HOUSING AUTHORITY FOR THE CITY OF LOS ANGELES v. ESTELA PATRICIA BENITEZ MORALES (2010)

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

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The Housing Authority of the City of Los Angeles (HACLA) filed an action against Estela Patricia Benitez-Morales (Benitez) and her husband Arturo Porron-Villasana (Porron) for funds expended by HACLA under the Section 8 housing assistance program.¹  After a bench trial, the court granted Porron's motion for nonsuit and entered judgment against Benitez for $186,399.   We reverse the order granting nonsuit and remand with directions for further proceedings in the action between HACLA and Porron.   We affirm the judgment against Benitez.

FACTS

The trial court entered a statement of decision that is detailed and complete.  “ ‘An appellate court will not disturb the implied findings of fact made by a trial court in support of an order, any more than it will interfere with express findings upon which a final judgment is predicated.’ ”   (Griffith Co. v. San Diego College for Women (1955) 45 Cal.2d 501, 507.)   Neither Benitez nor Porron contend that the statement of decision is not supported by substantial evidence.²  Accordingly, we turn to the statement of decision for the facts of this case.

In October 1997, Benitez and Porron stated on separate occasions that they were not living together.   In the same month, Benitez represented to HACLA that Porron was paying her child support of $400 per month.   A lease agreement dated July 29, 1998, for premises located at 1021 Harbor Village Drive, Unit D, Harbor City, California (hereafter the premises) provided that only Benitez and her two children were living on the premises.   Based on the representations that Benitez and Porron were not living together and that Benitez was receiving $400 child support paid by Porron, HACLA approved and authorized Benitez for Section 8 housing assistance.   For the purposes of HACLA's case against Porron, it is significant that the trial court found that Porron certified under penalty of perjury on April 15, 1999, that he was paying $400 monthly child support.

The trial court found that on five separate occasions between 1999 and 2003 Benitez received written notice that she had to keep HACLA informed of the persons who were living with her on the premises and of the source and the amount of her income.   On five separate occasions between April 14, 1999, and March 12, 2004, Benitez certified to HACLA that only she and her children were living on the premises.³

HACLA received an anonymous tip on August 25, 2004, that Porron and another man were living with Benitez on the premises.   HACLA promptly sent Benitez a notice of its intent to terminate assistance.   On September 24, 2004, before HACLA could commence to investigate the matter, Benitez withdrew from the Section 8 housing program.

The evidence is massive that Porron was actually living on the premises throughout the entire period that Section 8 housing assistance payments were made.   Porron represented in a residential loan application in 2005 that for the past five years he had been living on the premises.   In April 2001, Porron certified to the Immigration and Naturalization Service (INS) that he had been living on the premises since July 1, 1998.   The INS sent Porron mail addressed to the premises throughout 2001 and 2002.   In 2001, Porron gave the premise's address on a registration form filed with the Department of Motor Vehicles.   There were other documents not necessary to detail here that reflected Benitez's and Porron's representations that both of them were living on the premises.

The trial court found as a fact that Porron resided on the premises between July 1, 1998, and October 1, 2004, which was the period of time during which HACLA paid Section 8 housing assistance for the rental of the premises.

The trial court concluded that Benitez had deliberately misrepresented to HACLA that she was living alone with her children and that she had knowingly concealed that Porron was living with her.   The court found that Benitez did not qualify for Section 8 housing assistance because Porron lived on the premises, i.e., that based “upon Benitez's knowing and deliberate misrepresentations that Arturo Porron did not live or reside with her, Benitez qualified for and received Section 8 rental-subsidy payments.”

The trial court specifically found that Benitez was not a credible witness.

The trial court found that HACLA had sustained $62,133 in damages and, pursuant to the provisions of Government Code section 12651, subdivision (a), trebled those damages because Benitez had presented a fraudulent claim for payment.

DISCUSSION

1. The Order Granting the Motion for Judgment Is Reversed

The court granted nonsuit in favor of Porron at the conclusion of HACLA's case-in-chief on July 10, 2009;  the statement of decision was filed on October 27, 2009.

We note preliminarily that in a trial to the court there is no nonsuit but rather a motion for judgment under Code of Civil Procedure section 631.8.   Under this statute, the trial court is empowered to weigh the evidence and also may consider all of the evidence (Miller v. Dussault (1972) 26 Cal.App.3d 311, 317);  these two features distinguish the motion for judgment from nonsuit.   In an appeal from an order granting a motion for judgment, the substantial evidence rule governs.  (Rodriguez v. North American Rockwell Corp. (1972) 28 Cal.App.3d 441, 447.)   We will refer to the motion that the court granted as a motion for judgment.

In granting the motion for judgment, the court stated that no one had testified that Porron lived on the premises.   As we explain below, this reflected an incorrect perception of the case against Porron.   In any event, HACLA is correct when it states in its opening brief that the argument on the nonsuit motion was brief;  we are constrained to add that the argument was not very illuminating.   We note this as a circumstance that tends to explain the error in the court's ruling.

The case against Porron was that he had conspired with, and assisted, Benitez in misleading HACLA.   Specifically, Porron had made a written statement under penalty of perjury, submitted to HACLA, that the support he paid Benitez was $400 a month.   Because her income was central in establishing Benitez's eligibility for Section 8 housing assistance, Porron's declaration played a key role in perpetrating the fraud.   As far as the case against Porron was concerned, HACLA's first cause of action, based on California's False Claims Act (Gov.Code, § 12650 et seq.), as well as the cause of action for conspiracy to commit fraud, were in large part based on Porron's fraudulent representation that he was paying $400 in child support.   In fact, as he was living with Benitez on the premises as man and wife with children, the support that he was furnishing was substantially in excess of $400 per month;  at the very least, this is a reasonable inference.   In sum, Porron was an integral part, i.e., a coconspirator in the fraudulent scheme.   While there are additional causes of action for fraud, fraudulent concealment and unjust enrichment, the essence of the case against Porron is as we have stated it.

The fundamental error in the trial court's ruling was that it was based on the misconception that there had to be direct testimony to the effect that Porron was living on the premises.   Not only could this fact be shown by documents, it is also true that Porron's complicity in the scheme extended to his perjurious declaration that he was giving only $400 in child support.   In addition, as we have noted, there were a number of documents that showed that Porron was living on the premises between July 1998 and October 2004.   There was therefore ample direct and circumstantial evidence that Porron lived on the premises;  the trial court was simply mistaken in concluding that there had to be direct testimony on this subject.

It is also true that the court's order granting the motion for judgment conflicted with its statement of decision.   The latter found as a fact that Porron lived on the premises between July 1, 1998, and October 1, 2004.   In other words, after the court reviewed and considered all of the evidence, it concluded that Porron lived on the premises during the indicated time period.

We do not agree with Porron that, in granting the motion for judgment, the trial court “painstakingly evaluated the evidence.”   The entire argument on this motion takes up a little more than eight pages in the reporter's transcript and there is only passing mention of two or three exhibits and no mention at all of the critical facts, i.e., Porron's April 1999 declaration and documents that convincingly showed that he was living on the premises between 1998 and 2004.

We also disagree with Porron that there was no evidence of an agreement between Porron and Benitez to defraud HACLA.   On the contrary, there is direct evidence of a brazen and successful scheme to defraud HACLA.   Porron was directly instrumental in persuading HACLA that Benitez's income qualified her for Section 8 housing assistance.

In short, in this case we have a husband and wife team that perpetrated a substantial fraud on a public agency for over five years and stole public funds that could have gone to persons in actual need.

2. The Judgment Against Benitez Is Supported by Substantial Evidence

Benitez's contention that the judgment against her is not supported by substantial evidence is particularly unpersuasive.   She claims that the documents admitted into evidence do “not affirmatively prove that Porron was living [on the premises] at the time she received benefits from HACLA.”   Benitez points to her own testimony at trial that Porron did not live on the premises and she states “no eyewitnesses and nobody ․ could say that Porron lived with Benitez.”

We begin with the fact that Benitez is not free to ignore the statement of decision.  “Where statement of decision sets forth the factual and legal basis for the decision, any conflict in the evidence or reasonable inferences to be drawn from the facts will be resolved in support of the determination of the trial court decision.”  (In re Marriage of Hoffmeister (1987) 191 Cal.App.3d 351, 358.)   Even if one was to credit Benitez's testimony and declarations, all conflicts are to be resolved in favor of the trial court's determination, which was that Porron was living on the premises between July 1998 and October 2004.

Benitez is also mistaken in claiming that documents such as the INS certificate stating that Porron was living on the premises “was not ․ affirmative [sic ] evidence.”   Assuming that she means to say that such documentary evidence is not direct evidence,⁴ she is wrong as this document directly proves where Porron resided without having to resort to drawing an inference.⁵

We find it astounding that Benitez claims in her brief that “there is no affirmative evidence that Porron was living [on the premises].”   As only one of several items of evidence, there is his certificate filed with the INS that he was living on the premises since July 1, 1998.

Benitez's attempts to reargue the evidence do not amount to an effective challenge to the sufficiency of the evidence to support the judgment.   As we have noted, Benitez does not claim that any of the factual findings in the statement of decision are not supported by substantial evidence.   Absent any effective challenge to the substance of the statement of decision, and based on our own review of the record, we are satisfied that the statement of decision effectively and fairly resolves all pertinent questions of fact and law.

DISPOSITION

The order granting the motion for judgment is reversed.   The case against Arturo Porron-Villasana is remanded with directions to complete the trial against Porron.   The judgment against Estela Patricia Benitez-Morales is affirmed.   The Housing Authority for the City of Los Angeles is to recover its costs on appeal.

We concur:

RUBIN, Acting P.J. O'CONNELL, J.*

FOOTNOTES

FN1. This is a reference to the United States Housing Act of 1937, which now appears at title 42 United States Code section 1437f.  (Sabi v. Sterling (2010) 183 Cal.App.4th 916, 922.).  FN1. This is a reference to the United States Housing Act of 1937, which now appears at title 42 United States Code section 1437f.  (Sabi v. Sterling (2010) 183 Cal.App.4th 916, 922.)

FN2. The factual findings of the statement of decision must be supported by substantial evidence.  (Rosenblit v. Superior Court (1991) 231 Cal.App.3d 1434, 1443;  see generally 4 Cal.Jur.3d (2007) § 320, pp. 471-472.).  FN2. The factual findings of the statement of decision must be supported by substantial evidence.  (Rosenblit v. Superior Court (1991) 231 Cal.App.3d 1434, 1443;  see generally 4 Cal.Jur.3d (2007) § 320, pp. 471-472.)

FN3. The number of children went from two to three in her final report to HACLA on March 12, 2004..  FN3. The number of children went from two to three in her final report to HACLA on March 12, 2004.

FN4. There is no such thing as “affirmative” evidence..  FN4. There is no such thing as “affirmative” evidence.

FN5. “As used in this chapter, ‘direct evidence’ means evidence that directly proves a fact, without an inference or presumption, and which in itself, if true, conclusively establishes that fact.”  (Evid.Code, § 410.).  FN5. “As used in this chapter, ‘direct evidence’ means evidence that directly proves a fact, without an inference or presumption, and which in itself, if true, conclusively establishes that fact.”  (Evid.Code, § 410.)

FLIER, J.