Court of Appeals Discusses Implied Waiver of Privilege When Claiming Attorney Fees as Damages

Division I of the Court of Appeals recently discussed implied waiver of the attorney-client privilege when claiming attorney fees as damages. Bellevue Farm Owners Association v. Stevens, ___ Wn. App. ___, ___ P.3d ___, 2017 WL 1293482 (2017), was on discretionary review. The underlying litigation involved the development of waterfront property and included a counterclaim for abuse of process. The damages asserted under the counterclaim were solely attorney fees and related costs.The counterclaim defendant sought discovery of billing records relating to the attorney fees and costs claimed. Following an order at the trial court requiring production, the counterclaimant requested — and was granted — discretionary review. At the Court of Appeals, the defendant argued that the counterclaimant had impliedly waived privilege by claiming the attorney fees and associated costs as damages. The counterclaimant, in turn, contended that implied waiver only applied to legal malpractice claims.

The Court of Appeals found implied waiver, noting that Division II had taken a similar position outside the legal malpractice context last year in Steel v. Olympia Early Learning Center, 195 Wn. App. 811, 381 P.3d 111 (2016). The Court of Appeals in Bellevue Farm Owners concluded:

“[Counterclaimant] impliedly waived the attorney-client privilege and work product by claiming attorney fees as his only damages for abuse of process. Because discovery is necessary to determine the proximate cause of his alleged harm, . . . [Counterclaimant] . . . waived the right to assert attorney-client privilege and work product for attorney fees and cost billing records.” 2017 WL 1293482 at *9.

Bellevue Farm Owners highlights the practical risk of seeking attorney fees as damages through a counterclaim: The other side may be entitled to attorney billing records in the very case being litigated.