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HANDELMAN v. HUSTLER MAGAZINE

April 26, 1979

Philip HANDELMAN, Plaintiff,
v.
HUSTLER MAGAZINE, INC., and Larry C. Flynt and Kevin Cash, Defendants



The opinion of the court was delivered by: SAND

In our opinion filed on October 12, 1978 *fn1" denying defendants' motion for summary judgment, we reviewed the background facts and governing legal principles applicable to this libel action. Familiarity with that decision will be assumed. This opinion constitutes our findings of fact and conclusions of law as required by F.R.Civ.P. 52(a).

FINDINGS OF FACT

 The Estate Proceedings

 Katharine W. D. Loeb, mother of William Loeb ("Loeb"), publisher of the Manchester Union Leader and the New Hampshire Sunday News, died on November 24, 1966. Pursuant to the terms of her will, Loeb was disinherited and his daughter, I. e., the decedent's granddaughter, was the principal beneficiary of the estate which was valued at approximately one million dollars. Pursuant to the terms of the will, the Chase Manhattan Bank and Alexander C. Dick, who was associated with the plaintiff in the practice of law, served as Executors.

 Loeb, through his counsel Rogers and Wells, instituted two proceedings: objections to the probate of the Will and an action to enforce a contract which would have given Loeb 75% Of his mother's estate.

 For his services on behalf of the Executors in both matters, plaintiff was paid the sum of $ 89,250.00. *fn2" The only other legal fees paid by the estate were payments of $ 30,000 to Clarence Meleney, the attorney who filed the will for probate, and $ 10,000 to Peter Allsopp, who had served as special guardian. Thus, the legal fees paid out of the estate totalled $ 129,250.00.

 As is the case in all such proceedings, the Surrogate in Mineola, New York where the will was admitted to probate, was called upon to review and approve these fees and indeed, one charity named as a beneficiary objected to the size of the fees. After discussion with the Surrogate, plaintiff reduced a fee request from $ 25,000 to $ 11,250. This lower fee was approved by the Surrogate.

 The Book "Who the Hell is William Loeb?"

 The defendant, Kevin Cash, a sometime free-lance writer and publisher from New Hampshire, had worked for Loeb in 1948-49 and again in 1957-1959. Cash testified that he was never on good terms with Loeb who at one time "suspended" him for one year, an action which Cash regarded as tantamount to dismissal.

 Cash researched and wrote the book Who the Hell is William Loeb? which was published in 1975 by Amoskeog Press, Inc., a corporation formed by him for this purpose. The book devotes 50 pages to a description of the estate proceedings. Nowhere in the book does the figure $ 800,000 appear with reference to the amount of legal fees charged to the estate. The book does, however, contain the statement "well over half of the bulk of the estate went to legal fees". Defendant's Trial Exhibit A.

 As part of his research on this section of the book, Cash reviewed the papers filed in the Surrogate's Court in Mineola and he interviewed the decedent's granddaughter, Mrs. McAllister. In his review of the voluminous files in the Surrogate's Court, Cash noted the protracted nature of the proceedings (six years) and the participation in the proceedings of many counsel and law firms, who might fairly be described as "high priced New York lawyers". He also saw the affidavit of Alexander C. Dick in which it is stated that plaintiff received $ 103,000. for his services to the estate. *fn3" These fees seemed quite high (especially from the perspective of a New Hampshire free-lance writer) and indeed, Cash compared them to the salary paid to a journalist for one assignment.

 Cash, who lacks any legal training or sophistication, assumed that if plaintiff received approximately $ 100,000 for his services, the total legal fees must have been an amount approximately equal to $ 100,000 multiplied by six or seven, the number of lawyers he believed participated in the proceedings. He also assumed, erroneously and without any basis in fact insofar as the Surrogate's Court files disclosed, that all of the fees, I. e., including the fees paid by Loeb to his counsel, were charged to the estate. He also appears to have assumed that the $ 92,000 payment to Loeb in settlement of the contract action was a sum which could be attributed to legal fees. There appears, however, to be no factual basis for this assumption.

 Cash testified that Mrs. McAllister told him that the Will was fought for six years and the lawyers "ate up" about $ 700,000 of the estate. This statement by Mrs. McAllister is contained in Cash's contemporaneous notes of that interview. Trial Exhibit 7. It is noteworthy that the phrase "ate up" is attributed to Mrs. McAllister since the phrase "eat up" appears, as we shall see, in the alleged libel. As we shall also see, Cash testified that he neither wrote the alleged libel nor furnished Trial Exhibit 7 to anyone at Hustler. It may be that the use of the phrase is pure coincidence, being a rather common colloquial expression to describe the process of one thing consuming or depleting another.

 In addition to the foregoing, Cash acquired from Mrs. McAllister the impression that she had retained an attorney to represent her personally, and that this attorney's fees also "ate" into the estate. This latter impression too was, of course, erroneous.

 The information Cash received from Mrs. McAllister fortified his belief that legal fees charged to the estate were in the $ 700,000 range.

 Loeb has a reputation for litigiousness and, sensitive to this, Cash procured the services of counsel to review the manuscript of his book from the standpoint of vulnerability to a defamation action. *fn4" He also kept the underlying documents he relied upon in the preparation of his manuscript and placed them in a vault in the same office building as is occupied by his attorneys.

 Who Wrote the Hustler Article?

 The Complaint alleges that Cash wrote the article containing the alleged libel, using the pseudonym "Ben Steffens". See our summary judgment opinion, n. 2. Cash denies that he is the author of the article, although for these purposes this denial may turn upon the precise definition one accords the term "author".

 Cash testified that in the spring of 1976 while in Manchester, New Hampshire, he was asked by one Mark Baker of Hustler Magazine whether he would write an article for Hustler. The rates offered were $ 2,500 if Cash wrote the article under his own name or $ 1,500 if the article appeared under a pseudonym. *fn5" ...


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