Bohan v. McDonald Hopkins, L.L.C.

2021 Ohio 4131

• Court: Ohio Court of Appeals
• Decided: November 18, 2021
• Docket: 110060
• Status: Published

Opinion

[Cite as Bohan v. McDonald Hopkins, L.L.C., 2021-Ohio-4131.]

COURT OF APPEALS OF OHIO

EIGHTH APPELLATE DISTRICT COUNTY OF CUYAHOGA

THOMAS BOHAN, ET AL., :

Plaintiffs-Appellants, : No. 110060 v. :

MCDONALD HOPKINS, L.L.C., ET AL., :

Defendants-Appellees. :

JOURNAL ENTRY AND OPINION

JUDGMENT: AFFIRMED RELEASED AND JOURNALIZED: November 18, 2021

Civil Appeal from the Cuyahoga County Court of Common Pleas Case No. CV-20-929479

Appearances:

Robenalt Law Firm, Inc., Thomas D. Robenalt, and John P. Colan, for appellants.

McCarthy, Lebit, Crystal & Liffman Co., L.P.A., David A. Schaefer, and Nicholas R. Oleski, for appellees.

EILEEN T. GALLAGHER, J.:

Plaintiffs-appellants, Thomas Bohan (“Bohan”) and HB Alchemy,

L.L.C. (“Alchemy”)(collectively “plaintiffs”), appeal an order granting summary

judgment in favor of defendants-appellees, Attorney Frank Wardega (“Wardega”)

and his law firm, McDonald Hopkins, L.L.C. (“McDonald Hopkins”)(collectively “defendants”), on their legal malpractice claims. Plaintiffs claim the following

errors:

1. The trial court erred in its determination that plaintiffs-appellants failed to establish an attorney-client relationship with defendants- appellees.

2. The trial court erred in its determination that plaintiff-appellants failed to demonstrate that defendants-appellees breached any duties owed to plaintiffs-appellants.

3. The trial court erred in its determination that plaintiffs-appellants failed to establish that any breach of the standard of care by defendants-appellees proximately caused plaintiffs-appellants’ damages.

4. The trial court erred when it failed to consider the derivative claims of HB Alchemy, L.L.C.

5. The trial court erred when it granted summary judgment to defendants-appellees.

After careful review of the record and applicable law, we affirm the trial

court’s judgment.

I. Facts and Procedural History

Bohan is an experienced businessman, who has conducted business in

China for several years. As a result of his experience, Bohan acquired knowledge of

international logistics and supply-chain management. In late 2015 or early 2016,

Jeffrey Rand (“Rand”) told Bohan that he was having problems obtaining products

for his company, HB Chemical, from suppliers in China. Bohan indicated that he

could solve Rand’s problem, save his company money, and generate profits for a new

company if he could establish a new purchasing platform in China. Bohan and Rand ultimately decided to set up a company for this purpose and called it HB Alchemy

(“Alchemy”).

Rand introduced Bohan to Wardega, who was then a partner at the law

firm of Kohrman, Jackson, & Krantz, L.L.P. Wardega had represented Rand and

HB Chemical for approximately ten years, and Wardega drafted an operating

agreement for Alchemy. When Bohan first met Wardega, Wardega disclosed to him

that he had a longstanding relationship representing Rand and HB Chemical.

(Wardega depo. at 79-80.)

Bohan and Rand were established as co-managers of Alchemy when it

was formed in 2016. Bohan and Rand each owned 44% of Alchemy’s membership

interests, and an employee of HB Chemical owned the remaining 12%. Bohan made

suggestions during the process of drafting the operating agreement, and Wardega

incorporated his suggestions into the final document. In an email dated March 21,

2016, from Wardega to Bohan, Wardega explained:

Now that we have gone through all of the discussion on the operating agreement, I will have no problem whatsoever in representing HB Alchemy going forward. I am glad you asked the questions you did because now we have as much clarity as possible and my job will be very straightforward as to future matters ─ if I am representing the company on say an agreement with a vendor or customer it will be very straightforward ─ I am representing the interests of the company and trying to get the best deal for the company.

(Defendants’ ex. C.)1

1 The parties filed a joint supplementation of the record consisting of several exhibits. Plaintiffs’ exhibits are identified by numbers, and defendants’ exhibits are identified by letters. In 2017, Wardega left Kohrman, Jackson, & Krantz and joined

McDonald Hopkins. Rand, HB Chemical, and Alchemy followed Wardega to

McDonald Hopkins. After Wardega joined McDonald Hopkins, Bohan sent

Wardega an email with instructions on what McDonald Hopkins needed to provide

in order to be paid by Alchemy for legal services provided by Wardega. Bohan’s

email states:

Hi Frank,

We need to set up a dedicated account for HB Alchemy at your fir [sic]. Also please be advised that electronic invoices are perfect, they do need to include detail on the invoices ─ time only is not acceptable. Please email invoices to [email address].

Please confirm when the account and bill to instructions are set up and if invoices will all come from [email address]. We have an automated handling process for invoices and need to confirm the origin email address to ensure proper routing of invoices. We will process the attached invoice manually.

Thank you

Best Regards

Tom

(Defendants’ ex. D.)

In October 2017, Wardega prepared a share redemption agreement that

benefitted the majority members of Alchemy, namely Rand and Bohan. (Wardega

depo. at 150.) Wardega continued to perform services for Alchemy sporadically

until August 2018, when Wardega drafted a letter, at Bohan’s request, to the internet

provider GoDaddy, attesting to the fact that Alchemy was formed in Ohio and was an active company. (Wardega depo. at 10.)2 Wardega did not perform any more

work for Alchemy after August 2018, except for a few emails regarding the potential

sale of HB Chemical and Alchemy to Ravago Holdings America, Inc. (“Ravago”).

(Wardega depo. at 10.)

In March 2018, unbeknownst to Bohan, Rand engaged Western

Reserve Partners L.L.C. (“WRP”) to begin marketing the sale of HB Chemical to

potential buyers. (Mayer depo. at 8.) Wardega was not involved in deciding to

whom HB Chemical would be marketed or sold. (Mayer depo. at 10.) Kevin Mayer,

an investment banker at WRP, who signed the engagement letter with HB Chemical

and handled its marketing, testified at deposition that WRP

agreed to market the business to a variety of interested parties, be they strategic parties, meaning other chemical distributors, or financial parties, meaning investment groups, private equity firms. We agreed that we would run an auction process, we prepared marketing materials, we contacted the buyers, we set up meetings with interested parties, and we created a market for the sale of the business.

(Mayer depo. at 9.)

WRP prepared a Confidential Information Memorandum (“CIM”), a

marketing document describing HB Chemical’s business, to be shared with

prospective buyers. (Mayer depo. at 11.) Wardega made edits and comments to the

CIM. (Wardega depo. at 27.) At this point in time, Bohan still had no knowledge of

the possible sale of HB Chemical. Notably, the CIM did not market the sale of

Alchemy; it merely mentioned it as an affiliate of HB Chemical. (Mayer depo. at 13.)

2 Wardega testified that he wrote the attestation letter in “early August.” The attestation letter itself is dated July 27, 2018. In July 2018, Ravago expressed an interest in purchasing HB

Chemical for between $75-80 million. (Mayer depo. at 81.) One month later, in

August 2018, Rand informed Bohan that there were companies interested in

purchasing HB Chemical, that they might be interested in also purchasing Alchemy,

and that the potential buyers wanted to see Alchemy’s financials. (Bohan depo. at

78.) Thereafter, Bohan, Rand, and Alchemy’s chief financial officer, Mike Kostelec

(“Kostelec”), met to review the financials. (Bohan depo. at 81.) Thereafter, Kostelec

emailed Bohan the “summarized numbers of Alchemy,” which were eventually

disclosed to Ravago pursuant to a confidentiality agreement. (Bohan depo. at 84-

85.) With respect to the confidentiality agreement, Wardega advised Bohan in an

email dated August 23, 2018, that the definition of the term “Company” in the

agreement was broad enough to cover and protect Alchemy’s financial information.

(Plaintiffs’ ex. 8.)

Bohan cooperated with the sales process, but he was concerned that

Alchemy’s value was not being adequately promoted. In an email to Rand and

Wardega dated September 5, 2018, Bohan made “a point to highlight the ways in

which Alchemy and its shareholders may be impacted by the sale of HB Chemical

and how the inclusion of Alchemy in the sale may benefit the buyer, HB Chemical

and Alchemy.” (Defendants’ ex. G; Plaintiffs’ ex. 9.) Two days later, Ravago sent the

first of two letters of interest to WRP expressing its interest in purchasing HB

Chemical, Alchemy, and HB Mexico, another company affiliated with HB Chemical, for a total of $92 million. This first letter of interest, dated September 7, 2018, did

not allocate values for each of the entities comprising the $92 million offer.

On September 11, 2018, Wardega sent an email to Bohan advising that

because he and Rand have co-management rights in Alchemy, “any sale or other

transaction concerning Alchemy would have to be acceptable to both of you.”

(Defendants’ ex. H.) Wardega also advised Bohan that there was at least one bidder

interested in purchasing Alchemy and that Bohan should engage separate counsel.

(Defendants’ ex. H; Bohan depo. at 97-98.) Three days later, on September 14, 2018,

Wardega received correspondence from Attorney Frances Goins of the law firm of

Ulmer & Berne, advising him that the law firms of Ulmer & Berne and Cowden &

Humphery were representing Bohan “in connection with his ownership interest and

rights in HB Alchemy * * *.” (Defendants’ ex. A.)

Meanwhile, WRP and Ravago were endeavoring to allocate values for

HB Chemical, HB Mexico, and Alchemy for purposes of determining the purchase

prices of each company. In an email to Mayer, Wardega suggested that “[p]erhaps

research on market will support * * * a 2.5 multiple” could be used to value Alchemy,

but concluded that we “[s]imply don’t know at this point.” (Wardega depo. at 41-

42.) Wardega explained at deposition that he was merely suggesting a multiple, if

the multiple were supported by research. (Wardega depo. at 42.) He also testified

that valuation “is not the lawyer’s role in a transaction of this nature.” (Wardega

depo. at 44.) Rather, “[a]ll of the maximizing, the value, the negotiations, the direct

contact with the suitor or potential suitors is done through the investment banker. I was not involved in it whatsoever.” (Wardega depo. at 44.) Wardega explained

that nobody knew what Alchemy was worth because it was a “captive supplier” with

a “single customer.” (Wardega depo. at 45.) Mayer similarly stated at deposition

that finding a multiple for valuing a captive supplier is “very difficult to obtain, if not

impossible.” (Mayer depo. at 26-27.) In the end, all the valuations were handled by

Ravago and the investment bankers. (Wardega depo. at 45; Sapp depo. at 11, 21.)

Steve Sapp (“Sapp”), director of corporate finance for Ravago, was

assigned the task of assigning a value to Alchemy. (Sapp depo. at 10.) While he was

performing his valuations, he never spoke to Wardega or any other lawyer employed

by McDonald Hopkins. (Sapp depo. at 11.) He averred that no one at McDonald

Hopkins influenced the valuation he assigned to Alchemy. (Sapp depo. at 21.)

Wardega later sent an email to Alchemy’s co-managers, Bohan and

Rand, with Ravago’s estimated valuation. In the email, dated September 13, 2018,

Wardega advised Bohan and Rand that the letter of intent was only binding on HB

Chemical and Ravago because Alchemy was not a party to it. (Defendants’ ex. K.)

Thus, Alchemy had no rights or obligations under the letter of intent. The email

further stated that “if you are willing to entertain a sale of HB Alchemy[,] then

Ravago (or its counsel more likely) will directly reach out to your counsel.”

(Defendants’ ex. K.) By that time, the law firms of Ulmer & Berne and Cowden &

Humphery were representing Bohan “in connection with his ownership interest and

rights in HB Alchemy * * *.” (Defendants’ ex. A; Bohan depo. at 119-120; Humphrey

depo. at 8.) Attorney Robert Humphrey (“Humphrey”) of Cowden & Humphrey represented Bohan from at least September 14, 2018, until the sale of Alchemy

closed five months later in February 2019. (Bohan depo. at 109, 116.)

As previously stated, Ravago offered a total of $92 million for the

purchase of HB Chemical, HB Mexico, and Alchemy. Of the total price, $80 million

was allocated to HB Chemical, $5 million was allocated to HB Mexico, and $7

million was allocated to Alchemy. (Mayer depo. at 28.) Bohan ultimately agreed to

the sale of Alchemy for $7 million. However, Bohan met with Mayer in a one-on-

one meeting in November 2018 to express his concern that Alchemy was

undervalued. (Bohan depo. at 141.) Yet, according to Mayer, no one ever asked WRP

to do a valuation for Alchemy before the deal closed February 2019. (Mayer depo.

at 90-91.) And Bohan admitted at deposition that he never submitted a proposal for

what he believed Alchemy was worth. (Bohan depo. at 161-162.)

Following the sale of Alchemy, Bohan, personally and on behalf of

Alchemy filed a complaint against Wardega and McDonald Hopkins alleging legal

malpractice. The complaint, which was amended twice, asserted claims for legal

malpractice, breach of fiduciary duty, and punitive damages. Plaintiffs alleged the

defendants caused Alchemy to be sold for less than it was worth.

Following discovery, defendants filed a motion for summary

judgment, arguing that plaintiffs’ claims for breach of fiduciary duty and punitive

damages, which were premised on the manner in which defendants represented

plaintiffs, were subsumed within the legal malpractice claim. Defendants argued

that plaintiffs’ legal malpractice claim had to fail because there never was an attorney-client relationship between defendants and Bohan, and the defendants’

relationship with Alchemy terminated before the due diligence process for the sale

of Alchemy began. Defendants maintained they did not represent Alchemy during

the sales process and, therefore, could not be held liable for any undervaluation of

it. The trial court agreed, found there was no attorney-client relationship between

plaintiffs and defendants during the relevant time period, and granted the

defendants’ motion for summary judgment. Bohan now appeals the trial court’s

judgment.

II. Law and Analysis

A. Standard of Review

Appellate review of summary judgments is de novo. Grafton v. Ohio

Edison Co., 77 Ohio St.3d 102, 105, 671 N.E.2d 241 (1996). Pursuant to Civ.R. 56(C),

summary judgment is appropriate when (1) there is no genuine issue of material

fact; (2) the moving party is entitled to judgment as a matter of law; and (3)

reasonable minds can come to but one conclusion and that conclusion is adverse to

the nonmoving party, said party being entitled to have the evidence construed most

strongly in his or her favor. Horton v. Harwick Chem. Corp., 73 Ohio St.3d 679,

653 N.E.2d 1196 (1995), paragraph three of the syllabus; Zivich v. Mentor Soccer

Club, 82 Ohio St.3d 367, 696 N.E.2d 201 (1998).

To prevail on a legal malpractice claim, the plaintiff must establish “(1)

an attorney-client relationship, (2) professional duty arising from that relationship,

(3) breach of that duty, (4) proximate cause, (5) and damages.” Shoemaker v. Gindlesberger, 118 Ohio St.3d 226, 2008-Ohio-2012, 887 N.E.2d 1167, ¶ 8, citing

Vahila v. Hall, 77 Ohio St.3d 421, 427, 674 N.E.2d 1164 (1997); Krahn v. Kinney, 43

Ohio St.3d 103, 105, 538 N.E.2d 1058 (1989). Because the elements of a legal

malpractice claim are stated in the conjunctive, the failure to establish any one

element of the claim is fatal. Estate of Hards v. Walton, 8th Dist. Cuyahoga No.

93185, 2010-Ohio-3596, ¶ 7; Williams-Roseman v. Owen, 10th Dist. Franklin No.

99AP-871, 2000 Ohio App. LEXIS 4254 (Sept. 21, 2000).

B. Attorney-Client Relationship

In the first assignment of error, plaintiffs argue the trial court erred in

concluding that plaintiffs did not have an attorney-client relationship with the

defendants relative to the sale of Alchemy.

A plaintiff cannot maintain a cause of action for malpractice against

an attorney in the absence of an attorney-client relationship. New Destiny

Treatment Ctr., Inc. v. Wheeler, 129 Ohio St.3d 39, 2011-Ohio-2266, 950 N.E.2d

157, ¶ 32. Therefore, the first step of our analysis requires us to determine whether

there was an attorney-client relationship between each of the plaintiffs and

defendants.

An attorney-client relationship can be created by either the express or

implied conduct of the parties. Id. at ¶ 26. Where the parties have an express

agreement of representation, the attorney-client relationship is easily identified. It

is more complicated when the relationship is established by implication. In those

cases, the test for determining the existence of an attorney-client relationship involves both a subjective and objective test. Stuffleben v. Cowden, 8th Dist.

Cuyahoga No. 82537, 2003-Ohio-6334, ¶ 22. A court must consider (1) whether the

putative client believed there was an attorney-client relationship, and (2) whether

the putative client’s belief was reasonable “based on the surrounding

circumstances.” Id. at ¶ 21-22, citing Lillback v. Metro. Life Ins. Co., 94 Ohio App.3d

100, 109, 640 N.E.2d 250 (2d Dist. 1994.). The client’s belief, by itself, it not

sufficient to establish an attorney-client relationship. Id. at ¶ 23 (trial court erred in

finding the existence of an attorney-client relationship based solely on the client’s

belief without considering whether the belief was reasonable.).

In determining whether a client’s belief was reasonable under the

circumstances, the Sixth Circuit Court of Appeals, applying Ohio law, has held that

several factors should be considered, including

whether (1) the client shared confidential information with the attorney, (2) the attorney offered legal advice or services, (3) the client relied on the advice, (4) the client sought to form an attorney-client relationship, (5) the attorney appeared on behalf of the client in judicial or administrative proceedings, and (6) the attorney prepared legal instruments.

Hustler Cincinnati, Inc. v. Cambria, 625 Fed. Appx. 712, 716 (Aug.14, 2015), citing

Sayyah v. Cutrell, 143 Ohio App.3d 102, 757 N.E.2d 779 (12th Dist.2001); Landis

v. Hunt, 80 Ohio App.3d 662, 610 N.E.2d 554 (10th Dist.1992); David v.

Schwarzwald, Robiner, Wolf & Rock Co., 79 Ohio App.3d 786, 607 N.E.2d 1173

(8th Dist.1992). The attorney-client relationship with respect to each plaintiff must be

analyzed separately because while there is evidence of an express attorney-client

relationship between the defendants and Alchemy, there is no evidence of an express

attorney-client relationship between the defendants and Bohan. Bohan never

executed a written fee-agreement with defendants in a personal capacity. Indeed,

Bohan alleged that the defendants never “ask[ed] that an engagement letter be

executed for the service they provided.” (Second amended complaint ¶ 14.) “‘[A]

statement of fact by a party in his pleading is an admission that the fact exists as

stated, and, as such, is admissible against him in favor of his adversary.’” Haney v.

Law, 1st Dist. Hamilton No. C-070313, 2008-Ohio-1843, ¶ 8, quoting Teagle v. Lint,

9th Dist. Summit No. 18425, 1998 Ohio App. LEXIS 1560 (Apr. 15, 1998). Thus, by

admission, there never was an express contractual agreement between Bohan and

the defendants.

Nor does the evidence support a finding that an attorney-client

relationship arose between Bohan and the defendants by implication. Although

there is evidence that defendants represented Alchemy, “Ohio law has consistently

held that ‘an attorney’s representation of a corporation does not make that attorney

counsel to the corporate officers and directors as individuals.’” Maloof v. Benesch,

Friedlander, Coplan & Aronoff, 8th Dist. Cuyahoga No. 84006, 2004-Ohio-6285,

¶ 17, quoting Nilavar v. Mercy Health Sys. W. Ohio, 143 F.Supp.2d 909, 913

(S.D.Ohio 2001). See also Fornshell v. Roetzel & Andress, L.P.A., 8th Dist.

Cuyahoga Nos. 92132 and 92161, 2009-Ohio-2728 (applying the same rule to members of limited liability companies.); Prof.Cond.R. 1.13(a) (“a lawyer employed

or retained by an organization owes allegiance to the organization and not to any

constituent or other person connected with the organization.”). Thus, Wardega’s

communications with Bohan concerning Alchemy do not establish an attorney-

client relationship between the defendants and Bohan, individually.

Bohan also never shared any personal, confidential information with

Wardega. As previously stated, Rand introduced Bohan to Wardega, who drafted

the operating agreement for Alchemy. Thereafter, the majority of the

communication between Bohan and Wardega, whether on the phone, in person, or

by email, included Rand, the co-manager of Alchemy. (Bohan depo. at 66-67.)

Bohan nevertheless argues that Wardega’s August 23, 2018 email to him regarding

the scope of the confidentiality agreement proves there was an attorney-client

relationship between him and the defendants. However, Rand was included in the

email, and Wardega’s advice regarding the confidentiality agreement applied to

Alchemy, not Bohan. All of the communications cited by Bohan in support of an

attorney-client relationship related to Alchemy, and there is no evidence of any

confidential communication between Wardega and Bohan relating to Bohan

personally.

Finally, all of Wardega’s bills were submitted to Alchemy for payment,

not Bohan. After the operating agreement for Alchemy was signed, Wardega sent

an email to Bohan and Rand, stating that he, Wardega, “will have no problem

whatsoever in representing HB Alchemy going forward.” (Defendants’ ex. C.) After Wardega joined McDonald Hopkins, Bohan sent him an email with instructions on

what he needed to provide in order to be paid by Alchemy. The email expressly

states, in relevant part: “We need to set up a dedicated account for HB Alchemy at

your fir[m].” (Defendants’ ex. D, emphasis added.) There is no evidence that

Wardega ever billed Bohan, individually, for any services rendered on his behalf, nor

is there any evidence that Bohan requested a billing account be set up for him

personally. In Hustler Cincinnati, the court held that the absence of invoices

between a purported client and an attorney tended to show the absence of an

attorney-client relationship. Hustler Cincinnati, 625 F.Appx. at 717. See also

McGuire v. Draper, Hollengaugh & Briscoe Co., L.P.A., 4th Dist. Highland No.

01CA21, 2002-Ohio-6170, ¶ 53 (same). Therefore, the undisputed evidence

demonstrates that Bohan, individually, never had an attorney-client relationship

with the defendants, and the trial court properly granted summary judgment on

Bohan’s personal claims against the defendants.

The relationship between Alchemy and the defendants is more

complicated. Wardega drafted the operating agreement for Alchemy, drafted a

share redemption agreement that increased Bohan’s individual ownership in

Alchemy, and sent an attestation letter to GoDaddy, verifying that Alchemy was

formed in Ohio and was an active company. In the attestation letter, dated July 27,

2018, Wardega represented that he and McDonald Hopkins were “counsel for the

company.” (Plaintiff’s ex. 18.) And, as previously stated, Wardega sent legal bills to

Alchemy for payment. There is no question that the defendants represented Alchemy. Defendants contend, however, that the attorney-client relationship

between them and Alchemy terminated before the sales process with respect to

Alchemy began, that defendants were not involved in the valuation or marketing of

Alchemy and that, therefore, they cannot be liable for any undervaluation of

Alchemy.

Defendants never sent a letter stating that they no longer represented

Alchemy. Nevertheless, an attorney-client relationship does not continue

indefinitely simply because it was not terminated in writing. “[U]nder Ohio law, as

under the law of most States, the attorney-client relationship ends when the lawyer

completes the task for which he was hired[.]” Hustler Cincinnati, 625 Fed.Appx. at

15, citing Kouba v. Climaco, 8th Dist. Cuyahoga No. 38585, 1979 Ohio App. LEXIS

9643 (Mar. 15, 1979).

Wardega was retained to draft Alchemy’s operating agreement and

performed tasks for the company on an ad hoc basis. Plaintiffs contend Wardega

committed malpractice with respect to the sale of Alchemy because he continued to

represent Alchemy during the negotiations. In support of that argument, plaintiffs

cite to the fact that Wardega edited a CIM in the summer of 2018, which eventually

led to the sale of Alchemy. However, the undisputed evidence shows that the CIM

did not market the sale of Alchemy; it marketed the sale of HB Chemical.

(Defendants’ ex. E.) Indeed, Alchemy was only mentioned once in the 34-page

document and was identified as an affiliated entity of HB Chemical. When asked at deposition whether Alchemy was intended to be sold together with HB Chemical,

Mayer explained:

It was not contemplated that all of this was going to be sold together. And in the marketing materials, we had outlined what was to be included in the transaction and then what the other related entities were, and really left it to the buyer to decided what the potential interest was in those entities.

* * *

This slide [page 16 of the CIM] attempted to delineate the different entities related to HB Chemical. And, specifically, we put a box around, on the left-hand side, HB Chemical Corporation and Polymer Southeast and said “included in the transaction.” * * *

(Mayer depo. at 48-49.) Because Alchemy was not “included in the transaction,”

there was no sales information related to Alchemy in the CIM. (Mayer depo. at 13.)

Thus, even though Wardega edited the CIM, those edits had nothing to do with

Alchemy. And although Wardega participated in the sales process of HB Chemical,

which later resulted in the sale of Alchemy, there is no evidence that he represented

Alchemy once Ravago became interested in buying Alchemy in the middle of

September 2018.

In July 2018, Ravago expressed an interest in buying HB Chemical for

$75 to $80 million. (Mayer depo. at 81.) No one communicated this offer to Bohan

because he was not an owner of HB Chemical and, therefore, was not entitled to that

information. (Mayer depo. at 82.) However, after additional marketing, Ravago

became interested in possibly purchasing the entities affiliated with HB Chemical,

including Alchemy. (Mayer depo. at 81.) On August 23, 2018, Ravago requested Alchemy’s financial records in

order to explore whether it was worth purchasing along with HB Chemical.

(Wardega depo. at 133-134.) Bohan was aware of the potential interest and fully

cooperated in providing the financials. He met with Rand and Kostelec to review

the financials and agreed to disclose them to Ravago pursuant to a confidentiality

agreement. (Bohan depo. at 83-85.) Thereafter, on September 7, 2018, Ravago sent

the first of two letters of intent expressing its desire to purchase HB Chemical, HB

Mexico, and Alchemy for a total of $92 million. The first letter of intent did not

allocate separate values for each of the three entities: HB Chemical, HB Mexico, and

Wardega testified at deposition that once the first letter of intent was

received on September 7, 2018, it became clear that Bohan’s interests and Rand’s

interests “would not necessarily be the same interests” and that there was a

“potential conflict of interests.” (Wardega depo. at 78.) Consequently, Wardega

sent Bohan an email on September 11, 2018, instructing him to “engage separate

counsel.” (Plaintiffs’ ex. 12; Wardega depo. at 79.) Thereafter, Wardega held himself

out to Ravago and others as Rand’s counsel as to Alchemy. (Wardega depo. at 180.)

In the meantime, Bohan had already contacted Humphrey to engage

his representation on August 23, 2018, and Bohan discussed the matter with

Humphrey in early September. (Bohan depo. at 100.) As previously stated,

Wardega was notified on September 14, 2018, that the law firms of Ulmer & Berne

and Cowden & Humphrey were representing Bohan “in connection with his ownership interest and rights in HB Alchemy.” (Defendants’ ex. A; Bohan depo. at

134.) Wardega testified at deposition that after he advised Bohan to engage separate

counsel on September 11, 2018, Alchemy, itself, was no longer represented by

counsel. Thereafter, Wardega represented Rand’s interests in Alchemy, and the law

firms of Ulmer & Berne and Cowden & Humphrey represented Bohan’s interests in

Alchemy. (Wardega depo. at 13, 121, 182.) The fact that defendants no longer

represented Alchemy as of September 11, 2018, and that Bohan and Rand’s interests

in Alchemy were represented by separate counsel is well documented in the record.

Plaintiffs nevertheless assert that Wardega continued to provide legal

advice to Bohan when Wardega forwarded the second letter of intent to Bohan in an

email dated September 13, 2018. However, the email indicates that Wardega sent it

to Bohan at Rand’s request. (Plaintiffs’ ex. 15; Wardega depo. at 146.) The first

paragraph of the email begins: “Jeff asked me to forward the attached exhibit to

you.” (Plaintiffs’ ex. 15.) Twice in the email, Wardega states that he was providing

the information to Bohan, not as his attorney nor as Alchemy’s attorney, but “as a

courtesy.” (Plaintiffs’ ex. 15.) Moreover, the email concludes by stating: “Please

advise once you have selected counsel.” (Plaintiffs’ ex. 15; Wardega depo. at 146.)

The second letter of intent, dated September 14, 2018, had exhibits

relating to each of the entities included in the offer. As relevant here, “Exhibit B”

expresses Ravago’s interest in purchasing Alchemy and states that “[t]he draft definitive agreement for [Alchemy]3 would be simultaneously submitted by Buyer’s

counsel to Jeff Rand’s and Tom Bohan’s respective designated counsels.” (Plaintiffs’

ex. 16.) Thus, by September 14, 2018, it was clear to third parties such as Ravago

that Alchemy’s interests were separately represented by counsel for Bohan and

counsel for Rand. Exhibit B makes no mention of counsel for Alchemy itself.

Wardega testified that Bohan and Rand signed an engagement letter

with WRP to market and sell Alchemy in October 2018. The engagement letter

allowed WRP to market and sell Alchemy and thus officially initiated the sales

process with respect to Alchemy. More importantly, Bohan and Rand signed the

engagement letter after Wardega had already stopped representing Alchemy.

(Wardega depo. at 23-24.) Plaintiffs have not presented any evidence to refute this

evidence.

In an email dated October 3, 2018, Wardega advised Humphrey that

he and Rand were “open” to the idea of hiring an independent third party to do an

evaluation appraisal of Alchemy if Bohan believed the $7 million offer was

inadequate. (Bohan depo. at 165, 170.) Wardega further stated at deposition that

Bohan had “the opportunity to interface directly with Ravago and counsel. And they

went on and willingly signed authorizing resolutions, purchase agreement, et cetera,

and closed the deal * * * .” (Wardega depo. at 110.)

3Exhibit B of the September 14, 2018 letter of intent refers to Alchemy as HB China. Wardega explained that the term “HB China” is “the definitional term they use for HB Alchemy.” (Wardega depo. at 53-54.) Although the second letter of intent offered “up to $7 million” for

Alchemy, Mayer explained that deals sometimes close for different values than those

proposed in the letter of intent. (Mayer depo. at 33.) The final price is generally

determined after completing a period of due diligence. (Mayer depo. at 33-35.)

Mayer spoke with Humphrey at least a few times during Alchemy’s due diligence

period. (Mayer depo. at 36.) An email from Sapp to Mayer on January 18, 2019,

indicates that Ravago was still reviewing Alchemy’s financials and was “still

processing any other potential change to that purchase price for HB Alchemy.”

(Mayer depo. at 40) Yet, there is no evidence that a third-party valuation was ever

conducted before the sale closed in late February 2019, even though Ravago was still

assessing its value in January 2019. (Bohan depo. at 165.)

Ravago ultimately purchased Alchemy for $7 million when the deal

closed on February 28, 2019, more than four months after Wardega stopped

representing Alchemy and Bohan’s interests in Alchemy were represented by

attorneys at Ulmer & Berne and Cowden & Humphrey. The record is clear that

Wardega did not represent Bohan or Alchemy with respect to the sale of Alchemy,

the process of which began in mid-September 2018. Bohan was represented by

separate counsel during the sales process and ultimately agreed to the sale of

Alchemy “of [his] own freewill.” (Bohan depo. at 179.)

Indeed, Bohan admitted that he retained Humphrey to represent him

in the sale of Alchemy. (Bohan depo. at 116, 118.) Moreover, Wardega never billed

Alchemy for any work relating to the sale of Alchemy. (Wardega depo. at 15, 102.) Thus, because defendants did not have an attorney-client relationship during the

marketing and sale of Alchemy, they cannot be liable for legal malpractice with

respect to that transaction. New Destiny, 129 Ohio St.3d 39, 2011-Ohio-2266, 950

N.E.2d 157, at ¶ 32 (A plaintiff cannot maintain a cause of action for legal

malpractice in the absence of an attorney-client relationship.).

The first assignment of error is overruled.

Having determined that plaintiffs never had an attorney-client

relationship with Bohan individually and that the attorney-client relationship

between Alchemy and defendants terminated before the marketing and sale of

Alchemy, the remaining assigned errors, which are contingent on the existence of

an attorney-client relationship during that transaction, are moot.

Judgment affirmed.

It is ordered that appellees recover from appellants costs herein taxed.

The court finds there were reasonable grounds for this appeal.

It is ordered that a special mandate be sent to the common pleas court to carry

this judgment into execution.

A certified copy of this entry shall constitute the mandate pursuant to Rule 27

of the Rules of Appellate Procedure.

EILEEN T. GALLAGHER, JUDGE

EILEEN A. GALLAGHER, P.J., and MICHELLE J. SHEEHAN, J., CONCUR