State Farm Fire & Cas. Co. v. Griggs
419 P.3d 572
Colo.2018Background
- Automobile-accident litigation where State Farm seeks declaratory relief against insured Gary Griggs and Goddard counterclaims, including bad-faith failure-to-settle/indemnify allegations.
- A State Farm adjuster testified a medical lien was $264,075; counsel later learned the lien was actually $264.75.
- State Farm’s then-counsel Franklin Patterson discovered the error but was disqualified before he fully investigated; new counsel later disclosed the corrected lien to Goddard.
- Goddard moved for sanctions (including a directed verdict on bad faith), alleging State Farm knowingly concealed the corrected lien amount.
- State Farm opposed sanctions and submitted an affidavit from its former counsel (Patterson) reciting factual events about discovery and the lien; Patterson denied intentional concealment.
- The district court found State Farm impliedly waived the attorney-client privilege by submitting Patterson’s affidavit and ordered disclosure of communications; State Farm sought relief under C.A.R. 21 to challenge that ruling.
Issues
| Issue | Plaintiff's Argument (State Farm) | Defendant's Argument (Goddard) | Held |
|---|---|---|---|
| Whether submitting former counsel’s affidavit impliedly waives attorney-client privilege | Affidavit contains only factual statements to rebut misconduct allegations and does not invoke or rely on privileged attorney advice | Endorsing Patterson as a witness and submitting the affidavit injects attorney-focused claims/defenses that place privileged communications at issue | Submission of Patterson’s factual affidavit did not effect an implied waiver; privilege preserved |
| Standard for implied waiver when a party asserts claims/defenses tied to attorney advice | Waiver requires a claim or defense that depends on privileged communications or disclosure to third parties | Waiver arises whenever privileged information becomes relevant through introduction of attorney-affiliated evidence | Court: relevance alone is insufficient; waiver requires use of privileged advice as a sword while shielding it as a shield |
| Whether mere denial of misconduct waives privilege | Denial is factual and does not invoke privileged communications | Denial may still implicate attorney conduct and advice | Mere denial does not waive privilege |
| Whether affidavit referred to attorney advice or privileged communications | Affidavit contains no reference to advice or communications; it recites facts only | Endorsement of Patterson as a witness (separate endorsement) could imply reliance on his advice | Court limited review to the affidavit and found no reference to advice or communications; no waiver |
Key Cases Cited
- People v. Trujillo, 144 P.3d 539 (Colo. 2006) (sets framework for implied waiver when a party’s claim or defense places privileged communications at issue)
- People v. Madera, 112 P.3d 688 (Colo. 2005) (discusses implied-waiver circumstances and limits of privilege)
- Wesp v. Everson, 33 P.3d 191 (Colo. 2001) (describes attorney-client privilege scope)
- In re Cty. of Erie, 546 F.3d 222 (2d Cir. 2008) (explains that relevance alone does not establish implied waiver; waiver requires reliance on privileged advice)
- Lorenz v. Valley Forge Ins. Co., 815 F.2d 1095 (7th Cir. 1987) (mere denial of allegations does not waive privilege)
- Bittaker v. Woodford, 331 F.3d 715 (9th Cir. 2003) (fairness principle: cannot litigate a claim dependent on privileged communications while withholding them)
- Gateway Logistics, Inc. v. Smay, 302 P.3d 235 (Colo. 2013) (harm from erroneous disclosure can be irreparable and justify original jurisdiction)
- Stone v. Satriana, 41 P.3d 705 (Colo. 2002) (malpractice allegations by a client may trigger implied waiver)
- Nunn v. Mid-Century Ins. Co., 244 P.3d 116 (Colo. 2010) (underlying precedent cited re: arbitration/assignments in related facts)