Restitution is a Collateral Consequence; Insured Losses play no part in Ordering Restitution.

State v. Tuialii (ICA June 30, 2009)

Background. Tuialii was charged with theft in the first degree (HRS § 708-839.5(1)(a)) based on an alleged transfer of about $76,000 from his employer's account to his personal account. Tuialii pleaded no contest. The no-contest plea form stated that various penalties, including restitution, could be imposed by the court. The circuit court, however, did not mention restitution during his change-of-plea colloquy. At his sentencing, the circuit court, upon the State's recommendation, ordered that Tuialii pay full restitution. The circuit court entered a free-standing order of restitution. Tuialii filed a motion pursuant to Hawai'i Rules of Penal Procedure (HRPP) Rule 35 on the grounds that he did not change his plea knowingly, voluntarily, and intelligently. The motion was denied and Tuialii appealed.

No Rule 40 Petition, no Remand for Withdrawal. Tuialii argued that because the circuit court failed to mention restitution during his change-of-plea colloquy, he should be permitted to withdraw his no-contest plea. A motion to withdraw a guilty or no-contest plea may be made before the sentence is imposed or no later than 10 days after the sentence is imposed. HRPP Rule 32(d). "At any later time, a defendant seeking to withdraw a plea . . . may do so only by petition pursuant to Rule 40[.]" Id. According to the ICA, Tuialii did not move to withdraw his plea within ten days after sentencing and, thus, was required to bring an HRPP Rule 40 petition. He did not. Instead he brought an HRPP Rule 35 petition. The ICA denied remand for withdrawal of his no-contest plea.

Colloquy need not Include Restitution. The ICA held that the circuit court did not err in omitting from its change-of-plea colloquy the possibility of restitution. The court must advise the defendant of the maximum penalty provided by the law and the maximum extended term of imprisonment. HRPP Rule 11(c). HRPP Rule 11 does not require notice of restitution. The ICA also pointed out that Tuialii's plea form stated that he restitution could be imposed and that Tuialii confirmed that he read the form carefully and discussed it with his attorney.

The ICA also acknowledged that jurisdictions are split on the issue of whether restitution must be part of the change-of-plea colloquy. The ICA sided with those places that consider restitution a collateral consequence (rather than a direct consequence) of a guilty or no-contest plea that need not be part of the change-of-plea colloquy. The ICA explained that, under Hawai'i law, restitution is a "quasi-civil" compensatory sanction that is distinguished from a punitive objective like a fine. State v. Gaylord, 78 Hawai'i 127, 150-54, 890 P.2d 1167, 1190-94 (1995).

So does "quasi-civil" mean Collateral Consequence? Courts do not need to address every consequence of a defendant's changed plea. State v. Nguyen, 81 Hawai'i 279, 288, 916 P.2d 689, 698 (1996). But they must address "direct consequences" that have "a definite, immediate, and largely automatic effect on [the] defendant's punishment." Id. Collateral consequences, on the other hand, do not need to be addressed. These include things like the loss of civil rights, driver's license, or the right to possess a firearm. Id. The Hawai'i Supreme Court explained that these are collateral consequences because "they are peculiar to the individual and generally result from the actions taken by agencies the court does not control." Id. The ICA held that restitution is a "collateral consequence" because restitution is a "quasi-civil" sanction and not a fine that advances punitive objectives. State v. Gaylord, 78 Hawai'i 127, 150-54, 890 P.2d 1167, 1190-94 (1995). Has the ICA characterized sanctions with punitive objectives (e.g. fines and prison) with direct consequences? Does that mean that anything else is collateral? And so does that mean that restitution has no "definite, immediate, and largely automatic effect on [the] defendant's punishment?" Apparently so.

Restitution Statute Covers Amounts that were Indemnified by Insurance Companies. The sentencing court must "order the defendant to make restitution for reasonable and verified losses suffered by the victim or victims as a result of the defendant's offense when requested by the victim." HRS § 706-646(2). Restitution is a "dollar amount that is sufficient to reimburse any victim fully for losses, including but not limited to [f]ull value of stolen or damaged property[.]" HRS § 706-646(3)(a). The ICA rejected Tuialii's claim that restitution was limited to the amount that was not covered by his employer's insurance company. The ICA explained that it is undisputed that Tuialii stole over $76,000 from his employer. This, according to the ICA, constitutes a "loss" under the restitution statute. The ICA noted that deducting the covered amount from the "loss" would be creating an exemption that is not in the restitution statute. Contra HRS § 706-646(4).

Insured Amount is not Reduced from the Restitution Award. Looking to courts of other jurisdiction, the ICA held that indemnification by an insurance company does not affect the amount in restitution a defendant must pay. The ICA explained that repayment of the full amount that the defendant stole or damaged "furthers the rehabilitative purposes of HRS § 706-646 to the greatest extend possible. . . . The interests of justice would not be served by allowing a thief to retain or otherwise benefit from the spoils of his crime because he picked a victim who was prudent enough to have obtained insurance."

But what about a Windfall? The ICA stated that it was "confident that legal or equitable principles, properly raised, will preclude any double recovery against Tuialii in a civil action or any unjust enrichment of either [the employer] or its insurer." After all, when the insurer pays a claim for damages caused by the wrongdoer, the insurer "is entitled to be subrogated to the insured's rights against such party." State Farm Fire and Casualty Co. v. Pacific Rent-All, Inc., 90 Hawai'i 315, 328, 978 P.2d 753, 766 (1999). The ICA also noted that a court in a criminal case "need not sort out insurance indemnities, subrogation rights, and/or other potential civil law implications before ordering a thief or other criminal to repay his [or her] victim under the criminal restitution statute."


Unknown said…
That's why most courts order a restitution study instead of straight restitution. Let ACSB/Probation sort it out.

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