IN THIS ISSUE: BE CERTAIN YOUR COMMUNICATIONS REMAIN CONFIDENTIAL l WHEN CAN YOU SEEK DIVORCE BECAUSE OF "FAULT"? l IMPORTANT TAX ALERT
By Tucker R. Hull
Confidential information that you share only with your attorney in connection with legal services is protected by the attorney-client privilege. Your attorney may not reveal the privileged information, nor can a court compel the attorney to disclose this information.
When you find yourself in complex litigation, involving a combination of parties with variously aligned interests, an early concern is knowing with whom you can share information and maintain the privileged nature of the communication. Disclosing information to the wrong person can destroy your right to keep that information out of court. Under limited circumstances, sharing information among parties in civil suits with similar interests is permitted. You take precautions, however, before sharing communications.
In 1992, the Pennsylvania Superior Court, for the first time, extended the attorney-client privilege to include communications among multiple criminal defendants and their separate attorneys as part of a joint defense. The same reasoning has since been applied in civil cases allowing parties (whether plaintiffs or defendants) with similar interests to share information between themselves and their respective counsel without waiving the privilege that protects the information from discovery. This has been referred to as "the common interest privilege."
It was not until July 2009, however, that any Pennsylvania appellate court addressed the applicability of the joint defense/common interest privilege in a civil case. In In Re: Condemnation by the City of Philadelphia, 981 A.2d 391, 398 (Pa. Commw. 2009), the Pennsylvania Commonwealth Court held that a common financial interest among parties in the outcome of a legal proceeding is insufficient to establish a common legal interest for purposes of the common interest privilege. In the proceeding, the City of Philadelphia attempted to invoke the common interest privilege to protect its communications with the Philadelphia Redevelopment Authority ("RDA"). The City and the RDA were actually adverse parties to one another in the case. However, the entities shared a desire to reduce the financial obligation each owed to another party, a commercial developer. To facilitate this outcome, the City and the RDA had orally agreed to share otherwise privileged information. The RDA was also in the midst of a related action by the commercial developer for breaching a purchase agreement for the parcel at issue.
The Commonwealth Court held that no common interest privilege existed between the City and the RDA. The Court was not convinced that the mutual desire of the City and the RDA to reduce each entity's respective financial obligation to the commercial developer was a common legal interest for purposes of the common interest privilege. The Court emphasized that the application of the common interest privilege requires a common legal interest in the outcome of the legal proceedings in which the privilege is being invoked, not just a desire for some mutually beneficial outcome to result.
The Court also mentioned, but did not decide, two related issues. The trial court had ruled that the common interest privilege requires the parties' interests not only to be legal in nature, but also to be identical and to be memorialized in a written agreement. On appeal, the Commonwealth Court determined it need not review whether the asserted interest must be identical or the agreement confirmed in writing because it found no interest existed in the first place. Thus, it remains unclear in Pennsylvania whether parties must have identical interests to invoke the privilege or whether a written agreement is necessary to confirm the decision to share information.
How can you protect your communication with parties with similar interests in litigation? First, never share information with other parties without first scrutinizing the nature of your relationship or without considering whether a written common interest agreement is appropriate. Second, you must closely evaluate the particular nature of the interest you share with the other party. A mere common business or financial interest in the outcome of a proceeding is insufficient to invoke the privilege. Finally, if you feel you do share a common legal interest with another party, you should strongly consider a written agreement to confirm your understanding with the other party.
If you have any questions regarding the common interest privilege, the Litigation attorneys at McNees Wallace & Nurick are here to assist you.
By Lynnore K.Seaton
Tricia Walsh-Smith, the now infamous "You-Tube" divorcee, who posted videos on the internet airing sordid details from her marriage, lost in her recent divorce trial after a judge found her behavior to be “cruel and inhuman” and granted her husband a divorce on that basis. While there are many questions as to whether her conduct actually rose to such a level, the biggest question is why the videos were considered in the first place – they were filmed six months after the couple separated.
The Smith divorce took place in New York, the only state that still requires fault grounds in order to obtain a divorce. Pennsylvania also grants divorces under fault grounds, but the strong preference is for "no-fault" divorces – divorces granted without the necessity of proving fault by the husband or wife. Still, fault claims arise in the Commonwealth, so the question can become, what exactly is "fault" and what does it mean to the divorcing parties?
In Pennsylvania, a plaintiff can obtain a divorce on fault grounds if two things can be proven: that the plaintiff is the "innocent and injured" party and that the defendant is guilty of any one of seven categories of marital misconduct: desertion, adultery, cruel and barbarous treatment, indignities, bigamy, imprisonment for a crime for two or more years or confinement to a mental institution. While these fault grounds remain a part of Pennsylvania law, they are seldom relied upon due to the "no-fault" provisions of the divorce code, which allows parties to end their marriage without showing misconduct by either party.
If the Smith divorce took place in Pennsylvania, Ms. Walsh-Smith's behavior would have most likely been classified as "indignities." Indignities are when the defendant acts in a way as to render the innocent and injured spouse's condition intolerable and his life burdensome. The three elements required to make out a case of indignities are: (1) a course of conduct, as opposed to a single incident, which is (2) inconsistent with the marital relationship and (3) renders the condition of burdensome. What constitutes indignities in any particular case depends upon all of the circumstances, including the position in life, character, and disposition of the parties. Indignities have been described as a course of behavior that is humiliating, degrading and inconsistent with the husband-wife relationship and behavior that a person of “ordinary sensibility and delicacy of feeling” would find burdensome and intolerable.
Fault grounds become even more complicated by the fact that there are numerous defenses, including plaintiff's condonation, consent, provocation and participation. Even if the defendant is found guilty of fault, the plaintiff must also be "innocent" of fault. If the court finds both parties are guilty of fault, a divorce will not be granted under fault grounds.
In Pennsylvania, courts may not look at fault when making decisions on the division of marital property. Fault does become a factor when the "at-fault" spouse is seeking spousal support from the other prior to the divorce. Marital misconduct, even after separation, may be used as an entitlement defense to paying support if it can be proven with clear and convincing evidence. Additionally, fault is one of 17 factors the court must consider when determining if alimony is necessary and in determining the amount and duration of alimony payments.
Given the complications involved, especially in comparison to the benefits, one can see why fault claims are used less and less frequently in Pennsylvania. Additionally, the use of fault can fuel more emotions in an already extremely emotionally charged situation, so it may be quicker and less painful in the long run to file for a no-fault divorce, despite the clear presence of fault. Meanwhile, the Walsh-Smith saga continues. Her new attorneys filed an appeal on June 5, 2009, which is ongoing. On October 5, 2009, Ms. Walsh-Smith released another video which hurls more insults at her ex-husband.
As of December 31, 2009, Congress had not acted to forestall the total repeal of the federal estate tax for 2010. Congressional leadership has indicated that legislation will be introduced that will reinstate the tax retroactively to January 1, 2010; however, even assuming such legislation is passed, the effectiveness of retroactive application is uncertain. Therefore, it is possible that there would in fact be no estate tax for persons dying in 2010. Unfortunately, the current status quo could have significant unintended consequences for certain clients. If you are married and your estate plan contemplates division of assets at your death for the benefit of your spouse and/or children, you should immediately consult experienced legal counsel for a review of your estate planning documents. While most clients will not need to alter their estate plans, a timely review of the specific document language can avoid unintended results for your spouse and heirs.
For more information, please contact David M. Watts, Chair of the Asset Planning Practice Group at 717.237.5344 or .
© 2010 McNees Wallace & Nurick LLC
The Litigation Newsletter is presented with the understanding that the publisher does not render specific legal, accounting or other professional service to the reader. Due to the rapidly changing nature of the law, information contained in this publication may become outdated. Anyone using this material must always research original sources of authority and update this information to ensure accuracy and applicability to specific legal matters. In no event will the authors, the reviewers or the publisher be liable for any damage, whether direct, indirect or consequential, claimed to result from the use of this material.