Court Opinion

ID: 9949102
Source: CourtListenerOpinion
Date Created: 2024-03-08 20:02:37.686573+00
Date Added: 2024-06-11T14:26:37.115079
License: Public Domain

Filed 3/8/24

                            CERTIFIED FOR PUBLICATION

               IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                             FOURTH APPELLATE DISTRICT

                                     DIVISION THREE

 APPLIED MEDICAL DISTRIBUTION
 CORPORATION,
                                                     G062056
      Plaintiff and Appellant,
                                                     (Super. Ct. No. 30-2019-01049441)
          v.
                                                     OPINION
 STEPHEN JARRELLS,

      Defendant and Appellant.

                 Appeal from a judgment of the Superior Court of Orange County, Robert J.
Moss and Michael J. Strickroth, Judges. Affirmed in part, reversed in part, and
remanded.
                 Jones Day, Nathaniel P. Garrett, Koree B. Wooley, David A. Phillips and
Steven M. Zadravecz for Plaintiff and Appellant.

                 Forward Counsel, Michael E. Caspino and Michael W. Weiler for
Defendant and Appellant.
               Applied Medical Distribution Corporation (Applied) sued its former
employee, Stephen Jarrells, for misappropriation of trade secrets, breach of a contract
governing Applied’s proprietary information, and breach of fiduciary duty. Applied also
sued Jarrells’s new employer, Bruin Biometrics, LLC (Bruin), for misappropriation and
intentional interference with contract. A jury found both Jarrells and Bruin
misappropriated Applied’s trade secrets, but also found Applied had not been damaged
and neither defendant had been unjustly enriched by the misappropriation. The jury
found in favor of defendants on all other causes of action. The trial court granted
Applied’s posttrial motion for a permanent injunction and awarded Applied a portion of
the attorney fees, costs, and expenses it requested. Both Jarrells and Applied appealed
from the judgment. We affirm in part, reverse in part, and remand for further
proceedings.
               Jarrells argues Applied did not prevail on any cause of action so the trial
court erred by entering a permanent injunction against him and awarding Applied
attorney fees. We disagree on both counts. Applied was the prevailing party on the
misappropriation cause of action and was entitled to a permanent injunction to recover its
trade secrets and prevent further misappropriation. Under the plain language of the
parties’ proprietary information agreement, Applied was entitled to an award of the
reasonable attorney fees, costs, and expenses it incurred to obtain injunctive relief.
               Applied contends the trial court erred in several respects by awarding only
a fraction of the requested attorney fees, costs, and expenses. We agree in part.
               We conclude the trial court did not err by refusing to accept the assertion by
Applied’s counsel that it had already excluded from its attorney fee request all fees
incurred for work for which an award was not authorized. The court was entitled to make
that determination itself.
               We further conclude the trial court did not err by determining Applied was
entitled only to the attorney fees, costs, and expenses it reasonably incurred to obtain the

                                              2
injunctive relief against Jarrells. Nevertheless, we find the court erred in how it went
about determining the amounts awarded by (1) mechanically awarding only 25 percent of
the incurred attorney fees and costs because Applied prevailed on only one of four claims
it asserted and failing to address the extent to which the facts underlying the other claims
were inextricably intertwined with or dependent upon the allegations that formed the
basis of the one claim on which Applied prevailed; and (2) denying recovery of any
attorney fees incurred for discovery and motion practice. We reverse on these issues and
remand to allow the court to properly exercise its discretion to determine the reasonable
amount of attorney fees and costs incurred by Applied to obtain injunctive relief.
              Applied also argues the trial court erred by refusing to allow Applied to
include, as part of its damages calculations at trial, the fees it paid to a computer forensics
expert to determine the existence and extent of any trade secret misappropriation by
Jarrells and to stop or mitigate the misappropriation. We hold a plaintiff in a
misappropriation case may recover, as an element of damages, the expert fees it incurs to
stop or mitigate misappropriation, but not the expert fees to investigate a suspected
misappropriation. Applied offered evidence its forensics expert performed work to stop
or mitigate Jarrells’s misappropriation, and the court erred in excluding those expert
witness fees from the damages calculation presented to the jury. As to other expert
witness fees Applied incurred, we conclude the court did not err by denying Applied’s
request for such fees as part of its postjudgment cost memorandum.
              Finally, Applied argues the trial court erred by granting a nonsuit on
whether Jarrells’s misappropriation was willful and malicious. We find there was
evidence from which a reasonable jury could find a willful and malicious
misappropriation. We reverse and remand for a jury trial on this issue. If the jury finds
the misappropriation was willful and malicious, the court shall, in its discretion, decide
whether attorney fees and costs should be awarded to Applied pursuant to Civil Code
section 3426.4 and, if so, in what amount. If the jury awards damages for the costs

                                              3
incurred by Applied to stop or mitigate the misappropriation, and further finds the
misappropriation was willful and malicious, it may also consider whether exemplary
damages should be awarded.
              STATEMENT OF FACTS AND PROCEDURAL HISTORY
              Applied sells and distributes medical devices produced by its parent
company, Applied Medical Resources. Jarrells began working for Applied as a director
of academic medical centers in January 2011. At the time he was hired, Jarrells and
                                                                          1
Applied entered into a proprietary information agreement (Agreement). As relevant
here, the Agreement provided:
              1. “I agree at all times during the term of my employment and thereafter to
                 hold in strictest confidence, and not to use except for the benefit of the
                 Company, or to disclose to any person, firm or corporation without
                 written authorization of the Board of Directors of the Company, any
                 trade secrets, confidential knowledge, data or other proprietary
                 information relating to products, processes, know-how, designs,
                 formulas, developmental or experimental work, computer programs,
                 data bases, original works of authorship, customer lists, business plans,
                 financial information or other subject matter pertaining to any business
                 of the Company or any of its clients, consultants or licensees.”
              2. “I agree that, at the time of leaving the employ of the Company, I will
                 deliver to the Company (and will not keep in my possession, recreate or
                 deliver to anyone else) any and all devices, records, data, notes, reports,
                 proposals, lists, correspondence, specifications, drawings, blueprints,
                 sketches, materials, equipment, other documents or property, or

1
  During his tenure at Applied, Jarrells repeatedly was promoted, first to district sales
manager, and then to director of corporate accounts, director of advanced energy
education, and finally vice president in charge of group purchasing organizations.

                                              4
                 reproductions of any [of the] aforementioned items developed by me
                 pursuant to my employment with the Company or otherwise belonging
                 to the Company, its successors or assigns.”
              3. “I agree that it would be impossible or inadequate to measure and
                 calculate the Company’s damages from any breach of the covenants set
                 forth . . . herein. Accordingly, I agree that if I breach any of such
                 Sections, the Company will have available, in addition to any other right
                 or remedy available, the right to obtain an injunction from a court of
                 competent jurisdiction restraining such breach or threatened breach and
                 to specific performance of such provision of this agreement. I further
                 agree that no bond or other security shall be required in obtaining such
                 equitable relief and I hereby consent to the issuance of such injunction
                 and to the ordering of specific performance. I further agree that if any
                 such equitable relief is granted, I shall be obligated to reimburse the
                 company for the reasonable attorneys fees, costs and expenses incurred
                 in obtaining such relief.”
              In December 2018, Jarrells accepted a position as vice president of sales for
Bruin, another medical device manufacturer. Before resigning from Applied in January
2019, Jarrells created a folder on his laptop computer titled “Good Stuff” and copied to it
trade secrets and confidential information belonging to Applied. Jarrells transferred the
contents of the “Good Stuff” folder onto a thumb drive and uploaded them to a computer
issued to him by Bruin. Jarrells then wiped his Applied computer and network drives and
returned his Applied computer to Applied. Jarrells shared Applied’s documents with
employees of Bruin.
              Jarrells knew his actions violated the Agreement. He admitted he never
told anyone at Applied about his actions or requested their permission because he “did
not want the company to know what [he] had done.”

                                              5
               After noticing a suspicious increase in the volume of downloads and
transfers of data, Applied hired an outside forensics expert to investigate the nature and
extent of what Jarrells had done.
               In February 2019, one month after Jarrells resigned, Applied sued Jarrells
for misappropriation of trade secrets and breach of the Agreement. Applied also filed an
ex parte application for a temporary restraining order and a preliminary injunction.
Applied and Jarrells stipulated to a preliminary injunction under which Jarrells agreed to
(1) return all files containing Applied’s business information and any devices on which
such business information had ever been stored, (2) not destroy, manipulate, or alter any
evidence, and (3) refrain from possessing, using, or disclosing Applied’s business
information while the injunction was in place. The stipulated injunction provided neither
party was making any concessions or admissions regarding wrongful conduct or whether
trade secrets and confidential business information were actually at issue. The parties
agreed the stipulated injunction could not be used to prove Applied was the prevailing
party in the litigation.
               Applied filed a first amended complaint in September 2019, adding a cause
of action against Jarrells for breach of fiduciary duty and asserting claims against Bruin
for misappropriation and intentional interference with contractual relations.
               Following trial, a jury made the following findings in its verdict form:
               1. Jarrells acquired, used, or disclosed Applied’s trade secrets by improper
                   means.
               2. Jarrells’s improper acquisition, use, or disclosure of Applied’s trade
                   secrets was not a substantial factor in causing damage to Applied or
                   unjustly enriching Jarrells.
               3. Bruin acquired, used, or disclosed Applied’s trade secrets by improper
                   means.

                                                  6
              4. Bruin’s improper acquisition, use, or disclosure of Applied’s trade
                  secrets was not a substantial factor in causing damage to Applied or
                  unjustly enriching Bruin.
              5. Jarrells breached the Agreement.
              6. Applied was not harmed by Jarrells’s breach of contract.
              7. Jarrells did not breach any fiduciary duty to Applied.
              8. Bruin did not interfere with any contract between Jarrells and Applied.
              The jury awarded no damages to Applied on any of its claims. In
September 2021, the trial court granted Applied’s posttrial motion for a permanent
injunction against Jarrells and Bruin. The injunction was issued based on both the
Agreement and the California Uniform Trade Secrets Act, Civil Code section 3426
et seq. (California UTSA). Applied dismissed Bruin from the action without prejudice in
December 2021.
              Also in December 2021, Applied filed a motion for an award of attorney
fees and costs against Jarrells. Applied requested $3,348,877.95 in attorney fees and
$562,222.30 in costs, for a total of $3,911,100.25. The trial court granted the motion but
                                                                      2
awarded Applied only $513,962.78 in fees and $39,942.78 in costs.
              The trial court entered judgment in September 2022 in favor of Applied and
against Jarrells on the first cause of action for misappropriation of trade secrets and in
favor of Jarrells and against Applied on the causes of action for breach of contract and
breach of fiduciary duty. The court incorporated into the judgment both the permanent
injunction and its prior ruling ordering Jarrells to pay attorney fees and costs.

2
  After the trial court ruled on Applied’s motion for attorney fees, Jarrells filed his own
motion for attorney fees. The court found Jarrells was a prevailing party on certain
claims and awarded him attorney fees. That order is the subject of a separate appeal, case
No. G062699.

                                              7
                Jarrells filed a timely notice of appeal. Applied filed a timely notice of
cross-appeal.
                                        DISCUSSION
                                               I.
       APPLIED PREVAILED ON ITS CLAIM FOR TRADE SECRET MISAPPROPRIATION
                As an initial matter, we must determine whether Applied prevailed at trial
on its cause of action against Jarrells for misappropriation of trade secrets. In a nutshell,
Jarrells argues Applied could not be the prevailing party on its trade secret
misappropriation claim because, although the jury found Jarrells misappropriated
Applied’s trade secrets, it did not find the misappropriation either caused Applied to
suffer damages or resulted in Jarrells being unjustly enriched. Jarrells argues he therefore
prevailed on this claim because proof of damages or unjust enrichment is an essential
element of a trade secret misappropriation claim. We disagree.
                Because Civil Code section 3426.1, subdivision (a) defines
“misappropriation,” our task is simply to interpret its meaning. Here, that task begins and
ends with the plain language of the statute. (Changsha Metro Group Co., Ltd. v. Xufeng
(2020) 57 Cal.App.5th 1, 7 [when interpreting a statute, court begins with its plain
language; if plain language clearly demonstrates legislative intent, the court stops there];
Ramirez v. City of Gardena (2018) 5 Cal.5th 995, 1000 [the words of a statute, “‘giving
them their usual and ordinary meaning and construing them in context,’” provide the best
and most reliable indicator of the legislative intent behind a statute].)
                As defined by the plain language of the statute, misappropriation of a trade
secret under the California UTSA consists of only two elements: (1) existence of a trade
secret, and (2) improper acquisition, use, or disclosure of that trade secret. (Civ. Code,
§ 3426.1, subd. (b); Hooked Media Group, Inc. v. Apple Inc. (2020) 55 Cal.App.5th 323,
331–332; Altavion, Inc. v. Konica Minolta Systems Laboratory, Inc. (2014) 226
Cal.App.4th 26, 41–42; AccuImage Diagnostics Corp. v. Terarecon, Inc. (N.D.Cal. 2003)

                                               8
260 F.Supp.2d 941, 950; Corporate Express Document & Print Mgmt. v. Coons
(C.D.Cal. Apr. 21, 2000, No. CV 00-2426 AHM (Mex)) 2000 U.S.Dist. Lexis 22243,
pp.*23–*24.) By its terms, the California UTSA does not require proof of causation or
damages as elements of a claim for misappropriation. To the contrary, the California
UTSA identifies damages as a remedy that is available once misappropriation has been
established. (Civ. Code, § 3426.3, subd. (a).) “Section 3 of the [Uniform Trade Secrets]
Act allows for the award of damages if a case of misappropriation is established.” (Jager
& Lane, 1 Trade Secrets Law (2023) § 3:42, italics added.)
              To be sure, where (as here) a trier of fact finds misappropriation has
occurred under Civil Code section 3426.1, subdivision (b), the next step is to determine
whether the misappropriation caused plaintiff to suffer “actual loss” or caused defendant
to be unjustly enriched. (Id., § 3426.3, subd. (a).) But a jury finding that neither
damages nor unjust enrichment has been proven does not end the remedy inquiry. The
California UTSA provides that if neither actual loss nor unjust enrichment can be proven,
the trial court may award a reasonable royalty as a remedy for the misappropriation. (Id.,
§ 3426.3, subd. (b).) The California UTSA also authorizes the court to enjoin actual or
threatened misappropriation. (Id., § 3426.2, subd. (a).)
              Based on the plain language of the statutory definition of
“misappropriation,” we conclude causation and damages are not elements of a claim for
                                                               3
misappropriation of trade secrets under the California UTSA.

3
  O2 Micro Intern. Ltd. v. Monolithic Power Systems (N.D.Cal. 2005) 399 F.Supp.2d
1064, supports our conclusion. In that case, the trial court awarded a reasonable royalty
and exemplary damages to the plaintiff under the California UTSA even though the
plaintiff had failed to prove it suffered any damages and the court found as a matter of
law the defendant had not been unjustly enriched. (Id. at pp. 1077–1080.) The court
denied the plaintiff’s request for an injunction because the trade secrets had been
disclosed and there was no evidence the defendant had obtained a commercial advantage
from the misappropriation, not because the elements of the misappropriation claim had
not been proven. (Id. at p. 1070.)

                                              9
                Jarrells points to standard jury instruction CACI No. 4401, and cases citing
it, as support for his position that causation and damages are essential elements of a
misappropriation claim under the California UTSA. Jarrells’s reliance on CACI
No. 4401 misses the mark.
                A CACI instruction is not itself authority for a legal proposition. If an
“instruction conflicts with the statute, the statute necessarily controls.” (People v. Bergen
(2008) 166 Cal.App.4th 161, 173, fn. 7.) As shown above, nothing in the California
UTSA supports an interpretation that a trade secret has not been misappropriated unless
the plaintiff can prove the misappropriation caused it to suffer damages or unjustly
enriched the defendant. Thus, even if CACI No. 4401 identified causation and damages
as necessary elements to prove a trade secret was misappropriated, it would not control
our analysis.
                In any event, fairly read, CACI No. 4401 does not instruct the jury that it
cannot find misappropriation has occurred unless it finds the misappropriation resulted in
damages or unjust enrichment. The instruction addresses the issues of damages and
unjust enrichment because, by definition, those are the only remedies a jury could
consider or award for an adjudicated misappropriation. The other remedies available to a
plaintiff whose trade secrets have been misappropriated—reasonable royalty and
injunction—may be awarded only by the trial court. (Civ. Code, §§ 3426.2, 3426.3,
subd. (b).) Thus, CACI No. 4401 simply instructs the jury that for Applied to “succeed
on [its] claim” for an award of damages or unjust enrichment, it must prove not only the
two statutory elements of misappropriation but also that it suffered damages or that
defendants have been unjustly enriched.
                Finally, the interpretation Jarrells urges us to adopt would fly in the face of
both the statute and common sense. Under Jarrells’s view, a jury could find (as it did
here) a defendant improperly acquired, used, or disclosed trade secrets, but if the legal
remedies available to plaintiff—damages or unjust enrichment—could not be proven, the

                                               10
trial court would be divested of its express statutory authority to award a reasonable
royalty or enjoin continued misappropriation, leaving the defendant free to continue its
misappropriation. We cannot rewrite the statute to reach that result. Moreover, under
Jarrells’s view, a plaintiff that acts quickly (and successfully) to stop misappropriation of
its trade secrets before any commercial harm has been done would be precluded from
obtaining an injunction to get its stolen trade secrets back and prevent their future
unauthorized used. We decline to ascribe such an intent to the Legislature.
              Jarrells also relies heavily on Sargent Fletcher, Inc. v. Able Corp. (2003)
110 Cal.App.4th 1658 (Sargent Fletcher), in which the trial court addressed which party
in a trade secret misappropriation case bears the burden of proving the defendant used the
claimed trade secrets. On the way to resolving that issue, the appellate court stated,
“[u]nder the [California] UTSA, a prima facie claim for misappropriation of trade secrets
requires the plaintiff to demonstrate: (1) the plaintiff owned a trade secret, (2) the
defendant acquired, disclosed, or used the plaintiff’s trade secret through improper
means, and (3) the defendant’s actions damaged the plaintiff.” (Id. at p. 1665.)
              Sargent Fletcher does not support Jarrells’s position. First, the language
that damages are part of a prima facie claim under the California UTSA is dicta.
Moreover, neither the statute nor the cases cited by Sargent Fletcher supports the
proposition that trade secret misappropriation cannot be proven without also proving
damages or unjust enrichment. As shown above, Civil Code section 3426.1 does not
define misappropriation to require proof of causation and damages and/or unjust
enrichment. Further, the cases Sargent Fletcher cites as support for its summary
recitation of the elements of a claim under the California UTSA do not hold that damages
are an essential element to prove trade secret misappropriation. (See Frantz v. Johnson
(2000) 116 Nev. 455, 466; Total Care Physicians, P.A. v. O’Hara (Del.Super.Ct. 2001)
798 A.2d 1043, 1052–1053.)

                                             11
               Other cases cited by Jarrells for the proposition that damages are an
element of a trade secret misappropriation claim, which also cite only CACI No. 4401,
are not on point. (See AMN Healthcare, Inc. v. Aya Healthcare Services, Inc. (2018) 28
Cal.App.5th 923, 942 (AMN) [considering whether a trade secret was at issue, not
whether damages must be proven as an element of the claim]; Jasmine Networks, Inc. v.
Superior Court (2009) 180 Cal.App.4th 980, 997 [current ownership of a trade secret not
required to assert a claim for misappropriation]; Masimo Corp. v. Apple, Inc. (C.D.Cal.
May 4, 2023, No. SACV 20-00048 JVS (JDEx)) 2023 U.S.Dist. Lexis 78446 at pp. *8–
*9 [quoting AMN; on motion for judgment as a matter of law, court considered issues of
intent, existence of trade secrets, and acquisition/use/disclosure, not whether claim failed
for lack of proof of damages].)
               In sum, the jury found Jarrells misappropriated Applied’s trade secrets by
                                                            4
acquiring, using, or disclosing them by improper means. That constituted a finding by
the trier of fact that misappropriation occurred, which in turn permitted the trial court to
consider whether to impose an injunction or assess a reasonable royalty. The court had
statutory authority to impose those remedies even though the jury found that the legal
remedies submitted to it—damages or unjust enrichment—were not proven. In light of
the jury’s misappropriation finding and the court’s imposition of an injunctive remedy,
we have no difficulty concluding Applied was the prevailing party on its trade secret
misappropriation claim.
                                             II.
          THE TRIAL COURT DID NOT ERR IN ISSUING A PERMANENT INJUNCTION
               Jarrells contends the trial court erred by issuing a permanent injunction.
“‘A permanent injunction is merely a remedy for a proven cause of action. It may not be
issued if the underlying cause of action is not established.’” (City of South Pasadena v.

4
    The jury made similar findings with respect to Bruin.

                                             12
Department of Transportation (1994) 29 Cal.App.4th 1280, 1293.) We review an order
granting a permanent injunction for abuse of discretion. (Mendez v. Rancho Valencia
                                                         5
Resort Partners, LLC (2016) 3 Cal.App.5th 248, 260.) To the extent the court made any
factual findings, we review them for substantial evidence. (Mendez, at pp. 260–261.)
We review any legal issues de novo. (Id. at p. 261.)
              The trial court issued the permanent injunction pursuant to the Agreement,
                                                                                 6
Code of Civil Procedure section 526, and Civil Code sections 3426.2 and 3422. The
injunction included the following orders:
              1. Jarrells and Bruin are prohibited from possessing, using, or disclosing
the information identified at trial as Applied’s trade secrets.
              2. Jarrells and Bruin must, at their own expense, retain a qualified and
independent third party computer forensic professional to examine Jarrells’s and Bruin’s

5
   Jarrells argues the correct standard of review is de novo: “[W]here an appeal attacks
the legal premises of a permanent injunction on undisputed ultimate facts . . . our review
is de novo.” (People ex rel. Becerra v. Huber (2019) 32 Cal.App.5th 524, 532.) Given
that the parties are still disputing on appeal who is the prevailing party on the
misappropriation and breach of contract claims, we conclude the ultimate facts in this
case are not undisputed, and the abuse of discretion standard therefore applies here. Even
if we were to review this issue de novo, both the language of the California UTSA and
the language of the Agreement would require us to affirm the issuance of the permanent
injunction, as explained below.
6
  “Except where otherwise provided by this Title, a final injunction may be granted to
prevent the breach of an obligation existing in favor of the applicant: [¶] 1. Where
pecuniary compensation would not afford adequate relief; [¶] 2. Where it would be
extremely difficult to ascertain the amount of compensation which would afford adequate
relief; [¶] 3. Where the restraint is necessary to prevent a multiplicity of judicial
proceedings; or, [¶] 4. Where the obligation arises from a trust.” (Civ. Code, § 3422.)
Although Civil Code section 3422 is not part of the California UTSA, it is nevertheless
relevant because “‘[i]njunctions in the area of trade secrets are governed by the principles
applicable to injunctions in general.’” (DVD Copy Control Assn. Inc. v. Bunner (2004)
116 Cal.App.4th 241, 250.)

                                              13
devices and electronic accounts, identify Applied’s trade secrets, and ensure the
misappropriation of those trade secrets has been remediated.
              3. Jarrells and Bruin must submit to Applied and the court a report by the
third party computer forensic professional describing the remediation protocols and their
results.
              4. Jarrells and Bruin must return to Applied the information identified at
trial as Applied’s trade secrets and permanently delete that information from their
electronic systems, devices, and accounts.
              Jarrells appeals the issuance of the permanent injunction based solely on his
contention Applied did not prevail on the claim for misappropriation of trade secrets.
Because we concluded above that Applied proved its claim for misappropriation under
the California UTSA, the statute permitted the trial court to award injunctive relief to
Applied. (See Civ. Code, § 3426.2, subds. (a) [“Actual or threatened misappropriation
may be enjoined”] & (c) [“In appropriate circumstances, affirmative acts to protect a
trade secret may be compelled by court order”].)
              In any event, the Agreement also authorized injunctive relief to prohibit
breach of the covenants set forth in it, including Jarrells’s agreement not to take or use
Applied’s trade secrets. It was not inappropriate for the trial court to issue a permanent
injunction based on the evidence Jarrells still had Applied’s trade secret and confidential
documents in his possession after issuance of the preliminary injunction. Based on the
jury’s finding of misappropriation and our conclusion affirming that finding, we find the
court did not err in issuing the permanent injunction.

                                             14
                                             III.
    THE TRIAL COURT DID NOT ERR IN FINDING APPLIED WAS ENTITLED TO AN AWARD OF
               ATTORNEY FEES, COSTS, AND EXPENSES AGAINST JARRELLS
              The trial court granted in part and denied in part Applied’s motion for an
                                                                  7
award of $3.9 million in attorney fees, costs, and expenses. It found Applied was
entitled to fees based on Jarrells’s agreement to reimburse Applied for the reasonable
attorney fees, costs, and expenses it incurred to obtain an injunction restraining Jarrells
from breaching any of the covenants in the Agreement. Those covenants included
Jarrells’s agreement not to disclose Applied’s trade secrets to others or use Applied’s
trade secrets to benefit anyone other than Applied. The court nevertheless awarded
                                                              8
Applied substantially less than the full amounts it sought.
              Both parties appealed from the trial court’s fee order. Jarrells contends no
attorney fees or costs could be awarded to Applied because he was the prevailing party
on all causes of action. For its part, Applied challenges most of the court’s reductions in
the fees, costs, and expenses requested.
              “‘“‘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.” [Citations.]’”’ [Citation.] An issue of law concerning entitlement to attorney fees
is reviewed de novo. [Citations.] ‘When a trial court has resolved a disputed factual

7
  This sum did not include another $1.2 million in fees and $79,000 in costs that Applied
chose to exclude from its fee motion.
8
  The trial court did not base its fee award on the California UTSA statutory provision
authorizing an award of attorney fees where misappropriation has been found to be
willful and malicious. (Civ. Code, § 3426.4.) As we discuss below in part VI, the court
erroneously granted Jarrells’s motion for nonsuit on whether the misappropriation was
willful and malicious. On remand, if the misappropriation is found to be willful and
malicious, the court may consider whether to award attorney fees under Civil Code
section 3426.4 in addition to or instead of under the Agreement.

                                             15
issue, an appellate court reviews the ruling according to the substantial evidence rule.
The trial court’s resolution of the factual issue must be affirmed if it is supported by
substantial evidence. [Citation.] We look at the evidence in support of the trial court’s
finding, resolve all conflicts in favor of the respondent and indulge in all legitimate and
reasonable inferences to uphold the finding.’” (Carpenter & Zuckerman, LLP v. Cohen
(2011) 195 Cal.App.4th 373, 378.)
              Because we held above that Applied prevailed on its trade secret claim
against Jarrells, we conclude the trial court did not err in finding Applied was entitled to
an award of the reasonable attorney fees, costs, and expenses Applied incurred to obtain
the permanent injunction against Jarrells. The jury’s finding that Jarrells misappropriated
Applied’s trade secrets supported the court’s conclusion that Jarrells breached the
Agreement and Applied therefore was entitled to a permanent injunction enjoining any
continuing or threatened misappropriation.
              The Agreement entitled Applied to recover the “reasonable attorneys fees,
costs and expenses incurred in obtaining [equitable] relief.” The Agreement did not
require Applied to prevail on a claim for breach of contract to recover its fees, costs, and
expenses. It simply required Applied to succeed in obtaining equitable relief restraining
misappropriation or other breach of the covenants in the Agreement. As the trial court
noted, “plaintiff did obtain injunctive relief with regard to return of its ‘proprietary’
information, a right granted to plaintiff in the contract itself, and upon which plaintiff is
seeking its fees. But that doesn’t mean plaintiff prevailed on this cause of action [for
breach of contract]. It just means it may collect the fees incurred in obtaining the
injunctive relief.”
              It has long been the law in California that, despite the general rule that all
parties to litigation bear their own fees and costs, a litigant may obtain an award of its
reasonable attorney fees and costs where it is a party to an agreement that provides for

                                              16
such an award. (Mountain Air Enterprises, LLC v. Sundowner Towers, LLC (2017) 3
Cal.5th 744, 751.) That is the case here.
              The Agreement between Jarrells and Applied authorized Applied to obtain
an injunction to prevent breach of the covenants set forth in the Agreement, including
Jarrells’s covenant not to use or disclose Applied’s trade secrets. That is exactly what
Applied did. By prevailing on its trade secret claim, Applied made it possible to obtain a
permanent injunction restraining Jarrells from committing any further acts of
misappropriation and compelling him to return the purloined trade secrets. Based on the
plain language of the Agreement, Applied is entitled to an award of the reasonable
                                                                            9
attorney fees, costs, and expenses it incurred to secure that injunction.
                                             IV.
     THE TRIAL COURT ERRED IN SOME RESPECTS IN DETERMINING THE AMOUNT OF
            ATTORNEY FEES, COSTS, AND EXPENSES AWARDED TO APPLIED
              We turn to the question of whether the trial court erred in determining the
amount of fees, costs, and expenses it awarded.
              Applied’s motion for attorney fees separated the requested fees into six
                                                              10
categories based on the tasks for which they were incurred.        The trial court denied all
fees for two of the categories, discovery/motion practice and the fee motion itself. For
two other categories—Applied’s opposition to Jarrells’s motion for summary judgment

9
  Based on this conclusion, we need not address Applied’s argument it was entitled to
recover attorney fees and costs as the prevailing party on the breach of contract claim.
10
    The categories, as set forth in counsel’s declaration in support of the motion for
attorney fees and used in the trial court’s minute order were: (1) case investigation,
strategy, obtaining a temporary restraining order (01/24/19 to 02/21/19), (2) case
investigation and development, obtaining partial return of materials (01/22/19 to
09/12/19), (3) discovery and motion practice (07/18/19 to 10/01/20), (4) opposition to
Jarrells’s motion for summary judgment (02/14/20 to 09/11/20), (5) trial preparation and
trial (10/01/20 to 03/23/21), (6) obtaining a permanent injunction (03/15/21 to 08/27/21),
and (7) attorney fees motion (09/28/21 to the date of the hearing).

                                             17
and its posttrial motion for entry of the permanent injunction—the court concluded the
amount of time spent by the attorneys was unreasonable, and it awarded fees based on a
reduced number of hours. As to all categories other than the posttrial motion for a
permanent injunction, the court found Applied was entitled to only 25 percent of the fees
it requested because (1) Applied could only recover the fees directly related to the
injunctive relief and (2) the injunction was awarded on only one of Applied’s four causes
of action (i.e., 25 percent of the claims). Thus, for those five fee categories, the court
imposed an across-the-board reduction of 75 percent. Finally, the court reduced the fees
awarded in all categories by another 25 percent because the hourly rates charged by
counsel were unreasonably high.
               Applied challenges the trial court’s award on four grounds: (1) the court
should not have reduced the fees by 75 percent to reflect Applied’s failure to prevail on
three of its causes of action because all of the causes of action arose out of the same core
facts and therefore were inextricably intertwined; (2) even if some apportionment were
appropriate, the court should not have excluded fees, costs, and expenses associated with
Applied’s claims against Bruin for intentional interference with contract and against
Jarrells for breach of fiduciary duty, because Applied already excluded those fees, costs,
and expenses from the amounts sought in its fee motion; (3) the court should not have
refused to award attorney fees for any discovery and motion practice; and (4) the court
should not have excluded from the award of costs all expenses of Applied’s retained
                      11
litigation experts.

A. The Trial Court Erred in Its Apportionment of Fees and Costs Between Causes of
Action
               The trial court determined Applied was entitled only to an award of the
attorney fees it reasonably incurred in its effort to obtain the permanent injunction
11
   Applied did not appeal the court’s 25 percent reduction of its counsel’s hourly rates on
the ground the rates were excessive.

                                              18
restraining Jarrells from further trade secret misappropriation. In relevant part, the
court’s minute order reads: “Plaintiff contends it should be reimbursed for all hours spent
prosecuting this case. Defendant claims the award should be limited to the hours spent in
obtaining the injunctive relief. The court agrees with defendant. Plaintiff was
prosecuting four causes of action. The right to attorney fees sprung from the provisions
of the contract, but the jury did not find in favor of plaintiff in that cause of action.
Although technically plaintiff is not the prevailing party on that claim, pursuant to the
terms of the contract it is entitled to attorney fees.” Based on this reasoning, the trial
court reduced the requested fees by 75 percent because Applied only prevailed on 25
percent of its claims. The court applied a similar reduction to Applied’s request for costs.
              Jarrells argues the trial court properly reduced Applied’s requested fees and
costs by 75 percent, citing this portion of the minute order: “A court properly refuses a
request for apportion [sic] attorney fees incurred in defending a contract claim and those
incurred in defending non-contract claims where all causes of action rely on the same
factual allegations. [Citation.] The court’s determination here is to deny apportionment
and permit plaintiff’s attorney fees as to the time spent on obtaining the injunctive relief
only. Had plaintiff not made, and the court had not granted, the [posttrial] permanent
injunction, plaintiff wouldn’t be entitled to any fees at all.”
              Our review of the trial court’s minute order leads us to conclude that,
despite its statement to the contrary, the court did in fact “apportion” Applied’s requested
attorney fees and costs in two respects: first, to award only fees and costs related to the
one cause of action (misappropriation) on which Applied prevailed, and second, to award
only those fees and costs Applied reasonably incurred to establish the misappropriation
occurred and thereby obtain the permanent injunction.
              The principle of apportioning fee awards has long been recognized. When,
for example, a claim based on a contract providing for attorney fees is joined with
noncontract claims, the prevailing party is only entitled to recover fees related to the

                                               19
contract action and the court may properly apportion out the fees for the noncontract
claims. (Reynolds Metals Co. v. Alperson (1979) 25 Cal.3d 124, 129.) Where the
attorney fees are incurred in connection with both the contract and noncontract claims,
they may, but need not, be apportioned. (Id. at pp. 129–130.) “‘“Apportionment is not
required when the claims for relief are so intertwined that it would be impracticable, if
not impossible, to separate the attorney’s time into compensable and noncompensable
units.”’” (Hjelm v. Prometheus Real Estate Group, Inc. (2016) 3 Cal.App.5th 1155, 1178
(Hjelm).)
              We find no error in the trial court’s decision to limit (or apportion) the fee
award to comply with the terms of the Agreement that created the right to the fee award,
i.e., to award only the attorney fees, costs, and expenses Applied incurred to obtain the
injunction.
              Such apportionment here is consistent with the Agreement, which provides
(1) in addition to any other remedies available to it, Applied had the right to obtain an
injunction to restrain a “breach or threatened breach” of the covenants set forth in the
Agreement, and (2) if such equitable relief were granted, Jarrells would be “obligated to
reimburse [Applied] for the reasonable [attorney] fees, costs and expenses incurred in
obtaining such relief.” In other words, the Agreement that created Applied’s right to an
award of attorney fees, costs, and expenses specifically defined—and limited—the scope
of the permissible award.
              The questions then become whether the trial court erred in calculating the
apportioned fees and costs, and the standard of review we apply to answer that question.
“‘Once a trial court determines entitlement to an award of attorney fees, apportionment of
that award rests within the court’s sound discretion.’” (Hjelm, supra, 3 Cal.App.5th at
p. 1177.) Accordingly, Applied bears the burden of “‘establish[ing] that discretion was
clearly abused and a miscarriage of justice resulted.’” (Ibid.)

                                             20
              Holguin v. Dish Network LLC (2014) 229 Cal.App.4th 1310 (Holguin), is
instructive on the weight we give to the trial court’s apportionment analysis. In addition
to a breach of contract claim, the Holguin plaintiffs pursued multiple tort claims, four of
which were nonsuited by the court during trial. (Id. at p. 1331.) The jury found in favor
of the plaintiffs on the two remaining tort claims and the breach of contract claim,
awarding economic damages on all three claims and noneconomic damages on the tort
claims. (Ibid.) “‘Based on its substantial familiarity with the issues in the case and the
evidence presented at trial,’” the trial court made findings as to the percentage of attorney
time attributable to liability versus damages, and then reduced the attorney time based on
tort damages versus contract damages. (Ibid.) The plaintiffs contended on appeal “much
of the evidence offered by the [plaintiffs] in support of their noneconomic damages was
‘useful’ or ‘necessary’ to support their economic damages. Thus, they maintain, the
attorney time that the trial court attributed to their noneconomic damages should be
included in the fee award.” (Id. at pp. 1331–1332.)
              The appellate court in Holguin rejected this argument. “Assessment of
these issues requires analysis of the interplay between the [plaintiffs]’ various claims, the
evidence offered at trial, and the reasonableness of the time spent on various aspects of
the [plaintiffs]’ trial presentation. These are matters that are properly committed to the
trial court’s sound discretion. [Citation.] The trial court found the proportion of
economic to noneconomic damages to be an appropriate proxy for apportionment of
attorney fees attributable to the [plaintiffs]’ damages case. The [plaintiffs] have provided
no reason to substitute our judgment for that of the trial court in this regard.” (Holguin,
supra, 229 Cal.App.4th at p. 1332.)
              Although we undertake our review of the amount of fees awarded by the
trial court with considerable deference, it is still the case that it must appear from the
record that, in determining the amount of the fees, the court actually exercised and did
not abuse its discretion. (In re Marriage of Sharples (2014) 223 Cal.App.4th 160, 165

                                              21
[even where trial court has “‘considerable latitude’” in awarding attorney fees, if its
decision does not show exercise of discretion and consideration of relevant factors, it has
abused its discretion]; Garcia v. Santana (2009) 174 Cal.App.4th 464, 476–477 [trial
court’s failure to exercise discretion in addressing request for prevailing party attorney
fees is abuse of discretion]; Horsford v. Board of Trustees of California State University
(2005) 132 Cal.App.4th 359, 395–396 [same].)
              It is here we part ways with the trial court’s 75 percent mathematical
apportionment. Except for the category of fees incurred by Applied in its posttrial
motion for a permanent injunction, the court applied a flat 75 percent reduction to the
fees and costs Applied requested. It appears the court selected the 75 percent figure
because it concluded (1) of the four causes of action Applied asserted, it prevailed on
only one; (2) the permanent injunction was only issued because of that one claim; and
(3) only 25 percent of the fees and costs incurred could have related to the claim that
ultimately led to the issuance of the permanent injunction.
              In applying a blanket 75 percent reduction, the trial court appeared to
perform a mechanical, mathematical exercise, without any analysis of the extent to which
the other three claims rested, in whole or in part, on the same core of underlying facts that
formed the basis for the trade secret misappropriation cause of action. That was an abuse
of the court’s discretion. (See Mountjoy v. Bank of America, N.A. (2016) 245
Cal.App.4th 266, 280–282 [reversing trial court’s arbitrary across-the-board reduction in
hours for purposes of fee award]; Hadley v. Krepel (1985) 167 Cal.App.3d 677, 686
[apportionment not appropriate between contract and noncontract claims because both
types of claims were related by a single common issue].)
              Although we reverse the trial court’s order as it pertains to the blanket
75 percent reduction in fees and costs, we decline Applied’s request that we determine
the final amount of awardable fees, costs, and expenses. The trial court is in the best
position to determine the extent to which the allegations supporting the four causes of

                                             22
action overlapped, including, by way of example, the extent to which the discovery and
evidence reasonably necessary for Applied to prove its misappropriation claim
overlapped with the discovery and evidence reasonably necessary for the other three
causes of action. Accordingly, we remand for the court to (1) make determinations
regarding apportionment of the fees, costs, and expenses Applied reasonably incurred to
prevail on its trade secrets claim and obtain equitable relief, and (2) to calculate a
reasonable award based on them.
              In a related argument, Applied also contends that even if some reduction
were appropriate to reflect fees and costs devoted to claims on which it did not prevail,
the trial court could not properly apply any reduction to account for Applied’s intentional
interference with contract claim against Bruin or its breach of fiduciary duty claim
against Jarrells because Applied already excluded from its motion the fees, costs, and
expenses it believed were attributable solely to prosecuting those two claims. Implicit in
this argument is the suggestion the court was bound to accept Applied’s judgment
concerning what was (and was not) properly attributable to these two claims.
              The declaration of Applied’s counsel in support of the motion for attorney
fees states, in relevant part: “Pursuant to the terms of the Proprietary Information
Agreement between Jarrells and [Applied], [Applied] is entitled to recover the fees and
costs incurred to obtain injunctive relief against Jarrells, not all fees and costs incurred to
prosecute this action over the course of three years. . . . To properly apportion the fees
and costs that can be primarily attributed to those incurred in connection with obtaining
injunctive relief against Jarrells, I, with the assistance of two other attorneys at Jones
Day, . . . self-audited and reviewed Jones Day’s billing records . . . line by line to isolate
the fees and costs that would not be appropriate to seek in this Motion (i.e., those that
were not incurred primarily to further [Applied]’s efforts to establish its misappropriation
and breach of contract claims and to obtain injunctive relief against Jarrells).” Counsel’s

                                              23
declaration specified Applied was not seeking attorney fees or costs associated with the
interference claim against Bruin or the breach of fiduciary duty claim against Jarrells.
              We find no error by the trial court in this regard. The fact that Applied’s
counsel believes it properly excluded unrecoverable fees from its fees motion does not
mean the court is obligated to agree. Whether to accept counsel’s judgments and
calculations was a matter within the court’s discretion. “We may not reweigh on appeal a
trial court’s assessment of an attorney’s declaration.” (Christian Research Institute v.
Alnor (2008) 165 Cal.App.4th 1315, 1323.)

B. The Trial Court Erred by Denying All Fees and Costs Incurred for Discovery and
Motion Practice
              The trial court denied all attorney fees Applied incurred for discovery and
motion practice, explaining: “The law and motion practice and discovery did nothing to
support the injunctive relief. The preliminary injunction was in place. As the jury found
defendant was not enriched and plaintiff was not ‘damaged’ by the alleged
misappropriation of trade secrets, the hours claimed were not expended in support of the
permanent injunction. Plaintiff was only granted the permanent injunction because after
the jury found ‘no damages,’ plaintiff convinced the court that the term ‘harm’ was
different and only argued generically, that permanent injunctive relief was appropriate.”
              On appeal, Applied contends the trial court’s conclusion was legally and
factually incorrect. Applied notes that all told, to both uncover the facts necessary to
prove its own claims and to respond to Jarrells’s own “extensive” discovery, Applied’s
attorneys participated in nine nonexpert depositions, exchanged over 39 sets of written
discovery, filed or responded to five discovery-related motions or briefs, and produced
and evaluated more than 200,000 pages of documents, among other things. In response,
Jarrells contends fees devoted to discovery were unnecessary because the relief granted
by the permanent injunction “is almost precisely the relief Jarrells stipulated to at the
outset of the case” in the preliminary injunction.

                                             24
              We agree with Applied. A preliminary injunction is not the same as a
permanent injunction. A permanent injunction is “a determination on the merits” that
requires the party seeking the injunction to present evidence proving the elements of the
plaintiff’s cause of action. (Art Movers, Inc. v. Ni West, Inc. (1992) 3 Cal.App.4th 640,
646.) A party generally obtains such evidence through discovery and, where necessary,
motion practice. Moreover, by their terms, the preliminary injunction and the permanent
injunction entered here were not identical. Thus, to obtain the permanent injunction, it
was incumbent on Applied to develop and present sufficient evidence at trial to support
its claims.
              It is true, of course, that “‘[t]he “experienced trial judge is the best judge of
the value of professional services rendered in his court, and while his judgment is of
course subject to review, it will not be disturbed unless the appellate court is convinced
that it is clearly wrong.”’” (Laffitte v. Robert Half Internat. Inc. (2016) 1 Cal.5th 480,
488.) But Jarrells did not stipulate to having misappropriated Applied’s trade secrets or
to entry of a permanent injunction; he denied Applied’s allegations and litigated the case
through trial. The existence of a preliminary injunction certainly did not obviate the need
for Applied to prepare for trial and to conduct whatever discovery was reasonably
necessary to prove its claim for trade secret misappropriation and thereby obtain
injunctive relief. We conclude, therefore, that the trial court’s blanket denial of all fees
and costs for discovery and motion practice on the ground that the preliminary injunction
was already in place, without evaluating and determining the extent to which the
discovery and motion practice was reasonably incurred by Applied to prove its claims
and thereby obtain the permanent injunction, was an abuse of discretion.
              On remand, the trial court shall evaluate the discovery and the motions for
which Applied seeks attorney fees and costs to determine whether they were reasonably
incurred by Applied to prove trade secret misappropriation and thereby enable it to seek
and obtain the permanent injunction.

                                              25
C. The Trial Court Did Not Err by Refusing to Award Expert Witness Fees Incurred by
Applied.
               Finally, Applied asserts the trial court erred by denying Applied’s posttrial
request—included as part of its motion for an award of attorney fees and costs—for an
                                                               12
award of nearly $400,000 in expert witness fees it incurred.        Citing this court’s opinion
in Thrifty Payless, Inc. v. Mariners Mile Gateway, LLC (2010) 185 Cal.App.4th 1050,
1066 (Thrifty Payless), Applied concedes that “[u]nder a contractual fee provision, expert
expenses are not necessarily recoverable where the agreement merely mentions ‘fees’ and
‘costs.’” But Applied points to the provision in the Agreement by which Jarrells agreed
that if injunctive relief were entered to restrain any actual or threatened breach of his
contractual obligations, he “shall be obligated to reimburse the company for the
reasonable attorneys fees, costs and expenses incurred in obtaining such relief.” (Italics
added.) From this, Applied argues the plain language of the Agreement reveals an intent
to authorize more than just standard recoverable costs under Code of Civil Procedure
section 1033.5. Applied notes that “expert fees are plainly a type of ‘expense.’”
               We agree that, where parties enter into an agreement for an award of “fees
and costs” without defining “costs,” the term is interpreted to embrace only awardable
costs under Code of Civil Procedure section 1033.5. (Ripley v. Pappadopoulos (1994) 23
Cal.App.4th 1616, 1619 [expert witness expenses were not recoverable costs where
parties’ written agreement authorized prevailing party on contract action to recover
“attorney fees and costs”]; see Benson v. Kwikset Corp. (2007) 152 Cal.App.4th 1254,
1279–1280.) We also agree parties to a contract may “knowingly and intentionally”
negotiate to recover more than is statutorily authorized by Code of Civil Procedure

12
     The trial court’s order did not explain why it declined to make such an award.

                                             26
section 1033.5’s list of recoverable costs. (Thrifty Payless, supra, 185 Cal.App.4th at
                  13
pp. 1066–1067.)
              The questions, then, are (1) whether the term “expenses,” as used in the
parties’ Agreement, includes out-of-pocket expenses incurred for expert witness fees and,
if so, (2) whether Applied properly sought such expenses under the Agreement as part of
its posttrial motion for attorney fees and costs, instead of pleading and proving them at
trial.
              We begin with the meaning of the term “expenses” in the Agreement.
Unless the meaning of contract language turns on the credibility of extrinsic evidence
(which is not the case here), interpretation of a contract is question of law. (Thrifty
Payless, supra, 185 Cal.App.4th at p. 1060.) “The language of a contract is to govern its
interpretation, if the language is clear and explicit, and does not involve an absurdity.”
(Civ. Code, § 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.” (Id.,
§ 1641.) “‘We must give significance to every word of a contract, when possible, and
avoid an interpretation that renders a word surplusage.’” (SantaFe Braun, Inc. v.
Insurance Co. of North America (2020) 52 Cal.App.5th 19, 24.)
              The Agreement provides for recovery of both costs and expenses. As noted
above, where a contract provides for payment of attorney fees and costs, it is well settled

13
   The other case relied on by Applied, Bussey v. Affleck (1990) 225 Cal.App.3d 1162, is
distinguishable. There, the appellate court held expert fees might be awarded under a
contract providing for an award of “‘all costs and expenses of collection including
reasonable attorneys’ fees.’” (Id. at p. 1164.) Such an award was permissible because
expert fees may be awarded under Code of Civil Procedure section 1033.5,
subdivision (b)(1) if the expert was ordered by the court; in that case, “[a]lthough the trial
judge did not expressly order the parties to present expert testimony, he openly ‘invited’
such testimony and suggested on at least five separate occasions prior to trial that such
testimony would be helpful in connection with calculations under the note.” (Bussey,
supra, at p. 1167.)

                                             27
the term “costs” is limited to recoverable costs under section 1033.5 of the Code of Civil
Procedure. Jarrells argues we should interpret the broader phrase “costs and expenses” in
the same way. This interpretation would render the term “expenses” redundant, and the
law tells us we must avoid interpretations rendering a word surplusage. Because the
ordinary meaning of “expense” is “something that is expended in order to secure a
benefit or bring about a result” (Webster’s 3d New Internat. Dict. (1986) p. 800), we
conclude that, as used in the parties’ Agreement, the term “expenses” means out-of-
pocket expenditures that do not come within the definition of statutory awardable costs in
section 1033.5. Thus, under the plain language of the parties’ Agreement, Applied is
entitled to recover not just the attorney fees and statutory costs it incurred to obtain the
injunctive relief, but also the other out-of-pocket expenses it incurred to obtain that relief.
              Jarrells correctly points out that in Thrifty Payless, the parties’ contract
specifically defined reasonable expenses to include attorney fees, “‘court costs’” and
“‘witness and expert fees.’” (Thrifty Payless, supra, 185 Cal.App.4th at p. 1065.)
Jarrells therefore asks us to find that parties who wish to contractually authorize an award
of expert fees must do so explicitly. But nothing in Thrifty Payless—or in any other case
cited to us by either party—holds that to authorize recovery of out-of-pocket expenses
beyond recoverable statutory costs, contracting parties must specify precisely what
expenses they are referring to. We see no basis to require parties who wish to agree to
authorize recovery of expenses beyond statutory costs to specifically enumerate every
category of additional “expenses” they intend their contract to embrace. The plain terms
of the Agreement here indicate the parties intended to authorize an award not limited to
statutorily recoverable costs, and their use of the unqualified and unambiguous term
“expenses” cannot be fairly interpreted to mean “some expenses” or “some expenses but
not expenses incurred for retained experts.” We therefore hold expert fees were
recoverable by Applied pursuant to the Agreement to the extent they were reasonable in
amount and reasonably incurred to obtain equitable relief.

                                              28
              We now turn to whether Applied could recover its expert witness fees as
part of its postjudgment motion for attorney fees and costs. Resolution of this issue is
necessary because Applied neither pleaded nor proved at trial the expert expenses it
seeks.
              The cases are split as to whether expenses recoverable under a contract
provision, rather than as costs under Code of Civil Procedure section 1033.5, must be
pleaded and proved or may be claimed through a posttrial motion for attorney fees.
(Cook v. Cook (In re Cook) (Bankr. C.D.Cal., Dec. 20, 2019, No. 2:15-bk-10768-RK)
2019 Bankr. Lexis 3866, *13, quoting Wegner et al., Cal. Practice Guide: Civil Trials
and Evidence (The Rutter Group 2019) ¶ 17:926.) The majority of cases take the former
view, holding such expenses must be pleaded and proved. “[W]hile the parties may agree
to allow recovery of expert witness fees by the prevailing party, this is a matter that must
be pleaded and proven at trial rather than submitted in a cost bill.” (Carwash of America-
PO v. Windswept Ventures No. 1 (2002) 97 Cal.App.4th 540, 544; see Arntz Contracting
Co. v. St. Paul Fire & Marine Ins. Co. (1996) 47 Cal.App.4th 464, 491–492, italics added
[recoverable costs not limited to those set out in Code Civ. Proc. § 1033.5 because the
contracts at issue “authorize[d] recovery of all ‘costs, charges and expenses’ and
litigation expenses were pleaded and proven pursuant to a procedure stipulated by the
parties”].)
              “Special contract damages are subject to pleading and proof in the main
action and cannot be recovered by mere inclusion in a memorandum of costs. [Citations.]
As an exception to this rule, the Legislature has chosen to provide for the recovery of
contractual attorney fees in a cost award. [Citations.] But the Legislature has declined to
adopt that procedure for the recovery of expert witness fees. [Citation.] Accordingly,
assuming expert witness fees may be recovered under a contractual provision, they must
be specially pleaded and proven at trial rather than included in a memorandum of costs.
Since plaintiffs did not specially plead and prove their right to recover expert witness fees

                                             29
under an appropriate provision of their contract, they were not entitled to such fees and it
was error to include such fees in the cost award.” (Ripley v. Pappadopoulos, supra, 23
Cal.App.4th at p. 1627, fn. omitted; see First Nationwide Bank v. Mountain Cascade, Inc.
(2000) 77 Cal.App.4th 871, 879 [expert fees should have been denied where prevailing
parties did not claim such fees as “‘necessary expenses’” under the contract at issue until
after judgment rendered].)
              The other view is represented by Thrifty Payless, which held it is
“unnecessary to specially plead and prove expert witness fees, at least in a case where
expert fees are explicitly included in the contract as recoverable costs.” (Thrifty Payless,
supra, 185 Cal.App.4th at p. 1067.) The present case differs in two significant ways from
Thrifty Payless, which we believe are dispositive. First, the contract at issue in Thrifty
Payless specified, “the prevailing party is entitled to ‘reasonable expenses,’ including
attorney fees, ‘court costs, witness and expert fees.’” (Id. at p. 1056, italics added.) As
Thrifty Payless explained, “if the point of specially pleading expert witness costs is to put
the other party on notice that such costs may be sought, then including a specific
provision in the contract is sufficient to provide notice.” (Id. at p. 1067, fn. 10.) Here,
the parties’ Agreement allows Applied to recover “expenses” but does not specify expert
witness fees. Second, Thrifty Payless was resolved via a nonsuit motion during trial, so it
would not have been possible for the prevailing party to prove its expert fees. (Id. at
p. 1054.) As that court explained: “[I]t seems counterproductive, if not slightly absurd,
to keep a jury empanelled after nonsuit has been granted for the sole purpose of
determining the reasonable value of expert witnesses it never heard testify at trial.” (Id.
at 1067.)
              We hold that, if expert witness fees are recoverable under a contractual
term providing for recovery of “expenses,” those fees must be pleaded and proven, and
they are not recoverable as costs under Code of Civil Procedure sections 1032 and
1033.5. Because Applied neither pleaded its entitlement to expenses (including expert

                                             30
fees) in its complaint nor proved the amount of such expenses at trial, the trial court did
not err by refusing to award them as part of the postjudgment award.
                                               V.
THE TRIAL COURT ERRED BY EXCLUDING FROM APPLIED’S DAMAGES CALCULATION THE
FEES INCURRED BY APPLIED’S FORENSIC COMPUTER EXPERT TO STOP OR MITIGATE THE
                             MISAPPROPRIATION
               At trial, Jarrells objected to Applied’s damages expert including $80,000 in
fees paid by Applied to its forensic computer expert in the calculation of Applied’s
damages. The trial court determined, “expert fees traditionally and typically are not an
item of damage that is recoverable in litigation, but rather, it’s a cost of the litigation,
which may or may not be recoverable at the end of the case by the prevailing party.” The
court therefore sustained Jarrells’s objection and ordered the damages expert not to
include the costs of the investigation in his damages calculation. At oral argument,
counsel for Applied acknowledged the court’s order did not prevent any witness from
testifying as to what work was performed by Applied’s employees or outside experts.
               “‘A trial court’s decision about the admissibility of evidence is ordinarily
reviewed under the abuse of discretion standard.’” (Segal v. Fishbein (2023) 89
Cal.App.5th 692, 708, fn. 14.)
               No California case addresses whether “actual loss caused by
misappropriation” (Civ. Code, § 3426.3, subd. (a)) includes the cost of investigating trade
secret misappropriation. The California UTSA allows the trial court to award as
recoverable costs “a reasonable sum to cover the services of expert witnesses, who are
not regular employees of any party, actually incurred and reasonably necessary in either,
or both, preparation for trial or arbitration, or during trial or arbitration, of the case by the
prevailing party.” (Civ. Code, § 3426.4.) But those costs may be awarded only if there is
a finding that “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 misappropriation

                                               31
exists.” (Ibid., italics added.) The fact that Civil Code section 3426.4 permits an award
of costs to include fees paid to retained experts to prepare for or testify at trial after a
“willful and malicious” finding is strong indication the Legislature did not intend such
fees to be awarded as “actual loss[es]” caused by misappropriation under section 3426.3,
subdivision (a).
                 Cases from other states interpreting their version of the Uniform Trade
Secrets Act (Uniform Act) are split on whether expert fees are awardable as “actual loss”
           14
damages.        A number of courts in other jurisdictions, applying the Uniform Act, have
drawn a distinction between expenses incurred to investigate a possible misappropriation
and expenses incurred to stop or mitigate the misappropriation, and have held only the
                                  15
latter are recoverable damages.        For example, in News America Marketing v. Marquis

14
   “The [California UTSA] is derived from the national [Uniform Act]. [Citation.] Case
law from other jurisdictions interpreting uniform statutory provisions can be helpful in
construing similar sections of the [California UTSA]. [Citations.] Accordingly, where
California law is silent, we shall refer to cases from other jurisdictions to the extent they
construe or explain provisions of the Uniform Act that are similar to the corresponding
sections of the [California UTSA].” (Ajaxo, Inc. v. E*Trade Financial Corp. (2010) 187
Cal.App.4th 1295, 1305, fn. 6.)
15
   Applied sometimes refers to “mitigation” and “remediation” interchangeably. But its
own forensic computer expert, Mike Bandemer of Berkeley Research Group (BRG),
described “[r]emediation [as] the process of identifying trade secrets within a company
and within their digital systems, whether those be computers, e-mails, networks, and then
isolating that data so that it can no longer be used within the company and employees no
longer have access to it. Properly preserving it and then deleting so that it’s no longer
available within the system.” In other words, he made clear that “remediation” relates to
efforts undertaken by a company that has improperly received trade secrets belonging to
another to identify and isolate those trade secrets so they can no longer be accessed or
used by its employees. Significantly, Bandemer did not testify BRG performed any
remediation work for Applied. (Indeed, since Applied was the entity whose trade secrets
were taken, not the company that improperly received them, there would be no occasion
for Applied to ask BRG to do so.) We have therefore used the term mitigation (not
remediation) to describe the efforts undertaken by Applied’s forensic computer expert to
determine where and how the stolen trade secrets were disseminated and how to retrieve
them so as to stop or mitigate the misappropriation.

                                               32
(86 Conn. App. 2004) 862 A.2d 837 (News America Marketing), applying Connecticut’s
version of the Uniform Act, the court held expenses “incurred by the plaintiff while
attempting to mitigate and reverse the harm actually caused by the defendant’s conduct”
would be recoverable as damages, but “‘out-of-pocket expenses’ suffered by the plaintiff
[that] amount to nothing more than costs incurred in the course of investigating whether
the plaintiff had suffered an injury as a result of [the defendant’s] misconduct” would not
be. (Id. at p. 846, original italics omitted, italics added.)
               In Tank Connection, LLC v. Haight (D.Kan. 2016) 161 F.Supp.3d 957
(Tank Connection), the district court concluded payments by the plaintiff to an outside
computer forensic company “to examine the laptop used by [the defendant] during his
employment with [the plaintiff] to see if it contained ‘evidence of data harvesting’” and
to a forensic expert agreed on by the parties to examine the defendant’s flash drives were
not damages caused by misappropriation under the Kansas version of the Uniform Act.
(Id. at p. 960 & fn. 2.) “These were investigative expenses incurred by [the plaintiff]
based on its suspicions that [the defendant] might have taken data. [The plaintiff] does
not deny that it undertook the forensic investigation to ascertain if there had been any
theft of its proprietary information and, if so, to demonstrate a basis for legal action
against [the defendant]. The court notes that plaintiff would have incurred the expenses
regardless of the outcome of the examination—i.e., regardless of whether any
misappropriation had occurred. Such expenses are not within the traditional realm of tort
damages. As in News [America Marketing], permitting the plaintiff to claim the cost of
its own investigation as compensable damages would effectively eliminate the statutory
requirement of ‘actual loss’ for an actionable misappropriation. This was an attempt to
find proof of data misappropriation, not a loss resulting from the misappropriation. The
21st Century [Sys. v. Perot Sys. Govt. Svcs. (Va. 2012) 726 S.E.2d 236] case is
distinguishable both because the expenses in that case were not objected to and because
they were incurred as part of a remedial effort to staunch what was known to be ongoing

                                               33
misappropriation of company data.” (Id. at p. 966.) The court granted summary
judgment in favor of the defendant on the ground the plaintiff failed to prove damages.
              Other jurisdictions have held that any expenses incurred to investigate
potential misappropriation are recoverable as “actual loss” damages. For example, in
Food Servs. of Am., Inc. v. Carrington (D.Ariz., Aug. 23, 2013, No. CV-12-00175-PHX-
GMS) 2013 U.S.Dist. Lexis 120194, the defendants moved for summary judgment on the
claim under Arizona’s version of the Uniform Act arguing, in part, the plaintiff could not
prove damages because there was no evidence the defendants used the plaintiff’s trade
secrets or disclosed them to others. (Id. at pp. *43–*44.) The district court concluded the
expenditure of company resources to investigate the alleged misappropriation constituted
damages. “[The plaintiff] has provided some evidence that it incurred expenses to
investigate Defendants’ misappropriation. Such expenses incurred as a direct result of
Defendants’ conduct are damages for the purpose of proving [the plaintiff]’s claim under
the [Arizona Uniform Act].” (Id. at p. *45.) It is unclear from the opinion whether some
or all of these expenses were for remediation purposes. “A plaintiff is generally entitled
to recover ‘any proven pecuniary loss attributable to the appropriation of the trade secret’
including ‘the costs of remedial effort.’ [Citation.] The Arizona Supreme Court has
stated that when the wrongful act of a defendant ‘makes it necessary to incur expense to
protect [the plaintiff’s] interest, such costs and expenses, . . . should be treated as the
legal consequences of the original wrongful act and may be recovered as damages.’”
(Id. at p. *44, quoting United States Fidelity & Guaranty Co. v. Frohmiller (Ariz. 1951)
227 P.2d 1007, 1009.)
              In SJ Medconnect, Inc. v. Boice (M.D.Fla., June 17, 2022, No. 3:20-CV-
903-MMH-JBT) 2022 U.S.Dist. Lexis 108429, the magistrate judge recommended entry
of default judgment against the defendant on multiple claims, including the federal
Defend Trade Secrets Act (18 U.S.C. § 1836) and the Florida Uniform Act.
(SJ Medconnect, Inc. v. Boice, supra, at pp. *5–*6.) The magistrate judge recommended

                                               34
the plaintiff be awarded, as damages, the money paid “to five internal employees and one
external consultant to investigate and remediate Defendant’s misappropriation of
Plaintiff’s trade secrets, which appears to have been largely successful in preventing
                                                 16
greater harm.” (Id. at p. *13, italics added.)        The district court adopted the magistrate
judge’s report and recommendations. (SJ Medconnect, Inc. v. Boice (M.D.Fla., July 28,
2022) 2022 U.S.Dist. Lexis 134529.)
               In 21st Century Sys. v. Perot Sys. Govt. Svcs., supra, 726 S.E.2d, several of
the plaintiff’s executives simultaneously left the company. The plaintiff immediately
hired an outside firm to conduct a computer forensics investigation to help the plaintiff
“‘figure out what exactly [was] going on.’” (Id. at p. 246.) The forensics firm charged
the plaintiff $371,002 for an analysis showing the defendants copied hundreds of files
from the plaintiff’s computers to external hard drives and those files were later copied to
the defendants’ computers at their new employer. (Id. at p. 244.) The costs of the
forensic analysis were included in the plaintiff’s damages award on a claim of
misappropriation under the Virginia version of the Uniform Act (among other claims).
The Virginia Supreme Court affirmed. “[W]e hold that the evidence at trial was
sufficient to demonstrate that the Defendants’ actions caused [the plaintiff] to initiate the
computer forensics investigation and that the trial court did not err when it refused to set
aside the jury’s award of $371,002 in computer forensics damages in favor of [the
plaintiff].” (Id. at p. 245.)
               And in Solvay Specialty Polymers USA, LLC v. Liu (N.D.Ga., Nov. 22,
2019, Case No. 1:18-cv-02120-ELR) the court awarded, as actual damages under the
Georgia version of the Uniform Act, “the costs [the plaintiff] incurred in engaging the

16
   The damages were awarded under the Defend Trade Secrets Act; the magistrate’s
recommendation notes: “The undersigned recommends that the Court need not undertake
redundant analysis for the same relief that is independently available under multiple
counts.” (SJ Medconnect, Inc. v. Boice, supra, at p. *13, fn. 6.)

                                             35
services of outside forensic experts to assess the extent of [the defendant]’s unauthorized
activity and potential damage to its system.”
              We agree with the analysis of News America Marketing and Tank
Connection and hold a plaintiff may recover, as damages on a claim of misappropriation
under the California UTSA, the costs of stopping or mitigating the misappropriation, but
not the costs of investigating to determine whether and how any misappropriation
occurred.
              Applied contends the expenses claimed here were incurred as part of an
effort to “‘staunch’” the ongoing misappropriation of Applied’s data, citing Tank
Connection, supra, 161 F.Supp.3d at page 966. At oral argument, counsel for Applied
agreed that expenses incurred solely to determine whether there had been a loss of trade
secrets would not be recoverable, while expenses incurred to determine where those trade
secrets went and how to get them back would be mitigation expenses and would be
recoverable. We have reviewed the evidence presented at trial and conclude it does not
support Applied’s argument that all of the expert witness fees at issue were incurred as
part of an effort to stop or mitigate the damage from Jarrells’s misappropriation.
              Mike Bandemer, of forensic consulting company BRG, testified BRG was
retained to perform a forensic examination, assist with an investigation, and testify in the
litigation. He explained: “I was contacted by counsel indicating that Applied Medical
had had concerns regarding a—large downloads of files from their system. And asked if
I could participate in assisting with an investigation into those downloads and other
potential breaches of their system to assess the damage and harm and to determine what,
if anything, was happening with Applied’s intellectual property, trade secrets.”
              Bandemer identified two phases of BRG’s investigative work for Applied.
The first phase involved determining whether trade secrets had been taken from Applied,
and identifying those trade secrets (Phase 1). The second phase involved determining

                                             36
how and where those trade secrets had been transferred in order for Applied to recover
them (Phase 2).
              In Phase 1, BRG examined Jarrells’s Applied laptop and the data loss
prevention log to see what Jarrells had downloaded into the “Good Stuff” folder and then
onto a thumb drive. As Bandemer testified, “at the time all the company knew was that
there was a download, they weren’t sure whether . . . and to what extent there was a
breach of their system. And that’s why they sought out assistance as to . . . how to
further investigate that, how to preserve the evidence and examine it to determine exactly
what happened.” BRG first prepared a forensic image of the hard drive from Jarrells’s
laptop issued by Applied. It also reviewed a data loss prevention log from Applied’s
system, which tracked the movement of data between the company’s network, Jarrells’s
laptop, and external sources such as thumb drives. BRG then compared the data
prevention log against the forensic image from the laptop. BRG concluded in this part of
its investigation that from the time Jarrells accepted an offer from Bruin to the time he
resigned from Applied, he copied thousands of files from his own laptop and from the
Applied network drive into a file on his laptop titled “Good Stuff,” and then copied all
those files onto a thumb drive. BRG concluded that, on Jarrells’s last day of work at
Applied, he deleted the “Good Stuff” folder and emptied the recycle bin on his laptop.
              BRG recovered the documents that had been deleted from Jarrells’s
computer and a memory stick. Gary Johnson, an employee of Applied, then reviewed the
recovered documents, initially to determine “the nature of the documents that were
taken.” After identifying whether the documents taken belonged to Applied or to Jarrells,
Johnson reviewed all of the Applied documents to categorize them as trade secret,
confidential, or something else. The purpose of categorizing the documents taken by
Jarrells was “to identify . . . which components of documents fit where and understand
sort of the magnitude, what was taken in each one of these categories so we can get it
stopped and get ahold of them and get them back.” BRG created a file structure system

                                             37
Johnson used to identify each document, categorize it, and make summary comments
about it.
              In Phase 2, BRG examined the thumb drives and Jarrells’s Bruin laptop to
see where the “Good Stuff” files ended up. Phase 2 of the investigation showed “a
purposeful transfer of . . . those files from the staged data on the Applied laptop to the
Kingston thumb drive, and then ultimately, to the Bruin laptop and other devices.”
              After the preliminary injunction was issued in this case, BRG examined the
laptop issued to Jarrells by Bruin, as well as a Kingston thumb drive and a PNY thumb
drive. BRG concluded Jarrells had transferred the files from his computer at Applied
onto the Kingston thumb drive, and then from that thumb drive onto his Bruin laptop.
              BRG prepared a report matching the files saved to the “Good Stuff” folder
to items Johnson had identified as Applied’s trade secrets. BRG also identified files
Jarrells deleted from his Bruin laptop after being served with Applied’s complaint and a
notice to preserve evidence.
              Bandemer testified the $80,000 bill from BRG to Jones Day was for the
two phases of the investigation work. But neither Bandemer nor any other witness
testified as to how much of the $80,000 was spent on the initial identification of whether
and what trade secrets Jarrells had taken from Applied (Phase 1) versus how much was
spent to identify what trade secrets had been transferred to Bruin (and how) so as to
enable Applied to take steps to get them back (Phase 2).
              We conclude Applied was entitled to seek damages for Phase 2 of the
investigative work by BRG to stop or mitigate the misappropriation (or continued
misappropriation) of Applied’s trade secrets. The trial court erred in refusing to allow
Applied’s damages expert to include the cost to Applied of BRG’s Phase 2 investigation
services in his trial testimony calculating the “actual losses” caused by the
misappropriation. We remand for this limited purpose.

                                             38
                                               VI.
 THE TRIAL COURT ERRED BY GRANTING NONSUIT ON WHETHER JARRELLS’S CONDUCT
                        WAS WILLFUL AND MALICIOUS
               At the close of Applied’s case-in-chief, Bruin moved for nonsuit on the
issue of exemplary damages on the ground there was no evidence of willful or malicious
misappropriation. Applied opposed the motion, arguing the evidence that Jarrells knew
of his obligation not to take Applied’s trade secrets but intentionally did so anyway in
conscious disregard of Applied’s rights and his own duties was sufficient to allow the
“willful and malicious” issue to go to the jury. The trial court granted the nonsuit as to
                           17
both Bruin and Jarrells.
               “We review the grant of nonsuit de novo.” (Holistic Supplements, LLC v.
Stark (2021) 61 Cal.App.5th 530, 541.) “A defendant is entitled to a nonsuit if the trial
court determines that, as a matter of law, the evidence presented by plaintiff is
insufficient to permit a jury to find in his favor. [Citation.] ‘In determining whether
plaintiff’s evidence is sufficient, the court may not weigh the evidence or consider the
credibility of witnesses. Instead, the evidence most favorable to plaintiff must be
accepted as true and conflicting evidence must be disregarded. The court must give “to
the plaintiff[’s] evidence all the value to which it is legally entitled, . . . indulging every
legitimate inference which may be drawn from the evidence in plaintiff[’s] favor.”’
[Citation.] A mere ‘scintilla of evidence’ does not create a conflict for the jury’s
resolution; ‘there must be substantial evidence to create the necessary conflict.’” (Nally
v. Grace Community Church (1988) 47 Cal.3d 278, 291, italics omitted.) Where the
plaintiff has the burden of proving a matter by clear and convincing evidence, both the

17
   In granting the motion, the trial court stated: “I appreciate [Applied’s] position . . . but
I do not see it that way. I think that if it were as you say, then every time someone
intentionally takes a trade secret, it would automatically result in punitive damages. And
that is not the law. There has to be something more. There has to be an element of ill
will or maliciousness, and I don’t think it exists in this case.”

                                               39
trial court and this reviewing court must view the evidence with that higher burden in
mind. (Hoch v. Allied-Signal, Inc. (1994) 24 Cal.App.4th 48, 59; see Barton v. Alexander
Hamilton Life Ins. Co. of America (2003) 110 Cal.App.4th 1640, 1644.)
              The California UTSA authorizes an award of exemplary damages for
                                                                            18
willful and malicious misappropriation. (Civ. Code, § 3426.3, subd. (c).)        It also allows
the trial court to award attorney fees to a plaintiff if the defendant’s misappropriation of
trade secrets was willful and malicious. (Civ. Code, § 3426.4.) Neither the Uniform Act
nor the California UTSA defines “willful and malicious.” In Ajaxo Inc. v. E*Trade
Group Inc. (2005) 135 Cal.App.4th 21 (Ajaxo), the appellate court considered the
meaning of “willful and malicious misappropriation.” (Id. at p. 26.) The court approved
the use of jury instructions using the definition of malice from Civil Code section 3294,
subdivision (c)(1) (“‘Malice’ means conduct which is intended by the defendant to cause
injury to the plaintiff or despicable conduct which is carried on by the defendant with a
willful and conscious disregard of the rights or safety of others”), and the definition of
willful from Penal Code section 7, subdivision 1 (“The word ‘willfully,’ when applied to
the intent with which an act is done or omitted, implies simply a purpose or willingness
to commit the act, or make the omission referred to. It does not require any intent to
                                                                    19
violate law, or to injure another, or to acquire any advantage”).

18
   “If willful and malicious misappropriation exists, the court may award exemplary
damages in an amount not exceeding twice any award made under subdivision (a) or (b).”
(Civ. Code, § 3426.3, subd. (c).)
19
   Insurance Code section 533 provides an alternate definition of willfulness: “An
insurer is not liable for a loss caused by the wilful act of the insured; but he is not
exonerated by the negligence of the insured, or of the insured’s agents or others.” In this
statute, willfulness “means ‘something more than the mere intentional doing of an act
constituting [ordinary] negligence.’” (Fire Ins. Exchange v. Abbott (1988) 204
Cal.App.3d 1012, 1019.) Rather, to be willful under Insurance Code section 533, an act
must be “done with a ‘preconceived design to inflict injury.’” (Clemmer v. Hartford
Insurance Co. (1978) 22 Cal.3d 865, 887, overruled on other grounds, Ryan v. Rosenfeld
(2017) 3 Cal.5th 124.)

                                             40
              Unlike Civil Code section 3294, which authorizes punitive damages on
clear and convincing evidence of oppression, fraud, or malice in the disjunctive, Civil
Code section 3426.3, subdivision (c) authorizes exemplary damages on evidence of
willful and malicious misappropriation in the conjunctive. Thus, applying the definitions
approved by the Ajaxo court, to obtain exemplary damages a plaintiff must prove by clear
and convincing evidence that the defendant’s acquisition, use, or disclosure of the
plaintiff’s trade secret was accomplished by an act implying a purpose or willingness to
commit the act and by conduct intended to cause injury or conduct that is despicable and
carried on with a willful and conscious disregard of the rights or safety of others.
              Here, the trial court focused on intent to harm and despicable conduct,
agreeing Applied could make the necessary showing of willfulness. On appeal, Applied
does not attempt to argue it offered sufficient evidence of Jarrells’s intent to cause it
harm: “Regardless whether Jarrells intended to harm Applied, there is substantial
evidence that his conduct was both despicable and in conscious disregard of Applied’s
rights.” Accordingly, the issue for us here is whether there was sufficient evidence of
despicable conduct carried on with a willful and conscious disregard of Applied’s rights
to send the issue to the jury. We conclude there was.
              “‘Despicable conduct’ is conduct that is ‘“so vile, base, contemptible,
miserable, wretched or loathsome that it would be looked down upon and despised by
ordinary decent people.”’ [Citation.] Such conduct has been described as having the
character of outrage frequently associated with crime. [Citation.] ‘Conscious disregard’
means ‘“that the defendant was aware of the probable dangerous consequences of his
conduct, and that he willfully and deliberately failed to avoid those consequences.”’
[Citation.] Put another way, the defendant must ‘have actual knowledge of the risk of
harm it is creating and, in the face of that knowledge, fail to take steps it knows will
reduce or eliminate the risk of harm.’” (Butte Fire Cases (2018) 24 Cal.App.5th 1150,
1159.)

                                              41
              Jarrells admitted he knew downloading and taking Applied’s documents
violated the Agreement. Jarrells took steps to conceal his acts of misappropriation by
erasing the contents of his Applied computer to prevent Applied from learning what he
had done. (See Learning Curve Toys, Inc. v. PlayWood Toys, Inc. (7th Cir. 2003) 342
F.3d 714, 730 [attempt to conceal misappropriation is evidence from which jury could
determine exemplary damages justified]; Advanced Fluid Systems, Inc. v. Huber
(M.D.Pa. 2018) 295 F.Supp.3d 467, 493 [efforts to cover up misappropriation, as well as
duration of misappropriation and consciousness of injury can be considered in
determining exemplary damages].)
              The evidence tends to show Jarrells targeted and purposefully
misappropriated Applied’s business plans, research and development documents, sales
strategies, training in formation, and customer pricing information. (See Ajaxo, supra,
135 Cal.App.4th at p. 67 [jury could conclude a “prolonged course of thievery” was
despicable conduct]; see also HTS, Inc. v. Boley (D.Ariz. 2013) 954 F.Supp.2d 927, 960
[exemplary damages appropriate where the defendant’s misappropriation of trade secrets
was “part of purposeful plan to build a competing business”].)
              Applied also points to evidence that Jarrells refused to return Applied’s
trade secrets even after the preliminary injunction was in place. Applied served Jarrells
with the complaint and notice to preserve on February 10, 2019. On the same day,
Jarrells began deleting Applied files from the laptop issued to him by Bruin. The trial
court signed the stipulated preliminary injunction on February 13, 2019, prohibiting
Jarrells or anyone acting in concert with him from “destroying, manipulating, or
otherwise altering any evidence” relating to the allegations in Applied’s complaint. In
other words, the preliminary injunction effectively ordered Jarrells not to do anything
with the documents he had taken. Nevertheless, BRG testified Jarrells either deleted
Applied files from his Bruin desktop computer or moved them onto a thumb drive on
February 13, 2019; Applied contends this occurred after the stipulated injunction was in

                                            42
place. (See Mattern & Associates, L.L.C. v. Seidel (D.Del. 2010) 678 F.Supp.2d 256, 271
[intentional removal of trade secrets and refusal to respond to demands to return
confidential information justified exemplary damages].)
              Based on all this, a reasonable jury could have concluded Jarrells’s
misappropriation was willful and malicious. The trial court therefore erred by granting a
nonsuit on this issue.
              Our conclusion is supported by caselaw from other states interpreting the
Uniform Act. The United States Supreme Court has held the phrase “willful and
malicious injury” in section 523(a)(6) of title 11 of the United States Code means “a
deliberate or intentional injury, not merely a deliberate or intentional act that leads to
                                                            20
injury.” (Kawaauhau v. Geiger (1998) 523 U.S. 57, 61.)           Relying on Kawaauhau v.
Geiger, the Fourth Circuit Court of Appeals held willful and malicious under the Alaska
Uniform Act requires more than intentional and purposeful misappropriation. “[E]ven if
[the plaintiff] is correct that the Alaska court decided [the defendant] intentionally and
purposefully misappropriated [the plaintiff]’s trade secrets, that is still not enough. It
must have taken the additional step of finding that [the defendant], in so doing, intended
for [the plaintiff] to be injured by that misappropriation.” (In re Muhs (4th Cir. 2019)
923 F.3d 377, 388; see Mattern & Associates, L.L.C. v. Seidel, supra, 678 F.Supp.2d at
p. 271, italics added [analyzing award of exemplary damages under the Delaware
Uniform Act using the state’s general law regarding punitive damages; “Delaware courts
have defined willfulness as ‘an awareness, either actual or constructive, of one’s conduct
and a realization of its probable consequences,’ and malice as ‘ill-will, hatred or intent to
cause injury’”].)

20
   11 United States Code section 523(a)(6) excludes from a bankruptcy discharge debts
“for willful and malicious injury by the debtor to another entity or to the property of
another entity.”

                                              43
             Jarrells argues any error in granting the nonsuit was necessarily harmless.
He reasons that, because the jury did not award any damages to Applied, no punitive
damages could be awarded. Jarrells is not wrong about that. The California UTSA
authorizes exemplary damages in an amount not exceeding two times the amount of
damages, unjust enrichment, or reasonable royalties. (Civ. Code, § 3426.3, subd. (c).)
Because the jury found no damages or unjust enrichment and the trial court did not award
reasonable royalties, we agree the court could not award exemplary damages. But this
could change on remand, in light of our finding that Applied may seek some portion of
BRG’s investigative expenses as damages.
             Moreover, Jarrells’s argument fails to address the other consequence of a
“willful and malicious” finding by the jury: A finding that trade secret misappropriation
was willful and malicious also permits an award of attorney fees under the California
UTSA. Thus, the trial court’s refusal to allow the jury to determine the issue was
prejudicial because it foreclosed any possibility Applied might be able to seek an award
of fees under Civil Code section 3426.3, subdivision (c).
             We reverse the trial court’s grant of nonsuit and remand for a jury trial on
whether Jarrells’s misappropriation was willful and malicious.

                                            44
                                       DISPOSITION
              The judgment is affirmed in part, reversed in part, and remanded as
follows:
              We affirm the trial court’s finding that Applied prevailed on its claim
against Jarrells for trade secret misappropriation, as well as the court’s issuance of a
permanent injunction against Jarrells following the jury’s finding of misappropriation.
We also affirm the court’s conclusion that the Agreement authorized an award of the
reasonable attorney fees, costs, and expenses Applied incurred to obtain injunctive relief.
              We reverse as to the amount of attorney fees and costs awarded by the trial
court and remand for further proceedings on that issue. More specifically, we reverse the
court’s blanket reduction of attorney fees and costs by 75 percent to reflect Applied’s
failure to prevail on three of its four causes of action, as well as the court’s blanket denial
of all attorney fees and costs Applied incurred for discovery and motion practice. We
remand for further proceedings to permit the court to exercise its discretion on each of
these issues consistent with the views expressed in this opinion and to determine the
appropriate amount of attorney fees and costs awardable under the Agreement. In
determining an appropriate amount of attorney fees and costs on remand, the court shall
exercise its discretion in applying all of the factors relevant to determining whether the
requested amounts were reasonably necessary and were reasonable in amount.
              We reverse the trial court’s ruling precluding Applied’s damages expert
from including any portion of the expert witness fees incurred by Applied’s forensic
computer expert BRG in the damages calculations he presented to the jury. On remand,
Applied may seek recovery of the BRG expert fees that can be proven to have been
incurred exclusively as to Phase 2 of its investigation into where the files and documents
Jarrells took from Applied ended up and how to recover, delete, or otherwise prevent
further misappropriation of those files and documents. We affirm the court’s ruling

                                              45
denying Applied’s postjudgment request for expert witness fees it incurred to obtain
injunctive relief.
               Finally, we reverse the trial court’s grant of nonsuit on whether Jarrells’s
conduct was willful and malicious and remand for a jury trial on that issue.
               In the interests of justice, because each party prevailed in part in this
appeal, neither party shall recover costs on appeal.

                                                   GOODING, J.

WE CONCUR:

O’LEARY, P. J.

GOETHALS, J.

                                              46