## Facts

- George and Hattie Caldwell were injured in a 1974 automobile collision involving a Hertz-owned rental car rented by Bruno Weinschel and driven by Werner Baumgart.
- The Caldwells sued Baumgart and Hertz for negligence; Hertz retained attorney Ronald Hill to represent Hertz and Baumgart, and Hertz was later dismissed without prejudice.
- The Caldwells later added Weinschel, alleging vicarious liability based on agency and joint enterprise; the trial court granted summary judgment for Weinschel.
- The Caldwells obtained a judgment against Baumgart and pursued post-judgment garnishment against Hertz, asserting Hertz insured Baumgart; Hertz denied indebtedness.
- Based on information obtained during garnishment discovery, the Caldwells filed a new civil action alleging Hertz, Weinschel, and Hill fraudulently concealed and misrepresented information in the earlier litigation to secure summary judgment for Weinschel and avoid payment by Hertz.
- In the fraud/conspiracy action, the Caldwells sought production of correspondence, memoranda, and claims-file materials held by Hertz, Weinschel, and Hill.
- The defendants objected on attorney–client privilege and work-product grounds, and the district court summarily denied the motion to compel without in camera inspection or document-specific findings.
- The Caldwells petitioned the Colorado Supreme Court for extraordinary relief under C.A.R. 21.

## Issues

1. Whether the district court abused its discretion by summarily denying a motion to compel discovery based on attorney–client privilege and work-product claims where the complaint alleged fraud and conspiracy connected to prior litigation.
2. What procedures a trial court must use to evaluate privilege and work-product objections when the requesting party asserts that materials may fall within an exception based on fraud.

## Decision

- The Colorado Supreme Court made the rule absolute and held the district court erred by summarily denying the requested discovery.
- The court directed the district court to reconsider the discovery request using proper procedures rather than a blanket denial.
- The court indicated the trial court should employ in camera inspection where appropriate and issue specific rulings addressing particular documents or categories.

## Legal Principles

- Attorney–client privilege is important but not absolute; communications used to further fraud may fall outside the privilege under a fraud-based exception.
- Work product under C.R.C.P. 26(b)(3) is qualified; upon a showing of substantial need and inability to obtain equivalent materials without undue hardship, certain materials may be discoverable, subject to strong protection for attorney mental impressions and legal theories.
- When fraud in earlier litigation is alleged, a court may not accept privilege and work-product assertions as dispositive without a meaningful, case-specific review.
- Proper resolution of such disputes generally requires document-by-document analysis, in camera inspection when warranted, segregation of protected from nonprotected material, and reasoned, reviewable findings.

## Conclusion

The Colorado Supreme Court required the district court to conduct a structured, document-specific evaluation—often including in camera review—before denying discovery on privilege and work-product grounds in a civil action alleging that prior litigation was affected by fraudulent concealment and misrepresentation.


Caldwell v. District Court in & for City & County of Denver, 644 P.2d 26 (Colo. 1982)