People v. Medrano CA1/3 ( 2016 )

Filed 7/29/16 P. v. Medrano CA1/3
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FIRST APPELLATE DISTRICT
DIVISION THREE
THE PEOPLE,
Plaintiff and Respondent,
A137914
v.
JOSEPH MEDRANO, (San Mateo County
Super. Ct. No. SC075772A)
Defendant and Appellant.
Joseph Medrano (appellant) appeals from a judgment entered after a jury found
him guilty of grand theft by embezzlement (Pen. Code, §§ 487, subd. (a), 508) with a true
finding on an enhancement allegation, and the trial court sentenced him to three years in
county jail. He contends the court abused its discretion and deprived him of due process
and a fair trial when it admitted evidence of his prior uncharged misconduct. We reject
the contention and affirm the judgment.
FACTUAL AND PROCEDURAL BACKGROUND
iPass and IMC
Appellant was a licensed insurance broker and the founder, owner, and president
of Insurance Management Corporation (IMC), an insurance brokerage firm. In 1996 or
1997, iPass, Inc., (iPass) a publicly traded software company, retained IMC/appellant as
its insurance broker. As a publicly traded company, iPass was required to have insurance
coverage in order to conduct business. Appellant assisted iPass by obtaining proposals
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from insurance companies, making recommendations to iPass, presenting insurance
policies to iPass for approval, and procuring insurance for iPass.
For each insurance policy that iPass procured through IMC, appellant would send
invoices to iPass, usually on a quarterly basis. The Chief Financial Officer (CFO) of
iPass would review and approve each invoice, and iPass would issue a check to IMC,
which would then deduct its commission before forwarding the remainder to the
insurance company. Whenever iPass sent a check to IMC, it was with the understanding
that the invoice amount represented the gross premium and was meant to cover
everything necessary to keep the insurance in place. It was up to IMC and the insurance
company to work out IMC’s commission, unless there was a separate fee on the invoice
in which IMC charged iPass a previously-agreed upon fee. The industry standard was for
all commissions to be disclosed and documented. In addition, everything iPass did had
“an audit trail,” i.e., every payment was attached to an invoice for the service or product
being provided.
iPass had various types of insurance through a number of different insurance
companies. It had a directors and officers (D&O) insurance—which protects iPass’s
company assets from potential lawsuits—whose term went from July of one year to the
following July. All other policies, including its workers compensation and domestic
package insurance, had terms that went from December of one year to the following
December. In 2008, iPass’s workers compensation and domestic package insurance,
procured through IMC, was with Travelers Insurance (Travelers).
In late 2008, iPass, through IMC, renewed its workers compensation and domestic
package insurance with Travelers for the term December 15, 2008, to December 15,
2009. iPass agreed to make four quarterly payments of $79,815—a gross premium that
included all commissions and fees—to IMC for this insurance. IMC sent four quarterly
invoices to iPass for the December 15, 2008 to December 15, 2009 term, and iPass made
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all four payments in a timely manner. IMC deposited the checks on December 5, 2008,
February 17, 2009, May 13, 2009, and July 28, 2009.
On June 19, 2009, then-CFO of iPass, Frank Verdecanna, had an email exchange
with appellant regarding some of iPass’s insurance policies, including the D&O policy
that was up for renewal in July 2009. Appellant wrote: “First week of July is fine. I will
have D and O invoices for you on Tuesday as well.” Verdecanna responded: “Perfect. I
will pay them all first week in July.” At the time Verdecanna told appellant he would pay
the D&O invoice, he assumed iPass would be renewing its D&O policy with IMC in
July 2009. However, three days later, on June 22, 2009, iPass hired a new CFO, Steve
Gatoff, and it became Gatoff’s—not Verdecanna’s—decision whether to continue using
IMC as the broker for the D&O policy.
On June 23, 2009, current and former CFOs Gatoff and Verdecanna,1 along with
General Counsel William Garvey and Vice President of Human Resources John Michael
Badgis, met with appellant to discuss the D&O renewal. Appellant made a presentation,
seeking to have iPass continue using IMC as its broker for its D&O policy. During the
presentation, Gatoff noticed that the quality of the coverage was “kind of outdated” and
“not really great.” The price seemed “really high” and the amount of insurance being
recommended—$60 million—seemed “like a really, really large, inappropriate sized
policy” for a company of iPass’s size.
Gatoff and Garvey also found it strange that appellant stated during the
presentation—and in the written materials he provided to iPass—that he had contacted 15
insurance companies, and that all but the one insurance company he was recommending
had declined to provide a quote. Gatoff thought it “just did not did seem statistically
probable” that out of “every other insurance company that would have been a competitor
1
As the outgoing CFO, Verdecanna stayed on for an additional month after
Gatoff’s arrival to ensure a smooth transition.
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that nobody wanted to offer a price quote.” Gatoff questioned appellant about this, and
appellant responded that all of the other insurance companies thought “iPass . . . had a
really good insurance program and the rates are really competitive and they just couldn’t
offer something at a lower price because you guys have a great deal.”
Towards the end of the meeting, appellant said, “Okay. So we are going to go
ahead. You want to do this and let’s lock this in?” Gatoff responded, “No,” and told
appellant he needed to look into the matter and would get back to him. There was no
verbal agreement with appellant to renew the D&O policy, and in fact, any agreement for
payment of services would have had to be memorialized in writing.
The next day, Gatoff called another insurance broker, Dana Kopper, from Lockton
Financial Services (Lockton). Gatoff had previously worked with Lockton and had been
impressed by its work. Gatoff asked Kopper to verify whether multiple insurance
companies had refused to quote prices, and also asked Kopper to review the quality and
pricing of its existing insurance with IMC. Over the course of the next several days,
Kopper called the other insurance companies and learned they had never been
approached by appellant or by anyone representing iPass. Some of the companies said
they would have entertained the idea of meeting with iPass and might have offered a
competing bid. Kopper also reviewed iPass’s D&O policy and noticed that IMC had
been collecting full commission in addition to charging a $50,000 broker fee. It was
extremely rare for a broker to charge both a commission and a broker fee, and in this
case, Kopper saw no justification for both.
After speaking with Kopper, Gatoff became “tremendously” concerned that
appellant had made a material misrepresentation. Gatoff informed the Chief Executive
Officer (CEO) of iPass, the chairperson of the audit committee of the board of directors,
and Verdecanna of the misrepresentation. For the next several days, Gatoff interviewed
three reputable insurance brokers including Lockton and conferred with other directors.
iPass ultimately selected Lockton as its broker for the D&O policy, and sent appellant a
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letter informing him that iPass had selected a different broker. Because IMC was still the
broker for iPass’s workers compensation and domestic package insurance for
December 15, 2008, to December 15, 2009, iPass continued to make its quarterly
payments for those policies to IMC.
On August 28, 2009, Gatoff received a call from Kopper that Travelers was
getting ready to cancel iPass’s workers compensation and domestic package insurance
because it had not received all of the premium payments. Travelers had reached out to
Kopper because Kopper/Lockton was listed as the broker of record on iPass’s D&O
insurance policy, and because Travelers had been unsuccessful in its attempts to get IMC
to make the payments.
Given the urgent nature of the circumstances, and because cancellation of
insurance is “an extremely serious matter” and “very detrimental to the well being of a
company,” iPass made a duplicate premium payment to Travelers, this time through
Lockton, so that it would not lose coverage. iPass also initiated an investigation to
determine what had happened to the checks it had sent to IMC. Legal counsel for iPass,
Paul Levy, gathered information and verified that iPass had made all payments to IMC
and had no outstanding debts or obligations to IMC, and that IMC had failed to forward
the funds to Travelers. He learned there were not just one, but two, quarterly payments—
the third and the fourth—that IMC had failed to forward to Travelers.
According to Phyllis Kaufman, regional controller for Travelers, the third
installment for the D&O policy was due July 15, 2009. Kaufman sent a demand fax to
IMC when Travelers did not receive the payment, and left a message for appellant asking
for a call back. When Kaufman did not hear from appellant, she called again and tried to
leave a message but was unable to do so because his voice mail box was full. The fourth
installment was due September 15, 2009; Travelers did not receive the fourth payment.
Kaufman sent a letter to appellant dated December 22, 2009, stating Travelers had
not received payments despite repeated attempts to contact him, and would take further
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steps if it was not paid by December 30, 2009. Appellant did not respond. Travelers sent
appellant an official termination letter on January 6, 2010, informing him that effective
January 10, 2010, he was no longer a broker for Travelers. Travelers reimbursed iPass
for the extra quarterly payment it had made, and absorbed the loss of the unpaid quarterly
installments. Travelers ultimately obtained a default judgment against appellant, but as
of the date of the trial, appellant had not paid back any of the missing money.
iPass also made numerous attempts to contact appellant, and it took “quite some
time and a fair amount of effort” to reach him. iPass sent letters, and Levy called
multiple times and left messages stating the reason he was trying to reach him. On one
occasion, Levy was able to speak to a woman at appellant’s office and asked her to relay
the message that iPass was considering referring the matter to the police.
Thereafter, in or about October 2010, Levy finally received a call from appellant,
and the two had what Levy described as a “brief, kind of a bizarre conversation.” Levy
told appellant that iPass had sent appellant a large amount of money, that its policies were
almost canceled, that this was a serious matter, and that appellant needed to return the
funds. Appellant responded that his finances had suffered significantly in the economic
downturn, and added, “When I lost the iPass account, I almost lost everything.” Levy
said he empathized but needed the money to be returned.
After a “fairly unnatural pause” of “some seconds,” Levy asked, “Mr. Medrano,
are you still there?” Appellant responded in a “hushed tone, almost a whisper,” “I don’t
have it anymore.” Until that point, appellant had been speaking in a normal tone and
volume, albeit rapidly and nervously, but he “abruptly changed and paused and he
became very, very quiet when he said that he no longer had the money.” Levy asked
whether appellant had any of the money; appellant responded he did not, and said he did
not mean to keep the money.
Levy gave appellant the option of repaying the money over time, to which
appellant responded, again in a very quiet voice, “Well, okay, maybe.” When Levy said
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he would need to collateralize the repayment and memorialize the agreement in writing,
appellant’s tone of voice “went back to normal” and he said, “I have another call. I have
to go. I can’t talk to you any more about this,” and hung up. Appellant did not say at any
time during the conversation that he thought he was entitled to keep the money.
Later that day, Levy received an email from appellant stating he had verbal
permission to keep the money and that he would sue iPass if iPass hassled him. Levy
discussed the matter with Verdecanna, who seemed surprised and said he did not know
anything about the situation. Levy also discussed the matter with Gatoff and Garvey, and
the three decided to call the police.
iPass witnesses testified they never made any agreements with appellant to renew
the D&O policy for the July 2009 to July 2010 period, or to compensate him for any
work performed in connection with the renewal process. Verdecanna testified he never
made any promises to appellant because he had no authority to decide on a policy that
would be in effect after he left the company. Verdecanna felt appellant had done quite a
bit of work in connection with the D&O renewal and had mentioned to the CEO that
appellant should be compensated for it; however, that was a recommendation and nothing
Verdecanna could enforce.
Golden Valley Evidence
After Travelers terminated its contract with appellant, it sent letters to other
insureds that used IMC as its broker, including Golden Valley Federal Credit Union
(Golden Valley), to notify them that Travelers had canceled its agency agreement with
IMC. Travelers also informed Golden Valley that its premiums had not been paid, and
asked for proof that Golden Valley had paid IMC, if it had done so. Golden Valley had
in fact received invoices from IMC for Travelers and had sent checks to IMC totaling
$38,787. Golden Valley provided Travelers with copies of those checks, as well as
documents showing the checks had been cashed by IMC. Golden Valley expected
appellant to pay the Travelers premiums with the $38,787.
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Travelers presented appellant with proof that Golden Valley had paid IMC, and
demanded payment from appellant, but appellant continued to refuse making the
payments. Golden Valley’s CEO also called appellant; appellant told her “not to worry,”
and said he had spoken to Travelers “about moving the business through an aggregator,
but final decision had not been made and Travelers had jumped the gun.” Appellant
assured Golden Valley that IMC was still its agent, and that the premiums had been paid.
Golden Valley terminated its relationship with appellant.
Defense
Appellant testified in his own defense. He was the president of IMC, vice-mayor
of Clayton, California, and president of a non-profit organization that raised money for
local organizations. He had been a licensed insurance broker for 26 years and had
worked with iPass when its account was “very small,” before it grew and became a
publicly traded company in 2003.
In the beginning of 2009, appellant was the only broker for iPass and handled all
of its insurance policies. He began working up the D&O policy for renewal as early as
February or March of 2009 because he knew Verdecanna was thinking about leaving
iPass. Verdecanna wanted to make sure there would be no problems with insurance
coverage; he asked appellant to stay with incumbent carriers and work on reducing the
premium prices.
Appellant successfully reduced the premiums by a little over 10 percent.
Verdecanna was satisfied with that result and told appellant to obtain insurance at that
price. Appellant prepared the invoices for the D&O renewals, and when he had an email
exchange with Verdecanna on June 19, 2009, he believed iPass would be renewing its
D&O policy through IMC. When Verdecanna responded that he would pay all of the
invoices, appellant understood that to mean that iPass would be paying all invoices,
including the D&O renewal, for a total of $715,493. His commission from the $715,493
would have been approximately $70,000.
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Appellant believed the June 23, 2009 meeting with iPass officers was a “just a
rubber stamp meeting” as well as a “meet and greet” for him to meet with the new CFO
and with Garvey. He therefore handed the D&O renewal invoices to Verdecanna before
the meeting; Verdecanna responded, “okay, we will take care of these.”
Appellant denied telling Gatoff and Badgis at the meeting that he had contacted
numerous other insurance companies and that they had all refused to provide quotes.
When asked why the presentation materials stated he had done so, he responded that
“someone from my office prepared [the report]”—“possibly Karen Hammer who no
longer works for me”—and that the information was a “mistake.” He testified he had
only contacted the incumbent insurance company, and that he did not go to a variety of
companies like he did the year before. He had reviewed the presentation materials before
the meeting and took “full responsibility” for the “mistake.”
Appellant believed the $79,815 check he received from iPass in July 2009 was
“compensation still owed for D and O—work we did on D and O and everything else.”
The money he believed he was owed was the commission he would have earned if the
D&O policy had been renewed and bound. He believed he was also entitled to a broker
fee. Appellant stated that Verdecanna told him in “early June” in a “verbal conversation”
that he wanted IMC to renew the D&O policy. He said Verdecanna testified incorrectly
when he said he did not promise appellant any compensation for the D&O renewal.
Appellant said he did not respond to iPass’s September 2009 letter to him
demanding a refund because “the money was owed to me.” iPass sued appellant in
December 2010, and in response, appellant counter-sued, claiming iPass owed him over
$100,000 in compensation. He claimed he was owed $119,492—about $70,000 in
commission and $50,000 as a broker fee—and stated Verdecanna had agreed to pay it.
Appellant acknowledged receiving a call from Levy in October 2010. At the time,
his bank account trust balance was $1,544.67. Appellant may have told Levy, “I don’t
have any funds,” and may have also said he did not have the funds to arrange a payment
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plan. He hung up because Levy threatened to take appellant’s home and car and to call
the police and bring criminal charges against him. Appellant thereafter received a call
from a police detective and provided the detective with information he believed showed
he did not act criminally.
Appellant testified that iPass was one of IMC’s major clients, and that when iPass
terminated the relationship, it impacted IMC’s revenue. IMC’s bank statement showed
that on March 6, 2009, its account balance was negative $58,096.44. Appellant admitted
his account showed a $72,000 check from iPass clearing his IMC account on June 1,
2009. The third quarterly payment was due on July 15, 2009, and IMC’s account balance
as of July 14, 2009 was $55,053.03. Appellant admitted he “did not send the third
installment.” He admitted cashing the fourth quarterly payment of $79,815 from iPass on
July 28, 2009. On September 15, 2009, IMC’s account balance was $66,884. On
November 12, 2009, the account balance was negative $6,948.
Appellant agreed with Kopper that the industry standard is for the broker to earn
and receive compensation only upon binding, and not until the effective date of the
policy. He acknowledged that brokerage firms do not charge for participating in “bake-
offs” where they compete for business. He acknowledged that brokers have a fiduciary
duty to their clients, and that if a broker misuses premium payments, it would be a breach
of fiduciary duty as well as theft. Appellant testified he did not intend to steal, embezzle,
or misappropriate any money from iPass. He presented evidence that he continued to pay
other insureds’s premiums during the period after July 2009.
As to Golden Valley, appellant testified that he invoiced Golden Valley on
December 18, 2009, and received $38,787 from Golden Valley five days later, on
December 23, 2009. After deducting his commission of $5,626.03 from that amount, the
remainder—$33,161.97—was the net premium owed to Travelers. He did not send the
$33,161.97 to Travelers, and did not refund that amount to Golden Valley, because he
kept it as an offset for money owed to him by Travelers.
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David Todd Shuey, an insurance defense partner at a law firm, testified he had
known appellant for approximately eight years. He considered appellant a friend and
knew him as a fellow councilmember for the city of Clayton. Shuey recommended to his
law partners that they retain IMC for brokerage services because he believed appellant
would do a good job. The firm was still using IMC as its broker at the time of trial,
despite its partners being aware that appellant had been charged with embezzlement.
The jury deliberated for less than a day and reached a verdict, finding appellant
guilty of grand theft by embezzlement (§§ 487, subd. (a), 508), and finding true the
excessive taking allegation (§ 12022.6, subd. (a)(1)). At sentencing, the trial court denied
appellant’s request for probation and for bail pending appeal, and sentenced him to
county jail under section 1170, subdivision (h), for a total of three years, with eighteen
months suspended. This consisted of the middle term of two years for embezzlement and
one consecutive year for the excessive taking enhancement.
DISCUSSION
Background
The prosecution moved in limine under Evidence Code section 11012 to present
evidence that appellant retained funds from Golden Valley. It argued the evidence was
relevant “to show his motive as well as his intent and his knowledge that he was taking
those funds [from both Golden Valley and iPass around the same time, when he was
having financial issues] for his personal use as opposed to a mistake or oversight . . . .”
The prosecution stated it would not take long to present the evidence, which would be
done through the testimony of just two witnesses—Kaufman and a custodian of records
from Golden Valley. The defense objected on the ground that “[i]t would be basically a
trial within a trial . . . Who knows if they are actually even going to qualify under the
common plan of scheme under 1101(b). And my reading of 1101(b) is they have to be
2
All further statutory references are to the Evidence Code unless otherwise stated.
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not necessarily mirror images, but have to be pretty close in act, the modus in which it is
done, etc.” The trial court responded, “It seems like . . . the uncharged conduct is
essentially identical to conduct in this case. And even has one of the same insurance
companies . . . .” The court, which had previously expressed concern that the testimony
relating to the uncharged conduct could take up too much time, stated it had determined
the evidence was “significantly probative under 352 and it is not something I am going to
exclude for that reason.” The parties argued the matter further, and the court ultimately
granted the prosecution’s motion to present the evidence in its case in chief.
Immediately before Kaufman testified regarding the funds appellant retained from
Golden Valley, the trial court stated to the jury: “You are going to hear evidence now of
some issue involving another company called Golden Valley Federal Credit Union. This
incident is actually not charged in this case, but I am going to instruct you [that] you can
use this other incident that is not charged for evidence of . . . a plan or scheme, common
plan or scheme for his motive. So, you can use that if you find it to be true to assist you
to make the determination in the crimes he is actually charged with.” The court stated it
was going to provide the jury with more detailed instructions at a later time.
After closing arguments, the trial court stated: “The People presented evidence
that the defendant committed embezzlement against Golden Valley Federal Credit Union
that was not charged in this case. You may consider this evidence only if the People have
proved by a preponderance of the evidence that the defendant in fact committed the
uncharged offense. [¶] . . . A fact is proved by a preponderance of the evidence if you
conclude that it is more likely than not that the fact is true. [¶] If the People have not met
this burden, you must disregard this evidence entirely. If you decide that the defendant
committed the uncharged offense, you may, but are not required to, consider that
evidence for the limited purpose of . . . deciding whether or not the defendant acted with
the intent to deprive the owner of the property or the defendant had a motive to commit
the offense alleged in this case or the defendant had a plan or a scheme to commit the
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offense alleged in this case. [¶] In evaluating this evidence consider the similarity or lack
of similarity between the uncharged offense and the charged offense. Do not consider
this evidence for any other purpose. . . [¶] . . . [¶] . . . Do not conclude from this evidence
that the defendant has a bad character or is disposed to commit crimes. [¶] If you
conclude that the defendant committed the uncharged offense, that conclusion is only one
factor to consider along with all the other evidence. [¶] It is not sufficient by itself to
prove that the defendant is guilty of embezzlement or that the allegation of excessive
taking of more than $65,000 has been proved. The People must still prove the charge and
allegation beyond a reasonable doubt.”
Contention
Appellant contends the trial court abused its discretion and deprived him of due
process and a fair trial when it admitted evidence of his prior uncharged misconduct
against Golden Valley. We disagree.
With exceptions not applicable here (domestic violence cases and sex offense
cases), evidence of specific instances of conduct by the defendant in a criminal case is
generally inadmissible to prove he committed the charged act. (§ 1101, subd. (a).) The
exceptions to this inadmissibility are provided in section 1101, subdivision (b), which
provides: “Nothing in this section prohibits the admission of evidence that a person
committed a crime, civil wrong, or other act when relevant to prove some fact (such as
motive, opportunity, intent, preparation, plan, knowledge, identity, absence of mistake or
accident . . .) other than his or her disposition to commit such an act.” Hence, “[a]lthough
evidence of prior offenses may not be introduced solely to prove criminal disposition or
propensity such evidence may properly be admitted whenever it tends logically,
naturally, and by reasonable inference to establish any fact material for the People or to
overcome any material matter sought to be proved by the defense.” (People v. Montalvo
(1971) 4 Cal. 3d 328, 331–332.)
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Other crimes evidence, which should be admitted with great caution and after
careful scrutiny (People v. Ewoldt (1994) 7 Cal. 4th 380, 404–405), is admissible to prove
a common plan or scheme if “the charged and uncharged crimes are sufficiently similar
to support a rational inference of” such a common plan or scheme (People v. Kipp (1998)
18 Cal. 4th 349, 369). The degree of similarity between the charged and uncharged
offenses varies depending on the inference it is admitted to support. (People v. Ewoldt,
supra, 7 Cal.4th at pp. 402–403.) “The least degree of similarity (between the uncharged
act and the charged offense) is required in order to prove intent. ‘[T]he recurrence of a
similar result . . . tends (increasingly with each instance) to negat[e] accident or
inadvertence or self-defense or good faith or other innocent mental state, and tends to
establish . . . the presence of the . . . criminal[] intent accompanying such an act . . . .’ In
order to be admissible to prove intent, the uncharged misconduct must be sufficiently
similar to support the inference that the defendant ‘ “ ‘probably harbor[ed] the same
intent in each instance.’ ” ’ ” (Id. at p. 402.)
Where evidence of the uncharged offense is admissible under section 1101, the
trial court then weighs, under section 352, the probative value of the evidence against the
“probability that its admission will (a) necessitate undue consumption of time or
(b) create substantial danger of undue prejudice, of confusing the issues, or of misleading
the jury.” (People v. Ewoldt, supra, 7 Cal.4th at p. 405.) The court’s rulings on the
admissibility of evidence under sections 1101 and 352 are reviewed for abuse of
discretion. (People v. Lewis (2001) 25 Cal. 4th 610, 637; People v. Hayes (1990)
52 Cal. 3d 577, 617.) Its ruling will not be overturned unless it is irrational, arbitrary, or
“falls outside the bounds of reason.” (People v. DeSantis (1992) 2 Cal. 4th 1198, 1226.)
Here, appellant was charged with grand theft by embezzlement in violation of
Penal Code, sections 487, subdivision (a) (grand theft), and 508, which provides that
“every clerk, agent, or servant of any person who fraudulently appropriates to his own
use, or secretes with a fraudulent intent to appropriate to his own use, any property of
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another which has come into his control or care by virtue of his employment . . . is guilty
of embezzlement.” “Fraudulent intent is an essential element of embezzlement.” (People
v. Sisuphan (2010) 181 Cal. App. 4th 800, 813.) Among the evidence the prosecution
presented relating to intent was an October 2010 email in which appellant claimed he had
“verbal permission” to keep the quarterly payment(s) from iPass, i.e., he had not
wrongfully retained it. Thus, intent was a key issue in the case.
The Supreme Court has “long recognized that if a person acts similarly in similar
situation he probably harbors the same intent in each instance . . . and that such prior
conduct may be relevant circumstantial evidence of the actor’s most recent intent. The
inference to be drawn is not that the actor is disposed to commit such acts; instead, the
inference . . . is that, in light of the first event, the actor, at the time of the second event,
must have had the intent attributed to him by the prosecution.” (People v. Roldan (2005)
35 Cal. 4th 646, 706, disapproved of on another ground in People v. Doolin (2009)
45 Cal. 4th 390, 421, fn. 22.) The fact that appellant retained money from another client
to which he owed a fiduciary duty, under similar circumstances, around the same time,
and in a nearly identical fashion, was highly relevant circumstantial evidence tending “to
negat[e] . . . good faith or other innocent mental state” and tending “to establish . . . the
presence of . . . criminal[] intent . . . .” (People v. Ewoldt, supra, 7 Cal.4th at p. 402.)
The trial court also acted within its discretion in determining under section 352
that the probative value of the Golden Valley evidence outweighed the probability that its
admission would either necessitate undue consumption of time or create substantial
danger of undue prejudice, of confusing the jury, or of misleading the jury. Because
appellant’s intent was the primary contested issue at trial, and the two events were
strikingly similar, the Golden Valley evidence had substantial probative value.
Moreover, the potential for undue consumption of time, undue prejudice, or confusion
was not particularly high, as the evidence was presented by the relatively short testimony
of just two witnesses, the facts relating to the prior misconduct were straightforward and
15
not likely to confuse the jury, and the prior acts were not inflammatory. (See People v.
Harris (1998) 60 Cal. App. 4th 727, 738–739 [factors to consider include the amount of
time it takes to present the evidence, the possibility of confusion, and whether the
uncharged acts are more inflammatory than the charged conduct].) The court also
properly instructed the jury that it could consider the evidence only for very limited
purposes—not to show appellant “has a bad character or is disposed to commit crimes”—
and as only one factor, “along with all the other evidence,” in determining whether
appellant committed the charged offense.
Appellant does not deny that he kept the funds from Golden Valley, but asserts
that the relevancy of the evidence was questionable because it did not necessarily
establish an intent to steal. He asserts he “could have retained the funds for a variety of
reasons, including the reason [he gave at trial], i.e., he kept the funds because he was
owed commissions and fees by Travelers.” The fact that appellant claimed there was an
innocent reason for keeping the funds, however, did not render the evidence irrelevant or
inadmissible. Rather, his testimony simply constituted one piece of evidence for the jury
to consider in evaluating whether appellant’s prior acts constituted misconduct.3 (See
People v. Carpenter (1997) 15 Cal. 4th 312, 330–333 [when the trial court admits prior
misconduct evidence, the jury must find by a preponderance of the evidence that the
defendant committed the prior misconduct before it can consider the evidence on the
issue of the defendant’s guilt of the charged offense], abrogated on another ground in
People v. Diaz (2015) 60 Cal. 4th 1176, 1185–1186.)
Appellant cites People v. Kronemyer (1987) 189 Cal. App. 3d 314 (Kronemyer),
disapproved of on another ground in People v. Whitmer (2014) 59 Cal. 4th 733, 739, in
support of his position that the Golden Valley evidence was not relevant, but the case is
3
As the trial court instructed, it was the jury’s role to determine whether the
prosecution had “proved, by a preponderance of the evidence that the defendant in fact
committed the uncharged offense.”
16
distinguishable. There, the defendant, who was an attorney, was charged with multiple
counts of embezzlement and grand theft of the assets of an elderly client who passed
away. (Kronemyer, supra, 189 Cal.App.3d at p. 324.) The prosecution sought to
introduce evidence of the defendant previously endorsing the client’s tax refund checks,
to show the defendant’s “propensity to steal [his client’s] property under the guise of gifts
and then lie under oath about that fact.” (Id. at p. 346.) The trial court admitted the
evidence for that purpose, then “flatly told [the jury] these prior acts were crimes.”
(Id. at p. 348.) The Court of Appeal held the court erred in admitting the evidence and
instructing the jury that the prior acts were crimes, thereby “conclusively resolv[ing]” for
the jury “the question of whether the tax refund deposits were thefts.” (Ibid.) The Court
of Appeal also held that because “merely describing the prior physical acts” of endorsing
his client’s tax refund checks did not necessarily establish an intent to steal, the evidence
was not relevant on the issue of intent. (Ibid.)
In contrast, here, the prosecution did not introduce the Golden Valley evidence in
order to prove appellant’s propensity to steal. Further, the trial court in this case did not
instruct the jury that the prior acts were crimes; rather, the court properly left it up to the
jury to make that determination. Finally, while the court in Kronemyer determined there
was insufficient evidence that the defendant’s prior acts constituted an offense, here,
there was ample evidence to show that appellant’s prior act of retaining the Golden
Valley funds constituted misconduct.
Appellant argues that admission of the Golden Valley evidence was also error
because “ ‘[e]vidence of a defendant’s poverty or indebtedness, without more, is
inadmissible to establish motive for robbery or theft . . . .’ ” He claims the trial court
improperly allowed the prosecution to admit the Golden Valley evidence for the purpose
of showing he was having financial problems. There is nothing in the record, however,
indicating that the Golden Valley evidence was admitted for that purpose. Rather, the
record shows it was admitted to show intent and the lack of mistake or other innocent
17
reason for retaining the funds from iPass. Appellant cites no relevant authority in support
of his position that the Golden Valley evidence should have been excluded simply
because it also happened to support the view that he must have been having financial
problems.
Appellant also asserts the Golden Valley evidence was improperly admitted
because prior misconduct evidence cannot be admitted for the purpose of showing a
common plan where identity is not at issue. Common plan, however, is not used solely to
prove a suspect’s identity. In People v. Rogers (2013) 57 Cal. 4th 296, 327–328, for
example, it was used to prove intent; the Supreme Court in that case held the trial court
“was well within its discretion in ruling that the combination of distinctive marks and
similarities in all three murders was sufficient to meet the standard for admissibility of
the other crimes evidence on the element of intent.” As in People v. Rogers, the trial
court in this case properly admitted the Golden Valley evidence because appellant’s
common plan of invoicing a client, depositing the check, and failing to forward the
premium payments supported a finding that he acted with a similar, fraudulent intent.
Finally, appellant argues that the trial court’s “error in admitting evidence . . . had
the legal consequence of violating” his constitutional rights to due process and a fair trial.
Assuming, without deciding, that appellant did not forfeit the issue by not raising it
below, we reject his constitutional arguments in light of our conclusion that there was no
wrongful admission of evidence.
DISPOSITION
The judgment is affirmed.
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_________________________
McGuiness, P.J.
We concur:
_________________________
Pollak, J.
_________________________
Jenkins, J.
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