THE PEOPLE, Plaintiff and Respondent, v. MICHAEL WOOTEN, Defendant and Appellant.
No. B089797
Second Dist., Div. Six.
May 7, 1996
Eskin & Jackson, Diane M. Matsinger and George C. Eskin for Defendant and Appellant.
Daniel E. Lungren, Attorney General, George Williamson, Chief Assistant Attorney General, Carol Wendelin Pollack, Assistant Attorney General, Kenneth C. Byrne and Lisa J. Brault, Deputy Attorneys General, for Plaintiff and Respondent.
OPINION
YEGAN, J.—Michael Wooten appeals from the judgment entered on a jury verdict convicting him of one count of felony grand theft. (
Appellant contends: (1) the trial court erroneously restricted the presentation of defense evidence; (2) the prosecution could not, as a matter of law, establish theft on a false pretense theory; and (3) the jury was erroneously instructed. We affirm.
Facts
Appellant and his partner, Frank Marasco (Marasco), were the principals of Darrik-Marten Company (Darrik-Marten), a firm engaged in real estate development. They obtained a $550,000 loan from Community Group Funding, Inc. (CGF) to construct a subdivision in Santa Paula. The two-page loan agreement states, “[t]he loan will consist of the following disbursements:” (1) $110,000 to Darrik-Marten; (2) $172,000 for loan fees, a payment to Darrik-Marten and interest reserves; and (3) $268,000 for construction costs and interest reserves.
Before the loan agreement was signed, Darrik-Marten did not discuss with CGF whether it would hire a general contractor for the project. After the agreement was signed, however, appellant and Marasco told CGF that Gary Johnson (Johnson) had been hired as the general contractor and would be paid $16,000. In February 1992, appellant submitted a construction budget to CGF which listed Johnson as the general contractor. Johnson also signed the building permit and subcontracts. In fact, appellant and Johnson agreed that CGF would pay the fee to Johnson, that Johnson would return the fee to Darrik-Marten and that appellant would supervise the project himself.
On March 9, 1992, appellant‘s partner mailed to CGF a voucher for a $10,000 payment to Johnson. The voucher was accompanied by an invoice from Johnson for “[s]upervision of tract 4753 which includes building of roads [and] cul-de-sac [and] all underground utilities.” Marasco also sent a letter falsely stating: “I‘ve included the next draw for our contractor, Gary Johnson, in yesterday‘s mailing. [¶] He won‘t receive another payment until after all the work is complete, and the City has signed it off. Normally we pay him monthly, but this job shouldn‘t take more than six weeks. [¶] Gary will want to begin right away.”
Ten days later, CGF wrote a check to Johnson for $10,000. Appellant gave the check to Johnson and Johnson gave appellant his own check for the same amount. Appellant deposited Johnson‘s check into the Darrik-Marten account and immediately paid himself $5,000. It is undisputed that $10,000 was a reasonable supervision fee and was $6,000 less than the amount budgeted.
Don Lukens, the owner of CGF, was responsible for approving disbursements under the loan. It was his understanding that the loan agreement did not expressly require Darrik-Marten to use a general contractor or give CGF the right to reject a contractor retained by Darrik-Marten. Nevertheless, Lukens thought it was important to have a general contractor working on the project, and he believed appellant and Marasco when they told him that
Lukens acknowledged that the loan agreement did not expressly allow CGF to withhold loan disbursements so long as the funds requested were actually used on the project. He testified, however, that he approved the disbursement to Johnson based upon his understanding that Johnson was the licensed general contractor working on the project. Lukens unequivocally testified that he would not have paid Johnson if he had known the truth.
When Darrik-Marten lost the project in foreclosure, appellant got a job managing a small cardroom in Oxnard. He and Marasco then applied for a permit to build their own cardroom. While the application was pending, the Ventura County District Attorney began to investigate appellant. By late spring 1993, appellant knew he was under investigation for making illegal campaign contributions.
The $10,000 payment to Johnson was discovered during the course of that investigation. In early August 1993, Johnson and Lukens agreed that an investigator could tape-record their telephone conversations with appellant. During the first conversation, appellant told Lukens and CGF‘s attorney that he did not know why Johnson had returned the $10,000 to Darrik-Marten. Appellant also assured Lukens that Johnson actually performed work on the project.
During the second conversation, appellant asked Johnson to exaggerate his involvement in the project: “[H]ere‘s how I want to couch that, okay? And see, see if you can live with this. [Y]ou helped me get the thing put together on the front end. [¶] . . . [¶] You know, you just walked it with me and told me what we needed to do. That kind of stuff. And . . . I want to take the position that we were gonna use you and that, uh, you know, we just decided not to. Um, and that we had already paid you the first installment and when we decided not to use you, you gave us the money back. [¶] . . . [¶] [Johnson]: Jesus, I don‘t know. Um, because, you know, technically, you know, we lied about this thing. [¶] [Appellant]: You know I know that.” When Johnson expressed concerns about lying, appellant told him nothing would happen if they both told the same story because, “nobody, nobody can prove it one way or the other, the two of us saying that.”
Limitations on the Presentation of Defense Evidence.
At trial, the prosecution argued that the taped telephone conversation demonstrated appellant‘s consciousness of guilt. Appellant attempted to
Appellant argues that he was denied a fair trial because the trial court prevented him from introducing evidence to corroborate these claims. The argument fails.
Although “wide latitude should be given to cross-examination” the trial court retains discretion to prohibit the introduction of evidence that is confusing or unduly time consuming. Its exercise of that discretion will not be overturned in the absence of a clear abuse. (People v. Cooper (1991) 53 Cal.3d 771, 816.) There is no indication that appellant‘s presentation of evidence was limited by anything other than the hearsay rule, appellant‘s failure to provide proper foundation, and other noncontroversial evidentiary rulings. The trial court did not curtail appellant‘s cross-examination of Johnson and Marasco. Appellant‘s counsel voluntarily terminated it. The reporter‘s transcript of Johnson‘s and Marasco‘s cross-examination is 35 and 42 pages, respectively.
Similarly, appellant was allowed to explain what he meant by his comments to Johnson and Lukens, the context in which the district attorney‘s investigation occurred and the effect that investigation had on his state of mind. In sum, appellant presented his version of the facts to the jury and the jury rejected it. No error occurred.
Theft by False Pretenses
A theft conviction on the theory of false pretenses requires proof that (1) the defendant made a false pretense or representation to the owner of property; (2) with the intent to defraud the owner of that property; and (3) the owner transferred the property to the defendant in reliance on the representation. (Perry v. Superior Court (1962) 57 Cal.2d 276, 282-283; People v. Whight (1995) 36 Cal.App.4th 1143, 1151.) In this context, reliance means that the false representation “materially influenced” the owner‘s decision to part with his property; it need not be the sole factor motivating the transfer. (People v. Ashley (1954) 42 Cal.2d 246, 259.) A victim does not rely on a false representation if “there is no causal connection shown between the
Appellant argues his conviction must be reversed because the jury was instructed on an erroneous theory of grand theft and it is impossible to determine whether the verdict was based in whole or in part on that theory. (People v. Green (1980) 27 Cal.3d 1, 69.) According to appellant, false pretense does not apply as a matter of law because appellant did not procure the loan agreement through fraud and once that agreement was signed, CGF had no choice but to approve every request for disbursement submitted by Darrik-Marten. Thus, when Lukens approved the March 9, 1992, request for payment, he relied solely upon a preexisting contractual obligation and not upon any representation concerning Johnson‘s involvement in the project.
Appellant‘s argument fails. There is no express term requiring CGF to “rubber-stamp” every disbursement request submitted by Darrik-Marten, no matter how false or inaccurate. By appellant‘s theory, a party to a contract who, at first, honestly obtains a loan commitment has an entitlement to disbursements even if he or she, with criminal intent, thereafter lies to obtain the disbursements without building the project for which the loan was obtained. If nothing else, the implied covenant of good faith and fair dealing allowed CGF to insist upon accurate information from Darrik-Marten and to refuse disbursements when based upon prevarication.
Moreover, there is evidence that the parties established a course of dealing which allowed CGF to refuse loan disbursements under these circumstances. Lukens believed that he had the ability to deny or delay disbursements based on irregularities in a voucher or other problems with the project. Lukens also testified that he in fact relied on the statements included in the March 9, 1992, voucher and invoice. He expressly testified that he would not have approved the payment to Johnson had he known Johnson would not perform any work on the project. Appellant and his partner shared that understanding. They chose to use a voucher form which specifically declared that the person named in the voucher had done the work described and would be paid for it. Marasco falsified the request for payment because he was afraid CGF would not approve, or would delay the disbursement if it knew the truth.
Jury Instructions—False Pretense
Appellant contends the trial court erred in refusing to instruct the jury that, if it found CGF had a legal obligation to approve the March 9, 1992, voucher, CGF could not have relied on the information stated in the voucher. The trial court correctly refused this instruction because the subject of reliance was adequately addressed in the standard instructions on false pretenses. (CALJIC Nos. 14.10, 14.11 (5th ed. 1988 bound vol.).)
The jury was informed that it could not convict appellant on this theory unless it found that a misrepresentation was believed by CGF and “was material in inducing [CGF] to part with [its] money . . . even though the false . . . representation . . . was not the sole cause . . . .” In addition, the jury was instructed to acquit if it found that CGF, “for any reason” did not rely on the representations made by appellant. These instructions allowed the jury to acquit if it found that CGF relied on something other than appellant‘s statements concerning Johnson‘s work. Indeed, appellant‘s counsel argued this theory of defense extensively in closing.
Nor did the trial court err by refusing to instruct the jury that CGF had a “pre-existing legal obligation” to disburse the $10,000 pursuant to the March 9, 1992 voucher request.
People v. Tufts (1914) 167 Cal. 266 does not require such an instruction. In Tufts, the defendant obtained a loan by misrepresenting that he had a power of attorney to pledge his wife‘s property as collateral. He claimed that a Texas statute authorized him to deal in his wife‘s property even without her consent. The Supreme Court held it was error to refuse an instruction on the Texas statute because “the nonexistence of the power of attorney would be immaterial” if the statute authorized defendant‘s actions. (Id. at p. 269.) While the lender had the right to security for the loan, “that does not mean that he was entitled to enforce it only upon the theory that the defendant held a written power of attorney. . . . Where the prosecutor [moving party] gets out of the transaction just what he bargained for no offense is committed.” (Id. at pp. 269-270.)
Jury Instructions—Embezzlement
The trial court gave two instructions on embezzlement. The first quoted
Appellant contends the trial court erred in giving this instruction because Darrik-Marten and CGF did not have the required relationship of trust and confidence. We agree. The crime of embezzlement requires the existence of a “relation of trust and confidence,” similar to a fiduciary relationship, between the victim and the perpetrator. “‘If the relation is that of creditor and debtor merely, an appropriation by the latter does not constitute embezzlement.‘” (People v. Petrin (1954) 122 Cal.App.2d 578, 581.) There is no fiduciary or “special” relationship between a real estate developer and its construction lender. (Peterson Development Co. v. Torrey Pines Bank (1991) 233 Cal.App.3d 103, 119; Mitsui Manufacturers Bank v. Superior Court (1989) 212 Cal.App.3d 726, 729; Gomez v. Volkswagen of America, Inc. (1985) 169 Cal.App.3d 921.) There was no evidence indicating the relationship between appellant and CGF was anything other than a
The error was, however, harmless because its only effect was to force the prosecution to carry a heightened burden of proof. The rule relied upon by appellant in People v. Green, supra, 27 Cal.3d 1, 69 (see ante, p. 1843) has been questioned by our Supreme Court. (People v. Harris (1994) 9 Cal.4th 407, 419, fn. 7.) Of course, only the Supreme Court may address the continuing vitality of Green, supra, In our view the Green rule does not require reversal here. Here, the theft conviction is “legally sufficient” based upon a false pretense theory and a
That the legally insufficient theory of general embezzlement is presented does not dictate reversal. Here there is a way by which we “’ . . . can determine that error in the Green situation is harmless.’ ” (People v. Harris, supra, 9 Cal.4th at p. 419, fn. 7.) “It is impossible to understand how an error which increased the People‘s evidentiary burden could have prejudiced appellant.” (People v. Counts (1995) 31 Cal.App.4th 785, 793.)
Moreover, in California, the various common law theories of theft, including embezzlement, have been consolidated. “[U]nder section 484, there is simply one consolidated crime of theft, which the jury may find upon either theory, if there is an ‘unlawful [taking]’ . . . .” (31 Cal.App.4th at p. 793; see also People v. North (1982) 131 Cal.App.3d 112, 117-118.) Here, the evidence was sufficient to support a conviction under a false pretenses theory or, as discussed below, under
Jury Instructions—Penal Code Section 484c
Appellant contends this was inadequate because the statute is not violated if loan funds are used for “bona fide project cost[s].” This argument
Appellant contends a similar interpretation should apply to
Construction of the statute as requested by appellant would be unreasonable as a matter of law. Where, as here, the author of the voucher falsely
The plain language of
Jury Instructions—Claim of Right
The trial court has an “obligation to instruct on defenses, . . . and on the relationship of these defenses to the elements of the charged offense . . .” where “[¶] . . . it appears that the defendant is relying on such a defense, or if there is substantial evidence supportive of such a defense . . . .” (People v. Sedeno (1974) 10 Cal.3d 703, 716; People v. Romo (1990) 220 Cal.App.3d 514, 519.) Here, the trial court had no obligation to give an instruction on the claim of right defense because there was no substantial evidence to support such a defense.
In effect, the claim of right defense provides that, if a defendant takes property in the good faith belief that it belongs to him, the defendant lacks
Here, the appellant‘s taking was anything but “open[] and avowedly[].” He and his partner falsified at least three documents in requesting the funds. They attempted to conceal the substance of the transaction by having Johnson accept the CGF check and use his own check to return the funds to Darrik-Marten. Appellant‘s lending relationship with CGF and Lukens continued for months after these events occurred, and appellant never informed Lukens of the true state of affairs. When Lukens asked about the incident directly, appellant lied. Moreover, given appellant‘s experience as an attorney and real estate developer, his claim that he believed in good faith the loan agreement allowed him to engage in this conduct can only be described as unreasonable from a jury‘s point of view and fatuous from our point of view.
Even if the evidence had supported this defense, any error would be harmless. “[A] failure to instruct where there is a duty to do so can be cured if it is shown that ‘the factual question posed by the omitted instruction was necessarily resolved adversely to the defendant under other, properly given instructions.’ (People v. Sedeno, supra, 10 Cal.3d at p. 721.)” (People v. Stewart, supra, 16 Cal.3d at p. 141.) To succeed on a claim of right defense, the evidence would have to show that appellant honestly and in good faith believed he was entitled to take the $10,000 CGF paid for Johnson. (People v. Lucero (1988) 203 Cal.App.3d 1011, 1018; People v. Navarro (1979) 99 Cal.App.3d Supp. 1, 10.) Under the mistake instructions given here, the jury was obligated to acquit appellant if it found that he honestly and in good faith made a mistake of fact or law, so that he lacked the “intent to deceive [CGF] . . . .” (CALJIC No. 15.26.) Thus, by convicting appellant, the jury necessarily concluded that appellant did not act honestly or in good faith.
Jury Instructions—Prior Misdemeanor
Appellant testified that he pled guilty to a misdemeanor relating to illegal campaign contributions. He now contends the trial court erred because it
Conclusion
In appellant‘s petition for rehearing, he claims that our “. . . contempt for appellant‘s lack of candor appears to be the linchpin of the opinion.” This advocatorial “spin” misses the mark. In circumstances such as those here presented, the Legislature has declared that “lack of candor” directed to a construction lender is a crime. No matter how one characterizes appellant‘s actions, he lied to get the $10,000 and knew that he would not receive the money if he had told the truth. That is grand theft.
The judgment is affirmed.
Gilbert, J., concurred.
STONE (S. J.), P. J.—I respectfully dissent.
Appellant represented that payment was sought for supervision of the project by Gary Johnson, a licensed contractor, when in fact the money was ultimately paid to appellant‘s firm because appellant supervised the project himself. There is no dispute that the money received was a reasonable fee for supervision of the project. Neither is it contended that appellant‘s supervision caused the project to fail. Essentially, appellant was convicted because he lied. His “lack of candor,” to use appellant‘s euphemism, was perhaps immoral and dishonest. But was it a crime?
A position letter by the Attorney General to the Governor dated July 6, 1965, supporting the enactment of
The crime of diversion of construction funds under
In Butcher, the reviewing court gave meaning to the conjunction “and” in what it considered an ambiguous phrase: “‘willfully fail[] to complete the improvements for which funds were provided or willfully fail[] to pay for services, labor, materials or equipment provided incident to such construction, and wrongfully divert[] the funds to a use other than that for which the funds were received . . . .‘” (185 Cal.App.3d at pp. 939-940.) The Butcher court resolved the ambiguity by concluding that
I agree with the majority that
Appellant did not receive the money from Community Group Funding, Inc. (CGF). Johnson received it and wrote his own check which was deposited to the Darrik-Marten Company account from which appellant subsequently wrote a check to himself for $5,000. The majority states that
If
There appear to be no published cases interpreting
The lack of further definition of what constitutes embezzlement under
Unlike Counts, there was neither factual nor legal support in this case for the additional “evidentiary burden” of a position of trust and confidence. Unfortunately, the prosecutor argued that there was a relationship of trust. The majority acknowledges that a position of trust and confidence, as set
If the inadequacy of the instruction is legal, not merely factual, the rule of People v. Green, supra, 27 Cal.3d 1, 69, requires reversal, absent a basis in the record to find that the verdict was actually based on a valid ground. (People v. Guiton (1993) 4 Cal.4th 1116, 1128-1129.) In People v. Harris, supra, 9 Cal.4th 407, 418-419, the California Supreme Court limited its earlier holding in People v. Green to “instructional error, or a ‘legally incorrect’ theory of the case which, if relied upon by the jury, could not as a matter of law validly support a conviction of the charged offense. [Fn. omitted.]” The effect of the erroneous instructions given, the lack of any instructions clarifying embezzlement under
If the court did not find that appellant‘s proffered special instructions were correct or adequate, it still had a sua sponte duty to correctly instruct on all the elements of a charged offense. (People v. Cummings (1993) 4 Cal.4th 1233, 1311.) It did not do so. It is impossible to tell which of the prosecutor‘s three theories served as a basis for the jury‘s verdict and we should not take the “one out of three ain‘t bad” approach. Consequently, People v. Green, even as modified by People v. Harris, requires reversal.
Appellant‘s petition for review by the Supreme Court was denied August 14, 1996.