Filed 6/24/14 P. v. Waterman CA4/3

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or or dered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FOURTH APPELLATE DISTRICT

DIVISION THREE

THE PEOPLE, Plaintiff and Respondent,

v. MARYBETH WATERMAN, Defendant and Appellant. G049909 (Super. Ct. No. RIF10005797)

O P I N I O N

Appeal from a judgment of the Superior Court of Riversid e County, Gary B. Tranbarger, Judge. Judgment a ffirmed.

Richard L. Fitzer, under appointment by the Court of Appeal , for Defendant and Appellant.

Kamala D. Harris, Attorney General, Dane R. Gillette, Chief Assistant Attorney General, Julie L. Garland, Assis tant Attorney General, Charles C. Ragland and Kimberley A. Donohue, Deputy Attorneys General, for Plaintiff and Respondent.
* * *2 A jury convicted defendant Marybeth Waterman of three counts of grand theft (Pen. Code, § 487 , subd. (a) ; counts 1, 3, and 5) 1 a nd three counts of diversion of
construction funds (§ 484b; counts 2, 4, and 6). The jury found true the allegations
defendant took over $200,000 (§ 12022.6, subd. (a)(2)) as t o counts 1, 2, 3, 4, and 6, a nd over $65,000 (§ 12022.6, subd. (a)(1)) as t o co unts 2, 4, 5, and 6, and that she committed multiple felonies involv ing th e taking of over $500,000 (§ 186.11, subd. (a)(2)) as t o all

counts. The court sentenced her to six years eight months in prison.

On appeal defendant contends the court violated h e r constitutional rights to a fair trial and to present a defense when it excluded an expert ’ s opinion that her conduct was legal based on generally accepted business practices in the interior design industry. She also contends the prosecutor improperly commented in his closing argument on her right not to testify. We disagree with both contentions and affirm the judgment.

FACTS

Defendant is an interior designer who owne d an interior design company in Rancho Mirage named Studio Waterman

. In 2006, Stu dio Waterman ha d cash flow problems. I t lost its $250,000 line of credit a nd could not obtain a new line of credit from any other bank. D efendant made deci sions about which client purchase orders would be
fulfilled from the available funds

.

By February or March of 2007, Studio Waterman h a d $700,000 to $800,000 in unfunded liabilities and lacked sufficien t funds to finish its current jobs. Its

accountant suggested defendant move to a less expensive office building, cut down staff ,

or find new clients. Defendant refused.

1 All statutory references are to the Penal Code.3 The company ’ s financial condition worsened. Its accountant gave defendant monthly reports on the company ’ s financial condition, including the outstanding balances on clients ’ accounts.

At th is point , Studio Waterman had only three or four clients , including the Pharrises (Gerald and Lynn), the Berlins (James and Madeline), and the Wiltzes ( James
and Jane ). Studio Waterman used m u ch of the mo n ey paid by these clients to pay the
company ’ s operating expenses , t o adva n ce other clients ’ pr ojects , to pay defendant , or to
pay credit card charges f

or personal e xpenses , such as “ high end women ’ s clothing and accessories, payments to a plastic surgeon, hair salon and spa treatment charges, entertainment, travel at very high end

. . . first class hotels, limousines, and international
travel. ” Between 2006 and 2009, Studio Waterman paid defendant around $640,000.

The Pharr is ses

I n 2006, the Pharrises hired defendant to provide interior design services for a house they were building in Indian Wel ls

. T he contract required the Pharris es to
pay defendant (1) the wholesale cost o f furniture and fixtures listed in l etter s of e stimate, and (2) a 35 percent markup as defendant ’ s design fee

. Of thi s, t he Pharris es were to pay defendant a n upfront deposi t equal t o 20 percent of the total amount of a ny l etter of

e stimate. Between June 2008 and July 2009, t he Pharris es paid defendant almost $1.3
million. Defendant and one of her employee s falsely clai med to have ordered all the
items for which the Pharris es had paid.

In August 2009, the Pharrises learned from their gener a l contractor that
defendant had not ordered the cabinet s f or their house . The Pharrises tried to contact
defendant by cell phone , land line, and e

- mail . About two weeks later, she final ly answered the phone. In a meeting on August 24, 2009 , defendant told the Pharrises that her business had started declining right when the Pharrises started making their major payments to her, that she had commingled the i r payments with her company accou nts,4

and that their money was gone and had been used to pay for other people ’ s furniture. Defendant said she was out of money, she had let her staff go, and she was paying her
overhead with her clients ’ money. Gerald Pharris accuse d defendant of committ i ng fraud
and she agreed. She offered to give the Pharrises some money she had received from
other clients for her design fees , but Gerald Pharris refused to accept it. He reported defendant to the authorities because he did not want defendant to do this to anyone else. The total loss suffered by the Pharrises was about $1.1 million.

The Berlins In 2006, the Berlins hired defendant to provide interior design service s for a New York City apartment th ey were renovating. Pursuant to a l etter of e stimate, t hey paid defendant deposits f o r items she purportedly ordered for them at her wholesale cost,
as well as defendant ’ s design fee equal to a 35 percent markup

. They a l so pai d h e r travel
expenses. In July 2009, a sub contractor informed the Berlins that progress on the apartment h a d st all ed because defendant f a iled to deliver all the wall paper the Berlins
had ordered . An employee of defendant e

- mailed the Berlins that the wall paper would be shipped out. In August 2009, defendant claimed to be on vacation and in a “ no cell

zone, ” and also that she had visited the apartment and it was not in a ready condition for the wall paper.

On August 18, 2009, James Berlin e

- mailed defendant that the Berlins would proceed to take necessary action. The next day, defendant phoned him and acknowledged she had not ordered all the items she had cl ai me d t o. She said “ her business had been bad and she had used the money for other t hings and that she was hoping that the next project would provide money for this project, but there was no next project. ” The Berl ins suffered a loss of around $600,000 to $650,000.5

The Wiltzes In the spring of 2007, the Wiltzes hired defendant to provide interior design services for a house they were building in Indian Wells. Pursuant to a l etter of e stimate, the Wiltzes paid defendant deposits for items she purportedly ordered for them, as wel l as
h e r service charge equal to a 35 percent markup. In August 2009, defendant tol d them she did not have the money to pay the balance owing to vendors for some items for which the Wiltzes had already paid, and that they would need to pay the vendors dir ectly. Defendant said she had lost a line of credit and was having financial difficulties. The Wiltzes suffered a loss of around $300,000.

Defense
A forensic accountant testified that Studio Waterman ’ s books and records showed that some money was paid to defendant (or paid toward her credit card charges for personal expenses) to repay her for a r ou nd $780,000 in loans she had made to the company in 2004 and 2005. The company repaid defendant in full for those loans by May 31, 2008. Studio Waterman owes the Pharrises, the Berlins, and the Wiltzes about $1.7 million. Character witnesses opined that defendant is honest , trustworthy, and
honorable.

DISCUSSION

The Court Did Not Abuse Its Discretio n b y Excluding Certain Expert Testimony

Defendant contends the court abused its discretion by exclud i n g evidence she acted within acceptable industry norms and lacked the specific intent required for grand theft. She a rgue s the court thereby violated her due process right to a fair trial and her right to present a defense.6 Prior to trial, the People moved for a court ruling that “ [e]vidence relating to the common practice in the interior design or construction industry is not relevant and should not [be] admitted into evidence. ” At a pretria l hearing , the court and counsel for both parties placed on the record some issues they had discussed in chambers. T he prosecutor stated, “ Then I believe we also discussed evidence relating to the defense bringing in an expert in the interior design industry would not be admitted and not be relevant as to the practices. ” The court stated, “ That ’ s overbroad. Generally speaking,
that is correct. But I didn ’ t exclude all possibility of someone experienced in the industry giving the jury some useful in formation. What we discussed was whether or not that person could at all give an expert opinion about the legality of certain activity, whether or not it was legal or not legal, and that it is certainly going to become clear to the jury and everyone in th is trial that defense is not a defense, and if it ’ s simply being presented in
furtherance of that kind of defense it won ’ t be permitted. ” The prosecutor replied,

“ Okay, ” thereby acknowledging he understood the court ’ s ruling.

The court did not abu s e its discretion by excluding expert testimony o n the legality of defendant ’ s conduct

. ( People v. McDowell (2012) 54 Cal.4th 395, 426 [court ’ s decision on admissibility of expert testimony reviewed for abuse of discretion].) Expert opinion on a question of law is in admissi ble ( Summers v. A.L. Gilbert Co. (1999) 69 Cal.App.4th 1155, 1178) , as is e xpert opinion that “ invades the province of the jury to
decide a case ” and “ ‘“ amounts to no more than an expression of his general belief as to
how the case should be d ecided

. . . . ” ’” ( Piscitelli v. Friedenberg (2001) 87 Cal.App.4th 953, 972 ; see also People v. Coffman and Marlow (2004) 34 Cal.4th 1, 82 )

.

D efendant contend s her trial counsel reasonably misunderstood the court ’ s ruling . Sh e asserts that, r egardless of ho w the court ’ s order is “ characterized, ” “ defense counsel never called an industry expert to testify as to common industry accounting, fulfillment and banking practices because he, like everyone other than [plaintiff] , reasonably understood t he court ’ s ruling as prohibiting him from doing so. ” But the7

court and the prosecutor understood the ruling . Apparently, only d efense counsel was

c on fuse d

. Defendant cit es no support in the record (or any other support) for his assertion that his misunderstanding of the court ’ s ruling was reasonable. Moreover,
d e fense counsel could have asked the court on the record to clarify its ruling. He failed to
do so. Next, d efendant complains that the court improperly limited defe nse counsel ’ s cross

- examination of prosecution witness George Kline , who was not an expert, but rather an employee of Studio Waterman from the spring of 2008 to August
2009

. During that time, Kline ’ s primary responsibility at Studio Waterman w a s “ UPS , ”

as well as “ additional general office functions, ” such as assisting other staff members and filing

. On cross

- examination, defense counsel elicited, with no objection from the prosecutor , Klin e ’ s testimony that he had worked in the design industry prior to h is employment at Studio Waterman , and that, b ased on his prior experience a n d knowledge
and what he observed at Studio Waterman, he did not believe he had committed any
criminal conduct or had assisted anyone else ’ s criminal conduct

.

Shortly thereafter, the following colloquy ensued. Q. [BY DEFENSE COUNSEL]: “ The sense that one gets in listening to your testimony
about conversations and about interaction and then in these e

- mails is a couple of things. One, this is a legitimate business that is functio ning, that is providing services to
numerous clients.
A. Yes. Q. When you think about, you know, shams or Ponzi schemes or these grand sort of shell companies, one thinks of a purported business that is providing no service. ” [ The court properly sustained the prosecutor ’ s objection to this statement. ] Q. [BY DEFENSE COUNSEL]: “ W as this that type of business ? ” The court called a sidebar conference , after which defense counsel moved on to another line of questioning.8 On appeal defendant conte nds the court improperly excluded Kline ’ s testimony “ about whether Studio Waterman was a Ponzi scheme which provided no
actual service. ” The court did not abu s e its discretion by doing so. Defense counsel ’ s question concerning shams, Ponzi schemes, and s hell companies went to the legality of
defendant ’ s business. Furthermore, the testimony would have been cumul ative. Kline testified that the other employees of Studio Waterman included an architect, two graphic artists, an office manager, project manager s, an in

- house bookkeeper, a secretary/receptionist, and a computer specialist. Hi s testimony concerning Studio
Waterman ’ s employees and its daily a ctivities revealed the company provide d actual interior design services to various clients

. For example, Klin e testified that money was spent on projects for other clients and that vendors (who had provided merchandise) pressured Studio Waterman for payment. Moreover, t he court granted defense counsel very generous latitude in cross

- examining Kline, even all owing Kline to testify he did not believe any criminal conduct “ was going on ” at Studio Waterman

.

Defendant ’ s second contention concerning Kline ’ s testimony is t hat the

court improperly precluded Kline from testifying a bout defendant ’ s “ business intent
du ring the economic downturn. ” The court did not abuse its discretion. Kline had no personal knowledge of defendant ’ s intent . Furthermore, whether defendant had the requisite intent for grand theft was a question for the jury.

Finally, d efendant co ntends the court improperly pr e c luded Kline from
testi f y ing “ about litigation against a former client that owed a great deal of money to
Studio Waterman. ” But Kline was n ot familiar with the subject; d efense counsel had to
educate him by saying ( in the guise of a question ) , “ Hitchcock was actually a litigation matter that Studio Waterman had against a prior client that had not paid a whole lot of
money. ” The court did not abuse its discretion when it sustained the prosecutor ’ s relevance objection. Hitchcock ’ s debt to defendant was irrelevant to whether defendant committed grand theft and diversion of construction funds against the Pharrises, the9

Berlins, and the Wiltzes. And since Kline was unfamiliar with the litigation, it is unclear
what he could have testi f ied about it (other than to respond to defense counsel’s educational question/statements)

.

In sum, t he court did not abu s e its discretion and did no t violate defendant ’ s constitutional rights to a fair trial and to present a defense. A state ’ s evidentia ry rules generally do not abridge an accused ’ s right to present a defense. ( People v. Cunningham (2001) 25 Cal.4th 926, 999; United States v. Scheffer (1998) 523 U.S. 303, 308

. ) Nor does a court abuse its discretion by precluding defense counsel from c r oss

- examining a witness ab o ut cumulative evidence. ( Cunningham , at p. 999 .) T here was no error

.

The Prosecutor Did Not Improperly Comment on Defendant ’ s Failure to Testify

D uring closing argument , the prosecutor argued that d e fendant intended to

comm it grand theft

. H e then immediately commented on defendant ’ s right not to testify:

“ Let ’ s move to a few different categories in terms of how you evaluate evidence. First,
let ’ s start with the defendant ’ s right not to testify. Miss Waterman has a right not to testify. You cannot hold that against her. In fact, you can ’ t even talk about it during your
deliberations. There ’ s a

— and you can ’ t consider it for any reason. [¶] There ’ s a law school professor one time that told me, you know, if you ’ ve got a right but you get penalized when you exercise that right, well what good is the right? So she didn ’ t testify in this case, and you can ’ t consider that

— for any purpose. ” The court overruled defense
counsel ’ s objection.

Outside the jury ’ s presence, def ense counsel elaborated on his objection:

“ I ’ m sure [the prosecutor ’ s] intent was not to educate the jury on why we have a right not to testify, but rather to highlight the fact that there is a right not to testify and it was invoked in this case. [¶] I was surprised by the comment

. . . . I ’ ve never heard a Government prosecutor previously comment on the theory behind no comment on the10

Fifth Amendment. And so I thought it was an appropriate Griffin objection. ” The court again overruled the objection.

On appeal defendant contends the prosecutor impli ed to the jury that her

“ failure to testify was evidence that she h ad the specific intent to steal

. . . . ”

In Griffin v. California (1965) 380 U.S. 609, 611

- 615 ( G r iffin ) , “ the Unit e d States Supre me Court held that the privilege against self

- incrimination of the Fifth
Amendment prohibits any comment on a defendant ’ s failure to testify at trial that invites or allows the jury to infer guilt therefrom , whether in the form of an instruction by the

cou rt or a remark by the prosecution

. ” ( People v. Clair (1992) 2 Cal.4th 629, 662

. ) In Griffin , the prosecutor “ made much of ” the defendant ’ s failure to testify , an d argued that
the defendant would know details such as whether the victim looke d “ ‘ beat up ’ ” when they went down an alley together

. ( Griffin , at p. 610 .) The prosecutor argued : “‘ These things he has not seen fit to take the s tand and deny or explain.’” “ ‘ And in the whole world, if anybody would know, this defendant would know. ’” “ ‘ Essie Mae is dead, she

can ’ t tell you her side of the story. The defendant won ’ t. ’” ( Ibid. )

Similar blatant references to the defendant ’ s failure to testify appear in the case law. They “ include remarks that the defendant ‘ has been very quiet ’ during trial;

‘ whe re is the outcry of innocence? ’ ; ‘ Ask the defendant to explain these things ’ ; ‘ What
other witnesses could the defendant ’ s case have put forward who were totally available to you? ’ spoken while the prosecutor gestured toward the defendant; ‘ He could have ta ken the stand and explained it to you ’ ; ‘ Only Mr. Harris [the victim] and this defendant were present at those initial meetings and we have brought you the testimony of Mr. Harris ’ ;

‘ If there are reasons why innocent people do not testify before the court, I do not know what they would be. ’ ‘ There is only one person that can tell you [what happened], and
that ’ s the defendant. ’” (Gers hman, Prosecutorial Misconduct (2d ed.) 11:12, fns. omitted.)11 “ P rosecutorial comment which draws attention to a defendant ’ s exercise of his constitutional right not to testify, and which implies that the jury should draw inferences against defendant because of his failure to testify, violates defendant ’ s constitutional rights. ” ( People v. Murtishaw (1981) 29 Cal.3d 733, 757, superseded by statute on another point as recognized in People v. Boyd ( 1985) 38 Cal.3d 762, 772

- 773.)

In People v. Carter (2005) 36 Cal.4th 1114, 1190, defense counsel, in closing argument, acknowledged that the defendant did not testify, admonished the jurors they could not “ ‘ hold it against him ’ ” or “ ‘ co n si d er any of it , ’ ” and “ hypothesized a number of reasons why a defend ant might elect not [ to ] testify. ” ( Id . at p. 1190.) Our Supreme Court held there was no Griffin error because the remarks , considered in
context, showed “ that counsel was not suggesting that the jury draw any sort of adverse
inference from defendant ’ s s ilence. ” ( Carter , at p. 1192.) The attor ne y ’ s admonishments that the jury could not consider the defendant ’ s silence, or hold it against him,

“ manifestly did not constitute the type of comments that Griffin declared invalid. ” ( Ibid. )

In People v. Bradley (2012) 208 Cal.App.4th 64, a prosecutor “ stated

‘ [t]here was no valid explanation given by the [defendant] as to why the public could not see the actual credit card statements, ’ ” which comment elicited a defense motion for a
mistrial on Griffin gro unds. ( Bradley , at p. 85.) The trial court denied the motion. ( Ibid. ) The prosecutor then told the jury that the defendant had a constitutional right not to testify and “ the jury could not draw an inference from the fact that [he] did not testify
becau se he was ‘ entitled to just sit in that chair on his constitutional right and not say anything. ’” ( Ibid. ) The prosecutor explained to the jurors that , when he previously

comment ed on t he defendant ’ s failure to explain why the credit card statements were private , t he prosecutor had not been talking about the defendant ’ s choice not to testify. ( Id. at pp. 85

- 86.) Defense counsel then “ renewed his motion for mistrial on the basis of the prosecutor ’ s ‘ intentional ’ misconduct in ‘ commenting on [the defendant ’ s] right to
take the Fifth Amendment. ’ The [trial] court again denied [the defense] motion for12

mistrial, finding the prosecutor ’ s comments did no more than paraphrase instructions the court had already given the jury. ” ( Id. at p. 86 .)

The Court of Appeal held there was no Griffin err o r

. ( People v

. Bradley , supra , 208 Cal.App.4th at p. 86.) A s to the prosecutor ’ s comments “ that the jury should not draw any adverse inferences from [the defendant ’ s ] failure to testify, the trial court
pr operly denied the motion for mistrial. The prosecutor merely paraphrased the language of CALJIC Nos. 2.60 and 2.61, which had already been read to the jury, and explained he did not mean to suggest the jury should draw any adverse inference from [the
defe ndant ’ s] failure to testify. [¶] Even if the prosecutor ’ s references to [the
defendant ’ s] constitutional right not to testify can be regarded as error, ‘“ indirect, brief
and mild references to a defendant ’ s failure to testify, without any suggestion that an inference of guilt be drawn therefrom, are uniformly held to constitute harmless error. ”’” ( Ibid. ) Here, too, the prosecutor ’ s remarks pa r aphras ed the court ’ s jury instruction on the subject

. 2 As in People v

. Carter , supra , 36 Cal.4th 1114 , the prosecutor reminded the jurors they could not t alk during deliberations ab ou t defendant ’ s righ t not to testify or consider it for any reason

.

But defendant argues the prosecutor ’ s remarks were not meant to be
educational , but “ were, at best, unnecessary a nd reckless, and, at worst, intentionally

2 The court instructed the jury with CALCRIM No. 355 as follows: “A defendant has an absolute constitutio nal right not to testify. She may rely on the state of the evidence and argue that the People have failed to prove the charges beyond a reasonable doubt. Do not consider for any reason at all the fact that the defendant did not testify. Do not discuss t hat fact during your deliberations or let it influence your decision in any way.”13

unconstitutional

. ” Defendant not es the court had already instructed the jury on the subject and that defense counsel surely intended to do so in his closing argument. 3

“ The test on review is whether there is a r easonable likelihood that the jury misconstrued or misapplied the words in violation of the privilege against self

incrimination. ” (Levenson, Cal. Crim. Proc. ( The Rutter Group 2013) ¶ 23:45, p. 23

- 51; People v. Clair , supra , 2 Cal.4th at pp. 662

- 663.) It is not reasonably likely the jury did
so here. The prosecutor’s comments paraphrased the court’s instructions to the jury. Jurors are “presumed to have followed the court’s instructions.” ( People v. Sanchez (2001) 26 Cal.4th 834, 852

. ) Indeed, t he p rosecutor ’ s comments reminded the jury they
could not discuss or consider in their deliberations th at defendant did not testify.

In any event, the prosecutor ’ s remarks on defendant ’ s right not to testify were brief, mild, and not the type of comments Grif fin declared invalid. “ [I]ndirect, brief
and mild references to a defendant ’ s failure to testify, without any suggestion that an inference of guilt be drawn therefrom, are uniformly held to constitute harmless error. ” ( People v. Hovey (1988) 44 Cal.3d 54 3, 572; People v. Turner (2004) 34 Cal.4th 406,
420

- 421.) Although the prosecutor ’ s comments were probably ill advised, inviting scrutiny on appeal, it was not error to paraphrase the court’s own instruction, and, in any

3 As to the prosecutor’s intent, this was not the first time in his closing argument that he gave the jurors an educational admonishment. Earlier, he had noted that Studio Waterman employees had testified pursuant to immunity agreements: “[C]ommon sense will tell you, Well, why is [defendant] charged and not these people? Good question. But as you heard in the jury instruction, that isn’t something for you to consi der. So I understand you might be curious about it. You might think, well is it fair or not? But as a jury sitting in judgment of [defendant’s] actions, you have to put that issue completely aside and just judge [defendant’s] actions.” These comments h ighlighted the issue for the jury. But clearly the prosecutor had no nefarious intent, since it was not in the prosecution’s interest for the jury to speculate about the employees’ culpability and to consider whether it was fair that defendant was singled out for prosecution.14

event, was harmless beyond a reaso nable doubt. ( Hovey , at p. 572 [standard for prejudice
for Griffin error is harmless beyond a reasonable doubt].)

DISPOSITION

The judgment is affirmed.

IKOLA, J.

WE CONCUR:

RYLAARSDAM, ACTING P. J.

BEDSWORTH, J.