Arent Fox office in Washington, D.C.
Arent Fox office in Washington, D.C. (Michael A. Scarcella/ ALM Media)

Southern District Magistrate Judge Gabriel Gorenstein dismissed a motion by Arent Fox to compel its former client to produce communications with replacement counsel.

The law firm has been sued in Windsor Securities v. Arent Fox 16-cv-01533 for legal malpractice by a former client after being retained to assist in disputes arising from Windsor’s financing of life insurance policies. Arent Fox partner Julius Rousseau III was retained by the company to provided general advice and representation in connection with the policies.

According to plaintiffs, Rousseau’s advice led the company to take on ownership of the policies themselves, theoretically entitling the company to the death benefits under the policy. Ultimately, beginning with arbitration Rousseau oversaw, Windsor was forced to settle disputes over the payouts after it was found to have failed to follow documentation and notice guidelines related to the financing.

Windsor began inquiring about switching counsel after the first dispute resulted in the company losing control of the policy payout to the deceased person’s estate. The parties dispute the substance and timing of the consultations, Gorstein noted in his decision. Windsor argued that it did not consult with its new attorneys until after Arent Fox’s malpractice was over and done with. Arent Fox said the company was receiving free legal advice prior to the finalization of some of the arbitrations.

Arent Fox requested communications between Windsor and its counsel as part of discovery. Windsor refused, citing privilege. The defendants, in their motion, argued that Windsor had waived privilege “by placing the subject matter of the documents at issue in this malpractice litigation.”

Gorenstein found that, as Windsor had established that it was not going to rely on communications with its other counsel as evidence in the suit, the “at issue” point raised by Arent Fox fell flat.

“Because Windsor will not be relying on any communications with counsel, it is the defendants’ burden to show why the privileged material is so critical to their defense that it would be unfair not to breach attorney-client privilege in order to provide them with it,” the judge wrote.

Arent Fox failed to do so, according to Gorenstein. Both state and federal courts have time and again declined to “invade the attorney-client privilege” in legal malpractice cases involving successive counsel, he noted.

“To reduce the problem to simple terms: Windsor is alleging that defendants’ actions created a mess that it tried to clean up. Windsor hired new counsel to advise it and assist in cleaning up that mess. Whether Windsor and/or new counsel took appropriate actions to clean up that mess will be judged by the actions Windsor and its counsel actually took, not based on the advice its new counsel gave as to how to clean up the mess.” Gorenstein wrote. “Defendants will be free to argue that the method of clean-up was unnecessary or badly performed. But for defendants to make these arguments, it is not necessary for them to learn what was said between Windsor and new counsel.”

In a statement, Pennsylvania private attorney Alan Frank said the motion to compel represented “a very pivotal moment for this case” for his clients, the plaintiffs.

“The magistrate carefully studied the matter and, we believe, reached the correct conclusion,” he said.

Neither Arent Fox or its attorneys at Foley & Lardner responded to requests for comment.