Centennial Bank v. ServisFirst Bank, Inc.

• Decision Date: 04 March 2020
• Docket Number: Case No: 8:16-cv-88-T-36CPT
• Parties: CENTENNIAL BANK, Plaintiff, v. SERVISFIRST BANK, INC., GREGORY W. BRYANT, GWYNN DAVEY, PATRICK MURRIN, and JONATHAN ZUNZ, Defendants.
• Court: U.S. District Court — Middle District of Florida

CENTENNIAL BANK, Plaintiff, v. SERVISFIRST BANK, INC.,GREGORY W. BRYANT, GWYNN DAVEY,PATRICK MURRIN, and JONATHAN ZUNZ, Defendants.

Case No: 8:16-cv-88-T-36CPT

UNITED STATES DISTRICT COURT MIDDLE DISTRICT OF FLORIDA TAMPA DIVISION

March 4, 2020

ORDER

Before the Court are Plaintiff Centennial Bank's Motion to Determine Scope of Attorney-Client Privilege and Work Product of Sansbury Firm in Light of Operation of the "At Issue" Doctrine (Doc. 464) and Defendant ServisFirst Bank, Inc.'s (ServisFirst) response in opposition (Doc. 478).¹ With the benefit of oral argument and for the reasons discussed below, the Court denies Centennial's motion.

I.

This diversity action stems from Centennial's acquisition of Bay Cities Bank (Bay Cities) in 2015 and the subsequent resignation of four of Centennial's employees—Defendants Gregory Bryant, Patrick Murrin, Gwynn Davey, and Jonathan Zunz—all of whom went to work at ServisFirst (a competitor of Centennial) shortly thereafter. In its operative complaint filed in November 2016, Centennial asserts various state-law claims against the Defendants, including for breach of contract, specific performance, misappropriation of trade secrets, conversion, fraudulent inducement, fraudulent omission, breach of fiduciary duty, and civil conspiracy. (Doc. 199). These claims largely pertain to the individual Defendants' alleged violations of various ethical, confidentiality, and contractual obligations Centennial avers they had with the bank. Id. The contractual obligations include Bryant, Davey, and Murrin's agreements not to compete with Centennial for one year following their departure from the bank, and ServisFirst's alleged tortious interference with those agreements.

ServisFirst answered Centennial's operative complaint in September 2017 and asserted eighteen affirmative defenses. (Doc. 264). Several of those affirmative defenses relate to the employment contracts Centennial had with the individual Defendants, including the non-compete agreements involving Bryant, Davey, and Murrin. Id. at 27-29.

According to the most recent Case Management and Scheduling Order (CMSO), discovery in this case closed on June 7, 2019. (Doc. 365). The Court has since indicated, however, that it intends to issue an amended CMSO (Doc. 639), and recently granted leave to conduct additional, limited discovery (Docs. 639, 655). A motion to reopen discovery to take further depositions also remains pending. (Doc. 599).

In its instant motion, Centennial contends that, as a result of various events in this litigation, ServisFirst has impliedly waived its attorney-client and work-product protections under the "at issue" doctrine regarding communications between ServisFirst and its counsel, Michael Sansbury.² (Doc. 464). Based on this alleged waiver, Centennial requests that the Court order ServisFirst and Sansbury's law firm "to produce all documentation between them relating in any way to Bay Cities and Centennial through the first year of admitted conduct of banking business by" Bryant, Davey, Murrin, and Zunz at ServisFirst. Id. at 14. ServisFirst counters in its response that Centennial's waiver arguments are without merit and that the relief it seeks is unwarranted.³ (Doc. 478).

II.

The attorney-client privilege is "the oldest of the privileges for confidential communications known to the common law." United States v. Zolin, 491 U.S. 554, 562 (1989) (quoting Upjohn Co. v. United States, 449 U.S. 383, 389 (1981)). That longstanding privilege is "[b]ased on the theory that 'sound legal advice or advocacy . . . depends upon the lawyer's being fully informed by the client,' [and] is designed 'to encourage full and frank communication between attorneys and their clients and thereby promote broader public interests in the observance of law and administration of justice.'" Cox v. Adm'r U.S. Steel & Carnegie, 17 F.3d 1386, 1414 (11th Cir. 1994) (quoting Upjohn, 449 U.S. at 389).

In a diversity action such as this one, the attorney-client privilege is governed by state law. Fed. R. Evid. 501 ("[I]n a civil case, state law governs privilege regarding a claim or defense for which state law supplies the rule of decision."); Med. & Chiropractic Clinic, Inc. v. Oppenheim, 2017 WL 8314668, at *2-3 (M.D. Fla. June 13, 2017) (citations omitted). In Florida, the attorney-client privilege is codified in section 90.502 of the Florida Statutes and protects "confidential communications made in the rendition of legal services to the client." S. Bell Tel. & Tel. Co. v. Deason, 632 So. 2d 1377, 1380 (Fla. 1994) (citing Fla. Stat. § 90.502); see also Batchelor v. Geico Cas. Co., 142 F. Supp. 3d 1220, 1242 & n.45 (M.D. Fla. 2015) (same). "A 'communication' between a lawyer and a client is 'confidential' if the communication is not intended to be disclosed to third persons." United Servs. Auto. Ass'n v. Law Offices of Herssein and Herssein, P.A., 233 So. 3d 1224 (Fla. Dist. Ct. App. 2017) (citing Fla. Stat. § 90.502(1)(c)).

Although Florida law recognizes that a client may waive the attorney-client privilege either expressly or by implication, waiver of the attorney-client privilege is disfavored. Fla. Stat. § 90.507; Coates v. Akerman, Senterfitt & Eidson, P.A., 940 So. 2d 504, 508 (Fla. Dist. Ct. App. 2006). Indeed, the confidentiality of attorney-client privileged communications is considered to be "one of the most sacrosanct principles of the law," Reuter v. Physicians Cas. Risk Retention Grp., 2017 WL 395242, at *4 (S.D. Fla. Jan. 27, 2017), and is "traditionally deemed worthy of maximum legal protection," Maharaj v. GEICO Cas. Co., 289 F.R.D. 666, 669 (S.D. Fla. 2013) (quoting State Farm Fla. Ins. Co. v. Puig, 62 So. 3d 23, 27 (Fla. Dist. Ct. App. 2011)).

Florida courts have found an "at-issue" waiver "when a party 'raises a claim that will necessarily require proof by way of a privileged communication.'" Coates, 940 So. 2d at 508 (quoting Jenney v. Airdata Wiman, Inc., 846 So. 2d 664, 668 (Fla. Dist. Ct. App. 2003)); see also Lee v. Progressive Express Ins. Co., 909 So. 2d 475, 477 (Fla. Dist. Ct. App. 2005) ("[I]f proof of the claim would require evidence of the privileged matter, the privileged matter is discoverable.") (emphasis added). Of relevance here, such a situation can occur when a party seeks to invoke an advice of counsel defense. West Bend Mut. Ins. Co. v. Higgins, 9 So. 3d 655, 658 (Fla. Dist. Ct. App. 2009) (observing that the implied waiver doctrine includes instances where a litigant relies on an "advice of counsel" defense).

Florida courts also recognize a "sword and shield" (or "selective disclosure") waiver, which results "[w]hen attorney-client communications are disclosed regarding a certain matter." Coates, 940 So. 2d at 511. Under such circumstances, "a party may not insist upon the protection of the privilege for damaging communications while disclosing other selected communications because they are self-serving." Id. Instead, the party is deemed to impliedly waive the privilege "with respect to communications on that same, specific matter." Id. (citation omitted).

A party, however, "does not waive the attorney-client privilege merely by bringing or defending a lawsuit." Id. at 508 (citing cases). Nor is the attorney-client privilege "set aside simply because the opposing party claims that the information held by the attorney is necessary to prove the opposing party's case." Volpe v. Conroy, Simberg & Ganon, P.A., 720 So. 2d 537, 539-40 (Fla. Dist. Ct. App. 1998); see also Coates, 940 So. 2d at 509 (noting that party does not waive the attorney-client privilege merely because documents protected by the privilege "are relevant to or may assist the [opposing] lawyers in their defense"); Genovese v. Provident Life & Accident Ins. Co., 74 So. 3d 1064, 1068 (Fla. 2011) (observing that, unlike the work-product doctrine, there is no "need" or "undue hardship" exception to attorney-client privilege).

In the end, whether there has been an implied waiver of the attorney-client privilege and, if so, the scope of any such waiver are factual issues for which the party claiming the waiver bears the burden of proof. McPartland v. GEICO Gen. Ins. Co., 2010 WL 11507535, at *6 (M.D. Fla. Mar. 5, 2010) (citing First Union Nat. Bank v. Turney, 824 So. 2d 172, 183 n.9 (Fla. Dist. Ct. App. 2001) ("Just as the proponent of the privilege has the burden of proof as to facts which give rise to the privilege, the party seeking to abrogate the privilege has the burden to prove facts which would make an exception to the privilege applicable.")).

Unlike the attorney-client privilege, the work-product doctrine is governed by federal law. Oppenheim, 2017 WL 8314668, at *2. That doctrine is codified in Federal Rule of Civil Procedure 26(b)(3), which "establishes two tiers of [work-product] protection." Keim v. ADF Midatlantic, LLC, 2019 WL 2298787, at *3 (S.D. Fla. May 30, 2019) (citations omitted). Under the first tier, "work product prepared in anticipation of litigation by an attorney . . . is discoverable only upon a showing of need and hardship." Id. Under the second tier, "'core' or 'opinion' work product that encompasses the 'mental impressions, conclusions, opinion, legal theories of an attorney or other representative of a party concerning the litigation' is 'generally afforded near absolute protection from discovery.'" Id. (citation omitted).

Federal courts have found an implied waiver of the work-product doctrine "when (1) assertion of the protection results from some affirmative act by the party invoking the protection; (2) through this affirmative act, the asserting party puts the protected information at issue by making it relevant to the case; and (3) application of the protection would deny the opposing party access to information vital to its defense." Stern v. O'Quinn, 253 F.R.D. 663, 676 (S.D. Fla. 2008) (citations omitted); see also Oppenheim, 2017 WL 8314668, at *3 ("Federal law recognizes that an at-issue waiver...