FIRST FINANCIAL BANK, N.A. v. CITIBANK, N.A. et al

Filing 68

ORDER - FFB's 65 motion to compel Misty McDonald to produce the documents she withheld as attorney-client communications between her and Mr. Burger or Alliance Machining Technologies is GRANTED. She must produce these documents no later than January 23, 2012. (See Order for details.) Signed by Magistrate Judge Debra McVicker Lynch on 1/17/2012. (TMA)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF INDIANA
INDIANAPOLIS DIVISION

FIRST FINANCIAL BANK, N.A.,
Plaintiff,
v.
CITIBANK, N.A., and MISTY Y. McDONALD,
Defendants.

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) CASE NO. 1:11-cv-0226-WTL-DML
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Order Granting Plaintiff’s Motion to Compel
This matter is before the court on the motion (Dkt. 65) by plaintiff First Financial Bank,
N.A. (“FFB”) to compel defendant Misty Y. McDonald to produce documents that she has
withheld as protected from disclosure by the attorney-client privilege. Ms. McDonald notified
the court that she will not file an objection to the motion.
This case concerns a “bad” check in the amount of $298,750. The check was purportedly
drawn on an account at defendant Citibank, made payable to defendant Misty McDonald, and
deposited by Ms. McDonald in her account at plaintiff FFB. The representative funds (minus a
10% fee to Ms. McDonald) were paid—at Ms. McDonald’s request—by FFB via wire transfer to
the Bank of China in Beijing, China before FFB received notice of the check’s nonpayment. Ms.
McDonald is an attorney. She was allegedly contacted by a would-be client (a man claiming to
be George Burger acting on behalf of Alliance Machining Technologies) to help it collect a debt
and agreed to accept the engagement. She received the $298,750 check from her client’s
purported debtor to satisfy the debt. Under an agreement with her “client,” she deposited the
check in her trust account, kept 10% as the agreed fee for professional legal services, and then
requested her bank (FFB) to wire transfer the remainder to her client’s representative in care of

an account at the Bank of China. FFB wired the funds but the check from the purported debtor
was not written on an actual bank account and was part of a scam transaction.
As against Ms. McDonald, FFB’s suit alleges she breached warranties provided under the
Uniform Commercial Code as adopted in Indiana and that she committed check deception
entitling FFB to relief under Indiana’s Offenses Against Property Act.
Attorney Client Privilege
In federal court, where state law provides the substantive rule of decision—as it does here
for FFB’s claims against Ms. McDonald—privileges are determined in accordance with the
applicable state law. Fed. R. Evid. 501. Indiana’s attorney client privilege is an evidentiary
privilege codified at Ind. Code § 34-46-3-1:
Except as otherwise provided by statute, the following persons shall not be
required to testify regarding the following communications: (1) Attorneys, as to
confidential communications made to them in the course of their professional
business, and as to advice given in such cases.
The privilege is narrowly construed, and the party who withholds a communication as
privileged has the burden to prove its applicability, on a communication-by-communication or
document-by-document basis. Howard v. Dravet, 813 N.E.2d 1217, 1222 (Ind. Ct. App. 2004).
The privilege may be waived by the client, or by conduct attributable to the client. Mayberry v.
State, 670 N.E.2d 1262, 1267 n.5 (Ind. 1996).
FFB contends that the attorney-client privilege does not attach to any communications
between Ms. McDonald and her would-be client (Alliance Manufacturing Technologies or its
purported representative, George Burger) because Ms. McDonald cannot show that an attorneyclient relationship existed between her and Alliance or Mr. Burger. It further argues that even if
there was an attorney-client relationship, Ms. McDonald waived any privilege because she
shared with FFB, immediately following the check’s return, the nature of her communications
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with Mr. Burger and Alliance and showed FFB some of the written communications in
explaining her belief that she was a victim of fraud.
FFB has demonstrated the unlikelihood that an attorney-client relationship existed
between Ms. McDonald and her purported client. Indeed, according to information Ms.
McDonald has provided to FFB, the “client” was fictitious and the purpose of its
communications with her was not to obtain legal representation and advice but to enlist her as an
unwitting participant in a fraudulent scheme. Under these circumstances, the elements of the
privilege are not established in the first instance, or even if they could be, the crime-fraud
exception to the privilege prevents the use of the privilege to shield communications from
disclosure. Lahr v. State, 731 N.E.2d 479, 483-84 (Ind. Ct. App. 2000). See also Ind. Prof.
Conduct R. 1.6(b)(3) (attorney may reveal information relating to representation of client the
attorney reasonably believes necessary to “prevent, mitigate or rectify substantial injury to the
financial interests or property of another that . . . has resulted from the client’s commission of a
crime or fraud in furtherance of which the client has used the lawyer’s services”).1
Conclusion
FFB’s motion (Dkt. 65) to compel Misty McDonald to produce the documents she
withheld as attorney-client communications between her and Mr. Burger or Alliance Machining
Technologies is GRANTED. She must produce these documents no later than January 23, 2012.
So ORDERED.
____________________________________
Debra McVicker Lynch
United States Magistrate Judge
Southern District of Indiana

01/17/2012
Date: __________________

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The court does not resolve FFB’s waiver argument, but notes that even if there could be
an attorney-client relationship between Ms. McDonald and the fictitious client, only the client
can waive the privilege. Brown v. Katz, 868 N.E.2d 1159, 1166 (Ind. Ct. App. 2007).
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Distribution:
All ECF-registered counsel of record

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