Court Opinion

ID: 9809238
Source: CourtListenerOpinion
Date Created: 2023-08-31 21:04:43.601657+00
Date Added: 2024-06-11T12:25:33.927260
License: Public Domain

Filed 8/31/23 Credit Card Services v. Chuang CA2/3
   NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                         SECOND APPELLATE DISTRICT

                                      DIVISION THREE

CREDIT CARD SERVICES, INC.,                                      B306223

         Plaintiff and Appellant,                                Los Angeles County
                                                                 Super. Ct. No.
         v.                                                      BC487454

JOE TEH CHUANG et al.,

         Defendants and Appellants.

     APPEALS from a judgment of the Superior Court of
Los Angeles County, Gregory Keosian, Judge. Affirmed.

     Park & Lim, S. Young Lim and Jessie Y. Kim for Plaintiff
and Appellant.

     Genga & Associates and John M. Genga for Defendants
and Appellants.
                _________________________
       Appellants in these cross-appeals are plaintiff Credit Card
Services, Inc. dba Bankcard Services (BCS) and defendants Joe
Teh Chuang, Seung Il Byun aka Sam Byun, and Zhi Xian Su aka
Andrei Su (individual defendants); Man J World, Inc. and USMS
International, Inc. (together, USMS)1; and United Merchant
Services, Inc. (UMS) (collectively, defendants).2
       BCS provides credit card payment processing services for
small businesses. BCS established a branch office in El Monte
specifically to serve ethnic Chinese merchants. BCS alleged
defendants misappropriated BCS’s trade secret merchant list by
using it to set up USMS, a seller of credit card processing services
that competed with BCS’s El Monte branch; the individual
defendants—former BCS employees—breached their contracts
with BCS by poaching BCS’s clients and employees for USMS;
and Su breached his duty of loyalty by sending BCS merchants
to USMS while still working for BCS.
       The individual defendants and USMS stipulated to
liability. BCS alleged OMS was liable for USMS’s wrongful
conduct as its successor. In a bench trial, the court found
OMS had no successor liability. The parties tried to the jury
the remaining issues of damages and UMS’s vicarious liability
for the stipulating defendants’ wrongful conduct. The jury

1    Man J World, Inc. essentially became USMS. We refer
to USMS to mean any iteration of these entities.
2     BCS also sued individual defendants David Chang and
Suhyun Hyun Hong aka Annie Hong, as well as One Merchant
Solutions, LLC dba One Payment Services (OMS). They are
not parties to this appeal.

                                 2
returned a verdict in favor of BCS, awarding it $646,746 on
its cause of action for breach of contract, $323,373 on its cause
of action for misappropriation of trade secrets, and $107,791 on
its cause of action for breach of loyalty. The court, on defendants’
motion and over BCS’s objection, amended the judgment to limit
damages to $646,746, on the ground each cause of action arose
from the same conduct.
        Defendants collectively challenge the trial court’s denial
of their nonsuit motion, made at the close of BCS’s evidence,
arguing BCS presented no evidence to support its claimed
damages or that defendants caused those damages. UMS
challenges the trial court’s denial of nonsuit and JNOV motions
it filed contending BCS’s single trade secrets claim against it
was barred by the applicable three-year statute of limitations.
BCS appeals the trial court’s ruling on the issue of OMS’s
successor liability and the amendment of the judgment.
We affirm the judgment.
        PROCEDURAL AND FACTUAL BACKGROUND
        The parties’ briefs set forth the lengthy procedural history
in this case from its initial filing in June 2012 through these
appeals. We thus do not include it all here.
1.      Credit card processing background
        When merchants swipe a customer’s credit card, they are
charged a processing fee that is split among the credit card issuer
(the bank) and the card association (e.g., Mastercard, Visa),
the credit card processor, and finally, the Independent Sales
Organization (ISO) that provides the merchant with credit card
payment processing services. The ISO typically receives one-fifth
to one percent of the processing fee charged to the merchant,
known as a “residual.”

                                 3
       An ISO must register with the card association. An ISO
can contract with outside, independent sales agents (generally
known as “sub-ISOs”) to sell its processing services to merchants
or hire internal sales agents to sell its services. The card
association rules require unregistered sub-ISOs to market
and represent themselves in the name of the registered ISO.
(Most sub-ISOs are not registered.)
2.     The parties
       BCS has been providing credit card payment processing
services as a registered ISO since 1987. BCS hires internal
sales professionals to solicit merchants to become BCS clients.
BCS pays its sales representatives a base salary and a
commission based on a percentage of the residual it receives
from the merchants the sales agent signed up with BCS.
       Patrick Hong, who is Korean, is BCS’s founder, president,
and CEO. He started BCS to provide bilingual credit card
processing services for Korean-speaking merchants in Southern
California and then branched out to include Vietnamese- and
Chinese-speaking merchants. BCS established a branch office
in El Monte specifically to sell its services to ethnic Chinese
merchants. BCS now has branch offices throughout the United
States.
       BCS hired individual defendants Sam Byun in July 2002,
Joe Chuang in December 2007, and Andrei Su in January 2009.
Byun and Chuang were sales representatives for the El Monte
office and Su was a sales representative in the San Francisco
office. They each signed contracts with BCS agreeing not to:
use or disclose BCS’s proprietary information, solicit BCS
customers or otherwise cause BCS customers to terminate
their business with BCS, or solicit BCS employees.

                                4
      BCS’s confidential proprietary information include its
merchant lists and merchant files. The lists and files include
the merchant’s name and address, the owner’s name and phone
number, merchant volume, pricing information, charge back
data, risk analysis, and BCS’s profit margin. BCS’s merchant
data are protected trade secrets.
      Byun and Chuang left BCS and allegedly started USMS
(then, Man J World) in April 2011 to sell credit card processing
services to ethnic Chinese and Korean merchants in competition
with BCS. Su also left BCS and began working for USMS around
November 2011. USMS is an unregistered sub-ISO.
      UMS is a registered ISO and direct competitor of BCS.
Unlike BCS, it contracts with outside sub-ISOs to sell its credit
card processing services to merchants and to provide customer
service to those merchants. UMS refers to its sub-ISOs as “sales
partners.” USMS was one of UMS’s sub-ISOs or sales partners.
UMS pays up to 90 percent of the residual it receives to the
sub-ISO that signed up the merchant with UMS.3

3     As BCS’s industry expert explained, an ISO using an
independent sales agent model like UMS pays the bulk of the
residual to the sub-ISO that brought in the merchant because
the sub-ISO does most of the work and incurs the expenses.

                                5
3.     BCS’s allegations4
       In June 2012, BCS sued the individual defendants, Man J
World, and USMS.5 BCS alleged Byun and Chuang used BCS’s
protected trade secret information—including its confidential
customer lists and merchant files and applications—gathered
during their employment with BCS, to help develop USMS. In
June 2011, Byun also recruited Su while he still was employed
at BCS’s San Francisco office. Byun wanted Su to start a branch
office for USMS in San Francisco.
       BCS allegedly suspected Su was working for a competitor
and began monitoring his employee email. BCS discovered
Byun had sent Su an employment application on June 15, 2011.
BCS also discovered that, on November 3, 2011, Byun sent Su
a confidential list of several hundred of BCS merchants in
San Francisco and a confidential list of over 1,000 of BCS
merchants in the El Monte area. The merchant lists contained
the name and address of the merchant, the owner’s name and
phone number, the business type, credit card processing volume,
BCS’s profit margin, and other information. In his email, Byun

4    We include some general allegations from BCS’s later-filed
second amended complaint.
5     BCS actually named Man J World and US Merchant
Solutions, the name under which Man J World then was doing
business. After Man J World began doing business under the
name USMS, BCS named USMS in place of a Doe defendant.
For simplicity, we refer to both as USMS.

                               6
asked the recipients to print the attached lists and delete the
email.6
       While employed at BCS, Su also sent BCS’s confidential
information to Byun. On August 5, 2011, Su emailed a merchant
application for one of BCS’s merchants to Byun. BCS’s merchant
applications contained “numerous pieces of highly confidential
private merchant information,” including financial information.
In September 2011, Su allegedly left BCS’s employ for an
extended vacation from which he never returned. He began
working “openly” for USMS in November 2011.
       BCS alleged defendants used BCS’s trade secret merchant
lists and confidential information to their advantage and the
advantage of BCS’s competitors by bringing BCS’s merchants
to USMS to switch their credit card processing service. BCS
asserted causes of action for breach of contract, misappropriation
of trade secrets, and three others, based on this conduct. The
defendants named in the original complaint answered and
asserted affirmative defenses.
4.     BCS’s amendments to its complaint
       Discovery took place and BCS learned of other parties to
sue. In September 2015, BCS named USMS as a Doe defendant,
as well as OMS, with which BCS alleged USMS had merged.
In January 2016, BCS also named Chang and Hong, former
BCS employees, as Doe defendants.
       BCS added UMS as a Doe defendant in February 2016.
After UMS moved to quash because it had been more than three

6     Su had linked his personal email account to his employee
email.

                                7
years since BCS filed the action (Code Civ. Proc., § 583.210),
BCS moved for leave to file a first amended complaint. Among
other things, BCS argued it learned during discovery that USMS
and OMS were not registered ISOs—as it was led to believe
through earlier discovery—but were agents of UMS. BCS sought
to add UMS as a defendant under the theory of vicarious liability
and argued the three-year statute of limitations governing
trade secrets claims was tolled under the discovery rule. The
trial court granted the motion over UMS’s objection.7 BCS
dismissed the Doe amendment naming UMS and, on August 29,
2016, amended its complaint to name UMS as a defendant and
add allegations and causes of action relating to it and the other
added Doe defendants. BCS filed a second amended complaint
(SAC) on December 14, 2016.
       In addition to the allegations above, BCS alleged it
learned Chang, a USMS employee, had gotten the El Monte
and San Francisco merchant lists from his wife Hong, who was
a BCS employee at the time, and given them to Byun. BCS
now alleged on information and belief that defendants also
misappropriated its national merchant list and shared that list
with the defendants in a related action and with UMS.
       BCS also now alleged UMS and USMS entered into an
ISO-agent agreement under which USMS agreed to register
with the card associations and provide UMS with financial and
personnel information, but USMS did not do so. BCS alleged

7    The court also granted Chang’s and Hong’s motion to
quash, but BCS named them as defendants in its amended
complaint.

                                8
on information and belief that, because USMS did not follow
the terms of the ISO-agent agreement, USMS, Man J World,
and OMS were not sub-ISOs of UMS but were its agents. BCS
alleged it had no reason to suspect UMS was the principal of the
other entity defendants until it learned this information during
Byun’s February 2, 2015 deposition. BCS alleged UMS aided
and abetted defendants in their misappropriation of BCS’s
confidential and trade secret information and conversion of
BCS’s merchant clientele.
       BCS now more specifically alleged the individual
defendants (including Chang and Hong) solicited the services
of UMS to BCS’s customers, switched the credit card processing
services of dozens of BCS merchants to UMS, used BCS’s trade
secret information to their and BCS’s competitors’ advantage,
and used BCS’s trade secrets as a “primary business building
resource” for Man J World, USMS, and OMS. BCS alleged UMS
knew the individual defendants had done so and was vicariously
liable for their and the other entity defendants’ misappropriation
of BCS’s trade secrets.
       The SAC alleged causes of action for: breach of contract
against the individuals; misappropriation of trade secrets against
the individuals and entities, including OMS and UMS; breach
of duty of loyalty against Su; fraudulent transfer against USMS
and OMS relating to the alleged merger of the two entities;
and aiding and abetting fraudulent transfer against UMS.
Defendants answered with a general denial and asserted several
affirmative defenses, including the statute of limitations.
5.     Stipulation to liability and bifurcation of action
       Before trial, defendants stipulated to liability as follows:
all named individuals stipulated to liability on the first cause

                                 9
of action for breach of contract and, along with USMS, on the
second cause of action for misappropriation of trade secrets;
Su stipulated to liability on the fifth cause of action for breach
of duty of loyalty; and, because USMS essentially had taken over
the business of Man J World, they stipulated to liability on the
third cause of action for fraudulent transfer.8 They agreed
judgment against them was “subject only to a determination
of damages, if any, caused by them.” OMS and UMS did not
stipulate to liability.
       The remaining issues to be tried included whether
OMS could be held liable as a successor entity of USMS for
misappropriation of trade secrets. The trial court bifurcated
that equitable issue.
6.     Bench trial on OMS’s liability
       The bench trial began on June 18, 2019. BCS’s trial brief
argued OMS, which purchased USMS’s assets in March 2015,
was liable for USMS’s torts under the de facto merger doctrine
and/or the sham sale doctrine. Defendants argued the asset
purchase agreement demonstrated the transaction between OMS
and USMS was not a merger, OMS did not assume any liability
USMS may incur from a judgment in this action, and USMS
received adequate consideration for its assets. As a more than
one-quarter owner of OMS, USMS, which continued to exist,
also had an asset to satisfy any judgment in this case.
       For BCS’s direct case, BCS’s industry expert Paul Rianda
testified and counsel read into the record portions of the
deposition testimony of Jay Yoon, the CEO of UMS and a

8     The fraudulent transfer claims ultimately were dismissed.

                                10
managing member of OMS, Young Soo Lee, CEO of OMS, and
Byun. OMS called as witnesses James Fitzsimmons, a mergers
and acquisitions attorney who represented OMS in the
transaction, and Yoon.
       The admitted documentary evidence included the asset
purchase agreement (exhibits 1065 and 2053), OMS’s amended
and restated operating agreement (exhibit 1106), a March 2015
consulting agreement between OMS and USMS (exhibit 1107),
a July 25, 2011 promissory note for $100,000 executed by USMS
(exhibit 1068), UMS’s consolidated financial statements for
December 31, 2016 and 2015 (exhibit 1088) and December 31,
2017 and 2016 (exhibit 1089), and a 2015 USMS/OMS [aka OBS]
valuation (exhibit 2054).
       The trial court found OMS had no successor liability
to USMS.9 Judgment was entered in OMS’s favor after the
completion of the jury trial.
7.     Jury trial on remaining issues10
       Jury selection began on June 21, 2019. The only issues
left were whether UMS was vicariously liable for the acts of
its alleged agents Chung, Byun, Su, Chang, Hong, and USMS
for misappropriation of trade secrets, including its statute of
limitations defense; and the amount of damages BCS suffered
as result of defendants’ wrongful acts. The court read a

9    We describe the evidence before the court below.
10    We have reviewed the trial testimony and exhibits. We
do not summarize all the testimony, or identify every witness,
and have not always described the testimony in the order
presented.

                               11
stipulated summary of the case to the jury explaining defendants’
admissions. (During the trial defendants stipulated to joint and
several liability.) On June 24, 2019, the parties gave opening
statements and BCS called its first witness.
       a.    Trial Testimony—BCS’s case
       Patrick Hong: Hong testified that when he founded BCS,
he wanted it to provide full, on demand, bilingual service to the
community. BCS served the Korean-speaking market at first
and by 2011 had expanded into the Chinese- and Vietnamese-
speaking markets. He recalled BCS having opened the
Westminster branch for the Vietnamese market somewhere
between 2003 and 2005—a few years before the El Monte branch,
which BCS opened in 2008 for the Chinese market.
       Hong described the time and resources it took to open
a branch in a new market—like the El Monte branch. BCS had
“to figure out” how many and what types of merchants were
in the market, customer demand, and the current pricing, and
prepare marketing and customer service material. Hong also
testified about the need to create a brand name and to have a
good reputation to enable its sales agents to approach and sign
merchants. BCS attended, and sometimes sponsored, business
association events to make connections, advertise, and build
BCS’s reputation.
       To “procure a merchant,” BCS had to hire and train sales
agents about BCS’s way of doing business and invest a “large
amount of money for advertising.” It took between two to six
months to train someone in customer service or a technician
about providing service to the Chinese-speaking community.
Hong said BCS had to hire between 15-20 people to get one good

                               12
sales agent. He estimated it cost about $30,000 to $40,000
in 2010 to hire one good salesperson.
       Hong also explained BCS had to perform underwriting
for each merchant it wanted to sign up for its services through
a merchant application that included, among other things,
financial information and business size and type. The credit card
associations and sponsoring banks would not permit a merchant
to process credit card payments unless it met certain financial
requirements and risk factors.
       From what Hong could recall, in 2011, Westminster
had more than 2,000 merchants and El Monte more than 1,000.
By 2016 the Westminster branch had maintained its more than
2,000 merchants, but the number of merchants at the El Monte
office had dropped by half, to about 500.
       Hong also testified about BCS’s delay in naming UMS
as a defendant. He said he learned early on in this case that
USMS was using UMS to process its credit card transactions.
BCS didn’t name UMS as a defendant until February 2016,
however, because during early discovery, USMS and the
individual defendants produced an “Independent Sales
Organization Bin Sharing Agreement” between UMS and
USMS that indicated USMS was a registered ISO (Exhibit 1060).
BCS decided to sue UMS after Hong learned, sometime in late
2015, that USMS “was transferred” to OMS and that Jay Yoon—
the president of UMS—was a “partner of this OMS, LLC.”
       Jay Yoon: BCS learned Exhibit 1060 was not the “actual
contract” between UMS and USMS during Yoon’s deposition in
July 2018 after BCS named UMS as a defendant. Yoon testified
UMS produced the correct agreement, Exhibit 1061, after
his deposition. That agreement, entitled “Independent Sales

                               13
Organization Agreement,” stated USMS was a nonregistered ISO
(Exhibit 1061).
       BCS’s counsel questioned Yoon about the two agreements.
Yoon agreed Exhibit 1060 was the form agreement UMS used
when contracting with registered sub-ISOS. He confirmed USMS
was not registered. He said that, when USMS approached UMS,
USMS wanted to register with the card associations, but
sometime later—maybe a “few months”—USMS changed
its mind. Exhibit 1060—the agreement for registered ISOs—
indicates USMS signed it on April 4, 2011. The place for UMS’s
signature is blank. The operative agreement—Exhibit 1061—
however, indicates USMS signed it earlier, on March 29, 2011.
UMS’s signature line again is blank. Yoon did not know
why there were two agreements. He testified UMS sent
the agreement to USMS, and USMS signed and dated it.
       Yoon agreed its agreement with nonregistered ISOs
required the nonregistered ISO to use UMS for its credit card
processing. Yoon also agreed nonregistered ISOs must use
the name UMS when marketing and selling those services.
UMS thus required its unregistered sub-ISOs or “sales partners”
to use the UMS logo on all their marketing materials, including
business cards and letterhead. Yoon confirmed UMS had lent
USMS about $300,000 in total.
       Young Ho Lee: BCS’s director of sales Young Ho Lee
testified that in early 2011, the El Monte office had a nine-
member sales team, but four sales agents left in March 2011,
another left in April 2011, and one more left in October 2011.
The sole technician for the office also left. The four salespeople
who left in March were the highest performing sales agents in

                               14
the El Monte office. The one who left in October was the best
one left in the office.
       Lee testified he tried to replace the individuals who left,
including by putting ads in Chinese newspapers and online sites,
but he didn’t get many resumes and the people he did hire
weren’t very good. After March 2012, Lee moved to BCS
headquarters to oversee all branch sales teams, but he learned
about another seven to eight employees left El Monte between
2012 and 2014. He testified the sales volume at the El Monte
office had “decreased significantly.”
       Lee also testified he learned in October 2011, through Su’s
emails, that Su had been sending BCS merchants to USMS since
May 2011 and was receiving residuals from USMS for doing so.
He agreed Su’s emails showed BCS merchants being moved
to UMS. He confirmed BCS “found out” in October 2011 that
Byun and Su “were referring merchants, for payment process[ing]
services, to [UMS].”
       Andrei Su: Su confirmed Byun emailed him in June 2011
asking him to come work for USMS. The email asked Su not to
tell anyone. Su admitted he procured certain merchants for BCS
in summer 2011 that he then referred to USMS. He sent the
merchant’s BCS application and underwriting file to Byun.
USMS paid Su residuals beginning in July 2011, as well as
a cash bonus in August 2011.11 Su said the merchants asked
him to transfer them.

11    Various emails between Su and Byun dated June to
November 2011 concerning these events, as well as merchants’
applications, emails between Su and merchants, and a

                               15
      Su resigned from BCS in September 2011 to take more
than 21 days off work, as BCS policy required, to go to China.
His resignation letter stated he would return in October 2011,
but he did not. He began working for Byun in November 2011.
      Su admitted he received emails from Byun in early
November 2011 attaching the BCS El Monte and San Francisco
Merchant Lists and telling him to keep a hard copy and delete
the email. Su said he did not follow those instructions; he did
not pay much attention to the email. He testified he did not
open the attached merchant lists.
      Sam Byun: Byun testified remotely from Korea. He was
the Chinese Division Manager at BCS and managed the sales
representatives at the El Monte office. He left BCS in January
2011 to provide merchant services through his own company
for two different ISOs and then signed an ISO agreement with
UMS in March 2011.
      Chang sent Byun the BCS El Monte and San Francisco
merchant lists around Summer 2011. A few months later, he
emailed the lists to Su, Chuang, and Paul Lam (another sales
agent). He agreed that, from the information provided on the
El Monte merchant list, he could “cherry pick the high value,
high profit merchants.” He acknowledged that was the reason
why he gave the list to Su, Chuang, and Lam. He testified he
did not instruct them to do so, however, and denied having an
expectation that they would use the list to solicit USMS’s services
to the high volume, high profit margin merchants.

cancellation request, also were admitted into evidence through
both plaintiff’s and defendants’ exhibits.

                                16
       Byun conceded that, in 2011, six of seven people working
for USMS were former BCS employees, although some worked
only part-time.
       Joe Chuang: Chuang, who speaks Korean, Chinese,
and English, began working at BCS in the El Monte office
in December 2007. He left BCS after Byun did and became
a co-owner of USMS. Chuang admitted he brought “some
customer[s]” to UMS. Chuang agreed he used information from
BCS’s merchant file to transfer the merchant’s services to UMS.
He confirmed he had to submit the same type of merchant
information with a merchant application for UMS that he
had to submit with a BCS application. Chuang testified
specifically about two merchants he had procured for BCS that
he transferred to UMS through USMS. One of them was owned
by friends of his father.
       Chuang identified a USMS business card with his name
on it that states “Sales Partner with United Merchant Services”
with “United Merchant Services” reflected in its logo. Chuang
explained the merchant’s agreement was with UMS, not USMS.
He understood unregistered sellers of credit card processing
services like USMS had to use the name of the processor whose
services they were selling.
       Patrick Kennedy: Patrick Kennedy was BCS’s damages
expert. He assessed the El Monte office’s lost profits attributable
to defendants’ wrongful conduct. To prepare his opinion,
Kennedy reviewed financial information, including profit and
loss statements for the El Monte office, other BCS branch offices,
and BCS as a whole, as well as information about the overall
economics of the credit card processing industry and “what [was]
going on” in the industry in the Los Angeles region, as well as

                                17
documents filed in the case, including the complaint, and
deposition testimony.
      In calculating BCS’s damages, Kennedy relied on his
understanding that: defendants received BCS’s trade secret
merchant list by email with an instruction to destroy the email
and defendants admitted to taking the list; there were instances
where USMS actually used BCS’s confidential merchant
information and merchant applications to provide its own
services; Byun solicited Su to work for USMS while Su still was
employed at BCS, and a large number of BCS employees left
the El Monte branch and ultimately went to USMS; UMS loaned
USMS $270,000 to set up its branch; and defendants, except
for UMS, had stipulated to liability.
      Kennedy testified there thus was “a combination of
things . . . that . . . extend[ed] beyond just the . . . merchant list”
that enabled defendants to set up a competitor to BCS in the
marketplace that influenced his damages calculation. Kennedy
concluded defendants’ various acts had a negative, lasting impact
on sales at the El Monte branch. Based on his review of BCS’s
financials, Kennedy testified El Monte saw rapid growth from
when it first opened in 2008 to 2011, but sales dropped “pretty
dramatically” in the years that followed. He explained he thus
had to “figure out what [sales El Monte] would’ve done” had
defendants’ wrongful conduct not occurred—its “unimpaired”
sales—compared to the El Monte actual or “impaired” sales after
defendants began competing with it. Second, he had to deduct
“variable expenses,” such as merchant fees, employee costs,
advertising and marketing, travel expenses, printing and
postage, supplies, and other expenses to arrive at the El Monte
branch’s lost profits.

                                  18
       Kennedy testified he used the “benchmark approach”
to calculate BCS’s damages. Kennedy “looked at another BCS
branch . . . that was not directly impacted by the . . . wrongful
conduct” to compare sales figures. He chose the Westminster
branch as a “good comparable” to El Monte because it opened
a couple of years before the El Monte branch and primarily
targeted Vietnamese-speaking merchants in the Los Angeles
area, it had some success and growth over time, and, because
both branches were in Los Angeles, they would “be hit by the
same things that [affected] the overall L.A. market.” Kennedy
used Westminster’s historic performance as a benchmark to
see how El Monte was performing comparatively and how likely
it would be to track Westminster over time. He noted that
because the Vietnamese market in Westminster was smaller
than the Chinese market in El Monte, the Westminster branch’s
profitability probably understated the El Monte branch’s
potential, but it provided “a reasonable basis” for his
calculation.12

12    Kennedy testified he reviewed census data that showed
the Vietnamese-speaking population was smaller than the
Chinese-speaking population. Hong had testified that, based
on the population and types of businesses, the Chinese market
was larger than the Vietnamese market. While the Vietnamese
market consisted of smaller salons and restaurants, the Chinese
market had many businesses, including import businesses. The
jury could infer from Hong’s testimony that the larger businesses
in the Chinese market generated larger transactions and thus
more profits than the smaller businesses in the Vietnamese
market.

                                19
       Although El Monte was “pretty substantially outpacing”
Westminster, Kennedy assumed that, by the end of 2011, they
would be on “equal footing, in terms of overall sales.” In other
words, “El Monte would track Westminster.” Kennedy used a
demonstrative chart during his testimony to show the growth
of the Westminster office and where El Monte’s “unimpaired”
sales should have been through April 2019 based on that growth
relative to its “impaired,” actual sales. Using this benchmark
approach, Kennedy calculated the El Monte branch’s net lost
profits from 2011 through April 2019, after deducting variable
expenses, as $4,366,398. To compensate BCS for the reduced
value of the business due to the continuing lost profits, Kennedy
calculated and added its “terminal value” of $1.6 million (by
applying a multiplier of 4 to the last year’s lost profits of
$400,000) to arrive at a total damages calculation of about
$6 million.
       Kennedy also gave his opinion about defendants’ expert
Ben William Sheppard’s damages calculation, which was “a lot
smaller number.” Sheppard calculated El Monte’s lost profits
based solely on a set of individual merchants who moved from
BCS to USMS. Kennedy found that approach “too narrow.”
       He opined there was a “continuing harm” beyond the
set of individual merchants who moved from BCS to USMS.
Knowing whom to target and whom not to target in the Chinese
market, based on the El Monte list of merchants BCS already
had underwritten, and that included the merchants’ “underlying
activity and profitability,” would give anyone a competitive
advantage, Kennedy explained. In calculating El Monte’s future
lost profits, he also considered the effect the loss of key sales
personnel had on El Monte’s sales, as well as the competitive

                               20
advantage USMS gained against the El Monte branch by taking
BCS’s best salespeople, who had personal relationships with
merchants in the Chinese market. In Kennedy’s opinion,
looking at only the number of merchants who moved from BCS
to USMS did not “capture the scope of the impact [of defendants’
misconduct] on this business.”
       On cross-examination, Kennedy agreed the number of
merchants who left BCS for USMS was relevant as a piece of the
overall harm. Kennedy believed the list of merchants defendants
stated they converted was incomplete and did not capture all
merchants who left BCS and went to USMS—whether directly or,
after stopping credit card payments, moved to USMS instead of
renewing their relationship with BCS.13 Kennedy nevertheless
agreed that if none of the other facts had occurred, and the issue
were only about USMS converting five BCS customers, then he
wouldn’t be “sitting here today.” Kennedy confirmed a significant
part of his damages analysis was based on the number of critical
employees who left BCS and could not be replaced. Kennedy
compared the situation to a competitor taking the chief engineers
of a software company to set up a competing software company.
       b.    Defendants’ motion for nonsuit
       Defendants made a motion for nonsuit at the end of BCS’s
case in chief. They argued the evidence BCS had presented was
insufficient as a matter of law for the jury to find defendants
caused it $6 million in damages. They asserted BCS only had
presented evidence of five or six of its merchants leaving BCS
for defendants, which did not support an inference of a $6 million

13    See Sheppard testimony, post.

                               21
loss. They also argued the evidence showed BCS knew in 2011
that Byun, Su, and USMS were working with UMS as USMS’s
processor. Thus the discovery rule had not postponed the
running of the statute of limitations and BCS’s claim against
UMS was time barred. The court denied the motion.
       c.    Trial testimony—defendants’ case14
       Byun: Byun testified he found merchants for UMS
through his prior knowledge of them. He explained merchants
with whom he had a relationship at BCS contacted him after
he left and asked to switch to his company. Byun testified he
didn’t need the BCS merchant lists to sign up merchants and
he didn’t use BCS’s lists before he circulated them in November
2011. Rather, BCS’s former merchants signed up with USMS
“because they wanted it.” Byun acknowledged some former
BCS employees signed up merchants with USMS who previously
had been with BCS.
       Ben William Sheppard: Before Sheppard testified,
defendants described for the jury the lists of merchants BCS
had produced in response to defendants’ discovery request that
BCS identify its misappropriated trade secrets and merchants.
BCS produced a list of about 13,000 merchants from all its offices
who had left BCS. From that list, BCS produced a list of about
3,000 merchants from the El Monte and San Francisco offices
that had closed their accounts. Defendants compared the list of

14   Defendants also recalled Su and Chuang, called a former
BCS employee who went to work for USMS, and called their
industry expert.

                                22
3,000 merchants to their own list of merchants and highlighted
162 merchants that matched (match list).15
       Using data from these 162 merchants, Sheppard
determined BCS’s lost profits based on the transfer of those
merchants to USMS were $107,791. Sheppard calculated the
profit he would have expected BCS to receive had the matched
customers stayed with BCS instead of signing with defendants.
Sheppard first determined how many more months a merchant’s
“life expectancy” would be—the likely number of months the
merchant would have remained with BCS based on how long
the merchant had been with BCS before it left and considering
the average life expectancy was about 36 months. Thus, if the
merchant had just signed up with BCS before leaving, Sheppard
assumed it would have remained with BCS for a little more than
36 months. On the other hand, if a merchant had been with BCS
for, say, 85 months before leaving, Sheppard assumed it would
have had another 20 months with BCS.
       He then multiplied the annual variable expense margins
Kennedy had calculated to the average profits that would
have been earned over those months to reach the lost profits
attributable to the “expected remaining life” of the identified
merchant had it not left BCS. Sheppard walked the jury through
the first merchant on his spreadsheet as an example, and
calculated its loss represented $775 in lost profits.
       Sheppard did not have an opinion on whether defendants’
conduct affected the goodwill of the El Monte office. He did

15   During his testimony, Byun agreed 162 of USMS’s
merchants matched the list BCS provided.

                              23
not know whether USMS would have been able to set up its
competing company without BCS’s merchant list nor did he
consider the effect losing its key salespeople to USMS had on
the El Monte office in calculating its lost profits. He did not
consider the impact USMS’s competition had on the El Monte
office. He considered only the profits the merchants who left
for USMS—based on the match list provided to him—would
have generated based on a limited life span.
8.     Verdict, Judgment, and Amended Judgment
       On the day deliberations began, July 2, 2019, the jury sent
the following request: “. . . the exhibits of Patrick Kennedy and
Ben W. Sheppard. We need their calculations.” After conferring
with the parties, the judge responded in writing, “Ben W.
Sheppard’s calculations are set forth in Ex. 2129. There is no
exhibit for Mr. Kennedy. If you so request, Kennedy’s testimony
can be read back to you.” The next morning, the jury sent a
second written question:
              “To calculate damages, we need to subtract
              actual profits from estimated profits (using
              the gross & net figures for each). We do not
              have (or cannot find) BCS’[s] actual revenue
              & expenses for 2010 to 2017/18. We only have
              some of the data from the BCS business plan
              (gross revenue of BCS in 2010 from Ex. 1012 &
              2011 from Ex. 1013). We don’t have (or cannot
              find) expenses, and would like both from 2010
              onward. This is why we asked for Kennedy’s
              slides, but we can use raw data if in evidence.”
       A little over an hour later, after conferring with counsel,
the court returned the following response: “There is no exhibit

                                24
indicating gross revenues or expenses of BCS. We can have
Kennedy’s testimony, or any other witness testimony[,] read
back to you.” The jury entered the courtroom 23 minutes later
with its verdict.
       By 11 to one, the jury awarded BCS $646,746 against the
individual defendants for breach of contract, $107,791 against Su
for breach of duty of loyalty, and $323,373 against all defendants
for misappropriation of trade secrets. The jury unanimously
found USMS did not act as an agent of UMS in misappropriating
trade secrets but found in a verdict of nine to three that UMS
ratified USMS’s misappropriation of trade secrets and thus had
the same liability as the other defendants on that cause of action.
The verdict form did not include a separate question as to
whether BCS’s claim against UMS was barred by the statute
of limitations.
       After the judge signed BCS’s proposed judgment,
defendants moved to amend it to reflect that BCS “shall recover
no more than the total sum of $646,746.00, and to state that
[BCS] shall take nothing from Defendant [OMS].” The court
agreed with defendants that each of BCS’s causes of action
“relied on essentially the same factual bases or were included
in the broad factual basis underlying the First Cause of Action
for Breach of Contract.” The court did not sign and file the
amended judgment until December 6, 2019.
9.     Motion for JNOV
       UMS moved for JNOV in February 2020 on the ground the
three-year statute of limitations barred BCS’s recovery against it.
Due to COVID-19 restrictions, the hearing on the motion was
delayed until August 2020. After taking the matter under
submission, the court denied the motion in a written ruling.

                                25
                             DISCUSSION
       Defendants contend the trial court erred (1) in denying
their motion for nonsuit arguing BCS admitted no evidence
from which a jury could find it suffered, or defendants caused,
the $6 million in damages its expert calculated; and (2) in
denying UMS’s motions for nonsuit and JNOV on statute
of limitations grounds. BCS contends the trial court erred
in finding OMS was not a successor entity to USMS, and
in amending the judgment to limit BCS’s recovery.
1.     Defendants’ appeal
       a.     Standard of review
       “A defendant is entitled to a nonsuit if the trial court
determines that, as a matter of law, the evidence presented
by plaintiff is insufficient to permit a jury to find in his favor.
[Citation.] ‘In determining whether plaintiff’s evidence is
sufficient, the court may not weigh the evidence or consider
the credibility of witnesses. Instead, the evidence most favorable
to plaintiff must be accepted as true and conflicting evidence
must be disregarded. The court must give “to the plaintiff[’s]
evidence all the value to which it is legally entitled, . . . indulging
every legitimate inference which may be drawn from the evidence
in plaintiff[’s] favor.” ’ [Citation.] A mere ‘scintilla of evidence’
does not create a conflict for the jury’s resolution; ‘there must be
substantial evidence to create the necessary conflict.’ [Citation.]”
(Nally v. Grace Community Church (1988) 47 Cal.3d 278, 291.)
       We review an order denying a motion for nonsuit de novo,
applying the same standard as the trial court. (Crouch v. Trinity
Christian Center of Santa Ana, Inc. (2019) 39 Cal.App.5th 995,
1013.) This means we will affirm the order so long as substantial
evidence supports it. (Ibid.) Like the trial court, we must

                                  26
evaluate the evidence in the light most favorable to the plaintiff.
(Francis v. City of Los Angeles (2022) 81 Cal.App.5th 532, 542.)
We do not weigh the evidence or consider the credibility of
witnesses. (Campbell v. General Motors Corp. (1982) 32 Cal.3d
112, 118.) “We also consider evidence introduced after the
motion for nonsuit by any party in evaluating whether there
is substantial evidence in the record that could support a
judgment in plaintiff’s favor.” (Francis, at p. 542.)
       On a motion of a party against whom a verdict has
been rendered, the court must “render judgment in favor of the
aggrieved party notwithstanding the verdict whenever a motion
for a directed verdict for the aggrieved party should have been
granted.” (Code Civ. Proc., § 629, subd. (a).) As with an order
denying a motion for nonsuit, “ ‘[an] appeal from the trial court’s
denial of [a] motion for [JNOV] is a challenge to the sufficiency
of the evidence to support the jury’s verdict and the trial court’s
decision.’ ” (Paulus v. Crane Co. (2014) 224 Cal.App.4th 1357,
1362.) “[O]ur standard of review—as was the trial court’s
standard on the motion—is ‘whether any substantial evidence—
contradicted or uncontradicted—supports the jury’s conclusion.’ ”
(Morgan v. J-M Manufacturing Company, Inc. (2021) 60
Cal.App.5th 1078, 1085.) And, we determine “the presence of
the requisite substantial evidence” de novo. (IIG Wireless, Inc.
v. Yi (2018) 22 Cal.App.5th 630, 639.) We view the evidence in
the light most favorable to the jury’s verdict, disregard conflicting
evidence, and draw all reasonable inferences in favor of the
verdict. (Morgan, at p. 1085.)
       b.    Damages
       We first address BCS’s argument that it was not required
to prove causation because, except for UMS, defendants

                                 27
stipulated to liability, including causation. Although defendants
stipulated to liability, they did not stipulate that their wrongful
conduct caused the damages plaintiff sought. The stipulation
expressly states defendants “stipulate to liability to BCS –
making judgment against them subject only to a determination
of damages, if any, caused by them.” (Italics added.) In other
words, defendants did not admit to causing the specific damages
BCS claimed. (See Christ v. Schwartz (2016) 2 Cal.App.5th 440,
453, cited in defendants’ stipulation to liability [defendant
who admitted to liability admitted to causing harm but not
to causing “the specific damages [the plaintiff] claimed”]; Vogt v.
McLaughlin (1959) 172 Cal.App.2d 498, 502 [holding “a defense
verdict may be returned even where liability is admitted, if the
evidence would sustain a conclusion that plaintiff’s injuries were
not proximately caused by the . . . event sued upon”].) We also
agree with defendants that they did not admit to causing BCS’s
claimed damages by unsuccessfully moving in limine to preclude
evidence of their liability.
       The court also instructed the jury as to what defendants
admitted, and to what they did not, and what BCS had to
prove for each cause of action.16 The jury was instructed that,
to prevail on its claims, BCS had to prove it was harmed and
the individual defendants’ breaches of contract, Su’s breach
of loyalty, and defendants’ misappropriation of trade secrets
were “a substantial factor in causing [BCS’s] harm.” The court
instructed the jury that a “substantial factor” is “a factor that

16    The parties do not challenge the propriety of the jury
instructions.

                                28
a reasonable person would consider to have contributed to the
harm.” While it “must be more than a remote or trivial factor[,]
[i]t does not have to be the only cause of the harm.”
       BCS’s theory, articulated by Kennedy, was that BCS’s
harm went beyond the lost profits attributable to the merchants
who switched from BCS to USMS. Rather, defendants’
misconduct enabled USMS to start up a competing business
in the Chinese market that was better able to compete by using
BCS’s trade secrets and confidential information and by taking
BCS’s best salespeople who already had established relationships
in the market. Thus, in addition to losing profits from the
merchants USMS “poached,” BCS lost current and prospective
customers because USMS essentially was able to gain a
competitive advantage over BCS, that it otherwise would not
have had, through defendants’ misconduct. Because BCS’s
merchant lists and related information included the merchants’
sales volume and profitability, USMS could establish itself
quickly in the Chinese market by directing its efforts toward
the most profitable merchants without having to spend time
and resources to learn which merchants to target. BCS’s loss
of its key salespeople to USMS also affected its ability to keep
its current customers and sign up new ones, resulting in a decline
in the office’s productivity, which in turn would make it harder
to attract business.
       As they did in their motion for nonsuit, defendants argue
BCS presented evidence of only five El Monte merchants, and
one San Francisco merchant, having left BCS for defendants,
and offered no evidence in its case from which the jury could
find BCS suffered $6 million in lost profits caused by defendants.
Yet, when a “motion for nonsuit is made and denied and the

                               29
defendant then proceeds with his case, if the judgment thereafter
entered is supported by substantial evidence, regardless of which
party produced the evidence, the order denying the motion for
nonsuit will not be disturbed on appeal.” (Huber Tool Works, Inc.
v. Marchant Calculators, Inc. (1962) 204 Cal.App.2d 822, 824.)
We thus “review the sufficiency of the evidence to support the
jury’s verdict, not the sufficiency of the evidence at the time
of the nonsuit motion.” (Ewing v. Gill Industries, Inc. (1992)
3 Cal.App.4th 601, 613, citing Lowe v. San Francisco & N.W.
Ry. Co. (1908) 154 Cal. 573, 575–576.); see also Waller v. TJD,
Inc. (1993) 12 Cal.App.4th 830, 833–834 [“it has long been
established that error in overruling a demurrer, or denying a
motion for nonsuit, cannot be relied on to overturn a judgment
where the matter proceeded to trial and the evidence supports
the ultimate result”].) We conclude substantial evidence supports
BCS’s theory of damages and the amount the jury awarded.
              i.    Substantial evidence supports finding
                    defendants caused BCS to lose business
       First, substantial evidence supports a finding that
defendants’ wrongful conduct—the misappropriation of BCS’s
trade secret merchant information, solicitation of BCS’s
merchants (and Su’s providing their information to USMS),
and solicitation of BCS employees—was a substantial factor in
El Monte losing current and future business.
       The jury could infer from Hong’s testimony that BCS
spent a great deal of time, effort, and resources to determine
what merchants to target in the Chinese-speaking market and
in developing those relationships. It thus reasonably could find
USMS’s ability to enter the market without having to do the
legwork to determine which merchants to target—because it

                               30
had BCS’s protected merchant information—and without having
to train salespeople—because it took BCS’s best sales agents—
would have made it much easier for USMS to compete with BCS.
Although defendants’ damages expert Sheppard did not know
whether USMS could have set up a competing business without
BCS’s protected merchant information, he agreed USMS’s use
of the El Monte merchant list “may have” given USMS a “head
start” with its sales in the Chinese market. And, Hong testified
UMS—the actual provider of the credit card processing services—
did not begin competing with it in the Chinese market until
doing so through USMS. Moreover, Byun agreed he gave the
BCS merchant lists to Su, Chuang, and Lam—all former BCS
employees—so they could “cherry pick the high value, high profit
merchants.” We can infer the jury found not credible Byun’s
denial of using the list or expecting Su, Chung, and Lam to use it
to solicit USMS’s services, and that USMS in fact did so.
       The evidence showed that merchants who had been
receiving services from BCS through the El Monte office (and
San Francisco), or had applied to receive services, left and
became customers of USMS. Su, Byun, and Chuang all admitted
to switching BCS’s merchants to the services USMS sold. Su
admitted he referred merchants, and sent their BCS application,
and other confidential information, to USMS (and was paid
for those referrals) both while he still worked at BCS and after
he resigned. Byun also admitted to switching merchants with
whom he had had a relationship while at BCS to his company
after he left. Chuang testified about switching two BCS
merchants after he joined USMS. And Byun confirmed 162
merchants from USMS’s list of merchants matched the list
of merchants who had left BCS’s El Monte and San Francisco

                               31
offices. Viewing the totality of the evidence in the light most
favorable to the verdict, the jury reasonably could infer the
merchants who left BCS and signed up for services through
USMS would not otherwise have left.
       Moreover, although the jury instructions stated Chuang
and Byun admitted only to soliciting Su, substantial evidence
supports the inference that they and Su solicited BCS’s other
key sales employees.17 Byun conceded six of seven people
working for USMS in 2011—the year USMS began competing
with BCS by selling UMS’s services—were former BCS
employees. There was conflicting testimony about the reasons
for employees leaving the El Monte office, such as a decline
in morale after Byun and Chuang left, the arrest of an employee
for embezzlement, and animosity between Korean and Chinese
employees, but we can infer the jury disregarded any conflicting
evidence.
       And, when evaluating the evidence in the light most
favorable to BCS, the jury reasonably could conclude defendants’
solicitation of key BCS salespeople substantially contributed
to BCS’s lost profits. As Hong testified, BCS’s reputation and
goodwill were important to its ability to sign merchants. The
jury could infer the exodus of BCS’s key salespeople, along with
the loss of merchants to USMS, harmed BCS’s reputation making
it more difficult for its less capable salespeople to sign new
merchants. The jury also could infer from Hong’s testimony

17    The parties stipulated that, in addition to Su, BCS claimed
defendants solicited six or so other employees. Due to the rough
draft nature of the reporter’s transcript, we are unable to tell
exactly.

                               32
that the loss of personnel and decline in the El Monte office made
it harder for BCS to provide the type of on-demand service its
customers were used to, leading to more merchants leaving.
For example, Su spoke Mandarin enabling him to help Chinese-
speaking merchants on demand at all hours. After Su left BCS
to join USMS, no one left at BCS spoke Mandarin.
       We also can infer the jury found Lee’s mitigation testimony
credible: that BCS was unable to replace the sales agents it lost
with salespeople of the same caliber despite its efforts. There is
evidence in the record that BCS did not want to hire experienced
sales agents. But the jury could infer it might be harder for
BCS to teach an individual BCS’s way of doing business if
that individual had a different prior experience. Moreover,
Lee testified BCS attempted to hire salespeople “capable of
performing sales duties,” but did not require a background in
the industry, as BCS trained them.
       Based on the evidence, the jury thus reasonably could
find the drop in sales revenue, and thus profits, at the El Monte
office—when compared with the growth in the Westminster
office during the same period—was attributable to defendants’
wrongful conduct. Kennedy’s chart and the profit and loss
statements he reviewed were not in evidence. But BCS’s
business plans for years 2009 through 2014 and sales goals
summaries for years 2015 through 2018 were. They included
sales data for both El Monte and Westminster.18 Those

18     Kennedy testified he looked at BCS’s actual projections in
its business plans for 2008-2014 as a data point in determining
his loss calculation.

                                33
data confirm Kennedy’s testimony that: both El Monte and
Westminster were growing, with El Monte growing at a greater
rate than Westminster; El Monte’s merchant numbers and
gross revenues dropped significantly after USMS began
competing with it; and Westminster did not experience the
same decline but continued to increase its gross revenues.
       And, after El Monte’s sales dropped, the business plans
show it continued to have much lower sales revenues than the
Westminster branch. For example, El Monte had $3,127,616
in gross revenues in 2012, $2,834,184 in 2013, and $2,892,268
in 2014 versus $6,727,251, $6,774,412, and $7,572,830 for
Westminster for those same years, respectively. Hong also
testified the number of merchants at Westminster remained
about the same between 2011 and 2016, but the number of
merchants for El Monte almost halved.19
      Based on the totality of the evidence, the jury reasonably
could infer that, had defendants not engaged in wrongful conduct,
the El Monte branch not only would have retained the merchants
Sheppard identified in his analysis, but also would have lost
fewer merchants and continued to grow and gain new merchants
at a greater rate. The cases on which defendants rely are thus
distinguishable.20

19   The BCS 2017 sales goal summary indicates El Monte
had 583 live accounts in 2016 and Westminster had 2,070.
20   See, e.g., Unilogic, Inc. v. Burroughs Corp. (1992) 10
Cal.App.4th 612, 628 (nonsuit on cross-claim proper where
defendant’s recovery of restitution required it to show the
degree to which plaintiff was enriched by retaining and using
defendant’s proprietary information but defendant presented

                               34
              ii.  Substantial evidence supports the award
       As Kennedy’s calculation and data on which he relied
were not in evidence, we agree the jury could not reasonably find
BCS was entitled to $6 million in lost profits. (See, e.g., People
v. Sanchez (2016) 63 Cal.4th 665, 686, relied on by defendants
[expert may rely on hearsay in forming opinion and tell jury
he did so but cannot “relate as true case-specific facts asserted
in hearsay statements, unless they are independently proven
by competent evidence or are covered by a hearsay exception”].)21
That does not mean, however, there was insufficient evidence to
support the jury’s award of, at its highest number, $646,746 in
lost profits. “ ‘Where the fact of damages is certain, the amount
of damages need not be calculated with absolute certainty.
[Citations.] The law requires only that some reasonable basis
of computation of damages be used, and the damages may
be computed even if the result reached is an approximation.

no such evidence); Lewis Jorge Construction Management, Inc. v.
Pomona Unified School Dist. (2004) 34 Cal.4th 960, 977 (damages
for contractor’s lost profits on future bids it would not get due to
school district having impaired its bonding by terminating their
construction contract were not recoverable as general damages
as benefit of bargain was profit on district’s contract, and future
losses were not foreseeable to constitute special damages).
21    In Sanchez, however, the high court found the trial
court’s admission of the expert’s testimony was a prejudicial
confrontation clause error where the expert relied on hearsay
statements in a police report to establish defendant was a gang
member for purposes of proving a street gang enhancement.
(Sanchez, at pp. 698–699.)

                                35
[Citation.] This is especially true where . . . it is the wrongful
acts of the defendant that have created the difficulty in proving
the amount of loss of profits [citation] or where it is the wrongful
acts of the defendant that have caused the other party to
not realize a profit to which that party is entitled.’ ” (Sargon
Enterprises, Inc. v. University of Southern California (2012)
55 Cal.4th 747, 774–775 (Sargon).) Here, as we have concluded,
substantial evidence supports the fact of damages and that BCS’s
lost profits could be attributed to defendants’ wrongful conduct.
As we discuss, substantial evidence also supports the amount
awarded.
       Sheppard testified that, if he attributed defendants’
wrongful conduct as the reason the 162 merchants on defendants’
match list left BCS, BCS’s lost profits would be about $107,791.22
Based on the evidence, however, the jury reasonably could infer
there were more than 162 merchants that left BCS and joined
USMS. Kennedy noted defendants had not verified the accuracy
of the match list. He explained that, if the same merchant were
listed slightly differently in the two lists, then a match would
not result. He thus believed the list did not capture all BCS
merchants who transferred to USMS.

22     Of that amount, $7,358 related to merchants who left the
San Francisco office. Kennedy did not calculate any damages
based on lost profits from the San Francisco office because that
office recovered. Nevertheless, BCS still was harmed by the loss
of profits from merchants switching from the San Francisco office
to USMS. In any event, the sales data relating to the El Monte
and Westminster offices in BCS’s business plans support the
amount of the verdict.

                                36
      Other evidence supported Kennedy’s testimony. Su
confirmed defendants’ exhibit 2056, that listed the merchants
he had serviced at BCS who moved to USMS, was incomplete.
BCS also presented a rebuttal witness, Jake Sung, who worked
at USMS (or OMS) with Byun for a few months in 2015 after
having worked at BCS. Sung testified he converted 45 merchants
he had managed while at BCS to “Sam’s Company,” but Byun
didn’t ask him to do so. Lee testified twenty percent of those
merchants (nine) did not appear on defendants’ match list. In
any event, again, the jury reasonably could find BCS’s lost profits
were not limited to those attributable to merchants leaving BCS
for USMS.
      “ ‘[W]here the operation of an established business is
prevented or interrupted, as by a . . . breach of contract . . . ,
damages for the loss of prospective profits that otherwise might
have been made from its operation are generally recoverable for
the reason that their occurrence and extent may be ascertained
with reasonable certainty from the past volume of business
and other provable data relevant to the probable future sales.’
[Citation.] ‘Lost profits to an established business may be
recovered if their extent and occurrence can be ascertained
with reasonable certainty; once their existence has been so
established, recovery will not be denied because the amount
cannot be shown with mathematical precision. [Citations.]
Historical data, such as past business volume, supply an
acceptable basis for ascertaining lost future profits. [Citations.]
In some instances, lost profits may be recovered where plaintiff
introduces evidence of the profits lost by similar businesses
operating under similar conditions. [Citations.]’ [Citation.]”
(Sargon, supra, 55 Cal.4th at p. 774.)

                                37
       That’s what happened here. The testimony showed
the El Monte office already was established when defendants
engaged in their wrongful conduct, and the Westminster office
provided a “ ‘similar business[ ] operating under similar
conditions,’ ” from which the jury could ascertain El Monte’s
lost profits. BCS’s business plans and sales goals summaries
include actual sales data for both El Monte and Westminster.
As indicated in its question to the court, the jury was aware
of the BCS business plans that were in evidence. Based on our
review, the data in the admitted exhibits more than support
the jury’s damages award.
       That the jury used multiples of Sheppard’s calculation—
rather than engage in a more complicated math exercise—is of
no matter. We infer from the evidence that the jury agreed with
BCS’s theory of the case, and the evidence—drawing all favorable
inferences from it—reasonably supports its damages award.
       c.     Substantial evidence supports the jury’s implied
              finding that BCS timely filed its claim against UMS
              i.    Applicable law
       A plaintiff claiming misappropriation of trade secrets must
sue “within three years after the misappropriation is discovered
or by the exercise of reasonable diligence should have been
discovered.” (Civ. Code, § 3426.6.) “ ‘A plaintiff has reason to
discover a cause of action when he or she “has reason at least to
suspect a factual basis for its elements.” [Citations.] Under the
discovery rule, suspicion of one or more of the elements of a cause
of action, coupled with knowledge of any remaining elements,
will generally trigger the statute of limitations period.’ ” (Cypress
Semiconductor Corp. v. Superior Court (2008) 163 Cal.App.4th
575, 586 (Cypress).) A “plaintiff may discover, or have reason to

                                 38
discover, the cause of action even if he does not suspect, or have
reason to suspect, the identity of the defendant. [Citation.] That
is because the identity of the defendant is not an element of any
cause of action. [Citation.] It follows that failure to discover, or
have reason to discover, the identity of the defendant does not
postpone the accrual of a cause of action.” (Norgart v. Upjohn Co.
(1999) 21 Cal.4th 383, 399 (Norgart); see also Cypress, at p. 587.)
And, in a trade secrets case, “the statute of limitations . . . begins
to run when the plaintiff has any reason to suspect that the third
party knows or reasonably should know that the information is
a trade secret.” (Cypress, at p. 579.)
             ii.    Analysis
       The trial court denied UMS’s motion for JNOV, finding
BCS’s knowledge that UMS provided credit card processing
services to the other defendants “on its own is not [a] sufficient
basis for the court to conclude as a matter of law that BCS had
reason to suspect UMS had committed the wrongdoing alleged.”
The court found Hong’s and Lee’s testimony “provide[d] sufficient
basis for the trier of fact to conclude that BCS lacked reason
to discover its cause of action against UMS until much later in
the litigation.” The court also noted the jury found UMS liable
based on its ratification of the misappropriation of trade secrets.
It found the trial testimony provided substantial evidence for
the jury to find BCS lacked notice of a relationship between
UMS and the other defendants—until later—that would give
rise to a cause of action against UMS based on ratification.
       UMS contends the court erred because, under Norgart,
BCS’s filing of its trade secrets misappropriation cause of action
against the individual defendants and USMS in June 2012
established BCS knew it had a trade secret misappropriation

                                 39
claim against someone, even if it had not yet discovered UMS
was the wrongdoer. BCS thus had, at most, only until June 2015
to name UMS as a defendant.
       BCS contends that, until it learned “USMS had merged
with OMS, it did not know that UMS was involved in the
misappropriation of BCS’s trade secrets. BCS’s initial mistaken
belief that UMS could not be liable in the misappropriation of
trade secrets in this action was due to the misleading ISO
[a]greement produced by [d]efendants.” As it did below,
BCS argues that, because a registered ISO is an independent
company, if USMS were registered, it would be responsible for
its own actions and liabilities, and UMS could not be held liable
for USMS’s torts. Thus, BCS argues, it was not until Hong’s
discovery in September 2015—that Yoon was directly involved
in OMS—that BCS suspected UMS and Yoon “orchestrated
and ratified” USMS’s and the individual defendants’
misappropriation of BCS’s trade secrets.23
      The jury heard the testimony of Rianda, BCS’s industry
expert, before Hong’s. Rianda testified that, as a registered ISO,

23    UMS argues Hong decided to sue UMS when he learned
Exhibit 1061 governed the UMS-USMS relationship. UMS
argues Hong could not have decided to sue UMS based on having
seen the correct agreement because UMS did not produce it until
after BCS named UMS. UMS focuses on Hong’s testimony that,
he wasn’t “certain,” but thought he learned Exhibit 1061 was the
operative agreement “ ‘sometime in 2015.’ ” He testified earlier,
however, that he decided to name UMS after learning about the
USMS-OMS transaction. The jury thus reasonably could find
Hong simply was mistaken on the date when he learned about
Exhibit 1061.

                                40
USMS would own its residuals and be able to market its
services under its own name, as an independent company. A
nonregistered ISO, on the other hand, can advertise and operate
only in the name of a registered ISO, such as UMS and BCS;
it cannot have its own brand. Thus, BCS argues, although it
knew UMS was processing credit card payments for merchants
procured through USMS, defendants misled BCS to believe—
through their production during discovery of the ISO agreement
(Exhibit 1060)—UMS could not be liable for USMS’s or its agents’
torts as a matter of law. It is undisputed USMS never registered
with the card associations, as Exhibit 1060 required.
       True, accrual of a cause of action “does not wait ‘until a
plaintiff is in a position to present evidence which will (regardless
of what evidence the defense musters) establish facts which make
liability a legal certainty.’ ” (Cypress, supra, 163 Cal.App.4th at
p. 585.) Here, however, the evidence shows BCS was not simply
waiting to shore up its case against UMS. BCS did not seek
to hold UMS liable for its own misappropriation of BCS’s trade
secrets but for that of the other defendants. “Ratification is
the subsequent adoption by one person of an act which another
without authority assumed to do as his agent.” (Anderson v.
Fay Improvement Co. (1955) 134 Cal.App.2d 738, 748.) As
the trial court noted in its written ruling, “ ‘since ratification
contemplates an act by one person [o]n behalf of another,
there must exist at the time the unauthorized act was done
a relationship, either actual or assumed, of principal and agent,
between the person alleged to have ratified and the person
by whom the unauthorized act was done.’ ” (Ibid.)
       Defendants’ production of the wrong ISO agreement
demonstrated to BCS that UMS and USMS did not have an

                                 41
agency relationship, nor a purported or assumed one, that could
provide a legal basis to hold UMS vicariously liable for USMS’s
torts. Norgart is thus distinguishable. There, parents sued
defendant drug manufacturer for the wrongful death of their
daughter, who killed herself by overdosing on the defendant’s
prescription drug, outside the statute of limitations based on
the discovery rule. (Norgart, supra, 21 Cal.4th at pp. 389–390.)
Parents alleged the defendant concealed its drug’s dangerous
propensities. (Id. at p. 390.) The Court concluded parents’ claim
was untimely as they had reason to suspect the drug company of
wrongdoing on or shortly after their daughter’s death: they had
learned of her depression and suicide by overdose of defendant’s
drug, the drug’s packaging warned symptoms of depression
could be intensified, leading to suicidal tendencies, and the father
suspected “ ‘something wrong’ had happened to” his daughter
to cause her to take her own life. (Id. at pp. 405–407.)
       UMS also argues BCS had reason to suspect UMS as early
as October 2011 when it discovered Su’s emails and at least
by June 2012 when it filed its lawsuit. UMS relies on MGA
Entertainment, Inc. v. Mattel, Inc. (2019) 41 Cal.App.5th 554.
There, MGA contended the discovery rule applied to its
counterclaim for trade secrets misappropriation against Mattel
because, had Mattel provided truthful discovery responses, the
answers would have revealed its taking of MGA’s trade secrets.
(Id. at p. 558.) MGA did not file its counterclaim until after the
limitations period when it discovered Mattel’s misappropriation
through a former employee’s deposition. (Ibid.) The court held
MGA’s earlier filing of an unclean hands defense in response
to Mattel’s complaint demonstrated MGA already suspected
misappropriation. Mattel’s efforts to conceal its wrongdoing

                                42
thus did not toll the statute of limitations. (Id. at pp. 557–558,
564–565.)
       Here, in contrast, the evidence does not show as a matter
of law that BCS had reason to suspect UMS of wrongdoing by
2011 or 2012. UMS argues BCS had evidence “UMS knew it
was receiving former BCS merchants from former BCS salesmen
using BCS trade secrets” when it discovered Su’s emails
“disclosing its claimed secrets to UMS.” Those emails, however,
show Su disclosed BCS’s trade secret information to USMS,
not UMS. For example, Su sent Byun the trade secret
application and attachments for BCS merchants, and the UMS
applications the merchants had signed to switch services, but
the emails do not reflect Su or Byun forwarded the trade secret
BCS applications to UMS. There also are emails between UMS
and Byun about resolving a hold on a merchant’s account and
one about providing documentation to verify a charge a merchant
had made. These too do not show anyone at USMS sent UMS
BCS’s confidential merchant information. In any event, the
jury reasonably could find the email messages did not provide
a basis for BCS to suspect UMS knew USMS and the individual
defendants had used BCS’s trade secrets. For the same reasons,
that evidence does not establish as a matter of law that BCS
had reason to suspect UMS was directing or ratifying the other
defendants’ misappropriation of BCS’s trade secrets.
       UMS contends that, because BCS knew its trade secrets
had been misappropriated and used to switch its merchants to
UMS’s services, BCS’s claim against UMS accrued at the latest
when it sued the other defendants in June 2012, even if BCS was
unaware of UMS’s “ ‘role’ vis-à-vis the other [d]efendants” before
then. UMS relies on Vaca v. Wachovia Mortgage Corp. (2011)

                                43
198 Cal.App.4th 737, 744, for the proposition that once a plaintiff
learns of “facts sufficient to apprise [the plaintiff] of [the
plaintiff’s] injury,” the limitations period starts to run “even if
plaintiff was ignorant of defendants’ role in” the cause of action.
There, the plaintiff’s husband had procured fraudulent mortgage
loans in their minor children’s names. (Id. at pp. 740–741.)
The plaintiff sued defendants—the mortgagees—more than
three years after she sued the husband and more than a year
after the husband told her defendants’ representatives knowingly
allowed him to obtain the fraudulent mortgage loans. (Id. at
pp. 740–742, 744.) The plaintiff argued her suit was not
untimely as she did not know of their knowing participation
in the fraud until then. The appellate court held her causes of
action accrued when she sued her husband for fraud—by then
she suspected someone had wronged her children and “knew
the details of the fraudulent transactions well enough to allege
the underlying facts—including the mortgages obtained from
defendants—in her fraud complaint.” (Id. at pp. 743–744.) And,
even if defendants’ identities had been fraudulently concealed,
the plaintiff had learned of their identities in time to assert
timely causes of action against them but failed to do so. (Id.
at p. 741.)
       Here, the jury reasonably could find the emails discovered
in October 2011 did not show UMS was involved in the other
defendants’ trade secrets misappropriation in some yet-to-be-
discovered way to start the accrual of BCS’s cause of action
against UMS. In Vaca, in contrast, the plaintiff knew about
the fraudulent mortgages, even if she didn’t yet know the
mortgagees’ role in the fraud.

                                44
       Finally, UMS argues 2011 billing statements BCS filed
in support of its posttrial motion for attorney fees that show
its attorneys researched UMS’s “ ‘sales structure’ ” and prepared
an opinion letter about “reponde[a]t superior” imply BCS had
sufficient notice of its claim against UMS for its cause of action
to have accrued when it filed this action in June 2012. We
disagree. The fact its attorneys researched UMS’s potential
liability, but did not name it as a defendant, equally implies
BCS’s attorneys did not have a good faith basis in law or fact
to name UMS at that time.
       Accordingly, substantial evidence supports the jury’s
implied finding BCS had no reason to know UMS was involved
in the misappropriation of BCS’s trade secrets before September
2015 when it learned Yoon was a part owner in OMS.
2.     BCS’s appeal
       a.     Standards of review
       The issue of whether to impose liability on a successor
company is an equitable one for the trial court to decide. (Rosales
v. Thermex-Thermatron, Inc. (1998) 67 Cal.App.4th 187, 196.)
We review the trial court’s equitable determinations for abuse
of discretion. (Ho v. Hsieh (2010) 181 Cal.App.4th 337, 345.)
A court’s decision to modify a judgment also is left to the trial
court’s discretion. (See, e.g., Wolf Metals Inc. v. Rand Pacific
Sales Inc. (2016) 4 Cal.App.5th 698, 703 [discretion to modify
judgment to add judgment debtor].)
       “ ‘The discretion of a trial judge is not a whimsical,
uncontrolled power, but a legal discretion, which is subject
to the limitations of legal principles governing the subject of
its action, and to reversal on appeal where no reasonable basis
for the action is shown.’ ” (Sargon, supra, 55 Cal.4th at p. 773.)

                                45
“ ‘ “[W]e will only interfere with [the trial court’s] ruling if we find
that under all the evidence, viewed most favorably in support of
the trial court’s action, no judge reasonably could have reached
the challenged result.” ’ ” (Estate of Sapp (2019) 36 Cal.App.5th
86, 104.) To the extent the trial court’s exercise of discretion
relies on factual findings, we review those findings for
substantial evidence. (Schmidt v. Superior Court (2020)
44 Cal.App.5th 570, 581.) In doing so, we “accept all evidence
supporting the trial court’s order[,] . . . completely disregard
contrary evidence[,] . . . [and] draw all reasonable inferences
to affirm the trial court.” (Ibid.)
        b.     OMS successor liability
        “Upon merger . . . the separate existence of the
disappearing corporations ceases and the surviving corporation
. . . shall be subject to all the debts and liabilities [of the merged
corporation] . . . as if the surviving corporation had itself incurred
them.” (Corp. Code, § 1107, subd. (a).) As a “ ‘general rule . . .
where a corporation purchases, or otherwise acquires by transfer,
the assets of another corporation, the acquiring corporation
does not assume the selling corporation’s debts and liabilities.’ ”
(Daniell v. Riverside Partners I, L.P. (2012) 206 Cal.App.4th
1292, 1300.) An asset purchaser does assume the seller’s
liabilities, however, when “ ‘(1) there is an express or implied
agreement of assumption, (2) the transaction amounts to
a consolidation or merger of the two corporations, (3) the
purchasing corporation is a mere continuation of the seller, or
(4) the transfer of assets to the purchaser is for the fraudulent
purpose of escaping liability for the seller’s debts.’ ” (Id. at
pp. 1300–1301, quoting Ray v. Alad Corp. (1977) 19 Cal.3d 22,
28.)

                                  46
       BCS argued below, and on appeal, that OMS is subject
to successor liability under the second exception, because the
OMS-USMS transaction was a “de facto merger,” and the third
exception, which it refers to as a “ ‘sham sale.’ ” The trial court’s
ruling does not specify its basis, and the parties did not request
a statement of decision. We thus “infer the trial court made all
factual findings necessary to support the judgment.” (Fladeboe
v. American Isuzu Motors Inc. (2007) 150 Cal.App.4th 42, 58.)
The only issue is whether substantial evidence supports those
implied findings. (Michael U. v. Jamie B. (1985) 39 Cal.3d 787,
793.)
             i.    Evidence presented at bench trial
       OMS was formed in December 2012 and is a subsidiary
 of UMS, which is its majority member.24 OMS was a sub-ISO
 of UMS. Yoon had about an 80 percent ownership interest
 in UMS.
       The purchase of USMS’s assets
       Yoon’s deposition and live testimony conflicted with Lee’s
 deposition testimony as to who first had the idea of bringing
 OMS and USMS together. Yoon said it was Lee and Byun, and
 Lee said it was Yoon. Yoon estimated it took more than a year
 but less than three years from the time the idea first came up
 until the transaction closed.
       OMS and USMS entered into an asset purchase agreement
 effective March 27, 2015. UMS was the third-party beneficiary

24    In 2013, UMS had a 95 percent ownership interest in OMS
and Lee (OMS’s CEO) a five percent interest. After the purchase,
UMS’s and Lee’s interests were 70.35 and three percent,
respectively, and USMS acquired a 26.65 percent interest.

                                 47
 of the agreement. Fitzsimmons drafted the agreement on behalf
 of OMS. He represented OMS, through Yoon, but UMS paid his
 legal fees. Yoon was the manager at OMS, and Fitzsimmons
 understood he essentially controlled OMS by virtue of UMS’s
 ownership interest in OMS. He knew of no conflict between
 UMS and OMS. USMS was not represented. Byun acted on
 behalf of USMS. Fitzsimmons negotiated with him by phone.
       Fitzsimmons denied the transaction was a merger.
 Fitzsimmons explained that, in a merger, the acquiring party
 effectively acquires the stock of another company and with it,
 all the company’s assets and liabilities. In an asset purchase
 transaction, the purchaser acquires and assumes, respectively,
 specifically identified assets and liabilities. That was the
 objective of the asset purchase agreement between OMS
 and USMS. Fitzsimmons recalled OMS set out to acquire
 the residual streams from USMS’s merchant accounts.
       BCS’s industry expert Rianda testified a “merchant
 residual stream” or “residuals”—the monthly revenue paid
 based on the credit card processing of merchants associated
 with a particular ISO—is the “only really valuable asset” of
 a sub-ISO, such as USMS. When a party purchases a portfolio
 of merchants that make up a particular residual stream, the
 portfolio is often called a “ ‘static portfolio’ ” because no new
 merchants are added to it. Yoon confirmed the USMS residual
 stream OMS purchased was a “static revenue stream.”
       Fitzsimmons testified the parties determined the value
of the transaction and the nature of the consideration they
wanted—an equity interest in OMS—and gave him that
information, which he implemented in section 1.5 of the
agreement. The consideration included the issuance of 266,500

                                48
Class B common units in OMS to USMS, having an agreed value
of $544,696 and representing 26.65 percent of the currently
issued and outstanding equity interest in OMS. An additional
mechanism existed that provided for the issuance and vesting
of Class C stock to USMS based on the number of merchants
it brought over to OMS. Fitzsimmons discussed with Byun
the structuring of the consideration.
       The agreement also set forth the specific liabilities OMS
 agreed to assume, which included USMS’s obligations on
 four promissory notes it had issued to UMS. One note had
 a principal of $100,000 and the three other notes had a total
 balance of $152,244 in principal and interest remaining as
 of December 22, 2014. No other liabilities were assumed.
       Fitzsimmons knew, through Yoon or Byun, about the
 current lawsuit at the time of the transaction and expressly
 excluded it from the assumed liabilities. Section 1.4 of the
 asset purchase agreement expressly states that, “[o]ther than
 the Assumed Liabilities [defined as the balance in principal
 and interest on the promissory notes], [OMS] assumes no debts,
 liabilities or obligations of [USMS] of any kind or nature
 whatsoever . . . and [OMS] shall not be responsible for any
 obligations, liabilities, indebtedness, debts, liens, security
 interests or encumbrances of [USMS] in any way associated
 with the operation of the Business prior to the Closing Date.”
       As a condition to closing the deal, the parties also were to
 enter an amended and restated operating agreement for OMS.
 That agreement required UMS to make a capital contribution
 into OMS of “up to” $1,348,925. OMS’s entry into a three-year
 consulting agreement with USMS that paid USMS $96,000

                                49
a year for its management services also was a condition of
the transaction.
      Yoon testified about how the parties arrived at the
$544,696 “purchase price,” in OMS equity, for USMS’s assets.
He testified that, in the payment processing industry, it is
common to apply a multiplier of 10 to 30 percent to the residual
stream to determine the value of a merchant portfolio.25 Yoon
used a high multiplier of 30 times the monthly residual to value
the USMS residual stream OMS would acquire.
      Exhibit 2054 reflects the formula used to value USMS’s
merchant portfolio. It listed the monthly residuals UMS paid
to USMS and OMS as its sub-ISOs. By multiplying the average
of the last 12 months’ residuals by 2.5 (which is 30 times one
month), the calculation valued USMS’s residual stream at
$796,940. Yoon testified that because USMS still owed UMS
money from outstanding loans—the promissory note obligations
OMS assumed in the asset purchase agreement—they deducted
that debt from the value. Exhibit 2054 reflects the deduction of
USMS’s loan balance of $252,244 from the $796,940 asset value
to arrive at an asset value of $544,696. Yoon gave Fitzsimmons
that number, which represented 26.65 percent of the OMS
issued equity.
      In his deposition, Yoon testified he understood the loan
amounts USMS still owed UMS were taken into consideration
in the purchase price so that USMS owed no more debt. A loan

25   Rianda also understood a purchaser would apply a
multiplier to the monthly residual amount in arriving at a
purchase price.

                               50
 was in default at the time of the asset purchase. Yoon said no
 cash went to USMS for the purchase. Instead UMS “inject[ed a]
 million dollars” into OMS. He was sure USMS’s outstanding
 loan amount was part of the $1 million. Exhibit 2054 also shows
 a $1 million investment by UMS into the new OMS entity.
       Post-purchase evidence
       Because OMS is a subsidiary of UMS, UMS’s consolidated
financial statements include the OMS-USMS transaction. The
December 31, 2016 and 2015 statement includes a note indicating
the acquisition cost of USMS was $629,230, but the asset value
was $796,940 resulting in “a gain on bargain purchase” for the
year ending December 31, 2015. The note includes a paragraph
that states,
             “The Company believes that it was able to
             acquire USMS for less than the fair value of its
             asset because of the Company’s unique position
             as a market leader in this industry segment,
             and the Company’s long standing relationship
             with USMS as an . . . ISO . . . of the Company
             receiving operational and financial support
             from the Company since 2011. In addition,
             the Company was able to agree on a favorable
             purchase price in consideration for the
             continued employment of the workforce
             of USMS.”
 The December 31, 2017 and 2016 statement includes this
 same paragraph in its notes. Yoon testified the comment was
 the auditor’s comment, so he couldn’t say if it was correct or not.
 USMS might not agree with it.

                                51
      Another note in the 2017 statement reflects, according
 to Rianda’s understanding of it, the value of USMS’s merchant
 portfolio in 2017 as $1,221,940, up from $796,940 in 2016.
 Rianda testified he had never seen a residual stream increase
 by almost 50 percent over a three-year period. Because
 merchants usually have a three-year contract, and leave or
 go out of business as time goes on, Rianda opined a static
 portfolio residual typically would go down over time.
      Lee testified in his deposition that Su, Chuang, Byun, and
the other employees at USMS began working at OMS; USMS’s
phone line was forwarded to OMS or a new line was opened;
and USMS merchants became OMS merchants. Lee said Yoon
decided on OMS as the surviving company.
      Byun testified in his deposition that USMS “is no longer
around.” As of March 2015, USMS had operated as One Payment
Services, but to prevent confusion, USMS hadn’t notified
merchants of that fact. Byun said he owned approximately
20 percent of OMS and Chuang seven to eight percent. Byun’s
business card identifies him as “ ‘president,’ ” but he understands
Lee is the CEO, CFO, and secretary, Chuang is the sole “ ‘sales
vice president,’ ” and Su holds the title “ ‘sales manager.’ ”
             ii.    Substantial evidence supports the implied
                    finding of no de facto merger
      BCS argues, as it did below, that OMS’s purchase of
USMS was a “de facto merger.” Courts evaluate five factors
to determine whether an asset purchase is “the legal equivalent
of a merger: ‘(1) was the consideration paid for the assets
solely stock of the purchaser of its parent; (2) did the purchaser
continue the same enterprise after the sale; (3) did the
shareholders of the seller become the shareholders of the

                                52
purchaser; (4) did the seller liquidate; and (5) did the buyer
assume the liabilities necessary to carry on the business of
the seller?’ ” (Franklin v. USX Corp. (2001) 87 Cal.App.4th 615,
626 (Franklin), quoting Marks v. Minnesota Mining &
Manufacturing Co. (1986) 187 Cal.App.3d 1429, 1436.) “The
crucial factor in determining whether a corporate acquisition
constitutes either a de facto merger or a mere continuation is
the same: whether adequate cash consideration was paid for
the predecessor corporation’s assets.” (Franklin, at p. 625.)
       “[A]lthough other factors are relevant,” what “must
be present in order to avoid the general rule of successor
nonliability, is the payment of inadequate consideration.”
(Franklin, supra, 87 Cal.App.4th at p. 627, italics added.)
Accordingly, as defendants note, if sufficient evidence exists
for the trial court to have found USMS received adequate
consideration for its assets, we need not consider the other factors
to affirm the court’s implied finding that there was no de facto
merger.
       Substantial evidence supports the trial court’s implied
finding that adequate consideration was paid. True, OMS did
not pay cash for USMS’s assets—the asset purchase agreement
provided for USMS to receive an equity interest in OMS worth
$544,696. The evidence showed, however, that OMS did not pay
for USMS’s assets “solely” in OMS equity, as BCS asserts.
       Rather, the evidence showed the parties adequately valued
USMS’s asset—its monthly residual income stream—at $796,940
by applying a high multiplier of 30. The trial court reasonably
could find that amount did not undervalue USMS’s assets. Both
Yoon and Rianda testified application of a multiplier to the
average monthly residual stream was a standard practice in the

                                53
industry to arrive at a purchase price for a merchant portfolio.
Rianda also testified the higher the multiple, the greater the
residual stream’s perceived value. And, as a sub-ISO’s residual
stream represents its only asset of any real value, the trial
court reasonably could conclude that amount was adequate
consideration.
       The evidence also showed USMS received the same value
in consideration for its assets. BCS makes much of the notes
in UMS’s financial statements stating the acquisition price was
lower than that and below market value, as well as the 2017
statement valuing USMS’s merchant portfolio at $1.2 million.
However, the transaction documents and testimony show that,
in addition to the $544,696 in equity in OMS, the consideration
for the deal included OMS’s assumption of $252,244 in debt that
USMS owed UMS. Section 1.4 of the asset purchase agreement
specifically provided for OMS to assume USMS’s obligations
to UMS under four separate promissory notes. In listing those
obligations, the section states the total owed on three of the
promissory notes is $152,244. The fourth promissory note OMS
assumed is simply identified as having a principal amount of
$100,000 and having been issued to UMS in December 2014,
about three and a half months before the effective date of the
agreement. Those two amounts total $252,244—the same
amount deducted from the $796,940 valuation in Exhibit 2054,
resulting in a difference of $544,696—the amount listed as
consideration in the asset purchase agreement.
       And, when asked about the $100,000 not included in
the total under section 1.4, Yoon said UMS paid that $100,000
to a third party that had a “sub-ownership of USMS,” to “clear
up that . . . relationship.” Fitzsimmons also testified that

                               54
OMS’s assumption of USMS’s outstanding loans—effectively
relieving USMS of the obligation to pay them back—was part
of the consideration paid for USMS’s assets. The section on
consideration also states the equity interest is “[i]n consideration
for the purchase of the Assets and the assumption of the
Assumed Liabilities.” (Italics added.)
       Although the underlying issue was different, we find our
high court’s discussion of the value of an assumption of liabilities
in Beatrice Co. v. State Bd. of Equalization (1993) 6 Cal.4th 767
(Beatrice), relied on by defendants, instructive. There, the Court
determined a subsidiary corporation’s assumption of liabilities
for its parent corporation’s transfer of assets was sufficient
consideration to subject the transaction to sales tax. (Id. at
pp. 770–771.) As defendants state, our high court in Beatrice
held:
             “An agreement to assume liabilities is a
             contractual promise to perform the obligations
             of another. . . . It is a benefit to the promisee
             because the promisee may compel the promisor
             to perform, or, if the promisor does not do so,
             recover damages from the promisor in the
             amount or value of the obligations it is
             compelled to satisfy . . . . That agreement
             therefore has value equal to the cost to
             the promisee of paying its debts or fulfilling
             its obligations. That value constitutes
             consideration [under the law].” (Id. at pp. 782–
             783.)
       Moreover, the evidence showed USMS received as part
of the transaction a three-year guaranteed annual consulting fee

                                 55
of $96,000, and UMS obligated itself to infuse $1 to $1.35 million
into the new business, worth, as defendants note, between
$266,500 and $359,775 based on USMS’s 26.65 percent equity
interest. And, Yoon testified UMS in fact put $1 million into
the company. As defendants also note, this additional value
could explain the $1.2 million value assigned to the USMS
merchant portfolio in 2017.
       Thus, USMS received the following items of value for the
sale of its assets:
    • 266,500 Class B Common Units, a 26.65 percent interest,
       of OMS, valued at $544,696;
    • the assumption of $252,244 worth of debt;
    • the potential issuance and vesting of Class C stock;
    • $96,000 per year for a minimum of three years ($288,000
       total) in consulting fees; and
    • the benefit of $1 to $1.35 million injected into the new
       business, worth at least $266,500.
       The court reasonably could find the consideration USMS
received was adequate and would not have abused its discretion
in finding no successor liability based on a de facto merger on this
factor alone. Moreover, contrary to BCS’s implication, USMS’s
shareholders Byun and Chuang did not become “owners” of OMS;
USMS did. As owners of USMS, Byun may have seen Chuang
and himself as having ownership interests in OMS, but any
interest they had was indirect. And, with a three-year contract
to provide OMS with management services, USMS clearly did
not liquidate.

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            iii.    Substantial evidence supports the implied
                    finding that there was no sham sale
       BCS contends the asset purchase here was a sham because
OMS essentially continued on as USMS. “ ‘California decisions
holding that a corporation acquiring the assets of another
corporation is the latter’s mere continuation and therefore liable
for its debts have imposed such liability only upon a showing
of one or both of the following factual elements: (1) no adequate
consideration was given for the predecessor corporation’s assets
and made available for meeting the claims of its unsecured
creditors; (2) one or more persons were officers, directors, or
stockholders of both corporations.’ ” (Beatrice, supra, 6 Cal.4th
at p. 778.) “However, it is not dispositive that some of the same
persons may serve as officers or directors of the two corporations.
The relevant inquiries are whether the two corporations have
preserved their separate identities and whether recourse to the
debtor corporation is available.” (CenterPoint Energy, Inc. v.
Superior Court (2007) 157 Cal.App.4th 1101, 1121.)
       BCS argues UMS’s consolidated financial statements and
notes admit OMS acquired USMS for inadequate consideration.
BCS also refers to Rianda’s testimony that the revenue stream
from a static merchant portfolio typically goes down, not up.
We already addressed the substantial evidence that supports
finding OMS gave USMS adequate consideration for its assets
and the items that could account for the higher valuation in
the 2017 financial statement.
       As defendants note, the consideration aspect of the “mere
continuation” test focuses on whether the asset sale left USMS
unable to meet the claims of its creditors. Fitzsimmons testified
the amount of consideration was “important” in “every asset

                                57
purchase transaction . . . where there are liabilities left behind.”
He explained,
             “That is the case because an acquirer does not
             want to do a transaction whereby they are
             rendering the target, the seller, insolvent and
             potentially [to] be at risk of a fraudulent claim
             by creditors down the road. [¶] So part of the
             analysis that one goes through is whether or
             not the assets that are left behind, in terms of
             consideration . . . [l]ike, here, potential stream
             of income[,] are adequate to satisfy any
             potential liabilities, retained liabilities, these
             liabilities left behind.”
Fitzsimmons testified he went through that analysis on this deal.
He was satisfied USMS could pay any retained liabilities with
its equity interest in OMS plus the additional Class C units that
could vest over time entitling USMS to a profit distribution, as
well as the compensation it would receive for a minimum of three
years for consulting services.
      As defendants note, to satisfy its judgment against USMS,
BCS could charge and obtain a lien on USMS’s 26.65 percent
interest in OMS, and execute on any profits distributed to USMS.
(Code. Civ. Proc., §§ 708.310, 708.320.) Accordingly, substantial
evidence supports the trial court’s implied finding that USMS
did not “lack[ ] sufficient resources after the transfer of [its]
assets to meet the claims of its creditors.” (Beatrice, supra,
6 Cal.4th at p. 779.)
      Nor does the evidence establish OMS and USMS did not
“preserve their separate identities.” BCS argues OMS “has
practically the same shareholders and management as the seller,

                                58
and carries on the same business.” BCS refers to testimony
about UMS’s president Yoon having the idea to bring USMS and
OMS together and that he decided OMS would be the surviving
entity, as well as the fact that USMS’s employees began working
at OMS, and although its merchants became OMS merchants,
Byun did not tell the USMS merchants that the business was
now OMS. BCS also notes Byun’s testimony about his and
Chuang’s 20 percent and seven to eight percent ownership
interests, respectively, in OMS, their and Su’s new titles with
OMS, and USMS’s lack of existence.
       None of that evidence would compel the trial court to find
OMS a continuation of USMS requiring it to impose successor
liability. First, the trial court could find Yoon’s involvement in
structuring the transaction unsurprising given his ownership
interest in UMS and management of OMS. That OMS acquired
USMS’s merchants and began to service them also is not
untoward. OMS was in the same business as USMS—a
sub-ISO—before it acquired USMS’s merchant residual stream.
USMS may not have been providing merchant services anymore,
but it continued to exist as a consultant for OMS, and Byun and
Chuang did not actually have ownership interests in OMS. We
also can infer the trial court found credible Byun’s explanation
that USMS had not told its merchants about the change to OMS
to avoid confusion.
       BCS asserts the primary reason for the sale was for USMS
to avoid any liability resulting from this lawsuit but points to
no evidence that would compel that finding. We cannot conclude
the trial court acted outside the bounds of reason in finding OMS
had no successor liability.

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       c.     The amended judgment
       BCS contends the court erred in amending the judgment
to no more than $646,746, rather than make the award a
cumulative total of $1,077,910 based on the jury’s verdict of
$646,746 for breach of contract, $323,373 for misappropriation
of trade secrets, and $107,791 for breach of duty of loyalty. In
its ruling granting defendants’ motion to amend the judgment,
the court found it could not “discern from the evidence presented
at trial, or [BCS’s] pleading in this matter, that the awards
offered by the jury were separated according to different factual
predicates as [BCS] suggest[ed].” Rather, the court agreed with
defendants that the three causes of action “relied on essentially
the same factual bases or were included in the broad factual basis
underlying the First Cause of Action for Breach of Contract.”
We agree.
       “Regardless of the nature or number of legal theories
advanced by the plaintiff, he is not entitled to more than a single
recovery for each distinct item of compensable damage supported
by the evidence. [Citation.] Double or duplicative recovery for
the same items of damage amounts to overcompensation and is
therefore prohibited.” (Tavaglione v. Billings (1993) 4 Cal.4th
1150, 1158–1159.) “In contrast, where separate items of
compensable damage are shown by distinct and independent
evidence, the plaintiff is entitled to recover the entire amount
of his damages, whether that amount is expressed by the jury in
a single verdict or multiple verdicts referring to different claims
or legal theories.” (Id. at p. 1159.)
       BCS argues its causes of action were not duplicative
because the California Uniform Trade Secrets Act (UTSA) does
not preempt “ ‘contractual remedies, whether or not based upon

                                60
misappropriation of a trade secret, [or] . . . other civil remedies
that are not based upon misappropriation of a trade secret.’ ”
(Citing Civ. Code, § 3426.7, subd. (b); Angelica Textile Services,
Inc. v. Park (2013) 220 Cal.App.4th 495, 506.) BCS asserts its
breach of contract and breach of loyalty claims have independent
bases from its trade secret claim: the contract claim arose from
the individual defendants’ disclosure of confidential information
obtained during their employment, irrespective of whether the
information consisted of trade secrets, and their solicitation of
BCS’s employees, which impaired the El Monte office’s growth
and profitability independent from the misappropriation of
trade secrets; the misappropriation of trade secrets arose from
confidential information the individual defendants wrongfully
appropriated when they left BCS; and Su’s breach of loyalty was
dependent on his having moved BCS customers to its competitors
irrespective of whether he used trade secrets.
       Substantial evidence supports the court’s findings that
the same conduct underlies the three causes of action. The court
did not base its ruling on a finding that the UTSA preempted
BCS’s non-trade secret claims. As the court noted, BCS’s breach
of contract cause of action related to the individual defendants’
misappropriation of BCS’s “trade secret information, including,
without limitation, confidential customer lists and merchant
applications detailing the financial information of Plaintiff’s
merchants, by soliciting the services of UMS[ ] to Plaintiff’s
customers, by disclosing Plaintiff’s trade secrets to others,
by switching the credit card processing services of dozens
[of] Plaintiff’s merchants to UMS[ ], and by using Plaintiff’s
trade secret information to their own advantage, and to the
advantage of Plaintiff’s competitors.” The cause of action for

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misappropriation of trade secrets, in turn, attacked defendants’
use of “merchant lists, merchant files, compilations of BCS sales
roster files, merchant data files including merchant volume,
pricing information, profit margins, risk analysis and charge
back data, among other information.” And, the breach of loyalty
cause of action against Su was based on his moving a BCS
merchant to a competitor defendant.
       Thus, as the trial court found, the misappropriation of
trade secrets and breach of loyalty causes of action are based
on the same injury included in the breach of contract cause of
action—essentially, the use of BCS’s trade secrets and switching
of BCS’s customers to its competitor. BCS’s breach of contract
cause of action thus encompassed the same harm BCS suffered
due to defendants’ misappropriation of its trade secrets and
Su’s breach of his duty of loyalty. (See Barrett v. Superior Court
(1990) 222 Cal.App.3d 1176, 1181–1182, cited by defendants
[plaintiffs’ suit for wrongful death and three other causes of
action “consisted of but one true ‘cause of action,’ . . . for the
injury they had suffered as a result of the wrongful death of
the decedent . . . , and the four ‘causes of action’ were actually
counts based on the same primary right of plaintiffs and the
same primary duty of defendants, each of which merely alleged
additional circumstances out of which the primary right and
primary duty arose”].)
       Moreover, as defendants assert, during the trial, BCS
did not attempt to associate defendants’ particular conduct
with a specific cause of action. Indeed, BCS’s entire theory
of damages—that El Monte would have continued to grow, as
Westminster did, but for defendants’ wrongful conduct—did not
differentiate between the harm defendants’ misappropriation

                                62
of BCS’s merchant data had on its business versus the damage
incurred due to BCS’s loss of its employees from defendants’
solicitation of them. BCS’s expert testified he made no such
differentiation in his damages calculus.
       As the trial court noted, the jury was instructed to award
damages for breach of contract, under Civil Code section 3300,
in an amount that “ ‘will reasonably compensate [BCS] for the
harm caused by the breach.’ ” As substantial evidence supports
the trial court’s finding that there was no other item of harm
“ ‘not otherwise included within the compensatory award for
breach of contract,’ ” the court did not abuse its discretion when it
corrected the judgment to the limitations of the $646,746 award
for breach of contract. (Citing Walker v. Signal Companies, Inc.
(1978) 84 Cal.App.3d 982, 995–996 [modifying judgment where
compensatory award for breach of contract included harm based
on fraud judgment].)
                           DISPOSITION
       We affirm the judgment. The parties are to bear their own
costs on appeal.

      NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

                                      EGERTON, J.

We concur:

                   EDMON, P.J.                            LAVIN, J.

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