Filed 5/21/18 P. v. Bishay CA4/3






NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FOURTH APPELLATE DISTRICT

DIVISION THREE


THE PEOPLE,

Plaintiff and Respondent,

v.

JAMES FARAGALLA BISHAY,

Defendant and Appellant.


G054005

(Super. Ct. No. 11WF0661)

O P I N I O N

Appeal from postjudgment orders by the Superior Court of Orange County, Kimberly Menninger, Judge. Affirmed.
Jeanine G. Strong, under appointment by the Court of Appeal, for Defendant and Appellant.
Xavier Becerra, Attorney General, Gerald A. Engler, Chief Assistant Attorney General, Julie L. Garland, Assistant Attorney General, Peter Quon, Jr., and Susan Elizabeth Miller, Deputy Attorneys General, for Plaintiff and Respondent.

James Faragalla Bishay appeals from the trial court’s restitution orders following his convictions for theft, forgery, and recording a forged reconveyance deed. In a separate appeal, Bishay challenges his conviction and sentence. We address those issues in a companion decision, where the judgment has been affirmed in part, reversed in part, and remanded for resentencing (People v. Bishay (May 21, 2018, G053337) [nonpub. opn.]). In addition, Bishay has also filed a petition for writ of habeas corpus, which we have denied in a separate order (In re Bishay (May 21, 2018, G054704) [nonpub. order]). We have previously granted Bishay’s request for judicial notice of the records in all these related matters. (Evid. Code, §§ 452, subd. (d)(1) & 459, subd. (a).)
In this appeal Bishay claims the trial court erred by: 1) ordering restitution to his theft victim, Pacific Premier Bank (Bank), because at the restitution hearing the Bank failed to prove a causal connection between its claimed losses and Bishay’s crimes; 2) ordering restitution to the victim of his forgery crimes, Said Messiha, because Messiha is not a “victim” within the meaning of the restitution statutes, and because Messiha failed to prove his losses were caused by Bishay’s crimes; and 3) incorrectly calculating the actual amount of loss in both orders.
None of his contentions have merit, and we affirm the trial court’s restitution orders.
FACTS
After a contested restitution hearing, the trial court ordered Bishay to pay restitution to the Bank in the amount of $1,209,092.25, and to Messiha in the amount of $1,215,414.23. A representative from the Bank testified regarding its losses arising from Bishay’s grand theft conviction. In March 2007, the Bank loaned Bishay $3.125 million, secured by a deed of trust on a parcel of commercial real property in Los Alamitos. The terms of the loan were 17 months of interest-only payments, plus one final balloon payment of the entire original principal. The bank received only three payments, each for $25,083.19, and the loan went into default. Nothing from Bishay was ever received on the principal. A title insurance company later paid the Bank $575,000 in December 2008. In September 2010, the Bank finally sold the Los Alamitos property at a foreclosure sale, for a net amount of $1,395,733.13. The Bank also paid $54,825.38 in property taxes on the parcel. After adjusting for the offsets mentioned above, the Bank’s ultimate claimed total loss was $1,209,092.25.
Said Messiha testified as the victim of Bishay’s forgery and recording a forged reconveyance deed crimes. Messiha invested $959,510.40 in a deal with Bishay to buy real property in Alhambra. The deal never went through, and Messiha never recovered any of his investment. In order to mollify Messiha, Bishay offered him a part of another real property venture, this time the Los Alamitos property upon which the Bank later loaned Bishay its $3.125 million. Bishay gave Messiha a promissory note and agreed Messiha could record a trust deed on the Los Alamitos property in the amount of $1,207,400, so as to secure the note and his interest in the new venture. This amount represented Messiha’s original investment, plus the capital gains taxes Messiha was assessed after the Alhambra deal did not go through.
Bishay was convicted of forging Messiha’s signature and recording a false deed of reconveyance, thereby extinguishing the entirety of Messiha’s $1.2 million secured interest in the Los Alamitos property. In addition, Messiha presented evidence of $83,014.52 in legal bills from civil litigation regarding his lost interest in the property.
The trial court requested additional financial details, so at a subsequent hearing, the prosecutor introduced evidence Messiha hired an attorney to sue both the Bank and Bishay, in litigation stretching from June 2007 to March 2009. The total costs of this litigation were the $83,014.23 noted above. Messiha’s suit against the Bank settled for $75,000, all of which went towards his legal bill. Messiha was unable to recover anything from Bishay. The trial court credited the Bank’s $75,000 against the $83,014.23 legal bill Messiha submitted before reaching its ultimate restitution award.
In addition, during this second hearing, the prosecutor introduced evidence the original title insurance policy would have covered the entire loan, but in the course of contested litigation with the title insurer, the Bank finally settled for $575,000, rather than continue protracted and expensive litigation. In its own lawsuit against Bishay, the Bank obtained a stipulated judgment of $1.5 million, but Bishay never paid any of that judgment.
The Bank’s foreclosure on the Los Alamitos property was beset with complications, and that was why the Bank sold the property for only $1.4 million. In the interim Bishay filed for bankruptcy, and the recession was now “going into full swing.” In addition, Messiha’s lawsuit was still on-going, and the city of Los Alamitos was now raising new issues regarding environmental contamination under the property due to its once having been used as an auto repair facility and, later, an auto dealership.
Bishay offered no evidence to rebut either victims’ claims, or the amounts, and the parties offered argument. The trial court ordered restitution to the Bank of $1,209,092.25, and to Messiha of $1,215,414.23. Both awards included 10 percent interest, accruing from the date of sentencing.

DISCUSSION
I. Background
Under the California Constitution, as amended in 2008 by Marsy’s Law (Proposition 9), restitution to the victim of a crime “shall be ordered from the convicted wrongdoer in every case . . . .” (Cal. Const., art. I, § 28, subd. (b)(13); People v. Nichols (2017) 8 Cal.App.5th 330, 348, fn. 14 (Nichols).) This constitutional mandate is codified in Penal Code section 1202.4 (all further statutory references are to the Penal Code). Section 1202.4 provides in pertinent part: “It is the intent of the Legislature that a victim of crime who incurs an economic loss as a result of the commission of a crime shall receive restitution directly from a defendant convicted of that crime. . . .
[¶] . . . The court, in addition to any other penalty provided or imposed under the law, shall order the defendant to pay . . . [¶] . . . [r]estitution to the victim or victims, if any, in accordance with subdivision (f), which shall be enforceable as if the order were a civil judgment.” Subdivision (f) states: “[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, based on the amount of loss claimed by the victim or victims or any other showing to the court.”
“Only the ‘direct victim’ of a crime is entitled to restitution from the perpetrator of the offense. [Citation.]” (People v. Duong (2010) 180 Cal.App.4th 1533, 1537.) At a victim restitution hearing, a prima facie case for restitution is made when it is based on a victim’s testimony or other claim or statement of the amount of his or her economic loss. (People v. Prosser (2007) 157 Cal.App.4th 682, 690-691 (Prosser); People v. Keichler (2005) 129 Cal.App.4th 1039, 1048.) “Once the victim has [i.e., the prosecution has] made a prima facie showing of his or her loss, the burden shifts to the defendant to demonstrate that the amount of the loss is other than that claimed by the victim. [Citations.]” (Prosser, supra, 157 Cal.App.4th at p. 691.)
“The standard of review of a restitution order is abuse of discretion. ‘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.’” [Citations.]” (In re Johnny M. (2002) 100 Cal.App.4th 1128, 1132 (Johnny M.).) “In reviewing the sufficiency of the evidence [to support a factual finding], the ‘“power of the appellate court begins and ends with a determination as to whether there is any substantial evidence, contradicted or uncontradicted,” to support the trial court’s findings.’ [Citations.] Further, the standard of proof at a restitution hearing is by a preponderance of the evidence, not proof beyond a reasonable doubt. [Citation.] ‘If the circumstances reasonably justify the [trial court’s] findings,’ the judgment may not be overturned when the circumstances might also reasonably support a contrary finding. [Citation.] We do not reweigh or reinterpret the evidence; rather, we determine whether there is sufficient evidence to support the inference drawn by the trier of fact. [Citations.]” (People v. Baker (2005) 126 Cal.App.4th 463, 468-469.) “[T]he court’s discretion in setting the amount of restitution is broad, and it may use any rational method of fixing the amount of restitution as long as it is reasonably calculated to make the victim whole. [Citations.]” (Id. at p. 470.) “There is no requirement the restitution order be limited to the exact amount of the loss in which the defendant is actually found culpable, nor is there any requirement the order reflect the amount of damages that might be recoverable in a civil action. [Citation.]” (People v. Carbajal (1995) 10 Cal.4th 1114, 1121 (Carbajal).)
“Victims are entitled to an amount of restitution so as to make them whole but not more than their actual losses arising out of the defendant’s criminal conduct. [Citation.] One object of restitution under section 1202.4 is to ‘restore the economic status quo’ by returning to the victim “‘funds in which he or she has an ownership interest’” following a criminal conviction. [Citation.] However, ‘a restitution order “is not . . . intended to provide the victim with a windfall.” [Citation.]” (Nichols, supra,
8 Cal.App.5th at p. 342.)
II. Did Bishay’s Theft of the Bank’s Loan Proceeds Cause the Bank a Loss?
“When judgment is imposed and the defendant sentenced to a period of incarceration (in prison or jail), the court may order restitution only for losses arising out of the ‘criminal conduct for which the defendant has been convicted.’ [Citations.]” (People v. Walker (2014) 231 Cal.App.4th 1270, 1274; People v. Woods (2008)
161 Cal.App.4th 1045, 1049 [limiting restitution in this context “to those losses arising out of the criminal activity that formed the basis of the conviction”].) California courts have adopted the “substantial factor” test for analyzing causal connections in this regard. Under that standard, a cause in fact is something that is a substantial factor in bringing about the injury. (Mitchell v. Gonzales (1991) 54 Cal.3d 1041, 1052-1053.) “Not only does the substantial factor instruction assist in the resolution of the problem of independent causes . . . but ‘[i]t aids in the disposition . . . of two other types of situations which have proved troublesome. One is that where a similar, but not identical result would have followed without the defendant’s act; the other where one defendant has made a clearly proved but quite insignificant contribution to the result, as where he throws a lighted match into a forest fire. But in the great majority of cases, it produces the same legal conclusion as the but-for test.’ [Citation.]” (Id. at pp. 1052-1053.)
Bishay argues the restitution order as to the Bank cannot be upheld because the Bank failed to show its loss was caused by Bishay’s theft. He argues as if the theft was of the Bank’s secured property interest in the Los Alamitos real property. He maintains the Bank’s subsequent loss when it ultimately resold the foreclosed property was not caused by his theft of the $3.125 million in loan proceeds, but by independent superseding causes.
This argument overlooks just what was stolen in this case. In actuality, the Bank’s loss was the $3.125 million it loaned to Bishay. The real property at issue did not change hands in the original loan transaction; it was still owned by Bishay. The Bank was not investing in Bishay’s grandiose real estate plan. Instead, the Los Alamitos property only served as the Bank’s security interest it could use to recoup its loan proceeds should Bishay stop making payments, as he did. The Bank’s financial interest, and therefore its subsequent loss, was in having its loan paid back in full, with interest, and the real property only served as security.
As we have explained in detail in Bishay’s companion appeal, Bishay falsely represented the true value of the Los Alamitos property and the actual financial history of the property, and through a forged reconveyance deed led the Bank to believe it would be the only lienholder. Bishay was convicted of the theft of the loan proceeds, not of the Bank’s security interest in the underlying real property. Therefore, any decreasing value of that property is not relevant to the question of what was actually stolen from the Bank in the first instance.
Put another way, the Bank’s original loss remains the same, regardless of the change in value of the security interest in the underlying real property. The Bank did not buy a piece of real estate; like all commercial lending banks, it made a loan. Unlike Bishay’s other victim, Messiha, the Bank was not investing in a real property venture. Bishay obtained the Bank’s money using false pretenses, took the money, and never paid back the loan.
Bishay’s claim his theft of the $3.125 million loan proceeds did not cause the Bank to suffer a loss borders on the ludicrous. Bishay’s attempt to leave the Bank holding the proverbial bag, and suffer the consequences of a declining real estate market does nothing to change the fact Bishay took $3.125 million from the bank. Moreover, he used a forged deed and false and incomplete disclosures to obtain that money. Bishay’s argument would have us force a crime victim to suffer the waning value of its collateral security interest in a piece of real property, property it did not own or want to own, while Bishay still keeps the purloined $3.125 million for his personal use.
It is true the Bank must mitigate its damages, and any restitution award must be reduced by the amount the Bank was reasonably able to elsewhere obtain to offset its losses. Here, the trial court considered that mitigation and calculated the adjusted amount as $1.2 million, thereby avoiding any “windfall” to the Bank.
Bishay’s argument to the effect the worsening real estate market was the real cause of the Bank’s loss is similarly unavailing. The worsening real estate market did not change the amount of money Bishay stole from the Bank. In fact, the market only made it more difficult for the Bank to mitigate its damages, and thereby caused Bishay’s adjusted restitution amount to increase. The crashing real estate market did not change the fact the Bank gave $3.125 million to Bishay under false pretenses. To suggest Bishay should somehow himself receive a “windfall,” caused by the plummeting value of the underlying real property, is to suggest the thief should be rewarded for stealing the Bank’s money just before the onset of a major recession. Moreover, as we noted above, “[t]here is no requirement the restitution order be limited to the exact amount of the loss in which the defendant is actually found culpable, nor is there any requirement the order reflect the amount of damages that might be recoverable in a civil action. [Citation.]” (Carbajal, supra, 10 Cal.4th at p. 1121.)
The trial court awarded $1.2 million, rather than the full amount of the Bank’s original loss of $3.125 million, after determining how the Bank had mitigated its losses from the theft through its foreclosure and sale of the Los Alamitos property and its settlement with the title insurer. The trial court’s restitution order was specifically calculated to include only the losses directly attributable to Bishay’s conduct. Once the Bank presented its claim, the burden shifted to Bishay to offer evidence to challenge any of the amounts presented. (People v. Keichler (2005) 129 Cal.App.4th 1039, 1048.) He did not do so. We find substantial evidence to support the trial court’s finding Bishay caused the Bank’s loss, and the amount of restitution it awarded.
III. Messiha’s Losses
A. Is Messiha a “Victim” Under the Restitution Law?
A victim is the object of a crime. (People v. Birkett (1999) 21 Cal.4th 226, 232 (Birkett).) “‘Actual’” or “‘direct’” victims are “the real and immediate objects” of the offense. (Id. at p. 233.) Thus, people or entities are entitled to restitution when a crime was committed against them. (Id. at p. 232.)
As we discuss in Bishay’s companion appeal, Bishay’s two forgery-related crimes involved first forging Messiha’s signature on, and then recording, the forged reconveyance deed extinguishing Messiha’s interest in the Los Alamitos property. Forgery is an offense involving the signing of another’s name to certain types of documents, without consent and with the intent to defraud. (§ 470, subd. (a).) An intent to defraud is an intent to deceive another person so as to cause a loss of money or to damage a legal, financial, or property right. (CALCRIM No. 1905; see also § 8 [“Whenever, by any of the provisions of this code, an intent to defraud is required in order to constitute any offense, it is sufficient if an intent appears to defraud any person, association, or body politic or corporate, whatever”].)
Bishay defrauded two distinct victims with his forgery: Messiha and the Bank. Thus, to extinguish Messiha’s interest in the Los Alamitos property without his authority or knowledge, Bishay forged Messiha’s signature and recorded the forged reconveyance deed. Similarly, to fool the Bank into thinking the property’s title was clear, Bishay produced a recorded but forged reconveyance deed and the Bank opened up their vault to the $3.125 million in loan proceeds.
Despite this rather uncomplicated factual scenario, Bishay still claims Messiha is not really a victim, but instead merely a bad investor. His authority, however, is unhelpful. People v. Moloy (2000) 84 Cal.App.4th 257, involved the question whether insurance companies, which normally are not victims when they have covered an actual victim’s losses, could become direct victims when the crimes involved insurance fraud. They can (id. at p. 261), but that is not germane. Similarly, Bishay’s reference to Birkett is unavailing in this regard because it states the general rule insurance companies cannot receive restitution when they are simply covering the losses of their insureds. (Birkett, supra, 21 Cal.4th at p. 229.) Neither case is relevant here because insurance is not involved in this appeal.
Bishay argues he is being held accountable for crimes for which he was never charged, namely Messiha’s original loss of $957,000 in the unsuccessful Alhambra deal. Not so. Bishay was charged and convicted of causing Messiha to lose the interest Messiha had securing the $1.2 million promissory note Bishay had given him after the Alhambra deal went sour. And it is for the loss of that property interest Messiha is due restitution, not from the Alhambra transaction.
Moreover, this argument glosses over the direct impact Bishay’s forged reconveyance deed crime had on Messiha’s very real interest in the Los Alamitos property. One of the “objects” of Bishay’s forgery crimes is certainly Messiha. By placing Messiha’s forged signature on the reconveyance deed without authorization, and recording it with the county, Bishay used that forgery to extinguish Messiha’s $1.2 million interest in the Los Alamitos property. In other words, Messiha is the direct victim of the forgery and the forged recording crimes.

B. Did Bishay’s Forgery of Messiha’s Signature, and Then Recording the Forged Reconveyance Deed, Cause Messiha to Suffer a Financial Loss?
Bishay maintains his fraudulent extinguishment of Messiha’s interest in the Los Alamitos property through the forged reconveyance deed did not cause Messiha any financial loss. Once more, Bishay tries to turn the table by blaming Messiha for losing his interest in the Los Alamitos property, not because he was criminally defrauded, but because of “bad timing and what turned out to be a bad investment, not Bishay’s offenses.” Messiha, however, had no idea his signature had been forged, nor that through the forgery he had lost all claim to and interest in the Los Alamitos property. In essence, this argument is really a claim Bishay is not guilty of the crimes for which he was convicted, an issue the jury has already rejected in its verdicts, and one we do not review in this appeal.
Bishay maintains “Messiha was in favor of obtaining the bank loan and avoiding foreclosure on the property.” But if that were truly the case, there would have been no need to forge his signature and file a bogus reconveyance deed. Moreover, if the loan proceeds were designed to be used to avoid foreclosure, why were they not so used; and why was the property still foreclosed upon later when Bishay stopped making payments? If Messiha were truly in favor of the Bank loan, he could have authorized the reconveyance himself, although it would have meant knowingly giving up his $1.2 million financial interest in the property, and losing the security backing the promissory note Bishay gave him. If Messiha had willingly reconveyed his interest in the Los Alamitos property, and the loan later went into default, Bishay might have an argument Messiha made a bad investment decision. It seems incongruous, however, to suggest Messiha made a “bad investment decision” by unknowingly being bilked out of his secured interest through a forged signature on a fraudulent reconveyance deed.
We agree Messiha was not a victim of the grand theft crime; only the Bank was. Nonetheless, Messiha was the direct victim of the forgery and false recording crimes. His signature was forged and his financial interest in the real property was unknowingly and fraudulently taken away from him as a direct result of Bishay’s crimes. Bishay’s arguments to the contrary are unavailing. Messiha was victimized by Bishay within the meaning of section 1202.4, and that victimization caused Messiha an economic loss. Messiha was entitled to restitution.
IV. The Trial Court’s Calculation of Restitution
Bishay lastly contests the amounts the trial court awarded in restitution to both victims. Section 1202.4, subdivision (f)(3), provides that to the extent possible, the 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. [Italics added.]” As we noted above, “[v]ictims are entitled to an amount of restitution so as to make them whole but not more than their actual losses arising out of the defendant’s criminal conduct. [Citation.] One object of restitution under section 1202.4 is to “‘restore the economic status quo’” by returning to the victim “‘funds in which he or she has an ownership interest’” following a criminal conviction. [Citation.] However, ‘a restitution order “is not . . . intended to provide the victim with a windfall.’” [Citation.]” (Nichols, supra, 8 Cal.App.5th at p. 342.)
Here, the trial court calculated its restitution orders based on the testimony and documents presented at the restitution hearing. Therefore, a prima facie case for restitution was made, and “the burden shift[ed] to [Bishay] to demonstrate that the amount of the loss is other than that claimed by the victim. [Citations.]” (Prosser, supra, 157 Cal.App.4th at p. 691.) Bishay failed to introduce any evidence to rebut the prosecution’s showing, and did not dispute the amounts at the restitution hearing.
The underlying factual bases for the trial court’s orders were based on straightforward calculations regarding losses shown by clear documentation and adjusted by similarly established offsets. The Bank was awarded restitution in an amount sufficient to return it to the position it was in before Bishay’s theft. Similarly, Messiha was awarded restitution sufficient to restore him to the position he was in when Bishay defrauded him. Bishay fraudulently removed Messiha’s deed of trust, let the Bank’s loan go into default, and thereby effectively made Messiha’s promissory note worthless. The purpose of restitution is to fully reimburse the victims for every determined economic loss incurred as the result of a defendant’s criminal conduct. The trial court’s calculation of restitution in this matter did so.
Our “standard of review of a restitution order is abuse of discretion. ‘A victim’s restitution right is to be broadly and liberally construed.’ [Citation.] “‘Where 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.”’ [Citations.]” (Johnny M., supra, 100 Cal.App.4th at p. 1132.) Substantial evidence supports the trial court’s exercise of its discretion in ordering restitution amounts necessary to reimburse the victims for losses caused by Bishay’s conduct.
DISPOSITION
The trial court’s postjudgment restitution orders are affirmed.



O’LEARY, P. J.

WE CONCUR:



MOORE, J.



IKOLA, J.