Christine Simmons in the New York Law Journal reports today on Stock v Schnader Harrison Segal & Lewis LLP  2014 NY Slip Op 33171(U)  December 5, 2014  Supreme Court, New York County  Docket Number: 651250/13  Judge: Melvin L. Schweitzer.  The case raises a "novel" question of intra-law office attorney privilege, and whether the client is able to pierce communications which become "at issue."  The answer from Supreme Court is "Yes."

"The Court has reviewed letters from counsel for the parties regarding defendants’ withholding of 24 documents listed on defendants’ privilege log as attorney-client communications, and as to one document, attorney work product. Plaintiff argues that the documents are not privileged as to him because defendants were representing him at the time, the subject of the communications was that very representation, the participants did not consider the communications to be confidential as to plaintiff, and they were aware that the continued representation would be conflicted. Defendants oppose, arguing that the communications are protected by the in-house attorney-client privilege. The court finds that the attorney-client and work product privileges do not protect any of the documents. Stock is suing law firm Schnader Harrison Segal & Lewis LLP. (Schnader), and partner Christine Carty (Carty) for malpractice and breach of fiduciary duty. The lawsuit arises from
defendants’ representation of Stock in connection with his departure from employment with
MasterCard International Incorporated (MasterCard) in 2008. Stock alleges that defendants
failed to advise him that his departure would accelerate the expiration date for his stock options
worth $5 Million from ten years to between ninety and one hundred and twenty days. "

"According to Stock, after his options expired, defendants advised him to assert claims against MasterCard and its options plan administrator Morgan Stanley Smith Barney (MSSB). during the ensuing arbitration, at which Schnader attorneys other than Carty represented Stock, MSSB’s counsel notified Schnader that it planned to call Carty as a fact witness concerning whether Schnader’s failures in its representation of Stock contributed to the monetary losses he was seeking from MSSB. Carty consulted with Schnader partner and General Counsel Wilbur Kipnes regarding her anticipated testimony, and possible ethical issues. She was prepared for the arbitration by Schnader attorney Cynthia Murray (Murray). Murray and Schnader attorney
Thomas Hecht (Hecht) were assigned to simultaneously represent Stock in the arbitration.
The deposition transcript excerpts, attorney notes, and additional exhibits submitted by
plaintiff show that when Carty, Kipnes, Hecht and Murray were communicating about Carty’s
upcoming testimony, they did not expect their communications to be confidential as to their
current client, Stock. Carty testified at her deposition that: she understood that anything she
stated to Murray would be disclosed to Stock; and she had no expectation one way or the other
that Hecht would keep her forwarded e-mail with Kipnes confidential as to Stock."

"Finally, the documents fall under the "at issue" waiver, and defendants cannot selectively disclose self-serving documents regarding the same subject matter. The "at issue" waiver of the privilege occurs where a party affirmatively places the subject matter of its own privileged communication at issue in litigation, so that invasion of the privilege is required to determine the validity of a claim or defense of the party asserting the privilege, and application of the privilege 3 [* 3]would deprive the adversary of vital information. Credit Suisse First Boston v Utrecht-America Fin. Co., 27 AD3d 253, 254 (1st Dept 2006). "