BURCH & CRACCHIOLO, P.A.; MICHELLE A. LUND; KRISTEN LUND OLSON; KAREN PAGE, Petitioners,
THE HONORABLE ROBERT D. MYERS and THE HONORABLE EDWARD BASSETT, Judges of the SUPERIOR COURT OF THE STATE OF ARIZONA, in and for the County of MARICOPA, Respondent Judges, BRADFORD D. LUND, Real Party in Interest
Petition for Special Action from the Superior Court in Maricopa County. No. PB2009-002244. The Honorable Robert D. Myers, Judge Retired. The Honorable Edward W. Bassett, Judge.
Osborn Maledon PA, Phoenix, By Mark I. Harrison, Chelsea Sage Durkin, Nathan Arrowsmith, Counsel for Petitioners.
Shumway Law Offices PLC, Scottsdale, By Jeff A. Shumway, Counsel for Real Party in Interest.
Judge Kenton D. Jones delivered the opinion of the Court, in which Presiding Judge John C. Gemmill and Judge Samuel A. Thumma joined.
Kenton D. Jones, Judge:
¶1 Burch and Cracchiolo (B& C), along with its clients, Michelle Lund, Kristen Lund Olson, and Karen Page (collectively, Petitioners), bring this special action challenging the trial court's order disqualifying B& C from continuing to represent Petitioners in the underlying action seeking the appointment of a guardian and conservator for the real party in interest, Bradford Lund. We are asked to address a question left unresolved by our supreme court in Lund v. Myers, 232 Ariz. 309, 313, ¶ 20, 305 P.3d 374 (2013): whether a party moving to disqualify opposing counsel, premised upon opposing counsel's knowing use of documents containing privileged information inadvertently disclosed to him, waives
the attorney-client privilege with respect to those documents. Holding the moving party does not, we accept jurisdiction but deny relief.
FACTS AND PROCEDURAL HISTORY
¶2 The ongoing litigation between these parties includes a baker's dozen of special actions, one direct appeal, and two petitions for review. The relevant facts, however, are largely uncontested.
¶3 In February 2006, Bradford filed a petition to create a guardianship for himself. In April 2006, the law firm of Jennings, Strouss & Salmon (JS& S) appeared on behalf of Bradford and withdrew the petition.
¶4 In October 2009, Petitioners, through B& C, filed the underlying action seeking the appointment of a guardian, conservator, guardian ad litem, and next friend for Bradford. Bradford, along with his father and stepmother, opposed the petition.
¶5 On September 19, 2011, B& C, through attorney Bryan Murphy, served JS& S with a subpoena duces tecum, seeking the production of all non-privileged information relating to, among other things, Bradford's 2006 guardianship petition. In response to the subpoena, and premised upon the erroneous assumption of JS& S that Murphy was taking over as Bradford's counsel, JS& S delivered a copy of its entire client file to Murphy the next day without first conducting a privilege review of its contents. Upon receipt of the client file, Murphy briefly scanned the materials, made a copy of a diagram related to a proposed trust, and turned the file over to his paralegal.
¶6 On October 3, 2011, Jeff Shumway, Bradford's then-current counsel, learned of JS& S's disclosure. He immediately emailed Murphy to say the client file contained at least two, but possibly more, privileged documents and to request their return. Shumway further advised he would review the remainder of the client file to determine if it contained other privileged materials. Murphy quickly responded that he had not " studied the materials with an eye toward privilege issues" and would await word from Shumway regarding any other privileged documents. Shumway ended the email exchange by telling Murphy he believed the documents he had identified were privileged, and would follow up with Murphy about " any other documents once [he saw] the file."
¶7 Nearly three weeks later, having heard nothing further from Shumway, Murphy distributed the entire client file, including the documents Shumway had identified as privileged, to all parties to the action as part of a supplemental disclosure statement. See Ariz. R. Civ. P. 26.1(a)-(b). Murphy also used the trust diagram he had copied in support of two separate discovery motions.
¶8 On November 14, 2011, Bradford moved to disqualify B& C from representing Petitioners, claiming B& C had gained an unfair and improper advantage in the litigation by reviewing and using the privileged materials contained in the client file. Bradford also filed a motion seeking to prevent B& C from submitting the inadvertently disclosed documents to the trial court for an in camera review pursuant to Arizona Rule of Civil Procedure 26.1(f)(2).
¶9 In preparation for his defense against Bradford's motion to disqualify, and in apparent disregard of the asserted privilege claim, Murphy reviewed, in detail, the entire client file, making handwritten notes and preparing an index. Meanwhile, the trial court ordered JS& S to create and file a privilege log, briefly describing each document in the client file believed to be privileged and the basis for each privilege claim. JS& S ultimately identified nearly fifty documents, representing more than 100 pages of the approximately 250 pages disclosed, which were subject to a claim of attorney-client
privilege or work-product protection. The court also ordered JS& S to file the specified documents with the court to facilitate resolution of the privilege claims.
¶10 In Lund v. Myers, our supreme court held that a party erroneously receiving documents for which a later privilege claim is made may present the information to the court under seal to resolve the privilege dispute. 232 Ariz. at 311-12, ¶ 13 (citing Ariz. R. Civ. P. 26.1(f)(2)). Once filed, the court should then " determine, as to each document, [whether] in camera review is necessary to resolve the privilege claim. Such review may be required if the receiving party makes a factual showing to support a reasonable, good faith belief that the document is not privileged." Id. at 312, ¶ 15 (citing United States v. Zolin, 491 U.S. 554, 572, 109 S.Ct. 2619, 105 L.Ed.2d 469 (1989), and Kline v. Kline, 221 Ariz. 564, 573, ¶ 35, 212 P.3d 902 (App. 2009)). Therefore, on remand, the trial court was to allow B& C to respond to the privilege log and " consider the parties' arguments regarding privilege and waiver to determine whether in camera review was warranted for particular documents." Id. at 312, 313, ¶ ¶ 18, 21. The supreme court declined to comment upon " whether, by seeking disqualification, Bradford waived the ...