What you need to know about restitution
Daniel Lalain's attorney had worked out a pretty good deal. Lalain had been looking at a first degree felony theft -- over a million dollars -- but he was pleading guilty to only the fifth degree variety of that offense, theft of between $500 and $5,000. He was a first offender and fell into the "mandatory probation" provision of HB 86, so what's the worst that could happen?
Well, being ordered to pay restitution of just north of $63,000 made the list.But yesterday, in State v. Lalain, the Supreme Court took that off his tab, but missed an opportunity to clarify the law in this area.
Just the facts, ma'am. Lalain was an engineer for an aero-space company, and when he suddenly quit, the company found that he'd taken trade secrets with him. They not only sued him, they pressed criminal charges, and when the police executed a search warrant, they recovered the property he'd taken.
That caused the company to drop their civil suit, but when Lalain showed up for sentencing, the prosecutor presented a bill from the company stating that they'd spent over $55,000 in employee labor "in support of this case," and another $7,665 for a forensic accounting firm to determine the value of the property taken. In fact, the prosecutor explained that it had been their office's idea to have the company pay for an investigation: the company "undertook a number of expenses which the county could never have afforded to pay for in order to investigate this case."
The issues seemed to be fairly clear. One of Lalain's arguments in the court of appeals was that since he pled guilty to theft of between $1,000 and $7,500, the latter figure was the most that could be ordered for restitution. Most of the appellate cases have come down that way, but the 8th District decided differently. That issue went up to the Supreme Court on a certified conflict. The court also accepted Lalain's discretionary appeal, which presented the issue of whether the company's investigative expense was an "economic loss" within the meaning of the restitution statute.
So what did the court do? The second issue was easily disposed of: restitution is limited to the economic losses incurred as a direct and proximate result of the offense, and the company's report didn't fall in that category. That's the correct result, but it's of limited impact, because of the unusual facts of this case. And the result here isn't certain; at another point in the opinion the court finds that, contrary to the State's assertion, Lalain did object to the award, and thus, "at a minimum, the trial court should have conducted a hearing at that point." If the report wasn't a proper item for award of restitution, why are we even talking about a hearing?
The first issue was the more significant, but the court's opinion here is murky at best. At one point it says that "we recognize that the amount of restitution is not correlated to the degree of the theft offense." It then uses as an example the theft of a motor vehicle, and holds that "a trial court choosing to order restitution in a case of grand theft of a motor vehicle is not restricted to the value corresponding to a fourth-degree felony." But that's because the crime is defined by the item stolen, not the amount: stealing a 10-year-old Kia is a 4th degree felony, the same as stealing a late-model Mercedes. Lalain's offense was defined by the amount. As Lanzinger and O'Connor argue in their partial dissent, since under the statute restitution "shall not exceed the amount of economic loss suffered by the victim as a direct and proximate result of the commission of the offense," if the offense is defined as the theft of between $1,000 and $7,500, the restitution is limited to a figure in that range. To top it all off, the court dismisses the conflict questions as having been "improvidently certified," arguably rendering what it wrote as dicta. I think you can make a decent argument that the issue of whether restitution can exceed the amount specified for a theft offense is still up in the air.
What you need to know. Although Lalain doesn't break any new ground, there are several points it reinforces about what a lawyers and judges need to do with regard to the restitution issue.
- The dissent notes that "restitution is
part of the sentence imposed," and therefore "the amount of restitution ordered
affects the maximum penalty as well as
the effect of the plea." Does this
mean that at least the possibility of restitution has to be included in
the plea colloquy? I think you could
make a decent argument that it does, which means that if it's not mentioned,
either no restitution can be ordered or the plea's invalid.
- The court has to hold a hearing on restitution only if the
defense objects to the amount. A lot of
the argument in Lalain had to do with
this, specifically whether Lalain was objecting to the entire amount or only to
the $7,665 for the preparation of the report by the forensic accounting firm. But if there's no objection, the defendant
has waived this issue.
- What evidence has to be admitted? The court in Lalain merely recites the statute on this point, which allows a
court to base the award "on an amount recommended by the
victim, the offender, a presentence investigation report, estimates or receipts
indicating the cost of repairing or replacing property, and other information." That's pretty broad. There was a case out of the 8th District a few
weeks back, State
v. Rox, which affirmed a trial court's denial of restitution where the
only evidence for it was statements by the prosecutor; "the state never offered
any receipts, documents, or witness testimony into evidence to prove its
restitution claims." That's a handy decision
to have with you when you go into a hearing.
- Plea bargaining plays a large role in this. Agreeing to pay restitution as part of a plea won't preclude a defendant from objecting to the amount; agreeing to pay a specific amount will. And that amount could even exceed the theft threshold for the offense; as the dissent notes, "nothing prevents the state from requiring 'full restitution' in a greater amount than the theft offense to which a plea has been taken."