HILLMAN, District Judge.
Rebecca Urban ("Urban" or "Plaintiff"), has filed suit against the Federal Home Loan Mortgage Corporation ("FHLMC" or "Defendant"). Urban asserts claims for breach of contract, breach of the implied covenant of good faith and fair dealing and
In ruling on the parties' cross-motions for summary judgment, I noted that Attorney Thomas M. Dillon ("Attorney Dillon"), who is representing Urban in this case, had inserted himself into the proceedings as a percipient witness, thereby raising the specter of Attorney Dillon being required to withdraw from the case or being disqualified therefrom, in accordance with Rule 3.7 of the Massachusetts Rules of Professional Responsibility. Thereafter, FHLMC filed a motion to disqualify Attorney Dillon and his firm, Schmitt & Dillon, from serving as Urban's trial counsel. Attorney Dillon has agreed to withdraw from his representation as trial counsel and therefore, as to him the motion is allowed. For the reasons set forth below, the motion is denied as to Schmitt & Dillon. FHLMC also requests that the Court find that by raising certain claims in this action, Urban has waived the attorney-client privilege regarding her discussions with her counsel about title insurance. For the reasons set forth below, FHLMC's motion seeking a declaration of an "at issue" privilege waiver is allowed.
FHLMC is a publicly traded United States Corporation chartered by an Act of Congress, organized and existing under the Federal Home Loan Mortgage Corporation Act, 12 U.S.C. § 1451 et seq. FHLMC is currently operating under a conservatorship that began on September 6, 2008 and is conducting its business under the supervision of the Federal Housing Finance Agency. As part of its role in Massachusetts, FHLMC acquires titles to properties that served as collateral for defaulted mortgages and sells those properties. In most cases, the properties have been foreclosed on. On April 14, 2010, FHLMC acquired title to a property by foreclosure order located at George Hill Road, in Lancaster, Massachusetts (the "Property"). FHLMC listed the Property for sale. Urban made an offer to purchase the Property, which was accepted by FHLMC. Harmon Law Offices, P.C. ("Harmon Law") represents FHLMC in the acquisition of titles pursuant to the filing of a foreclosure order and subsequent sales of properties in Massachusetts.
FHLMC requires buyers purchasing homes from it to enter into a purchase and sale agreement and related addendums. Urban executed a Standard Form Purchase and Sale Agreement on September 24, 2010. See Statement of Undisp. Facts By Def. Fed. Home Loan Mtg. Corp. (Docket No. 57)("Def's Factual Statement"), at Ex F ("P & S"). Also included was the Addendum # 1 to Contract of Sale, which contained the following provisions:
See Def's Factual Statement, at Ex E ("Addendum"). Prior to closing on the Property, Urban, through her attorney,
Urban purchased her own title insurance policy and proceeded with the closing, which took place on December 20, 2010. The cost of the title policy was $680 and was listed on the HUD-1 Settlement Statement as charged to Urban. According to Urban's Hud-1 Settlement Statement, $476.00 of the $680.00 paid by Urban for title insurance, issued by the Commonwealth Land Title Insurance Company, was paid to Attorney Dillon's law firm, as a commission. On January 5, 2011, Urban renewed her request that FHLMC purchase the owner's title insurance policy for her. Harmon Law denied the request because of state ethics rules. On January 10, 2011, Urban served a Chapter 93A demand letter on FHLMC.
The parties filed cross-motions for summary judgment and in connection therewith, Urban filed Pl's Statement of Undisputed Material Facts (Docket No. 62). Urban accepted FHLMC's undisputed statement of material facts and "add[ed] the undisputed facts set forth in the Affidavit of Thomas Dillon. . . ." Id. Among the additional facts attested to by Attorney Dillon were the following:
Id., at Attachment (Affidavit of Thomas M. Dillon).
Attorney Dillon disputes that he is a necessary witness in this case and that none of the exceptions apply. Urban states that she does not press this dispute for the simple reason "that Attorney Dillon need not and will not act as trial counsel," and either she or FHLMC will be free to call him as a witness. I am disturbed by Attorney Dillon's failure to identify the obvious ethical implications when he filed his affidavit in connection with the summary judgment motion—not to mention his continued failure to appreciate an actual conflict that should be apparent to even the most neophyte practitioner. For that reason and given the cavalier tone of Urban's submission, I want to make clear that I do find that Attorney Dillon is a necessary witness in this case and that no exception applies and therefore, had he not conceded the point, I would have disqualified him as trial counsel.
Rule 3.7 of the Massachusetts Rules of Professional Responsibility provide that:
Mass. S.J.C. Rule 3:07.
Furthermore, the comment so Rule 3.7 provide:
Comments 1, 2 and 5 to Rule 3.7.
Rule 1.7 of the Massachusetts Rules of Professional Conduct provides, in relevant part:
Mass. S.J.C. Rule 1.7.
The comments to Rule 1.7, provide that a conflict is not in itself sufficient to preclude representation, however; the focus of the court must be on whether the lawyer's loyalty to the client is threatened. Additionally, there are some conflicts as to which a client cannot consent:
Comments 4 & 5 to Rule 1.7.
Massachusetts Rules of Professional Conduct 1.10 provides in relevant part:
Mass. S.J.C. Rule 1.10.
Read together, the applicable Massachusetts Rules of Professional Conduct allow the law firm of Schmitt & Dillon to continue representing Urban in this case, so long as she has consented after consultation and the lawyer reasonably believes that the representation will not be effected. It is clear from its submission that Schmitt & Dillon do not believe that their continued representation of Urban will be adversely effected by the fact that Attorney Dillon is a percipient witness in this case. At this time, I am willing to permit Attorney Schmitt to represent Urban at trial. However, as with the disqualification of Attorney Dillon as trial counsel, I am troubled by the firm's inability to recognize the conflicts which warrant Attorney Dillon's disqualification and the potential conflicts which may arise should Schmitt & Dillon continue to represent Urban—conflicts which could lead to the firm being disqualified at a later date. Given these potential conflicts, the Court will require that Urban file a signed affidavit on or before January 30, 2015 stating that Attorneys Schmitt and Dillon have explained such potential conflicts to her and that she consents to their continued representation.
Essentially, FHLMC is arguing that Urban has waived the attorney-client privilege over confidential communications which are relevant to the claims she has asserted in this action. Urban's primary argument in opposition to FHLMC's motion is that her discussions with her attorney are not relevant to any of her asserted claims. I disagree. Not only are the discussions relevant to Urban's claims, they are also relevant and highly probative to FHLMC's defense to those claims. Therefore, for the reasons set forth below, I find that she has waived the attorney-client privilege as to discussions relevant to the claims she has asserted in this action.
F.D.I.C. v. R.W. Beck, Inc., No. CIV.A. 01-CV-11982RGS, 2004 WL 1474579, at *1 (D.Mass. July 1, 2004) (internal citations and citations to quoted cases omitted).
Based on its submissions, I find that FHLMC has clearly met "the threshold showing of relevance is established by a précis of the core allegations asserted against it in [Urban's] Complaint." Id. I also find for the reasons stated in its supporting memorandum, that the FHLMC has established that there is no alternative source for the information and that Urban's presumptively valid interest in maintaining the confidentiality of the privileged communications does not outweigh the need for disclosure. Therefore, I find that Urban has waived the attorney-client privilege as to communications between herself and Attorney Dillon (and any other attorney at Schmitt & Dillon Urban spoke with) concerning title insurance and their communications with Harmon Law about the same. See generally Greater Newburyport Clamshell Alliance v. Public Serv. Co., 838 F.2d 13 (1st Cir.1988).
Accordingly, FHLMC shall have the opportunity to depose Urban, Attorney Dillon and any other such attorney at Schmitt & Dillon regarding those discussions. The Court will provide the parties an opportunity to file motions in limine prior to trial regarding the admissibility of specific communications.
It is hereby Ordered that:
Defendant Federal Home Loan Mortgage Corporation's Motion To Disqualify Attorney Thomas Dillon As Plaintiff Rebecca Urban's Counsel And Seeking Declaration Of An "At Issue" Privilege Waiver is
