Pappas v. Holloway

• Decision Date: 01 March 1990
• Docket Number: No. 56061-7
• Citation: Pappas v. Holloway, 787 P.2d 30, 114 Wn.2d 198 (Wash. 1990)
• Court: Washington Supreme Court
• Parties: , 58 USLW 2634 John D. PAPPAS, Respondent, v. Harold HOLLOWAY and Rosemarie Holloway, and the marital community composed thereof, and Douglas R. Shepherd and Jane Doe Shepherd, husband and wife, Joseph C. Abbott and Jane Doe Abbott, husband and wife, d/b/a Shepherd & Abbott, a partnership; George W. McCush and Jane Doe McCush, husband and wife, Burton A. Kingsbury and Jane Doe Kingsbury, husband and wife, Edward B. O'Connor and Jane Doe O'Connor, husband and wife, John S. Ludwigson and Jane Doe Ludwigson, husband and wife, James P. "Casey" Thompson and Jane Doe Thompson, husband and wife, Craig P. Hayes and Jane Doe Hayes, husband and wife, d/b/a McCush, Kingsbury, O'Connor, Ludwigson, Thompson & Hayes, a partnership; J.T. Moore and Jane Doe Moore, husband and wife, Laurel L. Tiller and John Doe Tiller, wife and husband, Larry W. Fagerness and Jane Doe Fagerness, husband and wife, Marc Wheeler and Jane Doe Wheeler, husband and wife, d/b/a Moore, Tiller, Fagerness & Wheeler, a partnership; Grange Insurance Association, Petitioners.

Page 198

114 Wn.2d 198

787 P.2d 30, 58 USLW 2634

John D. PAPPAS, Respondent, v. Harold HOLLOWAY and Rosemarie Holloway, and the marital community composed thereof, and Douglas R. Shepherd and Jane Doe Shepherd, husband and wife, Joseph C. Abbott and Jane Doe Abbott, husband and wife, d/b/a Shepherd & Abbott, a partnership; George W. McCush and Jane Doe McCush, husband and wife, Burton A. Kingsbury and Jane Doe Kingsbury husband and wife, Edward B. O'Connor and Jane Doe O'Connor husband and wife, John S. Ludwigson and Jane Doe Ludwigson husband and wife, James P. "Casey" Thompson and Jane Doe Thompson, husband and wife, Craig P. Hayes and Jane Doe Hayes, husband and wife, d/b/a McCush, Kingsbury, O'Connor Ludwigson, Thompson & Hayes, a partnership; J.T. Moore and Jane Doe Moore, husband and wife, Laurel L. Tiller and John Doe Tiller, wife and husband, Larry W. Fagerness and Jane Doe Fagerness, husband and wife, Marc Wheeler and Jane Doe Wheeler, husband and wife, d/b/a Moore, Tiller, Fagerness & Wheeler, a partnership; Grange Insurance Association, Petitioners.

No. 56061-7.

Supreme Court of Washington, En Banc.

March 1, 1990.

Edwards & Barbieri, Malcolm L. Edwards, Catherine Wright Smith, Danielson, Harrigan, Smith & Tollefson, David Strout, Seattle, for petitioners.

Petersen, Lycette & Snook, P.S., John P. Lycette, Jr., Janet Lim, Seattle, for respondent.

DOLLIVER, Justice.

During the late 1970s, defendants Harold and Rosemarie Holloway sold cattle infected with brucellosis through their dealership in Lewis County. In 1978, 1980, and 1981, lawsuits were filed against them by purchasers of the diseased cattle. Initially these suits were filed in Lewis and Whatcom Counties. Later, they were consolidated into one action filed in Whatcom County.

The Holloways employed several attorneys to defend them in connection with the several suits filed. Soon after the first suit was filed in Lewis County in 1978, the Holloways hired Larry Fagerness and the firm of Moore, Tiller, Fagerness and Wheeler to defend them. Mr. Fagerness' representation continued until the Lewis County cases were consolidated with the Whatcom County cases in 1982. In September 1981, the Holloways hired plaintiff John Pappas in connection with the Whatcom County suits. When all the suits were consolidated in June 1982, Pappas took over representation of the entire matter. In September 1983, James Thompson commenced joint representation of the Holloways with Pappas. Grange Insurance Association, which issued an insurance policy to the Holloways in the event of an adverse judgment against them, paid Mr. Thompson's attorney fees. Mr. Thompson's representation continued throughout the trial, appeal, and eventual settlement of the case.

In April 1984, 1 month before the consolidated action went to trial, Pappas withdrew as the Holloways' attorney. Pappas obtained court permission to do so. Shortly before Pappas' withdrawal, the Holloways hired Douglas Shepherd of Shepherd and Abbott to assist Mr. Thompson in bringing the case to trial. Grange Insurance Association also paid Mr. Shepherd's fees. The trial resulted in an adverse judgment totaling approximately $2.9 million against the Holloways. The case was appealed and Grange Insurance Association eventually agreed to pay $1.5 million for the full settlement of all claims against the Holloways.

In April 1984, Pappas sued the Holloways for his attorney fees which totaled approximately $19,000. The Holloways counterclaimed, alleging Pappas committed malpractice. The specific allegations against Pappas included his: (1) failure to perform a full investigation of the Whatcom County cases; (2) failure to interview and designate expert witnesses; (3) failure to conduct an investigation through the discovery process; (4) failure to analyze properly critical insurance issues and to tender timely defense of the matter to Grange Insurance; (5) failure to prepare and present a summary judgment motion on the issue of strict liability; (6) withdrawal as counsel 1 month before trial; and (7) failure to conduct investigation through the discovery process resulting in the loss of documentary evidence.

Pappas responded to the Holloways' counterclaim by bringing third-party complaints against all the attorneys who also represented the Holloways in the brucellosis litigation, alleging they owed the Holloways a duty of care which they breached. Pappas also included Grange Insurance Association as a third-party defendant under a theory of bad faith.

Pappas' specific allegations against third-party defendants are set out below in some detail. Against Mr. Fagerness and Mr. Thompson, Pappas' claims include their failure to conduct prompt and necessary pretrial discovery resulting in the loss of documents pertinent to the Holloways' defense and their failure promptly and properly to investigate the Holloways' insurance coverage. Against Mr. Thompson and Mr. Shepherd, Pappas' claims include their failure to obtain a continuance of the trial date in the brucellosis litigation, failure properly to handle the damages aspect of the litigation and failure properly to use the pretrial materials obtained and prepared by Pappas. Against Mr. Fagerness only, Pappas alleges he failed to tender defense of the brucellosis litigation to the Holloways' insurance carrier. Against Mr. Thompson only, Pappas' claims include his failure to investigate every aspect of the Holloways' defense and failure to prepare a motion for summary judgment on the issue of strict liability. Against Mr. Shepherd only, Pappas alleges he failed to conduct proper discovery, to contact Pappas in conjunction with the litigation pending in Lewis County, and to seek assistance from Pappas although assistance was offered.

In August 1987, Pappas filed a motion to compel third-party defendants to produce documents relating to insurance coverage, a declaratory judgment filed in the brucellosis litigation, fee arrangements between the Holloways and third-party defendants, consolidation of the actions and the subsequent appeal of the adverse final judgment, and correspondence received from the states of Washington and Idaho pertaining to the brucellosis litigation. The third-party defendants objected to production of the following materials on the basis they are protected by the attorney-client privilege: (1) correspondence between any of the attorneys to the Holloways; (2) correspondence from the Holloways to their attorneys or to Grange Insurance Association; and (3) any notes made by the lawyers during conversations with the Holloways. Discovery of the following documents was objected to based on the work-product doctrine: (1) lawyer's notes taken during depositions; (2) lawyer's notes and trial memoranda containing the mental impressions, opinions, and legal theories of the attorneys; and (3) legal memoranda prepared during the course of the litigation.

After oral argument on the motion to compel, the trial court granted Pappas' motion. In ordering production, the court concluded the Holloways waived the attorney-client privilege as to all the attorneys who participated in the brucellosis litigation when they sued Pappas for malpractice. The court also held the work-product doctrine did not protect materials prepared in the course of the brucellosis litigation since that litigation had already terminated.

The Court of Appeals denied review of the trial court's ruling. We granted review and affirm, although in part for reasons other than those set forth by the trial court.

We turn first to the issue raised by the attorney-client privilege. RCW 5.60.060(2) provides the rule in Washington:

An attorney or counselor shall not, without the consent of his or her client, be examined as to any communication made by the client to him or her, or his or her advice given thereon in the course of professional employment.

This same privilege afforded the attorney is also extended to the client under the common law rule. State v. Emmanuel, 42 Wash.2d 799, 815, 259 P.2d 845 (1953) (citing State v. Ingels, 4 Wash.2d 676, 104 P.2d 944, cert. denied, 311 U.S. 708, 61 S.Ct. 318, 85 L.Ed. 460 (1940)).

The Holloways raise two central arguments why they believe the trial court erred in finding the attorney-client privilege waived as to the third-party defendants. First, they argue the right to waive the attorney-client privilege is a personal right which belongs to the client exclusively. Although they concede they waived the privilege between themselves and Pappas by counterclaiming for malpractice, they argue this waiver should not automatically extend to include the third-party defendants as well. Second, they argue the information Pappas is seeking is irrelevant to his malpractice defense. What is relevant, they argue, is what actually happened rather than what should have happened. This information, they allege, is available to Pappas through the public record.

The purpose of the attorney-client privilege " 'is to encourage free and open attorney-client communication by assuring the client that his communications will be neither directly nor indirectly disclosed to others.' " Heidebrink v. Moriwaki, 104 Wash.2d 392, 404, 706 P.2d 212 (1985) (quoting State v. Chervenell, 99 Wash.2d 309, 316, 662 P.2d 836 (1983)); see also State ex rel. Sowers v. Olwell, 64 Wash.2d 828, 394 P.2d 681, 16 A.L.R.3d 1021 (1964). The attorney-client privilege applies to communications and advice between an attorney and client and extends to documents which contain a privileged communication. Kammerer v. Western Gear Corp., 27 Wash.App. 512, 517-18, 618 P.2d 1330 (1980), aff'd, 96 Wash.2d 416, 635 P.2d 708 (1981). Because the privilege sometimes results in the exclusion of evidence which is otherwise relevant and material, contrary to the philosophy that justice can be achieved only with the fullest disclosure of the facts, the privilege cannot be treated as absolute; rather, it must...