Greenfield v. Kandeel CA2/5

Filed 6/14/22 Greenfield v. Kandeel CA2/5
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION FIVE

GREENFIELD LLC, B297194

Plaintiff and Appellant, (Los Angeles County
Super. Ct. No. BC548794)
v.

AYMAN KANDEEL et al.,

Defendants and Appellants.

APPEAL from a judgment of the Superior Court of Los
Angeles County, Dennis J. Landin, Judge. Dismissed in part and
judgment vacated and remanded with directions.
Freedman + Taitelman, Bryan J. Freedman and Steven E.
Formaker; Durie Tangri, Benjamin B. Au; Lewis Baach
Kaufmann Middlemiss, Tara J. Plochocki, for Plaintiff and
Appellant.
Shaw Koepke & Satter, Jens B. Koepke, for Defendants
and Appellants.
 I. INTRODUCTION

Plaintiff and appellant Greenfield LLC (Greenfield)1
brought an action against defendants and appellants Ayman
Kandeel and AKCJ Management, Inc. (AKCJ) asserting causes of
action for conversion, breach of fiduciary duty, common law
fraud, and common law negligent misrepresentation.2 In a
special verdict, the jury found in Greenfield’s favor on its
conversion claims against defendants and on its fraud and
negligent misrepresentation claims against Kandeel. On
Greenfield’s conversion claims, the jury awarded $20.3 million
against Kandeel, $5.7 million of which it awarded jointly and
severally against Kandeel and AKCG. On Greenfield’s fraud and
negligent misrepresentation claims, it awarded $25 million
against Kandeel.
Apart from its conversion, fraud, and negligent
misrepresentation verdicts, the jury found that the al-Jarallahs
could have avoided $25 million of the damages awarded against

1 On April 15, 2014, Jarallah al-Jarallah and his father
Mohammed Nassar al-Jarallah (al-Jarallahs) assigned to
Greenfield “all claims arising from their fraudulently induced
investment of $78,200,000 against any and all responsible parties
. . . and granted to Greenfield . . . the full power to collect, sue for,
compromise, or in any other manner enforce collection thereof.”
When we refer to a member of the family, we use the first name
for clarity.

2 The third amended complaint named several other
defendants who are not parties to this appeal, some of whom we
identify below as necessary for context. The third amended
complaint also asserted other causes of action against those
defendants that are not at issue in this appeal.

2
Kandeel through reasonable efforts or expenditures. It also
found that the al-Jarallahs had unclean hands. As to the al-
Jarallahs’ unclean hands, the jury found that it would not be
unfair to award damages against the Pi Capital defendants,3 but
would be unfair to award damages against the JPMorgan
defendants.4
The special verdict form required the jury to determine the
Pi Capital defendants’ and the JPMorgan defendants’ unclean
hands affirmative defenses before it addressed liability.
Accordingly, based on its unclean hands findings, the jury
rendered verdicts as to the Pi Capital defendants, but not as to
the JPMorgan defendants.
In posttrial proceedings, the trial court awarded Greenfield
$8,343,022 in prejudgment interest, $2,342,622 of which it
awarded jointly and severally against Kandeel and AKCJ (i.e.,

3 For purposes of the trial, the trial court informed the jury
that the designation “Pi Capital defendants” would refer to
Kandeel and several companies affiliated with him: Pi Capital;
Pacific International Holding Group, Inc. (PIHG); Pi
Capital/Borak GP, LLC; Pi Capital GP, LLC; Pi Capital Fund,
LP; Middle Eastern Telecom International, Inc., also known
Middle Eastern Telecommunications (METI); AKCJ; Pacific
International Management Corporation, also known as Pacific
International Management, Inc.; Pacific International
Management III, LLC; I Need a Grand Productions, LLC; Pacific
Med Trade, Inc.; AK Entertainment, Inc., doing business as AK
Comics; and Pacific International Properties, LLC.

4 The trial court defined the “JPMorgan defendants” for the
jury as: JPMorgan Chase & Co.; JPMorgan Chase Bank, N.A.;
and J.P. Morgan Securities, formerly known as J.P. Morgan
Securities, Inc.

3
prejudgment interest on the $5.7 million joint and several
conversion verdict) and denied codefendant Pi Capital its
attorney fees.
In its appeal, Greenfield contends the trial court erred in
determining the date on which prejudgment interest began to
accrue and there was no basis for the court’s mitigation
instruction or the jury’s failure to mitigate finding. In their
appeal, defendants contend the jury’s special verdict findings on
their and the JPMorgan defendants’ unclean hands affirmative
defenses were irreconcilably inconsistent, insufficient evidence
supported the conversion verdicts because they were based on
inadmissible hearsay financial records, and Greenfield lacked
standing to pursue its conversion claims. Codefendant Pi Capital
contends the court erred in failing to award it attorney fees.

II. BACKGROUND5

Jarallah was a member of a wealthy Saudi Arabian family.
In 1999, he was an undergraduate engineering and economics
student at the University of Southern California. He met
Kandeel, an economics Ph.D. student and teaching assistant, in
an economics department computer lab and they became friends.

5 Because Kandeel does not challenge the sufficiency of the
evidence supporting the fraud and negligent misrepresentation
verdicts, and defendants do not challenge the sufficiency of the
evidence supporting the conversion verdicts except as to their
claim that the verdicts were based solely on inadmissible hearsay
financial records, we set forth a brief recitation of the facts for
context and add facts below that are necessary to address the
parties’ claims on appeal.

4
 While at USC, Jarallah started a company called Native
Names which “had the technology for typing website addresses in
different languages.” Mohammad financed the company.
Jarallah hired Kandeel as Native Names’ director of business
development. Jarallah was satisfied with Kandeel’s performance
and Mohammad was very satisfied with his investment in the
company. Other successful business ventures involving Jarallah
and Kandeel followed.
In 2004, Mohammad asked Jarallah to manage the family
investment portfolio which, at that time, was worth from $800
million to $1 billion. That same year, Kandeel and a man named
Steve Picciano approached Jarallah about managing some of the
al-Jarallah family investments through an E-trade account. The
al-Jarallahs allowed Kandeel and Picciano to manage $10 million
for six months. At the end of six months, the account had earned
a 20 percent return. Jarallah was very satisfied with Kandeel
and Picciano’s performance.
Thereafter, Kandeel suggested the formation of Pi Capital,
a company that would oversee the al-Jarallahs’ investments in
the United States. Kandeel told Jarallah he had “managed a
$270 million portfolio for ultra-high net worth individuals from
Europe and the Middle East” and had served as the economic
advisor to the Egyptian Minister of Industry.
Pi Capital was incorporated in January 2005. Jarallah
served as Pi Capital’s president and chairman, Kandeel served as
chief executive officer and Picciano served as chief financial
officer. The al-Jarallahs invested about $160 million with Pi
Capital. After redemptions, their net investment was about $88
million.

5
 The Saudi International Investment Company (SIIC) was
formed “to meet the requirements of the Saudi financial market
authorities to apply and acquire a brokerage license, a security
brokerage license in the Kingdom of Saudi Arabia for Jarallah’s
company that he was establishing over there.” In 2005, Jarallah
authorized Pi Capital to invest $9 million in SIIC—$6 million
was transferred on June 17, 2005, and $3 million on
August 12, 2005. Shortly after those investments, Kandeel had
$6 million transferred to his own bank account in two
installments—$3 million on July 20, 2005, and $3 million on
August 17, 2005.
METI was formed to invest in telecommunications
technology projects. In 2005, Jarallah authorized Pi Capital to
invest $15 million in METI. Kandeel had $8,603,438 transferred
from METI to TEC Investments, a consulting company Kandeel
formed to “run a business out of.”
PIHG was formed to establish a bank in the United States.
In 2005, Jarallah authorized Pi Capital to invest $42 million in
PIHG—$24 million was transferred on October 25, 2005, and $18
million on November 22, 2005. Almost immediately after PIHG
received the second of those transfers, Kandeel had $30 million
transferred to his own bank account—$18 million on
November 22, 2005, and $12 million on November 23, 2005.
Later, Kandeel returned $5 million to PIHG for investment in
banking projects. Kandeel invested the remaining $25 million in
an Egyptian resort real estate venture called Al Forsan.
Sometime prior to September 30, 2006, PIHG loaned $5.7
million to AKCJ. The loan was reflected on PIHG’s balance
sheets as a loan receivable from an “Ayman Entity (TBD).” The
loan was never repaid.

6
 In 2007, the Saudi Arabian Capital Market Authority
(CMA) investigated the al-Jarallahs for stock market
manipulation. The CMA found them guilty, ordered them to
disgorge their profits and imposed fines and sanctions. The trial
court instructed the jury:
“You have heard that Mohammed Nasser [a]l-Jarallah, the
father, and Jarallah [a]l-Jarallah, the son, have been convicted
for stock market manipulation in Saudi Arabia. The proceedings
resulting in these convictions were criminal in nature, not civil,
and involved felonies.
“You were told about the convictions to help you decide
whether you should believe these persons. You were also
provided with this information to help you decide whether the
[al-]Jarallahs have acted with unclean hands, to help you judge
their credibility, and to rebut other contentions by Greenfield in
this case, such as the extent of the [al-]Jarallahs’ sophistication,
the reasons why they authorized transfers out of the Pi Capital
accounts at JPMorgan, and whether the [al-]Jarallahs are
responsible for some or all of the damages Greenfield seeks here.
You may consider this information for all of these purposes.”
On January 15, 2013, in an e-mail response to a request for
audited financial statements for Pi Capital, Kandeel stated,
“There isn’t really much to audit, after Pi Capital lost most of its
accounts under management in 2005/2006.” When Jarallah saw
Kandeel’s response, he was shocked and realized “the whole thing
was just a scam.”

7
 III. DISCUSSION

A. Prejudgment Interest

The parties stipulated that the jury would decide if
Greenfield was entitled to prejudgment interest and the trial
court would calculate the amount of any award. The jury
awarded Greenfield prejudgment interest on its conversion
verdict, and the court calculated the amount of prejudgment
interest owed at $8,343,022. Greenfield contends the court
abused its discretion in determining the dates on which
prejudgment interest began to accrue.
“In an action for the breach of an obligation not arising
from contract, and in every case of oppression, fraud, or malice,
interest may be given, in the discretion of the jury.” (Civ. Code,
§ 3288.) Prejudgment interest accrues from the date the plaintiff
lost its money due to the defendant’s wrongful conduct.
(Michelson v. Hamada (1994) 29 Cal.App.4th 1566, 1588.) We
review a trial court’s determination of the date on which
prejudgment interest began to accrue for an abuse of discretion.
(Ibid.)
“‘“‘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. . . .’”’ [Citation.]” (IIG Wireless,
Inc. v. Yi (2018) 22 Cal.App.5th 630, 650 (IIG Wireless).) “‘Money
cannot be the subject of a cause of action for conversion unless
there is a specific, identifiable sum involved . . . .’” (PCO, Inc. v.

8
Christensen, Miller, Fink, Jacobs, Glaser, Weil & Shapiro, LLP
(2007) 150 Cal.App.4th 384, 395.)
In its posttrial motion, Greenfield argued that interest
began to accrue on the $20.3 million conversion verdict as follows:
on the $6 million Kandeel converted through the SIIC, interest
began to accrue no later than August 17, 2005, based on SIIC’s
General Ledger showing two separate $3 million transfers on
July 20 and August 17, 2005; on the $5.7 million defendants
converted through PIHG, interest began to accrue no later than
September 30, 2006, based on PIHG’s September 30, 2006,
balance sheet showing a loan receivable from an “Ayman Entity
(TBD)” of $5.7 million—i.e., the $5.7 million AKCJ loan; and on
the $8.6 million Kandeel converted through METI, interest began
to accrue no later than December 31, 2006, based on METI’s
December 31, 2006, balance sheet showing an $8,603,4386
investment in TEC.
The trial court found that Greenfield had submitted
insufficient evidence to support its proposed dates for Kandeel’s
conversions. Unable to identify the exact dates of the
conversions, the court turned to the “next best alternative”—the
earliest date the evidence showed the conversions had already
occurred. For that date, it used Jarallah’s testimony about how
upset he became when he learned from the January 15, 2013,
e-mail that his family investment was lost.
At best, Greenfield showed that defendants transferred
funds from various accounts on particular dates. Greenfield did
not, however, adequately show with certainty the dates on which
Kandeel and defendants wrongfully exercised dominion over the

6 Greenfield posits the jury rounded this figure down to $8.6
million.

9
al-Jarallahs’ funds. Accordingly, it has failed to show that the
trial court abused its discretion in selecting January 15, 2013, as
the date on which interest began to accrue—i.e., that the court’s
selection was arbitrary and resulted in a manifest miscarriage of
justice. (Pilliod v. Monsanto Company (2021) 67 Cal.App.5th
591, 630.)

B. Mitigation of Damages

Greenfield contends the trial court erred in instructing the
jury on mitigation of damages as to its fraud and negligent
misrepresentation claims against Kandeel and the jury’s finding
that it failed to mitigate its damages was not supported by
substantial evidence. We agree that the jury’s finding was not
supported by substantial evidence.7

1. Standard of Review

“Mitigation of damages is a question of fact, and is subject
to review for the existence of substantial evidence. [Citation.][Fn.
omitted.]” (OCM Principal Opportunities Fund, L.P. v. CIBC
World Markets Corp. (2007) 157 Cal.App.4th 835, 875 (OCM).)
“‘“A motion for judgment notwithstanding the verdict may be
granted only if it appears from the evidence, viewed in the light

7 Because we hold that substantial evidence did not support
the jury’s finding, we need not address Greenfield’s claim that the
court erred in instructing the jury on mitigation of damages or
Kandeel’s claim that Greenfield forfeited its instructional error
claim by failing to object to the mitigation instruction in the trial
court.

10
most favorable to the party securing the verdict, that there is no
substantial evidence in support. [Citation.] [¶] . . . As in the
trial court, the standard of review [on appeal] is whether any
substantial evidence—contradicted or uncontradicted—supports
the jury’s conclusion.”’ [Citation.]” (Webb v. Special Electric Co.,
Inc. (2016) 63 Cal.4th 167, 192.) “Substantial evidence is not
‘“synonymous with ‘any’ evidence. It must be reasonable . . . ,
credible, and of solid value . . . .” [Citation.]’ [Citation.]” (OCM,
supra, 157 Cal.App.4th at p. 845.)

2. Analysis

“The doctrine of mitigation of damages holds that ‘[a]
plaintiff who suffers damage as a result of either a breach of
contract or a tort has a duty to take reasonable steps to mitigate
those damages and will not be able to recover for any losses
which could have been thus avoided.’ [Citations.]” (Valle de Oro
Bank v. Gamboa (1994) 26 Cal.App.4th 1686, 1691 (Valle de Oro
Bank).) “‘The rule of [mitigation of damages] comes into play
after a legal wrong has occurred, but while some damages may
still be averted . . . .’” (Pool v. City of Oakland (1986) 42 Cal.3d
1051, 1066 (Pool); Valle de Oro Bank, supra, 26 Cal.App.4th at
p. 1691 [“Typically, the rule of mitigation of damages comes into
play when the event producing injury or damage has already
occurred and it then has become the obligation of the injured or
damaged party to avoid continuing or enhanced damages through
reasonable efforts”].)
The jury awarded Greenfield $25 million on its fraud and
negligent misrepresentation causes of action against Kandeel. It
found, however, that the al-Jarallahs could have avoided the

11
entire $25 million in damages they suffered through “reasonable
efforts or expenditures.”
Greenfield moved for judgment notwithstanding the verdict
or, alternatively, to set aside or vacate the jury’s finding that the
al-Jarallahs failed to mitigate their damages. It argued, in part,
that Kandeel had presented no evidence about what the al-
Jarallahs could have done to recover their money from Kandeel,
when they could have done it, or what they could have recovered.
In opposition, Kandeel claimed that substantial evidence
supported the jury’s mitigation finding because the al-Jarallahs
failed to audit or otherwise monitor their funds. He argued that
“the jury could infer that if Jarallah simply had picked up the
telephone, called Mr. Drew[8] in 2005 or 2006 and requested
financial statements, Mr. Drew would have provided them and
they would have showed the disposition of the $25 million at
issue.”
Further, Kandeel claimed that substantial evidence
supported the jury’s mitigation finding because the al-Jarallahs
failed to establish common sense safeguards over their funds. He
argued the al-Jarallahs could have required their money not be
transferred to Egypt for the Al Forsan project without their
knowledge and consent—e.g., by requiring an al-Jarallah
signature for the transfer of funds.
Finally, Kandeel claimed that substantial evidence
supported the jury’s mitigation finding because the al-Jarallahs
authorized the investment of their funds in the high-risk Al
Forsan project.
The trial court ruled, “Kandeel cogently sets forth all the
evidence that supports the jury’s finding as to lack of

8 Kirkwood Drew was PIHG’s chief executive officer.

12
mitigation. . . . Given the jury’s unanimous finding on this issue,
the court declines to set it aside.”
Kandeel’s argument misperceived the doctrine of mitigation
of damages. In effect, Kandeel’s argument was that if the al-
Jarallahs had been reasonably diligent, he would not have been
able to defraud them of their money in the first place. The
mitigation doctrine does not, however, concern an injured party’s
duty to avoid the tort in the first instance. Like here, when a
party’s tort results in damage to another, the injured party has a
duty to mitigate or lessen the damages following and resulting
from that tort. (Pool, supra, 42 Cal.3d at p. 1066 [“‘The rule of
[mitigation of damages] comes into play after a legal wrong has
occurred . . .’”]; Valle de Oro Bank, supra, 26 Cal.App.4th at
p. 1691 [“Typically, the rule of mitigation of damages comes into
play when the event producing injury or damage has already
occurred . . .”].) Kandeel makes the same failed argument on
appeal.
Moreover, even though Kandeel identifies measures he
claims the al-Jarallahs could have taken to mitigate their
damages, he cites no evidence that those measures would have
returned any of the al-Jarallahs’ funds to them. “While
substantial evidence may inevitably consist of inferences, they
must be the result of logic and reason emanating from the
evidence and not mere speculation or conjecture.” (Quigley v.
McClellan (2013) 214 Cal.App.4th 1276, 1283; Wise v. DLA Piper
LLP (US) (2013) 220 Cal.App.4th 1180, 1188 [speculation is not
evidence].)
Accordingly, we reverse the trial court’s denial of
Greenfield’s motion for judgment notwithstanding the verdict
and remand this matter for the court to determine prejudgment

13
interest on the jury’s fraud and negligent misrepresentation
verdicts.

C. Unclean Hands Affirmative Defense

The jury found in favor of the JPMorgan defendants on
their unclean hands affirmative defense but against the Pi
Capital defendants on their unclean hands affirmative defense.
Kandeel argues that because the JPMorgan defendants and the
Pi Capital defendants presented the same evidence and made the
same arguments to the jury in support of their respective unclean
hands affirmative defenses, the jury’s findings are irreconcilably
inconsistent and we must remand for a new trial. Greenfield
argues that any inconsistency in the findings was not prejudicial
because there was insufficient evidence to support the affirmative
defense. We agree with Greenfield.9

1. Standard of Review

“When an appellant contends the evidence is insufficient to
support a judgment, order, or factual finding, we apply the

9 Because we hold that insufficient evidence supported the Pi
Capital defendants’ unclean hands defense, we need not decide
Greenfield’s contentions that Kandeel forfeited this issue and the
jury’s findings were not inconsistent. Our holding that
insufficient evidence supported the Pi Capital defendants’
unclean hands affirmative defense does not affect the JPMorgan
defendants’ verdict against Greenfield as Greenfield did not
appeal from that part of the judgment or challenge on appeal the
jury’s findings as to the JPMorgan defendants’ unclean hands
affirmative defense.

14
substantial evidence standard of review. ‘Where findings of fact
are challenged on a civil appeal, we are bound by the
“elementary, but often overlooked principle of law, that . . . the
power of an appellate court begins and ends with a determination
as to whether there is any substantial evidence, contradicted or
uncontradicted,” to support the findings below. [Citation.]”
(Cahill v. San Diego Gas & Electric Co. (2011) 194 Cal.App.4th
939, 957 (Cahill).)

2. Analysis

“The defense of unclean hands arises from the maxim, ‘“‘He
who comes into Equity must come with clean hands.’”’ [Citation.]
The doctrine demands that a plaintiff act fairly in the matter for
which he seeks a remedy. He must come into court with clean
hands, and keep them clean, or he will be denied relief,
regardless of the merits of his claim. [Citations.] The defense is
available in legal as well as equitable actions. [Citations.]”
(Kendall-Jackson Winery, Ltd. v. Superior Court (1999) 76
Cal.App.4th 970, 978 (Kendall-Jackson).)
“‘The essence of the “clean hands” doctrine is not that the
plaintiff’s hands are dirty but “that the manner of dirtying
renders inequitable the assertion of such rights against the
defendant.”’ [Citation.] ‘It is not every wrongful act, nor even
every fraud, which prevents a suitor in equity from obtaining
relief.’ [Citation.] ‘It is settled that the act upon which equity
may refuse relief to a plaintiff because he does not come into
court with clean hands must prejudicially affect the rights of the
person against whom the relief is sought so that it would be
inequitable to grant such relief.’ [Citation.] ‘It must have been

15
conduct which, if permitted, inequitably affects the relationship
between the plaintiff and the defendant.’ [Citations.]” (Martin v.
Kehl (1983) 145 Cal.App.3d 228, 239, fn. 1 (Martin); Brown v.
Grimes (2011) 192 Cal.App.4th 265, 283 (Brown) [“‘If he [the
wrongdoer] is not guilty of inequitable conduct toward the
defendant in that transaction, his hands are as clean as the court
can require.’ (2 Pomeroy, A Treatise on Equity Jurisprudence
(5th ed. 1941) § 399, p. 97; see Bradley Co. v. Bradley (1913) 165
Cal. 237, 242, . . . [citing Pomeroy and stating, ‘His misconduct
must be so intimately connected to the injury of another with the
matter for which he seeks relief, as to make it inequitable to
accord him such relief. . .’]”]; Mattco Forge, Inc. v. Arthur Young
& Co. (1997) 52 Cal.App.4th 820, 846 (Mattco) [“there must be a
direct relationship between the misconduct and the claimed
injuries”].)
The basis for the JPMorgan defendants’ and the Pi Capital
defendants’ unclean hands affirmative defenses was the al-
Jarallahs’ conviction for stock manipulation in Saudi Arabia with
funds allegedly withdrawn from their Pi Capital investments. As
stated above, the trial court instructed the jury, “You have heard
that Mohammed Nasser [a]l-Jarallah, the father, and Jarallah
[a]l-Jarallah, the son, have been convicted for stock market
manipulation in Saudi Arabia. The proceedings resulting in
these convictions were criminal in nature, not civil, and involved
felonies. [¶] . . . You were also provided with this information to
help you decide whether the [al-]Jarallahs have acted with
unclean hands . . . .”
The al-Jarallahs’ unclean hands conduct—stock
manipulation in Saudi Arabia—was neither directed at nor
prejudiced Kandeel. Their stock manipulation was directed at

16
stock market investors who were harmed, not Kandeel. That
conduct was separate from the al-Jarallahs’ investments with
Kandeel. Because the al-Jarallahs were “‘not guilty of
inequitable conduct toward’” Kandeel in their investment with
him, their “‘hands are as clean as the court can require.’”
(Brown, supra, 192 Cal.App.4th at p. 283; Martin, supra, 145
Cal.App.3d at p. 239, fn. 1; Mattco, supra, 52 Cal.App.4th at
p. 846; see also, Jay Bharat Developers, Inc. v. Minidis (2008) 167
Cal.App.4th 437, 445, quoting Kendall-Jackson, supra, 76
Cal.App.4th at p. 979 [“‘The misconduct must “‘“prejudicially
affect . . . the rights of the person against whom the relief is
sought so that it would be inequitable to grant such relief”’”’”]; 2
Schwing, Cal. Affirmative Defenses (2021) § 45:3 (2d ed.) [“courts
have ruled that the party seeking to invoke the unclean hands
doctrine must have been injured by the alleged wrongful
conduct”].) Accordingly, insufficient evidence supported the Pi
Capital defendants’ unclean hands affirmative defense and any
inconsistency in the jury’s findings was thus not prejudicial.

D. Hearsay Evidence

Defendants contend that insufficient evidence supported
the conversion verdicts because the verdicts were based on
hearsay financial records that were not admissible as business
records under Evidence Code section 1271. Greenfield argues
that defendants forfeited review of this issue because they did not
object to the admission of the financial records on hearsay
grounds and the records were admitted without limitation. We
agree that defendants have forfeited review of this issue.

17
 Katherine Orr worked as a bookkeeper for the accounting
firm CohnReznick. Kandeel was a CohnReznick client. Orr
provided bookkeeping services for Kandeel and his corporations.
She was the bookkeeper for and prepared financial statements
for SIIC, PIHG, and METI.
Greenfield’s counsel examined Orr about Exhibit 1076,
SIIC’s December 31, 2007, balance sheet, profit and loss
statements for 2005 through 2009, and general ledger. Orr
testified that she prepared the documents in the ordinary course
of her business working for an accounting firm. Greenfield’s
counsel asked that the exhibit be admitted into evidence. The
trial court sustained defense counsel’s foundation objection.
After further examination to establish Exhibit 1076’s
foundation, Greenfield’s counsel asked the trial court to admit
the exhibit into evidence. Defense counsel stated, “Same
objection, Your Honor. Foundation.” The court overruled the
objection and admitted Exhibit 1076. The court subsequently
sustained hearsay objections to questions about whether Exhibit
1076 showed that consulting fees were paid to Kandeel and
whether Kandeel was paid $6 million in consulting fees.
Greenfield’s counsel next questioned Orr about Exhibit 10,
PIHG’s September 30, 2006, balance sheet. Orr testified she
prepared the balance sheet based on documents provided to her
in her role as PIHG’s bookkeeper. Greenfield’s counsel asked the
court to admit the exhibit into evidence. Defense counsel stated,
“Same objection, Your Honor.”
Outside the jury’s presence, the trial court asked
Greenfield’s counsel if she intended to ask the same sort of
questions about Exhibit 10 as she had asked about Exhibit 1076.
Counsel responded that generally she did. Asked the basis for

18
his objection, defense counsel stated, “It’s hearsay and it’s—
there’s lack of foundation as well.”
The trial court asked Greenfield’s counsel if she intended to
lay the same foundation as she had for Exhibit 1076. She said
she did. Defense counsel stated that assuming Greenfield’s
counsel were to lay the same foundation and based on the court’s
earlier foundation ruling, defendants “would submit that the
hearsay concern remains.”
The trial court stated, “All right. Well, look, I agree with
[defense counsel] that the witness can’t tell us if, in fact,
consulting fees were paid. That would be without her—beyond
her personal knowledge. She could tell us what she inputted
based on what she had in front of her, and then you could argue
circumstantial evidence if that happened.” Greenfield’s counsel
posited, “If we asked the question, does this document accurately
reflect something, is that going to trigger a hearsay objection?”
Defense counsel responded that it would.
The trial court stated, “All right. Look, I think I’ll stick
with my ruling. I might give a limiting instruction as to what all
of these things mean in terms of what is being offered for the
truth here, because there’s an implication here that certain facts
exist which she would not have personal knowledge of.”
Greenfield’s counsel sought clarification, asking the trial
court if Orr could be asked “does this document accurately reflect
[questions]? And you’ll have an instruction on that and we can
move forward?” The court said, “Yes,” and asked Greenfield’s
counsel to prepare an instruction.10
After a break in Orr’s testimony, Greenfield’s counsel
returned to Exhibit 1076, asking Orr to explain what an entry

10 The court did not give the jury a limiting instruction.

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under “Consulting Expenses” identifying Kandeel reflected.
Defense counsel interposed a best evidence objection that the
trial court overruled. Orr then testified that Exhibit 1076
reflected that Kandeel had transferred $3 million on
July 20, 2005, and again on August 17, 2005.
Greenfield’s counsel then examined Orr further about
Exhibit 10. She asked if Orr was PIHG’s bookkeeper and if Orr
maintained PIHG’s balance sheet as part of her job as PIHG’s
bookkeeper. Orr answer, “Yes,” to both questions. Greenfield’s
counsel again asked the trial court to admit Exhibit 10 into
evidence. Defense counsel stated, “No objection, [Y]our Honor,”
and the court admitted the exhibit.
Greenfield’s counsel asked Orr to explain what the entry
“Ayman Entity TBD” under the “Loans Receivable” section
reflected. Defense counsel interposed lack of foundation, best
evidence, and hearsay objections. The trial court sustained the
objections. After laying a further foundation, Greenfield’s
counsel asked if “there’s $5.7 million going to Ayman Entity
TBD.” The court sustained defense counsel’s objection to “going
to,” telling Greenfield’s counsel to rephrase her question.
Greenfield’s counsel asked Orr if there was a $5.7 million
loan reflected in the “Loans Receivable” section of PIHG’s balance
sheet. Orr said there was. Greenfield’s counsel asked if that loan
“would have [been] made to the entities listed below.” Orr
responded that it would. Defense counsel objected on foundation
and hearsay grounds. The trial court overruled the objections.
Greenfield’s counsel also examined Orr about Exhibit 2631,
METI’s December 31, 2006, balance sheet. She asked if Orr was
METI’s bookkeeper and if Orr created METI’s balance sheet
using documents she received as part of her job as METI’s

20
bookkeeper. Orr answered, “Yes,” to both questions. Greenfield’s
counsel asked the trial court to admit Exhibit 2631 into evidence.
Defense counsel stated, “No objection, [Y]our Honor,” and the
court admitted the exhibit. Orr then testified, without objection,
that the “Other Current Assets” section in Exhibit 2631 reflected
an investment in TEC of $8,603,438.11
Defendants argue that the PIHG, METI, and SIIC balance
sheets were “the only evidence that purportedly showed the $20.3
million in funds going to Kandeel and AKCJ.” They further
argue that these financial records were inadmissible hearsay, not
subject to the business records exception in Evidence Code
section 1271.
The failure to object in the trial court to inadmissible
hearsay evidence forfeits the issue on appeal. (Evid. Code, § 353,
subd. (a) [“A verdict or finding shall not be set aside, nor shall the
judgment or decision based thereon be reversed, by reason of the
erroneous admission of evidence unless: [¶] (a) There appears of
record an objection to or a motion to exclude or to strike the
evidence that was timely made and so stated as to make clear the
specific ground of the objection or motion”]; People v. Eubanks
(2011) 53 Cal.4th 110, 142; Duronslet v. Kamps (2012) 203
Cal.App.4th 717, 725 [the failure to object to the admission of
hearsay documents in the trial court forfeits the issue on appeal];
In re Marriage of Kerry (1984) 158 Cal.App.3d 456, 466 [the
failure to object to the admission of an affidavit as hearsay
“waives the defect[], and the affidavit becomes competent
evidence”]; People v. Dorsey (1974) 43 Cal.App.3d 953, 960

11 Exhibit 2632, METI’s December 31, 2007, balance sheet
reflecting an investment in TEC of $8,603,438, also was admitted
without objection.

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[“before an appellate court will give consideration to an objection
to evidence, the specific ground for its exclusion must have been
clearly stated to the trial court”].) Although defendants objected
to some of Orr’s testimony on hearsay grounds and objected to
Exhibits 1076 and 10 on foundation grounds, they did not object
to the admission of Exhibits 10, 1076, or 2631 on hearsay
grounds. Accordingly, they have forfeited review of this issue.

E. Standing

The al-Jarallahs invested funds in Pi Capital which then
invested $9 million in SIIC, $42 million in PIHG, and $15 million
in METI. The conversion verdicts were based on SIIC’s $6
million in transfers to Kandeel, PIHG’s $5.7 million loan to
AKCJ, and METI’s $8.6 million transfer to TEC. Defendants
contend that SIIC, PIHG, and METI (or, secondarily, Pi Capital)
were harmed by the conversions and not the al-Jarallahs or their
assignee Greenfield. Thus, Greenfield lacked standing to pursue
the conversion claims. We disagree.
Every action must be prosecuted in the name of the real
party in interest unless a statute provides otherwise. (Civ. Code,
§ 367.) “‘A real party in interest is one who has “an actual and
substantial interest in the subject matter of the action and who
would be benefited or injured by the judgment in the action.”
[Citation.]’ [Citation.]” (Chao Fu, Inc. v. Chen (2012) 206
Cal.App.4th 48, 57.) “Lack of standing may be raised at any time
in the proceeding, including at trial or in an appeal.” (Blumhorst
v. Jewish Family Services of Los Angeles (2005) 126 Cal.App.4th
993, 1000.)

22
 Defendants contend that instead of an action to enforce the
al-Jarallahs’ rights, a shareholder’s derivative suit should have
been filed on behalf of SIIC, PIHG, METI, or Pi Capital for any
loss those entities suffered. “A shareholder’s derivative suit
seeks to recover for the benefit of the corporation and its whole
body of shareholders when injury is caused to the corporation
that may not otherwise be redressed because of failure of the
corporation to act. Thus, ‘the action is derivative, i.e., in the
corporate right, if the gravamen of the complaint is injury to the
corporation, or to the whole body of its stock and property
without any severance or distribution among individual holders,
or it seeks to recover assets for the corporation or to prevent the
dissipation of its assets.’ [Citations.] ‘. . . The stockholder’s
individual suit, on the other hand, is a suit to enforce a right
against the corporation which the stockholder possesses as an
individual.’ [Citation.]” (Jones v. H. F. Ahmanson & Co. (1969) 1
Cal.3d 93, 106–107 (Jones).) When a shareholder’s action does
not seek to recover on behalf of the corporation for an injury to
the corporation, but instead seeks to recover for an injury that is
personal to the shareholder and not incidental to an injury to the
corporation, the shareholder has standing to enforce her rights.
(Ibid.)
The gravamen of Greenfield’s action against defendants
was that the al-Jarallahs were convinced to fund Pi Capital
which would invest their money as part of a scam to defraud
them and convert their funds. The Greenfield action did not seek
to recover for an injury to SIIC, PIHG, METI, or Pi Capital, but
instead to recover for an injury to the al-Jarallahs. Accordingly,
Greenfield, through its assignment from the al-Jarallahs, had

23
standing to bring the conversion action against defendants.
(Jones, supra, 1 Cal.3d at pp. 106–107.)

F. Attorney Fees

Pi Capital contends the trial court erred in denying it
attorney fees. Greenfield argues we do not have jurisdiction over
this contention because Pi Capital did not appeal from the court’s
order denying its attorney fees request. We hold that we lack
jurisdiction to consider Pi Capital’s contention.
“[T]he timely filing of an appropriate notice of appeal or its
legal equivalent is an absolute prerequisite to the exercise of
appellate jurisdiction.” (Hollister Convalescent Hosp., Inc. v. Rico
(1975) 15 Cal.3d 660, 670 (Hollister).) Absent a timely notice of
appeal, an appellate court “lacks all power to consider the appeal
on its merits and must dismiss” it. (Id. at p. 674; Marshall v.
Webster (2020) 54 Cal.App.5th 275, 284 & fn. 10 (Marshall).)
“[A]lthough failure to file a notice of appeal is a jurisdictional
defect that cannot be remedied, once a notice is filed it is to be
construed liberally in favor of its sufficiency.” (Beltram v.
Appellate Department (1977) 66 Cal.App.3d 711, 714 (Beltram).)
The notices of appeal defendants filed in this case were:
(1) Kandeel and AKCJ’s April 24, 2019, notice of appeal of an
order after judgment, and (2) Kandeel and AKCJ’s April 24, 2019,
notice of cross appeal of the judgment and an order after
judgment. Pi Capital did not file a notice of appeal.
Pi Capital argues we should construe Kandeel and AKCJ’s
notice of appeal from the judgment to include the order denying
Pi Capital’s attorney fees request because the judgment included
a blank to fill in any attorney fees award. In support of its

24
argument, it relies on Grant v. List & Lathrop (1992) 2
Cal.App.4th 993 (Grant). Pi Capital’s reliance is unavailing.
In Grant, supra, 2 Cal.App.4th 993, a judgment was
entered in the defendants’ favor on August 26, 1988. (Id. at
p. 996.) The defendants were awarded their costs. (Ibid.) As
part of the cost award, certain defendants were awarded their
attorney fees. (Ibid. & fn. 6.) The trial court left the judgment
blank as to the amounts of the various awards, “presumably for
later insertion by the clerk.” (Id. at p. 996.)
On September 6, 1988, the plaintiffs filed their notice of
appeal challenging the judgment. (Grant, supra, 2 Cal.App.4th
at p. 996.) Later, the defendants filed their respective cost
memoranda, including their requests for fees. (Ibid.) The
plaintiffs moved to tax costs. (Ibid.) On December 29, 1988, the
trial court issued an order setting the amount of attorney fees
awarded. (Ibid.) On March 13, 1989, notice of entry of that order
was filed. (Ibid.) The plaintiffs did not file a separate appeal
from the order setting the amount of attorney fees. (Ibid.)
On appeal, the court noted that when a “judgment includes
an award of costs and fees, often the amount of the award is left
blank for future determination. [Citation.] After the parties file
their memoranda of costs and any motions to tax, a postjudgment
hearing is held and the trial court makes its determination of the
merits of the competing contentions. When the order setting the
final amount is filed, the clerk enters the amounts on the
judgment nunc pro tunc. [Citation.]” (Grant, supra, 2
Cal.App.4th at pp. 996–997.)
Noting, among other rules, the general rule that a notice of
appeal should be construed in favor of sufficiency, the court held
that when a judgment awards attorney fees to a prevailing party

25
and provides for the later determination of the amount of those
fees, a notice of appeal only from the judgment subsumes any
later order setting the amount of the attorney fees awarded.
(Grant, supra, 2 Cal.App.4th at pp. 997–998.) Pi Capital argues
we, like the court in Grant, “should construe the cross-appeal
from the 2019 judgment—which also left a blank amount for an
award of fees to prevailing party Pi Capital—to subsume the
later fee order denying Pi Capital those fees.”
This case is unlike Grant, supra, 2 Cal.App.4th 993. In
Grant, the parties challenging an attorney fees award filed a
notice of appeal from a judgment that included the award of
attorney fees, but did not separately appeal from the subsequent
order setting the amount of those fees. Here, Pi Capital did not
file a notice of appeal from the judgment or from the subsequent
order denying it attorney fees.
Because Pi Capital did not appeal from either the judgment
or the order denying its attorney fees request, we do not have
jurisdiction over its contention that the trial court erred in
denying its attorney fees request. (Beltram, supra, 66 Cal.App.3d
at p. 714 [“failure to file a notice of appeal is a jurisdictional
defect that cannot be remedied”]; Hollister, supra, 15 Cal.3d at
pp. 670, 674; Marshall, supra, 54 Cal.App.5th at p. 284 & fn. 10.)
Accordingly, Pi Capital’s appeal of the denial of its attorney fees
request is dismissed. (Hollister, supra, 15 Cal.3d at p. 674.)

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 IV. DISPOSITION

Pi Capital’s appeal from the denial of its attorney fees
request is dismissed. The judgment is vacated and remanded.
The trial court is directed to enter a new judgment consistent
with this opinion that includes an award to Greenfield of
prejudgment interest on its $25 million fraud and negligent
misrepresentation verdict. Greenfield is awarded its costs on
appeal.

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

KIM, J.

We concur:

BAKER, Acting P. J.

MOOR, J.

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