ATTORNEY-CLIENT PRIVILEGE

1.  Discuss matters with non-directors outside of executive session.

2.  Allow non-directors to attend executive session who have no legitimate purpose for attending.

3.  Distribute executive session minutes or privileged documents to non-directors.

L.A. Times. The L.A. Times ran a column in its Sunday Real Estate section with information that many consider erroneous. The authors of the "Associations" column (Nov. 27, 2005, p. K11) commented that discussion by an association's attorney with its management company "constitutes a serious breach of confidentiality."

The authors then advised readers that "If your board signed a management company contract relinquishing that privilege by allowing management employees to make direct contact with the attorney, the board should be sued for breach of its fiduciary duty."

Contrary Opinion. In my opinion, there is no breach of fiduciary duty and no breach of the attorney-client privilege; such communications are provided for by law:

Communications between an association's attorney and its managing agent do not lose their confidential character since managing agents are generally necessary to further the association's interests and are reasonably necessary for the purpose of transmitting information between the attorney and the board. [See Evid. Code §952 & §912(d), comment; Benge v. Sup.Ct. (1982) 131 CA3d 336, 346; San Francisco v. Sup.Ct. (1951) 37 C2d 227, 234-235]. Moreover, a liaison between company officials and outside counsel is an "authorized representative" of the company. [State Farm v. Sup.Ct. (1997) 54 CA4th 625, 639].

Thus, confidential communications between legal counsel and the association's management company are privileged.

Recommendation. In my opinion, owners should NOT rush out and sue their boards. Directors are volunteers and it is both common and permissible for managing agents to act as a liaison between volunteer boards and the association's legal counsel. In any event, you should seek legal counsel regarding your particular situation.

 
Adrian J. Adams, Esq.
Adams Kessler PLC

Updated 8/21/2007