Title: Fischel & Kahn, Ltd. v. Van Straaten Gallery, Inc.
Citation: N/A
Docket Number: 86831
State: Illinois
Issuer: Illinois Supreme Court
Date: January 21, 2000

Docket No. 86831-Agenda 16-November 1999.
FISCHEL &amp; KAHN, LTD., Appellee, v. VAN STRAATEN GALLERY, INC. et 
al., Appellants.
Opinion filed January 21, 2000.
JUSTICE MILLER delivered the opinion of the court:
Plaintiff, Fischel &amp; Kahn, Ltd. (Fischel &amp; Kahn), filed a complaint 
in the circuit court of Cook County against defendants, van Straaten Gallery, 
Inc., and the New van Straaten Gallery, Inc. (van Straaten), for attorney fees. 
Van Straaten filed a counterclaim alleging that Fischel &amp; Kahn was 
professionally negligent in representing van Straaten. During discovery, Fischel 
&amp; Kahn filed a request for the production of documents. Van Straaten refused 
to produce 38 documents resulting from representation by subsequent counsel, 
claiming that documents were protected by attorney-client and work product 
privileges. Of the 38 documents van Straaten refused to produce, the trial court 
ordered the production of 22 documents. Van Straaten refused to produce any of 
the documents. As a result of van Straaten's failure to produce the documents, 
the trial court cited van Straaten for contempt and fined van Straaten. Van 
Straaten appealed. Fischel &amp; Kahn cross-appealed. The appellate court found 
that van Straaten had waived any privileges as to some, but not all, of the 
contested documents and ordered van Straaten to turn over the documents for 
which it found van Straaten had waived any privilege. The appellate court 
vacated the trial court's order of contempt. 301 Ill. App. 3d 336. We allowed 
van Straaten's petition for leave to appeal (177 Ill. 2d R. 315(a)), and we now 
reverse that portion of the appellate court's opinion requiring disclosure.
BACKGROUND
In 1986, van Straaten retained the law firm of Fischel &amp; Kahn to provide 
legal advice regarding the impact that the then recently enacted Illinois 
Consignment of Art Act (Consignment Act) (815 ILCS 320/0.01 et seq. 
(West 1996)) would have on van Straaten's art gallery business. Fischel &amp; 
Kahn advised van Straaten that it could limit its liability to consignment 
artists in case of damage or destruction of the artists' work to the cost of the 
materials used to create the work. Fischel &amp; Kahn drafted contractual 
language consistent with this advice for van Straaten to use in contracts with 
consignment artists.
On April 15, 1989, a fire destroyed van Straaten's gallery, including van 
Straaten's inventory of consigned art. Van Straaten filed suit against the owner 
of the building where the gallery was located and against the company that was 
renovating the building at the time of the fire. Several consignment artist 
intervened in this litigation, bringing claims against van Straaten for damages 
stemming from the destruction of their artwork. (The parties here refer to this 
action as the Mesirow litigation, for the name of one of the entities in the 
underlying litigation.) In July 1990, van Straaten retained the law firm of Pope 
&amp; John to represent van Straaten in the Mesirow litigation. We note that 
Fischel &amp; Kahn continued to represent van Straaten until no later than March 
31, 1992.
Fischel &amp; Kahn commenced the present action on October 14, 1992, when it 
filed a complaint in the circuit court of Cook County against van Straaten 
seeking payment of legal fees. In the complaint, Fischel &amp; Kahn alleged that 
from on or about August 1, 1990, through March 31, 1992, Fischel &amp; Kahn 
furnished professional legal services to van Straaten totaling $41,903.26.
Van Straaten answered the complaint by denying the allegations that payment 
was due to Fischel &amp; Kahn. Additionally, van Straaten asserted several 
affirmative defenses alleging that no amount was due to Fischel &amp; Kahn 
because Fischel &amp; Kahn breached fiduciary duties owed to van Straaten; the 
contract for legal services was voidable at the discretion of van Straaten; and 
Fischel &amp; Kahn breached its agreement to perform legal services for van 
Straaten. Van Straaten also filed a counterclaim against Fischel &amp; Kahn. In 
the counterclaim, van Straaten alleged, among other things, that Fischel &amp; 
Kahn committed malpractice in 1986 by negligently providing van Straaten with 
erroneous advice regarding the liability limiting contract provision Fischel 
&amp; Kahn drafted for van Straaten to use with consignment artists.
In answering van Straaten's counterclaim, Fischel &amp; Kahn denied that it 
was professionally negligent. Further, Fischel &amp; Kahn filed several 
affirmative defenses of its own, alleging that van Straaten was contributorily 
negligent in failing to exercise ordinary care, that van Straaten assumed the 
risk of damages in failing to secure adequate insurance, and that the settlement 
of the disputes with the responsible parties constituted an accord and 
satisfaction of any claims for damages van Straaten might have resulting from 
the Mesirow litigation.
Fischel &amp; Kahn filed a request for production of documents on July 30, 
1993. In this request, Fischel &amp; Kahn sought all of the contents of Pope 
&amp; John's files relating to the Mesirow litigation and the consignment 
artists' claims. Van Straaten objected to the production of 38 of the documents 
based either on the attorney-client privilege or the work product doctrine.
After an in camera inspection, the trial court found that van 
Straaten had waived its attorney-client and attorney work product privileges 
with respect to 22 of the documents. The trial court believed these documents 
were relevant to claims made by van Straaten in its counterclaim and that van 
Straaten waived any privilege when it placed these claims into controversy by 
filing the counterclaim against Fischel &amp; Kahn. The trial court ordered 
these 22 documents disclosed. The trial court, however, believed that 16 of the 
38 contested documents remained privileged. Van Straaten refused to produce any 
of the 22 documents ordered disclosed and was held in contempt.
Van Straaten appealed, asking the appellate court to find that the 
privilege had not been waived and to reverse the trial court's order holding van 
Straaten in contempt for failure to produce the documents that it alleged were 
protected by the attorney-client and work product privilege. In a cross-appeal, 
Fischel &amp; Kahn asked the appellate court to modify the order of the trial 
court finding 16 documents protected by the attorney-client and work product 
privilege by finding that van Straaten, in addition to waiving the privilege 
with respect to the 22 documents, also waived any privilege with respect to the 
16 remaining documents.
The appellate court affirmed, concluding that van Straaten's counterclaim for 
malpractice and Fischel &amp; Kahn's affirmative defenses to that action put the 
contents of the documents at issue, waiving both the attorney-client and work 
product privileges. 301 Ill. App. 3d at 341-42. Accordingly, the appellate court 
held that documents 1 through 10, 17, and 19 through 23 were discoverable. The 
appellate court held, however, that documents 11, 12, 14, 15, 16, and 18 
remained privileged because these documents were correspondence between Pope 
&amp; John and a law firm later retained by van Straaten to pursue the 
malpractice claim against Fischel &amp; Kahn. The appellate court remanded the 
cause for the trial judge to consider the status of the 16 documents the trial 
court had found protected. Finally, the appellate court vacated the trial 
court's order of contempt and directed van Straaten to turn over all documents 
for which it found any privilege had been waived. 301 Ill. App. 3d at 348. We 
allowed van Straaten's petition for leave to appeal. 177 Ill. 2d R. 315(a).
DISCUSSION
The issue before us is whether van Straaten, by filing a counterclaim against 
Fischel &amp; Kahn for malpractice, waived the attorney-client and work product 
privileges with Pope &amp; John, thereby subjecting the disputed documents to 
disclosure.
Because van Straaten contends that the discovery of the documents is 
protected by both the attorney-client privilege and the work product doctrine, 
we address each separately.
I. Attorney-Client Privilege
In defining the attorney-client privilege, this court has stated that where 
legal advice of any kind is sought from a professional legal adviser in his 
capacity as such, the communications relating to that purpose, made in 
confidence by the client, are protected from disclosure by himself or the legal 
adviser, except the protection be waived. In re Himmel, 125 Ill. 2d 531, 541 (1988), quoting People v. Adam, 51 Ill. 2d 46, 48 (1972), 
quoting 8 J. Wigmore, Evidence §2292 (McNaughton rev. ed. 1961).
In the present case, Fischel &amp; Kahn asserts that van Straaten waived its 
attorney-client privilege with Pope &amp; John when van Straaten sued Fischel 
&amp; Kahn for malpractice. Fischel &amp; Kahn argues that because van Straaten 
seeks damages for the defense and settlement of the Mesirow litigation, any 
facts surrounding that litigation are central to the question of whether Fischel 
&amp; Kahn can be held liable for malpractice. Fischel &amp; Kahn claims that 
without receiving all the documents surrounding the Mesirow litigation and its 
settlement, including documents that reveal otherwise privileged attorney-client 
communications, it would be impossible to determine whether and to what extent 
van Straaten's alleged loss resulted from Fischel &amp; Kahn's alleged 
malpractice. We disagree.
In the present case, it is undisputed that van Straaten, by counterclaiming 
against Fischel &amp; Kahn for legal malpractice, has placed Fischel &amp; 
Kahn's advice at issue and has waived the attorney-client privilege with respect 
to communications between it and Fischel &amp; Kahn. However, we do not believe 
that it follows that van Straaten, by that same action, has waived the 
attorney-client privilege with respect to communications between it and its 
subsequent counsel, Pope &amp; John.
We find support for our conclusion in cases from other jurisdictions 
addressing similar circumstances. In Jakobleff v. Cerrato, Sweeney &amp; 
Cohn, 97 A.D.2d 834, 468 N.Y.S.2d 895 (1983), the court held that when a 
plaintiff sued her former attorney for malpractice, she did not waive the 
attorney-client privilege as to her present attorney when the defendant attorney 
impleaded the present attorney on the issue of damages. The court stated that by 
bringing an action against her former attorney for legal malpractice, "plaintiff 
has placed her damages in issue, and defendants may both raise the defense of 
plaintiff's failure to mitigate damages and assert a third-party claim for 
contribution against the present attorney for those damages for which the former 
attorneys may be liable to plaintiff." Jakobleff, 97 A.D.2d  at 835, 468 N.Y.S.2d  at 897. The court further stated:
In the present case, we believe the affirmative defenses filed by Fischel 
&amp; Kahn are analogous to the third-party claim for contribution against the 
attorney in Jakobleff. To allow Fischel &amp; Kahn to invade the 
attorney-client privilege with respect to subsequently retained counsel in this 
case simply by filing the affirmative defenses it did would render the privilege 
illusory with respect to the communications between van Straaten and Pope &amp; 
John. Thus, we believe that the allegations raised in Fischel &amp; Kahn's 
affirmative defenses were insufficient to put the cause of van Straaten's 
damages at issue, resulting in waiver of the attorney-client privilege in this 
case.
Similar to Jakobleff, in Miller v. Superior Court, 111 Cal. App. 3d 390, 168 Cal. Rptr. 589 (1980), plaintiff Miller sued one of her former 
attorneys for malpractice, alleging that he negligently represented her in her 
divorce. The attorney raised the statute of limitations as a defense and 
requested discovery of otherwise privileged communications between plaintiff and 
other attorneys after defendant's alleged malpractice. The court held that the 
communications with plaintiff's attorneys after the alleged malpractice were 
protected by the attorney-client privilege. Miller, 111 Cal. App. 3d  at 
395, 168 Cal. Rptr.  at 591. The court explained:
We believe that a similar principle applies in this case. That van Straaten's 
damages are subject to dispute by the parties does not mean that van Straaten 
has waived its attorney-client privilege regarding communications between it and 
Pope &amp; John that might touch on that question. If raising the issue of 
damages in a legal malpractice action automatically resulted in the waiver of 
the attorney-client privilege with respect to subsequently retained counsel, 
then the privilege would be unjustifiably curtailed. See Schlumberger Ltd. 
v. Superior Court, 115 Cal. App. 3d 386, 393, 171 Cal. Rptr. 413, 417 
(1981).
In support of its position, Fischel &amp; Kahn relies on the decision by the 
Supreme Court of Washington in Pappas v. Holloway, 114 Wash. 2d 198, 
787 P.2d 30 (1990). In that case, the court held that when clients sued a former 
attorney for malpractice, the clients waived the attorney-client privilege with 
respect to all attorneys involved in the underlying litigation. Pappas, 
114 Wash. 2d  at 208, 787 P.2d  at 36.
We believe that Pappas is distinguishable from the present case. In 
Pappas, attorney Pappas sued his former clients, the Holloways, for 
attorney fees. The Holloways counterclaimed, alleging that Pappas committed 
malpractice in his handling of the underlying litigation. Pappas then brought 
third-party actions against other attorneys who jointly represented the 
Holloways in the underlying matter. Pappas alleged the same cause of action 
against the third-party defendants as the Holloways had alleged against him. 
Pappas later sought discovery of the third-party attorneys' files pertaining to 
the underlying suit. The lawyers objected to the production of the requested 
materials on the basis of the attorney-client privilege.
The Washington Supreme Court affirmed the trial court's ruling that the 
Holloways waived the attorney-client privilege with respect to all the lawyers 
involved in the underlying litigation. The court concluded that the Holloways 
could not bring an action against Pappas for malpractice and at the same time 
protect from disclosure communications made with other lawyers who also 
participated in the underlying litigation that gave rise to the Holloways' 
malpractice claim. Distinguishing Miller and Jakobleff, the 
Pappas court noted that the communications sought by Pappas took place 
during the time of the alleged malpractice and involved lawyers who were also 
representing the clients in the same matter when the malpractice allegedly 
occurred. Pappas, 114 Wash. 2d  at 205-06, 787 P.2d  at 34-35.
For these reasons, we believe that Pappas is distinguishable from 
the present case. Here, no question exists regarding who allegedly committed the 
malpractice complained of. There are no allegations in van Straaten's 
counterclaim referring to Fischel &amp; Kahn's conduct during the Mesirow 
litigation. Here, Fischel &amp; Kahn's alleged negligence, occurring in 1986, 
was already complete at the time Pope &amp; John was retained. Thus, we do not 
perceive the same problem here as the Pappas court did in determining 
who, among a number of different lawyers handling the same matter 
simultaneously, might have committed the alleged malpractice.
Moreover, Pappas ruled in favor of disclosure of the communications 
with the other lawyers only after determining, under Hearn v. Rhay, 68 F.R.D. 574 (E.D. Wash. 1975), that application of the privilege would deny 
Pappas access to information vital to his defense of the Holloways' malpractice 
action. The Pappas court believed that decisions made at various stages 
in the proceedings would be at issue in the malpractice case, and the court 
noted that Pappas did not actually try the case or take part in its eventual 
settlement. We do not believe that the material sought by Fischel &amp; Kahn in 
this case is similarly vital to its defense of van Straaten's malpractice 
action. Nondisclosure of van Straaten's communications with Pope &amp; John 
about the course and conduct of the Mesirow litigation will not prevent Fischel 
&amp; Kahn from challenging van Straaten's evidence on the issue of damages. 
Evidence regarding the client's damages resulting from the law firm's alleged 
negligence would, in the present context, be readily available to either party. 
Thus, we cannot conclude here, as the court did in Pappas, that the 
requested information is vital to the lawyer's defense of the malpractice 
action.
As additional authority, Fischel &amp; Kahn directs this court's attention to 
Rutgard v. Haynes, 185 F.R.D. 596 (S.D. Cal. 1999). In 
Rutgard, the court held that a plaintiff, by claiming damages to 
recover the amount of a settlement of an underlying case, waived the 
attorney-client privilege between himself and a subsequently retained attorney 
by putting "in issue" the reasonableness of that settlement and the attorney's 
actions in defending plaintiff and recommending that settlement. 
Rutgard, 185 F.R.D.  at 599-600.
Although Rutgard offers support for Fischel &amp; Kahn's position, 
we believe that the better approach is set forth in Jakobleff and 
Miller. Thus, we disagree with Fischel &amp; Kahn's assertion that, 
without reviewing all the documents surrounding the Mesirow litigation and its 
settlement, it is impossible to determine whether and to what extent van 
Straaten's alleged loss resulted from Fischel &amp; Kahn's alleged malpractice, 
if any, or some other source. Here, the privileged documents present one 
alternative means, though perhaps the most convenient, in which this information 
may be obtained. Mere convenience, however, should not justify waiver of the 
attorney-client privilege. To allow Fischel &amp; Kahn access to the privileged 
documents in this case would, we believe, unnecessarily undermine the purpose of 
the attorney-client privilege to encourage full and frank communication between 
attorneys and their clients. See Waste Management, 144 Ill. 2d  at 190; 
see also Upjohn Co., 449 U.S.  at 389, 66 L. Ed. 2d  at 591, 101 S. Ct. 
at 682. Therefore, we hold that van Straaten has not waived the attorney-client 
privilege in this case with respect to Pope &amp; John by filing a malpractice 
action seeking attorney fees and settlement costs of the Mesirow litigation.
II. Work Product Doctrine
Rule 201(b)(2) sets the parameters for the scope of discovery of work product 
materials. It provides, in pertinent part:
The work product doctrine provides a broader protection than the 
attorney-client privilege and is designed to protect the right of an attorney to 
throughly prepare his case and to preclude a less diligent adversary attorney 
from taking undue advantage of the former's efforts. See Hickman v. 
Taylor, 329 U.S. 495, 91 L. Ed. 451, 67 S. Ct. 385 (1947).
Similar to the argument Fischel &amp; Kahn made with respect to the 
attorney-client privilege, Fischel &amp; Kahn contends that van Straaten waived 
the work product privilege by suing Fischel &amp; Kahn for malpractice. Again, 
Fischel &amp; Kahn asserts that without reviewing all the documents surrounding 
the Mesirow litigation and its settlement, including Pope &amp; John's documents 
that reveal otherwise privileged work product, it would be impossible to 
determine whether and to what extent van Straaten's alleged loss resulted from 
Fischel &amp; Kahn's alleged malpractice.
Initially, we observe that the work product documents sought by Fischel &amp; 
Kahn in this case pertain to the underlying Mesirow litigation, which has 
concluded. It has been held, however, that the work product doctrine protects 
materials prepared for any litigation or trial so long as they were prepared by 
or for a party to the subsequent litigation. Federal Trade Comm'n v. Grolier 
Inc., 462 U.S. 19, 25-26, 76 L. Ed. 2d 387, 393, 103 S. Ct. 2209, 2213-14 
(1983). The rationale for continuing protection, even in unrelated cases, was 
explained in In re Murphy, 560 F.2d 326 (8th Cir. 1977):
We agree with the rationale expressed in Murphy and conclude that 
the work product privilege extends to all subsequent litigation. See, 
e.g., Midland Investment Co. v. Van Alstyne, Noel &amp; Co. 59 F.R.D. 134 (S.D.N.Y. 1973); Philadelphia Electric Co. v. Anaconda American 
Brass Co., 275 F. Supp. 146 (E.D. Pa. 1967). The issue then becomes whether 
van Straaten has waived the work product doctrine by suing Fischel &amp; Kahn 
for malpractice.
As stated, van Straaten is suing Fischel &amp; Kahn for malpractice. Van 
Straaten is attempting to recover damages in the amount it settled the Mesirow 
litigation as well as attorney fees. Although Pope &amp; John's work product may 
be relevant to the issues raised, we do not believe that its potential relevance 
justifies waiver of the work product doctrine in this case. If a lawyer's work 
product were subject to disclosure to opposing counsel merely on a showing of 
relevancy, much of what is now put down in writing would remain unwritten. "An 
attorney's thoughts, heretofore inviolate, would not be his own. Inefficiency, 
unfairness and sharp practices would inevitably develop in the giving of legal 
advice and in the preparation of cases for trial. The effect on the legal 
profession would be demoralizing. And the interests of the clients and the cause 
of justice would be poorly served." Hickman, 329 U.S.  at 511, 91 L. Ed. 
at 462, 67 S. Ct.  at 393-94. For the reasons stated above, and for the reasons 
expressed in the earlier discussion of the attorney-client privilege, we 
conclude that van Straaten did not waive the work-product doctrine in this case 
by filing a malpractice action against Fischel &amp; Kahn.
CONCLUSION
For the reasons stated, we reverse that part of the appellate court judgment 
requiring disclosure of the privileged documents and remand to the circuit court 
for further proceedings consistent with this opinion.
Appellate court judgment affirmed in part
and reversed in part;
cause remanded.