Did the trial court commit clear error by refusing to compel production of a settlement agreement and related papers in a breach-of-contract case involving former law partners?
Petitioner, M. Andrew Brison, was a 13% owner of a law firm known as Francis, Nelson & Brison. Respondent, Nelson, was a 37% owner. All the partners in the firm guaranteed certain loans that the firm had obtained. In 2010, FNB was acquired by another firm, Allen, Kopet & Associates. AK&A agreed to pay FNB’s debt, but the agreement also contained a penalty provision if any of the FNB attorneys left the firm early.
Petitioner left the firm in July, 2013. AK&A asserted its right to the early departure penalty, but did not pursue it. Respondent left the same year and, again, AK&A did not pursue the penalty.
In October, 2016, Respondent sued AK&A for breach of contract. Respondent reached a settlement agreement with AK&A under which Respondent was assigned AK&A’s penalty claim against Petitioner, Brison. Petitioner served discovery, including a request for production of the settlement agreement and related papers. Respondent objected, citing the attorney/client and work product privileges. Petitioner moved to compel, but the trial court entered an order denying Petitioner’s motion. Petitioner now seeks relief via prohibition.
Petitioner argues that the communications covered by his discovery request were between opposing lawyers and, therefore, were not made within the context of the attorney/client relationship. Furthermore, the work product privilege does not apply. Settlement agreements are not protected work product. Instead, they are discoverable in multi-party cases so that the nonsettling parties can “realistically evaluate [the] case against [them] in light of the terms and conditions of the settlement.”
Respondent counters that the court’s order prevents disclosure of communications between Respondent and his own attorney--communications that are clearly privilege. Because the settlement agreement was reached “with full knowledge that [Respondent] would be proceeding with claims against [Petitioner],” the agreement is covered by the work product privilege. Furthermore, the court concluded that the agreement itself was irrelevant. The only relevant parts of the agreement were the settlement amount and the assignment of claims to Respondent, both of which had, in fact, been previously produced.
This case raises privilege issues that are becoming more and more common in multi-party litigation. The case is scheduled for argument on the Rule 19 docket. Therefore, a new syllabus is unlikely. However, we do expect the Supreme Court to provide some much-needed guidance regarding the scope and application of these two important privileges.