In Las Olas River House Condominium Association Inc. vs. Lorh, LLC, 181 So. 3d. 556 (Fla. 4th DCA 2015, the decision reviewed the attorney-client privilege when communicating with community association clients through their manager. Florida law provides that a client has a privilege to refuse to disclose, and to prevent any other person from disclosing, the contents of confidential communications when such other person learned of the communications because they were made in the rendition of legal services to the client.
Community Association Managers (CAMS) are almost always the main point of contact between the board of directors and their attorneys. If the privilege between attorneys and the CAM, on behalf of an association is threatened, chaos may ensue in litigation, as those communications may be obtained by opposing parties and their counsel.
In the Las Olas case, corporate owners of two units in the condominium (owners) brought a suit after years of disputes between the owners association, during which they repeatedly threatened to sue the association and its directors and agents. In the course of litigation, the owners had their lawyer demand that Las Olas provide them with copies of communications between the association and its attorney that mentioned the owners. Counsel for the Association objected asserting the attorney-client privilege. This seemed like a garden variety situation of a party seeking access to privileged communications. However, because the communications were received by, and copied to, the Association’s CAM and his supervisor, the owners argued the attorney-client privilege was waived.
The Association’s lawyers replied arguing the scope of a condominium association is more similar to a corporation than an individual. Further, a CAMs duties require them to communicate with an association’s legal counsel on their behalf. They further argued that the CAMs role in keeping the association’s counsel informed of day-to-day events that may lead to their need for legal services. Without the manager the board of directors would have no point of contact with counsel.
The trial court disagreed and rejected the privilege reasoning the manager and supervisor were not “employees” of the association within the meaning rendered in the case of Southern Bell Telephone & Telegraph Co. v. Deason, 632 So.2d 1377 (Fla.1994). The Association appealed the decision.
The appellate court reversed the trial court’s ruling and sent the case back to the trial court to analyze, using the test articulated by the Deason test, a 5 prong standard to consider each communication, to determine the extent of the condominium’s privilege in the corporate context.
The Deason court requires the following to be applied to determine whether a corporation’s communications are client-attorney privileged:
1. whether the communication would not have been made but for the contemplation of legal services;
2. whether the employee making the communication did so at the direction of his or her corporate superior;
3, whether the superior made the request of the employee as part of the corporation’s effort to secure legal advice or services;
4. whether the content of the communication relates to the legal services being rendered, and the subject matter of the communication is within the scope of the employee’s duties; and
5. whether the communication is not disseminated beyond those persons who, because of the corporate structure, need to know its contents.
A ruling by the trial court applying the Deason test has not yet been issued, but when you read each prong of the Deason test, it’s easy to find a number of circumstances involving privileged communications with management companies where a court could find the privilege waived. For example:
1. Communications with persons other than the CAM (his/her secretary, other employees of the management company, management of the management company, etc.); and
2. Failure to have a clear written agreement as to the role of the manager in the legal affairs of the association.
We have suggested that our clients consider making the portfolio CAM an assistant secretary of the Associations. The CAM would then be an officer of the Association and more or less fully covered by the privilege, as long as the information is not spread throughout the independent contractor management company. Additionally, management companies should consider amending their contracts to specifically address the CAM’s manager’s role in the receipt and transmission of confidential communications and communication with counsel, including a limitation on dissemination of privileged (all) legal communication within the company.
If you have questions about this case, or issues surrounding the client-attorney privilege, you should immediately consult with us.