Filed 5/5/14 Opinion following rehearing

CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION SEVEN

AMERICAN MASTER LEASE LLC,
Plaintiff and Respondent,

v.

IDANTA PARTNERS , LTD. et al.,
Defendants and Appellants. B244689
(Los Angeles County Super. Ct. No. BC367987)

APPEAL from a judgment and an order of the Superior Court of Los Angeles County, Ramona G. See, Judge. Affirmed in part and reversed in part with dir ections. Lathrop & Gage, John Shaeffer, Jeffrey Grant and Emily Birdwhistell for Defendants and Appellants. Mayer Brown, Donald Falk; Mayer Brown, Neil M. Soltman and Germain D. Labat for Plaintiff and Respondent.

____________________2 INTRODUCTION

In this appeal we consider the questions (1) whether a defendant can be liable for aiding and abetting breach of fiduciary duty without owing the plaintiff a fiduciary duty, (2) what is the statute of limitations for aiding and abetting breach of fiduciary d uty, (3) whether the restitutionary remedy of disgorgement is available for aiding and abetting breach of fiduciary duty, and (4) what is the measure of restitution for aiding and abetting breach of fiduciary duty. We answer these questions (1) yes, (2) t hree or four years (depending whether the breach is fraudulent or non

- fraudulent), (3) yes, and (4) the net profit attributable to the wrong. Defendants Idanta Partners, Ltd., David J. Dunn, Steven B. Dunn, and the Dunn Family Trust appeal from a judgment on a jury verdict in favor of plaintiff American
Master Lease LLC (AML) and from an order denying their motion for judgment notwithstanding the verdict. The jury found defendants liable for aiding and abetting breach of fiduciary duty and awarded restitu tion in the amount of approximately $5.8
million. Defendants argue that the judgment must be reversed because they cannot be liable for aiding and abetting breach of fiduciary duty in the absence of a duty owed directly to the plaintiff, and because the a iding and abetting claim is barred by the applicable statute limitations. We find no merit in these contentions, but we do conclude
that defendants are entitled to a new trial on the amount of defendants ’ unjust enrichment

. After having grant ed a petitio n for rehearing by AML in order to give the parties an opportunity to file supplemental briefs on the valuation timing issue for restitution , w e affirm in part and reverse in part for a n ew trial on the amount of restitution

.3 FACTUAL AND PROCEDURAL BACKGR OUND 1

A. AML
Neal Roberts formed AML in 1998 for the purpose of investing in real estate

. He
observed that there were people his age who owned real property but were reaching a point in their lives where they wanted to retire and did not want to contin ue actively managing their real estate investment s . Roberts ’ idea was to allow these investors to sell their real estate to a larger entity and the n buy interests in the larger entity as tenants in

common, which would allow them to avoid adverse tax conse quences associated with the
sale of the real estate. This investment vehicle became known as a 1031 FORT, where
1031 referred to the section of the Internal Revenue Code applicable to real estate exchanges and FORT st ood for Fractionalized Ownershi p in Re al estate Tax deferred. AML initially had seven memb ers. Roberts and three trusts that he set up for his wife, his son , and his daughter owned 75 percent of AML. Jim Andrews, the Roberts family lawyer, Charles “ Duke ” Runnels (Runnels ) , and Michael Frank lin owned the remaining 25 percent. Andrews, Runnels
, and Franklin had participated in a company Roberts formed prior t o AML , and Roberts wanted them involved in AML

. Roberts was the managing member of AML. The AML Operating Agreement included an agreem ent not to compete. Paragraph 3.9 provided: “ The Members agree that the business of the LLC, either to sell
AML Products [ 2 ]

. . . directly to purchasers or to sell AML P roducts indirectly through an accommodator as part of a tax

- exempt transaction, is un ique.

. . . No Member, Principal
of a Member o r holder of an Economic Inte r est of a Member, may have any interest,

1 “We state the facts in the light most favorable to the jury’s verdict, resolving all conflicts and indulging all reasonable inferences to support the ju dgment.” ( Green Wood Industrial Co. v. Forceman Internat. Development Group, Inc. (2007) 156 Cal.App.4th 766, 770, fn. 2.)

2 Paragraph 1.4 of the Operating Agreement defines “ AML Products ” as “ direct or indirect tenancy

- in

- common interests in real proper ty. ”4

directly or indirectly, in any business that offers to sell or exchange AML Products or is otherwise competitive with [AML], nor may any suc h Member, Principal or Economic
Interest h older be employed by, or act as a consultant to, any such competitive business without the approval of a Majority In Interest of the Class A and Class B Members, voting as a Class.

. . . ”

B. T he Dunns and Idanta Partners
, Ltd. (Idanta) David J. Dunn was the founder and managing general partner of Idanta, a venture capital firm that for over 40 years had specializ ed in helping entrepreneurs create and
fin ance new companies. David Dunn was also the sole trustee of the Dunn Family Trust,
which held the bulk of his assets. David Dunn ’ s son, Steven, worked for Idanta for about

two

- and

- a

- half years and was a partner in Idanta for some of t hat time. Steve n left Idanta
in 1987 or 1988.
David Dunn and the other active partners owned about 20 percent of Idanta.
M embers of the Bass family, a wealthy Texas family engaged in the oil business , owned the other 80 percent as limited partners . The Bass family invest ed $7 or $8 million in
Idanta.

C. AML Seeks Investment Part ners AML needed an investment partner to provide funding to purchase commercial properties. The first partner , in the late 1990 ’ s, was Ethan Penner and an entity he
created for th at purpose, T

- Rex. Roberts knew about and approved the joint venture with
T

- Rex. The joint venture was supposed to pay the salaries of Runnels and Franklin, and
Roberts contributed money t o the joint venture to help pay for their compensation. Before the joint venture could complete any transactions, however, Penner withdrew f or financial reasons , and t he joint venture was dissolved in 1999. In January 2000 Roberts, Andrews, Runnels , and Franklin entered into a management agreement with AML . While Roberts remained the managing member and Chairman of the Board, Andrews, Runnel s , and Franklin agreed to function as the5

operational management of AML (collectively the Operating Group). In additi on, their
interests in AM L increase d to 13

- 1/3 percent each , while Roberts ’ interests decrease d to 60 percent. The management agreement a lso required Runnels and Franklin to use their
best efforts to find a new investment partner. In July 2000 the O perating G roup identified CB Richard Ellis as a potential investment partner. Again with Roberts ’ knowledge and approval, AML entered into a

r elationship with the newly formed CB Richard Ellis Investors 1031 (CBREI). In
December 2001 AML entered into a n exclusive license agreement with CBREI for F ORT
transactions

. During the course of the relationship CBREI grossed $86 million and paid AML $50 0,000. In the summer of 2003 CBREI lost its financing after its funding source refused to
fund the transactions . That fall, Roberts told the Operating Group that they should consider terminating AML ’ s relationship with CBREI and searching for a new
inves tment partner. 3 At a November 7, 2003 AML board meeting, the Operating Group suggested two possibilities for a new investment partner: Idanta and Warburg

- Pincus. A dispute arose at the meeting, however, between the Operating Group and Roberts. Roberts was concerned about protecting AML ’ s business method, while the Operating Group wanted to proceed with finding a new investment partner. Roberts vetoed the Operating Group ’ s proposal to pursue a new investment partner. Roberts then presented the Operatin g Group with an amendment to AML ’ s Operating Agreement, signed by him and the trustee of the three trusts. The purpose of the amendment was to make it “ absolutely clear that no deal could get done without the approval of the majority interest in the

compa ny. ”

3 In December 2003 AML converted CBREI ’ s exclusive license to a nonexclusive license and gave CBREI time to find new financing or face terminat ion of the agreement with AML.6

D

. Idanta and AML Explore the Possibility of a Relationship Steven Dunn played tennis with Tyler Runnels, Charles Runnels ’ brother. In the fall of 2003 Tyler Runnels had Steven Dunn introduce him to David Dunn to discuss a loan to AML

. Charles Ru nnels and Franklin were looking for a loan for a FORT transaction in conjunction with the CBREI joint venture. David Dunn initially refused to provide a loan commitment. At some point, however, he provided a loan commitment of $5.1 million in exchange fo r $177,000 , but he never had to make the loan. David Dunn
later tried to put together a joint venture between Idanta and CBREI but was
unsuccessful

. In January 2004 David Dunn proposed a transaction that would not include
CBREI. Idanta would form and fi nance a new company in which Idanta would own 80 percent, Runnels and Franklin would own 15 percent and manage the company, and AML would own 5 percent. This proposal was unacceptable to Roberts because Runnels
and Franklin would be “ getting far too much of the deal when, in fact, it ’ s an AML
deal

. . . . ” Roberts also objected to the interest rate Idanta w anted to charge for loans to the new company, and he did not want to grant the new company an exclusive license to engage in FORT transactions

. 4
On Ja nuary 13, 2004 David Dunn met with Runnels to discuss the situation. He
told Runnels that he was “ still interested ” in the transaction. He gave Runnels “ a lot of good reasons why he [was] better off with an independent entity like Idanta as opposed to
be ing tied to a major realty firm ” like CBREI. By the end of January 2004 the relationship between Roberts and the Operating Group was strained. Roberts and the Operating Group retained separate legal counsel.

4 At the time AML had granted exclusive licenses to T

- Rex and CBREI, no one else was engaging in FORT transactions. According to Roberts, “ by the time we get to 2004, there ’ s a whole bunch of companies that seemed to be stealing our ideas that you could have gone after who were doing billions of dollars of business, and so I was n ’ t about to give that to some venture capital entity to take care of because I didn ’ t think they knew anything about it. ”7

Roberts was allowed to speak with representat ives of Idanta only if Franklin introduced
him a nd was present at the meeting. On February 5, 2004 Franklin wrote to Roberts to set up a meeting with Steven Dunn. He urged Roberts to review the paperwork
, “ which shows that the IDANTA offer has an approxi mate value of $26.5 Million to AML with the majority of that coming from FORT sales activity.

. . . You seem willing to ‘ bet the farm ’ on potential licensing revenue when we certainly have an excellent opportunity to be in business immediately, producing FORT ’ s, generating income and creating value. ” On February 10, 2004 Andrews, Runnels , and Franklin sent Roberts a compromise proposal regarding the proposed new company. Under this proposal, “ AML [would] accept the Idanta proposal and issue it an exclusi ve license of the AML business
method

. . . . ” The agreement not to compete would be eliminated from AML ’ s Operating Agreement. The November 2003 amendment to the Operating Agreement would be rescinded, and any future amendments would require the ap prova l of the Operating Group. On February 19, 2004 Roberts presented the Operating Group with his

counter proposal. His “ central policy issue ” was the protection of AML ’ s intellectual property. He proposed entering into a joint venture with Idanta, with AML having at least a 20 percent interest in the new company . AML would grant the new company a nonexclusive license to use the AML business method. The Operating Group sent
Roberts ’ proposal to Steven Dunn, w ho forwarded it to David Dunn. In late February 2004 Roberts met with Steven Dunn . Roberts told Steven Dunn that he did not approve of David Dunn ’ s proposal and that they “ had to work out a way to go forward that was acceptable to the controlling members,

. . . majority in interest in ”
AML. Roberts to ld Steven Dunn about disputes with the Operating Group and “ that I controlled the company. And I also specifically told him

— I think I used the phrase ‘ dirty linen, ’ that we would attempt to clean up the ‘ dirty linen ’ if we were going to proceed. ”8

E

. The Operating Group Forms a New Company and Grants It a License; Idanta and the Dunns Buy Into It In approximately mid

- March 2004 Runnels incorporated FORT Properties, Inc. (FPI) , with himself and Franklin as FPI ’ s owners

. David Dunn had already negotiate d
with Runnels and Franklin an ownership interest in FPI for himself, t he Dunn Family Trust, and Idanta. Initially, Runnels and Franklin owned 100 percent of the shares of FPI. In April 2004 defendants purchased preferred shares in FPI for $2.3 million, which gave defendants an 85 percent ownership interest in FPI. The Operating Group, on behalf of AML, then granted FPI a nonexclusive license to use AML ’ s business method.
Runnels signed the licensing agreement on behalf of FPI; Andrews, Runnels , and
Fra nklin signed on behalf of AML. On March 15, 2004 David Dunn wrote to Sid Bass, one of Idanta ’ s partners, about
the deal

. David Dunn expressed his belief that “ we are involved with first

- rate professionals who have an opportunity to build a very large str ongly financed business. ”
David Dun n further state d that “ once we have done a couple of successful transactions and, again, this management has done successful transactions, we will be able to increase the number of deals we do through obtaining additiona l layers of capital. We also believe that if we become the major player in the industry, we will have a very attractive vehicle for a public offering. ” David Dunn explained that Runnels and Franklin “ finally lost patience with CBRE ” due to the failure to provide the promised financing. While “ the majority holder ” of AML ’ s business method (i.e., Roberts) wanted to go after infringers,
Runnels and Franklin were not interested in pursuing this course of action

. They
intended to draft a non

- exclusive licens e for FPI to use the business method. Andrews,
Runnels
, and Franklin
, “ as the operating people (non

- employees) of AML will inform the majority

. . . holder of their action sending him copies of the FORT Property license and a copy of the deposited check ” for the license.
Runnels and Franklin wrote to Roberts on March 17, 2004 that his February 19 proposal “ misse [d] the mark. ” They explained: “ Your opposition to any exclusive license arrangement is noted, and as a result we have been actively seeking par ties in9

addition to CBREI who are willing to enter into nonexclusive licenses. In this regard, the Operating Group has granted a nonexclusive license to [ FPI ] , a newly formed entity. ” The royalty rate was the same as the royalty rate paid by CBREI, and F PI paid an advance against royalties of $50,000. Runnels and Franklin stated that they “ believe[d] the license agreement with FPI is fair and reasonable and can provide a launching pad for the AML licensing operation. ”
Runnels and Franklin also stated th at Roberts ’ proposal that they work for the proposed venture between AML and a new company was unacceptable. They pointed out that they “ have never been employees of AML and do not plan to be in the future. ” They also stated that they had been informed b y counsel that paragraph 3.9 of the AML Operating Agreement was “ an unenforceable attempt to restrict employment under
California law. ” They notified Roberts that “ [Runnels] has decided to join FPI as its President with a view to bringing it into the 103 1 TIC [ 5 ] business. [Runnels] and other management personnel will purchase an equity interest in FPI. [Franklin] will likely also accept an offer for employment and affiliate himself with FPI. ”
Roberts received the letter on March 22, 2004 . He researched FPI and discovered
that Runnels was its the sole incorporator. He sent an email to Runnels and Franklin stating that he was “ obviously disheartened ” to learn of their conclusion that his proposal

“‘ misse [d] the mark ’ but [was] hopeful that your comments about moving forward to protect the Company ’ s intellectual property and generate revenue can lead to an agreement in that sphere. ” He also stated his belief that Runnels and Franklin were

“ bound by the non

- compete provisions of the operating agreement and that you have never had the authority to make exclusive or non

- exclusive licenses on behalf of the

company

. . . . ”
Runnels forwarded the email to David Dunn. David Dunn was aware that the authority of Runnels and Franklin to enter into the license agre ement was questionable
,

5 Tenant in common.10

but he let his son Steven, who knew about licenses, deal with the issue. Having read the email, however, David Dunn did not believe that Roberts had vetoed the license agreement. Franklin later reported to David Dunn that he had m et with Roberts and given him the $50,000 check for the advance against royalties . After discussing the matter, Roberts said, “‘ I don ’ t know whether this is the best thing that ever happened to
us or whether I ’ ve been f ’ d. ’ And [Franklin] said he told hi m it was the best thing that ever happened to him. ”

F

. Roberts Objects On September 28, 2004 Roberts ’ attorney, Neil M. Soltman, wrote to Steven Dunn. He stressed that Roberts and his family owned a majority interest in AML, and
that AML owned a busine ss method for performing tax

- deferred real estate exchanges.

“ The 1998 Operating Agreement

. . . specifically provides that without the approval of a majority in interest of AML ’ s owners, no member of AML may have any interest, directly or indirectly, in any business that offers to sell or exchange AML products or is otherwise competitive with AML, nor may any member be employed by or act as a consultant to any such competitive business. Neither the 2003 Amendment to the Operating Agreement nor any side a greement signed by some of the members of the company in any way changed these provisions. ” Soltman noted that Roberts had learned
that Runnels had formed FPI “ and that three members of AML ([ Andrews, Runnels
, and
Franklin ]) who do not collectively own a majority in interest in AML have executed a document which purports to grant a non

- exclusive license of the AML [business method]
to FPI. At no time ha s the majority in interest of AML ’ s owners approved of that
license. ” Having learned of the investment in FPI by Id anta and the Dunns, Soltman
inform ed them that the license was not authorized. Soltman advised: “ If the actions of the three individuals are, as we are now of the opinion, in breach of their duties under the AML Operating Agreement and their fiduciary duties to AML

. . . , it then follows that all compensation that they receive of any type

. . . does and will continue to belong to AML.
Since at least one of the three individuals formed FPI and executed the license on behalf11

of FPI and AML, FP I is on notice that all such compensation is to be held in trust for the benefit of AML. [¶] In addition, if FPI knowingly infringes the AML [business method], FPI will be liable to AML for all proceeds from the enterprise and for all available damages a nd remedies under the patent laws of the United States and similar state and
federal laws or decisions. ” Steven Dunn sent Soltman ’ s letter to David Dunn, who now
understood that Roberts was objecting to the transaction.
On October 2 5 , 2004 counsel for Id anta responded to the letter and stated that

“ Steve Dunn is not affiliated with Idanta Partners. Furthermore, the investment that you mentioned by Idanta Partners in Fort Properties, Inc. has been concluded. [¶] Since it

appe a rs that the matters you rai se in your letter concern disputes between Ne a l Roberts
and the other members of AML

. . . , Idanta partners believes it is appropriate for those parties to resolve those matters among themselves without the involvement of Idanta
Partners. ”

G

. FPI ’ s FORT Transactions Within a month after Soltman sent his letter, FPI cancelled the license agreement
with AML. FPI engaged in several FORT tr ansactions without AML, with its first FORT transaction closing in November 2004. Idanta and the Dunn Family Trust pr ovided financing for these transactions in the amount of $2.5 million “ [ p ] lus a commitment to put in up to 25 million for subordinated loans on [each] individual [FORT] transaction

. ” FPI paid Idanta and the Dunn Family Trust $2,450,000 in interest on tota l loans of approximately $74 million , at prime plus 8 percent

.

H

. Roberts Institutes Arbitration Proceedings Against Andrews, Runnels
, and Franklin At some point Roberts commenced arbitration proceedings against Andrews,
Runnels
, and Franklin

. On Decem ber 4, 2008 the arbitrator issued a final arbitration award, finding that some of the conduct by Runnels and Franklin constituted a breach of their fiduciary duties to AML, and some of it did not. “[ T ] he A rbitrator found [ that ] the12

appropriate remedy was an equitable remedy of requiring Runnels and Franklin to transfer a certain percentage of the [FPI] shares to Roberts based on his 60% ownership
in AML. ” Roberts filed a petition to confirm the arbitration award , but the parties to the
arbitration settled their disputes and Roberts dismissed the petition. ( Roberts v. Andrews (Super. Ct. L

. A

. County, 2009, No. BS120091)

. )

I

. Idanta and the Dunn Family Trust End Their Relationship With FPI On March 15, 2007 AML filed this action against Idanta, the Dunn Family Trust,
David Dunn and Steven Dunn, and Jonathan Huberman, 6 one of Idanta ’ s partners

. AML alleged causes of action for aiding and abetting breach of fiduciary duty, inducing breach of contract, conspiracy to induce breach of contract, interference w ith contractual relations, conspiracy to interfere with contractual relations, unfair competition
, and unjust
enrichment. A few months later, i n June 2007, FPI agreed to pay Idanta and the Dunn Family Trust $5.8 million for the preferred stock they had pu rchased in April 2004 for $2.3
million. The initial payment for the repurchase of the stock was $2.9 million, with the payment of another $2.9 million after closing. 7 FPI made the first $2.9 million payment,
and then , during the pend ency of this litigati on in 2009
, paid $300,000 towards the

6 Huberman is not a party to this appeal.

7 It is unclear from the record whether the second payment from FPI to defendants was a fixed $2.9 million or some percentage of FPI’s profits that may have been valued at $2.9 million. AML’s expert, Kelly Melle, testified that there was a “closing payment” of $2.9 million and a “post closing payment” of another $2.9 mill ion. During discussions with the court over the jury instructions, however, counsel for AML stated that the terms of defendants’ sale of their stock back to FPI had “a cash component” (presumably the first $2.9 million payment) and a “retained .

. . futur e profit interest” in FPI of “25 percent of [FPI’s] profits,” and that Melle was going to value this “25 percent profit interest” at over $2 million. Neither side points to any direct evidence of the terms of this transaction, and the copy of Melle’s demo nstrative exhibit that might shed light on this issue is illegible. For purposes of this appeal, we assume that the June 2007 transaction between defendants and FPI contemplated two $2.9 million payments.13

second $2.9 million payment

. Idanta and the Dunn Family Trust agreed to accept an additional $100,000 in lieu of the remaining $2.6 million owed on the second payment. From March 2004 through December 2009 FPI experi enced a net loss of about $600,000 to $700,000.

J

. The Litigation
1. Rulings on the Pleadings On July 5, 2007 defendants filed a demurrer to AML ’ s first amended complaint. They argued in part that AML could not state a claim for aiding and abetting a breach of fiduciary duty because they did not owe a fiduciary duty to AML. The trial court , Hon. Edward Ferns, sustained the demurrer with leave to amend . The court ruled th at while a defendant must owe an independent duty to the plaintiff in order to b e liable for conspiracy to breach that duty ( Applied Equipment Corp. v. Litton Saudi Arabia Ltd. (1994) 7 Cal.4th 503, 510

- 511), a defendant need not owe an independent duty to the plaintiff in order to be liable for aiding and abetting a breach of that du ty ( Casey v. U.S.
Bank Nat

. Assn

. (2005) 127 Cal.App.4th 1138, 1144). In other words, the court ruled that

a iding and abetting is an independent tort even though conspiracy is not. The court
nevertheless sustained the demurrer to AML ’ s aiding and abettin g cause of action on the ground AML had failed to plead sufficient facts to state a cause of action for aiding and abetting a breach of fiduciary duty by Andrews, Runnels
, and Franklin

. Specifically, the court ruled that AML had not sufficiently alleged t hat defendants knew the conduct of Andrews, Runnels, and Franklin constitut ed a breach of fiduciary duty, or that defendants gave the three of them substantial a ssistance or encouragement. On June 27, 2008 AML filed its fourth amended complaint alleging c auses of action for aiding and abetting a breach of fiduciary duty, interference with contract, unfair competition
, and unjust enrichment. The trial court sustained defendants ’ demurrer to the causes of action for unfair competition and unjust enrichment without
leave to amend

. The court ruled that although the conduct of Andrews, Runnels , and
Franklin “ in unfairly competing with [AML] may be considered ” unfair competition,14

AML was not entitled to injunctive relief or disgorgement under “ California ’ s unfa ir competition law. ”

2. Defendants ’ Motion for Summary Judgment On June 26, 2009 defendants filed a motion for summary judgment or in the
alternative summ ary adjudication. They argued that the arbitrator ’ s ruling on AML ’ s breach of fiduciary duty clai m was collateral estoppel on AML ’ s claim in this action, and
that the arbitrator ’ s equitable remedy gave Roberts “ complete satisfaction. ” Defendants also argued that they could not be liable for interference with contract because paragraph 3.9 of the AML Operating Agreement, the agreement not to compete, was void
and unenforceable. The trial court denied the motion on the grounds the parties in this

case were not the same as the parties in the arbitration and that the unconfirmed
arbitration award was not binding. The court did not address the validity of the non

compet ition agreement.

3

. Evidence of the Unjust Enrichment After multiple continuances, t he trial finally began on June 13, 2012 before Judge
Ramona See

. 8 During the trial
, AML’s expert, Me lle
, testified that he was “ asked to compute the dollar amount of the benefit that the defendants received [ as of June 13,
2012 ] from a revolving loan agreement and a preferred stock sale

. ” 9 Melle calculated
that def endants earned $2,328,892 interest on l oan s to FPI between 2004 and 2007, and

8 On February 27 , 2012 the parties stipulated to a waiver of the five

- year period in which to commence trial

. ( See Code Civ. Proc., §§ 583.310, 583.330, subd. (a)

. )

9 D efendants had filed a motion in limine seeking to exclude evidence of “ any alleged damage sustained by [AML] based upon the purported ‘ benefits ’ d efendants received from ” interest on the loan to FPI and the sale of FPI stock. Defendants argued that these amounts were not damages proximately caused by the tortious conduct alleged in the complaint. The trial court denied the motion as a “ failed motion[] for summary adjudication. ”15

that with prej udgment interest the total amount of this benefit was $3,399,287. The jury
did not award this amount.
Melle also “ did an analysis of the benefits [defendants] received ” from the June
2007 sale of their FPI stock. The “ sale called for a payment of 2.9 million dollars and then following the closing, other payments of another 2.9 million, for a total of 5.8 million dollars or 5,808,826 dollars. ” Adding interest through June 13, 2012, Melle
calculated tha t the total amount of this benefit was $7,075,891.
Melle acknowl edged that shortly after he had performed his calculations, “ there were payments of about 300,000 dollars, ” and that defendants subsequently “ took 100,000 dollars instead of [the remaining] 2

. 6 million. ” Melle’s calculations , however,
did not take into account the fact that defendants did not receive all of the second $2.9 million payment and therefore did not receive the entire $5.8 million. Nor did Melle take
into account defendants’ initi al investment of $2.3 million to acquire the FPI stock . He
stated that he did not take these facts into account because his task was to calculate the (gross) benefits defendants received “at the time they closed the deal,” not “ profits. ”

4

. Jury Instru ctions
T he court and counsel had several discussions, some before trial and some in the middle of trial, about the parties ’ proposed CACI and special jury instructions. AML objected to CACI No. 3900, “ Introdu ction to Damages, ” because it instructed the j ury on traditional tor t damage theories, while AML sought restitution based on disgorgement and constructive trust. AML had drafted special instructions to cover its restitution theories. Defendants objected to AML ’ s special instruction Nos. 3 and 4 rega rding unjust
enrichment and constructive trust , arguing that the trial court had previously sustained
their demurrer to AML ’ s cause of action for unjust enrichment and that there was nothing over which a constructive trust could be imposed

. Defendants als o objected to AML ’ s special instruction N os. 7 and 8 regarding the calculation of the amount of disgorgement
and the imposition of a constructive trust with respect to the date as of which the
restitution amounts should be calculated . Defendants argued th at these instructions failed16

to include any offset for amounts paid by defendan ts. The trial court took the matter of the jury instructions under submission. During Melle ’ s testimony, counsel for defendants attempted to question him on

cross

- examination about whether he had included any off sets in his calculations. Counsel
for AML objected , pointing out that there was “ an approved jury instruction, special number 8, which says the jury can ’ t take that into account

. ” After consider ing the matter the tria l court ruled that it was going to modify this instruction to refer to “ profit ” rathe r than “ economic benefit, ” because “ [d]isgorgement deals with profit . A nd profit by its very definition is calculated less expenses. ” The record reflects, however, that the trial court ultimately did not give this instruction. 10

5

. Motion for Nonsuit Following the conclusion of AML ’ s case

- in

- chief defendants moved for a judgment of nonsuit “ as to both claims on the basis that they are barred by the statute of
limitatio ns and as to the second cause of action for interference with contract on the basis that there has not been proof offered of a valid and enforceable contract. ” The trial court
denied the motion and ruled t hat the limitations period for AML ’ s cause of acti on for aiding and abett ing a breach of fiduciary duty wa s four years pursuant to Code of Civil
Procedure section 343 and In re Brocade Communications Systems, Inc. Derivative Litigation (N.D. Cal. 2009) 615 F.Supp.2d 1018, 1037. The trial court stated that the limitations period for interference with con tract wa s two years. The court found, however, that “ [a]lthough it appears that all aspects of the claims that are the subject of this lawsuit were known at the time of the September 28, 2004 letter sent by Neil
Soltman to Steven Dunn

. . . , there re ma in issues of fact for the jury to decide regarding

10 The court reporter did not transcribe the trial court’s reading of the instructions to the jury . This particular instruction does not appear in the set of written instructions included as given in the record o n appeal.17

the effect of a subsequent response letter from Idanta dated October 4, 2004 and the meaning of the wor d ‘ concluded ’ within that letter. ”
On the issue of the existence of a valid contract, the court noted that the ruling on
defendants ’ summary judgment motion was that they “ did not meet their burden of proof

. . . , not that the defense o r claims asserted by Defendants lacked merit. ” When
defendants raised th e issue again in a motion in limine, the trial court denied the motion

“ on the grounds that it was a disguised motion for summary judgment not that the
substance of the motion lacked merit. ”

6

. Deliberations The trial court instructed the jury, pursuan t to CACI No. 3900 , that if it found
AML had proved its claims against defendants, the jury then had to decide how much money would reasonably compensate AML for the “ harm. ” The court instructed the jury pursuant to special instruction No. 3 that “ [t]he e lements of an unjust enrichment claim are (1) the receipt of a benefit from another; and (2) the unjust retention of the benefit at the expense of another
, ” and that if the jury found that defendants were unjustly enriched at AML’s expense, the n it could “ award [AML] the amount by which Defendant has been unjustly enriched .” During deliberations, the jury sent the court a note asking the court to define

“ harm ” and “ benefit. ” Counsel noted that there were no instructions defining “ harm. ” Special instructi on No. 4, Calculation of Disgorgement of Defendants ’ Benefits, referred

to “ profit, ” but the word “ benefit ” did not appear in the instruction. Over defendants ’ objection, the trial court instructed the jury, “ These words are to be used in their plain and ordinary meaning. You are to read these words in the context of the instructions in which they are used. ”

7

. Jury Verdict On July 3, 2012 t he jury returned a special verdict. On the cause of action for interference with contract, the jury found that Idanta, David Dunn, Steven Dunn, and the18

Dunn Family Trust kn e w about the non

- compet ition agreement, paragraph 3.9 of the AML Operating Agreement; they acted with the intent to disrupt the performance of paragraph 3.9; their conduct prevented the performan ce of paragraph 3.9 or made its performance more expensive or difficult; and their conduct was a substantial factor in causing harm to AML. On the cause of action for aiding and abetting a breach of fiduciary duty, the jury found that Andrews, Runnels
, an d Franklin knowingly acted against AML ’ s interests, and without AML ’ s informed consent, in forming FPI, and
, as
to Runnels and Franklin, working for and owning shares in FPI

. The jury also found that
defendants knew that Andrews, Runnels
, and Franklin wer e going to breach their fiduciary duties to AML; that defendants gave substantial assistance to Andrews,
Runnels
, and Franklin; and that defendants ’ conduct was a substantial factor in causing
harm to AML. The jury rejected defendants ’ affirmative defense s of estoppel, laches, waiver, consent, and ratification. The jury found for defendants, however, on their claim that
AML ’ s cause of action for interference with contract was barred by the two

- year statute of limitations, finding that defendants proved th at AML had suffered harm before March 15, 2005, and that AML had not proven that it did not discover facts leading a reasonable person to suspect defendants ’ wrongful conduct until after March 15
, 2005. The jury awarded AML restitution (although it was ca lled “damages” on the verdict form) in the amount of $7,075,891. This was the exact figure AML’s expert, Melle, had calculated as “the benefits [defendants] received” from the June 2007 sale of
their FPI stock , plus interest. The jury also found that AML was not entitled to punitive damages.

8

. Motion for Judgment Notwithstanding the Verdict and New Trial On August 9, 2012 d efendants filed motion s for judgment notwithstanding the
verdict and for a new trial , arguing that the award of damages was exces sive and not supported by substantial evidence. In particular they argued that Melle ’ s testimony w as without foundation and that the jury instructions were confusing, as evidenced by the19

jury ’ s question regarding the definitions of “ harm ” and “ benefit. ” 11 On September 21,
2012 t he trial court denied both motions. T he court rejected defendants ’ contentions of evidentiary and instructional error and found “ that the jury ’ s verdict is supported by substantial evidence in the form of testimony and admitted exh ibits. ” On October 18,
2012 d efendants timely filed a notice of appeal. 12

DISCUSSION

A. Aiding and Abetting a Breach of Fiduciary Duty Defendants challenge the trial court ’ s ruling that a defendant can be liable for aiding and abetting a breach of fidu ciary duty, even if the defendant does not owe th e plaintiff a fiduciary duty. Defendants argue that there is no sound policy reason to distingu ish between liability for conspiracy to breach a fiduciary duty and liability for aiding and abetting a breach of fiduciary duty by requiring that a conspirator but not an
aider and abettor owe a f

iduciary duty to the plaintiff . AML a rgues that defendants cannot make this argument on appeal, and that , even if they can, on the merits it is legally
incorrect.

1

. Standing and Invited Error AML asserts that defendants lack standing to challenge the trial court ’ s ruling on
demurrer because the court sustained their demurrer and therefore they are not aggrieved parties. AML also asserts that because the trial court gave defendants ’ jury instruction on aiding and abetting, which did not include a requirement that they owe a fiduciary duty, the doctrine of invited error precludes defendants ’ claim of error on appeal.

11 Defendants also submitted a declaration from one of the jurors regarding the confusion, but the trial court properly ruled it inadmissible. ( See Evid. Code, § 1150

. )

12 The trial court subsequently denied AML ’ s motion for attorneys ’ fees. AM L ’ s appeal from that order is pending.20

Only an aggrieved party may appeal. (Code Civ. Pro c., § 902; United Investors Life Ins. Co. v. Waddell & Reed, Inc. (2005) 125 Cal.App.4th 1300, 1304.) “ It is true that, as a general rule, a party is not aggrieved and may not appeal from a judgment or order entered in its favor. [Citation.] However, a party which has not obtained all of the relief it requested in the trial court is aggrieved and may appeal. [Citations.] ” ( Friends of Aviara v. City of Carlsbad (2012) 210 Cal.App.4th 1103, 1108 ; see Roa v. Lodi Medical Group, Inc. (1985) 37 Cal.3d 920, 925, fn. 4 [ plaintiffs could challenge award of attorneys ’ fees in their favor on the ground that the statutory limitation on such fees was invalid] ; Archer v. United Rentals, Inc. (2011) 195 Cal.App.4th 807, 811, fn. 2 [fact that plaintiffs received cash payments did not preclude their appeal of denial of class certification] .) Here, although the trial court sustained defendants ’ d emurrer with leave to amend,
the court ruled against defendants on the legal issue of whether AML could maintain a
cause of ac tion for aiding and abetting a breach of fiduciary duty in the absence of a fiduciary duty on their part . The trial court sustained the demurrer only because the complaint lacked sufficient factual allegatio ns of aiding and abetting

. A fter amending its

c omplaint AML proceed ed and ultimately prevail ed on thi s cause of action . Defendants did not obtain all of the relief they requested and thus were aggrieved by the court ’ s ruling and have standing to challenge it on appeal.
AML also argues that defendants “ successfully proposed an aiding and abetting jury instruction, but only one that omitted the independent duty element it claims on appeal should be imposed. Having invited the supposed error, [defendants] forfeited [their] right to appeal the issue. ” T he doctrine of invited error does not apply here.

“ Under the doctrine of invited error, when a party by its own conduct induces the commission of error, it may not claim on appeal that the judgment should be reversed
because of that error. [Citations.] But the doctrine does not apply when a party, while making the appropriate objections, acquiesces in a judicial determination. [Citation.] As this court has explained: ‘“ An attorney who submits to the authority of an erroneous, adverse ruling after maki ng appropriate objections or motions, does not waive the error in21

the ruling by proceeding in accordance therewith and endeavoring to make the best of a bad situation for which he was not responsible. ”’ [Citation s .] ” ( Mary M. v. City of Los Angeles (1991 ) 54 Cal.3d 202, 212

- 213; see Norgart v. Upjohn Co. (1999) 21 Cal.4th 383, 403 [invited error does not apply where “a party may be deemed to have induced the commission of error, but did not in fact mislead the trial court in any way

— as where a party ‘“‘en deavor[s] to make the best of a bad situation for which [it] was not responsible’”’”].) Here, the trial court had already rejected defendants ’ argument that aiding and abetting a breach of fiduciary duty requires that the aider and abettor owe the plainti ff a fiduciary duty. Defendants did not forfeit the right to challenge that ruling by pr oposing a jury instruction that was consistent with the trial court ’ s ruling. The doctrine of invited

error does not apply where, as here, the party submits a jury in struction pursuant to or consistent with a prior adverse court ruling. ( S ee Gillan v. City of San Marino (2007) 147 Cal.App.4th 1033, 1052 [ “ [ d ] efendants did not invite the error by proposing

. . . instructions ” on two causes of action “ after their unsucc essful attempts to defeat those counts by demurrer and summary adjudication ” ]; Horsemen ’ s Benevolent & Protective Assn. v. Valley Racing Assn. (1992) 4 Cal.App.4th 1538, 1555 [ “ [w]hen an appellant offers instructions on irrelevant matter only after an unsu ccessful attempt to remove it from the case, he may attack the relevancy on appeal ” ]; Quigley v. Pet, Inc. (198 4) 162 Cal.App.3d 877, 894, fn. 6 [no invited error in submitting instruction on issue where

“ from the beginning in law and motion, and thereafte r through the motion for new trial, defendants objected ” to the issue].) Defendants did not forfeit their right to challenge the
trial court ’ s ruling on this issue.

2

. Civil Conspiracy and Aiding and Abetting Civil conspiracy is “ a legal doctrine that imposes liability on persons who, although not actually committing a tort themselves, share with the immediate tortfeasors a common plan or design in its perpetration. [Citation.] By participation in a civil conspiracy, a coconspirator effectively adopt s as his or her own the torts of other22

coconspirators within the ambit of the conspiracy. [Citation.] In this way, a coconspirator incurs tort liability co

- equal with the immediate tortfeasors. ” ( Applied Equipment Corp. v. Litton Saudi Arabia Ltd.
, supr a , 7 Cal.4th at pp. 510

- 511.) “ B y its
nature, tort liability arising from conspiracy presupposes that the coconspirator is legally capable of committing the tort, i.e., that he or she owes a duty to plaintiff recognized by law and is potentially subject t o liability for breach of that duty. ” ( Id. at p. 5 11 .) Following Applied Equipment Corp. , this court held in Kidron v. Movie Acquisition Corp. (1995) 40 Cal.App.4th 1571 that “ [a] nonfiduciary cannot conspire to breach a duty owed only by a fiduciary. ” ( Id . at p. 1597; accord, Everest Investors 8 v. Whitehall Real Estate Limited Partnership XI (2002) 100 Cal.App.4th 1102, 1109 .) Some courts, noting the close relationship between conspiracy and aiding and abetting, have sugge sted that the law should trea t conspiracy to breach a fiduciary duty and aiding and abetting a breach of fiduciary duty similarly. For example, in In re County of Orange (Bankr. C.D.Cal. 1996) 203 B.R. 983
, 13 citing Applied Equipment Corp. and Kidron
, the court stated that it saw “ no reason for treating the vicarious tort of aiding and abetting breach of a fiduciary duty differently from that of conspiracy to breach a fiduciary duty. ‘ Conspiracy is a concept closely allied with aiding and abetting. A conspiracy generally requires agr eement plus an overt act causing damage. Aiding and abetting requires no agreement, but simply assistance. The common basis for liability for both conspiracy and aiding and abetting, however, is concerted action. ’” ( Id . at p. 999, quoting Janken v. GM H ughes Electronics (1996) 46 Cal.App.4th 55, 78.) In Howard v. Superior Court (1992) 2 Cal.App.4th 745 the issue was whether a client attempting to plead a cause of action for aiding and abetting against an attorney had to comply with
former Civil Code sec tion 1714.10, which required the plaintiff to obtain a court order before pleading such a civil conspiracy claim . T he court noted that “ [i]n the abstract, there may be a distinction between an aiding and abetting cause of action and one for

13 Reversed in part on other grounds in In re County of Orange (Bankr. C.D.Cal. 1997) 245 B.R. 138.23

civil conspira cy , ” but held that because the alleged conduct fell “ within the ambit ” of the
statute, the statute applied to the plaintiff’s aiding and abetting claim . ( I d . at p. 749 , fn.
omitted

. ) And in K & S Partnership v. Continental Bank, N.A. (8th Cir. 1991) 952 F.2d 971, the court stated, “ [k] nowing participation in a breach of fiduciary duty ‘ is analogous
to a cause of action

. . . for aiding and abetting a securities fraud, ’ where the primary violation involves a breach of fiduciary duty. [Citation.] Likewise , liability for civil conspiracy is in substance the same thing as aiding and abetting liability. Civil conspiracy requires an agreement to participate in an unlawful activity and an overt act that causes injury, so it ‘ do es not set forth an independent c ause of action ’ but rather is

‘ sustainable only after an underlying tort claim has been established. ’ [Citations.] ” ( Id

. at p. 980.) California law, however, does not treat conspiracy to breach a fiduciary duty and aiding and abetting a breach of fiduci ary duty similarly. I n Casey v. U.S. Bank Nat

. Assn

. , supra , 127 Cal.App.4th 1138, on which the trial court relied, a trustee in bankruptcy sued three banks, alleging that the y aided and abetted the fiduciaries of the bankrupt co rporation in a scheme to d ivert funds from the corporation. One of the causes of action was aiding and abetting a breach of fiduciary duty. ( Id . at p p. 1141

- 1142.) Citing this court ’ s opinion in Saunders v. Superior Court (1994) 27 Cal.App.4th 832, 846, the court in Casey observ ed that “ California has adopted the common law rule for subjecting a defendant to liability for aiding and abetting a tort. ‘“ Liability may

. . . be imposed on one who aids and abets the commission of an intentional tort if the person (a)
knows the other ’ s conduct constitutes a breach of duty and gives substantial assistance or encouragement to the other to so act or (b) gives substantial assistance to the other in accomplishing a tortious result and the person ’ s own conduct, separately considered,
constit utes a breach of duty to the third person. ” [Citation s .] ’ [Citation.] ” ( Casey , supra , at p. 1144.) 14 The trustee in Casey attempted to allege liability under the first theory , and

14 California courts have consistently followed and applied the two part alternative test for civil aiding and abetti ng liability in Saunders and Casey

. (See, e.g., Das v. Bank24

the banks challenged the sufficiency of the allegations of “ ‘ substantial assistance. ’ ” ( Id

. at p. 1145.) The court noted “ that liability for aiding and abetting depends on proof the defendant had actual knowledge of the specific primary wrong the defendant substantially assisted. ” ( Ibid .) T he court concluded that the truste e had failed to allege facts showing that the banks knew the fiduciaries were misappropriating corporate funds. Thus, the trustee failed to state a cause of action for aiding and abetting a breach of fiduciary duty. ( Id . at p. 1153.) Citing Casey , Saund ers , and the Restatement Second of Torts, the court in Berg & Berg Enterprises, LLC v. Sherwood Partners, Inc. (2005) 131 Cal.App.4th 802 explained: “ Despite some conceptual similarities, civil liability for aiding and abetting the commission of a tort, w hich has no overlaid requirement of an independent duty, differs fundamentally from liability based on conspiracy to commit a tort. [Citations.]

‘ “ [ A ] iding

- abetting focuses on whether a defendant knowingly gave ‘ substantial
assistance ’ to someone who per formed wrongful conduct, not on whether the defendant agreed to join the wrongful conduct. ” [¶]

. . . [W]hile aiding and abetting may not require a defendant to agree to join the wrongful conduct, it necessarily requires a
defendant to reach a conscious decision to participate in tortious activity for the purpose of assisting another in performing a wrongful act.

. . . ’ The aider and abetter ’ s conduct need not, as ‘ separately considered, ’ constitute a breach of duty. [Citations.] ” ( Id . at
p. 823, fn. 10.)

of America, N.A. (2010) 186 Cal.App.4th 727, 741, 744

- 745; Berryman v. Merit Property Management, Inc. (2007) 152 Cal.App.4th 1544, 1559; Austin B. v. Escondido Union School Dist. (2007) 149 Cal. App.4th 860, 879; Richard B. LeVine, Inc. v. Higashi (2005) 131 Cal.App.4th 566, 574; Fiol v. Doellstedt (1996) 50 Cal.App.4th 1318, 1325

- 1326; River Colony Estates General Partnership v. Bayview Financial Trading Group, Inc. (S.D.Cal. 2003) 287 F.Supp.2d 1213, 1225; see also Wood v. Greenberry Financial Services, Inc. (D. Haw ai ‘ i 2012) 907 F.Supp.2d 1165, 1181

- 1182 [adopting Casey ]; El Camino Resources, Ltd. v. Huntington Nat. Bank (W.D.Mich

. 2010) 722 F.Supp.2d 875, 905 [ same ].)25

In Neilson v. Union Bank of California, N.A. (C.D.Cal. 2003) 290 F.Supp.2d 1101,
the court thoroughly reviewed California case law and concluded that under California
law a defendant c an be liable for aiding and ab etting a breach of fiduciary duty in the absence of an independent duty owed to the plaintiff. ( Id . at p. 1135.) After noting that conspiracy and aiding and abetting “ are closely allied forms of liability, ” the court found
that “ [n]o California case, however, holds that a party must owe th e plaintiff a duty
before he or she can be held liable as an aider and abettor. Rather, California cases outlining the elements of aiding and abetting liability have consistently cited the elements of the tort as they are set forth in the Restatement (Sec ond) of Torts, § 876 , and have omitted any reference to an independent duty on the part of the aider and abettor. Under this formulation, liability may properly be imposed on one who knows that another ’ s conduct constitutes a breach of duty and substantia lly assists or encourages the breach. ” ( Id. at p. 1133.)
The Neilson court explained why this is so: “ Unlike a conspirator, an aider and
abettor does not ‘ adopt as his or her own ’ the tort of the primary violator. Rather, the act of aiding and abetting is distinct from the primary violation; liability attaches because the aider and abettor behaves in a manner that enables the primary violator to commit the underlying tort.

. . . Because aiders and abettors do not agree to commit, and are not held
liabl e as joint tortfeasors for committing, the underlying tort, it is not necessary that they owe plaintiff the same duty as the primary violator. Conspirators, by contrast, are held liable for the tort committed by their co

- conspirator. [Citation.] Because liability is premised on the commission of a single tort, it is logical that all conspirators must be legally capable of committing the wrong. ” ( Id. at pp. 1134

- 1135 , fn. omitted .)

“ Additionally, causation is an essential element of an aiding and abetti ng claim, i.e., plaintiff must show that the aider and abettor provided assistance that was a substantial factor in causing the harm suffered. [Citation s.]

. . . This difference too demonstrates the distinction between the forms of liability, and argues in favor of a rule that permits the imposition of aider and abettor liability in the absence of a duty owed directly to the plaintiff. ” ( Id. at p. 1135 ; see Simi Management Corp. v. Bank of America, N.A.26

(N.D.Cal. 2013) 930 F.Supp.2d 1082, 1099, fn. 15 [ “‘ liability for aiding and abetting may
exist even where the defendant ’ s conduct does not independently breach a duty to the plaintiff ’” ]; Villains, Inc. v. American Economy Ins. Co. (N.D.Cal. 2012) 870 F.Supp.2d
792 , 795 [ “‘ [t]he differences between consp iracy and aiding and abetting are not merely
semantic ’ and

. . . ‘ [t]hese differences have led several courts

. . . to recognize that a non

fiduciary can aid and abet a breach of fiduciary duty ’ ” ] ; Granewich v. Harding (Or. 1999) 985 P.2d 788, 793

- 794 [ “[l ] egal authorities

. . . virtually are unanimous in expressing the proposition that one who knowingly aids another in the breach of a fiduciary duty is liable to the one harmed thereby,” and “[n]one of those authorities even implies that liability for parti cipants in the breach of fiduciary duty is confined to those
who themselves owe such duty ”] ; see also Heckman n v. Ahmanson (1985) 168 Cal.App.3d 119, 127 [ third party greenmailer purchasers of corporation’ s shares in takeover attempt can be liable for aidi ng and abetting breach of fiduciary duty of corporation’s directors who authorized corporation’s purchase of the third parties’ shares at a premium ] ; accord, Feinberg Testamentary Trust v. Carter (S.D.N.Y. 1987) 652 F.Supp. 1066, 1083

. )

3

. Application t o This Case Thus, there are two different theories pursuant to which a person may be liable for aiding and abetting a breach of fiduciary duty. One theory , like conspiracy to breach a fiduciary duty, requires that the aider and abettor owe a fiduciary du ty to the victim and requires only that the aider and abettor provide substantial assistance to the person breaching his or her fiduciary duty. ( Casey v. U.S. Bank Nat. Assn
, supra , 127 Cal.App.4th at p. 1144 ; Coffman v. Kennedy (1977) 74 Cal.App.3d 28, 3 2 .) On this theory, California law treats aiding and abetting a breach of fiduciary duty and conspir acy to breach a fiduciary duty similarly

. Courts impose liability for concerted action that
violates the aider and abettor ’ s fiduciary duty. (See Janken v. GM Hughes Electronics
, supra , 46 Cal.App.4th at p. 78; In re County of Orange , supra , 203 B.R. at p. 999.) The
second theory for imposing liability for aiding and abetting a breach of fiduciary duty27

arises when the aider and abettor commit s an independ ent tort. ( See Casey , supra , at p. 1144; Saunders v. Superior Court
, supra , 27 Cal.App.4th at p. 846.) Th is occurs when
the aider and abettor makes “‘ a conscious decision to participate in tortious activity for the purpose of assisting another in perform ing a wrongful act. ’” ( Berg & Berg Enterprises, LLC v. Sherwood Partners, Inc.
, supra , 131 Cal.App.4th at p. 823, fn. 10; accord, Central Bank v. First Inter

. Bank (1994) 511 U.S. 164, 181.) AML proceeded on the second theory of aiding and abetting liabi l ity. AML

p leaded and proved that defendants had actual knowledge of the fiduciary duties Andrews, Runnels, and Franklin owed to AML, that defendants provided the three
fiduciaries with substantial assistance in breaching th eir duties, and that defendants ’
conduct resulted in unjust enrichment. Thus, the trial court did not err in ruling , on demurrer and in connection with the jury instruction s , 15 that defendants could be liable for aiding and abetting a breach of fiduciary duty even though they did not ow e a fiduciary duty to AML

.

B

. Statute of Limitations for Aiding and Abetting a Breach of Fiduciary Duty
Defendants also argue that AML ’ s cause of action for aiding and abetting a breach of fiduciary duty was barred by the two

- year statute of limitations applicable to a cause of
action for interference with contract , and that the trial court erred by n ot instructing the jury that this two

- year limitations period applied to AML ’ s breach of fiduciary duty

15 Pursuant to defendants ’ special instruction No. 4, the trial court instructed the jury that defendants could be held liable for aiding and abetting a breach o f fiduciary duty if: “(1) Runnels , Franklin, and/or Andrews breached their fiduciary duties to [AML]; [¶] (2) Defendants had actual knowledge that Runnels , Franklin, and/or Andrews were breaching their fiduciary duties to [AML]; [¶] (3) Defendants gave substantial assis tance or encouragement to Runnels , Franklin, and/or Andrews in breaching their fiduciary duties; [¶] (4) De fendants acted with the intent to participate in the br each of fiduciary duty by Runnels , Franklin, and/or Andrews for the purpose of assisting them in performing the breach of their fiduciary duties; and [¶] (5) That the conduct of Defendants was a substa ntial factor in causing harm to [AML]. ”28

claim

. 16 AML argues that the four

- year statute of li mitations of Code of Civil Procedure
section 343, the “ catchall provision, ” applies to its aiding and abetting breach of fiduciary duty claim. We conclude that because the applicable statute of limitations is either three or four years , and there is no di spute that AML filed this action less than three years after accrual, 17 AML ’ s aiding and abetting claim is not barred by the statute of limitations. The statute of limitations for a cause of action for aiding and abetting a tort generally is the same as th e underlying tort. (See Vaca v. Wachovia Mortg age Corp. (2011) 198 Cal.App.4th 737, 743

- 744 & fn. 4 [aiding and abetting fraud]; River Colony Estates General Partnership v. Bayview Financial Trading Group, Inc.
, supra , 287 F.Supp.2d at p. 1220 [aiding and abetting fraud] ; see also Marketxt Holdings Corp. v. Engel & Reiman, P.C. (S.D.N.Y. 2010) 693 F.Supp.2d 387, 39 3 [ “ statute of limitations for each aiding and abetting claim is determined by the underlying tort ” ] .) Thus, the
statute of limitations for aid ing and abetting a breach of fiduciary duty is the same as th e statute of limitations for breach of fiduciary duty. (See In re Brocade Communications Systems, Inc. Derivative Litigation , supra , 615 F.Supp.2d at pp. 1036

- 1037 [because aiding and abetting b reach of fiduciary duty is “ most akin to a breach of fiduciary duty
claim
, ” the four

- year statute of limitations applies].)

16 Defendants asked the trial court to instruct the jury that the limitations period for both of AML ’ s claims was “ two years from the time [AML] knew o r should have known of the loss or damage it claims to have suffe red. ” The trial court instructed the jury

“ [w]ith regard to AML ’ s claim for interference with contract only, Defendants contend that AML ’ s lawsuit was not filed within the time set by law. To succeed on this defense, Defendants must prove that AML ’ s clai med harm occurred before March 15, 2005 unless AML proves that before March 15, 2005 it did not discover, and did not know facts that would have caused a reasonable person to suspect, Defendants ’ wrongful act or omission. ”

17 As noted above, Roberts lear ne d that the Operating Group had granted FPI a license on March 17, 2004. AML filed this action on March 15, 2 007. Defendants do not argue that AML ’ s aiding and abetting claim is barred by a three

- year statute of limitations.29

The statute of limitations for breach of fiduciary duty is three years or four years, depending on whether the breach is fraudulent or non

- fraudulent. (See Fuller v. First Franklin Financial Corp. (2013) 216 Cal.App.4th 955, 9 63 [ “ limitations period is three

years

. . . for a cause of action for breach of fiduciary duty where the gravamen of the claim is deceit, rather than the catch all four

- year limitations period that would otherwise apply ” ]; William L. Lyon & Associates, Inc. v. Superior Court (2012) 204 Cal.App.4th 1294, 1312 [ “ [b]reach of fiduciary duty not amounting to fraud or constructive fraud is subject to the four

- year ‘ ca tch

- all statute ’ of Code of Civil Procedure section 343 ” ]; Thomson v. Canyon (2011) 198 Cal.App.4th 594, 606

- 607 [same] ; City of Vista v. Robert Thomas Securities, Inc. (2000) 84 Cal.App.4th 882, 889 [four

- year statute of limitations applies to breach of f

iduciary duty, unless the gravamen of the claim is actual or constructive fraud, in which case the statute of limitations i s three years] .) Because defendants do not dispute that AML filed this action within three years of accrual, it does
not matter whet her the breach of fiduciary duty was fraudulent or non

- fraudulent. Either way, the claim is timely. In some circumstances, the statute of limitations for a breach of fiduciary duty
claim can be less than three years. For example, in Hydro

- Mill Co., Inc. v. Hayward,
Tilton & Rolapp Ins. Associates, Inc. (2004) 115 Cal.App.4th 1145, the court held that because the claim of breach of fiduciary duty “ amount[ed] to a claim of professional negligence, ” the two

- year statute of limitations for professional negli gence applied, and the plaintiff could not “ prolong the limitations period by invoking a fiduciary theory of liability. ” ( Id . at p. 1159.) Here, d efendants argue that the two

- year statute of limitations for interference with contract applies because “ int erference with contract is the gravamen of [AML ’ s] aiding and abetting claim in this case. ” Defendants argue that “ since a contractual agreement [i.e., the AML Operating Agreement] created the underlying fiduciary obligation (owed by third parties ) , AML ’ s claim is for interfering with [the
three Operating Group members ’ ] obligations to AML, and is logically akin to other interference torts and should be subject to the two

- year limitations period of section 339
of the Code of Civil Procedure. ”30

The fiduciar y duties of Andrews, Runnels , and Franklin, however, were not
created exclusively or even primarily by the Operating Agreement, but we re imposed by
law on them as members and managers of AML

. (See Corp. Code, § 17 704.09,
subds. (b)(2), (b)(3) [ members owe fiduciary duties of loyalty and care to the limited liability company, including the duties to “refrain from dealing with a limited liability company in the conduct or winding up of the activities of a limited liability company as or on behalf of a party having an interest adverse to a limited liability company” and to “refrain from competing with a limited liability company ” ] , subd. (d) [ “ [ a ] member shall discharge the duties to a limited liability company and the other members under this title
or under t he operating agreement and exercise any rights consistent with the obligation of good faith and fair dealing ” ] ; 18 Huong Que, Inc. v. Luu (2007) 150 Cal.App.4th 400 , 410 [ “ [t]he duty of loyalty arises not from a contract but from a relationship ” ]; Manok v.
F ishman (1973) 31 Cal.App.3d 208, 213 [although “ [a]n express agreement between the parties may govern their relationship,

. . . to the extent that their respective rights and duties are not spelled out in an express agreement, the law imposes obligations a rising out of the nature of their fiduciary relationship ” ] ; see also Federal Deposit Ins. Corp. v. McSweeny (S.D.Cal. 1991) 772 F.Supp. 1154, 1157 [ “ a cause of action for breach of fiduciary duty is its own ‘ right sued on ’ and cannot be compartmentalized i nto another
rubric for time

- bar purposes ” ].) Moreover, AML did not allege that defendants aided and abetted by interfering
with a contract. A ML ’ s f ourth amended complaint mentioned a contractual provision,

18 Corporations Code section s 17704.07 and 17704.09, effective January 1, 2014, distinguish between a manager

- managed limited liability company and a member

managed limited liability company, with the default as member

- managed unless the operating agreement provides otherwise. The Ope rating Agreement for AML named Roberts as the managing member, but provides that the members “may determine that there should be more than one Manager.” The January 2000 management agreement gave Andrews, Runnels, and Franklin control over AML’s “operatio nal decisions” and responsibility at “both the senior management (operational) level as well as the board

level (leadership) level.”31

p aragraph 3.9 of the Operating Agreement
, and al leged that it formed the basis for
AML ’ s (ultimately unsuccessful) cause of action for in terference with contract, but AML
d id not allege that the Operating Agreement wa s the basis of the aiding and abetting
clai m. Instead, the gravamen of AML’s cause of action for aiding and abe tting breach of fiduciary duty wa s that defendants provided substantial assistance for Andrews, Runnels
, and Franklin in breaching their duties of loyalty as members a nd managers of AML. AML alleged that defendants acted with Andr ews, Runnels , and Franklin “ to : a)

. wrongfully acquire rights to the AML patent for less than full value; b)

. hire Runnels and Franklin to execute the AML Business Method; and c)

. otherw ise cause Runnels and Franklin to breach their fiduciary duties to AML without seeking or obtaining the requested permission of AML and Roberts, its majority owner and manager. ” AML alleged that in February 2004 Andrews, Runnels , and Franklin “ were secretly aligned with the Defendants and had already commenced negotiating w ith Defendants, ”

“ surreptitiously forwarded [AML ’ s] strategic negotiating points ” to defendants, received
financ ial incentives from defendants “ to breach their duties of loyalty to AML and its other member, ” and “ incorporate[d] [FPI] for the unlawful purpo se of using [FPI] as an operating company to exploit the patented AML Business Method without receiving valid authorization from AML and without adequately compensating AML. ” 19 AML
also alleged that Runnels engaged in a classic example of a breach of the d uty of loyalty by signing an unauthorized and undervalued licensing agreement on behalf of both contracting parties, AML and F PI

. The fact that one of the breaches of fiduciary duty may also have been a breach of a provision of the Operat ing Agreement do e s not mean the three defalcating fiduciar ies only breached a provision of the Operating Agreement.

19 The district court in Fort Properties
, Inc. v. American Master Lease
, LLC (C.D.Cal. 2009) 609 F.Supp.2d 1052 invalidated AML ’ s business patent. T he Court of Appeals affirmed the district court ’ s decision invalidating AML ’ s patent in Fort Properties, Inc. v. American Master Lease LLC (Fed.Cir. 20 12 ) 671 F.3d 1317

.32

Thus, the gravamen of AML ’ s aiding and abetting breach of fiduciary duty claim was not interference with a provision of the Operating Agreement. The two

- ye ar statute of limitations for interference with contract did not apply.

C

. Remedies for Aiding and Abetting a Breach of Fiduciary Duty Defendants argue that the trial court erred in allowing the jury to make an award based on unjust enrichment
, disgorge ment , and constructive trust, because equitable remedies available for breach of fiduciary duty are not available for aiding and abetting a breach of fiduciary duty. We agree with AML that the restitutionary remedies of unjust enrichment and disgorgement are available for aiding and abet ting breach of fiduciary duty.

“ We begin with the law of restitution. An individual is required to make restitution if he or she is unjustly enriched at the expense of another. [Citations.] A person is enriched if the p erson receives a benefit at another ’ s expense. [Citation.] Benefit means any type of advantage. [Citations.] [¶] The fact that one person benefits another is not, by itself, sufficient to require restitution. The person receiving the benefit is requi red to make restitution only if the circumstances are such that, as between the two individuals, it is unjust for the person to retain it. [Citation.] ” ( First Nationwide Savings v. Perry (1992) 11 Cal.App.4th 1657, 1662

- 1663 ; see City of Chula Vista v. G utierrez (2012) 207 Cal.App.4th 681, 686 ; Unilogic, Inc. v. Burroughs Corp. (1 992) 10 Cal.App.4th 612, 627 .) Disgorgement as a remedy is broader than restitution or restoration of what the plaintiff lost . ( County of San Bernardino v. Walsh (2007) 158 Cal .App.4th 533, 542; Feitelberg v. Credit Suisse First Boston, LLC (2005) 134 Cal.App.4th 997, 1013.) There are two types of disgorgement: restitutionary disgorgement, which focuses on the plaintiff ’ s loss, and nonrestitutionary disgorgement, which focuses on the defendant ’ s33

unjust enrichment. ( Feitelberg
, supra , at p. 1013.) 20 “ T ypically, the defendant ’ s benefit and the plaintiff ’ s loss are the same, and restitution requires the defendant to restore the plaintiff to his or her original position. ” ( County of San Bernardino
, supra , at p 542.) However, “ [m] any instances of ‘ liability based on unjust enrichment

. . . do not involve the restoration of anything the claimant previously possessed

. . . includ[ing] cases involving the disgorgement of profits

. . . wrongfully obtained

. . . . ’ [Citation.] ‘ [T]he public policy of this state does not permit one to “ take advantage of his own wrong ” ’ regardless of whether the other party suffers actual damage. [Citation.] Where ‘ a benefit has been received by the de fendant but the plaintiff has not suffered a corresponding loss or, in some cases, any loss, but nevertheless the enrichment of the defendant would be unjust

. . . the defendant may be under a duty to give to the plaintiff the amount by which [the defendan t] has been enriched. ’ [Citation.] ” ( Ibid ; see Feitelberg v. Credit Suisse First Boston, LLC , supra , 134 Cal.App.4th at p. 1013 .) Moreover, “‘“ [ i ] t is not essential that money be paid directly to the recipient by the party seeking restitution.

. . . ” ’ [Citations.] The emphasis is on the wrongdoer ’ s enrichment, not the victim ’ s loss. In particular, a person acting in conscious disregard of the rights of another should be required to disgorge all profit because disgorgement both benefits the injured par ties and deters the perpetrator from committing the same unlawful actions again. [Citations.] Disgorgement may include a restitutionary element, but it

‘“ may compel a defendant to surrender all money obtained through an unfair business practice

. . . reg ardless of whether those profits represent money taken directly from persons who were victims of the unfair practice. ” ’ [Citation.] Without this result, there

20 The c ases cited by defendants that involve restitution un der the unfair competition law are inapplicable “ [b]ecause restitution in a private action brought under the unfair competition law is measured by what was taken from the plaintiff ” ( Clark v. Superior Court (2010) 50 Cal.4th 605, 614

- 615), rather than by t he defendant ’ s unjust enrichment. ( Ibid .; Korea Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal.4th 1134, 1149; Cortez v. Purolator Air Filtration Products Co. (2000) 23 Cal.4th 163, 177

- 178; Peterson v. Cellco Partnership (2008) 164 Cal.App.4th 1583, 1 593

- 1594.)34

would be an insufficient deterrent to improper conduct that is more profitable than lawful
cond uct. ” ( County of San Bernardino v. Walsh
, supra , 158 Cal.App.4th at pp. 542

- 543. ) Disgorgement based on unjust enrichment is an appropriate remedy for aiding and abetting a breach of fiduciary duty. For example, in County of San Bernardino v. Walsh
, sup ra , 158 Cal.App.4th 533, the defendant, the vice president of a waste management company, was negotiating a new contract with the county. He and the former county
administrative officer (CAO) agreed to bribe the current CAO to award the contract to the

wa ste management company, along with an addit ional consulting agreement that would benefit the former CAO and the defendant. ( Id . at pp. 538

- 539.) When the county discovered the bribery scheme, the county sued the current CAO, the former CAO
, and
the defen dant. Affirming t he trial court ’ s decision finding them liable for breaching or inducing a breach of the current CAO ’ s fiduciary duty, fraud, unfair com petition, and unjust enrichment, the C ourt of Appeal held: “ Disgorgement of profits is particularly

ap plicable in cases dealing with breach of a fiduciary duty, and is a logical extension of the principle that public officials and other fiduciaries cannot profit by a breach of their duty. Where a person profits from transactions conducted by him as a fidu ciary, the proper measure of damages is full disgorgement of any secret profit made by the fiduciary regardless of whether the principal suffers any damage. [Citations.] ” ( Id . at
p. 543.) Even though the defendant was not in a fiduciary relationship wit h the county,
the court held that his “ [a]ctive participa[tion] in the breach of fiduciary duty by another [rendered him ] accountable for all advantages [he] gained thereby

. . . . ” ( Ibid ; see Chicago Park Dist

. v. Kenroy, Inc. (Ill. 1980) 402 N.E.2d 181, 186 [“[i]t is a fundamental rule in the law of restitution that ‘ [ a ] third person who has colluded with a fiduciary in committing a breach of duty, and who obtained a benefit therefrom, is under a duty of restitution to the beneficiary’”]; Rest.3d Restitu tion, § 43, com

. g [ “ [b] enefits derived from a fiduciary ’ s breach of duty may .

. . be recovered from third parties, not themselves
under any special duty to the claimant, who acquire such benefits with notice of the breach, ” and “ [ a ] fortiori , one who act ively participates in another ’ s breach of fiduciary duty will be liable to disgorge the profits realized thereby ” ].)35

Defendants assert that “ nonrestitutionary disgorgement is purely equitable and only for the court to decide. ” Defendants do not argue, ho wever, that the trial court erred by submi tting the issue of unjust enrichment to the jury. Indeed, as the court in Jogani v. Superior Court (2008) 165 Cal.App.4th 901 explained
, “‘ [t]he fact that equitable principles are applied in the action does not ne cessarily identify the resultant relief as equitable. [Citations.] Equitable principles are a guide to courts of law as well as of equity. [Citations.] ’ [Citations.] ” ( Id . at p. 909.) Where liability is definite and damages may be calculated without an accounting, the action is legal. ( Id . at pp. 909

- 910 ; see Lectrodryer v. SeoulBank (2000) 77 Cal.App.4th 723, 728 [plaintiff entitled to jury trial on claim for unjust enrichment seeking restitution of money unjustly retained by bank,

“ even when equita ble principles are applied ” ]; Martin v. County of Los Angeles (1996) 51 Cal.App.4th 688, 694 [ “‘ law courts now recognize and apply many equitable principles and grant relief based thereon where .

. . legal relief is sought in the form of a judgment
for a s pecific amount ’” ]; see also Holson Inv. Co. v. Villelli (N.D.Ill. 1998) 1998 WL 312107 at p. 5 [ “ the amount of the restitution is a question of fact for the jury ” ].) As part of their argument that restitution is not available for aiding and abetting a
bre ach of fiduciary duty, defendants contend that the trial court erred by instructing the jury on constructive trust. The court gave a special in struction, requested by AML and
entitled “ disgorgement/constructive trust
, ” that defined a constructive trust, s et forth the requirements for imposing a constructive trust, and told the jurors that if they found the
existence of the elements of a constructive trust then the y could award AML the profit
defendants derived from their investment in FPI. 21 This hybrid in struction essentially

21 The trial court instructed the jury pursuant to Special Instruction No. 2: “A constructive trust is an involuntary equitable trust created by operation of law as a remedy to compel the transfer of property from the person wrongfully holding it to the rightful owner. A constructive trust may only be imposed where the following three conditions are satisfied: (1) the existence of property or a property interest; (2) the right of the Plaintiff to that property or property interest; and (3) some wrongful acquisition or detention of that property or property interest by Defendants.36

asked the jury to determine whether AML had proven entitlement to a constructive trust, but did not ask the jury to actually impose one ; i t only asked the jury to award disgorgement. Nevertheless, to the extent that the instruction a sked the jury to decide whether to impose a constructive trust
, the instruction was erroneous

.

“ A constructive trust is an involuntary equitable trust created by operation of law as a remedy to compel the transfer of property from the person wrongfully ho lding it to the rightful owner. [Citations.] The essence of the theory of constructive trust is to prevent unjust enrichment and to prevent a person from taking advantage of his or her own wrongdoing. [Citation.] ” ( Communist Party v. 522 Valencia, Inc. (1995) 35 Cal.App.4th 980, 990.) Imposition of “ [a] constructive trust is an equitable remedy to compel the transfer of property by one who is not justly entitled to it to one who is. [Citation.] ” ( Habitat Trust for Wildlife, Inc. v. City of Rancho Cuc amonga (2009) 175 Cal.App.4th 1306, 1332 ; accord, Farmers Ins. Exchange v. Zerin (1997) 53 Cal.App.4th 445, 457 .) It is not “ a substantive claim for relief. ” ( PCO, Inc. v. Christensen, Miller, Fink, Jacobs, Glaser, Weil & Shapiro, LLP (2007) 150 Cal.App. 4th 384, 398; see
Embarcadero Mun

. Improvement Dist. v. County of Santa Barbara (2001) 88 Cal.App.4th 781, 793 [“[a] constructive trust is not a substantive device but merely a remedy”] .) The issue of whether to impose a constructive trust is an equitable issue for the court. (See Fowler v. Fowler (1964) 227 Cal.App.2d 741, 747 [ “ it is for the trial

“If you find that (1) a property interest existed in the proceeds of any sale by Defendants of their interests in FORT and/or the interest on any loans made by Idanta Partners, Ltd. To FORT; (2) Plaintiff had a right to the proceeds of any sale by Defendants of their interests in FORT and/or the interest on any loans made by Idanta Partners, Ltd. To FORT; and (3) Defendants wrongfully acquired the proceeds of any sale b y Defendants of their interest in FORT and/or the interest on any loans made by Idanta Partners, Ltd. to FORT, then you may award Plaintiff the profit that Defendants have derived from their acquisition of the proceeds of any sale by Defendants of their in terests in FORT and/or the interest on any loans made by Idanta Partners, Ltd. to FORT. However, if you find that Plaintiff never had a right to the proceeds of any sale by Defendants of their interest in FORT and/or the interest on any loans made by Idan ta Partners, Ltd. to FORT, then you should not award Plaintiff any damages under the theory of constructive trust or disgorgement.”37

court to decide whether ” the plaintiff has proven entitlement to a constructive trust].)
The trial court erred by submitting the issue of whether to impose a constructive trust to the jury. The error, however, was not prejudicial. “‘ A judgment may not be reversed for
instructional error in a civil case “ unless, after an examination of the entire cause, including the evidence, the court shall be of the opinio n that the error complained of has resulted in a miscarriage of justice. ” [Citation.] ’ [Citation.] Instructional error in a civil case is prejudicial ‘“ where it seems probable ” ’ that the error ‘“ prejudicially affected the
verdict. ” ’ [Citation.] ‘ [W]he n deciding whether an [instructional] error

. . . was prejudicial, the court must also evaluate (1) the state of the evidence, (2) the effect of other instructions, (3) the effect of counsel ’ s arguments, and (4) any indications by the jury itself that it w as misled. ’ [Citation.] ” ( Turman v. Turning Point of Cent ral California, Inc. (2010) 191 Cal.App.4th 53, 61 ; Daum v. SpineCare Medical Group, Inc. (1997) 52 Cal.App.4th 1285, 1313

- 1314 .) The appellant has the burden on appeal of showing that an instruct i onal error was prejudicial and resulted in a miscarriage of justice. ( Bo e ken v. Philips Morris, Inc. (2005) 127 Cal.App.4th 1640, 1678; Logacz v. Limansky (1999) 71 Cal.App.4th 1149, 1161 .)
Defendants ’ statement , without more, that the instruction on co nstructive trust was

“ plainly prejudicial to [them], given the Jury ’ s mo netary verdict
, ” is insufficient to meet
their burden of showing prejudice. ( See Scheenstra v. California Dairies, Inc. (2013) 213 Cal.App.4th 370, 403.) “ Prejudice from an erroneous instruction is never presumed;
it must be affirmatively demonstrated by the appellant. [Citations.] ” ( Wilkinson v. Bay
Shore Lumber Co. (1986) 182 Cal.App.3d 594, 599; see Brokopp v. Ford Motor Co. (1977) 71 Cal.App.3d 841, 853

- 854.) Defendants have no t demonstrate d that the

measure or award of restitution would have been any different had the instruction focused on disgorgement only , without any mention of constructive trust

. Defendants have not
shown how a more favorabl e verdict would have been reaso nably probable had the instruction excluded the theory of constructive trust

. Therefore, any error was not prejudicial

.38

D

. A ward of Restitution Defendants first contend that one who aids and abets a breach of fiduciary duty

may be liable for the fiducia ry’s unjust enrichment, but cannot be liable for more than the fiduciary’s unjust enrichment. Thus, defendants contend that even if they can be liable for aiding and abetting the breach of fiduciary duty by Andrews, Runnels, and Franklin, they cannot be l iable for more than any profit Andrews, Runnels, and Franklin obtained. Defendants, however, cite no authority for this contention. Moreover, the Restatement distinguishes between those who are subject to disgorgement because they have breached
a fiducia ry duty and those who are subject to disgorgement because they are other “conscious wrongdoer [ s ] ,” such as aiders and abettors: “T he object of restitution .

. . is to eliminate profit” of the “conscious wrongdoer, or

. . . defaulting fiduciary without reg ard
to notice or fault

. . . .” ( Rest.3d Restitution & Unjust Enrichment, § 51(4).) Indeed, “[t]he object of the disgorgement remedy

— to eliminate the possibility of profit from conscious wrongdoing

— is one of the cornerstones of the law of restitution and unjust enrichment,” and “[ t ] he profit for which the wrongdoer is liable by the rule of §51(4) is the net increase in the assets of the wrongdoer, to the extent that this increase is attributable to the underlying wrong.” ( Id. , com

. e.) 22 As independent w rongdoer s under the second theory of aiding and abetting liability based on the commission of an independent tort (see Casey v. U.S. Bank Nat. Assn

. , supra , 127 Cal.App.4th at p. 1144; Saunders v. Superior Court
, supra , 27 Cal.App.4th at p. 846.), defendan ts were subject to disgorgement of the prof

it or “net increase in the asse ts” they obtained, not merely those that Andrews, Runnels, and Franklin obtained.

22 In Uzyel v. Kadisha (2010) 188 Cal.App.4th 866, the court relied on section 51(4) of the Restatement Third of Restitution and Unjust Enrichment, although then still in draft form, and “deem[ed it] applicable under California law to a trustee who has committed a breach of trust

. . . .” ( Id. at p. 894; see Ghirardo v. Antonioli (1996) 14 Cal.4th 39, 51 [relying on the Restat ement of Restitution definition of unjust enrichment].)39

Defendant s next co ntend that even if AML i s entitled to an award b ased on unjust enrichment or disg orgement, the jury instructions were erroneous and the amount of
restitution in the verdict is inconsistent with controlling law and not supported by
substantial evidence

. We agree that the trial court committed prejudicial instructional

error . Therefore , the award must be reversed. As noted above, s ubsection (4) of section 51 of the Restatement Third of Restitution and Unjust Enrichment provides that “ the unjust enrichment of a conscious wrongdoer, or of a defaulting fiduciary without regard to notice o r fault, is the net profit attributable to the underlying wrong

. . . . Restitution remedies that pursue this object are
often called ‘ disgorgement ’ or ‘ accounting. ’” The amount of restitution to be made is sometimes described as the “benefit” received b y the defendant. (Rest., Restitution, § 1 ,

com. a .) This was the term the trial court used in Special Instruction No. 3. Subsection ( 5 ) of section 51 of the Restatement Third of Restitution and Unjust Enrichment explains that “[i]n determining net profi t the court may apply such tests of causation and remoteness, may make such apportionments, may recognize such credits or deductions, and may assign such evidentiary burdens, as reason and fairness dictate, consistent with the object of restitution as s pec ified in subsection (4).

. . . ” The
Restatement further explains that “[p]rofit includes any form of use value, proceeds, or consequential gains [citation] that is identifiable and measurable and not unduly remote.” ( Id ., subs ec . (5)(a).) In addition, a “ conscious wrongdoer or a defaulting fiduciary may be allowed a credit for money expended in acquiring or preserving the property or in carrying on the business that is the source of the profit subject to disgorgement.

. . . ” ( Id
., subsec. (5)(c).) Comm ent a explains that “ [t]he principal focus of § 51 is on cases in which unjust enrichment is measured by the defendant ’ s profits, where the object of restitution is to strip the defendant of wrongful gain [citations].

. . . ” ( Id ., com. a.) In measuring t he amount of the defendant ’ s unjust enrichment, the plaintiff may

presen t evidence of the total or gross amount of the benefit, or a reasonable approximation thereof, and then the defendant may present evidence of costs, expenses,
and other deductions to s how the actual or net benefit the defendant receive d. As the40

court in Uzyel v. Kadisha
, supra , 188 Cal.App.4th 866 stated, “ [t]he party seeking disgorgement ‘ has the burden of producing evidence permitting at least a reasonable approximation of the amoun t of the wrongful gain, ’” and the “‘ [r]esidual risk of uncertainty in calculating net profit is assigned to the wrongdoer. ’ [Citation.] ” ( Id. at
p. 894.) Th e court in Uzyel adopted this formulation from the Restatement , which explains that the “ tradition al formula, inherited from trust accounting and enshrined in the Copyright Act (17 U.S.C. § 504(b)), states that the claimant has the burden of proving

revenues and the defendant has the burden of proving deductions. ” (Rest.3d Restitution & Unjust Enrichm ent, § 51, com. i.) The new Restatement, however, “ adopts a more modern and generally useful rule that the claimant has the burden of producing evidence from which the court may make at least a reasonable approximation of the defendant ’ s unjust enrichment
, ” and “ the defendant is then free (there is no need to speak of ‘ burden shifting ’ ) to introduce evidence tending to show that the true extent of unjust enrichment is something less. ” ( Ib i d. ) Thus, “ [a]s a general rule, the defendant is entitled to a
ded uction for all marginal costs incurred in producing the revenues that are subject to disgorgement. Denial of an otherwise appropriate deduction, by making the defendant liable in excess of net gains, results in a punitive sanction that the law of restitut ion normally attempts to avoid. ” ( Id

. , com. h.) Of particular relevance here, comment h of
th e Restatement Third of Restitution and Unjust Enrichment , section 51, states:

“ Disloyal fiduciaries are uniformly reimbursed for the purchase price of property acquired in conscious breach of their duty of loyalty

. ” The trial court instructed the jury pursuant to Special Instruction No. 7, entitled

“ Calculation of Disgorgement of Defendants ’ Benefits

— Effective Date ” : “ If you decide to award [AML] any profit mad e or to be made by Defendants as a result of [ F PI ’ s ] existence, you must consider the value of those benefits at the time they were acquired by Defendants. You may not reduce the value of those benefits by any events occurring after they were first acquir ed, including any later decision by Defendants to accept less for the benefits they received than their value on the date they received them. ” The trial court further instructed the jury pursuant to Special Instruction No. 4, entitled41

“ Calculation of Disg orgement of Defendants ’ Benefits

— No Offset ” : “ In awarding [AML] any profit made or to be made by Defendants as a result of [FPI ’ s ] existence, you must disregard what Defendants might have earned had they not created [FPI] . Instead, you must only focus on the profit received or to be received by Defendants as a result of
their actual conduct in this case. ” These special jury instructions, requested by AML, were erroneous. Special
Instruction No. 7 incorrectly told the jury that it had to consider the val ue of the benefits
defendants received at the time of acquisition of the benefits. Def endants acquired shares of FPI stock for $2.3 million in April 2004 , which “ at the time ” probably, although not necessarily, had a value of $2.3 million (because that is what defendan ts paid for the stock). Assuming that defendants had not negotiated a discount, or that defendants had not otherwise underpaid or overpaid, t here wa s no benefit yet to defendants because they had only exchanged $2.3 million in cash for $2.3 million in stock. Defendants held the stock, which in June 2007 may have had a value of $5.8 million, giving defendants a potential benefit of $3.5 million. Sometime later, defendants ’ FPI stock had a value of at
least $3.3 million ($2.9 million plus $30 0,000 plus $100,000), and perhaps more, depending on the value of defendants ’ co ntractual right to the second $2.9 million, discounted by the prospects of FPI ’ s finances , risk of insolvency, and ability to pay the
balance due

. Both sides were entitled to present evidence, including expert testimony
, on these issues. The trial court ’ s instruction to consider only the value of the benefits “ at the
time they were acquired ” improperly instructed the jur y on valuing the defendants ’
enrichment. 23

23 AML argues in its supplemental brief that Special Instruction No. 7 stood “simply [for] the proposition that any purchase price of the property to be disgorged should be ‘considered’ in the profit equation, i.e. , if proven, it can be deducted as an expense from the highest future value to determine [defendants’] profit.” This is not a fair reading of the instruction. In the instruction’s mandate to the jurors that they “must consider the value of those benefits at the time they were acquired by Defendants,” “those benefits” referred to the jury’s “award” of defendants’ profits, not an element of a “profit equation.” There is nothing in the instruction suggesting that the jury should deduct the42

Special Instru ction No. 7 also incorrectly told the jury that it could not reduce the
value of the benefit s defendant received “ by any events occurring after they were first acquired, including any later decision by Defendants to accept less for the benefits they
receiv ed than their value on the date they received them. ” As noted above, an unjust enrichment defendant may in troduce evidence that its enrichment was reduced by costs,
expenses , and other factors. Defendants may have received only a total of $400,000 out
of the second $2.9 million payment because (as AML argued) defendants engaged in a sham transaction to minimize the value of AML ’ s claim s in this litigation, 24 or because (as defendants argued) of “ the failure of the real estate market .

. . in September of 2 009

. ” Either way, defendan ts were entitled to present evidence of this transaction
, AML was entitled to challenge the transaction ’ s legitimacy , and t he jury was entitled to hear this
evidence and determine the value of defendants ’ remaining inter est in FP I

. As counsel for defendants acknowledged to the trial court, if counsel for AML “ want to argue that they should get $5.8 million even though the defendants never got $5.8 million, I suppose they can argue that. ” Counsel for defendants just wanted the co rresponding ability to argue that defendants did not get $5.8 million. Special Instruction No. 7 deprived them of this ability by erroneously precluding the jury from considering defendants ’ acceptance of $400,000 for its right to receive the remaining $2 .9 million when determining th e unjust enrichment defendants obtained as a result of the sale of their FPI
stock. 25

pur chase price or anything else. Moreover, AML’s argument is inconsistent with its argument, also in its supplemental brief, that defendants’ $2.3 million purchase price “is irrelevant to the restitutionary calculation” and should not be deducted as an expen se or offset when calculati ng defendants’ profit.

24 Defendants’ agreement to accept $100,000 for the remaining $2.6 million occurred within 30 days of Melle’s deposition, where defendants first saw Melle’s damages analysis.

25 AML argues that defendants f orfeited their challenge to Special Instruction No. 7 by withdrawing their objection to the instruction. AML directs us to a portion of the record where counsel for defendants withdrew an objection to the use of the word43

Special Instruction No. 4 compounded the problem by instructing the jury that it

“ must only focus on the profit received or to be received b y D efendants

. . . . ” There is
no difference between the benefit or “ profit ” defendant s received and the benefit or

“ profit ” defendants were to receive in the futur e. Defendants received one benefit, an equity interest in FPI

. There may have been a disp ute about how to value this benefit, but both sides were entitled to p resent evidence of its value , and the jury was entitled to determine how much it was really worth. The 2004 value of $2.3 million and the 2007 values of $3.5 million and $400,000 we re e vidence of the value of the unjust enrichment defendants obtained as a result of their wrongful conduct, but none of th e se values was conclusive, and the jury was entitled to “ focus ” on any or all of them. 26 In support of Special Instruction No. 7, AML cit ed s ec tion 51 of the Restatement
Third of Res titution and Unjust Enrichment, section 202 of the Restatement Second of Restitution, and Elliott v. Elliott (1964) 231 Cal.App.2d 205 . None of these authorities

“benefits” in the instruction. We do not construe this stipulation to one word in the instruction as a waiver of all objections to the instruction.

26 AML argues in its supplemental brief that “[n]othing in the text of any instruction prevented the jury from determining [defendants’] wron gful profits net of any legitimate costs” because there was no evidence in the record that defendants actually paid $2.3 million for the FPI stock. It is true that none of the parties to the 2004 transaction testified that defendants paid $2.3 million. B ut there was testimony by Melle about the $2.3 million investment. There was a long discussion at sidebar, while Melle was on the witness stand, about whether the trial court would allow counsel for defendants to ask Melle about the $2.3 million. Melle h ad included the $2.3 million in his expert report, but, in response to a tentative ruling by the court on a jury instruction regarding “offsets,” Melle removed the $2.3 million from his calculations. Counsel for defendants argued to the court that it was unfair to allow the jury to make an award “without having discounted for the [$]2.3 [million] that [defendants] put in,” and that “the [$]2.3 [million] offset definitely comes in now. That’s an expenditure.” The trial court ultimately allowed counsel for defendants to ask Melle about the $2.3 million investment. Counsel for defendants then asked Melle if he had “take[n] into account the fact that defendants had put in 2,300,000 dollars as their initial investment,” and Melle acknowledged he had not. Mel le said that his calculations did “not include a deduction for the amount that the defendants initially invested

. . . .” Both sides agree that Melle’s testimony was the only testimony on this issue.44

supports an instruction that AML was entitled to recover the full contract price of
defendants ’ stock rather than the amount defendants actually received for the stock , or that in determining the value of defendants ’ profits from the sale of its FPI stoc k the jury
should not consider defendants ’ subsequ ent decision to accept less than the contract

amount

. As noted above, s ection 51 focuses on the defendant ’ s net benefit. Section 202

concerns imposition of a constructive trust, not restitution based on unjust enrichment.
And the court in Elliott held t hat in valuing an asset subject to a constructive trust, the
trier of fact should c onsider the actual value of the asset, including issues such as collectability and solvency. (See Elliott
, supra, at p. 213 [failure to make findings on
whether the note wa s collectable and whether the maker of the note was insolvent was reversible error].) Finally, the se instructional error s w ere prejudicial. As noted, t he “ uniform test for
civil instructional error ” ( Soule v. General Motors Corp. (1994) 8 Cal.4th 548, 58 1,
fn. 11) is whether “ it is reasonably probable the error affected the verdict

. ” ( Ted Jacob Engineering Group, Inc. v. The Ratcliff Architects (2010) 187 Cal.App.4th 945, 962)

. I n assessing the likelihood that instructional error prejudicially affected the verdict, “ ‘ [t]the reviewing court should consider not only the nature of the error .

. . but [also] the likelihood of actual prejudice as reflected in the individual tri al record, taking into

account “ (1) the state of the evidence, (2) the effect of ot her instructions, (3) the effect of
counsel ’ s arguments, and (4) any indications by the jury itself t hat it was misled. ” [Citation.] ’” ( Viner v. Sweet (2004) 117 Cal.App.4th 1218, 1 2 26, fn. 8, quoting Rutherford v. Owens

- Illinois, Inc. (1997) 16 Cal.4th 953, 983, and Soule v. General Motors Corp. , supra , at pp. 580

- 581.) Here, the evidence was that defendants obtained a net benefit from the sale of their FPI stock of approximately $1 million ($600,000 from the first $2.9 million payment, plus $400,000), not the $5.8 million the jury awarded. Moreover, as noted above, the other jury instructions on restitution simply made matters

worse. A nd a lthough counsel for AML asked the jury to award Franklin ’ s estimated
value of AML ’ s interest in a potential joint venture with defendants, $26,462,188, the joint venture never materialized and the jury ’ s award was not close to this amount.45

Finally, the jury gave a very clear and unequivocal indication it was misled or at least
confused by asking a question during del iberations about the meaning of “ harm ” and

“ benefit ” and how to calculate defendants ’ unjust enrichment. The instructional error was prejudicial because in all probability it “misled the jury and affected [ the ] verdict.” ( Krouse v. Graham (1977) 19 Cal.3 d 59, 72; see Code Civ

. Proc

. , § 475 ; Veronese v. Lucasfilm Ltd. (2012) 212 Cal.App.4th 1, 32 [“instructional error will be prejudicial if it
is ‘ reasonably probable that instructions

. . . actually misled the jury’”], quoting Kinsman v. Unocal Corp. (200 5) 37 Cal.4th 659, 682 .) Therefore, we conclude that defendants are entitled to a new trial on the amount of unjust enrichment they should pay
in restitution to AML. On remand, the trial court shoul d instruct the jury that the amount by which
defendant s were unjustly enriched “ is the net profit attri butable to the underlying wrong

. ” (Rest.3d Restitution & U njust Enrichment, § 51(4)

. ) In c alculating the net profit
attrib utable to the underlying wrong , the jury will need guidance on h ow to evaluate three important numbers in this case: (1) the $2.3 million defendants paid for the FPI stock in April 2004 , (2) the value of the FPI stock defendants received when the y purchased the
stock in April 2004
, and (3) the value of defendants’ right to receive the sec ond $2.9 million payment when they sold the stock in June 2007 . On the first issue, the trial court should instruct the jury that it should give defendants “credit for money expended in acquiring or preserving the property or in carrying on the business t hat is the source of the profit subject to disgorgement.” (Rest.3d Restitution & Unjust Enrichment, § 51(5)(c); accord, Uzyel v. Kadisha
, supra , 188 Cal.App.4th at p. 894 ; see Carrey v. Boyes Hot Springs Resort, Inc. (1966) 245 Cal.App.2d 618, 622 [“in ca lculating the net profit of a business all of the costs of producing the gross income should be deducted”] .) 27

27 Citing Ward v. Taggart (1959) 51 Cal.2d 736, 744, AM L argues in its supplemental brief that defendants are not entitled to a credit for their $2.3 million investment because “expenses that aided the wrongdoer in accomplishing the wrongdoing cannot be deducted” and “[a]mounts expended to further breaches of fiduciary duty are46

On the second issue, t he trial cour t should instruct the jury it should consider the
face value of the ben e fits at the time defendants received t hem (i.e., the $2.3 million defendants paid for the FPI stock) , as well as evidence that the benefits were worth more

or less than what defendants paid for them. (See Knudsen v. Hill (1964) 227 Cal.App.2d 639, 640, 642 [in a damages case involving convers ion of a “pledged promissory note,” measure of damage is “value at time of conversion and, although the rule is variously expressed, face value of the bill or note is, prima facie, its true value,” although “[e]vidence is admissible to establish that actua l value is a lesser sum than face value”] ; St. Paul Fire & Marine Ins. Co. v. Compaq Computer Corp. (8th Cir. 2008) 539 F.3d 809, 8 1 8 [“[w]hile the contract price is evidence of the value of an item, it is not conclusive”] .) On the third issue, t he trial court should instruct the jury that in determining whether defendants have met their burden of proving any deductions or discount from the right to receive the second $2.9 million, the jury may consider defendants’ ability to collect the full contract pric e for the sale of their stock and FPI’s solvency ( Elliott v.
Elliott
, supra , 231 Cal.App.2d at p. 21 3 ; cf. Medi

- Cen Corp. v. Birschbach (1998) 123 Md.App. 765, 778

- 779 [720 A.2d 966, 972

- 973] [discussing the effect of doubtful collectability on the value o f a converted asset ] , or even evidence that defendants intentionally chose not to collect the full amoun t due for the sale of their FPI stock in
order to minimize the ir liability in this litigation. (See Elliott
, supra , at p. 212;

not valid deductions from [defendants’] profits.” This argument confuses the price of a wrongfully acquired asset with the costs associated with its acquisition. “One who misappropriates the property of another is not entitled to deduc t any of the costs of the transactions by which he accomplished his wrongful conduct.” ( A & M Records, Inc. v. Heilman (1977) 75 Cal.App.3d 554, 570.) The purchase price of the misappropriated property, however, is not a transactional cost. (See Rest.3d Restitution & Unjust Enrichment, § 51 .) Indeed, in Ward the Supreme Court held that the defendant was not entitled to a deduction for commissions and other transaction costs, but the defendant did receive a credit for the $4,000 per acre purchase price o f the property he misappropriated and resold for $5,000 per acre, so that the plaintiff recovered a judgment “representing the $1,000 per acre secret profit.” ( Ward
, supra , at pp. 739

- 740, 742, 744.)47

Janiszewski v. Behrmann (1956) 345 Mich. 8, 29 [75 N.W.2d 77, 93] [court will not “permit the tortious taker to escape by paying only the give

- away price at which he sold, regardless of fair value”]

. ) Finally, the trial co urt should instruct the jury
, consistent with the R estate ment, that “‘[w]here a person is entitled to a money judgment against another because by fraud, duress or other consciously tortious conduct the other has acquired, retained or disposed of his property, the measure of recovery for the benefit received by t he other is the value of the property at the time of its improper acquisition, retention or disposition, or a higher value if this is required to avoid injustice where the property has fluctuated in value

. . . .’ (Rest., Restitution, § 151, p. 598.)” ( C olgan v. Leatherman Tool Group, Inc. (2006) 135 Cal.App.4th 663, 698

- 699 ; 28 see Gerstle v. Gamble

- Skogmo, Inc. ( E .D. N.Y. 1969) 298 F.Supp. 66, 100

- 101 [“the restitutional basis of recovery is the value of the property at the
time the sale was consummated or a higher value at a subsequent time if the value of the property has thereafter fluctuated”] .) Such an instruction will assist the jury in deciding how to value the second $2.9 million payment, which defendants essentially claim decreased to $400,000. “ Where the subject matter is of fluctuating value, and where the person deprived of it might have secured a higher amount for it had he not been so deprived, justice to him may require that the measure of recovery be more than the value at the time of depri vation. This is true where the recipient knowingly deprived the owner of his property or where a fiduciary in violation of his duty used the property of the beneficiary for his own benefit. In such cases the person deprived is entitled to be put in

28 Colgan v. Leatherman Tool Group, Inc. involved claim s under the f alse

a dvertising l aw, Business and Professions Code section 17500, and the u nfair

c ompetition l aw, Business and Professions Code section 17200. ( Colgan v. Leatherman Tool Group, Inc.
, supra , 135 Cal.App.4th at p. 672.) As noted, n onrestituti onary disgorgement is not available for these claims. ( Id. at pp. 696

- 697 ; see footnote 20 ante .) The issue of how to value an asset that fluctuates in value or that trades in a limited market, however, arises whether the plaintiff is seeking restitution ary disgorgement based on what the plaintiff lost or nonrestitutionary disgorgement based on what the defendant gained.48

subst antially the position in which he would have been had there not been the deprivation, and this may result in granting to him an amount equal to the highest value reached by the subject matter within a reasonable time after the tortious conduct

. ” ( Hutt

v. Dean Witter Reynolds , Inc. ( D.Mass. 1990) 737 F.Supp. 128, 134; see Roxas v. Marcos (1998) 89 Hawai ‘ i 91, 152 [969 P.2d 1209, 1270] [amount of damages for conversion of gold “is the highest value of the gold between

— and including

— the date of conversion
and a reasonable time thereafter”] ; American General Ins. Co. v. Equitable General Corp. (E.D.Va. 1980) 493 F.Supp. 721, 76 5 [ for purposes of rescission, court valued stock “at the highest value attained within a reasonable time ” after announcement of merger] .)

DISPOSITION

The judg ment is reversed as to the amount of defendants ’ unjust enrichment. In all other respects, it is affirmed. The order denying defendants ’ motions for judgment notwithstanding the verdict and new trial is reversed to the extent it denies a n ew trial on
the issue of the amount of defendants ’ unjust enrichment, and in all other respects it is affirmed. The trial court is directed to grant a n ew trial on the issue of the amount of
defendants ’ unjust enrichment only . The parties are to bear their own costs on appeal.

SEGAL, J. *

We concur:

PERLUSS, P. J. ZELON, J.

* Judge of the Los Angeles Superior Court, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constituti on.