Checks and Wire Transfers to Counsel are not Privileged: Discovery Reveals Clients’ Accounts.

In the case of Garza v. ACL the judgment creditors sought to obtain a corporate debtor's financial records through a subpoena targeted at the debtor's attorneys.  In answering the question of  "Are canceled checks  protected by attorney client privilege?" the court, Hon. John K. Stewart, Judge Presiding, answered with a resounding No.

“THE COURT: I think the difference is that a check or a money transfer, these have lives of their own. They are not communications. They are instruments of commerce. They are negotiable instruments. A letter accompanying a check would be a communication, but a check is really a communication to a bank. It’s telling the bank to pay a certain amount of money on behalf of a client. So I think the Harris analysis, to me, is the most appropriate and on point. And that’s the Ninth Circuit Court of California — Ninth Circuit Court in California. It’s 413 F.2d 316. But they say, and they are quoting another case, but they say “The canceled checks and bank statements are not within the attorney-client privilege. These items were negotiable instruments in commerce and were never confidential from the time of their creation.Their transfer from the client to the attorney did not constitute a confidential communication.”In those cases, they were trying to subpoena those records from a bank.And again, if those documents ultimately end up in a bank, and they do, when the check comes into your firm, you endorse it, and it goes back to the bank. The original sometimes is referred to the person who signed the check. Now, for example, my own bank account, I get little microfiche reprints and the originals are either in my bank or else they are kept on microfiche somewhere. But they are ultimately in the bank.”

(See attached transcript, Pg. 13)

Read the full transcript here.

Comments are closed.

%d bloggers like this: