U.S. v. Brock-Davis, 06-30565.

• Decision Date: 02 October 2007
• Docket Number: No. 06-30565.,06-30565.
• Citation: 504 F.3d 991
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Rose BROCK-DAVIS, Defendant-Appellant.
• Court: U.S. Court of Appeals — Ninth Circuit

504 F.3d 991

UNITED STATES of America, Plaintiff-Appellee, v. Rose BROCK-DAVIS, Defendant-Appellant.

No. 06-30565.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted August 7, 2007.

Filed October 2, 2007.

John Rhodes, Assistant Federal Defender, Missoula, MT, for the defendant-appellant.

Michael S. Lahr, Assistant United States Attorney, Helena, MT, for the plaintiff-appellee.

Appeal from the United States District Court for the District of Montana; Donald W. Molloy, District Judge, Presiding. D.C. No. CR 06-0021 DWM.

Before: WILLIAM C. CANBY, JR., A. WALLACE TASHIMA, and CONSUELO M. CALLAHAN, Circuit Judges.

TASHIMA, Circuit Judge:

This case is an appeal by Rose Brock-Davis ("Brock-Davis") of an order of restitution to cover, among other things, testing and cleanup costs for a motel room she occupied during the course of a conspiracy to manufacture methamphetamine. Restitution was imposed pursuant to the Mandatory Victims Restitution Act of 1996 ("MVRA"), 18 U.S.C. § 3663A. The parties agree that this statute applies and we accept their agreement that it applies. We address in turn Brock-Davis' multiple contentions.

Brock-Davis contends, first, that there was no statutory authorization for the restitution imposed, because the MVRA does not authorize remediation costs for a motel room. Second, she argues that the motel was not a "victim" of her offense as defined by the MVRA. Third, she contends that there was an intervening cause of the loss to the motel that prevents her from being liable for restitution. Fourth, she urges that inconsistencies in the amounts requested invalidate them. Fifth, she argues that she should not have been liable for lost income. Finally, she contends that she should not have been held liable for costs related to asbestos testing performed at the motel because these costs were not directly related to her offense of conviction. We have jurisdiction pursuant to 28 U.S.C. § 1291 and 18 U.S.C. § 3742(a). We affirm in part and vacate in part and remand.

In sum, Brock-Davis' first four contentions are unpersuasive but, as to the fifth and sixth issues, we conclude that the district court erred when it awarded restitution for the motel's lost income from the motel room and when it required restitution for the total amount of the unsegregated bill, which included asbestos-related costs. Accordingly, the restitution order will be vacated and remanded as to the issues of lost income and asbestos-related costs.¹

I. BACKGROUND

Brock-Davis was charged with conspiracy to manufacture methamphetamine in violation of 21 U.S.C. § 841(a)(1) and 846 (Count 1), and several fraud and identity theft counts (Counts 2 through 5). She pled guilty without a plea agreement to Counts 1 through 4, and Count 5 was dismissed with prejudice upon the government's motion. Count 1 charged that the conspiracy between Brock-Davis and her codefendant, Perry Carl Willingham, occurred "[o]n or about October 18, 2005, at or around Missoula, in the State and District of Montana."

As outlined at the plea colloquy, Brock-Davis and Willingham checked into a motel room in Missoula, Montana, on October 15, 2005. While they were absent from the room, on October 18, 2005, a housekeeper discovered such items as a white powdery substance on the bathroom vanity, and identification cards, in the room. These items were reported to the manager and then to police. Brock-Davis and Willingham were apprehended soon thereafter. In a search of the trunk of their car, police found precursors to the manufacture of methamphetamine such as cold tablets and beakers, and found a liquid that tested positive for methamphetamine. The police also found a microwave oven and other items in the motel room.

Willingham told police after he was arrested that they had "better check room 107 at the Aero Inn in Kalispell" ("Room 107"). This information was relayed to the Kalispell Police Department, and Kalispell detective Brian Fulford investigated this report. In Room 107, Fulford discovered an ice bucket with dark purple stains both on the bottom and floating in clear liquid, an empty box for a microwave oven, a white powdery substance, and other items he considered indicative of a meth lab. He called the Northwest Drug Task Force and advised them that there was a meth lab in Room 107. A motel clerk identified Brock-Davis as the individual who had rented the room.

The pre-sentence investigation report ("PSR") included a recommendation of restitution to the Aero Inn. At the sentencing, Brock-Davis objected to that recommendation. The government then called the owner and manager of the Aero Inn, Gilbert Bissell, to testify in support of restitution. Bissell testified about what was found in Room 107, the initial cleaning and testing of the room, and that he and his housekeeper spent two days cleaning the room with bleach, upon the advice of the police.

Bissell further testified that approximately one month later he received a letter from the Montana Department of Environmental Quality ("DEQ"), informing him that Room 107 was listed as a "hazardous meth site" on the basis of reporting from a law enforcement agency. The letter specified that Bissell could have the room delisted by having it decontaminated as provided in the Montana Administrative Rules. He forwarded to DEQ a copy of the police report and a record of the testing he had initially conducted, but DEQ responded by telling Bissell that the entity that had conducted the testing was not one of its recognized test agencies and that Bissell would have to have the room inspected and cleaned by a recognized agency. Bissell then selected WTR Consulting Engineers ("WTR") from DEQ's approved list to do the methamphetamine testing and cleanup work. After testing, cleaning, and some negotiations, Bissell, WTR, and DEQ created a scope of work, which DEQ approved. The room's adjoining doors were disposed of, along with furniture and other items, and Bissell received a letter from DEQ stating that Room 107 was no longer a hazardous site.

For purposes of restitution, Bissell claimed amounts in damages including miscellaneous furnishing replacement charges, and $7,186 to be paid to WTR. He testified that these costs were an accurate listing of the costs incurred in order to satisfy DEQ and to be able to rent Room 107. Bissell also estimated that the closure of Room 107 for cleaning resulted in lost revenue of $4,000, which he determined through a formula of the room being shut for approximately six months, with an occupancy rate during those winter months of 40 percent, and similar room rentals of $40-$50 per night. He also stated, however, that because the room was closed during the winter rather than the summer, he "had the luxury of not renting it." Bissell further allocated $120 in wages for the time that he and his housekeeper spent cleaning the room with bleach.

With respect to asbestos testing WTR conducted, the government conceded in its questioning at the sentencing hearing that "[n]o one is contending [that the asbestos testing that was done] has a direct relationship to a methamphetamine cooking operation," and elsewhere that the asbestos testing "was not directly related to the meth." In explanation of the asbestos costs, Bissell simply indicated that DEQ had requested asbestos testing and that if asbestos had been present, the motel would "have had to hire another special contractor to deal with the asbestos removal." Consistent with this testimony, the WTR reports reflected that asbestos testing and cleanup had been conducted which was "[i]n addition to the [m]eth cleanup and decontamination." In total, ceiling panels from Room 107 and from four other rooms and a storage area were tested for asbestos. Brock-Davis was ordered to pay $125 to replace ceiling tiles removed for asbestos testing, as well as the unsegregated WTR bill.

In support of her position in the sentencing proceedings, Brock-Davis relied on an affidavit and testimony from forensic scientist Gene Gietzen, who commented on the evidence collected and concluded that he "[could not] state within a reasonable degree of scientific certainty that th[e items found in Room 107] would constitute a meth lab." Gietzen also commented on alternative remediation techniques that WTR could have employed, but he admitted that the type of testing in which WTR engaged would be necessary to tell whether there had been a meth lab in a location. With respect to the asbestos testing, Gietzen assented to defense counsel's characterization that it had nothing to do with methamphetamine. Noting that the ceiling was tested for methamphetamine, moreover, Gietzen indicated that "asbestos was part of the construction, not related to any potential meth lab that could or could not have been in that room." (Emphasis added.)

The court sentenced Brock-Davis to a term of imprisonment of 32 months, 3 years of supervised release, and ordered restitution, which included $13,248.45 to the Aero Inn for the cleanup costs and a fraud claim.

II. STANDARD OF REVIEW

The legality of an order of restitution is reviewed de novo, and factual findings supporting the order are reviewed for clear error. United States v. Hackett, 311 F.3d 989, 991 (9th Cir.2002); United States v. Stoddard, 150 F.3d 1140, 1147 (9th Cir.1998). Provided that it is within the bounds of the statutory framework, a restitution order is reviewed for abuse of discretion. Hackett, 311 F.3d at 991; Stoddard, 150 F.3d at 1147.

III. DISCUSSION

A. Statutory Authorization

Brock-Davis argues, first, that the district court erred in imposing restitution as to Room 107 because the MVRA does not authorize restitution to remediate a motel room. Courts cannot order restitution without statutory authorization, United States v. DeSalvo, 41 F.3d 505, 511 (9th Cir.1994); United States v. Hicks, 997 F.2d 594, 600 (9th Cir.1993), and "`[the] starting point in every case involving...