[Cite as New Destiny Treatment Ctr., Inc. v. Wheeler, 129 Ohio St.3d 39, 2011-Ohio-2266.]

N EW D ESTINY T REATMENT C ENTER , I NC ., ET AL ., A PPELLEES , v. W HEELER

ET AL ., A PPELLANTS . [Cite as New Destiny Treatment Ctr., Inc. v. Wheeler, 129 Ohio St.3d 39, 2011-Ohio-2266.] Legal-malpractice claim — Attorney-client relationship — Party hiring counsel on behalf of a corporation must have authority to do so. (No. 2010-0298

— Submitted February 15, 2011

— Decided May 18, 2011.)
A PPEAL from the Court of Appeals for Summit County, No. 24404, 2009-Ohio-6956.

__________________ O’D ONNELL , J. {¶ 1} Attorney E. Marie Wheeler and th e law firm of Roderick Linton, L.L.P., appeal from a decision of the Nint h District Court of Appeals reversing a grant of summary judgment entered in their favor in a legal malpractice action brought against them by New Destiny Treatment Center, Inc., and Christian Brotherhood Newsletter, both nonprofit corp orations and successors to the Barberton Rescue Mission, Inc. The malpractice case arose from the representation of a dissident member of the board of trustees who tried to regain control of the corporation. The issue that concerns us in this case is whether attorneys who were retained by a disside nt member of a nonprofit corporation’s board of trustees, and who assisted the di ssident in temporarily taking control of the corporation, may subsequently be sued by the corporation for malpractice. The answer is no, because no attorney-client relationship existed between the attorney and the corporation. {¶ 2} Here, Wheeler and the law firm of Roderick Linton represented only the dissident trustee and took action on behalf of the corporation asS UPREME C OURT OF O HIO

2 instructed by the dissident. No attorney-client relationship ever existed between the corporation and the attorney or the law firm. Therefore, there is no basis for the corporation to maintain a cause of action for legal malpractice against either. Accordingly, we reverse the judgment of the court of appeals and reinstate the grant of summary judgment entered in favor of Wheeler and the law firm of
Roderick Linton. Facts and Procedural History {¶ 3} New Destiny Treatment Center, In c., is a nonprofit corporation located in Barberton, Ohio. New Destiny and the Christian Brotherhood Newsletter were originally organized as a single nonprofit corporation known as the Barberton Rescue Mission, Inc., whic h operated a rehabilitation facility for people with substance-abuse problems a nd provided a mutual aid program to assist those who subscribed to its Christian newsletter in paying their uninsured medical expenses. {¶ 4} In the late 1990s, the Internal Revenue Service, the Ohio attorney general, and the Summit County prosecuting attorney began investigating whether Reverend Bruce Hawthorn, th e founder and president of the Mission, had abused the Mission’s tax-exempt status by dive rting funds designated for a charitable purpose to his personal use and th e use of friends and relatives. {¶ 5} Once he became aware of these investigations, Hawthorn invited
Reverend Howard Russell a nd Reverend Richard Lupton to join the Mission’s
board of trustees in 1999 to make it a ppear that the Mission had an independent, rather than a family, board. Russell became chairman and Lupton became secretary of the board, and they discovere d that the Mission had fallen as much as $35 to $40 million behind in paying its subscriber’s medical bills, even though the newsletter generated $3 to $4 million per month in charitable contributions. The board retained the law firm of Vorys, Sa ter, Seymour & Pease, L.L.P., as legalJanuary Term, 2011

3 counsel in response to the investigations of the Mission’s tax-exempt status and of Hawthorn’s alleged misuse of charitable funds. {¶ 6} When a majority of the members of the board of trustees became concerned that Hawthorn’s leadership threatened the continued existence of the ministry, the board placed Hawthorn on a six-month leave of absence from his position controlling the daily activities of th e ministry. It appointed Dan Beers, Hawthorn’s nephew, as executive dir ector of the Mission and assigned Hawthorn’s duties to him; the minutes of a board meeting reflect that Beers resigned his position as a member of the board of trustees when he became executive director. The board eventually replaced Beers with an interim CEO and a management team. {¶ 7} When Hawthorn began to reasse rt control over the Mission,
members of the board of trustees determined that the best interests of the organization required his rem oval as president. While divided on this issue, the
board in November 2000 extended Hawthorn’ s leave of absence indefinitely, and Russell and Lupton, at least, believed that this leave relieved him of all executive authority. {¶ 8} Russell scheduled a meeting of the board of trustees for December 4, 2000, to discuss the attorney general’s investigation, to remove Hawthorn and his brother-in-law, Ron Beers, from the board, and to force Hawthorn to retire. {¶ 9} Hawthorn then retained Wheeler and the law firm of Roderick
Linton to ensure that he retained cont rol of the board. He scheduled a board meeting on December 4, earlier in the day than the one scheduled by the board. Wheeler prepared a special meeting agenda for the earlier meeting that included removing Russell from the board and retaini ng Roderick Linton as counsel for the
Mission. Because neither faction could a ssemble a quorum, neither succeeded in removing the other from the board.S UPREME C OURT OF O HIO

4 {¶ 10} On December 6, 2000, Hawthorn changed the locks on the Mission’s building, fired the board-appoint ed management team, and announced to employees that he had control of the organization. When Russell, who had been informed of Hawthorn’s actions, a rrived at the building, Hawthorn purported to remove him from the board, and Wh eeler ordered Russell to leave the premises. {¶ 11} Hawthorn then scheduled a teleconference meeting of the board for December 11, 2000. Although Russell and Lupt on were both given notice of the meeting and planned at that time to seek removal of Hawthorn and Ron Beers from the board, neither was permitted to participate. {¶ 12} At the meeting, Hawthorn and the board members present claimed that Dan Beers had not resigned from the board but rather had returned from a leave of absence as a trustee, found that a quorum existed, and thus purported to remove Russell and Lupton from the board a nd elect a new slate of trustees more
favorable to Hawthorn. Hawthorn also info rmed the board that he had retained
Wheeler on behalf of the Mission. {¶ 13} That same day, the attorney general, Russell, and Lupton brought an action in the name of the Mission ag ainst Hawthorn and others to recover funds misappropriated from the organi zation. Wheeler filed a notice to voluntarily dismiss the action on behalf of the Mission. Importantly, the attorney general, Russell, and Lupton moved to stri ke the notice and asserted that Wheeler and another Roderick Linton attorney represented only Hawthorn and the other defendants, but were “ not attorneys for Plaintiff Barberton Rescue Mission, Inc., nor [was] there any way they conceivably could be.” (Emphasis sic.) {¶ 14} On December 22, 2000, the attorney general, Russell, and Lupton filed a separate action on be half of the Mission in the Ninth District Court of Appeals seeking a writ of quo warranto to restore Russell and Lupton as membersJanuary Term, 2011

5 of the Mission’s board of trustees. Th ey alleged that Hawthorn had usurped control over the Mission and operated it w ithout corporate authority to do so. {¶ 15} Wheeler subsequently ended her a ssociation with Roderick Linton in February 2001, and in April 2001, the co mmon pleas court appointed R. Scott Haley as operating receiver for the Missi on. Although neither Russell nor Lupton acknowledged Wheeler’s authority to represent the Mission, Haley formally
terminated her as counsel for the Missi on. She continued to represent Hawthorn in the court matter, however, until she withdrew in August 2001. The common pleas court litigation proceeded with ne w defense counsel and resulted in a $2,950,000 jury verdict against Hawthorn. {¶ 16} On October 3, 2001, the court of appeals entered a summary judgment in the quo warranto action in favor of the attorney general, finding that
Dan Beers had not taken a leave of abse nce from the board of trustees but had resigned from that position. The court th erefore determined that the December 11, 2000 meeting, during which Hawthorn had attempted to oust Russell and Lupton from the board of trustees, was inva lid for lack of a quorum, and it further held that “[b]ecause the meeting was invalid, any and all actions taken at that meeting [were] void.” State ex rel. Montgomery v. Hawthorn (Oct. 3, 2001), Summit App. No. 20391, 2001 WL 1169559. {¶ 17} New Destiny then filed this legal malpractice action against Wheeler and Roderick Linton, asserting that they had breached their obligations as attorneys and had negligently represented that a quorum had been present at the December 11, 2001 meeting, which allowed Russell and Lupton to be removed
from the board and left Hawthorn in control of the Mission. {¶ 18} The trial court entered summary judgment in favor of Wheeler and Roderick Linton, concluding that no genui ne issue of material fact existed regarding whether the attorneys had entered into an attorney-client relationship with the Mission. As the court explained, “[t]he facts of this case do not provideS UPREME C OURT OF O HIO

6 for a legal malpractice cause of action because there was never an attorney-client relationship between Defendant s and Plaintiffs. In fact, the opposite is true: the current parties had an adversarial relati onship * * *. The factions had separate interests, separate Boards , and separate attorneys.” {¶ 19} The court of appeals reversed the trial court on the issue of the existence of an attorney-client relationship, explaining that because a corporation is an entity separate from its constituents, testimony from Russell and Lupton that Wheeler did not represent the Mission is not conclusive. Th e appellate court determined that the fact that Hawthorn hired Wheeler in his capacity as president of the Mission established a genuine issue of material fact regarding the existence of an attorney-client relationship. The appellate court rejected the argument that New Destiny should be judicially estoppe d from asserting the existence of an attorney-client relationship, holding th at Wheeler and Roderick Linton had unclean hands, having “represented themse lves as attorneys for the Mission,” and
thus could not assert the defe nse of judicial estoppel. New Destiny Treatment Ctrs., Inc. v. Wheeler , 9th Dist. No. 24404, 2009-Ohio-6956, at ¶ 29. Arguments on Appeal {¶ 20} Wheeler and Roderick Linton asse rt that they were not the attorneys for the Mission but rather that they represented one faction seeking to control the Mission’s board. They note that the lawfully constituted board of trustees never considered Wheeler to be the attorney for the board or for the
Mission and that Hawthorn’s leave of ab sence deprived him of both actual and apparent authority to engage an attorn ey on the Mission’s behalf. Wheeler and
Roderick Linton also contend that the Mi ssion should be judicially estopped from asserting that an attorney-client relationship existed because it had successfully argued a contrary position in prior litigation.January Term, 2011

7 {¶ 21} Finally, they argue that a court of appeals may not reverse a trial court’s judgment if alterna tive grounds for affirming it are preserved in the record and raised on appeal. {¶ 22} New Destiny, on the other hand, maintains that Wheeler and Roderick Linton acted as the corporate counsel for six months, that Hawthorn controlled the corporation and held out Wheeler and Roderick Linton as representing the Mission during that time, and that its employees treated them as counsel. Also, New Destiny relies on the doctrine of equitabl e estoppel to bar Wheeler and Roderick Linton from denyin g that they had an attorney-client relationship with the corpora tion, asserting that the attorneys represented that they were attorneys for the Mission and that the Mission relied to its detriment on those representations by paying their attorney fees. {¶ 23} Accordingly, the question presented is whether an attorney retained by a dissident member of a nonprof it corporation’s board of trustees in an effort to gain control of the corporation may subsequently be sued for malpractice by the corporation.
Standard of Review {¶ 24} Our review of cases decided on summary judgment is de novo, governed by the standard set forth in Civ.R. 56. Comer v. Risko , 106 Ohio St.3d 185, 2005-Ohio-4559, 833 N.E.2d 712, ¶ 8. A tr ial court should enter summary judgment in favor of the moving party if “ ‘(1) there is no genuine issue of material fact; (2) the moving party is entitled to judgment as a matter of law; and (3) it appears from the evidence that reasonable minds can come to but one conclusion when viewing evidence in favor of the nonmoving party, and that conclusion is adverse to the nonmoving party.’ ” Doe v. Shaffer (2000), 90 Ohio St.3d 388, 390, 738 N.E.2d 1243, quoting Grafton v. Ohio Edison Co. (1996), 77 Ohio St.3d 102, 105, 671 N.E.2d 241. The Attorney-Client RelationshipS UPREME C OURT OF O HIO

8 {¶ 25} To establish a cause of action for legal malpractice, a claimant must demonstrate the existence of an attorney-client relationship giving rise to a duty, a breach of that duty, and dama ges proximately caused by that breach. Krahn v. Kinney (1989), 43 Ohio St.3d 103, 105, 538 N.E.2d 1058. Accordingly, as we explained in Shoemaker v. Gindlesberger , 118 Ohio St.3d 226, 2008-Ohio2012, 887 N.E.2d 1167, “[i]f a plaintiff fails to establish a genuine issue of material fact as to any of the elements, [the attorney] is entitled to summary judgment.” Id. at ¶ 8. {¶ 26} To determine whether an attorney-client relationship exists, the
law looks to the manifest intentions of th e attorney and the prospective client. 1 Hazard & Hodes, The Law of Lawyerin g (2005) 2-8, Section 2.5. A relationship of attorney and client arises when a pers on manifests an intention to obtain legal services from an attorney and the attorney either consents or fails to negate consent when the person has reasonably assumed that the relationship has been established. Id.; 1 Restatement of the Law 3d, The Law Governing Lawyers (2000) 126-128, Section 14. Thus, the existen ce of an attorney-client relationship does not depend on an express contract but may be implied based on the conduct of the parties and the reasonable expecta tions of the putative client. Hazard & Hodes, supra, at 2-9; Becker, Gutte nburg & Snyder, The Law of Professional Conduct in Ohio (2009-2010) 1-15 to 1- 16, Section 1.07[1]; Flamm, Lawyer Disqualification: Conflicts of Interest and Other Bases (2003) 221-222, Section 11.2; see also Cuyahoga Cty. Bar Assn. v. Hardiman , 100 Ohio St.3d 260, 2003-Ohio-5596, 798 N.E.2d 369, ¶ 10 (“The determination of whether an attorneyclient relationship was created turns largely on the reasonable belief of the prospective client”). {¶ 27} However, in this case, the putative client is a corporate entity, and an attorney employed or retained by a corporation represents the organization acting through its constituents; the attorney does not owe allegiance to aJanuary Term, 2011

9 stockholder, director, officer, or other pe rson connected with the corporation. Prof.Cond.R. 1.13(a); former EC 5-19. T hus, because a corporate attorney represents the organization acting through its agents, id., in order to form an attorney-client relationship with a corpora tion, the party hiring counsel on behalf of the corporation must necessarily have authority to do so and must reasonably believe that an attorney-client relationship has be en established. {¶ 28} Here, no one with authority to employ counsel for the Mission
retained either Wheeler or the firm of Roderick Linton, and no corporate resolution exists to that effect. While Hawthorn purported to retain them in his capacity as president of the Mission in December 2000, the board of trustees had placed him on a leave of absence in Ma y 2000 and had extended that leave of absence indefinitely in November 2000. Both Russell and Lupton testified that Hawthorn had been relieved of his authority to control the daily activities of the corporation during this period of time. Thus, Hawthorn lacked authority in his capacity as president to retain counsel on behalf of the Mission in December
2000. {¶ 29} Further, New Destiny does not point to anything in this record showing that any other constituent of the Mission with authority to obtain counsel retained Wheeler, nor does it indicate th at any board meeting took place at which the duly elected directors establishe d a quorum and ratified Wheeler’s employment or that of the law firm of Roderick Linton as the Mission’s counsel. In fact, both Russell and Lupton testified that Wheeler did not represent the Mission as its attorney, because they considered her to be the attorney for
Hawthorn and his faction. {¶ 30} Moreover, the complaint filed by New Destiny in this case states
that Wheeler and Roderick Linton never had authority to represent the Mission, alleging that Wheeler and the law firm provided advice to the Hawthorn faction of
the board that “ purported to result in her retention as counsel” (emphasis added)S UPREME C OURT OF O HIO

10 for the Mission but that thei r employment was actually “void and invalid.” New Destiny cites no legal principle that would allow it to deny the existence of an attorney-client relationship between the Mission and Wheeler or the law firm in its complaint while simultaneously seeking to recover a judgment against them for legal malpractice. {¶ 31} Accordingly, New Destiny has not met its burden to establish the existence of an attorney-client relati onship between the Mission and Wheeler or Roderick Linton, and no evidence of such a relationship exists. Thus, summary judgment is appropriate in connection with New Destiny’s legal malpractice claims, and the question whether an appellate court may reverse a trial court’s judgment if alternative grounds for affirming it are preserved in the record and raised on appeal therefore becomes moot.
Conclusion {¶ 32} A claimant may not maintain a cause of action for malpractice against an attorney in the absence of an attorney-client relationship. Because neither Wheeler nor Roderick Linton ever represented the Mission, but rather represented only a dissident faction of the corporation, the trial court properly entered summary judgment on the legal malpractice claim asserted against them. Accordingly, we reverse the judgment of the court of appeals and reinstate the summary judgment entered by the trial court in favor of Wheeler and Roderick
Linton. Judgment reversed.
P FEIFER , A CTING C.J., and R OGERS , L UNDBERG S TRATTON , C UPP , and
M C G EE B ROWN , JJ., concur.
L ANZINGER , J., concurs in judgment only.
R ICHARD M. R OGERS , J., of the Third Appellate District, sitting for
O’C ONNOR , C.J.

__________________January Term, 2011

11 Gibson & Lowry, Michael J. Moran, and Kenneth L. Gibson, for appellee New Destiny Treatment Center, Inc. Gallagher Sharp, Alan M. Petrov, Timothy J. Fitzgerald, Jay Clinton Rice, and Theresa A. Richthammer, for appellant Roderick Linton, L.L.P. Reminger Co., L.P.A., Brian D. Sulliv an, Martin T. Galvin, and John P. O’Neil, for appellant E. Marie Wheeler.

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