Daniel Lalain worked as an engineer for Aero-Instruments, a Cleveland company that designed aviation and aerospace components. Lalain resigned suddenly, and took with him numerous documents and copies of electronic files related to the work he had done. He also kept two probes he had taken home for testing.
Aero-Instruments filed a civil suit against Lalain for misappropriation of trade secrets and proprietary information. The company also contacted law enforcement about the theft. The property Lalain took was ultimately recovered, and the company dropped its civil suit.
Before the criminal trial, the prosecution offered Lalain a plea agreement that reduced the charges from first-degree felony theft to fifth-degree felony theft (theft of property valued between $500 – $5,000). The prosecution did not seek any particular amount of restitution. Lalain accepted the plea 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. This amount, detailed to the court in a letter from the company, was what the company paid a forensic accounting firm for an expert report on the value of the loss, and for time spent by company employees trying to identify and value the items taken—all of which were returned. Without holding a hearing, the trial court accepted this amount of restitution and ordered Lalain to pay it.
In a split decision, the Eighth District Court of Appeals affirmed the restitution award, and agreed with the trial court that a hearing was not required in this case.
The pertinent issues in the case were whether a restitution order must be limited to the degree of the theft offense or can be tied to the victim’s loss, and the necessity of a hearing on the amount of restitution.
In a 5-2 decision in State v. Lalain, 2013-Ohio-3093, Justice O’Donnell wrote for the majority that a trial court has discretion in ordering restitution in a given case, is not limited to the degree of the theft offense, but cannot order more than the amount of the economic loss caused by the commission of the offense, and must hold a hearing if an interested party disputes the amount of restitution ordered. In this case, the majority found that the $63, 121 ordered was not an economic loss related to the theft offense, but rather represented costs expended with valuing property that was taken and later returned. Thus, in this case, the trial court lacked the authority to order restitution in that amount.
Justice Lanzinger, in a partial concurrence and partial dissent, would find that restitution is limited to the amount of the corresponding theft offense to which the defendant pleads, unless the defendant agrees to a higher amount as part of the plea agreement. In this case, that would mean that restitution could not exceed $4999.99 and Lalain had the right to rely on that, as he had not agreed to anything higher.
Despite their disagreement on the amount of permissible restitution, all seven justices agreed that because the defendant had objected to the amount of restitution ordered, a hearing was required in this case, which was remanded for that purpose. Read an analysis of the merit decision here.
1. A trial court has discretion to order restitution in an appropriate case and may base the amount it orders on a recommendation of the victim, the offender, a presentence investigation report, estimates or receipts indicating the cost of repairing or replacing property, and other information, but the amount ordered cannot be greater than the amount of economic loss suffered as a direct and proximate result of the commission of the offense.
2. A trial court is required to conduct a hearing on restitution only if the offender, victim, or survivor disputes the amount of restitution ordered.
What Happened on Remand
Pursuant to the Supreme Court decision, the case was remanded back to the trial court in order to hold a hearing as to the disputed restitution amount. According to Lalain’s counsel, by this time, Lalain had paid nearly $40,000 to Aero Industries.
The hearing was held on August 22, 2013. At that hearing, no further restitution was ordered. Instead, the trial court vacated the original order of restitution and ordered that all restitution payments made pursuant to the previous order be returned to Lalain. The company complied with that order. As noted in the Supreme Court decision, the company had already recovered all of its property.
On August 30, 2013, Lalain was released from community control after the Probation Department notified the court that all his financial obligations in the case were satisfied.
Student Contributor: Cameron Downer