Court Opinion

ID: 4671810
Source: CourtListenerOpinion
Date Created: 2021-03-26 14:07:05.078141+00
Date Added: 2024-06-11T08:02:48.509738
License: Public Domain

RENDERED: MARCH 19, 2021; 10:00 A.M.
                              TO BE PUBLISHED

                    Commonwealth of Kentucky
                               Court of Appeals
                                  NO. 2020-CA-0515-MR

ANDREW MCMICHAEL                                                       APPELLANT

                    APPEAL FROM JEFFERSON CIRCUIT COURT
v.                   HONORABLE AUDRA J. ECKERLE, JUDGE
                         ACTION NO. 19-CR-000882-002

COMMONWEALTH OF KENTUCKY                                                APPELLEE

                                    OPINION
                            REVERSING AND REMANDING

                                        ** ** ** ** **

BEFORE: ACREE, DIXON, AND K. THOMPSON, JUDGES.

DIXON, JUDGE: Andrew McMichael appeals the order of restitution entered by

the Jefferson Circuit Court on March 10, 2020. After careful review of the record,

briefs, and law, we reverse and remand.

                On October 22, 2019, McMichael pled guilty to theft by unlawful

taking over $500 but less than $10,0001 for removing and scrapping some stainless

1
    Kentucky Revised Statutes (KRS) 514.030(2)(d), a Class D felony.
steel siding from a 1952 Mountain View modular diner owned by Moseley

Putney.2 The scrapping of the stainless steel netted approximately $150, which

was split amongst McMichael, his codefendant, and perhaps another party not

prosecuted in this action.3 As part of the plea agreement, McMichael agreed to pay

restitution in an amount to be determined by the trial court.

                On March 9, 2020, a restitution hearing was held. Putney, the sole

witness for the Commonwealth, testified that he bought the diner in 1991 for

approximately $25,000. At the time of purchase, the diner was in need of

restoration, including repairs to its roof and one end, and it did not include a

kitchen. After purchase, Putney simply moved the diner—twice—with its final

destination being a storage site where it was exposed to the elements for over 15

years. Putney visited the storage site every few years to weed-eat, cut back trees,

take pictures, and generally inventory the diner. Prior to discovering the theft of its

siding, it had been 18 to 24 months since Putney had visited the diner. Putney

produced no photos from his last visit prior to the vandalism but, rather, one photo

of the diner’s good side which he believed to be taken five to ten years before

removal of the siding. He also produced two photos of the diner taken after the

2
    He is also referred to as “Mose” and “Moses” Putney in the proceedings below.
3
  McMichael’s codefendant offered testimony at the restitution hearing about the involvement of
another man he knew only as “Junebug” who may have also shared in the profits.

                                               -2-
siding removal, which showed much of the siding still intact (though not in pristine

condition), and two photos of the siding found at the salvage yard.

              The foregoing notwithstanding, Putney believed he could have sold

the diner before the siding was removed for $30,000 to $60,000. He also believed

the diner could generate three million dollars or more once fully restored and

operational. Nonetheless, Putney never insured the diner or procured an insurer’s

estimation as to its value. Putney acknowledged the stainless steel siding removed

by McMichael had a low salvage value but claimed it had a much higher fair

market and/or replacement value due to its “custom” bending and the forming of

the metal which made it “unique.” Putney further acknowledged much, if not all,

of the siding was recovered; however, he testified it was damaged and unusable.

Putney testified he had consulted Merrick Kemper, a local sheet metal and roofing

contractor, and obtained two repair estimates, which were entered as exhibits.4

The first estimate for a partial repair was $62,493, while the second estimate for a

more complete repair was $221,800.

              On cross-examination, Putney denied telling police the diner was

worth only $3,000, the amount cited in the criminal complaint. Putney explained

that amount only estimated the salvage value of the steel taken, not the value of the

4
  McMichael objected to the admission of these estimates as exhibits since he did not have the
opportunity to cross-examine their author. His objection was overruled by the trial court.

                                              -3-
diner itself. He also testified that he had no idea what the salvage value of the

stainless steel was but thought it would have been higher. Putney conceded he had

no records regarding the purchase of the diner, nor did he have documentation to

support his estimates that the sale value of the diner before the siding was removed

was between $30,000 and $60,000 or that the diner could generate millions of

dollars once fully restored and operational.

             McMichael requested restitution be set at either the amount for which

the stainless steel was scrapped (approximately $150) or the amount set forth in the

initial complaint ($3,000). McMichael argued the Commonwealth had not met its

burden of proof to establish higher restitution where Putney’s testimony conflicted

with the initial complaint, which was never amended and was not supported by

documentation. McMichael further argued the diner was not worth the amount

Putney asserted because it had been sitting in the woods since the 1990s and was in

need of extensive restoration before the siding was removed. The Commonwealth

disagreed, asserting Putney was competent to testify and his testimony was

supported by repair estimates from a company specializing in metal work. The

Commonwealth asked the court to set restitution at $62,493, the amount necessary

to repair the damage caused by the theft. The trial court agreed and ordered

McMichael to pay $62,493 in restitution. This appeal followed. Additional facts

will be introduced as they become relevant.

                                         -4-
                 On appeal, a trial court’s finding as to the amount of restitution will

not be set aside unless it is clearly erroneous, i.e., unsupported by substantial

evidence. Jones v. Commonwealth, 382 S.W.3d 22, 32 (Ky. 2011); Mitchell v.

Commonwealth, 538 S.W.3d 326, 329 (Ky. App. 2017). “Substantial evidence is

evidence which, when taken alone or in light of all the evidence, has sufficient

probative value to induce conviction in the mind of a reasonable person.” Mitchell,
538 S.W.3d at 329.

                  McMichael has appealed the sum of restitution as determined by the

trial court. He makes three arguments why the trial court erred by setting a

restitution amount in excess of $62,000: (1) the Commonwealth failed to present

any evidence having even a minimum indicium of reliability that the diner or its

metal siding was worth more than the $3,000 noted in the criminal complaint; (2)

the court’s finding that the diner and its siding had a higher value was ambiguous;

and (3) the diner and its siding had little to no value on the fair market.

                 We begin by noting restitution to the victim herein is required by

statute since McMichael pled guilty to a Class D felony offense. KRS

532.356(1)(b).5 Pursuant to KRS 532.350(1)(a), restitution is rather vaguely

5
    The text of the statute states in relevant part,

                 (1) Upon a person’s conviction and sentencing for any . . . Class D
                 felony offense, . . . the court shall impose the following sanctions
                 in addition to any imprisonment, fine, court cost, or community
                 service:

                                                       -5-
defined as “any form of compensation paid by a convicted person to a victim for

. . . property damage . . . because of a criminal act[.]” Unless the amount of

restitution is agreed upon by the parties, constitutional due process requires a trial

court to conduct an adversarial hearing for the purpose of determining a restitution

amount. Jones, 382 S.W.3d 22. At this hearing, the Commonwealth bears the

burden of establishing the validity of the restitution claim and the amount of

restitution by a preponderance of the evidence. Id. at 32. Formerly, under KRS

431.200, juries were required to determine the restitution amount.6 However, after

the enactment of KRS 532.032, restitution determinations are made by the trial

court and not by jury when this statute is applicable. See Brown v. Commonwealth,

540 S.W.3d 374 (Ky. 2018); Fields v. Commonwealth, 123 S.W.3d 914, 916 (Ky.

App. 2003), as modified (Nov. 26, 2003).7 Moreover, trial courts are vested with

                       ...

                       (b) Restitution to the crime victim as set out in KRS
                       439.563, 532.032, and 532.033.
6
  Pursuant to KRS 431.200, “[a]ny person convicted of a misdemeanor or felony for taking,
injuring or destroying property shall restore the property or make reparation in damages if not
ordered as a condition of probation.”
7
    According to Fields:

                    The mandate of this statute applies regardless of whether the
                convicted defendant is to be incarcerated or conditionally
                released. We agree with the Commonwealth that under this statute
                restitution must now be considered during sentencing in all
                appropriate cases, and therefore that the General Assembly
                contemplated ordinary sentencing procedures as the foundation for

                                               -6-
“broad discretion . . . to resolve [restitution] matter[s] in a way that respects the

constitutional rights of all the parties and that achieves substantial justice.” Jones,
382 S.W.3d at 31.

              Unfortunately, Kentucky’s restitution statutes give little guidance on

how the amount of restitution is to be determined. Moreover, few published

opinions have set out any methodology to follow in determining equitable

restitution orders. Nevertheless, in most theft cases, determining the value of the

thing stolen is a rather easy endeavor. For example, in Mitchell, the victim’s

testimony as to the value of items stolen, based on the prices for the same items

listed on Amazon.com, was deemed sufficient to support the trial court’s

determination as to the amount of restitution. Mitchell, 538 S.W.3d at 328, 330.

However, herein, apparently 1950s era modular diner stainless steel siding is one

of the few things Amazon.com fails to offer for sale. Furthermore, Putney offered

no testimony of any research—online or otherwise—conducted to verify his

estimates of the diner or the value of its siding.

              restitutionary sentences, not the jury procedure referred to in KRS
              431.200. In the cases where KRS 431.200 applies, that statute
              continues to provide an alternative procedure for a post-sentencing
              restitution order, but KRS 532.032 (and the statutes incorporated
              therein) is now the generally applicable criminal restitution statute.
123 S.W.3d at 916 (internal footnote omitted).

                                                 -7-
             The uncontroverted evidence offered by the Commonwealth at the

hearing established Putney purchased the diner in 1991 for approximately $25,000

in a significant state of disrepair. After the purchase, Putney had done nothing

more than move the diner a couple of times, leaving it at an outdoor storage lot for

over 15 years unprotected from the weather. Certainly, nothing had been done to

increase its value. McMichael testified he shared the $150 from the sale of the

stainless steel. The only shred of evidence presented by the Commonwealth as to

the value of the metal came through an estimate to replace the sheet metal on the

unusable diner for over $62,000—more than double what Putney paid in 1991 for

the entire diner! Surely the adage “crime doesn’t pay” is a vast understatement

when applied to McMichael.

             Even so, appellate courts in Kentucky have established few procedural

guides for restitution determinations. Significantly, the courts have recognized a

criminal defendant’s right to due process in the establishment of a restitution

amount. Fields, 123 S.W.3d 914; Wiley v. Commonwealth, 348 S.W.3d 570, 575

(Ky. 2010); Jones, 382 S.W.3d 22. Additionally, restitution awards must be based

on reliable facts. Id. As noted in Wiley, and applied to restitution proceedings,

“although a lower standard of due process applies at sentencing, the facts relied on

by the court must ‘have some minimal indicium of reliability beyond mere

allegation.’” Wiley, 348 S.W.3d at 575 (quoting Fields, 123 S.W.3d at 917).

                                         -8-
             Kentucky courts have addressed the establishment of value of stolen

property in the context of determining the proper crime charged. In Allen v.

Commonwealth, 148 Ky. 327, 146 S.W. 762 (1912), the Court observed:

             In cases like this, where the degree of the offense
             depends upon the value of the property, it often happens
             that the witnesses will differ as to its value; and, when
             there is a difference of opinion as to this matter, it is for
             the jury to form their own conclusion from the evidence
             as to the value of the property stolen. Evidence of the
             cost price of an article is not conclusive as to its value;
             nor, indeed, is evidence as to its selling price. The test
             by which the degree of guilt of the accused is to be
             determined is the value of the article at the time it was
             stolen, and this value is to be arrived at by the jury from a
             consideration of all the facts and circumstances shown in
             the evidence. Where the article stolen is in general use,
             and has what might be called a standard market value, of
             course the best evidence of the value of such an article is
             the price at which it sells in the open market. But where
             the article does not appear to have a standard value in the
             open market, or its standard value is not shown, the
             evidence of its value must be arrived at from facts and
             circumstances testified to by witnesses who qualify
             themselves to speak as to its value.
Id. at 762-63 (emphasis added). Here, the question of the stainless steel’s value is

not needed to determine the degree of the offense, as that had already been agreed

upon; rather, the determination of its value goes to the issue of restitution. Since

the stainless steel at issue herein does not appear to have a standard value in the

open market, and its standard value was not shown, the evidence of its value must

be determined from facts and circumstances testified to by a witness who qualifies

                                          -9-
himself to speak to its value. The sole witness for the Commonwealth was the

diner’s owner, Putney; no evidence of his qualifications to testify as to the diner’s

worth, beyond merely being its owner, was presented.

                As previously noted, in Fields, we held that “[t]he due-process

clauses of the federal constitution require that sentences not be imposed on the

basis of material misinformation, and that facts relied on by the sentencing court

have some minimal indicium of reliability beyond mere allegation.” Fields, 123
S.W.3d at 917 (emphasis added) (internal quotation marks and footnotes omitted).

Following Fields, in Wiley, our Supreme Court further held that “the record must

establish a factual predicate for the restitution order.” Wiley, 348 S.W.3d at 575.

                “In the ordinary case, the proper yardstick is the market value of the

property at the time and place of the larceny; the original cost of the property or

any special value to the owner personally is not considered.” 3 CHARLES E.

TORCIA, GRADES OF LARCENY—DETERMINATION OF VALUE, WHARTON’S

CRIMINAL LAW § 345 (15th ed. 2020) (footnotes omitted).8 Herein, Putney offered

8
    52B Corpus Juris Secundum (C.J.S.) Larceny § 81 (2021) provides:

                In the absence of statutes providing otherwise, the measure of
                the value of a subject of larceny is its fair market value at the
                time and place where the alleged crime has been committed. If
                an article does not have a market value, its actual value must
                be determined from a consideration of all the facts and
                circumstances in evidence.

                                              -10-
nothing more than his mere opinion of the worth of both the metal and the diner.

There was no evidence of the current value of the diner or of the stainless steel at

the time it was taken. This is simply insufficiently detailed or reliable to establish

a fair restitution computation; due process requires more.

             Regrettably, Kentucky courts have not found a specific formula as an

appropriate method to determine an equitable sum when setting restitution, which

is by its very nature not an exact science. See United States v. Diamond, 969 F.2d
961, 965 (10th Cir. 1992). They have, however, recognized that using certain

             Unless otherwise provided by statute, the “value” of the stolen
             property means its market value, or fair market value, or
             reasonable selling price, at the time and place of the theft. The
             place that determines the market value of stolen property for the
             purpose of fixing the degree of larceny is necessarily somewhat
             flexible and uncertain in extent.

             Market value has been defined as the price at which a willing seller
             and a willing buyer will trade or price actually charged and
             received by the merchant in usual, customary sale of the goods
             stolen. Any evidence bearing on the question of fair market value
             may properly be considered.

             Where an item that was stolen has no market value, its actual value
             must be shown in order to determine the grade of the offense. In
             such a case, the article’s actual value must be determined from a
             consideration of all the facts and circumstances in evidence,
             including the testimony of witnesses who qualify themselves to
             testify as to its value. Value may not be determined solely by its
             worth to the owner or its original cost. However, cost, together
             with other proof, may afford the basis for a valid finding as to
             value. In addition, replacement value may be determinative where
             the property has no cash market value, or such value cannot be
             ascertained.

                                            -11-
valuation methods of property stolen or damaged may not always be reliable when

based on conjecture and speculation. In Kentucky Utilities Company v.

Consolidated Telephone Company, 252 S.W.2d 437 (Ky. 1952), Kentucky’s

highest Court refused to use market value to measure damages to a telephone line

because “[i]n ordinary circumstances a portion of a telephone system would not be

marketable as such” and thus “any estimate of the market value of a portion of a

telephone system would be conjectural[.]” Id. at 441. It is well established that an

award of restitution may not be based on mere speculation. Fields, 123 S.W.3d
914; Wiley, 348 S.W.3d at 575; Jones, 382 S.W.3d 22. Thus, both the facts and the

method for determining restitution should be reliable.

             To determine the proper method to employ when setting restitution,

we must look to the legislature’s intent and purpose behind its statutes governing

same. The Supreme Court in Commonwealth v. Bailey, 721 S.W.2d 706, 707 (Ky.

1986), observed the purpose of restitution as follows:

             We also do not feel this is additional punishment exacted
             by the criminal justice system. It is neither imprisonment
             as envisioned by KRS Chapter 532, nor fine as set out
             in KRS Chapter 534. It is merely a system designed to
             restore property or the value thereof to the victim. It is
             not punishment to make the criminal give back
             something which was never his and which was obtained
             by him only by commission of a crime.

(emphasis added). Surely, restitution contemplated by our statutes cannot require

payment of a sum equal to more than double what a victim paid for an entire diner

                                        -12-
just because replacement of its siding would cost an exorbitant amount. To do so

would not restore only what was lost but would amount to a windfall for Putney.

             The legislative purposes behind restitution include “deterrence and

rehabilitation as well as making the victim whole.” Hearn v. Commonwealth, 80
S.W.3d 432, 436 (Ky. 2002). Under Kentucky law, the aim of restitution is the

same as that of compensatory damages, which “is to make the injured party whole

to the extent that is possible to measure his injury in terms of money. The object is

not to place the plaintiff in a better position than he would have been had the

wrong not been done.” Kentucky Cent. Ins. Co. v. Schneider, 15 S.W.3d 373, 374-

75 (Ky. 2000) (citations omitted). Moreover, it is well established that an “injured

party may not make a profit” out of an injury to his property. Reed v. Mercer Cty.

Fiscal Court, 220 Ky. 646, 295 S.W. 995, 996 (1927). Overall, “[t]he complete

idea at the bottom of the matter of allowing damages is to compensate the owner in

money for that of which he was wrongfully deprived.” Manning v. Grinstead, 121
Ky. 802, 90 S.W. 553, 555 (1906).

             Here, the trial court’s measure of damages offends the most general

principles of damages law. Putney purchased the diner in 1991 for approximately

$25,000. Although some items increase in value over time, given the facts of this

case—that the diner was inoperable at the time of purchase, was left uninsured in a

storage field exposed to the elements to further deteriorate, and Putney was unable

                                        -13-
to sell it or find a partner for his business venture—the Commonwealth has failed

to meet its burden of proving that is the case here. An award of $62,493 to Putney

in restitution would clearly create a windfall in his favor at McMichael’s detriment.

Any such measure of damages would go far beyond compensating Putney for that

of which he was wrongfully deprived and would clearly operate as a windfall

profit. Accordingly, it was clear error for the trial court to award an amount of

restitution that created such a windfall for Putney.9

              With the legislature’s purpose behind restitution firmly in mind, we

again turn to the issue of determining a proper method for setting restitution.

McMichael argues the trial court erred when it failed to determine whether it was

reasonable to repair the diner after weighing the decrease in its value versus the

cost of repair. There is an inexplicable dearth of published criminal case law on

the issue of reasonableness of repair costs and what amounts to excessive

restitution. Nevertheless, in Mitchell, another panel of our Court discussed a

somewhat similar situation. In that case:

              [the victim] testified that stolen televisions were
              recovered but one was damaged. The estimated repair

9
  See Level 3 Commc’ns, LLC v. TNT Constr., Inc., 220 F. Supp. 3d 812 (W.D. Ky. 2016). See
also United States v. Howard, 784 F.3d 745, 750 (10th Cir. 2015) (internal quotation marks and
citation omitted) (A restitution award “must not unjustly enrich crime victims or provide them a
windfall.”); United States v. Zander, 794 F.3d 1220, 1233 (10th Cir. 2015); United States v.
Boccagna, 450 F.3d 107, 121 (2d Cir. 2006); United States v. Arutunoff, 1 F.3d 1112, 1121 (10th
Cir. 1993); United States v. Stanley, 309 F.3d 611, 613 (9th Cir. 2002). Although these cases
discuss the federal Mandatory Victims Restitution Act (MVRA), 18 United States Code
Annotated § 3663A, the same principle applies here.

                                             -14-
              value for the damaged television was $650 and the
              replacement value was $400. . . . The $250 difference
              between the repair cost and the replacement value of the
              damaged television was deducted from the restitution
              sought . . . .
538 S.W.3d at 328. Likewise, herein, the difference between the estimated repair

and the replacement value should be disallowed and deducted from the restitution

amount.

              Considering the absence of further relevant criminal case law on this

issue, we must also compare the case herein to principles espoused in areas of civil

law. In tort law, it is generally accepted that “repair is unreasonable when its cost

exceeds the difference in the before and after values.” Newsome v. Billips, 671
S.W.2d 252, 255 (Ky. App. 1984). Why, then, should we demand a different

outcome in criminal cases?

              In Newsome, another panel of our Court discussed this principle found

in the law of torts, stating:

                     We are dealing with recovery for a tort and not an
              insurance contract which might allow for some costly
              restoration. The tort-feasor is responsible for the lesser
              of the cost to cure and the diminished value. The
              Restatement of Torts is generally consistent. It provides:

                     If one is entitled to a judgment for harm to land
                     resulting from a past invasion and not amounting
                     to a total destruction of value, the damages include
                     compensation for

                                         -15-
      (a) the difference between the value of the land
      before the harm and the value after the harm, or at
      his election in an appropriate case, the cost of
      restoration that has been or may be reasonably
      incurred,

      (b) the loss of use of the land, and

      (c) discomfort and annoyance to him as an
      occupant.

Restatement (Second) of Torts, § 929, at 544 (1977). The
option for restoration is nevertheless limited by what is
“reasonable.”

An example of a situation with possible high cost and
low loss might be a house with aluminum siding which
gets some dents from flying rocks due to blasting. A
substantial cost might be required to remove the dents,
but the diminished value might be very little. The loss
would be especially small, if the siding already had
several dents from other causes.

We conclude that the instruction was a correct statement
of the law, and that it was properly applied to the facts as
they were proven at trial. The instruction was based on
[Edwards & Webb Constr. Co. v. Duff, 554 S.W.2d 909
(Ky. App. 1977)]. That case involved a total loss, but it
also prevented the repair cost from exceeding the loss in
value.

The law is clear enough. The problem in this case is with
the proof and the development of the facts. The
estimated cost to repair ranged from $600.00 to
$12,500.00. The loss in value was essentially fixed at
$800.00. The jury could have awarded damages between
$600.00 and $800.00. The verdict of $800.00 was proper
whether it was based on the jury’s determination of a cost
to repair or the actual loss in value as was proven.

                            -16-
Id. (emphasis added). The case herein is faced with a similar problem of proof and

fact development. Here, there is a wide range of estimated cost of repair, as well

as uncertainty regarding the loss of value which should act as a cap on the amount

of restitution. That cap should be determined before awarding repair costs, which

are unreasonable per se if they exceed that amount.

             In another tort case discussing caps on recovery, Ellison v. R & B

Contracting, Inc., 32 S.W.3d 66 (Ky. 2000), the Court held:

             Questions regarding the cost of repairing a particular
             injury to real estate and the extent of any diminution in
             fair market value of the real estate as a result of an injury
             are questions of fact. Accordingly, we hold that in future
             cases where a claimant seeks compensation in the form of
             repair costs for an injury to land, trial courts shall
             require the jury to find whether the injury may be
             repaired at a cost less than the diminution in the value of
             the property, and, if the jury finds otherwise, limit the
             claimant’s recovery to the diminution in the value of the
             property. The following sample damages instruction
             taken almost verbatim from J. Palmore and R. Eads,
             Kentucky Instructions to Juries, § 39.12 (Anderson
             Publishing Co.1989) accomplishes this purpose:

                   INSTRUCTION NO. ______

                   If you find for P you will determine from the
                   evidence and award [P] the lesser of the following
                   two amounts:

                   (A) the reasonable cost of restoring [P’s] property
                   to substantially the same condition as immediately
                   before it was damaged by [ ].

                   OR

                                         -17-
                     (B) the difference between the fair market value of
                     [P’s] entire property immediately before and
                     immediately after the property was damaged, not
                     to exceed ______.

                     “Fair market value” is the price that a person who
                     is willing but not compelled to buy would pay and
                     a seller who is willing but not forced to sell would
                     accept for the property in question.
Id. at 70-71 (some emphasis added) (footnote omitted). Again, here, there is no

evidence of the amount of diminution in the value of Putney’s property. The

difference in the value of the diner immediately preceding and following the

removal of its siding should be determined and serve as a cap on the amount of

restitution.

               We also find 25 C.J.S. Damages § 152 (2021) instructive. It states,

the “measure of damages for injury to, or destruction of, buildings or other

structures is the amount of the loss, which may be the difference in the value of the

realty before and after the injury, the value of the building or structure, or, where

practicable, the cost of restoration.” (Emphasis added.) It further provides:

               The measure of damages may be the cost of restoration or
               repair where the building or other structure can be
               restored to substantially the condition it was in prior to
               the injury, at least where such cost is less than the
               diminution in the value of the structure or is less than its
               value before the damage was inflicted. Defendant is not
               required to pay for a new and modern structure,
               disregarding the obsolescent condition of the structure
               when damaged. To the cost of restoration may be added,

                                          -18-
               in a proper case, the loss of rental, or of use, or
               diminution in the value of the use of the property, during
               the time required for repairs, with a deduction, if such be
               the case, for the cost of restoring the property with new
               material more valuable than that destroyed.

                                    Lack of market value.

               Where a building is without market value, its real or
               ordinary cash value is to be obtained from a
               consideration of other factors, such as its cost, the uses to
               which it has been put, and its age, condition, and
               location. The price at which the owner has contracted to
               sell it is not controlling.

(Some emphasis added) (footnotes omitted).10

10
   Under the “lesser than” measure of damages for a negligently damaged building, the owner is
entitled to recover the entire cost of restoring the damaged building to its former condition unless
such cost exceeds its diminution in value as the result of the injury, in which event the recovery
must be limited to the amount of such diminution.

These legal principles are widely accepted in jurisdictions throughout the United States. See
Brooklyn Waterfront Terminal Corp. v. Int’l Terminal Operating Co., 211 F. Supp. 702 (S.D.
N.Y. 1962), order aff’d, 311 F.2d 221 (2d Cir. 1962); T.H. Browning S.S. Co. v. F.H. Peavey &
Co., 235 F.2d 5 (8th Cir. 1956); Russell v. United States, 113 F. Supp. 353 (M.D. Pa. 1953); City
of Globe v. Rabogliatti, 24 Ariz. 392, 210 P. 685 (1922); S. Ry. Co. v. Wooten, 110 Ga. App. 6,
137 S.E.2d 696 (1964); Britven v. Occidental Ins. Co., San Francisco, Cal., 234 Iowa 682, 13
N.W.2d 791 (1944); Bus. Realty, Inc. v. Noah’s Dove Lodge No. 20, 375 S.W.2d 389 (Ky. 1963);
Price Bros. v. City of Dawson Springs, 190 Ky. 349, 227 S.W. 470 (1921); States Corp. v. Shull,
216 Ky. 57, 287 S.W. 210 (1926); Prestonsburg Superior Oil Gas Co. v. Vance, 215 Ky. 77, 284
S.W. 405 (1926); Reisz v. Kansas City S. R. Co., 148 La. 929, 88 So. 120 (1921); Ziegler v.
Predmore, 341 Mich. 639, 68 N.W.2d 130 (1955); Fite v. N. River Ins. Co., 199 Mich. 467, 165
N.W. 705 (1917); Long v. Magnolia Hotel Co., 236 Miss. 655, 111 So. 2d 645 (1959),
suggestion of error sustained on other grounds, 236 Miss. 655, 114 So. 2d 667 (1959); Snider v.
Town of Silver City, 56 N.M. 603, 247 P.2d 178 (1952); Ferreri v. Dworman Assocs., Inc., 34
Misc. 2d 1053, 231 N.Y.S.2d 399 (Sup. Ct. 1962); Zaras v. City of Findlay, 112 Ohio App. 367,
16 Ohio Op. 2d 306, 176 N.E.2d 451 (1960); Dussell v. Kaufman Const. Co., 398 Pa. 369, 157
A.2d 740, 79 A.L.R. 2d 957 (1960); Thompson v. King Feed & Nutrition Serv., Inc., 153 Wash.
2d 447, 105 P.3d 378 (2005).

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             The common theme is: pre- and post-incident values must be

established and their difference serve as a cap on recovery. Here, little or no effort

was made to establish pre- or post-theft values of the diner or its siding, much less

calculate their difference to serve as a cap on restitution. We believe these values

must be determined, and the cap applied, to set restitution which comports with its

intent in order to obtain substantial justice.

             Yet another consideration the trial court must apply when calculating

restitution is the value of the recovered siding. Although Putney testified the

siding was “worthless,” presumably when it came to re-attaching it for use on the

diner’s exterior, it undoubtedly had some value, even if only as scrap metal.

McMichael is entitled to an offset against his restitution by the value of the

recovered siding. Cases reviewing restitution under federal law are instructive on

this principle. “[T]he determination of the amount of loss must account for any

benefit received by the victim.” United States v. Guthrie, 64 F.3d 1510, 1516

(10th Cir. 1995). “Amounts a victim receives that reduce the loss are not to be

included in the restitution amount[.]” United States v. Scott, 74 F.3d 107, 110 (6th

Cir. 1996). Consequently, the value of the returned siding must be established and

deducted from the amount of otherwise allowable restitution.

             As a final note, we sua sponte point out another serious flaw with the

trial court’s restitution order. Contrary to KRS 532.033, the trial court’s order did

                                          -20-
not provide to whom restitution payments should be made, how much the

payments should be, or when they should be made. These are required for a valid,

binding, and enforceable restitution order. See Rollins v. Commonwealth, 294
S.W.3d 463, 465 (Ky. App. 2009). This restitution order must also comply with

this statute.

                                     CONCLUSION

                Therefore, and for the foregoing reasons, the order of restitution of the

Jefferson Circuit Court is REVERSED and REMANDED to the trial court for

further proceedings consistent with this Opinion.

                ALL CONCUR.

 BRIEFS FOR APPELLANT:                        BRIEF FOR APPELLEE:

 Christopher B. Thurman                       Daniel Cameron
 Louisville, Kentucky                         Attorney General of Kentucky

                                              Kristin L. Conder
                                              Assistant Attorney General
                                              Frankfort, Kentucky

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