On May 28, 2020, the Nevada Supreme Court issued an opinion which impacts the scope of the attorney-client privilege. Specifically, in Canarelli v. Eighth Judicial District Court ex rel. County of Clark, 136 Nev. Adv. Op. 29, 2020 WL 2777371 (May 28, 2020), the Court determined: (1) that a client’s notes made in preparation for or contemporaneously with an attorney-client communication are privileged regardless of physical delivery of the notes to counsel; and (2) that there is no fiduciary exception to the privilege in Nevada.
In Canarelli, the beneficiary of an irrevocable trust filed a petition seeking to compel the trustee to produce all information relating to a purchase agreement the trustee entered into to sell off trust assets, as well as an inventory and accounting of the trust. The trustee retained counsel and spoke to his counsel on the phone regarding his response to the petition. During discovery, the trustee’s counsel inadvertently disclosed the trustee’s notes that he composed in preparation for his phone call with his counsel, as well as the notes he made contemporaneously memorializing the defense strategies discussed during the call. The trustee’s counsel attempted to claw back the documents claiming the notes were attorney-client privileged and work product. Id. at *1-2.
The discovery commissioner determined that the notes were discoverable because of the fiduciary exception and common interest exceptions to the attorney-client privilege and the substantial need exception to the work product doctrine. The district court adopted the discovery commissioner’s findings; however, the district court also determined that the attorney-client privilege did not apply because it could not be assumed that the trustee’s notes had been communicated to his counsel. Id. at *2.
In the subsequent writ proceedings, the Supreme Court examined for the first time whether a client must deliver his notes to his attorney in order for the notes to constitute a “communication” for the purposes of the attorney-client privilege. The Court decided to follow federal precedent and concluded that physical delivery is not necessary for attorney-client privilege protection. “[S]o long as the content of the notes was previously or is subsequently communicated between a client and counsel, the notes constitute communications subject to the attorney-client privilege. Holding otherwise would discourage a client from diligently preparing for a conversation with counsel and undermine a client’s ability to confidently memorialize any legal advice received.” Id. at *4. Moreover, in order to assert the privilege, the client does not have to prove that he “spoke each and every word written in his or her notes to counsel verbatim.” The client need only submit his counsel’s billing records and their declarations to prove that the content of the notes was communicated to his counsel. Id. at *5.
Further, the Court examined for the first time the applicability of a fiduciary exception to the attorney-client privilege. Id. In the context of trust disputes, many jurisdictions have held that a fiduciary, like a trustee, cannot assert the attorney-client privilege against beneficiaries on matters of trust administration. See Murphy v. Gorman, 271 F.R.D. 296, 305 (D.N.M. 2010). This exception has been applied to other fiduciary relationships beyond that of a trustee and beneficiary. See Garner v. Wolfinbarger, 430 F.2d 1093 (5th Cir. 1970) (applying the fiduciary exception in a stockholder derivative action, and holding that “[w]hen stockholders sue a corporation for acting contrary to the stockholders’ interests, the stockholders may obtain otherwise-privileged materials where they can show cause why the attorney-client privilege should not be invoked in the particular case”). However, because the Nevada legislature enacted a privilege statute with only five specifically defined exceptions to the attorney-client privilege, and these five exceptions do not include the fiduciary exception, the Supreme Court refused to create a sixth exception by judicial fiat. Canarelli, 136 Nev. Adv. Op. 29, at *5-6. Therefore, the Supreme Court upheld the well-known rule of statutory construction that “‘the expression of one thing is the exclusion of another.’” Id. at *5 (quoting Galloway v. Truesdell, 83 Nev. 13, 26, 422 P.2d 237, 246 (1967)).
About Sarah Harmon:
Sarah E. Harmon is a partner at Bailey Kennedy and has over eighteen years of experience in the areas of appellate advocacy and civil/business litigation, including breach of contract, fraud, legal malpractice, products liability, complex civil litigation, and many other types of business disputes. Her experience with appellate advocacy includes appeals from adverse judgments and orders as well as petitions for extraordinary writ relief. Ms. Harmon can assist clients with obtaining settlements and judgments before going to trial, avoiding errors at trial, and properly preserving issues for an appeal.
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