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, 

Respondent, 

v. 

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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. 

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) 

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) 

) 

) 

) 

) 

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No. 32616-1-111 

UNPUBLISHED OPINION 

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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Lakoda, Inc. v. OMH Proscreen USA, Inc. 

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, Inc. v. OMH Proscreen USA, Inc. 

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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Lakoda, Inc. v. OMH Proscreen USA, Inc. 

(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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No. 32616-1-III 

Lakoda, Inc. v. OMH Proscreen USA, Inc. 

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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Lakoda, Inc. v. OMH Proscreen USA, Inc. 

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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No. 32616-1-III 

Lakoda, Inc. v. OMH Proscreen USA, Inc. 

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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Lakoda, Inc. v. OMH Proscreen USA, Inc. 

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: 

Id. 

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. 

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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No. 32616-1-III 

Lakoda, Inc. v. OMH Proscreen USA, Inc. 

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 if you, 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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No. 32616-1-III 

Lakoda, Inc. v. OMH Proscreen USA, Inc. 

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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Lakoda, Inc. v. OMH Proscreen USA, Inc. 

Id. 

( 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. 

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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Lakoda, Inc. v. OMH Proscreen USA, Inc. 

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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Lakoda, Inc. v. OMH Proscreen USA, Inc. 

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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Lakoda, Inc. v. OMH Proscreen USA, Inc. 

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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Lakoda, Inc. v. OMH Proscreen USA, Inc. 

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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Lakoda, Inc. v. OMH Proscreen USA, Inc. 

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 

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No. 32616-1-III 

Lakoda, Inc. v. OMH Proscreen USA, Inc. 

contract, the subsequent acts and conduct of the parties to the contract, and 

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 ]C6

l 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 

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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 

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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 

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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. 

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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 

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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. 

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No. 32616-1-III 

Lakoda, Inc. v. OMH Proscreen USA, Inc. 

Id. 

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. 

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 

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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 

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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