This post examines an opinion from the Court of Appeals of Washington – Division 1: State v. Bea,
2016 WL 6680507 (2016). The court begins by explaining how and why the case
arose:
Bea worked for Jack Henry &
Associates Inc. (Jack Henry), a company that processes financial information
for credit card companies. Employees of the company began receiving text messages from an anonymous sender who threatened to bomb Jack
Henry branches.
Around the same time, Maine State
Credit Union (Maine State) notified Jack Henry of potential fraudulent activity
on four credit card accounts. Police traced both the bomb threats and
fraudulent activity to Bea. Bea pled guilty. The court ordered him to pay restitution to Jack Henry in
the amount of $27,613.34. Bea appeals from this order.
State v. Bea, supra.
You can read more about the text messages and bomb threats
in the news stories you can find here, here and here.
As Wikipedia explains, the
law of restitution is the law of gains-based recovery. It is to be
contrasted with the law of compensation, which is the law of loss-based
recovery. Obligations to make restitution and obligations to pay compensation
are each a type of legal response to events in the real world.
When a court orders restitution it orders the defendant to give up
his/her gains to the claimant. When a court orders compensation it orders the
defendant to pay the claimant for his or her loss. . . .
Restitution may be either a legal
remedy or an equitable remedy, `depend[ing] upon the basis for
the plaintiff's claim and the nature of the underlying remedies sought.’
Generally, restitution is an equitable remedy when the money or property
wrongfully in the possession of defendant is traceable (i.e., can be tied to
`particular funds or property’). In such a case, restitution comes in the form
of a constructive trust or equitable lien.
(emphasis in the original).
Getting back to the opinion, the Court of Appeals went on to
explain that a
trial court's authority to impose
restitution is derived entirely from statute. State v. Tobin, 161 Wn.2d 517, 523, 166 P.3d 1167 (Supreme Court ofWashington 2007). If a court acts within its authority when ordering
restitution, we will not reverse absent an abuse of discretion. State v. Gray, 174 Wn.2d 920, 924, 280
P.3d 1110 (Supreme Court of Washington 2012).
Our statutory scheme authorizes a court
to impose restitution for losses resulting from charged crimes. Restitution for
loss beyond the scope of the crime charged is properly awardable only when the
defendant enters into an express agreement to make such restitution as part of
the plea bargain process. Revised Code of Washington 9.94A.735(5); State v. Woods, 90 Wn. App. 904, 908,
953 P.2d 834, review denied, 136
Wn.2d 1021 (1998). A court may not impose restitution based on a defendant's
general scheme or acts connected with the crime charged when those acts are not
part of the charge and are beyond the scope of the plea agreement. State v. Dauenhauer, 103 Wn. App. 373,
378, 12 P.3d 661 (Washington Court of Appeals 2000), review denied, 143 Wn.2d 1011 (2001); State v. Wood, supra.
State v. Bea, supra.
The opinion then explains that
Bea was charged with and pled guilty to
seven counts: two counts of threats to bomb or injure the property of Jack
Henry, two counts of identity theft in the first degree, one count of identity
theft in the second degree, and two counts of felony harassment.
In the plea deal, Bea agreed to pay
restitution `to Jack Henry and Associates for all costs related to charged
conduct including security measures and reimbursement for fraud losses to
credit customers; for actual losses by Main [sic] State Credit Union credit
card customers [four names are listed].’
State v. Bea, supra.
The Court of Appeals went on to explain that the State (the
prosecution)
`presented a
documented 44-page request for restitution of $40,924.31 to Jack Henry. The
cover sheet stated that this amount included restitution `for an occupational
risk manager to address trauma caused by the defendant's threats ($2,971.21),
auditing costs ($9,714.15), credit monitoring for affected cardholders
($6,637.42), and reimbursement of financial institution that sustained a loss
($21,601.53).’ The documents represented that Jack Henry's losses included
reimbursement of 13 financial institutions for `Fraud Losses.’
A brief hearing on
restitution was held on December 4, 2015. Bea objected that the documents
submitted by the State did not connect the expenses to his conduct in the
charged crimes—particularly with respect to the financial
institutions. The State responded that the amount claimed in restitution
was authorized by the plea agreement.
State v. Bea, supra.
The opinion goes on to explain that the
trial court examined the documents and
determined that the claimed amounts for the risk manager, the auditing costs,
and the credit monitoring were directly related to the plea agreement. The
court decided that the amount claimed for `reimbursement of financial institution
that sustained a loss’ should be reduced. The court stated, `The financial
institution—I am going to limit it to the Maine State Community Bank and the
Maine State Credit Union sums’ and `of financial institution I have limited to
the one that [Bea] agreed to pay.’
Instead of the total amount requested
by the State for 13 different financial institutions, the court included only
two items for financial institutions: the amount of $7,717 claimed for Maine
State Credit Union and the amount of $573.56 claimed for Mainstreet Community
Bank. The court ordered restitution totaling $27,613.34.
State v. Bea, supra.
The opinion then explains that
Bea claims the restitution award
exceeds the court's authority insofar as it covers losses sustained by Maine
State and Mainstreet. Maine State's claim for $7,717 was for issuing 82 new
credit cards, pins, alerts, and similar items. Mainstreet's claim was for an
expense titled `Goodwill credit in regard to card #[----] involved in the
Security Risk Issue,’ with details of what appear to be 9 separate credit card
charges. It is not clear from the record, and the State's brief does not
explain, how the amounts awarded for Maine State and Mainstreet are causally
connected either to Bea's offenses or to the language in the plea agreement.
Bea asks that the matter be remanded for an evidentiary hearing to determine
this question. See State v. Kinneman, 155 Wn.2d 272, 285-86, 119 P.3d 350
(Supreme Court of Washington 2005).
The State contends the court abused its
discretion by limiting the restitution to only 2 of the 13 financial
institutions that Jack Henry had to reimburse for fraud losses. It is not clear
from the record why all 13 claims are not covered by Bea's agreement to
reimburse Jack Henry `for fraud losses to credit customers.’ The State agrees
that the case should be remanded to the trial court for an evidentiary hearing
to determine the proper amount of restitution consistent with the plea
agreement.
We conclude it is appropriate to
reverse the order of restitution and remand for an evidentiary hearing where
the parties will be permitted to explore the factual basis for the items in
dispute as well as the meaning of the language used in the plea agreement.
The order of restitution is reversed.
The matter is remanded for an evidentiary hearing.
State v. Bea, supra.
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