1

Filed 6/16/16 CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIRST APPELLATE DISTRICT

DIVISION FIVE

JOHN HERBERT INNES, as Trustee, etc., et al., Plaintiffs and Appellants,

v. DIABLO CONTROLS, INC., Defendant and Respo ndent. A145528

(Alameda County Super. Ct. No. HG15761845)

John Herbert Innes and Catherine Lynne Innes, as Trustees of the Innes Family

Trust UDT April 22, 19 9 2, appeal the trial court’s order denying their petition to compel
inspe ction of certain records of respondent Diablo Controls, Inc. (Diablo Controls)
pursuant to Corporations Code , section 1601

. 1 We agree with Jara v. Suprema Meats,

Inc. (2004) 121 Cal.App.4th 1238 ( Jara ) that section 1601 requires that the records be

made a vailable for inspection at the office where such records are kept. Further, we
reject appellants’ contention that Jara does not govern records like those in this case that

are maintained out

- of

- state. Accordingly, w e affirm.

BACKGROUND
Appellants are sh areholders of Diablo Controls , a California c orporation

. In
February 2015, appellants submitted a written demand to inspect Diablo Controls’
accounting books and records; the minutes of proceedings of shareholder s , the board, and

1 All undesignated section references are to the Corporations Code.2

committees of the board; and certain other records. 2 The demand requested the
inspection take place at Diablo Controls’ California office. The requested records were

located in a Diablo Controls office in Illinois

. Diablo Controls ship ped records to

California and made them ava ilable for appellants’ inspection at its counsel’s California

office

. Appellants found the records available for inspection to be incomplete and filed
the instant petition for a writ of mandate in March 2015 . Appellants argued Diablo

Controls’ failure to make all requested records available for inspection violated section

1601

. After the petition was filed , Diablo Controls mailed appellants copies of additional

records and made other records available for inspection at its counsel’s California office

. A ppellant s claimed the records were still incomplete

. Diablo Controls opposed the petition on the ground, inter alia, that section 1601
only obligated it to make the records available for inspection at its Illinois office

. The
trial court agreed in an order den ying the petition and dismissing the action. The court ’s

order noted that if Diablo Controls failed to make records available for inspection at its
Illinois office, appellants could file a new writ petition

. This appeal followed. 3

DISCUSSION

S ection 1601 provides , in relevant part : “ (a) The accounting books and records
and minutes of proceedings of the shareholders and the board and committees of the
board of any domestic corporation, and of any foreign corporation keeping any such

records in t his state or having its principal executive office in this state, shall be open to
inspection upon the written demand on the corporation of any shareholder

. . . at any reasonable time during usual business hours, for a purpose reasonably related to such

h older ’ s interests as a shareholder

. . . . [¶] (b) Such inspection by a shareholder

. . . may

2 Background regarding the dispute between the parties and related litigation is not releva nt to this appeal.

3 “An order denying a petition for writ of mandamus and dismissing the action is considered an appealable judgment.” ( Bernard v. City of Oakland (2012) 202 Cal.App.4th 1553, 1558, fn. 3.)3

be made in person or by agent or attorney, and the right of inspection includes the right to
copy and make extrac ts.

. . . ” Appellant s argue section 1601 obligat es Diablo Controls to make the specified records available for inspection in California. We disagree. 4

“ ‘ As in any case involving statutory interpretation, our fundamental task here is to determine the Legislature’ s int ent so as to effectuate the law’s purpose.’ [Citation.] We
begin by examining the statutory language because the words of a statute are generally
the most reliable indicator of legislative intent. [Citations.] We give the words of the
statute their ordinary and usual meaning and view t hem in their statutory context.
[Citation.] We harmonize the various parts of the enactment by considering them in the
context of the statutory framework as a whole. [Citations.] ‘If the statute’ s text evinces
an unmistakable plain m eaning, we need go no further.’ ” ( In re C.H. (2011) 53 Cal.4th
94, 100 .) 5
Section 1601 requires only that the identified records “ shall be open to inspection

. . . at any reasonable time during usual business hours

. . . .” The statute does not specify

where the records shall be made open to inspection

. As Jara concluded “ [t]he statutory langu age requiring that the records ‘ be open to inspection .

. . at any reasonable time
during usual business hours ’ clearly implies that they may be inspected at the office

4 Because we affirm the trial court’s order on t his ground, we need not reach Diablo Controls’ alternative argument that appellants were not entitled to writ relief because they had an adequate remedy at law. Accordingly, we deny Diablo Controls’ December 30, 2015 request for judicial notice of documen ts related to this argument.

5 Appellants suggest we are not bound by our interpretation of the statute, quoting In re Reno (2012) 55 Cal.4th 428, 522, for the proposition that “ ‘ “ ‘[c] ourts have inherent
power .

. . to adopt any suitable method of pract ice, both in ordinary actions and special proceedings, if the procedure is not specified by statute or by rules ad opted by the Judicial Council.’ ” ’ ” Our inherent power to adopt litigation procedures does not authorize us to create substantive sharehold er rights beyond those expressed in the Corporations Code. ( Doe v. City of Los Angeles (2007) 42 Cal.4th 531, 545 [“in construing this, or any statute, we may not broaden or narrow the scope of the provision by reading into it language that does not appea r in it or reading out of it language that does”].)4

where the re cords are kept .” ( Id. at p. 1263 , i talics added [ holding § 1601 does not
require corporation to copy records and send them to shareholder] .)
Appellants attempt to distinguish Jara on the ground that the corporation in that

case apparently kept its reco rds in a California office. Appellants argue Jara does not
govern cases involving records maintained out of state, and in such cases the inspection

must take place in California

. We disagree. There is no basis in the statutory language to
impose such a requirement. In fact, the statute contemplates there will be records subject
to inspection which are kept out of state: it applies to “ any foreign corporation keeping
any such records in this state or having its principal executive office in this state

. ”
(§ 1601, subd. (a), italics added.) Th is language encompasses a foreign corporation
which has its principal executive office in California but does not keep any of the

identified records in California . Yet the statute makes no provision that the records be
brought in state for the inspection.

Moreover

, a different section of the Corporation s Code do es make such provision.

Section 213 provides: “ Every corporation shall keep at its principal executive office in
this state, or if its principal executive o ffice is not in this state at its principal business
office in this state, the original or a copy of its bylaws as amended to date, which shall be
open to inspection by the shareholders at all reasonable times during office hours. If the
principal executi ve office of the corporation is outside this state and the corporation has
no principal business office in this state, it shall upon the written request of any
shareholder furnish to such shareholder a copy of the bylaws as amended to date.”

Section 213 s pecifies the bylaws must be either open to inspecti o n in California or
furnished to a shareholder on request. “ ‘ “[W]here a statute, with reference to one
subject contains a given provision, the omission of such provision from a similar statute

concernin g a related subject .

. . is significant to show that a different intention

existed.” ’ ” ( People v. Cottle (2006) 39 Cal.4th 246, 254.) Section 213 therefore
confirms our interpretation of section 1601, which contains no similar provision.
Appellants a nd Diablo Controls dispute whether Diablo Controls’ principal

business office is located in California or Illinois. We see no relevance to this debate.5

Appellants have identified no authority requiring a corporation to keep the section 1601

records in it s principal business office. In contrast, other statutes do specify where

certain corporate records must be kept. ( § 213 [ corporation shall keep bylaws “ at its
principal executive office in this state, or if its principal executive office is not in this
state at its principal business office in this state ,” or else furnish them to shareholders on

request ] ; § 1500 [corporation “shall keep at its principal executive office, or at the office
of its transfer agent or registrar, a record of its shareholders ”]

. ) 6 Even assuming Diablo
Controls has a California principal business office, appellants have not shown it must

maintain the section 1601 records at that location

. Appellants also argue Diablo Controls agreed to bring the records to California.
Any such agreement has no bearing on whether appellants are entitled under section 1601

to a court order compelling Diablo Controls to do so.
Appellant s argue that, under the interpretation of the statute we adopt

, a corporation could intentionally avoid the inspe ction authorized by section 1601 by
sending the records far away. Jara noted a similar concern about “ corporate action
calculated to thwart exercise of the rights [section 1601] extends to shareholders, i.e.,

. . . an action impeding the process of inspec tion. The statute should be construed so as

‘ “ to effectuate the purpose of the law. ” ’ ” ( Jara , supra, 121 Cal.App.4th at p. 1264.)
We agree that maintaining the records in a remote location to intentionally impede
inspection would be contrary to the p urpose of section 1601. However, there is no
evidence of such obstruction here. To the contrary, Diablo Controls voluntarily and at its
own expense transported many of the requested documents to California for appellants’
inspection. In addition, appell ants have not allege d that requiring them to inspect the

records in Illinois will preclude their ability to exercise their section 1601 inspection
rights.

6 Notably, section 1500 specifies corporations “shall keep adequate and correct books and records of account and shall keep minutes of the proceedings of its shareholders, board and committees of the boar d,” but does not specify where such records shall be kept.6 DISPOSITION

The order is affirmed. Respondent is awarded its costs on appeal.

SIMONS, J.

We concur.

JONES, P.J.

BRUINIERS, J.

( A145528 )7

Superior Court of Alameda County , No. HG15761845

, Hon. Ioana Petrou , Judge.

Roberts & Elliott, James Roberts and Sharmi Shah for Plainiffs and Appellants.

Greenan, Peffer, Sallander & Lally, James S. Greenan and Edward Romero for Defendant and Respondent.