Filed 6/4/14 PCB Productions v. MJC America CA2/4 NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION FOUR

PCB PRODUCTIONS, INC.,
Plaintiff and Appellant,

v.
MJC AMERICA, LTD., et al.,
Defendants and Appellants. B242443
(Los Angeles County Super. Ct. No. LC090187)

APPEALS from a judgment and orders of the Superior Court of Los Angeles County, James A. Kaddo, Judge. Affirm ed in part and reversed in part. Reed Smith, Margaret M. Grignon, Anne M. Grignon; Cohon & Pollak, Jeffrey M. Cohon, Howard A. Pollak and Henry Nicholls for Plaintiff and Appellant. Horvitz & Levy, Lisa Perrochet, Robert H. Wright; Yoka & Smith, Christopher E. Faenza and Christopher P. Leyel for Defendants and Appellants.2 Plaintiff and appellant PCB Productions, In c. (PCB) sustained damages from a fire in its sound studio. After determining that th e fire was caused by a small table fan that had overheated and ignited, PCB sued the fa n’s manufacturer (defendant and respondent MJC America, Ltd. [MJC]) and retailer (defe ndant and respondent Fr y’s Electronics, Inc. [Fry’s]) for breach of warranty and strict product liability. The jury found defendants
liable under both theories a nd awarded PCB $6.2 million in damages, including almost $5.5 million for the cost of recreating its lost original compositions and sound samples. During posttrial proceedings, the trial c ourt granted defendant s’ motion for new trial on the ground the evidence wa s insufficient to su pport the verdict. The trial court’s reasons for concluding the jury should have reached a diff erent verdict were that: (1) PCB failed to prove that the fire was cau sed by a design or manuf acturing defect in the fan; (2) the jury mistakenly applied the consumer expectati on test rather than the riskbenefit test; and (3) the jury applied the wr ong measure of damages. After granting the motion for new trial, the trial court denied the motion for judgment notwithstanding the verdict (JNOV) as moot. PCB appealed from the new trial order; de fendants filed a protective cross-appeal from both the judgment and the order denyin g the motion for JNOV. For the reasons discussed below, the new trial order is revers ed, the judgment is rein stated and affirmed, and the order denying the moti on for JNOV is affirmed.

BACKGROUND

PCB produces digital soundtracks and a udio for motion pictures , television, video games, and other media. PCB’s credits include the Call of Duty series of video games, Transformers
, Lord of the Rings , the Spiderman series, the X-Men series, and the Guitar
Hero video game series. PCB’s two sound studios, St udio A and Studio B, are locat ed in a separate wing of PCB president Keith Arem’s hom e. Studio B, where the fi re occurred, was built with thick concrete walls, steel doors, fire retardant materials, insulated vents, sound traps, and3 special filters to remove dust from the room. Studio B also had a special air conditioning system that was designed to keep c ool air flowing onto the computers. The computers and other essential studio equipment were kept in a cabinet or
console near a wall. Arem noticed that the air behind the computers was not circulating and decided to purchase a fan that c ould be placed behind the cabinet. In June 2008, Arem went to a Fry’s st ore and told the salesperson that he was looking for a fan that could be used on a continuous basis to circulate the air behind the computer console in the sound studio. The salesperson told Arem that the table fan manufactured by MJC had a “thermostat or a way to shut itself off so it wouldn’t overheat.” The salesperson also told Arem th at the fan’s “safety mo tor” would turn the fan off “if it ever got too hot” or if th e blades became obstructed. Based on the salesperson’s representations regarding the fa n’s safety features, Arem purchased the fan made by MJC. Arem placed the fan on the floor behind th e computer console and plugged it into an electrical outlet on a separate circuit from the recording equipment. Arem, who is a self-described “neat freak,” testified that he regularly maintained the area behind the computer console. PCB used the fan on a nonstop basis for a bout three or four months until the fire occurred sometime during the weekend of Oct ober 25, 2008. No one was present when the fire broke out. Arem and his family we re away on vacation and the studio was closed for a four-day weekend. Pursuant to P CB’s standard practices, the PCB employee (Matthew Lemberger) who clos ed the studio on the Wednesday before the fire testified that he turned off all of the equipm ent in the room except the fan. The fire damaged all of the equipment in St udio B, including th e fan, large mixing consoles, analog audio compressors, keyboard samplers, synthesizers, sound processors, computers, hot swap drawers, and more than 15 backup devices. The fire also destroyed the only copies of PCB’s original compositions and sound samples. On July 15, 2010 , PCB sued MJC and Fry’s for breach of warranty and strict product liability, claiming the fan was defec tive because, contrary to the ordinary4 consumer’s expectations, the fan overheate d and caught on fire. PCB alleged that defendants had: (1) breached express and/or implied warranties that the fan was safe; and (2) provided a fan that was defective unde r the consumer expectation test because it failed to perform as safely as an ordinary consumer would have expected it to perform. PCB sought compensation for prop erty damage, lost profits, lost original compositions, and lost original sound samples.

I. Causation As to causation, the issue was whether th e fan caused the fire, or whether the fire started elsewhere and spread to the fan. It was undisputed that the area with the greatest fire damage—and therefore, the area where the fire most likely began—was the area behind the computer console where the fan was located. Douglas Bennett, an electrical enginee r, testified as PCB’s causation expert.
Bennett testified that based on his examina tion of the electrical equipment that was damaged in the fire, the only evidence of arcing (i.e., beading or globules of melted copper that surviv ed the fire) was on the service cord inside the fan’s motor housing.
This evidence led Bennett to conclude that the fan’s motor overheated and started a fire inside the fan’s motor housing. As the fi re melted the insulation on the fan’s service cord, the copper conductors came into contact and created arcing inside the motor housing. By the time the fire spread along th e service cord outside the motor housing, the circuit breaker had interrupted the flow of electricity, which precluded further arcing elsewhere along the cord. Bennett testified th at because the motor overheated and started a fire, the fan was “unsafe” and “defective.” Mack Quan, a mechanical e ngineer, testified as defenda nts’ causation expert. Quan testified that he could not tell by lookin g at the fan’s damaged service cord (which had been removed from the damaged motor ho using) whether arcing had occurred on the portion of the cord that was inside or outsid e the motor housing. According to Quan: “There was no way to discern wh ether that damage, this bead ing, occurred on the outside5 or the inside because the length of the cord that goes inside the fan varies to some degree[.]” Quan testified that because the fire could have been caused by something
unrelated to a defect in the fan—such as a da maged cord, dust or debris in the fan, or a
bad connection at the outlet—he could not id entify the cause of the fire. In Quan’s opinion, the discovery of beading on the fan’s service cord did not ru le out the possibility that arcing had occurred el sewhere in the room.

II

. Design Defect Before trial, PCB submitted a jury instruc tion on the consumer expectation test for establishing a design defect. CACI No. 1 203, as given to the jury, stated: “PCB Productions, Inc. claims the fan’s design was defective because the fan did not perform as safely as an ordinary consumer would have expected it to perform. To establish this claim, PCB Productions, Inc. must prove all of the following: [¶] 1. That Defendants manufactured and sold the fan; [¶] 2. That the fan did not perform as safely as an ordinary consumer would have expected it to perform when used or misused in an intended or reasonably foreseeable way; [¶] 3. That PCB Productions, Inc. was harmed; and [¶] 4. That the fan’s failure to perform safely was a substantial fa ctor in causing PCB Productions, Inc.’s harm.”
Consistent with PCB’s reliance on the cons umer expectation test, which generally does not permit expert testimony on the issu e of ordinary consumer expectations ( Soule v. General Motors Corp. (1994) 8 Cal.4t h 548, 563 ( Soule )), Bennett provide d no expert testimony on the fan’s design or safety fe atures and whether those features were adequate. Bennett testified that because he was not asked to analyze the fan’s design, he did not perform a design analysis and had no opinion regardin g the adequacy of the fan’s design.6 Because PCB was relying solely on the consum er expectation test, it elected not to request a risk-benefit instruction for esta blishing a design defect (CACI No. 1204). 1 Based on Bennett’s expert testimony that the fire was caused when the fan overheated and ignited, PCB’s theory was that the existence of a design defect could be reasonably inferred under the consumer expectation te st because, under th e circumstances, no ordinary consumer wo uld have expected the fan to ov erheat and catch on fire. During trial, defendants moved to ex clude CACI No. 1203, the consumer expectation test instruction. Defendants’ theory was that under the circumstances, the issue of design defect cannot fairly be reso lved by referring to the expectations of an ordinary consumer. PCB opposed the motion to exclude CACI No. 1203, which the court took under
submission.
Consistent with its view that the consumer expectation test was not applicable to this case, defendants presented Quan’s expert testimony regarding the merits of the fan’s design. Quan testified that the fan was prop erly designed according to industry standards

1 CACI No. 1204, “Stric t Liability—Design Defect—Risk-Benefit Test—Essential Factual Elements—Shifting Burden of Proof,” provides: “[ Name of plaintiff ] claims that the [ product ]’s design caused harm to [ name of plaintiff ]. To establish this claim, [ name of plaintiff ] must prove all of the following: “1. That [ name of defendant ] [manufactured/distributed/sold] the [ product ]; “2. That [ name of plaintiff ] was harmed; and “3. That the [ product ]’s design was a substantial fa ctor in causing harm to [ name of plaintiff ]. “If [ name of plaintiff ] has proved these three facts, then your decision on this claim must be for [ name of plaintiff ] unless [ name of defendant ] proves that the benefits of the [ product ]’s design outweigh the risks of th e design. In deciding whether the benefits outweigh the risks, yo u should consider the following: “(a) The gravity of the potential ha rm resulting from the use of the [ product ]; “(b) The likelihood that this harm would occur; “(c) The feasibility of an alternative safer design at the time of manufacture; “(d) The cost of an alternative design; [and] “(e) The disadvantages of an alternative design; [and] “[(f) [ Other relevant factor(s) ].]”7 because of its heat protection syst em known as impedance protection. 2 Quan explained that because industry standards require small motor fans of this type to have only one form of heat protection, no additional system (such as a thermal fuse or reset switch) was necessary in this case. Quan testified that during testing of a similar fan, he was able to
run the fan on a continuous basis fo r five months without mishap. After both parties rested, the trial cour t overruled defendants’ objection to the
CACI No. 1203 instruction on the consumer expectation test, which was the only design defect instruction given to the jury. Beca use the jury was not given the CACI No. 1204 instruction on the risk-benefit test, it was not asked to choose between the consumer expectation and risk-benefit tests.

III. Breach of Warranty In support of its breach of warranty claim, PCB relied on Arem’s testimony regarding the salesperson’s assurances that th e fan had a thermostat or safety motor that
would turn the fan off before it overheated or if its blades became obstructed. PCB also relied on the wording on the box in which the fan was sold. The word “safe” appeared numerous times on the box, which referred to the fan’s “[p]owerful yet safe” “smart safety motor.” In addition, PCB relied on the owner’s manual, which also touted the fan’s safety. Although the manua l warned that a fire could oc cur if the fan was not used in accordance with the manual, it did not warn against runni ng the fan on a continuous
basis.

2 Quan testified that impedance protection works by increasing th e resistance of the fan’s electrical wires as the temperature increa ses. The increased re sistance limits the amount of electrical current that runs throug h the wires, thus preventing the motor from overheating.8 The jury was given instructions on express warranty (CACI No. 1230) 3 and implied warranty of merchantability (CACI No. 1231). 4

IV. Damages PCB requested damages of more than $11 million, consisting of: (1) $562,584.67 for property damage (which was stipulated to by the parties); (2) $590,566 for lost

3 CACI No. 1230, “Express Warranty—Essen tial Factual Elements,” as given to the jury, provided: “PCB Productions, Inc. claims that it was harmed by the fan because defendants represented, either by words or actions, that the fan was safe but the fan was not as represented. To establish this claim, P CB Productions, Inc. must prove all of the following: “1. That defendants made a statement of fact received by PCB Productions, Inc. that the fan was safe; “2. That the fan did not perform as stated; “3. That PCB Productions, Inc. took reas onable steps to notif y defendants within a reasonable time that the fan was not as represented, whet her or not defendants received such notice; “4. That PCB Productions , Inc. was harmed; and “5. That the failure of the fan to be as represented was a substantial factor in causing PCB Productions , Inc.’s harm.”

4 CACI No. 1231, “Implied Warranty of Merchantability—Essential Factual Elements,” as given to the jury, provided: “PCB Productions, Inc. also claims that it was harmed by the fan that it bought from defendants because the fan did not have the quality that a buyer would expect. To establish this claim, PCB Productions, Inc. must prove all of the following: “1. That PCB Productions, Inc. bought the fan from defendants; “2. That, at the time of purchase, defend ants were in the business of selling these goods; “3. That the fan was not fit for the or dinary purposes for which such goods are used; “4. That PCB Productions, Inc. took reas onable steps to notif y defendants within a reasonable time that the fan di d not have the expected quality; “5. That PCB Productions , Inc. was harmed; and “6. That the failure of the fan to have the expected quality was a substantial factor in causing PCB Productions , Inc.’s harm.”9 profits; (3) $3,895,000 for the cost of recr eating the lost original compositions; and $6,299,000 for the cost of recreating the lost original sound samples.

A. Original Compositions According to Arem’s testimony, all of the multitracks of PCB’s original compositions were destroyed in the fire. The multitracks we re valuable to PCB because they were used to produce ne w works. It would take seve ral years for PCB to “recreate
that music and then re-release it.” According to PCB’s music industry expert, David Fisher, it is possible to determine the fair market value of regi stered compositions based on past royalty earnings. However, only a few of PCB’s lost original compositions were registered. Fisher explained that it would be difficult to determine the fair market value of PCB’s unregistered compositions, becaus e “you can’t price a song.”

B. Sound Samples According to Arem’s testimony, all of P CB’s original sound samples, which were created over a 25-year period, were also destr oyed in the fire. Arem testified that PCB’s lost sound samples were unlike the generic soun ds that can be purchased on the internet. Arem testified that he “frequently” traveled to various locations in order to record different sounds. For example, Arem went to Bali and “hired an entire temple full of performers to do the Kecak Mo nkey dance.” He directed, recorded, and developed those samples into the individual sound samples that he later used in film scores. He explained that although people would sa y, “Oh, there’s a Kecak Monkey Dance that we recorded on a sound library,” those sounds “would be diffe rent than ours, the way that I would record the sounds, the way that I would direct the sounds, the way I would process the sounds.” He testified that even if he could purch ase a commercial sound library, it would not
contain the same sounds and would not “sound at all the way that we would want our
sounds to sound.”10 C. Jury Instructions Based on the unique nature of PCB’s lost original compositions and sound samples, PCB requested that the jury be given Specia l Instruction No. 1 on the replacement cost measure of damages. Sp ecial Instruction No . 1, titled “Loss or Destruction of Personal Property Where Its Market Value is Uncertain,” stated: “Although the general rule is that the measur e of damage for the loss or destruction of personal property is the value of the property at the time of such loss or destruction,
where that value is uncertain , the plaintiff may establish the value of the personal property with evidence of repl acement cost of the personal pr operty, including the cost to produce the personal property, the amount of time expended in producing the personal property.”
Defendants submitted a fair market value instruc tion (CACI No. 3903K), titled “Loss or Destruction of Personal Property (Economic Damage),” which stated: “To recover damages for the destruction [of P CB Productions, Inc.’s Music Library,] PCB Productions, Inc. must prove th e fair market value of the Mu sic Library just before the harm occurred. [¶] ‘Fair ma rket value’ is the highest price that a willing buyer would have paid to a willing seller, assuming: [¶] 1. That there is no pressure on either one to buy or sell; and [¶] 2. That the buyer and seller are fully informed of the condition and quality of the Music Library.” During trial, defendants moved to exclude PCB’s Special Instruction No. 1. PCB opposed the motion, which the court took unde r submission. After the parties rested, the court overruled defendants’ objection. The court instructed the jury on both the fair market value (CACI No. 3903 K) and replacement cost (Special Instruction No. 1) measure of damages. Accordingly, the jury was allowed to decide which measure of damages—replacement cost or fair market va lue—was applicable to the lost original compositions and sound samples.11 V. Jury Verdict After less than a day of deliberations, the jury returned a special verdict in which it awarded more than $6.2 million in damages to PCB. 5 In its responses to the special verdict questions, which are set forth below, the jury voted nine to three on questions 1 through 4 and 6, and vote d twelve to zero on questions 5 and 8. The jury did not answer question 7, which was inapplicable in light of its other responses.

“1. Did MJC America, LTD. and/or Fry’s El ectronics, Inc. manufacture and distribute
a fan which was defective because it failed to perform as safe ly as an ordinary customer would have expected? “ X Yes _____ No
“. . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

“2. Was MJC America, LTD. and/or Fry’ s Electronics, Inc.’s manufacture and
distribution of a fan which was defective becau se it failed to perform as safely as an ordinary customer would have expected, a s ubstantial factor in causing harm to PCB[] Production[s], Inc? “ X Yes _____ No
“. . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

“3. Did MJC America, LTD. and/or Fry’s Electronics, Inc. breach a warranty to PCB Productions, Inc.? “ X Yes _____ No
“. . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5 On March 21, 2012, the matter was subm itted to the jury, wh ich deliberated from 3:12 p.m. to 4:20 p.m. that day. On March 22, 2012, the jury resume d its deliberations at 9:30 a.m. After a noon recess, the jury retu rned its verdict at 1:44 p.m. that day.12 “4. Was MJC America, LTD. and/or Fry’s Elect ronics, Inc.’s breach of a warranty to PCB Productions, Inc., a substantial factor in causing harm to PCB[ ] Production[s], Inc.? “ X Yes _____ No
“. . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

“5. What are PCB Productions, Inc.’s damage s? Do not reduce the damages based on the fault, if any, of PCB Productions, Inc. “Property Damage: $ 562,584.67 (This amount has already been agreed to by the parties) “Lost profit: $ 200,389.80 “Lost original compositions: $ 210,000 “Lost sound samples: $5,250,000 “TOTAL $6,222,974.47
“. . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

“6. Did PCB Productions, Inc. misuse the fan in a way that was so highly extraordinary that it was not reasonably fore seeable to MJC America, LTD. and/or Fry’s Electronics, Inc.?
“ Yes X No “If your answer to question 6 is yes, then an swer question 7. If you answered no, insert
the number zero next to PCB Productio n[s], Inc.’s name in question 8.

“. . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13 “8. What percentage of re sponsibility for PCB Productio n[s], Inc.’s harm do you assign to: “MJC America, LTD. or Fry’ s Electronics: ___________%

“PCB Productions, Inc.[:] 0 %

“TOTAL 100%”

VI. Defendants’ Motions for New Trial and JNOV Defendants filed posttrial motions for ne w trial and JNOV based on erroneous instructions and excessive damages.

A. Defendants Argued That the Consum er Expectation Test Instruction Was Inapplicable as a Matter of Law In their motion for new trial, defendants contended the consumer expectation test instruction was inapplicable as a matter of law because, given the inability of PCB’s expert to identify a defect in the fan that caused the fire, the ordinary consumer would lack sufficient knowledge to form any expectations regarding the minimum safety features of a fan. Defendants argued: “The issue before the court is straightforward: If plaintiff’s own electrical engineering expert cannot describe what defect in the fan caused the fire , how can a lay juror be expected to make such a determination? Because the ordinary consumer would not have sufficient knowledge to form expectations of a safe design for the fan to be used as plaintiff used it here, the court’s use of the consumer expectation test was an error in law.” Defendants argued that the erroneous instruction was prejudicial because, in light of the nine-to-three liability vote, the jury was likely to have reached a different result und er the risk-benefit test. In their motion for JNOV, defendants similarly argued that the consumer expectation test instruction was improper as a matter of law. They contended that under the risk-benefit test, PCB failed to meet its initial burden of showing that its injury was proximately caused by the design of the fan. They asserted that “[b]ecause plaintiff’s14 expert did not identify a design defect, and plai ntiff presented no othe r evidence to show how the fan’s design injured plaintiff, plain tiff failed to carry its burden and defendants are entitled to judgment.”

B. Defendants Argued That Special Instruction No. 1’s Replacement Cost Measure of Damages Was Err oneous as a Matter of Law In their motion for new trial, defendants contended that Special Instruction No. 1’s replacement cost measure of damages was err oneous as a matter of law. Defendants argued that because the lost original compositions and sound samples have an ascertainable market value, California law re quires the amount of dama ges to be based on fair market value. Defendants argued that the jury’s award for lost compositions and sound samples was excessive. Defendants pointe d out that PCB could have registered its original compositions and pres ented evidence of past earnings on royalties. Defendants asserted that PCB’s sound samples have a ma rket value because many of the sounds were purchased as a “box set” or as pre-installed samples. In their motion for JNOV, defendants simi larly contended that fair market value rather than replacement cost was the correct measure of damages for the loss of personal property. Defendants argued that JNOV should be granted as to the 683 lost original compositions and 42,060 lost sou nd samples because, in light of PCB’s failure to present any evidence of their fair market valu e, PCB was precluded from recovering any damages as to those items.

C. PCB Opposed the Motions for New Trial and JNOV
, Arguing the
Instruction on the Consumer Expectation Test Was Proper ; That Liability Was Properly Based on the Br each of Warranty Findings ; That Replacement Cost Damages Were Properly Awarded Under Special
Instruction No. 1 In opposition to the motions for new tr ial and JNOV, PCB argued the instruction on the consumer expectation test was prop er, there was no legal error, and there was15 sufficient evidence to support th e verdict. PCB contended th e consumer expectation test is applicable where a fan, during normal us age, overheats and catches on fire. Under such circumstances, an ordinary consumer is qualified to know that the fan failed to meet minimum safety standards. In addition, PCB argued the liability verdict was properly supported by the jury’s alternative breach of warranty finding, which defendants did not mention in their motions
for new trial and JNOV. Finally, PCB contended the jury properl y awarded replacement cost damages under Special Instruction No. 1. (Citing Kimes v. Grosser (2011) 195 Cal.App.4th 1556; Zvolanek v. Bodger Seeds
, Ltd. (1935) 5 Cal.App.2d 106; Willard v. Valley Gas & Fuel
Co. (1915) 171 Cal. 9 [disapprov ed on another ground in Showalter v. Western P. R. Co. (1940) 16 Cal.2d 460, 465-467].) PCB argue d that Fisher’s a nd Arem’s testimony supported the jury’s finding that there was no readily ascertainable market value for the lost original compositions and sound sample s, which PCB would have to reproduce in order to create original works for motion pict ures, video games, and other media. Under Special Instruction No. 1, the use of the replacement cost measure of damages was appropriate and the award, which was less than the amount requested, was not excessive.

VII. The Order Granting a New Trial The trial court granted the motion for ne w trial. We quote the order in full because its language is relevant to our dete rmination that the motio n was granted on the single ground that the evidence wa s insufficient to suppo rt the verdict. The order stated: “The motion for new trial is granted. “The law regarding new trial is found in CCP 657. That section reads in pertinent part, ‘A new trial shall not be granted upon the ground of insufficiency of the evidence to justify the verdict or other decision . . . unle ss after weighing the evidence the court is
convinced from the entir e record, including reasonable in ferences therefrom, that the court or jury clearly should have reach ed a different verdict or decision.’16 “In the instant case the jury clearly sh ould have reached a di fferent verdict or decision for three reasons. First, Plaintiff never showed a design or manufacturing defect in the table fan. Second, th e jury mistakenly a pplied the consumer expectation test for determining a design or manufacturing defect, in stead of the risk benefit test. Third, the amount of damages awarded was excessive. As a result, Defendants were prejudiced.

“a) Evidence of Product Design or Manufacturing Defect: “Plaintiff presented little or no evidence sh owing that the design or manufacture of the product was defective. He could not de scribe what defect in the fan caused the fire. Plaintiff’s expert said only that the motor [overheated] because it was defective, and it was defective because it overheated. Such circumlocution did not explain the product’s defect in design or manufacture.

“b) consumer expectation test vs. risk benefit test: “The consumer expectation test was the wron g test to apply under the facts of this case because an ordinary co nsumer would have no basi s for forming any safety assumptions about the design or manufactu re of the lightweight table fan when used for some 3,000 hours [nonstop] in a [commercial] setting to cool a space overheated by electronic equipment.

“1. Under the risk benefit test th at should have be en applied here,
Plaintiff had the burden to show that its injury was proximately caused by the fan’s design or manufacture. However, Plaintiff’s expert could not identify any defect in the fan.

“a. If plaintiff’s own electric al engineering expert could
not describe what defect in the fan [caused] the fire, how can a lay juror be expected to make such a
determination?17 “c) The excessive Damage Award: “The damages awarded for lost compositi ons and sound samples were excessive. The jury applied the wrong measure of dama ges, using replacement cost instead of
fair market value.

“1. Fair Market Value: “Plaintiff’s music business expert, David Fisher, testified that the proper measure of damages for musical works is fair market value. He said royalties are tracked by Broadcast Music, Inc. (‘BMI’), and the American [Society] of Comp osers, Authors and Publishers (‘ASCAP’) based on past earnings. However, Plaintiff presented no
evidence of these.

“2. Replacement cost: “The only figures the jury heard re garding value of the lost works was the cost to replace them, so they mistakenly believed that replacement cost[] was the proper measurement of the damages, which led to a clearly erroneous result.

“a. There was evidence of 683 compositions and 42,060 sound samples, and the jury awarded $5.46 million to replace these.

“d) The result was prejudicial because it was reasonably probable that a result
more favorable to Defendants would ha ve been reached in the absence of
the error.

“. . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18 “The Motion for Judgment [Notwithstanding ] The Verdict is moot by virtue of the above ruling.”

VIII. The Appeal and Cross-appeal Plaintiff timely appealed from the order gr anting a new trial. (Code Civ. Proc., § 904.1, subd. (a)(4).) Defendants timely cro ss-appealed from both the judgment and the order denying the motion for JNOV. (Cod e Civ. Proc., § 904.1, subd. (a)(1), (4).) 6

DISCUSSION

I. The Order Granting a New Trial Must Be Reversed Because It Fails to Comply With the Mandatory Statutory Requirements In the following sections, we (1) discu ss the mandatory statutory requirements for a new trial order; (2) determine that the tria l court granted a new trial on the sole ground
that the evidence was in sufficient to support th e verdict; and (3) conclude that the trial court’s stated reasons for finding that the ju ry should have reache d a different verdict were legally erroneous.

A. The Mandatory Statutory Requirements We begin by noting that “courts have no inherent power to grant a new trial: ‘[t]he right to a new trial is purely statutory.’ ( Fomco , Inc. v. Joe Maggio , Inc. [(1961)] 55 Cal.2d 162, 166.) Because the right to a new trial ‘fi nds both its source and its limitations in the statutes . . . , the proc edural steps prescrib ed by law . . . are mandatory

6 While the appeal was pending, we recei ved notice that MJC had filed a petition for bankruptcy in the United States Bankruptcy Co urt for the Central District of California pursuant to Chapter 11 of th e United States Bankruptcy Code on December 10, 2013 (case No.: 2:13-bk-39097-SK). On February 25, 2014, we issued an order staying all proceedings in this matter. Af ter we were informed of the bankruptcy court’s March 12, 2014 order approving a stipulation for relie f from the automatic stay (11 U.S.C. § 362), we vacated the order staying all procee dings and scheduled oral argument.19 and must be strictly followed .’ ( Mercer v. Perez (1968) 68 Cal.2d 104, 118, citation omitted, italics added; see Pacific Trends Lamp & Lighting Products
, Inc. v. J. White Inc

. (1998) 65 Cal.App.4th 1131, 1135.)” ( In re Marriage of Herr (2009) 174 Cal.App.4th 1463, 1471.) Code of Civil Procedure section 657 (secti on 657) allows the court to grant a new trial on all or part of the issues “for any of the following causes, materially affecting the substantial rights of such party: [¶] . . . [¶ ] 5. Excessive or inadequate damages. [¶] 6. Insufficiency of the evidence to justify the verdict or other decision, or the verdict or other decision is against law. [¶] 7. Error in law, occurring at the trial and excepted to by the party making the application.” When the court grants a new trial, secti on 657 requires that the court specify not only the ground(s) upon which the motion is gran ted, but also the reason(s) for granting a new trial upon each ground stated. Section 657 prohibits the court from granting a new trial on the ground of insufficien t evidence or excessive dama ges, “unless after weighing
the evidence the court is convinced from the entire record, including reasonable inferences therefrom, that the court or jury clearly should ha ve reached a different verdict or decision.” (§ 657

. ) Generally, an appellate court must affirm the new trial order “if it should have been granted upon any ground stated in the mo tion, whether or not specified in the order or specification of reasons.” (§ 657

. ) However, an appellate court may not affirm a new trial order on the ground of insufficient evid ence or excessive or inadequate damages, unless such ground is stated in the order granting the motion. ( Ibid. ) Where a new trial is granted on the ground of insu fficient evidence or excessive or inadequate damage, “it shall be conclusively presumed” on appeal “tha t said order as to such ground was made only for the reasons specified in said order or said specification of reasons, and such
order shall be reversed as to such ground only if there is no su bstantial basis in the record for any of such reasons.” ( Ibid. )20 A new trial order is reversible if the tr ial court based the order “‘exclusively upon an erroneous concept of legal principl es applicable to the cause.’” ( Rickley v. County of Los Angeles (2004) 114 Cal.App.4th 1002, 1008-1009.)

B. The Trial Court Granted a New Trial on the Sole Ground That the Evidence Was Insufficient to Support the Verdict We conclude the court granted a new tria l on the sole ground that the evidence was insufficient to support the verdict. We base our conclusion on the opening paragraphs of the order. The first paragraph of the order quotes the following language from section 657 regarding insufficiency of th e evidence: “A new trial sh all not be granted upon the ground of insufficiency of the evidence to justify the verdict or other decision . . . unless after weighing the evidence the court is c onvinced from the entir e record, including reasonable inferences therefrom, that the court or jury cl early should have reached a
different verdict or decision.” The second paragraph of the order lists th ree reasons why the ju ry clearly should
have reached a different verdict: “In the inst ant case the jury clearl y should have reached
a different verdict or decision for three reasons . First, Plaintiff never showed a design or manufacturing defect in the table fan. Second , the jury mist akenly applied the consumer expectation test for determining a design or manufacturing defect, instead of the risk benefit test. Third, the amount of dama ges awarded was excessive. As a result, Defendants were prejudiced.” The new tria l order then discusses each of the three reasons in paragraphs “a,” “b,” and “c.” Based on the opening paragraphs and the language of the order as a whole, we conclude the new trial was granted on a singl e ground: insufficiency of the evidence to support the verdict. We construe the remai nder of the order as a statement of reasons why the jury clearly should have reached a different verdict. Those reasons do not constitute additional grounds fo r granting a new trial.21 Admittedly, the order is somewhat ambigu ous in at least two respects. In the following sections, we explain why, notwith standing the ambiguous language of the order, the court did not grant a new trial on the grounds of excessive damages or
instructional error.

1. The Court Did Not Grant a New Trial on the Ground of Excessive Damages In listing the reasons why th e jury should have reached a different verdict, the order stated that the amount of damages wa s excessive. Because excessive damages is a ground for granting a new trial (§ 657, subd. (5 )), the parties contend that a new trial was granted on the additional ground of excessive damages. We disagree with this contention in light of paragraph “c” of the order. In paragraph “c” of the order, the court tied its statement regarding excessive damages to the jury’s use of the wrong meas ure of damages, stating: “The damages awarded for lost compositions and sound samp les were excessive. The jury applied the wrong measure of damages, us ing replacement cost instead of fair market value.” The
court then made two additional statements : (1) although PCB c ould have provided
evidence of fair market valu e based on royalty earnings, PCB failed to produce such evidence; and (2) the on ly evidence that PCB provided as to the va lue of the lost works was the “cost to replace them , so [the jury] mi stakenly believed that replacement costs was the proper measurement of the damages, which led to a clearly erroneous result.” By awarding damages of $210,000 and $5 .25 million for the lost compositions and sound samples, the jury implic itly adopted PCB’s view, as set forth in Special Instruction No. 1, that the market valu e of the lost compositions a nd sound samples was uncertain and, therefore, a replacement cost measure of damages was appropri ate. In granting a new trial on damages, the court did not find the jury’s award exceeded the replacement cost of the lost compositions and sound sample s. Instead, the cour t found the award was excessive because the jury applied the wrong measure of damages. We therefore
conclude the court was not granting a new trial on the ground of excessive damages, but22 was explaining why the jury should have reached a different verdict by applying a different measure of damages.

2. The Court Did Not Grant a New Tr ial on the Ground of Instructional
Error In listing the reasons why th e jury should have reached a different verdict, the order stated that the jury applied the wrong te st for design defect. Because the jury was following the consumer expectation test inst ruction that was given by the trial court,
defendants contend that the motion for new tr ial was granted on th e additional ground of instructional error. Defendants argue that the trial court properly granted a new trial
because of instructional error in applying the consumer expect ation test to the question of designing a fan that is to be used in a professional sound studi o to cool electronic equipment. However, we find no mention of instructional error in the new trial order. The
order does not state that the court erred in instructing the jury . On the contrary, the order
states that the jury erred in applying the wrong design de fect test. We therefore conclude that the court did not grant a new trial on the ground of instructional error. Moreover, even assuming the trial court fo und it had erred in giving the consumer expectation test instruction, we would disagr ee. In our view, the consumer expectation test instruction was proper under the settled facts of this case. As the Supreme Court explained in Soule : “In some cases . . . , ‘ordinary knowledge . . . as to . . . [the product’s] characteristics’ (Rest.2d Torts . . . , § 402A, com. i., p. 352) may permit an inference that the pr oduct did not perform as safely as it should. If

the facts permit such a conclusion, and if the failure resulted from the product’s design, a finding of defect is warranted without any further proof. The manufacturer may not defend a claim that a product’s design faile d to perform as safely as its ordinary consumers would expect by pres enting expert evidence of th e design’s relative risks and benefits.” ( Soule
, supra , 8 Cal.4th at p. 566, fn. omitted.) The court further stated: “For example, the ordinary consumers of modern automobiles may and do expect that such23 vehicles will be designed so as not to e xplode while idling at st oplights, experience sudden steering or brake failure as they leave the dealership, or roll over and catch fire in two-mile-per-hour collisions. If the plainti ff in a product liability action proved that a vehicle’s design produced such a result, the jury could find fo rthwith that the car failed to perform as safely as its ordi nary consumers would expect, a nd was therefore defective.” ( Id. at p. 566, fn. 3.) In this case, PCB’s evidence of causati on, which was accepted by the jury and is not at issue on appeal, showed that the fan ha d overheated and caught on fire while being used in a reasonably foreseeabl e manner. We conclude that under these settled facts, the ordinary consumer could form a reasonable minimum safety expectation that the fan would not overheat and catch on fire. (See Soule
, supra , 8 Cal.4th at p. 566.) The consumer expectation test instruction was therefore appropriate under the established
facts of this case.

C. The Trial Court’s Stated Reason s for Finding the Jury Should Have Reached a Different Verdic t Were Legally Erroneous Our review of the order granting a new trial is limited to the ground of insufficiency of the evid ence that is specified in the order. Section 657 mandates that in an appeal from an order granting a new trial on the ground of insu fficient evidence, “it shall be conclusively presumed that said or der as to such ground was made only for the reasons specified in said order or said speci fication of reasons, and such order shall be reversed as to such gr ound only if there is no substantia l basis in the record for any of such reasons.” (§ 657

. )
We conclude the trial court’s stated re asons for granting a new trial based on
insufficient evidence were legally erroneous.24 1. PCB Was Not Required to Show a Design or Manufacturing Defect
Under a Risk-Benefit Theo ry on Which the Jury Was Not Instructed As its first reason for granting a new tria l based on insufficient evidence, the trial court stated that PCB’s expert witne ss Bennett did not identify the design or manufacturing defect that caused the fire. Be nnett, the trial court noted, “said only that the motor [overheated ] because it was defective, a nd it was defective because it overheated. The circumlocution did not expl ain the product’s defect in design or
manufacture.” As PCB correctly contends, the trial cour t’s remarks are relevant to the riskbenefit theory of design def ect on which the jury was not instructed. Under the consumer expectation test instruction that was given, if the jury found that the fan overheated and caught on fire, it could find that the fan di d not perform as safe ly as the ordinary consumer would expect, and wa s therefore defective. (See Soule
, supra , 8 Cal.4th at p. 566.) Accordingly, the trial court’s remarks concerning Bennett’s expert testimony do not reflect on the sufficiency of the evidence to support a verdict under the consumer expectation test instruc tion that was given. On appeal, it is our obligation to review “t he sufficiency of th e evidence to support
a verdict under the law stated in the instructi ons given, rather than under some other law on which the jury was not instructed. ( Null v. City of Los Angeles (1988) 206 Cal.App.3d 1528, 1535.) . . . The jury’s re sponsibility is to decide factua l issues and return a verdict
in accordance with the law as in structed by the court. ( Null
, supra , at p. 1534; Richmond
v. Dart Industries
, Inc . (1987) 196 Cal.App.3d 869, 877.)” ( Bullock v. Philip Morris
USA , Inc. (2008) 159 Cal.App.4th 655, 674-675.) We thus find the trial court’s first reason—that PCB failed to prove the existen ce of a design or manu facturing defect under the risk-benefit test—to be legally erroneous because the jury was not instructed on the
risk-benefit test.25 2. The Jury Did Not Err in Failin g to Apply a Risk-Benefit Test As its second reason for granting a new tr ial based on insuffi cient evidence, the trial court stated that the jury had applied the “wrong test.” It faulted the jury for applying the consumer expectation test be cause “an ordinary co nsumer would have no basis for forming any safety assumptions about the design or manufacture of the lightweight table fan when used for some 3,00 0 hours [nonstop] in a [commercial] setting to cool a space overheated by electronic equipm ent.” It stated that “[u]nder the risk
benefit test that should have been applied here, Plaintiff had the burden to show that its injury was proximately caused by the fan’s design or manufacture. However, Plaintiff’s expert could not identify any defect in the fa n.” It pointed out that “[i]f plaintiff’s own electrical engineering expert co uld not describe what defect in the fan [caused] the fire, how can a lay juror be expected to make such a determination?” As previously discussed, however, the jury did not err in applying the consumer expectation test, which was the sole design defe ct instruction given to the jury. Under the consumer expectation test, the question “whe ther a product’s design and performance met the informed expectations of the ordinary consumer is a que stion distinct from, even if derivative of, the factual issues of what that design was and how it functioned.” ( Bresnahan v. Chrysler Corp . (1995) 32 Cal.App.4th 1559, 1568-1569.) PCB’s decision to present no expert testimony regarding a design defect in the fan was intentional because PCB was not relying on the risk-benefit test. “Ris k-benefit wei ghing is not a formal part of, nor may it serv e as a ‘defense’ to, the consumer expectations test. ( Soule
, supra , 8 Cal.4th at p. 566.)” ( Id. at p. 1569.) Because PCB’s expert was not asked to analyze the design of the fan, the inference drawn by the trial court—that PCB’s expert could not identify a defect—was erroneous.

3. The Jury Did Not Err in Applying Special Instruction No. 1, Which
Permitted an Award Base d on Replacement Cost As its third reason for granting a new tria l based on insufficient evidence, the trial court stated that “[t]he jury applied the wrong measure of damages, using replacement26 cost instead of fair market value.” The trial c ourt also stated that PCB’s failure to register its original compositions, pres ent evidence of past roya lty income, or provide any
evidence of fair market valu e had caused the jury to “mistakenly believe[] that replacement cost[] was the prop er measurement of the damage s, which led to a clearly
erroneous result.” We do not agree that the ju ry applied the wrong measure of damages. According to Special Instruction No. 1, the jury was allowed to decide whether the market value of the lost original compositions and sound sa mples was uncertain. We conclude that PCB’s failure to provide evid ence of market value did not preclude its recovery of replacement costs. PCB provided substantial evid ence that the lost origin al compositions and sound samples were of special value to the owner. As to the so und samples, Arem explained that because the sounds were uniquely direct ed, recorded, and devel oped over the course of 25 years and at diverse locations arou nd the world, he could not replace them by simply purchasing a commercial so und library. He stated that even if he could purchase such a library, it would not meet his standard s and would have to be altered to suit his
commercial needs. As to th e original compositions, Fisher explained that it would be
difficult to measure the fair market valu e of the unregistered compositions (which comprised the vast majority of the compositions) because “y ou can’t price a song.”
Arem testified that without the multitracks of the original compositions, PCB could not use the compositions to produce new works. Based on Fisher’s and Arem’s testimony, a jury could reasonably find that the lost compositions and sound samples had a pecu liar value to PCB that was legally compensable even if th e lost compositions and sound samples had no market value. (See Civ. Code, § 3333 [“For the breach of an obligation not arising from contract, the measure of damages, except where otherwise expressly provided by this code, is the amount which will compensate for all the detr iment proximately caused thereby, whether it could have been anticipated or not”]; Ev id. Code, § 823 [“the value of property for27 which there is no relevant, comparable mark et may be determined by any method of valuation that is ju st and equitable”].)
Kimes v. Grosser , supra , 195 Cal.App.4th 1556, is instru ctive. That case involved an injured cat, which the owner (Kimes) conceded had no mark et value. Kimes sued his neighbor (Grosser) to recover veterinary and ot her expenses that were incurred to care for the cat after it was allegedly shot by Gro sser. When Grosser su ccessfully moved to exclude evidence of expenses in excess of th e cat’s market value, which was negligible, Kimes effectively conceded the cat had no market value that would justify the expenses of a trial. In Kimes’s appeal from the judg ment of dismissal entered on his failure to prosecute, the appellate court reversed. The appellate court held that because Kimes was “not plucking a number out of the air for the sentimental value of damaged property,” but was seeking “to present evidence of costs in curred for [the cat’s] care and treatment by virtue of the shooting,” the evidence of Ki mes’s veterinary and other expenses was admissible as proof of compensable damages. ( Id. at p. 1561.) In support of its decision,
the court cited Civil Code section 3333 and Evidence Code section 823. ( Id. at pp. 1561- 1562.) In this case, the replacement cost measur e of damages provided a just and rational way of compensating PCB for the loss of its original compositions and sound samples.
As the court in Kimes stated, “where the property has no market value, the general rule limiting recovery to the loss of that value cannot apply, because it would invariably preclude any recovery. In such cases, the prope rty’s value ‘“must be ascertained in some other rational way, and from such elements as are attainable.”’ [Citation.]” ( Kimes , supra , 195 Cal.App.4th at p. 1561.) We therefore find the trial court’s third reason—that the jury erroneously applied the replacement cost measure of damages—to be legally

erroneous.28 D. The New Trial Motion Fa iled to Challenge the Brea ch of Warranty Verdict PCB contends that because the jury’s br each of warranty verdict was unchallenged by the motion for new trial, the trial court erre d in granting a new trial on that issue. We
conclude that PCB is correct.
The order is not sustainable as an or der granting a new trial on the breach of warranty claim, because the order does not incl ude a specification of reasons for granting
a new trial as to that issue. “An order granting a new trial in which the trial court sets out adequate reason[s] for finding the verdict wrong on only one issue of several submitted to the jury, is erroneous. To grant a new trial in such a s ituation, the trial court must adequately specify reasons w hy the evidence is insufficien t on all issues presumably found by the jury to su pport the verdict.” ( Previte v. Lincolnwood
, Inc . (1975) 48 Cal.App.3d 976, 987.)

II. The Cross-appeal Lacks Merit When an order granting a new trial is reversed, the judgment will be reinstated automatically. ( Stevens v. Parke
, Davis & Co. (1973) 9 Cal.3d 51, 63.) We therefore address defendants’ cross-appeal from the judgment and the order denying the motion for
JNOV. In their cross-appeal from the judgment , defendants contend that if this court “reverses the trial court’s order granting a new trial, the original judgment should nonetheless be reversed and a new trial grante d by this court, for the reasons set forth in the respondents’ brief.” However, it is unc lear what defendants are arguing. If their contention is merely that the motion for new trial was properl y granted, we have already considered and rejected that contention above . If they are claiming that it was erroneous to instruct the ju ry on the consumer expectation test, they have failed to discuss why the error was prejudicial in light of the jury’s br each of warranty verdict, which requires no finding of a design defect. To the extent they are arguing the damages award was excessive, we have addressed that contention above.29 In their cross-appeal from the orde r denying the motion for JNOV, defendants contend they are entitled to partial JNOV on P CB’s design defect claim. We conclude
the contention lacks merit because there is no ex planation as to why the denial of a partial JNOV was prejudicial in light of the jury’s breach of warranty verdict, which requires no finding of a design defect.

DISPOSITION

The order granting a new trial is revers ed. The order denying defendants’ motion for judgment notwithstanding the verdict is affirmed. Th e judgment is reinstated and
affirmed. PCB is entitled to recover its costs on appeal.

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

EDMON, J. *

We concur:

WILLHITE, Acting P. J.

MANELLA, J.

* Judge of the Los Angeles Superior Court, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.