Garvy v. Seyfarth Shaw LLP
2012 IL App (1st) 110115
| Ill. App. Ct. | 2012Background
- Garvy retained Seyfarth in 2001 for corporate advice on Garvy Holding Co. (GHC) and related governance issues.
- Seyfarth advised on issuing 11,000 preferred shares and expanding the GHC Board to seven members.
- Garvy later purchased 8,500 of Gene Garvy’s preferred shares, creating potential conflicts and minority control concerns.
- Seyfarth issued a conflicts-of-interest letter (Nov. 3, 2004); Garvy did not sign and sought independent counsel.
- Garcvy pursued chancery litigation and then legal-malpractice claims against Seyfarth; discovery sought internal/extern al communications and work product; court ordered production but contempts ensued.
- Seyfarth withdrew as Garvy’s counsel in May 2007; appeal challenged circuit court orders on privilege/work-product discovery.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Seyfarth can appeal denial of substitution of judge | Garvy sought dismissal of appeal; argues substitution issue is pending | Seyfarth argues it lacked standing to challenge denial under Powell | Garvy’s motion to dismiss granted; Seyfarth lacks standing to appeal denial of substitution |
| Whether privilege logs were properly part of the record | Garvy relied on privilege logs to show disclosure failures | Seyfarth contends logs were not properly reviewed or relied on below | Logs were not properly part of the record; arguments relying on logs are stricken; logs not used in decision |
| Whether fiduciary-duty exception to attorney-client privilege applies | Garvy urges fiduciary-duty exception applies to disclose communications | Seyfarth argues Illinois has not adopted the exception; even if adopted, not applicable | Illinois has not adopted the fiduciary-duty exception; even if adopted, does not apply here |
| Whether communications and work product sought were protected by privilege/work product | Garvy contends disclosures needed for malpractice claims | Seyfarth contends privilege/work-product applies; no exceptions shown | Attorney-client privilege and work-product protection apply; orders to disclose reversed for those materials |
| Whether the circuit court erred in ordering disclosure of work product to Garvy | Garvy argues work product should be discoverable for malpractice claims | Seyfarth argues work product requires showing impossibility of obtaining similar info | No showing of impossibility; work product disclosure reversed and remanded |
Key Cases Cited
- Waste Management, Inc. v. International Surplus Lines Ins. Co., 144 Ill. 2d 178 (Ill. 1991) (limits of the attorney-client privilege; need for narrow construction)
- In re Marriage of Decker, 153 Ill. 2d 298 (Ill. 1992) (burden to show non-privilege; limits on exceptions)