Speer v. Chapter 7 Trustee Tow (In re Royce Homes LP)

466 B.R. 81, 2012 WL 163940, 2012 U.S. Dist. LEXIS 5981
CourtUnited States Bankruptcy Court, S.D. Texas
DecidedJanuary 19, 2012
DocketCivil Action No. H-11-1069; Bankruptcy No. 09-32467
StatusPublished
Cited by24 cases

This text of 466 B.R. 81 (Speer v. Chapter 7 Trustee Tow (In re Royce Homes LP)) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, S.D. Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Speer v. Chapter 7 Trustee Tow (In re Royce Homes LP), 466 B.R. 81, 2012 WL 163940, 2012 U.S. Dist. LEXIS 5981 (Tex. 2012).

Opinion

MEMORANDUM AND ORDER

LEE H. ROSENTHAL, District Judge.

John Speer has appealed from the bankruptcy court’s order compelling discovery conducted under Federal Rule of Bankruptcy 2004. Speer was sole owner of the Chapter 7 debtor, Royce Homes LP, and president and chief executive officer of Royce Homes’s general partner, Ham-mersmith Group LLC. The appellee, Rodney Tow, serves as the trustee for Royce Homes’s bankruptcy estate. In September 2010, the trustee issued a subpoena that sought “documents and communications pertaining to business transactions, financial matters, and litigation involving Speer and the Debtor.” (Docket Entry No. 2, Ex. 16, ¶ 5). In response to the Rule 2004 subpoena, Speer produced a lengthy privilege log and a large number of documents, including emails. On the log, Speer marked many of the emails as covered by attorney-client privilege. At some point, the trustee learned that Speer’s production included a number of these allegedly privileged emails. The trustee communicated this to Speer’s attorneys. Through counsel, Speer responded that the inadvertent production had not waived the privilege, but he neither moved for protection nor demanded that the documents be returned.

The trustee moved to compel the production of documents that Speer claimed as privileged. Speer responded to the motion, and the bankruptcy court held an evidentiary hearing. A number of issues affected the court’s determination of the [84]*84documents’ discoverability, including whether Speer had a reasonable expectation of privacy as to the documents stored on Royce Homes’s server; whether the joint-representation rules applied and, if so, how; whether the production had waived any privilege; and whether state or federal law applied to these issues. After the hearing, the bankruptcy court ruled that federal law applied to the discovery disputes; that Speer had not met his burden of demonstrating that attorney-client privilege applied; and that, to the extent the documents were privileged, it was waived. On March 11, 2011, the bankruptcy court entered an order granting the trustee’s motion to compel, memorializing the previous oral ruling. (Docket Entry No. 2, Ex. 17). Speer filed a notice of appeal. (Docket Entry No. 1).

Although the parties have briefed the merits, (see Docket Entry Nos. 4, 6, 8), the trustee has moved to dismiss the appeal for lack of jurisdiction, (Docket Entry No. 5). Speer has responded, (Docket Entry No. 7); the trustee has replied, (Docket Entry No. 9); and Speer has surreplied, (Docket Entry No. 10). Based on the record, the briefs, and the applicable law, this court concludes that: (1) the challenged order is not a final order that Speer may appeal as of right under 28 U.S.C. § 158(a)(1); (2) the challenged order is not an appealable collateral order under Cohen v. Beneficial Industrial Loan Corp., 387 U.S. 541, 69 S.Ct. 1221, 93 L.Ed. 1528 (1949); and (3) there otherwise is no basis to grant leave to appeal, see 28 U.S.C. § 158(a)(3). The trustee’s motion to dismiss the appeal, (Docket Entry No. 5), is granted; Speer’s motion for leave to appeal, (Docket Entry No. 7, at 9), is denied; and the appeal is dismissed. The reasons for these rulings are explained below.

I. Background

On April 30, 2009, the bankruptcy court entered a Chapter 7 order for relief against Royce Homes. The trustee for the bankruptcy estate, Rodney Tow, issued a subpoena to John Speer under Federal Rule of Bankruptcy Procedure 2004 on September 16, 2010. (Docket Entry No. 2, Ex. 16, ¶¶ 2, 4). “The subpoena duces tecum requested Speer to produce documents and communications pertaining to business transactions, financial matters, and litigation involving Speer and the Debtor.” (Id., ¶ 5). This request sought email communications between Speer and his attorneys. Some of the requested communications related to litigation in which the attorneys represented both Speer and Royce Homes (and related entities), while others related to litigation in which the attorneys represented only Speer. Speer responded to the subpoena by both producing many documents and withholding many others on the basis of attorney-client privilege. For the withheld documents, Speer provided a privilege log of about 1,000 entries. (Id., ¶¶ 6-7). The trustee objected to this privilege log as inadequate. Speer submitted an amended privilege log that was “almost identical to the original privilege log[.]” (Id., ¶ 10). The trustee continued to object that the log was inadequate and that Speer could not validly assert the attorney-client privilege for many, if not most, of the documents.

Speer produced over 100,000 documents in response to the subpoena. (Docket Entry No. 7, ¶ 4). Part of the production was handled by his former Royce Homes executive assistant, Nancy Boothe. She had access to Speer’s “company-related e-mails and personal e-mails in connection with her job duties and responsibilities[.]” (Docket Entry No. 2, Ex. 16, ¶ 19). Boothe left Royce Homes in October 2008 to work as a legal secretary at a law firm. Before she left, Speer instructed her to [85]*85take her Royce Homes laptop with her. “[H]er continued use of the computer was necessary because she planned on remaining the Debtor’s ‘liaison’ to attorneys who were working on litigation involving the Debtor.” (Id., ¶ 22). In November 2008, Speer asked Boothe to print out and review emails he had sent from his Royce Homes email address, and sent through the Royce Homes server, and sort them into privileged and nonprivileged piles for discovery purposes in a lawsuit in which Speer and Royce Homes had been sued by a former employee. Boothe’s laptop did not contain Speer’s emails. Speer sent Ryan Gresham, a Royce Holmes IT employee,1 to Boothe’s home to upload his company emails onto the laptop. (Id., ¶¶ 24-26). Boothe printed Speer’s emails as instructed. The case for which she did the work settled. Speer told Boothe that the emails were no longer necessary and instructed her to discard the copies, but he did not instruct her to delete the emails from her laptop. (Id., ¶¶ 30-32).

The trustee requested access to Boothe’s laptop as part of the Rule 2004 examination. Boothe informed Speer of this request, and he did not object. Boothe told Speer that she intended to produce documents from the laptop to the trustee. (Id., ¶¶ 33-37). “The Trustee took possession of the computer’s contents, including Speer’s e-mails.” (Id., ¶ 38).

Sometime in December 2010, the trustee realized that the data taken from Boothe’s laptop included emails that Speer had claimed as privileged on the amended privilege log. The trustee shared this information with Speer’s counsel. (Docket Entry No. 4, at 12). At first, “Speer’s counsel did not demand that the Trustee refrain from reviewing these conversations.” (Docket Entry No. 2, Ex. 16, ¶ 42). Speer’s counsel thereafter “told the Trustee that Speer generally was not waiving any of the privileges.” (Id.)

Speer did not file a motion for protection or for return of the documents.

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Bluebook (online)
466 B.R. 81, 2012 WL 163940, 2012 U.S. Dist. LEXIS 5981, Counsel Stack Legal Research, https://law.counselstack.com/opinion/speer-v-chapter-7-trustee-tow-in-re-royce-homes-lp-txsb-2012.