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Filed 9/9/13 Certified for publication 9/25/13 (order attached)

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIRST APPELLATE DISTRICT

DIVISION TWO

ANDREINI & COMPANY,

Plaintiff and Appellant,

v.

MacCORKLE INSURANCE SERVICE, 

INC. et al.,

Defendants and Respondents.

 A133473

 (San Mateo County

 Super. Ct. No. CIV 463671)

For the second time in recent years we are called upon to construe the scope of 

rule 8.278 of the California Rules of Court (rule 8.278), which governs recovery of costs 

allowed following a successful appeal. Last year the Supreme Court affirmed a decision 

by this court, and held that ―rule 8.278(d)(1)(F) does not authorize an award of costs for 

interest expenses and fees incurred to borrow funds to deposit as security for a letter of 

credit that was procured to secure an appeal bond.‖ (Rossa v. D.L. Falk Construction, 

Inc. (2012) 53 Cal.4th 387, 399 (Rossa).) Here, the respondent borrowed money to 

deposit with the trial court in lieu of securing an appeal bond. After its appeal was 

successful, it was allowed to recover the more than $200,000 interest paid on the 

borrowed funds as a cost of appeal. The costs were included in an amended judgment 

from which this timely appeal was perfected.

We first consider whether rule 8.278 and the reasoning of Rossa preclude the 

appellant recovering the interest paid on the borrowed funds as a cost of appeal. We 

conclude this type of interest is likewise precluded. Next, we consider whether a recent 

amendment of rule 8.278, which expressly allows recovery of interest in this situation, 
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and which became effective during the pendency of this appeal, should be given 

retroactive application. We conclude that it should not. In light of these conclusions, we 

modify the amended judgment by deleting the interest, and affirm the modified, amended 

judgment.

BACKGROUND

This dispute arose out of the decision of insurance broker Frederic Holbrook to 

change his employment from Andreini & Company (Andreini) to MacCorkle Insurance 

Service, Inc. (MacCorkle), taking a list of clients with him. At the conclusion of a bench 

trial, the trial court concluded that Holbrook did not breach his contract with Andreini or 

otherwise misappropriate Andreini‘s trade secrets. However, the court further concluded 

that MacCorkle and its chief executive officer Bernard Lauper were guilty of 

misappropriating Andreini's trade secrets. Damages were awarded against MacCorkle 

and Lauper in the amount of $1,275,000. Andreini, MacCorkle, and Lauper all appealed. 

Division Four of this District affirmed the judgment in favor of Holbrook, and reversed 

that part of the judgment against MacCorkle and Lauper. (Andreini & Co. v. MacCorkle 

Ins. Service, Inc. (Jan. 14, 2011, A124784) [non pub. opn.].) In short, it was a complete 

win for MacCorkle and Lauper (who will hereafter be collectively referred to as 

MacCorkle).

MacCorkle did not post an appeal bond, electing instead to deposit $2,057,668.97 

with the clerk of the trial court, an amount he borrowed. In April 2011, following receipt 

of the remittitur, and after the Supreme Court had granted review of our decision in 

Rossa, MacCorkle filed a memorandum of costs for the expenses incurred on the appeal, 

seeking $214,771.40 representing the net interest on the amount borrowed, identifying 

this item as ―other expenses reasonably necessary to secure surety bond.‖ No longer able 

to rely on our opinion in Rossa, but clearly hoping that its reasoning would be vindicated, 

Andreini moved to tax this item of MacCorkle and Lauper‘s claimed costs. Relying on 

Cooper v. Westbrook Torrey Hills, LLP (2000) 81 Cal.App.4th 1294 (Cooper), which we 

had declined to follow in our Rossa opinion, MacCorkle argued that the interest was 

allowable under rule 8.278. The matter was extensively argued to the trial court in July 
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2011. Believing ―the equities in this case probably weigh against the award of the 

interest,‖ the court nevertheless felt bound to follow Cooper. The court then entered an 

amended judgment awarding MacCorkle ―$221,324.52 in costs on appeal . . . pursuant to 

Rule 8.278,‖ from which Andreini perfected this timely appeal. 

REVIEW

Rossa

In Rossa, our Supreme Court considered that part of rule 8.278 which at the time 

authorized recovery as appeal costs ―The cost to procure a surety bond, including the 

premium, the cost to obtain a letter of credit as collateral, and the fees and net interest 

expenses incurred to borrow funds to provide security for the bond or to obtain a letter of 

credit, unless the trial court determines the bond was unnecessary.‖ 

(Rule 8.278(d)(1)(F).) The appellant in Rossa had secured a standby letter of credit for 

$954,070 that a surety required before posting an appeal bond. The bank issuing the 

letter of credit in turn required the appellant to deposit the face value of the letter of credit 

with the bank. The appellant had to borrow the money to satisfy the bank‘s requirement, 

thereby incurring almost $100,000 in interest, plus a fee of more than $1,700 to extend 

the line of credit. Having won on appeal, the appellant sought to recover these sums, and 

was rejected by the trial court, then by this court, and finally by the Supreme Court. 

(Rossa, supra, at p. 391.) Two points of the Supreme Court‘s decision are central.

First, after an extensive examination of the principles governing recovery of costs 

of appeal and the evolution of what is now rule 8.278, the court noted that ―provisions 

allowing the recovery of costs historically have been strictly construed,‖ and that this 

approach ―was retained after the Legislature empowered the Judicial Council to prescribe 

rules for appellate practice.‖ (Rossa, supra, at p. 395.) The court then explained why 

this history and approach supported denying recovery of the fee and interest related to the 

letter of credit:

―Construing rule 8.278(d)(1)(F) to extend to defendant‘s interest payments and 

fees related to its line of credit would be inconsistent with the historic principle that cost 

provisions are to be strictly construed. Neither the language of the rule nor its history 
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indicates that the universe of items recoverable was being expanded by the Judicial 

Council in 1993 to include more remote or indirect costs of acquiring a letter of credit, 

such as interest and fees paid on credit lines from which funds were drawn to secure a 

letter of credit. Given that interest expenses may far exceed all other costs (more than 

tripling the costs in this case), we would expect a clear expression of an intent to allow 

the recovery of this item. As the Court of Appeal observed below,  ̳courts do not lightly 

presume that substantial changes occur by ―misdirection,‖ ―vague terms or ancillary 

provisions,‖ or in a ―cryptic‖ manner. [Citation.]‘ . . . . [¶] . . . [E]ven if we were not 

required to strictly construe cost provisions, more general principles of statutory 

construction weigh in favor of construing rule 8.278‘s reference to  ̳the cost to obtain a 

letter of credit‘ to encompass only the direct charges imposed in connection with the 

acquisition of a letter of credit. . . . 

―Rule 8.278(d)(1)(F) refers to two items—the cost of a surety bond and the cost of 

a letter of credit. As explained above, surety bonds and standby letters of credit are 

instruments that provide assurance that an obligation will be paid, but they do not involve 

a transfer of funds unless the applicant defaults. Due to its financial situation, an 

applicant may have to borrow assets to secure payment before these instruments will be 

issued, but borrowing funds is distinctly different from obtaining a bond and a standby 

letter of credit; a loan is a means to acquire assets to satisfy the judgment, while a bond 

and a letter of credit are a means to verify that assets are available to pay the judgment. 

Due to these differences, the charges for a loan typically will be substantially greater than 

the charges for a secured bond or letter of credit. Moreover, interest charges and related 

fees for a loan may vary greatly, depending on the creditworthiness of the judgment 

debtor, current interest rates, and other terms of the loan, rendering such charges 

unpredictable and potentially many times greater in amount than other costs.

―If we adopt a restrictive meaning of the reference in rule 8.278(d)(1)(F) to  ̳the 

cost to obtain a letter of credit,‘ interpreting it to encompass only the direct charges for a 

letter of credit, the cost will be similar in amount to  ̳the cost to procure a surety bond,‘ 

and similar in character with respect to the service it is acquiring—verification of assets. 
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If we adopt a more expansive meaning, interpreting it to encompass interest charges and 

fees incurred to borrow funds to secure the letter of credit, that item of cost will be 

markedly dissimilar to  ̳the cost to procure a surety bond,‘ with respect to both the size 

and nature of the expenses incurred. Therefore, we adopt the restrictive meaning of  ̳the 

cost to obtain a letter of credit,‘ and reject an interpretation that encompasses interest 

expenses incurred in acquiring assets to secure a letter of credit.‖ (Rossa, supra, at 

pp. 396-397.)

Second, the court addressed Cooper:

―[D]efendant relies on Cooper. . . in which the court allowed an appellant to 

recover as costs the interest expenses incurred on funds the appellant borrowed to deposit 

as an undertaking in order to stay foreclosure pending appeal. The court observed that 

former rule 26(c)(6) [the predecessor to rule 8.278] authorized the award of  ̳ ―expense[s] 

reasonably necessary to procure the surety bond,‖ ‘and that [Code of Civil Procedure] 

section 995.730 provides that  ̳ ―[a] deposit given instead of a bond . . . is treated the 

same, and is subject to the same conditions, liability, and statutory provisions . . . as the 

bond.‖ ‘ (Cooper, supra, at p. 1298.) The court concluded,  ̳In order to read rule 26(c) 

consistent with section 995.730, the reasonable or necessary costs associated with 

procuring a deposit in lieu of a bond must be awarded to a prevailing party.‘ ( Id. at 

p. 1299, fn. omitted.)

―In light of our conclusion that rule 8.278 does not authorize an award of interest 

expenses incurred to acquire assets to obtain a bond and letter of credit to stay 

enforcement of a judgment pending appeal, it follows that section [Code of Civil 

Procedure] 995.730 does not authorize an award of interest expenses incurred to acquire 

assets to deposit in lieu of a bond. Therefore, we disapprove the holding of Cooper v. 

Westbrook Torrey Hills . . . . We express no opinion with respect to whether [Code of 

Civil Procedure] section 995.730, which states that deposits are subject to the same 

statutory provisions as bonds, but does not refer to the California Rules of Court, was 

intended to apply rules concerning bonds to deposits in lieu of bonds, notwithstanding the 

fact that the Legislature has delegated to the Judicial Council the responsibility for 
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 ̳establish[ing] by rule allowable costs on appeal and the procedure for claiming those 

costs.‘ ([Code of Civil Procedure] § 1034, subd. (b).)‖ (Rossa, supra, at p. 398, 

fn. omitted.)

Andreini sees reversal as a simple matter of stare decisis, because in Rossa the 

Supreme Court reached the categorical conclusion that ―Rule 8.278(d)(1)(F) does not 

allow recovery of interest expense.‖ By contrast, MacCorkle labors mightily to distance 

itself from Rossa, and delineates what it claims proves that ―the development of the rules 

relating to the award of costs on appeal demonstrates a steady expansion of recoverable 

costs.‖ MacCorkle then insists that ―the statutes,‖ particularly Code of Civil Procedure 

section 995.730, ―provide a separate and independent basis for an award of costs.‖ 

Moreover, ―the rules as adopted by the Judicial Council cannot be inconsistent with the 

statutes adopted by the Legislature.‖ 

We agree, almost entirely, with Andreini. The only point of our disagreement is 

that stare decisis is not truly a factor. ―Under the doctrine of stare decisis, all tribunals 

exercising inferior jurisdiction are required to follow decisions of courts exercising 

superior jurisdiction.‖ (Auto Equity Sales, Inc. v. Superior Court (1962) 57 Cal.2d 450, 

455.) ―An appellate decision is not authority for everything said in the court‘s opinion, 

but only  ̳for the points actually involved and actually decided.‘ ‖ (Santisas v. Goodin

(1998) 17 Cal.4th 599, 620.) The classic statement dates to 1860: ―A decision is not . . . 

authority except upon the point actually passed upon by the Court and directly involved 

in the case.‖ (Hart v. Burnett (1860) 15 Cal. 530, 598.) The point actually involved and 

decided in Rossa was the holding quoted at the start of this opinion. We are not dealing 

with that point—whether the interest costs of a letter of credit used in lieu of an appeal 

bond could be recovered under rule 8.278(d)(1)(F)—but the closely related issue of 

whether the interest costs of money borrowed for deposit with the court in lieu of an 

appeal bond can be recovered under rule 8.278.

Rossa‘s two statements concerning deposits in lieu of bonds occur in that precise 

and limited context. First, the Supreme Court quoted with approval a 1964 decision by 

this court when discussing the necessity of strictly construing rule 8.278: ―Moreover, 
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interpreting the rule to reach indirect costs that are not clearly specified in the rule would 

invite litigation concerning the myriad ways in which the burden of providing security on 

appeal constitutes a ―cost‖ to the appellant. As the court observed in Sequoia Vacuum 

Systems v. Stransky (1964) 229 Cal.App.2d 281,  ̳[t]he necessity to set limits is obvious 

and dictates a close adherence to the clearly expressed legislative intent [citations]. For 

example, the extension [of the right to recover the premium on a bond to allow the 

recovery of interest payments made to borrow funds deposited in lieu of a bond] would 

logically permit a party who was not required to borrow but could deposit his own 

money, to claim as costs the interest which he might otherwise be acquiring through 

investment elsewhere.‖ (Id. at p. 289.)‖ (Rossa, supra, at p. 396.) 

Second, in disapproving Cooper‘s construction of Code of Civil Procedure section 

995.730, the court stated: ―In light of our conclusion that rule 8.278 does not authorize an 

award of interest expenses incurred to acquire assets to obtain a bond and letter of credit 

to stay enforcement of a judgment pending appeal, it follows that section 995.730 does 

not authorize an award of interest expenses incurred to acquire assets to deposit in lieu of 

a bond.‖ (Rossa, supra, at p. 398.)

Still, if Rossa is not dispositive, it does provide the analytical template. Rossa

made it clear that the matrix governing the recovery of appellate costs are the statutes 

devoted to that subject and rule 8.278, all strictly construed. With the exception of the 

2012 amendment of rule 8.278, which we address separately, nothing in the matrix has 

changed. Code of Civil Procedure section 995.730, the basis for the Cooper decision, has 

not been amended to add language expressly dealing with costs on appeal. Thus, for 

purposes of this part of our analysis, the rule of strict construction endorsed in Rossa still 

operates. The Supreme Court‘s statement that ―Construing rule 8.278(d)(1)(F) to extend 

to defendant‘s interest payments and fees related to its line of credit would be 

inconsistent with the historic principle that cost provisions are to be strictly construed‖ 

(Rossa, supra, at p. 396) is no less applicable to interest related to a sum deposited with 

the court. (See Civ. Code, § 3511 [―Where the reason is the same, the rule should be the 

same‖].)
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MacCorkle next argues that ―Rossa discussed but did not decide the direct cost 

recoverability issue.‖ But that issue was subsumed within Rossa‘s discussion of the rule 

of strict construction.

MacCorkle‘s final attempt to break free of Rossa is to advance an issue that was 

not considered by the Supreme Court. MacCorkle contends that ―allowing a plaintiff to 

recover interest at ten percent per year during the course of an appeal but prohibiting [a] 

defendant and appellant from recovering the cost incurred to deposit the funds to stay 

enforcement violate[s] the defendant‘s right to equal protection.‖ Although something 

like this claim was mentioned briefly during the extensive argument heard by the trial 

court on Andreini‘s motion to tax, nothing like it can be found in MacCorkle‘s written 

opposition. Andreini responds that the single oral mention (consisting of 12 lines in the 

reporter‘s transcript) was inadequate to preserve the issue for appellate review. We agree 

with Andreini. (People v. Burgener (2003) 29 Cal.4th 833, 860-861, fn. 3; Hershey v.

Reclamation District No. 108 (1927) 200 Cal. 550, 564; Fourth La Costa Condominium 

Owners Assn. v. Seith (2008) 159 Cal.App.4th 563, 585.) 

Although we have the discretion to relax the rule in order to consider a pure issue 

of law, particularly if it implicates an important issue of public policy, or if it is not 

dependent on the production of additional evidence (e. g., Adams v. Murakami (1991) 

54 Cal.3d 105, 115, fn. 5; Hale v. Morgan (1978) 22 Cal.3d 388, 394; 9 Witkin, Cal. 

Procedure (5th ed. 2008) Appeal, § 415, pp. 473–474), we decline to do so. The issue of 

costs seems particularly one where specific dollars-and-cents comparisons would be most 

pertinent. This was the approach we adopted when addressing a very similar claim in our 

Rossa opinion. Although our decision no longer had any authority because the Supreme 

Court had granted review, like Banquo‘s ghost it infused both sides‘ arguments in the 

trial court. It is most appropriate to remind McCorkle of this detail, the same one it 

accused Andreini in the trial court of trying to evade, which removes any element of 

surprise in McCorkle‘s omission. Put bluntly, McCorkle has no valid excuse for waiting 

until this appeal to develop the argument for the first time.
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In conclusion, although Rossa‘s examination of letter of credit costs does not 

qualify as direct, controlling precedent, its reasoning is highly germane. The logic of the 

approach adopted by the Supreme Court in Rossa easily transfers to the arguments made 

here concerning borrowed deposit costs. 

Rule 8.278(d)(1)(G)

In Rossa, our Supreme Court noted, notwithstanding its construction of rule 8.278, 

―Of course, the Judicial Council may consider whether to extend the right to recover 

costs to interest expenses and fees incurred to borrow funds to secure a letter of credit.‖ 

(Rossa, supra, at p. 398, fn. 8.) The Judicial Council did so consider. In October 2012, 

and in response to Rossa, it amended rule 8.278(d)(1)(F)—with the language we italicize 

below—and added rule 8.278(d)(1)(G) to provide for recovery of:

―(F) The cost to procure a surety bond, including the premium, and the cost to 

obtain a letter of credit as collateral, and the fees and net interest expenses incurred to 

borrow funds to provide security for the bond or to obtain a letter of credit, unless the 

trial court determines the bond was unnecessary; and

―(G) The fees and net interest expenses incurred to borrow funds to deposit with 

the superior court in lieu of a bond or undertaking, unless the trial court determines the 

deposit was unnecessary.‖

―Rules adopted by the Judicial Council . . . shall take effect on a date to be fixed in 

the order of adoption.‖ (Gov. Code, § 68072.) The Judicial Council specified that these 

changes to rule 8.278 would take effect on January 1, 2013. The parties were asked to 

file supplemental briefs on the effect of rule 8.278 (d)(1)(G).

Rules of Court are interpreted according to the same principles governing 

interpretation of statutes. (Rossa, supra, at p. 391; Alan v. American Honda Motor Co., 

Inc. (2007) 40 Cal.4th 894, 902.) With respect to statutes, our Supreme Court has held 

there is a ―strong presumption‖ against applying them retroactively. (McClung v. 

Employment Development Dept. (2004) 34 Cal.4th 467, 475; see Save Our Forest & 

Ranchlands v. County of San Diego (1996) 50 Cal.App.4th 1757, 1763 [considering 

retroactive application of amended Rule of Court].) ―  ̳[A] statute‘s retroactivity is, in the 
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first instance, a policy determination for the Legislature and one to which courts defer 

absent ―some constitutional objection‖ to retroactivity.‘ [Citation.] . . .  ̳[A] statute may 

be applied retroactively only if it contains express language of retroactivity or if other 

sources provide a clear and unavoidable implication that the Legislature intended 

retroactive application.‘ [Citation.]‖ (McClung v. Employment Development Dept., 

supra, at p. 475) A statute is deemed to be retroactive if it substantially changes the legal 

consequences of past events. (Californians for Disability Rights v. Mervyn’s, LLC (2006) 

39 Cal.4th 223, 230-231; Western Security Bank v. Superior Court (1997) 15 Cal.4th 232, 

243.) 

The operative question is whether the Judicial Council intended the changes to 

rule 8.2678 to operate prior to the effective date of those changes. This inquiry involves 

a pure issue of law to which we bring our independent, de novo review. (Reid v. Google, 

Inc. (2010) 50 Cal.4th 512, 527; In re Tobacco II Cases (2009) 46 Cal.4th 298, 311.)

If rule 8.278(d)(1)(G) were to be applied here, Andreini‘s liability for 

MacCorkle‘s costs would zoom from $6,553.12 to $221,324.52. That would clearly 

qualify as ―new or different liabilit[y],‖ an ―  ̳ ―increase[d] . . . liability,‖ ‘ ‖and thus a 

substantial change in the ―  ̳legal consequences of past conduct.‘ ‖ (Quarry v. Doe I

(2012) 53 Cal.4th 945, 956.) Imposition of the vastly greater sum is far too significant to 

be characterized as a mere non-retroactive clarification of existing law. (See 

Colmenares v. Braemar Country Club, Inc. (2003) 29 Cal.4th 1019, 1024, fn. 2.) 

This is confirmed by the only thing approaching explanatory history for the 

changes to rule 8.278. The report of the Appellate Advisory Committee to the Judicial 

Council, after summarizing Rossa, stated: ―This proposal amends rule 8.278 . . . to 

provide that the net interest expenses and fees incurred to borrow funds for deposit as 

security for an appeal bond, a letter of credit procured to secure an appeal bond, or a 

deposit with the superior court in lieu of an appeal bond are all recoverable costs. This 

change will remedy a problem that causes significant costs to parties who wish to appeal 

money judgments.‖ The report further advised the Council that the changes ―may impose 

a significant new cost on respondents if the appellant prevails on appeal.‖ (Appellate 
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Advisory Com., Judicial Council of Cal., Rep. on Appellate Procedure: Recoverable 

Costs on Appeal (Aug. 27, 2012) pp. 3, 5, italics added.) There is nothing in the report 

indicating an intent for retroactive application. Indeed, even the brief postponement of 

the amended rule‘s effective date (from October 26, 2012 to January 1, 2013) evidences 

purely prospective application. (See People v. Floyd (2003) 31 Cal.4th 179, 187.) We 

defer to the Judicial Council‘s decision, and conclude that the presumption against 

retroactive application has not been overcome. (McClung v. Employment Development 

Dept., supra, 34 Cal.4th 467, 475.)

The preceding establishes that rule 8.278(d)(1)(G) is not to receive retroactive 

application to this appeal, which at all relevant times has been governed by the version of 

rule 8.278 considered by our Supreme Court in Rossa. That version, strictly construed, 

made no allowance for a successful appellant to recover the interest incurred on borrowed 

funds used to make a deposit in place of an appeal bond. The trial court thus erred in 

denying MacCorkle‘s motion to tax Andreini‘s effort to recover that interest as a cost of 

appeal.

DISPOSITION

That portion of the amended judgment awarding MacCorkle ―$221,324.52 in costs 

on appeal . . . pursuant to Rule 8.278‖ is modified to ―$6,553.12 in costs on appeal . . . 

pursuant to Rule 8.278.‖ As so modified, the judgment is affirmed. Andreini shall 

recover its costs on this appeal.

_________________________

Richman, J.

We concur:

_________________________

Kline, P.J.

_________________________

Haerle, J.
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Filed 9/25/13 after filing 

nonpublished opinion on 9/9/13

CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIRST APPELLATE DISTRICT

DIVISION TWO

ANDREINI & COMPANY,

Plaintiff and Appellant,

v.

MacCORKLE INSURANCE SERVICE, 

INC. et al.,

Defendants and Respondents.

 A133473

 (San Mateo County

 Super. Ct. No. CIV 463671)

ORDER CERTIFYING OPINION 

FOR PUBLICATION

THE COURT:

The opinion in the above-entitled matter filed on September 9, 2013, was not

certified for publication in the Official Reports. For good cause appearing and pursuant 

to California Rules of Court, rule 8.1105, the opinion in the above-entitled matter is 

ordered certified for publication in the Official Reports.

Dated: ______________ ___________________________

Kline, P.J.
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Trial Court: San Mateo Superior Court

Trial Judge: Honorable Gerald J. Buchwald

Attorney for Plaintiff and Appellant: Hanson Bridgett, Joseph M. Quinn, Adam 

W. Hofmann; David Jay Morgan

Attorneys for Defendants and Respondents: Hayes Scott Bonino Ellingson & McLay, 

Mark G. Bonino, Stephen P. Ellingson, 

Jamie A. Radack; CMD Associates, C. 

Matthew Didaleusky