Martin v. State

• Decision Date: 30 March 1994
• Docket Number: No. 618-91,618-91
• Citation: 874 S.W.2d 674
• Parties: Judy Elliot MARTIN, Appellant, v. The STATE of Texas, Appellee.
• Court: Texas Court of Criminal Appeals

Page 674

874 S.W.2d 674

Judy Elliot MARTIN, Appellant, v. The STATE of Texas, Appellee.

No. 618-91.

Court of Criminal Appeals of Texas En Banc.

March 30, 1994.

H. Jack Pytel, Jr., Larry Zinn, San Antonio, for appellant.

Sam Oatman, Dist. Atty., Llano, Rhonda K. Rogers, Sp. Asst. Dist. Atty., Robert Huttash, State's Atty., Austin, for the State.

Before the court en banc.

OPINION ON APPELLANT'S PETITION FOR DISCRETIONARY REVIEW

MALONEY, Judge.

Appellant plead nolo contendere to a charge of securities fraud in violation of Section 29(C) of the Texas Securities Act. TEX.REV.CIV.STAT.ANN. art. 581-29 (Supp.1991) ("TSA"). The trial court sentenced her to ten years imprisonment, the execution of the sentence was suspended and appellant was placed on ten years probation, conditioned upon the payment of restitution. The Third Court of Appeals affirmed. Martin v. State, 806 S.W.2d 237 (Tex.App.--Austin 1991). We granted appellant's petition for discretionary review to settle a conflict among the courts of appeals as to whether restitution may be awarded to victims of crimes for which the defendant has not been charged and convicted. ¹ TEX.R.APP.P. 200(c)(1).

Heretofore, appellant and James Augustus Connor formed an oil company, Gaelic Petroleum. Gaelic Petroleum subsequently declared bankruptcy, and the State Securities Board began an investigation that culminated in an indictment against appellant. ² The indictment alleged that appellant "did intentionally sell to ALFRED O. BROOME a security" in the amount of $3,717.19 and that appellant "did then and there commit fraud upon the said ALFRED O. BROOME by fraudulently and intentionally failing to disclose" certain matters concerning Gaelic Petroleum. As previously stated, the trial court placed appellant on ten years probation pursuant to TEX.CODE CRIM.PROC.ANN. art. 42.12 § 11. As a condition of probation, the court ordered restitution in the amount of $65,179.08. That amount represented half of the total amount allegedly lost by approximately forty investors in Gaelic Petroleum. ³ The court of appeals upheld the restitution order, concluding that "a trial court's authority to order restitution payments as a condition of probation is not limited by art. 42.12 § 11(b) to victims named in the indictment or information; a trial court may condition probation on the payment of restitution to a victim not named in the charging instrument." Id. at 242. Although the Court of Appeals' holding is couched in terms of whether or not the victim to whom restitution is to be paid is named in the indictment, the more precise issue, and in fact the issue upon which we granted review, is whether "the Court of Appeals erred in holding that restitution may be awarded to victims of crimes for which appellant had not been charged and convicted. ⁴

I.

Article 42.12, TEX.CODE CRIM.PROC.ANN., Adult Probation, § 11, Basic Conditions of Probation, provides that:

(a) Terms and conditions of probation may include, but shall not be limited to, the conditions that the probationer shall:

(8) Pay his fine, if one be assessed, and all court costs whether a fine be assessed or not, in one or several sums, and make restitution or reparation in any sum that the court shall determine;

TEX.CODE CRIM.PROC.ANN. art. 42.12 § 11(a)(8) (emphasis added). ⁵ We have construed this provision as empowering trial courts, within their sound discretion, to order restitution as a condition of probation so long as the amount set by the court had a factual basis in the record and was just. Cartwright v. State, 605 S.W.2d 287 (Tex.Crim.App.1980). Effective September 1, 1987, Article 42.12 § 11 was amended to add the following provision:

(b) A court may not order a probationer to make any payment[s] [sic] as a term and condition of probation, except for fines, court costs, restitution to the victim, and other terms or conditions related personally to the rehabilitation of the probationer or otherwise expressly authorized by law.

TEX.CODE CRIM.PROC.ANN. art. 42.12 § 11(b) (emphasis added). ⁶ A plain reading of the two provisions together leads to the conclusion that subsection (b) serves as a limitation on the restitution that can be ordered under subsection (a). Subsection (a) sets forth a broad grant of authority, providing that a court may order a variety of terms and conditions of probation, including a condition that the defendant make "restitution or reparation in any sum that the court shall determine." Subsection (b), however, imposes limitations on the types of payments that can be ordered as a condition of probation, providing that no payment can be ordered except "restitution to the victim" and certain other identified payments. Further, in the context of the probation statute as a whole, we think it logical to conclude that subsection (b)'s limitation of restitution to "the victim" refers to the victim of the crime for which the defendant has been charged, convicted and sentenced.

Caselaw supports the conclusion that restitution may be awarded only to victims of the crime adjudicated. While we have never addressed that exact issue, we have held that restitution may not be ordered as a condition of probation for losses caused by an offense for which the defendant is not criminally responsible. Gordon v. State, 707 S.W.2d 626 (Tex.Crim.App.1986). In Gordon a burglary suspect died as a result of injuries sustained during a custodial interrogation. Gordon, one of the law enforcement officers involved, was charged under Penal Code section 39.021, Violations of the Civil Rights of a Prisoner. Although the charge permitted the jury to find Gordon responsible as a party for the death of the suspect, the jury instead found him guilty only of a lesser assault and assessed punishment at five years imprisonment and a two thousand dollar fine, both probated. Id. at 628. As a condition of probation the trial court ordered Gordon to pay restitution to the deceased's family of up to $4000 for funeral expenses. We recognized the principle that "when the defendant's criminal culpability for a third party's losses has not been adjudicated it would be unfair to order the defendant to pay those losses." Id. at 629. ⁷ Accordingly, we held that the trial court was without authority under article 42.12 to order restitution for the funeral expenses, as they were losses arising from an offense for which the defendant had been found not criminally responsible.

While appellant in the instant case was not acquitted of defrauding any of the Gaelic Petroleum investors (unlike the defendant in Gordon who was essentially acquitted of causing the suspect's death), neither was appellant's guilt in this case adjudicated with respect to any investor other than Broome. The State here charged appellant with fraudulently failing to disclose material information to Broome, thereby defining the scope of appellant's offense by identifying a distinct investor who was defrauded. ⁸ We conclude the court of appeals erred in holding that restitution could be awarded under article 42.12 § 11(b) to victims of crimes for which appellant had not been charged and convicted. ⁹

II.

The State argues that appellant's actions constituted a scheme to defraud, and as such, restitution may properly be ordered payable to all victims of that scheme. ¹⁰ In support of this proposition, the State cites federal court decisions holding permissible such recovery under the Victims Witness and Protection Act of 1982 ("VWPA"), 18 U.S.C. § 3579(a)(1) (1982 ed. and Supp. IV). ¹¹

The restitution provision of the VWPA authorizes federal courts, when sentencing defendants convicted of certain offenses, to order "a defendant convicted of an offense" to "make restitution to any victim of such offense." 18 U.S.C. § 3579(a)(1) (1982 ed., Supp. IV) (this provision has been recodified and now appears as 18 U.S.C. § 3663). In Hughey v. United States, the Supreme Court interpreted this language as authorizing restitution to be paid to victims of the offense for which a defendant was convicted. 495 U.S. 411, 415-20, 110 S.Ct. 1979, 1982-84, 109 L.Ed.2d 408 (1990) (VWPA ties term "victim" to "the offense", meaning offense of conviction). The Court further addressed the issue of whether a court had authority under the VWPA "to order a defendant who is charged with multiple offenses but who is convicted of only one offense to make restitution for losses related to the other alleged offenses." There, the defendant was charged with multiple counts of unauthorized use of credit cards, but pursuant to a plea agreement plead guilty to one count. ¹² Id. at 414, 110 S.Ct. at 1981. The district court ordered him to pay restitution to MBank in the amount of $90,431, the total of MBank's losses resulting from the defendant's alleged theft and use of 21 credit cards issued by MBank. The district court's order was upheld on appeal. The Supreme Court reversed, holding that a restitution award under the VWPA is authorized only for "the loss caused by the specific conduct that is the basis of the offense of conviction." Id. at 413, 110 S.Ct. at 1981. The Court concluded that the restitution order was beyond the scope of the VWPA:

Petitioner pleaded guilty only to the charge that he fraudulently used the credit card of [a single cardholder]. Because the restitution order encompassed losses stemming from alleged fraudulent uses of cards issued to persons other than [that single cardholder], such portions of the order are invalid.

Id. at 422, 110 S.Ct. at 1985.

Federal courts have reached different conclusions under Hughey as to the permissible scope of a VWPA restitution award in the context of an offense involving a scheme. ¹³ Two circuits have interpreted Hughey in such a way as to permit restitution for all losses arising from the alleged scheme. See United States v. Bennett, 943 F.2d 738 (7th Cir.1991), cert. denied, 504 U.S. 987, 112 S.Ct. 2970, 119 L.Ed.2d 590 (1992); United States v....