Trial Court’s Finding of “No Bad Faith” Was Deferred to on Appeal.
For appellate practitioners and litigators contemplating an appeal, you by now should know that most factual findings--even those than can be implied--usually will uphold a judgment or trial court determination. This substantial evidence rule and its close cousin, the abuse of discretion standard, are beacons of appellate practice, and those beacons were dispositive in the next case we discuss.
The lower court, although granting summary adjudication for the defense on a trade secrets misappropriation count, nonetheless did not find it was brought or prosecuted in bad faith, denying the defense request for an award of attorney’s fees under Civil Code section 3426.4.
The defense lost its appeal of this fee denial in Westside Athletic Club, LLC v. Farmer, Case No. D057023 (4th Dist., Div. 1 July 28, 2011) (unpublished).
The reason was that there was conflicting evidence from which the lower court could deduce that no bad faith was associated with the trade secrets misappropriation claim. Continuances requested by plaintiff related to discovery problems, and plaintiff even requested mediation--with the latter showing plaintiff’s willingness to avoid costly, prolonged litigation.
Defendant asked the appellate court to adopt a rule by which an adverse ruling (objective specious prong) and an inference of plaintiff’s subjective bad faith would shift the burden to plaintiff to rebut the inference. The appellate court declined the invitation to do so, finding that the two-prong (objective/subjective) test in Gemini Aluminum Corp. v. California Custom Shapes, Inc., 95 Cal.App.4th 1249, 1262 (2002) was workable and “that courts routinely evaluate bad faith in different contexts” such that it could be done in a fees motion under section 3426.4.