The attorney-client privilege can come with a price


The attorney-client privilege is one of the oldest and most revered evidentiary privileges in our legal system. But as the Michigan Court of Appeals recently held in Odeh v Auto Club Insurance Association, assertion of this privilege is not always without cost.

The plaintiff in Odeh was in a car accident in 1998 and sustained serious injuries, including spinal cord damage that left him quadriplegic. In 2009, he filed a lawsuit against his insurer, “claiming that he was entitled to payment for family attendant care services and case management services, but that defendant had kept the availability of those hidden from him back in 1998.” He sought compensation for eleven years of services.

The defendant-insurer argued that the plaintiff’s damages were limited to those incurred during the year preceding the lawsuit, relying on both the plain language of the no-fault act and its interpretation by the Michigan Supreme Court in Devillers v Auto Club Insurance Association. The plaintiff responded that the insurer was equitably estopped from relying on the one year back rule because, in his view, he relied on the defendant-insurer’s representations. The trial court disagreed and granted partial summary disposition in the defendant’s favor.

On appeal, the Michigan Court of Appeals recognized that its ability to use equitable remedies to avoid the plain language of governing statutes is limited, particularly in light of cases like Devillers. It affirmed the trial court, however, for another reason.

To establish equitable estoppel, the plaintiff had to show that he relied on the defendant-insurer’s statements about the availability of compensation for family care. If the plaintiff had been advised by his own lawyers that he could seek recovery for those services, his equitable estoppel theory failed.

This is where the attorney-client privilege became an issue. When the defendant-insurer asked during the plaintiff’s deposition about whether his attorney had advised him to seek recovery for his family’s services, the plaintiff asserted the attorney-client privilege. The defendant-insurer was therefore precluded from discovering whether the plaintiff actually relied on anything it did or did not say. And without the ability to probe the merits of the plaintiff’s equitable estoppel theory, neither the trial court nor the Court of Appeals could allow this equitable theory to trump the plain language of the no-fault act.

The attorney-client privilege is an indelible part of our legal system. Odeh shows, however, that its assertion is not always without risk. When the privilege shields information necessary to justify a legal or equitable theory, a plaintiff may face a difficult choice: waive the attorney-client privilege or waive a claim.

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