Court Opinion

ID: 9366718
Source: CourtListenerOpinion
Date Created: 2023-01-27 19:02:27.164613+00
Date Added: 2024-06-11T17:15:54.679710
License: Public Domain

Filed 1/27/23 Taricco v. Taricco CA2/8
   NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                         SECOND APPELLATE DISTRICT

                                      DIVISION EIGHT

MAUREEN TARICCO,                                                  B312303

         Plaintiff and Appellant,                                 Los Angeles County
                                                                  Super. Ct. No. YC071264
         v.

DEANE TARICCO,

         Defendant and Respondent.

     APPEAL from a judgment of the Superior Court of Los
Angeles County. Robert B. Broadbelt, Judge. Affirmed.

     Dentons US, Robert F. Scoular, David Simonton; Primary
Law Group and Joshua Kroot for Plaintiff and Appellant.

      Sauer & Wagner, Gerald L. Sauer and Amir A. Torkamani
for Defendant and Respondent.

                               __________________________
                            SUMMARY
      This case presents a dispute over ownership of a family-
owned company whose business consists of owning and leasing
commercial property. The mother, Deane Taricco (defendant
here), was the majority shareholder. Her son, Tari Taricco, was
the minority shareholder and president of the company. In a
two-sentence “Agreement to Sell Shares” signed in 2008,
defendant agreed to sell all her shares to her son, at any time he
chose (including after her death), for the sum of $10,000 for each
1 percent of her share ownership. Defendant signed the
agreement, but she was in a hurry at the time and did not read it,
and her son did not give her a copy of it. In November 2013, the
son died in an accident.
      His wife Maureen Taricco (the personal representative of
the son’s estate) sued his mother for specific performance of the
2008 agreement. After a 14-day court trial, the court found
Maureen Taricco (plaintiff) was entitled to specific performance.
Among other things, the court found there was consideration for
the agreement because it granted the son an option to purchase
stock while he was an employee of the company, which provided
an incentive to continue his employment.
      The court rejected defendant’s unclean hands defense,
finding nothing prevented her from reading the agreement before
she signed it, or from making a copy of it when she signed it. The
court also found that, since neither party presented evidence of
the value of defendant’s shares in 2008, there was no evidence to
support defendant’s assertion that the option price undervalued
her shares of the company.
      Defendant sought a new trial, contending, among other
things, an error of law: that specific performance “cannot be

                                2
enforced against a party to a contract” in cases where “he has not
received an adequate consideration for the contract” or “[i]f it is
not, as to him, just and reasonable.” (Civ. Code, § 3391, subds. 1.
& 2.) Defendant argued the trial court’s failure to make any
express findings as to whether plaintiff met her burden of proof
on this issue precluded the grant of specific performance. The
trial court agreed, and granted a new trial, limited to the issues
of whether defendant received adequate consideration and
whether the agreement was, as to defendant, just and reasonable.
       At the second trial, the court found, based on expert
testimony, that the fair market value of defendant’s shares in
2008 was more than $5.4 million, while the option price in the
2008 agreement was approximately $530,000. The court
concluded plaintiff did not meet her burden of proving defendant
received adequate consideration. Further, the court found that,
taken together, the gross disparity between the fair market value
and the option price, and the circumstances in which defendant
signed the 2008 agreement, “establish that the 2008 Agreement
is not just and reasonable as to defendant.”
       On appeal, plaintiff’s principal contention is that the trial
court was bound by factual and legal findings at the first trial
that were not vacated, and “improperly ignored, recast and
contradicted those findings” at the second trial. Plaintiff also
raises an evidentiary issue and a separate issue about ownership
of nine shares that was resolved against her in a summary
adjudication. We do not find any contradiction in the trial court’s
findings in the two trials; nor do we find any error in the court’s
evidentiary ruling or its summary adjudication. Accordingly, we
affirm the judgment.

                                 3
                               FACTS
1.     The Background
       We recite the background facts, for the most part as found
in the trial court’s statement of decision after the first trial, often
quoting without attribution from the trial court’s ruling.
       The company whose ownership is at issue is Fuel
Engineering Corporation (FEC), a nominal defendant. FEC owns
commercial real estate, and its principal activity is leasing its
property to several tenants. Defendant’s late husband, Lawrence
Taricco, co-founded the company in the 1950’s. In 1976,
defendant and her husband acquired all 100 outstanding shares
of FEC. They gave five shares to each of their two sons, Tari and
Todd Taricco.
       In 1980, defendant became FEC’s president; her husband
was vice president; and Tari and Todd were secretary and
treasurer, respectively. In 1981, defendant and Tari were
responsible for the company’s day-to-day business operations.
Lawrence Taricco died in July 1981, and defendant was then the
owner of their 90 shares.
       In 1984, defendant redeemed some of her shares, reducing
her ownership from 90 shares to 62.61 shares. With the sons
each having five shares, a total of 72.61 shares were outstanding.
       In 1991, defendant sold six shares of FEC to Tari for
$168,000 ($28,000 per share).
       On May 25, 1992, in preparation for defendant’s retirement
and Tari assuming sole management of FEC, defendant signed
an “Agreement to Sell and Transfer Stock.” Defendant agreed to
sell all her shares to Tari for $28,000 per share, if purchased in
whole or in part within five years, on or before May 25, 1997.
The trial court stated: “Pursuant to that agreement Tari

                                   4
purchased a certain number of shares of FEC from defendant.”
(More about the number of shares later.)
       Effective December 29, 1992, defendant retired as
president of FEC, and Tari became “chief officer”—president,
secretary and treasurer—with sole responsibility for FEC’s
management and operations.
       In August 1998, Tari purchased his brother Todd’s five
shares, for $150,000. Defendant and her son Tari were then the
sole shareholders of FEC.
       On January 22, 2008, defendant and Tari entered into the
“Agreement to Sell Shares” on which this lawsuit is based. The
agreement states, in its entirety: “Deane Taricco agrees to sell all
shares held in Fuel Engineering Corporation, a California
Corporation to Tari Taricco for the sum of $10,000 per each 1% of
share ownership of said Corporation held by Deane Taricco. This
agreement may be exercised at any time at the election of Tari
Taricco and shall be binding upon any will or estate of Deane
Taricco.”
       Tari died in an airplane crash on November 19, 2013. At
the time of his death, Tari owned 34 of FEC’s outstanding
72.61 shares, or 47 percent, and defendant owned 38.61 shares,
or 53 percent.
       After Tari’s death, plaintiff asked defendant a number of
times to honor the stock option in the 2008 agreement, and
plaintiff’s counsel sent a demand letter to defendant on
November 19, 2015. Defendant refused the demand.
       Plaintiff filed this lawsuit in April 2016, and her first
amended complaint in July 2016. She alleged causes of action for
specific performance, fraud, breach of fiduciary duty, declaratory
relief, and involuntary dissolution. Defendant answered and

                                 5
filed a cross-complaint for declaratory relief and money had and
received. Defendant’s answer included unclean hands as an
affirmative defense.
2.     The Litigation
       Several claims and cross-claims were disposed of before the
first trial. Plaintiff alleged a cause of action for specific
performance of a May 1992 agreement with Tari to provide “the
stock certificate for the 9 shares of stock he purchased from
[defendant] in 1992.” The trial court granted summary
adjudication for defendant on that issue on the ground the claim
was time-barred because it accrued when the shares were paid
for in 1992. Plaintiff dismissed her causes of action for fraud and
involuntary dissolution before trial.
       The court also granted summary judgment to plaintiff on
defendant’s cross-complaint. In her cross-complaint, defendant
sought a declaration that she transferred only nine shares of FEC
stock to Tari in 1992, and mistakenly double-counted when she
recorded their shareholdings and executed a stock certificate for
24 shares (which also included the 1991 sale of six shares). The
court found defendant’s causes of action were likewise barred by
the statute of limitations.
       a.     The first trial
       The causes of action at issue in the first trial were for
specific performance of the 2008 agreement, two claims for
breach of fiduciary duty, and declaratory relief. The court
resolved the fiduciary duty claims in favor of defendant, and they
are not at issue in plaintiff’s appeal.
       At the close of the first trial, plaintiff argued defendant had
“failed to meet her burden of proving want of consideration”;
defendant was bound by the 2008 agreement despite her

                                  6
testimony she did not read it; and defendant’s “unclean hands”
argument was unfounded. Plaintiff also contended: “Whatever
Defendant’s ‘undervaluation’ point may be, it is irrelevant and
there is no competent evidence to support it.”
        Defendant contended, along with points not relevant, that
the 2008 agreement was unenforceable due to lack of
consideration. Further, specific performance was barred by
unclean hands because Tari Taricco “essentially tricked
[defendant] into signing a document that could purportedly divest
her of the entirety of her ownership of FEC’s shares for
$530,000,” while the value of FEC’s assets was, defendant
claimed, approximately $23 million. And in previous
transactions in 1991 and 1992, Deane sold her shares to Tari for
$28,000 and $30,000 per share respectively, far more than the
price in the 2008 agreement. “Thus, Tari knowingly and
intentionally misled [defendant] into signing a document that
severely undervalued her shares of FEC.”
        In addition to the background facts described earlier, the
trial court made the following factual and legal findings.
        The trial court began by rejecting defendant’s affirmative
defense of lack of consideration. The court found defendant did
not meet her burden to rebut the presumption under Civil Code
section 1614 that a written agreement “is presumptive evidence
of a consideration.” (§ 1614.) And, the court found the 2008
agreement was supported by consideration because
“ ‘[c]onsideration is inherent where stock options are granted to
employees and the employee continues employment knowing of
the options,’ ” quoting Newberger v. Rifkind (1972) 28 Cal.App.3d
1070, 1073 (Newberger). In that connection, the court found:

                                7
       “[D]efendant and Tari had a dual relationship—(1) they
had a family relationship as mother and son, and (2) they also
had a business relationship as majority shareholder and director
in a corporation (defendant) and minority shareholder, director,
employee, and President in the corporation (Tari).”
       “[A]t the time defendant and Tari entered into the 2008
Agreement, Tari was an employee and President of FEC,
defendant expected that Tari would continue his employment at
FEC, and defendant expected and wanted Tari to continue to
manage and operate FEC.”
       “In addition, after defendant and Tari entered into the 2008
Agreement, Tari continued his employment in that capacity at
FEC for another five years until he died in November 2013.
Thus, applying the Court of Appeal’s ruling in Newberger, the
court finds that Tari’s continued employment at FEC was
consideration that supported the 2008 Agreement. . . . Like the
Court of Appeal in Newberger, the court finds that the bargain
supporting the stock option agreement was implied from the
circumstances presented in this case.”
       After rejecting two other affirmative defenses not at issue
here, the court turned to defendant’s affirmative defense of
unclean hands.
       The court found defendant did not meet her burden of
proving Tari’s conduct in obtaining defendant’s signature on the
2008 agreement barred recovery. The court found defendant
testified “that she signed the 2008 Agreement without reading it
and that she did not discuss its contents with Tari either before
signing it or at any other time.” The court stated “[t]here was
nothing that prevented defendant from reading the one-
paragraph 2008 Agreement before she signed it, Tari did not

                                8
make any representations to defendant about the contents of the
agreement to mislead her or to induce her to sign it, and there
was nothing preventing defendant from making a copy of it
before Tari left her house that morning.” The court cited cases
holding that parties are bound by contracts even if they do not
read them; and that it is generally not reasonable to fail to read a
contract.
       The court added: “[T]here was no expert testimony or other
competent evidence presented to establish the value of
defendant’s shares in FEC at the time she entered into the 2008
Agreement. Thus, there is no evidence to support defendant’s
assertion that the option price for defendant’s shares set forth in
the 2008 Agreement ‘undervalued her shares of FEC.’ ”
       After rejecting plaintiff’s claims that defendant had
breached her fiduciary duties to minority shareholders and to the
company in multiple ways, the court found plaintiff was entitled
to a declaratory judgment that the 2008 agreement was valid and
required defendant to sell all her shares to plaintiff as personal
representative of Tari’s estate.
       b.     The second trial
       As described at the outset, defendant sought and the trial
court granted a new trial. The court limited the new trial to two
issues: whether defendant received adequate consideration and
whether the agreement was, as to defendant, just and reasonable.
(See, e.g., Lucientes v. Bliss (1958) 157 Cal.App.2d 565, 568 [“It is
a well recognized principle of law in this state that in an action
for specific performance of a contract a plaintiff must not only
allege but must also prove that the contract sought to be
specifically enforced is not only just and reasonable but that the
consideration is adequate,” citing Civ. Code, § 3391].)

                                  9
              i.     Whether consideration was adequate
       The court first considered whether defendant received
adequate consideration for the 2008 agreement. The court
concluded plaintiff did not meet her burden of proof on that issue.
The court discussed in detail the expert testimony both parties
presented. We need not describe that testimony, as plaintiff does
not challenge the court’s conclusion about the value of
defendant’s shares. The court’s findings were these.
       The exercise price for the stock option to purchase all
defendant’s shares was $531,744.94, about $13,772 per share.
       The expert witnesses agreed that defendant’s ownership
interest in FEC as of January 22, 2008, was worth “millions.”
(Plaintiff’s real estate appraiser valued FEC’s real estate at
$11.9 million, and defendant’s appraiser valued it at $14 million.
Plaintiff’s business valuation expert opined the fair market value
of FEC on January 22, 2008, was $6,765,500, or $93,176 per
share. Defendant’s expert opined the value was $14,302,200, or
$196,972 per share.)
       The court found (explaining why in detail) the fair market
value of the equity interest in FEC was $10,302,200, and
defendant’s 38.61 shares were worth $5,478,142. This was
10.3 times greater than the option purchase price, and even
under plaintiff’s expert’s analysis, 6.7 times greater than the
option purchase price. The court concluded that under either
analysis, there was “a gross disparity between the $531,744
option price for defendant’s FEC shares and the fair market
value.”
       The court also found that Tari’s continued employment at
FEC was an element of the consideration defendant received for
the 2008 agreement. However, “plaintiff did not establish that

                                10
the value of Tari’s continued employment to defendant justified
the incredible disparity between the option price at which she
was compelled to sell her FEC shares under the 2008 Agreement
and their fair market value at the time.” Tari’s continued
employment “had some value to defendant,” but “it does not
appear that it had so much value to defendant as to justify her
agreeing to divest herself of her ownership interest in FEC for
10.3 times (or even 6.7 times) less than it was worth.”
       The trial court also considered other circumstances
relevant to the adequacy of consideration. (See, e.g., Berkeley
Lawn Bowling Club v. City of Berkeley (1974) 42 Cal.App.3d 280,
290 [a challenge based on Civ. Code, § 3391 principles “must be
considered in view of the entire circumstances [citation],
including the object to be obtained by the contract and the
relationship of the parties and must be determined as of the time
the contract was made”].)
       The court addressed plaintiff’s contention the object of the
agreement was to ensure Tari’s continued management of FEC
and “to effectuate the intent . . . that Tari would become 100%
owner of FEC, keeping the family business in the family.” The
court found there was “very little, if any, evidence indicating
what the parties’ mutual intention was as to the object to be
obtained by the 2008 Agreement. The words of the two-sentence
2008 Agreement do not shed any light on the parties’ intention as
to the object to be obtained by it other than to give Tari the right,
at his election, to purchase defendant’s shares of FEC at the
stated price.”
       The court considered testimony from plaintiff that
defendant had told her several times that Tari and plaintiff’s
family “ ‘will own [FEC]’ ” and “ ‘[t]his is the legacy for your

                                 11
family,’ ” and similar statements. But the court found that, “in
light of the circumstances under which defendant signed the 2008
Agreement . . . , the fact that these statements were made in
various contexts not addressing the 2008 Agreement, and the
great disparity between the option price and the fair market
value of defendant’s shares, these statements do not establish the
object to be obtained by the 2008 Agreement or that defendant
received adequate consideration for that contract.”
       The court also considered prior transactions in which
defendant transferred shares of her FEC stock to Tari.
Defendant and her late husband gave Tari five shares in 1976; in
1991, defendant sold Tari six shares for $168,000 ($28,000 per
share); and in 1992, Tari purchased nine shares for $270,000
($30,000 per share). (Tari also purchased his brother’s
five shares in 1998 for $30,000 per share.) While Tari owned
34 shares when he died (rather than only the 25 just described),
the court “[found] credible defendant’s explanation that nine
additional shares of her FEC stock were transferred to Tari by
mistake when defendant prepared a stock certificate for Tari for
24 shares that was inaccurate because it should have been for
15 shares.”
       Plaintiff argued these transactions showed defendant
historically sold her shares to Tari at below fair market value.
But the court found that, “given the substantial length of time
between the prior transactions where defendant transferred
shares of her stock to Tari (in 1976, 1991, and 1992) and the 2008
agreement, and the lack of competent evidence to show what the
fair market value of defendant’s shares were at the time of each
of the prior transactions” (except for the 1976 gift), “these prior
stock transactions . . . have little probative value in determining

                                12
whether defendant received adequate consideration for the 2008
Agreement. The previous stock transactions . . . are also not
probative of the parties’ mutual intention as to the object of the
2008 Agreement because . . . at the time defendant signed the
2008 Agreement, she did not know she was signing a contract
that would allow plaintiff to buy her stock.”
       The court specifically found defendant’s testimony about
the circumstances in which she signed the 2008 agreement to be
credible. The court described defendant’s testimony. Defendant
was getting ready to go golfing. She was in a hurry and was “on
her way out the door when Tari appeared unannounced at
defendant’s home with a paper for her to sign between 8:00 and
9:00 a.m.” Tari came in and said, “ ‘mother I need your signature
on this.’ ” Defendant signed the document but did not read it.
“Defendant knew nothing about what was on that paper”; she
“did not know that she had agreed to sell all of her shares to Tari
for less than fair market value.” “Although defendant asked Tari
for a copy of the document, Tari never gave her a copy of it.”
“After defendant signed the document, she never had a discussion
with Tari about it.” Also, the price per share is not apparent on
the face of the document and requires a computation; defendant
testified “she was not able to determine the price per share
without a calculator.”
       The court concluded that, “[t]aken together, all of these
facts concerning the circumstances in which defendant signed the
2008 Agreement show that the parties did not have a ‘mutual
intention’ to be obtained by the contract other than the objective
meaning of the words stated in the contract.”
       Finally, the court also considered the “dual relationship” of
defendant and her son, including expert testimony that it is

                                 13
common for parents to transfer shares in businesses to children
at less than fair market value (and other expert testimony that
the IRS can impose additional tax and penalties against parents
who do so). The court found that neither the mother-son
relationship nor the business relationship “made either the
exercise price for the stock option . . . or Tari’s continued
employment at FEC . . . adequate consideration for the contract.”
Those relationships “might justify a below-market sale of
defendant’s stock to Tari,” but “they do not justify the gross
disparity between the fair market value of defendant’s shares
and the option price which plaintiff seeks to enforce.”
             ii.    Whether the contract was just and
                    reasonable as to defendant
       The court also found the 2008 agreement was not just and
reasonable as to defendant. This finding was based on the gross
disparity between the fair market value and the option price, and
on the circumstances in which defendant signed the agreement.
The court stated as follows.
       “Defendant is bound by the terms of the agreement even
though she did not read it.” But, the court explained, “the fact
that defendant is bound by the contract does not mean that it
may be specifically enforced against her,” citing Civil Code
section 3391. The court repeated the findings we have described
above about the circumstances of the signing. Specifically, “the
evidence established” that defendant did not know the contents of
the agreement when she signed; she did not know she had agreed
to sell her shares for less than fair market value; Tari did not
leave a copy with defendant that day and never gave her a copy of
it despite her request; and defendant could not determine the
price per share without a calculator.

                               14
       The court observed that it had found in the first trial that
defendant did not meet her burden of proving Tari’s conduct
barred recovery based on unclean hands. But “that finding
addressed defendant’s affirmative defense of unclean hands and
did not address Civil Code section 3391’s separate rule that
specific performance cannot be enforced against a party to a
contract if it is not just and reasonable as to that party.”
Defendant’s affirmative defense “focused on Tari’s and plaintiff’s
conduct,” while “section 3391’s restriction on specific performance
focuses on whether the contract is just and reasonable as to
defendant.” And, there was no evidence presented in the first
trial to support defendant’s assertion that the option price
undervalued her shares in FEC, while there was expert
testimony in the second trial to establish the value of her shares
in 2008.
       On January 20, 2021, the trial court entered its amended
judgment in favor of defendant.
       Plaintiff filed a timely notice of appeal.
                             DISCUSSION
1.     The Standard of Review
       “To be entitled to specific performance of a contract, a
plaintiff must plead and prove that the contract is just and
reasonable and the consideration adequate, as required by [Civil
Code] section 3391.” (Petersen v. Hartell (1985) 40 Cal.3d 102,
110.) “Since that remedy is discretionary [citations], we must
consider whether the denial was an abuse of discretion.” (Ibid.)
       Plaintiff does not base her challenge to the judgment on an
absence of substantial evidence, instead asserting “fundamental
and prejudicial errors of law.”

                                15
2.     The Claim of Contradictory Findings
       As mentioned at the outset, plaintiff’s principal contention
is that the trial court was bound by factual and legal findings at
the first trial that were not vacated, and “improperly ignored,
recast and contradicted those findings” at the second trial.
According to plaintiff, the court’s 2019 decision and its 2021
decision “are fundamentally inconsistent” and “cannot legally co-
exist.”
       We have described the trial court’s findings at both trials in
considerable detail. We find it apparent from a reading of the
court’s statements of decision that there is no inconsistency or
contradiction. There were no findings at the first trial on the
points that must be pleaded and proved by plaintiff to obtain
specific performance. Plaintiff blames defendant, who asserted,
unsuccessfully, defenses of a total absence of consideration and
unclean hands. But it was plaintiff’s burden to prove adequacy of
consideration and that the agreement was just and reasonable as
to defendant. Plaintiff failed to do so at either trial.
       We have examined plaintiff’s claims the trial court
“disregarded or misstated key evidence”; “cast aside and
contravened” findings at the first trial; “fixate[d] solely on a
hypothesized arm’s length [fair market value] transaction”; relied
“on the improper about-face finding that [defendant] ‘did not
know she was signing a contract that would allow plaintiff to buy
her stock,’ ” and so on. None of these claims withstands scrutiny.
       Preliminarily, we note that plaintiff twice asserts, at the
outset of her argument and at its end, that at the first trial
defendant “waived and forfeited” the issues that were decided at
the second trial. Plaintiff has not stated this point under a
separate heading or subheading, as required by court rules

                                 16
(Cal. Rules of Court, rule 8.204(a)(1)(B)); nor has plaintiff
supported the point with argument (ibid.). She states only that
the specific performance issues (adequacy of consideration and
justness and reasonableness to defendant) were not in issue at
the first trial “[a]s a result of [defendant’s] deliberate course of
conduct from the outset of the case, and express renunciation.”
(Plaintiff raised this point below in opposition to defendant’s new
trial motion, and the court rejected it.) In the absence of any
argument explaining the point, we consider it forfeited, and turn
to the claims plaintiff has presented.
       a.     Defendant’s signing of the 2008 agreement
       Plaintiff argues that at the first trial, the court “found that
[defendant] knowingly signed the 2008 Agreement” and then, “in
a startling about-face,” found in the second trial that defendant
did not know what she was signing. Plaintiff misstates the
court’s finding at the first trial, adding the word “knowingly.”
The court made no such finding; the court found that defendant
signed the agreement—a point that has never been disputed. It
is plaintiff who has “recast” the finding, not the trial court.
       Plaintiff also points to the trial court’s finding that Tari
made no representations to defendant about the contents of the
agreement to mislead or induce her to sign it, and to the court’s
legal conclusion that parties are bound by agreements even if
they do not read them. Those findings are not inconsistent
either; they are irrelevant to the issues before the court at the
second trial. The existence of a contract does not mean that the
contract may be specifically enforced; that is an entirely different
question, as Civil Code section 3391 tells us.

                                  17
      b.      Defendant’s knowledge of the contents of the
              2008 agreement
       Plaintiff insists the evidence “confirms [defendant] knew
full well the contents” of the 2008 agreement. Plaintiff then
recites evidence of conversations in 2013 and 2014, after Tari’s
death, which she claims “established without contradiction that
[defendant] was fully aware of the contents of the 2008
Agreement.” This is wrong, too.
       For one thing, that evidence does not establish defendant
knew the contents of the agreement when she signed it in 2008.
For another, most of these conversations were hotly disputed at
the first trial, and plaintiff cites no findings (and there are none)
by the trial court indicating it agreed with plaintiff’s version of
events. For example, plaintiff testified that in a telephone call in
November 2013, immediately after Tari’s death (and while
defendant was on a cruise off the African coast with her
granddaughter), plaintiff asked defendant if she would honor the
2008 agreement and defendant said, “my word is my bond.”
Defendant, however, testified to the contrary: that plaintiff said
nothing about a 2008 agreement during that call, and that she
had no idea of its existence.
       Another example is a tape-recorded December 18, 2014
board meeting. Plaintiff asserts that “[i]n [defendant’s] own
words on the recording, heard by the court, she acknowledged
that her stock ‘was supposed to go to originally and always to
Tari.’ ” It was plaintiff, not defendant, who said defendant’s stock
“was supposed to go to originally and always to Tari.”
Defendant’s response cannot fairly be read as “acknowledg[ing]”
plaintiff’s statement or as showing knowledge of the 2008

                                 18
agreement; defendant said, during the exchange, “No, my stock
was not going to Tari.”
       In short, at the second trial, the trial court specifically
credited defendant’s testimony that she “did not know that she
had agreed to sell all of her shares to Tari for less than fair
market value.” The court made no findings in the first trial that
undermine its conclusion about the veracity of defendant’s
testimony. There was no contradiction of previous findings, and
therefore no legal error.
       Plaintiff further complains that the court decision in the
second trial “omits [defendant’s] knowledge of the value of FEC’s
stock prior to entering into the 2008 Agreement.” (Plaintiff cites
evidence in the second trial of an appraisal in 2006 of FEC’s real
estate holdings.) We fail to see how defendant’s alleged
knowledge in 2008 of the value of her stock is relevant to
plaintiff’s burden to establish the adequacy of consideration and
the justness of the 2008 agreement. The point is the court found
defendant did not know she had agreed to sell all her shares in
the first place, at less than fair market value or otherwise.
       c.     The signing circumstances
       Plaintiff next contends the trial court’s reliance on
defendant’s testimony about the circumstances under which she
signed the agreement (see pp. 13–14, ante) “is foreclosed as a
matter of law.” According to plaintiff, the court’s 2019 ruling
“reject[ed] . . . the exact same factual premises” in connection
with defendant’s unclean hands argument in the first trial. That
is plainly not the case.
       As should be apparent from our recitation of the trial
court’s rulings, the trial court did not “cast aside” its findings in
the first trial: that is, that Tari “did not make any

                                 19
representations to defendant about the contents of the agreement
to mislead her or to induce her to sign it.” Because there were no
representations, and because nothing prevented defendant from
reading or copying the agreement, and because parties are bound
by contracts even if they do not read them, defendant failed to
prove her unclean hands defense in the first trial. But at the
second trial, plaintiff had to prove the consideration was
adequate and the agreement was just and reasonable as to
defendant. These were different issues, and the trial court’s
ruling at the second trial did not, as plaintiff asserts, “insinuat[e]
some wrongful concealment” or “insinuat[e] that Tari’s conduct
. . . was somehow misleading and inequitable.” On the contrary,
the trial court credited defendant’s testimony that she did not
read the agreement and did not know what she was signing. The
court made no contradictory findings about Tari’s conduct.
        d.    The object of the 2008 agreement:
              the relationship of the parties
        As plaintiff points out, the test for adequacy of
consideration “is not whether the promisor received the highest
price obtainable for his property, but whether the price he
received is fair and reasonable under the circumstances,” and “in
addition to the value of the property to be conveyed, the court
may consider such factors as the relationship of the parties, their
friendship, love, affection, and regard for each other, and the
object to be obtained by the contract.” (Henderson v.
Fisher (1965) 236 Cal.App.2d 468, 474; see also O’Hara v.
Wattson (1916) 172 Cal. 525, 528 [“[j]ust how far such matters [as
the relations of the parties and the object to be attained by the
contract] should incline a court, in its sound discretion, to
conclude that a price less than the value as found, is nevertheless

                                 20
adequate to justify specific performance, we cannot state by any
general formula of words”].) Plaintiff contends the trial court
disregarded its previous findings about the object of the 2008
agreement and the relationship of the parties. Again, that is not
the case.
      Plaintiff tells us the objects of the 2008 agreement were
“ensuring Tari’s continued management, effectuating that he
would become 100% owner of FEC, and keeping the family
business . . . in the family.” But the trial court made no findings
at the first trial concerning “the object to be obtained by the
contract.” Plaintiff cites four findings we have described above
(ante, at pp. 4–5 & 8), but none of them says anything about the
object of the 2008 agreement. The court merely found that
defendant and Tari had a “dual relationship” (family and
business); Tari was president of FEC in 2008 and defendant
expected and wanted him to continue managing FEC; Tari
continued in FEC’s employ for five years; and in 1992—more
than 15 years earlier—defendant had entered into an agreement,
to sell all (or any part) of her stock to Tari for $28,000 a share if
he purchased within five years (by 1997).
        None of those findings contradicts or is inconsistent with
the trial court’s finding at the second trial that “there is very
little, if any, evidence indicating what the parties’ mutual
intention was as to the object to be obtained by the 2008
Agreement.” The court specifically considered plaintiff’s
testimony that defendant told her several times over the years
that Tari and his family would own FEC, but concluded in light of
the context of those statements and other circumstances that the
statements “do not establish the object to be obtained by the 2008
Agreement or that defendant received adequate consideration for

                                 21
that contract.” We see no basis to disagree with the trial court’s
assessment.
      e.     The object of the 2008 agreement:
              historical stock transactions
      Plaintiff next contends the trial court “fixates solely on a
hypothesized arm’s length [fair market value] transaction, not
the entire circumstances of these parties,” and “contradicts the
undisputed critical fact” that the average price of the shares Tari
purchased from defendant was $5,793 per share, compared to
$13,727 per share in the 2008 agreement. Both of these claims
are false.
      First, the trial court considered the “entire circumstances”
at length (see pp. 10–14, ante). In addition to the fair market
value of defendant’s shares, the court considered the stock option
price; Tari’s continued employment; the object to be obtained by
the agreement; defendant’s statements about Tari and his family
owning FEC; the prior stock transfers; the circumstances under
which defendant signed the agreement; and the relationship
between defendant and Tari. Plaintiff’s claim to the contrary is
not borne out by the record.
       Second, the claim that Tari’s purchases of defendant’s stock
averaged $5,793 per share is about as far from an “undisputed
critical fact” as one can possibly imagine. The trial court’s
recitation of Tari’s stock acquisitions from defendant was not
“plain error,” nor was it “inaccurate and incomplete.”
       The trial court found Tari was given five shares by his
parents in 1976, bought six shares from defendant in 1991 for
$28,000 a share and nine shares in 1992 for $30,000 a share. The
court also found defendant transferred nine other shares by
mistake. Plaintiff bases her $5,793 “average price” in part by

                                22
eliminating the $270,000 Tari paid for nine shares in 1992 (and
by ignoring the court’s finding that another nine shares were
transferred by mistake). Plaintiff eliminates the $270,000 by
pointing out that defendant gave Tari the $270,000 he used to
purchase those shares. Plaintiff fails to point out that defendant
gave $270,000 to each of her sons. Tari chose to use his gift to
purchase shares; his brother Todd did not. If anyone has
“rejigger[ed] and reconstruct[ed]” the history of the stock
transfers, it is plaintiff, not the trial court.
       In any event, the court’s conclusion that stock transactions
in 1991 and 1992 have little probative value in determining
either the object of, or the adequacy of consideration for, the 2008
agreement was a reasonable assessment, not “plain error.”
       f.     Tari’s continued employment
       Plaintiff next contends the trial court ignored Tari’s
continued employment as consideration for the 2008 agreement.
That, of course, is not so. The court considered that factor (as we
describe ante, at p. 11), and concluded Tari’s continued
employment had some value to defendant, but not so much value
as to justify an agreement divesting herself of ownership “for
10.3 times . . . less than it was worth.”
       Plaintiff asserts that defendant’s acceptance of
consideration in the form of Tari’s employment “waived any
Section 3391 objection she may have had.” For this proposition,
plaintiff cites J.J. Howell & Associates, Inc. v. Antonini (1954)
124 Cal.App.2d 388, 391 (J.J. Howell) (“ ‘fairness and adequacy of
consideration need not be alleged where an agreed upon
consideration has been accepted, the acceptance constituting a
waiver of any claim of inadequacy’ ”).

                                23
      J.J. Howell has no application here. In that case, the court
affirmed an order for specific performance of a contract to convey
real property, where the court found the description in the grant
deed erroneously omitted a portion of the property agreed to be
conveyed. (J.J. Howell, supra, 124 Cal.App.2d at pp. 389–390.)
One of the defendant seller’s contentions was that the plaintiff
failed to plead and prove there was adequate consideration and
that the contract was just and reasonable as to defendant. (Id. at
pp. 390–391.) The court observed there was an exception to that
rule “where an agreed upon consideration has been accepted.”
(Id. at p. 391.) The evidence showed the plaintiff “paid the
purchase price of the property involved” and the complaint had
alleged “that plaintiff paid the agreed purchase price for the
property.” (Ibid.) Consequently, there was no merit to the
defendant’s objection to the sufficiency of the complaint. (Ibid.)
       The circumstances here, where Tari’s employment
constituted only part of the consideration—and a part the court
found was “implied from the circumstances” under Newberger,
supra, 28 Cal.App.3d at page 1075—are not remotely analogous.
There was no waiver of the section 3391 requirement to prove
adequate consideration in order to obtain specific performance.
       g.    Plaintiff’s evidentiary claim
       In connection with her claims about the object of the 2008
agreement and the relationship of the parties, plaintiff argues
the trial court erred in excluding testimony about statements
made by Tari.
       The court sustained defendant’s hearsay objection when
counsel asked plaintiff what Tari told her about “why he stayed
on after the option agreement.” The court also sustained
defendant’s hearsay objection to a question to plaintiff as to what

                                24
Tari said to her when he acquired shares from defendant in 1992.
And, the court granted defendant’s motion to strike plaintiff’s
testimony that “I was told that by Tari, that he was the
majority.” (This referred to plaintiff’s claim that Tari owned nine
additional shares of FEC, purportedly giving him a majority
interest in FEC.)
       Plaintiff contends the excluded testimony is admissible
under Evidence Code sections 1261 and 1250. We disagree.
       Evidence Code section 1261 states an exception to the
hearsay rule: “Evidence of a statement is not made inadmissible
by the hearsay rule when offered in an action upon a claim or
demand against the estate of the declarant if the statement was
made upon the personal knowledge of the declarant at a time
when the matter had been recently perceived by him and while
his recollection was clear.” (Id., subd. (a), italics added.)
       Since this lawsuit is not an action upon “a claim or demand
against the estate of the declarant” (Tari), we see no basis to fault
the trial court’s ruling. Plaintiff’s only argument is a one-
sentence assertion that Evidence Code section 1261 allows
admission of statements favorable to the estate as well as
statements unfavorable to the estate. For this assertion, plaintiff
cites Stewart v. Estate of Bohnert (1980) 101 Cal.App.3d 978,
989–990. Stewart, however, unlike this case, was a claim against
an estate. (Id. at pp. 983–984.) The claim was one for which the
estate would be liable “only . . . insofar as [the decedent’s]
insurance cover[ed] [the plaintiff’s] claims.” (Id. at p. 985.) An
exclusion from coverage was at issue. (Id. at p. 984.) The trial
court admitted in evidence a declaration from the decedent’s
insurance agent about statements the decedent made to him
showing he was aware of the exclusion. (Id. at p. 989.) The

                                 25
Court of Appeal ultimately enforced the exclusion. (Id. at
pp. 989–990.) The court found the decedent’s statements were
not hearsay (because they were admitted only to establish the
statements were made), but even if they were hearsay, the
evidence “would be acceptable under section 1261.” (Id. at
p. 990.) We do not see how Stewart has any application to this
case.
       Plaintiff also says the statements are admissible under
Evidence Code section 1250, “to the extent it goes to Tari’s then-
existing mental state or intent,” but explains no further and cites
no authority to explain how Tari’s mental state or intent are
relevant.
       Plaintiff has the burden on appeal of demonstrating
prejudicial error in the trial court’s evidentiary rulings. She has
demonstrated neither error nor prejudice.
3.     The Summary Adjudication Ruling
       In her complaint, plaintiff also alleged that in December
1992 Tari purchased an additional nine shares of FEC stock for
$270,000 ($30,000 per share), pursuant to a written agreement,
giving Tari majority ownership of the company. The only written
agreement at the time was defendant’s May 25, 1992 five-year
agreement to sell Tari shares for $28,000 a share. (This nine-
share allegation was very much disputed, with defendant
contending the $270,000 was payment for the nine shares that
were included in Tari’s 24-share certificate.)
       Plaintiff alleged that Tari purchased the shares but
defendant failed to deliver a share certificate. She sought specific
performance. She claimed the contract was “executory” and was
not breached until she demanded delivery of the share certificate
more than 20 years later, in February 2014 after Tari’s death.

                                 26
       The trial court granted defendant’s motion for summary
adjudication based on the four-year statute of limitations, finding
no merit in plaintiff’s claim the contract was “executory by
nature.” The authorities plaintiff cited, the court said, “do not
state a rule that a seller’s obligation to provide stock certificates
is delayed until someone demands those certificates twenty years
after someone pays for them.”
       On appeal, plaintiff makes the same argument and cites
the same authorities. We are not persuaded.
       Robbins v. Pacific Eastern Corp. (1937) 8 Cal.2d 241
(Robbins) involved “an exchange, or purported exchange” of stock
in one company for stock in another. Plaintiffs in 173 actions
claimed the exchange was void as to them because it violated
California securities laws. (Id. at p. 246.) The court discussed
when title passes, and stated the question was “primarily one of
intention.” (Id. at p. 274.) The documents in that case
“indicate[d] an intention to have title pass upon delivery of the
certificates, and not upon the deposit of [the stock of one of the
companies].” (Ibid.)
       Plaintiff contends that here, “without transfer of the
certificate, the contract was not fully performed and remained
executory.” But this case is nothing like Robbins, and plaintiff
omits pertinent observations by the court. “[I]n all cases physical
delivery of the certificates is not necessary to effectuate the
transfer of title to shares of stock.” (Robbins, supra, 8 Cal.2d at
p. 275, citing cases; see ibid. [“[U]nder some circumstances title
to shares of stock may pass without delivery of the certificates.”].)
Robbins does not support plaintiff’s argument that the alleged
contract to purchase another nine shares was not breached until

                                 27
20 years after Tari allegedly paid for the shares without receiving
a certificate.
       Leven v. Legarra (1951) 103 Cal.App.2d 319 does not assist
plaintiff either. The court observed that “the intent ordinarily is
that a contract for the sale of stock is performed and title to the
shares transferred upon delivery of the stock.” (Id. at p. 321.) In
Leven, the stock was sold in violation of California securities law,
there was an attempt to evade California law by mailing a
certificate to Nevada and then remailing it to California, and the
only question was whether the court erred in finding the sale was
made in California. (Id. at pp. 319–320.)
       Neither Robbins nor Leven has any application here, except
to show, as the trial court observed, “that delivery of a stock
certificate is performance of a stock sale.” Neither case discusses
when the obligation to deliver share certificates arises. Here,
defendant allegedly failed to perform by not delivering a share
certificate. “If no time is specified for the performance of an act
required to be performed, a reasonable time is allowed.” (Civ.
Code, § 1657.) “If the act is in its nature capable of being done
instantly—as, for example, if it consists in the payment of money
only—it must be performed immediately upon the thing to be
done being exactly ascertained.” (Ibid.)
       Defendant’s obligation to perform arose when Tari
allegedly paid for the shares in 1992. This is not a case where
the defendant “has promised to do an act in the future” and
therefore does not violate his agreement “unless and until” a
demand for performance is made and refused. (Leonard v. Rose
(1967) 65 Cal.2d 589, 592.) This alleged transaction was a
payment for shares that could have been delivered immediately

                                 28
but were not. The trial court correctly concluded the four-year
statute of limitations had run.
                          DISPOSITION
      The judgment is affirmed. Defendant shall recover her
costs on appeal.

                        GRIMES, J.

      WE CONCUR:

                        STRATTON, P. J.

                        WILEY, J.

                                29