Filed 9/11/26 P. v. Moland CA5
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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 This opinion has not been certified for publication or or dered published for purposes of rule 8.1115.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 FIFTH APPELLATE DISTRICT
THE PEOPLE, F089826
Plaintiff and Appellant, (Super. Ct. No. BF191728A)
v.
PALMER CORNELIOUS MOLAND, OPINION Defendant and Respondent.
THE COURT*
APPEAL from a judgment of the Superior Court of Kern County. Andrew Kendall, Judge.
Cynthia J. Zimmer, District Attorney, Anthony Yim, Deputy District Attorney, for Plaintiff and Appellant.
Laura Arnold, under appointment by the Court of Appeal, for Defendant and Respondent.
-ooOoo-
* Before Hill, P. J., Meehan, J. and DeSantos, J.
SEE CONCURRING AND DISSENTING OPINION
INTRODUCTION
The magistrate held defendant Palmer Cornelious Moland to answer for misappropriating public monies and making a contract in which he had a financial interest as a member of a school district. An information was later filed, containing both charges. The trial court granted defendant’s motion to set aside those charges. The People appeal. We conclude that sufficient evidence was presented at the preliminary hearing to hold defendant to answer. We shall reverse the order and direct the trial court to deny defendant’s motion.
PROCEDURAL HISTORY
The District Attorney of Kern County filed a complaint on September 7, 2022, charging defendant with misappropriating public monies (Pen. Code, § 424, subd. (a)(1);1 count 1), making a contract in which he had a financial interest as a member of a school district (Gov. Code, § 1090;2 count 2), filing a false nomination paper or declaration for candidacy (Elec. Code, § 18203; counts 3, 4), registering to vote when ineligible (Elec. Code, § 18100, subd. (a); count 5), and voting by an ineligible person (Elec. Code, § 18560, subd. (a); counts 6, 7).
The magistrate found sufficient cause to believe defendant committed the offenses alleged in the information at the preliminary hearing.3 Thereafter, the district attorney filed an information that realleged the charges contained in the complaint and charged three additional counts of perjury (§ 118; counts 8–10). Defendant filed a motion to set
1 Undesignated statutory references are to the Penal Code. 2 It is a felony to knowingly and willfully violate Government Code section 1090. (See Gov. Code, § 1097.) 3 The magistrate concluded that sufficient evidence demonstrates Fairfax Elementary School District (District) paid over $11,000 in legal fees incurred for defendant’s advantage and own private concerns.
aside counts 1 and 2 of the information pursuant to section 995 on May 6, 2025. The trial court granted the motion on May 8, 2025.
The People filed a timely notice of appeal on May 15, 2025.
FACTS
I. Preliminary Hearing Evidence.
Defendant took office as a member/trustee of the Board of Trustees (Board) of the District in December 2018. He was elected Board president at a special meeting on December 15, 2020. At a general meeting on the same day, the agenda included a vote on Proposed Resolution No. 2021-08 (proposed resolution), a public censure of defendant based on an investigation into August 2020 complaints made by District employees and the union president that described inappropriate, harassing, and abusive conduct by defendant. The investigation yielded a 120-page report.
The proposed resolution described the investigation’s conclusions that defendant engaged in abusive or bullying conduct toward District employees in violation of District policy and Board bylaws, including: (1) approaching District office staff in a demanding and aggressive manner in violation of protocols, scrutinizing their work, and creating extra work for them; (2) demanding and unprofessional requests to District staff, rather than to the superintendent, that intimidated staff and disrupted legitimate District business; (3) inappropriately criticizing work performance of a District employee who had criticized defendant to another employee; (4) usurping the responsibilities of the superintendent regarding employee facemasks by making derogatory remarks in public that misconstrued Board action and superintendent directives; (5) failing to refer correspondence regarding employee performance to the superintendent and reading it during public comment; and (6) performing management of administrative functions motivated by self-interest to discredit the superintendent. Defendant also engaged in abusive behavior toward the union vice president by falsely posting on social media that the vice president had engaged in illegal political activity. Additionally, during the investigation, defendant provided untruthful responses to the investigator’s questions, including the length of his prior employment with the District.
The proposed resolution sought a vote from the Board to (1) formally disapprove and censure defendant’s conduct, (2) direct defendant to review and comply with Board policies, regulations and bylaws, and to follow school site protocols; (3) instruct defendant to provide a safe, welcoming, and positive work environment for students and employees in accordance with the District’s mission; (4) direct defendant not to usurp the superintendent’s duties, exercise administration responsibility, or make demands or requests of District employees; (5) direct defendant to follow Board protocols when visiting school sites or facilities; (6) remove defendant from any committee or leadership position until he completes effective governance and school laws and regulations training and suspend him from representing the District or Board at public functions; (7) reevaluate defendant’s conduct at a public meeting following successful completion of the recommended training program; (8) recommend defendant resign from the Board; and (9) recommend defendant seek assistance from an executive or leadership development coach at his own expense. The proposed resolution also notified defendant that any future noncompliance with the Board’s bylaws, policies, regulations, or directives would result in the Board refusing to indemnify him for claims or actions resulting from his conduct to the extent allowed by law.
Defendant recused himself from the vote, and the proposed resolution failed (despite public comment encouraging the Board to follow the censure recommendation) when the vote of the remaining four Board trustees tied.
Before the Board met again on January 14, 2021, a local news media submitted a California Public Records Act (PRA) (Gov. Code, § 6250 et seq.) request seeking the motion to censure, other documents relating to the investigation that led to the motion, and defendant’s employee records.
Bylaw 9124 of the District’s Board Policy Manual empowers the Board to contract with county counsel or attorneys in private practice who may render the Board or superintendent legal advice, serve in the preparation and conduct of District litigation, render advice on school bond and tax increase measures, or perform other duties as assigned by the Board or superintendent. When seeking legal advice, the superintendent is required to initiate a “Request for Proposals” (RFP) to advertise and solicit proposals for legal services. The Board may contract for temporary, specialized legal services without initiating an RFP when a majority of the Board determines that “the unique demands of a particular issue or emergency situation so requires.” As Board president, defendant could only confer with District legal counsel subject to Board parameters and only when so directed by a majority of the Board.
On January 8, 2021, a representative of the law firm Fagen Friedman & Fulfrost LLP (F3) e-mailed defendant an agreement for legal services “[i]n response to a recent conversation” with one of F3’s attorneys. Superintendent Michael Coleman told the investigator that he learned defendant intended to contract with F3 from this e-mail and knew nothing about the matter previously. The e-mail was carbon copied to Superintendent Coleman, who e-mailed defendant in response as follows: “I’m assuming you have let this firm know we are publishing an RFP[.] [¶] Please be careful not to engage to[o] much with any firm as it can be viewed as giving a particular firm an unfair advantage. [¶] The[y] will have to respond to the formal RFP when published.” Defendant replied the following day: “I spoke to you earlier and [F3] is aware. Please place this Firm on the agenda as a voting item. The Board can give the decision on how to act. A special situation has occurred whereas, we must vote on a specialized experienced Firm on the January 2021 agenda.” Superintendent Coleman later told a district attorney investigator that defendant claimed he “just picked [F3] out of the phone book.”
Superintendent Coleman e-mailed defendant on January 11, 2021: “I am sending to you the DRAFT version of the RFP. [¶] Please review it. As mentioned, we need to discuss the evaluation process of the current firm ([Schools Legal Service]) and decide if we are going to publish this or not. [¶] I am only sharing this with you at the moment until we discuss the path forward.” Schools Legal Service was the law firm serving the District at that time.
The Board met on January 14, 2021, and voted on whether to add a motion to reconsider defendant’s censure to the agenda for the next Board meeting. Defendant abstained from voting, but during public comment, he requested that he be given time to attempt to resolve personal issues with the superintendent. Placing the matter on the agenda failed when the vote was tied, despite public comments supporting the motion to reconsider defendant’s censure.
When the Board met on January 14, 2021, it also discussed hiring F3. The meeting minutes do not identify the reason that necessitated the contract with F3. Trustee Victoria Coronel later told the investigator that during the closed session of the Board meeting, an attorney from F3 discussed defendant’s personal matters involving the censure proposal and his personal liability for matters involved in the censure, which she did not believe involved the Board. Trustees Coronel and Virginia Lawson also told the investigator that they did not believe it was necessary to retain counsel, objected to the failure to comply with the bylaws, and believed that defendant should have recused himself from the vote because he was the target of the proposal for censure.
Bylaw 9270 of the District’s Board Policy Manual describes the conflict of interest policy applicable to Board trustees. In pertinent part, the policy provides that Board trustees may not be financially interested in any contract made by the Board or in any contract they make in their capacity as Board trustees. Any Board trustee with a financial interest in a contract shall be disqualified from voting. The Board voted to contract with
F3, and defendant cast one of the three votes in favor even though there had been no RFP pursuant to the bylaw.4 The prosecution presented evidence that, on January 15, 2021, an F3 attorney requested a staff member to provide a videoconference link to defendant and another trustee for a conference call scheduled for January 18, 2021. The staff member supplied the link the following day. On January 19, 2021, the day after the scheduled conference call, a fiscal representative of the District e-mailed a digitally-signed copy of the agreement for legal services with F3 and carbon copied Superintendent Coleman.
An F3 attorney also e-mailed Superintendent Coleman on January 19, 2021, and thanked Coleman for the Board’s support in “approv[ing] a contract with F3 at its last meeting.” The attorney also described the January 18, 2021 conversation with defendant and the other trustee as “focused on the Board’s recent consideration of the censure motion, trying to resolve and move forward from the censure motion, including steps that may improve current Board relationships, both among Board members, themselves, and senior staff and employees. The two Board members expressed an interest in having the Board consider holding a Board workshop focusing on relationships, Board member roles and responsibilities, and parliamentary procedures. We are hopeful that we can assist the Board in this important endeavor.”
The attorney e-mailed Superintendent Coleman again on January 22, 2021, with a carbon copy to defendant, and requested copies of any PRA requests relating to the censure motion, any responses by the District, the investigative report of complaints against defendant, Board minutes from meetings where the Board considered releasing the report, and any action to waive attorney-client privilege. The attorney explained, “I
4 Although the investigator testified that he believed the January 14, 2021 vote was to “consider” a contract with F3, other facts indicate that the vote approved the F3 contract, including a January 19, 2021 e-mail forwarding a digitally-signed agreement from the District’s fiscal representative to F3 and a January 19, 2021 e-mail from an F3 attorney thanking the Board for having approved the legal contract with F3, as described post.
believe you indicated that the Board took action to permit the release of the report in response to the PRA request,” and “I am trying to figure out exactly what action the Board took with regard to releasing the report.”
Superintendent Coleman e-mailed the F3 attorney on January 29, 2021, advised that he spoke with defendant about the need to clarify the F3 contract as it relates to the scope of services being provided by F3, and asked if the attorney would forward a revised contract. In response, the attorney asked if there was a special Board meeting that night and advised the contract previously approved would provide the necessary authority for legal services, and the Board could approve any additional special circumstances to authorize additional services. Coleman replied that no meeting was scheduled and after speaking with defendant, Coleman understood the contract would remain the same, but the Board could approve and specify the scope of the services. The attorney confirmed and asked when the special meeting would be scheduled.
The special Board meeting was held on February 3, 2021. Superintendent Coleman told the investigator that defendant requested the February 3, 2021 meeting. Coleman stated that he did not understand why F3’s legal services were necessary. The special meeting agenda item for the legal contract with F3 describes, “Approve contract for specialized legal services with the education law firm of [F3] due to unique demands of a particular issue and urgent related timing restrictions.” At the meeting, Coleman reminded defendant that no RFP had been issued to permit other law firms to compete for the legal contract. The minutes of the meeting provide that the Board was to consider approving the contract with F3 because the unique demands of the issue or situation required it and describes the purpose of the legal contract as “assistance regarding the unique censure motion, and related issues, including by not limited to the 2020 investigation and PRA requests for the same.” Coleman told the investigator that two Board trustees asked defendant to identify the emergency that would excuse an RFP, but defendant failed to do so.
Trustee Coronel told the investigator that she did not know why it was necessary to contract with F3 and the Board never declared an emergency. During Board meetings where the contract was discussed (including the Feb. 3, 2021 meeting), she asked several times for an explanation as to why the F3 contract was necessary and why proper procedures were not followed (referring to the RFP requirement). Coronel also advised the investigator that an F3 attorney was present during the January 14, 2021 closed session meeting and she heard the attorney providing defendant and another trustee with personal legal advice that did not relate to District business, including issues of personal civil liability. Coronel told defendant that he should not vote on the legal contract because it posed a conflict of interest in that the contract appeared related to defendant’s personal interests and not District business.
One member of the public objected to defendant voting on the issue because defendant was the subject of the censure, which is a conflict of interest. Several members of the community called for the Board to reject the proposal to contract with F3 because it appeared designed to provide personal counsel to defendant and for defendant to recuse himself from the vote due to the conflict of interest.
Trustee Lawson told the investigator that during the February 3, 2021 meeting, the Board “was caught completely off guard and that they did not understand why this firm was being hired.” During the meeting, Lawson advised defendant that the Board had not declared an emergency to justify bypassing the RFP process and the contract was illegal. Defendant did not advise what emergency excused the RFP process and only stated that he had already talked to the lawyers and the contract was going forward. Lawson also expressed her belief that defendant’s participation in the vote was a conflict of interest because the F3 contract appeared to be related to defendant’s personal issues and not District issues.
Schools Legal Service was then serving as the District’s counsel.5 Grant Herndon was the Schools Legal Service attorney who attended the February 3, 2021 meeting to provide legal advice regarding the F3 contract. During the meeting, Herndon advised the Board that it could hire a law firm but needed to either use the RFP process or the Board would need to vote and agree on a declared emergency to bypass that process. The Board did not vote on any circumstances that created an emergency to justify bypassing the RFP process.
The Board voted to contract with F3, and defendant cast one of the three votes in favor.
The District paid F3 $3,230 for legal services through January 31, 2021, from an invoice dated February 23, 2021, and $8,672 for legal services through February 28, 2021, from an invoice dated March 22, 2021. These invoices describe the legal services provided by F3 and were related to defendant’s censure motion and the PRA request. For example, the description of work in the February 23, 2021 invoice included a January 18, 2021 “[t]eleconference with Board leadership regarding background facts, Board censure action and consideration; discuss Board options”; a January 21, 2021 teleconference regarding the censure motion and release of report; reviewing and forwarding e-mails to Schools Legal Service regarding a response to the PRA on January 25, 2021; conferencing with District counsel; analyzing issues involving the Board’s retention of counsel; and a January 27, 2021 teleconference with defendant and another trustee “regarding investigation, censure, and related PRA requests and initial strategy regarding same and contracting with firm to assist on this specific issue.” The March 22, 2021 invoice concerned the preparation of a revised contract for legal services, closed session issues, analysis of the District’s failure to notify a former employee of the release of
5 Schools Legal Service and F3 both provided legal services and representation to school boards and districts.
personnel file information in response to the PRA request,6 and review of the redacted report and exhibits prior to disclosure.7 Superintendent Coleman told the investigator that F3 was performing legal work regarding the censure motion and the PRA request, which benefited defendant regarding his own personal issues. After reviewing the F3 invoices, Trustee Coronel concluded that the legal work related to defendant’s issues regarding the censure motion and the PRA request. II. Section 995 ruling.
During argument, the trial court expressed its that view that the evidence was not sufficient to establish count 1, because defendant did not “take any money at all.” Regarding count 2, the trial court commented, “I don’t see how it is a conflict of interest. [F3] was retained by the [B]oard. Yes, they didn’t follow the RFP procedure, but I [am] not sure that’s a felony. [F3] represented the [B]oard. They didn’t represent him.” The trial court stated that defendant did not have a financial interest in F3, and it could not understand how defendant would have benefited by hiring F3. Concluding that the evidence showed F3 had been acting on behalf of the Board and not defendant, the court found that defendant did not derive a financial benefit from the F3 legal contract or F3’s work. The court concluded that the mere fact that defendant was the subject of the censure or that he did not wait for the RFP process before contacting F3 did not prove that F3 was working for his personal benefit or that he misappropriated public funds.
6 Defendant previously worked for the District, and the PRA requested his employment records. 7 The prosecutor also introduced evidence that, if the censure passed and defendant was removed from the Board, he would lose approximately $21,962.40 in medical benefits provided to him as a Board trustee and would be required to expend money for personal leadership training.
DISCUSSION
I. Sufficient evidence presented at the preliminary hearing supports the offenses charged in counts 1 and 2. The People argue that the evidence presented at the preliminary hearing establishes facts sufficient to hold defendant to answer to the charges of misappropriating public monies and making a contract in which he had a financial interest as a member of a school district, and the trial court erred in granting defendant’s motion to set them aside. We agree.
A. Standard of Review A court properly sets aside all or part of an information upon finding that “the defendant had been committed without reasonable or probable cause.” (§ 995, subd. (a)(2)(B).) “ ‘ “ ‘Reasonable or probable cause’ means such a state of facts as would lead a [person] of ordinary caution or prudence to believe, and conscientiously entertain a strong suspicion of the guilt of the accused.” ’ ” (People v. Mower (2002) 28 Cal.4th 457, 473.)
“To establish probable cause sufficient to overcome a section 995 motion, ‘the People must make some showing as to the existence of each element of the charged offense.’ [Citation.] ‘Evidence that will justify a prosecution need not be sufficient to support a conviction.’ ” (People v. Scully (2021) 11 Cal.5th 542, 582.) An “information should be set aside only when there is a total absence of evidence to support a necessary element of the offense charged.” (People v. Superior Court (Jurado) (1992) 4 Cal.App.4th 1217, 1226.) “ ‘We will not set aside an information “if there is some rational ground for assuming the possibility that an offense has been committed and the accused is guilty of it.” ’ ” (Scully, at p. 582.)
“ ‘On review … the appellate court in effect disregards the ruling of the superior court and directly reviews the determination of the magistrate .…’ ” (People v. Gonzalez (2017) 2 Cal.5th 1138, 1141.) Insofar as the motion “rests on consideration of the evidence adduced, we must draw all reasonable inferences in favor of the information [citations] and decide whether there is probable cause to hold the defendant[] to answer.’ ” (Lexin v. Superior Court (2010) 47 Cal.4th 1050, 1072 (Lexin).)
“[A]lthough there must be some showing as to the existence of each element of the charged crime [citation] such a showing may be made by means of circumstantial evidence supportive of reasonable inferences on the part of the magistrate.” (Williams v. Superior Court (1969) 71 Cal.2d 1144, 1148.) “However, … an information will not be set aside merely because each element of the charged crime is not established by direct testimony. Rather, the inquiry is whether the evidence … discloses circumstances from which the magistrate might reasonably have inferred the existence of each element of the charged crime.” (Id. at pp. 1148–1149.)
“A reviewing court may not substitute its judgment as to the weight of the evidence for that of the magistrate, and, if there is some evidence to support the information, the court will not inquire into its sufficiency.” (Rideout v. Superior Court (1967) 67 Cal.2d 471, 474.)
B. Misappropriation of Public Monies 1) Applicable Law
Section 424, subdivision (a)(1), (7) provides: “Each officer of … any … district … and every other person charged with the receipt, safekeeping, transfer, or disbursement of public moneys, who … [¶] … [w]ithout authority of law, appropriates the same, or any portion thereof, to [their] own use, or to the use of another … [¶] … [¶] … [i]s punishable by imprisonment in the state prison for two, three, or four years, and is disqualified from holding any office in this state.” “[T]o be found guilty under section 424[, subdivision (a)(1)], a defendant must act without lawful authority; must know or be criminally negligent in failing to know that [they] lack[] legal authority; must act with respect to public moneys; and must take sufficiently affirmative action with respect to those moneys that [they] can be said to have ‘appropriate[d]’ them.” (People v. Hubbard (2016) 63 Cal.4th 378, 397, sixth bracketed insertion in original.)
“Section 424[, subdivision (a)(1)] makes criminal the appropriation of public funds to oneself or another without authority of law.” (Stark v. Superior Court (2011) 52 Cal.4th 368, 395 (Stark).) “The ‘law’ applicable to the acts and omissions in these provisions of section 424 is the authorizing law, which is extraneous to the penal statute. Liability under section 424 arises when the officer or custodian, bound by these authorizing laws, acts without authority (§ 424[, subd. (a)(1)]) …. [Citation.] For the sake of clarity, we will refer to these authorizing laws as ‘nonpenal laws,’ to distinguish them from the crimes defined in section 424. In Stark’s circumstances, for example, the nonpenal law relied on by the People includes the Government Code and the [b]oard resolutions.” (Id. at p. 397, fn. omitted.)
The presence or absence of legal authorization is an essential element of the offense and a “ ‘fact’ ” about which the defendant must have knowledge in order to act with wrongful intent. (Stark, supra, 52 Cal.4th at pp. 397–398.) “Thus, the People must prove, as a matter of fact, both that legal authority was present or absent, and that the defendant knew of its presence or absence”8 (id. at p. 398) or was criminally negligent in failing to know the legal requirements underlying the section 424 charge (id. at p. 399). “As with any mental state, the People may prove this knowledge by reference to the facts and circumstances of the case.” (Id. p. 398.)
2) Analysis
The facts presented by the prosecutor demonstrate that defendant’s actions and activities were irregular and outside the usual procedures of the District. The question is, based upon a review of the evidence presented at the preliminary hearing, whether there
8 It is sufficient if defendant knew generally that a nonpenal law required or prohibited his conduct. (Stark, supra, 52 Cal.4th at p. 398.)
was some rational ground for the magistrate to assume not only that some violation of law had occurred, but that a violation of section 424, subdivision (a)(1) had occurred and defendant committed the violation.
This is obviously not the typical case of a violation of section 424, subdivision (a)(1), a section more often used in situations where a public employee or official, in the course and scope of their employment, receives money and converts the money to their own use rather than turning it over to the public entity (see People v. Best (1959) 172 Cal.App.2d 692, 694 [bail money accepted by police officer who never turned money over to city]) or where the employee in their official capacity, having access to public moneys and having the authority to disburse the public moneys for certain purposes, embezzles the money to their own purpose (see People v. Little (1940) 41 Cal.App.2d 797, 798 [city employee having access to city funds embezzled them]).
The charges against defendant do not involve acts that fit either of the typical scenarios. Here, defendant is alleged to have used his position as president of the Board, and the trust and respect accompanying that position, to enter into a legal contract with a law firm he had solicited and with whom he was communicating to obtain legal advice, purportedly on behalf of the Board, but would further his personal goals of minimizing the risk of censure, avoiding personal liability, and minimizing disclosure of the negative investigative facts underlying the censure resolution, with the District paying the expense.
Bylaw 9124 empowers the Board to contract with attorneys for legal advice or to prepare and conduct District litigation or other duties as assigned by the Board or superintendent, but as the Board president, defendant was limited by Board parameters in conferring with District counsel and needed authorization of the majority of the Board. When defendant communicated with F3 on January 8, 2021, defendant did not have authorization of the majority of the Board to seek outside counsel or to negotiate a contract for legal services. Even though the Board voted in favor of the contract on
January 14, 2021, the contract was not legally authorized because it had neither been the result of the RFP process nor subsequent to a finding of emergency to dispense with the RFP process. The evidence also shows that further voting related to the F3 contract on February 3, 2021, was insufficient to bypass the RFP process because the Board was not asked to specify and vote as to the nature of the emergency that would otherwise excuse it.
According to the censure resolution, defendant admitted that he completed a fiveday training on Board policies and administrative regulations, which would have included the Board’s authority regarding legal contracts. Considering the training, the e-mail correspondence relating to the legal contract, as well as the comments of the public and other Board trustees concerning the legal contract, defendant would have known the F3 contract was unlawful, or he was criminally negligent in not knowing.
Board records do not indicate the legal issues to be addressed by F3, but evidence supports that the contract would benefit defendant personally. The attempt to contract with F3 coincided with a media request for the investigative report supporting defendant’s censure and his employment records. Defendant had defeated the censure resolution in December 2020, but release of the investigative report would provide details of the allegations and could cause him embarrassment or renewed attempts to remove him from the Board. Given that the Board had previously contracted with an independent attorney to conduct the censure investigation, the Board had access to the independent attorney regarding any advice needed for the censure resolution. School Legal Services served as the District’s general counsel, which would typically include any PRA requests. The magistrate could reasonably infer that the F3 contract was to address the media request for records and limit disclosure of information detrimental to defendant because evidence shows that defendant acted outside the rules in seeking F3’s legal services, legal counsel was available to the Board without the need for F3 services, and defendant had a motive to resist disclosure of the investigative report and his prior employment records.
Additionally, no other Board trustee offered any reason which necessitated F3’s services. In an e-mail to Superintendent Coleman, defendant characterized F3 as a “specialized experienced Firm,” but during conversation, defendant advised that he had “just picked [F3] out of the phone book,” seemingly at odds with his description of F3.
The prosecutor also provided evidence that one Board trustee overheard legal discussions between an F3 attorney and defendant that concerned legal advice as to defendant’s personal civil liability for his actions leading up the censure resolution. The evidence supports an inference that defendant personally benefitted from the F3 legal contract by obtaining legal advice relating to his censure and limiting disclosure pursuant to the PRA request without having to pay for an attorney at his own personal expense.
During the section 995 hearing, defendant suggested that the purpose of the F3 legal contract was described in an e-mail to Superintendent Coleman by an F3 attorney on January 19, 2021. The F3 attorney described meeting with defendant and another trustee after the January 14, 2021 vote and discussions regarding F3 assisting the Board to “resolve and move forward from the censure motion,” steps to improve the Board’s relationship with senior staff and employees, workshops focusing on relationships, Board member roles and responsibilities, and parliamentary procedures. The trial court concluded that it would be normal to engage a law firm to address the Board’s turmoil as a result of the censure motion. However, the description of the work performed by F3 as reflected in the February and March 2021 invoices do not contain any references to education classes or workshops for improving Board relations but seem to address several topics that would be of personalized concern to defendant.
We may not substitute our judgment as to the weight of the evidence for that of the magistrate, and having found evidence to support that the F3 legal contract was to limit disclosure of the investigative report in response to the PRA request, we will not inquire into its sufficiency. (Rideout v. Superior Court, supra, 67 Cal.2d at p. 474.) In short, the evidence from the preliminary hearing shows that defendant acted without lawful authority in contracting with F3, knew or was criminally negligent in failing to know the contract was unlawful, and caused the Board’s monies to be used to further his personal interests in limiting disclosure of the investigative report leading to the censure resolution and otherwise limiting his personal liability for its conclusions without expending his own funds.
The evidence sufficiently demonstrates that defendant took “affirmative action with respect to those moneys that he … can be said to have ‘appropriate[d]’ them.” (People v. Hubbard, supra, 63 Cal.4th at p. 397.) Therefore, we find the evidence from the preliminary hearing is sufficient to hold defendant to answer to the charge of misappropriation of public monies.
C. Making a Contract While Having a Financial Interest 1) Applicable Law
“Section 1090 provides in relevant part: ‘Members of the Legislature, state, county, district, judicial district, and city officers or employees shall not be financially interested in any contract made by them in their official capacity, or by any body or board of which they are members.’ It codifies the long-standing common law rule that barred public officials from being personally financially interested in the contracts they formed in their official capacities. [Citations.] [¶] The common law rule and section 1090 recognize ‘[t]he truism that a person cannot serve two masters simultaneously ….’ [Citations.] ‘The evil to be thwarted by section 1090 is easily identified: If a public official is pulled in one direction by his financial interest and in another direction by his official duties, his judgment cannot and should not be trusted, even if he attempts impartiality.’ ” (Lexin, supra, 47 Cal.4th at pp. 1072–1073, fn. omitted, third bracketed insertion in original.)
“To determine whether section 1090 has been violated, a court must identify (1) whether the defendant government officials or employees participated in the making of a contract in their official capacities, (2) whether the defendants had a cognizable financial interest in that contract, and (3) (if raised as an affirmative defense) whether the cognizable interest falls within any one of section 1091’s or section 1091.5’s exceptions for remote or minimal interests. [Citations.] Proof of a violation of section 1097, the provision criminalizing violations of section 1090, requires a further showing that the section 1090 violation was knowing and willful.” (Lexin, supra, 47 Cal.4th at p. 1074, fn. omitted.)
2) Analysis
The focus of section 1090 is the making of a contract in which one has impermissible interest. (Lexin, supra, 47 Cal.4th at p. 1074.) The information alleges that defendant illegally participated in making the F3 contract. It is undisputed that defendant initially sought out and communicated with F3, put the issue of the contract on the January 14, 2021 agenda, and voted on entering into it. Furthermore, we conclude that the evidence is such that a reasonable person could conclude defendant had a financial interest in the contract.
“ ‘[T]he term “financially interested” in section 1090 cannot be interpreted in a restricted and technical manner.’ [Citation.] The defining characteristic of a prohibited financial interest is whether it has the potential to divide an official’s loyalties and compromise the undivided representation of the public interests the official is charged with protecting. [Citation.] Thus, that the interest ‘might be small or indirect is immaterial so long as it is such as deprives the [people] of his overriding fidelity to [them] and places him in the compromising situation where, in the exercise of his official judgment or discretion, he may be influenced by personal considerations rather than the public good.’ ” (Lexin, supra, 47 Cal.4th at p. 1075, second and third bracketed insertions added.) Direct and indirect interests are equally prohibited. (Ibid., citing Thomson v. Call (1985) 38 Cal.3d 633, 645.)
The prosecutor presented evidence that defendant’s conduct had been the subject of an investigation and the proposed Board resolution to censure him. When the resolution was defeated in December 2020, media requested disclosure of the investigative report and defendant’s former employment records with the District. Defendant had a personal interest in limiting disclosure of the report, which could have resulted in negative publicity and a renewed censure resolution, depending upon the public’s response. Some evidence was presented that the Board voted in a closed session on January 14, 2021, to waive attorney-client privilege and release the investigative report in response to the PRA request, and yet F3’s invoices show charges for reviewing and analyzing redactions to the investigative report and strategies and options for responding to the PRA request, as well as issues pertaining to the release of the personnel file information contained in the PRA request (the PRA request sought defendant’s personnel file from his prior District employment).
The magistrate concluded it was at least a question of fact whether one could infer from the sequence of events regarding the F3 legal contract that the District paid over $11,000 in legal fees to F3 to defendant’s advantage and to protect his private concerns. The evidence supports the prosecution’s argument that defendant used the contract to further his own personal interests in limiting disclosure of the investigative report on his conduct and personnel records without having to expend his own monies to personally engage the services of an attorney.
We agree that the evidence from the preliminary hearing demonstrates a strong suspicion that defendant perceived a personal benefit by using F3 and the District’s monies to further his personal interests. “[P]rohibited financial interests are not limited to express agreements for benefit and need not be proven by direct evidence. Rather, forbidden interests extend to expectations of benefit by express or implied agreement and may be inferred from the circumstances.” (People v. Honig (1996) 48 Cal.App.4th 289, 315 (Honig).) At the stage of a motion to set aside the information, the prosecution’s evidence is strong enough to proceed.
The trial court, in granting the motion to set aside counts 1 and 2, concluded that defendant did not have a conflict of interest in the F3 legal contract because he was not a partner in F3 and could not have benefitted from the contract, nor did he receive a kickback from the contract, and because F3 owed a duty to the District, F3’s work did not benefit defendant. However, the prosecution provided evidence that but for defendant’s personal interest in limiting disclosure of the censure-related documents in response to the PRA request and his vote affirming the contract, F3 would not have been hired to work on these issues and the District would not have paid $11,000 in legal fees. As long as a contract is directly or indirectly the result of a conflict of interest, the contractual terms are irrelevant. (Honig, supra, 48 Cal.App.4th at p. 314.)
A public officer need not acquire an interest in a contract (as in the case of selfdealing ) or share in the contract’s profits to come within Government Code section 1090’s proscription. (Honig, supra, 48 Cal.App.4th at p. 315.) Government Code section 1090 targets any interest which would prevent a public official from exercising absolute loyalty and undivided allegiance to the governmental entity they serve. (Honig, at p. 315.) Even if a public official makes a contract in which his interest is small or indirect, a crime is established so long as the interest “ ‘is such as deprives the [state] of his overriding fidelity to it and places him in the compromising situation where, in the exercise of his official judgment or discretion, he may be influenced by personal considerations rather than the public good.’ ” (Ibid.)
As we have discussed, defendant received the benefit of legal advice concerning his personal interests from the F3 contract without expending personal monies for the legal advice and could influence the District’s response to the PRA request through the contract. Therefore, we find the evidence from the preliminary hearing is sufficient to hold defendant to answer to the charge of misappropriation of public monies.
DISPOSITION
The trial court’s order setting aside counts 1 and 2 of the information is reversed.
The trial court is directed to vacate its May 8, 2025 order granting defendant’s section 995 motion and thereafter issue a new and different order denying the motion.
DeSantos, J., Concurring and dissenting.
I respectfully dissent in part. As for count 1, I do not believe the magistrate’s conclusion that the evidence presented at the preliminary hearing established reasonable or probable cause that defendant misappropriated public monies without legal authority under Penal Code section 424 was reasonable. As such, I would affirm the trial court’s order granting defendant’s Penal Code section 995 motion as to count 1.
To prove a violation of Penal Code section 424, subdivision (a)(1), the People must prove that defendant was a person “charged with the receipt, safekeeping, transfer, or disbursement of public moneys”; took public money for his own or someone else’s use without legal authority; and did so with actual knowledge or criminal negligence. (People v. Hubbard (2016) 63 Cal.4th 378; Stark v. Superior Court (2011) 52 Cal.4th 368, 399.)
As the majority points out, the present case is not a typical violation of Penal Code section 424. The approximately $11,000 defendant was alleged to have taken was paid to F3 for legal services rendered in accordance with a contract approved of by a majority of the Board. The People contend the evidence presented at the preliminary hearing demonstrated this was a result of a “scheme” engineered by defendant to obtain $11,000 of individual legal services and “ha[ve] the School District pay the bills.” Such a conclusion, in my view, is unreasonable based on the evidence presented.
The People did not establish that the Board majority’s decision to contract with F3 was not authorized by their bylaws or was otherwise illegal, despite some irregularities. It is undisputed the RFP process was not followed, but Board Bylaw No. 9124 allows for bypass of RFP procedures “when a majority of the Board determines that the unique demands of a particular issue or emergency situation so requires.” (Emphasis added.) The discussion at the preliminary hearing and the majority focus on whether an emergency situation was identified, but it appears to me that the majority of the Board was acting under the former condition. The evidence shows the Board obtained assistance from F3 “for specialized legal services … due to unique demands of a particular issue and urgent related timing restrictions,” as stated in the minutes for the February 3, 2021 special board meeting. Citing Board Bylaw No. 9124, the minutes state that the “unique censure motion, and related issues, including but not limited to the 2020 investigation and PRA requests for the same” necessitated a contract with F3 without initiating an RFP. Even if defendant was not authorized to begin discussions with F3, which, unlike the majority, I do not believe was established by the evidence, the decision to enter into a contract for legal services without undergoing the RFP process was in essence ratified by the majority of the Board when it voted to approve the contract.
I acknowledge that the superintendent and other witnesses did not believe it was necessary to either bypass the RFA process or contract with F3, but I am hesitant to base criminal liability on what could be, on the preliminary hearing record, a legitimate difference of opinion among Board members, even taking into consideration the burden of proof at the preliminary hearing stage.
The People also did not offer evidence to support that defendant inappropriately influenced the votes of the other Board members by fraud or duress, nor that they were coperpetrators in defendant’s alleged scheme, and therefore it appears to me their votes to approve the contract were legitimately supported by belief that F3’s services were appropriate and necessary. For contrast, in Webb v. Superior Court (1988) 202 Cal.App.3d 872, this court found an atypical violation of Penal Code section 424, subdivision (a)(1) where a county supervisor who engaged in an elaborate ploy to fund a construction project on both county and city property through dishonest means. Evidence was presented in that case that though the board of supervisors had partly authorized expenditures for this project, the defendant supervisor had not been forthcoming about what authorized expenditures would be for and acted outside the scope of the authorizations. (See Webb, at pp. 891-892 (conc. & dis. opn. of Ardaiz, J.).) As I have stated, the People did not present evidence that defendant made misrepresentations to the
Board in the present case. I am troubled by the implication that the other Board members who voted to approve the contract are also open to some criminal liability under the People’s theory without more evidence regarding their actions.
I also believe the People did not make a showing that the money paid to F3 was for defendant’s personal use. Such a showing, to me, requires an unreasonable inference that F3 was improperly rendering individual services to defendant.1 In contracting with the Board as its client, F3 bore a professional responsibility to the Board. To provide legal advice to defendant to the detriment of its client, the Board, would have been a conflict of interest on behalf of F3 and an ethical violation. (See Cal. Rules of Prof. Conduct, rule 1.7 [“A lawyer shall not, without informed written consent from each client … represent a client if the representation is directly adverse to another client in the same or a separate matter.”].) The People offered no evidence and did not argue that F3 acted unethically in its representation in accordance with the contract. Without this evidence, it appears to me the majority of the Board legitimately contracted with F3 and received proper representation from which it presumably benefitted, making any benefit defendant received incidental and not, to my satisfaction, a criminal misappropriation.
As for count 2, I agree with the majority that a viable question of fact for the jury exists as to whether defendant perceived some personal indirect financial benefit from the contract with F3, so as to render his participating in making the contract a conflict of interest within the meaning of Government Code section 1090, and the trial court’s order setting aside count 2 of the information should be reversed.
1 Even if defendant acted improperly by acting as the deciding vote in approving the F3 contract, in order to support the People’s theory, the People would have had to show that the money paid to F3 was for defendant’s personal use. Notably, the People’s theory is not that defendant’s misappropriation was for the use of the Board or F3, but for his own use.