United Services Auto. Assoc. v. Law Offices of Herssein and Herssein, P.A.

Third District Court of Appeal
State of Florida
Opinion filed December 13, 2017.
Not final until disposition of timely filed motion for rehearing.
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Nos. 3D17-1457, 3D17-1500 & 3D17-1527
Lower Tribunal No. 15-15825
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United Services Automobile Association, et al.,
Petitioners,
vs.
Law Offices of Herssein and Herssein, P.A., etc., et al.,
Respondents.
3D17-1457 & 3D17-1500: Writs of Certiorari to the Circuit Court for
Miami-Dade County, Beatrice Butchko, Judge.
3D17-1527: An Appeal from the Circuit Court for Miami-Dade County,
Beatrice Butchko, Judge.
Shutts & Bowen LLP, and Suzanne Y. Labrit (Tampa), Frank A. Zacherl
and Patrick G. Brugger; Law Offices of Charles M-P George, and Charles M-P
George; Wadsworth Law, LLP, and Christopher W. Wadsworth and Katya H.
Rehders, for petitioners.
Herssein Law Group, and Reuven Herssein; Beighley, Myrick, Udell &
Lynne, P.A., and Maury L. Udell, for respondents.
Before SUAREZ, LAGOA and SCALES, JJ.
SCALES, J.
United Services Automobile Association (“USAA”), the defendant/counter-
plaintiff below, and non-party the Wadsworth Huott, LLP law firm
(“Wadsworth”), each filed a certiorari petition with this Court seeking to quash
trial court discovery orders compelling petitioners to disclose information
protected by Florida’s attorney-client privilege. We consolidated the petitions, and
grant them both because, under the unique facts of this case, the implied waiver of
the privilege asserted by respondent, Law Offices of Herssein & Herssein, P.A.
(“Herssein”), is inapplicable.
FACTS AND RELEVANT BACKGROUND
In July 2008, USAA entered into a legal services contract with Herssein
whereby Herssein agreed to defend USAA, USAA’s affiliates and USAA’s
insureds. As relevant here, Herssein agreed to defend liability claims made against
homeowners insured by USAA.1
In 2011, a claimant sustained personal injuries when the claimant fell after
an encounter with dogs owned by Colleen Brennan, a USAA insured. The
claimant made a pre-suit demand for the $100,000 policy limit of Brennan’s
insurance policy. USAA accepted the demand and tendered its check for the
1While not relevant to the issues before us, we note that the agreement between
USAA and Herssein is memorialized by several documents, various extensions,
amendments, et cetera.
2
policy limits. Rather than cashing USAA’s settlement check, the claimant, in
March 2013, filed a personal injury action against Brennan and others in the Palm
Beach County Circuit Court (“Claimant’s Case”). Pursuant to the 2008 legal
services contract, USAA appointed Herssein to defend Brennan in Claimant’s
Case.
Herssein did not seek to enforce USAA’s settlement agreement with the
claimant; instead, in May 2013, Herssein withdrew the pre-suit policy limit tender.
During the course of the ensuing litigation, in October 2013, the claimant served
Brennan with a proposal for settlement, again offering to settle the claimant’s
claim for Brennan’s policy limits. Following Herssein’s advice, Brennan rejected
the claimant’s renewed policy-limit demand, and served the claimant with a
$65,000 counter-proposal for settlement, which the claimant rejected.
In August 2014, the trial court in Claimant’s Case entered a partial summary
judgment for the claimant, finding Brennan was strictly liable for the claimant’s
personal injuries. Sometime later, Brennan hired a separate lawyer, Stephen
Maher, who, on February 23, 2015, advised USAA in a letter that Brennan would
pursue a bad faith action against USAA, and a malpractice action against Herssein,
if Brennan was exposed to a judgment in Claimant’s Case in excess of Brennan’s
$100,000 policy limits. Noting the ensuing conflict of interest created by Mr.
3
Maher’s February 23, 2015 letter, Herssein immediately withdrew as Brennan’s
counsel in Claimant’s Case.
USAA then appointed Wadsworth to succeed Herssein in representing
Brennan in Claimant’s Case, which went to mediation on May 19, 2015. At the
mediation, USAA was represented by David Lichter, one of USAA’s in-house
lawyers, and outside bad faith counsel, Frank Zacherl. Wadsworth and Brennan’s
own private counsel, Fred Cunningham, also attended the mediation conference on
behalf of Brennan. Claimant’s Case was settled at this mediation for an amount in
excess of USAA’s policy limits.2 Claimant’s Case was dismissed on June 30,
2015.
Shortly after the mediation, settlement and dismissal of Claimant’s Case, on
July 1, 2015, USAA purported to terminate its legal services agreement with
Herssein, and, two weeks later, on July 13, 2015, Herssein brought the instant
lawsuit against USAA in the Miami-Dade Circuit Court. Herssein generally
alleges that USAA violated its legal services agreement with Herssein by, inter
alia, failing to appoint Herssein to a sufficient number of PIP defense cases.
Herssein’s lawsuit seeks in excess of $20,000,000 in damages.
2 The settlement amount is confidential.
4
In February 2017, USAA filed a counterclaim against Herssein alleging, in
one of the counterclaim’s five counts, that USAA suffered damages as a result of
Herssein’s allegedly negligent handling of Claimant’s Case. On March 7, 2017,
Herssein propounded interrogatories on USAA regarding USAA’s malpractice
claim involving Claimant’s Case, including the following interrogatory relevant
here:
INTERROGATORY NO. 15. Whose advice did USAA take to
settle [Claimaint’s Case] and pay over the insured’s policy limits, if
that is what occurred?
USAA objected to this interrogatory based on the attorney-client privilege, and
Herssein moved to compel USAA to answer the interrogatory. The trial court held
a hearing on Herssein’s motion on May 23, 2017, and entered an order compelling
USAA to answer the interrogatory.
On March 27, 2017, Herssein served Wadsworth with a non-party subpoena
seeking information related to Wadsworth’s representation of Brennan in
Claimant’s Case. The subpoena sought the following documents:
1. Any and all correspondence, emails, notes, documents, or
electronic version of any correspondence, emails, notes, letters,
documents by or between any person including you or your firm
and any person or party involved [in Claimant’s Case], including
USAA, of any kind.
2. Any emails, notes, letters, documents or electronic version of any
correspondence, emails, notes, letters, document[s] regarding
Herssein Law Group or Reuven Herssein from January 2015 to
date.
5
Wadsworth objected to the subpoena based on the attorney-client privilege and, on
May 30, 2017, the trial court entered an order requiring Wadsworth to produce the
documents to the court for an in camera inspection.3, 4
USAA seeks certiorari review of the trial court’s May 23, 2017 order, and
Wadsworth seeks certiorari review of the trial court’s May 30, 2017 order. We
consolidated the two petitions and grant same.
STANDARD OF REVIEW
“Certiorari review extends to discovery orders which depart from the
essential requirements of law, cause material injury to a petitioner throughout the
remainder of the proceedings, and effectively leave no adequate remedy on
appeal.” Coyne v. Schwartz, Gold, Cohen, Zakarin & Kotler, P.A., 715 So. 2d
1021, 1022 (Fla. 4th DCA 1998). “Orders compelling production of matters
claimed to be protected by the attorney-client privilege . . . present the required
potential for irreparable harm.” Id.ANALYSIS
1. Florida’s Attorney-Client Privilege and the “Malpractice Exception”
3 The hearing transcripts reflect that the trial court had already determined that the
requested communications were not privileged, but ordered the in camera
inspection to prevent the disclosure of irrelevant material.
4The trial court’s order expressly states that Wadsworth is not required to produce
any communications between Wadsworth and Brennan.
6
Florida’s attorney-client privilege is codified in section 90.502(2) of the
Florida Statutes (2017), which provides that “[a] client has a privilege to refuse to
disclose, and to prevent any other person from disclosing, the contents of
confidential communications when such other person learned of the
communications because they were made in the rendition of legal services to the
client.” A “communication” between a lawyer and a client is “confidential” if the
communication is not intended to be disclosed to third persons. See §
90.502(1)(c), Fla. Stat. (2017).
The “malpractice exception” to the privilege is codified in section
90.502(4)(c), which provides that “[t]here is no lawyer-client privilege . . . when . .
. [a] communication is relevant to an issue of breach of duty by the lawyer to the
client or by the client to the lawyer, arising from the lawyer-client relationship.”
2. USAA’s Petition – Case Number 3D17-1457
At first blush, it may seem that Herssein’s interrogatory seeks only the
identity of a USAA lawyer, rather than any confidential communication between
USAA and its lawyer. Generally, such identity information is not protected by the
attorney-client privilege. See Coffey-Garcia v. S. Miami Hosp., Inc., 194 So. 3d
533, 537-38 (Fla. 3d DCA 2016) (recognizing that because the lawyer-client
privilege set forth in section 90.502 “protects only communications to and from a
lawyer,” the plaintiff in a malpractice action could be compelled to answer
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deposition questions regarding “the names of the attorneys whom she consulted
with” in pursuing her claim). After all, who attended the mediation conference in
Claimant’s Case on behalf of USAA is certainly no secret to the parties; and, that
USAA settled Claimant’s Case is no secret either. But, the wording of the
interrogatory seeks the identity of the lawyer who advised USAA to settle the case
at the mediation. There is no practical difference, then, between this interrogatory
question and asking USAA to divulge the content of the legal advice each attorney
attending the mediation provided to USAA. Plainly, then, the subject interrogatory
seeks confidential communications between USAA and its lawyers and is
protected by the attorney-client privilege. See id. at 538-39 (finding that while the
plaintiff could be compelled to reveal “the names of the attorneys whom she
consulted with” in pursuing a medical malpractice claim, “the reasons why she
sought out legal counsel and any subsequent counsel” was protected by the
attorney-client privilege).
The trial court concluded, however, that the “malpractice exception” to the
privilege applies to the subject communications and ordered USAA to answer the
interrogatory. We find the trial court erred for the following reasons. The trial
court determined that Herssein was entitled to know who advised USAA to settle
Claimant’s Case for an amount in excess of policy limits at mediation – if that was,
in fact, what happened – as USAA claimed that Herssein committed malpractice
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by advising Brennan against settling Claimant’s Case for policy limits. The trial
court explained: “I can’t see how [Herssein can] defend the malpractice case
without this information.”
Nevertheless, while the contents of the confidential communications
between USAA and its mediation counsel may have some relevancy regarding
whether Herssein’s settlement advice breached a legal duty owed to USAA and its
insured5, we are persuaded by our sister court’s rationale that the “malpractice
exception” applies only to communications between the client and the lawyer
being sued. See Coyne, 715 So. 2d at 1022-23. Just as the Fourth District did in
Coyne, we decline to extend the “malpractice exception” to compel a lawyer’s
former client to disclose confidential communications with that client’s other
lawyers simply because such information may be relevant to the former lawyer’s
defense of the client’s malpractice case against the lawyer. Id. at 1023; see also
Coates v. Akerman, Senterfitt & Eidson, P.A., 940 So. 2d 504, 509 (Fla. 2d DCA
2006) (citing Coyne, stating “[t]he possibility that the disputed documents may be
relevant to or may assist the lawyers in their defense or in their third-party claims,
or may perhaps assist in the lawyer’s efforts to impeach the clients, does not create
a waiver of the privilege”).
5Because we find the “malpractice exception” inapplicable in this case, we express
no opinion on the relevancy of such communications.
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We, therefore, grant USAA’s petition, and quash the trial court’s May 23,
2017 order requiring USAA to answer interrogatory 15.
3. Wadsworth’s Petition – Case Number 3D17-15006
As mentioned above, USAA appointed Wadsworth to represent Brennan
when Herssein withdrew from representing Brennan in Claimant’s Case. After
USAA sued Herssein for Herssein’s alleged malpractice in representing Brennan,
Herssein served Wadsworth with a non-party subpoena seeking communications
regarding Wadsworth’s representation of Brennan in Claimant’s Case. Again,
relying on the “malpractice exception,” the trial court overruled Wadsworth’s
objections and compelled Wadsworth to produce the documents – except for any
6 Because Wadsworth is a non-party to the lawsuit between USAA and Herssein,
the trial court’s May 30, 2017 order compelling Wadsworth to respond to
Herssein’s non-party subpoena is, indeed, a final order as to Wadsworth. See Fla.
House of Representatives v. Expedia, Inc., 85 So. 3d 517, 520 (Fla. 1st DCA 2012)
(finding that an order compelling discovery by third parties was final because it
“adjudicates the legal rights of nonparties and because it otherwise meets the
general test of finality”). Hence, in addition to filing the instant petition for writ of
certiorari, Wadsworth also filed an appeal of the trial court’s order. We assigned
case number 3D17-1527 to this appeal. See Fla. R. App. P. 9.030(b)(1)(A); Office
of the Public Defender v. Lakicevic, 215 So. 3d 112 (Fla. 3d DCA 2017) (treating
an order denying the public defender’s motion for a protective order from a third-
party subpoena duces tecum for deposition as a final order reviewable on appeal,
rather than via a petition for writ of certiorari). We consolidated Wadsworth’s
appeal with the two petitions, and, because we are quashing the subject order, we
dismiss, as moot, Wadsworth’s appeal in case number 3D17-1527. We need not,
and therefore do not, reach the perplexing issue of whether it is a better practice for
a non-party to seek appellate, rather than certiorari, review of a final discovery
order.
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communications between Wadsworth and Brennan – for an in camera inspection
by the trial court.
As we did with USAA’s petition, we find here that the “malpractice
exception” is applicable only to communications between the client and the lawyer
being sued for malpractice. See Coyne, 715 So. 2d at 1022-23. The “malpractice
exception,” therefore, is inapplicable to communications between USAA and
Wadsworth.
Interestingly, though, Herssein suggests that Wadsworth and USAA did not
have an attorney-client relationship. Herssein argues that Wadsworth’s actual
client in Claimant’s Case was not USAA, but rather, only Brennan. Herssein
additionally argues that once Brennan’s private counsel, Mr. Maher, notified
USAA of Brennan’s intention to sue USAA for bad faith on February 23, 2015,
USAA and Brennan’s interests were no longer aligned so that any imputed
attorney-client relationship between USAA and Wadsworth was destroyed.
Therefore, Herssein argues, any communications between Wadsworth and USAA
are not protected by the attorney-client privilege.
These arguments are unpersuasive. While the insured is the attorney’s client
when an attorney is hired by an insurance company to represent an insured in a
liability case,7 it is well settled that communications between an insurer and the
7 see Marlin v. State Farm Auto. Ins. Co., 761 So. 2d 380, 381(Fla. 4th DCA 2000)
(holding that where the insurer retains an attorney to represent the insured pursuant
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lawyer hired by the insurer to protect the insured’s interests are protected by the
attorney-client privilege because the insurer and insured share a common interest
in the outcome of the case. See Liberty Mut. Fire Ins. Co. v. Kaufman, 885 So. 2d
905, 908 (Fla. 3d DCA 2004) (“[W]hen an insurer accepts the defense obligations
of its insured, certain interests of the insured and the insurer essentially merge.”).
Similarly, an insurer’s fiduciary obligation to its insured, and the common interests
of the insured and insurer, continue even after the insured notifies the insurer of a
potential bad faith claim. See id. at 908, 909 (stating that “a liability insurer has a
continuing duty to use the degree of care and diligence a person would exercise in
the management of his or own business when it undertakes to defend it insured,”
finding that where “‘[t]he relationship between [the parties] evolved from fiduciary
to adversarial, or a combination of the two, with no clear line of demarcation
separating them,’” that the attorney-client privilege still applied (quoting Fla.
Sheriff’s Self-Insurance Fund v. Escambia Cty., 585 So. 2d 461, 463 (Fla. 1st DCA
1991))); Cone v. Culverhouse, 687 So. 2d 888, 893 (Fla. 2d DCA 1997)
(recognizing “that ‘common interest’ can exist, even if some conflict is present or
stands between the clients”).
Indeed, notwithstanding Mr. Maher’s February 23, 2105 bad faith letter to
USAA, at all times relevant, the interests of both USAA and Brennan were
to an insurance policy, the attorney “acts in the capacity of an independent
contractor” for the insured)
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common and aligned in defending against Claimant’s Case. Thus, the confidential
communications between USAA and Wadsworth remain protected by the attorney-
client privilege from discovery by Herssein. See Progressive Express Ins. Co. v.
Scoma, 975 So. 2d 461, 467 (Fla. 2d DCA 2007) (“[T]he confidential
communications between the insured, the insurer, and any counsel representing
them regarding the matter of common interest are protected by the attorney-client
privilege from discovery by third parties.”).
We, therefore, grant Wadsworth’s petition, and quash the trial court’s May
30, 2017 order.
CONCLUSION
In sum, USAA’s communications with both of its own lawyers, and with
Wadsworth, the lawyer USAA hired to represent Brennan, are protected by the
attorney-client privilege, and, given this case’s unique situation, the “malpractice
exception” is inapplicable to those communications.
We grant both petitions, quash the challenged orders, and dismiss as moot,
Wadsworth’s appeal.
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