Deep Woods Holdings LLC v Pryor Cashman LLP  2016 NY Slip Op 31077(U)  June 8, 2016  Supreme Court, New York County  Docket Number: 652886/2015  Judge: Saliann Scarpulla discusses the attorney-client privilege in the setting of joint representation.  This case is about the alleged failure to make a stock option call, and the loss of a large amount of money.

“In this action for legal malpractice and breach of fiduciary duty, plaintiff Deep Woods Holdings LLC (“Deep Woods”) moves to compel defendants Pryor Cashman LLP and Pincus Raice to produce certain portions of their client files for David Lichtenstein (“Lichtenstein”) and Park Avenue Bank that were withheld on the assertion of attorney/client privilege. This action arises out of the failure to exercise a call option originally held by Lichtenstein to purchase shares in Park A venue Bank from Savings Deposit Insurance Fund for the Republic of Turkey (“SDIF”). In 2005, Lichtenstein sought to exercise the call option, but SDIF refused to transfer the shares to him. After SDIF refused to transfer the shares, Lichtenstein and Donald Glascoff(“Glascoff’), the chairman of Park Avenue Bank, determined that a new entity should be created- Deep Woods – to litigate the enforcement of the call option. The defendants Pryor Cashman and Raice served as counsel to Lichtenstein and Park A venue Bank, and assisted them in creating Deep Woods and transferring the call option to the new entity. Thereafter, Deep Woods became a client of the defendants as well. Deep Woods’ original members, according to the defendants, were Lichtenstein, Glascoff, and Charles Antonucci, a former officer and director of Park Avenue Bank.   ”

“In this action, Deep Woods contends that defendants committed legal malpractice by failing timely to exercise the call option and by failing properly to litigate the timeliness issue in the SDIF litigation. 1 Deep Woods further claims that the defendants breached their fiduciary duties by failing to disclose facts underlying the SDIF litigation, including the fact that Raice failed to exercise the call option in a timely manner, which allegedly created a conflict of interest between the defendants and Deep Woods. ”

“The attorney-client privilege applies to confidential communications between attorneys and their clients made in the course of professional employment. CPLR §4503(a). For the privilege to apply, the attorney-client communication “must be made for the purpose of facilitating the rendition of legal advice or services·, in the course of a professional relationship.” Rossi v. Blue Cross & Blue Shield a/Greater New York, 73 N.Y.2d 588, 593 (1989). The parties do not dispute that the documents sought by Deep Woods from the defendants’ client files for Lichtenstein and Park Avenue Bank are attorney-client communications. Deep Woods contends, however, that these documents are not protected by attorney-client privilege because Lichtenstein, Park Avenue Bank, and Deep Woods were jointly represented by the defendants from 2007 to 2015. ”

“The attorney-client privilege also does not apply to the documents at issue because Lichtenstein and Park Avenue Bank waived the privilege by making selective disclosure of their attorney-client communications concerning the SDIF litigation to Deep Woods. Selective disclosure of privileged material “is not permitted as a party may not rely on the protection of the privilege regarding damaging communications while disclosing other self-serving communications.” Vil!. Bd. o/Vill. of Pleasantville v. Rattner, 130 A.D.2d 654, 655 (2d Dep’t 1987); Corrieri v. Schwartz & Fang, P.C., 106 A.D.3d 644, 645 (1st Dep’t 2013). Lichtenstein and Park Avenue Bank’s disclosure of their attorney-client communications during the SDIF litigation waived privilege as to other communications concerning the same subject matter. “