Court Opinion

ID: 3198581
Source: CourtListenerOpinion
Date Created: 2016-04-27 21:02:16.832089+00
Date Added: 2024-06-11T14:50:20.845573
License: Public Domain

Filed 4/27/16 Dahan v. JPMorgan Chase Bank CA2/8
                  NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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
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              IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                                     SECOND APPELLATE DISTRICT

                                                 DIVISION EIGHT

JEROME DAHAN,                                                        B260329

         Plaintiff and Appellant,                                    (Los Angeles County
                                                                     Super. Ct. No. BC482099)
         v.

JPMORGAN CHASE BANK, N.A. et al.,

         Defendants and Respondents.

         APPEAL from a judgment of the Superior Court of Los Angeles County.
Michael L. Stern, Judge. Affirmed.

         Law Offices of Gary Freedman and Gary Freedman; Brown George Ross, Peter
W. Ross, Ira Bibbero and Christian K. Wrede for Plaintiff and Appellant.

         Greenberg Traurig, Scott D. Bertzyk, Karin L. Bohmholdt and Nicholas A.
Insogna for Defendants and Respondents.

                                __________________________________
       Jerome Dahan sued JPMorgan Chase Bank, N.A., J.P. Morgan Securities, LLC,
Dale Reed, and Scott Keifer (collectively, JPMorgan) in connection with JPMorgan’s
management of his brokerage accounts. A jury found in favor of JPMorgan and Dahan
contends various errors warrant reversal of the judgment. We affirm the judgment.
                                         FACTS
       Dahan is a designer of premium jeans. He amassed a $140 million fortune
primarily by selling his ownership interest in two companies – 7 for all mankind and
Citizens for Humanity. Dahan enlisted the help of Gary Freedman, his attorney and
business partner, to manage his money. Upon Freedman’s suggestion, Dahan chose
JPMorgan to manage his investments in 2005. Dahan’s primary goal was to protect his
principal and he was not concerned with taking risks with his money to earn a higher
return. To that end, he opened two types of accounts at JPMorgan, a brokerage account,
for which he made the investment decisions, and a managed account, for which
JPMorgan made the investment decisions. Dahan and Freedman directed JPMorgan to
hold a small amount of cash in the managed account, but place the bulk of it in shorter
term bonds. The managed account was initially handled by James Walker at JPMorgan.
Sometime afterwards, Dahan, along with Freedman, agreed to move the funds to longer
term bonds with an average duration of seven years to get a higher interest rate.
       Dahan sued JPMorgan on April 3, 2012, after he became unhappy with how
JPMorgan handled his managed account. In the operative second amended complaint,
Dahan sought damages for fraud, breach of fiduciary duty, negligence and breach of
contract. Dahan alleged JPMorgan exceeded the mandate he gave them by purchasing
seven bonds for the managed account with extended maturation dates and variable rates,
which resulted in an approximate $2 million loss when they were sold in 2012. Dahan
also alleged JPMorgan engaged in self-dealing by purchasing bonds from its own
inventory or which it underwrote. This conduct, he alleges, was contrary to assurances
made to Dahan and Freedman that JPMorgan would only make money from the
administrative fees levied on his account and that JPMorgan entities would not be on both

                                             2
sides of any transactions. According to Dahan, this self-dealing created a conflict of
interest which resulted in a breach of contract and fiduciary duty. At trial, Dahan
presented testimony from Ben Konner, who became the Global Investment Specialist on
his managed account in 2008. Konner testified he believed it was “not okay” to buy
bonds for a client’s managed account out of JPMorgan’s inventory.
       Dahan admitted at trial he did not read any of the account documents he signed
and only reviewed the statements sent by JPMorgan once every six months, but did not
understand them. He also did not recall in any detail his meetings or conversations with
JPMorgan representatives. Instead, he relied on Freedman to advise him.
       Freedman testified at length about his contacts with JPMorgan. Freedman
participated in an initial conference call with Lynn Barbara, Walker, Keifer and Nancy
Shepherd on January 31, 2005, to discuss investing approximately $30 million Dahan had
realized from the sale of 7 for All Mankind. Dahan did not participate in this call.
JPMorgan advised Freedman what it would charge to hold the account, depending on
how much of the $30 million Dahan chose to invest with them. Walker also
recommended purchasing shorter-term bonds due to the state of the bond market at the
time. Several months later, Dahan, Freedman, and Tony Millar, the Chief Financial
Officer of Citizens of Humanity, met with Keifer and Reed. Reed told Dahan, Millar and
Freedman he would manage the relationship and oversee the various investments, loans,
and other accounts Dahan had with JPMorgan.
       Towards the end of 2005, Freedman notified Reed and Keifer that Dahan
anticipated receiving $100 million from the sale of part of Citizens of Humanity.
Freedman believed they were “anxious to present to Jerome alternative investment ideas
where they could make more money than the fee that they were earning from just simply
managing a fixed income account.” Dahan, however, decided he did not want to take any
risks with his money and decided to keep it in either cash or fixed income securities with
a definite cash flow. That meant JPMorgan would purchase bonds with an average
maturity of seven years. Dahan’s investment goals were set forth in a document called

                                             3
the Discretionary Portfolio Mandate. The mandate identified the goal of the account to
be capital preservation and the risk profile to be conservative. Freedman testified he and
Dahan were happy with how JPMorgan was handling Dahan’s money in 2005 and 2006.
As a result, they decided to allow JPMorgan to manage all of Dahan’s money, believing
that Dahan would be a “really important client” by having all of his money in one place.
The proceeds from the sale of Citizens of Humanity were eventually deposited with
JPMorgan in January 2006.
       In 2007, JPMorgan purchased seven bonds with extended maturity dates and
variable interest rates. These are the bonds at issue in the litigation. Two of the bonds
were purchased from an inventory of saleable securities held by J.P. Morgan Securities
and it received payment in connection with each of these two purchases. The other five
bonds were purchased from a public offering for which J.P. Morgan Securities served as
the underwriter and received an underwriting fee. On April 30, 2009, Dahan and
Freedman were informed that Walker was leaving JPMorgan.
       In October 2011, Freedman and Dahan met with a private banking team from
Wells Fargo to discuss possibly allowing Wells Fargo to manage $15 million of Dahan’s
money. At this meeting, Wells Fargo identified the seven bonds which did not fall within
the parameters of Dahan’s conservative investment goals. In particular, the bonds had
variable interest rates and the maturity dates were very far in the future, which appeared
inconsistent with Dahan’s requirement that the bonds mature in one to seven years with
fixed amounts paid on each coupon date.
       When Dahan terminated his relationship with JPMorgan at the end of 2011, he
again sought Freedman’s advice about what to do with his assets. Freedman suggested
he try Bessemer Trust. After the assets were transferred, Freedman advised Bessemer
Trust to use its discretion in deciding which bonds to sell and which to keep. Bessemer
sold the seven bonds at issue at a loss of approximately $1.7 million.

                                             4
       At trial, Freedman admitted he did not review the agreements between Dahan and
JPMorgan when the initial accounts were opened in 2005. Freedman also admitted he
received documents from JPMorgan showing the disputed bonds were in Dahan’s
account, but did not notice the bonds’ duration and did not ask any questions about them.
He recalled Goldman Sachs, in a 2009 sales pitch, attempting to draw his attention to the
disputed bonds, but he failed to understand their significance at the time. Dahan also
presented testimony from adverse witnesses employed by JPMorgan, who acknowledged
Dahan was owed fiduciary duties in connection with his account.
       JPMorgan’s defense centered on Dahan’s admissions at trial that JPMorgan
fulfilled his objectives by protecting his principal and making him $20 million in profit
on top of that. According to JPMorgan, its investment strategy fulfilled Dahan’s capital
preservation goal because it diversified his bond portfolio to take into account interest
rate fluctuations. JPMorgan also highlighted the discretion Dahan granted them to
manage his account. JPMorgan admitted into evidence Dahan’s account documents,
which contained various disclosures regarding JPMorgan’s discretion and duties to
Dahan. In the account application, Dahan agreed to review and immediately notify
JPMorgan of any issues. He also agreed to read the General Terms for Accounts and
Services (General Terms) and that the General Terms comprised a part of the agreement
between the parties.
       Under the General Terms, a client authorized JPMorgan “to act on my behalf even
though you or any Morgan Affiliate may have a potential conflict of duty or interest in a
transaction. This includes the fact that you or any Morgan Affiliate may: . . . as
underwriter, broker, dealer or placement agent with respect to securities; . . . earn fees
and profits from any of the above-listed activities . . . The foregoing roles, interests and
separate compensation may be applicable to privately placed investments as well as other
securities or instruments. [¶] . . . [¶] You are authorized to arrange for the execution of
transactions . . . by means of brokers or other financial organizations of your choosing,
including Morgan Affiliates. In addition, when you buy or sell securities or other

                                              5
property for which you or another Morgan Affiliate acts as a dealer or underwriter, you
may buy or sell as principal . . . from or to either yourself or such other Morgan
Affiliates, or from or to a member of an underwriting syndicate of which you or a
Morgan Affiliate is a member.”
       The General Terms further disclosed that as to municipal bonds, JPMorgan “or
Morgan Affiliates may hold a position or act as market maker in the financial instruments
of any issue I may invest in, or act as underwriter, placement agent, advisor, or lender to
an issuer.” In his closing remarks, JPMorgan’s trial counsel emphasized Dahan’s
admission that he did not care whether a bond was underwritten by JPMorgan if it was “a
good bond” and that he did not have a problem with purchasing long term bonds.
       JPMorgan moved for summary judgment on July 19, 2015, on the grounds it had a
complete defense to Dahan’s causes of action and there was no triable issue of material
fact to support his claims for punitive damages. The trial court granted summary
adjudication on the punitive damages issue, finding there was no clear and convincing
evidence of malice, oppression or fraud to support punitive damages. On all other
grounds, the trial court found triable issues of material fact.
       Additionally, the trial court granted JPMorgan’s motion for nonsuit on the fraud
cause of action at the conclusion of Dahan’s case in chief. As a result, the jury was asked
to decide facts relating only to Dahan’s breach of contract and breach of fiduciary
claims.1 The jury returned a special verdict for JPMorgan, finding, among other things,
that neither JPMorgan Chase Bank, N.A. nor J.P. Morgan Securities, LLC did anything
that the contract prohibited them from doing. The jury also found each of the defendants
owed Dahan a fiduciary duty, but that Dahan did not prove any of the defendants
breached his or its duty of loyalty. Judgment was entered October 2, 2014, and Dahan
timely filed his notice of appeal on November 25, 2014.

1
       Dahan dismissed his negligence claim before trial.
                                               6
                                      DISCUSSION
       Dahan takes issue with several of the trial court’s rulings in this case, contending
each warrants reversal of the judgment. Chief among them is the trial court’s refusal to
judicially notice a brochure issued by a JPMorgan affiliate – J.P. Morgan Investment
Management Inc. (JPMIM). Dahan asserts this brochure was a “smoking gun” that
would have allowed the jury to find in his favor because it contained admissions by
JPMorgan about its fiduciary duties to its clients. Dahan also contends the trial court
erred when it refused to instruct the jury on informed consent or waiver and when it
issued its rulings on summary adjudication and nonsuit. We address each of these issues
in turn and find none of them warrant reversal.
I.     Judicial Notice of Form ADV Part 2A
       Dahan contends the trial court erred when it denied his request to judicially notice
a “smoking gun” document which “contained damning admissions against interest” by
JPMorgan. According to Dahan, the document, Form ADV Part 2A, described
JPMorgan’s own standards with respect to its fiduciary duties and disclosure obligations
in connection with self-dealing. Dahan contends it showed JPMorgan acted outside of its
own standards.
       A. Proceedings Below
       Dahan’s attorney found and printed Form ADV Part 2A from the Securities and
Exchange Commission (SEC) website. Form ADV Part 2A is a brochure issued by
JPMIM and is dated October 18, 2013. JPMIM is not a party to this action.2 In it,
JPMIM describes the advisory services it provides to its clients, including “discretionary
and non-discretionary investment management services and products to institutional

2
      Reed testified it was his understanding JPMIM was the business unit that actually
made the decisions about buying specific bonds for Dahan’s account and was obligated to
JPMorgan Chase Bank to comply with Dahan’s investment objectives. Benn Konner, a
managing director at JPMorgan Chase Bank, testified JPMIM provided investment
management services to Dahan’s account.
                                            7
clients and individual investors. In performing investment advisory services for its
clients, JPMIM acts as a fiduciary.” These fiduciary duties include:
          “Obligations to disclose to you all material conflicts between our interests and
       your interests.
          “If we or our affiliates receive additional compensation from you or a third-
       party as a result of our relationship with you, we must disclose that to you.
          “We must obtain your informed consent before engaging in transactions with
       you for our own account or that of an affiliate or another client when we act in an
       advisory capacity.”
Form ADV Part 2A further stated JPMIM’s Code of Ethics required it to “avoid any
actual or potential conflict of interest.” It further stated JPMIM was “guided by fiduciary
principles in the management of conflicts of interest.”
       Dahan filed a request to take judicial notice of the form on the grounds it was a
document filed with the SEC and under Evidence Code section 452, subdivision (h).
Both requests were denied. Dahan sought to admit it several more times during trial, but
was denied each time. However, he was permitted to ask JPMorgan witnesses if they
knew of or had seen the document before. The trial court ruled he would only then be
allowed to question them on the contents of Form ADV Part 2A once this foundation was
laid. None of the JPMorgan witnesses testified they had seen or knew about the
document. As a result, Dahan was unable to admit the document into evidence.
       B. Legal Standard
       The purpose of judicial notice is to expedite the production and introduction of
otherwise admissible evidence. (Mozzetti v. City of Brisbane (1977) 67 Cal. App. 3d 565,
578.) Evidence Code section 451 sets forth the matters that a trial court is required to
judicially notice, including “[f]acts and propositions of generalized knowledge that are so
universally known that they cannot reasonably be the subject of dispute.” (Evid. Code,
§ 451, subd. (f).) Evidence Code section 452 sets forth the matters a trial court has
discretion to judicially notice, including “[f]acts and propositions that are not reasonably

                                              8
subject to dispute and are capable of immediate and accurate determination by resort to
sources of reasonably indisputable accuracy.” (Evid. Code, § 452, subd. (h).)
       In either case, the matter to be judicially noticed must be relevant, and is subject to
the rules of privilege and the qualifications under Evidence Code section 352. (Evid.
Code, § 454, subd. (a)(2).) Section 352 permits the exclusion of otherwise relevant
evidence if the trial court determines its probative value is substantially outweighed by
the probability of undue consumption of time, or prejudice or confusion. We review the
trial court’s denial of Dahan’s request for judicial notice for an abuse of discretion.
(Scott v. JPMorgan Chase Bank, N.A. (2013) 214 Cal. App. 4th 743, 753-754.)
       C. Analysis
       Dahan contends Form ADV Part 2A was relevant because it included “admissions
involving J.P. Morgan’s representations as to how . . . Mr. Dahan’s account would be
managed; J.P. Morgan’s subjective understanding of how Mr. Dahan’s account should be
managed; the characteristics of conflicts of interest; and J.P. Morgan’s obligations with
respect to disclosures and informed consent where conflicts of interest arose.” According
to Dahan, “J.P. Morgan’s Form ADV Part 2A was not just relevant; it was the ‘smoking
gun’ in this case because it directly contradicted Defendants’ characterization of their
fiduciary duties and disclosure obligations in connection with self-dealing and show[ed]
that Defendants failed to comply with J.P. Morgan’s own published standards with
respect to the management of investment accounts.”
       We fail to see how Form ADV Part 2A, issued by JPMIM in 2013, is relevant to
Dahan’s claims against JPMorgan for transactions occurring in 2007. Contrary to
Dahan’s contention, Form ADV Part 2A did not contain any representations to Dahan as
to how his account would be managed. The brochure could not have been given to him
since it is dated one year after he terminated his relationship with JPMorgan. Even if we
agree that JPMIM’s statements in Form ADV Part 2A can be attributed to the JPMorgan
entities Dahan sued (JPMorgan Chase Bank and J.P. Morgan Securities), we do not see
how JPMorgan can be retroactively held to these statements.

                                              9
       The Supreme Court’s analysis in Mangini v. R. J. Reynolds Tobacco Co. (1994) 7
Cal. 4th 1057 (Mangini), overruled on other grounds in In re Tobacco Cases II (2007) 41
Cal. 4th 1257, 1276, is instructive. In Mangini, the court refused to take judicial notice of
a letter from a number of state attorneys general and a newspaper account of that letter.
(Mangini, supra, 7 Cal.4th at p. 1065.) The court reasoned, “[a] letter by persons seeking
repeal of a statute, written long after its enactment, is irrelevant to the interpretation of
that statute. Moreover, the existence of the newspaper article is irrelevant, and the truth
of its contents is not judicially noticeable.” (Id. at p. 1064.) Dahan likewise urges us to
take judicial notice of irrelevant statements in a form filed with a government body “long
after” the disputed transactions occurred. The trial court did not abuse its discretion in
refusing to take judicial notice of Form ADV 2A.
       In any case, the trial court admitted a similar document entitled, “J.P. Morgan
Asset Management Conflicts of Interest Policy.” This policy document identified a
conflict of interest “if we are providing a service and, beyond that, we or another member
of our JPMC Group (an ‘Affiliate’) may have a material interest, relationship or
arrangement in the transaction or product or service[.]” In situations where there is a
conflict, the document identified certain practices and procedures to “avoid material risk
of damage to your interests” including disclosure, information barriers, separation of
functions and declining to act. Dahan was permitted to question witnesses about the
statements in this document as well as their understanding of their fiduciary and
disclosure obligations to clients. In addition, the jury was adequately instructed on the
elements of a breach of fiduciary claim and the obligations of a fiduciary. Accordingly,
any error resulting from the refusal to judicially notice Form ADV 2A was harmless.
(Aquila, Inc. v. Superior Court (2007) 148 Cal. App. 4th 556, 569.)
II.    Instructional Error
       At trial, Dahan requested two jury instructions involving informed consent and
waiver, which were rejected by the trial court. Dahan contends on appeal, “it cannot be
denied that the jury would have been more likely to reject Defendants’ exculpatory view

                                               10
of the General Terms Document and scrutinize J.P. Morgan’s duties, conflicts and
disclosures more closely – and, therefore, ‘might have drawn different inferences more
favorable’ to Mr. Dahan – had proper instruction as to waiver, informed consent or both
been provided.” We are not persuaded.
        It is well established that a party is entitled upon request to correct
nonargumentative instructions on every theory of his case which is supported by
substantial evidence. (Rosenfeld v. Abraham Joshua Heschel Day School Inc. (2014) 226
Cal. App. 4th 886, 898.) However, “[a] party is not entitled to have the jury instructed in a
particular phraseology and may not complain on the ground that his requested
instructions are refused if the court correctly gives the substance of the law applicable to
the case.” (Hyatt v. Sierra Boat Co. (1978) 79 Cal. App. 3d 325, 335.) “Instructions
should state rules of law in general terms and should not be calculated to amount to an
argument to the jury in the guise of a statement of law. [Citations.] Moreover, it is error
to give, and proper to refuse, instructions that unduly overemphasize issues, theories or
defenses either by repetition or singling them out or making them unduly prominent
although the instruction may be a legal proposition. [Citations.]” (Fibreboard Paper
Products Corp. v. East Bay Union of Machinists (1964) 227 Cal. App. 2d 675, 718.)
Finally, “[e]rror cannot be predicated on the trial court’s refusal to give a requested
instruction if the subject matter is substantially covered by the instructions given.
[Citations.]’” (Id. at p. 719; see Hyatt v. Sierra Boat Co., supra, 79 Cal. App. 3d 325,
335.)
        “A judgment may not be reversed for instructional error in a civil case ‘unless,
after an examination of the entire cause, including the evidence, the court shall be of the
opinion that the error complained of has resulted in a miscarriage of justice.’ (Cal. Const.,
art. VI, § 13.) . . . [¶] Instructional error in a civil case is prejudicial ‘where it seems
probable’ that the error ‘prejudicially affected the verdict.’ [Citations.]” (Soule v.
General Motors Corp. (1994) 8 Cal. 4th 548, 580 (Soule).) “Thus, when deciding
whether an error of instructional omission was prejudicial, the court must also evaluate

                                               11
(1) the state of the evidence, (2) the effect of other instructions, (3) the effect of counsel's
arguments, and (4) any indications by the jury itself that it was misled.” (Id. at pp. 580-
581, fn. omitted.) “The propriety of jury instructions is a question of law that we review
de novo. [Citation.]” (Cristler v. Express Messenger Systems, Inc. (2009) 171
Cal. App. 4th 72, 82.)
       A. Informed Consent
       At trial, Dahan sought to advise the jury “‘[i]nformed consent’ requires the
fiduciaries to disclose to their client or his representatives all material facts that they
know, have reason to know, or should know would reasonably affect their client or his
representatives’ judgment, unless the client has manifested that such facts are already
known by him or that he does not wish to know them.”3 The proferred instruction was
part of an instruction describing fiduciary duties in general. It supported Dahan’s theory
at trial that JPMorgan was required to seek consent from Dahan before the transactions
took place.
       The trial court refused the instruction, and instead gave the standardized CACI
instructions on fiduciary duties: “An investment advisor owes what is known as a
fiduciary duty to its client . . . [¶] . . . Such a relation ordinarily arises where a
confidence is reposed by one person in the integrity of another, and in such a relation the
party in whom the confidence is reposed, if he voluntarily accepts or assumes to accept

3
       The instruction quotes from section 8.06(1)(a)(ii) of the Restatement Third of
Agency, which describes the duties incumbent on an agent in obtaining the principal’s
consent. JPMorgan suggests Dahan’s trial counsel withdrew his request for this special
instruction during his discussion with the trial court about the verdict form and jury
instructions by stating: “I believe we composed a special instruction . . . But we’re
happy to accept the Wolf language.” It is unclear from the portion of the record cited,
however, whether the “special instruction” referenced by Dahan’s trial counsel
specifically referred to the informed consent instruction at issue here or to a different
portion of the jury instructions relating to fiduciary duties. Dahan fails to address this
point in his briefing. We decline to rely on this brief and vague declaration to find the
instruction was withdrawn.

                                               12
the confidence, can take no advantage from his acts relating to the interest of the other
party without the latter’s knowledge or consent.”4
       The trial court further instructed the jury on the elements to a breach of fiduciary
duty claim found in CACI 402, stating in pertinent part Dahan had to prove:
              “2. That [JPMorgan] knowingly acted against Jerome Dahan’s interests and
       either (1) acquired a material benefit in connection with transactions conducted by
       [JPMorgan] on behalf of Jerome Dahan; or (2) engaged or caused J.P. Morgan
       Securities, LLC s to engage in transactions with Jerome Dahan’s managed account
       without providing full disclosure to Jerome Dahan or his agent about the
       transactions;
              “3. That Jerome Dahan or his agent did not give informed consent to the
       conduct of [JPMorgan].”
We find these instructions satisfactorily presented Dahan’s theory of the case to the jury.
       Nevertheless, Dahan contends the general instructions given by the trial court
“did nothing to ‘instruct in specific terms’ as to the type of disclosure and conduct
required for informed consent.” The California Supreme Court in Soule is instructive on
this issue. There, the plaintiff was injured in a car accident. (Soule, supra, 8 Cal.4th at
p. 557.) She sued General Motors (GM), alleging she suffered enhanced injuries to her
ankles as a result of defects in the car’s design. GM denied any design defect and argued
the plaintiff’s injuries were a result of the force of the collision. At trial, GM attempted
to show that the plaintiff was not wearing her seatbelt and had locked her legs in reaction
to the imminent collision, which caused her ankles to absorb the force of her forward
movement. (Ibid.)
       The plaintiff prevailed at trial and GM appealed partly on the ground the trial court
erroneously denied GM’s request for the following special instruction on causation:
“‘If you find that the subject Camaro . . . was improperly designed, but you also find that

4
      The instruction was based partly on CACI 4100 and on language found in Wolf v.
Superior Court (2003) 107 Cal. App. 4th 25, 29.

                                             13
[plaintiff] would have received enhanced injuries even if the design had been proper, then
you must find that the design was not a substantial factor in bringing about her injuries
and therefore was not a contributing cause thereto.’” (Soule, supra, 8 Cal.4th at p. 559.)
The high court affirmed the judgment on the ground that any error was harmless. (Id. at
p. 557.)
       In reaching its decision, the Soule court found the proposed instruction to be a
correct statement of the law and supported by substantial evidence. (Soule, supra,
8 Cal.4th at p. 572.) However, it found the trial court’s refusal to give the instruction was
not prejudicial. The trial court instructed the jury that the plaintiff could not recover for a
design defect unless the defect was a “substantial” factor in producing her enhanced
injuries. The trial court’s general instructions “thus encompassed GM’s causation theory,
and they did not foreclose a defense verdict on that theory. [¶] What GM failed to obtain
was a further explanation of how general principles of causation related to GM’s specific
claim that Plaintiff’s ankle injuries were caused by the force of the accident, not by any
design defect in the Camaro. In essence, the omitted language was thus similar in
function and purpose to ‘pinpoint’ instructions. It is well settled that the erroneous
refusal of ‘pinpoint’ instructions may be deemed harmless in appropriate cases.” (Id. at
p. 581.) The plaintiff and GM both devoted substantial attention to the causation issue
during trial and “[t]hus, the evidence and argument uniformly supported the reasonable
inference that the general causation instruction allowed GM to escape liability if
plaintiff’s injuries would have occurred regardless of any defect.” (Id. at p. 582.)
       We find the court’s analysis in Soule to apply just as well here. The state of the
evidence, the other instructions, and counsel’s arguments support the conclusion that
Dahan was not prejudiced by the omission of this instruction. Indeed, there is no
indication the jury was misled. (Soule, supra, 8 Cal.4th at p. 582.)

                                              14
       First, there was not an entire absence of instructional support for Dahan’s theory
of consent. The trial court’s instructions on fiduciary duty included reference to the need
for “full disclosure” and “informed consent.” These instructions encompassed his theory
of liability and they did not foreclose a plaintiff’s verdict on that theory.
       Second, Dahan ensured the jury was informed his claims were based on the
allegations that JPMorgan failed to fully disclose its conflicts and failed to obtain
informed consent from him for the transactions. He presented extensive evidence and
argument about this at trial. Both parties devoted considerable time to presenting
testimony and evidence on consent. Freedman testified neither he nor Dahan were ever
provided materials about specific bonds for their approval. Nor did JPMorgan ever tell
them they were earning fees or making a profit in connection with any particular
transaction in the managed account. JPMorgan, on the other hand, relied upon the
General Terms document, which it argued disclosed to Dahan JPMorgan’s trading
practices and potential conflicts of duty. By signing the account opening documents,
which incorporated the General Terms, JPMorgan believed Dahan essentially provided
informed consent to its subsequent transactions.
       At closing, both parties vehemently disagreed on what was necessary to acquire
informed consent. JPMorgan’s counsel argued JPMorgan provided full disclosure and
Dahan provided informed consent “up front” through the General Terms. Dahan’s trial
counsel argued, “[a]ll they had to do was tell Mr. Dahan and Mr. Freedman about the
bonds, including the fact that their affiliate was underwriting them and buying them at a
discount and selling them at a higher price, and get Mr. Dahan and Mr. Freedman’s
express consent. [¶] That’s what a fiduciary duty requires, and that’s what the
defendants didn’t do.” Plaintiff’s counsel also informed the jury that the verdict form
specifically asked whether Dahan gave informed consent and instructed them to answer,
“no.” He emphasized, “You heard the defendants say we don’t have to give him consent.
The law says otherwise.”

                                              15
       Thus, the evidence and argument supported the reasonable inference that the
general consent instruction allowed Dahan to fully present his case to the jury. The
record supports the conclusion the jury was well aware it was tasked with deciding,
among other things, whether Dahan provided informed consent. Thus, it is not
reasonably probable that the omission of this pinpoint instruction prejudicially affected
the verdict. Dahan’s contentions that he was harmed by the omission are baseless.
       B. Waiver Instruction
       Dahan next contends a proposed waiver instruction should have been given to the
jury. It provided: “In determining whether [JPMorgan] breached the fiduciary duties they
owed to Jerome Dahan, you must disregard any term or provision of any contract or
writing between Jerome Dahan and [JPMorgan] that attempts, either directly or
indirectly, to exempt [JPMorgan] from responsibility for their breach of fiduciary duty.”
Dahan contends this instruction was “a correct statement of applicable law in light of the
fact that the General Terms Document plainly did not supply the specific disclosures
required for informed consent [citation], and the fact that the settled law of California
flatly prohibits generalized waivers for fiduciary duties.” The instruction was necessary,
Dahan contends, because “Defendants essentially contend that they were ‘immunize[d]’
from liability for breaches of fiduciary duty” by the General Terms. We disagree.
       First, JPMorgan did not contend it was immunized from liability by a waiver. It
acknowledged it had a fiduciary duty to Dahan. Indeed, the jury was instructed as to its
fiduciary duties. JPMorgan instead argued its fiduciary duties were fulfilled by the
disclosures contained in the General Terms about potential conflicts of interest.
       These disclosures do not purport to relieve JPMorgan of its fiduciary duties in the
same way the exculpatory clauses did in the cases relied upon by Dahan, Cohen v. Kite
Hill Community Assn. (1983) 142 Cal. App. 3d 642 (Cohen) and Neubauer v. Goldfarb
(2003) 108 Cal. App. 4th 47 (Neubauer). In Cohen, a homeowners association sought to
be absolved from any affirmative duty to enforce its own covenents, conditions, and
restrictions through several exculpatory clauses. One such clause stated,

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“‘The [Association] shall not be required to comply with any of the provisions of this
Section 1.’” Another provided, “‘To the fullest extent permitted by law, neither the
Board, any committees of the Association nor any member shall be liable to any Member
or Owner or the Association for any damage, loss or prejudice suffered or claimed on
account of any decision, approval or disapproval of plans or specifications (whether or
not defective), course of action, act, omission, error, negligence or the like made in good
faith within which such Board, committee, or persons reasonably believed to be the scope
of their duties.’” (Cohen, supra, 142 Cal.App.3d at p. 650.)
       Likewise in Neubauer, a waiver and release provision in a sales contract stated:
“‘Seller acknowledges that neither HCC nor its officers, directors or controlling
shareholders have any fiduciary duty to seller or HCC in connection with the execution of
this agreement or a sale including, but not limited to, the fairness of the overall
consideration or the allocation thereof.’” The agreement further acknowledged
“‘[s]eller . . . has requested and received such information in connection with the
execution of this agreement as he believes to be necessary in order to make an informed
decision to enter into this agreement and to bind himself as set forth herein’ and ‘[t]he
provisions hereof have been thoroughly reviewed by all parties and have been the subject
of negotiations.’” (Neubauer, supra, 108 Cal.App.4th at p. 55.)
       The provisions in Neubauer and Cohen are patently different from the contested
disclosures in the General Terms, which authorized JPMorgan “to act on [Dahan’s]
behalf even though you or any Morgan Affiliate may have a potential conflict of duty or
interest in a transaction. This includes the fact that your or any Morgan Affiliate
may . . . act as underwriter, broker, dealer or placement agent with respect to
securities . . . earn fees and profits from any of the above-listed activities in addition to
the fees charged to me for your services under this Agreement . . . ”
       Thus, California’s prohibition against waivers of fiduciary duty did not apply in
this case. (Civil Code section1668 [“All contracts which have for their object, directly or
indirectly, to exempt anyone from responsibility for his own fraud, or willful injury to the

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person or property of another, or violation of law, whether willful or negligent, are
against the policy of the law.”].) The proposed instruction was properly denied because it
was simply inapplicable to the facts of the case.
III.   Nonsuit as to the Fraud Cause of Action
       JPMorgan orally moved for nonsuit on all causes of action at the close of Dahan’s
case in chief. It argued, in relevant part, that nonsuit was appropriate on Dahan’s fraud
cause of action because there was no reasonable reliance. Specifically, any oral
representations about conflicts made to Freedman or Dahan were contradicted by the
General Terms, which Dahan acknowledged was incorporated into the account opening
documents he signed. Dahan disputed JPMorgan’s characterization of the facts;
Freedman testified he did not see the General Terms until the litigation and Dahan said he
did not remember seeing the General Terms.
       The trial court granted the motion as to the fraud cause of action, reasoning, “The
fraud cause of action requires false representations, concealment or nondisclosure. These
are classic – it’s a classic case of the elements fitting or not. [¶] And we frequently see
fraud causes of action that have the depth of evidence that would allow the case to go to
the jury. I don’t see it here. I don’t see the false representations as based on the
evidence. I don’t see the knowledge of false – you know, scienter . . . [¶] Most
importantly, there’s no intent demonstrated to defraud. Its business transactions in which
the defendants had fiduciary – they concede they had a fiduciary duty to properly
represent the interests of Mr. Dahan. There’s no intent shown here. There’s no induced
reliance, which takes you to justifiable reliance . . . ” Dahan contends the trial court
improperly credited the General Terms and discredited evidence contradicting its
applicability. In particular, testimony at trial demonstrated Dahan never signed the
General Terms and was unaware of the document. Once again, we are not persuaded.
       A defendant may move for nonsuit after the plaintiff has completed his or her
opening statement, or after the presentation of his or her evidence in a trial by jury.
(Code Civ. Proc., § 581c, subd. (a).) “In determining whether a nonsuit was properly

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granted the reviewing court must resolve every conflict in testimony in favor of the
plaintiff and at the same time indulge in every presumption and inference which could
reasonably support the plaintiff's case. [Citation.] The rules governing the granting of a
nonsuit, however, do not relieve the plaintiff of the burden of establishing the elements of
his case. The plaintiff must therefore produce evidence which supports a logical
inference in his favor and which does more than merely permit speculation or conjecture.
[Citation.] If a plaintiff produces no substantial evidence of liability or proximate cause
then the granting of a nonsuit is proper. [Citation.]” (Jones v. Ortho Pharmaceutical
Corp. (1985) 163 Cal. App. 3d 396, 402.)
       In Hadland v. NN Investors Life Ins. Co. (1994) 24 Cal. App. 4th 1578, the court
affirmed a grant of nonsuit against plaintiff insureds. In Hadland, the insurance agent
assured the plaintiffs the policy they purchased from him would be better than the one
they had. In reality, however, the policy provided lower benefits, such as a lower
maximum surgical benefit and lower maximum outpatient hospital charges. (Id. at
pp. 1586-1589.) Any representations made by the agent were patently at odds with the
express provisions of the written contract. Thus, the plaintiffs’ reliance on oral
representations was unjustified as a matter of law. (Id. at p. 1589.) Dahan’s reliance on
any oral representations was likewise unjustified. Whether he recalled reading or
receiving the General Terms does not negate the fact he signed account opening
documents which expressly incorporated the General Terms and discretionary portfolio
mandates which confirmed the General Terms were part of his contract. (See Chan v.
Drexel Burnham Lambert Inc. (1986) 178 Cal. App. 3d 632, 641.) In short, Dahan simply
failed to fulfill his burden of establishing reasonable reliance.
IV.    Summary Adjudication on Punitive Damages
       Dahan next contends the trial court’s order granting summary adjudication as to
punitive damages should be reversed because it applied an incorrect standard in deciding
the motion and there was sufficient evidence in opposition for a reasonable jury applying
the clear and convincing standard to find for Dahan on the issue. Dahan contends the

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trial court’s finding as to the punitive damages issue was inherently contradictory because
it also found a triable issue regarding whether JPMorgan defrauded him. Our decision to
affirm the jury’s verdict renders this issue moot and we need not address it. (See Cacho
v. Boudreau (2007) 40 Cal. 4th 341, 345.)
                                     DISPOSITION
       The judgment is affirmed. JPMorgan to recover its costs on appeal.

                                                 BIGELOW, P.J.
We concur:

                     RUBIN, J.

                     FLIER, J.

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