Restitution In Criminal Actions

First published in Trial Talk
October/November 2001
By James H. Chalat, Esq. and Linda J. Chalat, Esq.

Recent amendments to Colorado Statutes Section 16, Criminal Proceedings, provide that every order of conviction consider restitution to the victims. H.B. 00-1169, which became effective on September 1, 2000, added and amended provisions to the Title concerning Restitution in Criminal actions. C.R.S. § 16-18.5-101, et seq. This law provides guidelines and mandates for entry of orders of restitution as to all convictions, including “felony, misdemeanor, petty, or traffic misdemeanor offense(s).” Though well-intentioned, this statutory requirement raises a plethora of ethical and technical problems for the litigator.

Several Colorado statutes impose a duty of “due care,” which, in its breach, may be the basis of a civil action for negligence. Certain statutes also include a criminal component to the framework, such that the same facts and statute will be the basis for both a civil action and a companion criminal proceeding.

H.B. 00-1169 needs to be carefully considered by all counsel in a civil proceeding when the plaintiff in the civil action is also the “victim” in a companion criminal proceeding. The restitution stage of the companion criminal proceeding may directly impact the proceedings in the civil action specifically relating to pecuniary loss damages. The two categories of non-economic damages, e.g., pain and suffering damages and damages for disability and disfigurement, are still left exclusively to the civil action.

ETHICAL CONSIDERATIONS
Tort lawyers have long been cautious about involving themselves in any criminal proceedings which relate to a pending civil action. The basis for this caution is RULE 4.5, of the Colorado Rules of Professional Conduct. Rule 4.5, THREATENING PROSECUTION provides as follows: 

       a. A lawyer shall not threaten to present criminal, administrative or disciplinary charges to obtain an advantage in a civil matter nor shall a lawyer present or participate in presenting criminal, administrative or disciplinary charges solely to obtain an advantage in a civil matter. 
       b. It shall not be a violation of Rule 4.5 for a lawyer to notify another person in a civil matter that the lawyer reasonably believes that the other's conduct may violate criminal, administrative or disciplinary rules or statutes.

Rule 4.5 has its roots in Disciplinary Rule 7-105(A) and Ethical Consideration 7-21. DR 7-105 proscribed threatening "to present criminal charges solely to obtain an advantage in a civil matter." People ex rel. Gallagher v. Hertz, 608 P.2d 335, 338 (Colo. 1979). Rule 4.5 did not alter or materially change the proscription. It is still a violation of the lawyer’s oath to either threaten to present criminal charges, or to “participate in presenting criminal charges solely to obtain an advantage in a civil matter.” However, given that restitution does not become a relevant matter until after the criminal defendant has been charged, and those charges either brought to trial, or admitted in a plea bargain, counsel cannot be said to be participated or threatening to present charges at the restitution stage of the proceedings, “solely to gain an advantage in a civil proceeding.”

The ethical ice becomes pretty thin however, when the law seemingly invites the tort lawyers onto the skating pond of the criminal proceedings. Although H.B. 00-1169 does not specifically authorize lawyer participation in the restitution proceedings, clearly the scope of the new law invites attorney participation, as the evidence necessarily relevant to the restitution proceedings is typically solely within the control of counsel.

The greater ethical dilemma maybe in the determination of how to best serve the client’s interests. The statute arguably provides a parallel forum in which to litigate pecuniary loss damages in a matter in which a criminal proceeding is pending and on which a civil matter for damages is also based.

The Act provides: 

     1. C.R.S. § 16-18.5-102 Definitions . . . (3) (A) “Restitution" means any pecuniary loss suffered by a victim, and includes but is not limited to all out-of-pocket expenses, interest, loss of use of money, anticipated future expenses, rewards paid by victims, money advanced by law enforcement agencies, adjustment expenses, and other losses or injuries proximately caused by an offender's conduct and that can be reasonably calculated and recompensed in money. . .”
     2. C. R. S. §16-18.5-103(1) Every order of conviction of a felony, misdemeanor, petty, or traffic misdemeanor offense, except any order of conviction for a state traffic misdemeanor offense issued by a municipal or county court in which the prosecuting attorney is acting as a special deputy district attorney pursuant to an agreement with the district attorney's office, shall include consideration of restitution. Each such order shall include one or more of the following . . .
     3. The court shall base its order for restitution upon information presented to the court by the prosecuting attorney, who shall compile such information through victim impact statements or other means to determine the amount of restitution and the identities of the victims. . . 
        a. Any order for restitution entered pursuant to this section shall be a final civil judgment in favor of the state and any victim. Notwithstanding any other civil or criminal statute or rule, any such judgment shall remain in force until the restitution is paid in full. 
        b. Any order for restitution made pursuant to this section shall also be deemed to order that: 
         • The defendant owes interest from the date of the entry of the order at the rate of twelve percent per annum; and 
         • The defendant owes all reasonable and necessary attorney fees and costs incurred in collecting such order due to the defendant's nonpayment.
        c. The entry of an order for restitution under this section creates a lien by operation of law against the defendant's personal property and any interest that the defendant may have in any personal property. 
        d. Any order of restitution imposed shall be considered a debt for "willful and malicious" injury for purposes of exceptions to discharge in bankruptcy as provided in 11 U.S.C. sec. 523.
     4. If more than one defendant owes restitution to the same victim for the same pecuniary loss, the orders for restitution shall be joint and several obligations of the defendants.
     5. Any amount paid to a victim under an order of restitution shall be set off against any amount later recovered as compensatory damages by such victim in any federal or state civil proceeding.

Restitution is differentiated from the Crime Victim Compensation Act, C.R.S. § 24-4.1-100.1. et seq. The Victim Compensation Act provides reimbursement from a common fund to crime victims. In order to qualify for reimbursement, the crime must be one in which the perpetrator committed the offense with an intent. In comparison, the Restitution provisions of H.B. 00-1169 , mandates restitution even if the convicted defendant committed the wrongful act with mere carelessness. Further contrasts are noted in the procedure for obtaining Victim Compensation versus restitution. The Crime Victim Compensation Act provides that a district attorney has authority to disburse from the victim compensation fund to provide reimbursement to a crime victim. If the District Attorney refused to pay under the Act, an appeal lies to a local Crime Victim Compensation Board.

A significant “loophole” in the Crime Victim Compensation Act was the mens rea requirement that the act be committed intentionally, knowingly, recklessly or with criminal negligence. As a consequence, District Attorneys could not treat victims of a car accident, caused, for instance, by “careless driving” as victims under the Crime Victim Compensation Act. “Careless driving” has been interpreted as having the mental element of “due regard.” People v. Chapman, 557 P.2d 1211 (Colo. 1977), and therefore that it was not compensable act. A negligent driver could plead guilty to careless driving, and deny negligence in the related civil case. The victim/civil plaintiff had no entitlement to restitution, in the traffic proceeding.

Now however, restitution is mandated even for conduct which is viewed by a tort lawyer as merely negligent, but under modern criminal statutes is nevertheless sanctioned as criminal.

STATUTORY NEGLIGENCE PER SE CLAIMS AND CRIMINAL CHARGES
Examples of Colorado Statutes (beyond the traffic code) which classify “failure to exercise due care” conduct as “criminal:”

A. Hunting § 33-6-122. Hunting in a careless manner. It is unlawful for any person to hunt or take wildlife in a careless manner or to discharge a firearm or release an arrow in a careless manner which endangers human life or property. For the purposes of this section, "careless" means failing to exercise the degree of reasonable care that would be exercised by a person of ordinary prudence under all the existing circumstances in consideration of the probable danger of injury or damage. Any person who violates this section is guilty of a misdemeanor and, upon conviction thereof, shall be punished by a fine of not less than one hundred dollars nor more than one thousand dollars or by imprisonment in the county jail for up to one year, or by both such fine and imprisonment, and an assessment of twenty license suspension points.

B. Boating § 33-13-108. Prohibited vessel operations (2)(a) It is unlawful for any person to operate a vessel in a careless or imprudent manner without due regard for zoning, traffic, and other attendant circumstances or as to endanger any person, property, or wildlife. For purposes of this paragraph (a), careless or imprudent vessel operation includes, but is not limited to, the following: (b) Any person who violates paragraph (a) of this subsection (2) is guilty of a class 2 petty offense and, upon conviction thereof, shall be punished by a fine of one hundred dollars.

C. Snowmobiles § 33-14-116. Other operating restrictions(1) No person shall operate a snowmobile in a careless or imprudent manner without due regard for width, grade, corners, curves, or traffic of trails, the requirements of § 33-14-110(3), and all other attendant circumstances. (2) No person shall operate a snowmobile in such a manner as to indicate either a wanton or a willful disregard for the safety of persons or property. (3) No person shall operate a snowmobile while under the influence of alcohol, a controlled substance, as defined in § 12-22-303(7), C.R.S., or any other drug, or any combination thereof, which renders him incapable of the safe operation of a snowmobile. (4) No owner shall permit such snowmobile, while under his control, to be operated in violation of the provisions of this article. (5) Any person who violates subsection (1) of this section is guilty of a class 2 petty offense and, upon conviction thereof, shall be punished by a fine of fifty dollars. (6) Any person who violates subsection (2) or (3) of this section is guilty of a misdemeanor and, upon conviction thereof, shall be punished by a fine of not less than one hundred dollars nor more than one thousand dollars, or by imprisonment in the county jail for not more than one year, or by both such fine and imprisonment.

D. River rafting/outfitters--prohibited operations--penalties C.R.S. § 33-32-107. (1) No river outfitter shall operate a river-outfitting business without a valid license as prescribed by § 33-32-104, and without insurance as provided in § 33-32-105(1)(b). Any river outfitter which violates the provisions of this subsection (1) commits a class 2 misdemeanor and shall be punished as provided in § 18-1-106, C.R.S. If the river outfitter is a corporation, violation of the provisions of this subsection (1) shall result in the officers of said corporation jointly and severally committing a class 2 misdemeanor, and said officers shall be punished as provided in § 18-1-106, C.R.S. (2) It is unlawful for any river outfitter, guide, trip leader, or guide instructor to: (a) Violate the safety equipment provisions of § 33-13-106. Any person who violates the provisions of this paragraph (a) is guilty of a misdemeanor and, upon conviction thereof, shall be punished by a fine of one hundred dollars; except that any person who fails to have one personal flotation device for each person on board as required by § 33-13-106(3)(a) commits a class 3 misdemeanor and, upon conviction thereof, shall be punished as provided in §18-1-106, C.R.S. (b) Operate a vessel in a careless or imprudent manner without due regard for river conditions or other attending circumstances, or in such a manner as to endanger any person, property, or wildlife. Any person who violates the provisions of this paragraph (b) is guilty of a class 3 misdemeanor and, upon conviction thereof, shall be punished as provided in §18-1-106, C.R.S.

E. Ski Safety Act of 1979, C.R.S. § 33-44-101, et seq. Provides for four “petty offenses.” These are skiing on a closed trail, leaving the scene of an accident, skiing while intoxicated and skiing off of a ski slope and onto closed and posted adjacent private lands. C.R.S. §33-44-109 (12). However, see People v. Hall, 999 P.2d 207 (Colo. 2000).

The civil litigator must now be very sensitive to the restitution requirement when representing a party injured in any of the activities embraced by the above statutes. How far to insinuate oneself into the restitution proceedings will require case-by-case consideration, with delicate judgments to be made in each.

PRAGMATIC CONSIDERATIONS
The first consideration may very well be the scope of the work for which the attorney is hired. For both plaintiff’s and defense counsel, clients should be informed whether representation as to the civil claims will also entail representation as to the restitution determination. If so, payment for this representation should be provided for in the fee agreement—for plaintiff’s counsel, what fee, if any, will the attorney earn upon collection of the restitution? If defense counsel in the civil matter is being provided under insurance coverage, will that attorney work with the defense counsel for the criminal charges? And, if so, who pays for that time?

Strategic considerations arise quickly as well. If there is insurance coverage available for the civil claims, will the insurer also stand for the restitution order? If bankruptcy appears to be a likely response to a civil judgment, is the plaintiff/victim better served with a non-dischargeable restitution order? Since H.B. 1169 specifically provides for set off of the restitution amount against damages awarded in the civil litigation, thoughtful apprisal of the two forums must be made to maximize recovery by the plaintiff/victim, and, conversely, minimize the exposure of the defendant.

The writers do not believe that the participation in a restitution hearing, or the assistance in the preparation of the District Attorney for a restitution hearing, constitutes a violation of the Rule 4.5. It shouldn't however be “overdone.” If it appears that the District Attorney intends to disregard the restitution provisions of H.B. 1169, then there is no role for the civil litigator in the criminal proceedings - stay out. Plaintiff’s counsel is wise to avoid making any statement as counsel on the record in the criminal proceeding, but, if unavoidable, never imply an impact by the criminal court on the civil action.

CIVIL LITIGATION CONUNDRUM
As any civil litigator knows, significant investment into developing a fair picture of the damages suffered by the plaintiff is critical for the success of the typical personal injury suit. Great amounts of both time and money are frequently spent on experts, depositions, and record compilation. The District Attorney arguing on behalf of the victim in the restitution matter will not have these resources available, nor will the criminal defense counsel have the opportunity to present contrary evidence. Neither side in the restitution proceeding will have the benefit afforded civil litigants by extensive discovery opportunities, and this scenario provides little comfort for the parties in the civil litigation. If the District Attorney is energetically applying H.B. 1169, then the pecuniary loss evidence and finding may be a collateral estoppel on the civil action for damages.

The waters muddied by this tension between the restitution proceedings and the civil litigation are not made clearer by the case law: Restitution is intended to make the victim whole. People v. King, 648 P.2d 173 (Colo. App. 1982); People v. Catron, 678 P.2d 1 (Colo. App. 1983); People v. Phillips, 732 P.2d 1226 (Colo. App. 1986); People v. Engel, 746 P.2d 60 (Colo. App. 1987). Restitution is not a substitute for a civil action to recover damages. People v. King, 648 P.2d 173 (Colo. App. 1982); People v. Catron, 678 P.2d 1 (Colo. App. 1983).

Mere pendency of civil suit between criminal and victim does not vitiate trial court's duty to order restitution. People v. Smith, 754 P.2d 1168 (Colo. 1988). A release from liability obtained in a civil settlement cannot limit a criminal court's authority to order restitution equivalent to actual pecuniary damages. A contrary conclusion would violate the plain language of this section and would frustrate the rehabilitative purposes of probation by permitting criminal defendants to avoid financial responsibility for their conduct. People v. Maxich, 971 P.2d 268 (Colo. App. 1998).

Two recent Court of Appeal cases are noteworthy for those pondering restitution questions. In People v. Rogers, No. 99CA1444, 2000 Colo. App. LEXIS 1783, it was held that the driver was not entitled to set aside or modify restitution under no-fault insurance where the restitution was ordered as part of a criminal proceeding. In People v. Wright, No. 99CA1119, 2000 Colo. App. LEXIS 1377; 2000 Colo. J. C.A.R. 4621, legal expenses incurred by a victim in attempting to recover his collateral were found to be properly awarded as restitution. However, once defendant had begun serving imposed sentence, increasing restitution violated double jeopardy and thus prohibited.

The Supreme Court of Colorado held that the application of amended restitution statute did not constitute an ex post facto violation because defendant was ordered to make full restitution from the beginning. Therefore, regardless of which statute applied, defendant had to pay same amount. People v. Woodward, No. 99SC568, 11 P.3d 1090; 2000 Colo. LEXIS 1239.

While civil litigators await further clarification on the juxtaposition between restitution and civil matters, caution is appropriate and a few simple acts mandatory: 

     1. Address representation of the client with respect to the restitution proceeding in the fee agreement;
     2. Do not fail to advise either the victim/plaintiff or the defendant or the defendant’s insurer of the implications of the new Restitution Statute;
     3. Do not fail to advise the defendant in the civil action that a civil settlement may not be a bar to further liability in restitution to either an insurer or the victim directly;
     4. Do not enter into a final settlement in the civil action which may foreclose additional rights under the Restitution Statute.

One can anticipate any number of circumstances which may result in litigation arising from application of the new restitution requirement. The criminal action may be a forum in which injured victims receive a “fairer” trial, or it could be a forum where an adverse “pecuniary loss” finding is made which could be used as res judicata, or collateral estoppel, against the plaintiff/victim in some later civil proceedings. How well H.B. 1169 will work to the benefit of the victim/plaintiff is far from certain as we approach the anniversary of its becoming law.

2001 Worldwide Copyright of Chalat & Koupal PC, Revised 8/1/01, LJC