Master Recommends Entry of Order Finding that the Trustee Waived Attorney-Client Privilege for Certain Communications

Mennen v. Wilmington Trust, C.A. No. 8432-ML (September 18, 2013)

In this final report, the Master recommended that the Court enter an order finding that the trustee waived its attorney-client privilege for all communications with counsel regarding its powers and duties under the trust agreements, other than communications in which counsel directly evaluated the trustee’s potential exposure or its litigation strategy. The trustee invoked an advice of counsel defense regarding the directed nature of the trust and the Master had previously found that the trustee had waived attorney-client privilege as to all powers and responsibility documents. The trustee is maintaining that the trust is directed. Given that stance, the Master found that the trustee placed at issue the advice of counsel regarding to what extent the trust agreement required the corporate trustee to follow investment directions from the individual trustee. The trustee agreed that it was waiving privilege as to all powers and responsibilities documents, but it sought to limit that waiver to communications relating to challenged decisions. But the Master concluded that allowing that “would unfairly limit or eliminate the Beneficiaries’ ability to assess the reliability of the advice and the factual information on which it was based.” The trustee cited patent infringement cases and argued that the waiver should only extend to the information base of the legal advice from which the reliance allegedly arose. The Master, however, found that the patent infringement case law was not convincingly analogous.


William M. Kelleher, Director
Gordon, Fournaris & Mammarella, P.A.