Nationwide Mut. Ins. Co. v. Fleming

• Decision Date: 21 May 2007
• Docket Number: No. 207 WDA 2005.,207 WDA 2005.
• Citation: 924 A.2d 1259
• Court: Pennsylvania Superior Court
• Parties: NATIONWIDE MUTUAL INSURANCE COMPANY, Nationwide Mutual Fire Insurance Company, Nationwide General Insurance Company, Nationwide Property & Casualty Insurance Company and Colonial Insurance Company of Wisconsin F.K.A. Colonial Insurance Company of California, Appellants v. John FLEMING, Joshua Meeder, Meeder Fleming & Associates, Inc., Moraine Group, Inc., Mary Lou Fleming, Andrea Meeder, Robert Dean, John Williams, Barbara Reddick, Ray Kooser, Sandy Kooser, David Colley, Connie Taylor, Michele Daugherty, Lon Mcallister, and Lon McAllister Agency, Appellees.

924 A.2d 1259

NATIONWIDE MUTUAL INSURANCE COMPANY, Nationwide Mutual Fire Insurance Company, Nationwide General Insurance Company, Nationwide Property & Casualty Insurance Company and Colonial Insurance Company of Wisconsin F.K.A. Colonial Insurance Company of California, Appellants v. John FLEMING, Joshua Meeder, Meeder Fleming & Associates, Inc., Moraine Group, Inc., Mary Lou Fleming, Andrea Meeder, Robert Dean, John Williams, Barbara Reddick, Ray Kooser, Sandy Kooser, David Colley, Connie Taylor, Michele Daugherty, Lon Mcallister, and Lon McAllister Agency, Appellees.

No. 207 WDA 2005.

Superior Court of Pennsylvania.

Argued September 20, 2006.

Filed May 21, 2007.

Lee A. Montgomery, Butler, for Nationwide, appellant.

Robert O. Lampl, Pittsburgh, for Fleming, appellee.

BEFORE: TODD, BENDER and McCAFFERY, JJ.

OPINION BY McCAFFERY, J.:

¶ 1 Appellants, Nationwide Mutual Insurance Company and related entities (collectively "Nationwide"), appeal from the trial court order requiring production of a document that Nationwide claims is protected from disclosure by attorney-client privilege. Nationwide specifically asks us to determine whether the trial court erred in finding that Nationwide had waived attorney-client privilege with respect to this document via production of two other documents pertaining to the same subject matter. After careful review of the certified record and the applicable law, we conclude that the trial court did indeed err in finding subject matter waiver applicable to the document in question. However, we also conclude that the document is not protected by attorney-client privilege. Hence, we affirm, although on grounds different from those on which the trial court based its decision.

¶ 2 The facts and procedural history underlying this appeal are as follows. Nationwide brought an action sounding in breach of contract and intentional interference with contractual relations against Appellees, who are former Nationwide agents and their respective insurance agencies. Specifically, Nationwide alleged that Appellees accessed confidential policyholder information from Nationwide's internal computer system and then provided that information to Nationwide's competitors. In response, Appellees argued that their agreement with Nationwide permitted post-termination competition and that Nationwide did not maintain any proprietary interest in policyholder information. Furthermore, Appellees brought a counterclaim, in which they alleged, inter alia, that Nationwide's claim had been brought in bad faith. A bench trial commenced on January 10, 2005, before the Honorable Thomas J. Doerr.

¶ 3 On the second day of trial, defense counsel questioned Galen Barnes, the president of Nationwide from 1999 until 2003, with respect to several Nationwide documents which had been produced during discovery, including a memorandum labeled "Document No. 529" (hereinafter Document 529). Nationwide had asserted that this document was protected by attorney-client privilege, and therefore had redacted the entire substantive text, although the author, recipient list, date, and subject line of the memorandum were disclosed. Document 529 was written on July 29, 1999, by Tom Dietrich, who was a member of Nationwide's general counsel's office. It was sent to a total of 15 individuals, all of whom appear to have been Nationwide officers, managers, or attorneys. The subject line of Document 529 read "Agent Defections." Appellees moved the court to review the document in camera and determine if it had been properly classified as protected under attorney-client privilege. (Notes of Testimony ("N.T."), January 11, 2005, at 87).

¶ 4 At Judge Doerr's request, another judge, the Honorable S. Michael Yeager, conducted a hearing and examined Document 529 in camera to determine if it was protected from discovery by attorney-client privilege, as asserted by Nationwide. At the hearing, Appellees argued that, even if Document 529 satisfied the criteria for protection under attorney-client privilege, Nationwide had waived the privilege with respect to this document by voluntarily having disclosed two other privileged documents on the subject of agent defection, specifically, Documents 314 and 395. In other words, in Appellees' view, Nationwide was attempting to use the attorney-client privilege as "both a sword and a shield" by selectively disclosing privileged documents on the subject of agent defections that were favorable to its position, while withholding as privileged those documents that were unfavorable. (Appellees' Brief at 3). Such selective disclosure is improper and, Appellees argued, should result in Nationwide's waiver of attorney-client privilege for all documents dealing with the same subject matter, including Document 529.

¶ 5 In response to Appellees' advancement of a subject matter waiver argument, Nationwide took the position that Documents 314 and 395 were not protected from disclosure under attorney-client privilege because they were merely routine business communications devoid of any confidential communications made by Nationwide for the purpose of obtaining legal advice. Therefore, Nationwide argued, disclosure of these documents could not, as a matter of law, waive attorney-client privilege with respect to Document 529, even though the subject matter of all the documents was similar.

¶ 6 Judge Yeager did not accept Nationwide's arguments and held that by having voluntarily produced Documents 314 and 395, Nationwide had waived attorney-client privilege with respect to Document 529. More specifically, Judge Yeager determined that Nationwide had improperly attempted to use attorney-client privilege as a sword as well as a shield by disclosing communications on the topic of agent defection that furthered its efforts in the on-going litigation, while attempting to withhold other documents on the same subject. Therefore, Judge Yeager held, Document 529 was discoverable. (Trial Court Opinion, dated February 16, 2005, at 4).

¶ 7 Nationwide appealed Judge Yeager's ruling to our Court, and also asked the trial court for a stay during the pendency of the appeal. The stay was granted. Appellees then filed a motion to quash for lack of appellate jurisdiction, which this Court granted on September 19, 2005. Nationwide successfully petitioned for allowance of appeal. Our Supreme Court vacated the quashal and remanded the matter to this Court.

Nationwide now raises the following two issues for our consideration:

I. Whether the lower court erred in concluding that two documents produced by Nationwide to Appellees during discovery were privileged attorney-client communications and, by their production, Nationwide waived the attorney[]client privilege as it applies to an undisputedly privileged document.

II. Whether the lower court erred by invoking the subject matter waiver doctrine to compel Nationwide's production to Appellees of an undisputedly privileged document.

(Nationwide's Brief at 4).

LEGAL PRINCIPLES

¶ 8 Whether attorney-client privilege protects a particular communication from disclosure is a question of law. In re Estate of Wood, 818 A.2d 568, 571 (Pa.Super.2003), appeal denied, 584 Pa. 696, 882 A.2d 479 (2005). For any question of law our standard of review is de novo and our scope is plenary. Kopko v. Miller, 586 Pa. 170, 177, 892 A.2d 766, 770 (2006).

¶ 9 The attorney-client privilege has deep historical roots and indeed is the oldest of the privileges for confidential communications in common law. See Upjohn Co. v. United States, 449 U.S. 383, 389, 101 S.Ct. 677, 66 L.Ed.2d 584 (1981). It is designed to foster confidence between attorney and client, leading to a trusting, open dialogue. Slusaw v. Hoffman, 861 A.2d 269, 273 (Pa.Super.2004); Estate of Wood, supra at 571. The privilege derives from the recognition that full and frank communication between attorney and client is necessary for sound legal advocacy and advice, which serve the broader public interests of "observance of law and administration of justice." Upjohn Co., supra at 389, 101 S.Ct. 677.

¶ 10 In Pennsylvania, the attorney-client privilege is codified under the following statute:

Confidential communications to attorney

In a civil matter counsel shall not be competent or permitted to testify to confidential communications made to him by his client, nor shall the client be compelled to disclose the same, unless in either case this privilege is waived upon the trial by the client.

42 Pa.C.S.A. § 5928.

¶ 11 Pursuant to this statute, four elements must be satisfied in order to successfully invoke the protections of attorney-client privilege:

1) The asserted holder of the privilege is or sought to become a client.

2) The person to whom the communication was made is a member of the bar of a court, or his subordinate.

3) The communication relates to a fact of which the attorney was informed by his client, without the presence of strangers, for the purpose of securing either an opinion of law, legal services or assistance in a legal matter, and not for the purpose of committing a crime or tort.

4) The privilege has been claimed and is not waived by the client.

Commonwealth v. Mrozek, 441 Pa.Super. 425, 657 A.2d 997, 998 (1995) (citation omitted); see also Rhone-Poulenc Rorer, Inc. v. Home Indemnity Co., 32 F.3d 851, 862 (3d Cir.1994) (reciting the same elements in an application of Pennsylvania law on attorney-client privilege).

¶ 12 In sum, under our statutory and decisional law, attorney-client privilege protects from disclosure only those communications made by a client to his or her attorney which are confidential and made in connection with the providing of legal services or advice. Slusaw, supra at 273; Estate of Wood, supra at 571.

¶ 13 The privilege extends to communications from an attorney to his or her client if and only if the communications fall within the general statutory definition. Under Section 5928, counsel...