Opinion
NOT TO BE PUBLISHED
Appeal from a judgment of the Superior Court of Orange County No. 03CC00179, Stephen J. Sundvold, Judge.
Mazda Butler, Mark N. Mazda and Mark J. Butler for Plaintiff and Appellant.
Bird, Marella, Boxer, Wolpert, Nessim, Drooks & Lincenberg, Terry W. Bird, Ekwan E. Rhow, Sharon Ben-Shahar and Thomas R. Freeman for Defendants and Respondents.
OPINION
RYLAARSDAM, ACTING P. J.
Plaintiff V3I, Inc. appeals from a judgment in favor of defendants Western Digital Corporation, Keen Personal Media, Inc., Russell M. Krapf, and Frank Paulson on its complaint for securities fraud under Corporations Code section 25401, fraud, and breach of oral contract. It contends the court erred in granting several motions for nonsuit and also asserts instructional error. Finding none of these arguments meritorious, we affirm.
Plaintiff filed a second appeal from the award of attorney fees and costs (G041836). We deny defendants’ motion to consolidate the two appeals.
FACTS AND PROCEDURAL HISTORY
Western was developing technology for “Sidecar, ” a video recorder similar to TiVo to be used in connection with cable television. Krapf was president and CEO of Keen; Paulson was its vice president of finance and subsequently the CFO. Plaintiff provides consulting services and computer engineers on a contract basis. Its founder and president is Susan Torres.
In March 2000, plaintiff and Western entered into a two-month Software Development Agreement (Western agreement) for plaintiff to develop software for Sidecar. Pursuant to amendments, the term was extended to run through February 2001. Western agreed to pay plaintiff a fixed fee of $1.503 million. The agreement provided that if plaintiff reduced its costs it had the option of being paid in Western stock or that of a new company later formed. In July 2000 Western created Keen as a separate, Delaware corporation to take over the Sidecar project.
In May 2000, prior to Keen’s formation, a dispute arose about an additional amount plaintiff had billed Western. According to plaintiff the amount was for work in addition to that set out in the Western agreement. In December the parties orally agreed to amend the Western agreement (amendment), terminating it as of November 30. Plaintiff would not demand payment in stock for past services; Western would pay for plaintiff’s services to date, including the disputed amounts, in cash.
At the same time plaintiff and Keen also orally agreed they would enter into a new software development agreement (Exhibit 24) whereby plaintiff would be paid on a time and material basis. To be included in Exhibit 24, at Torres’s request, was a provision to convert $500,000 of plaintiff’s payables into Keen stock. The parties instructed their lawyers, Terry Moore representing plaintiff and Jeanne Miller-Romero for defendants, to fine tune the terms and prepare the new contracts for signature. In mid-December while documents were still being finalized Torres went on a three-week vacation to South America.
During this period plaintiff’s bookkeeper spoke with Moore, explaining plaintiff needed payment immediately to cover payroll checks, which had been cut on the belief Western would be paying the past invoices. When Moore requested payment Western refused because it was for a disputed amount, payable only when the new agreements were signed. Moore testified that in a discussion with Miller-Romero, he said he was not authorized to sign the agreements. He claimed Miller-Romero told him if he signed the agreements and Torres disagreed with any of the provisions, the agreements could be modified when she returned. Moore signed the two new agreements in order to receive the payment from Western. Torres testified she had not authorized Moore to sign the documents. Upon execution of the documents Western sent plaintiff a check for almost $431,000.
Paragraph 1.3 of Exhibit 24 signed by Moore provided that if Keen issued its Series B Stock to a third party by June 30, 2001, it would pay plaintiff in that same stock for $500,000 of its services. Otherwise plaintiff would be paid in cash. On Torres’s return from vacation she had a discussion with Krapf about problems she had with Exhibit 24. She testified that as a result of the conversation, plaintiff and Keen and Western entered into an oral agreement that incorporated all the terms of Exhibit 24 with two additional oral promises: 1) Keen would only convert plaintiff’s $500,000 payables to Keen Series B Stock if it first raised $20 million by selling shares of that stock; and 2) if Western did not fund Keen to an initial public offering (IPO), it would refund plaintiff’s $500,000. Krapf denied both the conversation and making the promises.
On June 30, 2001 Keen advised plaintiff it had issued 625, 000 shares of the Series B-1 stock (June 30 letter). Although not set out in the June 30 letter the purchasers were later disclosed to be Sage Hill Partners, LLC (Sage Hill) and Western. That same day Keen issued to plaintiff 625, 000 shares of Series B-1 stock in payment for $500,000 of its payables. The Sidecar project ultimately was unsuccessful and Keen was wound down, making plaintiff’s stock worthless.
At the time of trial, in which plaintiff’s goal was to recover $500,000 in cash for payment of the invoices, the case had four remaining causes of action set out in the fourth amended complaint: the first for securities fraud against Western, Keen, Krapf, and Paulson, the second for common law fraud against Western, Keen, and Krapf the fifth for Western’s breach of the Western agreement, and the sixth for Keen’s breach of contract, which was part written and part oral based on Exhibit 24 and the two alleged oral promises.
At trial the court granted plaintiff’s motion to amend the sixth cause of action to conform to proof to breach of a solely oral agreement against both Keen and Western. The oral contract included all the terms of Exhibit 24 plus the two oral promises. After the court granted several motions for nonsuits and ruled on purely legal issues interpreting terms of Exhibit 24, as discussed below, only the sixth cause of action for breach of oral contract went to the jury, which returned a verdict in favor of defendants.
DISCUSSION
1. Nonsuit Motions and Interpretation of Exhibit 24
a. Introduction
Plaintiff challenges the court’s ruling granting two motions for nonsuit as to defendants’ compliance with paragraph 1.3 of Exhibit 24, i.e., that the stock issued to Sage Hill was timely and that Western was a third party for purposes of issuance of Keen’s stock, and not, as plaintiff argued, that Keen was the alter ego of Western. On a related issue, plaintiff maintains it was error for the court to find that the Series B-1 Keen stock qualified as Series B stock. In addition, plaintiff asserts the court erred in granting nonsuits on the causes of action for securities and common law fraud.
“A motion for nonsuit is tantamount to a demurrer to the evidence and presents a question of law: whether the evidence offered in support of the plaintiffs’ case could justify a judgment in the plaintiffs’ favor. [Citation.]” (Lussier v. San Lorenzo Valley Water Dist. (1988) 206 Cal.App.3d 92, 98.) On appeal from the grant of a nonsuit, using a de novo standard of review (Castaneda v. Olsher (2007) 41 Cal.4th 1205, 1214-1215), “we must view the facts in the light most favorable to the plaintiff. ‘[C]ourts traditionally have taken a very restrictive view of the circumstances under which nonsuit is proper. The rule is that a trial court may not grant a defendant’s motion for nonsuit if plaintiff’s evidence would support a jury verdict in plaintiff’s favor. [Citations.] [¶] In determining whether plaintiff’s evidence is sufficient, the court may not weigh the evidence or consider the credibility of witnesses. Instead, the evidence most favorable to plaintiff must be accepted as true and conflicting evidence must be disregarded. The court must give “to the plaintiff[’s] evidence all the value to which it is legally entitled, ... indulging every legitimate inference which may be drawn from the evidence in plaintiff[’s] favor....”’ [Citation.]” (Ibid.)
But “[a] mere ‘scintilla of evidence’ does not create a conflict for the jury’s resolution; ‘there must be substantial evidence to create the necessary conflict.’ [Citation.]” (Nally v. Grace Community Church (1988) 47 Cal.3d 278, 291, italics omitted.) We reverse only “‘[i]f there is substantial evidence to support [the plaintiff]’s claim, and the state of the law also supports that claim....’” (Wolf v. Walt Disney Pictures & Television (2008) 162 Cal.App.4th 1107, 1124-1125, italics omitted.)
b. Exhibit 24
1) Nonsuit
At least part of plaintiff’s case evolved over the course of the trial. As noted above, the sixth cause of action at the beginning of trial was for breach of a partly oral, partly written contract against Keen, based on Exhibit 24 and the two alleged oral promises. By the end of trial the court granted plaintiff’s motion to amend that cause of action to conform to proof so that it became a claim for breach of an oral contract against Keen and Western. Plaintiff argued defendants had not fulfilled the requirements of paragraph 1.3 of Exhibit 24 because Keen did not issue stock to Sage Hill until after June 30 and stock issued to Western did not satisfy the condition because Western was not a third party but the alter ego of Keen. Plaintiff also claimed neither of the two oral promises had been performed.
To defeat defendants’ harmless error argument, in the reply brief plaintiff asserts for the first time that it never dismissed its cause of action for breach of written contract against Keen but added another cause of action for breach of an oral contract. In support it refers to part of the colloquy that transpired during argument on its motion to amend, where its lawyer stated “we’re keeping in the breach of the written contract against Keen.” We are not resting our decision on a harmless error basis and thus this argument has no bearing on our decision either. Nevertheless the record belies plaintiff’s claim. As the trial court stated later in the case, “[t]here never was a cause of action in the [c]omplaint... for breach of that written contract [with Keen]. And... clearly there has been no motion to amend to conform the [c]omplaint to a breach of that written contract.” And plaintiff’s counsel commented, “plaintiff is not [moving] and has not moved to amend to include a written contract against Western..., being Exhibit 24.” Further, prior to the argument on the nonsuit motions the court and counsel iterated the causes of action that remained and there were none for breach of a written contract.
2) Interpretation of Exhibit 24 Terms
Plaintiff alleged and the court ruled that every term of Exhibit 24 was part of the oral agreement. Before the breach of oral agreement cause of action went to the jury, the court interpreted certain terms of Exhibit 24. The one at issue is contained in paragraph 1.3, which states: “Contingent on Keen issuing its Series B Convertible Preferred Stock, ... Keen shall pay to [plaintiff] the first $500,000 of invoiced [s]ervices in Keen’s Series B Stock in lieu of cash. For purposes of calculating the number of shares of Series B Stock that shall be issued to [plaintiff], the parties agree to use the valuation assigned to the Series B Stock in Keen’s first sale and issuance of such stock to other Series B investors. In the event that by June 30, 2001... the Series B Stock is not issued to a third party... [plaintiff] shall be paid in cash.” In the June 30 letter to plaintiff Keen advised that on June 29 it had issued 2.5 million shares of Series B-1 Convertible Preferred Stock at $.80 a share and as a result had converted $500,000 of plaintiff’s receivables into 625, 000 shares of Keen’s B-1 stock. As requested, Torres signed and returned a copy of the June 30 letter accepting and acknowledging receipt of the stock certificate.
Plaintiff challenges the court’s ruling that paragraph 1.3 was satisfied. It asserts the stock was not issued to Sage Hill until July 31, 2001 when it paid the purchase price. It also maintains issuing the stock to Western did not satisfy the condition because Western is not a third party but the alter ego of Keen. Finally, it argues Series B-1 stock is not Series B stock as required.
Taking the latter argument first, we quickly dispose of it. We reverse a nonsuit if the most favorable view of plaintiff’s evidence supports a possibility the jury would rule in its favor. But here plaintiff does not point to one piece of evidence or legal basis supporting its claim Series B-1 stock is not Series B stock. The only evidence to which we were directed came from defendants who highlight testimony of Paulson and Krapf that Series B-1 was the first issuance of Series B and that Series B and Series B-1 were the same. To prevail, plaintiff must “demonstrate substantial evidence in the record to support each claim asserted.” (Kidron v. Movie Acquisition Corp. (1995) 40 Cal.App.4th 1571, 1580, italics omitted.) “Mere conjecture or nonsensical interpretations of evidence are not sufficient to overturn a nonsuit.” (Ibid.) Plaintiff has not met its burden.
We turn now to the argument regarding issuance of stock to Sage Hill. On June 29, 2001 Keen issued 1.25 million shares of Series B-1 stock to Sage Hill for a price of $1 million. On June 29 a stock certificate was issued to Sage Hill.
To support its argument that the shares were not actually issued before June 30, plaintiff relies on the following evidence that was excluded at trial: on June 29 the Sage Hill stock certificate was delivered to an escrow held by Keen’s law firm. On July 3 Sage Hill delivered the purchase price to the escrow. The escrow agreement provided certain events were to occur prior to July 31. If not, Sage Hill had the option to cancel the purchase. It elected to proceed with the transaction and on July 31 escrow delivered the purchase price to Keen and the stock certificate to Sage Hill. Because the evidence on which plaintiff relies was not admitted it cannot support the claim the nonsuit was granted erroneously.
Plaintiff seems to argue exclusion of the evidence was error, which we should review. Its only mention is brief, in a footnote, where it asserts that exclusion of the evidence was “tantamount to a nonsuit” and the same standard of review should be employed. But this claim was not properly raised. (People v. Crosswhite (2002) 101 Cal.App.4th 494, 502, fn. 5 [undeveloped, “perfunctor[y]” argument in footnote lacking a heading insufficient].) Although plaintiff does cite some authority, it applies to evidence excluded after grant of a motion in limine, not the case here. Rather, the court made its ruling after it had already heard testimony on this subject. “The court simply concluded that certain evidence that would be proffered... on the issue of contract interpretation was inadmissible for that purpose.” (Employers Reinsurance Co. v. Superior Court (2008) 161 Cal.App.4th 906, 919.) Despite the deficiencies in the argument, we choose to review exclusion on the evidence on the merits but do so using an abuse of discretion standard. (Ibid.)
The court found paragraph 1.3 was clear on its face that “[a]ll that was required was an issuance of stock.” A review of that language in Exhibit 24 confirms the court’s ruling was correct. There was no requirement the stock be paid for by June 30.
Because Keen was a Delaware corporation we use that state’s law to analyze the issue. Under Delaware law shares can be issued without immediate payment by the purchaser. For example, “‘shares may... be issued for services to be rendered so long as they are not marked fully paid until that condition has been fulfilled by rendering the service.’” (Highlights for Children, Inc. v. Crown (1966) 43 Del.Ch. 323, 329, fn. 2 [227 A.2d 118], italics added.) “[C]apital stock... issued shall be deemed to be fully paid and nonassessable stock if... [t]he entire amount of... consideration has been received by the corporation....” (Del.Code tit. 8, § 152 (1991), italics added.) Cases confirm shares may be issued without payment of consideration. For example in MBKS Co. Ltd. v. Reddy (Del.Ch. 2007) 924 A.2d 965, in discussing whether stock issued without consideration is void or voidable or had voting rights, the court noted the “shares in question had been issued for no consideration at all to the corporation.” (Id. at p. 973, italics added.) As plaintiff argues, the question of whether issuance of shares was void or voidable, or either, is not at issue.
Plaintiff’s reliance on STAAR Surgical Co. v. Waggoner (Del. 1991) 588 A.2d 1130 is misplaced. It does not hold that shares issued without consideration are void. Rather, the court held that issuance was void because the shares were never properly authorized. (Id. at p. 1136.) That is not the case here.
Likewise, the court’s exclusion of evidence that the shares were delivered to an escrow and not to Sage Hill was not an abuse of discretion. Exhibit 24 required only that the shares be issued. In any event, under Delaware law delivery of a stock certificate is complete when the certificate is delivered to “another person [who]... acquires possession of the security certificate on behalf of the purchaser.... ” (6 Del.Code § 8-301, subd. (a)(2).) And “[a] person may be a stockholder without having in hand a certificate evidencing stock ownership.” (Norton v. Digital Applications, Inc. (Del.Ch. 1973) 305 A.2d 656, 659, fn. 1.) We do not rely on Haft v. Haft (Del.Ch. 1995) 671 A.2d 413, 418, cited by defendants, to support their argument delivery to the escrow was sufficient. That case was analyzed under the provisions of the Uniform Commercial Code, which is not at issue here.
Having determined that issuance of the Series B-1 stock to Sage Hill satisfied the requirements of paragraph 1.3, we need not discuss plaintiff’s argument that Western was not a third party under that provision of Exhibit 24.
c. First Cause of Action for Securities Fraud
Corporations Code section 25401 prohibits the making a false statement of material fact or failing to communicate a material fact in an offer, purchase, or sale of a security. Plaintiff points to statements in and omissions from the June 30 letter as the basis for the claim that, under the Corporations Code, it is entitled to rescind the transaction and be paid in cash. The letter stated that on June 29 Keen had issued 2.5 million shares of its Series B-1 stock. Plaintiff asserts that statement was false because as of that date Keen had only issued 1.25 million shares to Western, not 2.5 million shares, because shares to Sage Hill were not issued until July 31.
Plaintiff also maintains there were omissions of material facts in the June 30 letter. The first is that Keen did not disclose it had timely issued shares only to Western. Second, plaintiff contends defendants did not disclose the sale of shares to Sage Hill was conditional. Finally, plaintiff argues Krapf had represented to Torres that certain parties other than Sage Hill and Western would be purchasing Keen stock and the June 30 letter did not disclose that none of those parties had in fact made a purchase.
The trial court granted the nonsuit on the grounds the cause of action was barred by the statute of limitations. Plaintiff fails to address this ruling. To obtain a reversal plaintiff must show its claim is supported by both legal authority and substantial evidence. (Wolf v. Walt Disney Pictures & Television, supra, 162 Cal.App.4th at pp. 1124-1125.) Here, even assuming all of plaintiff’s claims as to the June 30 letter are correct, it matters not if the cause of action is barred by the statute of limitations. Plaintiff’s failure to brief this issue forfeits it on appeal. (See Christoff v. Union Pacific Railroad Co. (2005) 134 Cal.App.4th 118, 125-126 [although summary judgment reviewed de novo, court will not review issue unless properly briefed].)
Plaintiff raised the same issues in a motion for judgment notwithstanding the verdict but did not address the statute of limitations in that motion either. We must presume the trial court’s ruling was correct and may not reverse absent an adequate showing of error by plaintiff. (Winograd v. American Broadcasting Co. (1998) 68 Cal.App.4th 624, 631-632.)
d. Second Cause of Action for Fraud
This cause of action was based on the two alleged oral representations, i.e., that plaintiff’s $500,000 receivable would not be converted into stock unless Keen had sold $20 million of Series B stock and Western would fund to an IPO or plaintiff would be repaid its money. “The elements of fraud, which give rise to the tort action for deceit, are (1) a misrepresentation, (2) with knowledge of its falsity, (3) with the intent to induce another’s reliance on the misrepresentation, (4) justifiable reliance, and (5) resulting damage. [Citation.]” (Conroy v. Regents of University of California (2009) 45 Cal.4th 1244, 1255.) Plaintiff argues Keen made fraudulent representations and thus the species of fraud on which plaintiff proceeded was “[a] promise[] made without any intention of performing it.” (Civ. Code, § 1710, subd. (4).)
Nowhere in the briefs does plaintiff point to any evidence that at the time defendants made the alleged oral representations they knew they were false without the intent to perform. It was not enough for defendants to have induced plaintiff to enter into the contract, as plaintiff argues. The statements on which plaintiff allegedly relied still had to be false when they were made, that is, defendants did not intend to perform the promises. Without this evidence the order granting nonsuit on this cause of action must be affirmed.
During rebuttal at oral argument plaintiff’s counsel advised that Torres “had just reminded him” that every time she spoke to Krapf he told her that Keen already had the $20 million lined up but it never did. Without discussing whether this would be sufficient to show defendants made a false promise without the intent to perform, we will not consider evidence pointed out for the first time during oral argument. (See Kajima Engineering & Construction, Inc. v. City of Los Angeles (2002) 95 Cal.App.4th 921, 924, fn. 2 [issue raised for first time at oral argument not timely].)
2. Jury Instructions
Plaintiff disputes 24 instructions given to the jury. We review such challenges de novo. (Sander/Moses Productions, Inc. v. NBC Studios, Inc. (2006) 142 Cal.App.4th 1086, 1094-1095.)
Plaintiff first questions instruction No. 41, which states: “The dispute between the parties is whether Exhibit 24 is the only agreement between the parties or whether the terms of Exhibit 24 were incorporated into an oral contract that contained the two additional oral promises discussed above on or about January 16, 2001. You are not to be concerned with whether the written terms of Exhibit 24 were breached.” In the opening brief the only complaint raised is that the court erred in interpreting the terms of Exhibit 24 instead of letting the jury decide whether Keen stock was issued to a third party by June 30. But because we have determined that court correctly decided that issue, the argument fails.
In the reply brief plaintiff adds several new theories as to this instruction. We do not consider arguments raised for the first time in the reply brief without a showing of good cause, which plaintiff did not make. (Shade Foods, Inc. v. Innovative Products Sales & Marketing, Inc. (2000) 78 Cal.App.4th 847, 894, fn. 10.)
As to the other 23 instructions, plaintiff contends they were argumentative because they “go too elaborately into the facts relied on by [defendants], ” “emphasize... the issues, theories, or defenses in the case, ” and “stress one point over another or... stress one point over and over.” It also asserts some instructions were improper because they did not use the CACI form instructions where possible. These arguments do not persuade.
Instruction Nos. 16 and 22 through 26 deal with the validity of Exhibit 24. No. 16 states that plaintiff claims Exhibit 24 was not binding because Moore was not authorized to sign it and that plaintiff would be bound if defendants proved Moore had actual or apparent authority to sign the agreement or plaintiff ratified it. Plaintiff argues only that the instruction “goes too elaborately into the facts” on which defendants relied to prove Moore’s authority. But the instruction is proper because it merely states the contentions and claims by the parties and does not “assume the existence of facts.” (Slayton v. Wright (1969) 271 Cal.App.2d 219, 239.)
Instruction Nos. 22 and 23 define ratification, explain a principal may adopt a “purported agent’s act” expressly or impliedly by conduct, and state that a principal’s failure to disavow a contract signed by an agent equates to ratification. Plaintiff objects that these “stress[] [d]efendants’ theory of the case, ” i.e., Torres’s ratification of Moore’s execution of Exhibit 24, and they do not correctly state the law. Plaintiff fails to set out any authority, other than CACI No. 3710, to support the latter claim. But the instructions are based on sound principals of ratification law. (Rakestraw v. Rodrigues (1972) 8 Cal.3d 67, 73 [No. 22 parallels language]; NORCAL Mutual Ins. Co. v. Newton (2000) 84 Cal.App.4th 64, 78-79 [No. 23].) A CACI instruction is not itself authority for a legal proposition. (People v. Bergen (2008) 166 Cal.App.4th 161, 173, fn. 7.)
In addition, we reject plaintiff’s argument certain of the instructions were erroneous because former Superior Court of Orange County Local Rule 362 provided CACI instructions “shall be used” “insofar as practicable.” The validity of this rule is questionable, conflicting with California Rules of Court, rule 2.1050(e), which only “strongly encourage[s]” use of CACI. Moreover, plaintiff has not cited any substantive authority that failure to use CACI invalidates the substantively similar instructions.
Instruction No. 24 states that an agent has authority to act even without a written power of attorney. As plaintiff acknowledges, it argued at trial it was not bound by Moore’s signature on Exhibit 24 because he had no written power of attorney. Plaintiff contends that by using this instruction the court “ignored” its evidence and took defendants’ position. Not so. The instruction correctly states the law. (See Blanton v. Womancare, Inc. (1985) 38 Cal.3d 396, 403.) The jury was free to believe or disbelieve that Moore was not authorized to sign Exhibit 24 but it could not base its decision on an incorrect application of the law.
Instruction No. 25 concerned plaintiff’s claim Moore signed Exhibit 24 based on economic duress, that is the need for Western to pay outstanding invoices to cover payroll. It sets out the positions of the parties and specifies what plaintiff needed to prove to prevail on this theory. Plaintiff again claims the court adopted defendants’ theory and, relying only on CACI No. 333, argues the instruction incorrectly states the law. Again, we disagree. The instruction paralleled No. 333 for the most part, adding only as an element of proof that defendants knew plaintiff was “in a position of severe economic vulnerability” when it refused to pay. Case law supports the addition. (San Diego Hospice v. County of San Diego (1995) 31 Cal.App.4th 1048, 1058.)
Instruction No. 26 states the positions of the parties regarding the oral agreement. Plaintiff maintains it “does not fully set forth [its] position” and proceeds to lay out its claim. A comparison of that and the instruction shows they are the same. We also reject plaintiff’s assertion the court should have instructed with CACI Nos. 302, 304, 306, 307, and 309 instead. These instructions, which deal with contract formation, were given as well. All instructions are to be analyzed together and as a whole. (Cristler v. Express Messenger Systems, Inc. (2009) 171 Cal.App.4th 72, 83.)
Instruction Nos. 28 through 40 covered formation of the oral contract, instructing as to concepts of offer and acceptance (Nos. 28 through 30), including that silence general does not constitute acceptance, mutual assent (No. 31), manifestation of assent (No. 38), meeting of the minds (No. 33), certainty of terms (Nos. 34 and 35), including that negotiations generally are not part of the contract, the necessity to reduce oral agreements to writing if the parties so agree (No. 36), that an agreement to agree is not binding (No. 37), that a contract with an essential term left for future agreement is not binding (No. 39), and consideration (No. 40).
Plaintiff challenges these instructions on generally the same grounds as those already discussed: they emphasize defendants’ theory of the case, incorrectly state the law, and are not supported by the evidence. As to instruction Nos. 28, 29, 29a, 30, 31, 32, 33, 34, 35, 36, 37, 38, 39, and 40 the premise underlying plaintiff’s arguments is that instructions as to contract formation were unnecessary: plaintiff’s evidence was that Krapf, on behalf of Western and Keen, made the oral promises; defendants’ position was that the promises were never made. Plaintiff contends the only issue, therefore, was credibility of the witnesses and not the requirements of contract formation.
But, in addition to asserting the conversation between Torres and Krapf never occurred, defendants argued that Torres’s testimony as to what Krapf allegedly told her and her response were not definite or clear enough to constitute either an offer or acceptance. Defendants were entitled “to correct, nonargumentative instructions on every theory of the case advanced[, ]... which is supported by substantial evidence. The trial court may not force the litigant to rely on abstract generalities, but must instruct in specific terms that relate the party’s theory to the particular case.” (Soule v. General Motors Corp. (1994) 8 Cal.4th 548, 572.)
In addition, contrary to plaintiff’s claims, nos. 29 and 29a are virtually identical to CACI 309. Likewise, no. 42, which deals with Krapf’s ostensible agency and authority to bind Western to the oral contract, parallels CACI No. 3709, again contrary to plaintiff’s assertion it incorrectly states the law. The same is also true for no. 45, which adopts the language of CACI No. 350.
Plaintiff asserts No. 31, which provides that an acceptance must be precise and unqualified, incorrectly states the law, citing CACI No. 307 as authority. But that instruction, dealing with an offer, does not cover the topic of No. 31, which is legally correct. (Civ. Code, §§ 1585 [“An acceptance must be absolute and unqualified”]; 1565 [“consent of the parties to a contract must be [¶]... [¶]... [c]ommunicated by each to the other”].) Finally, we reject plaintiff’s conclusory objection to instruction No. 46, instructing as to offsets, that it has no support in the law or the evidence. There was testimony at trial that plaintiff had overbilled Western. And setoff is allowed as a defense to breach of contract. (Granberry v. Islay Investments (1995) 9 Cal.4th 738, 744 [offset “founded on the equitable principle that ‘either party to a transaction involving mutual debts and credits can strike a balance, holding himself owing or entitled only to the net difference’”].)
DISPOSITION
The judgment is affirmed. The motion to consolidate this appeal with G041386 is denied. Respondents are entitled to costs on appeal.
WE CONCUR: MOORE, J., ARONSON, J.