State ex rel. Lause v. Adolf

710 S.W.2d 362, 1986 Mo. App. LEXIS 3886
CourtMissouri Court of Appeals
DecidedApril 1, 1986
DocketNo. 50884
StatusPublished
Cited by2 cases

This text of 710 S.W.2d 362 (State ex rel. Lause v. Adolf) is published on Counsel Stack Legal Research, covering Missouri Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
State ex rel. Lause v. Adolf, 710 S.W.2d 362, 1986 Mo. App. LEXIS 3886 (Mo. Ct. App. 1986).

Opinion

REINHARD, Judge.

Relators brought this proceeding in prohibition to prevent the respondent-judge from enforcing his order requiring relators to produce certain documents they assert to be privileged as confidential attorney-client communications and as attorney work product. We now make absolute our previously issued preliminary order in prohibition.

Relator Terre Du Lac Association, Inc. (Association) is a Missouri not-for-profit corporation which was organized as a property owners association to own, operate and maintain, upon completion, the common facilities of the Terre Du Lac subdivision. In 1983 the Association retained the law firm of Thompson & Mitchell to act as its counsel in pursuing various claims against the developers of the Terre Du Lac subdivision. The other relators are licensed attorneys who became involved in representing the Association while practicing law as a partner or associate of Thompson & Mitchell. On November 8, 1983, a complaint was filed on behalf of the Association in the U.S. District Court for the Eastern District of Missouri, in which various claims were asserted against the subdivision developer (Terre Du Lac, Inc.), C.I.T. Corporation, and others. See, Terre Du Lac Association, Inc. v. Terre Du Lac, Inc. 772 F.2d 467 (8th Cir.1985). C.I.T. was alleged to be a “joint venturer in law” with Terre Du Lac, Inc., apparently because of its involvement in financing the development. That suit is still pending.

On July 6, 1984, C.I.T. Corporation filed suit in the Circuit Court for the City of St. Louis, naming as defendants six persons who, as officers and directors of the Association, voted to file the federal lawsuit. C.I.T. Corp. v. Wayne Bates, et al., No. 842-02166 (St. Louis City Circuit Court). The gravaman of C.I.T.’s petition is that “the Association had no bona fide claims against C.I.T., but sued it as a ‘deep pocket’ because of concerns that the developer was essentially insolvent.” It should be pointed out that there were, at the time the Association filed its federal suit, seven directors on its Board and the seventh director, appointed by Terre Du Lac, Inc., was not named as a defendant in C.I.T.’s petition. Furthermore, the terms of two directors named as defendants expired in January 1985, and their successors were not substituted as defendants.

The six Bates defendants filed a joint answer and counterclaim, which were subsequently amended. In their second amended answer the Bates defendants asserted, as an affirmative defense, that in filing the federal suit they relied on the advice of attorneys. Their amended counterclaim asserted abuse of process and pri-ma facie tort. C.I.T. subsequently deposed those six individuals and examined them concerning the factual basis for their defense.

On November 7, 1985, C.I.T. caused deposition subpoenas duces tecum to be served on each of the attorney-relators. The subpoenas ordered the attorney-relators to produce various documents generated in the course of their representation of the Association, including “documents reflecting, concerning, or relating to communications between” the Association and the attorney-relators regarding the subject of the federal suit, as well as “All letters, opinion letters, memoranda, and all other documents, prepared ... or reviewed” by the attorney-relators or other counsel for the Association “with respect to the initiation, scope and substance” of the federal suit. The subpoenas also requested documents pertaining to legal fees as well as documents regarding all communications between the attorney-relators and Geoffrey Pratte, who is one of the Bates defendants. This latter request was apparently not limited to communications concerning the Terre Du Lac litigation. The attorney-relators filed a motion to quash the subpoenas, which was granted in part. Respondent quashed the subpoenas as to the documents reflecting communications with Pratte and those concerning legal fees; however, the attorney-relators were directed to comply with the rest of the subpoenas, and brought this [364]*364proceeding in prohibition to prevent respondent from enforcing that order.

Prohibition is an appropriate remedy to prevent enforcement of discovery orders requiring production of privileged documents. State ex rel. Syntex Agri-Business, Inc. v. Adolf, 700 S.W.2d 886, 887 (Mo.App.1985). However, while in the trial court the burden of proof on the issue of privilege is upon the party seeking production, that burden shifts when the case reaches this court by writ. Id.

With these precepts in mind, we consider relators’ contentions. There seems to be no question that the requested documents were confidential attorney-client communications. Respondent argues, however, that the Association has waived the attorney-client privilege because of the Bates defendants’ assertion of the advice of counsel defense and their deposition testimony regarding communications between themselves and the attorney-relators. We disagree.

It should be noted that the attorney-relators’ client was the Association, not the individual Bates defendants. Corporations, like individuals, enjoy the protection of the attorney-client privilege. Diversified Industries, Inc. v. Meredith, 572 F.2d 596, 608 (8th Cir.1977). As the United States Supreme Court has noted:

The administration of the attorney-client privilege in the case of corporations, however, presents special problems. As an inanimate entity, a corporation must act through agents. A corporation cannot speak directly to its lawyers. Similarly, it cannot directly waive the privilege when disclosure is in its best interest. Each of these actions must necessarily be undertaken by individuals empowered to act on behalf of the corporation....
[F]or solvent corporations, the power to waive the corporate attorney-client privilege rests with the corporation’s management and is normally exercised by its officers and directors. The managers, of course, must exercise the privilege in a manner consistent with their fiduciary duty to act in the best interest of the corporation and not of themselves as individuals.

Commodity Futures Trading Commission v. Weintraub, — U.S.-, 105 S.Ct. 1986, 1991, 85 L.Ed.2d 372 (1985). Respondent asserts that in this case “the acts of waiver were undertaken by the client corporation, through its officers and directors.”

Assuming arguendo that a party waives the attorney-client privilege by injecting the defense of reliance upon advice of counsel, the Association did not assert that or any other defense in the underlying litigation. The Association is not a party in the Bates case, and it cannot be seriously contended that the directors named as defendants raised the defense of reliance on advice of counsel on behalf of the Association. It is the individual directors who would be liable to C.I.T. for any judgment rendered in favor of it as plaintiff, and it is the directors who personally stand to recover any damages awarded on their counterclaims.1 The Bates defendants were clearly not acting as agents of the Association in that litigation.

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Bluebook (online)
710 S.W.2d 362, 1986 Mo. App. LEXIS 3886, Counsel Stack Legal Research, https://law.counselstack.com/opinion/state-ex-rel-lause-v-adolf-moctapp-1986.