humana claims that Anggelis had become aware that Humana
was represented by counsel when she received a letter dated July
19, 1995 (in response to a letter that she had sent) from the
President and Chief Executive Officer of the Lexington Hospital —
prepared on the letterhead of Jewish Hospital HealthCare Services
with a notation on its face that it was copied to Lois Hess, its
house counsel.
Humana contends that this letter with copy to
legal counsel served and sufficed to place Anggelis on notice
that Humana was represented by counsel and, therefore, that
contacts with its employees should have been made with its
consent and that of its legal counsel.
Coleman’s current counsel, Albert F. Grasch, Jr., and
Theodore E. Cowen (Grasch and Cowen), spoke to several former
employees between September 1996 and December 1998.
Humana
argues that those contacts violate Rule 4.2 on the premise that
two of those individuals were managers who were directly involved
in Coleman’s termination; others were rank-and-file, who were
interviewed about matters within the scope of their employment
and relating to the subject matter of Coleman’s lawsuit, thereby
placing them off limits for ex parte contacts.
Humana argues that as far as the managers are
concerned, Shoney’s sets forth a sweeping rule that it matters
not whether the individuals were current or former managers at
the time of contact if the contact had to do with the subject of
representation and if the managers had personal knowledge of the
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matter in dispute which could be imputed to the employer.
In
addition, the confidential nature of the information possessed by
such individuals remains confidential — both during and after
employment.2
Humana further contends that as far as non-managerial
employees are concerned, they may not be contacted ex parte if
their acts or omissions may be imputed to the organization or if
their statements may constitute an admission on the part of the
organization.
Humana relies on a Formal Ethics Opinion of the
Kentucky Bar Association, KBA E-382, which analyzed the
application of Rule 4.2 to non-managerial, prohibited employees.
Having considered the parties’ arguments and the appended
record, the Court has determined that this original action does
not merit the relief sought.
SCR 3.130, Rule 4.2 provides:
In representing a client, a lawyer shall not
communicate about the subject of the
representation with a party the lawyer knows
to be represented by another lawyer in the
matter, unless the lawyer has the consent of
the other lawyer or is authorized by law to
do so.
The Commentary to the Rule provides in pertinent part:
[2] In the case of an organization, this
Rule prohibits communications by a lawyer for
one party concerning the matter in
representation with persons having a
managerial responsibility on behalf of the
organization, and with any other person whose
act or omission in connection with that
matter may be imputed to the organization for
purposes of civil or criminal liability or
whose statement may constitute an admission
2
Humana relies on Public Service Electric and Gas Company v.
Associated Electric & Gas Insurance Services, LTD, 745 F.Supp.
1037 (D. N.J. 1990), and attached a copy of the case to its
petition that the Court reviewed.
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on the part of the organization. ...
Applying the Rule and its Commentary to the facts of
this case, we hold that the contacts made by Anggelis with Humana
employees did not violate Rule 4.2 because there is no evidence
that Humana was formally represented by counsel when the
communications took place or that Anggelis knew that Humana was
represented by counsel at that time.
The Court notes that the
letter received on Jewish Hospital HealthCare Services letterhead
did not state (or even imply) that Humana was represented by
counsel in the matter.
In her deposition, the author of the
letter indicated that after receiving Anggelis’s letter, “what
[she] did was consult or notify Lois Hess who is house counsel at
Jewish Hospital Health Care Services, drafted a response to Ms.
Anggelis and sent that back ... .”
The crux of her letter was to
open an avenue of resolution for Coleman’s grievance through the
organization’s Director of Human Resources.
We believe that the
foregoing facts are insufficient to establish Humana’s legal
representation for purposes of activating Rule 4.2 in the context
of Anggelis’s contact of the employees.3
In addition, Coleman attached to her response an
affidavit of Anggelis in which she stated that she did not know
3
In her response, Coleman cites Miano v. AC & R Advertising,
Inc., 148 F.R.D. 68, 80 (S.D.N.Y. 1993), which advances that “the
mere existence of general counsel, without any particular
involvement in the matter in issue, is insufficient to render a
corporation ‘represented.’” According to Miano the “particular
involvement” occurs when the organization “has specifically
referred the matter to house counsel.” Id. See also Jorgensen
v. Taco Bell Corp., 50 Cal. App. 4th 1398, 58 Cal. Rptr. 2d 178
(1996).
-5-
that Humana was represented by counsel at the time of her receipt
of the letter and “did not know Humana Hospital-Lexington was
represented in this matter until March, 1996, after suit had been
filed, when William Rambicure entered his appearance as counsel
for Humana Hospital-Lexington.”
Neither the petition nor the
response indicates that any other lawyer retained by Humana
contacted Coleman’s counsel between the date of the letter (July
19, 1995) and the date of the filing of the complaint (March 6,
1996).
The alleged ex parte communications had taken place in
September 1995.
Coleman relies on K-Mart Corp. v. Helton, Ky., 894
S.W.2d 630 (1995), for the proposition that “[k]nowing that
corporations have in-house attorneys is not enough to provide
such actual knowledge.”
We agree.
In Helton, the Kentucky
Supreme Court opined
that the continued representation of an
individual after the conclusion of a proceeding
is not necessarily presumed and that the passage
of time may be a reasonable ground to believe
that a person is no longer represented by a
particular lawyer. Rule 4.2 is not intended to
prohibit all direct contact in such
circumstances.
Id. at 631.
The plaintiff’s counsel was not contacted by any
attorney on behalf of K-Mart until nearly one year after he had
conducted the interview of the K-Mart employee that precipitated
the controversy.
in Helton.
The “passage of time” was a determining factor
In fact, Comment 4 to Rule 4.2 includes language
nearly identical to that cited above.4
4
We believe that the
Professor William H. Fortune, College of Law, University of
Kentucky, conducted an analysis of Helton and contrasted its
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“passage of time” as set forth in the reasoning of Helton
underscores the fact that Anggelis did not violate Rule 4.2 under
the circumstances of this case.
Humana relies heavily upon KBA E-382 in arguing that
Grasch and Cowen violated Rule 4.2.
Humana is correct in stating
that the Kentucky Supreme Court has often adopted Formal Ethics
Opinions of the Kentucky Bar Association and “has found them
persuasive in resolving interpretative questions regarding the
scope and application of the Rules of Professional Conduct,
including SCR 3.130.”
See, e.g., Shoney’s, supra; American Ins.
Ass’n v. Kentucky Bar Ass’n, Ky., 917 S.W.2d 568 (1996).
However, since KBA E-382 expressly relates to "present employees
who are ‘off limits’," we are of the opinion that it is
inapplicable to the contacts with former employees made by Grasch
and Cowen.
Coleman has cited another Formal Ethics Opinion, KBA E381, which expressly relates to an
“unrepresented former
employee of the organizational party ... .“
import with that of Shoney’s.
(Emphasis added.)
He wrote the following:
Helton significantly limits Shoney’s. A lawyer
investigating a possible claim against a corporation
may assume that the corporation is not represented in
the matter-even though everyone knows that large
corporations have in-house counsel or counsel on
retainer to protect their interests. Proceeding on the
assumption that the corporation is not represented, the
attorney may interview its employees without notice to
the corporation, until the corporation notifies
plaintiff’s counsel that it is represented in the
matter.
86 Kentucky Law Journal 849, 860 (1997-98), The Kentucky Law
Survey, Professional Responsibility, William H. Fortune.
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That Opinion provides that ex parte communications with those
employees is not a violation of Rule 4.2.
The Opinion states in
pertinent part:
We note that a former employee is no longer
subject to the control of the organization
nor in a position to speak for the
organization, and cannot make vicarious
admissions under the state and federal
evidence rules.
KBA E-381 refers to a Formal Opinion of the American Bar
Association, ABA Formal Op. 91-359 (1991).
That Opinion
recognizes that while courts have interpreted Rule 4.2 “in
various ways,”5 it nonetheless concludes that the lawyer
representing a client in a matter adverse to the corporation may
contact the corporation’s former employees “without the consent
of the corporation’s lawyer.”
KBA E-381 also includes a
reference to Nalian Truck Lines, Inc. v. Nakano Warehouse &
Transp. Corp., 6 Cal. App. 4th 1256 (1992), which provides that
ex parte communication with a former member of a corporation’s
“control group” is allowed by that state’s Rules of Professional
Therefore, 6this Court adopts as its own the interpretation of Rule 4.2
Conduct.
5
In that regard, the Court has researched Annotation, 57 ALR
5th 633 “Ex Parte Contact-Former Employees” that was cited in
Coleman’s response.
6
It is important to note, however, though that neither KBA
E-381 nor the other cited authority stands for the proposition
that counsel conducting the ex parte interview may lead the
former employee into violating the attorney/client privilege that
might attach to communications with counsel for organization.
Humana’s motion to disqualify and to suppress did not invoke the
privilege. Humana has claimed that the managers interviewed by
Grasch and Cowen possessed confidential information. KBA E-381
makes it clear that “[i]t is incumbent on the party who knows
that its former employees possess privileged information to
utilize confidentiality agreements and/or seek protective
-8-
embodied by KBA E-381 and concludes that the contacts made by
Grasch and Cowen with Humana’s former employees were not
improper.
While authority is split in the disposition of similar
cases by certain other jurisdictions, we follow the directive of
the Kentucky Supreme Court that the manner in which other
jurisdictions may interpret the Rules of Professional Conduct is
of no binding consequence here and that the interpretation of
those Rules by Kentucky courts shall ultimately turn upon our
analysis of Kentucky law.
American Ins. Ass’n, supra at 571.
As a final note, it is important to stress that KBA E381 maintains the requirement included in Comment 2 to Rule 4.2;
i.e., that a lawyer who seeks to interview a former employee of
an organization must disclose his/her identity and must advise
the individual to be interviewed that he/she represents a party
who has a claim adverse to the organization.
In the case before
us, we do not find that Grasch and Cowen failed to comply with
that requirement.
ALL CONCUR.
ENTERED:
December 10, 1999
/s/
Sara Combs
JUDGE, COURT OF APPEALS
orders.”
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COUNSEL FOR PETITIONER:
COUNSEL FOR REAL PARTY IN
INTEREST:
Jeffrey J. Kuebler
Lexington, Kentucky
Theodore E. Cowen
Lexington, Kentucky
William Rambicure
Lexington, Kentucky
Albert F. Grasch, Jr.
Lexington, Kentucky
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