991 N.E.2d 1066
Mass.2013Background
- RFF Family Partnership lent $1.4M to Link; Burns & Levinson (B&L) represented RFF in title work, due diligence, foreclosure, and post-foreclosure matters.
- After foreclosure, an assignee filed suit claiming priority; RFF’s title insurer retained Prince Lobel while B&L continued certain representation.
- Prince Lobel sent B&L a notice of claim alleging malpractice and attaching a draft complaint; B&L attorneys (MacClary, Perkins, Davidson) consulted B&L partner David Rosenblatt, the firm’s designated in-house ethics/risk counsel.
- B&L did not bill RFF for time spent consulting Rosenblatt and temporarily withdrew before obtaining written assurance from RFF that Prince Lobel was not authorized to sue; B&L later resumed representation.
- RFF sued B&L for malpractice; B&L sought a protective order to shield confidential communications with Rosenblatt; the trial judge partially granted protection and this interlocutory privilege ruling was appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether communications between firm attorneys and the firm’s in‑house counsel about a malpractice claim by a current client are privileged as against that client | RFF: privilege does not protect those in‑house communications as to the client once a malpractice claim is threatened unless the firm withdraws or obtains informed client consent — fiduciary duties and conflict rules require disclosure | B&L: in‑firm consultations with designated in‑house ethics counsel are privileged if certain conditions (designation, no prior work on the matter by in‑house counsel, not billed to client, confidentiality) are met | Held: Privilege applies if four conditions are met (designation, in‑house counsel did not work on the client matter or a substantially related matter, time not billed to client, communications made and kept confidential) — protective order affirmed |
| Whether the fiduciary exception defeats privilege here | RFF: beneficiaries/current clients should be treated as the real client for communications concerning the matter, so firm cannot shield communications obtained with client funds or affecting client interests | B&L: communications here were obtained for the firm’s defense at the firm’s expense; fiduciary exception (as described in Jicarilla/Zimmer) does not apply | Held: Even if adopted, fiduciary exception would not apply because the communications were for the firm’s own defense and were not charged to the client |
| Whether the “current client” exception or imputation requires disclosure | RFF: imputation and conflict rules mean in‑house counsel is effectively also counsel to the client, so communications are vitiated and discoverable unless firm withdraws or secures client waiver | B&L: imputation and rule 1.7 are not meant to bar a firm from consulting its in‑house ethics counsel; disallowing privilege would produce dysfunctional results and is not required by the rules | Held: Court rejects the current‑client exception and imputation argument; conflict rules do not automatically vitiate privilege and sanctions other than disclosure are available for rule violations |
Key Cases Cited
- Upjohn Co. v. United States, 449 U.S. 383 (privilege protects communications that enable counsel to give informed advice to organizational clients)
- Commissioner of Revenue v. Comcast Corp., 453 Mass. 293 (articulating Wigmore formulation of privilege)
- Suffolk Constr. Co. v. Div. of Capital Asset Mgmt., 449 Mass. 444 (attorney‑client protection for in‑house counsel communications in government/organizational context)
- United States v. Jicarilla Apache Nation, 131 S. Ct. 2313 (fiduciary exception scope; distinguishes advice obtained for beneficiaries’ benefit vs. trustee’s own defense)
- In re Teleglobe Comm’ns Corp., 493 F.3d 345 (misconduct in conflict does not automatically destroy privilege between conflicted clients)
- Hertzog, Calamari & Gleason v. Prudential Ins. Co. of Am., 850 F. Supp. 255 (in‑house counsel communications privileged when counsel acts as attorney, not participant)
- Hunter, Maclean, Exley & Dunn, P.C. v. St. Simons Waterfront, LLC, 317 Ga. App. 1 (Georgia appellate decision recognizing in‑firm privilege when in‑house counsel had no involvement in the underlying client matter)