Filed 11/4/19 (unmodified opinion attached)

CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION SEVEN

JEAN SPRENGEL,

Plaintiff and Appellant,

v.

GREGORY ZBYLUT, et al.,

Defendants and Respondents.

B282129

(Los Angeles County

Super. Ct. No. BC535584)

ORDER MODIFYING

OPINION 

(NO CHANGE IN

JUDGMENT)

THE COURT:

IT IS ORDERED that the opinion filed September 10, 2019, 

modified on September 17, 2019 be corrected as follows:

1. Page 1 third paragraph, attorneys for Defendant and 

Respondent Gregory Zbylut, Miller Law Associates,

Zachary Mayer shall include Lisa D. Mallinson

____________________________________________________________

PERLUSS, P. J., ZELON, J., SEGAL, J.
Filed 9/10/19 (unmodified opn. attached); Ordered Published 10/7/19 (order attached);

Nonpub. opn. modified 9/17/19 (order attached)

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION SEVEN

JEAN SPRENGEL,

 Plaintiff and Appellant,

v.

GREGORY ZBYLUT, et al.,

 Defendants and Respondents.

 B282129

 (Los Angeles County

 Super. Ct. No. BC535584)

APPEAL from a judgment of the Superior Court of Los 

Angeles County, Elizabeth Allen White, Judge. Affirmed. 

Knez Law Group and Fred J. Knez, for Plaintiff and 

Appellant.

Miller Law Associates, Randall A. Miller, Lisa D. Mallinson 

and Amy A. Breyer for Defendant and Respondent Gregory A. 

Zbylut.

Nemecek & Cole, Michael McCarthy, Mark Schaeffer and 

Tammy Q. Gallardo, for Defendants and Respondents Vincent 

Cox and Leopold, Petrich & Smith.

__________________________
3

Jean Sprengel and Lanette Mohr established “Purposeful 

Press LLC” to market a guidebook that Sprengel had written

about the side effects of chemotherapy. After a management 

dispute arose between them, Sprengel filed an action to dissolve 

the company, and a separate action alleging that Mohr had 

infringed her copyrights to the guidebook. Mohr, acting in her 

representative capacity as the manager of Purposeful Press, 

retained Gregory Zbylut, Vincent Cox and Cox’s firm, Leopold, 

Petrich & Smith (LPS), to advise the company with respect to 

Sprengel’s copyright claims and various other issues. 

After the dissolution and copyright suits were resolved, 

Sprengel filed a malpractice action against Zbylut, Cox and LPS 

alleging they had violated their professional duties by 

undertaking representation of Purposeful Press without her 

consent, and rendering legal advice in the underlying lawsuits

that was adverse to her interests. 

Defendants filed motions for summary judgment arguing 

that their representation of Purposeful Press did not create an 

attorney-client relationship with Sprengel in her individual 

capacity. Sprengel, however, argued that defendants owed her a 

professional duty of care based on her status as a 50 percent 

shareholder of Purposeful Press. The trial court granted the 

motions, and entered judgments in defendants’ favor. We affirm.

FACTUAL BACKGROUND

A. Formation of Purposeful Press

In 2008, Jean Sprengel and Lanette Mohr agreed to form a 

limited liability company to adapt and market “Kaye’s Chemo 

Book,” a guidebook Sprengel had written about treating the side 
4

effects of chemotherapy.1 Sprengel and Mohr retained Kenneth 

Stream to assist them in forming the corporation, which they 

named Purposeful Press. 

Purposeful Press’s operating agreement stated that 

Sprengel and Mohr were each 50 percent owners of the company, 

and that neither of them had “the authority to bind the Company 

without the consent and/or approval of the other.” The 

agreement further provided that Sprengel would make an initial 

investment of $5,000 in the company, and that Mohr would 

provide “organizational and business planning services with an 

agreed-upon value of $5,000.” The agreement identified Mohr as 

“the sole manager of the company,” which authorized her to

“Keep the books and records of the Company; “Open bank 

accounts in the name of the Company”; “Execute instruments and 

documents”; and “do and perform all other acts as may be 

necessary or appropriate to the conduct of the Company’s 

Business.” Sprengel and Mohr were not entitled to any 

compensation from the company other than equal profit 

distributions.

Acting pursuant to her role as manager, Mohr negotiated a 

deal with Merck Pharmaceuticals to produce a commercialized 

version of “Kaye’s Chemo Book.” During 2008 and 2009, Mohr 

and Sprengel worked to transform the original work into two 

commercial guidebooks named the “ChemoCompanion Care 

Guide” and the “ChemoCompanion Pocket Guide” (collectively the 

ChemoCompanion guides).

1 This is the second appeal in this matter. In Sprengel v. 

Zbylut (2015) 241 Cal.App.4th 140, we affirmed the trial court’s 

order denying defendants’ special motion to strike brought 

pursuant to Code of Civil Procedure section 425.16.
5

B. Sprengel and Mohr’s Management Disputes

In December 2010, Mohr informed Sprengel she could not 

continue to serve as manager unless she began receiving a salary. 

In response, Sprengel told Mohr she was willing to take over 

managerial duties, and requested that Mohr turn over the 

corporate records. Mohr, however, retained the records, and

began to exclude Sprengel from discussions about Purposeful 

Press’s business operations. Sprengel monitored Purposeful 

Press’s checking account, and became concerned Mohr was using 

corporate funds to pay for personal expenses. That same month, 

Rosen contacted defendant Gregory Zbylut about representing 

Purposeful Press. According to Zbylut’s declaration, during their 

initial consultation, Mohr told him she and Sprengel were in a 

dispute regarding Mohr’s compensation and business 

expenditures. Mohr then retained Zbylut to prepare Purposeful 

Press’s tax filings and K-1 forms. 

In August 2011, Mohr and Rosen met with Vincent Cox to 

discuss representation of Purposeful Press regarding the 

company’s intellectual property. According to Cox’s declaration, 

Mohr told him that Sprengel had threatened to terminate 

Purposeful Press’s right to sell the ChemoCompanion guides. 

Cox and Mohr then spoke at length about the history of 

Purposeful Press, and the ChemoCompanion guides. Mohr and 

Cox signed a retainer agreement stating that Cox’s firm, Leopold 

Petrich & Smith (LPS), would provide Purposeful Press legal 

services regarding the “[c]onfirmation of client’s intellectual 

property rights in certain published and unpublished works.” 

Based on his discussions with Mohr and his review of Purposeful 

Press’s operation agreement, Cox formed the belief that Sprengel 

and Mohr had received “incorrect and incomplete legal advice by 
6

Mr. Stream” regarding the company’s ownership of the copyrights 

to the ChemoCompanion guides.

On September 16, 2011, Cox sent a letter to Sprengel’s 

personal attorney, Michael Kerbs, stating that Purposeful Press 

had retained LPS “in connection with its intellectual property 

rights.” The letter acknowledged the dispute between Sprengel 

and Mohr, and asserted that Purposeful Press had the right to 

continue marketing and selling the ChemoCompanion guides,

and develop other derivative works. The letter also cautioned 

Sprengel against pursuing legal action, asserting that any such 

litigation would be costly for herself and the company. 

Immediately after learning that Mohr had retained Zbylut

and LPS to represent Purposeful Press, Sprengel withdrew 

$162,000 from the company’s bank account, and deposited the 

funds into a trust account maintained by her attorney. Sprengel 

asserted that the transfer was necessary “to prevent future 

improper expenditure[s],” and notified Mohr she could seek 

repayment “for any appropriate business expenses.” 

Sprengel also sent Mohr a letter stating that she was 

revoking any implied copyright license she had granted to 

Purposeful Press to exploit “Kaye’s Chemo Guide.” Shortly after 

receiving the letter, Cox and LPS assisted Mohr in preparing a 

copyright registration for the ChemoCompanion guides that 

listed herself, Sprengel and Purposeful Press as claimants.

C. Sprengel’s Filing of the Dissolution and Copyright

Actions

In September 2011, Sprengel filed an involuntary 

dissolution action against Mohr and Purposeful Press. The 

complaint alleged Purposeful Press could no longer carry out its 

duties “in conformity with the . . . Operating Agreement” because 
7

the “management of the company [had become] deadlocked or 

subject to internal dissension.” 

Sprengel also filed a federal copyright infringement action 

against Mohr asserting that she owned the copyright to the Kay 

Chemo Guide and the derivative ChemoCompanion guides. The 

complaint alleged that although Sprengel had initially granted 

Purposeful Press an implied license to sell the original and 

derivative works, she had subsequently revoked the license. The 

complaint further alleged that Mohr, acting through Purposeful 

Press, had continued to market and sell the works, despite 

Sprengel’s revocation of the license. 

After the suits were filed, Cox and Mohr signed an 

amendment to the Purposeful Press retainer agreement that 

expanded the scope of LPS’s legal services to include pursuing a 

declaratory relief action regarding the company’s “rights in its 

intellectual property,” and filing claims against Sprengel for 

unlawfully transferring funds from Purposeful Press’s bank 

accounts.

D. The Federal Copyright Proceedings

1. Mohr’s motion to disqualify counsel for Purposeful 

Press 

In the copyright action, Mohr requested that Purposeful 

Press be joined in the proceedings as a necessary party. (See 

Fed. Rules Civ. Proc., rule 19). In response, Sprengel filed an 

amended complaint naming Purposeful Press as a nominal 

defendant, and retained Thomas Foley to serve as the “neutral” 

company attorney. Mohr filed a motion to disqualify Foley, 

asserting that Sprengel had no authority to select the company’s 

attorney. 
8

The district court granted the motion, concluding that 

because Sprengel and Mohr were both 50 percent owners of the 

company, conflict of interest principles precluded either of them 

from unilaterally selecting corporate counsel: “[U]nder California 

law an attorney-client relationship arguably has been formed 

between . . . Foley and Sprengel in her representative capacity as 

a member of the Company. Given the dispute between Sprengel 

and Mohr, it is not clear that . . . Foley as counsel for the 

Company adequately can represent the interests of all members 

in the Company – i.e., Sprengel and Mohr. . . . Foley presumably 

has been compensated by Sprengel. . . . It very well may be 

that . . . Foley would be able to maintain his independence of 

professional judgment. But his representation of the Company 

still would interfere with the attorney-client relationship between 

him and each of the parties in their representative capacity as a 

member of the Company. And, to the extent Mohr can be 

considered [] Foley’s ‘client’ (again, through her 50% membership 

interest in the Company), she does not consent to [] Foley’s 

representation.” (Sprengel v. Mohr (C.D. Cal., May 30, 2012, No. 

CV 11-8742 (2012 WL 12886207, at *2.) 

The court further explained that the company did not

appear to need counsel because it had no discernible “interest 

independent of its owners.” The court advised, however, that if “a 

legitimate need were to arise for the Company to . . . actively 

participate in this action, the parties [could] stipulate to the 

appointment of independent counsel.” 

2. The parties’ discovery disputes

Sprengel served Mohr with discovery requests seeking any 

communications Mohr had with Zbylut, Cox or LPS regarding 

Purposeful Press. Mohr objected to the requests based on 
9

attorney-client privilege. Sprengel brought a motion to compel 

arguing that Mohr was not authorized to invoke the company’s 

privilege against the other 50 percent owner of the company.

After reviewing California authorities, the district court

concluded that a corporation’s privilege “can be asserted or 

waived only by [current] management.” (Sprengel v. Mohr (C.D. 

Cal., Sept. 14, 2012, No. CV 11-8742) 2012 WL 12885115, at *4.) 

The court then analyzed who qualified as Purposeful Press’s 

management for purposes of asserting the privilege: “Although 

Mohr is the sole manager, the Operating Agreement . . . does not 

provide that Mohr will have total control of the Company of 

which she is only a 50 percent owner. On the contrary, the 

[Agreement] states that the business of the Company shall be 

managed by the members, and that no member has the authority 

to bind the Company without the approval of the other 

member. . . . In short, Sprengel is as much a controlling member

– is as much ‘current management’–of the Company as Mohr.” 

(Ibid.) 

The court further held that “where, as here, the LLC is 

owned and managed by two coequal members, neither can assert 

the LLC’s privilege against the other. Accordingly, Mohr cannot 

assert the attorney-client privilege on behalf of the Company here 

against Sprengel.” 

3. The district court’s ruling in the copyright action

In February 2013, the district court issued its findings of 

fact and conclusions of law in the copyright action. The court 

found Sprengel owned the copyrights to both the Kay Chemo

Guide and the ChemoCompanion guides. The court further 

found, however, that Sprengel had granted Mohr and Purposeful 

Press an implied license to exploit those copyrights, which 
10

provided a complete defense to Sprengel’s infringement claims. 

The court also found that Mohr and Purposeful Press needed 

Sprengel’s authorization to “develop [any] additional derivative 

works that incorporate protected elements of the [original 

works].”

E. The Current Malpractice Action

1. Summary of the Complaint

In September 2013, Sprengel filed the current lawsuit 

against Zbylut, Cox and LPS. The complaint alleged that when 

Mohr retained the defendants to represent Purposeful Press,

there was an understanding that they would “provide legal 

services for the benefit of Mohr, and to the prejudice of 

[Sprengel], under the pretext that the legal services were for the 

benefit of the [c]ompany.” The complaint further alleged that 

defendants had “solicited payment from the [c]ompany for their 

legal services in conjunction with the [d]issolution [c]ase and the 

[c]opyright [c]ase without [Sprengel’s] knowledge or consent. The 

legal services provided by [d]efendants in the [d]issolution [c]ase 

and the [c]opyright [c]ase were primarily devoted to the best 

interests of Mohr and assisting [Mohr’s attorney Rosen] in his 

representation of Mohr in those cases, at the [c]ompany’s 

expense.” 

Sprengel alleged four causes of action: (1) professional 

negligence (malpractice); (2) breach of fiduciary duties; (3) 

constructive fraud; and (4) “common count for money had and 

received.” In the negligence claim, Sprengel asserted that “[b]y 

undertaking to provide legal services and soliciting payment from 

[Purposeful Press] in the [dissolution and copyright cases],

[d]efendants became obligated to [Sprengel] to exercise 

reasonable care and skill with the standard of care for 
11

attorneys. . . .” She further alleged defendants had breached 

those professional obligations by “fail[ing] to communicate with 

[Sprengel] and inform [her] of material facts and information 

relating to the legal services provided and charged to [Purposeful 

Press],” and “violat[ing] Rules of Professional Responsibility 

governing . . . conflicts of interest including the failure to obtain 

written waivers from [Sprengel] and Mohr.” 

Sprengel’s claim for breach of fiduciary duty similarly 

alleged that “by undertaking to provide legal services regarding 

the affairs of [Purposeful Press] including the disputes between 

the [c]ompany’s two 50 percent owners and causing the 

[c]ompany to pay for those legal services, a fiduciary relationship 

existed between [Sprengel] and [d]efendants such that 

[d]efendants owed to [Sprengel] the duties of honesty, good faith, 

undivided loyalty and full disclosure of material facts . . . and 

were obligated to comply with all of the Rules of Professional 

Conduct. . . .” Defendants allegedly breached their fiduciary 

duties by “concealing a conflict of interest,” failing to obtain 

Sprengel’s consent for payment of legal services and charging 

Purposeful Press for legal services “calculated to benefit the 

interests of Mohr and prejudice [Sprengel].” 

Sprengel’s third and fourth claims for constructive fraud 

and “common count for money had and received” were similarly

based on defendants’ alleged breach of professional duties they 

owed to Sprengel. 

2. The summary judgment proceedings

a. The defendants’ motions and supporting evidence

Zbylut and the LPS defendants (Cox and LPS) filed motions

for summary judgment arguing that there were two reasons

Sprengel’s claims failed as a matter of law. First, the LPS 
12

defendants contended that Sprengel lacked standing to pursue 

her claims in a direct action because Purposeful Press “[wa]s the 

real party in interest.” More specifically, the LPS defendants 

asserted the allegations in Sprengel’s complaint showed she was 

seeking reimbursement of the funds Purposeful Press had paid to 

defendants, claiming that those fees should be disgorged because: 

(1) she had not consented to the legal services, as was required 

under the operating agreement; and (2) the services were

intended to benefit Mohr, rather than the company. According to 

defendants, these claims had to be brought as a derivative action

rather than a direct action because they effectively sought 

recovery of the company’s assets.

Second, both defendants argued that “[a]ll of Sprengel’s 

claims” were predicated on “the existence of an attorney-client 

relationship between her and [defendants].” Defendants 

asserted, however, that under “California law[,] . . . an attorney 

for a corporate entity does not owe a duty of care to the 

company’s members by virtue of representing the company.” 

Thus, Sprengel’s status as a 50 percent owner of Purposeful Press

was, standing alone, insufficient to establish an attorney-client 

relationship.

Zbylut, Cox and Mohr provided declarations in support of 

the motions clarifying that Mohr had retained the defendants to 

represent Purposeful Press, and retained separate counsel 

(Rosen) to represent her in her individual capacity. Zbylut and 

Cox’s declarations described the nature of the work they had 

performed for the company. Zbylut asserted his work had 

consisted solely of tax preparation services, while Cox stated that

he had provided advice regarding Purposeful Press’s copyright
13

interests to the chemotherapy guidebooks. Both defendants 

asserted they had never spoken directly with Sprengel.

b. Sprengel’s opposition and supporting evidence

Sprengel’s opposition argued that, by undertaking 

representation of a corporate entity comprised of two 50 percent 

owners, the defendants necessarily entered into an implied

attorney-client relationship with each of the owners in their 

individual capacities. Sprengel further asserted that as a result 

of her implied attorney-client relationship with defendants, they

were required to obtain her consent prior to performing any legal 

services on behalf of Purposeful Press, and were precluded from 

taking any legal positions that were adverse to her personal

interests. Sprengel contended defendants had violated those 

obligations by accepting payment from Purposeful Press without 

obtaining her consent, and advising Mohr with respect to 

Sprengel’s claims in the dissolution and copyright actions.2 

Sprengel did not directly address the LPS defendants’ 

contention that her claims were derivative in nature, meaning 

she lacked standing to assert her claims in a direct action. 

Although Sprengel argued she had “standing” based on her 

implied attorney-client relationship with the defendants, she did 

not explain why her claims were direct, rather than derivative, 

nor did she identify any harms she had suffered in her individual 

capacity. 

2 Sprengel’s opposition also argued the defendants were 

collaterally estopped from denying the existence of an attorneyclient relationship based on the district court’s orders in the 

federal copyright action. The trial court rejected Sprengel’s 

estoppel argument, and Sprengel has not challenged that portion 

of the ruling in this appeal.
14

In support of her opposition, Sprengel provided 

declarations asserting that Mohr had not obtained her consent 

prior to hiring defendants to represent Purposeful Press, and that 

she had never spoken with defendants regarding their 

representation of the company. Sprengel further asserted that

after learning of defendants’ retention, she transferred 

Purposeful Press’s funds out of its bank account so that no 

further payments could be made to them. 

3. The trial court’s ruling 

In February 2017, the court issued orders granting 

defendants’ motions for summary judgment. The court agreed 

that Sprengel lacked standing because her claims were 

derivative, rather than individual, in nature. In its analysis, the 

court explained that Sprengel’s claims were predicated on the 

theory that “the use of Company funds to pay for Defendants’ 

legal services was, in essence, using Plaintiff’s money to pay for 

such services.” The court further explained that the members of 

a limited liability company do not hold any “direct ownership 

interest in the company’s assets, [and are not] . . . directly injured 

when the company is improperly deprived of those assets.” Thus, 

the court continued, “the use of Company funds . . . to pay for 

Defendants’ legal services . . . did not cause Plaintiff direct

financial injury. Instead, such injury would be derivative. . . . [¶] 

. . . [¶] As such, Plaintiff does not have standing to assert any of 

the causes of action as [a] direct claim.” 

The court also found Sprengel had failed to establish any 

triable issue of fact regarding the existence of an attorney-client 

relationship between herself and defendants. The court 

concluded that under California law, defendants’ representation 
15

of Purposeful Press did not, standing alone, give rise to a 

professional duty of care toward Sprengel. 

DISCUSSION

Sprengel argues the trial court erred in concluding that she 

lacked standing to bring her claims as a direct action, and that

she failed to identify any evidence that would support a finding of 

an attorney-client relationship between herself and defendants. 

A. Summary Judgment and Standard of Review 

“‘Summary judgment is appropriate “if all the papers 

submitted show that there is no triable issue as to any material 

fact and that the moving party is entitled to a judgment as a 

matter of law.” [Citation.]. . . . [¶] Our review is de novo. 

[Citation.] We liberally construe the opposing party’s evidence 

and resolve all doubts in favor of the opposing party. [Citation.] 

We consider all evidence in the moving and opposition papers, 

except that to which objections were properly sustained.’ 

[Citation.]” (Brown v. Goldstein (2019) 34 Cal.App.5th 418; 246 

Cal.Rptr.3d 161, 171-172.)

B. Sprengel Does Not Dispute She Lacks Standing to 

Seek Reimbursement of Purposeful Press’s Funds 

The trial court concluded Sprengel was required to bring 

her claims as a derivative, rather than a direct, action because 

the allegations in her complaint demonstrated she was seeking 

redress for injuries to Purposeful Press, rather than for any 

injury she had suffered in her individual capacity. More 

specifically, the Court found Sprengel was seeking 

reimbursement of the fees Purposeful Press had paid to 

defendants for their legal services. 
16

“Because a corporation exists as a separate legal entity, the 

shareholders have no direct cause of action or right of recovery 

against those who have harmed it. The shareholders may, 

however, bring a derivative suit to enforce the corporation’s 

rights and redress its injuries when the [corporation] fails or 

refuses to do so.” (Grosset v. Wenaas (2008) 42 Cal.4th 1100, 

1108.) “An action is deemed derivative ‘“if the gravamen of the 

complaint is injury to the corporation, or to the whole body of its 

stock and property without any severance or distribution among 

individual holders, or it seeks to recover assets for the 

corporation or to prevent the dissipation of its assets.”’ 

[Citation.]” (Ibid. [fn. Omitted].) “A personal claim, in contrast, 

asserts a right against the corporation which the shareholder 

possesses as an individual apart from the corporate entity: ‘If the 

injury is not incidental to an injury to the corporation, an 

individual cause of action exists.’ [Citation.]” (Denevi v. LGCC, 

LLC (2004) 121 Cal.App.4th 1211, 1222 (Denevi).) “[T]he 

principles of derivative lawsuits applicable to corporations 

likewise apply to a limited liability compan[ies].” (PacLink 

Communications Intern., Inc. v. Superior Court (2001) 90 

Cal.App.4th 958, 963 (PacLink).)

Sprengel’s appellate briefing does not challenge the court’s 

conclusion that she cannot bring a direct action to recover the 

corporate funds that Purposeful Press paid to defendants for 

their legal services. This apparent concession is well taken. 

Claims seeking to recover corporate assets from a third party are 

generally deemed to be derivative in nature. (PacLink, supra, 90 

Cal.App.4th at p. 964 [claim alleging LLC had been “improperly 

deprived of . . . assets,” causing a “diminution in the value of 

[individual member’s] interest” was derivative]; see also Marsh et 
17

al., Marsh’s Cal. Corp. Law (4th ed. 2000) § 15.11[A][1], pp. 15-

61, 64.) Thus, to the extent defendants unlawfully solicited and 

accepted payment from Purposeful Press for legal services that 

were not authorized by the company’s management, or were

otherwise intended to benefit Mohr in her personal capacity, a 

derivative action is the appropriate remedy. 

Sprengel disputes, however, the trial court’s finding that

the only form of injury she has alleged in this case consists of 

“fraudulent use of Company funds for [payment of legal services 

intended for] Mohr’s benefit.” According to Sprengel, her claims 

also allege defendants breached their duty of loyalty to her by 

providing advice and counsel to Mohr regarding the company’s 

use of Sprengel’s copyrights to the chemotherapy guidebooks, 

which forced Sprengel to expend funds to litigate the copyright

and dissolution actions. Stated more simply, Sprengel contends 

the legal services defendants provided to Mohr forced her to incur 

expenses to defend her personal copyrights. 

Although Sprengel’s complaint does not expressly identify

the expenses she incurred in litigating the underlying actions as 

a form of damages, those claims are fairly implied from her 

pleadings and the materials she submitted in opposition to the 

motions for summary judgment. Sprengel’s complaint repeatedly 

asserts that, by providing legal services “in conjunction with the 

[d]issolution [c]ase and the [c]opyright [c]ase,” defendants 

breached their duty of loyalty to Sprengel, and violated their duty 

to avoid conflicts of interest. The declarations Sprengel provided 

in the summary judgment proceedings further assert that, as a 

result of defendants’ conduct, she was “forced to retain attorneys 

and incur fees and costs.” These allegations make clear that 
18

Sprengel is seeking redress for the fees that defendants allegedly 

caused her to incur in defending her copyrights.

It is also clear that this form of injury is personal, rather 

than derivative, because it involves rights that Sprengel allegedly 

possessed as “an individual apart from the corporate entity.” 

(Denevi, supra, 121 Cal.App.4th at p. 1222.) Specifically, she

alleges that as a result of the defendants’ breach of their 

professional duties, she was forced to defend copyrights she 

owned in her personal capacity. 

C. Sprengel Has Presented No Evidence that Would 

Support a Finding of an Implied Attorney-Client 

Relationship 

Sprengel acknowledges that, to prevail on the aspects of 

her claims that she has standing to pursue, she must establish 

the existence of an attorney-client relationship between herself 

and defendants. She further concedes that she never entered into 

an express agreement with any of the defendants. She contends, 

however, that an “implied” attorney-client relationship existed 

between herself and defendants based on her status as a 50 

percent owner of Purposeful Press. 

The existence of an attorney-client relationship involves a 

question of law that we review de novo. However, any conflict in 

the evidence of an attorney-client relationship is a question of 

fact for the trial court to decide, which we uphold if supported by 

substantial evidence. (See Responsible Citizens v. Superior Court

(1993) 16 Cal.App.4th 1717, 1733 (Responsible Citizens); Meehan 

v. Hopps (1956) 144 Cal.App.2d 284, 287 (Meehan.)
19

1. Summary of applicable law

a. General rule of no duty to shareholders

Generally, when “representing a corporation, an attorney’s 

client is the corporate entity, not individual shareholders or 

directors, and the individual shareholders or directors cannot 

presume that corporate counsel is protecting their interests.” (La 

Jolla Cove Motel & Hotel Apartments, Inc. v. Superior Court

(2004) 121 Cal.App.4th 773, 784.) “An attorney representing a 

corporation does not become the representative of its stockholders 

merely because the attorney’s actions on behalf of the corporation 

also benefit the stockholders; as attorney for the corporation, 

counsel’s first duty is to the corporation.” (Skarbrevik v. Cohen, 

England & Whitfield (1991) 231 Cal.App.3d 692, 703

(Skarbrevik); see also Meehan, supra, 144 Cal.App.2d at p. 290 

[“The attorney for a corporation represents the corporation. . . . 

He in nowise represents the officers personally”]).) 

These principles are reflected in California’s Rules of 

Professional Conduct, former Rule 3-600, which governed the 

representation of an organization at the time the events at issue 

in this case occurred. (See Cal. Rules of Prof. Conduct, former 

Rule 3-600 [effective September 14, 1992 to October 31, 2018].)3

Subdivision (A) of former Rule 3-600 provided, in relevant part: 

“In representing an organization, a [lawyer] shall conform his or 

her representation to the concept that the client is the 

3 During the pendency of this appeal, the Supreme Court 

approved new Rules of Professional Conduct. The current rule 

governing the representation of an organization, Rule 1.13, 

contains language that is substantially identical to the 

subdivisions of former Rule 3-600 that we cite here. (See Cal. 

Rules of Prof. Conduct, Rule 1.13(a) and (f).) 
20

organization itself . . . .” Subdivision (D) further provided that, 

“In dealing with an organization’s directors, officers, employees, 

members, shareholders, or other constituents, a [lawyer] shall 

explain the identity of the client for whom the [lawyer] acts, 

whenever it is or becomes apparent that the organization’s 

interests are or may become adverse to those of the constituent(s) 

with whom the [lawyer] is dealing.”

In Skarbrevik, supra, 231 Cal.App.3d 692, the court applied 

these principles in concluding that a corporate attorney owed no 

professional duty to a minority shareholder who claimed that the 

value of his shares had been fraudulently diluted. The evidence 

at trial showed the majority shareholders had initially agreed to 

purchase plaintiff’s 25 percent share of the company for $500,000. 

Several months later, however, the majority shareholders refused 

to make the payment, asserting that the company’s attorney had 

advised them they were not legally required to make the 

payment. The attorney then advised the majority shareholders 

with respect to a stock issuance plan that substantially diluted 

the value of plaintiff’s ownership interest. A jury found the 

attorney and his law firm had breached their professional duties 

to the plaintiff.

The appellate court reversed, explaining that a “corporate 

counsel’s direct duty is to the client corporation, not to the 

shareholders individually, even though the legal advice rendered 

to the corporation may affect the shareholders.” (Skarbrevik, 

supra, 231 Cal.App.3d at p. 704.) The court acknowledged case

law from other jurisdictions holding that an attorney for a 

closely-held corporation may owe professional duties to individual 

owners with whom he or she has had “close interaction.” (Id. at 

p. 705.)
21

The court concluded, however, that no such interaction had 

occurred in the current case. Instead, the evidence showed the 

plaintiff had “no contact” with the corporate attorney, and had no

“basis . . . to place faith, confidence or trust in [the attorney] to 

protect his interests . . ., particularly after he was told . . . [the] 

attorney[ had] advi[sed the majority shareholders] . . . not to pay 

him for his shares.” (Skarbrevik, supra, 231 Cal.App.3d at 

p. 705.) The court further explained that “[t]he fact that the 

[attorney] could have foreseen the adverse consequences of his 

advice and its impact on plaintiff [was] not sufficient justification 

for fixing liability on him to a nonclient shareholder under these 

circumstances.” (Id. at p. 707.)

b. Case law addressing implied attorney-client 

relationships in the context of partnerships

In Responsible Citizens, supra, 16 Cal.App.4th 1717, the 

court held that, at least under some circumstances, an attorney’s

representation of a partnership may create an implied attorneyclient relationship with the individual partners. The defendant

in Responsible Citizens sought to disqualify the plaintiff’s 

attorney because the attorney had previously represented the

defendant’s partnership in an unrelated matter. The trial court 

granted the disqualification order “based on . . . the legal 

conclusion that representation of a partnership automatically 

creates an attorney-client relationship with the individual 

partners.” (Id. at p. 1721.) 

The appellate court reversed, concluding that the trial 

court had erred in finding that an attorney’s representation of a 

partnership “necessarily includes representation of the individual 

partners.” (Responsible Citizens, supra, 16 Cal.App.4th at 

p. 1735.) The court further held, however, that an attorney for a 
22

partnership may, through his or her conduct, enter into an 

“implied” attorney-client relationship to represent the interests of 

the individual partners. (Id. at p. 1732.) The court set forth a 

“[non]exhaustive” list of “factors which might support, or 

undercut, implication of an attorney-client relationship with an 

individual partner in any particular case. The type and size of 

the partnership obviously have a bearing. . . . So do the nature 

and scope of the attorney’s engagement by the partnership. The 

kind and extent of contacts, if any, between the attorney and the 

individual partner might be important factors. The same is true

as to the attorney’s access to information (e.g., partnership 

financial information) relating to the individual partner’s 

interests.” (Id. at p. 1733.) 

The court emphasized that “primary attention should be 

given to whether the totality of the circumstances, including the 

parties’ conduct, implies an agreement by the partnership 

attorney not to accept other representations adverse to the 

individual partner’s personal interests.” (Responsible Citizens, 

supra, 16 Cal.App.4th at p. 1733.) The court remanded the 

matter with directions that the trial court weigh those factors in 

assessing whether an implied attorney-client relationship had 

been formed. 

In Johnson v. Superior Court (1995) 38 Cal.App.4th 463 

(Johnson), the court applied Responsible Citizens’s multi-factor 

test in assessing whether there was sufficient evidence to support 

a finding that the attorney for a partnership had an implied 

attorney-client relationship with each of the partners. The 

partnership at issue in Johnson owned a single asset that 

consisted of a lease to an industrial park. During the lease

period, the general partner, acting on behalf of the partnership,
23

entered into an option to purchase the property from the

landowner on terms that were beneficial to the partnership. 

Shortly thereafter, the general partner sent the limited partners 

a letter stating that they needed to contribute additional capital

to the partnership, or, alternatively, sell their interest back to the 

partnership. The letter did not disclose the partnership’s option 

agreement with the landowner. 

The general partner retained the defendant attorney to 

advise him and the partnership whether any additional 

disclosures had to be made to the limited partners regarding the 

option to purchase the land. The attorney drafted a second letter 

informing the limited partners that they were required to either 

provide additional capital, or accept the general partner’s buyout 

proposal. The general partner sent the letter out on his 

letterhead; there was no indication that the letter had been 

prepared or reviewed by the defendant. The limited partners

elected to sell their partnership interests back to the general 

partner; the general partner then executed the option to purchase

the property, and subsequently resold the property for a 

substantial profit. 

The limited partners filed suit against the general partner 

and the attorney for failing to disclose the land purchase 

agreement. The attorney moved for summary judgment, arguing

that he had been retained to represent the general partner and 

partnership, and had no attorney-client relationship with the 

limited partners. The trial court granted the motion, noting that 

there was no express agreement to represent the plaintiffs, and 

that plaintiffs had never had ever had any contact with the 

defendant, or otherwise relied on his advice. 
24

The appellate court reversed, concluding there were triable 

issues of fact whether the plaintiffs and defendant had an 

implied attorney-client relationship. The court acknowledged 

that several of the factors set forth in Responsible Citizens

weighed against an attorney-client relationship. Specifically, the 

evidence showed the limited partners had not had any contact 

with the attorney, they had not directly relied on the attorney’s 

advice and had no prior relationship with him. Moreover, there 

was no evidence the attorney had access to any confidential 

information regarding the partner’s individual finances, or their 

desire to remain in the partnership. 

The court concluded, however, that other factors 

nonetheless raised a triable issue of fact regarding the existence 

of an attorney-client relationship. First, the attorney knew the 

limited partners had no knowledge of the partnership’s option to 

purchase the property. Second, the attorney also knew the

limited partners were likely to rely on the letter he had drafted, 

and that the omission of material facts might affect their decision

whether to sell their partnership interest. Third, the court found

that the “primary factor” weighing in favor of an attorney-client 

relationship consisted of “the nature of representation that [the 

attorney] had rendered” to the partnership. (Johnson, supra, 38 

Cal.App.4th at p. 478.) The court explained that the attorney

had specifically been “retained to represent the partnership 

interests” with respect to the land sale. (Ibid.) The evidence 

indicated, however, that the attorney’s actions were intended to 

benefit the general partner at the expense of the limited 

partners. As stated by the court, “This is a case, we are 

convinced, in which the undertaking by [the attorney] to 

represent the partnership, generally, imposed upon him an 
25

obligation of loyalty to the partnership and to all partners in 

terms of their entitlement to benefits from the partnership. . . .”

(Id. at p. 479.)

2. Sprengel has presented no evidence that would 

support the finding of an implied attorney-client 

relationship

Sprengel argues that, under the factors and analysis set 

forth in Responsible Citizens, there are triable issues of fact 

whether she had an implied attorney-client relationship with 

defendants based on their representation of Purposeful Press. 

Sprengel’s argument relies primarily on the first factor set forth 

in Responsible Citizens, effectively asserting that defendants’ 

decision to undertake representation of an LLC that was owned 

by two 50 percent shareholders necessarily gave rise to an 

individual client-attorney relationship with each of the two 

shareholders.

Defendants do not challenge Responsible Citizens’s and

Johnson’s holdings that an implied attorney-client relationship 

may be formed between the attorney for a corporate entity and 

the entities’ individual constituents.4 They argue, however, that 

applying the factors set forth in those decisions, Sprengel has 

produced no evidence that would support a finding of an 

attorney-client relationship between herself and defendants. We 

agree. 

4 Although Responsible Citizens involved a partnership, the 

decision does not contain any language limiting its holding to 

partnerships, and substantial portions of the decision analyze

corporations and partnerships interchangeably. (Responsible 

Citizens, supra, 16 Cal.App.4th at pp. 1726-1729.)
26

As Sprengel correctly notes, Purposeful Press’s status as an 

entity comprised of only two 50 percent shareholders is a factor 

that weighs in support of an attorney-client relationship. (See 

also Johnson, supra, 38 at p. 476 [“The argument is that 

representation of [an entity with] few members may suggest an 

individual representation of the members”]; see also Woods v. 

Superior Court (1983) 149 Cal.App.3d 931, 936 [“the attorney of a 

. . . business [owned by a husband and a wife] . . . should not 

represent one owner against the other in a dissolution action”].) 

Several other factors, however, clearly “undercut the implication” 

of an implied attorney-client relationship between Sprengel and 

defendant. (Responsible Citizens, supra, 16 Cal.App.4th at 

p. 1733.) 

First, it is important to clarify the nature of the implied 

attorney-client relationship that Sprengel alleges she formed 

with defendants. Unlike in Johnson, Sprengel is not merely 

asserting that, as attorneys for Purposeful Press, defendants had 

a professional duty to protect the individual interests and 

benefits she held in Purposeful Press as a shareholder. (Compare 

Johnson, supra, 38 Cal.App.4th at p. 479 [“the undertaking . . . to 

represent the partnership, generally, imposed [the attorney] . . . 

an obligation of loyalty to . . . all partners in terms of their 

entitlement to benefits from the partnership. . . .”].) Indeed, 

aside from the derivative claims that seek recovery of the 

corporate funds defendants received from Purposeful Press, 

which Sprengel lacks standing to pursue (see ante, pp. 14-16), 

Sprengel has not identified any harm that defendants’ 

representation of Purposeful Press is alleged to have caused to 

her in her representative capacity as a shareholder. 
27

She does not assert, for example, that defendants aided 

Mohr in devaluing her share of the company, or otherwise 

negatively affected any benefits she derived from Purposeful 

Press.5 Instead, Sprengel alleges defendants caused harm to

personal interests that she held separate from the corporation, 

and that were adverse to the corporation. Specifically, she 

alleges defendants breached their duty of loyalty by assisting 

Mohr and Purposeful Press in claiming ownership over

copyrights that Sprengel owned in her personal capacity, causing

her to expend funds to defend those personally-held copyrights. 

Sprengel has cited no authority suggesting that, standing alone,

an attorney’s representation of a closely-held corporation gives 

rise to professional duties to the individual shareholders with 

respect to personally-held rights that are both separate from, and 

adverse to, the corporation itself. 

Second, even if there were circumstances under which a 

corporate attorney might owe such a duty to individual 

shareholders, no such circumstances are present here. When 

5 Sprengel’s appellate briefing contends there is evidence 

that defendants aided Mohr in attempting to “force” Sprengel out 

of the company. The only evidence she cites in support of that 

claim, however, is an email from Zbylut to Mohr’s personal 

attorney confirming that the operating agreement contained no 

mechanism that permitted Sprengel or Mohr to unilaterally eject 

the other from the company. The email proposed, however, that 

Mohr offer Sprengel the corporation’s existing funds, then 

$162,000, in exchange for Sprengel’s ownership interests in the 

company and the copyrights. The contents of the email make 

clear Zbylut was simply proposing a potential settlement offer 

that could resolve the management dispute. There is no evidence 

this proposal was ever acted upon, and Sprengel has not set forth 

any injury she suffered as a result of the proposal. 
28

assessing the existence of an implied attorney-client relationship

between a corporate attorney and the entity’s individual 

members, the key inquiry is whether “the totality of the 

circumstances” implies an agreement that the corporate attorney 

will not act adversely to the individual shareholder’s interests

with respect to the issues in dispute. (Responsible Citizens, 

supra, 16 Cal.App.4th at p. 1733.) Stated differently, we must 

assess whether the parties conducted themselves in a way that 

would reasonably cause a shareholder to believe the attorney 

would protect the shareholder’s individual interests. (See 

Skarbrevik, supra, 231 Cal.App.3d at p. 707.) 

The evidence in this case demonstrates that Sprengel never 

believed, or had any reason to believe, defendants were acting to 

protect her personal interests, or had impliedly agreed to avoid 

representations that were adverse to those interests. Shortly 

after the LPS defendants agreed to represent Purposeful Press, 

they sent Sprengel’s attorney a letter asserting that she was not 

the sole owner of the copyrights, and that she had no authority to 

unilaterally withdraw the company’s right to publish the 

guidebooks. The attorneys made clear to Sprengel from the 

outset that their representation to her was adverse in nature.

Moreover, Sprengel’s declarations assert that upon

learning Mohr had retained defendants to represent Purposeful 

Press, she immediately transferred the company’s assets out of 

its bank account to block any further payments to defendants. 

She then filed multiple lawsuits against Mohr in which she was 

represented by her own attorney. Sprengel’s declarations confirm 

she never spoke with defendants directly, never relied on their 

legal advice and never shared any confidential information with 
29

them. Indeed, to the extent she had any interactions with 

defendants, those interactions were adversarial in nature. 

This is simply not a case where the parties’ conduct could 

be deemed to imply an agreement that defendants would not 

undertake representation that was adverse to Sprengel. The 

adversarial nature of their relationship was clear from the time 

they were retained by Purposeful Press. 

DISPOSITION

The judgment is affirmed. Respondents shall recover their 

costs on appeal.

ZELON, J.

We concur:

PERLUSS, P. J.

SEGAL, J.
Filed 9/17/19 (order modifying nonpub. opn.)

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION SEVEN

JEAN SPRENGEL,

Plaintiff and Appellant,

v.

GREGORY ZBYLUT, et al.,

Defendants and Respondents.

B282129

(Los Angeles County

Super. Ct. No. BC535584)

ORDER MODIFYING

OPINION 

(NO CHANGE IN

JUDGMENT)

THE COURT:

IT IS ORDERED that the opinion filed September 10, 2019 

be corrected as follows:

2. Page 1 third paragraph, attorneys for Defendant and 

Respondent Gregory Zbylut, Miller Law Associates, 

Zachary Mayer shall replace Lisa D. Mallison.

3. Page 1 fourth paragraph, attorney Tammy Q. Gallardo 

of Nemecek & Cole shall be corrected to read Tommy Q. 

Gallardo.

____________________________________________________________

PERLUSS, P. J., ZELON, J., SEGAL, J.
Filed 10/7/19

CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION SEVEN

JEAN SPRENGEL,

 Plaintiff and Appellant,

v.

GREGORY ZBYLUT, et al.,

 Defendants and Respondents.

B282129

(Los Angeles County

Super. Ct. No. BC535584)

ORDER CERTIFIYING

OPINION FOR 

PUBLICATION

 

THE COURT:

The opinion in this case filed September 10, 2019 and 

modified on September 17, 2019 was not certified for publication. 

It appearing the opinion meets the standards for publication 

specified in California Rules of Court, rule 8.1105(c), the request 

by a non-party pursuant to California Rules of Court, rule 

8.1120(a) for publication is granted. 

IT IS HEREBY CERTIFIED that the opinion meets the 

standards for publication specified in California Rules of Court, 

rule 8.1105(c); and 
2

ORDERED that the words “Not to be Published in the 

Official Reports” appearing on page 1 of said opinion be deleted 

and the opinion herein be published in the Official Reports. 

____________________________________________________________

PERLUSS, P. J., ZELON, J., SEGAL, J.