Spousal privilege applies in civil suit over stolen funds, Superior Court says
The state Superior Court has reversed a Fayette County judge’s ruling that would have forced a husband to provide testimony against his estranged wife in a civil lawsuit.
“The privilege that protects information privately disclosed between husband and wife in the confidence of the marital relationship was once described by the United States Supreme Court as ‘the best solace of human existence,'” wrote the Superior Court panel.
CAP Glass, a glass recycling company in Connellsville, filed suit in Fayette County Court in July 2014 against Lisa and John Cavanaugh and Tammy and Robert Coffman.
According to the suit, Lisa Cavanaugh, a former CAP glass employee, kept a set of office keys after leaving the company and used them after hours to enter the office and issue unauthorized checks on the company’s account.
CAP Glass alleged that in seven years, Lisa Cavanaugh, with the help of Tammy Coffman, wrote 276 checks for a total of $1,579,731 from the company’s account to people and entities affiliated with those two defendants.
John Cavanaugh and Robert Coffman, as the spouses of the two women, are accused of knowing about the alleged fraud and benefitting from it.
In court documents, John Cavanaugh has specifically denied receiving cash or any other funds from the alleged activity. Robert Coffman has similarly denied knowing anything about the alleged scheme nor benefitting from it in court filings.
In her response to the complaint, Lisa Cavanaugh admitted to drawing some, but not all, of the checks CAP Glass accused her of illegally writing. She contends her husband never knew nor benefitted from the alleged activities.
Tammy Coffman indicated in court filings that she has no knowledge of Lisa Cavanaugh writing any authorized checks, and denies participating in a scheme to provide kickbacks to Lisa Cavanaugh.
At a deposition held in October 2014, John Cavanaugh was asked by Damon Thomas, the attorney for CAP Glass, about his wife, who had moved out of the home they shared for over 20 years just seven months prior, including any knowledge he may have had about her alleged activities at CAP Glass.
Lisa Cavanaugh’s attorney, James Lederach, made several objections asserting spousal privilege, meaning John Cavanaugh should not, by law, have to give testimony against his wife.
Judge Linda Cordaro later determined that because the substance of the conversation that was being questioned at the deposition allegedly relates to fraudulent activity, an exception would apply to the spousal privilege rule.
Lederach appealed that ruling to the Superior Court, which looked at each of the questions he objected to, and found that spousal privilege does apply to most of those questions.
One question dealt with a phone conversation between Lisa and John Cavanaugh the day before she moved out, when she was reportedly suffering a “nervous breakdown”, possibly related to being contacted by state police. No criminal charges have been filed against any of the defendants named in the civil suit.
“A private phone conversation between a husband and his emotionally distraught wife presumptively constitutes a confidential marital communication,” the Superior Court found.
Thomas also asked John Cavanaugh at the deposition whether his wife mentioned to him in 2013 that there was theft going on at CAP Glass.
The Superior Court determined that a wife privately disclosing illegal activity at her workplace is confidential communication.
Additionally, the Superior Court found that John Cavanaugh should not have to answer as to whether his wife ever confessed to him.
Regarding a question John Cavanaugh was asked regarding whether Tammy Coffman ever told him any theft had taken place at CAP Glass, the Superior Court determined that Cordaro was correct in prohibiting Lederach from raising spousal privilege.
“We find (Lederach’s) assertion puzzling,” the Superior Court wrote. “(His) brief never elaborates on why it was appropriate to invoke (spousal privilege) to prevent Mr. Cavanaugh from divulging information he received from Tammy Coffman.”
Because the law protects communications from one spouse to another, it does not apply to two people who are not married, the court found.