Hustler Cincinnati, Inc. v. Paul Cambria, Jr.

625 F. App'x 712
CourtCourt of Appeals for the Sixth Circuit
DecidedAugust 14, 2015
Docket14-4130
StatusUnpublished
Cited by5 cases

This text of 625 F. App'x 712 (Hustler Cincinnati, Inc. v. Paul Cambria, Jr.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Sixth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hustler Cincinnati, Inc. v. Paul Cambria, Jr., 625 F. App'x 712 (6th Cir. 2015).

Opinion

SUTTON, Circuit Judge.

The Hustler enterprise is a media conglomerate that publishes sexually explicit magazines, operates retail stores, and manages a clothing line, among many other ventures. It also started as a family business. Brothers Jimmy and Larry Flynt opened the first Hustler nightclub together in 1969, and many members of the Flynt clan have worked in the Hustler enterprise over the years. But family strife led to business discord (and business *714 problems to family problems) in the late 2000s, when Jimmy and Larry had a falling out. The result has been an endless stream of litigation. At issue in- today’s installment of' this saga is- whether five attorneys who were associated with the Hustler enterprise committed legal malpractice and tortiously interfered with contractual relations, business relations, and expectancy interests. The district court granted the attorneys’ motion for summary judgment on all claims. We affirm.

I.

The Hustler enterprisé first published its flagship magazine in 1974', and litigation followed soon after. The initial wave of litigation involved criminal prosecutions. In 1976, the State of Ohio indicted Jimmy and Larry for pandering obscenity. The brothers retained two attorneys from a Buffalo law firm known (at the time) as Lipsitz, Green, Fahringer, Roll, Schueler & James. A young associate named Paul Cambria defended Jimmy, who was acquitted, while named partner Harold Fahringer represented Larry, who was convicted. The conviction was overturned on appeal.

Over two decades passed before Cam-bria and Jimmy crossed paths again. In 1997, Jimmy formed Hustler News & Gifts, Inc., an Ohio corporation that operated a Hustler bookstore in Cincinnati. The next year, Jimmy and Larry faced another prosecution, this one related to the sale of obscene materials at the bookstore. They retained three lawyers: Cambria, Lou Sirkin (a Cincinnati attorney), and Alan Isaacman (Hustler’s longtime corporate counsel). In 1999, the Flynt brothers accepted a plea bargain that substituted Hustler News & Gifts as the sole defendant, that conceded guilt by the corporation, and that required the corporation to pay a fine.

After this conviction, Jimmy incorporated a new entity named Hustler Cincinnati, Inc., of which, he became the sole owner. He.leased property at 411 Elm Street in Cincinnati and opened a new store there. Soon after, Jimmy exercised an option to purchase the property, relying (in part) on funds provided by the Hustler parent corporation.

In December 2000, Jimmy opened another Hustler store, this one located in Monroe, Ohio, and operated by an entity named Hustler Hollywood-Ohio, Inc. Jimmy held all of the shares of Hustler Hollywood-Ohio, . though . the parties dispute whether he was the true owner or a straw man designed to shield Larry from prosecution. One of Larry’s companies owned the real estate on which the Monroe store sat and leased it to Hustler Hollywood-Ohio.

In 2001, Larry fired his corporate attorney, Alan .Isaacman, and negotiated an oral retainer -agreement with Cambria’s law firm, by then named Lipsitz Green Seime Cambria. To recap: At the time of this agreement, Jimmy owned two entities (Hustler Cincinnati and Hustler Hollywood-Ohio) and the real estate on which the Cincinnati store sat; Larry’s corporation owned the Monroe real estate. Over the next four years, the business relationship between Jimmy and Larry changed significantly. Hustler Hollywood-Ohio entered into a new lease with Larry’s corporation and began paying higher rent for the Monroe property. Within a few years, Jimmy sold all of his stock in Hustler Hollywood-Ohio. to one oi; Larry’s companies. Jimmy received $150,000 for the stock but paid it all back to Larry as licensing fees for prior use of the Hustler trademark. Then Jimmy sold the Cincinnati property to,another Larry-owned entity and leased it, back. And in lafe 2004, Hustler Cincinnati began paying licensing *715 fees to the Hustler parent company for use of its trademarks. By the end of this chain of transactions, Jimmy owned just one piece of Hustler-related property: Hustler Cincinnati.

In 2009, following a dispute between Larry and Jimmy’s sons, Larry fired Jimmy from the Hustler enterprise. One of Larry’s companies attempted (unsuccessfully) to evict Hustler Cincinnati from the property at 411 Elm Street, Hustler Cincinnati Inc. v. Elm 411, L.L.C., No. C-130754, 2014 WL 7339031, at *2, 8 (Ohio Ct.App. Dec. 24, 2014), while another filed a (successful) trademark infringement action against the Cincinnati store, L.F.P.IP, LLC v. Hustler Cincinnati, Inc., 533 Fed.Appx. 615, 618-22 (6th Cir.2013). Larry also allegedly removed Jimmy from the Larry Flynt Revocable Trust, which holds many of Hustler’s assets.

In 2009, Jimmy and Hustler Cincinnati filed a legal-malpractice action in state court against Cambria, four other lawyers at Lipsitz Green, and the firm itself. The trial court dismissed their claims without prejudice.

So ends the prelude to this lawsuit. In 2010, after the state court dismissed the action, Jimmy and Hustler Cincinnati filed this lawsuit in federal court. They claimed that the five attorneys sued in the state court action had committed legal malpractice by representing both Jimmy and Larry in several transactions' where the brothers had adverse interests, including the léase and licensing agreements that transferred Jimmy’s interests in the Ohio stores to Larry. Jimmy and Hustler Cincinnati also filed claims of tor-tious interference with contractual rights, business relations, and expectancy interests. The district court granted summary judgment to the attorneys on all claims, holding that there was no attorney-client relationship between Jimmy or Hustler Cihcinhati and Lipsitz Green.

II.

To prove legal malpractice under Ohio law, & plaintiff must establish (1) an attorney-ciient relationship, (2) a professional duty arising from the relationship, (3) breach of the duty, (4) proximate cause, and (5) damages. Shoemaker v. Gindlesberger, 118. Ohio St.3d 226, 887 N.E.2d 1167, 1169-70 (2008). There are two ways to form an attorney-client relationship under Ohio law: by express contract or by implication. Cuyahoga Cnty. Bar Ass’n v. Hardiman, 100 Ohio St.3d 260, 798 N.E.2d 369, 373 (2003). Jimmy and Hustler Cincinnati have not presented evidence that they formed an attorney-client relationship with Lipsitz Green in either way.

First, there is no evidence of an express contract. It is true that Cambria represented Jimmy in the 1976 and 1998 criminal prosecutions. Yet under 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 — each criminal case in this instance. See Kouba v. Climaco, No, 38585, 1979 WL 210054, at *2 (Ohio Ct.App. Mar. 15, 1979); see also Ohio R. Profl Conduct 1.16 emt. 1. Nor is there evidence that Larry’s 2001 retainer with Lipsitz Green encompassed representation of Jimmy or Hustler Cincinnati. Larry and Cambria both testi-fiéd that the agreement did not cover Jimmy (and that Jimmy was not at the meeting where the final agreement was struck).

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Bluebook (online)
625 F. App'x 712, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hustler-cincinnati-inc-v-paul-cambria-jr-ca6-2015.