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Emails Are a Legal Minefield for Co-op and Condo Boards

Ron Egatz in Legal/Financial on June 15, 2017

New York City

Email Privacy
June 15, 2017

A recent decision by the state’s highest court drives home a lesson every co-op and condo board member needs to heed: if you use your employer’s computer, tablet, or smart phone to communicate board business, expect zero privacy. While the state Supreme Court had already ruled that employees have no reasonable expectation of privacy in the workplace, the recent Peerenboom v. Marvel case makes it clear that employer workplace email servers transmit discoverable information. Therefore, anyone who uses them forfeits the attorney-client privilege.

“There have been a few cases addressing the fact that – under certain circumstances – if you use your employer’s email for board business, particularly if you’re involved in litigation, you may be waiving attorney-client privilege, because you may not have an expectation of privacy,” says attorney Scott Greenspun, a principal at Braverman Greenspun. “If the employer has a company policy stating emails are not confidential, and are, in fact, company property, then they could be open to discovery.”

In the appeals court case, a defamation suit was brought by Harold Peerenboom against Isaac Perlmutter and his wife, who were both accused of circulating defamatory letters regarding a dispute over the hiring of a tennis instructor in the Florida condo where they lived. As CEO of Marvel Entertainment, Perlmutter was suspected of sending pertinent emails from Marvel servers. Peerenboom issued subpoenas to Marvel for any email between Perlmutter, his wife, and other parties regarding the condo issue. Marvel moved for protective orders, claiming the emails were covered under spousal privilege, attorney-client privilege, and attorney work product privilege. The appeals court ruled in favor of Peerenboom.

“This comes up often,” says attorney Abbey Goldstein, a partner at Goldstein & Greenlaw. “We advise our clients this is a calculated risk. More meetings are done today via email, rather than in person. When you converse by email, you must assume this could be discoverable. All people say silly things in conversation. If you do that in email, it’s likely that it will come out. Boards should be well aware that whether or not the email correspondence is done on a employer's or a private server, it can be discoverable in litigation. The only exception is if it is email between board members and the lawyer on a private server. That’s the moral of this story.”

This latest Appellate Division ruling puts board members and their legal representatives on notice. Other attorneys contacted for this story stress they advise clients to have a full email policy in place to make sure every new board member understands they should be using personal email. Ideally, co-ops and condos should issue email addresses to board members from their own Internet domains. One attorney, who requested anonymity due to involvement in pending litigation, summed the issue up this way: “Why would any board member want to risk losing the protection of the attorney-client privilege by not taking the absolute safest course of action, which is the use of personal email – or better yet, an assigned email from your corporation?”

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