PEOPLE v. GULAYA (1997)

OPINION

Defendant was convicted of one count of unlawful fee splitting (accepting an offer to give rebates for patient referrals) in violation of Business and Professions Code section 650 (all further statutory references are to the Business and Professions Code unless otherwise indicated).   He appeals, claiming there was insufficient evidence to support the verdict, the court erred in instructing the jury that violation of section 650 is a general intent crime, and the court failed to give a further instruction defining one of the terms used in that section.   We agree the crime is one of specific intent and therefore reverse.

FACTS

In January 1993, a letter was sent to defendant Sunil Gulaya, a licensed doctor with a medical facility in Santa Ana. The letter stated it was from the Law Office of Charles Bell, who was seeking the support and cooperation of the medical community.   In fact, the letter was sent by a fictitious law firm set up by the Orange County District Attorney's Office to target fraudulent practices in the medical community.

Investigator Frank Lopez, posing as Frank Rios, the “administrator” of the fictitious law firm, called defendant to meet with him.   The meeting, which lasted approximately 20 minutes, took place in Lopez's office and was recorded on videotape.   This recording was shown to the jury.

During the conversation, Lopez asked defendant what, if anything, could the attorney expect back for referrals.   Defendant stated he was having cash flow problems and did not want to pay up front.   Lopez stated the attorney did not expect anything up front since they had not done business before.   Lopez and defendant then discussed that, if Lopez referred clients to defendant, the law office would get 25 percent back for the referral once the case was settled.   Lopez and defendant also discussed revising the referral fee percentage based upon the number of patients referred by Lopez.   Lopez testified a referral fee, or a “kick back,” is payment for the referral of a patient.

The jury was instructed that the crime of unlawful fee splitting was a general intent crime:  “In the crime charged namely, Unlawful Referrals and Rebates for Patient Referrals, there must exist a union or joint operation of act or conduct and general criminal intent.   To constitute general criminal intent it is not necessary that there should exist an intent to violate the law.   When a person intentionally does that which the law declares to be a crime, he is acting with general criminal intent, even though he may not know that his act or conduct is unlawful.”   The court defined the crime:  “The offer, delivery, receipt or acceptance, by a physician of any rebate, refund, commission, preference, patronage dividend, discount, or other consideration, whether in the form of money or otherwise, as compensation or inducement for referring patients, clients or customers to any person, is guilty of a violation of section 650 of the Business and Professions Code, a crime.  [¶] In order to prove such a crime, each of the following elements must be proved:  1. An offer, delivery, receipt or acceptance 2. by a physician 3. of consideration to any person 4. as compensation or inducement for 5. referral of patients, clients or customers.”

During deliberations, the jury asked two questions.   The first question had to do with the elements which the prosecution had to prove.  “Does the word ‘acceptance’ refer to acceptance of the offer or acceptance of remuneration?”   The court responded “The definition of 650 B & P and the elements listed should be viewed as follows:  (1) This section is in the disjunctive.   So it reads:  ‘offer (or) delivery (or) receipt (or) acceptance.’   If you find any one or more of these as proven, then move on to # 2 & so on.   Note:  Actual exchange of money or anything else of value is not an element of the crime.”

The jury also asked:  “[I]s [it] a crime in this case for [defendant] to accept an offer made by Mr. Lopez[?]  If Mr. Lopez made an offer and [defendant] accepts it, is that a crime[?]”  The judge responded:  “Yes-if you find beyond a reasonable doubt that this has been proved.”   The jury returned a guilty verdict and defendant was placed on probation which was suspended during the appeal.

DISCUSSION

Defendant argues that the “offer” of a rebate “as compensation or inducement for referring patients,” requires a specific intent, namely that defendant intends to go through with the crime.   He therefore contends the court erred in giving a general intent instruction.   We agree.

People v. Hood (1969) 1 Cal.3d 444, 82 Cal.Rptr. 618, 462 P.2d 370 discussed the distinction between specific and general intent crimes.   “Specific and general intent have been notoriously difficult terms to define and apply, and a number of text writers recommend that they be abandoned all together.  [Citations.]   Too often the characterization of a particular crime․ is determined solely by the presence or absence of words describing the psychological phenomenon-‘intent’ or ‘malice,’ for example-in the statutory language defining the crime.   When the definition of a crime consists of only the description of a particular act, without reference to intent to do a further act or achieve a future consequence, we ask whether the defendant intended to do the proscribed act.   This intention is deemed to be a general criminal intent.   When the definition refers to defendant's intent to do some further act or achieve some additional consequence, the crime is deemed to be one of specific intent.   There is no real difference, however, only a linguistic one, between an intent to do an act already performed and an intent to do that same act in the future.”  (Id. at pp. 456-457, 82 Cal.Rptr. 618, 462 P.2d 370.)

An example of a specific intent crime is the crime of solicitation.   Under Penal Code section 653f, subdivision (a), “[e]very person who, with the intent that the crime be committed, solicits another to offer, accept or join in the offer or acceptance of a bribe ․ shall be punished․”   The crime of solicitation is a specific intent crime, the specific intent being that the crime solicited be committed.  (CALJIC Appendix D, p. 361;  1 Witkin & Epstein, California Criminal Law (2d ed.   1988) Elements of Crime, § 101, p. 120-122.)

In People v. Norris (1978) 88 Cal.App.3d Supp. 32, 152 Cal.Rptr. 134 the court distinguished between the crimes of solicitation of an act of prostitution and the act of prostitution.   The court noted that the crime of solicitation is a specific intent crime since it necessarily involves the specific intent to “engage in prostitution.”  (Id. at p. 38, 152 Cal.Rptr. 134.)   On the other hand, the crime of prostitution is a general intent crime since engaging in the act is the crime itself.  (Id. at p. 37, 152 Cal.Rptr. 134.)

 Here, section 650 states in pertinent part “[T]he offer, ․ by any person licensed under this division of any rebate, ․ as compensation or inducement for referring patients, ․ is unlawful.”   The jury was instructed the crime was a general intent crime.   The literal language of section 650 makes it a crime to offer a rebate, i.e., if so interpreted, the mere utterance of the words regardless of the speaker's mental state, would constitute the offense.   Such an interpretation, however, would lead to the absurd conclusion that if a physician uttered such words as part of a theatrical performance or as a joke, he or she would be in violation of the law.   This cannot have been the Legislature's intent nor would such an interpretation square with the First Amendment.   The Legislature must have intended a specific mental state:  that the words be uttered with the intent to actually commit the act of paying a rebate.

Relying on People v. Lyons (1991) 235 Cal.App.3d 1456, 1 Cal.Rptr.2d 763, the prosecution argues that, even if a specific intent instruction should have been given, the error was harmless.   In Lyons, defendant, charged with robbery, was also charged with attempting to knowingly and maliciously dissuade a victim from testifying against him by threat of force or violence in violation of Penal Code section 136.1, subdivision (a)(1).   A general intent instruction was given and the court ruled it was error not to give a specific intent instruction.  (Id. at p. 1462, 1 Cal.Rptr.2d 763.)   The court concluded, however, the error was harmless finding that under the instruction defining the crime, the jury must necessarily have decided the defendant had the specific intent to prevent the victim from testifying.  (Id. at pp. 1462-1463, 1 Cal.Rptr.2d 763.)

 Here, particularly in the light of the jury's questions, the error was not harmless.   The prosecution must establish the defendant intended to follow through on his offer of a rebate.   While it is true the defendant did not have to actually exchange money in order to be guilty of the crime, the prosecution was nonetheless responsible for proving defendant intended to actually pay the kick back.   To hold otherwise would make it a crime if the defendant merely indicated assent to the proposal without any intention of following through with the agreement.

Our ruling obviates the necessity of addressing defendant's remaining arguments.   The judgment is reversed.

RYLAARSDAM, Associate Justice.

SONENSHINE, Acting P.J., and BEDSWORTH, J., concur.