Filed 10/9/13 S.O.Tech/Special Ops. Technologies v. Berge CA2/7 

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS 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 This opinion has not been certified for publication 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 SEVEN 

S.O. TECH/SPECIAL OPERATIONS 

TECHNOLOGIES, INC., 

 Plaintiff and Appellant, 

 v. 

MICHAEL BERGE et al., 

 Defendants and Respondents. 

 B243795 

 (Los Angeles County 

 Super. Ct. No. BC437331) 

APPEAL from an order of the Superior Court of Los Angeles County, Kenneth R. 

Freeman, Judge. Reversed. 

Lurie, Zepeda, Schmalz & Hogan, Troy L. Martin and M. Damien Holcomb for 

Plaintiff and Appellant. 

Law Office of Matthew K. Davis and Matthew K. Davis for Defendants and 

Respondents. 

__________________________ 
2

In this action under the California Uniform Trade Secrets Act, appellant S.O. 

Tech/Special Operations Technologies, Inc. challenges the denial of its attorney’s fees. 

Because we conclude that the trial court erred in concluding that the jury’s failure to find 

a basis for awarding punitive damages precluded an award of attorney’s fees under the 

California Uniform Trade Secrets Act, we reverse and remand for further proceedings. 

FACTURAL AND PROCEDURAL BACKGROUND 

S.O. Tech/Special Operations Technologies, Inc. (S.O. Tech.) sued Michael 

Berge, doing business as Berge Innovations, Berge Innovations, Inc., Action Bag and 

Cover, Inc., and Does 1-25 on May 7, 2010, alleging misappropriation of trade secrets, 

unfair competition, interference with prospective economic advantage, and breach of 

contract; the complaint also request an accounting. Berge and Berge Innovations, Inc., 

respondents here, answered the complaint on June 7, 2010. The matter was tried to the 

jury and, on October 6, 2011, the jury returned its verdict, finding a misappropriation of 

trade secrets, and awarding S.O. Tech damages in the sum of $29,036. The jury also 

found that S.O. Tech had failed to prove, by clear and convincing evidence, that the 

respondents acted willfully and maliciously in the misappropriation. Finally, the jury 

found that Berge had breached his contract, and awarded S.O. Tech damages of $29,820 

for that breach. 

 Following the verdict, the trial court took further evidence and heard arguments of 

counsel on S.O. Tech’s demand for a permanent injunction. On January 17, 2012, the 

court found good cause to impose that injunction. The trial court entered judgment in the 

matter on April 27, 2012, severing the cause of action for interference with prospective 

economic advantage for a separate trial, and reserving jurisdiction over the claim for 

attorney’s fees and costs. 

S.O. Tech moved for attorney’s fees under the California Uniform Trade Secrets 

Act (Civ. Code, § 3426.4) on May 29, 2012. The motion asserted a right to fees based on 

the jury’s finding of misappropriation, and evidence demonstrating that misappropriation 

had been willful and malicious. Respondents opposed the motion, asserting that the 
3

jury’s verdict on punitive damages precluded such an award, and that the fees had not 

been properly calculated. After S.O. Tech replied, the court denied the motion. S.O. 

Tech timely appealed. 

DISCUSSION 

 The sole issue presented by this appeal is the trial court’s denial of an award of 

attorney’s fees. The court determined that, although the question of attorney’s fees was 

not before the jury, the jury’s determination on punitive damages bound the court, and 

that it had no discretion to award attorney’s fees. Because we conclude that the jury’s 

finding on the different issue did not bind the court, we will remand for the court to 

reconsider the motion. 

Standard of Review

“‘On review of an award of attorney fees after trial, the normal standard of review 

is abuse of discretion. However, de novo review of such a trial court order is warranted 

where the determination of whether the criteria for an award of attorney fees and costs in 

this context have been satisfied amounts to statutory construction and a question of law.’” 

(Connerly v. State Personnel Bd. (2006) 37 Cal.4th 1169, 1175, quoting Carver v. 

Chevron U.S.A., Inc. (2002) 97 Cal.App.4th 132, 142.) Thus, we exercise independent 

review on the narrow question of whether S.O. Tech is entitled to seek fees under Civil 

Code section 3426.4. 

California Uniform Trade Secrets Act 

S.O. Tech’s claims for misappropriation were brought under the California 

Uniform Trade Secrets Act (CUTSA), Civil Code sections 3426 to 3426.11.1 Section 

3426.4, at issue here, provides: “If a claim of misappropriation is made in bad faith, a 

motion to terminate an injunction is made or resisted in bad faith, or willful and malicious 

 

1 All further references, unless otherwise noted, are to the Civil Code.
4

misappropriation exists, the court may award reasonable attorney’s fees to the prevailing 

party.” To justify a fee award under this statute, the trial court must find that the party to 

whom fees are awarded is the prevailing party and that a willful and malicious 

misappropriation occurred. (Vacco Industries, Inc. v. Van Den Berg (1992) 5 

Cal.App.4th 34, 54-55, fn. 23 (Vacco).) 

CUTSA, adopted from the Uniform Trade Secrets Act, does not define the burden 

of proof to be applied on a motion for attorneys’ fees under section 3426.4. As a result, 

we look to the Evidence Code, which mandates the application of a preponderance of the 

evidence standard: “Except as otherwise provided by law, the burden of proof requires 

proof by a preponderance of the evidence.” (Evid. Code, § 115; Conservatorship of 

Wendland (2001) 26 Cal.4th 519, 546. [“The default standard of proof in civil cases is 

the preponderance of the evidence”].) 

While there was a jury finding in this case, that finding, without objection by the 

parties, required only that the jury determine whether there was clear and convincing 

evidence sufficient to award punitive damages. Early in the proceedings, respondents 

sought a ruling from the court applying that standard of proof to the question of punitive 

damages. In that request, respondents neither suggested, nor asked the court to rule, that 

the same burden of proof should be applied to the court’s exercise of its discretion in 

determining whether to award attorney’s fees. 

In the discussion of the jury instructions themselves, the record does not 

demonstrate that any party asserted that the jury’s finding on punitive damages would be 

binding on the issue of attorney’s fees. The record does indicate that the parties and the 

court conducted an off the record discussion of jury instructions. After that discussion, 

the court issued a minute order memorializing its rulings. Two portions of that order are 

relevant. First, the court ruled that the verdict form for punitive damages would be 

phrased in terms of the clear and convincing evidence standard. Second, the court 

determined that in giving CACI No. 1441, the punitive damages instruction, the same 

clear and convincing language would be included. 
5

Respondents have identified no legal basis to argue that the jury’s finding would 

be binding on the determination on attorney’s fees, a determination to be made by the 

court. Respondents have also cited no case in which the clear and convincing standard 

was applied to the award of attorney’s fees under CUTSA.2 

The trial court, in denying the request for attorney’s fees, relied on Vacco. In that 

case, the jury awarded punitive damages for misappropriation. In considering the 

propriety of the award of attorney’s fees, and in response to the defendants’ arguments 

that there was no statutory basis for the award, the Court of Appeal stated: “In order to 

justify fees under Civil Code section 3426.4, the court must find that a ‘willful and 

malicious misappropriation’ occurred. That requirement is satisfied, in our view, by the 

jury’s determination, upon clear and convincing evidence, that defendants’ acts of 

misappropriation were done with malice. This finding was necessary to the award of 

punitive damages which was made by the jury. However, it is also sufficient to justify 

the statutory portion of the fee award.” (Vacco, supra, 5 Cal.App.4th at p. 54, fn. 

omitted; see also Khavarian Enterprises, Inc. v. Commline, Inc. (2013) 216 Cal.App.4th 

310, 326-327 [trial court properly decides attorney’s fee issue].) 

Defendants in Vacco also argued that the issue of attorney’s fees was a jury issue. 

The court rejected that argument, explaining that Code of Civil Procedure section 1033.5 

places that issue in the hands of the court, not the jury. (Vacco, supra, 5 Cal.App.4th at 

p. 55.) 

What was not before the court in Vacco, however, is the issue for which 

respondents and the trial court cited that case: whether the trial court is bound in its 

determination of attorney’s fees by the jury’s finding on punitive damages. The trial 

court here concluded that: “The implication under Vacco is that if the jury finds that the 

plaintiff does not demonstrate willful and malicious appropriation, fees are not justified 

under CUTSA.” The court further concluded that it was bound by the jury’s 

 

2 Respondents, in briefing the issue before this Court, still provide no authority for 

their position other than Vacco, relied on by the trial court.
6

determination, relying on Hoopes v. Dolan (2008) 168 Cal.App.4th 146.3 The court 

erred. 

The Vacco court did not have before it the issue of what the standard of proof was 

because, in the face of a determination that there was clear and convincing evidence of 

malice, it was clear that there was a showing of the necessary facts by a preponderance of 

the evidence. While the court determined that the jury’s finding was sufficient for the 

court to award attorney’s fees under the statute, nothing in the facts before the court or 

the language of the statute indicates it was necessary. To the contrary, Evidence Code 

section 115 demonstrates it was not. 

Here, the standards of proof were different, the jury’s findings concerning malice 

and oppression for purposes of punitive damages were not binding on the trial court’s 

determination of S.O. Tech’s motion for attorney fees.4

 

3 In Hoopes, while the court did hold that the trial court could not disregard the 

jury’s verdict in deciding issues based on the same evidence and same operative facts, it 

also held, as relevant here, that when the issues to be decided are both within the province 

of the court, and concern factual and legal issues undecided by the jury, the court has a 

duty to make the determination. (Hoopes v. Dolan, supra, 168 Cal.App.4th at pp. 150, 

162-163.) Here, the jury did not decide whether the plaintiff had demonstrated willful 

and malicious misappropriation by a preponderance of the evidence, but only that there 

was not clear and convincing evidence of such misappropriation. 

4 Because we remand for the trial court to consider whether there is a basis for the 

requested attorney’s fees, we need not reach the other issues raised by respondents. 
7

DISPOSITION 

The order is reversed and the matter is remanded for the trial court to determine 

whether the record demonstrates a basis for the award of attorney’s fees, and, if so, the 

amount properly awarded. Appellant is to recover its costs on appeal. 

 ZELON, J. 

We concur: 

 WOODS, Acting P. J. 

 SEGAL, J.

 

 Judge of the Los Angeles Superior Court, assigned by the Chief Justice pursuant to 

article VI, section 6 of the California Constitution.