Opinion
No. 64194-8-I.
Filed: November 22, 2010. UNPUBLISHED OPINION
Appeal from a judgment of the Superior Court for King County, No. 08-1-04566-4, Andrea A. Darvas, J., entered October 1, 2009.
Affirmed in part, reversed in part, and remanded by unpublished opinion per Spearman, J., concurred in by Leach, A.C.J., and Lau, J.
April Davis appeals from the restitution order entered following her plea of guilty to the crime of attempt to file a false insurance claim. Because the court ordered restitution for some losses merely connected with, but not resulting from, Davis's crime and because the evidence does not substantiate the amount of restitution awarded for legal fees we reverse in part, and remand.
Davis's conviction stems from fraudulent activities she engaged in while employed as the office manager of Dr. Pamela Butterfield's dental practice. During a five-year period, in an apparent effort to appease her boss and patients, Davis engaged in a variety of conduct to fraudulently settle patient accounts or make it appear that patient accounts were paid in full. One way she did this was to file false insurance claims and appropriate those funds to patient bills. She also accomplished this by manipulating the books. For instance, Davis would reduce a patient's bill and call it an "insurance adjustment," a "posting error," or a finance charge adjustment. At other times, Davis would simply delete from the records dental treatments Dr. Butterfield had administered.
Dr. Butterfield eventually discovered irregularities in Davis's bookkeeping and contacted the police. An internal audit of the accounts revealed that Davis had submitted over 100 false insurance claims.
Davis was charged with one count of filing a false insurance claim and pleaded guilty to the reduced charge of attempt to file a false insurance claim. As a part of her guilty plea, Davis acknowledged that between June 24, 2002 and February 12, 2007, she took a "substantial step toward the commission of the crime of Making False Claims." Davis also agreed to pay $40,000 toward restitution prior to entering her plea, and to pay additional restitution in an amount to be determined by the court at a later restitution hearing.
The court imposed a twelve-month sentence, suspended upon the condition that Davis complete 480 hours of community service. After several hearings, the court additionally imposed over $230,000 in restitution. Of this total amount, Davis challenges approximately $213,000 awarded to Dr. Butterfield. Davis argues that certain amounts awarded to compensate Dr. Butterfield for losses caused by her manipulation of patient accounts were not sufficiently causally related to the crime. Davis also challenges the amount of restitution awarded for Dr. Butterfield's investigative, forensic accounting, and legal costs because the designated amounts are not supported by sufficient evidence in the record and are disproportionate to the harm. Finally, Davis claims there was insufficient evidence that Dr. Butterfield's patients would have paid their bills in full if the crime had not occurred. However, because Davis fails to provide analysis or legal authority in support of this argument, we decline to address it. See RAP 10.3(a)(6); see also Holland v. City of Tacoma, 90 Wn. App. 533, 538, 954 P.2d 290 (1998) ("Passing treatment of an issue or lack of reasoned argument is insufficient to merit judicial consideration.").
The court had statutory authority to impose restitution as a condition of Davis's suspended sentence under RCW 9.92.060(2)(b) which permits a court to order a defendant "to make restitution to any person or persons who may have suffered loss or damage by reason of the commission of the crime in question." Courts have broad discretion when determining the amount of restitution, and we review restitution orders for an abuse of that discretion. State v. Kinneman, 155 Wn.2d 272, 282, 119 P.3d 350 (2005); State v. Davison, 116 Wn.2d 917, 919, 809 P.2d 1374 (1991). If a defendant disputes the restitution amount, the State must prove the damages by a preponderance of the evidence. Kinneman, 155 Wn.2d at 285. If restitution is ordered to compensate for a claimed loss, the amount of the loss must be established by substantial credible evidence. State v. Griffith, 164 Wn.2d 960, 965, 195 P.3d 506 (2008).
A trial court may order restitution "only for losses incurred as a result of the precise offense charged." State v. Miszak, 69 Wn. App. 426, 428, 848 P.2d 1329 (1993). In other words, the trial court can order restitution only if the crime caused the loss. Griffith, 164 Wn.2d at 965-69. Losses are causally connected if, but for the charged crime, the victim would not have incurred the loss. State v. Tobin, 161 Wn.2d 517, 524, 166 P.3d 1167 (2007).
The restitution order includes approximately $53,000 as compensation to Dr. Butterfield for "[t]heft loss." Of this total, $32,000 was designated for losses caused by Davis's conduct of deleting treatments, reducing patient accounts and falsely characterizing the reductions as described above. These losses do not follow from Davis's filing of false insurance claims.
The State claims that Davis's criminal conduct was the "but for" cause of all of the losses sustained by Dr. Butterfield. While it appears to be true that her various acts were fueled by the same motivation and accomplished the same end, the fact that all the acts were a part of a common scheme is an insufficient causal relationship to support restitution. Our courts require a more precise connection between the crime charged and the losses compensated. See State v. Woods, 90 Wn. App. 904, 907-08 (1998) (trial court cannot impose restitution based on a defendant's general scheme or acts merely connected with the crime charged, when those acts are not part of the charge). Accordingly, we reverse the portion of the restitution order awarding restitution of $32,253.59 for loss derived from Davis's manipulation of Dr. Butterfield's accounts not related to false insurance claims.
The restitution order also includes $158,000 to reimburse Dr. Butterfield for investigative costs, forensic accounting, and legal fees. Davis challenges the restitution ordered for investigative costs asserting that the investigation could have been accomplished more efficiently, the costs awarded were disproportionate to the harm caused by the crime, and the costs incurred were not causally related to the crime. We reject these arguments. It is pure speculation that the police or the prosecutor's office could have or would have conducted the investigation at lesser cost. The evidence clearly establishes the police advised Dr. Butterfield to consult a forensic accountant, who in turn, advised her to conduct the initial investigation internally because it would be more efficient. And as the trial court pointed out, even though the investigation uncovered both fraudulent bookkeeping as well as criminal insurance fraud, once a crime was suspected, Dr. Butterfield was obligated to review all the records. Thus, the entire investigative cost was a direct consequence of the crime. Ample evidence supports the basis for the restitution amount ordered for investigative costs.
With respect to legal fees however, while funds expended by a victim, including attorney fees, are awardable as restitution if they are a direct result of the crime, the evidence here does not establish the basis for the $20,000 ordered as restitution for legal costs. See Kinneman, 155 Wn.2d at 287-88. Dr. Butterfield testified only generally that legal counsel was "guiding us through this process." In June 2009, the State listed approximately $8,000 in legal fees as a line item on a list of Dr. Butterfield's "unrecovered property." At the second restitution hearing two months later, the State amended that line item to $19,000 in legal fees, without explanation.
The State argues that Davis cannot challenge the restitution amount or the basis for the increase because she did not object to the amended attachment listing the increased amount of fees and, more generally, because her objections focused on the legal basis for restitution, not the restitution amounts. But Davis did not stipulate to the amount of restitution and at the final restitution hearing, she clearly objected to both the legal basis and amount of restitution and expressly objected to the $20,000 awarded for legal fees.
On this record, we cannot tell precisely what the funds were expended for or whether the entire amount was causally related to the crime. The bare request for fees, unsupported by any documentation or sufficient explanation, does not constitute sufficient credible evidence to establish the restitution amount. Griffith, 164 Wn.2d at 965. Therefore, we reverse the portion of the restitution order awarding $19,263 for legal fees and remand.
It also appears that Dr. Butterfield filed a civil case against Davis in 2009. It is unknown whether any fees awarded here as restitution were connected to that case.
On remand, the court should adjust the restitution order to exclude the $32,253.59 ordered to compensate for losses that were not a direct consequence of Davis's crime and may consider additional evidence to determine the amount of legal costs incurred as a result of Davis's crime. We affirm the restitution order in all other respects.
In Griffith, 164 Wn.2d at 968, the court determined that new evidence could not be considered at the defendant's restitution hearing on remand because doing so would conflict with the requirement under the Sentencing Reform Act (SRA) that restitution must be set within 180 days of sentencing. RCW 9.94A.753(1). Restitution in this case, however, was not authorized by the SRA, but by RCW 9.92060(2), which imposes no statutory time limit.
WE CONCUR: