People v. Perez-DeLeon

• Decision Date: 03 June 1997
• Docket Number: VELEZ-RUI,D,172757,PEREZ-D,Docket Nos. 171788
• Citation: 568 N.W.2d 324,224 Mich.App. 43
• Parties: PEOPLE of the State of Michigan, Plaintiff-Appellee, v. EdgardoeLEON, Defendant-Appellant. PEOPLE of the State of Michigan, Plaintiff-Appellee, v. Wandaefendant-Appellant.
• Court: Court of Appeal of Michigan — District of US

Page 324

568 N.W.2d 324

224 Mich.App. 43

PEOPLE of the State of Michigan, Plaintiff-Appellee, v. Edgardo PEREZ-DeLEON, Defendant-Appellant.

PEOPLE of the State of Michigan, Plaintiff-Appellee, v. Wanda VELEZ-RUIZ, Defendant-Appellant.

Docket Nos. 171788, 172757.

Court of Appeals of Michigan.

Submitted Feb. 5, 1997, at Lansing.

Decided June 3, 1997, at 9:10 a.m.

Released for Publication Sept. 11, 1997.

Frank J. Kelley, Attorney General, Thomas L. Casey, Solicitor General, and Ronald W. Emery, Assistant Attorney General, for People.

State Appellate Defender by Robert J. Bretz and Edgardo Perez-DeLeon, in pro.per., for Edgardo Perez-DeLeon.

John F. Royal, Detroit, for Wanda Velez-Ruiz.

Before O'CONNELL, P.J., and HOLBROOK, and MARKMAN, JJ.

MARKMAN, Judge.

Following a jury trial, defendants were convicted of filing false Medicaid claims, M.C.L. § 400.601 et seq.; M.S.A. § 16.614(1) et seq., and false health-care claims, M.C.L. § 752.1001 et seq.; M.S.A. § 28.547(101) et seq. These convictions arose from defendants improperly billing Medicaid, Medicare, and Blue Cross Blue Shield of Michigan (BCBSM) for office visits when patients were not in the office. Defendant Perez-DeLeon, husband of defendant Velez-Ruiz and office manager of her medical practice, was sentenced to five years' probation with the first year to be served in jail and ordered to pay $17,169.34 in restitution. Defendant Velez-Ruiz, a doctor, was sentenced to five years' probation, 500 hours of community service and ordered to pay $38,340.63 in fines, restitution, and costs. Their appeals were consolidated. We affirm.

Defendants first argue that the statutes under which they were convicted were unconstitutionally vague. This Court has stated:

A statute challenged on a constitutional basis is clothed in a presumption of constitutionality. Further, a court is obligated to construe a statute as constitutional unless its unconstitutionality is clearly apparent.

A statute may be challenged for vagueness on three grounds: (1) it does not provide fair notice of the conduct proscribed; (2) it confers on the trier of fact unstructured and unlimited discretion to determine whether an offense has been committed; and (3) its coverage is overly broad and impinges on First Amendment freedoms. [People v. Hubbard (After Remand), 217 Mich.App. 459, 483-484, 552 N.W.2d 493 (1996) (citations omitted).]

This Court has further stated:

It is a basic principle of due process that a legislative enactment is void for vagueness if the enactment does not provide fair notice of the conduct proscribed. To give fair notice of proscribed conduct, a statute must give a person of ordinary intelligence a reasonable opportunity to know what is prohibited. The statute cannot use terms that require persons of common intelligence to guess at the statute's meaning and differ regarding its application. [Sanchez v. Lagoudakis, 217 Mich.App. 535, 555, 552 N.W.2d 472 (1996) (citations omitted).]

This Court reviews vagueness challenges in light of the facts at issue. People v. Holt, 207 Mich.App. 113, 121, 523 N.W.2d 856 (1994).

The Medicaid False Claim Act provides:

A person shall not make or present or cause to be made or presented to an employee or officer of this state a claim under the social welfare act ... upon or against the state, knowing the claim to be false. [M.C.L. § 400.607(1); M.S.A. § 16.614(7)(1) (emphasis supplied).]

M.C.L. § 400.602(d); M.S.A. § 16.614(2)(d) defines "false" as "wholly or partially untrue or deceptive." M.C.L. § 400.602(f); M.S.A. § 16.614(2)(f) defines the term "knowing":

"Knowing" and "knowingly" means that a person is in possession of facts under which he or she is aware or should be aware of the nature of his or her conduct and that his or her conduct is substantially certain to cause the payment of a Medicaid benefit. Knowing or knowingly does not include conduct which is an error or mistake unless the person's course of conduct indicates a systematic or persistent tendency to cause inaccuracies to be present.

The Health Care False Claim Act provides:

A person shall not make or present or cause to be made or presented to a health care corporation or health care insurer a claim for payment of health care benefits knowing the claim to be false. [M.C.L. § 752.1003(1); M.S.A. § 28.547(103)(1) (emphasis supplied).]

M.C.L. § 752.1002(c); M.S.A. § 28.547(102)(c) defines "false" as "wholly or partially untrue or deceptive." M.C.L. § 752.1002(h); M.S.A. § 28.547(102)(h) gives essentially the same definition for "knowing" as that in the Medicaid False Claim Act:

"Knowing" and "knowingly" means that a person is in possession of facts under which he or she is aware or should be aware of the nature of his or her conduct and that his or her conduct is substantially certain to cause the payment of a health care benefit. "Knowing" or "knowingly" does not include conduct which is an error or mistake unless the person's course of conduct indicates a systematic or persistent tendency to cause inaccuracies to be present.

Defendants argue that the Medicaid False Claim Act and the Health Care False Claim Act are unconstitutional because they do not contain a mens rea element. Specifically, they contend that the definitions of "knowing" and "false" permit a finding of guilt on the basis of mere negligence, rather than a finding of a culpable mens rea. They argue that the knowledge element refers only to knowledge of the filing of a claim, not knowledge that the claim is fraudulent. They claim that the statutes improperly allow fraudulent intent to be presumed if a claim is determined to be false.

By their terms, these statutes proscribe presentation of a Medicaid or health-care claim with knowledge that the claim is false. M.C.L. § 400.607(1); M.S.A. § 16.614(7)(1) and M.C.L. § 752.1003(1); M.S.A. § 28.547(103)(1). "Intent and knowledge can be inferred from one's actions and, when knowledge is an element of an offense, it includes both actual and constructive knowledge." People v. American Medical Centers of Michigan, Limited, 118 Mich.App. 135, 154, 324 N.W.2d 782 (1982). Therefore, it is not problematic that these statutes define "knowing" to include "should be aware." Contrary to defendants' contention, this actual or constructive knowledge element does not relate solely to knowledge that a claim is filed. The knowledge element relates to both "the nature of his or her conduct and that his or her conduct is substantially certain to cause the payment of a [Medicaid or] health care benefit." In the context of the basic charges at issue--presenting a claim, knowing the claim to be false contrary to M.C.L. § 400.607(1); M.S.A. § 16.614(7)(1) and M.C.L. § 752.1003(1); M.S.A. § 28.547(103)(1)--the "nature of his or her conduct" language in the "knowing" definitions must refer to falseness. Accordingly, the actual or constructive knowledge element of these offenses appropriately requires knowledge of both the falseness of a claim and that the claim is substantially certain to cause payment of a benefit.

The final sentence of both acts' definition of "knowing" states that "knowing" does not include "conduct which is an error or mistake...." The "error or mistake" language expressly excludes innocent errors from the "knowing" definition. We believe that this exclusion was not strictly necessary, because innocent errors clearly would not otherwise be included within the scope of knowingly presenting a false claim.

The acts then exclude from this innocent errors exclusion circumstances where "the person's course of conduct indicates a systematic or persistent tendency to cause inaccuracies to be present." "Systematic" is defined as "having, showing, or involving a system, method, or plan." Random House Webster's College Dictionary (1992). "Persistent" is defined as "constantly repeated; continued." Id. A system, method, or plan to cause inaccuracies indicates actual knowledge of falseness, while the constant repetition of inaccuracies indicates constructive knowledge of falseness. Contrary to defendants' suggestion, the "persistent tendency" language of the exclusion from the exclusion does not criminalize innocent errors merely because they are repeated; rather, we believe that it is intended to criminalize inaccuracies that are sufficiently persistent that the party may be charged with constructive knowledge of their falseness. Where, as here, claimants receive a steady flow of government money pursuant to claims prepared by the claimants themselves, they have an affirmative obligation to check the accuracy of their claims to avoid mistakes. Thus, this exclusion from the exclusion covers circumstances in which actual or constructive knowledge of falsity may be assumed because of the systematic or persistent nature of inaccuracies. As stated above, a knowledge requirement includes both actual and constructive knowledge. American Medical Centers, supra at 154, 324 N.W.2d 782. Where such actual or constructive knowledge exists, the conduct would not properly fit within the exclusion for innocent errors.

We conclude that the statutes provide fair notice of the proscribed conduct and do not "use terms that require persons of common intelligence to guess at the statute's meaning and differ regarding its application." Hubbard, supra at 483-484, 552 N.W.2d 493; Sanchez, supra at 555, 552 N.W.2d 472. We also note that in People v. Premen, 210 Mich.App. 211, 214-216, 532 N.W.2d 872 (1995), this Court affirmed a conviction under M.C.L. § 752.1003(3); M.S.A. § 28.547(103)(3) despite a challenge to its constitutionality on vagueness grounds; however, the Michigan Supreme Court, 450 Mich. 951 (1995), denied leave to appeal but ordered that this Court's opinion have no precedential effect. Specifically, we do not find the statutes unconstitutionally vague in the context of the improper billing at issue here. See Holt, supra. The evidence demonstrated 1,357...