Page 1
Court of Appeal:
Attorney Fees Due for Success Opposing Judgment Revision
By Kimber Cooley, associate editor
Div. Four of this district’s Court of Appeal held yesterday that a plaintiff—which in 2016 was awarded $2.8 million, as well as on-going royalties and $882,154.80 in costs against a company that stole certain trade secrets to make competing products in breach of an agreement—was entitled to recover fees for its successful opposition years later to a motion to modify the judgment to eliminate future payments.
Such action, it held in an unpublished opinion, qualifies as ‘enforcing’ a judgment.
At issue is an application of Code of Civil Procedure §685.040, which provides:
“[A] judgment creditor is entitled to the reasonable and necessary costs of enforcing a judgment….Attorney’s fees incurred in enforcing a judgment are included as costs collectible under this title if the underlying judgment includes an award of attorney’s fees to the judgment creditor….”
The dispute arose after plaintiff Pine Valley Inc. successfully sued a vendor it had hired to make its frozen food packages, according to certain secret recipes. The vendor, Ajinomoto North America Inc., stole the instructions and used them to offer competing fried rice products to Pine Valley’s main customer, Trader Joe’s.
For over a decade, Pine Valley had sold more than $50 million worth of its frozen fried rice products to Trader Joe’s but the grocery giant ended their relationship in March 2013 when it opted instead to purchase competing offerings from the defendant. The plaintiff’s complaint asserts, among other causes of action, breach of contract and a violation of California’s Uniform Trade Secrets Act.
Royalties Ordered
Following a jury trial, the court required the defendant to pay, in addition to certain damages, royalties on sales of all fried rice packages produced using Pine Valley’s recipes for as long as such products are sold. The ensuing judgment said that Ajinomoto could be relieved from the royalty payments by submitting evidence that it was no longer using the plaintiff’s trade secrets; the judgment was affirmed on appeal.
Ajinomoto later moved to amend the judgment to dissolve the royalty provision, arguing—as it had in the trial court and in the previous appeal—that the recipes had become generally known to the public and that the ongoing payments should be limited to two years because that is how long it would have taken it to develop its own fried rice formula.
The defendant pointed to trial exhibits which it says made the “secret” recipes a matter of public knowledge. Pine Valley opposed the motion and requested attorney fees under §685.040.
Then-Los Angeles Superior Court Judge Yolanda Orozco (now retired) denied the motion in May 2020, rejecting the notion that the trade secret was rendered public by the public court filings, which she determined were unlikely to be seen by a large audience. She also denied fees to the plaintiff, finding that Pine Valley’s opposition was not an action to “enforce” the judgment, within the meaning of §685.040.
Orozco then appointed a receiver to determine whether Ajinomoto was using the trade secrets in rice products sold to a variety of stores.
Acting Presiding Justice Audrey B. Collins authored yesterday’s opinion affirming the order denying relief from the royalty scheme but reversing as to fees. Justice Audra Mori and Los Angeles Superior Court Judge Nicholas F. Daum, sitting by assignment, joined in the opinion.
Broad Interpretation
Noting that “enforcement” is not defined in the code, Collins pointed out that the California Supreme Court has said that the term should be interpreted broadly. The jurist pointed to jurisprudence affirming the award of attorney fees under §685.040 to a party who sought to defend a judgment against discharge in bankruptcy and one who prosecuted a separate fraudulent transfer action.
Turning to the present matter, she opined:
“If a judgment creditor is entitled to collect postjudgment attorney fees under Code of Civil Procedure section 685.040 for defending its judgment from attack in a separate proceeding,…it stands to reason that a judgment creditor is entitled to seek such fees when the judgment is attacked in the same proceeding in a postjudgment motion to modify.”
Ajinomoto contends it was not “attacking the judgment” but was only “attempting to establish that changed circumstances entitled it to be ‘relieved’ of the royalty just as the judgment contemplated would happen someday.”
Unpersuaded, Collins wrote:
“This argument is meritless. The judgment stated that Ajinomoto ‘may be relieved from the obligations’ relating to the royalty ‘by proving to the Court’s satisfaction’ that Pine Valley’s trade secrets ‘are no longer being used’ in Ajinomoto’s products. Despite insisting that creating unique fried rice recipes takes only one to two years, Ajinomoto has never made an effort to show that it is no longer using Pine Valley’s trade secrets. It is a misrepresentation of the record to assert that the court ‘contemplated’ that Ajinomoto could be ‘relieved’ of its royalty obligations in the future by repeating arguments that were rejected by the jury, the trial court, and the appellate court.”
The case is Pine Valley Inc. v. Ajinomoto North America Inc., B321812.
Representing Pine Valley on appeal were Joseph S. Klapach of Klapach & Klapach in Sherman Oaks, William W. Bloch of the mid-Wilshire firm of LA Superlawyers, and Gary K. Salomons of Sherman Oaks’s Salomons Law Group. Acting for Ajinomoto were Sierra Elizabeth, Christopher Lawless, and Kevin Bendix of Los Angeles County offices of Kirkland & Ellis and Cynthia E. Tobisman, Alana H. Rotter and Rachel A. Beyda of the Los Angeles County offices of Greines, Martin, Stein & Richland.
Copyright 2025, Metropolitan News Company