People v. Preston, E015164

• Decision Date: 11 March 1996
• Docket Number: No. E015164,E015164
• Citation: 50 Cal.Rptr.2d 778,43 Cal.App.4th 450
• Court: California Court of Appeals Court of Appeals
• Parties: , 96 Cal. Daily Op. Serv. 1698, 96 Daily Journal D.A.R. 2830 The PEOPLE, Plaintiff and Appellant, v. Theresa PRESTON, Defendant and Respondent.

Page 778

50 Cal.Rptr.2d 778

43 Cal.App.4th 450, 96 Cal. Daily Op. Serv. 1698,

96 Daily Journal D.A.R. 2830

The PEOPLE, Plaintiff and Appellant, v. Theresa PRESTON, Defendant and Respondent.

No. E015164.

Court of Appeal, Fourth District, Division 2, California.

March 11, 1996.

[43 Cal.App.4th 451] Dennis Kottmeier, District Attorney, Joseph A. Burns, Deputy District Attorney, and Dennis Stout for Plaintiff and Appellant.

Elizabeth A. Barranco, El Cajon, under appointment by the Court of Appeal, for Defendant and Respondent.

OPINION

HOLLENHORST, Acting Presiding Justice.

The trial court dismissed a welfare fraud prosecution under Welfare and Institutions Code sections 11483 and 10980 ¹ because it found that a demand for restitution had not been made prior to the commencement of criminal proceedings. The trial court relied on People v. McGee (1977) 19 Cal.3d 948, 140 Cal.Rptr. 657, 568 P.2d 382 and its progeny, including this court's decision in People v. Jordan (1978) 86 Cal.App.3d 529, 150 Cal.Rptr. 334.

The People appeal, contending that a prior demand for restitution is no longer necessary in cases of welfare fraud under these cases because of the 1984 amendments to section 11483, and the enactment of section 10980 at that time.

We agree that the older cases are no longer controlling following the 1984 legislation. Accordingly, since the trial court erroneously assumed that a prior demand was required, we reverse its order granting defendant's motion to dismiss the action.

FACTS AND PROCEDURAL HISTORY ²

An eligibility worker for the San Bernardino County Department of Social Services testified at the preliminary hearing that defendant, Theresa Preston, received welfare benefits from 1991 to 1993. Benefits were awarded on the basis of an application from defendant which claimed that defendant's husband was not residing in her home. The statements were repeated on an application filed on August 5, 1992, and on several monthly eligibility reports.

A welfare fraud investigator investigated information that Mr. Preston was actually living with defendant, and that he had unreported employment income. She also testified that she read defendant a demand for restitution immediately before she arrested defendant. The amount of the alleged loss was approximately $40,000.

Two neighbors also testified that they believed that Mr. Preston was living in defendant's home during the relevant period.

Defendant was charged with welfare and food stamp fraud in violation of section 10980, subdivision (c)(2), a felony, and six counts of perjury (Pen.Code, § 118) arising from the allegedly false statements on her applications and monthly eligibility reports.

Defendant filed a nonstatutory motion to dismiss the information on grounds that the

State was required to seek restitution prior to bringing a criminal action, and that it had failed to do so. As noted above, the trial court granted the motion and dismissed the action.

SECTIONS 10980 AND 11483

Since its enactment in 1984, section 10980 has specified penalties for welfare fraud. Defendant was charged under subdivision (c), which provides penalties for obtaining benefits by false statements. Nothing in section 10980 requires a demand for restitution prior to filing charges, or at any other time.

Section 11483 provides: "Except as specified in Section 11483.5, 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 subject to prosecution under the provisions of Chapter 9 (commencing with Section 10980) of Part 2. [p] When the allegation is limited to failure to report not more than two thousand dollars ($2,000) of income or resources, or the failure to report the presence of an additional person or persons in the household, all actions necessary to secure restitution shall be brought against persons in violation of Section 10980. The action for restitution may be satisfied by sending a registered letter requesting restitution to the last address at which the person was receiving public assistance."

It will be noted that nothing in the present statute requires that the restitution demand be made prior to commencement of criminal proceedings. Since defendant finds such a requirement in the cases, we turn to them.

PEOPLE v. MCGEE AND OTHER PRE-1984 CASES

In In re Sands (1977) 18 Cal.3d 851, 135 Cal.Rptr. 777, 558 P.2d 863, our Supreme Court noted that section 11483 then provided that " 'All actions necessary to secure restitution shall be brought against persons in violation of this section as provided in Sections 12250 and 12850.' " Since former sections 12250 and 12850 stated the legislative intent that restitution be sought prior to the bringing of the criminal action, the Supreme Court found the requirement to be part of section 11483, notwithstanding the repeal of those two sections in 1973. (Id., at pp. 853-854, and fn. 1, 135 Cal.Rptr. 777, 558 P.2d 863.)

Eight months later, the Supreme Court resolved an issue left open in Sands, i.e., whether the failure to seek restitution prior to the institution of a criminal action was a fatal defect when the issue was raised on direct appeal. (People v. McGee, supra, 19 Cal.3d 948, 954, 140 Cal.Rptr. 657, 568 P.2d 382.) The court held that the statutory provision was mandatory, and "[u]nder section 11483, the state is required to seek restitution prior to bringing a criminal action and enjoys no discretion to refrain from complying with the dictates of the statute." (Id., at p. 961, 140 Cal.Rptr. 657, 568 P.2d 382.) The court again found that the 1973 repeal of sections 12250 and 12850 was no obstacle, particularly since the substance of the restitution requirement was continued in section 13200. ³

The court went on to find that the demand requirement was intended to provide protection for individuals accused of welfare fraud, that it should be given mandatory effect, and that failure to follow the prescribed procedure was a basis for challenging the subsequent criminal prosecution. (People v. McGee, supra, 19 Cal.3d 948, 961-966, 140 Cal.Rptr. 657, 568 P.2d 382.) The court found that the requirement was intended to "insure that enforcement officials make a case-by-case determination of whether the state's interest is adequately served simply by obtaining restitution, or whether criminal prosecution is in fact warranted. The 1957 legislation affords this limited protection to those accused of welfare fraud by requiring the state initially to seek restitution in all cases, while leaving the prosecutor free to determine whether or not criminal proceedings should thereafter be pursued." (Id., at p. 965, 140 Cal.Rptr. 657, 568 P.2d 382.)

This court had occasion to discuss the issue in 1978. In People v. Jordan, supra, 86 Cal.App.3d 529, 150 Cal.Rptr. 334, the People Other cases in the period from 1977 to 1984 relied on McGee to reach similar conclusions. In 1980, our Supreme Court found that the legislative intent to require a request for restitution had been first manifested in 1957, and "was reiterated in the 1970, 1977, and 1979 amendments to section 11483." (People v. Jenkins (1980) 28 Cal.3d 494, 509, 170 Cal.Rptr. 1, 620 P.2d 587.) Accordingly, the court held that, although prosecutions for perjury in connection with AFDC fraud could proceed either under section 11483 or Penal Code section 118, a prosecution for perjury under Penal Code section 118 could not be commenced until the restitution requirement set forth in section 11483 had been satisfied. (Ibid.)

                appealed a dismissal entered on grounds that the state had failed to seek restitution from the defendant prior to bringing the criminal action.  We considered whether the dismissal was in compliance with McGee and agreed with the trial court that "McGee contemplates something more than mechanical compliance with the statutory mandate to request restitution:  namely, that the person accused of fraud should be given an opportunity to make restitution, and if restitution is made, then the prosecutor should be required to reconsider the case in light of the fact that restitution has been made to determine whether prosecution is in fact warranted."  (Id., at p. 535, 150 Cal.Rptr. 334.)   Accordingly, we held that "[a] decision to arrest and prosecute made prior to the making of the demand for restitution does not comport with the legislative intent as expounded by the Supreme Court in McGee."  (Id., at p. 536, 150 Cal.Rptr. 334.)
                

Two years later, in 1982, our Supreme Court considered whether an administrative hearing decision exonerating defendant of welfare fraud collaterally estopped a criminal action for the same alleged misconduct. (People v. Sims (1982) 32 Cal.3d 468, 473, 186 Cal.Rptr. 77, 651 P.2d 321.) In finding collateral estoppel, the court noted in passing that section 11483 required the state to seek restitution before initiating criminal proceedings in certain cases. (Id., at p. 489, 186 Cal.Rptr. 77, 651 P.2d 321.)

Appellate court decisions in this period of time followed McGee in various contexts. For example, in People v. Williams (1980) 106 Cal.App.3d 15, 164 Cal.Rptr. 767, the court rejected a contention that prosecution was barred for failure to make a prior demand for restitution. In that case, the state had sent letters demanding restitution and the court held that these efforts were sufficient to comply with the demand requirement. (Id., at p. 21, 164 Cal.Rptr. 767.)

In People v. Harper (1981) 121 Cal.App.3d 283, 175 Cal.Rptr. 146, the court considered whether the restitution requirement had been met. It said: "The purposes underlying the demand requirement of section 11483 are: 1) to insure that enforcement officials make a case-by-case determination of whether the state's interest could be adequately served by obtaining restitution or by also proceeding with criminal prosec...