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Filed 12/20/23 Schoenmann v. Orrick, Herrington & Sutcliffe CA1/5

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on 

opinions not certified for publication or ordered published, except as specified by rule 

8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. 

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIRST APPELLATE DISTRICT

DIVISION FIVE

E. LYNN SCHOENMANN, as 

Trustee in Bankruptcy, etc., 

Plaintiff and Appellant,

v.

ORRICK, HERRINGTON & 

SUTCLIFFE, LLP et al.,

Defendants and Respondents.

 

A165552

 (San Francisco City and County

 Super. Ct. No. CGC-20-585193)

Orrick, Herrington & Sutcliffe, LLP represented Anshan Li 

and his company TA Home, Inc. in a San Mateo County Superior 

Court action that, following a bench trial, resulted in a $72 

million judgment against them. 

A couple years later, the court granted a motion to amend 

the judgment and add two new entities—Li’s Capital, LLC and 

Sunrock Capital, LLC—as additional judgment debtors upon 

finding they were part of a single enterprise owned and 

controlled by Li. Involuntary petitions for bankruptcy were filed 

against the LLCs. 

Bankruptcy trustee E. Lynn Schoenmann then filed the 

instant action against Orrick and its partner Robert Varian, 

alleging they had committed malpractice and breached a 

fiduciary duty to the LLCs by failing to preserve their rights to a 

jury trial in the San Mateo action. 
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The trial court granted defendants’ motion for summary 

judgment. The trustee had introduced no evidence showing 

Orrick represented the LLCs during the relevant time period in 

the San Mateo action. We affirm.

BACKGROUND

A.

In 2011, Zhize Huang and his company Wuxi Luoshe 

Printing and Dyeing Co., Ltd. filed an action in San Mateo 

County Superior Court naming Li and TA Home as defendants. 

They alleged that Huang and Li jointly owned a business 

(Standard Fiber) and Li committed fraud when he sold Standard 

Fiber without notice or compensation to Huang. They also 

alleged that TA Home was the “successor-in-interest” and 

“continuation” of Standard Fiber. The complaint did not mention 

the LLCs.

Orrick (with lead partner Varian) represented Li and TA 

Home in this action. According to Orrick, it entered into a 

written engagement agreement with Li in January 2011 to 

represent him “regarding [his] dispute with Huang and Wuxi 

Luoshe.” 

At the outset of the case, Huang and Wuxi Luoshe 

requested a jury trial, but Li and TA Home requested a bench 

trial. In 2013, however, Huang and Wuxi Luoshe waived their 

right to a jury. Orrick filed an ex parte application seeking relief 

from its prior jury waiver, which was denied. The matter 

proceeded to a bench trial in March 2013. 

Meanwhile, from August 2012 to May 2013, Orrick 

represented one of the LLCs (Li’s Capital) in arbitration 

proceedings. According to Orrick, these proceedings were 

“initiated by third parties” and “related to alleged

misrepresentations in connection with the sale of Standard Fiber, 

LLC assets.” Neither Huang nor Wuxi Luoshe was a party to the 
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arbitration. There was no written engagement agreement 

between Orrick and the LLC for this representation. 

In September 2015, more than two years after the 

conclusion of the bench trial in the San Mateo action, the judge 

issued a proposed statement of decision awarding $68 million in 

damages to Huang (including prejudgment interest) and 

$470,000 to Wuxi Luoshe. 

In December 2015, Orrick entered into a revised written 

engagement agreement to represent both Li and TA Home 

“regarding the claims by Wuxi Luoshe and Huang.” According to 

the trustee, Orrick executed this revised agreement because the 

proposed statement of decision foreshadowed “a huge judgment 

that created an actual conflict of interest between [TA Home] and 

Li as to payment of the judgment.” 

Orrick has objected to the trustee’s requests for production 

of both the 2011 and 2015 written engagement agreements based 

on attorney-client privilege. 

The final statement of decision and judgment were entered 

in July 2016. Neither refers to the LLCs. The judgment 

ultimately awarded $72,560,730 to Huang and $876,315 to Wuxi 

Luoshe against Li and TA Home. 

Li appealed the judgment. Among other things, he argued 

that the trial court abused its discretion in denying him relief 

from his jury waiver. The judgment was affirmed in Wuxi Luoshe 

Printing & Dyeing Co. v. Anshan Li (June 25, 2019, A149522) 

[nonpub. opn.], determining that the record “amply supports the 

trial court’s conclusion that the waiver was deliberate, and 

defendants had simply changed their minds.” (Id. at p. 14.)
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B.

Huang filed another action in San Mateo County Superior 

Court against Li and TA Home seeking Li’s removal from TA 

Home’s board of directors. 

In December 2016, Huang amended the complaint and 

added the LLCs as defendants. The amended complaint alleged 

that Li had transferred assets to the LLCs to evade the $72 

million judgment and sought to void those transfers. 

In January 2017, Li sent Orrick an email stating: “For the 

amended new case, I think we should defense [sic] my LLCs.” 

Orrick subsequently filed an answer to the amended complaint 

on behalf of Li and the LLCs. 

Two months later, Orrick withdrew as counsel in both San 

Mateo actions after the production of bank records showed 

certain assets had been inappropriately transferred. 

C.

About two years after the $72 million judgment, in 2018, 

Huang and Wuxi Luoshe moved to amend the judgment to add 

the LLCs as additional judgment debtors. The court stated that, 

“given the representation and participation of Defendants 

Anshan Li and TA Home Inc. in the Court Trial in this action 

resulting in the Judgment,” the LLCs “were virtually represented 

in this action and in the Court Trial, and are deemed to have had 

control of the underlying litigation as there is such a unity of 

interest and ownership that the separate personalities of the 

entities do not exist; and an inequitable result will follow if the 

acts are treated as those of TA Home Inc. alone.” The court 

granted the motion to add the LLCs to the judgment against TA 

Home under the “single enterprise theory,” as TA Home and the 

LLCs “are sister companies under common control and constitute 

a Single Enterprise owned and controlled by Anshan Li.” 
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After involuntary petitions for bankruptcy were filed 

against the LLCs, the trustee was appointed for their bankruptcy 

estates. 

D.

In 2020, the trustee filed this action against Orrick and 

Varian asserting causes of action for (1) professional legal 

malpractice and (2) breach of fiduciary duty. The complaint 

alleged that defendants had failed to preserve the LLCs’ rights to 

a jury trial in the first San Mateo action. The trustee sought $72 

million in damages, $14 million in attorney fees paid to Orrick, 

and “additional interest that accrued as a result of the additional 

time between trial and judgment as a result of the case being 

tried to a judge rather than the jury.” 

Defendants demurred, arguing that the trustee could not 

show they owed a duty to the LLCs because they did not 

represent them when the purported malpractice (jury trial 

waiver) occurred. The trial court overruled the demurrer, 

explaining it must take allegations from the complaint as true at 

the demurrer stage, including the allegation that Orrick 

represented the LLCs from 2011 to 2017. 

The trial court later granted defendants’ motion for 

summary judgment. The court explained there was no evidence 

establishing that Orrick represented the LLCs during the 

relevant time period in the action or that an attorney-client 

relationship was established by court order, express agreement, 

or implied agreement. 

DISCUSSION

A.

Summary judgment is properly granted when there is no 

triable issue as to any material fact and the moving party is 

entitled to judgment as a matter of law. (Code Civ. Proc., § 437c, 
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subd. (c); Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 

850.)1 A defendant moving for summary judgment has the 

burden of demonstrating that either an essential element of each 

cause of action cannot be established or that there is a complete 

defense. (§ 437c, subds. (b)(1), (p)(2); Aguilar, supra, at pp. 850, 

854.) Once the moving party has met its burden, the burden 

shifts to the opposing party to present evidence that 

demonstrates a triable issue of material fact. (§ 437c, subd. 

(b)(3); Ochoa v. Pacific Gas & Electric Co. (1998) 61 Cal.App.4th 

1480, 1485.)

The existence of a triable issue of material fact is a legal 

question that we review de novo. (Limited Stores, Inc. v. 

Franchise Tax Bd. (2007) 152 Cal.App.4th 1491, 1495–1496.) On 

review, we accept as true all facts and reasonable inferences 

shown by the losing party’s evidence and resolve evidentiary 

ambiguities in their favor. (Saelzler v. Advanced Group 400

(2001) 25 Cal.4th 763, 768.) But to establish a triable issue, the 

opposing party must do more than attack the credibility of the 

moving party’s evidence. (§ 437c, subd. (e).) A triable issue of 

material fact “can be created only by a conflict in the evidence.” 

(Lewis v. County of Sacramento (2001) 93 Cal.App.4th 107, 116.)

B.

The trustee argues there are three triable issues of 

material fact as to whether Orrick owed a duty to the LLCs that 

supports the malpractice and breach of fiduciary claims in this 

action.2

1 Undesignated statutory references are to the Code of Civil 

Procedure. 

2 Defendants ask us to reject these arguments outright for 

failure to raise them below. (California Restaurant Management 

Systems v. City of San Diego (2011) 195 Cal.App.4th 1581, 1593, 

fn. 7.) In the trial court, the trustee argued that the LLCs were 

represented by Orrick in the arbitration proceedings and “at 
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1.

First, the trustee argues there is a triable issue as to 

whether each LLC was a “de facto third party beneficiary” of the 

2011 written engagement agreement between Orrick and Li. The 

trustee suggests that this can be inferred from Orrick’s 

representation of TA Home in the first San Mateo action (from 

2011 to 2015) and the LLCs in the second San Mateo action (from 

February to March 2017) without written agreements. 

“California courts have uniformly settled upon the 

following rule: A lawyer has a duty to a nonclient third party only 

if the client’s intent to benefit that third party (in the way the 

third party asserts in their malpractice claim) is ‘clear,’ ‘certain’ 

and ‘undisputed.’ ” (Gordon v. Ervin Cohen & Jessup LLP (2023) 

88 Cal.App.5th 543, 556.) The trustee has presented no evidence 

showing that Li (or Orrick) intended to benefit the LLCs under 

the 2011 written engagement agreement.

Nor is it reasonable to infer such intent from Orrick’s other 

representations. “An issue of fact is not created by speculation, 

conjecture, imagination, or guesswork[.]” (Lewis v. County of 

Sacramento, supra, 93 Cal.App.4th at p. 116.) Here, the record 

shows that Orrick eventually formalized its agreement to 

represent TA Home in the first San Mateo action, and Li told 

Orrick he wanted to “defense” [sic] the LLCs in the second San 

Mateo action. This evidence supports the opposite inference: that 

the 2011 written engagement agreement did not cover the LLCs.

every step” of the first San Mateo action through its 

representation of Li. On appeal, the trustee now argues that 

Orrick represented the LLCs through its representation of TA 

Home. Even if arguably forfeited, the arguments also fail on 

their merits.
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2.

Next, the trustee argues there is a triable issue as to 

whether Orrick’s representation of TA Home created an 

“[i]mplied” attorney-client relationship between Orrick and the 

LLCs. (Fox v. Pollack (1986) 181 Cal.App.3d 954, 959 [“Except 

for those situations where an attorney is appointed by the court, 

the attorney-client relationship is created by some form of 

contract, express or implied, formal or informal”].)

The trustee contends that the San Mateo County Superior 

Court’s addition of the LLCs as debtors to the $72 million 

judgment is “prima facie evidence” of this implied relationship. 

Defendants challenge the evidentiary use of this ruling as 

hearsay (Evid. Code, § 1200), while the trustee responds that the 

ruling establishes facts via issue preclusion. 

We are not persuaded that the ruling creates a triable issue 

of material fact, let alone issue preclusion. (Samara v. Matar

(2018) 5 Cal.5th 322, 327 [issue preclusion applies after final 

adjudication of identical issue, actually litigated and necessarily 

decided, asserted against party to first suit or in privity with 

party].)

The San Mateo County Superior Court addressed a motion 

to treat the LLCs as alter egos of TA Home for the purpose of 

adding them as judgment debtors under section 187. To succeed 

on such a motion, judgment creditors must show by a 

preponderance of the evidence that “ ‘(1) the parties to be added 

as judgment debtors had control of the underlying litigation and 

were virtually represented in that proceeding; (2) there is such a 

unity of interest and ownership that the separate personalities of 

the entity and the owners no longer exist; and (3) an inequitable 

result will follow if the acts are treated as those of the entity 

alone.’ ” (Highland Springs Conference & Training Center v. City 

of Banning (2016) 244 Cal.App.4th 267, 280.) The San Mateo 

County Superior Court concluded Huang and Wuxi Luoshe had 
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demonstrated that the LLCs were “virtually represented” in the 

first action, and found that the LLCs were “sister companies” 

with TA Home “under common control and constitute a Single 

Enterprise owned and controlled by Anshan Li.” 

The trustee cites no authority to support her position that 

this ruling somehow demonstrates Orrick had an attorney-client 

relationship with the LLCs. Instead, the trustee relies on case 

law discussing conflicts of interest: specifically, that related 

corporations should not be treated as the same entity for conflict 

purposes unless one is the alter ego of the other. (Brooklyn Navy 

Yard Cogeneration Partners v. Superior Court (1997) 60 

Cal.App.4th 248, 257; Morrison Knudsen Corp. v. Hancock, 

Rothert & Bunshoft (1999) 69 Cal.App.4th 223, 240–241.) But a 

conflict of interest does not create an attorney-client relationship 

giving rise to a duty to preserve the rights of that entity in a 

court action. (See Morrison, supra, at p. 232 [“[A] conflict of 

interest ‘ “ . . . may arise from an attorney’s relationship with a 

nonclient” ’ ”].)

Nor are we otherwise persuaded that the San Mateo 

County Superior Court’s ruling supports such a position. The 

alter ego doctrine is an exception to the general rule that a 

corporation’s liability is limited to the corporation and does not 

extend to shareholders or other separate legal entities. (See 

Greenspan v. LADT LLC (2010) 191 Cal.App.4th 486, 510.) The 

doctrine is founded on equitable principles, and it may apply 

when limiting a corporation’s liability would be unfair to a 

creditor. (Ibid.) It does not supply evidence on the specific 

question here—whether a client (Li or TA Home) and an attorney 

(Orrick) agreed, expressly or impliedly, that the attorney would 

represent other legal entities (the LLCs) in a particular matter. 

Given the (apparent) risk that a court would later apply the alter 

ego doctrine to the LLCs, maybe Li should have hired Orrick to 
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represent the LLCs, too. But the alter ego doctrine tells us 

nothing about whether he did.

3.

Finally, the trustee argues there is a triable issue as to 

whether Orrick had an implied attorney-client relationship with 

the LLCs based on Orrick’s representations of Li and TA Home in 

the first San Mateo action, and the LLCs in the second San 

Mateo action. The trustee contends that these representations 

create an inference that Orrick “recognized a duty to look after” 

the interests of “all Li’s companies and entities, including [the] 

LLCs, as they would be affected by the litigation.” (See Guz v. 

Bechtel National, Inc. (2000) 24 Cal.4th 317, 336–337 [contract 

may be implied in fact contract from conduct and circumstances].)

As explained above, the trustee has not presented any 

evidence showing that the parties intended to create an implied 

attorney-client relationship between Orrick and the LLCs. The 

circumstances also contradict any such inference. The LLCs were 

not named in the first San Mateo action. The addition of the 

LLCs as judgment debtors occurred five years after Li and TA 

Home waived a jury trial in that action. Orrick’s brief 

representation of Li, TA Home, and the LLCs in the second San 

Mateo action also occurred years after the jury waiver.

In sum, we conclude that the trial court did not err in 

granting summary judgment. We need not reach the parties’ 

other issues.

DISPOSITION

The judgment is affirmed. Respondents are entitled to 

their costs on appeal. (Cal. Rules of Court, rule 8.278(a)(2).) 
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BURNS, J. 

WE CONCUR:

SIMONS, ACTING P.J.

CHOU, J.

Schoenmann v. Orrick, Herrington & Sutcliffe, LLP, et al. (A165552)