P. v. Abbott

Filed 10/5/06 P. v. Abbott CA6

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 977(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 977(b). This opinion has not been certified for publication or ordered published for purposes of rule 977.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SIXTH APPELLATE DISTRICT

In September 2004, defendant Bradley Stanton Abbott, a contract sales agent and sales manager for the California subsidiary of the Stephen Gould Corporation, Inc. (collectively Gould), a nationwide packaging corporation, was convicted of the grand theft of over $370,000 from the company by submitting false invoices from a business he owned and controlled for services that were not provided. Defendant was also convicted of misdemeanor perjury and failure to file tax returns without intent to evade a tax. He received four years in state prison and was ordered to pay fines, fees, and restitution. On appeal, defendant challenges the adequacy of defense counsel’s representation, jury instructions, and the attorney fee component of the restitution order.

FACTS

Defendant started working as a commissioned sales agent for Gould in its Fremont office in 1996. Sales agents contacted potential customers, helped design packaging for customers’ products, negotiated contracts, and located vendors for the various packaging components and services such as storage, assembly, etc. Gould provided sales agents with office space and an assistant and financed the transactions. Sales agents were personally responsible for the costs and for the development of the selling price which was supposed to include at least a 20 percent profit margin for Gould. Gould billed customers and paid vendors according to invoices submitted by sales assistants to the main office in New Jersey. The difference between the cost to customers and the payments to vendors constituted the commission, of which defendant received 45 percent and Gould 55 percent. Sales agents were “fiduciaries,” that is, they had a “duty not to act as, or on account of an adverse party without the prior and express written consent of the company.”

Defendant, being a “young, entrepreneurial, ambitious sales person . . . had begun to develop what we [the management] considered to be a descent [sic] level of business.” As a sales manager in 2001, he earned substantial commissions. In March 2001, defendant incorporated the Abbott Management Group (Abbott) and he contracted to provide sales services for Gould both as a shareholder of Abbott and as an employee of Abbott.

The sales assistant Gould provided to defendant was Claudia Townsend, who came to Gould and defendant on November 15, 2000, with experience in the Silicon Valley packaging industry. Purchase orders and other documents connected with defendant’s contracts were usually faxed to her and she entered the details into the computer. She worked with vendors of corrugated cardboard, foam, printing, labeling, insertion and palletizing services; determined whether and where inventory was stored to fill the orders; and requested release to the customer.

Towards the end of March 2001, defendant told Townsend he was looking into leasing a warehouse so he could minimize storage charges. At the end of March or early in April, defendant said he needed money for a down payment and a day or two later, he informed her he was going to purchase the name “Santa Clara Turnkey” (SCT) from one of Gould’s approved vendors, David Defranco. Defranco had operated SCT in a warehouse on Grand Street he owned as a one-person operation constructing boxes for packaging. When defendant purchased the name, Defranco had ceased packaging operations at the warehouse and terminated utility services to it; he was storing equipment there. Defendant bought the name for $500 and told Townsend he would take pallets out of their current storage locations and move them to the SCT warehouse. Townsend commented to defendant that he would need employees for the warehouse; defendant stated he needed capital before he could do that. He did not restore utility services to the warehouse.

A couple of days later, defendant instructed Townsend to duplicate a sample of an SCT invoice onto an Excel worksheet on her computer. Townsend testified that at that point, she realized the warehouse plans were not legitimate and that defendant was going to use invoices just to get money, but she followed the instructions. Defendant told her that the address on the invoice was to a box at a Mail Boxes Etc. location.

After that, initially at defendant’s direction and later sometimes on her own initiative, Townsend generated false storage and transportation invoices, backdated invoices to specific dates and to specific amounts defendant provided, and at times she suggested amounts that would be in line with what another warehouse had been charging. Defendant directed Townsend to submit the invoices to the head office in New Jersey with a request to expedite payment. Townsend knew the invoices were false since they did not have backup documentation. In fact, she faxed sales orders from one Gould fax machine to another to make it appear as if the vendor had faxed in the order. She never spoke to or had dealings with an SCT employee. However, she felt defendant was justified in the deception because he told her that Gould had stolen money from him and deprived him of commissions. She was also eager to keep her job. Child Protective Services (CPS) had threatened to remove her children from her home if she did not have a stable lifestyle, and she was anxious because defendant mentioned more than once that the sales manager did not like her and that defendant was trying to help her stay employed. Defendant paid Townsend frequent commission bonuses between December 2000 and March 2002 on which she did not pay taxes.

Participating in the scheme made Townsend nervous and stressed and defendant became moody. Sometimes he was her best friend and at other times he hated her. She complained to the manager about defendant’s attitude toward her. She also confided to another sales assistant, Julie Racine, that she was submitting false invoices, and after being counseled by Racine’s sales agent, Greg Taverite, she told her boss, Don Wallunas, on April 26, 2002. Wallunas immediately seized documents and defendant’s computer from his office for investigation. Defendant was arrested on April 29, 2002 and released the next morning.

Gould quickly sought a temporary restraining order and a court order freezing defendant’s and SCT’s bank accounts as well as a preliminary injunction but not before defendant moved over $462,000 to an account in Canada. Defendant filed a declaration in opposition to the temporary restraining order signed under penalty of perjury stating that SCT billed Gould only for genuine services and no invoice to Gould represented a charge for services that were not performed. In the course of the subsequent investigation, a special agent with the Franchise Tax Board determined that defendant had not filed corporate tax returns nor paid taxes for 2001 or 2002 and that he filed his 1996 through 2000 personal tax returns in April 2001 but that he had not paid either state or federal taxes for 2001 and 2002.

Gould counsel, Sharen Kirsch, and defendant and his attorneys visited the SCT warehouse on Grand Street 10 days after defendant’s arrest and release. The warehouse was “full of furniture. It looked like it had some remnants of some packaging materials. . . . [T]he bathroom looked like it hadn’t been used in a couple of years. The office didn’t really have any office supplies in it of any kind, and it was very dusty and dirty. There wasn’t any electricity.” Kirsch’s assistant, Colleen Eastman, described the warehouse as “unused, dusty, [and with] cobwebs.”

Previous tenants and sub-lessees left odds and ends in the warehouse. Christopher Kohlman, who leased space from Defranco from November 2000 to August 2001, ran a moving company called Forward Moving Company in approximately 75 percent of the usable space in the warehouse. He stored all of the product of his main client, Relax the Back store, in the warehouse. Kohlman had several regular drivers working for him and employed Defranco to manage the operation out of the warehouse. Defranco was there 30 to 40 hours per week through approximately August 2001. Defranco and Kohlman never saw defendant operating a business or storing product in the Grant Street warehouse.

Defranco also leased space to Gould sales agent Jon Wilson who stored some product in the warehouse and performed minor assembly operations there, as well as storing personal items and several automobiles in various states of restoration. When Kohlman left in 2001, Wilson brought in a 1973 station wagon and parked it in front of the roll up door where it was used as a table for some boxes that Wilson was assembling for a customer. The car never moved, and there was a period of several months during the fall of 2001 when a forklift would not have been able to enter or exit the warehouse. Wilson, who frequented the warehouse as often as twice a week in the spring of 2002, never saw defendant at the warehouse, let alone running a daily business there.

Defendant was convicted of grand theft with the finding that the taking exceeded $150,000 (Pen. Code, §§ 484, 487, subd. (a), 12022.6, subd. (a)(2), count 1);[1] perjury (§ 118, count 2); and misdemeanor failing to file a tax return without intent to evade a tax (Rev. & Tax. Code, § 19701, counts 4, 6, 8). Defendant was sentenced to four years in prison and ordered to pay fines, fees, and $372,727.21 in restitution. This appeal ensued.

ISSUES ON APPEAL

Defendant complains that trial counsel provided inadequate representation when he promised the jury a strong defense that he did not deliver; that the trial court erred in instructing the jury; and that the court abused its discretion in ordering defendant to pay $50,000 restitution to Gould for certain attorney fees.

INCOMPETENCE OF COUNSEL

Defendant complains that defense counsel[2] gave an opening statement in which he “outlined a multifaceted defense and described powerful, exculpatory testimony and evidence he would be presenting. He ended presenting almost none of the evidence he promised. By raising the jury’s expectations and then not delivering what he promised, he highlighted the deficiencies in the defense case and correspondingly strengthened the prosecution’s case.” Defendant concluded, counsel’s “failure to deliver on his promises . . . contributed to the overall impression that [defendant’s] defense was a sham.”

Specifically, defense counsel (1) argued that Gould had a financial motive to fabricate a case against defendant and promised testimony by a forensic accounting expert to show that Gould deprived defendant of a portion of the commissions that were due him; (2) promised that an attorney would testify he advised defendant that providing warehousing services would not be a conflict of interest; (3) failed to produce evidence that defendant and Defranco agreed that defendant would purchase Defranco’s business and share the warehouse; (4) did not produce promised evidence that no electricity was necessary to run the business or that defendant had an agreement with the occupant of the warehouse next door to provide electricity via an extension cord; (5) did not produce evidence to show that Townsend was “slow, spiteful, and desperate” or that CPS had removed Townsend’s children from the home once and threatened to do it again if she lost her job; and (6) failed to present additional exculpatory evidence that Gould might be punishing defendant for refusing to use a particular storage provider, Valley Outsources Solutions (VOS); and, (7) asserted that two other witnesses were biased against defendant.

To prevail on a claim of ineffective assistance of counsel, a defendant must show not only (1) that counsel’s performance fell below an objective standard of reasonableness under prevailing professional norms, but also (2) that, as a result, the defendant was prejudiced, i.e., there is a reasonable probability that, but for counsel’s errors, the result of the proceeding would have been different. (People v. Benavides (2005) 35 Cal.4th 69, 92-93.) “[I]n order to establish ineffective assistance of counsel, a defendant must show that counsel committed ‘errors so serious that counsel was not functioning as the “counsel” guaranteed the defendant by the Sixth Amendment.’ “ (Morris v. State of Cal. (9th Cir. 1991) 966 F.2d 448, 456, cert. den. 113 S.Ct. 96 (1992).)

Prevailing norms of practice are guides to determining what is reasonable, but they are only guides. There is a wide range of reasonable professional conduct and a strong presumption that counsel’s conduct fell within that range. (Strickland v. Washington (1984) 466 U.S. 668, 688-689 (Strickland).) “In evaluating a defendant’s claim of deficient performance by counsel, there is a ‘strong presumption that counsel’s conduct falls within the wide range of reasonable professional assistance’ [citations], and we accord great deference to counsel’s tactical decisions. [Citation.] Were it otherwise, appellate courts would be required to engage in the ‘ “perilous process” ‘ of second-guessing counsel’s trial strategy. [Citation.] Accordingly, a reviewing court will reverse a conviction on the ground of inadequate counsel ‘only if the record on appeal affirmatively discloses that counsel had no rational tactical purpose for his act or omission.’ “ (People v. Frye (1998) 18 Cal.4th 894, 979-980.) When the reason for counsel’s action or inaction is apparent on the record, the court will determine whether that reason reflects reasonably competent performance by an attorney acting as a conscientious and diligent advocate. If no explanation appears, an ineffective assistance of counsel claim will be rejected unless the attorney was asked for and did not offer an explanation, or there can be no satisfactory explanation. (People v. Coddington (2000) 23 Cal.4th 529, 652.)

This court has recently stated that “[m]aking promises about the defense evidence in opening statement and then failing to deliver does not constitute ineffective assistance per se.” (People v. Burnett (2003) 110 Cal.App.4th 868, 885 (Burnett).) In that case, defense counsel “ ‘chose, as a matter of sound trial strategy, not to put on any defense because the defense theory was an “incredible” one.’ “ (Ibid.) “Defendant apparently led defense counsel to believe that Leo [a 19-pound pet dog defendant pulled from its owner’s car and threw into traffic causing its death after the owner ‘tapped’ defendant’s rear bumper in a lane-changing incident] bit him and his tooth snagged on defendant’s finger. When all of the witnesses testified that this did not happen, including the only defense witness, . . . whom defense counsel told the jury he expected to corroborate the testimony of defendant but who instead testified consistently with prosecution witnesses, defense counsel was compelled to change course.” (Id. at p. 884.) We found the challenged acts to be “ ‘appropriate tactical decisions, subject to great deference on appellate review.’ “ (Id. at p. 885.)

Nevertheless, defendant relies on Anderson v. Butler (1st Cir. 1988) 858 F.2d 16 (Anderson), for the proposition that defense counsel’s failure to present evidence after promising it in opening argument is “prejudicial as [a] matter of law.” (Id. at p. 19.) In Anderson, defense counsel in a murder prosecution told the jury in an opening statement made at the close of the prosecution’s case, “that he would call a psychiatrist and a psychologist, whose testimony would show that defendant was ‘walking unconsciously toward a psychological no exit . . . . Without feeling, without any appreciation of what was happening, [defendant] on that night was like a robot programmed on destruction.’ This statement was based upon reports from the doctors in question in counsel’s possession, and the doctors were available. Nonetheless, the day after his opening, counsel rested his case on the basis of lay witnesses only, without calling the doctors. A verdict of murder in the first degree followed.” (Id. at p. 17.)

The federal district court found that counsel’s abandoned promise “went to the vitals of defendant’s defense, and no juror, obviously offended by defendant’s conduct, would ignore it. Indeed, it directly bore on the only extenuation. Nor can we accept the conclusion that the opening was a ‘strategic choice,’ or a ‘plausible option’; there could be nothing to gain. Counsel did not even have the justification of not knowing what would be the [prosecution’s] case, as it had already rested.

. . . [C]ounsel here did not abandon a defense--sometimes a plausible move--but continued to assert defendant’s mental condition, indeed as his principal defense. His action was greatly to weaken the very defense he continued to assert; a weakening that would not have occurred if he had omitted mention of the doctors in the first place.” (Anderson, supra, 858 F.2d at pp. 18-19.) The district court found prejudice in the fact that the doctors’ opinions, “if not diminished by the collateral evidence, ‘could have persuaded the jury to find Anderson guilty of second degree murder . . . [or] manslaughter.’ But even if this is not, in itself, a finding of prejudice, we cannot but conclude that to promise even a condensed recital of such powerful evidence, and then not produce it, could not be disregarded as harmless. We find it prejudicial as matter of law.” (Ibid.)

In the instant case, defense counsel promised that forensic accountant Vince Shannon would show that Gould deprived defendant of a portion of the commissions it owed him. This promise was made on the first day of trial, August 26, 2004. At that time, Shannon was working mostly on the concurrent civil proceeding involving defendant and Gould and, as defense counsel informed the court three weeks later, counsel was personally conducting a comparative analysis of defendant’s commission statements dating back to 1998. There would be no report from Shannon “until Vince and I get together and ratified and tell me he’s prepared to sign off on the work that counsel did . . . .”

Four days later, defendant produced a report detailing the forensic accounting testimony he intended to introduce at trial. The prosecutor objected to the testimony in a written motion; the court set an Evidence Code section 402 hearing for October 4, and on that day, defense counsel stated there would be no hearing because “[w]e interviewed Vince Shannon twice over the weekend and taking into consideration some of the matters that [the prosecutor] pointed out what we thought would be a knock out punch is no better than a jab, I think the defense rests.”

At that time, there was evidence in the record that defendant was to receive a 45 percent commission. Defendant’s belief that he was being shortchanged was presented through Townsend’s testimony that she had believed him when he told her that Gould had failed to pay him numerous “split” commissions that were due him from the global contract. Gould chief financial officer, Michael Lupo, testified that Gould did not pay defendant any commissions that may have been “in the pipeline” from the time of defendant’s arrest forward. Gould regional sales manager Wallunas and sales agent Taverite testified that these commissions were not paid to Taverite, who took over defendant’s accounts; the commissions apparently remained in Gould’s coffers. As the People state, “there was at least some evidence already supporting counsel’s conspiracy theory that Gould leveled the criminal allegations because it was attempting to avoid paying [defendant] hundreds of thousands of dollars in commissions due.”

As far as the record shows defendant did not file a petition for a writ of habeas corpus alleging ineffective representation and present declarations from himself, trial counsel, or anyone else with knowledge of the events (see People v. Mendoza Tello (1997) 15 Cal.4th 264, 266-267), defendant proffered the expert’s testimony in good faith. The People objected on the grounds that (1) that evidence was not relevant to the elements of the theft charge because defendant could not have known, at the time he was submitting false invoices, what Gould was ultimately going to pay in commissions upon the severance of the relationship between Gould and defendant; and (2) if offered to show bias on the part of the Gould witnesses, the probative value of the evidence was outweighed by its tendency to confuse the issues, mislead the jury, and consume undue time (Evid. Code, § 352). Upon further investigation with the witness, defense counsel agreed that the prosecution’s objections were well-founded and withdrew the testimony. Thus it appears from the record that, at the outset of the case, counsel intended to call the witness, but by the end of the trial (the People’s motion to exclude the evidence and the scheduling of the Evidence Code section 402 hearing occurred on the 19th and 20th days of a 25-day trial), the development of the evidence did not fulfill counsel’s expectations and he properly withdrew the offer. (Burnett, supra, 110 Cal.App.4th at p. 885.)

Withdrawal of the proffered witness’s testimony did not constitute a withdrawal of the defense from the jury’s consideration. Counsel argued that the commission statements were in evidence and urged the jury to “do the math yourselves. It will show you it’s forty-five percent, how much commission he earned.” Counsel argued extensively that “[h]ow much money [defendant] is owed goes to the heart of this case. It goes to motive. It goes to motive of the Gould people to manufacturer [sic] evidence, manipulate witnesses and to control this prosecution.” Defense counsel argued bias of witnesses, referred to evidence to illustrate how the prosecution failed to prove its case and how he had proven that SCT billed only for what it delivered, and stated that after defendant incorporated SCT and started to make “some pretty good money,” Gould was afraid defendant would be able to compete with its warehousing partner VOS. Counsel charged that “Gould did a preemptive strike, Gould went after [defendant]. Gould approached a very vulnerable and easily manipulated Claudia Townsend who tailored her testimony to meet their needs. They manipulated and controlled the documents, the evidence, the witnesses, the police department and eventually the district attorney’s office.” Counsel concluded, “this case is about greed. . . . They have to smash his business, he’s a threat to their profitability. . . .

. . . Don’t let their greed move you to convict [defendant] of a crime he did not commit.”

The brief references to the expert’s testimony during defendant’s opening statement on the first day of trial and in the prosecutor’s closing argument weeks later did not prejudice defendant. The prosecutor implied that the forensic accountant did not show up because there was no evidence of a deficit in commission payments and “an accountant is not gonna [sic] work from unreliable data.” Since both sides argued the reliability and import of the figures in evidence this reference was not inflammatory. In light of the mass of evidence submitted to the jury (testimony from 31 witnesses and 141 exhibits), it is not reasonably likely that a result more favorable to defendant would have occurred in the absence of the reference. (Strickland, supra, 466 U.S. 668, 694.)

Defense counsel’s failure to deliver on his promises of other specific witnesses or evidence was also not fatal. (1) Although attorney John Yohanan’s testimony describing his legal advice to defendant would be relevant on defendant’s state of mind in providing warehousing services that he owed to Gould, the record contains some “second-hand evidence,” as the People call it, which could support the inference that defendant reasonably believed such an arrangement was permissible. There was evidence that it was not uncommon for salespeople to “moonlight” and set up their own assembly shops as did Mark Jones and Mark Taylor of Gould. There is no explanation in the record why Yohanan, who was out of town but expected back the next Monday, was not called. It is possible that counsel was afraid the prosecutor would exploit the witness to defendant’s detriment or that defendant declined to waive his attorney-client privilege with Yohanan after further consultation and reflection. (See People v. Mendoza Tello, supra, 15 Cal.4th at pp. 266-267.) Because the record does not definitively show counsel’s decision not to call the witness to be unreasonable, the claim must be rejected on appeal. (People v. Coffman and Marlow (2004) 34 Cal.4th 1, 127.)

(2) Defendant next claims his counsel failed to offer any evidence showing an agreement by Defranco to turn over SCT as an ongoing warehouse business to defendant in exchange for forgiveness by defendant of a $16,000 debt Defranco owed him. In his testimony, Defranco adamantly denied owing defendant anything and insisted the only agreement was that defendant would pay him $500 to refrain from refiling the SCT fictitious business name registration. Defendant’s assistant, Townsend, also denied knowledge of the alleged $16,000 debt. However, defense witness Gerry Saunders, who did assembling, packing, and shipping for defendant both at his place of business in Tracy and at the SCT warehouse, testified defendant told him he was taking over “the business” and “the guy [Defranco] owed him money and they were gonna [sic] settle it that way.” Although this evidence is not the most persuasive on the agreement, it apparently was the best defense counsel could muster. He had no control over the witnesses’ recollection, and indeed, might have been misled by his client’s representations. Counsel cannot be faulted for relying on his client’s statements or when a witness fails to corroborate counsel’s statements. (Burnett, supra, 110 Cal.App.4th at pp. 884-885.)

(3) Defendant claims defense counsel did not present evidence that the work defendant was doing in the SCT warehouse did not need electricity and that defendant had the use of Defranco’s battery-operated forklift and an agreement with his next-door warehouse occupant Robert Peden for Peden to supply electricity to SCT via an extension cord. Nevertheless, the jury did hear evidence from Wilson and Defranco that Peden allowed an extension cord to be run to the SCT warehouse. Defranco stated that the electricity was used to recharge the forklift. Saunders testified that a lot of electricity was not required to run the warehouse because it had a skylight and the electricity was needed only for the limited power tools that were used. Saunders’ brother-in-law and a part time SCT employee, Tim Chapman, testified that he saw an extension cord running from the unit next door but that it was used to power lighting.

(4) Defendant faults defense counsel for claiming that Townsend was “incompetent, vindictive, and desperate enough to lie,” when she was shown to be bright, experienced, quick to learn, and highly competent at trial and for promising other testimony that “never materialized.”

Counsel cannot be faulted when the testimony or demeanor of a witness is different from what may have been expected. “ ‘Counsel’s actions are usually based, quite properly, on informed strategic choices made by the defendant and on information supplied by the defendant.’ “ (Burnett, supra, 110 Cal.App.4th at p. 884.) It is reasonably possible that before trial, defendant misled counsel as to Townsend’s abilities and demeanor. Nevertheless, counsel attacked Townsend in both his opening argument and final argument, since, as a crucial witness against defendant, Townsend’s credibility was a paramount concern. He elicited admissions from Townsend of her own wrongdoing and repeatedly tried to impeach her testimony by suggesting inconsistent statements in the past. The trial court’s exclusion of evidence of the removal of Townsend’s children from the home by CPS and its restriction of counsel to asking only if Townsend had a “governmental reason[]” for wanting to keep her job, were not failings of defense counsel. Defendant was not prejudiced by the fact that the evidence overall did not paint Townsend as a liar any more than evidence that tends to prove guilt is damaging and therefore prejudicial to a defendant’s case. (People v. Karis (1998) 46 Cal.3d 612, 638.)

(5) Finally, defendant claims that his counsel’s promising but failing to present evidence that VOS was “in cahoots” with Gould and that Gould encouraged its salesmen to use VOS; that defendant changed the locks on the SCT warehouse, locking Wilson out of it, even though Wilson explicitly denied this; and that Wallunas insisted police arrest defendant even though the police believed there was no probable cause (despite testimony from Officer Berberian that he had probable cause to arrest defendant on April 29, 2002, and that the arrest was not made at the behest of anyone from Gould), all “contributed to the overall impression that [defendant’s] defense was a sham.”

Counsel’s pre-evidence promises to the jury could reasonably have been expectations of what the evidence would show at trial based on information from defendant. Some of the evidence defense counsel promised could have been supplied by defendant, however, defendant exercised his constitutional right not to testify. Counsel cannot be faulted when a witness does not testify as expected or when a client exercises his constitutional right not to testify. (Burnett, supra, 110 Cal.App.4th at p. 885.)

Contrary to defendant’s claim, defense counsel did not “strengthen[] the prosecution’s case and depreciate[] his client’s case by irresponsibly making false promises in opening statement.” It appears defense counsel performed adequately with the resources available to him. In determining prejudice, we inquire whether there is a reasonable probability that, but for counsel’s deficiencies, the result would have been more favorable to defendant. (Strickland, supra, 466 U.S. at p. 687.) Given the overwhelming strength of the evidence against defendant, an outcome more favorable to defendant was not reasonably likely.

INSTRUCTION ON FALSE PRETENSES

Next, defendant claims that the trial court erred when it read the jury a special instruction requested by the prosecutor that theft by false pretenses could be committed even if the victim did not suffer economic loss.[3] The second sentence of the special instruction stated that the crime is not negated even if the victim receives something of value. Defendant claims this is misleading and the court should have instructed that defendant was not guilty unless he intended to harm Gould financially.

Theft by false pretenses is accomplished if the defendant made a false pretense or representation to the owner of property with the intent to defraud the owner of that property and the owner transferred the property to the defendant in reliance on the representation. (People v. Miller (2000) 81 Cal.App.4th 1427, 1440.) If a defendant makes both true and false statements to the owner, but the false statements are irrelevant to the owner’s decision to transfer property, theft by false pretense has not been committed. (People v. Wooten (1996) 44 Cal.App.4th 1834, 1842 (Wooten).) “[I]ntent to defraud” is “an intent to deceive another person for the purpose of gaining some material advantage over that person or to induce that person to part with property or to alter that person’s position to its injury or risk, and to accomplish that purpose by some false statement, false representation of fact, wrongful concealment or suppression of truth, or by any other artifice or act designed to deceive.” (CALJIC No. 15.26.)

The prosecutor had argued that defendant made three false representations which Gould relied on in making payment. Defendant signed annual contracts promising Gould that he would not act as an adverse party; he pretended that the company that was submitting invoices (SCT) was owned by Defranco, not by himself; and that the invoiced services were provided when they were not.

Defendant concedes that the first sentence of the complained of instruction (that if the elements of the crime were proved beyond a reasonable doubt, defendant has committed a crime even if the victim did not suffer an economic loss) was “a correct statement of law.” But in regard to the second sentence, he asserts that “where the defendant has not misrepresented the nature or quality of the merchandise, and the purchaser has received all the value his money paid for, the defendant is not guilty of theft at all. This is so even if the defendant failed to comply with terms of the contract that the purchaser considered important, but that did not actually diminish the value of the goods or services.”

Defendant’s argument incorrectly presupposes that the parties are not disputing whether defendant misrepresented the nature or quality of the goods and services, which the purchaser paid for or that the purchaser received value. Defendant’s position was that SCT performed storage, packaging, and other services represented by the invoices Townsend forwarded to Gould for payment. The prosecution asserted that no supplies, merchandise, workers, etc., passed into the dusty, unelectrified warehouse on Grand Street to work on defendant’s contracts and that other suppliers performed and were paid for the work defendant also billed for SCT. It was up to the jury to determine whether defendant made relevant misrepresentations which deceived Gould into paying for goods and services and whether the goods or services were received. The instruction was correct in placing these questions squarely to the jury.

Finally, defendant asserts the trial court should have instructed that the prosecution must prove that the defendant contemplated harm to the victim, and that it is not enough if the information concealed by the defendant had the potential to affect an economic decision. A wish, desire, or recognition that harm to a victim is possible is not the mental state required by law. It is well established that “[a] theft conviction on the theory of false pretenses requires proof that (1) the defendant made a false pretense or representation to the owner of property; (2) with the intent to defraud the owner of that property; and (3) the owner transferred the property to the defendant in reliance on the representation.” (Wooten, supra, 44 Cal.App.4th at p. 1842, italics added.) A defendant could be truly regretful that the outcome of a fraudulent transaction would be substantially or even minimally harmful to a victim, but that would not absolve the defendant from culpability if he or she made false representations intending to defraud the owner of the property. There was no instructional error.

RESTITUTION FOR ATTORNEY FEES

Next, defendant complains that the trial court abused its discretion when it included $50,000 for the fees of attorney Bernard Chanin in the victim restitution order. Although defendant had stipulated that he owed $254,591.90 in direct victim restitution to Gould[4] plus $15,000 in travel expenses, defendant objected to fees for Gould attorney Chanin, whose focus had been on potential liability in civil suits arising from the same facts. Chanin had not represented Gould in the criminal matter, but the court stated that his presence “was necessary in order to protect the interest of the corporation, given some of the accusations that were made.” The court added that “it was reasonable for [Gould] to have counsel present who could not be excluded from the courtroom in order to give them legal advice and with respect to their potential liability, et cetera. The Court feels that given the length of the trial, the amount of $50,000 is reasonable.”

Defendant claims that the trial court abused its discretion because “ ‘actual and reasonable attorney fees’ are ‘limited to reasonable attorney fees incurred to collect restitution otherwise permitted under the statute.’ (People v. Fulton (2003) 109 Cal.App.4th 876, [884]-885 [(Fulton)].) . . .

. . .

Here, there was no evidence that Mr. Chanin provided services that were the proper subject of a restitution order or that his fees were reasonable. Chanin’s bare bones bill states only that he provided ‘services,’ without enumerating what they were. Any services he may have provided must be gleaned from scattered mentions of him in the transcripts.”

The prosecution requested fees for Chanin, identified as the “[a]ttorney overseeing civil and criminal actions.” The People explain that “civil litigation involving [defendant] had been filed as a result of his scam, and there were plenty of allegations of a potential counter-suit thrown around by [defendant’s] counsel. Gould was represented by a series of attorneys from the time of the incident until the time of [the criminal] trial, with Chanin being the last in the line and Gould’s current counsel when the trial commenced . . . . Although the civil suit was ‘tolled’ pending trial, there was no evidence that it had actually been settled. . . . Moreover, [defendant] entered into a stipulation, agreeing to pay over $250,000 in restitution to Gould. Chanin’s presence throughout the trial was a necessary part of this settlement.” Chanin appeared on the record at the beginning of the criminal trial to identify himself when defendant unsuccessfully attempted to exclude his presence at the trial because he might be a “conduit” for information between witnesses. Defendant conceded that Chanin “appears to have attended the entire trial,” but claims that Chanin did not appear at the February 18, 2005 sentencing and restitution hearing. (The reporter’s transcript seems to belie this.)[5] Defendant states the parties’ references to civil actions are to a suit filed in 2002 by Gould against defendant for fraud, conversion, and breach of contract.

The California Constitution states that “all persons who suffer losses as a result of criminal activity shall have the right to restitution from the persons convicted of the crimes for losses they suffer.” (Cal. Const., art. I, § 28, subd. (b).) “ ‘[T]he trial court is vested with broad discretion in setting the amount of restitution [and] it may “ ‘use any rational method of fixing the amount of restitution which is reasonably calculated to make the victim whole.’ “ ‘ “ (People v. Ortiz (1997) 53 Cal.App.4th 791, 800.) The amount of restitution shall not be overturned unless there was an abuse of discretion. (Ibid.)

Section 1202.4, subdivision (f) provides, “in 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, based on the amount of loss claimed by the victim or victims or any other showing to the court. . . . The court shall order full restitution unless it finds compelling and extraordinary reasons for not doing so, and states them on the record.” A restitution order “shall be of a dollar amount that is sufficient to fully reimburse the victim or victims for every determined economic loss incurred as the result of the defendant’s criminal conduct” (id., subd. (f)(3)) including “[a]ctual and reasonable attorney’s fees and other costs of collection accrued by a private entity on behalf of the victim.” (Id., subd. (f)(3)(H).)

The attorney fee expense for Chanin’s services is recompensable. “ ‘ “ ‘A victim’s restitution right is to be broadly and liberally construed.’ [Citation.] ‘ “When there is a factual and rational basis for the amount of restitution ordered by the trial court, no abuse of discretion will be found by the reviewing court.” ‘ “ ‘ “ (People v. Keichler (2005) 129 Cal.App.4th 1039, 1045 (Keichler).) In this case, “the record contains prima facie evidence of reasonable attorney fees incurred by the victim to recover the economic losses. [Citations.]

Once the record contains evidence showing the victim suffered economic losses and incurred reasonable attorney fees to recover those losses, this showing establishes the amount of restitution the victim is entitled to receive, unless challenged by the defendant. In that event, the burden shifts to the defendant to show the portion of the attorney fees that are not recoverable because those fees can be attributed solely to a nonrecoverable category of noneconomic losses.” (Fulton, supra, 109 Cal.App.4th at p. 886.)

Applying these principles here, it is undisputed that Gould suffered economic losses as a result of defendant’s criminal conduct and that it incurred attorney fees to recover these losses. Gould faced expenses in connection with the criminal action as well as for the civil action or actions that were referred to in the record. Defendant did not present evidence refuting the attorney fee claims or any part of them. Gould made “a sufficient prima facie showing of reasonable fees incurred to recover economic losses, thus shifting the burden to show apportionment.” (Fulton, supra, 109 Cal.App.4th at p. 887.) Defendant made a claim for apportionment but did not present any evidence substantiating it. He expected the court to conduct an accounting without his carrying his burden. Without some showing, “it is not reasonable . . . to assume the value of the attorney’s work can be reasonably divided to reflect a percentage of the economic damages and a percentage of the noneconomic damages. Rather, as is typical in [in this case, fraud] cases, an attorney’s efforts necessarily focus on proving liability and the nature and extent of the plaintiff’s economic damages, with the amount of noneconomic damages dependent on substantiating these issues. . . . [Gould’s] damages were vigorously disputed, a reality which increased the attorney resources required to establish [Gould’s] economic losses. Also, it is common for attorney services expended in obtaining the two types of damages to overlap and for the recovery of the noneconomic damages to be dependent on the attorney’s time and effort proving the victim’s economic damages.” (Id. at pp. 887-888.)

If defendant is still not satisfied that the trial court properly ordered restitution under section 1202.4, subdivision (f)(3)(H), we note that the crime victim restitution statute uses the language “including, but not limited to [the enumerated losses of section 1202.4, subdivision (f)(3)(A)-(K)],” in subdivision (f)(3). Therefore, “a trial court may compensate a victim for any economic loss which is proved to be the direct result of the defendant’s criminal behavior, even if not specifically enumerated in the statute.” (Keichler, supra, 129 Cal.App.4th at p. 1046.) Although defendant worries that some of Chanin’s attorney fees are attributable to “preparing Gould employees for their trial testimony []or comforting them during trial” and “[g]eneral ‘overseeing’ “ of Gould’s involvement in defendant’s actions, and are not related “specifically to collection,” as the People say, Chanin’s purpose in being present throughout the trial and at the sentencing hearing was to “further the prospects of recovering Gould’s financial losses. . . . [Gould] obviously had a significant financial stake in the outcome of the trial, and Chanin was there to protect that financial stake.” There was substantial evidence supporting the trial court’s restitution order in this case; there was no abuse of discretion.

DISPOSITION

The judgment is affirmed.

Premo, J.

WE CONCUR:

Rushing, P.J.

Elia, J.

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[1] Further statutory references are to the Penal Code unless otherwise stated.

[2] Defendant states he was “represented by two attorneys, Mr. Watt and Mr. Ashworth. As there is no reason to distinguish between the two, [defendant] will refer to both as ‘defense counsel.’ “

[3] The People’s special instruction stated, “If you conclude that the elements of the crime of theft of false pretenses have been proven beyond a reasonable doubt, the defendant is guilty of the crime of grand theft whether or not the victim suffered economic loss. The fact that the alleged victim received something of value in exchange for the money that was paid under false pretenses does not negate or reduce the crime.”

[4] Without objection, the trial court ordered $50,000 in attorney fees for Silicon Valley Law Group for legal services to defendant, $1,100.71 to Pillsbury Winthrop for Gould, and $52,034.60 to Skjerven Morrill for Gould.

[5] The prosecutor stated at the sentencing hearing, “the Court knows when Mr. Chanin was here in the courtroom, so there is . . . and, of course, he is here to answer, but I don’t want to involve him if it’s not necessary.”