Opinion
A127897
10-17-2011
MILTON AND GLORIA RIGHETTI, Plaintiffs and Appellants, v. EXXON MOBIL CORPORATION, et al., Defendants and Respondents.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
(Alameda County
Super. Ct. No. RG-08-420315)
Plaintiffs Milton and Gloria Righetti (the Righettis) appeal from the trial court's judgment granting summary adjudication to defendant Exxon Mobil Corporation (Exxon) regarding three of the Righettis' four causes of action. The parties' dispute centers around whether or not Exxon has the statutory right to insist the Righettis provide an indemnity bond costing about $15,000 before Exxon issues a certificate to them for approximately $500,000 of Exxon stock that they own. The Righettis contend the trial court erred in finding Exxon had this right under the relevant statutes, and that there was no evidence that met the statutory requirements. We conclude the trial court's statutory interpretation was too broad, but that there was undisputed evidence that the circumstances meet the statutory requirements. Accordingly, we affirm the judgment.
The Righettis' Complaint Allegations
The Righettis sued Exxon and Computershare Investor Services, LLC (Computershare) in November 2008. They stated in their first amended complaint that they were suing to "recover" stock certificate No. V00355147 for 7,420 shares of Exxon, which defendants were wrongfully withholding, and brought four causes of action based on the same factual allegations, as follows:
Computershare operated as Exxon's agent with responsibility to maintain and deliver shares of stock to shareholders such as the Righettis, who were over 80 years old. In the year before the filing of the Righetti's action, defendants "secreted, appropriated, obtained, retained; or assisted in taking, secreting, appropriating, obtaining or retaining . . . [the Righettis'] stock certificate No. V00355147" despite the Righettis' repeated requests for delivery. Defendants failed to follow the policy they insisted Exxon shareholders follow, which was to transfer stock shares by certified mail, and instead "attempted to transfer to [the Righettis] stock certificate No. V00355147 via regular mail; however, [the Righettis] never received their shares. Defendants['] acts in sending these shares via regular mail was reckless, malicious and intentional, and in blatant disregard of [d]efendants' own policies and procedures, to the detriment of the elderly [Righettis]." (Italics added.)
When the Righettis reviewed their portfolio, they realized they did not have the certificate and notified defendants. They made numerous requests "for the return of their shares," but defendants, refusing to accept responsibility for "their own failure to perform acts which they require of their own shareholders, and in a malicious act," sought to "extort" from the Righettis an indemnity bond costing $15,0000 before they would "reissue" the certificate to the Righettis, although they did not dispute the Righettis' ownership of the shares. Defendants asserted they "should be absolved of all responsibility over the security of their investors' shares as soon as [d]efendants transfer said shares via regular mail," but did not follow their own policies. The Righettis had "an absolute right to possession of their personal property" and were damaged by defendants' "unlawful retention" of it.
The Righettis' four causes of action were for, first, financial elder abuse pursuant to Welfare and Institutions Code section 15610.30; second, for negligence; third, for defendants' violation of Business and Professions Code sections 17200, et seq. (unfair business practices); and, fourth, for conversion. The Righettis sought "return" of the stock certificate, compensatory and punitive damages, injunctive relief, attorney fees, costs, and any other relief deemed proper by the court.
Both Exxon and Computershare moved for summary judgment or, in the alternative, summary adjudication. As we will soon discuss, the Righettis' appeal is only from the trial court's order regarding Exxon's motion. Therefore, we do not discuss Computershare's motion.
Exxon's Motion for Summary Judgment/Adjudication
Exxon sought summary judgment/adjudication, arguing Corporations Code section 419 and Uniform Commercial Code section 8405 allowed it to require a bond before issuing a replacement stock certificate to the Righettis; the applicable statutes of limitations barred the financial elder abuse, unfair business practices, and negligence causes of action; and the cause of action for conversion lacked merit. We focus on whether Exxon had the right to insist that the Righettis provide a bond.
Exxon relied on numerous facts it contended were undisputed to argue it was entitled to require the bond, including the following:
The case was about a "lost" stock certificate that was mailed to the Righettis on April 11, 1997 after the stock split. A "Protected Purchaser" of this lost certificate would have the right to the shares represented by it and the registered owners would remain owners of their shares, necessitating a bond.
Exxon gave written notice of the stock split in a March 1997 letter to shareholders, which was accompanied by a dividend check. The Righettis received and cashed that dividend check, and acknowledged they were aware of the stock split. Since 1997, the Righettis cashed 46 consecutive dividend checks for Exxon stock, including the shares at issue, which checks were sent by first class mail.
Exxon mailed the certificate to the Righettis on April 11, 1997. It had insurance to cover lost certificates from the stock split which required shareholders to make a claim of loss within one year of the certificate mailing. It would have cost Exxon $180 to send the certificate by regular mail, and any claim of loss still would have had to have been made within a year of the mailing. Since the certificate was placed in the mail in 1997, Exxon had not possessed it or assisted any other party in any wrongful possession of it.
In 2006, the Righettis took their stock certificates to Charles Schwab, where they opened a brokerage account, but continued to receive one dividend check directly from Exxon. Believing they had delivered the certificate to Schwab, they contacted Schwab to correct the apparent error. Schwab investigated and reported that it did not have one certificate with the number "V00355147," which was associated with the 1997 stock split.
In 2008, the Righettis first reported to Exxon that the certificate was lost. Exxon, consistent with its practice when certificates are lost, offered to provide the Righettis with a replacement certificate if they provided an affidavit of loss and an indemnity bond, the premium for which was about three percent of the value of their approximately $500,000 of stock, or about $15,000.
The Righettis' Opposition
In their opposition to Exxon's motion, the Righettis argued defendants were engaging in "a brazen attempt to extort" $15,000 (the approximate cost of a bond) from them after they had simply requested their rightfully owned property, based on nothing more than a long standing company policy of "refusing to honor certificate requests made subsequent to the expiration of an insurance policy."
The Righettis also opposed Exxon's statute of limitations arguments, which Exxon raises in this appeal. We need not further address these arguments in light of our conclusions herein.
The Righettis made numerous objections to Exxon's statements of undisputed facts, including regarding the factual assertions of Valerie Gray that the certificate had been mailed, ands disputed many of Exxon's asserted undisputed facts. The Righettis stated certain facts as part of their objections to Exxon's evidence and their opposition, including the following, which was based largely on Gray's deposition testimony:
Exxon's 1997 stock split certificate printing and mailing project went on for 24 hours a day for three or four days. It was a mechanical assembly line process in which continuous form blank stock certificates were loaded into a printer that printed the certificates, which were then cut, folded, enclosed in envelopes, placed in mail trays or bags, and delivered to the postal service. There were jams, crinkles, tears and the like. Gray, and Exxon, did not know if the Righettis' certificate was among those that were mangled, distorted and the like because the work files from the project were destroyed, if plaintiffs' certificate was ever put in a mail bag for delivery to the post office, nor if the Righettis received it. They did not know if quality control monitoring picked up all the problems with the project because the monitoring relied only on sampling. Other shareholders reported they did not receive their certificate from the project.
Furthermore, "defendants believe a certificate was issued because a certificate number was put into the system at some time. But, defendants do not know the process by which share certificate numbers are posted to the system [or] at what step in the stock split project process that a certificate number is assigned."
The Righettis also contended they never claimed they lost a certificate. Defendants never concluded that a certificate was lost by the Righettis. They never lost or misplaced any stock certificate, nor had any stolen.
The Righettis transferred their inventory of stock certificates to Charles Schwab in 2006, but never took the subject Exxon certificate because it had never been delivered to them in the first place. In 2008, they learned they did not have the certificate and requested one from defendants.
Based on these facts, the Righettis contended defendants had "no admissible evidence to support their claim that [the Righettis'] certificate was even printed, let alone mailed. . . . Thus, defendants' first, and most critical, factual claim — that [the Righettis'] certificate was mailed to plaintiffs in April 1997 — suffers from an utter failure of proof. That is fatal to defendants' motion because this proposition is the glue that holds the rest of defendants' arguments together." The Righettis contended there was no evidence they ever claimed their certificate was lost. Therefore, Exxon could not withhold the Righettis' certificate unless the Righettis provided a bond pursuant to the relevant statutes, which required that the certificate first be issued and the owner make a claim that it was lost, stolen, or destroyed.
The Trial Court's Ruling on Exxon's Motion
The trial court granted Exxon summary adjudication on all of the Righettis' causes of action other than negligence based on Exxon's statutory right to require a bond before issuing a new certificate to the Righettis. The court rejected the Righettis' argument that the issuer must bear the cost of posting the bond when it is responsible for the missing certificate because, the court stated, Corporations Code section 419 and Uniform Commercial Code section 8405 "do not on their face premise the posting of the bond upon the claimant's fault. They do not require the person seeking replacement of a certificate claim that the certificate was lost, stolen, missing or destroyed. (Thus [the Righettis'] argument that they never made that claim is irrelevant.) The statutes merely require the person requesting the replacement certificate post a bond [and] comply with other reasonable requirements placed by the issuer where 'it is alleged' that the certificate is lost, missing, destroyed or stolen."
The court, based on the competent, undisputed evidence of a stock split and Exxon's assignment of a number to a certificate for the Righettis' stock, that the shares were posted to the Righettis' account and dividends on the shares received by the Righettis, and that none of the parties were currently in possession of the certificate, concluded that "[t]he only reasonable conclusion is that it has been 'lost, destroyed, or wrongfully taken' ([Cal. U. Com. Code, § 8405]) or 'lost, stolen or destroyed' ([Corp. Code, § 419]) in some fashion as contended by defendants. . . . In sum, the crux of the improper conduct alleged against [Exxon] is that a certificate was never 'delivered' to [the Righettis] and arguably lost in the mail. Thus, in paragraph 15 of the First Amended Complaint, [the Righettis] allege: 'Defendants attempted to transfer to [the Righettis] stock certificate No. V00355147 via regular mail, however [the Righettis] never received their shares. . . .' " The court concluded that Exxon acted lawfully when it refused to issue a new, replacement bond under these circumstances until the Righettis provided an indemnity bond as provided for by statute.
The court also overruled the Righettis' objections to Exxon's evidence as "confusingly labeled and not formatted according to the applicable rules, making it virtually impossible to ascertain what material is at issue."
Subsequently, the court filed a supplemental order, focusing on the Righettis' evidentiary objections to the testimony of Valerie Gray in her declaration that was relied upon by Exxon. The court affirmed its overruling of these objections on form grounds. It further stated that, although its summary adjudication ruling was not dependent on the conclusion that the certificate was printed and mailed to plaintiffs, Gray was competent to testify about the procedures that were employed for issuing, printing and mailing certificates, and that the shares were posted to the Righetti account and the dividends received by them.
The court stated that it granted summary adjudication because the relevant statutes "allow [d]efendants to require a bond where the shareholder seeks a replacement certificate because the certificate is missing (more specifically, when alleged to be lost, destroyed or wrongfully taken/stolen). Here, plaintiffs may claim that they never received the certificate and that there is no evidence that a certificate was even ever printed. But, the undisputed fact remains that certificate no. V00355147[] is missing — either because it was destroyed (e.g. the machine printing the certificates was faulty and it mangled, tore or otherwise failed to print out a certificate), lost (which could arguably have occurred at any time after printing), or it was wrongfully taken (e.g. stolen after being printed) and in order to comply with [the Righettis] request, [d]efendants must issue another certificate." The court concluded that "[t]he statutes make it clear that the condition that [the Righettis] pay a bond first was lawful."
The trial court subsequently entered judgment, which indicated a jury rejected the Righetti's negligence claim. The Righettis filed a timely notice of appeal of the trial court's December 8, 2009 order granting summary adjudication to Exxon, and its supplemental order. Exxon argues that it is the only respondent to this appeal, while the Righettis argue Computershare is a respondent too.
DISCUSSION
Before addressing the merits of this appeal, we address whether Computershare is a respondent to the Righettis' appeal. We conclude they are not. The Righettis' notice of appeal is ambiguous as to the intended respondents (the notice names: "Exxon Mobile, Inc., et al."), but plainly appeals from the trial court's December 8, 2009 order regarding Exxon's Motion for Summary Judgment/Partial Grant. That order does not address the issues raised by Computershare in its motion. Furthermore, the register of action indicates the court issued another order granting in part a motion for summary judgment on December 7, 2009, which is not included in the record. While the Righettis also appeal from the trial court's supplemental order, which refers to the court's rulings regarding both Exxon and Computershare, it appears to be included because it relates to the trial court's December 8, 2009 order regarding Exxon. Based on these facts, we conclude the Righettis' ambiguous notice of appeal is misleading as to Computershare, to Computershare's prejudice and, therefore, that Computershare is not a respondent to this appeal. (See Hohn v. Hohn (1964) 229 Cal.App.2d 336, 339-340 [indicating that we liberally construe a notice in favor of reaching all issues on their merits if doing so does not mislead a respondent to its prejudice]).
Turning to the merits, the Righettis raise two issues, namely that the trial court erred in granting summary adjudication without any evidence that the Righettis claimed the certificate was lost, or that any certificate was created or delivered, and that the trial court erred in overruling their objections to defendants' evidence. We affirm the trial court's grant of summary adjudication. Although we conclude the trial court interpreted the reach of Corporations Code 419 and Uniform Commercial Code section 8405 too broadly, there nonetheless was undisputed evidence that Exxon was entitled to require a bond pursuant to these statutes.
Standard of Review
The trial court's rulings are subject to de novo review. (Andrews v. Foster Wheeler LLC (2006) 138 Cal.App.4th 96, 100 (Andrews).) We view the evidence in a light favorable to the Righettis as the losing parties, liberally construing their evidentiary submission while strictly scrutinizing Exxon's own showing, and resolving any evidentiary doubts or ambiguities in the Righettis' favor. (Ibid.)
" 'A motion for summary judgment must be granted if all of the papers submitted show "there is no triable issue as to any material fact and . . . the moving party is entitled to a judgment as a matter of law. In determining whether the papers show . . . there is no triable issue as to any material fact the court shall consider all of the evidence set forth in the papers, . . . and all inferences reasonably deducible from the evidence . . . ." (§ 437c, subd. (c).) A defendant has met its burden of showing a cause of action has no merit if it "has shown that one or more elements of the cause of action . . . cannot be established, or that there is a complete defense to that cause of action. Once the defendant . . . has met that burden, the burden shifts to the plaintiff . . . to show . . . a triable issue of one or more material facts exists as to that cause of action or a defense thereto." ' " (Andrews, supra, 138 Cal.App.4th at p. 101.) " 'There is a triable issue of material fact if, and only if, the evidence would allow a reasonable trier of fact to find the underlying fact in favor of the party opposing the motion in accordance with the applicable standard of proof.' " (Ibid.)
Exxon's Right to Insist on a Bond
The Righettis argue reversal is necessary because the trial court incorrectly determined that Exxon could insist they provide an indemnity bond pursuant to Corporations Code section 419 and Uniform Commercial Code section 8405, since "the trial court's erroneous interpretation . . . [is] triggered even where no certificate was created by [defendants] in the first place[.]" We agree that the trial court's interpretation was too broad, but nonetheless conclude there was undisputed evidence to support the trial court's grant of summary adjudication.
The parties do not dispute that Exxon was entitled to summary adjudication on the Righettis' claims for financial elder abuse prohibited by Welfare and Institutions Code section 15610.30, unfair business practices prohibited by Business and Professions Code section 17200, and conversion if Exxon was lawfully entitled to insist that the Righettis provide the $15,000 bond pursuant to Corporations Code section 419 and Uniform Commercial Code section 8405. The trial court determined Exxon was entitled to insist on the bond even if Exxon had not mailed, or even printed, the certificate under the statutes because the certificate would have been "destroyed" by a faulty printer or "lost" or "stolen" at any time after printing. The court expressly rejected the Righettis' theory that the certificate had to be printed and mailed for the statutes to apply.
Financial elder abuse includes, among other things, taking or retaining real or personal property of an elder to a wrongful use. (Welf. & Inst. Code, § 15610.30, subd. (a)(1).)
Business and Professions Code section 17200 states in relevant part that "unfair competition shall mean and include any unlawful, unfair or fraudulent business act or practice[.]"
" 'Conversion is the wrongful exercise of dominion over the property of another. The elements of a conversion are the plaintiff's ownership or right to possession of the property at the time of the conversion; the defendant's conversion by a wrongful act or disposition of property rights; and damages.' " (Farmers Ins. Exchange v. Zerin (1997) 53 Cal.App.4th 445, 451-452.)
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The Relevant Statutes
We conclude the trial court's analysis was too broad based on the plain meaning of the words in Corporations Code section 419 and Uniform Commercial Code section 8405. "In construing statutes, we aim 'to ascertain the intent of the enacting legislative body so that we may adopt the construction that best effectuates the purpose of the law.' [Citations.] We look first to the words of the statute, 'because the statutory language is generally the most reliable indicator of legislative intent.' " (Klein v. United States of America (2010) 50 Cal.4th 68, 77.)
The parties do not dispute that Corporations Code section 419 and Uniform Commercial Code section 8405 potentially apply to the Righettis' securities if the circumstances meet the statutory requirements. Corporations Code section 419 states in relevant part:
"A domestic or foreign corporation may issue a new share certificate or a new certificate for any other security in the place of any certificate theretofore issued by it, alleged to have been lost, stolen or destroyed, and the corporation may require the owner of the lost, stolen or destroyed certificate or the owner's legal representative to give the corporation a bond (or other adequate security) sufficient to indemnify it against any claim that may be made against it (including any expense or liability) on account of the alleged loss, theft or destruction of any such certificate or the issuance of such new certificate." (Corp. Code, § 419, subd. (a), italics added.)
Similarly, Uniform Commercial Code section 8405 provides in relevant part:
"(a) If an owner of a certificated security, whether in registered or bearer form, claims that the certificate has been lost, destroyed, or wrongfully taken, the issuer shall issue a new certificate if the owner does all of the following:
"(1) So requests before the issuer has notice that the certificate has been acquired by a protected purchaser.
"(2) Files with the issuer a sufficient indemnity bond.
"(3) Satisfies other reasonable requirements imposed by the issuer." (Cal. U. Com. Code, § 8405, subd. (a)(1)-(3).)
The language we have highlighted plainly indicates that a corporation's right to insist on an indemnity bond under either statutory provision is predicated on the previous "issuance" of a certificate. Given this plain language, the trial court erred when it concluded that Exxon could insist on a bond even if the certificate was not mailed. We fail to see how a certificate could have been "issued" if there was no effort made to provide it to the share owner, which in this case Exxon contends was attempted by mail. However, the parties do not dispute, and we have no reason to disagree, that a certificate is "issued" if it is printed and mailed to the proper owner, whether or not it is received by the owner. The Righettis, while they sometimes refer to delivery of the certificate in their arguments, unequivocally state: "The statutes' plain language (as well as rudimentary logic and basic equity) require that a corporation or stock issuer first establish that a stock certificate was in fact printed and mailed before shifting the risk of loss onto the shareholder."
The Righettis also cite a Uniform Commercial Code comment regarding Uniform Commercial Code section 8405 to argue that the statute applies to remedy situations where there is evidence that an original certificate has reached a protected purchaser who is not the registered owner. The comment does not so indicate. (See Official Comments on U. Com. Code, 23B pt. 1 West's Ann. Cal. U. Com. Code (2002 ed.) foll. § 8405, 1 2, p. 559.) The comment merely states that "[w]here an 'original' security certificate has reached the hands of a protected purchaser, the registered owner — who was in the best position to prevent the loss, destruction or theft of the security certificate — is now deprived of the new security certificate issued as a replacement." (Ibid.) Indeed, the comment's acknowledgement that the registered owner is in the best position to prevent loss favors Exxon's position here. In any event, the plain language of the statute does not support the Righettis' argument.
The Righettis argue that Exxon was not entitled to insist on a bond because it cannot prove the Righettis ever claimed the certificate was "lost" (a claim of loss is also required by the plain language of both statutes) and that the certificate was mailed in the first place. This is not correct.
Undisputed Evidence That the Righettis Claimed the Certificate Was "Lost"
In a letter plaintiff Milton Righetti wrote to an Exxon representative on August 13, 2008, he stated that "[i]n 1997, after the split, 7420 shares were sent to Box 2694 in Castro Valley. This stock was never received and this fact was never discovered until 2008 . . . ." He recounted his activities with Schwab and his discussions with "Compushare" [apparently Computershare], and wrote that the latter indicated the certificate was "presumed lost." He stated, "The stock certificate was sent regular mail & was not sent registered and I think this is negligent on the part of Compushare. [¶] All I am requesting is that the certificate be cancelled and a new one be issued for 7420 [shares] and that Compushare should learn that our Postal System does lose regular mail." (Italics added.)
Considering this letter in the light most favorable to the Righettis, we conclude it constitutes a claim that the certificate was "lost" as statutorily required. Mr. Righetti contended that the certificate had been mailed to him, and indicated his belief that the post office had lost the mailing. There is no other reasonable interpretation. Such a "claim" or "allegation" is all that the statutes require for an issuer to be entitled to insist on a bond. (Corp. Code, § 419 (a), Cal. U. Com. Code, § 8405 subd. (a).)
Undisputed Evidence That the Certificate Was Mailed
There also was undisputed evidence that Exxon's agent, Boston EquiServe (Computershare's predecessor) mailed the certificate to the Righettis.
According to her declaration, Valerie Gray of Computershare managed all of Boston EquiServe's work for Exxon, including distribution of the new Exxon stock certificates following the stock split. Gray was responsible for supervising the distribution of these certificates to Exxon's shareholders, and she did so. She reviewed Computershare's records regarding the Righettis' Exxon account, and attached to her declaration a true and correct copy of Computershare's account summary. That summary consists of a three typed sheets that include the Righettis' names and address (as Box 2694 in Castro Valley, California), and a line which includes references to a "certificate" with the number "00355147V," the date "4/11/97," a "*SPLT," and 7420 "units." Gray stated:
"From my review of Computershare's records regarding the Righettis' Exxon account, I can say that Boston EquiServe prepared a stock certificate for 7,420 additional shares in Exxon Corporation for Milton and Gloria Righetti and mailed it to them via First Class US Mail on April 11, 1997. . . ."
Gray stated Computershare's records indicated the Righettis received and cashed quarterly dividend payments since 1993, including on March 10, 1997. Milton Righetti also testified that he had received quarterly dividends over the many years that he has owned Exxon stock, could not recall an occasion when he did not, and believed he received these dividends by regular mail.
The Righettis objected in writing to various evidence. This included referring to certain parts of Exxon's separate statement of facts and certain paragraphs of Gray's declaration and raising such objections as a lack of foundation and personal knowledge, speculation, the assumption of facts not in evidence, lack of relevance, and hearsay. The Righettis based a significant portion of these objections on deposition testimony by Gray, which we now summarize.
Gray testified that the certificates were printed as continuous form certificates on printing machines, then cut and folded in an assembly line process. The only human interaction would have been the quality checks conducted. The enclosed certificates went into mail bags that were delivered to a United States post office that was in the company's facility. The process would have gone on for 24 hours a day, for three to four days.
Gray said she could not find the work files associated with the stock split certificate project, and understood they no longer existed pursuant to the company's record retention policies. At the time of the project, the project team would have created a file extract from a database to create the stock split shares on a particular record date, which would have provided the exact number of shareholders and addresses, and the shares to be received. The file extract would have been used to create "print files," and neither were available for review.
Gray concluded that Righettis' shares were printed and mailed based on her review of "the status of the Righettis' account. We saw the shares had been issued and posted to that account, certificate number assigned from the stock split date. All future dividends were paid on those shares. The future proxy cards were issued taking into consideration those shares."
Furthermore, Gray testified, she concluded a certificate was issued because a certificate number was put into the system. However, she did not know the process by which share certificate numbers were posted on to the system, and did not know at what step in the process the share certificate numbers were posted to the system in the certificate creation and mailing process. She also could not say "with absolute certainty that the Righettis' stock certificate . . . was in the mail bag that was picked up by the post office" for the stock split certificate mailing.
Asked about whether the quality control for the project identified any issues that needed to be addressed, Gray stated, "I do not know of a particular instance, but I'm sure there had to have been something where you would have to re-issue a certificate because it crinkled. When asked whether it was "very typical in these assembly line mail processes" to have "jams and crinkles" that have to be fixed, Gray stated, "Yes. You will have situations where they . . . could tear, they could crinkle, whatever. I believe the processes that we have in place then . . . realize that and would address it and have controls in place to mitigate those and in the end have the right amount of envelopes to be delivered to the post office."
Gray had no information as to whether the Righettis actually received their certificate, and did not have any records suggesting this. She also stated that people other than the Righettis reported that their stock certificates from the stock split certificate mailing had been lost, stolen or destroyed, stating, "People would call up and say 'I don't have my stock certificate.' It's part of normal business."
The trial court overruled the Righettis' written objections because they were in improper form and it was "virtually impossible" to ascertain what was at issue. At hearing, the court allowed the Righettis' counsel, Matthew Righetti, to read his objections for the record, which he did. The gist of these objections was that Gray did not have any personal knowledge that the Righettis' certificate was mailed and, therefore, was not competent to so state. Furthermore, Gray's deposition testimony confirmed her lack of personal knowledge of any information particular to the Righettis' certificate except that she supervised "the project of hundreds of thousands of certificates." She could speak competently to the "goal" of the project, but could not testify as to whether the Righettis' names appeared on the files used to print the certificates. She also "admit[ted]" to stock certificate printing problems and complaints from shareholders, and she could not say if the printing problems affected plaintiffs. Since she did not know if the Righettis' certificate was ever printed, she could not testify it was mailed.
In its initial order, the court again overruled the Righettis' objections on form grounds. In its supplemental order, the court affirmed this ruling. It also stated that, while it was not relying on any of Gray's testimony, it considered it competent, as follows:
"It is true that Ms. Gray cannot testify from personal knowledge that the specific certificate at issue was in fact printed and mailed to the Righettis; however, Ms. Gray is competent to testify to the procedures that were employed by [d]efendants for issuing, printing and mailing certificates to all affected shareholders following the Exxon share split at issue. She is also competent to testify that the shares were posted to the Righetti account and that the Righettis have, according to the business records, been receiving dividends in accordance with the share split."
On appeal, the Righettis argue that the trial court erred in overruling its written objections because they were in proper form pursuant to California Rules of Court, rule 3.1354(b) (rule 3.1354(b)). We disagree.
It is unclear whether we review the trial court's ruling on the Righettis' objections under an abuse of discretion or de novo standard. (Nazir v. United Airlines, Inc. (2009) 178 Cal.App.4th 243, 255 & fn. 4 [acknowledging the differences among the appellate courts]; see Reid v. Google, Inc. (2010) 50 Cal.4th 512, 535 [finding no need to decide whether a trial court's rulings on evidentiary objections in summary judgment proceedings are reviewed for abuse of discretion or reviewed de novo].) It does not matter, however, because we agree with the trial court's ruling.
As the Righettis correctly point out, rule 3.1354(b) requires that the objecting party state objections in one of two formats. (Rule 3.1354(b).) Both formats require that the objecting party state the exhibit, title, page and line number of the material objected to, quote the objectionable statement or material, and state the grounds for each objection to that statement or material. (Rule 3.1354(b)(1)-(4).) The Righettis incorrectly assert that they did so. Their objections to Gray's declaration refer only to paragraphs in her declaration, which each consist of three to eight sentences. Also, rather than quote the specific statement or statements objected to, the Righettis quote the separate statement of facts. As a result, it cannot be determined how the Righettis' multiple objections relate to particular statements by Gray in her declaration, or even whether the objections are intended for statements in the declaration rather than in Exxon's separate statement of facts. The objections Righettis' counsel read into the record at the hearing did not cure this confusion.
We also agree with the trial court that Gray was competent to testify about the procedures that were employed in issuing, printing, and mailing the certificates, and that the shares were posted to the Righetti account and dividends subsequently received by them, none of which is disputed by the parties.
Furthermore, as Exxon points out, Gray's testimony was admissible despite her lack of personal knowledge regarding the Righettis' specific certificate because "evidence of custom and practice in a business is admissible as circumstantial evidence of conduct on a particular occasion." (Alvarez v. State of California (1999) 79 Cal.App.4th 720, 733 [finding declarations submitted in support of a summary judgment motion to show a project was approved prior to construction were admissible despite the lack of personal knowledge of the declarants]; Evid. Code, § 1105.) Gray had personal knowledge of Boston EquiServe's custom and practices regarding the project as the project supervisor, as well as of the significance of the information contained in Computershare's records.
In light of this circumstantial evidence, the Righettis' argument that the trial court erred in granting summary adjudication cannot be maintained. Exxon, as the moving party, met its burden of showing the Righettis could not prove their financial elder abuse, unfair business practices, or conversion claims because of the evidence that Boston EquiServe had mailed the certificate on Exxon's behalf, as indicated in Gray's declaration, based on her personal knowledge as project supervisor of the customs and practices employed in the stock split certificate printing and mailing project. Nothing the Righettis submitted in their opposition to Exxon's motion contradicted this evidence. To the contrary, some of their submission confirmed it, such as Gray's testimony that quality control measures were employed to deal with such issues as crinkles and tears in the certificates which led her to conclude that "the right amount of envelopes [were] delivered to the post office." Furthermore, Gray's testimony that an unspecified number of shareholders reported their certificates were lost, stolen or destroyed did not contradict her testimony, as she said nothing indicating any shareholders asserted that their certificates had not been mailed.
Similarly, Exxon was entitled to rely on Gray's declaration statement that Computershare's records indicating that a certificate number had been assigned to the Righettis' shares and the number put into the system as further circumstantial evidence of a mailing. Her testimony likewise indicated that this event, as well as that dividends were paid on the shares and future proxy cards were issued, indicated to her that the "shares were printed and mailed." Gray's testimony that she did not know when in the printing and mailing process a certificate number was assigned was far too vague to raise a triable issue of fact.
We also note, as did the trial court, that the Righettis alleged in their first amended complaint that in 1997 Exxon sent the missing certificate to them by regular mail, rather than by the registered mail route Exxon recommended its shareholders employ. In their opposition to Exxon's motion, the Righettis repeatedly relied on the factual allegations in their "entire complaint," stating that the complaint "speaks for itself." By doing so, the Righettis in effect contended that the certificates were mailed, while they contended at the same time that there was no evidence of such a mailing.
The parties debate whether there was undisputed evidence indicating the Righettis received the certificate. However, we need not address this issue further because the parties agree that Corporations Code section 419 and Uniform Commercial Code section 8405 apply in the event the certificate was mailed.
In short, upon receiving Mr. Righettis' report that the certificate had been lost, Exxon, as the issuer of the certificate, was entitled to insist upon a bond. There was undisputed circumstantial evidence that Exxon printed and mailed the certificate. The Righettis' contentions to the contrary do not raise any material, triable issues of fact.
The trial court did not grant Exxon's motion for summary adjudication based on our analysis. Whatever the trial court's stated reasons, we must sustain its ruling if it is correct under the law. " '[N]o rule of decision is better or more firmly established by authority . . . than that a ruling or decision, itself correct in law, will not be disturbed on appeal merely because given for a wrong reason. If right upon any theory of the law applicable to the case, it must be sustained[.]' " (D'Amico v. Board of Medical Examiners (1974) 11 Cal.3d 1, 19, disapproved on other grounds in Woodland Hills Residents Assn., Inc. v. City Council (1979) 23 Cal.3d 917, 944, followed in Ericson v. Federal Express Corp. (2008) 162 Cal.App.4th 1291, 1306-1307 [affirming a grant of summary judgment].) Accordingly, we conclude the Righettis' appeal lacks merit and affirm the judgment. In light of our conclusion, we do not address the remainder of the issues raised by the parties.
DISPOSITION
The judgment is affirmed.
Lambden, J. We concur: Kline, P.J. Richman, J.