IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA SIXTH APPELLATE DISTRICT
November 29, 2010
THE PEOPLE, PLAINTIFF AND RESPONDENT,
DOUGLAS CLENNELL, DEFENDANT AND APPELLANT.
The opinion of the court was delivered by: Duffy, J.
P. v. Clennell CA6
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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 $51,364.96 to repair the Mercedes-Benz, it declared the car a total loss and paid $41,441.61 to Mercedes-Benz's financing entity.
Meanwhile, people associated with Exclusive Auto Center were filing other insurance claims for vandalism or accident-caused property damage to cars. There were suspicious aspects to these claims but the insurers paid them.
About September 1, 2006, Yuvain Matthews, the wife of Bill Matthews, an Exclusive Auto Center employee, reported to the California State Automobile Association that the Matthewses' Ford Expedition had been vandalized overnight on the street outside Exclusive Auto Center. Almost all of the body panels had been keyed and most of the windows had been broken. There was also damage and theft from the interior. The wheels were missing. Yuvain Matthews asserted that she had paid $7,734.50 for the wheels, which were custom manufactured, and Bill Matthews produced a purported receipt showing that the wheels cost about $7,000, but the insurer's subsequent inquiry showed that the wheels were worth about $300. The claims estimator found the vandalism so extensive that she declared the vehicle a total loss amounting to approximately $21,000. Both the incident itself, which was replete with anomalies, and Bill Matthews's claims history were suspicious, so the claims adjuster brought in a fraud investigator. Ultimately, however, the California State Automobile Association set aside its doubts and paid $12,666.50 to the lienholder, the Ford Motor Company's financing entity, and $8,066.54 to the Matthewses.
A Farmers Insurance Group fraud investigator investigated a claim filed by Sang Pak on a Toyota Highlander parked at his Sunnyvale residence. The Highlander had been scratched on all of its body panels. Farmers paid $2,787.77 to repair the damage and $500 for loss of use, making checks out to Sang Pak and Exclusive Auto Center.
On August 6, 2007, a claim was filed, apparently by Bill Matthews, with The Progressive Corporation, an insurance company, regarding damage to a BMW owned by William Pak and a Cadillac owned by Matthews. The governing insurance policy had been issued four days earlier. A claims adjuster inspected both cars at Exclusive Auto Center. The Exclusive Auto Center personnel told the claims adjuster that the damage occurred when a driver put the BMW in reverse and scraped both a wall and the Cadillac at the Exclusive Auto Center. The claims adjuster found it odd that the driver did not stop the BMW before inflicting the amount of damage that resulted; also, the damage occurred four days after Progressive issued the insurance policy. Nonetheless, she did not regard the incident as suspicious. The claims amounted to $21,285.24, which Progressive paid. Exclusive Auto Center repaired both cars and Progressive issued the payment checks to that enterprise.
A forensic accountant for the Santa Clara County district attorney's office examined certain financial records of William Pak, Bill Matthews, Exclusive Auto Center, and defendant, and concluded that they all "appear to live beyond their means."
II. Defense Case
A forensic accountant testified that there was nothing untoward about defendant's financial records and criticized the data relied on by the prosecution's forensic accountant as incomplete or misanalyzed. A former employer testified that when defendant worked for him he was trustworthy and honest.
I. Instructing on Conspiracy
Defendant claims that the trial court lacked sufficient evidence to find, before testimony began, the "preliminary fact" (see Evid. Code, § 400) that there was a conspiracy between him, William Pak, and the Matthewses. As a result of this incorrect assessment of the state of the evidence, the court, in defendant's view, was wrong to permit the jury to hear evidence on conspiracy (i.e., evidence about the Expedition, Highlander, and BMW-Cadillac-wall incidents) and to instruct the jury on conspiracy.
"[B]efore evidence of the acts and declarations of an alleged coconspirator is admissible against the other, the fact of the conspiracy must be proved." (People v. Steccone (1950) 36 Cal.2d 234, 238.) " 'The issue, however, need be proved only to the extent of establishing prima facie evidence of the fact. It need not be established by a preponderance of the evidence in a civil action nor beyond a reasonable doubt in a criminal action; the latter doctrine applies only to the issue of guilt. Any evidence received by virtue of this rule necessarily is received conditionally, for in the final analysis, the jury must first pass judgment on the question as to whether the asserted conspiracy has been proved.' " (Ibid.)
Pursuant to Steccone, the prosecution filed a motion in limine to "admit evidence of conspiracy." As alluded to, each count had recited that defendant was acting in furtherance of a conspiracy.*fn1 The trial court granted the motion, allowed the evidence concerning the Expedition, Highlander, and BMW-Cadillac-wall incidents to be introduced even though defendant did not file claims in connection with those incidents, and instructed the jury in these terms:
"The People have presented evidence of a conspiracy. A member of a conspiracy is criminally responsible for the acts or statements of any other member of the conspiracy done to help accomplish the goal of the conspiracy.
"To prove that the defendant was a member of a conspiracy in this case, the People must prove that:
"1. The defendant intended to agree and did agree with one or more of the following: William Pak, Bill Matthews, and Yuvani Matthews, to commit the offense of presenting a false motor vehicle claim[;]
"2. At the time of the agreement, the defendant and one or more of the other alleged members of the conspiracy intended that one or more of them would commit the offense of presenting a false motor vehicle claim;
"3. The defendant committed at least one of the following overt acts to accomplish the offense of presenting a false motor vehicle claim: presenting a false motor vehicle claim to State Farm on March 1, 2006, presenting a false motor vehicle claim to State Farm on August 16, 2006, and presenting a false motor vehicle claim to State Farm on April 24, 2007;
"4. At least one of these overt acts was committed in California.
"[¶] . . . [¶]
"The People contend that the defendant conspired to commit one of the following crimes: presenting a false motor vehicle claim to State Farm on March 1, 2006, presenting a false motor vehicle claim to State Farm on August 16, 2006, presenting a false motor vehicle claim to California State Automobile Association on September 1, 2006, presenting a false motor vehicle claim to Farmer's Insurance on November 29, 2006, presenting a false motor vehicle claim to State Farm on April 24, 2007, and presenting a false motor vehicle claim to Progressive on August 6, 2007. You may not find the defendant guilty under a conspiracy theory unless all of you agree that the People have proved that the defendant conspired to commit at least one of these crimes, and you all agree which crime he conspired to commit.
"[¶] . . . [¶]
"The defendant is charged in Count 2 with conspiracy to present a false motor vehicle claim during the period of March 1, 2006 to August 30, 2007. The people presented evidence that William Pak, Bill Matthews, and Yuvani Matthews committed the offense of presenting a false motor vehicle claim to the California State Automobile Association, Farmers Insurance, and Progressive Insurance companies during the same period of March 1, 2006 to August 30, 2007. You may consider this evidence only in your deliberations for Count 2 to decide if the defendant is guilty of conspiring to present a false motor vehicle claim.
"If you find that the defendant is not a member of a conspiracy as alleged in Count 2, then you may not consider the acts or statements of the coconspirators for any reason or purpose in your deliberations in Count 2.
"The defendant is alternatively charged in Count 2 with presenting a false motor vehicle claim alone, not as a member of conspiracy, during the period of March 1, 2006 to August 30, 2007.
"You may not consider the acts or statements of the coconspirators for any reason or purpose in your deliberations in Count 6."
In our view, the trial court did not abuse its discretion in making its preliminary finding and hence did not err in its conduct of the trial regarding the prosecution's conspiracy theory.
Evidence Code section 400 provides that a " 'preliminary fact' means a fact upon the existence or nonexistence of which depends the admissibility or inadmissibility of evidence." "The court may hear and determine the question of the admissibility of evidence out of the presence or hearing of the jury . . . ." (Id., § 402, subd. (b).) Evidence Code section 403 required the trial court to determine whether sufficient evidence existed of the preliminary fact of conspiracy for the jury to be able to conclude by a preponderance of the evidence (see id., § 115) that a conspiracy occurred.*fn2 (People v. Herrera (2000) 83 Cal.App.4th 46, 61.) In sum, at the Evidence Code section 402 hearing before the court "the proponent must offer evidence sufficient for the trier of fact to determine that the preliminary fact, the conspiracy, is more likely than not to have existed." (Herrera, supra, at p. 61.)
"The court should exclude the proffered evidence only if the 'showing of preliminary facts is too weak to support a favorable determination by the jury.' " (People v. Lucas (1995) 12 Cal.4th 415, 466.) " '[T]he judge's function . . . is merely to determine whether there is evidence sufficient to permit a jury to decide the question. The "question of admissibility . . . merges imperceptibly into the weight of the evidence, if admitted." ' " (Id. at p. 467.)
"The decision whether the foundational evidence is sufficiently substantial is a matter within the court's discretion." (People v. Lucas, supra, 12 Cal.4th at p. 466.)
The trial court did not abuse its discretion in ruling that there was sufficient evidence for the jury to be allowed to decide whether a conspiracy existed. " '[C]onspiracy requires proof that the defendant and another person had the . . . intent to agree or conspire to commit an offense, as well as the . . . intent to commit the elements of that offense, together with proof of the commission of an overt act "by one or more of the parties to such agreement" in furtherance of the conspiracy.' " (People v. Jurado (2006) 38 Cal.4th 72, 120.) After reading the parties' arguments and conducting a hearing on the matter, the court recited with sufficient precision the following circumstances (not evidence, of course, but an offer of proof) that the prosecution had proffered at the hearing on its motion: Defendant was William Pak's cousin and Sang Pak's nephew; defendant's employer, Exclusive Auto Center, was a small enterprise with few employees; both defendant and Exclusive Auto Center were struggling financially; defendant claimed that Exclusive Auto Center paid him a $9,800 monthly salary but there was one month in which his only income was from one of the State Farm settlements involving the Chevrolet Avalanche, and at times he was paid only when Exclusive Auto Center received insurance company settlement proceeds; defendant's first claim was filed within approximately one month of the opening or licensing of the shop; defendant's claim on the Mercedes-Benz involved both Bill Matthews and William Pak; the vandalism to the Mercedes-Benz occurred outside Exclusive Auto Center; the Mercedes-Benz, Toyota Highlander and Ford Expedition claims were similar (all involved purported extensive vandalism and in two instances it was so severe that the cars were total losses); and, in sum, six suspicious and mysterious claims within an 18-month period were connected to Exclusive Auto Center or its employees. The court concluded that "these facts do show a common design [that is] more than mere coincidence. And these facts show more than simply a mere suspicion of a conspiracy . . . ." "[T]he jury will be instructed to decided whether there was a conspiracy. If they do not find a conspiracy, they would not be able to consider the claims that did not involve Mr. Clennell," the defendant herein.
The trial court did not abuse its discretion in finding the proffered facts sufficient.*fn3 Its reasons speak for themselves and we need not elaborate on them. "Since the evidence above set forth was sufficient to make out a prima facie case of conspiracy . . . , the trial court did not err in admitting . . . evidence of the acts and declarations of the alleged coconspirators in furtherance of the conspiracy." (People v. Steccone, supra, 36 Cal.2d at p. 240.) Nor was there any instructional error; it is axiomatic that the court had the authority to explain to the jury the principles of conspiracy and how to evaluate the conspiracy evidence properly before it. (See also Evid. Code, § 403, subd. (c)(1).) Defendant's claim is without merit.
The judgment is affirmed.
WE CONCUR: Bamattre-Manoukian, Acting P. J. Mihara, J.