Filed 10/25/17 P. v. Superior Court (Sahlolbei) CA4/2
Opinion on remand from Supreme Court

NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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 TWO


THE PEOPLE,

Petitioner,

v.

THE SUPERIOR COURT OF
RIVERSIDE COUNTY,

Respondent;

HOSSAIN SAHLOLBEI,

Real Party in Interest.


E062380

(Super.Ct.No. INF1302523)

OPINION


ORIGINAL PROCEEDINGS; petition writ of prohibition/mandate. Michael J. Naughton, Judge. (Retired Judge of the Orange Super. Ct. assigned by the Chief Justice pursuant to art. VI, § 6 of the Cal. Const.) Petition is granted.
Paul E. Zellerbach, Michael A. Hestrin, District Attorneys, and Emily R. Hanks, Deputy District Attorney, for Petitioner.
No appearance for Respondent.
Brown White & Newhouse, Brown White & Osborn and Kenneth P. White, for Real Party in Interest.
As relevant to this petition, defendant and real party in interest Hossain Sahlolbei (Dr. Sahlolbei) was charged with violating Government Code section 1090, which generally prohibits acts constituting a conflict of interest on the part of ‘[m]embers of the Legislature, state, county, district, judicial district, and city officers or employees . . . .” The trial court followed People v. Christiansen (2013) 216 Cal.App.4th 1181 (Christiansen), which held that independent contractors cannot be held criminally liable under section 1090, and dismissed the charge (one of two pending against Dr. Sahlolbei). The People sought review, and this court affirmed the trial court in a split decision, the majority also relying on Christiansen. The California Supreme Court reversed and remanded for proceedings consistent with its opinion, disapproving Christiansen to the extent it is inconsistent with a finding that an independent contractor can be held criminally liable under section 1090. (See People v. Superior Court (Sahlolbei) (2017) 3 Cal.5th 230 (Sahlolbei).)
The Supreme Court unequivocally left no question whether Dr. Sahlolbei, as an independent contractor, is subject to liability under section 1090. The Supreme Court stated, “As explained, section 1090, subdivision (a) prohibits officials from being ‘financially interested in any contract made by them in their official capacity.’ Officials make contracts in their official capacities within the meaning of section 1090 if their positions afford them ‘the opportunity to . . . influence execution [of the contracts] directly or indirectly to promote [their] personal interests’ and they exploit those opportunities. (Sobel,[ ] supra, 40 Cal.App.3d at p. 1052.) And officials cannot hide behind ‘[l]abels and titles’ (Wong,[ ] supra, 186 Cal.App.4th at p. 1451) or ‘ “change hats” ’ (Campagna,[ ] supra, 42 Cal.App.4th at p. 542) to obscure the substance of their actions. Similarly, the fact that an official’s written duties do not extend to contracting is irrelevant if the official was actually involved in the making of any public contracts and, in doing so, exploited an official position. (See Sobel, at p. 1052, [rejecting the contention that § 1090 ‘only applies to those persons who actually have the legal authority to execute contracts, and do so’]; [id.] at p. 1053 [‘[T]he evidence was ample to support the conclusion that the defendant had the opportunity, whatever his job classification, to direct a steady flow of [public money] to a concern in which he was interested, personally, and that he did so.’].)” (Sahlolbei, supra, 3 Cal.5th at pp. 245-246.) The court also disposed of any question whether Dr. Sahlolbei acted in a private, not official, capacity. (Id. at p. 246) It concluded that the evidence was sufficient for Dr. Sahlolbei to be held to account for making a contract between an outside physician and the public entity hospital for which he was both an independent contractor and a highly influential member of that hospital’s medical executive board, with an advisory capacity over medical staff employment, where the contract directly benefitted Dr. Sahlolbei monetarily in violation of section 1090.
The remaining issue to be determined on remand arises with Dr. Sahlolbei’s argument that because his own contract with the hospital had lapsed between April and December 2009, he was not even an independent contractor—and thus had no official position whatsoever—when the contract between the hospital and the outside physician, directly benefitting Dr. Sahlolbei, was signed in October 2009. The Supreme Court did not address this contention, but directed that, “On remand, the Court of Appeal may determine whether ‘a reasonable person could harbor a “strong suspicion” ’ that Sahlolbei was, in fact, affiliated with the Hospital during the making of Barth’s contracts. [Citation.] If so, the section 1090 charge against Sahlolbei should be reinstated. [Citation.]” (Sahlolbei, supra, 3 Cal.5th at pp. 246-247.)
I. STATEMENT OF FACTS
The operative facts relating to the alleged offense are not in dispute for the purposes of this petition. Palo Verde Hospital (PVH) is a “district hospital” which qualifies as a public entity. At all relevant times, Dr. Sahlolbei served as codirector of surgical services with PVH pursuant to a contract that specifically described him as an independent contractor. He also served on the medical executive committee (MEC) either as chief of staff or vice chief of staff and had considerable influence over the hospital board and its decisions with respect to hiring and credentialing physicians.
Dr. Sahlolbei solicited an outside physician, Dr. Brad Barth, to provide contract services to PVH. Dr. Sahlolbei agreed that the physician would be paid X dollars per month for his services, and then negotiated an agreement with PVH’s board of directors to pay the physician X plus several thousand dollars per month. Dr. Sahlolbei retained the difference. These general allegations form the basis for the charge under section 1090.
The trial court granted Dr. Sahlolbei’s motion to dismiss the charge pursuant to Penal Code section 995, relying on Christiansen, supra, 216 Cal.App.4th 1181 and in our prior review, we denied the People’s petition for writ of prohibition/mandate. On remand, we now consider the issue as framed by the Supreme Court, ante.
II. DISCUSSION
A. Standard of Review
“ ‘In determining if charges in an information can withstand a motion under [Penal Code] section 995, neither the superior court nor the appellate court may reweigh the evidence or determine the credibility of the witnesses. [Citations.] Ordinarily, if there is some evidence in support of the information, the reviewing court will not inquire into its sufficiency. [Citations.] Thus, an indictment or information should be set aside only when there is a total absence of evidence to support a necessary element of the offense charged. [Citations.] [¶] “[A]lthough there must be some showing as to the existence of each element of the charged crime [citation] such a showing may be made by means of circumstantial evidence supportive of reasonable inferences on the part of the magistrate.” [Citation.] “Every legitimate inference that may be drawn from the evidence must be drawn in favor of the information.” [Citations.] Thus, the ultimate test is that “ ‘ “an information will not be set aside or prosecution thereon prohibited if there is some rational ground for assuming the possibility that an offense has been committed and the accused is guilty of it.” ’ ” [Citation.] [¶] We review the evidence in support of the information to determine whether as a matter of law it is sufficient, not whether the trial court’s ruling was reasonable. [Citations.]’ [Citation.]” (Salazar v. Superior Court (2000) 83 Cal.App.4th 840, 842.)
As to an alleged conflict of interest under section 1090, “the only question we may ask is whether a reasonable person could harbor a ‘strong suspicion’ of a connection between the benefit” accruing to the accused and his conduct leading to the contract in which he is personally interested. (Lexin v. Superior Court (2010) 47 Cal.4th 1050, 1077 (Lexin).)
B. Analysis
At bottom, Dr. Sahlolbei’s argument is that the operative contract between Dr. Barth and PVH was “made” during the period between April and December 2009, when he was not under contract with PVH. Even more narrowly, Dr. Sahlolbei contends that the contract was “made” at the time it was signed on October 8, 2009. In that, he ignores pertinent case law and his relationship with PVH during that time.
Under section 1090, the “making” of a contract is not limited to the mere “signing” of the papers. As our Supreme Court has observed, with regard to section 1090, “we are not here concerned with the technical terms and rules applicable to the making of contracts.” (Stigall v. City of Taft (1962) 58 Cal.2d 565, 569 (Stigall); see People v. Honig (1996) 48 Cal.App.4th 289, 314-315.) Instead, under section 1090, “the negotiations, discussions, reasoning, planning and give and take which goes beforehand in the making of the decision to commit oneself must all be deemed to be a part of the making of an agreement in the broad sense.” (Stigall, at p. 569.) In fact, if a public official was involved in such negotiations, discussions, reasoning, planning and give and take leading up to the execution of a contract in which that public official had a conflict of interest, the official could be held liable under section 1090 even if the individual was no longer in an official public capacity at the time the contract was signed. (Stigall, at pp. 570-571 [councilman and plumbing business owner who participated in “the planning, preliminary discussions, compromises, drawing of plans and specifications and solicitation of bids” for a city contract awarded to his private business implicates section 1090 even though he resigned from his official position as a councilman prior to execution of the contract]; Wong, supra, 186 Cal.App.4th at p. 1450 [“[A] public official can violate Government Code section 1090 even though he did not participate in the contract’s execution. [Citation.]”].)
Here, there is abundant evidence that Dr. Sahlolbei, in the role of a public official, carried out a series of actions directly related to bringing Dr. Barth on as an anesthesiologist with a contract intended to benefit Dr. Sahlolbei personally, despite his apparent gap in his own contract with PVH. Furthermore, even during that gap between April and December 2009, he was a public official for PVH, as a member of the MEC, advising with recommendations to the board of directors on all medical employment matters.
During the preliminary hearing on July 21, 2014, Dr. Barth testified that he had worked at PVH twice; first, between 2006-2007, and then from 2009-2013. Both times, he had been recruited by Dr. Sahlolbei, and both times, Dr. Sahlolbei represented that he personally had the contract for providing anesthesia services to PVH. In fact, Dr. Barth also testified that after he left PVH in 2007, PVH contacted him with a contract to return, for consideration. That was in late 2007 or 2008. Dr. Sahlolbei had alerted Dr. Barth that PVH would do so. At Dr. Sahlolbei’s request, Dr. Barth forwarded the proposed contract to him for review and for Dr. Sahlolbei’s thoughts on the proposal. They discussed it. Dr. Sahlolbei told Dr. Barth that he had been talking to PVH and he wanted Dr. Barth to cooperate; in other words, Dr. Sahlolbei wanted Dr. Barth to return. All this occurred prior to April 2009, when Dr. Sahlolbei’s contract with PVH allegedly expired. Eventually, in October 2009, Dr. Barth did so and initially entered into a contract with Dr. Sahlolbei similar to the one in 2006. The only difference between the two periods was the name of Dr. Sahlolbei’s company that entered the contract with Dr. Barth (in 2006, Palo Verde Medical Group LLC; in 2009, Pars Surgery Inc.).
In each instance, Dr. Barth was promised a certain salary and relocating fees; also in each instance, Dr. Sahlolbei’s contract with PVH assessed a higher salary and relocating fee, and the excess was retained by Dr. Sahlolbei. Even when Dr. Barth’s contract was modified to be directly with PVH, under a side agreement with Dr. Sahlolbei, representing that he was the contracting middleman, Dr. Barth was required to deposit PVH’s direct payments (in the amount of $24,000 every two weeks) into a Pars Surgery account, after which Dr. Sahlolbei would issue him a check (in the amount of $16,800 per two-week period), retaining the balance. Dr. Barth also testified about Dr. Sahlolbei’s position on the MEC, the entire time Dr. Barth ever worked at PVH. Dr. Sahlolbei was either past chief of staff, vice chief, or chief of staff of the MEC. Dr. Barth testified that, in his MEC position, Dr. Sahlolbei “personally basically controlled everything,” including the results of elections. Dr. Sahlolbei’s influence over the MEC was effectuated by intimidation and reprisals. In that light, the MEC made all employment recommendations for hiring, discipline and firing of physicians and medical staff, which the board of directors routinely approved. In other words, as a senior member of the MEC, Dr. Sahlolbei was an integral and influential participant in major PVH decisions, including employment decisions, throughout the entire recruitment of Dr. Barth from 2006 forward, including in 2007 or 2008, while Dr. Sahlolbei was still under contract, and negotiated terms for Dr. Barth’s return, eventually leading to his return in 2009. Dr. Sahlolbei argues that the discussions he had with Dr. Barth in 2007 and 2008 are irrelevant to the 2009 contract. But, it is part of a longstanding practice in his role as a public official. (Stigall, supra, 58 Cal.2d at pp. 570-571.) The allegation that Dr. Sahlolbei was not under a formal contract himself with PVH between April and December 2009 does not mean that he was not affiliated with PVH for the purpose of making Dr. Barth’s contract under the broad perspective of section 1090. (Ibid.)
Dr. Sahlolbei nonetheless reprises that “the People did not even prove that [he] was an independent contractor when the acts in question occurred.” But, “proof” is unnecessary at a preliminary hearing, the operative setting for this analysis. “At this stage of the proceedings, however, the only question we may ask is whether a reasonable person could harbor a ‘strong suspicion’ ” (Lexin, supra, 47 Cal.4th at p. 1077) that Dr. Sahlolbei was affiliated with PVH during the making of Barth’s contracts. On the evidence described ante and more, such a “strong suspicion” abundantly exists to vacate the superior court’s order pursuant to Penal Code section 995 setting aside count 1 and to reinstate the count 1 charge under section 1090.
Moreover, in California, “ ‘A worker is an independent contractor when he or she follows the employer’s desires only in the result of the work, and not the means by which it is achieved. (Varisco v. Gateway Science & Engineering, Inc. (2008) 166 Cal.App.4th 1099, 1103 [Varisco].)’ ” (Jackson v. AEG Live, LLC (2015) 233 Cal.App.4th 1156, 1179.) This definition does not refer to or rely on an actual written contractual status between the independent contractor and the employer. Also, none of the secondary indicia of the nature of the employment relationship includes the need for a formal written contract. (Varisco, at p. 1103-1104 [quoting S.G. Borello & Sons, Inc. v. Department of Industrial Relations (1989) 48 Cal.3d 341, 350].) Therefore, an alleged gap in Dr. Sahlolbei’s contractual status does not necessarily mean by itself that he did not perform as an independent contractor during that time, especially where he continued to perform his duties, including as a member of the MEC. Certainly, Dr. Sahlolbei has not cited authority requiring that a formal written contract exist.
Dr. Sahlolbei’s argument therefore is without merit.
III. DISPOSITION
The petition is granted. Consistent with the California Supreme Court’s remand and the additional findings herein, the Superior Court of Riverside County is directed to vacate its order of September 30, 2014, in Riverside Superior Court case No. INF1302523 setting aside count 1, the charge of self-dealing in violation of Government Code section 1090, and to enter a new and different order reinstating count 1.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
MILLER
Acting P. J.
We concur:


SLOUGH
J.


FIELDS
J.