Patel v. Martin
Patel v. Martin
Opinion
**30 The primary issue on appeal is whether a party in a civil case has the right to an immediate appeal from a discovery order under the doctrine of present execution. The defendants here argue that, after the motion judge ordered the disclosure of communications that they contend are protected from disclosure by the attorney-client privilege, they will be irremediably harmed if they cannot immediately appeal from that order. We conclude that a party has no such right of interlocutory appeal.
*1085
In so holding, we note that a party nevertheless retains two other avenues to seek immediate appellate review of an interlocutory order: by requesting the trial court judge to report the decision to the Appeals Court under Mass. R. Civ. P. 64 (a), as amended,
Although the appeal is not properly before us under the doctrine of present execution, we exercise our discretion under our superintendence authority to reach the merits and conclude that we must remand the matter to the motion judge for further factual findings.
Background . We summarize the facts as alleged in the complaint and that are undisputed in the record. In September 2012, Ellen Rea Marcus, as trustee of the Grossman Munroe Trust (trustee), executed a purchase and sale agreement with the Masonic Temple Association of Quincy, Inc. (Masons), for the purchase of the Masonic Temple in Quincy (property). Pursuant to a rider to the purchase and sale agreement, the agreement could not be assigned by the trustee without the prior written consent of the Masons. In a separate agreement executed in April 2013, the trustee assigned the rights to the property under the purchase and sale agreement to Jay Patel in return for $100,000; Patel intended to develop a hotel on the property. On September 30, 2013, before the sale of the property closed, a fire caused severe damage to the property. Shortly thereafter, the Masons claimed that they had never consented to the assignment, refused to recognize it, and received over $6 million from an insurance claim arising from the fire. In December 2015, Patel and his "hotel-operating company," Dipika, Inc. (collectively, developer plaintiffs), brought a civil action in the Superior Court against the trustee, Seymour H. Marcus, and Leo Martin (collectively, trust defendants), claiming **31 that they suffered economic damages from the trustee's failure to obtain the required consent for the assignment of the property.
During the course of discovery, the developer plaintiffs noticed the deposition of David Levin, the attorney who represented the Masons with respect to the sale of the property and who had also routinely represented the trust defendants on real estate legal matters for over twenty years. The trust defendants moved for a protective order to bar Levin from disclosing his confidential attorney-client communications with them, claiming that Levin represented them as well as the Masons in the real estate transaction concerning the property, even though Levin took the position that he had represented only the Masons.
After an evidentiary hearing, the motion judge found that there was an attorney-client relationship between Levin and the trust defendants after the fire regarding insurance claims and third-party claims arising from the fire, but that, with respect to the purchase and sale of the property, Levin represented the Masons, not the trust defendants. He therefore ruled that communications between Levin and the trust defendants before the fire were not protected by the attorney-client privilege.
The trust defendants filed a notice of appeal in the Superior Court seeking review by an Appeals Court panel under the doctrine of present execution and, "in an abundance of caution," also brought a petition in the Appeals Court pursuant to G. L. c. 231, § 118, first par., seeking interlocutory relief from a single justice of the Appeals Court. The single justice stayed action on the § 118 petition until a panel of the Appeals Court decided whether it had jurisdiction of the appeal under the doctrine of present execution to resolve the *1086 discovery dispute arising from the claim of attorney-client privilege. We transferred the appeal to this court on our own motion.
Discussion
. 1.
Appellate review of interlocutory orders
. When a final judgment enters in a civil case in the Superior Court under Mass. R. Civ. P. 54, as amended,
However, in narrowly limited circumstances, where "an interlocutory order will interfere with rights in a way that cannot be remedied on appeal" from a final judgment, and where the order is "collateral to the underlying dispute in the case" and therefore will not be decided at trial, a party may obtain full appellate review of an interlocutory order under our doctrine of present execution.
Maddocks
v.
Ricker
,
Our doctrine of present execution is similar to the Federal "collateral order doctrine," which permits full appellate review of a small class of collateral interlocutory decisions "that are conclusive, that resolve important questions separate from the merits,
**33
and that are effectively unreviewable on appeal from the final judgment in the underlying action."
*1087
Mohawk Indus., Inc
. v.
Carpenter
,
In civil cases, we have granted "the right to an immediate appeal under the doctrine of present execution where protection from the burden of litigation and trial is precisely the right to which [a party] asserts an entitlement."
Estate of Moulton
v.
Puopolo
,
We have also allowed immediate appeal from an interlocutory order disqualifying a party's counsel in a civil case under the doctrine of present execution. We concluded that an order depriving a party of his or her choice of counsel, if error, cannot realistically be remedied on appeal from a final judgment.
Maddocks
,
We have not, however, generally allowed interlocutory discovery orders to be immediately appealable under the doctrine of present execution. See
*1088
Cronin
v.
Strayer
,
The trust defendants contend that the judge's partial denial of their motion for a protective order regarding their communications with Levin deprives them of their right to protect privileged attorney-client communications from disclosure to third parties, and that this right cannot be adequately vindicated on appeal after final judgment because the confidentiality of those privileged communications, once disclosed, cannot be restored. They also contend that the subject of the interlocutory appeal -- the existence of an attorney-client relationship regarding the property transaction between Levin and the trust defendants before the fire -- is collateral to the merits of the controversy, which concerns the assignment of the purchase and sale agreement to Patel.
In response, the developer plaintiffs argue that a partial denial of a motion for protective order is ultimately a discovery order, and that litigation should not generally be interrupted by allowing piecemeal appeals from such orders. They contend that the trust defendants may challenge the order on appeal after final judgment and, if the order is determined to be error, they can seek a remedy of a new trial where the attorney-client communications that were disclosed, and all information derived from those disclosures, are excluded from evidence.
**35
The trust defendants make fair points, but the developer plaintiffs have the better argument. The trust defendants are correct that the existence of an attorney-client relationship between Levin and the trust defendants regarding the sale of the property is an issue that is collateral to any issue that will be decided at trial. They are also correct about the importance of protecting the confidentiality of privileged attorney-client communications in order to encourage "full and frank communication between attorneys and their clients."
Upjohn Co
. v.
United States
,
But we agree with the developer plaintiffs that, although a successful postjudgment appeal cannot entirely eliminate the harm that arises from an order allowing third parties to learn the content of privileged communications, the trust defendants do have a viable postjudgment remedy. Unlike an order disqualifying a party's counsel, the consequences of an adverse discovery order can be ascertained, the prejudice identified, and the error remedied by barring the use of any evidence derived from the protected communications at a new trial or other subsequent proceeding. See
Borman
,
Notably, the trust defendants here are claiming a right of immediate appeal from a discovery order, which commonly involves claims of denial of rights or invasions of privilege. See
Borman
,
Ultimately, the doctrine of present execution represents a balancing act that weighs the harm to cost-effective litigation arising from piecemeal interlocutory appeals against the harm that a litigant may suffer from a trial court order that is irremediable on postjudgment appeal. We conclude that the sheer volume of potential appeals that would be permitted by including privilege-related discovery orders within the doctrine of present execution, and the inevitable adverse impact on judicial efficiency, outweighs the intrinsic harm that potentially might be suffered by an aggrieved party who is denied an immediate right to appeal.
In reaching this balance, we note that denying a litigant the
right
to a full interlocutory appeal under the doctrine of present execution does not bar a litigant from moving or petitioning for immediate appellate review of an interlocutory order. Where a party believes that the legal questions at issue regarding a discovery order are so significant or novel that they warrant interlocutory appeal, the party may generally request the Superior Court judge to report the decision to the Appeals Court under
**38
Mass. R. Civ. P. 64. Or the party may petition a single justice of the Appeals Court under G. L. c. 231, § 118, first par., and seek redress from the single justice, as the trust defendants did here, or ask the single justice to refer the petition to a full panel of the Appeals Court. And where a party or nonparty feels so strongly about the injustice of an order compelling discovery that it is willing to suffer the sanctions that might arise from disobeying the order, the party or witness can obtain full appellate review of the order as a matter of right by refusing to comply with the order and appealing from the resulting order of dismissal or contempt. See
Cronin
,
2.
Partial denial of motion for protective order based on trust defendants' claim of attorney-client privilege
. Having concluded that the trust defendants are not entitled under the doctrine of present execution to appeal from the partial denial of their motion for a protective order, based on their claim that they had an attorney-client relationship with Levin regarding the sale of the property before the fire, we have two options. We can exercise our discretion under our superintendence authority to reach the merits of this appeal, where the issue "has been briefed fully by the parties ... [and] raises a significant issue" regarding attorney-client relationships and the doctrine of privilege, "and addressing it would be in the public interest."
Marcus
,
a.
Standard of review
. A judge's ultimate conclusion as to whether an attorney-client relationship existed is a mixed question of law and fact, which we review de novo. See
McCarthy
v.
Slade Assocs., Inc
.,
b. Summary of the evidence and the judge's findings . It was undisputed that Levin represented the Masons, as the sellers of the property, in connection with the purchase and sale agreement, and that he was identified as their attorney of record on the agreement that was signed in September 2012. The question before the judge was whether Levin had also established an attorney-client relationship with the trust defendants, who were the buyers in this transaction. Levin testified that he had not; the trust defendants testified that he had.
Levin acknowledged that he had represented the trust defendants in a large number of matters, including real estate matters, for over twenty years, and that he did over ninety per cent of the trust defendants' legal work. He testified that, in the spring of 2012, when he learned that the trust defendants were seeking to make an offer on the property, he was representing the trust defendants in a number of other *1092 real estate transactions. In Levin's electronic mail messages with the trust defendants, he discussed the purchase and sale agreement in conjunction with other pending matters. The trust defendants and Levin agreed that, because he was representing the Masons as the sellers, the **40 trust defendants would identify Miriam Marcus as their attorney of record in the agreement. Levin admitted that he never communicated with Miriam Marcus, and instead communicated directly with the trust defendants because he knew that Martin always negotiated real estate transactions personally. Levin sent draft documents to the trust defendants for review, prepared a power of attorney form for Martin so that he could sign the purchase and sale agreement on behalf of the Grossman Munroe Trust, and acknowledged having "many conversations" with Martin concerning the transaction after the agreement was signed in September 2012, particularly about deadlines in the agreement and seeking an extension to perform due diligence obligations. Levin also testified that he discussed with the trust defendants their concerns about financing, construction, and permits related to the division of condominium units on the property; those issues were incorporated into a rider to the purchase and sale agreement. Levin billed the Masons and the trust defendants each one-half of his fee in connection with the purchase and sale transaction. The bill sent to the trust defendants listed the Masonic Temple transaction with other pending real estate matters on which he represented the trust defendants.
Throughout his testimony, Levin contended that he never provided particularized legal advice or assistance to the trust defendants in connection with the sale of the property, but did provide advice "affect[ing] both sides" at group meetings regarding various issues. Levin characterized his role in the matter as a simple one: the parties had discussed agreed-upon terms, and he worked to memorialize them into a working purchase and sale agreement. He made himself available to answer questions from the defendants, but he described these communications as "direction, not [advice]." Levin testified that he explicitly told the trust defendants that he would not be able to represent them in the purchase and sale transaction.
The trust defendants disputed Levin's testimony. Seymour Marcus testified that Levin had explicitly told him that Levin was going to represent both sides, and that Levin had represented opposing parties to a transaction with them before, in the context of lenders and borrowers and also buyers and sellers. Marcus stated that Levin offered particularized legal advice in meetings -- without the Masons present -- on permitting and construction issues regarding the property and on what "[his] liabilities are to the Masons." He said that Levin instructed them to list Miriam Marcus as their attorney solely as a formality.
**41 Martin testified that he never executed a real estate transaction without representation, and virtually always used Levin to negotiate agreements and draft documents. Martin contradicted Levin's testimony that Levin merely wrote the terms that the parties had agreed upon, claiming that Levin proposed amendments to the purchase and sale agreement and made suggestions and comments throughout the negotiation process. Martin also testified that Levin never told the trust defendants that he would be unable to represent them. Rather, Martin testified, Levin made clear that he was representing both sides, and asked the trust defendants to list Miriam Marcus as their attorney only to avoid the appearance of impropriety.
At the close of the evidentiary hearing, the judge announced his findings and subsequent order. Because it was undisputed that the trust defendants approached Levin *1093 for legal advice -- and indeed received such advice -- regarding their exposure to insurer claims and other liability after the fire, the judge first found that there was an attorney-client relationship between Levin and the trust defendants after the fire. With respect to the matters involving the purchase and sale agreement before the fire, the judge found that the Masons and the trust defendants shared a common interest in the sale, transfer, and development of the property, but not a common interest in the sense "that their interests were aligned with regard to this transaction." He noted:
"[A] purchase and sale agreement generally is designed to protect the rights and enforce the obligations of a buyer and seller, which almost by definition are antagonistic one to the other. And in a transaction of this complexity, it seems impossible that a single attorney could represent both sides in a very complex and sophisticated real estate transaction."
The judge continued:
"I accept the testimony as I've heard it that there was a longstanding relationship between Mr. Levin and Mr. Marcus and his various ventures that extended perhaps up to [twenty-five] years and involved countless real estate transactions ... where Mr. Levin served essentially as in-house counsel for Mr. Marcus and his various holdings. And I acknowledge that ... any communications [with Levin] as to all of those real estate transactions in the past would fall under the attorney-client umbrella that Mr. Levin had with Mr. Marcus **42 and his entities. That does not mean in this particular transaction, however, that ... Mr. Levin necessarily represented Mr. Marcus and Mr. Martin.
"A party asserting a privilege has the burden of proving that the privilege exists. I don't find in this case that the [trust defendants have] proved to my satisfaction that Mr. Levin acted as the attorney for Mr. Marcus and Mr. Martin with regard to the negotiations leading to the signing of a [purchase and sale agreement] or with regard to negotiations leading to an extension of that [purchase and sale agreement]."
The judge thus found that there was no attorney-client relationship between the trust defendants and Levin with respect to the purchase and sale transaction before the fire.
c.
Analysis
. On appeal, the trust defendants do not contend that there was an express contract whereby Levin agreed to represent them with respect to the Masonic Temple purchase and sale transaction. Rather, they argue that the attorney-client relationship was implied as a matter of law by the conduct of the parties, particularly based on their reasonable belief that Levin was representing them. An attorney-client relationship may be impliedly formed "when (1) a person seeks advice or assistance from an attorney, (2) the advice or assistance sought pertains to matters within the attorney's professional competence, and (3) the attorney expressly or impliedly agrees to give or actually gives the desired advice or assistance.... In appropriate cases the third element may be established by proof of detrimental reliance, when the person seeking legal services reasonably relies on the attorney to provide them and the attorney, aware of such reliance, does nothing to negate it" (citation omitted).
DeVaux
v.
American Home Assur. Co
.,
The judge's findings raise issues both of law and of fact, none of which can be resolved without remand to the motion judge for further findings. The issue of law is that the judge, after finding that the interests of the buyer and seller in this purchase and sale transaction were "antagonistic"
*1094 to each other, stated that "in a transaction of this complexity, it seems impossible that a single attorney could represent both sides in a very complex and sophisticated real estate transaction." It is not clear from the record precisely what the judge meant by this statement, especially where the judge found that Levin represented both the trust defendants **43 and the Masons after the fire, when their interests remained adverse. 7
It is not ethically impossible for an attorney to represent clients with adverse interests. Under Mass. R. Prof. C. 1.7 (a), as amended,
Where we cannot be sure what the motion judge meant by his finding that it seems "impossible" for Levin, who was already representing the Masons with respect to the sale of its property, also to represent the trust defendants with respect to that transaction, we believe it prudent to remand the matter to the judge for clarifying findings on this issue. It is unclear what role, if any, that **44 finding played in his ultimate determination that Levin did not enter into an attorney-client relationship with the trust defendants until after the fire.
We must also remand for further findings because we cannot evaluate whether the judge's findings were clearly erroneous without credibility findings regarding the conflicting testimony of Levin and the trust defendants. For example, the judge did not resolve contradictory testimony as to whether Levin explicitly told the trust defendants that he could not represent them because he was simultaneously representing the Masons, which bears on the trust defendants' claim of detrimental reliance. The judge found only that the trust defendants had failed to satisfy their burden *1095 of proving that they had an attorney-client relationship with Levin regarding the negotiation of the purchase and sale agreement and its extension, but he did not explain why.
Importantly, the judge did not address the undisputed fact that Levin billed both the Masons and the trust defendants for his legal work regarding this transaction, splitting his fee equally between them. Where, as here, an attorney bills an existing client for legal services, and where the client pays for those services, it is reasonable to infer that they had an attorney-client relationship with regard to those services. See
Williams
v.
Ely
,
As to this issue, we note that an attorney-client relationship may impliedly be formed when an attorney provides "advice
or assistance
" (emphasis added).
DeVaux
,
Conclusion . The order of the Superior Court judge partially denying the trust defendants' motion for a protective order is vacated, and the matter is remanded for further findings consistent with this opinion and for reconsideration of the motion in light of those findings.
So ordered .
The phrase "doctrine of present execution" appears to derive from
Vincent
v.
Plecker
,
The United States Supreme Court has concluded under its collateral order doctrine that an order disqualifying counsel in a civil case is not immediately appealable.
Richardson-Merrell, Inc
. v.
Koller
,
The trust defendants note that we stated in
Preventive Med. Assocs., Inc
. v.
Commonwealth
,
We recognize that, as here, an attorney who denies the existence of an attorney-client relationship with the moving party regarding the subject matter of the litigation is not going to refuse to testify and risk a contempt finding. But we decline to grant a right of interlocutory appeal to a party in a civil proceeding simply because that avenue of appeal is not available. We do not address whether a right of interlocutory appeal would be appropriate in these circumstances if the appeal concerned a privilege issue in a criminal or grand jury proceeding. Cf.
Matter of a R.I. Grand Jury Subpoena
,
The Masons later sued the trust defendants, and Levin testified that he only stepped aside from representing the trust defendants after that lawsuit commenced.
Subsequent to the transaction at issue in this case, our rules of professional responsibility were amended. Under the current Mass. R. Prof. C. 1.7, as appearing in
Reference
- Full Case Name
- Jay PATEL & Another v. Leo MARTIN & Others.
- Cited By
- 11 cases
- Status
- Published