Articles Posted in California Court of Appeal

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Defendant-appellant John Riddles pled guilty to one count of workers' compensation insurance fraud. His conviction grew out of his application for workers' compensation insurance, which fraudulently represented that a number of nurses who had been placed in residential care and skilled-nursing facilities by Riddles' staffing agency were computer programmers. His misrepresentation of the nurses as computer programmers substantially reduced the premium his agency was charged by the workers' compensation insurer that accepted his company's application; accordingly, the trial court required that Riddles pay, as restitution to the insurer, $37,000 in premiums the insurer would have earned in the absence of his misrepresentation. Contrary to his argument on appeal, a workers' compensation insurer could recover, as restitution under Penal Code section 1202.4, the premiums it would have earned in the absence of misrepresentations by an insurance applicant. The fact Riddles may have been able to establish that the Labor Code did not require that he provide workers' compensation coverage for the nurses did not relieve him of responsibility for providing the insurer with a fraudulent application or alter the fact the nurses were covered by the policy he obtained. View "California v. Riddles" on Justia Law

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Respondent Angela Vandiver pled guilty in 2012 to a single felony count of receiving stolen property based on her possession of blank checks she knew had been stolen. She later petitioned to have the conviction redesignated a misdemeanor under the new provisions of Proposition 47 on the ground the checks were worth $950 or less. The State opposed, arguing the balance of the victim’s checking account was greater than $950. The trial court found the value of the blank checks to be de minimis and granted the petition. The State contended the court erred by: (1) reaching the merits because Vandiver did not attach evidence of value to her petition; and (2) determining the checks’ value was de minimis. The State contended the trial court should have dismissed the petition as unsupported or found the checks were worth the full amount in the linked checking account and denied the petition on the merits. Finding no reversible error, the Supreme Court affirmed the trial court. View "California v. Vandiver" on Justia Law

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Black called Knarr to suggest a real estate investment. Knarr gave Black $124,456, documented by a May 2006 promissory note. Knarr testified that he would not have invested without a promised 10 percent return if sale or development of the property failed. The parties modified the note in May 2007 to reflect Knarr’s additional investment of $155,474 and extended the maturity date of the note several times, through mid-January 2012. Knarr obtained information inconsistent with what Black had told him and asked Black for his money. Receiving no response, Knarr initiated an investigation. In 2013, Black was charged with five counts (there were other investors) of using false statements in the offer or sale of a security (Corp. Code, 25401, 25540(b)). The trial court set aside two counts, finding that the note was not a security. The court of appeals affirmed, holding that the promissory notes offered for Knarr’s investment in the real estate development scheme were not securities within the meaning of the Corporate Securities Law. The evidence of other investors was insufficient to meet the public offering prong of the risk-capital test and there was insufficient evidence that Knarr was “led to expect profits solely from the efforts of the promoter.” View "People v. Black" on Justia Law

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Starski identified himself as a lawyer in a demand letter to a business, claiming that his “client” (Cornett, his mother’s husband) had been injured at the business. The manager was suspicious and contacted authorities, who subsequently staged a pretext call during which Starski identified himself as an attorney. Cornett subsequently stated that he had not been injured at the business, but changed his story again for trial. A search of Starski’s computer uncovered documents revealing that he had been involved in several similar schemes, representing himself as an attorney. He is not a licensed attorney, but described himself as a “freelance paralegal.” After his trial on felony charges of attempted grand theft and conspiracy and a misdemeanor charge of unlawful practice of law (Business and Professions Code section 6126), the judge instructed the jury that section 6126 requires more than simply holding oneself out as an attorney, that “practicing law” entails use of that purported status. Starski and Cornett were convicted. Each was given to probation. The court of appeal affirmed, rejecting arguments of insufficient evidence; that the instructions on section 6126 were “overbroad” because they allowed conviction for what a recent U.S. Supreme Court decision made protected free speech; and that the judge erred by refusing to give Starski’s special instruction on a “claim-of-right” defense to the charges of attempting and conspiring to commit grand theft. View "People v. Starski" on Justia Law

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Hannon, an attorney, represented Barber in litigation against the victim, Barber’s former domestic partner, Dr. Magno. In December 2006, the parties agreed that Barber would fund a college trust for their children. Barber paid $27,500.32 to Hannon as the trustee of the children’s funds and authorized Hannon to open a bank account. In February 2011, the victim became aware that the children’s funds had been misappropriated. Hannon may have used the money to cover legal fees owed by Barber. Charged with grand theft by embezzlement by a fiduciary (Pen. Code 487(a), 506), Hannon ultimately pled no contest to misdemeanor theft by embezzlement. The trial court placed him on probation for two years, ordered him to perform 240 hours of community service, and ordered him to pay $40,800 in restitution to the victim: $25,000 in attorney’s fees, $15,000 in lost wages, and $800 in mileage. The court of appeal rejected challenges to the restitution award and held that the victim was entitled to file a victim impact statement on appeal, pursuant to the Victims’ Bill of Rights Act of 2008 (Marsy’s Law, Proposition 9 (2008)), but may not raise present legal issues not raised by Hannon or facts not in the record below View "People v. Hannon" on Justia Law

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The Company was organized as a limited liability company in 2007; its sole managing member was another LLC, whose sole members were the Ngs, who controlled and managed the Company. Defendant was one of the Company’s lawyers. The Company’s stated purpose was to serve as an investment company making secured loans to real estate developers. The Managers actually created the Company to perpetrate “a fraudulent scheme” by which the Company transferred the money invested in it to another entity the Managers controlled. Defendant knew that the Managers intended to and did use the Company for this fraudulent purpose and, working with the Managers, helped the Company conceal the nature of its asset transfers. The Company was eventually rendered insolvent and its investors filed an involuntary bankruptcy petition. The bankruptcy trustee filed suit against Defendant, alleging tort claims based on Defendant’s involvement in the Company’s fraud. Defendant argued that the claims are barred by the in pari delicto doctrine. The court of appeal affirmed dismissal, finding that the in pari delicto applies to the trustee and rejecting an argument that the doctrine should not bar her claims because the wrongful acts of the Managers should not be imputed to the Company. View "Uecker v. Zentil" on Justia Law