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HomeMy WebLinkAbout2003-1307 Civil PFB MEMBERS’ SERVICE CORP. : IN THE COURT OF COMMON PLEAS OF Plaintiff : CUMBERLAND COUNTY, PENNSYLVANIA : vs. : 03-1307 CIVIL : CIVIL ACTION – EQUITY TERRI L. SCHOONOVER, : Defendant : IN RE: PLAINTIFF’S MOTION TO COMPEL BEFORE HESS, J. MEMORANDUM OPINION AND ORDER The discovery motion, currently before the court, frames the question of whether the disclosure of the names of clients violates the privilege which exists between those clients and their accountant. We are satisfied that such disclosure does not violate the privilege. To the extent that our prior discovery orders in this case suggest otherwise, they are herewith rescinded. The underlying complaint filed by PFB Members’ Service Corp. (“PFB”) alleges that the defendant, Terri L. Schoonover (“Schoonover”) breached her professional services contract when she resigned employment from PFB and entered into employment with Farley Financial Inc. The complaint alleges that she solicited and/or performed accounting services for approximately twenty-four clients of PFB either for her own benefit or for the benefit of Farley Financial Inc. In its most recent discovery request, the plaintiff has submitted a list of names of former clients of PFB, seeking an indication as to whether these persons became clients of Farley Financial Inc. Both parties agree that the issue presently before the court is whether an accountant’s clients’/former clients’ identities are privileged information that is not discoverable. Richard R. Farley, through counsel, argues that such biographical information is privileged. He analogizes to the attorney-client privilege, citing the case of Brennan v. Brennan, NO. 03-1307 CIVIL 422 A.2d 510 (Pa.Super. 1980). Brennan stands for the proposition that, while it is not always a violation of the attorney-client privilege to disclose one’s client’s address and phone number, the attorney could rely on the privilege where the client had expressly asked that the information be kept confidential and where the exercise of the privilege did not, otherwise, operate to permit or continue a crime or fraud. The only other case relied upon by Mr. Farley is the case of Wolfington v. Wolfington Body Co. This case is by no means on point and has, in any event, not been reported. The accountant-client privilege is a creature of statute and appears at 63 P.S. 9.11a. It information bars the disclosure of “ of which [the accountant] may have become possessed unless the sharing of confidential information is within the peer review process.” The attorney- client privilege provides that counsel shall “not be competent or permitted to testify to communications confidential made to him by his client…” 32 Pa.C.S.A. 5928. Mr. Farley makes the argument that “information” is more encompassing than “communications” and therefore the accountant-client privilege is arguably broader than the attorney-client privilege. We are satisfied that that is not the law. th In Orix USA Corp. v. DVI Inc., 37 D & C 4 491 (1997), the Honorable R. Stanton Wettick, Jr., of Alleghany County, dealt with the question of whether a crime-fraud exception applied to the Pennsylvania accountant-client privilege. In determining that such an exception applied, Judge Wettick summarized the law as follows: If 63 P.S. § 9.11a should be considered without taking into account any other evidentiary privileges, I might base a ruling solely on the language of this legislation. However, this legislation was enacted in the context of case law and legislation protecting confidential 2 NO. 03-1307 CIVIL communications made for the purposes of obtaining professional services. The legislature adopted this legislation creating an accountant- client privilege because the common law did not protect communications between the accountant and the client. This legislation “makes only a limited change in the common law.” Agra Enterprises Inc. v. Brunozzi, 302 Pa. Super 166, 171, 448 A.2d 579, 582 (1982). It was not intended to extend the full scope of the attorney- client privilege to accountant-client relationships. Id. See Rubin v. Katz, 347 F.Supp. 322 (E.D. Pa. 1972), which was cited with approval in Agra Enterprises Inc. v. Brunozzi, supra at 171, 448 A.2d at 582, where the district court said: “Defendants’ attempt to draw an analogy to the broad, stringent protections of the attorney-client privilege as enforced in Richardson v. Hamilton International Corp., supra, and John Doe v. A. Corp., 330 F. Supp. 1352 (S.D.N.Y. 1971) cannot succeed. The Pennsylvania statute as described above was clearly intended to make a limited change in the law, and not to extend the common-law attorney-client privilege to accountant-client relationships. Defendants have not shown that the prophylactic rule established by common law in the attorney-client relationship has now been extended to the accountant- client case.” (Footnotes omitted.) Id. at 494-495. We are satisfied that the request of the plaintiff seeking the names of Farley clients, particularly clients serviced by Ms. Schoonover, does not implicate the accountant-client privilege. The privilege, instead, is designed to protect the disclosure of private financial 3 NO. 03-1307 CIVIL information of those clients. Previous orders of this court have suggested that Mr. Farley need not disclose the identify of clients who have decided not to be identified in response to discovery requests. We rescind that limitation. We save for another day the question of whether a client’s identity should be disclosed where the client, at the inception of the professional relationship, specifically indicated that his identity should remain confidential. To date, this issue has not been raised. ORDER AND NOW, this day of August, 2006, the motion of the plaintiff “to compel compliance with August 5, 2006, order of court” is GRANTED and the noticing of the deposition of Richard Farley is herewith authorized. In the alternative, and in lieu of a deposition, he may provide verified answers to the questions attached to the plaintiff’s motion as Exhibit E. Said answers shall be provided within thirty (30) days unless an extension is granted by the court. BY THE COURT, _______________________________ Kevin A. Hess, J. Wade D. Manley, Esquire For the Plaintiff Bryon R. Kaster, Esquire For Richard Farley 4 PFB MEMBERS’ SERVICE CORP. : IN THE COURT OF COMMON PLEAS OF Plaintiff : CUMBERLAND COUNTY, PENNSYLVANIA : vs. : 03-1307 CIVIL : CIVIL ACTION – EQUITY TERRI L. SCHOONOVER, : Defendant : IN RE: PLAINTIFF’S MOTION TO COMPEL BEFORE HESS, J. ORDER AND NOW, this day of August, 2006, the motion of the plaintiff “to compel compliance with August 5, 2006, order of court” is GRANTED and the noticing of the deposition of Richard Farley is herewith authorized. In the alternative, and in lieu of a deposition, he may provide verified answers to the questions attached to the plaintiff’s motion as Exhibit E. Said answers shall be provided within thirty (30) days unless an extension is granted by the court. BY THE COURT, _______________________________ Kevin A. Hess, J. Wade D. Manley, Esquire For the Plaintiff Bryon R. Kaster, Esquire For Richard Farley :rlm