The Ohio Supreme Court today clarified the authority of a trial court to order restitution in a criminal case. While the trial court has discretion to order restitution, the legislature has specified that the amount awarded cannot be greater than the economic loss suffered as a “direct and proximate result” of the commission of the offense.

In a 5-2 decision authored by Justice Terrence O’Donnell, the court reversed a decision by the Eighth District Court of Appeals affirming an order to pay $63,121 in restitution to investigate and appraise the value of stolen property.

Daniel Lalain had worked as an engineer with Aero-Instruments, a Cleveland company that designs aviation and aerospace components such as air-speed and altitude sensors. In June 2008, he resigned without notice, taking electronic files copied from his work computer as well as duplicates of documents from his office files. In addition, he retained two probes that he had previously taken home for testing.

The Cuyahoga County Grand Jury then indicted Lalain for first-degree felony theft, alleging that he had stolen property allegedly valued at $1 million or more, but he subsequently pleaded guilty to an amended indictment for fifth-degree felony theft of property valued at $500 or more but less than $5,000. At the plea hearing, the trial court notified Lalain of the potential criminal penalties to which he would be subject, including a possible requirement that he make restitution, but it never specified any amount.

Three days before the sentencing hearing, Aero-Instruments submitted a letter asking the court to order Lalain to pay restitution of $55,456 to cover the time the company’s employees had spent investigating his theft, and an additional $7,665 to cover the costs of a forensic audit, for a total restitution award of $63,121. At the sentencing hearing, Lalain’s attorney disputed the amount for the costs of the forensic audit, arguing that those costs were not an economic loss caused by Lalain’s theft offense but were rather a discretionary cost that Aero had chosen to incur in connection with its abandoned civil lawsuit. After hearing contrary arguments from the prosecutor, the court sentenced Lalain to a term of community control and ordered him to pay $63,121 in restitution. Lalain appealed to the Eighth District Court of Appeals, which affirmed the trial court in a 2-1 decision.

Lalain then sought and was granted Supreme Court review of three propositions of law challenging the restitution award, and the court also accepted the conflict question certified by the court of appeals: “Whether, despite the defendant’s failure to object, it is error for the trial court to order a defendant to pay an amount of restitution in the absence of a specific plea agreement and without a hearing or evidence substantiating the economic loss claimed by the plaintiff?”

In today’s ruling, in addition to applying the legislature’s directive that the amount of restitution is limited to economic loss that is a direct and proximate result of the commission of the offense, the court also held that “[a] trial court is required to conduct a hearing on restitution only if the offender, victim, or survivor disputes the amount of restitution ordered.”

In writing for the court, Justice O’Donnell stated, “although the statute allows the court to base the amount of restitution on an amount recommended by the victim or the offender, a presentence investigation report, estimates or receipts indicating the cost of repairing or replacing property, and other information, it does not provide restitution for the costs of preparing such a report,” and hence restitution could not include the cost of the forensic audit report.

The majority also determined that the trial court should have conducted a hearing after the defense disputed the amount of the restitution, and it dismissed the conflict question because the factual premise of the certification question was not supported by the record

Joining Justice O’Donnell in the majority were Justices Paul E. Pfeifer, Sharon L. Kennedy, Judith L. French, and William M. O’Neill.

Justice Judith Ann Lanzinger concurred in part and dissented in part. Her opinion was joined by Chief Justice Maureen O’Connor.

Justice Lanzinger wrote that although she agreed with the remand for a restitution hearing, she would answer the certified question by holding that “restitution is limited to the amount referred to in the theft offense to which the defendant enters a plea unless the defendant agrees to a higher amount as part of the plea agreement.”

In her view, Crim.R. 11(C)(2)(a) states that for a plea to be voluntary a defendant must understand the maximum penalty, which potentially includes restitution. Because Lalain pled to a fifth-degree felony theft offense, that by its definition states the amount involved concerns stolen property valued between $500 and $5,000.

“Nothing prevents the state from requiring ‘full restitution’ in a greater amount than the theft offense to which a plea has been taken. The defendant must know what maximum consequences are when giving up rights and entering a guilty plea.”

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2012-0302 and 2012-0408. State v. Lalain, Slip Opinion No. 2013-Ohio-3093.
Cuyahoga App. No. 95857, 2011-Ohio-4813.  Judgment reversed and cause remanded.
Pfeifer, O’Donnell, Kennedy, French, and O’Neill, JJ., concur.
O’Connor, C.J., and Lanzinger, J., concur in part and dissent in part.
Opinion: http://www.supremecourt.ohio.gov/rod/docs/pdf/0/2013/2013-Ohio-3093.pdf

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