This post examines an opinion from the Court of Special Appeals of Maryland: In re Raymond C., 2016 WL 3856139
(2016). The caption of the case differs
from the “State v. ____” or “U.S. v. ____” type of caption that is used in adult
criminal cases. As Rule 5(A) of the Ohio Rules of Juvenile Procedure explains,
for example, that
a juvenile court decision submitted for
publication, the names of all juveniles shall be replaced with initials in the
caption and body of the published decision. In any press release or other
public presentation of information from a juvenile court, the names of any
juvenile shall be replaced with initials.
Getting back to the opinion, the Court of Special Appeals
begins by explaining that
[a]t the disposition hearing and in
this appeal, appellant has conceded that the victim is entitled to restitution
for her stolen iPhone 4. The sole appellate issue is whether the juvenile court
`used the wrong standard in determining the amount of restitution owed,’ when
it ruled that the victim `was entitled to the original purchase price of the
iPhone 4 so that she could be made “whole.”’ We conclude that the juvenile
court erred by basing the amount of restitution on the original purchase price
of the phone, rather than the replacement cost for the phone, which would have
reflected depreciating market factors, including the availability of newer
models such as the iPhone 5. Accordingly, we shall vacate the restitution order
and remand for a new restitution proceeding.
In re Raymond C., supra.
The court then goes on to outline the facts that led to this
proceeding:
Pursuant to an agreed statement of
facts, appellant entered a plea of involved to the May 2014 theft of an iPhone
4. At a July 22, 2014 hearing, the State sought restitution for the victim,
Schina McKinnon Shields. Shields testified that on February 14, 2013, she
purchased two new iPhone 4 cell phones for her daughters, paying a total of
$540, or $270 for each. She produced store receipts showing a deposit of $94,
plus a paid balance of $445.97. According to Shields, the phone stolen by
appellant was working and in good condition. Moreover, the price paid for the
phone did not include a phone contract, because the family already had
purchased a plan.
Citing this evidence, the State
requested restitution in the amount of $270, representing the purchase price
for the stolen phone. Defense counsel argued that the court was required to
take into account the depreciated market value of the phone.
In re Raymond C., supra.
The Court of Special Appeals went on to explain that “[t]he
following colloquy ensued:”
[DEFENSE COUNSEL]: If the Court were to
take the witness at perhaps her misunderstood word that each phone was $270, in
the world of cell phones, a depreciation of a year is going to be substantial.
When it comes to the replacement, as
she testified of an iPhone 4 in the spring of this year, there are additional
models of an iPhone 5 where newer technology exists and so I would ask the
Court to take into account the fact that depreciation is going to occur rather
rapidly in that kind of case. And so, if the Court is inclined to grant
restitution based on that, then it should consider that the phones are going to
be worth substantially less than $275. We would ask in the neighborhood of $100—
THE COURT: Let me ask you, if you
bought a new one, it would be substantially more?
[DEFENSE COUNSEL]: If you were to buy a brand
new iPhone, the latest iPhone 5, it would be substantially more.
THE COURT: Today?
[DEFENSE COUNSEL]: Today.
THE COURT: Replacement cost.
[DEFENSE COUNSEL]: Your Honor, the
replacement cost would be the replacement for the item that was taken, not the
latest and greatest.
THE COURT: Replacement cost.
[DEFENSE COUNSEL]: It would be for—it
would be for the phone that was taken.
THE COURT: And that was a new phone
that was purchased. Why must she now go buy a used phone?
[DEFENSE COUNSEL]: Because your Honor
what was taken was a used phone. A new phone was not taken.
THE COURT: But they have to buy a phone
now.
[DEFENSE COUNSEL]: And on the
used market, I am not sure what the market rate for a used iPhone 4 is but the
respondent, the witness is not entitled to replacement of a brand new phone.
THE COURT: Yes, she is. She is
entitled to be made whole.
[DEFENSE COUNSEL]: To be made
whole. Absolutely.
THE COURT: With an item.
[DEFENSE COUNSEL]: And in that
case, that was an iPhone 4.
THE COURT: She didn't purchase a used
phone.
[DEFENSE COUNSEL]: She did not purchase
a used phone.
THE COURT: Okay.
[DEFENSE COUNSEL]: She purchased a
brand new phone a year before—
THE COURT: Replacement cost.
[DEFENSE COUNSEL]:—this incident
occurred.
THE COURT: Replacement cost.
[DEFENSE COUNSEL]: And so what was
taken was a used phone.
(Emphasis added).
In re Raymond C., supra.
The opinion then explains that the juvenile court
concluded that Shields should receive
the original purchase price of the stolen phone, as follows:
The Court has had an opportunity to
review these two exhibits here, Madam Clerk, 1 and 2 which have been marked for
identification and admitted. I don't believe Ms. Shields was confused. Her
testimony was clear to me. And on the record the she paid $94 for a deposit,
$446.02 [sic] for the phone[s] after she purchased them and it is the Court's
understanding that ... each phone was $270.
Madam Clerk, the Court will in fact
order restitution in the amount of $270.
In re Raymond C., supra.
The opinion then goes on to outline the “standards governing
review of juvenile restitution orders”:
Juvenile courts may order restitution
to `compensate victims who have been injured or who have suffered property loss
as a result of the wrongful acts of a minor, although “a court's concern that
the victim be fully compensated should not overshadow its primary duty to
promote the rehabilitation of the defendant.”’ In re Earl F., 208 Md. App. 269, 276 (Maryland Court of Appeals 2012) (quoting
In re Don Mc., 344 Md. 194, 203
(1996). Restitution promotes rehabilitation of the juvenile by impressing upon
him `the gravity of harm he has inflicted upon another, and provides an
opportunity for him to make amends.’ In
re Herbert B., 303 Md. 419, 417 (Maryland Court of Appeals 1985); see In re Earl F., 208 Md. App. at 276.
In re Raymond C., supra.
The judge went on to explain that, in
both juvenile and criminal cases, restitution
is governed by Md.Code, (2001, 2008 Repl. Vol.), § 11-603 of the Criminal Procedure Article (`Crim.Proc.’), which provides in pertinent part:
(a) Conditions for judgment of
restitution — A court may enter a judgment of restitution that orders a defendant
or child respondent to make restitution in addition to any other penalty for
the commission of a crime or delinquent act, if:
(1) as a direct result of the crime or
delinquent act, property of the victim was stolen, damaged, destroyed,
converted, or unlawfully obtained, or its value substantially decreased;
* * *
(b) Right of victims to
restitution.—A victim is presumed to have a right to restitution under
subsection (a) of this section if:
(1) the victim or the State requests
restitution; and
the court is presented with competent
evidence of any item listed in subsection (a) of this section.
See also Md. Code, §3-8A-28 of the Courts & Judicial Proceedings Article (`The court may enter
a judgment of restitution against the parent of a child, the child, or both as
provided under Title 11, Subtitle 6 of the Criminal Procedure Article).
This Court reviews a juvenile court's
restitution order de novo for legal
error as to the standards applied, for clear error as to any first-level
findings of fact, and for abuse of discretion as to the ultimate decision to
require a payment and the amount of that payment. See In re Earl F., 208 Md. App. at 275 & n. 2
(Maryland Court of Special Appeals; In re Delric H., 150 Md. App. 234,
240 (Maryland Court of Appeals 2003);
see also Silver v. State, 420 Md. 415, 427 (Court of Appeals of Maryland
2011); McCrimmon v. State, 225 Md. App. 301, 306 (Maryland Court
of Appeals 2015).
In re Raymond C., supra.
The court began its analysis of the issues in the case by
explaining that
Appellant argues that the juvenile
court committed legal error in ordering restitution to `make the victim whole,’
rather than to rehabilitate him, and by improperly awarding the amount of the
original purchase price, rather than the depreciated replacement value of the
device, which was no longer new and had been technologically superceded by the
iPhone 5.
We agree with the State that the
juvenile court did not err or abuse its broad discretion by expressing the
purpose of a restitution order under Crim. Proc. § 11-603(a) as making the
victim `whole; by ordering restitution in the amount of the “replacement value”
of her stolen phone. As this Court has recognized, in In re Earl F., 208 Md. App. at 276, the statutory restitution
scheme expressly authorizes compensation of `victims who have . . . suffered
property loss as a result of the wrongful acts of a minor’ because such
payments can promote rehabilitation by demonstrating to the juvenile the actual
consequences of his behavior and by requiring him to take corrective action.
At the heart of this appeal, then, is
appellant's complaint that the juvenile court abused its discretion in ordering
restitution based on the original purchase price of the stolen phone.
Throughout the hearing, the court insisted that restitution should be premised
on replacement cost, which is what it would take to make Shields `whole.’ Such
a replacement cost necessarily would have reflected any depreciation in the
market value of the iPhone 4 as a result of the introduction of more advanced
technology and devices, including the iPhone 5. Yet the State presented no
evidence of the replacement cost for the iPhone 4. Instead, it offered only the
original purchase price of $270 that Shields paid for the phone fifteen months
before it was stolen. In the absence of any other evidence of value, the court
ordered restitution in that amount.
Appellant argues that the juvenile
court's ruling was either an erroneous application of an incorrect legal
standard or an abuse of discretion in setting the amount of the restitution.
Appellant relies primarily on two Maryland decisions recognizing that the value
of stolen computers should take into account the depreciating effect of more
advanced models hitting the market.
In re Raymond C., supra.
The court then went on to explain that in
In
re Christopher R., 348 Md. 408, 444 (1998), the Court of Appeals considered
the appropriate amount of restitution for a stolen computer and related
equipment that was less than three years old. The juvenile court, stating that
it had `absolutely no way to know what rate of depreciation should be used for
computers,’ ordered restitution based on the original purchase price. Id. at 410. Applying the
predecessor to Crim. Proc. § 11-603, which expressly capped the amount at `the
lesser of the fair market value of the property or $5,000,’ the Court of
Appeals held that the it was error to base `restitution on the purchase price
of the stolen property rather than its fair market value at the time of the
theft.’ Id. at 412-413. The
Court reasoned that advances in the field of computer technology `are
constantly being made so that used equipment depreciates in value over relatively
short periods of time.’ Id.
In Champagne
v. State, 199 Md. App. 671, 676-678 (2011), this Court relied on Christopher
R.'s reasoning in concluding that the State failed to prove the value
element in the crime of property theft over $500. Id. at 673. In reviewing the evidentiary record, we recognized that
the burden was on the State to establish beyond a reasonable doubt the value of
a stolen three-year-old laptop, in accordance with Md. Code § 7-103(a) of the
Criminal Law Article, which defines `value’ to mean `the market value of the
property . . . at the time and place of the crime’ or `if the market value
cannot satisfactorily be ascertained, the cost of the replacement of the
property . . . within a reasonable time after the crime.’ Id. at 675. We also recognized that `t]he present market
value of stolen property may be proven by direct or circumstantial evidence and
any reasonable inferences drawn therefrom.’ Id. at 676. Citing Christopher R.'s instruction
about depreciation of computer technology, as well as similar language from
out-of-state cases, we held that the purchase price of the laptop was ‘”‘circumstantially
relevant to the present market value’ of that property,'” but not sufficient by
itself to establish that the value of the computer at the time of the theft was
over $500. Id. at 676-678 (citation
omitted). As a result, we vacated that conviction and directed a guilty verdict
on the lesser included offense of theft of property worth less than $500. Id. at 678.
In re Raymond C., supra.
The Court of Appeals then explained that, in
[a]pplying the teachings of Christopher
R. and Champagne, we agree with appellant that the
juvenile court erred by rejecting defense counsel's argument `that the fifteen
month old iPhone was subject to the same accelerated rate of devaluation as any
other electrical device.’
The State attempts to distinguish Christopher
R. on a number of factual and legal grounds. First, the State argues
that in appellant's case, the juvenile court did not mistakenly believe that it
was required to base the amount of restitution on the original purchase price,
and the State did not take the position that replacement value was irrelevant.
Neither of these proffered differences is material to whether the juvenile
court erred in ordering restitution based on the original purchase price of the
phone.
Alternatively, the State points out
that unlike the predecessor statute applied in Christopher R., the
current version of Crim. Proc. § 11-603 does not expressly limit restitution
orders to `fair market value’ and requires only `competent evidence’ to support
the amount of the restitution. We are not persuaded that the holding or
rationale in Christopher R. would be different under the current
version of Crim. Proc. § 11-603. Although the statute no longer contains
the `fair market value’ language, `a victim's entitlement to a restitution
award and the amount of the award are facts that the State must establish by a
preponderance of the evidence.’ Juliano v. State, 166 Md. App. 531, 540
(2006). It is the State's burden to
`introduce “competent evidence” to carry its burdens of production and
persuasion that the victim is entitled to restitution, and if so, the amount of
it.’ Id. As recognized in Christopher R. and Champagne, when
restitution is ordered for stolen computers and comparable electronic devices
that are commonly subject to market depreciation, including `smart phones’ like
the iPhone models, the State cannot satisfy its burden of production merely by
presenting evidence of the original purchase price.
In re Raymond C., supra.
The Court of Appeals went on to explain that,
[h]ere, there was no dispute that
Shields is entitled to restitution for her stolen phone. When the State offered
evidence of the original purchase price, defense counsel challenged that
evidence, because it did not account for the depreciation in market value
during the fifteen months Shields used it before the theft, during which newer
technology and devices, became available. Neither side offered any
evidence of what a new or used iPhone 4 would cost. Despite the juvenile
court's insistence that the appropriate measure of restitution was the cost to
replace the stolen phone, there was no evidence of that replacement cost.
Under the analytical framework of Crim.
Proc. § 11-603, the question here is whether the original purchase price of
Shields's stolen phone, by itself, established the appropriate restitutionary
measure of her loss. See Juliano, 166
Md. App. at 540 (2006). Following the decision and rationale in Christopher
R., and the rationale in Champagne, we conclude that
the answer is no. It was the State's burden, inherent in its obligation to
prove the amount of restitution by a preponderance of the evidence, to present
admissible evidence showing the replacement cost for the iPhone 4 as of the
date of the theft.
In this case, that proof might have
been as simple as proffering the price of an iPhone 4 from an online retailer.
Indeed, cell phones are widely available and standardized tools of modern life,
for which replacement costs may be rather easily determined.2 Instead,
the State relied solely on the original purchase price, and the juvenile court
erred in basing its restitution order solely on that evidence. Therefore,
we will vacate the order of restitution and remand the case to the juvenile
court so that it may conduct a restitution hearing, at which the State must
establish, by competent evidence, the appropriate amount of restitution for the
stolen phone. See Juliano, 166
Md. App. at 544.
In re Raymond C., supra.
