Gillard v. AIG Insurance

15 A.3d 44, 609 Pa. 65, 2011 Pa. LEXIS 393
CourtSupreme Court of Pennsylvania
DecidedFebruary 23, 2011
Docket10 EAP 2010
StatusPublished
Cited by84 cases

This text of 15 A.3d 44 (Gillard v. AIG Insurance) is published on Counsel Stack Legal Research, covering Supreme Court of Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Gillard v. AIG Insurance, 15 A.3d 44, 609 Pa. 65, 2011 Pa. LEXIS 393 (Pa. 2011).

Opinions

[69]*69 OPINION

Justice SAYLOR.

In this appeal, we consider whether, and to what degree, the attorney-client privilege attaches to attorney-to-client communications.

This litigation entails a claim of bad faith arising out of insurance companies’ handling of Appellee’s uninsured motorist claim. During discovery, Appellee sought production of all documents from the file of the law firm representing the insurers in the underlying litigation (who are the appellants here). Appellants withheld and redacted documents created by counsel, asserting the attorney-client privilege.

In response, Appellee sought to compel production. Appellee took the position that the attorney-client privilege in Pennsylvania is very limited — according to Section 5928 of the Judicial Code — to confidential communications initiated by the client:

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. § 5928.

Appellee’s motion allowed, in the abstract, that certain lawyer-initiated communications might contain information originating with the client and, accordingly, may be privileged. Appellee observed, however, that Appellants had not sought such derivative protection, but rather, asserted the privilege broadly, as if it were a “two-way street.” Appellee maintained that the privilege is, in fact, a “one-way street” and must be strictly contained to effectuate the will of the General Assembly and minimize interference with the truth-determining process. As further support, Appellee referenced Birth Center v. St. Paul Cos., Inc., 727 A.2d 1144, 1164 (Pa.Super.1999) (“The attorney-client privilege ... only bars discovery or testimony [70]*70regarding confidential communications made by the client during the course of representation.”).

For their part, Appellants highlighted the privilege’s purpose to foster the free and open exchange of relevant information between the lawyer and his client.1 To encourage such candid disclosure, Appellants reasoned, both client- and attorney-initiated communications must enjoy protection. In this regard, Appellants referenced Maiden Creek T.V. Appliance, Inc. v. General Casualty Insurance Co., No. Civ.A. 05-667, 2005 WL 1712304, at *2 (E.D.Pa. July 21, 2005) (“The attorney-client privilege protects disclosure of professional advice by an attorney to a client or of communications by a client to an attorney to enable the attorney to render sound professional advice.” (citing Upjohn, 449 U.S. at 390, 101 S.Ct. at 683)). Appellants also stressed, that, under caselaw prevailing in the bad-faith litigation arena, a carrier asserting an advice-of-counsel defense waives the attorney-client privilege relative to such advice. See, e.g., Mueller v. Nationwide Mut. Ins. Co., 31 Pa. D. & C.4th 23, 32-33 (C.P.Allegheny, 1996) (Wettick, J.). According to Appellants, such a waiver would [71]*71be superfluous were the advice of counsel discoverable from the outset.

During in camera review proceedings in the presence of counsel, the common pleas court adopted the “one-way street” perspective. See N.T., Mar. 29, 2007, at 8 (“According to the Pennsylvania statute, the attorney-client protection only applies to communications made by the client. That’s my ruling.”). Further, as reflected in the following interchange with defense counsel, the court repeatedly grounded its ruling on the direction of the flow of the information, not the content, suggesting that derivative protection was absent:

[Defense Counsel]: I think with that ruling, Your Honor, then that would obviate the need to go through a number of documents that are communications from attorney to client, because as I understand the ruling, is that those communications are, pursuant to the Court’s ruling, not going to be within the scope of the attorney-client privilege.
THE COURT: Exactly.

Id. at 8-9. Additionally, the common pleas court couched its ruling as a “blanket” one. Id. 27.

In its opinion under Rule of Appellate Procedure 1925, the court referenced the following decisions as supportive of its ruling: Slater v. Rimar, Inc., 462 Pa. 138, 148, 338 A.2d 584, 589 (1975) (“[T]he law wisely declares that all confidential communications and disclosures, made by a client to his legal adviser for the purpose of obtaining his professional aid or advice, shall be strictly privileged[.]” (citation and quotation marks omitted)); Commonwealth v. Maguigan, 511 Pa. 112, 131, 511 A.2d 1327, 1337 (1986) (describing the attorney-client privilege in the context of the criminal law, see 42 Pa.C.S. § 5916, as “limited to confidential communications and disclosures made by the client to his legal advisor”); and In re Estate of Wood, 818 A.2d 568, 571 (Pa.Super.2003) (“[T]he privilege applies only to confidential communications made by the client to the attorney[.]”). The court, however, appeared to moderate its focus on the direction of flow and to accept the possibility of some derivative protection. Nevertheless, it [72]*72explained that Appellants had not argued that the withheld attorney communications contained information originating with the client.

Appellants filed an interlocutory appeal, invoking the collateral order doctrine. See Pa.R.A.P. 313; Ben v. Schwartz, 556 Pa. 475, 483-85, 729 A.2d 547, 551-52 (1999). The Superior Court exercised jurisdiction and affirmed in a brief memorandum opinion, relying on Nationwide Mutual Insurance Co. v. Fleming, 924 A.2d 1259, 1269 (Pa.Super.2007) (holding that “protection is available only for confidential communications made by the client to counsel” (emphasis in original)), aff'd on other grounds by an equally divided court, 605 Pa. 468, 992 A.2d 65 (2010). Consistent with Fleming, the Gillard panel treated the privilege as being “strictly limited.” See Gillard v. AIG Ins. Co., No. 1065 EDA 2007, slip op. at 4, 947 A.2d 836 (Pa.Super. Jan. 4, 2008).

Like Appellee, the Superior Court did recognize Fleming’s allowance for some derivative protection of attorney-to-client communications. See id. at 5-6 (“Fleming makes it clear that communications from an attorney to a client are protected ... under Section 5928, but only to the extent that they reveal confidential communications previously made by the client to counsel for the purpose of obtaining legal advice.” (quotation marks omitted and emphasis in original)). Nevertheless, the panel discerned no specific claim that the sought-after documents would disclose confidential communications made by Appellants to their attorneys. Thus, it held, the privilege did not apply. See id. at 6.

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Bluebook (online)
15 A.3d 44, 609 Pa. 65, 2011 Pa. LEXIS 393, Counsel Stack Legal Research, https://law.counselstack.com/opinion/gillard-v-aig-insurance-pa-2011.