People ex rel. Van de Kamp v. Cappuccio, Inc., No. F009724

• Court: California Court of Appeals
• Writing for the Court: WOOLPERT
• Citation: 204 Cal.App.3d 750,251 Cal.Rptr. 657
• Parties: The PEOPLE, Plaintiff and Respondent, * v. CAPPUCCIO, INC. et al., Defendants and Appellants. **
• Decision Date: 10 May 1988
• Docket Number: No. F009724

Page 657

251 Cal.Rptr. 657 204 Cal.App.3d 750 The PEOPLE, Plaintiff and Respondent, ^*
v.
CAPPUCCIO, INC. et al., Defendants and Appellants. ^** No. F009724. Court of Appeal, Fifth District, California. May 10, 1988.

[204 Cal.App.3d 754]

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Myron E. Etienne, Noland, Hamerly, Etienne & Hoss, Salinas, for defendants and appellants.

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John K. Van de Kamp, Atty. Gen., Robert H. Connett, Asst. Atty. Gen., and Bruce S. Klafter, Deputy Atty. Gen., San Francisco, for plaintiff and respondent.

OPINION

WOOLPERT, Acting Presiding Justice.

In a complaint filed in Monterey County Superior Court, defendants Frank and Santo Cappuccio, Cappuccio, Inc. (dba U.S. Freezer Co.), Rosaria Cappuccio, and Does I through X, were alleged to have committed unlawful business practices by understating the weight of squid purchased from fishermen, in violation of Fish and Game Code section 8011. It was also alleged that the understating of the weight resulted in defendant's not paying the full tax due under Fish and Game Code section 8045. The failure to use the correct weight figures was further alleged to have violated BUSINESS AND PROFESSIONS CODE SECTION 12512¹, which precludes a purchaser from buying any commodity according to a quantity which is less than the true quantity when the equipment used to measure the quantity is supplied by the purchaser.

The prayer in the complaint asked for a permanent injunction requiring defendants to properly prepare receipts as required by Fish and Game Code section 8011; to pay the full privilege tax pursuant to Fish and Game Code section 8045; to purchase fish from fishermen by representing that the quantity purchased is the true quantity, rather than something less than the true quantity; to pay a civil penalty of $2,500 for each violation of Business and Professions Code section 17200. The prayer also requested the court appoint a receiver to prevent defendants from any unlawful business practice, and to restore to any person any money which defendants may have acquired by their unlawful business practice. Costs were requested as well.

[204 Cal.App.3d 755] Defendants filed a general denial and claimed the bringing of the action constituted selective enforcement of the Fish and Game Code in violation of defendants' right of equal protection. The Attorney General's office was substituted as attorney for the People.

A court trial followed, with judgment entered in favor of the People and against defendants. The court found the defendants engaged in a consistent practice of underweighing squid purchased from fishing boats. The court found 592 violations of Fish and Game Code section 8011 and Business and Professions Code sections 12512 and 17200. A penalty of $73,528.05 was imposed pursuant to section 17206. The total figure was arrived at after the court calculated defendants failed to report the purchase of squid totaling $60,641.75; avoided taxes in an amount of $886.30; and that plaintiff (the People) incurred $12,000 in investigative costs. Defendants timely appeal from the judgment.

FACTS

U.S. Freezer is owned and operated by defendants, who are in the business of purchasing squid and herring from commercial fishing boats. The catch purchased is then packaged, frozen, and sold wholesale. The business is located on a wharf in Monterey. Defendants have been in the business for over 35 years.

Generally, fishing boats arrive early in the morning and dock at the wharf. The squid contained in the holds are pumped out onto a conveyer belt running into the U.S. Freezer building. Along with the squid, what is termed "trash" fish (fish other than squid) and incidental matter (such as seaweed) are also sucked out of the holds.

The conveyer belt is made of metal and has holes in it which allows water sucked from the hold to drain away. The conveyer belt empties into a hopper, which when opened, dumps its contents into a weight bucket or bin. The hopper is closed when the scale for the weight bin shows the bin contains approximately 500 pounds of material.

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After being weighed, the material then passes to another conveyer belt after the weighing bin is opened. This second conveyer belt carries the catch to an awaiting truck. The truck transports the catch to a processing plant.

The conveyer belts run continuously during the weighing process. Two levers are involved. One lever controls a gate at the top of the weighing bin and allows the squid to drop into it. The other lever opens the bottom of the weighing bin and allows the catch to fall onto the second conveyer belt. Defendant Santo Cappuccio acted as the weighmaster for the business, and generally operated both levers and recorded the weights.

[204 Cal.App.3d 756] At the processing plant, the squid are put through what is termed the bleaching process. Because they arrive dark gray, or even blackish in color, the squid are chilled with ice and cold water, which work to turn the squid to a whiter color. The squid increase in weight in direct proportion to the length of time they are exposed to the bleaching process.

In June of 1979, John Ewald, an assistant fish and game warden, was assigned to monitor the squid weighing operations at the Monterey wharf. The assignment resulted from complaints received by the department regarding weighing practices of fish processors. Ewald's investigation focused upon the accuracy and completeness of the weight slips which are filled out as the squid are unloaded and weighed. The receipts are then turned in to the department pursuant to state law. Defendants' operation was one of the six buyers Ewald observed.

According to Ewald, defendants (1) left the bottom and top of the weighing bin open, which allowed squid to pass through unweighed; (2) recorded bin weights by making hash marks on a piece of paper near the scale, with each hash mark representing 500 pounds despite the fact the scale actually registered as much as 580 pounds; (3) reduced the amount of squid in the weigh bin to a figure closer to 500 pounds upon discovering Ewald's presence. On at least four occasions in 1979, Ewald made scale readings which showed weights in excess of 550 to 580 pounds that were being recorded as 500 pound hash marks.

Two of defendants' trucks which were fully loaded with squid previously weighed at the wharf were directed to a public truck scale by a special investigator with the Division of Weights and Measures Standards. The investigator was looking into a complaint by the sealer of weights and measures in Monterey County.

The squid were observed being loaded into the trucks prior to the trucks being directed to the scales. After the weight of the emptied trucks was subtracted from the gross weight, the net weight of the squid inside the trucks was compared with the weight slips turned in to the Department of Fish and Game. These slips, as previously noted, purportedly reported the weight of the squid as it came out of the fishing boats prior to being loaded into the trucks.

For the first truck, the receipts showed 45,170 pounds of squid, whereas 48,080 pounds were found in the truck at the truck scale. As for the second truck, 22,760 pounds were found in the truck, and only 21,000 pounds were reported to the Department of Fish and Game on the receipts. When looking at the truck loads in terms of weight bins, the first truck was reported as containing 42 buckets at 500 pounds each. Therefore, on the average the bins actually contained 541 pounds. The second truck purportedly contained [204 Cal.App.3d 757] 90 bins worth of squid reported as weighing 500 pounds each. In actuality, the average weight of the 90 bins was 531 pounds.

In May of 1980, defendants' business records were searched pursuant to a warrant executed by Warden Harmond, also from the Department of Fish and Game. Receipts for 1979 and 1980 (through September 30), were studied. The receipts are turned into the department for tax purposes. Five hundred ninety-two receipts were involved in Harmond's investigation. Harmond looked at the records of Merchants' Cold Storage, the company which received the squid from defendants' trucks

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after they left the wharf. Merchants Cold Storage refrigerates all the squid processed and packed by defendants. Their records reflect the net weight of defendants' squid, on a daily basis.

According to Harmond's investigation, defendants filled out receipts in 1979 which accounted for 5,554,074 pounds of squid. The records of Merchants Cold Storage, on the other hand, indicated defendants packed and stored 7,215,464 pounds of squid (a difference of 1,670,394 pounds). For 1980, Harmond found a difference of 640,864 pounds of squid.

Harmond discussed these discrepancies with defendants. Frank Cappuccio allegedly explained them as human error. He also told Harmond that bleaching could account for 20 percent of the difference because the squid are bleached before being weighed by merchants. Harmond testified that even if he was to allow 5 percent of the unloaded weight to be attributed to incidental material and water (32,043 pounds) and 12.3 percent of the remaining weight to be attributed to weight gain during the bleaching process (74,884 pounds), there still remained a total variance for 1980 of 533,937 pounds (or 19 percent).

The scale used by defendants to weigh the squid upon unloading from the fishing boats was a 1,000-pound scale with one pound gradations. During 1979 and 1980, defendants purchased squid primarily from four fishing boats. The boats each had different hold capacities. There was defense testimony as to the rapid rate at which the squid are pumped from the holds and transported up the conveyer belt to the weighing bin, as well as testimony to the extent that the belts themselves are not stopped as a method of controlling the squid for purposes of weighing.

Nevertheless, of the 592 receipts submitted to the Department of Fish and Game which were later...