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Demers v. State (02/08/2002) ap-1788

Demers v. State (02/08/2002) ap-1788

                              NOTICE
     The text of this opinion can be corrected before the
opinion is published in the Pacific Reporter.  Readers are
encouraged to bring typographical or other formal errors to the
attention of the Clerk of the Appellate Courts:  

              303 K Street, Anchorage, Alaska  99501
                       Fax:  (907) 264-0878
        E-mail:  corrections@appellate.courts.state.ak.us

          IN THE COURT OF APPEALS OF THE STATE OF ALASKA


JAMES G. DEMERS,              )
                              )   Court of Appeals No. A-7916
                  Appellant,  )    Trial Court No. 1JU-S00-844 CR
                              )       
                 v.           )                
                              )            O P I N I O N
STATE OF ALASKA,              )
                              )
                  Appellee.   )   [No. 1788   February 8, 2002]
                              )


          Appeal from the Superior Court, First Judicial
District, Juneau, Patricia A. Collins, Judge.

          Appearances:  James E. Curtain, Juneau, for
Appellant.  David Brower, Assistant District Attorney, and Bruce M.
Botelho, Attorney General, Juneau, for Appellee. 

          Before:  Coats, Chief Judge, and Mannheimer and
Stewart, Judges. 

          STEWART, Judge.
          MANNHEIMER, Judge, concurring.
          COATS, Chief Judge, dissenting.

          From 1994 until 1999, James G. Demers served as treasurer
of the Juneau-based Alaska Folk Festival, a non-profit organization. 
After Demers resigned his position, the new treasurer discovered
discrepancies in the Festival's business records.  More than 
$13,000 was unaccounted for in over forty transactions spanning more
than four years. After the police investigated, the State filed an
information charging Demers with one count each of second-degree
theft and falsifying business records. [Fn. 1] 
          Demers waived indictment by the grand jury and pleaded no
contest to the charges.  Superior Court Judge Patricia A. Collins
imposed 2 years with 18 months suspended on each count and ran the
sentences concurrently.  At sentencing, Judge Collins ordered Demers
to pay restitution of up to $24,000 (with credit for the $7,743.14
he paid before sentencing) as a condition of probation subject to
input from Demers after he had reviewed the Festival's records.   
     
          Ultimately, Judge Collins amended the judgment to provide
as a condition of probation that Demers pay restitution to the
Festival in the total sum of $16,283.17.  Included in this sum was
$5,400 for the Festival's "accounting costs."  In this appeal,
Demers challenges only the $5,400 awarded for accounting costs. 
Those costs included $400 paid to the Festival's accountants for
reviewing the Festival's books after the embezzlement was discovered
and $5,000 for 200 hours of volunteer work performed by two of the
Festival's board members who audited and reconstructed the
Festival's business records.  
          For the reasons expressed below, we affirm the award of
$400 as reimbursement to the Festival's accountants.  However, we
vacate the condition of probation that orders $5,000 restitution for
the volunteer time expended by the Board members. 
          Discussion
          Title 12 of the Alaska Statutes authorizes courts to award
restitution both as a component of the sentence and as a term of
probation.   Alaska Statute 12.55.045(a)(2) provides that when
contemplating an order of restitution, the court should consider the
"financial burden placed on the victim ... as a result of the
criminal conduct of the defendant."  The legislature intended that
courts should construe AS 12.55.045(a) broadly by ordering
restitution to all persons who were injured as a result of a
defendant's conduct. [Fn. 2]  Alaska Statute 12.55.100(a)(2)
provides, in part, that a court may order a defendant to make
restitution or reparation to a victim "for actual damages or loss
caused by the crime" as a condition of probation.  
          Clearly, Demers injured the Festival, and the Festival
incurred a loss as a result of Demers's theft and falsification. 
Judge Collins considered the evidence that, in addition to the
stolen funds, the Festival incurred other expenses.  For example,
the State presented evidence that the Festival incurred a $400
expense for accounting services.  This evidence supports the court's
probation condition ordering restitution of $400 for the accounting
services.  
          A Festival board member also testified that board members
volunteered 200 hours of work auditing and reconstructing Festival
records.  The member valued the volunteer effort at $25 per hour for
purposes of seeking restitution. 
          Judge Collins ordered $5,000 of restitution for accounting
services based on the testimony regarding the volunteer efforts of
Festival board members.  She reasoned that restitution was
appropriate because, if she did not order the restitution, Demers
would benefit since the Festival "is too poor to afford the costs
of a more expensive, but necessary, audit."  Judge Collins
recognized this was a close issue but reasoned that this amount of
restitution was appropriate because a commercial enterprise would
have incurred a monetary cost that, in this case, was met by
volunteer efforts. 
          But the Festival did not expend any money nor receive an
invoice for this volunteer effort.  Although the Festival was
injured as a result of Demers's crimes, it did not incur any
monetary damage or loss when the Festival's board members
volunteered their time and effort to audit and reconstruct the
Festival's business records.  
          Obviously, the legislature intended to provide the courts
with the authority to order defendants to compensate their victims. 
But AS 12.55.100(a)(2) grants a sentencing court the power to impose
restitution as a probation condition when a victim suffers "actual
damages or loss."  
          We conclude that the legislature did not provide a
sentencing court with the power to order restitution to a victim who
was injured but who did not sustain actual damages or loss because
the injury was cured by volunteer efforts.  Accordingly, we vacate
that portion of the court's probation conditions which ordered
$5,000 restitution for the volunteer work performed by the board
members. 
          Conclusion
          The judgment of the superior court is AFFIRMED in part and
VACATED in part.  

MANNHEIMER, Judge, concurring. 

          Demers embezzled money from the Alaska Folk Festival and,
as part of his sentence, he was ordered to pay restitution to the
Folk Festival for the money he stole.  The question in this case is
whether the sentencing court was authorized to order Demers to pay
an additional $5000 in restitution to the Folk Festival for the
value of labor donated by two of its board members who volunteered
their time to reconstruct the Folk Festival's financial records,
thus allowing the Folk Festival to ascertain the amount of Demers's
embezzlement. 
          A court's sentencing powers are defined by the
legislature. [Fn. 1]  The statutes at issue in this case are AS
12.55.045(a) (which authorizes a court to order restitution as a
direct component of a sentence) and AS 12.55.100(a)(2) (which
authorizes a court to order restitution as a condition of
probation). [Fn. 2]  The question is whether the Alaska Legislature
intended these statutes to authorize a sentencing court to order a
defendant to reimburse a victim for the value of unpaid labor
volunteered by other people who wish to assist the victim in coping
with the crime.
          The aim of restitution is to restore victims to their
financial condition before the crime.  The problem in the present
case is that the superior court has ordered "restitution" that makes
the Folk Festival $5000 richer than it was before.  Demers has been
ordered (1) to repay the money he stole and (2) to pay $5000 for the
labor donated by the two board members   labor that the Folk
Festival did not have to pay for.  Thus, if Demers satisfies both
parts of the superior court's restitution order, the Folk Festival
will end up with $5000 more than it possessed before Demers
committed his theft. 
          If the Folk Festival had been insured against
embezzlement, and if the insurance company had paid for an audit,
no sentencing judge would order the defendant to "reimburse" the Folk
Festival for the money spent by the insurance company.  Similarly,
if the insurance company had sent its own employees to reconstruct
the Folk Festival's records to ascertain the amount of the theft,
no sentencing judge would order the defendant to "reimburse" the Folk
Festival for the labor performed by the insurance company's
employees.  The Folk Festival did not pay for this labor; it merely
received the benefit of this labor.  Ordering the defendant to pay
"restitution" to the Folk Festival for the hours of work performed
by the insurance company employees would result in the unjust
enrichment of the Folk Festival. 
          The facts of the present case offer another example of the
same situation.  Two Folk Festival board members reconstructed the
Folk Festival's records.  The two board members were not employees
of the Folk Festival, and they did not charge the Folk Festival  for
their time.  The Folk Festival received the benefit of their labor
but incurred no expense.  Under these circumstances, the Folk
Festival received a windfall when the superior court ordered Demers
to "reimburse" the Folk Festival for the hours of labor donated by
the two board members.  
          If anyone deserves to be compensated for the board
members' labor, it is the board members themselves.  Arguably, the
superior court might simply amend its judgement and name the two
board members as the recipients of the restitution.  But I conclude
that the legislature has not authorized sentencing courts to impose
this type of restitution. 
          AS 12.55.045(a) declares that a sentencing court may order
a defendant to pay restitution to three categories of people:  (1)
"to the victim", (2) to "[any] other person injured by the offense",
and (3) "to a public, private, or private nonprofit organization that
has provided or ... will be providing counseling, medical, or
shelter services to the victim or [any] other person injured by the
offense".  The Folk Festival board members are not themselves the
victims of Demers's embezzlement, nor are they "a public, private,
or private nonprofit organization that has provided or ... will be
providing counseling, medical, or shelter services to the victim or
[any] other person injured by the offense".  So if the board members
are to be deemed proper recipients of restitution, they must qualify
as "other person[s] injured by the offense".
          The only sense in which the two board members were
"injured" by Demers's crime is that they felt duty-bound to conserve
the limited financial resources of the Folk Festival by devoting
their own time and energy to the reconstruction of the Folk
Festival's financial records.  And, indeed, this is the "injury" that
the sentencing judge ordered Demers to reimburse.  But I conclude
that the legislature did not intend the phrase "injured by the
offense" to be interpreted in so broad a fashion. 
          AS 12.55.045(a) must be interpreted in light of its
companion provision, AS 12.55.100(a)(2), the statute which
authorizes a sentencing court to impose restitution as a condition
of probation.  AS 12.55.100(a)(2) declares that a sentencing court
can order a probationer to "make restitution or reparation to
aggrieved parties for actual damages or loss caused by the
[probationer's] crime".  Because AS 12.55.045(a) and AS 12.55.100(a)
appear to be designed to give sentencing courts two different
methods of achieving the same goal, they should be construed in pari
materia.  That is, we should presume that the legislature intended
the phrase "person[s] injured by the offense" to mean the same thing
as the phrase "aggrieved parties [who have suffered] actual damages
or loss".  
          One could argue that volunteers who come to the aid of a
victim, and who thereby spare the victim identifiable and measurable
financial expense, should be compensated for their time and trouble. 
Indeed, if I were writing on a clean slate, free to adopt whatever
rule I thought best, there is much to commend the position taken by
Judge Collins (the sentencing judge) and by my dissenting colleague,
Judge Coats.  But I conclude that such an interpretation of AS
12.55.045(a) and AS 12.55.100(a) would expand restitution beyond the
scope envisioned by the legislature.  It would seemingly authorize
a sentencing judge to order a defendant to pay restitution at an
hourly rate to relatives, friends, and neighbors of a crime victim
who spend time consoling the victim, or who help clean up the
victim's house after a burglary or an assault, or who do the
shopping or cooking for a victim who is too distraught to attend to
these tasks.  
          Based on the wording of AS 12.55.045(a) and AS
12.55.100(a), I conclude that our legislature did not intend to
authorize a sentencing court to order a defendant to reimburse
people who volunteer their labor to alleviate or mitigate the
effects of the defendant's crime.  Accordingly, I join Judge Stewart
in reversing the award of $5000 restitution for the labor of the two
Folk Festival board members.  

COATS, Chief Judge, dissenting.

          In a detailed order, Judge Collins made several factual
findings to support her restitution award, and Demers does not
contest these findings.  Judge Collins found that the $5,000
restitution award was to reimburse the Folk Festival for the efforts
of two of its board members to audit and reconstruct the financial
records.  The audit was required to reconstruct the books after
Demers's theft.  The audit would have been unnecessary but for the
theft.  Had the Folk Festival hired accountants to audit the books
and reconstruct the records, it would have been far more expensive
for the board.  By conducting the audit with volunteers, the Folk
Festival saved itself (and Demers if he pays the restitution award)
a substantial amount of money.  Judge Collins reasoned that if the
Folk Festival could recover restitution for money it paid to
accountants to conduct an audit, it was reasonable to allow it to
recover for the value of the time spent by the volunteers.  Judge
Collins's reasoning appears to me to be sound.  
          Alaska Statute 12.55.045 and AS 12.55.100 authorize a
sentencing court to make restitution awards, either as part of the
defendant's sentence or as a condition of probation.  The Alaska
legislature clearly intended courts to construe AS 12.55.045 and AS
12.55.100 broadly to allow courts to order restitution to all
persons injured by the defendant's conduct. [Fn. 1]  Alaska Statute
12.55.045 directs a sentencing court that orders restitution to take
into account the "public policy that favors requiring criminals to
compensate for damages and injury to their victims." [Fn. 2] One of
the purposes of AS 12.55.045(a) is "to make full restitution
available to all persons who have been injured as a result of
criminal behavior, to the greatest extent possible." [Fn. 3]   This
expressed legislative intent seems to me to support the conclusion
that the legislature favors restitution awards as part of criminal
sentences.  
          Judge Collins's restitution award in this case appears to
me to be consistent with this legislative policy.  The Folk Festival
was clearly injured by Demers's thefts.  But for the volunteer
efforts of the board of directors, the cost of reconstructing the
financial records of  the Folk Festival would have been much
greater.  To say that a victim can recover restitution only when he
hires someone else to undo the damage caused by a criminal act
appears to violate the policy set by the legislature.  Moreover, as
a separate policy consideration, if we only allow a victim to
recover restitution if he hires a third party to undo the damage,
we actually encourage victims to increase the amount of their actual
loss. 
          On the other hand, if the victim of a crime, rather than
hiring someone else, spends his own time and effort to fix damages
caused by a criminal act and can clearly establish the value of his
efforts, I see no reason to preclude a court from awarding
restitution.   Such a rule seems to me to be consistent with the
legislative policy of these statutes and the past interpretations
by this court.  Accordingly, I would uphold the restitution award. 
I therefore dissent.


                            FOOTNOTES


Footnote 1:

     AS 11.46.130(a)(1) & AS 11.46.630, respectively.


Footnote 2:

      In the Alaska Session Laws, Ch. 71, SLA 1992, the legislature
announced the purpose of AS 12.55.045(a):

     Section 1. PURPOSE.  It is the purpose of this Act ... to
make full restitution available to all persons who have been injured
as a result of criminal behavior, to the greatest extent possible,
by

                              . . .


          (3) allowing courts to order that restitution
be made to all persons who have suffered a loss as a result of a
defendant's conduct[.] 




                     FOOTNOTES (Concurrence)


Footnote 1:

     See R.I. v. State, 894 P.2d 683, 685 (Alaska App. 1995). 


Footnote 2:

     Shortly after Demers committed his crime, the legislature
amended AS 12.55.045 so that any duty of restitution imposed as a
direct component of the defendant's sentence automatically becomes
a condition of the defendant's probation.  See AS 12.55.045(i),
enacted in SLA 2000, ch. 103, sec. 4. 


                      FOOTNOTES   (Dissent)


Footnote 1:

          See Lonis v. State, 998 P.2d 441, 447 (Alaska App. 2000).


Footnote 2:

     AS 12.55.045(a)(1).


Footnote 3:

          Ch. 71, sec. 1, SLA 1992 (emphasis added).