BRIEFS FOR APPELLANT: Jason A. Hart Frankfort, Kentucky BRIEF FOR APPELLEE: Jack Conway Attorney General of Kentucky Thomas A. Van De Rostyne Assistant Attorney General Frankfort, Kentucky
NOT TO BE PUBLISHED APPEAL FROM KENTON CIRCUIT COURT
HONORABLE PATRICIA SUMME, JUDGE
ACTION NO. 12-CR-00710
AFFIRMING IN PART, REVERSING IN PART
BEFORE: ACREE, CHIEF JUDGE; JONES AND MAZE, JUDGES. JONES, JUDGE: This appeal arises out of an order from the Kenton Circuit Court directing Appellant, Adam Killion, to pay restitution following his guilty plea. Killion requests us to reverse the trial court's order because it included restitution for crimes that are outside the scope of his plea agreement. For the reasons more fully explained below, we AFFIRM in part, REVERSE in part, and REMAND to the circuit court for further action consistent with this opinion.
As detailed below, the Commonwealth agrees with Killion that we should reverse a portion of the restitution order and remand this matter to the circuit court for additional findings of fact.
The parties substantially agree on the central facts. On July 6, 2012, Marilyn Tomes reported to police that her jewelry box, which contained several pieces of jewelry, was missing from her home. She suspected that someone broke into her home and stole the jewelry box. On July 7, 2012, the police located and recovered most of the items contained in the missing jewelry box from a local pawn shop. The pawn shop identified Killion as the person who pawned Tomes's missing jewelry.
Killion was subsequently arrested. On December 12, 2012, Killion pleaded guilty to receiving stolen property worth over $500.00 in violation of KRS 514.110. In relevant part, that statute provides that: "a person is guilty of receiving stolen property when he receives, retains, or disposes of moveable property of another knowing that it has been stolen or having reason to believe that it has been stolen, unless the property is received, retained, or disposed of with the intent to restore it to the owner." As part of his plea agreement, Killion agreed to pay "all appropriate restitution."
Kentucky Revised Statutes.
During Killion's sentencing hearing, the Commonwealth indicated that it would be seeking restitution for a diamond ring and other items. The diamond ring was among the items Tomes identified as missing from her jewelry box on July 6, 2012. However, the parties agree that the diamond ring was not among the items located at the pawn shop. This created some confusion regarding whether the ring was included as part of the plea agreement.
Due to this confusion, the circuit court ordered a restitution hearing for February 11, 2013. During this hearing, Tomes testified that she reported the diamond ring missing on July 6, 2012. Tomes testified that she was not a jewelry expert, and therefore, was not aware of the ring's exact value; however, she guessed that the ring was worth somewhere between $8,000.00 and $10,000.00.
Tomes testified that the ring had been passed down from her great-aunt to her mother and then to her. She described it as being a perfect one carat diamond, set in platinum with birds and tree branches etched into the sides.
Tomes further testified that her house was broken into again on July 9, 2012, three days after she reported the first incident. Tomes testified that following this second break-in, she discovered multiple, additional pieces of jewelry missing, including several amethysts, antiques, and other pieces of sentimental value. Tomes was again unable to provide an exact value for these additional items, but she testified that she specifically recalled purchasing one of the amethyst rings for approximately $600.00. To date, none of the items from the second break-in have been recovered. At the time of the plea agreement, Killion had not been charged with having been involved in or receiving stolen property as related to the second break-in.
At the conclusion of the restitution hearing, the court set the matter for further review so that it could determine the missing jewelry's value. At the final sentencing on February 18, 2013, the court set a restitution amount and indicated that Killion could appeal the amount, if he so desired. The court's order provides:
The Court received information at the restitution hearing held on February 11, 2013. The victim described one ring that was valued at $600.00, a perfect stone diamond ring set in platinum of some age, and multiple other items of jewelry. The court determines the value at $6,500.00. This amount shall be paid at the rate of $100.00 per month until paid in full.
It is from this order that Killion appeals.
II. STANDARD OF REVIEW
If restitution is ordered in a criminal matter, the test on appeal is abuse of discretion. Fields v. Commonwealth, 123 S.W.3d 914, 917 (Ky. App. 2003). An abuse of discretion occurs when the trial court's decision is arbitrary, unreasonable, unfair, or unsupported by sound legal principles. Commonwealth v. English, 993 S.W.2d 941, 945 (Ky. 1999).
A. Scope of Restitution: Uncharged Crimes
Killion first asserts that the trial court erred in ordering any restitution because he pleaded guilty only to receiving the stolen property that was recovered from the pawn shop and returned to Tomes. He explains that since he did not plead guilty to actually stealing all the jewelry missing from Tomes's home, he should not be responsible for paying restitution for items that were taken from Tomes, but not recovered from the pawn shop.
We must first determine whether it was permissible for the trial court to order restitution for all the items associated with the first break-in where Killion only pleaded guilty to receiving the stolen property that was recovered from the pawn shop on July 7, 2012.
The Kentucky Supreme Court recently addressed this issue in Commonwealth v. Morseman, 379 S.W.3d 144 (Ky. 2012). In Morseman, the appellant was indicted for second degree arson and insurance fraud after allegedly starting a fire that burned down his home. Id. at 146. After the fire, the appellant made a claim for and received insurance money for various personal items he claimed the fire destroyed; however, several of the items were subsequently discovered in appellant's storage unit. Id. at 145-46. The appellant also received insurance proceeds for the home and other items that were destroyed in the fire. Id. at 149. The appellant pleaded guilty only to the insurance fraud and not the arson. Id. The trial court ordered the appellant to pay restitution for the entire amount of insurance proceeds he received without limiting it to the value of the items the appellant falsely claimed had been destroyed in the fire. Id. at 147. On appeal, the appellant argued that since he did not plead guilty to arson, the trial court should not have ordered restitution for the insurance proceeds that he received for items that were actually destroyed in the fire. Id. at 147-48.
In analyzing this issue of first impression, the Kentucky Supreme Court began by reiterating the well-established rule that plea agreements sound in contract and are "governed by basic contract law" principles. Id. at 149 (quoting Covington v. Commonwealth, 295 S.W.3d 814, 816 (Ky. 2009)). The Court then determined that the initial inquiry must focus on "what the parties' reasonable expectations were, and what they understood the agreement to mean." Id. at 150. Reviewing the record before it, the Court concluded that the appellant reasonably understood at the time he entered into the plea agreement that he would have to pay all of the insurance proceeds he received as part of his restitution because a specific dollar figure for restitution was set out in the plea agreement. Id.
The Court then held that the applicable restitution statutes, KRS 533.030(3), KRS 532.350(1)(a), and KRS 304.47-020(2)(d), do not bar a plea agreement for restitution that extends to crimes beyond those that the defendant was convicted of by way of his plea agreement. Id. at 151. The Court explained:
In relevant part, this section provides:
(3) When imposing a sentence of probation or conditional discharge in a case where a victim of a crime has suffered monetary damage as a result of the crime due to his property having been converted, stolen, or unlawfully obtained, or its value substantially decreased as a result of the crime . . . , the court shall order the defendant to make restitution in addition to any other penalty provided for the commission of the offense. . . .
This section provides:
"Restitution" means any form of compensation paid by a convicted person to a victim for counseling, medical expenses, lost wages due to injury, or property damage and other expenses suffered by a victim because of a criminal act;
This section deals exclusively with restitution for insurance-fraud related crimes. In relevant part, it provides a person convicted of certain insurance fraud crimes:
[M]ay be ordered to make restitution to any victim who suffered a monetary loss due to any actions by that person which resulted in the adjudication of guilt, and to the division for the cost of any investigation. The amount of restitution shall equal the monetary value of the actual loss or twice the amount of gain received as a result of the violation, whichever is greater.
The only remaining question is whether KRS 533.030(3), KRS 532.350(1)(a), or KRS 304.47-020(2)(d) render the restitution provision in the plea agreement and sentencing order invalid. We hold that they do not. To hold otherwise would eliminate a common and efficient manner of administering justice. We offer the following scenarios as examples:
(a) The Commonwealth charges a defendant with five misdemeanor counts of theft by deception for issuing bad checks. The defendant agrees to plead guilty on one theft count but to make restitution for all five checks.
(b) A grand jury indicts a general contractor with three felony counts of theft by failure to make required disposition for not paying a subcontractor from funds paid by the property owner. The general contractor pleads guilty to a single count but agrees to reimburse all three victims.
(c) The Commonwealth charges a defendant with breaking and entering and fleeing or evading police. The Commonwealth agrees to dismiss the breaking and entering charge in exchange for (1) a guilty plea on the fleeing or evading charge, and (2) restitution for the victim's broken door or window.
In each of the scenarios described, strict construction of KRS 532.350(1)(a) would require invalidation of the agreed-upon restitution amount after the fact of the plea. The General Assembly could not have intended such an absurd result. These types of agreements occur every day, and are an efficient manner of disposing of charges while providing equitable relief to victims.
The Court ultimately established a new rule under Kentucky law for plea agreements that include restitution for crimes other than those that the defendant pleaded guilty to by operation of his plea: a trial court may not order a criminal defendant to pay restitution to a victim of a crime for which he was not convicted unless the defendant freely and voluntarily agrees to make restitution for other crimes as part of the plea agreement. Id. at 152 (citing and adopting Maryland's rule as codified in Silver v. Maryland, 23 A.3d 867, 874 (2011)). Hereinafter, we refer to this rule as the Morseman rule.
Appellant cites two unpublished decisions, Bowshier v. Commonwealth, 2010-CA-000257-MR, WL 3628868 (Ky. App. Aug. 19, 2011) and Leick v. Commonwealth, 2011-CA-001419-MR, WL 3553190 (Ky. App. Aug. 17, 2012), in support of his argument. First, unpublished cases from a panel of our Court are not binding on subsequent panels. Second, we believe these opinions were abrogated in light of Morseman insofar as they do not contain an exception for restitution freely and voluntarily agreed to by the defendant as part of his plea agreement.
Based on Morseman, we reject any argument that Killion's plea agreement could not, as a matter of law, include an agreement that Killion would pay restitution for the stolen items that were not recovered from the pawn shop. This does not end our inquiry, however, because we must now determine whether Killion freely and voluntarily agreed to make such restitution. B. Application of Morseman Rule
We first consider whether the record supports the trial court's conclusion that Killion freely and voluntarily agreed to make restitution for the additional items taken from Tomes but not returned to her from the pawn shop. We apply "traditional principles of contract law when interpreting and enforcing plea agreements." Smith v. Commonwealth, 400 S.W.3d 742, 744 (Ky. 2013). In contract law, we presume that parties include contractual provisions and terms for a reason. It is a basic tenant of contract construction that if two interpretations are reasonable and one renders the provision meaningless and one does not, the courts should adopt the interpretation that gives meaning to the terms and provisions the parties included in their contract. See Harbison-Walker Refractories Co. v. United Brick and Clay Workers of America, AFL-CIO Local No. 702, 339 S.W.2d 933, 935 (Ky. 1960).
The items recovered from the pawn shop were returned to Tomes. Therefore, Tomes was not entitled to recover monetary restitution for those items. See KRS 533.030(3)(a) ("Where property which is unlawfully in the possession of the defendant is in substantially undamaged condition from its condition at the time of the taking, return of the property shall be ordered in lieu of monetary restitution."). As such, construing the plea agreement to include only an agreement for Killion to pay restitution for the items recovered from the pawn shop, as Killion urges us to do, would render the restitution provision meaningless. The only reasonable interpretation of the plea agreement's inclusion of restitution is that Killion was agreeing to pay restitution for the items taken from Tomes during the first break-in that were not recovered from the pawn shop and returned to her. Accordingly, we find that in accepting the Commonwealth's plea, Killion agreed to pay restitution for the jewelry still missing as a result of the July 6, 2012, break-in.
Killion next asserts that even if his plea agreement contemplated payment for these additional items, it is nonetheless invalid under Morseman because it did not specify an exact dollar amount for his restitution. While the specific plea agreement at issue in Morseman did contain an exact restitution dollar amount, the Kentucky Supreme Court did not hold that a plea agreement must specify a restitution dollar amount to validly include restitution for "other crimes"or indicate that its holding should be limited to the facts before it. In addition to the absence of any limiting language in the Morseman opinion, we observe that the Supreme Court adopted Maryland's restitution rule word-for-word. Morseman, 379 S.W. 3d at 152 ("[We] adopt this Maryland rule as the law of Kentucky."). The Maryland case our Supreme Court relied upon rejected the notion that a plea agreement encompassing restitution for other crimes must set forth a restitution dollar amount to be enforceable. See Silver, 23 A.3d at 875-76 n.19 (noting that a restitution agreement including other crimes was enforceable even though "the exact sum may not be contained in the plea recital").
By "other crimes" we mean crimes beyond those that the defendant pleaded guilty to as part of the plea agreement.
We conclude that Killion's plea agreement is enforceable despite the fact it does not include a specific dollar amount for restitution. Our Supreme Court has not imposed such a requirement and we do not appreciate any rational reason to do so now. In fact, in cases like the present, we believe such a requirement would hamper plea negotiations as it is not always possible to establish an exact restitution value prior to the victim offering some testimony and/or evidence to establish the property's value.
Killion also asserts that Morseman should be limited to only other crimes for which the defendant has been charged. Killion was not charged with the Tomes break-in, only to receiving the stolen property located at the pawn shop on July 7, 2012. Morseman did not explicitly address whether the defendant must have actually been charged with the "other crimes." Certainly, the language the Court used does not suggest on its face that formal charges need to have been brought against the defendant before he can validly agree to pay restitution for such other crimes. Furthermore, we observe again that the Maryland case upon which our Supreme Court relied specifically states that a plea agreement can include restitution for both charged and uncharged other crimes. See Silver. 23 A.3d at 877. ("The State may request, in plea negotiations, that a criminal defendant agree to pay restitution for related, though uncharged, crimes. If the defendant freely and voluntarily agrees to pay such restitution, it is permissible[.]") (emphasis added).
"Plea agreements between prosecutors and criminal defendants are a vital part in the administration of justice." Knox v. Commonwealth, 361 S.W.3d 891, 897 (Ky. 2012). Within the confines of due process, the parties to those agreements should be afforded a wide degree of latitude to negotiate for the terms and conditions as they see fit. "Plea agreements have included a wide variety of provisions, including: dismissal of charges against a third party, the defendant supplying information to the police, the defendant testifying against someone else, and even the prosecutor making a public announcement to protect the defendant's reputation." Bland v. State, 417 S.W.3d 465, 471 (Tex. Crim. App. 2013). We see nothing inherently problematic with allowing a defendant to agree to pay restitution for other uncharged crimes as part of his plea so long as his agreement is voluntary. Indeed, we believe prosecutors should have the option to make such terms part of the plea offer.
In sum, we conclude that the only reasonable interpretation of the plea agreement's restitution provision is that Killion agreed to pay restitution for the items taken from Tomes's home during the first break-in, but not recovered from the pawn shop. This break-in comprises part of the entire set of criminal circumstances that led to a portion of the items being located at the pawn shop, the incident that gave way to the stolen property charge that Killion pleaded guilty to. We can appreciate no reason for the parties to have included the restitution provision in the absence of an agreement by Killion to pay restitution with respect to the items still missing from the first break-in.
The diamond ring was among the items Tomes identified as having been taken during the first break-in and still missing. As such, we do not believe that the trial court erred in ordering Killion to pay restitution for the diamond ring. Despite Killion's assertion that the ring was taken during the second break-in, we believe that the record contains ample evidence to support the trial court's conclusion that the ring was taken during the first break-in. This is the break-in that Killion admitted receiving stolen property from and for which he agreed to pay restitution. As such, the trial court did not abuse its discretion in ordering Killion to pay restitution for the diamond ring.
In its brief, the Commonwealth concedes that the second break-in was not a part of Killion's plea agreement, and therefore, Killion should not have been ordered to pay any restitution for items taken during this second break-in. It is clear from the trial court's order that a portion of the total restitution it ordered Killion to pay was based on the value of items stolen during this second break-in. Specifically, the order referenced a "ring that was valued at $600.00." Tomes testified that this particular ring was stolen during the second break-in.
Since the Commonwealth has conceded that the parties did not intend to include restitution for the second break-in as part of Killion's plea agreement, we conclude that the trial court erred to the extent it included restitution for any items from the second break-in.
Having reviewed the record, we must note that we are sympathetic to the trial court's predicament as the parties' positions were somewhat unclear. Nevertheless, given the Commonwealth's position that the second break-in was not a part of the plea agreement, reversal of this portion of the order is necessary.
Since the trial court's restitution order does not specify a separate amount for the different pieces of missing jewelry or indicate whether it includes items in addition to the diamond ring (first break-in) and the $600.00 amethyst ring (second break-in), we must vacate the order and remand this matter to the trial court for additional findings of fact, and, if necessary, a supplemental restitution hearing.
Any additional hearing and subsequent restitution order should comport with the standards established by our Supreme Court in Wiley v. Commonwealth, 348 S.W.3d 570, 575 (Ky. 2010): 1) the defendant must have some meaningful opportunity to be heard; 2) the record must establish a factual predicate for the restitution order; and 3) any facts relied on by the court to establish a restitution amount must "have some minimal indicium of reliability beyond mere allegation." Id.
For the reasons explained above, we AFFIRM in part to the extent that the circuit court's order required Killion to pay restitution for the missing diamond ring; we REVERSE in part to the extent the circuit court's order required Killion to pay restitution for any items Tomes claimed were missing as a result of the second break-in; and we REMAND this matter to the circuit court for a determination of the appropriate amount of restitution.
ALL CONCUR. BRIEFS FOR APPELLANT: Jason A. Hart
BRIEF FOR APPELLEE: Jack Conway
Attorney General of Kentucky
Thomas A. Van De Rostyne
Assistant Attorney General