People v. Czirban

67 Cal.App.5th 1073

282 Cal.Rptr.3d 817

The PEOPLE, Plaintiff and Respondent,

v.Ian CZIRBAN, Defendant and Appellant.

H047748

Court of Appeal, Sixth District, California.

Filed August 17, 2021

Peggy Ann Headley, Truckee, by appointment of the Court of Appeal under the Sixth District Appellate Program, for Defendant and Appellant.

Matthew Rodriquez, Acting Attorney General, Lance E. Winters, Chief Assistant Attorney General, Jeffrey M. Laurence, Senior Assistant Attorney General, Amit Kurlekar and Victoria Ratnikova, Deputy Attorneys General, for Plaintiff and Respondent.

Danner, J. Appellant Ian Czirban was charged with a number of regulatory crimes following a fatal July 2016 accident involving his bulldozer, which had been assisting the California Department of Forestry and Fire (Cal Fire) at a wildfire in Monterey County. After a bench trial, the trial court convicted Czirban of procuring or offering a false or forged instrument, tax evasion, failure to collect, account for, or pay taxes, and misdemeanor failure to secure payment of workers' compensation insurance. For these convictions, the trial court suspended imposition of sentence and placed Czirban on felony probation for three years with various conditions, including the payment of a $10,000 fine under Labor Code section 3700.5.

On appeal, Czirban contends that his convictions for tax evasion, failure to pay taxes, and failure to secure payment of workers' compensation insurance must be reversed because he did not have an employment relationship with his bulldozer drivers, an element of those offenses. Czirban further contends that this matter should be remanded to allow the trial court to reduce his probationary term under Assembly Bill No. 1950 (2019-2020 Reg. Sess.) (Assembly Bill 1950) and because the trial court failed to understand that it had discretion whether to impose the $10,000 fine.

For the reasons explained below, we reverse the order of probation and remand this matter for resentencing with directions to the trial court to modify Czirban's probationary term in accordance with Assembly Bill 1950. We also direct the trial court to issue a new sentencing minute order upon Czirban's resentencing to reflect the oral pronouncement of judgment. In all other respects, we affirm the judgment.

I. FACTS AND PROCEDURAL BACKGROUND

A. Procedural Background

In May 2018, the Monterey County District Attorney filed an information charging Czirban with insurance fraud ( Pen. Code, § 550, subd. (b)(3) ; count 1), workers' compensation fraud ( Ins. Code, § 11760, subd. (a) ; count 2), two counts of procuring and offering a false or forged instrument ( Pen. Code, § 115, subd. (a) ; count 3 [occurring on or about March 15, 2016] and count 4 [occurring on or about May 2, 2014]), tax evasion ( Unemp. Ins. Code, § 2117.5¹ ; count 5), failure to collect, account for, or pay taxes ( § 2118.5 ; count 6), and misdemeanor failure to secure payment of workers' compensation insurance ( Lab. Code, § 3700.5, subd. (a) ; count 7).

Czirban waived his right to a jury trial and was tried by the court in 2019. During trial, the district attorney moved to dismiss count 1, and the trial court granted the motion. At the close of trial, the court found Czirban guilty of counts 4 through 7 and not guilty of counts 2 and 3. The trial court did not state any explicit factual findings or issue a written decision regarding the offenses submitted for verdict.

In December 2019, the trial court suspended imposition of sentence and placed Czirban on probation for three years with various conditions. One of the probation conditions (condition No. 17) required Czirban to pay a $10,000 fine under Labor Code section 3700.5 to the California Workers' Compensation Fraud Account through the Monterey County Revenue Department.²

Czirban timely appealed.

B. Evidence Presented at Trial³

The parties stipulated that, on July 26, 2016, Robert Reagan III, was operating a bulldozer owned by Czirban at the Soberanes wildfire in Monterey County. Reagan was ejected from the bulldozer and suffered fatal crushing injuries as the bulldozer rolled on top of him. He died instantly.

Following the accident, Cal Fire examined the workers' compensation insurance information it had on file for Czirban, and an investigation into Czirban's business commenced.

Czirban owned Czirban Concrete Construction. The business was first licensed as a concrete contractor in February 2010, by the California Contractors State License Board (CSLB). Czirban's ex-sister-in-law, Ashley Taylor, was his insurance broker for several years. Between 2011 and 2014, Taylor helped Czirban acquire for his business three workers' compensation insurance policies from the State Compensation Insurance Fund (State Fund). The first policy went into effect in May 2011, but it was canceled in October 2011, for "[f]ailure to make premium payment when due and failure to report payroll with premium when due." The cancellation led to a suspension of Czirban's contractor's license for failure to maintain workers' compensation insurance.

In June 2012, Donald Bartunek, an enforcement representative with CSLB, investigated some work being done by Czirban Concrete Construction.⁴ Bartunek encountered three workers (including Czirban's brother) at a job site. Bartunek checked CSLB's database to see if Czirban Concrete Construction was licensed. He learned that it was licensed and had submitted an exemption from workers' compensation insurance dated December 2011. On the exemption form, Czirban had endorsed the statement, "I do not employ anyone in the manner subject to the workers' compensation laws of California."

After Bartunek determined that the workers were not employees of the homeowner, he issued a stop order. Later that day, Bartunek spoke to Czirban. Czirban told Bartunek, " ‘These are my employees.’ " Bartunek discussed with Czirban the requirement for workers' compensation insurance and Czirban indicated that he "knew that." Czirban asked Bartunek for a "warning for not having workers' compensation insurance" because "he was seeking it" and "was going to get it." Bartunek told Czirban "there was no warning." Based on Bartunek's investigation, CSLB cited Czirban for filing a false workers' compensation exemption form. CSLB found that "in June of 2012 Mr. Czirban had employees and at that time should have had workers' [compensation]" insurance in place. CSLB also suspended Czirban's contractor's license for a time.

Czirban's second workers' compensation insurance policy from State Fund went into effect on January 28, 2013. However, that policy was canceled in September 2013, for failure to pay the premium and failure to submit payroll reports when due.

Czirban's third policy from State Fund (No. 9086514-14) was issued with effective dates of January 18, 2014, through January 18, 2015. That policy, however, was rescinded in early February 2014 (with the rescission applicable as of January 18, 2014), because Czirban's initial deposit check was returned for insufficient funds. Prior to the recission, a certificate of liability insurance coverage, dated January 22, 2014, was issued by Czirban's insurance brokerage to CSLB. Czirban's broker, Taylor, also sent a copy of that certificate to Czirban. Taylor never sent a certificate to Cal Fire and never handwrote information onto a certificate to include additional certificate holders. When shown at trial the certificate possessed by Cal Fire that listed it as a certificate holder (in addition to CSLB), Taylor did not recognize some handwriting on it. According to Taylor, neither the insurance brokerage nor State Fund would handwrite information for a certificate holder onto a certificate of insurance coverage.

On February 20, 2014, Czirban spoke with a State Fund employee about the rescinded workers' compensation insurance policy. State Fund's activity log entry for this conversation noted, "[Czirban] called regarding rescinded policy. Explained that new quote will be necessary and that he should have his broker submit a new application. [Czirban] understood and will contact his broker." State Fund never sent any correspondence or notifications about the rescinded policy to Cal Fire.

In April 2014, Czirban applied to the California Department of General Services for a small business certification. The application (which was signed under penalty of perjury) stated that Czirban Concrete Construction had an average of "2" employees "for the last four quarters" (capitalization omitted).

Also in April 2014, Czirban met with Cal Fire heavy equipment coordinator Marc Lingenfelter about "the process of getting signed up to be an equipment vendor" for Cal Fire pursuant to an Emergency Equipment Rental Agreement (EERA). Lingenfelter understood that Czirban owned a concrete construction company and an EERA for Czirban's bulldozer would be "a new venture" for Czirban. Cal Fire enlisted help from private vendors like Czirban through their EERAs to augment and support Cal Fire's fire suppression activities. Pursuant to an EERA, Cal Fire could call on a vendor to provide equipment and equipment operators (including bulldozers and bulldozer drivers) as needed during an emergency incident. The vendor was required to have certain insurance including either workers' compensation insurance for employees or "major medical insurance" for independent contractors. Cal Fire would not execute an EERA without the requisite proof of insurance from the vendor and an inspection of the vendor's equipment.

When Cal Fire needed assistance from an EERA vendor at an emergency incident, Cal Fire could ask the vendor to provision its equipment as a "12-hour resource" or a "24-hour resource." If the vendor accepted a 24-hour resource request, the vendor would have to provide the equipment to Cal Fire for work 24 hours a day. When equipment was provided as 24-hour resource, the vendor received higher compensation for the assignment and had to provide two...