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Keywords

defendantlitigationattorneydiscoverymotionattorney-client privilege
defendantattorneydiscoverymotionattorney-client privilege

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Koch v. Specialized Care Services, Inc., 437 F.Supp.2d 362

Facts

Timothy Koch and his family were the sole shareholders of Specialized Risk International, Inc. (SRI), which was sold to Specialized Care Services (SCS) in 2003. As part of the sale, Koch entered into an employment agreement with United Health Group (UHG) and a Secondary Purchase Agreement regarding the remaining shares of SRI. Disputes arose between Koch and SCS management, culminating in a letter from SCS's in-house counsel claiming Koch had resigned, which Koch denied. This led to the current litigation over the interpretation of the agreements and the alleged wrongful conduct of the defendants.

Timothy Koch and his family were the sole shareholders of Specialized Risk International, Inc. (SRI), which was sold to Specialized Care Services (SCS) in 2003. As part of the sale, Koch entered into an employment agreement with United Health Group (UHG) and a Secondary Purchase Agreement regarding the remaining shares of SRI.

Issue

The main legal issues were whether the attorney-client privilege applied to communications between the defendants and their counsel and whether the crime-fraud exception to that privilege was applicable.

The main legal issues were whether the attorney-client privilege applied to communications between the defendants and their counsel and whether the crime-fraud exception to that privilege was applicable.

Rule

The court applied the Maryland attorney-client privilege, which protects confidential communications made for the purpose of obtaining legal advice, and recognized the crime-fraud exception, which allows for the discovery of communications made in furtherance of a crime or fraud.

The court applied the Maryland attorney-client privilege, which protects confidential communications made for the purpose of obtaining legal advice, and recognized the crime-fraud exception, which allows for the discovery of communications made in furtherance of a crime or fraud.

Analysis

The court found that while the communications between the defendants and their counsel were generally protected by attorney-client privilege, the crime-fraud exception applied to certain communications that were made in furtherance of the alleged fraudulent scheme to misrepresent Koch's resignation. The court determined that the defendants' conduct, as alleged by Koch, constituted fraud under Maryland law, thus allowing for the discovery of those communications.

The court found that while the communications between the defendants and their counsel were generally protected by attorney-client privilege, the crime-fraud exception applied to certain communications that were made in furtherance of the alleged fraudulent scheme to misrepresent Koch's resignation.

Conclusion

The court granted in part the employee's motions to compel the production of certain documents while denying others, and it granted the defendants' motion for a protective order regarding other communications.

The court granted in part the employee's motions to compel the production of certain documents while denying others, and it granted the defendants' motion for a protective order regarding other communications.

Who won?

The prevailing party was the employee, Timothy Koch, in that he successfully compelled the production of certain documents under the crime-fraud exception, which the court found applicable to the defendants' communications.

The prevailing party was the employee, Timothy Koch, in that he successfully compelled the production of certain documents under the crime-fraud exception, which the court found applicable to the defendants' communications.

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