Patel v. Martin , 481 Mass. 29 ( 2018 )

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SJC-12500
JAY PATEL & another1 vs. LEO MARTIN & others.2
Norfolk. September 6, 2018. - November 28, 2018.
Present: Gants, C.J., Lenk, Gaziano, Lowy, Budd, Cypher,
& Kafker, JJ.
Practice, Civil, Discovery, Interlocutory appeal. Attorney at
Law, Attorney-client relationship. Privileged
Communication.
Civil action commenced in the Superior Court Department on
December 23, 2015.
A motion for a protective order was heard by Jeffrey A.
Locke, J.
The Supreme Judicial Court on its own initiative
transferred the case from the Appeals Court.
Peter S. Brooks (Gregory M. Boucher also present) for the
defendants.
David V. Lawler for the plaintiffs.
1 Dipika, Inc.
2 Seymour H. Marcus, also known as Sy H. Marcus; and Ellen
Rea Marcus, as trustee of the Grossman Munroe Trust. Leo Martin
and Seymour Marcus are alleged to have acted on behalf of the
Grossman Munroe Trust, but only Ellen Rea Marcus was a trustee.
2
GANTS, C.J. The primary issue on appeal is whether a party
in a civil case has the right to an immediate appeal from a
discovery order under the doctrine of present execution. The
defendants here argue that, after the motion judge ordered the
disclosure of communications that they contend are protected
from disclosure by the attorney-client privilege, they will be
irremediably harmed if they cannot immediately appeal from that
order. We conclude that a party has no such right of
interlocutory appeal. In so holding, we note that a party
nevertheless retains two other avenues to seek immediate
appellate review of an interlocutory order: by requesting the
trial court judge to report the decision to the Appeals Court
under Mass. R. Civ. P. 64 (a), as amended, 423 Mass. 1403
(1996); or by petitioning for redress from a single justice of
the Appeals Court under G. L. c. 231, § 118, first par.
Although the appeal is not properly before us under the
doctrine of present execution, we exercise our discretion under
our superintendence authority to reach the merits and conclude
that we must remand the matter to the motion judge for further
factual findings.
Background. We summarize the facts as alleged in the
complaint and that are undisputed in the record. In September
2012, Ellen Rea Marcus, as trustee of the Grossman Munroe Trust
3
(trustee), executed a purchase and sale agreement with the
Masonic Temple Association of Quincy, Inc. (Masons), for the
purchase of the Masonic Temple in Quincy (property). Pursuant
to a rider to the purchase and sale agreement, the agreement
could not be assigned by the trustee without the prior written
consent of the Masons. In a separate agreement executed in
April 2013, the trustee assigned the rights to the property
under the purchase and sale agreement to Jay Patel in return for
$100,000; Patel intended to develop a hotel on the property. On
September 30, 2013, before the sale of the property closed, a
fire caused severe damage to the property. Shortly thereafter,
the Masons claimed that they had never consented to the
assignment, refused to recognize it, and received over $6
million from an insurance claim arising from the fire. In
December 2015, Patel and his "hotel-operating company," Dipika,
Inc. (collectively, developer plaintiffs), brought a civil
action in the Superior Court against the trustee, Seymour H.
Marcus, and Leo Martin (collectively, trust defendants),
claiming that they suffered economic damages from the trustee's
failure to obtain the required consent for the assignment of the
property.
During the course of discovery, the developer plaintiffs
noticed the deposition of David Levin, the attorney who
represented the Masons with respect to the sale of the property
4
and who had also routinely represented the trust defendants on
real estate legal matters for over twenty years. The trust
defendants moved for a protective order to bar Levin from
disclosing his confidential attorney-client communications with
them, claiming that Levin represented them as well as the Masons
in the real estate transaction concerning the property, even
though Levin took the position that he had represented only the
Masons.
After an evidentiary hearing, the motion judge found that
there was an attorney-client relationship between Levin and the
trust defendants after the fire regarding insurance claims and
third-party claims arising from the fire, but that, with respect
to the purchase and sale of the property, Levin represented the
Masons, not the trust defendants. He therefore ruled that
communications between Levin and the trust defendants before the
fire were not protected by the attorney-client privilege.
The trust defendants filed a notice of appeal in the
Superior Court seeking review by an Appeals Court panel under
the doctrine of present execution and, "in an abundance of
caution," also brought a petition in the Appeals Court pursuant
to G. L. c. 231, § 118, first par., seeking interlocutory relief
from a single justice of the Appeals Court. The single justice
stayed action on the § 118 petition until a panel of the Appeals
Court decided whether it had jurisdiction of the appeal under
5
the doctrine of present execution to resolve the discovery
dispute arising from the claim of attorney-client privilege. We
transferred the appeal to this court on our own motion.
Discussion. 1. Appellate review of interlocutory orders.
When a final judgment enters in a civil case in the Superior
Court under Mass. R. Civ. P. 54, as amended, 382 Mass. 829
(1981), a party aggrieved has the right to appeal from the
judgment to a panel of the Appeals Court. See G. L. c. 231,
§ 113. As part of that appeal, a party may claim that a judge
erred in the entry of various types of interlocutory orders that
were issued during the course of the civil case. If a party
wishes to seek appellate review of an interlocutory discovery
order before the entry of final judgment, however, the party
generally has only two alternatives. First, the party may ask
the judge under Mass. R. Civ. P. 64 (a) to report the
interlocutory finding or order to the Appeals Court, and the
judge may do so where he or she concludes that the finding or
order "so affects the merits of the controversy that the matter
ought to be determined by the [A]ppeals [C]ourt before any
further proceedings in the trial court." Mass. R. Civ. P.
64 (a). Second, the party has the right to petition for relief
under G. L. c. 231, § 118, first par., from a single justice of
the Appeals Court, who may, in his or her discretion, grant the
relief. The single justice also has the authority to transfer
6
the petition to a panel of the Appeals Court, where it will be
treated as a full interlocutory appeal. See McMenimen v.
Passatempo, 452 Mass. 178, 187 (2008), citing CUNA Mut. Ins.
Soc'y v. Attorney Gen., 380 Mass. 539, 540 (1980). But a party
has no right under § 118, first par., to bring the petition
directly to a panel or to seek review of the single justice's
ruling by the panel. See McMenimen, supra at 189-190; Corbett
v. Kargman, 369 Mass. 971, 971-972 (1976).
However, in narrowly limited circumstances, where "an
interlocutory order will interfere with rights in a way that
cannot be remedied on appeal" from a final judgment, and where
the order is "collateral to the underlying dispute in the case"
and therefore will not be decided at trial, a party may obtain
full appellate review of an interlocutory order under our
doctrine of present execution. Maddocks v. Ricker, 403 Mass.
592, 596, 598 (1988). See Marcus v. Newton, 462 Mass. 148, 151-
152 (2012); Borman v. Borman, 378 Mass. 775, 779-780 (1979).3
The doctrine is intended to be invoked narrowly to avoid
3 The phrase "doctrine of present execution" appears to
derive from Vincent v. Plecker, 319 Mass. 560, 564 n.2 (1946),
where this court, in deciding whether an order was appealable as
a "final decree," noted, "Though part of a single controversy
remains undetermined, if the decree is to be executed presently,
so that appeal would be futile unless the decree could be
vacated by the prompt entry of an appeal in the full court, the
decree is a final one." We first used the phrase "doctrine of
present execution" in Borman v. Borman, 378 Mass. 775, 780
(1979).
7
piecemeal appeals from interlocutory decisions that will delay
the resolution of the trial court case, increase the over-all
cost of the litigation, and burden our appellate courts. See
Borman, supra at 779. See also Firestone Tire & Rubber Co. v.
Risjord, 449 U.S. 368, 374 (1981).
Our doctrine of present execution is similar to the Federal
"collateral order doctrine," which permits full appellate review
of a small class of collateral interlocutory decisions "that are
conclusive, that resolve important questions separate from the
merits, and that are effectively unreviewable on appeal from the
final judgment in the underlying action." Mohawk Indus., Inc.
v. Carpenter, 558 U.S. 100, 106 (2009), quoting Swint v.
Chambers County Comm'n, 514 U.S. 35, 42 (1995). But, as we note
later, the application of the Federal collateral order doctrine
has at times varied from our application of the doctrine of
present execution. See note 4, infra.
In civil cases, we have granted "the right to an immediate
appeal under the doctrine of present execution where protection
from the burden of litigation and trial is precisely the right
to which [a party] asserts an entitlement." Estate of Moulton
v. Puopolo, 467 Mass. 478, 485 (2014). Thus, for example, we
allow immediate appeals from an order denying a motion to
dismiss by a government official who claims absolute or
qualified immunity, because the purpose of such immunity is to
8
protect public officials from the burden of litigation itself.
Duarte v. Healy, 405 Mass. 43, 44 n.2 (1989). If the motion to
dismiss were denied in error, the official would have to defend
the litigation, which is precisely what the immunity is designed
to prevent; even if the erroneous order were ultimately reversed
after trial, the right to immunity from suit would still have
been "lost forever." Brum v. Dartmouth, 428 Mass. 684, 688
(1999). Similarly, the doctrine has been applied to allow an
immediate appeal from the denial of a motion to dismiss under
the "anti-SLAPP" statute, G. L. c. 231, § 59H, which was enacted
to protect those exercising their rights of petition and speech
from lawsuits intended to chill their exercise of those rights
by the threat of costly and time-consuming litigation. See
Blanchard v. Steward Carney Hosp., Inc., 477 Mass. 141, 157-158
(2017); Duracraft Corp. v. Holmes Prods. Corp., 427 Mass. 156,
161 (1998). The interests of defendants under the anti-SLAPP
statute cannot be adequately vindicated on appeal from a final
judgment, because they will already have suffered the burdens of
litigation arising from their exercise of protected rights. See
Fabre v. Walton, 436 Mass. 517, 521 (2002).
We have also allowed immediate appeal from an interlocutory
order disqualifying a party's counsel in a civil case under the
doctrine of present execution. We concluded that an order
depriving a party of his or her choice of counsel, if error,
9
cannot realistically be remedied on appeal from a final
judgment. Maddocks, 403 Mass. at 600. Even if the appellate
court were to determine that the judge erred in disqualifying
the attorney, "[i]n practice, . . . it is unlikely that an
appellate court would reverse a judgment and require a new trial
in the absence of a demonstration, almost impossible to make,
that any erroneous disqualification order significantly
prejudiced the rights of the client." Id.4
We have not, however, generally allowed interlocutory
discovery orders to be immediately appealable under the doctrine
of present execution. See Cronin v. Strayer, 392 Mass. 525, 527
(1984). The United States Supreme Court has also not generally
allowed such appeals under the collateral order doctrine.
Mohawk Indus., Inc., 558 U.S. at 108, quoting Firestone Tire &
Rubber Co., 449 U.S. at 377 ("we have generally denied review of
pretrial discovery orders").
4 The United States Supreme Court has concluded under its
collateral order doctrine that an order disqualifying counsel in
a civil case is not immediately appealable. Richardson-Merrell,
Inc. v. Koller, 472 U.S. 424, 440 (1985). In response to the
argument that a disqualification order will effectively be
unreviewable on appeal from a final judgment because of the
difficulty in showing that the party suffered prejudice, the
Court declared that "the difficulties in proving prejudice . . .
go more to the issue of the showing required to reverse a final
judgment than to whether a disqualification order should be
subject to immediate appeal." Id. at 438. "Absent a
requirement of prejudice, the propriety of the trial court's
disqualification order can be reviewed as effectively on appeal
of a final judgment as on an interlocutory appeal." Id.
10
The trust defendants contend that the judge's partial
denial of their motion for a protective order regarding their
communications with Levin deprives them of their right to
protect privileged attorney-client communications from
disclosure to third parties, and that this right cannot be
adequately vindicated on appeal after final judgment because the
confidentiality of those privileged communications, once
disclosed, cannot be restored. They also contend that the
subject of the interlocutory appeal -- the existence of an
attorney-client relationship regarding the property transaction
between Levin and the trust defendants before the fire -- is
collateral to the merits of the controversy, which concerns the
assignment of the purchase and sale agreement to Patel.
In response, the developer plaintiffs argue that a partial
denial of a motion for protective order is ultimately a
discovery order, and that litigation should not generally be
interrupted by allowing piecemeal appeals from such orders.
They contend that the trust defendants may challenge the order
on appeal after final judgment and, if the order is determined
to be error, they can seek a remedy of a new trial where the
attorney-client communications that were disclosed, and all
information derived from those disclosures, are excluded from
evidence.
11
The trust defendants make fair points, but the developer
plaintiffs have the better argument. The trust defendants are
correct that the existence of an attorney-client relationship
between Levin and the trust defendants regarding the sale of the
property is an issue that is collateral to any issue that will
be decided at trial. They are also correct about the importance
of protecting the confidentiality of privileged attorney-client
communications in order to encourage "full and frank
communication between attorneys and their clients." Upjohn Co.
v. United States, 449 U.S. 383, 389 (1981). And we recognize
that, if those communications are indeed privileged and are
disclosed in discovery, a successful postjudgment appeal cannot
change the fact that communications that the trust defendants
intended to be confidential will have been disclosed to the
developer plaintiffs.
But we agree with the developer plaintiffs that, although a
successful postjudgment appeal cannot entirely eliminate the
harm that arises from an order allowing third parties to learn
the content of privileged communications, the trust defendants
do have a viable postjudgment remedy. Unlike an order
disqualifying a party's counsel, the consequences of an adverse
discovery order can be ascertained, the prejudice identified,
and the error remedied by barring the use of any evidence
derived from the protected communications at a new trial or
12
other subsequent proceeding. See Borman, 378 Mass. at 782
("review [of order to testify at depositions] after a definitive
determination of rights and liabilities would not be futile").
See also Mohawk Indus., Inc., 558 U.S. at 109 ("vacating an
adverse judgment and remanding for a new trial in which the
protected material and its fruits are excluded from evidence" is
adequate remedy to erroneous disclosure of privileged material).
In short, an appellate court on postjudgment appeal cannot
prevent privileged communications from having been disclosed to
the developer plaintiffs, but it can protect the trust
defendants from the harm arising from those communications
having been used against them at trial. If the trust defendants
were prejudiced at trial by the admission of evidence derived
from the privileged communications revealed pursuant to the
order, an appellate court may grant them a new trial, where no
evidence derived from those communications will be admitted.
Notably, the trust defendants here are claiming a right of
immediate appeal from a discovery order, which commonly involves
claims of denial of rights or invasions of privilege. See
Borman, 378 Mass. at 784 (orders compelling witness testimony
"are among the most common of everyday incidents to the process
of disposing of cases, and objections on the ground of privilege
. . . are frequently raised" [citation omitted]). Discovery
orders may direct a witness to testify at a deposition about
13
information that a witness claims would be self-incriminating,
see id. at 781-782, or that a witness claims is protected by
various privileges other than the attorney-client privilege,
such as the spousal privilege or the psychotherapist-patient
privilege. Discovery issues regarding the scope of the
attorney-client privilege -- and its application to documents
sought in discovery -- may arise whenever a party produces a
privilege log identifying documents that the party refuses to
disclose because they purportedly contain protected attorney-
client communications or attorney work product. Whenever a
judge orders disclosure in any of these discovery disputes, the
aggrieved party can claim that its rights cannot be fully
vindicated on appeal, because otherwise protected communications
or documents will be revealed that the party was entitled to
keep confidential. But if that intrinsic harm were to suffice
to make all such discovery orders appealable under the doctrine
of present execution, we would be inviting "the inundation of
appellate dockets with what have heretofore been regarded as
nonappealable matters" (citation omitted), Cronin, 392 Mass. at
529, with the resulting delays and increased litigation costs
that come with piecemeal interlocutory appeals. Where a
postjudgment appeal offers a viable, albeit imperfect, remedy,
we will not grant a right to interlocutory appeal from a
discovery order simply because it involves an issue of
14
privilege. We thus conclude that orders requiring the
disclosure of privileged material, such as the order in this
case, are not categorically irremediable, and therefore are not
appealable under the doctrine of present execution.5
We note that our analysis is consistent with that of other
courts. The Supreme Court was confronted with this same
question, interpreting the Federal collateral order doctrine, in
Mohawk Indus., Inc., 558 U.S. at 103. Explaining that the Court
"routinely require[s] litigants to wait until after final
judgment to vindicate valuable rights, including rights central
to our adversarial system," id. at 108-109, the Court noted that
an erroneous privilege disclosure order is akin to other common
errors that may take place throughout the life of a case. The
5 The trust defendants note that we stated in Preventive
Med. Assocs., Inc. v. Commonwealth, 465 Mass. 810, 823 (2013),
that the harm to a party from the disclosure of privileged
attorney-client communications to an adversary "could be
irreparable." We recognized the potential for irreparable harm
in that case in the context of requiring judicial supervision of
the protocol used by the Commonwealth to search the electronic
mail (e-mail) messages of a criminal defendant -- which were
seized pursuant to a search warrant -- where the e-mail messages
may contain privileged attorney-client communications, not in
the context of deciding whether to allow an immediate appeal
from a discovery order in a civil case under the doctrine of
present execution. See id. We recognize here that there is
intrinsic irreparable harm where a judge erroneously orders the
disclosure of privileged communications, but conclude that this
intrinsic harm alone does not suffice to require a right to
interlocutory appeal under the doctrine of present execution
where there is a viable postjudgment remedy for the use of this
privileged information against the party at trial.
15
Court concluded that such errors may be remedied in the same way
as other erroneous evidentiary rulings: by reversing the
judgment and remanding for further proceedings in which the
protected material and its fruits are inadmissible in evidence.
Id. For those reasons, interlocutory appeals from attorney-
client privilege disclosure orders under 28 U.S.C. § 1291 are
not permitted as of right under the Federal collateral order
doctrine. Id. at 114. Numerous State appellate courts have
reached the same conclusion as a matter of State law. See,
e.g., Melia v. Hartford Fire Ins. Co., 202 Conn. 252, 258-259
(1987); Expedia, Inc. v. Columbus, 305 Ga. App. 450, 453 (2010);
Abrams v. Cades, Schutte, Fleming & Wright, 88 Haw. 319, 325
(1998).
Ultimately, the doctrine of present execution represents a
balancing act that weighs the harm to cost-effective litigation
arising from piecemeal interlocutory appeals against the harm
that a litigant may suffer from a trial court order that is
irremediable on postjudgment appeal. We conclude that the sheer
volume of potential appeals that would be permitted by including
privilege-related discovery orders within the doctrine of
present execution, and the inevitable adverse impact on judicial
efficiency, outweighs the intrinsic harm that potentially might
be suffered by an aggrieved party who is denied an immediate
right to appeal.
16
In reaching this balance, we note that denying a litigant
the right to a full interlocutory appeal under the doctrine of
present execution does not bar a litigant from moving or
petitioning for immediate appellate review of an interlocutory
order. Where a party believes that the legal questions at issue
regarding a discovery order are so significant or novel that
they warrant interlocutory appeal, the party may generally
request the Superior Court judge to report the decision to the
Appeals Court under Mass. R. Civ. P. 64. Or the party may
petition a single justice of the Appeals Court under G. L.
c. 231, § 118, first par., and seek redress from the single
justice, as the trust defendants did here, or ask the single
justice to refer the petition to a full panel of the Appeals
Court. And where a party or nonparty feels so strongly about
the injustice of an order compelling discovery that it is
willing to suffer the sanctions that might arise from disobeying
the order, the party or witness can obtain full appellate review
of the order as a matter of right by refusing to comply with the
order and appealing from the resulting order of dismissal or
contempt. See Cronin, 392 Mass. at 528, citing Matter of Roche,
381 Mass. 624, 625 n.1 (1980).6 We are satisfied that this
6 We recognize that, as here, an attorney who denies the
existence of an attorney-client relationship with the moving
party regarding the subject matter of the litigation is not
going to refuse to testify and risk a contempt finding. But we
17
collection of alternative remedies will adequately protect the
rights of litigants who are egregiously harmed by interlocutory
discovery orders.
2. Partial denial of motion for protective order based on
trust defendants' claim of attorney-client privilege. Having
concluded that the trust defendants are not entitled under the
doctrine of present execution to appeal from the partial denial
of their motion for a protective order, based on their claim
that they had an attorney-client relationship with Levin
regarding the sale of the property before the fire, we have two
options. We can exercise our discretion under our
superintendence authority to reach the merits of this appeal,
where the issue "has been briefed fully by the parties . . .
[and] raises a significant issue" regarding attorney-client
relationships and the doctrine of privilege, "and addressing it
would be in the public interest." Marcus, 462 Mass. at 153. Or
we can dismiss the appeal, and allow the single justice of the
Appeals Court to decide the G. L. c. 231, § 118, first par.,
petition that he stayed pending resolution of the appeal. We
decline to grant a right of interlocutory appeal to a party in a
civil proceeding simply because that avenue of appeal is not
available. We do not address whether a right of interlocutory
appeal would be appropriate in these circumstances if the appeal
concerned a privilege issue in a criminal or grand jury
proceeding. Cf. Matter of a R.I. Grand Jury Subpoena, 414 Mass.
104, 110 (1993); Matter of a Grand Jury Subpoena, 411 Mass. 489,
494 (1992).
18
exercise the first option, and after considering the trust
defendants' argument, we conclude that the motion judge's order
cannot stand based on the limited findings that he made. We
therefore vacate his order and remand the matter to the motion
judge for further factual findings and reconsideration of the
motion in light of those additional findings. We express no
view as to how the motion should ultimately be decided. After
the judge makes those findings and issues a new order, the
aggrieved party may avail itself of the options we have
identified for interlocutory appellate review -- i.e.,
requesting the judge to report his ruling to a panel of the
Appeals Court or filing a petition under § 118, first par. --
but, for reasons we have already explained, will not be entitled
to an interlocutory appeal under the doctrine of present
execution.
a. Standard of review. A judge's ultimate conclusion as
to whether an attorney-client relationship existed is a mixed
question of law and fact, which we review de novo. See McCarthy
v. Slade Assocs., Inc., 463 Mass. 181, 190 (2012), quoting
Commissioner of Revenue v. Comcast Corp., 453 Mass. 293, 303
(2009) ("Mixed questions of law and fact, such as whether there
has been a waiver, generally receive de novo review"); 2 P.R.
Rice, Attorney-Client Privilege in the United States § 11.38, at
1253-1255 (2017) (most questions concerning issues of attorney-
19
client privilege involve "a mixture of law and fact"). In doing
so, we accept a judge's findings of fact "unless clearly
erroneous, and due regard shall be given to the opportunity of
the trial court to judge . . . the credibility of the
witnesses." Mass. R. Civ. P. 52 (a), as amended, 423 Mass. 1408
(1996).
b. Summary of the evidence and the judge's findings. It
was undisputed that Levin represented the Masons, as the sellers
of the property, in connection with the purchase and sale
agreement, and that he was identified as their attorney of
record on the agreement that was signed in September 2012. The
question before the judge was whether Levin had also established
an attorney-client relationship with the trust defendants, who
were the buyers in this transaction. Levin testified that he
had not; the trust defendants testified that he had.
Levin acknowledged that he had represented the trust
defendants in a large number of matters, including real estate
matters, for over twenty years, and that he did over ninety per
cent of the trust defendants' legal work. He testified that, in
the spring of 2012, when he learned that the trust defendants
were seeking to make an offer on the property, he was
representing the trust defendants in a number of other real
estate transactions. In Levin's electronic mail messages with
the trust defendants, he discussed the purchase and sale
20
agreement in conjunction with other pending matters. The trust
defendants and Levin agreed that, because he was representing
the Masons as the sellers, the trust defendants would identify
Miriam Marcus as their attorney of record in the agreement.
Levin admitted that he never communicated with Miriam Marcus,
and instead communicated directly with the trust defendants
because he knew that Martin always negotiated real estate
transactions personally. Levin sent draft documents to the
trust defendants for review, prepared a power of attorney form
for Martin so that he could sign the purchase and sale agreement
on behalf of the Grossman Munroe Trust, and acknowledged having
"many conversations" with Martin concerning the transaction
after the agreement was signed in September 2012, particularly
about deadlines in the agreement and seeking an extension to
perform due diligence obligations. Levin also testified that he
discussed with the trust defendants their concerns about
financing, construction, and permits related to the division of
condominium units on the property; those issues were
incorporated into a rider to the purchase and sale agreement.
Levin billed the Masons and the trust defendants each one-half
of his fee in connection with the purchase and sale transaction.
The bill sent to the trust defendants listed the Masonic Temple
transaction with other pending real estate matters on which he
represented the trust defendants.
21
Throughout his testimony, Levin contended that he never
provided particularized legal advice or assistance to the trust
defendants in connection with the sale of the property, but did
provide advice "affect[ing] both sides" at group meetings
regarding various issues. Levin characterized his role in the
matter as a simple one: the parties had discussed agreed-upon
terms, and he worked to memorialize them into a working purchase
and sale agreement. He made himself available to answer
questions from the defendants, but he described these
communications as "direction, not [advice]." Levin testified
that he explicitly told the trust defendants that he would not
be able to represent them in the purchase and sale transaction.
The trust defendants disputed Levin's testimony. Seymour
Marcus testified that Levin had explicitly told him that Levin
was going to represent both sides, and that Levin had
represented opposing parties to a transaction with them before,
in the context of lenders and borrowers and also buyers and
sellers. Marcus stated that Levin offered particularized legal
advice in meetings -- without the Masons present -- on
permitting and construction issues regarding the property and on
what "[his] liabilities are to the Masons." He said that Levin
instructed them to list Miriam Marcus as their attorney solely
as a formality.
22
Martin testified that he never executed a real estate
transaction without representation, and virtually always used
Levin to negotiate agreements and draft documents. Martin
contradicted Levin's testimony that Levin merely wrote the terms
that the parties had agreed upon, claiming that Levin proposed
amendments to the purchase and sale agreement and made
suggestions and comments throughout the negotiation process.
Martin also testified that Levin never told the trust defendants
that he would be unable to represent them. Rather, Martin
testified, Levin made clear that he was representing both sides,
and asked the trust defendants to list Miriam Marcus as their
attorney only to avoid the appearance of impropriety.
At the close of the evidentiary hearing, the judge
announced his findings and subsequent order. Because it was
undisputed that the trust defendants approached Levin for legal
advice -- and indeed received such advice -- regarding their
exposure to insurer claims and other liability after the fire,
the judge first found that there was an attorney-client
relationship between Levin and the trust defendants after the
fire. With respect to the matters involving the purchase and
sale agreement before the fire, the judge found that the Masons
and the trust defendants shared a common interest in the sale,
transfer, and development of the property, but not a common
23
interest in the sense "that their interests were aligned with
regard to this transaction." He noted:
"[A] purchase and sale agreement generally is designed to
protect the rights and enforce the obligations of a buyer
and seller, which almost by definition are antagonistic one
to the other. And in a transaction of this complexity, it
seems impossible that a single attorney could represent
both sides in a very complex and sophisticated real estate
transaction."
The judge continued:
"I accept the testimony as I've heard it that there
was a longstanding relationship between Mr. Levin and
Mr. Marcus and his various ventures that extended
perhaps up to [twenty-five] years and involved
countless real estate transactions . . . where Mr.
Levin served essentially as in-house counsel for Mr.
Marcus and his various holdings. And I acknowledge
that . . . any communications [with Levin] as to all
of those real estate transactions in the past would
fall under the attorney-client umbrella that Mr. Levin
had with Mr. Marcus and his entities. That does not
mean in this particular transaction, however, that
. . . Mr. Levin necessarily represented Mr. Marcus and
Mr. Martin.
"A party asserting a privilege has the burden of
proving that the privilege exists. I don't find in
this case that the [trust defendants have] proved to
my satisfaction that Mr. Levin acted as the attorney
for Mr. Marcus and Mr. Martin with regard to the
negotiations leading to the signing of a [purchase and
sale agreement] or with regard to negotiations leading
to an extension of that [purchase and sale
agreement]."
The judge thus found that there was no attorney-client
relationship between the trust defendants and Levin with respect
to the purchase and sale transaction before the fire.
24
c. Analysis. On appeal, the trust defendants do not
contend that there was an express contract whereby Levin agreed
to represent them with respect to the Masonic Temple purchase
and sale transaction. Rather, they argue that the attorney-
client relationship was implied as a matter of law by the
conduct of the parties, particularly based on their reasonable
belief that Levin was representing them. An attorney-client
relationship may be impliedly formed "when (1) a person seeks
advice or assistance from an attorney, (2) the advice or
assistance sought pertains to matters within the attorney's
professional competence, and (3) the attorney expressly or
impliedly agrees to give or actually gives the desired advice or
assistance. . . . In appropriate cases the third element may be
established by proof of detrimental reliance, when the person
seeking legal services reasonably relies on the attorney to
provide them and the attorney, aware of such reliance, does
nothing to negate it" (citation omitted). DeVaux v. American
Home Assur. Co., 387 Mass. 814, 817-818 (1983).
The judge's findings raise issues both of law and of fact,
none of which can be resolved without remand to the motion judge
for further findings. The issue of law is that the judge, after
finding that the interests of the buyer and seller in this
purchase and sale transaction were "antagonistic" to each other,
stated that "in a transaction of this complexity, it seems
25
impossible that a single attorney could represent both sides in
a very complex and sophisticated real estate transaction." It
is not clear from the record precisely what the judge meant by
this statement, especially where the judge found that Levin
represented both the trust defendants and the Masons after the
fire, when their interests remained adverse.7
It is not ethically impossible for an attorney to represent
clients with adverse interests. Under Mass. R. Prof. C.
1.7 (a), as amended, 430 Mass. 1301 (1999) -- the version of
rule 1.7 in effect at the time of this transaction -- an
attorney could represent clients with directly adverse
interests, even in complex real estate transactions, where the
attorney reasonably believed that his or her representation of
each client would not adversely affect the relationship with the
other client and each affected client consented after
consultation.8 But even where an attorney would have violated
7 The Masons later sued the trust defendants, and Levin
testified that he only stepped aside from representing the trust
defendants after that lawsuit commenced.
8 Subsequent to the transaction at issue in this case, our
rules of professional responsibility were amended. Under the
current Mass. R. Prof. C. 1.7, as appearing in 471 Mass. 1335
(2015), an attorney may represent clients with directly adverse
interests where the attorney reasonably believes that he or she
will be able to provide competent and diligent representation to
each affected client, the representation is not otherwise
prohibited by law, the representation does not involve the
assertion of a claim by one client against another in the same
26
this rule by jointly representing clients with adverse interests
without consent, the attorney still would have had a separate
attorney-client relationship with each client. See RFF Family
Partnership, LP v. Burns & Levinson, LLP, 465 Mass. 702, 721
(2013). And where there is an attorney-client relationship,
even one that an attorney ethically should not have entered into
without consent because of a conflicting representation, the
client is entitled to protect confidential communications with
the attorney. See id., quoting In re Teleglobe Communications
Corp., 493 F.3d 345, 369 (3d Cir. 2007) ("even where a law firm
actually violates Mass. R. Prof. C. 1.7[a] by representing two
clients with adverse interests without the consent of each
client, 'counsel's failure to avoid a conflict of interest
should not deprive the client of the privilege'").
Where we cannot be sure what the motion judge meant by his
finding that it seems "impossible" for Levin, who was already
representing the Masons with respect to the sale of its
property, also to represent the trust defendants with respect to
that transaction, we believe it prudent to remand the matter to
the judge for clarifying findings on this issue. It is unclear
what role, if any, that finding played in his ultimate
litigation or proceeding, and each affected client gives
informed written consent.
27
determination that Levin did not enter into an attorney-client
relationship with the trust defendants until after the fire.
We must also remand for further findings because we cannot
evaluate whether the judge's findings were clearly erroneous
without credibility findings regarding the conflicting testimony
of Levin and the trust defendants. For example, the judge did
not resolve contradictory testimony as to whether Levin
explicitly told the trust defendants that he could not represent
them because he was simultaneously representing the Masons,
which bears on the trust defendants' claim of detrimental
reliance. The judge found only that the trust defendants had
failed to satisfy their burden of proving that they had an
attorney-client relationship with Levin regarding the
negotiation of the purchase and sale agreement and its
extension, but he did not explain why.
Importantly, the judge did not address the undisputed fact
that Levin billed both the Masons and the trust defendants for
his legal work regarding this transaction, splitting his fee
equally between them. Where, as here, an attorney bills an
existing client for legal services, and where the client pays
for those services, it is reasonable to infer that they had an
attorney-client relationship with regard to those services. See
Williams v. Ely, 423 Mass. 467, 476 (1996) ("It seems clear that
[the client] would not have contributed toward payment of [the
28
law firm's] bills if they had received no legal advice from the
firm"). An attorney's billing for legal services and a client's
payment of the bill for such services may not be dispositive of
the existence of an attorney-client relationship, but a finding
of no attorney-client relationship with respect to legal
services that were billed and paid warrants an explanation. See
Matter of Stern, 425 Mass. 708, 712-713 (1997) (trustee acted as
legal advisor and attorney-client relationship was formed where,
inter alia, trustee was paid fees specifically to act as
attorney); Droz v. Karl, 736 F. Supp. 2d 520, 524-525 (N.D.N.Y.
2010) (while not dispositive, payment of fee to attorney is
"indicator[] of an attorney-client relationship").
As to this issue, we note that an attorney-client
relationship may impliedly be formed when an attorney provides
"advice or assistance" (emphasis added). DeVaux, 387 Mass. at
817-818. Where "advice" has been defined as "[g]uidance
offered," see Black's Law Dictionary 65 (10th ed. 2014), we may
interpret "assistance" here to mean "services rendered." See 1
P.R. Rice, Attorney–Client Privilege in the United States, supra
at § 7.10, at 1273-1277 ("Legal assistance requires the
involvement of the judgment of a lawyer in his capacity as a
lawyer," and it "requires an attorney to render the type of
services that his education and certification to practice
qualify him to render for compensation" [quotation omitted]);
29
Sheinkopf v. Stone, 927 F.2d 1259, 1266 (1st Cir. 1991)
(describing attorney's obtaining of party's check and having
that party sign various documents as "assistance . . .
rendered," and distinguishing "legal advice" from actual,
concrete transactions). The question whether Levin provided
"assistance" to the trust defendants that created an attorney-
client relationship is related to, but distinct from, the
question whether he provided them with legal "advice." The
motion judge may wish to consider this issue on remand.
Conclusion. The order of the Superior Court judge
partially denying the trust defendants' motion for a protective
order is vacated, and the matter is remanded for further
findings consistent with this opinion and for reconsideration of
the motion in light of those findings.
So ordered.