E. G. Morris, Attorney at Law

Are Statements Made to Insurance Adjusters Privileged

When someone has been involved in an accident from which criminal charges may arise (i.e. DWI, FSRA, Negligent Homicide, Intoxication Manslaughter, etc.) may the state use statements made by the person to the claims adjuster for his insurance company?  Usually there is a strong incentive to talk with the adjuster.  The driver’s insurance policy requires him to cooperate with the investigation of the claim and he certainly wants to take advantage of the coverage.   My research indicates that the question is not clearly resolved in Texas.  In Gass v. Baggerly, 332 S.W.2d 426, 430 (Tex.Civ.App. -- Dallas 1960), the intermediate appellate court decided that such statements are within the attorney-client privilege and upheld the trial court's refusal to order discovery of the statements.  This case was cited with approval (as evidence of the breadth of the Texas attorney-client privilege as it applies to agents of attorney's) by the Texas Court of Criminal Appeals in Burnett v. State, 642 S.W.2d 765, n. 12 (Tex Cr. App. 1982).  In Metroflight, Inc v. Argonaut Ins. Co 403 F.Supp. 1195 (D.C. Tex. 1975) a federal district court applying Texas law stated that it could not clearly determine from its review of the Texas appellate cases what Texas law is on this point.  It made an educated guess, however, and held that communications between an insured and the agent of an insurer for the purpose of preparing for contemplated litigation are privileged.

This is the sum total of the Texas case law on the subject.  However, there is an excellent A.L.R. on the subject.  55 A.L.R. 4th 336 (1987).  In summary, the article states that the majority of the states hold the communications are privileged if the overriding purpose of taking the statement is for them to be passed along to the attorney hired by the insurance company to defend the client.  They may not be privileged if the claims adjuster is an independent contractor working for the insurance company to determine liability or the possible loss rather than to assist in the contemplated litigation.  I suggest that before an attorney allows a client to talk to an adjuster that there be a written understanding that the conversation is in preparation for contemplated litigation and the statement will be passed along to the attorney hired by the insurance company to defend the client.

This issue comes up frequently in my practice. I am surprised that there is so little appellate case law in Texas on the point.

E. G. Morris

www.egmlaw.com

Use of Spyware Programs to Monitor Spouse's Computer Violates Federal Law

Use of “Spyware” Programs to Monitor Spouse’s Computer Use Violates Federal Law

         Lately, there has been a proliferation of “spyware” software, programs that record activity on a computer and make of report of the activity available to someone, sometimes by email.  Some of the programs are advertised by their seller/makers as a way to catch a cheating spouse by monitoring his or her email and chat communications.  A family law practitioner asked me recently about the legality of placing this software on a spouse’s computer or placing it on a computer used jointly by the spouses, in either case without the monitored spouse’s consent.  After examining the applicable federal “wiretap” law I concluded that using the programs for that purpose probably violates 18 U.S.C. Sec. 2511, which prohibits interception and disclosure of wire, oral or electronic communications, unless one party to the communication consents to the monitoring. 

          I said that the activity “probably” violates Sec. 2511 because the matter is not entirely settled.   A 1974 case decided by the United States Court of Appeals, Fifth Circuit, held that Sec. 2511 in an earlier form that didn’t cover electronic communications (e-mails, etc) didn’t apply to spousal wire and oral communications intercepts.  The court basically reasoned that Congress didn’t intend to reach domestic disputes with the law because that is an area it had traditionally left to state regulation.  Simpson v. Simpson, 490 F.2d 803 (5th Cir. 1974).  A small minority of other circuits followed suit.  See, Anonymous v. Anonymous, 558 F.2d 677, 679 (2d Cir.1977).  In the early 1980’s the Fifth Circuit was divided forming the 11th Circuit.  In 2003, the 11th Circuit overruled Simpson concluding that the plain language of Sec. 2511 or its associated statutes does not support such an exception.  Thus, while technically the 5th Circuit has not overruled the Simpson case, its appears to have little support.  I would not recommend acting in reliance on the Simpson case

          Some of the sellers/makers of the software erroneously inform prospective purchasers that they may lawfully place the program on any computer that they “own” and monitor another’s email communications.  There is no such exception in the federal statute.  For a time a few federal courts recognized an exception for a spouse monitoring a spouse’s communications (under a predecessor statute that had not yet been extended to cover emails) but those cases have largely been overruled or otherwise limited.

          A handful of prosecutions have sprung up around the country involving spouses monitoring the communications of other spouses.  If the software continues to be marketed as a means of spying on cheating spouses there will probably be an increase in the number of prosecutions. 

           Federal law (18 U.S.C. Sec. 2512) also makes it crime to advertise of sell a device “knowing or having reason to know that the design of such device renders it primarily useful for the purpose of the surreptitious interception of wire, oral, or electronic communications.”  By advertising spyware as a means of snooping on a spouse, especially where the software includes a way to remotely deploy the program on a computer, these venders may be exposing themselves to liability.

E. G. Morris
www.egmlaw.com