Court Opinion

ID: 4911518
Source: CourtListenerOpinion
Date Created: 2021-09-16 19:04:55.555288+00
Date Added: 2024-06-11T08:13:29.332738
License: Public Domain

Filed 9/16/21 Ross v. Fox CA2/7
   NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions
not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has
not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                        SECOND APPELLATE DISTRICT

                                     DIVISION SEVEN

JERRY ROSS et al.,                                        B298873

         Plaintiffs and Appellants,                       (Los Angeles County
                                                           Super. Ct. No. BC576879)
         v.
                                                          ORDER MODIFYING
ALAN FOX et al.,                                          OPINION AND DENYING
                                                          PETITION FOR
     Defendants and                                       REHEARING
Appellants.
                                                          NO CHANGE IN THE
                                                          APPELLATE JUDGMENT

THE COURT:
      The above-entitled opinion filed on August 25, 2021 is
modified as follows:

     On page 34, after the first paragraph, add the following
paragraph:
            The Fox defendants contend on appeal that “no
     reasonable jury could reject the financial elder abuse claim
     on the ground that Ross was not an elder.” But the Fox
     defendants’ attorney emphasized in his closing argument
     that Jerry had not proved the elements of elder abuse as
     set forth in the jury instructions, starting with the
     requirement that Jerry be at least 65 at the time of the
     fraud. The attorney argued, “When you look at the jury
     instructions, there are a few that set forth elements, and
     what they set forth is . . . what the plaintiffs need to prove.
     And they have to prove each and every one. For instance,
     with this financial elder abuse [claim], couple things to
     keep in mind. Prior to 2007, I believe it is, Mr. Ross wasn’t
     65.” The Fox defendants could have argued only that Jerry
     failed to prove his fraud claim, and thus the elder abuse
     claim failed as well. But their attorney elected to highlight
     that Jerry was not 65 prior to 2007 (or more correctly prior
     to 2006), which the jury could have understood to mean the
     fact the first two investments were made prior to when
     Jerry turned 65 caused the elder abuse claim to fail.

      On page 34, in the first sentence of the third paragraph,
add the word “therefore” between the words “could” and
“reasonably” so the sentence reads:
      The jury could therefore reasonably (but erroneously) have
      concluded the fraudulent conduct occurred before Jerry
      turned 65, even though the fraud continued after Jerry
      turned 65 because the Fox defendants continued to take
      Jerry’s investment money until 2012.

                                 2
           Appellants’ petition for rehearing is denied.
           There is no change in the appellate judgment.

____________________________________________________________
      PERLUSS, P. J.        SEGAL, J.             FEUER, J.

                              3
Filed 8/25/21 Ross v. Fox CA2/7 (unmodified opinion)
   NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions
not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has
not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                         SECOND APPELLATE DISTRICT

                                     DIVISION SEVEN

JERRY ROSS et al.,                                        B298873

         Plaintiffs and Appellants,                       (Los Angeles County
                                                           Super. Ct. No. BC576879)
         v.

ALAN FOX et al.,

     Defendants and
Appellants.

      APPEALS from an order and judgment of the Superior
Court of Los Angeles County, Michelle Williams Court, Judge.
Affirmed in part; reversed in part with directions.
      Leonard, Dicker & Schreiber, Richard C. Leonard and
Steven A. Schuman for Plaintiffs and Appellants.
      Munger, Tolles & Olson, Mark R. Yohalem and Maggie H.
Thompson for Defendants and Appellants.

                              __________________________
       Jerry Ross and his children Eric Ross and Jenny Zipkin
(collectively, the Rosses) appeal from an order granting the
motion for a new trial filed by Alan C. Fox and ACF Property
Management, Inc. (collectively, the Fox defendants) and denying
Jerry’s motion for judgment notwithstanding the verdict on his
claim for financial elder abuse.1 The Rosses, who invested more
than $4.7 million in 13 commercial real estate investment
companies syndicated by the Fox defendants over a 14-year
period, filed this action for breach of fiduciary duty, fraud,
securities fraud, and financial elder abuse (of Jerry), alleging the
Fox defendants made misrepresentations in the investment
offering materials to conceal their taking of millions of dollars of
profits, fees, and commissions. The jury returned a verdict for
the Rosses on fraud, securities fraud, and breach of fiduciary duty
and for the Fox defendants on financial elder abuse. The jury
awarded more than $12.3 million to the Rosses, including
$8 million in punitive damages. The trial court also awarded
over $800,000 for rescission. On appeal, the Rosses contend the
trial court erred in granting the Fox defendants’ new trial motion
based on an inconsistent verdict (finding the Fox defendants
liable for fraud and related claims, but not financial elder abuse),
instead of entering judgment in Jerry’s favor for financial elder
abuse.
       The Fox defendants filed a protective cross-appeal from the
judgment, in which they contend the trial court abused its
discretion in allowing a key witness the Rosses concealed during
discovery to testify and in allowing improper expert testimony.

1     We refer to the Jerry and Eric Ross by their first names to
avoid confusion.

                                 2
The Fox defendants also argue instructional error and the trial
court’s approval of erroneous verdict forms proposed by the
Rosses. Further, they challenge the consequential and punitive
damages awards and the trial court’s award of prejudgment
interest.
      We reverse the trial court’s order granting a new trial and
affirm the court’s order denying the Rosses’ motion for judgment
notwithstanding the verdict. We also reverse the punitive
damages award against ACF. We otherwise affirm. We remand
to the trial court with instructions to enter judgment in favor of
the Rosses, but to strike the punitive damages award against
ACF.

      FACTUAL AND PROCEDURAL BACKGROUND

A.     The Rosses’ Investments with the Fox Defendants
       Jerry is a retired television writer who began investing in
real estate, including three small apartment buildings, in the late
1990s. Jerry was born in August 1941. Jerry’s son Eric also
invested in apartment buildings and helped manage his father’s
properties. Jerry’s daughter Zipkin is a pediatrician.
       Fox trained as a lawyer and is the principal and founder of
ACF, which he incorporated in 1968. The Fox defendants are
primarily engaged in syndicating commercial real estate,
particularly suburban shopping centers. As part of their
syndication business, the Fox defendants identify investment
opportunities, conduct due diligence and negotiate terms for the
acquisition and debt financing of a shopping center, and then set
up a limited liability company (LLC) or series of LLC’s to take
title to each shopping center that is acquired. The Fox

                                 3
defendants sell shares in the LLC’s to accredited investors2
before, during, or after the property acquisition. ACF serves as
the managing member of each LLC and usually acts as the
manager of the underlying property. Investors in ACF’s
syndications receive ordinary distributions from shopping center
operations through the LLC and larger special distributions
when a shopping center is sold or refinanced. Syndication allows
investors to benefit from the income, appreciation, and tax
advantages of owning a large commercial property that would be
unavailable to them if they invested individually.
       Jerry and Fox first met in approximately July 2004, when
Jerry was considering selling three apartment buildings in which
he had about $4 million in equity and investing the proceeds with
ACF in shopping centers. Jerry sent an email to Fox explaining
as to the $4 million, “It’s most of my kids’ inheritance, with some
left over for some charities. What I ask is that you not put me
into anything you wouldn’t put your own children into, and that
we spread the risk around.” Fox suggested a few different
shopping centers that ACF was in various stages of syndicating.
After further discussions and an in-person meeting, Jerry
purchased for Eric and Zipkin a $150,000 interest in the LLC
that acquired the Provinces shopping center in Chandler,
Arizona. Eric and Zipkin were not materially involved in the
transaction; rather, Jerry communicated directly with Fox and
provided the investment money. On May 19, 2005 Jerry made

2     An accredited investor is an individual who has a net worth
exceeding $1 million and an income of at least $200,000 in each of
the previous two years (or a married couple with $300,000 in
combined income) and an expectation to receive the same income
in the current year.

                                 4
his first personal investment with ACF when he purchased a
$900,000 interest in the LLC that acquired the Highlands Ranch
shopping center in Denver, Colorado. Jerry was 63 at the time.
       Between 2004 and 2012 the Rosses cumulatively invested
approximately $4.7 million in 13 ACF syndications.3 Provinces
and Highlands Ranch were the only syndications in which the
Rosses invested before Jerry turned 65 in August 2006. Jerry
received all documents from the Fox defendants related to Eric’s
and Zipkin’s investments and directed Eric’s and Zipkin’s
investment decisions. Zipkin testified she did “not really” read
the investment documents she signed and instead relied on her
father’s advice. Eric read the documents and discussed the
investments with Jerry, but ultimately Eric “pretty much”
accepted Jerry’s decisions.
       Before the Rosses invested in each syndication, the Fox
defendants provided them two documents related to the offering:
a single-page executive summary and a single-page table of
financial projections (the offering documents).

3      We have rounded the amounts of the investments and
returns. Jerry invested $2.8 million in 11 syndications:
Highlands Ranch, North Oak, Knox Street Promenade, Pipeline
Plaza, Writer Square, Market at Southpark, Bell Creek, Loggins
Corners, Tower Plaza, Trophy Club, and Laveen Ranch. Eric
invested $1 million in six syndications: Provinces, Deer Creek,
North Oak, Knox Street Promenade, Writer Square, and Loggins
Corners. Zipkin invested $950,000 in five syndications:
Provinces, Deer Creek, North Oak, Knox Street Promenade, and
Loggins Corners. Eric’s and Zipkin’s interests in Loggins Corners
($125,000 each) were given to them by Fox after the Knox Street
Promenade property was placed into receivership; the lender
later foreclosed on the property.

                               5
       The executive summary for each offering included entries
for: “Location,” “Price,” “Property Description,” “Area
Description,” “Demographics,” “Year Built,” “Projected Annual
Net Operating Income,” “Cash Required,” “Projected Return,” and
“Minimum Investment.” The financial projections included the
monthly gross income and expenses of the shopping center
projected over a five-year period and the projected return on the
investment. The projections were based on assumptions as to the
“Net Investment,” which was the sum of the “Purchase Price,”
“Loan and Closing Costs,” and “Operating Reserves,” less “Loans
Payable.” For all of the Rosses’ investments, the “Price” listed on
the executive summary was identical to the “Purchase Price” in
the financial projections, and the “Cash Required” in the
executive summary was identical to the “Net Investment” in the
financial projections.
       As of June 30, 2018 the Rosses had received nearly $3.7
million in distributions from their cumulative investment of $4.7
million over the prior 14 years. They still held interests in six
syndications that generated an additional $207,000 between
July 1, 2018 and March 13, 2019.

B.     The Complaint
      The Rosses filed this action on March 26, 2015. The
operative first amended complaint asserted causes of action
against the Fox defendants for breach of fiduciary duty, fraud,
securities fraud, financial elder abuse as to Jerry (elder abuse),
and an accounting.4 The complaint alleged the Fox defendants

4     The operative complaint named 36 defendants, including
the Fox defendants, several ACF executives, real estate brokers

                                 6
made numerous intentional misrepresentations in the executive
summary and financial projections for each syndication and in
other oral and written communications with the Rosses,
including statements about (a) purchase prices; (b) projected
expenses, including closing costs; (c) actual performance of the
investments; (d) the reasons for the investments’ performance; (e)
the reasons “[d]efendants were recommending the purchase and
sale of various properties (i.e., [d]efendants . . . were only
interested in creating more transactions so that they could take
more illegal fees and commissions)”; (f) the costs and benefits of
refinancing; and (g) defendants’ earnings from the investments.
      The Rosses alleged the misrepresentations were part of a
scheme among the Fox defendants and associated brokers to
mislead investors about the cost of the properties acquired in
each syndication and then to “pay themselves a series of
commissions and fees that approximately make up the difference
between the stated purchase price and the actual purchase price.
Some of the fees were charged as closing costs in connection with
the purchase; some fees were charged during the ownership of
the property, usually during refinancing; and some fees were
charged in connection with the sale of the properties.” The
complaint included detailed allegations as to syndications for
Writer Square, the Market at Southpark, Loggins Corners, Tower
Plaza, and Knox Street Promenade shopping centers and alleged
on information and belief that the Fox defendants engaged in the
“same or similar conduct” with respect to all of the syndications
in which the Rosses invested.

alleged to have collaborated with the Fox defendants, and the
LLC’s in which the Rosses invested. The Rosses dismissed all
defendants other than the Fox defendants prior to trial.

                                7
       On July 17, 2017 the Rosses filed an amendment to their
prayer for relief to include a prayer for rescission and the return
of the money they invested, less any distributions, plus
“consequential damages in an amount representing a fair and
reasonable rate of return on the investments from the time the
investments were made.” The Rosses also sought punitive
damages and attorneys’ fees.

C.     The Trial
       A jury trial was held between May 29 and July 3, 2018,
with the trial bifurcated into liability and punitive damages
phases. Jerry, Eric, Zipkin, Fox, and ACF’s chief operating
officer Eric Diamond testified, and excerpts of the deposition
testimony of ACF’s former chief financial officer Edward Delava
were read to the jury. The Rosses also called Carl Albert, a third
party who invested in several ACF syndications between 2002
and 2010. Paul Habibi, a syndicator and college lecturer,
testified as the Rosses’ expert on damages. Three experts
testified for the Fox defendants: Maryellen Sebold, a forensic
accountant, analyzed the Rosses’ investments and distributions;
Alan Herd, a syndicator and consultant, testified about custom
and practice in the syndication industry; and Andrew Minstein, a
property appraiser, testified as a rebuttal witness with respect to
Habibi’s damages analysis.

       1.     The liability phase evidence
            a.    The offering documents and settlement
                  statements
      Potential investors who inquired about investing in ACF
syndications were provided only the executive summary and

                                 8
financial projections for the syndication and photographs of the
property. The escrow agent issued to the LLC, upon the closing
of the sale of each property, a buyer statement of settlement
(settlement statement).5 The settlement statements included the
price the LLC paid to purchase the property, as well as the
closing costs and credits, acquisition fees, and commissions.
Prior to the litigation the Rosses did not receive any settlement
statements for the underlying properties in connection with their
investments.
       The settlement statements showed that for each of the 13
syndications in which the Rosses invested, the purchase price
reflected in the offering documents was greater (often
significantly greater) than the LLC’s purchase price for the
underlying property. For example, the purchase price for the
Writer Square syndication was $64 million in the offering
documents, but the LLC purchased the property for $58.4 million
(a difference of $5.6 million). The difference between the
purchase price and the price paid for the Market at Southpark in
Littleton, Colorado was $2.8 million. The difference for the Knox
Street Promenade in Dallas, Texas was more than $2.2 million.
The difference for Highlands Ranch, Jerry’s first investment, was
just above $1 million. Ten of the 13 syndications reflected a
difference of more than $1 million.
       The settlement statements also showed that for nine of the
syndications, the LLC’s paid ACF a commission or acquisition fee
on the purchase, ranging from a $1.2 million “consulting fee” paid

5     The offering documents for each of the 13 syndications in
which the Rosses invested were admitted at trial as well as the
settlement statements for 12 of the 13 syndications (a settlement
statement for Provinces appears to have been omitted).

                                9
to ACF in connection with Writer Square to $50,993 in
“commissions to ACF” paid upon the purchase of Laveen Ranch
Marketplace in Phoenix, Arizona. In some instances where the
LLC’s later sold the property, the settlement statements reflected
commissions to ACF on that sale as well, including a $553,000
commission for sale of Highlands Ranch in 2011 and a $1.4
million commission for sale of Writer Square in 2013.

             b.     Jerry’s testimony
       Jerry testified that at the time he invested in each ACF
syndication, he believed the purchase price set forth in the
offering documents was the price the LLC’s paid to acquire the
underlying properties.6 Jerry did not know that ACF was
collecting commissions or acquisition fees on the transactions,
and they were not disclosed to him. Jerry believed the “[c]ash
[r]equired” in the executive summary (which in all cases was
identical to the “[n]et [i]nvestment” in the financial projections)
reflected the amount of money the LLC investors collectively
needed to put up to purchase the underlying shopping center.
His understanding was that this net investment reflected the
down payment paid to the seller plus loan and closing costs and
the operating reserve, as set forth in the financial projections.
       Jerry reviewed the executive summary and financial
projections for Writer Square. The executive summary and
financial projections for the project listed a purchase price of $64

6      Eric also testified he assumed the prices listed in the
offering documents reflected the price the LLC paid for the
underlying property. Zipkin testified she did not read the
offering documents, relying on Jerry to make her investment
decisions.

                                 10
million, with cash required (shown as a net investment) of $23.3
million. The financial projections page calculated the $23.3
million net investment by adding to the $64 million purchase
price the loan and closing costs of $750,000 and the $3 million
operating reserve, then subtracting the “interest only” loan of
$44.45 million.
       Jerry would not have invested any money with ACF if he
had known the purchase price on the offering documents was not
the actual price of the syndicated property. In his view, the
inflated purchase price meant his investment in each syndication
was already “in the hole” when he invested; that is, even if the
underlying property appreciated at the rates projected in the
offering documents, Jerry’s effective rate of return was less
because he acquired a beneficial interest in the property at a
substantially higher price. Further, had Jerry known his
required cash investment exceeded the true pro rata cost for
acquiring each property, he would have investigated where the
excess money was going and learned of the excessive and
arbitrary commissions and fees ACF was collecting. He added,
“All of the investors’ profit could possibly have disappeared into
the fees that [Fox] was taking. And he would benefit and the
other investors wouldn’t.” By contrast, in his initial phone
conversation with Fox in 2004, Jerry asked Fox “What do you get
out of it[?]” and “[Fox] said, a management fee of approximately 4
percent. He also said he invests in the properties the same way
the investors do, and he makes his money the same way the
investors do, by investing in the properties or many of the

                               11
properties . . . .”7 Investor communications from ACF reinforced
that the benefit to Fox would come from appreciation in the value
of the shopping centers. For example, an investor letter sent to
Eric and Zipkin (care of Jerry) in January 2005 stated, “If we do
nothing but buy at the low end of the range and sell at the high
end, we’ll enjoy an excellent return on our investment.”
       During cross-examination, Jerry was shown the executive
summary for Highlands Ranch, the first syndication he invested
in, which stated, “Because this property is being offered at
virtually the acquisition cost, investors will receive . . . a cash
return of 11% per year.” The financial projections likewise
stated, “[T]his property is available virtually at cost, after
investors receive a cumulative noncompounded preferred cash
return of 11%. The balance of cash available upon refinance or
sale will be divided equally between investors and Alan C. Fox.”
Asked whether these representations, including the word
“virtually” alerted Jerry that the purchase price of the LLC was
not the same as the cost of the property, Jerry testified he
thought it meant “we were getting [the property] at less than the
acquisition cost.” Jerry testified he noticed the “virtually at cost”
language had not been included in the offering documents for the
earlier Provinces syndication in which he had invested, and he
assumed it meant the investors were actually going to receive
Highlands Ranch at a discount from its purchase price and Fox

7      The LLC purchase agreements the Rosses executed for
each investment included a representation that the “[b]uyer has
made its own independent investigation as to the nature of this
investment and has not relied upon oral representations of the
[s]eller, [m]anager, or other buyers in determing whether to
invest.”

                                 12
“was going to make it up at the back-end when it was sold.”
However, Jerry did not ask Fox about the language, nor did he
ever ask Fox, “Are we getting this property at exactly your
acquisition price?”
       Jerry was also shown a 2007 email from Fox regarding the
syndication for North Oak Marketplace in Kansas City, Missouri.
Fox stated Jerry would be “exchanging into North Oak
Marketplace 07 B, LLC for $500,400 which purchases 10.535% of
the building. I am selling this to you at approximately my cost,
and [my wife] and I will own the balance of the property.” Jerry
testified that in light of the language in the offering materials he
was provided for Highlands Ranch he believed Fox meant by
“approximately my cost” that Jerry would receive an interest at a
discount.

            c.    Fox’s testimony
      Fox admitted during his testimony that for all 13
syndications in which the Rosses invested, the purchase price in
the LLC offering documents was different than the price paid for
the underlying property. However, Fox testified this was
appropriate because the investors were buying an interest in the
syndication LLC’s, not the underlying property.8
      According to Fox, the purchase price in the offering
documents referred to the value at which ACF “transferred the

8     The operating agreements for the LLC’s stated, “No
[m]ember shall have any ownership interest in the property of
the [LLC].” The purchase agreements executed by the Rosses for
each investment stated the investor was buying a membership
interest in the LLC and a “beneficial interest in and to the
[p]roperty.”

                                 13
property to the LLC’s,” not the purchase price of the shopping
center.9 However, during examination by the Rosses’ attorney,
Fox acknowledged as to Writer Square that the offering
documents referred to the executive summary for Writer Square
(the shopping center, not the LLC), and the listed purchase price
of $64 million was for the shopping center, not the LLC. The
additional information on the executive summary, including the
“Location,” “Property Description,” “Area Description,”
“Demographics,” “Year Built,” “Projected Annual Net Operating
Income,” and “Projected Return” all referred to the shopping
center, not the LLC. Further, Fox agreed that the LLC’s
operating income is the same as the shopping center, and the
LLC did not own anything other than the shopping center and
any money it had in its bank account. When asked whether it
was “true that the . . . purchase price is the price at which the
LLC or if there’s more than one, the LLCs, paid to acquire 100
percent of the Writer Square property at the time of the executive
summary,” Fox answered, “Yes.” Further, when asked whether
“the price paid to the seller to buy Writer Square was
$58,400,000,” Fox responded, “That was paid to the seller, yes.”
       Fox explained the LLC’s were the investment product being
sold by the Fox defendants, akin to a coffee shop selling coffee,
whereas the price for the acquisition of a shopping center was a
cost of business, and a markup was appropriate as in any

9     The properties were not actually sold or transferred from
ACF to the syndication LLC’s. The settlement statements reflect
that each LLC generally took title to the property from its
previous owner. However, Fox testified that at the time an LLC
acquired a property, investor funds were not necessarily
available, and Fox used his own funds to close escrow.

                               14
business to compensate the Fox defendants for their efforts and
expenses in identifying and analyzing opportunities, preparing
the syndication, fronting costs, and assuming substantial risk at
the time of acquisition. Fox never represented in the offering
documents that the purchase price was the price for acquiring the
underlying property. However, Fox also never told investors the
purchase price included costs in addition to the price at which an
LLC acquired the underlying property. Asked if it was true
“there were perhaps five people who asked you information about
the price of the property over the years that you were
syndicating, and you refused to tell them the price?” Fox
answered, “Yes, I believe that’s correct.” Fox admitted he may
have told his staff not to answer the question, “What is the price
of the property?” Fox also admitted that none of the acquisition
fees and commissions taken by ACF was disclosed to investors.10

            d.    The Bell Creek Commons acquisition
      One significant issue at trial was Jerry’s investment in the
syndication of the Bell Creek Commons shopping center in
Mechanicsville, Virginia (Bell Creek). In April 2010 ACF, acting
through broker Gary Dragul, entered escrow for the acquisition of
the property for $11.1 million. The offering documents, which
were sent to Jerry in June 2010, stated a purchase price of $12.5

10    With respect to the acquisition of Writer Square, Fox
admitted ACF had no agreement with the LLC to earn a fee in
connection with the transaction, and he personally determined
the LLC should pay ACF a $1.2 million fee at closing based on
the “complexity of the transaction, the quality of the transaction,
the length of time it took, the level of expertise,” and his
guaranteeing a $44.5 million loan.

                                15
million. On June 22 Jerry emailed Fox, “I see online that the
place was listed for sale at $11,250,000. How come our purchase
price is 12.5?” On June 26 Fox responded, “I have no idea when
the $11,250,000.00 price was posted, or even if it was ever
official. Sometimes a broker will know that a property is
available, then post his or her own ‘listing’ at a price which was
never even discussed with the owner. [¶] I have attached the
offering package which I received for Bell Creek Commons. As
you can see, the asking price is $13,250,000.00. The price to my
investors is $12,500,000.00 . . . . Since there is a lot of money in
hedge funds chasing relatively few outstanding shopping centers,
prices have increased about 10% during the past six months.
Several buyers would now pay a 7.25 [capitalization rate] on this
property, which is a price of $13,543,145.00—about 8.35% more
than you are paying. I am under a confidentiality agreement on
the offering package, so PLEASE KEEP THIS CONFIDENTIAL.
It is vital to my ability to buy well that the listing brokers . . .
trust me to keep their information entirely confidential.” Fox
sent Jerry the seller’s offering document that advertised a listing
price of $13.3 million. Jerry proceeded to invest $500,000 in the
syndication in August 2010.
       After Jerry invested in Bell Creek and the purchase of the
shopping center closed, Fox learned the listing broker was
advertising that the property had been sold for $11.1 million.
Fox forwarded the broker’s advertisement to Dragul and wrote,
“This has caused serious problems to me with investors. Please
make sure this NEVER happens again.” Dragul responded,
“We’ll put it in the contract so they are precluded from
advertising.” Fox testified he told Dragul that investors were
upset in order to command Dragul’s attention, and Fox’s true

                                 16
concern with brokers advertising prices was to avoid publicity: “It
was to keep this total thing private. I’ve never advertised for
investors. I don’t like advertising. Investors can—anybody can
look up what the price of anything is.”

         2.    Expert testimony on damages
      The Rosses’ expert Habibi testified that in his experience as
a syndicator he believed he had a duty to give investors all facts
necessary for the investor to make a well-informed investment
decision, including how the deal would be structured and how
profits, losses, and cash flows would be divided. He opined that,
“as long as fees are generally disclosed and mutually agreed to by
the parties, I would consider them to be above board and proper.
So I guess that’s another way of saying that a syndicator or
sponsor can generally charge whatever they want as long as
everyone has an understanding as to what that is and everyone
has agreed to it.” Habibi’s own practice was to furnish investors
with a table identifying both where investor money is coming
from and the costs and income of the investment, and generally
to furnish settlement statements for property acquisitions.
       Habibi testified he understood the Rosses were seeking
rescission of their investments, and that rescission was a “legal
term,” but his understanding was “it’s effectively undoing the
investment and making it such as if the Rosses had never made
those investments to begin with and instead had put those
monies elsewhere or in some alternate scenario.” Given a
hypothetical based on the facts of this case, Habibi was asked,
“What would the Rosses have to do to rescind these
transactions?” Habibi responded rescission would be a two-part
process: “The first part would be the Rosses give back their

                                17
interest in those entities. And then the second portion of it would
be calculating the accumulation of funds at a certain growth rate
of monies, the net monies that were invested still in the deals
themselves. [¶] You mentioned [$]4.7 million went in and about
[$]3.6 went out, so currently there’s about [$]1.1 million capital to
stop and return. So that portion of the money is due to the
Rosses. But also, throughout the course of the 14 years the net
investment that was in the deals to begin with would be growing
at a specific growth rate.”
       Tracking when each dollar went into the investments and
when each dollar was paid out, Habibi projected a growth rate of
the Rosses’ funds had they been invested elsewhere using three
different measures for rate of return. First, Habibi assumed the
Rosses continued to invest in apartment buildings instead of
investing with the Fox defendants and applied an index of
monthly investor returns paid by real estate investment trusts
that hold apartment holdings published by the National
Association of Real Estate Investment Trusts (NAREIT), and
opined the Rosses would have seen a return of $4.4 million on
their investment money between 2004 and the time of trial.
Second, Habibi calculated an average annual rate of return of
15.1 percent, which he based on a combination of the projections
set forth in the Fox defendants’ offering documents for the
Rosses’ investments.11 Applying this rate as a constant return
across the investment period, Habibi estimated the Rosses would
have achieved a return of nearly $9.9 million. Third, Habibi

11    Habibi’s calculation of the average rate of return was based
on only nine of the Rosses’ 13 investments, because the offering
documents for only those nine provided both a projection of cash
flows and a return from appreciation of the properties.

                                 18
applied a constant rate of return of 22 percent based on a
projection given in a letter ACF sent to its investors in April
2003. Based on this projection, Habibi calculated a return of
about $22.1 million.
       Minstein testified in rebuttal that Habibi’s second and
third estimates should be given no weight because they were
based on a constant rate of return, whereas returns on real estate
investments fluctuated dramatically over the 14-year period of
the analysis, and the amounts the Rosses had invested with ACF
at any one time varied. Moreover, the second rate of return (15.1
percent) was based on an arbitrary and incomplete selection of
the offering documents that overstated the average of ACF’s
projections,12 and the third rate of return (22 percent) was based
solely on one projection made in 2003 that was never transmitted
to the Rosses, was given 17 to 18 months before their first
investment, and did not relate to the portfolio of syndications in
which the Rosses invested.
       With respect to Habibi’s lowest estimate, Minstein opined
that Habibi’s use of the NAREIT apartment index was not the
appropriate measure of return “because the Rosses invested in 13
separate investments over an [eight-year] term and all of the
investments were in shopping centers.” Minstein opined that
data about the rate of returns paid by private investment
companies with shopping center holdings existed and would be
the best indicator of an appropriate rate of return. However,
Minstein did not offer an opinion as to the rate of return, and he

12   Minstein testified that when he tried to calculate the
average rate of return based on the projections in the offering
documents, he calculated a rate of 12.6 percent.

                                19
did not offer an opinion as to how much the Rosses were damaged
or how to measure damages in connection with rescission.13

        3.    The jury instruction on elder abuse14
      The trial court instructed the jury with a slightly modified
version of CACI No. 3100 on elder abuse proposed by the Fox
defendants as follows: “Plaintiff Jerry Ross claims that
defendants violated the Elder Abuse and Dependent Adult Civil
Protection Act by taking financial advantage of him. [¶] To
establish this claim, Jerry Ross must prove that all of the
following are more likely to be true than not true. [¶] One, that
defendants took Mr. Ross’s investment [monies]; [¶] two, that
Jerry Ross was 65 years of age or older at the time of defendants’

13     Herd, the Fox defendants’ expert on syndication industry
custom and practice, testified that investing in a syndication is a
“strictly different kind” of investment than buying real property,
and “you very rarely see [a property’s acquisition cost] on the
prospectus when you’re buying a syndication because it’s . . . not
relevant to the person that’s buying it.”
Sebold testified as to her analysis of the Rosses’ payments into
and distributions received from the syndications between 2004
and 2014. Habibi testified his analysis yielded virtually the same
data as Sebold’s, but “[j]ust so we’re all on the same page, I
literally took my numbers and made adjustments so they were
dollar for dollar the exact same as hers.” Neither party has
raised any issues regarding the testimony of Herd and Sebold on
appeal.
14     The Fox defendants contend the court erred in instructing
the jury with respect to fraud, fiduciary duty, bad faith, and
consequential damages. We discuss the instructions relevant to
those contentions in our discussion of the cross-appeal below.

                                20
conduct; [¶] . . . three, that defendants took Mr. Ross’s investment
monies with the intent to defraud him; [¶] four, that Jerry Ross
was harmed; and [¶] five, that the defendants’ conduct was a
substantial factor in causing his harm.”
       The Rosses proposed a more detailed instruction that
stated with respect to the second element: “Jerry Ross was
65 years old on August 16, 2006. At the time he invested in the
following investments he was 65 years old and under California
law he is considered an elder: Knox St. Promenade, North Oak,
Pipeline, Writer Square, Bell Creek, Market at Southpark,
Loggins Corner, Tower Plaza, Trophy Club, and Laveen Ranch.”
       At the hearing on the jury instructions, the trial court
indicated it was inclined to give the Fox defendants’ version
because “it inserts the names and the age [into CACI No. 3100]
but doesn’t talk specifically about the facts of this case.” The
Rosses’ counsel objected that the Fox defendants were “inviting
error . . . because some of the investments, or at least a couple of
them, were before [Jerry] was 65. They take that out, it’s up to
them.” The Fox defendants’ counsel asked the “CACI be given as
it reads.”

        4.     The jury verdict on liability
       On July 2, 2018 the jury returned a verdict for the Rosses
on fraud, securities fraud, and breach of fiduciary duty and for
the Fox defendants on elder abuse. The verdict form contained
35 questions, divided into six sections. Section one (questions 1-
8) related to Jerry’s causes of action and asked the jury to select
in favor of Jerry or the defendant on (1) Jerry’s claim against Fox
for breach of fiduciary duty; (2) Jerry’s claim against ACF for
breach of fiduciary duty; (3) Jerry’s claim against Fox for fraud;

                                21
(4) Jerry’s claim against ACF for securities fraud; (5) Jerry’s
claim against Fox for securities fraud; (6) Jerry’s claim against
ACF for securities fraud; (7) Jerry’s claim against Fox for elder
abuse; and (8) Jerry’s claim against ACF for elder abuse. The
jury held in favor of Jerry on questions 1-6 and in favor of the Fox
defendants on questions 7-8. Sections two and three of the
verdict form (questions 9-20) contained analogous questions for
Eric and Zipkin (without questions as to elder abuse).
      Section four (questions 21-25) stated, “Complete this
section only if you find in favor of Jerry Ross on at least one of his
claims.” Question 21 stated, “We award Jerry Ross rescission,”
and the jury selected “yes.” Question 22 stated, “We award Jerry
Ross the following amount of damages,” and the jury entered
$2,521,938.51. Question 23 asked the jury to assign a percentage
of responsibility for damages to Fox and ACF, and the jury
entered 100% for each defendant. Question 24, under the
subheading “Punitive Damages,” asked the jury, “Did Alan C. Fox
engage in the conduct with malice, oppression or fraud?” The jury
selected “yes.” Question 25 asked the same question as to ACF,
and the jury again selected “yes.” Sections five and six of the
verdict form (questions 26-35) stated the same damages
questions for Eric and Zipkin, and the jury selected the same
answers as they did for Jerry, except that the jury awarded Eric
damages of $925,708.42 and Zipkin damages of $869,740.59.

        5.    Punitive damages phase
      On the afternoon of July 2, 2018 trial commenced on
punitive damages. The Rosses introduced one additional trial
exhibit concerning Fox’s net worth, and trial counsel presented
closing arguments. The exhibit was a 15-page document

                                 22
produced by Fox in response to the court’s order authorizing the
Rosses to take punitive damages discovery pursuant to Civil Code
section 3295. The document included a “Summary of Equity and
Pro-Forma Cash Flow as of December 31, 2016” signed by Fox,
dated February 17, 2017 (financial statement). As described by
the Rosses’ attorney during closing argument, the document
indicated that Fox had a net worth in excess of $250 million at
the end of 2016, his annual salary from ACF was $1.5 million,
and he received $875,000 in monthly income from his properties’
operations.15
      On July 3, 2018 the jury awarded punitive damages against
Fox in the amounts of $2.4 million to Jerry, $800,000 to Eric, and
$800,000 to Zipkin. The jury entered punitive damage awards in
the same amounts against ACF.

D.    Statement of Decision on Rescission and Fees
      Following the receipt of the jury verdicts, the Rosses filed a
proposed judgment, a motion for an award of attorneys’ fees
pursuant to Code of Civil Procedure section 2033.420,16 a motion
for expert witness fees pursuant to section 998, and a
memorandum in support of including postverdict interest in the
judgment. The Fox defendants objected to the proposed
judgment and filed a motion pursuant to California Rules of

15    We granted the Fox defendants’ motion to file this exhibit
under seal. However, counsel’s statements in open court
regarding Fox’s net worth and income reflected in the exhibit
were included in the Reporter’s Transcript and are not
confidential.
16   All further undesignated statutory references are to the
Code of Civil Procedure.

                                 23
Court, rule 3.1590(k) for a hearing on the judgment prior to the
trial court’s award of rescission, arguing the jury’s damages
award already included the value of the return of the Rosses’
investment, and therefore the Rosses were not entitled to any
further rescissionary amount.
       After a hearing, further briefing, and argument, on March
7, 2019 the trial court issued its final statement of decision. The
court determined the Rosses were entitled to “rescission
damages” in the amount of the Rosses’ total investment less
distributions paid to them; statutory interest on the jury’s award
of consequential damages from the date of the verdict; attorneys’
fees pursuant to section 2033.420 (for 25 percent of the time
spent by Rosses’ attorneys after September 11, 2017 attributable
to ACF’s unreasonable denial of requests for admissions); and
expert witness fees pursuant to section 998.
       On April 26, 2019 the trial court entered judgment on the
jury’s verdict. With respect to rescission, the court ordered the
Rosses to return their remaining LLC interests, for the Fox
defendants to pay the Rosses $1,075,679 (the Rosses’ total
investment of $4,744,381 less distributions through June 30,
2018 of $3,668,702) less a credit of $207,327 for distributions
received from the Fox defendants on the remaining LLC’s after
July 1, 2018 but before judgment. Jerry, Eric, and Zipkin were
awarded as compensatory damages $2,521,939, $925,708, and
$869,741, respectively, plus 7 percent annual postverdict interest
through the date of the judgment; $8 million in punitive damages
($4 million from Fox and $4 million from ACF); $241,857 in
attorneys’ fees; and $146,206 in expert fees.

                                24
E.    The Rosses’ Motion for Judgment Notwithstanding the
      Verdict and the Fox Defendants’ Motion for a New Trial
      On May 13, 2019 Jerry filed a motion for JNOV on financial
elder abuse, arguing that the jury verdict on fraud, breach of
fiduciary duty, and securities fraud, and the jury’s finding the
Fox defendants engaged in conduct with malice, oppression, or
fraud compelled a verdict in his favor on elder abuse because he
was 65 years old at the time of most of the Fox defendants’
conduct. On the same day, the Fox defendants filed a notice of
intent to move for a new trial pursuant to section 657,
subdivisions (1) and (3) through (7). In their motion, the Fox
defendants asserted the jury’s verdict on the fraud-related claims
and on elder abuse were inconsistent and against the law. (§657,
subd. (6).)17
      After a hearing, on June 24, 2019 the trial court denied
Jerry’s JNOV motion and granted a new trial on all claims as to
all parties. In its two-page ruling, the court held, “[I]t is
undisputed that Jerry Ross invested with Defendants while he
was 65 or older. That being the case, the jury’s verdict on Jerry
Ross’s elder abuse cause of action is inconsistent with its verdicts
on the causes of action for breach of fiduciary duty, fraud and
securities fraud. The remedy for ‘inconsistent verdicts is not to
grant judgment as a matter of law in favor of one of the parties,
but rather, to order a new trial.’”
      The trial court ordered a retrial as to all the Rosses, finding
a partial retrial would be prejudicial to the Fox defendants
because Eric and Zipkin’s claims “rely heavily on the interactions

17    The Fox defendants asserted multiple other grounds for a
new trial, which are similar to the grounds for their appeal from
the judgment.

                                 25
between Jerry Ross and [d]efendants, and their clams are
substantially intertwined with those of Jerry Ross, both factually
and legally.” The court did not address the Fox defendants’ other
arguments for a new trial.
      The Rosses timely appealed from the order for a new trial.
The Fox defendants filed a protective cross-appeal from the April
26, 2019 judgment.

                         DISCUSSION

A.    The Rosses’ Appeal
       1.   The trial court abused its discretion in granting the
            motion for a new trial
              a.   Governing law on inconsistent verdicts
      “Inconsistent verdicts are ‘“against the law,”’ and the
proper remedy is a new trial.” (Shaw v. Hughes Aircraft Co.
(2000) 83 Cal.App.4th 1336, 1344 (Shaw) [new trial required
where general verdicts were inconsistent]; accord, Kurtin v. Elieff
(2013) 215 Cal.App.4th 455, 481.) “Where the jury’s findings are
so inconsistent that they are incapable of being reconciled and it
is impossible to tell how a material issue is determined, the
decision is ‘against law’ within the meaning of Code of Civil
Procedure section 657.” (Oxford v. Foster Wheeler LLC (2009) 177
Cal.App.4th 700, 716; see § 657, subd. (6) [new trial may be
ordered where “the verdict, or other decision is against law”].)
“‘The inconsistent verdict rule is based upon the fundamental
proposition that a factfinder may not make inconsistent
determinations of fact based on the same evidence . . . .’
[Citations.] An inconsistent verdict may arise from an
inconsistency between or among answers within a special verdict

                                26
[citation] or irreconcilable findings.” (City of San Diego v. D.R.
Horton San Diego Holding Co., Inc. (2005) 126 Cal.App.4th 668,
682 (City of San Diego).)18 Where a verdict is inconsistent, one
party is “no more entitled than [the other] to have the favorable
verdict credited and the unfavorable one disregarded.” (Shaw, at
p. 1346; accord, Stillwell v. The Salvation Army (2008) 167
Cal.App.4th 360, 375; see Morris v. McCauley’s Quality
Transmission Service (1976) 60 Cal.App.3d 964, 967, 973
[inconsistent general verdicts required reversal of judgment
because they were “against the law”].)
       However, in analyzing a verdict to determine if it is
inconsistent or otherwise defective, “‘[a] verdict should be
interpreted so as to uphold it and to give it the effect intended by
the jury, as well as one consistent with the law and the
evidence.’” (OCM Principal Opportunities Fund, L.P. v. CIBC
World Markets Corp. (2007) 157 Cal.App.4th 835, 877 (OCM)
[upholding two general verdicts]; accord, Wysinger v. Automobile
Club of Southern California (2007) 157 Cal.App.4th 413, 424-425
[reconciling jury’s special verdict finding that employer failed to
engage in interactive process regarding plaintiff’s disability with
jury’s finding the employer was not liable for failing to provide a

18     Although City of San Diego, supra, 126 Cal.App.4th at page
676 involved a special verdict, in referring to irreconcilable
findings (id. at p. 682), the Court of Appeal cited to Campbell v.
Zokelt (1969) 272 Cal.App.2d 315, in which the Court of Appeal
concluded the general verdict for the plaintiff on her negligence
claim against one of two defendants arising from a car accident
was inconsistent with the verdict in favor of the defendant on his
cross-claim against a codefendant, which necessarily meant the
jury found the defendant was not negligent in the accident. (Id.
at pp. 319-320.)

                                 27
reasonable accommodation because jury could have found the
parties never reached the stage of deciding what accommodation
was necessary].) Only “if the verdict is hopelessly ambiguous,
hopelessly inconsistent or incomprehensible” must it be set aside.
(Mixon v. Riverview Hospital (1967) 254 Cal.App.2d 364, 375
[reversing judgment and remanding for new trial as to damages
where verdicts against joint tortfeasors were not reconcilable].)

             b.    Standard of review
       “[A]s a general matter, orders granting a new trial are
examined for abuse of discretion.” (Aguilar v. Atlantic Richfield
Co. (2001) 25 Cal.4th 826, 859; accord, Tun v. Wells Fargo Dealer
Services, Inc. (2016) 5 Cal.App.5th 309, 323; see Jiminez v. Sears,
Roebuck & Co. (1971) 4 Cal.3d 379, 387 [“The determination of a
motion for a new trial rests so completely within the court’s
discretion that its action will not be disturbed unless a manifest
and unmistakable abuse of discretion clearly appears. This is
particularly true when the discretion is exercised in favor of
awarding a new trial, for this action does not finally dispose of
the matter.”].) However, “any determination underlying [the]
order is scrutinized under the test appropriate to such
determination.” (Aguilar, at p. 859; accord, Tun at pp. 323-324
[new trial order predicated on issue of statutory interpretation
reviewed de novo].)
       Here, the trial court’s order granting a new trial was based
on its determination the verdict for the Fox defendants on elder
abuse was inconsistent with the verdict for the Rosses on fraud,
securities fraud, and breach of fiduciary duty. The Rosses
contend this presents a legal question premised on undisputed
facts subject to de novo review, citing cases in which the

                                28
appellate courts independently reviewed inconsistent special
verdicts.19 (See, e.g., Fuller v. Department of Transportation
(2019) 38 Cal.App.5th 1034, 1038 [“On appeal, we review the
special verdict de novo.”]; Singh v. Southland Stone, U.S.A., Inc.
(2010) 186 Cal.App.4th 338, 358 [“On appeal, we review a special
verdict de novo to determine whether its findings are
inconsistent.”]; City of San Diego, supra, 126 Cal.App.4th 668,
678 [“[A] special verdict’s correctness must be analyzed as a
matter of law.”].)
      The Fox defendants argue de novo review applies only to
interpretation of a special verdict, not a general verdict, because,
as the Court of Appeal concluded in City of San Diego, supra, 126
Cal.App.4th at page 345, a special verdict “requires the jury to
resolve all of the controverted issues in the case, unlike a general
verdict which merely implies findings on all issues in one party’s
favor.” (See Singh v. Southland Stone, U.S.A., Inc., supra, 186

19    Contrary to the Rosses’ contention, the jury returned a
general verdict, not a special verdict or verdict with special
findings. “A general verdict is that by which [the jury]
pronounce[s] generally upon all or any of the issues, either in
favor of the plaintiff or defendant; a special verdict is that by
which the jury find[s] the facts only, leaving the judgment to the
Court.” (§ 624; see Shaw, supra, 83 Cal.App.4th at p. 1347, fn. 7.)
A verdict form that asks the jury “to find for plaintiff or
defendant on each cause of action [is] unmistakably a series of
general verdicts.” (Shaw, at p. 1347, fn. 7.) In this case the jury
decided as to each defendant whether the defendant was liable as
to each plaintiff on each cause of action and specified the total
damages. The only specific finding was that the Fox defendants
acted with “malice, fraud, or oppression” as a predicate to the
punitive damages trial. This finding did not convert the general
verdict into a special verdict.

                                29
Cal.App.4th at p. 358 [reviewing special verdict for inconsistency
de novo, explaining that “[w]ith a special verdict, unlike a general
verdict . . . a reviewing court will not infer findings to support the
verdict”].) By contrast, “‘the jury’s general verdict “imports
findings in favor of the prevailing party on all material issues;
and if the evidence supports implied findings on any set of issues
which will sustain the verdict, it will be assumed that the jury so
found.”’” (Morin v. ABA Recovery Service, Inc. (1987) 195
Cal.App.3d 200, 210, disapproved on another ground in Lakin v.
Watkins Associated Industries (1993) 6 Cal.4th 644, 664.)
Further, “‘[i]t is the function of the trial judge to interpret the
[general] verdict from its language considered in connection with
the pleadings, evidence and instructions.’” (OCM, supra, 157
Cal.App.4th at p. 881; accord Woodcock v. Fontana Scaffolding &
Equipment Co. (1968) 69 Cal.2d 452, 456.)
      We agree with the Fox defendants an abuse of discretion
standard applies here. Resolution of the asserted inconsistency
in the general verdict turns primarily on factual issues. The trial
court was in the best position to determine how the jury’s
verdicts on fraud and elder abuse could be reconciled in light of
the pleadings, evidence, and jury instructions. Further, to the
extent the trial court failed to exercise its discretion to determine
whether the verdicts could be reconciled, this was an abuse of
discretion. (Fadeeff v. State Farm General Insurance Co. (2020)
50 Cal.App.5th 94, 104 [“A trial court’s failure to exercise
discretion is itself an abuse of discretion.”]; accord, Kim v.
Euromotors West/The Auto Gallery (2007) 149 Cal.App.4th 170,
176.)

                                 30
             c.    The trial court abused its discretion
       In granting the Fox defendants’ motion for a new trial, the
trial court did not attempt to interpret the verdict “so as to
uphold it and to give it the effect intended by the jury, as well as
one consistent with the law and the evidence.’” (OCM, supra, 157
Cal.App.4th at p. 877.) This was an abuse of discretion. Further,
the verdicts were not factually inconsistent.
       In his JNOV motion, Jerry argued that the verdicts on
fraud, securities fraud, and breach of fiduciary duty “compelled”
the jury to enter a verdict for Jerry on elder abuse because Jerry
was over 65 years of age at the time of some of the Fox
defendants’ conduct. The Fox defendants in their motion for a
new trial agreed with Jerry that “a verdict on one [claim]
‘compelled’ the same verdict on the other,” but they argued the
proper remedy for inconsistent verdicts was to order a new trial.
The trial court, in denying Jerry’s JNOV motion, found that “it is
undisputed that Jerry Ross invested with [d]efendants while he
was 65 years or older. That being the case, the jury’s verdict on
Jerry Ross’[s] elder abuse cause of action is inconsistent with its
verdict on the causes of action for breach of fiduciary duty, fraud
and securities fraud.” In the same order, the court granted the
Fox defendants’ motion for a new trial, but the court made no
additional findings and gave no reasons for its order other than
noting “[d]efendants agree the verdicts on Jerry Ross’[s] claims
are inconsistent.”20

20    The only findings the trial court made were in connection
with its order granting a new trial on Eric and Zipkin’s claims,
finding their claims “rely heavily on the interactions between
Jerry Ross and [d]efendants, and their claims are substantially

                                31
      The trial court abused its discretion in failing to examine
the verdict in the context of the pleadings, evidence, and jury
instructions to determine if it was possible to reconcile the jury’s
findings on the fraud-related claims and elder abuse. (OCM,
supra, 157 Cal.App.4th at p. 877; Wysinger v. Automobile Club of
Southern California, supra, 157 Cal.App.4th at p. 424.) Further,
where the trial court fails to attempt to reconcile the verdict “or
has interpreted it erroneously, the appellate court will interpret
the verdict if it is possible to give a correct interpretation.”
(OCM, at p. 881; accord, Mixon v. Riverview Hospital, supra, 254
Cal.App.2d at p. 375.)
      Under the Elder Abuse and Dependent Adult Civil
Protection Act (Welf. & Inst. Code, § 15600 et seq.), an elder is
defined as any person residing in California who is 65 years of
age or older. (Id. § 15610.27.) Financial abuse of an elder occurs
when a defendant “[t]akes, secretes, appropriates, or retains real
or personal property of an elder . . . for a wrongful use or with
intent to defraud, or both.” (Id. § 15610.30, subd. (a)(1).) The
jury was instructed with CACI No. 1900 (intentional
misrepresentation), No. 1901 (concealment), No. 1902 (false
promise), and 4111 (constructive fraud), all of which require
intent to deceive and resulting harm. Accordingly, interpreting
the jury’s verdict finding Jerry committed fraud so as to uphold it
(OCM, supra, 157 Cal.App.4th at p. 877), the jury must have
found Fox had the “intent to defraud” Jerry.

intertwined with those of Jerry Ross, both factually and legally.”
Because we conclude the trial court abused its discretion in
ordering a new trial as to Jerry, it likewise abused its discretion
in ordering a new trial for Eric and Zipkin on the same grounds.

                                32
       If we seek to reconcile the jury’s verdict on elder abuse, the
jury must have found Jerry was not an elder at the time the Fox
defendants defrauded him. This finding was not unreasonable
when viewed through the lens of the jury instruction. As
discussed, the trial court instructed the jury with a modified
version of CACI No. 3100 that required the jury to find the Fox
defendants “took Mr. Ross’s investment monies . . . with the
intent to defraud him,” that Ross was “age 65 or older at the time
of [d]efendants’ conduct,” and the “conduct was a substantial
factor in causing his harm.” However, Jerry asserted a single
cause of action for elder abuse that alleged fraud in connection
with the 11 syndications in which Jerry invested (likewise the
Rosses alleged single causes of action for fraud, securities fraud,
and breach of fiduciary duty). The Rosses presented their case as
a single fraudulent scheme continuing from 2004 to 2012 (with
damages accruing through 2018), focusing on the first
syndication (Provinces in 2004) to show Fox’s overt
misrepresentation about the nature of the investment scheme
and Jerry’s reliance. The Rosses relied on subsequent
syndications as examples of how the investor overcharges were
secreted into ACF commissions and consulting fees (e.g., Writer
Square in 2008), and how the Fox defendants tried to conceal the
scheme (e.g., Bell Creek in 2010).
       Jerry testified he relied on Fox’s initial representations in
2004 that Fox had earned his returns through a management fee
and invested in the properties “in the same way the investors do.”
When Jerry first invested in Provinces on behalf of Eric and
Zipkin in 2004 and on his own behalf in Highlands Ranch in
2005, Jerry thought the purchase price on the offering documents
represented the price of the shopping center, and Jerry testified

                                 33
he would not have invested with ACF if he had known otherwise.
But Jerry did not turn 65 until after these two investments—in
2006.
       The jury could reasonably (but erroneously) have concluded
the fraudulent conduct occurred before Jerry turned 65, even
though the fraud continued after Jerry turned 65 because the Fox
defendants continued to take Jerry’s investment money until
2012. Thus, on the peculiar factual scenario in this case, the
jury’s verdict for the Fox defendants on elder abuse was not
factually inconsistent with its verdicts for Jerry on his claims for
fraud, securities fraud, and breach of fiduciary duty.
       Hasson v. Ford Motor Company (1977) 19 Cal.3d 530,
overruled on another ground in Soule v. General Motors Corp.
(1994) 8 Cal.4th 548, relied on by the Rosses, supports this result.
In Hasson, the plaintiff asserted causes of action for strict
products liability and negligence against an automobile
manufacturer, alleging he was injured as a result of a brake
failure caused by vaporization of his vehicle’s brake fluid. The
jury found for the plaintiff on both counts, but it made special
findings that there was no defect in the vehicle at the time the
vehicle was manufactured, and the manufacturer was negligent.
(Hasson, at pp. 539-540.) On appeal, the manufacturer argued
the special finding of no defect was inconsistent with the jury’s
finding the manufacturer was negligent. (Id. at p. 540.) The
Supreme Court held the verdict was not necessarily inconsistent
because “the jury may have concluded that the braking system
and the fluid were, at the outset, sound and fit for their intended
purpose, but that [the manufacturer] was nonetheless liable for
its failure during the ensuing four years to warn of conditions
which might develop in use . . . . [S]uch conclusions would find

                                34
support in the evidence. Additionally, they would have permitted
the jury to find a ‘defect’ under the broadest definition of that
term included in the instructions. On the other hand, such a
view of the evidence is also consistent with the jury’s actual
expression of its findings.” (Id. at p. 543; see Fuller v.
Department of Transportation, supra, 38 Cal.App.5th at p. 1040
[in an injured bus passenger’s action against Caltrans, a special
finding that a dangerous road condition existed was not
inconsistent with a special finding that the condition did not
create a foreseeable risk of harm, because the jury was properly
instructed that the plaintiff’s harm had to relate to the road
condition, and the verdict form did not require the jury to
differentiate between the two different dangerous road conditions
presented at trial].) So too here, although the jury’s findings of
fraud could have supported a verdict of elder abuse given the
undisputed fact of Jerry’s birthdate, the jury could also have
reasonably found there was no separate act of fraud (as opposed
to a continuing course of fraudulent conduct) after Jerry turned
65.
       The cases cited by the Fox defendants in which a general
verdict was held to be fatally inconsistent are distinguishable in
that in each case the jury’s findings on one claim necessitated a
contrary verdict on another claim. For example, in Shaw, supra,
83 Cal.App.4th at pages 1344 to 1345, the Court of Appeal
concluded in an employee’s wrongful termination action that the
jury’s verdict for the employer on the employee’s breach of
contract claim was inconsistent with the jury’s verdict for the
employee on his claim for breach of the implied covenant of good
faith and fair dealing, reasoning that the jury must have
necessarily found the plaintiff was an at-will employee (by

                               35
rejecting the claim for breach of contract), but the finding of bad
faith implied the jury believed the employee could only be
dismissed for cause. (See also Stillwell v. The Salvation Army,
supra, 167 Cal.App.4th at p. 363 [in wrongful termination action,
parties conceded on appeal that a special verdict finding there
was an at-will employment agreement was inconsistent with a
special verdict finding the employer breached an implied
agreement to terminate the employee only for cause]; Morris v.
McCauley’s Quality Transmission Service, supra, 60 Cal.App.3d
at p. 970 [verdict for the defendant on personal injury claim
asserted on behalf of child was inconsistent with verdict
awarding damages to the child’s mother for the child’s medical
expenses, requiring new trial].)

         2.    Jerry is not entitled to JNOV on elder abuse
       Jerry contends he was entitled to JNOV on elder abuse
because “the findings of fraud, damages and malice do in fact
compel a finding for Jerry on the elder abuse claim as a matter of
law” as to investments he made after he turned 65. Jerry’s
argument ignores the standard of review we apply to a motion for
JNOV.
       “‘A motion for judgment notwithstanding the verdict may
be granted only if it appears from the evidence, viewed in the
light most favorable to the party securing the verdict, that there
is no substantial evidence in support.’” (Cabral v. Ralphs Grocery
Co. (2011) 51 Cal.4th 764, 770; accord, Johnson & Johnson
Talcum Powder Cases (2019) 37 Cal.App.5th 292, 313 (Johnson &
Johnson).) “‘On appeal from the denial of a motion for judgment
notwithstanding the verdict, we determine whether there is any
substantial evidence, contradicted or uncontradicted, supporting

                                36
the jury’s verdict. [Citations.] If there is, we must affirm the
denial of the motion.’” (Newland v. County of Los Angeles (2018)
24 Cal.App.5th 676, 684; accord, Cabral, at p. 770.) “‘On appeal,
we review the motion de novo. “[W]e determine whether
substantial evidence supported the verdict, viewing the evidence
in the light most favorable to the party who obtained the
verdict.”’” (Collins v. County of San Diego (2021) 60 Cal.App.5th
1035, 1048.) “‘“‘If the evidence is conflicting or if several
reasonable inferences may be drawn, the motion for judgment
notwithstanding the verdict should be denied.’”’” (Johnson &
Johnson, at p. 313, quoting Hauter v. Zogarts (1975) 14 Cal.3d
104, 110.)
       As discussed, financial elder abuse occurs when a
defendant “[t]akes, secretes, appropriates, or retains real or
personal property of an elder . . . for a wrongful use or with intent
to defraud, or both.” (Welf. & Inst. Code, § 15610.30, subd.
(a)(1).) A “wrongful use” occurs “if, among other things, the
[defendant] takes, secretes, appropriates, obtains, or retains the
property and the [defendant] knew or should have known that
this conduct is likely to be harmful to the elder . . . .” (Id.,
§ 15610.30, subd. (b); accord, Paslay v. State Farm General Ins.
Co. (2016) 248 Cal.App.4th 639, 656.) Here, the Fox defendants
presented evidence at trial that Fox disclosed to Jerry that the
purchase price on the offering documents was not precisely the
same as the price of the shopping centers. For example, the Fox
defendants introduced emails in which Fox told Jerry in May
2005 (when Jerry was 63) that Highlands Ranch was being
“offered virtually at acquisition cost,” and again in July 2007
(when Jerry was 65) that Fox was selling an interest in North

                                 37
Oak Marketplace “at approximately my cost.”21 Jerry testified
these statements did not put him on notice the purchase price in
the offering documents was different from the cost of the
shopping centers, and instead he thought Fox was offering him a
discount. But Jerry admitted he had seen these statements, and
on a motion for JNOV we must accept “any substantial evidence,
contradicted or uncontradicted” that supports the verdict for the
Fox defendants. (Newland v. County of Los Angeles, supra, 24
Cal.App.5th at p. 676.) Drawing all inferences in favor of the
verdict for the Fox defendants on elder abuse, the jury could have
reasonably inferred as to investments made after Jerry turned 65
either that Fox did not deceive Jerry or that Jerry did not
reasonably believe the purchase prices were identical to the price
the LLC’s paid for the shopping centers, and therefore Jerry was
not harmed by the asserted misrepresentations and omissions in
the offering materials. The trial court therefore did not err in
denying Jerry’s motion for JNOV. (Johnson & Johnson, supra,
37 Cal.App.5th at p. 313.)
       We recognize this is an unusual result given our conclusion
that the jury, in delivering a verdict for the Rosses on their fraud
claims and awarding damages for the entire 14-year period
during which Jerry invested with Fox, necessarily found that Fox

21     We note that Fox’s representation that “Highlands Ranch”
was offered “virtually at cost” was false, as Highlands Ranch was
marked up by more than $1 million, but Fox’s representation
(after Jerry was 65) that North Oak was offered “at
approximately my cost” was plausibly true, as it was marked up
by only $156,324, the smallest markup of all 13 investments. But
regardless of whether the statements were true, they are relevant
to Jerry’s reliance on the representations regarding the purchase
price of the shopping centers.

                                38
defrauded Jerry after Jerry turned 65. But our holding that the
verdicts can be reconciled is based on the jury’s potential
confusion arising from the jury instruction on elder abuse. By
contrast, as discussed, we must review the trial court’s denial of
Jerry’s motion for JNOV by considering whether there is
substantial evidence to support the elder abuse verdict. Jerry’s
argument would turn the standard for JNOV on its head by
having us bootstrap our conclusion in reconciling the verdicts in
the context of the Fox defendants’ new trial motion to circumvent
the standard for a JNOV motion that instead looks at whether
there is substantial evidence to support the jury’s verdict for the
Fox defendants. There is.

B.     The Fox Defendants’ Cross-appeal
        1.     The trial court did not err in its rulings concerning
               Albert’s testimony
       The Fox defendants contend the trial court abused its
discretion in allowing nonparty Carl Albert to testify about his
investments and communications with Fox because the Rosses
failed to disclose Albert in discovery and to produce documents
they received from him. The Fox defendants further contend the
court abused its discretion in limiting their cross-examination of
Albert. We find no abuse of discretion as to the first contention
and no prejudicial error as to the second.22

22    The Fox defendants presented their arguments concerning
Albert’s testimony in their combined respondents’ brief (on the
Rosses’ appeal) and opening brief (on the Fox defendants’ cross-
appeal), then again in their reply brief on the cross-appeal.
Because the arguments regarding Albert’s testimony are relevant
to both the appeal and cross-appeal, we deny the Rosses’

                                 39
             a.     Albert’s testimony
      Albert testified that he invested in 10 Fox syndications
beginning in 2002, including an investment of $108,000 in Bell
Creek Commons in 2010. At the beginning of their relationship,
Fox told Albert “that the way [Fox] structured his deals was that
he and his family invested, very heavily, their own cash in every
deal. As [Fox] said, they purchased for, cash, 25, up to 50 percent
or more of every shopping center. And that he allowed friends
and family, investors that he had interviewed to co-invest with
him on the very same terms he co-invested.” Fox also told Albert
“the only compensation or profit or fee [Fox] ever charged was for
his management work, which was four percent of the gross
income, and that he took no other form of profit, charge,
commissions and any other thing than his management fee. And
then [he earned] the profits on the amount of money he . . . and
his family invested . . . in the centers as investors did.” Albert
received the same offering documents for Bell Creek Commons
that Jerry did, including a stated purchase price of $12.5 million.
Albert assumed the price reflected what was paid to acquire the
shopping center, and Fox never indicated otherwise.
      In late 2016 Albert received a letter from Fox informing
him that Fox had been sued and the lawyers for the plaintiffs had
obtained a list of investors and might contact him. Albert later
received a letter from the Rosses’ lawyers, Richard Leonard and
Steven Schuman. Albert asked the Rosses’ lawyers for a copy of

November 9, 2020 motion to strike as an improper surreply the
discussion of Albert’s testimony in the Fox defendants’ reply
brief.

                                40
the complaint and met with them sometime in 2017. The lawyers
showed Albert a copy of the closing statement for the Bell Creek
Commons reflecting that the property had been purchased for
$11.1 million. Albert then contacted Fox and told him the $1.4
discrepancy in the price “needed an explanation; that [the prices]
were inconsistent, and I felt I had been lied to.”
       During cross-examination, Albert acknowledged he
harbored animosity toward Fox and had told Fox he was going to
sue him. However, when the Fox defendants’ attorney asked,
“Are you attempting to get money from my client now in a
settlement?,” the trial court sustained the Rosses’ objection under
Evidence Code section 1152.23 The Fox defendants’ attorney then
asked, “Would you agree . . . that your relationship with my
client, as of today, is adversarial?” Albert answered, “Yes.”
       During cross-examination, the trial court sustained the
Rosses’ relevance objections to several questions about Albert’s
profits from ACF syndications in which the Rosses did not invest.
At sidebar, the Fox defendants’ attorney argued he was “being
prohibited from doing an aggressive[] cross-examination of this
witness,” but the court sustained the objections and instructed
counsel to move to a new line of questioning. The court
explained, “[T]he purpose of examination of witnesses in trial is
for the very concise presentation of evidence, not to do discovery.

23    Evidence Code section 1152, subdivision (a), provides,
“Evidence that a person has, in compromise . . . , furnished or
offered or promised to furnish money . . . to another who has
sustained . . . or claims that he or she has sustained . . . loss or
damage, as well as any conduct or statements made in
negotiation thereof, is inadmissible to prove his or her liability for
the loss or damage or any part of it.”

                                 41
And at this point the cross-examination is starting to veer far
outside of what the scope of what the issues are in this case and
the issues that were testified to on the direct.”

            b.      The Rosses’ failure to disclose Albert in
                    discovery
       On February 13, 2017 Albert met with Fox and presented
him with a 10-page letter questioning him in detail about the
Shreve City Shopping Center syndication and undisclosed
“profits, benefits, fees, charges, commissions, refinancing fees,
management fees, and gains of any and all kinds paid to or
collected by you, or any entity affiliated with or related to you in
any manner.” Albert took notes at the meeting.
       Schuman began representing Albert in March 2017. On
June 14, 2017 Albert sent a copy of his notes from the February
13 meeting with Fox to Schuman. Schuman’s billing records for
the Ross matter reflect a June 14 conversation between Schuman
and Albert.
       On September 14, 2017 Schuman deposed Fox and asked
several questions about Albert, including whether Albert had
complained to Fox, demanded to be bought out, or claimed to
have been defrauded. Fox responded, “Albert earlier this year
asked me if I’d purchased properties at one price and sold them
at another price.”
       On September 20, 2017 the Fox defendants served a
supplemental interrogatory asking Jerry to update his 2015 form
interrogatory responses. Form interrogatory no. 12.1 of the 2015
discovery asked Jerry to identify anyone who witnessed or had
information about the “incident,” defined as “[t]he events and
circumstances of the sale and purchase of real estate, interests in

                                 42
[LLC’s], secret profits, and the alleged resulting damages.” Jerry
responded, “Plaintiffs believe that other investors who invested
with the [d]efendants have relevant knowledge about the
investments” but “[t]he exact information they have is not
currently known to [p]laintiffs.”24 Special interrogatory no. 25 of
the 2015 discovery asked Jerry to identify all persons with
information relevant to the Rosses’ contentions that the offering
materials were materially false. In his supplemental response
served on October 25, 2017, Jerry objected to the question, but
included in his response “all other investors in any of the ACF-
sponsored investments in which any of the [p]laintiffs invested.”
The special interrogatories also asked Jerry to identify all
persons with information that the Fox defendants lied about the
purchase price of the properties. Jerry interposed numerous
objections and responded, “The statute.”
      On September 20, 2017 the Fox defendants served a
supplemental request for the production of documents that
requested Jerry provide additional documents responsive to the
Fox defendants’ earlier request for documents related to
communications between the Rosses and third parties about the
purchase price and “purported wrongful conduct of the
conspiracy.”

24    Schuman stated in a declaration filed in opposition to the
Fox defendants’ new trial motion that he had never heard of
Albert prior to December 2016, when he received a list of ACF
investors in discovery. He also stated he did not believe any
discovery served on the Rosses called for the identification of
Albert because Albert had no firsthand knowledge of what Jerry
did or was told.

                                43
      Jerry did not identify Albert or produce Albert’s meeting
notes in his responses to any of the supplemental interrogatories
or document demands. On January 3, 2018, after the close of
discovery and five months before trial, the Rosses served a
proposed trial witness list on the Fox defendants, identifying
Albert as a witness. On January 19 the Fox defendants filed a
motion in limine to preclude Albert from testifying on the
grounds that Albert had no personal knowledge of the Rosses’
dealings with Fox, his testimony would be unduly prejudicial and
constitute improper character evidence, the Rosses had not
disclosed him in discovery, and he had not been deposed. The
motion did not identify or provide the discovery demands that
called for Albert’s disclosure. Nor did the Fox defendants request
to depose Albert.
      At a May 29, 2018 hearing, the trial court denied the Fox
defendants’ motion in limine as to Albert without prejudice,
explaining, “[The Fox defendants] have the burden of showing
you asked for this information in discovery and didn’t get it—on
the motion it wasn’t done. [¶] If you can show me that the
witness was hidden from you and that there was a willful
nondisclosure[, that] is what the code is going to require for me to
exclude a witness.” The Fox defendants renewed their motion on
June 12, 2018, just prior to Albert’s testimony, and the court
again denied the motion on the ground the Fox defendants had
not presented the discovery calling for Albert’s identification or
the Rosses’ objections and responses. The court stated, “[Y]ou
have the burden of showing me that you asked for it; and I’ve
given you what, one, two, three, four, five days to get that
information, and you don’t have it.”

                                44
      As described in the Fox defendants’ motion for a new trial,
Albert filed his own lawsuit against the Fox defendants after the
conclusion of the Rosses’ trial, and Albert was deposed in that
action on October 19, 2018. Albert testified that he retained
Schuman’s law firm in March 2017. He also produced documents
that the Fox defendants argued in their motion for a new trial
revealed “[p]laintiffs’ undisclosed relationship with Albert.”
Among them, handwritten notes dated February 7 and February
22, 2017 show Albert had a telephone call with Eric’s stepfather,
who gave Jerry’s home telephone number to Albert; a June 14,
2017 email forwarding Albert’s notes of his February 13, 2017
meeting with Fox (but not indicating to whom); and a blind copy
to Schuman and Leonard of a March 22, 2018 email Albert sent
to Fox regarding a draft settlement agreement.

            c.      The Rosses’ failure to disclose Albert does not
                    constitute grounds for reversal or a new trial
       The Fox defendants argued in their motion for a new trial
that in failing to disclose Albert in discovery, the Rosses deprived
them of the opportunity to learn Albert was closely aligned with
the Rosses, he had coordinated his testimony with the Rosses to
advance his own claims against Fox, and the Rosses’ attorneys
had obtained information before trial relating to Albert’s
meetings with Fox. Because the trial court ordered a new trial on
a different ground, we review these alternative grounds for a new
trial independently. (See Thompson v. Friendly Hills Regional
Medical Center (1999) 71 Cal.App.4th 544, 550 [“We
independently review all the grounds advanced for the new trial
motion and will sustain the order ‘if it should have been granted

                                45
upon any ground stated in the motion, whether or not specified in
the order or specification of reasons . . . .’”].)
       The Fox defendants argued in their motion for a new trial
under section 657, subdivision 1, that the trial court erred in
denying their motion in limine to exclude Albert’s testimony and
in allowing Albert to testify without disclosing relevant
documents, which rendered the trial unfair. Section 657,
subdivision 1, authorizes a new trial to be ordered where there
was “irregularity in the proceedings of the court, jury or adverse
party, or any order of the court or abuse of discretion by which
either party was prevented from having a fair trial.” “An
‘irregularity in the proceedings’ is a catchall phrase referring to
any act that (1) violates the right of a party to a fair trial and (2)
which a party ‘cannot fully present by exceptions taken during
the progress of the trial, and which must therefore appear by
affidavits.’” (Montoya v. Barragan (2013) 220 Cal.App.4th 1215,
1229-1230, citing Gay v. Torrence (1904) 145 Cal. 144.) We
generally review a ruling on a motion in limine regarding witness
testimony for an abuse of discretion. (Osborne v. Todd Farm
Service (2016) 247 Cal.App.4th 43, 50-51; Appel v. Superior Court
(2013) 214 Cal.App.4th 329, 336.) There was no abuse of
discretion.
       “Precluding a witness from testifying at trial is proper
where a party willfully and falsely withholds or conceals a
witness’s name in response to an interrogatory. [Citation.]
‘Where the party served with an interrogatory asking the names
of witnesses to an occurrence then known to him deprives his
adversary of that information by a willfully false response, he
subjects the adversary to unfair surprise at trial.’” (Saxena v.
Goffney (2008) 159 Cal.App.4th 316, 332. (Saxena))

                                 46
       But it does not follow “that evidence may be excluded on
the ground an interrogatory answer is evasive or incomplete.
The Civil Discovery Act (§ 2016.010 et seq.) provides specific
remedies for evasive or incomplete discovery responses.”
(Saxena, supra, 159 Cal.App.4th at pp. 332-333.) Where a party
fails to answer or provides an evasive answer, the propounding
party must first file a motion for an order compelling a response
or further response before moving for evidentiary sanctions. (Id.
at p. 334; see § 2030.300, subd. (e) [evidence and issue sanctions
only available for failure to obey an order compelling further
responses].) “The party moving to exclude evidence as a sanction
for discovery abuse has the initial burden of establishing grounds
supporting the request.” (Saxena, at p. 334.)
       The trial court twice advised the Fox defendants’ attorneys
they needed to identify the specific discovery requests
propounded and the responses made by the Rosses so the court
could determine if “the witness was hidden from [them] and that
there was a willful nondisclosure.” The Fox defendants did not
meet their burden to demonstrate there was a willful disclosure
that supported exclusion of Albert’s testimony absent the filing of
a motion to compel further responses.
       However, the Fox defendants also moved for a new trial
under section 657, subdivision 4, which provides for the granting
of a new trial based on “[n]ewly discovered evidence, material for
the party making the application, which [the party] could not,
with reasonable diligence, have discovered and produced at the
trial.” (See Sherman v. Kinetic Concepts, Inc. (1998) 67
Cal.App.4th 1152, 1161-1162 & fn. 5 [personal injury plaintiffs
entitled to a new trial in product defect action where
manufacturer concealed reports of similar incidents because it

                                47
deprived the plaintiffs of a chance to “tell the jury the whole
story”].) “‘Material’ in this context means ‘“likely to produce a
different result.”’” (Id. at p. 1161; accord, In re Marriage of
Smyklo (1986) 180 Cal.App.3d 1095, 1101.)
       The Fox defendants in their motion for a new trial relied on
emails and deposition testimony they obtained from Albert’s
subsequent lawsuit—which were not available to the Fox
defendants at the time of trial— that demonstrate Jerry (through
his attorneys) was well aware of Albert’s relevant knowledge
when Jerry responded to the Fox defendants’ discovery. And
unlike their motion in limine, the Fox defendants provided the
court with the interrogatories and document demands that
reasonably called for the identification of Albert, as well as
Jerry’s responses that showed Jerry was not forthright when he
responded that he “believe[d] that other investors who invested
with [d]efendants have relevant knowledge” but “[t]he exact
information they have is not currently known to [p]laintiffs.” The
record shows the contrary.
       However, the Fox defendants have not demonstrated the
evidence discovered after the trial was material. To the contrary,
the evidence produced by Albert is consistent with his trial
testimony. Albert testified he bore animosity toward Fox, was in
an “adversarial” position, and had threatened to sue him. Albert
testified he saw the same offering documents that Jerry had seen,
and Fox had lied to him about the amount that was paid to
purchase the Bell Creek Commons. Further, between 2002 and
2017 Fox never disclosed that ACF took fees or commissions
beyond the 4 percent management fee. Albert also testified he
believed Fox lied to him about the acquisition of the Shreve City
Shopping Center in which Albert was currently investing. The

                                48
later-discovered evidence did not shed any light on Albert’s
hostility toward Fox. For example, the Fox defendants
emphasize that they learned the Rosses received a copy of
Albert’s demand letter and notes of his February 2017 meeting
with Fox, but Fox was (obviously) present at the meeting and had
received the demand letter.
       The Fox defendants argue on appeal that had the Rosses
identified Albert in discovery, “[d]efendants would have deposed
him and would have learned that he was not a third party, but
rather, was a “was a co-client with Plaintiffs.” But Albert was
not a “co-client” (or coplaintiff)—he was a third party who was
pressing similar claims. And the Fox defendants’ lawyers could
have anticipated after Fox’s February 2017 meeting with Albert
that the Rosses’ lawyers might represent Albert. As discussed,
Fox sent a letter to Albert in late 2016 advising him that his
name had been provided to the lawyers for the Rosses, and the
lawyers might contact him. Further, once Albert was disclosed as
a witness, the Fox defendants could have requested leave to take
his deposition during the remaining five months before trial, but
they failed to do so.

            d.    The trial court did not commit prejudicial error
                  in limiting the Fox defendants’ cross-
                  examination of Albert
       The Fox defendants also contend the trial court abused its
discretion by sustaining the Rosses’ attorney’s objection under
Evidence Code section 1152, subdivision (a), as to questioning
about whether Albert was attempting to obtain money from Fox
in a settlement. We agree this was an abuse of discretion. (See
Diamond v. Reshko (2015) 239 Cal.App.4th 828, 841 [trial court

                                49
ruling on motion to exclude under Evidence Code section 1152 is
reviewed for abuse of discretion]; Caira v. Offner (2005) 126
Cal.App.4th 12, 32 [same].) Evidence Code section 1152,
subdivision (a), provides that an offer of compromise is
inadmissible to prove the liability of the offeror for the loss or
damage, but it is not a basis to exclude a settlement demand as
evidence of the demanding party’s motives. (See HMS Capital,
Inc. v. Lawyers Title Company (2004) 118 Cal.App.4th 204, 219
[settlement demand admissible to show malice in threatening
prosecution]; Shade Foods, Inc. v. Innovative Products Sales &
Marketing, Inc. (2000) 78 Cal.App.4th 847, 915 [unreasonably low
settlement offer admissible to show insurer’s bad faith].)
       Although the trial court abused its discretion in sustaining
the Rosses’ objection, it was not “reasonably probable that a
result more favorable to the appealing party would have been
reached in the absence of the error.” (See Cassim v. Allstate Ins.
Co. (2004) 33 Cal.4th 780, 800 [harmless error standard under
People v. Watson (1956) 46 Cal.2d 818, 836 applies to civil cases].)
After the court sustained the Rosses’ objection, the court allowed
the Fox defendants to examine Albert further about his hostility
toward Fox, continuing into a second day of cross-examination.
Albert testified he felt animosity toward Fox, he had threatened
to sue him, and their relationship was adversarial. The only time
the court admonished the Fox defendants’ attorney to be concise
and to “move to a new line of questioning” occurred when the
attorney repeatedly asked Albert about the profits Albert made
on investments with ACF in which the Rosses had not invested.
The Fox defendants have therefore not demonstrated any

                                50
material limitation on their cross-examination into Albert’s
biases, let alone grounds for reversal.25

       2.    The trial court did not abuse its discretion in
             denying the Fox defendants’ oral motion to exclude
             Habibi from testifying
      The Fox defendants contend the trial court erred in
denying their oral motion to preclude Habibi from testifying
because he refused to produce the offering documents he issued
as a syndicator but then relied on the documents in his
testimony. The Fox defendants did not meet their burden to
show their entitlement to evidentiary sanctions.

              a.    Relevant proceedings
       In October 2017 the Rosses designated Habibi as an expert
to testify “as to the standards in the syndication business,
including: how disclosure should be made, . . . how investment
and other funds are maintained and accounted for. Mr. Habibi

25      The cases cited by the Fox defendants involve extreme
restrictions on cross-examination that are not present here. (See
People v. Pantages (1931) 212 Cal. 237, 256 [order preventing
defense counsel from asking prosecution witness any questions
about whether there were charges pending against him was
improper, and along with several other trial errors, constituted
grounds for reversing the denial of defendant’s motion for a new
trial]; Ogden Entertainment Services v. Workers’ Comp. Appeals
Bd. (2014) 233 Cal.App.4th 970, 984 [where employer’s cross-
examination of the claimant was not “merely curtailed,” but
rather “did not take place at all, except for a few minutes,” there
was a denial of due process compelling annulment of appeal
board decision].)

                                 51
will also testify concerning the accuracy and sufficiency of the
disclosures made by [d]efendants, including but not limited to the
representations made in the [e]xecutive [s]ummaries and
[f]inancial [p]rojections for each of the relevant investments.”
The Fox defendants promptly served a notice of deposition with
dozens of document demands, including a request for “[a]ll
documents which Mr. Habibi has relied upon in forming his
opinions or conclusions in this case.” The Rosses timely served
objections, asserting the request was overbroad and unduly
burdensome.
       The Fox defendants deposed Habibi in February 2017.
Habibi was asked if his opinions were based in part “on [his]
experience in [his] specific deals [as a syndicator] in Kansas City
and Los Angeles.” Habibi answered, “part of my opinion, yes.”
The Fox defendants’ attorney then asked Habibi to provide his
“offering documents for those Kansas City and L.A. deals.”
Habibi refused on the advice of counsel.
       On April 3, 2018 the Fox defendants filed a motion seeking
monetary, evidentiary, and issue sanctions against the Rosses.
As part of the motion, the Fox defendants sought to exclude
Habibi “from testifying at trial, or in the alternative ordering him
to produce all documents he relied upon in arriving at his
opinions[.]” The Fox defendants requested this sanction
pursuant to section 2034.300, subdivision (c), which provides the
trial court may exclude the opinion of an expert where the
offering party unreasonably fails to “[p]roduce reports and

                                52
writings of expert witnesses under [s]ection 2034.270.”26 The
court denied the sanctions motion.
        On June 13, 2018, the day Habibi was scheduled to testify,
the Fox defendants brought an oral motion to preclude Habibi
from testifying on the grounds Habibi would testify to damages
outside the scope of his expert designation, and he failed to
produce the offering documents for his syndications. In response
to the trial court’s inquiry as to the documents, the Fox
defendants’ attorney conceded he had not filed a motion to compel
further production. He argued he was instead proceeding under
section 2034.300, subdivision (c), based on the Rosses’ failure to
produce writings of an expert witness required under section
2034.270. The court denied the motion, finding the Fox
defendants failed to produce the deposition notice or the Rosses’
objections; there was no appearance of gamesmanship by the
Rosses’ attorneys; and the Fox defendants’ attorney made a
“strategic litigation choice to proceed in this manner” (without
first filing a motion to compel further responses) and had “the
opportunity to raise these objections earlier . . . to give plaintiff
any opportunity to correct any defects.” The court concluded, “I

26      Section 2034.270 provides, “If a demand for an exchange of
information concerning expert trial witnesses includes a demand
for production of reports and writings as described in subdivision
(c) of [s]ection 2034.210, all parties shall produce and exchange,
at the place and on the date specified in the demand, all
discoverable reports and writings, if any, made by any designated
expert . . . .” Section 2034.210, subdivision (c), provides, in turn,
that “[a]ny party may also include a demand for the mutual and
simultaneous production for inspection and copying of all
discoverable reports and writings, if any, made by any expert . . .
in the course of preparing that expert’s opinion.”

                                 53
cannot make a determination that there was non-compliance
with the Code. But to the extent that there was any non-
compliance, I do not find that it was unreasonable.”

            b.      The trial court did not abuse its discretion in
                    denying the motion to exclude Habibi’s
                    testimony
       The trial court did not abuse its discretion in denying the
motion to exclude Habibi’s testimony. Contrary to the Fox
defendants’ argument, the offering documents did not fall within
section 2034.210, subdivision (c) (providing for a party to demand
an exchange of reports or writings “made by any expert . . . in the
course of preparing that expert’s opinion”), and thus the
documents were not subject to disclosure under section 2034.270,
and Habibi’s testimony was not properly excluded under section
2034.300, subdivision (c) (providing for exclusion of an expert’s
opinion for failure to comply with section 2034.270).
       Rather, the Fox defendants’ request for the offering
documents was governed by the deposition procedures set forth in
section 2025.010 et seq. (See § 2034.410 [“The procedures for
taking oral and written depositions . . . apply to a deposition of a
listed trial expert witness . . . .”].) The Fox defendants admit they
never sought to compel further responses, a prerequisite to an
evidentiary sanction for noncompliance absent a willful
falsehood. (See § 2031.310, subd. (i) [evidence and issue
sanctions only available for failure to obey an order compelling
further production]; Saxena, supra, 159 Cal.App.4th at pp. 332-

                                 54
333.)27 And they did not make their motion under section
2025.010, instead stating at the hearing they were moving under
section 2034.300, subdivision (c).

       3.      The trial court did not abuse its discretion in
               allowing Habibi to provide an opinion on the Rosses’
               consequential damages
       The Fox defendants contend the trial court abused its
discretion when it allowed Habibi “to opine on the legal measure
of rescission damages.” They argue Habibi’s opinions were
legally incorrect and led the jury to award expectation damages,
which are not available for rescission. The trial court did not
abuse its discretion in allowing Habibi to testify about the
measure of consequential damages for rescission, and although
part of Habibi’s testimony was inaccurate, any error in allowing
the testimony was harmless.

             a.    Rescission and damages
       Civil Code section 1692 provides in relevant part, “A claim
for damages is not inconsistent with a claim for relief based upon
rescission. The aggrieved party shall be awarded complete relief,
including restitution of benefits, if any, conferred by him as a
result of the transaction and any consequential damages to which
he is entitled; but such relief shall not include duplicate or

27    It is also far from clear the Fox defendants had a right to
demand Habibi turn over the offering documents from Habibi’s
own syndications. Habibi did not testify at his deposition he
intended to rely on the offering documents in presenting his
expert opinions, but rather, that his opinions were based in part
“upon [his] experience in [his] specific deals” as a syndicator.

                                55
inconsistent items of recovery.” “Rescission extinguishes the
contract (Civ. Code, § 1688), terminates further liability, and
restores the parties to their former positions by requiring them to
return whatever consideration they have received. [Citation.]
Thus, the ‘[r]elief given in rescission cases—restitution and in
some cases consequential damages—puts the rescinding party in
the status quo ante, returning him to his economic position before
he entered the contract.’” (Sharabianlou v. Karp (2010) 181
Cal.App.4th 1133, 1145 (Sharabianlou), quoting Runyan v.
Pacific Air Industries, Inc. (1970) 2 Cal.3d 304, 316, fn. 15
(Runyan); accord, Wong v. Stoler (2015) 237 Cal.App.4th 1375,
1386.)
       “The fundamental principle underlying these decisions
[awarding consequential damages for rescission] and the awards
which they upheld is that ‘in such actions the court should do
complete equity between the parties’ and to that end ‘may grant
any monetary relief necessary’ to do so.” (Runyan, supra, 2
Cal.3d at p. 316; accord, Wong v. Stoler, supra, 237 Cal.App.4th
at p. 1386; Sharabianlou, supra, 181 Cal.App.4th at p. 1144.)
However, because “rescission is a remedy that disaffirms the
contract,” a party seeking damages under section 1692 is not
entitled to recover damages “‘for the loss of [their] “expectational
interest”—the benefit of [the] bargain which full performance
would have brought.’” (Sharabianlou, at p. 1145 [trial court
erred in awarding the difference between the rescinded contract
sale price and the amount received on a later sale of the subject
property because this gave the plaintiff the benefit of the
bargain].)
       In Runyan, supra, 2 Cal.3d at pages 318 to 319, the
Supreme Court found that where a franchise services contract

                                56
had been rescinded, the plaintiff who had acquired the franchise
was entitled to recover for “his loss of income for the period from
the execution of the . . . contract to the giving of the notice of
rescission, this loss being measured by the salary he would have
received had he remained at [his previous job]. We cannot find
this award unreasonable or inequitable particularly since, as the
[trial] court expressly found, plaintiff relied upon the contract in
severing his relationship with [the previous employer].”

            b.     The trial court did not abuse its discretion in
                   allowing Habibi to testify about damages for
                   rescission; although a portion of Habibi’s
                   testimony was erroneous, any error in admitting
                   it was harmless
       Habibi testified on direct examination that he understood
the Rosses to be seeking rescission of their investments. When
asked “what does that mean to you?” (without an objection by the
Fox defendants), Habibi testified, “Rescission is a legal term. I’ll
give you my understanding of it. And that is, it’s effectively
undoing the investment and making it such as if the Rosses had
never made those investments to begin with and instead had put
those monies elsewhere or in some alternate scenario, if you will.
[¶] So the rescission would consist of the Rosses giving back their
interests in the ACF holdings . . . . And then getting back their
capital, plus a reasonable return thereon over the course of the . .
. 14 years in which their money has been tied up in those deals.”
Habibi was later asked, again without objection, “When the
Rosses give back the shopping center interest that they’re
currently holding, do they get paid any money for those?” Habibi
answered, “No. They’re just giving them back because that’s

                                 57
effectively what rescission is. Rescission is a putting the Rosses
back in a situation whereby they effectively hadn’t bought into
those shopping centers and the monies were invested in some
alternative investment vehicle.”
       By failing to object to the questions asking Habibi to
explain his understanding of rescission, the Fox defendants
forfeited any objection. (People v. Abel (2012) 53 Cal.4th 891, 924
[“A defendant who fails to make a timely objection or motion to
strike evidence may not later claim that the admission of the
evidence was error”]; People v. Jennings (2010) 50 Cal.4th 616,
654 [failure to make hearsay objection to statement at trial
forfeited claim on appeal].) Even if the Fox defendants had not
forfeited their objection, the trial court did not abuse its
discretion. An expert “‘is not allowed “to testify to legal
conclusions in the guise of expert opinion,”’” and “‘“[t]he manner
in which the law should apply to particular facts is a legal
question and is not subject to expert opinion.”’”’ (N.G. v. County
of San Diego (2020) 59 Cal.App.5th 63, 77.) However, it was
appropriate for Habibi to provide his understanding of rescission
as context for his opinions, and he provided a general description
of rescission in his response, not a legal opinion as to whether the
Rosses were entitled to rescission.
       Further, Habibi’s description of the damages available to
Jerry based on rescission was accurate. The Fox defendants in
their opening brief argue that Habibi testified the Rosses were
entitled to their investment capital and “to get the ‘reasonable
return’ on the capital they had expected to get from Mr. Fox.”
This mischaracterizes Habibi’s testimony. Habibi testified the
Rosses were entitled to “get[] back their capital, plus a reasonable
return” during the time their money was tied up in the Fox

                                58
investments, as if the funds “were invested in some alternative
investment vehicle.” A consequential damages award that would
give the Rosses a reasonable rate of return for the time during
the 14-year period in which their money was tied up in the
investments is a proper measure of damages to restore them to
the status quo ante.28 (Runyan, supra, 2 Cal.3d at p. 316, fn. 15;
Sharabianlou, supra, 181 Cal.App.4th at p. 1144.)
      Habibi’s lowest measure of consequential damages based on
the NAREIT index of returns from real estate investment trusts
holding apartment buildings ($4.4 million) was proper. There
was substantial evidence that at the time Jerry approached Fox
in 2004, Jerry was an accredited investor who held investments
in three apartment buildings, and Jerry intended to continue to
invest in real estate in a manner that would achieve
diversification and a “reasonable return on rents over the years
and appreciation” without his being directly responsible for
property management. In light of the evidence of the Rosses’
investment goals at the time Jerry met Fox, the NAREIT
apartment index was a reasonable measure of the return the
Rosses would have received had they not invested with the Fox
defendants.
      However, two of the three damages estimates Habibi
provided were based on incorrect measures of damages. One

28    The Fox defendants contend the proper measure of
damages for rescission was prejudgment interest on the Rosses’
investment instead of compensatory damages. But as in Runyan,
supra, 2 Cal.3d at page 318, the Rosses were entitled to recover
consequential damages from the time they made their
investments, not from when they were in a position to make a
demand that would support prejudgment interest.

                               59
calculation was based on a 22 percent projected rate of return
that Fox advertised in a 2003 shareholder letter ($22.1 million).
A damages award based on this projection would give the Rosses
a return that is untethered to any evidence of what they might
have actually received had they not invested with the Fox
defendants. Habibi’s estimate based on the average of returns
projected by ACF on syndications in which the Foxes actually
invested ($9.9 million) suffers from the same defect. Although
this average more closely approximates what the Rosses might
have achieved by investing in similar shopping mall syndications,
Habibi’s estimate was not based on data showing what ACF or
any syndicator actually achieved, but from ACF’s projections in
connection with transactions with the Rosses.
       Because the jury ultimately awarded the Rosses $4.3
million in damages, just short of Habibi’s calculation based on the
NAREIT index, in the absence of any other expert testimony on
damages, it is not reasonable to assume the jury relied on either
of the two other damages calculations (for $22.1 and $9.9
million). Thus, any error in allowing Habibi to provide the two
additional calculations was harmless. (Cassim v. Allstate Ins.
Co., supra, 33 Cal.4th at p. 801.)

        4.    Any instructional error is harmless
      The Fox defendants contend the trial court erroneously
instructed the jury on constructive fraud, the scope of a
syndicator’s fiduciary duty, and the voiding of contracts as
against public policy, and the court failed to instruct the jury on
consequential damages. Even if the instruction on constructive
fraud was erroneous, any error was harmless. The Fox
defendants’ other contentions lack merit or were forfeited.

                                 60
            a.     Standard of review
      “A party is entitled upon request to correct,
nonargumentative [jury] instructions on every theory of the case
advanced by [the party] which is supported by substantial
evidence.” (Soule v. General Motors Corp., supra, 8 Cal.4th at p.
572; accord, Olive v. General Nutrition Centers, Inc. (2018) 30
Cal.App.5th 804, 813.) We review the record de novo to
determine whether substantial evidence supported giving a
refused jury instruction. (Evans v. Hood Corp. (2016)
5 Cal.App.5th 1022, 1045; Davis v. Honeywell Internat. Inc.
(2016) 245 Cal.App.4th 477, 495.) We also review de novo
“‘whether instructions correctly state the law [citation] and also
whether instructions effectively direct a finding adverse to a
defendant by removing an issue from the jury’s consideration.’”
(Strouse v. Webcor Construction, L.P. (2019) 34 Cal.App.5th 703,
713, quoting People v. Posey (2004) 32 Cal.4th 193, 218.)

             b.    Constructive fraud
      The trial court instructed the jury on constructive fraud
with a modified version of CACI No. 4111. The instruction stated
the Rosses must prove six elements, including “[t]hat Alan Fox
knew that the prices of the shopping centers were not as stated
on the [offering documents]; and that, in fact, he was purchasing
the shopping centers at lower prices.”29 The Fox defendants
contend this instruction “directed the jury to adopt [the Rosses’]

29    The form CACI No. 4111 states as to this element, “That
[name of defendant] knew, or should have known, that [specify
the information at issue][.]”

                                61
view that the ‘prices of the shopping centers’—rather than the
prices of the LLC’s that Plaintiffs were investing in—were what
was ostensibly ‘stated on the [offering documents].’” The Fox
defendants argue that one of their key trial theories was that
they did not intend the phrase “Purchase Price” in the offering
documents to refer to the acquisition cost of the underlying
properties, but rather, the purchase price of the LLC’s, and the
instruction therefore had the effect of directing the jury to find in
favor of the Rosses on the constructive fraud claim because it was
undisputed the purchase prices for the shopping centers stated on
the offering documents were greater than the prices at which
they were acquired.
       The Rosses argue Fox’s testimony that the purchase price
on the offering documents was the price to buy an interest in the
LLC (not the purchase price of the shopping center) was
inconsistent with both Fox’s testimony on cross-examination and
the offering documents. Fox admitted as to Writer Square that
the purchase price as used in the offering documents was “the
price at which the LLC . . . paid to acquire 100 percent of the
Writer Square property at the time of the executive summary”
and reflected the value at which ACF “transferred the property to
the LLCs.” He also acknowledged that all of the terms used on
the executive summary and financial projections (including the
location, property description, and projected return) refer to the
shopping center, not the LLC. The Fox defendants have not
identified any evidence as to Writer Square or the other shopping
centers that supports their position the purchase price in the
offering documents represented the price of the LLC’s, other than
Fox’s conclusory testimony that this was the case, offering an
analogy to a coffee shop selling coffee.

                                 62
       Moreover, even if the trial court erred in not using Fox’s
version of the constructive fraud instruction based on his
testimony that the purchase price reflected the price of the LLC’s,
the instruction as given did not direct a finding in favor of the
Rosses. (See Strouse v. Webcor Construction, L.P., supra, 34
Cal.App.5th at p. 713.) Under the instruction, the Rosses needed
to prove for each syndication that Fox knew the purchase price
stated on the offering documents was different from the
acquisition price of the property. But even if Fox knew the
purchase price was different, the Rosses had to prove the fourth
element of constructive fraud, “[t]hat Alan Fox misled [the
Rosses] by failing to disclose this information.” Had the jurors
believed the Fox defendants’ theory that the offering documents
reflected the purchase price of the LLC’s, not the properties, then
they would not have returned a verdict for the Rosses because
they would have found Fox did not mislead the Rosses by failing
to disclose the purchase price of the properties. Therefore, any
error in phrasing the constructive fraud instruction was
harmless.

             c.    Scope of fiduciary duty
       The trial court instructed the jury on a syndicator’s
fiduciary duty with a modified version of CACI No. 4100 as
follows: “A syndicator or promoter of investments owes what is
known as a fiduciary duty to his or its investors . . . . [¶] . . . A
fiduciary duty imposes on a syndicator a duty to act with the
utmost good faith and in the best interest of . . . his or its
investors.” The Fox defendants contend the court erred in failing
to instruct the jury further on the scope of a syndicator’s fiduciary

                                 63
duty pursuant to Austin v. Hallmark Oil Co. (1943) 21 Cal.2d
718, 728 (Austin).
       The Fox defendants argue that under Austin, supra, 21
Cal.2d at page 728, the Fox defendants—as the promotors of the
syndications—had a fiduciary duty to make disclosures about the
costs involved in the LLC’s purchase of the shopping centers only
to individuals who were existing investors in the LLC’s. (See id.,
at p. 728 [“Whether Austin obtained a secret profit, however,
turns upon whether he had a fiduciary duty to defendants at the
time he acquired the alleged secret interest.”].) Thus, the Fox
defendants contend, they had no fiduciary duty to make
disclosures to the Rosses because the Rosses did not invest in the
LLC’s until after the LLC’s had purchased the properties. We do
not reach whether modification of the fiduciary duty instruction
would have been appropriate to focus on the timing of the Rosses’
investment because the Fox defendants did not request
modification of the instruction, thereby forfeiting the issue on
appeal.
        As the Fox defendants point out in their reply brief, a
party does not forfeit an objection to a prejudicial jury instruction
that incorrectly states the law. (Huffman v. Interstate Brands
Corp. (2004) 121 Cal.App.4th 679, 705-706 [“‘[W]hen a trial court
gives a jury instruction which is prejudicially erroneous as given,
i.e., which is an incorrect statement of law, the party harmed by
that instruction need not have objected to the instruction or
proposed a correct instruction of his own in order to preserve the
right to complain of the erroneous instruction on appeal.’”]; see §
647 [“All of the following are deemed excepted to: . . . giving an
instruction, refusing to give an instruction, or modifying an
instruction requested”].) However, “‘[w]here, as here, “the court

                                 64
gives an instruction correct in law, but the party complains that
it is too general, lacks clarity, or is incomplete, he must request
the additional or qualifying instruction in order to have the error
reviewed.”’” (Metcalf v. County of San Joaquin (2008) 42 Cal.4th
1121, 1131(Metcalf); accord, Agarwal v. Johnson (1979) 25 Cal.3d
932, 948, disapproved on another ground by White v. Ultramar,
Inc. (1999) 21 Cal.4th 563, 575, fn. 4.)
        The Fox defendants present no authority that CACI No.
4100 as given (which tracks the form instruction and applies it to
a syndicator) provided an incorrect statement of the law. The
Supreme Court’s holding in Austin, supra, 21 Cal.2d at page 727,
does not support the Fox defendants’ contention. As the Austin
court concluded, “Austin was a promoter of the Hallmark Oil
Company, and as such had a fiduciary duty to disclose to
defendants his interest in his transactions with or on behalf of
the corporation.” (Ibid.) The trial court’s instruction using CACI
No. 4100 provided, consistent with Austin, that a syndicator owes
a fiduciary duty to his or its investors and has “a duty to act with
the utmost good faith in the best interest of . . . his or its
investors.”
        The Fox defendants did not request the trial court to
modify the jury instruction to address the timing of investments
made by investors in a syndication. Instead, the Fox defendants
proposed a version of CACI No. 4100 that defined a fiduciary as
“certain professionals such as agents, stockbrokers, attorneys,
and corporate officers or partners” and stated “[a] fiduciary duty
imposes on these professionals a duty to act with the utmost good
faith in the best interests of his/her/its principal, client,

                                65
corporation, or partner.”30 And at the hearing on the jury
instructions, the Fox defendants primarily argued that
syndicators do not owe fiduciary duties in several states in which
the LLC’s operated. To the extent the Fox defendants believed
they were entitled to a further pinpoint instruction on the scope
and timing of the syndicator’s fiduciary duty, they forfeited any
objection by not proposing a further modification of the
instruction. (See Metcalf, supra, 42 Cal.4th at p. 1131; Agarwal
v. Johnson, supra, 25 Cal.3d at p. 948.)

             d.     Contracts against public policy
       The trial court instructed the jury with the text of Civil
Code section 1668 as follows: “All contracts which have for their
object directly or indirectly to exempt anyone from responsibility
for his own fraud or willful injury to the person or property of
another or violation of law, whether willful or negligent, are
against the policy of the law.” The Fox defendants objected to
this instruction on the ground it would allow the Rosses to argue
that the integration clauses in the LLC purchase agreements—in

30     The Fox defendants assert they objected to the fiduciary
duty jury instruction in their brief in opposition to the Rosses’
proposed instruction, but the opposition brief is not included in
the record on appeal. We therefore cannot tell what issues, if
any, the Fox defendants raised as to the instruction. (See Mack
v. All Counties Trustee Services, Inc. (2018) 26 Cal.App.5th 935,
940 [“‘“[f]ailure to provide an adequate record on an issue
requires that the issue be resolved against appellant”’”]; Nellie
Gail Ranch Owners Assn. v. McMullin (2016) 4 Cal.App.5th 982,
996 [“‘“appellant bears the burden of providing an adequate
record affirmatively proving error”’”].)

                                66
which the Rosses represented they had not relied on any
statements made by the Fox defendants outside of the
agreements in purchasing their interests—were unenforceable.
The trial court impliedly overruled the objection (by giving the
instruction), and the Rosses’ lawyer argued during his closing
argument that “these representations in the context of a fraud
case are meaningless.” The trial court did not err in instructing
the jury with Civil Code section 1668.
       “It is well established in California that a party to a
contract is precluded under section 1668 from contracting away
his or her liability for fraud or deceit based on intentional
misrepresentation.” (Manderville v. PCG&S Group, Inc. (2007)
146 Cal.App.4th 1486, 1500 [trial court erred in finding buyers
could not rely on brokers’ representations due to exculpatory
clause in contract that provided that all understandings between
the parties were incorporated into the agreement, because the
clauses were unenforceable under section 1668]; accord,
Blankenheim v. E. F. Hutton & Co. (1990) 217 Cal.App.3d 1463,
1471 [holding as to waivers in private placement memoranda and
other documents relating to investments by plaintiff that under
section 1668, “a party may not contract away liability for
fraudulent or intentional acts”].)
       As the Fox defendants point out, the jury may consider a
liability waiver in certain circumstances, including with respect
to an “as is” provision in a purchase agreement that may be
considered in determining a contracting party’s justifiable
reliance on representations made by a seller. (See Hinesley v.
Oakshade Town Center (2005) 135 Cal.App.4th 289, 301 [“[T]he
rule that this kind of contract provision does not, as a matter of
law, preclude a finding of fraud does not mean the contract

                               67
provision is in every case irrelevant.”]; Driver v. Melone (1970) 11
Cal.App.3d 746, 752 [“While the ‘as is’ provision does not relieve a
seller of all responsibility of disclosure, it is a factor to be
considered with all other circumstances in determining whether
the buyer has been misled.”].)
       But contrary to the Fox defendants’ contention, the Court
of Appeal in Hinesley did not conclude that a waiver of liability
for fraud is enforceable. As the court explained, “[Defendant]
could not contractually insulate itself from its own fraud by this
language, but such express language should have conveyed the
implication [citation] that the lease did not come with a
guarantee that any particular businesses would be or stay
cotenants with Hinesley. The clause should have put Hinesley on
notice to ask further questions. The clause is certainly a factor
[citation] to consider in determining whether Hinesley justifiably
relied on [defendant’s representative’s] representations regarding
the particular tenants locating close to the suite Hinesley was
considering leasing.” (Hinesley v. Oakshade Town Center, supra,
135 Cal.App.4th at p. 302.)
       Substantial evidence supported the trial court instructing
the jury with Civil Code section 1668 based on the Rosses’
evidence of fraud and the Fox defendants’ introduction of the
purchase agreements’ integration clause. Under section 1668,
the Fox defendants were not insulated from liability for their
fraudulent representations, but the instruction did not prevent
the Fox defendants from arguing the Rosses should not have been

                                68
misled by the representations because they were told all of the
relevant representations were in the purchase agreements.31

             e.      Consequential damages
       The Rosses proposed a special jury instruction on
consequential damages adapted from CACI No. 3243 (designed
for actions under the Song-Beverly Consumer Warranty Act,
Civil Code section 1790 et seq.). The Fox defendants opposed use
of the instruction and initially proposed CACI No. 1924
(Damages–“Benefit of the Bargain” Rule), but they later
withdrew the instruction based on the Rosses’ lawyer’s
representation that the Rosses had “withdrawn damage claims
other than consequential damages.” At the first hearing on jury
instructions, the trial court stated, “So we do need to deal with
this one, because I was assuming that we were going to use
[CACI No.] 1924, but . . . [CACI No.] 3243 is the lemon law
instruction . . . .” However, it appears the court failed to address
the instruction further, stating at a subsequent hearing in
response to the Rosses’ request for a new consequential damages
instruction, “the consequential damages are covered by CACI
[No.] 1924.” At the hearing on the verdict form, in the context of
how the verdict form should read, the Fox defendants’ attorney
noted, “I don’t think we have a jury instruction with respect to

31    The Fox defendants also contend the instruction was
erroneous because it effectively told the jury that the fact the Fox
defendants included the integration clauses in the agreements
was evidence of their intentional wrongdoing. However, the Fox
defendants forfeited this argument by failing to raise it below,
and further, the Rosses did not argue to the jury that the waivers
were evidence of wrongdoing.

                                 69
consequential damages.” However, the attorney did not request
an instruction, and the court responded simply, “Okay.” The
court later instructed the jury without giving an instruction on
consequential damages.32
       In their motion for a new trial and on appeal, the Fox
defendants contend the trial court erred in failing to give a
consequential damages instruction, and this error resulted in the
jury awarding excessive damages because the Rosses were only
entitled to recover as consequential damages prejudgment
interest on the money the Rosses invested accruing from the time
the Rosses filed their complaint for rescission.33
       The Fox defendants forfeited this argument by failing to
propose their own damages instruction or raising the lack of an
instruction at any time before the jury was discharged. (Metcalf,
supra, 42 Cal.4th at pp. 1130-1131 [“‘“‘In a civil case, each of the
parties must propose complete and comprehensive instructions in
accordance with his theory of the litigation; if the parties do not
do so, the court has no duty to instruct on its own motion.’”]; see §
647.) After the trial court instructed the jury, the Fox

32    Although the trial court did not instruct on consequential
damages, it instructed the jury on damages from multiple
defendants (CACI No. 3933) and damages on multiple legal
theories (CACI No. 3934). The court also instructed the jury as to
rescission damages: “[I]f you determine that the plaintiffs have
the right to rescind their investments with the defendants, the
defendants must return to the plaintiffs everything of value they
invested with the defendants, less all the money they received
from the defendants.”
33    As discussed, regardless of whether the court should have
instructed on consequential damages, prejudgment interest was
not the proper measure of damages.

                                 70
defendants’ attorney failed to remind the court of the lack of a
damages instruction, instead arguing in his closing argument the
Rosses did not suffer any damages: “I would submit to
you . . . there aren’t any [damages], and you can’t figure out any.
And there aren’t any because the only damage numbers that
were put in were these manufactured numbers from plaintiffs’
expert . . . . And if you ignore that, what are you going to do?
Nobody testified there were monies stolen . . . . These were
actually good investments.” The Fox defendants’ attorney may
well have reasoned the absence of an instruction on
consequential damages inured to the Fox defendants’ benefit
because a proper instruction would have supported Habibi’s
opinion the Rosses were entitled to damages to compensate them
for the opportunity cost in investing with ACF. Regardless of the
reason for their failure to request an instruction, by not doing so
the Fox defendants forfeited any objection.

       5.      The Fox defendants forfeited their challenge to the
               verdict form’s failure to separate out the 13
               syndications as to liability and damages
       The Fox defendants contend the verdict form was defective
because it did not differentiate among the 13 syndications in
which the Rosses invested, thus compelling the jury to award
rescission on an “all-or-nothing” basis. The Fox defendants
forfeited this contention by failing to timely raise it in the trial
court and failing to propose a verdict form separating out the
syndications.
       The complaint did not contain separate causes of action for
each syndication; instead, it alleged the Fox defendants “engaged
in the same or similar conduct with respect to all of the

                                 71
investments and properties.” On January 19, 2018 the Fox
defendants filed a proposed special verdict form that required the
jury to make findings as to each element of each cause of action,
but it did not distinguish among the syndications. Thus, like the
final verdict form, the Fox defendants’ proposed verdict form
required the jury to make a single finding of liability and a single
award of damages as to each cause of action and each plaintiff.
       On June 26, 2018—at the conclusion of the presentation of
evidence and the day before the trial court instructed the jury—
the Fox defendants submitted a 28-page, 80-question amended
proposed special verdict form. The proposed verdict form
required the jury to calculate each plaintiff’s “harm” as to each
cause of action, but again the verdict form did not differentiate
among the syndications. Further, a new section on rescission
required the jury to award or deny rescission on an all-or-nothing
basis as to each plaintiff. At the June 27, 2018 conference on the
verdict form, with the jury waiting to be instructed, the Fox
defendants objected for the first time to the verdict form prepared
by the trial court on the ground that it did not separate out each
syndication, and even then, the Fox defendants continued to
advocate for use of their own form, which also did not separate
out each syndication.
       Under these circumstances, the Fox defendants forfeited
any challenge to defects in the verdict form included in their own
proposal. (See Heppler v. J.M. Peters Co. (1999) 73 Cal.App.4th
1265, 1287 [“because plaintiffs did not submit special verdict
forms that addressed [defendant’s] negligence; the issue is
waived on appeal”]; Cal. Rules of Court, rule 3.1580 [party
requesting special findings by jury must “present to the judge in
writing the issues or questions of fact on which the findings are

                                72
requested”]; cf. Myers Building Industries, Ltd. v. Interface
Technology, Inc. (1993) 13 Cal.App.4th 949, 962 [no forfeiture
where defendant “attempted repeatedly” to bring special verdict’s
failure to elicit findings on fraud to the attention of the trial
court, including through motions filed prior to the punitive
damages phase].) Moreover, even if there was no forfeiture, the
trial court did not err in using a general verdict form based on
the claims as pleaded.34

       6.      The Fox defendants have not shown instructional
               error as to rescission or that the Rosses received a
               double recovery
      The Fox defendants contend they are entitled to a new trial
because the verdict form, which included a finding as to each
plaintiff that “[w]e award [plaintiff’s name] the following amount
of damages,” was ambiguous and resulted in a double recovery
because it led the jury to award the Rosses compensatory
damages as well as restitution of their unreturned investment
money that the trial court later awarded as the “[r]escissionary
[a]mount” in its statement of decision This contention is forfeited
and lacks merit.

34     The Fox defendants rely on cases addressing a defendant’s
right to demur to a complaint that fails to separate out multiple
transactions. (See Ormerod v. Security-First National Bank of
Los Angeles (1937) 21 Cal.App.2d 362, 366-367; Wilson v. Rigali
& Veselich (1934) 138 Cal.App. 760, 767; Lee v. Folcey (1930) 110
Cal.App. 607, 609-610.) The Fox defendants did not demur to the
complaint on this basis, and they have not provided any authority
to support their contention a verdict form must separate out the
transactions included in a cause of action.

                                73
             a.    Relevant proceedings
       At the hearing on the verdict form, the Fox defendants’
attorney asked the trial court to modify the language in the draft
verdict form that referred to an award of “damages” to say,
‘What, if any, consequential damages do you award?’ The court
did not modify the verdict form.35
       In the course of its deliberations, the jury sent a note to the
court with the following question: “If jurors choose rescission as
‘Yes’ and find more damages, do we add rescission to extra
amount in amount of damages?” The trial court invited counsel
to discuss the jury’s question, indicating it thought the answer
should be “no.” The Rosses’ attorney agreed, stating,
“[R]escission is just something we have to do before we get the
damages.” The Fox defendants’ attorney concurred, stating, “I
think once they check the box ‘yes’ for rescission, then they need
to make a decision about how much extra they’re going to award
the plaintiffs. And I think the answer is no to this question,
because it would result in double recovery.”36 The Fox

35    The Fox defendants’ June 26, 2018 amended proposed
special verdict form also used the term “damages,” not
“consequential damages.”
36     The Fox defendants contend they did not forfeit their
challenge based on their attorney’s agreement to the response to
the jury question because the attorney was an associate who did
not have an opportunity to consult with lead trial counsel, who
was not present in the courtroom. However, the associate’s
agreement to a “no” response was correct, and in any event, we do
not find forfeiture based on the associate’s agreement at the
conference, but rather, based on the Fox defendants’ failure to
assert there was an ambiguity in the verdict form prior to the

                                  74
defendants did not request to further instruct or question the
jury, and they did not object that the verdict form was
ambiguous. Instead, the Fox defendants filed a posttrial brief on
the implementation of the judgment in which they argued for the
first time the jury included the Rosses’ unreturned investment
money, and therefore the trial court should not make an
additional award for rescission of the Rosses’ unreturned
investment money.

            b.     The Fox defendants’ forfeited their challenge,
                   and there was no error
      The Fox defendants forfeited their challenge to the verdict
form based on an asserted ambiguity in the damages question. If
the Fox defendants believed after the verdict was returned that
based on an ambiguity in the verdict form the jury awarded the
Rosses both compensatory damages and the return of their
unreturned investment, they should have raised the issue before
the jury was discharged. (See Taylor v. Nabors Drilling USA, LP
(2014) 222 Cal.App.4th 1228, 1243 [challenge to jury’s skipping
questions on confusing verdict form forfeited where “appellant
did not raise the defective verdict issue until after the jury had
been discharged”]; Jensen v. BMW of North America, Inc. (1995)
35 Cal.App.4th 112, 131 [party “waived any objection to the
special verdict form by failing to object before the court
discharged the jury”]; see also § 619 [“When the verdict is
announced, if it is informal or insufficient, in not covering the

discharge of the jury, by which time lead trial counsel had an
ample opportunity to review the jury question and verdict form.

                                75
issue submitted, it may be corrected by the jury under the advice
of the Court, or the jury may be again sent out.”].)
       Although “courts have declined to apply the waiver rule
‘where the record indicates that the failure to object was not the
result of a desire to reap a “technical advantage” or engage in a
“litigious strategy”’” (Saxena, supra, 159 Cal.App.4th at pp. 327-
328), the decision by the Fox defendants not to object to the
verdict form before discharge of the jury appears to have been
strategic. Because the jury awarded less than the lowest of three
damage estimates provided by Habibi (based on the rate of return
on the NAREIT apartment index), the Fox defendants stood to
benefit by waiting until after the jury was discharged to
challenge the court’s award of rescission as duplicative, and when
that failed, moving for new trial based on an asserted defect in
the verdict.
       Even if the issue were not forfeited, the Fox defendants
have not met their burden to demonstrate the jury’s award of
approximately $4.3 million in damages erroneously included a
rescissionary award. The jury’s question, “If jurors choose
rescission as ‘Yes’ and find more damages, do we add rescission to
extra amount in amount of damages?” shows the jury understood
the difference between “more damages” (that is, consequential
damages) and rescission. The court’s answer of “no” made clear
the jury should not include the rescissionary amount in their
damages award. Further, Habibi testified the return the Rosses
would have received using the NAREIT apartment index was
about $4.4 million and there remained approximately $1.1
million of unreturned investment money. Thus, it is a reasonable
inference from the jury’s award of about $4.3 million (and not
$5.5 million) that the jury awarded only compensatory damages

                               76
based on the NAREIT apartment index return with a small
discount. Although we do not know the basis for the discount,
the jury could have accepted one of the Fox defendants’ many
arguments for why specific syndications were not fraudulent, or it
may have excluded a return on two $125,000 interests Fox gifted
to Zipkin and Eric in 2012.
       On appeal, the Fox defendants also argue the fact the
individual damage awards ($2,521,939 for Jerry, $925,708 for
Eric, and $869,741 for Zipkin) equal exactly 91 percent of each
plaintiff’s initial investment shows the jury included recission.
Although the Fox defendants’ calculation of a 91 percent
multiplier is mathematically correct, that fact does not support
their argument the jury awarded a rescissionary amount. If the
jury improperly included restitution in its award, that would
mean its award of consequential damages was $3.2 million ($4.3
million less $1.1 million for return of the initial investments).
The Fox defendants present no explanation for the basis on which
the jury would have awarded $3.2 million in compensatory
damages. That the jury awarded each of the Rosses damages in
precise proportion to their individual initial investments suggests
not that the jury also awarded rescission at an arbitrary 91
percent multiplier, but that the jury used the Rosses’ initial
investment amounts as a basis for allocating the total
consequential damages, which Habibi’s estimates did not do.

       7.     We reverse the jury’s award of punitive damages
              against ACF; we affirm the award against Fox
      The Fox defendants contend the punitive damages award
($4 million each against Fox and ACF) was not supported by
substantial evidence and was unconstitutionally excessive. We

                                77
agree the award against ACF was not supported by substantial
evidence. However, there was substantial evidence Fox had a net
worth exceeding $250 million and an ability to pay $4 million in
punitive damages. Further, the award against Fox was not
excessive.

              a.     Applicable law and standard of review
      “‘The purposes of punitive damages are to punish the
defendant and deter the commission of similar acts. [Citations.]
Three primary considerations govern the amount of punitive
damages: (1) the reprehensibility of the defendant’s conduct; (2)
the injury suffered by the victims; and (3) the wealth of the
defendant.’” (Bigler-Engler v. Breg, Inc. (2017) 7 Cal.App.5th
276, 307; accord, Rufo v. Simpson (2001) 86 Cal.App.4th 573, 619-
620; see Neal v. Farmers Ins. Exchange (1978) 21 Cal.3d 910, 928
& fn. 13.) In reviewing an award of punitive damages, “the most
important question is whether the amount of the punitive
damages award will have deterrent effect—without being
excessive . . . . [T]he award can be so disproportionate to the
defendant’s ability to pay that the award is excessive for that
reason alone.” (Adams v. Murakami (1991) 54 Cal.3d 105, 111;
accord, Bigler-Engler, at p. 307.) “‘The ultimately proper level of
punitive damages is an amount not so low that the defendant can
absorb it with little or no discomfort [citation], nor so high that it
destroys, annihilates, or cripples the defendant.’” (Pfeifer v. John
Crane, Inc. (2013) 220 Cal.App.4th 1270, 1308 (Pfeifer); accord,
Rufo, at pp. 621-622.)
      The Supreme Court has not prescribed a single measure to
assess a defendant’s ability to pay punitive damages. (Adams v.
Murakami, supra, 54 Cal.3d at p. 116, fn. 7.) “Net worth

                                 78
generally is considered the best measure of a defendant’s ‘wealth’
for purposes of assessing punitive damages.” (Devlin v. Kearny
Mesa AMC/Jeep/Renault, Inc. (1984) 155 Cal.App.3d 381, 391;
accord, Soto v. BorgWarner Morse TEC Inc. (2015) 239
Cal.App.4th 165, 194 (Soto) [“[e]vidence of the defendant’s net
worth is the most commonly used” metric].) However, because
“net worth ‘is subject to easy manipulation’” (Pfeifer, supra, 220
Cal.App.4th at p. 1308), courts have also considered “various
asset and income figures relevant to the issue of punitive
damages.” (Devlin, at p. 391; accord, Soto, at pp. 194-195.) By
any measure, “‘evidence of earnings or profit alone are not
sufficient “without examining the liabilities side of the balance
sheet.” [Citations.] . . . Normally, evidence of liabilities should
accompany evidence of assets, and evidence of expenses should
accompany evidence of income.’” (Pfeifer, at p. 1308; accord, Soto,
at p. 194 [“Evidence of a defendant’s income, standing alone, is
not ‘““meaningful evidence.”’”].) “‘“Without evidence of the actual
total financial status of the defendants, it is impossible to say
that any specific award of punitive damage is appropriate.”’”
(Soto, at p. 194.)
       “[T]he plaintiff has the burden of proving the defendant’s
financial condition, for purposes of an award of punitive
damages.” (Pfeifer, supra, 220 Cal.App.4th at p. 1307; accord,
Farmers & Merchants Trust Co. v. Vanetik (2019) 33 Cal.App.5th
638, 647 [“‘[e]vidence of a defendant’s financial condition is a
legal precondition to the award of punitive damages’”]; accord,
Adams v. Murakami, supra, 54 Cal.3d at p. 110.) On review, we
“examine the record to determine whether the challenged award
rests upon substantial evidence. [Citations.] If it does not, and if
the plaintiffs had a full and fair opportunity to make the

                                79
requisite showing, the proper remedy is to reverse the award.”
(Soto, supra, 239 Cal.App.4th at p. 195; accord, Vanetik, at pp.
647-648; see Behr v. Redmond (2011) 193 Cal.App.4th 517, 535
[“Generally, punitive damages awards are reviewed under the
substantial evidence standard of review ‘in which all
presumptions favor the trial court’s findings and we view the
record in the light most favorable to the judgment.’”].) “A
reviewing court will reverse as excessive ‘““only those judgments
which the entire record, when viewed most favorably to the
judgment, indicates were rendered as the result of passion and
prejudice.”’” (Zaxis Wireless Communications, Inc. v. Motor
Sound Corp. (2001) 89 Cal.App.4th 577, 583, quoting Neal v.
Farmers Ins. Exchange, supra, 21 Cal.3d at p. 927.)

            b.      Evidence presented at the punitive damages
                    trial
       At the punitive damages phase of the trial, the Rosses
presented the jury with a document entitled “Alan C. Fox
Summary of Equity and Pro-Forma Cash Flow as of December
13, 2016” (financial statement) to argue Fox had the ability to
pay a punitive damages award as high as $25 million. The
financial statement, which was signed by Fox and dated
February 17, 2017, reported Fox had total equity (assets less
liabilities) exceeding $250 million, and in December 2016 he
received $125,000 in monthly income from ACF and $875,000 in
monthly income from his properties’ operations. The financial
statement also included a detailed schedule of approximately 76
properties owned by Fox, identifying his ownership interest and
loan obligations for each.

                               80
      Fox was not present at the punitive damages trial, and the
Fox defendants did not introduce evidence or address the
financial statement in their closing argument.37 The Rosses did
not present any additional evidence as to ACF.
            c.     The punitive damages award against ACF is
                   not supported by substantial evidence
       The Fox defendants contend substantial evidence does not
support the punitive damages award against ACF because the
Rosses did not introduce evidence of ACF’s net worth or other
sufficient evidence to show ACF’s financial condition. The Fox
defendants are correct. The Rosses did not introduce a financial
statement for ACF or other evidence of the company’s net worth
or net income. At trial, the Rosses’ attorney told the jury it
should instead base its award on ACF’s ability to pay Fox
$125,000 per month and its receipt of a management fee of 4
percent of gross rental income for approximately 70 shopping
centers. The Rosses’ attorney suggested $3 million would be an
appropriate punitive damages award, which was the equivalent
of two years of salary paid to Fox.
       Although evidence of net worth is not required to support
an award of punitive damages, the Rosses still needed to produce
some evidence of ACF’s “‘“actual total financial status.”’” (Soto,
supra, 239 Cal.App.4th at pp. 194-196 [evidence of corporation’s
income was not sufficient to support punitive damages award

37     Fox was in the state of Washington at the time of the
punitive damages trial, despite notice that the trial would begin
“as soon as the first phase was completed.” The Fox defendants’
attorney noted Fox had been excused as a witness during phase 1
of the trial, and the Rosses had not requested his presence for
phase 2.

                                81
because “this evidence was, at best, pertinent to only half of
[defendant’s] balance sheet and . . . did not shed any light on [its]
liabilities or expenses”]; Baxter v. Peterson (2007) 150
Cal.App.4th 673, 681 [evidence of properties defendant owned
and income was insufficient to show financial condition absent
evidence of encumbrances and liabilities]; see Pfeifer, supra, 220
Cal.App.4th at p. 1308 [“‘evidence of liabilities should accompany
evidence of assets, and evidence of expenses should accompany
evidence of income’”].)
       The fact that ACF paid Fox a monthly salary of $125,000
(as of December 2016) did not establish that ACF could or did pay
Fox a $1.5 million salary every year. Further, although a
4 percent management fee for 70 shopping likely produces a
significant income stream, the Rosses did not present evidence of
the shopping centers’ rental income on which the management
fees were based. And the Rosses failed to present evidence of
ACF’s liabilities, expenses, or net worth (including what interest,
if any, the company held in the shopping centers). Absent this
information, we cannot infer ACF was able to pay $4 million
without being “destroy[ed], annihilate[d], or cripple[d]” simply
because it paid its CEO a hefty salary. (Pfeifer, supra, 220
Cal.App.4th at p. 1308.)

            d.   Substantial evidence supports the punitive
                 damages award against Fox
     On appeal, the Fox defendants contend there was no
foundation to admit Fox’s financial statement into evidence

                                 82
because it was not authenticated.38 Because they asserted this
objection below in an oral motion to exclude the evidence, we
review the trial court’s decision denying their motion for an abuse
of discretion. (People v. Jones (2013) 57 Cal.4th 899, 957
[applying abuse of discretion standard to admission of evidence].)
The trial court did not abuse its discretion.
       Fox produced the financial statement pursuant to a court
order compelling his compliance with the Rosses’ punitive

38     The Fox defendants do not argue the financial statement
presented an inaccurate statement of Fox’s net worth as of
December 31, 2016. They likewise do not argue Fox lacked the
ability to pay a $4 million punitive damages award. Nor could
they. The $4 million award was less than 1.6 percent of Fox’s
claimed net worth as of December 31, 2016. Appellate courts
have affirmed awards that constituted a far greater share of a
defendant’s net worth. (See, e.g., Vallbona v. Springer (1996) 43
Cal.App.4th 1525, 1540 [23 percent]; Devlin v. Kearny Mesa
AMC/Jeep/Renault, Inc., supra, 155 Cal.App.3d at p. 391 [17.5
percent]; but see Michelson v. Hamada (1994) 29 Cal.App.4th
1566, 1596 [28 percent was excessive]; Storage Services v.
Oosterbaan (1989) 214 Cal.App.3d 498, 515-516 [33 percent was
excessive].) The Fox defendants’ argument the financial
statement was too out-of-date to evidence Fox’s ability to pay at
the time of the trial in mid-2018 is not persuasive. The financial
statement was dated February 17, 2017, and the Fox defendants’
attorney represented it was Fox’s current financial statement
when he produced it in early 2018. Further, the financial
statement showed Fox had few liabilities, and there is nothing to
suggest Fox’s financial position could have deteriorated between
December 31, 2016 and mid-2018 to a degree relevant to his
ability to pay a $4 million award.

                                83
damages discovery under Civil Code section 3295.39 On
November 14, 2017 the trial court granted the Rosses’ motion for
leave to take punitive damages discovery from Fox. After Fox
failed to produce requested documents related to his financial
condition in advance of his deposition, on January 12, 2018 the
court ordered Fox to produce “[p]unitive damages discovery:
[f]inancial statements” by January 18. Fox’s attorney
acknowledged at the hearing on Fox’s motion to exclude the
financial statement that the document “was produced pursuant
to [the] court’s order.”
       The trial court at the hearing on ACF’s motion to exclude
found the financial statement was admissible, relying on three
code provisions: Evidence Code section 1411 (“Except as provided
by statute, the testimony of a subscribing witness is not required
to authenticate a writing”); Evidence Code section 1414 (“A
writing may be authenticated by evidence that: [¶] (a) The
party against whom it is offered has at any time admitted its
authenticity”); and Evidence Code section 1421 (“A writing may
be authenticated by evidence that the writing refers to or states
matters that are unlikely to be known to anyone other than the
person who is claimed by the proponent of the evidence to be the
author of the writing”).

39    Civil Code section 3295, subdivision (c), provides in
relevant part that “[n]o pretrial discovery by the plaintiff shall be
permitted with respect to [evidence of the defendant’s financial
condition] unless the court enters an order permitting such
discovery . . . .” Subdivision (c) provides further the court may
order discovery on a motion by the plaintiff after a hearing where
“the plaintiff has established that there is a substantial
probability that the plaintiff will prevail on the claim pursuant to
Section 3294 [for punitive damages].”

                                 84
      We rejected a similar authentication argument made by the
defendant in a punitive damages trial in StreetScenes v. ITC
Entertainment Group, Inc. (2002) 103 Cal.App.4th 233, 241-244
(StreetScenes). There, the defendant ITC argued there was
insufficient evidence to support an award of punitive damages
because it had objected on foundation, authentication, and
hearsay grounds to the admission of a two-page unsigned
financial report it had produced pursuant to a court order under
Civil Code section 3295. We concluded the document was
admissible, explaining, “ITC presented the information to the
court after being ordered to do so and after informing the court it
would present the information at the proper time. The
documents were from ITC and were presented to the court by
ITC’s counsel as per the statement of two days before. This is all
the authentication that is required. (Evid. Code, §§1414, 1420,
1421.)” (StreetScenes, at p. 244.)
      As in StreetScenes, the trial court here expressly ordered
Fox to produce “[f]inancial statements” after the court previously
granted the Rosses’ motion to take discovery of Fox’s financial
condition under Civil Code section 3295. The fact the attorney in
StreetScenes, supra, 103 Cal.App.4th at page 244 produced the
financial documents directly to the trial court is a distinction
without a difference. Further, by acknowledging the financial
statement responded to the court’s order, the Fox defendants
admitted to the document’s authenticity. (Evid. Code, §1414,
subd. (b).) This case is even stronger than StreetScenes because
Fox signed and dated the financial document, whereas in
StreetScenes the produced document was not signed or dated.
Moreover, it is unlikely anyone other than Fox would have
information on Fox’s assets, liabilities, and property holdings.

                                85
(Evid. Code, §1421.) The financial statement was therefore
admissible and provided substantial evidence of Fox’s ability to
pay the punitive damages award.

            e.     The punitive damages award against Fox is not
                   unconstitutionally excessive
       The Fox defendants contend the combined $8 million
punitive damages award against them is unconstitutionally
excessive because the ratio of the punitive damages award to the
$4.3 million compensatory damages award exceeded one to one.
(See State Farm Mutual Automobile Insurance Co. v. Campbell
(2003) 538 U.S. 408, 425 (State Farm) [“When compensatory
damages are substantial, then a lesser ratio, perhaps only equal
to compensatory damages, can reach the outermost limit of the
due process guarantee.”]; Roby v. McKesson Corp. (2009) 47
Cal.4th 686, 719 (Roby).) We review de novo whether an award
of punitive damages is excessive under the due process clause of
the federal Constitution. (Simon v. San Paolo U.S. Holding Co.,
Inc. (2005) 35 Cal.4th 1159, 1172; Mazik v. Geico General Ins. Co.
(2019) 35 Cal.App.5th 455, 463.)
       Although the Fox defendants argue the $8 million punitive
damages award was excessive, the jury separately awarded $4
million in punitive damages against Fox and $4 million against
ACF. Because we are reversing the punitive damages award
against ACF, we therefore consider whether the $4 million
punitive damages award against Fox violates due process. It
does not. The Fox defendants have not cited to any authority for
the proposition an award of punitive damages in an amount less
than compensatory damages is excessive under State Farm, and
we are not aware of any. Moreover, the Supreme Court in Roby,

                                86
supra, 47 Cal.4th at page 719, explained a “one-to-one ratio
between compensatory and punitive damages is the federal
constitutional limit” in a case where there is a “relatively low
degree of reprehensibility” on the part of the defendant and a
substantial compensatory damages verdict.40 Fox’s level of
reprehensibility was far from low.
       In evaluating the reprehensibility of a defendants’ conduct,
we consider “whether ‘[1] the harm caused was physical as
opposed to economic; [2] the tortious conduct evinced an
indifference to or a reckless disregard of the health or safety of
others; [3] the target of the conduct had financial vulnerability;
[4] the conduct involved repeated actions or was an isolated
incident; and [5] the harm was the result of intentional malice,
trickery, or deceit, or mere accident.’” (Roby, supra, 47 Cal.4th at
pp. 717-718 [reducing punitive damages award against
defendant employer to one-to-one ratio in discrimination action
because the employer’s conduct—as compared to the direct

40     As the California Supreme Court explained in Roby, the
U.S. Supreme Court set “‘three guideposts’ for courts reviewing
punitive damages awards: ‘(1) the degree of reprehensibility of
the defendant’s misconduct; (2) the disparity between the actual
or potential harm suffered by the plaintiff and the punitive
damages award; and (3) the difference between the punitive
damages awarded by the jury and the civil penalties authorized
or imposed in comparable cases.’” (Roby, supra, 47 Cal.4th at p.
712, quoting State Farm, supra, 538 U.S. at p. 418; accord, Mazik
v. Geico General Ins. Co., supra, 35 Cal.App.5th at p. 471.) ““Of
the three guideposts . . . the most important is the degree of
reprehensibility of the defendant's conduct.’” (Roby, at p. 712,
quoting State Farm, at p. 419.) The Fox defendants focus on the
ratio of punitive to compensatory damages and the level of
reprehensibility.

                                87
supervisor’s misconduct—was “at the low end of the range of
wrongdoing”].) Here, there was ample evidence Fox engaged in a
decades-long scheme to intentionally defraud multiple investors.
And, although the Rosses were not physically injured or
impoverished, Jerry entrusted Fox in 2004 with “most of my kids’
inheritance, with some left over for some charities.” Fox solicited
Jerry’s investments for over a decade and marked up the
purchase price for the majority of the shopping centers in which
Jerry invested by more than a million dollars, showing a reckless
disregard for the Rosses’ wellbeing and an abuse of Jerry’s
vulnerability based on his age. (See Roby, at p. 716 [“an act
rooted in ‘intentional malice’” is more reprehensible than a mere
“failure to prevent the foreseeable discriminatory consequences
flowing from [an] otherwise appropriate [corporate] policy”]; see
also Planned Parenthood of the Columbia/Willamette Inc. v.
American Coalition of Life Activists (9th Cir. 2005) 422 F.3d 949,
958-959 [“‘infliction of economic injury, especially when done
intentionally through affirmative acts of misconduct, or when the
target is financially vulnerable, can warrant a substantial
penalty’”], quoting BMW of North America, Inc. v. Gore (1996)
517 U.S. 559, 576.)41

41    The Fox defendants also contend the consequential
damages were unconstitutionally excessive because prejudgment
interest is the proper measure of rescission damages, and the
Rosses should have recovered their out-of-pocket expenses
instead of their lost investment income. As discussed, these
arguments lack merit.

                                88
       8.        The trial court’s award of postverdict prejudgment
                 interest was proper
       The Fox defendants contend the trial court erred in
awarding the Rosses prejudgment interest on the consequential
damages award for the period from the verdict (July 2, 2018) to
the date of entry of judgment (April 26, 2019), arguing that
postverdict prejudgment interest is barred by statute and that
the Rosses’ damages were uncertain. These contentions lack
merit.
       Civil Code section 3287, subdivision (a), provides in
relevant part, “A person who is entitled to recover damages
certain, or capable of being made certain by calculation, and the
right to recover which is vested in the person upon a particular
day, is entitled also to recover interest thereon from that
day . . . .” “‘“The statute . . . does not authorize prejudgment
interest where the amount of damage, as opposed to the
determination of liability, ‘depends upon a judicial determination
based upon conflicting evidence and it is not ascertainable from
truthful data supplied by the claimant to his debtor.’
[Citations.]” [Citation.] Thus, where the amount of damages
cannot be resolved except by verdict or judgment, prejudgment
interest is not appropriate.” (Children’s Hospital & Medical
Center v. Bontá (2002) 97 Cal.App.4th 740, 774; see Olson v. Cory
(1983) 35 Cal.3d 390, 402 [“Generally, the certainty required of
Civil Code section 3287, subdivision (a), is absent when the
amounts due turn on disputed facts, but not when the dispute is
confined to the rules governing liability.”].) “Courts generally
apply a liberal construction in determining whether a claim is
certain, or liquidated.” (Howard v. American National Fire Ins.
Co. (2010) 187 Cal.App.4th 498, 535; accord, State of California v.

                                89
Continental Ins. Co. (2017) 15 Cal.App.5th 1017, 1038.) “‘“On
appeal, we independently determine whether damages were
ascertainable for purposes of the statute, absent a factual dispute
as to what information was known or available to the defendant
at the time”’” (State of California, supra, 15 Cal.App.5th at
p. 1038; accord, Collins v. City of Los Angeles (2012)
205 Cal.App.4th 140, 151.)
       The Fox defendants argue an award of postverdict
prejudgment interest is barred by section 685.020,which provides
in subdivision (a) that “interest commences to accrue on a money
judgment on the date of entry of the judgment.” But section
685.020 only applies to postjudgment interest. The Fox
defendants’ reliance on Pellegrini v. Weiss (2008) 165 Cal.App.4th
515, 532-533 is misplaced. There, the Court of Appeal concluded
as to postjudgment interest that section 685.020 provided for
interest to accrue from the date of judgment, not the jury’s
verdict. (Pelligrini, at pp. 532-533.) The court declined to extend
to an award of postjudgment interest the provision in California
Rules of Court, former rule 3.1802 requiring the clerk “‘include in
the judgment . . . the interest accrued since the entry of the
verdict.’” (Pelligrini, at p. 532.) The Pelligrini court reasoned
California Rules of Court, former rule 3.1802, applied only to
prejudgment interest, and it could not control over the statutory
provision in Code of Civil Procedure section 685.020 applicable to
postjudgment interest. (Pelligrini, at p. 533.)
       As the Court of Appeal in Holdgrafer v. Unocal Corp. (2008)
160 Cal.App.4th 907, 935 explained, California Rules of Court,
former rule 3.1802 was not inconsistent with Code of Civil
Procedure section 685.020 because Civil Code section 3287
authorized prejudgment interest in cases where damages were

                                90
vested and certain. And significantly, California Rules of Court,
rule 3.1802 now provides simply that “[t]he clerk must include in
the judgment any interest awarded by the court.” As the Judicial
Council’s Civil and Small Claims Advisory Committee reported to
the Judicial Council in connection with the modification of rule
3.1802 to remove the reference to the clerk calculating
prejudgment interest, “[e]liminating the language from the rule
of court would not preclude a court from awarding prejudgment,
post-verdict interest in appropriate cases. . . . [¶] . . . [¶] [T]he
recommended amendment does not affect who can receive
interest or in what circumstances, but only clarifies that a clerk
is not to automatically add interest to a judgment as a ministerial
act.” (Judicial Council of Cal., Advisory Com. Rep., Civil
Procedure: Clerk’s Addition of Interest to Judgments (2013) p. 4.)
Thus, read in conjunction with Civil Code section 3287,
subdivision (a), the trial court appropriately determines the
amount of prejudgment interest, if any (including postverdict
interest), and under California Rules of Court, rule 3.1802, the
clerk enters the amount of interest in the judgment. The clerk
likewise would enter postjudgment interest under Code of Civil
Procedure section 685.020. There is nothing inconsistent about
this scheme.
       The Fox defendants also argue the amount of the Rosses’
damages was uncertain at the time of the verdict because the
“jury awarded an unspecified form of damages, having never been
instructed how to calculate consequential damages.” They
contend the jury award included a rescission component (and the
trial court subsequently ordered duplicative rescission) such that
the consequential portion was uncertain. But, as discussed, it is
clear the jury’s damages award constituted consequential

                                 91
damages and not the rescissionary amount. Habibi testified the
Rosses were entitled to “get[] back their capital, plus a reasonable
return” for the time their money was tied up in the Fox
investments, and he opined $4.4 million was the lowest measure
of consequential damages based on the NAREIT apartment
index. In the course of its deliberations, the jury sent a note to
the court asking, “If jurors choose rescission as ‘Yes’ and find
more damages, do we add rescission to extra amount in amount
of damages?” The court, with the agreement of the parties’
attorneys, responded “no.” The jury then awarded $4.3 million in
damages, just shy of Habibi’s estimate of consequential damages.
This amount has no reasonable connection to the rescissionary
amount, which the Fox defendants do not dispute was
approximately $1.1 million. Had the jury intended to award
rescission and consequential damages, the award would likely
have been higher than Habibi’s lowest estimate.
      The amount of compensatory damages was therefore
known to the Fox defendants at the time the jury returned the
verdict, satisfying the certainty requirement of Civil Code section
3287. (State of California v. Continental Ins. Co., supra, 15
Cal.App.5th at p. 1038; see Watson Bowman Acme Corp. v. RGW
Construction, Inc. (2016) 2 Cal.App.5th 279, 293 [“prejudgment
interest compensates for the loss of the use of the money during
the period between the assertion of the claim and the rendition of
judgment”].)42

42    The Fox defendants further argue that the Rosses’ attorney
waived prejudgment interest when he told the trial court during
the conference on jury instructions, “We’ll seek interest on the
judgment . . . but not on the consequential damages.” This

                                92
                         DISPOSITION

      We reverse the trial court’s order granting a new trial and
affirm the court’s order denying the Rosses’ motion for judgment
notwithstanding the verdict. We also reverse the punitive
damages award against ACF. We otherwise affirm. We remand
to the trial court with instructions to enter judgment in favor of
the Rosses, but to strike the punitive damages award against
ACF. The parties are to bear their own costs.

                                           FEUER, J.
We concur:

             PERLUSS, P. J.

             SEGAL, J.

argument distorts the record. The Rosses’ attorney made this
statement during discussion of the Fox defendants’ proposed
special jury instruction 13, which sought to instruct the jury that
interest on money paid under a contract later rescinded —which
the Fox defendants argued was the proper measure of
consequential damages—began accruing no earlier than the 2017
filing of the amended complaint with a demand for rescission. It
is clear in context that the Rosses’ attorney was arguing that the
Rosses were not seeking as consequential damages an award of
prejudgment interest, so the jury should not be instructed on
prejudgment interest.

                                93