Nevada Supreme Court: No Fiduciary Exception to The Attorney-Client Privilege

Several states have adopted a fiduciary exception to the attorney-client privilege, which prevents a fiduciary such as a trustee from asserting attorney-client privilege against beneficiaries of a trust or estate on matters of administration. In the May 2020 case of Canarelli v. Eighth Judicial District Court, the Nevada Supreme Court held that no fiduciary exception to the attorney-client privilege exists under Nevada law. 

Scott Canarelli was the beneficiary of an irrevocable trust. The Trust contained minority interests in several business entities owned by Scott’s parents. Scott assured that the trustees were unlawfully withholding trust distributions for Scott’s health, education, maintenance, and support. Scott’s parents resigned as trustees and Lubbers became the successor family trustee. A week after Scott’s parents resigned, Lubbers entered into a purchase agreement exceeding $25 million on behalf of the Trust to sell off the Trust’s ownership interest in their business entities. 

Scott filed a petition demanding that Lubbers proves all information relating to the purchase agreement. Lubbers hired attorneys and responded to the petition in 2013. Lubbers resigned as trustee in 2017 and died six months later. 

Regarding the documents in dispute, Scott’s parents and Lubbers petitioned the Nevada Supreme Court for a writ of prohibition preventing the district court from compelling production. The former trustees also petitioned for a writ of mandamus to find the documents undiscoverable and order for their return or destruction. 

In Nevada, a client’s notes and communications are covered by attorney-client privilege and the Nevada Supreme Court held that the exception did not apply here and ultimately granted the petition and directed the issuance of a writ of prohibition prohibiting the district court from compelling production. 

See Nevada Supreme Court: No Fiduciary Exception to The Attorney-Client Privilege, Probate Stars, June 2, 2020.