Court Opinion

ID: 9784061
Source: CourtListenerOpinion
Date Created: 2023-08-30 20:36:43.280327+00
Date Added: 2024-06-11T07:35:47.980604
License: Public Domain

MORENO, J.
I respectfully dissent. The Court of Appeal in this case found that the prosecutor’s use of a victim-funded investigator, operating for nearly three years from within the offices of the Orange County District Attorney (District Attorney), creates a conflict of interest. The majority does not revisit this conclusion, but holds that even if there is a conflict, the trial court did not abuse its discretion in finding that the conflict does not prejudice defendant. Given the substantial expenditure by the City of Orange (City) in funding the sole financial investigator in this case, as well as the critical role played by the investigator in the criminal prosecution of Jeffrey Hambarian, I find that the conflict of interest in this case is so grave as to render it unlikely that defendant will be treated fairly during all portions of the criminal proceedings. Accordingly, I find that the trial court abused its discretion in failing to recuse the District Attorney.
I.
Our analysis is governed by Penal Code section 1424. Under subdivision (a)(1), a motion for recusal of a district attorney “may not be granted unless the evidence shows that a conflict of interest exists that would render it unlikely that the defendant would receive a fair trial.” (Pen. Code, § 1424, subd. (a)(1).) In People v. Eubanks (1996) 14 Cal.4th 580 [59 Cal.Rptr.2d 200, 927 P.2d 310] (Eubanks), we observed that Penal Code section 1424 involves a two-pronged analysis: (1) whether a conflict exists, and (2) whether the conflict is prejudicial to the defendant. (Eubanks, supra, 14 Cal.4th at p. 592.)
In the present case, the trial court applied the Eubanks test and determined that (1) there is no conflict in this case, and (2) even if there is a conflict, this conflict is not so grave as to render it unlikely that defendant would receive fair treatment. The Court of Appeal unanimously found that the trial court erred in determining that there is no conflict of interest, stating, “[a] conflict existed and it continues to exist.” In applying the second prong of the Eubanks test, however, a majority of the justices below found that the trial court did not abuse its discretion in finding that even if there is a conflict, it did not prejudice defendant.
The majority below only reluctantly reached this conclusion. As the court noted, “[t]he district attorney should not take great solace in our result, *846however. . . . [W]e applied the abuse of discretion standard with due deference, but we might not have reached the same result had we been sitting as trial judges.” Noting that the preliminary hearing has not yet been held in this case, the court stated that “[a]t some point the amount the City has underwritten might become so large no rational jurist could say the prosecutor would not be unduly influenced. [10 • • • [Cjhanged circumstances may merit further consideration by the trial court.”
I agree with the majority of this court that we should review under an abuse of discretion standard the trial court’s finding that any conflict in this case is not so grave as to render it unlikely that defendant would receive fair treatment. “Our role is to determine whether there is substantial evidence to support the [trial court’s] findings [citation] and, based on those findings, whether the trial court abused its discretion in denying the [recusal] motion. [Citations.]” (People v. Breaux (1991) 1 Cal.4th 281, 293-294 [3 Cal.Rptr.2d 81, 821 P.2d 585].) But unlike the majority, I conclude that two of the trial court’s findings were not supported by substantial evidence and that the trial court abused its discretion in determining that the conflict of interest does not warrant recusal of the District Attorney.
First, the trial court found that the involvement of the City’s investigator in this prosecution is proper and does not create a conflict of interest. This is wrong, as the Court of Appeal held and this court does not challenge. The involvement of the City’s investigator, Jeff Franzen, does create a conflict of interest. Clearly, the trial court’s mistaken conclusion that no conflict exists affected its determination that the conflict was not so grave as to warrant recusal of the District Attorney. The trial court could not accurately judge the severity of the conflict of interest when it mistakenly believed that the involvement of the City’s investigator in the criminal prosecution did not create a conflict of interest at all.
The trial court’s conclusion that any conflict did not warrant recusal also was based upon a second erroneous premise. The trial court determined that the District Attorney’s use of the City’s investigator did not create a conflict of interest because the financial arrangements insulated the District Attorney from any conflict. The trial court found significant, first, that the District Attorney had not solicited funds from the victim, and second, that the Orange. Police Department, not the City, was paying the investigator’s bill. This second point is factually wrong; the City is paying the bills, not the police department.
Therefore, two of the trial court’s findings, that the involvement of the City’s investigator does not create a conflict of interest and that the City was *847not paying for the investigator’s services, are not supported by substantial evidence. Without understanding that the involvement of the City’s investigator in the prosecution created a conflict of interest, and without knowing that the City, not the police department, was paying the investigator’s salary, the trial court could not properly determine the gravity of the conflict of interest. With this in mind, I consider whether the trial court abused its discretion in concluding that the conflict was insufficient to warrant recusal of the District Attorney.
II.
To establish whether the prosecutor suffers from a disabling conflict of interest, “the trial court must consider the entire complex of facts surrounding the conflict to determine whether the conflict makes fair and impartial treatment of the defendant unlikely.” (Eubanks, supra, 14 Cal.4th at p. 599.) The majority of this court analyzes each potentially prejudicial fact separately, concluding that no one fact mandates recusal. Eubanks, however, requires us to consider all of the facts together. The majority in Eubanks concluded that based on the totality of the circumstances, the trial court did not abuse its discretion in recusing the prosecutor. In his concurrence, Chief Justice George found that under the circumstances presented in Eubanks, recusal was mandated by law and a failure to recuse would have been an abuse of discretion. (Eubanks, supra, 14 Cal.4th at pp. 601-602 (conc. opn. of George, C. J.).)
In the present case, I find several individual factors, such as the substantial investment of the City in the prosecution, the crucial prosecutorial role played by the City’s investigator, and the City’s position as a private victim, potentially prejudicial to defendant. It is in light of the entire complex of facts in this case, however, that I conclude that fair treatment of defendant is unlikely and therefore recusal is required by law.
First, as the majority acknowledges, as of the recusal hearing, the City had paid its private financial investigator, Franzen, over $314,000 to work with the District Attorney’s Office on this one case. The case is still in an early stage; it has not yet gone to a preliminary hearing. The City’s financial investment in this case will only increase.1 In Eubanks, we looked to the size of the victim’s contributions in determining that the trial court was reasonable in recusing the district attorney. (Eubanks, supra, 14 Cal.4th at p. 600.) The amount of contributions in Eubanks was around $13,000. At the time of *848the recusal hearing, this case already involved an investment by the victim of over 24 times that amount. This substantial expenditure raises the serious possibility of a disabling conflict of interest.
The majority points out that in Eubanks the district attorney solicited the victim to pay the investigator’s fees, whereas in this case the City volunteered to pay for the investigator. I do not believe this distinction makes a difference. In either case, the victim is paying for a prosecutorial expense that otherwise would have been incurred by the District Attorney’s Office.2 As in Eubanks, the District Attorney is aware that the victim, not the District Attorney’s Office, is paying the investigator’s salary. As the trial court in this case found, “[tjhere is no doubt, for the record, that the District Attorney’s Office has been the beneficiary of some financial assistance through these victims.” Although, as the majority notes, the District Attorney does have an in-house financial investigator, this investigator is not working on Hambarian’s case. If the City was not providing the investigator, the District Attorney would have to incur the costs of performing the financial analysis in the case. By accepting the services of the City’s financial investigator, the District Attorney does not have to make the ordinary cost/benefit decisions of whether to pursue criminal charges against Hambarian. Further, the knowledge that for over two years the City has been paying the salary of a financial investigator to aid the prosecution, may create, on the part of the District Attorney, a sense of obligation to pursue this case.
The majority argues that the District Attorney is less likely to feel a sense of obligation to prosecute Hambarian because even if the District Attorney does not bring the case to trial, the City can use Franzen’s work product in its civil action against Hambarian. In Eubanks, however, the fact that the victim had brought a concurrent civil suit against the defendant did not alter our conclusion that the District Attorney could suffer from a disabling conflict in accepting investigatory services paid for by the victim. (Eubanks, supra, 14 Cal.4th at pp. 600-601.) Additionally, the second prong of the Eubanks test requires us to consider fairness to the defendant at all stages of the criminal prosecution. As Chief Justice George noted in his concurrence in Eubanks, “[cjertainly, the district attorney would have appreciated that [the victim] stood to benefit from the criminal prosecution of defendants. . . . [B]y keeping the prosecution ‘alive a little longer,’ [the victim] would benefit completely vis-a-vis [the defendant.] Thus, the district attorney could ‘reimburse’ [the victim] . . . simply by exercising discretion to continue or extend the criminal investigation for longer than it otherwise *849would.” (Eubanks, supra, 14 Cal.4th at pp. 602-603 (conc. opn. of George, C. J.).)
Prejudice to a defendant can arise merely by maintaining an open criminal investigation. As Presiding Justice Sills pointed out in his dissent below, “[sjuch a prosecution would assist the city in its parallel civil action against Hambarian, deter the Hambarian parties from contesting civil suits against them for fear of criminal prosecution, assist the city in enforcing its monetary settlement with the Hambarian parties which depends in large part on Hambarian’s conviction in the criminal proceeding, and ensure that Hambarian would be forced to sell his trash-hauling business. Such a prosecution would also compromise Hambarian’s ability to simultaneously defend both the criminal and civil actions because he would be subject to a significant bail, his assets would be frozen, and relevant evidence could be gathered within the standards of criminal proceedings, an advantage over procedures applicable in civil proceedings.” Just as in Eubanks, the District Attorney in this case is aware that maintaining an open investigation of Hambarian and filing charges against him will provide benefits to the City in its civil case against Hambarian. Even if the District Attorney were ultimately to decide not to bring this case to trial, the District Attorney might pursue its charges against Hambarian for longer than it otherwise would have, out of a sense of obligation to the City. This in itself constitutes prejudicial treatment of defendant.
A second factor contributing to a potentially disabling conflict of interest is Franzen’s critical role in the criminal prosecution. Franzen is the sole financial investigator in what is a financial investigation. As the majority mentions, Franzen prepared the loss summaries in the case. These loss summaries serve two purposes. They were used as the basis for alleging sentencing enhancements in the criminal case and could be used as a measure for the restitution Hambarian might be ordered pay the City in the event of a conviction. The City has an interest in obtaining the largest possible recovery from Hambarian. It is probable that Franzen will take his employer’s interests into account when performing his financial analysis of the loss. The District Attorney is relying on Franzen’s reports without any review by an impartial financial analyst to verify their accuracy and fairness. Even though Franzen can be cross-examined at trial, the reliance on Fran-zen’s loss summaries may cause pretrial unfairness to defendant, something that cannot be cured on cross-examination.3 The District Attorney’s heavy reliance on the victim-funded investigator for such a crucial aspect of the *850case raises a doubt as to whether it is possible for defendant to be fairly treated during all stages of the prosecution.
Franzen’s role in the District Attorney’s investigation of Hambarian is potentially prejudicial, since Franzen was serving concurrently as an employee under contract with the City, the victim in this case, and as a full-fledged member of the prosecution’s team. Franzen essentially served as an agent of the District Attorney during the investigation. While in Eubanks the victim-funded investigators assisted the district attorney’s office for a few weeks, in this case Franzen had been working from inside the District Attorney’s Office for over two years at the time of the filing of the recusal motion in November 1999; he has since continued working there and billing the City for his services. Franzen has been working from his own office located inside the District Attorney’s headquarters. He has used the District Attorney’s resources and has written memos on District Attorney letterhead. Under the auspices of the District Attorney’s Office, Franzen conducted or participated in over 55 interviews of witnesses. He often made decisions about whom to interview. In these interviews, he has been referred to by the District Attorney’s Office as “[o]ur CPA.” In addition, Franzen was present at the execution of most of the search warrants in the case. Due to Franzen’s close connection with the District Attorney’s Office during the prosecution, while at the same time under contract with and paid by the victim in the case, a likelihood of prejudice to defendant arises.
A third relevant factor in this case is the City’s role as a private victim. The majority argues that the City is not a private victim like Borland, the victim in Eubanks, and therefore prejudice to Hambarian is less probable. While I agree that when a disinterested public entity assists in a prosecution, unfair prejudice to the defendant is less likely, the City’s role in this case is neither disinterested nor exclusively public. Like Borland, the City has a direct financial interest in the criminal prosecution. The City has filed a concurrent civil suit against Hambarian, his wife, and his 15-year-old son. Additionally, the City has settled with the corporate victims in this case, acquiring their private causes of action against defendant. Therefore, the City’s interest is not exclusively as a public entity; the City stands to recover the restitution owed to private victims as well.
The majority contends that defendant will not be prejudiced by the involvement of the City’s investigator since the City’s interest as a public *851entity in recovering restitution from Hambarian mirrors the interest of the District Attorney. It is true that the City’s recovery of funds in its civil case will benefit the public. The City’s sole interest in this case is financial, however. Presumably, the City has invested over $314,000 in order to maximize its recovery from Hambarian.
The District Attorney’s interest, however, goes beyond securing civil restitution for the residents of the City. As we said in Eubanks, “ ‘[t]he prosecutor speaks not solely for the victim, or the police, or those who support them, but for all the People. That body of “The People” includes the defendant and his family and those who care about him.’ ” (Eubanks, supra, 14 Cal.4th at p. 589.) Fair and impartial treatment of the defendant must pervade the exercise of all of the prosecutor’s discretionary functions, from the investigation and gathering of evidence, through the decisions of whom to charge and what charges to bring, to the numerous choices the prosecutor must make at trial. (Ibid.) As we have said, “[t]he importance, to the public as well as to individuals suspected or accused of crimes, that these discretionary functions be exercised ‘with the highest degree of integrity and impartiality, and with the appearance thereof’ [citation] cannot easily be overstated.” (Ibid.) This broad interest in promoting justice cannot be equated with the City’s more limited goal of obtaining civil restitution from defendant.
III.
As we said in Eubanks, a disabling conflict of interest is demonstrated when the victim’s financial contributions “are of a nature and magnitude likely to put the prosecutor’s discretionary decisionmaking within the influence or control of an interested party.” (Eubanks, supra, 14 Cal.4th at p. 599.) Here, the totality of the circumstances, including the amount of the contributions, the active role of the victim’s investigator in the case, and the City’s financial stake in the outcome of the investigation, suggests that the discretionary decisions of the prosecutor are within the influence and control of an interested party.
The fact that this “interested party” is the City should, as the majority asserts, impact our assessment of potential prejudice to defendant in this case. However, this is not a case where the City has performed an independent investigation of Hambarian and then turned its financial analysis over to the District Attorney’s Office. Nor is this a case involving a joint multiagency task force in which the City and other public entities have assigned their employees to work with the District Attorney’s office to prosecute a class of individuals who had defrauded the public. The investigation of *852Hambarian is not part of a broad antifraud effort, but rather is a targeted investigation in a case where the City is involved in a civil dispute and has obtained the restitution rights of private victims.
Here, the City has spent over $314,000 to hire an outside financial investigator who has the sole task of pursuing the prosecution of one defendant. The City’s investigator has performed all of the financial analysis in the criminal case, using the authority and resources of the District Attorney’s Office to pursue the criminal investigation. The District Attorney, in turn, has relied heavily on the services donated by the City in prosecuting this action. It has not expended any of its resources on the financial investigation in the case nor has it needed to make the decision whether such an investigation is worth the resources it consumes. The District Attorney’s Office has not used an impartial financial analyst in this case, despite the fact that, as a civil litigant expecting restitution from Hambarian, the City has an interest in maximizing the losses attributed to defendant. The City stands to recover not only public funds but also funds owed to private corporations. Given the entire complex of facts in this case, it is unlikely that defendant will receive fair and impartial treatment. Therefore, I find that recusal is required as á matter of law.
I would reverse the judgment of the Court of Appeal.
Petitioner’s petition for a rehearing was denied June 12, 2002, and the opinion was modified to read as printed above.

In fact, Franzen was paid an additional $140,000 for his continued investigation during the 18 months after the recusal hearing. The City has now paid Franzen over $450,000 for his services.

Contrary to the majority’s assertion, I am not suggesting that recusal is required “whenever” the victim pays for a prosecutorial expense. (Maj. opn., ante, at p. 836.)

The 65-count information in this case included six counts of grand theft, as well as many counts of alleged money laundering (counts 38-65), filing false tax returns (counts 24-37), making false claims (counts 7-17) and charges of Corporations Code violations (counts *85018-23). Many of these counts are subject to enhancements under Penal Code sections 186.11, subdivision (a)(1), 186.10, subdivision (c)(1)(C), (D) & (2)(B), and 12022.6, subdivision (d). All of these enhancements are dependant on the loss determinations made by Franzen, and no doubt contributed to the high bail of $5 million which was initially set in this case.