Chancery Applies Privilege Rules in Business Negotiations Context

Morris James LLP

Twin Willows, LLC v. Pritzkur, C.A. No. 2020-0199-PWG (Del. Ch. Feb. 28, 2022)

This decision involved a Master in Chancery applying well-settled rules on the attorney-client privilege, common interest, and work product doctrines. Respondent Pritzkur was appointed to serve as partition trustee for owners and tasked with selling the property. Pritzkur negotiated a sale agreement that was ultimately assigned to Petitioner Twin Willows. The agreement was not fully performed, and Twin Willows moved to compel production of communications between Pritzkur and the owners. Pritzkur asserted both common interest privilege and attorney work product.

The Master granted in part and denied in part Twin Willows’ motion.  The Master addressed several categories of documents. Most notably, the Master explained the common interest doctrine’s application to a situation involving both business and legal issues, while conducting an in camera review of the challenged documents.  Here, Pritzkur and the other Respondents shared a sufficiently similar interest, as evidenced by their conduct throughout the litigation, and their joint goal of selling the property.  However, the Master noted that certain withheld communications appeared to relate to the negotiation of a commercial transaction, and therefore not within the ambit of the common interest privilege.  While discussions of the performance or negotiation were commercial in nature and not privileged, discussions of ancillary property rights and co-tenancy issues, as well as documents related to the original partition matter were privileged.  Communications not pertaining to a legal objective were ordered to be produced, and documents concerning both commercial and legal interests were ordered to be redacted accordingly.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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