crime-fraud exception in Illinois

2024Instead, the trial court ruled that the crime-fraud exception “may extend to potential torts that involve deliberate misrepresentations, including defamation.” The court relied on Radiac Abrasives, Inc. v. Diamond Technology, Inc., 177 Ill.

2024Therefore, to the extent that there were communications between defendants and their counsel related to the selling and buying of plaintiff’s equipment, such communications may be subject to the crime-fraud exception.” Id.

2024In response, the law firms argued that (i) Illinois has not extended the crime-fraud exception to conspiracy or tort claims other than fraud, and (ii) MacDonald failed to make a prima facie case for applying the exception, having presented no evidence supporting his allegations. -5- 1-23-0089 ¶ 15 The trial court rejected the law firms’ argument that Illinois Supreme Court precedent, including In re Marriage of Decker, 153 Ill. 2d 298 (1992), precludes expanding the exception beyond criminal and fraudulent conduct.

2024Decker, 153 Ill. 2d at 313, 321 ; MDA City Apartments, 2012 IL App (1st) 111047, ¶ 28 (once information determined to fall within scope of attorney-client privilege, burden on party seeking information to show exception applies). ¶ 26 Absent an exception, there is no dispute that MacDonald seeks protected communications. ¶ 27 Prima Facie Showing of Crime-Fraud Exception ¶ 28 The crime-fraud exception, a “major exception to the attorney-client privilege,” pertains when a client seeks the lawyer’s services “in furtherance of criminal or fraudulent activity.” Decker, 153 Ill. 2d at 313 ; Radojcic

2021“In other words, the attorney-client privilege ‘takes flight if the relation is abused.’ ” Id. (quoting Clark v. United States, 289 U.S. 1, 15 (1933)). ¶ 22 A client may consult with his attorney about the legal implications of a proposed course of conduct, or how to defend against the legal consequences of past conduct, without triggering the crime-fraud exception.

2021“Such a client ‘will have no help from the law.’ ” Id. (quoting Clark, 289 U.S. at 15 ). ¶ 23 The focus of the crime-fraud exception is on the intent of the client, not the legitimacy of the services provided by the attorney.

2024The court apparently relied on the parties’ oral argument and the record.”). ¶ 115 As our supreme court said in Addison Insurance Co. v. Fay, 232 Ill. 2d 446, 453 (2009), in determining that the factual findings surrounding an accident involving two boys was subject to de novo review: “In this case, the trial court heard no live testimony.

2013See Addison Insurance Co. v. Fay, 232 Ill. 2d 446, 453 (2009). ¶ 35 Furthermore, the only “finding” the trial court made was that the State had failed to make the evidentiary showing required for application of the exception.

2020Once that threshold has been met, the court has discretion to conduct the in camera review and in exercising that discretion, may consider such factors as “the volume of materials it is asked to review, the relative importance of the information to the case, and the likelihood that in camera review of the material, along with other evidence, will support the crime-fraud exception.” Id. at 324 (citing Zolin, 491 U.S. at 572 ).

2013“However, if the communication itself is used to make the initial determination of whether the crime-fraud exception applies, the privilege is violated and the protected interest suffers because of the forced public revelation.” Id. ¶ 45 In Decker, this court addressed this evidentiary dilemma and adopted the approach set forth in United States v. Zolin, 491 U.S. 554 (1989).

2025In People v. Radojcic, 2013 IL 114197, ¶ 1 , documentary evidence in the form of grand jury transcripts was considered to determine whether the crime-fraud exception to the attorney-client privilege applied.

2024Decker, 153 Ill. 2d at 313, 321 ; MDA City Apartments, 2012 IL App (1st) 111047, ¶ 28 (once information determined to fall within scope of attorney-client privilege, burden on party seeking information to show exception applies). ¶ 26 Absent an exception, there is no dispute that MacDonald seeks protected communications. ¶ 27 Prima Facie Showing of Crime-Fraud Exception ¶ 28 The crime-fraud exception, a “major exception to the attorney-client privilege,” pertains when a client seeks the lawyer’s services “in furtherance of criminal or fraudulent activity.” Decker, 153 Ill. 2d at 313 ; Radojcic

2021North Pacific Lumber Co. v. Unis, 579 P.2d 1291, 1295 (Or. 1978)). ¶ 24 To justify disclosure of otherwise privileged attorney-client communications, a party asserting that the crime-fraud exception applies must do more than simply allege fraud or illegality.

2021North Pacific Lumber Co. v. Unis, 579 P.2d 1291, 1295 (Or. 1978)). ¶ 24 To justify disclosure of otherwise privileged attorney-client communications, a party asserting that the crime-fraud exception applies must do more than simply allege fraud or illegality.

2013See, e.g., United States v. BDO Seidman, LLP, 492 F.3d 806, 818 (7th Cir. 2007); In re Feldberg, 862 F.2d 622, 626 (7th Cir. 1988).

2013See, e.g., United States v. BDO Seidman, LLP, 492 F.3d 806, 818 (7th Cir. 2007); In re Feldberg, 862 F.2d 622, 626 (7th Cir. 1988).

2013The appellate court reversed, holding that the crime-fraud exception applied. 2012 IL App (1st) 102698 . ¶2 For the reasons that follow, we affirm the judgment of the appellate court. ¶3 BACKGROUND ¶4 On December 5, 2007, a Cook County grand jury entered a 52-count indictment against Radojcic, Helfand, and three others: Suzana Radojcic and Mirjana Omickus (Radojcic’s daughters), and Christa Patterson.

2013The appellate court reversed, holding that the crime-fraud exception applied. 2012 IL App (1st) 102698 . ¶2 For the reasons that follow, we affirm the judgment of the appellate court. ¶3 BACKGROUND ¶4 On December 5, 2007, a Cook County grand jury entered a 52-count indictment against Radojcic, Helfand, and three others: Suzana Radojcic and Mirjana Omickus (Radojcic’s daughters), and Christa Patterson.

2013Radojcic argues that this deferential standard applies here because the trial court was required to make factual findings in order to determine whether the crime-fraud exception -7- applies. ¶ 34 Although a trial court’s factual findings are accorded deference on review and will only be reversed if they are against the manifest weight of the evidence, that deference “is grounded in the reality that the circuit court is in a superior position to determine and weigh the credibility of the witnesses, observe the witnesses’ demeanor, and resolve conflicts in their testimony.” People v. Richardson,

2013Radojcic argues that this deferential standard applies here because the trial court was required to make factual findings in order to determine whether the crime- fraud exception applies. ¶ 34 Although a trial court’s factual findings are accorded deference on review and will only be reversed if they are against the manifest weight of the evidence, that deference “is grounded in the reality that the circuit court is in a superior position to determine and weigh the credibility of the witnesses, observe the witnesses’ demeanor, and resolve conflicts in their testimony.” People v. Richardson, 23

2013See, e.g., United States v. BDO Seidman, LLP, 492 F.3d 806, 818 (7th Cir. 2007); In re Feldberg, 862 F.2d 622, 626 (7th Cir. 1988).

2013See, e.g., United States v. BDO Seidman, LLP, 492 F.3d 806, 818 (7th Cir. 2007); In re Feldberg, 862 F.2d 622, 626 (7th Cir. 1988).

2010Colo. 1986) (applying primarily the fiduciary-duty exception but also the crime-fraud exception in holding that officers' communications with attorneys were not protected by the attorney-client privilege); Bailey v. Meister Brau, Inc., 55 F.R.D. 211, 213-14 (N.D.

2010Colo. 1986) (applying primarily the fiduciary-duty exception but also the crime-fraud exception in holding that officers’ communications with attorneys were not protected by the attorney-client privilege); Bailey v. Meister Brau, Inc., 55 F.R.D. 211, 213-14 (N.D.

2024To meet this evidentiary threshold, the proponent of the crime-fraud exception must demonstrate that a “ ‘prudent person’ ” would have a “ ‘reasonable basis to suspect’ ”: (i) “ ‘the perpetration or attempted perpetration of a crime or -10- 1-23-0089 fraud’ ” and (ii) “ ‘that the communications were in furtherance thereof.’ ” Id. at 322 (quoting In re Grand Jury Subpoena Duces Tecum Dated September 15, 1983, 731 F.2d 1032, 1039 (2d Cir. 1984)). “ ‘To satisfy the “in furtherance of” element of the crime-fraud exception, a logical link must exist between the privileged communication and the prop

2021Under these circumstances, Molly has presented sufficient evidence to cause a “ ‘prudent person’ ” “ ‘to suspect the perpetration or attempted perpetration of a *** fraud’ ” by Jesse during the dissolution proceedings “ ‘and that the communications [between Jesse and his counsel] were in furtherance thereof.’ ” See Decker, 153 Ill. 2d at 322 (quoting In re Grand Jury Subpoena Duces Tecum Dated September 15, 1983, 731 F.2d at 1039 ). ¶ 26 Molly has sufficiently alleged that the crime-fraud exception to the attorney-client privilege applies to the e-mail correspondence.

2024(Internal quotation marks omitted.) See Sonrai Systems, 2020 WL 7027567 , at *8; Rambus, Inc. v. Infineon Technologies AG, 220 F.R.D. 264, 280-82 (E.D.

2024Decker, 153 Ill. 2d at 313, 321 ; MDA City Apartments, 2012 IL App (1st) 111047, ¶ 28 (once information determined to fall within scope of attorney-client privilege, burden on party seeking information to show exception applies). ¶ 26 Absent an exception, there is no dispute that MacDonald seeks protected communications. ¶ 27 Prima Facie Showing of Crime-Fraud Exception ¶ 28 The crime-fraud exception, a “major exception to the attorney-client privilege,” pertains when a client seeks the lawyer’s services “in furtherance of criminal or fraudulent activity.” Decker, 153 Ill. 2d at 313 ; Radojcic

2024The court held that although the corporation “did not plead fraud per se,” “an intentional breach of fiduciary duty may serve as the fraud necessary to establish the crime-fraud exception.” Id. at 471 . ¶ 41 But in MDA City Apartments, 2012 IL App (1st) 111047 , plaintiffs failed to connect the conduct to fraud.

2024Thus, the 35 No. 1-23-2009B trial court did not occupy a position superior to the appellate court or this court in evaluating the evidence offered by the State in support of the crime-fraud exception.”); Dowling v. Chicago Options Associates, Inc., 226 Ill. 2d 277, 285 (2007) (factual circumstances surrounding payment of $50,000 to law firm reviewed de novo, as “[n]o written agreement accompanied this payment” and “the circuit court did not conduct an evidentiary hearing, nor did the court make any findings of fact.

2020See, e.g., In re John Doe, Inc., 13 F.3d 633, 635 (2d Cir. 1994) (in camera testimony by attorney regarding discussions with client was appropriate to determine whether the crime-fraud exception to attorney-client privilege applied). ¶ 45 But requiring one of the parties to the joint communication to submit an affidavit detailing the sum and substance of those communications was certainly another option.

2010See Bevill, 805 F.2d at 125 (finding former corporate officers' communications with attorney who represented the bankrupt corporation discoverable on the basis of the dual representation, but also citing a crime-fraud justification, because recognizing the officers' individual attorney-client privilege would be contrary to the public policy in favor of uncovering insider fraud); In re Diasonics Securities Litigation, 110 F.R.D. 570, 575-76 (D.

2010See Bevill, 805 F.2d at 125 (finding former corporate officers' communications with attorney who represented the bankrupt corporation discoverable on the basis of the dual representation, but also citing a crime-fraud justification, because recognizing the officers' individual attorney-client privilege would be contrary to the public policy in favor of uncovering insider fraud); In re Diasonics Securities Litigation, 110 F.R.D. 570, 575-76 (D.