Filed 6/5/13 DeposiTech v. Bekins A-1 Movers CA4/1 

NOT TO BE PUBLISHED IN OFFICIAL REPORTS 

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COURT OF APPEAL, FOURTH APPELLATE DISTRICT 

DIVISION ONE 

STATE OF CALIFORNIA 

DEPOSITECH, INC., 

 Plaintiff and Appellant, 

 v. 

BEKINS A-1 MOVERS, INC., et al., 

 Defendants and Appellants. 

 D061729 

 (Super. Ct. No. 

 37-2010-00099414-CU-BC-CTL) 

 APPEALS from a judgment and order of the Superior Court of San Diego County, 

Frederic L. Link, Judge. Affirmed. 

 Horvitz & Levy, Peter Abrahams, Steven S. Fleischman; Higgs, Fletcher & Mack, 

Peter S. Doody and Loren G. Freestone for Defendants and Appellants. 

 Murtaugh Meyer Nelson & Treglia, Robert T. Lemen, Lawrence J. DiPinto and 

Larissa L. Abruscato for Plaintiff and Appellant. 

 Defendant Bekins A-1 Movers, Inc. (Bekins) appeals a judgment in the action 

filed against it by plaintiff DeposiTech, Inc. (DeposiTech) for breach of contract, 

negligence, and fraud arising out of damage to DeposiTech's property that occurred while 
2 

Bekins moved it from one to another storage facility. On appeal, Bekins contends: (1) 

the trial court erred by allowing DeposiTech to present evidence, and instructing the jury, 

on loss of a business opportunity as compensatory damages for Bekins's fraud; (2) the 

evidence is insufficient to support the jury's award of $550,000 in damages for 

DeposiTech's lost business opportunity; and (3) because the jury's compensatory damages 

award must be reduced, its punitive damages award must likewise be reduced or at least 

retried. 

 DeposiTech cross-appeals, challenging the trial court's order denying its motion 

for an award of attorney fees. It contends that, as the prevailing party, it is entitled to 

Civil Code1 section 1717 attorney fees pursuant to an attorney fees provision in its 

storage contract with Bekins. 

FACTUAL AND PROCEDURAL BACKGROUND 

 DeposiTech develops and markets plasma-based equipment and technologies. In 

1997, it constructed a prototype (Prototype) of a machine called the "PlasmaPlate" that 

uses plasma ions to deposit ultra-fine and precise copper conductor lines on printed 

circuit boards. However, because it was unable to obtain sufficient financing at that time, 

DeposiTech could not proceed to the second stage of development, involving refinement 

of the Prototype to produce actual printed circuit board samples for customers and the 

development of a production model of the PlasmaPlate. 

 

1 All statutory references are to the Civil Code except as otherwise specified. 
3 

 In 1999 DeposiTech contracted with Cole Moving & Storage Co. (Cole) to store 

the Prototype in its San Diego warehouse on Sorrento Valley Road until DeposiTech 

could attract new investors. The Prototype weighed about 6,000 pounds, was about seven 

feet high and eight feet long, and consisted of three chambers. Dr. Daryl Doane, 

DeposiTech's president, explained to Cole's supervisor that the Prototype was top-heavy 

and fragile, and had to be moved with great care. Cole assured her that the Prototype 

would be safely stored in its warehouse until it was ready to be removed. On October 5, 

1999, she signed a document titled "Non-negotiable Warehouse Receipt and Contract" 

(Contract) that listed the items of DeposiTech's property, including the Prototype, that 

Cole transported to its warehouse. 

 In April 2004, Cole sold its storage contracts and assets to Bekins. Bekins sent a 

letter to Cole's customers, stating: "Rest assured your possessions will continue to be 

secured, in a safe, climate-controlled environment. Aside from a new remittance payee, 

this should be a seamless transition for each of you." 

 In November 2004, Bekins closed the San Diego warehouse and moved the 

property stored there, including the Prototype, to a Poway facility. During the move, 

Bekins damaged the Prototype. However, Bekins did not give DeposiTech advance 

notice of the move and did not inform it of the damage to the Prototype. Instead, Bekins 

sent DeposiTech a letter dated November 10, 2004, informing it that "your goods are 

safely relocated" to the Poway facility. It is unclear whether that letter was sent to 

DeposiTech before or after Bekins moved and damaged the Prototype. 
4 

 In May 2006, Bekins moved the property at its Poway facility, including the 

Prototype, to a storage facility on World Trade Drive in San Diego, at which the 

Prototype was then stored in a trailer. After each move, Bekins continued to bill 

DeposiTech for monthly storage fees, which it paid each month. 

 In 2008, Sierra Proto Express (Sierra), a large printed circuit board manufacturing 

company, expressed interest in the Prototype. Robert Tarzwell, its then director of 

technology, had been searching for an alternative to the traditional chemical processes 

and minaturizing copper conductor lines on printed circuit boards. Tarzwell was 

convinced the PlasmaPlate technology was "real." On March 20, 2008, Sierra and 

DeposiTech entered into an agreement (Sierra Agreement) providing that Sierra would 

take possession of and expend considerable resources in developing the Prototype at its 

own expense, but DeposiTech would retain ownership of the Prototype and all patents 

and other intellectual property rights related to it. Sierra needed DeposiTech's technology 

and DeposiTech needed Sierra's resources and development expertise. The Sierra 

Agreement provided: 

"DeposiTech agrees to ship its [P]rototype equipment in good shape 

from its present storage location near San Diego to [Sierra's] location 

in Sunnyvale in March 2008, using a carrier recommended by Sierra. 

DeposiTech shall own and retain title to said equipment while at 

Sierra, but DeposiTech agrees to allow any reasonable additions and 

modifications aimed at improving its performance. . . . 

"Sierra agrees to spend significant effort in developing this 

equipment at its own expense. DeposiTech shall not be liable for 

any expenses, including operating expenses, insurance, costs of 

permits, or taxes while its equipment is at Sierra's facility. . . . 
5 

"If improvements, modifications or engineering changes are made 

during the course of this equipment development that are deemed 

patentable by both Sierra and DeposiTech, then all rights to such 

patents will be assigned to DeposiTech. DeposiTech will pursue 

timely legal action to apply for such patents. . . . 

"If after March 2009 Sierra is no longer actively pursuing efforts to 

develop or use this equipment, DeposiTech shall have the right to 

remove the equipment from Sierra's facility with no further 

obligation to Sierra. . . ." 

DeposiTech also agreed to provide assistance to Sierra in setting up and developing the 

Prototype at a rate of $150 per hour. If Sierra decided to use the developed equipment to 

process printed circuit boards or similar items, a separate contract would be executed by 

Sierra and DeposiTech at that time. 

 As later described by Tarzwell at trial, Sierra's strategy was to get the Prototype up 

and running, and spend whatever money was necessary to make its own pre-production 

machine. He believed the PlasmaPlate technology was "very, very forward and very 

sound" and fit Sierra's needs "very, very well." Sierra budgeted about $550,000 to 

develop the Prototype and get it ready to use on actual customer printed circuit boards. 

That budget included costs and expenses for direct labor, new equipment, and other outof-pocket expenses. Those budgeted costs did not include overhead or other indirect 

costs incurred in developing the Prototype. Sierra estimated that it would invest a total of 

$1.5 to $1.7 million to develop a production-ready model of the PlasmaPlate. The 

likelihood that it would invest that amount was "very good." Sierra spent about $40,000 

to prepare its facility in anticipation of receiving the Prototype. Tarzwell spent about 400 

hours researching and planning the project. Regardless of whether the PlasmaPlate 
6 

would ultimately realize its full potential, Sierra was committed to putting its money at 

risk to find out whether it would. However, Sierra never told DeposiTech exactly how 

much money it was willing to spend to develop the Prototype. 

 On March 21, 2008, the day after DeposiTech executed the Sierra Agreement, Drs. 

Daryl and John Doane of DeposiTech traveled to San Diego to personally oversee the 

removal of the Prototype from storage. A Bekins warehouse employee led them to the 

storage trailer, inside which they found the Prototype disassembled and crushed. The 

Prototype had been damaged in the 2004 move. However, pursuant to Bekins's policy, it 

did not inform DeposiTech of the damage to the Prototype until DeposiTech took 

delivery of it out of storage. Within one week, DeposiTech submitted a claim to Bekins 

with two repair estimates, one for $125,000 and another for $99,300. Bekins inspected 

the damage to the Prototype and then offered DeposiTech $2,400 to settle its claim, based 

on a provision in the Contract that purportedly limited its liability to $0.60 per pound. 

Although the parties were unable to resolve their dispute regarding the repair costs, 

Bekins eventually released the Prototype to DeposiTech in September 2008 and it was 

then transported to Sierra's facility in Sunnyvale. On examining the damaged Prototype, 

Sierra lost interest in developing it because of its condition. Sierra therefore cancelled 

the Sierra Agreement with DeposiTech. Thereafter, DeposiTech was unsuccessful in 

finding another investment or development partner. 

 DeposiTech filed the instant action against Bekins alleging, in its operative second 

amended complaint, causes of action for breach of contract, negligence, and fraud. In its 

fraud cause of action, it alleged Bekins intentionally did not disclose the Prototype had 
7 

been moved and damaged in the course of that move and falsely represented that the 

Prototype had been safely relocated to the Poway storage facility and would continue to 

be secured in a safe, climate-controlled environment. Relying on those concealments and 

misrepresentations, DeposiTech paid monthly storage fees to Bekins believing the 

Prototype was undamaged and would be available for use when a suitable development 

partner was found. DeposiTech allegedly sustained damages because of Bekins's fraud, 

including the cost to repair the Prototype and the loss of a business opportunity to further 

develop the Prototype. DeposiTech also sought punitive damages, alleging Bekins "acted 

with a [conscious] disregard of [DeposiTech's] rights, acted with malice, oppression, or 

fraud, and/or ratified the wrongful and fraudulent conduct alleged above." 

 Following trial, the jury returned a special verdict finding in favor of DeposiTech 

on all three causes of action. On the breach of contract claim, the jury awarded 

DeposiTech $3,300 for "other damage" (apparently for storage fees paid after the 

Prototype was damaged). On the negligence claim, the jury awarded it $115,000 for 

property damage (apparently for the cost of repairing the Prototype). On the fraud claim, 

the jury awarded it $550,000 for loss of business opportunity and $5,000 for 

"incidental/other" damage. The total amount of compensatory damages awarded 

DeposiTech was $673,300. The jury also found DeposiTech proved by clear and 

convincing evidence that Bekins engaged in conduct with malice, oppression, or fraud. 

Following further proceedings on punitive damages, the jury returned a second special 

verdict awarding DeposiTech $640,151.60 in punitive damages. 
8 

 Bekins filed motions for new trial and judgment notwithstanding the verdict. 

DeposiTech filed a motion for attorney fees as the prevailing party. The trial court 

denied the motions. The court entered judgment for DeposiTech in accordance with the 

jury's special verdicts and awarded it a total of $1,313,451.60 in compensatory and 

punitive damages and $20,166.40 in costs. Bekins timely filed a notice of appeal 

challenging the judgment and order denying its motion for judgment notwithstanding the 

verdict. DeposiTech timely filed a notice of cross-appeal challenging the order denying 

its motion for attorney fees. 

DISCUSSION 

BEKINS'S APPEAL 

I 

Evidence and Jury Instruction on Lost Business Opportunity 

 Bekins contends the trial court erred by allowing DeposiTech to present evidence, 

and instructing the jury, on the loss of a business opportunity as compensatory damages 

for Bekins's fraud in the circumstances of this case. Bekins argues the only business 

opportunity that DeposiTech lost was the opportunity to earn net profits from a 

completed PlasmaPlate machine, and DeposiTech did not produce evidence of any lost 

net profits. 

A 

 "Parties have the 'right to have the jury instructed as to the law applicable to all 

their theories of the case . . . supported by the pleadings and the evidence, whether or not 

that evidence was considered persuasive by the trial court.' [Citation.] 'A reviewing 
9 

court must review the evidence most favorable to the contention that the requested 

instruction is applicable since the parties are entitled to an instruction thereon if the 

evidence so viewed could establish the elements of the theory presented. [Citation.]' " 

(Maxwell v. Powers (1994) 22 Cal.App.4th 1596, 1607.) 

 Regarding the appropriate measure of damages and instructions, "[t]he trial court's 

choice among several legally permissible measures of damages, under the specific 

circumstances of the case, is a matter of discretion. [Citation.] However, whether a 

certain measure of damages is permissible given the legal right the defendant has 

[breached] is a matter of law, subject to de novo review." (New West Charter Middle 

School v. Los Angeles Unified School Dist. (2010) 187 Cal.App.4th 831, 843 (New 

West).) Section 3333 provides the general standard for damages in tort cases: 

"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 detriment

proximately caused thereby, whether it could have been anticipated 

or not." (Italics added.) 

"Tort damages are awarded to fully compensate the victim for all the injury suffered. 

[Citation.] There is no fixed rule for the measure of tort damages under . . . section 3333. 

The measure that most appropriately compensates the injured party for the loss sustained 

should be adopted." (Santa Barbara Pistachio Ranch v. Chowchilla Water Dist. (2001) 

88 Cal.App.4th 439, 446-447 (SBPR).) In the context of fraud claims, section 1709 

provides: "One who willfully deceives another with intent to induce him to alter his 

position to his injury or [risk] is liable for any damage which he thereby suffers." Section 

3523 provides: "For every wrong there is a remedy." Importantly for this case, section 
10 

1431.2, subdivision (b)(1), defines "economic damages" for purposes of personal injury 

and property damage cases (e.g., § 1709 fraud cases) as "objectively verifiable monetary 

losses including . . . loss of earnings, . . . costs of repair or replacement, . . . and loss of 

business . . . opportunities." (Italics added.) 

B 

 Bekins filed a motion in limine to exclude all evidence on and references to 

speculative damage claims. Bekins argued that because DeposiTech's plasma technology 

for depositing material on printed circuit boards was not established or shown to be 

commercially viable, any claims by DeposiTech that it lost future profits or business 

opportunities were purely speculative and too uncertain to support compensation for any 

fraud Bekins committed. It requested the trial court exclude any evidence offered by 

DeposiTech on lost business opportunities or lost profits. 

 DeposiTech opposed that motion, arguing that because of Bekins's wrongful 

actions it "lost a golden opportunity it had secured with" Sierra to develop the Prototype 

and sought recovery not only for damage to the Prototype but also consequential damages 

for the loss of the business opportunity with Sierra. 

 The trial court implicitly granted the motion in part and denied it in part, stating: 

"[DeposiTech] cannot argue that well, if this machine were working 

we could have set this business up and we could be making 

$20,000,000 a year. You can't argue that. However, [DeposiTech] 

will be allowed to argue the fact that [it] had a business deal set up 

with this other company [i.e., Sierra] that [it was] going to provide X 

amount of dollars. [Sierra was] going to work it up. And the fact 

that [Bekins] damaged it, [DeposiTech] lost that agreement, and that 

is admissible as to what [it] lost. But as far as money that you would 
11 

have made 10 years from now because this thing was so great, it 

saved the world, you can't argue that, okay." 

The court summarized DeposiTech's theory of lost business opportunity damages, stating: 

"[DeposiTech] had a deal, [Bekins] broke the machine, and Sierra said adios." Regarding 

DeposiTech's proffered evidence on its lost business opportunity, the court stated: "Sierra 

is going to come in here and say here is the deal we have with [DeposiTech], here is what 

we were willing to do, here is what we were willing to invest. Did you do it? No, 

because the machine was broken, we didn't do it, we walked. [DeposiTech is] entitled to 

put that before the jury, because . . . [¶] . . . [¶] . . . [Bekins] lost that deal for [it]." The 

court ruled that theory of lost business opportunity damages was not speculative. The 

court denied Bekins's motion to exclude DeposiTech's evidence on the loss of the 

business opportunity with Sierra. 

 The court instructed with a modified version of CACI No. 3900, stating: "If you 

decide that [DeposiTech] has proved [its] claim against [Bekins], you also must decide 

how much money will reasonably compensate [DeposiTech] for the harm. This 

compensation is called 'damages.' The amount of damages must include an award for 

each item of harm that was caused by [Bekins's] wrongful conduct, even if the particular 

harm could not have been anticipated. [DeposiTech] does not have to prove the exact 

amount of damages that will provide reasonable compensation for the harm. However, 

you must not speculate or guess in awarding damages." In addition to instructing the jury 

generally on tort damages with CACI No. 3900, the trial court specifically instructed on 

the lost business opportunity theory of damages, stating: 
12 

"If you find any of the defendants liable to plaintiff DeposiTech, you 

may award DeposiTech the value of any lost business opportunity 

you find it suffered because of that defendant's wrongful conduct." 

The jury awarded DeposiTech $550,000 in damages for its lost business opportunity that 

resulted from Bekins's fraud. 

C 

 The crux of Bekins's contention appears to be that under applicable law 

DeposiTech could recover damages caused by Bekins's fraud only to the extent it proved 

it lost net profits and not based on any alleged lost business opportunity. In support of its 

argument, Bekins cites Electronic Funds Solutions, LLC v. Murphy (2005) 134 

Cal.App.4th 1161 (EFS), which involved a default judgment entered for the plaintiffs in 

the amount of $24,040,272 as a sanction for the defendants' discovery violations. (Id. at 

pp. 1166-1167, 1172.) EFS held that because the complaint sought damages "in an 

amount in excess of $50,000," Code of Civil Procedure section 580 limited the plaintiffs' 

recoverable compensatory damages in a default judgment to only $50,000. (EFS, at 

pp. 1173-1174.) EFS then concluded the trial court erred by awarding the plaintiffs 

$8,040,272.19 in compensatory damages based on the plaintiffs' expert witness's 

estimation of the market value of the defendants' unestablished business, rather than the 

lost profits the plaintiffs suffered. (Id. at pp. 1179-1180.) In that context, EFS generally 

stated: "Damage awards in injury to business cases are based on net profits. (See, e.g., 

Kuffel v. Seaside Oil Co. (1970) 11 Cal.App.3d 354, 366 . . . ['It is fundamental that in 

awarding damages for the loss of profits, net profits, not gross profits, are the proper 

measure of recovery'].)" (EFS, at p. 1180.) The court reversed the default judgment and 
13 

remanded the matter for a new damages hearing to determine the amount of the plaintiffs' 

lost profits, if any, limited to $50,000 (and the amount of any punitive damages) or for 

the plaintiffs to amend their complaint to allege an increased amount of compensatory 

damages (which amendment would reopen the defendants' default). (Id. at p. 1185.) 

 We conclude EFS does not provide support for Bekins's assertion that a business 

plaintiff in a fraud or other tort case can recover only lost net profits and no other forms 

of compensatory damages (e.g., lost business opportunities). First, EFS's purported net 

profits limitation on damages must be limited to the default judgment circumstances in 

that case. Second, the case EFS cites as support for its purported compensatory damages 

limitation for businesses (i.e., Kuffel v. Seaside Oil Co., supra, 11 Cal.App.3d 354) is 

inapposite to EFS and its quoted language does not support its broadly stated "rule." In 

EFS, the court quoted the following language from Kuffel: "It is fundamental that in 

awarding damages for the loss of profits, net profits, not gross profits, are the proper 

measure of recovery [citations]." (Kuffel, supra, at p. 366.) That language merely states 

the unremarkable proposition that when a plaintiff seeks lost profits, it can recover only 

lost net profits and not lost gross profits. It does not provide any support for EFS's broad 

assertion that "[d]amage awards in injury to business cases are based on net profits." 

(EFS, supra, 134 Cal.App.4th at p. 1180.) We believe what the EFS court may have 

intended to convey is that when a business plaintiff seeks damages based on lost 

earnings, it is the loss of its net profits and not its gross profits that generally is the 

appropriate measure of damages. The language Bekins quotes from EFS does not 

support its broad assertion that a business plaintiff like DeposiTech can only recover 
14 

compensatory damages in the form of lost net profits and not in any other form (e.g., lost 

business opportunities). To the extent the EFS court intended to make such a broad 

general statement on compensatory damages, we disagree with that statement and are not 

persuaded to adopt it and apply it in this case. 

 As stated above, the general standard for tort damages is the "amount which will 

compensate for all the detriment proximately caused" by the tortious conduct. (§ 3333, 

italics added.) Furthermore, "[t]ort damages are awarded to fully compensate the victim 

for all the injury suffered. [Citation.] There is no fixed rule for the measure of tort 

damages under . . . section 3333. The measure that most appropriately compensates the 

injured party for the loss sustained should be adopted." (SBPR, supra, 88 Cal.App.4th at 

pp. 446-447, italics added.) Section 1431.2, subdivision (b)(1), defines "economic 

damages" for fraud and other tort cases as those "objectively verifiable monetary losses 

including . . . loss of business . . . opportunities." (Italics added.) We believe these 

statutory and case authorities support a broader range of measures of damages for 

business plaintiffs than asserted by Bekins. Whether a particular measure of damages is 

permissible in a fraud case is a matter of law, which we decide de novo. (New West, 

supra, 187 Cal.App.4th at p. 843.) Because we do not comprehend any legitimate, much 

less persuasive, reason to limit a business plaintiff's damages in a fraud case to only lost 

net profits, we conclude, as a matter of law, that a plaintiff, such as DeposiTech, is not 

precluded from seeking compensatory damages other than lost net profits. There is no 

fixed rule for fraud or other tort damages under section 3333. (SBPR, at pp. 446-447.) 
15 

 Tort damages generally should be awarded in an amount that will compensate the 

plaintiff for all detriment proximately caused by the defendant's fraud or other tortious 

conduct. (§ 3333.) Economic damages (e.g., compensatory damages) include the loss of 

a business opportunity. (§ 1431.2, subd. (b)(1).) A business plaintiff in a fraud case, 

such as DeposiTech, may seek damages for a lost business opportunity as part of the 

compensatory damages it allegedly suffered. Furthermore, assuming DeposiTech 

provided substantial evidence of a lost business opportunity, we conclude the trial court 

properly allowed DeposiTech to present evidence, and instructed, on the loss of a 

business opportunity as damages for Bekins's fraud. Bekins has not carried its burden on 

appeal to show the trial court abused its discretion by allowing DeposiTech to seek 

compensatory damages based on that particular measure of damages. (New West, supra, 

187 Cal.App.4th at p. 843.) We address below Bekins's argument that DeposiTech 

sought damages consisting only of Sierra's "overhead costs" rather than the value of its 

(DeposiTech's) lost business opportunity. None of the cases cited by Bekins are apposite 

to this case or otherwise persuade us to reach a contrary conclusion. 

II 

Substantial Evidence of Lost Business Opportunity Damages 

 Bekins contends the evidence is insufficient to support the jury's award to 

DeposiTech of $550,000 in damages for its loss of the business opportunity with Sierra. 

A 

 On appeal, when the appellant contends there is insufficient evidence to support 

the jury's verdict, we apply the substantial evidence standard of review. (Wilson v. 
16 

County of Orange (2009) 169 Cal.App.4th 1185, 1188.) The substantial evidence 

standard of review involves two steps. "First, one must resolve all explicit conflicts in 

the evidence in favor of the respondent and presume in favor of the judgment all 

reasonable inferences. [Citation.] Second, one must determine whether the evidence 

thus marshaled is substantial. While it is commonly stated that our 'power' begins and 

ends with a determination that there is substantial evidence [citation], this does not mean 

we must blindly seize any evidence in support of the respondent in order to affirm the 

judgment. . . . [Citation.] '[I]f the word "substantial" [is to mean] anything at all, it 

clearly implies that such evidence must be of ponderable legal significance. Obviously 

the word cannot be deemed synonymous with "any" evidence. It must be reasonable . . . , 

credible, and of solid value . . . .' [Citation.] The ultimate determination is whether a 

reasonable trier of fact could have found for the respondent based on the whole record." 

(Kuhn v. Department of General Services (1994) 22 Cal.App.4th 1627, 1632-1633, fns. 

omitted.) "[T]he power of an appellate court begins and ends with the determination as 

to whether, on the entire record, there is substantial evidence, contradicted or 

uncontradicted, which will support the determination, and when two or more inferences 

can reasonably be deduced from the facts, a reviewing court is without power to 

substitute its deductions for those of the trial court. If such substantial evidence be found, 

it is of no consequence that the trial court believing other evidence, or drawing other 

reasonable inferences, might have reached a contrary conclusion." (Bowers v. Bernards

(1984) 150 Cal.App.3d 870, 873-874.) 
17 

B 

 Bekins asserts the evidence is insufficient to support the jury's finding that 

DeposiTech suffered $550,000 in damages for the lost business opportunity with Sierra. 

It argues there was no evidence Sierra was going to pay that amount to DeposiTech. 

However, Bekins does not persuade us the loss of a business opportunity can only be the 

direct loss of money and not, as in this case, the monetary value of some other benefit of 

a contract or other business opportunity. In this case, DeposiTech presented evidence 

that under the Sierra Agreement it would receive the benefit of a completed and/or further 

developed Prototype. Sierra agreed to "spend significant effort in developing [the 

Prototype] at its own expense." Although Sierra did not inform DeposiTech exactly how 

much it intended to spend on developing the Prototype, Tarzwell testified that Sierra 

budgeted about $550,000 to develop the Prototype and prepare it to use on actual 

customer printed circuit boards. That budget included costs and expenses for direct 

labor, new equipment, and other out-of-pocket expenses. Those budgeted costs did not 

include overhead or other indirect costs incurred in developing the Prototype. Based on 

that evidence, we conclude the jury could reasonably infer that when Bekins's fraud 

caused DeposiTech to lose the business opportunity under the Sierra Agreement, it lost 

the opportunity to obtain a completed and/or further developed Prototype at Sierra's, and 

not its, cost. Because Sierra had budgeted $550,000 in actual out-of-pocket costs (i.e., 

not overhead costs) to develop the Prototype, the jury could reasonably infer the 

monetary value of the improvements made by Sierra to the Prototype was $550,000. 

There is substantial evidence to support the jury's finding that the loss of DeposiTech's 
18 

business opportunity to obtain an improved Prototype at no cost to itself was equal to a 

loss of $550,000 caused by Bekins's fraud. 

 To the extent Bekins argues Sierra never told DeposiTech it would spend that 

amount and the Sierra Agreement did not commit Sierra to take specific actions to 

develop the Prototype, Bekins misconstrues and/or misapplies the substantial evidence 

standard of review. It is not the function of an appellate court to reweigh the evidence 

and/or make inferences different from those made by the jury. Likewise, to the extent 

Bekins argues Sierra's budget of $550,000 to develop the Prototype included only 

"overhead costs" and not actual out-of-pocket costs of development, it again misconstrues 

and/or misapplies the substantial evidence standard of review. The record shows Sierra's 

$550,000 budget included costs and expenses for direct labor, new equipment, and other 

out-of-pocket expenses. Furthermore, Tarzwell testified those budgeted costs did not

include overhead or other indirect costs incurred in developing the Prototype. Applying 

the substantial evidence standard of review, we conclude there is substantial evidence to 

support the jury's implied finding that the $550,000 amount Sierra planned to spend on 

developing the Prototype did not include any overhead costs. 

 We further note that Bekins did not present below, and has not presented on 

appeal, any expert testimony or case authority showing Sierra's $550,000 budget must be 

considered "overhead costs" as a matter of law and therefore cannot provide support for a 

jury's determination of a plaintiff's damages for a lost business opportunity. Guntert v. 

City of Stockton (1976) 55 Cal.App.3d 131, 148-149, cited by Bekins, is inapposite to this 

case and does not persuade us to reach a contrary result. 
19 

 Furthermore, to the extent Bekins argues there is insufficient evidence to support 

$550,000 in damages for DeposiTech's lost business opportunity because it did not 

present evidence that it lost any net profits, Bekins conflates the net profits measure of 

damages with the lost business opportunity measure of damages. DeposiTech's failure to 

present evidence of lost net profits did not preclude it from presenting evidence of 

damages based on its lost business opportunity to obtain an improved Prototype at no cost 

to itself (i.e., at Sierra's cost). We are not persuaded by Bekins's argument that the 

opportunity to obtain an improved Prototype could have no value to DeposiTech except 

for any future net profits it would have earned from a completed Prototype. 

 Finally, Bekins again misconstrues and/or misapplies the substantial evidence 

standard of review when it argues that the jury's $115,000 award for the cost of repairing 

the Prototype was sufficient to make DeposiTech whole. Rather, the jury could 

reasonably infer that mere repair of the Prototype would not make DeposiTech whole 

because it also lost the business opportunity to have Sierra give it an improved and 

completed Prototype at no cost to itself. Accordingly, Bekins has not carried its burden 

on appeal to show there is insufficient evidence to support the jury's award of $550,000 

in damages for DeposiTech's lost business opportunity. Because we conclude 

DeposiTech properly presented evidence on, and substantial evidence supports the jury's 

award of, damages for its lost business opportunity, we do not address Bekins's 

alternative argument that there also was insufficient evidence to support the $550,000 

award based on a lost asset value theory. 
20 

III 

Punitive Damages

 Bekins contends that because the jury's compensatory damages award must be 

reduced, its punitive damages award must likewise be reduced or at least retried. 

However, that argument is conditioned on a determination that the jury's compensatory 

damages award must be reduced. Because that prerequisite has not been met, we do not 

address the merits of Bekins's challenge to the jury's award of punitive damages. 

DEPOSITECH'S CROSS-APPEAL 

IV 

 DeposiTech cross-appeals, challenging the trial court's order denying its motion 

for an award of attorney fees under section 1717 as the prevailing party in this action. 

A 

 After the jury returned its special verdicts in DeposiTech's favor, DeposiTech filed 

a motion for an award of attorney fees as the prevailing party. It argued that pursuant to 

an attorney fees provision in the Contract, it should be awarded attorney fees as the 

prevailing party under section 1717. DeposiTech cited the following provision of the 

Contract (Provision 1) as support for its motion: 

"1. OWNERSHIP OF GOODS: Depositor [i.e., DeposiTech] has 

represented to the Company [i.e., Bekins, as successor to Cole] that 

the Depositor has the lawful possession of and legal right and 

authority to store all of the property herein described, in accordance 

with the provisions, limitations, terms and conditions herein set 

forth; and if there be any litigation concerning the property, the 

Depositor agrees to pay all attorney's fees, which this Company may 

reasonably incur or become liable to pay in connection therewith. 
21 

This Company shall have a lien on said property for all storage and 

other Charges and for such costs and expenses." 

 DeposiTech argued its action against Bekins was an action "on a contract" within 

the meaning of section 1717. It further argued its attorney fees should not be apportioned 

between its contract and noncontract causes of action because its causes of action all 

arose out of a common set of facts. 

 Bekins opposed the motion for attorney fees, contending there was no contractual 

provision that supported an award of attorney fees under section 1717. It argued the 

attorney fee provision in the Contract DeposiTech cited in support of its motion was a 

unilateral indemnification provision and not a section 1717 provision for attorney fees 

awards to a party that prevails in an action on the contract. 

 Following arguments of counsel, the trial court concluded Provision 1 of the 

Contract was an indemnification provision and therefore did not support a section 1717 

attorney fee award. Reading the entire provision as a whole, the court concluded "this is 

an indemnification clause." It stated: "[Provision 1] does not, in any way, suggest 

litigation between the parties. It suggests litigation concerning the ownership of the 

property." Citing Campbell v. Scripps Bank (2000) 78 Cal.App.4th 1328 (Campbell), the 

court concluded the indemnification clause set forth in Provision 1 did not provide for an 

award of attorney fees in the circumstances of this case. 
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B 

 "[A]ttorney fees are not available to a prevailing party unless provided for by 

statute or contract." (Otis Elevator Co. v. Toda Construction (1994) 27 Cal.App.4th 559, 

564.) Section 1717 provides: 

"(a) In any action on a contract, where the contract specifically 

provides that attorney's fees and costs, which are incurred to enforce 

that contract, shall be awarded either to one of the parties or to the 

prevailing party, then the party who is determined to be the party 

prevailing on the contract, whether he or she is the party specified in 

the contract or not, shall be entitled to reasonable attorney's fees in 

addition to other costs." (Italics added.) 

"Where a contract provides for attorney fees in an action to enforce the contract, the 

attorney fees provision is made applicable to the entire contract by operation of . . . 

section 1717." (Myers Building Industries, Ltd. v. Interface Technology, Inc. (1993) 13 

Cal.App.4th 949, 968 (Myers).) However, "[a] provision including attorney fees as an 

item of loss in an indemnity clause is not a provision for attorney fees in an action to 

enforce the contract." (Id. at p. 971.) "Under California law, an '[i]ndemnity is a contract 

by which one engages to save another from a legal consequence of the conduct of one of 

the parties or of some other person.' [Citation.] 'An indemnity against claims, or 

demands, or liability, expressly, or in other equivalent terms, embraces the costs of 

defense against such claims, demands, or liability incurred in good faith, and in the 

exercise of a reasonable discretion . . . .' [Citation.] . . . [¶] An indemnity agreement is to 

be interpreted according to the language and contents of the contract as well as the 

intention of the parties as indicated by the contract. [Citation.] The extent of the duty to 
23 

indemnify is determined from the contract. [Citation.] . . . [¶] . . . Indemnification 

agreements ordinarily relate to third party claims." (Id. at pp. 968-969.) 

 " ' " 'An order granting or denying an award of attorney fees is generally reviewed 

under an abuse of discretion standard of review; however, the "determination of whether 

the criteria for an award of attorney fees and costs have been met is a question of law." 

[Citation.] An issue of law concerning entitlement to attorney fees is reviewed de 

novo.' " ' " (Carpenter & Zuckerman, LLP v. Cohen (2011) 195 Cal.App.4th 373, 378.) 

Likewise, we apply de novo review and exercise our independent judgment in 

interpreting a contract if there is no disputed extrinsic evidence on its interpretation. 

(Campbell, supra, 78 Cal.App.4th at p. 1336.) 

C 

 DeposiTech asserts the trial court erred by denying its motion for an award of 

attorney fees because Provision 1 of the Contract provides for an award of attorney fees 

in an action to enforce the Contract and is not, as the trial court found, merely an 

indemnification provision. However, reading Provision 1 and the other provisions of the 

Contract as a whole and in context and considering the ordinary meaning of the words 

used, we conclude Provision 1 is, as the trial court found, an indemnification provision. 

Furthermore, we conclude Provision 1 does not "specifically provide[]" for an award of 

attorney fees "incurred to enforce that contract [i.e., the Contract]." (§ 1717, subd. (a).) 

Therefore, the trial court correctly denied DeposiTech's motion for attorney fees. 

 We begin our analysis by reviewing pertinent rules for interpretation of contracts. 

"When a contract is reduced to writing, the intention of the parties is to be ascertained 
24 

from the writing alone, if possible; subject, however, to the other provisions of this Title." 

(§ 1639.) "The language of a contract is to govern its interpretation, if the language is 

clear and explicit, and does not involve an absurdity." (§ 1638.) "The whole of a 

contract is to be taken together, so as to give effect to every part, if reasonably 

practicable, each clause helping to interpret the other." (§ 1641.) "If the terms of a 

promise are in any respect ambiguous or uncertain, it must be interpreted in the sense in 

which the promisor believed, at the time of making it, that the promissee understood it." 

(§ 1649.) A contractual provision "is ambiguous if it is capable of more than one 

reasonable construction. [Citation.] However, we will not strain the [contract] language 

to create an ambiguity. [Citation.] Moreover, we will not label a provision ambiguous 

simply upon isolating phrases and considering them in the abstract. Rather, we must 

construe the provision in relation to the whole of the instrument, with each clause giving 

meaning to the other." (Continental Ins. Co. v. Superior Court (1995) 37 Cal.App.4th 69, 

82.) Finally, if after applying all other rules of interpretation a contract's language is 

determined to be ambiguous, then "the language of a contract should be interpreted most 

strongly against the party who caused the uncertainty to exist." (§ 1654.) 

 On close examination of the language of Provision 1 and its context in the entire 

Contract, we conclude, as a matter of law, that Provision 1 is an indemnification 

provision. The title of Provision 1 is "OWNERSHIP OF GOODS," indicating that its 

subject matter is the ownership of the stored property. Provision 1 consists of one 

compound sentence. The main purpose of Provision 1 is set forth at the outset of that 

sentence with DeposiTech representing to Bekins that it has "the lawful possession of and 
25 

legal right and authority to store" the Prototype and other property listed in the Contract. 

Given the context of the Contract, that representation is made as of the time the Contract 

is executed and/or when the property is initially transferred to and stored at Bekins's 

facility (e.g., on or about October 5, 1999). Related to that representation, DeposiTech 

agrees to pay all attorney fees that Bekins may reasonably incur in connection with "any 

litigation regarding the property." Reading Provision 1 as a whole and in the context of 

the Contract, the reasonable construction of "any litigation regarding the property" is any 

litigation regarding the property (e.g., the Prototype) against Bekins challenging 

DeposiTech's possession of and right to store that property as of October 5, 1999, when 

DeposiTech made the representation to Bekins and initially stored the property at its 

facility. To the extent a third party would thereafter file an action against Bekins 

challenging DeposiTech's possession of or right to store that property as of October 5, 

1999, Provision 1 provided, in effect, that DeposiTech agreed to indemnify Bekins for all 

reasonable attorney fees incurred in defending that action. Likewise, to the extent 

Provision 1 could reasonably be construed as a "continuing" representation (i.e., that 

DeposiTech represented it had possession of and the right to store the Prototype and other 

listed property during the entire term of the Contract), Provision 1 provided that 

DeposiTech would indemnify Bekins for attorney fees incurred in third party actions 

against it challenging DeposiTech's right to the property. Provision 1 is, as Bekins argues 

and the trial court found, an indemnification provision. 

 Provision 1 cannot reasonably be construed as providing for attorney fees in 

actions between Bekins and DeposiTech regarding DeposiTech's possession of or legal 
26 

right to the stored property. By focusing only on selected language in Provision 1 (i.e., 

"all litigation regarding the property"), it could be argued such litigation could include 

future litigation not only between Bekins and third parties, but also litigation between 

Bekins and DeposiTech regarding the property. However, when that selected language is 

considered as a whole with all of Provision 1 and the other provisions of the Contract, we 

conclude such an interpretation is unreasonable. Provision 1 cannot be reasonably 

interpreted as applying to litigation between Bekins and DeposiTech (e.g., if DeposiTech 

were to file an action challenging Bekins's right to enforce its warehouseman's lien on the 

property for nonpayment of storage fees pursuant to Provision 11 of the Contract). 

Furthermore, as discussed above, Provision 1 sets forth DeposiTech's representation 

regarding its lawful possession of and legal right to store the property as of October 5, 

1999. There presumably could not be any litigation between Bekins and DeposiTech 

regarding DeposiTech's lawful possession and right to store the property as of that initial 

storage date. It is inconceivable that Bekins would file any action against DeposiTech 

regarding its possession of and right to store the property as of that date unless a third 

party claimed a legal right to that property. 

 We further note the Contract does not contain any express provision for awards of 

attorney fees to either party in actions on the Contract. Provision 12 of the Contract 

provides for arbitration of "[a]ny dispute or claim arising out of or for the breach of this 

agreement or in connection with the property stored hereunder, whether founded in tort or 
27 

contract."2 That provision expressly provides for the equal sharing by the parties of the 

cost of arbitration. However, it does not include any provision regarding the award or 

sharing of attorney fees incurred by one or both parties in arbitration (or in litigation to 

obtain a court order enforcing an arbitration award or otherwise). The absence of any 

express provision awarding attorney fees to a party that prevails in any arbitration (or 

court action) to enforce the Contract, or otherwise arising out of or relating to the 

Contract, supports our conclusion that the parties did not intend to award attorney fees to 

a prevailing party in a dispute between them. Provision 12 supports our conclusion that 

the only reasonable construction of Provision 1 is that its attorney fee language 

constitutes an indemnification provision (i.e., DeposiTech indemnifies Bekins for 

attorney fees incurred in any litigation against it filed by third parties regarding the 

property). Because there is only one reasonable construction of that provision, it is not 

ambiguous and therefore the default rule for construction against its drafter (i.e., § 1654) 

does not apply. 

 

2 Provision 12 of the Contract provides: "TIME FOR FILING CLAIMSARBITRATION: . . . [¶] (b) Any dispute or claim arising out of or for the breach of this 

agreement or in connection with the property stored hereunder, whether founded in tort or 

contract, shall be settled by arbitration under the Arbitration Law of this state and under 

the rules of the American Arbitration Association, provided, however, that upon any such 

arbitration, the arbitrator may not vary, modify or disregard the provisions contained 

herein, including those respecting the declared or agreed valuation of the goods and the 

limitation of liability of the Company. The award may be entered as a judgment of a 

court of record in the county where the award is made. The Depositor and the Company 

shall share equally the cost of arbitration. Court costs shall be borne by the losing party." 
28 

 "A provision including attorney fees as an item of loss in an indemnity clause is 

not a provision for attorney fees in an action to enforce the contract." (Myers, supra, 13 

Cal.App.4th at p. 971.) Alternatively stated, "the inclusion of attorney fees as an item of 

loss in a third party claim-indemnity provision does not constitute a provision for the 

award of attorney fees in an action on the contract which is required to trigger section 

1717." (Carr Business Enterprises, Inc. v. City of Chowchilla (2008) 166 Cal.App.4th 

14, 20.) Because Provision 1 of the Contract does not "specifically provide[] that 

attorney's fees and costs, which are incurred to enforce that contract, shall be awarded 

either to one of the parties or to the prevailing party" as required for application of 

section 1717, there is no statutory or contractual basis on which to award DeposiTech 

attorney fees incurred in the instant action. (§ 1717, subd. (a); cf. Carr Business 

Enterprises, at pp. 20-23; Campbell, supra, 78 Cal.App.4th at pp. 1335-1338; Building 

Maintenance Service Co. v. AIL Systems, Inc. (1997) 55 Cal.App.4th 1014, 1029-1032; 

Otis Elevator Co. v. Toda Construction, supra, 27 Cal.App.4th at pp. 564-566; Myers, at 

pp. 973-975.) Baldwin Builders v. Coast Plastering Corp. (2005) 125 Cal.App.4th 1339, 

cited by DeposiTech, is factually inapposite to this case and does not persuade us to reach 

a contrary conclusion. In that case, the indemnity provision expressly provided the 

indemnitor " 'shall pay all costs, including attorney's fees, incurred in enforcing this 

indemnity agreement [i.e., in an action to enforce the contract].' " (Id. at p. 1342.) The 

trial court correctly denied DeposiTech's section 1717 motion for an award of attorney 

fees incurred in this action. In resolving this contention on this ground, we need not 

address the merits of the parties' alternative arguments regarding the attorney fees issue. 
29 

DISPOSITION 

 The judgment and order denying the motion for attorney fees are affirmed. Each 

party shall bear its own costs on appeal. 

McDONALD, J. 

WE CONCUR: 

NARES, Acting P. J. 

McINTYRE, J.