Opinion
D070939
03-16-2017
FEDOR FRASTACKY et al., Plaintiffs and Respondents, v. ED CORRENTE, Defendant and Appellant.
Julander, Brown & Bollard, Dirk O. Julander; Ostergar Law Group and Treg A. Julander for Defendant and Appellant. Bidna & Keys, Howard M. Bidna and Richard D. Keys for Plaintiffs and Respondents.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Super. Ct. No. 30-2010-00371019) APPEAL from a judgment of the Superior Court of Orange County, Frederick P. Horn, Judge. Affirmed. Julander, Brown & Bollard, Dirk O. Julander; Ostergar Law Group and Treg A. Julander for Defendant and Appellant. Bidna & Keys, Howard M. Bidna and Richard D. Keys for Plaintiffs and Respondents.
I.
INTRODUCTION
Defendant Ed Corrente appeals a judgment entered against him and in favor of plaintiffs Fedor Frastacky and Frastacky & Associates, Inc. (jointly, Frastacky or the plaintiffs) for $385,000. Frastacky sued Dermacia, a medical cosmetic company, as well as Corrente and other individuals who worked for the company, after Frastacky made loans to Dermacia that Dermacia failed to pay back prior to the company's failure. Corrente was the Chief Financial Officer for Dermacia during the relevant time period. Frastacky alleged that the defendants made material misrepresentations, concealed material facts, negligently misrepresented facts, conspired to misrepresent or conceal material facts, fraudulently transferred company assets, and/or breached fiduciary duties to Frastacky in their handling of Dermacia's business over the time period during which Frastacky made the loans and the loans came due.
A jury trial was held, and the jury rendered a general verdict in favor of Frastacky and against Corrente and Dermacia's Chief Executive Officer, Matthew Nicosia.
The jury was asked to find only for or against either of the two plaintiffs and the three remaining defendants. The jury was not asked to render a verdict with respect to each cause of action alleged against any of the defendants.
On appeal, Corrente raises multiple contentions. He asserts that a special finding by the jury that he did not "defraud" Frastacky means that the jury necessarily held him liable solely on the plaintiffs' claim for negligent misrepresentation. Based on this assumption, Corrente further argues that (1) he cannot be held personally liable under a negligence theory for pecuniary loss to Frastacky because a corporate officer may not be personally liable for a corporation's negligence in which he had no active participation and/or which caused no physical injury and (2) even if he could be held personally liable under a negligence theory, the trial court erred in instructing the jury with respect to the circumstances under which a corporate officer may be held liable for corporate negligence. Corrente also argues that he was entitled to judgment notwithstanding the verdict because there was insufficient evidence that any misrepresentations made by Dermacia were a legal cause of Frastacky's harm.
We conclude that Corrente's argument on which two of his other contentions are premised—i.e., that we can discern from the jury's verdict that it held him liable solely on the negligent misrepresentation claim—is without merit. The verdict form utilized in this case does not permit one to conclude, as a matter of law, that the jury found Corrente liable solely on Frastacky's negligent misrepresentation claim. Because it is possible that the jury found Corrente liable pursuant to one or more other legal theories of liability, Corrente's remaining appellate arguments attacking the validity of a finding that he negligently misrepresented material facts to Frastacky, even if valid, would not entitle him to reversal of the judgment. We further reject Corrente's contention that there is insufficient evidence to support a finding that any misrepresentations or concealment of fact made by Dermacia proximately caused Frastacky's harm. We therefore affirm the judgment.
II.
FACTUAL AND PROCEDURAL BACKGROUND
Matt Nicosia and Barry Knapp started Dermacia in 2004. Dermacia marketed two brands of products—"Lycogel" and "breathable" cosmetics. Lycogel was a cosmetic sold to physicians that was marketed as helping to prevent scarring from plastic surgery. The Dermacia cosmetic line was sold primarily through "infomercials," as well as on the Home Shopping Network.
Nicosia and Knapp eventually began raising capital in order to grow the company. Prior to December 31, 2006, Nicosia solicited investment funds from family and friends, and later, through "Reg D 506" private placement securities offerings. Through these efforts, they raised $6 million in capital. According to Nicosia's deposition testimony, a "506 Regulation D is a private placement that falls under the rules of 506 which allows companies to raise capital [from] [ac]credited investors."
At his deposition, Nicosia stated that Dermacia had raised approximately $6 million through the "Reg D 506" offerings. At trial, Nicosia testified that they had raised "[a] lot more than that."
In late 2005 or early 2006, Dermacia borrowed a total of $15,000,000, secured by Dermacia's assets, from "Medical Capital" to fund the infomercials and produce the products. As a result of this funding, Medical Capital effectively owned Dermacia at that point.
Dermacia officers decided that Dermacia would require additional capital in order to produce and pay for more infomercials. They had expected Medical Capital to make a new investment, but that financing fell through. Nicosia then raised some funds from other sources. Nicosia used documents prepared by Dermacia's accounting staff with Dermacia's accounting software to promote Dermacia as an investment.
Corrente began acting as Dermacia's Chief Financial Officer (CFO) in October 2006. He was initially working for the company on a part-time basis. In this role, he was responsible for ensuring that all financial information disseminated by Dermacia was accurate. Corrente was hired "to help [Dermacia] get prepared [to obtain] further financing." Materials released by the company identified Corrente as the CFO, and related his many years of experience as an accountant with Ernst & Young.
Corrente testified at trial that he did not become CFO at Dermacia until "sometime between June and November [of 2007] maybe." Other witnesses and documentary evidence demonstrated that Dermacia represented that Corrente was its CFO as early as October 1, 2006. In an April 9, 2007 memorandum, Citigroup identified Corrente as Dermacia's CFO. In addition, a February 2007 document released by Dermacia identified Corrente as its CFO. Corrente admitted at trial that he never told anyone at Dermacia not to represent to third parties that he was the company's CFO.
Lauren Vea began working for Dermacia in approximately 2004 or 2005. She had a high school education. Her first responsibility at the company was to market the products to doctors at conventions. In her role at the company, Vea did not view Dermacia's financial statements, and no one there informed her about Dermacia's finances.
Vea understood from Nicosia that the company was soliciting investors to provide bridge loans to the company while it was working with Citigroup to take the company "public." According to Vea, Nicosia's directions to her were, essentially, "if people are asking, bring them in." Nicosia told Vea that she would be compensated approximately three percent of the loan amount if she was able to find investors willing to make loans to the company.
Vea's late husband had suggested discussing a possible investment in the company with Frastacky. Vea sent Frastacky some initial documents, which she had obtained from Nicosia. Vea informed Nicosia that she was sending the information to Frastacky. Vea did not "review" the information that she sent to Frastacky, and "didn't really understand all of it." Any information that Vea sent to Frastacky she obtained "directly from Mr. Nicosia."
Vea sent Frastacky documents related to Dermacia's products, business plan, and finances. These documents were introduced at trial. The documents included one titled "Dermacia Discussion Materials," dated February 2007. This document provides background information about Dermacia and reflects that it was prepared by Citigroup. Another document is titled, "Confidential Executive Summary Rev. 020607," and appears to have been prepared by Dermacia. This document identifies Corrente as Dermacia's CFO. The document also includes information about Dermacia's historical financial performance (including information regarding sales, costs of goods sold, gross profit, and net profit) for 2005 and 2006. It also includes financial projections for the years 2007, 2008 and 2009.
A third document, titled "Dermacia Financial Update," was also sent to Frastacky. At trial, Nicosia testified that he did not know who had prepared this document. The document includes the following financial information about Dermacia: (1) that in 2006, Dermacia had total revenue of $10 million, including $6 million in the fourth quarter; (2) that between 2003 and 2006, Dermacia had raised $16 million in "Reg D" capital; (3) that profits for 2006 were just over $10 million, and losses were approximately $7.7 million; and (4) that projected net income between 2007 and 2009 totaled close to $50 million.
The documentation provided to Frastacky indicated that Dermacia had already raised $16 million in "Reg D" investment. Nicosia admitted at his deposition that the true amount of investment that the company had raised was only $6 million. However, at trial, Nicosia testified that he had forgotten during his deposition how much in "Reg D" investment the company had obtained. There was no documentary evidence presented at trial to support Nicosia's contention that the company had raised a total of $16 million from accredited investors.
Frastacky believed that he could rely on the company's financial reporting, in part because Corrente's role as CFO lent credibility to the company. Frastacky was impressed that accredited investors had already invested $16 million in the company, and the company's financial reporting demonstrated increasing annual sales. Based on the historical sales and profit figures provided to him, Frastacky believed the projections for future sales and profits to be reasonable. Frastacky thought that the company provided a viable, albeit somewhat risky, investment opportunity for himself and some of his clients.
Frastacky ultimately loaned Dermacia a total of $5.7 million in 2007. The first loan of $1.2 million from Frastacky was made in early April 2007. Frastacky loaned additional amounts in late May ($1 million), late July ($2 million), and early September 2007 ($1.5 million).
Neither Nicosia nor Corrente spoke with Frastacky throughout the time period during which Frastacky was making loans to Dermacia; Frastacky spoke only with Vea. Vea testified that the only person she received information from regarding Dermacia's financial status was Nicosia. Vea did not have independent access to Dermacia's financial books and records. The information she knew about Dermacia was based on what Nicosia told her and "what she observed by having an office in the company."
Beginning in early 2007, Dermacia began discussions with Citigroup (the investment banking arm of Citibank) to put together a private placement offering of convertible notes in an attempt to raise $50 million. The money was to be used to retire the Medical Capital debt and to fund growth. Because it would be several months before the Citigroup private placement offering would occur, Dermacia sought to obtain bridge loan financing to keep Dermacia afloat until the Citigroup offering could be completed. Frastacky's loans were part of $8.7 million in bridge loan financing that the company was able to obtain.
In February and March 2007, Dermacia provided Citigroup with information that its net sales for 2006 had been $8.1 million. However, by July 2007, Dermacia changed its numbers and informed Citigroup that the correct 2006 net sales number was $4.9 million. The gross profit and net income numbers were also revised during that time period. Nicosia testified that he did not recall whether he had any discussions with anyone else at the company regarding the need to revise those numbers. However, he did acknowledge that he and Corrente and another individual, Jeff Campbell, "discussed constantly with the auditors and as well as Citigroup what [was] happening as far as sales are concerned."
Documentary evidence presented at trial revealed that in May 2007, Citigroup created a document related to Dermacia that showed Dermacia's net revenues were "down to $4 million." The May 2007 document also showed a net loss of $12.7 million, which was up from a net loss of $8.3 million that had been reported in February. This evidence suggests that as early as May 2007, when Frastacky made a second loan to Dermacia, Corrente and Nicosia were aware that the historical financial data for 2006 that had been provided to Frastacky was not correct.
Ultimately, the financial information that Citigroup placed in the private placement memorandum that it utilized to solicit investment in Dermacia showed that for 2006, Dermacia had total net revenues of $4.66 million, gross profit of $2.93 million, and net income loss of $17 million. As of July 2007, Citigroup and Dermacia had "pretty much agreed on what numbers were going to be represented in the private placement memorandum." Thus, at the time Frastacky made the initial loan to Dermacia, he had been provided with at least 3 documents that contained historical financial data and projections that were significantly different from the data that was provided to Citigroup in compliance with generally accepted accounting principles. Both Nicosia and Corrente conceded at trial that Dermacia's accounting system had not been producing accounting reports that were reliable and/or produced in accordance with generally accepted accounting principles prior to the time that Corrente began preparing financial reports for the Citigroup deal. When asked whether the company's records could have been used to generate "an accurate financial statement," one of Dermacia's auditors stated that, prior to Corrente working at Dermacia, he did not think the company could have "generated a financial statement[,] period," because the records for the company "needed a lot of cleanup."
Frastacky had been provided a document demonstrating that Dermacia had gross sales for calendar year 2006 of $10,073,000. The updated, corrected number was $6,000,000. The same document indicated that Dermacia's net sales in 2006 were $8,149,000. The audited number for net sales in 2006 was just over half of the number provided to Frastacky: $4,600,000. The gross profit number provided to Frastacky was $5,800,000. The audited gross profit was $2,500,000, and the number used in the private placement memorandum was $2,900,000.
In late May 2007, Dermacia was "already working with different [financial] numbers for historical 2006 year-end figures plus different projections." Despite knowing by late May 2007 (i.e., when Frastacky made a second loan to the company) that the numbers that the company had given Frastacky earlier were incorrect, neither Nicosia nor Corrente provided Frastacky with the information that had been given to Citigroup. Nor did they direct Vea to provide Frastacky with the accurate financial data. Thus, while Dermacia ensured that Citigroup received the corrected accounting information, Dermacia never informed Frastacky about the accounting errors.
Nicosia testified that he told Vea to inform Frastacky that "the numbers changed." But he also conceded, upon further questioning, that he had told her that she could have the "audited financials." Nicosia acknowledged that the audited numbers "didn't happen until 2008," thereby conceding that he did not provide Vea with information regarding updated financial information until 2008 He said that he did not recall whether he had instructed Vea to inform Frastacky at an earlier point that Dermacia and Citigroup "were using different numbers than what she had given him in March or April or May."
Nicosia acknowledged that he "probably" had spoken with Corrente about the fact that Frastacky was lending the company additional money in May 2007. Corrente testified that he "knew they [Frastacky and Frastacky's investors] were doing the financing, but I didn't know all the details behind it." Corrente was aware that the loans were "securities transactions." The first note provided to Frastacky clearly indicated that it was a security, which Corrente conceded.
Nicosia also testified that he had been speaking with others at Dermacia, including Corrente, about the fact that "the numbers would change." In fact, Corrente "knew there would be adjustments which we would see." In 2007, Nicosia would keep up with "Dermacia's financial condition" by reviewing "reports and numbers" on a "quarterly" basis. Steve Miller and Corrente were the individuals "handling that piece of it and reporting to [Nicosia regarding the financials] at that time." There was no dispute at trial that Corrente participated in the discussions with Citigroup involving the corrected 2006 financial numbers.
As of April 2007, Corrente was aware that "without an immediate influx of money it would be difficult for Dermacia to survive." Corrente was also made aware that Frastacky was making bridge loans to the company. He was aware of all of Frastacky's loans to the company. He knew that Vea was the intermediary between the lender and Dermacia. He also knew that Vea was receiving a commission for soliciting the bridge loans. Further, Corrente was aware that at least up until June 2007, the numbers coming out of Dermacia's accounting system were not in compliance with generally accepted accounting principles.
Defendant Jan Hall joined the company as chairperson of the Board in September 2007, and shortly thereafter, became CEO. Hall participated in one meeting with Citigroup in November 2007, after which the meetings ceased and the Citigroup private placement offering plan came to a halt.
Dermacia went into default with Medical Capital in December 2007 and received a default notice in January 2008. "Citigroup was gone" as of January 2008. After the Citigroup investment plan failed to raise any money, Dermacia sought other investment funding. However, Dermacia was unable to raise any investment money using the corrected, updated historical financial data (i.e., the data that had not been provided to Frastacky).
Frastacky's first loan to Dermacia came due in April 2008, and the second one in May 2008. Despite the fact that Dermacia had defaulted on the Medical Capital loan in December 2007, no one at Dermacia had informed Frastacky about Dermacia's financial status. Instead, Vea sent Frastacky e-mails indicating that things with Citigroup had only been delayed, but that "[s]ales are up" and the projected sales for 2008 were $110 million.
Corrente acknowledges in briefing on appeal that Vea's communications with Frastacky during late 2007 and May 2008 "were expressly deceptive," and that she "led the Frastacky Investors to believe" among other things, that the Citigroup offering was moving forward, the company was "doing great," the company would be announcing a "secured lender" in mid-May 2008, and that "[e]veryone will get a very nice return on investment if they are willing to hold a little."
Throughout 2008, Dermacia was being sued by a number of entities and individuals. Nicosia, Hall, and Corrente all continued to draw salaries during that period of time. In 2008, Corrente received approximately $203,000, Hall received approximately $216,000, and Nicosia received approximately $213,000 from Dermacia.
Medical Capital held a public auction to sell Dermacia in October 2008. The final payments made to Nicosia, Hall and Corrente from Dermacia were made in October 2008. Frastacky never received a payment on any of the bridge loans that Frastacky made to Dermacia.
Frastacky filed a complaint against Dermacia, Nicosia, Barry Knapp, Hall, Nicosia Financial Group, Inc., K&N Productions, and Corrente, on April 1, 2011. The complaint alleged causes of action for breach of promissory notes, money lent, fraud, fraudulent transfers, negligent misrepresentation, breach of fiduciary duty, and conspiracy to conceal assets.
Defendants Dermacia and Knapp had defaults entered against them in 2010 and 2012, respectively. Defendant Nicosia Financial Group, Inc. elected not to defend. These parties were included in the judgment entered by the court on July 7, 2014, and were held liable for the damages assessed by the jury against Nicosia.
The case was tried over twelve days in March and April, 2013. Nicosia, Corrente, Vea, Frastacky, Hall, and other witnesses testified.
At trial, Frastacky's attorney argued that the circumstantial evidence supported a finding that Nicosia and Corrente were both involved in keeping Frastacky in the dark as to the true financial state of Dermacia. For example, Frastacky's attorney argued, "So when you are doing—when you are thinking through the evidence, what we're going to have to do to establish our case is essentially circumstantial evidence. And it's not direct evidence. It's not somebody said, yes, we did it. [¶] I don't have a piece of paper where they admitted they did it. But circumstantial evidence is nevertheless very powerful and very important." Essentially, Frastacky's attorney asked the jury to draw reasonable inferences from the testimony presented at trial: "Does it make sense to you that Mr. Corrente didn't know what information had been provided to Mr. Frastacky? He knew. He had to know something was provided. And in all of his conversations with Mr. Nicosia. I mean they see each other every day. They are working feverishly. . . . [¶] It doesn't make any sense that somewhere along the line, Mr. Corrente doesn't know what happened." He further argued that the evidence supported the following inferences regarding Corrente's involvement:
"You have the CFO and the CEO, Mr. Nicosia and Mr. Corrente, know exactly what's going on with the Citigroup raise [sic]. Know exactly what's going on with the company's finances. Know exactly that if Mr. Frastacky stops putting money in, they're all out of a job. They get nothing out of Dermacia. [¶] So they come up with a plan and they agree, we're not going to tell Frastacky. We're not going to tell him that we're using different numbers for the Citigroup raise [sic] because if we do, he won't bring in the money. [¶] Now, is there a — do I have a tape-recording of that conversation? No, of
course not. Conspiracy is almost always proven through circumstantial evidence. Consider the circumstances of this one. They both have a common goal and scheme. They both invested everything they have in this company. They both are intimately aware of the financials. And they both know that the financials of the company they were using to solicit investments in April were inaccurate and phoney and not the same thing they're going forward with. So they agree, we're just not going to tell Frastacky."
The court instructed the jury on Frastacky's claims against Nicosia, Corrente, and Hall. The instructions ultimately provided to the jury included instructions regarding intentional misrepresentation, concealment, negligent misrepresentation, conspiracy to intentionally misrepresent or conceal, fraudulent transfer, and breach of fiduciary duty.
The verdict form presented to the jury was a general verdict form that asked the jury to determine, as to each plaintiff and each defendant, which party prevailed, but did not separate out the various causes of action asserted by the plaintiffs. The jury returned its verdicts as follows:
"Claims by Fedor Frastacky
"1. On Fedor Frastacky's claims against Mathew Nicosia, Ed Corrente and Jan Hall we find in favor of the following (answer separately for each defendant):
"Matthew Nicosia
Fedor Frastacky[]
(Write in Fedor Frastacky or Matthew Nicosia)
"Ed Corrente
Fedor Frastacky
(Write in Fedor Frastacky or Ed Corrente)
"Jan Hall
Jan Hall
(Write in Fedor Frastacky or Jan Hall)
"If any of your verdicts are for Fedor Frastacky, then proceed to question numbers 2 and 3. If none of your verdicts are for Fedor Frastacky, skip to question no. 4.
"2. We award damages in favor of Fedor Frastacky and against:
"i. Matt Nicosia in the amount of $ 1,485,000.
"ii. Ed Corrente in the amount of $ 165,000.
"iii. Jan Hall in the amount of $ 0.
"3. Do you find that Fedor Frastacky has established by a preponderance of the evidence that Matt Nicosia, Ed Corrente and/or Jan Hall defrauded Fedor Frastacky? Answer yes or no as to each: Matt Nicosia Yes; Ed Corrente No; Jan Hall No.
"Claims by Frastacky Associates, Inc.
"4. On Frastacky Associates' claims against Mathew Nicosia, Ed Corrente or Jan Hall we find in favor of the following (answer separately for each defendant):
"Matthew Nicosia
Frastacky Associates
(Write in Frastacky Associates or Matthew Nicosia)
"Ed Corrente
Frastacky Associates
(Write in Frastacky Associates or Ed Corrente)
"Jan Hall
Jan Hall
(Write in Frastacky Associates or Jan Hall)
"If any of your verdicts are for Frastacky Associates, then proceed to question numbers 5 and 6. If none of your verdicts are for Frastacky Associates, you are done. Skip to the end of this form and have the jury foreperson date and sign this form.
"5. We award damages in favor of Frastacky Associates and against:
"i. Matt Nicosia in the amount of $ 1,980,000.
"ii. Ed Corrente in the amount of $ 220,000.
"iii. Jan Hall in the amount of $ 0.
"6. Do you find that Frastacky Associates has established by a preponderance of the evidence that Matt Nicosia, Ed Corrente or Jan Hall defrauded Fedor Frastacky Associates? Answer yes or no as to each: Matt Nicosia Yes; Ed Corrente No; Jan Hall No." (Boldface omitted.)
The jury foreperson handwrote the responses on the indicated lines on the verdict form.
The jury rendered its verdict on April 24, 2013. Judgment was entered on July 7, 2014.
Corrente filed a "Motion for Judgment Notwithstanding the Verdict or, in the Alternative, Notice of Intent to Move for New Trial" on December 30, 2014. (Some capitalization & boldface omitted.) The trial court denied Corrente's motion on February 18, 2015. Corrente filed a timely appeal from the judgment and order denying his motion for judgment notwithstanding the verdict.
III.
DISCUSSION
A. The verdict form is ambiguous, and the jury's special findings may be reconciled with findings against Corrente on claims other than the negligent misrepresentation claim
Two of Corrente's contentions on appeal are based on the necessary premise that the jury could have based its finding of liability against him only on Frastacky's claim for negligent misrepresentation, and not on one or more of the other claims asserted by the plaintiffs (i.e., intentional misrepresentation, concealment, breach of fiduciary duty, fraudulent transfer, and/or conspiracy to commit an intentional misrepresentation, concealment, breach of fiduciary duty, or fraudulent transfer). According to Corrente, the jury's "finding" that Corrente did not "defraud[ ]" Frastacky must mean that the jury necessarily determined that Corrente was not liable for intentional misrepresentation or concealment, because these claims are fraud-based claims. Corrente further argues that the jury also could not have based its general verdict on Frastacky's claims for fraudulent transfer or breach of fiduciary duty because, he asserts, (a) the jury instructions with respect to the fraudulent transfer claim included the element of defrauding Frastacky, and, thus, it could not be the basis for liability, and (b) both the fraudulent transfer claim and the breach of fiduciary duty claim were based on evidence of an October 15, 2008 payment of $24,003 to Corrente, which is not equal to the $385,000 in damages the jury awarded to the Frastacky plaintiffs, and thus, could not be the basis for his liability. Finally, Corrente asserts that because the conspiracy claim is based on these other four intentional torts, which, again, he contends cannot be the basis for the jury's liability determination, the jury must not have found him liable for conspiracy.
As we explain, we do not agree with Corrente that the jury must have found him liable solely on the negligent misrepresentation claim and on none of the other intentional tort claims. In assuming that the verdict must be interpreted in this way, Corrente "overlooks the general rule that a verdict should be interpreted so as to uphold it and to have the trial or appellate court resolve apparent inconsistencies. [Citation.] 'Any and all reasonable inferences will be indulged in to support rather than defeat the verdict and judgment.' " (Delos v. Farmers Group, Inc. (1979) 93 Cal.App.3d 642, 661, italics added.)
The jury was asked to complete the most general of general verdict forms—i.e., one that asked, simply, as between each plaintiff and each defendant, which party prevailed, without even identifying or distinguishing between the various claims alleged in the complaint. (See Code Civ. Proc., § 624 ["The verdict of a jury is either general or special. A general verdict is that by which they pronounce generally upon all or any of the issues, either in favor of the plaintiff or defendant"].) The jury form proceeded to ask the jury to assign an award of damages to the plaintiff, but only if it had already determined that a particular plaintiff had prevailed over a particular defendant. Finally, it asked the jury one additional question: "Do you find that [the plaintiff] has established by a preponderance of the evidence that Matt Nicosia, Ed Corrente and/or Jan Hall defrauded [the plaintiff]? Answer yes or no as to each: . . . ."
In contrast to a general verdict, "a special verdict is that by which the jury find the facts only, leaving the judgment to the Court. The special verdict must present the conclusions of fact as established by the evidence, and not the evidence to prove them; and those conclusions of fact must be so presented as that nothing shall remain to the Court but to draw from them conclusions of law." (Code Civ. Proc., § 624.) "Unlike a general verdict (which merely implies findings on all issues in favor of the plaintiff or defendant), a special verdict presents to the jury each ultimate fact in the case. . . . [¶] The requirement that the jury must resolve every controverted issue is one of the recognized pitfalls of special verdicts. '[T]he possibility of a defective or incomplete special verdict, or possibly no verdict at all, is much greater than with a general verdict that is tested by special findings.' " (Falls v. Superior Court (1987) 194 Cal.App.3d 851, 854-855.)
A general verdict implies a finding in favor of the prevailing party of every fact essential to support that party's action or defense, and a court is to indulge all inferences in favor of a general verdict. (See Henderson v. Harnischfeger Corp. (1974) 12 Cal.3d 663, 673 [a "general verdict implies a finding in favor of the prevailing party of every fact essential to the support of his action or defense"]; Wilson v. County of Orange (2009) 169 Cal.App.4th 1185, 1193 [" 'the jury's general verdict "imports findings in favor of the prevailing party on all material issues; and if the evidence supports implied findings on any set of issues which will sustain the verdict, it will be assumed that the jury so found" ' "]; Codekas v. Dyna-Lift Co. (1975) 48 Cal.App.3d 20, 24 ["[a] general verdict implies a finding in favor of the prevailing party of every fact essential to the support of his action; all inferences and intendments favor such a verdict"].) Further, "[w]here there are several counts or causes of action, a general verdict will stand if the evidence supports it on any one sufficient count." (7 Witkin, Cal. Procedure (5th ed.) Trial, § 354, p. 413.)
" ' "A verdict should be interpreted so as to uphold it and to give it the effect intended by the jury, as well as one consistent with the law and the evidence." ' " (Toste v. CalPortland Construction (2016) 245 Cal.App.4th 362, 371.) "Where a special finding of facts is inconsistent with the general verdict, the former controls the latter, and the court must give judgment accordingly." (Code of Civ. Proc., § 625.) However, a general verdict will not be set aside unless there is no possibility of reconciling the general and special verdicts under any possible application of the evidence and instructions. (See Hasson v. Ford Motor Co. (1977) 19 Cal.3d 530, 540 (Hasson), overruled on other grounds in Soule v. General Motors Corp. (1994) 8 Cal.4th 548, 574, 580; Lambert v. General Motors (1998) 67 Cal.App.4th 1179, 1183; Curtis v. State of California ex rel. Dept. of Transportation (1982) 128 Cal.App.3d 668, 689.) "If any conclusions could be drawn thereunder which would explain the apparent conflict, the jury will be deemed to have drawn them." (Hasson, supra, at pp. 540-541.) "[N]o presumption is to be indulged in favor of answers to the special interrogatory and every reasonable intendment in favor of the general verdict should be favored by the court." (Bate v. Marsteller (1965) 232 Cal.App.2d 605, 615.)
Although Corrente is not directly attacking the verdict as "inconsistent," his challenges to the judgment are necessarily premised on his contention that the jury rendered a verdict holding him liable solely on a negligent misrepresentation claim, which itself is premised on the implicit claim that to interpret the verdict in any other manner would render the verdict logically inconsistent. We therefore apply the rules generally applicable to interpretations of verdicts to address whether there is merit to the premise underlying Corrente's arguments for reversing the judgment.
In contrast, "[w]hen a special verdict is involved . . . , a reviewing court does not imply findings in favor of the prevailing party. [Citations.] This rule stems from the nature of a special verdict and its ' "recognized pitfalls," ' namely, that it requires the jury to resolve all of the controverted issues in the case, unlike a general verdict which merely implies findings on all issues in one party's favor." (City of San Diego v. D.R. Horton San Diego Holding Co., Inc. (2005) 126 Cal.App.4th 668, 678-679.)
An ambiguous verdict may be interpreted " 'from its language considered in connection with the pleadings, evidence and instructions.' " (Woodcock v. Fontana Scaffolding & Equip. Co. (1968) 69 Cal.2d 452, 456-457.) A reviewing court must uphold an award of damages whenever possible, drawing all presumptions in favor of the judgment. (Seffert v. Los Angeles Transit Lines (1961) 56 Cal.2d 498, 508.)
Given the state of the evidence, plaintiffs' counsel's closing arguments to the jury, and the jury instructions, the jury's verdict may be interpreted to imply findings in favor of Frastacky on claims other than the negligent misrepresentation claim while giving meaning to the jury's response to the "defraud" question. One possible and quite reasonable interpretation of the verdict is that the jury understood the "defraud" question to specifically refer to the "fraudulent transfer" claim, in light of the fact that the only instructions that included the terms "fraud" or "defraud" in describing the plaintiffs' claims related solely to the fraudulent transfer claim. There were a total of three instructions regarding the fraudulent transfer theory that included the terms "fraud" or "defraud." For example, the jury was provided with the following instruction regarding the elements for making out a claim for an actual fraudulent transfer:
The inclusion of the one question asking jurors to make a finding of ultimate fact regarding whether any of the defendants "defrauded" the plaintiffs is odd, given the fact that the verdict form is otherwise about as "general" a verdict form as one can imagine, and particularly given the fact that the jury was not instructed on the meaning of the term "defrauded." In briefing, Frastacky attempts to shed some light on this issue by explaining that "[t]he reason for [asking the jury to make a finding as to whether the defendants had committed fraud] was to have an established finding of fraud should Corrente or Nicosia file bankruptcy." Frastacky had originally considered asking the jury to make a finding of "fraud, malice or oppression" to support a punitive damage award, but decided not to request punitive damages and, therefore, omitted that question from the verdict form. Frastacky concedes that this proffered explanation for the inclusion of the "defrauded" question "did not find its way into the reporter's transcript." Although the explanation that Frastacky provides in briefing does appear to explain why the parties may have included a question that used the word "defrauded" despite the fact that the jury was not instructed on the meaning of that term, ultimately, we need not determine why the question was included in the verdict form. The reason for its inclusion is not important at this juncture. What we must do is attempt to interpret the jury's verdict, as it stands, and give effect to all aspects of the verdict form as long as those aspects can be reconciled under a reasonable application of the evidence and instructions.
"Plaintiffs Fedor Frastacky and Frastacky Associates claim they were harmed because Dermacia fraudulently transferred property to Matt Nicosia, Ed Corrente and/or Jan Hall in order to avoid paying a debt to Plaintiffs. This is called 'actual fraud.' To establish this claim against Matt Nicosia, Ed Corrente or Jan Hall, Plaintiffs must prove all of the following:
"1. That Plaintiffs have a right to payment from Dermacia for amounts due on their loans to Dermacia;
"2. That Dermacia transferred property to Matt Nicosia, Ed Corrente or Jan Hall;
"3. That Dermacia transferred the property with the intent to hinder, delay, or defraud one or more of its creditors;
"4. That Plaintiffs were harmed; and
"5. That Dermacia's conduct was a substantial factor in causing plaintiffs' harm.
"To prove intent to hinder, delay, or defraud creditors, it is not necessary to show that Dermacia had a desire to harm its creditors. Plaintiffs need only show that Dermacia intended to remove or conceal assets to make it more difficult for its creditors to collect payment." (Italics added.)
The jury was also provided with an instruction on a theory of constructive fraudulent transfer as follows:
"Fedor Frastacky and Frastacky Associates, Inc. claim they were harmed because Dermacia, Inc[.] transferred money or property, or incurred an obligation, to Jan Hall, Ed Corrente or Matt Nicosia and was unable to pay Fedor Frastacky and Frastacky Associates, Inc. money that was owed. This is called "constructive fraud." To establish this claim against Jan Hall, Ed Corrente or Matt Nicosia, Fedor Frastacky and Frastacky Associates, Inc. must prove all of the following:
"1. That Fedor Fratacky and Frastacky Associates, Inc. has a right to payment from Dermacia, Inc.;
"2. That Dermacia, Inc. transferred money or property, or incurred an obligation to Jan Hall, Matt Nicosia, and Ed Corrente;
"3. That Dermacia, Inc. did not receive a reasonably equivalent value in exchange for the transfer;
"4. That Fedor Frastacky and Frastacky Associates, Inc.'s right to payment from Dermacia, Inc. arose before Dermacia, Inc. transferred money or property;
"5. That Dermacia, Inc. was insolvent at the time or became insolvent as a result of the transfer or obligation;
"6. That Fedor Frastacky and Frastacky Associates, Inc. was harmed; and
"7. That Dermacia[,] Inc.'s conduct was a substantial factor in causing Fedor Frastacky and Frastacky Associates, Inc.'s harm.
"If you decide that Fedor Frastacky and Frastacky Associates, Inc. has proved all of the above, they do not have to prove that Dermacia, Inc. intended to defraud creditors."
In addition, an instruction on the affirmative defense of good faith included the word "fraud," and clearly related solely to the claim for fraudulent transfer based on the actual intent to defraud a creditor theory:
"Jan Hall, Ed Corrente, and Matt Nicosia each claim they are not liable to [the plaintiffs] on the claim for actual fraud because Jan Hall, Ed Corrente, and Matt Nicosia each received payment from Dermacia, Inc. in good faith and for a reasonably equivalent value. [¶] To succeed on this defense, Jan Hall, Ed Corrente, and Matt Nicosia each must prove both of the following:
"1. That Jan Hall, Ed Corrente, and Matt Nicosia each received payment from Dermacia, Inc. in good faith; and
"2. That they took the payment for a reasonably equivalent value.
" 'Good faith' means that Jan Hall, Ed Corrente, and/or Matt Nicosia acted without actual fraudulent intent and that they did not conspire with Dermacia, Inc. or otherwise actively participate in any fraudulent scheme. If you decide that Dermacia, Inc. had fraudulent intent and that Jan Hall, Ed Corrente, and/or Matt Nicosia knew it, then you may consider their knowledge in combination with other facts in deciding the question of Jan Hall, Ed Corrente, and/or Matt Nicosia's good faith.
"This instruction only applies to Plaintiffs' claims that they were harmed because Dermacia fraudulently transferred property to Matt Nicosia, Ed Corrente, or Jan Hall with the intent to delay, hinder, or defraud one or more of its creditors. It does not apply to any other claims by Plaintiffs for fraudulent transfer or any claim for intentional or negligent mispresentation." (Italics added.)
Indeed, the sole claim as to which the jury was instructed that utilized the term "fraud" in the description was the fraudulent transfer claim. This is apparent from the jury instruction informing the jury that there were multiple legal theories pursuant to which the plaintiffs were seeking damages:
"You will be asked to decide whether Jan Hall, Ed Corrente, and/or Matt Nicosia is each liable to Fedor Frastacky and/or Frastacky and Associates under the following legal theories:
"1. intentional misrepresentation;
"2. negligent misrepresentation;
"3. fraudulent transfers;
"4. breach of fiduciary duty;
"5. conspiracy." (Italics added.)
In contrast to the instructions related to fraudulent transfers, the instructions for the other fraud-related claims (i.e., intentional misrepresentation and concealment) did not use the term "fraud" or "defraud" in describing the elements of the claims to the jury. For example, the text of intentional misrepresentation instruction with respect to Corrente discussed "false representations," but did not include the word "fraud." The instruction on the claim for concealment does not include any mention of the word "fraud." Further, although the conspiracy instruction included the word "fraudulent," it did so in identifying the "fraudulent transfer" cause of action. Although attorneys and judicial officers understand that causes of action for intentional misrepresentation and concealment are, by their nature, claims based in fraud, it is reasonable to conclude that an average layperson reviewing the jury instructions provided in this case could conclude that the reference to "defraud" in the verdict form should be understood solely in reference to the jury instructions that specifically mentioned "fraud"—i.e., the jury instructions regarding the cause of action for fraudulent transfer. Given the absence of any instruction that informed the jury that intentional misrepresentation and concealment are actually forms of fraud, or any instruction that provided a basis for the jury to understand that a defendant who is found liable for intentional misrepresentation or concealment is considered to have committed fraud, one may reasonably interpret the jury's response to the special question as a rejection of the fraudulent transfer claim, but not the claims for intentional misrepresentation, concealment, breach of fiduciary duty, or conspiracy.
The jury was instructed on the intentional misrepresentation claim, with respect to Corrente, as follows:
"Plaintiffs Fedor Frastacky and Frastacky Associates, Inc. claim that Dermacia made one or more false representations that harmed them and that, as an officer of Dermacia, Ed Corrente is personally responsible for the harm caused by such false representations. To establish this claim, [the plaintiffs] must prove all of the following:
"1. That Dermacia represented to [the plaintiffs] that an important fact was true;
"2. That the representation was false;
"3. That either (a) Dermacia knew that the representation was false when made, or (b) the representations were made recklessly and without regard for its truth, or (c) Dermacia learned that a representation that it believed was true at the time it was made was not true, and failed to correct the statement before Plaintiffs took action in reliance on the representation;
"4. That Dermacia intended that Plaintiffs rely on the representation;
"5. That Plaintiffs reasonably relied on the representation;
"6. That Plaintiffs were harmed; and
"7. That Plaintiffs reliance on the representation was a substantial factor in causing their harm.
"8. That Ed Corrente was an officer of Dermacia and participated in, ratified, approved, or authorized the false representation made by or on behalf of Dermacia.
"Plaintiffs do not need to prove that Ed Corrente personally benefitted from any misrepresentation or that personally made any misrepresentation himself."
The jury was instructed on the intentional misrepresentation claim, with respect to Corrente, as follows:
"Plaintiffs claim that they were harmed because Dermacia concealed certain information and that as an officer of Dermacia, Ed Corrente is personally responsible for the harm caused by such concealment. To establish this claim, Plaintiffs must prove all of the following:
"1. That Dermacia disclosed some facts to Fedor Frastacky or Frastacky Associates, but intentionally failed to disclose other important facts, making the disclosure deceptive;
"2. That Plaintiffs did not know of the concealed fact;
"3. That Dermacia intended to deceive Plaintiffs by concealing the fact;
"4. That Plaintiffs reasonably relied on Dermacia's deception;
"5. The Plaintiffs were harmed; and
"6. That Dermacia's concealment was a substantial factor in causing Plaintiffs harm.
"7. That Ed Corrente was an officer of Dermacia and participated in, ratified, approved or authorized the concealment.
Plaintiffs do not need to prove the Ed Corrente personally benefitted from any concealment or that he personally concealed any fact himself.
The jury was instructed as follows with respect to the cause of action for conspiracy:
"Fedor Frastacky and Frastacky Associates, Inc. claim that they were harmed by Jan Hall, Matt Nicosia, and/or Ed Corrente's intentional misrepresentations or concealment, breach of fiduciary duty or fraudulent transfers and that Jan Hall, Matt Nicosia, Ed Corrente are responsible for the harm because they were part of a conspiracy to commit such intentional misrepresentations or concealments, breach of fiduciary duty or fraudulent transfers. A conspiracy is an agreement by two or more persons to commit a wrongful act. Such an agreement may be made orally or in writing or may be implied by the conduct of all parties.
"If you find that Jan Hall, Matt Nicosia or Ed Corrente committed an act that harmed [the plaintiffs], then you must determine whether the other defendants are also responsible for the harm. Jan Hall, Matt Nicosia and Ed Corrente are responsible if [the plaintiffs] prove[ ] both of the following:
"1. That Jan Hall, Matt Nicosia, or Ed Corrente was aware that any of them planned to misrepresent or conceal facts, breach their fiduciary duties or engage in fraudulent transfers; and
"2. That Jan Hall, Matt Nicosia, or Ed Corrente agreed with each other and intended that the acts be committed.
"Mere knowledge of a wrongful act without cooperation or an agreement to cooperate is insufficient to make Jan Hall, Matt Nicosia, or Ed Corrente responsible for the harm.
"A conspiracy may be inferred from circumstances, including the nature of the acts done, the relationships between parties, and the interests of the alleged coconspirators. [The plaintiffs are] not required to prove that Jan Hall, Matt Nicosia, or Ed Corrente personally committed a wrongful act or knew all the details of the agreement or the identities of all the other participants."
In addition, contrary to Corrente's attorney's comments at oral argument in this matter, during closing argument, Frastacky's attorney never referred to the misrepresentations made, or the "cover-up" (i.e., the concealment of the correct numbers at a later point in time), as constituting "fraud" or the "defrauding" of the plaintiffs. Plaintiff's counsel mentioned the words "fraud," "fraudulent" or "defraud" 13 times during his closing argument. Nine of the 13 instances occurred when counsel was discussing the fraudulent transfer cause of action. Two of the instances involved plaintiffs' counsel referring to the special finding that the jury was asked to make regarding whether any of the defendants had "defrauded" either of the plaintiffs, without further explanation as to what the term "defrauded" meant. Neither of the remaining two references necessarily suggested to the jury that the question on the verdict form asking the jury to determine whether any of the defendants had "defrauded" the plaintiffs might relate to causes of action other than the fraudulent transfer cause of action. Rather, in both instances, counsel for plaintiffs mentioned the word "fraud" and "defraud" in addition to mentioning other claims, such as misrepresentation, thereby potentially indicating to the jury that "fraud" was a distinct concept from those other claims. Further, neither of these two references explained or made clear to the jury that one who misrepresents or conceals has also necessarily defrauded the victim. It thus appears from the record that the jury could have reasonably understood the references to "fraud" by plaintiffs' counsel during closing argument to indicate that defrauding someone was something distinct from making a misrepresentation and/or concealing a material fact, and not as indicating that making a misrepresentation or concealing a material fact was a form of defrauding a plaintiff.
In light of this record, and in particular, in light of the fact that the jury instructions regarding fraudulent transfer were the only instructions that refer to the words "fraud" or "defraud," the jury's response on the verdict form to the effect that Corrente did not "defraud[ ]" the plaintiffs can be best understood as demonstrating not that the jury had rejected the intentional misrepresentation, concealment, and/or conspiracy to misrepresent and/or conceal theories, but that the jury did not believe that Corrente was liable to the plaintiffs under either of the fraudulent transfer theories of liability (i.e., actual fraudulent transfer or constructive fraudulent transfer) advanced by the plaintiffs.
Corrente, in effect, invites us to accept his interpretation of the verdict form, while rejecting an alternative, reasonable interpretation that would support the judgment. A long line of authority weighs heavily against doing so; again, "all reasonable inferences will be indulged in on appeal to support, rather than defeat, a jury's verdict and the judgment rendered thereon." (Fransen v. Washington (1964) 229 Cal.App.2d 570, 574.) Indulging reasonable inferences on appeal to support the jury's verdict, the jury's special finding regarding the "defrauded" question can be reconciled with a jury finding that Corrente was liable for participating in intentional misrepresentation, intentional concealment, breach of fiduciary duty, and/or as a conspirator in the intentional misrepresentation, concealment, and/or breaches of fiduciary duty. B. There is substantial evidence from which the jury could have concluded that Dermacia's misrepresentations and/or concealments were a substantial factor in causing Frastacky's harm
Corrente contends that he is entitled to judgment as a matter of law on any misrepresentation or concealment claim because there is insufficient evidence to support a finding that any such misrepresentations or concealment of material facts was a proximate cause of Frastacky's harm. We disagree with Corrente's interpretation of the record.
In essence, Corrente is arguing that any misrepresentations made to Frastacky by Dermacia, or any concealment of material facts from Frastacky on the part of Dermacia, were not the proximate cause of Frastacky's loss of the investment money. Corrente contends that the failure of the Citigroup offering, which resulted from an economic crisis, was an unforeseeable intervening factor that actually caused Frastacky's loss. According to Corrente, the "loss of their investment was admittedly caused by the 2008 economic crisis and not any problem with the company."
" 'Proximate cause . . . is generally a question of fact for the jury.' " (Huang v. The Bicycle Casino, Inc. (2016) 4 Cal.App.5th 329, 348 (Huang), quoting Hoyem v. Manhattan Beach City Sch. Dist. (1978) 22 Cal.3d 508, 520.) In addition, even if the defendant's conduct combined with another factor to cause the plaintiff harm, the defendant may be held responsible for the harm: " 'a defendant cannot avoid responsibility just because some other person, condition, or event was also a substantial factor in causing the plaintiff's harm.' " (Huang, supra, at p. 348.) A defendant's conduct is not a substantial factor in causing harm only " 'if the same harm would have occurred without that conduct.' " (Ibid.)
There is clearly substantial evidence to support the conclusion that, but for the fact that Frastacky had been provided inaccurate and false financial statements regarding Dermacia's historic value as well as projections based on those inaccurate numbers, Frastacky would not have made multiple bridge loans over a period of months, and consequently, would not have lost that money upon Dermacia's failure. The evidence demonstrates that Frastacky would not have made the bridge loans if he had been provided with accurate financial data regarding the status of Dermacia at the time he was making the loans. Indeed, Fedor Frastacky testified that if he had been provided the actual and correct sales figures, he would not have loaned the company any money because he believed that, given those figures, Dermacia would not have been able to raise any additional money through the Citigroup private placement offering. Fedor Frastacky's testimony constitutes substantial evidence to support the jury's implicit conclusion that Dermacia's conduct in misrepresenting the financial data and concealing the accurate numbers as the auditing process continued to demonstrate that the prior historical data had been incorrect, was a significant factor in causing the plaintiffs' loss. C. Given the general verdict form utilized by the parties, two of Corrente's other legal arguments provide him no relief from the judgment
Corrente contends that the trial court erred (1) in permitting the jury to hold him personally liable pursuant to a negligence theory when there was no evidence that he actively participated in the negligent misrepresentation and/or the harm suffered by the plaintiffs was not physical harm, which he contends is required to impose personal liability on an officer or director for the negligence of a company; and (2) even if he could be held personally liable under a negligence theory, the trial court erred in instructing the jury with respect to the circumstances under which a corporate officer may be held liable for corporate negligence.
We need not address these issues because we would affirm the judgment even if we were to conclude that some error occurred with regard to the negligent misrepresentation claim as presented to the jury. As discussed above, the verdict awarding damages to the plaintiffs may be interpreted as being based on multiple alternate theories of recovery, theories other than the negligent misrepresentation theory. Indeed, the general verdict requires that we imply that the jury found that the plaintiffs were entitled to damages as a result of intentional misrepresentation, concealment, breach of fiduciary duty, conspiracy to commit any misrepresentation, concealment and/or breach of fiduciary duty, as well as negligent misrepresentation. When the jury returns a general verdict on multiple causes of action, it is assumed that the jury found in the prevailing party's favor on each cause of action: " '[W]here as here an appeal is taken from a general verdict returned on several counts or theories of recovery, it is presumed that the jury found in favor of the prevailing party on each count or theory of recovery and the judgment must be affirmed so long as any one count or theory of recovery is supported by substantial evidence. [Citation.]' (Fn.omitted.)" (Tavaglione v. Billings (1993) 4 Cal.4th 1150, 1155 (Tavaglione), italics added.)
We do not intend to suggest that we are deciding the questions raised by Corrente. We merely presume, for the sake of argument, that he is correct in his assertions of error. --------
"[B]y reason of the 'general verdict rule,' it is unnecessary to determine whether every count or theory of recovery is legally valid and supports the general verdict, but only whether any one such theory is valid and supports that verdict. . . . 'In other words, we must affirm the judgment if we determine there is any theory of recovery which supports the judgment. This principle pertains even though the measure of damages, and thus the amount of the general damage verdict, might differ under the various theories of recovery pleaded in the complaint.' " (Tavaglione, supra, 4 Cal.4th at pp. 1155-1156, fn. omitted.)
The rationale for the general verdict rule is as follows: "If the plaintiff makes no election or is not otherwise estopped [citation] the election as to which cause of action is sustained is, after the taking of all the evidence, a matter for the judge or the jury. [Citation.] Where an appeal is taken from such a judgment the reviewing court has the power to disregard particular theories and findings and to affirm the judgment on a theory which is supported by the finding and evidence in order that causes may be disposed of by a single appeal and without further proceedings in the trial court." (Crogan v. Metz (1956) 47 Cal.2d 398, 403.)
Thus, as long as any one count or theory of recovery is supported by substantial evidence, the judgment must be affirmed. On appeal, Corrente makes no claim of insufficiency of the evidence with respect to the misrepresentation, concealment, and/or breach of fiduciary duty causes of action, other than to challenge the evidence with respect to causation—an argument that we have already addressed in part III.B, ante. We interpret Corrente's failure to raise any other argument regarding the sufficiency of the evidence as a concession that, in the event that we reject his contention that the jury must have found him liable on only the negligence theory, the evidence is sufficient to support the jury's implied findings that Corrente was involved in, and approved of, the provision of false financial information to Frastacky. Further, a review of the evidence presented at trial confirms such a conclusion. For example, although the evidence is largely circumstantial, the jury could draw reasonable inferences to conclude that Corrente actively participated in a conspiracy to keep Frastacky in the dark about Dermacia's actual financial state, in an effort to keep the company afloat until the Citigroup private placement offering could take place. At a minimum, there is abundant circumstantial evidence that Corrente and Nicosia were aware that Frastacky had been provided inaccurate financial data by Vea. Vea's testimony indicated that Nicosia was the person who had provided her with the financial information to give to Frastacky. The jury could have reasonably concluded, based on Corrente's role in the company and the testimony regarding his close work with Nicosia during this period of time, that Corrente, too, was aware that Frastacky had been provided inaccurate financial data, and was never provided with the corrected data that complied with generally accepted accounting principles. Thus, the jury could have determined, based on the circumstantial evidence, that both Nicosia and Corrente participated in the concealment of material information during the period of time that Frastacky continued to loan the company money.
There is also abundant evidence that Nicosia and Corrente were acutely aware of the dire financial position Dermacia was in during 2008, after the audited financials had been reported and after Dermacia had been sued by a number of individuals and entities. Yet, Nicosia and Corrente continued to draw salaries and reduce the amount of cash assets that Dermacia had available from which to pay its debts, including its debt to Frastacky. Such evidence is sufficient to support Frastacky's claim for breach of fiduciary duty.
In sum, there is sufficient evidence in the record to support the implied findings that Corrente intentionally misrepresented material facts to Frastacky, concealed material facts from Frastacky, breached a fiduciary duty to Frastacky, and/or participated in a conspiracy to do any or all of these things. Consequently, we must affirm the judgment, despite Corrente's contentions regarding insufficiency of the evidence and instructional error with respect to a single theory of recovery. (See Tavaglione, supra, 4 Cal.4th at p. 1155 [general verdict will be upheld if any one of the prevailing party's claims or defenses is supported by substantial evidence and unaffected by error].)
IV.
DISPOSITION
The judgment is affirmed.
AARON, J. WE CONCUR: HUFFMAN, Acting P. J. HALLER, J.