RED VISION SYSTEMS, INC. AND TITLEVISION TEXAS, LLC
NATIONAL REAL ESTATE INFORMATION SERVICES, L.P., NATIONAL REAL ESTATE INFORMATION SERVICES, INC., AND NREIS OF TEXAS, LLC
Argued October 22, 2014
APPEAL OF: THOMAS K. LAMMERT, JR.
Appeal from the Order of the Court of Common Pleas, Allegheny County, Civil Division, No(s): GD13-008572. Before WETTICK, J.
William S. Stickman, IV, Pittsburgh, for appellant.
Roy E. Leonard, Pittsburgh, for Red Vision and Titlevision, appellees.
BEFORE: FORD ELLIOTT, P.J.E., ALLEN, and STRASSBURGER,[*]
Thomas K. Lammert, Jr. (Lammert), a non-party to this action, appeals from the February 26, 2014 order which denied his motion to quash subpoena and for protective order. Also before us is the motion of appellees Red Vision Systems, Inc. and Titlevision Texas, LLC (Plaintiffs, collectively) to quash some issues raised in the appeal. After careful review, we grant in part and deny in part Plaintiff's motion, and affirm the trial court's February 26, 2014 order.
This action was filed by Plaintiffs against National Real Estate Information Services, L.P. (NREIS, L.P.), National Real Estate Information Services, Inc. (NREIS, Inc.), and NREIS of Texas, LLC (Defendants, collectively). Plaintiffs are affiliated companies which provide real estate services such as title searches to customers throughout the United States.
Complaint, 5/14/2013, at 3. Plaintiffs filed a complaint in the Allegheny County Court of Common Pleas alleging that they performed a variety of services for Defendants pursuant to a number of different agreements and that Defendants failed to pay invoices for those services totaling more than $500,000. Id. at 3-6.
When Plaintiffs' attempts in May and June of 2013 to serve Defendants with the complaint pursuant to Pa.R.C.P. 400(a) were unsuccessful, they received permission to serve Defendants through certified mail and publication pursuant to Pa.R.C.P. 430. Order, 9/23/2013. Accordingly, Plaintiffs published notice of suit and notice to defend in the Pittsburgh Post-Gazette and Pittsburgh Legal Journal, and served NREIS of Texas by certified mail. Affidavit of Service, 9/27/2014; Affidavit of Service, 11/15/2013. Plaintiffs subsequently learned that each defendant corporation was defunct and/or dissolved.
Believing that Defendants transferred substantial assets to other entities in order to avoid paying creditors such as Plaintiffs, Plaintiffs sought " to obtain information relating to the disposition of [D]efendants' assets and to identify possible sources of recovery." Trial Court Opinion and Order, 2/26/2014, at 1. Such information might enable Plaintiffs " to amend their Complaint to raise causes of action based on the law governing fraudulent transfers." Id. The only source of such information of which Plaintiffs are aware is Lammert, who had been in-house counsel to each of Defendants, was an officer of NREIS, Inc. prior to its interests in NREIS, L.P. being sold, and a manager of NREIS Texas, which was a subsidiary of NREIS, L.P., and NREIS, LLC. Reply Brief to Plaintiffs' Brief in Opposition to Quash Subpoena, 12/12/2013, at 2.
On September 23, 2013, Plaintiffs filed a notice of intention to serve Lammert with a subpoena to attend and testify. In addition to requiring his testimony, the subpoena required Lammert to produce documents related to the identification of Defendants' management personnel and insurance coverage, and any transfer of Defendants' assets. Subpoena to Attend and Testify, 9/17/2013, at Exhibit 1.
Lammert filed a motion to quash the subpoena, claiming that many of the requested documents are protected by the attorney-client privilege, or would require the disclosure of sensitive information of third parties subject to non-disclosure agreements. Motion to Quash Subpoena and for Protective Order, 12/2/2013, at 3. Lammert further claimed that he would incur a " considerable burden and expense" in reviewing and categorizing the records, which are electronically-stored. Id. Plaintiffs filed an answer to Lammert's motion contesting the existence of any privilege, agreeing to the entry of a protective order to limit Plaintiffs' use of confidential information, and claiming that Lammert failed to demonstrate that complying with the
subpoena would be unduly burdensome. Answer to Motion to Quash Subpoena and for Protective Order, 11/19/2013, at 5-9.
The trial court denied Lammert's motion by an opinion and order filed February 26, 2014, holding (1) the attorney-client privilege did not protect Defendants' documents because Defendants no longer existed or had interests in need of protection; (2) Lammert would not violate any confidentiality agreements by producing documents pursuant to court order; and (3) because he need not concern himself with applicability of privilege or confidentiality agreement, Lammert may " blindly turn over" the documents, and thus need not undergo any burdensome review of the documents. Trial Court Opinion and Order, 2/26/2014, at 3-4.
On March 12, 2014, Lammert filed a notice of appeal. That same day, the trial court filed an order pursuant to Pa.R.A.P. 1925(a), indicating that the reasons for its decision were provided in its February 26, 2014 opinion.
Lammert presents the following questions for this Court's review.
1. Whether the attorney-client privilege survives the dissolution of a limited liability company, limited partnership, corporation or other legal entity, particularly when the legal entity continues to be subject to suit in the courts of the Commonwealth?
2. Whether former counsel to a dissolved limited liability company, limited partnership, corporation or other legal entity may invoke the attorney-client privilege on behalf of the legal entity?
3. Whether the Court of Common Pleas erred in denying Appellant's Motion to Quash Subpoena and for Protective Order where Appellant will be required to blindly produce confidential non-public personal information of third-parties and documents of clients other than Defendants?
4. Whether the Court of Common Pleas erred in requiring Appellant to produce the subpoenaed documents, which are essentially pre-complaint discovery, despite the unreasonable burden to Appellant?
Lammert's Brief at 3 (trial court answers omitted).
We begin by considering our jurisdiction over this appeal. Lammert asserts that the trial court's interlocutory order is immediately appealable as a collateral order under Pa.R.A.P. 313. Lammert's Brief at 1.
Generally, discovery orders are not appealable as they do not dispose of the litigation. However, Pennsylvania Rule of Appellate Procedure 313 provides that appeals may be taken from collateral orders, that is, those which are separable from and collateral to the main cause of action where the right is too important to be denied review and the question presented is such that if review is postponed until final judgment in the case, the claim will be irreparably lost.
PECO Energy Co. v. Insurance Co. of North America, 2004 PA Super 221, 852 A.2d 1230, 1233 (Pa. Super. 2004) (citations and quotation marks omitted). " Rule 313 must be interpreted narrowly, and each of the above prongs must be clearly present for an order to be considered collateral." J.S. v. Whetzel, 2004 PA Super 406, 860 A.2d 1112, 1117 (Pa. Super. 2004). Further, we apply the three-prong collateral order test separately to each issue raised in the appeal. Rae v.
Pennsylvania Funeral Directors Ass'n, 602 Pa. 65, 977 A.2d 1121, 1123 (Pa. 2009).
" Appellate review is appropriate when a colorable claim of privilege is asserted." PECO Energy Co., 852 A.2d at 1233. Because Lammert's first two questions raise a colorable claim of attorney-client privilege, " we find the instant discovery order collateral and appealable as it implicates potentially privileged material." Id.
Plaintiffs have filed a motion to quash this appeal in part. While they do not contest that Lammert's first and second questions are properly before us under Rule 313, Plaintiffs argue that Lammert's third and fourth questions do not meet the requisites of a collateral order. Appellees' Motion to Quash Issues to Be Raised on Appeal (Appellees' Motion), 4/2/2014, at 5-7.
While not contesting its severability from the main cause of action, Plaintiffs maintain that Lammert's third question " involves no claim of privilege sought to be protected but rather is a standard confidentiality objection to a discovery request." Appellees' Motion, 4/2/2014, at 5. Plaintiffs argue that the question does not involve " a deeply rooted public policy right too important to be denied review." Id. Plaintiffs also claim that postponement of review will not result in irreparable loss because no privilege is destroyed. Id. at 6.
Lammert counters that the right to privacy of personal information has been recognized as sufficiently important to satisfy the collateral-order test. Opposition to Plaintiffs' Motion, 4/9/2014, at 6. For example, in J.S., 860 A.2d at 1117, this Court held that an expert witness's " privacy interest in his income information raises a sufficiently important public policy concern" to warrant Rule 313 review of an order requiring him to produce IRS tax forms. Further, Lammert contends, once the sensitive, confidential information of the non-parties is disclosed, " the confidentiality attaching to this information is lost." Opposition to Plaintiffs' Motion, 4/9/2014, at 8 (emphasis omitted) (quoting Jones v. Faust, 2004 PA Super 180, 852 A.2d 1201, 1203 (Pa. Super. 2004)).
As for the documents which he claims are subject to " non-disclosure or confidentiality agreements" in the instant case, Lammert offers virtually no description. Lammert's Brief at 41. Rather, we are left to guess precisely what " confidential, sensitive and non-public personal information" is contained in these documents. Id. Without any indication of what type of information is contained in the documents, we are unable to determine that Lammert is seeking review of an important issue rooted in Pennsylvania public policy. Further, Plaintiffs have agreed to the entry of a protective order " to safeguard confidential documents and information." Brief in Opposition to Motion to Quash Subpoena, 12/30/2013, at 4 and Exhibit 2. See Gunn v. Automobile Ins. Co. of Hartford, Connecticut, 2009 PA Super 70, 971 A.2d 505, 512 (Pa. Super. 2009) (holding collateral order test not satisfied where only generalized, speculative concerns about possible privilege were asserted and confidentiality could be protected by entry of a protective order).
Plaintiffs also maintain that Lammert's fourth question, related to the burden he will sustain in complying with Plaintiffs' subpoena, fails to satisfy any of the prongs of the collateral order test. Plaintiffs' Motion, 4/2/2014, at 7. In his response, Lammert offers no argument as to what public policy will be offended if this issue is not reviewed immediately, let alone authority in support. Nor does he explain how his claim about the unreasonableness of the burden placed upon him will be irretrievably
lost if review is delayed. Indeed, from the record before us, we are unable to ascertain what burden he will suffer in ...