United States District Court, S.D. Florida
RAVI KADIYALA, individually, and as the assignee of CREDIT UNION MORTGAGE UTILITY BANC, INC., an Illinois corp., Plaintiff,
MARK JOHN PUPKE, et al., Defendants.
ORDER ON ACCOUNTANT-CLIENT PRIVILEGE FRAUD EXCEPTION
AFTER IN CAMERA REVIEW OF DOCUMENTS
WILLIAM MATTHEWMAN UNITED STATES MAGISTRATE JUDGE
CAUSE was previously before the Court upon the
Parties' Joint Motion Asking the Court to Test, Through
In Camera Review, the Claims of Privilege Asserted
Against the Production of Certain Documents [DE 150');">150');">150');">150');">150');">150');">150');">150]. This
matter was referred to the undersigned by United States
District Judge Kenneth A. Marra. See DE 359. On
September 5, 2019, the Court entered a Paperless Order
granting the motion requesting in camera review. [DE
152]. Defendants, Mark John Pupke and Marie Molly Pupke
("Defendants") submitted, via thumb drive and via
email, the documents to the undersigned's chambers as
about June 21, 2019, Plaintiff, Ravi Kadiyala
("Plaintiff), served a former defendant in this action,
John P. Miller, with a subpoena duces tecum. [DE
150');">150');">150');">150');">150');">150');">150');">150, p. 1]. Thereafter, Defendants filed a Motion for
Protective Order [DE 126]. The Court held a hearing on the
matter on July 25, 2019. On July 26, 2019, the Court entered
an Order which, in relevant part, granted in part and denied
in part the Motion for Protective Order. [DE 141]. In the
Order, the Court limited the scope of the subpoena and
required that counsel for both parties and counsel for Mr.
Miller "confer and arrange a procedure that permits
Defendants' counsel to determine on a pre-production
basis whether any of the documents are privileged."
Id. at p. 3. The Court also stated that "[i]f
Defendants have a good-faith belief that any of the documents
are privileged, they shall create a privilege log in
compliance with the Local Rules. If the parties cannot
resolve the matter, they can bring the issue to the Court for
parties conferred and determined a procedure for production
of the documents. [DE 150');">150');">150');">150');">150');">150');">150');">150, p. 2]. After Defendants'
counsel reviewed the documents, counsel produced the
responsive documents to Plaintiffs counsel, along with a
privilege log. Id. Defendants withheld 109 pages of
documents on the basis of accountant-client privilege.
Id. On August 18, 2019, Defendants also produced to
Plaintiffs counsel limited Intuit Quickbooks reports that
were created by Defendants' counsel; Defendants'
counsel did not, however, produce the actual, unredacted
Quickbooks reports. Id. at p. 3.
Parties' motion requesting in camera review,
Plaintiff argues that "there is no basis here for
Defendants to withhold any document or file that Mr. Miller
has produced in response to Plaintiffs Subpoena upon a claim
that it is protected from disclosure to Plaintiff Kadiyala by
the accountant-client privilege." [DE 150');">150');">150');">150');">150');">150');">150');">150, p. 3].
According to Plaintiff, the accountant-client privilege does
not apply because "Plaintiff intends to use this
material to show that Defendants were involved in a
on the other hand, contend that the materials in the
privilege log are properly withheld and privileged because
the documents would never have been disclosed to third
parties, and Defendants-the accountant's clients-do not
wish to waive the privilege. [DE 150');">150');">150');">150');">150');">150');">150');">150, p. 4]. With regard to
the .qbb (Quickbooks) file, Defendant asserts that "this
document is special in that access was only provided to the
Miller Defendants in an advisory role and the file itself was
never intended to be disclosed to third parties. Furthermore,
given the nature of the file, it poses an additional
evidentiary concern to Defendants." Id.
Court, sitting in diversity jurisdiction, applies the
substantive law of the forum state, Florida. See Mesa v.
Clarendon Nat. Ins. Co., 799 F.3d 1353, 1358 (11th Cir.
2015); Montanez v. Liberty Mut. Fire Ins. Co., No.
18-CIV-80788-RAR, 2019 WL 3302308, at *3 (S.D. Fla. July 23,
2019). Section 90.5055, Florida Statutes, sets forth the
statute states in relevant part that
A client has a privilege to refuse to disclose, and to
present any other person from disclosing, the contents of
confidential communications with an accountant when such
other person learned of the communications because they were
made in the rendition of accounting services to the client.
This privilege includes other confidential information
obtained by the accountant from the client for the purpose of
rendering accounting advice.
Fla. Stat. § 90.5055(2). "A communication between
an accountant and the accountant's client is
'confidential' if it is not intended to be disclosed
to third persons other than: (1) those to whom disclosure is
in furtherance of the rendition of accounting services to the
client; [or] (2) those reasonably necessary for the
transmission of the communication." F.D.I.C. v.
Kaplan, 2015 WL 5474489, at *3 (M.D. Fla. Sept. 16,
2015)(citing Fla. Stat. § 90.5055(1)(c)). "To
invoke the accountant-client privilege; courts generally
require parties to demonstrate the aforementioned elements
and to also provide a privilege log to the extent that any
documents were withheld from production." TIC Park
Ctr. 9, LLC v. Cabot, No. 16-24569-CIV, 2017 WL 9988745,
at *9 (S.D. Fla. June 9, 2017).
are exceptions to the accountant-client privilege. For
example, the privilege does not exist when "[t]he
services of the accountant were sought or obtained to enable
or aid anyone to commit or plan to commit what the client
knew or should have known was a crime or fraud." §
90.5055(4)(a). This is the exception relied on by Plaintiff
when they argue that the privilege does not protect the
documents and Quickbooks file at issue.
Court has reviewed the documents listed in the privilege log
[DE 150');">150');">150');">150');">150');">150');">150');">150-1]. The two letters (GK000019-000022 and
GK000042-43), the internal intake form (GK000171-GK000272),
and the Quickbooks file (GK000629) are communications between
an accountant, Mr. Miller, and Defendants. Furthermore, it is
clear from a review of the documents that they were not
intended to be disclosed to third persons. Thus, the only way
that Plaintiff would be entitled to production of ...