Law Offices of Bernard D. Morley, P. C. v. MacFarlane
| Decision Date | 06 July 1982 |
| Docket Number | No. 81SA112,81SA112 |
| Citation | 647 P.2d 1215 |
| Parties | LAW OFFICES OF BERNARD D. MORLEY, P. C.; Palace, Inc.; MJL Corporation; Colfax, Inc.; 1661, Inc.; and Evans Venture, Plaintiffs-Appellants, v. J. D. MacFARLANE, Attorney General, State of Colorado, and Robert Gallagher, District Attorney, County of Arapahoe; and Sheriff's Department, County of Arapahoe, Defendants-Appellees. |
| Court | Colorado Supreme Court |
Robert C. Ozer, P. C., Robert C. Ozer, Conifer, for plaintiffs-appellants.
Robert H. Gallagher, Jr., Dist. Atty., Catherine P. Richardson, Deputy Dist. Atty., Littleton, for defendants-appellees.
This appeal was taken from an order denying injunctive relief to the Law Offices of Bernard D. Morley, P. C.; Palace, Inc.; MJL Corporation; Colfax, Inc.; 1661, Inc.; and Evans Venture (Appellants), against the Attorney General of the State of Colorado, the District Attorney of Arapahoe County, Colorado, and the Arapahoe County Sheriff's Department (Appellees). The complaint sought to enjoin the use of materials seized from the law offices of Morley pursuant to a valid search warrant. The warrant was issued as a result of an undercover investigation of Bernard Morley and his client, Harold Lowrie. Neither Morley nor Lowrie is a party to this case. The sole parties seeking injunctive relief pursuant to C.R.C.P. 65 are a professional corporation and a number of corporations which hold liquor licenses and which operate taverns in Colorado. The trial court held that, under the facts of this case, an adversary hearing was not required to determine the applicability of the attorney-client privilege or the work product doctrine to the seized items because the prosecution established a prima facie showing of the applicability of the crime-fraud exception. We affirm.
The facts of this case are undisputed. On January 26, 1981, Detective Ollila of the Arapahoe County Special Crime Attack Team (SCAT) prepared an affidavit for the issuance of a search warrant for the law offices of appellant, Bernard D. Morley, P. C., in Arapahoe County, Colorado. The affidavit set forth the following facts which formed the basis for Detective Ollila's belief that certain property was located at Morley's law offices which was material evidence relating to alleged violations of the Colorado Criminal Code.
In July 1980, the chief of the Cherry Hills Police Department contacted Detective Ollila and requested an investigation into the possible criminal activity of Morley, who is a registered Colorado attorney. In response to the request, the Arapahoe County SCAT and the Federal Bureau of Investigation conducted a joint undercover investigation of Morley's activities. As part of their investigation, the undercover agents learned that Morley was assisting Lowrie in his alleged illegal control of the ownership of several taverns in Colorado by the use of "sham" corporations for each tavern. The sham corporations had "front" people named as officers or directors of the corporations which obtained Colorado liquor licenses. 1 Morley told the undercover agents that he held the endorsed stock certificates for the various sham corporations and letters of resignation signed by the front men in order to quickly change the management and ownership of the corporations if necessary. Lowrie subsequently confirmed the arrangements he had made with Morley in a conversation with an undercover agent. Thereafter, in a taped conversation with an undercover agent, Morley stated By having a management contract with the record owner of each tavern, and with Morley empowered to change the management at any time, Lowrie was able to completely control the financial operation of not less than five taverns in Colorado.
After obtaining copies of the public corporate records and the applications for liquor licenses for the various taverns, Detective Ollila requested the issuance of a search warrant for Morley's law offices based upon the particular facts set forth in the affidavit relating to Morley's role in the formation of the sham corporations to defraud the liquor licensing authority. 2 On January 26, 1981, a search warrant was issued authorizing the seizure of various records described as follows:
"Records pertinent to the management and operation of the following businesses; including, ... financial records, bank deposit slips, bank books, sales records, purchase records, credit invoices, cancelled checks, stockholders and corporate records, stock certificates, employment records, letters of resignation, business ledger books, accounting records, corporate seals, stock books and minute books, and all monies and proceeds from the businesses:
1. INTERNATIONAL ENTERTAINMENT CONSULTANTS, INC.
2. EAGLE MANAGEMENT SERVICES, INC.
3. PALACE, INC.-Doing Business as "PT's"
4. MJL CORPORATION-Doing Business as "PT's OF COLORADO SPRINGS, INC."
5. COLFAX, INC.-Doing Business as "SATURDAYS, INC."
6. SIXTEEN SIXTY ONE, INC.-Doing Business as "BOOGIE DOWN"
Denver, Colorado"
The search warrant was executed by the Arapahoe County Sheriff's Department on January 27, 1981, and the client files and corporate books of the appellant corporations were seized from Morley's offices. In this appeal, the appellants do not contest the validity of the affidavit or the search warrant, or the manner in which the warrant was executed.
On January 30, 1981, the appellants filed this action in the District Court in and for the City and County of Denver seeking to enjoin the dissemination of the seized items to state investigators and to a grand jury until the court reviewed the items and determined the applicability of the attorney-client privilege and the work product doctrine as to each document. Pursuant to a stipulation between the parties, the documents and files were deposited with the clerk of the court and were available for viewing only by authorized representatives of the law offices of Morley. The stipulation also required each party to submit written briefs on the scope of the court's review of the seized documents and set forth the procedure to be followed in determining whether a prima facie showing of the crime-fraud exception to the attorney-client privilege and the work product doctrine had been established. At a hearing on February 5, 1981, the district court approved the stipulation.
Thereafter, the court received memoranda of law, held a second hearing on February 13, 1981, and conducted an in camera review of the seized documents. On February 17, 1981, the court ruled that the prosecution had established a prima facie showing of the applicability of the crime-fraud exception to permit the release of the documents seized pursuant to the search warrant. The court also found that all of the seized documents but one file and one pad of blank stock certificates were within the scope of the search warrant. In addition, it determined that none of the documents within the scope of the warrant were protected by the attorney-client privilege because they had been disseminated to third parties. The court also concluded that the documents did not fall within the work product rule since they were not prepared in anticipation of litigation or trial. Accordingly the court denied injunctive relief and ordered that the documents, with the above-noted exceptions, be released to the State Attorney General's offices and to the Arapahoe County Sheriff's Department. 3
The appellants contend that the trial court erred in not allowing an adversarial hearing in conjunction with the in camera inspection of the seized items prior to the dissemination of the documents. In their view, evidence regarding the attorney-client privilege and the work product doctrine should have been heard by the trial court before a ruling was made on the application for injunctive relief against the use of the seized documents. It is also asserted that the prosecution's prima facie showing of the crime-fraud exception was insufficient to satisfy the requirements of judicial screening of the documents.
Of particular significance in this case is the stipulation between parties regarding the manner in which the injunction issues would be resolved by the trial judge. The parties agreed that the court would maintain custody of the sealed documents until the issues were resolved. In addition, the stipulation provided that, following submission of the briefs, the court would examine the seized documents to determine if they were within the scope of the search warrant. Thereafter, the court was to determine whether the documents were subject to either the attorney-client privilege or the work product doctrine. Those documents which were not subject to either the attorney-client privilege or the work product doctrine were to be released to the prosecution. The documents which the court determined might fall within either the attorney-client privilege or the work product doctrine were to be suppressed unless the prosecution made a prima facie showing that the crime-fraud exception applied. The parties also agreed that the court had the option of making the determination at either an ex parte hearing or at an adversary hearing. 4 From the record and the facts which are before us, we conclude that the trial judge did not err in releasing the seized documents without an adversary hearing.
The common law attorney-client privilege has been codified in Colorado in section 13-90-107(1)(b), C.R.S.1973 (1981 Supp.), as follows:
To continue reading
Request your trial
-
State v. Wong, No. 22671
... ... operation of grand jury; notes seized pursuant to search warrant); Morley v. MacFarlane, 647 P.2d 1215 (Colo.1982) (appeal from order denying ... ...
-
Lanari v. People
... ... & Tel. v. DiFede, 780 P.2d 533 (Colo.1989); Law Offices of Bernard D. Morley v. MacFarlane, 647 P.2d 1215 (Colo.1982), and ... ...
-
State ex rel. Medical Assurance v. Recht
... ... Fitzsimmons, Esq., Russell J. Guthrie, Esq., Fitzsimmons Law Offices, Wheeling, David N. Dittmar, Esq., Zagula & Dittmar, Weirton, for Estate ... App.4th 625, 62 Cal.Rptr.2d 834 (1997) ; Law Offices of Bernard D. Morley, P.C. v. MacFarlane, 647 P.2d 1215 (Colo.1982) ; American ... ...
-
State ex rel. Medical Assurance of West Virginia, Inc. v. Recht
... ... Co. v. Superior Court, 62 Cal. Rptr. 2d 834; Law Offices of Bernard D. Morley, P.C. v. MacFarlane, 647 P.2d 1215 (Colo. 1982); ... ...
-
Rule 26 GENERAL PROVISIONS GOVERNING DISCOVERY; DUTY OF DISCLOSURE.
...315 (1976), cert. denied, 429 U.S. 1040, 97 S. Ct. 737, 50 L. Ed. 2d 751 (1977); Law Offices of Bernard D. Morley, P.C. v. MacFarlane, 647 P.2d 1215 (Colo. 1982). Generally, the attorney-client privilege protects communications between the attorney and the client, and the promotion of such ......
-
ARTICLE 90 WITNESSES
...315 (1976), cert. denied, 429 U.S. 1040, 96 S. Ct. 3187, 50 L. Ed. 2d 751 (1977); Law Offices of Bernard D. Morley, P.C. v. MacFarlane, 647 P.2d 1215 (Colo. 1982). Attorney-client privilege not absolute. Neither the attorney-client privilege nor the work-product exemption is absolute. The s......
-
Rule 15 AMENDED AND SUPPLEMENTAL PLEADINGS.
...App. 1981); King v. W.R. Hall Transp. & Storage Co., 641 P.2d 916 (Colo. 1982); Law Offices of Bernard D. Morley, P.C. v. MacFarlane, 647 P.2d 1215 (Colo. 1982); In re Boyd, 643 P.2d 804 (Colo. App. 1982); Parry v. Walker, 657 P.2d 1000 (Colo. App. 1982); Creditor's Serv., Inc. v. Shaffer, ......
-
Section 7 SECURITY OF PERSON AND PROPERTY - SEARCHES - SEIZURES - WARRANTS.
...must be precisely limited and restricted to prevent an exploratory search. Law Offices of Bernard D. Morley, P.C. v. MacFarlane, 647 P.2d 1215 (Colo. 1982). Rigid adherence to the particularity requirement is appropriate where a lawyer's office is searched for designated documents. Anything......