People v. McGee

• Decision Date: 19 September 1977
• Docket Number: Cr. 19381
• Citation: 19 Cal.3d 948,568 P.2d 382,140 Cal.Rptr. 657
• Court: California Supreme Court
• Parties: , 568 P.2d 382 The PEOPLE, Plaintiff and Respondent, v. Evelyn McGEE et al., Defendants and Appellants.

Page 657

140 Cal.Rptr. 657

19 Cal.3d 948, 568 P.2d 382

The PEOPLE, Plaintiff and Respondent, v. Evelyn McGEE et al., Defendants and Appellants.

Cr. 19381.

Supreme Court of California, In Bank.

Sept. 19, 1977.

Paul Bell, San Diego, under appointment by the Supreme Court, Appellate Defenders, Inc., under appointment by the Court of Appeal, and Theodore E. Davis, San Diego, for defendants and appellants.

Evelle J. Younger, Atty. Gen., Jack R. Winkler, Chief Asst. Atty. Gen., Daniel J. Kremer, Asst. Atty. Gen., Karl J. Phaler and Patricia D. Benke, Deputy Attys. Gen., and Beatrice Kemp, San Diego, for plaintiff and respondent.

TOBRINER, Justice.

Section 11483 of the Welfare and Institutions Code, which prescribes criminal penalties for those who fraudulently obtain welfare benefits under the Aid to Families with Dependent Children (AFDC) program, incorporates by reference a statutory requirement that 'restitution shall be sought . . . prior to the bringing of a criminal action.' ¹ Earlier this year, in In re Sands (1977) 18 Cal.3d 851, 135 Cal.Rptr. 777, 558 P.2d 863, we held that a criminal defendant may not collaterally attack a final AFDC fraud conviction on the ground that the state had failed to seek restitution prior to instituting the criminal proceedings, concluding that such a failure did not constitute a 'fundamental jurisdictional defect' cognizable on habeas corpus. In reaching that conclusion, we left open the question whether the failure to seek restitution prior to the institution of a welfare fraud prosecution would provide a basis for reversal of a conviction when such failure was raised on direct appeal, rather than on habeas corpus. In the instant case, we face the issue Sands did not resolve.

As we explain, resolution of this issue turns on the question of whether the provisions of section 11483 should be accorded 'mandatory' or 'directory' effect. As we point out, much semantic confusion has persisted in the past with respect to the mandatory-directory terminology. The decisions, however, establish that statutory procedures designed to protect individuals who are the subjects of adverse governmental action should generally be accorded mandatory effect, so that a failure to comply with applicable procedures invalidates any sanctions taken against them. The crucial issue in the instant case thus becomes whether the statutory requirement of a prior attempt at restitution in welfare fraud cases was designed to provide protection to a person accused of welfare fraud or was enacted solely as a mechanism for protecting the fiscal resources of the state.

For the reasons discussed below, we have determined that the statutory provision at issue sought to provide some, albeit limited, protection to those accused of welfare fraud; to achieve such protection, we conclude that the section must be accorded mandatory effect. As we explain, however, in the instant case the evidence presented at trial demonstrates that the state did, in fact, seek restitution from defendants with respect to one of the two separate fraudulent misstatements charged in the information. We therefore reverse the judgment only insofar as it rests on the fraudulent conduct as to which the state failed to show a timely attempt at restitution.

1. The facts

The uncomplicated facts of this case are not in dispute on this appeal. In the spring of 1972, defendants Evelyn and Earnest McGee were receiving AFDC benefits through the Imperial County Welfare Department. On April 17, 1972, Earnest began working for the Holly Sugar Company, but two days later, on April 19, 1972, Earnest and Evelyn falsely stated in a verified AFDC benefit renewal application that neither of them was employed, that they were receiving no income other than unemployment insurance and public aid and that neither had had a job offer within the last 30 days. The welfare department discovered the falsity of this statement on June 23, 1972, when Evelyn disclosed in an interview with a welfare department employee that Earnest had been working at Holly since about May; a review of Holly's employment records revealed that Earnest had actually begun working on April 17.

On July 5, 1972, the welfare department sent a letter to the McGees requesting their personal appearance at the department offices. On August 29, 1972, Earnest came to the department and signed a note in which he agreed to repay $338, the amount which the department determined had been improperly paid to the McGees as a result of the misrepresentations; by the terms of the note, payments were to be made in $5 monthly installments. According to the department's records, Earnest had only made two $5 payments on the note as of the date of trial in March 1975.

Earnest's employment with Holly terminated on August 2, 1972, and the McGees again sought and obtained AFDC benefits through the Imperial County Welfare Department beginning in the latter part of 1972. On January 5, 1973, Evelyn began working at the Airporter Hotel, but when the McGees completed their periodic AFDC renewal application on February 14, 1973, they failed to disclose this employment and falsely stated that they had received no income from any such source. The department discovered the McGees' misrepresentation on March 21, 1973 and discontinued welfare benefits as of that date; the department's computations reveal that the McGees received an overpayment of $734 as a result of this second false statement.

In December 1974, a three-count felony information was filed in the Imperial County Superior Court against the McGees. The first court pertained to the false statement of April 19, 1972, and alleged that Earnest, in violation of section 11483, had wilfully made the false statement to obtain aid and, by virtue of the statement, had obtained in excess of $200 in unjustified benefits. The second count related to the February 14, 1973, misrepresentation, and charged that Evelyn, in violation of section 11483, had similarly made the false statement to obtain aid and had obtained more than $200 in unwarranted benefits. The third count charged both Evelyn and Earnest with having conspired, in violation of Penal Code section 182, to commit the acts of welfare fraud charged in the first two counts. The information contained no allegation that the county welfare department or the district attorney had in any way attempted to seek restitution prior to the institution of the criminal charges.

After arraignment, defendants filed a general demurrer to the information, contending that in charging a violation of section 11483, the People must plead and prove that restitution had been sought prior to the filing of the criminal charges; since the information contained no such allegation, defendants charged a fatal flaw in the complaint which compelled dismissal. In response, the People argued that the restitution provision is merely permissive and that the failure to comply with it does not afford a defense in a criminal action. The trial court overruled defendants' demurrer and the case went to trial.

On the basis of evidence demonstrating the above facts, the jury returned a verdict finding defendants guilty of all of the charged offenses. The trial court suspended imposition of sentence and granted both defendants three years probation on condition that they each serve numerous weekends in jail and make restitution of $604.93 at the rate of not less than $20 per month. ² Defendants appeal from the order granting probation. (Pen. Code, § 1237.)

2. Under section 11483, the state is required to seek restitution prior to bringing a criminal action and is not granted discretion to decline to follow the statutory directive.

Defendants contend that under section 11483 their convictions must be reversed because the People failed to plead and prove that restitution was sought prior to the institution of these criminal proceedings. The People maintain, in response, that the statutory provision relating to restitution was intended only as a statement of a general legislative preference that restitution be sought prior to criminal prosecution and was not intended to impose a 'mandatory' requirement. Our analysis of the issue begins, of course, with a review of the relevant statutory provisions.

Section 11483 presently provides in full: 'Whenever any person has, by means of false statement or representation or by impersonation or other fraudulent device, obtained aid for a child not in fact entitled thereto, the person obtaining such aid shall be punished as follows: ( ) (1) If the amount obtained or retained is two hundred dollars ($200) or less, by imprisonment in the county jail for a period of not more than six months, a fine of not more than five hundred dollars ($500), or both such imprisonment and fine. ( ) (2) If the amount obtained or retained is more than two hundred dollars ($200), by imprisonment in the state prison for not less than one year or more than 10 years or by imprisonment in the county jail for not more than one year. ( ) All actions necessary to secure restitution shall be brought against persons in violation of this section as provided in Sections 12250 and 12850.' (Emphasis added.)

1] In 1970, at the date of the enactment of the emphasized portion of section 11483, section 12250 (fraud in obtaining aid to the needy aged) and section 12850 (fraud in obtaining aid to the needy blind) contained an identical concluding paragraph, which provided: 'It is the intent of the Legislature that restitution shall be sought by request, civil action, or other suitable means prior to the bringing of a criminal action.' (Emphasis added.) It is the interpretation of this latter provision, as incorporated into section 11483, which lies at the heart of the present controversy. ³

In determining the proper effect to be given this statutory language, we undertake at the outset to clarify some confusion in terminology that has frequently...