Kurstin v. Rosenthal, No. 2445, September Term, 2008 (Md. App. 3/1/2010)

Decision Date01 March 2010
Docket NumberNo. 2445, September Term, 2008.,2445, September Term, 2008.
CourtCourt of Special Appeals of Maryland

Opinion by Moylan, J.

Our concern is with the threshold of appealability. The particular aspect thereof that commands our attention is the collateral order doctrine. Does the denial in this case of a motion to quash a discovery order qualify as a privileged collateral order within the contemplation of the doctrine? Or shall its review more properly await a final judgment?

The Procedural Background

The appellee, Bromberg Rosenthal, LLP et al., is a law firm based in Rockville, Maryland. On May 27, 2008, it sued a former client, the appellant Coralie Kurstin, for $25,000 due on an unpaid legal fee. Ms. Kurstin responded with a counterclaim, suing in turn the law firm, along with one of its partners, Barry Rosenthal, Esq., for legal malpractice. Ms. Kurstin prayed a jury trial, thereby transferring the case from the District Court to the Circuit Court for Montgomery County.

Bromberg Rosenthal had earlier represented Ms. Kurstin in a divorce case against her then husband, Ronald Kurstin (now deceased). The case ended with a decree of absolute divorce being granted on December 31, 2002. Incorporated into the divorce decree was a settlement agreement including the following proviso:

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 irrevocable.

Several years later, but while Ronald Kurstin was still alive, Ms. Kurstin learned that her former husband had breached the settlement agreement by removing his four children by Ms. Kurstin as the beneficiaries of the life insurance policy and substituting his girlfriend, Terry LeSohn, as sole beneficiary. Ms. Kurstin consequently retained her current counsel Ellis J. Koch, Esq., and filed suit against Ronald Kurstin (as well as against Terry LeSohn and the USAA Life Insurance Company) in an effort to prohibit the switch of beneficiaries. The case was filed in the Circuit Court for Montgomery County on June 2, 2006. A Temporary Restraining Order was issued as to USAA Life on June 5, 2006, enjoining it from disbursing any funds under the policy until further order of the court. At a motions hearing on July 21, 2006, settlement negotiations were entered into. As a result, a consent order was entered in the case, providing that $250,000 would be released to the control of Ronald Kurstin under the accelerated death benefit provisions of the policy, thereby reducing the policy's value to $1,250,000 for the benefit of the four children, who remained, however, as the designated beneficiaries. On August 22, 2006, Dr. Kurstin died and the policy provisions to the beneficiaries were paid.

Matters remained quiet for almost two years. When Bromberg Rosenthal sued for its unpaid legal fee on May 27, 2008, however, Ms. Kurstin responded with her suit against the firm for legal malpractice. On the malpractice claim, Ms. Kurstin's position is that the negligence of Bromberg Rosenthal, in failing to notify the life insurance company of the settlement agreement prohibiting a change in beneficiaries, left her with no feasible alternative but to enter into the 2006 consent order by which her children lost a portion of the benefits that was their due.

The position of Bromberg Rosenthal, on the other hand, is that when Ms. Kurstin sued her ex-husband to preclude him from making any changes in the beneficiaries of his life insurance policy, all the legal merit was indisputably on her side and there was, therefore, no sound tactical reason for any compromise on her part. The yielding to him of control over $250,000 was, in its view, ill-advised.

Battle was thus joined between two law firms as to their respective legal appraisals of the insurance policy controversy and as to appropriate responsive strategies. If the children of Ms. Kurstin, as beneficiaries of their father's life insurance policy, lost $250,000, the critical issue would be which law office, if either, might be found responsible for all, or for some, of that loss?

Discovery: A Scheduled Deposition

Anticipating an impending clash over competing legal assessments and competing responsive strategies, Bromberg Rosenthal filed a Notice of Deposition Duces Tecum on Ellis J. Koch, Esq., the successor attorney for Ms. Kurstin, announcing that it would take his deposition and instructing him "to bring copies of all documents in his possession related to his representation of Coralie Kurstin in the underlying case." Ms. Kurstin promptly filed a Motion to Quash Notice of Deposition and For Protective Order, along with an accompanying Memorandum of Law. Her core contention was:

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.

Her supporting memorandum predicted the likely use that Bromberg Rosenthal would make of the deposition.

In defending the malpractice action, Plaintiff/Counter-Defendant Bromberg Rosenthal seeks the deposition duces tecum of the undersigned counsel with the expressed intent of possibly suing undersigned counsel for contribution and indemnification intending to allege negligence in advice as to risk assessment given to Coralie Kurstin and the children upon which they based their determination to settle the Second Case recited above.

(Emphasis supplied).

Bromberg Rosenthal filed its Opposition to Motion to Quash Notice of Deposition along with an accompanying Memorandum of Law. In that memorandum, it acknowledged its basic position in the legal malpractice case.

Notwithstanding the fact that Mr. Kurstin clearly breached the settlement agreement and the fact that Mr. Kurstin was still alive at that time and therefore could be compelled to re-designate the Defendants/Counter-Plaintiff's adult children as the sole beneficiaries on the life insurance policy, the Defendant/Counter-Plaintiff, through the representation of Ellis Koch, Esquire, agreed to settle the litigation against Mr. Kurstin.

(Emphasis supplied).

With direct reference to recognized exceptions to the attorney-client privilege, Bromberg Rosenthal stated its need for the inquiry.

[I]t is the contention of Rosenthal, LLP and Barry Rosenthal that Defendant/Counter-Plaintiff's damages were caused by her settlement of the lawsuit filed by Mr. Koch and not by any act or omission on the part of Rosenthal, LLP and Barry Rosenthal. In order to support this defense, Rosenthal, LLP and Barry Rosenthal need to be able to ask questions of both Ms. Kurstin and Mr. Koch related to the settlement of that lawsuit, that seek information that would, but for the filing of this lawsuit, be protected by the attorney-client privilege.

(Emphasis supplied).

The question posed before Judge Michael D. Mason was that of whether the attorney-client privilege must yield when a client has sued a former law firm for legal malpractice and arguably puts in issue matters that might otherwise be protected by the attorney-client privilege the client enjoys with a successor law firm. The issue raised by the competing memoranda centered on the proper application of Parler & Wobber v. Miles and Stockbridge, 359 Md. 671, 756 A.2d 526 (2000); E.I. du Pont v. Forma-Pack, 351 Md. 396, 718 A.2d 1129 (1998); and Hearn v. Rhay, 68 F.R.D. 574 (D.C. Wash. 1975).

On January 8, 2009, Judge Mason filed an Order denying Ms. Kurstin's motion to quash the deposition and for a protective order. He ruled that the attorney-client privilege between Ms. Kurstin and the successor law firm had been waived. Ms. Kurstin has appealed that order. Bromberg Rosenthal has moved to dismiss the appeal on the ground that it is neither a final order nor immediately appealable under the collateral order doctrine. To make the focus clear, we are dealing with an attempted appeal from a discovery ruling. One party moved to take a deposition. The opposing party moved to quash the request for a deposition. The motion to quash was denied. This appeal is taken from that denial. The appellee, in turn, charges the appellant with jumping the gun with a premature appeal.

Finality As the Generative Source of Appealability

The issue is appealability. To appeal an adverse judicial decision, it should be clear, is not a constitutional right. It is only a grant of legislative grace. To appeal a perceived injustice at the hands of a trial court is not an inherent common law entitlement. It is only a grant of legislative grace. Jolley v. State, 282 Md. 353, 355, 384 A.2d 91 (1978); Sigma Reproductive Health Center v. State, 297 Md. 660, 664-65, 467 A.2d 483 (1983); Gruber v. Gruber, 369 Md. 540, 546, 801 A.2d 1013 (2002). The entire appellate process is but a creature of statute. It may be rescinded tomorrow at the whim of the General Assembly. An appeal may do only what its life-giving statute says it may do. It may do no more. The Promethean fount for an appeal in Maryland is Courts and Judicial Proceedings Article, § 12-301.

Except as provided in § 12-302 of this subtitle, a party may appeal from a final judgment entered in a civil or criminal case by a circuit court. The right of appeal exists from a final judgment entered by a court in the exercise of original, special, limited, statutory jurisdiction, unless in a particular case the right of appeal is expressly denied by law. In a criminal case, the defendant may appeal even though imposition or execution of sentence has been suspended. In a civil case, a plaintiff who has accepted a remittitur may cross-appeal from the final judgment.

(Emphasis supplied).

The critical focus is thus upon a final judgment. Section 12-101(f) defines "final judgment":

(f) Final judgment. "Final judgment" means a...

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