Smith v. Technology House, Ltd.

[Cite as Smith v. Technology House, Ltd., 2019-Ohio-2670.]
IN THE COURT OF APPEALS
ELEVENTH APPELLATE DISTRICT
PORTAGE COUNTY, OHIO
BRANDY SMITH, : OPINION
Plaintiff-Appellee, :
CASE NO. 2018-P-0080
- vs - :
THE TECHNOLOGY HOUSE, LTD., et al., :
Defendants-Appellants. :
Civil Appeal from the Portage County Court of Common Pleas, Case No. 2018 CV
00072.
Judgment: Affirmed in part, reversed in part, and remanded.
Jeffrey J. Moyle and Christopher James Lalak, 614 West Superior Avenue, Suite 1148,
Cleveland, OH 44113 (For Plaintiff-Appellee).
James O’Connor and Brian D. Sullivan, Reminger Co., L.P.A., 101 West Prospect
Avenue, Suite 1400, Cleveland, OH 44115 (For Defendants-Appellants).
MATT LYNCH, J.
{¶1} Defendants-appellants, The Technology House, Ltd. and Bud S. Gear,
appeal the Portage County Court of Common Pleas’ October 11, 2018 Order Granting
Plaintiff’s Motion to Compel. For the following reasons, we affirm in part, reverse in
part, and remand for further proceedings consistent with this opinion.
{¶2} On January 23, 2018, plaintiff-appellee, Brandy Smith, filed a Complaint in
the Portage County Court of Common Pleas, against Technology House and Gear, and,
on April 9, 2018, a First Amended Complaint raising claims of Sexual Harassment
(Count I), Race Discrimination (Count II), and Retaliation (Count III) pursuant to R.C.
Chapter 4112.
{¶3} On April 20, 2018, Technology House and Gear filed their Answer to the
First Amended Complaint.
{¶4} On July 30, 2018, Smith filed a Motion to Compel, seeking an order to
compel Technology House and Gear to produce the following: “[a] recording of
Defendants’ counsel’s interview of Plaintiff regarding her claims of harassment and
discrimination”; “[r]ecordings of interviews taken by Defendants’ counsel with Plaintiff’s
non supervisory co-workers”; “[d]ocuments related to the interview of Plaintiff and the
interviews of her co-workers, including any notes taken in connection with [the] same”;
“corrected discovery responses to identify Defendants’ counsel as [sic] participants in
Defendants’ investigation of Plaintiff’s claims”; and “[n]et worth regarding Defendants so
that punitive damages information may be calculated in accordance with R.C. §
2315.21.”
{¶5} In support of the Motion, an affidavit sworn to by Smith was submitted to
the court, which stated in relevant part:
3. While I was working at Defendant Technology House,
Defendant Bud Gear approached me and asked me to “have sex in
the back,” asked me if he could grab my breasts, and would
frequently tell me that I was “juicy” and that I “had a nice ass.”
4. On October 30, 2018, I reported Mr. Gear’s inappropriate
behavior to Nichole Gear (Mr. Gear’s daughter), who served as
Technology House’s Human Resources Manager.
5. On October 31, 2018, Ms. Gear approached me to inform
me that a meeting would be conducted regarding my complaints.
6. Ms. Gear escorted me to the meeting room. Defendants’
counsel Adrian Thompson was present, as was Technology House
employee Tracy Brent (who is also Mr. Gear’s daughter).
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7. I excused myself to contact my attorney.
8. I returned to the meeting and informed Mr. Thompson that I
was represented by the law firm of Nilges Draher LLC.
9. Mr. Thompson continued questioning me after I informed
him I was represented.
10. I believe the interview lasted for approximately one hour on
the morning of October 31, 2017, ending at approximately 10 a.m.
11. Mr. Thompson interviewed other non-supervisory employees
in connection with the investigation of my complaints, and that Mr.
Thompson recorded these conversations as well.
12. I have not been provided with a copy of the recordings of
those interviews.
{¶6} On September 17, 2018, Technology House and Gear filed a Brief in
Opposition to Plaintiff’s Motion to Compel and Motion for Protective Order. In support of
the Brief and Motion, an affidavit sworn to by Nichole Gear was submitted to the court,
which stated in relevant part:
4. On 10/30/17, Plaintiff Brandy Smith made a complaint to The
Technology House alleging that she had experienced sexual
harassment.
5. On 10/30/17, on behalf of The Technology House, I retained
outside counsel, attorney Adrian D. Thompson of the law firm of
Taft Stettinius & Hollister, LLP, with respect to the claims made by
Plaintiff Brandy Smith that she had experienced sexual harassment
at work.
6. I retained Mr. Thompson to conduct a factual investigation
and to provide legal advice, in part, because of the prospect of
litigation given the nature of the claims made by Plaintiff Brandy
Smith.
7. At the time I retained Mr. Thompson, I believed that, given
the nature of the claims made by Plaintiff Brandy Smith, there was
the prospect of a lawsuit being filed.
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8. On 10/31/17, Mr. Thompson conducted an investigation,
which included several conversations and interviews with
management and hourly employees.
***
10. All conversations, interviews, memorandum, and legal
advice related to Mr. Thompson’s Investigation have been held
strictly confidential by The Technology House.
{¶7} On October 9, 2018, Smith filed a Reply Brief in Support of the Motion to
Compel and in Opposition to the Motion for Protective Order.
{¶8} On October 11, 2018, the trial court issued an Order Granting Plaintiff’s
Motion to Compel. Pursuant to Civil Rule 37, the court ordered Technology House and
Gear to produce: “all recordings and documents related to defendants’ investigation of
plaintiff’s complaints prior to her termination, including but not limited to recordings of
plaintiff and her co-workers”; “all documents requested in plaintiff’s requests for
documents regarding defendants’ net worth”; and “corrected discovery responses fully
responsive to plaintiff’s interrogatories * * * identify[ing] all individuals who participated in
the investigation of plaintiff’s complaints, and * * * respond[ing] fully to plaintiff’s
interrogatories regarding defendants’ net worth.”
{¶9} On October 18, 2018, Technology House and Gear filed a Notice of
Appeal. On appeal, they raise the following assignments of error:
{¶10} “[1.] The trial court incorrectly compelled Technology House to produce
privileged information including recordings and documents related to its attorney’s
investigation of Ms. Smith’s sexual harassment complaints.”
{¶11} “[2.] The trial court incorrectly compelled Technology House to produce
documents regarding Technology House’s net worth.”
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{¶12} “[3.] The trial court erred in failing to conduct an in camera review of the
compelled discovery.”
{¶13} Under the first assignment of error, Technology House and Gear argue
that the recordings, documents, notes, correspondence, and legal advice generated by
the investigation conducted by counsel into Smith’s allegations of sexual harassment
are protected by the attorney-client privilege and work-product doctrine.
{¶14} “In general, discovery orders are reviewed under an abuse-of-discretion
standard.” Med. Mut. of Ohio v. Schlotterer, 122 Ohio St. 3d 181, 2009-Ohio-2496, 909
N.E.2d 1237, ¶ 13; Mauzy v. Kelly Servs., Inc., 75 Ohio St. 3d 578, 592, 664 N.E.2d
1272 (1996). When the discovery of confidential or privileged information is at issue,
however, the reviewing court applies a de novo standard. Roe v. Planned Parenthood
Southwest Ohio Region, 122 Ohio St. 3d 399, 2009-Ohio-2973, 912 N.E.2d 61, ¶ 29;
Schlotterer at ¶ 13.
{¶15} “It is well-settled that the burden of showing that testimony sought to be
excluded under the doctrine of privileged attorney-client communications rests upon the
party seeking to exclude it.” Waldmann v. Waldmann, 48 Ohio St. 2d 176, 178, 358
N.E.2d 521 (1976); Moskovitz v. Mt. Sinai Med. Ctr., 69 Ohio St. 3d 638, 660-661, 635
N.E.2d 331 (1994) (“the mere relation of attorney and client does not raise a
presumption of confidentiality of all communications made between them”).
{¶16} In general, “[p]arties may obtain discovery regarding any matter, not
privileged, which is relevant to the subject matter involved in the pending action.” Civ.R.
26(B).
{¶17} “In Ohio, the attorney-client privilege is governed by statute, R.C.
2317.02(A), and in cases that are not addressed in R.C. 2317.02(A), by common law.”
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State ex rel. Leslie v. Ohio Hous. Fin. Agency, 105 Ohio St. 3d 261, 2005-Ohio-1508,
824 N.E.2d 990, ¶ 18. The statute provides in relevant part that an attorney “shall not
testify in certain respects * * * concerning a communication made to the attorney by a
client in that relation or concerning the attorney’s advice to a client” unless “the client
voluntarily reveals the substance of attorney-client communications in a nonprivileged
context.” R.C. 2317.02(A)(1). The common-law attorney-client privilege “reaches far
beyond [the] proscription against testimonial speech” afforded by the statute and
“protects against any dissemination of information obtained in the confidential
relationship.” (Citation omitted.) Leslie at ¶ 26.
{¶18} The work-product doctrine “provides a qualified privilege protecting the
attorney’s mental processes in preparation of litigation” and, “as it applies in civil cases
in Ohio,” is described by Civil Rule 26(B)(3). Squire, Sanders & Dempsey, L.L.P. v.
Givaudan Flavors Corp., 127 Ohio St. 3d 161, 2010-Ohio-4469, 937 N.E.2d 533, ¶ 55-
56. “[A] party may obtain discovery of documents, electronically stored information and
tangible things prepared in anticipation of litigation or for trial by or for another party or
by or for that other party’s representative (including his attorney * * *) only upon a
showing of good cause therefor.” Civ.R. 26(B)(3).
{¶19} Technology House and Gear’s claims that their investigation into Smith’s
allegations is protected by the attorney-client privilege and work-product doctrine rely
heavily on the Ohio Supreme Court’s decision in State ex rel. Toledo Blade Co. v.
Toledo-Lucas Cty. Port Auth., 121 Ohio St. 3d 537, 2009-Ohio-1767, 905 N.E.2d 1221.
{¶20} Toledo Blade was “an original action for a writ of mandamus to compel a
port authority to provide access to both an investigative report prepared by a law firm on
behalf of the port authority and the associated documentation reviewed by the attorneys
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to prepare the report.” Id. at ¶ 1. The subject of the investigation was wrongdoing by
an administrator. The port authority of its own accord produced “all Port Authority
documents which the attorney reviewed and considered in connection with the
underlying investigation, including resolutions, contracts, invoices, financial records,
correspondence, and * * * e-mails.” Id. at ¶ 15. The port authority refused to produce
the investigative report itself, asserting the attorney-client privilege. The relator
countered that “the factual portions of the investigative report are not covered by the
attorney-client privilege, because they do not constitute legal advice.” Id. at ¶ 23.
{¶21} The supreme court rejected the relator’s position, recognizing that “most
courts that have expressly addressed the issue of whether an attorney’s factual
investigations are covered by the attorney-client privilege have determined that such
investigations may be privileged.” Id. at ¶ 25. The attorney-client privilege “does not
require the communication to contain purely legal analysis or advice to be privileged.
Instead, if a communication between a lawyer and client would facilitate the rendition of
legal services or advice, the communication is privileged.” (Citation omitted.) Id. at ¶
27; Leslie, 105 Ohio St. 3d 261, 2005-Ohio-1508, 824 N.E.2d 990, at ¶ 29 (“[t]he
privilege applies when legal advice of any kind is sought from the legal advisor in that
capacity and the client’s confidential communication relates to that purpose”); also State
ex rel. Lanham v. DeWine, 135 Ohio St. 3d 191, 2013-Ohio-199, 985 N.E.2d 467, ¶ 30
(reaffirming Toledo Blade’s holding that “an attorney’s factual investigation, if incident to
or related to any legal advice that the attorney would give on a particular issue, is
covered by the privilege”).
{¶22} Considered in light of this holding, the trial court’s order that Technology
House and Gear produce “all recordings and documents related to defendants’
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investigation of plaintiff’s complaints prior to her termination, including but not limited to
recordings of plaintiff and her co-workers” includes material covered by the attorney-
client privilege. As asserted in Nichole Gear’s affidavit, Technology House retained
Attorney Thompson after Smith made allegations of sexual harassment to conduct a
factual investigation and render legal advice.
{¶23} It cannot be said, however, that “all recordings and documents related to
defendants’ investigation” are privileged. The scope of the privilege must be considered
in relation to its underlying purpose. “The main purpose behind the attorney-client
privilege is to promote ‘“full and frank communication between attorneys and their
clients and thereby promote broader public interests in the observance of law and the
administration of justice.”’” (Citations omitted.) Burnham v. Cleveland Clinic, 151 Ohio
St.3d 356, 2016-Ohio-8000, 89 N.E.3d 536, ¶ 16; Moskovitz, 69 Ohio St. 3d at 660, 635
N.E.2d 331 (“[i]n the modern law, the privilege is founded on the premise that
confidences shared in the attorney-client relationship are to remain confidential”).
{¶24} Documents and records whose existence preceded a factual investigation
or were created independent of such investigation, i.e., independent of any
communication between attorney and client, would not be protected by the attorney-
client privilege.
In order for a document to constitute a privileged communication, it
is essential that it be brought into being primarily as a
communication to the attorney.
Professor Wigmore says: ‘* * * A document of the client existing
before it was communicated to the attorney is not within the present
privilege so as to be exempt from production. But a document
which has come into existence as a communication to the attorney,
being itself a communication, is within the present privilege.
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In re Klemann, 132 Ohio St. 187, 192, 5 N.E.2d 492 (1936); Nageotte v. Boston Mills
Brandywine Ski Resort, 9th Dist. Summit No. 26563, 2012-Ohio-6102, ¶ 11-12; Fisher v.
United States, 425 U.S. 391, 403-404, 96 S. Ct. 1569, 48 L. Ed. 2d 39 (1976) (“pre-
existing documents which could have been obtained by court process from the client
when he was in possession may also be obtained from the attorney by similar process
following transfer by the client in order to obtain more informed legal advice”).
{¶25} Also, the identity of persons who participated in the investigation is not
covered by the privilege. Pales v. Fedor, 2018-Ohio-2056, 113 N.E.3d 1019, ¶ 26 (8th
Dist.) (“the fact of consultation and the general nature of the work performed by the
attorney are not usually protected by the privilege”); State v. Hoop, 134 Ohio App. 3d
627, 640, 731 N.E.2d 1177 (12th Dist.1999) (“[t]he identity of a witness is not protected
by the attorney-client privilege because witness identity does not belong to a particular
party”).
{¶26} Finally, the attorney-client privilege does not protect the recording of the
interview with Smith as this interview may not properly be said to have occurred within
the context of the attorney-client relationship. In the case of a corporate client, Ohio
cases have generally held that the privilege extends to communications between
counsel and employees of the corporate client. Leslie, 105 Ohio St. 3d 261, 2005-Ohio-
1508, 824 N.E.2d 990, at ¶ 22; MA Equip. Leasing I, L.L.C. v. Tilton, 2012-Ohio-4668,
980 N.E.2d 1072, ¶ 24 (10th Dist.); Clapp v. Mueller Elec. Co., 162 Ohio App. 3d 810,
2005-Ohio-4410, 835 N.E.2d 757, ¶ 53 (8th Dist.); Bennett v. Roadway Express, Inc.,
9th Dist. Summit No. 20317, 2001 WL 866261, *14-15. However, “[a]pplication of the
attorney-client privilege in the corporate context must be determined on a case-by-case
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basis.” MA Equip. Leasing at ¶ 24, citing Upjohn Co. v. United States, 449 U.S. 383,
396, 101 S. Ct. 677, 66 L. Ed. 2d 584 (1981).1
{¶27} In the present case, Technology House and Gear contend that “the
attorney-client privilege extends to all interviews undertaken by its attorney while
investigating Ms. Smith’s complaints, including the interview of Ms. Smith because she
was still employed by Technology House when questioned by the lawyer.” Appellants’
brief at 13. We disagree. While still an employee of Technology House at the time of
her interview, Technology House was already contemplating the prospect of future
litigation arising out of Smith’s complaints. Indeed, Nichole Gear frankly admitted that it
was the prospect of such litigation that prompted her to retain the services of Attorney
Thompson. Moreover, Smith had also retained her own counsel prior to the interview
and advised Attorney Thompson of her independent representation. In light of the
foregoing, Technology House could not reasonably expect that the substance of the
interview would have the character of a confidential communication between an
attorney and client which underlies the reason for the privilege. At the time of Smith’s
interview, a de facto adversarial relationship existed between the parties and, therefore,
the substance of that interview falls outside the scope of the privilege.
{¶28} Smith stresses that Attorney Thompson’s questioning of her apart from
her retained counsel was unethical. See Prof.Cond.R. 4.2 (“[i]n representing a client, a
lawyer shall not communicate about the subject of the representation with the person
the lawyer knows to be represented by another lawyer in the matter”). A violation of the
Rules of Professional Conduct does not, per se, bear on the confidential nature of a
1. Upjohn is cited by every Ohio case considering the issue of the attorney-client privilege in the
corporate context.
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particular communication and there is no indication that the trial court ordered
disclosure as some sort of discovery sanction. The fact that Smith had retained
independent representation is relevant to the nature of the communication as indicated
above.2
{¶29} What we have just written applies to the substance of the Smith interview.
Documents or materials recording Attorney Thompson’s assessment of the interview
would be protected work product. As will be discussed further below, a precise
determination as to which documents remain protected is not possible on appeal.
{¶30} Smith argues that any privilege attaching to the information and materials
associated with the investigation was “irrevocably waived by Appellants’ invocation of
the Faragher/Ellerth defense.” Appellee’s brief at 15.
{¶31} The Faragher/Ellerth defense is an affirmative defense to claims of sexual
harassment derived from the United States Supreme Court cases of Faragher v. Boca
Raton, 524 U.S. 775, 118 S. Ct. 2275, 141 L. Ed. 2d 662 (1998) and Burlington Indus.,
Inc. v. Ellerth, 524 U.S. 742, 118 S. Ct. 2257, 141 L. Ed. 2d 633 (1998). Under
Faragher/Ellerth, “an employer can mitigate or avoid liability by showing (1) that it
exercised reasonable care to prevent and promptly correct any harassing behavior and
(2) that the plaintiff unreasonably failed to take advantage of any preventive or
corrective opportunities that were provided.” (Citation omitted.) Diemer v. Minute Men,
Inc., 2018-Ohio-1290, 110 N.E.3d 152, ¶ 30 (8th Dist.). In the present case,
Technology House and Gear asserted the affirmative defense that “they exercised
2. We note a judge’s responsibility to perform the duties of the judicial office impartially, competently, and
diligently, and, in particular Rule 2.15 of the Ohio Code of Judicial Conduct (“[a] judge having knowledge
that a lawyer has committed a violation of the Ohio Rules of Professional Conduct that raises a question
regarding the lawyer’s honesty, trustworthiness, or fitness as a lawyer in other respects shall inform the
appropriate authority”).
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reasonable care to prevent and promptly correct any alleged sexually harassing
behavior, and that Plaintiff unreasonably failed to take advantage of any preventive or
corrective opportunities provided by defendants.”
{¶32} Although no Ohio court has adopted this position, it has been held in other
jurisdictions that the assertion of the Faragher/Ellerth defense effects a waiver of any
privilege attaching to a party’s investigation of the alleged harassment. “When an
employer puts the reasonableness of an internal investigation at issue by asserting the
Faragher/Ellerth defense, the employer waives any privilege that might otherwise apply
to documents concerning that investigation,” including “‘not only the [investigative]
report itself, but [ ] all documents, witness interviews, notes and memoranda created as
part of and in furtherance of the investigation.” (Citation omitted.) Koumoulis v.
Independent Fin. Marketing Group, Inc., 295 F.R.D. 28, 41 (E.D.N.Y.2013); Ambrose-
Frazier v. Herzing Inc., E.D.La. No. 15-1324, 2016 WL 890406, *5 (“[w]hen a Title VII
defendant affirmatively invokes a Faragher-Ellerth defense that is premised at least in
part on an internal investigation, the defendant waives the attorney-client privilege and
work-product doctrine for all documents created as part of that investigation”) (cases
cited).
{¶33} The issue of whether Technology House and Gear waived the privilege
attaching to Attorney Thompson’s investigation by asserting a Faragher/Ellerth defense
may be resolved by recourse to “[o]rdinary waiver principles” and the “animating maxim
that the privilege cannot ‘be used as both sword and shield.’” In re Itron, Inc., 883 F.3d
553, 558 (5th Cir.2018). That is: “when a party entitled to claim the attorney-client
privilege uses confidential information against his adversary (the sword), he implicitly
waives its use protectively (the shield) under that privilege.” (Citation omitted.) Id.
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Accordingly, courts do not find a waiver of privilege unless a party indicates its reliance
on a particular investigation in its assertion of the Faragher/Ellerth defense. The “clear
majority view” is that the defense must be “premised, in whole * * * or [in] part, on the
results of an * * * investigation.” (Emphasis added.) Angelone v. Xerox Corp.,
W.D.N.Y. No. 09-CV-6019, 2011 WL 4473534, *2; Robinson v. Vineyard Vines, LLC,
S.D.N.Y. No. 15 Civ. 4972, 2016 WL 845283, *6 (“if Defendants refer to or rely on the
Investigative Documents in asserting a Faragher/Ellerth defense in this litigation, then
Defendants will waive the privilege and will be required to immediately produce the
Investigative Documents”). “This holding aligns with the numerous cases across
jurisdictions finding waiver ‘when a client asserts reliance on an attorney’s advice as an
element of a claim or defense,’ * * * and the many dozens of cases finding no waiver
when no such reliance has occurred.” (Citation omitted.) Itron at 559 (cases cited).
{¶34} In the present case, Technology House and Gear’s assertion of the
Faragher/Ellerth defense does not acknowledge the existence of much less indicate
reliance upon Attorney Thompson’s investigation. The mere assertion that they
exercised “reasonable care to prevent and promptly correct any alleged sexually
harassing behavior” does not constitute a waiver of any privilege applicable to the
investigation.
{¶35} To the extent indicated above, the first assignment of error has merit
inasmuch as the trial court’s Order Granting the Motion to Compel requires the
production of clearly privileged material. Given the record before this court, however, it
is impossible to determine precisely which documents are privileged or protected by the
work-product doctrine.
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{¶36} Civil Rule 26 provides that, “[w]hen information subject to discovery is
withheld on a claim that it is privileged * * *, the claim shall be made expressly and shall
be supported by a description of the nature of the documents, communications, or
things not produced that is sufficient to enable the demanding party to contest the
claim.” Civ.R. 26(B)(6)(a). No such description of the documents is before this court.3
Without a descriptive itemization of the documents at issue, the applicability of the
attorney-client privilege or work-product doctrine to a particular document or
interrogatory is not possible.
{¶37} Upon remand, the trial court of necessity must either conduct an in
camera review of the compelled discovery to determine whether the attorney-client
privilege and work-product doctrine exempts them from discovery or require the
production of description of the documents sufficient to make such a determination,
noting that the following types of materials are not privileged: documents and records
whose existence preceded Attorney Thompson’s factual investigation or were created
independent of that investigation (supra at ¶ 24); the identity of persons who
participated in the investigation (supra at ¶ 25); and any recordings or transcripts of the
substance of the interview with Smith (supra at ¶ 26-28).
{¶38} To the extent indicated above, the first assignment of error is with merit.
{¶39} Under the second assignment of error, Technology House and Gear claim
that the trial court erred by compelling the discovery of evidence regarding their net
worth. They argue that evidence of net worth is only potentially relevant when the
3. The record indicates that a privilege log may exist, although it has not been filed with the court. In
Technology House and Gear’s Brief in Opposition to Motion to Compel and Motion for Protective Order, it
is asserted that, “upon request to undersigned counsel, a privilege log is being produced to Plaintiff
contemporaneously with the filing of this brief.” Whether the privilege log was actually produced is not
evidenced by the record. Smith makes no reference to such a log in her Reply Brief nor does the trial
court in its Order Granting the Motion to Compel.
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plaintiff makes a prima facie case for punitive damages. According to Technology
House and Gear, “Ms. Smith’s amended complaint is completely devoid of any
allegations to support a punitive damages claim.” Appellants’ brief at 22. Smith’s
Amended Complaint seeks “punitive damages in an amount in excess of $25,000 for
violations of Ohio Revised Code § 4112.02 and pursuant to Ohio Revised Code §
4112.99.”
{¶40} It is generally recognized in Ohio law that a party’s net worth is a relevant
consideration in determining the amount of an award of punitive damages. Wagner v.
McDaniels, 9 Ohio St. 3d 184, 459 N.E.2d 561 (1984), paragraph two of the syllabus
(“[e]vidence of a defendant’s net worth may be considered by the fact-finder in
determining appropriate punitive damages”); Svoboda v. Clear Channel
Communications, Inc., 6th Dist. Lucas No. L-02-1149, 2003-Ohio-6201, ¶ 23
(“[b]ecause net worth is relevant evidence in assessing a claim for punitive damages,
we find that the trial court did not abuse its discretion in ordering the discovery of the
salary and income information of Schaffer, Tischler, and LeFebvre”); R.C.
2315.21(D)(2)(b) (“[i]f the defendant is a small employer or individual, the court shall not
enter judgment for punitive or exemplary damages in excess of * * * ten percent of the
employer’s or individual’s net worth”).
{¶41} Discovery is generally permissible “regarding any matter * * * which is
relevant to the subject matter involved in the pending action.” Civ.R. 26(B)(1).
Technology House and Gear cite no authority for the proposition that a prima facie case
is necessary (or even how it is to be pled) before a party is entitled to discovery
regarding another party’s net worth. Tschantz v. Ferguson, 97 Ohio App. 3d 693, 716,
647 N.E.2d 507 (8th Dist.1994), cited by Technology House and Gear, stands for the
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proposition that, “though evidence of a party’s net worth is admissible to be considered
by a jury in assessing a punitive damages award, it is not required evidence,” and it is
not an abuse of discretion for a trial court to grant “a protective order in favor of [a party]
with regard to the furnishing of personal financial information.” Although the argument
was raised in Tschantz that the party seeking discovery “did not make out a prima facie
case of a legal right to punitive damages,” the court of appeals did not resolve that
issue. Id.; Svoboda at ¶ 21 (although “[t]he defendant had argued that Tschantz had
failed to demonstrate a prima facie case for punitive damages[,] * * * the Eighth
Appellate District simply held that the trial court did not abuse its discretion in granting a
protective order”).
{¶42} In the absence of any compelling reason not to allow the discovery
regarding Technology House and Gear’s net worth, we find no abuse of discretion in
ordering its discovery. However, the trial court is instructed on remand to enter a
protective order preventing Smith from divulging any information regarding Technology
House and Gear’s net worth to third parties without prior authorization from the court.
{¶43} The second assignment of error is without merit.
{¶44} In their third assignment of error, Technology House and Gear argue that
the trial court erred by not conducting “an in camera review to determine if a privilege
applies or if the information sought is relevant.” Appellants’ brief at 22. For the reasons
set forth under the first assignment of error, we agree that an in camera inspection of
the compelled discovery (or recourse to a descriptive itemization of the material) is
necessary to the applicability of the attorney-client privilege and work-product doctrine
(although, arguably, the fault for this lies with the parties rather than the court).
{¶45} The third assignment of error is with merit.
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{¶46} For the foregoing reasons, the Portage County Court of Common Pleas’
Order Granting Plaintiff’s Motion to Compel is affirmed in part and reversed in part and
this matter is remanded for further proceedings consistent with this opinion. Costs to be
taxed against the parties equally.
THOMAS R. WRIGHT, P.J.,
TIMOTHY P. CANNON, J.,
concur.
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