Waiver of Attorney-Client Privilege

When a plaintiff asserts the discovery rule as a response to a statute of limitations defense, some documents covered by the attorney-client privilege may become discoverable.

In Outpost Solar, LLC v. Henry, Henry & Underwood, P.C., No. M2016-00297-COA-R9-CV (Tenn. Ct. App. Dec. 29, 2017), “two companies brought suit against their former attorney for legal malpractice.” Defendant attorney moved for summary judgment based on the statute of limitations, and plaintiff “responded that it learned of its cause of action within one year of the assertion of the claim.” Defendant tried to use discovery requests to obtain communications between plaintiff and the new attorney, but plaintiff refused, asserting the attorney-client privilege. Defendant moved to compel production, which the trial court granted, “holding that the client impliedly waived attorney-client privilege in asserting that the client discovered the cause of action within the year preceding the assertion of the claim.”

The trial court appointed a special master “to determine whether any of the 151 documents which [plaintiff] had withheld from production as privileged were relevant to [defendant’s] statute of limitations defense.” The special master found that eight were relevant, and the trial court ordered that those eight documents be produced, noting that “plaintiffs put their privileged information at issue by pleading the discovery rule.” On appeal, the decision and process was affirmed.

The sole issue on appeal was whether the trial court correctly determined that plaintiff “impliedly waived the attorney-client privilege when it invoked the discovery rule in response to [defendant’s] assertion of the statute of limitations defense.” The attorney client-privilege belongs to the client and can be waived by the client. In reaching its decision that the privilege had been partially waived here, the trial court

adopted the holding of Bryan v. State that a party asserting the privilege has impliedly waived it through the party’s own affirmative conduct where three conditions exist. …

(1) assertion of the privilege was a result of some affirmative act, such as filing suit, by the asserting party;

(2) through this affirmative act, the asserting party put the protected information at issue by making it relevant to the case; and

(3) application of the privilege would have denied the opposing party access to information vital to his defense.

(quoting Bryan v. State, 848 S.W.2d 72 (Tenn. Crim. App. 1992)).

Plaintiff argued on appeal that adopting the Bryan standard would discourage clients “from seeking legal advice about a potential claim and from engaging in full and frank communications with his counsel regarding those claims,” and that “a litigant would be forced to choose between asserting a valid but facially time-barred claim and waiving the attorney-client privilege[.]” The Court of Appeals rejected these arguments, noting that the process used in this case “address[ed] the competing interests the court identified in Bryan and securing fairness in the judicial process.” The Court thus determined that the Bryan standard was appropriate to apply in this context.

After determining that using the Bryan standard was correct, the Court of Appeals then looked at whether each of the three conditions had been met. The Court held that plaintiff’s assertion of the discovery rule in response to the statute of limitations defense met criterion one; that criterion two was met because plaintiff’s “assertion made the documents potentially relevant to the defense,” and that the special master’s review eliminated any non-relevant documents; and that criterion three was met because the information sought was vital to the statute of limitations issue, despite plaintiff’s assertions that a less intrusive means of obtaining the information was possible. Accordingly, the decision of the trial court that the eight documents should be produced was affirmed.

While communications with an attorney are not typically the crux of a statute of limitations defense, they can become relevant in certain situations. If you are litigating issues surrounding whether the attorney-client privilege has been waived, you will want to look to both this decision and the decision in Bryan.