HEDGER et al v. BAR HARBOR TRUST SERVICES

Filing 33

DECISION AND ORDER granting in part and denying in part 25 Motion to Quash. By MAGISTRATE JUDGE JOHN C. NIVISON. (MFS)

UNITED STATES DISTRICT COURT
DISTRICT OF MAINE
STEPHEN HEDGER, et al.,

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Plaintiffs,
v.

BAR HARBOR TRUST SERVICES,
Defendant

1:17-cv-00087-NT

DECISION AND ORDER ON
MOTION TO QUASH
In this action, Plaintiffs Stephen, Matthew, Adam, and Douglas Hedger, and Sarah
English, claim Defendant Bar Harbor Trust Services breached its legal obligations in its
capacity as trustee of the Frank Hedger Trust and the Nathalie Hedger Trust. Plaintiffs
assert claims of breach of trust (count I), breach of fiduciary duty (count II), negligence
(count III), and accounting (count IV).
The matter is before the Court on the Joint Motion to Quash filed on behalf of
Plaintiffs and their legal counsel in this case, Daniels, Porco and Lusardi, LLP, in
connection with a subpoena Defendant served on Daniels, Porco and Lusardi, LLP. (Joint
Motion to Quash, ECF No. 25.) In addition, the parties have raised a related issue regarding
Plaintiff’s response to Defendant’s request for production of documents.
Background
Plaintiffs are the grandchildren of Frank and Nathalie Hedger, and the children of
Robert Hedger. Frank and Nathalie Hedger each established a trust, which trusts included
as beneficiaries their children and their grandchildren. (Complaint ¶¶ 30 – 37.) In 2001,

Defendant served as the trustee of both the Frank Hedger and Nathalie Hedger trusts. (Id.
¶¶ 38 – 40.)
Robert Hedger died on December 22, 2015, and his estate was probated in Florida.
(Id. ¶ 29.) The Last Will and Testament of Robert A. Hedger named as its sole beneficiary
the Robert Hedger Revocable Trust. Plaintiff Sarah English served as the personal
representative of the Estate, and she is the trustee of the Robert Hedger Revocable Trust.
Plaintiffs in this action are the sole beneficiaries of the Robert Hedger Revocable Trust.
In addition to its representation of Plaintiffs in this action, in the past, the New York
law firm of Daniels, Porco and Lusardi (DPL) served as counsel to Robert Hedger. DPL
also represented Sarah English, in her capacity as trustee of the Robert Hedger Revocable
Trust, following Robert Hedger’s death, when Sarah English also served as personal
representative of the Estate of Robert Hedger.
Beginning approximately in August 2012 and ending approximately in August 2013,
Robert Hedger retained DPL for purposes of an estate planning matter. (Affidavit of G.
Brian Morgan, Esq. ¶ 4, ECF No. 25-1.) During its representation of Robert Hedger, DPL
did not counsel Robert Hedger concerning the Frank and Nathalie Hedger Trusts. (Id. ¶ 6.)
In connection with DPL’s representation, on December 7, 2012, Attorney Morgan wrote
to Joseph Pratt, then Defendant’s Managing Director and Trust Officer. In his letter,
Attorney Morgan requested information regarding Defendant’s disbursement of trust funds
to pay costs and expenses associated with Robert Hedger’s home in Corea, Maine.
(Defendant’s Opposition, Ex. A, ECF No. 26-1.) In July 2013, DPL sent an invoice to
Robert Hedger for services rendered. (Id., Ex. C, ECF No. 26-3.) Robert Hedger
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forwarded the DPL invoice to Defendant for payment, and Defendant paid the invoice with
funds drawn against the Account of Frank H Hedger T/U/W FBO Robert A Hedger. (Id.;
Affidavit of G. Brian Morgan ¶ 7, ECF No. 25-1.)
In August 2013, DPL, at the request of Robert Hedger, provided Defendant with a
copy of Robert Hedger’s power of attorney, which power of attorney designated Sarah
English and Michael Sjostrom (Robert’s brother) as Robert Hedger’s agents. (Defendant’s
Opposition, Ex. D, ECF No. 26-4.)
In 2012, Robert Hedger authorized Sarah English to speak with his DPL attorneys
about his estate planning matter. According to Ms. English, Robert English also later
authorized his son, Stephen Hedger, to speak with DPL about the same matter, and she and
her brother acted as agents for Robert Hedger and assisted in facilitating his
communications with counsel regarding an estate planning matter. (Joint Reply, Statement
of Sarah English, ECF No. 29-7.)
After Robert Hedger’s death, DPL represented Sarah English in her capacity as
trustee of the Robert Hedger Revocable Trust, which trust was the sole beneficiary of the
Estate of Robert Hedger. (Plaintiffs’ Joint Reply, Second Affidavit of G. Brian Morgan ¶¶
1 – 2, ECF No. 29-6.) DPL did not probate the will. Instead, the Estate retained Florida
counsel for that purpose. (Id. ¶ 3.) Nevertheless, on September 6, 2016, Attorney Morgan
wrote to Defendant to learn “the amount currently in the account” and other details, and to
obtain a statement of the account in order to process the Estate. In his letter, Attorney
Morgan asserted that DPL represented the Estate, and he attached Letters of Administration
from the Florida probate court and a statement from Sarah English confirming her
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appointment as personal representative of the Estate. (Defendant’s Opposition, Ex. E, ECF
No. 26-5.) Attorney Morgan maintains that his assertion that DPL represented the Estate
was made in error and, in fact, DPL represented Sarah English in her role as trustee of the
Robert Hedger Revocable Trust, the sole beneficiary of the Last Will and Testament of
Robert Hedger, and provided Ms. English with “trust administration assistance pertaining
to the Revocable Trust.” (Plaintiffs’ Joint Reply, Second Affidavit of G. Brian Morgan ¶¶
1, 5.)
In March 2017, Plaintiffs commenced this action and alleged that Defendant, in its
role as the trustee of the Frank and Nathalie Hedger Trusts, failed to exercise proper
fiduciary oversight and discretion concerning the expenditure of trust funds. In particular,
Plaintiffs allege that Defendant made distributions to persons not related to Robert Hedger
or Plaintiffs and for whom Robert Hedger and Plaintiffs had no obligation of support, failed
to make distributions to Plaintiffs as contemplated by the terms of the trusts, failed to
provide Plaintiffs with the statements regarding distributions from the trusts, and made
distributions to Robert Hedger in excess of the amount needed for his education,
comfortable support and maintenance. (Complaint ¶¶ 43 – 48, 51, 57 – 63, 77 – 83, 98 –
105.)
In November 2017, Defendant served DPL with a subpoena for production of
documents. (ECF No. 25-3.) Through the subpoena, Defendant requests the following
documents and records:
1. All documents and files ever created or maintained by [DPL] for
legal services provided to Robert Hedger and/or the Estate of Robert Hedger.

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2. All documents pertaining to work performed by [DPL] on behalf of
Robert Hedger and/or the Estate of Robert Hedger, including without
limitation, legal advice provided, legal analysis, correspondence, billing
records, invoices, time sheets, legal memoranda and/or research, notes, estate
planning documents, and the like.
3. All records pertaining to distributions requested from, or made by,
the Frank Trust and/or the Nathalie Trust for services provided by [DPL] on
behalf of Robert Hedger and/or the Estate of Robert Hedger.
4. All documents pertaining to the appointment of a Personal
Representative (“PR”)/Executor for the Estate of Robert Hedger.
5. All documents pertaining to the PR’s performance of duties,
including without limitation, any legal services provided by [DPL] to the PR
and/or the Estate of Robert Hedger.
6. All records pertaining to letters of engagement, notices of conflict
and/or conflict waivers with regard to the representation by [DPL] of Robert
Hedger, the Estate of Robert Hedger, the PR, Stephen Hedger, Matthew
Hedger, Adam Hedger, Douglas Hedger, and/or Sarah English.
Following service of the subpoena, Plaintiffs and DPL filed the Joint Motion to
Quash. (ECF No. 25.) Upon review of Defendant’s opposition to the motion (ECF No.
26) and Plaintiffs’/DPL’s reply in support of the motion (ECF No. 29), the Court conducted
a telephone conference to discuss the parties’ respective positions. During the conference,
the parties identified an additional issue regarding the adequacy of Plaintiffs’ response to
Defendant’s request for production of documents. Citing the attorney-client privilege,
Plaintiffs have withheld from production certain documents related to DPL’s
representation of Sarah English in her capacity as the trustee of the Robert Hedger
Revocable Trust.
Plaintiffs and DPL later agreed to produce non-privileged documents despite their
objection that the subpoena is overbroad and seeks irrelevant information. (Report of
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Telephone Conference and Order, ECF No. 32.) As to the documents for which a privilege
was asserted, the Court concluded that in camera review was warranted, and directed DPL
and Plaintiffs to submit to the Court the documents responsive to (1) Defendant’s subpoena
request and (2) Defendant’s second request for production of documents. (Id.) The Court
has reviewed the documents.
Discussion
Federal Rule of Evidence 501 defines, in the first instance, the application and scope
of the attorney-client privilege. The Rule provides:
The common law—as interpreted by United States courts in the light of
reason and experience—governs a claim of privilege unless any of the
following provides otherwise:
• the United States Constitution;
• a federal statute; or
• rules prescribed by the Supreme Court.
But in a civil case, state law governs privilege regarding a claim or defense
for which state law supplies the rule of decision.
Fed. R. Evid. 501. As the Rule reflects, where state law applies to the claim or defense, as
in this diversity action, the scope of the attorney-client privilege and any limitations on its
reach are determined by state law.
Plaintiffs and DPL argue the Court must consider both New York law and Maine
privilege law because New York has the most significant connection to the subject
communications (DPL is a New York law firm and the representation it provided to Robert
Hedger occurred in New York), whereas Maine law would otherwise govern the

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admissibility of privileged communications in a Maine court. (Joint Motion to Quash at 9
– 10, citing Restatement (Second) of Conflict of Laws § 139.)
“A federal court sitting in diversity must apply the conflict of law rules of the state
in which it sits, in this case Maine.” Walker v. Unum Life Ins. Co. of Am., 530 F. Supp. 2d
351, 353 (D. Me. 2008). In Maine, choice of law is decided by determining which state
has the more significant contacts to the subject matter of the litigation, considering such
factors as where the injury occurred, where the conduct giving rise to the action occurred,
where the parties are located, and where the parties’ relationship is centered. State Farm
Mut. Auto. Ins. Co. v. Koshy, 2010 ME 44, ¶ 22, 995 A.2d 651, 660. “These contacts are
to be evaluated according to their relative importance with respect to the particular issue.”
Id. (quoting Restatement (Second) Conflict of Laws § 145(2)). When the particular issue
involves the attorney–client privilege, however, the Restatement focuses the inquiry on
which state “has the most significant relationship with the communication.” Restatement
(Second) of Conflict of Laws § 139. If the law of state with the most significant
relationship to the communication protects the communication against admission, as a
general rule, the communication will be protected. Id. However, if the law of the state
with the most significant relationship would not protect the communication, but the forum
state’s law would protect it, the communication ordinarily will not receive the protection
of the forum state’s law, “unless the admission of such evidence would be contrary to the
strong public policy of the forum.” Id.

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A. Subpoena Privilege Log
The DPL privilege log lists 217 documents consisting of communications between
and/or among (1) DPL counsel, in particular Attorney Morgan, and Robert Hedger in
connection with legal services; (2) Attorney Morgan, other attorneys and support staff
within DPL, and outside attorneys retained or consulted to provide legal advice or services
related to the estate planning services DPL provided to Robert Hedger; (3) communications
between and/or among Attorney Morgan, Sarah English and Stephen Hedger, related to an
estate planning matter involving their father, Robert Hedger; and (4) communications
between Attorney Morgan and third parties unaffiliated with a legal practitioner.
Defendant challenges the assertion of DPL and Plaintiff that communications between DPL
and Sarah English and Stephen Hedger are within the attorney-client privilege.
Based on the subject matter of the communications, i.e., estate planning services
provided by a New York firm on behalf of a grantor/settlor with divided residency between
Florida and Maine, which services included the execution of a trust instrument in New
York naming a New York trustee, the Court concludes New York is the state with the most
significant relationship with the communications and that New York law would provide
the rule of decision as to whether the communications are within the attorney-client
privilege and whether the privilege was waived.
New York law protects confidential communications made both “between
[an] attorney or his or her employee and the client in the course of
professional employment,” N.Y. C.P.L.R. § 4503(a)(1), and “for the purpose
of obtaining legal advice and directed to an attorney who has been consulted
for that purpose,” Rossi v. Blue Cross & Blue Shield of Greater N.Y., 73
N.Y.2d 588, 593, 542 N.Y.S.2d 508, 540 N.E.2d 703 (1989) (internal
quotation marks omitted) (quoting In re Grand Jury Subpoena Served upon
Bekins Record Storage Co., 62 N.Y.2d 324, 329, 476 N.Y.S.2d 806, 465
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N.E.2d 345 (1984)). Thus, “[t]he attorney-client privilege shields from
disclosure any confidential communications between an attorney and his or
her client made for the purpose of obtaining or facilitating legal advice in the
course of a professional relationship.” Ambac Assurance Corp. v.
Countrywide Home Loans, Inc., 27 N.Y.3d 616, 623, 57 N.E.3d 30 (2016)
(citing N.Y. C.P.L.R. § 4503(a)(1)).
Windsor Sec., LLC v. Arent Fox LLP, 273 F. Supp. 3d 512, 517 (S.D.N.Y. 2017).
“[C]ommunications made to counsel through ... one serving as an agent of ... [the]
client to facilitate communication, generally will be privileged.” Stroh v. Gen. Motors
Corp., 213 A.D.2d 267, 268 (N.Y. App. Div. 1995) (quoting People v. Osorio, 549 N.E.2d
1183, 1186 (N.Y. 1989)). The pertinent factors are “whether the client had a reasonable
expectation of confidentiality under the circumstances,” Osorio, 549 N.E.2d at 1186, and
whether the third party communication “was necessary for the client to obtain informed
legal advice.” Narayanan v. Sutherland Glob. Holdings Inc., 285 F. Supp. 3d 604, 611
(W.D.N.Y. 2018). To be necessary “the third party must be ‘nearly indispensable or serve
some specialized purpose in facilitating the attorney-client communications.’” Id. (quoting
Allied Irish Banks v. Bank of Am., N.A., 240 F. R. D. 96, 103 (S.D.N.Y. 2007)).
A number of the communications identified in the DPL privilege log are between
counsel and Sarah English. Some were shared with or originated by Stephen Hedger.
Sarah English asserts that she and her brother Stephen acted as agents of their father and
facilitated his communications with counsel regarding an estate planning matter. (Joint
Reply, Statement of Sarah English, ECF No. 29-7.)
The communications identified in the privilege log concern Robert Hedger’s estate
planning needs regarding certain real property located in Maine and Florida.

The

communications principally involve Sarah English. Significantly, in an email
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communication to Sarah English in December 2012, Attorney Morgan asserts that he had
Robert Hedger’s permission to discuss the estate matter with Ms. English. Subsequent
communications involving DPL and Sarah English convince the Court that Ms. English
communicated frequently with counsel and her father regarding the estate planning matter.
In fact, the communications suggest that Sarah English was DPL’s principal contact person
regarding the estate planning matter. Given Sarah English’s significant role in her father’s
estate planning matter, which involvement was consistent with her designation as personal
representative of the Estate of Robert Hedger and her role as trustee of the Robert Hedger
Revocable Trust, which is the sole beneficiary of the Last Will and Testament of Robert
Hedger, the Court is satisfied that Sarah English was acting as an agent for her father during
her communications with DPL, and that her involvement “was necessary for [Robert
Hedger] to obtain informed legal advice” regarding the estate planning matter. Narayanan,
285 F. Supp. 3d at 611. The communications exclusively between DPL and Sarah English,
therefore, are within the attorney-client privilege.
The Court, however, is not persuaded that the communications involving Stephen
Hedger are within the privilege. The record establishes that Sarah English is the person
with whom DPL regularly communicated, and that Stephen Hedger’s involvement was not
necessary for Robert Hedger to obtain the legal services rendered by DPL. Accordingly,
the communications to which Stephen Hedger was a party are not within the attorney-client
privilege.
Based on the above findings and conclusions, the attorney-client privilege does not
apply to the documents identified in the following entries in the privilege log: 3, 17, 22,
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23, 35, 85, 91, 97. The privilege also does not apply to 109, counsel’s communication with
“the Villages,” and to 157 and 162, counsel’s communication with the “Paul Bunyon Road
Association.”
Plaintiffs and DPL also argue that any non-privileged documents are not relevant.
(Joint Motion at 1.) Pursuant to Federal Rule of Civil Procedure 26(b)(1), “[p]arties may
obtain discovery regarding any nonprivileged matter that is relevant to any party’s claim
or defense and proportional to the needs of the case.” Additionally, “[i]nformation within
the scope of discovery need not be admissible in evidence to be discoverable.” Id. After
an in camera review, although the documents do not necessarily relate directly to the trusts
that are the subject of this action, because the information is to some degree probative of
Robert Hedger’s resources, the Court concludes that the documents in the following log
entries are relevant: 3, 171, 22, 23, 35, 912, 97.
B. Privilege Log For Request for Documents
Although the parties have not provided the Court with a copy of Defendant’s
requests for production of documents, upon an in camera review of the documents
identified in the privilege log for Defendant’s request, the disputed documents appear to
be communications related to DPL’s representation of Sarah English in her role as the
trustee of the Robert Hedger Revocable Trust, and to services provided to Sarah Hedger
by the Law Offices of Patrick Sullivan in connection with the probate of Robert Hedger’s
DPL can redact that portion of the document that concerns Stephen Hedger’s request for advice regarding
a personal matter as the information is not relevant to this proceeding.
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DPL can redact that portion of the document that concerns Stephen Hedger’s request for advice regarding
a personal matter as the information is not relevant to this proceeding.
2

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estate in a Florida probate court. Under the circumstances, the Court is persuaded that
Sarah English was a client of DPL and the Law Offices of Patrick Sullivan.

The

communications are thus within the attorney-client privilege.
Conclusion
Based on the foregoing analysis and following the Court’s in camera review, the
Court grants in part and denies in part the Joint Motion to Quash. Specifically, the Court
orders that Plaintiffs and DPL are not required to produce the documents identified in the
privilege log for the subpoenaed documents except documents numbered 3, 17, 22, 23, 35,
91, and 97 in the subpoena privilege log. As to Defendant’s requests for production of
documents, the Court denies Defendant’s request for an order compelling production of the
documents that are subject of the privilege log. 3
NOTICE
Any objections to this Decision and Order shall be filed in accordance with Federal
Rule of Civil Procedure 72.

/s/ John C. Nivison
U.S. Magistrate Judge
Dated this 18th day of May, 2018.

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The privilege log identifies various communications. Review of the documents revealed that some of the
communications include attachments of other documents, which independently would not be within the
attorney-client privilege. This Decision and Order shall not be construed to determine whether the attached
documents are within Defendant’s requests or are otherwise discoverable.
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