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Current Developments in the Commercial Divisions of the
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Posted: April 3, 2016

LLC Member’s Communications with LLC’s Counsel Not Privileged in Dispute Over LLC Ownership

On March 17, 2016, Justice Oing of the New York County Commercial Division issued a decision in Meissner v. Tracy Yun, 2016 NY Slip Op. 30468(U), holding that an LLC’s member’s communications with the LLC’s counsel were not protected by the attorney-client privilege, explaining:

For a party to assert this privilege, an attorney-client relationship must have been established. Such a relationship is established when a party contacts the attorney in his or her capacity as an attorney for the purpose of obtaining legal advice or services. In addition, the information sought to be protected from disclosure must be a confidential communication made to the attorney for the purpose of obtaining legal advice or services.

The record demonstrates that [the attorney] represented Manhattan Review, LLC (“MR”), rather than [the defendant]. First, the only retainer agreement produced by Yun is an unsigned retainer agreement between [the attorney] and MR. In addition, the legal work [the attorney] did was for the benefit of MR including, inter alia, . . . incorporating MR, drafting MR’s operating agreement, and providing advice about MR’s lease — and [the attorney] billed MR for this work.

. . . [The attorney’s] statements that he believed he represented [the defendant] as an individual rather than MR is also unavailing, as an attorney’s statement is insufficient to establish that an attorney-client relationship existed.

(Internal quotations and citations omitted). This decision illustrates the importance of making sure that the nature of the attorney-client relationship is explained in the engagement letter and, if that relationship evolves, that those changes also be reflected in an engagement letter.

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