Priest v. Hennessy

• Citation: 409 N.E.2d 983,431 N.Y.S.2d 511,51 N.Y.2d 62
• Parties: , 409 N.E.2d 983 In the Matter of Richard D. PRIEST et al., Appellants, v. Richard A. HENNESSY, Jr., as District Attorney of Onondaga County, Respondent.
• Decision Date: 08 July 1980
• Court: New York Court of Appeals Court of Appeals

Page 511

431 N.Y.S.2d 511

51 N.Y.2d 62, 409 N.E.2d 983

In the Matter of Richard D. PRIEST et al., Appellants, v. Richard A. HENNESSY, Jr., as District Attorney of Onondaga

County, Respondent.

Court of Appeals of New York.

July 8, 1980.

Joseph E. Fahey, Syracuse, for appellants

Richard A. Hennessy, Jr., Dist. Atty. (John A. Cirando and Gail N. Uebelhoer, Asst. Dist. Attys., of counsel), respondent pro se.

OPINION OF THE COURT

JASEN, Judge.

This case involves an ongoing Grand Jury investigation of prostitution in Onondaga County. During the course of this investigation, several women testified before the Grand Jury concerning their involvement in prostitution between 1975 and the present. Petitioners Richard D. Priest and George M. Raus are attorneys who had represented some of these witnesses on various occasions during this time period. The Grand Jury seeks to obtain information regarding the nature of the fee arrangements between petitioners, their former clients and any third party who may have retained them to appear for the prostitutes. The issue on this appeal is whether petitioners properly refused to answer the questions posed by the Grand Jury upon the ground that such questions seek to inquire into matters protected by the attorney-client privilege.

On January 18, 1980, petitioners were served with Grand Jury subpoenas duces tecum which required them to provide the Grand Jury with "any and all records of amounts billed and payments made for services rendered to (various prior clients) including fee arrangements and retainer agreements from January 1975 to present." On January 22, 1980, Onondaga County Court issued an order to show cause why such subpoenas should not be declared void and ordered a hearing. At the hearing, petitioners contended that the fee arrangements between petitioners and their former clients were privileged and that they should not be compelled to disclose such information. The court, however, refused to quash the subpoenas and ordered petitioners to appear before the Grand Jury.

On January 28, 1980, petitioners testified before the Grand Jury that although they had represented certain named individuals, they kept no written records of fees charged or payments made on behalf of these clients. They further testified that they had no set fee which they required for an appearance and that when they were paid at all they were usually paid in cash. Petitioners were then asked whether any third party had ever made payments of behalf of the named clients. Raus testified that a third party might possibly have made such payments, but he refused to disclose the identity of any such party. Priest refused to discuss the subject of third-party payments altogether.

Faced with petitioners' refusal to testify further, the Grand Jury formulated several specific questions regarding third-party payments and requested that the Onondaga County Court order petitioners to appear and respond to the inquiry. By order dated February 5, 1980, the court required petitioners to appear before the Grand Jury and to answer the following questions:

"1. What written or oral agreement (was made) regarding fees existing between Mr. Priest and Mr. Raus and the named clients or between Mr. Priest or Mr. Raus and any third party on behalf of the named clients, and who were the third parties.

"2. Were payments for legal services on behalf of the named clients made by any third parties or by the clients themselves which are not identified in any records of Mr. Priest or Mr. Raus, (and) who were the third parties."

Thereafter, the court issued judicial subpoenas to effectuate its order.

On February 11, 1980, petitioners moved to quash these judicial subpoenas, arguing that the testimony sought to be adduced was protected by the attorney-client privilege and that the constitutional rights of the third-party payor would be infringed if petitioners were required to respond. Oral argument was heard on petitioners' application on February 15, 1980; and on February 26, 1980, County Court quashed its own subpoenas.

On appeal, the Appellate Division unanimously reversed the County Court's order and denied petitioners' motion. The court found that there was insufficient evidence in the record to support petitioners' claim that an attorney-client relationship existed between themselves and the unnamed third party which they sought to protect and noted that even if such a relationship had been demonstrated, the payment of legal fees on behalf of another is not a confidential communication within the scope of the attorney-client privilege. There should be an affirmance.

This case presents a unique factual pattern not heretofore examined by this court. At first blush, the questions posed by the Grand Jury appear to be an inquiry solely into the fee arrangements between attorneys Priest and Raus and various clients accused of prostitution-related offenses. Normally, the question whether the attorney-client privilege should prevent disclosure of such fee arrangements, including payments, if any, made by a third party, would entail an examination of the scope of the privilege as it applies to the attorneys and the parties they represented. In this case, however, petitioners allege that the third-party benefactor of the criminal defendants which they represented was also their client. Thus, the case actually presents three distinct questions, to wit: (1) whether the fee arrangements may be shielded from disclosure on the strength of the privilege surrounding the attorney-client relationship between petitioners and the women they represented; (2) whether such disclosure is barred by the privilege which surrounds the attorney-client relationship arising out of any prior representation of the third party; and (3) whether a separate attorney-client relationship was created between the attorneys and their clients' benefactor upon the payment of legal fees which is itself deserving of the protection of the attorney-client privilege. Although the factual situation presenting these questions is novel, we believe that each may be answered by applying the analysis traditionally used to test the scope of the privilege.

The attorney-client privilege is, in this State, a creature of statute. (CPLR 4503, subd. (a).) ¹ It exists to ensure that one seeking legal advice will be able to confide fully and freely in his attorney, secure in the knowledge that his confidences will not later be exposed to public view to his embarrassment or legal detriment. (See, e. g., Matter of Jacqueline F., 47 N.Y.2d 215, 218, 417 N.Y.S.2d 884, 391 N.E.2d 967; Hurlburt v. Hurlburt, 128 N.Y. 420, 424, 28 N.E. 651, see, also, 8 Wigmore, Evidence (McNaughton rev. 1961), § 2291 (hereinafter Wigmore); Richardson, Evidence (10th ed.), § 410.) The privilege, however, is not limitless. It has long been recognized that "the attorney-client privilege constitutes an 'obstacle' to the truth-finding process, the invocation of which should be cautiously observed to ensure that its application is consistent with its purpose." (Matter of Jacqueline F., 47 N.Y.2d 215, 219, 417 N.Y.S.2d 884, 887, 391 N.E.2d 967, 969, supra ; see, also, Matter of Horowitz, 2 Cir., 482 F.2d 72, 81-82; Matter of Field, D.C., 408 F.Supp. 1169, 1173; 5 Weinstein-Korn-Miller, N.Y.Civ.Prac., par. 4503.19, p. 45-148; 8 Wigmore, § 2291, p. 554.)

Defining the limits of the privilege is, of course, not an easy task. Although several enlightening general statements of the scope of privilege appear in the cases and the treatises (see, e. g., United States v. United Shoe Mach. Corp., D.C., 89 F.Supp. 357, 358-359; United States v. Stern, 2 Cir., 511 F.2d 1364, 1367; 8 Wigmore, § 2292), no clear rule of general application can be simply articulated. Indeed, as we have often observed, " 'much ought to depend on the circumstances of each case'." (See Matter of Jacqueline F., 47 N.Y.2d 215, 222, 417 N.Y.S.2d 884, 888, 391 N.E.2d 967, 971, supra ; and Matter of Kaplan (Blumenfeld), 8 N.Y.2d 214, 219, 203 N.Y.S.2d 836, 168 N.E.2d 660, quoting 8 Wigmore (5th ed.), § 2313, p. 609.) However, there are some general principles relevant to this case by which our analysis may be guided.

First, it is beyond dispute that no attorney-client privilege arises unless an attorney-client relationship has been established. Such a relationship arises only when one contacts an attorney in his capacity as such for the purpose of obtaining legal advice or services. (CPLR 4503, subd. (a); see, e. g., People v. Belge, 59 A.D.2d 307, 309, 399 N.Y.S.2d 539; United States v. United Shoe Mach. Corp., D.C., 89 F.Supp. 357, 358-359, supra ; 8 Wigmore, § 2292.) Second, not all communications to an attorney are privileged. In order to make a valid claim of privilege, it must be shown that the information sought to be protected from disclosure was a "confidential communication" made to the attorney for the purpose of obtaining legal advice or services. (Matter of Jacqueline F., 47 N.Y.2d 215, 219, 417 N.Y.S.2d 884, 391 N.E.2d 967, supra; People ex rel. Vogelstein v. Warden of County Jail of County of N. Y., 150 Misc. 714, 717-718, 270 N.Y.S. 362; 8 Wigmore, § 2292.) Third, the burden of proving each element of the privilege rests upon the party asserting it. (Matter of Gavin, 39 A.D.2d 626, 628, 331 N.Y.S.2d 188; Matter of Grand Jury Empanelled Feb. 14, 1978, 3 Cir., 603 F.2d 469, 474.) Finally, even where the technical requirements of the privilege are satisfied, it may, nonetheless, yield in a proper case, where strong public policy requires disclosure. (Matter of Jacqueline, F., 47 N.Y.2d 215, 417 N.Y.S.2d 884, 391 N.E.2d 967, supra; People ex rel. Vogelstein v. Warden of County Jail of County of N. Y., 150 Misc. 714, 270 N.Y.S. 362, supra.) Applying these principles to the case before us, we conclude that no claim of privilege can be made herein.

Although petitioners do not press this point, we note that they may not assert a...