Is a title opinion subject to attorney-client privilege?

With the growth of civil lawsuits in the Marcellus Shale Region regarding oil and gas ownership, oil and gas leases, and other property rights, it is pertinent to understand the protections afforded to title opinions under the applicable attorney-client privileges. Application of the attorney-client privilege requires that confidential communications be made in connection with providing legal services. A title opinion is the written opinion of an attorney, based on a title search into a specific property, describing the current ownership rights in the property (e.g. surface, coal, oil, and gas, etc.), as well as the actions that must be taken to make the stated ownership rights marketable. The curiosity of this issue is high because many state courts, including Pennsylvania, have not specifically addressed it yet.

The state courts that have ruled on the issue have generally held that title opinions are recognized to be privileged communications. This was evidenced in Skaggs v. Conoco, 957 P.2d 526 (N.M.1998) where the Court of Appeals of New Mexico affirmed a trial court’s refusal to grant a plaintiff access to title opinions or title reports that were in possession of the defendant concerning subject acreage and operating agreements or leases. The Court agreed that the title opinions are protected by the attorney-client privilege and that no such privilege had been waived. Other courts have also been reluctant to compel the production of title opinions finding that as long as the opinions have been kept confidential and away from third party disclosure, then the attorney-client privilege has not been waived and remains in full force. (See Texaco, Inc. v. Phoenix Steel Corp., 264 A.2d 523, 525 (Del. Ch. 1970); see also “Use of Another Party’s Title Opinion,” 49 Rocky Mtn. Min. L. Inst. 27 (2003) (“Title opinions should be subject to the attorney-client privilege.”)

What is paramount is that the client maintains the confidential nature of the title opinion, and not allow for the generalized use of its content. A title search, or abstract, is ordinarily not afforded protections from discovery due to its public nature. The title search and title opinion are typically submitted together to the client. Once it’s in the client’s possession, it is important to keep the opinion and search separated, thereby demonstrating intent to maintain confidentiality. This is best summarized by the United States District Court for the District of North Dakota, Southwestern Division, wherein it stated that “[w]hen the broadest approach to the [attorney-client] privilege is applied, there is no reason why title opinions should be treated any differently from other attorney opinions, so long as the title opinions have been kept confidential.” North Dakota v. U.S., 64 F.Supp.3d 1314 (2014).

For questions or concerns about title opinions and the attorney-client privilege, contact the Burns White Energy Group directly. Continue to check back here for updates on this issue.