                     FOR PUBLICATION

      UNITED STATES COURT OF APPEALS
           FOR THE NINTH CIRCUIT

 ROBERT P. MOSIER, as Receiver for                  No. 13-56453
 Private Equity Management Group
 Inc. and Private Equity Management                   D.C. No.
 Group, LLC and their subsidiaries                 2:11-cv-02666-
 and affiliates,                                       PSG-E
                   Plaintiff-Appellant,

                      v.                              OPINION

 STONEFIELD JOSEPHSON, INC., CPAs,
 a California corporation,
                  Defendant-Appellee.

          Appeal from the United States District Court
              for the Central District of California
          Philip S. Gutierrez, District Judge, Presiding

                    Argued and Submitted
            October 23, 2015—Pasadena, California

                     Filed February 23, 2016

      Before: Harry Pregerson and Stephen S. Trott, Circuit
     Judges and William H. Stafford,* Senior District Judge.

                      Opinion by Judge Trott


 *
   The Honorable William H. Stafford, Jr., Senior District Judge for the
U.S. District Court for the Northern District of Florida, sitting by
designation.
2              MOISER V. STONEFIELD JOSEPHSON

                           SUMMARY**


                       California Tort Law

    The panel affirmed the district court’s summary judgment
in favor of accountants on tort claims brought by a court
appointed receiver against the accountants who audited the
financial statements for fraudulent offerings of the companies
for which the receiver was appointed.

    The panel affirmed the district court’s grant of summary
judgment on the receiver’s claims for professional negligence
and aiding and abetting the wrongful conversion of the
companies’ assets under California law. The panel held that
the receiver did not raise a genuine issue as to causation
because he did not show that either the companies or its
investors relied on the audits. The panel also affirmed the
district court’s grant of summary judgment on a claim of
unjust enrichment.


                             COUNSEL

Randall A. Smith (argued), Ronald Rus, Sara A. Milroy, and
Laurel R. Zaeske, Brown Rudnick LLP, Irvine, California, for
Plaintiff-Appellant.

Stephen J. Tully (argued) and Efren A. Compeán, Garrett &
Tully, P.C., Westlake Village, California, for Defendant-
Appellee.

  **
     This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
            MOISER V. STONEFIELD JOSEPHSON                3

Michael C. Kelley, Bradley H. Ellis, Mark E. Haddad, and
Collin P. Wedel, Sidley Austin LLP, Los Angeles, California,
for Amici Curiae California Society of Certified Public
Accountants and American Institute of Certified Public
Accountants.


                        OPINION

TROTT, Senior Circuit Judge:

    Appellant Robert Mosier is the court appointed receiver
for Private Equity Management Group, Inc. and its
interrelated subsidiaries and affiliates (collectively,
“PEMGroup”). Mosier was appointed after the former
directors and mangers of PEMGroup used the companies to
defraud investors of approximately $950 million in what the
district court called a “massive Ponzi scheme.”

   Mosier sued Appellee Stonefield Josephson, Inc., the
CPAs who audited the financial statements for six of
PEMGroup’s fraudulent offerings. Mosier contends that
Stonefield’s reports and related conduct materially
misrepresented PEMGroup’s financial condition, allowing
PEMGroup’s management to prolong the life of their scheme
and to loot and to dissipate assets from PEMGroup.
According to Mosier, if Stonefield had performed its audits
competently or simply resigned after it caught wind of
management’s fraud, PEMGroup could not have attracted
new investors. Mosier seeks $51 million from Stonefield in
compensation for damages the firm allegedly caused to
PEMGroup.
4            MOISER V. STONEFIELD JOSEPHSON

     Mosier’s first amended complaint stated three causes of
action: 1) professional negligence, 2) aiding and abetting the
wrongful conversion of PEMGroup’s assets, and 3) unjust
enrichment. On summary judgment challenging all three
claims, the district court dismissed the first two, holding that
Mosier had not raised a genuine issue as to the existence of an
essential aspect of his case: proof of causation. Specifically,
the district court held that to show causation, Mosier
ultimately would have to demonstrate that either PEMGroup
or its investors relied on Stonefield’s audits, but that Mosier
had utterly failed to satisfy this legal requirement. Moreover,
the court concluded that any reliance on the audits by the
investors would have been unreasonable. As to claim three
for unjust enrichment, the court also granted summary
judgment. Although Stonefield challenged this cause of
action in its motion, Mosier did not respond to or defend it in
his response.

   We have jurisdiction over this timely appeal pursuant to
28 U.S.C. § 1291, and we affirm.

                               I

                      BACKGROUND

    Danny Pang founded PEMGroup. Together with
PEMGroup’s directors and management, Pang established
Genesis Voyager Equity Corporation (“GVEC”) and its
related entities GVEC II and GVEC IV as subsidiaries of
PEMGroup. These entities, known as “special purpose
vehicles,” eventually became parts of an integrated swindle.

    GVEC made debt and equity offerings in life insurance
policies and commercial real estate mortgages. These
             MOISER V. STONEFIELD JOSEPHSON                     5

offerings allegedly raised $951 million. In its offering
memoranda, GVEC told investors to expect a return on their
investments of between approximately six to seven percent.
However, eventually the “returns” GVEC paid did not come
from its investments. GVEC fraudulently paid its investors
with money from new investors and by selling GVEC’s assets
to GVEC II and GVEC IV at over-inflated prices. In addition
to paying old investors with new investor money,
management used the ill-gotten money from unsuspecting
investors to prop up GVEC by paying GVEC’s overhead and
retiring older offerings. Management also looted money from
PEMGroup for their own personal benefit.

    In 2003, GVEC hired Stonefield to audit the financial
statements for six of its offerings. Stonefield issued ten audit
reports for fiscal years 2003 through 2007. Mosier alleged
that these reports fell below Generally Accepted Auditing
Standards (“GAAS”) in a variety of ways. However,
Stonefield’s cardinal sin in Mosier’s eyes was Stonefield’s
alleged failure sufficiently to warn investors that GVEC’s
management had not accurately reported the value of its
assets in accordance with Generally Accepted Accounting
Principles (“GAAP”). Mosier estimates that GVEC misstated
the value of eighty to ninety percent of the assets in the
financial statements.

    Beginning with its March 2004 report, a wary Stonefield
issued “qualified” opinions about their client’s operations.
“A qualified opinion states that, except for the effects of the
matter(s) to which the qualification relates, the financial
statements present fairly, in all material respects, the financial
6             MOISER V. STONEFIELD JOSEPHSON

position, results of operations, and cash flows of the entity in
conformity with generally accepted accounting principles.”1

    Extending through the end of Stonefield’s relationship
with PEMGroup, each of Stonefield’s audit reports expressed
significant reservations about its client’s improper method of
assigning value to its assets and the unknown effects of those
questionable practices on its financial statements. For
example, Stonefield’s “Independent Auditors’ Report” dated
March 4, 2005 says,

        [T]he Company has valued certain
        investments (“Growth Special Assets”) at a
        method similar to an amortized cost basis,
        which basis values the investment at historical
        cost. Any potential unrealized gain resulting
        from these Growth Special Assets is then
        amortized on a straight-line basis over their
        estimated life. In our opinion, accounting
        principles generally accepted in the United
        States of America require that all investments
        be presented at fair value, and all
        corresponding changes in fair value between
        balance sheet dates be recorded to the
        statement of operations. The Company has
        elected to not disclose the exact nature of all
        of the special assets for confidentiality
        purposes, which is also a departure from
        accounting principles generally accepted in
        the United States of America. The effects on


    1
   Reports on Audited Financial Statements, AU § 508.10, available at
http://www.aicpa.org/Research/Standards/AuditAttest/DownloadableD
ocuments/AU-00508.pdf.
            MOISER V. STONEFIELD JOSEPHSON                 7

       the financial statements of the preceding
       practice is not reasonably determinable.

   In a summary note to Stonefield’s report, the misgivings
continued:

       The Company is recognizing unrealized gain
       resulting from the Growth Special Assets . . .
       on a straight-line basis method over the
       estimated life of the Growth Special Assets,
       which method is not in accordance with
       accounting principles generally accepted in
       the United States of America (“US GAAP”).
       US GAAP requires that all investments be
       presented at fair value, and all corresponding
       changes in fair value between balance sheet
       dates be recorded to the statement of
       operations. The effects on the financial
       statements of this non US GAAP practice are
       not reasonably determinable.

   In a letter dated April 18, 2008 addressed to “Board of
Directors and Inventors Genesis Voyager Equity
Corporation,” Stonefield warned that GVEC’s

       [r]ecording of the sale of Special Assets were
       not in accordance with accounting principles
       generally accepted in the United States of
       America. The Special Assets of the Portfolio
       were sold to an affiliated entity that shares the
       same advisor as [GVEC]. Furthermore the
       valuation for the sale price of the Special
       Assets could not be concluded to be Fair
8           MOISER V. STONEFIELD JOSEPHSON

       Market Value independently of management’s
       internal valuation.

    In Mosier’s opinion, however, Stonefield’s series of
qualified reports did not go far enough. Given the extent to
which GVEC admittedly misstated asset values, Mosier
alleges that Stonefield should have issued either an adverse
opinion or refused to issue any opinion at all and
simultaneously to unload GVEC as a client. “An adverse
opinion states that the financial statements do not present
fairly the financial position, results of operations, or cash
flows of the entity in conformity with generally accepted
accounting principles.” AU § 508.10, supra.

    Stonefield’s involvement with GVEC and PEMGroup
went beyond issuing qualified audit reports. Stonefield
attended a meeting with at least one investor, although the
record does not reveal what Stonefield said during the
meeting. Also, Stonefield authored “comfort letters,” which
stated that its qualified audit reports were prepared in
accordance with GAAS and fairly described the “quality or
reliability of the [relevant] financial statements.” Two of
Stonefield’s auditors served as a character reference for
Danny Pang and another of PEMGroup’s managers. Finally,
Stonefield prepared for GVEC’s board of directors and
investors net asset valuations and limited reports concerning
two of the sales between GVEC and its affiliates.

    Stonefield never had an entirely comfortable relationship
with GVEC. Early on, Stonefield learned that its predecessor
had resigned as GVEC’s CPA after GVEC misrepresented the
predecessor’s involvement with GVEC’s initial funding
period. Furthermore, the manner in which PEMGroup
structured GVEC and its offerings – e.g, soliciting only
            MOISER V. STONEFIELD JOSEPHSON                   9

Chinese investors, basing its operations in the British Virgin
Islands, and promising seemingly unsustainable rates of
return – raised Stonefield’s concerns. As time went on,
Stonefield began seriously to question GVEC’s operations,
management’s integrity and competence, and whether
Stonefield should resign. Ultimately, Stonefield did resign,
but not until April 29, 2009, after it learned that the SEC had
filed a complaint against Pang and PEMGroup, and that the
FBI had arrested Pang.

                              II

                       DISCUSSION

   1. On whose behalf may Mosier sue Stonefield?

   To understand this controversy, some focus is useful.

    At the early stages of the litigation, Stonefield moved to
dismiss Mosier’s First Amended Complaint pursuant to Fed.
R. Civ. P. 12(b)(6) on the ground that Mosier lacked standing
to sue on behalf of the defrauded investors. The court
concluded that Mosier had standing to sue Stonefield, but not
to do so on behalf of the investors. The court explained its
analysis and ruling as follows:

           In general, a receiver has capacity to bring
       only such actions as could have been brought
       by the entity or individual whose property is
       in a receivership, and thus may sue only to
       redress injuries to the entity in receivership.
       Grant v. A.B. Leach & Co., 280 U.S. 351, 50
       S.Ct. 107, 74 L.Ed 470 (1930); see also
       Scholes v. Lehmann, 56 F.3d 750, 753 (7th
10        MOISER V. STONEFIELD JOSEPHSON

     Cir. 1995). In contrast, equity receiver or
     trustee of an entity cannot pursue claims
     where the alleged harm was suffered only by
     third-party investors in that entity. See
     Williams v. California 1st Bank, 859 F.2d
     664, 666 (9th Cir. 1988); cf. Hays v. Adam,
     512 F. Supp. 2d 1330, 1341 (N.D. Ga. 2007)
     (noting that third party investors may
     nonetheless indirectly benefit from the
     receiver’s action as creditors of the
     receivership). As the Ninth Circuit has noted,
     “[a]lthough the line between ‘claims of the
     debtor, which a trustee [or equity receiver] has
     statutory authority to assert, and ‘claims of
     creditors,’ which [Caplin v. Marine Midland
     Grace Trust Co., 406 U.S. 416, 92 S.Ct. 1678,
     32 L.Ed.2d 195 (1972)] bars the trustee from
     pursuing, is not always clear, the focus of the
     inquiry is on whether the Trustee is seeking to
     redress injuries to the debtor itself caused by
     the defendants’ alleged conduct.” Smith v.
     Arthur Andersen LLP, 421 F.3d 989, 1002
     (9th Cir. 2005).

         Here, upon reviewing the FAC, the Court
     finds that the allegations show that, in
     bringing this action, the Receiver seeks to
     redress injuries caused to PEMGroup and its
     affiliate entities by Stonefield’s alleged
     misconduct. The Receiver, for example, has
     alleged that Stonefield owed, and breached, a
     contractual duty of care to PEMGroup and
     GVEC to conduct and audit of the company’s
     financial statements using the appropriate
     MOISER V. STONEFIELD JOSEPHSON                 11

industry standards. FAC ¶¶ 30–32, 43–47.
He goes on to assert that Stonefield’s breach
of this duty allowed the PEMGroup Principals
to dissipate GVEC’s assets through transfers
to other Tranches when GVEC was unable to
pay its operating expenses, which ultimately
led to the “retirement” of GVEC portfolios
once those portfolios had been looted of their
assets. FAC ¶¶ 25–26, 35. Further, according
to the pleading, “[h]ad the misuse of funds
been revealed earlier, Pang and the
PEMGroup Management Team would have
been stopped and investigated, preventing
millions of dollars of additional losses.” FAC
¶ 35.

    While certain allegations in the FAC could
conceivably be said to allege injury to
investors as well, this does not necessarily
vitiate the Receiver’s standing to pursue
claims on behalf of the receivership entities.
Rather, as the Ninth Circuit has
acknowledged, so long as an entity in
receivership has suffered harm, an equity
receiver has standing to pursue a claim for
such injuries – even if the creditors of the
receivership entity may also have a claim
arising from the same underlying misconduct.
Smith v. Arthur Andersen LLP, 421 F.3d 989,
1002–04 (9th Cir. 2005) (noting that the
“dissipation of assets limited the firm’s ability
to repay its debts . . . is not, however, a
concession that only the creditors, and not [the
corporate entity] itself, have sustained any
12        MOISER V. STONEFIELD JOSEPHSON

     injury. [I]t is a recognition of the economic
     reality that any injury to an insolvent firm is
     necessarily felt by its creditors.”). . . .

         Here, similarly, the Receiver has alleged
     that Stonefield’s failures to (1) conduct
     rigorous audits in accordance with GAAS
     standards, FAC ¶ 35; (2) to make disclosures
     regarding, inter alia, allegedly improper inter-
     Tranche transfers, FAC ¶¶ 32, 46; and (3)
     Stonefield’s allegedly false and misleading
     audit reports were all significant factors in
     concealing Pang and PEMGroup Principals’
     misuse of investor funds. FAC. ¶ 35.
     According to the pleading, had the misuse of
     funds been revealed earlier, additional losses
     would have not been incurred. Id. The Court
     finds that, as in Smith, these allegations
     qualify as a corporate injury traceable to
     Stonefield’s conduct for which the Receiver is
     authorized to seek recovery. Additionally,
     while Stonefield contends that PEMGroup’s
     use of funds from later Tranches to purchase
     life insurance policies from earlier GVEC
     Tranches at inflated prices actually benefitted
     GVEC in that it “served to maintain the
     illusion of the financial and operational
     strength of PEMGroup,” Reply 1:13–16,
     evaluation of this assertion requires the Court
     to look beyond the pleadings. At this stage in
     the proceedings, however, the Court must take
     as true the Receiver’s allegations that the
     PEMGroup and GVEC entities were harmed
     by, inter alia, their inability to repay various
             MOISER V. STONEFIELD JOSEPHSON                   13

        note and debenture holders as a result of
        Stonefield’s alleged misconduct. See Cousins
        v. Lockyer, 568 F.3d 1063, 1067 (9th Cir.
        2009).

    The consequences of the district court’s Rule 12(b)(6)
holding on standing, which Mosier does not challenge on
appeal, is that his lawsuit requires a viable cause of action not
on behalf of the investors, but on behalf of PEMGroup.

    Accordingly, there are two avenues Mosier as a receiver
might pursue against Stonefield on behalf of the derelict
PEMGroup. The first is a professional negligence claim, i.e.,
that Stonefield provided PEMGroup with substandard and
misleading audit reports which wrongly enabled PEMGroup
to continue to exist as it plundered its own assets. This path
alleged a breach by Stonefield of its contractual duty to
PEMGroup. The second avenue is an aiding and abetting
claim, i.e., that Stonefield created substandard and misleading
audit reports which caused investors to continue to pour
money into PEMGroup, and which (1) kept it alive,
(2) facilitated its illicit fundraising activities, (3) pumped up
the enterprise, (4) gave it a badge of legitimacy, and
(5) brought in millions of dollars which Danny Pang and
associates then stole.

    2. Reasonable reliance is a necessary component of
       Mosier’s professional negligence and aiding and
       abetting claims.

   No matter which avenue Mosier pursues, his professional
negligence as well as his aiding and abetting claims require
Mosier to prove that Stonefield’s tortious conduct was a
proximate cause of PEMGroup’s harm. See Williams v.
14          MOISER V. STONEFIELD JOSEPHSON

Wraxall, 33 Cal.App.4th 120, 132 (1995) (“Causation [in a
professional negligence claim] requires proof that the
defendant’s conduct was a ‘substantial factor’ in bringing
about the harm to the plaintiff.” (emphasis added)); Neilson
v. Union Bank of California, N.A., 290 F. Supp. 2d 1101,
1135 (C.D. Cal. 2003) (“[C]ausation is an essential element
of an aiding and abetting claim, i.e., plaintiff must show that
the aider and abettor provided assistance that was a
substantial factor in causing the harm suffered.” (emphasis
added)) cited with approval in American Master Lease LLC
v. Idanta Partners, Ltd., 225 Cal. App. 4th 1451, 1476
(2014).

    Given Mosier’s case, in order to prove causation he must
ultimately prove reasonable reliance, even though reliance per
se is not a technical element of his causes of action.
Stonefield’s work could not have been a “substantial factor”
or given “substantial assistance” to PEMGroup in soliciting
new investors unless the potential investors relied on
Stonefield’s reports. The district court therefore properly
concluded that to survive summary judgment, Mosier would
have to offer substantial evidence – meaning sufficient
evidence to justify a verdict in his favor – that investors
reasonably relied on Stonefield’s audits in order to show
causation. The cases the district court cited support that
conclusion. See Smolen v. Deloitte, Haskins & Sells,
921 F.2d 959, 964 (9th Cir. 1990); see also In re NM
Holdings Co., LLC, 622 F.3d 613, 619 (6th Cir. 2010)
(“Although Gold is correct in pointing out that reliance is not
per se an element of professional negligence, proof of reliance
is necessary here in order to show that Deloitte’s allegedly
deficient audits were the cause in fact of Venture’s tenuous
financial position and resulting bankruptcy.” (emphasis
added)); F.D.I.C. v. Ernst & Young, 967 F.2d 166, 170 (5th
            MOISER V. STONEFIELD JOSEPHSON                  15

Cir. 1992) (“If nobody relied upon the audit, then the audit
could not have been a substantial factor in bringing about the
injury.” (internal quotation marks omitted)).

     Mosier disagrees that proof of reasonable reliance is
necessary in order to show causation, relying on Smith v.
Arthur Andersen LLP, 421 F.3d 989 (9th Cir. 2005). There,
the bankruptcy trustee alleged that the debtor’s auditors
committed professional malpractice by concealing the
debtor’s deepening insolvency from its outside directors and
investors. Id. at 1003. The auditor’s concealment thereby
artificially prolonged the life of the debtor corporation,
wasting corporate assets that could have otherwise gone to its
creditors in the process. Id. at 1003. Smith held that the
bankruptcy trustee’s “deepening insolvency” theory stated an
injury-in-fact sufficient to give the trustee standing. Id. But
standing was the only issue we decided in that case. We
explicitly declined to say anything about the merits of the
lawsuit, not even whether the complaint stated a valid claim
for relief. Id. at 1006. Smith is of no help to Mosier.

   3. Avenue #1, for a contractual breach of duty to
      PEMGroup.

   As the district court correctly held,

       As participants in the fraud, GVEC and
       PEMGroup “cannot have relied on the truth of
       the fraudulent representations” in the audits.
       See Cenco Inc. v. Seadman & Seidman,
       686 F.2d 449, 454 (7th Cir. 1982). In other
       words, “[b]ecause [GVEC and PEMGroup]
       knew of and participated in the fraud, [they]
       could not have justifiably relied on
16          MOISER V. STONEFIELD JOSEPHSON

       [Defendant’s] audits to uncover a fraud of
       which it already was aware.”               See
       Agribiotech, 2005 WL 4122738, at *12; see
       also PNC Bank, Ky., 899 F. Supp. at 1406
       (“[I]t is clear that HMC as an institution did
       not rely upon the audits conducted by Grant
       Thornton in any manner in shaping its
       conduct, since it was aware, through the
       knowledge of its owners and top officers, of
       fraudulent conduct affecting the accuracy of
       the financial statements.”). In sum, “the
       uncontested facts show fraud permeating the
       top management of [GVEC and PEMGroup].
       In such a case the corporation should not be
       allowed to shift the entire responsibility for
       the fraud to its auditors.” Cenco, 686 F.2d at
       456.

            The Receiver’s other arguments regarding
       causation all miss the point. The Receiver
       appears to believe the Defendant is seeking to
       assert an in peri delicto defense or attempting
       to impute knowledge from PEMGroup to the
       Receiver. Opp. 18:4–20:2. While the
       Receiver is correct that this Court has already
       rejected the notion that any wrongdoing or
       knowledge may be imputed from PEMGroup
       to the Receiver, this conclusion is irrelevant to
       the present motion. Defendant does not now
       seek to impute knowledge from PEMGroup to
       the Receiver . . . .

This correct analysis disposes of Avenue #1.
            MOISER V. STONEFIELD JOSEPHSON                  17

   4. Avenue #2, for reliance by the investors.

    Before the district court and at oral argument, Mosier
admitted he did not submit direct evidence that investors
relied on Stonefield’s audit reports or how PEMGroup used
them. During oral argument on the motion for summary
judgment, the district court asked, “Is there any evidence that
one investor was provided with the audit report?” Mosier’s
attorney answer was, “[T]he answer to that specific question
is no, your Honor, but the evidence does show [circumstantial
evidence of investor reliance].”

    This void becomes all the more problematic considering
what Mosier said on May 15, 2013 in his deposition
regarding potential investor witnesses, a deposition that took
place almost two months before the hearing on the motion for
summary judgment:

       Q (Counsel for Stonefield) Well, you are
       telling me that certain investors have told you
       they relied upon Stonefield’s audit reports for
       GVEC tranches to do something, and I just
       want to know specifically?

       A (Robert Mosier) Let me draw a picture for
       you. I’m having a meeting with the investors
       and they are all sitting around this table
       talking about what induced them to come to
       PEM. And one investor said, I relied on the
       audit report. And the other investors agreed
       with him, yes, that’s correct. We all relied on
       the audit reports.
18           MOISER V. STONEFIELD JOSEPHSON

       Q And which investor, what individual at the
       investors, representative of the investor said
       that?

       A I would have to go back and tell you who
       were at the meetings.

Mosier concedes he made a deliberate decision to oppose
summary judgment without direct evidence of reliance by
investors because he believed the circumstantial evidence of
reliance and causation was sufficient. When the issue arose
in district court, the court excluded his information of alleged
reliance as hearsay, and correctly so. Mosier agrees with and
does not challenge that ruling on appeal.

    We find it difficult on this record to swallow the idea that
PEMGroup showed Stonefield’s qualified audits to investors
in Taiwan. Mosier would have us believe that numerous
Taiwanese investors lost millions to this fraud, yet he has not
produced a single victim willing to step forward to help in a
process that could indirectly recoup his or her losses. Were
the audits translated into their language? Do they read
English? In his deposition, Mosier testified that he had a
meeting with defrauded investors to discuss what “induced
them to come” to PEMGroup. Mosier said – and this was
excluded hearsay – that the investors said, “We all relied on
the audit reports.” Did Mosier ask the investors for any
paperwork corroborating their assertion? At least one of
them might have had paperwork and files to scaffold their
alleged statements and Mosier’s assertions. Did he ask them
for it? It’s axiomatic that when stronger evidence of a fact is
available, weaker evidence becomes even more so. If Conan
Doyle had authored this scenario, he could have called it
“The Case of the Missing Link.”
            MOISER V. STONEFIELD JOSEPHSON                 19

     Mosier argues in the alternative that there is “strong”
circumstantial evidence of investor reliance. He points to
(1) GVEC’s offering memoranda, which stated that
Stonefield was the auditor; (2) emails between Stonefield’s
accountants questioning GVEC’s integrity; (3) the “comfort”
letters; (4) GVEC’s request for a statement explaining the
impact of a qualified opinion; (5) and a May 23, 2006 “To
Whom It May Concern” letter in which Stonefield stated that
GVEC’s “financial statements present fairly, in all material
respects, the financial position and results of operations and
cash flows of each of the six projects.”

    The fatal problem for Mosier is that he has no evidence
whatsoever demonstrating how these materials were used
and, given Stonefield’s qualifications, what weight, if any,
investors placed on them. Instead, he asks us to draw the
inference from his circumstantial evidence that indeed
investors did rely on them. This equivocal evidence does not
warrant such an inference. First, because of the clear
qualifications in Stonefield’s audit reports, which amount to
red flags, it is just as likely – without any evidence to the
contrary – that PEMGroup did not show them to people it
was attempting to deceive. It defies logic to assume that a
crook would waive cautionary “buyer-beware” alerts in front
of potential innocent victims of a Ponzi scheme. Stonefield’s
qualifications previously quoted amount to a warning that
PEMGroup was using improper and unreliable valuation
methods, methods that violated GAAP; and that PEMGroup’s
financial statements might not be reliable.

   In United States v. Arthur Young, 465 U.S. 805, 818 n.14
(1984), the Supreme Court said,
20           MOISER V. STONEFIELD JOSEPHSON

        The inclusion in an audited financial
        statement of anything less than an unqualified
        opinion [, such as a qualified opinion,] could
        send signals to stockholders, creditors,
        potential investors, and others that the
        independent auditor has been unable to give
        the corporation a clean bill of financial health.

    In this regard, we agree with the district court that “[in]
light of the statements in the audits regarding [GAAP]
violations, it would not have been reasonable to rely on the
audits to accurately reflect GVEC’s financial condition . . . .”

    Mosier has yet another problem. With the exception of
the ill-advised glowing May 23, 2006 letter signed by Rick
Poole, none of the materials provides an opinion on GVEC’s
financial statements. Instead, the materials either say nothing
about the financials, or they direct the reader to the qualified
audits. The “comfort” letters repeated the qualifications. The
May 23, 2006 letter does provide an opinion on GVEC’s
financials, but, again, the record is devoid of any substantial
evidence that investors relied on it.

    Mosier also relies on (1) an agenda from an investor
meeting that allotted time for Stonefield; (2) Poole’s
character references for Pang and another manager; (3) the
net asset valuations, (4) the limited reports regarding the sales
of GVEC’s assets, and (5) the turncoat deposition testimony
of Wilbur Quon, the CFO of PEMGroup, that “Stonefield
audit reports were “[t]ypically . . . sent to our sales office in
Taiwan.”

    Once again, Mosier offers no evidence showing how
these materials were used, or what weight a reasonable
             MOISER V. STONEFIELD JOSEPHSON                    21

investor would have placed on them. Reasonable reliance on
them is dubious at best. Stonefield’s net asset valuation
stated its scope was “limited to presenting in the form of
financial statements information that is the representation of
management. We have not audited or reviewed the
accompanying statement of net assets and, accordingly, do
not express an opinion or any other form of assurance on it.”
As quoted earlier, Stonefield’s April 18, 2008 reports on the
sale of GVEC’s assets stated that the sales were not recorded
“in accordance with the accounting principals [sic] generally
accepted in the United States of America”; were “sold to an
affiliated entity that share[d] the same Advisor as [GVEC];
and “the valuation for the sale price of [GVEC’s assets] could
not be concluded to be Fair Market Value independently of
management’s internal valuation.” GVEC’s Chief Financial
Officer Wilbur Quon’s evidence that the audit reports were
“typically sent” to Taiwan suffers the same infirmity as the
rest of Mosier’s evidence: what happened to them when they
got there?

    The district court correctly said that “[t]he record is
entirely devoid of any actual, admissible evidence of reliance
by anyone – PEMGroup or GVEC principals, investors, or
anyone else.” The court was correct. We have combed the
record from top to bottom and have yet to uncover significant
evidence that any part of Stonefield’s work product was
delivered to a single investor. Without either direct or
substantial circumstantial evidence of reasonable reliance,
Mosier would simply hold Stonefield liable for granting its
“imprimatur to PEMGroup and GVEC.” What would amount
to a strict liability standard in this context finds no support in
the law.
22           MOISER V. STONEFIELD JOSEPHSON

     5. Circumstantial Evidence

    Mosier repeatedly reminds us that “[t]he law makes no
distinction between the weight to be given to either direct or
circumstantial evidence.” Of course he is correct, but he
misunderstands the difference in terms of what this means.
As the rest of the jury instruction (which he fails to quote)
says, “Direct evidence is direct proof of a fact,” such as an
investor testifying that he relied on Stonefield’s audit reports.
Circumstantial evidence, on the other hand, “is proof of one
or more facts from which you could find another fact.” Ninth
Circuit Model Civil Jury Instructions 1.9 (2015). In other
words, the probative value of circumstantial evidence
depends entirely upon the strength of the inferences that can
be drawn from the proven circumstances, and in this case,
whether the equivocal circumstances Mosier offers would be
sufficient to support a verdict in his favor. They are not.
Anderson v. Liberty Lobby, 477 U.S. 242, 252 (1986) (“The
mere existence of a scintilla of evidence in support of the
plaintiff’s position will be insufficient; there must be
evidence on which the jury could reasonably find for the
plaintiff.”).

     6. Expert Testimony

    The final piece of Mosier’s offered evidence was his
expert’s opinion that a proper reaction by Stonefield “would
likely have had a significant adverse effect on attracting and
obtaining funds from investors . . . .” The basis for the
expert’s “would likely have had” opinion seems to be his
experience with how audit reports are generally used. He did
not examine GVEC’s sales practices or the specific effect on
Stonefield’s audits on GVEC’s actual investors. This aspect
of the expert’s purely speculative opinion therefore does not
            MOISER V. STONEFIELD JOSEPHSON                23

support reliance or sufficient evidence of causation to go to
a jury.

   7. The district court did not err in sua sponte
      dismissing Mosier’s unjust enrichment claim.

    Although Stonefield challenged Mosier’s unjust
enrichment claim on summary judgment, Mosier inexplicably
did not respond. Normally, we do not consider on appeal
issues not properly raised before the district court.
Accordingly, Mosier has forfeited this issue. However, even
if we were to entertain it, he has no case.

    Mosier claimed that Stonefield was unjustly enriched by
accepting fees from PEMGroup ($770,365.54) and GVEC
($122,725.33) which Stonefield had earned in a “negligent
and reckless” manner by providing defective services.
Without the parties’ input, the district court dismissed
Mosier’s unjust enrichment claim, holding that it could not
survive in absence of Mosier’s other claims. The district
court was correct.

    After oral argument, we requested Mosier to explain his
theory of unjust enrichment against Stonefield. His
unpersuasive explanation is that Stonefield earned $894,190
for services that knowingly facilitated PEMGroup’s Ponzi
scheme, not so much to the financial detriment of the crooked
PEMGroup, but to the investors who lost money. Mosier’s
intention is to return Stonefield’s fees to the investors,
obviously not to PEMGroup. We are not aware of, nor has
Mosier provided us with, any cases supporting this novel
“pass through” theory. Moreover, “[A]s a matter of law, a
quasi-contract action for unjust enrichment does not lie
where, as here, express binding agreements exist and define
24          MOISER V. STONEFIELD JOSEPHSON

the parties’ rights.” Cal. Med. Ass’n, Inc. v. AETNA U.S.
Healthcare of Cal., Inc., 94 Cal. App. 4th 151, 172 (2001).

    The contractual engagement agreement between
Stonefield and PEMGroup stated that Stonefield would not be
responsible for any misrepresentations made by GVEC.

       We understand that you will provide us with
       the basic information required for our audit
       and that you are responsible for the accuracy
       and completeness of that information. We
       will advise you about appropriate accounting
       principles and their application and will assist
       in the preparation of your financial
       statements, but the responsibility for the
       financial statements remains with you. This
       responsibility includes the maintenance of
       adequate records and related internal control
       structure, the selection and application of
       accounting principles, and the safeguarding of
       assets. You are responsible for adjusting the
       financial statements to correct material
       misstatements and for confirming to us in the
       management representation letter that the
       effects of any uncorrected misstatements
       aggregated by us during the current
       engagement and pertaining to the latest period
       presented are immaterial, both individually
       and in the aggregate, to the financial
       statements taken as a whole. Management is
       also responsible for identifying and ensuring
       that the entity complies with applicable laws
       and regulations.
            MOISER V. STONEFIELD JOSEPHSON                25

                          .   .   .

       Because of the importance of management’s
       representations to the effective performance
       of our services, Genesis Voyager Equity
       Corporation will release Stonefield Josephson
       and its personnel from any claims, liabilities,
       costs and expenses relating to our services
       under this letter attributable to any
       misrepresentations in the representation letter
       referred to above.

    If anyone breached this contract, it was PEMGroup, not
Stonefield. Mosier admits PEMGroup deceived Stonefield
and kept them in the dark about their scheme. Stonefield was
not unjustly enriched vis-a-vis PEMGroup, period.
PEMGroup got what it deserved: qualified reports. This
result was hardly unjust. Unless the investors relied on
Stonefield’s audit reports, and unless Mosier can prove his
claims of negligence and wrongful conversion as an
underlying wrong, which he cannot, the investors – who have
no standing in this case – are in no better position against
Stonefield than PEMGroup. Thus, Mosier’s failure to come
forward with any substantial evidence of causation as to
either claim is also fatal to his claim of unjust enrichment.
Ironically, Mosier claims PEMGroup was a victim of unjust
enrichment because Stonefield did not put them out of
business.
26          MOISER V. STONEFIELD JOSEPHSON

                             III

THE RULES GOVERNING SUMMARY JUDGMENT

    Mosier argues that the district court overstepped its
bounds and ignored the rules of summary judgment. The
record read as a whole refutes his claim. Mosier simply did
not advance sufficient probative evidence of causation to
support a verdict in his favor, and thus to merit consideration
by a jury – and the district court said so: “Upon review of the
record and the arguments before the Court, the Court
concludes that the present motion turns on whether the
Receiver has raised a triable fact regarding whether
Defendant’s conduct caused the alleged losses.” The
sentences that Mosier cherry-picks out of context from the
district court’s order do not prove otherwise.

     AFFIRMED.
