Lawyers Beware: California Court Applies Multi-Factor Test to Determine if LLC Attorney Inadvertently Formed an "Implied" Attorney-Client Relationship with Individual LLC Members
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Lawyers Beware: California Court Applies Multi-Factor Test to Determine if LLC Attorney Inadvertently Formed an “Implied” Attorney-Client Relationship with Individual LLC Members

Brief Summary A California appellate court recently extended the application of a longstanding "totality of the circumstances" legal analysis of whether a partnership’s attorney has formed an "implied" attorney-client relationship with an individual partner. Specifically, the court applied the test to the question of whether a limited liability company’s attorney had formed an "implied" attorney-client relationship with an individual member. Over two decades ago, Responsible Citizens v. Superior Court , 16 Cal.App.4th 1717 (1993) and Johnson v. Superior Court , 38 Cal.App.4th 463 (1995) articulated a multi-factor test for courts to assess whether there is sufficient evidence to support a finding that a partnership’s attorney formed an implied attorney-client relationship with individual partners. In the recently published Sprengel case , the Second Appellate District applied the same test in a legal malpractice action brought by one of two limited liability company members against the company’s attorneys, after the member was forced to defend against the company pertaining to her personal interest in a disputed copyright. The appellate court affirmed summary judgment in favor of the defendant attorneys, based on the "totality of the circumstances," including primarily that the adversarial nature of the relationship between the company’s attorneys and the […]

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