In Re: Koi Design LLC v. Marron Lawyers, Apc

FOR PUBLICATION UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT KOI DESIGN LLC, No. 23-55704 Plaintiff-Appellant, D.C. No.: 2:19-cv-07154- v. TJH MARRON LAWYERS, APC, OPINION Defendant-Appellee, and A. DOUGLAS MASTROIANNI, DBA Mastroianni Law Firm; BLOOM FIRM, APC; DOES, 1 through 25, Defendants. Appeal from the United States District Court for the Central District of California Terry J. Hatter, Jr., District Judge, Presiding Argued and Submitted October 7, 2025 Pasadena, California 2 KOI DESIGN LLC V. MARRON LAWYERS, APC Filed August 6, 2026 Before: Ronald Lee Gilman,* Kim McLane Wardlaw, and Lucy H. Koh, Circuit Judges. Opinion by Judge Koh; Partial Concurrence and Partial Dissent by Judge Gilman SUMMARY** Professional Liability The panel reversed the district court’s grant of summary judgment in favor of Marron Lawyers, APC, in a legal malpractice action brought by Koi Design, LLC, and remanded for further proceedings. Koi sued Marron for breach of fiduciary duty, legal malpractice, and negligent supervision under California law, alleging that an associate previously employed by Marron, A. Douglas Mastroianni, grossly mishandled a trademark infringement litigation matter between Koi and Strategic Partners, Inc. (“SPI”), which ended with the district court granting SPI default judgment and treble damages, eventually leading to Koi’s bankruptcy. * The Honorable Ronald Lee Gilman, United States Circuit Judge for the U.S. Court of Appeals for the Sixth Circuit, sitting by designation. ** This summary constitutes no part of the opinion of the court. It has been prepared by court staff for the convenience of the reader.  KOI DESIGN LLC V. MARRON LAWYERS, APC 3 First, the panel held that the district court did not violate Fed. R. Civ. P. 56(f)(2) because the district court did not grant summary judgment in favor of Marron on a ground not raised by the parties without giving Koi adequate notice. Second, the panel held that the district court erred in granting Marron summary judgment. The panel held that there were genuine disputes of material fact as to whether Marron breached its duties to Koi, an essential element of Koi’s legal malpractice and breach of fiduciary duty claims. Breaches of the California Rules of Professional Conduct may be used to prove that a lawyer has breached his fiduciary duties or has breached the standard of care for a legal malpractice claim. Marron owed two duties to Koi: first, a duty to disclose to Koi material facts and significant developments in the SPI litigation; and second, an obligation to adequately supervise its employees. The panel concluded that, construing the facts in the light most favorable to Koi and drawing all reasonable inferences in Koi’s favor, a reasonable jury could find that Marron breached its duty to disclose and its duty to supervise. The panel also held that there were genuine disputes of material fact as to whether Marron’s conduct caused Koi harm, a necessary element for all three of Koi’s claims. The parties agreed that substantial factor causation applied to Koi’s legal malpractice and negligent supervision claims but disagreed as to whether substantial factor or but for causation applied to the breach of fiduciary duty claim. The panel concluded that this dispute was immaterial because, on the facts of this case, substantial factor causation required the panel to apply the but for causation test to all of Koi’s claims. Under the but for causation test, Koi was required to show that it would have obtained a more favorable judgment or settlement in the SPI litigation but for Marron’s conduct. 4 KOI DESIGN LLC V. MARRON LAWYERS, APC A reasonable jury could find that it was more likely than not that Koi would have obtained a more favorable judgment in the SPI litigation with competent counsel because the district court in the SPI litigation granted SPI default judgment and treble damages in part because of Mastroianni’s misconduct, including while Mastroianni was employed at Marron. A reasonable jury also could conclude that but for Marron’s conduct, Koi would have replaced Mastroianni with competent counsel based on the fact that Koi immediately replaced Mastroianni in the SPI litigation when Koi discovered Mastroianni’s gross mishandling of the litigation and based on the testimony of Koi’s CEO. Accordingly, the panel reversed the district court’s grant of summary judgment and remanded for further proceedings. Concurring in part and dissenting in part, Judge Gilman disagreed with the majority’s analysis regarding the causation element of Koi’s three claims. In Judge Gilman’s view, under the first step of the substantial factor analysis, Koi failed to raise a genuine dispute of material fact as to but for causation for any of its claims. Under the second step of the substantial factor analysis, Koi failed to raise a genuine issue of material fact that Marron’s actions were a concurrent independent cause of Koi’s damages for its legal malpractice and negligent supervision claims, and so he would affirm the district court’s grant of summary judgment on those claims. Judge Gilman agreed, however, that Koi raised a genuine dispute of material fact on the causation element of Koi’s breach of fiduciary duty claim, so he would reverse the district court’s grant of summary judgment on that claim. In Judge Gilman’s view, Marron’s actions were a concurrent  KOI DESIGN LLC V. MARRON LAWYERS, APC 5 independent cause of Koi’s damages for Koi’s breach of fiduciary duty claim. COUNSEL Joshua I. Epstein (argued), Ronald W. Makarem, and Samuel D. Almon, Makarem & Associates APLC, Los Angeles, California, for Plaintiff-Appellant. Randall A. Miller (argued) and Zachary Mayer, Miller Waxler, LLP, Los Angeles, California, for Defendant- Appellee. OPINION KOH, Circuit Judge: Koi Design LLC (“Koi”) sued Marron Lawyers, APC (“Marron”) for breach of fiduciary duty, legal malpractice, and negligent supervision under California law. Koi alleged that an associate previously employed by Marron, A. Douglas Mastroianni (“Mastroianni”), grossly mishandled a trademark infringement litigation matter between Koi and Strategic Partners, Inc. (“SPI”), eventually leading to Koi’s bankruptcy. The district court granted summary judgment in favor of Marron on all claims. We reverse and remand for further proceedings consistent with this opinion. 6 KOI DESIGN LLC V. MARRON LAWYERS, APC BACKGROUND I. Factual Background Marron is a small law firm with approximately eight to ten attorneys. Marron hired Mastroianni as an associate in April 2016. Also in April 2016, Koi retained Marron to represent it in a pre-litigation trademark dispute with SPI, one of Koi’s competitors in the manufacture and sale of medical scrubs. On January 11, 2017, SPI sued Koi in the United States District Court for the Central District of California, alleging that Koi’s medical scrubs had infringed a trademark owned by SPI (“SPI Litigation”). Marron was Koi’s counsel of record in the SPI Litigation, and Mastroianni was the lead attorney. While an associate at Marron, Mastroianni’s representation of Koi in the SPI Litigation immediately ran into problems. Mastroianni failed to file a responsive pleading to SPI’s complaint on Koi’s behalf by the February 2, 2017 deadline. On February 3, 2017, the district court issued an order to show cause directing SPI to seek entry of default, dismiss the complaint, or file a declaration regarding the status of the case. In response to the order to show cause, counsel for both parties filed a joint stipulation extending Koi’s time to answer SPI’s complaint to March 2, 2017, which the court deemed “satisfactory.” Mastroianni then filed an answer by the new deadline, but that answer did not comply with the Central District of California’s Local Rule 7.1-1, requiring Koi to file a Notice of Interested Parties. Significantly, Marron did not inform Koi of Mastroianni’s failure to file a timely answer or the court’s order to show cause.  KOI DESIGN LLC V. MARRON LAWYERS, APC 7 Mastroianni’s failure to comply with court deadlines persisted. The district court set an initial scheduling conference for May 15, 2017, and in a court order reminded the parties of their obligations under Federal Rule of Civil Procedure 26(f) (“Rule 26(f)”) to “confer on a discovery plan not later than 21 days before the scheduling conference and to file a ‘Joint Rule 26(f) Report’ with the Court . . . not later than 7 days before the scheduling conference.” The court warned that “[f]ailure to comply . . . or to cooperate in the preparation of the Joint Rule 26(f) Report may lead to the imposition of sanctions.” Despite these warnings, Mastroianni failed to meet and confer with SPI’s counsel and did not participate in preparing the Joint Rule 26(f) report. SPI’s counsel reached out to Mastroianni four times to schedule the required meet and confer, but Mastroianni never responded. On May 8, 2017, SPI filed a Notice of Defendant’s Refusal to Participate in a Rule 26(f) Conference, informing the court that Mastroianni “ignored all communications attempting to schedule a conference.” SPI attached an exhibit showing that Mastroianni had failed to respond to four emails over ten days. SPI also unilaterally filed a Rule 26(f) report, in which SPI argued that entry of default and default judgment against Koi was appropriate under the circumstances. No one at Marron informed Koi of Mastroianni’s failure to participate in the Rule 26(f) process, or that SPI had filed a Notice informing the court of Mastroianni’s noncompliance. Then, just three days before the May 15, 2017 scheduling conference, Mastroianni filed an ex parte application to continue the conference. In the application, Mastroianni explained that his failure to cooperate with SPI’s counsel was the result of a “series of errors.” First, Mastroianni had 8 KOI DESIGN LLC V. MARRON LAWYERS, APC “frequent absences from the office due to treatment for an on-going medical condition.” Second, Mastroianni “assigned the day-to-day handling of this matter to [an] associate” but when “that associate subsequently left [Marron,] the matter was not reassigned.” Third, “events in this action . . . were inadvertently not calendared by [Marron’s] calendaring system.” Finally, Mastroianni was not receiving ECF notifications for the matter, “compounding errors.” Again, no one at Marron informed Koi of Mastroianni’s ex parte application or the concerning information contained in the application. At the time of these developments in the SPI Litigation, Mastroianni failed to add any paralegal to his Case Management/Electronic Case Files (“CM/ECF”) account.1 This meant that no Marron paralegal received notifications for filings in the SPI Litigation, including the filing of the district court’s order to show cause, SPI’s Notice of Defendant’s Refusal to Participate in a Rule 26(f) Conference, SPI’s unilateral Rule 26(f) report, and Mastroianni’s ex parte application. Mastroianni’s failure to add a paralegal to his CM/ECF account was a violation of Marron’s internal policies. Marron’s sole and managing shareholder who had overall managerial authority over the firm, Paul Marron (“Paul”), testified that he did not learn of Mastroianni’s policy violation until after Mastroianni was terminated. The record suggests, however, that at least one paralegal, Mini Leano (“Mini”), knew Mastroianni was not complying with Marron’s policy and had sent Mastroianni 1 CM/ECF is used by the federal judiciary to allow for electronic filing of documents in federal court cases and to notify parties of filings in their cases.  KOI DESIGN LLC V. MARRON LAWYERS, APC 9 “emails following up on [Mastroianni’s] CM-ECF logins.” Paul stated in an email that, “[h]ad Mini brought this to our attention sooner, it would have led to termination and/or triggered investigation.” In addition to not notifying Koi of these developments in the SPI Litigation, Marron did not disclose to Koi that Marron had serious concerns regarding Mastroianni’s performance. In the days leading up to Mastroianni’s termination on May 31, 2017, Paul sent numerous internal emails detailing Mastroianni’s incompetence and discussing the need to terminate Mastroianni. For example, on May 23, 2017, Paul emailed Mastroianni (referred to as “Doug” in emails) regarding an ex parte application in a different matter. In the email, Paul instructed Mastroianni to work with Marron associate Bill Hendricks (“Bill”) and paralegal Angie Urbina (“Angie”) to prevent further “missed deadlines.” Paul wrote: Doug – Re below, below is obviously a ball dropped that should not have happened, and I don’t want to have to continue to get engaged in pressing so much for basics to get done/that they have been done. On this end, it is a management issue and the management of the cases has to improve. You are going to need to work more with Bill/Angie on these issues. Give Bill assignments where appropriate. You have a pattern of selflessly volunteering to get more done than might reasonably be expected. This then results in missed deadlines or lapsed priorities. Bill is a resource to prevent things like this. He also has a good eye for the calendar so I am asking 10 KOI DESIGN LLC V. MARRON LAWYERS, APC him to get more assertive and engaged on these issues, but this is not a ‘dig’ at you. . . . Work with Bill to get the ex parte done. Even though Angie was a paralegal and Mastroianni was an attorney, Paul, on May 24, appointed Angie to be Mastroianni’s “minder” to ensure that a deadline in an unidentified matter was met: Angie – You are appointed Doug’s “minder” on this so it gets done, a must for Th[ursday]. On the same day, Paul emailed the office administrator stating that Mastroianni was creating a discouraging situation for Bill and frustrating other Marron employees. Paul discussed the need to terminate Mastroianni because Mastroianni’s conduct posed repeated malpractice and client relation risks: I would appreciate your insight into whether we could . . . fire Doug. His stunt(s) re the [REDACTED] ex parte and also creating a very discouraging situation for Bill are approaching the end of my patience. Apart from patience, he is pretty clearly doing things repeatedly that are malpractice risks and/or although at a minor level so far, signs of potential serious failure/omission. I gave him some respite and patience either yesterday or Monday – yet he went off reckless again re his inability to personally manage himself, yesterday or Tuesday giving notice of the ex parte for tomorrow - - when he flew to PHX Tuesday evening with the  KOI DESIGN LLC V. MARRON LAWYERS, APC 11 papers incomplete. Said he would be back in the office this am and did not show up, or let me know (did he let you?). When Angie left today she reported the papers were not done. Perhaps he will be in the office 4 am Th[ursday] to get the papers done but even if that the disorganization is too pervasive and malpractice and client relation risk [sic]. Not to mention frustration of fellow employees and what is becoming an ever greater distraction for me when I should be prepping for [REDACTED] trial. The next day, May 25, Paul told several Marron employees, including Bill, to stay subtle about Mastroianni’s impending termination and noted that Bill would be taking over a matter from Mastroianni: No term[ination] Friday . . . . Stay subtle re term[ination]. Announce to Doug, Fri, however that Bill is taking over and fully in charge on [REDACTED] and Doug is to give him info and cooperate and take assignments. . . . Basically we need to ease into the Term[ination] which will be Tu or Wed. I will offer Doug chance to defend next week Depos on short term [independent contract] but we also will want to stay focused on moving on.” On May 26, Paul again emailed the office administrator about the amount of time Paul had to spend supervising 12 KOI DESIGN LLC V. MARRON LAWYERS, APC Mastroianni and the repeated problems Mastroianni created on his cases: Note [Mastroianni’s] lapses have been chewing up as much as 2 to 3 hours in a day, routinely, and for approx. 6 weeks. Yesterday it was the entire day (6 hours). He is a major drain on my time as I have to overly supervise him on cases where I am involved and repeated problems on cases he was responsible for. Later that same day, Paul sent the office administrator another email, noting that Paul had to tell Mastroianni to get an assignment done four times in one week: D[oug]’s Personnel, point being that I had to tell him to do this on a Th[ursday], after having told him 3x orally over the prior week to do so. Several days later, on May 30, Bill told Paul and the office administrator that Doug was wrong about a deadline, and that paralegal Angie was correct: Doug is still responding to some emails. I don’t know what that means but just fyi. Also, Angie is correct – those are deadlines in [REDACTED], not [REDACTED.] PBA and  KOI DESIGN LLC V. MARRON LAWYERS, APC 13 I decided we are not filing anything tomorrow on that. Finally, also on May 30, Paul emailed the office administrator about Mastroianni’s formal termination: Note – Formal termination decision made Friday [May 26]. He has intentionally (he has to know he will be terminated given his behaviors) or with gross indifference not come in to work – thus avoiding presentation of term letter because he has not been in to work [sic.]. Marron terminated Mastroianni on May 31, 2017. In its termination letter, written by the office administrator, Marron again documented Mastroianni’s incompetence, malpractice risks, and the negative effect that Mastroianni had on his colleagues. The termination letter noted the following failures, among others, in a bulleted list: • “Failure to either timely respond, or respond at all, to e-mail communications, telephone calls, and written correspondence/documentation sent by clients, counsel and fellow Marron Lawyers’ staff members”; • “Your consistent omission to plan ahead for filing and/or service of necessary documents, essentially waiting until the eleventh-hour, which in turn resulted in disruption, chaos for the paralegals and admin staff, harmed morale and overall 14 KOI DESIGN LLC V. MARRON LAWYERS, APC effectiveness and increased rush attorney service charges which then had to be passed on to the client”; • “ . . . exposed the Firm to potential State Bar complaint; as well as malpractice action for failure to properly reject [a potential client]. Your omissions required my [the office administrator’s] and Paul Marron’s repeated interventions, yet you still failed to correct the matter. Even after a rejection, you claimed to have told [REDACTED] you would find her another attorney. You then reported to a number of us that you have referred her to another attorney. I then contacted [REDACTED], and she stated she had not heard from you regarding a referral. . . ”; • “You have placed yourself in a position where a number of your peers doubt your word on certain issues, feel you have to be verified or checked, etc. Combined with ignoring deadlines, not being prepared, not communicating, communicating in a way that may be deceptive or misleading, etc. your increasing impact on peers has ranged from undermining morale to distrust, to what could be called as major doubts. This in turn has resulted in an absolutely unacceptable situation where hours and hours of your peers’ time had to address  KOI DESIGN LLC V. MARRON LAWYERS, APC 15 both your shortcomings and lapses in work”; • “A final exceedingly important point is that on an increasing basis, your lapses resulted in situations where, if your peers and administration did not jump in and take action, you would have exposed the Firm to malpractice liability or other complaints, disservice/damage to clients/their cases and damage to the Firm’s reputation (again despite strong efforts in some respects). By the end, there was a near certainty that unless you were let go, such would happen.” Despite these numerous documented issues with Mastroianni’s performance, Marron never raised any concerns to Koi. During a June 16, 2017 phone call between Bill and Koi’s CEO, Kathy Peterson (“Peterson”), Peterson “specifically asked whether [she] had any reason to be concerned” about Mastroianni’s handling of the SPI Litigation. Peterson further “inquired about the cause of Mr. Mastroianni’s sudden departure.” Bill responded “that he was not in ‘the meeting,’ leading [Peterson] to believe that he did not know the reason for Mr. Mastroianni’s departure.” Bill then directed Peterson “to speak with Mr. Mastroianni,” and “gave [Peterson] no indication that there was a reason to be concerned.” Following his termination from Marron, Mastroianni joined the Bloom Firm, APC (“Bloom”) sometime in June 2017. Mastroianni continued to represent Koi in the SPI Litigation while at Bloom. The SPI Litigation ended with the district court imposing terminating sanctions on Koi and 16 KOI DESIGN LLC V. MARRON LAWYERS, APC granting default judgment to SPI because “Koi repeatedly, unjustifiedly [sic], and continuously failed to comply with Magistrate Judge Gail Standish’s lawful orders.” The district court awarded SPI $5,266,380.68 in damages, in part by trebling Koi’s alleged profits from infringing SPI’s trademark. When Koi discovered the case terminating sanctions and default judgment, Koi promptly terminated Mastroianni, retained new counsel, and filed a motion to vacate the default judgment. The magistrate judge issued a report recommending that the district court deny Koi’s motion (“Report and Recommendation”). The district court adopted the Report and Recommendation in full. On January 25, 2019, Koi filed for bankruptcy protection because of the default judgment. II. Procedural Background On July 1, 2019, Koi sued Mastroianni, Marron, and Bloom for breach of fiduciary duty, legal malpractice, and negligent supervision for their conduct during the SPI Litigation.2 Bloom settled with Koi for $1,109,999.84 in June 2021. Relevant to this appeal, Marron filed a motion for summary judgment on all of Koi’s claims against Marron on February 17, 2022. The district court granted summary judgment in favor of Marron only on Koi’s legal malpractice claim. The court denied Marron’s request for summary judgment on Koi’s breach of fiduciary duty claim and did not address Koi’s negligent supervision claim. Marron then filed a motion for “clarification and correction,” arguing that 2 Koi’s complaint asserted other claims not relevant to this appeal.  KOI DESIGN LLC V. MARRON LAWYERS, APC 17 the district court erred in denying summary judgment on the breach of fiduciary duty claim and pointing out that the district court had failed to address Koi’s negligent supervision claim. Koi filed an opposition to the motion, in which Koi argued that the district court erred in granting summary judgment on a ground not raised by the parties without adequate notice, in violation of Federal Rule of Civil Procedure 56(f)(2) (“Rule 56(f)(2)”). The district court issued an amended summary judgment order on August 11, 2022. The amended order granted summary judgment in favor of Marron on the legal malpractice, breach of fiduciary duty, and negligent supervision claims solely on the grounds that Koi had not established that Marron’s alleged conduct caused Koi’s injuries. The amended order did not address Koi’s inadequate notice argument. The amended summary judgment order was merged into the final judgment in the case on July 11, 2023, when the district court granted default judgment against Mastroianni for $6,529,950.86.3 This timely appeal followed. STANDARD OF REVIEW We review the district court’s grant of summary judgment de novo. Merrick v. Hilton Worldwide, Inc., 867 F.3d 1139, 1145 (9th Cir. 2017). “Summary judgment is appropriate if—construing the facts in the light most favorable to the nonmoving party and drawing all reasonable inferences in that party’s favor—there is no genuine dispute of material fact, such that judgment is appropriate as a matter 3 We resolve Mastroianni’s appeal of this default judgment in a concurrently filed memorandum disposition, in which we affirm the district court’s grant of default judgment. See Koi Design LLC v. A. Mastroianni, No. 23-55724. 18 KOI DESIGN LLC V. MARRON LAWYERS, APC of law.” Id. A “dispute about a material fact is ‘genuine’ . . . if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). Where, as here, the nonmoving party bears the burden of proof at trial, the moving party may secure summary judgment by “‘showing’—that is, pointing out to the district court—that there is an absence of evidence to support the nonmoving party’s case.” Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986). When the moving party satisfies its initial burden, “‘the burden shifts to the non-moving party to set forth, by affidavit or as otherwise provided in Rule 56, specific facts showing that there is a genuine issue for trial.’” Fed. Trade Comm’n v. Stefanchik, 559 F.3d 924, 927-28 (9th Cir. 2009) (quoting Horphag Rsch. Ltd. v. Garcia, 475 F.3d 1029, 1035 (9th Cir. 2007)). LEGAL STANDARD Koi appeals the district court’s grant of summary judgment in favor of Marron on Koi’s legal malpractice, breach of fiduciary duty, and negligent supervision claims. The elements of these claims are similar. The elements of a “legal malpractice action arising from a civil proceeding” are “(1) the duty of the attorney to use such skill, prudence, and diligence as members of his or her profession commonly possess and exercise; (2) a breach of that duty; (3) a proximate causal connection between the breach and the resulting injury; and (4) actual loss or damage resulting from the attorney’s negligence.” Coscia v. McKenna & Cuneo, 25 P.3d 670, 672 (Cal. 2001). “[A]n attorney’s duties to his client are conclusively established by the rules of professional conduct . . . .” Mirabito v. Liccardo, 5 Cal. Rptr. 2d. 571, 573 (Cal. Ct. App. 1992); see also David  KOI DESIGN LLC V. MARRON LAWYERS, APC 19 Welch Co. v. Erskine & Tulley, 250 Cal. Rptr. 339, 343 (Cal. Ct. App. 1988) (“Violations of professional standards” are breaches of “the standard of care” for purposes of a legal malpractice claim (citation modified)). Likewise, “[t]he elements of a cause of action for breach of fiduciary duty are: (1) existence of a fiduciary duty; (2) breach of the fiduciary duty; and (3) damage proximately caused by the breach.” Stanley v. Richmond, 41 Cal. Rptr. 2d 768, 776 (Cal. Ct. App. 1995). Similar to the legal malpractice claim, “[t]he scope of an attorney’s fiduciary duty may be determined as a matter of law based on the Rules of Professional Conduct [] together with statutes and general principles relating to other fiduciary relationships.” Id. (internal quotation marks and citation omitted) The elements of a negligent supervision claim are (1) the employer hired the employee, (2) the employee was or became unfit or incompetent to perform the work for which they were hired, (3) the employer knew or should have known that the employee’s unfitness or incompetence posed a particular risk to others, (4) the employee’s unfitness or incompetence harmed the plaintiff, and (5) the employer’s negligent supervision was a substantial factor in causing the plaintiff’s harm. Judicial Council of California Civil Jury Instructions (2026), No. 426 (“Negligent Hiring, Supervision, or Retention of Employee”); see Lopez v. Watchtower Bible & Tract Soc’y of N.Y., Inc., 201 Cal. Rptr. 3d 156, 177 (Cal. Ct. App. 2016). ANALYSIS Koi raises two principal issues on appeal. First, Koi argues that the district court violated Rule 56(f)(2) by granting summary judgment on a ground not raised by the parties, without adequate notice to Koi. Second, Koi argues 20 KOI DESIGN LLC V. MARRON LAWYERS, APC that the district court erred in determining that Koi failed to establish a genuine dispute of material fact as to Koi’s legal malpractice, breach of fiduciary duty, and negligent supervision claims. We address each in turn. I. The District Court Did Not Violate Rule 56(f)(2) Koi first argues that the district court violated Rule 56(f)(2) by granting summary judgment in favor of Marron “on [a] ground[] not raised by a party” without giving Koi adequate notice. Fed. R. Civ. P. 56(f)(2) (“After giving notice and a reasonable time to respond, the court may . . . grant the motion on grounds not raised by a party . . . .”).4 Koi’s primary contention is that the district court granted summary judgment in favor of Marron on the ground that Koi could not prove damages even though Marron only challenged the causation element of Koi’s claims. This argument misreads the district court’s amended summary judgment order. The district court’s order explicitly stated that Marron was entitled to summary judgment because “Koi failed to present any evidence to establish the causation element” of its claims. Koi’s argument that the district court granted 4 Marron argues that Koi waived these arguments by failing to raise them before the district court. That is incorrect. Although there is “no ‘bright line rule’” for when an argument is waived on appeal, generally an issue is not waived if it was “‘raised sufficiently for the trial court to rule on it.’” Whittaker Corp. v. Execuair Corp., 953 F.2d 510, 515 (9th Cir. 1992) (quoting In re E.R. Fegert, Inc., 887 F.2d 955, 957 (9th Cir. 1989)). Here, in Koi’s response to Marron’s motion for clarification of the district court’s first summary judgment order, Koi argued that the district court violated Rule 56(f)(2). The district court thus had an opportunity to rule on this issue in its amended summary judgment order. The fact that the district court did not do so is irrelevant. See Consumer Fin. Prot. Bureau v. Gordon, 819 F.3d 1179, 1191 n.5 (9th Cir. 2016) (holding that an argument properly raised before the district court, but which “the district court refused to resolve,” was not waived).  KOI DESIGN LLC V. MARRON LAWYERS, APC 21 summary judgment on a ground not raised by Marron is therefore without merit.5 Koi contends in the alternative that the district court violated Rule 56(f)(2) by relying “on a theory” regarding Koi’s inability to establish causation that was not raised by Marron. In Koi’s telling, Marron’s summary judgment motion challenged causation solely on the theory that Koi could not show that Marron caused Koi’s default in the SPI Litigation. Instead of relying on that theory, Koi contends, the district court found that Koi could not show that it would have ultimately prevailed on its trademark defenses in the SPI Litigation or obtained a better outcome than its settlement with SPI. Koi’s contention that it lacked notice of the “theory” relied upon by the district court is contradicted by the record. Koi’s own opposition to Marron’s motion for summary judgment repeatedly attempted to refute this theory by arguing that “whether Koi would have obtained a more favorable judgment or settlement but for conduct that occurred during Marron’s representation is a factual issue for trial.” The district court ultimately disagreed with Koi and concluded that Koi presented “no evidence” that it could have “achieved a better final outcome than its settlement with SPI.” Koi may disagree with that conclusion, but it cannot dispute that it had adequate notice that this was one theory on which summary judgment may be granted.6 5 Because the district court granted summary judgment on causation, not damages, we need not address Koi’s argument that the district court improperly shifted the burden to Koi to establish damages. 6 Koi’s reliance on the Tenth Circuit’s decision in Oldham v. O.K. Farms, Inc. is thus misplaced. 871 F.3d 1147, 1148 (10th Cir. 2017). In Oldham the Tenth Circuit held that the district court violated Rule 56(f)(2) where 22 KOI DESIGN LLC V. MARRON LAWYERS, APC Accordingly, the district court’s order did not violate Rule 56(f)(2). II. The District Court Erred In Granting Marron Summary Judgment On Koi’s Three Claims We now turn to Koi’s contention that the district court erred in finding that there was no genuine dispute of material fact as to Koi’s claims for legal malpractice, breach of fiduciary duty, and negligent supervision. On appeal, the parties have two major disputes. First, the parties dispute whether there was a triable issue of fact as to the breach of duty element of Koi’s legal malpractice and breach of fiduciary duty claims. Second, the parties dispute whether there was a triable issue of fact as to whether Marron’s conduct caused Koi any harm, a necessary element for all three of Koi’s claims. For the reasons stated below, we agree with Koi that there is a triable issue of fact as to both breach and causation. We therefore reverse the district court’s award of summary judgment in favor of Marron. A. There is a genuine dispute as to whether Marron breached its duties, an essential element of Koi’s legal malpractice and breach of fiduciary duty claims The parties first dispute whether Koi established a genuine issue of material fact as to the breach element of Koi’s legal malpractice and breach of fiduciary duty claims. The first two elements of these two claims are essentially the “the district court’s ruling was based on a theory that was not raised by Defendant or briefed by either party.” Id. (emphasis added). Unlike in Oldham, here Koi itself briefed the theory on which the district court decided Marron’s summary judgment motion.  KOI DESIGN LLC V. MARRON LAWYERS, APC 23 same: (1) duty and (2) breach. See Coscia, 25 P.3d at 672 (legal malpractice); Stanley, 41 Cal. Rptr. 2d at 776 (breach of fiduciary duty). Moreover, for purposes of both claims, the scope of the duty may be determined with reference to the California Rules of Professional Conduct. See Stanley, 41 Cal. Rptr. 2d at 776 (“The scope of an attorney’s fiduciary duty may be determined as a matter of law based on the Rules of Professional Conduct [] together with statutes and general principles relating to other fiduciary relationships . . . .” (internal quotation marks and citation omitted)); Mirabito, 5 Cal. Rptr. 2d. at 573 (“[A]n attorney’s duties to his client are conclusively established by the rules of professional conduct” for legal malpractice claims.). Breaches of the Rules of Professional Conduct may be used to prove that a lawyer “ha[s] breached his fiduciary duties.” Mirabito, 5 Cal. Rptr. 2d at 573. Likewise, “violations of professional standards” are breaches of “the standard of care” satisfying the breach of duty element of a legal malpractice claim. David Welch Co., 250 Cal. Rptr. at 343 (citation modified). In this case, the parties agree that Marron owed two duties to Koi. First, the parties agree that Marron had a duty to disclose to Koi material facts and significant developments in the SPI Litigation. See Beal Bank, SSB v. Hadden, LLP, 167 P.3d 666, 673 (Cal. 2007) (fiduciary duty to disclose material facts); Cal. R. Pro. Conduct (1992) 3- 500 (California Rule of Professional Conduct requiring that attorneys “keep [] client[s] reasonably informed about significant developments relating to the employment or representation”). Second, the parties agree that Marron had “an obligation to adequately supervise [its] employees.” Layton v. State 24 KOI DESIGN LLC V. MARRON LAWYERS, APC Bar, 789 P.2d 1026, 1032 (Cal. 1990); see also Cal. R. Pro. Conduct (1992) 3-110, Discussion (describing “the duty to supervise the work of subordinate attorney” and collecting California Supreme Court citations). “Breach of duty is usually a fact issue for the jury,” and such is the case here. Lysick v. Walcom, 65 Cal. Rptr. 406, 416 (Cal. Ct. App. 1968) (legal malpractice case); see also Stanley, 41 Cal. Rptr. 2d at 776 (“Whether an attorney has breached a fiduciary duty to his or her client is generally a question of fact.”). As discussed below, construing the facts in the light most favorable to Koi and drawing all reasonable inferences in Koi’s favor, we conclude that a reasonable jury could find that Marron breached its duty to disclose and its duty to supervise. See Merrick, 867 F.3d at 1145. Thus, a triable issue of fact exists as to the breach element of both Koi’s legal malpractice claim and breach of fiduciary duty claim. 1. Duty to disclose A reasonable jury could conclude that Marron breached its duty to disclose in at least two ways: (1) by failing to disclose that Mastroianni posed malpractice risks and (2) by failing to disclose several significant developments in the SPI Litigation. We discuss each in turn. First, based on the evidence in the record, a reasonable jury could find that Marron knew that Mastroianni, Koi’s lead counsel in the SPI Litigation, posed malpractice risks and yet did not disclose this information to Koi. Paul’s numerous emails to Mastroianni, Bill, and other Marron employees, along with Mastroianni’s termination letter discuss at length Mastroianni’s inability to meet deadlines or adequately manage his cases. For example:  KOI DESIGN LLC V. MARRON LAWYERS, APC 25 • On May 23, 2017, Paul emailed Mastroianni and reprimanded him for “a ball dropped” in another matter “that should not have happened.” Paul discussed Mastroianni’s tendency to “miss[] deadl