People v. Hume, A128757.

Citation126 Cal.Rptr.3d 824,2011 Daily Journal D.A.R. 9109,11 Cal. Daily Op. Serv. 7590,196 Cal.App.4th 990
Decision Date28 September 2011
Docket NumberNo. A128757.,A128757.
CourtCalifornia Court of Appeals
PartiesThe PEOPLE, Plaintiff and Respondent, v. Edward Duff HUME, Defendant and Appellant.

196 Cal.App.4th 990
126 Cal.Rptr.3d 824
11 Cal.
Daily Op. Serv. 7590
2011 Daily Journal D.A.R. 9109

The PEOPLE, Plaintiff and Respondent,
Edward Duff HUME, Defendant and Appellant.

No. A128757.

Court of Appeal, First District, Division 4, California.

June 21, 2011.
Review Denied Sept. 28, 2011.

[126 Cal.Rptr.3d 826]First District Appellate Project, Matthew Zwerling, Jeremy Price, for Appellant.

Kamala D. Harris, Attorney General, Dane R. Gillette, Chief Assistant Attorney General, Gerald A. Engler, Senior Assistant Attorney General, Gregg Zywicke, Allan Yannow, Deputy Attorneys General, for Respondent.

REARDON, Acting P.J.

[196 Cal.App.4th 994]

Convicted of embezzlement by an employee with an excess taking clause allegation (Pen.Code,1 §§ 487, subd. (a), 506, 12022.6, subd. (a)), appellant and former licensed attorney Edward Duff Hume was ordered to pay victim restitution to several persons, including two who had received some reimbursement from the California State Bar Client Security Fund (CSF). Appellant challenges that aspect of the restitution order, urging that the trial court should have reduced the amount of restitution to those victims by the amount each received from the CSF. He offers several reasons for this proposition: (1) the CSF is a legislative creature, specifically established for the purpose of compensating victims for losses attributable to attorney dishonesty; (2) the victims had assigned their right to compensation directly from appellant to the CSF; and (3) the State Bar has statutory subrogation rights to recover from him the amount of the CSF awards. We conclude that appellant is not entitled to any offset in the amount of the actual restitution award; however as we further explain, he will not be required to pay twice for his misconduct. Accordingly, we affirm the judgment.


In March 2009, the San Mateo County District Attorney filed an information charging appellant Edward Duff Hume with one count of embezzlement by an employee in excess of $400, with an allegation that the taking was in excess of $200,000; two counts of grand theft; one count of second degree burglary; and two counts of forgery. Appellant pleaded nolo contendere to the embezzlement count and admitted the excess taking enhancement. The court dismissed the other counts subject to a Harvey2 waiver, thus allowing the court to consider them at the time of sentencing. Appellant received a four-year sentence—two years for the embezzlement and two years for the excess taking clause.

[196 Cal.App.4th 995]

The court referred the matter to the probation department to prepare a restitution report. According to the report, appellant was an attorney who managed a family trust for both Raymon Long and Debra Tucker, who were victims in the dismissed counts. In May 2006, appellant asked Long and Tucker if he could borrow $55,000 and $45,000 respectively from the trusts of which they were trustees. Appellant said he needed the money to fix up his house. Long and Tucker signed documents prepared by appellant memorializing the terms. Appellant made two interest/loan fee payments in the amount of $495 on the loans, but never paid on the principal. The victims applied to the CSF for reimbursement for their losses; Long recovered $50,000 from the fund and Tucker received $45,000.

At the restitution hearing, the court ordered appellant to pay $1,260,115.14 to the Frederick D. Helversen Living Trust as victim restitution on the charge for which [126 Cal.Rptr.3d 827]he now stands convicted; 3 $55,000 to Long; and $45,000 to Tucker. The court also issued a written decision addressing, among other points, the issue of offset for the CSF payments to Long and Tucker. The court reasoned that although trial courts normally will credit a defendant for payments made to a victim from the defendant's own insurance company,4 the payments the CSF made to the victims are not equivalent to those in Bernal or its progeny such that appellant would be entitled to an offset.


We review the trial court's allocation of responsibility for restitution for an abuse of discretion, mindful that an order resting on a demonstrable legal error constitutes such an abuse. ( People v. Jennings (2005) 128 Cal.App.4th 42, 49, 26 Cal.Rptr.3d 709.)

A. Restitution Principles

A victim's right to restitution from the person convicted of the crime causing his or her economic loss is enshrined in article I, section 28, subdivision (b)(13) of our state Constitution. In addition to compensating victims, the restitution mandate serves rehabilitative and deterrent purposes. (In re Brittany L. (2002) 99 Cal.App.4th 1381, 1387, 122 Cal.Rptr.2d 376.)

Section 1202.4, the general restitution statute, states the legislative intent that “a victim of crime who incurs any economic loss as a result of the commission of a crime shall receive restitution directly from any defendant

[196 Cal.App.4th 996]

convicted of that crime.” (§ 1202.4, subd. (a)(1).) Accordingly, the trial court shall order any defendant so convicted to pay restitution to the victim. ( Id., subds. (a)(3)(B), (f).) When the defendant enters a negotiated disposition, with counts dismissed subject to a Harvey waiver, the court can consider the dismissed counts for purposes of sentencing and restitution. (§ 1192.3; People v. Ozkan (2004) 124 Cal.App.4th 1072, 1074, 21 Cal.Rptr.3d 854.)

In determining restitution pursuant to section 1202.4, the amount ordered “shall not be affected by the indemnification or subrogation rights of any third party.” (§ 1202.4, subd. (f)(2).) Further, to the extent possible, the restitution order shall be for the full amount of the victim's economic loss. ( Id., subd. (f)(3).) As our Supreme Court explained in connection with a prior version of the relevant statutory provisions which remain substantively unchanged under section 1202.4, “the Legislature intended to require a probationary offender, for rehabilitative and deterrent purposes, to make full restitution for all losses his crime had caused, and that such reparation should go entirely to the individual or entity the offender had directly wronged, regardless of that victim's reimbursement from other sources. Only the [state] Restitution Fund was eligible to receive any part of the full restitutionary amount otherwise due to the immediate victim.” ( People v. Birkett (1999) 21 Cal.4th 226, 246, 87 Cal.Rptr.2d 205, 980 P.2d 912, italics omitted; People v. Millard (2009) 175 Cal.App.4th 7, 26, 95 Cal.Rptr.3d 751.)

Consistent with the statute, payments to the victim by the victim's own insurer as compensation for economic losses attributed to a defendant's criminal conduct may not offset the defendant's restitution[126 Cal.Rptr.3d 828]obligation. ( People v. Hamilton (2003) 114 Cal.App.4th 932, 935, 940–941, 8 Cal.Rptr.3d 190;People v. Hove (1999) 76 Cal.App.4th 1266, 1272, 91 Cal.Rptr.2d 128.) And, although a restitution order is not intended to give the victim a windfall ( People v. Millard, supra, 175 Cal.App.4th at p. 28, 95 Cal.Rptr.3d 751), a third party source which has reimbursed a direct victim for his or her loss may pursue its civil remedies against the victim or perpetrator. “[T]he possibility that the victim may receive a windfall because the third party fails to exercise its remedies does not diminish the victim's right to receive restitution of the full amount of economic loss caused by the perpetrator's offense.” ( People v. Duong (2010) 180 Cal.App.4th 1533, 1537–1538, 103 Cal.Rptr.3d 678.)

However, payments to the victim by a defendant's own insurer do entitle a defendant to an offset against his or her restitution obligation. Payments by a company insuring a defendant are payments directly from the defendant within the meaning of section 1202.4, subdivision (a)(1). ( Bernal, supra, 101 Cal.App.4th at pp. 167–168, 123 Cal.Rptr.2d 622.) The Bernal court reasoned that payments from the defendant's own insurance company are different from other sources of victim reimbursement because (1) the defendant purchased

[196 Cal.App.4th 997]

the insurance, and the payments are not fortuitous but rather are precisely what the defendant bargained for; (2) the defendant paid premiums to keep the policy in force; (3) the defendant has a contractual right to have the insurance company make payments to the victim on his or her behalf; and (4) the insurance company has no indemnity or subrogation rights against the defendant. ( Id. at pp. 167–168, 123 Cal.Rptr.2d 622.)

The Bernal reasoning was extended, by a divided court, in People v. Jennings, supra, 128 Cal.App.4th 42, 26 Cal.Rptr.3d 709. There, the defendant pleaded guilty to driving under the influence with great bodily injury. The reviewing court determined, contrary to the trial court's finding, that the defendant was an insured under the operative automobile insurance policy, as well as his mother. ( Id. at pp. 48, 53, 26 Cal.Rptr.3d 709.) The insurer settled the victim's civil suit and released the defendant and his mother from civil liability. ( Id. at p. 47, 26 Cal.Rptr.3d 709.) The majority determined that the relevant Bernal inquiry is “whether the defendant has obtained insurance, and is thus an ‘insured,’ and not the manner by which the insured procured the insurance coverage or how much he may have paid for it.... [Citation.] ... [R]ather than try to determine how the insurance was procured, a court must determine simply whether or...

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