Seventh Elect Church in Israel v. Rogers
| Decision Date | 20 September 1984 |
| Docket Number | No. 50082-7,50082-7 |
| Citation | 688 P.2d 506,102 Wn.2d 527 |
| Court | Washington Supreme Court |
| Parties | SEVENTH ELECT CHURCH IN ISRAEL, Respondent, v. Gerald L. ROGERS, Betts, Patterson & Mines, and William P. Fite, Appellants. |
Betts, Patterson & Mines, P.S., Jeffrey Grant, James Solimano, Seattle, for appellants.
Freese & Freese, Inc. P.S., Ralph Freese, Edmonds, Murphy & Elgot, Richard Moore, Seattle, for respondent.
In January 1981, the Seventh Elect Church in Israel (Church) recovered a judgment of approximately $2,500,000 against Gerald L. Rogers and the marital community composed of Gerald L. Rogers and Priscilla A. Rogers. 1 Rogers was the Church's business manager from 1967 to 1976. The 1981 judgment was predicated on a breach of Rogers' fiduciary duty to the Church.
The Church initiated supplemental proceedings pursuant to RCW 6.32 seeking to satisfy the judgment. There have been three other appeals involving Gerald, Priscilla, and their daughter, Gina Rogers, dealing with their refusal to answer questions in supplemental proceedings, claiming the marital privilege and the privilege against self-incrimination. See Seventh Elect Church v. Rogers, 34 Wash.App. 91, 660 P.2d 290 (1983); Seventh Elect Church v. Rogers, 34 Wash.App. 96, 660 P.2d 294 (1983); Seventh Elect Church v. Rogers, 34 Wash.App. 105, 660 P.2d 280 (1983). There have been numerous adjudications of assets fraudulently transferred by Rogers since supplemental proceedings were initiated. Additionally, there are numerous federal and state actions currently pending against Rogers outside of this state.
As provided in RCW 6.32.030, third parties may be brought into supplemental proceedings to answer questions regarding, among other things, their knowledge of the property interests of the judgment debtor. Pursuant to this section, Betts, Patterson & Mines, P.S. (Betts, Patterson) and William P. Fite (a member of Betts, Patterson), attorneys for Gerald Rogers, were requested to answer the following questions pertaining to the amount, source and manner of payment of legal fees paid to them by Rogers:
1. Please produce for inspection and copying all records maintained by Betts, Patterson & Mines reflecting legal fees received by that firm from or on behalf of Gerald L. Rogers or Priscilla A. Rogers.
* * *
3. State the date that each payment was received by Betts, Patterson & Mines from or on behalf of Gerald L. Rogers.
4. Set forth the amount of each payment received by Betts, Patterson & Mines from or on behalf of Gerald L. Rogers.
5. Identify and provide the address of each person or entity remitting payments to Betts, Patterson & Mines on behalf of Gerald L. Rogers.
6. State the form of each payment received by Betts, Patterson & Mines from or on behalf of Gerald L. Rogers (i.e., cash, check, wire transfer, etc.).
7. As to each payment received by Betts, Patterson & Mines from or on behalf of Gerald L. Rogers, identify the bank, branch and account name upon which each payment was drawn.
8. Produce copies of all documents retained by Betts, Patterson & Mines reflecting payments received by that firm from or on behalf of Gerald L. Rogers. If copies of all payments are not available, identify the bank and branch into which Betts, Patterson & Mines deposited same.
Betts, Patterson refused to answer these questions citing the attorney-client privilege. On June 10, 1983, Judge Norman W. Quinn required Betts, Patterson to answer the questions. As part of this order, Judge Quinn required Betts, Patterson to seek immediate appellate review of the applicability of the attorney-client privilege to these questions.
While this appeal was pending, Betts, Patterson was subpoenaed to appear and testify at a related proceeding. At this hearing, the following questions were posed to Mr. Fite:
1. State the total amount of legal fees and costs paid to you and/or the firm of BETTS, PATTERSON & MINES, P.S. by any person or entity on behalf of GERALD L. ROGERS, PRISCILLA A. ROGERS or GINA F. ROGERS;
2. State the total amount of legal fees and costs billed by you and/or the firm of BETTS, PATTERSON & MINES to any person or entity for services rendered on behalf of GERALD L. ROGERS, PRISCILLA A. ROGERS or GINA F. ROGERS;
3. Identify each person or entity which has made payments to you and/or the firm of BETTS, PATTERSON & MINES for legal fees or costs incurred on behalf of GERALD L. ROGERS, PRISCILLA A. ROGERS or GINA F. ROGERS;
4. For each payment made to you and/or the firm of BETTS, PATTERSON & MINES on behalf of GERALD L. ROGERS, PRISCILLA A. ROGERS or GINA F. ROGERS, disclose the person or entity making the payment, the amount of the payment, the date of the payment, and the client on whose behalf the payment was made;
5. For each payment made to you and/or the firm of Betts, Patterson & Mines, P.S. on behalf of GERALD L. ROGERS, PRISCILLA A. ROGERS, or GINA F. ROGERS give a breakdown as to the payments made on behalf of each.
These questions were not answered and were objected to on the grounds that they violated the attorney-client privilege, and that Rogers had expressly directed Betts, Patterson not to answer such questions. On July 18, 1983, Judge Robert E. Dixon approved an order directing Betts, Patterson to answer the questions. Judge Dixon also ruled that Betts, Patterson and Mr. Fite would be held in contempt if they did not answer the questions by July 21, 1983. Betts, Patterson subsequently sought review of the order and a motion for stay was granted. The two appeals are consolidated for review.
Two issues require our consideration: (1) is information concerning the amount, source and manner of payment of legal fees protected by the attorney-client privilege; and (2) may an attorney be found in contempt for refusing to disclose information arguably within the scope of the attorney-client privilege prior to appellate resolution of the issue? In addressing the issue whether information regarding fees is protected by the attorney-client privilege, we first discuss the scope of the statutory privilege and then the scope of the attorney's ethical duty found in the Code of Professional Responsibility.
The statutory attorney-client privilege in Washington is codified under RCW 5.60.060(2), which provides:
An attorney or counselor shall not, without the consent of his client, be examined as to any communication made by the client to him, or his advice given thereon in the course of professional employment.
As a general rule, "the identity of an attorney's clients and the nature of his fee arrangements with his clients are not confidential communications protected by the attorney-client privilege." United States v. Hodge & Zweig, 548 F.2d 1347, 1353 (9th Cir.1977).
Fee arrangements usually fall outside the scope of the privilege simply because such information ordinarily reveals no confidential professional communication between attorney and client, and not because such information may not be incriminating.
In re Osterhoudt, 722 F.2d 591, 593 (9th Cir.1983). See
also In Re Witnesses Before Special March 1980 Grand Jury, 729 F.2d 489 (7th Cir.1984). The consultations for which the fees were charged are protected by the privilege, and they will remain privileged despite a requirement that the amount, source and manner of payment of the fee be disclosed.
There is, however, an important exception to this general rule which bars disclosure "where the person invoking the privilege can show that a strong probability exists that disclosure of such information would implicate that client in the very criminal activity for which legal advice was sought." Hodge & Zweig, at 1353. Appellants contend the exception applies in this case.
Betts, Patterson does not represent Rogers in any criminal actions; therefore, it does not appear that disclosure of fee information would implicate Rogers in "the very criminal activity for which legal advice was sought." Nevertheless, Betts, Patterson argues that the requisites of the privilege are met whenever evidence regarding the fees paid would implicate the client in any pending criminal matters. They argue that much of their legal advice rendered in this civil case was in light of potential criminal exposure to Rogers resulting from positions taken, testimony given, and arguments made here. They also contend that had Rogers chosen Betts, Patterson to represent him in all of the pending criminal cases, in addition to this civil case, the requisites of the "legal advice" exception to the general rule would be met.
The modern formulation of the "legal advice" exception is found in Baird v. Koerner, 279 F.2d 623 (9th Cir.1960). Appellants' argument that their case fits within the exception seems to be based on a misreading of Baird.
In Baird the client had engaged the lawyer for advice in tax matters and, on the attorney's recommendation, had anonymously paid delinquent taxes through the attorney. The government sought disclosure of the client's name from the attorney. In its holding that the attorney-client privilege protected the client's name from disclosure, the court quoted with approval the following passage:
"The name of the client will be considered privileged matter where the circumstances of the case are such that the name of the client is material only for the purpose of showing an acknowledgment of guilt on the part of such client of the very offenses on account of which the attorney was employed ..."
Baird, at 633 (quoting 97 C.J.S. Witnesses § 283e (1957)).
In Baird, the identity of the client was part of the privileged communication between the attorney and client. The principle of Baird was not that the privilege applied because the identity of the client was incriminating, but because in the circumstances of the case disclosure of the identity of the client was in substance a...
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