Lasky, Haas, Cohler & Munter v. Superior Court

• Decision Date: 19 September 1985
• Docket Number: No. B013120,B013120
• Citation: 172 Cal.App.3d 264,218 Cal.Rptr. 205
• Court: California Court of Appeals Court of Appeals
• Parties: LASKY, HAAS, COHLER & MUNTER, et al., Petitioners, v. The SUPERIOR COURT of Los Angeles County, Respondent, Claire E. GETTY, Caroline M. Getty, Anne Getty Earhart, and Seth M. Hufstedler, Guardian ad litem for Tara Gabriel Galaxy Gramaphone Getty, Real Parties in Interest.

Page 205

218 Cal.Rptr. 205

172 Cal.App.3d 264

LASKY, HAAS, COHLER & MUNTER, et al., Petitioners, v. The SUPERIOR COURT of Los Angeles County, Respondent Claire E. GETTY, Caroline M. Getty, Anne Getty Earhart, and Seth M. Hufstedler, Guardian ad litem for Tara Gabriel Galaxy Gramaphone Getty, Real Parties in Interest.

No. B013120.

Court of Appeal, Second District, Division 4, California.

Sept. 19, 1985.

Review Denied Dec. 19, 1985.

Moses Lasky, Richard Haas, Charles B. Cohler, Thomas E. Woodhouse, and Lasky, Haas, Cohler & Munter, San Francisco, petitioners in pro. per.

No appearance for respondent.

Latham & Watkins, Philip F. Belleville, Morris A. Thurston, Michael R. Whalen, Ursula H. Hyman, and Brian L. Becker, Los Angeles, for real party in interest Claire E. Getty.

Overton, Lyman & Price, Edmond R. Davis, John A. Payne, Jr., Thomas M. McMahon, and Pamela M. Heberton, Los Angeles, for real party in interest Caroline M. Getty.

Butler, Dan, Allis & Reback, James G. Butler, and Robert C. Reback, Los Angeles, for real party in interest Anne Getty Earhart.

Hufstedler, Miller, Carlson & Beardsley, Joseph L. Wyatt, Jr., and Dennis M. Perluss, Los Angeles, for real party in interest Seth M. Hufstedler.

WOODS, Presiding Justice.

The question to be determined in this proceeding in mandate is whether an attorney's "impressions, conclusions, opinions or legal research or theories," generated in the process of assisting a client to act as a trustee but never communicated to the client, are privileged from discovery by trust beneficiaries who seek to remove the trustee for mismanagement.

The facts material to determination of the issues are relatively simple and not in dispute.

On November 14, 1983, Seth M. Hufstedler as guardian ad litem for Tara Gabriel Galaxy Gramaphone Getty (Tara), a beneficiary of the Declaration of Trust of Sarah C. Getty dated December 31, 1934 (the Trust), filed a petition in Los Angeles Superior Court. On March 12, 1984, an amended petition was filed. The petition seeks, inter alia, instructions as to whether the sole remaining successor trustee Gordon Peter Getty (Gordon), has authority to administer the trust; the petition also seeks the removal of Gordon for mismanagement of the trust corpus.

The petition alleges that Tara is a beneficiary of the Trust with a future interest in income and principal. The alleged intent of the trustors, Sarah C. Getty and J. Paul Getty, was to provide for management of the trust by two individual trustees and one corporate trustee on the basis of "majority rule." The trustors intended to manage the corpus in a conservative manner to preserve the family's controlling interest in Getty Oil Company and thus provide long-term income for the decedants of J. Paul Getty. The original trustee, J. Paul Getty, died in 1976. Gordon became the sole acting successor trustee when the nominated corporate successor trustee refused and the other nominated and acting individual successor trustee died.

While acting as the sole successor trustee, Gordon allegedly solicited offers from large corporations to purchase the trust's controlling shares in Getty Oil Company. Gordon eventually effected a sale to Texaco Oil Company in 1983 for approximately $4 billion dollars and elected payment in cash. The beneficiaries of the trust, having future interest in the corpus income and principal, claim that the sale violated the intent of the trust to retain the Getty Oil Company business. They assert that Gordon effected the sale to serve his interests, as a current Trust income beneficiary, to the prejudice of beneficiaries with future interests.

Gordon filed a response to Tara's petition contending that the Trust allows for a sole successor trustee to manage the Trust and disputing the propriety of appointing a co-trustee.

On June 8, 1984, other beneficiaries of the Trust, Claire E. Getty, Caroline M. Getty and Anne Getty Earhart, (Claire, Caroline and Anne, respectively) filed a petition seeking to remove and surcharge Gordon as trustee and to have a corporate trustee appointed. This petition alleged: (1) that Gordon exposed Getty Oil Company to takeover bids by large oil companies due to his solicitation of purchase offers; (2) that Gordon generated hostility between himself and the management of Getty Oil Company which resulted in less effective management and vulnerability to hostile takeover bids; (3) that Gordon disclosed information confidential to Getty Oil Company to competitors of Getty Oil Company, and (4) that Gordon breached his fiduciary duty to the Trust beneficiaries when he failed to inform them of his plan to sell the Trust's interest in Getty Oil Company so that they could not prevent such a sale.

In his response to the second petition, Gordon avers that solicitations by large corporations to purchase the Trust's shares were not precipitated by him but, rather, by the very filing of Tara's petition on November 14, 1983.

In the course of discovery concerning the allegations of mismanagement by Gordon, the trust beneficiaries sought discovery of all writings and discussions generated by Gordon's counsel (petitioners Lasky, Haas, Cohler & Munter and Thomas E. Woodhouse--hereafter the Lasky firm) concerning Gordon's activities as trustee with regard to the Trustee's sale of Getty Oil Company stock to Texaco, Inc., and with regard to the alleged prior proposed sales to other specified entities.

The Lasky firm produced and disclosed all its actual written and oral communications to Gordon concerning material trust business, but refuses to disclose writings or oral discussions that it terms its "internal and private uncommunicated work-product" in that regard. The Lasky firm contends that such work-product (consisting of its "impressions, conclusions, opinions, or legal research and theories") which was never communicated or produced to its client, the trustee, is absolutely protected from discovery by the language of section 2016, subdivision (b) of the Code of Civil Procedure. Since the client trustee has no right under law to compel disclosure of such writings and oral discussions, the trust beneficiaries have no such right either.

The beneficiaries moved to compel production of documents and answers to deposition interrogatories concerning the "uncommunicated" attorney work-product. The beneficiaries contend that the activities of Gordon's counsel are potentially material to determination of the issue of whether Gordon considered soliciting or did solicit a sale of the Trust's securities before or after November 14, 1983.

After extensive briefing and argument, it was determined by the superior court that a client has the right to require his counsel's disclosure of previously uncommunicated attorney work-product and that, because the trustee has a fiduciary duty to disclose all "obtainable," pertinent information concerning trust management to the beneficiaries, the uncommunicated work-product of the trustee's counsel is discoverable by the adversarial beneficiaries. The work-product ordered produced or disclosed includes all counsel's "impressions, conclusions, opinions, legal research and theories relating to work that they have undertaken on the trustee's behalf; ... in his capacity as trustee, including conversations or communications between one another and memoranda produced and research prepared in connection with Trust matters." However, the beneficiaries' right to discovery of work-product does not extend to any work done by the trustee's counsel in connection with defending Gordon against the charges made against him by the beneficiaries in the underlying proceedings.

The resulting petition for mandate was initially summarily denied by this court. The Supreme Court granted hearing and ordered this proceeding retransfered to this court with directions to issue an alternative writ. The writ issued.

DISCUSSION

Whether trust beneficiaries who are litigation adversaries of their trustee have a right to compel discovery of the uncommunicated work-product of the attorneys counseling the trustee in administration of the trust is a question of first impression.

Analysis of this ultimate question requires preliminary resolution of the question of who holds the work-product privilege. This is necessary for two purposes: (1) to determine whether a cognizable assertion of the privilege was made in the underlying proceedings and (2) to facilitate analysis of the beneficiaries' contention that they may nevertheless discover the uncommunicated work-product (a) because the trustee client has a legal right of access to the privileged work-product and must obtain and disclose that material to them under his fiduciary duty as trustee or (b) because the beneficiaries have a direct right of access as secondary "clients."

The beneficiaries successfully contended below that, as between client and attorney, the client is the holder of the work-product privilege or, alternatively, that the client "owns" his attorney's work-product and is not affected by the privilege. Accordingly, the client trustee must compel his attorneys to produce to him all uncommunicated work-product in satisfaction of the trustee's fiduciary duty to provide full disclosure to the beneficiaries.

The petitioning attorneys contend that the attorney is the exclusive holder of the work-product privilege in all circumstances and that the attorney may resist discovery efforts by even his client.

The lines of cases relied upon by the beneficiaries and the petitioners, respectively, represent an ostensible split in authority as to who is the sole holder of the work-product privilege or who "owns" the work-product. However, for the reasons discussed hereafter, we conclude that the cases relied upon by petitioners correctly hold that the privilege is held exclusively by the attorney in all circumstances and that, specifically, there is no exception to this rule as between attorney and...