Opinion ID: 1665643
Heading Depth: 1
Heading Rank: 8

Heading: whether discovery of attorney kaelin is proper

Text: Lastly, appellants argued that the trial court erred in overruling a motion filed by them to compel discovery from Scanlan's attorney, Mr. Kaelin, of certain matters and by holding that the attorney-client privilege was applicable under the circumstances. In its motion, Steelvest moved the court to require Kaelin to respond to certain discovery requests pertaining to communications between Kaelin and Scanlan which related to the planning and formation of Scansteel and H & M Investors. A request was also made to produce certain documents in Kaelin's possession concerning these matters and these entities. The trial court denied this discovery motion as it found such matters protected from discovery by the attorney-client privilege. KRS 421.210(4) respecting the attorney-client privilege provides: That no attorney shall testify concerning communications made to him, in his professional character, by his client, or his advice thereon, without the client's consent. This statutory provision generally conforms to the common law policy and rule of attorney-client privilege which is generally recognized in the United States. See, Hughes v. Meade, Ky., 453 S.W.2d 538 (1970); Standard Fire Insurance Co. v. Smithhart, 183 Ky. 679, 211 S.W. 441 (1919). The privilege applies to communications or acts done within the scope of the professional employment of an attorney and not to cases where the attorney acts merely as an agent or as an attorney-in-fact. Hughes v. Meade, supra . The privilege is generally considered to be absolute as to communications made by or to a person advising with an attorney as to past transactions and offenses. Cummings v. Commonwealth, 221 Ky. 301, 298 S.W. 943 (1927). However, the rule does not apply to future transactions when the person seeking the advice is contemplating the committing of a crime or the perpetration of a fraud. Cummings v. Commonwealth, supra ; Standard Fire Insurance Co. v. Smithhart, supra . Kaelin was consulted by Scanlan for assistance in the formation of Scansteel. Therefore, we must determine whether this alleged breach of fiduciary duty by Scanlan amounts to the perpetration of a fraud. Under Kentucky law, tort liability exists for the interference with a known contractual relationship, if the interference is malicious or without justification, or is accomplished by some unlawful means such as fraud, deceit, or coercion. See, Derby Road Building Co. v. Commonwealth, Dept. of Highways, Ky., 317 S.W.2d 891 (1958); Brooks v. Patterson, 234 Ky. 757, 29 S.W.2d 26 (1930). We would presume to place the breach of fiduciary relationship on an equal par with fraud and deceit. See, Henkin, Inc. v. Berea Bank and Trust Co., Ky.App., 566 S.W.2d 420 (1978). See, also, generally, 36A C.J.S., Fiduciary. Accordingly, we determine, as a matter of law, that a breach of a fiduciary duty is equivalent to fraud. Herein, the record reflects Kaelin did advise Scanlan in his efforts to form Scansteel for over a one-year period, during most of which time Scanlan was still employed by Steel Suppliers and Steelvest. Kaelin, as an attorney, would presumably know that Scanlan's activities in formulating his plan to form Scansteel during this period of his employment with Steelvest possibly constituted a breach of fiduciary duties. Nevertheless, he continued to assist Scanlan in the formulation of this scheme. Under the circumstances, with some showing of a breach of fiduciary duties on the part of Scanlan, we hold that the attorney-client privilege cannot be used to prevent discovery of the requested information. Accordingly, we reverse the decision of the Court of Appeals and remand this case to the Jefferson Circuit Court for further proceedings consistent with this opinion. All concur.