Filed 4/29/20 Arenal v. Hilbert CA4/3

NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FOURTH APPELLATE DISTRICT

DIVISION THREE

STEVEN ARENAL,

Plaintiff and Appellant,

v.

JAMES C. HILBERT, Individually and as

Trustee, etc.,

Defendant and Respondent.

G057087

(Super. Ct. No. 30-2017-00928546)

O P I N I O N

Appeal from a judgment of the Superior Court of Orange County, David R. Chaffee, Judge. Affirmed.

McQueen Droste and Alan J. Droste for Plaintiff and Appellant.

O’Neil and William E. Halle for Defendant and Respondent.

* * *

Defendant James C. Hilbert and Jeff Vieth signed a broker agreement to sell Hilbert’s minority interest in a company. Initially, both believed the company and its majority shareholder held contractual rights of first refusal that could override a purchase offer by a third party. Vieth drafted two alternative conditions in the agreement to trigger Hilbert’s obligation to pay a sales commission. It would be paid if Hilbert’s interest was either sold to an introduced third party or back to the company pursuant to an exercise of a right of first refusal.

Vieth relied on plaintiff Steven Arenal to search for third parties. A few months after starting, Hilbert, Vieth, and Arenal all agreed the adverse rights of first refusal likely did not exist. Hilbert affirmed this understanding through e-mails and other conduct. But at no time did Hilbert, Vieth, or Arenal communicate or otherwise clarify what the understanding meant for the commission payment condition in the agreement.

For the next three years, Arenal introduced potential third party buyers to Hilbert, who kept the company apprised. When negotiations with a final third party ceased, Hilbert sold his interest back to the company without Arenal or Vieth’s knowledge. When later confronted, Hilbert asserted no commission was owed because no third party offer had been pending when the sale occurred. Arenal contends he was entitled to a commission regardless of how the sale back to the company occurred.

In this lawsuit, on cross-motions for summary judgment, the trial court ruled adversely to all of Arenal’s claims against Hilbert, except one. Arenal voluntarily dismissed the surviving claim, for breach of the implied covenant of good faith and fair dealing, and appealed the court’s rulings on his claims for breach of written contract, declaratory relief, and fraudulent concealment. Agreeing with the results of the rulings, we hold the lack of a pending third party offer when Hilbert sold his interest is dispositive of Arenal’s breach of contract and declaratory relief claims. We also hold Arenal’s fraudulent concealment claim fails for lack of reasonable reliance. We affirm the judgment.

I

FACTS AND PROCEDURAL HISTORY

A. Minority Interest in the Company Subject to “Right of First Refusal” Terms

In 1988, defendant Hilbert cofounded a company called Western Well Tool, Inc. with Kenneth Krueger. Hilbert’s investment resulted in a 29.3 percent minority ownership interest in the company (the minority interest), memorialized in a “Buy/Sell Agreement.” The agreement contained what the parties in this case collectively refer to as a “right of first refusal”: two options entitling Western Well Tool, Inc., and Krueger to purchase Hilbert’s interest within certain time periods following Hilbert’s written notice of intent to transfer his interest to a third party buyer. The agreement specified the price and terms to be implemented if such an option was exercised.

Over the next two decades, Western Well Tool, Inc., prospered and underwent several iterations of corporate existence, resulting in a worldwide group of entities (collectively, the company). At all relevant times, Krueger was the company’s majority shareholder and decision maker. By 2011, Hilbert desired to liquidate his minority interest in the company and engaged his financial advisor, Vieth, to facilitate its sale.

B. Broker Agreement and its Right of First Refusal Condition

In October 2011, Hilbert and Vieth’s business, Swiss Reserve Corporation of America (Swiss Reserve), entered into a one-page agreement for Swiss Reserve to find a buyer of Hilbert’s minority interest (broker agreement). Vieth drafted the agreement, which stated Swiss Reserve would be compensated with a “finder’s fee” equal to eight percent of the sale price of the interest (the commission).

Hilbert’s obligation to pay the commission was expressly conditioned upon either one of two types of sales occurring. Specifically, the broker agreement stated: “[Swiss Reserve] will receive [the commission] from [Hilbert][ ] if [he] sell[s his] interest in [the company] to a buyer introduced by [Swiss Reserve] or if [he] sell[s his] interest in [the company] to the majority owners of [the company] pursuant to a right of first refusal agreement.” (Italics added.) The latter condition, specifying the sale to the majority owners, will not distinguish between the company and Krueger and will be referred to as the “first refusal condition.”

After the broker agreement was signed, Swiss Reserve assigned a 50 percent interest in it to Arenal, an experienced financial services professional who shared office space with Vieth at that time. Arenal agreed he would perform the majority of services for Hilbert. Soon after commencing, Arenal expressed his concern, to both Hilbert and Vieth, that he would be unable to secure a third party buyer because of the overriding threat posed by the right of first refusal. “Hilbert replied that he was not sure if there actually was a right of first refusal.” Indeed, about three months later, in December 2011, Hilbert spoke with a lawyer introduced by Vieth, and concluded the right likely no longer existed.

C. Postcontract Understanding and Contractual Performance

The day after meeting with the lawyer, Hilbert wrote an e-mail to one of his co-owner trusts, summarizing Hilbert’s conclusion that the right of first refusal had no legal effect (the 2011 e-mail). Included on the e-mail as copy recipients were the lawyer, Vieth, and Arenal. Hilbert wrote: “[The lawyer] believes that, although the issue is not entirely clear, the various corporate changes [i.e., of the company, since the right of first refusal was] created[,] have effectively negated [the right of first refusal] . . . . [The lawyer] has advised me that it is reasonable and supportable to simply take the position with [the company] that no [right of first refusal] exists and that my [minority interest is] freely saleable without any first right of refusal by either the company or Krueger.” Three paragraphs later, Hilbert referred to the broker agreement as follows: “As you know, I’ve already engaged Jeff Vieth and entered into a fee/commission arrangement with him for the sale of my [minority interest in the company].”

Three and a half days later, Hilbert received an e-mail response from the trust and forwarded it to Vieth (the forwarded e-mail). Among other statements, the trust asked Hilbert: “Can you confirm that the 8% brokerage fee [i.e., the commission] which we have previously mentioned will be on a ‘success only’ basis, to be paid on receipt of the cash proceeds following a sale? We have done a bit more checking as promised, and understand from some of our contacts that 8% would be ‘in the market’ to the top end but at that rate of commission would not be on an exclusive basis.” Nothing in the record indicates any specific discussion between Hilbert and Vieth (or Arenal) clarifying what the first refusal condition meant after Hilbert’s 2011 e-mail and the forwarded e-mail.

Over the next three years, Arenal diligently worked on selling Hilbert’s minority interest and communicated with approximately 50 potential third party buyers for that purpose. Hilbert regularly communicated with the company about the efforts to sell his interest to a third party. Of the potential buyers Arenal introduced to Hilbert, the most serious prospects were three business entities: Orchid Island Capital, LLC (Orchid), Energy Revenue America, Inc. (Energy Revenue), and D2 Equity Capital, LLC (D2 Equity). Negotiations with all three involved communications between the prospects, Hilbert, and the company. In October 2012, Orchid signed a letter of intent stating it was willing to buy Hilbert’s minority interest for $10 million. The letter included an express understanding that “Mr. Krueger [did] not have a Right of First Refusal to purchase the Trust’s shares in [the company].”

Hilbert solicited offers from Krueger as well. For example, during negotiations with Energy Revenue (the second serious prospect) in December 2012, Hilbert wrote to Krueger—sending a copy separately to Vieth and Arenal—about a “proposed sale” of Hilbert’s minority interest to Energy Revenue for $10 million. Hilbert’s letter advised Krueger of “downsides” for the company and included the following statements: “As I’m sure you know, it has always been my hope that [my] interest in the [the company] could be sold to yourself [i.e., Krueger] or to the [the company itself] . . . . I believe the currently proposed deal with [Energy Revenue] presents yet another opportunity for you to think about the ultimate disposition of a significant minority interest in your [company] and I thought you should be well aware of the deal before it becomes irrevocable.”

Around this same time, Hilbert also wrote privately to the trust—i.e., not copying Arenal or Vieth—that “[h]opefully,” because of the downsides communicated to Krueger, “[the company] will decide to purchase [Hilbert’s minority interest] itself. . . . We could just eliminate all of the tremendous uncertainty and the negative tax consequences that [Energy Revenue’s] purchase would involve.”

In July 2013, Hilbert e-mailed a copy of a confidentiality agreement drafted by the company (to protect its information), to D2 Equity (the third and final serious prospect), with Arenal copied as a recipient. Hilbert described the agreement as “dreaded,” “onerous,” “overreaching” and an “awful document.” D2 Equity responded by specifically asking about the right of first refusal and Hilbert communicated it was “void.”

 

D. Unsuccessful Third Party Negotiations and the Company’s Subsequent Buyback

Two months later, in September 2013, D2 Equity inquired about the likelihood of a deal being made. Hilbert responded: “I regret to say that, despite your [i.e., D2 Equity’s] very positive conversation with [the company’s lawyer], there seems to be very little enthusiasm on Ernst Kruger’s [sic] part to make the sort of concessions to a new minority stockholder that you are seeking. I suspect this is a dead end for you . . . . [¶] Should your criteria change, please don’t hesitate to get back to [Arenal] or myself . . . .” The day after, Hilbert privately e-mailed the company—i.e., not copying Arenal or Vieth—and communicated D2 Equity had been told “there was little hope” of a future relationship. About two weeks later, Hilbert privately e-mailed one of the co-owner trusts, reporting: “A few weeks ago in a really good conversation I had with [the company’s lawyer], who I believe has long supported the notion that [the company] acquire [my minority interest], he confided that he was working on Krueger to make [me] another offer and that he hoped to have some results in the next couple of weeks.” (Italics added.)

Two months later, in December 2013, Hilbert invited Vieth and Arenal to a lunch where Hilbert provided the company’s updated financial statements. Hilbert expressed discomfort with the amount of the broker agreement’s commission but did not seek to renegotiate it. Hilbert also did not communicate that Arenal should stop looking for a third party buyer.

Three weeks later, Hilbert privately followed up with one of his co-owner trusts—again, without copying Arenal or Vieth—stating both the company’s lawyer and former chief financial officer were “still planning to get with Kruger [sic] to formulate some sort of an offer” to Hilbert. Five weeks after that, Hilbert privately updated the trust: “[The company’s lawyer] tells me again that he expects [the company] to make [me] some sort of an offer . . . around [February 10, 2014].” At some point during this time frame, Hilbert secured another updated set of the company’s financial statements, but did not provide them to Arenal.

A few months later, in April 2014, Hilbert and the company finalized the sale of Hilbert’s minority interests to the company for $7 million, to be paid in annual installments of $1 million (the buyback). Based upon the parties’ discussion of the record, it is undisputed there had not been a pending third party offer to purchase the interest at that time. It also appears to be undisputed that, between the 2011 e-mail and the 2014 buyback, neither Hilbert nor Vieth (or Arenal) ever affirmatively stated what his understanding of the first refusal condition was, after agreeing the right of first refusal did not exist.

About three months later, in July 2014, after signing the buyback papers, Hilbert told Vieth about the buyback and took the position that no commission was owed under the broker agreement. Vieth expressly assigned “the entire [broker] agreement including one hundred percent of all the [commission] due” to Arenal, who filed the lawsuit in this case.

E. This Action and the Trial Court’s Rulings on Cross-motions for Summary Judgments

In his operative complaint, Arenal alleged four claims against Hilbert (through three causes of action): 1) fraud, 2) breach of an express term of a written contract, 3) breach of the implied covenant of good faith and fair dealing, and 4) declaratory relief. During discovery, Hilbert testified in a deposition he had believed a commission would have been owed if Arenal had “brought” a third party buyer.

The parties filed cross-motions for summary judgments or adjudications. After two rounds of briefing, the trial court summarily overruled all evidentiary objections by both sides, denied Arenal’s motion, and ruled in favor of Hilbert’s motion on three of Arenal’s four claims.

Specifically, the trial court first granted summary adjudication against Arenal’s claim for declaratory relief, finding “the issues . . . over-ripe for declaration.” Next, on Arenal’s fraud claim, the court found it had not been properly assigned to Arenal and, in any event, failed on its merits “for want of any concealed fact, duty to speak, or damage.” As to the breach of written contract claim, the court disagreed with Arenal’s characterization of the broker agreement and found it consisted of a single condition—for Arenal to find “a ready, willing and able buyer”—that had not been impossible to fulfill and thus was not void, contrary to Arenal’s argument. The court also rejected Arenal’s arguments to apply the doctrines of estoppel and waiver to the contract claim. The court concluded, among other things, “[t]he only reasonable inference to be drawn from [Arenal’s] conduct [was] that he understood he needed a ready, willing and able [third party] buyer to trigger a commission.”

Notwithstanding the above, as to Arenal’s contract claim for breach of the implied covenant of good faith and fair dealing, the court found it “ripe with factual disputes” as to “whether [Hilbert] frustrated [Arenal]’s efforts to find a ready, willing and able buyer for his [minority interest in the company].” Arenal, however, voluntarily dismissed that surviving claim shortly thereafter. Neither the court’s ruling on the dismissed claim nor its denial of Arenal’s motion are at issue on appeal.

 

II

DISCUSSION

A. Standard of Review and Relevant Law

We review de novo the trial court’s grant of summary adjudication against Arenal’s claims for breach of a written contract, declaratory relief, and fraud, to determine whether Hilbert was entitled to summary adjudication on those claims, including whether there are any triable issues of material fact to resolve. (Wiener v. Southcoast Childcare Centers, Inc. (2004) 32 Cal.4th 1138, 1142; Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850; American States Ins. Co. v. Progressive Casualty Ins. Co. (2009) 180 Cal.App.4th 18, 25.) We construe the moving party’s papers and evidence strictly and the opposing party’s papers and evidence liberally, with doubts as to the propriety of granting summary judgment resolved in favor of denying it. (Hamburg v. Wal-Mart Stores, Inc. (2004) 116 Cal.App.4th 497, 502; City of Vista v. Robert Thomas Securities, Inc. (2000) 84 Cal.App.4th 882, 886.)

We will “affirm the judgment of the trial court if it is correct on any theory of law applicable to the case, including but not limited to the theory adopted by the trial court, providing the facts are undisputed” (Fireman’s Fund Ins. Co. v. Maryland Casualty Co. (1994) 21 Cal.App.4th 1586, 1595), and if a ground for affirmance is one “‘not relied upon by the trial court’” after affording “‘the parties an opportunity to present their views on the issue by submitting supplemental briefs.’” (Code Civ. Proc., § 437c, subd. (m)(2).) On appeal, “the appellant has the burden of showing error, even if he did not bear the burden in the trial court. [Citation.] . . . ‘As with an appeal from any judgment, it is the appellant’s responsibility to affirmatively demonstrate error and, therefore, to point out the triable issues the appellant claims are present by citation to the record and any supporting authority.’” (Claudio v. Regents of University of California (2005) 134 Cal.App.4th 224, 230.) 

B. Breach of Written Contract Claim

We agree with the result of the trial court’s ruling in favor of Hilbert’s motion for summary adjudication regarding Arenal’s breach of written contract claim. Hilbert contends there was no breach because neither of the broker agreement’s conditions for payment were met. Arenal counterargues on three grounds: Civil Code section 1441, waiver, and estoppel. We reject all three grounds.

1. First refusal condition and section 1441

We reject Arenal’s invitation to apply section 1441 to the first refusal condition so that any buyback obligated Hilbert to pay a commission. Arenal cites to Carlisle v. Lady (1930) 109 Cal.App. 567, 571-572, where the Third District Court of Appeal stated “[t]he [equitable] rule [of section 1441] can mean only that [an impossible] condition is void to the extent that fulfillment is impossible.” Applying that court’s rationale here results in a conclusion contrary to Arenal’s proffered construction.

The signers of the broker agreement understood the exercise of a right of first refusal as a specific protocol which depended upon the existence of a third party offer at the time it was exercised. So, even if a technical exercise of the right became “impossible,” it was more consistent with the parties’ intentions—and therefore more equitable—that the condition then be construed as retaining its requirement of a competing third party offer for Hilbert’s minority interest to have existed at the time of a buyback, in order to trigger an obligation to pay a commission. (See Wal-Noon Corp. v. Hill (1975) 45 Cal.App.3d 605, 611-612 [“That which is necessarily implied in the language of a contract is as much a part of it as that which is expressed”].) Because it is undisputed no third party offer was pending at the time of the buyback, it is undisputed the condition was not satisfied. Accordingly, Hilbert’s nonpayment of the commission was not a breach of the broker agreement according to its express terms as well as section 1441. (§ 1436.)

2. Waiver

We reject Arenal’s arguments to bypass the first refusal condition based upon a theory of waiver. Arenal contends a triable issue of material fact exists as to whether Hilbert waived the first refusal condition. Hilbert counters that Arenal’s argument fails because there was no additional consideration for the purported waiver and, in any case, the conclusion proffered by Arenal would amount to an impermissible rewriting of the contract.

Waiver requires the finding of an “intentional act” that logically includes “knowledge of the right being waived.” (In re Marriage of Carpenter (2002) 100 Cal.App.4th 424, 428.) The undisputed facts, even construed in favor of Arenal, foreclose a triable issue of material fact on this point.

Arenal does not argue or cite to any evidence demonstrating that either he or Vieth even attempted to communicate their subjective postcontract understanding of the first refusal condition to Hilbert, prior to the buyback. Equally important, Arenal has not produced any evidence impeaching what Hilbert contends was his understanding at all times—i.e., that a pending third party offer was required to satisfy the postcontract construction of the first refusal condition.

Based on this record, there is “‘no room for a reasonable difference of opinion’” (Preach v. Monter Rainbow (1993) 12 Cal.App.4th 1441, 1450) that Hilbert neither intentionally relinquished his contractual right or acted in a manner “‘so inconsistent with an intent to enforce the right as to induce a reasonable belief that such right has been relinquished.’” (Crest Catering Co. v. Superior Court of Los Angeles County (1965) 62 Cal.2d 274, 278.) Based upon a lack of evidence demonstrating a mutual postcontract understanding of the first refusal condition, Arenal’s theory of inducement through conduct amounts to insufficient speculation as to the existence of a triable issue of material fact. (See Annod Corp. v. Hamilton & Samuels (2002) 100 Cal.App.4th 1286, 1298-1299 [“‘“When opposition to a motion for summary judgment is based on inferences, those inferences must be reasonably deducible from the evidence, and not such as are derived from speculation, conjecture, imagination, or guesswork”’”].)

3. Arenal’s estoppel argument

We reject Arenal’s arguments to bypass the first refusal condition based upon a theory of estoppel. Arenal asserts that “‘justice and good conscience’” compel the application of equitable estoppel because Hilbert’s “affirmations” led Vieth and Arenal to believe the commission “would be owed upon a successful sale without qualification” and “[b]efore the [buyback], Hilbert never told Vieth or Arenal that [Hilbert] did not owe [the commission] if [a buyback occurred].” Hilbert counters that applying estoppel as Arenal asserts would inequitably amount to a rewriting of the broker agreement. Hilbert also denies he harbored a secret intention to not pay, as claimed by Arenal.

Four elements necessary to apply the doctrine of equitable estoppel are: “‘(1) that the party to be estopped must be apprised of the facts; (2) he must intend that his conduct will be acted upon, or act in such a manner that the party asserting the estoppel could reasonably believe that he intended his conduct to be acted upon; (3) the party asserting the estoppel must be ignorant of the true state of the facts; and (4) he must rely upon the conduct to his injury.’” (Ware Supply Co. v. Sacramento Savings & L. Assn. (1966) 246 Cal.App.2d 398, 407.)

Arenal’s estoppel argument fails because there was no reasonable reliance. (Evid. Code, § 623 [requirement that the estopped party “led another to believe a particular thing true”]; Biss v. Bohr (1995) 40 Cal.App.4th 1246, 1252 [reliance must be reasonable].) First, Hilbert’s undisputed conduct—including the 2011 e-mail and the forwarded e-mail—do not demonstrate the “affirmations” claimed by Arenal. Next, the undisputed record shows that Arenal and Vieth—each with more than 20 years of experience in the financial services industry—did not even attempt to clarify with Hilbert what the first refusal condition meant postcontract, as mentioned above. (See discussion, ante, at pt. II.B.2.)

In sum, any belief by Arenal and Vieth that the first refusal condition meant what they claim was not the product of reasonable reliance. Additionally, we agree with Hilbert that holding him estopped in the manner Arenal asserts would lead to an inequitable result of imposing a construction of the condition that Hilbert did not originally intend. (See discussion, ante, at pt. II.B.) We agree with the result of the trial court’s ruling that Hilbert was entitled to summary adjudication with respect to Arenal’s claim for breach of written contract.

C. Declaratory Relief

Next, Arenal’s argument to reverse the trial court’s grant of summary adjudication against his declaratory relief claim is based upon the merits of his breach of written contract claim. Accordingly, it follows from our discussion above he has not met his burden to show the trial court committed error with respect to his declaratory relief claim. (Claudio v. Regents of University of California, supra, 134 Cal.App.4th at p. 230.)

D. Fraud Claim

Finally, we hold the trial court’s grant of summary adjudication on Arenal’s fraud claim was correct because Arenal has not shown he reasonably relied on Hilbert’s purportedly fraudulent misrepresentation. Arenal contends “the evidence shows reasonable reliance.” (Capitalization and boldfacing omitted.) We disagree.

Under a theory of fraudulent concealment, a plaintiff must show that reliance upon the purportedly fraudulent conduct was both actual and reasonable. (Hoffman v. 162 North Wolfe LLC (2014) 228 Cal.App.4th 1178, 1187, 1194; see Jud. Council of Cal. Civ. Jury Instns. (2020) CACI No. 1908.) “‘If the conduct of the plaintiff in the light of his own intelligence and information was manifestly unreasonable . . . he will be denied a recovery.’” (Hoffman at p. 1194; Gray v. Don Miller & Associates, Inc. (1984) 35 Cal.3d 498, 503.)

Under the circumstances of this case, the undisputed conduct of Arenal and Vieth support summary adjudication in favor of Hilbert. As discussed above, there was no direct communication or representation between Hilbert and Arenal or Vieth as to what their respective postcontract understandings of the first refusal condition were after agreeing the right of first refusal did not exist. (See discussion, ante, at pt. II.B.2.) Also as discussed above, neither Arenal nor Vieth—each with more than 20 years of experience in the financial services industry—attempted to clarify with Hilbert what the condition meant postcontract. (See discussion, ante, at pt. II.B.3.) Additionally, we cannot infer any reason why the parties were prevented from achieving clarification.

Contrary to Arenal’s claim, the following alternative postcontract understanding of the first refusal condition existed: a pending third party offer at the time of a buyback was still needed to trigger Hilbert’s obligation to pay the commission. (See discussion, ante, at pt. II.B.1.) There is no evidence Hilbert represented an understanding contrary to what he now claims. Nor is there evidence he was made aware of Arenal’s contrary construction of the condition. Given these circumstances, it was unreasonable for Arenal and Vieth to have simply relied upon their unilateral understanding of the condition and then later claim fraud based upon conduct by Hilbert that was consistent with his own alternative understanding. (See Annod Corp. v. Hamilton & Samuels, supra, 100 Cal.App.4th at pp. 1298-1299 [“‘“When opposition to a motion for summary judgment is based on inferences, those inferences must be reasonably deducible from the evidence, and not such as are derived from speculation, conjecture, imagination, or guesswork”’”]; see Preach v. Monter Rainbow, supra, 12 Cal.App.4th at p. 1450 [“‘[An] issue of fact becomes one of law and loses its triable character if the undisputed facts leave no room for a reasonable difference of opinion’”].)

The reasonable reliance analysis of the Sixth District Court of Appeal in Hoffman v. 162 North Wolfe LLC, supra, 228 Cal.App.4th at pages 1193-1198, is not directly on point, but edifying. That case involved landowner plaintiffs claiming their neighbor fraudulently asserted easement rights against the plaintiffs, after allegedly engaging in conversations that plaintiffs claimed created a false understanding. (Id. at pp. 1180-1181.) In the Hoffman court’s reasonable reliance analysis, it discussed the principal plaintiff’s experience as a real estate agent, owner of businesses, and real property owner, in concluding his reliance on the conduct alleged had been unreasonable. (Id. at pp. 1195-1197.) The Hoffman court also explicitly cited the plaintiff’s “failure to make further inquiry” as part of its reasoning. (Id. at pp. 1196-1197.) The same factors applied to the circumstances of this case, independently support our conclusion that neither Arenal nor Vieth reasonably relied upon the conduct proffered.

Arenal’s citation to Mirkin v. Wasserman (1993) 5 Cal.4th 1082, 1093, offers no support to his position because that case was about the relationship between the common law claim of deceit and the element of actual reliance, in the context of a securities litigation class action. (Id. at pp. 1089-1090.) Contrary to Arenal’s briefing, nothing in the holdings of Mirkin supports a conclusion that Arenal or Vieth reasonably relied upon the conduct they proffer in this case. In sum, we conclude Arenal cannot establish the necessary element of reasonable reliance, and therefore, we agree with the trial court’s ruling that there was no triable issue of material fact and that Hilbert was entitled to summary adjudication on Arenal’s fraud claim.

 

III

DISPOSITION

The judgment is affirmed. Hilbert is entitled to recover his costs on appeal.

MOORE, ACTING P. J.

WE CONCUR:

FYBEL, J.

IKOLA, J.