Opinion ID: 1596181
Heading Depth: 1
Heading Rank: 5

Heading: Are Documents Protected By the Attorney-Client Privilege Subject to Discovery?

Text: Liberty Mutual claims that the deputy erred in ordering production of documents in its file protected by the attorney-client privilege. Pickering argues that Liberty Mutual waived the privilege by designating its prior attorney as an expert witness. A. Applicability of privilege. Iowa Rule of Civil Procedure 122(a) specifically excludes privileged materials from the scope of permissible discovery. AgriVest Partnership v. Central Iowa Prod. Credit Ass'n, 373 N.W.2d 479, 482 (Iowa 1985). The exemption of privileged materials from discovery is coextensive with the rule of testimonial exclusion regarding privileged communications as developed under the applicable laws of evidence, both common-law and statutory. Robbins v. Iowa-Illinois Gas & Elec. Co., 160 N.W.2d 847, 855 (Iowa 1968). Under Iowa common law, [a]ny confidential communication between an attorney and the attorney's client is absolutely privileged from disclosure against the will of the client. Shook, 497 N.W.2d at 886. Additionally, Iowa Code section 622.10 (1993) bars disclosure of confidential communications in giving testimony. McMaster v. Board of Psychology Examiners, 509 N.W.2d 754, 757 (Iowa 1993), cert. denied, ___ U.S. ___, 114 S.Ct. 2165, 128 L.Ed.2d 888 (1994). [4] However, we have held in the context of a claim for third-party bad faith that the protection of the attorney-client privilege did not apply. In Henke v. Iowa Home Mutual Casualty Co., 249 Iowa 614, 87 N.W.2d 920 (1958), the insured sued his insurance company for its alleged bad-faith failure to settle a case filed against the insured. We held that communications between an insurer and the attorney employed by the insurer to defend the insured were not privileged because the defense attorney represented the insured as well as the insurance carrier. Henke, 249 Iowa at 618, 87 N.W.2d at 923. Therefore, we applied the general rule that where two persons consult the same attorney for their mutual benefit, communications between the parties and their attorney are not privileged in a later action between the parties. Id. at 620-21, 87 N.W.2d at 923. This reasoning does not apply to the case before us. In a first-party action, the claimant and the insurer are in adverse positions from the outset of the underlying case. Palmer v. Farmers Ins. Exch., 861 P.2d 895, 905 (Mont.1993); accord State ex rel. Safeco Nat'l Ins. Co. v. Rauch, 849 S.W.2d 632, 634 (Mo.Ct.App.1993). Therefore, Egbers, who represented Liberty Mutual in Pickering's claim for workers' compensation benefits, did not represent Pickering's interests as well. Because Pickering and Liberty Mutual were not joint clients of Egbers, Henke does not apply and Liberty Mutual may assert the attorney-client privilege. Aetna Casualty & Sur. Co. v. Superior Ct., 200 Cal.Rptr. 471, 474-75 (Ct.App.1984); Palmer, 861 P.2d at 906. Nevertheless, the attorney-client privilege may be waived. Miller v. Continental Ins. Co., 392 N.W.2d 500, 504 (Iowa 1986); Iowa Code § 622.10 (1993). Therefore, we now consider Pickering's argument that Liberty Mutual waived the attorney-client privilege by designating its former attorney as an expert witness. B. Existence of waiver. The deputy industrial commissioner apparently believed that the designation of Liberty Mutual's prior attorney waived the attorney-client privilege. He held that the privilege did not apply. Moreover, the deputy ruled that even if Liberty Mutual withdrew its designation of the attorney as an expert, the deputy would still allow the discovery permitted by rule 125(a). Waiver may be express or implied. 81 Am.Jur.2d Witnesses § 348, at 322-23 (1992). An express waiver occurs when a client voluntarily discloses the content of privileged communications. Miller, 392 N.W.2d at 504. [A]n implied waiver occurs where the [client] has placed in issue a communication which goes to the heart of the claim in controversy. 81 Am.Jur.2d Witnesses § 348, at 323 (1992); cf. Iowa Code § 622.10 (1993) (health care professional-patient privilege not applicable in a civil action where patient's condition is an issue). Any waiver is limited to attorney-client communications on the matter disclosed or at issue. Miller, 392 N.W.2d at 504-05. We do not think that an express waiver has occurred here because at this point no privileged communications have been disclosed. Nevertheless, we conclude that Liberty Mutual's designation of Egbers as an expert witness does constitute an implied waiver. That is so because Liberty Mutual plans to offer Egber's opinion on the matters identified in its designation of him as an expert witness. Cf. State v. Cole, 295 N.W.2d 29, 35 (Iowa 1980) (We believe the defense of diminished capacity waived the privilege here, even if it had existed, for the simple reason it would be incongruous to allow a party to put a matter in issue and then deny access of an opposing party to relevant information concerning it.); State v. Bastedo, 253 Iowa 103, 112, 111 N.W.2d 255, 260 (1961) (waiver of attorney-client privilege where breach of duty by lawyer to client is an issue). Contrary to the deputy's ruling, our finding of waiver rests not on the fact that Egbers has at one time been designated an expert witness but on the fact that he is currently designated as an expert who will be called at trial. In other words, a withdrawal of the expert witness designation prior to the disclosure of any confidential communications would also constitute a withdrawal of the implied waiver. 81 Am.Jur.2d Witnesses § 294, at 281 (1992) (the waiver of a privileged communication may be withdrawn at any time before it has been acted on, where no advantage has accrued to either litigant on account thereof); cf. Mantolete v. Bolger, 96 F.R.D. 179, 182 n. 2 (D.Ariz.1982) (party may change the status of an expert from expert who will testify to non-witness expert even solely to avoid discovery); County of Los Angeles v. Superior Ct., 222 Cal.App.3d 647, 656-58, 271 Cal.Rptr. 698, 703-04 (1990) (party could withdraw expert and thereby reestablish attorney work product privilege, notwithstanding claim that withdrawal was prompted by desire to suppress evidence); Nelson Drainage Dist. v. Bay, 188 Mich.App. 501, 470 N.W.2d 449, 452 (1991) (designation of expert may be withdrawn and discovery of that expert is then governed by more limited standards applying to nontestimonial expert witness). We express no opinion on what discovery, if any, would be allowable if Liberty Mutual withdraws its expert witness designation, other than to state that such a withdrawal would reestablish the attorney-client privilege if no express waiver has yet occurred. [5] See Iowa R.Civ.P. 125(b) (allowing discovery of expert who will not be called as a witness upon showing of exceptional circumstances). Because Liberty Mutual has waived the attorney-client privilege to the extent expert witness discovery is permitted under rule 125(a), we examine the scope of discovery allowed by that rule. Rule 125(a) requires that the proponent of an expert witness disclose the mental impressions and opinions held by the expert and the facts known to the expert (regardless of when the factual information was acquired) which relate to, or form the basis of the expert's impressions or opinions. Liberty Mutual argues that Egbers will rely only on the information available to the company at the time it denied Pickering's claim and therefore, any information in the postdenial file is not discoverable. However, rule 125(a) requires disclosure of all facts known to the expert and which relate to his opinions, not just the facts which form the basis for the expert's opinion. Therefore, if the postdenial file contains facts relevant to the reasonableness of Liberty Mutual's denial and if these facts were made known to Egbers, at any time, those facts are discoverable. Furthermore, the documents containing these facts are discoverable under rule 125(a)(2) which allows discovery by means in lieu of or in addition to interrogatories, including the production of documents.