SASCO vo CSI Electrical Contractors, Inc. 2/4 ( 2022 )

Filed 12/19/22 SASCO vo CSI Electrical Contractors, Inc. 2/4
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION FOUR
SASCO, B322686
Plaintiff and Appellant, (Santa Clara Superior
Ct. No. 19CV352165)
v.
CSI ELECTRICAL CONTRACTORS,
INC., et al.,
Defendants and Respondents.
APPEAL from an order of the Superior Court of Santa
Clara County, Cynthia C. Lie, Judge. Affirmed.
Murchison & Cumming, Jean A. Dalmore, Matthew E. Voss
for Plaintiff and Appellant.
Payne & Fears, Daniel F. Fears, Benjamin A. Nix, Damon
Rubin for Defendants and Respondents CSI Electrical
Contractors, Andrew Soffa, Troy Carlton and David Weir.
INTRODUCTION
SASCO appeals a sanctions order under Civil Code section
3426.4 (section 3426.4), part of the Uniform Trade Secrets Act,
awarding $299,647.50 in attorney fees as a sanction for bringing
a claim of misappropriation of trade secrets in bad faith. SASCO
sued its former employees Andrew Soffa, David Weir, and Troy
Carlton, as well as their new employer, CSI Electrical
Contractors, Inc., alleging that defendants improperly convinced
seven of SASCO’s employees to move to CSI. SASCO alleged the
defendants used confidential and trade secret information,
including employee salary and benefit information, to solicit
these employees. After months of evading discovery, SASCO
dismissed all defendants except Soffa from the case, dropped its
misappropriation of trade secrets cause of action, and alleged
that Soffa breached his contracts with SASCO by attempting to
entice certain employees away from SASCO. Defendants then
moved for attorney fees under section 3426.4 as a sanction for
bringing the misappropriation of trade secrets cause of action in
bad faith. The superior court granted the motion, and SASCO
appealed.
We affirm. SASCO does not challenge the superior court’s
finding that the misappropriation claim was objectively specious,
but asserts the court erred in finding that SASCO acted with
subjective bad faith. SASCO’s actions in litigation and its own
statements demonstrate subjective bad faith, and therefore the
court’s conclusion was not erroneous. SASCO also contends the
court erred in failing to apportion the attorney fees between the
defense of the misappropriation cause of action and other causes
of action. We find no abuse of discretion in the court’s conclusion
2
that the legal and factual issues were intertwined, and therefore
apportionment was not warranted.
FACTUAL AND PROCEDURAL BACKGROUND
A. Complaint
SASCO and CSI are industrial electrical contractors. Soffa
was the CEO of SASCO; he left SASCO in July 2018. Weir was
vice president of SASCO’s Northern California office; he left
SASCO in March 2019. Carlton was a senior group president in
SASCO’s Northern California office; he left SASCO in March
2019. Soffa, Weir, and Carlton went to work for CSI after leaving
SASCO.
In July 2019, SASCO filed a complaint against CSI, Soffa,
Weir, and Carlton alleging “an ongoing, premeditated raid of
SASCO’s officers, employees, and clients” from SASCO’s
Northern California office. SASCO alleged that in March 2019,
defendants “orchestrated . . . the defection to CSI of a majority of
SASCO’s top managers and executives . . ., diverting significant
sums of client revenue to CSI.” It alleged that defendants
“planned and orchestrated the Raid” “to inflict the greatest
amount of damage on SASCO.”
Under the heading “SASCO’s Trade Secrets,” SASCO
alleged that “information pertaining to SASCO’s employees,
including their salaries, pay structure, benefits provided, bonuses
and similar financial information is confidential and proprietary.
This information is carefully safeguarded by SASCO, and would
be of great value to any competitor of SASCO.” It also alleged,
“Among the types of additional information SASCO considers to
be its trade secrets and confidential and proprietary information
is, without limitation, . . . the salaries and benefits SASCO
provides to its employees. The disclosure of these trade secrets
3
and other confidential and proprietary information would put
SASCO at a competitive disadvantage, as this information is only
valuable to the extent SASCO is able to maintain its secrecy.”
SASCO further alleged that the individual defendants had access
to these trade secrets, and “only received SASCO’s confidential
and trade secret information on the condition of their promises to
protect that information set forth in” certain employment-related
agreements, including the Buy-Sell Agreement and the Employee
Manual and Confidentiality Agreement. SASCO alleged, “On
information and belief, the Individual Defendants used their
knowledge of SASCO’s pay structure, salary information, benefit
structure, in combination with its representations that it would
be taking over SASCO’s Northern California work, to improperly
solicit SASCO employees, who had no intention of leaving SASCO
until contacted by Defendants.”
SASCO alleged eight causes of action: breach of contract,
breach of the covenant of good faith and fair dealing, unfair
competition, intentional interference with prospective economic
advantage, misappropriation of trade secrets, breach of fiduciary
duty, breach of the duty of loyalty, and conspiracy. Several
causes of action included allegations that defendants used
confidential and trade secret information in soliciting SASCO
employees. For example, SASCO alleged the individual
defendants breached their respective contracts by “violating the
covenant not to solicit by soliciting SASCO employees for
positions at CSI.” The trade secrets SASCO alleged defendants
misappropriated included “the identities, salaries and benefit
information for SASCO employees.” Other causes of action
alleged defendants’ “raid” of SASCO employees constituted unfair
4
competition, interference with prospective economic advantage,
and breaches of fiduciary duty and the duty of loyalty.
B. Discovery motions and dismissals
CSI filed several motions to compel further discovery
responses. It served discovery requests on SASCO in August
2019, and after SASCO served only objections and asked for
multiple extensions, CSI filed motions to compel further
responses in December 2019. SASCO served its first substantive
responses to the discovery requests in February 2020, along with
its opposition to the motion to compel. The court denied CSI’s
motions as moot, but imposed a sanction of $3,900 on SASCO.
CSI filed motions to compel again in June 2020, asserting
that SASCO’s discovery responses “were evasive, incomplete and
were served without producing a single responsive document.”
CSI stated that despite months of attempts to resolve the ongoing
discovery dispute, SASCO still had not served supplemental
responses or any responsive documents.
On July 22, 2020, SASCO filed a request for dismissal
without prejudice of its cause of action for misappropriation of
trade secrets. Dismissal was entered the same day.
The hearing on CSI’s discovery motions was held on
September 3, 2020, and the court took the matter under
submission. In November 2020, before the court ruled on CSI’s
discovery motions, SASCO moved for leave to file a first amended
complaint (FAC). SASCO stated that its intent was to “reduce[ ]
the scope of the dispute and remove[ ] claims against” CSI, Weir,
and Carlton.
The court issued a written ruling granting CSI’s discovery
motions on December 14, 2020. The court noted that SASCO’s
cause of action for misappropriation of trade secrets had been
5
dismissed, and SASCO had argued that the discovery directed at
that cause of action therefore was not relevant to the remainder
of the action. The court rejected this argument, stating that the
dismissal “still leaves open the possibility of asserting the same
allegations in support of the other causes of action[ ]. [CSI]
points out that [SASCO] does exactly this with respect to the first
cause of action for breach of contract.” The court therefore found
that the requests “are not overbroad and are relevant to the
subject matter involved in the pending action.” The court also
found that “a plurality” of SASCO’s interrogatory responses “fail
to provide anything remotely approaching substantive
information,” and were “patently evasive.” The court granted the
motions, ordered SASCO to provide substantive discovery
responses and documents, and imposed sanctions in the amount
of $12,500.
On January 7, 2021, SASCO dismissed CSI, Weir, and
Carlton from the case. The FAC, filed on January 29, 2021,
asserted three causes of action against Soffa alone: breach of
fiduciary duty, breach of the duty of loyalty, and breach of
contract. SASCO alleged that while on a company-sponsored
fishing trip, Soffa told employees Ron Watanabe and Matt
Metoyer that he was leaving SASCO and encouraged the two to
join him at CSI. SASCO alleged that Soffa’s actions violated the
Buy-Sell Agreement and the Employee Manual and
Confidentiality Agreement.
C. Motion for attorney fees
1. Motion
In March 2020, defendants filed a motion seeking $437,045
in attorney fees under section 3426.4, which states in part, “If a
claim of misappropriation is made in bad faith, . . . the court may
6
award reasonable attorney’s fees and costs to the prevailing
party.” “‘[B]ad faith’ as used in section 3426.4 consists of both
‘objective speciousness of the plaintiff’s claim . . . and [ ]
subjective bad faith in bringing or maintaining the claim.’”
(SASCO v. Rosendin Electric, Inc. (2012) 207 Cal.App.4th 837,
845 (Rosendin Electric), quoting Gemini Aluminum Corp. v.
California Custom Shapes, Inc. (2002) 95 Cal.App.4th 1249, 1262
(Gemini).)
Defendants asserted that SASCO’s dismissed
misappropriation claim “was brought and maintained in bad
faith because it was objectively specious given that there is no
evidence substantiating it,” and SASCO “had subjective bad faith
. . . because it wanted to harass and punish the individual
Defendants for leaving SASCO and CSI for hiring them.” They
also argued that SASCO’s evasion in discovery drove up
defendants’ attorney fees.
Defendants argued that SASCO never provided any
evidence of misappropriation of trade secrets. They asserted that
CSI served discovery requests seeking information about
SASCO’s trade secret claims more than 19 months earlier, and
“despite two sets of motions to compel, two orders granting
discovery sanctions (totaling $16,400), and an Order . . . that it
give proper, complete responses,” SASCO still never produced
any discovery responses supporting its claim. Defendants also
noted that although the court ordered SASCO to pay $12,500 in
sanctions by January 11, SASCO had not paid the sanction,
instead telling CSI to seek it in an enforcement action.
Defendants stated that SASCO also refused to make its witnesses
available for depositions.
7
Defendants argued that SASCO had a pattern of suing
former employees, citing Rosendin Electric, supra, 207
Cal.App.4th 837, in which SASCO sued former employees and
their new employer for misappropriation of trade secrets,
dismissed the action while a motion for summary judgment was
pending, and was required to pay attorney fees under section
3426.4. The Court of Appeal affirmed in that case the superior
court’s finding that SASCO’s misappropriation claim was
objectively specious. (Rosendin Electric, supra, 207 Cal.App.4th
at pp. 848-849.)
In support of their motion, defendants filed over 550 pages
of evidence, including declarations from defendants and their
counsel, itemized attorney fee statements, CSI’s discovery
requests, some of SASCO’s discovery responses, the court’s orders
on the discovery motions, deposition notices, and correspondence
between counsel. In Soffa’s declaration, he discussed
conversations with SASCO’s chairman of the board, Larry
Smead, who “on several occasions . . . expressed hostility towards
former high-level employees who had left SASCO to work for
competitors, even if they had done nothing wrong. Mr. Smead
shared with me his approach to litigation. On several occasions
between 2012 and when I left SASCO in 2018, Smead told me
that he does not care how much money he spends on lawsuits as
long as his opponents, including former employees and
competitors, are also spending money, and that he attempts to
outspend his opponents in litigation to wear them down. During
these conversations, Mr. Smead also told me that he is willing to
spend money on litigation against former employees and the
companies that hired them to make them regret their decision to
leave SASCO and to hire SASCO’s former employees. Mr. Smead
8
makes the decision on SASCO filing lawsuits against former
employees and the companies that hired them.”
2. Opposition
SASCO opposed defendants’ motion, asserting that its
misappropriation claim was not made in bad faith. Rather, “[t]he
impetus of this case is Soffa’[s] breach of loyalty,” in that he
“solicited two high level SASCO employees while he was still
SASCO’s CEO,” and “used his knowledge of their confidential
compensation as part of the solicitation.”
SASCO also asserted, “Carlton had a company phone that
contained his communications and emails. Carlton smashed the
device before he left. [Citation.] The bizarre and outrageous
conduct appeared to be an attempt to destroy incriminating
evidence. In early February 2020, when SASCO determined that
the memory chip had been destroyed and that no data could be
retrieved, it withdrew its claim for misappropriation of trade
secrets.”
SASCO contended that nine employees left SASCO to work
for CSI, and “SASCO believed that Defendants solicited specific
SASCO’s employees based on their knowledge of these employees
that was gained during Defendants’ interactions with these
employees” and “using the false rumors Defendants spread about
SASCO closing its Northern California office.”
SASCO stated that a “trade secret is different than
confidential information,” and asserted that in its discovery
responses “SASCO only identified salaries, wages, benefits,” and
other employee information as “confidential information” rather
than trade secrets. SASCO asserted that it was no longer
contending that Soffa used trade secrets, and argued that
9
“Defendants refuse to accept that the Misappropriation Claim is
long gone.”
SASCO also argued that any attorney fee award must be
apportioned to only the trade secret claim, and the causes of
action were not so intertwined that apportionment was
impossible. It also asserted that defendants were not entitled to
fees incurred after February 2020, when SASCO served discovery
responses stating that the misappropriation of trade secrets
cause of action was withdrawn. SASCO also argued that
defendants sought “improper and grossly inflated fees,” including
nearly $100,000 for the motions to compel, even though the court
had already awarded fees for those motions. It further argued
that “[t]he entire litigation was limited as the Defendants did not
take or defend a single deposition, or answer a single
interrogatory or other written discovery directed towards the
‘Misappropriation Claim.’”
SASCO submitted over 300 pages of evidence in support of
its opposition, including declarations of several SASCO
employees, a declaration of SASCO’s counsel, some of SASCO’s
discovery responses, and some of the contracts that served as the
basis of SASCO’s claims. SASCO also objected to some of
defendants’ evidence.
Defendants filed a reply in support of their motion,
responded to SASCO’s objections, and filed objections to some of
SASCO’s evidence.
3. Hearing and ruling
At the hearing, the court asked defendants’ counsel to
begin and stated, “I’m going to need to ask you to keep this brief.
I have read your voluminous pleadings, although I’m not going to
pretend to have digested all of the nuances of all the exhibits to
10
them.” After defense counsel argued, the court turned to
SASCO’s counsel and asked some questions, including “[T]o the
extent that you have argued that it’s relevant that SASCO took a
very streamlined approach to the litigation, didn’t propound
much in the way of discovery, why should that be relevant to the
court when Mr. Smead’s view, as the apex employee of SASCO, is
that it’s the defendants who have to prove that they didn’t
misappropriate?” SASCO’s counsel stated, “I’m not sure we have
taken that position in our papers, that it’s their burden.” The
court responded, “Not in your papers. It’s in his deposition
testimony as summarized in Rosendin Electric.” SASCO’s
counsel argued that Rosendin Electric was from “a decade ago”
and there had been no depositions in this case. SASCO’s counsel
also stated that the streamlined litigation argument “really went
to the amount of fees that the defense is requesting, which . . . we
thought were inappropriate.” The court took the matter under
submission.
The court issued a 14-page written order granting the
motion and awarding defendants a reduced amount of attorney
fees: $299,647.50. Discussing SASCO’s subjective bad faith, the
court stated, “This is not SASCO’s first occasion of defending
allegations of bad faith under section 3426.4, and Defendants
make a persuasive case under Evidence Code section 1101,
subdivision (b), of SASCO’s common plan or scheme of malicious
prosecution of its former employees and competitors who hire
them. But even disregarding SASCO’s effective concession of
subjective bad faith in Rosendin Electric and similar findings as
to SASCO’s pursuit of other former employees,” defendants
presented evidence that Smead told Soffa he is “willing to spend
money on litigation against former employees and the companies
11
that hired them to make them regret their decision to leave
SASCO and hire SASCO’[s] former employees.” The court
continued, “SASCO’s election to not rebut Soffa’s account of
Smead’s express admission is itself a tacit admission of a pattern
and practice of harassment. (Cf. Evid. Code, § 1221.) SASCO’s
conduct of this litigation and particularly its approach to the
trade secret allegations circumstantially confirms the inference of
subjective bad faith.”
The court continued, “SASCO expressly concedes that it
pursued its objectively specious misappropriation cause of action
for the purpose of thwarting competition, which under Rosendin
Electric will satisfy subjective bad faith.” The court stated, “The
minimal competent evidence proffered by SASCO suggests—at
best—that SASCO entertained a good-faith belief in the merits of
its claim that Defendant Andrew Soffa breached his fiduciary
duty to SASCO by unsuccessfully soliciting a single employee,
Ron Watanabe, during an Alaska fishing trip hosted by a client,
when Soffa was still SASCO’s chief executive officer. But as
Defendants correctly note, good faith in bringing suit against
Soffa for thus allegedly breaching his fiduciary duties or
employment agreements does nothing to immunize SASCO from
liability under section 3426.4 for its objectively specious claim
that Defendants misappropriated SASCO’s trade secrets.”
The court also stated, “As for defendant Carlton’s mobile
phone, SASCO’s insinuation that Carlton’s smashed phone was
in some manner responsible for its failure to produce evidence, or
[was] itself evidence of its good faith is specious. As a threshold
matter, nothing in the record suggests what, if anything, SASCO
believed in good faith it might discover on the phone itself as it
existed prior to the termination of Carlton’s employment . . . .” In
12
a footnote discussing the phone, the court stated, “SASCO’s prior
bad-faith tactics are relevant under Evidence Code section 1101,
subdivision (b), not only as evidence of a common scheme or
modus operandi, but also as evidence tending to establish
SASCO’s motive to either fabricate helpful evidence or obstruct
access to damaging evidence.” The court also referred to
“SASCO’s refusals to comply with discovery orders,[ ] its belated
dismissal of the [trade secret] claims, and its refusal to produce
Larry Smead, the one SASCO principal who decides whether to
sue,” and the fact that “SASCO has never in this case identified
its purported trade secrets.”
The court rejected SASCO’s argument that the fees should
be apportioned by cause of action or limited to the time before
SASCO stated that it was withdrawing its misappropriation
claim. The court grouped the misappropriation cause of action
with “the unfair competition, intentional interference and
conspiracy causes of action that SASCO does not (and cannot)
seriously dispute were derivative thereof.” The court pointed out
that even “the allegations of the [FAC] are replete with express
references to SASCO’s purported trade secrets,” noting that the
contract Soffa allegedly breached was the same contract that
allegedly protected employment information as trade secrets.
The court noted that SASCO employed a “self-servingly fluid
definition and redefinition of terms to suit the occasion. It is
SASCO that has long insisted that the ‘confidential and
proprietary information’ it continues to allege that Soffa used is
among ‘SASCO’s Trade Secrets’” as that term was defined in the
original complaint. “Having staked out that expansive definition
of its trade secrets, SASCO is ill-equipped to retroactively
redefine terms to suggest that Defendants’ defense of the trade
13
secrets cause of action was not inextricably intertwined with its
allegations of unlawful solicitation.”
The court then discussed the reasonableness of defendants’
requested fees, and deducted $120,997.50 from the requested
amount due to duplicative billing and work that the court
determined was not necessary to the litigation. The court
ordered SASCO to pay a total of $299,647.50 in attorney fees “as
a sanction for bringing in subjective bad faith its objectively
specious claim of misappropriation of trade secrets.”
SASCO filed a motion seeking “correction” of the fees
order, asserting that “the FAC is not ‘replete with express
references to SASCO’s trade secrets’” as the court stated in its
order. Meanwhile, however, SASCO’s counsel filed a motion to be
relieved as counsel, citing irreconcilable differences with the
client. The motion to withdraw was granted before the hearing
on SASCO’s motion for correction of the order, and SASCO did
not appear at the hearing. The court set an Order to Show Cause
(OSC) regarding SASCO’s failure to appear at the hearing.
SASCO did not appear at the OSC, so the court set a second OSC
re: dismissal of the complaint. When SASCO did not appear at
the second OSC, the court dismissed the case without prejudice.
SASCO’s new counsel later moved to vacate the dismissal, but
the court denied the motion.
Meanwhile, SASCO timely appealed the attorney fees
order, which is appealable under Code of Civil Procedure section
904.1, subdivision (a)(12).
DISCUSSION
SASCO presents four claims of error: (1) the court erred in
determining that SASCO’s misappropriation claim was made in
bad faith, (2) the court’s comment at the hearing that it had not
14
“digested all of the nuances” of the voluminous exhibits
constituted prejudicial error, (3) the court’s references to
SASCO’s conduct in Rosendin Electric constituted improper use
of character evidence, and (4) the court failed to properly
apportion the attorney fees. We consider each contention.
“Section 3426.4 authorizes the trial court to award attorney
fees as a deterrent to specious trade secret claims. [Citation.]
Because the award is a sanction, a trial court has broad
discretion in awarding fees.” (FLIR Systems, Inc. v. Parrish
(2009) 174 Cal.App.4th 1270, 1275 (FLIR Systems), citing
Gemini, supra, 95 Cal.App.4th at p. 1262.) An award of attorney
fees under section 3426.4 “‘will not be overturned in the absence
of a manifest abuse of discretion, a prejudicial error of law, or
necessary findings not supported by substantial evidence.’”
(Rosendin Electric, supra, 207 Cal.App.4th at p. 845.)
A. Subjective bad faith
“‘[B]ad faith’ for purposes of section 3426.4 requires
objective speciousness of the plaintiff’s claim, . . . [and] subjective
bad faith in bringing or maintaining the claim.” (Gemini, supra,
95 Cal.App.4th at p. 1262.) SASCO does not challenge the court’s
finding that its misappropriation claim was objectively specious.
Rather, SASCO argues only that it did not have subjective bad
faith in bringing and maintaining its misappropriation of trade
secrets claim.
“Subjective bad faith under section 3426.4 means the action
was commenced or continued for an improper purpose, such as
harassment, delay, or to thwart competition.” (Rosendin Electric,
supra, 207 Cal.App.4th at p. 847.) “Subjective bad faith may be
inferred by evidence that appellants intended to cause
unnecessary delay, filed the action to harass respondents, or
15
harbored an improper motive.” (FLIR Systems, supra, 174
Cal.App.4th at p. 1278.) “On appeal from such an order, the
appellant has an ‘uphill battle’ and must overcome both the
‘sufficiency of evidence’ rule and the ‘abuse of discretion’ rule.”
(Id. at p. 1275.)
SASCO makes no effort to argue that the superior court’s
ruling was unsupported by the evidence. Rather, SASCO argues
on appeal, as it did below, that it “filed this lawsuit merely to
enforce anti-solicitation provisions in its contracts with former
employees and defend its Northern California office against
Respondent CSI’s aggressive and incessant raiding and to protect
its employees.” As the superior court pointed out in its order,
because SASCO stated that it was attempting to “defend” against
CSI’s “raiding,” SASCO has “expressly concede[d] that it pursued
its objectively specious misappropriation cause of action for the
purpose of thwarting competition, which under Rosendin Electric
will satisfy subjective bad faith.” SASCO does not address this
finding, nor offer any suggestion that it constituted an abuse of
discretion. This concession alone is sufficient to support the
court’s finding of subjective bad faith.
Even considering SASCO’s additional contentions
arguendo, the court did not abuse its discretion and its findings
are supported by substantial evidence. SASCO asserts that the
“litigation was limited, as [defendants] did not take or defend any
depositions, or respond to any interrogatories or other written
discovery directed toward the misappropriation claim that was
alleged in the Complaint.” However, neither section 3426.4 nor
the relevant case law holds that fees are warranted only if the
litigation reaches a certain level of complexity. Moreover, the
litigation was not limited, in part because SASCO’s evasive
16
discovery required CSI to file multiple rounds of motions to
compel. SASCO waited until the opposition on the first round of
discovery motions was due before filing further discovery
responses, and the court found those responses “fail[ed] to
provide anything remotely approaching substantive information,”
and were “patently evasive.” SASCO also does not dispute
defendants’ argument that it refused to make witnesses available
for depositions. SASCO’s repeated evasion and delay tactics
suggest SASCO was not litigating in good faith.
SASCO also argues that the superior court improperly
referenced a letter sent by defense counsel to SASCO’s counsel
early in the case, in which defense counsel challenged SASCO’s
ability to prove its misappropriation of trade secrets claim, and
compared the case to Rosendin Electric and another case in which
a court awarded attorney fees against SASCO. SASCO did not
respond to the letter. The court noted in its order that “‘“[b]ad
faith may be inferred where the specific shortcomings of the case
are identified by opposing counsel, and the decision is made to go
forward despite the inability to respond to the arguments
raised.””’ (FLIR Systems, supra, 174 Cal.App.4th at p. 1283,
quoting Gemini, supra, 95 Cal.App.4th at p. 1264.)
SASCO argues that its failure to respond to defense
counsel’s letter is not evidence that it knew its allegations were
groundless. However, as the court recognized, lack of a response
to the letter was only one piece of circumstantial evidence among
many. The court also noted that SASCO did not dispute that
Smead told Soffa that he attempts to outspend opponents in
litigation to wear them down. In addition, the court observed
that there was a lack of evidence that SASCO acted in good faith,
a lack of evidence regarding what SASCO expected to find on
17
Carlton’s phone, and SASCO only offered a “belated and evasive
response to demands for specification of the trade secrets at
issue.” The court’s conclusion that the totality of the evidence
supported a finding of subjective bad faith was not an abuse of
discretion.
B. The nuances of the exhibits
SASCO next argues that the court erred by ruling on the
motion after stating to counsel at the hearing, “I have read your
voluminous pleadings, although I’m not going to pretend to have
digested all of the nuances of all the exhibits to them.” SASCO
asserts, “It is prejudicial error for the trial court to make a ruling
on the Motion without understanding the exhibits filed in
support of and in opposition thereto.”
As defendants correctly point out, the court did not issue its
written ruling until three months after the motion hearing.
Nothing in the record suggests the court failed to understand the
evidence by the time the court ruled on the motion. In its two-
paragraph argument on this issue, SASCO does not identify any
exhibits it contends the court misunderstood, or cite any portion
of the court’s order suggesting that important evidence was
overlooked. SASCO also does not articulate how the court’s
interpretation of the evidence was incorrect or prejudicial.
A superior court ruling is presumed to be correct, and “the
burden is on an appellant to demonstrate, on the basis of the
record presented to the appellate court, that the trial court
committed an error that justifies reversal of the judgment.”
(Jameson v. Desta (2018) 5 Cal.5th 594, 609.) Moreover, a
reversible error occurs only when the appellant establishes that it
is reasonably probable a result more favorable to the appellant
would have been reached in the absence of the error. (Cassim v.
18
Allstate Ins. Co. (2004) 33 Cal.4th 780, 800.) SASCO has failed to
meet these burdens.
C. SASCO’s conduct in prior litigation
SASCO contends the superior court’s “ruling on the motion
also constitutes prejudicial error because it improperly references
[SASCO’s] alleged conduct in a prior lawsuit as having bearing
on its conduct in this lawsuit.” SASCO cites a discussion at the
hearing in which the court referenced Smead’s comment
described in Rosendin Electric: “Smead was also asked whether
he was ‘claiming in this case that’ defendants did take [certain]
documents, and Smead responded, ‘Yes . . . they have to prove
they didn't, why wouldn’t they.’” (Rosendin Electric, supra, 207
Cal.App.4th at p. 843.) At the hearing here, the court referenced
this statement when it asked SASCO’s counsel, “[T]o the extent
that you have argued that it’s relevant that SASCO took a very
streamlined approach to the litigation, didn’t propound much in
the way of discovery, why should that be relevant to the court
when Mr. Smead’s view, as the apex employee of SASCO, is that
it’s the defendants who have to prove that they didn’t
misappropriate?”
SASCO argues that the court “considered such evidence as
if [SASCO] was taking the position in this case that the burden is
on [defendants] to prove they didn’t misappropriate.” The record
does not support this contention, and it does not constitute a
valid argument of error. First, the court’s comment was posed to
SASCO’s counsel as a question; it was not cited as a basis for any
ruling. Second, “‘[a] judge's comments in oral argument may
never be used to impeach the final order, however valuable to
illustrate the court's theory they might be under some
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circumstances.’” (Silverado Modjeska Recreation & Park Dist. v.
County of Orange (2011) 197 Cal.App.4th 282, 300.)
SASCO asserts the also court erred in referring to SASCO’s
litigation history in its written order, arguing that such evidence
violates Evidence Code section 1101, pertaining to character
evidence. It asserts that SASCO’s “prior, alleged bad acts
referenced in the Rosendin Electric case (including [SASCO’s]
alleged concession of bad faith) are not admissible to show a
common plan or scheme . . . in the instant case.”
SASCO has not preserved this issue for appeal. Although it
filed written objections to some of defendants’ evidence, it did not
object to any discussion of the Rosendin Electric case or SASCO’s
other litigations as inadmissible under Evidence Code section
1101. A party must make a timely and specific objection to the
erroneous admission of evidence in order to preserve the error for
appeal. (Evid. Code, § 353.)
Moreover, even assuming the court’s reference to Rosendin
Electric and other litigation was erroneous, any error was
harmless. The court referenced Rosendin Electric and other
litigation referenced in that opinion, and stated, “But even
disregarding SASCO’s effective concession of subjective bad faith
in Rosendin Electric and similar findings as to SASCO’s pursuit
of other former employees,” Smead’s statement to Soffa about his
litigation strategy of outspending and wearing down opponents
“is itself a tacit admission of a pattern and practice of
harassment.” Because the court expressly relied on evidence
independent of Rosendin Electric, SASCO cannot show that the
court’s reference to that case, even if erroneous, was prejudicial.
(See Cassim v. Allstate Ins. Co., supra, 33 Cal.4th at p. 800.)
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D. Apportionment
SASCO contends the superior court awarded excessive
attorney fees to defendants because the fees “should have been
apportioned to work performed solely on defending the
misappropriation claim alleged in the Complaint.” We find no
error.
“When a cause of action for which attorney fees are
provided by statute is joined with other causes of action for which
attorney fees are not permitted, the prevailing party may recover
only on the statutory cause of action. However, the joinder of
causes of action should not dilute the right to attorney fees. Such
fees need not be apportioned when incurred for representation of
an issue common to both a cause of action for which fees are
permitted and one for which they are not. All expenses incurred
on the common issues qualify for an award. [Citation.] When the
liability issues are so interrelated that it would have been
impossible to separate them into claims for which attorney fees
are properly awarded and claims for which they are not, then
allocation is not required.” (Akins v. Enterprise Rent-A-Car Co. of
San Francisco (2000) 79 Cal.App.4th 1127, 1133 (Akins).)
SASCO focuses on the last sentence of the Akins quote
above and argues, “To recover attorney fees for work that is
intertwined, [defendants] must show that it is impossible to
segregate the work between causes of action.” (Emphasis in
SASCO’s brief.) However, “impossible” is not the legal standard,
and it is not an appellate court’s role to determine if it was
“possible” for the superior court to reach a different conclusion.
To the contrary, as the court stated in Akins: “The amount of an
attorney fee to be awarded is a matter within the sound
discretion of the trial court. [Citation.] The trial court is the best
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judge of the value of professional services rendered in its court,
and while its judgment is subject to our review, we will not
disturb that determination unless we are convinced that it is
clearly wrong.” (Akins, supra, 79 Cal.App.4th at p. 1134; see also
Thompson Pacific Construction, Inc. v. City of Sunnyvale (2007)
155 Cal.App.4th 525, 555 [“Where fees are authorized for some
causes of action in a complaint but not for others, allocation is a
matter within the trial court’s discretion”].) We therefore review
the superior court’s determination as to a fee allocation for an
abuse of discretion.
SASCO asserts the court’s allocation decision was
erroneous because a court could “segregate the Misappropriation
Claim from the other seven causes of action in the original
Complaint or from the FAC, where it is not even alleged. The
other allegations in this action are separate and apart from the
misappropriation of trade secrets claim, and pertain to
[defendants’] use of confidential information, including salary
and private information from employees’ personnel files used to
solicit [SASCO’s] employees, as well as . . . Soffa’s solicitation of
[SASCO’s] employees while he was still employed as [SASCO’s]
CEO.”
As the superior court recognized, however, SASCO’s
argument that the issues were not intertwined relies on
“SASCO’s self-servingly fluid definition and redefinition of terms
to suit the occasion.” In the complaint, SASCO alleged its trade
secrets included “information pertaining to SASCO’s employees,
including their salaries, pay structure, benefits provided, bonuses
and similar financial information,” and “the salaries and benefits
SASCO provides to its employees.” It alleged that the individual
defendants used this information in soliciting SASCO employees,
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and that by doing so they breached their contracts, including the
Buy-Sell Agreement and Employee Manual and Confidentiality
Agreement.
SASCO now argues, as it did below, that it did not assert
misappropriation of trade secrets against Soffa in the FAC.
However, SASCO alleged in the FAC that Soffa breached the
Buy-Sell Agreement and Employee Manual and Confidentiality
Agreement—the same agreements, according to the complaint,
that protected SASCO’s trade secrets and prohibited the use of
confidential information to solicit SASCO employees. SASCO
points to its response to an interrogatory by Soffa asking about
allegations in the FAC, in which SASCO stated, “SASCO does not
contend that Soffa used trade secret information,” but that Soffa
used “financial information such as the salaries, wages, benefits,
dates of last raises, personal information contained in employee’s
personnel files” in soliciting the employees. This is the same
employee information SASCO alleged constituted trade secrets in
the complaint. Earlier in the litigation, the court also recognized
that the misappropriation claim and the breach of contract claims
substantially overlapped; it rejected SASCO’s argument on that
issue in its ruling on the motions to compel.
That SASCO deemed employee information a trade secret
in the complaint and not a trade secret later in the litigation
shows that the legal and factual issues were indeed intertwined.
As the superior court stated, “Having staked out that expansive
definition of its trade secrets [in the complaint], SASCO is ill-
equipped to retroactively redefine terms to suggest that
Defendants’ defense of the trade secrets cause of action was not
inextricably intertwined with its allegations of unlawful
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solicitation” in the other causes of action in the complaint and in
the FAC. We agree.
“[A]ttorney fees need not be apportioned . . . where the
claims involve either common factual issues or legal issues.”
(Cruz v. Fusion Buffet, Inc. (2020) 57 Cal.App.5th 221, 235.)
Because the misappropriation of trade secrets allegations in the
complaint substantially overlapped with the other allegations in
the complaint and the FAC, the superior court did not abuse its
discretion in finding that allocation was unwarranted.
DISPOSITION
The order is affirmed. Respondents are entitled to their
costs on appeal.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
COLLINS, ACTING P.J.
We concur:
CURREY, J.
STONE, J. 

Judge of the Los Angeles County Superior Court, assigned
by the Chief Justice pursuant to article VI, section 6 of the
California Constitution.
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