Mid-American Natl. Bank & Trust Co. v. Cincinnati Ins. Co.

• Citation: 74 Ohio App.3d 481,599 N.E.2d 699
• Decision Date: 07 June 1991
• Docket Number: MID-AMERICAN,No. WD-90-7,WD-90-7
• Parties: NATIONAL BANK AND TRUST COMPANY, Appellee, v. CINCINNATI INSURANCE COMPANY, Appellant.
• Court: United States Court of Appeals (Ohio)

Page 481

74 Ohio App.3d 481

599 N.E.2d 699

MID-AMERICAN NATIONAL BANK AND TRUST COMPANY, Appellee, v. CINCINNATI INSURANCE COMPANY, Appellant.

No. WD-90-7.

Court of Appeals of Ohio, Sixth District, Wood County.

Decided June 7, 1991.

Ellis F. Robinson, Toledo, for appellee.

William H. Woods and Lisa A. Weekley, Columbus, for appellant.

PER CURIAM.

This is an appeal from a January 4, 1990 judgment entry of the Wood County Court of Common Pleas. The challenged judgment entry granted a motion to compel which had been filed by appellee, Mid-American National Bank and Trust Company. Appellant, Cincinnati Insurance Company, raises six assignments of error which state:

"I. The Common Pleas Court erroneously held that the attorney-client privilege cannot be asserted by a client to prevent discovery of the contents of confidential communications between the client and its attorney.

"II. The finding of the Common Pleas Court that Cincinnati Insurance Company did not intend that communications between Cincinnati and its attorney be confidential is clearly erroneous and is not supported by any probative evidence.

"III. The Common Pleas Court erroneously held that Cincinnati Insurance Company waived the attorney-client privilege by using a material obtained in a confidential attorney-client communication.

"IV. The Common Pleas Court erroneously held that communications which are not relevant to the issues in this case were discoverable under Rule 26, O.R.Civ.P.

"V. The order of the Common Pleas court denies Cincinnati Insurance Company the fundamental right to effective assistance of legal counsel in this action.

"VI. The Common Pleas Court abused its discretion by ordering the production of confidential attorney-client communications, while withholding any ruling on the dispositive motion of Cincinnati Insurance Company to dismiss the action for failure to state a claim upon which relief can be granted."

For the reasons outlined below, we affirm the judgment of the Wood County Court of Common Pleas.

A careful review of the procedural history of this case is necessary to understand the assignments of error. Appellee filed a complaint in the Wood County Court of Common Pleas on June 20, 1988, alleging that appellant had breached a contract and had acted in bad faith in refusing to provide defense counsel and in refusing to pay more than $50,000 toward a settlement and court costs in a case in which appellee had been named as a defendant. Appellee asserted that an insurance policy issued by appellant to appellee contained provisions obligating appellant to provide defense counsel and payment of the entire settlement cost of $450,000. Appellant filed an answer to the complaint on July 15, 1988. During the course of discovery which followed, appellee filed a motion to compel. Appellee requested that the lower court order appellant to produce " * * * all letters of opinion received from counsel by the Defendant [appellant] concerning the insurance coverage provided to the Plaintiff [appellee] for the claims made against said Plaintiff [appellee] in a previous action * * *."

Several other motions, including motions to amend the complaint, motions to dismiss pursuant to Civ.R. 12(B)(6), and motions for summary judgment were filed following the motion to compel. On May 22, 1989, the lower court filed a journal entry granting the motion to compel and ordering an in-camera inspection. After conducting the in-camera inspection, the court filed a judgment entry on January 4, 1990, granting the motion to compel and ordering the release of correspondence received by appellant from appellant's counsel. The lower court noted that this situation was parallel to the situation described in Humphry v. Riverside Methodist Hosp. (1986), 22 Ohio St.3d 94, 95, 22 OBR 129, 130, 488 N.E.2d 877, 878, in which the Supreme Court of Ohio ruled that an order to disclose information covered by hospital-patient confidentiality and statutory privilege was a final, appealable order, allowing appellate review of the order even though other issues in the case were pending, id. at 97, 22 OBR at 131-132, 488 N.E.2d at 879. Appellant filed a notice of appeal on January 22, 1990 and on January 30, 1990 the lower court placed the remaining issues on the inactive docket until this appeal concerning the order to disclose correspondence is decided.

Before we consider the separate assignments of error we must first determine whether the lower court's assessment that the judgment entry granting the motion to compel is a final, appealable order is correct. As we have already noted, the case relied upon by the lower court involved an assertion of hospital-patient confidentiality and statutory privilege. A plaintiff, who was suing a hospital, after contracting Legionnaire's disease during a stay at the hospital, sought records relating to all patients who contracted Legionnaire's disease while at the hospital from August 1977 to the time of the request to produce. Id. at 95, 22 OBR at 130, 488 N.E.2d at 878. The hospital refused to release records relating to other patients with the names and addresses of the other patients still discernible. Id. The trial court ordered the hospital to release the names of the patients and the hospital appealed. The Supreme Court of Ohio stated that a two-prong test must be applied to determine whether the trial court's order to release the information was a final, appealable order. The party contesting the order to produce has the burden of demonstrating (1) that a substantial right was affected by the order; and (2) " * * * that the order was made in a special proceeding." Id. at 96, 22 OBR at 130, 488 N.E.2d at 878. In this case it is apparent that a substantial right, the right to maintain confidential correspondence with one's attorney, is affected by the trial court's order. See id. The question of whether a special proceeding exists is determined by "the weighing of the waste of judicial resources resulting from this type of interlocutory appeal and the general desire to obtain prompt and orderly disposition of litigation, against 'the need for immediate review because appeal after judgment is not practicable.' " Id. We conclude that a special proceeding does exist in this case because the release of correspondence from appellant's attorney to appellant could potentially result in irreparable injury to appellant making an appeal after judgment impractical. We agree with the lower court that the judgment entry from which this appeal stems is a final, appealable order.

Appellant contends in its first assignment of error that the lower court's ruling compelling appellant to release the correspondence requested by appellee must be overturned because the ruling destroys Ohio's attorney-client privilege, recognized in both statutory and common law, by compelling a client to disclose confidential communications. Appellant argues that the lower court erred by focusing only on R.C. 2317.02(A) before deciding that appellant was not protected from an order to disclose the correspondence. Appellant agrees with the lower court that R.C. 2317.02(A) is drafted to apply to situations where attorneys are requested to reveal the content of communications with a client. R.C. 2317.02(A) states:

"The following persons shall not testify in certain respects:

"(A) An attorney, concerning a communication made to him by his client in that relation or his advice to his client, except that the attorney may testify by express consent of the client or, if the client is deceased, by the express consent of the surviving spouse or the executor or administrator of the estate of the deceased client and except that, if the client voluntarily testifies or is deemed by section 2151.421 of the Revised Code to have waived any testimonial privilege under this division, the attorney may be compelled to testify on the same subject * * *."

We also agree that the lower court was correct when it stated: "The language of R.C. 2317.02(A) is clear. It governs testimony by an attorney. It does not govern testimony by the client." (Emphasis sic.) We do not agree with appellant that the lower court's analysis of the issue stopped with its consideration of R.C. 2317.02(A). The lower court clearly considered the attorney-client privilege established by common law when it focused on the issue of whether the communication was intended to be confidential when it occurred and whether any confidentiality had been voluntarily waived by appellant. Accordingly, appellant's first assignment of error alleging that the lower court failed to consider the attorney-client privilege established by common law is not well taken.

Appellant's second assignment of error primarily focuses on the legal interpretation that should be given the two letters which were sent to appellee by appellant. Both letters were sent before appellee filed the complaint alleging bad faith and breach of contract. From the time appellee contacted appellant to inform appellant that appellee had been sued and to request legal counsel pursuant to the insurance policy issued by appellant, an ongoing disagreement developed between appellee and appellant regarding appellant's responsibilities to appellee. A great deal of correspondence was exchanged by attorneys representing appellee in the suit filed against appellee by a third party, and representatives of appellant. At various times appellant agreed to provide representation with a reservation of rights and then reconsidered and insisted it had no obligation under the policy to assist appellee. Eventually, as we have previously noted, the claim brought against appellee was settled. The attorney who represented appellee in the first case then contacted appellant, by letter, and informed appellant of his belief that his client was entitled to coverage under the insurance policy issued by appellant. The attorney further informed appellant that appelle...