Williamson et al v. Recovery Limited Partnership et al
Filing
1088
OPINION AND ORDER denying 1048 Motion to Compel; terminating 1049 Sealed Motion; granting 1050 Motion to Compel. Signed by Magistrate Judge Terence P. Kemp on 10/25/2016. (agm)(This document has been sent by regular mail to the party(ies) listed in the NEF that did not receive electronic notification.)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF OHIO
EASTERN DIVISION
Michael Williamson, et al.,
:
Plaintiffs,
v.
:
Recovery Limited Partnership,
et al.,
:
Case No. 2:06-cv-292
JUDGE ALGENON L. MARBLEY
Magistrate Judge Kemp
Defendants.
:
OPINION AND ORDER
I.
Introduction
As this Court said in Williamson v. Recovery Limited
Partnership, 2016 WL 4920773, *1 (S.D. Ohio Sept. 15, 2016),
This case has a long and interesting history. Much of
it is recounted in prior orders from this Court and
will not be repeated here. The three-minute version of
events is that Defendant Thomas G. Thompson discovered
a shipwrecked steamer, the S.S. Central America, in the
Atlantic Ocean off the coast of North Carolina; raised
funds to finance a salvage operation (the ship was
transporting gold to New York); actually salvaged some
of the gold; did not pay his crew or his investors;
disappeared with substantial assets; was located after
a long search; has been held in criminal and civil
contempt of this Court; and has not provided complete
information as to the whereabouts of some or all of the
misappropriated assets.
That order dealt with three subpoenas issued by The Dispatch
Printing Company, one of Mr. Thompson’s larger investors,
designed to fill in some of the missing information and to locate
some or all of the missing assets, including a trove of gold
coins purportedly worth some $2.5 million.
This order addresses
two other subpoenas.
The first subpoena at issue here was issued on October 26,
2015 (Doc. 985) and served on Carl H. Linder and Linder Law Group
(both of which will be referred to in this order as “Linder”) in
Miami, Florida on November 2, 2015 (Doc. 995).
The second was
issued on December 1, 2015 (Doc. 997) and served on Liz R. Wilson
and the Law Office of Liz Wilson, P.A. (“Wilson”) in Vero Beach,
Florida on December 2, 2015 (Doc. 1010).
Both subpoena
recipients objected to producing certain documents described in
the subpoenas, and the Dispatch has moved to compel them to do
so.
For the following reasons, the Court will deny the former
motion without prejudice and grant the latter.
II.
The Subpoenas
The Linder subpoena commanded production of twenty-two
categories of documents.
Grouped broadly, they relate to
documents and communications by or about Thomas G. Thompson
Alison Antekeier, and Recovery Limited Partnership with The CA
Archeological Protection Trust, The Cromwell Trust, Columbus
Exploration, LLC, the Hiassen Trust, the Indemnification Trust,
Thomas G. Thompson, Alison Antekeier (and her various aliases),
CBIZ Accounting, Tax & Advisory of Florida, LLC or its successor,
Carlos Andrade, Carlo Mason, and Global Consultants and Services
Ltd., as well as documents about Mr. Thompson’s or Ms.
Antekeier’s use of a company known as RoboVault.
The Wilson subpoena requested production of only seven
categories of documents, including documents relating to Mr.
Thompson and Ms. Antekeier or entities which they controlled,
wire or asset transfers by them to other entities, documents
relating to their bank accounts or safe deposit boxes, records of
phone calls with them, and, more specifically, “documents
relating to or reflecting telephone conversations with or
regarding [Mr. Thompson and Ms. Antekeier] and the number (242)
646-4767.”
Because both subpoenas were served in Florida, the United
States District Court for the Southern District of Florida
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initially had jurisdiction to resolve any issues concerning the
propriety of the subpoena.
See Fed.R.Civ.P. 45(d)(3)(A).
The
Dispatch moved, in the Florida court, to compel both recipients
to produce documents.
That court transferred these motions to
this Court based upon the pendency of the case here and this
Court’s greater familiarity with it.
See Docs. 1042 and 1047.
The motions appear on this Court’s docket as Docs. 1048 and 1050
(the latter of which is a redacted version of Doc. 1049).
The
Court will set out a brief factual background of each motion and
then determine whether the recipient’s invocation of attorneyclient privilege is a proper basis on which to withhold
production of the documents at issue.
A.
The Linder Motion
There are only a few facts relevant to this motion.
Mr.
Linder, an attorney, prepared a trust instrument for the CA
Archeological Protection Trust, a Belizean trust.
At one point,
Mr. Thompson claimed to have delivered some of the recovered
treasure - specifically, the missing gold coins - into that
trust.
Mr. Lindner was representing Mr. Thompson when he drafted
the trust instrument.
Mr. Linder, citing his attorney-client
relationship with Mr. Thompson, has declined to produce both the
trust instrument itself and certain other documents relating to
it, including documents which appointed what are described as the
“Protector, Custodian, and Investment Advisor” for the trust.
He
acknowledges that copies of these documents were disclosed to
persons or entities other than Mr. Thompson - namely, the trustee
and the trust advisors - but contends that such disclosure does
not, under applicable Florida law, waive the attorney-client
privilege.
In support of his position, Mr. Linder relies on a section
of the Florida Statutes Annotated which explains, for purposes of
the attorney-client privilege, what a confidential communication
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consists of.
F.S.A. §90.502(1)(c) says this:
A communication between lawyer and client is
“confidential” if it is not intended to be disclosed to
third persons other than:
1. Those to whom disclosure is in furtherance of the
rendition of legal services to the client.
2. Those reasonably necessary for the transmission of
the communication.
Mr. Linder contends that because it was reasonably necessary for
him to disclose the trust agreement and the other documents in
his possession to the trustee or the trust advisors in order for
them to carry out their duties, that disclosure was a
confidential communication.
Under F.S.A. §90.502(2), the client
or lawyer may refuse to disclose any confidential communication
“made in the rendition of legal services to the client,” and Mr.
Linder claims that these documents fit that definition.
The
Dispatch, in its reply, argues that neither the contents of a
trust instrument nor the transmittal of that and other necessary
documents to the trustee or trust advisors was a communication
made in furtherance of rendering legal advice.
Alternatively, it
argues that Mr. Linder has not produced any evidence that these
were such communications.
The Dispatch relies heavily on the decision in United States
v. Davis, 636 F.2d 1028 (5th Cir. 1981), a case involving
enforcement of an IRS summons against a Texas resident.
Among
the documents subpoenaed were records relating to the
“[e]stablishment and maintenance of [a] trust.”
Id. at 1033 n.3.
The Court concluded that these and other documents were not
privileged because “[a]n attorney who acts as his client's
business advisor, or his agent for receipt or disbursement of
money or property to or from third parties ... is not acting in a
legal capacity, and records of such transactions are not
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privileged.”
Id. at 1044.
In addition, the court observed in a
footnote (n. 19) that “[d]ocuments establishing trust funds,
requested by item 8(a), are not privileged because in their
creation the attorney acts merely as a scrivener.”
This shows,
according to The Dispatch, that the contents of the trust
instrument, even though it may have been drafted in accordance
with Mr. Thompson’s wishes, which were communicated in privileged
fashion to his attorney, are themselves not privileged.
Based on decisions from Florida courts, this Court has some
difficulty accepting this argument.
For example, in Compton v.
West Volusia Hosp. Authority, 727 So.2d 379, 382 (Fla. App. 5th
Dist. 1999), the court upheld a claim of attorney-client
privilege for a client’s unpublished will, pointing out that
“because the will and its contents have not been revealed to
others beyond what was required to properly execute it, the
attorney-client privilege remains intact.”
The Compton court
also found a Florida constitutional privacy interest in the
will’s content.
Compton strongly implies that when drafting an
instrument, whether it be a will or a trust, which would reveal a
person’s plans for the disposition of property, an attorney acts
as more than a “scrivener.”
One of the cases cited in Compton,
Bower v. Weisman, 669 F.Supp. 602 (S.D.N.Y. 1987), also appears
to conclude that communications about drafting a trust and the
trust agreement arising out of those communications are
privileged (although in that case the privilege was waived
because the client voluntarily produced the attorney’s notes
about the trust).
According to these decisions, if the trust
agreement prepared by Mr. Linder had never been disclosed to a
third party - which was the case with the will involved in
Compton - its contents would be privileged.
To the Court, these cases seem correct.
Preparing a trust
agreement is ordinarily considered to be the practice of law and
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not just “scrivener work.”
See, e.g., The Florida Bar v. Hughes,
824 So.2d 154 (Fla. 2002) (holding that the preparation of land
trusts by a non-lawyer constitutes the unauthorized practice of
law, which, in Florida, includes “the preparation of legal
documents by a nonlawyer for another person to a greater extent
than typing or writing information provided by the customer,” see
Florida Bar v. Miravalle, 761 So.2d 1049, 1051 (Fla. 2000)).
The
trust instrument itself certainly reflects and reveals the
client’s confidential communications about the disposition of his
or her property, much as a will does.
Courts have consistently
recognized that the privilege attaches to communications relating
to the making of a will.
Cf. United States v. Osborn, 561 F.2d
1334, 1340 (9th Cir. 1977)(“the general rule with respect to
confidential communications between attorney and client for the
purpose of preparing the client's will is that such
communications are privileged during the testator's lifetime and,
also, after the testator's death....”).
Given that conclusion,
the key question here is whether disclosing the contents of the
trust agreement or the appointment documents to the trustee and
the trust advisors is a communication made “in furtherance of the
rendition of legal services to the client” - in which case it
does not destroy the privilege - or whether it is the type of
disclosure which vitiates the attorney-client privilege which
attaches to such documents.
There is a “Law Revision Council Note” to F.S.A. §90.502
which sheds some light on the meaning of subsection (1).
The
note explains that the confidentiality of a communication is
premised upon the existence of “circumstances that should be
understood by the attorney” as reflecting the client’s desire to
maintain confidentiality.
Examples of such circumstances that
are not consistent with confidentiality are the public disclosure
of communications by the client or the disclosure to
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“disinterested third persons ....”
On the other hand, the note
recognizes that “[p]racticality requires that some disclosure
outside the immediate lawyer-client circle be allowed without
impairing confidentiality” and that such disclosures may safely
be made to such persons as “a spouse, parent, business associate
or joint client” or to “employees or agents of a lawyer who
routinely receive communications from the client for transmission
to the attorney.”
Unfortunately, the notes do not address
communication of otherwise privileged trust agreements to those
whose services are needed in order to carry out the purpose for
which the trust was created, nor has the Court been able to
locate any Florida decisions - nor, for that matter, any other
decisions - on this point.
It can be argued that providing the trustee named in a trust
with a copy of the trust is a communication which, in the words
of §90.502(1)(c), is made “in furtherance of the rendition of
legal services to the client.”
On the other hand, it can also be
argued that the proper scope of the legal services being provided
to a client in this context includes only insuring that the trust
instrument accurately reflects the wishes of the client, a
purpose that is completely fulfilled once the final draft of the
trust instrument has been completed.
If that is so, forwarding
the document to the trustee (and also forwarding other trustrelated documents such as those appointing trust advisors), while
that action might further the personal or business interests of
the client which prompted him or her to create a trust, would not
further the attorney’s ability to provide legal advice to the
client about the terms or efficacy of the trust itself.
interpretation is possible.
Either
Given that this appears to be an
issue of first impression under Florida law, this Court is
hesitant to be the first to decide it.
The Court is somewhat surprised that The Dispatch did not
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argue, in the alternative, that any otherwise privileged
communications between Mr. Thompson and Mr. Linder concerning
this particular trust fall within the crime-fraud exception.
Florida clearly recognizes this exception; in fact, it is found
in §90.502(4)(a), which says that there is no attorney-client
privilege when “[t]he services of the lawyer were sought or
obtained to enable or aid anyone to commit or plan to commit what
the client knew was a crime or fraud.”
As the Florida courts
have held, “[u]nder the statute, it is immaterial whether the
lawyer knows that the client intends to commit a crime or
perpetrate a fraud, so long as the client has the intention to do
so sometime in the future.”
First Union Nat’l Bank v. Turney,
824 So.2d 172, 187 (Fla. App. 2001).
There is a substantial
amount of evidence now before the Court that Mr. Thompson was
engaged in either fraudulent or criminal acts, or both, with
respect to his secretion of assets upon which The Dispatch and
others had claims.
Perhaps there are reasons why The Dispatch
does not believe that the crime-fraud exception applies here, but
they are not immediately apparent to the Court.
Because this
provides a possible ground for resolving the dispute between The
Dispatch and Mr. Linder which would eliminate the need to decide
a state law issue of first impression, the Court will deny the
motion to compel without prejudice to its reassertion on other
grounds.
Should The Dispatch re-file its motion, it may also
present additional arguments in support of its interpretation of
§90.502(1)(c) which take into account the Court’s present
discussion of that statute.
B.
The Wilson Motion
The facts relating to this motion can also be stated
succinctly.
Ms. Wilson is also an attorney.
She has admitted,
in response to the subpoena, that she has records relating both
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to wire transfers of funds on behalf of either Mr. Thompson or
Ms. Antekeier, and also has records of her client trust account
which relate to one or both of them.
She has also asserted the
attorney-client privilege for these records.
Ms. Wilson did not
file a formal response to the motion to compel, but did file her
objections to the subpoena with the Court.
See Doc. 1005.
In its motion, The Dispatch argues that records of financial
transactions are not subject to the attorney-client privilege.
Such records are, first, disclosed to financial institutions,
and, second, do not reflect any communications made for the
purpose of obtaining legal advice.
It cites to a number of cases
holding that fund transfers, even those accomplished through an
attorney, are simply ministerial tasks, and to cases applying
that rationale to the records concerning the attorney’s own trust
account.
The Dispatch also argues that such records have not
been shown to be subject to the work product privilege.
As
noted, Ms. Wilson has not responded to these arguments.
The cases cited by The Dispatch are persuasive on this
issue.
Eastern Air Lines, Inc. v. Gellert, 431 So.2d 329 (Fla.
App. 1983), for example, involved a subpoena issued to a lawyer
to produce records of payments made to him and his firm by
Eastern Air Lines, a client of the firm.
to quash the subpoena.
The lower court refused
The Florida Court of Appeals affirmed,
holding that it was “apparent that the records of payments ... do
not implicate the attorney-client privilege.”
Id. at 331,
citing, inter alia, In re Grand Jury Proceedings (Slaughter), 694
F.2d 1258 (11th Cir.1982).
That case, in turn, held that “no
confidences will be disclosed” by an order directing an attorney
to reveal payments and that such information is not a
communication made to an attorney for the purpose of seeking
legal advice.
Under some circumstances, the disclosure of such
information might reveal a client confidence, but there is no
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evidence in this record that it would do so here.
Similarly, in Sweetapple, Broeker & Varkas, P.L. v. Simmons,
151 So.3d 42, 43 (Fla. App. 2014), the Florida Court of Appeals
upheld a trial court’s decision not to quash a subpoena that had
been issued for records of a law firm’s trust account.
The court
noted that the financial information reflected in those records
was “not privileged in the hands of the client” and was therefore
“not privileged in the hands of the attorney.”
Again, Ms. Wilson
has made no showing that any financial information concerning
either Mr. Thompson or Ms. Antekeier was privileged in their
hands or that disclosing their deposits into, or disbursements
from, her trust account would reveal any confidential
communications.
Finally, to the extent that the subpoena also calls for the
production of documents which show financial transactions
undertaken by Ms. Wilson or her firm at the request of either Mr.
Thompson or Ms. Antekeier (but which are separate from either
payments they made to the firm or deposits or disbursements from
the trust account), the Court is persuaded that such records do
not ordinarily reflect communications made for the purpose of
obtaining legal advice.
Rather (and again subject to the caveat
that such transactions may be privileged if they reveal the
contents of a confidential communication made in order to obtain
legal advice), a law firm’s conduct of financial transactions for
a client can be characterized as “a ministerial or clerical”
service that is “not within the privilege.”
See United States v.
Bartone, 400 F.2d 459, 461 (6th Cir. 1968); see also United
States v. Krug, 379 Fed.Appx. 473, 478 (6th Cir. June 1, 2010)(no
privilege attached when a party “was merely using his attorney to
help with financial management”).
Given the lack of any evidence
from Ms. Wilson that the records at issue go beyond that, it is
appropriate to direct her to produce them.
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III.
Order
For the foregoing reasons, the motion to compel relating to
the Linder subpoena (Doc. 1048) is denied without prejudice.
The
motion relating to the Wilson subpoena (Doc. 1050, which is the
redacted version of Doc. 1049) is granted.
Ms. Wilson shall
produce the withheld documents within 21 days.
The Clerk shall
remove Docs. 1048, 1049, and 1050 from the Court’s pending
motions list.
IV.
Motion for Reconsideration
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. 14-01,
pt. IV(C)(3)(a).
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 even if a motion for
reconsideration has been filed unless it is stayed by either 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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