Fruehauf Trailer Corp. v. Hagelthorn, K-H

• Decision Date: 18 January 1995
• Docket Number: Docket No. 162101,K-H
• Parties: FRUEHAUF TRAILER CORPORATION andCorporation, Plaintiffs-Appellants, v. George Allan HAGELTHORN and Rather Engineering, P.C., Defendants-Appellees.
• Court: Court of Appeal of Michigan — District of US

Page 778

528 N.W.2d 778

208 Mich.App. 447

FRUEHAUF TRAILER CORPORATION and K-H Corporation, Plaintiffs-Appellants, v. George Allan HAGELTHORN and Rather Engineering, P.C.,

Defendants-Appellees.

Docket No. 162101.

Court of Appeals of Michigan.

Submitted Nov. 9, 1994, at Detroit.

Decided Jan. 18, 1995, at 9:05 a.m.

Released for Publication March 21, 1995.

Cardelli, Schaefer, Mason & Orlans by Deborah A. Hebert, Detroit, for plaintiffs.

Sachs, Waldman, O'Hare, Helveston, Hodges & Barnes, P.C. by Andrew Nickelhoff, Detroit, for defendants.

Before WAHLS, P.J., and MARK J. CAVANAGH and LAMBROS, ^* JJ.

PER CURIAM.

Plaintiffs appeal as of right from the circuit court's orders denying their motion for a preliminary injunction and dismissing their petition for a permanent injunction. We affirm.

Defendant George Allan Hagelthorn, a certified mechanical engineer, was formerly employed as manager of reliability by Fruehauf Corporation, the predecessor of plaintiffs Fruehauf Trailer Corporation and K-H Corporation (Fruehauf). In that capacity, among other things, defendant assisted Fruehauf's attorneys in defending against products liability actions throughout the United States.

After defendant retired from his position with Fruehauf in 1982, he provided technical advice and expert testimony to plaintiffs' attorneys in products liability litigation through his consulting business, defendant Rather Engineering, P.C. Defendant also was retained to provide consultation and expert witness services to a plaintiff in a case brought against Fruehauf in Indiana.

In September 1992, plaintiffs filed a complaint to enjoin defendant from discussing with anyone any information relating to plaintiffs, and from consulting or testifying as an expert in any products liability case brought against plaintiffs, asserting that defendant's consultation and expert services violated the attorney-client privilege. The court issued a temporary restraining order. Plaintiffs moved for a preliminary injunction. The court denied the motion and dissolved the temporary restraining order. Relying on the record created for the preliminary injunction, the court then entered an order of dismissal of the petition for a permanent injunction. This appeal followed.

The issue on appeal is whether the court erred in denying the motion for a preliminary injunction on the ground that defendant was not bound by the attorney-client privilege.

In determining whether to issue a preliminary injunction, the court must consider (1) the likelihood that the party seeking the injunction will prevail on the merits, (2) the danger that the party seeking the injunction will suffer irreparable injury if the injunction is not issued, (3) the risk that the party seeking the injunction would be harmed more by the absence of an injunction than the opposing party would be by the granting of the relief, and (4) the harm to the public interest if the injunction is issued. This Court will not disturb a trial court's grant or denial of a preliminary injunction absent an abuse of discretion. Campau v. McMath, 185 Mich.App. 724, 729, 463 N.W.2d 186 (1990). We will sustain the trial court's findings of fact unless we are convinced that we would have reached a different result. Kern v. Flint, 125 Mich.App. 24, 27, 335 N.W.2d 708 (1983).

The purpose of the attorney-client privilege is to permit a client to confide in the client's counselor, knowing that such communications are safe from disclosure. Yates v. Keane, 184 Mich.App. 80, 83, 457 N.W.2d 693 (1990); U.S. Fire Ins. Co. v. Citizens Ins. Co. of America, 156 Mich.App. 588, 592, 402 N.W.2d 11 (1986). The scope of the privilege is narrow: it attaches only to confidential communications by the client to its adviser that are made for the purpose of obtaining legal advice. Yates, supra.

Plaintiffs have not clarified on which side of the attorney-client relationship defendant supposedly falls. In their argument on appeal, they appear to consider that he was acting as an agent of the attorney; however, they indiscriminately cite cases that address the issue whether a corporate employee may be considered an agent of the client for purposes of asserting the privilege. Plaintiffs' failure to adequately draw this distinction tends to weaken their position because, rightly or wrongly, it implies a lack of understanding of the nature and purpose of the privilege. In order to address this issue properly, we will analyze each side of the attorney-client relationship separately.

First, we consider the attorney side of the relationship. The circuit court found that defendant functioned as a technical expert, and not as an attorney, while employed by Fruehauf. ¹ That finding is supported by the record, and we are not convinced that we would have reached a different result. Kern, supra.

Plaintiffs cite three cases in support of their assertion that defendant was acting in a quasi-legal capacity while employed by plaintiffs. The first case, American Motors Corp. v. Huffstutler, 61 Ohio St.3d 343, 575 N.E.2d 116 (1991), is clearly distinguishable from the case at bar. Unlike defendant Hagelthorn, the defendant in Huffstutler, besides being an engineer, was also a licensed attorney who performed legal services for his employer.

The other two cases are distinguishable on the grounds that the nonattorneys in those cases were disqualified from participating in specific litigation in which they had earlier been involved on behalf of the opposing party and with respect to which they were privy to certain confidential information. See Williams v. Trans World Airlines, Inc., 588 F.Supp. 1037 (W.D.Mo.1984); Conforti & Eisele, Inc. v. Division of Building & Construction, 170 N.J.Super. 64, 405 A.2d 487 (1979). The injunction requested in the present case was not limited...