Opinion
No. 2010 CA 00039.
DATE OF JUDGMENT ENTRY: December 17, 2010.
Appeal from the Licking County Court of Common Pleas Case No. 09 CR 00633.
AFFIRMED IN PART; REVERSED IN PART; JUDGMENT MODIFIED.
Stephanie G. Gussler, for Defendant-Appellant.
Earl L. Frost, for Plaintiff-Appellee.
Before: Hon. Sheila G. Farmer, P.J. Hon. John W. Wise, J. Hon. Patricia A. Delaney, J.
OPINION
{¶ 1} Defendant-Appellant, Joseph McClain, appeals an order of restitution imposed by the Licking County Court of Common Pleas.
{¶ 2} On December 8, 2009, Appellant pled guilty by way of a Bill of Information to 25 counts of Grand Theft in violation of R.C. 2013.02. Each count is a felony of the fourth degree. The charges arose from Appellant's participation in a mortgage fraud scheme.
{¶ 3} At the plea hearing, the prosecutor presented the following facts:
{¶ 4} "* * * back in around 2007 the Newark Police Department began an investigation in the activities of the defendant and his company. A subsequent investigation found that the defendant had obtained and sold real estate and had obtained moneys from various individuals during his business practice.
{¶ 5} "Further, it revealed that when obtaining the aforementioned property or selling the aforementioned real estate, the defendant knowingly deceived the individuals he dealt with by making false or misleading representations, by failing to disclose material facts, by withholding material information, by other conduct that created, confirmed, or perpetuated a false impression as to value, state of mind, or other objective or subjective fact.
{¶ 6} "Now, there are 25 counts here. I'm going to break them down into three categories. The victims involved in this case can be described as being investors, sellers, and buyers."
{¶ 7} December 8, 2009 Hearing, T. at 16-17.
{¶ 8} The prosecutor went on to explain that Appellant took money from investors and represented that he would use that money to fix up various properties he owned and then resell the properties at a profit. He represented to investors that their money was secured by liens on the properties. However, Appellant spent the money on personal purchases and business expenses.
{¶ 9} Sellers either believed the Appellant had purchased their home or believed that the Appellant was going to help them sell their homes. In regards to the former, the sellers signed their homes over to the Appellant, moved out and Appellant took over the home and rented it out to others. Appellant represented he had paid off the seller's mortgage and they were no longer responsible for the home when, in fact, the mortgage wad never paid off and remained in the names of the victims. The other sellers believed Appellant was going to help them sell their homes and Appellant made representations that he would make their mortgages payments on time to prevent late fees from accruing, however, the Appellant was late on mortgage payments and in some cases even failed to make mortgage payments.
{¶ 10} Some buyers entered into rent-to-own or land contracts with Appellant when Appellant did not own the homes or did not disclose the investor liens or second mortgages on the homes. Appellant also failed to make the mortgage payments or pay off mortgages on properties with the money he received from the renters and/or buyers
{¶ 11} On December 22, 2009, the trial court sentenced Appellant to prison for a total of 4 years, 11 months. The issue of restitution was set for hearing on February 1, 2010. Following the restitution hearing, the trial court ordered Appellant to pay a total of $ 921,821.02 to the victims involved in Appellant's business activities.
{¶ 12} Appellant raises one Assignment of Error:
{¶ 13} "I. THE TRIAL COURT ERRED BY FAILING TO ESTABLISH THE AMOUNT OF RESTITUTION TO A DEGREE OF CERTAINTY WHICH REFLECTS A REASONABLE RELATIONSHIP TO THE LOSS SUFFERED.
I
{¶ 14} Appellant generally argues that certain victims in this matter failed to provide adequate documentation of loss and/or proximate relation to the commission of the offense or there exists future events that will determine loss, if any.
{¶ 15} R.C. 2929.18(A)(1) permits a trial court, as part of a sentence, to order restitution to the victim of the offender's crime in an amount based on the victim's economic loss. "Economic loss" is defined as "any economic detriment suffered by a victim as a direct and proximate result of the commission of an offense and includes * * * any property loss * * * incurred as a result of the commission of any offense." R.C. 2929.01(L). The trial court may base the amount of restitution it orders on "an amount recommended by the victim, the offender, a presentence investigation report, estimates or receipts indicating the cost of repairing or replacing property, and other information, provided that the amount the court orders a restitution shall not exceed the amount of the economic loss suffered by the victim as a direct and proximate result of the commission of the offense." R.C. 2929.18(A)(1).
{¶ 16} A court's order of restitution must be supported by competent, credible evidence. State v. Warner (1990), 55 Ohio St.3d 31, 69. This Court reviews the trial court's award of restitution under an abuse of discretion standard. State v. Lacey, 5th Dist. No. 2006-CA-115, 2007-Ohio-6110. A trial court abuses its discretion when it orders restitution in an amount, which has not been determined to bear a reasonable relationship to the actual loss suffered as a result of the offense for which the defendant was convicted. Id. at ¶ 25, citing State v. Williams (1986), 34 Ohio App.3d 33, 34, 516 N.E.2d 1270.
{¶ 17} At hearing, 41 victims claimed entitlement to restitution, some were married couples. The trial court award restitution to each victim based upon the separate counts of the Bill of Information. The Appellant stipulated to some amounts. The trial court did not order restitution as to 3 individuals: Mary and James Jewell (count 6) and Kim Richards (count 23). On appeal, Appellant only challenges the restitution awards made to 22 victims, as follows:
{¶ 18} Mary Kay Andrews (count 2): $79,659.80
{¶ 19} David Mohr (count 3): $10,000.00
{¶ 20} John and Sharon Wallace (count 4): $11,799.00
{¶ 21} Ron and April Gillham (count 5): $10,200.00
{¶ 22} Albert and Ethel Cogam (count 8): $6,225.00
{¶ 23} William and Kelly Hamilton (count 9): $9,700.00
{¶ 24} Amy and Brian Wolford (count 10): $75,200.00
{¶ 25} William and Melissa Hieronimus (count 14): $105,633.82
{¶ 26} Benjamin and Carolyn Burkam (count 15): $126,000.00
{¶ 27} Laura McClain (count 16): $56,158.81
{¶ 28} Daniel and Shannon Edwards (count 18): $3,500.00
{¶ 29} Melody Bader (count 19): $13,000.00
{¶ 30} We will separately address Appellant's contention as to each restitution award.
{¶ 31} Mary Kay Andrews: Ms. Andrews entered into an agreement with Appellant to purchase her home. At that time, the home was subject to a first mortgage and second mortgage. In addition, Appellant executed a Promissory Note in the amount of $4,400 to reimburse Ms. Andrews for the cost of installing a new chimney. Appellant's "plan to relieve" Ms. Andrews of her property and mortgages failed and ultimately a foreclosure action was filed. She was able to sell the property in 2009 for $140,000. She testified she incurred a loss of $27,088 in the sale of the home and incurred attorney fees, court costs, settlement costs and interest, all totaling $60,339.40. However, the trial court erroneously awarded $79,659.80, which is not supported by the evidence. Accordingly, this Court modifies the restitution order in favor of Andrews (count 2) to reflect $60,339.40 as the proper amount.
{¶ 32} David Mohr: Mohr entered into an option to purchase a home (owned by Ms. Andrews) and paid Appellant $10,000 for the option and paid monthly rent in the amount of $1,500. Mohr was unable to purchase the property because Appellant did not own the property and sought return of the $10,000. Appellant argues Mohr was not entitled to $10,000 because he missed a few months of rental payments, however, the evidence presented shows he caught up on the payments in subsequent months and was current on rent until the identity of the true owner, Mary Andrews, was discovered. He then paid rent to Ms. Andrews although he was ultimately evicted from the home by Ms. Andrews.
{¶ 33} John and Sharon Wallace: The Wallaces invested $10,000 in return for a Promissory Note from Appellant which was secured by a mortgage on one of Appellant's properties. According to the terms of the Note, interest was to accrue at a rate of 14% per annum. The Wallaces sought return of the $10,000, plus interest in the amount of $1, 799. The trial court awarded $11,799 although Appellant now claims the interest was speculative. However, the terms of the Note reflect Appellant's agreement to this interest rate.
{¶ 34} Ron and April Gillham: The Gillhams also invested $10,000 in return for a Promissory Note from Appellant. Ms. Gillham withdrew $10,000 from a CD because Appellant told her it was worth paying the penalty for withdrawing the CD since she was going to get 14% interest on the Note. She paid a penalty of $200 for the early withdrawal. The trial court awarded $10,200. Appellant claims Ms. Gillham failed to produce documentation as the early penalty. However, we find the unrebutted testimony of the victim was sufficient on this issue. R.C. 2929.18(A)(1) allows the trial court to rely upon the amount of restitution recommended by the victim, and does not require written documentation.
{¶ 35} Albert and Ethel Cogan: The Cogans entered into an installment land contract with Appellant for the sale of their home. Appellant agreed to purchase the home for $135,000, payable in monthly installments of $1,079 until paid in full. The contract provides that the Appellant was responsible for all repairs and maintenance of the property. When the Cogans regained possession of their home, the contract was in arrears $2,000 and the home was in need of repairs which totaled $4,225. Appellant claims the Cogans failed to produce documentation as to these amounts. However, we again find the testimony of the victim was sufficient on this issue. Appellant also challenges the credibility of Ms. Cogan's testimony; however, the trial court is the in best position to judge credibility and credited Ms. Cogan's testimony.
{¶ 36} William and Kelly Hamilton: The Hamiltons entered into an option to purchase a home (which actually belonged to the Cogans) and paid Appellant $2,000 for the option and paid monthly rent in the amount of $1,195. Ms. Hamilton testified that she would have paid only $600 in rent had she not entered into the option contract. The Hamiltons resided in the home for 7 months and sought the difference in rent ($595 x 7=$4,195), in addition to recovery of the $2,000 due to their inability to purchase the home as a result of Appellant's actions. This amount totals $6,195. However, the trial court erroneously awarded $9,700, which is not supported by the evidence. Accordingly, this Court modifies the restitution order in favor of the Hamiltons (count 9) to reflect $6,195 as the proper amount.
{¶ 37} Amy and Brian Wolford: The Wolfords entered into an agreement with Appellant to sell their home. Appellant sold the home for $90,000 but took the money that was paid for the home and did not pay off the mortgage. Therefore, the Wolfords remain liable for the mortgage which at the time of hearing was $73,840. The Wolfords are over 120 days behind on the mortgage and it has negatively affected their credit rating. They anticipate the home will go into foreclosure and that the home will sell at auction. Amy Wolford conceded she does not know the exact amount of their economic loss. The trial court awarded the Wolfords $75,200, which is not supported by the evidence and is speculative. Accordingly, this Court vacates the restitution order in favor of the Wolfords (count 10).
{¶ 38} William and Melissa Hieronimus:
{¶ 39} Benjamin and Carolyn Burkam:
{¶ 40} Laura McClain:
{¶ 41} Daniel and Shannon Edwards:
{¶ 42} Melody Bader:
Delaney, J. Farmer, P.J. and Wise, J. concur.
JUDGMENT ENTRY
For the reasons stated in our accompanying Memorandum-Opinion on file, the judgment of the Licking County Court of Common Pleas is affirmed. Costs taxed to Appellant.