Demurrer in Workers’ Compensation and Taxation Fraud Case

Under Penal Code § 1004, a defendant “may demur to the accusatory pleading at any time prior to the entry of a plea, when it appears upon the face thereof” that the complaint “does not substantially conform to the provisions of Sections 950 or 952, or Section 951 in the case of an indictment or information.”
 
Penal Code § 950 requires that the accusatory pleading contain the title of the action, the court, the parties’ names and a statement of the charged offenses.  Such an offense must be a public offense, or a crime.  Section 952 requires that each count “shall contain, and shall be sufficient if it contains in substance, a statement that the accused has committed some public offense therein specified.  Such statement may be made in ordinary and concise language.”  The key requirement is that the pleading “give the accused notice of the offense of which he is accused.”
 
A demurrer challenges the legal sufficiency of the complaint.  It is limited to the defects appearing on the face of the complaint.”  It has nothing to do with the credibility of witnesses, the strength of the evidence, whether the police engaged in excessive force or whether defendant is guilty or innocent.
 
When a judge rules on a demurrer, the complaint is supposed to be given “a reasonable interpretation and read as a whole with its parts considered in their context.” People v. Biane (2013) 58 Cal.4th 381, 388.
 
In our experience at Greg Hill & Associates, a demurrer is rarely filed in a criminal case.  Even if the demurrer is sustained, meaning the judge agrees the complaint is legally insufficient, the district attorney is usually afforded “leave to amend,” meaning to correct the error.  A successful demurrer rarely disposes of a case.

This fact makes the case of People v. Sabas Trujillo all the more interesting.  Mr. Trujillo and several others were accused of submitting payroll documents that under reported employee wages over a period of years to, among others, two insurance companies, the State Compensation Insurance Fund, and the Employment Development Department, for purposes of reducing insurance premiums and taxes.  The District Attorney alleged many violations of Insurance Code § 1871.4 (workers’ compensation insurance fraud), 11760 (same), 11880(a) (same), Unemployment Insurance Code § 2118.5 (withholding tax fraud), and Labor Code sections (1778) (wage fraud) and 115 (false or forged instrument).

Counsel for defendants demurred on statute of limitations ground and for failure to conform to the pleading provisions of Penal Code §§ 950 and 952, contending the counts were “vague and uncertain as to the charged alleged.”
 
The trial court judge in Riverside County sustained the demurrer, agreeing with defendants that the complaint lacked the required legal specificity to proceed.  The People then amended the complaint and increased the number of counts in the complaint from 20 to 1.104.  The trial court again sustained the demurrer, saying specific dates for specified conduct was required.

The People appealed the second ruling to the Fourth Appellate District.  In People v. Sabas Trujillo (2016 DJDAR 765), the appellate court reversed the trial court, noting that the complaint is not required to identify the precise dates for all counts unless time is a material element and defendants did not specify any law that said this was so.  Instead, it may be alleged to have been committed at any time prior to the filing.  The critical purpose of the complaint is to give defendants notice of the charges therein.

As this is a common concern many of our clients have in looking at a complaint, we feel this appellate court ruling is helpful in understanding the rather loose pleading requirements at the complaint stage of the case.  As the appellate court hinted in the opinion, more specific dates must be eventually stated, usually at the preliminary hearing in a felony matter or at trial in a misdemeanor case.

For more information about criminal fraud, please click on the following articles:
  1. What Is Insurance Fraud?  The Punishment?  Defenses?
  2. What Is Auto Insurance Fraud (Penal Code §§ 548-551)?
  3. What Is Unemployment Insurance Fraud?
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