Miller v. Bechtel Corp

In Miller v. Bechtel Corp. (1983) 33 Cal.3d 868, the plaintiff entered into a marital settlement agreement in which she agreed to relinquish her interest in half of her husband's Bechtel stock in exchange for $ 147,000 in cash, one half the stock's represented value. The plaintiff later sued, contending that the stock was worth more than represented, and that her husband had committed fraud. The trial court granted summary judgment, in part, ruling that the plaintiff was on inquiry notice of the value of the stock. The evidence established that she knew that the price was determined by a shareholder vote. Further, it was uncontroverted that she only inquired into the method of valuation after she entered into the settlement agreement, and even then did not pursue it. Although she contended that Bechtel would have refused to reveal its valuation method, this claim was unsubstantiated. In affirming, the Supreme Court noted that the plaintiff's attorneys suspected that the agreement did not reflect the true value of the stock but chose not to pursue their concerns. "Since plaintiff's representatives chose not to pursue their inquiry further despite their suspicions, she is charged with knowledge of facts which would have been revealed if she had pursued the investigation. As we conclude above, we cannot assume that such an inquiry would have been unavailing." ( Miller, supra, 33 Cal.3d at p. 875.)