Opinion
C079440
08-29-2018
THE PEOPLE, Plaintiff and Respondent, v. WILLIAM TIPTON, JR., et al., Defendants and Appellants.
NOT TO BE PUBLISHED California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published,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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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. Nos. SF120997A, SF120997B)
In August 2013, a jury found defendants William Tipton, Jr., and Frayba (Sarwary) Tipton guilty of two counts of embezzlement of personal property (a 2006 Ford truck and a 2008 Ford Mustang) held under a contract of purchase (Pen. Code, § 504a) with Ford Motor Credit Company, which held legal title. It further found defendant Tipton guilty of perjury in connection with a Department of Motor Vehicles (DMV) form, and embezzlement (§ 503) of a 2004 Ford Mustang to which a credit union held legal title pursuant to a loan, acquitting him of two counts of insurance fraud and one count of defrauding an insurer. Finally, it found defendant Sarwary Tipton guilty of two counts of perjury in connection with a different DMV form. In May 2015, the trial court suspended imposition of sentence and granted probation conditioned on a jail term. Briefing on appeal was completed in February 2018.
We include defendant Sarwary Tipton's former surname to distinguish her from her husband, defendant Tipton.
Subsequent undesignated statutory references are to the Penal Code.
Defendants maintain that the embezzlement convictions under section 504a must be reversed because the trial court used the pattern instruction for general embezzlement under section 503, which omits elements of the section 504a offense. We agree, and will reverse the convictions. Defendant Tipton also maintains that his separate conviction under section 503 must be reversed because the evidence is insufficient to establish the necessary relationship of trust with the victim. We again agree, and will reverse the conviction. Finally, defendant Tipton maintains that his perjury conviction must be reversed because there is insufficient evidence that the averment under perjury in his DMV form was false. Yet again we agree. Defendant Sarwary Tipton's remaining contentions challenge her perjury convictions as lacking sufficient evidence to establish that her DMV averments were false, and as being infected with prejudicially erroneous instructions. As to these, we disagree and will affirm these convictions. While this may come as cold comfort at this stage in the proceedings, at least defendants will not be subject to further criminal proceedings for financial irresponsibility. We thus reverse the judgment except for defendant Sarwary Tipton's perjury convictions and remand with directions.
As we are reversing all four of defendant Tipton's convictions with directions to dismiss, we do not need to consider his alternative arguments regarding ineffective assistance of counsel, the denial of his motion for new trial, or his claim of cumulative prejudice.
FACTUAL AND PROCEDURAL BACKGROUND
We attempt to boil down the far-ranging broth of facts presented in the briefing to those pertinent to the issues on appeal.
Defendant Sarwary Tipton was born in Afghanistan in 1972 and came to the United States in 1987 with her family, settling in Fremont. She testified that she is a devout follower of Islam. She married her first husband after graduating college and had three children with him. Her former husband had a religious divorce from her in March 2004; however, they did not obtain a civil divorce until May 2006 and she conceded that she was still married to him until then. In December 2004, she and defendant Tipton (who had met a little over a year earlier) participated in a religious wedding ceremony over which her father presided, defendant Tipton having first converted to Islam earlier that day. Defendant Sarwary Tipton testified that at this point she considered herself to be his wife, and their first child was born in 2006, apparently before July. When they began living together after the ceremony, they held themselves out as spouses to family and friends, but this did not include the people with whom she worked because she did not share personal matters with them. After obtaining her civil divorce from her former husband, defendant Sarwary Tipton participated in a civil marriage ceremony with defendant Tipton in July 2006 for the sake of his family, and to obtain the benefits associated with civil marriage. At this point, she took defendant Tipton's name; her four children with him (with a fifth due at the time of the 2013 trial) carry his name as well.
Defendant Sarwary Tipton's oldest child testified she was present for the ceremony, and defendants celebrate their anniversary on that date.
The prosecutor did not explore whether the couple began to claim married status on their tax returns after this point.
In February 2004, defendant Sarwary Tipton had bought the 2004 Mustang for defendant Tipton with financing from Ford Motor Credit. She transferred the car to defendant Tipton in April 2005. In the DMV transfer-of-title form, she listed herself as "Wife," characterized the transfer as a "[f]amily transfer" exempt from use tax or a new smog certificate, and in the statement of facts asserted "vehic[le] is being transferred between spouses." (Notably, the form does not specify that this status was for purposes of California law). She signed the form under penalty of perjury. Defendant Tipton then obtained a loan from his credit union to pay off Ford Motor Credit, as a result of which the credit union held legal title to the car.
In July 2008, a fire rendered the home of defendants uninhabitable and destroyed an SUV in the garage. The large family began its diaspora over the next two and a half years while their residence was rebuilt, living six months in the first rental home, six months in a second rental home, and then at least 18 months in a rental home that defendant Sarwary Tipton owned. The 2004 Mustang ordinarily would have been in the driveway of their primary residence, but on the night of the fire it was at the mechanic. At the rental homes, the garages were small, so they made due with the garage, the driveway, and street parking. The 2004 Mustang was not used often, and after 2008 defendant Sarwary Tipton testified that her husband was unable to use it because there was a problem with the engine. On the return to their rebuilt home, the 2004 Mustang was usually garaged to protect the convertible top. Defendants never filed any loss claim with their insurer for the 2004 Mustang.
Defendants had filed an insurance claim for the destroyed SUV. In speaking with the insurance representative and during an insurer's examination under oath, they stated that they had been married in July 2006. Defendant Sarwary testified that she had not wanted to bother explaining the earlier ceremony.
After January 2009, defendant Tipton became delinquent on the loan from the credit union. In March 2009, the credit union sent an order to its repossession agency for the 2004 Mustang. When defendant Tipton went to his branch in April 2009, a collections representative cornered him on the subject of the loan delinquency. He told her it had been destroyed in the house fire and he had filed a claim with his insurer. He did not make any further payments. Defendant Tipton also allowed the registration on the 2004 Mustang to expire in 2009.
In July 2009, the credit union filed a lienholder's claim with the defendants' insurer on its own initiative, stating it had been informed the car was destroyed in a fire. Aware that the 2004 Mustang had not been involved in the fire, the insurer sent a notice of suspicious claim to the Department of Insurance (DOI). (The insurer denied the credit union's lienholder's claim in January 2011.) The credit union obtained a judgment against defendant Tipton in September 2010. A credit union officer noted that as late as May 2012 their attorney had not done anything to enforce the judgment because he had not been specifically directed to do so.
The basis for the jury's acquittals on the questionable charges of insurance fraud is thus evident.
Meanwhile, a DOI investigator assigned the case involving the 2004 Mustang somehow learned that there were outstanding writs of possession on two other vehicles that defendants owned, a 2008 Mustang and a 2006 Ford pickup truck, that had not been returned to the possession of Ford Motor Credit (the holder of the legal title). Even though embezzlement is not normally part of her purview, the investigator included the other vehicles in her investigation.
The lead DOI investigator, accompanied by an investigator for the prosecutor, made "many" efforts to locate the 2004 Mustang between July 2009 and July 2010, conducting surveillance while driving past defendants' homes. They never saw that car or defendant Tipton driving it, although they did see him driving the other Mustang. Defendant Tipton's mechanic told the investigators that in late 2008, he had seen defendant Tipton drive the 2004 Mustang.
In April 2012, defendant Tipton filed an application to renew the registration of the 2004 Mustang. In the statement of facts in the DMV form, he attested under penalty of perjury that the car had broken down in 2008 when its "engine blew [and] it's been sitting in my garage since then[.] [P]lease help out with any fees if possible. Not been driven in the street[;] didn't know you could non-op." The DMV issued a renewal in May 2012. The credit union was aware of the renewal.
In August 2012, the DOI investigator applied for a warrant to seize the 2004 Mustang and the other two vehicles from the residence of defendants. When the credit union recovered possession of the 2004 Mustang in August 2012, it sold it in an auction in September 2012, the proceeds paying off the delinquent loan in full.
Defendant Sarwary Tipton had seen the DOI investigator outside their homes on several occasions; the 2004 Mustang was in the garage. When she would approach their car to talk to them, they would drive off. Both Ford Motor Credit and the credit union were well aware of where defendants and the vehicles were; defendants had never concealed them. If the financers had ever come to repossess the cars, defendants would have let them have them. She had attempted to reach a settlement with the credit union, but the prosecutor's office stymied her efforts.
A credit union officer testified there had been two efforts at settlement. Defendant Tipton had come into the office in March 2011 with an offer to settle the delinquency for less than the outstanding balance, and she referred him to the credit union's attorney because she did not have the authority to settle a delinquent loan. After the seizure of the 2004 Mustang in August 2012, defendant Tipton called and offered to pay off the loan in full to recover the car. He was initially told the prosecutor had asked the credit union to speak with the prosecutor before taking any action, which angered defendant Tipton, but the credit union then left him a message shortly afterward letting him know the car was available for the payoff amount, but he apparently did not respond.
DISCUSSION
1.0 The Instruction on the Section 504a Counts Was Prejudicially Deficient
Although the various forms of theft are consolidated into a single offense (§ 484), the essential elements of each form remain distinct. (People v. Beaver (2010) 186 Cal.App.4th 107, 121; cf. People v. Vidana (2016) 1 Cal.5th 632, 647-648 [§ 484 and § 503 are different statements of same offense of theft, precluding conviction of both].) Theft by embezzlement "is the fraudulent appropriation of property by a person to whom it has been intrusted." (§ 503.) Its elements include an owner entrusting property to a defendant on the basis of the owner's trust in the defendant, who then fraudulently converts the property to the defendant's own use with the intent to deprive the owner of its use. (Beaver, supra, 186 Cal.App.4th at p. 121.) This requires the existence of a bond of trust and confidence between the two parties akin to a fiduciary relationship. (Ibid.) Although a mistaken conviction under one theory of theft may be sustained under another theory that has support in the evidence, the jury must be instructed on all of the elements of the other theory in order to affirm on that basis. (Id. at pp. 123-125.)
In the chapter devoted to theft by embezzlement, the Penal Code deems a number of relationships to have the required bond of trust and confidence necessary to support a conviction for embezzlement. (§§ 504-508; 2 Witkin & Epstein, Cal. Criminal Law (4th ed. 2012) Crimes Against Property, § 29, p. 53.) Among these statutory relationships of trust are "a contract of purchase not yet fulfilled"; a defendant who is party to such a contract "who . . . fraudulently remove[s], conceal[s,] or dispose[s] of" the goods that are the subject of the contract "with intent to injure or defraud the . . . owner thereof, is guilty of embezzlement." (§ 504a.) This requires affirmative conduct giving advantage to the defendant by preventing the discovery of the goods through the withholding of facts. (People v. Eddington (1962) 201 Cal.App.2d 574, 577-578.) In Eddington, the court rejected a claim that the defendant's action in connection with a stereo system was merely the frustration of repossession efforts, because he removed the system from his office (to which the victim had delivered it) and put it elsewhere, and when asked about its location provided false addresses, even declining to reveal its exact location when the trial judge asked him at trial. (Id. at p. 578.) The necessary intent to injure or defraud can be inferred from the action of withholding the goods without paying for them. (Id. at p. 579.) On the other hand, the unadorned relationship of creditor and debtor is not among the general or statutory relationships of trust. As we noted long ago, " 'If the relation is that of creditor and debtor merely, an appropriation by the latter does not constitute embezzlement' " (People v. Petrin (1954) 122 Cal.App.2d 578, 581); "[t]o hold otherwise would be to conclude that every person who breaches a civil contract wherein the payment of money is involved is guilty of embezzlement" (id. at p. 584).
Although there were two section 504a counts jointly charging defendants (counts 1 and 2), along with the section 503 count against defendant Tipton alone (count 9), the trial court employed only the unmodified pattern instruction for section 503 for all three counts. After identifying which charges applied to which defendants (the two section 504a counts against both defendants and the section 503 charge against only defendant Tipton), the trial court instructed with respect to the substantive elements that the three counts against defendant Tipton and the two counts against defendant Sarwary Tipton involved embezzlement "in violation of . . . Section 503" and thereafter included only the elements of the general embezzlement statute we set out at the start of this part of the Discussion (in addition to definitions of fraudulent conversion as involving a breach of the trust with the owner, and the defense of a good faith belief in a right to the property). Therefore, the jury was never asked to determine the necessary additional elements under section 504a (the existence of a conditional purchase contract and a fraudulent concealment of the goods with the intent to defraud the owner). The verdict form nonetheless identified the offense in the joint counts as section 504a.
This is apparently a function of counsel and the trial court laboring under the shared misconception that somehow section 503 defined the offense and section 504a prescribed the punishment because there was not a pattern instruction for section 504a (a perception plainly at odds with the law we have set out above). A bench note to the pattern instruction notes that section 503 does not apply where the relationship is that of creditor and debtor. (Bench Notes to CALCRIM No. 1806 (2011) p. 1151 [see "Related Issues," "Fiduciary Relationships"].)
While it is not necessary to set out the entirety of section 504a in the charge to the jury, at least the necessary elements must be included. (People v. Swenson (1954) 127 Cal.App.2d 658, 665.) The instruction in the present case on embezzlement is therefore erroneous with respect to section 504a. We must determine whether this error is harmless beyond a reasonable doubt. (People v. Hayes (1990) 52 Cal.3d 577, 628.)
The People elide over the deficiency in the instruction and assert that argument of counsel somehow supplemented the missing elements, and the evidence with respect to these elements is uncontroverted, so the error is harmless.
With respect to the former remarkable proposition, the People do not provide any authority that oral argument of counsel may supplement structurally deficient instructions and cure the error. People v. Merritt (2017) 2 Cal.5th 819, which they cite, simply stated that the argument of the prosecutor with respect to an omitted element can be considered as a factor in the determination of prejudice, but thereafter emphasized that defense counsel had conceded that a robbery had been committed (albeit by someone other than the defendant) and the video evidence established without controversy that a robbery had taken place (id. at pp. 831-832). It does not simply hold that counsel's argument can fill in the blanks. Rather, the rule is that "arguments of counsel cannot substitute for instructions by the court." (Taylor v. Kentucky (1978) 436 U.S. 478, 488-489 [failure to instruct on presumption of innocence cannot be cured by arguments of defense counsel].) As both the United States and California Supreme Courts have held, the argument of counsel generally can be considered for the purpose of determining the manner in which they may have informed a jury's understanding of ambiguous instructions. (Middleton v. McNeil (2004) 541 U.S. 433, 438 ; People v. Kelly (1992) 1 Cal.4th 495, 526-527; People v. Cuevas (2001) 89 Cal.App.4th 689, 699.)
As for the state of the evidence, even if we agreed that the existence of a contract between the victim and defendants for the conditional purchase of the 2008 Mustang and the 2006 pickup truck is established beyond a reasonable doubt (although the People do not direct us to any testimony to this effect), the evidence of fraudulent concealment is not only insufficient to establish harmless error beyond a reasonable doubt, it is not even sufficient to support a finding in favor of the verdict on this element. There is an absence of any affirmative evidence that defendants kept their location a secret from Ford Motor Credit (indeed, it apparently had served the writs of possession on them), or that the two vehicles were secreted at some other location, or that defendants made any affirmative misrepresentations to Ford Motor Credit to prevent it from finding the vehicles. Ford Motor Credit simply displayed unaccountable passivity in failing to execute on its writs of possession (a matter on which the DOI and the prosecutor acted upon their own initiative to resolve). No evidence controverts the testimony of defendant Sarwary Tipton that had anyone shown up to repossess the vehicles, they would have surrendered them. Their failure to do so voluntarily was not criminal.
As a result, we not only find the instructional error prejudicial, we conclude that defendants may not be retried on these counts because the evidence was insufficient. We shall thus direct the trial court to dismiss the section 504a counts (counts 1 and 2) as to both defendants on remand. Having reversed these convictions, we do not need to consider defendant Sarwary Tipton's fallback argument regarding ineffective assistance of counsel.
2.0 Defendant Tipton's Section 503 Conviction Must Be Reversed for Insufficient Evidence
We are not given any explanation why the prosecutor chose to charge defendant Tipton under section 503 (count 9) with respect to the credit union's loan for the 2004 Mustang (other than his belief, to which we alluded above, that there was not any substantive difference between the two statutes). Defendant Tipton asserts that, as charged, there is insufficient evidence of a relationship of trust between him and the credit union.
We agree. Under the authority we discussed in part 1.0, ante, a defendant who appropriates the property of a creditor is not ordinarily guilty of embezzlement because the relationship—absent statutory definition—is not one of trust. The People entirely miss the point in discussing cases involving section 504a. That was not the statute under which defendant Tipton was charged, and (as noted above) we cannot deem the conviction to be under section 504a because the jury never made the necessary findings to sustain a conviction under that statute (nor is there sufficient evidence in the record that would sustain any such finding).
We thus reverse defendant Tipton's conviction for insufficient evidence and will direct the trial court to dismiss the count (count 9) on remand. Moreover, because there was insufficient evidence at trial to establish any violation of section 504a, the prosecutor may not refile charges with respect to the 2004 Mustang pursuant to that section. 3.0 Insufficient Evidence to Support Defendant Tipton's Perjury Conviction
We asked for supplemental briefing on whether the failure of the DMV form to specify that the party using the terms "spouse" or "wife" under penalty of perjury meant for purposes of California law precluded a conviction for perjury if the party was otherwise a spouse or wife. On further reflection, we have concluded this consideration necessarily comes within the defense of good faith, because the basis for the good faith belief is immaterial.
Defendant Tipton asserts the evidence is insufficient to establish that he falsely averred in the DMV form that he had not driven the 2004 Mustang on the street since 2008 (count 5). We agree.
The only evidence of defendant Tipton driving the car was the statement of his mechanic, who recalled last seeing him drive the car in late 2008. No one else ever saw him drive that car after 2008, although they saw him, apparently multiple times, in the other Mustang.
The People begrudgingly agree that the statement of the mechanic does not establish that defendant Tipton committed perjury. They instead boldly assert that "strong circumstantial evidence" supports the conviction, in the form of the testimony of the DOI investigators that they never saw the car, from which the People assert the inference is inevitable that defendant Tipton must have been driving it on the street.
In the first place, the testimony is not direct evidence that the car was not present at the residences of defendants. The DOI investigators' "investigations" involved driving past defendants' residences without ever getting out to look inside the garage for the car, and without ever stopping to speak with defendant Sarwary Tipton when she approached them. They were accordingly not competent to testify that the car was not inside the garage.
Moreover, even if the car were absent from the residence, it is mere speculation that defendant Tipton was driving it on the street, as opposed to having it towed to another location. Speculation does not constitute substantial evidence to support a verdict. (People v. Herrera (2006) 136 Cal.App.4th 1191, 1205; Kuhn v. Department of General Services (1994) 22 Cal.App.4th 1627, 1633.)
As a result, we reverse defendant Tipton's conviction on count 5 and will direct the trial court to dismiss the count on remand. We accordingly do not need to reach the remainder of defendant Tipton's arguments with respect to this conviction.
4.0 Defendant Sarwary Tipton's Perjury Convictions Are Affirmed
4.1 The Evidence Is Sufficient to Support the Verdict
As to counts 3 and 4, defendant Sarwary Tipton asserts that her two claims under penalty of perjury to be the "wife" or "spouse" of defendant Tipton are "literally" true and therefore the evidence is insufficient to support the findings that it was false. We disagree.
This completely disregards the fact that the jury could simply have determined that she did not in fact subjectively believe she had the status of wife for purposes of a civil transaction simply by virtue of the religious ceremony. There was her concession that she remained civilly married to her former husband until shortly before her civil marriage to defendant Tipton. There was her failure to take defendant Tipton's name until after the civil ceremony. There was defendants' identification to the insurance investigator of July 2006 as the date of their marriage. There was the failure to tell anyone outside her circle that she was now defendant Tipton's wife. All of this is substantial evidence for the jury to conclude that she did not truly believe she actually inhabited the status of spouse before her July 2006 civil ceremony. That she had a child with defendant Tipton before the latter ceremony was simply a contrary circumstance, which the jury was entitled to weigh accordingly as perhaps simply reflecting a freedom to have children together as a result of the religious ceremony rather than considering each other to be spouses.
Although defendant Sarwary Tipton, apparently enamored of the issue, goes on at length about her right to religious freedom being violated, this is a straw issue. Nothing in the instructions precluded the jury from crediting a sincere belief in her religious status as a spouse as a defense to the charge (having been instructed that good faith was a defense). The prosecutor never suggested in argument that a sincere belief in her status as a spouse after the religious ceremony was not a defense; he simply argued that either the ceremony never took place because this was the first time he had ever heard about it during his involvement with the case, or that neither she nor defendant Tipton truly believed that they had the status of spouses as a result of the religious ceremony, because she was a businesswoman who acknowledged that she was still married to her former husband until their civil divorce. We thus do not need to address this claim further. We affirm the judgment as to counts 3 and 4.
"If the defendant actually believed that the statement was true, the defendant is not guilty of this crime even if the defendant's belief was mistaken." (Quoting in part CALCRIM No. 2641 as given.)
4.2 The Instruction Identifying the Charges Was Not Prejudiced Against Her
In the instruction identifying the charges against each defendant, the written instruction provided with respect to the first perjury count (count 3) against defendant Sarwary Tipton that it was premised on "the designation of Frayba Tipton as 'Wife' on the DMV . . . Form . . . , Section 2, entitled, 'Bill of Sale,' " and that the second perjury count (count 4) was premised on "the certification on . . . the DMV . . . Form . . . indicating the transfer of the . . . 2004 . . . Mustang . . . was exempt from the use tax (in Section A, entitled 'Use Tax Exemption Statement') and from the smog certification (in Section B, entitled 'Smog Exemption Statement') because the transfer was between 'spouses.' " Defendant Sarwary Tipton contends the use of quotation marks around "spouses" and "Wife" deprived her of the defense of a good faith belief in the truth of these representations, because the jury would understand that this implied their falsity.
We reject this dubious argument. Within the same instruction, quotation marks are used around the three titles in the form. We do not find it reasonably likely that any reasonable juror would conclude that the quotation marks to which defendant Sarwary Tipton objects represent anything other than additional quotations from the documents. (Boyde v. California (1990) 494 U.S. 370, 378, 380 ; People v. Williams (2013) 56 Cal.4th 630, 688.)
4.3 No Sua Sponte Duty to Instruct Further on Good Faith
Under a heading claiming a failure to instruct on her good faith belief premised on her religious wedding, defendant Sarwary Tipton appears to contend the trial court should have specifically "allowed for the significance of the Islamic [wedding] ceremony" sua sponte in order to highlight for the jury that "the good faith defense encompasses the possibility of being [a spouse] based on observance of religious law."
A trial court does not have an obligation to expand upon standard jury instructions sua sponte. (People v. Lee (2011) 51 Cal.4th 620, 638.) Although defendant Sarwary Tipton adverts to trial counsel's unsuccessful renewed motion for acquittal on the perjury charges in the midst of instruction-setting, there was not a request for additional instruction. In any event, even if we were to interpret counsel's efforts as a request for a pinpoint instruction to this effect, it would simply have been duplicative of the instruction the jury received on good faith, which was within the trial court's discretion to deny. (People v Bolden (2002) 29 Cal.4th 515, 558.)
Defendant Sarwary Tipton's alternative argument regarding ineffective assistance of counsel is moot, and we reject her assertion that any "cumulative" prejudice infected her perjury convictions, as we do not find the instructional error and insufficient evidence with respect to her section 504a convictions to have any spillover effect. --------
DISPOSITION
The convictions of both defendants on the section 504a counts (counts 1 and 2) are reversed and remanded to the trial court with directions to dismiss them. The convictions of defendant Tipton on the section 503 count (count 9) and the perjury count (count 5) are reversed and remanded with directions to dismiss them. The convictions of defendant Sarwary Tipton on the perjury counts (counts 3 and 4) are affirmed. The trial court shall resentence defendant Sarwary Tipton on these remaining convictions, and shall vacate the sentence and order of probation of defendant Tipton.
BUTZ, J. We concur: RAYE, P. J. ROBIE, J.