Kurstin v. Bromberg Rosenthal, LLP

MURPHY, J. In Kurstin v. Bromberg, 191 Md.App. 124 , 990 A.2d 594 (2010), the Court of Special Appeals dismissed an appeal from the Circuit Court for Montgomery County that had been noted by Coralie Kurstin, Petitioner, who then requested that this Court issue a writ of certiorari to address four questions: 1. Is the attorney-client privilege a testimonial privilege only that is not violated unless and until the information gained is admitted as evidence in a trial such that the privilege does not protect against preliminary revelation of information? 2. Even if not appealable under the Collateral Order Doctrine, was the case properly appealable as a final judgment as to the undersigned? ⁴⁶⁸ 3. Does Maryland appellate procedure or the Supreme Court case of Mohawk Industries Inc. v. Carpenter [— U.S.-], 130 S.Ct. 599 [ 175 L.Ed.2d 458 ] (2009) act as an absolute bar to appellate review under the Collateral Order Doctrine of discovery orders involving the attorney-client privilege? 4.

Do the Maryland discovery rules permit inquiry into attorney-client protected matters when no claim has been brought in order to determine if a claim can be brought? We granted Petitioner’s request. 415 Md. 38 , 997 A.2d 789 (2010). Bromberg Rosenthal, LLP, and a member of that firm, Respondents, argue that the case at bar presents three questions: I. Did the Court of Special Appeals correctly conclude that the Circuit Court’s denial of a motion to quash and motion for a protective order in an ongoing case was not immediately appealable?

II

Was it within the Circuit Court’s discretion to deny Petitioner’s motion to quash and motion for a protective order?

III

Did the Circuit Court correctly conclude that by filing a legal malpractice claim against Respondents, Petitioner had implicitly waived her attorney client privilege with successor counsel? For the reasons that follow, we answer “yes” to Respondents’ first question, and shall therefore affirm the judgment of the Court of Special Appeals. Background In the District Court of Maryland for Montgomery County, Respondent Bromberg Rosenthal filed a Complaint against Petitioner, seeking a judgment for the balance of fees owed by Petitioner under “a contract (Employment Agreement) in which [Petitioner] hired [Respondent] to represent her in matters relating to and arising out of her divorce.” Petitioner ⁴⁶⁹ filed a JURY DEMAND and, after the District Court transmitted the record to the Circuit Court for Montgomery County, Petitioner filed an ANSWER, COUNTER CLAIM AND JOINED PARTY COMPLAINT that included the following assertions: 3. [Respondents] negotiated on behalf of [Petitioner] an agreement for the children as third-party beneficiaries memorialized in open court which agreement stated: Dr. Kurstin is going to continue to maintain his current life insurance policy of 1.5 million dollars for the benefit of the parties’ children, and this beneficiary designation will be irrevokable [sic]. 4. [Petitioner] gave substantial consideration to acquire this policy for the benefit of her children. 5. [Respondents] failed to complete their obligation as counsel to effectuate the agreement by notifying the insurance carrier of the irrevocable designation of beneficiary. 6. Ronald Kurstin subsequently modified the designation of beneficiary naming his girlfriend.

If [Respondents] had discharged their duty as counsel, the modification in beneficiary could not have been made. 7. Suite was instituted to enjoin distribution and reform the insurance contract. The suit was settled with Ronald Kurstin receiving $250,000.00. This sum was lost to [Petitioner] through the failure by [Respondents] to discharge their duty as counsel. 8.

The failure to discharge their duty was not only a breach of contract but an act of negligence. 9. The actions by [Respondents] was the proximate cause of the loss of $250,000.00. WHEREFORE, [Petitioner] prays damages of $500,000.00, prejudgment interest on the liquidated amount of $250,000.00 costs and attorney’s fees. ⁴⁷⁰ During pretrial skirmishing, Respondents issued a subpoena duces tecum to Petitioner’s present counsel, who filed a MOTION TO QUASH NOTICE OF DEPOSITION AND FOR PROTECTIVE ORDER that included the following assertions: 1. There is no justification in law permitting inquiry into the matters covered by the attorney-client privilege, work product privilege or mental impressions of counsel. 2.

There has been no waiver of the attorney-client privilege in the separate case in which undersigned counsel represented Coralie Kurstin as a result of the action for malpractice arising from the prior domestic case in which undersigned counsel was not involved. The motion was accompanied by a MEMORANDUM that provided the following procedural history: The First Case—This was a domestic proceeding, Family law 17598, resulting in a judgment of absolute divorce on December 31, 2002 between Coralie Kurstin and Ronald Kurstin (now deceased). In that case, a settlement agreement was entered into in open court. The settlement agreement included, inter alia: Dr. Kurstin is going to continue to maintain his current life insurance policy of 1.5 million dollars for the benefit of the parties’ children, and this beneficiary designation will be irrevokable [sic].

This settlement agreement was incorporated and not merged into the decree. The case was completed but matter lay quiescent except for occasional modifications of alimony not here relevant. Undersigned counsel was not involved in this case and was, not at that time, even familiar with the parties. The Second Case—This case arose where Ronald Kurstin was terminally ill with Stage 4 lung cancer.

Death was imminent. Coralie Kurstin and the children learned that contrary to the settlement agreement, Ronald Kurstin had designated his girlfriend [] as beneficiary on the policy. ⁴⁷¹ Coralie Kurstin came to undersigned counsel when the designation of [the girlfriend] became known. Undersigned counsel then filed case number 272038 in this Court on June 2, 2006 originally denominated as Coralie Kurstin and Randy A Kurstin (one of the children) v. Ronald Kurstin, USAA Life (the issuer of the 1.5 million dollar policy) and [the girlfriend]. The Plaintiff parties were subsequently amended to include all four children.

During this process, Coralie Kurstin learned that her counsel, [Respondents], had never notified USAA Life of the settlement agreement and its relationship to the designation of its beneficiaries. The Third Case—[Respondents] then decided to sue for $25,000.00 in District Court for fees they alleged were owed to them by Coralie Kurstin. The District Court ease was removed to Circuit Court by jury demand and a counterclaim alleging malpractice was added. In defending the malpractice action, [Respondent Bromberg Rosenthal] seeks the deposition duces tecum of the undersigned counsel with the expressed intent of possibly suing the undersigned counsel for contribution and indemnification intending to allege negligence in advance as to risk assessment given to Coralie Kurstin and the children upon which they based their determination to settle the Second Case recited above.

For the reasons presented below, their position as to a waiver of attorney-client privilege by Coralie Kurstin permitting inquiry of undersigned counsel is not well taken. (Footnote omitted). Respondents filed an OPPOSITION TO MOTION TO QUASH that included the following assertions: 7. [Respondents] were not involved in that litigation and desire to question [Petitioner’s present counsel] as to (a) his representation of [Petitioner] in the litigation of Mr. Kurstin, (b) what recommendation, if any, he made with respect to the settlement of the litigation against Mr. Kurstin and ⁴⁷² (c) any communication that he had with the [Petitioner] regarding the decision to settle the action. [Respondents] contend that the [Petitioner] has waived the attorney client privilege with respect to those matters by filing this lawsuit and thereby putting those matters at issue, since the requested information is relevant to the claims and defenses being pursued herein. 9. [Respondents] request that this court make a determination that the attorney client privilege between the [Petitioner] and [Petitioner’s present counsel] has been waived with respect to the matters set forth above and as result, deny [Petitioner’s present counsel’s] Motion to Quash Notice of Deposition for Protective Order. As the information being sought by [Respondents] is limited and is clearly important to [Respondents’] defense in this matter, the Court should determine that the [Petitioner], by filing her Counterclaim and Joined Party Complaint against [Respondents], has implicitly waived her attorney-client privilege with [Petitioner’s present counsel].

If the court rules otherwise, it will permit the [Petitioner] to shield potentially relevant information necessary to [Respondents’] defense in this case while simultaneously maintaining a claim against [Respondents] for legal malpractice. As the Court of Appeals set forth in Parler & Wobber v. Miles & Stockbridge [, 359 Md. 671 , 756 A.2d 526 (2000) ], Maryland law does not countenance such a result. (Footnotes omitted). The Circuit Court entered the following ORDER: Upon consideration of the Motion to Quash Notice of Deposition and for Protective Order filed by [Petitioner’s present counsel], and the opposition thereto & Defendant’s reply[,] it is this 8th day of January, 2009, by the Circuit Court for Montgomery County, hereby ⁴⁷³ ORDERED, that the Motion to Quash Notice of Deposition and for Protective Order filed by [Petitioner’s present counsel] is hereby DENIED; and it is further ORDERED, that the attorney-client privilege between the [Petitioner] and [Petitioner’s present counsel] has been waived.

(Strikeout in original). Petitioner noted an appeal to the Court of Special Appeals from the January 8, 2009 Order, and the Court of Special Appeals dismissed that appeal as premature in a reported opinion that included a discussion of cases in which this Court has (1) announced the rule that interlocutory discovery orders do not satisfy the requirements of the collateral order doctrine, 1 and (2) recognized the rare exceptions to that rule. 2 191 Md.App. at 153-54 , 990 A.2d at 610-11 . The opinion of the Court of Special Appeals concluded as follows: Whether the ruling in this case is measured on an ad hoc basis against the four conjunctive criteria of the collateral order doctrine or is treated categorically as within the class of discovery rulings adverse to the attorney-client privilege, either of which approaches alone would be fatal to the appellant’s immediate cause, it fails to qualify for immediate appealability under the collateral order doctrine. By way of the case-by-case long way around or by way of the categorical short cut, this appeal is off the tracks.

Id. at 158 , 990 A.2d at 614 . Discussion In Nnoli v. Nnoli, 389 Md. 315 , 884 A.2d 1215 (2005), this Court stated: ⁴⁷⁴ The collateral order doctrine treats as final and appealable interlocutory orders that (1) conclusively determine the disputed question; (2) resolve an important issue; (3) resolve an issue that is completely separate from the merits of the action; and (4) would be effectively unreviewable on appeal from a final judgment. Dawkins v. Baltimore Police, 376 Md. 53, 58 , 827 A.2d 115, 118 (2003). The collateral order doctrine is a very narrow exception to the final judgment rule, and each of its four requirements is very strictly applied in Maryland.

Id. at 58-59 , 827 A.2d at 118 . In particular, the fourth prong, unreviewability on appeal, “is not satisfied except in ‘extraordinary situations.’ ” Shoemaker v. Smith, 353 Md. 143, 170 , 725 A.2d 549, 563 (1999) (quoting Bunting v. State, 312 Md. 472, 482 , 540 A.2d 805, 809 (1988) (per curiam)). Id. at 329, 884 A.2d at 1223 . Although