Twp. of Neshannock v. Kirila Contractors, Inc. , 181 A.3d 467 ( 2018 )

IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Township of Neshannock, :
Appellant :
:
v. :
:
Kirila Contractors, Inc. and Fidelity :
and Deposit Company of Maryland, :
and Kirila Contractors, Inc., Hatch, :
Mott MacDonald and Hatch Mott :
MacDonald, LLC, and Hatch Mott :
MacDonald T&T, Inc., both t/d/b/a : No. 387 C.D. 2017
Hatch Mott MacDonald :
:
Township of Neshannock :
:
v. :
:
Kirila Contractors, Inc. and :
Fidelity and Deposit Company :
of Maryland, : No. 436 C.D. 2017
Appellants : Argued: February 5, 2018
BEFORE: HONORABLE MARY HANNAH LEAVITT, President Judge
HONORABLE ANNE E. COVEY, Judge
HONORABLE ELLEN CEISLER, Judge
OPINION BY
JUDGE COVEY FILED: March 5, 2018
The Township of Neshannock (Township) appeals from the Lawrence
County Common Pleas Court’s February 28, 2017 interlocutory order (February 28,
2017 Order) denying in part the Township’s Motion in Limine to Exclude Privileged
Documents (Motion to Exclude). Kirila Contractors, Inc. (Kirila) and Fidelity and
Deposit Company of Maryland (F&D) cross-appeal from the same order, which
declared specified numbered exhibits inadmissible at trial because they were fully or
partially privileged as attorney-client communications or attorney work product. There
are five issues before this Court: (1) whether the February 28, 2017 Order is an
appealable order; (2) whether this Court may, by stipulation, consider deposition
transcript excerpts and proposed exhibits on appeal despite that they were not before
the trial court; (3) whether the Township waived the attorney-client privilege and
attorney work product doctrine; (4) whether the trial court erred by ruling that certain
exhibits were in whole or part protected by the attorney-client privilege and attorney
work product doctrine; and (5) whether the Township should be precluded from filing
any future interlocutory appeals pertaining to allegedly privileged evidence.
This appeal arises from a contract dispute between the Township, and
Kirila and Kirila’s surety insurer F&D relating to a Township sewer construction
project. On April 8, 2011, the Township filed a breach of contract action against Kirila
and F&D. The Township’s contracted engineer Hatch Mott MacDonald and related
companies (HMM) were named additional defendants. During discovery, the parties
disputed the Township’s withholding of documents based on the attorney-client
privilege or attorney work product doctrine. On March 22, 2013, the Township filed a
Motion for Protective Order. Kirila responded to the Motion for Protective Order and
also filed a Motion for Appointment of Master Regarding Documents Asserted by
[Township] to be Protected from Production (Motion for Appointment of a Master),
wherein Kirila requested the appointment of a special master to conduct an in camera
review of the disputed documents. The Township filed a brief opposing Kirila’s
Motion for Appointment of a Master, and a brief in support of its Motion for Protective
Order. On September 18, 2013, the trial court denied the Township’s Motion for
Protective Order and granted Kirila’s Motion for Appointment of a Master.
Accordingly, by November 15, 2013 order (Master Order), the trial court appointed a
special master (Master) to review the purportedly privileged documents and directed
the Master to file a written report (Report) identifying the documents and portions
2
thereof subject to production, and those not subject thereto. The Master Order also
declared that the parties had ten days to file written objections to the Report.
On February 13, 2015,1 the Master filed his Report and notified the
Township that it had thirty days to file exceptions.2 The Report identified the
documents which must be produced, and those which were privileged. The Report also
explained:
If no exceptions are filed to this [R]eport, and this [R]eport
is confirmed by [the trial court], then the [d]iscovery [f]ile
will be sent to counsel for [Kirila], it being noted that the
[d]iscovery [f]ile contains all of the email communications,
however the documents that have been protected will be
removed from that file, and portions of the documents that
have been determined to be protected will be deleted.
Reproduced Record (R.R.) at 618a. On February 23, 2015, Kirila filed objections to
the Report. On March 4, 2015, the Township filed its objections. The Township
challenged the Master’s recommendation that the Township pay the entire Master’s
fee. The Township also disagreed with the Report, explaining:
[T]he Township objects to the Report on the grounds that it
does not provide the detail required by [the Master] Order.
The [Master] Order specifically provided that the Master was
to write a report containing the factual and legal reasons for
his findings. Without this factual and legal reasoning, the
Township cannot determine whether it has specific
objections to any of the documents that he has determined
are not privileged prior to their production to [Kirila].
However, as this process has already delayed this case for
1
The Master filed an initial report on August 12, 2014. However, on August 14, 2014, the
Township delivered another box of documents to the Master for his review. As a result, the Master
rescinded his initial report on August 19, 2014. The Master’s February 13, 2015 Report subsequently
ratified the earlier August 12, 2014 report and the Master stated that he applied the August 12, 2014
report to the additional documents.
2
Although the Master’s Report used the term “exceptions,” the Master Order and the parties’
responsive documents used the term “objection.” Reproduced Record at 618a, 576a, 621a, 644a.
Notably, the thirty day period contradicts the Master Order which permitted the parties ten days to
file objections.
3
nearly one and a half years, the Township is not
requesting that the Master submit a revised report.
Rather, the Township is requesting that it reserve the
right to object to the production of each of these
documents on the grounds that they are privileged when
and if they are introduced as an exhibit at any deposition
or at the trial.
R.R. at 647a-648a (emphasis added; citation omitted).
On May 22, 2015, the trial court issued an order (May 22, 2015 Order)
that granted the Township’s “request to reserve the right to object to the introduction
of each document if the documents are produced at a deposition or at trial on the ground
that they are privileged[,]” but overruled the Township’s objections on all other
grounds. R.R. at 722a. It also overruled Kirila’s objections. Thereafter, the Master
delivered the documents he determined to be unprotected to Kirila. The
Township did not appeal from the trial court’s May 22, 2015 Order.
Trial was scheduled for April 10, 2017. Kirila provided the Township a
list of Kirila’s proposed trial exhibits, including some of the documents the Master had
reviewed. On September 27, 2016, the Township filed its Motion to Exclude, Kirila
filed a response thereto, and the trial court held oral argument regarding the same on
November 28, 2016. On February 28, 2017, the trial court granted the Township’s
Motion to Exclude in part and denied it in part. On March 29, 2017, the Township
appealed to this Court pursuant to Pennsylvania Rule of Appellate Procedure (Rule)
313,3 and filed an Emergency Motion for Stay Pending Appeal.
3
Rule 313 permits an appeal as of right from a lower court’s collateral order. Discovery
orders are generally reviewed for an abuse of discretion. However, the applicability of the attorney-
client privilege and attorney work product doctrine involve questions of law. Thus, our standard of
review is de novo and our scope of review is plenary. See Levy v. Senate of Pa., 65 A.3d 361 (Pa.
2013).
4
On April 12, 2017, Kirila filed a Petition for Permission to File Cross
Appeal in this Court.4 On April 17, 2017, this Court transferred Kirila’s Petition for
Permission to File Cross Appeal to the trial court,5 and directed the trial court to treat
the petition as a cross-appeal from its February 28, 2017 Order. On May 31, 2017, this
Court consolidated the matters and directed the parties to brief the appealability of the
trial court’s February 28, 2017 Order. On October 5, 2017, the parties filed a
stipulation pursuant to Rule 1926 agreeing that certain deposition transcript excerpts
and trial exhibits should be made part of the record on appeal.6
On November 9, 2017, this Court held a conference call regarding the
parties’ stipulation, and conditionally approved their stipulation subject to a Panel of
Judges’ determination of whether the Court may, by stipulation, consider the excerpts
and proposed exhibits although they were not before the trial court.
First, we address the issues raised by this Court: (1) whether the February
28, 2017 Order is appealable; and, (2) whether this Court may, by stipulation, consider
documents on appeal that were not part of the certified record. With respect to whether
the February 28, 2017 Order is appealable, our Supreme Court has stated:
Generally, subject to limited exceptions, litigants may appeal
only final orders. One of the exceptions is the collateral
order, which is addressed in [Rule 313]. Pa.R.A.P. 313. Rule
313 permits the immediate appeal as of right from an
otherwise unappealable, interlocutory order provided that
4
That matter was docketed at 436 C.D. 2017.
5
This Court explained that cross-appeals are properly filed in the trial court.
6
According to the Township:
These deposition transcripts were not included in the reproduced record
because they relate to an argument that Kirila [raised] for the first time
in its Rule 1925(b) Statement. In order to fully address Kirila’s
arguments, the Township sought and obtained a stipulation to
supplement the record with the materials necessary to adjudicate the
issues at bar.
Township Second Br. at 13 n.5.
5
three requirements are met: ‘(1) the order must be separable
from, and collateral to, the main cause of action; (2) the right
involved must be too important to be denied review; and (3)
the question presented must be such that if review is
postponed until after final judgment, the claim will be
irreparably lost.’ [Commonwealth v.] Harris, 32 A.3d [243,]
248 [(Pa. 2011)]; Pa.R.A.P. 313(b). As we established in
Harris, discovery orders rejecting claims of privilege and
requiring disclosure constitute collateral orders that are
immediately appealable under Rule 313.
Commonwealth v. Flor, 136 A.3d 150, 154-55 (Pa. 2016) (citation omitted; emphasis
added). Here, because the February 28, 2017 Order purportedly directed the disclosure
of allegedly privileged documents, it was immediately appealable under Rule 313.
We next address whether this Court may, by stipulation, consider
deposition transcript excerpts and proposed exhibits that were not before the trial court.
The law is well settled that an appellate court may not consider documents that are not
part of the certified record. See Commonwealth v. Spotz, 18 A.3d 244 (Pa. 2011). Rule
1926, upon which the parties rely, governs correction or modification of a record on
appeal, and states:
(a) If any difference arises as to whether the record truly
discloses what occurred in the trial court, the difference shall
be submitted to and settled by that court after notice to the
parties and opportunity for objection, and the record made to
conform to the truth.
(b) If anything material to a party is omitted from the record
by error, breakdown in processes of the court, or accident or
is misstated therein, the omission or misstatement may be
corrected by the following means:
(1) by the trial court or the appellate court upon application
or on its own initiative at any time; in the event of correction
or modification by the trial court, that court shall direct that
a supplemental record be certified and transmitted if
necessary; or
(2) by the parties by stipulation filed in the trial court, in
which case, if the trial court clerk has already certified the
6
record, the parties shall file in the appellate court a copy of
any stipulation filed pursuant to this rule, and the trial court
clerk shall certify and transmit as a supplemental record the
materials described in the stipulation.
(c) The trial court clerk shall transmit any supplemental
record required by this rule within 14 days of the order or
stipulation that requires it.
(d) All other questions as to the form and content of the
record shall be presented to the appellate court.
Note: The stipulation described in this rule need not
be approved by the trial court or the appellate court,
but both courts retain the authority to strike any
stipulation that does not correct an omission or
misstatement in the record.
Pa.R.A.P. 1926 (emphasis added). However, the parties do not assert that the record
before this Court fails to reflect what occurred in the trial court, nor does it reference
omissions or misstatements “by error, breakdown in processes . . . , or accident[,]” but
rather, the parties are supplementing the record solely to assist this Court’s analysis.
Id. Accordingly, this Court may not consider on appeal the deposition transcript
excerpts and exhibits that are not part of the certified record.7
Next, we consider the parties’ arguments pertaining to the attorney-client
privilege and attorney work product doctrine.
Attorney-Client Privilege
In both criminal and civil proceedings, the General Assembly
has provided that ‘counsel shall not be competent or
permitted to testify to confidential communications made to
him by his client, nor shall the client be compelled to disclose
the same, unless in either case this privilege is waived upon
7
Further, even if the omissions occurred at the trial court level in this case, rather than correct
the errors on appeal, the parties would have been required to notify the trial court clerk charged with
transmitting a supplemental record. See Rule 1926(b).
7
the trial by the client.’ 42 Pa.C.S. §§ 5916 (criminal matters)
and 5928 (civil matters).
In re Thirty-Third Statewide Investigating Grand Jury, 86 A.3d 204, 216 (Pa. 2014).
Our Supreme Court expounded:
Generally, evidentiary privileges are not favored, as they
operate in derogation of the search for truth. Nevertheless,
the privileges exist where appropriate, and they serve
important interests. Although the attorney-client privilege is
deeply rooted in the common law, several statutes now define
the parameters of such privileges in this Commonwealth.
Id. at 215 (citations and quotation marks omitted).
The attorney-client privilege is intended to foster candid
communications between counsel and client, so that counsel
may provide legal advice based upon the most complete
information from the client. The central principle is that a
client may be reluctant to disclose to his lawyer all facts
necessary to obtain informed legal advice, if the
communication may later be exposed to public scrutiny.
‘Recognizing that its purpose is to create an atmosphere that
will encourage confidence and dialogue between attorney
and client, the privilege is founded upon a policy extrinsic to
the protection of the fact-finding process. The intended
beneficiary of this policy is not the individual client so much
as the systematic administration of justice which depends on
frank and open client-attorney communication.’
Investigating Grand Jury of [Phila. Cty.], 593 A.2d [402,]
406 [(Pa. 1991)] (internal citations omitted).
In re Thirty-Third, 86 A.3d at 216-17 (citations omitted).
This Court, in Dages v. Carbon County, 44 A.3d 89 (Pa. Cmwlth. 2012),
explained:
Previously, the following four elements were required to
establish the attorney-client privilege: (1) that the asserted
holder of the privilege is or sought to become a client; (2)
that the person to whom the communication was made is
a member of the bar of a court, or his or her subordinate;
(3) that the communication relates to a fact of which the
attorney was informed by the client, without the presence
8
of strangers, for the purpose of securing an opinion of
law, legal services or assistance in a legal matter; and, (4)
that the claimed privilege has not been waived by the
client. In Gillard v. AIG Ins. Co., . . . 15 A.3d 44 ([Pa.]
2011), the Pennsylvania Supreme Court expanded the
attorney-client privilege by broadly construing Section 5928
of the Judicial Code.[8] The [Gillard] Court held that ‘in
Pennsylvania, the attorney-client privilege operates in a
two-way fashion to protect confidential client-to-attorney or
attorney-to-client communications made for the purpose
of obtaining or providing professional legal advice.’ Id. .
. . at 59 (emphasis added). Consequently, the privilege now
also protects the confidential communications made by an
attorney to his or her client.
Dages, 44 A.3d at 92-93 (citation omitted; bold emphasis added).
Moreover, it is clear that government entities may assert the privilege.
This Court has held that government entities qualify for the
protection of the attorney-client privilege. Such entities
may claim the privilege for communications between
their attorney and their agents or employees who are
authorized to act on behalf of the entities.
Gould v. City of Aliquippa, 750 A.2d 934, 937 (Pa. Cmwlth. 2000) (citation omitted;
emphasis added).
“The party asserting the privilege has the initial burden to prove that
it is properly invoked, and the party seeking to overcome the privilege has the burden
to prove an applicable exception to the privilege.” Joe v. Prison Health Servs., Inc.,
782 A.2d 24, 31 (Pa. Cmwlth. 2001) (emphasis added). Our federal courts have held
that “[t]o sustain this burden of proof, the party asserting the privilege must show,
by record evidence such as affidavits, ‘sufficient facts as to bring the
[communications at issue] within the narrow confines of the privilege.’”9 Delco
8
42 Pa.C.S. § 5928.
9
As noted by the U.S. District Court for the Northern District of New York:
9
Wire & Cable, Inc. v. Weinberger, 109 F.R.D. 680, 688 (E.D. Pa. 1986) (bold emphasis
added) (quoting Barr Marine Prods. Co. v. Borg-Warner Corp., 84 F.R.D. 631, 636
(E.D. Pa. 1979)).10 “[T]he attorney client-privilege must be asserted with respect to
each question sought to be avoided or document sought to be withheld, ‘rather than as
a single, blanket assertion.’ [U.S. v.] Rockwell Int[’l], 897 F.2d [1255,] 1265 [(3d. Cir.
1990).]” Yang v. Reno, 157 F.R.D. 625, 636 (M.D. Pa. 1994).
Attorney Work Product Doctrine
The attorney work product doctrine is set forth in Pennsylvania Rule of
Civil Procedure (Civ. Rule) No. 4003.3, which provides:
Subject to the provisions of [Civ.] Rule[] [Nos.] 4003.4 and
4003.5, a party may obtain discovery of any matter
discoverable under [Civ.] Rule [No.] 4003.1 even though
prepared in anticipation of litigation or trial by or for another
party or by or for that other party’s representative, including
There is the general maxim that the public, particularly within the
judicial forum, is entitled to be exposed to ‘everyman’s evidence.’ 8
Wigmore, Evidence § 2317 (McNaughton rev. ed. 1961). The quest is
for the truth of the matter to flow forward before the court, and ‘[t]he
suppression of truth is a grievous necessity at best . . . [only justified]
when the opposed private interest is supreme.’ In re Megan-Racine
Assocs., Inc., 189 B.R. 562, 570 ([]N.D. N.Y. 1995) (quoting McMann
v. Sec. and Exch. Comm’n, 87 F.2d 377, 378 (2d Cir. 1937)). But since
the attorney-client privilege ‘stands in derogation of the public’s right
to everyman’s evidence, . . . it ought to be strictly confined within
the narrowest possible limits consistent with the logic of the
principle.’ In re Grand Jury Proceedings, 219 F.3d 175, 182 (2d Cir.
2000) (citing [U.S.] v. Int’l Bhd. of Teamsters, 119 F.3d [210,] 214 [(2d
Cir. 1997])).
NXIVM Corp. v. O’Hara, 241 F.R.D. 109, 125 n.21 (N.D. N.Y. 2007) (citations and quotation marks
omitted; emphasis added).
10
“The decisions of the federal district courts may offer guidance, but they are not binding
precedent upon this Court.” Gould v. City of Aliquippa, 750 A.2d 934, 938 (Pa. Cmwlth. 2000).
However, this Court has looked to federal decisions for guidance in the context of discovery disputes.
See, e.g., Schenck v. Twp. of Ctr., 893 A.2d 849 (Pa. Cmwlth. 2006).
10
his or her attorney, consultant, surety, indemnitor, insurer or
agent. The discovery shall not include disclosure of the
mental impressions of a party’s attorney or his or her
conclusions, opinions, memoranda, notes or summaries,
legal research or legal theories. With respect to the
representative of a party other than the party’s attorney,
discovery shall not include disclosure of his or her mental
impressions, conclusions or opinions respecting the value or
merit of a claim or defense or respecting strategy or tactics.
Pa.R.C.P. No. 4003.3.
Our Supreme Court has opined:
Pennsylvania’s [R]ules of [C]ivil [P]rocedure broadly
provide that a ‘party may obtain discovery regarding any
matter, not privileged, which is relevant to the subject matter
involved in the pending action.’ Pa.R.C.P. [No.] 4003.1.
Indeed, [Civ. Rule No.] 4003.3 furthers the liberal discovery
rule, instructing that ‘a party may obtain discovery of any
matter discoverable under [Civ.] Rule [No.] 4003.1 even
though prepared in anticipation of litigation or trial by or for
another party or by or for that other party’s representative,
including his or her attorney.’ Pa.R.C.P. [No.] 4003.3.
These provisions advance the truth-determining process so
essential to our judicial system and prevent unfair surprise at
trial.
Barrick v. Holy Spirit Hosp. of the Sisters of Christian Charity, 91 A.3d 680, 686 (Pa.
2014) (footnote omitted).
Waiver
Generally, “once the attorney-client communications have been
disclosed to a third party, the privilege is deemed waived.” Joe, 782 A.2d at 31
(emphasis added). Accordingly, “[a]bsence of waiver is one of the elements required
to establish the privilege.” Bagwell v. Pa. Dep’t of Educ. (Bagwell I), 103 A.3d 409,
420 (Pa. Cmwlth. 2014). Courts have held that disclosure will not waive the privilege
when an entity discloses privileged information to its employees intimately involved
11
with the matter, i.e. “individuals who had a ‘need to know’ the legal advice[.]” Se. Pa.
Transp. Auth. v. CaremarkPCS Health, L.P., 254 F.R.D. 253, 260 (E.D. Pa. 2008).
“[W]hen waiver is the focus of a dispute, the burden is shifted to the party asserting
waiver.” Bagwell I, 103 A.3d at 420.
Argument and Legal Analysis
Kirila contends that the Township waived all of its attorney-client
privilege and attorney work product claims when it acceded in the Master delivering
allegedly privileged documents to Kirila. Kirila also points to the Township’s failure
to appeal from the trial court’s May 22, 2015 Order as waiver. It is undisputed that the
Master forwarded the purportedly privileged documents to Kirila after the trial court
entered the May 22, 2015 Order. The Township argues that it did not waive the
privilege because the document disclosure was involuntarily compelled by the trial
court’s order.11
11
The Township cites to several federal court cases to support its contention that production
of documents under court order does not waive privilege. In In re Vargas, 723 F.2d 1461 (10th Cir.
1983), the 10th Circuit Court of Appeals held that “production of privileged documents by an attorney
under court order does not necessarily constitute a waiver of the privilege.” Id. at 1466 (emphasis
added). Importantly, the Vargas Court specifically recognized that there was no right of appeal from
the order requiring disclosure pursuant to a subpoena duces tecum. In Transamerica Computer Co.
v. International Business Machines [(IBM)] Corp., 573 F.2d 646 (9th Cir. 1978), the 9th Circuit
addressed a waiver issue where a trial court issued a pretrial order which dramatically accelerated
document production requiring IBM to produce 17 million documents within three months. Although
IBM complied, incorporating intensive screening efforts, certain privileged documents were
inadvertently produced. The Transamerica Court characterized the disclosures as compelled, given
the accelerated discovery proceedings, and held that disclosure of documents compelled by court
order does not waive the privilege. Notably, the order at issue is distinguishable from that in the
instant matter, given that here, the Township requested the specific relief granted in the order, and
no appeal was taken therefrom. In re Engle Cases, No.: 3:09-cv-10000-J-WGY-JBT, 2016 U.S. Dist.
LEXIS 16667 (M.D. Fl. February 10, 2016) involved the disclosure of documents to a special master
for inspection. The Engle Court held that disclosure of discovery for the purpose of determining the
merits of privilege claim does not waive the privilege. The instant case does not pertain to whether
disclosure to the Master waived the privilege, but rather, whether disclosure to Kirila did so. In Miller
12
Importantly, the Third Circuit Court of Appeals has held:
[T]he work [] product doctrine protects an attorney’s work
from falling into the hands of an adversary, and so
‘disclosure to a third party does not necessarily waive the
protection of the work [] product doctrine.’ [Westinghouse
Elec. Corp. v. Republic of the Phil., 951 F.2d 1414, 1428 (3d
Cir. 1991)]. Rather, the purpose behind the work [] product
doctrine ‘requires [a court] to distinguish between
disclosures to adversaries and disclosures to non-
adversaries[,]’ id., and it is only in cases in which the
material is disclosed in a manner inconsistent with
keeping it from an adversary that the work [] product
doctrine is waived.
In re Chevron Corp., 633 F.3d 153, 165 (3d Cir. 2011) (emphasis added); see also
Montgomery Cty. v. MicroVote Corp., 175 F.3d 296 (3d Cir. 1999). Further,
v. Haulmark Transport Systems, 104 F.R.D. 442, 445 (E.D. Pa. 1984) a witness produced a document
at deposition, whereby an objection was made by one of the attorneys who wrote it. The witness did
not testify about the contents thereof. The Miller Court concluded that the disclosure of the document
at deposition over objection did not constitute a waiver of the privilege. In Hynix Semiconductor Inc.
v. Rambus Inc. (N.D. Cal., No. CV-00-20905 RMW [Re Docket No. 3060], No. C-05-00334 RMW
[Re Docket No. 1088], No. C-06-00244 RMW [Re Docket No. 713], filed Feb. 2, 2008), slip op. at
___, 2008 U.S. Dist. LEXIS 11764, at *17, the court explained: “In general, a disclosure compelled
by a court order like the piercing orders in this case does not waive the attorney-client [privilege] and
work product [doctrine].” Id. Importantly, the Hynix Court also emphasized that: “The caveat to
this general principle is that the party claiming privilege must take efforts ‘reasonably
designed’ to protect the privilege.” Id. at *17-18 (emphasis added). In Hopson v. Mayor & City
Council of Baltimore, 232 F.R.D. 228 (D. Md. 2005), the court endorsed the approach taken in
Transamerica, and also recognized the need for a party claiming privilege to take reasonable measures
to protect the privilege. In Bowen v. Parking Authority of the City of Camden, (D. N.J., No. 00-575,
filed July 30, 2002), slip op. at __, 2002 U.S. Dist. LEXIS 14585, the court stated, “a production of
documents ordered by a court does not constitute a waiver of attorney-client privilege because such
production was not ‘voluntary.’” Id. at __, *14-15 (quoting Leonen v. Johns-Manville, 135 F.R.D.
94 (D. N.J. 1990)). In Leonen, the court explained: “in the instant case, since defendant objected to
the discovery and only produced the documents pursuant to a court order, defendant’s disclosure
cannot be considered voluntary.” Id. at 99. Finally, in Teachers Insurance & Annuity Association v.
Shamrock Broadcasting Co., 521 F. Supp. 638, 641 (S.D. N.Y. 1981), the court held that “disclosure
is not a waiver if it is compelled by court order, or made pursuant to a stipulation reserving the right
to assert the privilege[.]” Although not explicitly overruled, the concept of limited waiver adopted in
Teachers Insurance was abrogated in In re John Doe Corp., 675 F.2d 482, 489 (2d Cir.1982), as
recognized in Bowne of New York City, Inc. v. AmBase Corp., 161 F.R.D. 258 (S.D. N.Y. 1995).
13
a party may waive the attorney work product [doctrine] by
disclosing protected documents in certain circumstances. It
has been held that a disclosure sufficient to waive the work
product protection does not have to be intentional; therefore
inadvertent or unintentional disclosures of protected
materials also might result in the waiver of the privilege.
However, such a disclosure does not automatically forfeit the
attorney work product [doctrine]. In determining whether
a party has waived the privilege through an inadvertent or
involuntary disclosure, courts consider, among other
factors, the steps taken by a party to remedy the
disclosure and any delay in doing so. See, e.g., [U.S.] v.
Keystone Sanitation Co., 885 F. Supp. 672, 676 (M.D. Pa.
1994); cf. [U.S.] v. de la Jara, 973 F.2d 746, 749–50 (9th Cir.
1992) (holding that a defendant waived his attorney-client
privilege with regards to a seized letter because he waited six
months after the seizure to assert his privilege). But see
Carter [v. Gibbs], 909 F.2d [1450,] 1451 [(Fed. Cir. 1990)]
(holding that even an inadvertent disclosure automatically
waives the attorney work product [doctrine], because to do
otherwise ‘would do no more than seal the bag from which
the cat has already escaped.’). Thus, in the case of
inadvertent or involuntary disclosures, the party asserting
the work product doctrine must pursue all reasonable
means to restore the confidentiality of the materials and
to prevent further disclosures within a reasonable period
to continue to receive the protection of the privilege.
In re Grand Jury (Impounded), 138 F.3d 978, 981 (3d Cir. 1998) (citations omitted;
bold and italic emphasis added).
In the instant matter, the Township’s disclosure of the allegedly privileged
documents to Kirila was not, as the Township argues, involuntary. The Report
contained notice that the Master intended to deliver the unprotected documents to
Kirila upon the trial court’s disposition of any objections. Although the Township
objected to the Report, it voiced no opposition to the disclosure and acquiesced in the
disclosure of the documents to its adversary. Further, the Township informed the trial
court that it was “not requesting that the Master submit a revised report[,”] but
rather “the right to object to the production of each of these documents on the grounds
14
that they are privileged when and if they are introduced as an exhibit at any deposition
or at the trial.”12 R.R. at 647a-648a (emphasis added). The trial court granted the
Township’s request and incorporated said request in its order. Moreover, the Township
did not appeal,13 all the while knowing that its failure to do so would place the allegedly
privileged material directly in its opponent’s hands,14 where that information ultimately
remained for almost two years.15 These facts undermine the Township’s argument that
it was compelled to produce the documents, and clearly demonstrate that the Township
did not “pursue all reasonable means” to prevent their disclosure. In re Grand Jury,
138 F.3d at 981.
For these reasons, we hold that the Township waived privilege as to the
contested documents disclosed to Kirila. Despite the trial court’s order permitting the
Township to object to the use of the documents at deposition or trial on the basis of
12
The Township explains in its brief to this Court that “[b]ecause the [] Master had provided
no basis for his recommendations, the only way for the [t]rial [c]ourt to resolve the Township’s
[o]bjections would have been to conduct yet another cumbersome and time-consuming in camera
review of the documents that the [] Master had recommended be produced to Kirila.” Township
Second Br. at 12.
13
As discussed, supra, the Pennsylvania Supreme Court has recognized the critical nature of
appeals from orders that are alleged to violate a protected privilege, and expressed, unambiguously,
that such appeals are permitted. See Flor.
14
The fact that the trial court granted the Township the objection right does not alter the fact
that the Township knowingly disclosed purportedly privileged documents to its adversary. The
Township contends it, at all times, opposed disclosure by withholding the disputed documents,
opposing the Master’s appointment, and objecting to the Report. However, in the end, the Township
failed to prevent disclosure by taking action in opposing the Report, requesting the trial court to
conduct its own in camera review and, if necessary, appealing from the trial court’s order. Instead,
the Township requested disclosure in exchange for the right to object during deposition or at trial.
Moreover, the Township did not appeal from the trial court’s May 22, 2015 Order.
15
In In re Grand Jury, the Court concluded that a four-month delay in attempting to address
the disclosure was too long, and resulted in privilege waiver.
15
privilege, once the Township disclosed the documents to Kirila, no such objection
could be sustained since privilege had been waived.16
Having concluded that the Township waived the attorney-client privilege
and attorney work product doctrine for all the documents the Master produced to Kirila,
we need not address the parties’ other issues pertaining to the disputed documents.
Future Interlocutory Appeals
Kirila urges this Court to enjoin the Township from filing any further
appeals pursuant to Rule 313 or any other motion for a stay in the instant action based
on privilege, because such an appeal would further interrupt or delay the trial. Kirila
contends that it offered to agree to the entry of an order precluding the use at trial of
documents determined by the trial court to be privileged, and documents for which the
trial court reserved its decision, conditioned on the withdrawal of the instant appeal.
Kirila notes that the Township offered no reason for its refusal to accept Kirila’s offer
and speculates as to the basis for the Township’s refusal. Kirila is also concerned that
the Township intends to further delay or interrupt the trial in this matter by filing Rule
313 appeals if the Township believes that the trial court has made erroneous
admissibility rulings. Kirila provides no legal basis for preemptively prohibiting the
Township from filing such appeals, and we will not attempt to predict the Township’s
16
Kirila also asserts that the Township waived privilege by the Township’s inclusion of the
disputed documents in the reproduced record it served on Kirila in this appeal. The Township
contends that Kirila waived that argument because it was not contained in Kirila’s Rule 1925(b)
Statement or addressed by the trial court. We disagree. The Township filed its Designation of
Contents of the Reproduced Record on June 23, 2017 and filed the reproduced record on July 25,
2017. Both filings occurred after Kirila filed its Rule 1925(b) Statement on May 31, 2017. Thus, at
the time Kirila filed its 1925(b) Statement, it was unaware that the Township intended to again
disclose the documents. The Township further argues that because the Master conducted an in
camera document review, the documents had to be made a part of the sealed record on appeal.
Because the Township did not appeal from the trial court’s May 22, 2015 Order as well as failed to
“pursue all reasonable means” to again prevent the document’s disclosure, it waived the privileges;
therefore, its argument is not compelling. In re Grand Jury, 138 F.3d at 981.
16
trial strategy or conduct, or presume that the Township will use the legal process to
improperly delay trial. Thus, we deny Kirila’s request to enjoin the Township from
filing appeals pursuant to Rule 313.
Conclusion
For all of the above reasons, we affirm in part and reverse in part the trial
court’s February 28, 2017 Order granting in part and denying in part the Township’s
Motion to Exclude. We reverse the trial court’s February 28, 2017 Order to the extent
that it held any documents or portions thereof were privileged and/or protected, because
the Township waived those privileges and protections. The trial court’s order is
affirmed in all other respects.
___________________________
ANNE E. COVEY, Judge
17
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Township of Neshannock, :
Appellant :
:
v. :
:
Kirila Contractors, Inc. and Fidelity :
and Deposit Company of Maryland, :
and Kirila Contractors, Inc., Hatch, :
Mott MacDonald and Hatch Mott :
MacDonald, LLC, and Hatch Mott :
MacDonald T&T, Inc., both t/d/b/a : No. 387 C.D. 2017
Hatch Mott MacDonald :
Township of Neshannock :
:
v. :
:
Kirila Contractors, Inc. and :
Fidelity and Deposit Company :
of Maryland, : No. 436 C.D. 2017
Appellants :
ORDER
AND NOW, this 5th day of March, 2018, the Lawrence County Common
Pleas Court’s (trial court) February 28, 2017 order is reversed in part and affirmed in
part. The trial court’s February 28, 2017 order is reversed to the extent that it ruled any
documents or portions thereof were privileged and/or protected. The trial court’s order
is affirmed in all other respects.
___________________________
ANNE E. COVEY, Judge