Moler v. McCandless

2008 UT 46
This opinion is subject to revision before final
publication in the Pacific Reporter.
IN THE SUPREME COURT OF THE STATE OF UTAH
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Dennis Moler, an individual; and 	No. 20070048
Marilynn Moler, an individual,
Plaintiffs and Appellants,
v.
CW Management Corporation, a
Utah corporation; and Christopher 	F I L E D
McCandless, an individual,
Defendants and Appellees. 	July 18, 2008
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Third District, Salt Lake
The Honorable Tyrone E. Medley
No. 060902611
Attorneys: 	Richard F. Ensor, Evan S. Strassberg, Salt Lake City,
for plaintiffs
Lincoln W. Hobbs, Lisa M. McGarry, Salt Lake City,
for defendants
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DURRANT, Associate Chief Justice:
INTRODUCTION
¶1 	This case requires us to decide whether rule 504 of the
Utah Rules of Evidence, which delineates the lawyer-client
privilege, protects communications between a lawyer and a
client’s representative, even if that client is an individual and
not a corporation or other business entity. 	We hold that such
communications may be privileged regardless of whether the client
is a corporation or a natural person so long as the requirements
of rule 504 are met. 	Under rule 504(a)(4), a client’s
representative is “one having authority to obtain professional
legal services, or to act on advice rendered pursuant thereto, on
behalf of the client, or one specifically authorized to
communicate with the lawyer concerning a legal matter.”

1 Several of the original defendants named in this lawsuit
settled with the Molers and are no longer parties. 	For
convenience and because which of the defendants sought to compel
Mr. Moler’s testimony is irrelevant to the issue before us, we
refer throughout this opinion to any and all defendants as the
“Sellers.”
No. 20070048 	2
BACKGROUND
¶2 	The parties to this case dispute whether communications
between Dennis and Marilynn Moler (the “Molers”) and their
daughter, Wendy Moler-Lewis, are protected by the lawyer-client
privilege. 	In 2002, the Molers contracted to purchase a new home
from Franklin Homes in a new gated community named Redfeather
Estates in Sandy, Utah. 	At the time the Molers first met with
Redfeather Estates’ real estate agent, Christopher McCandless,
the homes in Redfeather Estates were burdened with covenants,
conditions, and restrictions (“CC&Rs”) that limited occupancy to
households with at least one person fifty-five years of age or
older. 	But before the Molers closed on their purchase, the
sellers executed and recorded amended CC&Rs removing the age
restriction from Redfeather Estates. 	The Molers learned of the
restriction’s removal only after they closed on the purchase of
their residence. 	They eventually filed this lawsuit against
McCandless, Franklin Homes, and other entities involved in
Redfeather Estates’ development and sale (collectively, the
“Sellers”). 1 	The lawsuit alleged several causes of action
related to the sale of the property and the removal of the
restriction.
¶3 	Before filing suit, the Molers enlisted their daughter,
Moler-Lewis, to help them with various aspects of the dispute.
Although Moler-Lewis graduated from law school and was at one
time a practicing attorney, she has never represented the Molers
in this action. 	She did, however, assist the Molers in
identifying and retaining a law firm to represent them. 	In
addition, Moler-Lewis was present and participated in some
conversations between the Molers and McCandless. 	Therefore,
Moler-Lewis is also a witness to some of the facts underlying the
lawsuit.
¶4 	There are two sets of communications between the Molers
and Moler-Lewis at issue in this case. 	The first set occurred
before the Molers retained counsel in anticipation of litigation.
The second set occurred after the Molers retained counsel. 	After
the Molers filed suit, counsel for the Sellers deposed Mr. Moler.
Mr. Moler was asked to describe in detail all communications he
and Mrs. Moler had with Moler-Lewis concerning the lawsuit,

2 Price v. Armour, 949 P.2d 1251, 1254 (Utah 1997).
3 	No. 20070048
including those where the Molers’ counsel was present. 	Counsel
for the Molers objected and instructed Mr. Moler not to answer,
invoking the lawyer-client privilege. 	But later in the same
deposition, Mr. Moler recounted some conversations he and Mrs.
Moler had with Moler-Lewis prior to retaining counsel.
¶5 	The Sellers moved the district court to compel Mr.
Moler to answer the questions that he had refused to answer about
those conversations, and the district court granted the motion,
holding that the lawyer-client privilege did not apply. 	The
court reasoned that the conversations with Moler-Lewis could not
be privileged because Moler-Lewis was neither the Molers’
attorney nor their representative as contemplated by rule
504(a)(4) in that she was not retained for legal advice and her
services were not “essential to [the Molers’] representation.”
In addition, the district court held that even if Moler-Lewis was
the Molers’ representative, Mr. Moler had waived the privilege by
testifying as to other conversations between himself and Moler-
Lewis that occurred before the Molers retained counsel in
anticipation of litigation.
¶6 	The Molers filed this interlocutory appeal, and we have
jurisdiction pursuant to Utah Code section 78A-3-102(3)(a)
(2008).
STANDARD OF REVIEW
¶7 	“The existence of a privilege is a question of law for
the court, which we review for correctness, giving no deference
to the trial court’s determination.” 2
ANALYSIS
¶8 	We begin and end our analysis with a plain-language
review of Utah Rule of Evidence 504:
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 the client and the client’s
representatives, lawyers, lawyer’s
representatives, and lawyers representing
others in matters of common interest, and
among the client’s representatives, lawyers,

3 Utah R. Evid. 504(b) (emphases added).
4 449 U.S. 383 (1981).
No. 20070048 	4
lawyer’s representatives, and lawyers
representing others in matters of common
interest, in any combination. 3
Therefore, in order to determine whether each communication at
issue was privileged, the district court was required to answer
two questions: 	First, was Moler-Lewis a representative of the
Molers as defined in rule 504(a)(4)? 	Second, was each
communication at issue a “confidential communication” as defined
in rule 504(a)(5) and (6)? 	We will first discuss whether the
district court correctly applied rule 504 to the communications
at issue. 	Then we will review the district court’s ruling that
Mr. Moler waived the privilege by testifying as to conversations
between the Molers and Moler-Lewis that occurred before the
Molers retained counsel in anticipation of litigation.
I. 	WAS MOLER-LEWIS A “REPRESENTATIVE OF THE CLIENT”?
¶9 	Utah Rule of Evidence 504(a)(4) defines a
“representative of the client” as “one having authority to obtain
professional legal services, or to act on advice rendered
pursuant thereto, on behalf of the client, or one specifically
authorized to communicate with the lawyer concerning a legal
matter.” 	Whether Moler-Lewis qualified as such a representative
depends, in part, on whether the Molers qualified as “clients.”
The Sellers contend that the Molers could not have been “clients”
as that term is used in the definitional subsection (a)(4)
because “client” in that subsection is limited to corporate
entities and other legally recognized entities that must act
through human beings to conduct their affairs. 	In support of
this argument, the Sellers point to the advisory committee note
to rule 504: 	“The committee revised the proposed rule . . . to
address the issues raised in Upjohn Co. v. United States as to
when communications involving representatives of a corporation
are protected by privilege.” 	(Citation omitted.) 	They argue
that because the rule was revised in response to Upjohn, which
resolved the issue of who may represent a corporate entity, only
corporations, and not natural persons, can have representatives. 4
The Sellers urge us to adopt a rule restricting to corporations
and other business entities the right to have representatives
with whom communications might be confidential.
¶10 	We disagree with the Sellers’ reasoning as to the
meaning of the term “client” in rule 504. 	In our view, the term

5 Id. at 391-92.
6 See, e.g., State v. Jancsek, 730 P.2d 14, 21 (Or. 1986)
(holding that the “client” to which the definition of
“representative” applies must be a business entity).
5 	No. 20070048
“client” as used throughout the rule refers not just to
corporations or other business entities, but to natural persons
as well. 	Indeed, “client” is specifically defined in subsection
(a)(1) to include “a person.”
¶11 	Further, the fact that this rule was revised in
response to the Upjohn case does not lead to the conclusion that
“client” in rule 504(b) should be read to exclude individuals.
In Upjohn, the United States Supreme Court held that low-level
and mid-level employees--not just those in the “control
group”--could potentially be protected by the attorney-client
privilege. 5 	While this holding defines the potential scope of
the federal privilege in the corporate context, it does not
purport to limit the term “representative of a client” to that
context. 	The Sellers would read “client” as used in the first
line of subsection (b) to be different from the same term as used
subsequently in the same subsection and throughout the rule.
That is, in the first line of subsection (b), under the Sellers’
interpretation, “client” refers only to corporate entities, but
in every other usage throughout the rule, “client” includes
natural persons as well. 	Such a reading is contrary to the plain
language of the rule and without justification. 	The plain
language of the rule, which explicitly defines client to include
a person, leads us to reject the inference the Sellers draw from
the Upjohn case.
¶12 	We recognize that some jurisdictions have adopted the
contrary rule that only corporate clients or similar entities may
have representatives. 6 	We also recognize the concern that
allowing individuals to have representatives could extend the
privilege to a limitless number of third parties, potentially
subverting the truth-finding function of courts. 	But in our
view, this concern is adequately addressed by the language of the
rule, which carefully limits a “representative” to “one having
authority to obtain professional legal services, or to act on
advice rendered pursuant thereto, on behalf of the client, or one
specifically authorized to communicate with the lawyer concerning
a legal matter.” 	Because the rule so limits who may be a
representative, our holding will not unduly expand the privilege.
¶13 	Moreover, from a policy perspective, we find it
salutary that natural persons should be afforded the same level

No. 20070048 	6
of protection when communicating with their representatives as
corporations now enjoy. 	In many cases, an individual’s need to
consult with an advisor regarding the facilitation of legal
services may be every bit as acute as the need of a corporation
to do so, often more so.
¶14 	In this case, however, the district court found that
such protection did not extend to the Molers because Moler-Lewis
did not qualify as their representative. 	The district court drew
this conclusion because Moler-Lewis was not retained to give
legal advice and her services were not “essential to [the
Molers’] representation.” 	In so concluding, the district court
imposed a requirement not found in rule 504. 	In order to resolve
whether Moler-Lewis was a representative of the client, the
district court need make only the following factual
determination: 	Was Moler-Lewis “one having authority to obtain
professional legal services, or to act on advice rendered
pursuant thereto, on behalf of the client, or one specifically
authorized to communicate with the lawyer concerning a legal
matter”? 	Because the district court applied the wrong standard,
it did not make the findings necessary for us to conduct a review
using the correct standard. 	Therefore, we remand for the
district court to make factual determinations and apply the
correct standard to resolve whether Moler-Lewis qualified as the
Molers’ representative.
II. 	DID EACH COMMUNICATION AT ISSUE CONSTITUTE A “CONFIDENTIAL
COMMUNICATION” SUCH THAT IT MIGHT QUALIFY AS PRIVILEGED?
¶15 	The second question that must be resolved is whether
each communication at issue is a “confidential communication”
such that it might qualify as privileged. 	Subsection (a)(5) of
rule 504 defines a “communication” to include “advice given by
the lawyer in the course of representing the client and includes
disclosures of the client and the client’s representatives to the
lawyer or the lawyer’s representative incidental to the
professional relationship.” 	And under subsection (a)(6), a
communication is confidential if it is (1) “confidential” and
(2) made for the purpose of “facilitating the rendition of
professional legal services to the client.” 	To satisfy the
confidentiality requirement under subsection (a)(6), the
communication must “not [be] intended to be disclosed to third
persons other than those to whom disclosure is in furtherance of
the rendition of professional legal services to the client or
those reasonably necessary for the transmission of the

7 Utah R. Evid. 504(a)(6).
8 Soter’s, Inc. v. Deseret Fed. Sav. & Loan Ass’n, 857 P.2d
935, 939-42 (Utah 1993).
9 Id. at 940.
7 	No. 20070048
communication.” 7 	Because the district court concluded that
Moler-Lewis was not the Molers’ representative, it did not reach
this question. 	Thus, we remand for the district court to
determine as to each communication in dispute whether the
communication was (1) confidential and (2) made for the purpose
of facilitating the rendition of professional legal services to
the client.
III. 	IF A PRIVILEGE DID ATTACH TO EACH COMMUNICATION AT ISSUE,
DID MR. MOLER WAIVE IT BY ANSWERING CERTAIN DEPOSITION QUESTIONS?
¶16 	The resolution of the final issue--whether Mr. Moler
waived the privilege--is dependent upon the district court’s
resolution on remand of when, if at all, the lawyer-client
privilege came into existence. 	Because the district court used
the wrong legal standard in holding that Moler-Lewis was not the
Molers’ representative and that question remains unresolved, we
are unable to reach a conclusion as to whether Mr. Moler waived
the lawyer-client privilege.
¶17 	Waiver is the intentional relinquishment of a known
right. 8 	To establish waiver, a defendant must show that the
plaintiff had (1) an existing right, (2) knowledge of its
existence, and (3) an intent to relinquish the right. 9
Therefore, in order to waive the privilege as to any given
communication, the lawyer-client privilege must exist when the
communication at issue occurred, and the holder of the privilege
must consent to the disclosure. 	A plain-language reading of rule
507(a) of the Utah Rules of Evidence confirms this principle:
A person upon whom these rules confer a
privilege against disclosure of the
confidential matter or communication waives
the privilege if the person or a predecessor
while holder of the privilege voluntarily
discloses or consents to the disclosure of
any significant part of the matter or
communication. 	(Emphasis added.)
The language of the rule suggests that there are two temporal
requirements for waiver. 	First, the communication must be

No. 20070048 	8
privileged at the time it occurred. 	Second, the disclosure that
constitutes waiver of the privilege must be made while the person
disclosing holds the privilege.
¶18 	The district court, although concluding that the
privilege never existed, nevertheless concluded that the
privilege, if it did exist, had been waived. 	Understandably, the
district court failed to make findings of fact as to when the
privilege came into existence. 	Furthermore, the record provided
to us on this appeal (and which, presumably, is the same record
that was before the district court) does not contain a full
transcript of the deposition at which Mr. Moler apparently
testified about discussions between the Molers and Moler-Lewis.
We therefore are unable to determine when the privilege attached
and, without the benefit of a complete record, are also uncertain
on what basis the district court concluded that Mr. Moler waived
the privilege.
¶19 	Furthermore, it is apparent from the record we do have
that Moler-Lewis was present on numerous occasions both before
and after the Molers retained counsel in anticipation of
litigation. 	Even if Mr. Moler voluntarily testified regarding
one or more confidential matters, it does not follow that he
waived all lawyer-client privileges for all communications. 	Rule
507(a) restricts the scope of each waiver to a communication
about which “any significant part of the matter or communication”
has been disclosed. 	Therefore, Mr. Moler did not waive the
privilege for a particular communication if he did not disclose
any significant part of the particular matter or communication at
issue.
¶20 	We therefore remand to the district court for an
assessment of whether a privilege arose under the framework we
have described and, if so, when it arose. 	Only when these
questions are resolved may the district court properly determine
whether Mr. Moler waived the privilege during his deposition.
CONCLUSION
¶21 	We conclude that communications between clients and
their representatives may be privileged regardless of whether the
client is a corporation or a natural person. 	Rule 504(a)(4)
defines a representative as “one having authority to obtain
professional legal services, or to act on advice rendered
pursuant thereto, on behalf of the client, or one specifically
authorized to communicate with the lawyer concerning a legal
matter.” 	We remand to the district court to make a determination

9 	No. 20070048
as to each communication at issue in this case using the
framework we have described.
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¶22 	Chief Justice Durham, Justice Wilkins, Justice Parrish,
and Justice Nehring concur in Associate Chief Justice Durrant’s
opinion.