Justia.com Opinion Summary: Bromberg Rosenthal filed a complaint against Coralie Kurstin in district court, seeking a judgment for the balance of fees owed by Kurstin under an employment agreement in which Kurstin hired Bromberg to represent her in her divorce. During pretrial skirmishing, Bromberg issued a deposition subpoena to Kurstin's present counsel. Kurstin's counsel filed a motion to quash the subpoena, asserting the attorney-client privilege, and also filed a motion for a protective order. The district court denied both motions and ruled that the attorney-client privilege had been waived. Kurstin appealed. The court of special appeals dismissed the appeal as premature, concluding that collateral order doctrine precluded the appeal. The Court of Appeals affirmed, holding the intermediate appellate court correctly concluded that the circuit court's denial of the motion to quash was not immediately appealable because the issue (1) was inextricably intertwined with the merits of the action, and (2) will be reviewable on appeal from a final judgment.
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HEADNOTE: Kurstin v. Bromberg, No. 49, September Term, 2010
CIVIL PROCEDURE; COLLATERAL ORDER DOCTRINE; APPEALABILITY OF
A PRETRIAL RULING THAT A PARTY HAS WAIVED THE ATTORNEY-CLIENT
PRIVILEGE:
A PRETRIAL ORDER DENYING A MOTION TO QUASH A
DEPOSITION SUBPOENA ISSUED TO A PARTY’S PRESENT COUNSEL IS NOT
IMMEDIATELY APPEALABLE UNDER THE COLLATERAL ORDER DOCTRINE.
IN THE COURT OF APPEALS
OF MARYLAND
No. 49
September Term, 2010
CORALIE KURSTIN
v.
BROMBERG ROSENTHAL, LLP,
et al.
Bell, C.J.
Battaglia
Greene
Murphy
Adkins
Barbera
Eldridge, John C. (Retired,
Specially Assigned),
JJ.
Opinion by Murphy, J.
Filed: July 12, 2011
In Kurstin v. Bromberg, 191 Md. App. 124, 900 A.2d 594 (2010), the Court of
Special Appeals dismissed an appeal from the Circuit Court for Montgomery County that
had been noted by Coralie Kurstin, Petitioner, who then requested that this Court issue a
writ of certiorari to address four questions:
1.
Is the attorney-client privilege a testimonial privilege
only that is not violated unless and until the information
gained is admitted as evidence in a trial such that the
privilege does not protect against preliminary revelation
of information?
2.
Even if not appealable under the Collateral Order
Doctrine, was the case properly appealable as a final
judgment as to the undersigned?
3.
Does Maryland appellate procedure or the Supreme
Court case of Mohawk Industries Inc. v. Carpenter, 130
S.Ct. 599 (2009) act as an absolute bar to appellate
review under the Collateral Order Doctrine of discovery
orders involving the attorney-client privilege?
4.
Do the Maryland discovery rules permit inquiry into
attorney-client protected matters when no claim has been
brought in order to determine if a claim can be brought?
We granted Petitioner’s request. 415 Md. 38, 997 A.2d 789 (2010).
Bromberg Rosenthal, LLP, and a member of that firm, Respondents, argue that the
case at bar presents three questions:
I.
Did the Court of Special Appeals correctly conclude that
the Circuit Court’s denial of a motion to quash and
motion for a protective order in an ongoing case was not
immediately appealable?
II.
Was it within the Circuit Court’s discretion to deny
Petitioner’s motion to quash and motion for a protective
order?
Did the Circuit Court correctly conclude that by filing a
III.
legal malpractice claim against Respondents, Petitioner
had implicitly waived her attorney client privilege with
successor counsel?
For the reasons that follow, we answer “yes” to Respondents’ first question, and
shall therefore affirm the judgment of the Court of Special Appeals.
Background
In the District Court of Maryland for Montgomery County, Respondent Bromberg
Rosenthal filed a Complaint against Petitioner, seeking a judgment for the balance of fees
owed by Petitioner under “a contract (Employment Agreement) in which [Petitioner]
hired [Respondent] to represent her in matters relating to and arising out of her divorce.”
Petitioner filed a JURY DEMAND and, after the District Court transmitted the record to
the Circuit Court for Montgomery County, Petitioner filed an ANSWER, COUNTER
CLAIM AND JOINED PARTY COMPLAINT that included the following assertions:
3.
[Respondents] negotiated on behalf of [Petitioner] an
agreement for the children as third-party beneficiaries
memorialized in open court which agreement stated:
Dr. Kurstin is going to continue to
maintain his current life insurance policy
of 1.5 million dollars for the benefit of
the parties’ children, and this beneficiary
designation will be irrevokable [sic].
***
4.
[Petitioner] gave substantial consideration to acquire
this policy for the benefit of her children.
5.
[Respondents] failed to complete their obligation as
counsel to effectuate the agreement by notifying the
2
insurance carrier of the irrevocable designation of
beneficiary.
6.
Ronald Kurstin subsequently modified the designation
of beneficiary naming his girlfriend. If [Respondents]
had discharged their duty as counsel, the modification
in beneficiary could not have been made.
7.
Suite was instituted to enjoin distribution and reform
the insurance contract. The suit was settled with
Ronald Kurstin receiving $250,000.00. This sum was
lost to [Petitioner] through the failure by [Respondents]
to discharge their duty as counsel.
8.
The failure to discharge their duty was not only a
breach of contract but an act of negligence.
9.
The actions by [Respondents] was the proximate cause
of the loss of $250,000.00.
***
WHEREFORE, [Petitioner] prays damages of
$500,000.00, prejudgment interest on the liquidated amount
of $250,000.00 costs and attorney’s fees.
During pretrial skirmishing, Respondents issued a subpoena duces tecum to
Petitioner’s present counsel, who filed a MOTION TO QUASH NOTICE OF
DEPOSITION AND FOR PROTECTIVE ORDER that included the following assertions:
1.
There is no justification in law permitting inquiry into
the matters covered by the attorney-client privilege,
work product privilege or mental impressions of
counsel.
2.
There has been no waiver of the attorney-client
privilege in the separate case in which undersigned
counsel represented Coralie Kurstin as a result of the
action for malpractice arising from the prior domestic
3
case in which undersigned counsel was not involved.
The motion was accompanied by a MEMORANDUM that provided the following
procedural history:
The First Case - This was a domestic proceeding, Family
law 17598, resulting in a judgment of absolute divorce on
December 31, 2002 between Coralie Kurstin and Ronald Kurstin
(now deceased). In that case, a settlement agreement was
entered into in open court. The settlement agreement included,
inter alia:
Dr. Kurstin is going to continue to
maintain his current life insurance policy
of 1.5 million dollars for the benefit of the
parties’ children, and this beneficiary
designation will be irrevokable [sic].
This settlement agreement was incorporated and not merged into
the decree. The case was completed but matter lay quiescent
except for occasional modifications of alimony not here
relevant. Undersigned counsel was not involved in this case and
was, not at that time, even familiar with the parties.
The Second Case - This case arose where Ronald Kurstin
was terminally ill with Stage 4 lung cancer. Death was
imminent. Coralie Kurstin and the children learned that
contrary to the settlement agreement, Ronald Kurstin had
designated his girlfriend [] as beneficiary on the policy.
Coralie Kurstin came to undersigned counsel when the
designation of [the girlfriend] became known. Undersigned
counsel then filed case number 272038 in this Court on June 2,
2006 originally denominated as Coralie Kurstin and Randy A.
Kurstin (one of the children) v. Ronald Kurstin, USAA Life (the
issuer of the 1.5 million dollar policy) and [the girlfriend]. The
Plaintiff parties were subsequently amended to include all four
children. During this process, Coralie Kurstin learned that her
counsel, [Respondents], had never notified USAA Life of the
settlement agreement and its relationship to the designation of
4
its beneficiaries.
***
The Third Case - [Respondents] then decided to sue for
$25,000.00 in District Court for fees they alleged were owed to
them by Coralie Kurstin.
The District Court case was removed to Circuit Court by
jury demand and a counterclaim alleging malpractice was added.
In defending the malpractice action, [Respondent
Bromberg Rosenthal] seeks the deposition duces tecum of the
undersigned counsel with the expressed intent of possibly suing
the undersigned counsel for contribution and indemnification
intending to allege negligence in advance as to risk assessment
given to Coralie Kurstin and the children upon which they based
their determination to settle the Second Case recited above.
For the reasons presented below, their position as to a
waiver of attorney-client privilege by Coralie Kurstin permitting
inquiry of undersigned counsel is not well taken.
(Footnote omitted).
Respondents filed an OPPOSITION TO MOTION TO QUASH that included the
following assertions:
7. [Respondents] were not involved in that litigation
and desire to question [Petitioner’s present counsel] as to (a)
his representation of [Petitioner] in the litigation of Mr.
Kurstin , (b) what recommendation, if any, he made with
respect to the settlement of the litigation against Mr. Kurstin
and (c) any communication that he had with the [Petitioner]
regarding the decision to settle the action. [Respondents]
contend that the [Petitioner] has waived the attorney client
privilege with respect to those matters by filing this lawsuit
and thereby putting those matters at issue, since the requested
information is relevant to the claims and defenses being
pursued herein.
5
***
9. [Respondents] request that this court make a
determination that the attorney client privilege between the
[Petitioner] and [Petitioner’s present counsel] has been
waived with respect to the matters set forth above and as
result, deny [Petitioner’s present counsel’s] Motion to Quash
Notice of Deposition for Protective Order.
***
As the information being sought by [Respondents] is
limited and is clearly important to [Respondents’] defense in
this matter, the Court should determine that the [Petitioner],
by filing her Counterclaim and Joined Party Complaint
against [Respondents], has implicitly waived her attorneyclient privilege with [Petitioner’s present counsel]. If the
court rules otherwise, it will permit the [Petitioner] to shield
potentially relevant information necessary to [Respondents’]
defense in this case while simultaneously maintaining a claim
against [Respondents] for legal malpractice. As the Court of
Appeals set forth in Parler & Wobber v. Miles &
Stockbridge[, 359 Md. 671, 756 A.2d 526 (2000)], Maryland
law does not countenance such a result.
(Footnotes omitted).
The Circuit Court entered the following ORDER:
Upon consideration of the Motion to Quash Notice of
Deposition and for Protective Order filed by [Petitioner’s
present counsel], and the opposition thereto & Defendant’s
reply[,] it is this 8th day of January, 2009, by the Circuit Court
for Montgomery County, hereby
ORDERED, that the Motion to Quash Notice of
Deposition and for Protective Order filed by [Petitioner’s
present counsel] is hereby DENIED; and it is further
ORDERED, that the attorney-client privilege between
the [Petitioner] and [Petitioner’s present counsel] has been
6
waived.
(Strikeout in original).
Petitioner noted an appeal to the Court of Special Appeals from the January 8,
2009 Order, and the Court of Special Appeals dismissed that appeal as premature in a
reported opinion that included a discussion of cases in which this Court has (1)
announced the rule that interlocutory discovery orders do not satisfy the requirements of
the collateral order doctrine,1 and (2) recognized the rare exceptions to that rule.2 191
Md. App. at 153-54, 990 A.2d at 610-11. The opinion of the Court of Special Appeals
concluded as follows:
Whether the ruling in this case is measured on an ad hoc
basis against the four conjunctive criteria of the collateral order
doctrine or is treated categorically as within the class of
discovery rulings adverse to the attorney-client privilege, either
of which approaches alone would be fatal to the appellant's
immediate cause, it fails to qualify for immediate appealability
under the collateral order doctrine. By way of the case-by-case
long way around or by way of the categorical short cut, this
appeal is off the tracks.
Id. at 158, 990 A.2d at 614.
Discussion
Included in this category are St. Mary’s County v. Lacer, 393 Md. 415, 428-31,
903 A.2d 378, 386-87 (2006), and In re Foley, 373 Md. 627, 636, 820 A.2d 587, 592-93
(2003).
1
Included in this category are Ehrlich v. Grove, 396 Md. 550, 572, 914 A.2d 783,
797 (2007), St. Joseph Medical Center v. Cardiac Surgery Associates, 392 Md. 75, 87,
896 A.2d 304, 311 (2006), and Montgomery County v. Stevens, 337 Md. 471, 479-80, 654
A.2d 877, 880-81 (1995).
2
7
In Nnoli v. Nnoli, 389 Md. 315, 884 A.2d 1215 (2005), this Court stated:
The collateral order doctrine treats as final and appealable
interlocutory orders that (1) conclusively determine the disputed
question; (2) resolve an important issue; (3) resolve an issue that
is completely separate from the merits of the action; and (4)
would be effectively unreviewable on appeal from a final
judgment. Dawkins v. Baltimore Police, 376 Md. 53, 58, 827
A.2d 115, 118 (2003). The collateral order doctrine is a very
narrow exception to the final judgment rule, and each of its four
requirements is very strictly applied in Maryland. Id. at 58-59,
827 A.2d at 11 8. In particular,
the fourth prong,
unreviewability on appeal, “is not satisfied except in
‘extraordinary situations.’” Shoemaker v. Smith, 353 Md. 143,
170, 725 A.2d 549, 563 (1999) (quoting Bunting v . State, 312
Md. 472, 482, 540 A.2d 805, 809 (1988) (per curiam)).
Id. at 329, 884 A.2d at 1223.
Although the appeal to the Court of Special Appeals was noted by Petitioner,
rather than by her present counsel, her present counsel now argues that he has standing to
obtain appellate review of a discovery order that requires him to reveal allegedly
privileged information.3 We do not agree with that argument. While an attorney can
assert the attorney-client privilege on behalf of his or her client, it is the client who is the
holder of the privilege. If the client has no right to immediate appellate review of a
pretrial determination that the client has waived the privilege, it would exalt form over
substance to hold that the client’s attorney has such a right.
The Court of Special Appeals noted that the case of Mohawk Industries, Inc. v.
Petitioner’s brief in this Court asserted that the case at bar presents six questions
for our review, one of which is: “1. Did appellate jurisdiction vest as an appeal from a
final order as to [Petitioner’s present counsel]?”
3
8
Carpenter, 568 U.S.
App. at 155, 990 A.2d at
, 130 S.Ct. 599 (2009) was “most directly on point[.]” 191 Md.
. In Harris v. State,
(No. 79, September Term, 2010, filed
Md.
,
A.3d
(2011)
, 2011), this Court stated:
... Mohawk Industries is instructive, if not binding, because it ...
addresses appellate jurisdiction over final decisions arising from
28 U.S.C. § 1291, which is read in pari materia with § 12-301 of
the Courts and Judicial Proceedings Article. Sigma, 297 Md. at
664, 467 A.2d at 485 (citing Stewart v. State, 282 Md. 557, 571,
386 A.2d 1206 (1978) (stating “there [is] no substantive
difference between 28 U.S.C. § 1291 and the Maryland
statute.”).
Md. at
n. 22,
A.3d at
n. 22 (slip op. at p. 23).
The opinion of the Court of Special Appeals includes the following analysis:
On December 8, 2009, [the United States Supreme Court]
rendered its decision in the case of Mohawk Industries, Inc. v.
Carpenter, 558 U.S. ____, 130 S. Ct. 599, 175 L. Ed. 2d 458.
Mohawk Industries was being sued in a pending class action for
conspiring to drive down its employees' wages by hiring
undocumented immigrants. Carpenter, a shift supervisor for
Mohawk, was unaware of the class action suit when he informed
Mohawk's human resources department that the company was,
indeed, employing undocumented immigrants. Mohawk officials
directed Carpenter to meet with the counsel who were defending
the company in the class action suit. Counsel pressured
Carpenter to get him to recant his statement about the company's
use of undocumented immigrants. When Carpenter refused to do
so, Mohawk fired him for what, he claimed, were false and
spurious reasons. In his case against Mohawk for illegal
termination of employment, Carpenter moved to compel
Mohawk to produce information about his conversations with
the attorneys representing Mohawk in the class action suit.
Mohawk refused to do so, invoking the attorney-client privilege.
The District Court granted Carpenter's motion to compel
discovery, ruling that the attorney-client privilege had been
9
waived. Mohawk appealed. The Court of Appeals for the
Eleventh Circuit dismissed Mohawk's appeal, holding that it did
not qualify as an appealable order under the collateral order
doctrine. [Carpenter v. Mohawk Industries, Inc., 541 F.3d 1048,
1053 (11th Cir. 2008)]. The Supreme Court granted certiorari.
At the outset of her opinion for the Court, Justice
Sotomayor described the issue as one involving a "disclosure
order adverse to the attorney-client privilege."
The question before us is whether
disclosure orders adverse to the attorney-client
privilege qualify for immediate appeal under the
collateral order doctrine. Agreeing with the
Court of Appeals, we hold that they do not.
Postjudgment appeals, together with other review
mechanisms, suffice to protect the rights of
litigants and preserve the vitality of the attorneyclient privilege.
558 U.S. at
supplied).
, 130 S.Ct. at 603, 175 L. Ed. 2d at 464 (emphasis
***
While acknowledging the importance of the attorneyclient privilege, the Supreme Court nonetheless maintained:
The crucial question, however, is not
whether an interest is important in the abstract; it
is whether deferring review until final judgment
so imperils the interest as to justify the cost of
allowing immediate appeal of the entire class of
relevant orders. We routinely require litigants to
wait until after final judgment to vindicate
valuable rights, including rights central to our
adversarial system.
***
In our estimation, postjudgment appeals
10
generally suffice to protect the rights of litigants
and assure the vitality of the attorney-client
privilege. Appellate courts can remedy the
improper disclosure of privileged material in the
same way they remedy a host of other erroneous
evidentiary rulings: by vacating an adverse
judgment and remanding for a new trial in which
the protected material and its fruits are excluded
from evidence.
558 U.S. at
, 130 S.Ct. at 606-07, 175 L. Ed. 2d at 467-468
(emphasis supplied). It is clear that the breach of the testimonial
privilege occurs not when the information is revealed but when
it is used, directly or derivatively, at trial.
***
That a fraction of orders adverse to the attorneyclient privilege may nevertheless harm individual
litigants in ways that are "only imperfectly
reparable" does not justify making all such orders
immediately appealable as of right under § 1291.
***
In sum, we conclude that the collateral order
doctrine does not extend to disclosure orders
adverse to the attorney-client privilege. Effective
appellate review can be had by other means.
558 U.S. at
, 130 S. Ct. at 609, 175 L. Ed. 2d at 471
(emphasis supplied).
Maryland's approach to the non-appealability of a
discovery ruling compelling the disclosure of information
presumably protected by the attorney-client privilege has been
as generic and categorical as has been that of the Supreme
Court. In Electronic Data Systems Federal Corporation v.
Westmoreland Associates, Inc., 311 Md. 555, 556, 536 A.2d 662
(1988), the review of the Court of Appeals was limited to the
single
11
jurisdictional issue of whether the interlocutory
orders of the trial court, which compelled the
production of documents alleged to be privileged
under the attorney client relationship, were
properly appealable under the collateral order
doctrine.
Without any necessity of probing further into the
particular circumstances of the discovery ruling in issue or into
the details of the underlying case, the Court broadly
concluded that the collateral order doctrine is not
applicable in this case as the orders of the trial
court are subject to effective review on appeal
from a final judgment.
Id. (emphasis supplied).
Id. at 155-58, 900 A.2d at 612-14. We agree with and adopt the above quoted analysis,
which is entirely consistent with Harris, supra, in which this Court stated:
In Maryland, discovery orders “being interlocutory in
nature, are not ordinarily appealable prior to a final judgment
terminating the case in the trial court.” In re Foley, 373 Md.
627, 634, 820 A.2d 587, 592 (2003) (reversing the Court of
Special Appeals’s holding that a discovery order for a medical
examination of the subject of a guardianship proceeding met the
four requirements of the collateral order doctrine because the
order did not satisfy the third and fourth requirements).
Moreover, “[i]t is well established in Maryland that generally
‘interlocutory discovery orders do not meet the requirements of
the collateral order doctrine and are not appealable under that
doctrine.’” Falik, 413 Md. at 177, 991 A.2d at 1243 (quoting St.
Joseph, 392 Md. at 87, 896 A.2d at 311).
***
Discovery orders
do not comply with the third requirement of the
12
collateral order doctrine, as they generally are not
completely separate from the merits of the
lawsuit. Instead, a typical discovery order is
aimed at ascertaining critical facts upon which the
outcome of the … controversy might depend. In
addition, discovery orders fail to meet the
collateral order doctrine’s fourth element, as they
are effectively reviewable on appeal from a final
judgment.
Falik, 413 Md. at 177, 991 A.2d at 1243 (quoting St. Joseph,
392 Md. at 87, 896 A.2d at 311). In St. Joseph’s, we noted:
The “singular situation,” [In re Foley,
supra, 373 Md. at 636, 820 A.2d at 593] in which
this Court has held that interlocutory discovery
orders are appealable under the collateral order
doctrine, involves trial court orders permitting the
depositions of high level governmental decision
makers for the purpose of “extensively probing …
their individual decisional thought processes.”
Montgomery Co. v. Stevens, supra, 337 Md. at
479, 654 A.2d at 881, quoting Public Service
Comm’n v. Patuxent Valley, [300 Md. 200, 207,
447 A.2d 759, 763 (1984)].
St. Joseph’s, 392 Md. at 88, 896 A.2d at 311(footnote omitted).
***
Generally, most discovery orders are not separate from
the merits of an action. See e.g., Hudson v. Housing Authority,
402 Md. 18, 26, 935 A.2d 395, 399-400 (2007) (determining
that interrogatories inquiring into the underlying facts of the
Housing Authority’s claim against a tenant and his breach of a
residential lease were critical to an ultimate determination of
that breach) and cases cited therein. For example, in In re
Foley, 373 Md. at 635, 820 A.2d at 592, we held that an order
for a medical examination of the subject of guardianship
proceedings “was obviously not completely separate form the
13
merits of the controversy. On the contrary, it was a typical
discovery order aimed at ascertaining critical facts upon which
the outcome of the guardianship controversy might depend.”
Moreover, in Sigma [Reproductive Health Center v. State, 297
Md. 660, 467 A.2d 483 (1983)], this Court held that “the denial
of the motion to quash [a subpoena duces tecum] is not
appealable” because “the order to produce documents … is not
completely separate from the merits of the criminal
proceedings.” Sigma, 297 Md. at 670, 467 A.2d at 488.
***
Generally, “discovery orders fail to meet the collateral
order doctrine’s fourth element, as they are effectively
reviewable on appeal from a final judgment” and “[a] party
aggrieved by a discovery order and aggrieved by the final
judgment may challenge the discovery ruling on appeal from the
final judgment.” St. Joseph’s, 392 Md. at 87, 896 A.2d at 311
(citing Foley, 373 Md. at 635, 820 A.2d at 587[.]
***
The United States Supreme Court, when considering the
“importance” of the attorney-client privilege, declined to hold
that orders adverse to the privilege were immediately appealable
under the collateral order doctrine stating “we routinely require
litigants to wait until after final judgment to vindicate valuable
rights, including rights central to our adversarial system.”
Mohawk Industries, 558 U.S. at __, 130 S.Ct. at 606, 175 L. Ed.
2d at 467.
Harris v. State,
, 2011), Id. at
Md.
,
,
A.3d
A.3d at
(2011) (No. 79, September Term, 2010, filed
, (slip opinion, pp
-
).
A review of the above quoted portions of the papers filed by the parties in the
Circuit Court compels the conclusion that the discovery order from which Petitioner
noted an appeal has decided an issue that (1) is inextricably intertwined with the merits of
14
the action, and (2) will be reviewable on appeal from a final judgment. We therefore hold
that the Court of Special Appeals correctly dismissed Petitioner’s appeal, and affirm the
judgment of that Court.
JUDGMENT OF THE COURT OF SPECIAL
APPEALS AFFIRMED; PETITIONER TO
PAY THE COSTS.
15
]]>
