Opinion ID: 1398204
Heading Depth: 1
Heading Rank: 4

Heading: Was the Circuit Court's Restitution Order Improper?

Text: The appellant argues that the circuit court's entry of judgment against him in the total amount of Aetna's losses, $1,430,000.00, was improper. The appellant principally relies upon language from our cases requiring that the amount of restitution to be paid by an offender as a condition of probation or parole be reasonably tailored to an offender's ability to pay. We discuss these cases later in this opinion, but we begin our consideration of the appellant's argument with a review of pertinent language from several sections of the Act. W.Va.Code, 61-11A-1(b) [1984] states, in part: The legislature declares that the purposes of this article are to enhance and protect the necessary role of crime victims and witnesses in the criminal justice process and to ensure that the state and local governments do all that is possible within the limits of available resources to assist victims and witnesses of crime without infringing on the constitutional rights of the defendant. W.Va.Code, 61-11A-4(a) [1984] states: The court, when sentencing a defendant convicted of a felony or misdemeanor causing physical, psychological or economic injury or loss to a victim, shall order, in addition to or in lieu of any other penalty authorized by law, that the defendant make restitution to any victim of the offense, unless the court finds restitution to be wholly or partially impractical as set forth in this article. If the court does not order restitution, or orders only partial restitution, under this section, the court shall state on the record the reasons therefor. W.Va.Code, 61-11A-4(d) [1984] states: The court shall impose an order of restitution to the extent that such order is as fair as possible to the victim and the imposition of such order will not unduly complicate or prolong the sentencing process. W.Va.Code, 61-11A-5(a) [1984] states: The court, in determining whether to order restitution under this article and in determining the amount of such restitution, shall consider the amount of the loss sustained by any victim as a result of the offense, the financial resources of the defendant, the financial needs and earning ability of the defendant and the defendant's dependents, and such other factors as the court deems appropriate. W.Va.Code, 61-11A-5(d) [1984] states: Any dispute as to the proper amount or type of restitution shall be resolved by the court by the preponderance of the evidence. The burden of demonstrating the amount of the loss sustained by a victim as a result of the offense shall be on the prosecuting attorney. The burden of demonstrating the financial resources of the defendant and the financial needs of the defendant and such defendant's dependents shall be on the defendant. The burden of demonstrating such other matters as the court deems appropriate shall be upon the party designated by the court as justice requires. We will not burden the reader with an elaborate exegesis of the foregoing-quoted language from the Act, because (after analyzing one important phrase, which we do in a footnote [5] ) we believe that the cumulative meaning of this language, read in pari materia, is clear. The above-quoted provisions of W.Va.Code, 61-11A-1 [1984], W.Va.Code, 61-11A-4(a) [1984], W.Va.Code, 61-11A-4(d) [1984], W.Va.Code, 61-11A-5(a) [1984] and W.Va.Code, 61-11A-5(d) [1984], read in pari materia, establish that at the time of a convicted criminal defendant's sentencing, a circuit court should ordinarily order the defendant to make full restitution to any victims of the crime who have suffered injuries, as defined and permitted by the statute, [6] unless the court determines that ordering such full restitution is impractical. The question then arises, what does impractical mean, in the context of a restitution order? To address this question, we will first look at the term impractical as it is more generally used. [7] This Court has recognized that the word impractical does not necessarily mean the same thing as impossible. See Dolin v. Roberts, 173 W.Va. 443, 445, 317 S.E.2d 802, 804 (1984): [Requiring license suspensions within twenty-four hours of drunk driving arrests] ... would not only be impractical, it would be virtually impossible.... See also Stockert v. Council on World Service and Finance of Methodist Church, 189 W.Va. 1, 2, 427 S.E.2d 236, 237 (1993). The doctrine of cy pres is an equitable device employed when the terms of a charitable trust become illegal, impossible, or impractical to fulfill... (emphasis added). Looking to other jurisdictions, in LaCourse v. City of St. Paul, 294 Minn. 338, 343, 200 N.W.2d 905, 909 (1972), the court said: The word impractical does not necessarily mean impossible. Webster's Third New International Dictionary (1961) p. 1136, defines impractical as synonymous with impracticable. (I)ncapable of being put into use or effect or of being accomplished or done successfully or without extreme trouble, hardship, or expense. Another court has similarly distinguished impractical from impossible or infeasible, stating that the fact that use of a safety device is feasible or possible does necessarily mean that the method is practicaland that practicality is not theoretical or ideal ... [but] implies proven success in meeting the actual demands made by actual living or use. Century Steel Erectors, Inc. v. Dole, 888 F.2d 1399,1405 (D.C.Cir.1989). Thus, whether a proposal is practical or impractical is not a simple yes-or-no factual determination of whether the proposal is technically feasible or within the theoretical realm of possibility. Rather, determining whether a proposal is practical or impractical involves considering and weighing probabilities, costs and benefits. If the costs substantially outweigh the benefits when considered in light of the probabilities, a proposal may be deemed to be impractical, even if it is technically or theoretically possible or feasible. What then are the factors that a court must and may consider in assessing the probabilities, costs and benefitsand thus the practicalityof an award of full restitution? Again we turn first to the applicable statutory language. W.Va.Code, 61-11A-5(a) [1992] requires that: The court, in determining whether to order restitution under this article and in determining the amount of such restitution, shall consider the amount of the loss sustained by any victim as a result of the offense, the financial resources of the defendant, the financial needs and earning ability of the defendant and the defendant's dependents, and such other factors as the court deems appropriate. Thus, the statute calls for consideration of (1) the victim's losses, (2) the defendant's financial circumstances, and (3) such other factors as the court may choose to consider. The Act also states that the court should endeavor to be fair to the victim and at the same time not unduly complicate or prolong the sentencing. W.Va.Code, 61-11A-4(d) [1984]. Whether property may be returned to a victim or whether a monetary payment in lieu of return is necessary may also be a consideration. W.Va.Code, 61-11A-4 (b)(1)(B) [1984]. The court may also consider the alternatives of rendering services in lieu of payment, or making payment to a designated person or organization, if restitution payment to a victim is impractical. W.Va.Code, 61-11A-4(b)(4) [1984]. See note 5, supra. We will primarily address the consideration to be given by the court to the factor of a defendant's circumstances in making a restitution determinationbecause the issue in the instant appeal is the appellant's contention that the circuit court ordered restitution against him without giving proper consideration to the appellant's financial circumstances. A number of our cases have discussed what consideration a court should give to a criminal defendant's financial circumstances when considering victim restitution. In Fox v. State, 176 W.Va. 677, 682, 347 S.E.2d 197, 202 (1986), this Court stated: [I]t is generally held that even in the absence of statute, the sentencing court may not order restitution without first inquiring into and determining on the record the offender's ability to pay. We stated in Fox that a probationer's restitution payment is unreasonable if it is beyond the offender's ability to pay without undue hardship to himself or his family. Syllabus Point 1, in part, Fox, supra . Payment causing undue hardship occurs when after the deduction of the [payment] from a person's wages enough money [does not] remain to meet ordinary and necessary expenses with something left over for unforeseen expenses and some discretionary spending. Cottrell v. Public Finance Corporation, 163 W.Va. 310, 316, 256 S.E.2d 575, 580 (1979). To avoid undue hardship, the payment required must not be so much as to make it impossible for the debtor to provide for the family. Id. In another case, we stated that: A probation condition requiring repayment of costs and attorneys fees is constitutionally acceptable if it is tuned to the probationer's ability to pay without undue hardship and is subject to modification if his indigency persists or reoccurs ... Probation may not be revoked for failure to pay restitution, costs and attorneys fees unless the probationer's failure is contumacious... A trial court seeking to revoke probation for failure to pay assessed costs or restitution must make findings of fact that indicate defendant's ability to pay, weighing available assets, income, attempts to find work, and reasonable family expenses. Syllabus Points 1, 2 and 3, Armstead v. Dale, 170 W.Va. 319, 294 S.E.2d 122 (1982). We have also held that the same principles apply in matters of parole, where the trial court must consider the financial resources of the defendant, the defendant's ability to pay and the nature of the burden that the payment of such costs will impose upon the defendant. Syllabus Point 1, in part, State v. Haught, 179 W.Va. 557, 371 S.E.2d 54 (1988). [8] Our cases have identified two primary reasons that the amount of restitution that an offender is required to pay should be reasonable and not impose undue hardship. Those reasons are: (1) to promote offender rehabilitation, and (2) to comply with the constitutional guarantees of due process and equal protection. In discussing offender rehabilitation, we stated in Fox, supra, quoting from other cases, that: Restitution can aid an offender's rehabilitation by strengthening the individual's sense of responsibility. The probationer may learn to consider more carefully the consequences of his or her actions. One who successfully makes restitution should have a positive sense of having earned a fresh start and will have tangible evidence of his or her capacity to alter old behavior patterns and lead a law-abiding life. Conditioning probation on making restitution also protects the community's interest in having the victims of crime made whole..... Thus, [r]estitution imposed in a proper case and in an appropriate manner may serve the salutary purpose of making a criminal understand that he has harmed not merely society in the abstract but also individual human beings, and that he has a responsibility to make them whole. Fox, supra, 176 W.Va. at 681, 347 S.E.2d at 201-202 (citations omitted). [9] We have observed that if restitution is set so high as to place any person in the position of having no money for discretionary spending [it would] risk the destruction of incentive; a result beneficial to no one. Cottrell, supra, 163 W.Va. at 316-317, 256 S.E.2d at 580 (1979). Where, however, the defendant is unable to pay restitution, the rehabilitative purpose of the probation condition is destroyed. Fox, supra, 176 W.Va. at 681, 347 S.E.2d at 202. In Fox, this Court agreed with the Arizona Supreme Court's statement that, [c]onsideration of the defendant's ability to pay restitution is sound penology. Fox, 176 W.Va. at 681, 347 S.E.2d at 201, quoting State v. Hawkins, 134 Ariz. 403, 405, 656 P.2d 1264,1266 (1982). The second principal reason that this Court has identified as supporting the principle that restitution should be tuned or tailored to the financial ability of an offender is to assure compliance with the constitutional requirements of due process and equal protection of the laws. When a person's failure to comply with a restitution order's payment requirements may result in incarceration, deprivation of property, or some other adverse legal consequence or penalty, the liberty or property interest involved demands a constitutionally adequate hearing and process; and a person may not be penalized for nonpayment of restitution unless the refusal to pay is contumacious. See Fox, supra ; Syllabus Point 2, Armstead v. Dale, supra . Additionally, permitting restitution orders which require payment beyond a person's means could discriminate against poorer people, who would be penalized for nonpaymentas opposed to better-off people, who could afford to make payment and thus avoid a penalty. Thus the constitutional guarantee of equal protection of the laws is implicated. State v. Haught, 179 W.Va. at 562, 371 S.E.2d at 59. To protect a defendant's constitutional rights, when a court orders a defendant to fulfill and comply with specific terms and conditions of restitution as a condition of parole or probation, this Court has held that a defendant's financial circumstances must be carefully considered and the amount of restitution to be paid by a defendant should not impose undue hardship. Fox, supra ; [10] see also Haught, supra . What if a defendant is indigent at the time of sentencing, or the defendant's ability to pay full restitution is questionable? Under such circumstances, may full restitution or restitution in excess of a defendant's likely future means never be ordered? While this Court has apparently not previously addressed this issue, other courts have discussed the significance of a defendant's indigency or uncertain means at the time of sentencing. In United States v. Rogat, 924 F.2d 983, 985-986 (10th Cir.1991), cert. denied, 499 U.S. 982, 111 S.Ct. 1637, 113 L.Ed.2d 732 (1991), discussing the federal Victim and Witness Protection Act (VWPA), 18 U.S.C. Secs. 3663-64, [11] the Court stated: Although a defendant's indigency is not a bar to restitution, United States v. Sunrhodes, 831 F.2d 1537, 1546 (10th Cir.1987), we will not uphold the district court's exercise of discretion absent any evidence the defendant is able to satisfy the restitution order, United States v. Clark, 901 F.2d 855, 857 (10th Cir.1990). In Clark, the district court ordered a defendant to pay $153,762 in restitution immediately. The only evidence of the defendant's financial condition was a presentence report indicating a negative monthly cash flow of $249. Id. Based on this evidence, we vacated the district court's order as an abuse of discretion. Id. A restitution order will be upheld if the evidence indicates a defendant has some assets or earning potential and thus possibly may be able to pay the amount ordered. The Fifth Circuit, for example, affirmed a $250 per week restitution order against an electrician with a present earning ability of $500 per week because he had a viable trade and good employment prospects. United States v. Paden, 908 F.2d 1229, 1237 (5th Cir.1990). In United States v. McClellan, 868 F.2d 210, 213 (7th Cir.1989), the Seventh Circuit upheld a restitution order of over $650,000 against a physician who, despite his current bankruptcy and low income, had tremendous earning potential. The possibility of repayment, however, cannot be based solely on chance. For example, in vacating a restitution order in United States v. Mitchell, 893 F.2d 935, 936 n. 1 (8th Cir.1990), the Eighth Circuit rejected the prosecutor's argument that the defendant might win the lottery. Similarly, the Seventh Circuit vacated an order requiring an indigent farmer to repay $32,600 by the date he was scheduled to be released from prison because he could not raise that amount while in prison. United States v. Studley, 892 F.2d 518, 532-33 (7th Cir.1989). But cf. United States v. Ryan, 874 F.2d 1052,1054 (5th Cir.) (restitution order of over two million dollars payable within five years of release from prison upheld because defendant's financial situation may well change in the future, making him able to pay some if not all the restitution), cert. denied, 489 U.S. 1019, 109 S.Ct. 1138, 103 L.Ed.2d 199 (1989). The record in this case supports the district court's restitution order.... Balanced against the appellants' current indigency, the court found the defendants both very able, intelligent, well-educated, talented business people, who do have substantial capacity to earn money now or in the future, and, therefore, do have ability to make restitution. ... the district judge did not abuse his discretion in ordering full restitution. The record here satisfies the requirement in Clark of some evidence the appellants can satisfy the order. See Clark, 901 F.2d at 855. Also, the order does not require immediate payment as in Clark. See id. Nor does it require payment before the appellants leave prison as in Studley. See Studley, 892 F.2d at 531 n. 11. This case most closely resembles Paden and McClellan, because the appellants have demonstrated a significant earning capacity. See Paden, 908 F.2d at 1237; McClellan, 868 F.2d at 213. We agree with the proposition set out in Rogat to the effect that there can be circumstances in which an offender's present indigency or questionable ability to pay a given amount of restitution does not render a restitution award in such an amount necessarily impractical. For example, a defendant may at the time of sentencing have no funds that would justify a circuit court's concluding that the defendant will definitely be able to pay restitution under the defendant's then-existing circumstances. Nevertheless, the court might conclude from evidence in the record that there is a reasonable possibility that such means or ability would arise in the futurefor example, from a defendant's future earnings, a prospective inheritance, or other possible improvement in a defendant's fortunes. If a circuit court believed that there would be no significant harm to an offender's rehabilitation prospects and no constitutional violation would flow from the entry of a restitution award in excess of a defendant's current ability to pay, the court might reasonably determine that on balance an order entering judgment for a given amount of restitution was practicalbecause there is a reasonable chance that the restitution judgment order might in the future assist a victim in being compensated for their losses. [12] Conversely, a circuit court might in another case determine that ordering full restitution is impractical, because there is no reasonable prospect of a defendant ever having the ability to make full restitution to the victims of an offense. In other cases, a court might conclude that ordering full restitution is impractical because it is outweighed by offender rehabilitation concerns. Of course, in all such cases where full restitution is not ordered, the circuit court is required to state its reasons for determining to award less than full restitution. W.Va.Code, 61-11A-4(a) [1984]. [13] Based on the foregoing reasoning, we conclude that under the Victim Protection Act of 1984, W.Va.Code, 61-11A-1 through-8 and the principles established in our criminal sentencing jurisprudence, the circuit court's discretion in addressing the issue of restitution to crime victims at the time of a criminal defendant's sentencing is to be guided by a presumption in favor of an award of full restitution to victims, unless the circuit court determines by a preponderance of the evidence that full restitution is impractical, after consideration of all of the pertinent circumstances, including the losses of any victims, the financial circumstances of the defendant and the defendant's family, the rehabilitative consequences to the defendant and any victims, and such other factors as the court may consider. For purposes of determining whether or what amount of restitution may be entered as a judgment against a defendant at the time of a criminal defendant's sentencing pursuant to W.Va.Code, 61-11A-4(a) [1984], the indigency of a defendant or the current ability or inability of a defendant to pay a given amount of restitution is not necessarily determinative or controlling as to the practicality of an award of restitution. If the court determines that there is a reasonable possibility that a defendant may be able to pay an amount of restitution, the court upon consideration and weighing of all pertinent circumstances is permitted but not required to determine that an award of restitution in such an amount is practical. However, when a court is determining the practicality of an award of restitution, a finding that there is a reasonable possibility of a defendant's payment of a restitution award must not be based solely on chance; there must be some concrete evidence specific to a defendant showing that the defendant has assets, earning potential or other present or potential resource, or similar grounds upon which the court may conclude that there is a reasonable chance that the defendant may be able to pay the restitution amount in question. [14] We apply the foregoing reasoning and principles to the facts of the instant case. Aetna paid out $1,430,000.00 because of the appellant's criminal acts, and there is a presumption of an order of full restitution at the appellant's sentencing unless under all of the circumstances the court determines that such an award is impractical. Looking to the appellant's financial circumstances, the record shows that he was a well-to-do businessperson who prior to his offense had earned an annual income of over $100,000.00. He had worked in the grocery business for 20 years, and he comes from a family that has been in the grocery business for over 40 years. He has engaged in largescale business enterprises and financial transactions. [15] The record thus contains evidence that the appellant might have the wherewithal in the future to pay restitution for some or all of the losses which he caused. [16] Applying the test which we have enunciated, a full restitution award is not barred (but also is not required) when such evidence exists. As to rehabilitative and constitutional concerns which might weigh in favor of finding an award of full restitution to be impractical, the appellant's counsel succinctly summarized these at the sentencing hearing, saying: What you're doing is sentencing him to a life of indigency, and I think an order of restitution has to be based on a defendant's ability to pay. However, payment of $1,430,000.00 in restitution was not imposed upon the appellant as a condition of probation or parolenor were any other potential penalties tied to the appellant's failure to make restitution in the amount ordered. Indeed, the circuit judge stated in entering the judgment that if the appellant were to fail to pay the restitution awarded in the judgment order due to financial inability, the appellant could not be penalized for such failure. The life of indigency forecast by the appellant's counsel, which if true might be a serious rehabilitative factor weighing against an award of full restitution, was entirely speculative at the stage of the appellant's sentencingbecause no payment conditions had been imposed on the appellant in connection with parole, for exampleand because no execution had been sought upon the judgment. For the same reasons, the principles established in our cases requiring that for constitutional reasons restitution must be tailored to the offender's ability to pay are largely inapplicable to the judgment order in question in the instant case. In summary, we do not believe that rehabilitative and constitutional concerns were so weighty as to preclude entering a full restitution judgment against the appellant. Under these circumstances, we conclude that the circuit court did not abuse its discretion in entering judgment against the appellant for $1,430,000.00 in restitution, because such a judgment was not clearly impractical in light of the circumstances before the court. The appellant also contends that the restitution order is impermissible because it lacks specific findings about the appellant's financial circumstances. The applicable statutory language, W.Va. Code, 61-11A-4(a) [1984] requires findings only if the court does not award full restitution: [i]f the court does not order restitution, or orders only partial restitution, under this section, the court shall state on the record the reasons therefor. As we have discussed, the rehabilitative and constitutional principles that have led us to require findings in the absence of a statutory command are not strongly implicated in the instant case. See Fox, supra . Other courts addressing the findings issue in the light of similar statutory language have reached varying conclusions as to whether specific findings are required in all instances when a court is setting restitution in criminal cases. One view does not require specific findings in all cases. An example of this approach is found in United States v. Mitchell, 876 F.2d 1178,1183 (5th Cir.1989): [United States Code Section] 3663(a)(2) states that [i]f the court does not order restitution, or orders only partial restitution... the court shall state on the record the reasons therefore. The statute does not require that the court state its reasons if full restitution is ordered. Further, as we stated in United States v. Patterson, 837 F.2d 182,183-84 (5th Cir.1988): We are not persuaded that the district court must spread its findings and conclusions on the record in every case in which full restitution is ordered. The decision to assign reasons is committed to the sound discretion of the district court, guided by this singular inquiryabsent an assignment of its reasons, does the record contain sufficient data for the appellate court to perform its mandated review? If the record provides an adequate basis for that review, the court need not assign specific reasons for its decision to order full restitution. If the record is insufficient, reasons must be assigned. In this case the presentence report, which is a part of the record, sets forth the specific findings as to each victim's damages. Under these circumstances the court need not make those findings on the record. Mitchell, 876 F.2d at 1183. An alternative view to the one stated in Mitchell is taken by the Fourth Circuit. That court requires specific findings on the record regarding each matter which the court considers in setting a restitution amount, in every case in which restitution is ordered. United States v. Molen, 9 F.3d 1084, 1086 (4th Cir.1993). In the Fourth Circuit, this rule is imposed on the district courts not because of statutory language requiring findings, but by virtue of the appellate court's inherent supervisory powers to establish procedures which permit efficient and effective appellate review of the sentencing process. Id. We might agree with the reasoning of the Fourth Circuit for those cases in which the restitution award in question imposes specific payment responsibilities upon a defendant or penalizes the defendant if the restitution order is not complied withwhich appears to be the case for restitution orders issued under the federal VWPA. In such a case, the rehabilitative and constitutional concerns that we have recognized would require findings, and our cases have so held. See, e.g., Fox, supra and Haught, supra . However, no such payment responsibilities or penalties flow from the restitution judgment order at issue in the instant case. We therefore adopt the reasoning of the court in Mitchell, based on our statutory language requiring findings only when less than full restitution is ordered at the time of sentencing. W.Va.Code, 61-11A-4(a) [1984]. Therefore we hold that when restitution is ordered at a criminal defendant's sentencing pursuant to the provisions of W.Va.Code, 61-11A-4(a) [1984], the circuit court is not required to spread its findings and conclusions on the record in every case in which full restitution is ordered. In cases where full restitution is ordered and where noncompliance with the restitution order will not in itself yield a potential penalty, the decision whether to make findings and assign reasons is committed to the sound discretion of the circuit court. If the record contains sufficient data for the Supreme Court of Appeals to review the basis of the circuit court's order, the court need not assign specific reasons for its decision to order full restitution. However, if the record is insufficient, if potential penalties will be triggered by the defendant's failure to pay the restitution which has been ordered, or if less than full restitution is ordered, the court must make appropriate findings and conclusions regarding the matters which it has considered, including but not limited to the losses sustained by any victims, the financial resources and earning ability of the defendant and the defendant's dependents, and the tailoring of the amount of restitution which a defendant must pay to the defendant's means and circumstances. However, to facilitate appellate review and maximize the likelihood of wellreasoned decision-making, in all cases when restitution is ordered pursuant to W.Va.Code, 61-11A-1 et seq. and particularly when large sums are involved, a circuit court is well advised to exercise its discretion and make full findings and conclusions regarding restitution, even when such findings are not required. For the foregoing reasons, we conclude that the appellant's assignment of error as to the adequacy and amount of the restitution order is without merit.