Court Opinion

ID: 4698747
Source: CourtListenerOpinion
Date Created: 2021-06-25 17:04:27.285901+00
Date Added: 2024-06-11T08:05:57.509928
License: Public Domain

The summaries of the Colorado Court of Appeals published opinions
  constitute no part of the opinion of the division but have been prepared by
  the division for the convenience of the reader. The summaries may not be
    cited or relied upon as they are not the official language of the division.
  Any discrepancy between the language in the summary and in the opinion
           should be resolved in favor of the language in the opinion.

                                                              SUMMARY
                                                             June 24, 2021

                                2021COA86

No. 19CA2273, Peo in Interest of B.H. — Criminal Law —

Sentencing — Restitution — Prejudgment Interest

     A division of the court of appeals determines, as a matter of

first impression, that under section 18-1.3-602(3), C.R.S. 2020,

prejudgment interest only begins to accrue on a restitution claim

for property damage from the date of the victims’ out-of-pocket

losses, which is not necessarily the same date as when the property

was damaged.
COLORADO COURT OF APPEALS                                       2021COA86

Court of Appeals No. 19CA2273
El Paso County District Court Nos. 18JD915 & 18JD1115
Honorable Shannon Gerhart, Judge

The People of the State of Colorado,

Petitioner-Appellee,

In the Interest of B.H.,

Juvenile-Appellant.

                           ORDER REVERSED AND CASE
                           REMANDED WITH DIRECTIONS

                                      Division A
                            Opinion by JUDGE GROVE
                       Bernard, C.J., and Richman, J., concur

                             Announced June 24, 2021

Philip J. Weiser, Attorney General, Kevin E. McReynolds, Senior Assistant
Attorney General, Denver, Colorado, for Petitioner-Appellee

Hardy & Juba LLC, Michael S. Juba, Denver, Colorado, for Juvenile-Appellant
¶1    B.H., a juvenile, appeals the district court’s order awarding

 prejudgment interest on restitution for property losses that he

 caused while committing a string of burglaries and other crimes in

 El Paso County. We reverse the district court’s order and remand

 the case with directions to recalculate prejudgment interest from

 the date of the victims’ out-of-pocket losses.

                           I.    Background

¶2    After B.H. was charged in several juvenile delinquency cases,

 he reached a stipulated agreement with the prosecution under

 which he pleaded guilty to several offenses in exchange for the

 dismissal of other pending cases. The agreement called for a two-

 year sentence in the Division of Youth Services and required B.H. to

 pay restitution related to each of the original charges. The

 agreement was silent, however, as to the accrual of interest on that

 amount.

¶3    After sentencing, the People filed a motion seeking more than

 $100,000 in restitution on behalf of a number of individuals,

 businesses, and insurance companies that had suffered losses as a

 result of B.H.’s conduct. The requested amounts each included

 “interest accrued at 8% from the time of loss.”

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¶4    A few weeks later, the General Assembly passed legislation

 providing that “[i]nterest on an order for restitution does not accrue

 while . . . [t]he defendant is in a juvenile delinquency case and is

 under twenty-one years of age.” § 18-1.3-603(4)(b.5)(I)(B), C.R.S.

 2020; see Ch. 303, sec. 1, § 18-1.3-603(4)(b.5), 2019 Colo. Sess.

 Laws 2778. The parties agreed that the amendment applied to

 B.H., and that postjudgment interest would not accrue so long as he

 met the statutory criteria. But they disagreed about the effect of

 the amendment on prejudgment interest. In a written response to

 the prosecution’s motion for restitution, B.H. asserted that the

 statutory amendment foreclosed interest of any kind. (He does not

 pursue this argument on appeal.) At the restitution hearing, B.H.

 argued that prejudgment interest does not accrue at all on

 restitution relating to property damage.

¶5    The district court rejected both arguments and ruled that “full

 restitution” for property damage includes prejudgment interest

 “from the date of the offense up until the restitution award.” It

 accordingly imposed prejudgment interest on the stipulated

 amounts accruing from the dates of B.H.’s offenses. B.H. contends

 that this was error, and we agree in part. We therefore reverse the

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 district court’s order and remand the case with directions to award

 prejudgment interest from the times that the various victims first

 spent money out of pocket, if any, to repair or replace the property

 that B.H. damaged, stole, or otherwise deprived them of when

 committing the offenses covered by his plea agreement.

              II.   Standard of Review and Preservation

¶6    The narrow issue before us is whether prejudgment interest

 accrues on a restitution claim that is only for property damage, and

 if so, when it begins accruing. Because this is inherently an issue

 of statutory interpretation, we consider it de novo. See People v.

 Cross, 127 P.3d 71, 73 (Colo. 2006).

¶7    B.H. timely objected to the People’s request for prejudgment

 interest, thereby preserving the issue for our review.

                          III.   Applicable Law

¶8    A defendant who causes a victim money damages must pay

 “full restitution.” § 18-1.3-601(1)(b), C.R.S. 2020; see § 18-1.3-

 603(1); see also People v. Reyes, 166 P.3d 301, 302 (Colo. App.

 2007). Restitution is “any pecuniary loss suffered by a victim,”

 including but not limited to “all out-of-pocket expenses, interest,

 loss of use of money, . . . and other losses or injuries proximately

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  caused by an offender’s conduct and that can be reasonably

  calculated and recompensed in money.” § 18-1.3-602(3)(a), C.R.S.

  2020.

                                  IV.   Analysis

¶9          B.H. contends that prejudgment interest cannot be awarded

  on restitution for a crime involving only property damage. The

  People respond that “full restitution” under the statute necessarily

  includes prejudgment interest on the amount of restitution owed,

  beginning on the date of the offense. We do not fully agree with

  either party’s position, and instead hold that while the statute

  requires a court to impose prejudgment interest on a restitution

  award arising from property damage, prejudgment interest only

  begins to accrue once the victim has experienced a loss of use of

  money associated with the property damage or loss.

       A.      Prejudgment Interest Applied to Crimes Against Property

¶ 10        When interpreting a statute, we first determine and give effect

  to the legislature’s intent by examining the plain and ordinary

  meaning of the statutory language. People v. Madden, 111 P.3d

  452, 457 (Colo. 2005). Statutes governing restitution should be

  liberally construed to accomplish the goal of making crime victims

                                        4
  whole. Roberts v. People, 130 P.3d 1005, 1009 (Colo. 2006); accord

  People v. Rivera, 250 P.3d 1272, 1274 (Colo. App. 2010). That is,

  restitution should place the victim in the same financial position as

  if the crime had not been committed. Reyes, 166 P.3d at 304.

¶ 11   Prejudgment interest itself is intended to “compensate fully

  victims for loss of use of money.” Roberts, 130 P.3d at 1006

  (emphasis added). Damaged property costs money to repair. Stolen

  property costs money to replace. And a crime victim’s use of that

  money to repair or replace damaged or stolen property prevents the

  victim from making use of it elsewhere. Thus, to the extent that a

  victim has spent money on repair or replacement, she is entitled to

  prejudgment interest in an amount that “represents the proper

  measure of the value of the use of the money the victim lost

  because the defendant deprived the victim of the use of her money.”

  Id. at 1007.

           B.    Date Prejudgment Interest Begins to Accrue

¶ 12   A crime victim who loses money in a theft is immediately

  deprived of its use. The same is not necessarily true, however, for

  the victim of a property crime. Damage to or theft of property, as

  opposed to cash, does not immediately deprive the victim of the use

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  of the money that he or she will eventually spend to repair or

  replace the stolen or damaged items. That is, a victim of property

  damage or theft is not deprived of the use of the money spent to

  repair the damage or replace the stolen goods until the victim

  actually incurs out-of-pocket expenses for that purpose. If the

  damage is never repaired or the stolen goods never replaced, then

  the victim has not lost the use of the money spent to acquire them.

  While the victim is of course entitled to an award of restitution

  equal to the value of repairing or replacing those items, it does not

  follow that prejudgment interest must accrue on that amount.

¶ 13   Our supreme court has considered when prejudgment interest

  begins to accrue in two circumstances analogous to those here: a

  criminal case involving the theft of government benefits and a civil

  case involving property damage. In both situations, the court held

  that prejudgment interest began accruing at a point distinct from

  the date of the triggering event — specifically, the moment at which

  the victims diverted money that could have been used for other

  purposes to pay for the loss.

¶ 14   In Valenzuela v. People, 893 P.2d 97, 98 (Colo. 1995), the

  court held that prejudgment interest begins to accrue at the time of

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  the victim’s actual pecuniary injury, which is not necessarily the

  time of the theft. There, the district court ordered the defendant to

  pay restitution for fraudulently obtained food stamp benefits.

  Rather than imposing prejudgment interest from the date of the

  theft, however, the supreme court held that prejudgment interest

  was appropriately calculated from the date on which the county was

  required to reimburse the federal government for those food stamps.

  Id. at 101.

¶ 15   Similarly, in Goodyear Tire & Rubber Co. v. Holmes, 193 P.3d

  821, 823 (Colo. 2008), a civil plaintiff’s vacation home was damaged

  by a leak in an embedded heating system. The plaintiff replaced the

  heating system, and the manufacturer was held liable for the

  replacement costs. Id. The court held that the victim was entitled

  to prejudgment interest as of the date he incurred costs to replace

  the heating system, not the date that he first observed the defect.

  Id. at 829.

¶ 16   Applying the logic of both Valenzuela and Goodyear Tire here,

  we conclude that when a criminal defendant damages or steals

  property, prejudgment interest begins to accrue under section 18-

  1.3-603 on the date on which the victim first incurs out-of-pocket

                                    7
  expenses arising from that property damage. For example, if a

  defendant stole a car and damaged it, prejudgment interest would

  begin accruing on the date when the owner or her insurance

  company (or both, depending on deductibles) paid for repairs, and

  not from the date on which the car was actually damaged.

  Similarly, if a business suffered property damage and theft losses

  during a burglary, that business (or, again, its insurer) would be

  entitled to receive prejudgment interest from the date on which it

  began expending funds to secure the building or replace the stolen

  goods.

¶ 17   In both cases, the victim only “loses the use of the money

  involved” when he or she pays to repair or replace the items, and it

  is only when the victim loses the use of the money that

  prejudgment interest is necessary “to compensate the victim for

  such a loss of use.” Valenzuela, 893 P.2d at 99-100. Sometimes,

  such as where a storefront has been damaged, those out-of-pocket

  expenses might be necessary almost immediately. In other

  situations, repairs or replacement might be less urgent or might

  never happen at all.

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¶ 18   Here, the district court did not determine if or when each

  victim of B.H.’s crimes incurred repair or replacement costs.

  Instead, the court directed B.H. to pay prejudgment interest

  beginning at “the time of loss.” Because the time of loss is not

  necessarily the same as the time at which repair or replacement

  costs are incurred, this was not an appropriate measure of when

  prejudgment interest should have begun to accrue.

                            V.    Conclusion

¶ 19   We reverse the district court’s order and remand the case so

  that it may determine the exact date upon which each victim first

  incurred out-of-pocket expenses, if any, to repair or replace the

  items or property that B.H. damaged or stole. Based on those

  findings, the court should order prejudgment interest specific to

  each victim beginning on that date.

       CHIEF JUDGE BERNARD and JUDGE RICHMAN concur.

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