Opinion
A165504
08-04-2023
In re A.F., a Person Coming Under the Juvenile Court Law. v. A.F., Defendant and Appellant. THE PEOPLE, Plaintiff and Respondent,
NOT TO BE PUBLISHED
(Contra Costa County Super. Ct. No. J1800179)
RICHMAN, ACTING P.J.
Minor A.F. challenges the condition of her probation requiring her to pay victim restitution in the amount of $17,028 after she admitted to organized retail theft of merchandise from a Lululemon store. She argues the juvenile court abused its discretion by ordering restitution for claimed economic losses not supported by substantial evidence. Alternatively, she contends the juvenile court abused its discretion by ordering her to pay restitution for the retail value of the stolen items, and by allowing Lululemon to retain ownership of the items. We find merit in some of these contentions, and so will reverse the restitution order and remand for a new hearing.
BACKGROUND
According to the probation officer's report, on October 13, 2021, then 16-year-old A.F. and four individuals entered a Lululemon store in Corte Madera, grabbed as much merchandise as they could hold, and ran out of the store. One of the items contained a hidden tracking device, and Lululemon tracked the device to a location in San Francisco. San Francisco Police officers went to the location and found five individuals, including A.F., in a car with the Lululemon merchandise. All five people were arrested.
A.F. was over six months pregnant at the time. Due to her pregnancy, she was transported to a hospital and medically cleared before being booked into Marin County Juvenile Hall.
On October 14, 2021, the Marin County District Attorney filed a juvenile wardship petition (Welf. &Inst. Code, § 602), alleging A.F. committed felony burglary (Pen. Code, §§ 459, 460, subd. (b); count one) and misdemeanor organized retail theft (id., § 490.4, subd. (a)(2); count two).
Further undesignated statutory references are to the Welfare and Institutions Code.
At the time, dependency proceedings (§ 300 et seq.) brought on behalf of A.F. were also pending.
On November 15, pursuant to a negotiated resolution, A.F. admitted to count two, in exchange for the dismissal of count one. The matter was transferred to Contra Costa County, A.F.'s county of residence, for disposition.
On January 7, 2022, the juvenile court held a dispositional hearing and placed A.F. on non-wardship formal probation (§ 725) for six months. As a condition of probation, the court ordered A.F. to pay restitution to Lululemon in an amount to be determined at a future hearing.
On April 12, the probation department filed a "Restitution Supplemental Report," recounting its communications with investigators from Lululemon's Asset Protection department. One of its loss prevention officers, Matthew Kell, "reported that while all merchandise stolen in the offense had been recovered, it was unable to be returned to the store for sale, due to smelling heavily of marijuana. Lululemon had agreed to donate the merchandise to a women's shelter in Marin County, however, Mr. Kell had not yet received confirmation for this, as the recovered merchandise is still being held by Central Marin Police Department as evidence.... As Asset Protection is unable to access the recovered stolen merchandise to scan for an itemized list, Mr. Kell was unable to provide . . . any further documentation for their claim."
On May 10, the court authorized A.F.'s attorney to inspect the stolen items held at the police station.
On June 3, the court held a contested restitution hearing. The parties stipulated, in writing, to the following facts, which were based on statements from loss prevention officer Kell:
"Value of the items taken [is] $17,028.
"All stolen items are currently at the Central Marin Police Authority evidence room.
"Items initially smelled of marijuana.
"As of May 2022, items no longer smell like marijuana.
"Lulu states they cannot return items to their shelves due to the smell of marijuana.
"Lulu agreed to donate all items to a women's shelter.
"Lulu gets tax write off and good publicity for donating to women's shelter."
"Lulu would get bad publicity for returning items to shelves that were stolen and smoked around."
The stipulation then concludes with a paragraph quoting an email from the prosecutor to A.F.'s attorney, which in turn quotes statements from loss prevention officer Kell:" 'Technically it could be used and resold, however it wouldn't be a good look for Lululemon as a brand to re sell [sic] items that were taken as part of a theft and smoked around. Lulu does sometimes reshelf items for sale that have been recovered from a theft if they were recovered shortly in time after and have not been smoked around. Given the gap in time between the offense and now, inventory items have cycled through and items get discontinued. Some items go to the outlet store where they are discounted. Ultimately, even if a case where there's no smell of MJ, it would be up to the individual stores to determine what is re-shelved."
The court accepted the stipulation and heard arguments from the parties. A.F.'s attorney stated that in the month before the hearing, she went to the Central Marin Police Authority, examined and itemized the Lululemon merchandise, and personally smelled each item. The stolen items consisted of 153 pairs of leggings, two raincoats, and one puffy vest. Counsel did not smell any marijuana on the items. Nor did she see any physical damage to them. Except for two pairs of leggings, the items still had price tags attached to them.
The court asked the prosecutor whether he was comfortable with A.F.'s attorney effectively "testifying" as to her observations during her inspection of the items. The prosecutor stated that in the interests of judicial efficiency, and because the parties were already stipulating to the substance of A.F.'s attorney's statements, he agreed to "waive any irregularities" at the hearing.
A.F.'s counsel argued that because the items no longer smelled like marijuana, Lululemon should be able to restock them, and therefore, it "should not get the $17,028 that [it is] requesting." While the loss prevention officer claimed, "that maybe it's not good press if they had been smoked around," counsel argued, "they no longer smell like marijuana, and I don't think there's any sort of notes any time anybody buys [L]ululemon leggings about where they had been before. And, in fact, lots of stores accept returns with the tags on the items. [¶] I can go to [L]ululemon right now, buy a legging, and then eventually return it . . . within the time period, and no one knows what I had done with that legging when it was in my possession." Counsel added that the items were in the possession of A.F. and her coresponsibles for less than one hour. Additionally, counsel attempted to refute the loss prevention officer's suggestion that the items may have been discontinued. Counsel presented screenshots of Lululemon's website, which showed that the same type of leggings that had been stolen were being sold at the same prices as when they were initially seized by police.
The prosecutor argued among other things that Lululemon should not be forced to resell the stolen items: "So [L]ululemon, they have a brand that they have to protect.... [W]hat Mr. Kell has told me, is that it would not be a good look for their brand to resell these items that were part of a theft and smoked around, and that . . . even if they . . . don't smell of marijuana, at one point, did smell of marijuana, if that came out, that would be detrimental to their brand."
The court then stated its initial thoughts, noting that there were unknown factors that remained in this case: "[W]e have no industry representative or anybody who's truly an expert in this area who's looked at the items and . . . tell us that the items are reshelved. [¶] . . . [¶] But assuming . . . the items in evidence-and it's somewhat indefinite as to when they may be returned. And at that time, it's reasonable that somebody would have an opinion as to whether or not they have any value at all." The court continued, "[W]hen these things were taken away, subsequently recovered by police officers in an altered state, albeit a state that doesn't-it appears may not have been-resulted in permanent damage to the items, whether that makes the particular items unmarketable within the industry, given these particular circumstances." The court then stated, "I didn't hear any arguments that, possibly, at this point, I could reserve restitution, since there are certain factors that are things that haven't occurred yet, whether or not, truly, [L]ululemon is not gonna sell these things again."
Counsel for A.F. then requested the court to consider "reserving" the restitution issue "until they figure it out." The prosecutor opposed the request, arguing the court should issue an order that day, in light of the fact that A.F.'s probation term was soon to expire.
The court commented that "it's quite difficult" to discern the loss to the victim in this case and posed the following open-ended questions: "Are they gonna resell? Do they smell of marijuana? Is it practice within the industry to sell a product, perhaps, a year-and-a-half, two years later? Would the styles have changed? Would this be a total loss?" It then stated, "And not to advise anybody, but I wouldn't have rushed to a determination at this point as to the value of the restitution."
A.F.'s counsel again requested a continuance, specifically to the week before A.F.'s probation term was set to expire in early July, so that counsel could obtain more information regarding the status of the items in evidence. Apparently, the items were being held in police custody at the request of a defense attorney in a separate case involving one of A.F.'s co-responsibles. The prosecutor again opposed the continuance request.
Following this argument, the court declined to continue the hearing and ordered A.F. to pay restitution, jointly and severally with her coresponsibles, in the amount of $17,028. The court, however, stated that "if something happens between now and when [A.F.] gets off [section] 725 [probation], . . . we can possibly revisit this."
On June 10, relying on People v. Chappelone (2010) 183 Cal.App.4th 1159 (Chappelone), A.F. requested that the court reconsider its restitution order, and issue a new order either lowering the amount to the wholesale value of the items or releasing the merchandise to her for disposal to offset the amount owed Lululemon.
On June 14, after holding a hearing, the court denied the request for reconsideration.
This timely appeal followed.
DISCUSSION
The Law
Section 730.6 governs victim restitution in juvenile cases. (In re Johnny M. (2002) 100 Cal.App.4th 1128, 1131.) "Section 730.6 parallels Penal Code section 1202.4, which governs adult restitution. [Citation.] Like Penal Code section 1202.4, section 730.6 . . . implement[s] the will of the electorate expressed when Article 1, section 28, subdivision (b) . . . was added to the California Constitution, that all victims of crime who suffer direct economic loss be compensated." (In re M.W. (2008) 169 Cal.App.4th 1, 4; § 730.6, subd. (a)(1).) Specifically, section 730.6 provides that "a victim of conduct for which a minor is found to be a person described in Section 602 who incurs an economic loss as a result of the minor's conduct shall receive restitution directly from that minor." (§ 730.6, subd. (a)(1).) Section 730.6 obligates the juvenile court to "order full restitution unless it finds compelling and extraordinary reasons for not doing so, and states them on the record." (Id., subd. (h)(1).)
Accordingly, a restitution order "shall be of a dollar amount sufficient to fully reimburse the victim or victims for all determined economic losses incurred as the result of the minor's conduct" (§ 730.6), including "[f]ull or partial payment for the value of stolen or damaged property." (Id., subd. (h)(1)(A).) "The value of stolen or damaged property shall be the replacement cost of like property, or the actual cost of repairing the property when repair is possible." (Ibid.)
"An order of direct victim restitution acts to make the victim whole, rehabilitate the minor, and deter future delinquent behavior [citations]...." (Luis M. v. Superior Court (2014) 59 Cal.4th 300, 305.) It "should compensate a victim for actual losses" (People v. Erickson (2018) 30 Cal.App.5th 243, 245), and not "to provide the victim with a windfall." (Chappelone, supra, 183 Cal.App.4th at p. 1172.)
We review a restitution order for abuse of discretion. (Luis M. v. Superior Court, supra, 59 Cal.4th at p. 305.) However, it has been said that "[t]he abuse of discretion standard is not a unified standard; the deference it calls for varies according to the aspect of a trial court's ruling under review." (Haraguchi v. Superior Court (2008) 43 Cal.4th 706, 711-712, fns. omitted.)" '[W]here the specific issue is whether a court has the authority to issue restitution, we review that question of law independently. [Citation.] . . . [W]here the specific issue is whether the court's factual findings support restitution, we review those findings for substantial evidence. [Citations.]' [Citation.]" (In re S.E. (2020) 46 Cal.App.5th 795, 803; accord, Haraguchi v. Superior Court, supra, 43 Cal.4th at pp. 711-712.)
"Under the substantial evidence rule, a reviewing court will defer to a trial court's factual findings to the extent they are supported in the record." (People v. Butler (2003) 31 Cal.4th 1119, 1127; accord, People v. Jones (1990) 51 Cal.3d 294, 314.) However, deference is not abdication, and substantial evidence is not synonymous with any evidence. (See People v. Superior Court (Jones) (1998) 18 Cal.4th 667, 681, fn. 3.) Evidence is substantial only if it" 'reasonably inspires confidence and is of "solid value." '" (People v. Morris (1988) 46 Cal.3d 1, 19, disapproved on another ground in In re Sassounian (1995) 9 Cal.4th 535, 543, fn. 5.) "By definition, 'substantial evidence' requires evidence and not mere speculation. In any given case, one 'may speculate about any number of scenarios that may have occurred .... A reasonable inference, however, "may not be based on suspicion alone, or on imagination, speculation, supposition, surmise, conjecture, or guess work. [¶] . . . A finding of fact must be an inference drawn from evidence rather than . . . a mere speculation as to probabilities without evidence." '" (People v. Cluff (2001) 87 Cal.App.4th 991, 1002, citing People v. Morris, supra, 46 Cal.3d at p. 21.)
"If there is no substantial evidence to support the award, and assuming no other rational explanation, the trial court will have obviously abused its discretion." (People v. Thygesen (1999) 69 Cal.App.4th 988, 993; accord, In re K.F. (2009) 173 Cal.App.4th 655, 661 ["No court has discretion to make an order not authorized by law, or to find facts for which there is not substantial evidence"].)
There Was No Substantial Evidence to Support the Restitution Award
A.F.'s first argument is that the juvenile court abused its discretion by ordering restitution for claimed economic losses not supported by substantial evidence. Lululemon sought restitution in the amount of $17,028, the total retail value of the stolen items, based on the theory that it "would get bad publicity for returning items to shelves that were stolen and smoked around."
The parties stipulated that the items previously smelled of marijuana smoke, but no longer did so as of the restitution hearing. Nonetheless, Lululemon's loss prevention officer stated that although" '[t]echnically, [the items] could be used and resold, . . . it wouldn't be a good look for Lululemon as a brand to re sell [sic] items that were taken as part of a theft and smoked around." Based on this explanation, the People argued that Lululemon should not be forced to resell the items. In so arguing, the People essentially maintained that the items were rendered worthless to Lululemon as a result of A.F.'s conduct. Consequently, the People asserted that Lululemon suffered a "total loss" and was entitled to recover the full retail value of the items. The juvenile court agreed with the People, awarding Lululemon the full amount sought.
A.F. contends the "court acted arbitrarily and capriciously by ordering that [she] pay for items when Lululemon had not yet suffered a loss." According to A.F., there was no substantial evidence to support the Lululemon's claim that it "would suffer a future loss if it retained and resold the merchandise." She asserts, "Although the parties' stipulation indicated that Lululemon would get bad publicity for restocking the merchandise, there was no evidence that the case had garnered any public attention or that the public would become aware of the proposed restock...." Thus, A.F. concludes that "[t]he conjecture that 'it would not be a good look for Lululemon' if somehow the public found out that the store restocked merchandise was a hypothetical scenario and not based [on] substantial evidence of an actual or future loss."
This argument is well taken. Lululemon's theory of restitution relied on the factual premise that the general public had or would become aware that the items in question had been stolen, exposed to marijuana smoke, and then restocked for resale. But, as A.F. contends, the People presented no evidence to suggest that the public had or would become aware of such facts. Indeed, at the hearings below, both the prosecutor and the court referred to the possibility of the public becoming aware of such facts as an "if." For example, the prosecutor stated that "even if [the items] don't smell of marijuana, at one point, did smell of marijuana, if that came out, that would be detrimental to their brand." (Italics added.) And, at the hearing on A.F.'s motion for reconsideration, the court stated, "I can imagine that when those items are offered and if it became public knowledge . . . [,] [t]hat would be a detriment to the merchandiser ...." (Italics added.) Moreover, as A.F.'s attorney suggested, the disclosure of such facts to the public was a tenuous possibility from a practical standpoint: "I don't think there's any sort of notes any time anybody buys [L]ululemon leggings about where they had been before. And, in fact, lots of stores accept returns with the tags on the items. [¶] I can go to [L]ululemon right now, buy a legging, and then eventually return it if . . . within the time period [to return], and no one knows what I had done with that legging when it was in my possession."
We thus agree with A.F. that Lululemon's theory of restitution was based on a "hypothetical scenario." Accordingly, we conclude the statements of Lululemon's loss prevention officer that "it wouldn't be a good look" to resell the items are not substantial evidence to justify the claim that Lululemon suffered a "total loss." (See People v. Cluff, supra, 87 Cal.App.4th at p. 1002 [" 'substantial evidence' requires evidence and not mere speculation"].) Although a victim is not required to provide an exact dollar amount of his or her losses to a certainty (People v. Ortiz (1997) 53 Cal.App.4th 791, 800), here the issue is not that the victim provided an uncertain or inexact amount, but that the victim did not present sufficient evidence to establish an economic loss. Rather than an actual loss, the juvenile court compensated Lululemon for a potential or theoretical loss. The court cannot base its restitution award on potential loss as opposed to actual loss. (See id. at pp. 798-799 [holding victim of a music counterfeiting scheme not entitled to recover for a "potential loss" in sales caused by the defendant's counterfeit music cassette tapes because the tapes had been recovered and therefore could not be sold by the counterfeiter].)
The People alternatively argue that even if the items were sellable, Lululemon nonetheless suffered an economic loss because "the style of the items was at least seven months old at the time of the restitution hearing...." The People rely on statements of Lululemon's loss prevention officer claiming that "given the gap in time between the offense and now, inventory items have cycled through and items get discontinued" and "[s]ome items go to the outlet store where they are discounted." Thus, the People maintain, "if the items were sold at a discounted price at an outlet store, the difference between the original price and the discounted price would still represent a loss to Lululemon as a result of [A.F.'s] conduct."
We are not persuaded. There was no evidence that the items had been discontinued. As the court and parties acknowledged at the hearing, the items remained indefinitely in evidence at the police station, and Lululemon had not had the opportunity to examine the items, much less make any determination that the items had been discontinued or otherwise should be valued at a discounted price. To the contrary, the People acknowledge "[A.F.'s] counsel provided screenshots from Lululemon's website showing that the stolen items were still being sold at the same prices as of the time of the [restitution] hearing." Thus, the People's claim that Lululemon suffered an economic loss based on the passage of time between the offense and the restitution hearing is also not supported by substantial evidence.
The Court Abused Its Discretion in Awarding Lululemon the Retail, Rather than Wholesale, Value of the Merchandise
A.F. argues that even if substantial evidence supports the determination of an economic loss, the juvenile court abused its discretion in awarding Lululemon the retail, rather than wholesale, value of the items. The People agree, as do we.
The parties properly observe that our decision in Chappelone, supra, 183 Cal.App.4th 1159 is controlling. In that case, an employee of Target and her husband pleaded guilty and no contest, respectively, to crimes related to taking merchandise from Target. (Id. at pp. 1163-1167.) At the time the items were stolen, many of them were significantly devalued. (Id. at pp. 1163-1165, 1178.) Under those circumstances, we held that awarding restitution based on the full retail value of the property was an abuse of discretion, explaining that "[m]ost of the stolen merchandise was never going to be sold to customers because it was, quite simply, unsellable." (Id. at p. 1178.)
However, in addition to the already devalued property, there were also some items that were new and sellable amongst the stolen property. (Chappelone, supra, 183 Cal.App.4th at p. 1179.) As to those items, we determined the proper valuation for them was their wholesale, rather than retail, value, reasoning "[t]hese were not unique products, but were mass-produced consumer goods that Target sold in abundance. Indeed, the fact that Target is a massive, nationwide retail store with a system for tracking goods suggests the items stayed in stock and no customer was ever deprived of a purchase." (Ibid.) Consequently, "there was no evidence that there was not a comparable replacement to sell to Target's customers," and therefore no evidence that the theft deprived Target of the profits of a sale. (Ibid.) Given this factual scenario, we held that the calculation of the value of the stolen goods, whatever their condition, should use their wholesale value as its starting point. (Id. at pp. 1178-1179.)
Likewise here. As A.F. asserts, both Target and Lululemon are large national retailers. Additionally, here, as in Chappelone, there is no evidence that the stolen items were "unique products." In fact, as noted, A.F. presented evidence that the same items were still being sold by Lululemon on its website at the time of the restitution hearing. As such, there is no evidence that the theft made it impossible for Lululemon to find comparable replacements for willing buyers, and therefore no evidence that the theft caused it to lose profits on the stolen items. Accordingly, we agree with the parties the juvenile court abused its discretion in ordering A.F. to pay the full retail value of the items as restitution.
A.F.'s Claim that the Court Erred in Allowing Lululemon to Retain the Items Is Premature
Finally, A.F. argues that the trial court wrongfully awarded Lululemon a windfall when it was allowed to recover the items themselves and also receive the full retail value of those items. A.F. asserts the court instead should have granted her request to have the items released to her so that she could offset the amount of restitution owed.
A.F. again relies on Chappelone, which held the trial court abused its discretion by awarding the full retail value for the items while also returning the items to Target. (Chappelone, supra, 183 Cal.App.4th at p. 1180.) This court explained that "a victim is not entitled to restitution for the value of property that was returned to him or her, except to the extent there is some loss of value to the property." (Ibid.) We stated that the trial "court could have allowed Target to retain the goods and ordered defendants to pay for the diminution in value, or it could have ordered defendants to pay Target for the value of the goods when stolen and then given the merchandise to defendants for disposal to offset the amount they owed Target. Which course the trial court should have chosen is not for us to dictate. But it is for us to say that ordering defendant to pay for the full value of the merchandise and giving all of the goods . . . was an abuse of discretion." (Id. at pp. 1181-1182.)
Citing Chappelone, A.F. argues that "Lululemon would receive a windfall by retaining possessory interest in the merchandise while receiving a restitution payment for the full retail price of the merchandise from A.F." The People counter that Chappelone is distinguishable because "Lululemon did not recover the stolen merchandise, which remained in evidence with the police."
Here, although the court at times assumed that the items would be released to Lululemon at some point, the fact remains it did not order the items to be returned to Lululemon. As discussed, the items were being held in evidence by police at the time of the restitution hearing, and it was unclear if and when they would be returned to Lululemon. Thus, at this juncture A.F.'s claim that Lululemon received a windfall by recovering the items is premature and not yet ripe for review.
DISPOSITION
The order requiring A.F. to pay $17,028 in victim restitution is reversed, and the matter is remanded for a new restitution hearing.
We concur: Markman, J. [*]
[*]Superior Court of Alameda County, Judge Michael Markman, sitting as assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.