Meyer-Chatfield Corp. v. Bank Financial Services
143 A.3d 930
Pa. Super. Ct.2016Background
- Meyer-Chatfield designs and sells bank-owned life insurance (BOLI). Several former Meyer-Chatfield employees (Goldberg, Payne, Winnick, Borchert, Barbaree, Schwartz, Byrd) left to work for competitor Bank Financial Services Group (BFS).
- Meyer-Chatfield sued BFS and the former employees alleging wrongful solicitation, misappropriation of personnel/clients/confidential information and breaches of restrictive covenants; BFS/individuals filed counterclaims seeking declarations that covenants were unenforceable.
- Extensive preliminary-injunction proceedings occurred; an interim injunction entered by the trial court was vacated by this Court on interlocutory appeal.
- Post-hearing, discovery disputes arose: (1) Meyer-Chatfield moved to quash subpoenas/notice to corporate designee (granted by trial court); (2) Meyer-Chatfield served discovery on BFS; BFS produced one page and objected asserting overbreadth and privileges; Meyer-Chatfield moved to compel.
- Trial court’s May 4, 2015 First Compel Order required BFS (and Byrd/Schwartz) to produce full responses "without objection," turn over computers/devices/email mailboxes and passwords for forensic imaging. A June 11, 2015 Second Compel Order attempted to add a privileged-review protocol.
- Multiple interlocutory appeals followed; this opinion resolves appealability, privilege-log procedure, jurisdictional limits on post-appeal reconsideration, and waiver for failure to respond.
Issues
| Issue | Meyer-Chatfield's Argument | BFS/Defendants' Argument | Held |
|---|---|---|---|
| Whether quash order (precluding subpoenas/nonparty and corporate-designee notice) was appealable as a collateral order | That the quash should be reversed so subpoenas/notice could be enforced | That the quash order was immediately appealable under collateral-order doctrine | Quashed appeal — order granted quash (precluding disclosure) is not a collateral order and is not immediately appealable |
| Whether the First Compel Order directing production (including devices/passwords) is immediately appealable to extent it compels privileged materials | Compel was proper to obtain documents and electronic evidence | Objected that requests were overbroad, burdensome and sought attorney-client, work-product, and joint-defense privileged materials | Appeal quashed as to non-privileged materials; retained jurisdiction only for claimed privileged materials and remanded for privilege-log process (per T.M.) |
| Proper procedure when a party asserts privilege but provided no privilege log | Meyer-Chatfield argued production should proceed absent detailed privilege assertion | BFS asserted privileges generally but provided no log | Court reversed in part and remanded: BFS must prepare a privilege log, court may conduct in camera review, then identify protected materials; remainder of First Compel remains in force |
| Whether trial court could enter Second Compel Order modifying First Compel after an appeal was filed and after 30-day appeal period | Meyer-Chatfield supported trial-court modifications to protect confidentiality | BFS argued court could act to impose screening/privilege protocol | Second Compel Order was void for lack of jurisdiction — trial court acted after appeal period expired; appeals from Second Compel were quashed |
| Whether Byrd and Schwartz waived privilege objections by not responding to motion to compel (and not being served with discovery) | Meyer-Chatfield argued they were subject to the motion and must produce responsive materials | Byrd/Schwartz argued they were not served with discovery and therefore should not be compelled; also raised privileges later | Held: Byrd/Schwartz waived privilege objections by failing to respond to the motion to compel; court affirmed compelled disclosure to extent of privileged materials claim |
Key Cases Cited
- Roman v. McGuire Memorial, 127 A.3d 26 (Pa. Super. 2015) (subject-matter jurisdiction and appealability principles)
- Melvin v. Doe, 836 A.2d 42 (Pa. 2003) (collateral-order doctrine interpreted narrowly)
- Ben v. Schwartz, 729 A.2d 547 (Pa. 1999) (orders compelling privileged materials appealable under Rule 313)
- T.M. v. Elwyn, Inc., 950 A.2d 1050 (Pa. Super. 2008) (requirement for privilege log and remand procedure for asserted privileges)
- Branham v. Rohm and Haas Co., 19 A.3d 1094 (Pa. Super. 2011) (collateral-order appealability where order required disclosure from nonresident nonparty)
- Price v. Simakas Co., Inc., 133 A.3d 751 (Pa. Super. 2016) (example of appealable order involving privileged information under Rule 313)
- Yocabet v. UPMC Presbyterian, 119 A.3d 1012 (Pa. Super. 2015) (standard of review for privilege questions)
- Manufacturers and Traders Trust Co. v. Greenville Gastroenterology, SC, 108 A.3d 913 (Pa. Super. 2015) (Pa.R.A.P. 1701 — limits on trial court action after appeal filed)
- Prince George Center, Inc. v. U.S. Gypsum Co., 704 A.2d 141 (Pa. Super. 1997) (issues raised first in motion for reconsideration are waived on appeal)