Tuesday, April 28, 2009
The Shield And The Sword: Supreme Court Of New Hampshire Incorrectly Finds No Waiver Of Attorney-Client Privilege In Implied Covenant Appeal
It is well established that evidentiary privileges cannot be used as both a shield and a sword. For example, a criminal defendant cannot seek to selectively or partially disclose exculpatory statements that he made to his attorney in confidence (sword) while still invoking the attorney-client privilege to preclude the prosecution from discovering incriminatory statements that he made to the same attorney in confidence (shield). And yet, in its recent opinion in Livingston v. 18 Mile Point Drive, Ltd., 2009 WL 1098455 (N.H. 2009), this is excatly what the Supreme Court of New Hampshire allowed the plaintiff to do.
Now, unfortunately, the opinion in Livingston does not provide us with many facts, but here are the basics. Anthony L. Livingston exercised an option to purchase a 1.5 acre lot from 19 Mile Point Drive, Ltd. but he did not technically comply with the option agreement, which "specified that to exercise the option, the plaintiff was required to give written notice to the defendants by certified mail, return receipt requested, and that the option would become effective upon receipt of this notice." Livingston attempted to explain why he did not technically comply with the option agreement by "rel[ying] upon [his attorney's] testimony concerning his preparation for the 2002 closing, the closing itself and his actions on the plaintiff's behalf." The trial court, however, precluded the defendant from discovering other communications between Livingston and his attorney. Thereafter, the trial court found that, notwithstanding Livingston's failure to comply with the terms of the option agreement, the defendant violated the implied covenant of good faith and fair dealing (by failing to point out Livingston's non-compliance to him) and thus awared specific performance to Livingston.
The defendant subsequently appealed, claiming, inter alia, that the trial court improperly denied its discovery request. The Supreme Court of New Hampshire disagreed, finding that the communications that the defendant sought were protected by New Hampshire Rule of Evidence 502, the lawyer-cient privilege. Moreover, the court found that the exception contained in New Hampshire Rule of Evidence 502(d)(3) for "communication relevant to an issue of breach of duty by the lawyer to his client or by the client to his lawyer" did not apply because Livingston had not brought an action against his attorney. The court also found that Livingston had not placed his communications "at issue" in the sense that they had become "actually required for "resolution of [an] issue."
The court, however, did not address the shield and the sword. But the opnion of the First Circuit in United States v. Desir, 273 F.3d 39 (1st Cir. 2001), provides a nice explanation of how a party impliedly waives the attorney-client privilege by trying to use it as a shield and a sword:
The district court's finding that the attorney-client privilege did not apply was based upon a theory of implied waiver. See 1 McCormick on Evidence § 93 (John W. Strong, ed., 5th ed.1999) (noting that client's conduct, such as partial disclosure , may constitute waiver where it would be “unfair for the client to invoke the privilege thereafter”); see also 3 Weinstein's Federal Evidence § 503.41 (Joseph M. McLaughlin, ed., 2d ed.1997) (waiver by implication may occur whenever party takes a position that makes it unfair to protect attorney-client communications, such as when a client testifies about portions of such communications or client relies on attorney's advice as element of claim or defense); United States v. Workman, 138 F.3d 1261, 1263-64 (8th Cir.1998) (implied waiver is to prevent defendant from “selectively assert[ing] the privilege to block the introduction of information harmful to his case after introducing other aspects” of attorney-client communications that are beneficial; "attorney client privilege cannot be used as both a shield and a sword”); United States v. Rakes, 136 F.3d 1, 5 (1st Cir.1998) (waiver “is directed against selective disclosures by reserving protection for only those communications that the privilege holder himself is prepared to keep confidential”).
This is clearly what Livingston did, and the Supreme Court of New Hampshire thus should have allowed the defendant to discover other communications betwee Livingston and his attorney.