Caseflicks

California Court of Appeal • 1994

People v. Stark

26 Cal. App. 4th 1179 | 31 Cal. Rptr. 2d 887 | 94 Cal. Daily Op. Serv. 5515 | 94 Daily Journal DAR 10061 | 1994 Cal. App. LEXIS 743

Full access

Unlock the video and quiz

The written brief is free to read below. Subscribe to watch the video explainer and take the quiz.

Create an account Log in

Takeaway

In short, this case holds that diverting construction funds is a general-intent crime: the prosecution must prove an intentional wrongful diversion that causes nonpayment or noncompletion, not an intent to cause those consequences.

Background

Doctors Steven Johnson and Douglas Martin hired defendant, doing business as Stark Construction, to build a medical facility for roughly $350,000. The doctors obtained a construction loan and made progress payments to defendant, who was expected to use those funds to pay subcontractors and material suppliers working on the project.

By mid-February 1990, defendant had received about $245,000 from the first three loan draws. Subcontractors and suppliers then told the doctors they had not been paid. Defendant eventually admitted that, because he faced financial problems on other jobs, he had used money from the medical-building project to cover expenses on those jobs. He said he intended to repay the money as the other projects progressed. The doctors estimated the diversion cost them about $46,000.

A jury convicted defendant of willful diversion of construction funds under Penal Code section 484b and found that the taking exceeded $25,000. The trial court suspended imposition of sentence and placed him on five years' probation. Defendant appealed, arguing that section 484b is a specific-intent crime and that the court therefore erred by instructing the jury that only general criminal intent was required.

Issues

Issue #1

Whether Penal Code section 484b, which criminalizes the willful wrongful diversion of construction funds that causes a failure to complete work or pay project-related laborers and suppliers, defines a specific-intent offense.

Holding

No. Penal Code section 484b is a general-intent crime, so the trial court correctly instructed the jury that defendant needed only the intent to commit the wrongful diversion.

Reasoning

The court applied the general distinction between general and specific intent. A crime has general intent when its definition describes a prohibited act and requires that the defendant intend to do that act. It has specific intent when the statute additionally requires an intent to perform a further act or bring about a future consequence.

Section 484b identifies one operative prohibited act: wrongfully diverting money received for construction-related services, labor, materials, or equipment. A wrongful diversion means using those funds for something other than bona fide costs of the project for which the money was received. Defendant admitted that he used the medical-project funds to cover expenses from other jobs.

The statute does require that the diversion result in a failure to complete the improvement or, as occurred here, a failure to pay subcontractors or suppliers. But that causal requirement does not add a specific-intent element. The offense is complete when the wrongful diversion causes one of those failures; it does not matter whether the defendant intended or wanted the project to remain incomplete or the suppliers to go unpaid.

Accordingly, defendant's asserted intention to repay the diverted money did not negate the required mental state. The relevant intent was his intent to divert the funds from their designated construction purpose, not an intent to cause nonpayment or noncompletion.

Issue #2

Whether People v. Dollar required treating a violation of Penal Code section 484b as a specific-intent crime.

Holding

No. Dollar involved a statute that expressly required an additional intent to cause fear, unlike section 484b.

Reasoning

In Dollar, the statute criminalizing certain threats defined a credible threat as one made with the intent and apparent ability to carry it out in a way that would cause the target reasonably to fear for personal or family safety. The threat itself was the prohibited act, while the intent to cause fear was an additional intended consequence. That statutory structure made the offense one of specific intent.

Section 484b has no comparable requirement that the defendant intend a further consequence. It requires a wrongful diversion and a resulting failure to complete or pay, but not an intent to produce that failure. Dollar therefore did not support defendant's proposed instruction or establish error in the instruction the trial court gave.