Farnsworth v. Van Cott, Bagley, Cornwall & McCarthy

141 F.R.D. 310, 1992 U.S. Dist. LEXIS 8795, 1992 WL 25263
CourtDistrict Court, D. Colorado
DecidedFebruary 4, 1992
DocketNo. 91-C-496
StatusPublished
Cited by2 cases

This text of 141 F.R.D. 310 (Farnsworth v. Van Cott, Bagley, Cornwall & McCarthy) is published on Counsel Stack Legal Research, covering District Court, D. Colorado primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Farnsworth v. Van Cott, Bagley, Cornwall & McCarthy, 141 F.R.D. 310, 1992 U.S. Dist. LEXIS 8795, 1992 WL 25263 (D. Colo. 1992).

Opinion

MEMORANDUM OPINION AND ORDER

RICHARD M. BORCHERS, United States Magistrate Judge.

THIS MATTER is before the Court on Defendant’s motion for entry of a protective order. A hearing was held on the motion on January 3,1992. Present at that hearing were the following: Robert Schuster and Phillip Pearlman, attorneys for Plaintiff; Plaintiffs Orin and Jacquline Farnsworth; and William McClearn and Jack Smith, attorneys for Defendant.

Argument was presented by counsel. The matter was then taken under advisement. This memorandum opinion and order constitutes the Court’s resolution of the Defendant’s motion.

I.

The history of this case is now long and tortured. The following is a brief resume of those facts necessary for resolution of the motion.

Defendant is a law firm with its principal place of business in Salt Lake City, Utah. Plaintiffs Orin and Jacquline Farnsworth were residents of Craig, Colorado for most of time at issue in this ease. They were in business, primarily in minerals and mining, in Utah, Colorado, and elsewhere. They also had established the Farnsworth Family Limited Partnership, the other Plaintiff in this case.

In the early 1980’s, Plaintiffs sought out and secured the representation of Defendant. This attorney-client relationship continued until November, 1984 when Defendant ceased representing the Plaintiffs. During most of this period of time, Robert K. Rogers, a partner in the Defendant firm, was the primary attorney in charge of Plaintiffs’ work. Mr. Rogers was denominated by Defendant as the supervisory or billing attorney for the firm. As such, Mr. Rogers was responsible for overseeing the work done for Plaintiffs by other attorneys in the firm.

During this same period of time, two corporations were formed by Plaintiff Orin [312]*312Farnsworth. These corporations, Centennial Gold Corporation (Centennial) and Marathon Gold Corporation (Marathon), were begun by Orin Farnsworth, but later became publicly traded corporations. The legal work for these corporations was also done by Defendant. The supervising attorney for the work for these corporations was Robert Rogers.

It is not disputed that during the period of time that Defendant handled Plaintiffs’ legal work that a substantial amount of fees were billed by Defendant. It is also not disputed that a large portion of the billed fees were paid by Plaintiffs.

In late Summer, 1984, Robert Rogers and his wife commenced a personal lawsuit against individual Plaintiffs. This was filed in Texas and involved allegations of fraud and securities violations dealing with various stocks and related documents that Mr. and Mrs. Rogers had received. The lawsuit began while Defendant and Mr. Rogers continued to do legal work for Plaintiffs.

Defendant attempted to continue to do legal work for Plaintiffs. Robert Rogers left his partnership position with Defendant in September, 1984. Shortly thereafter, Defendant filed, through its management committee, a grievance against Robert Rogers. It then withdrew its representation of Plaintiffs, as well as Marathon and Centennial.

In 1987, Plaintiffs commenced in this Court a professional malpractice action against Defendant. That case was dismissed upon motion of Defendant. It was then refiled in Texas, and Defendant again attempted to get it dismissed. Instead, the case was transferred back to this Court.

Plaintiffs have commenced discovery against Defendant. In response to these discovery requests and notices of deposition, Defendant has raised the attorney-client privilege, as it relates to records and testimony dealing with Centennial and Marathon. It is fair to say that most discovery has now bogged down as a result of this issue being raised in the motion for protective order filed by Defendant.

II.

The thrust of Defendant’s motion and argument is that the two corporations have not waived the attorney-client privilege and, therefore, Defendant, its employees, former employees, and related possible deponents may not discuss anything dealing with those corporations. On the other hand, Defendant has specifically requested in its motion for permission to use some documents in its own defense.

There are some additional facts that are relevant for consideration as to this issue. Orin Farnsworth was the president and chief operating officer of both Centennial and Marathon until 1985. He then left both. Those corporations were subsequently merged into what is now American Consolidated Growth Corporation (American). It is alleged that American has refused to waive the attorney-client privilege as it pertains to the predecessor corporations, Centennial and Marathon. For purposes of the motion, it will be accepted that American has refused to waive such privilege.

Defendant’s motion is predicated upon the argument that Centennial and Marathon were separate entities, thus having separate attorney-client privileges. Plaintiffs dispute this, arguing that the relationship between Plaintiffs and Defendant also included the corporations as joint clients. Plaintiffs also argue that this motion is nothing more than a continuation of the previous attempts by Defendant to deny them their day in court. Though this Court need not pass on Defendant’s motives in filing this motion, it would be fair to say that many roadblocks have been raised that have delayed a resolution of this controversy on the underlying facts.

A fair and reasonable reading of this entire file, as well as consideration of those facts undisputed by Defendant, indicates the following:

1. That Plaintiff Orin Farnsworth was the founder of Marathon and Centennial and the principal officer of each corporation during the time in question.

[313]*3132. That Plaintiffs were the principal shareholders in the corporations during the time period in question.

3. That Robert Rogers was the supervising attorney for Defendant during most of the time in question, and Mr. Rogers did or supervised work for Plaintiffs, Marathon, and Centennial all at the same time.

4. That billings and correspondence for Plaintiffs and the corporations were sent by Defendant to Orin Farnsworth, often in the same envelope or on the same document.

5. That the legal work done by Defendant for Plaintiffs, Marathon, and Centennial was intertwined and not easily distinguishable.

6. That Defendant ceased doing legal work for Plaintiffs and the corporations in November, 1984.

7. That Defendant did file a formal grievance against Robert Rogers and, prior to that, requested that he depart from the firm.

Defendant’s argument really does not make a great deal of sense when all of the facts are analyzed. Orin Farnsworth was the founder and principal officer in Marathon and Centennial during the time that is at issue here. He was the officer of the corporation who could then have waived the attorney-client privilege. Defendant now argues that any privilege, assuming one exists, can be waived only by a new officer in a new corporation who knows little or nothing as to what transpired between Plaintiffs and Defendant in 1984. It is entirely possible that all that the corporate officer of American knows is what he or she has been told by someone on behalf of Defendant.

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Cite This Page — Counsel Stack

Bluebook (online)
141 F.R.D. 310, 1992 U.S. Dist. LEXIS 8795, 1992 WL 25263, Counsel Stack Legal Research, https://law.counselstack.com/opinion/farnsworth-v-van-cott-bagley-cornwall-mccarthy-cod-1992.