About a year ago, the Texas Supreme Court issued an interesting opinion. It is titled In Re XL Specialty Insurance Co. I was reminded of it when I read the Florida First District Court of Appeal decision in Lacaretta Restaurant v. Zepeda, Case 1D13-0993.
Both are interesting cases, each about an aspect of the attorney-client privilege. In Zepeda, there was a discovery request, an objection, two hearings, and an order compelling the production of certain notations from the carrier's claims file. The employer/carrier had objected to this production on the basis of privilege. The Court opinion noted that the appellate challenge focused upon two of those notes: "the first note made by the adjuster to memorialize a meeting with in-house counsel, and the second note made by in-house counsel herself." The Court agreed with the E/C that these two were privileged and quashed the order compelling production of them. This opinion is recommended reading for the basic explanation of when a certiorari writ is appropriate. The Court concluded that these two notes were privileged, "because both clearly constitute or memorialize communication from the attorney to the E/C made in the rendition of legal services." The Court noted that production of the notes "would have a chilling effect on communications between attorneys and clients."
The Texas case, In re XL, is more involved. It illustrates a notable distinction between Florida and Texas in workers' compensation. There, the pending action was not for workers' compensation benefits, but for damages for bad faith from the WC insurance carrier. The plaintiff sought communications between the "insurer’s lawyer and the employer during the underlying administrative (WC) proceedings." Notably, the employer was self-insured for a portion of the workers' compensation benefits through a: "one million dollar deductible per claim."
During the claimant's litigation of the underlying claim for workers' compensation benefits, the carrier hired an attorney. Their counsel, Rebecca Strandwitz, provided "communications about the status and the evaluation of the WC proceedings to" the employer and carrier. After Claimant prevailed in the comp claim, he sued for violations of the TX insurance code and deceptive practices statute. There, in discovery, he sought the communications between Strandwitz and the employer, which the employer protested citing privilege. The trial court ordered production, and the carrier sought relief by mandamus.
The Texas Court recognized that the attorney/client privilege is rooted in the jurisprudence of Texas. Noting the purpose of this privilege and citing numerous authorities, the Court provides an interesting illustration of the need for such protection. The Court's discussion includes reference to various privilege codifications in Texas, and specifically focuses upon the "'joint client' privilege, the 'joint defense' privilege, and the 'common interest' privilege." The Court defines and discussed each of these and concluded that none applied to these facts.
The Court conceded that "under certain circumstances, communications between an insurer and its insured may be shielded from discovery by the attorney–client privilege. That appears to be the majority rule." However, their conclusion is that the Texas evidence code must be demonstrated to provide a privilege, which they held XL failed to demonstrate/prove in this instance.
The Court recognized that the employer's deductible made them interested in the outcome of the compensation case. But, held that the Texas rule "requires that the communication be made to a lawyer or her representative representing another party in a pending action." Noting that Texas compensation claims are against the carrier, "with limited involvement of the employer in the adjudication of the rights to benefits," the Court concluded that an employer is not a party to the workers' compensation proceedings. The opinion explains that an employer/carrier could be joint clients, but that they were not in these comp proceedings.
Both cases are worthwhile reading for workers' compensation practitioners. Certainly, the Florida evidence code is not consistent with Texas' code. However, careful counsel will be aware of the distinction and the fact that exceptions exist to the "majority rule." Careful practitioners will want to be sure that they know what communications are privileged, and which might be subject to disclosure in either underlying or subsequent proceedings.
