In 2022, Jim Daws agreed to sell his company, Daws Trucking, to Rick Fernandez under an asset purchase agreement (APA). The same law firm represented both parties in the transaction but “fail[ed] to obtain consent to the conflict of interest.” Jim Daws Trucking, LLC v. Daws Inc., No. 4:24CV3177, 2025 U.S. Dist. LEXIS 186458, at *7-8 (D. Neb. Sept. 23, 2025). Daws continued to work under the new ownership until a conflict with Fernandez triggered lawsuits, which led to a dispute over Daws’ attorney-client privileged communications (1) before the transaction closed and (2) while he continued working at the company after the transaction closed.
Addressing the first issue, the court noted that under the APA, Daws sold Fernandez “all the tangible and intangible assets used in the business,” including the server containing his transaction-related attorney-client communications. Id. at *3. The APA even identified the server as “Office Equipment” worth about $40,000. Id. at *4. Daws claimed he was “not tech savvy” and “did not ‘intend’ to sell the data contained on the server.” Id.
The unsympathetic court rejected Daws’ argument, noting that Daws did not “delete any pre-sale communications” on the server and thus waived the privilege when he “voluntarily disclosed the communications contained on the server” under the APA. Id. at *17-18. Interestingly, the court focused on the waiver rather than on the transfer of ownership. Next week’s Privilege Point will address the court’s analysis of Daws’ post-closing communications using the server that now belonged to Fernandez.