Coyote Springs Inv., LLC v. Eighth Judicial Dist. Court of State

• Decision Date: 02 April 2015
• Docket Number: No. 64623.,64623.
• Citation: 347 P.3d 267,131 Nev. Adv. Op. 18
• Parties: COYOTE SPRINGS INVESTMENT, LLC, Petitioner, v. The EIGHTH JUDICIAL DISTRICT COURT OF the STATE of Nevada, in and for the COUNTY OF CLARK; and the Honorable Elizabeth Goff Gonzalez, District Judge, Respondents, and BrightSource Energy, Inc., Real Party in Interest.
• Court: Nevada Supreme Court

347 P.3d 267

131 Nev. Adv. Op. 18

COYOTE SPRINGS INVESTMENT, LLC, Petitioner

v. The EIGHTH JUDICIAL DISTRICT COURT OF the STATE of Nevada, in and for the COUNTY OF CLARK; and the Honorable Elizabeth Goff Gonzalez, District Judge, RespondentsandBrightSource Energy, Inc., Real Party in Interest.

No. 64623.

Supreme Court of Nevada.

April 2, 2015.

Pisanelli Bice, PLLC, and Todd L. Bice, James J. Pisanelli, Debra L. Spinelli, Maria Magali Calderon, and Jordan T. Smith, Las Vegas, for Petitioner.

Kaempfer Crowell and Peter C. Bernhard and Lisa J. Zastrow, Las Vegas, for Real Party in Interest.

BEFORE HARDESTY, C.J., DOUGLAS and CHERRY, JJ.

OPINION

By the Court, CHERRY, J.:

This petition for extraordinary writ relief challenges a district court order requiring a witness for the plaintiff to disclose the substance of communications that took place between the witness and plaintiffs counsel during a break in the witness's deposition. To resolve it, we must decide whether a private communication between a witness and an attorney during a requested break in the witness's deposition is entitled to protection from discovery under the attorney-client privilege.

We hold that attorneys may confer with witnesses during requested recesses in depositions only to determine whether to assert a privilege. For the attorney-client privilege to apply to these conferences, however, counsel must state on the deposition record (1) the fact that a conference took place, (2) the subject of the conference, and (3) the result of the conference. In the instant case, we conclude that the communications between the witness and plaintiffs counsel during the break in the witness's deposition are discoverable because plaintiffs counsel requested the recess in the deposition and failed to make a sufficient, contemporaneous record of the privileged communications.

FACTS AND PROCEDURAL HISTORY

Petitioner Coyote Springs Investment, LLC, and real party in interest BrightSource Energy, Inc., entered into a lease for BrightSource to develop a solar energy generating facility on Coyote Springs' property. The parties negotiated the terms of the lease through several term sheets exchanged via email. The parties then finalized and executed the lease, and Coyote Springs created a lease summary for its bankers and appraisers. Roughly one year later, BrightSource sought to terminate the lease. In response, Coyote Springs informed BrightSource that the termination was ineffective in the absence of a lease termination fee. A dispute arose regarding the termination terms and whether just one or both of two conditions (the so-called tower height approval and transmission solution achievement conditions) had to be met before a termination fee could be imposed because the term sheets and the lease summary apparently contained language different from the actual lease as to those conditions. Subsequently, Coyote Springs sued BrightSource, arguing that the lease's termination was ineffective without payment of the termination fee.

The deposition discussions at issue

In preparation for trial, the parties deposed Harvey Whittemore, the former co-owner and manager of Coyote Springs.

Whittemore testified that he and Coyote Springs' general counsel, Emilia Cargill, negotiated the lease for Coyote Springs. Whittemore was questioned regarding the lease's termination provisions. Specifically, BrightSource's counsel asked Whittemore whether he had agreed to the termination provisions in the lease. Whittemore answered, “I believe that [the provision] appropriately reflects the definitions” of the lease to which the parties agreed. When asked again about the lease's termination conditions, Whittemore stated that they were the business terms agreed upon by both parties.

Whittemore's deposition was continued and resumed nearly six months later, and BrightSource's counsel further questioned Whittemore about his approval of the term sheets and the lease summary. Whittemore testified that he believed that the term sheets were an accurate statement of terms agreed upon before the lease agreement was finalized. And when BrightSource's counsel questioned Whittemore about the lease summary distributed to Coyote Springs' bankers and appraisers, Whittemore testified that he believed he had reviewed earlier versions of the summary for accuracy and approved sending the final draft of the summary.

After BrightSource's counsel completed this round of questioning, Coyote Springs' litigation counsel suggested taking a break and requested a conference room for him, Whittemore, and Cargill. BrightSource's counsel objected to any discussion during the break regarding questions that Whittemore had been asked. Coyote Springs' litigation counsel and Cargill then met with Whittemore in a conference room. After returning from the conference, Coyote Springs' counsel resumed questioning Whittemore. During that questioning, Whittemore clarified that he believed the term sheets were not controlling. Upon further questioning, Whittemore explained his understanding of the lease was that once one of the conditions—tower height approval—was met, the company had earned the termination fee. When Coyote Springs' counsel asked whether he had previously noticed that the lease summary was inaccurate, Whittemore agreed that the lease summary was inaccurate but did not recall whether he had noticed it before.

After Coyote Springs' counsel completed his examination of Whittemore, BrightSource's counsel posed several follow-up questions. Although Whittemore could not indicate specific details or cite to any evidence in support of his statement, he emphasized that, prior to the lease's finalization, the parties agreed that the termination fee would be owed solely upon tower height approval and that a transmission solution would not be required for the termination fee to be due.

BrightSource moves to exclude Whittemore's testimony

Following Whittemore's depositions, BrightSource filed a motion in limine to exclude Whittemore's post-conference testimony and to “elicit at trial the substance of what was said during the private conference.” At a hearing on the motion, the district court concluded that “in general ... you can't do your witness prep during breaks” and explained that “if [Whittemore] talk[ed] about it at a deposition break and it wasn't part of his preparation that was done ahead of time, it may be fair game” for inquiry. After Coyote Springs' counsel questioned whether this would apply to privileged discussion that occurred during the deposition break, the district court exclaimed, “Why on earth would you do that?” The court explained to counsel that “[y]ou are entitled to go inside that privilege[,] [b]ut you're not entitled to do prep as part of a break in a deposition.” Nevertheless, the court then indicated that it was “not sure that that particular instance is one where I wouldn't then give you some leeway and give you some protection.”

The trial commenced, and during cross-examination of Whittemore, BrightSource's counsel inquired as to what was discussed at the deposition conference. Coyote Springs' counsel objected based on attorney-client privilege. Although noting that the conference may have addressed privileged information, the court overruled the objection, “given the timing of the communication between counsel and the witness,” and allowed the questioning to continue. Coyote Springs' counsel asked to voir dire Whittemore to establish compliance with In re Stratosphere Corp. Securities Litigation, 182 F.R.D. 614 (D.Nev.1998), a case in which a federal district court addressed the propriety of an in-deposition conference, which the court permitted. Whittemore first confirmed that there was no question pending when he had the private conference during his deposition. Coyote Springs' counsel then asked Whittemore about the substance of the conference, and Whittemore testified that communications he had with Cargill while he was in a leadership role at Coyote Springs were “part of [the] discussion,” that whether he misunderstood or misinterpreted either questions or documents presented to him during his examination was “also part of [the] conversation,” and that he “[did not] think [they] talked about manners or methods of refreshing [his] recollection at all.”

At the close of BrightSource's case, Coyote Springs made an oral motion for reconsideration of the Whittemore deposition issue. The district court denied the oral motion at the time, but the judge stated that she would reconsider after hearing closing arguments. After Coyote Springs' oral motion to reconsider, the district court entered an interim order concerning whether Coyote Springs' contract claims were barred by the doctrine of unilateral or mutual mistake. The court, however, also determined that Whittemore's anticipated testimony about the conference discussion was material to the issue of mistake, and thus stayed the entry of its findings of fact and conclusions of law pending resolution of the instant petition.

DISCUSSION

“[P]rohibition is a more appropriate remedy for the prevention of improper discovery than mandamus.” Wardleigh v. Second Judicial Dist. Court, 111 Nev. 345, 350, 891 P.2d 1180, 1183 (1995). Consequently, we consider this petition under the prohibition standard and deny Coyote Springs' alternative request for a writ of mandamus. Although “writs are generally not available to review discovery orders,” this court has issued writs to prevent improper discovery orders compelling disclosure of privileged information. Valley Health Sys., LLC v. Eighth Judicial Dist. Court, –––Nev. ––––, ––––, 252 P.3d 676, 678–79 (2011). The reasoning behind the privilege exception is that “if the discovery order requires the disclosure of privileged material, there would be no adequate remedy at law that could restore the privileged nature of the information, because once such information is disclosed, it is irretrievable.” Id. at ––––, 252 P.3d at 679 ; see...