Southern Guar. Ins. Co. of Georgia v. Ash

• Decision Date: 01 June 1989
• Docket Number: No. A89A0447,A89A0447
• Citation: 383 S.E.2d 579,192 Ga.App. 24
• Parties: SOUTHERN GUARANTY INSURANCE COMPANY OF GEORGIA v. ASH et al.
• Court: Georgia Court of Appeals

Page 579

383 S.E.2d 579

192 Ga.App. 24

SOUTHERN GUARANTY INSURANCE COMPANY OF GEORGIA v. ASH et al.

No. A89A0447.

Court of Appeals of Georgia.

June 1, 1989.

Rehearing Denied June 21, 1989.

Darroch & Obenshain, Robert M. Darroch, Mark A. Barber, Atlanta, for appellant.

Jordan & Bonder, H. Garold Jordan, Atlanta, for appellees.

BIRDSONG, Judge.

This is an interlocutory appeal of a discovery order. This appeal concerns the scope of the attorney-client privilege between a corporate client and its counsel, and the distinction between legal and business advice.

The order pertinently requires "[t]he [appellant] produce all correspondence, letters, newsletters and directives from its attorneys which are of a general nature, directing and advising the insurance company in the day to day business of handling no-fault or PIP claims. The [appellant] shall also produce all letters, newsletters, and other documents from its attorneys which are used by the [appellant's] adjustors in the day to day business of handling, processing and adjusting no-fault or PIP claims.... The [appellant] is not required to produce correspondence or letters from its attorneys which are directed to specific cases pending in which Southern General Insurance Company of Georgia or its insureds are parties."

Appellant asserts that the order erroneously compels production of documents clearly protected by attorney-client privilege, and that the trial court has required production of certain materials prepared by counsel, at appellant's specific request, for the purpose of providing legal advice.

Appellee asserts that the scope of protection provided by the attorney-client privilege to an attorney's advice to his client is controlled by Marriott Corp. v. American Academy, etc., 157 Ga.App. 497, 277 S.E.2d 785. Although Marriott establishes a five-part test, which is controlling in determining whether certain communications from a corporate client to counsel are protected by the attorney-client privilege, it is not applicable to those situations concerning the protection of an attorney's advice given to his corporate client. The latter situation is governed by long-standing, express statutory provisions of this state.

In Upjohn Co. v. United States, 449 U.S. 383, 393, 101 S.Ct. 677, 66 L.Ed.2d 584, the Supreme Court observed that "if the purpose of the attorney-client privilege is to be served, the attorney and client must be able to predict with some degree of certainty whether particular discussions will be protected. An uncertain privilege, or one which purports to be certain but results in widely varying applications by the courts, is little better than no privilege at all." We will apply this philosophy in resolution of this issue to the extent that existing statutory law permits. "A proper application of the privilege ... requires a bright line in order to reassure attorneys and corporate managers of the secrecy of their communications." Waldman, Beyond Upjohn: The Attorney-Client Privilege in the Corporate Context, 28 William & Mary Law Rev. 473, 483.

"Our Code recognizes certain privileges, including the attorney-client privilege, and prohibits the evidentiary use of communications protected by the privilege. See OCGA §§ 24-9-21; 24-9-24 and 24-9-25." Williams v. State, 258 Ga. 281(5), 368 S.E.2d 742. "Parties may obtain discovery regarding any matter, not privileged, which is relevant to the subject matter involved in the pending action." (Emphasis supplied.) OCGA § 9-11-26(b)(1); Morton v. Gardner, 242 Ga. 852, 857, 252 S.E.2d 413.

It has been said, and not without cause, that "[t]he exact nature of matters within the attorney-client relationship in the Georgia law is in a state of hopeless confusion." Agnor, Use of Discovery under the Ga. Civil Practice Act (3rd ed.), § 2-20. There are four primary statutes that address the attorney-client privilege, and three of these statutes can be traced directly to the Code of 1860. It has been asserted "[t]hese statutes are at the center of a confusing and indefinite picture of the attorney-client privilege in Georgia." Milich, The Attorney-Client Privilege: The Common Law & Ga.'s Uncommon Statutes, 5 Ga.State Law Rev. 27, 36. We do not attempt today to unravel this so-called web of confusion, rather we seek to establish a relatively "bright-line" test, consistent with the century-old statutes of this state.

OCGA § 24-9-21 pertinently provides: "There are certain admissions and communications excluded on grounds of public policy. Among these are ... (2) Communications between attorney and client...."

OCGA § 24-9-24 pertinently provides: "Communications to any attorney ... pending his employment or in anticipation thereof shall never be heard by the court. The attorney shall not disclose the advice or counsel he may give to his client, nor produce or deliver up ... other papers, except evidences of debt left in his possession by his client. This Code section shall not exclude the attorney as a witness to any facts which may transpire in connection with his employment." (Emphasis supplied.)

OCGA § 24-9-25 provides statutory direction, not here applicable, regarding when an attorney may testify for or against his client. Although we have no reservations regarding the general legal principles therein expressed, we find the facts of Gilbert v. State, 169 Ga.App. 383, 313 S.E.2d 107, Buffington v. McClelland, 130 Ga.App. 460(3), 203 S.E.2d 575, and Parker v. Wellons, 43 Ga.App. 721, 160 S.E. 109 distinguishable from this case. Likewise, Clarkson Indus. v. Price, 135 Ga.App. 787, 218 S.E.2d 921, involving "work product" exception, is distinguishable.

OCGA § 24-9-27(c) provides: "No party or witness shall be required to make discovery of the advice of his professional advisers or his consultation with them." (Emphasis supplied.)

It has been suggested that "[t]o the extent these three privilege statutes [OCGA §§ 24-9-21; 24-9-24; 24-9-27] are inconsistent with common law doctrine, the courts can and should ignore them." Milich, 5 Ga.State Univ.Law Rev., supra at 74. However, these statutes are part of the modernized recodification of Georgia laws and should be accorded full force and effect until revised or revoked. See OCGA §§ 1-1-1; 1-1-2. Moreover, "statutory privileges of counsel are conferred for the benefit of clients and are sacred." (Emphasis supplied.) 2 EGL, Attorney & Client, § 52, citing Dover v. Harrell, 58 Ga. 572.

In 1887, the Supreme Court in Fire Assn. of Philadelphia v. Fleming, 78 Ga. 733(3), 3 S.E. 420, held that "[l]etters written between the attorney and the agent of a corporation, which was his client, containing confidential communications between the two, should not have been forced to be produced for use in evidence against the client." (Emphasis supplied.) The court also opined that pursuant to Code § 3798, currently OCGA § 24-9-24, a letter from the attorney to the agents of his client containing confidential communications and asking for instructions in reference to the case, was inadmissible against such client. Id. at 738(6), 3 S.E. 420. In Rylee v. Bank of Statham, 7 Ga.App. 489(1)(a), 67 S.E. 383, this court held that the contents of a letter written by an attorney to his client were privileged, "in so far as any information or advice communicated by [the attorney] to his client is concerned." Id. at 492, 67 S.E. 383. In Braxley v. State, 17 Ga.App. 196, 86 S.E. 425, this court, citing Code §§ 5785 and 5786 (OCGA §§ 24-9-21; 24-9-24), held that the trial court "should have declined to hear from the client any testimony as to communications or advice imparted to him by his counsel during the relationship" on grounds of public policy. Id. at 203, 86 S.E. 425; see Miles v. State, 100 Ga.App. 614, 616(2), 112 S.E.2d 237 (recognizing that Code § 38-1102, currently OCGA § 24-9-27(c), provides that no party shall be required to make discovery as to any matter involving "the advice of his professional advisers or his consultation with them....") In Campbell v. State, 149 Ga.App. 299(1), 254 S.E.2d 389, this court held that "[t]estimony of a client as to advice given to him by his counsel is incompetent and properly excluded. Communications between attorney and client, except in circumstances not here pertinent, are excluded as a matter of public policy, both in criminal and civil matters." (Emphasis supplied.) In Associated Grocers Co-Op v. Trust Co., 158 Ga.App. 115, 116-117, 279 S.E.2d 248, we reiterated the above principles, holding that "[t]he statutes and case law of this state are both in accord that [under the attendant circumstances], testimony of a client as to advice given to him by his counsel is incompetent, and on timely motion, should be excluded. Communications between attorney and client are 'excluded from consideration of public policy.' [Cits.] [A]nd this court has held that the privilege applies to communications to the officers and employees of a corporate client as well as to individual clients." (Emphasis supplied.)

It thus appears that once an attorney-client relationship has been duly established between an attorney and his corporate client that the legal advice confidentially communicated to the authorized agents of the client is by statute protected from discovery, and testimony concerning the content of such advice is inadmissible on grounds of public policy. OCGA §§ 24-9-21; 24-9-24; 24-9-27(c); see generally cases cited in paragraph above; 97 C.J.S., Witnesses, § 276(c)(3). Wisely or not, the statutes make no distinction between legal advice given in regard to specific cases pending and legal advice concerning day-to-day business matters. See generally Taylor v. Taylor, 179 Ga. 691, 693, 177 S.E. 582. Neither do the statutes distinguish between confidentially communicated legal advice that is requested specifically by the corporate client, nor preventive legal advice that is confidentially provided sua sponte by the lawyer...