Opinion
E070771
02-06-2020
SOUTH PACIFIC BIO MEDICAL, INC., Plaintiff and Respondent, v. PEGASUS MOLD, INC. et al., Defendants and Appellants.
MacCarley & Rosen and Mark MacCarley for Defendants and Appellants. Rosenstein & Associates, Robert B. Rosenstein, and Jeremy L. Hendrix for Plaintiff and Respondent.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Super.Ct.No. MCC1600103) OPINION APPEAL from the Superior Court of Riverside County. Raquel A. Marquez, Judge. Affirmed in part; reversed in part. MacCarley & Rosen and Mark MacCarley for Defendants and Appellants. Rosenstein & Associates, Robert B. Rosenstein, and Jeremy L. Hendrix for Plaintiff and Respondent.
This is a dispute arising from the loss or destruction of two molds used in manufacturing plastic parts. After a bench trial, the trial court awarded $45,500 in damages, plus prejudgment interest and attorney fees, to plaintiff and respondent South Pacific Bio Medical, Inc. (South Pacific). The judgment is against defendants and appellants Pegasus Mold, Inc. (Pegasus) and Daniel T. Chu; Chu is Pegasus's president and sole shareholder.
Pegasus and Chu contend here that the trial court erred by (1) applying the wrong measure for calculating South Pacific's damages; (2) awarding prejudgment interest that began accumulating on the wrong date; (3) imposing alter ego liability on Chu; (4) concluding that South Pacific was entitled to an award of attorney fees under the parties' agreements; and (5) awarding an unreasonable amount of attorney fees.
We affirm in part and reverse in part. We find no error in the trial court's calculation of South Pacific's damages or in its decision to impose alter ego liability on Chu. However, the trial court erred by awarding prejudgment interest that began accumulating too early, and by awarding contractual attorney fees in the absence of an applicable attorney fee clause. We remand the matter with instructions for the trial court to enter a new judgment accordingly.
I. BACKGROUND
Pegasus supplies both the injection molds used to make plastic parts and the plastic parts made from such molds. Chu is Pegasus's president and sole shareholder. Pegasus, a California corporation that operates out of Chu's home, does not itself either manufacture molds or produce parts from molds; those tasks are performed by subcontractors in China. South Pacific makes training devices for the health care industry. In 2008 and 2009, by means of a series of written agreements, South Pacific hired Pegasus to manufacture two molds, and to produce plastic parts from those molds. There was conflicting evidence at trial regarding whether South Pacific was aware that Pegasus merely arranged for manufacturing through a subcontractor, rather than doing the manufacturing itself.
The parties executed their first written agreement, entitled "Non-Disclosure and Work for Hire Agreement," (NDA) on October 3, 2008. As relevant here, the document recites that South Pacific "desires to have [Pegasus] work on and provide services relating to a product being developed by [South Pacific] ('the Product')," and that it is willing to disclose proprietary information to Pegasus "solely to enable [the parties] to discuss and explore the development of the product . . . ." The NDA defines "'Product or Development of Product'" to "refer to any business relationship established between [South Pacific] and [Pegasus] under which [Pegasus] provides any services to [South Pacific] relating to . . . manufacturing on behalf of [South Pacific]." It includes terms regarding the maintenance of confidentiality of any proprietary information South Pacific might share with Pegasus, and the return of such information to South Pacific "[u]pon conclusion of any services or discussions, or immediately at the request of [South Pacific]." It further provides that any product developed by Pegasus for South Pacific is to be considered "Work for Hire," and the property of South Pacific.
With the NDA in place, South Pacific shared with Pegasus certain "drawings and technical specifications." On October 24, 2008, Pegasus sent South Pacific two quotes, prepared by Chu, one regarding the manufacturing of a mold for a "Y Piece," and the other for manufacturing a mold for a "Leak Ring and Shutoff Valve." Both quotes specify that the mold "will be maintained free of charge as long as it is in our shop." South Pacific's president and chief executive officer, Mario Carvajal, testified at trial that this term was included at his request, to ensure that the molds "were going to be properly maintained while not in use." Both Carvajal and Chu understood that the phrase "in our shop" referred to the manufacturing facility in China associated with Pegasus, where the molds were to be made.
In deposition testimony, introduced into evidence at trial, Chu conceded that Pegasus does not have a shop, and that the agreement's reference to "our shop" was a "false statement." At trial, however, Chu contended that it was not a false statement, because Pegasus was working as "a team" with the subcontractor in China, and "we, as a team, me and my subcontractor in China, do have a shop." As noted, however, it is disputed whether South Pacific was aware Pegasus was working with a subcontractor, rather than its own "shop" in China.
The quotes do not specify that the molds were to be maintained by Pegasus indefinitely, until South Pacific demanded their return. There was, however, trial testimony that this was a common practice in the industry. The trial court found that the parties had implicitly agreed to such a term, and that finding has not been challenged here. South Pacific accepted both quotes by means of a single purchase order dated October 30, 2008. The total purchase price was $21,000.
Manufacture of the molds was completed by September 2009. By means of a purchase order dated September 2, 2009, South Pacific ordered a set of 1,000 of each of the parts to be produced from the molds. Those parts were produced, delivered, and paid for by the end of 2009.
On October 24, 2008, Pegasus had also provided South Pacific with a quote for producing plastic parts from the molds.
On May 20, 2014, Carvajal sent Chu an e-mail requesting the return of the molds, and asking about the logistics and costs of having them shipped. After Carvajal's repeated inquiries by e-mail and phone, Chu told Carvajal in a March 2015 phone call that he believed the molds had been either lost or discarded. The parties stipulated at trial that neither Pegasus nor Chu knew the location of the molds.
South Pacific filed suit in February 2016. The operative first amended complaint, filed in July 2017, asserted causes of action for (1) breach of contract; (2) breach of bailment contracts, misuse of bailed property, and failure to return bailed property; (3) declaratory relief; (4) conversion; (5) claim and delivery; and (6) fraud.
After a bench trial, the trial court found that the third and fifth causes of action were moot; since the molds were no longer in the defendants' possession, they could not be ordered to return them. The court ruled in the defendants' favor on the fourth and sixth causes of action, finding that the evidence "only established that [defendants] lost—or carelessly and inadvertently discarded the Molds—which does not support conversion, fraud, or punitive damages." These rulings have not been challenged on appeal.
On the first and second causes of action, however, the court ruled in favor of South Pacific, finding that Pegasus had a contractual obligation to maintain the molds and return them on demand, which it had breached. The court held that both Pegasus and Chu were liable for South Pacific's damages on an alter ego theory of liability, stating "it would be unfair if Pegasus' acts are treated alone, or those of Chu's alone—they are the same." The court awarded South Pacific damages "in the amount of $45,500, together with prejudgment interest in the amount of 10% per annum from May 20, 2014." On a postjudgment motion, the court awarded South Pacific attorney fees of $93,750, a sum reduced from the $196,352.50 requested.
II. DISCUSSION
A. Standard of Review
"The most fundamental rule of appellate review is that a judgment is presumed correct, all intendments and presumptions are indulged in its favor, and ambiguities are resolved in favor of affirmance." (City of Santa Maria v. Adam (2012) 211 Cal.App.4th 266, 286.) "In reviewing a judgment based upon a statement of decision following a bench trial, we review questions of law de novo." (Thompson v. Asimos (2016) 6 Cal.App.5th 970, 981 (Thompson).) We review the trial court's findings of fact, both express and implied, for substantial evidence. (Ermoian v. Desert Hospital (2007) 152 Cal.App.4th 475, 501.) "A single witness's testimony may constitute substantial evidence to support a finding. [Citation.] It is not our role as a reviewing court to reweigh the evidence or to assess witness credibility." (Thompson, supra, at p. 981.) B. Analysis
1. Calculation of Damages
Pegasus and Chu contend that South Pacific's damages should have been limited to $21,000, arguing that the trial court's $45,500 award failed to "conform to the limitations expressed" in Civil Code section 1840, and that $45,500 was "purely speculative, based upon inadmissible evidence . . . ." We reject these arguments.
Further undesignated statutory references are to the Civil Code.
California law defines a bailment as the delivery of a thing in trust for a purpose upon an implied or express contract. (Greenberg Brothers, Inc. v. Ernest W. Hahn, Inc. (1966) 246 Cal.App.2d 529, 531. (Greenberg Bros.).) Although lost profits are sometimes an appropriate element of contract damages, "there is no such assumption in respect of a bailment." (Id. at p. 534.) Using the terms depository and depositor in place of the common law terms bailee and bailor, section 1840 limits the amount of damages recoverable for the loss of goods through the negligence of a bailee: "The liability of a depository for negligence cannot exceed the amount which he is informed by the depositor, or has reason to suppose, the thing deposited to be worth." (§ 1840.)
Thus, under section 1840, where the bailor has declared the value of the thing deposited, the bailee's liability may be limited to that amount, no matter what its actual value. (See Windeler v. Scheers Jewelry (1970) 8 Cal.App.3d 844, 854-855 (Windeler) [under § 1840, "the amount of damages recoverable for the loss of goods through the negligence of a bailee is limited to the value thereof as disclosed by the owner, unless the bailee had reason to suppose that it was of greater or lesser value than it was in fact."].) Absent such a declaration of value, and particularly in the case of commodities, original cost price may be an appropriate measure of damages when there is no evidence the lost goods could not be replaced at cost. (See, e.g., Greenberg Bros., supra, 246 Cal.App.2d at p. 534 [bailee liable for original cost of lost merchandise, without "any allowance for profit," in the absence of evidence that it could not be replaced at that price].) Otherwise, original cost is not the appropriate measure of damages, but rather "actual value." (Windeler, supra, at p. 855 [finding plaintiff entitled to recover "actual value" of lost rings because there was no declaration of value and no evidence plaintiff gave defendant reason to believe the rings "were of any special value over or less than they were actually worth."].)
Here, South Pacific did not declare any value for the molds. In 2008, Pegasus agreed to manufacture the molds for a total price of $21,000, and to maintain them "in its shop" indefinitely at no additional cost. Nothing in the parties' agreements, however, expressly declares $21,000, or any other amount, to be the value of the molds in 2008, let alone years later, when they were discovered to have been lost.
The trial court was correct to conclude that South Pacific's damages should be the actual value of the molds, and that their actual value should be measured not by their original cost of manufacture, but the cost to have them replaced. There was no evidence that the molds had depreciated from their limited use or while in storage, or conversely that they had appreciated in value in any way. (See Windeler, supra, 8 Cal.App.3d at p. 855.) But they also were not fungible commodities with a discernable price on an open market. (Cf. Greenberg Bros., supra, 246 Cal.App.2d at p. 534.) Rather, as Pegasus was well aware from its negotiations and agreements with South Pacific, the molds had value only in their utility for production of certain parts, proprietary to South Pacific, as needed for the business. There was evidence at trial that it would cost substantially more than the original cost in 2008 to manufacture the molds. If the molds cannot currently be replaced for their original cost, an award in that amount would not adequately compensate South Pacific for Pegasus's failure to maintain the original molds as it had contracted to do.
There was some evidence that the molds were expected to be "capable of millions of cycles."
Furthermore, it was appropriate for the trial court to award South Pacific the cost of having the molds manufactured in California, rather than in China, with attendant delays. The parties contracted for Pegasus to maintain the molds indefinitely, and thus have them readily available for either production of parts or shipment to South Pacific upon demand. The actual value of the lost original molds, therefore, is equal to the amount it costs to make replacement molds available to South Pacific in a similarly expeditious fashion.
Finally, Pegasus's contention that the trial court's calculation of those damages was "purely speculative" is without merit. Defendants' damages expert testified that his company could build the molds in California for a total of $38,000. He also opined, however, that the $45,500 estimate provided to Carvajal by a different company was a "good quote." Defendants have offered no reasoned argument why the trial court might have been required to award the amount the defense expert suggested on the witness stand, rather than the estimate a third party provided.
We conclude that the trial court did not err in awarding South Pacific $45,500 in damages.
2. Prejudgment Interest
Defendants argue that the trial court erred by awarding prejudgment interest from the date that South Pacific first requested the return of the molds, May 20, 2014, instead of the filing date of this lawsuit, February 5, 2016. We agree.
Under section 3287, subdivision (a), a litigant may recover prejudgment interest on "damages certain, or capable of being made certain by calculation" from the day such damages are certain or capable of being made certain. "'It is the rule that if damages may be determined by reference to reasonably ascertainable market values, they are "capable of being made certain by calculation" within the meaning of [section 3287].'" (Cassinos v. Union Oil Co. (1993) 14 Cal.App.4th 1770, 1789, quoting Howe v. City Title Ins. Co. (1967) 255 Cal.App.2d 85, 88.) "[T]he court has no discretion, but must award prejudgment interest upon request, from the first day there exists both a breach and a liquidated claim." (North Oakland Medical Clinic v. Rogers (1998) 65 Cal.App.4th 824, 828.) But "prejudgment interest is not authorized under section 3287, subdivision (a) where the amount of the damages is either disputed or cannot be determined from information available to the debtor." (Warren v. Kia Motors America, Inc. (2018) 30 Cal.App.5th 24, 45; see also Lineman v. Schmid (1948) 32 Cal.2d 204, 212 (Lineman) [finding prejudgment interest not allowed "when damages cannot be computed except on conflicting evidence . . . because of the absence of established or reasonably ascertainable market prices or values."].)
Section 3287, subdivision (a) provides, in relevant part: "A person who is entitled to recover damages certain, or capable of being made certain by calculation, and the right to recover which is vested in the person upon a particular day, is entitled also to recover interest thereon from that day . . . ."
For example, in Lineman, our Supreme Court addressed the issue of prejudgment interest in the context of a breach of a contract to purchase certain specialty brands of flour. (Lineman, supra, 32 Cal.2d at p. 205.) The court observed that "there was an established market" for flour generally. (Id. at pp. 212-213.) Nevertheless, the court found that the claim in Lineman was unliquidated because the record showed there was no established market price for the contracted brands of flour produced from a special formula. (Ibid.) To determine the plaintiff's damages, the trial court therefore had to "select from conflicting evidence" regarding the specialty flour's value on the date of the defendant's breach. (Id. at p. 213.) On that basis, the court found that no award of prejudgment interest was permitted under former section 3287, which corresponds with subdivision (a) of the current version of section 3287. (Lineman, supra, at p. 213; see former § 3287 (enacted Stats. 1872); § 3287, subd. (a).)
The molds at issue here were not commodities with an established or reasonably ascertainable market value. Rather, they are specialized goods, the value of which was disputed by the parties. The damages caused by their loss or destruction could be determined by the trial court only by making a decision based on conflicting evidence. South Pacific's claim was therefore unliquidated, and no award of prejudgment interest was therefore authorized under section 3287, subdivision (a).
Where a claim is unliquidated, subdivision (b) of section 3287 allows the trial court to exercise discretion to award prejudgment interest "from a date prior to the entry of judgment . . . but in no event earlier than the date the action was filed." Defendants challenge the award of prejudgment interest only from before the date the action was filed. They do not argue that the trial court abused its discretion by awarding prejudgment interest from the date the action was filed, February 5, 2016, instead of some later date. We therefore will reverse the award of prejudgment interest prior to that date and order prejudgment interest calculated from that date.
3. Alter Ego
Defendants contend that "there is no legal basis" for the trial court's conclusion that the corporate veil should be pierced and Chu should be held individually liable, together with Pegasus, for the judgment. Not so.
There are two requirements for disregarding the corporate entity, both of which "must be found to exist before the corporate existence will be disregarded . . . ." (Misik v. D'Arco (2011) 197 Cal.App.4th 1065, 1073 (Misik).) The first is that there is sufficient unity of interest and ownership that the separate personalities of the individual and the corporation no longer exist. (Webber v. Inland Empire Investments, Inc. (1999) 74 Cal.App.4th 884, 900 (Webber).) There are many factors to be considered regarding unity of interest and ownership, including "one individual's ownership of all stock in a corporation; use of the same office or business location; commingling of funds and other assets of the individual and the corporation; an individual holding out that he is personally liable for debts of the corporation; identical directors and officers; failure to maintain minutes or adequate corporate records; disregard of corporate formalities; absence of corporate assets and inadequate capitalization; and the use of a corporation as a mere shell, instrumentality or conduit for the business of an individual." (Misik, supra, at p. 1073.) "This list of factors is not exhaustive, and these enumerated factors may be considered with others under the particular circumstances of each case." (Ibid.) "'"No single factor is determinative, and instead a court must examine all the circumstances to determine whether to apply the doctrine.""' (Ibid.)
The second requirement for disregarding the corporate entity is that treating the acts as those of the corporation alone will sanction a fraud, promote injustice, or cause an inequitable result. (Webber, supra, at p. 900.) "The test for this requirement is that if the acts are treated as those of the corporation alone, it will produce an unjust or inequitable result." (Misik, supra, 197 Cal.App.4th at p. 1073; see also Shaoxing County Huayue Import & Export v. Bhaumik (2011) 191 Cal.App.4th 1189, 1198 (Shaoxing) ["In applying the alter ego doctrine, the issue is not whether the corporation is the alter ego of its shareholders for all purposes, or whether the corporation was organized for the purpose of defrauding the plaintiff, but rather, whether justice and equity are best accomplished in a particular case, and fraud defeated, by disregarding the separate nature of the corporate form as to the claims in that case."].)
"[T]he conditions under which the corporate entity may be disregarded vary according to the circumstances in each case and the matter is particularly within the province of the trial court." (Alexander v. Abbey of the Chimes (1980) 104 Cal.App.3d 39, 46.) "This is because the determination of whether a corporation is an alter ego of an individual is ordinarily a question of fact." (Ibid.) The trial court's ruling on the issue therefore will not be disturbed if it is supported by substantial evidence. (Id. at p. 47.; NEC Electronics, Inc. v. Hurt (1989) 208 Cal.App.3d 772, 777.)
Here, on the first prong of the analysis, it is undisputed that Chu is the sole shareholder of Pegasus. Pegasus is operated out of Chu's home. Chu has comingled the assets of Pegasus with his individual assets in various ways, including by failing to keep records of payments from Pegasus to Chu; taking withdrawals from Pegasus's funds, with the withdrawals booked on the corporation's general ledger as "loan repayments," even though he was not owed any amount; causing the company to borrow money in its own name, but taking the proceeds for his personal use; paying personal expenses through the company, but not reporting the payments as income, on the theory that the "IRS doesn't care"; and operating Pegasus out of his house rent free and without any formal rental agreement. Chu testified at trial that he takes money out of the corporation for his personal use at his own initiative, without any approval of a board of directors, "[w]hen Pegasus has money." The trial court found that "Chu ignored legal formalities that corporations must follow," and, in briefing, defendants have conceded that Chu "did not do a great job of maintaining corporate minutes and books . . . ." It is an understatement to say that substantial evidence supports the trial court's conclusion that there is sufficient unity of interest and ownership between Pegasus and Chu to justify piercing the corporate veil.
There is also ample support for the trial court's conclusion on the second prong of the analysis, that it would be "unfair" if the failure to maintain South Pacific's molds was attributed only to Pegasus, and not Chu. As noted, Chu admitted at trial that he routinely withdrew funds from Pegasus when it "has money," with no regard for corporate formalities. It was not unreasonable for the trial court to infer that any Pegasus assets that could be used to satisfy a judgment would likely be withdrawn or otherwise diverted to avoid collection. The trial court appropriately concluded that justice and equity would be best accomplished, and fraud defeated, by disregarding the separate nature of the corporate form here. (See Shaoxing, supra, 191 Cal.App.4th at p. 1198.)
4. Attorney Fees
On a postjudgment motion, South Pacific sought, and the trial court granted, an award of attorney fees pursuant to a provision in the NDA allowing the prevailing party to recover attorney fees in "any action at law or in equity" that is "necessary to enforce [or] interpret the terms of this Agreement." Pegasus and Chu argue that this provision was not an appropriate basis for the attorney fee award because this lawsuit—at least with respect to the claims on which South Pacific prevailed—was not an action about enforcing or interpreting the terms of the NDA, but rather arising from the later, separate agreements regarding manufacture and maintenance of the molds. We agree.
The attorney fee clause at issue is contained in a paragraph under a heading entitled "Equitable Relief," which provides as follows: "[Pegasus] acknowledges that a breach of this Agreement is likely to result in irreparable and unreasonable harm to [South Pacific], and that injunctive relief, as well as damages, would be appropriate. If there is a breach or threatened breach by [Pegasus], [South Pacific] shall be entitled to an injunction upon application without the necessity of posting and bond. If any action at law or in equity is necessary to enforce or interpret the terms of this Agreement, the prevailing party shall be entitled to reasonable attorneys' fees and costs in addition to any other relief to which it may be entitled."
Although we generally review an award of attorney fees for abuse of discretion, we independently review the legal basis for an attorney fee award. (Mountain Air Enterprises, LLC v. Sundowner Towers, LLC (2017) 3 Cal.5th 744, 751 (Mountain Air).) In some circumstances, the legal basis for an award may be a mixed question of fact and law, warranting a deferential standard of review. (Ibid.) But the interpretation of a contract is subject to de novo review where, as here, the interpretation does not turn on the credibility of extrinsic evidence. (Paul v. Schoellkopf (2005) 128 Cal.App.4th 147, 151.)
The only potentially applicable attorney fee provision here is the one in the NDA; the parties' other written instruments contain no attorney fee provision. The propriety of awarding attorney fees therefore stands or falls on whether the terms of the NDA fees clause authorize this fee award. To this end, we first consider whether the NDA is part of the same transaction as the quotes and purchase order regarding the manufacture and maintenance of the two molds, which conceivably could bring this dispute within the terms of the NDA. This presents a pure question of law subject to de novo review. (Mountain Air, supra, 3 Cal.5th at p. 751; R.W.L. Enterprises v. Oldcastle, Inc. (2017) 17 Cal.App.5th 1019, 1025-1026 (R.W.L. Enterprises).)
"'It is a familiar rule . . . that where several papers covering the same subject matter are executed by . . . the same parties . . . , all are to be considered together, and with the same effect as if all had been incorporated in one document."' (Versaci v. Superior Court (2005) 127 Cal.App.4th 805, 814 (Versaci), quoting McAuliff v. McFadden (1919) 42 Cal.App. 505, 511.) This principle is codified in section 1642, which provides that '"[s]everal contracts relating to the same matters, between the same parties, and made as parts of substantially one transaction, are to be taken together."' The principle '"is most frequently applied to writings executed contemporaneously, but it is likewise applicable to agreements executed by the parties at different times if the later document is in fact a part of the same transaction.'" (Versaci, supra, at p. 814.) "To be construed together, the separate instruments must be 'so interrelated as to be considered one contract.'" (R.W.L. Enterprises, supra, 17 Cal.App.5th at p. 1028.)
Although the statutory language refers to "contracts," it has been interpreted to "apply to instruments or writings that are not on their own contracts." (R.W.L. Enterprises, supra, 17 Cal.App.5th at p. 1027.) --------
We find that the NDA is not so interrelated with the parties' later-executed written instruments as to be considered one contract. The NDA makes reference to the possibility of Pegasus and South Pacific entering into a "business relationship" in the future. That reference, however, does not clearly and unequivocally incorporate the parties' later negotiations and agreements into the NDA. (See Versaci, supra, 127 Cal.App.4th at pp. 817 ["mere reference" in contract to future "'mutually agreed upon goals and objectives'" (id. at p. 811) does not "clearly and unequivocally evidence the parties' intent to incorporate the yet to be determined goals into the contract" (id. at p. 817)].) To the contrary, the topic of the NDA was, on its own terms, the protection of South Pacific's proprietary information, and an agreement regarding ownership of any hypothetical product designed or manufactured based on that proprietary information, to "enable [the parties] to discuss and explore" the possibility of a future business relationship. Any actual business relationship that comes out of such discussions is contemplated as the product of a separately negotiated transaction.
This established, the wording of the attorney fee provision of the NDA mandates reversal of the fee award. The NDA fee provision does not apply to any and all disputes between the parties, or even any dispute regarding a "'Product or Development of Product'" as that term is defined in the NDA. Rather, it applies to an action to enforce or interpret "this Agreement." Nothing about the wording or context of the provision demonstrates any intent to extend the recovery of attorney fees to litigation over provisions of any other agreement, such as the parties' later exchange of quotes and purchase order regarding the molds. (See Pellegrini v. Weiss (2008) 165 Cal.App.4th 515, 534-535 [attorney fee provisions in two instruments did not apply to litigation over a third, where the fee provisions applied only to actions concerning "this Agreement"].) South Pacific's claims here—at least the ones on which it prevailed—relate to Pegasus's breach of the obligation, specified in the quotes for the molds, to maintain them "as long as [they are] in our shop," not to any provision of the NDA.
Because we conclude that the attorney fee provision in the NDA does not apply at all, we need not and do not decide whether the amount of fees awarded to South Pacific by the trial court was reasonable. In the absence of an applicable attorney fee provision, no award of attorney fees was appropriate.
III. DISPOSITION
The judgment is affirmed in part and reversed in part as follows: The trial court's award of prejudgment interest during the period from May 20, 2014, to February 4, 2016, and its award of attorney fees, are reversed. The judgment is affirmed in all other respects. The matter is remanded for the trial court to enter a new judgment accordingly, that is, a judgment against both Pegasus and Chu, awarding South Pacific damages in the amount of $45,500, together with prejudgment interest in the amount of 10 percent per annum from February 5, 2016. The parties shall each bear their own costs on appeal.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
RAPHAEL
J.
We concur:
MCKINSTER
Acting P. J.
MENETREZ
J.