Greater New York Mutual Insurance Company v. Philadelphia Indemnity Insurance Company

Filing 154

ORDER - IT IS ORDERED that the 91 Motion for Discovery is DENIED. Signed by Magistrate Judge Susan E. Schwab on 3/11/2014. SEE ORDER FOR ADDITIONAL DETAILS. (sc)

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF PENNSYLVANIA
GREATER NEW YORK MUTUAL
INSURANCE CO. a/s/o R.P.,
Management, Inc. and New S.P.
Assoc., L.P. d/b/a Suburban Park
Apartments and as assignee of, Bell
Socialization Services, Inc., Anna
Carson and Steven Sponseller,
Plaintiff,
v.
PHILADELPHIA INDEMNITY INS.
CO. and THE GLADFELTER
AGENCY, INC.,
Defendants,
v.
N. CHRISTOPHER MENGES, ESQ.
SHAWN P. MCLAUGHLIN, ESQ.,
And MENGES, MCLAUGHLIN &
KALASNIK, P.C.
Third-Party Defendants.

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CIVIL NO. 1:11-CV-00451

(Judge Jones)

(Magistrate Judge Schwab)

ORDER
March 11, 2014
In this declaratory judgment action, proceeding via a third amended
complaint, defendant Gladfelter Agency, Inc. (“Gladfelter”) moves to overrule
objections to its discovery requests relating to the production of documents
evidencing the extent of the attorney-client relationship between Bell Socialization
Services, Inc. (“Bell”) and third-party defendant Menges, McLaughlin & Kalasnik,

P.C. (“MMK”).1 In refusing to turn over the requested items, MMK and Bell have
raised the attorney-client privilege. Gladfelter, however, argues that Bell waived
the privilege. For the following reasons, I will deny Gladfelter’s motion.
I.

Background.
Because this Order is intended primarily for review by the parties, I will not

recite in detail the claims and factual allegations asserted in this action. Rather, I
will state only that this declaratory judgment action was initiated on March 10,
2011, when the plaintiff, Greater New York Mutual Insurance Co. (“GNY”) filed a
complaint against Philadelphia Indemnity Insurance Company (“PIIC”) and
Gladfelter. Doc. 1. Since then, GNY has filed three amended complaints, the most
recent one having been filed on September 20, 2013. Doc. 119.
In pertinent part, GNY’s lawsuit continues to include claims against
Gladfelter, through a limited assignment from Bell, for negligence and negligent
misrepresentation. More precise, GNY seeks judgment against Gladfelter should
the Court find that PIIC is not required to provide insurance coverage to Bell, for
losses incurred by GNY in separate fires started by two of Bell’s placed-residents.

1

Gladfelter has essentially filed a motion to compel.
2

Earlier in the litigation, Glatfelter filed a third-party complaint naming
MMK as a third-party defendant.2 Doc. 43. Pursuant to Court Order, the only
remaining claim against MMK is for professional negligence.

See Doc. 65.

According to Gladfelter, before the two fires, it procured and obtained insurance
policies from PIIC in order to provide insurance coverage to Bell. Doc. 43 at ¶ 13.
At the time, MMK was also allegedly retained by Bell to provide legal advice and
counsel, and to work jointly with Gladfelter, on matters relating to insurance
coverage among other things. Id. at ¶ 15. Gladfelter refers to the relationship
between the three parties as a “joint venture.” Id. at ¶ 25.
Gladfelter further claims that it corresponded with MMK regarding the
procurement of insurance for Bell at the property where the two fires occurred. Id.
at ¶ 16. Specifically, Gladfelter alleges, it corresponded with MMK regarding the
leases and the insurance implications of such leases between Bell and its placedresidents. Id. at ¶ 17. Gladfelter claims that it advised MMK that the language in
the leases was drafted in a manner that left Bell vulnerable in a loss created by a

2

Gladfelter labeled its third-party complaint a “joinder complaint.” While
such terminology is used in Pennsylvania practice, see Pa. R. Civ. P. 2252, in
federal practice, a joinder complaint is called a third-party complaint. See
Fed.R.Civ.P. 7(a)(5) & 14(a). Of course, in federal court, I adhere to federal
practice and will refer Gladfelter’s pleading as a third-party complaint. See Kohn v.
School Dist. of the City of Harrisburg, No. 1:11-CV-109, 2012 WL 1598096, at *1
n. 1 (M.D. Pa. May 7, 2012)(Caldwell, J.).
3

placed-resident, and it suggested additional language that MMK allegedly refused
to include.

Id. at ¶ 18-20, 22-23.

According to Gladfelter, had any of the

suggested language been included in the leases, Bell would have no uncovered
losses. Id. at ¶ 21. Given MMK’s alleged failure to include the recommended
language in the leases, Gladfelter brings a professional negligence claim against
MMK, for its alleged breach of the duty of care owed to Bell. Id. at ¶¶ 24, 26-29.
On July 12, 2013, Gladfelter filed the motion under review along with a
brief in support and relevant exhibits. Docs. 91, 92, & 93. Gladfelter contends
that it served discovery requests on GNY and MMK seeking information in the
form of (1) documents pertaining to the retainer agreement between Bell and
MMK, (2) invoices for services rendered, limited to the time-frame relevant to the
fire losses, and (3) documents exchanged between Bell and MMK for legal
services rendered from January 1, 2002 to the present.3 Doc. 92 at 10; Docs. 93-3
to 93-6. According to Gladfelter, such information would demonstrate, in part,
“the nature, extent, and type of work MMK performed for Bell, the work they
billed for, and whether it included … review of insurance policies and
communications with Gladfelter about Bell’s insurance.” Id. at 10. However, in
responding to Gladfelter’s discovery requests, GNY and MMK objected by raising
Gladfelter also contends that it sent a discovery request for MMK’s legal
files for Bell. Upon reviewing the discovery requests, however, I do not find such a
request.
3

4

the attorney-client privilege.

Id. at 11; Docs. 93-7 to 93-10.

In addition to

preserving the attorney-client privilege, MMK answered the discovery requests,
with respect to the legal invoices and retainer agreements, by informing Gladfelter
that such information does not exist. Doc. 93-10 at 3. Gladfelter continues to
argue, though, that the remaining items should be compelled given that the
attorney-client privilege was waived in two respects: (1) when Bell shared
confidential communications in various forms with Gladfelter; and (2) when Bell
placed the relevant legal and insurance transactions at issue in this declaratory
judgment action. Id. at 11-16.
On July 26, 2013, MMK filed a response to Gladfelter’s discovery motion
and a corresponding brief in opposition. Docs. 94 & 95. According to MMK,
Gladfelter’s motion should be denied because (1) reliance on communications
about Bell’s insurance policies occurring after the fire occurred is irrelevant to
Gladfelter’s remaining claim in its third-party complaint, (2) mere correspondence
by an attorney to a third party does not automatically operate as a waiver, and (3)
Gladfelter, not Bell, placed the transaction into issue. See generally, Doc. 95.
Subsequently, on July 26, 2013, Gladfelter filed a reply brief arguing more of the
same and discrediting MMK’s exhibit. Doc. 95. At that time, the motion was ripe
for disposition on the merits.

5

Rather than proceeding to decide the motion on the merits, I chose to hold
oral argument. See Doc. 137. Accordingly, on November 5, 2013, I heard the
parties’ oral argument.
retained counsel.

Among the parties present, was Bell’s independently

Bell, through counsel, asserted that it had not waived the

attorney-client privilege with MMK and it is continuing to assert the privilege.
Doc. 151 at 60. Furthermore, MMK informed the Court that at some point prior to
the hearing it provided Gladfelter with a privilege log putting Gladfelter on notice
that no specific retainer agreements exist, no litigation cooperation agreements
exist, and the legal invoices do not provide narratives. Id. at 57, 59-60. In the face
of this information, I reopened the briefs permitting each party to supplement their
arguments. See Doc. 91.
On November 25, 2013, Gladfelter informed the Court that it chose not to
file a supplemental brief. Doc. 146. Similarly, neither Bell nor MMK filed
anything further, and the Court did not hear from GNY on this issue. See Doc.
148. The briefing period having officially closed, the motion is now ripe for
disposition on the merits.

6

II.

Legal Standard.
Pursuant to Rule 26(b)(1) of the Federal Rules of Civil Procedure:
Parties may obtain discovery regarding any nonprivileged matter
that is relevant to any party’s claim.…Relevant information need
not be admissible at the trial if the discovery appears to be
reasonably calculated to lead to the discovery of admissible
evidence.

Accordingly, this Rule establishes a liberal discovery policy. Oppenheimer Fund,
Inc. v. Sanders, 437 U.S. 340, 351, 98 S.Ct. 2380, 57 L.Ed.2d 253 (1978).
As a discovery mechanism, a party may serve a request on any other party,
within the scope of Rule 26(b)(1), to produce any designated documents,
electronically stored information, or tangible things. Fed.R.Civ.P. 34(a)(1)(A),(B).
If the party served with a request for production fails to produce the designated
discovery for inspection, the party requesting discovery may move for an order
compelling production. Fed.R.Civ.P. 37(a)(3)(B)(iv). The motion to compel should
not be filed until the party requesting discovery has conferred, or attempted to
confer, in good faith with the party failing to produce the sought after discovery.
Fed.R.Civ.P. 37(a)(1).
Upon the filing of a motion to compel, the movant bears the initial burden of
proving the relevance of the requested information. Morrison v. Philadelphia
Housing Auth., 203 F.R.D. 195, 196 (E.D. Pa. 2001). Once that initial burden is
7

met, the burden shifts to the nonmoving party. In the event that the nonmoving
party has raised a privilege, (s)he must demonstrate the privilege’s existence. In re
Grand Jury (OO–2H), 211 F.Supp.2d 555, 557 (M.D. Pa. 2001). Because
evidentiary privileges contravene “the fundamental principal that the public has a
right to every man's evidence,” such privileges are to be strictly construed.
University of Pennsylvania v. EEOC, 493 U.S. 182, 189, 110 S.Ct. 577, 107
L.Ed.2d 571 (1990) (citation omitted). Thereafter, “[o]nce a party demonstrates
the existence of a [privilege] … then the party challenging the [production of the
privileged information] bears the burden of demonstrating that a waiver … has
occurred.” Martin Marietta Materials, Inc. v. Bedford Reinforced Plastics, Inc.,
227 F.R.D. 382, 390 (W.D. Pa. 2005).
In ruling on a party’s motion to compel, it has long been held that a District
Court’s decisions are “committed to [its] sound discretion….” DiGregorio v. First
Rediscount Corp., 506 F.2d 781, 788 (3d Cir. 1974). Similarly, issues relating to
the scope of discovery permitted under Rule 26 also rest in the sound discretion of
the court. Wisniewski v. Johns–Manville Corp., 812 F.2d 81, 90 (3d Cir. 1987).
Thus, a court's decisions regarding the conduct of discovery, and whether to
compel disclosure of certain information, will be disturbed only upon a showing of
an abuse of discretion. Marroquin–Manriquez v. I.N.S., 699 F.2d 129, 134 (3d
Cir.1983). This far-reaching discretion extends to rulings by United States
8

Magistrate Judges on discovery matters. See Halsey v. Pfeiffer, No. 09–1138, 2010
WL 3735702, *1 (D.N.J. Sept.17, 2010)(collecting cases).
III.

Discussion.
The parties do not dispute the relevance of the information sought by

Gladfelter or, surprisingly, that not all of the information sought is protected by the
attorney-client privilege. I, therefore, make no specific finding on those matters,
but I will presume as much for purposes of deciding this motion. 4 The parties,
instead, focus their arguments on whether the privilege was either expressly or
impliedly waived by Bell. The remainder of this Order, therefore, will be devoted
solely to the waiver issue.
1. The Attorney-Client Privilege and Waiver.
Rule 501 of the Federal Rules of Evidence provides, in relevant part, as
follows:
[I]n civil actions and proceedings, with respect to an element of a
claim or defense as to which State law supplies the rule of
decision, the privilege of a witness, person, government, State, or
political subdivision thereof shall be determined in accordance
with State law.

4

To the extent these are disputed, the parties should have brought them to my
attention.
9

F.R.E. 501. Thus, in diversity actions, such as the instant litigation, the law
governing evidentiary privileges is supplied by the courts of the state in which the
federal court sits. See, e.g., Rhone–Poulenc Rorer v. Home Indem. Co., 32 F.3d
851, 861 (3d Cir. 1994); Maertin v. Armstrong World Indus., Inc., 172 F.R.D. 143,
147 (D.N.J. 1997); McDowell Oil Serv., Inc. v. Interstate Fire & Cas. Co., 817
F.Supp. 538, 545 (M.D. Pa. 1993) (in diversity action, party's assertion of attorneyclient privilege governed by state law). In accordance with these settled principles,
this case shall be governed by Pennsylvania’s law on attorney-client privilege.
Pennsylvania law defines the attorney-client privilege by statute as follows:
§ 5928. Confidential communications to attorney
In a civil matter counsel shall not be competent or permitted to
testify to confidential communications made to him by his client,
nor shall the client be compelled to disclose the same, unless in
either case this privilege is waived upon the trial by the client.
42 Pa.C.S.A. § 5928. “Because the attorney-client privilege obstructs the truthfinding process, it is construed narrowly.” Westinghouse Elec. Corp. v. Republic of
the Philippines, 951 F.2d 1414, 1423 (3d Cir. 1991). Moreover, the attorney-client
privilege is not automatic; rather, it must be invoked successfully by the
satisfaction of a four-element test:
The party invoking [the attorney-client] privilege must initially
set forth facts showing that [it] has been properly invoked; then
the burden shifts to the party seeking disclosure to set forth facts
10

showing that disclosure will not violate the [privilege], e.g.,
because the privilege has been waived or because some
exception applies…. Four elements must be satisfied in order to
invoke successfully the protections of the attorney-client
privilege:
1) The asserted holder of the privilege is or sought to become a
client.
2) The person to whom the communication was made is a
member of the bar of a court, or his subordinate.
3) The communication relates to a fact of which the attorney was
informed by his client, without the presence of strangers, for
the purpose of securing either an opinion of law, legal
services or assistance in a legal matter, and not for the
purpose of committing a crime or tort.
4) The privilege has been claimed and is not waived by the
client.
Custom Designs & Mfg. Co. v. Sherwin-Williams Co., 39 A.3d 372, 376 (Pa.
Super. Ct. 2012), appeal denied, 57 A.3d 71 (Pa. 2012)(internal citations and
quotation marks omitted).
In elaborating on the scope of the privilege, the Pennsylvania Supreme Court
recently held: “[T]he attorney-client privilege operates in a two-way fashion to
protect confidential client-to-attorney or attorney-to-client communications made
for the purpose of obtaining or providing professional legal advice.” Gilliard v.
AIG Ins. Co., 15 A.3d 44, 59 (Pa. 2011). In reaching its holding, the Gilliard
Court restated the privilege’s historically acknowledged purpose, i.e., to encourage
free and open communications between counsel and client that will lead to a
11

trusting and candid disclosure. Id. at 51. Importantly, what the Gilliard Court did
not do was disturb the traditional understanding that the client holds the attorneyclient privilege.
As mentioned, the parties here do not contest the existence of the attorneyclient privilege or whether it was properly invoked; instead, they argue primarily
about whether the privilege was expressly or impliedly waived by Bell.5
a. Express or Direct Waiver.
Gladfelter argues that Bell expressly, or directly, waived the attorney-client
privilege by including Gladfelter “in all types of communication regarding
insurance and leases” with MMK. Doc. 92 at 13-14. As recognized by the Third
Circuit in Westinghouse Electric Corp., “voluntary disclosure to a third party of
purportedly privileged communications has long been considered inconsistent with
an assertion of the [attorney-client] privilege.” 951 F.2d at 1424 (quoted case
omitted). “Thus, once a client has revealed privileged information to a third party,
the basic justification for the privilege no longer applies.” Id.; see Nationwide
Mutual Ins. Co. v. Fleming, 992 A.2d 65, 68 (Pa. 2010)(discussing the same). In
this regard, federal courts have held that, under some circumstances, voluntary

5

The remainder of this Order has no application to Gladfelter’s requests for
production of invoices and retainer agreements. As explained by MMK at oral
argument, and previously disclosed to Gladfelter, those items do not exist.
12

disclosure of a communication protected by the attorney-client privilege may result
in waiver of the privilege for all communications pertaining to the same subject
matter (“subject matter waiver”). E.g., Murray v. Gemplus Int’l, S.A., 217 F.R.D.
362, 367 (E.D. Pa. 2003)(emphasis added).6
Here, as previously stated, Gladfelter argues that MMK and Bell expressly
waived the attorney-client privilege by including it in “all types of communications
regarding insurance and leases, including … letters, email, phone calls, and
meetings.”

Doc. 92 at 13-14.

In support, Gladfelter offers the deposition

testimony of Peggy Selway (“Selway”), Gladfelter’s lead account representative
for Bell. Doc. 93-11. In pertinent part, Selway testified that on March 19, 2009,
she met with defendant Christopher Menges (“Menges”), an attorney at MMK, and
6

Although I ultimately conclude that no confidential communications were
disclosed, I note that courts have also recognized exceptions to the voluntary
waiver rule. For example, a client may allow disclosure to an “agent” assisting the
attorney in giving informed legal advice to the client without waiving the privilege.
Westinghouse Electric Corp., 951 F.2d at 1424 (citing 8 Wigmore, Evidence §
2301 at 583 (McNaughton rev. 1961); McCormick, Evidence § 92 at 188); see also
Miller v. Haulmark Transp. Sys., 104 F.R.D. 442, 445 (E.D. Pa. 1984). “[Such an
exception is] consistent with the goal underlying the privilege because [this] type
of disclosure is sometimes necessary for the client to obtain informed legal
advice.” Westinghouse, 951 F.2d at 1424. I bring this point up, because MMK
raises this very argument, as an alternative, in defense of Bell’s privilege.
Nevertheless, MMK fails to provide any evidence in support of its contention that
Gladfelter, as an insurance broker, was an agent “whose services were necessary
for effective representation of [Bell’s] interests.” Cellco P’ship v. Certain
Underwriters at Lloyd’s London, No. 05-3158, 2006 WL 1320067, at *2 (D.N.J.
May 12, 2006). Instead, I was left solely to rely upon MMK’s conclusory assertion
and Selway’s blanket testimony that the two parties worked together, through Bell.
13

Ike Hileman, Bell’s executive director. The purpose of the meeting was to discuss
the limits on Bell’s insurance policy that would apply to the loss in one of the two
fires. Id. at 28. Selway testified that during the meeting, Menges disclosed his
understanding of Bell’s coverage under the insurance policy.

Id.

Selway,

however, corrected Menges, who was apparently mistaken, and further testified
that she asked him “if a waiver of subrogation would be a good idea to put in the
leases.” Id. Noticeably missing, though, is evidence demonstrating that privileged
communications were divulged; instead, absolutely nothing about this evidence
equates to the divulgence of confidential information.
Gladfelter next points to a letter sent from Menges to Selway, following
their in-person meeting, regarding the insurance coverage available to Bell on its
other properties. Doc. 93-12 at 1. In the same correspondence, Menges asked
Selway whether certain language would be sufficient for purposes of Bell’s “hold
harmless” and insurance subrogation clauses. Id. at 2. But, again, Gladfelter does
not point out what confidential information was divulged. Thus, despite the protest
that this evidence amounts to a “clear” waiver, it is actually entirely unclear.
In opposition, MMK has filed the affidavit of Hileman, which Gladfelter
contends amounts to a waiver in and of itself, Doc. 99 at 4-8. In the affidavit,
Hileman testifies that before the two fires occurred Bell never sought legal advice
from MMK regarding its insurance needs. Doc. 94-1 at ¶¶ 2, 4. Instead, Bell
14

looked to Gladfelter to select, review, assess, and provide appropriate insurance
products. Id. at ¶ 3. Thus, if anything is clear, it is that Hileman’s affidavit does
not divulge confidential communications. Rather, Hileman merely disavows, in
several different ways, that Bell engaged MMK to provide legal advice in
connection with its insurance needs. As well, Selway testified at her deposition
that she had no reason to dispute the contents of Hileman’s affidavit. Doc. 93-11
at 51-53. Moreover, as MMK points out, Selway testified during her deposition
that she never submitted documents directly to MMK, and she never invited MMK
to any meetings to discuss insurance coverage being procured for Bell. Id. at 38.
Rather, according to Selway, the parties “worked together through the client.” Id.
At the same time, Selway had no personal knowledge that MMK, in fact, met with
Bell to discuss the procurement of insurance. See id. at 39.
In addition to contending that Hileman’s affidavit amounts to an express
waiver, Gladfelter also attacks the credibility of the same affidavit. In doing so,
Gladfelter provides an email from after the first fire, wherein Bell and Menges
sought to engage Selway in a discussion about Bell’s insurance coverage. Doc. 991. As such, it actually appears that MMK might have provided legal advice to Bell
about the insurance policies before the second fire occurred, contrary to Hileman’s
contention that no legal advice was provided before both fires had occurred. See
generally, Doc. 94-1. In that regard, I refuse to accept the Hileman affidavit to
15

support the proposition that Bell did not seek legal advice from MMK for the
procurement of insurance.
More troubling to me, however, is that the email appears to include an
express

waiver

of

the

attorney-client

privilege,

wherein

confidential

communications between Menges and Bell were disclosed to Selway by Debbie
Splawski, at Bell. See Doc. 99-1. Unfortunately Gladfelter not only failed to
present this argument, but it also provided no background to the email.
Accordingly, I cannot decisively tell whether the exhibit is a series of emails
copied onto one page or whether it is one continuous email chain. There are also
other unexplained markups on the exhibit that make it difficult for me to determine
the document’s authenticity. Thus, while there may in fact have been an express
waiver, I cannot reach that conclusion based on this limited record. Moreover, just
because a single meeting, or several meetings, occurred between Gladfelter and
MMK does not necessarily mean that confidential communications were disclosed
so as to waive the privilege. I, therefore, am compelled to deny Gladfelter’s
motion on the grounds that Bell expressly, or directly, waived the attorney-client
privilege.

16

b. Implied Waiver.
In the alternative, Gladfelter argues that Bell waived the attorney-client
privilege pursuant to the “offensive use” doctrine, otherwise known as “at issue” or
“implied” waiver.

Specifically, Gladfelter contends that the lawsuit brought

against it by GNY, through a limited assignment from Bell, put the legal advice
Bell received from MMK into issue. In opposition, MMK contends that Bell never
affirmatively placed MMK’s legal advice in issue; rather, Gladfelter did via its
third-party complaint. As such, MMK argues, Bell did not impliedly waive the
attorney-client privilege.
Under the “offensive use” doctrine, a party can waive the attorney-client
privilege by asserting claims or defenses that put his or her attorney’s advice in
issue in the litigation. Rhone, 32 F.3d at 863. “In [such a case], the client has
made the decision and taken the affirmative step … to place the advice of the
attorney in issue. … [B]y placing the advice in issue, the client has opened to
examination facts relating to that advice.” Id. The attorney-client privilege is not
held to be waived, however, by the mere fact of bringing or defending a suit.
Nesselrotte v. Allegheny Energy, Inc., CIV. A. 06-01390, 2008 WL 2858401 at *7
(W.D. Pa. July 22, 2008) (citing Barr Marine Products, Co., Inc. v. Borg-Warner
Corp., 84 F.R.D. 631, 635 (D.C. Pa. 1979) (citation omitted)). The Third Circuit

17

has provided the following examples of when a client might impliedly waive the
attorney-client privilege:
[A] client may waive the privilege as to certain communications
with a lawyer by filing a malpractice action against the lawyer.
See Wigmore, § 2327, at 638. A defendant may also waive the
privilege by asserting reliance on the advice of counsel as an
affirmative defense. Chevron Corp. v. Pennzoil Co., 974 F.2d
1156 (9th Cir. 1992) (party's claim that its tax position was
reasonable because it was based on advice of counsel puts advice
in issue and waives privilege); see also, Hunt v. Blackburn, 128
U.S. at 470, 9 S.Ct. at 127, (client waives privilege when she
alleges as a defense that she was misled by counsel). See
generally, E. Cleary, McCormick on Evidence § 93, at 343 (3d
ed. 1984). In an action for patent infringement, where a party is
accused of acting willfully, and where that party asserts as an
essential element of its defense that it relied upon the advice of
counsel, the party waives the privilege regarding
communications pertaining to that advice. Mellon v. Beecham
Group PLC, 17 U.S.P.Q.2d 1149, 1151, 1991 WL 16494 (D.N.J.
1991); see also, e.g., W.L. Gore & Associates, Inc. v. Tetratec
Corp., 15 U.S.P.Q.2d 1048, 1051, 1989 WL 144178 (E.D. Pa.
1989) (client waived privilege by asserting reliance upon advice
of counsel as an essential element of his defense).
Rhone, 32 F.3d at 863.
Gladfelter argues that Pappas v. Holloway, 787 P.2d 30 (Wash. 1990), is the
leading case on implied waiver and on “all fours with the circumstances of this
case.” It is neither. Pappas has not been cited by one Pennsylvania state court or
any court in the Third Circuit.

Further, Pappas relies on a fairness analysis

articulated in Hearn v. Rhay, 68 F.R.D. (E.D. Wash. 1975), which has been
squarely rejected by our Third Circuit as being of “dubious validity.” Rhone, 32
18

F.3d at 864. “While [Hearn] dress[es] up [its] analysis with a checklist of factors,
[it] appear[s] to rest on a conclusion that the information sought is relevant and
should in fairness be disclosed. Relevance is not the standard for determining
whether or not evidence should be protected from disclosure as privileged, and that
remains the case even if one might conclude the facts to be disclosed are vital,
highly probative, directly relevant or even go to the heart of an issue.”

Id.

Additionally, Pappas, a case involving a claim by Pappas for attorney’s fees and
counterclaim by the clients for malpractice, dealt with the application of the
implied waiver doctrine against the factual backdrop of multiple attorneys
representing the client at various times during the underlying litigation at issue.
The timing of such representations and whether they occurred subsequently or
concurrently with the underlying matter was of critical importance to the Pappas
court in deciding which attorneys advice bore on the causation issue and would
thus be subject to the implied waiver doctrine.
Further, Pappas is inapplicable to this case. This matter does not involve
sequential or concurrent attorney-client relationships. Gladfelter never maintained
an attorney-client relationship with Bell so as to trigger such an analysis.

More

importantly, however, Bell, as assignor to GNY, has not placed the legal advice
given to it by MMK at issue by initiating this claim for negligence against
Gladfelter. Bell, through GNY, has not pursued a legal malpractice claim against
19

MMK in connection with this matter. It further has not made any allegations, or
raised any defenses thus far, that rest on, or disclose, counsel’s advice in
connection with the procurement of insurance. Consequently, I find that Bell did
not impliedly waive the attorney-client privilege because the legal advice provided
by MMK, whatever that may have been, has not affirmatively been placed into
issue by the filing of this lawsuit.
IV.

Order of the Court.
For these reasons, IT IS ORDERED that Gladfelter’s motion (Doc. 91) is

DENIED.
S/ Susan E. Schwab
Susan E. Schwab
United States Magistrate Judge

20