In Uncategorized on 11/14/2019 at 11:58

Gene Autry’s signature tune heralds both the return of the Orders Search feature on Tax Court’s website, and my Three Thousandth (count ‘em, three thousandth) post.

But today’s feature isn’t about horsey hobbyists. It’s about who is the in-crowd when it comes to client-attorney privilege. And STJ Peter Panuthos will tell us all about it, belatedly.

Here’s Estate of Ethel Bell Wright, Deceased, Susan Armistead, Executor, et al., Docket No. 5291-16, filed 11/8/19, just now back up on the website.

The late Ethel Bell and Susan A were surrounded by lawyers. The white shoes filled the floor. So when IRS hit Susan’s son Bill, who was in on the family’s trusts and business, with a subpoena DT, motions to quash (denied) and privilege logs went flying.

STJ Panuthos: “Respondent claims these documents are not protected by attorney-client privilege because there is insufficient evidence that petitioner or her son were clients of Mr. N. We examined the documents in camera and conclude that the attorney-client privilege does apply. However, we further conclude that the privilege has been waived with respect to these documents as an attorney-client communication “’concerning LeRoy and Ethel’s lifetime joint estate and business planning’, as referenced in paragraphs 23 through 26 of petitioner’s memorandum. While the extent of the waiver is not entirely clear, it is petitioner’s burden to establish that waiver has not occurred with respect to each document for which she is claiming privilege. She has not done so with respect to documents B-90 through B-99. Accordingly, these documents are required to be disclosed in the present proceeding.” Order, at p. 4. (Name omitted).

LeRoy was Ethel Bell’s husband, and he was Susan’s dad and sons Bill’s and Jim’s grand-dad.

Communications between lawyers, Susan and son Jim were privileged, because agency. Jim acted for mom Susan in a confidential relationship.

“We have examined the documents in question in camera and have concluded that an agency relationship does exist between petitioner and her son James with regard to the estate and the present litigation. The documents support petitioner’s contention that James actively acted on behalf of his mother in her role as executor to gather documentary evidence, obtain expert reports, and help select witnesses. Accordingly, communications between James Armistead and the estate’s attorneys are not required to be disclosed in the present proceeding as we do not conclude there was a waiver of the attorney client privilege under these circumstances.” Order, at p. 6.

Bro Bill had little to do with the estate; all he was, was a witness. No privilege, third-party communication.

Work product fares little better. Whatever was privileged because of client-attorney is privileged here, and IRS didn’t make out a case for “compelling need” to get the stuff, as it could be gotten elsewhere.

Takeaway for lawyers—Be careful who you talk to. Warn clients about waiver of privilege: it’s not absolute, and getting to be less so every day.

And to Blackstone and the Glasshouse Gang: Thanks, it’s great to be back.




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