Court Opinion

ID: 6317334
Source: CourtListenerOpinion
Date Created: 2022-02-24 20:02:39.47089+00
Date Added: 2024-06-11T09:00:35.024559
License: Public Domain

Filed 2/24/22 Baral v. Schnitt CA2/1
   NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for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 ONE

ROBERT C. BARAL,                                                B298050

        Plaintiff and Appellant,                                (Los Angeles County
                                                                Super. Ct. No. BC475350)
        v.
                                                                ORDER MODIFYING OPINION
DAVID SCHNITT,                                                  AND DENYING REHEARING

        Defendant and Appellant.                                [CHANGE IN JUDGMENT]

       THE COURT:
       It is ordered that the opinion filed herein on January 28,
2022, be modified as follows:
       1. On page 2, the last sentence of the second full paragraph
is deleted and the following is inserted in its place:
              Accordingly, we affirm the order awarding
       Schnitt anti-SLAPP fees but vacate the judgment as
       to Baral’s causes of action for fraud and breach of
       fiduciary duty and remand the matter with directions
       to enter judgment for Schnitt on those causes of
       action. The judgment on Baral’s cause of action for
       declaratory relief remains unchanged.
       2. On page 23, the Disposition paragraph is deleted and
the following paragraph is inserted in its place:
              The judgment is reversed in part and the
       matter remanded, and the trial court is ordered to
       enter judgment in favor of Schnitt on Baral’s causes
       of action for fraud and breach of fiduciary duty. The
       judgment is affirmed as to Baral’s cause of action for
       declaratory relief. The order granting Schnitt anti-
       SLAPP fees is affirmed. Schnitt is to recover costs on
       appeal.
This modification effects a change in the judgment.
Appellant Baral’s petition for rehearing is denied.

____________________________________________________________
ROTHSCHILD, P. J.      CHANEY, J.          BENDIX, J.

                                2
Filed 1/28/22 Baral v. Schnitt CA2/1 (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 ONE

ROBERT C. BARAL,                                                B298050

        Plaintiff and Appellant,                                (Los Angeles County
                                                                Super. Ct. No. BC475350)
        v.

DAVID SCHNITT,

        Defendant and Appellant.

      APPEAL from a judgment and order of the Superior Court
of Los Angeles County, Randolph M. Hammock, Judge. Affirmed
in part and reversed in part.
      Sauer & Wagner, Gerald L. Sauer, and Amir A. Torkamani
for Plaintiff and Appellant Robert C. Baral.
      Ervin Cohen & Jessup, Michael C. Lieb; Greines, Martin,
Stein & Richland, Kent L. Richland, David E. Hackett, and
Joseph V. Bui for Defendant and Appellant David Schnitt.
               ___________________________________
      Robert C. Baral sued David Schnitt, alleging fraud and
multiple breaches of fiduciary duty concerning IQ BackOffice
LLC (IQ), a company they owned and managed. After Schnitt
successfully moved to strike portions of the complaint under the
                                                1
anti-SLAPP statute (Code Civ. Proc., § 425.16), a jury awarded
Baral $2.5 million in compensatory damages and $1 million in
punitive damages. The trial court denied Schnitt’s motion for
judgment notwithstanding the verdict (JNOV) but granted his
motion for new trial on the issues of consent and waiver, finding
that Schnitt met his burden of proof that Baral waived his right
to damages and the evidence established that no waiver was
made under duress. The trial court also granted Schnitt anti-
SLAPP attorney fees.
       We conclude the court properly awarded Schnitt anti-
SLAPP fees but improperly denied his JNOV motion. These
holdings render the appeals as they pertain to the court’s new
trial orders moot. Accordingly, we affirm the order awarding
Schnitt anti-SLAPP fees but vacate the judgment and remand
the matter with directions to enter judgment for Schnitt.
                          BACKGROUND
A.     Background
       In 2002, Schnitt started a company that processed financial
transactions for companies.

      1
        “SLAPP” is an acronym for “strategic lawsuit against
public participation.” (Baral v. Schnitt (2016) 1 Cal.5th 376, 381,
fn. 1 (Baral).) Further statutory references are to the Code of
Civil Procedure. Hereafter, we refer to section 425.16,
subdivision (b)(1) as section 425.16(b)(1).

                                 2
       In 2003, Baral owned an accounting firm that handled
financial affairs in the entertainment industry.
       With four other principals, Schnitt invited Baral to
participate in his financial transactions company. Baral agreed
to fund half of the company’s costs—ultimately paying in
$455,000—and lease the business’s office space for “a 30% equity
stake” in the company, which was named IQ BackOffice LLC.
Baral’s firm handled IQ’s tax returns. By 2008, IQ had become
profitable.
       By 2010, the relationship between Schnitt and Baral had
soured, and Schnitt and a majority of IQ’s equity owners explored
selling IQ. Schnitt retained investment banker Vivek
Subramanyam to help find potential buyers.
       One potential buyer, Live-It Investments (Live-It), offered
$12.5 million for the company.
       In October 2010, IQ and Live-It memorialized the terms of
a prospective sale in a non-binding Letter of Intent (LOI),
proposing that IQ’s senior executives (Schnitt, Phil Jablonski,
and Dennis Foster) would continue with the company after the
sale and reinvest a substantial portion of the sale price in the
new company. The LOI also proposed that Baral and other IQ
owners would sell their interests in IQ for cash.
       If the sale went through as planned, Baral’s 30 percent
interest in IQ was expected to be worth approximately $3.5
million.
       In November 2010, Schnitt presented the Live-It offer and
the LOI’s terms to all of IQ’s owners except Baral. The owners
(except Baral) agreed to sell IQ to Live-It.
       When Schnitt informed Baral of the terms of the proposed
sale, Baral expressed reservations, complaining it would be

                                3
unfair to him. Nevertheless, Baral retained independent counsel,
Gary Edelstone, who negotiated with Live-It for the sale, during
which Baral never asked for a position at the new company nor
an equity interest in it. Edelstone spent 150 hours and more
than $77,000 in fees working on negotiations with Live-It on
Baral’s behalf.
       Prior to the proposed sale, IQ drafted a sale agreement and
retained the accounting firm Moss Adams to audit its finances.
       The Moss Adams audit discovered that Baral had engaged
in unauthorized transactions, and Mitch Baral, Baral’s son and
IQ’s bookkeeper, had embezzled approximately $123,000 from the
company.
       In February 2011, Baral threatened to veto the sale to
Live-It if the sales agreement did not expressly characterize him
as “a Member and Manager” of the new company. After this
demand was met, Baral urged Schnitt to finalize the sale,
representing they “both ha[d] everything to gain” if it went
through. Baral repeatedly urged the other owners to accede to
the sale as well, and threatened to hold Schnitt liable if the deal
failed to close.
       On April 15, 2011, Baral and the other owners signed the
sale’s closing documents as well as a document titled “Unanimous
Written Consent” prepared by Baral’s counsel, pursuant to which
they agreed they had “carefully reviewed and evaluated the
Purchase Agreement” and “believe[d] it [was] in the best interest
of the Company and its members.”
       Baral received $3.6 million from the sale.
       Under Live-It’s control, IQ’s profits plummeted, and by
2016 the company had a negative cash flow and was over $6

                                 4
million in debt. Schnitt thereupon repurchased IQ for $2.8
million.
B.     Anti-SLAPP Proceedings
       In December 2011, Baral sued Schnitt for fraud, breach of
fiduciary duty, and defamation, alleging Schnitt wrongfully took
control of IQ and secretly negotiated the sale of the company to
Live-It. The complaint alleged Schnitt unilaterally hired Moss
Adams to investigate misappropriation of IQ’s funds before the
sale, controlled that investigation, gave Moss Adams false
information, and directed Moss Adams not to interview Baral,
resulting in the audit report’s false conclusions that Baral had
engaged in unauthorized transactions.
       Baral alleged he suffered economic damages arising from:
(1) “The loss of profits attributable to being prevented from
negotiating for a continuing ownership interest subsequent to the
sale of IQ’s assets”; (2) “The loss of earnings attributable to being
prevented from negotiating for a continuing employment or
consulting position subsequent to the sale of IQ’s assets”; and (3)
“The loss of profits attributable to the value of IQ if it had been
sold later than April of 2011.”
       Schnitt filed a demurrer and anti-SLAPP motion, and the
trial court struck Baral’s defamation claims as stemming from
conduct protected by the litigation privilege, and sustained
without leave to amend Schnitt’s demurrer to five of the causes of
action. Baral appealed and filed a first amended complaint, but
abandoned the appeal after Schnitt filed another anti-SLAPP
motion, which Schnitt subsequently withdrew.
       In January 2013, Baral filed a second amended complaint,
which as the Supreme Court described it, “plead[ed] four causes
of action: breach of fiduciary duty, constructive fraud, negligent

                                  5
misrepresentation, and a claim for declaratory relief. In support
of those counts, Baral allege[d] as follows: Schnitt violated his
fiduciary duties by usurping Baral’s ownership and management
interests so that Schnitt could benefit from the sale of IQ to [Live-
It]. Schnitt sold a 72.6 percent interest in IQ based on his
representation that he was its sole member and manager, and
negotiated an employment position and ownership interest for
himself without Baral’s knowledge or consent. Schnitt also
excluded Baral from the Moss Adams investigation in an effort to
coerce his [Baral’s] cooperation in the sale of the business. After
the sale of IQ closed, Baral unsuccessfully renewed his efforts to
provide information to the Moss Adams auditors. The second
amended complaint sought an injunction to reopen the audit with
Baral’s participation, and to bar Schnitt from interfering with
any corrections Moss Adams might make to its report.” (Baral,
supra, 1 Cal.5th at p. 383, fn. omitted.)
       Baral also requested declaratory relief in the form of a
judicial declaration that he was permitted to submit additional
information to Moss Adams, and Schnitt was not permitted to
exercise his rights as co-manager to prevent the submission of
that additional information to Moss Adams.
       Schnitt filed another anti-SLAPP motion entitled “Special
Motion To Strike Certain Allegations In The Second Amended
Complaint,” seeking to strike all references to the Moss Adams
investigation and audit report as protected activity under the
anti-SLAPP statute, and also as activity protected by the
litigation privilege in Civil Code section 47, subdivision (b). The
trial court denied the motion and we affirmed, concluding that a
special motion to strike under the anti-SLAPP statute may not
result in the striking of particular allegations of protected

                                 6
activity that are asserted as grounds for relief, but must be
addressed to an entire and indivisible cause of action. (Baral v.
Schnitt (2015) 233 Cal.App.4th 1423.) The Supreme Court
reversed on this issue. (Baral, supra, 1 Cal.5th at p. 397.)
       Upon remand, we concluded that the Moss Adams
allegations described protected conduct, and further concluded
that Baral failed to meet his burden of showing he had a
probability of prevailing on those allegations. We therefore
reversed the trial court’s order denying Schnitt’s special motion
to strike, awarded appellate costs to Schnitt, and remanded the
matter for a determination of entitlement to attorney fees under
the anti-SLAPP statute. (Baral v. Schnitt (Feb. 23, 2017,
B253620) [nonpub. opn.].)
       The trial court awarded Schnitt anti-SLAPP attorney fees
in the amount of $279,197.80. Baral appeals this award.
C.     Schnitt’s Answer
       Schnitt answered Baral’s amended complaint and denied
liability, alleging as a separate defense that by agreeing to the
sale of the company and negotiating and executing the
transactional documents, Baral waived any claim arising from
the sale of IQ to Live-It. Schnitt later amended the answer to
clarify that his defense included the allegation that Baral was
estopped from maintaining this action or recovering anything
from Schnitt as a result of his, Baral’s, agreement to sell IQ, and
further that his negotiation and execution of the transactional
documents required to consummate the sale constituted a
ratification of the sale.
       The matter proceeded to trial on Baral’s third amended
complaint, which he later amended a fourth time.

                                 7
D.     Trial
       1.     Rulings in Limine
       Because Baral’s allegations concerning the Moss Adams
report had been stricken, the trial court ruled in limine that
evidence concerning the accuracy of the report was inadmissible,
and factual allegations in connection with it could not serve as a
basis of liability. However, the court also ruled that Baral could
rely on the report to explain his state of mind and agreement to
the sale.
       Schnitt petitioned us for a writ of mandate on this latter
issue, which we denied.
       2.     Testimony
              a.     liability
       At trial, Baral testified that Schnitt’s pre-sale machinations
deprived Baral of the opportunity to receive a position and stock
in the new company after the sale.
       Baral admitted that he signed the closing documents for
the sale of IQ to Live-It, but claimed he did so under duress
because he feared that the other IQ owners would sue him for
disrupting the deal, that his son would go to jail for
embezzlement, or that Schnitt could leak the Moss Adams
findings that he had engaged in irregular transactions.
       However, he was unable to identify any instance in which
Schnitt directly threatened to sue him if he stopped the sale—he
claimed that Schnitt had stated at the owners’ initial pre-sale
meeting, which Baral did not attend, that he would hold Baral
liable if the sale fell through—and admitted that Schnitt had
never threatened to report the embezzlement or release the Moss
Adams Report.

                                 8
                b.   damages
        Baral testified that due to Schnitt’s misconduct, he was
forced to sell the business prematurely, and “if he had his way, he
would never have sold the company” in 2011, and “there are
damages that flow from that.”
                     (1) job and stock theory
        First, Baral testified, he lost an opportunity to see if there
was a place for him in the new organization, although he
admitted he did not know whether a job would have been
available. Baral further admitted that he never asked for a
position with the new company nor for an opportunity to be paid
in stock rather than cash. He testified that the new company
would likely not have needed a chief financial officer (Baral’s role
at IQ) because Live-It “would certainly have somebody at that
level.”
        Second, Baral testified that he lost the opportunity to take
an equity position in the new company post-sale. When asked
whether he “wanted to buy into the new company,” Baral
responded, “I wanted the opportunity to have a discussion . . . .
[¶] . . . [¶] I wanted to be on the same level as David Schnitt. He
got opportunities that I did not. So I just needed and wanted to
have the opportunities to have these kinds of communications to
understand what exactly—who’s Ayala? What are they bringing
to the table. My knees were cut from under me.”
        When asked, “So you wanted the opportunity to have a
conversation, but you’re not sure whether you would have taken
advantage of the opportunity or not?” Baral responded, “That’s a
fair statement.”
        Baral’s damages expert, Kevin Henry, testified over
Schnitt’s objection that if Baral had obtained a job and had been

                                  9
paid for his interest in the company partially in stock, he could
have sold that stock at a profit at some point in the future,
obtaining approximately $3 million more than the $3.6 million he
received from the IQ sale.
       However, Henry acknowledged that he based his
calculations on IQ’s projections prepared in 2010 to forecast what
might happen to the new business after the sale, not on the new
company’s actual post-sale performance, during which the
company’s value declined substantially. He acknowledged that
had he based his calculations on actual post-sale events, Baral
suffered no damages because “he would have gotten less than he
got on the all-cash transaction.”
       Henry acknowledged that IQ’s projections were “quite
preliminary” and not meant to be “definitive,” and when asked,
“Are you expressing an opinion on the reasonableness of those
projections?” he answered, “No.”
                    (2) hold and sell theory
       Baral also claimed that had IQ never been sold to Live-It,
its profitability would have increased, and at some point he could
have sold it for more than the $3.6 million he realized from the
Live-It sale.
       Henry testified, over objection, that he assumed based on a
conversation with Baral that Baral would have been interested in
holding onto IQ, and “selling the business when revenues reached
$30 million.” He testified that if IQ had never been sold to
Live-It, its revenues would have reached $30 million in 2015, and
Baral and IQ’s other owners would have been able to sell IQ for
$100 million.
       Again however, Henry acknowledged that his opinion was
based on IQ’s projections prepared in 2010, and he had made no
“effort to determine the likelihood of the company” actually
“achieving” that valuation and revenue target “in 2015.”

                                10
       Gilbert Santa Maria, Live-It’s executive managing the sale,
testified that Live-It was never interested in hiring Baral or
offering him a stock deal. Santa Maria testified that Live-It
offered stock only to those it was interested in retaining, and only
to keep them invested in the company going forward. When
Sandeep Tandon, another IQ owner, asked to buy stock, Live-It
refused because it had no intention of hiring him.
       Dennis Foster, one of IQ’s owners, testified that a post-sale
job with the new business would have been “challeng[ing]” for
Baral because he “had his own business” in California, “R.C.
Baral & Company,” and “it wasn’t really in the realm of
possibility for him to sort of work for this company” in “the
Philippines.”
       Schnitt testified that Live-It’s efforts to expand the
company post-sale increased costs and reduced quality and
productivity, and by 2016 the business was effectively insolvent,
could not secure a purchase offer, and was going to cease
operations. Baral presented no rebutting evidence.
       In closing argument, Baral’s counsel stated, “We’re not
saying that Mr. Baral was asking for—for a full-time job. We are
not saying that—what we are saying is he deserved a seat at the
table.”
       3.    Jury Instructions
       Schnitt proposed jury instructions on his affirmative
defenses of estoppel, waiver, consent, and ratification. The court
elected to deliver instructions regarding consent and ratification,
but not estoppel or waiver, viewing them to be duplicative.
       The court ultimately instructed the jury that “To succeed in
proving consent, in this case, Mr. Schnitt must prove that Baral
voluntarily consented to the sale of IQ BackOffice and that his

                                 11
consent was not obtained under fraud, duress, or undue
influence.”
       When Schnitt objected to the burden of proof of lack of
duress thus being placed on him, the court overruled the
objection but stated: “I want to make sure I’m clear for the
appellate courts” that Schnitt had the burden of proving a lack of
duress.
       4.    Verdict
       The jury rendered a general verdict in Baral’s favor “for
Breach of Fiduciary Duty and/or Constructive Fraud” and
awarded him $2.5 million in compensatory damages.
       The jury also answered “yes” to a “Special Question”
proposed by Baral asking whether it found by clear and
convincing evidence that Schnitt “acted with malice, fraud or
oppression, or engaged in despicable conduct.”
       5.    Punitive Damages Phase
       In the punitive damages phase, Schnitt’s financial
statement indicated his personal net worth was $3.57 million.
       By a 10-2 verdict, the jury awarded Baral $1 million in
punitive damages.
E.     Post-Trial Motions
       Schnitt moved for a new trial and JNOV. He argued a new
trial was required because the jury’s “rejection of Mr. Schnitt’s
consent defense” was based on “insupportable claims of duress”
that were contradicted by overwhelming evidence that Baral
wanted the sale of IQ to go forward.
       Schnitt moved for JNOV on the ground that Baral failed to
present substantial evidence that Schnitt’s conduct caused him
any harm. He argued there was no evidence that Live-It would
have offered Baral a job, that he would have accepted, that he
wanted to sell IQ when it reached $30 million in revenue, or that

                                12
IQ would have ever reached a point where a sale more favorable
than the sale to Live-It would have occurred.
      The trial court denied Schnitt’s JNOV motion and partially
granted his new-trial motion. It agreed with the jury’s findings
concerning “liability/damages,” but found that a new trial was
warranted on the issue of consent/waiver/ratification because
Schnitt met “his burden of proof” to “demonstrate that [Baral]
legally waived his right to assert his various claims for damages,”
and “the evidence established that [Baral] was not under ‘duress’
when he consented and/or approved/ratified the sale of IQ
BackOffice, LLC.”
      The court further ruled that a partial new trial was
appropriate due to instructional error, finding that the
instruction stating that Schnitt had the burden to prove Baral
was not under duress “may have been in error, since the burden
of proof to demonstrate ‘duress’ may actually have been upon”
Baral.
      The court stated that if the “above-stated limited new trial
order” is deemed “legally improper” on appeal, then Schnitt’s
new-trial motion “is granted in its entirety.”
      Both parties appeal.
                          DISCUSSION
I.    SCHNITT’S APPEAL
      A.     Damages
      Schnitt contends the trial court erred in denying his JNOV
motion because no evidence indicated that Baral suffered any
compensable damages. We agree.
      A motion for JNOV may be brought after a verdict has been
rendered but before judgment has been entered on the verdict.
(§§ 629, 659.) A party is entitled to JNOV “where, viewing the
evidence in the light most favorable to the party securing the

                                13
verdict, the evidence compels a verdict for the moving party as a
matter of law.” (Oakland Raiders v. Oakland-Alameda County
Coliseum, Inc. (2006) 144 Cal.App.4th 1175, 1194.) “In general,
‘ “[t]he purpose of a motion for judgment notwithstanding the
verdict is not to afford a review of the jury’s deliberation but to
prevent a miscarriage of justice in those cases where the verdict
rendered is without foundation.” ’ ” (Ibid.) A motion for JNOV
tests the legal sufficiency of the evidence proffered or presented
by the opposing party. (Elmore v. American Motors Corp. (1969)
70 Cal.2d 578, 583.)
       We review an order denying a JNOV motion for
“substantial evidence—contradicted or uncontradicted—
support[ing] the jury’s conclusion.” (Sweatman v. Department of
Veterans Affairs (2001) 25 Cal.4th 62, 68.) We may not reweigh
evidence or consider witnesses’ credibility. (In re Coordinated
Latex Glove Litigation (2002) 99 Cal.App.4th 594, 606.) Rather,
we view the evidence in the light most favorable to the jury’s
verdict, disregard conflicting evidence, and draw all legitimate
inferences in favor of the verdict. (Webb v. Special Electric Co.,
Inc. (2016) 63 Cal.4th 167.)
       “Constructive fraud is any breach of duty that, without
fraudulent intent, gains an advantage to the person at fault by
misleading another to his prejudice.” (Tindell v. Murphy (2018)
22 Cal.App.5th 1239, 1250; see also Civ. Code, § 1573.) “The
elements of a cause of action for breach of fiduciary duty are the
existence of a fiduciary relationship, breach of fiduciary duty, and
damages.” (Oasis West Realty, LLC v. Goldman (2011) 51 Cal.4th
811, 820.) Both torts require that the plaintiff suffer injury due
to the defendant’s breach of duty.
       “[D]amages which are speculative, remote, imaginary,
contingent or merely possible cannot serve as a legal basis for

                                14
recovery.” (Mozzetti v. City of Brisbane (1977) 67 Cal.App.3d 565,
577.)
       Here, Baral contends he suffered damages due to Schnitt’s
conduct resulting in Baral losing two opportunities: (1) The
opportunity to receive a position and stock in the new company
after Live-It bought IQ; and (2) the opportunity to hold onto his
interest in IQ and sell it at a later date for more than he realized
from the sale to Live-It. The first theory of damages assumed
that Baral participated fully in the 2011 transaction in the same
manner as Schnitt. The second assumed the 2011 IQ sale did not
occur until 2015.
             1.     Lost Job and Stock Opportunity
       Baral’s first claim of injury is less clear on appeal than it
apparently was at trial. At trial he claimed he was injured by
loss of earnings and profits attributable to Schnitt preventing
him from negotiating for employment and an ownership interest
subsequent to the sale of IQ to Live-It.
       Baral’s hope to derive such earnings and profits depended
on the happening of two major contingencies: (1) Live-It’s
willingness to offer Baral employment on such terms as he would
accept; and (2) Live-It’s willingness to offer Baral a stock package
on terms he would accept.
       No evidence supports either contingency. Baral himself
testified he did not know whether he would have accepted
employment with or an ownership interest in Live-It, but he
wanted the opportunity to discuss those matters with Live-It.
Henry testified that based on an unspecified and nonspecific
conversation he had with Baral, he assumed Baral would accept
stock and a position with Live-It post-sale, but an expert opinion
based on a foundationless assumption is speculative, and has no
evidentiary value. (Bushling v. Fremont Medical Center (2004)
117 Cal.App.4th 493, 510.)

                                 15
       On the other hand, Gilbert Santa Maria, Live-It’s executive
who managed the IQ purchase, testified Live-It was never willing
to hire Baral or offer him stock in the new entity. And Dennis
Foster, one of IQ’s owners, testified that a post-sale job with the
new business would have been unfeasible for Baral because he
had his own business in California, and the new entity would be
based in the Philippines.
       Where no evidence suggests a contingency is probable,
expectations based on the contingency can only be speculative. A
plaintiff may not recover on a theory of speculative harm.
(Jordache Enterprises, Inc. v. Brobeck, Phleger & Harrison (1998)
18 Cal.4th 739, 743 [“nominal damages, speculative harm, and
the mere threat of future harm are not actual injury”]; see
Ramsey v. Penry (1942) 53 Cal.App.2d 773, 778 (Ramsey)
[“speculative damages may not be recovered”].)
       Ramsey is directly on point. There, the plaintiff created a
corporation and contracted with the defendants to sell at least
$15,000 worth of the corporation’s shares to third parties. When
defendants wrongfully failed to do so the corporation essentially
failed, and plaintiff lost the opportunity to receive shares in the
corporation himself. (Ramsay, supra, 53 Cal.App.2d at p. 778.)
However, at trial, the evidence established there was no buyer
willing to purchase the stock. (Id. at pp. 778-779.) The court
reversed a judgment against the defendants, holding that even
had they been faithful to the company, “what profits plaintiff
might have made are speculative and uncertain.” (Id. at p. 780.)
       Here, there is no substantial evidence in the record to show
that Baral could have realized any earnings or profit from
Live-It, because even had Schnitt been faithful to his fiduciary
duties, no evidence suggests Live-It was willing to hire Baral or
grant him an interest in the company going forward.

                                16
       Baral argues Ramsey is inapposite because there the
company had no purchasers because it was a new, unknown
entity, whereas here IQ “was an established business with a
proven track record of success.” Baral misses the point. Whether
IQ was established or not, both Baral and the Ramsey company
shared a key characteristic: They had no offers. Evidence of
damage resulting from the wrongful deprivation of an improbable
offer is too speculative and uncertain to support a judgment.
       On appeal, Baral shifts somewhat from the lost-profits
theory presented at trial, arguing that “[w]hether the buyer
would have offered Baral a job or stock or whether Baral would
have accepted any offers from the buyer is irrelevant,” because he
“was harmed in not being offered the same opportunities as
Schnitt to obtain stock and/or employment with the resulting
company that acquired IQ LLC’s assets.” (Italics added.) But no
evidence suggests any such opportunity existed.
       Baral relies on Bardis v. Oates (2004) 119 Cal.App.4th 1 for
the proposition that in an action for fraud and breach of fiduciary
duty, lost-opportunity damages may be recovered even where it
turns out no opportunity existed. The argument is without merit.
In Bardis, the managing partner of a partnership marked up
invoices for goods and services purchased by the partnership, and
funneled the markup to himself. (Id. at p. 11.) On appeal the
partner argued the partnership suffered no damages because had
he asked the partners to be reimbursed, they would have been
duty bound to agree that the markup was reasonable. (Id. at p.
13.) Bardis held that a partner will not “be absolved from
committing fraud and breach of fiduciary duty because of what
might have occurred had [the partner] acted properly under a
hypothetical set of circumstances.” (Ibid.) The partner was
“prohibited from engaging in self-dealing in any way,” and was
therefore obligated to replace the markup. (Ibid.)

                                17
       Bardis is inapposite. There, the court held only that it was
no defense in a self-dealing case for a partner to claim his self-
dealing was reasonable, because partnership law prohibited him
from engaging even in reasonable self-dealing. The court made
no blanket statement about hypothetical circumstances being
always irrelevant. Here, in seeking lost earnings and profits
“attributable to” a lost opportunity, it is Baral, not Schnitt, who
relies on a hypothetical set of circumstances—that the
opportunity he bemoans actually existed, i.e., that Live-It would
have made profitable offers to him had Schnitt given him the
chance to negotiate for them. As the proponent for such a
theory—upon which, under the rule of Jordache, Mozzetti, and
Ramsey, his recovery depended—Baral bore the burden of
producing reasonably reliable evidence that the circumstances
would manifest. As discussed above, he produced no such
evidence. If any pertinent rule can be taken from Bardis, it is
that no tenable position can be founded on a phantom occurrence.
             2.     Future Sale Opportunity
       Baral also claims he was damaged by loss of the
opportunity to wait until sometime after 2011 to sell IQ, when he
could sell his interest in the company for more than the $3.6
million he realized from the sale to Live-It. He speculates the
time to sell would have been when IQ generated $30 million in
revenue, which IQ projected would occur by 2015.
       However, no admissible evidence suggested that IQ could
have ever generated $30 million in revenue, that Baral would
have wanted to sell IQ when it generated that much revenue,
that Baral could have persuaded the other owners either to wait
that long (or sell even if they did wait), or that Baral could have
found a buyer offering a more favorable price than he received
from Live-It.

                                18
       Henry assumed many of these facts based on an
unspecified conversation with Baral, but Baral himself testified
to none of them. An expert’s factual assumption does not itself
constitute substantial evidence of any case-specific fact. (People
v. Sanchez (2016) 63 Cal.4th 665, 686; Hongsathavij v. Queen of
Angels/Hollywood Presbyterian Medical Center (1998) 62
Cal.App.4th 1123, 1137.)
       Although Henry relied on IQ’s own pre-sale projections that
it would reach $30 million in revenue by 2015, he testified the
projections were “quite preliminary” and “meant to not be
definitive, but rather a starting point,” and expressly refused to
declare they were reasonable.
       Projected lost profits from a business are generally “ ‘not
recoverable for the reason that their occurrence is uncertain,
contingent and speculative,’ ” with the exception that
“ ‘anticipated profits dependent upon future events are allowed
where their nature and occurrence can be shown by evidence of
reasonable reliability.’ ” (Sargon Enterprises, Inc. v. University of
Southern California (2012) 55 Cal.4th 747, 774 (Sargon).)
       To be reasonably reliable, evidence of projected lost profits
must be “tangible . . . with a ‘substantial and sufficient factual
basis’ rather than by mere ‘speculation.’ ” (Kids’ Universe v.
In2Labs (2002) 95 Cal.App.4th 870, 885 [expert testimony that
store flooding caused $50 million in lost profits lacked reasonable
certainty where expert speculated new Web site would have
generated substantial sales]; see also Sargon, supra, 55 Cal.4th
at p. 775 [lost profits that are uncertain, hypothetical and
speculative are nonrecoverable]; Greenwich S.F., LLC v. Wong
(2010) 190 Cal.App.4th 739, 766 [evidence of lost profits from
breach of property sale agreement with reasonable certainty];
Parlour Enterprises, Inc. v. Kirin Group, Inc. (2007) 152
Cal.App.4th 281, 288-291 [same]; Vestar Development II, LLC v.

                                 19
General Dynamics Corp. (9th Cir. 2001) 249 F.3d 958, 962
[dismissing claim based on future profits that plaintiff “hoped to
earn from the shopping center it had planned to build on the
parcel it was attempting to buy”; there was “no way to evaluate,
other than through speculation, the profits that it might have
made”].)
       Here, even if there were evidence that Baral wanted to sell
IQ once it generated $30 million in revenues, and could both
persuade the other owners to do so and find a buyer, no
reasonably reliable evidence supported his claim that such
revenues were achievable. Only Henry, Baral’s expert, relied on
IQ’s projections to anticipate such revenues, and he declined to
opine that the projections were reasonable.
       In sum, no admissible evidence suggested that Baral would
or could have sold IQ for more than the $3.6 million he received.
       Therefore, his claim of damages under either of his theories
fails as a matter of law, and a judgment for Schnitt should have
been entered.
       B.    Other Contentions
       Schnitt argues that JNOV should have been granted also
because Baral’s claim of duress fails as a matter of law. Given
our holding above, we need not reach this issue.
       Schnitt also argues that the award of punitive damages
must be vacated because the jury made no finding that he acted
with oppression, fraud or malice. We need not reach this issue
either because Baral’s claim for punitive damages fails for lack of
predicate compensatory damages. (See Kizer v. County of San
Mateo (1991) 53 Cal.3d 139, 147 [“actual damages are an absolute
predicate for an award of exemplary or punitive damages”].)
       C.    New Trial
       Schnitt argues that absent a full JNOV, we must reverse
the partial denial of his motion or new trial and remand the

                                20
matter for a full new trial. Given our holding above, this
argument is moot.
II.    BARAL’S APPEAL
       Baral contends the court erred in ordering a partial new
trial and in awarding Schnitt anti-SLAPP fees. Given our
holding above, Baral’s appeal of the order granting a partial new
trial is moot.
       A.    Anti-SLAPP Fees
       Baral contends the trial court abused its discretion in
awarding Schnitt anti-SLAPP attorney fees. We disagree.
       A “prevailing defendant on a special motion to strike shall
be entitled to recover his or her attorney’s fees and costs.”
(§ 425.16, subd. (c)(1).) “[A]ny SLAPP defendant who brings a
successful motion to strike is entitled to mandatory attorney
fees.” (Ketchum v. Moses (2001) 24 Cal.4th 1122, 1131; see also
Bel Air Internet, LLC v. Morales (2018) 20 Cal.App.5th 924, 946
[a defendant that succeeds “in full on their motion to strike” is a
prevailing party for purposes of anti-SLAPP attorney fees].) “[A]
party who partially prevails on an anti-SLAPP motion must
generally be considered a prevailing party unless the results of
the motion were so insignificant that the party did not achieve
any practical benefit from bringing [it]”—a determination that
“lies within the broad discretion of a trial court.” (Mann v.
Quality Old Time Service, Inc. (2006) 139 Cal.App.4th 328, 340
(Mann), italics added.)
       Here, Schnitt moved to strike Baral’s claims to the extent
he sought to impose liability based on the preparation of the Moss
Adams fraud report. We held these allegations would be stricken
because they were subject to the litigation privilege. (Baral v.
Schnitt, supra, B253620.) Schnitt thus obtained all the relief he

                                21
sought. Therefore, pursuant to our Supreme Court’s holding in
Ketchum v. Moses, Schnitt was the prevailing party as a matter
of law, and entitled to attorney fees. (Ketchum v. Moses, supra,
24 Cal.4th at p. 1131.)
       Baral argues Schnitt was not the prevailing party because
his victory on the anti-SLAPP motion garnered him no practical
benefit, as the jury entered a $3.5 million verdict against him.
We disagree.
       First, Schnitt wholly prevailed on his anti-SLAPP motion,
making him the prevailing party as a matter of law and
rendering the practical benefit test unnecessary. (Bel Air
Internet, LLC v. Morales, supra, 20 Cal.App.5th at p. 946.)
Second, even were we to employ the practical benefit test, by
eliminating Baral’s claims based on the Moss Adams report,
Schnitt achieved the practical benefit of “narrow[ing] the scope of
the lawsuit, limiting discovery, reducing potential recoverable
damages, and altering the settlement posture.” (Mann, supra,
139 Cal.App.4th at p. 340.) That Baral eventually prevailed in
the litigation is irrelevant to apportionment of anti-SLAPP
attorney fees. A contrary rule would expand anti-SLAPP
litigation beyond all reason, requiring a mini-trial after each
main trial to adjudicate whether the defendant’s achievement
conveyed a “practical” benefit.

                                22
                           DISPOSITION
       The judgment is reversed and the matter remanded, and
the trial court is ordered to enter judgment in favor of Schnitt.
The order granting Schnitt anti-SLAPP fees is affirmed. Schnitt
is to recover costs on appeal.
       NOT TO BE PUBLISHED

                                          CHANEY, J.

We concur:

             ROTHSCHILD, P. J.

             BENDIX, J.

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