Waite Schneider Bayless & Chesley Co., LPA v. Davis

Filing 55

ORDER denying 46 Motion to Compel. Signed by Magistrate Judge Terence P Kemp on 11/27/12. (jcw1)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF OHIO
EASTERN DIVISION

Waite, Schneider, Bayless
& Chesley Co. L.P.A.,
Plaintiff,

:
Case No. 1:11-cv-0851
:
JUDGE JAMES L. GRAHAM

v.

:
Magistrate Judge Kemp

Allen L. Davis,

:

Defendant.

:
OPINION AND ORDER

This case is before the Court to consider the motion to
compel filed by plaintiff Waite, Schneider, Bayless & Chesley Co.
L.P.A. (the Firm).

Defendant Allen L. Davis has opposed the

motion and the motion has been fully briefed.

For the following

reasons, the motion to compel will be denied.
I.

Background

The Firm filed this collection case against Mr. Davis
seeking the recovery of legal fees incurred in connection with
its representation of Mr. Davis in litigation involving CNG, a
corporation of which he was the minority shareholder, and his
sons, the controlling shareholders of CNG.

That litigation is

referred to by the parties as the “Hamilton County Action.”
Davis filed an answer and counterclaim.

Mr.

In his counterclaim, Mr.

Davis asserts claims of breach of contract, breach of fiduciary
duty, and malpractice, and requests a declaratory judgment
holding that the Firm is not entitled to a fee of any kind.
As is relevant to the current motion, Mr. Davis’s breach of
contract claim arises from the Firm’s alleged refusal to
represent him in what the parties refer to as “other matters” or
“Other Actions.”

These other matters are identified in the

counterclaim as the “Tax Court Litigation,” the “Sarasota
Litigation,” and the “Florida Close Corporation Agreement
Litigation.”

Mr. Davis was represented by Baker & Hostetler in

the Tax Court Litigation, by Shumaker, Loop & Kendrick in the
Florida Close Corporation Agreement Litigation and the Sarasota
Litigation, and by Livingston, Patterson, Strickland & Siegel in
the Sarasota Litigation.

Baker & Hostetler also represented Mr.

Davis in connection with the negotiation of his sale of stock
back to CNG following the agreed dismissal of the Hamilton County
Action.
II.

The Parties’ Positions

The subject of the Firm’s motion to compel is a request for
production of documents directed to Mr. Davis seeking documents
relating to the Other Actions, including attorney work product,
and communications between Mr. Davis and his other attorneys
retained in those actions.

According to the motion to compel,

Mr. Davis invoked the attorney-client privilege and work product
doctrine and responded to the discovery request with a 215-page
privilege log, a copy of which is attached to the motion.
The Firm believes, however, that it is entitled to this
information under the self-protection exception to the attorneyclient privilege as recently set forth by the Ohio Supreme Court
in Squire, Sanders & Dempsey, LLP v. Givaudan Flavors Corp., 127
Ohio St.3d 161 (2010).
According to the Firm, under the Ohio Supreme Court’s
holding in that case, the self-protection exception is not
limited to communications between an attorney and a client when
that relationship has been put in issue by the client, as in a
fee dispute or malpractice action.

Rather, the Firm argues that

Squire Sanders interpreted the exception to allow discovery of
confidences between the client and other attorneys when they are
“necessary” to the accused attorney’s defense in a client2

initiated action.

Adding support to its interpretation of Squire

Sanders, the Firm notes that, in that case, the Ohio Supreme
Court held that the law firm was entitled to privileged
communications between its former client and “non-Squire Sanders
lawyers.”

Further, the Firm asserts, again relying on Squire

Sanders, that any attorney work product is discoverable to the
same extent that the self-defense exception applies.

The Firm

cites to several cases from various jurisdictions where courts
have compelled discovery in circumstances it contends are similar
to those presented here.
Arguing further, the Firm contends that not only is it
entitled to discovery of the requested work product and
privileged communications from Mr. Davis’s other attorneys, the
scope of the discovery to which it is entitled is extremely
broad.

That is, the Firm asserts that Mr. Davis’ counterclaim

allegations are very broad and, therefore, the scope of its
discovery must be equally so.

Accordingly, the Firm’s position

is that the discovery to which it is entitled “includes
everything in the possession or control of [other] counsel
retained by Davis.”

The Firm cites to other state court cases in

which it contends courts have upheld broad scopes of discovery in
similar circumstances.
In response, Mr. Davis agrees that Ohio recognizes the
self-protection exception and that it requires disclosure of
otherwise protected communications between the former attorney
and former client.

Mr. Davis contends that, consistent with this

application of the self-protection exception, he has produced
communications between himself and the Firm.

He disagrees,

however, with the Firm's assertion that the self-protection
exception extends to privileged communications between a former
client and the former client's other attorneys.

He contends that

Squire Sanders simply cannot be read in this way.
3

To the extent

that in Squire Sanders communications from other attorneys were
required to be disclosed, these other attorneys were not outside
counsel but the client's in-house counsel, or, that is, the
client itself.
Further, Mr. Davis asserts that the cases cited by the Firm
do not address the self-protection exception but instead rely on
the doctrine of waiver as the basis for finding discoverable a
former client's communications with other attorneys.
Additionally, he argues that in these cases relying on waiver,
the other attorneys whose communications were found discoverable
had been engaged either as co-counsel or subsequent counsel in
the matter about which the former client and former attorney were
in dispute.

Mr. Davis contends that the situation here is easily

distinguishable because none of his other attorneys were
co-counsel or subsequent counsel in the Hamilton County action the only case which he argues is relevant to his malpractice
claim.
Further addressing the waiver issue, Mr. Davis recognizes
that the Firm did not raise the issue and argues that the Firm
cannot raise the issue now nor could it prevail on the issue had
it been raised.

According to Mr. Davis, there is no express

waiver here so the issue can only be one of implied waiver.

Mr.

Davis contends that Ohio courts apply the test set forth in Hearn
v. Rhay, 68 F.R.D. 574 (E.D. Wash. 1975), requiring that (1) the
assertion of the attorney-client privilege is the result of some
affirmative act by the asserting party, (2) as a result of the
affirmative act, the asserting party has put the protected
information at issue by making it relevant, and (3) the
application of the privilege would deny the opposing party access
to information vital to its defense.

Mr. Davis devotes much of

his response to contending that, under this test, no waiver has
occurred.

Finally, Mr. Davis argues that, because the
4

self-protection exception does not apply to make his
communications with other attorneys discoverable, the work
product of his other attorneys also is not discoverable.
In reply, the Firm outlines what it construes as concessions
by Mr. Davis supporting its position.

Further, the Firm argues

that Mr. Davis' attempts to distinguish Squire Sanders are based
on a "misreading" of that decision.

The Firm expands upon its

position that the Squire Sanders court specifically allowed
discovery from the client's non-Squire Sanders attorneys.
Additionally, the Firm argues that Mr. Davis has failed to
distinguish the authority on which it relies.

The Firm contends

that whether the issue is viewed as one of waiver or as an
exception to the privilege is of no consequence.

Rather, the

Firm explains that the underlying principle of fairness sought to
be enforced under either approach is the same - preventing the
attorney client privilege from being used as both a shield and a
sword.

With respect to Mr. Davis' attempts to distinguish its

cited cases on grounds that they involved attorneys who were
engaged as either co-counsel or subsequent counsel, the Firm
contends that this distinction has no impact here.

The Firm

asserts that this is so because, as Mr. Davis has represented to
this Court, the Hamilton County Action and the Other Actions
involved the same subject matter.
Finally, the Firm asserts that it did not make a waiver
argument and Mr. Davis' attempt to focus on the issue of waiver
is merely a diversionary tactic.

According to the Firm, it did

not make such an argument because, under Ohio law, there is no
implied waiver of the attorney-client privilege.

In making this

argument, the Firm relies, in part, on Jackson v. Greger, 110
Ohio St.3d 488 (2006), as establishing that waiver of the
attorney-client privilege in Ohio is governed solely by statute.
In summary, the Firm, relying squarely on the Squire
5

Sanders decision, makes three assertions: 1) the self-protection
exception to the attorney-client privilege permits the disclosure
to the Firm of communications between Mr. Davis and his counsel
in the Other Actions; 2) based on Mr. Davis’ allegations, the
scope of discovery is necessarily broad; and 3) the attorney work
product of counsel in the Other Actions is discoverable.

Mr.

Davis argues that the Squire Sanders decision simply cannot be
read as the Firm contends.

To the extent that Mr. Davis attempts

to characterize the issue in this case as one of waiver, the Firm
specifically asserts that it is not arguing its position in terms
of waiver because, as it reads Jackson, Ohio does not recognize
implied waiver of the attorney-client privilege.

Thus, the

Firm’s motion presents one primary question for resolution:
whether, under Ohio law, the self-protection exception to the
attorney-client privilege permits the disclosure to the Firm of
communications between Mr. Davis and his counsel in the Other
Actions.

If the Court disagrees with the Firm’s reading of

Squire Sanders, the Court need not consider any further issues
raised by the motion to compel.

The Court will turn now to a

discussion of the Squire Sanders decision.
III.

Analysis

At the outset, the Court notes that there is no choice of
law issue here and, as discussed above, the starting point for
the Court’s analysis is the Ohio Supreme Court decision in
Squire, Sanders & Dempsey, LLP v. Givaudan Flavors Corp., 127
Ohio St.3d 161 (2010).

In that case, the law firm of Squire

Sanders sued a former client, Givaudan, for breach of contract
and legal fees.

Givaudan counterclaimed raising, among other

claims, legal malpractice.

Squire Sanders sought document

discovery relating to its representation of Givaudan and
Givaudan’s decision to terminate the representation.

Givaudan

objected on grounds of attorney-client privilege and the work6

product doctrine.

When Squire Sanders deposed Givaudan’s former

and then current in-house counsel, Givaudan again asserted
attorney-client privilege and the work-product doctrine.

Squire

Sanders moved to compel both the production of documents and the
testimony of in-house counsel.

The trial court granted the

motion, directing Givaudan to produce the documents and directing
the in-house counsel to answer questions regarding the
Givaudan/Squire Sanders relationship.

The appellate court,

viewing the issue as one of waiver, reversed.

On appeal to the

Ohio Supreme Court, Squire Sanders argued that the common-law
self-protection exception to the attorney-client privilege
applied and that there was no privilege for Givaudan to assert or
waive.

It also argued that the good cause requirement for

obtaining attorney work product was satisfied.

Finally, Squire

Sanders asserted that it was error for the appellate court to
focus on the issue of waiver when such an exception applied.
Stating that the central issue before it was whether Ohio
recognizes the self-protection exception, the Ohio Supreme Court
explained the exception at some length as follows:
At common-law, “[a]n exception to the
attorney-client privilege permits an attorney to reveal
otherwise protected confidences when necessary to
protect his own interest.” Levine, Self–Interest or
Self–Defense: Lawyer Disregard of the Attorney–Client
Privilege for Profit and Protection (1977), 5 Hofstra
L.Rev. 783. This exception provides that “when an
attorney becomes involved in a legal controversy with a
client or former client, the attorney may reveal any
confidences necessary to defend himself or herself or
to vindicate his or her rights with regard to the
disputed issues.” 1 Stone & Taylor, Testimonial
Privileges (2d Ed.1995) 1–177, Section 1.66. See also
Mitchell v. Bromberger (1866), 2 Nev. 345; 1 McCormick
on Evidence (6th Ed.2006) 414, Section 91.1.
...
Further, the self-protection exception to the
attorney-client privilege permitting the attorney to
testify also applies when the client puts the
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representation at issue by charging the attorney with a
breach of duty or other wrongdoing. Weissenberger's
Ohio Evidence, id.; 1 Giannelli & Snyder, Evidence, at
342. Courts recognize that “ ‘[t]he attorney-client
privilege cannot at once be used as a shield and a
sword.’ ” In re Lott (C.A.6, 2005), 424 F.3d 446, 454,
quoting United States v. Bilzerian (C.A.2, 1991), 926
F.2d 1285, 1292. Thus, a client may not rely on
attorney-client communications to establish a claim
against the attorney while asserting the
attorney-client privilege to prevent the attorney from
rebutting that claim.
Rather, “the attorney-client privilege exists to
aid in the administration of justice and must yield in
circumstances where justice so requires,” Moskovitz v.
Mt. Sinai Med. Ctr., 69 Ohio St.3d at 661, 635 N.E.2d
331. The same considerations of justice and fairness
that undergird the attorney client privilege prevent a
client from employing it in litigation against a lawyer
to the lawyer's disadvantage. Wolfram, Modern Legal
Ethics (1986) 308, Section 6.7.8; Wright & Miller,
Federal Practice & Procedure (1997, Supp.2010), Section
5503; Restatement (Third) of the **543 Law Governing
Lawyers, Section 83, Comment b.
Thus, courts apply the exception because “[i]t
would be a manifest injustice to allow the client to
take advantage of [the attorney-client privilege] to
the prejudice of his attorney * * * [or] to the extent
of depriving the attorney of the means of obtaining or
defending his own rights.” Mitchell v. Bromberger, 2
Nev. 345; see also Doe v. A Corp. (C.A.5, 1983), 709
F.2d 1043, 1048–1049; Daughtry v. Cobb (1939), 189 Ga.
113, 118, 5 S.E.2d 352; Stern v. Daniel (1907), 47
Wash. 96, 98, 91 P. 552; Koeber v. Somers, 84 N.W. at
995.
Squire Sanders, 127 Ohio St.3d at 169-172.
In concluding that Ohio recognized the self-protection
exception, the Ohio Supreme Court further stated:
Our decision today also comports with Prof.Cond.R.
1.6(b)(5), which provides:
“A lawyer may reveal information relating to the
representation of a client, including information
protected by the attorney-client privilege under
applicable law, to the extent the lawyer reasonably
8

believes necessary * * *
“(5) to establish a claim or defense on behalf of
the lawyer in a controversy between the lawyer and the
client * * *.” (Emphasis sic.)
Further, Comment [10] to Prof.Cond.R. 1.6 explains
that an attorney has a right to respond to the
allegations of a client in a lawsuit that the attorney
committed a wrong against the client. Comment [11] also
specifies that an attorney may prove the legal services
rendered to a client in an action to collect a fee,
noting that this aspect of Prof.Cond.R. 1.6(b)
“expresses the principle that the beneficiary of a
fiduciary relationship may not exploit it to the
detriment of the fiduciary.”
Ohio recognizes the self-protection exception to
the attorney-client privilege, and that exception
applies in this situation. Therefore, R.C. 2317.02(A)
does not prevent an attorney from responding to
allegations that the attorney wronged a client or from
establishing the reasonable value of the legal services
rendered to a client to the extent that such evidence
is necessary to establish a claim or defense on behalf
of the attorney in litigation between the attorney and
the client.
Squire Sanders, 127 Ohio St.3d, at 173.
This detailed explanation of the self-protection exception
does not support the interpretation urged by the Firm.

As the

very concept of self-protection implies, the above discussion
confirms that the exception applies only to permit an attorney to
reveal confidences when necessary to protect himself or herself
in the context of a legal controversy with a client or former
client.

Any other interpretation stands contrary to the common

understanding of the exception as set forth in the significant
authority relied upon by the Ohio Supreme Court.

As applied

here, the self-protection exception would allow the disclosure of
confidences only between the Firm (the accused attorney) and Mr.
Davis (the client) because they are involved in a legal

9

controversy (this case).

The idea that counsel who are not

engaged in a legal controversy with a client or former client
would somehow be permitted to reveal such a client’s confidences
in the name of “self-protection” simply defies the very
definition of the exception.
In the concluding paragraphs of its opinion, however, the
Ohio Supreme Court summarized the exception, using slightly
broader language, as follows:
Ohio recognizes a common law self-protection
exception to the attorney-client privilege codified in
R.C. 2317.02(A). Thus, when the attorney-client
relationship has been placed at issue in litigation
between an attorney and a client or a former client,
the self-protection exception permits discovery of the
evidence necessary to establish a claim or defense on
behalf of the attorney.
Squire Sanders, 127 Ohio St.3d, at 176.
The Firm has seized upon this language in arguing that the
self-protection exception applies not only to the disclosure of
confidences between Mr. Davis and the Firm but also to
confidences between Mr. Davis and his attorneys in the Other
Actions because such information is “necessary” to the Firm’s
defense of his counterclaim.

Moreover, the Firm argues that,

because Mr. Davis’s allegations are so broad, “everything in the
possession or control of counsel retained by Davis” is necessary
to defend against his counterclaim.

The Firm bolsters its

interpretation of the Ohio Supreme Court’s holding in the case by
noting that Squire Sanders was entitled to discovery from
Givaudan’s former and then current in-house counsel who were
“non-Squire Sanders attorneys.”

Stated another way, the Firm has

taken a portion of one sentence from the opinion’s conclusion and
the fact that the Ohio Supreme Court allowed discovery from
Givaudan’s in-house counsel to construct its argument that it is
entitled to privileged communications and, by extension, work
10

product, from Mr. Davis’s attorneys in the Other Actions.
The Court does not find the Firm’s efforts persuasive.

As a

result, the Court does not interpret Squire Sanders as requiring
that Mr. Davis produce documents from his attorneys in the Other
Actions which are otherwise protected either by the attorneyclient privilege or the work product doctrine.

First, the Court

does not read Squire Sanders as supporting an extension of the
self-protection exception beyond its historically understood
purpose.

The Firm’s taking wholly out of context particular

language in the concluding paragraphs of the opinion does not
undermine the Ohio Supreme Court’s explanation of the exception
plainly set forth earlier in the opinion.

Second, while the Firm

underscores its position by arguing that Givaudan’s in-house
counsel were “non-Squire Sanders attorneys,” as Mr. Davis points
out, under the circumstances of Squire Sanders, the attorneys are
more accurately characterized as the “client itself.”
Memorandum in Opposition, Doc. #49, fn. 6.

See

This fact alone

easily distinguishes the circumstances of this case from those of
Squire Sanders.
Significantly, the Firm does not point to any other
authority suggesting that the self-protection exception can be
used to support the disclosure of client confidences by an
attorney who is not the subject of an action brought by the
client.

Rather, as Mr. Davis points out, the other cases on

which the Firm relies all involve instances of waiver.

The Firm

attempts to trivialize this distinction by contending that it is
a distinction without a difference because, it argues, the same
fundamental principles of fairness apply in either instance.
While making this assertion, however, the Firm also notes that
Ohio courts recognize a distinction between an exception to the
privilege and a waiver of the privilege.

Consequently, the

Firm’s claim that the distinction is of no consequence seems
11

disingenuous given its insistence that it is not asserting
implied waiver in this case based on its understanding of Ohio
law.
The significance of the difference between the exception and
a waiver was discussed by the majority in Squire Sanders.

The

discussion was in response to Givaudan’s argument against the
application of the self-protection exception to the discovery
sought by Squire Sanders.

In making its argument, Givaudan

relied on Jackson, the same case cited by the Firm as declining
to recognize implied waiver.

Jackson, was a legal malpractice

action against an attorney and his law firm based on allegedly
negligent advice in a criminal case.

During discovery, the

attorney sought all attorney-client communications and documents
relating to a separate 42 U.S.C. §1983 action filed by his former
client.

The parties in Jackson argued that the statutory

attorney-client privilege may be waived as set forth in Hearn.
However, the Ohio Supreme Court "‘decline[d] to add a judicially
created waiver to the statutorily created privilege.'" Id. at
490, citing State v. McDermott, 75 Ohio St.3d 570, 574 (1995).
Rather the Court held that "R.C. 2317.02(A) clearly enumerates
the means by which a client may waive the statutory
attorney-client privilege; by express consent or by voluntarily
testifying on the same subject."

Id.

The court concluded that

the client had not waived the privilege by either of those means,
so granting the motion to compel was in error.

The court

recognized that several Ohio courts of appeals had applied the
Hearn test, but stated that the General Assembly had chosen to
limit the means by which a client's conduct may result in the
waiver of the attorney-client privilege and it would not
substitute its judgment for the legislature's.

Id.

As the Supreme Court explained in Squire Sanders:
Jackson dealt with the question of whether to
12

recognize the doctrine of implied waiver of the
attorney-client privilege as articulated in Hearn v.
Rhay, 68 F.R.D. 574. Applying State v. McDermott
(1995), 72 Ohio St.3d 570, 651 N.E.2d 985, the court
explained that R.C. 2317.02(A) provides the exclusive
means by which privileged communications directly
between an attorney and a client can be waived.
Jackson at ¶ 11. Jackson is distinguishable on its
facts because it dealt only with a waiver of the
attorney-client privilege; we concern ourselves in the
instant case with a common-law exception to the
privilege, the self-protection exception.
...
In deciding Jackson and McDermott, we did not cast
aside the well-established common-law exceptions to the
attorney-client privilege. Unlike waiver, which
involves the client's relinquishment of the protections
of R.C. 2713.02(A) once they have attached, an
exception to the attorney-client privilege falls into
the category of situations in which the privilege does
not attach to the communications in the first instance
and is therefore excluded from the operation of the
statute. ... In line with this analysis, Givaudan's
reliance on Jackson is misplaced because Ohio
recognizes common-law exceptions to the privilege as
outlined above.
Squire Sanders, 127 Ohio St.3d, at 172-173.
The above discussion indicates that, while the Firm
characterizes the issue as a distinction without a difference,
current Ohio case law attaches significance to the distinction.
Moreover, despite its attempts to minimize any distinction, the
Firm recognizes as much.

In fact, it is because of the

significance of this distinction in Ohio law that the Firm, by
its own characterization, argues for its interpretation of the
self-protection exception in this case instead of arguing its
position in terms of waiver.

Stated more precisely, the Firm is

asking this Court to recognize a creatively expansive
interpretation of the self-protection exception in order to
circumvent what the Firm, relying on Jackson, contends is Ohio’s
limitation on the implied waiver of the attorney-client
13

privilege.

The Court declines to do so.

Similarly, because the

Firm’s argument with respect to attorney work product hinges
solely on the Firm’s reading of Squire Sanders and Ohio law, the
Court finds that argument to be without merit.
IV.

Conclusion

For the reasons stated above, the motion to compel (#46) is
denied.
APPEAL PROCEDURE
Any party may, within fourteen days after this Order is
filed, file and serve on the opposing party a motion for
reconsideration by a District Judge.

28 U.S.C. §636(b)(1)(A),

Rule 72(a), Fed. R. Civ. P.; Eastern Division Order No. 91-3, pt.
I., F., 5.

The motion must specifically designate the order or

part in question and the basis for any objection.

Responses to

objections are due fourteen days after objections are filed and
replies by the objecting party are due seven days thereafter.
The District Judge, upon consideration of the motion, shall set
aside any part of this Order found to be clearly erroneous or
contrary to law.
This order is in full force and effect, notwithstanding the
filing of any objections, unless stayed by the Magistrate Judge
or District Judge.

S.D. Ohio L.R. 72.3.

/s/ Terence P. Kemp
United States Magistrate Judge

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