Leclair v. Assistantly CA4/3

Opinion

Filed 8/19/26 Leclair v. Assistantly CA4/3

NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FOURTH APPELLATE DISTRICT

DIVISION THREE

TERRY LECLAIR,

Plaintiff and Appellant, G065057 v. (Super. Ct. No. 30-2022- 01255993) ASSISTANTLY, LLC, et al., OPINION Defendants and Respondents.

Appeal from a judgment of the Superior Court of Orange County, Andre De La Cruz, Judge. Affirmed. Matt Cortez Law and Matt Cortez for Plaintiff and Appellant. Houser, Eric D. Houser, Emilie K. Edling and Darlene M. Morris for Defendants and Respondents. Terry Leclair appeals after the trial court granted judgment notwithstanding the verdict as to Leclair’s claim for breach of fiduciary duty against Laith Masarweh and entered judgment for Laith Masarweh.1 Leclair contends substantial evidence supported the jury’s finding of liability for breach of fiduciary duty and award of $375,000 in compensatory damages and $100,000 in punitive damages. We conclude substantial evidence does not support the jury’s verdict as to the existence or amount of damages and therefore affirm. FACTUAL AND PROCEDURAL BACKGROUND2 At trial Leclair testified that when he and Masarweh met, Leclair was the owner of a company called Terra Nova Multimedia, LLC. Thereafter, he and Masarweh agreed to merge Leclair’s company into Masarweh’s company which was called Immursiv, Inc. Leclair and Masarweh were to be 50/50 partners in Immursiv. After merging their companies in the summer of 2020, Leclair and Masarweh agreed to co-found the company Assistantly, LLC. The idea to start Assistantly came about while Leclair and Masarweh were at Immursiv. Assistantly was started in November of 2020 and was created to offer virtual assistant services to Immursiv clients.

1 Leclair filed this action alleging causes of action for: breach of fiduciary duty, failure to provide records, accounting, and dissolution. The cause of action for breach of fiduciary duty was legal, whereas the other three causes of action were equitable. The trial court separately found in favor of Assistantly and Masarweh on the equitable claims. The only issue raised by this appeal is whether the court properly granted judgment notwithstanding the verdict as to the legal cause of action for breach of fiduciary duty.

2 As required by our standard of review, we discuss the evidence in a light favorable to Leclair. (Sobalvarro v. Vibra Health Care (2026) 119 Cal.App.5th 748, 761 (Sobalvarro).)

2 When Assistantly started, Leclair testified he worked with Masarweh to create, develop, and execute a business plan for Assistantly. Leclair stated Masarweh referred to himself and Leclair as co-founders of Assistantly. Immursiv and Assistantly also shared office space which “represent[ed] [the] joint companies and how everything was connected.” Leclair and Masarweh agreed to “hold off” on taking any money from Assistantly until it became profitable. Leclair believed he was a co-founder of Assistantly and had a 50/50 partnership with Masarweh. The long-term goal was to sell Assistantly. Around the time of Assistantly’s founding in November of 2020, Masarweh filed articles of organization creating Assistantly. The articles only listed Masarweh as a member. Masarweh did not discuss this with Leclair. Instead, he continued to work with Leclair on Assistantly until the middle of March in 2022 when Leclair and Masarweh had a meeting. During this meeting Masarweh told Leclair “he was going to take [Assistantly],” and if Leclair “needed any help starting anything again,” he would help him. With respect to damages, Leclair proffered a text message in which Masarweh admitted that in one month, Assistantly could have signed 80 people as clients, but he cut it off at 16. In the same text message exchange, Masarweh stated Assistantly could get one thousand clients “easy,” bringing in $850,000 in monthly revenue. Joyce Golden, Assistantly’s chief marketing officer, also testified she was paid $15,000 monthly as an independent contractor. Golden testified Assistantly had approximately 140 clients and charged them from about $1,000 up to $5,000 per month. Leclair also testified he had an “E2 business visa” which was tied to his company Terra Nova. Leclair stated because of the termination of his relationship with Masarweh and Assistantly, he lost this visa and had to go home to Canada.

3 After hearing this testimony and other evidence, the jury found in favor of Leclair on the breach of fiduciary duty claim. The jury specifically found Leclair was a member of Assistantly, Masarweh breached a fiduciary duty owed to Leclair, and Masarweh’s conduct was a substantial factor in causing harm to Leclair. The jury awarded Leclair $375,000 in damages. The jury also found Leclair proved by clear and convincing evidence Masarweh acted with malice, oppression, or fraud, and awarded $100,000 in punitive damages. Thereafter, Masarweh moved for judgment notwithstanding the verdict as to the breach of fiduciary duty cause of action. The trial court granted the motion and concluded substantial evidence did not support the jury’s verdict on liability or damages. The court determined the evidence did not support the finding that Leclair and Masarweh agreed Leclair was a member of Assistantly or that Masarweh breached a fiduciary duty to Leclair. The court therefore also concluded the evidence did not support the compensatory damage award or the imposition of punitive damages. The court also found there was insufficient evidence of Masarweh’s financial condition to support an award of punitive damages. Having separately ruled on the equitable causes of action, the court found in favor of Masarweh and Assistantly and entered judgment for Masarweh and Assistantly on all claims. DISCUSSION I. STANDARD OF REVIEW The trial court’s power to grant a motion for judgment notwithstanding the verdict is “‘“severely limited.”’” (Sobalvarro, supra, 119 Cal.App.5th at p. 761.) “‘“A motion for judgment notwithstanding the verdict 4 may be granted only if it appears from the evidence, viewed in the light most favorable to the party securing the verdict, that there is no substantial evidence in support.”’” (Burch v. CertainTeed Corp. (2019) 34 Cal.App.5th 341, 348.) The focus is on “‘the quality, not the quantity, of the evidence.’” (Sobalvarro, supra, 119 Cal.App.5th at p. 762.) A judgment notwithstanding the verdict is subject to a de novo review and we do not defer to the trial court’s assessment of the evidence. (Ibid.) Nevertheless, we “presume that the ‘“record contains evidence to sustain every finding of fact”’” and it “is the appellant’s burden to demonstrate that it does not.” (Burch, supra, 34 Cal.App.5th at p. 349.) II. THE BREACH OF FIDUCIARY DUTY VERDICT IS NOT SUPPORTED BY SUBSTANTIAL EVIDENCE OF DAMAGES Leclair argues substantial evidence supports the breach of fiduciary duty verdict rendered by the jury as well as the award of compensatory and punitive damages. “‘The elements of a cause of action for breach of fiduciary duty are the existence of a fiduciary relationship, breach of fiduciary duty, and damages.’” (Knutson v. Foster (2018) 25 Cal.App.5th 1075, 1094.) Damages are an essential element of a breach of fiduciary duty claim. Even if a breach of the fiduciary duty in question is undisputed, without proof of damage, the claim fails. (See Slovensky v. Friedman (2006) 142 Cal.App.4th 1518, 1535 [attorney failed to timely contest there was a breach of fiduciary duty, but nonetheless, the plaintiff failed to “establish a triable issue of fact as to damages”].) Such is the case here. Since substantial 5 evidence does not support any of Leclair’s requested damages, the trial court correctly determined the breach of fiduciary claim cannot stand.3 A. The Verdict Is Not Supported by Substantial Evidence of Economic Damages With respect to Leclair’s claimed economic damages, it is not clear what theory of damages Leclair pursued at trial.4 Often in “business cases, damages are based on net profits,” which is itself distinct from “gross revenue.” (Meister v. Mensinger (2014) 230 Cal.App.4th 381, 397.) “‘“‘Net profits are the gains made from sales “after deducting the value of the labor, materials, rents, and all expenses, together with the interest of the capital employed.”’”’” (Parlour Enterprises, Inc. v. Kirin Group, Inc. (2007) 152 Cal.App.4th 281, 287.) To substantiate a claim for lost business profits, a “plaintiff must show loss of net pecuniary gain, not just loss of gross revenue.” (Ibid.) Leclair contends Assistantly had 140 clients with an average of $5,000 per month or $700,000 in monthly revenue. However, he does not cite the record when setting forth the evidence supporting his damages. From our 3 We note the parties also discuss whether the trial court was bound by the jury’s verdict on the legal claim in ruling on the equitable claims. (See Hoopes v. Dolan (2008) 168 Cal.App.4th 146, 158 [“Where legal claims are first tried by a jury and equitable claims later tried by a judge, the trial court must follow the jury’s factual determinations on common issues of fact”].) Ultimately, the question is not dispositive of any issue before us. The only issue before us is whether the court properly granted the JNOV as to the legal cause of action, which was the breach of fiduciary duty claim. However, even if the question were before us, because we affirm the JNOV on the legal cause of action, the issue would be moot.

4 For the purposes of our analysis of damages, we assume Leclair was able to establish he and Masarweh agreed Leclair was a member and had a 50 percent interest in Assistantly.

6 review of such, Golden testified Assistantly had approximately 140 clients and billed them anywhere from $1,000 to $5,000 per month. In other words, $5,000 was the high end, not the average. The total of $700,000 appears to be Leclair’s calculation based on the unsupported assumption 140 clients were billed at $5,000 per month. But even if Leclair sought to establish the value of Assistantly and the 50 percent share he contended he was wrongfully deprived of, this too required Leclair to offer some valuation method and evidence of the value pursuant to the methodology. (See Ronald v. 4-C’S Electronic Packaging, Inc. (1985) 168 Cal.App.3d 290, 299 & fn. 4 [discussing five valuation methods for calculating the value of an interest in a closely- held corporation].) Under any valuation theory, however, it was necessary to consider some comparison or balancing of income, assets, or other earnings against costs, liabilities, or losses. (Ibid.) In other words, money coming into an entity alone is insufficient to establish the value of the entity. (See Kids’ Universe v. In2Labs (2002) 95 Cal.App.4th 870, 888 [summary judgment was affirmed as to a lost profit damage claim because the plaintiff “failed to assert any method for determining lost profits” and “presented no specific economic or financial data, market survey, or analysis based on the business records or operating histories of similar enterprises”].) While Leclair may have been entitled to a portion of any distributions or payments that were made or should have been made (Corp. Code, § 17704.04, subd. (b)), for a distribution to be made, debts and other liabilities must be considered. (See id., § 17704.05, subd. (a)(1)–(2) [among other reasons, a “limited liability company shall not make a distribution” if the “limited liability company would not be able to pay its debts as they become due” or the “limited liability company’s total assets would be less than the sum of its total liabilities”].) Leclair does not cite any evidence 7 distributions were actually made, and there does not appear to have been evidence offered as to whether Masarweh received a salary or share of profits from Assistantly. Leclair testified he did not know whether Masarweh received any money from Assistantly. During the time he and Masarweh worked together, the agreement was they would not take a salary. “The focus of an award of damages is the quantification of detriment suffered by a party.” (Meister v. Mensinger, supra, 230 Cal.App.4th at p. 396.) While “‘the amount of damages need not be calculated with absolute certainty’” (ibid.) the law requires “‘that some reasonable basis of computation of damages be used, and the damages may be computed even if the result reached is an approximation’” (id. at p. 397). Moreover, “‘damages which are speculative, remote, imaginary, contingent, or merely possible cannot serve as a legal basis for recovery.’” (Piscitelli v. Friedenberg (2001) 87 Cal.App.4th 953, 989.) The evidence offered by Leclair is, at best, a very rough assessment of Assistantly’s monthly revenue from clients and the salary of an independent contractor. B. The Verdict Is Not Supported by Substantial Evidence of Noneconomic Damages Noneconomic damages, such as emotional distress or pain and suffering, may be recoverable on a breach of fiduciary duty claim if “directly caused” by the breach. (Kaushansky v. Stonecroft Attorneys, APC (2025) 109 Cal.App.5th 788, 805.) Leclair cites the evidence regarding the loss of his visa as a basis for noneconomic damages.5 However, nothing in the record 5 In his responsive briefing, Masarweh argues a motion in limine ruling precluded Leclair from claiming emotional distress damages. It is not clear Leclair sought emotional distress damages, but regardless, the court permitted Leclair to testify about his visa and permitted Leclair’s counsel to discuss in closing arguments his claim for noneconomic damages based on the 8 suggests Leclair ever had a visa through his involvement in Assistantly. Leclair founded Terra Nova prior to meeting Masarweh and was the sole owner. Prior to Assistantly, Leclair testified he and Masarweh created Immursiv and agreed to merge Terra Nova into Immursiv. Leclair testified he was paid by both Immursiv and Assistantly through Terra Nova to maintain the visa he had obtained through Terra Nova. However, Leclair also testified, after the merging of Terra Nova into Immursiv, Terra Nova was just the “shell of a business” and he could not continue the visa through Terra Nova. Leclair does not cite to any evidence in the record regarding the status of his visa after the merger of Terra Nova into Immursiv, the sale of Immursiv, or, most significantly, the formation of Assistantly. Speculative or contingent damages are not a legal basis for recovery. (Piscitelli v. Friedenberg, supra, 87 Cal.App.4th at p. 989.) Because there was no evidence Leclair had a visa through Assistantly, we cannot conclude substantial evidence established Masarweh’s alleged breach of fiduciary duty directly caused the loss of the visa. Additionally, we have no way of knowing, and neither did the jury, whether Leclair’s claimed interest in Assistantly was or would have been sufficient to support renewal of his visa. III. LECLAIR IS NOT ENTITLED TO REMAND FOR A NEW TRIAL ON DAMAGES Because the jury’s finding Leclair was damaged by Masarweh’s conduct is not supported by substantial evidence, Leclair’s claim for breach of fiduciary duty must fail. (Slovensky v. Friedman, supra, 142 Cal.App.4th at visa issue. The special verdict form, however, did not ask the jury to distinguish economic from noneconomic damages and we do not know whether this was a factor in the jury’s award.

9 p. 1535.) The same holds true for the punitive damage award. (Farmers & Merchants Trust Co. v. Vanetik (2019) 33 Cal.App.5th 638, 656.)6 In his reply brief, Leclair asks us to remand for a new trial on damages if we conclude the evidence supporting damages was insufficient. We cannot provide this remedy. “When the plaintiff has had full and fair opportunity to present the case, and the evidence is insufficient as a matter of law to support plaintiff's cause of action, . . . no new trial is ordinarily allowed, save for newly discovered evidence.” (McCoy v. Hearst Corp. (1991) 227 Cal.App.3d 1657, 1661.) Indeed, it would be “anomalous” if after determining “the trial court correctly enter[ed] a nonsuit or [judgment notwithstanding the verdict] on the ground that the plaintiff has, as a matter of law, failed to prove a cause of action,” the plaintiff automatically receives a second chance. (Ibid.) Instead, where a party had a “full and fair opportunity to present its evidence” of damages but the evidence was insufficient, judgment is appropriate. (Copenbarger v. Morris Cerullo World Evangelism, Inc. (2018) 29 Cal.App.5th 1, 15.) Leclair does not argue new evidence justifies another trial. Instead, Leclair cites several inapt authorities supporting this request, none of which require a different outcome. For example, Leclair cites Atkins v. City 6 The punitive damage award would fail for the independent reason Leclair did not offer evidence of Masarweh’s financial condition. “‘Evidence of a defendant’s financial condition is a legal precondition to the award of punitive damages.’” (Farmers & Merchants Trust Co. v. Vanetik, supra, 33 Cal.App.5th at p. 647.) “A plaintiff seeking punitive damages must provide a balanced overview of the defendant’s financial condition; a selective presentation of financial condition evidence will not survive scrutiny.” (Id. at p. 648.) Here, there was no additional evidence of Masarweh’s financial condition beyond the evidence discussed regarding damages. Evidence of revenue or assets without consideration of costs and liabilities is not sufficient.

10 of Los Angeles (2017) 8 Cal.App.5th 696 wherein the court remanded for a new trial on damages because it concluded there was “evidence in the record from which the jury could have calculated a reasonable amount of future economic damages,” but it was not the court’s “role to say what that amount should be.” (Id. at p. 742; see also Teitel v. First Los Angeles Bank (1991) 231 Cal.App.3d 1593, 1606–1607 [remanding for trial court to reconsider motion for new trial on punitive damages or remittitur where evidence was sufficient to justify imposition of punitive damages, amount awarded was arguably excessive, and motion for judgment notwithstanding verdict was inappropriate means to reduce excessive award].) Here, as discussed, there was a failure in the proof of damages, not in the specific amount. In Bullock v. Philip Morris USA, Inc. (2008) 159 Cal.App.4th 655, also cited by Leclair, there was instructional error on the issue of punitive damages, and the reviewing court could not “determine how the instructional error . . . affected the amount of the punitive damages award.” (Id. at p. 696.) There is no claim of instructional error here. Lastly, in Estate of Kampen (2011) 201 Cal.App.4th 971, 988–996, while the appellate court concluded nonstatutory damages awarded on a breach of fiduciary duty claim were speculative and not supported by the evidence, it affirmed the judgment based on other available statutory damages. Here, Leclair has no alternate basis to recover damages. Leclair had a full and fair opportunity to present evidence of the harm he suffered and his damages. Accordingly, we decline his request to remand for a new trial on damages.

11 DISPOSITION For the reasons stated herein, the judgment in favor of Masarweh on Leclair’s breach of fiduciary duty cause of action is affirmed. Masarweh shall recover his costs on appeal.

MOTOIKE, P. J.

WE CONCUR:

SERVINO, J.

SCHWARM, J.* *Judge of the Orange County Superior Court, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.