Cw v. Hbk

• Citation: 930 A.2d 573
• Decision Date: 23 July 2007
• Docket Number: No. 1323 WDA 2006.,1323 WDA 2006.
• Parties: CARBIS WALKER, LLP, Appellee v. HILL, BARTH AND KING, LLC, Appellant.
• Court: Superior Court of Pennsylvania

930 A.2d 573

CARBIS WALKER, LLP, Appellee v. HILL, BARTH AND KING, LLC, Appellant.

No. 1323 WDA 2006.

Superior Court of Pennsylvania.

Argued April 11, 2007.

Filed July 23, 2007.

Richard G. Witkowski, Cleveland, OH, for appellant.

Alan T. Silko, Pittsburgh, for appellee.

BEFORE: ORIE MELVIN, BOWES and TAMILIA, JJ.

OPINION BY ORIE MELVIN, J.:

¶ 1 Appellant, Hill, Barth and King, LLC (hereafter HBK), appeals from the trial court's June 21, 2006 order which granted a motion for protective order filed by Appellee, Carbis Walker, LLP (hereafter CW). HBK asserts that the document which the trial court ruled was discoverable by CW is protected by the attorney-client privilege. After careful review, we affirm.

¶ 2 The facts which are necessary to understand the issues on appeal are essentially not in dispute and may be summarized as follows. CW and HBK are competing accounting/consulting firms with offices in various locations including Meadville, Pennsylvania. CW is a Pennsylvania partnership while HBK is an Ohio corporation. Amended Complaint at ¶¶ 1, 2 (Certified Record (C.R.) at 31); Answer of HBK to Amended Complaint at ¶¶ 1, 2 (C.R. at 39). CW initiated this action in September 2005 against HBK and one of its employees, Donald Young (Young),¹ raising claims of breach of contract, interference with contractual relations, misappropriation of confidential information or trade secrets, and unfair competition. The complaint alleged that Young had been employed by CW between 1994 and 2004 pursuant to an Employment Agreement which contained, inter alia, a restrictive covenant and a liquidated damages provision for breach thereof. Amended Complaint at ¶¶ 11, 12, 14 (C.R. at 31). The complaint also asserted that Young left CW's employ in 2004 and was hired by HBK and that several CW clients transferred their accounts to HBK which accepted their business. Id. at ¶¶ 16-19. CW further alleged that Young used his knowledge of confidential information of CW including client identities and its "strategies, processes, and procedures." Id. at ¶ 22.

¶ 3 CW thereafter filed a motion for a protective order in which it alleged that on October 18, 2005, counsel for CW received a letter via facsimile transmission from the Cleveland, Ohio office of counsel for HBK. C.R. at 7, ¶ 11. The letter was addressed to a principal at HBK and was marked "Confidential: Attorney-Client Privilege." Id. at ¶ 11 and Exhibit 2. On October 20, 2005, counsel for CW informed counsel for HBK that he believed he had inadvertently received the letter and asked "how [he] should handle the correspondence" while also noting concerns with its contents. Id. at ¶¶ 12-13 and Exhibit 1.² On November 7, 2005, counsel for HBK requested that CW return the letter. Id. at ¶ 14 and Exhibit 2. The matter was presented to the trial court to determine whether the attorney-client privilege operated to prevent discovery of the letter. On June 21, 2006, after oral argument and the submission of briefs by the parties, the trial court granted CW's motion and ruled that the October 18, 2005 letter was discoverable.³ This timely appeal followed, wherein HBK raises two issues for our review:

I. Whether the trial court erred by failing to apply Ohio law to a privileged communication transmitted by an Ohio attorney to his Ohio client, and the inadvertent disclosure occurred in Ohio.

II. Whether the trial court erred by holding that an inadvertently disclosed communication, that was returned by opposing counsel and was clearly marked "Confidential: Attorney-client Privil[e]ge[,]" was discoverable.

Appellant's brief at 4.⁴

¶ 4 At the outset, we must determine whether this appeal is properly before us. "An appeal may be taken only from a final order unless otherwise permitted by statute or rule." Ben v. Schwartz, 556 Pa. 475, 481, 729 A.2d 547, 550 (1999). Collateral orders are one exception to this general rule. Pa.R.A.P. 313(a).

The collateral order doctrine allows for immediate appeal of an order which: (1) is separable from and collateral to the main cause of action; (2) concerns a right too important to be denied review; and (3) presents a claim that will be irreparably lost if review is postponed until final judgment in the case.

Vaccone v. Syken, 587 Pa. 380, 384, 899 A.2d 1103, 1106 (2006). "A discovery order is collateral only when it is separate and distinct from the underlying cause of action." Feldman v. Ide, 915 A.2d 1208, 1211 (Pa.Super.2007). This Court has previously considered the merits of an appeal from a discovery order requiring the production of documents where there is a "colorable claim of attorney-client [] privilege [which] made appellate review proper" at this stage of the proceedings. Gocial v. Independence Blue Cross, 827 A.2d 1216, 1220 (Pa.Super.2003).

¶ 5 Here, as we did in Gocial, we conclude that the order in question is separable from the main cause of action, that the right involved is too important to be denied review at this time, and that the claimed right will be irreparably lost if immediate review is denied. Accordingly, we find the order in question meets the requisites of the collateral order doctrine and is properly presented for review at this juncture.

¶ 6 HBK first claims that the trial court erred in failing to conduct a choice of law analysis. The record reflects that counsel for HBK and CW made specific argument to the trial court on whether Pennsylvania or Ohio law governed application of the claimed attorney-client privilege. However, the trial court's June 21, 2006 order did not address the choice of law issue. In its Rule 1925(a) opinion, the trial court merely stated that it had jurisdiction over the disputed letter since it was transmitted into the Commonwealth of Pennsylvania. Trial Court Opinion, 10/4/06, at 4. It therefore applied Pennsylvania law relating to the privilege and its waiver, concluding that HBK waived the attorney-client privilege, and, thus, the letter was discoverable. Id. at 4-9.

¶ 7 We must agree with HBK that the trial court erred in failing to analyze the choice of law question. Our Supreme Court has explained in the criminal context that, "[i]n Pennsylvania, we do not apply our law just because we have jurisdiction." Commonwealth v. Eichinger, 591 Pa. 1, 19, 915 A.2d 1122, 1133 (2007)(citing Griffith v. United Air Lines, 416 Pa. 1, 203 A.2d 796 (1964)). In Griffith, the Court reasoned that where more than one jurisdiction has an interest in the "legal issues arising out of a particular factual context," a court should "apply the policy of the jurisdiction most intimately concerned with the outcome of [the] particular litigation." 416 Pa. at 21-22, 203 A.2d at 804-05 (internal quotation marks and citations omitted). See also RESTATEMENT (SECOND), CONFLICT OF LAWS § 1 (1971).⁵

¶ 8 Instantly, it is clear that the parties presented a legitimate question over whether Pennsylvania or Ohio had a greater interest in the matter. As such, a choice of law analysis was necessary.

Pursuant to the Pennsylvania choice of law analysis, the first step requires a determination of whether the laws of the competing states actually differ. If the laws do not differ, then a true conflict is not present and no further analysis is necessary. In that case, we apply Pennsylvania law. If we determine that a true conflict is present, we must then analyze the governmental interests underlying the issue and determine which state has the greater interest in the application of its law to the matter at hand.

Thibodeau v. Comcast Corp., 912 A.2d 874, 886 (Pa.Super.2006)(internal citations omitted). Accordingly, we must examine the laws of Pennsylvania and Ohio related to waiver of the attorney-client privilege to determine whether there is a true conflict.

¶ 9 Courts in this Commonwealth have recognized that "the roots of the attorney-client privilege are firmly entrenched in our common law, described fittingly as `. . . the most revered of our common law privileges.'" In re Investigating Grand Jury of Philadelphia County No. 88-00-3503, 527 Pa. 432, 438-39, 593 A.2d 402, 405 (1991)(quoting Commonwealth v. Maguigan, 511 Pa. 112, 124, 511 A.2d 1327, 1333 (1986)). The privilege

is designed to foster confidence between attorney and client, leading to a trusting, open dialogue. The privilege derives from the recognition that full and frank communication between attorney and client is necessary for sound legal advocacy and advice, which serve the broader public interests of observance of law and administration of justice.

Nationwide Mutual Ins. Co. v. Fleming, 2007 PA Super 145, ¶ 9, 924 A.2d 1259(internal quotation marks and citations omitted).

¶ 10 In Pennsylvania, our Judicial Code includes a provision governing the application of the attorney-client privilege.

§ 5928. Confidential communications to attorney

In a civil matter counsel shall not be competent or permitted to testify to confidential communications made by his client, nor shall the client be compelled to disclose the same, unless in either case this privilege is waived upon the trial by the client.

42 Pa.C.S.A. § 5928.

[F]our elements must be satisfied in order to successfully invoke the protections of attorney-client privilege:

1) The asserted holder of the privilege is or sought to become a client.

2) The person to whom the communication was made is a member of the bar of a court, or his subordinate.

3) The communication relates to a fact of which the attorney was informed by his client, without the presence of strangers, for the purpose of securing either an opinion of law, legal services or assistance in a legal matter, and not for the purpose of committing a crime or tort.

4) The privilege has been claimed and is not waived by the client.

Nationwide, supra, at ¶ 11 (citations omitted). "[T]he appellate courts of this jurisdiction have found waiver [of the attorney-client privilege] when the communication is made in the presence of or...