This happened in WA state, and the court of appeals gave a nice, reasoned decision about how to value property that means a lot to you, but not a lot to anybody else. It doesn't apply in CA because it is not CA law, but it might give an attorney a starting place to request damages. The Case is called "Bartell Drugs" and Google Scholar for WA courts will probably pull it up.
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Based on the fact you had to consult surveillance tape, does this mean you don't have a receipt or related paperwork? It sounds as though the company may have acted negligently, but the question will be what release of liability exists on the receipt/paperwork (and whether it's enforceable). You need to have an attorney review what you agreed to, if anything, and then evaluate the case. A lawsuit can't return picture pictures that are lost, however -- if there's liability, you may have to place a monetary value on the pictures.
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Unfortunately, no amount of money can replace the value of the photos to you. Most likely the contract between you and the store (your receipt or the packaging you placed the undeveloped film or negatives in) stated that by leaving them with the store you were assuming some risk. You could file in small claims court after sending a demand letter to the store by certified mail. I don't think an attorney will get involved due to the low and difficult to prove damages. Sorry for your loss and good luck! Keep trying to get them to find the negatives!
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You can sue, but the problem will be placing a value on the photo negatives.
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