People v. Semaan

handwriting identification and neither attempted to authenticate the signature as Marie’s. The several documents purporting to bear Marie’s signature in fact bore apparently very different signatures, none of which was shown to be her own. Ownership of the house was unclear. In her amended claim, Marie asserted that her deceased husband Simon Semaan owned the Brea house; in that document she did not, however, claim an ownership interest in the house, as opposed to the funds in the account.- While a last will and testament for Simon Semaan was in evidence, the will contained no listing of assets. The Brea house was sold by defendant Youssef Semaan while Marie was in Lebanon, under a power of attorney purportedly executed by her in Beirut. But the People questioned the power of attorney’s authenticity, and no witness attempted to authenticate Marie’s signature on the document. Prior to the sale, and while Marie was in Lebanon, a deed to the house was created in her name; the People questioned the deed’s authenticity, and it was not shown to be genuine. Finally, the escrow check payable to Marie representing the proceeds of the sale was endorsed and deposited into the bank account while she was out of the country. One attempt, apparently by Marie, to withdraw money from the bank account from overseas failed for unknown reasons.

Based on this evidence, the superior court rejected Marie’s claim. The court held that, “[although [Marie] may have once had some property interest in the Mountain Court residence, she has failed to show evidence that she owned any of the money in the Wells Fargo Account.... Thus, it is the order of this court that [Marie’s] claim is denied.”

The Court of Appeal reversed. In the court’s view, once “Marie met her initial burden of establishing legal title to the bank funds from the sale of her home, the burden of producing evidence shifted to the People to refute by clear and convincing evidence her legal title to the funds.” The court based this conclusion on Evidence Code section 662, which provides that “[t]he owner of the legal title to property is presumed to be the owner of the full beneficial title. This presumption may be rebutted only by clear and convincing proof.” The court acknowledged that “there is evidence of defendants’ control over Marie’s bank account funds,” and that “it is possible defendants were using Marie’s account for money laundering . . . .” Nevertheless, the court concluded “the People have not established by clear and convincing evidence that Marie did not have a legitimate interest in the money deposited in her bank account.” We granted the People’s petition for review.

The People contend the Court of Appeal erred in applying Evidence Code section 662 to shift to the People the burden of disproving a claimant’s interest in frozen assets once the claimant has shown nominal title. “[S]uch a minimal showing,” the People contend, “would permit a sophisticated white collar criminal to retain stolen property or other assets simply by placing the asset into the name of a willing, or even an unwilling or unsuspecting, friend or family member.” We conclude section 662 does not apply to this case.

Section 186.11 says nothing about evidentiary burdens or standards of proof. The applicable burdens and standards are, however, fairly inferable from the language and purpose of the statute, considered in the light of the default rules set out in the Evidence Code.

Section 186.11, like other provisions of the Penal Code (e.g., § 1202.4 et seq.), implements the state Constitution’s declaration “that all persons who suffer losses as a result of criminal activity shall have the right to restitution from the persons convicted of the crimes for losses they suffer.” (Cal. Const., art. I, § 28, subd. (b).) The principal focus of section 186.11, as noted, is to facilitate the payment of restitution by “preventing] dissipation or secreting of assets or property . . . .” (Id., subd. (e)(2).) Section 186.11 accomplishes this by authorizing the superior court to order preliminary relief, including “temporary restraining order[s], preliminary injunction[s], the appointment of a receiver, or any other protective relief necessary to preserve the property or assets” (id., subd. (e)(2)) from which restitution might properly be paid. Assets or property become subject to the court’s jurisdiction on a showing that the defendant controls them. When a person has been charged under section 186.11 with an aggravated white-collar crime enhancement, “any asset or property that is in the control of that person, and any asset or property that has been transferred by that person to a third party, subsequent to the commission of any criminal act alleged pursuant to subdivision (a), other than in a bona fide purchase, whether found within or outside the state, may be preserved by the superior court in order to pay restitution and fines imposed pursuant to this section.” (Id., subd. (e)(1).)

A showing that the defendant controls assets or property suffices to justify the issuance of preliminary relief because control furnishes an inference of ownership: “A person who exercises acts of ownership over property is presumed to be the owner of it.” (Evid. Code, § 638.) Unlike the

958 P.2d 393 ]; Crocker National Bank v. City and County of San Francisco (1989) 49 Cal.3d 881 , 888 [ 264 Cal.Rptr. 139 , 782 P.2d 278 ].) “The standard is deferential; ‘When a trial court’s factual determination is attacked on the ground that there is no substantial evidence to sustain it, the power of an appellate court begins and ends with the determination as to whether, on the entire record, there is substantial evidence, contradicted or uncontradicted, which will support the determination . . . .’ ” (People v. Superior Court (Jones), supra, 18 Cal.4th 667 , 681, italics omitted, quoting Bowers v. Bernards (1984) 150 Cal.App.3d 870 , 873-874 [ 197 Cal.Rptr. 925 ].)

Reviewing the superior court’s finding under the substantial evidence test, we see no difficulty in affirming. The People’s undisputed evidence that defendants exclusively controlled the bank account in Marie’s name suffices to uphold the finding. Marie’s argument to the contrary, which the Court of Appeal accepted, is that the presumption set out in Evidence Code section 662 compels a different conclusion. We do not agree.

Evidence Code section 662 provides: “The owner of the legal title to property is presumed to be the owner of the full beneficial title. This presumption may be rebutted only by clear and convincing proof.” Section 662 thus codifies the common law rule (e.g., Olson v. Olson (1935) 4 Cal.2d 434 , 437 [ 49 P.2d 827 ]; Toney v. Nolder (1985) 173 Cal.App.3d 791 , 796 [ 219 Cal.Rptr. 497 ]) that oral trusts in derogation of title are disfavored and must be proved by clear and convincing evidence. (See Cal. Law Revision Com. com., 29B pt. 2 West’s Ann. Evid. Code (1995 ed.) foll. § 662, p. 210 [noting that § 662 codifies the rule of Olson v. Olson].) “Allegations that deeds absolute are actually mortgages, that conveyances are subject to a trust, and that legal title does not represent beneficial ownership have . . . been historically disfavored because society and the courts have a reluctance to tamper with duly executed instruments and documents of legal title.” (Weiner v. Fleischman (1991) 54 Cal.3d 476 , 489 [ 286 Cal.Rptr. 40 , 816 P.2d 892 ].)

Evidence Code section 662 does not apply, however, when title itself is challenged as not genuine. In Murray v. Murray (1994) 26 Cal.App.4th 1062 , 1067 [ 31 Cal.Rptr.2d 855 ], on which the People rely, the Court of Appeal held that section 662 did not apply when the plaintiff in a quiet title action challenged as fraudulent a deed in another person’s name. “Evidence Code section 662,” the court explained, “has application, by its express terms, when there is no dispute as to where legal title resides but there is question as to where all or part of the beneficial title should rest.” (Murray v. Murray,

supra, at p. 1067.) “We are unaware, however, of a single reported case in which Evidence Code section 662’s presumption and burden were applied when the legal title itself was in dispute. Nor can we see anything in the language of section 662 requiring such application.” (Murray v. Murray, supra, at p. 1068.) This interpretation of section 662 appears self-evidently correct. Otherwise, the section would encourage fraud by permitting a dishonest person, simply by creating false documents of title, to shift to an innocent owner the burden of proving ownership by clear and convincing evidence.

In the case before us, the whole thrust of the People’s case was to show that defendants used Marie’s name as an alias for their financial transactions and completely controlled the bank account in question. While Marie’s name was on the frozen bank account, no evidence showed that she herself had opened the account or ever successfully exercised control over it. No witness claimed ever to have seen or spoken with Marie, and no witness attempted to authenticate as Marie’s own signature any of the various, apparently different signatures attributed to her on financial and legal documents. The People’s theory that defendants used Marie’s name as an alias had the support of undisputed evidence that defendants possessed credit cards, a driver’s license, and a Social Security card in her name, that all checks written on her bank account were written while she was out of the country and to pay defendants’ expenses, and that the sale of the Brea house, whose ownership was uncertain, was transacted entirely by defendants. For her part, Marie neither appeared in court nor made any statements under oath claiming ownership of the bank account, the proceeds of the sale of the house, or the Social Security benefits paid in her name. Marie’s expert proved only what was not in dispute, namely, that the proceeds of the sale and Social Security benefits were deposited into the account. Finally, while Marie’s attorney suggested in argument that she may have been “as much of a victim as anyone else,” Marie asserted no claim to restitution for the checks written by defendants on the account.

In conclusion, given the undisputed evidence that defendants used Marie’s name as an alias for their financial transactions, and given that the People disputed the genuineness of Marie’s title to the bank account and the funds therein, Evidence Code section 662 does not apply. Thus, the burden to prove by a preponderance of the evidence (Evid. Code, § 500) “the nature and amount of . . . her interest in the [claimed] property or assets” (§ 186.11, subd. (e)(6)) remained with Marie. Substantial evidence supports the trial court’s finding that she failed to carry this burden.

The judgment of the Court of Appeal is reversed in part and the matter remanded for further proceedings consistent with the views expressed herein.

George, C. J., Kennard, J., Baxter, J., Chin, J., Moreno, J., and Corrigan, J., • concurred.