Grochocinski v. Mayer Brown Rowe & Maw LLP

251 F.R.D. 316, 2008 U.S. Dist. LEXIS 45011, 2008 WL 2397673
CourtDistrict Court, N.D. Illinois
DecidedJune 9, 2008
DocketNo. 06 C 5486
StatusPublished
Cited by16 cases

This text of 251 F.R.D. 316 (Grochocinski v. Mayer Brown Rowe & Maw LLP) is published on Counsel Stack Legal Research, covering District Court, N.D. Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Grochocinski v. Mayer Brown Rowe & Maw LLP, 251 F.R.D. 316, 2008 U.S. Dist. LEXIS 45011, 2008 WL 2397673 (N.D. Ill. 2008).

Opinion

MEMORANDUM OPINION AND ORDER

MORTON DENLOW, United States Magistrate Judge.

Plaintiff David Groehocinski, in his capacity as the Chapter 7 trustee for the bankruptcy estate of CMGT, Inc., (“Plaintiff’), has moved for a protective order to prohibit the production of privileged documents to Defendants Mayer Brown Rowe & Maw LLP, Ronald B. Given, and Charles W. Trautner (“Defendants”). Plaintiff asserts these documents, as identified in his privilege log, are protected by the attorney-client privilege and the work-product doctrine. Defendants object to the protective order, arguing in part that all documents relating to Plaintiffs prelawsuit investigation and mental impressions about this ease are not privileged because Plaintiffs pre-lawsuit investigation has been put at-issue and because any attorney-client or work product privileges have been waived. For the reasons stated below, the Court grants in part and denies in part Plaintiffs motion.

I. FACTUAL BACKGROUND

A. PRE-SUIT INVESTIGATION

On September 21, 2004, Plaintiff was appointed the Chapter 7 trustee for the bank[320]*320ruptey estate of CMGT, Inc. (“Estate”). After Plaintiff was appointed trustee, he learned that the Estate may have legal malpractice claims against Defendants, its former attorneys. Because Plaintiff had no involvement with CMGT prior to its bankruptcy, he did not have first hand knowledge of the occurrence facts that gave rise to the potential malpractice claim. Thus, he and his attorneys conducted a pre-suit investigation and evaluation of potential claims against Defendants and others.

Plaintiffs pre-suit investigation included conducting legal research, speaking with occurrence witnesses, and reviewing documents relating to CMGT. Relevant to this motion, Plaintiff and his attorneys had discussions with Gerry Spehar (“Spehar”) about CMGT and related matters that were eventually alleged in Plaintiffs complaint. Spehar is the principal of Spehar Capital, LLC (“SC”), which CMGT hired pursuant to a written contract to locate and secure sources of financing for CMGT. Plaintiffs claims relate directly to SC and events in which SC was involved.

B. MALPRACTICE ACTION FILED AND REMOVED TO FEDERAL COURT

On August 23, 2006, Plaintiff filed a two-count complaint against Defendants in the Circuit Court of Cook County, Illinois. The Complaint alleges Defendants committed legal malpractice in their representation of CMGT, Inc. in a previous lawsuit in California against SC by (1) negligently advising CMGT not to settle the claim with SC prior to litigation and (2) by negligently advising CMGT not to appear in, and defend against, the litigation that SC ultimately filed. A $17 million default judgment was entered in that lawsuit (“Spehar Lawsuit”) against CMGT.

On October 10, 2006, Defendants removed the case to the United States District Court for the Northern District of Illinois. On November 30, 2006, Defendants moved to dismiss Plaintiffs complaint, arguing that Plaintiff failed to establish the elements of a legal malpractice claim as required under Rule 12(b)(6), and that this case should be dismissed with prejudice as a sanction because it is a “fraud on the judicial system.”

According to Defendants, the Spehar Lawsuit and this lawsuit are part of a fraudulent scheme because SC knew at the time it filed the Spehar lawsuit that CMGT could not afford to defend itself, and that as a creditor of CMGT, it could receive a substantial portion of any settlement or judgment in this lawsuit. After the default judgment was entered, the bankruptcy court approved a post-petition financing arrangement between SC and CMGT, in which SC agreed to advance up to $18,500 to the Estate to pursue this lawsuit and Plaintiff agreed that SC would receive a large share of the recovery in this case.

After the Court denied Defendants’ motion to dismiss, Defendants moved the Court to reconsider, arguing the court overlooked the critical fact that SC is the true party in interest in this lawsuit because it stands to recover the lion’s share of any recovery by Plaintiff. Defendants contend that Plaintiff deliberately or through inadvertence made no effort to vacate the Default Judgment, but instead decided to partner with Spehar to pursue this case. PI. Mot. at 5-6; Dock. No. 50, Mot. to Reconsider at 1-2. Defendants argued that even absent evidence of fraud, the Court should dismiss the case because the result will be “absurd” if Plaintiff wins.

C. LIMITED DISCOVERY ORDERED TO PROCEED

District Court denied Defendants’ motion to reconsider, but expressed concern about Plaintiffs failure to move to vacate the default judgment that was entered in the Spehar lawsuit, SC’s involvement in financing the costs of this litigation, and Plaintiffs motivation for filing this case. Def. Resp., Ex. A. As a result, Judge Kendall ordered the parties to engage in limited discovery regarding this “unclean hands” issue. Id. She indicated that discovery on this issue is to be broad, covering Plaintiffs behavior throughout the period of time leading up to this lawsuit. Id. at 4-5; Def. Resp., Ex. B at 6. Defendants indicated their intent to take discovery from Plaintiff and SC, as well as from some of CMGT’s shareholders to at[321]*321tempt to show the inadequacy of Plaintiff’s pre-filing investigations.1 Def. Resp., Ex. A.

Accordingly, Defendants served Plaintiff with interrogatories and document requests, and also issued a third-part subpoena to Spehar. Plaintiff objected to most of the written discovery requested, and filed a motion for a protective order asserting that the documents are protected by the attorney-client privilege and/or the work product doctrine. That motion is currently before this Court.

II. LEGAL STANDARDS

A. ATTORNEY-CLIENT PRIVILEGE

In civil actions involving an element of a claim or defense to which state law applies, privilege is determined in accordance with state law. Caremark, Inc. v. Affiliated Computer Servs., Inc., 192 F.R.D. 263, 265 (N.D.Ill.2000); FED.R.EVID. 501. Because this Court has jurisdiction over this case based on diversity of citizenship, and Plaintiffs legal malpractice claim arises under Illinois law, the issue of attorney-client privilege is governed by Illinois law. Caremark, 192 F.R.D. at 265; FED.R.EVID. 501.

Under Illinois’ definition of the attorney-client privilege, “where legal advice of any kind is sought from a professional legal advisor in his capacity as such, the communications relating to that purpose, made in confidence by the client, are protected from disclosure by himself or by the legal advisor,” unless the protection is waived. Fischel & Kahn, Ltd. v. van Straaten Gallery, Inc., 189 Ill.2d 579, 244 Ill.Dec. 941, 727 N.E.2d 240, 243 (2000).

B. WORK-PRODUCT DOCTRINE

While issues of attorney-client privilege are controlled by the forum state’s law in diversity cases, issues of work-product doctrine are controlled by federal law. Abbott Laboratories v. Alpha Therapeutic Corp., 200 F.R.D. 401, 405 (N.D.Ill.2001).

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Walker v. White
N.D. Illinois, 2019
Monco v. Zoltek Corp.
317 F. Supp. 3d 995 (E.D. Illinois, 2018)
Monco v. Zoltek Corporation
N.D. Illinois, 2018
Selby v. O'Dea
2017 IL App (1st) 151572 (Appellate Court of Illinois, 2018)
Miller UK Ltd. v. Caterpillar, Inc.
17 F. Supp. 3d 711 (N.D. Illinois, 2014)
Stopka v. American Family Mutual Insurance
816 F. Supp. 2d 516 (N.D. Illinois, 2011)
Pampered Chef v. Alexanian
737 F. Supp. 2d 958 (N.D. Illinois, 2010)
Osherow v. Vann (In Re Hardwood P-G, Inc.)
403 B.R. 445 (W.D. Texas, 2009)

Cite This Page — Counsel Stack

Bluebook (online)
251 F.R.D. 316, 2008 U.S. Dist. LEXIS 45011, 2008 WL 2397673, Counsel Stack Legal Research, https://law.counselstack.com/opinion/grochocinski-v-mayer-brown-rowe-maw-llp-ilnd-2008.