A client’s waiver of the attorney-client privilege is not carte blanche for a court to order a law firm defendant’s work product be turned over in an abuse of process case, a Philadelphia Court of Common Pleas judge has ruled.

The plaintiffs in an abuse of process claim against Fox Rothschild are appealing the judge’s ruling granting some of the law firm’s objections to discovery in the case.

Many of the discovery disputes between plaintiff 22 Front Street LLC and Fox Rothschild deal with a waiver Fox Rothschild’s clients and former defendants in the suit signed when they settled with 22 Front Street. The clients, homeowners in 22 Front Street’s building, waived the attorney-client privilege and permitted 22 Front Street to obtain through discovery all information relating to the advice Fox Rothschild gave them when the firm represented the homeowners in a separate suit against 22 Front Street.

The homeowners of 22 Front Street hired Fox Rothschild and attorneys Robert Tintner and Brett Berman to represent them in a lawsuit against 22 Front Street in an attempt to stop the building owner from selling a substantial number of the units as retirement properties. They argued that wasn’t the stated purpose of the luxury building when they bought units there.

The homeowners’ lawsuit also included as a defendant Friends Center City Retirement Community. A Philadelphia trial judge denied the homeowners’ preliminary injunction motion. While the matter was on appeal, the homeowners settled with Friends Center City and withdrew the appeal, thus allowing the sale of the units to the retirement group to go through.

The homeowners’ lawsuit against 22 Front Street, however, continued. In the meantime, 22 Front Street filed an action against the homeowners with the Philadelphia Human Relations Commission alleging age discrimination. The PHRC issued a finding of probable cause against the homeowners for their interference with the sale based on age, according to the opinion.

All but one of the homeowners, Frank Bardonaro Jr., settled the PHRC claims and 22 Front Street filed the instant lawsuit, 22 Front Street v. Gorodetzer in the Philadelphia Court of Common Pleas against the homeowners, Fox Rothschild, Tintner and Berman. The building owner sued the defendants for tortious interference with a contract, abuse of process, wrongful use of civil process and slander of title/disparagement of property. The wrongful use of civil process claim was dismissed in May 2012.

In September 2012, 22 Front Street entered into a settlement with all but one of the homeowners. The settling homeowners waived the attorney-client privilege between them and Fox Rothschild. The other homeowner, Bardonaro, has since settled but did not waive his privilege, according to the opinion. Fox Rothschild, Tintner and Berman are now the only remaining defendants in the case.

Mark B. Sheppard of Montgomery McCracken Walker & Rhoads served as discovery master in the case and ruled on a number of discovery disputes. His findings were adopted by Judge Gary S. Glazer and are now being appealed.

The discovery disputes involve 22 Front Street’s request for all communications, including attorney-client communications, between the homeowners and Fox Rothschild regarding the Gorodetzer action and the production of Fox Rothschild’s internal work product and communications regarding its representation of the homeowners in the Gorodetzer action. Sheppard said the discovery requests are complicated by the fact that Bardonaro did not sign a waiver of his attorney-client privilege. He recommended that communication involving Bardonaro not be subject to production.

"I also recommend that the Fox defendants’ work product is not subject to production despite the waiver and the license, because to do so would eviscerate the work-product protection in every case where abuse of process is alleged," Sheppard said in his report and recommendation to Glazer. "Because I do believe that our Supreme Court intended such a result, I will not recommend production of the work product sought."

When it comes to Bardonaro, 22 Front Street argued that because he didn’t intervene in this matter, Fox Rothschild can’t assert privilege on his behalf. Sheppard disagreed, finding the firm has a duty under Pennsylvania Rule of Professional Conduct 1.6 to preserve client confidences. Sheppard further pointed out that a co-client cannot waive the privilege of another co-client.

It is not only the communications solely between Fox Rothschild and Bardonaro that are privileged, Sheppard said. Communications between the homeowners as a group that included communications on Bardonaro’s behalf are also privileged. Communications to the homeowners that don’t embody advice to Bardonaro must be produced, he said.

Because that can be a tricky line to determine, Sheppard recommended Fox Rothschild prepare a detailed privilege log.

All other communications between Fox Rothschild and the homeowners have to be produced, Sheppard said.

As to the work-product privilege, 22 Front Street argued an exception to the Rule 4003.3 work-product privilege exists in abuse of process cases in which the defense is based on the reliance of legal opinion of counsel. Sheppard disagreed.

"If advice of counsel were still at issue in this case, then there would be no disagreement," Sheppard said. "However, having settled with all the homeowners, advice of counsel is no longer being asserted as a defense and has no relevance to the potential liability of the Fox defendants. Moreover, to read the exception to Rule 4003.3 in the manner urged by the plaintiff would open the flood gates, allowing the mere allegation of wrongful or abuse of process to overcome the strong protection usually afforded to the mental impressions of counsel."

To the extent 22 Front Street wants the work product to show Fox Rothschild had bad intentions in filing the suit, that evidence is irrelevant, Sheppard said. The question is whether the firm engaged or caused others to engage in unlawful acts, which he said would be borne out in the pleadings in the case or communications with clients.

Sheppard also dismissed 22 Front Street’s arguments that it is entitled to the work product because the homeowners signed a license upon settlement granting the building owner that access. Sheppard said the work-product privilege bars disclosure of the work product to adversaries.

"Plaintiff’s license, though very creative, appears to be nothing more than an unfair end-run around the work-product protection embodied in the rule," Sheppard said.

Daniel R. Utain of Kaplin Stewart Meloff Reiter & Stein in Blue Bell, Pa., is representing 22 Front Street.

George Bochetto of Bochetto & Lentz in Philadelphia is representing Fox Rothschild, Berman and Tintner. Bochetto said the discovery master and trial judge in this case got it right and he is confident anyone reviewing the issue will agree.

Gina Passarella can be contacted at 215-557-2494 or at gpassarella@alm.com. Follow her on Twitter @GPassarellaTLI.