7600 Ltd. Partnership v. QuesTech, Inc.

41 Va. Cir. 60, 1996 Va. Cir. LEXIS 450
Fairfax County Circuit Court·Decided September 26, 1996·No. Case No. (Law) 148381·Published·Cited by 2 cases

Opinion

By Judge Leslie M. Alden

On September 13,1996, the parties argued before this Court the Plaintiffs Motion to Compel interrogatories and document production requests. The Court took under advisement Interrogatory No. 11 and Document Request No. 17,2 which pertain to attorney’s billing records. Pursuant to the Court’s Order, the defendant submitted a memorandum on the effect of the advice of counsel defense on the attorney-client privilege, and the plaintiff filed a reply thereto.

[61]*61I find that the information sought pertaining to time records and fee information is relevant to the advice of counsel defense and that QuesTech waived its attorney-client privilege as to these matters by asserting the defense. The Motion to Compel as to Interrogatoiy No. 1 and Document Request No. 17 is therefore granted.

QuesTech’s Attorneys ’ Time Records

7600 Limited Partnership (7600) argues that, since QuesTech is claiming advice of counsel as a defense, QuesTech must demonstrate what action it sought from its lawyers and when it was sought. According to 7600, the . attorneys’ time/fee records are the best proof of this. On the other hand, QuesTech argues that such information is simply not relevant to its advice of counsel defense. QuesTech also asserts that any waiver of the attorney-client privilege is narrow, only going to the actual advice given and that the information sought is beyond the scope of the waiver.

Rule 4:1 of the Rules of the Supreme Court of Virginia states, in pertinent part:

Parties may obtain discovery regarding any matter, not privileged, which is relevant to the subject matter involved in the pending action, whether it relates to the claim or defense of... any other party ....

Thus, if the information sought is relevant and if any privilege protecting it has been waived, it is discoverable. Neither the Virginia Supreme Court nor the Virginia Court of Appeals has addressed the scope of the waiver of the attorney-client privilege when advice of counsel is propounded as a defense to a claim or malicious prosecution. However, the Virginia Supreme Court has discussed the elements which a defendant must show for advice of counsel to be a successful defense against such a claim. “The defendant must prove that he sought advice of counsel with an honest purpose of being informed of the law, that he made a full, correct, and honest disclosure of all material facts known to him or which he should reasonably have known, and that he acted in good faith guided by the advice given by counsel.” Pallas v. Zaharopoulos, 219 Va. 751, 250 S.E.2d 357 (1979). Thus, it is appropriate to discover information or material relevant to issues raised by this defense.

Here, 7600 seeks information about the quality and quantity of time QuesTech’s attorneys spent on researching and advising QuesTech about the aforementioned underlying litigation. This is relevant to QuesTech’s assertion of the advice of counsel defense because it goes to whether QuesTech did in [62]*62fact seek legal advice with an honest purpose and whether it made a full and honest disclosure of all material facts known. 7600 is entitled to any such information in order to rebut QuesTech’s defense. Thus, QuesTech’s claim that the information is not relevant fails.

Regarding QuesTech’s assertions of privilege, it is well settled that “when a party asserts an advice of counsel defense, it waives the attorney-client privilege with respect to ‘all communication to and from counsel concerning the transaction for which counsel’s advice was sought’.” Applied Telematics, Inc. v. Sprint Corp., 1995 WL 567436 at *1 (E.D. Pa. 1995).

QuesTech does not dispute that assertion of the defense results in a waiver ofthe attorney-client privilege; rather, QuesTech contends that the scope of the waiver is very narrow. Citing persuasive but not controlling cases, it claims that “[c]ourts have held that a party asserting the advice of counsel defense waives the attorney-client privilege only as to those communications to and from counsel concerning the transaction for which counsel’s advice was sought.” Def. Supp. Brief at 3. However, as stated above, I find that the information sought does “concem[] the transaction” which was the basis for the advice. Thus, the corporation waived its attorney-client privilege as to time spent by the attorneys preparing advice about whether to sue 7600.

QuesTech’s Attorneys Fees

7600 also seeks information about the attorneys’ fees incurred by QuesTech in the three underlying cases. At the September 13 hearing, I stated my doubts that fee information as a basis for determining reasonable attorneys’ fees was probative. Courts are split on whether the amount of time spent and fees incurred by the defendants is relevant or comparable to plaintiffs’ claims. See Naismith v. Professional Golfers Ass 'n, 85 F.R.D. 552, 563-64 (N.D. Ga. 1979) (finding that such information is relevant and discoverable); Mirabal v. General Motors Acceptance Corp., 576 F.2d 729, 731 (7th Cir.), cert. den., 439 U.S. 1039 (1979) (denying discovery of such information).

Commentators state that opposing counsel’s fees are a “relevant, but not controlling comparison .... [T]he better practice would probably allow the court to have the information and give it as much weight as it deems proper....” 2 Court Awarded Attorney Fees § 18-105, ¶ 18.06[2]; see also Manual for Complex Litigation (3d) 24.231 (asserting that records showing defendants’ attorneys’ fees may be a guide to determining reasonableness of fees claimed by plaintiffs).

[63]*63I conclude that information regarding the attorneys’ fees and expenses may be discovered as the privilege has been waived. Of course, the admissibility of the information will be determined by the trial judge.

January 24,1997

By Judge Stanley P. Klein

In their seven count Amended Motion for Judgment, Plaintiffs 7600 Limited Partnership and Guy Beatty seek damages against Questech, Inc., Norman H. Singer, and Keck, Mahin, and Kate (the Keck firm) for abuse of process (Count I), malicious prosecution (Count II), breach of contract (Counts III & IV), intentional interference with relationship (Count V), intentional infliction of emotional distress (Count VI), and generalized tort (Count VII). Singer and the Keck firm have demurred to the malicious prosecution count asserting that the Amended Motion for Judgment does not allege the “special injury” necessary to constitute a cause of action for malicious prosecution arising out of an underlying civil action. Singer and the Keck firm have, in addition, filed a plea in bar to the malicious prosecution and intentional interference counts on the grounds that these claims against them are time-barred. QuesTech also filed a plea in bar to the intentional interference count on the same basis.

The parties have fully briefed the relevant issues. The Court has considered these briefs, the relevant authorities, and the oral argument of counsel.

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7600 Ltd. Partnership v. QuesTech, Inc., 41 Va. Cir. 60, 1996 Va. Cir. LEXIS 450 (Va. Super. Ct. 1996).

41 Va. Cir. 60 (7600 Ltd. Partnership v. QuesTech, Inc.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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