State v. Ludlow , 353 P.3d 179 ( 2015 )

2015 UT App 146THE UTAH COURT OF APPEALS
STATE OF UTAH,
Plaintiff and Appellee,
v.
NAOMI LUDLOW,
Defendant and Appellant.
Opinion
No. 20140106-CA
Filed June 11, 2015
Fourth District Court, Provo Department
The Honorable James R. Taylor
No. 121402619
Douglas J. Thompson, Attorney for Appellant
Sean D. Reyes and Jeffrey S. Gray, Attorneys
for Appellee
JUDGE JAMES Z. DAVIS authored this Opinion, in which JUDGES
STEPHEN L. ROTH and KATE A. TOOMEY concurred.
DAVIS, Judge:
¶1 Naomi Ludlow appeals the district court’s order of
restitution in connection with her conviction for theft. We
reverse and remand for further proceedings.
BACKGROUND
¶2 In September 2012, Ludlow was charged with vehicle
burglary and theft. She pleaded guilty to the theft charge, and
the vehicle-burglary charge was dismissed. The State requested
that restitution be paid to the victim of the theft. Ludlow
objected to the State’s calculation of the restitution amount and
requested a hearing.
State v. Ludlow
¶3 At the restitution hearing on November 14, 2013, the State
presented testimony from the victim of the theft regarding the
items stolen from her vehicle. She testified that ‚a Gateway
laptop, a fourth generation iPod, a Droid X smartphone, [a]
Pioneer amp, . . . two Kicker [subwoofers], [a] Pioneer [stereo]
deck*,+ . . . some cash*,+ . . . and some name brand clothes‛ were
stolen. She also testified regarding the age and retail value of the
stolen items: her grandparents paid $1,500 for the laptop in 2009;
she paid $300 for the iPod six months before it was stolen; her
stepfather paid $300 for her smartphone a year before it was
stolen; the amplifier, the two subwoofers, and the stereo deck
were all ‚fairly new‛ and had retail values of $150, $200, and
$150, respectively; the cash totaled approximately $100; and ‚six
or seven shirts‛ and ‚four pairs of pants‛ that were ‚about a
year old‛ cost ‚around $40 to $50 *apiece+ brand new.‛1
¶4 Ludlow asserted that the victim had ‚overstate*d+ the
value of the items.‛ She requested that the court ‚downward
depart from‛ the amount requested by the State and also that the
court take into account that some of the items had been returned
to the victim. However, Ludlow did not put on any specific
1. The victim testified that she took ‚wear and tear‛ into account
when determining the value of the stolen items: ‚I just looked at
the year of the item and went back and looked at what the retail
price was back then and then I gave or take some because I knew
wear and tear on it and everything so . . . it’s just my best
estimation.‛ Nevertheless, her testimony regarding the
individual items indicated that the values she assigned reflected
either the price originally paid for the item or the ‚retail value‛
of the item. As Ludlow points out, the victim ‚gave absolutely
no indication‛ in her testimony regarding the individual items
that her estimates ‚were in any way accounting for
depreciation.‛ This was the district court’s impression as well:
‚The only testimony I have is the purchase price. . . . I don’t have
any evidence from which I can discount the values . . . .‛
20140106-CA 2 2015 UT App 146State v. Ludlow
evidence regarding the value of the stolen items. The district
court acknowledged that the stereo deck and some of the
clothing items were returned and reduced the requested
restitution by $350 to account for those items.2 But because
Ludlow had failed to contradict the State’s assertion of value, the
court used the purchase prices identified by the victim to
calculate the value of the remaining stolen items. Accordingly,
the district court ordered that Ludlow pay restitution in the
amount of $2,750.
ISSUE AND STANDARD OF REVIEW
¶5 Because the victim testified as to only the retail value of
the stolen items and the State put on no evidence of the items’
fair market values, Ludlow asserts that the evidence was
insufficient to support the district court’s calculation of
restitution. We ‚will not disturb a trial court’s restitution order
unless it exceeds that prescribed by law or [the trial court]
otherwise abused its discretion. A trial court will be deemed to
have abused its discretion only if no reasonable [person] would
take the view adopted by the trial court.‛ State v. Hight, 2008 UT
App 118, ¶ 2, 182 P.3d 922 (second alteration in original) (citation
and internal quotation marks omitted).
ANALYSIS
¶6 ‚In the calculation of . . . restitution, the victim is limited
to recovering only ‘pecuniary damages.’‛ State v. Brown, 2014 UT
48, ¶ 22, 342 P.3d 239 (quoting Utah Code § 77-38a-102(11)
(‚‘Restitution’ means full, partial, or nominal payment for
2. The district court assessed the total value of the clothing at
$400, based on the victim’s testimony, and reduced that amount
by half to account for the returned items.
20140106-CA 3 2015 UT App 146State v. Ludlow
pecuniary damages to a victim . . . .‛)). ‚Pecuniary damages‛
relating to property are calculated based on ‚the fair market
value of property taken, destroyed, broken, or otherwise
harmed.‛ Utah Code Ann. § 77-38a-102(6) (LexisNexis 2012).
‚Fair market value is measured by what the owner [of the
property] could expect to receive, and the amount a willing
buyer would pay to the true owner for the stolen item.‛ State v.
Greene, 2006 UT App 445, ¶ 11, 147 P.3d 957 (alteration in
original) (citation and internal quotation marks omitted).
Nevertheless, ‚the measure of damages is flexible, allowing trial
courts to fashion an equitable award to the victim.‛ State v.
Corbitt, 2003 UT App 417, ¶ 14, 82 P.3d 211; cf. Jenkins v.
Equipment Ctr., Inc., 869 P.2d 1000, 1004 (Utah Ct. App. 1994)
(holding that ‚*t+he primary objective in rendering an award of
damages for conversion[3] is to award the injured party full
compensation for actual losses‛ and that damages can therefore
‚be modified in the interest of fairness‛ (citation and internal
quotation marks omitted)). Thus, ‚*i+n some cases, a purchase
price may be appropriate to a determination of loss.‛ Corbitt,
2003 UT App 417, ¶ 15 (‚The appropriate measure of the loss or
damage to a victim is fact-sensitive and will vary based on the
facts of a particular case.‛).
¶7 For example, when considering the appropriate amount
of restitution to compensate a victim for the loss of a two-week-
old truck in State v. Corbitt, 2003 UT App 417, 82 P.3d 211, we
held that a district court did not exceed its discretion by using
the truck’s purchase price rather than the insurance company’s
much lower valuation of the truck. Id. ¶ 16. While it may have
3. Cases addressing damages in the context of civil conversion
actions are relevant to our analysis because pecuniary damages
in the restitution context are those damages ‚which a person
could recover in a civil action arising out of the facts or events
constituting the defendant’s criminal activities.‛ Utah Code Ann.
§ 77-38a-102(6) (LexisNexis 2012).
20140106-CA 4 2015 UT App 146State v. Ludlow
been unrealistic for the victim in Corbitt to expect to receive the
equivalent of the truck’s purchase price if he attempted to sell
the truck when it was two weeks old, it would also have been
unrealistic to expect that the victim would have sold his two-
week-old truck except under urgent necessity. And ‚the price at
which someone would sell under urgent necessity‛ is not an
appropriate measure of fair market value. State v. Gorlick, 605
P.2d 761, 762 (Utah 1979). Thus, purchase price was a more
equitable estimate of the truck’s value in that case—and of the
victim’s loss—than the insurance valuation. See Corbitt, 2003 UT
App 417, ¶ 16; see also State v. Ellis, 838 P.2d 1310, 1312 (Ariz. Ct.
App. 1992) (‚*T+here are instances when the fair market value of
the items stolen may not accurately reflect the victim’s loss. A
new car depreciates the moment it leaves the car lot and if it is
stolen soon after it is purchased, awarding the fair market value
of the car would not make the victim whole.‛).
¶8 Purchase price may also be a more equitable way to
valuate a victim’s loss of items for which there is little or no
market. Cf. Haycraft v. Adams, 24 P.2d 1110, 1112 (Utah 1933)
(‚The measure of damages for the conversion of property is the
market value, if the property has a market value, at the time of the
conversion.‛ (emphasis added)). For example, the victim in this
case may have been unable to sell her clothing items for more
than a nominal amount, but it is unlikely that she would have
ever considered doing so when the items were still of value to
her. Thus, the amount a willing buyer would pay for the victim’s
stolen shirts and pants may not have been an equitable
calculation of those items’ value. See Ellis, 838 P.2d at 1312(‚*I+tems of personal clothing depreciate drastically almost as
soon as they are worn. In such cases it would be appropriate to
award the victim the purchase price of his loss.‛); State v.
Tetrault, 2012 VT 51, ¶ 13, 54 A.3d 146 (deeming ‚pettifoggery‛ a
defendant’s argument that the trial court should have estimated
the value of small household appliances based on ‚what the
items might fetch at a yard sale‛ and holding that ‚*a+ victim of a
home invasion should not have to visit local thrift stores or pore
20140106-CA 5 2015 UT App 146State v. Ludlow
through the classifieds to determine the value of a used
blender‛).
¶9 While restitution should be based on fair market value,
there are circumstances where the large gap between the amount
a willing buyer would pay and the amount a willing seller
would accept is such that the court cannot accurately calculate
fair market value while still fashioning an equitable award for
the victim. In such circumstances, the court should err on the
side of compensating the victim for his or her loss. See Monson v.
Carver, 928 P.2d 1017, 1027 (Utah 1996) (holding that the purpose
of restitution is ‚to compensate victims for the harm caused by a
defendant and . . . to spare victims the time, expense, and
emotional difficulties of separate civil litigation to recover their
damages from the defendant‛); Corbitt, 2003 UT App 417, ¶ 14
(‚*T+he measure of *restitution] damages is flexible, allowing
trial courts to fashion an equitable award to the victim.‛); see also
Ellis, 838 P.2d at 1311 (‚The judge has discretion to use other
measures of economic loss when fair market value will not make
the victim whole.‛). Accordingly, we have declined ‚to adopt a
black-letter rule that . . . never permits the use of purchase
price . . . as *a+ valuation method*+ under the restitution statute.‛
Corbitt, 2003 UT App 417, ¶ 15.
¶10 But while we have held that ‚*i+n some cases, a purchase
price may be appropriate to a determination of loss,‛ we have
also held that ‚in other cases it may not be appropriate.‛ Id. In
the case at hand, where the majority of the stolen items were
electronics of various ages that would clearly have a market
value, the district court exceeded its discretion by using
purchase price to calculate the value of all the stolen property.
See, e.g., Hunter v. State, 48 So. 3d 174, 175–76 (Fla. Dist. Ct. App.
2010) (per curiam) (holding that the trial court abused its
discretion in calculating restitution without taking into account
depreciation of a laptop, luggage, and handgun that were
purchased several years before the burglary); State v. Baxter, 118
P.3d 1291, 1293 (Kan. Ct. App. 2005) (‚Kansas courts have
20140106-CA 6 2015 UT App 146State v. Ludlow
consistently held that an award of restitution that exceeds fair
market value constitutes an abuse of discretion.‛); State v.
Kristopher G., 500 S.E.2d 519, 521–22 (W. Va. 1997) (per curiam)
(reversing a restitution award where the trial court calculated
restitution based on replacement cost rather than fair market
value).
¶11 It is the responsibility of the prosecutor to calculate ‚the
actual or estimated amount of restitution.‛ Utah Code Ann. § 77-
38a-202(1)–(2) (LexisNexis 2012). The district court in this case
acknowledged, ‚The only testimony I have is the purchase
price.‛ Nevertheless, the district court declined to ‚discount the
values‛ presented by the State in the absence of evidence
supporting such a discount and simply calculated the amount of
restitution using the purchase prices provided by the victim. By
doing so, the court essentially shifted the burden of proof to
Ludlow to demonstrate fair market value without requiring the
State to present prima facie evidence of fair market value.
¶12 In the context of proving damages for conversion, our
supreme court has held that ‚the cost or price paid or
reproduction value‛ of the converted item may be ‚a starting
point‛ for calculating damages but that unless such evidence ‚is
connected by some competent evidence that brings the cost or
purchase price into relation with market value . . . , the evidence
of cost or purchase price becomes incompetent and immaterial.‛
Haycraft, 24 P.2d at 1112; accord Smith v. Mine & Smelter Supply
Co., 88 P. 683, 685 (Utah 1907); see also Grimes v. Commonwealth,
749 S.E.2d 218, 221 (Va. Ct. App. 2013) (‚Replacement value does
not operate as a substitute for market value. Rather, replacement
value can, in certain circumstances, afford the fact finder a basis
from which to draw inferences about the market value of the
stolen item.‛), aff’d, 764 S.E.2d 262 (Va. 2014). When a plaintiff
presents evidence of purchase price without demonstrating
market value, the plaintiff is entitled to only nominal damages.
Haycraft, 24 P.2d at 1112.
20140106-CA 7 2015 UT App 146State v. Ludlow
¶13 Here, the State made no attempt to relate the purchase
prices identified by the victim to the market value of the items.
As the district court observed, it could not ‚discount the values
. . . just because‛ when it was presented with no evidence of the
items’ market value. See In re R.H., 728 S.E.2d 911, 912–13 (Ga.
Ct. App. 2012) (vacating a restitution award, in which the only
evidence of value was purchase price, where the trial court
attempted to set the amount of restitution by arbitrarily
subtracting from the purchase price without any actual evidence
of fair market value). But when the State failed to meet its
burden to demonstrate the appropriate amount of restitution,
the district court should not have resolved the lack of evidence
by granting the victim a windfall. Rather, the court should have
calculated the values of the items for which purchase price
provided an equitable approximation of value, if any, and
awarded nominal restitution for the remaining items. Cf.
Haycraft v. Adams, 24 P.2d 1110, 1112 (Utah 1933). See generally
Utah Code Ann. § 77-38a-102(11) (LexisNexis 2012) (indicating
that restitution may consist of nominal damages). By calculating
the restitution award based on the purchase prices of the stolen
items under the circumstances of this case, the district court
exceeded its discretion.
CONCLUSION
¶14 For the foregoing reasons, we agree with Ludlow that the
district court exceeded its discretion in calculating the amount of
restitution based on the purchase prices of the stolen items
rather than their fair market value. Accordingly, we reverse the
district court’s restitution award and remand for a new
restitution hearing.
20140106-CA 8 2015 UT App 146