United States District Court, D. South Carolina, Charleston Division
WENDY WELLIN, as the Special Administrator of the Estate of Keith S. Wellin and as Trustee of the Keith S. Wellin Florida Revocable Living Trust u/a/d December 11, 2011, PLAINTIFF,
PETER J. WELLIN, et al., DEFENDANTS, LARRY S. MCDEVITT, as Trustee of the Wellin Family 2009 Irrevocable Trust, PLAINTIFF,
PETER J. WELLIN, et. al, DEFENDANTS, PETER J. WELLIN, et. al., PLAINTIFF,
WENDY WELLIN, individually and as Trustee of the Keith S. Wellin Florida Revocable Living Trust u/a/d December 11, 2011, DEFENDANT.
SPECIAL MASTER'S REPORT AND RECOMMENDATION RE:
WELLIN CHILDREN'S MOTION TO COMPEL, OR IN THE
ALTERNATIVE, FOR IN CAMERA REVIEW (ECF NO. 718 IN
before the undersigned is the motion filed by Peter J.
Wellin, Cynthia W. Plum. Marjorie W. King, and Friendship
Management, LLC (collectively, the "Wellin
Children") to compel production of two documents
previously clawed back by Wendy Wellin ("Wendy").
Specifically, the Wellin Children challenge Wendy's
assertions of privilege and claw-backs of the July 2, 2011
email bates labeled WCHW - CANDLER 000437, and the July 12,
2011 email bates labeled Hart-Lane000217 - 000218. These two
emails were introduced as Exhibit 28 and Exhibit 31,
respectively, during the deposition of Wendy's estate
planning attorney, Richard Candler ("Candler"), on
March 28, 2017. Based on Wendy's counsels'
communications with Candler and Candler's testimony
during the deposition, the emails were clawed back by
Wendy's counsel under the theory they are protected by
the attorney-client privilege and/or applicable exceptions to
waiver of the same. For ease of reference, these email
documents are hereinafter referred to as "Exhibit
28" and Exhibit 31" in this Report and
argues that Exhibit 28 and Exhibit 31 were properly clawed
back pursuant to Paragraph 11 of the Court's Second
Amended Consent Confidentiality Order (ECF No.
359). Paragraph 11 of the Confidentiality
Order allows for documents to be clawed back in the case of
inadvertent disclosure of privileged information. ECF No.
359. In the event of a dispute regarding the application of
privilege to a document that has been clawed back, the
Confidentiality Order allows the parties "to challenge a
supplying party's claims that information is privileged
or protected" and "request the Court to determine
whether the document or information is privileged or
protected" via "in camera review[.]"
Id. at 10-11. The Confidentiality Order further
provides that "[t]he burden of proving the information
or document is privileged or protected shall remain with the
party asserting the privilege or protection."
Id. at 11. Counsel for Wendy provided the
undersigned copies of Exhibit 28 and Exhibit 31 for in camera
review during the hearing on this matter on March 7, 2018.
The undersigned has reviewed the Exhibits, as well as the
applicable law and the arguments of counsel, and makes the
following Report and Recommendation to the Court.
motion is before the undersigned, sitting as Special Master,
pursuant to the February 17, 2015 Order of the United States
District Court for the District of South Carolina, Charleston
Division, Hon. David C. Norton presiding. See ECF
Nos. 270, 258, and 35. The above captioned lawsuits involve
multiple issues surrounding the handling and disposition of
the assets, trusts, and estate of Keith S. Wellin (Keith).
The factual allegations and procedural histories of these
cases are extensively outlined in the Order of Judge Norton
issued in Wellin I, Case No. 2:13-cv-1831-DCN, ECF
No. 158, filed on June 28, 2014, and in the Amended Report
and Recommendation of the Special Master, ECF No.
320, filed on July 31, 2015.
AND ARGUMENTS OF COUNSEL RELEVANT TO THE PRESENT
an estate planning, administration, and tax planning attorney
who represented Wendy between February 2003 and his
retirement in 2015, was deposed as a fact witness to this
litigation on March 28, 2017. It is undisputed by both
parties that Candler never represented Keith Wellin
("Keith"). However, Candler testified that he was
authorized by Keith through Keith's estate planning
attorney, Tom Farace ("Farace"), to review portions
of Keith's estate plan that affected Wendy for use in
advising her. Candler also testified that he represented
Heather Lane ("Heather"), Wendy's daughter, and
provided estate planning advice to her as to her own estate.
During the deposition, counsel for the Wellin Children
examined Candler on some thirty-five (35) exhibits. Exhibits
28 and 31 were then clawed back by counsel for Wendy based on
Exhibit 28 and Arguments of Counsel
28 is an email sent from Wendy to Candler dated July 3, 2011.
The question posed during the deposition as to this document
was, "And is that work that she's referring to
having a - an independent person appointed to manage
Keith's assets, institution, or person?" Exhibit 28
was then clawed back following a privilege discussion between
counsel for Wendy and Candler, which led Wendy's counsel
to a determination that the document was protected by the
attorney-client privilege. On November 8, 2017, counsel for
the Wellin Children sent Wendy's counsel a letter
requesting clarification as to whether Exhibit 28 contains a
request that Candler perform legal work on behalf of Wendy or
on behalf of Keith. On November 16, 2017, Wendy's counsel
responded and explained the context of Exhibit 28:
As to Exhibit 28, the stated reason for the claw back was
attorney-client privilege. As Mr. Candler testified, he did
not have an attorney-client relationship with Mr. Wellin. And
as Mrs. Wellin testified, for most of her marriage, she acted
as a secretary for Mr. Wellin, and he liked things to be done
quickly when he asked for them. The context of this
particular email exemplifies that role of Mrs. Wellin. Mr.
Wellin wanted something done, and she asked Tom Farace, but
she received his out-of-office reply, so in an effort to get
it done, she attempted to ask advice of her own counsel.
Ultimately, Farace visited Keith in July 2011 in response to
the email Mrs. Wellin originally sent him, and Mr.
Wellin's changes were made in August 2011. However, Mrs.
Wellin's counsel did not make those changes; instead, he
reached out to Tom Farace. Therefore, it does not matter that
Mrs. Wellin was reaching out on Mr. Wellin's behalf at
the time because the relationship would have had to have been
created by Mr. Wellin and Mr. Candler, and no such
relationship was created or acted upon. Therefore, the email
was properly clawed back as it is protected by
dated November 17, 2017 (attached as "Exhibit B" to
Wellin Children's Motion).
opposition to Wendy's counsel's claim that Exhibit 28
is protected by the attorney-client privilege, counsel for
the Wellin Children make four general arguments as to why
Exhibit 28 should not have been clawed back and the
attorney-client privilege does not apply.
they emphasize that Wendy admits she was not emailing Candler
in her capacity as Candler's client, but rather her
capacity as Keith's "secretary" or agent.
Moreover, Wendy admits that no attorney-client relationship
between Candler and Keith "was created or acted
upon." Accordingly, the Wellin Children contend Exhibit
28 is not a communication made on behalf of a client to the
client's attorney such that the attorney-client privilege
the Wellin Children argue that, to the extent a privilege
does apply, this court has already held that Keith waived
privilege over his communications with counsel regarding his
estate planning matters prior to 2013 because Keith
consistently shared, and authorized his counsel to share, all
such communications with his children. See ECF No.
336 at 5-10; see also ECF No. 366 (Order adopting
Report and Recommendation). Although the Court's prior
holding was focused on communications between Keith and
Farace, the Wellin Children contend that the same logic would
apply to Exhibit 28. Specifically, they assert that there is
no basis to conclude that Keith's willingness to share
all matters related to his estate planning extended to
communications with Farace, but did not extend to
communications regarding the same subject matter that were
made by Wendy on Keith's behalf solely because Farace was
out of his office. As previously set forth by the
Keith's undisputed desire to share his estate planning
communications to and from Farace with his children warrants
a finding of waiver of the attorney-client privilege in this
instance. To the extent such communications were undertaken
by Ms. Wellin on behalf of Keith and regarding his estate
planning, they should be disclosed.
ECF No. 336 at 9. Accordingly, the Wellin Children contend
that any attorney-client privilege that exists as to Exhibit
28 has been waived.
and closely related to the above, the Wellin Children argue
that the record demonstrates that, prior to 2013, Keith had
no intention of confidentiality with respect to
communications relating to his estate planning for similar
reasons that any privilege that did exist was
waived-i.e. because Keith consistently shared, and
authorized his counsel to share, all such communications with
his children such that there was no intention of
confidentiality as to the communications. Because the
attorney-client privilege only applies where an intention of
confidentiality exists, the attorney client privilege does
not apply to Exhibit 28, according to the Wellin Children.
the Wellin Children point out that the testamentary exception
has been applied to communications made by Keith or on
Keith's behalf relating to his estate planning.
See ECF No. 393. Accordingly, to the extent Exhibit
28 relates to Keith's estate planning, the Wellin
Children argue it is subject to the testamentary exception to
the attorney-client privilege (if privilege attached in the
first place). Although this Court's previous testamentary
exception ruling was directed toward the production of
materials in the Bennet file, the Wellin Children argue that
the testamentary exception is not limited to the file of a
single law firm, and the rationale for applying the exception
applies equally to communications made on Keith's behalf
to other lawyers.
support of their argument that Exhibit 28 was properly clawed
back, counsel for Wendy argue that the email is protected
from disclosure by the attorney-client privilege, as it
represents a confidential communication between a client
(Wendy) and her attorney (Candler) that was not disclosed to
any third party. Although Wendy requested legal advice on
behalf of Keith, Candler neither represented Keith nor
performed any work for him, Wendy's counsel further
avers. Accordingly, counsel for Wendy claim that "any
legal advice Mrs. Wellin requested would have been directed
to her for the purpose of her informed decision making as
opposed to Mr. Wellin directly." ECF No. 722 at 7.
for Wendy further contend that the Wellin Children's
arguments as to Exhibit 28 and waiver via third-party
disclosure, which mirror the analysis applied from previous
rulings in this case, are not persuasive. By making these
arguments, counsel for Wendy asserts that the Wellin Children
are attempting to expand prior rulings of this Court into a
blanket waiver of the attorney-client privilege.
Specifically, they point out that the Court's previous
decision relating to waiver of the attorney-client privilege
were directed solely towards Keith's communications (or
communications made on Keith's behalf) with Farace and
the law firm Nixon Peabody.
Wendy's counsel contends that the testamentary exception
only applies to statements made from the deceased to his
counsel about the execution of his will or similar
document. Because Candler was not Keith's attorney and
the subject matter of Exhibit 28 does not include discussion
of the execution of a will or similar document, it does not
fall within the testamentary exceptions according to
Wendy's counsel. Instead, they maintain that Exhibit 28
is a confidential communication between Wendy and her
attorney requesting legal advice that was not intended to be,
and was not, shared with a third party. As such, Wendy claims
Exhibit 28 is protected from discovery by the attorney-client
privilege and was properly clawed back during Candler's
Exhibit 31 and Arguments of Counsel
31 is an email from Wendy to Candler dated July 19, 2011, to
which Wendy also copied her daughter, Heather, as a
recipient. During Candler's deposition, Exhibit 31 was
clawed back on the stated basis that Candler's
representation of both Wendy and Heather constituted a
"joint representation" such that Heather's
inclusion to the communication did not constitute a waiver of
Wendy's attorney-client privilege. Wendy's counsel
also explained and clarified their position in regards to
Exhibit 31 in their letter to opposing counsel dated November
As to Exhibit 31, my objection was "And I'm going to
claw this back because I found out today about the joint
representation. So I'm going to claw that back." I
understand your position to be is [(sic)] that Exhibit 31
should not have been clawed back because the interest between
Mrs. Wellin and Heather Lane was not identical and because
the representation was concurrent. While we can agree that
the representation of Mrs. Wellin and Heather Lane was not
joint as to Mrs. Wellin's estate planning, Candler did
represent them concurrently regarding estate matters, and
their interests are identical in this email; therefore, if
not the joint client doctrine, the common interest exception
to waiver of the attorney-client privilege applies.
Specially, Mrs. Wellin and Heather Lane's interests are
identical in this correspondence because Mrs. Wellin included
Heather to find out whether Heather was interested in
planning around an asset of Mrs. Wellin's, specifically
the house in Florida. Mrs. Wellin wanted to know whether
Heather wanted the home as part of Mrs. Wellin's estate
should something happen to Mrs. Wellin. Moreover, the email
was properly clawed back because federal common law supports
the extension of privilege to agents, and familial
relationships can certainly form the basis of an agency
relationship. As observed by the Middle District of North
Carolina, "[c]ases finding an agency relationship
sufficient to uphold an attorney-client privilege involve
relationships with familial or professional aspects."
Atwood v. Brulington Indus. Equity, Inc., 908 F.Supp
319, 323 (M.D. N.C. 1995)(citing In re Grand Jury
Proceedings, 947 F.2d 1188 (4th Cir. 1991)
(accountant-client relationship) and Kevlik v.
Goldstein, 724 F.2d 844 (1st Cir. 1984) (father-son
relationship)). The key question in determining the existence
of a privileged communication is whether the client
reasonably understood the conference to be confidential, and
including Heather in this aspect of her estate planning was
meant to [be] confidential.
dated November 17, 2017 (attached as "Exhibit B" to
Wellin Children's Motion).
conjunction with the above letter of counsel, Wendy's
Response in Opposition to the present Motion further sets
forth and expands the reasons Wendy's counsel believes
Exhibit 31 was properly clawed back under the Confidentiality
Wendy's counsel argues that Exhibit 31 is protected from
disclosure by the express terms of the Florida
attorney-client privilege statute. Wendy's counsel
contends that Florida privilege law controls by application
of the choice of law analysis utilized by the Court
previously in this litigation. (See ECF No. 503, pp.
7-20). Under Florida law, a communication remains
confidential if it is "not intended to be disclosed to
third persons other than: 1. Those to whom disclosure is in
furtherance of the rendition of legal services to the client.
2. Those reasonably necessary for the transmission of the
communication." Fla. Stat. § 90.502(1)(c).
According to Wendy's counsel, the disclosure of the
communication set forth in Exhibit 31 to Heather was in
furtherance of the rendition of legal services to Wendy, as
Wendy was seeking a dialogue with Candler and Heather so that
she could make an informed decision about an asset of her
estate, the response to which would assist Candler in
offering legal advice to Wendy as to her potential estate.
Furthermore, Wendy contends there was a mutual intent and
understanding between the parties to Exhibit 31 that the
communication was to remain confidential. Accordingly, Wendy
argues that Exhibit 31 is protected from discovery by the
express terms of the Florida attorney-client privilege
counsel also cites to a variety of case law from various
jurisdictions, including Florida and South Carolina, for the
proposition that third-party disclosure of communications
that otherwise would be subject to the attorney-client
privilege does not necessarily destroy privilege. Generally,
these cases relate to what is described by the United States
Bankruptcy Court for the Southern District of Florida as the
"agency exception" to waiver of the attorney-client
privilege in a case that is also cited by Wendy's counsel
in support of their position. In re Int'l Oil Trading
Co., LLC, 548 B.R. 825, 834, 62 Bankr. Ct. Dec. 145
(U.S. Bankr. S.D. Fla. 2016). In these cases cited by
Wendy's counsel, courts have variously applied the agency
exception to circumstances where non-attorney professionals
and non-professionals such as accountants, interpreters, or
certain family members of the client are present during
attorney-client commutations for purposes of facilitating
ease of communication and effective representation between
the client and attorney.
further support for this position, Wendy's counsel cites
to the First Circuit case of Kevlik v. Goldstein,
724 F.2d 844, 849 (1st Cir. 1984), which stands for the
proposition that the attorney client privilege was not waived
in a situation in which a father "acting in a normal and
supportive parental fashion" was present with his son
during a conference with a potential attorney wherein he
"explained in full detail the events that happened on
the night of [his] arrest." (previously cited in letter
from Wendy's counsel, attached to Wellin Children's
motion as Exhibit B).
Wendy argues that the common interest doctrine is an
exception to the attorney-client privilege, which applies to
Exhibit 31 because Candler represented both Wendy and Heather
concurrently regarding their respective estates. Quoting
Florida case law, Wendy notes that "the common interest
exception to waiver is a common law doctrine by which Courts
uphold attorney-client privilege, in spite of the disclosure
of attorney-client communications to a third party, because
that third party shares a 'common interest' with the
client." ECF No. 722 at 11 -12 (quoting in part In
re Int'l Oil Trading Co., LLC, supra, 548 B.R. at
832). Because Candler represented Wendy and Heather
concurrently regarding their respective estates and neither
Florida nor South Carolina law expressly requires that
individuals have separate counsel for the common interest
doctrine to apply, Wendy argues that Exhibit 31 is privileged
and confidential pursuant to the common interest exception to
waiver of the attorney-client privilege.
to the extent South Carolina privilege law is applicable,
rather than Florida law, Wendy's counsel contends the
communication is protected from disclosure by South
Carolina's own "agency exception" to waiver of
the attorney-client privilege. Specifically, citing to
State v. Hitopoulus, 279 S.C. 549, 550, 309 S.E.2d
747, 748-49 (1983) and State v. Thompson, 329 S.C.
72, 75, 495 S.E.2d 437, 438-39 (1998), Wendy's counsel
outlines that the South Carolina Supreme Court devised a
two-factor balancing test to determine whether the
attorney-client privilege extends to communications between a
client and a non-lawyer: (1) the need of the attorney for the
assistance of the non-lawyer to effectively represent his
client, and (2) the increased potential for inaccuracy in the
search for truth if the trier of fact is deprived of valuable
witnesses. According to Wendy's counsel, Heather's
inclusion to Exhibit 31 and her assistance as to the subject
matter of the communication by way of her response to the
same would be necessary to Candler for him to effectively
advise Wendy as to her estate. As the communication was
confidential in nature and Heather was "acting as an
agent to respond to Candler regarding her desire for a
potential asset in her mother's estate[, ]" counsel
for Wendy argues that Exhibit 31 falls into the exception
delineated by the Supreme Court in Hitopoulus and
for the Wellin Children attacks each of these positions in
turn. First, they argue that Heather's inclusion as a
recipient of the communication set forth in Exhibit 31
destroyed any intention of confidentiality such that the
attorney-client privilege would not apply. Even if the
attorney-client privilege did attach, the Wellin
Children's counsel asserts that confidentiality was
waived by the inclusion of a third-party to the communication
under the general principles of attorney-client privilege
the Wellin Children argue there is no evidence that Heather
acted as Wendy's agent for purposes of the agency
exception to waiver of the attorney-client privilege. Citing
to South Carolina law, counsel for the Wellin Children
contend that the test to determine agency is whether or not
the purported principal has the right to control his alleged
agent. ECF No. 718 at 7 (citing to Peoples Fed. Sav.
& Loan Ass'n v. Myrtle Beach Golf & Yacht
Club, 310 S.C. 132, 145, 425 S.E.2d 764, 773 (Ct. App.
1992). Citing to Florida law, the Wellin Children's
counsel also assert that the agent must consent to the
purported efforts of the principal to manifest control.
Id. at 8 (citing to McCaskill v. Navient Sols.,
Inc., 178 F.Supp. 3s 1281, 1292 (M.D. Fla. 2016).
Ultimately, they claim the agency exception does not apply to
Exhibit 31 because there is no evidence that Heather ever
manifested consent to be subject to the control of Wendy or
to act on her behalf.
counsel for the Wellin Children summarily dismiss Wendy's
claim that the common interest exception would apply to
Exhibit 31. Specifically, citing to a previous decision by
the Court in this case, the Wellin Children contend that the
common interest doctrine only applies when parties with
separate lawyers consult together under the guise of
a common interest or defense. Id. (citing to ECF No.
502 at 33-34). Because Exhibit 31 involves a communication
between two clients of the same attorney, the Wellin
Children contend that the common interest exception to waiver
of the attorney client privilege does not apply.
for the Wellin Children also assert that the joint client
exception does not apply to Exhibit 31. They note that, under
both Florida and South Carolina Law, the joint client
doctrine (as well as the common interest doctrine) is
typically only applied in the context of communications that
take place during existing litigation or prior to anticipated
litigation. Id. at 8-9. However, they concede that
some courts have applied the joint client doctrine in
non-litigation context where two or more clients retain a
single attorney to assist them on a single matter in which
they share a common legal interest. Id. at 9.
Nevertheless, citing to Duplan Corp. v. Deering Miliken,
Inc., 397 F.Supp 1146, 1174-75 (D.S.C. 1974), the Wellin
Children contend that this non-litigation exception is only
applicable in two scenarios: (1) where a communication is
shared with multiple clients because one client owes a duty
to the other client that necessitates the sharing of
information, or (2) where joint clients of a single attorney
are entering into a direct transaction with one another and
therefore need to share information. Id. at 9-10.
Additionally, the Wellin Children note that other
jurisdictions have required a higher degree of
"commonality of interest" as to the subject matter
of the communication between co- clients than is required
under the common interest doctrine. Id. at 10-11.
Because Exhibit 31 is an email that was sent at a time when
Wendy does not claim that she or Heather were involved in or
anticipating litigation, the standard application of the
joint client exception would not apply, according to counsel
for the Wellin Children. Moreover, counsel for the Wellin
Children note that Wendy does ...