Filed 8/27/26 Horner v. Strong Wealth Management CA2/1
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION ONE
MICHAEL HORNER et al., B337039
Plaintiffs and Respondents, (Los Angeles County
Super. Ct. No. 21STCV17667)
v.
STRONG WEALTH
MANAGEMENT LLC et al.,
Defendants and Appellants.
APPEALS from a judgment and orders of the Superior
Court of Los Angeles County, Jon R. Takasugi, Judge. Affirmed
as modified.
Grignon Law Firm, Margaret M. Grignon, Anne M.
Grignon; Jones, Bell, Abbott, Fleming & Fitzgerald and Kevin K.
Fitzgerald for Defendants and Appellants.
Ervin Cohen & Jessup, Michael C. Lieb and Zoe M. Vallier
for Plaintiffs and Respondents.
_________________________
In August 2019, plaintiff Michael Horner, who was 83 years
old at the time, entrusted defendant George G. Strong III and his
financial management company, Strong Wealth Management
LLC (Strong Wealth) with responsibility for managing an
investment portfolio valued at $2,616,421. Over the next 16
months, as the stock market thrived, Horner’s portfolio did not.
By December 1, 2020, the value of the portfolio had dropped more
than 80 percent, to $475,099.23, compared with an increase of 27
percent in the Standard & Poor’s 500 index over the same time
period.
Horner and his son Thomas, as trustees of their family
trust (collectively Horner), sued Strong and Strong Wealth
(collectively Strong) alleging several causes of action arising from
Strong’s management of the portfolio. After a bench trial, the
court found Strong liable for breach of fiduciary duty, negligence,
breach of contract, and financial elder abuse.
In this appeal, Strong challenges the last of those findings.
He argues that financial elder abuse applies only where a
defendant “[t]akes, secretes, appropriates, obtains, or retains real
or personal property of an elder or dependent adult” (Welf. &
Inst. Code, § 15610.30, subd. (a)(1)),1 and he claims that even if
he mismanaged Horner’s account, he did not take property from
him, nor did he benefit from Horner’s loss. Strong also contends
the trial court erred by awarding double damages under Civil
Code section 3345 and by awarding prejudgment interest on the
entire amount of the judgment, rather than the amount
attributable to compensatory damages alone.
1 Unspecified statutory references are to the Welfare and
Institutions Code.
2
We agree with Strong as to the amount of prejudgment
interest. Otherwise, we affirm the judgment, as we explain
below.
FACTUAL BACKGROUND AND PRIOR PROCEEDINGS
The following account is drawn primarily from the trial
court’s factual findings at the conclusion of the bench trial.
Horner and his late wife created a living trust in 1995 and
placed their assets in it. Horner managed the investments in the
trust for decades, but in 2019, he decided that they were taking
up too much of his time and proving too stressful. He elected to
turn over management of his portfolio to Strong, a financial
advisor he had recently met at a car show. Both Horner and
Strong believed the stock market was overheated and due for a
correction.
Horner told Strong he wanted to withdraw $10,000 per
month from the portfolio to pay his living expenses. In
questionnaires Horner filled out in July and August 2019, he
indicated that his primary objectives were income and capital
preservation, and that he did not mind if his returns lagged the
market so long as he was protected against significant losses.
Apparently, Strong did not review these forms. He testified at
his deposition that he was seeing them for the first time. In an
email to Strong, Horner listed a series of positions he wanted
Strong not to sell, and to add to if possible, including shares of
Amazon, Apple, Costco, and Visa.
Strong moved Horner’s account to an online brokerage
called Interactive Brokers for trading. Interactive Brokers’s
software limited the types of trades available to an account based
on the account’s objectives. If an account listed its goals as
preservation of capital or income, the software would not allow
3
the account to engage in most options trading. Initially, Horner’s
Interactive Brokers account listed his objectives as trading and
hedging, and by the first quarter of 2020 included speculation.
These objectives did allow for trading options. Horner denied he
authorized these changes to his account objectives. Strong
testified that Horner agreed to the changes. The trial court
stated that it did “not doubt [Strong] explained the need” for the
changes, but noted that Strong “is a real fast talker and
somewhat difficult to follow.”
For the first few months under Strong’s management,
Horner’s portfolio underperformed the market but still eked out
positive returns. In the fourth quarter of 2019, Horner’s account
gained 1.17 percent, while the S&P 500 gained nearly 10 percent.
The following quarter, the portfolio lost 21.8 percent, roughly in
line with the market as a whole, which dropped significantly with
the advent of the COVID-19 pandemic. But from that point
forward, the losses grew steeper even as the overall stock market
rebounded. In the second quarter of 2020, the portfolio lost 35.4
percent, while the S&P 500 gained about 20 percent. The
following quarter, the portfolio lost an additional 59.82 percent,
compared with a gain of almost 9 percent for the S&P 500. As
the losses piled up, Strong sold shares of the companies Horner
had previously directed Strong not to sell.2
2 Because of the sheer volume of Strong’s trading and his
employment of options, it is difficult to determine from the record
exactly when and in what circumstances these shares were sold,
but in August 2019, Horner held 90 shares of Amazon, 3,200
split-adjusted shares of Apple, 300 shares of Costco, and 200
shares of Visa in his two investment accounts. By the end of
September 2020, according to the third-quarter portfolio report
4
After seeing the account statement for the third quarter of
2020, Horner told Strong to stop options trading and to unwind
the account. By December 1, 2020, Horner was left with
$475,009.23, a decline of over 80 percent from the account
balance when Strong took control of the account less than 18
months earlier. In that time, Strong had traded more than
10,000 times in the account.
In May 2021, Horner sued Strong, alleging causes of action
for fraud, breach of fiduciary duty, negligence, breach of contract,
and financial elder abuse.
After a bench trial, the court found in favor of Horner on all
causes of action except for fraud. In the court’s view, “what
[Strong] did could only be described as having an escalating
manic episode which led him to gamble with other people’s
money” (fn. omitted), and even Strong’s own expert witness could
not explain Strong’s trades. The court found Strong breached his
duty of care because his “investment strategy did not seem to fall
within the reasonable scope of a competent investment strategy.
It was completely contrary to Mr. Horner’s stated investment
objectives, reckless, violated his request to hold certain stocks,
and at times did not make a lot of logical sense.” The court found
Strong breached his contract with Horner, which required it to
“ ‘supervise and direct the investments of the [a]ccount in
from Interactive Brokers, he held 40 shares of Amazon, 1,000
shares of Apple, 100 shares of Costco, and no shares of Visa. We
take judicial notice of Apple’s 4-for-1 stock split on August 31,
2020. (Apple Inc., Current Report (Form 8-K) (July 30, 2020)
exhibit 99.1
<https://www.sec.gov/Archives/edgar/data/320193/0000320193200
00060/a8-kexhibit991q3202062.htm> [as of Aug. 26, 2026].)
5
accordance with the investment objectives of” Horner.
Nevertheless, Strong’s conduct did not amount to fraud because
there was no evidence of misrepresentation or an intent to
defraud.
Finally, the court found that although Strong “did not take
or retain any of . . . Horner’s property nor did he obtain any
benefit from his actions,” he “ ‘wrongful[ly] used’ . . . Horner’s core
holdings he was under contract to hold” by selling call options
that forced Horner to sell the stocks Horner did not want sold
when the price rose above a certain level.
The court found that Horner suffered $2,556,040.20 in
damages, which the court calculated by comparing the actual
balance in Horner’s account at the end of Strong’s management
against the amount that would have been in the account if Strong
had made no trades at all, but had simply left the account as he
found it.3 The court concluded that because of the finding of
financial elder abuse, Civil Code section 3345 allowed for an
award of up to treble damages. Nevertheless, because Strong did
not benefit from the mismanagement of Horner’s portfolio, nor
did he target Horner because of his age, the court elected to
award only double damages. The court found punitive damages
were appropriate under Civil Code section 3294, subdivision (a)
because Horner had shown by clear and convincing evidence that
Strong’s actions were malicious, in that he acted “with a willful
and conscious disregard of the rights or safety of” Horner, and
oppressive, in that Strong engaged in “despicable conduct that
3 The court adjusted the amount of damages to account for
Horner’s withdrawals from the account and Strong’s
management fees.
6
subjected . . . Horner to cruel and unjust hardship in conscious
disregard of his rights.” The court decided not to impose any
additional damages to avoid making Horner endure an additional
phase of the trial, and in recognition that the enhanced financial
elder abuse award already adequately punished Strong’s
misconduct.
In addition to the $5,112,080.40 in doubled damages, the
court awarded Horner $970,596 in prejudgment interest,
resulting in a total award of $6,082,676.40. The trial court also
awarded Horner $740,859.20 in attorney fees under section
15657.5, subdivision (a). Strong timely appealed.4
4 Strong’s notices of appeal include both the judgment and
orders dated February 7, 2024, denying his motion for a new trial
and his motion to vacate the judgment. “An order denying a
motion for a new trial is not appealable; however, it is reviewable
on appeal from the underlying judgment.” (Audish v. Macias
(2024) 102 Cal.App.5th 740, 746, fn. 2.) Similarly, an order
denying a motion to vacate a judgment is generally not
appealable where it does not decide new issues and affirms the
judgment’s validity; “ ‘otherwise, an appellant would receive
“either two appeals from the same decision, or, if no timely
appeal has been made, an unwarranted extension of time in
which to bring the appeal.” ’ ” (311 South Spring Street Co. v.
Department of General Services (2009) 178 Cal.App.4th 1009,
1014.) We do not further address the orders on the new trial and
judgment vacatur motions as Strong makes no arguments
concerning those orders distinct from the ones he makes
regarding the judgment itself.
7
DISCUSSION
A. The Trial Court Did Not Err by Finding Strong
Committed Financial Elder Abuse
Strong does not challenge the court’s findings on breach of
contract, breach of fiduciary duty, or negligence, but he does
contend the trial court erred by finding he committed financial
elder abuse. Financial elder abuse is defined in section 15610.30,
part of the Elder Abuse and Dependent Adult Civil Protection Act
(§§ 15600-15675). “ ‘Financial abuse’ of an elder . . . occurs when
a person” “[t]akes, secretes, appropriates, obtains, or retains real
or personal property of an elder or dependent adult for a wrongful
use or with intent to defraud, or both.” (§ 15610.30, subds. (a),
(a)(1).) In the course of ruling on the elder abuse claim, the trial
court found that Strong “did not take or retain any of . . .
Horner’s property nor did he obtain any benefit from his actions.”
Thus, Strong argues, he cannot be liable under the statute.
Strong’s suggestion notwithstanding, one cannot read the
trial court’s statement to mean that the court made a legal
conclusion that Strong did not “[t]ake[], secrete[], appropriate[],
obtain[], or retain[] real or personal property of an elder”
(§ 15610.30, subd. (a)(1)), as that would be inconsistent with the
court’s finding that Strong was liable for financial elder abuse.
The court began its analysis of the financial elder abuse claim by
quoting section 15610.30 at length and citing the CACI
instruction (CACI No. 3100) setting forth the elements a plaintiff
must meet for a claim under that section. As the court noted
(and here we quote its statement of decision), one of those
elements is in the alternative: the plaintiff must show “that the
defendant took or retained the property for a wrongful use or
with the intent to defraud.” (Italics added.) In discussing this
8
element, the court took the options in reverse order and first
reiterated its finding that “there is insufficient evidence of an
intent to defraud” because Strong “went down the same path of
financial destruction with all of his clients’ holdings” and “did not
take or retain any of . . . Horner’s property nor did he obtain any
benefit from his actions.” The court then found liability based on
the alternate ground that Strong took or retained Horner’s
property for a wrongful use.
Thus, read in context it is clear the court’s statement on
which Strong relies meant that Strong did not directly take or
retain Horner’s money for himself, not that Strong did not take or
retain Horner’s money for any purposes whatsoever. In that
sense, the court’s statement is undisputed. Horner does not
allege that Strong diverted or kept any of Horner’s assets. It is
similarly undisputed that Horner gave his money to Strong to
manage, and that Strong took that money, constructively
retained it in an investment account Strong controlled, and made
decisions about how Horner’s funds would be deployed. As the
court set forth in the statement of decision, section 15610.30
states that “[f]or purposes of this section, a person or entity takes,
secretes, appropriates, obtains, or retains real or personal
property when an elder or dependent adult is deprived of any
property right, including by means of an agreement, donative
transfer, or testamentary bequest, regardless of whether the
property is held directly or by a representative of an elder or
dependent adult.” (Id., subd. (c), italics added.) In finding Strong
liable for financial elder abuse, the court necessarily concluded
that Strong was liable for financial elder abuse because he
“deprived [Horner] of [a] property right.” (Ibid.)
9
This broader definition of taking or depriving is crucial. As
Horner aptly summarizes, it means that “[t]he focus of the [e]lder
[a]buse statute is not on what the abuser gets; it is on what the
elder loses.” Several cases have affirmed this interpretation. For
example, in Mahan v. Charles W. Chan Ins. Agency, Inc. (2017)
14 Cal.App.5th 841, the court held that section 15610.30,
subdivision (c) allows for liability for financial elder abuse even if
the defendant did not take any property directly from the victim.
The plaintiffs in Mahan alleged that the defendants wrongfully
convinced them to sell their insurance policies and replace them
with more expensive, less valuable policies. The court reasoned
that because the complaint alleged that the defendants “steered
the [plaintiffs] into transactions that, in effect, destroyed the
value they intended to convey to their children when they chose
[the original] insurance policies as their preferred form of gift
asset, we think the [complaint] alleges a legally cognizable
‘depriv[ation]’ of a ‘property right’ under the language of section
15610.30, subdivision (c).” (Mahan, supra, at p. 862.) The court
reasoned that “nothing in the text of the statute requir[es]” “that
a deprivation must involve the direct taking by one person of the
property of another.” (Id. at pp. 862, 861.)
The court in Ring v. Harmon (2021) 72 Cal.App.5th 844
likewise placed the emphasis on the loss by the victim rather
than the gain by the defendant. In the court’s view, the key
question was, “[d]id [the plaintiff] plead facts showing that she,
in her individual capacity, has ‘any property right’ cognizable
under section 15610.30, and was she deprived of it by
respondents?” (Id. at p. 853, fn. omitted.) The defendants were
alleged to have reduced the value of the plaintiff’s home by
burdening it with additional debt, and the court concluded “[t]hat
10
reduction in value alone is enough to support the conclusion that
[the plaintiff], in her individual capacity, has been deprived of a
cognizable property right.” (Id. at p. 855.) Similarly, in Bounds
v. Superior Court (2014) 229 Cal.App.4th 468, the defendants
argued they could not be liable for elder abuse because they did
not obtain the plaintiff’s property—the sale of the plaintiff’s
property was stopped while the transaction was in escrow. The
court disagreed, reasoning that the plaintiff had stated a cause of
action for financial elder abuse because the execution of escrow
instructions impaired the plaintiff’s property rights by interfering
with her right to dispose of the property to someone else. (Id. at
pp. 479-480.) Finally, in Cameron v. Las Orchidias Properties,
LLC (2022) 82 Cal.App.5th 481, the court held that the defendant
committed elder abuse by denying the tenant’s effort to return to
her former home. (Id. at pp. 507-510.) Through a combination of
state and municipal law, the tenant was entitled to reinstitute
her former tenancy at her previous rental rate after her landlord
withdrew her home from the rental market, then sought to re-
rent it. (See id. at pp. 499-500.) In this case, as in the others, the
focus was on the plaintiff’s loss of her property right rather than
on what the defendant took.
Strong argues these cases are not dispositive because in
each of them the deprivation of a property right “worked directly
to the benefit of” the defendants. (Ring v. Harmon, supra, 72
Cal.App.5th at p. 856.) In Ring, the defendants received about
$18,000 in fees from the $200,000 loan the plaintiff took out. (Id.
at p. 849.) In Mahan, the defendants received commissions for
selling the plaintiffs the disadvantageous insurance contracts.
(Mahan v. Charles W. Chan Ins. Agency, Inc., supra, 14
Cal.App.5th at p. 865.) In Bounds, the defendants would have
11
obtained the property at issue for what the plaintiff alleged was
“ ‘a remarkable bargain price.’ ” (Bounds v. Superior Court,
supra, 229 Cal.App.4th at p. 474.) In Cameron, the defendant
landlord intended to rent the property to a different tenant on
more favorable terms in the hope of increasing the value of the
property. (Cameron v. Las Orchidias Properties, LLC, supra, 82
Cal.App.5th at p. 495.) In this case, by contrast, Strong’s
compensation was based on the value of the assets he managed.
When the value of Horner’s account decreased, Strong earned
lower fees.
On the facts before us, we are not persuaded this
distinction makes a difference. Although it is hardly surprising
that most people who commit financial elder abuse do so for their
own material benefit, nothing in the text of section 15610.30
implies that that must be their motivation. As Horner points out,
if Strong’s theory was accepted, it would mean that a defendant
who threw an elder’s property into a lit fireplace would not be
liable for elder abuse because the defendant would have obtained
no financial benefit. Strong objects that the defendant in that
scenario would be liable despite the lack of financial benefit
because it “would . . . constitute a direct and permanent taking of
the elder’s property.” But we see no reason why a personal
benefit is required for financial elder abuse to apply to an indirect
taking; as with a direct taking, an indirect taking suffices so long
as an elder “is deprived of [a] property right” (id., subd. (c)) as a
result of the defendant’s action, as occurred here when Strong
was given Horner’s portfolio and used it (in breach of his
fiduciary duty) to engage in risky options trading that largely
obliterated Horner’s savings. Although Strong did not gain
financially by causing Horner to lose money, he had a financial
12
incentive to take the actions he did. Unless it was essentially
compulsive gambling, the only explanation for Strong’s
increasingly desperate options trading appears to have been a
desire to recover from the earlier losses in the hope of retaining
Horner’s business, which would earn Strong greater fees from
Horner in the future.5
“Where there is room for debate regarding the meaning of
the statutory text of the [Elder Abuse and Dependent Adult Civil
Protection] Act, it should be ‘ “liberally construed on behalf of the
class of persons it is designed to protect,” ’ and in a manner
compatible with its ‘overall remedial purpose.’ ” (Ring v.
Harmon, supra, 72 Cal.App.5th at p. 853.) The purpose of the
financial elder abuse statutes, of course, is to protect elders from
financial predation. The court in Mahan reviewed the history of
these laws, which showed a continuous expansion over the
decades to encompass ever more forms of financial abuse. (See
Mahan v. Charles W. Chan Ins. Agency, Inc., supra, 14
Cal.App.5th at pp. 858-860.)
Strong has provided us with the legislative history of
Senate Bill No. 1140,6 the 2008 legislation that added subdivision
(c) in its current form to section 15610.30, thus expanding the
definition of “takes, secretes, appropriates, obtains, or retains
5 Horner’s trading activity grew as the losses mounted. In
the portfolio report for the fourth quarter of 2019, the first full
quarter under Strong’s management, the section detailing
Strong’s trades is 20 pages long. The equivalent report for the
third quarter of 2020, the last full quarter under Strong’s
management, includes over 200 pages of trades.
6 We grant Strong’s request for judicial notice of these
documents.
13
real or personal property” to include situations “when an elder or
dependent adult is deprived of any property right, including by
means of an agreement, donative transfer, or testamentary
bequest, regardless of whether the property is held directly or by
a representative of an elder or dependent adult.” (Ibid.) Strong
argues the purpose of this change was merely to allow for liability
when a defendant takes property from a victim indirectly, by
means of an agreement or donative transfer. That tells only part
of the story. Prior to Senate Bill No. 1140, financial elder abuse
required a showing that the defendant acted in bad faith. The
new version of the law requires only that “the person . . . knew or
should have known that [his] conduct is likely to be harmful to
the elder or dependent adult.” (§ 15610.30, subd. (b).) Senate
Bill No. 1140 also added undue influence as a basis of financial
elder abuse and provided for awards of attorney’s fees. The
legislative history contains no explanation of the inclusion of the
phrase “is deprived of any property right” in the new version of
section 15610.30, subdivision (c), but the language is consistent
with the Legislature’s evident desire to expand seniors’ protection
from financial abuse. Strong’s interpretation of the statute would
be contrary to this purpose.
Strong raises additional objections to the trial court’s
decision. He argues that a decrease in the value of an investment
does not constitute taking an elder’s property right. But as the
trial court noted, Strong did not merely cause a decrease in the
value of an asset. Instead, his sales of call options directly
resulted in the sale of shares of stock that Horner had instructed
him not to sell, causing Horner financial losses.
Strong also argues he did not commit elder abuse because
he treated Horner no differently than his younger clients, most of
14
whom also lost money when Strong applied the same trading
gambits to their accounts. Strong is correct that financial
institutions do not owe special duties to customers who are over
65 years old. (Hilliard v. Harbour (2017) 12 Cal.App.5th 1006,
1015-1016.) In Hilliard, the plaintiff was the principal
shareholder of a corporation that borrowed money from the
defendant bank. The loan went into default, and the bank
ultimately assigned it to a third party. (Id. at pp. 1008-1010.)
The court held the plaintiff lacked standing to sue because the
bank had taken action against the corporation, not the plaintiff
himself. (Id. at p. 1015.) In dicta, the court expressed skepticism
that the bank’s ordinary actions in seeking payment on its loan
could constitute a tort simply because the customer was over age
65, noting “that ‘ “[i]t is simply not tortious for a commercial
lender to lend money, take collateral, or to foreclose on collateral
when a debt is not paid [because a] commercial lender is
privileged to pursue its own economic interests and may properly
assert its contractual rights.” ’ ” (Id. at p. 1016.) This does not
imply that a defendant who does commit a tort against an elder—
such as Strong’s breach of fiduciary duty—is not liable for
financial elder abuse unless he intentionally targeted the victim
because of his age. Strong cites no statute or case law suggesting
otherwise, and we are aware of none. We recognize that not
every wrong committed against someone who is over age 65
constitutes elder abuse. (Paslay v. State Farm General Ins. Co.
(2016) 248 Cal.App.4th 639, 658.) But the court did not err in
finding Strong liable here because he “reasonably should [have]
be[en] aware of the harm[]” he caused by his breach of fiduciary
duty. (Ibid.) Strong engaged in trading strategies involving the
stocks Horner directed not be sold that caused those stocks to be
15
sold, which the court found to be malicious, oppressive, and
despicable conduct.7
B. Strong’s Challenges to the Amount of the Judgment
Strong raises two additional arguments for the first time on
appeal, one regarding the doubling of the compensatory damages
award and one regarding the calculation of prejudgment interest.
Horner argues we should deem these arguments forfeited and
disregard them; he makes no attempt to defend the merits of the
trial court’s decisions on these two issues. We reach different
conclusions with respect to these claims, as we now explain.
1. Strong Forfeited His Objection to the Doubling of
Damages
The first claim of forfeiture applies to Strong’s argument
that the trial court erred by awarding Horner double damages
under Civil Code section 3345. From the outset, Horner pursued
two separate theories to obtain an award in excess of
compensatory damages. First, he sought punitive damages under
Civil Code section 3294, which provides that “[i]n an action for
the breach of an obligation not arising from contract, where it is
proven by clear and convincing evidence that the defendant has
been guilty of oppression, fraud, or malice, the plaintiff, in
addition to the actual damages, may recover damages for the
sake of example and by way of punishing the defendant.” (Id.,
subd. (a).) Second, Horner sought damages under Civil Code
7 Strong argues that if we reverse the court’s finding that
he committed financial elder abuse we must also reverse the
order awarding Horner attorney’s fees. Because we reject
Strong’s arguments on financial elder abuse, we likewise reject
his claim regarding attorney’s fees.
16
section 3345, which allows trial courts to award up to treble
damages in actions brought by senior citizens “to redress unfair
or deceptive acts or practices or unfair methods of competition.”
(Id., subd. (a).)
Horner mentioned both of these theories in his complaint,
trial brief, opening statement at trial, and post-trial closing
briefs. In almost every instance, and especially in the post-trial
briefing, Horner presented treble damages under Civil Code
section 3345 and punitive damages under Civil Code section 3294
as alternative methods for reaching a similar result. In his final
post-trial brief, Horner wrote, “With the right to treble damages
under [Civil Code s]ection 3345 undisputed, the [c]ourt can either
award additional damages under that statute or schedule a
[p]hase [two] hearing to consider the imposition of punitive
damages under [Civil Code s]ection 3294. But Strong absolutely
should be punished.”
In its proposed statement of decision, the trial court
awarded Horner additional damages under both theories,
including double damages under Civil Code section 3345 and $3
million more in punitive damages under Civil Code section 3294.
The court invited the parties to submit their objections to the
proposed statement of decision, and Strong objected to the
punitive damages on the ground that Horner had produced no
evidence of Strong’s financial condition, which is required for an
award of punitive damages. Strong did not argue that Civil Code
section 3345 does not apply to the type of damages the court
indicated it intended to award Horner.
In response to Strong’s objections, Horner proposed that
the court do one of two things: (1) amend the statement of
decision to eliminate the $3 million punitive damages award, and
17
instead to award treble damages under Civil Code section 3345,
with the goal of avoiding a phase two trial on Strong’s ability to
pay because of “Horner’s advanced age”; or (2) award double
damages under Civil Code section 3345 and conduct a phase two
trial on punitive damages. In its final statement of decision, the
trial court awarded double damages under Civil Code section
3345, but it eliminated the punitive damages award in order “not
to further prolong proceedings with a [p]hase [two] punitive
damages trial.” The court reasoned that “[t]he findings of
malicious and oppressive conduct are adequately addressed by
the enhanced financial elder abuse award.”
In his opening appellate brief, Strong makes arguments for
the first time that the damages awarded to Horner in this case
were not subject to augmentation under Civil Code section 3345.
The statute applies to actions brought by senior citizens “to
redress unfair or deceptive acts or practices or unfair methods of
competition” (id., subd. (a)), but it allows an increase in the
amount of “a fine, or a civil penalty or other penalty, or any other
remedy the purpose or effect of which is to punish or deter” (id.,
subd. (b), italics added). Our Supreme Court has held that treble
damages apply “only if the statute under which recovery is
sought permits a remedy that is in the nature of a penalty.”
(Clark v. Superior Court (2010) 50 Cal.4th 605, 614.) Because the
trial court awarded Horner compensatory damages based on the
amount of the loss Strong caused (see § 15657.5, subd. (a)),
Strong argues the trial court lacked authority to award increased
damages under Civil Code section 3345. Strong further contends
that Civil Code section 3345 requires that a defendant direct
their conduct at senior citizens, which he did not.
18
The defendants acknowledge that they failed to raise these
issues before the trial court,8 but they argue we should overlook
the forfeiture because this is a purely legal question, the
underlying facts are undisputed, and it is an issue of first
impression. (See De Anza Santa Cruz Mobile Estates
Homeowners Assn. v. De Anza Santa Cruz Mobile Estates (2001)
94 Cal.App.4th 890, 906-908.) We decline to exercise our
discretion to decide this question on the merits because of the
obvious prejudice it would impose on Horner. As just explained,
Horner pursued additional damages along two parallel paths:
Civil Code sections 3294 and 3345. The record regarding
punitive damages under Civil Code section 3294 remains
undeveloped because the court found the doubling of damages
under Civil Code section 3345 (which resulted in an award
approximately $2.5 million above and beyond compensatory
damages) sufficiently punished Strong such that a punitive
damages phase was not necessary, and Horner decided that he
was satisfied with that outcome and did not press his punitive
damages claim further (either with the trial court, or by
8 Strong did object to the award of double damages before
the trial court on a different ground. Civil Code section 3345
applies in actions “to redress unfair or deceptive acts or practices
or unfair methods of competition” (id., subd. (a)), and Strong
argued that the trial court had not found he engaged in those
kinds of practices. He reasserts this claim on appeal, but we
disagree. Although the trial court did not use the phrase
“deceptive acts or practices” in its statement of decision, it is
implicit in the court’s finding that Strong agreed not to sell
certain stocks from Horner’s portfolio but then entered into
options trades that required those shares to be sold. That
conduct qualifies.
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appealing after the final statement of decision), expressly noting
his advanced age. To reverse the award under Civil Code section
3345 at this late stage would pull the rug out from under Horner,
who is even more elderly now than when the court decided
(without objection) that a punitive damages phase was not
necessary because of the double damages.
2. The Award of Prejudgment Interest Must be Reduced
Horner also asserts Strong forfeited his objection to the
trial court’s award of prejudgment interest. Civil Code section
3288 allows courts to award prejudgment interest “[i]n an action
for the breach of an obligation not arising from contract, and in
every case of oppression, fraud, or malice.” Our Supreme Court
has held that interest under this statute is available only for
economic losses resulting from the defendant’s tortious
deprivation of the plaintiff’s property: “The award of such
interest represents the accretion of wealth which money or
particular property could have produced during a period of loss.”
(Greater Westchester Homeowners Assn. v. City of Los Angeles
(1979) 26 Cal.3d 86, 102-103.) This restriction applies even
where the defendant’s damages are based on malice, fraud or
oppression. (See Nordahl v. Department of Real Estate (1975) 48
Cal.App.3d 657, 665 [“When, by virtue of the fraud or breach of
fiduciary duty of the defendant, a plaintiff has been deprived of
the use of his money or property and is obliged to resort to
litigation to recover it, the inclusion of interest in the award is
necessary in order to make the plaintiff whole”].) In a similar
context, our Supreme Court has held that prejudgment interest
for personal injury under Civil Code section 3291 does not apply
to punitive damages. (Lakin v. Watkins Associated Industries
(1993) 6 Cal.4th 644, 662.)
20
Strong is correct that the trial court erred by awarding
prejudgment interest on the entire damages award, rather than
only the portion attributable to economic damages. In this
instance, the case for enforcing the forfeiture rule is weaker.
This is a purely legal issue, the calculation is straightforward,
and correcting the amount of interest will not result in further
proceedings or prejudice distinct from the correction. Because
interest is available on only the one-half of the award
attributable to compensatory damages ($2,556,040.20 instead of
$5,112,080.40), as Horner himself recognized in the calculation
he provided to the court, the amount of interest must be cut in
half, from $970,596 to $485,298.
We do not agree with Horner that Strong invited the error.
Horner is correct that it was Strong who initially proposed that
the aggregate award to Horner should be $6,082,676.40, which
implicitly included $970,596 in prejudgment interest. But Strong
did so in the context of Horner’s effort to obtain a much higher
award. The failure to seek a reduction in the amount of
prejudgment interest appears to have been an oversight rather
than an attempt to take advantage of the court’s error. In
addition, as just mentioned, Horner’s posttrial briefing requested
interest only on the base compensatory damages award. The
award of prejudgment interest on the entire award appeared for
the first time in the trial court’s final statement of decision.
Although it would have been preferable for Strong to have called
the error to the attention of the trial court, no sufficient reason
exists for us not to correct it now.
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DISPOSITION
The amount of prejudgment interest is reduced from
$970,596 to $485,298, and the trial court is directed to issue an
amended judgment reflecting that reduction. The judgment is
otherwise affirmed, as is the order awarding attorney’s fees.
Respondents are awarded their costs on appeal.
NOT TO BE PUBLISHED
WEINGART, J.
We concur:
ROTHSCHILD, P. J.
M. KIM, J.
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