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Keywords

contractbreach of contractdefendantattorneysubpoenadepositiondiscoverytrialmotiondue processcivil procedure
contractbreach of contractdefendantlitigationattorneysubpoenadepositiondiscoverystatuteappealpleadue process

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Resolution Trust Corp. v. Dabney, 73 F.3d 262, 64 USLW 2401, 33 Fed.R.Serv.3d 1061

Facts

The RTC, as receiver for Great Plains Savings and Loan Association, filed a breach of contract action against attorney B. Wayne Dabney and his law firm, alleging that they improperly prepared a title opinion that led to an unsecured loan to John Hudson. A few weeks before trial, the RTC decided to call a witness, Gerald Mildfelt, whom the defendants had previously been informed would not testify. During Mildfelt's deposition, RTC attorney Craddock instructed him not to answer questions unless permitted, claiming work product privilege. This led to the defendants filing motions to compel and to quash the subpoena issued by the RTC.

The RTC, as receiver for Great Plains Savings and Loan Association (Great Plains), brought a breach of contract action against attorney B. Wayne Dabney, and his law firm, Van Dyck, Hays, Dabney, Pullins, Rivas & Kingsolver, P.C., (collectively, the defendants), asserting that the defendants improperly prepared a title opinion relied upon by Great Plains in making a loan to John Hudson, causing Great Plains' loan to Hudson to be unsecured.

Issue

The main legal issues included whether the RTC's attorneys improperly asserted work product privilege during a deposition and whether the sanctions imposed against the RTC's attorneys were justified.

The Court of Appeals, Wesley E. Brown, Senior District Judge, sitting by designation, held that: (1) attorney's conduct in prohibiting witness, during deposition, from answering factual inquiries and in instructing witness not to answer any question unless attorney first allowed witness to answer was not valid assertion of work product privilege; (2) sanction based on court's costs in connection with discovery dispute was not proper under statute permitting sanctions for attorney's act of unreasonably and vexatiously multiplying proceedings; (3) sanction based on court's costs was permitted by court's inherent power to impose sanctions; (4) sanctions imposed against attorney who was not subject of request for sanctions violated due process; and (5) imposition of sanctions against attorney who obtained subpoena duces tecum was not abuse of discretion.

Rule

The court applied the principles of work product privilege, which protects an attorney's mental impressions and legal strategies, and the Federal Rules of Civil Procedure regarding discovery and sanctions.

A party may instruct a deposition witness not to answer when necessary to preserve a privilege. Fed.R.Civ.P. 30(d)(1). The work product privilege protects against disclosure of the 'mental impressions, conclusions, opinions, or legal theories of an attorney or other representative of a party concerning the litigation.' Fed.R.Civ.P. 26(b)(3).

Analysis

The court found that Craddock's conduct in instructing Mildfelt not to answer questions was not a valid assertion of work product privilege, as many questions did not seek protected information. The court also determined that the sanctions imposed were appropriate under the inherent power of the court to regulate its proceedings and deter misconduct, despite some procedural issues regarding the imposition of sanctions against Day.

The district court found that the positions taken by Craddock and Colbert in connection with these pleadings were not substantially justified and awarded defendants' attorney fees and expenses under Fed.R.Civ.P. 37(a)(4) for all activity related to these discovery disputes.

Conclusion

The appellate court affirmed the sanctions against Craddock and Colbert for their actions during the deposition but reversed the sanction against Day due to a lack of due process, remanding the case for further proceedings regarding her sanction.

The judgment of the United States District Court for the Western District of Oklahoma is AFFIRMED as to Craddock and Colbert and REVERSED as to Day and REMANDED for further proceedings.

Who won?

The prevailing party was the defendants, Dabney and his law firm, as the court upheld the sanctions against the RTC's attorneys for their improper conduct during discovery.

We affirm the sanctions imposed on Craddock and Colbert, but vacate the sanction against Day for lack of procedural due process.

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