Baral v. Schnitt (Jan. 28, 2022, B298050) 2022 WL 263108

GMSR’s client and his co-investors agreed to sell their accounting software business.  After the sale closed, an investor who had received $3.6 million for his share sued the client for fraud and breach of fiduciary duty, claiming that he had forced the sale against the investor’s will.

At trial, the investor’s damages expert relied on speculative, unsupported growth projections and testified that if the business had not been sold, it would have grown dramatically.  A jury awarded $2.5 million in compensatory damages and $1 million in punitive damages.

The client moved for judgment notwithstanding the verdict, arguing that the expert’s testimony was impermissibly speculative, but the trial court denied the motion.  The Court of Appeal reversed, holding that “no admissible evidence suggested that [the investor] would or could have sold” his stake “for more than the $3.6 million he received.”  The Court also affirmed orders awarding attorney’s fees after the client’s landmark anti-SLAPP victory in the California Supreme Court.  (Baral v. Schnitt (2016) 1 Cal.5th 376.)

Court of Appeal Opinion – View Document