People v. Kelly

• Decision Date: 23 December 2020
• Docket Number: 2d Crim. No. B301916
• Citation: 59 Cal.App.5th 1172,274 Cal.Rptr.3d 158
• Court: California Court of Appeals Court of Appeals
• Parties: The PEOPLE, Plaintiff and Respondent, v. Michael Patrick KELLY, Defendant and Appellant.

59 Cal.App.5th 1172

274 Cal.Rptr.3d 158

The PEOPLE, Plaintiff and Respondent,

v.Michael Patrick KELLY, Defendant and Appellant.

2d Crim. No. B301916

Court of Appeal, Second District, Division 6, California.

Filed December 23, 2020

As Modified on Denial of Rehearing January 21, 2021

George L. Schraer, San Diego, for Defendant and Appellant.

Xavier Becerra, Attorney General, Lance E. Winters, Chief Assistant Attorney General, Susan Sullivan Pithey, Assistant Attorney General, Steven D. Matthews and Ryan M. Smith, Deputy Attorney General, for Plaintiff and Respondent.

GILBERT, P.J.

Here we decide that victims may recover attorney fees and costs occasioned by a defendant's criminal conduct.

Michael Patrick Kelly appeals an order awarding restitution to Kelly's crime victims following his conviction for false personation of another ( Pen. Code,¹ § 529, subd. (a)(3) ) (count 1); unauthorized use of personal identifying information of another (§ 530.5, subd. (a)) (count 2); and disobeying a court order (§ 166, subd. (a)(4)) (count 3). We conclude, among other things, that the trial court properly awarded restitution to Kelly's victims for attorney fees and costs they incurred as a result of Kelly's conduct. We affirm.

FACTS

Charles Schwab Co., Inc. (Schwab) terminated Kelly's contract as an "independent investment advisor." ( People v. Kelly , 2019 WL 6484320 (Dec. 3, 2019, B296697) [nonpub. opn.].) In 2013, Schwab obtained legal counsel and obtained a workplace violence restraining order to protect its employees from Kelly's threatening behavior. ( Ibid. ) The trial court ordered Kelly to stay 100 yards away from any of Schwab's offices and prohibited him from contacting Schwab's employees.

Kelly repeatedly violated the restraining order by contacting Schwab employees and pretending to be Craig Cross, an "advisor with a firm of approximately four billion under management." ( People v. Kelly , supra , B296697.) Cross did not give Kelly permission to use his name, job title, or his company's name for any purpose. Kelly used this false identity pretending to be Cross to contact or meet with Schwab employees that the trial court had prohibited him from contacting. He used it to penetrate Schwab's business and obtain information he was not authorized to receive. Schwab hired a law firm to protect itself and its employees from Kelly while Kelly was engaging in a long course of conduct to unlawfully target Schwab. Those lawyers investigated and proved that Kelly had violated the restraining order, and they provided evidence to law enforcement to prosecute Kelly.

On December 3, 2019, we affirmed Kelly's conviction for the crimes of false personation of another, unauthorized use of personal identifying information, and disobeying a court order. ( People v. Kelly , supra , B296697.)

The trial court held a hearing to determine restitution for the economic losses the victims of Kelly's crimes (Cross and Schwab) had suffered. For Cross, the People sought "$905.00, as reimbursement for attorney's fees associated with being a victim of identity theft." Cross submitted "a Victim Loss statement" to support his claim for reimbursement.

Schwab sought reimbursement for attorney fees and costs it incurred: 1) in seeking a restraining order against Kelly, 2) for investigating and proving Kelly had secretly violated the restraining order, and 3) for providing evidence to law enforcement and for assisting law enforcement in prosecuting Kelly. Schwab's request for restitution was supported by the declaration of its lawyer with billing records, a prosecutor's written statement, two letters containing statements of Schwab's loss submitted to the probation department, and a probation memorandum.

The trial court ordered restitution for Cross in the amount of $905 and restitution for Schwab in the amount of $221,140.40.

DISCUSSION

Restitution

I

Kelly contends the restitution awards to Schwab and Cross for attorney fees and costs must be set aside because the awards were not related to litigation instituted to collect money to reimburse Schwab and Cross for economic losses. We disagree.

Schwab sought reimbursement for: 1) $62,520.62 for attorney fees and costs to obtain a restraining order to protect Schwab employees from Kelly's threatening behavior; and 2) $221,140.40 in attorney fees and costs it incurred for its counsel to investigate and prove that Kelly had engaged in a secret unlawful course of conduct to violate that restraining order.

Cross sought $905 as "reimbursement for attorney's fees associated with being a victim of identity theft."

The trial court awarded restitution to Cross for $905 and restitution to Schwab for $221,140.40. It did not award Schwab restitution for the attorney fees and costs it incurred for obtaining the restraining order.

There is "a broad constitutional mandate of California Constitution, article I, section 28, subdivision (b), that restitution must be imposed ‘in every case ... in which a crime victim suffers a loss ....’ " ( People v. Giordano (2007) 42 Cal.4th 644, 655, 68 Cal.Rptr.3d 51, 170 P.3d 623.)

Kelly contends the restitution awards made by the trial court were not authorized by the restitution statute. (§ 1202.4.)

The People respond those fees and costs were proper because they were economic losses actually incurred by Schwab and Cross as victims of Kelly's criminal conduct. We agree.

"The restitution statute allows for recovery of a broad variety of economic losses that are incurred as a result of the defendant's criminal conduct. (§ 1202.4, subd. (f)(3).)" ( People v. Keichler (2005) 129 Cal.App.4th 1039, 1046, 29 Cal.Rptr.3d 120.) Section 1202.4, subdivision (f)(3) provides, "To the extent possible, the restitution order shall be prepared by the sentencing court, shall identify each victim and each loss to which it pertains, and shall be of a dollar amount that is sufficient to fully reimburse the victim or victims for every determined economic loss incurred as the result of the defendant's criminal conduct, including, but not limited to , all of the following ...." (Italics added.) The statute then lists several examples of economic losses.

With respect to attorney fees, one example in the statutory list refers to "[a]ctual and reasonable attorney's fees and other costs of collection accrued by a private entity on behalf of the victim." (§ 1202.4, subd. (f)(3)(H).)

Kelly contends the attorney fees and costs the trial court awarded do not fall within that example and they are therefore not authorized as economic losses that may be ordered as restitution.

The People respond that the list of examples in the statute is not an exclusive list of economic losses. They claim the trial court could reasonably infer the amounts it awarded were economic losses in the form of attorney fees and costs that were incurred by Schwab and Cross as a direct result of Kelly's criminal conduct. We agree.

In Giordano , our Supreme Court ruled that "the constitutional and legislative intent to provide for all crime victim losses, and the expressly nonexclusive list of categories of loss included in the direct restitution statute" refuted a claim that the courts had to "read into that statute an implied limitation on restitution" to only award reimbursement for those statutory examples. ( People v. Giordano , supra , 42 Cal.4th at p. 660, 68 Cal.Rptr.3d 51, 170 P.3d 623.)

"Because the statute uses the language ‘including, but not limited to’ these enumerated losses, a trial court may compensate a victim for any economic loss which is proved to be the direct result of the defendant's criminal behavior , even if not specifically enumerated in the statute." ( People v. Keichler , supra , 129 Cal.App.4th at p. 1046, 29 Cal.Rptr.3d 120, italics added.)

The People asked the trial court to award restitution to Schwab and Cross because "each amount of restitution requested in this case is appropriate as each reasonably relates to the crime defendant was convicted of." The attorney fees and costs Schwab actually incurred as a victim of Kelly's criminal conduct were supported by the declaration of Schwab's lawyer, Robyn Crowther. Schwab hired counsel to protect the company and its employees from Kelly while Kelly was engaging in a secret, unlawful course of conduct to harm Schwab.

Under the restitution statute, "[a] victim's restitution right is to be broadly and liberally construed." ( People v. Mearns (2002) 97 Cal.App.4th 493, 500, 118 Cal.Rptr.2d 511.) "[T]he overall history of the amendments to section 1202.4 reflects a legislative intent to enlarge, not restrict, the availability of restitution." ( People v. McCarthy (2016) 244 Cal.App.4th 1096, 1107, 198 Cal.Rptr.3d 741.)

Restitution may include expenses incurred to protect the crime victim from the defendant. ( People v. Mearns , supra , 97 Cal.App.4th at p. 501, 118 Cal.Rptr.2d 511.) Awarding restitution to Schwab because it hired counsel to protect itself from a criminal course of conduct falls within the scope and remedial purpose of section 1202.4. Those fees and costs were " ‘a logical result of appellant's criminal conduct.’ " ( People v. Maheshwari (2003) 107 Cal.App.4th 1406, 1410, 132 Cal.Rptr.2d 903.) Failure to award them as restitution would be "to fail to fully reimburse" the victim. ( Ibid . ) That would mean the victim would incur the losses instead of the one whose criminal conduct caused them. These were consequently economic losses that may be awarded as restitution under the statute. ( People v. Keichler , supra , 129 Cal.App.4th at p. 1046, 29 Cal.Rptr.3d 120.)

Kelly notes these were not attorney fees to collect damages against him. But they were legal fees and costs in response to his on-going criminal conduct. They were more important for the protection of the crime victim's current safety than merely suing for damages after the fact. They included costs for immediately protecting Schwab from Kelly, investigating his conduct, obtaining evidence, and assisting in the...