State v. Hall

• Decision Date: 28 June 2013
• Docket Number: Nos. 102,297,102,663.,s. 102,297
• Citation: 304 P.3d 677,297 Kan. 709
• Parties: STATE of Kansas, Appellee, v. Pamela Sue HALL, Appellant.
• Court: Kansas Supreme Court

297 Kan. 709
304 P.3d 677

STATE of Kansas, Appellee,
v.
Pamela Sue HALL, Appellant.

Nos. 102,297, 102,663.

Supreme Court of Kansas.

June 28, 2013.

[304 P.3d 679]

[297 Kan. 709]Syllabus by the Court

1. In determining restitution for stolen inventory, there is no bright-line rule favoring either retail or wholesale cost. The sentencing judge must evaluate the evidence, weigh all factors, and consider the facts and circumstances of each case to determine a value that will compensate the victim for the actual loss caused by the defendant's crime.

2. Judicial discretion is abused if judicial action (1) is arbitrary, fanciful, or unreasonable, i.e., if no reasonable person would have taken the view adopted by the trial court; (2) is based on an error of law, i.e., if the discretion is guided by an erroneous legal conclusion; or (3) is based on an error of fact, i.e., if substantial competent evidence does not support a factual finding on which a prerequisite conclusion of law or the exercise of discretion is based.

3. On the facts of this case, the sentencing judge's adoption of retail value rather than wholesale value as an appropriate measure of loss to victim animal clinic for defendant's theft of inventory was arbitrary and without substantial evidentiary support.

Heather R. Cessna, of Kansas Appellate Defender Office, argued the cause, and Ryan Eddinger, of the same office, was with her on the brief for appellant.

Steven J. Obermeier, assistant district attorney, argued the cause, and Stephen M. Howe, district attorney, and Steve Six, attorney general, were with him on the brief for appellee.

The opinion of the court was delivered by BEIER, J.:

This appeal, before us on petition for review, asks whether retail cost or wholesale cost is the appropriate measure of loss for determining restitution for stolen inventory. Our answer is: “It depends.” We reject a bright-line rule favoring either retail [297 Kan. 710]or wholesale cost. The sentencing judge must evaluate the evidence, weigh all factors, and consider the facts and circumstances of each case to determine a value that will compensate the victim for the actual loss caused by the defendant's crime.

Factual and Procedural Background

Defendant Pamela Sue Hall was employed for 2 months at an animal clinic owned by Dr. Marc Hardin and his wife, Beverly. During this time, defendant altered computer records to, among other things, erase medical histories and outstanding bills for services performed on her own pets. She also stole inventory from the clinic. The total value of the clinic's missing inventory and defendant's unpaid bills was well in excess of $1,000, but less than $25,000. See K.S.A. 21–3701. A jury convicted defendant of computer crime and theft. The district court granted probation and, later, held a hearing to determine restitution.

Testimony at the hearing from Beverly Hardin established that the total retail value of verifiably missing inventory was $9,645.82. On cross-examination, defense counsel established that the wholesale cost of the inventory—the amount the clinic paid for items verified to be missing—totaled $4,523.50. Defense counsel also established that there were three specific occasions when, after defendant left her employment, a customer attempted to purchase something but was unable to do so because it was missing. The profit on these three items,

[304 P.3d 680]

had the clinic been able to sell them, would have totaled $70.

The sentencing judge imposed restitution payable to the clinic in the total amount of $14,293.11. The portion of this figure attributable to the stolen inventory was based on the retail rather than wholesale price for the stolen inventory. The judge stated that he was “accept[ing] the retail value” of stolen inventory “because otherwise it would deny the Hardins, as any business, their chance to make a profit on items that they sell.”

Applying a de novo standard and relying on the United States Supreme Court's 1930 decision in Illinois Cent. R. Co. v. Crail, 281 U.S. 57, 50 S.Ct. 180, 74 L.Ed. 699 (1930), the Court of Appeals held that, as a matter of law, retail value was not a proper [297 Kan. 711]measure of restitution because the loss suffered was the wholesale price the clinic had paid for the items. State v. Hall, 45 Kan.App.2d 290, 303–04, 247 P.3d 1050 (2011).

Illinois Cent., distinct in several respects from the instant case, was a civil damages case involving a coal dealer whose carload of coal, purchased at wholesale, was short on delivery. The United States Supreme Court held that the appropriate measure of damage in that case was the wholesale rather than retail value of the coal. It was undisputed that recovery of the wholesale price would fully compensate G.I. Crail, and recovery of the retail price would result in a windfall. Noting the goal was to compensate for injury actually suffered, the Court held that wholesale price was preferred over retail “when, in circumstances like the present, it is clearly the more accurate measure.” Illinois Cent., 281 U.S. at 65, 50 S.Ct. 180.

We granted the State's petition for review, which argues that the Court of Appeals' decision effectively stripped sentencing courts of broad statutory discretion to fashion appropriate restitution amounts.

Discussion

The restitution statute at issue, K.S.A. 21–4610(d) states:

“(d) In addition to any other conditions of probation, suspension of sentence or assignment to a community correctional services program, the court shall order the defendant to comply with each of the following conditions:

(1) Make reparation or restitution to the aggrieved party for the damage or loss caused by the defendant's crime, in an amount and manner determined by the court and to the person specified by the court....”

The parties both characterize the question before us as one of law over which this court has unlimited review. The Court of Appeals agreed. Hall, 45 Kan.App.2d at 301–02, 247 P.3d 1050.

We have previously noted that there are at least three standards potentially applicable in reviewing challenges to a restitution order. See State v. Dexter, 276 Kan. 909, 912–13, 80 P.3d 1125 (2003). Issues regarding...