Keeping Attorney-Client Privileged Communication Just That:

Privileged Jerry Stein, Esq.

When an association hires an attorney, all communication between the attorney and the association’s board members are privileged. However, the attorney-client privilege does not generally apply when third parties are included in the communication. The most common way that the attorney-client privilege is waived is if an otherwise privileged communication is made in the presence of a third-party.

When an association is involved in a dispute, the board typically wants their community association manager to be involved in the decision-making process and often wants the manager to be the liaison with the attorney(s). Even though a manager is not technically a person protected by the attorney-client privilege, if the association, the attorneys, and the manager recognize the issue upfront, they can take steps to bring communication involving the manager within the protection provided by the attorney-client privilege.

Three Things That Must Be Done to Protect Manager Communications:

1. Recognize and Deal with the Privilege Issue Upfront Whenever an attorney is hired to handle a dispute involving the association, the attorney should immediately meet with the board to discuss whether the board wants the manager to be an active participant in the litigation process. After assessing the risk that the other side might claim that the manager’s involvement waived the attorney-client privilege, if the board decides that it wants the manger involved, the next step is to create a record that will persuade a court to find that the manger’s communication should also be privileged.

2. Establish Reasons Why the Manger Needs to Be Involved Typically board members don’t have the time, knowledge or experience to deal with litigation related issues. Because the manager is frequently the person most knowledgeable about the facts the attorneys needed to know in order to provide legal advice to the association, the manager is often essential to the board successfully resolving disputed claims. The reasons why the board wants and needs the manager involved should be discussed and agreed upon by the board and the attorneys.

3. Create a Paper Trail If the board decides they want the manager involved in the litigation, the board’s decision needs to be documented in the minutes. It is also a good practice as new issues come up for the manager to email the board for continued authorization to discuss specific issues with the attorneys.

If These Steps are Followed, the Manager’s Communications Will Likely Be Treated as Privileged

While the scope of the attorney-client privilege is an issue frequently litigated, until recently there were no decisions that specifically dealt with whether a manager’s communications were privileged. In a recent case, Greenlake Condominium Association v. Allstate Insurance Company, Allstate filed a motion with the court claiming that the fact the manager was copied on emails between the board and the association’s attorneys waived the attorney-client privilege. In opposing the motion, the association argued that the board had specifically considered the issue; the board had valid reasons for having the manager included in communications with the attorneys; and the board specifically authorized the manager in writing to act on their behalf in dealing with the attorneys. The court decided that the manager’s communications were privileged, explaining its decision as follows:

“In this case, Plaintiff Condominium Association, like many condominium boards, has no employees and is governed by a volunteer board of directors. Said board members rely on [the manager] to handle day-to-day operation of the property and to act as a repository for information concerning ongoing issues affecting the property. In that capacity the [manager] contacted Plaintiff’s attorneys and solicited their legal advice on behalf of Plaintiff… [T]he Court finds that [the manager] is ‘a necessary and customary participant’ in the consultative process between Plaintiff and Plaintiff’s attorney, and that her involvement is ‘essential to the giving of legal advice’ in this case. As such, the e-mails are protected by attorney- client privilege.”

As recognized in the Greenlake case, the key to bringing the manager’s communications within the attorney-client privilege is to recognize that the issue exists at the beginning of the litigation and create a paper record that supports the conclusion that the manager is an essential participant in the communications between the association and its attorneys. If these steps are followed, confidential communication involving managers should stay confidential.

22 Community Associations Journal | June 2016