Uzyel v. Kadisha (188 Cal. App. 4th 866, 2010)

Opinion

CROSKEY, J.

Neil Kadisha served as the trustee of two trusts. The beneficiaries, Dafna Uzyel and her children Izzet and Joelle Uzyel (collectively the Uzyels), filed petitions for breach of trust against Kadisha and terminated the trusts. After a nonjury trial, the trial court awarded the Uzyels over $59 million in compensatory damages and disgorgement of profits, plus $5 million in punitive damages and over $13 million in attorney fees. Kadisha appeals the judgment, challenging the awards on several claims, the punitive damages, and the attorney fee award. The Uzyels also appeal, challenging the denial of relief on some of their claims, the denial of prejudgment interest on some claims, the punitive damages, and the costs award.

These consolidated appeals raise several questions concerning a trustee’s liability for breach of trust under Probate Code section 16440, subdivision (a). With respect to these questions, we conclude as follows: (1) tracing is not required for the disgorgement of profits made by the trustee “through the breach of trust” under section 16440, subdivision (a)(2); (2) the fact that an act is consistent with or even compelled by the duty of prudent investing does not excuse a trustee from liability for breach of the duty of loyalty, including liability for appreciation damages as lost profits under section 16440, subdivision (a)(3); (3) the determination as to which of the statutory measures of liability “is appropriate under the circumstances” under section 16440, subdivision (a) is reviewed for abuse of discretion; (4) an investment loss resulting from a breach of trust should be offset against a profit resulting from a breach of trust only if the breaches were not separate and distinct; (5) prejudgment interest is mandatory on an award of damages under section 16440, subdivision (a)(1); and (6) the absence of an express provision for prejudgment interest under section 16440, subdivision (a)(3) does not preclude an award of prejudgment interest under Civil Code section 3287, subdivision (a) on damages awarded under that provision.

In addition, with respect to two other issues, we conclude that a plaintiff is not entitled to the reversal of a punitive damages award for redetermination of the amount of punitive damages just because the compensatory award is increased on appeal; and “reasonable cause” to oppose a contest of an account, within the meaning of section 17211, subdivision (b), means an objectively reasonable belief, based on the facts then known to the trustee, either that the claims are legally or factually unfounded or that the petitioner is not entitled to the requested remedies.

In light of these conclusions and, after determining that (1) the trial court had no jurisdiction to vacate the modification of its statement of decision and judgment, (2) the award of damages resulting from Kadisha’s use of trust funds to pay for his legal defense included excessive prejudgment interest, (3) the denial of prejudgment interest on the amounts awarded on some of the Uzyels’ claims was error, and (4) the award of attorney fees to the Uzyels was unauthorized, we will reverse the judgment in part, with directions, and reverse the order awarding attorney fees. In all other respects, however, the judgment will be affirmed.

FACTUAL AND PROCEDURAL BACKGROUND

1. Establishment of the Trusts

Rafael Uzyel died intestate in May 1986, survived by his wife Dafna Uzyel and their young children Izzet and Joelle Uzyel. Dafna Uzyel was 28 years old at the time. She had only a 10th grade education, a very limited ability to communicate in the English language, and no financial or business experience. Kadisha was a family friend. Kadisha lent money to Dafna Uzyel after her husband’s death to help pay her substantial living expenses.

Kadisha referred Dafna Uzyel to an attorney, Hugo DeCastro, for assistance in marshaling foreign assets. DeCastro also represented Kadisha or entities in which he was an investor. Rafael Uzyel’s sister, Lillian Nomaz, sought to prevent Dafna Uzyel from gaining control of assets in Switzerland. DeCastro represented Dafna Uzyel in connection with the dispute. The Uzyel Irrevocable Trust No. 1 (Trust No. 1) was established in February 1988 to resolve the dispute, with Kadisha as the trustee. Dafna Uzyel was the settlor of the trust, and Izzet and Joelle Uzyel were the beneficiaries.

A second trust, the Uzyel Irrevocable Trust No. 2 (Trust No. 2) was established contemporaneously with Trust No. 1, with Kadisha as the trustee. Dafna Uzyel was the settlor of the trust and was its sole beneficiary. Dafna Uzyel conveyed the Uzyels’ personal residence and other assets to Trust No. 2.

2. Namco Loan

The trusts initially had no liquid assets. Kadisha, as trustee of Trust No. 2, borrowed $500,000 from Namco Financial, Inc. (Namco), in May 1988. The short-term loan was secured by the Uzyels’ personal residence. Kadisha deposited the loan proceeds in his personal Union Bank checking account and, within three weeks, spent the entire amount for his own purposes rather than for the benefit of the trust or its beneficiaries. He used $240,000 of the loan proceeds to repay his Union Bank line of credit, which he had previously drawn on to lend $151,000 to Leon Farahnik.

3. Omninet and the Qualcomm Settlement

Kadisha was an officer and director of, and an investor in, Omninet Corporation (Omninet). Omninet and Qualcomm Corporation (Qualcomm) were parties to an agreement under which Omninet was obligated to develop communications technology for use with mobile telephones. The agreement provided that Qualcomm would acquire ownership of the intellectual property rights to the technology if Omninet defaulted under the agreement. Omninet was unable to obtain the funds needed to continue its development efforts and served a notice of its default under the agreement in April 1988. Qualcomm filed a complaint against Omninet in June 1988 for breach of the agreement, seeking to acquire the intellectual property rights. The litigation, together with other liabilities and potential liabilities, threatened to bankrupt Omninet.

Kadisha negotiated a settlement with Qualcomm, which was consummated in August 1988. Under the terms of the settlement agreement, Qualcomm acquired certain assets from Omninet; Qualcomm paid Omninet and its investors $4 million in cash, $1 million in promissory notes, and 200,000 shares of stock; and Kadisha and other Omninet investors became Qualcomm directors. The parties to the settlement agreement and others also executed a stock purchase agreement on the same date, pursuant to which Kadisha and others purchased a total of four million shares of Qualcomm stock at $1 per share (and also received warrants to purchase an additional 93,750 shares of stock); in addition, they lent Qualcomm a total of $750,000. Kadisha and others obtained the funds to purchase their portion of the four million shares by borrowing $8.5 million from Sanwa Bank (Sanwa). After payment of another obligation, approximately $3.5 million of the Sanwa loan funds remained for use in connection with the stock purchase and the $750,000 loan.

Kadisha purchased 662,000 shares of Qualcomm stock in August 1988 for himself pursuant to the settlement and purchased an additional 390,000 shares for his friends and family members, who reimbursed him $390,000 within one day. The total of $1,052,000 paid for those stock purchases was drawn from the Sanwa loan funds. The Sanwa loan funds also paid $344,000 of the $750,000 loan to Qualcomm. Kadisha contributed an additional $136,000 toward the $750,000 loan, drawing that amount from his personal Wells Fargo Bank account into which he had deposited the $390,000 that he received in reimbursement from his friends and family. Kadisha’s share of the $750,000 loan was $250,000.

Kadisha acknowledged in a declaration filed in other litigation that Qualcomm was “an extremely risky investment” at the time and that it had consistently lost money. Qualcomm continued to experience financial difficulties. Kadisha lent Qualcomm an additional $100,000 in September 1988, at a time when the Namco loan was in default, and received a $350,000 promissory note from Qualcomm for the $100,000 loan and his prior $250,000 loan. In consideration for the making of this loan, Kadisha received warrants for the purchase of 43,750 shares of Qualcomm stock at $8 per share.

4. Imperial Savings Loan

Kadisha, individually and as trustee of Trust No. 2, borrowed $2 million from Imperial Savings Association (Imperial) in December 1988. The loan was secured by the Uzyels’ personal residence. Kadisha used the loan proceeds to repay the Namco loan and took $1 million of the loan proceeds from the trust for his personal use. From the remaining loan proceeds held by Trust No. 2, he made a $300,000 loan from the trust to Qualcomm. Qualcomm provided a promissory note in that amount and warrants for the purchase of 37,500 shares of stock at $8 per share.

Kadisha sold the Uzyels’ personal residence for $3,525,000 in May 1989. He used the sale proceeds to repay the Imperial loan and deposited the remaining $1,329,293 in Trust No. 2’s account.

5. Trust No. 2’s May 1989 Purchase of Qualcomm Stock and Kadisha’s Continuing Misappropriations

Kadisha exchanged Trust No. 2’s $300,000 Qualcomm promissory note for 37,500 shares of Qualcomm stock ($8 per share) in May 1989. He took $1.25 million from Trust No. 2 in June 1989. Trust No. 2 received $390,886 from foreign assets in August 1989. That same month, Kadisha then took $390,000 from Trust No. 2.

Kadisha exercised his warrants to purchase 43,750 shares of Qualcomm stock in September 1989, canceling his $350,000 promissory note to pay the purchase price.

Trust No. 1 received $1,738,657 from a Swiss bank in December 1989, and Trust No. 2 received $271,990. Kadisha took $200,000 and then $1.4 million from Trust No. 1 in December 1989 and January 1990. He took $130,000 from Trust No. 2 in June 1990 and $150,000 from Trust No. 1 in July 1990.

6. Kadisha’s May 1991 Purchase of Qualcomm Stock from Farahnik

Kadisha purchased 30,000 shares of Qualcomm stock from Farahnik for $7 per share in May 1991. Kadisha paid for the shares by canceling $210,000 of Farahnik’s prior $221,000 debt to Kadisha.

Kadisha provided written notice of his resignation as trustee of Trust No. 2 in a letter to Dafna Uzyel dated June 6, 1991. The letter stated that he would continue to serve as trustee only until the end of the year, that he did not believe that he was “capable of fulfilling your wishes with the limitation and authority governing my actions as trustee,” and that he was serving as trustee “as favor to you and your family, therefore I receive no compensation or any benefit from this time consuming process.” Dafna Uzyel agreed to amend the declaration of trust to induce Kadisha to withdraw his resignation and remain as trustee. She was not represented by counsel in connection with the amendment.

7. Trust No. 2’s May 1992 Sale of Qualcomm Stock

Qualcomm had its initial public offering in December 1991. Kadisha sold Trust No. 2’s 37,500 shares of Qualcomm stock in May 1992 at an average price of $21.35 per share, for a total of approximately $801,000. Kadisha also repaid part of his personal “loans” from Trust No. 2 at that time in the amount of $677,776.96. Kadisha as trustee then made a $1.4 million loan from Trust No. 2 -to “David Rahban” on May 19, 1992. Rahban was a fictional borrower. The money actually went to Kadisha, who used it to repay $1,471,936.63 that he owed to Trust No. 2 arising from his personal “loans” from the trust.

Kadisha “borrowed” a total of $800,000 from Trust No. 2 in June and July 1992, $500,000 from Trust No. 2 in February 1993, and $500,000 from Trust No. 1 in March 1993.

8. Trust No. 2’s January 1994 Purchase and April 1999 Sale of Qualcomm Stock, and Kadisha’s Purchase of Trust No. 2’s Interest in Carson ’93

Kadisha exercised Trust No. 2’s warrants for the purchase of Qualcomm stock in January 1994. The purchase price of $8 per share was paid by canceling some of the shares based on the previous day’s market closing price of $51.50 per share. Trust No. 2’s resulting acquisition totaled 31,674 shares. The shares split two for one in February 1994, so Trust No. 2 then owned 63,348 shares. Kadisha as trustee of Trust No. 2 sold 53,348 of those shares in April 1999 at an average price of approximately $200 per share, for a total of $10,593,959. At the same time, he sold 10,000 of Tmst No. 2’s shares of Qualcomm stock to Tmst No. 1, but he backdated the sale to October 8, 1998, and the shares were sold for the market closing price on that date of $39.13. Qualcomm stock split two for one in May 1999.

Kadisha purchased Tmst No. 2’s interest in Carson ’93 Limited Partnership (Carson ’93) in January 1997, received cash distributions from the partnership in October 1998 and February 1999, and sold his interest in the partnership in November 2000.

9. The Uzyels’ Request for Additional Distributions

The Uzyels requested an additional $300,000 in distributions from the two trusts in June 1999. Kadisha distributed only $50,000 from Tmst No. 2. An attorney sent a letter to Kadisha in July 1999 stating that the Uzyels had retained his firm regarding their request for distributions and demanding an additional $150,000 distribution. Kadisha did not comply with the demand.

Qualcomm stock split four for one in December 1999 and reached its highest price of $179.31 per share on January 3, 2000.

10. Petitions for Breach of Trust and Subsequent Events

Izzet and Joelle Uzyel, by and through Dafna Uzyel as their guardian ad litem, filed a petition against Kadisha as trastee of Trust No. 1 in October 1999. Dafna Uzyel, as settlor of Tmst No. 1, and Izzet and Joelle Uzyel, as beneficiaries of the tmst, filed an amended petition in July 2000, seeking damages for breach of tmst and other relief. Dafna Uzyel filed a petition against Kadisha as trastee of Tmst No. 2 in October 1999, and filed an amended petition in July 2000, seeking damages for breach of tmst and other relief.

Kadisha deposited a total of $500,000 from the two trusts in his attorney’s tmst account on February 23, 2000, to pay for his defense in these proceedings. He also paid some of his attorney fees using additional tmst funds. Kadisha used approximately $76,000 of the deposited funds to pay his attorney fees from March to July 2000.

Dafna Uzyel notified Kadisha in writing in June 2000 that the trusts were terminated and directed him to turn over all trust assets to Whittier Trust Company. She petitioned for orders compelling Kadisha to turn over the trust assets. The Uzyels also applied ex parte for a temporary restraining order to prevent Kadisha from spending any of the trust funds held by his attorney. Kadisha objected to the petitions and opposed the ex parte application. The trial court granted temporary restraining orders and later preliminary injunctions prohibiting the use of any trust assets to pay for Kadisha’s defense in any trust litigation. On August 4, 2000, the court ordered Kadisha to return the $500,000 held in trust by his attorney and turn over all trust assets to Whittier Trust Company. Kadisha began to turn over the assets in mid-September 2000 and completed the task (with the exception of the $500,000 still held in trust by his attorney) on September 18, 2000.

Kadisha appealed the preliminary injunctions and orders to return the $500,000. He argued on appeal that the preliminary injunctions were invalid because the trial court did not require the Uzyels to provide an undertaking pursuant to Code of Civil Procedure section 529, subdivision (a). At oral argument, the parties stipulated that the disputed funds would remain in the client trust account held by Kadisha’s attorney pending the resolution of the trial court proceedings and that no undertaking was required. We modified the appealed orders accordingly and affirmed the orders as modified. (Levi v. Kadisha (Sept. 30, 2003, B144534) [nonpub. opn.].) We modified the orders to state, in part, “Pursuant to the stipulation of the parties, the return of $250,000 [to each trust] shall be deemed accomplished as of this date and the funds shall remain on deposit in the bank account of the trustee’s attorney, Marvin G. Bums, and no withdrawals or expenditures therefrom may be had except upon the order of this court.”

11. Trial and Amended and Consolidated Petition for Breach of Trust

The trial court consolidated the two proceedings for trial. The nonjury trial commenced in May 2002. The presentation of evidence concluded in July 2004, after approximately 200 full or partial days of trial testimony. The Uzyels filed an amended and consolidated petition in September 2004, with leave of court. The court filed a tentative decision in September 2005, an amended tentative decision in July 2006, and a statement of decision in October 2006.

12. Statement of Decision

The 191-page statement of decision characterized Kadisha’s conduct as trustee as egregious, stating: “Throughout Kadisha’s tmsteeship, he acted in bad faith and in total derogation of his fiduciary duties. There can be no doubt that Kadisha knew that what he did was wrong—he did exactly what DeCastro advised him not to do and then tried to cover up his misconduct.” “[Although the evidence shows numerous (egregious) instances in which Kadisha used Trust assets or his position as Trustee for his own benefit, there is no evidence of any instances in which Kadisha acted in the beneficiaries’ interests. In short, Kadisha did precisely the opposite of what the duty of loyalty compelled him to do. Rather than administering the trust and dealing with the trust assets solely for the interest of the beneficiaries, he administered the trust and dealt with the trust assets solely for his own benefit.” The trial court found that Kadisha had breached his fiduciary duties in many instances, but concluded that the Uzyels were entitled to recover compensatory damages or the disgorgement of profits arising from only five specific events.

The statement of decision stated that the Uzyels were entitled to (1) the disgorgement of $15,818,000 in profits arising from Kadisha’s stock purchase from Farahnik in May 1991; (2) $35,389,242 in compensatory damages arising from the sale of Trust No. 2’s Qualcomm stock in May 1992; (3) the disgorgement of $224,533 in profits arising from Kadisha’s purchase of Trust No. 2’s interest in Carson ’93; (4) $5,792,000 in compensatory damages arising from Kadisha’s failure to protect the value of Trust No. l’s investment in Qualcomm stock in and after January 2000; (5) $543,055 in compensatory damages arising from Kadisha’s use of trust funds to pay his legal expenses; (6) prejudgment interest on all of these amounts from September 19, 2000; and (7) $5,000,000 in punitive damages.

The statement of decision denied the Uzyels relief on their other claims, including claims for disgorgement of some of the profits earned by Kadisha from his purchase of Qualcomm stock in August 1988 and from his exercise of the warrants for the purchase of 43,750 shares of Qualcomm stock in September 1989; damages for the misappropriation of trust funds; lost profits resulting from the sale of Trust No. 2’s Qualcomm stock in April 1999; and other claims. The statement of decision also stated that the Uzyels were entitled to recover their attorney fees pursuant to section 17211, subdivision (b).

The court filed an order on November 6, 2006, modifying the statement of decision by increasing the amount awarded for Kadisha’s failure to protect the value of Trust No. l’s investment in Qualcomm stock in and after January 2000, from $5,792,000 to $6,930,400, plus prejudgment interest on that amount from September 19, 2000.

13. Judgment and Amended Judgment

The court filed a judgment on November 13, 2006, awarding the Uzyels $94,926,053 in compensatory damages and disgorgement of profits, including .prejudgment interest; $5 million in punitive damages; and attorney fees in an amount to be determined. The court vacated the judgment sua sponte on November 15, 2006, stating that it had mistakenly entered judgment before the expiration of the time for Kadisha to file objections to the proposed judgment. The court stated that this was a clerical error.

The court filed a new judgment on December 8, 2006, awarding the Uzyels $95,386,511 in compensatory damages and disgorgement of profits, including prejudgment interest; $5 million in punitive damages; and attorney fees in an amount to be determined. The Uzyels served a notice of entry of judgment on that same date. Kadisha filed a notice of appeal from the new judgment on December 26, 2006 (No. B196045).

14. New Trial Motions and Amended Judgment

Kadisha filed a notice of intention to move for a new trial on December 26, 2006, on several grounds, including excessive damages. The Uzyels moved for a new trial on the grounds of inadequate damages and error in law. The court denied both motions in an order filed on February 5, 2007. In denying the motions, the court (1) reduced the award on the Farahnik stock purchase claim, and (2) denied prejudgment interest on the damages arising from the sale of Trust No. 2’s Qualcomm stock in May 1992 and on the damages arising from Kadisha’s failure to protect the value of Trust No. l’s investment in Qualcomm stock in and after January 2000. The court invited the parties to file proposed amendments to the statement of decision in accordance with its order.

After considering the proposed amendments to the statement of decision, the trial court filed a minute order on March 2, 2007, stating that it had “reconsidered its prior ruling of February 5, 2007,” and was separately filing a signed order modifying its ruling on the new trial motions. The signed order filed on March 2, 2007, modified the order of February 5, 2007, by striking the reduction in the award on the Farahnik stock purchase claim, correcting a misstated date, and adding language explaining its decision. The order of March 2 explained that the court had denied prejudgment interest in its order of February 5 on the amounts awarded on two claims on equitable grounds so as to avoid “an undue penalty.” The court filed another order on March 7, 2007, modifying its order denying the new trial motions and its order of March 2, 2007, by denying prejudgment interest on the Farahnik stock purchase claim as well.

The court entered an amended judgment on March 12, 2007, reflecting these rulings. The amended judgment awards the Uzyels $59,060,048 in compensatory damages and disgorgement of profits, including prejudgment interest on only the award for the disgorgement of profits arising from Kadisha’s purchase of Trust No. 2’s interest in Carson ’93 and the award of damages arising from his use of trust funds to pay his legal expenses; $5 million in punitive damages; and attorney fees in an amount to be determined. Kadisha timely filed a notice of appeal from the amended judgment (No. B198007). The Uzyels also appealed the amended judgment.

15. Attorney Fees and Costs Awards

The Uzyels moved for an award of $21 million in attorney fees under section 17211, subdivision (b). The trial court found that Kadisha had no reasonable cause to oppose the Uzyels’ contest of his accounting, that he had opposed the contest in bad faith, and that the Uzyels therefore were entitled to recover attorney fees under the statute. The court concluded that the Uzyels had reasonably incurred more than $7 million in attorney fees, applied a multiplier of two, and awarded them $15,054,436 in fees, in an order filed on June 7, 2007. Kadisha moved for a new trial with respect to the fee award. The court reduced the award to $13,364,530 and denied the new trial motion. Kadisha timely appealed the order awarding fees (No. B201425).

The trial court awarded the Uzyels $334,832.84 in costs in an order filed on October 23, 2007. Kadisha filed a notice of appeal from the order on November 6, 2007 (No. B203804). The Uzyels also appealed the order. The trial court corrected and reduced the award to $250,850.64 in an order filed on November 28, 2007.

We have consolidated the five appeals.

CONTENTIONS

Kadisha contends in his appeal that (1) the award of the disgorgement of profits arising from Kadisha’s stock purchase from Farahnik in May 1991 was error; (2) the award of damages arising from the sale of Trust No. 2’s Qualcomm stock in May 1992 was error; (3) the award of damages arising from his failure to protect the value of Trust No. l’s investment in Qualcomm stock in and after January 2000 was error; (4) the award of damages arising from his use of trust funds to pay for his legal defense included excessive prejudgment interest; (5) the punitive damages were constitutionally excessive; and (6) the award of attorney fees under section 17211, subdivision (b) was unauthorized and excessive.

The Uzyels contend in their appeal that (1) they are entitled to the disgorgement of some of the profits earned by Kadisha on the Qualcomm stock that he purchased in August 1988 and September 1989; (2) they are entitled to recover lost profits arising from the sale of Trust No. 2’s Qualcomm stock in April 1999; (3) they are entitled to prejudgment interest on all of the amounts awarded; (4) the punitive damages are inadequate; and (5) they are entitled to recover all of their reasonable litigation expenses as costs under section 17211, subdivision (b), notwithstanding any limitations on recoverable costs under Code of Civil Procedure section 1033.5.

DISCUSSION

1. Governing Law

The Probate Code sets forth the duties of a trustee administering a trust and the measure of liability for breach of those duties. Those duties include, among others, a duty of loyalty, requiring the trustee to administer the trust solely in the interest of the beneficiaries (§ 16002, subd. (a)); a duty not to use trust property for the trustee’s own profit or for any other purpose unconnected with the trust (§ 16004, subd. (a)); and a duty to exercise reasonable care, skill, and prudence in administering the trust (§§ 16040, subd. (a), 16047), including a duty to diversify investments unless it is prudent not to do so (§ 16048). A trustee also has a fiduciary duty to act in good faith in the exercise of any discretionary powers conferred on the trustee by the trust instrument. (§ 16081, subd. (a).) A trustee’s violation of any duty owed to the beneficiaries is a breach of trust. (§ 16400.)

Section 16440 sets forth the measure of a trustee’s liability for a breach of trust:

“(a) If the trustee commits a breach of trust, the trustee is chargeable with any of the following that is appropriate under the circumstances:

“(1) Any loss or depreciation in value of the trust estate resulting from the breach of trust, with interest.

“(2) Any profit made by the trustee through the breach of trust, with interest.

“(3) Any profit that would have accrued to the trust estate if the loss of profit is the result of the breach of trust.

“(b) If the trustee has acted reasonably and in good faith under the circumstances as known to the trustee, the court, in its discretion, may excuse the trustee in whole or in part from liability under subdivision (a) if it would be equitable to do so.”

Section 16440 does not preclude any other remedy for breach of trust that is available under statutory or common law. (§ 16442.)

2. The Uzyels Are Not Entitled to the Disgorgement of Profits Made on Qualcomm Stock Purchased by Kadisha in August 1988 and September 1989

a. Trial Court Decision

The Uzyels sought the disgorgement of some of the profits earned by Kadisha on 662,000 shares of Qualcomm stock that he purchased in August 1988 and on 43,750 shares that he purchased in September 1989 by exercising warrants, or a constructive trust over some of those shares. They argued that they were entitled to those remedies because Kadisha’s misappropriation of trust funds enabled those purchases, even if the misappropriated funds could not be traced to the purchases. Specifically, they argued that although Kadisha spent the misappropriated Namco loan proceeds for other purposes, his failure to repay Trust No. 2 for those misappropriated funds made it possible for him to contribute $136,000 of his own money toward the $750,000 loan to Qualcomm in August 1988. They argued alternatively that the misappropriated Namco loan proceeds were commingled with other funds that were used to purchase the Qualcomm stock and could be traced to the purchases.

The trial court stated that in August 1988, Kadisha still owed Trust No. 2 $428,000 for the misappropriated Namco loan proceeds and that he could not have both repaid that amount and contributed $136,000 toward the loan to Qualcomm. The court rejected Kadisha’s argument that misappropriated trust funds must be traced to the stock purchases in order to support an award of disgorgement of profits under section 16440, subdivision (a)(2). The statement of decision stated, in a part discussing the governing law: “Kadisha incorrectly and throughout the trial steadfastly maintains that directly tracing the trustee’s personal profit to actual trust dollars is necessary to establish that the trustee profited from trust assets. This is tantamount to saying: (1) that causation requires tracing; and (2) that the only possible way a trustee can benefit from the trust assets or his position as trustee is where he uses actual trust dollars for a personal investment. Kadisha has not, however, offered a single authority that supports his position—nor are there any. In fact, the only decision that directly discusses this point—Nickel v. Bank of America ([9th Cir.] 2002) 290 F.3d 1134, 1138—says precisely the opposite, that under California law, ‘[tjraceability and causation are not the same.’ Emphasis added.”

The statement of decision stated later, in a part discussing this particular claim:

“[The Uzyels] make two contentions as foundational to claiming a portion of the Qualcomm stock belongs to the beneficiaries [,] neither of which the court adopts. The first contention is that Kadisha could not have both repaid the Namco Loan, as his fiduciary duties required him to do, and paid this $136,000. The second contention is that because Kadisha used the Namco Loan proceeds for his expenses he freed up $136,000 of his own funds for the Qualcomm stock deal—thus giving him the same benefit he would have had if he had applied the Namco Loan proceeds directly to the Qualcomm stock purchase.

“The court does not find, as [the Uzyels] allege, that Kadisha benefited from the use of trust funds in acquiring his Qualcomm stock on August 8, 1988.

“The court finds [the Uzyels] have produced insufficient evidence (more likely to be not true) to trace Qualcomm stock (under Probate Code Section 16420(a)(9)) because Kadisha commingled his funds in a common fund and purchased the Qualcomm stock from the commingled fund. The common fund claim is not uninteresting but is as leaky as the New Orleans levee when hit by Katrina.

“[The Uzyels] contend that Kadisha’s bank accounts in Union Bank and Wells Fargo Bank should be considered as one fund, like having cash in your right pocket and also your left pocket. But Kadisha’s purchase money came from the $3.5 million deposited in the Sanwa Bank, the source of which did not include any Trust 2 money.

“The [Uzyels’] position is that because Kadisha had two different bank accounts, one with Wells Fargo and the other with the Union Bank, this created a single fund, and, as such was the source of acquisition by Kadisha of his Qualcomm stock from Qualcomm is denied.

“Unfortunately, for [the Uzyels], Kadisha dodges equity by showing exactly where the Namco proceeds went. [The Uzyels] claim this to be false insulation from the law which declares a trustee cannot use tmst assets for his own benefit whether direct or indirect. But the claimed nexus of direct or indirect benefit to Kadisha is missing. Hence, [the Uzyels’] claim that a constructive trust (or damages) be imposed upon Kadisha’s acquisition of Qualcomm stock based on the Namco loan proceeds is denied.”

b. The Uzyels Have Shown No Legal Error with Respect to Tracing

The Uzyels contend the trial court erroneously required tracing in order to support an award of the disgorgement of profits made by Kadisha through his breach of trust under section 16440, subdivision (a)(2). The Uzyels contend this was legal error. We conclude that tracing is not required to support an award of the disgorgement of profits under the statute and that the trial court did not conclude to the contrary, so the Uyzels have shown no legal error.

We agree with the Uzyels that an award under section 16440, subdivision (a)(2) in these circumstances would not necessarily require the tracing of misappropriated funds to Kadisha’s stock purchases. Subdivision (a)(2) states that a trustee who commits a breach of trust is liable in the amount of “[a]ny profit made by the tmstee through the breach of trust, with interest.” In our view, profits made “through” the misappropriation of trust funds are not limited to profits made by investing those particular funds or their proceeds, such as could be identified through tracing. The statutory language does not expressly impose a tracing requirement.

A plaintiff seeking a money judgment in personam, as distinguished from an equitable interest in a particular asset, as a remedy for unjust enrichment need only establish a causal connection between the wrongful conduct and the profits to be disgorged. The plaintiff need not trace the misappropriated ftinds to a particular asset as long as the plaintiff can establish a sufficient causal relationship between the wrongful conduct and the defendant’s profits. (See SEC v. Banner Fund Internat. (D.C. Cir. 2000) 211 F.3d 602, 617; Rest.3d Restitution and Unjust Enrichment (Tent. Draft No. 5, Mar. 12, 2007) § 51, corns, b & e, pp. 164, 170-175.) As in cases of securities fraud (SEC v. Banner Fund Internat., supra, 211 F.3d at p. 617), the tracing of assets is not required for the disgorgement of profits earned by a trustee through a breach of trust. (See Nickel v. Bank of America, supra, 290 F.3d at pp. 1138-1139 [applying § 16440, subd. (a)(2)].)

We reject Kadisha’s argument that section 16420, subdivision (a)(9) imposes a tracing requirement with respect to an award of the disgorgement of profits under section 16440, subdivision (a)(2). Section 16420, subdivision (a) describes “in general terms” the basic remedies for a breach of trust. (Cal. Law Revision Com. com., reprinted at 54A West’s Ann. Prob. Code, supra, foil. § 16420, pp. 154-155; see also Recommendation Proposing the Trust Law (Dec. 1985) 18 Cal. Law Revision Com. Rep. (1986) p. 550 [“The proposed law seeks only to provide a brief description of the basic remedies for breach of trust as a guide to parties, without altering the basic principles of existing law.”].) Section 16420 does not limit the availability of any

particular remedy or explain its application in particular circumstances. The availability of a particular remedy and its application in particular circumstances are governed by the common law. (Cal. Law Revision Com. com., reprinted at 54A West’s Ann. Prob. Code, supra, foil. § 16420, pp. 154—155.) The basic remedies include monetary relief (§ 16420, subd. (a)(3)), an equitable lien or constructive trust (§ 16420, subd. (a)(8)), and recovery of a specific asset through tracing (§ 16420, subd. (a)(9)), among other remedies. A petitioner can seek the disgorgement of the trustee’s profits (§ 16440, subd. (a)(2)) through a money judgment against the trustee (§ 16420, subd. (a)(3)) or seek to establish an equitable interest in specific assets through a judgment in rem (§ 16420, subd. (a)(8), (9)). These are separate remedies; one remedy does not limit the other.

The Uzyels have shown no legal error, however, because they have not shown that the trial court required tracing. They argued both that they were entitled to recover a portion of the profits from Kadisha’s stock purchases because Kadisha benefited from the use of misappropriated funds even if the funds could not be traced to the purchases, and that the misappropriated funds could be traced to the purchases through a commingled fund. The statement of decision expressly stated that the Uzyels need not trace trust funds to Kadisha’s personal investments to show that he benefited from the use of those funds. In discussing this particular claim, the statement of decision first stated that Kadisha did not benefit from the use of trust funds in acquiring the stock in August 1988. It then stated that the Uzyels had failed to trace the funds to the stock purchases. We construe these as two separate findings. Contrary to the Uzyels’ argument, the court’s finding that Kadisha did not benefit from the use of trust funds was not based solely on its finding that the Uzyels had failed to establish tracing.

c. The Uzyels Have Shown No Error in the Finding That Kadisha’s Profits Are Not Attributable to Trust Funds

The Uzyels contend Kadisha’s use of misappropriated funds to pay his personal expenses and obligations enabled him to purchase Qualcomm stock using other money. They argue that he therefore earned profits on those purchases “through the breach of trust” (§ 16440, subd. (a)(2)) within the meaning of the statute. Alternatively, they contend the misappropriated funds can be traced to the August 1988 stock purchase. The trial court found that Kadisha did not benefit from the use of trust funds in purchasing the stock and that the misappropriated funds could not be traced to the purchases, as we have stated.

The disgorgement of profits is a remedy to prevent unjust enrichment. (1 Dobbs, Law of Remedies (2d ed. 1993) § 4.5(1), pp. 628-629.) The determination of the amount of a defendant’s profits attributable to wrongful conduct can be a difficult task. The Restatement Third of Restitution and Unjust Enrichment (Tent. Draft No. 5, supra) describes this as the problem of attribution. (Id., § 51, com. e, p. 171.) It involves questions of causation and remoteness, that is, how far to follow a chain of causation before deciding that the causal connection is too attenuated to justify a recovery. The presence or absence of but-for causation is not necessarily determinative of unjust enrichment. Moreover, in deciding whether the defendant’s profits are properly attributable to misconduct, the court should consider not only justice between the parties but also the incentives to be created for others. (Rest.3d Restitution and Unjust Enrichment (Tent. Draft No. 5, supra) § 51, com. e, pp. 172-175.)

The general rule stated in the tentative draft of the Restatement, which we deem applicable under California law to a trustee who has committed a breach of trust, is that profits subject to disgorgement include any form of consequential gains or other secondary enrichment “that is identifiable and measurable on the facts of the case and not unduly remote.” (Rest.3d Restitution and Unjust Enrichment (Tent. Draft No. 5, supra) § 51, subd. (4)(a).) The party seeking disgorgement “has the burden of producing evidence permitting at least a reasonable approximation of the amount of the wrongful gain. Residual risk of uncertainty in calculating net profit is assigned to the wrongdoer.” (Id., § 51, subd. (4)(d).)

We believe that, in light of the balancing of equities involved, abuse of discretion is the appropriate standard of review of the decision whether particular profits are fairly attributable to the trustee’s misconduct or, on the other hand, too remote to justify disgorgement. (City of Barstow v. Mojave Water Agency (2000) 23 Cal.4th 1224, 1256 [99 Cal.Rptr.2d 294, 5 P.3d 853] [stating that the trial court’s exercise of its equitable powers in awarding a remedy is properly reviewed for abuse of discretion]; Hirshfield v. Schwartz (2001) 91 Cal.App.4th 749, 771 [110 Cal.Rptr.2d 861] [same].) An abuse of discretion occurs if, in light of the applicable law and considering all of the relevant circumstances, the court’s decision exceeds the bounds of reason and results in a miscarriage of justice. (Shamblin v. Brattain (1988) 44 Cal.3d 474, 478-479 [243 Cal.Rptr. 902, 749 P.2d 339]; New Albertsons, Inc. v. Superior Court (2008) 168 Cal.App.4th 1403, 1422 [86 Cal.Rptr.3d 457].)

In our view, Kadisha’s misappropriation of $500,000 of the Namco loan proceeds in May 1988 and his failure to repay $428,000 of that amount as of August 1988 were not so closely connected with his payment of $136,000 toward the loan to Qualcomm in August 1988 as to compel the conclusion that Kadisha benefited from the use of trust funds in that transaction. The immediate source of the $136,000 was Kadisha’s personal Wells Fargo account into which he had deposited the $390,000 paid to him by his family and friends in return for his purchase of Qualcomm stock for them using the Sanwa loan funds. Thus, the ultimate source of the $136,000 was the Sanwa loan funds. The misappropriated trust funds neither directly nor indirectly facilitated the $136,000 payment. Despite Kadisha’s prior misappropriation and outstanding debt to the trust, we believe that the trial court’s conclusion that any connection between the $136,000 payment and his prior misappropriation and continuing debt to the trust was too attenuated to justify the disgorgement of profits was sound. We conclude that the Uzyels have shown no abuse of discretion.

d. The Uzyels Have Shown No Error in the Finding That Trust Funds Cannot Be Traced to the Stock Purchase

The Uzyels’ contention that the misappropriated funds can be traced to the August 1988 stock purchase is based on their argument that the $390,000 paid to Kadisha by his family and friends in August 1988 and deposited in his Wells Fargo Bank account was not reimbursement for Sanwa loan funds that Kadisha had used to purchase stock for his family and friends, but instead was a loan to Kadisha from his family and friends. The Uzyels argue that Kadisha repaid the loan one year later using $390,000 taken from Trust No. 2. The $390,000 deposited in "Kadisha’s Wells Fargo Bank account in August 1988 was the immediate source of his $136,000 contribution to the $750,000 loan to Qualcomm, as we have stated. The Uzyels argue that because trust money repaid the purported loan from Kadisha’s family and friends that funded the $136,000 payment, trust money ultimately funded the $136,000 payment and tracing was established.

The statement of decision expressly stated that Kadisha’s friends and family paid him $390,000 in August 1988 in reimbursement for the money that he had advanced them from the Sanwa loan funds to purchase their own Qualcomm stock. Other language in the statement of decision, however, seems to suggest that the trial court disbelieved this explanation and that the $390,000 payment to Kadisha actually was a loan from his family and friends. Contrary to the Uzyels’ argument that the trial court so found, we must resolve any ambiguity in this regard in favor of the judgment.

A statement of decision explains the factual and legal bases for the trial court’s decision in a nonjury trial. (Code Civ. Proc., § 632.) If the statement of decision fails to decide a controverted issue or is ambiguous, any party may bring the omission or ambiguity to the trial court’s attention either before the entry of judgment or in conjunction with a new trial motion or a motion to vacate the judgment under Code of Civil Procedure section 663. (Id., § 634.) If an omission or ambiguity is brought to the trial court’s attention, the reviewing court will not infer findings or resolve an ambiguity in favor of the prevailing party on that issue. (§ 634.) If an omission is not brought to the trial court’s attention as provided under the statute, however, the reviewing court will resolve the omission by inferring findings in favor of the prevailing party on that issue. (In re Marriage of Arceneaux (1990) 51 Cal.3d 1130, 1133-1134 [275 Cal.Rptr. 797, 800 P.2d 1227]; Fladeboe v. American Isuzu Motors, Inc. (2007) 150 Cal.App.4th 42, 59-60 [58 Cal.Rptr.3d 225].) If an ambiguity is not brought to the trial court’s attention as provided under the statute, the reviewing court will resolve the ambiguity by inferring that the trial court decided in favor of the prevailing party on that issue. (Code Civ. Proc., § 634.) To bring an omission or ambiguity to the trial court’s attention for purposes of Code of Civil Procedure section 634, a party must identify the defect with sufficient particularity to allow the court to correct the defect. (Ermoian v. Desert Hospital (2007) 152 Cal.App.4th 475, 498 [61 Cal.Rptr.3d 754].)

The Uzyels did not assert either before the entry of judgment or in conjunction with a new trial motion or a motion to vacate the judgment that the statement of decision failed to decide whether the $390,000 payment to Kadisha in August 1988 was a reimbursement or a loan or that the statement of decision was ambiguous in this regard. The Uzyels argued in their new trial motion that Kadisha’s $136,000 payment toward the $750,000 loan to Qualcomm could be traced to the trusts through commingled funds, but did not argue that the statement of decision failed to decide the nature of the $390,000 payment to Kadisha or was ambiguous on this issue. We conclude that any ambiguity was not brought to the attention of the trial court either before the entry of judgment or in conjunction with a new trial motion or a motion to vacate the judgment, and that we therefore must resolve the ambiguity in favor of the judgment by inferring that the court decided that the $390,000 payment to Kadisha was a reimbursement rather than a loan.

The predicate for the Uzyels’ tracing argument having failed, it follows that they have shown no error in the trial court’s finding that tmst funds could not be traced to the stock purchase. We express no opinion as to whether the facts as argued by them could establish tracing.

3. The Award of the Disgorgement of Profits Arising from Kadisha’s Stock Purchase from Farahnik in May 1991 Was Proper, but the Vacation of the Modification of the Award Is Void

a. Trial Court Decision

The Uzyels sought to recover the profits earned by Kadisha on 30,000 shares of Qualcomm stock that he purchased from Farahnik in May 1991 or, alternatively, to establish a constructive tmst over those shares. They argued that they were entitled to those remedies because misappropriated tmst funds had paid for Kadisha’s loans to Farahnik. According to the Uzyels, Kadisha drew on his Union Bank line of credit to lend a total of $221,000 to Farahnik, used $240,000 of the Namco loan proceeds belonging to Tmst No. 2 to repay the line of credit, and then paid for the 30,000 shares by canceling $210,000 of Farahnik’s $221,000 debt to Kadisha. The Uzyels argued that Kadisha had gained an advantage from his use of the tmst funds and should be required to disgorge the profits earned through his use of the tmst funds pursuant to section 16440, subdivision (a)(2). They argued alternatively that 960,000 shares of Qualcomm stock acquired as a direct result of the purchase through subsequent stock splits should be subject to a constructive tmst.

The trial court found that Kadisha’s misappropriation of tmst funds had enabled his acquisition of stock from Farahnik, but found that Kadisha did not use actual tmst money in making the loans and did not “ha[ve] his eye on Tmst 2’s probable assets at the time” that he made the loans to Farahnik. The statement of decision stated: “Because Kadisha used a portion of the Namco Loan proceeds (the property of Tmst 2) to wipe out his obligation to Union Bank, there was clearly substitute funding of $112,302 of the Farahnik loans by the use of Tmst 2’s money. Kadisha, by his actions and conduct, had to know that what he was doing with Tmst 2’s money was wrongful. He abstained from making any note to [Tjrast 2 concurrent with his taking of the Namco Loan proceeds. He never had a note signed by Farahnik to Tmst 2 concurrent with Kadisha paying off Union Bank with Tmst 2’s money. He gave six different, incorrect explanations for what he did with the Namco Loan proceeds prior to trial to prevent [the Uzyels] from discovering that he had used a portion of the proceeds to pay off his Union Bank line of credit for funds he had borrowed to loan to Farahnik. [f] . . . Kadisha must . . . disgorge any profit, benefit or advantage he acquired through his dealings with trust assets.”

The trial court found that Kadisha’s Union Bank line of credit was the source of $151,000 of the $221,000 lent to Farahnik, The court also found that Kadisha had contributed $38,698 of his own money, reduced $151,000 by that amount ($151,000 - $38,698 = $112,302), and determined that $112,302 was 53.48 percent of the $210,000 purchase price for the 30,000 shares of Qualcomm stock purchased from Farahnik in May 1991. The court found that the 30,000 shares held by Kadisha had grown to 480,000 shares by September 2000 due to stock splits, and concluded that the Uzyels were entitled to recover the value of 256,704 shares (53.48 percent of 480,000) upon the trusts’ termination. The court determined the value of those shares based on their lowest market price between September 14 and September 18, 2000 ($61.62 per share), and awarded the Uzyels a total of $15,818,000 on this claim.

Kadisha argued in his new trial motion that there was no causal connection between the misappropriation of trust funds and his purchase of Qualcomm stock from Farahnik. He also argued that the damages awarded on this claim were excessive and that any damages should be limited to a proportionate share of Kadisha’s profits earned until the time that he purportedly fully repaid Trust No. 2 for all misappropriated funds, with interest, on November 22, 1996. In an order filed on February 5, 2007, the trial court denied Kadisha’s new trial motion, but reduced the amount awarded on this claim from $15,818,000 to an amount to be determined based on the value of the shares as of November 22, 1996.

The order of February 5, 2007, stated: “The measure of damages and the amount thereof shall be modified to award damages based on the value of the number of Farahnik shares referred to in the Statement of Decision as of the date the period of [Kadisha’s] misappropriation ended, i.e. November 22, 199 [sic], less [Kadisha’s] acquisition cost.” It stated further, “Anything at variance herein with the filed Statement of Decision, shall be deemed incorporated in the said Statement of Decision.” A minute order filed on February 6, 2007, directed the Uzyels to submit a proposed amended judgment in accordance with the ruling on the new trial motion.

The Uzyels filed a response to the court’s order regarding amendments to the statement of decision on February 16, 2007, objecting to the reduction of the award. The trial court, in an order filed on February 17, 2007, requested further briefing on the issue. Kadisha argued that the Uzyels’ objections were improper and that the amount of damages based on the closing price of $40.83 on November 22, 1996, minus the cost of acquiring the shares, was $1,197,845. The trial court, in an order filed on March 2, 2007, stated that upon further consideration, its order of February 5, 2007, was modified to delete the reduction of the award. The court explained that the misappropriated trust funds enabled Kadisha to acquire a portion of the 30,000 shares of Qualcomm stock from Farahnik and that the Uzyels were entitled to the disgorgement of profits earned until the trusts’ termination.

b. The Order Vacating the Modification of the Award Is Void

Kadisha contends the trial court had no jurisdiction to restore the $15,818,000 award after ruling on the new trial motion and modifying the judgment. We agree.

A trial court ruling on a new trial motion must do so within 60 days after the earlier of the date of mailing by the court clerk or service by a party of a notice of entry of judgment or the date of filing of a notice of intention to move for a new trial. (Code Civ. Proc., § 660, 3d par.) If the court fails to rule on the motion within that time period, the motion is denied by operation of law. (Ibid.) An order ruling on a new trial motion after the 60-day period is beyond the court’s jurisdiction and is void. (Siegal v. Superior Court (1968) 68 Cal.2d 97, 101 [65 Cal.Rptr. 311, 436 P.2d 311].) .

Code of Civil Procedure section 662 authorizes a trial court in ruling on a new trial motion after a nonjury trial to modify or vacate the statement of decision or the judgment, in whole or in part, in lieu of granting a new trial. (Spier v. Lang (1935) 4 Cal.2d 711, 714 [53 P.2d 138].) It also authorizes the court to “reopen the case for further proceedings and the introduction of additional evidence with the same effect as if the case had been reopened after the submission thereof and before a decision had been filed or judgment rendered.” (Code Civ. Proc., § 662.) The effect of granting relief pursuant to Code of Civil Procedure section 662 is to deny the new trial motion. (Concerned Citizens Coalition of Stockton v. City of Stockton (2005) 128 Cal.App.4th 70, 77-78 [26 Cal.Rptr.3d 735]; Avery v. Associated Seed Growers, Inc. (1963) 211 Cal.App.2d 613, 621 [27 Cal.Rptr. 625] (Avery).) Thus, an order granting relief pursuant to Code of Civil Procedure section 662 is a “ruling on the motion” for a new trial within the meaning of Code of Civil Procedure section 660. (Taormino v. Denny, supra, 1 Cal.3d 679, 683.)

A trial court has no authority to rule on a new trial motion by granting relief pursuant to Code of Civil Procedure section 662 after the expiration of the 60-day period to rule on a new trial motion. (Tuck v. Tuck (1966) 245 Cal.App.2d 260, 263 [53 Cal.Rptr. 872]; Avery, supra, 211 Cal.App.2d at p. 629.) A court that timely rules on a new trial motion by vacating the statement of decision or the judgment, however, may file a new statement of decision or judgment after the expiration of the 60-day period. (Taormino v. Denny, supra, 1 Cal.3d 679, 683; Avery, supra, 211 Cal.App.2d at p. 628.) This is because an order vacating the statement of decision or the judgment necessarily contemplates further rulings by the court in the form of a new statement of decision or judgment, and Code of Civil Procedure section 662 imposes no limitation on the time to file a new statement of decision or judgment after the statement of decision or the judgment is timely vacated. (Avery, supra, 211 Cal.App.2d at p. 628.)

An order modifying the statement of decision or the judgment without vacating either differs from an order vacating the statement of decision or the judgment in that a modification order does not necessarily contemplate further rulings by the trial court. The question arises whether a modification of the statement of decision or the judgment must be completed within the 60-day period to rule on a new trial motion. The California Supreme Court in Spier v. Lang, supra, 4 Cal.2d 711, held that a minute order filed within the 60-day period to rule on a new trial motion, denying the motion and modifying the judgment, satisfied the requirements of Code of Civil Procedure section 660 and that documents filed after the 60-day period more formally amending the findings and the judgment consistent with the prior ruling were properly deemed effective as of the date of the minute order. (Spier, supra, at p. 715.) Similarly, De Arman v. Connelly (1933) 134 Cal.App. 173 [25 P.2d 24] held that, after ordering the denial of a new trial motion and modification of the judgment within the 60-day period to rule on the motion, the trial court properly filed documents formally amending the findings and the judgment consistent with the prior ruling after the expiration of the 60-day period. (Id. at p. 180; see also Medak v. Cox (1970) 12 Cal.App.3d 70, 73-74 [90 Cal.Rptr. 452]; Holland v. Superior Court (1932) 121 Cal.App. 523, 532 [9 P.2d 531].)

The trial court here did not vacate the statement of decision or the judgment. Instead, the court in its order of February 5, 2007, specified particular modifications to its decision, including the reduction of the award on this claim. We construe the order as a modification of both the statement of decision and the judgment. The order was timely because it was filed within 60 days after the service on Kadisha of a notice of entry of judgment on December 8, 2006. (Code Civ. Proc., § 660.) Then, after the expiration of the 60-day period to rule on the new trial motion, the court in its order of March 2, 2007, vacated its modification of the award. The later order was not consistent with the prior order and cannot be viewed as implementing its prior modification of the award. Instead, the later order vacated the prior modification of the award and constituted a new ruling on the new trial motion. We conclude that the order of March 2 was untimely and therefore was beyond the court’s jurisdiction and void because it was made after the expiration of the 60-day period to rule on the new trial motion.

Our conclusion that the trial court had no jurisdiction to vacate its prior modification of the award also is compelled by the rule that a final order granting or denying a new trial motion, regularly made, exhausts the trial court’s jurisdiction and cannot be set aside or modified by the trial court except for clerical error or to grant relief under Code of Civil Procedure section 473. (Wenzoski v. Central Banking System, Inc. (1987) 43 Cal.3d 539, 542 [237 Cal.Rptr. 167, 736 P.2d 753] (Wenzoski).) This rale ordinarily is invoked where the court, having granted a new trial motion, later reconsiders its ruling and denies the motion (e.g., Bloomquist v. Haley (1928) 204 Cal. 258, 260 [268 P. 364]; Drinkhouse v. Van Ness (1927) 202 Cal. 359, 369-370 [260 P. 869]), or the court, having denied a new trial motion, later reconsiders its ruling and grants the motion (e.g., Stevens v. Superior Court (1936) 7 Cal.2d 110, 112-114 [59 P.2d 988]; Hinrichs v. Maloney (1959) 169 Cal.App.2d 544, 546 [337 P.2d 471]). We believe that the same principle applies where the court, having timely modified the statement of decision or the judgment, later reconsiders its ruling and substitutes a different ruling inconsistent with the initial ruling. We hold that such a later ruling is beyond the court’s jurisdiction and void.

Clarke v. Fiedler (1941) 44 Cal.App.2d 838 [113 P.2d 275], cited by the Uzyels, is not on point. The trial court in that case vacated the findings and the judgment in a minute order timely ruling on a new trial motion. (Id. at pp. 841-842, 848.) The minute order specifically referred to particular findings, but the new findings and new judgment apparently included changes not specifically identified in the minute order. (Id. at p. 848.) Clarke stated that having vacated the findings and the judgment, the trial court was authorized to file new findings and a new judgment, “and it was not required that such new findings be limited to those expressly referred to in the valid minute order setting aside, within the statutory time, the original findings and judgment.” (Ibid.) Here, in contrast, the trial court in its order of February 5, 2007, did not vacate the statement of decision or the judgment, but instead only modified the statement of decision and the judgment. The court had no jurisdiction to reconsider and set aside, in whole or in part, its timely ruling on the new trial motion.

We conclude that the order of March 2, 2007, restoring the award of $15,818,000 is void and that the award