Plaintiffs Richard A. Savery and Janice A. Savery ("Plaintiffs") hold a right of first refusal on property known as Lot 2 and located at 21 Austine Locke Way, Nantucket, Massachusetts. The property is shown as Lot 2 on the 14341-D Plan, [Note 1] and is described in Transfer Certificate of Title No. 15322, which, as of the date this case commenced, stood in the name of William B. Duane and Carolyn B. Duane, Trustees of W. Duane Realty Trust. The Plaintiffs' right of first refusal as to Lot 2 is Doc. No. 114796, noted on Cert. No. 15322. On November 14, 2012, the Plaintiffs were informed that defendant William Duane ("Duane"), as trustee of the W. Duane Realty Trust, had accepted a November 12, 2012 offer to purchase Lot 2. By deed dated December 18, 2012, after this case commenced, Duane conveyed Lot 2 to defendant Kevin Harmon ("Harmon").
In this case, Plaintiffs seek, among other relief, [Note 2] a declaration that neither the November 12, 2012 offer, nor an "offer modification" dated December 24, 2012, triggered Plaintiffs' right of first refusal. One of the Plaintiffs' theories is that the November 12, 2012 offer was not an arm's length, bona fide offer, because it was the result of impermissible collusion between Duane and Harmon, or their agents, or was structured in a legally impermissible manner to defeat Plaintiffs' right of first refusal. Plaintiffs have filed a motion to compel the production of certain documents that defendants Duane and Harmon have withheld or produced with redactions, asserting these documents are either privileged as attorney-client communications, or protected as attorney work product. According to an April 5, 2013 privilege log, the disputed materials mostly are e-mails among Duane's lawyers and real estate broker, Harmon, and Harmon's lawyers and broker. [Note 3]
The court (Piper, J.) held a nonevidentiary hearing on the motion to compel on May 10, 2013, and took the motion under advisement without conducting an in camera inspection of the contested materials. Taking into account the arguments of counsel, the moving and opposing papers, and the affidavits of Richard A. Savery and Kevin L. Harmon, Jr., the court has determined that an in camera review of the disputed materials is necessary before ruling on the motion to compel. This is because the court concludes that the requested material is work product that was created in anticipation of litigation; however, without evaluating the content of the work product, the court cannot determine whether the Plaintiffs have carried their burden of demonstrating a substantial need for access to the requested materials.
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The Massachusetts work product doctrine is codified in rule 26(b)(3) of the Rules of Civil Procedure. Commissioner of Revenue v. Comcast Corp., 453 Mass. 293 , 314 (2003) ("Comcast"). That rule provides: "[A] party may obtain discovery of documents and tangible things otherwise discoverable... and prepared in anticipation of litigation or for trial by or for another party or by or for that other party's representative (including his attorney, consultant, surety, indemnitor, insurer, or agent) only upon a showing that the party seeking discovery has substantial need of the materials in the preparation of his case and that he is unable without undue hardship to obtain the substantial equivalent of the materials by other means. In ordering discovery of such materials when the required showing has been made, the court shall protect against disclosure of the mental impressions, conclusions, opinions, or legal theories of an attorney or other representative of a party concerning the litigation." Mass. R. Civ. P. 26(b)(3). The party claiming protection under this doctrine bears the burden of demonstrating the materials were created in anticipation of litigation. Comcast, supra, at 315. If that burden is met, it falls on the party seeking the discovery to demonstrate a substantial need for the documents. Id. Where the materials sought include so-called "opinion work product," [Note 4] there exists a further limitation beyond a substantial need; where a party seeks opinion work product, "disclosure is appropriate only in rare or extremely unusual circumstances." Comcast, 453 Mass. at 314-15. "[A]t a minimum a highly persuasive showing is needed to overcome protection for opinion work product." Comcast, supra at 315 (quoting United States v. Adlman, 134 F.3d 1194, 1204 (2d Cir. 1998)) (internal punctuation omitted).
1. Applicability of Rule 26(b)(3). As an initial matter, the court is convinced the materials sought in this case fall within the scope of rule 26(b)(3) and not rule 26(b)(1), which permits discovery of items that are "not privileged" if the request "appears reasonably calculated to lead to the discovery of admissible evidence." Mass. R. Civ. P. 26(b)(1). Rule 26(b)(3) extends its protections to materials prepared "by or for another party or by or for that other party's representative (including his attorney, consultant, surety, indemnitor, insurer, or agent)." Mass R. Civ. P. 26 (b) (3). See also Comcast, 453 Mass. at 314 ("[b]y its terms the rule protects a client's nonlawyer representatives"). While normally a disclosure of work product to an adversary would waive work product protection, where two parties share a common interest in litigation, materials made in the course of and in furtherance of their joint effort, will not forfeit work product protections simply because the two parties have collaborated. See Hanover Ins. Co. v. Rapo & Jepsen Ins. Servs., Inc., 449 Mass. 609 , 617 (2007) (adopting "common interest doctrine" as set forth in Restatement (Third) of the Law Governing Lawyers § 76 (1)). [Note 5] Here, the fact that some of the materials sought by the Plaintiffs are communications between lawyers and agents for Harmon, and lawyers and agents for Duane, does not take this dispute outside of rule 26(b)(3). To the extent that these e-mails were "in anticipation of litigation," see infra, the interests of Harmon and Duane were sufficiently aligned to preserve the confidential nature of the materials under the common interest doctrine.
2. Anticipation of Litigation. The Supreme Judicial Court had endorsed the so-called "because of" test to determine if a document was "prepared in anticipation of litigation" under rule 26(b)(3). See Comcast, supra, at 316-17. Thus, "a document is within the scope of the rule if, in light of the nature of the factual situation in the particular case, the document can fairly said to have been prepared because of the prospect of litigation." Comcast, supra, at 317 (internal quotation marks omitted; emphasis in original). This rule applies even when the work product is created to avoid the prospect of potential litigation, rather than to respond to actual litigation. Id. "[W]ork product protection should not be denied to a document that analyzes expected litigation merely because it is prepared to assist in a business decision." Comcast, supra, at 316.
Here, the e-mails and other communications among the defendant, their lawyers and brokers comfortably fall within the rule, and the court concludes they were created because of the prospect of litigation. The Saverys' right of first refusal was duly registered and referenced on the certificate of title to Lot 2, and there is no dispute that Harmon was aware of it, and aware that Savery intended to exercise it. There is also little dispute that Harmon was specifically aware that there was a potential issue with whether Lot 2 was buildable under local zoning. [Note 6] At this point, the written communications of Harmon's lawyers and brokers are properly understood as falling under the umbrella of a potential litigation, and seeking either to avoid litigation, or to set up Harmon in the best position to prevail in a litigation, should it come to that. [Note 7]
Defendants Harmon and Duane argue that the subject communications concern "analysis from attorneys looking to... structure the sale of [Lot 2] with the prospect of litigation from the Saverys in mind[.]" The Saverys contend that the communications go further than that, and were aimed at thwarting the Saverys' ability to exercise the right of first refusal, even before litigation. This may be true, as discussed in more detail infra and at note 7. However, work product that has a dual litigation and business purpose still qualifies under the rule, see Comcast, supra, at 316, even if it may be discoverable under the exception to the general rule.
3. Substantial Need. Work product created in anticipation of litigation, as in the case at bar, may nonetheless be discoverable if certain conditions are met. Mass. R. Civ. P. 26(b)(3). Here, the materials subject to the motion to compel likely consist of opinion work product because they are alleged to contain the "mental impressions, conclusions, opinions, or legal theories of an attorney or other representative of a party concerning the litigation." Mass. R. Civ. P. 26(b)(3). Accordingly, to prevail on a motion to compel, the Plaintiffs not only must demonstrate a substantial need for such materials, but also must make a "highly persuasive showing" that this is one of the "rare or extremely unusual circumstances" that justify disclosure. See Comcast, 453 Mass. at 314-15.
The Plaintiffs' theory of this case is that there was some collusion between Harmon, the buyer, and Duane, the seller, sufficient to prevent the November 12, 2012 offer from being "bona fide." A right of first refusal is only triggered by a bona fide offer. Uno Restaurants, Inc. v. Boston Kenmore Realty Corp., 441 Mass. 376 , 383 (2004). "A third-party offer is bona fide if it was made 'honestly and with serious intent[,'] that is, if the offeror genuinely intends to bind itself to pay the offered price." Id. (quoting Mucci v. Brockton Bocce Club, Inc., 12 Mass. App. Ct. 155 , 158 (1985)). Even if motivated by a desire to defeat the right of first refusal, an offer still may be bona fide. Uno Restaurants, Inc, 441 Mass. at 381. A right of first refusal is, however, a contractual relationship, and so Duane had an obligation to the Saverys to protect the Saverys' ability to exercise its right of first refusal in an effective manner. See id. at 381. The owner of property subject to a right of first refusal "may not 'procure from a the third party terms that the grantor knows are unacceptable to the holder of the right of first refusal.'" Id. at 387 (quoting Miller v. LeSea Broadcasting, Inc., 87 F.3d 224, 228 (7th Cir. 1996)).
Here, the court must review the documents to determine whether they are capable of supporting the Plaintiffs' contentions. See Comcast, 453 Mass. at 301 (Superior Court justice denied motion to compel after nonevidentiary hearing and in camera review of contested documents). A ruling on the ultimate issue in this case lies ahead, after the facts are better developed and presented to the court by dispositive motion or at trial. At this early stage, the court can accept that the law certainly would recognize as important to the outcome, on the case as pleaded by the Plaintiffs, proof of an improper form of collusion between the seller and the buyer of land subject to a right of first refusal. It certainly might be that, in appropriate circumstances, collusion would render a putative offer ineffective to trigger the refusal right.
To gauge whether or not the sought-after documents fairly could be used by Plaintiffs to prove such a contention, it is necessary to peer inside the black box. Only Harmon, Duane, and their representatives have seen the documents. Neither Plaintiffs nor the court have reviewed them. It is not clear to the court that there is any other feasible way for the Plaintiffs to obtain the information they seek without the court ordering Harmon and Duane to turn over the documents. If the documents reasonably support a showing of an improper collusion between Duane and Harmon, that the offer was not "serious" in that Harmon had no intent to be bound to the terms as stated, or that Duane was attempting unlawfully to undermine the right of the Saverys to receive the benefit of their contract, these facts may qualify as "rare or extremely unusual circumstances" where a court would order work product be turned over to an adversary.
On the other hand, if the requested documents do not fall into this narrow category entitling Plaintiffs to have them (notwithstanding their apparent character as work product), Plaintiffs ought not receive access to them. Simply ordering their turnover, without any further scrutiny of them, would violate the protection the work product doctrine provides. The court is convinced that an in camera review of the unredacted versions of the relatively few documents remaining in dispute will best serve the goal of striking the balance required where work product papers are involved. [Note 8]
ORDERED that within three (3) business days from the date of this Order, the parties are to file any objection to having the Land Court justice to whom this case is assigned (Piper, J.) conduct an in camera review of the protected work product materials. The court will rule on any objection without hearing unless otherwise ordered. It is further
ORDERED that, absent any timely objection, defendants Duane and Harmon are to deliver to the court (in a sealed envelope marked "Confidential Work Product Documents - Not to Be Opened, Read, Filed, or Made Available Except by Order of the Court") unredacted copies of those documents appearing on the April 5, 2013 Privilege Log that remain subject to the pending motion to compel and which still are undisclosed to the Plaintiffs. The delivery is to be made within two business days after the expiration of the time for filing objection. It is further
ORDERED that the Plaintiffs' response to the April 16, 2013 Motion for Summary Judgment need not be filed by May 24, 2013, as previously ordered; the time for filing shall be extended to a new date to be set by the court in a subsequent order, which will take into account the court's ruling on the motion to compel following in camera review.
By the Court. (Piper, J.)
[Note 1] The 14341-D Plan is titled "Subdivision Plan of Land in Nantucket, Schofield Brothers, Inc., Surveyors," dated August 30, 1969, was approved by this court January 8, 1971, and is filed with this court's Registry District of Nantucket County with Certificate of Title No. 6310.
[Note 2] The presence of the Town of Nantucket in this case is necessitated by a count under G.L. c. 240, § 14A to determine whether the subject Lot 2 is a buildable lot under local zoning. The Town of Nantucket took no part in the briefing or argument on the discovery dispute today before the court.
[Note 3] Counsel for Plaintiffs and for Duane and Harmon have stipulated that the motion to compel seeks only the attorney work product documents; the request privileged communications are no longer subject to this motion to compel.
[Note 4] Meaning "the mental impressions, conclusions, opinions, or legal theories of an attorney or other representative of a party concerning the litigation." Mass. R. Civ. P. 26 (b) (3).
[Note 5] The common interest doctrine, as adopted by the Supreme Judicial Court in Hanover Insurance, supra, expanded the protections afforded to material otherwise protected by the attorney-client privilege, and not the work product doctrine. There does, however, seem to be support for the view that the doctrine is available to work product as well. See, e.g Bank of America, N.A. v. Deloitte & Touche LLP, 24 Mass. L. Rprt. 186, *3, No. 06-2218-BLS1, (Mass. Super. Ct. June 13, 2008)(Gants, J.).
[Note 6] Both Harmon and Richard Savery have filed affidavits recounting their respective views of a telephone call between them that took place in July of 2012. Their accounts differ as to the specifics of the conversation, but in either view, it is clear that Harmon was aware of Savery(s intention to exercise the right of first refusal, and that Savery may have harbored concerns about the buildability of Lot 2. For the purpose of the pending motion, there is no need to parse further each parties' recollection of the specifics of this conversation.
[Note 7] That nonlawyer brokers apparently were integral to the communications among the lawyers and their clients does not, without more, defeat the right to treat those communications as work product. The brokers, given their job descriptions, may well have played a central role on behalf of the seller (and possibly the buyer as well) in the marketing of the real estate for sale, in structuring the offering, in the negotiations that resulted, and in the formation of the binding contract between the principals. The brokers' role analogizes closely enough, if not exactly, to the role played by the accounting professionals in the corporate transaction considered by the Comcast court. That the brokers may have been brought into the circle of lawyers and clients involved in structuring the sale transaction for the Austine Locke Way property does not, without more, show any wrongdoing on anyone's part, and does not deprive the buyer and seller of the right to have those communications qualify as work product. The lawyers may have shared with the brokers advice on what form of real estate transaction would be lawful, and on how to structure the transaction in a manner which would minimize the clients' exposure to litigation risks, including concerning the Plaintiffs' right of refusal claims. The lawyers might have refined their advice and strategy in response to the opinions of the brokers. Of course, the ultimate advice or direction might have pushed beyond the limit of what was a proper and lawful approach to deal with the Saverys' rights. That possibility, not proved on the limited papers so far submitted to the court, might be found once the relevant evidence is all in. The possibility that the brokers might have collaborated with the lawyers and principals to produce actions that exceeded the limits of what was a proper and lawful approach to the Saverys' rights might justify turning over to them documents that support that conclusion. But that possibility would not make those documents any less qualified as work product.
[Note 8] The court is mindful that the case in this court would be tried without jury. This raises the issue whether the justice to whom this case is assigned, who likely will serve as trier of fact, ought to shield himself from the disputed documents by having the in camera review conducted by a different judge. It is not clear that this needs to be done, but the parties should make known their views on this question so the court may establish an appropriate protocol for the in camera review now ordered. If the parties (particularly Harmon and Duane, who will produce these documents) by their counsel show some good reason why the in camera review should be by a judge who will not hear dispositive motions or preside at trial, the court will fashion a way for that to happen. If there is no objection, or if the court, even over any objection, concludes that there is no good cause to proceed that way, the court, in the interests of efficiency, may well have the review conducted by the judge to whom this matter has been assigned.