People v. Whight
36 Cal. App. 4th 1143 (1995)
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Rule of Law:
For the crime of theft by false pretenses, the element of reliance is satisfied even if the victim conducts an investigation into the defendant's representation, so long as the victim's decision to part with property is materially influenced by the representation and not based solely on the results of the investigation.
Facts:
- Theodore Whight opened a checking account with Tri Counties Bank and was issued an ATM card.
- After Whight's account became overdrawn, the bank mailed him a letter stating the account would be closed if no deposit was made.
- On July 10, 1991, having received no deposit, the bank closed Whight's account, which, from the bank's perspective, simultaneously canceled his ATM card.
- In March and April 1992, Whight used the ATM card from his closed account at four different Safeway stores to obtain cash.
- Safeway utilized a computer verification system operated by Wells Fargo to authorize ATM transactions.
- Due to a technical glitch, the verification system repeatedly failed to get a response from Whight's bank and instead sent Safeway a 'stand-in' code, indicating no verification could be made.
- Safeway's corporate policy was to approve transactions receiving a 'stand-in' code after a 25-30 second delay to avoid inconveniencing customers, thereby accepting the financial risk.
- Following this policy, Safeway employees gave Whight over $19,000 in cash across numerous transactions.
Procedural Posture:
- Theodore Whight was charged in a California trial court with four counts of fraudulent use of an access card and four counts of grand theft by false pretenses.
- A jury convicted Whight on all eight counts.
- In a subsequent bench trial, the judge found true an allegation that Whight had served a prior prison term.
- Whight appealed the judgment of the trial court to the California Court of Appeal, Third District.
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Issue:
Does a victim's use of a faulty computer verification system, which fails to provide an actual authorization and instead returns an inconclusive 'stand-in' code, negate the reliance element required for a conviction of grand theft by false pretenses?
Opinions:
Majority - Sparks, Acting P. J.
No. A victim's use of a faulty computer verification system does not negate the reliance element for theft by false pretenses because when the system fails to provide an actual authorization, the victim is left to rely on the defendant's implicit representation that the means of payment is valid. To support a conviction for theft by false pretenses, the prosecution must show the defendant made a false representation with intent to defraud, and the owner parted with property in reliance upon that representation. The defendant's presentation of the ATM card was an implicit, and false, representation that it was valid. Reliance need not be the sole cause for the victim parting with property, but it must be a material influence. While a victim who relies solely on their own independent investigation cannot claim reliance on the defendant's pretense, that is not what occurred here. The computer system did not provide Safeway with an authorization—faulty or otherwise—upon which to rely. Instead, it returned a 'stand-in' code, signifying a lack of response. Safeway's decision to proceed with the transaction was a choice to accept the risk and rely on the defendant's implicit representation of validity, not on any information from its investigation. Therefore, the reliance element was established. The court also reversed the separate convictions for ATM theft because the prosecution failed to prove that the bank gave Whight the statutorily required written notice of the card's revocation.
Analysis:
This case clarifies the application of the reliance element in theft by false pretenses within the context of modern, automated financial transactions. It establishes that a defendant cannot use a system failure or glitch as a defense to negate reliance. The decision prevents a loophole where a fraudster could claim a victim relied on a machine rather than the fraudulent act, especially when the machine's output is inconclusive. This precedent is significant for prosecuting fraud in an increasingly automated commercial environment, affirming that the ultimate reliance can still be placed on the initiator of the fraudulent transaction, even when technology is an intermediary.
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