Loose Lips Still Sink Ships: Beware Waiving Protected Information through Electronic Communications

The ease and rapidity with which association members and managers can communicate with others in the social media age creates new challenges for guarding information that should remain protected for legal reasons.

Determining whether the attorney-client privilege attaches to a particular communication, North Carolina courts consider whether:

(1) the relation of attorney and client existed at the time the communication was made, (2) the communication was made in confidence, (3) the communication relates to a matter about which the attorney is being professionally consulted, (4) the communication was made in the course of giving or seeking legal advice for a proper purpose although litigation need not be contemplated and (5) the client has not waived the privilege.

Brown v. American Partners Federal Credit Union, 183 N.C. App. 529, 534, 645 S.E.2d 117, 121 (2007).

The presence of a third party who is not the agent of either party to a communication between attorney and client destroys the element of confidentiality and, therefore, any claim of attorney-client privilege. Id.

While “[t]he North Carolina appellate courts have not yet decided what test should apply as to the corporate attorney-client privilege,” they have “decline[d] to accept the… suggestion that simply because a person may be an agent of the company in some capacity, the company’s attorney-client privilege automatically applies to communications made in the presence of that person.” Id. (bold emphasis added).

Other jurisdictions hold that a property management agreement alone did not establish that a property manager was an employee of a building owner, for determining whether the attorney-client privilege between the owner and its law firm extended to communications between the law firm and property manager concerning litigation against a third party. See Horton v. U.S., 204 F.R.D. 670, 672-73 (D.Colo. 2002).

Other states have recognized “the distinction between representative boards as clients and the constituents whom they serve” for purposes of waiver of attorney-client privileged information. Cove on Herring Creek Homeowners’ Ass’n v. Riggs, 2001 Del. Ch. LEXIS 157 (Del. Ch. 2001).

Thus, owners’ association representatives must zealously guard attorney-client privileged information and prevent their disclosure to third-parties, including but not limited to their own owner-members, so as to avoid potential waiver of such applicable privileges. Electronic communications and social media outlets should not be allowed to increase the waiver of such privileges.