Lawyer’s e-mails to co-owner deemed privileged

The advice a corporate lawyer gave to only one of two doctors who co-owned a health center was protected by the attorney-client privilege, a Massachusetts Superior Court judge has ruled.

The defendant doctor, who was sued by his partner in a complex complaint over the dissolution of the company’s assets, argued that communications contained in e-mails between the health center’s lawyer, John D. Grandfield, and the defendant’s business partner should be turned over to him during discovery.

But Judge Mitchell H. Kaplan disagreed and after reviewing the e-mails in camera ruled in favor of the plaintiff, Dr. M. Rachid Och.

“While Attorney Grandfield’s failure to obtain an express waiver from [the defendant] before acting on behalf of Dr. Och in matters relating to [the company], in which [their] interests were clearly not aligned may have been inconsistent with his obligations under the Rules of Professional Conduct, his failure in this regard ought not to prevent Dr. Och from relying on the confidentiality of the communications,” the judge wrote. “To rule otherwise would be unfair to Dr. Och.”

He held, however, that a series of e-mails between plaintiff Och and the company’s accountants were not protected by any privilege.

The five-page decision is Och v. Moran, et al.

‘Legalistic gotcha’

Roy A. Bourgeois of Worcester, Mass., who represented Och, said the ruling reinforces the notion that judges must make privilege determinations by looking at the issue from the perspective of the client. Such determinations are reached, he added, by analyzing the facts as they existed at the time the client spoke with counsel.

“The privilege belongs to the client,” said Bourgeois, a lawyer at Bourgeois, Dresser, White & McGourthy. “The problem is that while lawyers think like lawyers, clients don’t necessarily. If the client has a reasonable expectation that the communication is going to be private, then the judge has to respect that and can’t just impose an artificial, legalistic ‘gotcha’ on the client simply because the communication was made to the company’s lawyer.”

While Grandfield should have identified the conflict, Bourgeois said, his failure to do so should not be held against the plaintiff.

Citing the ongoing nature of the suit, Grandfield declined to discuss the case.
Jean D. Sifleet of Clinton, Mass., who represented defendant Dr. Peter Moran during the early stages of the dispute, said she found it troublesome that Grandfield was advocating more strongly on behalf of Och’s interests than her client’s.

“I definitely raised questions about the role [Grandfield] was playing and who he was actually representing,” she said.

Anthony A. Froio, who now represents Moran, declined to comment.

Meanwhile, Jamison J. Barr, general counsel and vice president of Jenzabar Inc. in Boston, who was not involved the case, said the issues presented to Judge Kaplan are capable of arising in numerous business settings.

“Rarely should an in-house counsel or a lawyer who represents a company be giving advice to an executive that could be interpreted as advice in a personal capacity,” Barr said. “You always need to be mindful of the fact that you represent the company’s interests, not any one individual’s.”

‘Short gray period’

In 2009, Och and Moran, who co-owned and operated Prescott Health Center in Worcester, were involved in a dispute over the disposition of partnership assets and the possible buyout of Moran’s interests.

Prior to the filing of a lawsuit, it was undisputed that Grandfield had provided legal advice to Och during a span of more than eight months.

At the time the Needham, Mass., lawyer offered the advice, Och believed that Grandfield was acting as his personal representative in his dispute against Moran.

Although Grandfield was counsel to the company, Moran was represented in the matter by Sifleet. In fact, Sifleet and Grandfield were negotiating with one another on behalf of Och and Moran.

During discovery, Moran moved to compel the production of documents contained in nearly 40 e-mails exchanged between Och and Grandfield.
At a deposition, Bourgeois characterized the eight months Grandfield was advising his client as a “short gray period.”

Justified expectations

In finding that all but one document was privileged, Kaplan wrote that Bourgeois’ assertion about the eight-month period “seems a bit strained.”

While Grandfield may have had a conflict during that time, Kaplan held, Och had a justified legal expectation that his communications with the lawyer would be kept confidential.

“Moreover, Dr. Moran had independent representation with respect to these negotiations,” Kaplan wrote, “and his attorney certainly could have advised Grandfield that he was disqualified from acting for Dr. Och, if she thought that was necessary to protect Dr. Moran’s interests.”

The judge cited the Massachusetts Supreme Judicial Court’s 2009 Commissioner of Revenue v. Comcast Corp. decision in which the SJC held that the privilege attaches to communications the parties expect will not be divulged.

Kaplan found however that a communication between Grandfield and Och within a month of the suit being filed was not privileged as the “so-called gray period was clearly over at this time.”