Court Opinion

ID: 2787014
Source: CourtListenerOpinion
Date Created: 2015-03-18 14:02:39.65123+00
Date Added: 2024-06-11T12:05:24.325168
License: Public Domain

Mar 18 2015, 9:28 am

ATTORNEYS FOR APPELLANTS                                  ATTORNEY FOR APPELLEES
Jeremy B. Morris                                          Kevin R. Patmore
Danny E. Glass                                            Patmore Law Office
Fine & Hatfield, P.C.                                     Santa Claus, Indiana
Evansville, Indiana

                                            IN THE
    COURT OF APPEALS OF INDIANA

David E. Price, Price &                                   March 18, 2015
Associates, LLC, and Price &                              Court of Appeals Case No.
Collins, LLP,                                             74A01-1409-TR-401
                                                          Appeal from the Spencer Circuit
Appellants-Defendants,
                                                          Court.
                                                          The Honorable Lucy Goffinet,
        v.                                                Special Judge.
                                                          Cause No. 74C01-0905-TR-18
Charles Brown Charitable
Remainder Unitrust Trust,
Charles Brown, and Charlotte
Brown,
Appellees-Plaintiffs.

Sharpnack, Senior Judge

Court of Appeals of Indiana | Opinion 74A01-1409-TR-401 | March 18, 2015                 Page 1 of 13
                                         Statement of the Case
[1]   In this interlocutory appeal, David E. Price, Price & Associates, LLC, and Price

      & Collins, LLP (collectively, Price), seek review of the trial court’s denial of

      their motion for summary judgment. We affirm and remand.

                                                         Issue
[2]   Price raises one issue, which we restate as: whether Price is entitled to
                                              1
      judgment as a matter of law.

                                  Facts and Procedural History
[3]   Charles Brown hired Price, a lawyer, to assist him in creating a trust. Price’s

      firm drafted a trust agreement. Brown executed the agreement on March 9,

      1995, creating the “Charles Brown Charitable Remainder Unitrust Trust” (the

      Trust). Appellants’ App. p. 28. Brown’s brother was the first trustee, but he

      was replaced by Brown’s daughter. On January 1, 2000, Brown named Price as

      trustee of the Trust.

[4]   In 2006, the United States Department of Justice (DOJ) initiated a criminal

      case against Brown in the United States District Court for the Southern District

      of Indiana. In 2007, the DOJ amended the indictment to add charges against

      Price. The DOJ alleged that Brown and Price conspired to defraud the Internal

      Revenue Service, violated the prudent investor rule in making Trust

      1
          Price has filed a motion for oral argument. We deny the motion by separate order.

      Court of Appeals of Indiana | Opinion 74A01-1409-TR-401 | March 18, 2015                Page 2 of 13
      investments, engaged in self-dealing from the Trust, distributed funds from the

      Trust contrary to statute, and diverted Trust funds for personal use. The DOJ

      further alleged that Brown and Price filed false tax returns in an attempt to

      underreport income.

[5]   On March 7, 2008, Brown and Price, through their attorneys, executed a Joint

      Defense Agreement (JDA) with an effective date of September 19, 2007. The

      stated purpose of the JDA was to allow Brown and Price to bolster their

      defenses against the criminal charges by sharing “information which is

      privileged and/or confidential in nature” “without waiver of any applicable

      privilege or other protection against disclosure.” Id. at 152. The JDA further

      provided that Brown and Price believed:

              [T]he law permits those who are pursuing a common interest to
              share and exchange information in a common effort to prepare
              for litigation in which they are parties, and to enhance their
              respective counsels’ ability to provide informed legal advice,
              without thereby waiving any privilege or confidentiality with
              respect to such information.
      Id. at 152-53.

[6]   Brown and Price agreed to “share and exchange documents, factual

      information, oral statements, mental impressions, expert reports,

      correspondence, memoranda, summaries or reports of interviews with

      prospective witnesses, investigative reports, deposition summaries, deposition

      preparation materials and drafts of pleadings or other litigation documents and

      other materials, in whatever form (‘Joint Defense Materials’).” Id. at 153.

      Court of Appeals of Indiana | Opinion 74A01-1409-TR-401 | March 18, 2015   Page 3 of 13
      Further, “the exchange pursuant to this Agreement of Joint Defense Materials

      will not waive any applicable privilege or protection from disclosure. The joint

      defense privilege created by this Agreement may not be waived by the action of

      any single Party or its counsel.” Id. at 154.

[7]   Among other caveats, the parties agreed in the JDA:

              [S]haring and exchange is premised on the understanding and
              agreement that (a) Joint Defense Materials transmitted among
              the Parties contain privileged, protected and/or confidential
              communications and/or privileged attorney work product; and
              (b) in accordance with applicable legal standards, exchanges have
              been and will be made only of information as to which the
              exchanging Parties believe they share common interests with
              respect to the Litigation.
      Id. at 153-54.

[8]   In addition, Brown and Price agreed, “Any shared or exchanged information

      shall not be used for any purpose other than with respect to this litigation. Any

      party receiving Materials under this Agreement agrees not to use such materials

      against the Party that delivered or shared them.” Id.

[9]   The JDA further provided:

              The joint defense privilege described above and recognized by
              this Agreement shall not be destroyed or impaired as to any Joint
              Defense Materials exchanged pursuant to this Agreement if
              adversary positions should subsequently arise between some or
              all of the Parties and regardless of whether the joint defense
              privilege becomes inapplicable after the emergence of adversary
              positions among Parties or this Agreement is terminated for any
              reason.
      Court of Appeals of Indiana | Opinion 74A01-1409-TR-401 | March 18, 2015   Page 4 of 13
       Id. at 155.

[10]   The parties agreed in the JDA that not all information in their possession would

       be considered privileged:

               Nothing in this Agreement prohibits any Party of [sic] its counsel
               from sharing any materials or information obtained from a
               source other than one of the other parties to this Agreement
               (whether previously exchanged among the Parties as Joint
               Defense Materials or not) with any persons or entity not a party
               to this Agreement, and the sharing or disclosure of such
               information does not constitute and shall not be considered to be
               a waiver of any privilege or protection as to any other Joint
               Defense Materials exchanged between and among the Parties
               pursuant to this Agreement.
       Id. at 156-57.

[11]   Finally, the JDA provided, in relevant part:

               The exchange of Joint Defense Materials pursuant to this
               Agreement shall not preclude any of the Parties from pursuing
               subject matters reflected in Joint Defense Materials (even as
               against other Parties), so long as all applicable privileges or
               protections from disclosure are preserved.
       Id. at 157.

[12]   Both before and after the execution of the JDA, Brown, Price, and their

       attorneys participated in strategy sessions where they exchanged documents

       and information. Brown and Price’s attorneys also conferred without their

       clients and shared information.

       Court of Appeals of Indiana | Opinion 74A01-1409-TR-401 | March 18, 2015   Page 5 of 13
[13]   On April 9, 2009, Brown removed Price as trustee of the Trust. On that same

       date, while the criminal cases were pending, Brown and his wife, Charlotte,

       sued Price, alleging breach of trust, theft, criminal conversion, deception,

       attorney malpractice, and breach of fiduciary duty.

[14]   On May 21, 2009, Price filed, under a separate cause number, a Petition to

       Docket Trust Agreement, for Trust Accounting, and Appointment of Trustee.

       Brown, Charlotte, and the Trust cross-petitioned for an accounting from Price

       for his services as trustee, for ratification of Brown’s termination of Price as

       trustee, and for “disgorgement of any and all fees or other monies lost,

       mismanaged or misappropriated by Price.” Id. at 91. The trial court

       consolidated the Browns’ lawsuit and Price’s trust accounting action under the

       lower cause number set forth above.

[15]   On October 14, 2009, Brown, by counsel, notified Price of the termination of

       the JDA. Brown and Price were subsequently acquitted of all criminal charges.

[16]   Price filed a motion for summary judgment in this case. The Browns and the

       Trust did not file a response, but they appeared at oral argument and presented

       argument against Price’s motion. The trial court denied Price’s motion. Next,

       Price requested and received certification of the trial court’s summary judgment

       order for interlocutory appeal. This Court’s motions panel accepted the appeal

       for interlocutory review pursuant to Indiana Appellate Rule 14(B).

       Court of Appeals of Indiana | Opinion 74A01-1409-TR-401 | March 18, 2015   Page 6 of 13
                                     Discussion and Decision
[17]   Price argues that the Browns and the Trust’s claims cannot go forward because

       the information and materials Brown and Price shared pursuant to the JDA to

       defend against the indictment “could never be separated from matters relevant

       to prosecution of the civil claims.” Appellants’ Br. p. 18. He thus concludes

       that the terms of the JDA and the sharing of information under the JDA bar the

       Browns and the Trust’s claims, and “the only appropriate remedy available to

       Price is dismissal” of their claims. Id. at 20.

[18]   An appellate court applies the same standard as the trial court when reviewing a

       grant or denial of summary judgment. Herron v. Anigbo, 897 N.E.2d 444, 448

       (Ind. 2008). Summary judgment is appropriate only “if the designated

       evidentiary matter shows that there is no genuine issue as to any material fact

       and that the moving party is entitled to judgment as a matter of law.” Ind. Trial

       Rule 56(C). The Browns and the Trust did not file a response to Price’s motion

       for summary judgment, so the parties agree that there are no disputes of

       material fact. Tr. p. 13. This case presents questions of law, which we review

       de novo. Robinson v. Erie Ins. Exch., 9 N.E.3d 673, 674 (Ind. 2014).

[19]   We first turn to the provisions of the JDA. The parties do not direct us to any

       Indiana authorities discussing such agreements, and our research has not

       Court of Appeals of Indiana | Opinion 74A01-1409-TR-401 | March 18, 2015   Page 7 of 13
                                                                                                      2
       uncovered any Indiana cases that address such agreements in detail, so we look

       to other jurisdictions for guidance.

[20]   Joint defense agreements are based on the common interest privilege, also

       known as the common interest doctrine. The common interest privilege is an

       extension of the attorney-client privilege. United States v. BDO Seidman, LLP,

       492 F.3d 806, 815 (7th Cir. 2007). In effect, the common interest privilege

       extends the attorney-client privilege to otherwise nonconfidential

       communications between parties represented by separate attorneys. Id. The

       common interest privilege “treats all involved attorneys and clients as a single

       attorney-client unit, at least insofar as a common interest is pursued.” 2

       Stephen A. Saltzberg, et al., Federal Rules of Evidence Manual 501-30 (10th ed.

       2011). The privilege is an exception to the general rule that the attorney-client

       privilege is waived when privileged information is disclosed to a third party.

       BDO Seidman, 492 F.3d at 815; see Cavallaro v. United States, 284 F.3d 236, 250

       (1st Cir. 2002).

[21]   The common interest privilege permits parties whose legal interests coincide to

       share privileged materials with one another in order to more effectively

       prosecute or defend their claims. Hunton & Williams v. U.S. Dep’t of Justice, 590

       2
        Biomet, Inc. v. Barnes & Thornburg, 791 N.E.2d 760, 762 (Ind. Ct. App. 2003), trans. denied, involved a joint
       defense agreement, but the panel concluded that there were disputes of material fact as to: (1) whether a
       party to the agreement disclosed information that was received under the terms of the agreement; and (2)
       when the disclosures occurred. In the current case, no disclosures are alleged to have occurred. In another,
       much older case, Scranton v. Stewart, 52 Ind. 68, 80-81 (1875), the Indiana Supreme Court applied the
       common interest privilege in the context of a spousal relationship, which is not at issue here.

       Court of Appeals of Indiana | Opinion 74A01-1409-TR-401 | March 18, 2015                           Page 8 of 13
       F.3d 272, 277 (4th Cir. 2010). The privilege has been recognized in cases for

       over a century. United States v. McPartlin, 595 F.2d 1321, 1336 (7th Cir. 1979).

       It applies in civil and criminal litigation, and even in purely transactional

       contexts. In re Teleglobe Commc’ns Corp., 493 F.3d 345, 364 (3rd Cir. 2007).

[22]   The privilege is limited to those communications made to further an ongoing

       joint enterprise with respect to a common legal interest. BDO Seidman, 492

       N.E.2d at 816; see Hunydee v. United States, 355 F.2d 183, 185 (9th Cir. 1965)

       (statements to and among attorneys “should be privileged to the extent that

       they concern common issues and are intended to facilitate representation in

       possible subsequent proceedings”). It is fundamental that the privilege cannot

       be waived without the consent of all parties to the defense. John Morrell & Co. v.

       Local Union 304A of United Food & Commercial Workers, 913 F.2d 544, 556 (8th

       Cir. 1990).

[23]   The JDA is a contract and we review its terms according to principles of

       contract interpretation. The goal of contract interpretation is to ascertain and

       give effect to the parties’ intent as reasonably manifested by the language of the

       agreement. Reuille v. E.E. Brandenberger Const., Inc., 888 N.E.2d 770, 771 (Ind.

       2008). If the language is clear and unambiguous, it must be given its plain and

       ordinary meaning. Id. We construe the contract as a whole and consider all of

       the provisions, not just individual words, phrases, or paragraphs. Van Prooyen

       Builders, Inc. v. Lambert, 907 N.E.2d 1032, 1035 (Ind. Ct. App. 2009), trans.

       denied.

       Court of Appeals of Indiana | Opinion 74A01-1409-TR-401 | March 18, 2015   Page 9 of 13
[24]   In the JDA, Brown and Price did not explicitly waive their right to sue one
                                                                                                  3
       another for alleged claims arising from their business relationships. To the

       contrary, the clear and unambiguous language of the JDA contemplates that

       Brown and Price might become adversaries as to the subject matter reflected in

       their shared information. The JDA provides, in relevant part:

               The joint defense privilege described above and recognized by
               this Agreement shall not be destroyed or impaired as to any Joint
               Defense Materials exchanged pursuant to this Agreement if any
               adversary positions shall subsequently arise between some or all
               of the Parties and regardless of whether the joint defense privilege
               becomes inapplicable after the emergence of adversary positions
               among Parties or this Agreement is terminated for any reason.
       Appellants’ App. p. 155.

[25]   The JDA further provides, “The exchange of Joint Defense Materials pursuant

       to this Agreement shall not preclude any of the Parties from pursuing subject

       matters reflected in [the Materials] (even as against other Parties), so long as all

       applicable privileges or protections are preserved.” Id. at 157.

[26]   Thus, according to the plain and ordinary meaning of the JDA’s terms, the

       contract does not bar Brown, Charlotte, and the Trust’s claims against Price.

       What the JDA does establish is that Brown and Price cannot use the materials

       3
         One commentator has stated, “The risk that statements made in the common interest could later be used
       against the client by those within the client ‘unit’ can be eliminated by a provision in the common interest
       agreement providing that the signatories agree to waive all civil actions that they may now or later have
       against one another—or, more narrowly, that they waive the right to use information shared in the common
       interest against any member of the unit.” Saltzberg at 501-36-37.

       Court of Appeals of Indiana | Opinion 74A01-1409-TR-401 | March 18, 2015                        Page 10 of 13
       shared pursuant to the JDA against each other, and that the exchange of

       materials does not limit any privileges or work-product protections that would

       otherwise apply. See id. at 154 (“any shared or exchanged information shall not

       be used for any purpose other than with respect to this litigation”); 157 (even if

       parties adopt adversarial positions, “all applicable privileges or protections from

       disclosure” must be preserved). Brown, Charlotte, and the Trust conceded this

       point to the trial court. Tr. p. 14 (“If later [Brown] tries to use any

       communications that Price has searched [sic] privilege then certainly this Court

       could I believe bar him for [sic] using those privileged communications or

       testifying about any privileged communications”).

[27]   Price nonetheless argues that the sharing of privileged information between

       himself and Brown must bar Brown, Charlotte and the Trust’s claims in their

       entirety because protecting the privileged communications will be too difficult.

       He cites Analytica, Inc. v. NPD Research, Inc., 708 F.2d 1263 (7th Cir. 1983), for

       the alleged principle that the exchange of privileged information must prevent

       claims such as the Browns’ from going forward because a court must bar the

       “use of the information if it could have been obtained from a privileged

       source.” Appellants’ Br. p. 24.

[28]   Analytica is factually distinguishable from this case because that case dealt with

       attorney disqualification based on prior representation and attorney fees, not

       with civil claims and privilege. Furthermore, neither Analytica, nor any other

       case cited by Price, granted the sort of absolute relief he seeks here.

       Court of Appeals of Indiana | Opinion 74A01-1409-TR-401 | March 18, 2015   Page 11 of 13
[29]   In any event, Price’s reading of Analytica, and his concerns about the difficulties

       in trying this case, are contradicted by Indiana precedent. Claims of privilege

       cannot be used as a general bar to all inquiry or proof. Instead, the party

       seeking to assert a privilege has the burden to allege and prove the applicability

       of the privilege as to each question asked or document sought. TP Orthodontics,

       Inc. v. Kesling, 15 N.E.3d 985, 994 (Ind. 2014); see Indiana Trial Rule 26(B)(5)(a)

       (a party asserting a claim of privilege “shall make the claim expressly and shall

       describe the nature of the documents, communications, or things not produced

       or disclosed”). Privileged communications are protected, but relevant facts are

       not. See Owens v. Best Beers of Bloomington, Inc., 648 N.E.2d 699, 704 (Ind. Ct.

       App. 1995) (defendant could not prevent the disclosure of a compensation

       arrangement between itself and plaintiff merely because it was discussed in the

       presence of defendant’s attorney).

[30]   Further, there is nothing to show what evidence or communications are at

       issue, or that Brown, Charlotte, and the Trust could not prove their claims

       without disclosing communications that are privileged under the JDA. Brown

       and Price agreed that “any materials or information obtained from a source

       other than one of the other parties” could be shared with other persons without

       violating the JDA or waiving the privileges established by the JDA as to other

       communications. Appellants’ App. at 156-57.

[31]   Specific claims of privilege will need to be resolved as they are encountered in

       discovery or at trial.

       Court of Appeals of Indiana | Opinion 74A01-1409-TR-401 | March 18, 2015   Page 12 of 13
[32]   Finally, Brown, Charlotte, and the Trust allege that they are entitled to

       appellate attorney’s fees pursuant to Appellate Rule 66(E). That rule authorizes

       the Court to “assess damages if an appeal, petition, or motion, or response, is

       frivolous or in bad faith.” Id. Damages may include attorney’s fees. Id. The

       Court’s discretion to award attorney’s fees under Rule 66 is limited to instances

       when an appeal is permeated with meritlessness, bad faith, frivolity,

       harassment, vexatiousness, or purpose of delay. SCI Propane, LLC v. Frederick,

       15 N.E.3d 1015, 1029 (Ind. App. 2014). Although Price did not prevail, we

       cannot conclude that this appeal meets these criteria. We reject Brown,

       Charlotte, and the Trust’s claim for appellate attorney’s fees.

                                                 Conclusion
[33]   For the foregoing reasons, we affirm the judgment of the trial court and remand

       for further proceedings.

[34]   Affirmed and remanded.

       Baker, J., and Riley, J., concur.

       Court of Appeals of Indiana | Opinion 74A01-1409-TR-401 | March 18, 2015   Page 13 of 13