Flynt v. Brownfield, Bowen & Bally

• Decision Date: 13 December 1989
• Docket Number: No. C-2-83-0952.,C-2-83-0952.
• Court: U.S. District Court — Southern District of Ohio
• Parties: Larry FLYNT, et al., Plaintiffs, v. BROWNFIELD, BOWEN & BALLY, et al., Defendants and Third-Party Plaintiffs, v. David L. KAHN, Third-Party Defendant.

726 F. Supp. 1106

Larry FLYNT, et al., Plaintiffs, v. BROWNFIELD, BOWEN & BALLY, et al., Defendants and Third-Party Plaintiffs, v. David L. KAHN, Third-Party Defendant.

No. C-2-83-0952.

United States District Court, S.D. Ohio, E.D.

December 13, 1989.

Burt Fulton, Lynn L. Moore, Gallagher, Sharp, Fulton & Norman, Cleveland, Ohio, for plaintiffs and third-party defendant.

David J. Young, James S. Savage, John J. Krimm, Jr., Squire, Sanders & Dempsey, Columbus, Ohio, for defendants and third-party plaintiffs.

OPINION AND ORDER

KINNEARY, District Judge.

This matter comes before the Court to consider the motion of the plaintiffs for relief from judgment. Fed.R.Civ.P. 60(b). In May 1983, Larry Flynt, Hustler Magazine, Inc. and L.F.P., Inc. filed this diversity suit against C. William Brownfield, Laurence E. Sturtz, and their firm, Brownfield, Bowen & Bally ("the Brownfield firm") alleging legal malpractice. The Court granted summary judgment to the defendants on the plaintiffs' malpractice claims on March 29, 1988, holding that the statute of limitations barred the claims against the defendants.

The Court reasoned, in dismissing the claims against Brownfield and the Brownfield firm, that the Brownfield firm terminated its relationship with the plaintiffs by letter on February 16, 1982. Thereafter, the plaintiffs entered a separate and distinct professional relationship with the Brownfield firm on March 12, 1982. The relationship involved the completion of the appeals process in a state court case, Guccione v. Hustler Magazine, Inc., No. 80AP-375, 1981 WL 3516 (Ohio Ct.App. Oct. 8, 1981). For a discussion of the procedural history of Guccione and this case, see Flynt v. Brownfield, Bowen & Bally, No. C-2-83-0952, slip op. at 1-5 (S.D.Ohio Mar. 29, 1988) (granting summary judgment), aff'd, 882 F.2d 1048, 1048-50 (6th Cir.1989).

Given that the plaintiffs claims arise out of the defendants' conduct prior to the termination of the initial attorney-client relationship on February 16, the Court held that the plaintiffs' claims accrued on February 16, 1982. The new relationship between the parties did not toll the running of the statute because it was not a continuation of the old affiliation. The plaintiffs did not assert their claims until May of 1983. Therefore, the Court held that the applicable one-year statute of limitations barred the plaintiffs' claims. Id., slip op. at 7-8. The plaintiffs filed a notice of appeal on June 30, 1988. The Court of Appeals for the Sixth Circuit affirmed the Court's holding on August 14, 1989. Flynt v. Brownfield, Bowen & Bally, 882 F.2d 1048, 1049-53 (6th Cir.1989).

Before the Court of Appeals ruled on the appeal, however, the plaintiffs filed the instant motion for relief from judgment on July 25, 1988.¹ The plaintiffs claim that they have discovered evidence so material and probative that the Court should reconsider its ruling in granting summary judgment for the defendants. Specifically, the plaintiffs now produce billing statements issued by the Brownfield firm which purportedly demonstrate that the Brownfield firm did indeed have an ongoing relationship with the plaintiffs in February and March 1982, continuing into July 1982, despite the "unilateral demand for termination" tendered by the defendants on February 16, 1982. Plaintiff's Memorandum in Support of the Motion for Reconsideration at 2. The plaintiffs deny that the parties entered into a separate and limited relationship on March 12, 1982.

The defendants respond with several arguments. First, they assert that the notice of appeal filed by the plaintiffs entails that the Sixth Circuit had before it a pending appeal; the appeal divested this Court of jurisdiction over the case. Therefore, this Court is without authority to consider the motion. Second, the defendants contend that the plaintiffs fail to present sufficient cause to reopen the matter and consider new evidence, given that the plaintiffs had an opportunity to present this evidence while the matter was under advisement in this Court. Third, the plaintiffs cannot proceed under the residual clause of Rule 60(b)(6), which provides relief in "all other cases." The plaintiffs' rationale for seeking relief is based solely upon "newly discovered evidence," which the Court must consider by applying Rule 60(b)(2). Rule 60(b)(6), therefore, is simply irrelevant. Finally, even if the Court were to consider the new evidence, the billing statements do not alter the conclusion that the attorney-client relationship and its inherent mutual confidence terminated on February 16, 1982. After the Brownfield firm's February 16 letter, no ongoing relationship existed which could toll the running of the statute of limitations.

The first three arguments propounded by the defendants present threshold issues which the Court must address before reaching the merits of the plaintiff's motion. Therefore, the Court will address these three issues in turn, and will thereafter discuss the merits of the motion.

I. JURISDICTION

At the outset, the Court must determine whether the appeal divested the Court of its jurisdiction to consider the plaintiffs' motion for relief from judgment, Fed.R. Civ.P. 60(b). The traditional rule is that a pending appeal entails that the appellate court divests the district court of jurisdiction over the case until the court of appeals remands the case. E.g., Marrese v. American Academy of Orthopedic Surgeons, 470 U.S. 373, 379, 105 S.Ct. 1327, 1331, 84 L.Ed.2d 274 (1985); Cochran v. Birkel, 651 F.2d 1219, 1221 (6th Cir.1981), cert. denied, 454 U.S. 1152, 102 S.Ct. 1020, 71 L.Ed.2d 307 (1982).² Therefore, the district court could not grant post-judgment motions filed after a notice of appeal without permission of the appellate court.³

The Court of Appeals for the Sixth Circuit, however, has modified the traditional rule as it applies to motions for relief from judgment. First Nat'l Bank v. Hirsch, 535 F.2d 343 (6th Cir.1976) (per curiam). The court stated that a district court may examine the merits of a Rule 60(b) motion. If the district court intends to grant the motion, it must enter an order so indicating; the party seeking relief can then move the court of appeals to remand the action. Id. at 346; see Cochran, 651 F.2d at 1221 n. 5. But see Rucker v. United States Dep't of Labor, 798 F.2d 891, 892 (6th Cir.1986) (district court had no jurisdiction to enter certain orders after a notice of appeal); Berndt v. Stinson, 562 F.Supp. 28, 29-30 (E.D.Tenn.1982), appeal dismissed, 708 F.2d 721 (6th Cir.1983).⁴ Upon remand, the district court can grant final relief under Rule 60(b) which the proponent sought.⁵ The Sixth Circuit has also held that a district court may enter a final ruling on the merits denying a party Rule 60(b) relief during the pendency of an appeal. Schewchun v. Edwards, 815 F.2d 79 (6th Cir.1987) (denying motion to dismiss appeals for lack of jurisdiction); see also Puerto Rico v. SS Zoe Colocotroni, 601 F.2d 39, 41 (1st Cir.1979).

Even absent a general rule permitting courts to deny Rule 60(b) motions during pending appeals, another doctrine bolsters the conclusion that the Court has jurisdiction to enter a final ruling denying the instant motion. A district court may enter orders even after the filing of a notice of appeal if they would aid the appeal. See Cochran, 651 F.2d at 1221 & n. 5 (citing Jago v. United States Dist. Court, 570 F.2d 618 (6th Cir.1978) (granting bail to successful petitioner for habeas corpus despite pending appeal); Hirsch, 535 F.2d at 343 (tentative order signifying district court's intention to grant relief from judgment)). An order denying a Rule 60(b) motion would aid the appeal. Willie v. Continental Oil Co., 746 F.2d 1041, 1046 (5th Cir.1984); 9 J. Moore, B. Ward & J. Lucas, Moore's Federal Practice ¶ 204.121, at 4-82 (2d ed. 1989).

Therefore, the pending appeal did not leave this Court bereft of jurisdiction to consider the motion under Rule 60(b) for relief from judgment. The scope of that authority, however, would be limited if the Court were inclined to grant the motion. Nevertheless, the jurisdictional hurdle would not bar consideration of the merits during the pendency of the appeal, at least to the extent necessary to determine whether the Court should issue a tentative ruling stating its inclination to grant the motion. If such an order is not appropriate given the meritlessness of the motion, the Court may also weigh the merits in order to deny the motion.

Rucker v. United States Department of Labor, 798 F.2d 891, 892 (6th Cir.1986), is not contrary to this conclusion. In Rucker, the plaintiffs moved to reconsider an order of the district court. They subsequently filed a notice of appeal. The district court granted the motion to reconsider in an order which the defendant moved to reconsider. In a second post-appeal order, the district court granted the defendant's motion to reconsider. Finally, the district court denied the plaintiff's second motion to reconsider. Id.

In a cursory holding, the court simply stated that a district court, aside from certain exceptions, has no jurisdiction over an action after a party perfects an appeal. Thus, the court, without analysis, simply vacated all of the district court's orders issued after the plaintiff filed the notice of appeal, despite the fact that the district court's second two orders arguably could be within the category of orders aiding the appeal. Id.

Rucker is distinguishable from the facts here, though. First, the district court construed the motion to be one to alter or amend the judgment. See id. at 892 & n. 1. Motions of this kind are ones falling under Rule 59(e). In this case, though, the plaintiffs move for relief from judgment under Rule 60(b). Strictly speaking, then, Rucker did not address the kind of motion filed here.

Second, even if the district court in Rucker had treated the plaintiff's untimely Rule 59(e) motion to be one...