Filed 6/29/22 Hornblower Yachts v. Brown & Brown Ins. Services CA1/5

NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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

FIRST APPELLATE DISTRICT

DIVISION FIVE

Appellants Brown & Brown Insurance Services of California, Inc. d/b/a Sitzmann Morris & Lavis Insurance Agency, William H. Lavis, and John Rogers appeal from a $2,335,008.21 judgment entered against them after a jury verdict. Appellants contend: (1) respondents did not present evidence of a negligent misrepresentation; (2) the evidence was insufficient to hold the individual appellants liable for professional negligence; (3) there was no evidence showing that appellants’ conduct was a substantial factor in causing respondents’ harm; and (4) the court erred in several rulings, including sustaining respondents’ attorney-client privilege objections, admitting redacted attorney invoices into evidence, and declining appellants’ proposed jury instructions and special verdict form. We will affirm the judgment.

I. FACTS AND PROCEDURAL HISTORY

Respondent Hornblower Yachts, LLC (Hornblower) offers tours and cruises in California. Respondent Alcatraz Cruises, LLC (Alcatraz) is a concessioner to the National Park Service, offering transportation to Alcatraz Island. Hornblower is described as Alcatraz’s parent company.

Sitzmann Morris & Lavis (SML) became the insurance broker for Hornblower in 1997 and for Alcatraz in 2013. Appellants Bill Lavis and John Rogers worked as brokers for SML. After SML was sold to Brown & Brown Insurance Services (Brown & Brown) in November 2011, Lavis and Rogers became employees of Brown & Brown, but the brokerage continued to operate using SML’s name for several years.

At issue here is the extent to which appellants should be liable for respondents’ failure to comply in specified years with two ordinances of the City and County of San Francisco (City): the Health Care Accountability Ordinance (HCAO) and the Health Care Security Ordinance (HCSO). In essence, the HCAO requires City contractors and tenants to offer a minimum level of health plan benefits to covered employees working at least 20 hours per week or to make specified payments to the City. (S.F. Admin. Code,

ch. 12Q.) The HCSO requires certain employers in the City to spend a specified amount on their employees’ health care expenditures through either insurance payments or payments to the City. (S.F. Admin. Code, ch. 14.)

A. Pleadings

In September 2017, respondents filed a complaint and first amended complaint against SML, Lavis, and Rogers for professional negligence, negligent misrepresentation, and intentional misrepresentation, seeking to recover $2.75 million that respondents paid to settle with the City for violating the HCAO and the HCSO, along with their associated defense costs.

According to the first amended complaint, respondents had asked appellants for health care benefit plans that complied with the ordinances, appellants represented to respondents that a Kaiser HMO was compliant with the HCAO and an ASI Health Reimbursement Account was compliant with the HCSO, and respondents purchased and renewed those plans and accounts and provided them to their employees. Nonetheless, respondents asserted, the City determined that the plans and accounts were not compliant, subjecting respondents to fees and penalties.

Appellants answered the first amended complaint in November 2017. Respondents thereafter dismissed their claim for intentional misrepresentation. In the fall of 2019, each side moved unsuccessfully for summary judgment or summary adjudication. The matter proceeded to a

15-day jury trial.

B. Jury Trial

At issue specifically was appellants’ liability for respondents’ costs in resolving the City’s claims arising out of audits that took place in 2015. For Hornblower, those audits corresponded to plan years beginning with

2011–2012; for Alcatraz, they corresponded to plan years beginning with 2013–2014. We organize the trial evidence by summarizing respondents’ violations of the ordinances before those years, the parties’ communications as respondents sought to become compliant, respondents’ violations uncovered by the 2015 audits, and respondents’ settlement of their potential liability under the 2015 audits.

1. Pre-Policy HCAO Violations and Appellants’ Representations

In March 2004, Hornblower and the City signed a lease that stated Hornblower was subject to the HCAO. Hornblower was therefore required to offer a minimum health plan to covered employees or to make payments to the City.

Hornblower’s Corporate Director of Human Resources, Catherine Finn, and Hornblower’s General Counsel, Richard Jacobs, were purportedly unaware of the HCAO or its requirements until six years later in October 2010. For years, Hornblower failed to comply with the HCAO, improperly deducting monthly payroll contributions from covered employees and failing to offer a compliant health plan or make payments to the City.

a. 2010 Audit of Hornblower and Request of Appellants

In October 2010, the San Francisco Office of Labor Standards Enforcement (OLSE) sent Hornblower a request to conduct an audit to determine if Hornblower was complying with the HCAO.

Hornblower’s Finn informed general counsel Jacobs on October 21, 2021, that she “was not aware” of the HCAO requirement in Hornblower’s lease, but “looking at our health care program we are not in compliance.” She concluded that “we should not have been having SF employees pay a premium contribution for employee only coverage” but “the rest of the plan seems to be fine but I am having Bill Lavis of SML review our plan in relation to the HCAO requirements.” (Italics added.) Also, Finn noted, the plan should be offered to employees working an average of 20 hours a week rather than 30 hours or more.

On October 22, 2010, Finn emailed the following to Lavis and Rogers at SML: “We have received an audit request from the Office of Labor Standards to see if we are in compliance with the HCAO. I don’t think we are. Can you please tell me what we need to fix to be in compliance in terms of the actual plan?” (Italics added.) As Finn testified at trial, the health insurance plan then in effect was going to expire at the end of March, so her inquiry was for “new plans moving forward” in 2011.

On October 25, 2010, SML’s Sandy Urgel emailed Finn and Jacobs (with cc’s to Rogers and Lavis) that “[t]he Kaiser plan meets the HCAO requirements, however HCAO requires the Employer to pay the full employee premium.” Later that day, Finn replied: “So if we remove the employee premium for employee only coverage and either lower the eligibility for benefits criteria or pay into the Dept of Public Health, then we are in compliance?” (Italics added.)

SML’s Urgel responded to Finn on October 27, 2010: “You have three options that bring you in Compliance with the HCAO[:] Option 1 – pay 100 % of the employee’s Kaiser premium [¶] Option 2 – pay an additional $3.00 per hour worked to the employee to a maximum of $120 a week [¶] Option 3 – pay $3.00 per hour worked to the City and County of San Francisco up to 40 hours per week[.]” (Italics added.) Because appellants told Finn that the Kaiser plan satisfied the HCAO, Finn expected “[t]hat next year, when we rolled out the [Kaiser] plan . . . [,] we would be in compliance and this issue would go away.”

The HCAO audit went forward on November 9, 2010. On November 30, 2010, the OLSE issued a Notice of Violation of Hornblower’s lease based on Hornblower’s failure to comply with the HCAO for periods up to March 2010. The notice identified two HCAO violations: improper monthly payroll deductions; and failing to offer a compliant health plan to qualifying employees working 15 hours on average per week, or alternatively making payments to the City.

b. January 2012

Each year, the parties met to discuss respondents’ benefit needs for the upcoming year. Appellants would then try to obtain respondents’ desired benefits in the market and present the options for respondents’ review, and respondents would select which plans to purchase.

Leesa Singer, Hornblower’s Human Resources Manager in 2012, asked SML for an HCAO-compliant plan at the beginning of that year. After an open enrollment meeting with respondents, SML’s Rogers emailed Singer on January 16, 2012, that the “[employee] contribution exhibit has been modified to show a difference in Office Boat (due to HCAO) and Fleet ‘single’ employees” and SML would “run this by [SML’s Compliance Officer] tomorrow for compliance implications if any.” (Italics added.) Singer testified that the email was consistent with appellants’ responses to Hornblower’s requests for compliant plans.

c. Hornblower’s Reliance on Appellants

Hornblower personnel testified that Hornblower relied on appellants to offer plans compliant with applicable law, including the City ordinances. Finn testified that she relied “100 percent” on appellants to ensure that respondents “only offered plans that are in compliance with all the regulations,” including the ordinances, because “[t]hat’s what I hired them to do.” Similarly, she testified, appellants “helped me by making sure that I only offered plans that are in compliance with all the regulations, do the research,” and the like. When appellants gave presentations related to the ordinances, they touted themselves as experts.

Jennifer Gray, the Human Resources Director after Finn, reiterated that Hornblower relied on appellants to provide compliant plans. Hornblower’s Controller, Matt Warner, testified that appellants repeatedly represented that Hornblower and Alcatraz “would get benefits that were in compliance with local, regional, Federal laws.” Warner noted that the plans changed over the course of several meetings, and he believed SML was working with the City to come up with an appropriate plan.

Singer, the subsequent human resources manager, testified that “the whole time that [she] worked with SML,” she asked for compliant plans and appellants said they would provide them. Specifically, “[w]e asked [SML] for plans that would be compliant with the health care ordinance.” Hornblower selected the plans recommended by appellants because “they worked well for our employees, well for our company” and “SML brought us these plans saying that these were the compliant plans that would work.” (Italics added.)

2. Pre-Existing HCSO Violation and Appellants’ Representations

As mentioned, the HCSO requires employers to spend certain amounts on employee health care expenditures. While respondents could purchase insurance plans to meet HCAO requirements, there was no insurance plan that would allow them to meet HCSO requirements. Instead, respondents had to make payments to their qualifying employees and account to the City for those payments.

Beginning in 2010, Administrative Solutions, Inc. (ASI), a third-party benefits administrator, assisted with respondents’ efforts to meet HCSO requirements through Health Reimbursement Arrangements (HRAs). An HRA is an employer-funded account used to reimburse employees for out-of-pocket expenses. Hornblower and Alcatraz would send funds for ASI to deposit, and within 15 days ASI was to send a contribution notice to employees, informing them of the amount contributed and their expiration date.

a. 2013 HCSO Audit of Alcatraz (2010–2013)

The OLSE audited Alcatraz’s HCSO compliance for the period April 1, 2010 through March 31, 2013. The OLSE’s Amended Determination of Violation in December 2013 concluded that Alcatraz violated the HCSO during that period by “failing to make all of the required Health Care Expenditures” as to 107 employees. The OLSE required Alcatraz to pay $183,459.10 in overdue health care expenditures to the employees and $14,021.76 to the City in penalties. It also fined Alcatraz $500 for failing to timely submit the 2012 Annual Reporting Form.

Alcatraz and Hornblower reached out to appellants for assistance in becoming compliant under the HCSO. Singer emailed Lavis on December 16, 2013, asking for updates regarding HCSO-compliant plans. In an email the following day, with the subject line “SF HCSO Compliance in 2014,” Lavis responded that the ASI HRA was an “option” for HCSO compliance. (Italics added.)

On December 18, 2013, SML’s Rogers emailed Hornblower’s Singer, Warner, and others, a “Hornblower/Alcatraz Meeting Recap – SF HCSO Solution for 2014,” stating that “guidance was provided by the City of SF, that will enable HB /Alcatraz to convert their current SF HCSO HRA’s [sic] from medical/dental/vision to be for dental/vision only effective January 1, 2014 and remain in compliance with the requirements for SF HCSO.” (Italics added.) From this, Singer testified, she understood that SML was providing an HRA that would satisfy the HCSO requirements. Warner testified that SML presented ASI as a solution and did not recall another option.

On January 14, 2014, SML’s Rogers emailed Barry Maas, the President of ASI, that “we are moving forward with ASI HRA for Hornblower and Alcatraz as we discussed in our meeting with the client last week. We want to move towards finalizing the HRA Plan setup by end of this week if possible. [¶] What are the next steps for the SML team to coordinate with ASI and HB/Alcatraz to make this happen?” (Italics added.)

In a July 7, 2014 email, Hornblower’s payroll manager at the time, Andrea DaSilva, informed her team that, “n the future, Bill [Lavis] said ASI would calculate and deposit the money for us to the City and there would be no additional work on my end.” DaSilva testified that compliance questions regarding the HCSO and HRA were also directed to appellants.

Over the ensuing months, appellants continued to follow up with respondents regarding ASI and the HCSO. In December 2014, Lavis emailed Gray that he wanted to “discuss the year end accounting for the SFHCO excess spending requirement” and he had ordered the relevant reports from ASI. In a January 2015 email, SML’s Rogers told the Hornblower team: “SML to provide further information on SF HCSO Options (Boone Group, ASI, etc.).” In March 2015, Lavis emailed Warner at Hornblower “to find some 30+ min to cover the various decision points connected with finishing up the 2014 SFHCO requirements and the pending new 2015 requirements.” An April 2015 email from Lavis discussed the HCSO and stated, “We have been [i]very diligent about how we advise our clients about these rules.” (Italics added.)

b. Use of ASI as Administrator for HCSO

According to appellants, ASI worked as the agent of Hornblower and Alcatraz. Appellants elicited the testimony of Maas, ASI’s president, that SML, Rogers and Lavis never worked with ASI, SML never “hired ASI to work on its behalf,” SML never “paid ASI,” SML never entered into any “contract with ASI,” and SML never gave “ASI authority to act on [their] behalf.”

According to respondents, however, it was SML that encouraged respondents to use ASI’s services, and it was SML that worked with ASI to ensure HCSO compliance. DaSilva testified that SML had chosen ASI for Hornblower, and “ASI was the company that they said was the best for us to use so we relied on SML . . . to state that . . . ASI was the one to use.” According to DaSilva, the message from SML was, “Use ASI and you’ll be fine.” According to Gray, Hornblower selected ASI because “one of the things that Bill [Lavis of SML] sold us on was he said, ‘The beauty of ASI is you don’t need to be involved. Everything that ASI does is direct with the employee,’ that SML would support us on the back end and Hornblower didn’t need to worry about anything.” As shown by the emails from Rogers and Lavis (described ante), SML arranged meetings and participated in setting up the plan. Maas (ASI’s President) confirmed that SML worked with ASI to ensure the HRAs for respondents were “set up right and timely and completely,” and appellants “were acting as the broker for bringing [ASI] in to do the HCSO HRA.”

Furthermore, Hornblower looked to appellants, not ASI, for compliance advice. DaSilva testified that she learned about the HCSO from Lavis, and if she had any questions, she would go to him, as she often did. She added that respondents’ questions regarding HCSO compliance and the HRA were directed to appellants and not to ASI directly. As an example, a July 2014 email from Gray to DeSilva and Singer, pertaining to HCSO compliance through ASI, suggested they “loop in [SML’s] Lesa K / Bill and see if we’re approaching this the right way.” And when a Hornblower employee complained about the unavailability of an HRA account in 2015, Gray directed the inquiry to Lesa Krashefski at SML, who emailed the employee that she was “at the ready to answer any questions you may have and or help process any claims you may have incurred,” representing that “I am the broker for Hornblower and Alcatraz and have implemented ‘all’ the benefits for both companies.”

3. The Subject 2015 Audits

In 2015, the OLSE conducted the further audits of respondents’ compliance with the HCAO and HCSO that underlie this appeal. For Hornblower, the audits corresponded to plan years 2011–2012 (HCAO), 2012–2013, 2013–2014, 2014–2015, and 2015–2016; for Alcatraz, the audits corresponded to plan years 2013–2014, 2014–2015 and 2015–2016.

a. 2015 HCSO Audit

On September 21, 2015, Hornblower received a Notice of Potential Violation from the OLSE regarding its failure to meet HCSO requirements (2015 HCSO Audit). The 2015 HCSO Audit of Hornblower covered July 1, 2012 to June 30, 2015, and the 2015 HCSO Audit of Alcatraz covered July 1, 2013 to June 30, 2015.

The OLSE determined that neither Hornblower nor Alcatraz were in compliance. The OLSE found “Hornblower and/or its third party administrator [ASI] did not meet the numerous requirements for valid revocable health care expenditures, such as proper notice to employees within 15 days of the contribution or 3 days within separation for terminated employees, and making those contributions available to employees for twenty-four months.” Likewise, the OLSE found Alcatraz and/or ASI failed to meet these requirements. The OLSE also found that neither entity submitted enough information to support their claim that certain employees were exempt from the HCSO.

As a result of these findings, the OLSE determined that Hornblower owed $808,752.97 in overdue health care expenditures to 273 employees and a penalty of $122,291.92 to the City, and that Alcatraz owed $216,265.96 in overdue health care expenditures to 136 employees and a penalty of $31,507.08 to the City.

b. 2015 HCAO Audit

Meanwhile in early 2015, Hornblower continued to seek assurances from SML that it complied with the HCAO. On January 12, 2015, appellants provided advice regarding compliant plan options. Gray had asked Lavis for “some attention paid to which plan we will use for the 100% plan for SF,” being “concerned that our options don’t meet the minimum requirements.” She asked Lavis to “confirm which plans meet it and what you are recommending for the 100% paid plan for employees.” Gray testified that she “was making sure that [Lavis] would review the plans to make sure they were in conformance.” A February 2015 email chain between Hornblowers’ Gray and SML’s Rogers shows that respondents continued to be concerned about compliance and Rogers continued to represent that appellants were providing compliant plans.

On September 23, 2015, Hornblower received a notice from the OLSE of an HCAO audit. The next day, Gray wrote to Lavis: “As of today, we’ve been notified of audits of Hornblower for compliance with both the Health Care Security Ordinance (which I think we are fine on), and also the Health Care Accountability Ordinance (which I’m unsure about). Can you take a look at the attached [“San Francisco Labor Laws for City Contractors 2015”] and provide your pov on the ASI benefits and whether or not they fulfill our requirements for both ordinances?”

Lavis replied, “You are ok on the HCSO” but he would “tak[e] a closer look at the HCAO.” On November 24, 2015, in an email from SML’s Krashefski, appellants represented to respondents that “Hornblower and Alcatraz Cruises does have a HCAO compliant plan” in the “Kaiser DHMO” to which employees do not contribute a premium. (Italics added.)

By a Notice of Violation dated November 28, 2016, OLSE informed Hornblower of its determination that Hornblower violated the HCAO from January 1, 2011 to September 30, 2015, by failing to offer covered employees a premium-free health plan or pay the required HCAO fee to the City. The Notice also found that Hornblower offered no health plan to covered employees who worked 20–29 hours per week and the health plan offered to employees working 30 or more hours a week did not meet HCAO minimum standards. Respondents’ potential liability exceeded $14 million, including unpaid fees, liquidated damages, and unpaid employee premiums.

4. Appellants’ Failure to Review

Respondents’ expert witness, Neal Bordenave, testified that appellants should have been in contact with the OLSE to ensure the plans satisfied the ordinance, noting that because appellants “venture[d] into . . . compliance,” they had a heightened duty to “do it right.” OLSE Compliance Officer Beverly Popek observed that it was “very common” for brokers to work with the City to confirm plans were compliant. Hornblower’s Controller, Matt Warner, testified that his “understanding was that they [appellants] were working with the City of San Francisco actually coming up with these plans.” (Italics added.)

SML’s Rogers testified, however, that he did not review the HCAO or the HCSO or confirm with the OLSE that the plans sold to Hornblower and Alcatraz complied with the HCAO. Lavis also acknowledged that he did nothing to determine whether the HRA complied with the HCSO or to ensure that Hornblower and Alcatraz would not be audited by the OLSE. Neither broker reviewed the HRA plan documents.

5. 2018 Settlement Between Respondents and OLSE/City

Respondents and the City met several times to negotiate a settlement of respondents’ liability. At a meeting between counsel for the City and respondents’ attorney in February 2018—a few months after respondents sued appellants—Hornblower and Alcatraz agreed to settle the matter for $2.75 million. The matter was turned over to OLSE compliance officer Popek to draft the settlement agreements.

Popek had full discretion to apportion the $2.75 million as she saw fit, consistent with the OLSE’s “priority” and “mission” to “make the workers whole to the full extent of the law.” As to both Hornblower and Alcatraz, Popek first ensured that their affected employees would be reimbursed for amounts they spent. Then she divided the remainder of the settlement funds among the various penalties the ordinances empowered the City to charge, including the maximum amount of HCSO penalties allowed and a “heav[y]” allocation to HCAO fees (going to the Department of Public Health or San Francisco General Hospital) as compensation for treating respondents’ uninsured employees, noting the “whole investigation started” because “there were a lot of reports from employees who did not receive any medical insurance who were sick.”

In August 2018, respondents each entered into a settlement agreement with the City. As designed by Popek, the settlement agreements divvied up the $2.75 million as follows. Hornblower agreed to make HCSO payments to employees ($508,710.61) and HCAO medical premiums to employees ($202,218.47), pay the City for HCAO out-of-pocket expense reimbursement ($1,593.90), pay HCAO fees to San Francisco General Hospital ($1,275,547.27), pay HCAO liquidated damages ($366,327.26), and pay HCSO penalties ($86,748.63), for a total of $2,441,146.14. Alcatraz agreed to make HCSO payments to employees ($196,407.85) and HCAO medical premiums to employees ($7,654.86), pay the City for HCAO out-of-pocket expense reimbursements ($9,581.96), pay HCAO fees to San Francisco General Hospital ($48,285.08), pay HCAO liquidated damages ($18,559.97), and pay HCSO penalties ($28,364.14), for a total of $308,853.86.

Respondents also presented evidence that they incurred and paid over $500,000 in attorney’s fees in connection with the audits, including negotiating their liability from over $14 million down to $2.75 million.

C. Jury Verdict and Judgment

The jury found that appellants were negligent and that respondents were comparatively negligent, apportioning fault among Brown & Brown (40%), Lavis (25%), Rogers (10%), and respondents (25%). The apportionment did not factor into the final judgment, however, because the jury found all appellants liable for negligent misrepresentation. Pursuant to a special verdict form, the jury awarded damages for Hornblower in the amount of $2,230,217.06 (including $500,000 for attorney’s fees) and for Alcatraz in the amount of $104,791.15, for a total of $2,335,008.21.

D. Post-Judgment Motions

Appellants moved for judgment notwithstanding the verdict or, in the alternative, a new trial, contending there was insufficient evidence to support the verdict, the trial court erred in its evidentiary rulings, and the jury instructions and verdict forms were legally deficient and prejudicial. The court denied the motion.

Appellants also sought to tax respondents’ costs, arguing in part that respondents’ offer under Code of Civil Procedure section 998 was invalid because it was not apportioned and required acceptance by all parties. The trial court rejected this argument. This appeal followed.

II. DISCUSSION

We address each of appellants’ contentions in turn.

A. Negligent Misrepresentation

A negligent misrepresentation is “[t]he assertion, as a fact, of that which is not true, by one who has no reasonable ground for believing it to be true.” (Civ. Code, § 1710, subd. (2).) In accord with CACI No. 1903, the jury was instructed that respondents had to prove: (1) “[appellants] represented to [respondents] that a fact was true;” (2) the representation was not true; (3) appellants had no reasonable grounds for believing it to be true when made; (4) appellants intended respondents to rely on the representation; (5) appellants reasonably relied on the representation; (6) respondents were harmed; and (7) respondents’ reliance on appellants’ representation was a substantial factor in causing the harm. (Italics added.)

Appellants contend that respondents failed to identify any affirmative misrepresentation by appellants that the plans would bring respondents into compliance with the HCAO and HCSO. (See Fox v. Pollack (1986) 181 Cal.App.3d 954, 962 [requiring proof of “a misrepresentation of a past or existing material fact”].) We review for substantial evidence. (Nissan Motor Acceptance Cases (2021) 63 Cal.App.5th 793, 824–825.)

1. Evidence of Misrepresentation

Ample evidence supported an inference that appellants made a misrepresentation of a past or existing material fact. As to compliance

with the HCAO, SML’s Urgel emailed Hornblower’s Finn and Jacobs on October 25, 2010 (with cc’s to Rogers and Lavis) that the “Kaiser plan meets the HCAO requirements, however HCAO requires the Employer to pay the full employee premium.” (Italics added.) Urgel emailed Finn on October 27, 2010: “You have three options that bring you in Compliance with the HCAO[:] Option 1 – pay 100 % of the employee’s Kaiser premium [¶] Option 2 – pay an additional $3.00 per hour worked to the employee to a maximum of $120 a week [¶] Option 3 – pay $3.00 per hour worked to the City and County of San Francisco up to 40 hours per week[.]” (Italics added.) Thereafter, at the beginning of each year, the parties met to discuss respondents’ needs, and according to several of respondents’ witnesses, the need for plans compliant with the HCAO was discussed with Rogers and Lavis, who responded with purportedly compliant plans. In January 2012, for example, Rogers emailed Singer about modifications to an employee contribution exhibit “due to HCAO” and promised to “run this by [SML’s Compliance Officer] tomorrow for compliance implications if any.” In November 2015, SML represented to respondents that “Hornblower and Alcatraz Cruises does have a HCAO complaint plan” in the “Kaiser DHMO” to which employees do not contribute premium.[1]

As to compliance with the HCSO, when queried how to meet the requirements of the ordinance, appellants encouraged Hornblower and Alcatraz to use the ASI HRA for compliance. In a December 2013 email with the subject line “SF HCSO Compliance in 2014,” Lavis told Singer that the ASI HRA was an “option” for HCSO compliance. In a December 2013 email, Rogers recapped a meeting regarding “SF HCSO Solution for 2014,” stating that City guidance “will enable HB /Alcatraz to convert their current SF HCSO HRA’s [sic] from medical /dental /vision to be for dental /vision only effective January 1, 2014 and remain in compliance with the requirements for SF HCSO.” (Italics added.) In an April 2015 email, Lavis discussed the HCSO and represented that appellants had been “very diligent about how we advise our clients about these rules.” In September 2015, Lavis represented to Gray that Hornblower was “ok on the HCSO.”

2. Appellants’ Arguments

a. Failure of Recollection

Appellants argue that respondents’ witnesses—including Hornblower human resource directors Finn, Singer, Gray, and Guido—could not recall any specific conversations with appellants. The argument is unavailing.

In the first place, respondents did not rely solely on the testimony of their employees. While the employees testified to their general recollection of seeking compliant plans and appellants’ assurances that the plans they proposed were compliant, the emails from appellants provided specific examples of misrepresentations sufficient to uphold the verdict. Those documents also tended to corroborate the witnesses’ testimony that each year appellants represented that the plans complied with applicable law.

Furthermore, to the extent the state of the employees’ recollection is relevant to whether the representations really occurred, it was for the jury to decide how the witnesses’ memory affected their credibility. (People v. Cortez (2016) 63 Cal.4th 101, 124; People v. McDaniel (1957) 154 Cal.App.2d 475, 482.) Pursuant to CACI No. 107, the court instructed the jury that, in deciding whether to believe a witness’s testimony, the jury could consider (among other things) “[h]ow well did the witness remember and describe what happened.” We presume the jury followed the court’s instructions (Rufo v. Simpson (2001) 86 Cal.App.4th 573, 598–599) and defer to the jury’s credibility determinations (Lenk v. Total Western Inc. (2001) 89 Cal.App.4th 959, 968).

b. Inferences from the Exhibits

Appellants next dispute what inferences should be drawn from the documentary evidence, urging that the emails do not show any false statement relevant to the 2015 Audit period. For example, appellants argue, the email exchange reflected in Exhibit 85 occurred in November 2010, before respondents purchased the plans at issue in the 2015 Audit, and the emails should be interpreted to refer only to Hornblower’s previous plan (despite Finn’s testimony to the contrary).[2] Further, appellants assert: the phrase “due to HCAO” in Rogers’ January 2012 email (Ex. 6) was just a memorialization of what someone said at a meeting, not a promise to provide a plan that met HCAO requirements; the January 2015 emails between Gray and Lavis regarding the last policy year at issue (Ex. 60) should be considered the first time respondents specifically asked for an HCAO-compliant plan, and Lavis’s response—that he sought quotes to “come as close as possible” to HCAO requirements—was not a promise to meet those requirements; when Rogers emailed that “ASI HRA (SF HCSO) is working well” (Ex. 126), he was merely reporting what Singer told him; and Exhibits 73 and 77 were just recaps of what had been discussed in meetings rather than representations.

While appellants urge a different spin on these emails, it is not our role to reweigh the evidence or to choose between competing inferences. (Howard v. Owens Corning (1999) 72 Cal.App.4th 621, 630–631.) To the contrary, we must draw all inferences in favor of the prevailing party. (Nissan Motor Acceptance Cases, supra, 63 Cal.App.5th at p. 811.) Substantial evidence supported the jury’s conclusion that appellants made representations of fact.

c. Misrepresentation by Omission Theory

Appellants contend the trial court “allow[ed]” respondents to argue improperly that the misrepresentation element was satisfied by appellants’ promise to ensure respondents’ compliance “in the future,” based on appellants’ “silence” rather than an affirmative representation. (See Apollo Capital Fund, LLC v. Roth Capital Partners, LLC (2007) 158 Cal.App.4th 226, 243 [“a positive assertion is required; an omission or an implied assertion or representation is not sufficient”].) Their argument is meritless.

Respondents’ attorney did incorrectly say in closing argument that a negligent misrepresentation could be established by proof of an omission as well as by proof of an affirmative representation. Counsel told the jury: “There’s negligent misrepresentation, and that’s crystal clear, I think, from the testimony, from the evidence you’ve seen. Not only were there active statements made that were negligently untrue, but there also were a series of omissions that were untrue.” (Italics added.) Counsel further asserted that appellants “did not tell my clients that they had never read the ordinance and did not know what the ordinance meant in 2010 when they were talking to our people in that first email,” a matter counsel found “shocking” and to be “an act of omission.”[3]

However, respondents’ counsel did not rely entirely on this 2010 omission, but also pointed out the affirmative statements in 2010 (Exhibit 85) as a basis for finding a misrepresentation. Moreover, appellants’ counsel did not object to counsel’s statement, so appellants cannot be heard to challenge the statement now.[4]

Furthermore, to the extent respondents’ counsel misstated the law, appellants’ counsel corrected him in front of the jury. In discussing the applicable jury instruction, appellants’ counsel argued: “This talks about what constitutes a negligent misrepresentation. [Respondents’ counsel] talked about omissions, what my clients didn’t say. Well, if you take a look at this instruction, there’s nothing in there about omissions. A representation must be made orally, in writing or by non-verbal conduct. It doesn’t say anything about, oops, you forgot to say something. [¶] So we have to focus only on the statements that were actually made or alleged to be made by my clients . . . .” In discussing the verdict form, appellants’ counsel told the jury: “We are going to ask you to check ‘no’ with respect to each of these questions [asking whether the defendant made a false representation of fact to Hornblower or Alcatraz]. And while you’re considering this question, please remember to consider only affirmative statements, only statements that were actually made. [¶] Remember, there was nothing in the jury instruction that we looked at that includes a line for omissions or anything that was left out. Only affirmative statements are applicable to this question.”

Finally, the court told the jury that respondents had to prove a representation (as opposed to an omission) and that the representation needed to pertain to a present or existing fact. Pursuant to CACI No. 1903, the court instructed that respondents would have to show appellants “represented to [respondents] that a fact was true.” Pursuant to CACI No. 1904, the court instructed that an opinion, such as a “statement regarding a future event,” is not a representation of fact unless respondents proved, for example, that appellants had special knowledge that respondents did not have, or appellants and respondents were in a relationship of trust and confidence. We presume the jury followed the instructions. (See, e.g., Garcia v. ConMed Corp. (2012) 204 Cal.App.4th 144, 162.)

B. Lavis’ and Rogers’ Liability for Professional Negligence

Appellants next contend the evidence was insufficient to establish that Lavis and Rogers breached a duty for the purpose of respondents’ professional negligence claim.

1. Jury Instructions

In conjunction with instructions on the elements of professional negligence, the jury was given two instructions specifically on the scope of an insurance broker’s duty.

Instruction No. 24 read: “Insurance brokers owe a limited duty to their clients, which is only to use reasonable care, diligence, and judgment in procuring the insurance requested by an insured.” (See Pacific Rim Mechanical Contractors, Inc. v. Aon Risk Ins. Services West, Inc. (2012) 203 Cal.App.4th 1278, 1283; San Diego Assemblers, Inc. v. Work Comp for Less Ins. Servs., Inc. (2013) 220 Cal.App.4th 1363, 1370 [no “duty on brokers to affirmatively determine and procure insurance to meet an insured’s coverage needs”].)

Instruction No. 25 added: “Insurance brokers also owe a heightened and expanded duty to their clients when: [¶] [1] there is a request or inquiry by insured for a particular type or extent of coverage; or [¶] [2] the insurance broker misrepresented the nature, extent, or scope of the coverage being offered or provided; or [¶] [3] the insurance broker assumed an additional duty by ‘holding himself out’ as having expertise in a given field of insurance being sought by the insured.” (Italics added.; Lozano v. Harless (E.D. Cal., Mar. 26, 2010, No. 110CV00194LJOGSA) 2010 U.S. Dist. Lexis 28898, at *9; Paper Savers, Inc. v. Nacsa (1996) 51 Cal.App.4th 1090, 1096–1097.)

2. Substantial Evidence

Ample evidence supported a conclusion that Lavis and Rogers owed a duty to use reasonable care in procuring insurance that complied with the City ordinances. Respondents had requested a particular type of coverage (a plan that would render them compliant with the HCAO), and Lavis and Rogers represented that the Kaiser plan would suffice. Finn, Singer, and Gray testified that they repeatedly requested specific coverage, asking Lavis and Rogers for plans compliant with the ordinances, and that Lavis and Rogers also represented the plans they proposed were compliant. DaSilva testified that Lavis and Rogers represented that the ASI-administered HRA was compliant. Furthermore, according to Warner, appellants held themselves out as having expertise in the field. Under the jury instructions to which the parties agreed, appellants had a duty to use reasonable care, diligence, and judgment in procuring the insurance that respondents requested. Appellants fail to establish error.

C. Causation and Damages

As the jury was instructed, it was respondents’ burden to prove that appellants’ misrepresentations (or professional negligence) were a “substantial factor” in causing respondents’ harm. In accord with CACI No. 430 and Instruction No. 27, the court told the jury: “A substantial factor in causing harm is a factor that a reasonable person would consider to have contributed to the harm. It must be more than a remote or trivial factor. It does not have to be the only cause of the harm. [¶] Conduct is not a substantial factor in causing harm if the same harm would have occurred without that conduct.” (See Raven H. v. Gamette (2007) 157 Cal.App.4th 1017, 1025; Williams v. Wraxall (1995) 33 Cal.App.4th 120, 132.) We review the jury’s finding for substantial evidence. (Hernandez v. Jensen (2021) 61 Cal.App.5th 1056, 1069.)

1. Substantial Evidence

Appellants negligently misrepresented that the Kaiser plan and the ASI HRA rendered respondents in compliance with the ordinances; in reliance on those representations, respondents purchased the policies and used the ASI HRA; respondents were nonetheless found not to be in compliance and incurred $2.75 million to settle the matter plus approximately $500,000 in attorney fees. Of these amounts, the jury awarded respondents roughly $1.835 million and their attorney fees as damages. In short, appellants’ misrepresentations were a nontrivial contributing factor to the harm assessed by the jury.[5]

2. Appellants’ Arguments

a. Employee, Year, or Violation Type

Appellants argue that respondents did not prove “how the settlement payments were broken down by employee, year, or violation type” or “how each individual Appellant’s specific actions were a substantial factor in causing Respondents to pay the HCAO-related settlement amounts.”

Appellants do not cite any legal authority for this proposition. Nor would requiring proof of causation by year or violation type be appropriate, since the settlement agreement did not divvy up respondents’ liability in that way. To the contrary, the settlement was a compromise of all of respondents’ HCAO-related liability, and a jury could reasonably conclude that each appellant was a substantial factor in causing the $2.75 million sum that respondents spent in resolving their HCAO and HCSO liability.

Moreover, because it is appellants’ burden to affirmatively demonstrate error, the question on appeal is not whether appellants’ misrepresentations were a substantial factor in causing respondents to pay the settlement amount, but whether they were a substantial factor in causing the harm for which the jury awarded damages. Here, the jury awarded respondents $1,835,008.21 of the $2.75 million respondents paid in settlement. Appellants fail to show that the jury could not reasonably find their conduct to be a substantial factor in causing that amount of payment.

b. Liability to Alcatraz for Pre-2013 Amounts

Appellants next complain that the jury’s award “requires [appellants] to pay Alcatraz the full HCAO settlement amount it paid to the OLSE for the entire 2011–2015 time period even though it is undisputed SML did not become Alcatraz’s broker until 2013.” Appellants argue that the jury thus imposed damages against appellants for violations that appellants could not have caused.

Appellants do not demonstrate any entitlement to relief. The jury awarded Alcatraz only $104,791.15 of the $308,853.86 Alcatraz paid to settle with the City for years 2011–2015. Appellants do not show that any of the amount awarded to appellants corresponds to periods before 2013. (In fact, it appears the jury awarded Alcatraz $0 for HCAO premiums and thus nothing for those premiums for plan years 2011–2013. [6]) Appellants therefore fail to establish any amount of damages for which appellants could not have been a substantial causative factor.

c. No participation in HCAO violations

Appellants contend they had no part in the decisions leading to respondents’ violation of the HCAO, which they categorize as failing to offer (1) HCAO-compliant plans to employees working 30 or more hours a week, (2) HCAO-compliant health plans at no premium cost to the employee (or pay the required HCAO fee to the City), and (3) health plans of any kind to covered employees who worked 20–29 hours per week. They argue that respondents made these decisions and therefore “were at fault for the HCAO settlement amounts and would have paid them regardless of Appellants’ actions.”

Appellants’ argument is meritless. As to the first category of violation —respondents’ failure to provide employees working 30 or more hours with a compliant plan—appellants’ negligent misrepresentation of the plan’s compliance was certainly a substantial causative factor. As to the second category of violation—respondents’ failure to pay the premiums for the employee—the jury did not impose any damages against appellants for those unpaid premiums. Appellants are not entitled to relief on appeal even if they were not a substantial cause.

As to the third category of violation—respondents’ failure to offer any plan to employees working 20–29 hours—the jury could have reasonably concluded that appellants’ conduct was a contributing cause. Appellants represented in 2010 that Hornblower would be in compliance using the Kaiser plan if Hornblower did not charge its employees for the premium; that representation was false, because compliance also required that the plan be extended to employees working 20–29 hours per week. This false representation could have been found to result in respondents’ violation.

Moreover, appellants fail to identify any amount of damages the jury imposed for this category of violation. Neither the Notice of Violation nor the settlement agreements attributed a sum to this type of violation; nor is there evidence that respondents would have been able to settle their liability for less than the $2.75 million, or less than the amount awarded by the jury, if this category of violation was excluded.

d. No participation in HCSO violations

In a similar vein, appellants contend it was respondents or ASI (as respondents’ agent) who caused the failure to timely fund the HRAs, properly and timely notify employees about their HRAs, and maintain the HRAs for the required 24-month period. Appellants cite Maas’s testimony about SML’s lack of participation, as well as evidence that ASI provided services pursuant to a contract that was between ASI and respondents.

Substantial evidence nonetheless supported the jury’s finding of causation. The evidence indicated that ASI was at fault for the HCSO shortcomings: DaSilva testified “it was ASI that failed to make those contributions from Hornblower available to Hornblower employees for the

24-month period;” Guido concurred it was “ASI’s job to ensure that contributions were available to employees for 24 months;” and ASI was responsible for sending timely notices to Hornblower’s and Alcatraz’s employees. Moreover, a jury could reasonably conclude from the evidence that it was appellants’ representations that led respondents to rely on ASI and the ASI HRA, as well as SML, to comply with the HCSO without respondents’ supervision. Appellants presented ASI and the HRA as the option, represented that SML would provide support and that Hornblower would not have to be involved, and actively worked with ASI to set up the HRA plan, while Hornblower continued to look to appellants for compliance advice.

D. Evidentiary and Legal Rulings

Appellants assert that the court erred in regard to evidentiary rulings, the denial of their motions for summary adjudication and JNOV, instructing the jury, and the special verdict form. Their arguments are unpersuasive.

1. Excluding Non-Privileged Testimony

Appellants contend the court erred by precluding certain inquiries of respondents’ witnesses based on the attorney-client privilege. We review for an abuse of discretion. (See O&C Creditors Group, LLC v. Stephens & Stephens XII, LLC (2019) 42 Cal.App.5th 546, 564–565.)

a. Ruling on the Privilege Objection (DaSilva)

Appellants’ cross-examination of DaSilva proceeded in relevant part: “[APPELLANTS’ COUNSEL]: You did testify at your deposition as the Person Most Knowledgeable for Hornblower that you did not know if Hornblower even considered seeking legal advice in 2013 regarding legal requirements for its benefit plans; correct? [¶] A. I don’t— [¶] [RESPONDENTS’ COUNSEL]: I’m going to object to the extent it calls for attorney-client privileged communications. [¶] THE COURT: Sustained. [¶] [APPELLANTS’ COUNSEL]: Your Honor, this was asked and answered during the deposition. [¶] THE COURT: Good. But I sustain the objection. [¶] [APPELLANTS’ COUNSEL]: I would like to play the video clip from Ms. DaSilva’s deposition. [¶] THE COURT: You’re not going to play it on—I just sustained the objection on grounds of attorney-client privilege.”

Appellants do not dispute that their counsel’s question sought information protected by the attorney-client privilege. Instead, they argue that respondents previously waived the privilege during DaSilva’s deposition when the question was asked and DaSilva was allowed to answer. (See Code Civ. Proc., § 2025.460, subd. (a).) Appellants are incorrect.

First, there was no waiver. In DaSilva’s deposition, appellants’ lawyer referenced a document that said SML might provide guidance on legal requirements affecting health plans but the employer should seek its own counsel for advice. Appellants’ lawyer asked DaSilva, “Did Hornblower ever consider getting legal advice in response to this warning in 2015?” DaSilva answered, “I’m unaware of that.” Appellants’ lawyer elicited the same response as to whether Hornblower considered getting legal advice in 2014 and 2013. DaSilva’s testimony that Hornblower did not know whether it ever considered getting legal advice is not a disclosure of a confidential attorney-client communication or waiver of the privilege.

Furthermore, any error in precluding the evidence at trial was harmless. The deposition testimony shows that Hornblower could neither admit nor deny whether it considered seeking legal advice in light of SML’s disclaimer. Appellants fail to show they would have obtained a more favorable outcome if the jury had heard this testimony.

b. Ruling on the Privilege Objection (Jacobs)

Appellants make a similar argument as to questions asked of Jacobs. During cross-examination at trial, appellants’ counsel asked Jacobs, “And you answered during your deposition that Ms. Singer never asked you questions about insurance; correct?” Respondents’ counsel objected on the ground of “attorney-client.” Appellants’ attorney told the court “[t]his was asked and answered without a privilege objection during the [deposition].” At that point, the reporter’s transcript indicates there was a discussion off the record. Appellants do not cite to any point in the record where the court ruled on the objection.

Because appellants do not show that the objection was sustained, they fail to establish error. In any event, contrary to the representation of appellants’ counsel, there was an objection during Jacobs’ deposition. The deposition transcript reads as follows: “Q. Okay. So [Singer] didn’t—she wasn’t asking you questions about insurance? [¶] RESPONDENTS’ COUNSEL: Objection to the extent it calls for attorney-client communications. I’m going to instruct you not to answer whether you were advising her on insurance questions. I’m instructing him not to answer. [¶] A. Not that I recall.” (Italics added.)

Although Jacobs proceeded to answer despite counsel’s objection and instruction, no waiver occurred. Only the client can waive the attorney-client privilege, and Jacobs was not the client, but was merely testifying in his individual capacity while no longer in Hornblower’s employ.

c. Questioning About Non-Privileged Facts

Appellants contend the court erred by precluding them from asking Jacobs about non-privileged foundational facts surrounding his privileged communications with Hornblower employees, including “when” those communications occurred, “who” was involved, and whether the privilege was later “waived.” (See, e.g., State Farm Fire & Cas. Co. v. Superior Court (1997) 54 Cal.App.4th 625, 640 [privilege does not protect fact of communication, the time, or the participants].) Again, the record does not support appellants’ argument.

Before trial, the court granted respondents’ motion to exclude testimony from Jacobs and to exclude communications between him and respondents, except for testimony as to his dealings with the City on the audit, his knowledge of HCAO requirements, and actions he took as a result. Appellants sought leave to ask questions of Jacobs as to whether he provided legal advice on the plans’ compliance and to probe whether the privilege was waived and when the communication was made. The court reiterated that asking whether advice was given was privileged.

Appellants’ counsel later attempted to clarify the court’s ruling outside the presence of the jury, claiming he could ask about “the background, neutral facts about those communications, such as who was present, when the discussions may have occurred and the general subject matter.” The court replied that questions as to otherwise privileged emails that had been admitted into evidence by stipulation were fair game. Appellants’ counsel pursued his argument, giving as an example a question that would ask “have you had conversations” with counsel regarding insurance coverage, which the court identified as improperly seeking an attorney-client communication.

It is not clear whether the court ruled on the nuance appellants press now—exploring a possible lack of privilege due to the timing of the conversation or the participants—as the court responded instead to counsel’s desire to ask whether a client had discussed insurance coverage with its attorney. (See Evid. Code, § 954 [prohibiting disclosure of any “confidential communication between client and lawyer”].) In any event, appellants did not make any offer of proof that there was some communication when Jacobs was not counsel, or that a communication was not confidential, or that the privilege was thereafter waived. The record does not demonstrate error.

2. Admission of GT Invoices

The court admitted into evidence invoices from respondents’ attorneys, Greenberg Traurig (GT Invoices), which reflected the attorney fees that respondents purportedly incurred in connection with the 2015 Audit. Appellants contend this was error because the invoices were hearsay and heavily redacted. We review for an abuse of discretion.

a. Hearsay

Appellants contend the invoices were hearsay to the extent offered to prove the matter asserted therein—the amounts charged and paid for legal representation as a result of the 2015 audits.[7] The record, however, shows they were not admitted for that purpose.

Before trial, appellants moved to exclude the GT Invoices on the ground they were hearsay and likely to cause undue consumption of time and confusion of the issues, since the description of the legal work was redacted. The court decided it would admit the invoices with a limiting instruction that “[t]hey’re not being offered for the truth of the matter and that they’re being offered to corroborate other witnesses’ testimony.” Appellants’ counsel argued that, due to the redaction, it could not be determined if the work was necessary or related to appellants’ participation in the audit; respondents’ counsel represented that Gray would testify about the bills and how the services related to the audit and settlement.

On direct examination, Gray testified that Greenberg Traurig rendered services in connection with the audit and the reduction of respondents’ potential liability of $14 million to the settlement payment of $2.75 million. Gray added that she was the one who approved the law firm’s invoices, and she identified the GT Invoices (Exhibit 301) as the invoices she approved. When respondents moved the exhibit into evidence, appellants’ counsel objected on grounds of “foundation” and hearsay. Gray testified further that she received the invoices, reviewed them, and approved them for processing. The court ruled: “So Ladies and Gentlemen, I’m going to allow the admission of Exhibit 301, not for the truth of the matter, but for the purpose of the effect o[n] the mind o[f] . . . the witness and to explain that she processed them on for payment. . . . So they will be coming in for that limited purpose only.” Gray then confirmed that the invoices were for the audit and that they totaled over $500,000. Before deliberations, the court instructed the jury further: “During the trial, certain evidence was admitted for a limited purpose. You may consider that evidence only for that purpose and for no other.”

The court did not abuse its discretion. Invoices may be admitted to corroborate a witness’s testimony about amounts owed and payments made. (Pacific Gas & Electric Co. v. G.W. Thomas Drayage & Rigging Co. (1968) 69 Cal.2d 33, 42 [invoices inadmissible independently to prove that liability was incurred, payment was made or charges were reasonable, but they could be used for the limited purpose of corroborating the plaintiff’s testimony]; Mai v. HKT Cal, Inc. (2021) 66 Cal.App.5th 504, 520–521.) Admitting the invoices for their effect on Gray (i.e., that they caused her to process them for payment) was also for a non-hearsay purpose. (See generally Hart v. Keenan Properties, Inc. (2020) 9 Cal.5th 442, 447 [invoices were not hearsay when not offered to prove the truth of their statements].)

b. Redactions

Appellants next contend it was improper to admit the GT Invoices because the descriptions of the attorneys’ work were redacted. They rely on Los Angeles County Bd. of Supervisors v. Superior Court (2016) 2 Cal.5th 282 (Los Angeles) for the proposition that the redacted portions were not privileged. Los Angeles does not help them.

The court in Los Angeles ruled that, while an attorney invoice listing the amount of fees is not communicated for the purpose of legal consultation, information within the invoice may be conveyed for that purpose—such as “to inform the client of the nature or amount of work occurring in connection with a pending legal issue” —which “lies in the heartland of the attorney-client privilege.” (Los Angeles, supra, 2 Cal.5th at p. 297.) Here, it was not an abuse of discretion for the court to conclude that the redacted descriptions of the work performed by appellants’ attorneys was privileged.[8]

Appellants’ reliance on Realtek Semiconductor Corporation v. LSI Corporation (N.D. Cal., June 16, 2014, No. C-12-3451-RMW) 2014 U.S. Dist. Lexis 81678, at *12 (Realtek), is also misplaced. There, a federal court judge ruled that substantial evidence supported the jury’s conclusion that the plaintiff was not entitled to damages as to amounts claimed on redacted invoice entries, where there was testimony that the plaintiff was not entitled to those damages, and there was no testimony that the fees were incurred as a result of the subject breach of contract. Realtek does not address the admissibility of redacted invoices, and it is distinguishable anyway because, in that case, there was no evidence the redacted amounts were related to the defendant’s wrongdoing. Here, there was.

c. No Miscarriage of Justice

In any event, appellants fail to demonstrate that any error in the admission of the GT Invoices resulted in a miscarriage of justice. (Evid. Code, § 353, subd. (b) [requiring a miscarriage of justice for reversal].)

Appellants argue that the jury must have relied on the GT Invoices for the truth in awarding $500,000 in attorney fees because there was no other evidence of the work performed. Not so. Gray testified that the invoices were for work related to the audit, they totaled over $500,000, and she approved them for payment. As the jury was instructed, “the testimony of a single witness is enough to prove a fact.” (Knutson v. Foster (2018) 25 Cal.App.5th 1075, 1096.)

Appellants next argue that Gray recalled respondents paying less than half the fees the jury awarded, because Gray testified that the total spent including the $2.75 million settlement amount and “[o]ver $500,000” attorneys’ fees was “just under [$]3 million.” That interpretation of her testimony is untenable, however, because Gray explicitly stated that the attorney fees amounted to “[o]ver $500,000” and the record shows she merely added incorrectly. Indeed, appellants ignore the fact that, after a discussion among court and counsel off the record, Gray confirmed the correct sum of the settlement and attorney fees: “Q: Ms. Gray, so the 2.75 and the 500,000, would you say that adds up to 3.25 million? [¶] A: Yes.”

Appellants’ final contention—that the redaction of the work descriptions deprived them of “any opportunity” to argue that the work was unnecessary or unrelated to the 2015 audits—is simply false. Appellants’ attorney cross-examined Gray on her inability to state whether the work description on an invoice related to the HCAO or HCSO audits. In closing argument, appellants’ attorney told the jury that it could not rely on the figures in the invoices and that Gray was unable to say what the work was for or how much was paid by Hornblower or Alcatraz.[9]

d. Limiting Instruction

Appellants contend the court’s two limiting instructions were insufficient to prevent the jury from considering the invoices for their truth. They cite no legal authority for this proposition. To the contrary, we presume the jury follows a trial court’s limiting instruction, and appellants present no evidence the jury ignored it. (Rufo v. Simpson, supra, 86 Cal.App.4th at

p. 598.)

3. Failure to Dismiss Claims Against Individuals

Appellants contend the court erroneously allowed respondents to pursue a theory of individual liability against Lavis and Rogers by denying appellants’ motion for summary adjudication, “rubber stamping” that ruling and denying their motion in limine, and denying their motion for judgment notwithstanding the verdict (JNOV).

a. Summary Judgment

Appellants point out that employees are not liable to third parties for the tortious acts of their principal unless more than mere pecuniary harm occurred. (Citing U.S. Liability Ins. Co. v. Haidinger-Hayes, Inc. (1970) 1 Cal.3d 586, 595; Nasrawi v. Buck Consultants (E.D. Cal. 2010) 713 F.Supp.2d 1080, 1088.) Because Lavis and Rogers were employees of SML and respondents alleged only economic harm, appellants contend Lavis and Rogers could not be liable as a matter of law.

Appellants’ argument is meritless. Lavis and Rogers were alleged to be liable not based on the tort of SML, but based on their breach of their own duty to respondents. Appellants fail to demonstrate there was no triable issue of material fact relevant to whether Lavis and Rogers undertook a duty to respondents to provide compliant plans, so they fail to establish error in the denial of their summary adjudication motion. Moreover, their challenge to the denial of their motion fails because the same issue was raised at trial and decided by the jury, and the jury’s finding was supported by substantial evidence. (Legendary Investors Group No. 1, LLC v. Niemann (2014) 224 Cal.App.4th 1407, 1410 [“As a general rule, the denial of summary judgment is harmless error after a full trial covering the same issues.”]; Hernandez v. Jensen, supra, 61 Cal.App.5th at p. 1069, fn. 5 [same].)

b. Motion in Limine

While appellants cast the aspersion that the trial judge “rubber stamped” another judge’s summary adjudication ruling in denying appellants’ motion in limine, they fail to cite to the record or discuss the court’s authority in that regard. Their maligning of the court is unfounded and inappropriate.

c. JNOV

Appellants contend the court erred by not granting JNOV in favor of Lavis and Rogers because they were held liable for all of respondents’ damages even though respondents had based their arguments on the conduct of other SML employees, such as Urgel and Powelson. In particular, appellants complain of a statement by respondents’ attorney in closing argument that “[SML] is not just Mr. Lavis and Mr. Rogers. It’s Sandy Urgel. It’s Janet Powelson . . . . It’s all those people that talked to my clients[.]”

The contention has no merit. The argument of respondents’ counsel appeared to be that Urgel and Powelson, as well as Lavis and Rogers, were acting on behalf of SML when they spoke of respondents’ compliance, not that Lavis and Rogers should be held liable for what Urgel and Powelson said. Appellants did not object to counsel’s statement during the closing argument, and they fail to show that the statement was anything more than a fair comment on the evidence.

In any event, as recited ante, substantial evidence supported the conclusion that Lavis and Rogers owed respondents a special duty based on their own actions, subjecting them to individual liability for professional negligence. Appellants fail to establish error in the denial of the JNOV motion. (Minnegren v. Nozar (2016) 4 Cal.App.5th 500, 514 [JNOV denied where substantial evidence supported the jury’s verdict].)

4. Jury Instructions

Appellants challenge the court’s jury instructions in two respects: (1) Instruction No. 31, which described the representation required to prove negligent misrepresentation; and (2) Instruction No. 29, regarding the parties’ dispute as to whether ASI was appellants’ agent. We review de novo. (Holistic Supplements, LLC v. Stark (2021) 61 Cal.App.5th 530, 548.)

a. Instructions Specifying Past or Existing Material Fact

Appellants contend that, because respondents pursued a misrepresentation by omission theory, appellants requested an instruction specifying a particular past or existing material fact for respondents to prove for their negligent misrepresentation claim. Appellants’ Proposed Instruction No. 4 read: “Defendants represented to Plaintiffs that the employee benefit plans Plaintiffs purchased for plan years 2011 through 2015 met the requirements of the HCAO [and] . . . the [HRA] that Plaintiffs purchased from [ASI] would meet the requirements of the HCSO.” Proposed Instruction No. 5 was to the same effect in regard to the element of reliance. Appellants complain that the court instead gave Instruction No. 31, which did not say explicitly that the misrepresentation had to relate to a past or existing fact.

Appellants’ argument is meritless. As discussed ante, Instruction No. 31 required respondents to prove that appellants “represented to [respondents] that a fact was true,” indicating an omission would not suffice. (Italics added.) In addition, the court gave Instruction No. 32, which informed the jury that a statement regarding a “future event” – that is, not pertaining to a past or existing fact—would be insufficient except in specified circumstances. These instructions, identical to model instructions CACI No. 1903 and CACI No. 1904, reasonably addressed appellants’ concerns and adequately covered the subject matter. (See Uriell v. Regents of University of California (2015) 234 Cal.App.4th 735, 742–743.)

b. Instruction No. 29 (Agency)

Appellants contend the court erred by giving Instruction No. 29,[10] which was patterned after CACI 3705, because it “instruct[ed] that ASI was Appellants’ agent.” The assertion is false. The instruction only advised that Hornblower and Alcatraz contended ASI was SML’s agent. Indeed, the title of the instruction was “Existence of ‘Agency’ Relationship Disputed.” (Italics added.) The next instruction—Instruction No. 30—told the jury that appellants claimed ASI was respondents’ agent and that respondents were responsible for ASI’s conduct.

Appellants nonetheless contend Instruction No. 29 should not have been given due to “uncontroverted testimony” from Maas, DaSilva, and Guido regarding appellants’ lack of involvement in the HCSO violations and because respondents presented “no evidence any of the Appellants authorized ASI to act on their behalf.” (Italics and bolding in original. Citing Shultz Steel Co. v. Hartford Accident & Indemnity Co. (1986) 187 Cal.App.3d 513, 519.) As the trial court noted and as we explain ante, there was sufficient evidence to warrant the instruction, leaving it to the jury to weigh the disputed evidence and determine if an agency relationship existed. Appellants fail to establish instructional error.

5. Special Verdict Form

As relevant here, the special verdict form asked the jury to determine each respondent’s damages in terms of “Payments to City and County of San Francisco” and “Attorney fees.” Appellants contend the court should have instead used their proposed verdict form, which would have required the jury to “[d]etermine the amount of damages Plaintiffs proved . . . was caused by Defendants’ professional negligence by totaling the category of damages listed below,” followed by seven categories of damages differentiating between each violation of each ordinance, and, for each violation, requiring the jury to determine the amount attributable to each of four plan years.

Appellants fail to demonstrate error. They cite no legal authority suggesting the jury would have to differentiate between the HCAO and the HCSO or the policy years at issue, or to allocate damages among claims or, in this context, between appellants. Trejo v. Johnson & Johnson (2017) 13 Cal.App.5th 110, 124, 137, ruled that a special verdict form was defective for failing to include an essential element of a cause of action for negligent failure to warn, but here no element of respondents’ cause of action was omitted. (See Code Civ. Proc., § 624 [special verdict form must “present the conclusions of fact as established by the evidence,” and those factual conclusions must leave nothing for the court but to draw conclusions of law].)

Moreover, the verdict form flowed from the jury instructions to which appellants stipulated. Joint Jury Instruction No. 35 listed the alleged damages as “[a]mounts paid by [respondents] under the settlement agreements . . . to resolve the 2015 Audit” and “[a]mounts [respondents] incurred in attorneys’ fees and costs to resolve the 2015 Audit.” As the trial court explained at the jury instruction conference, respondents’ “items of damages are -- are identified by stipulation of the parties in the jury instructions, and those items of damages are the cost of the settlement with the City and attorneys’ fees, and so that’s -- that’s what we’ve done in the verdict forms.”

Appellants contend that, because the verdict form did not require the jury to determine liability for each policy year, it allowed the jury to find appellants liable for two policy years (2011 and 2012) in which they had no relationship with Alcatraz. However, Instruction No. 33 instructed the jury that the applicable policy periods for the HCAO were “2011 through 2015 for both [Hornblower] and [Alcatraz]” and, with respect to the HCSO, “2012 through 2015 for [Hornblower]” and “2013 through 2015 for [Alcatraz].” Appellants do not demonstrate that the jury awarded damages contrary to the evidence and the jury instruction.

Appellants further argue that the verdict form led the jury to award attorney fees because attorney fees were mentioned in the verdict form. It is difficult to imagine how a verdict form might ask a jury whether attorney fees should be included as damages without mentioning the words, “[a]ttorney fees.” In their reply brief, appellants suggest there should have been just one blank for “damages” (contrary to their argument that damages should be specified by ordinance, violation, and year), leaving it to the jury to decide what if anything to include on that line for attorney fees. We find nothing in the verdict form that would have coerced a jury to award fees contrary to what the jury believed the evidence showed.

Appellants further complain that the verdict forms did not ask how much of the damages related to appellants’ negligent misrepresentation as opposed to appellants’ professional negligence, or how much of respondents’ harm was caused by the actions of each separate appellant. They claim the jury was therefore “not given the opportunity to decide how much in damages was attributable to each distinct representation supposedly made by each Appellant,” but they fail to explain why that matters. To the extent appellants are concerned about double recovery, Instruction No. 40 advised the jury that respondents could not recover for the same harm under their two theories for negligent misrepresentation and professional negligence. (Boeken v. Philip Morris USA, Inc. (2010) 48 Cal.4th 788, 798.)

6. Cumulative Error Doctrine

Appellants invoke the cumulative error doctrine, which applies when “the cumulative effect of [a trial court’s] errors . . . makes[s] it ‘reasonably probable that a result more favorable to the appealing party would have been reached in the absence of the error[s].’ ” (Johnson Tosco Corp. (1991) 1 Cal.App.4th 123, 141.) Here, appellants have not shown any error occurred, let alone multiple errors, so the cumulative error doctrine does not apply. Furthermore, we conclude that any possible errors that we noted as non-prejudicial are not prejudicial when viewed collectively. (See People v. Andrade (2015) 238 Cal.App.4th 1274, 1311.) Appellants received a fair trial.[11]

III. DISPOSITION

The judgment is affirmed.

WISEMAN, J. *

We concur.

JACKSON, P.J.

SIMONS, J.

Hornblower Yachts v. Brown & Brown Insurance Services of CA / A160562

[1] Appellants point out that this November 2015 representation (Ex. 10) occurred after respondents purchased insurance for 2015. Whether or not this representation is itself actionable, it tends to confirm, with other evidence, the testimony of respondents’ witnesses that throughout their relationship with appellants, appellants represented that the policies they were offering to respondents complied with the ordinances.

[2] See also Clement v. Smith (1993) 16 Cal.App.4th 39, 44 [representations by insurance agent both before and after the policy was issued were relevant for a misrepresentation claim].

[3] Appellants cite additional statements by respondents’ counsel, but they appear to have been directed to other elements of the cause of action. Respondents’ attorney argued: “[Lavis and Rogers] absolutely misrepresented the nature and extent and scope of the policies, because they never checked them. They knew we wanted compliant policies. They never told us that they weren’t checking. And they both admitted that from the stand.” (Italics added.) He also argued that Rogers made a misrepresentation because he sold the policy and was aware of the ordinances but “did nothing.” These comments are reasonably construed to argue the negligence aspect of appellants’ statements and respondents’ reliance on them, as opposed to arguing that appellants’ omissions satisfy the element of a representation of past or existing fact.

[4] We note that, outside the jury’s presence, the court warned respondents’ attorney in this regard: “’[T]here was no objection when you started talking about a failure to disclose in connection with the negligent misrepresentation claim, Mr. Thompson. [¶] And so I would be careful—very careful in not doing that again. There is no concealment claim here. There’s no fraud claim. There’s only a negligent misrepresentation claim and a negligence claim. [¶] Now, there was no objection at the time, but Mr. Addiego chose to address that in his instruction, so—but let’s be clear on that. Okay?” In light of this admonition, appellants’ claim in their appellate brief that the court “allowed” respondents to make the argument is inapt; it was appellants, in fact, who chose not to object.

[5] The evidence was that Alcatraz’s decisions on insurance plans and accounts were made by Hornblower as the parent company; representations to Hornblower personnel were therefore a substantial factor in the harm caused to Alcatraz.

[6] The $104,791.15 awarded to Alcatraz equals the sum of what Alcatraz paid the City for HCAO fees, HCAO liquidated damages, HCAO out of pocket expenses, and HCSO penalties under the settlement agreement, indicating that the jury awarded Alcatraz $0 for the amounts Alcatraz paid under the settlement agreement for HCSO payments to employees and HCAO medical premiums to employees. The $1,730,217.06 awarded to Hornblower (net of attorney fees) corresponds to Hornblower’s payments under the settlement agreement for HCAO fees, HCAO liquidated damages, HCAO out of pocket expenses, and HCSO penalties, with $0 awarded for the amounts Hornblower paid under the settlement agreement for HCSO payments to employees and HCAO medical premiums to employees.

[7] Appellants contend the business records exception was inapplicable because respondents failed to offer any witness to testify to the preparation of the invoices. (Evid. Code, § 1271.)

[8] The court in Los Angeles noted that when a legal matter remains pending and active, the attorney-client privilege encompasses everything in the invoice including the amount of aggregate fees, because an invoice showing an uptick in spending might reveal investigative efforts or strategy. (Los Angeles, supra, 2 Cal.5th at p. 297.) The court added: “The same may not be true for fee totals in legal matters that concluded long ago.” (Id. at p. 298. Italics added.) The court observed that “there may come a point when this very same information [for example, aggregate fees] no longer communicates anything privileged, because it no longer provides any insight into litigation strategy or legal consultation.” (Ibid.) Contrary to appellants’ suggestion in their reply brief, the court did not rule that descriptions of legal work lose their privileged status merely because the litigation has concluded. Obviously, the description of the work of respondents’ attorneys provides insight into litigation strategy or legal consultation.

[9] In their reply brief, appellants argue that the evidence was insufficient to uphold the award of attorney’s fees because Gray was unable to recall how much each respondent paid in attorney fees even though she suggested both Hornblower and Alcatraz had to pay. The argument is a red herring. The evidence from Gray and Warner was that the invoices were processed for payment by Hornblower, and respondents’ attorney told the jury (without objection) that the attorney fees should be awarded to Hornblower. In any event, appellants fail to explain why they are prejudiced by having to pay $500,000 to Hornblower rather than having to pay $500,000 to Hornblower in part and Alcatraz in part.

[10] Instruction No. 29 read: “Hornblower Yachts, LLC and Alcatraz Cruises, LLC claim that Administrative Solution, Inc. (“ASI”) was Brown & Brown Insurance Services of California, Inc. d/b/a Sitzmann Morris & Lavis Insurance Agency’s (“Brown & Brown”) agent and that Brown & Brown is therefore responsible for ASI’s conduct. [¶] If Hornblower Yachts, LLC and Alcatraz Cruises, LLC proves that Brown & Brown gave ASI authority to act on its behalf, then ASI was Brown & Brown’s agent. This authority may be shown by words or may be implied by the parties’ conduct. This authority cannot be shown by the words of ASI alone.” (CACI No. 3705.)

[11] In a footnote in their opening brief, appellants contend the court also erred by finding valid respondents’ settlement offer under Code of Civil Procedure section 998—and awarding expert fees to respondents post-trial —because the offer was not apportioned among appellants. Appellants provide no substantial argument to support their position, and we consider it both unpersuasive and abandoned.

* Retired Associate Justice of the Court of Appeal, Fifth Appellate District, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.