SB GP LLC v. Alkek & Williams et al. (2012)

MEMORANDUM OF DECISION DEFENDANT'S MOTION FOR COMPLIANCE # 144

INTRODUCTION

The defendants have filed a motion for an order of compliance as to the document production by the plaintiffs related to the defense and the counterclaim filed by the defendants.

The counterclaim defendants, Tuckerbrook, have filed an objection dated October 31, 2012.   A reply was filed on November 5, 2012.

The defendant's motion addresses three categories of documents which are the subject of the requested disclosure.   The first category involves the fees for counsel and the reports of the forensic experts regarding the various funds.   The plaintiff has objected to the disclosure of these documents because they contend they are protected by attorney client privilege and work product.   The defendants argue that the privilege does not apply because they have placed these documents “at issue” as a result of their special defense claiming reliance upon counsel.   The next area of inquiry is the financial documents which the defendant contends relate to the claims of statutory theft, conversion and fraudulent transfer.   The last area of inquiry relates to objections which the defendants contend were untimely and therefore the documents should be provided in their entirety.

DISCUSSION

The defendant contends that the production request of documents from counsel are not subject to an attorney client privilege because the plaintiffs are relying upon the special defense which states;  “Plaintiff did in fact seek and receive advice and opinion from independent counsel with respect to all reimbursement or other payments made pursuant to § 2.06 of the Partnership Agreement and are accordingly exculpated.”   The defendant contends that the plaintiffs waived the privileges by placing the advice of attorney directly at issue.   They rely upon the analysis and decision of the court in Metropoliton Life Ins. Co., v. Aetna Casualty & Surety Co., 249 Conn. 36, 730 A.2d 51 (1999).   In Metropolitan Life Ins. Co. the court examined the application of an attorney client privilege to a situation where the defendant claimed attorney client privilege.   The court recognized that documents between an attorney and a client are not subject to disclosure simply because a client states in an action that he or she relied upon the advise of an attorney.   The “at issue” implied waiver exception is properly invoked only when the content of the legal advice is integral to the outcome of the legal claims of the action.  Metropolitan Life Ins. Co. v. Aetna Casualty & Surety Co., supra, 249 Conn. 52–53.   The court stated that simply because the documents are relevant does not place them at issue.   Citing Remington Arms Co. v. Liberty Mutual Ins. Co., 142 F.R.D. 408 (D.Del.1992).   It is not the need for the documents that permits the disclosure.   In the present action the defendant, Alkek & Williams have submitted a production request for a number of items related to the representation of counsel for the plaintiff Tuckerbrook as a result of the claim that the plaintiff relied upon advice of counsel in their indemnification claims.   In viewing the documents of Tuckerbrook which were contained in the privilege log the court has determined that some of the documents are related to the claim within the special defense.   However, the finding that they are related does not end the inquiry.   The court has reviewed each of the documents to determine “if the information is actually required for a truthful resolution of the issue on which the party has raised ․” Metropolitan Life Ins. Co. v. Aetna Casualty & Surety Co., supra., 249 Conn. 36, 53.   Tuckerbrook does plead that it relied upon the advise of counsel in seeking indemnification but this does not open every inquiry and every review by counsel.   In viewing the documents there are some that go to the heart of the special defense but many others which are conversations or inquiries from the clients which fall squarely in the realm of attorney client privilege and do not become a communication that would be utilized in the special defense of reliance upon advice of counsel.   Thus without a further showing of specific need, other than the direct opinions of counsel this court finds that relatively few of the documents are disclosable.   With this finding, however, the court also finds that if not disclosed by plaintiff a document may not be used as evidence on this issue by the plaintiff.   This applies equally to the claim of work product which the defendant contends relates to the special defense.   The defendant is correct that the documents in some respects relate to the claim.   However, much of the work of counsel is just that, work of counsel in preparation for a final analysis.   The disclosure of the work product documents is restricted unless there is a showing of substantial need.   This standard has not been met.   Therefore, in relation to the documents in question that were reviewed by the court the following order is entered.   The plaintiff will produce and disclose document numbers 256 to 267, 369, 370, 372 to 379, and 381 to 389.   The objection to the disclosure of the following documents is sustained, numbers 268, 371, and 390 to 430.   The document numbers 431 to 474 are emails containing strictly conversations and discussions between the parties and their attorneys.   There are no definitive opinions or theories in these documents.   They are a prime example of the basis for an attorney client privilege to permit a client to have candid and unredacted conversations with their attorney.   To produce these would totally ignore the very core of the privilege.   There is no basis for the court to order these documents produced.

The plaintiffs have separated the documents for in camera review into two categories in the privilege.   The first group begins with # 3 and Bates # CT 000004 and continues to # 490 with Bates # CT 002688–89.   This series of documents contains banking information beginning at document # 483 to 490.   These documents include not only the name of the bank but include account numbers and activity for the accounts.   The defendant contends that the documents are necessary and relevant to the claims of frauds and statutory theft.   The information is relevant and necessary for the claims of misappropriation, fraudulent transfer and statutory theft and are not readily available to the plaintiff from any other source.   However, the inclusion of the account numbers including portions within the body of the transfer document shall be redacted.   Therefore, the objection to production of documents with banking information is sustained in part and overruled in part such that the account numbers will be redacted.   This also includes wire transfers or any check payments with account numbers.

The defendant has requested all legal bills and payments of such bills to be disclosed.¹  The plaintiff does not object to the disclosure of the bills with the exception that Tuckerbrook contends that the portion of the bill or invoice that describes the service provided should be redacted.   The plaintiff has provided the voluminous legal bills with portions highlighted for redaction.   The court has reviewed the documents to determine if the description should be precluded from disclosure as work product and attorney client.   The bills are not subject to discovery to determine their reasonableness but are to determine whether the bill is within the damage award for attorney fees.   The counterclaim plaintiff contends that the bills should not be redacted because they need to distinguish if the bills were part of the Texas litigation or were incurred for other legal services.   The dates of the bills and the basic service noted on the bill provides the answers to many of Alkek's questions and concern.   The additional information does infringe upon the attorney client privilege and in some respects the work product privilege.   A review of the redacted portions within the documents provided to the court supports this finding.   However, the position of Alkek that the documents do not differentiate for purposes of this action with different claims is well taken.   Therefore, the court sustains the objection as to the description of the services to be redacted but orders that the plaintiff Tuckerbrook indicate on the legal bills or invoices the legal matter to which the services were provided. (i.e Texas Litigation, arbitration, Connecticut action.)   It was noted that on a number of documents account number for banks were included, these account numbers should be redacted consistent with the court's ruling above.

The counterclaim defendant, Tuckerbrook, has objected to specific production requests in the last series of interrogatories and productions.   The objections are based upon the argument that the defendant failed to timely respond to the production request.   The defendant is correct that the responses were not timely.   However, there is no showing that the counterclaim plaintiff is prejudiced in any way as a result of the late response.   The responses include several objections which Alkek seeks an order from this court as part of the compliance order.   The court has reviewed each of the six objections and enters the following order as to the objections:

Request # 41 Objection overruled.

Request # 42 Objection overruled.

Request # 43 Objection overruled.

Request # 46 Objection overruled.

Request # 47 Objection overruled.

Request # 48 Objection overruled.

As to the production request in the above for the Banjeree deposition, a copy of the deposition transcript is to be provided within thirty (30) days of the date of this order.

CONCLUSION

The motion for order of compliance is granted in part and denied in part as noted in this decision and below:

1.  All draft and final forensic expert reports shall be provided.

2. All bank statements excluding only account number information or wire transfer account information will be provided.

3. There is no basis for allowing draft legal memorandum or correspondence as noted above to be disclosed.   All final memorandum and specific documentation as noted above will be provided.

4. The responses as noted above to the Second Request for Production number 41, 42, 43, 46, 47, and 48 will be provided.

5. Redacted legal bills will be provided but each bill will contain a notation as to whether the work or bills are for the Texas litigation, the Arbitration proceeding with Banerjee, the instant action, or some other basis.

6. No disclosure will be ordered as to the allegation of possible securities violation investigations.

7. The Banerjee deposition will be provided in its entirety within 30 days of this order.   There was argument this has been done but in the event it is not completed, the deposition transcript will be immediately prepared for disclosure within the 30 days)

All documents that have been ordered disclosed will be provided to counsel by December 31, 2012.

THE COURT

Brazzel–Massaro, J.

FOOTNOTES

FN1. This series of document begins with number 1 through to number 512 as reviewed by the court and the order for disclosure with redactions applies to each of the documents..  FN1. This series of document begins with number 1 through to number 512 as reviewed by the court and the order for disclosure with redactions applies to each of the documents.

Brazzel–Massaro, Barbara, J.