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Restitution in Criminal Cases - A Victim's Perspective
By Martin H. Plone, D.V.M.
CRIMINAL RESTITUTION - A VICTIM'S PERSPECTIVE
Martin H. Plone, D.V.M.
Revised March 24, 1998
Most state codes and the federal code have restitution provisions for victims of crime to be compensated by the defendant for all economic losses caused by the defendant's conduct. Although this paper addresses restitution in California, the concept should be similar in most state and federal criminal actions.
HISTORY OF RESTITUTION IN CALIFORNIA (1)
In 1965, the Legislature created a special fund to provide compensation to victims of violent crime. In 1973, the Legislature substantially revised the statutory scheme to provided among other things, for financial assistance from the restitution fund for medical expenses and lost wages to victims of violent crimes, with a maximum of $10,000 in each category (Government Code Section 13965). A new statute, Government Code Section 13967, authorized a court- ordered fine up to $10,000, to be paid into the restitution fund by any criminal defendant convicted of a violent crime that caused injury or death to the victim. Government Code Section 13960 defined the term "victim."
In 1982, the voters of California passed Proposition 8, an initiative to reform the state's criminal justice system. The initiative included an amendment to the Constitution: "It is the unequivocal intention of the People of the State of California that all persons who suffer losses as a result of criminal activity shall have the right to restitution from the persons convicted of the crimes for losses they suffer. Restitution shall be ordered from the convicted persons in every case, regardless of the sentence or disposition imposed, in which a crime victim suffers a loss, unless clear and extraordinary reasons exist to the contrary." California Constitution, Article 1, Section 28(b). The amendment directed the Legislature to adopt implementing legislation.
The new legislation, enacted in 1983, included Penal Code Section 1203.04, requiring trial courts to order restitution from defendants convicted of crimes and placed on probation; Welfare and Institutions Codes Section 729.6, imposing a similar requirement in all juvenile delinquency matters; Penal Code Section 1202.4, requiring all persons convicted of a felony to pay a "restitution fine" of up to $10,000, payable into the restitution fund for victims of violent crime; and several laws designed to aid victims filing civil actions against persons convicted of crimes. (Government Code Section 26820.4(b); Government Code Section 72055(c); Code of Civil Procedure Sections 37, 340.3 and 1021.4; Penal Code Section 1191.2: former Welfare and Institution Code Section 656.2, now Penal Code Section 679.02.
_____________________________________________________________________
1. Most of this section is taken from People v. Broussard (1993)
5 Cal.4th 1067, 1072-1076
The Legislature also amended Government Code Section 13967 to provide that in every criminal case, a person convicted of a crime must pay "restitution in the form of a penalty assessment" to the state and the county in which the offense was committed. Curiously, the Legislature did not enact legislation either requiring or authorizing trial courts to order defendants who were convicted of crimes but were not given probation to make restitution to any of the victims of their crimes. In such cases, victims of violent crimes had an indirect restitution remedy through the restitution fund article 1, but victims of nonviolent crimes had no recourse other than to sue the person who committed the crime.
This legislative omission was noted in People v. Downing (1985) 174 Cal.App.3d 667, 672. In 1986, the Legislature responded with the passage of Government Code Section 13967(c) which provided for restitution when probation was denied up to a total of $10,000 in lieu of or imposing all or a portion of the restitution fine as dictated in subdivision (a).
In 1990, the code was amended to allow for restitution for the full amount of the loss suffered by the victim from the criminal conduct of the defendant. AB 3169 signed into law on September 28, 1994, among other changes, placed Government Code Section 13967 in Penal Code Section 1202.4. AB 817 amended former Penal Code Section 1203.04 and also moved it into Penal Code Section 1202.4 on August 3, 1995. Juvenile restitution is now found in Welfare and Institutions Code Section 730.6 and 730.7.
FORMER CODES
For crimes committed before September 28, 1994 and the defendant denied probation former Government Code Section 13967(c) controls which dictates that when probation is denied, restitution shall be imposed in the amount of the losses, as determined. When restitution as a condition of probation is ordered, then Penal Code Section 1203.04 controls for crimes committed before August 3, 1995.
The terms "victims, injury and losses" are defined in Government Code Section 13960. Some take the position that Government Code Section 13960 applies only to victims of violent crime for purposes of payment from the Recovery Account. However, appellate courts have not limited those definitions to victims of violent crime, but have applied them to victims of economic crime as well. People v. Broussard (1993) 5 Cal.4th 1067, 1075-1077, People v. Valdez (1994) 24 Cal.App.4th 1194, 1199-1200.
Prior to January 1, 1997, restitution was addressed in Penal Code Section 1202.4((f),(g) and (h). Losses were defined in Penal Code Section 1202.4(g). Enforcement of a restitution order by a victim was and still is addressed in Penal Code Section 1214. (For recent amendments and current wordings of these codes, see pages 17- 24).
PURPOSE OF RESTITUTION
California Appellate courts have concluded that restitution has different functions depending on if the defendant is granted or denied probation. "When restitution is imposed as a condition of probation under section 1203 et seq., rehabilitation of the criminal is the primary goal of restitution [Citation.] "Implicit in the concept of rehabilitation is the need to first deter criminal activity. Courts have generally found an order requiring the defendant to compensate the victim to be a deterrent to future activity. [Citations.]" "In contrast "Government Code section 13967 is designed to compensate crime victims for economic losses suffered as a direct result of a crime." [Citations.] Although rehabilitation of the criminal is an ancillary purpose of a restitution award under this section, the primary purpose is to compensate California residents who suffer a loss as a result of crime." People v. Foster (1993) 14 Cal.App.4th 939, 950.
The United States Supreme Court has concluded the purpose of restitution is to accomplish the penal goals of the State, not to compensate victims. Kelly v. Robinson (1986) 479 U.S. 36, 51-52
It is seriously doubted that most victims would agree with these interpretations. From the standpoint of victims and society, all of these functions are equally important regardless of the disposition of the defendant. The victim has no control if the defendant is incarcerated or given probation, charged at the federal or state level, or the terms of a plea agreement.
The appellate courts and the Legislature have overlooked a primary function of restitution; to reimburse victims of crime and not subject victims to the costs and rigors of the civil process to obtain an order for the same losses suffered for which restitution is imposed that is enforceable as any other money judgment.
This issue was visited in People v. Downing (1985) 174 Cal.App.3d. 667, 672, where the Court observed that the Legislature had not adequately complied with the constitutional mandate enunciated in Article 1, Section 28(b) which resulted from the passage of Prop. 8 in 1982. The Downing court said, "[W]e question whether the Legislature fully implemented the constitutional mandate . . . The electorate gave a clear directive requiring restitution to be ordered in every case involving a victim absent extraordinary reasons. We doubt it anticipated the current statutes, which in some cases still leave the victims to individually bear the costs and endure the rigors of civil judgments."
The Downing court recognized that an intent of the restitution codes is to ease the financial burden of victims of crime by not being subjected to costs of the civil process to recover the same loss for which the defendant was convicted or stipulated to restitution. Until the enactment of former Government Code Section 13967(c) in 1986, restitution was only imposed when the defendant was given probation. If the defendant was incarcerated, no restitution was awarded. Responding to the Downing court, the Legislature passed Section 13967(c) as victims of nonviolent crime had no recourse other than to sue the person who committed the crime. People v. Broussard (1993) 5 Cal.4th 1067, 1073, 1074.
One of the anomalies of restitution is that the term "victim" and "losses" are defined in Government Code Section 13960 for the purposes of restitution when probation is denied, but is not defined in any code when probation is granted. The Foster court found no conflict with this statutory scheme and on page 953, suggested it was the result of legislative intent. If that is true, then the Legislature has created two classes of victims. There is nothing in the language of Article 1, Section 28(b) to suggest that was the intent of the voters in passing Proposition 8.
Economic losses encompass the losses for which restitution has been imposed include: past and future medical care, People v. Phelps (1996) 41 Cal.App.4th 946; loss of wages, People v. Nguyen (1994) 23 Cal.App.4th 32, 42-45, loss of profits, People v. Tucker (1995) 37 Cal.App.4th 1; Principal; replacement or repair cost of the property taken or damaged, attorney's fees and costs incurred in recovering the loss, mileage and expenses incurred in attending interviews with prosecutors and attending hearings are losses that would be allowed pursuant to Government Code Section 13960 and/or Penal Code Section 1202.4. Restitution may be imposed on dismissed counts if the plea is freely made, all conditions are approved by the court and a Harvey waiver is obtained. People v. Beck 17 Cal.App.4th 209, 215. Also see Penal Code Section 1192.3.
Former Government Section 13967(c) mandated that a restitution order "shall identify the losses to which it pertains." Newly amended Penal Code Section (f)(3), mandates that a restitution order "shall identify each victim and each loss to which it pertains... " When the Legislature used the term "shall", the intent was to give no discretion to the trial court to list just a "bottom line sum." People v. Blankenship (1989) 213 Cal.App.3rd 992, 998. However, judges often fail to identify the losses in the sentencing forms, merely stating the total amount of restitution ordered. In doing so, it is almost impossible to truly enforce the criminal restitution order as a civil judgment if each victim and the amount of each of their losses are not reflected in the record. New Penal Code Section 1202.4(f)(3) requires the sentencing court to prepare the restitution order and identify each victim and each loss to which it pertains.
The victim's loss can be totally written off on income taxes and carried over year to year. (Internal Revenue Code Section 165) However, if the victim and the amount of their loss is not reflected in the restitution order, it would be difficult to verify the loss on an audit.
It would also be difficult to support recordation of a civil abstract of judgment without the victim's name and the amount of the loss reflected. A restitution order without the ability to enforce it is essentially no restitution at all.
VICTIM'S RIGHTS
Restitution must be ordered whenever the victim suffers an economic loss as a result of the defendant's conduct and has priority over the restitution fine when the defendant has limited resources. People v. Valdez (1994) 24 Cal.App.4th 1194, 1202. Restitution cannot be the subject of a plea agreement. "The Legislature left no discretion or authority with the trial court or the prosecution to bargain away the victim's constitutional and statutory right to restitution. As such, it cannot properly be the subject of plea negotiations." People v. Valdez, supra, 24 Cal.App.4th 1194, 1203. Victims must be notified and be given the opportunity to attend all restitution hearings. Melissa J. v. Superior Court (1987) 190 Cal.App.3d 476. (Also see new Penal Code Section 1202.4(f)(1)).
Although the defendant can appeal a restitution order and do so with the services of a court appointed attorney, no published California case has addressed the standing of a victim to appeal a restitution order, although several federal cases have held victims do not. United States v. Johnson (1993) 983 F.2d. 216, (11th Cir.), United States v. Mindel (1996) 80 F.3d. 394, (9th Cir.). As a real party in interest or intervenor, it would seem that the victim should have standing to do so. When the prosecution appeals a restitution order, they are essentially doing so for the benefit of the victim as well as the penal interests of the government. SB 150 amended Penal Code Section 1202.4(f)(1) to give victims, upon motion to the sentencing court, standing to have restitution orders amended. Hopefully, victims at the federal level will someday also have that standing.
While the Valdez court addressed restitution to a victim involved with a count to which the defendant entered into a plea agreement, unless restitution is agreed upon for all counts, including those dismissed, the plea agreement should not be accepted by the sentencing court. As victims have no control as to which counts are included in a plea agreement, it would be unfair to those victims whose losses were identified in dismissed counts not to have restitution imposed while victims who losses are fortuitously identified in the counts to which the defendant agreed, have restitution ordered in their favor. If one follows the holding of the Valdez court, the victims constitutional right to restitution must never be the subject of a plea agreement. There would be little incentive for victims to cooperate with the criminal justice system if this were allowed to routinely occur and only lead to unnecessary bitterness by those victims who are excluded from the restitution process.
In addition to full restitution for all determined economic losses, all victims of crime should be ensured that they will not be excluded from meaningful participation in the criminal justice system and that they will be treated with dignity, respect and sensitivity, and the rights of victims of crime should be honored and protected by law enforcement agencies, procurators, and judges in a vigorous manner. (Section 1 of Stats. 1990, c. 45).
DEFENDANT'S RIGHTS
It is important to victims that the trial court preserve the rights of the defendant so that the restitution order is not reversed on appeal, which when happens, unnecessarily adds to the grief already suffered by victims.
Before 1990, restitution was limited to $10,000 regardless of the number of victims or counts charged. For crimes committed before 1990, restitution is limited to that maximum and it is reversible error to impose more than $10,000. Failure to object at the time of the hearing does not waive appeal as a restitution order exceeding $10,000 for crime prior to 1990 is unauthorized. People v. Zito, supra, pp. 740-742, People v. Beck, supra, p. 222.
The defendant has a right to a hearing with regards to restitution. Any objections in most instances must be raised at the time of the hearing or appeal is waived. The amount of the restitution fine and the restitution order cannot exceed the amount of the probation officer's recommendation and the order must specifically identify the losses. Failure to object at the time of the hearing does not waive appeal on those issues. People v. Rezendez (1993) 12 Cal.App.4th 98, 110-115.
DEFENDANT'S ABILITY TO PAY
While federal law under 18 U.S.C. 3664 leaves discretion with the sentencing court to consider the defendant's ability to pay when ordering restitution to victims, no such discretion exists under California law pursuant to new Penal Code Section 1202.4(g). Ability to pay would not be an issue in a civil judgment and should never be in a criminal restitution order. If serves no deterrent to future criminal activity or bring an understanding of the harm the defendant's conduct has caused to the victims and society to send a message that when money or property is taken, it need not be returned if the fruits of the criminal conduct has been spent or disposed of. There is no reason to believe that a defendant will not have funds in the future through inheritance, lottery winnings, or hopefully, lawful employment.
INTEREST
The loss of the use of money is a pecuniary loss for which the victim should be compensated. As a restitution order is enforceable as a civil judgment and civil judgments accrue postjudgment interest at 10% pursuant to C.C.P. Section 685.010(a), it would follow that restitution orders pursuant to Penal Code Section 1202.4 would also.
Effective January 1, 1997, Penal Code Section 1204.2(f)(3)(F) includes interest at the rate of 10 percent per annum that accrues as of the date of the sentencing or loss, as determined by the court. Previously, postjudgment interest accrued, at the discretion of the court, when the defendant was ordered to pay restitution as a condition of probation pursuant to Penal Code Section 1214.5, yet there was no statutory or case authority to do so when the defendant was incarcerated, although some trial courts did, creating two classes of victims with one having an economic advantage over the other.
This would appear to have been in conflict with the appellate court decisions that have held that when a defendant is denied probation and incarcerated, the purpose is to compensate victims for the economic loss caused by crime. Financial rape is often as emotionally and financially devastating as physical rape. For those who invest funds to earn interest to live on, especially the retired, the loss of the ability to earn interest is a severe economic loss that greatly impacts their lives. Interest would be compensated for in a civil action regardless whether the defendant is incarcerated and should be in all restitution orders.
There was no reason why an incarcerated criminal defendant should receive an economic advantage not afforded to nonincarcerated civil defendants or incarcerated civil defendants. Without the imposition of postjudgment interest, there is little incentive for the defendant to make payment to the victim nor does it deter future criminal conduct. Just because defendants are incarcerated, does not necessarily mean they have no financial ability pay the restitution and interest imposed upon them or will not in the future.
Government Code Section 13960(d)(3) includes in the meaning of "pecuniary loss", "the loss of income or the loss of support that the victim or the loss that the * * * derivative victim has incurred or will incur as a direct result of an injury or death. The Broussard court on pages 1076-1077, rejected the assertion that the term "victim" applies only to those who suffer a physical injury. In doing so, the Broussard court explained. "the legislative history of section 13967, subdivision (c) did not contemplate that the statute would be subject to section 13960's limited definition of the term victim" The same rational should be applied to the term "pecuniary loss."
The new Penal Code Section 1202.4(f)(3)(C), (previously Penal Code Section 1202.4(g)(3)), includes wages or profits lost due to injury incurred by the victim, it should apply to lost interest prior to sentencing if the loss was from an investment. As Penal Code Section 1202.4(f)(3)(F) now allows for interest from the date of the loss as determined by the court, it would appear there is additional statutory authority to impose prejudgment interest on all losses. However, interest would be at 10 percent per annum and not at the contractual interest rate, if one existed, which may be more or less depending on the terms of the contract.
RESTITUTION ORDERS AND INSURERS
No area of restitution law is as controversial as the dilemma of ordering restitution to a victim who has been reimbursed by an insurer or other third party compensator. The appellate courts have gone in mixed directions on this issue leaving the trial courts in total confusion.
Traditionally, appellate courts had held that an insurer who reimburses the victim for the loss suffered by the criminal conduct of the defendant who is incarcerated is not entitled to a restitution order as the insurer is not a direct victim of the crime and their duty to reimburse the victim flows from their contractual duty to do so. People v. Williams (1989) 207 Cal.App.3d 1520, 1524. In People v. Sexton (1995) 33 Cal.App.4th, 64, 70-71, restitution to an insurer from a defendant granted probation was also not affirmed for the same reasoning.
However, in People v. Foster, (1993) 14 Cal.App.4th 939, 950- 954, it was held that an insurance company is treated as a victim under the Penal Code provisions governing restitution to a victim who has not been reimbursed when probation is granted, but not when the defendant is incarcerated and that was the intent of the Legislature.
That an insurer be included in a restitution order under one statutory scheme, probation granted, but not the other when probation is denied is without merit. There is nothing in the language of Proposition 8 to indicate that was the intent of the voters. "It is the unequivocal intention of the People of the State of California that all persons who suffer losses as a result of criminal activity shall have the right to restitution from the persons convicted of the crimes for losses they suffer." (Emphasis added.)
Current Penal Code Section 1202.4(k) defines victim to include immediate surviving family, businesses, governmental agencies, etc., when they are a direct victim of crime. The purpose of this section was to further define the term "victim" to be broader than solely a natural person. To interpret this section to prohibit restitution to the victim's insurers as they are not the "direct victim" would be contrary to the provisions of Proposition 8 as insurers have suffered a loss as a result of the defendant's criminal conduct.
In People v. Birkett (1997) 54 Cal.App.4th. 1483, direct restitution to the insurers of victims was affirmed following People v. Foster and declining to follow People v. Sexton. The Birkett court held that once an insurance company has indemnified the victim a crime, the insurance company stands in the shoes of the victim and is therefore entitled to restitution from the perpetrator of the crime. Petition for review was granted by the California Supreme Court on September 3, 1997. (Case No.S062379). This was extremely significant as in the past few years, three appellate decisions that affirmed direct restitution to the victim's insurer were decertified for publication, People v. Correia et al. (1995) 36 Cal.App.4th 1779, People v. Nilsen (1996) 41 Cal.App.4th 936, and People v. Jimenez (1994) 27 Cal.App.4th 55.
In 1995, AB 817 (Hodge) added former Penal Code Section 1202.4(g), (now Penal Code Section 1202.4 (f)(2)), to mandate restitution be ordered regardless of any indemnification or subrogation rights of third parties. The intent of AB 817 was to correct the inequity which resulted between insured and uninsured victims. If the defendant caused economic loss to a victim that did not have insurance, restitution was imposed, but if the defendant happened to fortuitously pick a victim who was insured, no restitution was imposed except the victim's deductible giving the defendant an essentially free economic ride. (Assembly Bill 817 (Hodge), The Restitution Act of 1995, unpublished analysis by the California Department of Justice, fourth page). Those instrumental in the passage of the bill insist that insurance companies who are not the direct victim of crime cannot have restitution imposed in their favor. Their position is that restitution must be imposed in favor of the victim and then it is left for the victim to work out repayment received from the defendant with the insurance company.
From a victim's perspective, this makes no sense. Usually the victim is reimbursed by an insurer shortly after the loss occurred. However, it often is months to several years before the defendant is sentenced and much longer if the defendant does make any restitution. Victims of crime want to put the experience behind them once they have been reimbursed by their insurer. Not ordering restitution to their insurers forces victims to be the middle person for the insurer indefinitely. Also, the victim may no longer be doing business with the same insurer, yet would have to forward payments to the insurer who most likely would not know what they pertain to. Even if subrogation rights exist, it still complicates the matter which could be easily dealt with by the sentencing court by imposing restitution directly to third party compensators. The defendant is not prejudiced as it makes no difference who he pays, as long as payment is made and a message is sent that there are economic consequences as well as penal consequences of criminal conduct.
At the federal level, the 1997 amended version of 18 U.S.C. 3664(j)(1) mandates that restitution shall be imposed in favor of insurers or anyone else who has compensated the victim, but provides the victim must be paid first for any loss not paid before the provider of the compensation. From a victim's perspective, this does make more sense. It would seem that the federal and state restitution statutes should be harmonized with each other.
Although most insurance policies have subrogation clauses, the reality is that they are rarely enforced in this situation. This could lead to the victim being tempted to keep the restitution payments thus realizing double recovery. As pointed out in People v. Nystrom (1992) 7 Cal,App.4th 1177, 1188, the only limitation on recovery is that the victim cannot obtain double reimbursement. If the insurer is subrogated, the victim should receive restitution payment first for all losses not insured before the insurer in keeping with the spirit of the restitution concept as is mandated by new 18 U.S.C. 3664(j)(1).
However, a recently published appellate decision, People v. Sullivan (1998) 61 Cal.App.4th 337, (Petition for review filed March 13, 1998, Case No. SO68763), affirmed direct restitution to a victim that had been reimbursed by his medical insurer. The court concluded that the defendant should not receive a windfall and avoid paying restitution because the victim's insurance covered the loss.
The Sullivan court relied not only upon the provisions of Penal Code Section 1202.4, but the "collateral source" rule which applies, "Where a person suffers personal injury or property damage by reason of the wrongful act of another, an action against the wrongdoer for damages suffered is not precluded nor is the amount of damages reduced by the receipt by him of payment for his loss from a source wholly independent of the wrongdoer." [Citation].
The Sullivan court went further in citing the California Supreme Court in Helfend v. Southern Cal. Rabid Transit Dist. (1970) 2 Cal.3d 1, which rejected the argument that the collateral source rule would provide the plaintiff with a "double recovery", or windfall as insurance polices increasingly provide for either subrogation or refund of benefits upon a tort recovery. The Hefland court concluded that plaintiffs are only realizing the benefit of the premiums paid and essentially receiving the fruits of their insurance contracts.
Essentially, the Sullivan court was attempting to mix civil and criminal liability, which may not always be feasible. Although restitution orders are enforceable as if they are a civil judgment, they are not necessarily the same as a civil judgment. It has long been held that disposing of civil liability cannot be a function of restitution in a criminal case. (People v. Richards (1976) 17 Cal.3d 614, 620). The purposes of criminal and civil actions are fundamentally different. "The round peg of civil damages simply will not fit into the square hole of criminal proceedings." (In Re Brian S. (1982) 130 Cal.App.3d 523, 530. The Sullivan court may have ignored the provisions of Government Code Section 13960(d)'s definition of "pecuniary loss" as any expense for which the victim will not be reimbursed from any other source and then goes on to identify various medically related expenses. If the victim has been reimburse by their insured, then restitution should not be imposed if one follows Government Code Section 13960(d).
There are those who claim Section 13960 only applies to the State Board of Control's Victim of Violent Crime Program which is administered through the Restitution Fund. Although Government Code Section 13960(d) addresses medical expenses, no restriction to only medical expenses was made by the Nystrom court on page 1188 which simply stated, "The Legislature has defined "pecuniary loss" as "expenses for which the victim has not and will not be reimbursed from any other source." Section 13960's definition of the term "victim" and "injury" was given a broad interpretation by the California Supreme Court in People v. Broussard (1993) 5 Cal.4th 1067, 1076, 1077, to include victims of economic crime and the losses incurred as an "injury". One must assume the California Supreme Court knows how to interpret a statute and the intent of the Legislature. This was not mere dictum, but the holding of the Supreme Court.
California restitution law is in a major dilemma with regards to insurers. Much of it can be remedied by the California Legislature enacting provisions similar to 18 U.S.C. 3664(j)(1). Victims, as well as most defendants, have no control over whether criminal conduct is prosecuted at the state or federal level. They should not be prejudiced by one jurisdiction over the other. Hopefully, the Supreme Court will give firm direction in People v. Birkett with regards to this issue and the California Legislature will respond with appropriate legislation soon.
BANKRUPTCY
Restitution orders are nondischargeable in Chapter Seven bankruptcy regardless whether the defendant was granted probation, Kelly v. Robinson , supra, 479 U.S. 36, or incarcerated. In Re Steiger (1993) 159 B.R. 907 (9th Cir.). They are also nondischargeable in Chapter 13 Bankruptcy. In Re Southerland (1993) 161 B.R. 657, 11 U.S.C 1328(a)(3). Even if the debt was discharged in bankruptcy, restitution may still be order for the loss. People v. Dalvito (1997) 54 Cal.App. 4th 557.
ENFORCEMENT OF A CRIMINAL RESTITUTION ORDER
1. Recordation of an Abstract of Judgment. (C.C.P Section 674)
As criminal restitution orders are enforceable as if the were a civil judgment, they support the basis for recordation of an Abstract of Judgment. The Criminal Division of the Superior Court must supply a certified copy of the sentencing order free of charge to the victim upon request which is used as the basis for recordation of an Abstract of Judgment. If a restitution order is unsatisfied after probation or probation is revoked, the restitution order converts to a civil judgment. (Penal Code Section 1214(b)). An Abstract of Judgment will attach to any real property the defendant now owns or will in the future. C.C.P. Section 697.340(b). The Abstract of Judgment remains a lien against the property after it is transferred by the debtor and is senior to any subsequent lien against the property. (C.C.P. Section 697.390)
An Abstract of Judgment based upon a civil judgment is enforceable for a period of 10 years from the date of entry of the judgment. (C.C.P. Sections 683.020, 697.310(b)). The judgment can be renewed for a period of an additional ten years by filing an application for renewal with the court after five years following entry of judgment, but prior to the expiration of the ten-year period. (C.C.P. Sections 683.110, 683.130(a)). However, new Penal Code Section 1214(c) eliminates the need for renewal of an abstract of judgment based upon criminal restitution orders and they have a life time enforceability. The Abstract of Judgment also supports a Writ of Execution for garnishment of wages and attachment of personal property.
Some counties will not allow recordation of an Abstract of Judgment based upon a criminal restitution order. In doing so they are clearly wrong. Penal Code Section 1214(b) reads; "In any case in which a defendant is ordered to pay restitution, the order to pay restitution is deemed a money judgment...and shall constitute a civil judgment enforceable in the same manner as is provided for the enforcement of any other money judgment." There is no way to enforce any money judgment, criminal or civil, without recordation of an Abstract of Judgment or issuance of a writ of execution. The Legislature and appellate courts have responded admirably to the needs of victims of crime. Sadly, several judicial districts have not in this instance.
2. Recordation of a Judgment Lien on Personal Property (Form J-1) C.C.P. Sections 697.510, et. seq.
The Form J-1 can be purchased at most major stationary stores and is filed with the Secretary of State. It is enforceable for five years and is not renewable. (C.C.P. Section 697.510(b)). The filing fee is $5.00. The form need not be accompanied by the sentencing order nor does the Secretary of State desire it.
By filing the form J-1, the victim perfects his/hers interest in the personal property of the defendant over an unsecured creditor seeking the same property. C.C.P. Section 697.600. It does not attach to motor vehicles, mobilehomes or commercial coaches. (C.C.P. Section 697.530(d)(2)).
If a victim intends to enforce a restitution order, it is extremely important that an Abstract of Judgment be recorded in each county that the defendant lives or may live in the future as well as the Form J-1 with the Secretary of State.
SOURCES OF RECOVERY FOR VICTIMS OF ECONOMIC CRIME FROM OTHER THAN THOSE OF THE DEFENDANT
1. Title Insurance Companies:
If real property is involved, title companies have exposure to protect their insured from recorded, void documents which if declared canceled, would affect title of their insured. A deed that is forged, signed in blank and later completed without the grantor's consent, and a deed that is not legally delivered is void, ab initio, and does not protect a bona fide purchaser or encumbrancer. Delivery of a deed does not mean the physical transfer of the document, but the intent of the grantor that the document be immediately operative. (Miller & Starr, (1990) Current Law of California Real Estate, 2d. Section 6:43, pp. 571-575).
"A deed obtained as a result of fraud committed against the grantor can be rescinded and the title reclaimed by the grantor. Whether or not the deed is void or merely voidable depends on the nature of the fraud.
If the grantor is aware that the instrument is a deed and that it will convey his title, but he is induced to execute and deliver it by fraudulent misrepresentation, there is merely fraud in the inducement. When this species of fraud has been committed on the grantor, the deed is only voidable and can be relied and enforced by a bonafide purchaser.
On the other hand, if the grantor does not realize the nature of the instrument he is executing but, because of a fraud committed against him, he believes it to be some type of a document other than a deed, there is fraud in the inception. In such cases the deed is void and the title subsequently acquired by a bona fide purchaser is also void and unenforceable by him." (Miller & Starr, Supra, Section 6:60, p. 622).
The measure of damages for the loss of security of real property is the value of the property on the date the security was lost. Grudger v. Manton (1943) 21 C.2d 537, Steven v. Herman (1964) 225 Cal.App.2d. 671.
Title insurance companies are liable to third parties for damages caused by their negligence. Seeley v. Seymour (1987) 191 Cal.App.3d 844, 860-862. Title insurance companies are liable for all attorney's fees and costs to third parties for damages caused by their negligence. Prentice v. North American Title (1963) 59 C.2d. 618, 620
Although Proposition 51 eliminated joint and several liability for non-economic damages, it did not affect economic damages. Witkins, Summary of California Law, 9th (1988) "Torts" Section 51, p. 112. Therefore, a title insurance company, notary, or anyone else against whom liability was apportioned would be a source to recover from. They in turn would have to seek indemnity from the defendant or other tortfeasors. Although an earlier decision reversed joint and several liability in criminal restitution orders, People v. Hernandez, (1991) 226 Cal.App.3d 1374, 1378, later decisions have declined to follow the Hernadez court and have affirmed it. People v. Zito (1992) 8 Cal.App.4th 736, People v. Arnold (1994) 27 Cal.App.4th 1096
2. The Department of Real Estate, Recovery Account: B & P Code Sections 10470-10481)
If the defendant was functioning within the capacity of a licensed real estate broker, committed fraud, deceit and/or conversion of funds and is not able to respond to the judgment, the Recovery Account allows for recovery of $20,000 for each transaction and a maximum of $100,000 per broker. For most victims of real estate fraud, this could be an excellent source of recovery. However, attorney's fees are not recoverable, Rogers v. Edmonds (1988) 200 Cal.App.3d. 1237, only principal, interest at the legal rate, and costs. Temple v. Kerwin (1989) 209 Cal.App.3d 1087
In the past, the Department of Real Estate has not recognized criminal restitution orders as civil judgments for their purposes and required a final judgment from a civil court although no statutory or case authority existed that allows them to do so. There is no reason why a victim must go to the needless expense of obtaining a civil judgment for the same loss for which restitution was imposed unless punitive damages are desired.
SB 1685 amended Penal Code Section 1214(b) to allow the victim to have the ability to apply for restitution from any fund established for the purpose of compensating victims in civil cases. The intent of this amendment was to allow victims of real estate fraud to be able to use a criminal restitution order as the basis for application to the Department of Real Estate, Recovery Account. The Legislature took the matter further in SB 150 which amended B & P Code Section 10471 to specifically include criminal restitution orders effective January 1, 1998.
The Department of Real Estate requires that the final order must be protected from bankruptcy. Restitution orders are not dischargable in Chapter Seven bankruptcy. Therefore, it is important the restitution order identify the losses.
3. Notaries:
Notaries are liable for all damages caused by their negligence and malfeasance. Government Code Section 8214, Miller & Starr, Supra, Sections 6:38-6:40
4. Income Tax Considerations:
If the loss was from theft, embezzlement, conversions of funds, fraud. etc., those loses are detectable and carry over from year to year. (Internal Revenue Code Section 165) The tax savings alone will be of great economic benefit. However, most restitution payments made by the defendant would then have be declared as income.
CIVIL CODES RELATING TO CIVIL ACTIONS AGAINST CRIMINAL DEFENDANTS
1. Code of Civil Procedure Section 340.3
Unless a longer period is prescribed for a specific action, in any action for damages against a defendant based upon such person's commission of a felony offense for which the defendant has been convicted, the time for commencement of the action shall be within one year after judgment is pronounced......
2. Code of Civil Procedure Section 352.5
If, after a cause of action accrues against a person, that person comes under an order for restitution as a condition of probation with respect to the specific act or omission giving rise to such person's liability, the time during which the order is in effect is not part of the time limited for commencement of such an action.
These two code sections would appear to toll the statute of limitations for civil actions.
3. Code of Civil Procedure Section 1021.4
In an action for damages against a defendant based upon that defendant's commission of a felony offense for which the defendant has been convicted, the court may, upon motion, award reasonable attorney's fees to a prevailing plaintiff against the defendant who has been convicted of the felony.
SUMMARY
Restitution serves many functions: to make the victim whole for the economic losses suffered from the criminal acts of the defendant without having to endure the rigors and expense of the civil process; to rehabilitate the defendant by making him/her aware of the damage caused to the victims and society; and to deter future criminal activity by the defendant and others who contemplate similar conduct by bringing to their attention the economic consequences of criminal conduct can be as severe and longer lasting than the penal consequences.
Historically, restitution first served to heal the bond and trust that was broken by the offender and to prevent blood feuds. While that may not now be the main function of restitution today, it can be a strong aspect of the healing process for victims. Restitution gives a sense of a message being sent to the defendant that he/she didn't get away with the crime and gives victims control, if they chose to exercise it, once the defendant is released from probation or incarceration and parole. However, the enforcement of a restitution order must be done with a degree of temperance. It does not serve society or the victim to put the offender's back to the wall financially to a such a degree that force the him/her to revert back to criminal conduct or seek retaliation against the victim.
While incarceration serves as part of the healing process, given the choice, most victims of economic crime would invariably choose restitution over incarceration, although most victims of violent crime would most likely choose incarceration first. Restitution is analogous to chemotherapy for cancer. It won't work for everyone, but there are times when it does and unless given the opportunity to try it, one will never know.
This paper only touches upon restitution and is not meant to give an overall review. It does not address restitution and probation, restitution by juvenile defendants, the restitution fine and Restitution Fund administered by the State Board of Control for victims of violent crime who suffer an emotional or physical injury.
The Legislature and appellate courts have responded and continue to respond admirably with regards to the rights of victims of crime to have restitution imposed. However, it falls upon probation officers, prosecutors and sentencing judges to ensure and protect those rights on behalf of victims. Those involved in the criminal justice system should contemplate if they or their family were victims of crime, how would the criminal justice system work for them and how would they want it to function.
Appellate court interpretation of restitution and Legislative amendments are an ongoing and variable process that changes daily. It is important to attorneys who represent criminal defendants to be aware of those changes so that trial courts do not exceed their authority and for attorneys who represent victims to insure full restitution for all economic losses are imposed upon the defendant. It is equally important that trial judges understand restitution and follow the laws that address it.
____________________________________________________________________
Martin H. Plone is a practicing doctor of veterinary medicine in Livermore, California who was a victim of major fraud resulting in a loss of virtually his life's savings. In pro per, he has recovered a significant amount of the loss from sources other than the defendant, both through civil actions against third parties and enforcing the restitution order imposed in his favor as a civil judgment.
SB 1685 (Kopp) became effective January 1, 1997. It substantially amended Penal Code Sections 155.5, 1191.2, 1202.4, 1202.8 and 1214. The changes mandated by SB 1685 are as follows:
PENAL CODE SECTION 155.5
Expands concealing of assets by the defendant for the purpose of avoiding paying of a restitution fine or order to include not only the time after a plea or judgment and prior to sentencing, but also the period that a restitution order remains unsatisfied and specifies the offense as a misdemeanor or a felony depending upon the level of the original crime.
PENAL CODE SECTION 1191.2
Expands the existing requirement for the probation officer to provide the victim with information concerning the victim's right to civil recovery against the defendant to include information with regards to the requirement that the court order restitution for the victims, the victim's right to receive a copy of the restitution order from the court and enforce the order as a civil judgment and the victim's responsibility to furnish the probation department, district attorney, and the court with information relevant to his or her losses.
PENAL CODE SECTION 1202.4
Rephrases much of the existing code and moves the language around into different sections. The significant changes are found in the following new sections:
(a)(3)(B) Adds the phrase "which shall be enforceable as if the order were a civil judgment." This same phrase is found in the new subsection (i). Previous wording in the old subsection (h) stated the restitution order was enforceable as a civil judgment.
(f)(1): The court may modify the amount [of restitution], on its own motion or the motion of the district attorney or the defendant. If a motion is made for modification of a restitution order, the victim shall be notified of that motion at least 10 days prior to the proceeding held to decide the motion.
(f)(3): To the extent possible, the restitution order shall be prepared by the sentencing court, shall identify each victim and each loss to which it pertains .... The section continues and adds new losses for which restitution may be ordered including, but not limited to the following:
(F): Interest, at the rate of 10 percent per annum that accrues as of the date of the sentencing or loss, as determined by the court.
(G): Actual and reasonable attorney's fees and other costs of collection accrued by a private entity on behalf of the victim.
(g): Adds that a defendant's inability to pay shall not be considered a compelling and extraordinary reason not to impose a restitution order, nor shall inability to pay be a consideration in determining the amount of a restitution order.
(h): The district attorney, as the victims attorney, may request an order of examination pursuant to the procedures specified in Article 2 (commencing with Section 708.110) of Chapter 6 of Division 2 of Title 9 of Part 2 of the Code of Civil Procedure, in order to determine the defendant's financial assets for purposes of collecting on the restitution order.
PENAL CODE SECTION 1202.8
Adds subsection (b) to require that within 30 days of a court making an order to provide restitution to a victim or the Restitution Fund, the probation officer shall establish an account into which any restitution payments that are not deposited into the Restitution Fund shall be deposited.
PENAL CODE SECTION 1214
Adds the following to subsection (b):
A victim shall have access to all resources available under the law to enforce the restitution order, including, but not limited to the defendant's financial records, use of wage garnishment and lien procedures, information regarding the defendant's assets, and the ability to apply for restitution from any funds established for the purpose of compensating victims in civil cases. Any portion of a restitution order that remains unsatisfied after the defendant is no longer on probation or parole is enforceable by the victim pursuant to this section. Victims and the State Board of Control shall inform the court whenever an order to pay restitution is satisfied.
Amends subsection (c) to include restitution ordered as well as the fine. The former subsection only applied to a fine. This essentially eliminates the 10 year term and the need for renewal of an civil abstract of judgment pursuant to Code of Civil Procedure 683.010, et seq. A civil abstract of judgment based upon a criminal restitution order will have a life time term. This amendment was also incorporated into AB 2898 (Bowler) which was chaptered after SB 1685 and therefor is the operative bill.
SECTION 7 of SB 1685 directs the Judicial Council to:
(a) Develop or amend forms by June 30, 1997 that do all of the following:
(1) Indicate clearly, with a reference to Section 1202.4 of the Penal Code, that a restitution fine and restitution
to the victim is required to be ordered in every case, and that an order for restitution is enforceable by a victim as a civil judgment.
(2) Require an order of restitution or a restitution fine to specify a dollar amount owed by the defendant to the victim and the state.
(3)Include a reference to Section 1214 of the Penal Code, regarding a victim's rights to recovery to enforce a restitution order as civil judgment and to have access to any information necessary to assist him or her in collecting on the order, and victim's responsibility to notify the court when the restitution order is satisfied.
(b) Provide continuing education to all judges and court personal to inform them of the legal obligation of a court to order restitution of a specified dollar amount in every case and of a victim's right to enforce a restitution order as a civil judgment at any time, regardless of whether the defendant is still under the jurisdiction of the court or the correctional system or whether the defendant has declared bankruptcy.
SB 150 (Kopp), which became effective on January 1, 1998, addressed other important areas of restitution:
1. Amended Business & Professions Code Section 10471 to provide that a final state of federal criminal restitution order be the basis for application to the Department of Real Estate, Recovery Account. Prior to this bill, the Recovery Account would only recognize final orders from civil courts, forcing victims to endure the needless expense and rigors of the civil process.
2. Amended Penal Code Section 1202.4(f)(1) to allow the victim or victims to have standing to move the sentencing cour to modify a restitution order.
3. Adds Section 86(a)(11) of the Code of Civil Procedure to extend jurisdiction to the municipal courts to include all actions to enforce restitution orders or restitution fines that were imposed by the municipal court, regardless of the amount.
4. Amended Penal Code Section 1202.4(h) deleting the phrase, "as the victims attorney," in requesting an order of examination to determine the defendant's financial assets for the purpose of collecting on the restitution order.
5. Requires every employer to give any employee who is a victim of crime that occurred at the employee's place of employment written notice that the employee is eligible for worker's compensation for injuries that may have resulted from the place of employment crime.
PROVISIONS OF PENAL CODE SECTION 1202.4 WITH REGARDS TO A RESTITUTION ORDER IN EFFECT ON JANUARY 1, 1998
(a)(1) It is the intent of the Legislature that a victim of crime who incurs any economic loss as a result of the commission of a crime shall receive restitution directly from any defendant convicted of that crime.
(2) Upon a person being convicted of any crime in the State of California, the court shall order the defendant to pay a fine in the form of a penalty assessment in accordance with Section 1464.
(3) The court, in addition to any other penalty provided or imposed under the law, shall order the defendant to pay both of the following:
(A) A restitution fine in accordance with subdivision (b).
(B) Restitution to the victim or victims, if any, in accordance with subdivision (f), which shall be enforceable as if the order were a civil judgment pursuant to Section 1214.
(b) In every case where a person is convicted of a crime, the court shall impose a separate and additional restitution fine, unless it finds compelling and extraordinary reasons for not doing so and states those reasons on the record.
(1) The restitution fine shall be set at the discretion of the court and commensurate with the seriousness of the offense, but shall not be less than two hundred dollars ($200), and not more than ten thousand dollars ($10,000), if the person is convicted of a felony , and shall not less than one hundred dollars ($100), and not more than one thousand dollars ($1,000), if the person is convicted of a misdemeanor.
(2) In setting a felony restitution fine, the court may determine the amount of the fine as the product of two hundred dollars ($200) multiplied by the number of years of imprisonment the defendant is ordered to serve, multiplied by the number of felony counts of which the defendant is convicted.
(c) The court shall impose the restitution fine unless it finds clear and extraordinary reasons for not doing so, and states those reasons on the record. A defendant's inability to pay shall not be considered a compelling and extraordinary reason not to impose a restitution fine. Inability to pay be considered only in increasing the amount of the restitution fine in excess of the two hundred dollar ($200) or one hundred dollar ($100) minimum.
(d) In setting the amount of the fine pursuant to subdivision
(b) in excess of the two hundred dollar ($200) or one hundred dollar
($100) minimum, the court shall consider any relevant factors including, but not limited to, the defendant's inability to pay, the seriousness and gravity of the offense and the circumstances of its commission, any economic gain derived by the defendant as a result of the crime, the extent to which any other person suffered any losses as a result of the crime, and the number of victims involved in the crime. Those losses may include pecuniary losses to the victim or his or her dependents as well as intangible losses, such as psychological harm caused by the crime. Consideration of a defendant's inability to pay may include his or her future earning capacity. A defendant shall bear the burden of demonstrating his or her inability to pay. Express finds by the court as to the factors bearing on the amount of the fine shall not be required. A separate hearing for the fine shall not be required.
(e) The restitution fine shall not be subject to penalty assessments as provided in Section 1464, and shall be deposited in the Restitution Fund in the State Treasury.
(f) In every case in which a victim has suffered an economic loss as a result of the defendant's conduct, the court shall require that the defendant make restitution to the victim or victims in an amount established by court order, based upon the amount of loss claimed by the victim or victims or any other showing to the court. If the amount of loss cannot be ascertained at the time of the sentencing, the restitution order shall include a provision that the amount shall be determined at the direction of the court. The court shall order full restitution unless it finds compelling and extraordinary reasons for not doing so and states them on the record.
(1) The defendant has the right to a hearing before a judge to dispute the determination of the amount of restitution. The court may modify the amount, on its own motion or on the motion of the district attorney, the victim or victims, or the defendant. If a motion is made for modification of a restitution order, the victim shall be notified of that motion at least 10 days prior to the proceeding held to decide the motion.
(2) Determination of the amount of restitution ordered pursuant to this subdivision shall not be affected by the indemnification or subrogation rights of any third party. Restitution payments made pursuant to this subdivision shall be made to the Restitution Fund to the extent that the victim, as defined in subdivision (k), has received assistance pursuant to Article 1 (commencing with Section 13959) of Chapter 5 of Part 4 of Division 3 of Title 2 of the Government Code.
(3) To the extent possible, the restitution order shall be prepared by the sentencing court, shall identify each victim and each loss to which it pertains and shall be of a dollar amount that is sufficient to fully reimburse the victim or victims for every determined economic loss incurred as the result of the defendant's criminal conduct, including, but not limited to, all of the following:
(A) Full or partial payment for the value of stolen or damaged property. The value of stolen or damaged property shall be the replacement cost of like property, or the actual cost of repairing the property when repair is possible.
(B) Medical expenses.
(C) Wages or profits lost due to injury incurred by the victim, and if the victim is a minor, wages or profits lost by the minor's parent, parent, guardian, or guardians while caring for the injured minor.
(D) Wages or profits lost by the victim, and if the victim is a minor, wages or profits lost by the minor's parent, parents, guardian, or guardians, due to time spent as a witness or in assisting the police or prosecution.
(E) Noneconomic losses including, but not limited to, psychological harm, for felony violations of Section 288.
(F) Interest at the rate of 10% per annum , that accrues as of the date of sentencing or loss, as determined by the court.
(G) Actual and reasonable attorney's fees and other costs of collection accrued by a private entity on behalf of the victim.
(g) The Court shall order full restitution unless it finds compelling and extraordinary reasons for not doing so, and states those reasons on the record. A defendant's inability to pay shall not be considered a compelling and extraordinary reason not to impose a restitution order, nor shall inability to pay be considered in determining the amount of a restitution order.
(h) The district attorney may request an order of examination pursuant to the procedures specified in Article 2 (commencing with Section 708.110) of Chapter 6 of Division 2 of Title 9 of Part 2 of the Code of Civil Procedure, in order to determine the defendant's financial assets for purposes of collecting on the restitution order.
(i) A restitution order imposed pursuant to subdivision (f) shall be enforceable as if the order were a civil judgment, pursuant to Section 1214.
(j) The making of a restitution order pursuant to subdivision (f) shall not affect the right of a victim to recovery from the Restitution Fund as otherwise provided by law, except to the extent that restitution is actually collected pursuant to the order. Restitution collected pursuant to this subdivision shall be credited to any other judgments for the same losses obtained against the defendant arising out of the crime for which the defendant was convicted.
(k) For purposes of this section, "victim" shall include the immediate surviving family of the actual victim. "Victim" shall also include any corporation, business trust, estate, trust, partnership association, joint venture, government, governmental subdivision, agency, or instrumentality, or any legal or commercial entity when that entity is a direct victim of crime.
(l) At its discretion, the board of supervisors of any county may impose a fee to cover the actual administrative costs of collecting the restitution fine, not to exceed 10 percent of the amount ordered to be paid, to be added to the restitution fine and included in the order of the court, the proceeds of which shall be deposited in the general fund.
(m) In every case in which the defendant is granted probation, the court shall make the payment of restitution fines and orders imposed pursuant to this section a condition of probation. Any portion of a restitution order that remains unsatisfied after a defendant is no longer on probation shall continue to be enforceable by a victim pursuant to Section 1214 until the obligation is satisfied.
(n) If the court finds and states on the record compelling and extraordinary reasons why a restitution fine or full restitution order should not be required, the court shall order, as a condition of probation, that the defendant perform specified community service, unless it finds and states on the record compelling and extraordinary reasons not to require community service in addition to the finding that restitution should not be required. Upon revocation of probation, the court shall impose restitution pursuant to this section.
(o) The provisions of Section 13966.01 of the Government Code shall apply to restitution imposed pursuant to this section.
PROVISIONS OF PENAL CODE SECTION 1214 WITH REGARDS TO A RESTITUTION ORDER INFECTIVE JANUARY 1, 1997
(b) In any case in which a defendant is ordered to pay restitution, the order to pay restitution (1) is deemed a money judgment if the defendant was informed of his or her right to have a judicial determination of the amount and was provided with a hearing, waived a hearing, or stipulated to the amount of the restitution ordered, and (2) shall be fully enforceable by a victim as if the restitution order were a civil judgment, and enforceable in the same manner as is provided for the enforcement of any other money judgment. Upon the victim's request, the court shall provide the victim in whose favor the order of restitution is entered with a certified copy of that order. In addition, upon request, the court shall provide the State Board of Control with a certified copy of any order imposing a restitution fine or order. A victim shall have access to all resources available under the law to enforce the restitution order, including, but not limited to, access to the defendant's financial records, use of wage garnishment and lien procedures, information regarding the defendant's assets, and the ability to apply for restitution from any fund established for the purpose of compensating victims in civil cases. Any portion of a restitution order that remains unsatisfied after the defendant is no longer on probation or parole is enforceable by the victim pursuant to this section. Victims and the State Board of Control shall inform the court whenever an order to pay restitution is satisfied.
(c) Chapter 3 (commencing with Section 683.010) of Division 1 of Title 9 of Part 2 of the Code of Civil Procedure shall not apply to a judgment for any fine or restitution ordered pursuant to Section 1202.4 or Section 1203.4, as operative on or before August 2, 1995, or Section 13967 of the Government Code, as operative on or before September 28, 1994.
Martin H. Plone, D.V.M.
Updated April 1, 1998
People v. Appellate Department of the Superior Court of Los Angeles County (Gonzales) (1996) 50 Cal.App.4th 84, 57 Cal.Rptr.2d 559
Restitution may be imposed for conviction of leaving the scene an accident even though the "state of mind" of fleeing the scene was not the same as the state of mind that caused the accident.
This case followed People v. Carbajal.
People v. Arnold (1994) 27 Cal.App.4th 1096, 27 Cal.Rptr.2d 35
Court may imposed joint and several liability upon codefendants with regards to the restitution order. (followed People v. Zito)
People v. Beck (1993) 17 Cal.App.4th 209, 21 Cal.Rptr.2d 250
Restitution for dismissed counts in a plea agreement is allowable as long as the defendant agrees and states so on the record.
Restitution may be ordered for purely economic losses even if victim did not suffer physical injury.
Victims need not exhaust all possible sources of reimbursement before claiming restitution as long as the victim does not obtain double recovery.
Government may be considered a victim when it suffers a direct economic loss such as from theft or tax evasion.
Restitution for losses prior to 1990 is limited to $10,000 regardless of the number of victims or the amount of the loss.
In re Alan M. Betts (1998) 98 Daily Journal D.A.R. 3093 (Filed March 26, 1998)
Code of Civil Procedure Section 704.090 and Penal Code Section 2085.5 did not conflict when enforcing restitution from inmate's trust account.
People v. Birkett (1997) 54 Cal.App.4th 1483 (Supreme Court review granted September 3, 1997).
Court can order direct restitution to the victim's insurer.
(Note: This case declined to follow People v. Sexton and followed People v. Foster).
As this case is currently under review by the California Supreme Court, it cannot be cited as an authority.
People v. Blankenship (1989) 213 Cal.App.3d 992, 262 Cal.Rptr. 141
Restitution orders must identify the losses by reference to a factual basis for the claim.
Failure to contest the accuracy of the monetary claims in a restitution order at the time of the hearing waives appeal.
Restitution may not be ordered directly to the victim's insurer, nor may restitution be ordered to the victim for the amount the insurer paid. (Note: This would no longer hold given the provisions of current Penal Code Section 1202.4(f)(2)).
In Re Brian S. (1989) 130 Cal.App.3d 523, 181 Cal.Rptr. 778
In juvenile restitution proceedings, the juvenile court is not required to determine what damages might be recoverable in a civil action, but may instead use any rational method of fixing the amount of restitution which is reasonably calculated to make the victim whole and which is consistent with the purpose of rehabilitation.
People v. Broussard (1993) 5 Cal.4th 1067, 22 Cal.Rptr.2d 278
Victim need not suffer a physical injury to receive restitution.
Victims who suffer purely economic losses are also entitled to restitution.
People v. Campbell (1994) 21 Cal.App.4th 825, 26 Cal.Rptr.2d 825
If defendant is granted probation, need not be advised of restitution for dismissed counts even if not part of a plea agreement. Defendant must demonstrate inability to pay, not just object to the restitution at the hearing. The court did not follow People v. Walker (1991) 54 Cal.3d 1013, as this case involved probation which is an act of leniency, not a matter of right.
Court need not make an express finding on the ability to pay, only give the defendant an opportunity to respond to matters in the probation report.
People v. Carbajal (1995) 10 Cal.4th 1114, 43 Cal.Rptr.2d 681
Restitution can be ordered as a condition of probation for hit-and-run conviction if related to the loss from the collision.
(Differed from People v. Richards as defendant was convicted of leaving the scene of the accident. In Richards, defendant was acquitted for the crime for which restitution was imposed. But, in People v. Lent, even though the defendant was acquitted of one of the charges and convicted on others, restitution could be imposed if related to the convicted count. (People v.Lent is not included in this summary of restitution cases).
United States v. Catherine (1995) 55F.3d 1462 (9th Cir.)
Equity in property for purpose of credit against a restitution order is determined on the date the victim took possession of the property, not the date is was sold by the victim.
(Note: As no California court has addressed this matter, it is included as a persuasive authority).
People v. Clifton (1985) 172 Cal.App.3d 1165, 219 Cal.Rptr 904
A partial settlement with the defendant's insurer in a civil case does not prevent restitution imposed upon the defendant to the victim in a criminal proceeding.
While restitution collected from a restitution order is credited to a civil judgment, the amount collected from a civil judgment is not conversely credited to a restitution order.
People v. Cookson (1991) 54 Cal.3d. 1091, 2 Cal.Rptr.2d 176
Term of probation can be extended if restitution order is not fully satisfied when a change in circumstances exist.
People v. Cotter (1992) 6 Cal.App.4th 1671, 8 Cal.Rptr.2d 606
If restitution to the victim exceeds $10,000, no restitution fine may be imposed.
Note: This would no longer hold as current law mandates a restitution fine in addition the restitution order.
County of Alameda v. State Board of Control (1993) 14 Cal.App.4th 1096, 1113, 18 Cal.Rptr.2d 487
As county who provided medical treatment to crime victim was not a direct crime victim, county could not make claim to for restitution as was not a real party in interest.
People v. Crow (1993) 6 Cal.4th 952, 26 Cal.Rptr.2d 1
Restitution may be ordered to a county that was a victim of welfare fraud even though as a governmental agency it is not a natural person.
People v. Dalvito (1997) 56 Cal.App.4th 557,
Restitution can be imposed even if the victim's loss had been previously discharged in bankruptcy.
People v. Foster (1993) 14 Cal.App.4th 939, 18 Cal.Rptr. 1
Defendant must object at the time of the hearing or appeal is waived.
Restitution to an insurer can be imposed as a condition of probation as when probation is granted as the purpose of restitution as a condition of probation is to rehabilitate the defendant, but when restitution is imposed on an incarcerated defendant, the purpose is to make the victim whole.
People v. Franco (1993) 19 Cal.App.4th 175, 23 Cal.Rptr.325
Restitution could not be ordered to a city for workman's compensation benefits paid to an officer shot and injured.
People v. Frey (1989) 209 Cal.App.3d. 139, 256 Cal.Rptr. 810
Maximum restitution fine allowed is $10,000 regardless of the number of counts and number of victims.
People v. Friscia (1993) 18 Cal.App.4th 834, 22 Cal.Rptr.2d 656
Restitution may not be ordered to a victim for the monetary value of the time spent in preparing accounting summaries for the police.
People v. Fritchey (1992) 2 Cal.App.4th 829, 3 Cal.Rptr.2d 585
Trail Court cannot order forfeiture of truck as a condition of probation purpose of probation is to rehabilitate the criminal, not punish him.
A defendant may refuse probation if the conditions are harsh. The ability to refuse probation, however, does not bar appellant from accepting it and then contesting it on appeal. [Citations].
If victim suffers no loss, there can be no restitution, but a restitution fine is permissible.
Forfeiture of defendant's truck was an unauthorized restitution order as the truck was legally licensed and titled and the victim suffered no economic loss as the result of the defendant's criminal conduct.
People v. Guardado (1995) 40 Cal.App.4th 757, 762, 47 Cal.Rptr.2d 81
A restitution order that does not specify the amount is not enforceable, but not void if the court reserves jurisdiction to determine the amount of restitution at a subsequent time when the victim's losses could be readily ascertained.
People v. Goulart (1990) 224 Cal.App.3d. 71, 243 Cal.Rptr. 477
Restitution may be ordered for crimes not charged or dismissed if related to the criminal activity.
When taking a Harvey waiver, the court must personally advise the defendant of the penal consequences of a guilty plea.
However, if probation is granted, the defendant need not be told in advance that restitution will be imposed. Probation is an act of leniency, not a matter of right.
Restitution may be imposed for crimes that are filed beyond the statute of limitations. The statute of limitations exists to prevent the state from bring stale charges, not to prevent convicted criminals from compensating their victims.
The defendant bears the burden of proving the victim's restitution estimate exceeds the replacement cost of the stolen property.
(Note: This case incorrectly concluded state restitution orders are dischargeable in bankruptcy. They are not.)
People v. Gregg (1992) 3 Cal.App.4th 794
County can be considered a victim who suffered loss as a result of welfare fraud.
Kelly v. Robinson (1986) 479 U.S. 36, 107 S.Ct. 353
Restitution ordered as a condition of probation is not dischargeable in Chapter 7 bankruptcy
People v. Kwolek (1995) 40 Cal.App.4th 1521, 48 Cal.Rptr.2d 325
Restitution in favor of the State Board of Control may be imposed for funds expended on behalf of the victim.
Retroactive application of the section in Penal Code Section 1202.4 that applied to the Restitution Fund was allowed for the manner in which payments to the victim will be made.
Although the amendment to the Penal Code was enacted subsequent to the sentencing in this case, the amendment was merely declaratory of legislative intent and purely procedure.
It only provides for the manner in which payments to the victim will be made. No conceivable prejudice will be caused to the defendant. (p.1535)
People v. Lyons (1996) 49 Cal.App.4th 1521
Legal fees incurred for recovering embezzled assets is allowable in the restitution order, but legal fees incurred in resisting defense discovery motions is not allowable.
People v. Madrana, et al., (1997) 55 Cal.App4th 1055
Restitution covering disposal of hazardous controlled substances can be imposed against defendants jointly and severely.
Melisa J. v. Superior Court (1987) 190 Cap.App.3rd 476, 237 Cal.Rptr. 5
Victim must be notified a hearing to terminate restitution and given opportunity to attend. If not, victim must first exhaust remedies at the trial court before seeking appellate court relief.
People v. Miller (1989) 216 Cal.App.3d 758, 265 Cal.Rptr. 77
There need not be victim for a restitution fine to be imposed.
Order to pay part of the fine to the special investigations bureau was error as the bureau was not a crime victim.
People v. Moser (1996) 50 Cal.App.4th 130, 57 Cal.Rptr.2d 647
Restitution may be ordered even though victim's civil claim for same loss against defendant had been discharged in bankruptcy.
People v. Nguyen (1994) 23 Cal.App.4th 32, 44, 28 Cal.Rptr.2d 140
Restitution may be ordered for loss of wages or profits loss due to time spent to testify in court.
The constitutional mandate is to interpret the restitution laws broadly and liberally.
People v. Nystrom (1992) 7 Cal.App.4th 1177, 10 Cal.Rptr.2d 94
Failure to object to restitution at the hearing waives appeal even if not previously informed restitution would be imposed.
Money seized from defendant can be awarded to the victim.
The victim can seek restitution from directly from defendant and has no duty to collect from insurer first. The only limitation on recovery is that the victim cannot obtain double reimbursement.
People v. Ortiz (1997) 53 Cal.App.4th 791, 62 Cal.Rptr.2d 66
Non-profit trade association representing direct victims of defendant's crime is allowed restitution for investigative costs.
Restitution may be imposed for loss of profits from the defendant's criminal conduct.
People v. Phelps (1996) 41 Cal.App.4th 946, 48 Cal.Rptr.2d 855
Restitution can be imposed for future medical expenses.
Restitution is not limited to the amount of loss determined at the time of sentencing, but all determined future losses can also be imposed.
People v. Pinedo (1998) 60 Cal.App.4th 1403, 71 Cal.Rptr.2d 151
Restitution to victim for attorney fees incurred in securing settlement from defendant's insurer is allowable.
People v. Resendez (1993) 12 Cal.App.4th 98, 111-115, 15 Cal.Rptr.2d 575
Trial court cannot exceed the probation report recommendation with regards to the restitution amount without giving the defendant the right to a hearing to dispute the amount.
A restitution order must identify the losses to which it pertains.
People v. Riccio (1996) 42 Cal.App. 925, 1001 -1003, 50 Cal.Rptr.2d 52
Failure to object to the amount of restitution imposed or request a further restitution hearing waives as appeal.
People v. Richards (1976) 17 Cal.3d. 614, 620, 131 Cal.Rptr. 537
Defendant cannot be ordered to pay restitution for crimes not convicted of. (Note: This case was published prior to People v. Harvey.)
Disposing of civil liability cannot be a function of restitution in a criminal case.
People v. Rocha (1996) 48 Cal.App.4th 1060, 1072
Failure to object to the amount victim claimed as losses at the time of the hearing waives appeal.
People v. Rowland (1997) 51 Cal.App.4th 1745
Restitution is mandated by both the California Constitution and Penal Code Section 1202.4. The only discretion retained by the trial court is fixing a lessor amount than a sum that will fully reimburse the victim(s) and the court must state the reasons for doing so on the record.
While the defendant should be advised that restitution would be a consequence of a guilty plea, failure to do so will not vacate the restitution imposed if the defendant is not prejudiced by the omission.
People v. Sandoval (1989) 206 Cal.App.3d. 1544, 254 Cal.Rptr. 674
Defendant must be given a meaningful opportunity to contest the amount of restitution.
People v. Sexton (1995) 33 Cal.App.4th. 64, 39 Cal.Rptr.2d 242
Failure to object at the time of the hearing does not waive appeal where it concerns an unauthorized sentence.
Restitution cannot be ordered to the victim's insurer as insurer was not the direct victim of the crime.
(Note: This case did not follow People v. Foster and was not followed in People v. Birkett.)
In Re Southerland (1993) 161 B.R. 657
Since restitution is expressly excepted from the "super-discharge" provided for in Chapter 13 of the Bankruptcy Code, the victim is not required to file an adversary proceeding regarding the dishcargeablity of the restitution.
A surety that reimbursed victim is subrogated to the rights of the victim.
In Re Steiger (1993) 159 B.R. 907
Incarcerated defendant's restitution order is not dischargeable in Chapter 7 bankruptcy.
People v. Sullivan (1998) 61 Cal.App.4th 337, 71 Cal.Rptr.2d 440 (Petition for review filed March 13, 1998, Case No. S068793)
Court may order restitution directly to the victim even though medical expenses were paid by victim's insurer.
The effect is similar to the collateral source rule which is described in this way: " Where a person who suffers personal injury or property damage by reason of the wrongful act of another, an action against the wrongdoer for the damages suffered is not precluded nor is the amount of damages reduced by the receipt by him of payment for his loss from a source wholly independent of the wrongdoer." [Citation]
Curiously, the court concluded that although victim may receive a windfall, better the victim than the defendant. Note: this would appear to conflict with People v. Nystrom which said that the victim may not obtain double reimbursement.)
People v. Thompson (1998) 98 Daily Journal D.A.R. 1377 (February 11, 1998)
Increase in sentence and fines imposed after retrial violates double jeopardy clause.
People v. Torres (1997) 59 Cal App.4th 1, 68 Cal.Rptr.2d 644
Law enforcement entity spending money to purchase drugs is not entitled to restitution as it is not the direct victim when investigating criminal activity.
People v. Tucker (1995) 37 Cal.App.4th 1, 44 Cal.Rptr.2d 1
Restitution for the determined appreciated value of embezzled funds was affirmed.
The trial court is vested with broad discretion in setting the amount of restitution and may use any rational method of fixing the amount of restitution which is reasonably calculated to make the victim whole.
If the funds had depreciated, the court could still order restitution in the amount that was taken from the account.
People v. Valdez (1994) 24 Cal.App.4th 1194, 30 Cal.Rptr.2d 4
A reviewing court can order correction of an unauthorized sentence that failed to include restitution to the victim even when the prosecution has not appealed.
The Legislature left no discretion or authority with the trial court or the prosecution to bargain away the victim's constitutional and statutory right to restitution. As such, it cannot properly be the subject of plea negotiations.
People v. Walker (1991) 54 Ca. 3d 1013, 1030
If a defendant is not advised of a restitution fine before entering a nonnegotiated guilty plea, the error is waived if not raised at or before sentencing. If the error is timely raised, and the court finds it is reasonably probable the defendant would not have pleaded guilty if properly advised, the court must either reduce the fine to the statutory minimum or allow the defendant to withdraw his plea. Where the restitution fine significantly exceeds the terms of a negotiated plea, and the section 1192.5 admonition is not given, the error is not waived by acquiescence and may not be deemed harmless. Hence, the trial court must either reduce the fine to the statutory minimum or allow the defendant to withdraw the plea. Finally, if the error is raised after sentencing, the proper remedy is generally to reduce the fine to the statutory minimum.
People v. Whisenand (1995) 37 Cal.App.4th 1383, 44 Cal.Rptr.2d 501
Restitution for interest on embezzled funds was affirmed as funds could have been invested to produce profit, thus interest would be a measure of lost profits.
Failure to object at the time of the hearing waived appeal for any error in the trial court's ordering repayment of the costs of the probation report, probation supervision and reimbursement to the county for court-appointed counsel.
People v. Williams (1989) 207 Cal.App.3d. 1520, 255 Cal.Rptr. 778
Restitution to victims insurer was reversed and denied.
(Note: This case not followed in People v. Birkett).
People v. Yanez (1995) 38 Cal.App.4th 1622, 1626, 1627, 46 Cal.Rptr. 2d 1
If the cost to repair the stolen property exceeds the market value of the property, restitution for the market value should be imposed. However, if the cost to repair is less than the market value, then restitution for the cost of repair should be imposed. Restitution is not designed to lead to recovery of damages above and beyond those which would be recoverable under civil law.
People v. Young (1995) 38 Cal.App.4th 560, 45 Cal.Rptr.2d 177
Restitution to the victim cannot be stayed when probation is granted.
If a trial court does not include direct victim restitution as part of a suspended prison sentence, it may still do so upon revocation of probation.
People v. Zito (1992) 8 Cal.App.4th 736, 10 Cal.Rptr.2d 491
Restitution for loss suffered before 1990 limited to total of $10,000. Defendant need not object at hearing to appeal as if restitution is greater than $10,000, is unauthorized and prohibited by ex post facto.
Failure to object to restitution to insurer at hearing waives appeal.
Court may imposed joint and several liability upon codefendants with regards to the restitution order.
Even though a restitution order is enforceable as a civil judgment, a defendant is not entitled to the same panoply of due process rights as a civil litigant. However there is some due process: right to a hearing and contest the amount.
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While this summary of California cases address the major issues regarding restitution that have been reviewed by state appellate courts, it does not represent all of them. Cases were omitted that are no longer relevant given changes in the statutes or have involved the same issues as the cases cited here. As the Legislature and appellate courts are constantly changing restitution matters, it is important that these cases be viewed in light of any changes that have occurred or will in the future.
These cases should be reviewed in the context that the points summarized in each case was at the discretion and in the view of the compiler's who, although knowledgeable about restitution law, is not an attorney.
Dr. Plone is a practicing doctor of veterinary medicine in Livermore, California, who was a victim of fraud resulting in loss of virtually his entire life's savings. Representing himself he was successful in recovering a significant amount of his losses from third parties, i.e. sources other than the defendant, through civil actions and by enforcing a restitution order imposed in his favor as a civil judgment. He has studied California statutes and case law. Although not an attorney, this article contains a good collection of the cases and statutes that control restitution for victims of crime in California. This article is presented as an overview of the general law of restitution in California with Dr. Plone's permission. The information contained here is not legal advice, should not be relied upon for that purpose and is not warranted as a correct statement of California law, but rather is offered because it is a commendable effort by someone without legal training. Dr. Plone's article deserves publication because it shows that victims of crime can take full advantage of the law and that individuals can use the power of the law and courts to obtain restitution without the services of an attorney. Dr. Plone deserves credit for fighting back and obtaining the restitution to which he was entitled. We applaud his efforts, his offering to share what he has learned, and his willingness to serve as a role model for others.
Richard Alexander is a specialist in personal injury litigation with 30 years in-depth experience. Emphasizing working relationships with clients has led to an exceptional record of success. He has served as a member of the Board of Governors of The State Bar of California, President of the Santa Clara County Bar Association and the Board of Governors of Consumer Attorneys of California. He is a founding member of the National Association of Consumer Advocates, and heads Alexander Hawes, LLP.
Alexander Hawes, LLP is a California law firm that specializes in personal injury, wrongful death, and financial losses caused by negligence, defective products, toxic chemicals, corporate misconduct or insurance fraud on behalf of consumers, small investors, injured workers and small businesses. In addition to individual cases the firm prosecutes class actions for large groups of individuals who have suffered financial loss as a result of corporate fraud, defective consumer products, and environmental pollution. The firm holds Martindale-Hubbell's highest rating and is recognized in the List of Preeminent Law Firms in the U. S.
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