Elawyers Elawyers
Washington| Change

KAWAHARA v. KENNEDY, 3:14-cv-00012-MMD-WGC (2014)

Court: District Court, D. Nevada Number: infdco20141121e20 Visitors: 13
Filed: Nov. 19, 2014
Latest Update: Nov. 19, 2014
Summary: ORDER WILLIAM G. COBB, Magistrate Judge. Before the court is the parties' Stipulated Motion to Determine Waiver of Attorney-Client Privilege, Duty of Confidentiality, and Work Product Privilege or that Such Privileges and Duties do not Apply. (Doc. # 39.) 1 I. BACKGROUND On January 7, 2014, Plaintiffs filed their Complaint for Fraud and Conspiracy to Defraud. (Doc. # 1.) They filed an Amended Complaint on January 22, 2014. (Doc. # 6.) Plaintiffs allege that in 2009, they agreed to loan th
More

ORDER

WILLIAM G. COBB, Magistrate Judge.

Before the court is the parties' Stipulated Motion to Determine Waiver of Attorney-Client Privilege, Duty of Confidentiality, and Work Product Privilege or that Such Privileges and Duties do not Apply. (Doc. # 39.)1

I. BACKGROUND

On January 7, 2014, Plaintiffs filed their Complaint for Fraud and Conspiracy to Defraud. (Doc. # 1.) They filed an Amended Complaint on January 22, 2014. (Doc. # 6.) Plaintiffs allege that in 2009, they agreed to loan their longtime, close personal friends, Wayne and Gail Allison (the Allisons) $400,000 in exchange for the Allisons' agreement to execute a promissory note secured by a third deed of trust on their residence. According to Plaintiffs, the Allisons were represented in the transaction by Mr. Kennedy of the law firm Jones Vargas. They contend that around the same time they finalized the documents on their loan to the Allisons, and unbeknownst to them, Mr. Kennedy was representing the Allisons in negotiations for another loan in excessive of one million dollars from Robert Steve Hardy, Trustee of the Hardy Community Trust, under Trust Adopted February 1, 1999 (Hardy). Plaintiffs aver that the Allisons, with knowledge of Mr. Kennedy, also promised Hardy a third deed of trust to secure his loan in the amount of $1,270,000. Despite the Allisons' assurances to Plaintiffs that their deed of trust had been recorded, it was not recorded until mid-February 2011, after the Hardy deed of trust was recorded in third position, placing their deed of trust in fourth position. Plaintiffs' contend that the Allisons instructed Mr. Kennedy not to record their deed of trust until after the Hardy loan funded and the Hardy deed of trust was recorded, and Mr. Kennedy complied, to Plaintiffs' detriment.

The Allisons and their automotive dealership subsequently filed for Chapter 7 bankruptcy protection in November 2011, and Plaintiffs learned in March 2012 that their deed of trust was not in third position, and in fact was behind the Hardy deed of trust. The sale of the property was approved by the bankruptcy court in April 2012 which generated enough proceeds to pay the costs of sale and holders of the notes secured by the first three deeds of trust (through the Hardy deed of trust, but not Plaintiffs). (Id.) There were additional sales proceeds in the amount of just over $500,000 to which both the Nevada Department of Taxation and Plaintiffs laid claim, and which they are still litigating. (Id.)

Plaintiffs assert claims for intentional misrepresentation, intentional concealment, negligent misrepresentation, accessory liability, conspiracy, aiding and abetting, acting in concert, breach of contract, professional negligence, and consumer fraud.

Defendants have filed a motion to dismiss, which is fully briefed and remains pending. (Doc. # 13.) A scheduling order was entered on June 30, 2014. (Doc. # 37.)

II. INSTANT MOTION

On November 17, 2014, the parties filed the instant motion. (Doc. # 39.) The parties request that the court enter an order determining that the Allisons have waived the attorney-client privilege, the duty of confidentiality, and the work-product privilege as it relates to their prior representation by Mr. Kennedy and Jones Vargas. In the alternative, they ask that the court enter an order confirming the attorney-client privilege, the duty of confidentiality, and the work-product privilege do not preclude Mr. Kennedy and Jones Vargas from disclosing otherwise privileged or confidential information because they must be able to defend themselves against the allegations raised by the Plaintiffs.

The parties assert that many of Plaintiffs' allegations are based upon a deposition of Wayne Allison taken as part of Plaintiffs' litigation with the State of Nevada Department of Taxation, an adversary proceeding in the Allisons' bankruptcy proceeding. (Id. at 2-3.) In that deposition, Mr. Allison was asked by Plaintiffs' attorney in that action about communications he had with Mr. Kennedy regarding their note and deed of trust. (Id. at 3.) Mr. Allison was asked whether in answering the questions he was knowingly willing to waive the attorney-client privilege. (Id.) Mr. Allison unequivocally answered that he understood the attorney-client privilege between himself and Mr. Kennedy and that agreed to waive the privilege and answer the question. (Id.) Mr. Allison went on to answer questions about his communications with respect to Plaintiffs' loan as well as the Hardy loan. (Id. at 3-4.) Mrs. Allison was also present at the deposition, and neither invoked the privilege nor instructed her husband not to answer questions posed during the deposition. (Id. at 4.)

Plaintiffs' counsel in this action communicated with Mr. Allison in an effort to get him to confirm his prior waiver of the attorney-client privilege, work product privilege, and duty of confidentiality in writing. (Id.) The Allisons initially agreed that they would do so, but Plaintiffs' counsel represents that when they were presented with the proposed confirmation, they refused to execute the document. (Id.)

Defendants contend that in order to defend against Plaintiffs' allegations, they will be required to disclose otherwise privileged information relative to their representations of the Allisons regarding Plaintiffs' loan and the Hardy loan (Defendants dispute that they represented the Allisons with respect to the Hardy loan). As such, the parties to this litigation have filed this motion asking the court to confirm that the Allisons have waived the applicable privileges and duty of confidentiality, and that Defendants may disclose information reasonably necessary to defend against Plaintiffs' allegations. (Id. at 7.)

III. CONCLUSION

While the court is inclined to agree generally with the parties that the Allisons' waived the applicable privileges and duty of confidentiality with respect to communications made to Mr. Kennedy regarding Plaintiffs' loan and the Hardy loan, there is no active dispute before the court to determine. The parties have not proffered an identifiable communication which they intend to utilize to prosecute or defend their respective claims or defenses. Without referring to a specific communication or information that they intend to utilize in connection with a motion, or at trial, the court cannot rule as to the scope of any waiver. Moreover, the parties appear to be in agreement that the Allisons' waived the applicable privileges and duty of confidentiality. The parties are essentially asking the court for legal advice as to whether they should offer communications between Mr. Kennedy and the Allisons in support of their claims or defenses, in view of potential ramifications of their decision vis a vis the Allisons (given that they refused to confirm the waiver in writing). They are, in effect, improperly asking the court to issue what amounts to an advisory opinion on this issue. Accordingly, the parties' stipulated motion (Doc. # 39) is DENIED.

IT IS SO ORDERED.

FootNotes


1. Refers to court's docket number.
Source:  Leagle

Can't find what you're looking for?

Post a free question on our public forum.
Ask a Question
Search for lawyers by practice areas.
Find a Lawyer