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November 29, 2010


The opinion of the court was delivered by: Duffy, J.

P. v. Clennell CA6


California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

Defendant, Douglas Clennell, claims that the trial court abused its discretion in finding before trial that there was evidence of a conspiracy to defraud automobile insurers. We find no abuse of discretion and will affirm the judgment.


A jury convicted defendant of two counts of presenting, aiding and abetting, or conspiring with another to present a false and fraudulent payable insurance claim for damage to a motor vehicle. (Pen. Code, § 550, subd. (a)(4).) The charge for each count alleged that defendant "did knowingly present, aid, abet, solicit, and conspire with another person to knowingly present, a false and fraudulent claim for . . . damage . . . [to] a motor vehicle . . . ." The trial court suspended imposition of sentence and placed defendant on five years' formal probation, whose conditions included serving an 11-month jail term and paying $65,169.17 in direct restitution. It is the conspiracy aspect of the charges that is at issue in this appeal.


I. Prosecution Case

As relevant to this appeal, the prosecution theorized that defendant was part of a conspiracy to defraud automobile insurance companies. The conspirators' roles were either to damage the automobiles, submit claims on them, or repair them at the insurers' expense. In an in limine hearing, the prosecutor said of one of the cars involved, "my theory is they scratched the vehicle and they paid themselves to fix it."

In furtherance of this theory, the jury heard evidence that in 2006 and 2007 defendant filed several insurance claims for damage to his automobiles. He filed a vandalism claim on March 1, 2006, in which he reported that his Chevrolet Avalanche was damaged by keying. The State Farm Mutual Automobile Insurance Company paid the $5,274.72 claim although it regarded it as suspicious because the vehicle was keyed on every body panel, requiring the entire vehicle to be repainted, the insurance policy was fairly new, the depth of the keying (through the paint and primer) was unusual, and the fact that the Avalanche was keyed in areas above hand height suggested that the perpetrators did not feel the need to conceal their actions, as would be expected with a furtive act of vandalism.

The Avalanche was repaired and repainted at the Exclusive Auto Center automobile body shop, where defendant worked. William Pak was an owner of Exclusive Auto Center and was defendant's cousin. The business was struggling financially and had lost the trust of creditors so it had to pay bills in cash. Banks would no longer accept its checks because too many of them had bounced. Essentially, Exclusive Auto Center operated on a knife's edge between liquidity and illiquidity.

On August 16, 2006, defendant reported front bumper damage to his Avalanche purportedly caused by an unknown third party. State Farm paid the $1,627.74 claim. There were no witnesses to the purported accident. State Farm's claims adjuster found that the claim had an unusual aspect in that "the damage is somewhat high." Defendant had the Avalanche repaired at Exclusive Auto Center. Later, defendant told the claims adjuster that he thought a tow truck had backed into the Avalanche, but he had not mentioned this possibility to him when he filed the claim.

On April 24, 2007, defendant filed a claim for vandalism to his Mercedes-Benz, which he had left parked overnight on Tully Road in front of Exclusive Auto Center. Defendant had bought the car in a financial arrangement with William Pak, who co-signed the loan. The claim was suspicious because of defendant's prior claims, the cutting of the front and rear passenger seats, and the keying of every body panel. A veteran State Farm repair estimator with 32 years' experience in automobile body repair examined the car. He had never seen a car so extensively vandalized. The destruction would have taken several hours and have generated considerable noise. It could have been done with a sledgehammer. The Mercedes-Benz was a total loss.

State Farm's suspicions about defendant increased and it brought in an attorney who specializes in the scrutiny of questionable insurance claims. The attorney questioned defendant and Matthew Pak, the manager for Exclusive Auto Center, under oath, in a proceeding similar to a deposition but governed by the insurance contract rather than by statute. Ultimately, however, State Farm could not identify any fraud and it paid the latest claim. Rather than pay Exclusive Auto Center ...

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