On interlocutory appeal, the Indiana Court of Appeals affirmed that a joint defense agreement entered into by an attorney and the trust he helped to set up and for which he served as trustee did not bar the trust’s later lawsuit against him for claims arising from their business relationship.
Attorney David E. Price created the Charles Brown Charitable Remainder Unitrust Trust in 1995 and was named trustee in 2000. Six years later, the Department of Justice brought criminal charges against Brown and then Price alleging, among other claims, that they conspired to defraud the IRS, falsified tax returns and diverted trust funds for personal use.
In 2008, Brown and Price executed a joint defense agreement which allowed the two to share information which was privileged or confidential in nature without waiver of any applicable privilege or other protection against disclosure. While the criminal charges were pending, Price was removed as trustee and Brown and his wife sued Price, alleging breach of trust, theft, criminal conversion, deception, attorney malpractice and breach of fiduciary duty.
Price countersued for trust accounting and appointment of trustee, and the two cases were consolidated. In 2009, Brown terminated the JDA. The two were subsequently acquitted of all criminal charges.
Price sought summary judgment in David E. Price, Price & Associates, LLC, and Price & Collins, LLP v. Charles Brown Charitable Remainder Unitrust Trust, Charles Brown, and Charlotte Brown, 74A01-1409-TR-401, arguing that since the criminal charges were dropped and the JDA terminated, the trust’s claims against him cannot go forward because information and materials shared by the two pursuant to the JDA could not be separated from matters relevant to the prosecution of the civil claims. The trial court denied his motion.
The Court of Appeals noted that there isn’t an Indiana case dealing with JDAs in detail, so it looked to other jurisdictions for guidance. The judges affirmed the denial of Price’s motion, pointing out that Brown and Price did not explicitly waive their right to sue one another for alleged claims arising from their business relationships.
There is also nothing to show what evidence or communications are at issue or that the Browns or the trust could not prove their claims without disclosing communications that are privileged under the JDA, Senior Judge John Sharpnack wrote.
“Specific claims of privilege will need to be resolved as they are encountered in discovery or at trial,” Sharpnack wrote.
The COA denied the trust’s request for appellate attorney fees and remanded the matter for further proceedings.