State Appellate Courts Assess Implied and “At Issue” Waivers: Part II

March 14, 2018

Last week’s Privilege Point discussed the implied privilege waiver sometimes triggered by a litigant’s attempt to recover attorney’s fees.  An even more counter-intuitive implied waiver involves what courts frequently call an “at issue” waiver.

In Outpost Solar, LLC v. Henry, Henry & Underwood, P.C., No. M2016-00297-COA-R9-CV, 2017 Tenn. App. LEXIS 841 (Tenn. Ct. App. Dec. 29, 2017), two companies sued their former lawyer for malpractice.  The defendant sought to dismiss one of the plaintiff’s claims, noting that it was filed after Tennessee’s one year legal malpractice statute of limitations had run.  The plaintiff responded to the statute of limitations defense by arguing that “it discovered the [malpractice] cause of action within the limitations period.”  Id. at *2-3.  Defendant “then sought through discovery to have the former client produce communications from the client’s new counsel.”  Id. at *1.  The plaintiff claimed privilege protection – but the trial court found a waiver.  The appellate court upheld the lower court’s conclusion “that Plaintiffs put their privileged information at issue by pleading the discovery rule” – because “by pleading ignorance of this cause of action against Defendants, Plaintiffs have made ‘what Plaintiffs knew and when Plaintiffs knew it’ the dispositive issue of this case.”  Id. at *21-22. 

Not all courts would take this draconian approach, but it makes some sense.  And it would be easy for lawyers to overlook the privilege waiver risk of asserting ignorance in this setting – because the assertion does not disclose, explicitly rely on, or even refer to, any privileged communications.  This is why “at issue waivers” represent the most frightening form of implied waiver.