Bridgebuilder Tax + Legal Services, P.A. v. Torus Specialty Insurance Company
MEMORANDUM AND ORDER granting in part and denying in part 29 Defendant's Motion to Compel. See Memorandum and Order for details. Signed by Magistrate Judge Gwynne E. Birzer on 3/8/17. (sj)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF KANSAS
BRIDGEBUILDER TAX + LEGAL
TORUS SPECIALTY INSURANCE
StarStone Specialty Insurance Company,
Case No. 16-2236-JWL-GEB
MEMORANDUM AND ORDER
This matter is before the Court on Defendant’s Motion to Compel Plaintiff to provide
responses to Defendant’s discovery requests (ECF No. 29). On January 3, 2017, the Court
convened an in-person hearing to address the pending motion. Plaintiff BridgeBuilder Tax
+ Legal Services, P.A. (“BridgeBuilder”) appeared through counsel, David L. Marcus.
Defendant StarStone Specialty Insurance Company1 (“StarStone”) appeared through
counsel, M. Courtney Koger. After consideration of both the arguments of counsel and the
parties’ briefing, Defendant’s Motion (ECF No. 29) is GRANTED in part and DENIED
in part for the reasons outlined below.
StarStone Specialty Insurance Company was formerly known as Torus Specialty Insurance
Company (Notice of Removal, ECF No. 1; Mot., ECF No. 29). Because the parties generally refer
to Defendant as “StarStone” throughout their briefing, the Court will do the same.
Underlying Action in Johnson County District Court
The current case stems from an underlying state action in Johnson County, Kansas
between a client named John Grissinger and his attorney (“Grissinger action”).3 The state
court matter, filed August 5, 2015, involved a malpractice action against BridgeBuilder, a
tax and legal office located in Johnson County. BridgeBuilder is owned and operated by
licensed attorney and certified public accountant, Kevan Acord.
Grissinger claimed BridgeBuilder/Acord convinced him to loan a total of $6 million
to an “online, fee-based lending” company called NorthRock, LLC, (Mem., ECF No. 30, at
2 n. 2.). Two promissory notes (one for $4 million and one for $2 million) were executed
during the NorthRock transaction. After NorthRock defaulted on the notes, Grissinger filed
the malpractice action, claiming in part that Acord “failed to disclose the lending risks” and
“provided inaccurate information to Grissinger regarding the strength of collateral and
personal guarantees for the loan.” (See ECF No. 33 at 2; ECF No. 1-1, at 13.)
BridgeBuilder/Acord and Grissinger ultimately reached a confidential settlement and the
case was terminated in October 2015. (ECF No. 1-1, at 9.)
The information recited in this section is taken from the pleadings (see Notice of Removal, ECF
No. 1) and from the briefs regarding the Motion to Compel (ECF Nos. 29, 30, 33, 36). This
background information should not be construed as judicial findings or factual determinations
unless specifically stated.
John R. Grissinger, individually and as trustee of the John R. Grissinger Living Trust v. Kevan D.
Acord and BridgeBuilder Tax + Legal Services, P.A. f/k/a Kevan D. Acord, P.A., No. 15CV04793
(Johnson Cty. Dist. Ct., filed Aug. 5, 2015).
After conclusion of the Grissinger action, BridgeBuilder filed the instant suit against
its legal malpractice insurer, StarStone, in Johnson County District Court, alleging StarStone
breached its contract by failing to defend the Grissinger action and failing to pay out the
settlement proceeds according to its policy. Under that policy, Plaintiff claims Defendant
had the duty to defend it in the Grissinger action. However, Defendant refused defense or
payment, asserting the Policy did not provide coverage for Grissinger’s claims. Defendant
removed the case to federal court on April 11, 2016.
Defendant relies upon “Exclusion Q” of its policy to deny Plaintiff’s claim.
Exclusion Q states the policy does not apply to a claim against an insured “based upon,
arising out of, directly or indirectly resulting from, or in any way involving any actual or
alleged investment advice, promotion, sale, solicitation, or recommendation of any
securities, real estate or other investments” by the insured.” (Pet., ECF No. 1-1, at 13-14.)
Contending Plaintiff provided investment advice or recommendations to Grissinger,
Defendant refused to defend the claim.
Plaintiff claims Grissinger did not make the loan because BridgeBuilder/Acord
recommended he do so, which is prohibited by Exclusion Q. He asserts Grissinger made the
loan because he was unaware Acord represented other clients with competing financial
interests and did not appreciate the full extent of the risks. (ECF No. 1-1 at 13.) Because it
did not provide investment advice or recommendations to Grissinger, Plaintiff believes the
denial of coverage was wrongful, and Defendant failed to properly investigate the claim.
Current Procedural Posture
This case followed a conventional progression since its filing, until the parties
encountered a discovery dispute. On September 30, 2016, the Court held a telephone
conference to discuss the parties’ dispute regarding documents withheld by Plaintiff on the
basis of attorney-client privilege. As a result of the conference, the parties were instructed
to file written briefing, and all pretrial deadlines were stayed pending resolution of the
discovery issues. (ECF No. 28.) The Court has now had the opportunity to review the
written briefing and to hear argument from the parties at the January 3, 2017 hearing, and is
prepared to rule.
Defendant’s Motion to Compel Production of Documents (ECF No. 29)
Defendant propounded First and Second discovery requests to Plaintiff in August
2016 (ECF Nos. 16, 22) to which Plaintiff timely responded in part and objected in part on
September 12 and 16, 2016 (ECF No. 30, Exs. 2, 3). After multiple letters and at least one
telephone conference between counsel, and a telephone conference with this Court, the
parties could not agree upon the proper scope of production to 11 categories of documents.
Compliance with D. Kan. Rule 37.2
Throughout the briefing, and during the in-person hearing, the parties demonstrated
their multiple attempts to resolve their differences on the pending discovery issues.
Therefore, the Court is satisfied they have sufficiently conferred as required by D. Kan.
Rule 37.2 and Fed. R. Civ. P. 37(a)(1). However, despite their attempts, the parties could
not resolve all disputes, leading to Defendant’s motion to compel Plaintiff’s discovery
Notwithstanding the parties’ efforts, three primary issues remain:
Plaintiff must produce information relating to the NorthRock transactions withheld on the
basis of attorney-client privilege; 2) whether documents related to other transactions
between Plaintiff and Grissinger—beyond the NorthRock transactions—are relevant to
establish a pattern and practice of investment advice; and 3) if documents related to the
other transactions are deemed relevant, whether privilege will prohibit their production.
(ECF No. 30 at 3.) Each topic is addressed in turn.
The primary disagreement, which led to the first discovery conference, is whether
Defendant is entitled to the production of communications relating to the NorthRock
Following the September 30, 2016 conference with the Court, Plaintiff
provided a privilege log (ECF No. 30, Ex. 7) identifying 42 documents it withheld on the
basis of attorney-client privilege.
All documents identified on the log are emails (or
documents discussed in emails) to or from Plaintiff which it argues contain legal advice.
Plaintiff contends the communications between it and Grissinger are clearly protected by the
attorney-client privilege, and because no communications were disclosed in the Grissinger
action, no waiver occurred from the mere filing of the underlying suit.
Defendant initially argues Plaintiff’s assertion of privilege was insufficiently
supported in its privilege log. And, even if the log supported its objection, any attorneyclient privilege asserted by Plaintiff either does not exist, or was waived in the filing of the
Finally, Defendant argues the characterization of communications
between Plaintiff and Grissinger—whether Acord provided investment “advice” or
“recommendations” under Exclusion Q, or merely “convinced” Grissinger to make the
loan—lies at the heart of this dispute, and is crucial to its defense.
Applicable Law: Attorney-Client Privilege
The attorney-client privilege is “the oldest of the privileges for confidential
communications known to the common law. Its purpose is to encourage full and frank
communication between attorneys and their clients and thereby promote broader public
interests in the observance of law and administration of justice.”4
privilege “should be strictly confined within the narrowest possible limits,”5 because “it
deprives the factfinder from otherwise relevant information.”6
In federal court, Federal Rule of Evidence 501 determines what law applies to an
analysis of privilege.7 In a diversity case such as this one, FRE 501 requires a decision on
High Point SARL v. Sprint Nextel Corp., No. 09-2269-CM-DJW, 2012 WL 234024, at *5 (D. Kan.
Jan. 25, 2012), on reconsideration in part, No. 09-2269-CM-DJW, 2012 WL 1580634 (D. Kan.
May 4, 2012) (quoting Upjohn Co. v. United States, 449 U.S. 383, 389 (1981)).
State ex rel. Stovall v. Meneley, 271 Kan. 355, 373 (2001) (citing United States v. Lawless, 709
F.2d 485, 487 (7th Cir.1983); In re Grand Jury Investigation, 599 F.2d 1224, 1235 (3d Cir.1979)).
Id. (citing Fisher v. United States, 425 U.S. 391, 403 (1976)).
Schmitz v. Davis, No. 10-4011-RDR-KGS, 2011 WL 1627010, at *6 (D. Kan. Apr. 28, 2011)
(citing ERA Franchise Sys., Inc. v. N. Ins. Co. of N.Y., 183 F.R.D. 276, 278 (D. Kan. 1998)).
privilege be made according to state law.8 Though Kansas law necessarily provides the
starting point, at least one court in this district indicated “whether the court applies federal
or Kansas law generally makes no difference in determining whether the attorney-client
Under K.S.A. § 60-426 and interpreting caselaw, the essential elements of privilege
(1) Where legal advice is sought (2) from a professional legal advisor in his
capacity as such, (3) the communications made in the course of that
relationship (4) made in confidence (5) by the client (6) are permanently
protected (7) from disclosures by the client, the legal advisor, or any other
witness (8) unless the privilege is waived.10
Generally, confidential communications made between a client and his attorney—acting in
the capacity of legal advisor—in the course of obtaining legal assistance are protected.11
However, communications between client and counsel may lack protection if they fall into
one of three categories: 1) statutory exception to privilege, or the 2) voluntary, or 3) implied
waiver of the privilege. In this dispute, Defendant claims the communications between
Grissinger and Plaintiff fall into any one of these categories; therefore, each is considered.
Frontier Refining, Inc. v. Gorman–Rupp Co., 136 F.3d 695, 699 (10th Cir. 1998); see also
Schmitz, 2011 WL 1627010, at *6 (internal citations omitted).
Simmons Foods, Inc. v. Willis, No. 97–4192–RDR-DJW, 191 F.R.D. 625, 632 n.1 (D. Kan. 2000)
(internal citations omitted).
Simmons Foods, 191 F.R.D. at 631 (citing State v. Maxwell, 10 Kan.App.2d 62, 63 (1984), and
K.S.A. § 60–426 (1994)).
Id. at 632.
Before addressing the merits of the privilege, the Court must decide whether it has
adequate information to do so. When a party withholds documents on the basis of attorneyclient privilege, that party bears the burden of establishing the privilege applies. 12 To meet
its burden, the objecting party must describe in detail the information it deems protected,
and must provide precise reasons for its objection.13
Generally, the withholding party makes this showing by submitting a privilege log.
The contents of a privilege log vary, but courts in the District of Kansas commonly require a
privilege log to include:
(1) A description of the document explaining whether the document is a
memorandum, letter, e-mail, etc.;
(2) The date upon which the document was prepared;
(3) The date of the document (if different from # 2);
(4) The identity of the person(s) who prepared the document;
(5) The identity of the person(s) for whom the document was prepared, as well
as the identities of those to whom the document and copies of the
document were directed, including an evidentiary showing based on
competent evidence supporting any assertion that the document was
created under the supervision of an attorney;
(6) The purpose of preparing the document, including an evidentiary showing,
based on competent evidence, “supporting any assertion that the
document was prepared in the course of adversarial litigation or in
anticipation of a threat of adversarial litigation that was real and
imminent;” a similar evidentiary showing that the subject of
communications within the document relates to seeking or giving legal
Schmitz, 2011 WL 1627010, at *7-*8 (internal citations omitted).
Id. (quoting Nat'l Union Fire Ins. Co. v. Midland Bancor, Inc., 159 F.R.D. 562, 567 (D. Kan.
1994) (other internal citations omitted)).
advice; and a showing, again based on competent evidence, “that the
documents do not contain or incorporate non-privileged underlying facts;”
(7) The number of pages of the document;
(8) The party's basis for withholding discovery of the document (i.e., the
specific privilege or protection being asserted); and
(9) Any other pertinent information necessary to establish the elements of
each asserted privilege.14
The objecting party must provide enough information in the privilege log to enable the other
party, and the Court, to assess each element of the privilege and determine its
applicability.15 Mere conclusions are insufficient, and a failure to provide supporting details
in the privilege log may result in denial of the privilege.16
After hearing the arguments of counsel during the January 3, 2017 hearing, and
having reviewed Plaintiff’s initial privilege log (ECF No. 30, Ex. 7), the Court agreed the
log was lacking under this district’s precedent discussed above.17 However, acknowledging
the effort of Plaintiff to support its objection, and the meritorious dispute regarding the
applicability and scope of the privilege, the Court declined to overrule Plaintiff’s objection
on that basis, preferring to decide the issue on the merits. Plaintiff was ordered to prepare
and serve a revised privilege log on Defendant within five days of that hearing. As ordered,
Plaintiff produced a more detailed privilege log (ECF No. 36), and the Court accepts the
amended log and turns to the merits of the privilege issue.
Schmitz, 2011 WL 1627010, at *7-*8 (citing In re Universal Serv. Fund Tel. Billing Practices
Litig., 232 F.R.D. 669, 673 (D. Kan. 2005) (internal citations omitted)).
See Fed. R. Civ. P. 26(b)(5)(A)(i)-(ii); Schmitz, 2011 WL 1627010, at *8 (citing McCoo v.
Denny's Inc., 192 F.R.D. 675, 680 (D. Kan. 2000) (other internal citations omitted)).
See Schmitz, 2011 WL 1627010, at *8 (internal citations omitted).
See supra notes 14-16 and accompanying text.
Statutory Exception to Attorney-Client Privilege
Along with the definition of privilege found in K.S.A. § 60-426, the statute includes
One such exception found in § 60-426(b)(3) is applicable when
communications between a client and his attorney “are relevant to a breach of duty by the
lawyer to his client.” The statute does not broadly expose any communication to disclosure
“simply because it is raised in litigation;” rather, it requires “either the attorney or client [to]
charge the other with a breach of duty arising from their professional relationship.” 18 The
underlying rationale for the exception is, when either an attorney or client accuses the other
of a breach of duty, “it would be unjust for a party to that relationship to maintain the
privilege so as to preclude disclosure of confidential communications relevant to the issue of
Relying on this section, Defendant argues the communications between Grissinger
and Plaintiff are not privileged at all. The communications between Grissinger and Plaintiff
regarding NorthRock were clearly “relevant to a breach of duty by the lawyer to his
Though Plaintiff admits the exclusion may have applied in the Grissinger
action—where Grissinger claimed malpractice against Acord and Bridgebuilder—the Court
agrees the exclusion may not apply in this action, where Grissinger is not a party and neither
party to this case claims malpractice. Neither party provides any authority for extending the
statutory exclusion in the underlying case to the current action, and the Court declines to do
Simmons Foods, 191 F.R.D. at 632.
K.S.A. § 60-426(b)(3).
Waiver by Voluntary Disclosure (Explicit Waiver)
Even if information is protected by attorney-client privilege, the privilege may be
waived, either through voluntary disclosure or by implied waiver.
Dealing first with
voluntary waiver, two statutes discuss explicit waiver of the privilege: K.S.A. § 60-437 and
K.S.A. § 60-426a.
Kansas evidence rule K.S.A. § 60-437 describes the waiver of privilege by previous
disclosure, explaining a person who otherwise holds a privilege has no privilege “if the
judge finds that such person . . . without coercion, or without any trickery, deception, or
fraud practiced against him or her, and with knowledge of the privilege, made disclosure of
any part of the matter or consented to such a disclosure made by anyone.”21 Defendant
claims Grissinger, as the holder of the privilege, waived the privilege by filing the
underlying lawsuit. But Plaintiff argues Grissinger did not disclose any communications to
a third party during the underlying suit—the suit was settled early on, and no public filings
contained details of communications. Plaintiff contends the act of filing the lawsuit itself,
without detailed disclosure, does not constitute explicit waiver. Arguably, Grissinger
disclosed “part of the matter”22 as contemplated by the statute. However, because the Court
finds § 60-426a more applicable, it is unnecessary to decide the ultimate issue on K.S.A. §
If voluntary disclosure of privileged information occurs in a court proceeding, both
K.S.A. § 60-426a and Fed. R. Evid. 502 offer parameters on the scope of the waiver. Both
the state and federal rules, in nearly identical language, contemplate “subject matter
K.S.A. § 60-437.
waiver,” explaining how partial waiver of the privilege will constitute a complete waiver of
the privilege as to the entire subject matter if the following elements are shown:
(1) the waiver is intentional;
(2) the disclosed and undisclosed communications or information concern the
same subject matter; and
(3) they ought in fairness be considered together.23
Both K.S.A. § 60-426a and FRE 502 are relatively recent adoptions. A review of
legislative history reveals nothing regarding the legislature’s intent in adopting K.S.A. § 60426a in 2011,24 nor does a review of caselaw reveal any Kansas state cases analyzing the
topic. But FRE 502 was adopted three years prior to the state rule.25 Not only are FRE 502
and K.S.A. § 60-426a practically identical,26 but FRE 502 “applies even if state law
provides the rule of decision.”27 Therefore, the review of caselaw analyzing FRE 502 is
appropriate,28 and a recent federal case sheds some light on the issue.
In the 2014 opinion Sprint Commc'ns Co. L.P. v. Comcast Cable Commc'ns LLC,29
this district reviewed waiver of privilege under FRE 502. Although the case examined FRE
502 and related Federal Circuit cases in the context of patent litigation, its analysis is
K.S.A. § 60-426a (a)(1)-(3); Fed. R. Evid. 502(a)(1)-(3).
See H.R. Jour., 2011 Reg. Sess. No. 62 (Kan. May 9, 2011) (introduction of section 60-426a into
S.B. 63) and S. Jour., 2011 Reg. Sess. No. 66 (Kan. June 1, 2011) (reporting H. Sub. for S.B. 63
approval on May 25, 2011).
Fed. R. Evid. 502 became effective Sept. 19, 2008. Without additional legislative history, the
Court can only speculate the adoption of FRE 502 was the impetus for the adoption of the state
The federal and state provisions use the same language, except FRE 502 includes a provision that
it applies to state proceedings, federal court-annexed arbitration proceedings, and federal courtmandated arbitration proceedings, in certain circumstances set out in the rule. 3 Kan. Law & Prac.,
Guide Kan. Evid. § 4:5 Privileged communications (5th ed.).
Fed. R. Evid. 502(f).
See, e.g., Skepnek v. Roper & Twardowsky, LLC, No. 11-CV-4102-DDC, 2014 WL 4377706, at
*5 (D. Kan. Sept. 4, 2014) (noting that, when comparing federal common law and Kansas state law
regarding privilege, “the two bodies of law do not appear to differ in any material respect.”).
No. 11-2684-JWL, 2014 WL 3611665, at *3 (D. Kan. July 22, 2014).
instructive. In that case, Sprint’s trial counsel in a previous action included in his opening
statement at trial that outside counsel “agreed with” in-house counsel’s assessment
regarding patent infringement. Although the details of the advice were not disclosed, the
ultimate conclusion was. Analyzing FRE 502, the court found by that statement, Sprint
disclosed the substance of legal advice and waived the attorney-client privilege regarding
the subject matter of the advice.30
The Sprint court thoroughly examined the standards for subject-matter waiver and
acknowledged the lack of a “bright-line rule”:
The widely applied standard for determining the scope of a waiver of attorneyclient privilege is that the waiver applies to all other communications relating
to the same subject matter. The waiver extends beyond the document initially
produced out of concern for fairness, so that a party is prevented from
disclosing communications that support its position while simultaneously
concealing communications that do not. There is no bright line test for
determining what constitutes the subject matter of a waiver, rather courts
weigh the circumstances of the disclosure, the nature of the legal advice
sought and the prejudice to the parties of permitting or prohibiting further
The court explained under Fed. R. Evid. 502(a) and its Explanatory Note, waiver extends to
undisclosed communications concerning the same subject matter if the intentionally
disclosed information “ought in fairness . . . be considered together” with the undisclosed
information.32 “[A] subject matter waiver . . . is reserved for those unusual situations in
which fairness requires a further disclosure of related, protected information, in order to
Id. at *4.
Id. at *3-*4 (quoting Fort James Corp. v. Solo Cup Co., 412 F.3d 1340, 1349–50 (Fed. Cir.
2005); citing United States v. Workman, 138 F.3d 1261, 1263 (8th Cir. 1998) (other citations
Id. at *4.
prevent a selective and misleading presentation of evidence to the disadvantage of the
adversary.”33 Therefore, the court focused on the “ultimate question of fairness.”34
Similarly here, although Grissinger’s underlying suit may not have disclosed the
minute details of his communications with BridgeBuilder, it revealed the ultimate issue of
the case—the substance of the advice BridgeBuilder gave to Grissinger—without requiring
an inferential leap. In fact, Grissinger’s Petition claimed BridgeBuilder breached its duty in
multiple ways when representing him on the NorthRock transaction. 35
Plaintiff emphasizes Grissinger’s absence from this lawsuit, the Sprint action also contained
disparate parties from the suit where waiver occurred, but the court drew similarities
between the patents at issue in the earlier case and the same patents at issue in the new
cases. Likewise, the advice Grissinger received is the focus of both this case and the
underlying action. In Sprint, Senior District Judge John W. Lungstrum found,
It certainly cannot be assumed that such information concerning Vonage's
infringement will be relevant in the present actions involving different
defendants, but because some of the same patents are at issue here, it is
possible that some portion of the law firm’s analysis could prove relevant.
Fairness dictates that defendants be permitted to test the truth of the statement
of the legal advice received, at least for purposes of discovery.36
And ultimately, fairness must determine the question before this Court. In its effort
to test the truth of Plaintiff’s claim, Defendant offers every opposition to privilege argument
Id. (citing advisory committee explanatory note to Fed. R. Evid. 502; In re Urethane Antitrust
Litig., 2011 WL 322675, at *3 (D. Kan. Jan. 31, 2011).
Although Grissinger’s Petition (ECF No. 1-1, at 31-36) also includes BridgeBuilder’s
“accountant-client” relationship with Grissinger, BridgeBuilder did not object to discovery on the
basis of an “accountant-client” privilege and the Court does not consider such an objection
preserved or address the issue herein.
Sprint, 2014 WL 3611665, at *4 (emphasis added).
available to it, to proverbially “see what sticks”—and the Court can appreciate its methods,
given the unusual facts before us. But in the multiple standards governing privilege and
waiver articulated by the parties in their arguments, the Court does find common themes:
the underlying considerations of fairness and prejudice.
In the statutory exception to privilege found in K.S.A. § 60-426(b)(3), the focus is on
the “unjust” nature of withholding the information (“it would be unjust for a party to that
relationship to maintain the privilege so as to preclude disclosure of confidential
communications relevant to the issue of breach.”).37 In K.S.A. § 60-426a (and FRE 502),
providing for explicit waiver, the ultimate consideration is one of fairness.38 Similarly, an
analysis of implied waiver39 requires consideration of whether application of the privilege
would deny the opposing party access to information vital to its defense,40 and caselaw
emphasizes the “manifest unfairness” to the opposing party.”41
Ultimately, neither Grissinger (as the privilege-holder)42 nor Plaintiff43 may use the
privilege as both a sword and a shield.44 Grissinger may not selectively use the substance of
Simmons Foods, 191 F.R.D. at 632 (analyzing K.S.A. § 60-426(b)(3)).
Sprint, 2014 WL 3611665, at *4.
See infra Section II.B.1.a.4.
Williams, 464 F. Supp. 2d at 1104–05 (quoting Hearn, 68 F.R.D. at 581).
Id. (citing Hearn, 68 F.R.D. at 581).
John Grissinger refuses to waive the attorney-client privilege for his communications with
BridgeBuilder/Acord, as evidenced by his attorney’s letter to Plaintiff’s counsel dated Nov. 16,
2016 (ECF No. 33, Ex. C).
Plaintiff argues Kansas Rule of Professional Conduct 1.6 prevents it from disclosing its
communications with Grissinger because the rule only permits disclosure in a proceeding between
attorney and client. Plaintiff cites KRPC 1.6(b)(3), which allows counsel to disclose otherwise
privileged information “to establish a claim or defense on behalf of the lawyer in a controversy
between the lawyer and the client.” (Pl.’s Opp., ECF No. 33, at 5; emphasis added by Plaintiff.) But
Plaintiff ignores the final clause of KRPC 1.6(b)(3) which reads, “or to respond to allegations in any
proceeding concerning the lawyer’s representation of the client.” Even if this clause did not apply
BridgeBuilder’s representation of him to support his malpractice action, yet refuse to allow
the representation to be examined in this related action involving the same subject matter.
Even if the opponents are not identical in both cases, the subject matter is. To allow
Plaintiff to claim it did not offer investment advice, and sue Defendant on that basis—but
not allow any party (or eventually the ultimate factfinder, for that matter) to review the
substance of the advice would be manifestly unjust and prejudicial by depriving Defendant
of the ability to meaningfully defend its case.
Implied or “At Issue” Waiver
Even if a litigant does not intentionally disclose privileged information, he “may
implicitly waive the attorney-client privilege by placing protected communications ‘at
issue.’”45 Both parties briefly address the topic of implied waiver in their briefing, and
discuss the tendency in this district to utilize an “intermediate approach.” In doing so, the
court must determine the party asserting privilege has implicitly waived the privilege when
he places protected information at issue “through some affirmative act for his own benefit,
(which the Court does not fully explore here), BridgeBuilder will be protected from ethical concerns
under KRPC 1.6(b)(4) by this order, requiring disclosure.
See, e.g., S.E.C. v. McNaul, 277 F.R.D. 439, 444 (D. Kan. 2011) (citing In re Keeper of Records,
348 F.3d 16, 24 (1st Cir. 2003) (“[i]mplying a subject matter waiver in such a case [when party puts
advice of counsel at issue] ensures fairness because it disables litigants from using the attorneyclient privilege as both a sword and a shield”); cf. Frontier Refining, Inc., 136 F.3d at 704 (stating
“a litigant cannot use the work product doctrine as both a sword and shield by selectively using the
privileged documents to prove a point but then invoking the privilege to prevent an opponent from
challenging the assertion”)). See also Simmons Foods, 191 F.R.D. at 633 (citing FDIC v. Wise, 139
F.R.D. 168 (D. Colo. 1991) (“To be sure, there is authority that attorney-client communications
cannot be used both as a sword and a shield, i.e., when a party defends the conduct which is the
subject of the suit by relying on advice of counsel.”)).
Sprint Commc'ns Co., L.P. v. Comcast Cable Commc'ns, LLC, No. 11-2684-JWL-JPO, 2015 WL
11121848, at *1–2 (D. Kan. Apr. 16, 2015) (internal citations omitted).
and to allow the privilege to protect against disclosure of such information would [be]
manifestly unfair to the opposing party.”46
Because the Court finds the disputed information discoverable under an explicit
waiver theory, it is unnecessary to reach or analyze the issue of implied waiver. Suffice it to
say, however, that in light of the focus on manifest unfairness, the Court’s conclusion would
Conclusion - Privilege
The parties here agree on one crucial detail: whether BridgeBuilder communicated
with Grissinger as an investment advisor, rather than an attorney, is the ultimate issue in this
Strictly confining the privilege “within the narrowest possible limits” to avoid
depriving the factfinder of relevant and critical information,47 the Court finds that
StarStone’s defense would be vastly crippled without access to the communications between
Grissinger and BridgeBuilder regarding the NorthRock transaction, creating fundamental
unfairness and extreme prejudice48 to StarStone.
Id. (citing Hearn, 68 F.R.D. at 581).
Stovall, 22 P.3d at 140 (internal citations omitted).
See discussions of prejudice, in the context of waiver of attorney-client privilege, in Sprint, 2014
WL 3611665, at *3 (“There is no bright line test for determining what constitutes the subject matter
of a waiver, rather courts weigh the circumstances of the disclosure, the nature of the legal advice
sought and the prejudice to the parties of permitting or prohibiting further disclosures.”) (emphasis
added; internal citations omitted). See also IMC Chemicals, Inc. v. Niro Inc., No. 98-2348-JTM,
2000 WL 1466495, at *22 (D. Kan. July 19, 2000) (“Parties may not use the privilege to prejudice
their opponent's case or to disclose some selected communications for self-serving purposes. . . . A
party may implicitly waive the privilege when it asserts a claim that in fairness requires
examination of protected communications” (emphasis added; internal quotes and citations omitted).
Although Grissinger is not a party to this suit, it is worthwhile to examine the
purpose of the attorney-client privilege.49
“The theoretical predicate underlying all
recognized privileges is that secrecy and confidentiality are necessary to promote the
relationship fostered by the privilege. Once the secrecy or confidentiality is destroyed by a
voluntary disclosure to a third party, the rationale for granting the privilege in the first
instance no longer applies.”50 Regardless of whether Grissinger disclosed the details of his
communications in the underlying case, he placed the subject matter of his communications
with BridgeBuilder in dispute when he filed a malpractice suit based on BridgeBuilder’s
advice. The fostering of the relationship between client and advisor is no longer a focus.
Under this unique circumstance, when a malpractice insurer is defending a claim by
its insured regarding the very same legal advice supporting the insured’s underlying breach
of duty action, the scope of waiver must be extended in the pursuit of truth and interest of
Without the substance of communications relied upon by the
privilege holder in the previous suit, the insurer would simply be unable to defend its case
and the factfinder left without crucial facts.
But this does not mean the scope of the waiver is unlimited. Expanding the waiver of
privilege to communications outside the NorthRock transaction goes too far. The subject
matter at issue in both the underlying malpractice action and the current case is
BridgeBuilder’s advice to Grissinger regarding NorthRock. As the court found in Sprint, 51
the Court concludes Grissinger should be deemed to have waived the attorney-client
See supra note 4 (discussing the purpose of the attorney-client privilege).
Stovall, 22 P.3d at 141.
Sprint Commc'ns Co. L.P. v. Comcast Cable Commc'ns LLC, No. 11-2684-JWL, 2014 WL
3611665, at *4 (D. Kan. July 22, 2014)
privilege with respect to the specific subject of the advice received by BridgeBuilder
concerning the NorthRock transaction. There is no basis to otherwise extend the scope of
All documents contained in the privilege log produced by Plaintiff are direct
communications between Grissinger and Plaintiff, and/or, by their descriptions, relate to the
promissory notes in question in the Grissinger action. Therefore, Defendant’s motion to
compel (ECF No. 29) is GRANTED in part. Plaintiff must produce to Defendant all 42
documents52 withheld on the basis of attorney-client privilege within 10 days of the filing
of this order.
In addition to the privilege issue, the parties disagree on the scope of production
required by Plaintiff. The primary dispute centers on whether information related to other
transactions between Plaintiff and Grissinger—beyond the NorthRock transactions—are
relevant to establish a pattern and practice of Plaintiff providing investment advice to
Legal Standard - Relevance
Fed. R. Civ. P. 26(b)(1) permits discovery of “any non-privileged matter that is
relevant to any party’s claim or defense.” Additionally, the scope of discovery must be
“proportional to the needs of the case, considering the importance of the issues at stake in
the action, the amount in controversy, the parties’ relative access to relevant information, the
See Pl.’s privilege log (ECF Nos. 30-7, 36).
parties’ resources, the importance of the discovery in resolving the issues, and whether the
burden or expense of the proposed discovery outweighs its likely benefit.”53
If the party seeking discovery meets its initial, minimal burden to demonstrate its
request is relevant, on its face,54 the resisting party cannot rely upon conclusory statements
that the requested discovery is irrelevant.55 It “must either demonstrate the discovery sought
does not come within the broad scope of relevance defined in Rule 26(b)(1), or that it is of
such marginal relevance that the potential harm caused by the discovery would outweigh the
presumption in favor of broad disclosure.”56
Disputed Discovery Requests
Plaintiff argues Defendant is engaged in a fishing expedition, seeking documents
related to numerous other transactions during the three-year time period when
BridgeBuilder/Acord acted as Grissinger’s advisor. Plaintiff contends the information is
irrelevant to Grissinger’s underlying malpractice claim, and because the documents number
in the tens of thousands, and privilege will also be an issue in their production, discovery of
the documents is disproportionate to their ultimate benefit.
Defendant maintains a number of arguments with regard to items on the privilege log
it believes are relevant but non-privileged. But the documents on the log have now been
ordered produced, so these arguments are moot.
Primarily, Defendant contends the
Fed. R. Civ. P. 26(b).
Speed Trac Techs., No. 08-212-KHV-JPO, 2008 WL 2309011, at *2 (citing Heartland Surgical
Specialty Hosp., LLC v. Midwest Div., Inc., No. 05–2164-MLB-DWB, 2007 WL 2122437, at *4 (D.
Kan. July 20, 2007)
XPO Logistics Freight, No. 16-MC-224-CM-TJJ, 2016 WL 6996275, at *4 (citing Speed Trac
Techs., No. 08-212-KHV-JPO, 2008 WL 2309011, at *3).
information outside the scope of the NorthRock transaction would assist Defendant in
showing Acord/BridgeBuilder had a pattern of providing investment advice to clients, and
could show the likelihood that the same happened in the NorthRock deal.
The parties could not agree upon the proper scope of production to 14 separate
requests, comprising 11 categories of documents. Although each category of information
will be discussed individually, the overarching theme in this Court’s ruling is this:
relevance is found only in the information directly related to the NorthRock transaction.
Because this case concerns transactions where the attorney-client privilege57 is held by at
least one non-party to this action, the Court is wary about expanding the scope of discovery,
at this time, to those transactions not directly related to the underlying Grissinger lawsuit
and NorthRock transaction.
If Defendants learn something in the production ordered here which leads it to
believe transactions outside NorthRock are necessary to its defense, further discovery and
discussion may be appropriate at a later time. However, although discovery is broad, the
Court prefers to proceed cautiously to avoid potential hazards of expanded production,
including proportionality and privilege concerns.
1st RFP No. 1:
Documents produced in response to
Grissinger’s requests for production in the Grissinger action
In this request, Defendant seeks drafts and revisions of the two promissory notes and
related agreements; generally, those documents Grissinger was provided regarding the
Although not raised by Plaintiff in the current disputes, the Court acknowledges the potential for
other privilege issues—whether attorney-client or accountant-client privileges—to be raised by
third parties if the scope of discovery is expanded. See also supra note 35.
NorthRock transaction. The parties clarified at hearing that although Grissinger served
documents requests on BridgeBuilder/Acord in the state court case, BridgeBuilder simply
responded by giving Grissinger a copy of his entire client file, and that was the extent of
discovery in the underlying action.
Because this request deals directly with the NorthRock transaction, Plaintiff’s
objection is overruled and the documents requested must be produced.
1st RFP No. 3: Documents regarding Bridgebuilder’s services
to be performed on behalf of Grissinger in any matter regarding
Like the previous request, Defendant contends through this request, it seeks any
documents reflecting investment advice. Although the Court expressed concern regarding
the time frame of the request, Defendant clarified the request is limited to the NorthRock
Because the request is narrowed to the NorthRock transaction, Plaintiff’s
objection is overruled, and Plaintiff must produce all responsive documents.
1st RFP No. 5: Documents that support Bridgebuilder’s
affirmative defense in the Grissinger action that Grissinger’s
claims were barred by the assumption of the risk
Through this request, Defendant seeks to discover emails, correspondence, or any
notes to file from Grissinger that may have documented what Acord said to him about the
This request is narrowed to the Grissinger action; therefore
Plaintiff’s objection is overruled; and all responsive documents must be produced.
1st RFP No. 9: Documents between Bridgebuilder/Acord and
any other person regarding the two NorthRock promissory notes
Bridgebuilder produced in discovery in Grissinger action
Again, although Defendant’s request seeks information “produced in discovery” in
the underlying action, the parties acknowledge minimal formal discovery occurred.
Defendant clarified it is really looking for drafts and information regarding the NorthRock
promissory notes. Because the promissory notes are those at issue in the Grissinger lawsuit,
this request is sufficiently narrowed to relevant information. Although there was some
discussion regarding the potential confidentiality of the documents, the parties are reminded
that “confidentiality” does not equate to “privilege,” and the Protective Order (ECF No. 14)
in this action will safeguard any sensitive information produced. Plaintiff’s objection is
1st RFP No. 10: Documents reflecting efforts by
Bridgebuilder/Acord to inquire of NorthRock and/or its
principals the purpose of the proceeds made available by
Grissinger through the promissory notes at issue
Through this request, Defendant seeks to discover whether BridgeBuilder/Acord told
Grissinger what the loan money was being used for, and what the relative risks may be.
Because the topic is clearly narrowed to the NorthRock transaction only, Plaintiff’s
objection is overruled and Plaintiff must produce responsive documents.
1st RFP Nos. 2, 4; 2nd RFP Nos. 1, 3: Documents and billing
statements between Bridgebuilder/Acord and Grissinger
Defendant makes arguments in its initial briefing (Def.’s Mem., ECF No. 30)
regarding production of attorney billing statements, both between BridgeBuilder/Acord and
Grissinger, and between BridgeBuilder/Acord and its defense counsel (the Spencer Fane
firm) in the Grissinger action. Defendant argued Bridgebuilder only produced proof of
payment of the invoices to its underlying defense counsel’s firm, but failed to produce any
legal bills or billing statements. Defendant contends it needs the billing statements to assess
Plaintiff’s actual damages, by verifying whether the payments to the Spencer Fane law firm
relate to the defense of the underlying action and if the charges are reasonable.
During the hearing and in its written response (ECF No. 33), Plaintiff reported every
bill regarding the NorthRock transaction was produced, and it was not Plaintiff’s intention
to withhold any billing statements regarding NorthRock. Additionally, Plaintiff’s counsel
assured the Court he contacted his client regarding disputed redactions to the Spencer Fane
billing statements, and the parties should be able to come to agreement on that issue. It
argued if Defendant had issues regarding the statements, it should have conferred with
Plaintiff before including the issue in the motion to compel.
In light of the lack of conference regarding the billing statements, Plaintiff’s motion
is denied without prejudice on this issue. At the January 3, 2017 hearing, the parties were
order to thoroughly confer regarding the production of billing statements. In the event the
parties are unable to come to an agreement, the parties may address this issue with the Court
at a later date.
2nd RFP No. 2: Documents between Bridgebuilder/Acord and
Grissinger regarding accounting services
Through this request, Defendant seeks to discover the types of services Plaintiff
provided to Grissinger. If Grissinger actually accused BridgeBuilder/Acord of accounting
malpractice, the legal malpractice policy would not apply, so Defendant wants to discover
precisely what service(s) were at issue in the underlying suit. On its face, the request is not
restricted to only the information related to NorthRock. Therefore, to the extent Defendant
seeks those documents between BridgeBuilder/Acord regarding accounting services for the
NorthRock transaction, Plaintiff’s objection is overruled and responsive documents must be
To the extent Defendant seeks information regarding accounting services
provided by BridgeBuilder/Acord to Grissinger, unrelated to NorthRock, Plaintiff’s
objections are sustained. Because no “accountant-client” privilege was raised, any newlyraised objection to this request is highly discouraged as unpreserved and untimely.58
2nd RFP No. 4: Documents between Grissinger and any person
or entity released by him in the settlement of the Grissinger
This request expands upon the previous topic. Defendant argues the request is tied
directly to the NorthRock litigation, and no privilege should apply to any third party
involved in the settlement. Again, Defendant contends it is trying to ascertain whether the
settlement was based upon legal or accounting malpractice. Although the Court understands
the rationale behind Defendants’ request, the parties acknowledge the settlement agreement
itself has been produced. Again, in an effort to minimize the effects of discovery on third
parties, Plaintiff’s objection to this request is sustained.
If this information becomes
necessary at a later date, Defendant may ask the Court for further direction.
See supra note 35.
2nd RFP No. 9: Non-privileged documents relating to services
provided to Grissinger by Acord in any transaction in which
Grissinger provided funds to a third party
Through this request, Defendant seeks to support its belief that the NorthRock
BridgeBuilder/Acord and Grissinger. But, because this request is not limited to the sole
transaction at issue in this case, and in light of potentially multiple privilege concerns,
Plaintiff’s relevance objection is sustained.
2nd RFP No. 10: Documents identifying persons with an
ownership interest in NorthRock
Plaintiff objected to this request solely on the basis of attorney-client privilege. From
the information provided on the privilege log, the only apparent privilege asserted was
Grissinger’s privilege, and as described at length above, Grissinger’s privilege is waived.
Again, the parties are reminded of the Protective Order in place to safeguard any sensitive
financial information. Because this request goes to heart of the NorthRock transaction, it is
deemed to seek relevant, non-privileged information and Plaintiff’s objections are overruled.
2nd RFP No. 11: Non-privileged documents identifying any
person who invested in or lent money to NorthRock with any
involvement of or by BridgeBuilder/Acord
Plaintiff objects to this request on the bases of privilege and relevance. Defendant
contends it simply seeks to determine who else was involved with NorthRock. If Acord
represented others, Defendant would like the opportunity to depose them or seek other
discovery showing a pattern of behavior by BridgeBuilder/Acord.
Because privilege is no longer at issue, this request is determined on relevance.
Although this request does relate only to NorthRock, the advice to Grissinger alone is the
issue in this case, so documents related to other investors do not appear relevant at this time.
Plaintiff’s objection is sustained.
Other Privilege Concerns
The final dispute between the parties was whether, if documents related to other
transactions are determined relevant, if any of the non-NorthRock documents are protected
by privilege. Because documents outside the scope of the NorthRock transaction are not
found to be relevant at this time, the Court sees no need to determine the issue of privilege
regarding any such documents.
During the January 3, 2017 hearing, Defendant orally requested the insurance
applications submitted by Plaintiff after the NorthRock transaction (see Pl.’s Resp. to Def.’s
Second Requests for Production, ECF No. 30, Ex. 3). Defendant explained it is seeking
those disclosures or applications that describe the NorthRock litigation, and asked the Court
to add those documents to this order. However, because this issue was not addressed in the
pending motion to compel, the Court instructed counsel to confer regarding this issue. This
will allow Plaintiff time to review Defendant’s request and the status of its current
production. The Court will preserve this issue for later review, but in light of the Court’s
rulings enclosed here, the Court is hopeful the parties can resolve this issue without
In light of the above discussion, the Court orders as follows:
IT IS THEREFORE ORDERED that Defendant’s Motion to Compel (ECF No.
29) is GRANTED in part and DENIED in part as set forth above. Plaintiff must produce
to Defendant all documents contained on its privilege log (ECF No. 36) within 10 days of
the filing of this order.
IT IS FURTHER ORDERED that Plaintiff produce to Defendant those documents
referenced more specifically in Sections II.B.2(b)(i)-(xi) above.
IT IS SO ORDERED.
Dated at Wichita, Kansas this 8th day of March 2017.
s/ Gwynne E. Birzer
GWYNNE E. BIRZER
United States Magistrate Judge
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