Here is a strange case from the Southern District of Texas, Houston Division. It is a 2020 opinion styled, Pruco Life Insurance Company v. Blanca Monica Villarreal, Transamerica Life Insurance Company v. Blanca Monica Villarreal.
This is a hard fought dispute over a large life insurance policy and discovery being conducted in two countries. Many accusations of misconduct are being hurled by both sides.
The two life insurance companies were trying to depose Villarreal’s investigator. Villarreal’s attorney objected to the questions based on it protected by attorney work-product rules.
The issue in this Court ruling is whether the work-product protection is applicable to this situation.
Based on the parties’ letter briefs, the record, and the applicable law, the court finds that Villarreal’s attorney misrepresented material facts to the court. Work-product protection is no longer justified over the part of Abraham’s investigation that occurred on and after the date he was instructed to investigate Avenue Homero 527 in Mexico City, Mexico, or independently decided to take the investigation he already been instructed to conduct to this address.
The insurers may resume their deposition of Abraham and ask about his investigation on or after the date he began investigating Avenue Homero 527. The court also orders Villarreal to produce new copies of Abraham’s documents, which are Bates stamped OSCAR GONZALEZ ABRAHAM 000001–000683. Villarreal may retain the redactions on documents relating to events that occurred before Abraham was instructed to investigate Avenue Homero 527, or decided to include it in his ongoing investigation. But Villarreal must produce unredacted copies of documents that relate to events occurring on or after Abraham was instructed or decided to investigate Avenue Homero 527. The court grants both parties’ request for court supervision of the deposition, to be scheduled no later than January 31, 2021.
Work-product protection serves to protect the interests of clients and their attorneys in preventing disclosures about the case by shielding the lawyer’s mental processes from his adversary. The protection is not designed to protect any interest of the attorney . . . but to protect the adversary trial process itself, because the integrity of our system would suffer if adversaries were entitled to probe each other’s thoughts and plans concerning the case. Work-product protection is not absolute and is subject to several exceptions. The crime-fraud exception allows a party to discover attorney work product when communication or work product is intended to further continuing or future criminal or fraudulent activity. The party seeking discovery of otherwise protected evidence has the burden of establishing a prima facie case that work-product protection was intended to further criminal or fraudulent activity.
Courts have consistently held that an attorney’s misconduct may overcome attorney work-product protection.
The case law is unclear as to whether attorney misconduct is a distinct exception to work-product protection or a subspecies of the crime-fraud exception. Some courts have seemingly applied a distinct attorney-misconduct exception. Others have held that fraud on the court is sufficient to satisfy the crime-fraud exception.
In deciding whether attorney misconduct eliminates work-product protection, courts consider the totality of the circumstances to determine whether the policies favoring disclosure of such materials outweigh the client’s legitimate interest in secrecy in a particular case. Factors a court considers include the availability of alternate disciplinary procedures, whether disclosure would traumatize the adversary process more than the underlying behavior, and the relationship between the misconduct and the information being sought.
Courts have applied the attorney-misconduct exception to various types of surreptitious or unethical behavior, such as secretly taping witness conversations. Courts have applied the exception when attorneys submitted falsified documents.
Courts have also applied the attorney-misconduct exception when attorneys have obstructed, or helped clients obstruct, the search for the truth.
Notably, courts have also applied the attorney-misconduct exception when attorneys have made false statements to the court. For example, in one Federal District Court case, the court eliminated work-product protection over documents after an attorney “made a false exculpatory statement concerning his conduct upon the record of a trial testimony deposition.” The attorney stated that he had “never seen a document before” as the opposing counsel cross-examined his expert witness. The attorney then conducted a “misleading re-direct examination” of the witness. Evidence in the case, however, demonstrated that the attorney had provided that document to his expert witness. Though the document would normally enjoy work-product protection, the court held that the attorney’s misconduct vitiated it.
Here, the record shows that Villarreal’s attorney, Black, has made at least one misrepresentation to the court that is material and justifies overcoming work-product protection to a limited extent. On April 11, 2018, Villareal filed a summary judgment motion, signed by Black, stating that “there is simply no evidence to support” any notion that Rosendi is alive. A later summary judgment motion, also signed by Black, stated that the insurers would “never have evidence” that Rosendi is alive. The record contains prima facie evidence that Black made these statements either knowing that they were false or with reckless disregard for their truth.
Black had a conversation with Abraham on March 6, 2018, the day after Abraham first located Hernandez. Black admits that he had a conversation with Abraham on March 6. Telephone records from Abraham and Black both show that a conversation between them took place. This conversation occurred while Abraham was making daily visits to Hernandez and seemed to be closer to detecting information about Rosendi. While the parties dispute whether Black spoke with Abraham on March 5, the records show a March 6 conversation. Villareal moved for summary judgment, with Black’s signature, in April.
Black argues that he did not know Hernandez’s name when he filed the motion and that he did not receive “Abraham’s reports containing Hernandez’s name until last month because they were sitting in the investigative company’s spam filter and were not forwarded to counsel.” This argument misses the point. Hernandez’s name was not important; the fact that a woman had made statements that Rosendi was alive long after his reported death was important. And even if the investigative company Villarreal hired had a spam filter that blocked its own investigator’s reports, Black spoke with Abraham on March 6, and perhaps also on March 5. Phone records also reveal that Abraham spoke with Pipkins at least 13 times between March 5 and March 8, including on March 5, shortly after Abraham and Hernandez first spoke. Pipkins regularly reported to Black. Text messages previously produced to the court for in camera review also show that Black was aware that Abraham had spoken to a woman who had seen Rosendi alive. This is prima facie evidence that Black knew, before he signed Villarreal’s summary judgment motion, about Hernandez and her statements to Abraham supporting the fact that Rosendi was alive.
In his deposition, Abraham testified that he was threatened after he reported his encounter with Hernandez to Pipkins. Abraham did not testify who threatened him because Black objected that the identity of the speaker was protected. Black revealed that he had knowledge of a threat to Abraham and suggested that he knew the identity of the speaker. How Black knew of the threat or the speaker’s identity is unclear. It is also unclear why that information would be protected, unless one of Villarreal’s representatives was the speaker, and a privilege or protection applied and no exception was present.
The misconduct surrounding Abraham’s discovery of Hernandez justifies eliminating work-product protection over Abraham’s investigation. This opinion is bolstered by the totality of the circumstances. The insurers do not seek the mental impressions of Villarreal’s counsel. They are seeking essentially the disclosure of facts, which will not harm the adversary process.
This case does not involve complicated legal questions. It centers on whether Rosendi was alive when he was reported as dead and his widow, Villarreal, claimed the life insurance proceeds. Communications on the facts related to this question are not the core attorney work product the Federal Rules seek to protect.
Eliminating work-product protection over limited aspects of Abraham’s investigation bears a “substantial relationship” to Black’s misstatement. Abraham’s investigation is the best evidence the parties have so far disclosed to the court on whether Rosendi is alive. The court has already held that the insurers were entitled to portions of Abraham’s investigation file because of the undue burden and infeasibility of other ways to locate Hernandez. Black represented, after talking to Pipkins and Abraham following Abraham’s first meeting with Hernandez, that there was no evidence that Rosendi was alive. He then made efforts to have the court cut discovery off. Both acts appear directed to concealing potentially key information. Allowing the insurers to depose Abraham about his investigation is the best path to a level playing field at this stage.