Filed 11/21/18 P. v. Hanson CA4/3

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FOURTH APPELLATE DISTRICT

DIVISION THREE

Appeal from a judgment of the Superior Court of Orange County, Gary S. Paer, Judge. Reversed and remanded.

Leonard J. Klaif, 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, Steve Oetting and Anthony Da Silva, Deputy Attorneys General, for Plaintiff and Respondent.

Charles Jayson Hanson, a jeweler in Newport Beach, gave his clients jewelry with fake or lower quality stones than they had agreed to purchase. A jury convicted Hanson of first degree residential burglary, multiple counts of grand theft, special allegations, and sentencing enhancements. The court sentenced him to six years and four months in prison. Hanson’s appeal challenges the sufficiency of the evidence supporting the burglary conviction and the jury’s special allegation finding he committed theft of an amount exceeding $100,000. We conclude his arguments have merit, and both the burglary conviction and special allegation must be reversed and the case remanded for resentencing.

FACTS

In our summary of the facts, we will focus on the information relevant to the two distinct issues raised on appeal. Hanson does not challenge the sufficiency of the evidence supporting the grand theft convictions relating to counts 2, 5, 6, and 7. Therefore, we will only provide a brief summary of the underlying facts to the extent they relate to the burglary conviction and the special allegation concerning the amount stolen.

We begin with count 2, because this conviction was based on the same underlying facts supporting count 1 (the first degree burglary conviction). David Sanner and his wife Debra (the Sanners)[1] were neighbors and friends with Hanson. Hanson told David he was a jeweler who did business in the Los Angeles jewelry district and through a retail store in Orange County.

David purchased Debra’s ring in 2008 for $38,300. Soon thereafter, the couple exchanged the ring for a different one, having an approximately four carat center stone, paying an additional $5,000 to the same jeweler (who was not Hanson). The ring appraised for $88,269. In September 2013, the Sanners decided to purchase a more expensive ring from Hanson.

Debra’s ring had a simple gold band and she was interested in “creating a setting” on the band with diamonds that matched in color to a larger center stone. Hanson brought diamonds to the Sanners’ residence, where they looked at the gems through a magnifying glass. Debra wanted to “collaborate” with Hanson in designing the setting for her new ring, and Hanson educated her about the stones and the different cuts of diamonds. One day, Hanson showed her three large diamond stones. She selected a 5.87-carat diamond having a cushion cut for the ring. The parties agreed on the following terms of payment: Debra would give Hanson her ring plus an additional $16,000.

At the end of September 2013, Hanson took Debra’s ring and a check for $6,000. He then asked a jeweler in Los Angeles to set a worthless cubic zirconia center stone into a platinum band already containing small clusters of diamonds all the way around plus two channel diamonds set on either side of the center stone. When the jeweler questioned the reason for putting a worthless stone in an expensive band, Hanson assured him it was what the customer wanted. The jeweler estimated Hanson spent $2,500 making a ring having a retail value of $7,500 because the center stone was cubic zirconia.

Debra asked to have the new ring by December 6, 2013, because she wanted to wear it to a charity event. Although the ring was not delivered on time, David gave Hanson a final payment of $10,000 on December 6. At the end of December, Hanson went to the Sanners’ residence to give Debra her “new” ring. He provided an invoice, containing an “EGL certificate number” that indicated it was a platinum diamond ring with a custom four-prong setting featuring a radiant cut diamond “5.87 carat total weight with H color and VS2 clarity.”

In January 2014, Debra showed her new ring to a jeweler in Newport Beach (Royal Jewelers). The jeweler could see the center stone was not a diamond, and knew immediately that it was not the same stone listed in Hanson’s invoice. The jeweler asked his colleague to test the ring. Using a machine, they tested the stone four separate times, and the results confirmed the center stone was not a diamond. The jeweler and Debra looked at the stone though a magnifying glass and saw the center stone was very clear and lacked inclusions that would be present in a diamond. The jeweler concluded the center stone was cubic zirconia and he valued the ring to be worth between $4,000 and $5,000.

Thereafter, David asked Hanson to meet him at the Royal Jewelers store. The following evening, Hanson entered the store and stated he did not believe the center stone was cubic zirconia. After examining and testing the stone, Hanson admitted the stone was not a diamond. David recalled Hanson did not look shocked. The parties left the store and David asked Hanson, “‘How could this happen?’” Hanson would not answer the question but stated, “‘I won’t leave you hanging.’” David threatened he would file a police report if Hanson did not make things right by the following day.

Count 5 was based on evidence Kenneth Lopour asked Hanson to create a new ring that incorporated an existing .875-carat family heirloom diamond (worth $6,100) and a gold engagement ring having two more diamond stones (appraised in 2008 for $7,600). Hanson gave Lopour a ring in which he replaced the large center stone with cubic zirconia. Lopour did not learn about the theft until he had the ring cleaned several years later. In 2014, the ring appraised for $3,268, which was the value of the mounting and two remaining smaller side diamonds. The cubic zirconia center stone had no value.

Count 6 concerned the wedding ring Duane Gilmore purchased for his wife. He originally purchased a one-carat diamond solitaire wedding ring with a white gold band for $7,100. He brought the ring to Hanson’s store because he wanted to surprise his wife by changing it to a pillow style ring with diamonds encrusted on the band but keeping the original diamond as the center stone. Gilmore agreed to pay $1,200 for the pillow ring and Hanson gave him a $250 credit for the white gold wedding band. Gilmore finished paying for the ring in July 2014. In May 2016, Gilmore and his wife took the ring to a different jewelry store to be cleaned and they learned the center diamond stone was Moissanite, a stone that looked like a diamond. The jeweler estimated the ring was worth only $1,500. Gilmore attempted to contact Hanson, but his number was disconnected and his Orange County store had been vacated.

Count 7 was based on evidence William Barton purchased a wedding anniversary ring for his wife from Hanson at his Orange County storefront. After looking at several diamonds, Barton and his daughter selected a diamond and arranged for it to be set on a platinum band. He paid a total of $48,918.50 for the ring. When Barton picked up the ring, Hanson provided an EGL certificate and appraisal. Approximately one year later, Barton’s wife took the anniversary ring and her engagement ring to Hanson and asked that he add two side diamonds to the anniversary ring. Hanson offered to give back money in the deal because the engagement ring was worth more than the two side diamonds. Hanson brought the newly designed ring to the Bartons’ residence. Two years later, Barton’s wife asked a different jeweler about the center stone of her anniversary ring. The jeweler determined the center stone was Moissanite and not a diamond, valuing the ring at $5,900.

The jury convicted Hanson on count 8 of the lesser offense of misdemeanor theft. That crime related to an incident where Hanson agreed to reset Anya Delancelotti’s $1,549.50 diamond stud earrings. Delancelotti paid Hanson approximately $200 for the resetting, and later she learned the diamonds had been replaced with Moissanite stones.

DISCUSSION

I. First Degree Residential Burglary

Hanson contends the evidence was insufficient to support the burglary conviction because the theft was completed long before Hanson entered the Sanners’ home with a “fake” cubic zirconia ring. We agree.

“The crime of burglary consists of an act—unlawful entry—accompanied by the ‘intent to commit grand or petit larceny or any felony.’ ([Pen. Code,] § 459.) One may be liable for burglary upon entry with the requisite intent to commit a felony or a theft (whether felony or misdemeanor), regardless of whether the felony or theft committed is different from that contemplated at the time of entry, or whether any felony or theft actually is committed. [Citations.]” (People v. Montoya (1994) 7 Cal.4th 1027, 1041-1042, fn. omitted.) [2] Burglary is the greater offense of theft. “The greater punishment for burglary of a residence reflects the Legislature’s recognition of ‘the dangers to personal safety created by the usual burglary situation—the danger that the intruder will harm the occupants in attempting to perpetrate the intended crime or to escape and the danger that the occupants will in anger or panic react violently to the invasion, thereby inviting more violence.’ [Citation.]” (People v. Parker (1985) 175 Cal.App.3d 818, 823.)

“‘To determine whether sufficient evidence supports a jury verdict, a reviewing court reviews the entire record in the light most favorable to the judgment to determine whether it discloses evidence that is reasonable, credible, and of solid value such that a reasonable jury could find the defendant guilty beyond a reasonable doubt.’” [Citation.] This standard of review applies when the evidence is largely circumstantial and to review of special circumstance findings. [Citation.]” (People v. Johnson (2015) 60 Cal.4th 966, 988.)

For the burglary count, the amended felony complaint charged Hanson with entering the Sanners’ residence on December 31, 2013, with the intent to commit larceny and grand theft. He argues the theft was completed well before that date; he formed the intent to steal after taking the Sanners’ money and property, which was long before he created a fake ring to avoid detection. We agree.

In this case, Hanson’s crime of deception was carried out in several stages. In September 2013, the parties agreed to the purchase terms for a new ring and selected a new center stone. The Sanners initially gave Hanson $6,000 and Debra’s engagement ring (worth over $88,000) as a partial payment. They later finished paying for the ring, giving Hanson an additional $10,000. In the meantime, Hanson paid a jeweler in Los Angeles to put a fake worthless diamond-looking stone on a platinum band having several smaller diamonds, which he delivered to the Sanners on December 31, 2013. The Sanners’ were led to believe this ring contained the 5.87 carat diamond center stone they selected several months earlier, but it was in fact a cubic zirconia set in a ring worth approximately $5,000. The cover up continued when Hanson met the Sanners’ at Royal Jewelers and acknowledged the center stone was not a diamond, but he falsely promised to not leave them “hanging.” He did not return the traded-in jewelry or the Sanners’ $16,000.

These facts support the conclusion Hanson formed the intent to steal from the Sanners sometime in the early stages of his interactions with them. Once he had collected their property and money, he could have “gone missing” with the loot and the grand theft would have been completed. That he entered their home having a plan to cover up his prior deception by giving them a fake ring is not evidence supporting a burglary conviction. As mentioned, burglary requires evidence Hanson entered the residence with the intent to commit a theft. There is nothing to suggest Hanson entered the Sanners’ home on December 31, 2013, with the intent to steal additional valuables. Hanson simply delivered a “fake ring” to cover up a prior theft.

We are not persuaded by the Attorney General’s argument the burglary conviction was supported by evidence Hanson entered the Sanners’ home with the specific intent to commit “theft by trick.” He reasons, without providing supporting case authority, the theft was not committed when Hanson “asported” the Sanners’ valuable ring because Hanson “created a bailment when he took possession of the ring.” The Attorney General concludes, “There was no theft until [Hanson] failed to return the ring as agreed and instead tricked the Sanners into believing that he had given them what they bargained for.” He discusses case authority describing the elements of theft by false pretenses, which has no “asportation” requirement. (People v. Shannon (1998) 66 Cal.App.4th 649, 654 [distinction between larceny by trick and theft by false pretenses is that latter crime “does not require that the defendant take the property; it requires that the defendant use false pretenses to induce the other to give the property to him”].)

This argument fails because the record contains no evidence of a bailment relationship between Hanson and the Sanners. This theory was neither alleged nor established at trial. Similarly, there was no evidence to support the Attorney General’s assertion Hanson agreed to return the Sanners’ ring. To the contrary, the facts established a sale transaction, not a bailment, because the Sanners intended to purchase a new ring with a different band, a specially designed setting, and a brand new large center diamond. As part of this sales transaction, the Sanners agreed to pay $16,000 plus the trade-in value of their engagement ring. There is no evidence indicating the Sanners believed Hanson would return their old ring. “A transaction is a sale, not a bailment, and title to the property is changed when the receiving party is under no obligation to return the property or to account for it. [Citation.]” (H. S. Crocker Co. v. McFaddin (1957) 148 Cal.App.2d 639, 644.)

We turn next to the Attorney General’s assertion Hanson entered the home with the intent to commit theft by false pretenses because he brought with him a fake ring. He asserts the jury could infer he entered the home with the requisite criminal intent, regardless of whether a theft was actually committed. The Attorney General adds Hanson’s intent to trick the Sanners “continued” when he later met with the Sanners and took back the fake ring. We notice the Attorney General in this and other arguments inexplicably refers to larceny by trick and theft by false pretenses as being the same crime. Not so. Both are crimes of deception, and although these crimes “‘are much alike, they are aimed at different criminal acquisitive techniques.’” (People v. Traster (2003) 111 Cal.App.4th 1377, 1387.) “‘Larceny by trick and device is the appropriation of property, the possession of which was fraudulently acquired; obtaining property by false pretenses is the fraudulent or deceitful acquisition of both title and possession. [Citations.] In this state, these two offenses, with other larcenous crimes, have been consolidated into the single crime of theft (§ 484), but their elements have not been changed thereby. [Citations.]’” (Id. at p. 1387, fn. omitted.) Another distinction between these two crimes is that “[t]heft by false pretenses does not require that the defendant take the property; it requires that the defendant use false pretenses to induce the other to give the property to him. [Citation.]” (People v. Shannon (1998) 66 Cal.App.4th 649, 654.) The crime of larceny “requires asportation or carrying away, in addition to the taking. [Citations omitted.]’ [Citation.]” (People v. Khoury (1980) 108 Cal.App.3d Supp. 1, 4.)

In any event, the evidence does not support the conclusion larceny by trick or theft by false pretenses took place at the Sanners’ residence on December 31, 2013. Both of those crimes require that a defendant enter the residence with the intent to fraudulently acquire the title or possession (or both) of the victim’s property. Here, Hanson entered the home having already obtained possession of the Sanners’ valuable property and cash. That he brought to them a different item of property, having little value, was simply a protective measure taken to thwart detection. Having gained possession of the ring and cash, no further action was necessary to complete the theft.

II. Special Allegation

In addition to being charged with six counts of grand theft and one count of petty theft, it was further alleged Hanson committed a theft of an amount exceeding $100,000 as described in section 1203.045. That provision creates a statutory presumption prohibiting probation “except in unusual cases where the interests of justice would best be served” “by such a disposition.” (§ 1203.045, subds. (a) & (c).)

It is undisputed none of the individual thefts, standing alone, exceeded $100,000. It was the prosecution’s theory Hanson’s criminal misconduct resulted in a total loss of over $100,000. Hanson asserts this contradicts the language of section 1203.045, subdivision (a), which indicates the $100,000 loss must relate to a single theft. We agree.

Section 1203.045 provides in relevant part the following: “[P]robation shall not be granted to any person convicted of a crime of theft of an amount exceeding one hundred thousand dollars ($100.000).” (§ 1203.045, subd. (a), italics added.) Similarly, subdivision (b) of section 1203.045, provides, “The fact that the theft was of an amount exceeding . . . [$100,000] shall be alleged in the accusatory pleadings . . . .” (Italics added.)

There are only two published cases, addressing the issue of whether the defendant satisfactorily overcame the presumptive ineligibility for probation. People v. Lai (2006) 138 Cal.App.4th 1227, concerned defendants convicted of conspiracy to commit welfare fraud, and in People v. Superior Court (Dorsey) (1996) 50 Cal.App.4th 1216, the defendant was a sheriff who misappropriated and embezzled public funds in excess of $100,000. The relevance of these cases is limited because neither concerned multiple victims and both focused on determining whether the court abused its discretion in granting or denying probation. Neither case addressed whether the statute applies to a defendant convicted of many thefts (individually amounting to less than $100,000), involving multiple victims, for a total crime spree exceeding $100,000.

“In construing a statute, our fundamental task is to ascertain the Legislature’s intent so as to effectuate the purpose of the statute. [Citation.] We begin with the language of the statute, giving the words their usual and ordinary meaning. [Citation.] The language must be construed ‘in the context of the statute as a whole and the overall statutory scheme, and we give “significance to every word, phrase, sentence, and part of an act in pursuance of the legislative purpose.”’ [Citation.] In other words, ‘“we do not construe statutes in isolation, but rather read every statute ‘with reference to the entire scheme of law of which it is part so that the whole may be harmonized and retain effectiveness.’ [Citation.]”’ [Citation.] If the statutory terms are ambiguous, we may examine extrinsic sources, including the ostensible objects to be achieved and the legislative history. [Citation.] In such circumstances, we choose the construction that comports most closely with the Legislature’s apparent intent, endeavoring to promote rather than defeat the statute’s general purpose, and avoiding a construction that would lead to absurd consequences. [Citation.]” (Smith v. Superior Court (2006) 39 Cal.4th 77, 83.)[3]

At issue here is the meaning of the first sentence of section 1203.045, subdivision (a), making probation unavailable to a person “convicted of a crime of theft of an amount exceeding” $100,000. We agree with Hanson that the use of the singular “a” implies the Legislature decided persons capable of such a grand scale heist should not be allowed to avoid imprisonment. Probation, an act of leniency, is intended to foster rehabilitation and requires an agreement to certain conditions to protect public safety. (People v. Carbajal (1995) 10 Cal.4th 1114, 1120.) “Probation is generally reserved for convicted criminals whose conditional release into society poses minimal risk to public safety . . . .” (Ibid.) This interpretation is supported by section 1203.045, subdivision (b), requiring “the theft” be alleged in the pleadings. Again, use of the singular “the theft” as opposed to “the theft(s),” or other language acknowledging the potential application to multiple thefts, implies the Legislature intended to restrict probation only when a particular crime of theft was for more than the required amount.

Any lingering doubt regarding the proper interpretation of section 1203.045 is quickly resolved by a review of its legislative history. The legislative intent in enacting the statute was “to make clear to trial judges that even though these crimes are considered to be non-violent, large-scale white collar criminals must be treated seriously and should be sent to State Prison.” (Assem. Byron Sher, sponsor of Assem. Bill No. 592 (1983-1984 Reg. Sess.) letter to Governor Deukmejian, July 12, 1983 [urging Governor to sign his bill].)[4]

An enrolled bill report on Assembly Bill No. 592 (AB 592), prepared by the “Youth and Adult Correctional Agency” and the Department of Corrections, explained the history and sponsorship of the bill. “Source of the bill is the California District Attorneys Association. The sponsor believes that with the current emphasis on violent crimes, white collar criminals are not being given appropriate attention.”[5] (Youth and Adult Correctional Agency, Enrolled Bill Rep. on Assem. Bill No. 592 (1983-1984 Reg. Sess.) July 14, 1983, p. 1.) The report explained probation was currently prohibited for several different violent crimes, crimes involving great bodily injury, vulnerable victims, etc. (Ibid.) “It appears that the probation prohibition provisions would apply to any kind of theft . . . . In addition, the $100,000 amount would apply to a single crime of theft. In other words, probation would still be a punishment option for any person who is convicted of two or more counts of theft totaling more than $100,000.” (Ibid., italics added.) The report stated the fiscal impact is uncertain due to the limited data, but “it is anticipated that the impact on the prison system would be negligible, if any[]” because very few theft cases “resulting in probation are thefts exceeding $100,000.” (Id. at p. 2.)

The legislative history of AB 592 contains other reports repeating the same clear legislative intent. “The purpose of this bill is to provide guidance to trial courts in sentencing serious ‘white collar’ criminals. Prosecutors contend that many judges do not believe theft crimes should be punished by imprisonment. This bill constitutes a legislative declaration that, notwithstanding the current emphasis on violent crimes, serious property crimes also deserve serious punishment.” (Assem. Com. on Crim. Law and Public Safety, Analysis of Assem. Bill No. 592 (1983-1984 Reg. Sess.) April 6, 1983, p. 1.) Another committee wrote, “This bill would establish a presumption against probation in theft cases where the property stolen was valued at more than $100,000. The purpose of the bill is to increase the number of prison terms served by convicted white collar criminals.” (Sen. Com. on Judiciary, Analysis of Assem. Bill No. 592 (1983-1984 Reg. Sess.) pp. 1-2.)

In summary, the legislative history shows the statute was intended to incarcerate white collar criminals committing a single crime of theft exceeding $100,000. In addition to the report, stating the Legislature intended the statute to apply to a single crime of theft, the repeated reference to “white collar crime” is another reason we conclude the statute was not designed to encompass Hanson’s criminal conduct. “Although the concept of white collar crime is amorphous, the term generally refers to a nonviolent crime involving theft . . . often in a commercial, insurance, professional, or corporate context. . . . White collar criminals are often those with business or professional backgrounds and white collar offenses often occur in business and professional contexts.” (1 Witkin & Epstein, Cal. Criminal Law (4th ed. 2012) Introduction to Crimes, § 142, pp. 232-233.) Unlike most business professionals, jewelers need not be licensed, nor do they require degrees or diplomas to sell their products. Jewelry making is a trade, or perhaps falls into the category of an artistic enterprise. Regardless, we conclude a tradesman’s deception in misrepresenting the quality and value of his craftsmanship has not committed the type of “white collar crime” contemplated by the Legislature in drafting section 1203.045. The Legislature clearly desired trial judges to impose harsher sentences for the financial havoc caused by nonviolent but devious white collar executives. The plain wording of the statute, and its legislative history, support the conclusion section 1203.045 applies to defendants convicted of committing a single theft exceeding $100,000, and cannot be applied in cases involving crooks swindling multiple victims (which may over time culminate in a sum exceeding $100,000).

DISPOSITION

The judgment is reversed. The burglary conviction (count 1) and the finding on the special allegation relating to section 1203.045 are vacated. In in all other respects, the judgment is affirmed. The matter is remanded for a sentencing hearing.

O’LEARY, P. J.

WE CONCUR:

IKOLA, J.

GOETHALS, J.