Witham Memorial Hosp., In re, 06A01-9712-CV-415
| Decision Date | 18 February 1999 |
| Docket Number | No. 06A01-9712-CV-415,06A01-9712-CV-415 |
| Parties | In re WITHAM MEMORIAL HOSPITAL, Appellant-(Non-Party). Victor A. Lalas and Nancy Lalas, Appellees-Plaintiffs, v. Dr. Paul Honan, Dr. Alexander Gatzimos, Dr. Barth Conard and Dr. John Olson, Appellees-Defendants. |
| Court | Indiana Appellate Court |
Witham Memorial Hospital (the Hospital) appeals a trial court order requiring it to produce certain documents in response to a third-party request for production of documents. We consolidate and restate the Hospital's issues as whether the trial court erred by ordering the Hospital to produce a report prepared by an investigator hired by its counsel when that report had been kept in counsel's confidential file and a copy had not been provided to the Hospital? 1
We reverse.
In 1995, reports of impropriety as to the actions of some hospital employees were brought to the attention of the Hospital's Board of Trustees by some of the doctors at the Hospital. In December of 1995, a hearing took place at which the doctors' counsel made numerous allegations against the Hospital, including sexual harassment, misappropriation of hospital property, mismanagement, and improprieties in competitive bidding. In response thereto, the Hospital's attorneys hired Thad Droast, an independent investigator and former FBI agent, to investigate the allegations. Victor Lalas, the Hospital's vice-president, was suspended with pay pending the result of that investigation.
On January 22, 1996, upon the conclusion of Droast's investigation, the Hospital's attorneys issued a press release, which stated:
At this time, Mr. Droast has substantially completed his investigation. Mr. Droast stated, "I have found no credible evidence to support any misappropriation of Hospital funds or equipment, nor is there any evidence to support allegations of conversion of the Hospital equipment for personal use of Hospital employees or improper use of cumulative building funds". He further stated there was no evidence of bid rigging or kickbacks by Hospital personnel or their contractors. Given the clean bill of health from his investigation to date, the two suspended employees were asked to return to work effective January 22, 1996 and have done so.
On that same date, the Hospital disseminated a memorandum to all of its employees, indicating the press release had been issued concerning the results of Droast's investigation. It stated in part: "As you can see, the investigator discovered no evidence of wrong doing on the part of ... Vic Lalas, or any other employee against whom allegations were made." Id. at 193.
In May of 1996, the Hospital and Lalas entered into a "Full and Final Severance Agreement...." Id. at 213-21. In September of 1996, Lalas filed a complaint against the doctors who had brought the alleged improprieties to the Board. That complaint alleged, among other things, that the doctors had "initiated a series of activities with the intentional inducement to breach the Plaintiff's contract with the Hospital and lead to his dismissal with said actions...." 2 Id. at 15.
During the course of that litigation, attorneys for one of the doctors served a Request for Production of Documents to Non-Party upon the Hospital. One of the requests was for Copies of all documents or things prepared by Witham Memorial Hospital or its agents with respect to an investigation by Witham Memorial Hospital or its agents with respect to the activities of Victor A. Lalas.
The Hospital's response to this Request was:
Insofar as Witham's attorneys may have responsive documentation, these materials are protected attorney work product and subject to the attorney-client privilege. Witham, therefore, objects to the production of its attorneys' work product.
One of the doctors moved to compel production of the Droast report. He also requested an order that the Hospital's chief executive officer answer certain questions propounded to him during a deposition. The bulk of those questions related to the Droast report. The Hospital sought a protective order, asserting that the Droast report and the information sought in the deposition was protected by the attorney-client privilege and/or was the work product of its attorneys. Attached to the request for a protective order was an affidavit from the Hospital's chief executive officer verifying that the Hospital never had possession of the Droast report. The Hospital later filed an affidavit from its attorneys stating that the Droast report had been prepared at the request of counsel, had always been treated as confidential in counsel's files, and had never been sent to the Hospital.
After a hearing on all pending discovery motions, 3 the trial court directed the Hospital to produce the Droast report for an in-camera review. The trial court then ordered certain portions of the Droast report to be produced. This appeal ensued.
In reviewing discovery matters, we recognize that the trial court is vested with broad discretion. Consequently, our standard of review is limited to determining whether the trial court abused its discretion. National Eng'g & Contracting Co. v. C & P Eng'g & Mfg. Co., 676 N.E.2d 372, 375 (Ind.Ct.App.1997). An abuse of discretion occurs when the trial court reaches a conclusion which is against the logic and natural inferences to be drawn from the facts of the case. Corll v. Edward D. Jones & Co., 646 N.E.2d 721, 723 (Ind.Ct.App.1995).
We believe the trial court abused its discretion in ordering the production of the Droast report because that report is protected from disclosure by the attorney-client privilege. Indiana Trial Rule 26(B)(1) states in pertinent part:
Parties may obtain discovery regarding any matter, not privileged, which is relevant to the subject-matter involved in the pending action.... It is not ground for objection that the information sought will be inadmissible at the trial if the information sought appears reasonably calculated to lead to the discovery of admissible evidence....
(Emphasis supplied).
The attorney-client privilege is an important provision in our law for the protection of persons in need of professional legal help. Colman v. Heidenreich, 269 Ind. 419, 422, 381 N.E.2d 866, 868 (1978). The privilege allows both the attorney and the client to give complete and confidential information, so that both may be fully advised regarding the attorney's services to the client. See id. Moreover, it assures the client that these confidences will not be violated. Id. As long as a communication is within the scope of the privilege, "it is of no moment to the privilege's application that there is no pendency or expectation of litigation." Id. at 423, 381 N.E.2d at 869.
Just as communications made directly between an attorney and his or her client are privileged, so too are communications between attorneys and the experts or investigators they hire on behalf of a client, as well as communications between agents of the client and agents the attorney hires on behalf of a client. The attorney-client privilege attaches to communications between the client and an agent of the attorney, as long as 1) the communication involves the subject matter about which the attorney was consulted and 2) the agent was retained by the attorney for the purpose of assisting the attorney in rendering legal advice to or conducting litigation on behalf of the client. Brown v. State, 448 N.E.2d 10, 14 (Ind.1983). So, in this case, the privilege attached to communications between the client Hospital and the investigator retained by the Hospital's counsel.
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