Opinion
Introduction
Penal Code section 496, subdivision (a) (section 496(a)) makes receiving or buying property “that has been obtained in any manner constituting theft” a criminal offense punishable by imprisonment. Section 496, subdivision (c) (section 496(c)) provides that any person “who has been injured by a violation of [section 496(a)] . . . may bring an action for three times the amount of actual damages, if any, sustained by the plaintiff, costs of suit, and reasonable attorney’s fees.” (Italics added.)
A default judgment was entered against Igal J. Feibush for breach of contract, fraud, and treble damages under section 496(c). He challenges the treble damages on the ground he was never convicted in a criminal proceeding of the acts giving rise to liability under section 496(c). He argues a defendant must be convicted under section 496(a) before a private plaintiff may recover treble damages against that defendant under section 496(c).
We hold, based on the statutory language, a criminal conviction under section 496(a) is not a prerequisite to recovery of treble damages under section 496(c). We also hold the phrase “any manner constituting theft” under section 496(a) includes theft by false pretense. We therefore affirm the judgment.
Facts and Procedural History
Sharon Bell filed a complaint asserting causes of action against Feibush for breach of contract, fraud, and violation of section 496(a). As a sanction for abuse of the discovery process, the trial court struck Feibush’s answer and deemed admitted certain requests for admission. Bell requested entry of a default judgment, and a default prove-up hearing was conducted.
The evidence presented at the default prove-up hearing showed the following. Feibush induced Bell to loan him $202,500 based on the false pretense he owned the trademark “Toughlove” and he needed the money to settle a
Feibush’s representations were false, and the so-called toughlove business was a scam. When Bell asked for her money back, Feibush gave her a “litany of excuses” and never repaid her.
At the trial court’s request, Bell submitted supplemental briefing and declarations on the issues of attorney fees and trebling damages under section 496(c). The court heard oral argument on those two issues. Feibush was present but did not formally appear and was not represented by counsel. Bell’s counsel argued Feibush had violated section 496(a) because “[h]e stole the property by means of a false artifice, and he maintained custody of that property to the exclusion of my client.” The trial court awarded Bell treble damages but stated, “I really don’t like it, to be honest with you, but that is what [Penal Code section 496] says.”
Default judgment was entered in October 2011. The judgment awards Bell damages of $202,500 plus prejudgment interest on her breach of contract and fraud causes of action, and awards her treble damages of $607,500 on her section 496(a) cause of action. Feibush timely appealed from the default judgment.
Discussion
I. Section 496(c) Does Not Require a Criminal Conviction Under Section 496(a).
The trial court awarded Bell treble damages under section 496(c), which reads: “Any person who has been injured by a violation of subdivision (a) or (b) may bring an action for three times the amount of actual damages, if any, sustained by the plaintiff, costs of suit, and reasonable attorney’s fees.” Section 496(a) makes receiving, buying, or withholding property “that has been obtained in any manner constituting theft” an act punishable by imprisonment.
Penal Code section 496 does not state a criminal conviction under section 496(a) is required for a private plaintiff to recover treble damages under section 496(c). Nor does section 496(c) limit recovery of treble damages to a crime victim. Instead, section 496(c) permits “[a]ny person” who “has been injured by a violation of subdivision (a) or (b)” to “bring an action” to recover treble damages. Both section 496(a) and section 496, subdivision (b) identify a subject: “Every person” (in § 496(a)) and “Every swap meet vendor, as defined . . .” (in § 496, subd. (b)). Both section 496(a) and section 496, subdivision (b) then state that the identified subject who engages in certain described conduct “shall be punished.”
Heritage Cablevision of Cal., Inc. v. Pusateri (1995) 38 Cal.App.4th 517 [45 Cal.Rptr.2d 191] (Heritage) supports our interpretation of the word “violation.” In Heritage, a cable television company sued the defendant for civil liability under Penal Code section 593d, which imposes criminal and
The Court of Appeal, reversing, concluded a criminal conviction under Penal Code section 593d was not a prerequisite to civil liability under former section 593d, subdivision (d). (Heritage, supra, 38 Cal.App.4th at p. 519.) The court found no ambiguity, uncertainty, or doubt about the meaning of the phrase “ ‘person who violates,’ ” and stated: “The noun form of violates, violation, means: ‘Injury; infringement; breach of right, duty or law; ravishment; seduction. The act of breaking, infringing, or transgressing the law.’ [Citation.] None of these meanings require a prefatory criminal conviction. Conviction generally means ‘the result of a criminal trial which ends in a judgment or sentence that the accused is guilty as charged.’ [Citation.] There is simply no need for further judicial construction of [former] section 593d, subdivision (d).” (Heritage, supra, at p. 521.)
The Court of Appeal added that this plain meaning interpretation of the phrase “ ‘person who violates’ ” is consistent with the statutory objective. (Heritage, supra, 38 Cal.App.4th at p. 522.) The deterrent effect of the criminal sanction for theft of cable television is “illusory” because “it is commonly supposed that law enforcement officials consider theft of cable services to be a low priority crime . . . .” (Ibid.) “Thus, the purpose of the statute would be defeated if the statute operated to condition civil liability upon criminal liability.” (Ibid.)
A criminal conviction likewise is not a prerequisite to recovery of treble damages by any person injured by a violation of section 496(a). Had the Legislature intended to make a criminal conviction a prerequisite to treble damage liability under section 496(c), it easily could have said so.
Although we find no ambiguity or uncertainty in section 496(c), we note that our construction is consistent with the statutory purpose expressed in the legislative history. That history was explained in Citizens of Humanity, LLC v. Costco Wholesale Corp. (2009) 171 Cal.App.4th 1, 17-18 [89 Cal.Rptr.3d 455], disapproved on another ground in Kwikset Corp. v. Superior Court (2011) 51 Cal.4th 310, 337 [120 Cal.Rptr.3d 741, 246 P.3d 877], as follows:
This history shows the Legislature believed the deterrent effect of criminal sanctions was not enough to reduce thefts. The means to reduce thefts, the Legislature concluded, was to dry up the market for stolen goods by permitting treble damage recovery by “any person” injured by the knowing purchase, receipt, concealment, or withholding of property stolen or obtained by theft. Requiring a criminal conviction under section 496(a) or section 496(c) before an injured person could recover treble damages would not advance the stated goal because civil recovery would be limited to those instances in which law enforcement authority decided to initiate and complete prosecutions.
II. Section 496(a) Includes Theft by False Pretense.
Feibush asserts that awarding Bell treble damages under section 496(c) “opens the door to any collecting creditor to claim that a breach of contract action constitutes a fraud, and in turn constitutes a theft, under the California Penal Code for purposes of [section] 496(a).”
In 1927, the Legislature consolidated the separate common law crimes of larceny, embezzlement, and theft by false pretense in Penal Code section 484, subdivision (a).
III. Other Arguments
Citing Penal Code section 683, Feibush argues a civil court cannot determine his criminal liability. Section 683 provides the definition of “criminal action” as “[t]he proceeding by which a party charged with a public offense is accused and brought to trial and punishment.” The trial court did not convict Feibush of a criminal offense and was not asked to do so. The court found Bell had been injured because Feibush violated section 496(a).
Feibush argues that under section 496(a), he cannot be liable for both theft and receiving stolen property. The last paragraph of section 496(a) states: “A
Feibush argues that permitting Bell to recover treble damages under section 496(c) is contrary to public policy and permits litigants to circumvent limitations on remedies. Our decision to affirm the default judgment is based on straightforward statutory interpretation. Section 496(a) extends liability to “[e]very person who buys or receives any property that has been stolen or that has been obtained in any manner constituting theft.” (Italics added.) Penal Code section 484, subdivision (a) describes the acts constituting theft to include theft by false pretense, which is the consensual but fraudulent acquisition of property from its owner. (Pen. Code, §§ 484, subd. (a), 532.) Feibush was found liable for fraud, i.e., for the fraudulent acquisition of property (money) from its owner (Bell). “Anything that could be the subject of a theft can also be property under section 496.” (People v. Gopal (1985) 171 Cal.App.3d 524, 541 [217 Cal.Rptr. 487].) A principal in the actual theft of the property may be convicted for either theft or receiving stolen property under section 496(a).
We are not unmindful of Feibush’s policy concerns about the potential consequences of our interpretation of section 496(c). But it is the task of the Legislature to address those policy concerns. It is not this court’s role to replace the word “violation” with the word “conviction” in the statute.
Finally, we note, because this is an appeal from a default judgment, we do not address the sufficiency of the evidence or the burden of proof applicable to recovery of treble damages under section 496(c). (See Uva v. Evans (1978) 83 Cal.App.3d 356, 362-363 [147 Cal.Rptr. 795] [appellate review of default judgment is limited to jurisdiction, defects in pleadings, and claims of excessive damages].)
The judgment is affirmed. Respondent shall recover costs incurred on appeal.
O’Leary, R J., and Aronson, J., concurred.
The first sentence of section 496(a) reads: “Every person who buys or receives any property that has been stolen or that has been obtained in any manner constituting theft or extortion, knowing the property to be so stolen or obtained, or who conceals, sells, withholds, or aids in concealing, selling, or withholding any property from the owner, knowing the
The first paragraph of Penal Code section 496, subdivision (b) reads: “Every swap meet vendor, as defined in Section 21661 of the Business and Professions Code, and every person whose principal business is dealing in, or collecting, merchandise or personal property, and every agent, employee, or representative of that person, who buys or receives any property of a value in excess of nine hundred fifty dollars ($950) that has been stolen or obtained in any manner constituting theft or extortion, under circumstances that should cause the person, agent, employee, or representative to make reasonable inquiry to ascertain that the person from whom the property was bought or received had the legal right to sell or deliver it, without making a reasonable inquiry, shall be punished by imprisonment in a county jail for not more than one year, or imprisonment pursuant to subdivision (h) of Section 1170.”
The purpose of the consolidation was “to remove the technicalities that existed in the pleading and proof of these crimes at common law.” (People v. Ashley (1954) 42 Cal.2d 246, 258 [267 P.2d 271].) Although consolidated into a single code section, the offenses are “aimed at different criminal acquisitive techniques” and maintain their distinct elements. (Ibid.)