Judgment For Fraud Reversed…Lack Of Reliance.

A trustee brought an action against various persons and investment companies when the trust’s fund lost significant value in 2008. A jury awarded $4,640,380. In a lengthy opinion, the appellate court affirmed the judgment as to a breach of fiduciary duty against those defendants who are investment advisors, but reversed on the actual and constructive fraudulent transfer causes of action as well as for breach of fiduciary duty and professional negligence against some of the defendants “because there is no substantial evidence to show that they were investment advisors within the meaning of Corporations Code section 25009.” The court also reversed to the extent the judgment was against any of the defendants for fraud by intentional misrepresentation, concealment or negligent misrepresentation, stating that even if the defendants “had made any material misrepresentation or omissions, and even if the initial trustee of the trusts had relied thereon, any such reliance would have been unreasonable.” (Hasso v. Hapke (Cal. App. Fourth Dist., Div. 3; June 19, 2014) (As modified, July 15, 2014)227 Cal.App.4th 107, [173 Cal.Rptr.3d 356].)