Document for McCracken Vs. Kutak Rock L L P, Et.Al.

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                                Clerk of the Superior Court
                                                                                             *** Electronically Filed ***
                                                                                                06/18/2024 8:00 AM
                                        SUPERIOR COURT OF ARIZONA
                                            MARICOPA COUNTY

    CV 2023-006738                                                                     06/17/2024


                                                                              CLERK OF THE COURT
    HONORABLE JENNIFER RYAN-TOUHILL                                                 A. Meza
                                                                                    Deputy



    REGINA MCCRACKEN                                               F THOMAS HOVORE

    v.

    KUTAK ROCK L L P, et al.                                       JEFFREY J GOULDER



                                                                   JUDGE RYAN-TOUHILL


                                                       RULING


      Before the Court is the parties May 7, 2024, Joint Statement of Discovery Dispute re:
Subpoena to Dickinson Wright, along with both parties’ May 28, 2024, supplemental briefings.
The Court now rules.
Brief summary1
        Regina McCracken (Plaintiff) and Gary McCracken (Doctor) lived together and planned
their wedding. Prior to the wedding, Doctor asked Plaintiff to sign a prenup; Doctor received legal
advice from Fennemore Craig and Plaintiff received legal advice from Kutak Rock. Plaintiff
signed the prenup and the parties married. During the marriage Plaintiff signed a spousal
disclaimer acknowledging the parties’ separate property.
       Roughly fourteen years later, in 2021, Doctor filed for divorce. Plaintiff hired Dickinson
Wright to represent her in the family court case. At the conclusion of the divorce proceedings, the
family court found the prenup was valid and enforceable.
       Plaintiff filed suit against Kutak Rock and the attorney with whom she met, Michael
Sillyman, arguing malpractice by Mr. Sillyman harmed Plaintiff in excess of 15 million dollars.
Currently, Defendants seek portions of Plaintiff’s family court file with Dickinson Wright,

1
    The alleged facts are taken from Plaintiff’s Complaint, and restated here only to provide context for the Ruling.
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                                 SUPERIOR COURT OF ARIZONA
                                     MARICOPA COUNTY

 CV 2023-006738                                                            06/17/2024


asserting a need for relevant information pertaining to Defendants’ defense of statute of limitations.
Plaintiff opposes.
Attorney-Client Privilege
        The Court, and parties, recognize that Plaintiff had an attorney-client relationship with
Dickinson Wright (DW), the firm that represented Plaintiff in her dissolution of marriage from
Doctor. While Plaintiff argues for the sanctity of the professional relationship, it is not limitless in
protection afforded.
        As recently as 2023, our appellate courts have addressed the importance of the attorney-
client relationship. McGlothlin v. Astrowsky in and for County of Maricopa, 255 Ariz. 449 (App.
2023). “In Arizona, the first legislature codified the attorney-client privilege in the 1913 Civil
Code: ‘An attorney cannot, without the consent of his client, be examined as to any communication
made by the client to him, or his advice given thereon in the court of professional employment[.]’”
255 Ariz. 449, at ¶ 18 (internal citation omitted). Our law has “since remained largely
unchanged[,]” and is found at A.R.S. § 12-2234(A). Id. In McGlothlin, the court outlined steps to
follow for an in camera review of documents pertaining to a privilege dispute. Here, the Court is
not proposing or agreeing to an in camera review, which is a last resort. Id. at ¶ 21. However,
McGlothlin does provide this Court with appropriate direction in analyzing the dispute.
        The Court finds Plaintiff had an attorney-client relationship with DW, Plaintiff hired DW
to represent her in the dissolution proceedings, DW provided Plaintiff with legal advice related to
the divorce, and, presumably, the communication between DW and Plaintiff was confidential in
order to advance Plaintiff’s position in her family court case. The relevant portion of those
discussions, for this case, pertain to the legal advice DW provided Plaintiff regarding the legality
of the premarital agreement and spousal disclaimer, both documents entered into by Plaintiff
before and during her marriage. Per the pleadings filed and oral argument presented in this civil
case, no party disputes these findings. What is at issue here is whether Defendant has demonstrated
a good-faith basis for an exception to the attorney-client relationship.
        The attorney-client privilege may be waived by voluntary disclosure or by putting the
subject matter at issue in the pending litigation. Patania v. Silverstone, 3 Ariz. App. 424
(1966)(rejected on other grounds by Buffa v. Scott, 147 Ariz. 140 (Ct. App. Div. 1 1985)). Plaintiff
has not voluntarily disclosed communication with DW, and thus the Court looks to implied waiver.
This implied waiver is subject to the Hearn test:
       (1) [The] assertion of the privilege was a result of some affirmative act, such as
       filing, suit, by the asserting party; (2) through this affirmative act, the asserting
       party put the protected information at issue by making it relevant to the case; and

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                                SUPERIOR COURT OF ARIZONA
                                    MARICOPA COUNTY

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       (3) application of the privilege would have denied the opposing party access to
       information vital to his defense.
McGlothlin, 255 Ariz. 449, at ¶ 38, quoting State Farm v. Lee, 199 Ariz. 52, 56, ¶ 10 (2000). As
the parties know, simply filing a lawsuit does not waive the privilege. McGlothlin, 255 Ariz. 449,
at ¶ 39, citing Empire W. Title Agency, L.L.C. v. Talamante ex rel. Cnty. of Maricopa, 234 Ariz.
497, 499, ¶ 10 (2014).
Statute of Limitations
      Before the Court analyzes the privilege and implied waiver further, the Court turns to
Defendants’ defense of statute of limitations.
         Defendants argue that Plaintiff’s claims should be time-barred because Plaintiff knew or
should have known about Defendants’ possible malpractice earlier than May of 2021, which would
have been over two years prior to Plaintiff’s lawsuit against Defendants. When Plaintiff knew or
should have known of her claims against Defendants, Plaintiff thereafter had two years in which
to initiate suit. See, e.g., Floyd v. Donahue, 186 Ariz. 409 (1996). When considering the discovery
rule, Plaintiff is bound by facts that give rise to a cause of action, regardless of the legal
significance of those facts. Plaintiff did not need to know all of the facts surrounding her
malpractice claim but, rather, enough facts that would prompt a reasonable person to investigate
and discover the tortious conduct. Gust, Rosenfeld & Henderson v. Prudential Ins. Co. of America,
182 Ariz. 586 (1995).
         Plaintiff has argued that the statute of limitations commences once someone is injured
(damages). However, Plaintiff ignores the possibility that someone may not, at first, realize they
are injured but later discovers the alleged harm. In other words, placing the timing of the action
on the exact date when injury occurs oversimplifies the analysis. The appellate court recognized
this, stating, “[W]e hold that a cause of action for legal malpractice accrues when the client both:
(1) has sustained appreciable, non-speculative harm or damage as a result of such malpractice and
(2) knows, or in the exercise of reasonable diligence should know, that the harm or damage was a
direct result of the attorney’s negligence. Thus, we hold that the discovery rule applies not only
to the discovery of negligence, but also to discovery of causation and damage.” Commercial Union
Ins. Co. v. Lewis and Roca, 183 Ariz. 250, 252-53 (App. 1995). Here, like in Commercial Union,
Plaintiff has “mixe[d] two distinct concepts—the occurrence of harm and the extent of damages.”
Id. at 255 (citation omitted). “Commencement of the statute of limitations ‘will not be put off until
one learns the full extent of his damages.’” Id. (citation omitted). Instead, the statute starts when
a plaintiff sustains a “damaging effect from the malpractice.” Id. (citation omitted). Balance this
against Tullar, where “the harm or damage resulting from the attorney’s negligence was

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                                 SUPERIOR COURT OF ARIZONA
                                     MARICOPA COUNTY

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speculative . . . the cause of action did not accrue until later.” Id. (ref. Tullar v. Walter L.
Henderson, P.C., 168 Ariz. 577 (App. 1991).
        Presently, the Court need not decide the issue involving the statute of limitations. That is
not before the Court. What is before the Court, however, is a request from Defendant to allow
discovery into additional facts and evidence that may shed light on Defendant’s defense of statute
of limitations. Like Keonjian v. Olcott, Defendant could argue that any harm arising from incorrect
or deficient legal advice “occurred at the moment [Plaintiff] executed it, because it diminished her
interest in the property to less than [ ] she had intended.” 216 Ariz. 563, 566, ¶ 13 (App. 2007).
In Keonjian, the court found the plaintiff knew of a potential cause of action by virtue of plaintiff’s
deposition testimony arising in a different case. Id. at ¶ 16. Because the plaintiff testified in a
separate matter about the poor advice she received relating to the malpractice case, that testimony
was relevant and thus utilized by the attorney defending against the malpractice claim.
Attorney-Client Privilege
       Returning to the sanctity of the attorney-client relationship, Plaintiff argues that she was
not harmed (damages) until the family court judge upheld the pre-martial agreement and the
spousal disclaimer, and, consequently, any advice provided to Plaintiff by DW during the divorce
proceedings is irrelevant and not discoverable. Respectfully, Plaintiff is in error.
        Plaintiff presents much argument that “[the] ‘knowledge’ of the Plaintiff is not relevant
whatsoever.” Plaintiff’s Response [ ], p. 6, ¶ 4. For the reasons stated above, Plaintiff’s knowledge
is directly relevant to Defendant’s defense of statute of limitations. The Court does not suggest
Defendant’s prospective argument regarding the statute of limitations is warranted but, rather, that
Defendant is entitled to conduct discovery to support or refute it’s position. Malpractice claims
are subject to the discovery rule which, in turn, depends on specific facts relevant to that case.
         Here, Plaintiff incorrectly believes there is no statute of limitations issue because Amfac I
controls. 138 Ariz. 152 (App. 1983). Plaintiff thereafter ignores many court cases distinguishing
Amfac from other malpractice claims, and concludes that the exact date of the commencement of
the cause of action was upon final conclusion of the divorce case. Because the divorce case ended
on X date, Plaintiff was not damaged until that same date, and thereafter had until Y date to file
suit against Defendant. The Court agrees with Defendant—Amfac I is distinguishable because of
the litigation negligence rule. Here, like in Keonjian, if a mistake occurred, it was not during the
parties’ divorce case but rather before the parties’ marriage. What is relevant about the divorce
case are facts related to the discovery rule, which impacts Defendants’ defense.
       [T]here is more than relevance and materiality needed to find a waiver, for
       communications with counsel are almost always very relevant and material. We

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                                SUPERIOR COURT OF ARIZONA
                                    MARICOPA COUNTY

 CV 2023-006738                                                          06/17/2024


       conclude that under the Hearn test, in cases such as this in which the litigant
       claiming the privilege relies on and advances as a claim or defense a subjective and
       allegedly reasonable evaluation of the law—but an evaluation that necessarily
       incorporates what the litigant learned from its lawyer—the communication is
       discoverable and admissible.
State Farm v. Lee, 199 Ariz. 52, 56, ¶ 15 (2000)(emphasis in original). Defendants’ defense, in
part, rests upon a statute of limitations argument. Not finding that the exact date of the cause of
action is the date of the family court decision, the Court looks to whether facts relevant to the
discovery rule help shed light on the dispute. The parties do not agree on what the facts might
show (or if the facts are even relevant), but because Plaintiff has argued that her interpretation of
the law controls, she cannot, contemporaneously, argue that Defendants are precluded from
obtaining evidence that may support their contrary interpretation. Defendant is entitled to
discovery. Therefore,
      IT IS ORDERED allowing Defendants to subpoena documents from Dickinson Wright,
PLLC. The available documents include:
      A copy of the fee agreement, engagement letter, or other documents showing when Plaintiff
       hired the law firm.
      Emails, letters, attorney’s notes, and memoranda addressing:
           o When Plaintiff first provided the firm with a copy of the February 23, 2007,
               premarital agreement entered into between Plaintiff and Doctor.
           o All advice to and communication with Plaintiff regarding the validity, effect, or
               interpretation of the premarital agreement.

        IT IS FURTHER ORDERED denying Defendants’ request for a copy of billing records
related to these documents (evidence) for the reason that the Court finds billing records irrelevant.




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