Filed 3/25/21 A&B Market Plus, Inc. v. Arabo CA4/1

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COURT OF APPEAL, FOURTH APPELLATE DISTRICT

DIVISION ONE

STATE OF CALIFORNIA

A&B MARKET PLUS, INC., et al.,

Plaintiffs and Respondents,

v.

MARK ARABO,

Defendant and Appellant.

D073850

(Super. Ct. No. 37-2015-

00032389-CU-OE-CTL)

APPEALS from a judgment and orders of the Superior Court of 

San Diego County, Richard E. L. Strauss, Judge. Affirmed. Motions 

for sanctions denied.

Niddrie Addams Fuller Singh, David A. Niddrie and Victoria E. 

Fuller for Defendant and Appellant.

LiMandri & Jonna, Charles S. LiMandri, Paul M. Jonna, Jeffrey 

M. Trissell and B. Dean Wilson for Plaintiffs and Respondents.

This is a derivative action filed by A&B Market Plus, Inc., LS & 

SLG, Inc., Wall First Venture, Inc. and OB Star, Inc. (collectively, 

plaintiffs), as members or former members of the Neighborhood Market 
2

Association (NMA) against NMA1 and NMA’s former President and 

CEO Mark Arabo, and NMA’s treasurer and secretary, Amir Oram. 

Plaintiffs sought to remove Arabo and Oram from NMA’s board of 

directors (the board), disgorgement of at least $463,322.63 obtained 

through Arabo’s alleged misdeeds, and other damages for tax evasion 

and lost business opportunities. 

The sole matter at issue in this appeal is a $210,000 bonus (the 

bonus) that the board awarded Arabo for his work in facilitating the 

sale of NMA’s building. After a bench trial, the court ordered Arabo to 

return the bonus.2

Arabo appeals, claiming that plaintiffs’ addition of a new fraudbased theory of liability before trial, but after the close of discovery,

violated his due process rights. He also asserts that the trial court 

erred in admitting documents prepared by plaintiffs’ counsel for 

litigation. As we shall explain, Arabo did not suffer a due process 

violation and Arabo forfeited the alleged error regarding admission of 

the challenged documents.3 We also deny the parties’ cross motions for 

1 In a derivative action the corporation is an indispensable party 

and must be joined as a nominal defendant because its rights are being 

litigated. (Keeler v. Schulte (1957) 47 Cal.2d 801, 803.) Accordingly,

plaintiffs named NMA as a defendant to all causes of action and we 

occasionally refer to NMA as a defendant. 

2 The court entered a defense judgment for Oram. 

3 Should we agree that the trial court improperly ordered him to 

return the bonus, Arabo argues that no alternative grounds support 

affirmance of the court’s judgment regarding the bonus. Our 

conclusion that the trial court did not err when it ordered Arabo to 

return the bonus moots this argument and we do not address it. 
3

sanctions, and plaintiffs’ request for attorney’s fees under the private 

attorney general statute.4 (Code Civ. Proc., § 1021.5.)

I.

FACTUAL AND PROCEDURAL BACKGROUND

Overview of the Litigation

NMA is a non-profit mutual benefit corporation that is a trade 

association for independent retail convenience stores. Arabo worked as 

NMA’s President and CEO under a written employment contract. This 

derivative action arose after NMA did not allow plaintiffs to inspect its 

records and failed to provide plaintiffs with the NMA membership list.

As summarized by plaintiffs’ trial brief, the first two causes of 

action for breach of fiduciary duty and “illegal compensation” were

derivative claims that focused on purported misconduct that occurred 

4 Arabo seeks to augment the record to include certain portions of 

the videotaped deposition testimony of two witnesses played during 

trial. Respondents admit that the video clips were played at trial, but 

submit that the motion should be denied because Arabo provided no 

explanation for his delay in bringing this motion. Arabo responds that 

the augmentation is relevant to issues raised in respondents’ brief and 

sanctions motion. Arabo cites the interruption of normal operations 

occasioned by the pandemic as contributing to the delay.

 “At any time, on motion of a party . . ., the reviewing court may 

order the record augmented to include: [¶] . . . [a]ny document filed or 

lodged in the case in superior court.” (Cal. Rules of Court, rule 

8.155(a)(1)(A).) Augmentation requests “made after a reasonable time 

has expired from receiving the [appellate] record . . . will be denied 

absent a strong showing of unusual or unavoidable circumstances 

giving rise to the delay.” (People v. Preslie (1977) 70 Cal.App.3d 486, 

492.) Respondents filed their sanctions motion in early February 2020. 

and Arabo filed his augmentation motion in early June 2020. We 

believe that the global pandemic declared in March 2020 created 

unusual circumstances excusing any delay in filing the motion. The 

motion is granted.
4

between 2013 and 2014, when NMA lost over $1,600,000.5 These 

claims addressed, among other things, “Defendants’: gross 

overpayments to Mark Arabo; tax violations and false tax reporting; 

misappropriation of funds from the NMA Education Foundation, a 

related charity; failure to disclose serious conflicts of interest; improper 

political contributions and lobbying expenses; use of NMA funds for 

personal use (while coding them as business expenses); falsely 

representing that the NMA’s books were audited; and transferring 

control of the NMA to an outside organization – in violation of the 

bylaws, and pursuant to an unlawful contract.” The complaint also 

contained two causes of action for injunctive relief to address 

defendants’ failure to allow inspection of NMA records, and attempted

retaliation against a NMA member. 

After trial, the court issued a 40-page statement of decision which

concluded, among other things, that a new board needed to be elected 

and a receiver appointed pending election of the new board. The trial 

court also concluded that Arabo breached his fiduciary duty and 

required him to return the bonus to NMA.

As we have stated, this appeal focuses exclusively on Arabo’s 

right to the bonus. Accordingly, the balance of our discussion focuses 

on the facts relevant to the bonus claim. 

Facts Relevant to the Bonus Claim

In late 2013, NMA was having financial problems and the board 

later decided to sell its only asset, an office building located on Friars 

Road (the building). The board hired Mike Habib as its broker for the 

5 The parties agreed that these two causes of action would be 

merged at trial based on the overlap between the claims. 
5

transaction. Keller Williams SD Central Coastal (Keller Williams), is a 

commercial real estate agency and, in 2013, was a tenant in NMA’s 

building. A broker from Keller Williams, licensed California attorney 

Toni-Diane Donnet, saw the for sale sign and approached Habib with 

an offer to purchase the building for $2.6 million.

Habib showed Donnet a competing offer for $3.32 million. Keller 

Williams matched the competing offer and purchased the building for 

$3.32 million. Habib created a letter dated September 22, 2014 (the 

letter), congratulating Arabo on the sale. The letter stated:

“Dear Mark,

“I wanted to congratulate you and thank you again 

for your efforts in successfully negotiating and closing 

the sale of The NMA building. The transaction was 

complex and problematic, but the way you held it all 

together was BRILLIANT!

“We started out with an offer from your tenant, 

Keller Williams, at $2,600,000. I remember what you 

told me they said they were going to offer $2,100,000 

and you were right! Then you went back and forth 

with them, tirelessly, until the written offer finally

came in at $2,600,000. It still amazes me how you 

worked them up from $2,600,000 to $3,320,000! 

Amazing!

“Your idea to the Buyer of buying all three buildings 

is what clinched the deal. You had nerves of steel 

when it came to the hard negotiating of the key 

points of the deal. The payoff was evident in the fact 

that the Buyer closed escrow and paid a higher price 

to you for your building than what they paid for 

either of the two adjacent buildings, purchased

concurrently with your building. I respect you and 

admire how you saw the big picture.
6

“The real work was closing the deal, not just in 

negotiating the initial terms of the offer. After you 

signed the deal, for over six months, the Buyer kept 

coming back relentlessly trying to hit you up with 

changes that they needed and had to have in order to 

close the deal. You held firm and the only changes 

that were made, benefitted The NMA!

“I am grateful for the way you led and how you 

skillfully made strategic decisions at key moments in 

the transaction. Mark, I still can’t figure out how you 

managed to do what you did with this deal, in the 

midst of becoming the one to stand up and 

courageously create solutions for Iraqi Christians in a 

way that makes Americans proud. My hat is off to 

you and here’s wishing you all my best as you 

continue your good work.

“With respect and grateful appreciation,

“Mike Habib, CClM

“Coldwell Banker Commercial”

After the sale closed, the board discussed giving Arabo a bonus. 

The letter was presented at the board meeting and the minutes reflect 

the directors’ belief that Arabo “worked for months and hundreds of 

hours to persuade the [buyer] to pay $3.32 million.” The board voted to 

give Arabo a $210,000 bonus.

The Complaint and Pre-Trial Proceedings Regarding the Bonus

In September 2015, plaintiffs filed this shareholder derivative 

suit against NMA that included direct claims against Arabo. The first 

cause of action alleged that Arabo breached his fiduciary duty to NMA 

by improperly authorizing or approving certain expenses, including 

(1) a “ ‘finder’s fee’ ” of $210,000 paid to Arabo even though Arabo was 

not a broker on the transaction or otherwise entitled to this 
7

compensation, and (2) approximately $38,000 in reimbursement for 

travel and costs not associated with NMA business. The second cause 

of action, entitled as a claim for “illegal compensation”, contains similar

allegations. Plaintiffs’ first amended complaint and the operative 

second amended complaint, repeated these allegations.6

In late August 2017, plaintiffs’ counsel had a telephone 

conversation with Habib. In early September 2017, three of plaintiffs’ 

other counsel, including Bryan Wilson, participated in a conference call 

with Habib. Wilson took contemporaneous notes during the call, which 

he e-mailed to the two other attorneys on the call. The notes indicated 

that Arabo made no decisions about the sale and that Habib did not 

give much credit to Arabo for the sale. That same day, one of plaintiffs’

attorneys e-mailed Habib a draft declaration based on Wilson’s notes. 

Later that same day, Habib returned a printed and marked-up copy of 

the declaration.

On September 19, 2017, and a mere three weeks before trial, one 

of plaintiffs’ attorneys wrote the following memo to the file:

“I spoke today to Mike Habib. He confirmed that he 

will be able to fully testify as to everything he told us 

on the phone (and which is summarized in the 

attached declaration). He is concerned about putting 

it in writing because he believes the folks on the 

other side are nasty and will do everything they can 

to attack him. He encouraged us to ‘ask the right 

questions’ at trial so that we can elicit his full and 

complete testimony. He will probably send us a 

watered down version of his declaration tomorrow 

(which will still be accurate), but he will answer more 

fully at trial.”

6 Although the trial court ordered Arabo to return the $38,000, he 

does not challenge this part of the court’s decision. 
8

The following day, Habib returned the proposed declaration to 

plaintiffs’ counsel with certain language stricken. The language not 

stricken by Habib stated: “I am not a party to this case. I have 

personal knowledge of the matters set forth below and could and would 

competently testify thereto if called upon to do so in court”; “I was the 

commercial Real Estate agent for the Neighborhood Market Association

(“NMA”) in 2014 when it sold its property located at 7050 Friars Road, 

San Diego, California 92108”; “I understand that Mr. Arabo contends 

he spent hundreds of hours working on this transaction”; “I advertised 

the property and developed the relationship with the buyer’s agent, and

negotiated the price”; “I did communicate with Mr. Arabo near to the 

time the sale was completed to discuss my commission from the sale”;

and “following the sale, Mr. Arabo asked me to write a letter of 

recommendation to him that he wanted to share with the NMA Board. 

He did not tell me the purpose of the letter, but I gladly agreed to write 

one, as I would for any other client.”

In late 2017, the parties filed their trial briefs. Plaintiffs argued 

that they were not limited to the two breaches of fiduciary duty 

identified in the complaint (the $210,000 bonus and $38,000 in

expenses), and were seeking an additional $215,000 in damages for 

Arabo’s alleged wrongdoing.

According to plaintiffs, they could seek leave to amend their 

complaint to conform to proof at trial. Arabo’s trial brief complained 

that plaintiffs were requesting the court to “decide a host of newly 

asserted claims that were never alleged” in plaintiffs’ complaints. 
9

Trial Testimony Regarding the Bonus

Donnet worked exclusively with Habib in closing the sale and she 

had no interaction with Arabo. Donnet testified that the statements in 

Habib’s letter regarding Arabo’s purported role in the sale were false. 

Habib, who the parties did not depose, testified that he dealt 

primarily with Donnet regarding the sale of the building, but that he 

had contact with Arabo and was able to reach him as needed. He 

admitted that Arabo asked him to write a letter of recommendation for 

an unknown purpose and stated that he “gladly” did so. Habib claimed 

that Arabo did not tell him what to write.

At one point, plaintiffs’ counsel refreshed Habib’s recollection 

with Habib’s September 1, 2017 e-mail regarding the proposed 

declaration that counsel had prepared for Habib’s signature. After the 

court overruled Arabo’s leading and lack of foundation objections,

Habib denied telling plaintiffs’ counsel that Arabo told him what to put 

in his letter “ ‘word-for-word.’ ” Plaintiffs then called attorney Wilson

as a rebuttal witness to testify regarding prior inconsistent statements

Habib made during Habib’s telephone conversations with plaintiffs’ 

counsel.

Later, Arabo’s counsel sought to recall Habib because Habib had 

given him “a different story.” He explained that when plaintiffs called 

Habib to testify, he anticipated that Habib would retract the letter, but 

this did not occur. Instead, Habib affirmed the truth of the letter. 

Arabo’s counsel explained that he needed to recall Habib to rebut 

Wilson’s testimony. Plaintiffs’ counsel responded that if Habib was

recalled, he would call multiple attorneys who participated in the 

telephone calls with Habib to impeach Habib. The court indicated that 
10

if Habib was recalled, then it wanted to hear further testimony from 

Donnet.

When recalled, Habib testified that everything in his letter was 

“100 percent true.” He claimed that Arabo did not provide even a 

single word of the letter. After his conversation with plaintiffs’ counsel, 

Habib stated that he did not sign the proposed declaration because he 

was “unwilling to sign something that wasn’t accurate.” Habib found 

Wilson’s notes in relation to the telephone conversations “humorous” 

because the notes bore no relation to the conversations, stating “It’s 

what that person -- whoever wrote that, . . . Wilson, it’s what he wanted 

to believe.” Habib claimed that the declaration prepared for his 

signature by plaintiffs’ counsel did not bear any relation to the truth or 

what had been discussed. The parties stipulated that each of plaintiffs’ 

attorneys would testify consistent with Wilson.

Plaintiffs recalled Donnet. Donnet testified she and Habib spoke 

in the hallway on the day they both initially testified, and Habib

explained to her that Arabo had dictated the letter to him. She 

testified that the statements in Habib’s letter regarding Arabo’s

involvement in the transaction were false. Arabo then had Habib

testify a third time. Habib essentially claimed that Donnet was lying 

because Arabo told him “not one word” to put in the letter. 

Plaintiffs’ expert witness opined that Arabo breached his 

fiduciary duty by misrepresenting his involvement in the sale of the 

building to the board. The defense expert testified that as a NMA 

officer, Arabo owed a fiduciary duty to NMA. If Arabo knew that 

Habib’s letter was false, then Arabo was obligated to disclose this to the 

board.
11

During cross-examination, the defense expert agreed that 

corporate officers have a duty of care to accurately convey information 

to the board of directors that could impact the officer’s entitlement to 

compensation. Assuming the information in Habib’s letter was false 

and that Arabo had “spoon-fed” the false information to Habib, the 

defense expert opined that Arabo breached his fiduciary duty to NMA, 

specifically “the duty of loyalty and the duty of candor and the duty of 

full disclosure.” 

Closing Arguments and Decision Regarding the Bonus

During closing argument, plaintiffs’ counsel argued that Habib’s 

letter was a lie and that Donnet’s testimony was truthful. Arabo’s 

counsel claimed that plaintiffs wanted to make Arabo’s entitlement to 

the bonus “all about” Habib’s letter, arguing that the board had

multiple reasons to grant Arabo a bonus. Arabo’s counsel pointed out 

that what Habib told plaintiffs’ counsel during the telephone calls was 

not under penalty of perjury and that Habib consistently testified 

regarding the truth of the letter under penalty of perjury. 

The court gave its tentative decision immediately after closing 

argument. The court prefaced its decision by stating, “This is one of the

most unusual cases I’ve had in my 22 years on the bench. I’ve never 

heard so much fiction under oath. It’s really unbelievable. I don’t even 

know where to start.” The court stated it did not believe Habib’s 

testimony, and believed Donnet’s. The court found that the letter was 

“the driving force” for the bonus, the letter amounted to a false 

representation to the board, and that Arabo participated in the false 

representation. Accordingly, the court ruled that Arabo must disgorge 

the bonus.
12

Over Arabo’s objection, the trial court adopted plaintiffs’ proposed 

statement of decision. The trial court entered judgment in favor of

plaintiffs.

Post-Trial Proceedings Regarding the Bonus

Arabo filed a motion for new trial on multiple grounds, including 

surprise and irregularity in the proceedings. Among other things, 

Arabo asserted he was “prevented from having a fair decision” because 

plaintiffs never pled their misrepresentation theory. Arabo explained 

that had he known plaintiffs’ theory of liability, he would have deposed 

Habib, and he would have called board members as additional

witnesses to testify that they did not rely on Habib’s letter when voting 

to approve the bonus. Arabo also asserted that a new trial was 

necessary because plaintiffs concealed that they paid Donnet in 

connection with her testimony. Since Donnet’s credibility was a key 

factor in the court’s ultimate decision, Arabo argued that plaintiffs’ 

failure to disclose the payment resulted in extreme prejudice. The trial 

court denied the motion, stating that Arabo failed to establish any of 

the statutory grounds for a new trial.

II.

DISCUSSION

A. Arabo Suffered No Due Process Violation. 

“ ‘In a contested proceeding, no court may render judgment 

without conforming to the constitutional guarantees which afford due 

process of law. [Citation.] Due process requires that all parties be 

notified of the facts and issues in dispute, that each party be afforded a 

fair opportunity to present evidence in open court, and that judgment 

be rendered based on an evaluation of the evidence on each side, 
13

findings of fact and conclusions of law.’ ” (Carr v. Kamins (2007) 151 

Cal.App.4th 929, 936.) We independently consider whether the 

proceedings below complied with the constitutional guarantee of

procedural due process. (Conservatorship of Christopher A. (2006) 139 

Cal.App.4th 604, 609-610.)

One of Arabo’s overarching contentions is that the operative 

complaint failed to plead a breach of fiduciary duty cause of action 

based in fraud with specificity. 

“[C]orporate officers and directors have fiduciary duties of due 

care and loyalty to the corporation and its shareholders. . . .” 

(Friedman et al., Cal. Practice Guide: Corporations (The Rutter Group 

2020) ¶ 2:19.1, p. 2-5, italics deleted.) “[B]reach of fiduciary duty can 

be based upon either negligence or fraud, depending on the 

circumstances.” (Tribeca Companies, LLC v. First American Title Ins. 

Co. (2015) 239 Cal.App.4th 1088, 1114.) “[T]here is no clear line 

establishing when a fiduciary’s breach of the duty of care will be merely 

negligent and when it may be characterized as constructive fraud.” 

(Salahutdin v. Valley of California, Inc. (1994) 24 Cal.App.4th 555, 

563.) Breach of a fiduciary duty usually constitutes constructive fraud. 

(Ibid.) 

Arabo’s misrepresentations could have exposed him to liability 

for constructive fraud (and punitive damages). (Day v. Rosenthal

(1985) 170 Cal.App.3d 1125, 1160 [constructive fraud is an appropriate 

basis for an award of punitive damages].) However, Arabo cited no 

authority that a plaintiff is required to allege a separate constructive 

fraud cause of action where a fiduciary allegedly commits a 

misrepresentation. 
14

Arabo’s citation to Schauer v. Mandarin Gems of Cal., Inc. (2005) 

125 Cal.App.4th 949 (Schauer) for the proposition that a claim for 

breach of fiduciary duty that is fraud-based must be specifically pled is 

similarly misplaced. Schauer examined whether the plaintiff had pled 

facts sufficient to state a claim for constructive fraud. (Id. at pp. 960-

961.) Schauer did not involve a cause of action for breach of fiduciary 

duty and our independent research has not uncovered a case stating 

that a breach of fiduciary cause of action based in fraud must be 

specifically pled.7

Arabo asserts that plaintiffs’ misrepresentation theory surprised 

him at trial because no version of the complaint alleged that Habib’s 

letter was false, that Arabo misrepresented his involvement in the real 

estate transaction, or otherwise misled the board. Arabo also 

complains that plaintiffs did not disclose their misrepresentation 

theory until after the close of discovery, thus he never had an 

opportunity to depose key witnesses such as Habib, Donnet and other 

board members. Accordingly, Arabo contends that the judgment 

7 Arabo’s citation to Robison v. Caster (7th Cir. 1966) 356 F.2d 924 

for this proposition is inapt because federal law requires that plaintiffs 

allege any claim that contains averments of fraud, including a 

fraudulent breach of fiduciary duty, with particularity. (Id. at p. 925, 

citing Fed. Rule Civ. Proc., § 9(b); see also Borsellino v. Goldman Sachs 

Grp., Inc. (7th Cir. 2007) 477 F.3d 502, 507 [“Rule 9(b) applies to 

‘averments of fraud,’ not claims of fraud, so whether the rule applies 

will depend on the plaintiffs’ factual allegations.”].)
15

violated his right to due process. As we shall explain, no due process 

violation occurred.8

A “cause of action” is comprised of three core elements, namely 

(1) “a ‘primary right’ of the plaintiff”; (2) “a corresponding ‘primary 

duty’ of the defendant”; and (3) “a wrongful act by the defendant 

constituting a breach of that duty.” (Mycogen Corp. v. Monsanto Co.

(2002) 28 Cal.4th 888, 904.) “ ‘[T]he primary right is simply the 

plaintiff’s right to be free from the particular injury suffered.

[Citation.] It must therefore be distinguished from the legal theory on 

which liability for that injury is premised: “Even where there are 

multiple legal theories upon which recovery might be predicated, one 

injury gives rise to only one claim for relief.” ’ ” (Ibid.) 

“A change of theory as to the basis of recovery or as to the 

measure of damages is not a change of cause of action or the 

substitution of a new and different action for the original.” (Wells v. 

Lloyd IV (1936) 6 Cal.2d 70, 88.) For example, in addressing whether 

an amended complaint was barred by the statute of limitations, our 

high court stated that “the only substantial difference between the 

factual situations set forth in the original and the fifth amended 

complaint is that the former charged that the representations were 

negligently made while the latter charges that they were made with 

knowledge of their falsity. Despite the change in legal theory from an 

8 In his opening brief, under “statement of appealability” Arabo 

contends we may review the trial court’s order denying his new trial 

motion on appeal from the underlying judgment. Arabo, however, 

never argued that the trial court erred in denying his new trial motion 

and we deem the argument forfeited. (Collin v. CalPortland Co. (2014) 

228 Cal.App.4th 582, 600 [contention not presented under separate 

heading, with supporting factual analysis, forfeited].)
16

action for negligence to one for fraud, it cannot be said that an entirely 

different cause of action is stated.” (Wennerholm v. Stanford University 

School of Medicine (1942) 20 Cal.2d 713, 718.) Accordingly, “a shifting 

from one theory of liability to another” does not require amendment to 

conform to proof “when the basic facts are the same.” (Bruckman v. 

Parliament Escrow Corp. (1987) 190 Cal.App.3d 1051, 1060

(Bruckman).)

The parties dispute whether the controversy surrounding the 

veracity of Habib’s letter was uncovered before or after discovery 

closed. We are unable to ascertain from the record the date discovery 

closed. Nonetheless, the record reflects that during the discovery 

process Arabo had notice of plaintiffs’ theory that he breached his 

fiduciary duty to NMA by misrepresenting his participation in the sale 

of the building. Briefly, in March 2017, plaintiffs’ prior counsel sent a 

letter to defense counsel as part of settlement negotiations arguing that 

Arabo misrepresented material facts to the board. The head of plaintiff 

LS & SLG, Inc. also testified at his deposition that Arabo participated 

in presenting facts to the board regarding the bonus and that these 

facts influenced the board’s vote.

Arabo acknowledged plaintiffs’ misrepresentation theory in his 

trial brief stating: “Plaintiffs apparently intend to rely exclusively on 

their false contention that Mr. Arabo misrepresented his involvement 

with the sale of the NMA building to the board. However, the evidence 

at trial will show that Mr. Arabo made no such misrepresentation, and 

that the NMA board knew exactly how Mr. Arabo’s participation in the 

sale process resulted in an increase in the sales price ultimately 

received.”
17

Any variance between the allegation in the operative complaint 

and the proof presented at trial with respect to the bonus was not 

material under the circumstances of this case because Arabo was not 

“actually misled” to his prejudice. (Code Civ. Proc., §§ 469, 470; Cal. 

Const., art. VI, § 13 [“No judgment shall be set aside . . . as to any 

matter of pleading, . . . unless, after an examination of the entire cause, 

including the evidence, the court shall be of the opinion that the error 

complained of has resulted in a miscarriage of justice.”].) Arabo knew 

about plaintiffs’ misrepresentation theory and the controversy 

surrounding the truth of Habib’s letter.9 When the issue exploded at 

trial, the court allowed the parties to question Habib and Donnet at 

length.10

Arabo’s right to retain the bonus had been at issue since the 

inception of this action. The circumstances show that any variance 

between the pleading and proof was not material and that the case was 

fairly tried on the merits as though the variance had not existed. 

(Buxbom v. Smith (1944) 23 Cal.2d 535, 543 [“the matter of pleading 

becomes unimportant when a case is fairly tried upon the merits and 

under circumstances which indicate that nothing in the pleadings 

9 When trial commenced, both sides believed Habib would disavow

his letter. Habib’s testimony affirming the truth of the letter surprised 

both sides. 

10 Neither side deposed Habib, or sought leave to depose him after 

the close of discovery. Additionally, Arabo could have requested leave 

to call other board members to testify but did not do so.
18

misled the unsuccessful litigant to his injury”].)11 To the extent 

plaintiffs’ theory of liability may have shifted based on evidence 

uncovered after the close of discovery, this shift did “not require 

amendment to conform to proof when the basic facts [were] the same.” 

(Bruckman, supra, 190 Cal.App.3d at p. 1060; Smith v. Los Angeles 

Bookbinders Union (1955) 133 Cal.App.2d 486, 495 (Smith) [“When the 

basic facts are the same a shifting from one theory of liability to 

another is not the substitution of a new cause of action.”], Smith

disapproved on other grounds in MacLeod v. Tribune Pub. Co., Inc.

(1959) 52 Cal.2d 536, 551.) 

On this record, we conclude that Arabo did not suffer a violation 

of his right to due process.

11 Arabo’s citation to cases for the proposition that a trial court 

cannot enter judgment on a claim outside the issues framed in the 

pleadings is misplaced because these cases all involved situations 

where the pleadings did not inform the defendant of the relief

ultimately awarded by the trial court, or the trial court allowed 

evidence of damages disavowed by the plaintiff during discovery. (See 

Campain v. Safeway Stores, Inc. (1972) 29 Cal.App.3d 362, 364-366 

[defendant’s defense prejudiced when trial court allowed evidence on 

lost earnings when plaintiff stated during discovery that she was not 

seeking damages based on lost earnings]; Brown v. North Ventura Road 

Development Company (1963) 216 Cal.App.2d 227, 234 [appellate court 

reversed damages award because damages never requested in 

pleading]; Clark v. Redlich (1957) 147 Cal.App.2d 500, 505-506 [trial 

court erred by awarding defendants damages based on improper 

issuance of a preliminary injunction where no pleading sought 

damages]; Sharp v. Big Jim Mines (1940) 39 Cal.App.2d 435, 442-443 

[trial court erred by enjoining the levy of further corporate assessments 

where the “sole question presented by the pleadings” was validity of a 

meeting].) 
19

B. Alleged Hearsay Violation 

1. Additional Background

During trial, plaintiffs’ counsel showed Habib an e-mail that 

Habib sent to him on September 1, 2017. The e-mail pertained to a

declaration that plaintiffs’ counsel had prepared for Habib’s signature. 

When Arabo objected that the document had not been produced during 

discovery, plaintiffs’ counsel stated that the document could be used to 

refresh the witness’s recollection and was also a prior inconsistent 

statement. The trial court overruled Arabo’s leading and lack of 

foundation objections and plaintiffs’ counsel used the document to 

refresh Habib’s recollection. Habib denied telling plaintiffs’ counsel 

that Arabo told him what to put in the letter “ ‘word-for-word.’ ” 

Plaintiffs then called attorney Wilson as a rebuttal witness to 

testify regarding prior inconsistent statements Habib made during the 

telephone conversations with plaintiffs’ counsel. Oram tendered a 

hearsay objection and argued that Wilson was not listed as a witness. 

Arabo argued that because Habib had not been cross-examined, that 

there was nothing to rebut. The trial court overruled these objections. 

Wilson testified that he took contemporaneous notes of the 

conference call with Habib and e-mailed those notes to another 

attorney immediately after the call ended. Plaintiffs’ counsel asked to 

display the notes to impeach Habib. Arabo did not object, but 

complained that he had never seen the exhibit. The trial court allowed 

plaintiffs’ counsel to display the notes to impeach Habib. Later, the 

court overruled Arabo’s hearsay objections to two questions asking 

Wilson whether he had written what was displayed. During cross-
20

examination, Arabo’s counsel asked Wilson numerous questions that 

Wilson answered by referring to the document. 

During Habib’s further direct examination, Arabo’s counsel 

questioned Habib regarding the veracity of his letter. During crossexamination, plaintiffs’ counsel extensively referred to four exhibits 

without objection and Habib testified regarding portions of these

exhibits. The exhibits were: (1) Wilson’s e-mail with notes taken 

during a telephone conference with Habib (Exhibit 591); (2) an 

unsigned declaration prepared by plaintiffs’ counsel for Habib’s 

signature with Habib’s handwritten revisions (Exhibit 592); (3) a 

version of Habib’s unsigned declaration with portions stricken out by 

Habib (Exhibit 607); and (4) an e-mail from one of plaintiffs’ attorneys

memorializing a conversation with Habib (Exhibit 608). We collectively 

refer to the four exhibits as “the exhibits.”12

The following day, plaintiffs’ counsel sought to admit the exbibits. 

NMA objected to exhibits 591 and 592 on hearsay grounds. Plaintiffs’ 

counsel responded that the exhibits were admissible under Evidence 

Code13 sections 1235 and 1241 as hearsay exceptions for prior 

inconsistent statements and contemporaneous statements. The court 

admitted the two exhibits as impeachment documents and under

exceptions to the hearsay rule. Later, the trial court admitted exhibits

607 and 608 after plaintiffs used these exhibits without objection 

during trial.

12 In response to Habib’s testimony, and instead of calling all of 

plaintiffs’ attorneys to testify, the parties stipulated that the testimony 

of each of plaintiffs’ attorneys would be consistent with Wilson’s 

testimony.

13 Undesignated statutory references are to the Evidence Code. 
21

2. Analysis

Arabo asserts that the trial court erred in admitting the exhibits 

because they (1) improperly made plaintiffs’ counsel a witness at trial 

and (2) did not qualify for admission under an exception to the hearsay 

rule. Plaintiffs respond that Arabo forfeited this challenge by failing to 

object to the exhibits at trial and not providing any meaningful 

argument to support his claim that an objection would have been futile. 

Generally, “ ‘the failure to object to errors committed at trial 

relieves the reviewing court of the obligation to consider those errors on 

appeal.’ ” (In re Seaton (2004) 34 Cal.4th 193, 198.) Although we are 

usually “not prohibited from reaching a question that has not been 

preserved for review by a party” and may often exercise our discretion 

to do so (People v. Williams (1998) 17 Cal.4th 148, 161, fn. 6), this 

general rule does not apply “when the issue involves the admission 

(Evid. Code, § 353) or exclusion (id., § 354) of evidence.” (Ibid.)14 This 

case presents an example of why objections need to be specifically and 

timely presented to the trial court to preserve the issue on appeal.

Plaintiffs’ counsel refreshed Habib’s recollection using an e-mail 

that Habib sent to plaintiffs’ counsel on September 1, 2017, regarding 

the declaration counsel had prepared for Habib’s signature. Upon 

reviewing the document, Habib admitted that he made the blue 

markings on the document. The court overruled Arabo’s leading and 

lack of foundation objections. 

14 Section 353, subdivision (a) provides: “A verdict or finding shall 

not be set aside, nor shall the judgment or decision based thereon be 

reversed, by reason of the erroneous admission of evidence unless: [¶] 

(a) There appears of record an objection to or a motion to exclude or to 

strike the evidence that was timely made and so stated as to make clear 

the specific ground of the objection or motion . . . .” (Italics added.)
22

A witness is permitted to “use[] a writing to refresh his memory 

with respect to any matter about which he testifies.” (§ 771, subd. (a).)

A witness’s “[m]emory may be refreshed using a writing that is not 

admissible into evidence.” (In re Berman (1989) 48 Cal.3d 517, 525.) 

Additionally, leading questions are permissible on direct examination 

to stimulate a witness’s recollection. (People v. Williams (1997) 16 

Cal.4th 635, 672.) Here, the trial court allowed plaintiffs’ counsel to

use the document to refresh Habib’s recollection, a ruling not 

challenged by Arabo on appeal. (Howard v. County of San Diego (2010) 

184 Cal.App.4th 1422, 1432 [issue not raised before the trial court 

forfeited].)

Thereafter, the trial court allowed Wilson to testify. In his reply 

brief, Arabo argues that the trial court erred by allowing testimony 

from plaintiffs’ attorneys. Arabo claims that the testimony created 

chaos that deprived him of due process. Presumably, Arabo tendered 

this argument in his reply brief because plaintiffs argued in their 

respondent’s brief that attorneys may provide impeachment evidence in 

support of their own clients. (American Indian Model Schools v. 

Oakland Unified School Dist. (2014) 227 Cal.App.4th 258, 275-276 

[although appellate courts will not ordinarily consider issues newly 

raised in the reply brief, an issue is not new if it rebuts arguments 

made by the respondent in respondent’s brief].) 

Arabo cited no authority directly supporting his argument that 

the court erred in permitting Wilson to provide impeachment 
23

testimony.15 Rather, Arabo relies on the California Rules of 

Professional Conduct, which are “intended to regulate professional 

conduct of lawyers” and provide that “[a] willful violation of any of 

these rules is a basis for discipline.” (Cal. Rules of Prof. Conduct, rule 

1.0, subds. (a), (b).) Arabo overlooks section 700, which provides, 

“Except as otherwise provided by statute, every person, irrespective of 

age, is qualified to be a witness and no person is disqualified to testify 

to any matter.” Moreover, our high court recently reaffirmed that “ ‘a 

trial court may not deny the defendant the right to present . . . evidence 

through the testimony of his counsel, notwithstanding the provisions 

relating to testimony by counsel in the Rules of Professional Conduct.’ ”

(People v. Silveria and Travis (2020) 10 Cal.5th 195, 278-279.)

An attorney has a duty to represent a client zealously within the 

bounds of the law. (Hawk v. Superior Court (1974) 42 Cal.App.3d 108, 

126.) Under the unusual circumstances of this case, we cannot 

conclude that the trial court erred in admitting Wilson’s testimony for 

impeachment.

Significantly, Arabo did not object to plaintiffs’ request to display 

Wilson’s written notes of the conference call with Habib on hearsay 

15 A witness’s credibility may be attacked by any party, including 

the party calling the witness. (§ 785.) Additionally, except as 

otherwise provided by statute, the trier of fact may consider in 

determining the credibility of a witness “any matter that has any 

tendency in reason to prove or disprove the truthfulness of his [or her] 

testimony at the hearing.” (§ 780, italics added.) Arabo did not argue 

to the trial court that Wilson’s testimony did not qualify as 

impeachment evidence and forfeited any such challenge on appeal. 

(§ 353, subd. (a); People v. Boyette (2002) 29 Cal.4th 381, 424 

[“ ‘Specificity is required both to enable the court to make an informed 

ruling on the motion or objection and to enable the party proffering the 

evidence to cure the defect in the evidence.’ ”].)
24

grounds and failed to preserve this challenge on appeal. (Roe v. Halbig

(2018) 29 Cal.App.5th 286, 309-310 [plaintiff forfeited “any challenge to 

hearsay statements contained in the declaration . . . by failing to object 

on that basis below”].)16 During cross-examination, Arabo’s counsel

then asked Wilson numerous questions which Wilson answered by 

referring to the document. Finally, while cross-examining Habib, 

plaintiffs’ counsel extensively referred to the exhibits without objection, 

and Habib testified regarding portions of the exhibits without objection. 

The following day, when plaintiffs’ counsel sought to admit the 

exbibits, NMA objected to exhibits 591 and 592 (Wilson’s e-mail with 

notes taken during a telephone conference with Habib and Habib’s 

unsigned declaration with his handwritten revisions) on hearsay 

grounds, Arabo did not join in this objection. (See People v. Wilson

(2008) 44 Cal.4th 758, 793 [“Generally, failure to join in the objection or 

motion of a codefendant constitutes a waiver of the issue on appeal.”].) 

The court admitted the two exhibits as impeachment documents and 

under exceptions to the hearsay rule. The trial court also admitted 

exhibits 607 and 608 (Habib’s unsigned declaration with portions 

stricken out by Habib and an e-mail from one of plaintiffs’ attorneys 

memorializing a conversation with Habib) after plaintiffs used these 

exhibits without objection during trial.

Arabo argues that a joint in limine motion seeking to exclude 

“evidence outside the facts/issues presented in Plaintiffs’ Second 

16 During Wilson’s testimony, the court overruled Arabo’s hearsay 

objections to two questions asking Wilson whether he had written what 

was displayed. Arabo does not argue that the trial court erred in 

overruling these two objections and forfeited any such challenge on 

appeal.
25

Amended Complaint. . . .” preserved a hearsay objection to the exhibits

on appeal. We disagree.

A motion in limine to exclude evidence is sufficient to preserve an 

objection if the motion (1) is directed to a particular, identifiable body of 

evidence; (2) states a specific legal ground for exclusion that is 

subsequently raised on appeal; and (3) is made at a time before or 

during trial when the trial court can determine the evidentiary issue in 

its appropriate context. (People v. Morris (1991) 53 Cal.3d 152, 190

(Morris), disapproved on another ground in People v. Stansbury (1995) 

9 Cal.4th 824, 830, fn. 1.) If each of these conditions is satisfied, 

defense counsel would be “justified in concluding that a mere repetition 

of the same objection advanced on the motion in limine would serve no 

useful purpose.” (Morris, at p. 189.)

In this matter, the motion in limine was wholly insufficient to 

preserve a hearsay objection to the exhibits for appeal. As a 

preliminary matter, Oram filed the motion in limine, not Arabo. 

Although Arabo claims that he joined in the motion, he failed to provide 

a record cite to the purported joinder. (Cal. Rules of Court, rule 

8.204(a)(1)(C) [appellate brief must “[s]upport any reference to a matter 

in the record by a citation to the volume and page number of the record 

where the matter appears.”].)17 Assuming, for the sake of analysis, 

that a proper joinder exists, the motion sought to exclude irrelevant 

evidence and evidence not relevant to the transactions contained in the 

operative complaint. The motion was not directed to a particular 

identifiable body of evidence that would have allowed the trial court to 

17 Undesignated rule references are to the California Rules of 

Court.
26

determine the evidentiary question in the same context as it was 

presented at trial. (Morris, supra, 53 Cal.3d at p. 190.) Nor did the 

motion raise a hearsay objection. (Ibid.) Accordingly, the in limine 

motion failed to preserve a hearsay objection to the exhibits for 

appellate review.

Finally, even assuming the trial court erred by admitting the 

exhibits, the error was harmless because the trial court, sitting as the 

trier of fact, had already heard extensive testimony regarding the 

exhibits from both Wilson and Habib without objection. (See Huang v. 

L.A. Haute (2003) 106 Cal.App.4th 284, 292, fn. 9 [alleged error in 

refusing to admit medical records showing what plaintiff told her 

doctor was harmless because records duplicated plaintiff’s testimony].) 

Accordingly, we reject Arabo’s argument that the trial court 

prejudicially erred when it admitted the exhibits into evidence.

C. Remaining Arguments

In an abundance of caution, should we agree that the trial court 

improperly ordered him to return the bonus, Arabo argues that no 

alternative grounds support affirmance of the court’s order regarding 

the bonus. Because we rejected Arabo’s arguments and affirmed the 

trial court’s order that Arabo must return the bonus to NMA, the 

parties’ arguments whether alternative grounds exist to support the 

court’s order are moot and we need not address them.

In his reply brief, Arabo argues that an undisclosed payment to 

Donnet created prejudicial error that requires reversal because it is 

reasonably probable that a result more favorable to him would have 

been reached in the absence of the error. Arabo did not tender this 

argument in his opening brief under a separate heading or subheading. 
27

(Rule 8.204(a)(1)(B).) Nonetheless, because plaintiffs argued this issue 

in their respondent’s brief, we will consider the argument on its merits.

After Donnet’s initial testimony, and before Habib’s second round 

of testimony, the trial court stated that if Habib testified again it 

wanted further testimony from Donnet. In their post-trial costs 

memorandum, plaintiffs sought to recover $3,125 in fees paid to Donnet 

for her second round of testimony. Plaintiffs’ counsel represented to 

the trial court that, because they called Donnet a second time at the 

trial court’s request, plaintiffs agreed to compensate her for her time 

going forward. The trial court taxed these costs finding that because 

Donnet was not an expert witness, she was only entitled to the ordinary 

witness fee of $35. The court also concluded that the undisclosed 

payment did not warrant a new trial.

Relying on federal authority, Arabo contends that the payment to 

Donnet was inappropriate. Arabo’s reliance on these federal cases is 

inapt because the California Rules of Professional Conduct address the 

issue.18 Specifically, the California Rules of Professional Conduct, rule 

3.4 (formerly rule 5-310) states, “A lawyer shall not: [¶] . . . [¶]

(d) directly or indirectly pay, offer to pay, or acquiesce in the payment 

18 See Mataya v. Kingston (7th Cir. 2004) 371 F.3d 353, 359 [paying 

a witness, other than an expert witness, for testimony unlawful in 

federal trials, 18 U.S.C. § 201(c)(2)]; Golden Door Jewelry Creations, 

Inc. v. Lloyds Underwriters (S.D.Fla.1994) 865 F.Supp. 1516, 1524 

[improper to pay an occurrence witness any fee for testifying under 

Florida Rules of Professional Conduct]; U.S. v. Cervantes-Pacheco (5th 

Cir. 1987) 826 F.2d 310, 315 [jury must evaluate the testimony of a 

compensated witness]; Skin Pathology Associates, Inc. v. Morgan 

Stanley & Co. Inc. (S.D.N.Y. 2014) 27 F.Supp.3d 371, 377-378

[nondisclosure of fee-sharing arrangement a crime under federal 

regulations].
28

of compensation to a witness contingent upon the content of the 

witness’s testimony or the outcome of the case.” (See also, State Bar of 

California, Committee on Professional Responsibility and Conduct,

Formal Opinion No. 1997-149 (1997) [attorney may pay non-expert 

witness for the time spent preparing for a deposition or a trial, but the 

attorney must comply with the requirements of rule 5-310(B) of the 

California Rules of Professional Conduct].)

Arabo cites absolutely no evidence showing that plaintiffs’ 

payment to Donnet was contingent upon the content of her testimony 

or the outcome of the case. Rather, in a sworn declaration, plaintiffs’ 

counsel states that Donnet submitted an invoice for her time spent 

reviewing documents prior to her second court appearance. On this 

record, we reject Arabo’s implied contention that plaintiffs’ counsel and 

Donnet (who is also a licensed attorney), agreed that plaintiffs’ $3,125

payment was contingent upon the content of Donnet’s testimony or the 

outcome of the case.

D. Sanctions Motions

Plaintiffs request sanctions against Arabo and his appellate 

counsel for pursuing a frivolous appeal. (Code Civ. Proc., § 907; rule 

8.276.) Arabo argues that plaintiffs’ motion should be stricken and

lacks merit. Should we agree with this assertion, Arabo suggests we 

consider sanctions against plaintiffs and their appellate counsel for 

filing the motion.

Code of Civil Procedure section 907 provides that “[w]hen it 

appears to the reviewing court that the appeal was frivolous or taken 

solely for delay, it may add to the costs on appeal such damages as may 

be just.” Additionally, rule 8.276(a)(1) allows the court to impose 
29

sanctions on a party or an attorney for the taking of a frivolous appeal 

or appealing solely to cause delay. 

“[S]anctions should be used sparingly to deter only the most 

egregious conduct.” (Kleveland v. Siegel & Wolensky, LLP (2013) 215 

Cal.App.4th 534, 557 (Kleveland).) “ ‘[A]ny definition [of a frivolous 

appeal] must be read so as to avoid a serious chilling effect on the 

assertion of litigants’ rights on appeal. Counsel and their clients have 

a right to present issues that are arguably correct, even if it is 

extremely unlikely that they will win on appeal. An appeal that is 

simply without merit is not by definition frivolous and should not incur 

sanctions.’ ” (In re Reno (2012) 55 Cal.4th 428, 513.) “An unsuccessful 

appeal, . . . ‘ “should not be penalized as frivolous if it presents a unique 

issue which is not indisputably without merit, or involves facts which 

are not amenable to easy analysis in terms of existing law, or makes a 

reasoned argument for the extension, modification, or reversal of 

existing law.” ’ ” (Kleveland, at p. 557.) Whether to impose appellate 

sanctions is a matter within our broad discretion. (Winick Corp. v. 

County Sanitation Dist. No. 2 (1986) 185 Cal.App.3d 1170, 1181-1182.)

“[A]n appeal should be held to be frivolous only when it is 

prosecuted for an improper motive—to harass the respondent or delay 

the effect of an adverse judgment—or when it indisputably has no 

merit—when any reasonable attorney would agree that the appeal is 

totally and completely without merit.” (In re Marriage of Flaherty

(1982) 31 Cal.3d 637, 650 (Flaherty).) “In determining whether an

appeal indisputably has no merit, California cases have applied both 

subjective and objective standards. The subjective standard looks to 

the motives of the appealing party and his or her attorney, while the 
30

objective standard looks at the merits of the appeal from a reasonable 

person’s perspective. [Citation.] Whether the party or attorney acted 

in an honest belief there were grounds for appeal makes no difference if 

any reasonable person would agree the grounds for appeal were totally 

and completely devoid of merit.” (Kleveland, supra, 215 Cal.App.4th at 

pp. 556-557.) The subjective and objective “standards are often used 

together, with one providing evidence of the other. Thus, the total lack 

of merit of an appeal is viewed as evidence that appellant must have 

intended it only for delay.” (Flaherty, at pp. 649-650.)

Applying these standards, we are not convinced that this appeal 

is totally and indisputably without merit. Although we ultimately 

determined that Arabo’s due process and hearsay arguments lacked

merit, we cannot say they were objectively devoid of any merit as to 

warrant sanctions. Because the appeal was not objectively frivolous, 

we also conclude it was not taken solely for delay. Exercising our broad 

discretion, we therefore conclude that plaintiffs are not entitled to 

sanctions in this case.

Arabo requests monetary sanctions against plaintiffs and their 

appellate counsel for filing the sanctions motion. (Rule 8.276(a)(3).)

Arabo makes this request in his opposition to plaintiffs’ sanctions 

motion and did not serve and file a separate motion under the rules 

governing appellate motion procedure, as required by rules 8.54(a) and 

8.276(b). We therefore deny the request for sanctions. (Saltonstall v. 

City of Sacramento (2014) 231 Cal.App.4th 837, 858 [respondent’s 

request for sanctions made in brief denied because the respondent did 

not file a separate motion for sanctions].)
31

E. Attorney’s Fees Under the Private Attorney General Statute

As an alternative to sanctions, plaintiffs seek their attorney’s fees 

under the private attorney general statute. (Code Civ. Proc., § 1021.5.) 

Plaintiffs admit that they did not seek an attorney’s fee award before 

the trial court based on the private attorney general statute and Arabo 

correctly argues they forfeited this claim by not making it before the 

trial court. (California Teachers Ass’n v. Mendocino Unified School 

Dist. (2001) 92 Cal.App.4th 522, 530 [party cannot raise request for 

attorney’s fees under Code of Civil Procedure section 1021.5 for first 

time on appeal]; Dowling v. Farmers Ins. Exchange (2012) 208 

Cal.App.4th 685, 696 [“We generally will not consider an argument 

asserted for the first time on appeal.”].) In their reply, plaintiffs clarify 

their argument, stating that they are “not seeking their trial fees on 

the basis of the Private Attorney General Statute—merely their 

appellate fees.” 

Code of Civil Procedure section 1021.5 permits a court to award 

attorney’s fees to a successful party in any action which has resulted in 

the enforcement of an important right affecting the public interest if 

certain prerequisites are satisfied. “ ‘An award of attorney fees under 

[Code of Civil Procedure] section 1021.5 requires the applicant to meet 

three criteria: (1) the action resulted in the enforcement of an 

important right affecting the public interest; (2) a significant pecuniary 

or nonpecuniary benefit was conferred on a large class of persons; and 

(3) the necessity of private enforcement and the attendant financial 

burden thereof make the award appropriate. Whether the applicant 

has proved each of these criteria is a matter primarily vested in the 
32

trial court.’ ” (Hogar Dulce Hogar v. Community Development Com. of 

City of Escondido (2007) 157 Cal.App.4th 1358, 1364.) 

Plaintiffs’ claim for appellate attorney’s fees is based on the trial 

court’s suspension of the board and appointment of a receiver for NMA. 

Plaintiffs argue this relief enforced important rights affecting the 

public interest. Plaintiffs fail to explain how this relief, which was not 

at issue in this appeal, entitles them to recover their appellate 

attorney’s fees. We reject the argument and deny plaintiffs’ request for 

an award of appellate attorney’s fees.

DISPOSITION

The judgment is affirmed. All requests for sanctions are denied. 

Plaintiffs are entitled to recover their costs on appeal.

IRION, J.

WE CONCUR:

BENKE, Acting P. J.

DO, J.