Title: State v. Lalain

State: ohio

Issuer: Ohio Supreme Court

Document:

[Until this opinion appears in the Ohio Official Reports advance sheets, it may be cited as 
State v. Lalain, Slip Opinion No. 2013-Ohio-3093.] 
 
 
NOTICE 
This slip opinion is subject to formal revision before it is published in 
an advance sheet of the Ohio Official Reports.  Readers are requested 
to promptly notify the Reporter of Decisions, Supreme Court of Ohio, 
65 South Front Street, Columbus, Ohio 43215, of any typographical or 
other formal errors in the opinion, in order that corrections may be 
made before the opinion is published. 
 
SLIP OPINION NO. 2013-OHIO-3093 
THE STATE OF OHIO, APPELLEE, v. LALAIN, APPELLANT. 
[Until this opinion appears in the Ohio Official Reports advance sheets,  
it may be cited as State v. Lalain, Slip Opinion No. 2013-Ohio-3093.] 
Criminal law—R.C. 2929.18—Restitution—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—Trial court is required 
to conduct a hearing on restitution only if the offender, victim, or survivor 
disputes the amount of restitution ordered. 
(Nos. 2012-0302 and 2012-0408—Submitted March 13, 2013—Decided  
July 17, 2013.) 
CERTIFIED by and APPEAL from the Court of Appeals for Cuyahoga County, 
No. 95857, 2011-Ohio-4813. 
_____________________ 
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SYLLABUS OF THE COURT 
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. 
____________________ 
O’DONNELL, J. 
{¶ 1} Daniel Lalain appeals from a judgment of the Eighth District Court 
of Appeals affirming his conviction of a fifth-degree-felony theft offense, which 
included an order to pay $63,121 in restitution for costs Aero-Instruments 
incurred to investigate the theft and appraise the value of the stolen property.  The 
appellate court also certified that its decision conflicts with State v. Ratliff, 194 
Ohio App.3d 202, 2011-Ohio-2313, 955 N.E.2d 425, on the following question: 
  
“Whether, despite the defendant’s failure to object, it is error for 
the trial court to order a 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?” 
 
131 Ohio St.3d 1551, 2012-Ohio-2263, 967 N.E.2d 763. 
{¶ 2} We determined that a conflict existed, id., accepted Lalain’s 
discretionary appeal, 132 Ohio St.3d 1486, 2012-Ohio-3334, 971 N.E.2d 962, and 
consolidated the matters for review. 
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{¶ 3} R.C. 2929.18(A)(1) gives a sentencing court discretion to order 
restitution but not in an amount greater than the amount of economic loss suffered 
by the victim as a direct and proximate result of the commission of the offense.  
The court may base the amount of restitution on an amount recommended by the 
victim, the offender, a presentence investigation report, estimates or receipts 
indicating the cost of repairing or replacing property, and other information.  
Further, the statute mandates that the court must conduct a hearing if the offender, 
victim, or survivor disputes the amount. 
{¶ 4} In this case, the victim submitted a letter seeking to recover the 
cost of an expert report on the value of its loss and the time spent by employees 
trying to identify and value the items taken—all of which were returned.  It 
sought $63,121 as restitution for expenses not incurred as the direct and 
proximate result of the commission of the offense.  Further, at sentencing, 
although Lalain’s counsel disputed the amount of restitution, the court failed to 
hold a hearing. 
{¶ 5} Accordingly, we reverse the judgment of the court of appeals and 
remand the case for further proceedings consistent with this opinion. 
Facts and Procedural History 
{¶ 6} Daniel Lalain worked as an engineer for Aero-Instruments, a 
Cleveland company that designs aviation and aerospace components such as air-
speed and altitude sensors.  In June 2008, Lalain resigned without notice, taking 
electronic files copied from his work computer as well as duplicates of documents 
from his office files. In addition, he retained two probes that he had previously 
taken home for testing. 
{¶ 7} On July 2, 2008, Aero-Instruments commenced a civil action 
against Lalain seeking recovery for misappropriation of trade secrets and 
proprietary product information, and it obtained a temporary restraining order to 
prevent him from sharing any information with competitors.  After Lalain 
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resigned, the company contacted law enforcement, claiming that he had stolen 
intellectual property, and as a result, officers executed a search warrant at Lalain’s 
home and recovered the property he had taken from Aero-Instruments. 
{¶ 8} Aero-Instruments began an internal investigation to determine 
what had been removed from its facility, and it retained the forensic accounting 
department of Meaden and Moore to appraise the value of the intellectual 
property that Lalain had misappropriated.  However, it dismissed its civil suit in 
January 2009 after it determined that all of its property had been recovered and 
that Lalain had not disclosed any proprietary information. 
{¶ 9} On June 4, 2009, the Cuyahoga County Grand Jury indicted Lalain 
for first-degree-felony theft, alleging that he had stolen intellectual property, test 
data, computer equipment, computer memory devices, proprietary documents, and 
product prototypes—property allegedly valued at $1 million or more. 
{¶ 10} On August 16, 2010, Lalain pleaded guilty to an amended 
indictment for fifth-degree-felony theft of property valued at $500 or more but 
less than $5,000.  Lalain acknowledged the potential criminal penalties that the 
court could impose at sentencing, including restitution to Aero-Instruments.  
However, the parties did not discuss the amount of restitution at the plea hearing, 
nor did they include restitution as an express term of the plea agreement. 
{¶ 11} At sentencing on September 24, 2010, the trial court referenced a 
letter from Ryan Mifsud of Aero-Instruments describing economic losses the 
company had suffered from the theft of its property.  That letter, which the court 
incorporated into the record, states: 
 
We have been asked to provide information regarding the 
financial impact on the company regarding the theft of property 
and the subsequent process that was undertaken to identify and 
value the property that was recovered by Cleveland Police in July, 
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2008.  We have calculated the cost to Aero-Instruments for the 
time spent by its employees in support of this case to be 
$55,456.00.  This estimate does not include any costs for materials 
and supplies associated with the sorting, filing and copying of the 
more than 9,000 pages of documents and over 100 items recovered 
by the Cleveland Police from Mr. Lalain’s possession. 
In order to provide the County Prosecutor’s Office with an 
accurate valuation of the property that was recovered, Aero-
Instruments contracted with Meaden and Moore and their Forensic 
Accounting department to determine a valuation of the property 
that was taken from the company.  The cost associated with this 
activity was $7,665.00. Aero-Instruments is looking for restitution 
in the form of repayment by Mr. Lalain for these costs.   
 
(Emphasis added.) 
{¶ 12} Defense counsel asserted that at least some of these costs had been 
incurred “in furtherance of a civil lawsuit,” and he stated, “I think that that is 
where that Meaden & Moore record was generated for that purpose, not for the 
criminal prosecution.  I don’t think Daniel should be held responsible for any of 
that cost.” 
{¶ 13} In response, the prosecutor argued:  
 
I also take exception with the point raised about the 
Meaden & Moore accounting.  That accounting was taken on by 
Aero at the expressed advice of my supervisor, Paul Soucie, after 
several meetings, so that they could discuss how this case could 
actually be appreciated and valuated and evaluated. * * * 
* * * 
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But that Meaden & Moore work cost a lot of money in 
order to establish this case.  Aero undertook a number of expenses 
which the county could never have afforded to pay for in order to 
investigate this case.  
 
(Emphasis added.) 
{¶ 14} The trial court sentenced Lalain to a four-year term of community 
control and ordered him to pay restitution to Aero-Instruments in the amount of 
$63,121—$55,456 for the company investigation and $7,665 for the Meaden & 
Moore accounting. 
{¶ 15} Lalain appealed to the Eighth District Court of Appeals, assigning 
error based on the order of restitution.  The Eighth District affirmed, holding that 
R.C. 2929.18(A)(1) did not require an evidentiary hearing to determine the 
amount of restitution, because Lalain had not objected to restitution or disputed 
the amount Aero-Instruments requested in its letter.  The appellate court further 
explained that the costs incurred by Aero-Instruments were the direct and 
proximate result of the theft, because Aero-Instruments “had to complete an 
accounting to determine value because of the unique nature of the intellectual 
property involved.”  State v. Lalain, 8th Dist. No. 95857, 2011-Ohio-4813, ¶ 17.  
The court of appeals concluded that restitution is not limited to the property value 
that corresponds to the degree of the theft offense and the trial court therefore had 
not committed plain error in imposing restitution in an amount greater than 
$4,999.99. 
{¶ 16} The court of appeals certified that its decision conflicted with State 
v. Ratliff, 194 Ohio App.3d 202, 2011-Ohio-2313, 955 N.E.2d 425 (2d Dist.), 
which holds that a restitution order must be supported by competent, credible 
evidence and may not exceed the property value that corresponds to the degree of 
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the theft conviction.  We determined that a conflict exists and also accepted 
Lalain’s discretionary appeal. 
{¶ 17} Lalain contends that unless there is a specific agreement to the 
contrary, a restitution order cannot exceed the maximum property value that 
corresponds to the degree of the theft conviction and the trial court here therefore 
lacked authority to order restitution in an amount exceeding $4,999.99 on a 
conviction for fifth-degree-felony theft.  He maintains that the trial court allowed 
Aero-Instruments to recover expenditures that were not the direct and proximate 
result of  his crime, but rather the company had incurred those costs to investigate 
the theft, to value the property, and to prepare for litigation.  And because the 
letter and the prosecutor put the trial court on notice that Aero-Instruments sought 
restitution for costs that did not directly and proximately result from the crime, 
Lalain contends that the court had a duty to conduct a hearing to determine the 
amount of restitution, even in the absence of an express objection.  Lalain does 
assert, however, that defense counsel specifically disputed the amount of 
restitution sought by Aero-Instruments, thus obliging the trial court to conduct an 
evidentiary hearing to establish a basis for restitution. 
{¶ 18} The state argues that the amount of restitution is determined by the 
amount of the victim’s loss, not the degree of the felony or the value of property 
stolen.  Thus, according to the state, the trial court has discretion to order 
restitution in any amount consistent with the victim’s actual economic loss, even 
if that amount exceeds the property value used to determine the degree of the theft 
conviction.  It also asserts that the trial court may order restitution without a 
hearing and based solely on the estimate provided by the victim when the plea 
agreement does not specify an amount of restitution and the accused fails to 
object.  The state therefore maintains that the trial court properly ordered 
restitution for Aero-Instruments’ costs of investigating the theft, appraising what 
Lalain had taken, and determining whether he had compromised the 
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confidentiality of its intellectual property, because these expenditures constituted 
actual economic loss sustained by the company as a consequence of the crime. 
{¶ 19} Accordingly, two issues are presented: whether restitution for a 
theft offense is limited to the property value corresponding to the degree of the 
theft conviction and whether the court may order restitution without conducting a 
hearing to determine the economic loss sustained as a direct and proximate result 
of the commission of the offense if the offender disputes the amount of restitution. 
Law and Analysis 
{¶ 20} R.C. 2929.18(A)(1) authorizes a trial court to impose restitution as 
part of a sentence in order to compensate the victim for economic loss.  The 
statute also provides procedures for determining the amount of restitution ordered: 
 
If the court imposes restitution, the court may base the amount of 
restitution it orders on an amount recommended by the victim, the 
offender, a presentence investigation report, estimates or receipts 
indicating the cost of repairing or replacing property, and other 
information, 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.  
 
(Emphasis added.)   
{¶ 21} R.C. 2929.01(L) defines “economic loss” to mean 
 
any economic detriment suffered by a victim as a direct and 
proximate result of the commission of an offense and includes any 
January Term, 2013 
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loss of income due to lost time at work because of any injury 
caused to the victim, and any property loss, medical cost, or funeral 
expense incurred as a result of the commission of the offense. 
“Economic loss” does not include non-economic loss or any 
punitive or exemplary damages.   
 
(Emphasis added.) 
{¶ 22} R.C. 2929.18(A)(1) therefore limits the amount of restitution to the 
amount of the economic detriment suffered by the victim as a direct and 
proximate result of the commission of the offense.  And although the statute 
allows the court to base the amount of restitution on an amount recommended by 
the victim or the offender, a presentence investigation report, estimates or receipts 
indicating the cost of repairing or replacing property, and other information, it 
does not provide restitution for the costs of preparing such a report.  It also 
mandates that the court must hold a hearing on restitution if the offender, victim, 
or survivor of the victim disputes the amount. 
{¶ 23} The certified question merges the above statutory requirements 
with the concept of the plea agreement and needlessly confuses the matter.  The 
statute contains no statement about incorporating restitution into plea agreements, 
so that is not a statutory mandate.  Rather, the statute vests the trial court with 
discretion to impose restitution and to base it on listed statutory factors and other 
information, but restitution may not exceed the amount of economic loss suffered 
as a direct and proximate result of the commission of the offense.  A hearing is 
mandated only if the offender, victim, or survivor disputes the amount. 
{¶ 24} In addition, we recognize that the amount of restitution is not 
correlated to the degree of the theft offense.  For example, R.C. 2913.02(B)(5) 
states, “If the property stolen is a motor vehicle, a violation of this section is 
grand theft of a motor vehicle, a felony of the fourth degree,” regardless of the 
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value of the motor vehicle.  A trial court choosing to order restitution in a case of 
grand theft of a motor vehicle is not restricted to the value corresponding to a 
fourth-degree felony and may instead award restitution pursuant to R.C. 
2929.18(A)(1). 
{¶ 25} In this case, Aero-Instruments sought restitution of $55,456 “for 
the time spent by its employees in support of this case” and an additional $7,665 
for the report “to provide the County Prosecutor’s Office with an accurate 
valuation of the property that was recovered.”  Thus, these expenditures are not 
the direct and proximate result of the commission of the theft offense; rather, they 
are consequential costs incurred subsequent to the theft to value the property that 
had been taken from and later returned to Aero-Instruments.  Further, as the state 
conceded at oral argument, defense counsel did dispute the amount of restitution 
claimed by Aero-Instruments.  At a minimum, the trial court should have 
conducted a hearing at that point.  Thus, the trial court lacked authority to order 
$63,121 in restitution in these circumstances. 
{¶ 26} Because the factual premise of the certified question is not 
supported by the record, we dismiss the conflict case as having been 
improvidently certified. 
Conclusion 
{¶ 27} 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.  A trial court is required to 
conduct a hearing on restitution only if the offender, victim, or survivor disputes 
the amount of restitution ordered. 
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{¶ 28} The judgment of the court of appeals is reversed, and the cause is 
remanded for further proceedings consistent with this opinion. 
Judgment reversed 
and cause remanded. 
PFEIFER, KENNEDY, FRENCH, and O’NEILL, JJ., concur. 
O’CONNOR, C.J., and LANZINGER, J., concur in part and dissent in part. 
____________________ 
LANZINGER, J., concurring in part and dissenting in part. 
{¶ 29} I agree that this case should be remanded for a hearing on 
restitution, but because I respectfully dissent from the decision to avoid the 
certified question, I write separately and would hold that the plea agreement here 
imposed a limit on restitution. 
{¶ 30} The trial court has discretion to order a defendant to pay restitution 
to a victim as a financial sanction pursuant to R.C. 2929.18(A)(1), but the statute 
expressly includes the caveat, “provided that the amount the court orders as 
restitution shall not exceed the amount of economic loss suffered by the victim as 
a direct and proximate result of the commission of the offense.”  (Emphasis 
added.)  Because the degree of a theft offense is defined by the element of the 
amount of loss to the victim (in this case, for a fifth-degree felony, $500 or more 
but less than $5,000), restitution should be ordered within this range.  
{¶ 31} In accepting a felony plea, a trial court is required to inform the 
defendant of the maximum penalty involved and the consequences of the plea, 
among other rights. See Crim.R. 11(C)(2). 
{¶ 32} We have recognized that restitution is part of the sentence imposed 
on a defendant.  State v. Danison, 105 Ohio St.3d 127, 2005-Ohio-781, 823 
N.E.2d 444, syllabus.  Thus, the amount of restitution ordered pursuant to R.C. 
2929.18 affects the maximum penalty as well as the effect of the plea. 
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{¶ 33} Crim.R. 11(C)(2)(a) states that for a plea to be voluntary, a 
defendant must understand the maximum penalty, which potentially includes 
restitution. Lalain was charged originally with a felony of the first degree, which 
could have exposed him to unlimited restitution.  But Lalain should have been 
able to rely on the degree of theft to which he pled guilty—a fifth-degree-felony 
theft offense of stealing property valued between $500 and $5,000.  This 
limitation on value is an element of the offense and restitution should be no 
greater than $5,000.  However, Lalain could have been ordered to pay a greater 
amount of restitution as a specific part of a negotiated plea or as a stipulation.  
Crim.R. 11(F) states: 
 
 
When, in felony cases, a negotiated plea of guilty or no 
contest to one or more offenses charged or to one or more other or 
lesser offenses is offered, the underlying agreement upon which 
the plea is based shall be stated on the record in open court. 
. 
{¶ 34} Thus, nothing prevents the state from requiring “full restitution” in 
a greater amount than the theft offense to which a plea has been taken.  The 
defendant must know what the maximum consequences are when giving up rights 
and entering a guilty plea. 
{¶ 35} I would adopt the reasoning of the Second District Court of 
Appeals in State v. Ratliff, 194 Ohio App.3d 202, 2011-Ohio-2313, 955 N.E.2d 
425 (2d Dist.), and hold that restitution is limited to the amount referred to in the 
theft offense to which the defendant enters a plea unless the defendant agrees to a 
higher amount as part of the plea agreement. 
O’CONNOR, C.J., concurs in the foregoing opinion. 
____________________ 
January Term, 2013 
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Timothy J. McGinty, Cuyahoga County Prosecuting Attorney, and Kristen 
L. Sobieski, Assistant Prosecuting Attorney, for appellee. 
 
John P. Hildebrand Co., L.P.A., and John P. Hildebrand Sr., for appellant. 
________________________