Court Opinion

ID: 7804557
Source: CourtListenerOpinion
Date Created: 2022-08-29 19:01:32.603165+00
Date Added: 2024-06-11T16:29:52.197385
License: Public Domain

Filed 8/29/22
                CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                SECOND APPELLATE DISTRICT

                        DIVISION SEVEN

 BRIAN W. CRANE,                   B310520

    Plaintiff and Appellant,       (Los Angeles County
                                   Super. Ct. No. BC683006)
         v.

 R. R. CRANE INVESTMENT
 CORP., INC.,

    Defendant and Respondent.

     APPEAL from an order of the Superior Court of Los
Angeles County, Robert B. Broadbelt, Judge. Affirmed.
     Akerman and Caroline H. Mankey for Plaintiff and
Appellant.
     Ogden & Motley and Dale E. Motley; Buchalter, George J.
Stephan and Harry W.R. Chamberlain II for Defendant and
Respondent.

                       ____________________
                        INTRODUCTION
       Brian Crane initiated an action for involuntary dissolution
of R. R. Crane Investment Corporation, Inc. (R. R. Crane), a
family-owned investment business that he shared with his
brother Kevin Crane. To avoid corporate dissolution, Kevin and
R. R. Crane invoked the statutory appraisal and buyout
provisions of the Corporations Code. 1 In December of 2020, after
a prolonged appraisal process, the trial court confirmed the fair
value of Brian’s shares at over $6.1 million, valued as of
November 13, 2017, the date Brian filed for dissolution.
       On appeal Brian contends the trial court erred by failing to
award him prejudgment interest on the valuation of his shares.
He argues he was entitled to interest at a rate of 10 percent per
annum from the date he first sought dissolution until the
eventual purchase of his shares more than three years later. We
disagree that prejudgment interest must be added to the
appraised value of Brian’s shares, and we affirm.

        FACTUAL AND PROCEDURAL BACKGROUND
        A. History of R. R. Crane and Brian’s Complaint Seeking
           Involuntary Dissolution
      R. R. Crane is a family-owned corporation formed in 1960
by Brian’s and Kevin’s parents. The corporation primarily
functions as a holding company for stock and real estate
investments. When Brian filed his dissolution action, he and
Kevin each held a 50 percent interest in R. R. Crane through

1       Undesignated statutory references are to the Corporations
Code.

                                 2
their respective trusts. 2 In July 2013 the brothers agreed Brian
would serve as President of R. R. Crane and Kevin would serve as
Vice President. They were the company’s only officers and
directors.
       On November 13, 2017, Brian filed a complaint seeking
involuntary dissolution of R. R. Crane, pursuant to section 1800. 3
He asserted that in June 2014 Kevin “assumed control” of the
company, excluded Brian from management decisions without
Brian’s consent, and “refuse[d] to release his control,” which
caused the company to incur unnecessary costs and decreased the
value of the company’s properties.
       Brian stated he and his brother “disagree vehemently on
nearly every aspect of the management of RR Crane and its
assets” and their relationship “has deteriorated to a degree that
is deleterious to RR Crane and is putting its assets and income at

2      Because the brothers share the same surname, we use their
first names; in doing so we intend no disrespect. We also note
Brian and Kevin are parties to this action in their capacities as
trustees of their respective trusts.
3      Section 1800 permits certain shareholders to file a verified
complaint for involuntary dissolution of a corporation on
specifically enumerated grounds. Involuntary dissolution is
available when “[t]he corporation has an even number of
directors who are equally divided and cannot agree as to the
management of its affairs” (subd. (b)(2)); “[t]here is internal
dissention and two or more factions of shareholders in the
corporation are so deadlocked that its business can no longer be
conducted with advantage to its shareholders” (subd. (b)(3)); or
“[i]n the case of any corporation with 35 or fewer shareholders . . .
liquidation is reasonably necessary for the protection of the rights
or interests of the complaining shareholder or shareholders”
(subd. (b)(5)).

                                 3
risk.” Brian requested R. R. Crane “be wound up and dissolved,”
asserting “liquidation is reasonably necessary for the protection
of the rights and interests” of his trust.
      B. Kevin and R. R. Crane’s Notice of Intent To Purchase
         Brian’s Shares, the Appraisal of the Fair Value of Those
         Shares and the Buyout
       On January 5, 2018, Kevin and R. R. Crane filed a notice
indicating they intended to exercise their right to purchase
Brian’s shares pursuant to section 2000, in order to avoid the
wind-up and dissolution of R. R. Crane. Two months later R. R.
Crane filed an unopposed request to stay the dissolution action,
stating that the brothers “have been unable to agree upon a fair
price” for Brian’s shares in the company. R. R. Crane posited
“the most expeditious approach” would be for each brother to
select an appraiser and then those two appraisers select a third
appraiser to collectively determine the fair value of Brian’s
shares. Brian asked the court to require Kevin and R. R. Crane
post a bond of at least $250,000 to cover Brian’s legal costs and
other fees that may be incurred in the appraisal process.
       In May 2018 the trial court stayed the dissolution action
pending the appraisal of Brian’s shares; required R. R. Crane to
post a $25,000 bond; adopted the proposed plan for designating
three appraisers; and ordered that, on or before October 1, 2018,
“the three appraisers, or a majority thereof, shall then submit an
award regarding the value” of Brian’s shares. R. R. Crane
designated William Buckley as an appraiser. Brian designated
Foss Consulting. The trial court eventually designated Raymond
Moran as the third appraiser, whom Brian asserts was also
proposed by Kevin and R. R. Crane. The court later extended the
deadline for the award valuation to December 3, 2018.

                                4
       On December 4, 2018, Kevin and R. R. Crane filed a notice
of submission of appraisal by two appraisers, Buckley and Moran.
The following day Brian filed a notice of submission of appraisal
by appraiser Glenn Garlick (which incorporated the work of Foss
Consulting), along with Brian’s objections to the other two
appraisals.
       On December 19, 2018, counsel for Kevin and R. R. Crane
filed an Award of Appraisers, executed by Buckley and Moran,
valuing Brian’s shares at $5,509,923.00, to which Brian filed an
objection. In January 2019 R. R. Crane filed a motion for an
order confirming the Award of Appraisers and setting a schedule
for payment and transfer of the shares. Brian objected to the
Award, noting that the amount of the Award was “inconsistent
with all three of the appraisals” from Buckley, Moran and
Garlick, which were $6,182,918, $6,071,025.50 and $6,565,000,
respectively.
       In February 2019 Brian filed a motion seeking a deferred
valuation date for the appraisal of his shares, rather than the
statutory default date, which was the date Brian filed for
dissolution (November 13, 2017). Brian sought a “present
valuation date” that would be “on or after the date of the Court’s
ruling on this motion” and “more closely approximates the actual
date on which the sale of his interests is likely to be
consummated.” Brian maintained that in the 16-month period
since he sought dissolution in November 2017, “the stock and real
estate assets of RR Crane have increased in value, RR Crane has
collected well over $1 million in net revenues,” “the applicable
federal tax rate has dropped from approximately 34% to 21%”
and, “RR Crane has failed to make normal distributions of
revenue to Brian.”

                                5
       On July 9, 2019, the trial court denied R. R. Crane’s
motion, concluding that the appraisers’ purported valuation of
$5,509,923 was not consistent with the valuation in either
appraisal report and that “nothing in the Award explains how
they jointly came to that number.” The court also denied Brian’s
motion to set a deferred valuation date, finding the request
untimely and that no good cause existed to change the valuation
date given the appraisers had already prepared and submitted
their reports and arrived at the “purported appraisal award.”
The court ordered the three appraisers, or two out of three if the
three could not agree, to file a new award by September 10, 2019.
       On September 9, 2019, counsel for Kevin and R. R. Crane
submitted Buckley and Moran’s Revised Award, concluding that
Brian’s gross value of shares was $6,182,918, or a net award of
$5,304,750 with an offset for an outstanding loan and accrued
interest that Brian allegedly owed R. R. Crane. In October 2019
R. R. Crane filed a motion to confirm the Revised Award. On
January 29, 2020, Brian filed an opposition asserting, among
other arguments, that prejudgment interest pursuant to Civil
Code section 3287, subdivision (a), or section 3288 should be
added to any appraisal award to afford him the “fair value” of his
shares.
       The trial court sua sponte continued the hearing on the
motion to confirm the Revised Award numerous times, from
February 2020 to December 2020. 4 On December 21, 2020, the
trial court granted R. R. Crane’s motion to confirm the Revised
Award. The trial court confirmed the Revised Award’s gross

4     At least three of these continuances were directly
attributable to the COVID-19 pandemic and the “state of
emergency” declared by the Governor of California.

                                6
valuation of Brian’s shares at $6,182,918 and denied Brian’s
request for prejudgment interest. The court set a deadline of
January 15, 2021 for payment “if R. R. Crane desires to prevent
the winding up and dissolution of R. R. Crane. [Citation.] If R.
R. Crane does not make payment of that sum to plaintiff [Brian]
no later than that date, then the court will enter judgment
against defendant R. R. Crane and issue a decree for winding up
and dissolution of R. R. Crane.” R. R. Crane elected to proceed
with the buyout and paid the valuation amount, which Brian
states he received “sometime between the December 21, 2020
court order and the January 15, 2021 deadline.” 5
      Brian timely appealed the December 21, 2020 order.

                         DISCUSSION
      A. Standard of Review
      We review the “factual aspects of the fair value
determination” made pursuant to section 2000 under the
substantial evidence standard. (Goles v. Sawhney (2016)
5 Cal.App.5th 1014, 1018; accord, Mart v. Severson (2002)
95 Cal.App.4th 521, 530.) ‘“However, the superior court’s
interpretation of the statutory standard set forth in section 2000
is subject to de novo review on appeal.’” (Goles v. Sawhney,
supra, 5 Cal.App.5th at p. 1018.) Likewise, interpretation of the
prejudgment interest provisions in the Civil Code are also subject

5      R. R. Crane asserts in its respondent’s brief that Brian
transferred his shares in exchange for the valuation price. We
found nothing in the record evidencing the exchange, and Brian’s
briefing is silent as to whether he transferred his shares.
Because the parties do not dispute this fact, we assume the
statutory buyout was completed.

                                7
to our independent review. (Flethez v. San Bernardino County
Employees Retirement Assn. (2017) 2 Cal.5th 630, 639 (Flethez)
[interpreting Civil Code section 3287, subd. (a)]; see generally
Union of Medical Marijuana Patients, Inc. v. City of San Diego
(2019) 7 Cal.5th 1171, 1183 [“[s]tatutory interpretation is ‘an
issue of law, which we review de novo’”].)

      B. Analysis
         1. Section 2000’s buyout provisions
       In response to a corporate shareholder filing for
involuntary dissolution, 6 section 2000 prescribes the procedure
for a shareholder defendant, or the corporation, to avoid
dissolution by purchasing the shares of the party who initiated
dissolution. (Schrage v. Schrage (2021) 69 Cal.App.5th 126, 136
[“the ‘statutory buyout provisions of the Corporations Code
provide a defendant in an involuntary dissolution action with a
mechanism for avoiding dissolution by purchasing the plaintiff’s
shares or other interests’”]; Trahan v. Trahan (2002)
99 Cal.App.4th 62, 75 (Trahan) [“[t]he objective of section 2000 is
to provide an alternative to dissolution through a buy-out by the
holders of 50 percent or more of the corporation”].) Once the non-
initiating shareholders invoke this statutory procedure, the
ensuing “special proceeding under section 2000 . . . ‘supplants’ a
cause of action for involuntary dissolution.” (Ontiveros v.
Constable (2018) 27 Cal.App.5th 259, 264.) “In such a

6     A 50 percent shareholder can also to seek a “voluntary”
windup and dissolution pursuant to section 1900. Like the
involuntary process, section 2000’s alternative buyout procedures
may be invoked in a voluntary dissolution. (See Mart v. Severson
(2002) 95 Cal.App.4th 521, 524.)

                                 8
[section 2000] proceeding, purchasing parties aspire to buy out
the moving party, with minimal expenditure of time and money
that would otherwise be spent in litigation, in order to preserve
the corporation. If they (or the corporation) cannot pay the
purchase price, or decide not to do so, then both sides must walk
away, receiving pro rata the proceeds resulting from dissolution
of the corporation. On the other hand, if the purchasing parties
tender the amount determined by the court, the moving party
cannot reject the share price as being too low.” (Go v. Pacific
Health Services, Inc. (2009) 179 Cal.App.4th 522, 531.) Put
differently, “[i]f the purchasing parties believe the price fixed by
the court is too high, they can refuse to purchase the shares at
that price and permit the winding up and dissolution of the
corporation to proceed. Their only liability would be to pay the
expenses (including attorney fees) incurred by the moving parties
in the appraisal process. [Citations.] No comparable provision
allows moving parties to refuse to accept a share price they
believe to be too low.” (Trahan, at p. 75.) In sum, “[t]he objective
of the statutory appraisal process is to find a fair value for the
shares of the parties seeking dissolution and to award the 50
percent shareholders seeking dissolution the liquidation value
they would have received had their dissolution action been
allowed to proceed to a successful conclusion.” (Ibid.; accord, Go,
at p. 531.)
       Section 2000, subdivision (a), defines “fair value” as “the
liquidation value as of the valuation date but taking into account
the possibility, if any, of sale of the entire business as a going
concern in a liquidation.” Subdivision (b) provides “[i]f the
purchasing parties (1) elect to purchase shares owned by the
moving parties, and (2) are unable to agree with the moving

                                 9
parties upon the fair value of such shares, and (3) give bond with
sufficient security to pay the estimated reasonable expenses
(including attorneys’ fees) of the moving parties if those expenses
are recoverable under subdivision (c), the court upon application
of the purchasing parties . . . shall stay the winding up and
dissolution proceeding and shall proceed to ascertain and fix the
fair value of the shares owned by the moving parties.”
       Section 2000, subdivision (c), instructs that “[t]he court
shall appoint three disinterested appraisers to appraise the fair
value of the shares owned by the moving parties, and shall make
an order referring the matter to the appraisers so appointed for
the purpose of ascertaining the value. . . . The award of the
appraisers or of a majority of them, when confirmed by the court,
shall be final and conclusive upon all parties. The court shall
enter a decree, which shall provide in the alternative for winding
up and dissolution of the corporation unless payment is made for
the shares within the time specified by the decree. If the
purchasing parties do not make payment for the shares within
the time specified, judgment shall be entered against them and
the surety or sureties on the bond for the amount of the expenses
(including attorneys’ fees) of the moving parties. Any
shareholder aggrieved by the action of the court may appeal the
court’s decision.” If the purchasing parties want “to prevent the
winding up and dissolution, they shall pay to the moving parties
the value of their shares ascertained and decreed within the time
specified . . . . On receiving payment or tender thereof, the
moving parties shall transfer their shares to the purchasing
parties.” (§ 2000, subd. (d).)
       When the court fixes the fair value of the shares owned by
the moving parties in an involuntary dissolution, “the valuation

                                10
date shall be . . . the date the involuntary dissolution action was
commenced . . . . However, . . . the court may, upon the hearing of
a motion by any party, and for good cause shown, designate some
other date as the valuation date.” (§ 2000, subd. (f).) 7

7      The Legislature enacted section 2000 in 1975 as part of a
sweeping reorganization and revision “undertaken to modernize
and streamline the General Corporation Law so as to embody
principles and procedures designed to facilitate the conduct of
business in a modern economy while maintaining and expanding
upon this state’s traditional protection of the rights of
shareholders and creditors.” (Assem. Select Com. on the Revision
of the Corp. Code, Rep. on Assem. Bill No. 376 (AB 376) (1975-
1976 Reg. Sess.) Dec. 1, 1975, Preface, pp. 1-2; id. at p. 1 [AB 376
“represents the first comprehensive revision of the General
Corporation Law since its enactment in 1931”]; see Stats. 1975,
ch. 682, § 7, eff. Jan. 1, 1977.) In particular, section 2000 was
intended to improve and expand “[t]he statutory procedure
authorizing the purchase by the other shareholders of the shares
of the moving parties in a dissolution action.” (Assem. Select
Com. on the Revision of the Corp. Code, Rep. on AB 376 (1975-
1976 Reg. Sess.) Dec. 1, 1975, p. 17; see also Legis. Com. com.,
reprinted at 23G West’s Ann. Corp. Code (2014 ed.) foll. § 2000,
p.5 [“[f]requently, the only source of sufficient cash to avoid
dissolution is the corporation” and thus “[i]n order that the
statutory ‘buy-out’ procedure establishes a meaningful
alternative to termination of the enterprise, this section provides
the corporation with the first right to purchase the shares of the
moving parties”].)
       Our review of Corporations Code section 2000’s legislative
history revealed no discussion about, or consideration of,
prejudgment interest. Moreover, Corporations Code
section 2000’s origins trace back to the 1941 amendment of
former Civil Code section 404 (Stats. 1941, ch. 610, p. 2057, § 1),
which in turn served as the predecessor statute to Corporations

                                11
         2. The trial court did not err in denying Brian
            prejudgment interest on the valuation of his shares
      Brian’s sole contention on appeal is that the trial court
erred in failing to add prejudgment interest to the value of his
shares, which were appraised as of November 13, 2017. He did
not receive payment for those shares until approximately three
years later and claims the lengthy delay was due to various
continuances and hold-ups in the litigation. Brian asserts a
number of equitable reasons as to why he is entitled to

Code former sections 4658 and 4659 enacted in 1947 (Stats. 1947,
ch. 1038), from which Corporations Code section 2000 was
derived—all of which are silent as to prejudgment interest.
       Section 2000, as enacted in 1975, was also silent as to the
date on which the shares should be valued. In 1983 the
Legislature passed Senate Bill No. 285 (SB 285) (1983-1984 Reg.
Sess.), which amended section 2000 to add subdivision (f).
(Stats. 1983, ch. 247, § 1, pp. 741-743.) The source of SB 285, the
Beverly Hills Bar Association (BHBA), chose the date upon which
the dissolution action was commenced “to be the standard
valuation ‘on the ground that it is most equitable to value the
shares of the shareholders seeking dissolution as of the date they
first sought to terminate the existence of the corporation.’”
(Assem. Com. on Judiciary, Rep. on SB 285 (1983-1984 Reg.
Sess.) June 27, 1983, p. 2.) According to the BHBA, the impetus
behind SB 285 was that the question of which date to use for the
valuation required in section 2000 “frequently ‘gives rise to
considerable in-court controversy, on an issue as to which the
statute provides no guidance whatever.”’ (Assem. Com. on
Judiciary, Rep. on SB 285 (1983-1984 Reg. Sess.) June 27, 1983,
p. 2.) “The BHBA argues that, by establishing a standard date
for the valuation . . . much of the controversy and expense
involved in establishing the appropriate date would be
eliminated.” (Ibid.)

                                12
prejudgment interest, including: “(1) the time value of the money
owed to him as of November 13, 2017, (2) the opportunity value
that he lost as a result of not being able to reinvest that money in
2017 in income-producing investments, and (3) the substantial
income and increased value of his interests in R. R. Crane from
2017 to 2021.”
       Brian predicates his argument, that he is entitled to
prejudgment interest, on Civil Code section 3287, subdivision (a),
or, alternatively, Civil Code section 3288. Brian’s reliance on,
and interpretation of, these statutes is misguided.

            a. Civil Code section 3287, subdivision (a)
      The plain language of Civil Code section 3287,
subdivision (a), which governs damages in civil cases, belies
Brian’s assertion that a valuation of corporate shares pursuant to
the statutory buyout provisions of Corporations Code
section 2000 falls within its ambit. Civil Code section 3287,
subdivision (a), provides that “[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 . . . .” Thus, by its express terms, Civil Code
section 3287 prescribes interest only for those who are entitled to
recover “damages.” Brian states that “the law is clear that
‘damages’ under [Civil Code] section 3287 ‘is defined broadly to
include any compensatory monetary recovery,”’ quoting Irwin v.
Mascott (N.D. Cal. 2000) 112 F.Supp.2d 937, 956. In actuality, as
the California Supreme Court recently noted, section 3281 of the
Civil Code “defines ‘damages’ as monetary compensation for one
‘who suffers detriment from the unlawful act or omission of
another.’” (Flethez, supra, 2 Cal.5th at p. 635, fn. 2, quoting Civ.

                                13
Code, § 3281 [“[e]very person who suffers detriment from the
unlawful act or omission of another, may recover from the person
in fault a compensation therefor in money, which is called
damages”].) As the Supreme Court further explained in Flethez,
“in order to recover prejudgment interest under [Civil Code
section 3287, subdivision (a)], ‘the claimant must show: (1) an
underlying monetary obligation, (2) damages which are certain or
capable of being made certain by calculation, and (3) a right to
recovery that vests on a particular day.’” (Flethez, at p. 640.)
These prerequisites to prejudgment interest are inapposite to the
statutory framework set forth in Corporations Code section 2000.
       When R. R. Crane elected to pay the fair value for Brian’s
shares pursuant to Corporations Code section 2000, it was not
equivalent to Brian receiving “damages” for a detriment he
suffered “from the unlawful act or omission of another,” nor was
it a sum R. R. Crane was obligated to pay. (Civ. Code, § 3281.) 8
Corporations Code section 2000 permits the shareholder
defendant to choose whether to buy out the seller’s shares after
the court’s confirmation of the purchase price; there is no
requirement to do so. (See Mart v. Severson, supra,
95 Cal.App.4th at p. 525 [“once the fair value is set pursuant to
section 2000, the purchasing parties have the right, but no

8      Brian also quotes Flethez for the following proposition:
“‘[T]he primary purpose of section 3287(a) is to provide just
compensation’ to the party to whom money is owed for loss of use
of the money during the prejudgment period, in order ‘to make
the plaintiff whole . . . .”’ But he omits the concluding clause “as
of the date of injury.” Here, Brian and R. R. Crane proceeded
pursuant to the statutorily sanctioned involuntary dissolution
and buyout procedures. There was no plaintiff who was owed
money “as of the date of injury.”

                                 14
corresponding obligation, to purchase the moving parties’ shares
at the fair value price”]; see also Go v. Pacific Health Services,
Inc., supra, 179 Cal.App.4th at p. 531 [“[i[f [the shareholder] (or
the corporation) cannot pay the purchase price, or decide[s] not to
do so, then both sides must walk away, receiving pro rata the
proceeds resulting from dissolution”].) The party seeking the
dissolution does not have a right or an entitlement to a buyout.
Instead, once the complainant seeks the dissolution, the
shareholder defendant (or the corporation) may elect to purchase
the shares after the trial court confirms the valuation.
Corporations Code section 2000 provides for an optional business
exchange within the prerogative of the buyer, which is
presumably driven by the fair value of the shares as ascertained
by the appraisers and confirmed by the court.
       In Abrams v. Abrams-Rubaloff & Associates, Inc. (1980)
114 Cal.App.3d 240, 250-251 (Abrams), the Court of Appeal
rejected the same contention Brian raises: that the trial court
erred in not adding prejudgment interest to the “fair value” of
shares appraised pursuant to Corporations Code section 2000’s
buyout procedures. The court provided two sound reasons for its
holding: “First, the pendency of the appraisal did not in any way
alter [plaintiff’s] rights as a shareholder. Until [buyer] or the
corporation actually purchased [plaintiff’s] stock, [plaintiff] would
continue to enjoy any benefits accruing to him as a 50 percent
shareholder, including the receipt of any dividends. 9 Second, the

9      Typically a plaintiff in a section 2000 proceeding would be
entitled to the same dividends or distributions received by other
shareholders until a buyout occurs. (See Abrams, supra,
114 Cal.App.3d at p. 250.) We note that in his February 2019
declaration Brian asserted that “Kevin and RR Crane have not

                                 15
election pursuant to section 2000 does not amount to a firm
commitment to purchase, and the corporation could still be
dissolved.” (Abrams, at pp. 250-251.) The court concluded that
Civil Code section 3287, subdivision (a), which provides “for
interest on an award of damages” was “inapplicable.” 10 (Abrams,

distributed to me the usual income received by RR Crane since
this action was filed. Typically, Kevin and I confer in or around
June of each year . . . and decide how much of RR Crane’s net
revenues to distribute in dividends to us. We did not do that in
2018 and RR Crane is holding and has not distributed the bulk of
the net revenues received in 2017 and 2018. RR Crane currently
has over $1 million in a non-interest bearing checking account.
Normally, a substantial portion of that cash would have been
distributed to Kevin and me as dividends.” Even if he was denied
distributions after he filed his action for involuntary dissolution,
in his appeal Brian does not challenge the court’s denial of his
request for a deferred valuation date under section 2000,
subdivision (f), which may have accounted for the undistributed
income and dividends he was allegedly owed.

10     In his opening brief, Brian cites Levy-Zentner Co. v.
Southern Pac. Transportation Co. (1977) 74 Cal.App.3d 762, 796-
797 for the similar proposition that Civil Code section 3287 “has
been consistently applied to require the award of prejudgment
interest where the judgment is money owed or to be refunded
pursuant to a statutory obligation.” While Levy-Zentner makes
clear that the form of the underlying cause of action—whether
sounding in tort, contract or arising from statute—is not
determinative, in order for the requirement of prejudgment
interest to apply, the defendant must have some legally
cognizable obligation to pay the plaintiff. And, as discussed, a
valuation pursuant to Corporations Code section 2000 does not
create an obligation or commitment to purchase the shares, nor

                                16
at p. 251.) We agree with the court’s reasoning and its
conclusion. 11 A plaintiff’s entitlement to prejudgment interest
pursuant to Civil Code section 3287, subdivision (a), does not
apply to a buyout of shares under Corporations Code
section 2000. 12

            b. Civil Code section 3288
      Brian’s alternative contentionthat he is entitled to
prejudgment interest under Civil Code section 3288also fails.
Civil Code section 3288 provides that “[i]n an action for breach of
an obligation not arising from contract, and in every case of
oppression, fraud, or malice, interest may be given, in the
discretion of the jury.” The trial court correctly applied the plain
language of Civil Code section 3288 and concluded that the

does it vest plaintiff with any right to recover the valuation
amount. (See Mart v. Severson, supra, 95 Cal.App.4th at p. 525.)

11    We note that Abrams, supra, 114 Cal.App.3d 240 predated
the 1983 amendment of section 2000 that added subdivision (f),
setting the valuation date as the date on which the plaintiff
commenced the involuntary dissolution action. (See Stats. 1983,
ch. 247, § 1.) As such, while the appraisers in Abrams used the
date the buyer invoked the section 2000 buyout procedures rather
than the date on which the plaintiff initiated the dissolution
action (Abrams, at p. 246), the distinction has no discernible
impact on the court’s holding and analysis.
12    Because we conclude that Civil Code section 3287 does not
apply to buyouts pursuant to Corporations Code section 2000, we
do not reach R. R. Crane’s alternate argument that prejudgment
interest also could not be awarded because the valuation was not
“certain, or capable of being made certain” within the meaning of
Civil Code section 3287, subdivision (a).

                                 17
valuation award “is not based on the breach of an obligation not
arising from contract or a showing of oppression, fraud, or
malice.” (See Levy-Zentner, supra, 74 Cal.App.3d at p. 786 [“the
language of [Civil Code] section 3288 is expressly limited to
certain types of actions”].) Indeed, Brian makes no attempt to
argue that the payment he received from R. R. Crane was for
anything other than the voluntary buyout of his shares consistent
with the procedures in Corporations Code section 2000. Because
the payment was not for a breach of an obligation, and there was
no finding of oppression, fraud, or malice by the defendants, Civil
Code section 3288 is inapplicable. 13

            c. Prejudgment interest as an equitable remedy
       Brian argues that we should impose prejudgment interest
as an equitable remedy to counteract any unfairness in the trial
court’s fair value determination. We acknowledge that “as with a
corporate dissolution, the section 2000 buy-out procedure is
subject to equitable limitations.” (Trahan, supra, 99 Cal.App.4th
at p. 78.) Section 2000 provides the trial court with a mechanism
to address the type of injustice that Brian alleges herenamely
that the valuation of his shares was deficient because there was a
several year delay between the date of valuation and payment.
Specifically, section 2000, subdivision (f), prescribes that “the
court may, upon the hearing of a motion by any party, and for

13    Although Brian insists Kevin and R. R. Crane were
obligated to pay him, Brian’s contention ignores the language of
section 2000, which makes clear the non-initiating party is under
no obligation to purchase the shares of the party seeking the
dissolution. (See Abrams, supra, 114 Cal.App.3d at p. 251; see
also Mart v. Severson, supra, 95 Cal.App.4th at p. 525.)

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good cause shown, designate some other date as the valuation
date.”
       In Trahan, the initiating party complained that the
valuation was too low because the appraisal failed to consider the
corporation’s unperformed contracts that would come to fruition
during the subsequent winding up period, even if those contracts
had no cognizable worth as of the default statutory valuation
date. (Trahan, supra, 99 Cal.App.4th at pp. 72, 74.) The Court of
Appeal explained that the purported discrepancy could have been
addressed by the trial court had the plaintiff sought a deferred
valuation date pursuant to subdivision (f) of section 2000.
(Trahan, at pp. 76-77.) While Brian filed a motion in the trial
court for a deferred valuation date, on appeal he does not contest
the court’s denial of that motion. Instead, his appeal is limited to
his argument that he is entitled to prejudgment interest on the
valuation of his shares. Because there is no such entitlement to
prejudgment interest under section 2000, we affirm.

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                         DISPOSITION
       The trial court’s order is affirmed. Respondent is to recover
its costs on appeal.

                                     WISE, J. *

We concur:

      SEGAL, Acting P. J.

      FEUER, J.

*     Judge of the Alameda County Superior Court, assigned by
the Chief Justice pursuant to article VI, section 6 of the
California Constitution.

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