State of WV v. Lucas

IN THE SUPREME COURT OF APPEALS OF WEST VIRGINIA
September 1997 Term
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No. 23903
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STATE OF WEST VIRGINIA,
Plaintiff below, Appellee,

v.

GARY MICHAEL LUCAS,
Defendant below, Appellant.

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Appeal from the Circuit Court of Mercer County
Hon. John R. Frazier, Judge
Case No. 95-FE-0063-F

AFFIRMED
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Submitted: September 17, 1997
Filed: November 20, 1997

William C. Meyer, II, Esq.                Darrell V. McGraw, Jr., Esq.
Public Defender Services                Attorney General
Princeton, West Virginia                Molly M. McGinley, Esq.
Attorney for Appellant                Assistant Attorney General
                            Attorneys for Appellee

JUSTICE STARCHER delivered the Opinion of the Court.

SYLLABUS BY THE COURT

        1.     The Supreme Court of Appeals reviews sentencing orders, including orders of restitution made in connection with a defendant's sentencing, under a deferential abuse of discretion standard, unless the order violates statutory or constitutional commands.         2.     Read in pari materia, the provisions of W.Va. Code, 61-11A-1 [1984], W.Va. Code, 61-11A-4(a) [1984], W.Va. Code, 61-11A-4(d) [1984], W.Va. Code, 61-11A- 5(a) [1984] and W.Va. Code, 61-11A-5(d) [1984], establish that at the time of a convicted criminal defendant's sentencing, a circuit court should ordinarily order the defendant to make full restitution to any victims of the crime who have suffered injuries, as defined and permitted by the statute, unless the court determines that ordering such full restitution is impractical.
        3.     Under W.Va. Code, 61-11A-1 through -8 and the principles established in our criminal sentencing jurisprudence, the circuit court's discretion in addressing the issue of restitution to crime victims at the time of a criminal defendant's sentencing is to be guided by a presumption in favor of an award of full restitution to victims, unless the circuit court determines by a preponderance of the evidence that full restitution is impractical, after consideration of all of the pertinent circumstances, including the losses of any victims, the financial circumstances of the defendant and the defendant's family, the rehabilitative consequences to the defendant and any victims, and such other factors as the court may consider.

         4.    For purposes of determining whether or what amount of restitution may be entered as a judgment against a defendant at the time of a criminal defendant's sentencing pursuant to W.Va. Code, 61-11A-4(a) [1984], the indigency of a defendant or the current ability or inability of a defendant to pay a given amount of restitution is not necessarily determinative or controlling as to the practicality of an award of restitution. If the court determines that there is a reasonable possibility that a defendant may be able to pay an amount of restitution, the court, upon consideration and weighing of all pertinent circumstances, is permitted but not required to determine that an award of restitution in such an amount is practical.
        5.     When a court is determining the practicality of an award of restitution, a finding that there is a reasonable possibility of a defendant's payment of a restitution award must not be based solely on chance; there must be some concrete evidence specific to a defendant showing that the defendant has assets, earning potential or other present or potential resources, or similar grounds upon which the court may conclude that there is a reasonable chance that the defendant may be able to pay the restitution amount in question.
        6.     When restitution is ordered at a criminal defendant's sentencing pursuant to the provisions of W.Va. Code, 61-11A-4(a) [1984], the circuit court is not required to spread its findings and conclusions on the record in every case in which full restitution is ordered. In cases where full restitution is ordered and where noncompliance with the restitution order will not in itself yield a potential penalty, the decision whether to

make findings and assign reasons is committed to the sound discretion of the court. If the record contains sufficient data for the Supreme Court of Appeals to review the basis of the circuit court's order, the court need not assign specific reasons for its decision to order full restitution. However, if the record is insufficient, if potential penalties will be triggered by the defendant's failure to pay the restitution which has been ordered, or if less than full restitution is ordered, the circuit court must make appropriate findings and conclusions regarding the matters which it has considered, including but not limited to the losses sustained by any victims, the financial resources and earning ability of the defendant and the defendant's dependents, and the tailoring of the amount of restitution which a defendant must pay to the defendant's means and circumstances.
        7.    To facilitate appellate review and maximize the likelihood of well- reasoned decision-making in all cases when restitution is ordered pursuant to W.Va. Code, 61-11A-1 et seq. and particularly when large sums are involved, a circuit court is well advised to exercise its discretion and make full findings and conclusions on the record regarding restitution, even when such findings are not required.
        8.     Where a criminal defendant intends to and does obtain money or other benefit from an insurance company by committing a criminal act of arson , the insurance company is a direct victim of the crime and is eligible for restitution under the provisions of W.Va. Code, 61-11A-4(a) [1984].

Starcher, J.:
        The appellant, Gary Michael Lucas, was convicted of arson in the Circuit Court of Mercer County for burning down his Bluewell, West Virginia IGA grocery store. At the appellant's sentencing, the circuit court entered a restitution judgment order against the appellant on behalf of Aetna Casualty Company for $1,430,000.00 in insurance proceeds that Aetna paid as a result of the fire.
        The appellant contends that the court's restitution order was improper because the appellant cannot repay such a large sum. The appellant also argues that Aetna is not a "victim" under our victim protection statute.
        Because the circuit court's entry of a restitution judgment order does not in itself mean that the appellant will be penalized if he is unable to repay the amount of restitution established in the order -- and because the insurance company was the victim in this case -- we affirm the circuit court's order.

I.
Facts and Background
        In the fall of 1992, the appellant, Gary Michael Lucas, bought an IGA grocery store in Bluewell, West Virginia from Mr. William Warden, who financed the purchase. In compliance with the purchase agreement, the appellant insured the grocery store with the Aetna Casualty Company ("Aetna"). The appellant had previously owned and operated

several grocery stores. His family had been in the grocery business for 40 years. The appellant said at trial that during 1993 he personally made about $120,000.00 from the Bluewell IGA business.
        On July 3, 1994, the appellant's grocery store was destroyed by fire. Aetna subsequently paid out $1,430,000.00 in fire insurance proceeds. Most of the proceeds were applied to discharge the appellant's debt to Mr. Warden and other debts related to the business. The appellant stated at his trial that his "net" from the fire insurance proceeds was about $200,000.00.
        On November 1, 1995, the appellant was convicted of first degree arson, a violation of W.Va. Code, 61-3-1 [1935]. See footnote 1 1 The prosecution's position at the appellant's sentencing was that the appellant, as part of his sentence, should be ordered to pay to Aetna as victim restitution the full amount of the financial injury which the appellant had caused to Aetna. An attorney for Aetna addressed the court at the sentencing hearing, verifying the amount paid by Aetna. The appellant told the court at his sentencing that he was indigent, and that his wife was working at the Huntington Mall.
         The circuit judge denied probation and sentenced the appellant to a two to 20 year term of incarceration, to run consecutively with a sentence that the appellant had received for violating federal drug laws. In sentencing the appellant, the circuit judge entered

judgment against the appellant and on behalf of Aetna in the amount of $1,430,000.00 in restitution. The judge also ordered the appellant to sign over to Aetna a $121,000.00 certificate of deposit in the appellant's name which federal authorities were holding.See footnote 2 2
        At the sentencing hearing, the circuit court engaged in a dialogue with the appellant's counsel about the propriety of the amount of the restitution judgment order, and about whether ordering the appellant to sign over the certificate of deposit would allow Aetna to have a "double recovery."See footnote 3 3

        In this dialogue, the court stated that if the appellant was indeed indigent, he could not be penalized for failure to pay the amount of restitution established in the judgment

order. The judge also stated that the appellant was free to make further motions challenging the amount of the restitution order and/or the requirement of signing over the certificate of deposit. No such motions appear in the record.
        The appellant appealed his conviction and his sentence, including the portion of the sentencing order entering judgment for Aetna for $1,430,000.00. We granted the petition for appeal, but only on the issue of the restitution ordered by the circuit court.
II.
Discussion
A.
Standard of Review

         The Victim Protection Act of 1984 ("the Act"), W.Va Code, 61-11A-1 through -8 codifies the principal statutory law of this state governing court-ordered restitution by a person convicted of a crime.See footnote 4 4 In the instant case, the circuit court entered a restitution judgment order against the appellant at the time of the appellant's sentencing. This action by the court is authorized by W.Va Code, 61-11A -4(a) [1984], which states that a circuit court,
        . . . when sentencing a defendant convicted of a felony or misdemeanor causing physical, psychological or economic injury or loss to a victim, shall order, in addition to or in lieu of

any other penalty authorized by law, that the defendant make restitution to any victim of the offense. . . .

        Thus a restitution order entered pursuant to this statutory provision is considered a component of sentencing.
        The Supreme Court of Appeals reviews sentencing orders, including orders of restitution made in connection with a defendant's sentencing, under a deferential abuse of discretion standard, unless the order violates statutory or constitutional commands. See State v. Head, 198 W.Va. 298, 301, 480 S.E.2d 507, 510 (1996).
B.
Was the Circuit Court's Restitution Order Improper?

        The appellant argues that the circuit court's entry of judgment against him in the total amount of Aetna's losses, $1,430,000.00, was improper. The appellant principally relies upon language from our cases requiring that the amount of restitution to be paid by an offender as a condition of probation or parole be reasonably tailored to an offender's ability to pay.
        We discuss these cases later in this opinion, but we begin our consideration of the appellant's argument with a review of pertinent language from several sections of the Act.
        W.Va. Code, 61-11A-1(b) [1984] states, in part:
         The legislature declares that the purposes of this article are to enhance and protect the necessary role of crime victims and witnesses in the criminal justice process and to ensure that the

state and local governments do all that is possible within the limits of available resources to assist victims and witnesses of crime without infringing on the constitutional rights of the defendant.

        W.Va. Code, 61-11A-4(a) [1984] states:

         The court, when sentencing a defendant convicted of a felony or misdemeanor causing physical, psychological or economic injury or loss to a victim, shall order, in addition to or in lieu of any other penalty authorized by law, that the defendant make restitution to any victim of the offense, unless the court finds restitution to be wholly or partially impractical as set forth in this article. If the court does not order restitution, or orders only partial restitution, under this section, the court shall state on the record the reasons therefor.

        W.Va. Code, 61-11A-4(d) [1984] states:

         The court shall impose an order of restitution to the extent that such order is as fair as possible to the victim and the imposition of such order will not unduly complicate or prolong the sentencing process.

        W.Va. Code, 61-11A-5(a) [1984] states:

         The court, in determining whether to order restitution under this article and in determining the amount of such restitution, shall consider the amount of the loss sustained by any victim as a result of the offense, the financial resources of the defendant, the financial needs and earning ability of the defendant and the defendant's dependents, and such other factors as the court deems appropriate.

        W.Va. Code, 61-11A-5(d) [1984] states:

         Any dispute as to the proper amount or type of restitution shall be resolved by the court by the preponderance of the evidence. The burden of demonstrating the amount of the loss sustained by

a victim as a result of the offense shall be on the prosecuting attorney. The burden of demonstrating the financial resources of the defendant and the financial needs of the defendant and such defendant's dependents shall be on the defendant. The burden of demonstrating such other matters as the court deems appropriate shall be upon the party designated by the court as justice requires.

         We will not burden the reader with an elaborate exegesis of the foregoing- quoted language from the Act, because (after analyzing one important phrase, which we do in a footnoteSee footnote 5 5 ) we believe that the cumulative meaning of this language, read in pari materia,

is clear. The above-quoted provisions of W.Va. Code, 61-11A-1 [1984], W.Va. Code, 61- 11A-4(a) [1984], W.Va. Code, 61-11A-4(d) [1984], W.Va. Code, 61-11A-5(a) [1984] and W.Va. Code, 61-11A-5(d) [1984], read in pari materia, establish that at the time of a convicted criminal defendant's sentencing, a circuit court should ordinarily order the defendant to make full restitution to any victims of the crime who have suffered injuries, as defined and permitted by the statute,See footnote 6 6 unless the court determines that ordering such full restitution is impractical.

`        The question then arises, what does "impractical" mean, in the context of a restitution order? To address this question, we will first look at the term "impractical" as it is more generally used. See footnote 7 7
         This Court has recognized that the word "impractical" does not necessarily mean the same thing as "impossible." See Dolin v. Roberts, 173 W.Va. 443, 445, 317 S.E.2d 802, 804 (1984): "[Requiring license suspensions within twenty-four hours of drunk driving arrests] . . . would not only be impractical, it would be virtually impossible . . . ." See also Stockert v. Council on World Service and Finance of Methodist Church, 189 W.Va. 1, 2, 427 S.E.2d 236, 237 (1993). "The doctrine of cy pres is an equitable device employed when the terms of a charitable trust become illegal, impossible, or impractical to fulfill . . ." (emphasis added) .

        Looking to other jurisdictions, in LaCourse v. City of St. Paul, 294 Minn. 338, 343, 200 N.W.2d 905, 909 (1972), the court said:
         The word "impractical" does not necessarily mean "impossible." Webster's Third New International Dictionary (1961) p. 1136, defines "impractical" as synonymous with "impracticable." "(I)ncapable of being put into use or effect or of being accomplished or done successfully or without extreme trouble, hardship, or expense."

        Another court has similarly distinguished "impractical" from "impossible" or "infeasible," stating that the fact that use of a safety device is feasible or possible does necessarily mean that the method is practical -- and that practicality is "not theoretical or ideal . . . [but] implies proven success in meeting the actual demands made by actual living or use." Century Steel Erectors, Inc. v. Dole, 888 F.2d 1399, 1405 (D.C.Cir. 1989).
        Thus, whether a proposal is practical or impractical is not a simple yes-or-no factual determination of whether the proposal is technically feasible or within the theoretical realm of possibility. Rather, determining whether a proposal is practical or impractical involves considering and weighing probabilities, costs and benefits. If the costs substantially outweigh the benefits when considered in light of the probabilities , a proposal may be deemed to be impractical, even if it is technically or theoretically possible or feasible.
         What then are the factors that a court must and may consider in assessing the probabilities, costs and benefits -- and thus the practicality -- of an award of full restitution?

        Again we turn first to the applicable statutory language. W.Va. Code, 61-11A- 5(a) [1992] requires that:
         The court, in determining whether to order restitution under this article and in determining the amount of such restitution, shall consider the amount of the loss sustained by any victim as a result of the offense, the financial resources of the defendant, the financial needs and earning ability of the defendant and the defendant's dependents, and such other factors as the court deems appropriate.

        Thus, the statute calls for consideration of (1) the victim's losses, (2) the defendant's financial circumstances, and (3) such other factors as the court may choose to consider.
        The Act also states that the court should endeavor to be fair to the victim and at the same time not unduly complicate or prolong the sentencing. W.Va. Code, 61-11A-4(d) [1984]. Whether property may be returned to a victim or whether a monetary payment in lieu of return is necessary may also be a consideration. W.Va. Code, 61-11A-4 (b)(1)(B) [1984]. The court may also consider the alternatives of rendering services in lieu of payment, or making payment to a designated person or organization, if restitution payment to a victim is impractical. W.Va. Code, 61-11A-4(b)(4) [1984] . See note 5, supra.
         We will primarily address the consideration to be given by the court to the factor of a defendant's circumstances in making a restitution determination -- because the issue in the instant appeal is the appellant's contention that the circuit court ordered

restitution against him without giving proper consideration to the appellant's financial circumstances.
        A number of our cases have discussed what consideration a court should give to a criminal defendant's financial circumstances when considering victim restitution.
        In Fox v. State, 176 W.Va. 677, 682, 347 S.E.2d 197, 202 (1986), this Court stated:
        [I]t is generally held that even in the absence of statute, the sentencing court may not order restitution without first inquiring into and determining on the record the offender's ability to pay.

        We stated in Fox that a probationer's restitution payment is unreasonable "if it is beyond the offender's ability to pay without undue hardship to himself or his family." Syllabus Point 1, in part, Fox, supra. Payment causing undue hardship occurs when "after the deduction of the [payment] from a person's wages enough money [does not] remain to meet ordinary and necessary expenses with something left over for unforeseen expenses and some discretionary spending." Cottrell v. Public Finance Corporation, 163 W.Va. 310, 316, 256 S.E.2d 575, 580 (1979). To avoid undue hardship, the payment required must not be so much as to "make it impossible for the debtor to provide for the family." Id.
        In another case, we stated that:
        A probation condition requiring repayment of costs and attorneys fees is constitutionally acceptable if it is tuned to the probationer's ability to pay without undue hardship and is subject to modification if his indigency persists or reoccurs . . . Probation may not be revoked for failure to pay restitution, costs

and attorneys fees unless the probationer's failure is contumacious . . . A trial court seeking to revoke probation for failure to pay assessed costs or restitution must make findings of fact that indicate defendant's ability to pay, weighing available assets, i