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Hyland v. Hughes Aircraft Company2/26/2002
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 977(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 977(b). This opinion has not been certified for publication or ordered published for purposes of rule 977.
Virginia E. Hyland (plaintiff) appeals judgment entered in favor of defendants in her action to recover under a 1983 letter agreement (Letter Agreement) granting her father, a long-time executive of Hughes Aircraft Company (Hughes), the right to receive "capital stock or other units of equity" upon a sale or other disposition of Hughes. Defendants prevailed below after a bifurcated court trial on statute of limitations grounds, successfully arguing that plaintiff's 1996 discovery of the Letter Agreement was untimely: plaintiff's father knew or should have known of certain events in 1985 (the sale of Hughes to General Motors and the creation of the "Long Term Incentive Plan," pursuant to which Hughes employees were issued Restricted Cash Units and given the right to purchase GMH stock) that entitled him to bring an action to enforce the Letter Agreement.
Plaintiff contends the trial court erred in trying the statute of limitations issue without a jury and in concluding that the statute of limitations barred her action. She contends defendants are estopped by their own conduct from relying on the statute of limitations because they wrongfully told her father he was not entitled to anything under the Letter Agreement, and because her discovery of the Letter Agreement in 1996, about which she knew nothing prior to that time, entitles her to rely on the discovery exception to the statute of limitations. She also asks this court to enter judgment in her favor on her complaint, contending the unambiguous terms of the Letter Agreement and the evidence adduced at the bifurcated trial entitle her to recover as a matter of law. She lastly contends the trial court improperly denied her motion for sanctions based upon Hughes's misleading statements to the court and its spoliation of evidence.
We conclude that the discovery rule exception to the statute of limitations governs plaintiff's claims and that her commencement of the instant action was timely. We further conclude that plaintiff is entitled to recover under the Letter Agreement because the GMH tracking stock issued in connection with GM's purchase of Hughes constitutes the "capital stock or other units of equity" referred to in the Letter Agreement. We therefore reverse and remand this matter for further proceedings consistent with this opinion.
FACTUAL BACKGROUND AND PROCEDURAL HISTORY
1. The Letter Agreement.
Lawrence A. "Pat" Hyland (Hyland) was President and CEO of respondent Hughes from 1954 to 1980. After his retirement from Hughes in 1980, Hyland continued to serve on Hughes's board of directors until 1984 and continued to play an active role on Hughes's executive team by serving as a consultant pursuant to a consulting agreement to the board of directors until a few days before his death at age 92 in November 1989. Appellant is the only child and sole heir of Hyland.
In 1983, Hughes, which was owned entirely by the Howard Hughes Medical Institute (HHMI), was grooming itself to be acquired. Allen Puckett, then President of Hughes, sent a letter memorandum dated April 27, 1983, to Hyland (Letter Agreement), the purpose of which was to "serve as our agreement . . . with regard to your potential equity participation in Hughes Aircraft Company." The Letter Agreement stated that, " n consideration of your prior services and continuin
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