Opinion
G054980
06-21-2018
L.A.C.C., INC., Plaintiff and Respondent, v. ANDREW R. MOORE, Defendant and Appellant.
Fitzgerald & Campbell and William James Campbell for Defendant and Appellant. Hartnett Law Group and Patrick M. Hartnett for Plaintiff and Respondent.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Super. Ct. No. 30-2014-00727238) OPINION Appeal from a judgment of the Superior Court of Orange County, Gail Andrea Andler, Judge. Affirmed. Fitzgerald & Campbell and William James Campbell for Defendant and Appellant. Hartnett Law Group and Patrick M. Hartnett for Plaintiff and Respondent.
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Defendant Andrew R. Moore (Andrew) appeals from a judgment against him for $735,021.25, which the trial court trebled to $2,205,063.75 pursuant to Penal Code section 496, subdivision (c) (section 496(c)). Andrew contends the court erred by failing to credit a $190,000 settlement payment to the judgment. He also claims the court erred when it trebled damages and awarded attorney fees under section 496(c). We affirm the judgment.
Because Andrew and his wife share the same surname, we refer to them by their first names for convenience and clarity. We intend no disrespect.
All statutory references are to the Penal Code unless otherwise stated.
FACTS
Plaintiff L.A.C.C., Inc. (LACC), a small family owned retail computer company in Anaheim, California, sued Andrew and his wife Cecilia Litonjua-Moore (Maricel) for defrauding plaintiff of hundreds of thousands of dollars. LACC hired Maricel in 2004. She worked as the personal assistant to the president and owner of LACC, and in that position she had authority to order products on credit from LACC vendors and had the necessary access to alter LACC's inventory levels. She also had the ability to generate and delete invoices, access the owner's computer, and use the owner's signature stamp.
The owner of LACC trusted Maricel completely and treated her like family, inviting her over for dinner and loaning her money when she needed it. In fact, when Maricel married Andrew in 2008, the owner and his wife attended the wedding.
Maricel told LACC's owner and his wife about her and Andrew's financial problems. She also told them Andrew was very controlling and if she did not complete assigned tasks he was abusive. Andrew supervised and controlled many aspects of Maricel's life, including their household finances.
At one point, LACC's owner asked Maricel to sell 31 older iPads on her eBay account. The iPads sold quickly at a discount. This was Maricel's first experience selling items on eBay, but it was not her last.
Maricel and Andrew started stealing iPods around December 2009. The scheme accelerated and they began listing Apple products on eBay under their respective accounts. Andrew corresponded with buyers on the internet, answered questions, and arranged for payment to his account. Once an item sold, Andrew received e-mail and text notifications from PayPal informing him who had paid and how much. Andrew would then forward the notifications to Maricel's personal e-mail address, as a sign to Maricel of what item needed to be stolen from LACC's inventory and shipped to a buyer. If an item was out of stock, Maricel would order the product with LACC funds, delete the purchase orders, and adjust the inventory in LACC's system so the physical inventory matched what was in the system. Eventually, Maricel and Andrew progressed from small batch sales over eBay to dealing directly with bulk purchasers.
LACC's owner discovered the scheme in December 2013, while working late at the office. While using a scanner connected to Maricel's computer, he discovered archived e-mails pertaining to the scam in dedicated folders (such as "Wires," "eBay," "PayPal," etc.) left in plain sight on her computer desktop. LACC discovered additional paper documents, including a form 1099-K for "Andrew Moore" in the amount of $105,710.01 for the year 2011. LACC copied the contents of Maricel's company computer. LACC did not immediately confront Maricel, so it could investigate the theft, but revoked her credentials to order product on LACC credit or to alter inventory.
After the scheme was discovered by LACC, but before she was confronted about it, Maricel took steps to wipe her company hard drive, and she and Andrew destroyed their phones and computers.
LACC confronted Maricel about the scheme in February 2014. She eventually admitted to her role in the theft, asked for her job back, and cooperated in providing evidence of the amounts she and Andrew received.
Andrew knowingly participated in the scheme. His eBay account was used to conduct hundreds of Apple product transactions between 2011 and 2013. In total, he received $382,475.82 in PayPal payments from eBay. He used his personal e-mail address to forward e-mails to Maricel to indicate which Apple product Maricel should pack and ship from LACC. During this time period, Maricel did not have access to Andrew's e-mail.
Andrew also knew of and negotiated the sale of Apple products to bulk buyers, receiving $183,594 to his personal PayPal account from one buyer alone. The same buyer wired at least $189,890 to Andrew and Maricel's joint bank account. At one point Maricel was in the hospital undergoing surgery, and was without her computer and unable to communicate with buyers. Andrew followed up with the main bulk buyer, e-mailing him about a delay in shipping product due to Maricel's surgery. Shortly after her surgery, Maricel went to LACC's office, accompanied by Andrew. She was visibly in pain and had bandages on her stomach, but she refused to leave the office stating, "I need to be here."
In 2014, LACC filed a complaint against Andrew and Maricel, among others, alleging 10 causes of action for defrauding the company out of at least $732,517.70. Andrew's father, Dwight Moore, was also named in the suit, although he was apparently dismissed before trial. The fifth cause of action alleged receipt of stolen property and damages under section 496. LACC sought damages of at least $732,517.70 and requested treble damages pursuant to section 496(c).
In her June 2015 deposition, Maricel attempted to exculpate Andrew from involvement in the scheme and testified he did not know of the fraud. However, Maricel was unable to explain how she performed even one of the hundreds of internet transactions.
After trial, the court issued its statement of decision. It determined Andrew and Maricel were jointly and severally liable for the amounts stolen from LACC. In sum, Andrew and Maricel received $588,017 from the sale of Apple products stolen from LACC. Because Andrew and Maricel sold the Apple products at "fire sale" prices that were 20 to 40 percent below LACC's acquisition costs, the court determined LACC was entitled to an additional 25 percent to compensate LACC for its cost. LACC's actual loss from the scheme, not including lost profits, was $735,021.25. The court trebled those damages to $2,205,063.75, pursuant to section 496(c).
The parties waived their right to a jury. --------
DISCUSSION
"In reviewing a judgment based upon a statement of decision following a bench trial, we review questions of law de novo." (Thompson v. Asimos (2016) 6 Cal.App.5th 970, 981.) The record in this case does not include a transcript of the oral proceedings at trial.
There is no Evidence of a Settlement Payment
Andrew argues the trial judge committed legal error by failing to reduce the judgment by $190,000 to account for a settlement payment in that amount made before trial. But the record lacks any evidence of a settlement payment.
To support his argument, Andrew points to his objection to the proposed statement of decision: "Defendant Andrew Moore generally objects to damages being not less than $735,021.25. At the very least damages should be offset by the $190,000.00 paid by Dwight Moore in his settlement with [LACC] pursuant to California Code of Civil Procedure § 877 . . . [citation]." He also claims a settlement agreement was referred to in the request for dismissal of Dwight Moore, a document that does not appear in the record. Andrew notes this court may take judicial notice of court records under Evidence Code section 452, although he has not made a motion pursuant to California Rules of Court, rule 8.252. We decline to take judicial notice.
The record lacks any evidence whatsoever of a purported settlement payment. There is also no evidence Andrew attempted to argue or move the court for an offset pursuant to Code of Civil Procedure section 877, or to seek a good faith determination pursuant to Code of Civil Procedure section 877.6. We acknowledge Code of Civil Procedure section 877 allows a nonsettling joint tortfeasor a credit or setoff for settlement payments made in good faith. In order for such a setoff to occur, however, there must be sufficient evidence of the value of the consideration. (Franklin Mint Co. v. Superior Court (2005) 130 Cal.App.4th 1550. 1558-1559.) Here, there was no evidence of any settlement that would serve as the basis for a setoff under Code of Civil Procedure section 877.
Finally, Andrew contends he was precluded from introducing evidence about the settlement because the court issued a minute order along with its statement of decision stating the court would "not entertain further briefing, objections or proposals." However, the minute order was issued February 22, 2017, nearly seven months after trial concluded on August 8, 2016. Andrew had ample opportunity to introduce evidence of the settlement both at trial and in post-trial briefing. He failed to do so.
The Court Did Not Err by Awarding Treble Damages
Andrew argues the court committed legal error by awarding treble damages pursuant to section 496(c). He claims section 496(c) is akin to a punitive damage award under Civil Code section 3294 and "a plaintiff must show that the defendant has the ability to pay the award." We disagree.
Section 496, subdivision (a) makes receiving or buying property "that has been obtained in any manner constituting theft" a criminal offense punishable by imprisonment. Section 496(c) provides that any person "who has been injured by a violation of [section 496, subdivision (a)] may bring an action for three times the amount of actual damages, if any, sustained by the plaintiff, costs of suit, and reasonable attorney's fees." Section 496, subdivision (a) does not refer to punitive damages. The statute was enacted to deter criminal behavior and to dry up the market for stolen goods. (Bell v. Feibush (2013) 212 Cal.App.4th 1041, 1046-1047.)
Andrew contends evidence of a defendant's financial condition is a prerequisite to an award of treble damages under section 496(c). In support of his argument, Andrew relies on the leading punitive damages case of Adams v. Murakami (1991) 54 Cal.3d 105 (Murakami). In Murakami, a mental patient who had become pregnant by another patient sued her doctor, alleging that the pregnancy resulted from his wrongful acts and omissions. (Id. at p. 109.) The trial court awarded punitive damages and the Court of Appeal affirmed. (Ibid.) The Supreme Court held that the award was improper because "an award of punitive damages cannot be sustained on appeal unless the trial record contains meaningful evidence of the defendant's financial condition." (Ibid.) The Court further explained it was the plaintiff's burden to submit such evidence. (Ibid.)
Murakami, however, does not apply to punitive damages assessed as a statutory penalty. (Rich v. Schwab (1998) 63 Cal.App.4th 803 (Rich).) In Rich, tenants of a mobile home park sued the owners of the mobile home park for a retaliatory rent increase. (Id. at p. 809.) The jury awarded compensatory and punitive damages, but the trial court refused to award punitive damages to more than one third of the complaining tenants, and refused to award any tenants their attorney fees. (Ibid.) The Court of Appeal reversed, determining all tenants were entitled to damages under Civil Code section 1942.5, governing retaliatory rent increases. (Id. at p. 808.) The Court further explained, "[B]ecause the punitive damages available under [Civil Code] section 1942.5 are limited by the terms of the statute, they may be imposed without regard to the [defendant's] net worth." (Ibid.)
Here, as in Rich, the damages were awarded under a specific statutory provision, section 496(c), rather than under the general punitive damage provisions of Civil Code section 3294. Under Civil Code section 3294, the finder of fact has the authority to determine the amount of punitive damages. (Rich, supra, 63 Cal.App.4th at p. 816.) "In contrast, statutory damages are set by a legislative body; while the fact finder must still determine whether such damages are to be awarded, if they are granted the amount is fixed by statute. Statutory damages may either take the form of penalties, which impose damages in an arbitrary sum, regardless of actual damages suffered or, as in the instant case, may provide for the doubling or trebling of the actual damages as determined by the judge or jury. [Citations.] Thus, while both exemplary damages and statutory damages serve to motivate compliance with the law and punish wrongdoers, they are distinct legal concepts, one of which is entrusted to the factfinder, the other to the Legislature. The numerous statutes specifically providing for treble damages testify to the fact that the Legislature never intended Civil Code sections 3294 and 3295 to restrict its ability to set the appropriate damage award in particular areas." (Beeman v. Burling (1990) 216 Cal.App.3d 1586, 1597-1598.)
Substantial deference should be given to the Legislature's determination of the appropriate sanctions for the statutory violation. But where "the penalties imposed amount to several hundred thousand dollars, some consideration of their cumulative impact on a [defendant] might be warranted. However, in the context of a statutory penalty, the issue of defendant's financial condition will at most be a matter for the defendant to raise in mitigation." (Rich, supra, 63 Cal.App.4th at p. 817.) The record is devoid of any such mitigating evidence.
DISPOSITION
The judgment is affirmed. LACC shall recover its costs on appeal.
IKOLA, J. WE CONCUR: MOORE, ACTING P. J. ARONSON, J.