Opinion ID: 1218759
Heading Depth: 3
Heading Rank: 1

Heading: scope of the term fraud for purposes of the crime or fraud exception to the attorney-client privilege.

Text: CMOG argues that the superior court erred in relying on the special master's conclusion that Werley is no longer good law. CMOG points out that Munn v. Bristol Bay Hous. Auth., 777 P.2d 188 (Alaska 1989), reaffirmed the validity of Werley. Id. at 195. Additionally, CMOG asserts that neither Munn nor Werley defined civil fraud in as stringent a manner as the superior court in this case. CMOG argues that fraud, as the term is used in Alaska Evidence Rule 503(d)(1), is defined broadly. CMOG asserts that Munn supports the proposition that fraud includes situations where there is a bad faith purpose for a party's actions. See id. CMOG cites the Evidence Rules commentary in support of its view that the court should focus on Home's intentional or reckless disregard of CMOG's rights. The commentary to Alaska Rule of Evidence 503(d)(1) cites 8 J. Wigmore, Evidence § 2298 (J. McNaughton rev. 1961) for the proposition that the attorney-client privilege does not extend to advice in aid of future wrongdoing. CMOG is correct in its statement that neither Munn nor Werley defined civil fraud in as stringent a manner as the superior court or Home suggests. The adoption of Alaska Evidence Rule 503(d)(1) is not indicative of this court's intent to use a narrow crime or fraud standard. We do not now, nor have we ever deemed it permissible for a client to use the attorney-client privilege to exclude from discovery advice in aid of future wrongdoing. See Commentary to Alaska Rule of Evidence 503(d)(1); see also 8 J. Wigmore, Evidence § 2298 (J. McNaughton rev. 1961); Munn, 777 P.2d at 194; Werley, 526 P.2d at 32. Consequently, we decline to accept Home's argument that crime or fraud should be narrowly defined, and hold that services sought by a client from an attorney in aid of any crime or a bad faith breach of a duty are not protected by the attorney-client privilege. See, e.g., Werley, 526 P.2d at 33 ([w]hen an insurer through its attorney engages in a bad faith attempt to defeat ... the rightful claim of its insured, invocation of the attorney-client privilege for communications pertaining to such bad faith dealing seems clearly inappropriate) (footnote omitted). Acts constituting fraud are as broad and as varied as the human mind can invent. Deception and deceit in any form universally connote fraud. Public policy demands that the `fraud' exception to the attorney-client privilege ... be given the broadest interpretation. In re Callan, 122 N.J. Super. 479, 300 A.2d 868, 877 (Ch.Div. 1973), aff'd, 126 N.J. Super. 103, 312 A.2d 881 (App.Div. 1973), rev'd on other grounds, 66 N.J. 401, 331 A.2d 612 (1975) (interpreting New Jersey Evidence Rule 26 which is substantially equivalent to Alaska Evidence Rule 503(d)(1)). The policy of promoting the administration of justice would not be well served by permitting services sought in aid of misconduct to be cloaked in the attorney-client privilege. See id. at 878; Fellerman v. Bradley, 99 N.J. 493, 493 A.2d 1239, 1245 (1985). See also 8 J. Wigmore, Evidence § 2298 at 577 (J. McNaughton rev. 1961) (the attorney-client privilege should not protect a deliberate plan to defy the law and oust another person of his rights, whatever the precise nature of those rights may be); E. Cleary, McCormick on Evidence § 95 at 229 (3d ed. 1984) (it would be a perversion of the privilege to extend it to the client who seeks advice to aid him in carrying out an illegal or fraudulent scheme).