Lakoda, Inc. v. Omh Proscreen Usa, Inc. ( 2016 )

FILED
SEPTEMBER 8, 2016
In the Office of the Clerk of Court
WA State Court of Appeals, Division III
IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
DIVISION THREE
LAKODA, INC., a Washington )
corporation, ) No. 32616-1-111
)
Respondent, )
)
v. )
) UNPUBLISHED OPINION
OMH PROSCREEN USA, INC., a )
Washington corporation; BRAD )
HILMOE, a married individual; JOHN )
O'CONNELL, a married individual; OMH )
INNOVATIONS, INC., a foreign )
corporation, )
)
Appellants. )
)
OMH PROSCREEN USA, INC., a )
Washington corporation, )
)
Third-Party Plaintiff, )
)
V. )
)
DALE AMES and DODIE AMES, )
husband and wife, and the marital )
community comprised thereof, )
)
Third-Party Defendants. )
SIDDOWAY, J. -OMH Proscreen USA, Inc. and its codefendants in the trial
below appeal the results of a 9-day jury trial at the conclusion of which the jury awarded
a total of $250,002 in damages to Lakoda, Inc., for breach of contract, tortious
No. 32616-1-111
Lakoda, Inc. v. OMH Proscreen USA, Inc.
interference with a business expectancy, and misappropriation of trade secrets. The trial
court awarded an additional $231,441 in attorney fees. The defendants challenge the trial
court's exclusion of evidence they contend was critical to their defense and
counterclaims, the admissibility and sufficiency of Lakoda' s evidence of damages, and
the trial court's award of attorney fees.
We find no error or abuse of discretion and affirm.
FACTS AND PROCEDURAL BACKGROUND
Lakoda is a self-described "contract manufacturer." 1 Report of Proceedings (RP)
(May 6, 2014) at 66. It acts as an intermediary between businesses that need a product
manufactured and factories that can deliver an acceptable product at an acceptable price.
As middle man, Lakoda identifies a factory capable of producing the desired product,
obtains a price, marks it up, and then offers the product to the manufacturing customer at
the marked-up price. To protect itself from customers who might try to go around it and
contract directly with the factory once the manufacturing operation has been established,
Lakoda has a vendor nondisclosure agreement that it requires customers to sign before
arranging manufacturing services.
Among areas of the world in which Lakoda has established expertise and
manufacturing contacts is China. Its manufacturing contacts in China at times relevant to
this dispute included the Longfei factory in Changzhou, and Geng Min, an engineer and
the owner of a business called Tomorrow Product Development, or TPD. Virtually all
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references to Geng Min during trial were as "Peter" or "Peter G.," his nickname, which
we will use, intending no disrespect.
In March 2010, Dale Ames, Lakoda's owner, met Brad Hilmoe, an officer and
owner of OMH or its affiliates I on a flight to San Francisco. Both men's ultimate
destination was China. OMH was in the business of selling soil screening equipment and
at the time was having some of its soil screeners manufactured at a factory in Y antai.
The products were not being made to Mr. Hilmoe's satisfaction.
After Mr. Hilmoe returned to the states, he arranged for Mr. Ames to meet with
him and his co-owner of OMH, John O'Connell, to explore whether to have Lakoda
assist them in lining up manufacture of their soil screeners in a different Chinese factory.
Before the meeting, Mr. Ames e-mailed Lakoda's standard nondisclosure agreement to
Mr. Hilmoe. The agreement contains provisions protecting both Lakoda's and "the
Vendor's" (in this case, OMH's) "Confidential Information" disclosed in connection with
evaluating a potential "customer/supplier relationship." The agreement defines
"Confidential Information" as
1
At trial, the three affiliated OMH companies named as defendants presented a
united defense. Midtrial, Lakoda stipulated to dismissal of its claims against the
Canadian corporation, OMH Innovations, Inc. Judgment was entered against the two
remaining corporations. Since the history and roles of the entities need not be
distinguished (and from the record, probably could not be) we refer to them individually
and collectively as "OMH."
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all information of either Party that is not generally known to the public,
whether of a technical, business or other nature (including, without
limitation, trade secrets, know how and information relating to the
technology, customers, business plans, promotional and marketing
activities, finances and other business affairs of such Party), that (i) is
disclosed by one Party (the "Disclosing Party") to the other Party (the
"Receiving Party"), and (ii) if in tangible form, is identified by the
Disclosing Party ... as confidential. . . . Confidential Information also
includes all information concerning the existence and progress of the
Parties' dealings.
Ex. 5, at 1 (emphasis added).
The agreement provided that a receiving party would not disclose a disclosing
party's confidential information without consent, that it would take measures to protect
confidential information, and that it "[would] not use, or permit others to use,
Confidential Information for any purpose other than evaluation and performing its
obligations under any customer/supplier relationship between the parties resulting
therefrom." Id Mr. Ames signed the agreement on behalf ofLakoda, Inc., and Mr.
O'Connell signed on behalf of OMH. The parties then orally agreed that Lakoda would
undertake to identify a new manufacturing source in China for OMH' s products.
OMH provided Lakoda with target pricing for the screeners, some idea of the
quantity to be produced, and OMH's screener designs. Armed with this information, Mr.
Ames contacted Peter, who worked with the Longfei factory to arrive at a quote for
producing the screeners.
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Lakoda began to source parts necessary for the production of the screeners at
Longfei and manufacturing began. For almost a year, OMH accepted Lakoda quotes,
provided Lakoda with purchase orders, and Lakoda invoiced OMH at the marked-up
price it had quoted.
In October 2010, OMH hired an employee in China to monitor quality control at
Longfei. His name was Wang Fuliang, but most witnesses at the trial referred to him by
his nickname, "Jack." Through Jack and through his own time spent in Changzhou, Mr.
Hilmoe began to receive information about how Longfei was faring under the
manufacturing relationship. He learned Longfei's management was disgruntled about
slow payment and the price it was receiving for the screeners. The information Mr.
Hilmoe received led to a dispute between OMH and Lakoda over whether Lakoda was
taking a bigger markup than had been agreed, leaving Longfei with too little to make the
manufacturing relationship worthwhile. Facing threats from Longfei that it would cease
manufacturing the screeners, OMH "cut [Lakoda] out of the picture" in April 2011 and
began purchasing screeners directly from Longfei. 1 RP (May 6, 2014) at 137-38.
Lakoda filed suit against OMH and Mr. Hilmoe shortly thereafter, alleging breach
of contract; breach of the implied covenant of good faith and fair dealing; violation of
Washington's Uniform Trade Secrets Act, chapter 19.108 RCW; and tortious interference
with a business expectancy. Lakoda accused OMH of using its confidential information
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(the identity of the Longfei factory and the screener manufacturing capability it had
developed) in violation of the nondisclosure agreement. 2
In answering the complaint, OMH counterclaimed, alleging Lakoda had failed to
protect its proprietary designs in violation of the nondisclosure agreement and had
violated an alleged oral agreement that Lakoda's markup of Longfei's price would be
limited to 10 percent. According to OMH, Peter or Lakoda misled Longfei about the
volume of screeners OMH would purchase, leading Longfei to quote a price at which it
could not make money.
OMH also claimed Lakoda did not obtain a nondisclosure agreement from Longfei
until February 2011, two months after Longfei registered OMH's designs in China, in
Longfei's name. OMH contended Longfei alone could manufacture OMH's screeners in
China and as a result, when Longfei refused to continue manufacturing unless it was paid
more, OMH "was forced to renegotiate the terms of the manufacturing agreement" with
Longfei. Clerk's Papers (CP) at 61 (emphasis added). According to Mr. Hilmoe, "OMH
had no recourse against the [Longfei] factory." CP at 208. Finally, OMH alleged
Longfei sold OMH's designs to two Canadians, Viorel Mazilescu and Gerald Clancy,
2
After Lakoda learned in discovery of the OMH affiliates and that the business
had not been incorporated when the nondisclosure agreement was signed, it amended its
complaint to name the affiliates and Mr. O'Connell, individually, as defendants.
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who began selling "knock-off' screeners in competition with OMH. CP at 191. It
accused Mr. Ames of being complicit in that misappropriation of its designs.
In pretrial rulings, the court held that a document that appeared to be written in
Chinese and that OMH represented was Longfei' s "registration" in China of its drawings
was inadmissible. It reserved ruling on whether testimony about the registration would
be admitted.
When OMH sought to elicit testimony about the registration during trial, the court
sustained an objection to its relevance. OMH renewed its effort to offer the evidence
after Lakoda allegedly "opened the door" by inquiring into what measures OMH had
taken to protect its designs in the United States and Canada. The court again held that
testimony about the alleged Chinese registration was not relevant.
Also during trial, the court excluded a portion of testimony from Gerald Clancy's
perpetuation deposition about a videoclip, as well as the videoclip itself, which OMH
offered as evidence during the deposition. The court rejected OMH's argument that Mr.
Clancy's limited testimony about the videoclip was relevant or sufficient.
A halftime motion by OMH on several claims was denied.
After a week and a half of trial, the jury returned a special verdict in favor of
Lakoda on every claim and counterclaim. It awarded $1 in damages on the tortious
interference claim, $1 in damages for misappropriation of trade secrets, and $250,000 for
breach of contract. Lakoda contended, and the trial court agreed, that the three claims
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overlapped and that the $1 verdicts merely reflected the jury's compliance with the
court's instruction not to duplicate damages.
The court thereafter granted Lakoda's motion for an award of attorney fees on its
trade secret claim, finding reasonable attorney fees of $231,441.
OMH appeals.
ANALYSIS
OMH assigns error to (1) the trial court's exclusion of evidence that Longfei
registered its designs in China, including after Lakoda allegedly "opened the door" to that
evidence; (2) the court's exclusion of a videoclip and testimony offered as authentication;
(3) the court's denial of its halftime motion that its nondisclosure agreement with Lakoda
barred recovery oflost profits; (4) the trial court's denial of its halftime motion on
Lakoda's trade secret claim; (5) the trial court's admission of Lakoda's damage
summaries and the sufficiency of those summaries to support the jury's verdict; and (6)
the trial court's award of attorney fees. We address the issues in the order stated.
I. Exclusion of evidence of Chinese "registration"
A. Initial exclusion
Before trial, Lakoda filed a motion in limine asking the court to exclude all
evidence and argument that Longfei had registered OMH's screener designs in China.
Among its arguments were that Chinese law had not been pleaded as required by CR 9
and 44.1 and the legal effect of any registration (if its proposed exhibit was a registration)
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was unknown by the parties or the court. It also argued that because a culpable mental
state was not relevant to Lakoda's claims, Mr. Hilmoe's motivation for continuing to
work with Longfei was irrelevant.
OMH responded that it intended to offer evidence of the registration and
authentication through Xiao Ping Zahang, an owner or manager of the Longfei factory,
who could read Chinese. Either Mr. Zahang or Mr. Hilmoe could testify to their
understanding of the registration's significance. It argued that Mr. Hilmoe's motivation
was relevant to its affirmative defense to Lakoda's tortious interference claim and the
element of willfulness or maliciousness under the Uniform Trade Secrets Act, chapter
19.108 RCW.
The court ruled that the purported registration, defendants' proposed Exhibit 329,
was irrelevant, would not be admitted, and that it would sustain an objection to testimony
about the actual legal effect of registration. But it reserved ruling on whether to admit
evidence bearing on Mr. Hilmoe's beliefs and how they affected his motivation in
continuing to work with Longfei.
When OMH called Mr. Zahang at trial, he was allowed to answer the following
questions about registration:
Q [A ]t that time that you decided not to manufacture anymore, were you
concerned about the money that you had invested in building the
screeners?
A Yes.
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Q Did you take any measures to try to protect your investment that you
had put into the manufacture of the screeners? Yes or no, please.
A To protect the product, we applied to get a document.
[LAKODA'S LAWYER]: Judge, I'm going to object. This goes to the
Motion in Limine.
THE COURT: I understand. Ifhe can answer the question as a yes or
no, can he answer the question as it's asked as a yes or no?
THE WITNESS: Yes.
2 RP (May 7, 2014) at 306-07. Shortly thereafter, Mr. Zahang referred to a time "[w]hen
I told, you know, they are not working with Peter anymore [sic]." 2 RP (May 7, 2014) at
307. He was then asked, and answered:
Q At any time subsequent-anytime after that, did you tell Brad or Jack
that Longfei was the only one that was allowed to manufacture
screeners in China?
A Yes.
Id.
OMH then called Mr. Hilmoe as a witness, and the following testimony was given
and objections were made:
Q Do you recall hearing [Xiao Ping] state that he believed that only the
Longfei factory could manufacture your product?
A Yes.
Q What was your understanding of that situation?
A I no longer had any control over my designs at the time.
3 RP (May 8, 2014) at 540. When OMH's lawyer then asked Mr. Hilmoe how he came
to that conclusion, the trial court sustained the objection.
In analyzing OMH's asserted need for evidence of the Chinese registration, we
bear in mind that OMH offered other reasons why it had no choice but to agree to
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continue a business relationship with Longfei that excluded Lakoda. They included the
timing of the threatened termination of manufacture which came just as OMH was
moving into its busiest sales season. OMH also contended Lakoda failed to obtain a
nondisclosure agreement from Longfei until February 2011, well after Lakoda had
already passed along the screener designs.
Mr. Zahang testified during his direct examination that the "2010. 4. 15" date he
had written when he signed the Lakoda/Longfei nondisclosure agreement was not the
date he actually signed it. CP at 281. Instead, he testified, the agreement, which he said
was characterized to him by Peter as having something to do with quality control, was not
presented to him until about six months after that date.
In closing argument, OMH's lawyer told the jury:
Longfei says we 're going to build all the screeners that we can produce,
and ifyou, OMH, don't buy it, we 're going to sell [them] to someone else,
and they put up OMH's own product on their own website, and they steal
the website informationfrom OMH and go into business for themselves.
So you might be asking yourselves, how can they do that? Longfei
had signed an NDA [nondisclosure] agreement. ... [B]ut there's a lot of
discrepancies to this, folks.
We've got an [agreement] effective July 9, 2010 that's signed on
April 15, 2010, and you heard the testimony from Mr. Ames that he only
obtained this NDA agreement in February of 2011 when Mr. Hilmoe asked
him to give him a copy of it.
We know that the NDA agreement [that] was signed ... states it's
effective July 9, 2010, but is dated April 15, 2011 [sic],(3] and then we have
3
Presumably April 15, 2010.
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the cryptic e-mail from Mr. Ames to Peter saying I need an NDA
agreement for OMH, and it will relate back to some earlier agreement that
Mr. Ames had with Peter.
Let's go back now to OMH. The factory is competing with OMHfor
OMH's own products. OMH is told it can't build its product at any other
factory in China.
RP (May 15, 2014) at 121-23 (emphasis added).
On appeal, OMH renews its arguments that evidence of Longfei' s registration of
its screener designs was relevant and important to its defense to tortious interference and
to whether it willfully and maliciously misappropriated a trade secret.
1. Relevance to defense to tortious interference
Evidence is only admissible if relevant. ER 402. Evidence is relevant if it has any
tendency to make the existence of a fact of consequence more probable or less probable
than it would be without the evidence. ER 401. A trial court's decision regarding
relevancy will not be reversed absent an abuse of discretion. State v. Suarez-Bravo, 72
Wn. App. 359, 364, 864 P.2d 426 (1994).
The court instructed the jury that OMH and Mr. Hilmoe claimed that "even if their
conduct interfered with Lakoda's prospective business relationship or future contract, that
conduct was justified because they were acting reasonably to protect their financial
interest from being harmed." CP at 1036 (Jury Instruction 28). It further instructed the
To establish the defense of financial interest, the Defendants have
the burden of proving each of the following propositions:
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( 1) That prior to any conduct of the Defendants interfering with a
business relationship or future contract of Lakoda, Inc., the
Defendants had a financial interest connected to Longfei; and
(2) That the Defendants did not use wrongful means to protect that
interest from harm.
Id.An implicit jury finding, unchallenged by OMH, is that by entering into the
agreement with Longfei that excluded Lakoda, OMH interfered with the Lakoda/Longfei
nondisclosure agreement and the purchase orders expected to arise from it.
In defending, OMH was entitled to offer relevant, admissible evidence that its
interference was privileged if it had acted, without using wrongful means, to protect an
existing financial interest of its own. In that connection, it offered evidence of several
reasons for its actions, including its evidence, alluded to in closing argument, that Mr.
Hilmoe or Jack was told by Mr. Zahang that "Longfei was the only one that was allowed
to manufacture screeners in China" and that Mr. Hilmoe understood he "no longer had
control over [his] designs." 2 RP (May 7, 2014) at 307; 3 RP (May 8, 2014) at 540.
The court allowed OMH to offer this evidence ofLongfei's bare assertion of its
rights but excluded evidence of "registration" because OMH never pleaded the foreign
law that would make information about "registration" meaningful to the jury. Evidence
that is meaningless has no "tendency to make the existence of any fact that is of
consequence more probable or less probable" as required for it to be relevant under
ER 401.
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Instead, OMH sought to inform the jury about "registration" through the testimony
of a lay witness offering a lay understanding of its legal effect. But ER 701 provides that
for a lay witness to testify to an opinion it must be rationally based on the witness's
perception, helpful to a clear understanding of the witness's testimony or a fact in issue,
and not based on scientific, technical, or other specialized knowledge. And even legal
experts are not permitted to testify about issues of law, which is the province of the court.
Crow Tribe of Indians v. Racicot, 87 F.3d 1039, 1045 (9th Cir. 1996).
OMH misreads the Washington decisions it cites as supporting its right to offer a
lay witness's belief or understanding about the law. 4 And the Ninth Circuit decision it
cites actually undercuts its position. In Nationwide Transport Finance v. Cass
Information Systems, Inc., the court affirmed the trial court's ruling that a businessman
defending his company's alleged tortious interference could provide testimony
"regarding why he believed [the plaintiff] acted improperly and why he believed it was
reasonable to rescind [a] hold harmless agreement," but could not testify that the reason
he thought he could rescind the agreement was his understanding or belief that the
4
Skagit State Bank v. Rasmussen, 109 Wn.2d 377, 745 P.2d 37 (1987) does not
analyze, let alone hold, that a witness may testify to the legal effect of a document.
Bennett v. Shinoda Floral, Inc., 108 Wn.2d 386,394, 739 P.2d 648 (1987) never
discusses the plaintiffs' understanding of the legal effect of settlement releases they
signed, but only whether a releasor "fairly and knowingly" releases claims when he
knows he has been injured but does not know the extent or consequences of the injury.
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plaintiffhad violated the Uniform Commercial Code (U.C.C.). 523 F.3d 1051, 1060 (9th
Cir. 2008) (emphasis added).
OMH was allowed to present equivalent evidence of what it contended was
Lakoda's improper action and its reasonable response. The court properly sustained
objections to OMH's efforts to present a lay witness's understanding of the legal
landscape. Since the jury would have no basis for assessing the concept of registration or
its consequences, the court did not abuse its discretion in finding evidence about
registration to be irrelevant. 5
2. Relevance to "willful and malicious" trade secret
misappropriation
The Uniform Trade Secrets Act provides that "[i]f ... willful and malicious
misappropriation exists, the court may award reasonable attorney's fees to the prevailing
party." RCW 19.108.040. The special verdict form asked jurors whether OMH's or Mr.
Hilmoe's "misappropriation of a trade secret owned by Lakoda [was] willful and
malicious," to which jurors answered yes. CP at 1060.
Only "malicious," not "willful," was defined for the jury. "Malicious" was
defined as
5
Although not argued on appeal and not the stated grounds for the trial court's
exclusion of the registration, the evidence could also have been excluded under ER 403,
based on its potential for confusing the issues or misleading the jury.
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characterized by, or involving, malice, having, or done with, wicked or
mischievous intentions or motives; wrongful and done intentionally without
just cause or excuse.
CP at 1044 (Jury Instruction 33).
Evidence of registration was irrelevant here for the same reason it was irrelevant
to OMH's affirmative defense to the tortious interference claim. Because OMH had not
pleaded foreign law and could not inform the jury of the legal significance of registration
through a lay witness, the jury would not know what "registration" meant. Evidence
referencing it would have been meaningless.
The trial court did not abuse its discretion in sustaining Lakoda's objections to the
registration evidence.
B. Revisiting rulings following an "opened door"
OMH argues the trial court abused its discretion when it continued to sustain
objections to evidence about registration after Lakoda examined witnesses about OMH's
failure to take steps to protect its purported trade secret information, including the fact that
OMH held no U.S. or Canadian patents. Lakoda's examination was relevant to its defense
to OMH's trade secret claim and came in without objection. Whether information is a
"trade secret" depends in part on whether it "[i]s the subject of efforts that are reasonable
under the circumstances to maintain its secrecy." RCW 19.108.010(4)(b).
As pointed out by Professor Tegland, there are two senses in which questioning a
witness can be said to "open a door" and thereby waive evidentiary objections. One
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sense is where a party introduces evidence of questionable admissibility itself. 5 KARL
B. TEGLAND, WASHINGTON PRACTICE: EVIDENCE LAW AND PRACTICE§ 103.14 (5th ed.
2007). A second sense is where, by being the first to raise a subject matter at trial, a party
invites the opposing party to explain, clarify or contradict its evidence. Id. at § 103 .15, at
80. "Rules of evidence are designed to aid in establishing the truth," and refusing to
allow a party to respond to a subject opened up by its adversary "might well limit the
proof to half-truths." State v. Gefeller, 76 Wn.2d 449,455,458 P.2d 17 (1969). If
questioning "opens the door" with admissible evidence in this second sense, it does not
waive all objections to any evidence its adversary offers in response.
There is only one respect in which the trial court's continued exclusion of
registration evidence arguably prevented OMH from explaining, clarifying or
contradicting Lakoda's evidence about OMH's lack of effort to maintain the secrecy of
its screener designs: it prevented OMH from trying to prove that once the Longfei factory
registered the screener designs as its own, there was nothing OMH could do to protect
itself from that particular compromise of secrecy. Outside the presence of the jury,
OMH's lawyer made the following offer of proof:
IfMr. Hilmoe were allowed to testify on the subject, he would be
expected to offer evidence that he was given copies of the design
registrations that were filed in China. Based on his investigation, he was of
the belief that the Longfei factory owned the right to the OMH Proscreen
brand collar designs in China, and that only Longfei could produce the
screeners in China.
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5 RP (May 13, 2014) at 861.
Here again, for reasons earlier stated, Mr. Hilmoe's lay belief about the legal
effect of registration, including his apparent understanding that a wrongful registration
could not be challenged, was inadmissible under ER 701. Other evidence concerning
registration was irrelevant not because evidence that OMH tried to protect secrecy was
irrelevant-meaningful evidence about efforts to protect secrecy would be relevant.
Evidence concerning registration was irrelevant because without guidance on the legal
effect of registration-which could come only from the court-"registration" was
meaningless. The trial court did not abuse its discretion.
II. Exclusion ofvideoclip and supporting deposition testimony
OMH conducted a perpetuation deposition of Gerald Clancy, one of the Canadians
allegedly selling "knock off' screeners using OMH designs. On the trial day when
lawyers read the deposition to the jury, the court entertained objections to portions of the
deposition.
One ofLakoda's objections was to 5 questions and responses dealing with a 10-
second videoclip the defendants had identified as their proposed Exhibit 330. The
pertinent questions posed and answers given during the perpetuation deposition were:
Q. . .. [D]o you recall as part of your prior deposition producing a
document that was on a video of testing of one of the screeners?
A. Yes, I do.
Q. I want to show you a video. And this is marked as .... Defendants'
D-330 .... I'm going to go ahead and play this video for you.
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CP at 622-23. OMH's lawyer then played the video twice for Mr. Clancy. The
questioning continued:
Q. Does that appear to be a correct copy of the video that you submitted
in conjunction with your previous deposition?
A. It appears to be.
[OMH'S LA WYER]: Move to admit defendants' 330.
[LAKODA'S LA WYER]: I'm going to object based on foundation and
hearsay. And I haven't been provided a copy of that video so I'm
going to reserve any right to object at the time [of] trial.
[OMH'S LA WYER]: Q. Submitted as D-330.
Do you recognize the individual that was testing that screener in that
video?
A. I do not.
Q. You don't know if that is Peter G. or TG?
A. I do not.
CP at 623.
Before the perpetuation deposition was read, Lakoda renewed its objection to a
lack of foundation for admitting the videoclip and asked the court to exclude the related
testimony. The court sustained the objection.
It is OMH's position that it needed to lay a two-part foundation for the videoclip:
its relevance depended on the facts that (1) it was received by Mr. Clancy in connection
with the "knock-off' screeners he was purchasing, and (2) it depicted Peter. OMH argues
on appeal that the foundation it laid in the perpetuation deposition was sufficient for the
limited purpose of establishing that the videoclip had been received by Mr. Clancy. As
OMH's lawyer argued to the trial court when the objection was raised at trial, "The
relevance is going to come later, Your Honor. We believe it depicts Peter Geng testing
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this machine, and we have witnesses that will be able to identify him in that video." 5 RP
(May 13, 2014) at 821.
ER 104(b) provides that when the relevancy of evidence depends on the
fulfillment of a condition of fact, a trial court shall admit it either "upon, or subject to"
the introduction of evidence sufficient to support a finding of the fulfillment of the
condition. The rule gives the court discretion to either admit the primary evidence
subject to connecting up, or to refuse to admit the primary evidence until its relevance is
shown by the foundation evidence. TEGLAND, supra,§ 104.6, at 126.
OMH challenges the trial court's ruling on appeal as if the court failed to provide
it with the opportunity to "fulfill the condition" of relevance. But the trial court's actual
reasoning was that the perpetuation deposition did not prove what OMH said it proved.
As the court pointed out, at the perpetuation deposition Mr. Clancy testified only that he
had submitted the videoclip in his previous deposition. He did not testify that the
videoclip was one that he had received. OMH's lawyer admitted he would have to go
back to Mr. Clancy's previous deposition to see if the testimony about receiving the
videoclip was there. It was at that point that the court ruled,
At this point, I don't see the relevance. I don't see it's been authenticated.
So ... I'm going to go ahead and strike that at this time.
5 RP (May 13, 2014) at 822 (emphasis added).
20
No. 32616-1-III
Lakoda, Inc. v. OMH Proscreen USA, Inc.
The clear implication of the trial court's ruling was that OMH was free to offer
additional foundation later. But OMH did not thereafter seek to conditionally offer other
deposition testimony and other witnesses to "connect up" relevance before offering the
perpetuation deposition testimony and videoclip again.
The trial court did not abuse its discretion by excluding the deposition testimony
and videotape at the time they were offered. The deposition testimony had not been
shown to be relevant or even conditionally relevant.
III. Denial of judgment as a matter of law: breach of contract
Paragraph 15 of the Lakoda-OMH nondisclosure agreement is a "Limitations on
Liability" clause:
Neither party shall be liable for special, indirect or consequential damages,
or lost profits, arising out of or in connection with this Agreement, whether
based on contract, tort, including negligence, or otherwise.
Ex. 5, at 3. At the close ofLakoda's case, OMH moved for judgment as a matter oflaw
on its breach of contract claim, arguing Lakoda's only evidence of damages was of lost
profits, liability for which is foreclosed by paragraph 15.
Lakoda responded that paragraph 15 is ambiguous in light of paragraph 8 of the
agreement, captioned "Injunctive Relief," which acknowledges Lakoda's right to seek
injunctive relief "in addition to [Lakoda's] other rights and remedies"-implying that
Lakoda has other rights and remedies. Ex. 5, at 2. It argued that the contract would be
illusory if it did not afford a right to sue for benefit of the bargain damages, which, given
21
No. 32616-1-111
Lakoda, Inc. v. OMH Proscreen USA, Inc.
the nature of the breach, were lost profits. Its final argument for ambiguity was that
OMH had itself sued for damages for breach of the same agreement.
The court denied the motion for a directed verdict, deeming interpretation of the
contract to be a question for the jury. In closing argument, OMH pointed out the
limitation on liability clause to the jury. The jury still returned a verdict finding $250,000
in damages for the breach of contract claim.
Judgment as a matter of law is appropriate when no competent and substantial
evidence exists to support a verdict. Paetsch v. Spokane Dermatology Clinic, P.S., 182
Wn.2d 842,848,348 P.3d 389 (2015). In reviewing the denial of a CR 50 motion for
judgment as a matter of law, all facts and reasonable inferences are construed in favor of
the nonmoving party. Yakima Fruit & Cold Storage Co. v. Cent. Heating & Plumbing
Co., 81 Wn.2d 528, 530, 503 P.2d 108 (1972). We review the denial of such a motion de
novo. Schmidt v. Coogan, 162 Wn.2d 488,491, 173 P.3d 273 (2007), aff'd, 181 Wn.2d
661, 335 P.3d 424 (2014).
In Washington, the primary goal in interpreting a contract term is to ascertain the
parties' intent at the time they executed the contract. Paradise Orchards Gen. P 'ship v.
Fearing, 122 Wn. App. 507, 516, 94 P.3d 372 (2004). And Washington cases hold that
the intent of the parties to a particular agreement
may be discovered not only from the actual language of the agreement, but
also from "viewing the contract as a whole, the subject matter and objective
of the contract, all the circumstances surrounding the making of the
22
I
I No. 32616-1-III
f
II Lakoda, Inc. v. OMH Proscreen USA, Inc.
I
contract, the subsequent acts and conduct of the parties to the contract, and
II the reasonableness of respective interpretations advocated by the parties."
!
Scott Galvanizing, Inc. v. Nw. EnviroServices, Inc., 120 Wn.2d 573, 580-81, 844 P.2d
428 (1993) (quoting Berg v. Hudesman, 115 Wn.2d 657,667, 801 P.2d 222 (1990)).
When interpretation of a contract depends on the use of extrinsic evidence and
more than one reasonable inference can be drawn from the extrinsic evidence,
interpretation presents a question of fact, not law. SAS America, Inc. v. lnada, 71 Wn.
App. 261, 857 P.2d 1047 (1993); RESTATEMENT (SECOND) OF CONTRACTS§ 212(2)
(1981 ).
Before moving for the directed verdict, OMH had cross-examined Mr. Ames
about the meaning of the limitation of liability provision. In response to repeated
questions, reflected over three pages of the transcript, Mr. Ames consistently responded
that he was not sure what paragraph 15 of the nondisclosure agreement meant. In
response to one of the last questions, "You don't have any idea what that means?" Mr.
Ames responded:
I know that the overall agreement as expressed to me and best articulated to
me to OMH Proscreen was that I had protected information which I found
necessary to protect, and that's why I asked them to sign the nondisclosure
agreement with me prior to conducting business with them to protect my
interest.
2 RP (May 7, 2014) at 349.
23
No. 32616-1-III
Lakoda, Inc. v. OMH Proscreen USA, Inc.
In closing argument, Lakoda's lawyer reminded the jury of the nondisclosure
agreement's paragraph 8 with its reference to "other remedies" and said:
Well, those two paragraphs have to be reconciled. It can't be
interpreted so one doesn't have any impact at all. If you look at 15, the fair
reading of it is that it doesn't make the nondisclosure agreement
meaningless.
The fair reading of it is that it's talking about consequential
damages, incorrect [sic ]C6l damages of other business, not the business
under the nondisclosure agreement. Otherwise, the nondisclosure
agreement wouldn't mean a hill of beans.
RP (May 15, 2014) at 108-09.
Evidence at trial supported several factors that could make contract interpretation
a question of fact. There was paragraph 8's reference to Lakoda's "other rights and
remedies" (a contract is viewed "as a whole"). 3 RP (May 8, 2014) at 435. There was
Lakoda's practice of requiring the contract at the very outset of a relationship to protect
itself from being cut out of a manufacturing relationship (the subject matter and objective
of the contract). There was the fact that Lakoda required the contract up front in its
dealings with OMH (all "the circumstances surrounding the making of the contract"). CP
at 1011. There was the fact that OMH was asserting its own breach of contract claim
("the subsequent acts and conduct of the parties"). CP at 300. There was Mr. Ames's
testimony that he did not know what paragraph 15 meant.
6
Presumably "indirect."
24
No. 32616-1-111
Lakoda, Inc. v. OMH Proscreen USA, Inc.
As to the reasonableness of the parties' respective interpretations, Lakoda's
contention that paragraph 15 was intended to exclude only indirect and consequential
harm to the nonbreaching party's relationships with third parties is not unreasonable. The
limitation looks like one more likely to be found in contracts Lakoda would use for sales
of goods. Cf RCW 62A.2-719( 1) (permitting limitation of damages in Article 2 sales to,
e.g., return of goods and repayment of the price to repair and replace nonconforming
goods); U.C.C. § 2-719 cmt. 1 ("However, it is of the very essence of a sales contract that
at least minimum adequate remedies be available.").
If the intent was to limit only these attenuated damages, the provision could have
been more clearly written, to be sure. But OMH's interpretation-that the parties
intended to foreclose all remedies other than injunctive relief-fails under every
nontextual factor we apply in interpreting contracts.
Over 25 years ago, our Supreme Court disapproved the "plain meaning rule['s]"
application to contract interpretation and adopted the context rule. Berg, 115 Wn.2d at
671. Under the context rule, the interpretation of the parties' nondisclosure agreement
25
No. 32616-1-111
Lakoda, Inc. v. OMH Proscreen USA, Inc.
presented a question of fact, not law. 7, 8
IV. Denial of judgment as a matter of law: trade secret misappropriation
OMH also chal~enges the trial court's denial of its CR 50 motion to dismiss
Lakoda's trade secret misappropriation claim. It contends Lakoda had not presented
sufficient evidence of a trade secret or, if a trade secret existed, that it was Lakoda's trade
secret. Again, we review de novo whether Lakoda' s evidence was insufficient to support
a verdict in its favor.
Washington law provides remedies to parties harmed by misappropriation of their
trade secrets. RCW 19.108.020-050. Lakoda's position was that its contacts in China,
the factories it had identified and developed working relationships with, and its
knowledge of methods for working with factories and manufacturers in China were its
trade secrets.
7
In its reply brief, OMH argues the contract should have been construed against
Lakoda. The principle that a contract may be construed against the drafter applies only if
the context rule has been applied and the contract still remains ambiguous. Forest Mktg.
Enters. Inc. v. Dep't Nat. Res., 125 Wn. App. 126, 132-33, 104 P.3d 40 (2005) (citing
Roberts, Jackson & Assoc. v. Pier 66 Corp., 41 Wn. App. 64, 69, 702 P.2d 137 (1985)).
It is a possible matter of instruction to the jury, but since it applies to only ambiguous
contracts it has no application where we are being asked following a jury trial to decide
that the contract had a clear meaning as a matter of law.
8
On appeal, Lakoda also argues that even if the interpretation proposed by OMH
is correct, it would not matter because a limitation on liability is excused when the
breaching party acted in bad faith. The jury was not asked to determine whether OMH
breached the contract in bad faith, however, and we do not view its finding of a willful
and malicious trade secret violation as a substitute for instruction and finding on a distinct
contract issue.
26
No. 32616-1-III
Lakoda, Inc. v. OMH Proscreen USA, Inc.
Lakoda presented testimony that it would be difficult for someone to work with a
factory in China if they had not done so before, and testimony explaining why. Mr.
Ames testified to the tremendous amount of time Lakoda spent locating and investigating
factories. Lakoda presented evidence that Mr. Ames visited the Longfei factory a
number of times in order to assess, among other things, what equipment was available,
what the manufacturing process was, what quality checks were in place, and what
communication barriers might exist. Mr. Ames testified he had worked with Longfei for
years. Evidence was presented that OMH had encountered problems with its prior
manufacturing relationship in China and, notwithstanding OMH's contention that
Chinese factories could be searched for on the Internet, it had elected to find its next
manufacturer with the assistance of Lakoda and signed a nondisclosure agreement in
order to do so.
Because the evidence established that Lakoda often worked with and through
Peter and TPD, OMH argues, "If the Longfei factory was a trade secret, it was TPD's
trade secret." Br. of Appellant at 41. But it cites no legal authority that working through
agents prevents a person from having trade secrets.
The Uniform Trade Secrets Act defines "trade secret" as
information, including a formula, pattern, compilation, program, device,
method, technique, or process that:
(a) Derives independent economic value, actual or potential,
from not being generally known to, and not being readily ascertainable by
27
No. 32616-1-III
Lakoda, Inc. v. OMH Proscreen USA, Inc.
proper means by, other persons who can obtain economic value from its
disclosure or use; and
(b) Is the subject of efforts that are reasonable under the
circumstances to maintain its secrecy.
RCW 19.108.010(4). The definition does not exclude information obtained through
agents. The evidence presented by Lakoda was sufficient to support a jury verdict that
the Longfei factory and methods of working with it was Lakoda's trade secret.
V. Sufficiency of evidence on damages
OMH challenges the damage award, alleging the jury's award is not supported by
"sufficient and accurate" evidence. Br. of Appellant at 30.
Lakoda presented its evidence on damages through Mr. Ames. He first identified
an exhibit that was a collection of invoices from Lakoda to OMH and an exhibit that was
a collection of purchase orders Lakoda had placed with TPD. He testified that the
collections of invoices and purchase orders would reflect, respectively, all ofLakoda's
costs of goods sold to OMH and all ofLakoda's revenue received from OMH, with the
difference being Lakoda's gross profit. He also identified exhibits that had been prepared
to summarize information from the invoices and purchase orders that was relevant to
Lakoda's calculation of its damages. Lakoda offered the summaries under ER 1006.
OMH objected to the first summary offered, Exhibit 16, on the basis that one type
of entry was an "average unit price" rather than a figure actually reflected on the
underlying documents. 1 RP (May 6, 2014) at 112. The trial court overruled the
28
No. 32616-1-111
Lakoda, Inc. v. OMH Proscreen USA, Inc.
objection and the summary was admitted into evidence. When other summaries that were
even more key to Lakoda's damage claim were offered thereafter, OMH indicated that
they were "subject to the same objection." See 1 RP (May 6, 2014) at 140-42 (offer and
admission of Ex. 126).
OMH now challenges the trial court's ruling admitting several of the summaries,
arguing they were not accurate.
ER 1006 provides that "[t]he contents of voluminous writings, recordings, or
photographs which cannot conveniently be examined in court may be presented in the
form of a chart, summary, or calculation." The rule requires that the summary and the
originals be made available at a reasonable time and place. No challenge was made at
trial to Lakoda's representation that its summaries and underlying documents were made
available to OMH before trial.
Relying on case law holding that the proponent of a summary offered under ER
1006 must show that it is "accurate," OMH identifies three alleged errors in the
summaries. But only one of the alleged errors was raised as an objection when the
summaries were offered. That objection was to the inclusion of an average unit price in
exhibit 16. While the average unit price did not itself appear on the summarized
documents, it was derived from them, and its correctness or incorrectness could be
determined from them. It fell within the rule's authorization to present the contents of
voluminous documents "in the form of a ... calculation."
29
No. 32616-1-111
Lakoda, Inc. v. OMH Proscreen USA, Inc.
OMH's other objections come too late. 9 Lakoda laid the required foundation of
accuracy. See 1 RP (May 6, 2014) at 111-12, 142 ("Q. Is this an accurate summary of
the information contained in Exhibit 18? A. Yes."; "Q. Do you believe that this is an
accurate summarization of the information contained within Exhibit 128? A. Yes, I
do."). The foundation requirement is not a guarantee of accuracy. See Fidelity Nat. Title
Ins. Co. v. Intercounty Nat. Title Ins. Co., 412 F.3d 745, 753 (7th Cir. 2005) ("[T]he fact
that [summaries] might be inaccurate is not a ground for excluding them.") The reason
the rule requires advance production of the summarized documents is so that an
adversary can spot check the summary for accuracy and, should it reveal inaccuracies,
"have solid grounds for moving to exclude [the summary] from the trial unless the
inaccuracies were promptly corrected." Id.OMH's identification for the first time on appeal of asserted errors in the
summaries admitted into evidence is no basis for setting aside the damages awarded. "A
strong presumption exists in Washington that a jury's determination of the amount of
damages to be awarded is valid." Palmer v. Jensen, 81 Wn. App. 148, 150, 913 P.2d 413(1996). An appellate court will generally not disturb a jury's verdict on damages if the
verdict is within the range of the evidence presented at trial. Steele v. Queen City Broad.
9
They also depend on exhibits 126 and 128, neither of which was designated as
part of the record on appeal.
30
No. 32616-1-III
Lakoda, Inc. v. OMH Proscreen USA, Inc.
Co., 54 Wn.2d 402,409, 341 P.2d 499 (1959). OMH presents no basis for disturbing this
verdict.
VI. Attorney fees
Finally, OMH challenges the trial court's award of attorney fees to Lakoda. It
argues the court abused its discretion when it awarded fees because: ( 1) Lakoda only
recovered a nominal award on the trade secret claim, (2) the award did not segregate time
spent on claims for which Lakoda was not entitled to recover fees, and, (3) the final
award included hours spent to recover fees and the costs of a court reporter at Mr.
Hilmoe's depositions.
Lakoda was awarded reasonable attorney fees under RCW 19.108.040, which
provides that "[i]f ... willful and malicious misappropriation exists, the court may award
reasonable attorney's fees to the prevailing party."
"This court reviews the reasonableness of attorney fees awards under an abuse of
discretion standard." Brand v. Dep 't of Labor & Indus., 139 Wn.2d 659, 665, 989 P.2d
1111 ( 1999). A trial court abuses its discretion if its award is manifestly unreasonable or
based on untenable grounds. Id. "The trial court's discretion is not unbridled" and the
Washington State Supreme Court has overturned attorneys fee awards when it
"disapproved of the method utilized by the trial court" to calculate an award. Progressive
Animal Welfare Soc. v. Univ. of Wash., 114 Wn.2d 677, 689, 790 P.2d 604 (1990).
31
No. 32616-1-111
Lakoda, Inc. v. OMH Proscreen USA, Inc.
A. "Nominal" award
OMH first argues that because Lakoda was only awarded nominal damages on its
trade secret claim, the court abused its discretion when it awarded Lakoda fees and costs
in the amount of $231,441.78. It cites Farrar v. Hobby, in which the United States
Supreme Court held that in a civil rights case, a prevailing party who receives an award
of nominal damages may not be entitled to a recovery of fees and costs. 506 U.S. 103,
111-12, 113 S. Ct. 566, 121 L. Ed. 2d 494 (1992); see also Sintra, Inc. v. City of Seattle,
131 Wn.2d 640, 664-65, 935 P.2d 555 (1997). Still, "Farrar does not set forth a per se
rule that attorney's fees are improper when only nominal damages are obtained." Ermine
v. City of Spokane, 143 Wn.2d 636, 644, 23 P.3d 492 (2001). And this is not a Section
1983 case.
Most persuasive to us is the overlapping nature of the claims and the
implausibility that the jury believed Lakoda suffered only $1 in damages from trade
secret misappropriation. The jurors were instructed that Lakoda had the burden on its
trade secret claim of proving "[t]hat Defendants' misappropriation was a proximate cause
of damages to Lakoda, Inc., or as a result of the misappropriation Defendants received
money or benefits that injustice and fairness belong to Lakoda, Inc." CP at 1026. In
completing the special verdict, the jury not only found misappropriation, it separately
found that the misappropriation was willful and malicious. OMH points us to no
32
No. 32616-1-III
Lakoda, Inc. v. OMH Proscreen USA, Inc.
evidence presented during the trial that would explain $1.00 in damages resulting from
the misappropriation.
We agree with the trial court that it appears the jurors were heeding the court's
instruction that they "should not duplicate the damages in your award." CP at 1059; cf
Reazin v. Blue Cross & Blue Shield of Kansas, Inc., 663 F. Supp. 1360, 1430 (D. Kan.
1987), (rejecting defense argument that a punitive damage award could not stand where
jurors awarded only $1.00 in damages for the underlying claim; "[v ]iewing all the facts
of this case and the jury instructions in their entirety, the verdict can only be understood
as the jury's conclusion [that plaintiff] suffered in excess of one and a half million dollars
of damages as a direct consequence of defendant's conduct violating both the antitrust
laws of the United States and the tort law of the State ofKansas."), aff'd in part, 899 F.2d
951 (10th Cir. 1990).
We doubt the jury viewed Lakoda's damage from the trade secret misappropriation
as nominal and even if it did, the trial court would have discretion to award the fees.
Ermine, 143 Wn.2d at 650 (emphasizing the deferential abuse of discretion standard
applied in reviewing a court's decision to grant or deny attorney fees in a nominal
damages case). We find no abuse of discretion.
B. Segregation
OMH next argues the trial court abused its discretion because it did not segregate
33
No. 32616-1-111
Lakoda, Inc. v. OMH Proscreen USA, Inc.
the time Lakoda spent on the breach of contract claim or OMH's counterclaims from the
misappropriation claim.
To calculate an attorney fee award, a court multiplies the number of hours
reasonably expended by the reasonable hourly rate. Chuong Van Pham v. Seattle City
Light, 159 Wn.2d 527, 538, 151 P.3d 976 (2007). The court should discount hours spent
on unsuccessful claims, duplicated or wasted effort, or otherwise unproductive time.
Bowers v. Transamerica Title Ins. Co., 100 Wn.2d 581, 597, 675 P.2d 193 (1983).
"[H]ours reasonably expended must be spent on claims having a 'common core of facts
and related legal theories,'" to those for which the party is entitled to recover. Chuong
Van Pham, 159 Wn.2d at 538 (quoting Martinez v. City of Tacoma, 81 Wn. App. 228,
242-43, 914 P.2d 86 (1996)).
Lakoda's lawyers provided its billing statements to the court and a representation
of the amount they believed reflected efforts enabling them to prevail on the trade secret
claim. They acknowledged the work related to other claims, but all involved a common
core of fact and were not easily segregated. They reduced the fees by 14 percent, an
amount they believed was a reasonable adjustment for duplicate billing.
The court found that the claims were "intertwined," and explained that after going
through the supporting billing information it believed the 14 percent reduction was fair.
RP (June 27, 2014) at 20-21.
34
No. 32616-1-III
Lakoda, Inc. v. OMH Proscreen USA, Inc.
There may be some overlapping. As I went through and looked at
those, I was trying to figure out how to tally and calculate them. Mr.
Roberts agreed he would take a percentage off even what he figured to
make sure that it stays fair. To the Court, that seems like a very reasonable
way.
Id.This is a case in which there was a substantial overlap of conduct relevant to each
ofLakoda's claims. And because of OMH's "financial interest" defense to trade secret
misappropriation, the disputes of fact over OMH' s own situation and course of action
became relevant to prevailing on the trade secret claim. The trial court considered the
overlap and was in the best position to assess and account for it. OMH has not provided
us with any basis for finding the 14 percent discount manifestly unreasonable.
C. Fees-on-fee fights and deposition costs
Finally, OMH argues the court abused its discretion when it awarded Lakoda fees
for the time spent arguing the attorney fees motion and court reporter costs for Mr.
Hilmoe's deposition. Of the $231,441 awarded in fees, $8,600 were incurred arguing the
fee motion. OMH does not identify the amount of costs associated with the depositions
of Mr. Hilmoe.
"As a general rule, fees incurred while litigating an entitlement to fees are
recoverable under remedial statutes." Johnson v. Dep 't of Transp., 177 Wn. App. 684,
695 n.7, 313 P.3d 1197 (2013) (citing Fisher Props., Inc. v. Arden-Mayfair, Inc., 115
Wn.2d 364,378, 798 P.2d 799 (1990)). OMH nonetheless complains that Lakoda waited
35
No. 32616-1-111
Lakoda, Inc. v. OMH Proscreen USA, Inc.
until it filed its reply brief on the fee motion to raise its request for fees incurred in
seeking fees. OMH had the opportunity to voice its objections to the additional fees
when the motion on the fee award was heard, however, and does not claim to have
requested and been denied a continuance. The trial court did not abuse its discretion in
awarding fees based on the supplemental request.
As to deposition costs, the trial court awarded the entire cost of the court reporter
in attendance at Mr. Hilmoe's several depositions. With the benefit of a transcript of trial
at this point, OMH contends only three pages of the Hilmoe deposition were used at trial.
It counts only pages 566, 573, and 574 of the Report of Proceedings (5 RP (May 8,
2014)), on which Mr. Hilmoe is impeached with his deposition. It is obvious from the
transcript, however, that Lakoda's lawyer used the depositions to keep Mr. Hilmoe on a
short leash throughout his cross-examination. Impeachment only happened when Mr.
Hilmoe strayed.
At the time it ruled on the fee award, the trial court did not have the trial transcript,
but only Lakoda's lawyers' recollection that the depositions were used extensively,
OMH's lawyers' recollection that they were not used extensively, and its own
recollection. It entered a finding that "[d]uring trial, the depositions sought as costs were
used extensively." CP at 1171.
Under RCW 4.84.010(7), a party may recover a reasonable expense for the
transcription of depositions used at trial "[t]o the extent that the court ... finds that it was
36
No. 32616-1-111
Lakoda, Inc. v. OMH Proscreen USA, Inc.
necessary to achieve the successful result ... PROVIDED, That the expenses of
depositions shall be allowed on a pro rata basis for those portions of the depositions
introduced into evidence or used for purposes of impeachment." In other words, a cost
award for portions of a deposition used for impeachment is a floor, below which the court
may not go. It is not a cap. Cases have upheld an award of the costs of depositions
where they are used at trial "during cross-examination and for impeachment purposes,"
and even where they are successfully used in procuring a summary judgment. Payne v.
Paugh, 190 Wn. App. 383,414, 360 P.3d 39 (2015) (emphasis added). The court did not
abuse its discretion in awarding the depositions' cost.
Attorney fees on appeal
Lakoda seeks an award of its reasonable attorney fees and costs on appeal under
RCW 19.108.040 and RAP 18.1. As the prevailing party, Lakoda has the right to recover
reasonable fees and costs incurred-in this appeal that are associated with its trade secret
claim. They are awarded subject to Lakoda's compliance with RAP 18.l(d).
Affirmed.
A majority of the panel has determined this opinion will not be printed in the
37
No. 32616-1-111
Lakoda, Inc. v. OMH Proscreen USA, Inc.
Washington Appellate Reports, but it will be filed for public record pursuant to RCW
2.06.040.
WE CONCUR:
mo, J. f' Fearing, CJ.
38