Opinion
H044393
06-17-2021
THE PEOPLE, Plaintiff and Respondent, v. ROBERT ALLEN BELSTLER, Defendant and Appellant.
NOT TO BE PUBLISHED
Santa Clara County Super. Ct. No. C1484598
Grover, J.
Defendant was convicted of embezzling his employer, placed on probation, and ordered to pay more than $28,000 in restitution. He challenges the restitution order, arguing the victim's estimated revenue loss was based on unreliable evidence, the victim's time spent determining the extent of the embezzlement was not a recoverable economic loss, and the time spent calculating the loss using a methodology rejected by the trial court was not recoverable. For the reasons stated here, we will affirm the order.
I. BACKGROUND
Defendant's mother sold a bakery supply store in January 2013, and the new owners retained defendant as an employee. Defendant knew the business well, and his duties included handling customer sales at the cash register. The new owners eventually became suspicious of defendant because they were reordering merchandise at a rate that did not match their recorded retail sales.
In May 2014, the owners discovered nine sales receipts at defendant's workstation dated May 23 and totaling $168.80. A receipt is handwritten for each customer transaction, the store retains a copy of the receipt on a wooden dowel by the register, and receipts are reconciled with sales revenue on a daily basis. The May 23 receipts and corresponding cash were not accounted for in that day's reconciliation, and the owners realized defendant had stolen the money. One of the owners found heroin and an additional 63 receipts dating back to January 2014 in defendant's backpack, and defendant admitted stealing money from the business throughout his employment. The owner placed defendant under a citizen's arrest and contacted police. Defendant told responding officers he had stolen money from the business to support a heroin habit. When a cash sale was made, he would place the receipt in the register along with the cash, and remove both when no one was looking.
Defendant was charged after a preliminary hearing with grand theft by an employee exceeding $950 (Pen. Code, §§ 484-487, subd. (b)(3); count 1) and with heroin possession (Health & Saf. Code, § 11350, subd. (a); count 2, a misdemeanor). Defendant pleaded no contest to both counts. The court reduced count 1 to a misdemeanor, suspended imposition of sentence, placed defendant on three years' formal probation, and ordered victim restitution. The victim testified at a restitution hearing, and the court ordered defendant to pay restitution in the amount of $28,152.76, for embezzled revenue between January 2013 and May 2014 ($24,959), the victim's time spent undertaking a business accounting to determine the amount of loss ($3,090), and to rekey the locks to the store ($103.88).
The victim provided two methods to calculate the amount of stolen revenue. He estimated the revenue loss at $31,228 by multiplying $168 (the total of the May 23 cash receipts) by the estimated number of days defendant worked over the 17-month period. Alternatively, he extrapolated a $24,959 loss using inventory records. The trial court declined to adopt the single-day snapshot approach because $168 did not necessarily represent an average daily loss. It adopted the inventory-based approach, which it found reasonable and logical.
II. DISCUSSION
Penal Code section 1203.1 authorizes the trial court to order restitution as a condition of probation “in proper cases” and “in accordance with Section 1202.4.” (Id., subd. (a)(3); undesignated statutory references are to the Penal Code.) “[I]n every case in which a victim has suffered economic loss as a result of the defendant's conduct, the court shall require that the defendant make restitution to the victim … based on the amount of loss claimed by the victim or victims or any other showing to the court.” (§ 1202.4, subd. (f).) While there is no requirement that the restitution award “be limited to the exact amount of the loss in which the defendant is actually found culpable, ” the amount of restitution must be factually supported and rational. (People v. Carbajal (1995) 10 Cal.4th 1114, 1121, 1125.) A defendant is entitled to notice and the opportunity to controvert the basis for restitution. (Ibid.)
A trial court has broad discretion to choose a method for calculating the amount of restitution, and we review a restitution order for abuse of discretion. (People v. Giordano (2007) 42 Cal.4th 644, 663-664 (Giordano).) A restitution order resting on a demonstrable error of law constitutes an abuse of discretion. (People v. Brunette (2011) 194 Cal.App.4th 268, 276.) We examine “ ‘whether the ruling in question “falls outside the bounds of reason” under the applicable law and the relevant facts.' ” (Giordano, at p. 663.) Any factual findings and related inferences are reviewed for substantial evidence. (People v. Baker (2005) 126 Cal.App.4th 463.)
A. Embezzled Revenue
Citing Giordano, defendant argues the trial court abused its discretion adopting the victim's estimated revenue loss because the handwritten sales receipts admitted in evidence contained “pervasive” errors, demonstrating that the trial court failed to analyze the evidence and rendering the loss calculation unreliable. Defendant complains that of the 71 handwritten receipts found in his possession and admitted in evidence, three show credit card as the form of payment, three show no form of payment, and the form of payment is unknown on nine other receipts which were only partly photocopied as exhibits. In defendant's view, those receipts do not establish corresponding cash transactions. He also contends that “[a]lmost no evidence was introduced concerning the figures in the bookkeeping records.”
Two of the nine receipts are duplicates.
We reject defendant's arguments. The Supreme Court in Giordano directed trial courts to facilitate appellate review by “tak[ing] care to make a record of the restitution hearing, analyze the evidence presented, and make a clear statement of the calculation method used and how that method justifies the amount ordered.” (Giordano, supra, 42 Cal.4th at p. 664.) Nothing in the record demonstrates a failure on the trial court's part to analyze the evidence or employ a rational method to determine the victim's loss. (See id. at pp. 663-664.) The records admitted in evidence, together with the owner's testimony and written report, support a rational inventory-based loss calculation.
The bookkeeping records detail the store's monthly receipts and expenditures. There is no requirement that those records be corroborated. (See People v. Gemelli (2008) 161 Cal.App.4th 1539, 1544-1545 [victim's itemized loss statement established economic loss without underlying documentation].) The owner explained those records were used to estimate the store's actual sales revenue. The revenue loss was then calculated by subtracting the known sales revenue from the projected revenue extrapolated from inventory records. The owner explained that half of their products were marked up 100 percent and half were marked up 200 percent. The expected sales revenue was estimated by taking the wholesale cost of the products sold and multiplying by 150 percent. Damaged and returned inventory were accounted for as losses, and thus not factored into the inventory-based revenue projection.
The owner testified at the preliminary hearing that he reconciled the store's receipts on a daily basis with the cash, checks, and credit card transactions in the register. Thus, the form of payment shown on the receipts in defendant's possession (receipts withheld from the owner) does not affect their validity. Indeed, the owner's investigation revealed that defendant was also stealing cash by withholding credit card transactions. According to the owner's loss report admitted in evidence, “Belstler also had four-printed credit card totals. … These printed receipt totals are automatically printed out from the credit card machine at the end of the day showing the details of credit card transactions for that day. These were also in his backpack and he has no authorization to handle these. The one dated May 23rd had ‘337 cash' written in the top in his own handwriting. The one dated May 22nd had ‘101 lifted' also in his own handwriting.”
B. Time Spent by Owner to Determine Revenue Loss
The trial court ordered defendant to pay $3,090 in restitution for 103 hours the owner spent reviewing the business's financial records and preparing a loss report documenting the extent of defendant's embezzlement. Relying on People v. Friscia (1993) 18 Cal.App.4th 834 (Friscia) and section 1203.1, defendant argues the trial court committed legal error because the owner's time reviewing records and preparing the loss report did not result in an economic loss to the business.
In Friscia, the appellate court reversed a restitution order compensating business owners for over 200 hours spent preparing an accounting in order for the authorities to accept an embezzlement case for prosecution. (Friscia, supra, 18 Cal.App.4th at p. 836.) Former section 1203.04 applied in Friscia. (Friscia, at p. 837.) Under subdivision (d) of that section, restitution was authorized for “wages or profits lost due to … time spent as a witness in assisting the police or prosecution.” Because there was no evidence that the victims lost wages or profits preparing their accounting (they continued to take a monthly draw based on the business's monthly receipts), their investigative costs were not recoverable. (Friscia, at p. 838.) The appellate court recognized that “the expenditure of one's time is no small matter, ” but “the Legislature has failed to provide for compensation for such by way of a restitution order as a condition of probation.” (Id. at p. 838.) Nor was the victims' time compensable under section 1203.1, which authorizes the trial court to order restitution as a condition of probation “in proper cases” and “in accordance with section 1202.4.” (Id., subd. (a)(3).) As a general restitution provision, section 1203.1 did not give the trial court the authority to expand the specific restitution provisions in former section 1203.04. (Friscia, at p. 839.)
Friscia is distinguishable because the trial court's authority to award restitution in that case was controlled by former section 1203.4, which was repealed in 1995. (Stats. 1995, ch. 313 (A.B. 817), § 8, eff. Aug. 3, 1995.) The repealed statute limited restitution to “payment for the value of stolen or damaged property, medical expenses, and wages or profits lost due to injury or to time spent as a witness or in assisting the police or prosecution[.]” (Former § 1203.4, subd. (d).) People v. Fritchey (1992) 2 Cal.App.4th 829 is likewise inapposite, as it too was controlled by repealed section 1203.4. (Fritchey, at p. 841.)
The Legislature replaced subdivision (d) of former section 1203.4 with section 1202.4, subdivision (f)(3), which provides for restitution for “economic loss incurred as the result of the defendant's criminal conduct, including but not limited to” several enumerated categories of loss, including a victim's lost wages or profits “due to time spent as a witness or in assisting the police or prosecution.” (§ 1202.4, subd. (f)(3)(A)-(L), italics added.) Section 1202.4 has been liberally construed. In affirming a restitution order reimbursing a school for the cost of salaried employees to repair property damage, the court in In re Johnny M. (2002) 100 Cal.App.4th 1128 (Johnny M.) stressed that “ ‘[a] victim's restitution right is to be broadly and liberally construed,' ” and “[t]he term ‘economic losses' is [] entitled to an expansive interpretation.” (Id. at pp. 1132-1133.) The Johnny M. court held that the school suffered an economic loss to the extent it was deprived of the work product its employees would have generated had they not been obliged to clean up the damage attributable to the minor's criminal conduct. (Id. at p. 1134.) Friscia was distinguished in Johnny M. because Friscia was governed by repealed section 1203.4, which had expressly defined the term restitution (Johnny M., at p. 1135), and the use of the phrase “including, but not limited to” in new section 1202.4 (as well as the word “including” in Welfare and Institutions Code section 730.6) evinced the Legislature's intent to broaden the restitution available to crime victims. (Johnny M., at p. 1136, fn. 7.)
Defendant argues the restitution here is unlike that in Johnny M. because the owner's investigative time did not result in lost work product. Even if that were true, it does not follow that the owner would not suffer an economic loss by personally undertaking the forensic investigation instead of paying a professional to perform the same task. Indeed, the Johnny M. court explained that it would be unfair to require victims to incur out-of-pocket expenses to support a restitution award “given that the likelihood of actually receiving reimbursement from a criminal defendant via a restitution order is problematic at best.” (Johnny M., supra, 100 Cal.App.4th at p. 1134.) As that court noted, such a rule is not compelled by statute and would serve no public policy. (Ibid.)
Respondent cites Gemelli where the appellate court upheld a restitution order reimbursing a restaurant owner for repairs made following a burglary. The defendant disputed labor charges for the repairs because the restaurant owner did not include receipts with the itemized statement of loss, and because he typically handled his own repairs without hiring a contractor. (Gemelli, supra, 161 Cal.App.4th at pp. 1544-1545.) The appellate court found the defendant failed to present any credible evidence to rebut the itemized loss statement, and “[e]ven if the owner did all of the repairs himself rather than hire someone else to do them, his time had value.” (Id. at p. 1544.)
We agree that a crime victim's time has value, and we reject defendant's argument that a victim's time spent making itself whole does not constitute an economic loss as a matter of law. Section 1202.4, liberally construed, allows for a business owner to recover for the time spent undertaking a loss investigation regardless of whether the investigation is handled by an outside contractor or internally, and regardless of whether the owner elects to charge the business for his or her time.
We reject defendant's additional argument that the trial court abused its discretion awarding restitution for the owner's time spent calculating loss using the method rejected by the trial court. The owner testified that he did not use an inventory tracking software program and he manually reconciled receipts on a daily basis. His loss investigation consisted of 103 hours reviewing the store's bookkeeping records and more than 11, 000 handwritten receipts. He reviewed documented gross sales, restocking expenditures, and existing inventory, and he prepared a loss report using alternative methods to calculate the loss. He valued his time at $30 per hour after consulting with a CPA who would have charged $300 per hour, an accountant who would have charged $150 per hour, and a third person who would have charged $60 per hour. The investigation as a whole was reasonable, including presenting two alternative methods for calculating the business's loss. And the investigation was focused entirely on recoverable economic loss. (Compare People v. Fulton (2003) 109 Cal.App.4th 876, 884-885 [attorney's fees attributable to noneconomic loss such as pain and suffering are not recoverable as restitution under section 1202.4, subd. (f)(3)].)
III. DISPOSITION
The restitution order is affirmed.
WE CONCUR: Elia, Acting P. J., Danner, J.