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PEOPLE v. KAANEHE

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Court of Appeal, Third District, California.

The PEOPLE of the State of California, Plaintiff and Respondent, v. James K. KAANEHE, Defendant and Appellant.

Cr. 8227.

Decided: July 19, 1976

Robert E. Murphy, Sacramento, for defendant-appellant. Evelle J. Younger, Atty. Gen. by Emry J. Allen, Deputy Atty. Gen., Sacramento, for plaintiff-respondent.

By indictment, defendant was charged with ten counts of grand theft (Pen. Code, § 487, subd. 1), four counts of petty theft with a prior conviction (Pen. Code, §§ 484 and 667), and one count of perjury (Pen. Code, § 118). All of the charges arose out of defendant's ownership, operation and sale of cemetery plots in the Arlington Memorial Cemetery.

Following his arraignment, defendant made motions pursuant to Penal Code section 995 to dismiss the indictment, and Penal Code section 1538.5 to suppress evidence that had allegedly been obtained as the result of an illegal search and seizure.

The court dismissed the perjury count and denied the balance of the motion to dismiss. The motion to suppress evidence was denied, and the defendant thereafter plead guilty to two counts of grand theft. In exchange for the guilty plea, the prosecutor agreed to move the court to dismiss the remaining counts of the indictment and to refrain from arguing disposition or type of sentence to the court.

Defendant's notice of appeal indicates an appeal from the denial of his motion made pursuant to Penal Code section 1538.5 and ‘from the final judgment, sentence, and denial of defendant's motion to withdraw his plea of guilty . . . and from the whole thereof.’

Penal Code section 1237.51 prohibits an appeal from a judgment entered upon a plea of guilty or nolo contendere, except where the defendant has filed a certificate of probable cause. The purpose of the limitation is to prevent frivolous appeals following a guilty or nolo contendere plea. (People v. Brown (1971) 18 Cal.App.3d 1052, 96 Cal.Rptr. 476.) However, the requirements of the section (1237.5) are inapplicable to an appeal from a conviction entered pursuant to a guilty plea where errors in proceedings subsequent to the plea are asserted (People v. Dena (1972) 25 Cal.App.3d 1001, 102 Cal.Rptr. 357); nor do they apply to an appeal from an order denying a motion to suppress evidence made pursuant to Penal Code section 1538.5 (Cal. Rules of Court, rule 31, subd. (d)).2

‘It is not the purpose of the statute [Pen. Code, § 1237.5] to shut off an appeal from a judgment, even after a guilty plea, where the defendant is raising a bona fide reviewable issue.’ (People v. Warburton (1970) 7 Cal.App.3d 815, 819, 86 Cal.Rptr. 894, 896.)

Although the record on appeal does not contain a certificate of probable cause, the clerk prepared, and the trial court certified, a record on appeal and forwarded the same to us. The appeal from the denial of the 1538.5 motion is properly before us. (Fn. 2 ante p. 502.) Had a certificate of probable cause been requested as to the court's denial of the motion to withdraw the guilty plea, based upon prosecutorial conduct following the plea and prior to sentence, it would have been an abuse of judicial discretion to have refused the request. Under such circumstances, strict compliance with the provision of section 1237.5 is not required. (People v. Rose (1968) 267 Cal.App.2d 648, 73 Cal.Rptr. 349; Moran v. St. John (1968) 267 Cal.App.2d 474, 73 Cal.Rptr. 190.)

We will therefore consider the appeal properly before us on those two contentions.

MOTION TO SUPPRESS

The evidence which defendant seeks to suppress consisted of copies of bank records relating to personal and trust accounts maintained by the defendant; copies of checks on the defendant's account and cashier's checks issued to the defendant.

Defendant was arrested on September 19, 1974, after the complained of evidence had been discovered by a district attorney investigator.

On November 27, 1974, grand jury subpoenas duces tecum were issued to the banks for the originals of the materials previously acquired.

It is the defendant's position that the Supreme Court decision in Burrows v. Superior Court (1974) 13 Cal.3d 238, 118 Cal.Rptr. 166, 529 P.2d 590, renders the seizure of the evidence without a search warrant, and all the fruits thereof violative of his constitutional rights.3

In Burrows, a warrant was issued authorizing the search of the petitioner's office; a search of his office files was conducted and a number of documents taken. Thereafter, without further warrant, a detective contacted several banks in which the petitioner maintained accounts and secured photocopies of his financial statements. Burrows was subsequently charged with grand theft. He moved to suppress the evidence obtained without the warrant as well as other evidence. The motion was denied by the trial court. In reversing that decision, the court stated pages 242–243, 118 Cal.Rptr. page 168, 529 P.2d page 592:

‘Initially, we discuss the most significant and novel issue on this case: whether the police violated petitioner's rights under the California Constitution, article I, section 13, in obtaining, without benefit of legal process, copies of statements from a bank in which he maintained an account. We have held, consonant with Katz v. United States (1967) 389 U.S. 347, 350–352, 88 S.Ct. 507, 19 L.Ed.2d 576, 581–582, that, in determining whether an illegal search has occurred under the provisions of our Constitution, the appropriate test is whether a person has exhibited a reasonable expectation of privacy and, if so, whether that expectation has been violated by unreasonable governmental intrusion. (People v. Krivda (1971) 5 Cal.3d 357, 364, 96 Cal.Rptr. 62, 486 P.2d 1262; 8 Cal.3d 623–624, 105 Cal.Rptr. 521, 504 P.2d 457.)

‘It cannot be gainsaid that the customer of a bank expects that the documents, such as checks, which he transmits to the bank in the course of his business operations, will remain private, and that such an expectation is reasonable. The prosecution concedes as much, although it asserts that this expectation is not constitutionally cognizable. Representatives of several banks testified at the suppression hearing that information in their possession regarding a customer's account is deemed by them to be confidential.

‘In the present case, although the record establishes that copies of petitioner's bank statements rather then of his checks were provided to the officer, the distinction is not significant with relation to petitioner's expectation of privacy. That the bank alters the form in which it records the information transmitted to it by the depositor to show the receipt and disbursement of money on a bank statement does not diminish the depositor's anticipation of privacy in the matters which he confides to the bank. A bank customer's reasonable expectation is that, absent compulsion by legal process, the matters he reveals to the bank will be utilized by the bank only for internal banking purposes. Thus, we hold petitioner had a reasonable expectation that the bank would maintain the confidentiality of those papers which originated with him in check form and of the bank statements into which a record of those same checks had been transformed pursuant to internal bank practice.’ (Fn. omitted. Emphasis added.)

Continuing, the court 13 Cal.3d at page 245, 118 Cal.Rptr. at page 170, 529 P.2d at page 594 stated, ‘We hold that any bank statements or copies thereof obtained by the sheriff and prosecutor without the benefit of legal process were acquired as the result of an illegal search and seizure (Cal.Const., art. I, § 13), and that the trial court should have granted the motion to suppress such documents.’

The primary problem presented is whether or not the opinion in Burrows v. Superior Court, supra, was intended to apply retroactively. In the case before us, the bank records were obtained prior to December 2, 1974. The Burrows decision was filed December 27, 1974, and modified after denial of rehearing on March 12, 1975. (13 Cal.3d 238, 118 Cal.Rptr. 166, 529 P.2d 590). The court did not see fit to specify its prospective or retroactive application. Since we are called upon to do so, we are helped by the following from the Burrows opinion: ‘In view of [the] varying opinions, whether the seizure involved in the present case would withstand a constitutional challenge in the United States Supreme Court by a bank depositor on Fourth Amendment grounds is unresolved.’ (Fn. omitted.) (Id. at p. 247, 118 Cal.Rptr. at p. 171, 529 P.2d at 595.) The court also acknowledged in its initial decision that whether the police violated the petitioner's rights under the California Constitution was a significant but ‘novel issue.’ (Id. at p. 242, 118 Cal.Rptr. 166, 529 P.2d 590.)

In the absence of a direct declaration of retroactive or prospective application, the basic criteria guiding resolution of that question implicate the purpose to be served by the new standards, the extent of the reliance by law enforcement authorities on the old standard, and the effect on the administration of justice of a retroactive application of the new standards. (People v. Edwards (1969) 71 Cal.2d 1096, 1108, 80 Cal.Rptr. 633, 458 P.2d 713.) Each of the foregoing urgently requires prospectivity for Burrows. The court in Desist v. United States (1969) 394 U.S. 244, 249–250, 89 S.Ct. 1030, 22 L.Ed.2d 248, clearly determined that new rules (in that case as set forth in Katz v. United States (1967) 389 U.S. 347, 88 S.Ct. 507, 19 L.Ed.2d 576) apply only to cases in which the prosecution seeks to introduce the fruits of a search conducted after the effective date of the opinion. It was pointed out that the purpose of the rule requiring exclusion of evidence obtained by an unlawful search or seizure is to deter illegal police action, and that purpose would not be advanced by making the new rule retrospective; the police misconduct had already occurred and would not be corrected by releasing the prisoners involved and that the exclusionary rule is but a procedural rule that has no bearing upon guilt or the fairness of the trial. (See also Linkletter v. Walker (1965) 381 U.S. 618, 638, 85 S.Ct. 1731, 14 L.Ed.2d 601.) The court in Desist, supra, also concluded that reliance by law enforcement officials on the prior rule and the burden on the administration of justice flowing from a retroactive application militate strongly in favor of prospective application of the new rule.

The same is true here. ‘Both the deterrent purpose of the exclusionary rule and the reliance of law enforcement officers focus upon the time of the search, not any subsequent point in the prosecution, as the relevant date. Exclusion of . . . evidence seized before [the decision announcing a new rule] would increase the burden on the administration of justice, would overturn convictions based on fair reliance upon [the prior decision], and would not serve to deter similar searches and seizures in the future.’ (Desist v. United States, supra, 394 U.S. at p. 253, 89 S.Ct. at p. 1036.)

After consideration of Burrows and the applicable authorities as a predicate for prospective or retrospective application of new rules in confused novel or untouched areas, we conclude that the doctrines of Burrows must apply prospectively.

The Supreme Court in Burrows acknowledged that the challenge under California Constitution, article I, section 13, presented a novel question, and because of varying opinions existing, the question remained unresolved whether the seizure would or would not withstand a constitutional challenge in the United States Supreme Court. Under the totality of the circumstances considered, the defendant is not entitled to suppression of the evidence under Penal Code section 1538.5 upon the ground asserted. (People v. Warburton, supra, 7 Cal.App.3d at pp. 822–825, 86 Cal.Rptr. 894.)

MOTION TO WITHDRAW GUILTY PLEA

Following the indictment, defendant entered pleas of not guilty to each of the 15 counts. In January 31, 1975, Kaanehe withdrew his not guilty pleas and plead guilty to two of the counts of the indictment in return for the assurance of the court that the balance of the counts would be dismissed and that the court would invoke the provisions of section 1203.03 of the Penal Code and refer the defendant to the Department of Corrections for diagnostic study. Further, the defendant's understanding was that if the eventual sentence was to state prison, the two counts would run concurrently; and finally, that at the time of imposition of judgment and sentence, the People gave up their right to recommend or argue disposition of the case, reserving the right, however, to correct any factual inaccuracies contained in any reports or studies. The bargain was acknowledged by the defendant, the court, the prosecutor, and the public defender. After defendant's arraignment on his guilty plea, the deputy prosecutor acknowledged and joined in the change of plea and requested that the court take under submission his dismissal request of all the remaining counts. The court then referred the matter to the probation office for its report and recommendation. In February 24, 1975, defendant and his counsel were advised by the court that the probation report had been reviewed and in accord with the terms of the plea bargain, the defendant was referred to the Director of the Department of Corrections for a diagnostic study and recommendation.

On May 7, 1975, the defendant was returned to the trial court for disposition. The court advised the defendant that the court had received and read the probation report and had received and considered the Department of Corrections' diagnostic report. After the criminal proceedings were reinstituted, the defendant waived formal arraignment and the court inquired if there was any legal cause why judgment should not be pronounced. The following response was made:

‘MR. MIRABELL [Assistant Public Defender]: Yes, I believe there is, your Honor.

‘THE COURT: All right.

‘MR. MIRABELL: I would move the Court at this time for an order permitting Mr. Kaanehe to withdraw his plea of guilty heretofore entered, I believe in the month of January. If I might be permitted, the basis of the motion to withdraw the guilty pleas is based on Section 1018 of the Penal Code.

‘The grounds of the motion are as follows: A part of the negotiated plea in this case that was made a part of the record, was that the District Attorney would remain silent and not take any position with respect to ultimate judgment and sentence in this matter.

‘It's come to my attention that on the 18th of April, 1975, Gordon Bowley, acting on behalf of the District Attorney's Office, sent a letter to the Department of Corrections at Vacaville where my client was housed for the diagnostic study. And the thrust of the letter was to convince them to sentence him to State Prison. That, I feel, is a violation of the plea bargain where the District Attorney gave up his right to take a position.

‘Further, yesterday afternoon, approximately 4:00 o'clock, in this Court's chambers, Mr. Bowley again took the offensive as it were, and argued to this Court, and I think at length, and I think fairly eloquently, that my client ought to be sentenced to State Prison.

‘Those two instances of misconduct, I feel, are patent breaches of the District Attorney's obligation. That obligation to remain silent was a material inducement to my client to enter his pleas of guilty.

‘So, based on that code section, on the case of Santobello vs. New York, the case of People vs. Newton—I have cites for those cases if the Court wishes—I would ask the Court's permission to withdraw the pleas given.’

The record of the proceeding below discloses that on April 18, 1975, while the defendant was lodged in the Department of Corrections for diagnostic study, Supervising Deputy District Attorney Bowley transmitted a six-page letter to the Superintendent of the California Medical Facility summarizing his personal attitudes as to the nature of the offense, and its seriousness; the letter extended into other areas not charged in the indictment and for which some investigation had been concluded. (For emphasis, we set forth marginally, portions of that letter relating to the questions of violation of the plea bargain by the prosecutor's office.) The letter concludes, ‘Surely you will take the position of this office and Kaanehe's hundreds of victims into account in your evaluation and recommendation of sentence for this man.'4

A copy of that letter was filed with the clerk of the superior court on May 6, 1975, the day preceding sentencing. The court had the letter before it prior to sentencing and it can only be said that it constituted a strongly emotional argument to the court and Department of Corrections for imposition of a prison sentence. It is an obvious and calculated violation of the plea bargain. Whether the court considered the letter in determining the sentence to be imposed is not reflected in the limited reporter's transcript or the clerk's record on appeal. It appears, however, that the case lends itself to specific performance of the plea bargain under the procedures outlined in Santobello v. New York (1971) 404 U.S. 257, 263, 92 S.Ct. 495, 30 L.Ed.2d 427; People v. Johnson (1974) 10 Cal.3d 868, 873, 112 Cal.Rptr. 556, 519 P.2d 604; and People v. Newton (1974) 42 Cal.App.3d 292, 298–299, 116 Cal.Rptr. 690. In view of the record presented, the judgment is reversed with directions to the trial court to strike from the record the copy of the prosecutor's letter of April 18, 1975, addressed to the Superintendent of the California Medical Facility at Vacaville, and to thereafter reconsider the judgment and sentence without reference to the material or comments contained in the letter. At the time of sentencing, if the district attorney should again repudiate his commitment made in the plea bargain, the defendant shall be permitted to withdraw his plea of guilty and enter a new plea.

FOOTNOTES

1.  Penal Code section 1237.5 provides:‘No appeal shall be taken by defendant from a judgment of conviction upon a plea of guilty or nolo contendere, except where:‘(a) The defendant has filed with the trial court a written statement, executed under oath or penalty of perjury showing reasonable constitutional, jurisdictional, or other grounds going to the legality of the proceedings; and‘(b) The trial court has executed and filed a certificate of probable cause for such appeal with the county clerk.’

2.  California Rules of Court, rule 31, subdivision (d), provides:‘(d) [Guilty or nolo contendere plea] In cases in which a judgment of conviction was entered upon a plea of guilty or nolo contendere, the defendant shall file the statement required by Section 1237.5 of the Penal Code, which shall serve as a notice of appeal, within 60 days after the rendition of judgment, but the appeal shall not be operative unless the trial court executes and files the certificate of probable cause required by that section. Within 20 days after the defendant files his statement the trial court shall execute and file either a certificate of probable cause or an order denying such a certificate and shall forthwith notify the parties of the granting or denial of such certificate.‘If the appeal from a judgment of conviction entered upon a plea of guilty or nolo contendere is based solely upon grounds (1) occurring after entry of such plea which do not challenge the validity of the plea or (2) involving a search or seizure, the validity of which was contested pursuant to section 1538.5 of the Penal Code, the provisions of section 1237.5 of the Penal Code requiring a statement by the defendant and a certificate of probable cause by the trial court are inapplicable, but the appeal shall not be operative unless the notice of appeal states that it is based upon such grounds.‘The time for preparing, certifying and filing the record on appeal or for filing an agreed statement shall commence to run when the appeal becomes operative.’

3.  California Constitution, article I, section 13, provides in part: ‘The right of the people to be secure in their persons, houses, papers, and effects against unreasonable seizures and searches may not be violated; . . .’

4.  ‘COUNTY OF SACRAMENTO‘DISTRICT ATTORNEY‘Fraud Division‘816 H Street, Suite 202‘Sacramento, California 95814‘Telephone (916) 454–2471‘April 18, 1975‘Superintendent [sic]‘California Medical Facility‘Vacaville, California 95688‘Re PEOPLE VS. JAMES K. KAANEHE‘Dear Sir‘. . .‘I. THE INDICTMENT‘On December 2, 1974, a Grand Jury Indictment K. Kaanehe, alleging 10 counts of grand theft, four counts of petty theft with a prior conviction, and a single count of perjury.‘The first eight counts involved the taking of the personal property of eight individuals. All eight had purchased pre-need cemetery plots at Arlington Memorial Cemetery and each had been induced to do so by promises made by defendant, through his agents, that the cemetery would be property maintained. The maintenance was to be assured by an irrevocable trust fund which was set up for that purpose. Both the salesmen, and each contract, the form of which was prepared by Kaanehe, clearly designated approximately $26.00 per grave would be deposited into this trust fund.‘Arlington Sales Manager, Paul Dougherty, Secretary Rose Galyean, bookkeeper Alvin Brandt, and other former sales personnel stated that James K. Kaanehe had complete control over the cemetery operation. Kaanehe was the sole manager of the cemetery operations, including sales and development, the sole signator of the Arlington Commercial Account at United California Bank, the sole signator of the Arlington Maintenance Trust Fund kept at Security Pacific Bank, and had sole fiscal control over cemetery operations. The defendant, alone, was authorized to deposit, withdraw and to use money from the above accounts.‘It is crucial to note that all eight victims used in the indictment entered into the cemetery plot purchase contracts after June 18, 1971, the date of the last deposit by Kaanehe into this trust fund. Thus, for a period of nearly three years, the defendant continued to sell gravesites, making representations that funds were held in trust for the care and maintenance of the cemetery, when, in fact, these funds were not, and had not been, deposited into said trust fund. Defendant's failure to put any money into the care and maintenance trust fund for these years demonstrates that the defendant knowingly, intentionally and fraudulently induced these victims to enter into contracts that he could not honor. As the result of the defendant's conduct, the cemetery fell into a dismal state of disrepair. Weeds grew several feet high and many elderly plot owners were forced to cut down the vegetation in order just to find the gravesites of their loved ones.‘The two additional counts of Grand Theft, Counts 9 and 10, involve the taking of income earned by the Care and Maintenance Trust Fund. The Security Pacific Bank records show that on March 28, 1974, a check in the amount of $716.51 was issued to Arlington Memorial Cemetery as income from the trust account and on July 17, 1974, and income check in the amount of $205.07 was similarly issued. Pursuant to the trust agreement between Arlington Memorial Cemetery and Security Pacific Bank, signed by Kaanehe, the income from the trust account was to be used only for the care and maintenance of Arlington Memorial Cemetery. However, both checks were endorsed by defendant James K. Kaanehe and were used to make payments to Swift Leasing Company on the defendant's personal automobile. Swift Dodge Leasing Manager McKechnie testified at the Grand Jury proceeding that the $205.07 check was applied to defendant's automobile and on April 2, 1974, $224 of the $716.51 check was so applied, Swift Dodge issuing a check to the defendant for the remaining balance of $492.51. The Swift Dodge check was endorsed and the proceeds kept, by James K. Kaanehe. Thus, not only did the defendant fail to deposit funds into the Trust Fund, but he also misappropriated income derived from that Trust Fund.‘. . .‘Before the commission of the offenses set forth above in Counts 11 through 14, defendant James K. Kaanehe was convicted of mail fraud in violation of Section 1341 of the United States Code, a felony, and he was sentenced to a prison commitment of five years. Kaanehe's mail fraud offense involved a scheme whereby in response to defendant's advertisements, people would send to the defendant $5 for the purchase of the Statehood of Honolulu Advertiser. In his advertisement, the defendant promised to deliver the statehood edition, but he accepted the money without delivering the product, conduct strikingly similar to defendant's failure to deliver gravemarkers.‘. . .‘II. COMMENT ON PROBATION REPORT‘This office vehemently disagrees with Deputy Probation Officer Dale Swenson's conclusion in his report filed February 24, 1975, that the demise of Arlington Memorial Cemetery and the misfortune of hundreds of innocent creditors and plot owners were attributable solely to the defendant's poor business judgment. The probation report treats defendant's failure to deposit money into the general care Trust Fund as an act of neglect arising from the defendant's overeagerness to build his dream cemetery, however, part I of this letter demonstrates that these acts, rather than being negligent, were intentional and willfully fraudulent.‘It is also the impression of Deputy Probation Officer Swenson that the defendant has spent much of his own money on the cemetery operation and had made many improvements to the cemetery grounds through the years. Quite the contrary is true. The defendant borrowed hundreds of thousands of dollars to purchase this cemetery, to allegedly improve the cemetery grounds, and to pay its taxes. As of the date of this arrest, he had never repaid any of these loans made to him by his friends, business associates, creditors and his employees. Therefore, it can hardly be asserted that the defendant spent his own money, since all this money was borrowed.‘In the evaluation portion of the probation report, Swenson concludes that although the defendant misused money that he was legally bound to place in a trust fund of the cemetery, his obsession to build a cemetery should excuse him from his conduct. At this point, it is crucial to realize that the probation report does not put into perspective the impact defendant's acts had on this community.‘III. IMPACT OF DEFENDANT'S CONDUCT ON THE COMMUNITY‘Most of defendant's victims are retired persons, trying to maintain themselves on their fixed incomes. They are the elderly, attempting to spare their children the pain and expense of securing cemetery plots for them at the time of their death. All have expressed great distress over the necessity of making other burial arrangements, because they simply cannot afford the additional financial burden. For example, Mrs. May, a women in her seventies, came out of retirement to work in order to pay for her former husband's cemetery plot at Arlington. Now Arlington is over grown and closed, yet she is in such poor health that she can no longer work, and thus, cannot move her husband nor afford to buy a plot for herself in another cemetery. She did not even have the strength to climb the stairs to be interviewed by the investigators in this office.‘. . .‘The above are only an insignificant few examples of over 300 complaints, received by this office and the State Attorney General's Office, and the over 500 victims who attended a recent plot owner's meeting called by both offices. The severe financial distress related by these victims is only a small part of over $1,000,000 involved in this case.’

EVANS, Associate Justice.

REGAN, Acting P. J., concurs. JANES, J., concurs in the result.

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