John v. Fine CA2/6

Filed 5/14/24 John v. Fine CA2/6

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION SIX

RUSSELL JOHN, 2d Civ. No. B327477 (Super. Ct. No. 56-2019- Plaintiff and Respondent, 00525051-CU-FR-VTA) (Ventura County) v.

JUSTIN FINE,

Defendant and Appellant.

Appellant Justin Fine formed an LLC for the purpose of investing in biotech stocks. Respondent Russell John offered to invest in the LLC and eventually paid $500,000 for an 87 percent membership interest. The business relationship soured when respondent did not receive the long-term returns he expected. Two years of litigation culminated in a bench trial. The trial court found, among other things, that appellant breached his fiduciary duty to respondent by loaning large sums of the LLC’s capital to other entities owned by appellant. It awarded

respondent monetary damages, prejudgment interest, punitive damages, and attorney’s fees totaling $2,387,311.42. Appellant appeals the judgment and subsequent denial of his motion for new trial. We reject the first of his six arguments as forfeited. Appellant fails to provide a record adequate to review his remaining arguments. We will affirm. FACTUAL AND PROCEDURAL BACKGROUND Appellant is the sole shareholder of ENIF, Inc., a corporate shell used for managing his various business entities. Biorap, LLC is among these entities. Respondent is a successful insurance executive who invested in Biorap. He met appellant socially about 15 years ago. The two would frequently meet for lunch. Appellant explained that he intended to use Biorap to invest in biotech stocks using a proprietary algorithm. Respondent expressed interest in the company and eventually acquired an 87 percent membership from appellant for $500,000. He received Biorap’s operating agreement and a statement of risk emphasizing the speculative nature of his investment. Biorap’s long-term returns did not meet respondent’s expectations. He demanded a refund in 2018. Appellant responded that the operating agreement entitled him to receive only the value of his capital account—an amount far less than his investment in the entity. Respondent sued appellant and ENIF in 2019. His complaint included causes of action for breach of fiduciary duty, negligence, fraud, breach of contract, violation of the Corporations Code, and derivative claims on behalf of himself and other members of Biorap. The trial court held a six-day bench trial. Appellant and respondent testified. Wayne Lorch, CPA, testified as