Meskunas v. Auerbach, Esq

Background

Plaintiffs sued their former attorneys, Lee David Auerbach, Esq. and Lee David Auerbach, P.C., asserting legal malpractice and accounting claims. The dispute concerned, among other things, rents from a commercial property, a mortgage default, foreclosure proceedings, and a bankruptcy proceeding involving the property. During discovery, Defendants subpoenaed documents from Denise Meskunas’s former matrimonial attorney, Linda Eichen, Esq., and from Plaintiffs’ former bankruptcy attorneys at DelBello Donnellan Weingarten Wise & Wiederkehr, LLP.

The former attorneys produced non-privileged documents and privilege logs identifying withheld documents. Plaintiffs moved for a protective order covering the remaining disputed communications. The parties agreed about the status of most withheld documents, and the court reviewed the disputed Eichen and DelBello communications privately.

Legal standards

The attorney-client privilege protects confidential communications between a lawyer and client made for the purpose of providing legal advice. The party claiming the privilege must establish that the communication was confidential, predominantly legal in character, and made in a professional attorney-client relationship. The work-product doctrine, governed by federal law, protects documents prepared principally or exclusively for anticipated or ongoing litigation, subject to the rules governing discovery.

The court explained that a party may waive these protections by placing the subject matter of the communications “at issue.” This can occur when a party selectively discloses privileged communications, directly puts the attorney-client relationship at issue, or relies on an attorney’s advice as part of a claim or defense. Relevance alone is not enough; disclosure must be necessary to prevent unfairness to the opposing party.

Court’s analysis

The court found that the Eichen and DelBello communications were confidential communications between attorneys and clients made for legal-advice purposes and were predominantly legal in character. The court also found that several DelBello communications were prepared exclusively to assist with ongoing litigation and therefore qualified for work-product protection. The parties did not dispute that the protections initially applied; the dispute was whether Plaintiffs waived them by filing this lawsuit.

Eichen communications

Defendants argued that Plaintiffs waived protection over communications concerning the handling of rents from the New Rochelle Property because Plaintiffs alleged that court orders directed Defendants to act as receiver of those rents. The court rejected that argument. Denise Meskunas had not selectively disclosed portions of her communications with Eichen, had not placed her relationship with Eichen directly at issue, and did not need to rely on Eichen’s advice to establish the malpractice claim. The court also noted that other sources, including the allegations in the amended complaint, could establish the existence of the relevant court orders. Plaintiffs therefore had not waived protection over Eichen communications concerning those orders.

Defendants also argued that Plaintiffs placed at issue advice about whether to default on the mortgage. The court agreed that, because Plaintiffs’ malpractice claim rested on alleged reliance on Defendants’ negligent advice, advice from other lawyers about whether to default would bear on the reasonableness of that reliance and would have to be disclosed. However, the Eichen communications submitted as Exhibit A did not contain advice about defaulting on the mortgage.

The court separately held that communications discussing Plaintiffs’ financial condition at the time of the default were not placed at issue merely by filing the lawsuit. Those communications were not subject to disclosure, and their contents could not be explored during Eichen’s deposition.

DelBello communications

Defendants argued that Plaintiffs waived protection over DelBello communications concerning Plaintiffs’ finances, the property’s value and sale, assets listed in the bankruptcy proceeding, the ability to refinance or retain the mortgage, and the decision not to list a possible malpractice claim as a bankruptcy asset.

The court held that Plaintiffs had not waived protection over communications concerning their financial condition. The malpractice claim was not based on those privileged financial communications, and Plaintiffs had not used their subject matter to gain a litigation advantage. The court also stated that information about Plaintiffs’ financial condition could be obtained through depositions or other document discovery.

The court likewise held that Plaintiffs had not placed at issue communications about the decision to list or not list the potential malpractice claim as a bankruptcy asset. The possibility that Plaintiffs received advice from former attorneys about the validity of their malpractice claim was insufficient by itself to waive privilege. Communications concerning Plaintiffs’ finances or that bankruptcy-asset decision therefore remained protected and could not be used as deposition topics.

Statute-of-limitations defense

Defendants argued that communications concerning the timing of their representation, its termination, and Plaintiffs’ retention of new counsel were needed for a statute-of-limitations defense. The court acknowledged that the information was relevant but held that waiver was inappropriate because Plaintiffs had not unfairly used the privilege to place that subject matter at issue. The information could also be obtained through other means, including Plaintiffs’ depositions.

Disposition

The court granted Plaintiffs’ motion and directed the Clerk to terminate the pending motions, docket numbers 93 and 95. The order did not state that the motion was granted in part or denied in part. Judge Judith C. McCarthy therefore kept the specified privileged and work-product materials protected from the disclosure and deposition questioning sought by Defendants, subject to the court’s explanation that any reviewed communications concerning advice from other lawyers about defaulting on the mortgage would have been disclosable if they had existed in the submitted Eichen documents.