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People v. Schmidt

California Court of Appeals, Third District, Sacramento

November 8, 2019

THE PEOPLE, Plaintiff and Respondent,
v.
LONNIE GLENN SCHMIDT, Defendant and Appellant.

         CERTIFIED FOR PARTIAL PUBLICATION [*]

          APPEAL from a judgment of the Superior Court of Sacramento County No. 13F07578, Donald J. Currier, Judge. Affirmed in part and reversed in part.

          Laura Schaefer, under appointment by the Court of Appeal, for Defendant and Appellant.

          Xavier Becerra, Attorney General, Gerald A. Engler, Chief Assistant Attorney General, Michael P. Farrell, Assistant Attorney General, Julie A. Hokans, Galen N. Farris, Deputy Attorney General, for Plaintiff and Respondent.

          RENNER, J.

         Following a lengthy jury trial in which he represented himself, defendant Lonnie Glenn Schmidt was convicted of four counts of prohibited practices by a foreclosure consultant (counts 1-2, 29-30-Civ. Code, § 2945.4, subds. (a) and (e)), ten counts of filing false instruments (counts 3, 4, 6, 8, 10, 12, 13, 15, 18, 26-Pen. Code, § 115, subd. (a)), [1] six counts of identity theft (counts 5, 7, 9, 11, 14, 16-§ 530.5, subd. (a)), one count of second degree burglary (count 17-§ 459), one count of perjury (count 19-§ 118, subd. (a)), three counts of grand theft (counts 20, 27-28-§ 487, subd. (a)), and five counts of attempted grand theft (counts 21-25-§§ 664, 487, subd. (a)). The trial court sentenced defendant to a total of 28 years in state prison plus one year consecutive in the county jail.

         On appeal, defendant argues, and the People concede, that: (1) insufficient evidence supports the convictions for violations of Civil Code section 2945.4, subdivisions (a) and (e) in counts 29 and 30, and (2) the grand theft convictions on counts 20 or 21, on the one hand, and 27 or 28 on the other, are barred by the multiple takings doctrine set forth in People v. Bailey (1961) 55 Cal.2d 514, 518-519 (Bailey). We accept the People's concessions and shall reverse the convictions on counts 20, 28, 29, and 30.

         Defendant also argues that the evidence does not support the convictions for violations of section 115, subdivision (a) in counts 3 and 26. We agree and shall reverse the convictions on counts 3 and 26 as well.

         Defendant also argues the trial court should have stayed his sentence on counts 17, 20 to 25, and 27 to 28. The People concede that the sentence should have been stayed on count 21. We accept the concession and remand for resentencing on count 21. We reject defendant's contention that the sentence should have been stayed on the other enumerated counts.

         Defendant also argues, and the People also concede, that the trial court erred in reducing the conviction for second degree burglary in count 17 to misdemeanor shoplifting under Proposition 47, and sentencing him to one year consecutive, rather than eight months. We accept the People's concession and remand for resentencing on count 17.

         We reject defendant's remaining contentions.

         I. BACKGROUND

         Defendant managed a home foreclosure rescue operation, doing business as Second Opinion Services and Financial Services Bureau Limited. He hired and supervised Alan, who testified for the prosecution under a grant of immunity. Neither defendant nor Alan was a licensed real estate broker, real estate agent, or attorney, and neither had registered with the State as a foreclosure consultant.

         A. Defendant's “Mortgage Rescission” Program

         According to Alan, defendant developed a “mortgage rescission” program that allowed financially distressed homeowners to avoid foreclosure and receive “fee simple title control” of their properties, free and clear of their mortgages. Under the program, homeowners paid an enrollment fee, and then signed quitclaim deeds transferring their properties to trusts created by defendant, with defendant as trustee. At defendant's instruction, homeowners would then stop paying their mortgages (if they had not done so already) and instead make monthly lease payments to defendant. Defendant told homeowners that the monthly lease payments would continue for a period of five years, after which, he claimed, they would own their homes free and clear.

         During the trial, the jury heard from multiple prosecution witnesses that defendant's mortgage rescission program failed to work as advertised. The jury heard evidence about a number of transactions, involving a number of properties. We describe two such transactions in detail and provide a more general overview of the others.

         1. The Walnut Avenue Property (Counts 1-3, 18, 20, and 21)

         Hector owned a home on Walnut Avenue in Orangevale. Hector fell behind on his mortgage payments and went into default in October 2010. He heard about defendant's program from a friend and reached out for help. Defendant told Hector that he knew a way to save the house and gain title free and clear of the mortgage, but “it was going to cost [him].”

         Defendant explained that Hector would pay an enrollment fee of $6, 500, transfer the property to “an entity, ” and “lease the house back from the entity for $891 monthly” for a period of five years. He would then make a balloon payment of $75, 000, which, defendant said, he could easily pay by refinancing, as he would now own the house free and clear.

         Hector paid the $6, 500 enrollment fee and signed a quitclaim deed in February or March 2011 transferring the house to a trust known as the H&H Barbershop Trust. Although defendant told Hector that he would have control over the property through the H&H Barbershop Trust (which was named for Hector's business), the abstract of trust, which defendant did not show Hector, identified defendant and Alan as trustees and gave them “absolute and exclusive power and control over the management and conduct of the business and affairs of the trust.” Hector would not have signed the quitclaim deed had he known that he would be ceding control of the property to defendant.

         Hector made monthly lease payments for several months, beginning in April and ending in September 2011. He stopped making payments to defendant on the advice of an attorney and instead resumed making monthly payments to his mortgage lender. Eventually, he managed to obtain a loan modification which allowed him to keep his house. Defendant was not involved in the process of securing the loan modification.

         Sometime later, a man appeared at Hector's house. The man identified himself as an associate of defendant, and claimed that Hector's house belonged to him. A short time later, in July 2013, Hector received a letter from defendant, asserting that defendant was now the owner of the house and claiming that Hector owed him more than $20, 000 in back rent.

         Later still, Hector learned that the quitclaim deed he had signed in 2011 had been recorded on July 16, 2013. Hector also learned that a document entitled “assumption agreement, ” in which the H&H Barbershop Trust purported to assume Hector's loan obligations, had been recorded the next day. Hector was forced to hire an attorney to clear title to the house. During the trial, the jury heard evidence that defendant had attempted to sell the Walnut Avenue property to Don, a real estate speculator who was willing to find investors for the property, going so far as to open an escrow for the property with Orange Coast Title Company in Sacramento.

         2. The School Street Property (Counts 26-30)

         Janet and Robert owned a home on School Street in Elk Grove. They ran into some financial difficulty in 2011 and contacted defendant. They were not living in their home at the time; rather, they had rented the property, and were traveling the country in their retirement in a fifth wheel trailer.

         They were current on their mortgage, but the house was underwater and they wanted to reduce their mortgage payments. Defendant told Janet and Robert that there was something wrong with their loan agreement, which would allow him to cancel their mortgage. He explained that his program would require them to transfer their property to a trust, but they would continue to own the property and could continue to lease it. Defendant told Janet and Robert that they would no longer make monthly mortgage payments to their lender, but would instead pay a reduced amount to another entity over a period of five years, followed by a balloon payment, which would be paid by refinancing. Janet and Robert were impressed by defendant's presentation and eager to improve their financial situation. They signed a contract to join defendant's program that very day. The contract called for a $6, 500 enrollment fee, monthly payments of $951, and a balloon payment of $85, 000.

         Janet and Robert paid the enrollment fee and signed a quitclaim deed conveying their interest in the School Street property to a trust known as the “Forever Blessed Trust.” They stopped making their mortgage payments, signed a lease agreement with the Forever Blessed Trust, and instructed their tenants to send monthly rental payments to defendant. When all was said and done, Janet and Robert paid defendant more than $18, 000. Janet and Robert were not aware that the Forever Blessed Trust was governed by an abstract of trust created by defendant, naming defendant as trustee and granting defendant “absolute and exclusive control” over the management and disposition of the property. They would not have signed the quitclaim deed had they understood that they were ceding control of the property to defendant.

         Fannie Mae acquired title to the School Street property as a result of a trustee's sale, which took place, unbeknownst to Janet and Robert, on April 22, 2013. The next day, the Forever Blessed Trust recorded a quitclaim deed purporting to convey the property to defendant. In the months that followed, defendant recorded a “notice of rescission of trustee's deed upon sale” purporting to rescind the trustee's deed of sale by which Fannie Mae acquired title to the property, and another quitclaim deed purporting to convey Fannie Mae's interest in the property to himself. Defendant signed both documents as an authorized representative of Fannie Mae; however, defendant had no such authorization.

         Fannie Mae regularly acquires property through foreclosure, and tries, as a matter of policy, to sell such property as quickly as possible. Fannie Mae was unable to follow its usual policy in the case of the School Street property, as the documents described above-two quitclaims deeds and a purported notice of rescission of trustee's sale-created a cloud on title that interfered with Fannie Mae's ability to market and sell the property. To make matters worse, someone repeatedly broke into the house and changed the locks. During this time, defendant attempted to rent the School Street property to a new tenant and offered the property to Don for sale to an investor.

         In the end, Fannie Mae was forced to bring an action to remove the cloud on title. The trial court took judicial notice of a judgment entered in Fannie Mae's favor on July 28, 2014. Fannie Mae incurred attorneys' fees of $17, 792 and estimated maintenance and holding costs of $18, 399 as a result of the litigation.

         3. Other Properties: Iceberg Lane (Counts 6, 7, and 23), Woodfield Way (Counts 8, 9, and 24), Cornelia Way (Counts 10, 11, and 25) and Azalea Road (Counts 4, 5, and 22)

         Fannie Mae acquired title to real property on Iceberg Lane in Roseville following a trustee's sale in July 2013, and Woodfield Way, also in Roseville, following a trustee's sale in August 2013. A short time later, on September 27, 2013, defendant recorded grant deeds with the Placer County Recorder's Office purporting to transfer Fannie Mae's interest in the Iceberg Lane and Woodfield Way properties to himself. Defendant signed the deeds as an authorized representative of Fannie Mae, without authorization to do so.

         J.P. Morgan acquired title to real property on Azalea Road in Sacramento following a trustee's sale in September 2009. Several years later, on August 8, 2013, a grant deed was recorded with the Sacramento County Recorder's Office purporting to transfer J.P. Morgan's interest in the Azalea Road property to defendant. Defendant signed the grant deed as an authorized representative of J.P. Morgan, without authorization to do so.

         J.P. Morgan acquired title to real property on Cornelia Way in Sacramento following a trustee's sale in August 2013. A short time later, on September 27, 2013, a grant deed was recorded with the Sacramento County Recorder's Office purporting to transfer J.P. Morgan's interest in the Cornelia Way property to defendant. Defendant signed the grant deed as an authorized representative of J.P. Morgan, without authorization to do so.

         Defendant attempted to sell the properties through Don, opening escrows for sales to investors with Orange Coast Title Company in September 2013. The escrows fell through when a concerned escrow officer contacted the title company's legal department.

         As we shall discuss, defendant argues the prosecution failed to establish venue in Sacramento County for counts 6 and 8, both of which charged defendant with recording false or forged instruments with the Placer County Recorder's Office in violation of section 115. Defendant also argues the sentences imposed for counts 22 to 25 for attempted grand theft (§§ 664/487) (discussed below) should have been stayed pursuant to section 654.

         B. Trial Court Proceedings

         Defendant was charged in an amended information with two counts of unlawfully demanding or receiving compensation prior to fully performing services that a foreclosure consultant has contracted to perform or represented that he would perform (counts 1 and 29-Civ. Code, § 2945.4, subd. (a)), two counts of unlawfully acquiring an interest in a residence in foreclosure with whom a foreclosure consultant has contracted (counts 2 and 30-Civ. Code, § 2945.4, subd. (e)), ten counts of filing false instruments 3, 4, 6, 8, 10, 12, 13, 15, 18, 26-§ 115, subd. (a)), six counts of identity theft (counts 5, 7, 9, 11, 14, 16-§ 530.5, subd. (a)), one count of second degree burglary (count 17-§ 459), one count of perjury (count 19-§ 118, subd. (a)), three counts of grand theft (counts 20, 27-28-§ 487, subd. (a)), and five counts of attempted grand theft (counts 21-25-§§ 664, 487, subd. (a)).

         The information further alleged that defendant took property of value exceeding $65, 000 (§ 12022.6, subd. (a)(1)) and $200, 000 (§§ 12022.6, subd. (a)(2), 1203.045), and the offenses involved a pattern of fraud and embezzlement with a taking of more than $100, 000 and more than $500, 000 (§ 186.11, subd. (a)). The information further alleged that defendant committed the offenses charged in counts 6 through 11 while out on bail. (§ 12022.1.)

         1. Waiver of Right to Counsel

         Defendant filed a motion to represent himself under Faretta v. California (1975) 422 U.S. 806 (Faretta) in December 2014, approximately one month before the then-scheduled trial date. The motion indicated that defendant wanted to represent himself because his appointed counsel, Attorney Robert Saria, was unwilling to file various motions to dismiss the information on defendant's behalf. The motion also indicated that Attorney Saria “would remain as trial counsel of record in the event defendant so requests.”

         Defendant appeared before the trial court (Sapunor, J.) for a hearing on the motion on January 9, 2015. The trial court warned defendant of the dangers of self-representation, noting that “the penalties if you're found guilty are severe.” The trial court continued, “Could be eighteen years, could be 25 years or a little bit more, but it's serious business.” The trial court also cautioned defendant that he would not have a right to advisory counsel if he chose to represent himself, stating, “There is no right to standby counsel for assistance, and we don't do it.”

         Defendant affirmed that he still wanted to represent himself. The trial court granted defendant's motion. The trial date was subsequently vacated and reset.

         2. Requests for Advisory Counsel

         Several months later, on May 12, 2015, defendant filed a motion for appointment of advisory counsel. The motion stated: “Defendant is ready, willing and able to present his own defense on the merits, but recognizes his need for help in court protocol and procedure at trial.”

         Defendant appeared for a hearing on the motion before the trial court (Davidian, J.) on May 19, 2015. Defendant explained that he was “facing a fairly complex trial, ” reiterating that he wanted advisory counsel “for really just the procedural aspects to be able to conduct the-the court protocol, things of that nature.” Judge Davidian acknowledged that advisory counsel may be appointed “[i]n the sound discretion of the trial judge.” He noted that the court is not required to appoint advisory counsel (see People v. Debouver (2016) 1 Cal.App.5th 972, 976) adding that: “We don't have counsel funds, advisory counsel funds in Sacramento County. We don't have the ability to pay for that sort of thing. We don't have-we don't provide advisory counsel.”

         He then denied the motion, stating: “As we discussed in your Faretta motion, this is on you. You have to know how this is done. That's why I-I strenuously advised you against exercising Faretta rights that gave you the right to do that. In fact, granted it, but you would be held to the same standard, and you will be. [¶] And so, your request for advisory counsel is denied. This is in the discretion of the [c]ourt, especially for what you've asked for, that-that they have-he or she have a very limited role of advising you about what proper protocol is. You're expected to know that because you elected to represent yourself. [¶] So the motion is denied.” (Italics added.)

         Defendant filed a second motion for appointment of advisory counsel two weeks later, on June 2, 2015. The motion argued that Judge Davidian had been incorrect in stating that Sacramento County does not provide advisory counsel for pro se defendants, noting that he was aware of another pro se defendant whose motion for appointment of advisory counsel had been granted. As before, defendant represented that he was “ready, willing and able to present his own defense on the merits, ” but recognized his “need for help in court protocol and procedure during pre-trial motion practice and procedure at trial.”

         Defendant appeared before Judge Currier for a hearing on the motion (and other matters) on June 5, 2015. Judge Currier began by noting that defendant had previously requested advisory counsel, and Judge Davidian had denied the request. Judge Currier continued: “I'm not sure why Judge Davidian used that language, it's probably a bit overbroad, but you could be entitled to advisory counsel. But in Sacramento County, we use a pro per coordinator to ensure that you're getting the resources you need to prepare your defense.” Judge Currier asked defendant to explain why these resources were not sufficient.

         Defendant responded at length, arguing that the investigator and pro per coordinator were not as available to him as he would like, and the process of communicating with them was cumbersome. Defendant maintained that he wanted to represent himself, because he wanted to tell his own story, and he believed he was in the best position to do so. Nevertheless, defendant acknowledged that an attorney would be helpful, adding ...


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