Nylen v. Nylen

#27390-a-SLZ
2015 S.D. 98

IN THE SUPREME COURT
OF THE
STATE OF SOUTH DAKOTA
****
MOLLY R. NYLEN and
BRENDON W. NYLEN, Plaintiffs and Appellees,

v.

MARY ELLEN NYLEN, Defendant and Appellant.

****
APPEAL FROM THE CIRCUIT COURT OF
THE FIRST JUDICIAL CIRCUIT
UNION COUNTY, SOUTH DAKOTA

****
THE HONORABLE STEVEN R. JENSEN
Judge

****
DAVID A. TANK of
Dorsey & Whitney LLP
Des Moines, Iowa

and

DANIEL R. FRITZ
NICOLE O. TUPMAN of
Lindquist & Vennum, PLLP
Sioux Falls, South Dakota Attorneys for plaintiffs
and appellees.

STEVEN L. PIER
THOMAS P. REYNOLDS
CRAIG A. KENNEDY of
Kennedy, Pier, Knoff, Loftus, LLP
Yankton, South Dakota Attorneys for defendant
and appellant.
****
ARGUED ON
OCTOBER 5, 2015
OPINION FILED 12/16/15
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ZINTER, Justice

[¶1.] During the time that Mary Ellen Nylen was involved in three lawsuits,

she talked and shared documents with a friend who was an attorney. Mary Ellen

later claimed that the discussions and documents were privileged attorney-client

communications. The circuit court ruled that the privilege applied until Mary Ellen

could no longer reasonably believe she was the attorney’s client. The court also

ruled that Mary Ellen waived the privilege to the extent that she shared otherwise

privileged documents with her friend. We affirm.

Facts and Procedural History

[¶2.] In 1991, Sioux City attorney Irene Schrunk represented Mary Ellen in

a divorce. Over the ensuing years, Schrunk and Mary Ellen developed a friendship

and communicated regularly about various matters. Schrunk was also involved

with Mary Ellen’s will, she provided legal services to Mary Ellen’s subsequent

husband (Mark Nylen), and she participated on the board of the Mark and Mary

Ellen Nylen Foundation.

[¶3.] In 2013, family problems involving Mary Ellen and her children spilled

over to marital problems between Mary Ellen and Mark. Because of these

problems, Mary Ellen moved out of her California home in December 2013. She

also contacted Schrunk for legal advice because she expected Mark would file for

divorce. On January 1, 2014, Mark served Mary Ellen with a summons and

complaint for divorce. That same day, Mary Ellen went to Schrunk’s personal

residence. During their conversation, Schrunk advised Mary Ellen that Schrunk

could not represent her because Schrunk had represented Mark in the past.

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[¶4.] On July 31, 2014, Molly and Brendon Nylen (Mary Ellen’s adult

children) commenced the action that underlies this appeal against Mary Ellen.

They sought a declaration that in December 2013, Mary Ellen had gifted them

personal property. Molly also filed an action for a restraining order against Mary

Ellen in California.

[¶5.] On November 18, 2014, Molly and Brendon’s attorney deposed Mary

Ellen in this gift dispute. The following exchange occurred regarding Schrunk’s

purported role as Mary Ellen’s attorney:

[Attorney]: So you don’t have a current attorney/client
relationship with [Schrunk]?
[Mary Ellen]: No.
[Attorney]: And when you spoke to [Schrunk] most recently
about either the divorce or the kids; claims against you, she
wasn’t representing you?
[Mary Ellen]: No.
[Attorney]: What was your purpose for contacting [Schrunk]?
[Mary Ellen]: She’s a friend.
[Attorney]: And what did you discuss with [Schrunk]?
[Mary Ellen]: We exchanged e-mails. We - - politics [sic],
what’s going on in Sioux City, our family.

[¶6.] Phone records confirmed numerous communications between Mary

Ellen and Schrunk during a time that Molly and Brendon believed was relevant to

the gift dispute. Based on those records and Mary Ellen’s denial of an attorney-

client relationship, Molly and Brendon subpoenaed documents and sought to depose

Schrunk regarding communications she had with Mary Ellen between November 1,

2013, and December 31, 2014.

[¶7.] Mary Ellen moved to prohibit the discovery claiming that the attorney-

client privilege protected the communications. In a subsequent evidentiary hearing
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to resolve the privilege dispute, Mary Ellen acknowledged that she did not formally

retain Schrunk and Schrunk had not charged a fee. However, Mary Ellen testified

that Schrunk was her attorney since 1991, and contrary to her deposition

testimony, her purpose in communicating with Schrunk was to obtain legal

representation and advice. Mary Ellen admitted that Schrunk told her that

Schrunk could not “represent” her; however, Mary Ellen claimed that she

misunderstood the meaning of representation. Mary Ellen testified that Schrunk

told her “that she would help me in any way she could and she would continue to

give me legal advice.” Mary Ellen also claimed that she “did consider [herself] to be

a client of Irene Schrunk at that time,” and that she had been getting legal advice

from Schrunk for “months.” In conjunction with the evidentiary hearing, the court

ordered Mary Ellen to submit a privilege log with the disputed documents for an in

camera review.

[¶8.] After the hearing and review of the documents, the circuit court found

that Schrunk was not representing Mary Ellen between November 1, 2013 and

December 31, 2014. However, the court ruled that because Mary Ellen initially

contacted Schrunk, not only as a friend, but also with a view to obtain legal

services, the initial communications were privileged. Although the court ruled that

the initial communications were privileged, the court did not extend the privilege to

communications after January 1, 2014. The court found that on that day, Schrunk

told Mary Ellen that Schrunk could not represent her, and Mary Ellen admitted

that she understood Schrunk could not represent her. The court ultimately found

that as of January 1, 2014, Mary Ellen could no longer have reasonably believed she

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was Schrunk’s client; and therefore, the attorney-client privilege no longer applied.

Further, the court found that some of the communications between Mary Ellen and

Schrunk included privileged documents involving Mary Ellen and her California

and South Dakota attorneys. Although the documents involving those attorneys

were privileged, the court ruled that Mary Ellen waived the privilege to the extent

that she shared the documents with Schrunk. Thus, the court permitted the

discovery to proceed with respect to the post-January 1, 2014 communications and

documents shared with Schrunk.

[¶9.] Mary Ellen appeals the circuit court’s finding that the attorney-client

privilege did not apply after January 1, 2014. If the privilege did apply, Mary Ellen

contends that she did not waive the privilege by sharing the documents with

Schrunk.

Decision

Attorney-Client Privilege

[¶10.] In order to claim the attorney-client privilege, Mary Ellen must

establish that she was Schrunk’s “client.” See SDCL 19-19-502(b)(1).1 Client status

is established in one of two ways. “A ‘client’ is a person . . . who is rendered

_________________________________
1. “A client has a privilege to refuse to disclose and to prevent any other person
from disclosing confidential communications made for the purpose of
facilitating the rendition of professional legal services to the client [between
herself] . . . and [her] lawyer.” SDCL 19-19-502(b)(1) (emphasis added).
Thus, four elements are required to establish the privilege: (1) a client, (2)
who made confidential communications, (3) to facilitate the rendition of
professional legal services to the client, (4) between the client and the
attorney. See Voorhees Cattle Co., LLP v. Dakota Feeding Co., LLC, 2015
S.D. 68, ¶ 10, 868 N.W. 2d. 399, 405.

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professional legal services by a lawyer, or who consults a lawyer with a view to

obtaining professional legal services from [her].” SDCL 19-19-502(a)(1).

[¶11.] Here, Mary Ellen’s testimony regarding her relationship with Schrunk

is contradictory. At the deposition, Mary Ellen testified that there was no attorney-

client relationship; Schrunk was not representing her and her purpose for

contacting Schrunk was as a friend. She also testified that the topic of her

communications involved politics and family. On the other hand, after Schrunk was

subpoenaed, Mary Ellen testified during the evidentiary hearing that her purpose

in communicating with Schrunk was to obtain legal services; that Schrunk had been

providing her with legal advice for “months”; that Schrunk told her she would

continue to provide legal advice after January 1, 2014; and that she considered

herself Schrunk’s client. Mary Ellen did, however, admit that Schrunk told her she

could not represent her. Further, Mary Ellen acknowledged that she did not

formally retain Schrunk and Schrunk did not charge a fee.

[¶12.] Faced with Mary Ellen’s conflicting claims regarding her relationship

with Schrunk, the circuit court weighed the evidence and rejected the inconsistent

claims that Mary Ellen made at the evidentiary hearing. The circuit court found

that Mary Ellen understood in January 2014 that Schrunk would not represent her,

and thereafter, Mary Ellen could no longer reasonably believe that she was

Schrunk’s “client.” See SDCL 19-19-502(a)(1). Fairly read, the court’s findings

reflect that it rejected Mary Ellen’s claim that Schrunk told Mary Ellen that

Schrunk “would continue to give [Mary Ellen] legal advice.”

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[¶13.] Mary Ellen argues that the circuit court’s findings are clearly

erroneous because: (1) when she testified in her deposition that Schrunk was not

“representing” her, she believed the word “representation” only meant attorneys

who appear with a client in the courtroom; (2) Schrunk told her that Schrunk would

continue to give her legal advice regarding any of her legal issues; and (3) Schrunk

continued to provide her with legal advice. Therefore, Mary Ellen argues that she

considered herself a client throughout 2014. See State v. Catch the Bear, 352

N.W.2d 640, 645 (S.D. 1984) (The privilege hinges on the client’s reasonable belief

that she is consulting a lawyer to obtain professional legal services.). Consequently,

the privilege question on appeal involves the same disputed question of fact that

was presented to the circuit court: which version of Mary Ellen’s testimony was

most credible—the version given in her deposition or the version given at the

evidentiary hearing?

[¶14.] The circuit court was the best situated to resolve this factual dispute.

See State v. Rickabaugh, 361 N.W.2d 623, 624 (S.D. 1985) (upholding the trial

court’s factual findings in suppressing statements based on the attorney-client

privilege). We will not disturb the circuit court’s factual findings unless they are

“against a clear preponderance of the evidence or not supported by credible

evidence.” Id. Although there are two versions of the evidence, the circuit court’s

findings were supported by Mary Ellen’s own admission that she understood

Schrunk could not represent her, she had no attorney-client relationship with

Schrunk, and that she contacted Schrunk as a friend. Moreover, the circuit court

reviewed the documents in camera and still found that after January 1, 2014, Mary

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Ellen could no longer have reasonably believed she was consulting Schrunk with a

“view to obtain[] legal services.” See SDCL 19-19-502(a)(1). Furthermore, the court

did not find that Schrunk was “render[ing] professional legal services.” See id. Of

the 332 pages of communications submitted to the circuit court for in camera

review, only one document reflects the rendition of legal services—a Schrunk memo.

Schrunk authored the memo on December 10, 2013, before Mary Ellen admitted to

understanding that Schrunk could not represent her. Accordingly, the circuit court

found this memo was privileged. Although Mary Ellen asserts that Schrunk

continued to provide her legal advice after their January 1, 2014 meeting, Mary

Ellen failed to meet her burden of showing that Schrunk actually continued to

provide any legal advice. See Catch the Bear, 352 N.W.2d at 645 (“The burden of

showing entitlement to [] the privilege rests with its claimant.”).

[¶15.] Mary Ellen, however, points out that Molly and Brendon instituted

this gift litigation six months after Schrunk told her that Schrunk could not

represent her. Mary Ellen also points out that Mark is not a party in this gift suit.

Thus, she argues that Schrunk only declined to represent her in the divorce.

[¶16.] This argument is merely another attack on the factual findings of the

circuit court. Moreover, Mary Ellen’s argument is undercut by the fact that all

three of the suits arise out of the same facts and are an extension of the same family

controversy and the divorce. The record reflects that Mark insisted Mary Ellen

leave the California home, where Molly lived, because he believed Mary Ellen had

not been appropriately supportive of Molly’s problems. Mary Ellen left the

California home and allegedly told Molly and Brendon that they could have the

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personal property that she left behind. Shortly thereafter, Mark filed for divorce. A

review of the sealed documents indicates that the gift dispute arose because Mary

Ellen subsequently indicated she might contest the exclusion of the disputed

personal property from the court’s equitable division of the marital estate in the

divorce action. It appears that Mark wanted to keep that property separate for the

children. It also appears that Molly’s request for a restraining order in California

arose because Mary Ellen insisted on contacting Molly after Mark asked Mary Ellen

to leave the California home. Finally, it appears that Mary Ellen’s problems with

Molly may have been a factor leading to the divorce. Because the claims in all three

suits appeared to involve interrelated facts, Mary Ellen cannot claim that Schrunk

was not representing her against Mark in the divorce, but was simultaneously

representing her in the other suits.

[¶17.] Mary Ellen’s reliance on Parnes v. Parnes, 80 A.D.3d 948 (N.Y. App.

Div. 2011) is misplaced. Parnes involved a husband who contacted a friend and

attorney in anticipation of divorce. Id. at 949. The husband and attorney

exchanged emails discussing litigation strategy for the impending divorce and

custody dispute. Id. The husband testified that he contacted the attorney/friend to

seek legal advice. Id. at 950. The court concluded that the attorney-client privilege

protected the emails from discovery because the court found there was an attorney-

client relationship. “The context of the e-mails show[ed that the attorney] was

giving legal advice, sent from his law firm e-mail address, and billed [Husband] for

his time.” Id. Therefore, Parnes is inapposite.

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[¶18.] We affirm the circuit court’s factual findings. The findings support the

court’s conclusion that Mary Ellen failed to meet her burden of proving entitlement

to the privilege after January 1, 2014. Because Mary Ellen was not a client within

the meaning of SDCL 19-19-502(a)(1), she cannot assert the attorney-client

privilege under SDCL 19-19-502(b)(1).2

Waiver

[¶19.] The attorney-client privilege is waived if the holder of the privilege

“voluntarily discloses . . . any significant part of the privileged matter.” SDCL 19-

19-510. “Thus a lawyer-client privilege may be waived if the client voluntarily . . .

discloses the contents of the communication or advice to someone outside that

relationship.” Catch the Bear, 352 N.W.2d at 647.

[¶20.] In conducting its in camera review, the circuit court noted that some of

the documents Mary Ellen shared with Schrunk were privileged communications

between Mary Ellen and her South Dakota and California attorneys. The court,

however, ruled that Mary Ellen waived her privilege with respect to these

documents when she shared them with Schrunk. Mary Ellen appeals, pointing out

that the privilege protects communications made “among lawyers . . . representing

the same client” for the purposes of facilitating legal services. See SDCL 19-19-

502(b)(5).

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2. Because Mary Ellen failed to make the threshold showing that she was a
“client” under SDCL 19-19-502(a)(1), we do not address the court’s
alternative ruling that Mary Ellen’s communications after January 1, 2014
were not made “for the purpose of facilitating the rendition of professional
legal services.” See SDCL 19-19-502(b)(1) (providing that the privilege may
only be asserted with respect to “communications made for the purpose of
facilitating the rendition of professional legal services to the client”).

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[¶21.] Mary Ellen’s waiver argument presupposes that Mary Ellen was

Schrunk’s client thereby establishing an attorney-client relationship. However, we

previously concluded that the court did not err in finding that Mary Ellen failed to

meet her burden of proving that she was Schrunk’s client after January 2014.

Therefore, Mary Ellen waived the privilege when she shared the documents with

Schrunk.

[¶22.] GILBERTSON, Chief Justice, and SEVERSON, WILBUR, and KERN,

Justices, concur.

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