Tuesday, April 16, 2019
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Court of Appeal:
Fifth District Says Colleague, as Trial Judge, Failed to Apply Statute With Plain Meaning
Opinion Declares That Justice Snauffer Erred in Refusing to Award Treble Damages Though Penal Code Section Renders Such Damages Mandatory in Cases of Theft
By a MetNews Staff Writer
The Fifth District Court of Appeal yesterday reversed the decision of a colleague on the court, rendered when he was a judge of the Fresno Superior Court, declaring that he erred in concluding that the Legislature, in providing for treble damages to victims of a theft, did not intend the statute to apply where the defendant stole from his joint venturer.
Then-Judge (now Justice) Mark W. Snauffer should have ordered the thief to pay damages of $5 million, rather than $1.7 million, Justice Bert Levy said in his opinion, which was not certified for publication.
Snauffer’s judgment, which yesterday’s opinion partially reverses, was issued on Jan. 12, 2018. The jurist was confirmed as a member of the Court of Appeal on July 26, 2018.
A cross complaint in the Fresno Superior Court action alleged that Robert Clark “Sonny” Wood II—with whom cross-complainant Ted Spitzer had formed a joint venture, Flournoy Management, LLC—pilfered moneys, some belonging to Spitzer, and some to Flournoy, and converted inventory which Spitzer owned, selling it, and pocketing the proceeds. A jury found against Wood and his co-defendant, Access Medical, LLC., setting Spitzer’s actual damages at $1,289,165, and, with respect to Spitzer’s derivative claim on behalf of Flournoy, finding actual damages to be $401,232.
Treble-Damage Provision
Snauffer declined to apply Penal Code §496 which, in ¶(a), renders it a crime to obtain property by theft or to conceal stolen property from the owner, and says in ¶(c):
“Any person who has been injured by a violation of 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.”
Declining to award treble damages, Snauffer explained:
“In the Court’s view, the Legislature could not have intended Penal Code section 496 to apply in the case of an ordinary contractual dispute, or fraud case, arising in the course of an ongoing legitimate business relationship between the parties.”
Levy wrote:
“[U]under the plain and literal terms of section 496(c), Switzer was entitled to an award of three times his actual damages that were found by the jury on both the direct and derivative section 496 causes of action.”
Result Not ‘Absurd’
He went on to say:
“An exception exists to the plain meaning rule. A court is not required to follow the plain meaning of a statute when to do so would frustrate the manifest purpose of the legislation as a whole or otherwise lead to absurd results….However, the absurdity exception requires much more than showing that troubling consequences may potentially result if the statute’s plain meaning were followed or that a different approach would have been wiser or better.”
Levy added:
“In the present case, we do not find the plain meaning of section 496(c) to be absurd at all, much less so absurd in its results that we would be permitted to disregard its literal wording. Section 496(c) clearly and simply requires, as a prerequisite for treble damages, that a “violation” of the criminal offense described in the statute has been shown and that such violation has caused actual damage. The wording of the statute makes no exception for cases involving preexisting business relationships, nor does it limit applicability to violations involving common carriers or truck cargo, and we are not at liberty to insert such omitted terms into the statute….[O]ur function is not to judge the wisdom of the statute, and we are not empowered to insert what a legislative body has omitted from its enactments.”
The jurist traced the legislative history of the statute, concluding that there was no intent to bar treble damages where the victim was engaged in a business relationship with the perpetrator.
Attorney Fees Mandatory
He said an award of treble damages where there is a violation of §496(a) is mandatory—and so is the award of attorney fees. Snauffer granted such fees in connection with the cross-action on behalf of Flournoy, but not on Spitzer’s cross complaint.
“The trial court’s refusal to award attorney fees to Switzer under section 496(c) constituted reversible error, and that portion of the trial court’s attorney fee order is accordingly reversed,” Levy said.
He found that Snauffer did, however, have discretion to award prejudgment interest, which the jury awarded, in an amount less than the legal rate of seven percent, and that Switzer failed to show that Snauffer abused his discretion in declining to order that the judgment be amended to include an additional judgment debtor.
The case is Switzer v. Wood, F077206.
Other Litigation
The Fifth District in 2015 affirmed an order by Fresno Superior Court Judge Jeffrey Y. Hamilton Jr. denying an anti-SLAPP motion against Spitzer filed by the law firm of McCormick, Barstow, Sheppard, Wayte & Carruth LLP. Spitzer alleged in a cross complaint that the firm breached its fiduciary duties by continuing to represent both him and Wood after a conflict between them had arisen.
Levy said in an unpublished opinion that the first prong of the anti-SLAPP statute, Code of Civil Procedure §425.16, was not satisfied, explaining:
“The gravamen of the causes of action against McCormick Barstow and the individual attorneys is the breach of their fiduciary duty to Flournoy arising out of the simultaneous representation of Flournoy and Wood, clients with allegedly conflicting interests. An attorney’s breach of fiduciary duties owed to a client does not constitute protected speech or petitioning within the meaning of section 425.16.”
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