Date: 04-25-2018

Case Style:

Case Number: G053393

Judge: Moore

Court: California Court of Appeals Fourth Appellate District Division Three on appeal from the Superior Court, Orange County

Plaintiff's Attorney: Matthew L. Eanet and Laine Mervis

Defendant's Attorney: Laurence C. Hall and John Yi

Description: The parties appeal and cross-appeal a judgment after a jury trial in this
business dispute. Plaintiff and cross-defendant IIG Wireless, Inc. (IIG) obtained a
judgment of $401,860 against defendant and cross-complainant John Yi. IIG also sued
Lauren Kim, Yi’s fiancée, who moved for and was granted a nonsuit during trial. Yi
obtained a judgment on his cross-complaint for $122,000, resulting in a final judgment of
$279,860 in IIG’s favor.
Yi appeals the judgment and the court’s denial of his motion for judgment
notwithstanding the verdict (JNOV). In sum, he argues there was no substantial evidence
to support the verdict, the court made numerous errors with respect to the introduction of
evidence and its conduct of the trial, and the damage award of $122,000 on his crosscomplaint
was inadequate.
IIG argues there was substantial evidence to support the verdict, the JNOV
was properly denied, and the damage award on the cross-complaint should be reduced.
In its cross-appeal, IIG argues the court should not have granted nonsuit as to Kim.
Further, IIG contends the trial court erred by denying its motion to amend the complaint
and to admit certain expert testimony.
We conclude that neither the appeal nor the cross-appeal have any merit,
and we therefore affirm the judgment in its entirety.
I
FACTS
A. Underlying Facts
IIG was formed in June 2007, and known under its name at the time,
Unlimited PCS, Inc.1
It is a distributor and retailer for cellular phones, equipment and
plans for MetroPCS, a national carrier. The company has over 96 stores in southern

1
The company changed its name in 2014, but for ease of reading and to avoid confusion
with MetroPCS, we refer to it as IIG throughout.
3
California and in several other states, and operates stores both directly and under a dealer
program with MetroPCS.
Before IIG’s official formation, Yi had been doing business with MetroPCS
and was the owner of several out-of-state dealers. Yi, Jimmy Hu, and Seung Lee founded
IIG to become another dealer for MetroPCS with stores in southern California. Neither
Hu nor Lee had experience in the industry.
Yi, Hu, and Lee were IIG’s three founding shareholders. Lee provided
$400,000 in investment capital, Hu was general manager of IIG, and Yi was chief
executive officer (CEO) and chairman of the board.
Between June 2007, when IIG was formed, and the end of 2008, the
company opened 30 stores. Yi signed personal guarantees with MetroPCS for product to
sell, as well as the leases for the retail locations, while Hu and Lee did not.
The distribution of stock shares in the company is a major point of dispute.
IIG claims that it initially issued 100,000 common shares of stock, with 20,000 going to
Yi, and 40,000 each to Hu and Lee. A stock ledger and unsigned stock certificates dated
June 14, 2007, show this distribution, as does an IRS form signed by each shareholder
and attested to by Yi. Hu and Lee also testified to this at trial.
Yi testified that initial discussions had set forth a 40/40/20 allocation of
shares, as IIG asserts, but because Yi was required to personally guarantee all leases, Yi
requested and an agreement was reached that the share distribution would be 30,000 each
to Hu and Lee and 40,000 to Yi. A September 27, 2007 document entitled “Shareholder
Agreement of Unlimited PCS, Inc.” (the 2007 agreement), is part of the record. The first
paragraph states the agreement “dated September 27, 2007, is among John Yi, Jimmy Hu,
and Seung Lee each holding 40 %, 30 %, and 30 % shares of stock . . . .” Each page
includes three sets of initials, and what appears to be the signature of each individual.
Hu testified that he and Yi met with MetroPCS in November 2007, at
which point the company had opened three stores. Hu was concerned about expanding
4
quickly, and specifically, about where the funding would come from. Lee was initially
opposed to any expansion. Yi and Hu discussed bringing in an additional investor. Hu
and Lee testified that Yi told them that MetroPCS wanted Yi to be a majority shareholder
in order to expand and launch new stores. Yi denied making such a statement, testifying
that nobody at MetroPCS ever told him that.
Hu and Lee testified that based on the representation that MetroPCS
required him to be majority shareholder, they agreed to each contribute 5,000 shares to
Yi, and another 5,000 shares to IIG. Thus, the split among the shareholders would be 30
percent each, with 10 percent held by IIG as treasury shares.2
Hu and Lee testified,
however, that due to MetroPCS’s purported requirement that Yi was to be the majority
shareholder, they agreed to put the 10,000 shares of treasury stock in his possession. Hu
testified that Yi said he would return the treasury stock when he stepped down as CEO;
that he would return the stock when other shareholders requested he do so; and that he
would return the stock to future key employees. Lee testified similarly. Hu also testified
that Yi understood any dividends on the 10,000 treasury shares would also be held in
treasury.
The record includes another shareholder agreement, this one dated January
1, 2008 (the 2008 agreement). It names Yi, Hu, and Lee, as well as an additional
individual, new investor Ho Hyun Chung. The agreement and the signature page state
the percentage of interest held by each shareholder: 41 percent to Yi, 10 percent to Hu,
25 percent to Lee, and 24 percent to Chung, who made a $400,000 investment. Prior to
the execution of this agreement, Yi, Hu, and Lee had various conversations about where
Chung’s shares should come from. Hu eventually offered 20,000 shares to Chung, but
was concerned about his financial benefit if the company was successful. Hu testified Yi

2
According to testimony at trial, “treasury shares” are shares held by the company,
usually for future use as compensation or bonuses to employees.
5
told him he would compensate Hu for the shares. In addition to Hu’s shares, 4,000 of
Lee’s shares went to Chung. Hu and Lee also transferred 500 shares each to Yi.
IIG’s controller, Luke Cheon, also testified that Yi told him that he held
10,000 treasury stock shares that Yi could transfer to key employees. A 2010 e-mail
from Chung, the new investor, to Cheon, Yi, Hu, and Lee was about proposed language
for a written recap of a video meeting. One of the items addressed was the “10%
reserved shares,” and stated in part that Yi “stated and it was fully acknowledged by the
shareholders that [Yi] has every right of the reserved shares distribution for the company
when necessary under his discretion.”
For his part, Yi testified that no treasury stock existed, and he replied to
Chung’s e-mail saying so. He testified the changes to the allocation of shares were in
light of the personal guarantees he had to execute.
In 2009, an amendment (the 2009 amendment) to the shareholder
agreement was executed, bringing in another new investor, Seung Hee Ko. Ko invested
$400,000 in return for 21,951 shares, which came from Yi, Hu, and Lee. After the
amendment, Yi owned 33.6 percent of the shares; Hu 8.2 percent; Lee 20.5 percent;
Chung 19.7 percent; and Ko 18 percent. There was no mention of treasury shares or
reserved shares in the 2009 amendment.
In February 2010, Chung, the 2008 investor, sent an e-mail to Yi which
addressed several issues. This e-mail was copied to numerous others. One of the issues
addressed was the alleged treasury shares. Chung stated, under the heading “10% share
contribution to [IIG]” as follows: “This was a promise from CEO [Yi] and we would like
to ask you to make the contribution in Ql 2010. This is because we believe it is fair for
the company to take & accumulate the dividend for future use. We do not believe it was
a misheard or misunderstanding, and accepted it as a promise of CEO. Please let us
remind you that the investments and personal loans were made based on your promises
and this was one of them. In addition as an investor I questioned about how the shares
6
were divided and two reasons were heard. One was that it is better for the company that
you have majority share for the relationship with Metro PCS – as CEO of UPCS – to
bring in better, favorable deals and the other was that you would contribute 10% to the
company In a few years and you would not really care about the %.”
According to IIG, Yi did not respond, but eventually transferred 4,166 of
what IIG claimed was treasury stock to Cheon, the controller. Yi continued to hold, IIG
alleged, 5,834 shares of treasury stock.
Shortly thereafter, in the first quarter of 2010, Chung sold his shares to IIG
in return for his $400,000 investment. There was a disagreement about the disposition of
the shares between Lee, Hu, and Yi. Eventually they agreed to transfer sufficient shares
to Hu so that he would once again own 20,000 shares, as he had before the 2009
amendment. At a shareholder meeting in December of that year, a lengthy discussion
was held about the status of the stock. An agreement was eventually reached that made
no mention of treasury shares. Subsequent board actions, meetings, and tax returns also
make no mention of treasury shares.
IIG claims Yi committed numerous other misdeeds during his time as CEO,
including directing IIG to issue payments of $48,000 to Kim, who was his girlfriend at
the time (and was his fiancée at the time of briefing). IIG claimed Kim did not perform
any work for IIG and was not an employee, but stated that Yi directed Cheon, the
controller, to direct IIG’s payroll company to “convert” Yi’s dividend payments to Kim’s
name. According to IIG, it had to pay withholding taxes on behalf of Kim in excess of
$5,000. IIG also claimed Yi caused IIG to pay rent on an apartment after IIG had
specifically terminated such authorization. Further, IIG contends Yi caused IIG to enter
into agreements guaranteeing the debt of other businesses.
Yi contends he was “effectively terminated” in May 2013, when he was not
reelected as CEO, president, or chairman. He remained on the board as a director. Yi
continued holding his shares until he transferred all remaining shares (including what IIG
7
contends were 5,834 treasury shares) to his ex-wife in connection with their divorce
agreement in January 2014. IIG repurchased the shares in 2014 at a price of $41.10 per
share, for a total of $1,285,000.
IIG contends that in October 2013, while Yi was still a shareholder, he and
Kim formed a competing company in Colorado in contravention of the 2008 Agreement.
Yi claims that IIG owed him unpaid dividends from 2010-2013.
B. Procedural History
IIG filed the initial complaint in this action in November 2013. In June
2014, it filed a second amended complaint (the complaint) against Yi and Kim. The
complaint pleaded causes of action for breach of fiduciary duty, fraud, promissory fraud,
conversion, interference with prospective economic advantage, unjust enrichment, unfair
competition (Bus. & Prof. Code, § 17200), and civil conspiracy. The gravamen of the
claims was Yi’s purported failure to return the alleged treasury shares and dividends to
IIG upon his departure. IIG also alleged breach of fiduciary duty for forming the
competing Colorado company; it also claimed various other sums, including $22,000 it
had paid for Yi’s corporate apartment and a $50,000 consulting fee; damages for a 2008
cross-guarantee signed by Yi; and for payroll taxes regarding the funds paid to Kim.
Kim was named only in the causes of action for conversion, unjust
enrichment, unfair competition, and conspiracy. The conversion claim alleged $400,000
in damages for Yi and Kim’s causing IIG “to pay each of them certain sums of monies to
which they were not entitled.”
Yi cross-complained, alleging a common count for money and unjust
enrichment (seeking the remedy of an accounting).
In due course, the matter proceeded to trial. IIG pursued its claims for
breach of fiduciary duty, fraud, promissory fraud, and conversion against Yi and Kim,
basing its claims primarily on the treasury shares and dividends on them; the formation of
8
the allegedly competing Colorado corporation; the apartment; the consulting fee; the
payroll taxes with respect to Kim; the 2008 cross-guarantee; and conspiracy. Yi sought
recovery of dividends and other distributions from 2010 to 2013.
At the close of evidence, Kim sought, and the court granted, her motion for
nonsuit. The court found there was insufficient evidence to proceed on any theory.
IIG dropped its claims regarding the cross-guarantee and consulting fee.
IIG alleged damages involved primarily the unreturned treasury shares ($239,778) and
dividends on them ($139,135); $22,947 for the apartment; $5,288 in payroll taxes; and
$1.62 million for the creation of the Colorado corporation. Yi sought $334,418 for
unpaid dividends and distributions.
The jury returned a special verdict. They concluded Yi owed IIG $401,860
on its claims for fraud, promissory fraud, breach of fiduciary duty, and conversion. This
comprises the amount sought by IIG for the treasury shares and dividends on them, plus
the corporate apartment. It did not include damages sought for the creation of the
Colorado corporation or the $5,288 in payroll taxes. As to the cross-complaint, the jury
found IIG owed Yi $122,000, which comprised $45,000 in withheld dividend checks in
2013, and $77,000 for a withheld shareholder tax payment. Judgment was entered.
Both parties filed various posttrial motions. Yi filed a motion for new trial
and for JNOV on the complaint, and for motion for new trial on the cross-complaint as to
damages. IIG filed a motion for new trial, or in the alternative, remittitur, on its
complaint against Yi, and for new trial regarding Kim. The trial court denied all posttrial
motions.
9
II
DISCUSSION
A. Yi’s Appeal
1. Standard of Review
Most of Yi’s arguments on appeal appear to be based on the trial court’s
denial of his motion for JNOV, which is essentially the same as appealing the judgment
itself for a lack of substantial evidence. “A fundamental principle of appellate practice is
that an appellant ‘“must affirmatively show error by an adequate record. . . . Error is
never presumed. . . . ‘A judgment or order of the lower court is presumed correct. All
intendments and presumptions are indulged to support it on matters as to which the
record is silent . . . .’ [Citation.]” [Citation.]’” (Null v. City of Los Angeles (1988) 206
Cal.App.3d 1528, 1532-1533; see State Farm Fire & Casualty Co. v. Pietak (2001) 90
Cal.App.4th 600, 610.)
The purpose of a motion for JNOV “‘is not to afford a review of the jury’s
deliberation but to prevent a miscarriage of justice in those cases where the verdict
rendered is without foundation.’ [Citation.]” (Sukoff v. Lemkin (1988) 202 Cal.App.3d
740, 743.)
When reviewing a JNOV, the appellate court will ordinarily use the same
standard the trial court uses in ruling on the motion and determine “whether it appears
from the record, viewed most favorably to the party securing the verdict, that any
substantial evidence supports the verdict.” (Trujillo v. North County Transit Dist. (1998)
63 Cal.App.4th 280, 284.) The trial court properly denies the motion if there is any
substantial evidence, or reasonable inferences to be drawn from the evidence, to support
the verdict. (Ibid.) Our determination with respect to the presence of the requisite
substantial evidence is de novo. (Hirst v. City of Oceanside (2015) 236 Cal.App.4th 774,
782.)
10
Substantial evidence may be contradicted or uncontradicted. (Hauter v.
Zogarts (1975) 14 Cal.3d 104, 110.) “‘Substantial evidence’ is evidence of ponderable
legal significance, evidence that is reasonable, credible and of solid value.”
(Roddenberry v. Roddenberry (1996) 44 Cal.App.4th 634, 651.) But we do not weigh the
evidence or judge the credibility of witnesses. (Hauter v. Zogarts, supra, 14 Cal.3d at
p. 110.)
2. Parol Evidence
Yi’s primary argument is that evidence of what he told Hu and Lee with
respect to the treasury shares was inadmissible parol evidence, because all of the
shareholder agreements were integrated contracts, and the oral statements Yi allegedly
made contradicted the written terms of those agreements.
The parol evidence rule is a rule of substantive law that prevents the
introduction of extrinsic evidence to vary, alter, or contradict the terms of a written
agreement. (Code Civ. Proc., § 1856, subd. (a);3
Gerdlund v. Electronic Dispensers
International (1987) 190 Cal.App.3d 263, 270.) The operation of the parol evidence rule
is a question of law when no evidentiary conflict exists. (Consolidated World
Investments, Inc. v Lido Preferred Ltd. (1992) 9 Cal.App.4th 373, 378-379.)
Generally, the parol evidence rule states that evidence of an oral agreement
inconsistent with a written contract is inadmissible even where the contract is not
integrated. This rule is based on sound logic and policy; when a contract is reduced to
writing, it is presumed to contain all of the material terms, and it cannot reasonably be
presumed that the parties would intend two contradictory terms to be part of the same
agreement. (Gerdlund v. Electronic Dispensers International, supra, 190 Cal.App.3d at
p. 271.) Therefore, the parol evidence rule “is not merely a rule of evidence excluding

3
Subsequent statutory references are to the Code of Civil Procedure unless otherwise
indicated.
11
precontractual discussions for lack of credibility or reliability. It is a rule of substantive
law making the integrated written agreement of the parties their exclusive and binding
agreement no matter how persuasive the evidence of additional oral understandings.
Such evidence is legally irrelevant and cannot support a judgment. [Citation.]” (Marani
v. Jackson (1986) 183 Cal.App.3d 695, 701.)
We must first determine whether the shareholder agreements were
integrated. A merger clause, such as the one present in each iteration of the shareholder
agreement, is generally conclusive on the issue of integration. (Banco Do Brasil, S.A. v.
Latian, Inc. (1991) 234 Cal.App.3d 973, 1001.) The 2007 agreement, for example,
states: “This instrument constitutes the entire Shareholder Agreement . . . and correctly
sets forth the rights, duties, and obligations of each Shareholder . . . . Any prior
agreements, promises, negotiations, or representations concerning the Agreement’s
subject matter not expressly set forth in this Agreement are of no force or effect.” The
2008 agreement includes a substantively similar clause, as does the 2009 amendment.
As to whether the documents vary, alter, or contradict the terms of a written
agreement, the statements Yi made to Hu and Lee, and the existence of the treasury
shares themselves, are contradicted by the written agreements in several ways. The
agreements each specify the percentage of shares owned by each investor; there is no
mention of IIG owned treasury shares. The 2007 agreement states that written approval
of all shareholders is needed to approve the issuance of “shares of any class or other
rights relating to the issuance of shares of the Corporation.” The 2008 agreement, and
the 2009 amendment, specifically states the shares listed by percentage to each
shareholder “constitute all of the issued and outstanding capital stock of the corporation.”
IIG does not contest the existence of integrated agreements. It argues
instead that an exception to the parol evidence rule permits the introduction of extrinsic
evidence to establish fraud. The fraud exception to the parol evidence rule is codified at
section 1856, subdivision (g): “This section does not exclude other evidence of the
12
circumstances under which the agreement was made or to which it relates, as defined in
Section 1860, or to explain an extrinsic ambiguity or otherwise interpret the terms of the
agreement, or to establish illegality or fraud.”
Not long ago, in Riverisland Cold Storage, Inc. v. Fresno-Madera
Production Credit Assn. (2013) 55 Cal.4th 1169 (Riverisland), the California Supreme
Court overruled Bank of America etc. Assn. v. Pendergrass (1935) 4 Cal.2d 258
(Pendergrass). Pendergrass had limited the fraud exception to the parol evidence rule by
requiring that evidence offered to prove fraud “must tend to establish some independent
fact or representation, some fraud in the procurement of the instrument or some breach of
confidence concerning its use, and not a promise directly at variance with the promise of
the writing.” (Id. at p. 263.) Thus, under Pendergrass, external evidence of promises
inconsistent with the express terms of a written contract were not admissible, even to
establish fraud.
In Riverisland, the plaintiffs appealed after a grant of summary judgment.
The plaintiffs alleged they negotiated an agreement to restructure their debt to a
production credit association. They alleged the credit association’s representative told
them that their loan would be extended for two years in exchange for additional collateral
consisting of two ranches. These assurances were repeated when they signed the
restructuring agreement, which they signed without reading. The agreement, however,
provided only three months of forbearance and identified eight parcels as additional
collateral. (Riverisland, supra, 55 Cal.4th at p. 1173.)
The plaintiffs sued for fraud, negligent misrepresentation, rescission and
reformation of the agreement. The trial court granted summary judgment on the ground
the fraud exception to the parol evidence rule did not allow admission of promises at
odds with the terms of a written agreement. (Riverisland, supra, 55 Cal.4th at p. 1173.)
The essential basis of the plaintiffs’ claims was that the written agreement did not reflect
the actual agreement between the parties. (Ibid.)
13
The California Supreme Court disagreed with the trial court’s ruling.
“Despite the unqualified language of section 1856, which broadly permits evidence
relevant to the validity of an agreement and specifically allows evidence of fraud, the
Pendergrass court decided to impose a limitation on the fraud exception. The facts of
Pendergrass are similar in certain respects to those here. Borrowers fell behind on their
payments. They and the bank executed a new promissory note, which was secured by
additional collateral and payable on demand. Soon after it was signed, the bank seized
the encumbered property and sued to enforce the note. In defense, the borrowers claimed
the bank had promised not to interfere with their farming operations for the remainder of
the year, and to take the proceeds of those operations in payment. They alleged that the
bank had no intention of performing these promises, but made them for the fraudulent
purpose of obtaining the new note and additional collateral. [Citation.]” (Riverisland,
supra, 55 Cal.4th at p. 1175.)
The court, after extensively reviewing the holding of Pendergrass and the
reactions to it over the years, reasoned: “There are multiple reasons to question whether
Pendergrass has stood the test of time. It has been criticized as bad policy. Its limitation
on the fraud exception is inconsistent with the governing statute, and the Legislature did
not adopt that limitation when it revised section 1856 based on a survey of California
case law construing the parol evidence rule. Pendergrass’s divergence from the path
followed by the Restatements, the majority of other states, and most commentators is
cause for concern, and leads us to doubt whether restricting fraud claims is necessary to
serve the purposes of the parol evidence rule.” (Riverisland, supra, 55 Cal.4th at pp.
1179-1180.) In addition to other issues with Pendergrass, the court noted that cases
predating it had routinely stated that parol evidence was admissible to prove fraud. One
such case, Ferguson v. Koch (1928) 204 Cal. 342, 347, stated: “[I]t was never intended
that the parol evidence rule should be used as a shield to prevent the proof of fraud.”
14
“Accordingly, we conclude that Pendergrass was an aberration. It
purported to follow section 1856 [citation], but its restriction on the fraud exception was
inconsistent with the terms of the statute, and with settled case law as well. Pendergrass
failed to account for the fundamental principle that fraud undermines the essential
validity of the parties’ agreement. When fraud is proven, it cannot be maintained that the
parties freely entered into an agreement reflecting a meeting of the minds. Moreover,
Pendergrass has led to instability in the law, as courts have strained to avoid abuses of
the parol evidence rule. The Pendergrass court sought to ‘“prevent frauds and perjuries”’
[citation], but ignored California law protecting against promissory fraud. The fraud
exception has been part of the parol evidence rule since the earliest days of our
jurisprudence, and the Pendergrass opinion did not justify the abridgment it imposed.
For these reasons, we overrule [Pendergrass], and its progeny, and reaffirm the venerable
maxim stated in Ferguson v. Koch. . . : ‘[I]t was never intended that the parol evidence
rule should be used as a shield to prevent the proof of fraud.’” (Riverisland, supra, 55
Cal.4th at p. 1182.)
Yi argues that Riverisland applies only where the validity of the agreement
is at issue, which would limit it to breach of contract cases seeking to rescind the
agreement. Yi cites two cases interpreting Riverisland to support his contention: Julius
Castle Restaurant, Inc. v. Payne (2013) 216 Cal.App.4th 1423 (Julius Castle), and Thrifty
Payless, Inc. v. The Americana at Brand, LLC (2013) 218 Cal.App.4th 1230 (Thrifty
Payless). Both of these cases were landlord/tenant disputes involving integrated lease
agreements. In Julius Castle, the plaintiffs signed a lease to operate a restaurant in San
Francisco. They inspected the property and carefully considered and negotiated the terms
of the lease, but the Court of Appeal nonetheless ruled that evidence that the lessors made
oral representations contrary to the terms of the contract were admissible under the fraud
exception to the parol evidence rule. (Julius Castle, supra, 216 Cal.App.4th at pp. 1439-
1440.) “Defendants also argue that Riverisland and the authorities it cites ‘require that
15
the circumstances of each case and the bargaining power of [each party] be considered.’
Defendants also claim that ‘inquiry into the relative sophistication of the parties is
simple.’ Perhaps. In our view, however, our high court sought the opposite result,
namely, to create certainty and consistency by eliminating altogether the judicially
created exception to section 1856, subdivision (g).” (Id. at p. 1441.) The court suggested
that after Riverisland, the parties in a fraud action would be better served by focusing on
addressing other elements of that tort, including the heightened pleading requirements
and the element of justifiable reliance. (Id. at pp. 1441-1442.)
In Thrifty Payless, the landlord provided estimates to the tenant regarding
its likely share of common area expenses during lease negotiations, but the estimates
were not included in the lease. The tenant’s share turned out to be higher, and the tenant
sued for fraud, alleging the landlord knew the common area expenses were material to
the tenant and intentionally and negligently misrepresented them. (Thrifty Payless,
supra, 218 Cal.App.4th at pp. 1234-1236.) The landlord’s demurrer, in part, argued that
the parol evidence rule prohibited evidence of its “‘estimates.’” (Id. at p. 1237.)
Reversing the trial court’s decision, the Court of Appeal concluded: “Here,
under Riverisland . . . extrinsic evidence is admissible to establish fraud or negligent
misrepresentation in the face of the lease’s integration clause. Thus, Thrifty can allege
both intentional and negligent misrepresentations based upon Americana’s grossly
inaccurate estimates.” (Thrifty Payless, supra, 218 Cal.App.4th at pp. 1241-1242, fn.
omitted.)
Neither of these cases support Yi’s assertion that evidence of fraud is only
admissible in cases where the validity of the agreement is at issue. The plaintiffs in
Julius Castle did not seek to rescind the contract for invalidity; they sued for breach of
contract (and lost) and for fraud (intentional and negligent misrepresentation), and won.
(Julius Castle, supra, 216 Cal.App.4th at p. 1441.) The plaintiff in Thrifty Payless sought
16
damages and rescission of the lease in its complaint, but the court said nothing about
limiting the use of the parol evidence to the rescission claim.
Indeed, such an argument seems to us to contradict Riverisland itself. It
simply seems to partly restate the Pendergrass rule that evidence of fraud “must establish
. . . some fraud in the procurement of the instrument . . . and not a promise directly at
variance with the promise of the writing.” (Pendergrass, supra, 4 Cal.2d at p. 263, italics
added.) While the court noted in Riverisland that if “fraud is proven, it cannot be
maintained that the parties freely entered into an agreement reflecting a meeting of the
minds” (Riverisland, supra, 55 Cal.4th at p. 1182), the court said nothing about limiting
its holding to cases where rescission or voiding the contract was the only remedy sought.
What it did say was that “Pendergrass was an aberration. . . . [I]ts restriction on the fraud
exception was inconsistent with the terms of the statute, and with settled case law as
well.” (Ibid.) “The fraud exception has been part of the parol evidence rule since the
earliest days of our jurisprudence, and the Pendergrass opinion did not justify the
abridgment it imposed.” (Ibid.)
Accordingly, we find the overriding concern expressed by the court was
that the Pendergrass rule, “while intended to prevent fraud, . . . may actually provide a
shield for fraudulent conduct.” (Riverisland, supra, 55 Cal.4th at p. 1172.) The court’s
intention in Riverisland was to bring its case law into line with section 1856, subdivision
(g), which states: “this section does not exclude other evidence . . . to establish . . .
fraud.” As the court noted, in Riverisland “[c]onspicuously omitted was any mention of
Pendergrass and its nonstatutory limitation on the fraud exception.” (Id. at p. 1179.)
Therefore, we decline to give Riverisland the narrow reading Yi advances.
Although IIG was not attempting to rescind the shareholder agreements, it set out to
prove that Lee and Hu had entirely different understandings about the meaning of those
agreements based on Yi’s allegedly fraudulent misrepresentations. We conclude the
statements were admissible to prove fraud, and the jury apparently found the testimony of
17
Lee and Hu credible. Accordingly, we find the court did not err by denying Yi’s motion
for JNOV on this basis.4
We also need not consider Yi’s argument that the jury’s verdict
cannot stand in the absence of the parol evidence.
3. Other Issues Relating to Substantial Evidence
Yi next raises a potpourri of issues regarding the purported lack of
substantial evidence. He first claims that his stock certificate, if restricted, was required
to so state under Corporations Code section 418. The certificate he points us to is dated
June 2012. The testimony he cites from Hu and Lee relates to events far earlier. This
certificate alone is insufficient to call into doubt the existence of substantial evidence on
all causes of action. The jury was free to give the stock certificate the weight it deemed
appropriate.
Next, Yi asserts that IIG introduced evidence that contradicted its discovery
admissions and pleading. IIG alleged in its complaint that Yi’s fraudulent
misrepresentations and promises relating to the 10,000 treasury shares occurred in
December 2010, and gave the same date in an interrogatory response. December 2010
was the date that Hu and Lee asked Yi to return the treasury stock and he refused, not the
date of the initial misrepresentations, which occurred in 2007. Yi therefore claims this
inconsistency somehow utterly defeats IIG’s fraud claim. Yi is mistaken, and the cases
he cites, which are mostly in the summary judgment context, do not say otherwise. Yi
was well aware of IIG’s contention regarding the misrepresentations, and this blatant
attempt at a “gotcha!” is beneath the dignity of further analysis.
Yi also offers analysis as to each cause of action that was purportedly
lacking in substantial evidence. Because the damages were the same as to IIG’s causes of

4
For the same reason, we also reject Yi’s assertion that the extrinsic evidence of fraud is
not “relevant,” which is essentially the parol evidence argument wearing a different
sweater.
18
action for breach of fiduciary duty, fraud, and false promise, we need only find there was
substantial evidence of one of IIG’s claims to conclude the motion for JNOV was
properly denied. The most straightforward road is that of breach of fiduciary duty. “The
elements of a cause of action for breach of fiduciary duty are: (1) the existence of a
fiduciary duty; (2) the breach of that duty; and (3) damage proximately caused by that
breach. [Citation.]” (Mosier v. Southern Cal. Physicians Ins. Exchange (1998) 63
Cal.App.4th 1022, 1044.)
Yi does not argue there was no substantial evidence of breach of fiduciary
duty as to either the apartment or the payroll taxes, leaving us with the issue of the
treasury shares. It is undisputed that Yi was a corporate director and officer of IIG, and
therefore had a fiduciary duty to the corporation. (Corp. Code, § 309; Berg & Berg
Enterprises, LLC v. Boyle (2009) 178 Cal.App.4th 1020, 1037.) There was substantial
evidence at trial that Yi misrepresented to his fellow shareholders that MetroPCS
required him to be majority shareholder, thereby persuading them to give him additional
shares. While Hu and Lee understood these shares would be treasury shares, owned by
the corporation, Yi subsequently acted as if the shares were his personally, and refused to
return them. These actions caused the corporation harm by forcing IIG to eventually buy
the shares back, to its financial detriment.
As we noted above, it does not matter that there was evidence that
contradicts the version of events set forth above. The evidence presented at trial was
solid, reasonable, and credible, and therefore met the legal definition of substantial
evidence to support the judgment. The court did not err by denying Yi’s motion for
JNOV.
19
4. Purported Trial Errors
Yi next raises numerous issues he claims cumulatively prejudiced him,
requiring a new trial.5
We review these for abuse of discretion. “The appropriate test for
abuse of discretion is whether the trial court exceeded the bounds of reason.” (Shamblin
v. Brattain (1988) 44 Cal.3d 474, 478-479.)
First, Yi contends that IIG’s counsel committed misconduct during closing
argument. “In conducting closing argument, attorneys for both sides have wide latitude
to discuss the case. ‘“‘“The right of counsel to discuss the merits of a case, both as to the
law and facts, is very wide, and he has the right to state fully his views as to what the
evidence shows, and as to the conclusions to be fairly drawn therefrom. The adverse
party cannot complain if the reasoning be faulty and the deductions illogical, as such
matters are ultimately for the consideration of the jury.”’” [Citations.] “Counsel may
vigorously argue his case and is not limited to ‘Chesterfieldian politeness.’” [Citations.]
“An attorney is permitted to argue all reasonable inferences from the evidence, . . .”
[Citation.] “Only the most persuasive reasons justify handcuffing attorneys in the
exercise of their advocacy within the bounds of propriety.” [Citation.]’ [Citation.]”
(Cassim v. Allstate Ins. Co. (2004) 33 Cal.4th 780, 795-796 (Cassim).)
Yi claims counsel committed misconduct by arguing, as Yi puts it, that “Yi
was hiding money from his wife by giving it to his girlfriend.” This mischaracterizes
counsel’s statement: “Now, what else is happening at the company while all of this is
going on? Because there are other things happening at the company. And one of the
things that’s happening . . . is Mr. Yi’s going through a divorce. And as part of that
divorce, his . . . soon-to-be ex-wife Ms. Yun Sun Yi is trying to find out about his assets;

5
In his introduction to this section, Yi throws out a number of other alleged evidentiary
errors, but does not expand on them or offer specific argument supported by authority.
Any purported error not developed with argument and legal authority is waived. (Kurinij
v. Hanna & Morton (1997) 55 Cal.App.4th 853, 865.)
20
she’s trying to find out how much money he has, and she’s trying to find out what his
companies are worth.” This statement was also supported by evidence in the record. We
find no error.
Yi did not object to any further statements during this portion of counsel’s
argument, and despite his assertion to the contrary, we see no reason why he could not
make further objections or request admonitions he deemed appropriate. (See Cassim,
supra, 33 Cal.4th at pp. 794-795.)
Yi states that counsel, later in his argument, improperly said the jury
“should disregard IIG’s evidentiary and discovery admissions that Yi made his
misrepresentation and promises in 2010 that contradicted the testimony from Hu and Lee
because the admissions were based on his mistake – his ‘typo.’” Essentially, Yi asserts
counsel was attempting to take responsibility for any error with respect to an inconsistent
date in IIG’s discovery responses. The court sustained Yi’s objection, telling counsel he
was not entitled to testify. The court had already instructed the jury on the importance of
discovery responses, emphasizing they were given under oath and had the same import as
if the answers were given in court. Yi did not request any further admonition or
instruction, and there is nothing in the record he had no opportunity to make such a
request. Accordingly, any error is waived. (Cassim, supra, 33 Cal.4th at pp. 794-795.)
Yi’s next claim of error is a one-paragraph argument that the court
improperly admitted Hu’s statement that Yi’s ex-wife “knew all about the treasury
shares.” His entire argument is: “If the jury had any issue with the credibility between
the parties, IIG was allowed to tell the jury that a non-party knew all about the treasury
shares, so why should they believe Yi’s testimony that none existed.” He claims this
“irreparably prejudiced” his case (without authority or analysis). IIG responds that the
statement, as the trial court concluded, was not admitted for its truth, but for the effect it
had on Hu. This was a proper use of the statement, and therefore we find no error.
21
Yi also complains the court, over an Evidence Code section 352 objection,
allowed IIG to ask him whether he was over $100,000 in arrears in child support. The
court overruled the objection, asked Yi whether he was in arrears without stating the
amount, and instructed counsel to move on. This evidence was offered in response to
Yi’s statement during direct examination, in response to a question about why he stopped
attending shareholder and board meetings, that the “only thing that mattered to me the
most was . . . [to] provide for … my other two children from my previous marriage.”
Thus, the question was offered to rebut Yi’s assertion about what was important to him,
thereby calling into doubt the credibility of his testimony about why he stopped attending
IIG meetings. While undoubtedly prejudicial, it was not unduly prejudicial, and therefore
it was within the court’s discretion to admit this statement.
Finally, Yi asserts misconduct by the trial judge by offering a laundry list of
purportedly biased statements and “examining” Yi. We need not list the statements here;
we have reviewed them, and taken together or separately, they reflect no bias or other
improper conduct. Although at some points the court’s statements reflect frustration with
Yi’s conduct, such as admonishing him for answering before the court could rule on an
objection by opposing counsel, there is no support in the record that anything the court
said “fatally tainted Yi,” as he asserts. Moreover, there is nothing in the record to suggest
that Yi was treated differently than any other key witness; the court was equally pointed
toward both Hu and Lee. The court’s conduct was well within the scope of proper
administration during a complicated trial.
Given that we find no error here, we need not address Yi’s claims regarding
cumulative error.
5. Adequacy of Damages on Yi’s Cross-Complaint
Yi also appeals the amount of damages awarded on his cross-complaint,
asserting the $122,000 the jury found appropriate is “insufficient as a matter of law.”
22
“The question as to the amount of damages is a question of fact. In the first instance, it is
for the jury to fix the amount of damages, and secondly, for the trial judge, on a motion
for a new trial, to pass on the question of adequacy. Whether the contention is that the
damages fixed by the jury are too high or too low, the determination of that question rests
largely in the discretion of the trial judge. The appellate court has not seen or heard the
witnesses, and has no power to pass upon their credibility. Normally, the appellate court
has no power to interfere except when the facts before it suggest passion, prejudice or
corruption upon the part of the jury, or where the uncontradicted evidence demonstrates
that the award is insufficient as a matter of law. In determining whether there has been
an abuse of discretion, the facts on the issue of damage most favorable to the respondent
must be considered. [Citations.]” (Gersick v. Shilling (1950) 97 Cal.App.2d 641, 645.)
As was explained at trial, the damages Yi sought can essentially be broken
into three categories: 1) Unpaid, declared dividends from September through December
2013, totaling $45,000; 2) Tax liability for 2013 of $77,000; and 3) Dividends that IIG
did not declare for 2010-2013, but should have. The $122,000 awarded by the jury
reflects $45,000 from the first category and $77,000 from the second category.6
The
parties appear to agree this is what the jury awarded, while refusing to award any
damages from the third category of undeclared dividends.

6
IIG does not dispute the $45,000 from the first category. IIG does purport to contest the
award of $77,000, but it is not appropriate to do so in a respondent’s brief. IIG should
have included this amount, if it wished to argue it, in its cross-appeal. (§ 906 [“The
provisions of this section do not authorize the reviewing court to review any decision or
order from which an appeal might have been taken”].) Rather, IIG, in its opening crossappellant’s
brief, raises only the issue of whether the expert’s testimony on this point was
admissible. It attempts to muddy the waters by addressing issues of substantial evidence
in its cross-reply brief, but this, too, is improper. (See Schubert v. Reynolds (2002) 95
Cal.App.4th 100, 108-109.) Thus, the only issue we properly address with respect to the
$77,000 in tax liability is whether the expert’s testimony was properly admitted, and we
shall do so in the context of the cross-appeal.
23
As noted above, damages are only insufficient if the “uncontradicted
evidence demonstrates that the award is insufficient as a matter of law.” (Gerlick v.
Shilling, supra, 97 Cal.App.2d at p. 645.) The evidence here was disputed. Yi’s expert
and IIG’s expert gave conflicting testimony as to whether IIG’s practice prior to 2013 had
been to issue dividends. Yi’s expert conceded there was no standard accounting practice
or guideline regarding how much a corporation had to pay its shareholders in a given
year, or whether the amount paid was required to match the amount listed on the IRS K-1
schedule. She testified as to what was “common in the industry,” as to what was a
“business practice,” IIG’s expert testified that no such business practice existed with
respect to the majority of businesses he had worked with. But Yi’s expert did not testify
as to what IIG actually did. She testified she was basing her testimony on historical
evidence that IIG had agreed to pay dividends.
The jury was instructed, and the law is that “directors of a corporation alone
have the power to determine, within their sound discretion, if, when, and how much of a
dividend will be paid. [¶] . . . A declaration or authorization for a dividend must be for
a specified amount . . . .” There was an obvious conflict of evidence, as to whether IIG
had authorized such dividends, and in what amounts, for the years prior to 2013. Yi
argues that because the jury accepted his argument with respect to unpaid dividends for
2013, it automatically followed that the jury must accept the same argument as to the
prior years. The difference is that the 2013 dividends were expressly reflected in an April
2013 board resolution. This makes those dividends fundamentally different from alleged
dividends from previous years, which were not reflected in board minutes offered at trial.
Accordingly, given the disputed evidence, we conclude Yi has not met the
high standard to demonstrate inadequate damages, and we find no error.
24
B. IIG’s Cross-Appeal
IIG’s cross-appeal pertains primarily to Kim’s eventual dismissal from the
case. It also contends that the testimony of Yi’s accounting expert should not have been
admitted to establish that IIG owed Yi $45,000 in tax liability for the year 2013. We
address each contention in turn.
1. Nonsuit as to Conversion
A defendant is entitled to a nonsuit if the trial court determines the evidence
presented by plaintiff is insufficient to permit a jury to find in his or her favor as a matter
of law. (Nally v. Grace Community Church (1988) 47 Cal.3d 278, 291.) “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.” (Campbell v.
General Motors Corp. (1982) 32 Cal.3d 112, 118.) The plaintiff’s evidence, however,
must have substance upon which reasonable minds can differ; evidence that raises mere
conjecture or speculation is insufficient. (Abreu v. Svenhard’s Swedish Bakery (1989)
208 Cal.App.3d 1446, 1457.) The same standard applies on appeal. (Castaneda v.
Olsher (2007) 41 Cal.4th 1205, 1214-1215.)
“‘“Conversion is the wrongful exercise of dominion over the property of
another. The elements of a conversion claim are: (1) the plaintiff’s ownership or right to
possession of the property; (2) the defendant’s conversion by a wrongful act or
disposition of property rights; and (3) damages. . . .”’” (Welco Electronics, Inc. v. Mora
(2014) 223 Cal.App.4th 202, 208.)
IIG makes the mistake of relying nearly entirely on acts by Yi to support its
claim that Kim committed conversion. IIG argues: “At trial, IIG presented evidence that
Yi caused IIG to put Kim (at that time, Yi’s girlfriend) on payroll even though Kim was
not an employee and did not perform any work for IIG. The payments were classified as
25
‘payroll’ or ‘bonus.’ Yi did so without the knowledge of IIG’s other Directors or
shareholders, by directing IIG’s Controller, Cheon, to contact the payroll processing
company to ‘convert’ Yi’s dividend payments to Kim’s name. As a result, IIG had to pay
W-2 wages to Kim, plus state and federal payroll taxes which it would not otherwise have
been required to make. [¶] IIG contended that the money paid to Kim did not rightly
belong to Kim, and instead belonged to IIG. IIG further contended that the money did
not belong to Yi because he was not entitled to it as, during the period, he was in breach
of his fiduciary duties to IIG. The money was not otherwise payable to Yi as wages or
‘regular’ compensation, but rather as a ‘bonus.’ Accordingly, Yi was not entitled to this
money and IIG was entitled to it.”
In sum, IIG wants to hold Kim liable for conversion because Yi told Cheon
(who was indisputably a shareholder as well as a controller, belying the claim that no
other shareholders were aware of this) to “convert” Yi’s dividends to payroll payments to
Kim. IIG claims that Yi was not entitled to this money because he was in breach of his
fiduciary obligations at the time, citing cases where, it claims, an employer was able to
recover salary or bonuses from a faithless employee as damages or restitution. The
applicability of some of these authorities here is questionable. But the ability to recover
later does not establish conversion at the time the money was paid, and IIG’s authorities
do not state otherwise. Further, the trial court rejected IIG’s request for restitution at
trial, and the jury was never instructed on this theory – a ruling from which IIG does not
appeal. We conclude, therefore, that at the time the sums were paid to Kim, there was no
substantial evidence from which a jury could conclude those funds did not belong to Yi.
26
If Yi did not wrongfully instruct Cheon to redirect the funds, there can be no conversion
on Kim’s part.7
2. Nonsuit as to Civil Conspiracy
IIG next contends the court should not have granted a nonsuit on IIG’s
claim of civil conspiracy as to Kim, and the jury should have determined whether she
conspired with Yi to commit conversion or fraud.
Conspiracy is not a separate tort, but a form of vicarious liability by which
one defendant can be held liable for the acts of another. (De Vries v. Brumback (1960)
53 Cal.2d. 643, 650; Kidron v. Movie Acquisition Corp. (1995) 40 Cal.App.4th 1571,
1581.) To establish conspiracy, a plaintiff must allege that the defendant had knowledge
of and agreed to both the objective and the course of action that resulted in the injury, that
there was a wrongful act committed pursuant to that agreement, and that there was
resulting damage. (Quelimane Co. v. Stewart Title Guaranty Co. (1998) 19 Cal.4th 26,
47.) A conspiracy requires evidence “that each member of the conspiracy acted in
concert and came to a mutual understanding to accomplish a common and unlawful plan,
and that one or more of them committed an overt act to further it.” (Choate v. County of
Orange (2000) 86 Cal.App.4th 312, 333.) Thus, conspiracy provides a remedial measure
for affixing liability to all who have “agreed to a common design to commit a wrong”
when damage to the plaintiff results. (Agnew v. Parks (1959) 172 Cal.App.2d 756, 762.)

7
As to the withheld taxes, IIG argues in its reply that these were recoverable from Kim
under a conversion theory as reasonably foreseeable “special damages.” It is
inappropriate to raise this argument for the first time in a reply brief, something IIG does
more than once in its cross-appeal. We decline to consider it further. (See Schubert v.
Reynolds, supra, 95 Cal.App.4th at pp. 108-109.)
27
The defendant in a conspiracy claim must be capable of committing the target tort.
(Casey v. U.S. Bank Nat. Assn. (2005) 127 Cal.App.4th 1138, 1145, fn. 2.)8
As it did with respect to the conversion claim, IIG again focuses on what Yi
did and said to establish that Kim committed a tort against it. Here, IIG argues: “Yi was
a member of IIG’s Board of Directors and knew that IIG was interested in expanding to
other markets, including Colorado and that IIG was financially capable of doing so. Yi
learned of the business opportunity in the Colorado market but did not present the
opportunity to IIG. Instead, Yi brought the opportunity to Kim, who formed a Colorado
corporation and began operations as a MetroPCS® authorized retailer, i.e. the same
business as IIG. The business was also called Unlimited PCS, Inc., which at the time was
the name IIG was still using. The new company was formed in Kim’s name, and Yi was
kept off corporate filings. In fact, however, Yi was a member of the Board of Directors,
Chairman of the Board, President, and CEO, and Yi remained President and CEO from
the time of the inception of the corporation onwards. Yi’s testimony was that he did not
own shares in the Colorado corporation and worked without pay.”
Assuming all of these facts are true, as we must for purposes of reviewing a
grant of a nonsuit, IIG still fails to present any evidence that Kim had knowledge of and
agreed to both the objective and the course of action that resulted in the injury.
(Quelimane Co. v. Stewart Title Guaranty Co., supra, 19 Cal.4th at p. 47.) This means
that Kim must have known more than that Yi was forming a new company with her; it
must be proved that she did so with knowledge of both the conversion and fraud that Yi
purportedly engaged in. (See Choate v. County of Orange, supra, 86 Cal.App.4th at p.
333 [conspiracy requires mutual understanding to accomplish an unlawful plan].) The

8
Because Kim was not capable of committing a breach of fiduciary duty against a
company she was not in a fiduciary relationship with, IIG does not contest that Kim could
not be liable for conspiring to commit a breach of fiduciary duty.
28
record is bereft of any facts from which the court could have drawn the inference that
Kim, who apparently did not testify at trial, had the requisite knowledge and intent.
3. Leave to Amend to Allege Aiding and Abetting as to Kim
Toward the close of trial, and after Kim had moved for nonsuit, IIG
requested leave to amend its complaint to include an aiding and abetting breach of
fiduciary duty claim as to Kim to “conform to proof.” The court denied the motion. We
review for abuse of discretion. (Branick v. Downey Savings & Loan Assn. (2006) 39
Cal.4th 235, 242.)
Motions for leave to amend are left to the sound discretion of the trial
judge: “The court may, in furtherance of justice, and on any terms as may be proper,
allow a party to amend any pleading . . . .” (§ 473, subd. (a)(1).) While the court’s
discretion on this matter is generally exercised broadly, “‘“[t]he exercise of that
discretion will not be disturbed on appeal absent a clear showing of abuse.”’” (Branick v.
Downey Savings & Loan Assn., supra, 39 Cal.4th at p. 242.)
Amendments are permitted even after trial begins. (§ 576.) “The cases on
amending pleadings during trial suggest trial courts should be guided by two general
principles: (1) whether facts or legal theories are being changed and (2) whether the
opposing party will be prejudiced by the proposed amendment. Frequently, each
principle represents a different side of the same coin: If new facts are being alleged,
prejudice may easily result because of the inability of the other party to investigate the
validity of the factual allegations while engaged in trial or to call rebuttal witnesses. If
the same set of facts supports merely a different theory . . . no prejudice can result.” (City
of Stanton v. Cox (1989) 207 Cal.App.3d 1557, 1563.) Leave to amend is properly
denied, however, “where the facts are not in dispute, and the nature of the plaintiff’s
claim is clear, but under substantive law, no liability exists and no amendment would
change the result.” (Edwards v. Superior Court (2001) 93 Cal.App.4th 172, 180.)
29
California’s law on subjecting a defendant to liability for aiding and
abetting a tort arises from common law. “‘Liability may . . . be imposed on one who aids
and abets the commission of an intentional tort if the person (a) knows the other’s
conduct constitutes a breach of duty and gives substantial assistance or encouragement to
the other to so act or (b) gives substantial assistance to the other in accomplishing a
tortious result and the person’s own conduct, separately considered, constitutes a breach
of duty to the third person.’ [Citations.]” (Fiol v. Doellstedt (1996) 50 Cal.App.4th
1318, 1325-1326.)
As we have already discussed, there was insufficient evidence to hold Kim
liable for civil conspiracy. “Despite some conceptual similarities, civil liability for aiding
and abetting the commission of a tort, which has no overlaid requirement of an
independent duty, differs fundamentally from liability based on conspiracy to commit a
tort. [Citations.] ‘“Aiding-abetting focuses on whether a defendant knowingly gave
‘substantial assistance’ to someone who performed wrongful conduct, not on whether the
defendant agreed to join the wrongful conduct.” [¶] . . . [W]hile aiding and abetting may
not require a defendant to agree to join the wrongful conduct, it necessarily requires a
defendant to reach a conscious decision to participate in tortious activity for the purpose
of assisting another in performing a wrongful act.’” (Berg & Berg Enterprises, LLC v.
Sherwood Partners, Inc. (2005) 131 Cal.App.4th 802, 823, fn. 10.)
“California courts have long held that liability for aiding and abetting
depends on proof the defendant had actual knowledge of the specific primary wrong the
defendant substantially assisted.” (Casey v. U.S. Bank Nat. Assn., supra, 127
Cal.App.4th at pp. 1145-1146, italics added.) In this case, that would be actual
knowledge of Yi’s breach of fiduciary duty by starting the new business with Kim in
Colorado in 2013. IIG does not point to anywhere in the record where it identified the
specific facts to the court upon which it would rest a claim of aiding and abetting. And in
its briefs here, the facts IIG sets forth do not support an argument that Kim knew or
30
reached a conscious decision that she was assisting Yi to breach his fiduciary duty, nor do
the facts IIG offers support such an inference. Again, IIG focuses on Yi’s acts, not
Kim’s. Indeed, IIG does not anywhere assert that Kim had any knowledge of Yi’s
wrongdoing or intent to engage in wrongdoing herself. The closest IIG comes is an
assertion that “IIG contended that the clear inference [from the testimony regarding Yi’s
acts] was that Kim’s involvement was a smokescreen meant to shield Yi’s involvement
from scrutiny.” But this comes nowhere close to establishing Kim’s wrongful intent – it
could just as easily mean that she was never informed by Yi of the full facts surrounding
the Colorado corporation. Accordingly, IIG has not provided sufficient evidence that any
liability on Kim’s part exists here, and therefore the court did not err by denying IIG
leave to amend. (Edwards v. Superior Court, supra, 93 Cal.App.4th at p. 180.)
4. Expert Testimony on Tax Liability
One of Yi’s claims in his cross-complaint was that IIG was required to pay
Yi, as a shareholder, $77,000 to cover a tax liability in 2013. Yi offered the testimony of
an expert witness, who testified this was a common business practice. IIG asserts the
court incorrectly admitted this testimony.
The trial court rejected IIG’s argument below, stating that it would admit
the testimony of both Yi’s and IIG’s experts on this point, and instruct the jury
accordingly that the experts’ opinions were only as good as their assumptions. The jury
could consider those assumptions, the court decided, as a question of fact. “Trial court
rulings on the admissibility of evidence, whether in limine or during trial, are generally
reviewed for abuse of discretion. [Citations.]” (Pannu v. Land Rover North America,
Inc. (2011) 191 Cal.App.4th 1298, 1317.)
31
On appeal, however, IIG offers no argument that the erroneous admission
of this evidence was so prejudicial that reversal is required.9
“A judgment of the trial
court may not be reversed on the basis of the erroneous admission of evidence, unless
that error was prejudicial. (Code Civ. Proc., § 475.)” (Grail Semiconductor, Inc. v.
Mitsubishi Electric & Electronics USA, Inc. (2014) 225 Cal.App.4th 786, 799.) “The
record must show that the appellant ‘sustained and suffered substantial injury, and that a
different result would have been probable if such error . . . had not occurred or existed.
There shall be no presumption that error is prejudicial, or that injury was done if error is
shown.’ [Citation.] Additionally, article VI, section 13, of the California Constitution
provides that a judgment may not be set aside based on the erroneous admission of
evidence ‘unless, after an examination of the entire cause, including the evidence, the
court shall be of the opinion that the error complained of has resulted in a miscarriage of
justice.’ Evidence Code section 353 reinforces that provision: we may not reverse a
judgment by reason of the erroneous admission of evidence unless . . . [¶] . . . [¶] . . .
the error or errors complained of resulted in a miscarriage of justice.’ [Citation.]” (Ibid.)
IIG comes nowhere close to clearing this exceedingly high bar. Other than
a bare assertion of prejudice in its reply brief, IIG offers no mention at all as to why or
how this testimony was so prejudicial that a reversal is necessary. It fails to support, with
evidence, that this testimony was so damaging that in its absence, a different result was
probable. Accordingly, even if we agreed with IIG that this evidence should not have
been admitted, IIG has failed to demonstrate the requisite prejudice to justify reversal and
a new trial solely on this basis.

9
For the first time in its cross-reply brief, IIG introduces several new arguments beyond
the admissibility of this evidence itself, including claiming that if the expert’s testimony
meant what Yi claimed, it did not support any award in Yi’s favor and that Yi was never
owed a debt for the funds to cover a tax liability in any event. See footnote seven for the
reasons we will not be addressing these issues.

Outcome: The judgment is affirmed. Each party shall bear its own costs on appeal.

Plaintiff's Experts:

Defendant's Experts:

Comments: