People v. Clapp

Decision Date05 April 2021
Docket NumberC081690
Citation62 Cal.App.5th 862,277 Cal.Rptr.3d 97
CourtCalifornia Court of Appeals Court of Appeals
Parties The PEOPLE, Plaintiff and Respondent, v. Daniel Cory CLAPP, Defendant and Appellant.

Sandra Gillies, under appointment by the Court of Appeal, for Defendant and Appellant.

Kamala D. Harris and Xavier Becerra, Attorneys General, Gerald A. Engler, Chief Assistant Attorney General, Michael P. Farrell, Assistant Attorneys General, Stephen G. Herndon and Daniel B. Bernstein, Supervising Deputy Attorneys General, for Respondent.

MURRAY, J.

Defendant Daniel Cory Clapp pleaded no contest to concealing the true extent of his physical activities and abilities from his employer, the Department of the California Highway Patrol (CHP), and the State Compensation Insurance Fund (SCIF). ( Pen. Code, § 550, subd. (b)(3) ).1 Consistent with the resolution negotiated by the parties, the trial court granted defendant three years’ probation, and as a condition of probation, ordered him to pay restitution. Following a restitution hearing, defendant was ordered to pay $30,095.68 to SCIF for temporary disability benefits and $81,768.01 to CHP for benefits wrongfully obtained. He was also ordered to pay $1,350 and $70,159 to SCIF and CHP respectively for investigative costs. Defendant appeals the restitution award as to investigation costs contending that, as public investigative agencies, neither SCIF nor CHP is entitled to reimbursement for the costs of investigating his claim.

We conclude that as direct victims of defendant's fraud, both CHP and SCIF are entitled to restitution for investigative costs incurred in an effort to justify discontinuance of payments and recoup money defendant fraudulently obtained. Accordingly, we affirm.

FACTUAL AND PROCEDURAL BACKGROUND

Defendant was a CHP officer at the Chester area substation of the Susanville office, when he was injured on the job. Defendant claimed injuries to his shoulder, head, and knees.

Defendant began collecting disability payments under Labor Code section 4800.5.2 Those payments came out of CHP's budget. In April 2012, based on a tip, the worker's compensation fraud unit of the CHP began investigating defendant. The unit conducted surveillance, including on travel, doctor's visits, shopping, and camping, which included boating, swimming, and chopping wood. In October 2013, CHP investigators showed the surveillance videos to defendant's doctor. Based on the videos, the doctor agreed if she had been aware of defendant's activities, she would have released him to work in April 2012. She also agreed defendant's complaints had been a "gross misrepresentation." On October 10, 2013, the doctor released defendant for full duty with no restrictions.

Between April 2012 and October 2013, defendant received over $80,000 in Labor Code section 4800.5 disability payments. And between March 2013 and October 2013, defendant received over $30,000 in temporary disability payments from SCIF.

CHP officers logged 1,761 hours investigating defendant and his activities on disability leave. Based on a median wage of $41.27 per hour, CHP sought reimbursement for $70,159 in salary costs to investigate the case. CHP did not seek restitution for gas and vehicle maintenance, lodging and meals for investigators while on assignment, overtime pay for investigators, medical treatment and exams for defendant, or video production.

SCIF investigators spent 59 hours investigating defendant's claims. At an average salary of $30 per hour, the agency spent approximately $1,770 on wages to investigate this case.

Defendant was charged with conspiring to make a false or fraudulent statement to obtain compensation ( Ins. Code, § 1871.4, subd. (a)(3) ; count 1); making a false and material statement to CHP and SCIF regarding his physical condition and abilities ( Ins. Code, § 1871.4, subd. (a)(1) ; count 2); concealing from CHP and SCIF the true extent of his physical activities and abilities ( § 550, subd. (b)(3) ; count 3); grand theft from the CHP (§ 487, subd. (b)(3); count 4); and perjury, committed on April 8, 2013 (§ 118, subd. (a); count 5). Pursuant to a plea bargain, defendant pleaded no contest to count 3, as a misdemeanor. In accordance with the plea, the trial court placed defendant on three years’ informal probation. On the People's motion, the trial court dismissed the remaining counts in the interest of justice.3

The People sought restitution for both CHP and SCIF in the amounts of benefits fraudulently obtained by defendant as well as the costs incurred investigating defendant's disability claims. The trial court heard argument on the propriety of ordering restitution for investigation costs to CHP and SCIF for a conviction under section 550, subdivision (c)(3), focusing primarily on their status as governmental agencies. The trial court found neither CHP nor SCIF were acting as a prosecuting agency in conducting their investigations. Rather they were victims entitled to restitution for investigative costs, under section 1202.4, including for wages paid to personnel investigating defendant. Accordingly, in addition to ordering restitution for benefits paid, the trial court ordered defendant to pay CHP $70,159 and SCIF $1,380 in restitution for investigative costs.4

DISCUSSION

On appeal, defendant does not challenge the restitution order concerning the payments he fraudulently obtained. His contention is limited to investigative costs. He maintains the investigative costs/salaries of employees of public agencies, such as CHP and SCIF, who were assertedly performing their normal job duties investigating defendant's claim do not constitute an economic loss and thus those entities are not entitled to restitution for those costs. We disagree.

In determining on appeal whether it was error to award restitution "to the public agencies for their investigative costs, we are mindful that the trial court's ruling ‘must be sustained unless it constitutes an abuse of discretion or rests upon a demonstrable error of law.’ " ( People v. Ozkan (2004) 124 Cal.App.4th 1072, 1075, 21 Cal.Rptr.3d 854 ( Ozkan ).) However, a restitution order based on an error of law would constitute an abuse of discretion. ( People v. Jennings (2005) 128 Cal.App.4th 42, 49, 26 Cal.Rptr.3d 709.)

As a general matter, where a victim has suffered economic losses as a result of a defendant's actions, a trial court must require the defendant to make restitution. ( People v. Phu (2009) 179 Cal.App.4th 280, 283, 101 Cal.Rptr.3d 601.)

And where, as here, section 550 is violated, "[r]estitution shall be ordered," with the trial court determining "the amount of restitution and the person or persons to whom the restitution shall be paid." ( § 550, subd. (c)(4).) Section 550 also provides that, "[t]his section shall not be construed to preclude the applicability of any other provision of criminal law or equitable remedy that applies or may apply to any act committed or alleged to have been committed by a person." ( § 550, subd. (h).)

Along those lines, section 1202.4, subdivision (f) states in pertinent part: "[I]n every case in which a victim has suffered economic loss as a result of the defendant's conduct, the court shall require that the defendant make restitution to the victim or victims in an amount established by court order." This section requires victims to be fully reimbursed "for every determined economic loss incurred as the result of the defendant's criminal conduct" and contains an expressly nonexclusive list of reimbursable losses, "including, but not limited to :" economic loss such as "wages ... lost by the victim ... due to time spent as a witness or in assisting the police or prosecution." (§ 1202.4, subd. (f)(3)(E), italics added; see also Dyna-Med, Inc. v. Fair Employment & Housing Com . (1987) 43 Cal.3d 1379, 1389, 241 Cal.Rptr. 67, 743 P.2d 1323 ["the phrase ‘including, but not limited to’ is a phrase of enlargement"]; In re Johnny M. (2002) 100 Cal.App.4th 1128, 1133, 123 Cal.Rptr.2d 316 ( Johnny M. ) ["The term ‘economic losses’ is thus entitled to an expansive interpretation"].)

Further, under section 1202.4, "victim" includes: "A ... government, governmental subdivision, agency, or instrumentality, or any other legal or commercial entity when that entity is a direct victim of a crime." (§ 1202.4, subd. (k)(2), italics added.)5 The term "direct victim" includes: " ‘entities against which the probationer's crimes had been committed’— that is, entities that are the ‘immediate objects of the probationer's offenses.’ " ( People v. Martinez (2005) 36 Cal.4th 384, 393, 30 Cal.Rptr.3d 779, 115 P.3d 62 ( Martinez ), quoting People v. Birkett (1999) 21 Cal.4th 226, 232-233, 87 Cal.Rptr.2d 205, 980 P.2d 912.)6 For example, "a defrauded government agency can be a victim entitled to restitution." ( People v. Torres (1997) 59 Cal.App.4th 1, 3, 68 Cal.Rptr.2d 644 ( Torres ), citing People v. Crow (1993) 6 Cal.4th 952, 960, 26 Cal.Rptr.2d 1, 864 P.2d 80 ( Crow ) [county was victim of welfare fraud committed against the county].)

Here, CHP and SCIF are direct victims in that both entities paid defendant money he fraudulently obtained from them. This is undisputed. Defendant, however, contends that even though CHP and SCIF are victims of his fraud, they are not entitled to reimbursement of investigative costs. He maintains the agencies would have paid the salaries to the investigators on defendant's case, irrespective of his particular fraudulent claims. Thus, according to defendant, "neither agency lost work product as a result of the investigation in this case."

As this court and others have previously noted, " " "[a] victim's restitution right is to be broadly and liberally construed." " " ( People v. Nichols (2017) 8 Cal.App.5th 330, 342, 213 Cal.Rptr.3d 524 ( Nichols ).) Indeed, " ‘the word "loss" must be construed broadly and liberally to uphold the voters’ intent.’ " ( People v. Keichler (2005) 129 Cal.App.4th 1039, 1046, 29...

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