Innes v. Diablo Controls, Inc.

Filed 6/16/16 CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIRST APPELLATE DISTRICT

DIVISION FIVE

JOHN HERBERT INNES, as Trustee, etc., et al., Plaintiffs and Appellants, A145528

v. (Alameda County DIABLO CONTROLS, INC., Super. Ct. No. HG15761845) Defendant and Respondent.

John Herbert Innes and Catherine Lynne Innes, as Trustees of the Innes Family Trust UDT April 22, 1992, appeal the trial court’s order denying their petition to compel inspection of certain records of respondent Diablo Controls, Inc. (Diablo Controls) pursuant to Corporations Code, section 1601.1 We agree with Jara v. Suprema Meats, Inc. (2004) 121 Cal.App.4th 1238 (Jara) that section 1601 requires that the records be made available for inspection at the office where such records are kept. Further, we reject appellants’ contention that Jara does not govern records like those in this case that are maintained out-of-state. Accordingly, we affirm. BACKGROUND Appellants are shareholders of Diablo Controls, a California corporation. In February 2015, appellants submitted a written demand to inspect Diablo Controls’ accounting books and records; the minutes of proceedings of shareholders, the board, and

1 All undesignated section references are to the Corporations Code.

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committees of the board; and certain other records.2 The demand requested the inspection take place at Diablo Controls’ California office. The requested records were located in a Diablo Controls office in Illinois. Diablo Controls shipped records to California and made them available for appellants’ inspection at its counsel’s California office. Appellants found the records available for inspection to be incomplete and filed the instant petition for a writ of mandate in March 2015. Appellants argued Diablo Controls’ failure to make all requested records available for inspection violated section 1601. After the petition was filed, Diablo Controls mailed appellants copies of additional records and made other records available for inspection at its counsel’s California office. Appellants claimed the records were still incomplete. Diablo Controls opposed the petition on the ground, inter alia, that section 1601 only obligated it to make the records available for inspection at its Illinois office. The trial court agreed in an order denying the petition and dismissing the action. The court’s order noted that if Diablo Controls failed to make records available for inspection at its Illinois office, appellants could file a new writ petition. This appeal followed.3 DISCUSSION Section 1601 provides, in relevant part: “(a) The accounting books and records and minutes of proceedings of the shareholders and the board and committees of the board of any domestic corporation, and of any foreign corporation keeping any such records in this state or having its principal executive office in this state, shall be open to inspection upon the written demand on the corporation of any shareholder . . . at any reasonable time during usual business hours, for a purpose reasonably related to such holder’s interests as a shareholder . . . . [¶] (b) Such inspection by a shareholder . . . may