Efd USA, Inc. v. Band Pro Film and Digital, Inc. (2026)

Case details
Full caption
EFD USA, INC., et al. v. Band Pro Film and Digital, Inc., et al.
Country
United States
Jurisdiction
California (CA)
Court
California Supreme Court
Decided
2026
Disposition
Affirmed in Part, Reversed in Part
Majority
Hanasono (J.) (unanimous Court)
EFD USA, INC., et al., Plaintiffs and Appellants, v. BAND..., Not Reported in... © 2026 Thomson Reuters. No claim to original U.S. Government Works.12026 WL 457265Not Officially Published(Cal. Rules of Court, Rules 8.1105 and 8.1110, 8.1115)Only the Westlaw citation is currently available.California Rules of Court, rule 8.1115, restrictscitation of unpublished opinions in California courts.NOT TO BE PUBLISHED INTHE OFFICIAL REPORTSCourt of Appeal, Second District, California.DIVISION THREE.EFD USA, INC., et al., Plaintiffs and Appellants,v.BAND PRO FILM AND DIGITALINC., et al., Defendants and Respondents.B329314|Filed 2/18/2026Editor's Note: This decision contains discussion of citationreferences that are incorrect or do not actually exist. Theseinvalid citations appeared in the original court opinion andhave been preserved as written since they are part of theofficial record. Any links to these invalid citations have beenremoved.APPEAL from judgment and an order of the Superior Courtof Los Angeles County, Daniel S. Murphy and MichaelLinfield, Judges. Affirmed. (Los Angeles County Super. Ct.No. BC661332)Attorneys and Law FirmsAzar Law Group, David E. Azar; Keiter Appellate Law andMitchell Keiter, for plaintiffs and appellants EFD USA, Inc.and Georgina Teran.Enenstein Pham Glass & Rabbatt, Teri T. Pham and MatthewW. Rosene, for defendants and respondents Band Pro Film &Digital, Inc., Direct Video Warehouse, Inc., and Amnon Band.OpinionHANASONO, J.*1 Plaintiff EFD USA, Inc. (EFD) appeals from thejudgment entered following a jury trial and a bench trialon its claims against defendants Band Pro Film & Digital,Inc. (Band Pro), Amnon Band (Band), and Direct VideoWarehouse, Inc. (DVWI) (together, the Band Defendants),and Brandon Brooks. A jury awarded EFD all damagesit requested, and the trial court awarded EFD additionaldamages based on a restitution claim. On appeal, EFD arguesthat the trial court erred by offsetting those damages basedon a pretrial settlement. In addition, EFD challenges thetrial court's resolution of its unfair competition law (UCL)claims following a bench trial, the court's denial of its requestfor prejudgment interest, and several factual findings in thestatement of decision.EFD separately appeals from a default judgmententered against defendant GroundSeven Ventures, Inc.(GroundSeven) and an order denying its motion for a newtrial. EFD contends the award as to GroundSeven wasinadequate.For the reasons discussed herein, we affirm.FACTUAL AND PROCEDURAL BACKGROUNDI. The underlying disputeEFD is a television and film production company. Amongother things, EFD purchases and leases cinematographyequipment and rents the equipment to other entities.EFD began leasing equipment from Band Pro in 2012. Theleases involved financing agreements. Band Pro employeeBrandon Brooks managed some of the transactions. Some ofthe transactions involved DVWI, which is owned by Band.Greg Bisel, AKT Enterprises LLC (AKT), MaxPro LeasingLLC, and Technijian Inc. (together, the Bisel Defendants)were also involved in some transactions.In 2017, EFD and its owner and operator, Georgina Teran,sued the Band Defendants, Brooks, the Bisel Defendants,and several Does. In the operative amended complaint, EFDbrought claims against all defendants for fraud, negligentmisrepresentation, aiding and abetting fraud, a violation ofCalifornia's Unfair Competition Law (UCL) (Bus. & Prof.Code § 17200 et seq.), breach of fiduciary duty, breach ofimplied contract, intentional interference with prospectiveeconomic relations, and money had and received.1 Thecomplaint alleged that “each Defendant acted as the actualor ostensible agent, employee, and/or co-conspirator of eachother Defendant and, in performing the actions alleged
EFD USA, INC., et al., Plaintiffs and Appellants, v. BAND..., Not Reported in... © 2026 Thomson Reuters. No claim to original U.S. Government Works.2herein, acted within the course and scope of such agency,employment, and/or conspiracy.” The complaint furtheralleged that defendants’ conduct caused damages to EFDexceeding $2 million.EFD brought a separate claim for breach of an impliedcontract against Band Pro and DVWI, and a conversion claimagainst the Bisel Defendants. Finally, EFD and Teran broughtclaims for civil extortion and defamation against Band Proand Band.Plaintiffs later named GroundSeven as a Doe defendant. Therecord on appeal does not include an amended complaint orother filing reflecting what specific claims or facts, if any,plaintiffs alleged as to GroundSeven.II. Settlement with the Bisel Defendants*2 EFD executed a “full and complete settlement” of itsclaims against the Bisel Defendants for $375,000 in June 2021(the Bisel Settlement). The Bisel Settlement also resolveda cross-complaint filed by AKT and a separate invasion ofprivacy lawsuit that Bisel had filed against EFD and Teran.The trial court granted plaintiffs’ unopposed motion fora determination of good faith settlement with the BiselDefendants. (Code Civ. Proc., § 877.6.)2 In the motion,plaintiffs asserted: “No allocation is required here, as theinterests of both plaintiffs are aligned, as Teran is EFD'sfounder, President, and CEO of EFD.” Neither the motion northe order discussed allocation any further.III. Resolution of plaintiffs’ remaining claimsThe trial court granted the Band Defendants’ motion forsummary adjudication on plaintiffs’ claims for civil extortionand defamation. That ruling resolved all claims brought byTeran.EFD proceeded to a jury trial against Band, Band Pro, andBrooks on its claims for fraud, aiding and abetting fraud, andmoney had and received. At trial, EFD focused on 16 specifictransactions and asked the jury to award it $109,958.17 ineconomic damages. On October 19, 2022, the jury foundBand Pro and Brooks liable on all three counts and foundBand liable for aiding and abetting fraud. The jury awardedEFD $109,958.17. The special verdict attributed $49,481.176to Band Pro, $49,481.176 to Brooks, and $10,995.817 toBand.3 The jury also awarded EFD prejudgment interest.On November 4, 2022, the Band Defendants moved to offsetthe jury's damages award under section 877. That statuteprovides that a good faith settlement with one defendant“shall reduce” a judgment against nonsettling joint tortfeasors“claimed to be liable for the same tort.” (§ 877.) The motionargued that all defendants were “claimed to be liable” forthe claims that proceeded to trial because the complaintbrought those claims against all defendants and alleged thatall defendants were one another's agents, principals, and co-conspirators. Thus, the motion asserted that the judgmentshould be reduced by the amount of the Bisel Settlement.EFD's opposition argued that section 877 is inapplicable.It contended that each disputed transaction was a separateinjury and a separate tort, and “there was no claim” thatthe nonsettling defendants were liable for the transactionsresolved by the Bisel Settlement. Alternatively, the oppositionargued that even if section 877 applied, the Bisel Settlementhad been allocated to about 40 transactions. The oppositionasserted that if the Bisel Settlement had not already beenallocated, the court should allocate that settlement. Insupport of the opposition, Teran and EFD's damages expert,Jeffrey Bussell, both declared that they understood the BiselSettlement to cover 38 specific transactions but not the 16transactions addressed at trial.In its statement of decision, the trial court granted the BandDefendants’ request for an offset. The court recognizedthat EFD proceeded to trial on claims brought against alldefendants, and that EFD alleged that all defendants actedas the “agent, employee, and/or coconspirator of each otherDefendant” in committing the acts identified in the complaint.Because the Band Defendants and Brooks were nonsettlingtortfeasors whom EFD claimed to be liable for the same torts,the trial court concluded that section 877 required an offset.*3 The court recognized that an offset may be allocatedto certain causes of action. However, it determined thatEFD presented no evidence that the Bisel Settlement hadbeen allocated, and the court declined to consider the post-settlement declarations offered by EFD. Therefore, the courtgranted the motion for a section 877 offset and reduced EFD'sdamages by the amount of the Bisel Settlement, to zero.The statement of decision also concluded that EFD wasentitled to compound prejudgment interest. However, sincethe judgment was fully offset by the Bisel Settlement, the
EFD USA, INC., et al., Plaintiffs and Appellants, v. BAND..., Not Reported in... © 2026 Thomson Reuters. No claim to original U.S. Government Works.3court determined that there was no balance on which interestcould have accrued.Next, the statement of decision addressed EFD's UCL claims,which the court heard in a bench trial. The court rejectedEFD's UCL claims against the Band Defendants and Brooksbecause EFD sought damages, which are unavailable in aUCL claim. (Korea Supply Co. v. Lockheed Martin Corp.(2003) 29 Cal.4th 1134, 1150–1151 (Korea Supply).) Thecourt found that DVWI was liable under the UCL andaccepted EFD's contention that it was entitled to around$23,500. But the court concluded that this amount was fullyoffset by the Bisel Settlement.The statement of decision also resolved defendants’ uncleanhands defense. The court found that EFD and Teran “activelyparticipated in a scheme to defraud financial lenders.”However, the court determined that EFD “purged its fraud” bypaying off all relevant loans, and therefore it concluded thatEFD's claims were not barred by the unclean hands doctrine.In the statement of decision and the judgment, the court foundthat Teran was not credible.Finally, the statement of decision resolved EFD's claimsagainst GroundSeven. GroundSeven did not respond to thecomplaint. EFD requested a default judgment and soughtdamages of $591,126.23 plus $444,760.19 in prejudgmentinterest. Its request assumed that GroundSeven could be heldresponsible for all damages requested in the complaint. EFD'sdamages expert, Bussell, submitted a declaration in supportof EFD's damages claim under that same assumption.Brooks, acting pro per, opposed the request for defaultjudgment as to GroundSeven. In the opposition, Brooksasserted that he had testified at trial that he was the soleowner and agent of GroundSeven. He therefore arguedthat GroundSeven's liability could not exceed Brooks's ownliability, as determined by the jury. Brooks also urgedthat GroundSeven's liability should be offset by the BiselSettlement.The court entered a default judgment in favor of EFD andagainst GroundSeven and awarded EFD $49,481 in damagesplus $41,847.37 in prejudgment interest.EFD moved for a new trial as to GroundSeven, arguingin relevant part that the court's damages award wasinadequate. The court denied the motion. It determined that“GroundSeven's liability was dependent on Brooks’ actions.”It concluded that EFD had only proved that GroundSeven'sconduct resulted in $49,481 in damages (i.e., the same amountas the special verdict as to Brooks). The court also found thatBussell's declaration was “quite different” from his testimonyat trial, and that Bussell was not “persuasive.”EFD timely appealed from the judgment as to the BandDefendants and Brooks (the “R” appeal). EFD also timelyappealed from the default judgment as to GroundSevenand from “all orders that are separately appealable” (theGroundSeven appeal).4DISCUSSIONI. Inaccurate citations in EFD's appellate briefing*4 We begin by discussing several fabricated quotations andinaccurate descriptions of legal authority in EFD's appellatebriefing.In the “R” appeal, EFD's leading argument is that “Californialaw mandates treating separate obligations as distinct claimswhen determining the applicability and scope of a goodfaith settlement offset. Lilienthal & Fowler v. Superior Court[(1993) 12 Cal.App.4th 1848 (Lilienthal)].” EFD furtherasserts that “Lilienthal clarified the meaning of ‘same tort’in the context of settlement offsets, holding that claims aredistinct when they involve different: ‘(1) times of servicesperformed; (2) specific obligations involved; and (3) resultingdamages.’ Lilienthal & Fowler v. Superior Court, supra, 16Cal.Rptr.2d at p. 461.” This quotation does not appear inLilienthal. More significantly, contrary to EFD's assertion, thecase does not address settlement offsets at all.5EFD also contends that the trial court erred by failingto consider two declarations in determining whether theBisel Settlement had been allocated. Citing Riverisland ColdStorage, Inc. v. Fresno-Madera Prod. Credit [Assn.] (2013)55 Cal.4th 1169, 1182 [(Riverisland)], EFD asserts that “‘[e]xtrinsic evidence is admissible to interpret the termsof a written settlement agreement reached in a mediationcontaining a valid arbitration clause.’ ” Riverisland containsno such quotation, and it does not mention settlements,mediation, or arbitration. And while the case discussesthe role of extrinsic evidence in contract interpretation, itcorrectly explains that such evidence generally “may not berelied upon to alter or add to the terms of the writing.” (Id.at p. 1174.)
EFD USA, INC., et al., Plaintiffs and Appellants, v. BAND..., Not Reported in... © 2026 Thomson Reuters. No claim to original U.S. Government Works.4Relatedly, EFD asserts that the Bisel Settlement “should beinterpreted like a contract, ‘by applying the objective theoryof contracts to determine the mutual intent of the partiesas evidenced by their communications and other objectivemanifestations of their intent.’ Leaf v. City of San Mateo(1980) 104 Cal.App.3d 398, 411.” The Leaf case does notinclude this quotation nor any similar language; it is anuisance case and did not involve a contested contract.While Lilienthal, Riverisland and Leaf represent just threeof the 28 cases cited in EFD's opening brief in the “R”appeal, they are the only three cases discussed in the first13 pages of its argument section. Respondents’ brief pointedout the deficiencies we have described, and other potentialmisrepresentations.6 In its reply, EFD failed to acknowledgeor explain these inaccuracies. In fact, EFD's reply continuesthe trend: the leading argument therein is that a respondent's“ ‘failure to respond to an argument raised in the openingbrief waives any objection.’ (Rudick v. State Bd. of Optometry(2019) 41 Cal.App.5th 77, 90 [(Rudick)].)” The Rudick caseincludes no such quotation.7 EFD's reply also argues that “‘[a] judgment by default admits all material allegations of thecomplaint.’ (Milstein v. Sartain (1943) 56 Cal.App.2d 924,933.)” While perhaps a correct statement of law, Milstein doesnot include this language.*5 Prior to oral argument, we issued an order to show cause(OSC) why this court should not sanction EFD's attorneys,David Azar and Mitchell Keiter, for pursuing a frivolousappeal. The OSC noted that several quotations in EFD'sbriefing in the “R” appeal appear to be fabricated. Azar, whosigned the opening brief, and Keiter, who signed the reply,both filed written responses to the OSC.According to his response to the OSC, Azar was EFD'strial counsel. Azar hired Keiter, a Certified Appellate LawSpecialist, to assist with the appeal. Azar ultimately preparedthe opening brief and most of the reply brief. Keiter formattedand filed the reply brief.Azar asked an artificial intelligence (AI) “consultant” to useAI to prepare a draft opening brief using trial court briefsfiled in the underlying lawsuit and an outline that Azar hadprepared. The AI consultant cautioned Azar to double checkthe citations in the draft to confirm that the AI system hadnot fabricated any legal authorities. After completing the draftopening brief, Azar asked a paralegal to cite check the legalauthorities. He then realized the brief exceeded the word limitby around 6,000 words. Azar and his AI consultant decidedto use an unidentified “AI system” to shorten the draft. Azardirected the system to “keep all citations to authority, factualand legal, unless duplicative.” There is no indication that Azartook any steps to confirm whether the AI system changedany citations, such as asking a paralegal to cite check thebrief for a second time. As we have discussed, EFD's openingbrief in the “R” appeal included several fabricated quotations.Azar investigated the matter after receiving the OSC, and heattributes these errors to the AI system that he used to shortenthe opening brief.Azar also used an AI system to reduce the word count inEFD's reply brief in the “R” appeal. He asked an “appellatespecialist” to cite check the reply brief after that process wascomplete. As we have discussed, the reply brief nonethelessincluded at least two fabricated quotations from real cases.After filing the reply, Azar discovered citation errors in thebrief, and he and Keiter prepared a notice of errata and acorrected reply brief. Azar asserts that he and Keiter bothbelieved that the other had submitted these documents, andthe corrected reply was never filed.Azar accepts responsibility for the errors in both briefs.He urges this court not to dismiss the appeal, but heacknowledges that monetary sanctions would be justified.Keiter's response to the OSC asserts that he was responsibleonly for formatting and filing the final version of EFD'sreply brief. He received the reply brief just three hoursbefore the filing deadline, and did not have time to citecheck it before filing. Keiter acknowledges that the mistakesin the briefing are “unacceptable,” but he asserts thatsanctions are unnecessary because the fabricated quotationsare substantively similar to propositions in the cases cited.“To state the obvious, it is a fundamental duty of attorneys toread the legal authorities they cite in appellate briefs or anyother court filings to determine that the authorities stand forthe propositions for which they are cited. Plainly, counsel didnot read the cases he cited before filing his appellate briefs:Had he read them, he would have discovered, as we did,that the cases did not contain the language he purported toquote [and] did not support the propositions for which theywere cited ....” (Noland v. Land of the Free, L.P. (2025) 114Cal.App.5th 426, 445 (Noland).) These failures violate theCalifornia Rules of Court, which require that arguments besupported “with citations to real (as opposed to fabricated)legal authority.” (Id. at p. 447, citing Cal. Rules of Court,rule 8.204(a)(1)(B).) On our own motion, we may impose
EFD USA, INC., et al., Plaintiffs and Appellants, v. BAND..., Not Reported in... © 2026 Thomson Reuters. No claim to original U.S. Government Works.5sanctions for reliance on nonexistent legal authority and forunreasonable violations of the California Rules of Court.(Noland, at p. 445; Cal. Rules of Court, 8.276.)*6 Sanctions may be awarded to compensate “the clerkof the court for conduct that unnecessarily burdens thecourt and the taxpayers.”8 (Noland, supra, 114 Cal.App.5that p. 447.) The fabricated citations in EFD's briefingrequired this court to spend unnecessary time attemptingto locate nonexistent quotations and legal propositionsand independently researching the issues presented. Underthese circumstances, an award of sanctions payable tothis court is appropriate. Because the errors were causedprimarily by Azar's failure to adequately safeguard againstAI hallucinations, the sanctions will be imposed against Azaralone.As for the amount of sanctions, this court recently explainedthat as of 2013, “appellate sanctions for frivolous appealsrecently had ranged from $6,000 to $12,500, ‘generally, butnot exclusively, based on the estimated cost to the courtof processing a frivolous appeal.’ ” (Noland, supra, 114Cal.App.5th at p. 448.) In Noland, we imposed a sanctionof $10,000 because “nearly all of the quotations in plaintiff'sopening brief, and many of the quotations in plaintiff'sreply brief, [were] fabricated.” (Id. at pp. 430, 448.) Thedeficiencies in this case, while similar in kind, are far lesswidespread. And Azar accepts responsibility for the errors,which he asserts were inadvertent. We will impose a sanctionof $900, which shall be payable by Azar to the clerk of thiscourt within 30 days after the remittitur is filed.II. The trial court did not err or abuse its discretion byoffsetting the judgment based on the Bisel SettlementIn the “R” appeal, EFD primarily argues that the trial courterred and abused its discretion when it offset the jury'sdamages award as to the Band Defendants and Brooks by theamount of the Bisel Settlement. We disagree and affirm.A. Legal framework and standard of review“Where a release, dismissal with or without prejudice, ora covenant not to sue or not to enforce judgment is givenin good faith before verdict or judgment to one or more ofa number of tortfeasors claimed to be liable for the sametort ... [¶] (a) ... it shall reduce the claims against the othersin the amount stipulated by the release, the dismissal or thecovenant, or in the amount of the consideration paid forit, whichever is the greater.” (§ 877, subd. (a).) In otherwords, “when one of a number of tort defendants entersinto a settlement agreement with a plaintiff, the nonsettlingdefendants’ liability to the plaintiff is reduced by the amountof the settlement.” (Bay Development, Ltd. v. Superior Court(1990) 50 Cal.3d 1012, 1018.)“[T]he language of section 877 is significant—its drafters didnot use the narrow term ‘joint tortfeasors,’ they used the broadterm ‘tortfeasors claimed to be liable for the same tort.’ Thislanguage was meant to eliminate the distinction between jointtortfeasors and concurrent or successive tortfeasors [citation],and to permit broad application of the statute.” (Meslerv. Bragg Management Co. (1985) 39 Cal.3d 290, 302.)Relatedly, “section 877 does not require any defendant toprove that settling codefendants were in fact liable, only thatthey were ‘claimed to be liable’ for the same tort.” (Knoxv. County of Los Angeles (1980) 109 Cal.App.3d 825, 833(Knox).)“We generally review a ruling granting or denying asection 877 settlement credit under the deferential abuse ofdiscretion standard. [Citation.] To the extent that we mustdecide whether the trial court's ruling was consistent withstatutory requirements, we apply the independent standard ofreview.” (Wade v. Schrader (2008) 168 Cal.App.4th 1039,1044.)B. The trial court did not abuse its discretion in applyingsection 877*7 In the operative complaint, EFD alleged that alldefendants were liable for fraud, aiding and abetting fraud,and money had and received, and alleged that each defendantacted as the agent or co-conspirator of all other defendantsin committing all the acts leading to EFD's injuries. In short,all defendants were “tortfeasors claimed to be liable for thesame tort[s] ....” (§ 877.) The Bisel Defendants settled allof EFD's claims against them for $375,000, and the courtdetermined that this was a good faith settlement. (§ 877.6.)EFD proceeded to a jury trial on its claims against the BandDefendants and Brooks for fraud, aiding and abetting fraud,and money had and received. It won a $109,958.17 verdict.Under these circumstances, section 877 required that thejudgment against the nonsettling defendants “shall” bereduced. And because the Bisel Settlement did not stipulatethe amount of the reduction, the statute required that thejudgment be reduced by the full amount of the settlement.(§ 877.) Since “the settlement amount is greater than thedamage award, the award is entirely offset, resulting in a
EFD USA, INC., et al., Plaintiffs and Appellants, v. BAND..., Not Reported in... © 2026 Thomson Reuters. No claim to original U.S. Government Works.6zero judgment.” (Goodman v. Lozano (2010) 47 Cal.4th 1327,1330.) The court did not abuse its discretion by complyingwith the statute.EFD argues that section 877 does not apply, citing Carrv. Cove (1973) 33 Cal.App.3d 851, in which the appellatecourt affirmed the trial court's denial of a motion to offseta verdict under section 877. (Carr, at pp. 853, 857.) Carris distinguishable. There, the plaintiff was injured in twocar accidents involving different drivers that occurred ondifferent dates. The plaintiff sued both drivers in a singlelawsuit. She settled with the first driver and proceeded totrial against the second. The trial court declined to offsetthe verdict against the second driver based on the settlementagainst the first. The appellate court affirmed, reasoningthat section 877 did not require an offset “where separatetortfeasors cause separate injuries,” noting that there was “nosuggestion that [the first driver] was liable for the secondaccident.” (Carr, at p. 854.)Unlike in Carr, the operative complaint in this case allegedthat all defendants were responsible for all of the fraudulentconduct that proceeded to trial. And on appeal, EFD concedesthat the Bisel Settlement included a release for claims basedon the transactions that were presented to the jury, and thatpart of the settlement is “attributable” to those transactions.Because EFD “claimed” that all defendants were “liable forthe same tort[s],” section 877 applied. (§ 877.)C. EFD has not established that the trial court erred bydeclining to allocate the Bisel SettlementEFD also argues that the Bisel Settlement was allocated tocertain specific claims or transactions, and the trial court wasrequired to limit the offset accordingly. We again disagree.The parties to a settlement may allocate portions of thesettlement payment to certain parties, claims, or categories ofharm. (Cf. Erreca's v. Superior Court (1993) 19 Cal.App.4th1475, 1488 [settlement in construction lawsuit allocatedbetween damages attributable to grading errors and damagesarising from other problems].) “Where there is a completedismissal of a defendant, and a plaintiff seeks an allocation ofthe settlement with that defendant for purposes of limiting thesetoff against another defendant's liability, the burden is on theplaintiff to establish facts to justify the allocation.” (Ehret v.Congoleum Corp. (1999) 73 Cal.App.4th 1308, 1322 (Ehret);Erreca's, at p. 1491 [“Where the settling parties have agreedto allocate less than all of the settlement amount to a portionof the causes of action, an evidentiary showing is requiredto justify such allocation”]; Alcal Roofing & Insulationv. Superior Court (1992) 8 Cal.App.4th 1121, 1124–1125[“where the cash amount of the settlement does not dictatethe amount of the offset, the settling parties must include anallocation or a valuation in their agreement”].)*8 Thus, unless a plaintiff establishes that there was a “goodfaith agreement between plaintiffs and [settling defendants]allocating the settlement consideration as between the ...causes of action in which joint tortfeasor status was alleged,defendants [are] entitled to a setoff of the entire settlementfigure.” (Knox, supra, 109 Cal.App.3d at p. 836; Dole FoodCo., Inc. v. Superior Court (2015) 242 Cal.App.4th 894,916–917 [where settlement was “entirely unallocated,” entiresettlement was “theoretically available as a setoff”].)The Bisel Settlement did not stipulate to allocate thesettlement payment to any specific disputes or transactions.Under these facts, the trial court did not abuse its discretionin concluding that the nonsettling defendants were “entitledto a setoff of the entire settlement figure.” (Knox, supra, 109Cal.App.3d at p. 836; Dillingham, supra, 64 Cal.App.4th atp. 287 [absent any allocation, the “court must allocate inthe manner which is most advantageous to the nonsettlingparty”].)EFD's arguments to the contrary are not persuasive. EFDcontends that the court erred by failing to consider twodeclarations filed in support of its opposition to the section877 offset. Citing contract law principles, EFD asserts that thedeclarations clarify the meaning of the Bisel Settlement. Inone declaration, Teran claimed that the Bisel Settlement wasbased on about 38 transactions and “did not include” any ofthe transactions presented to the jury. In the second, EFD'sdamages expert, Bussell, opined that the Bisel Settlementresolved “approximately 40 transactions” which “do notoverlap with the 16 leases” addressed at trial. But courtsmay only consider extrinsic evidence to construe ambiguousterms in a contract, not “to alter or add to the terms of thewriting.” (Riverisland, supra, 55 Cal.4th at p. 1174.) TheBisel Settlement includes no reference to allocation nor toany specific transactions. The declarations therefore wouldnot clarify any ambiguous term; they would “add to” thesettlement, and the trial court did not err in ignoring thedeclarations. (Ibid.)EFD also notes that the Bisel Settlement resolved somedisputes that were unrelated to the claims that proceededto trial. It therefore asserts that the overlap between the
EFD USA, INC., et al., Plaintiffs and Appellants, v. BAND..., Not Reported in... © 2026 Thomson Reuters. No claim to original U.S. Government Works.7settlement and the judgment cannot justify a full offset. ButEFD's own authority recognizes that nonsettling defendantsare entitled to an offset “absent a showing by plaintiffs thatnone of the consideration paid for the settlement related to thejoint causes of action.” (Dillingham, supra, 64 Cal.App.4that p. 288.) EFD has not established that the Bisel Settlementwas unrelated to the joint causes of action. To the contrary:EFD concedes that the Bisel Settlement included a releaseof liability as to the transactions that proceeded to trial, andthat some portion of the settlement can be attributed to thosetransactions.To the extent EFD means to argue that the court should haveconsidered defendants’ relative responsibility, Californiacourts have “rejected a plaintiff's contention that thenonsettling defendant was only entitled to have the judgmentagainst it ‘ “reduced by the proportion of liability attributableto settled co-tortfeasors rather than by the amount ofconsideration given for the settlement.” ’ ” (Knox, supra, 109Cal.App.3d at p. 833, quoting Jaramillo v. State of California(1978) 81 Cal.App.3d 968, 970; McGee v. Cessna Aircraft Co.(1978) 82 Cal.App.3d 1005, 1022 [same].)*9 In addition, EFD contends that the trial court erredby failing to “perform the mandatory equitable balancinganalysis” when resolving defendants’ offset motion. EFDrefers to one of the “major goals” of sections 877 and877.6: “the equitable sharing of costs among the parties atfault ....” (Abbott Ford, Inc. v. Superior Court (1987) 43Cal.3d 858, 872.) But equitable sharing of costs is onlyrelevant to the section 877.6 good faith settlement analysis.Specifically, a settlement must be “ ‘in the ballpark’ ” of thesettling defendants’ alleged proportionate liability in order tobe approved as a good faith settlement, so that there is “at leastsome rough measure of fair apportionment of loss betweenthe settling and nonsettling defendants.” (Abbott, at p. 874.)EFD does not challenge the trial court's good faith settlementruling, and it has not identified any authority establishing thatequitable sharing of costs plays any role in the subsequentsection 877 offset analysis.Next, EFD asserts that the trial court should haveconsidered certain evidence of Brooks's role in the fraudulenttransactions. EFD claims that this supports its assertion thatthe court should have allocated the Bisel Settlement in someway. But EFD also fails to explain how the actions of Brooks,who was not a party to the Bisel Settlement, could helpEFD meet its burden of establishing that the settlement hadbeen allocated. (Ehret, supra, 73 Cal.App.4th at p. 1322;Dills v. Redwoods Associates, Ltd. (1994) 28 Cal.App.4th888, 890, fn. 1 [appellate court will not develop appellant'sarguments].)9EFD also claims the trial court erred by failing to compelarbitration of the allocation issue. The Bisel Settlementspecified that any “disagreements over the form or contentof the [Bisel Settlement] shall be decided in a bindingarbitration.” However, EFD did not move to compelarbitration. Rather, in its motion for a new trial, EFD arguedthat the mediator who oversaw the Bisel Settlement “shouldbe given the opportunity to decide” whether the settlement“inherently included an allocation and what the nature andextent of that allocation should be.” In short, EFD moved fora new trial on the basis that a hypothetical arbitration mightresult in new evidence of allocation. “A motion for a new trialon the grounds of newly discovered evidence is generally ‘amatter which is committed to the sound discretion of the trialcourt,’ and ‘a reviewing court will not interfere unless a clearabuse of discretion is shown.’ ” (Aron v. WIB Holdings (2018)21 Cal.App.5th 1069, 1078.) The trial court did not abuse itsdiscretion in declining to order a new trial based on EFD'sspeculation that the mediator might retroactively allocate thesettlement in arbitration.10III. EFD has not identified any prejudicial error relatingto prejudgment interestNext, EFD argues that the trial court erred by failingto calculate prejudgment interest. The jury awarded EFDprejudgment interest in its special verdict. (Civ. Code §3288 [jury may award prejudgment interest in fraud cases].)The court determined that EFD was entitled to compoundprejudgment interest. However, the court concluded thatno interest could be calculated because, in light of theoffset, “there is no balance for interest to accrue on.” Itexplained that “a plaintiff, who in good faith settles witha joint tortfeasor before judgment against a nonsettlingjoint tortfeasor, may thereafter recover from the nonsettlingdefendants: (a) prejudgment interest up to the date ofsettlement on the total judgment; and (b) prejudgment interestafter the date of settlement only on the balance of the totaljudgment remaining after its reduction by the settlement sumpaid.” (Newby v. Vroman (1992) 11 Cal.App.4th 283, 288(Newby).)*10 The Band Defendants concede that EFD is entitled to“prejudgment interest up to the date of settlement,” whichwas June 5, 2021, “on the total judgment.” (Newby, supra, 11
EFD USA, INC., et al., Plaintiffs and Appellants, v. BAND..., Not Reported in... © 2026 Thomson Reuters. No claim to original U.S. Government Works.8Cal.App.4th at p. 288.) We agree. But EFD was not entitled tointerest after the date of settlement, because by that time the“balance” of the judgment was reduced to zero. (Ibid.)Even so, “the error was harmless, because it is not reasonablyprobable [plaintiff] would have obtained a more favorableresult in its absence.” (Soule v. General Motors Corp.(1994) 8 Cal.4th 548, 570; see Cal. Const., art. VI, § 13[reversal appropriate only where error caused prejudice].)According to EFD's damages expert, prejudgment compoundinterest through June 5, 2021 amounts to $44,418.40. Whenthis figure is added to the judgment, the total damagesaward comes to $153,376.56. The $375,000 Bisel Settlementexceeded and fully offset this amount. Thus, althoughplaintiffs were entitled to prejudgment interest through thedate of the Bisel Settlement, the court correctly concluded thatEFD's total award was offset by the settlement, and that EFDshould take nothing on its complaint.IV. EFD has not identified any basis to reverse the trialcourt's rulings on EFD's UCL claimsEFD also challenges the trial court's treatment of its UCLclaims. None of its arguments warrants reversal.EFD argues that the trial court failed to resolve its UCL claimagainst the Band Defendants and Brooks. Not so. The trialcourt determined that this claim, though framed as one forrestitution, was in truth an improper “claim for damages”and rejected it. (Korea Supply, supra, 29 Cal.4th at p. 1150[“individuals may not recover damages” in an action underthe UCL].) EFD's appellate briefing does not challenge thisaspect of the trial court's ruling, and therefore EFD forfeitedany claim of error. (Wall Street Network, Ltd. v. New YorkTimes Co. (2008) 164 Cal.App.4th 1171, 1177.) EFD alsoasserts that the trial court failed to provide any relief onits UCL claims against DVWI. In fact, the court concludedthat DVWI was liable under the UCL and accepted EFD'sargument that it was entitled to $23,527.29 in restitution. Butthe court determined that this amount would be offset by theBisel Settlement. EFD does not acknowledge or challengethat decision. It therefore forfeited any challenge to the ruling.(Ibid.)EFD also argues that the court should have issued aninjunction. But EFD did not request that remedy. Andwhile EFD claims injunctive relief is required for anyUCL violation, in truth the UCL “does not mandate ...injunctive relief when an unfair business practice has beenshown.” (Cortez v. Purolator Air Filtration Products Co.(2000) 23 Cal.4th 163, 180.)11V. EFD has not established any basis for reversal basedon the trial court's credibility and unclean handsfindingsNext, EFD argues that the judgment must be reversedbecause it stated that the court “did not find GeorginaTeran to be credible.” According to EFD, the jury's verdictreflects an implied finding that Teran was credible, and EFDcontends that the jury's implied finding contradicts the court'scredibility finding. However, the court resolved EFD's UCLclaims and defendants’ unclean hands arguments at a benchtrial. As the factfinder on those claims, the court was entitledto make credibility findings, and we defer to those findings.(Niko v. Foreman (2006) 144 Cal.App.4th 344, 365.) Andeven if this finding was in error, EFD fails to explain whyinclusion of the finding in the judgment warrants reversal.The only authority that EFD cites is Horstmann v. Sheldon(1962) 202 Cal.App.2d 184, which noted that statements ina memorandum decision “are not a part of the findings orjudgment.” (Id. at p. 189.) But that rule is irrelevant here, sinceEFD challenges a finding in the judgment itself.*11 EFD also argues that the judgment must be reversedbased on the trial court's findings relating to defendants’unclean hands defense. This defense was resolved by thetrial court, and was not presented to the jury. The courtfound that “EFD, Teran, Band Pro, Brooks, Bisel, and AmnonBand actively participated in a scheme to defraud financiallenders.” But the court also found that EFD “purged its fraud”by paying of all loans to those lenders. It therefore concludedthat EFD's claims were not barred by the unclean handsdefense.Ordinarily, we review a trial court's factual findings forsubstantial evidence. (SFPP v. Burlington Northern & SantaFe Ry. Co. (2004) 121 Cal.App.4th 452, 462.) EFD doesnot argue that the court's findings are unsupported bysubstantial evidence. Instead, it asserts that the findingswarrant reversal because they contradict the jury's verdict,which, according to EFD, implies a finding that EFD didnot engage in any fraud. In support of this claim, EFDcites the jury instructions on intentional misrepresentation,concealment, the statute of limitations, and agency. However,those instructions demonstrate only that the jury was askedto determine whether EFD was harmed when Band Bro,Band, and Brooks concealed and intentionally misrepresented
EFD USA, INC., et al., Plaintiffs and Appellants, v. BAND..., Not Reported in... © 2026 Thomson Reuters. No claim to original U.S. Government Works.9certain information. The instructions say nothing aboutfinancial lenders. EFD has not established that any findingimplied by the judgment contradicts the trial court's findingthat plaintiffs participated in fraud against lenders.Even if the court's findings conflicted with the verdict, wewould find no error. EFD asserts that the findings requirereversal under Hoopes v. Dolan (2008) 168 Cal.App.4th 146,which recognized that a court may not “ ‘grant equitable reliefinconsistent with the jury's findings.’ ” (Id. at p. 159.) Butthe trial court did not grant relief that is inconsistent withany implied finding—rather, the court rejected the equitabledefense of unclean hands that would have barred plaintiffs’recovery.EFD similarly argues that the judgment should be reversedbecause the court's findings are inconsistent with its ultimaterejection of the unclean hands defense. We discern noinconsistency. The court found that EFD participated in fraudagainst financial lenders. It separately determined that EFDpurged that fraud by paying the lenders in full, thus renderingthe unclean hands defense inapplicable. It is difficult toimagine how the court could have assessed the latter questionwithout first resolving the former—there was no reason forthe court to consider whether EFD had purged any fraudunless the court had already found that it had engaged in fraud.Finally, EFD asserts that the court was “not authorized” tomake findings relating to the rejected unclean hands defense.We again disagree. A court must “issue a statement ofdecision explaining the factual and legal basis for its decisionas to each of the principal controverted issues at trial uponthe request of any party appearing at the trial.” (§ 632.) EFDitself requested a statement of decision on the unclean handsdefense, and the trial court was required to explain the factualbasis for its ruling on that issue.VI. EFD has not established any basis for reversal of theGroundSeven default judgmentEFD also appeals from the default judgment as toGroundSeven and the order denying its motion for a new trial.EFD primarily argues that the court's damages award wasinadequate. We again conclude that EFD has not identifiedany basis for reversal.A. Legal framework and standard of review*12 When a defendant fails to answer the complaint, theplaintiff may request a default judgment pursuant to section585. “The court shall hear the evidence offered by theplaintiff, and shall render judgment in the plaintiff's favor forthat relief, not exceeding the amount stated in the complaint ...as appears by the evidence to be just.” (§ 585, subd. (b).) Theplaintiff need only make a prima facie showing of entitlementto damages. (Johnson v. Stanhiser (1999) 72 Cal.App.4th357, 361 (Johnson).) Nonetheless, “ ‘[p]laintiffs in a defaultjudgment proceeding must prove they are entitled to thedamages claimed.’ ” (Kim v. Westmoore Partners, Inc. (2011)201 Cal.App.4th 267, 288.)The reviewing court may set aside a damages awardfollowing a default judgment only when the award is “ ‘sodisproportionate to the evidence as to suggest that the verdictwas the result of passion, prejudice or corruption [citations]or where the award is so out of proportion to the evidence thatit shocks the conscience of the appellate court.’ ” (Johnson,supra, 72 Cal.App.4th at p. 361.)B. EFD has not established that the award as toGroundSeven was disproportionate to the evidenceIn its request for a default judgment as to GroundSeven,EFD asked for $591,126.23 in damages plus $444,760.19in prejudgment interest. The court's statement of decisionand judgment awarded EFD $49,481 in damages againstGroundSeven and $41,847.37 in prejudgment interest. Thestatement of decision did not provide any reasoning for thisruling. However, in its order denying GroundSeven's motionfor a new trial, the court found that Brooks was the soleowner and agent of GroundSeven. It concluded that EFD hadnot established that Brooks or GroundSeven had caused anydamages beyond those awarded by the jury, and therefore itlimited the damages against GroundSeven to the amount thatthe jury allocated to Brooks.EFD argues that the damages award was disproportionateto the evidence. It contends that the court ignored evidencethat Brooks participated in fraudulent transactions beyondthose presented to the jury—namely, trial exhibits 603a and603b. These two exhibits are spreadsheets that list certaindetails, including Brooks's commission, for several invoicesissued by Novation between 2012 and 2015. Althoughthe two exhibits do not mention GroundSeven, Brookstestified that GroundSeven “absorbed” Novation in 2014.According to EFD and its expert Bussell, the two exhibitswere produced by Brooks, and they establish that Novationreceived commissions from about 24 fraudulent transactions.EFD asserts that GroundSeven should be held liable for all
EFD USA, INC., et al., Plaintiffs and Appellants, v. BAND..., Not Reported in... © 2026 Thomson Reuters. No claim to original U.S. Government Works.10damages described in exhibits 603a and 603b, and not just thedamages that the jury allocated to Brooks.This argument fails. Aside from its expert's declaration, EFDhas not cited anything in the record to support its assertion thatthe two exhibits are “Brooks’ own summary of transactionspresented at the jury trial.” The documents do not include anytitle or Bates number establishing their provenance. Althoughwe have no obligation to do so, we have independentlysearched the reporter's transcript provided to this court, andwe found no testimony discussing either exhibit number.(Dills, supra, 28 Cal.App.4th at p. 890, fn. 1 [appellate courtwill not develop appellant's arguments].)EFD also asserts that GroundSeven should be held liablefor all damages identified in the complaint because, bydefaulting, it admitted all well-pleaded allegations therein—including the allegations that all defendants were jointtortfeasors who were jointly and severally liable for EFD'sdamages. This argument also fails. “ ‘[A] defendant who failsto answer admits only facts that are well pleaded.’ ” (Falahativ. Kondo (2005) 127 Cal.App.4th 823, 829.) Joint and severalliability is a legal conclusion.12 (Cf. Wimberly v. DerbyCycle Corp. (1997) 56 Cal.App.4th 618, 628.) Conceivably, acomplaint could include well-pleaded allegations such that adefaulting defendant might admit facts supporting his or herjoint liability. But the operative complaint included no factualallegations about GroundSeven, meaning there were no factsfor it to admit. According to the trial court, plaintiffs namedGroundSeven as a Doe defendant on September 19, 2019. Butthe record on appeal does not include any filings from thatdate, meaning the record does not reflect what well-pleadedfacts, if any, were alleged about GroundSeven's role.13*13 Next, EFD argues that the trial court ruling must bereversed if the court relied on Brooks's opposition to EFD'sapplication for a default judgment as to GroundSeven. But thestatement of decision did not mention Brooks's opposition,and EFD has not identified anything in the record to supportits speculative argument that the court relied on it. Wetherefore reject this point as forfeited. (Hernandez v. FirstStudent, Inc. (2019) 37 Cal.App.5th 270, 277 [appellant'sburden is to “provide adequate record citations” supportingarguments on appeal].)Finally, in both appeals, EFD contends that the trialcourt erred by declining to offset the GroundSeven defaultjudgment by the amount of the Bisel Settlement, and thatany offset should be allocated pro rata among all defendants.We presume EFD intended for these arguments to dependon the success of its argument that the GroundSeven defaultjudgment was inadequate. Otherwise, offsetting the defaultjudgment would reduce the award against GroundSeven tozero. Because we affirm the GroundSeven default judgment,we decline to reach these contingent points.DISPOSITIONWe affirm the judgment as to the Band Defendants andBrooks, the default judgment as to GroundSeven, and theorder denying EFD's motion for a new trial.Attorney David E. Azar is directed to pay $900 in sanctions,payable to the clerk of this court, no later than 30 days afterthe remittitur is filed. The clerk is directed to deposit this suminto the court's general fund.Respondents shall recover their costs on appeal.NOT TO BE PUBLISHED IN THE OFFICIALREPORTSWe concur:EDMON, P. J.ADAMS, J.All CitationsNot Reported in Cal.Rptr., 2026 WL 457265Footnotes1Because the exact nature of the fraud is not relevant to any issue on appeal, we do not describe it any further.
EFD USA, INC., et al., Plaintiffs and Appellants, v. BAND..., Not Reported in... © 2026 Thomson Reuters. No claim to original U.S. Government Works.112Undesignated statutory references are to the Code of Civil Procedure.3The jury's special verdict specified damages to three decimal points.4Both notices of appeal also identify Teran as an appellant. However, appellants’ briefing does not challengethe trial court's grant of summary adjudication on the only two counts brought by Teran. Similarly, the noticeof appeal in the “R” appeal purports to challenge postjudgment orders, but EFD's appellate briefing does notseparately challenge any such orders. We therefore reject any argument as to these issues as abandoned.(Case v. State Farm Mutual Automobile Ins. Co., Inc. (2018) 30 Cal.App.5th 397, 402 (Case) [“[O]ur reviewis limited to contentions adequately raised in [appellant's] briefs”].)5Lilienthal addressed “whether the trial court may refuse to rule on the merits of a summary adjudicationmotion made pursuant to [section 437c, subdivision (f)], when such an adjudication would not dispose of anentire cause of action because two separate and distinct wrongful acts are combined in the same cause ofaction.” (Lilienthal, supra, 12 Cal.App.4th at p. 1850.) EFD does not explain why this rule could or should beapplied in the context of section 877 settlement offsets.6For example, EFD claims that in Dell'Oca v. Bank of New York Trust Co., N.A. (2008) 159 Cal.App.4th 531,the court held that an offset was “improper,” but in fact the court expressly declined to resolve the offset issueraised on appeal. (Id. at p. 561.) EFD also asserts that this case “mirrors Dillingham [Construction], N.A., Inc.v. Nadel [Partnership], Inc. (1998) 64 Cal.App.4th 264 [(Dillingham)].” But a section 877 offset was “not anissue” in Dillingham. (Dillingham, at p. 282.)7The case reasoned that the appellants “implicitly concede[d]” a point by failing to respond to it in their reply.(Rudick, supra, 41 Cal.App.5th at p. 90.) Of course, appellants bear the burden of establishing error on appeal.A respondent has no such burden, and “even a respondent's complete failure to address an appellant'sargument does not require us to treat the failure to respond as a concession the argument has merit.” (Griffinv. The Haunted Hotel, Inc. (2015) 242 Cal.App.4th 490, 505.)8Sanctions may also be awarded to compensate a party for the costs of responding to a frivolous appeal.Respondents did not request a sanctions award on this basis.9Relatedly, in the “R” appeal, EFD asserts that the trial court should have awarded greater damages asto GroundSeven based on Brooks's conduct, and that the court should have considered that award whendetermining how to apply the section 877 offset. Because EFD raised these same arguments in its separateappeal from the GroundSeven default judgment, we address these issues in our analysis of that appeal.10For the first time in its reply brief in the “R” appeal, EFD asks this court to reverse postjudgment ordersawarding costs to respondents, vacate the associated cost awards, and declare EFD the prevailing party.EFD has not articulated any independent basis for these requests, and they appear to depend on the successof its arguments relating to the section 877 offset. Because we affirm the trial court ruling on the offset, wedeny these requests.11EFD claims that People v. Pacific Land Research Co. (1977) 20 Cal.3d 10, stands for the proposition that“injunctive relief [is] mandatory to prevent future violations” of the UCL. Not so. The case stated that “[t]hepurpose of injunctive relief is to prevent continued violations of law,” not that an injunction is required underany particular circumstances. (Id. at p. 17.)12For example, as EFD acknowledges in its reply in the “R” appeal, “[t]he agency allegation at issue is a legalconclusion, not a factual admission.”
EFD USA, INC., et al., Plaintiffs and Appellants, v. BAND..., Not Reported in... © 2026 Thomson Reuters. No claim to original U.S. Government Works.1213In support of this point, EFD cites several cases discussing the treatment of joint and several liability fornoneconomic damages. These cases are inapposite, because EFD only sought economic damages, i.e., “‘objectively verifiable monetary losses ....’ ” (DaFonte v. Up-Right, Inc. (1992) 2 Cal.4th 593, 600.)End of Document© 2026 Thomson Reuters. No claim to original U.S. Government Works.
ProvenanceKnow exactly where this document came from.Members see the sourcing behind every authority on DocPost — so you can check the record yourself and cite with confidence.Request access