What’s on Their Minds. Due Process Concerns Over Restitution Order. State v. Daniel Lalain.

Update: On July 17, 2013 the Supreme Court issued a merit decision in this case.  Read the analysis here.

On March 13, 2013, the Supreme Court heard oral argument in the case of  State v. Daniel Lalain, 12-0302/12-0408. This is a consolidated case accepted both on discretionary appeal and conflict certification.

The certified question is, “Whether, despite the defendant’s failure to object, it is error for the trial court to order defendant to pay an amount of restitution in the absence of a specific plea agreement and without a hearing or evidence substantiating the economic loss claimed by the plaintiff?” The discretionary appeal raises similar issues.

Case Background

After leaving his job as an engineer with Aero Instruments, Daniel Lalain took with him numerous documents and other materials related to the work he had done during his employment. He was charged with first degree felony-theft (theft involving property over 1 million dollars.) Ultimately, everything taken was returned to Aero.

Aero paid $7665 to the forensic accounting firm of Meaden and Moore to determine the value of the items stolen.  Aero also expended an additional $55,456 for time spent by its employees in support of this case.

The prosecution offered Lalain a plea agreement that reduced the charges to a fifth-degree felony (theft of property valued between $500 – $5,000). The prosecution did not seek any particular amount of restitution. Lalain accepted the offer, acknowledging at the plea colloquy that he could be ordered to pay restitution in connection with his plea to the theft of an amount less than $5,000. At sentencing, however, the State sought restitution in the amount of $63,121—its total expenses in ascertaining its loss in this case. Without holding a hearing, and in the absence of a specific objection by Lalain, the trial court accepted and ordered this amount of restitution.

In a split decision, the Eighth District Court of Appeals affirmed the restitution award. Read the oral argument preview of this case here.

The Restitution Statute

R.C. 2929.18

(A) (1) …If the court imposes restitution, the court may base the amount of restitution it orders on an amount recommended by the victim… provided that the amount the court orders as restitution shall not exceed the amount of the economic loss suffered by the victim as a direct and proximate result of the commission of the offense. If the court decides to impose restitution, the court shall hold a hearing on restitution if the offender, victim, or survivor disputes the amount.

At Oral Argument

Lalain’s Argument

If there is no dollar amount negotiated during a plea agreement, which there was not in this case, the amount of restitution is limited to that associated with the offense involved. In this case Lalain pled to a fifth degree felony. The maximum amount of restitution that the trial court could award in this case was $4999.  If there is to be an agreed restitution award, the amount should have been placed on the record during the plea colloquy so there would be no misunderstanding about what the defendant was agreeing to.

The award of $63,121, based on a letter from Aero received by both counsel the morning of the sentencing was an abuse of discretion. That sum was incurred after all Aero’s property had been returned. The money was spent solely to help prosecute the defendant, and was inappropriately awarded as restitution. It is not the type of loss envisioned by the statute. Additionally, there was absolutely no evidence to substantiate that amount. The state must put on some credible evidence to establish what is owed. That never happened here.

Defense counsel also insisted that he did object during the allocution to Aero’s costs being awarded as part of restitution, by questioning the amount, which was all he could do given the fact that he had no notice that this was under consideration until that morning.

State’s Argument

A restitution order is uniquely tied to the victim’s loss, not to the degree of the theft offense.  The very definition of restitution is to make the victim whole. The $63,121 in expenses to Aero was directly and proximately incurred as a result of the defendant’s actions, consistent with the statute.  Furthermore, the defendant knew full well that restitution was to be part of his punishment, and he made no objection whatsoever to the court’s restitution order.  If he had, an evidentiary hearing would have been required.  The prosecutor here did nothing wrong in addressing restitution at sentencing, as is typically done.

What Was On Their Minds

Objection?  No Objection?

The parties sharply disagreed about whether the defense had objected to the order and amount of restitution.

Does it matter if there was no objection, either to the process by which restitution was imposed, or to the amount, asked Chief Justice O’Connor?  Was the trial judge clearly outside the law in doing this?  Was the defendant objecting to the authority of the court to do this at all, or just to the amount?

Was raising the issue with the trial judge at the sentencing hearing the equivalent of an objection, asked Justice Lanzinger? (Yes, said defense counsel.  No, said the prosecutor, later) Why not ask for a restitution hearing? Before the judge ruled on the issue?

Doesn’t the record show that while defense counsel may not have used the word “object,” he clearly did express his disagreement with his client having to pay Aero’s costs, asked Justice French? At a minimum, wasn’t that a dispute as to the amount?

The Plea Agreement

Would defendant’s position be different if he had agreed to a specific amount of restitution, written into a plea agreement, asked Justice Lanzinger (answer—absolutely yes)

During the colloquy, didn’t the defendant answer “yes” when the trial court asked him if he understood he would still be subject to restitution, asked Justice French?(yes, he did.)

Must any agreed-to amount of restitution be written into the plea agreement, asked Justice Lanzinger?

Could the defendant claim that since the amount of restitution was not made part of the record, his plea was not knowingly, voluntarily, and intelligently made, asked Chief Justice O’Connor? What exactly will the record show about the amount of restitution? Will it show that the prosecutor clearly said the amount was contained in the letter, and that the letter represents restitution, and not some kind of victim impact statement? And in a key question of the day,  the Chief asked the prosecutor whether the  defendant didn’t have to know the exact amount of restitution in order to make his assent to the plea bargain a valid one?

The Restitution Amount

Justice O’Neill asked if defense counsel was questioning the propriety of restitution being awarded at all? (no)

If the value of the theft items was eight million dollars, could that amount have been sought as restitution, asked Justice O’Donnell?

At one point, wasn’t the defendant willing to pay the forensic accounting costs, which was more than the pled-to offense, asked Chief Justice O’Connor? Can an amount higher than that associated with the crime be negotiated? (answer-yes.) And in another key question of the day, she asked whether the state is limited to the dollar amount associated with the level of the offense if there is no dollar amount negotiated or discussed during the plea agreement? (yes, said defense counsel; no said the prosecutor.) Can a victim increase its loss, as was done here, asked the Chief? (yes, said the prosecutor; the Chief immediately asked for her authority for that answer.) But wasn’t that money to help the prosecution do its job? And hadn’t Aero gotten everything back? Didn’t the company know the value of its own property without having to spend all that money to figure it out?

Is it the prosecution’s position that restitution should include all costs incurred because of the theft, even if the property has been returned, asked Justice Lanzinger? (yes, was the reply, especially when the value of the items taken is not readily ascertainable.) But if the loss exceeded $5,000, why not just up the level of felony, added Justice Lanzinger? Would anything prevent the prosecutor from crafting a plea agreement saying the defendant is agreeing to a certain amount of restitution? (answer—no, nor is it required.)

What exactly was taken, asked Justice Pfeifer and the Chief?

What was the evidence of the amount of restitution, asked Justice O’Donnell? Is an amount recommended by the victim good enough? Was the victim’s letter sufficient in this case? What about the right to cross examine the individuals involved about the amount (that’s why an objection was necessary, replied the prosecutor.)

Due Process Concerns

Must there always be a separate evidentiary hearing to determine the restitution amount, asked Justice French?  Or can it be a part of the sentencing?

In another key question of the day, Justice O’Neill asked whether basic due process requires a hearing before a defendant gets a bill for $63,000?  Even in the absence of any objection?

Related Civil Action

Is a civil suit still possible if the restitution order is set aside here, asked Chief Justice O’Connor? (the statute of limitations has run, said defense counsel; a restitution order does not preclude a victim from seeking a civil judgment said the prosecutor. To which Justice O’Neill tartly replied, “But nobody needs a civil judgment if they’ve got the Cuyahoga County Prosecutors’ office as their collection agent, do they?” The prosecutor clearly did not appreciate this remark. )

Potential Syllabus

As he frequently does, Justice O’Donnell asked defense counsel what law the Court should write if it agreed with him?  That restitution must be evidenced?  It can’t just be announced?

How it Looks from the Bleachers

To Professor Bettman

I’m calling this one for the defendant, although the Court could go a number of ways in doing so.

The certified question in the case assumes the defendant’s failure to object.  But while it sounded as if defense counsel did not clearly object to the amount of the restitution, as he should have, which would have triggered the defendant’s statutory right to a hearing, from what Justice French read from the record at the argument, it sounds like that he did at least protest the amount.  I think the Court may give him the benefit of the doubt on this, although clearly not the best practice.

In any event, all the justices (except Justice Kennedy, who asked no questions) really pushed back on the prosecutor.  All seemed to feel she was overreaching, and not giving enough credence to what Justice O’Neill called the basic due process concerns in this case.  The Court could find that the amount of restitution is tied to the degree of felony to which the defendant agreed to plead.  Justice Lanzinger seemed to favor interpreting the statute that way. Or the Court could find that it was error for the trial court to order the defendant to pay an amount of restitution that was not clearly spelled out on the record as part of the plea agreement.  That is part of the certified question. As a variation on that theme, the Court could instead find that the defendant’s plea was not knowingly, voluntarily, and intelligently made, although this seems less likely.  The Chief brought this up.

Probably the best outcome for the defendant would be a decision limiting restitution in this case to $4999, which was the dissenting judge’s position in the court of appeals decision.  Justice O’Donnell seemed drawn to this view.

To Student Contributor Elizabeth Chesnut

The Supreme Court Justices are clearly hesitant to create new bright-line law merely as a result of failures on the part of counsel in the lower court. The Court was ultimately concerned with balancing the existing laws supporting restitution for victims and the potential danger of allowing a county prosecutor to act as a personal collection agency for such victims, particularly when the victims have increased their own losses.



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