CLL Acad., Inc. v. Acad. House Council

231 A.3d 884

CLL ACADEMY, INC.

v.ACADEMY HOUSE COUNCIL, Robert Vogel, Bruce Kleinstein, Carole Giampalmi, Linda Rink, Michael Goldman, Robert Washburn, John Doe Members of Academy House Council 1-10 and Parkway Corporation

Appeal of: Academy House Council on Behalf of the Unit Owners of Academy House Condominium ("AH Council)" and Individual Members of AH Council, Robert Vogel, Bruce Kleinstein, Carole Giampalmi, Linda Rink, Michael Goldman and Robert Washburn

No. 446 EDA 2019

Superior Court of Pennsylvania.

Argued August 27, 2019

Filed April 06, 2020

Michael V. Phillips, Philadelphia, for appellant.

Andrew J. DeFalco, Philadelphia, for appellee.

BEFORE: BOWES, J., OLSON, J., and FORD ELLIOTT, P.J.E.

OPINION BY BOWES, J.:

Academy House Council appeals on behalf of the Unit Owners of Academy House Condominium and the individually named council members (collectively "AHC"), and challenges the trial court's order compelling it to divulge allegedly attorney-client privileged communications and attorney work product to opposing counsel "for attorneys’ eyes only," to enable CLL Academy, Inc. ("CLL") to respond to claims of privilege.¹ After thorough review, we vacate that portion of the order compelling disclosure to opposing counsel for their eyes only, and remand for further proceedings consistent herewith.

Before us is an action for tortious interference with contractual relations and prospective contractual relations, commercial disparagement, and civil conspiracy instituted by CLL against AHC. CLL pled the following. CLL owns the parking garage underneath the Academy House building in which the Academy House Condominium is located. See Amended Complaint, 12/18/17, at ¶1. When CLL refused to pay AHC hundreds of thousands of dollars in construction costs for structural repairs it did not owe, AHC embarked on a plot with Parkway Corporation to alienate CLL's parking customers. Id . CLL alleges that AHC made false statements to residents regarding CLL's refusal to pay, and solicited Parkway Corporation, the owner of a nearby parking garage, to offer below-market rates targeting CLL's customers in order to entice them away from CLL. Id . at ¶2. In addition, CLL claims that AHC marketed the reduced rate to its residents in order to induce them to leave CLL and to punish CLL for its refusal to pay. Id . Consequently, CLL lost a substantial number of monthly customers and the attendant revenue. Id . at ¶5.

The collection dispute between AHC and CLL over the latter's obligation to pay for construction costs is the subject of a separate contract/declaratory judgment action pending between the parties. The docket indicates that CLL asked the court to consolidate these actions, but consolidation was denied by order of June 5, 2008.

Numerous documents have been exchanged during the course of discovery herein. For purposes of this appeal, the following facts are pertinent. CLL moved to compel production of documents Bates-stamped AHCD 1459-AHCD 1574. It alleged that the communications were not protected work product because they were not communications of "representatives of a party other than the party's attorney" reflecting mental impressions and opinions as to the value or merit of a claim or defense. Rather, CLL contended that they were communications reflecting the mental impression of the individual parties. See Plaintiff's Motion to Compel AH Defendants to Produce Documents Bate-Stamped AHCD 1459-AHCD 1574 Unredacted Except for Specific Reference to Legal Advice or Mental Impressions of the Attorneys of the Obermayer Firm, at 2. Additionally, CLL maintained that most of the communications related to a different lawsuit between the parties, and furthermore, they were created months before the instant action was filed, and hence, not protected. Id . Finally, CLL alleged that since the state of mind of the AHC defendants was at issue, the documents were evidentiary and not covered by Rule 4003.3.

CLL requested that the Discovery Master order AHC to produce these documents unredacted for in camera review, and following such review, to issue recommendations to the court to order production "without redactions except for specific reference to legal advice or mental impressions of the attorneys at the Obermayer firm." Id .

AHC supplied a privilege log with regard to the fifteen documents at issue, its proposed redactions, and the Master conducted in camera review. The Master recommended, in some instances, different redactions than those proposed by AHC. The trial court adopted the recommendations of the Master, and ordered AHC to produce the documents as redacted by the Master to CLL. Order, 12/20/18.

AHC sought reconsideration on January 8, 2019, and requested that a hearing be scheduled and that counsel be permitted to submit ex parte argument "to provide additional context behind the internal communications at issue and the nature of the correspondence and strategy being discussed therein." See Motion for Reconsideration, 1/8/19, at ¶6. AHC attached correspondence in which the Master had conveyed his willingness to meet ex parte to consider AHC's additional arguments in favor of AHC's proposed redactions. See id . at Exhibit I. By letter dated December 14, 2018, CLL's counsel advised the Master that he objected to "an ex parte private meeting between the Discovery Master and opposing counsel," as AHC would have "an opportunity to make arguments for reconsideration to which we cannot respond to protect our client's interests." See Motion for Reconsideration, 1/8/19, at Exhibit G. CLL's counsel suggested that argument be held on an "attorney's eyes only" basis. The Master ultimately did not meet privately with AHC in order to avoid "creat[ing] an unnecessary procedural issue." Id . at ¶5; see also id . at Exhibit I. Instead, the Master supplied the trial court with a copy of the documents as redacted by AHC, and a separate copy of the same documents highlighting his proposed redactions. See id . at Exhibit J. CLL maintained throughout that it needed to view the unredacted documents, and suggested that they be produced for "attorneys’ eyes only" for that purpose.

The trial court granted reconsideration in part, and agreed to entertain argument. It then ordered AHC to produce the fifteen documents without redactions that were originally refused protection by the Master "on an attorney's eyes only" basis. Order, 1/14/18, at 3. AHC timely appealed to this Court.

AHC presents four issues for our review:

1. Did the trial court err in its December 20 and January 14 Orders when it ordered counsel for AH[C] Defendants to produce certain un-redacted internal communications among AH[C] set forth in AHC D001460-1471, 1479-1480 and 1573 without ruling on the relevancy of each document or explaining why the privilege asserted in each communication at issue was inapplicable?

2. Did the trial court err in its December 20 and January 14 Orders when it ordered counsel for AH[C] to produce certain un-redacted internal communications among AH[C] set forth in AHCD001460-1471, 1479-1480 and 1573, where the disclosure of such communications would reveal: (a) advice and strategy provided to AH[C] by it legal counsel in response to legal questions and inquiry raised by AH[C] regarding a separate, active legal dispute between CLL and AH[C]: (b) legal advice sought by AH[C] regarding a separate, active legal dispute between CLL and AH[C]; and/or (c) the substance of communications made by AH[C] to its counsel regarding a separate, active legal dispute between CLL and AH[C]?

3. Did the trial court err in its December 20 and January 14 Orders when it ordered counsel for AH[C] Defendants to produce certain un-redacted internal communications among AH[C] set forth in AHCD001460-1471, 1479-1480 and 1573, where the disclosure of such communications would reveal AH[C]’s mental impressions, conclusions, and /or opinions regarding the value and merit of claims and defenses and litigation strategy and tactics of a separate legal dispute between CLL and AH[C]?

4. Are the December 20 and January 14 Orders contradictory to the trial court's earlier order dated August 8, 2019, which permitted AH[C] Defendants to redact "specific reference[s] to legal advice or mental impressions of the attorneys at the Obermayer firm" and any mental impressions, conclusions, or opinions, regarding the value or merit of a claim or a defense or litigation strategy or tactics expressed by a party's non-attorney representative?"

Appellant's brief at 5-6.

The application of the attorney-client privilege and the work product doctrine are questions of law over which our standard of review is de novo and our scope of review is plenary. Bousamra v. Excela Health , 210 A.3d 967, 973 (Pa. 2019). In evaluating claims of privilege, we are mindful of our High Court's recent observations:

We have often recognized the conflict inherent in the attorney-client privilege. On the one hand, our precedent disfavors evidentiary privileges which are in tension with the truth-determining process of the justice system, as they result in the exclusion of evidence. Nevertheless, we have emphasized the need for protection of various types of communications though the establishment of privileges. Of these privileges, the attorney-client privilege is often considered ‘the most revered.’ The attorney-client privilege as codified by the General Assembly, 42 Pa.C.S. § 5928, and applied by our courts is intended to foster open discussion between counsel and client. Only with full information from the client can an attorney provide relevant and sound legal advice.

Pittsburgh History & Landmarks Found. v. Ziegler , 200 A.3d 58, 80 (Pa. 2019) (internal citations and question marks omitted).

Notably, the attorney-client privilege does not end when representation ceases. See Commonwealth v. Hutchinson , 290 Pa.Super. 254, 434 A.2d 740, 744 (1981) (privilege which attaches to statements made to lawyer or his agents survives the...