California Court of Appeal Oct 13, 2021 No. E076237Unpublished
Filed 10/13/21 P. v. Potter CA4/2
NOT TO BE PUBLISHED IN OFFICIAL REPORTS California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FOURTH APPELLATE DISTRICT
DIVISION TWO
THE PEOPLE,
Plaintiff and Appellant, E076237
v. (Super.Ct.No. FSB18000378)
RYAN POTTER, OPINION
Defendant and Respondent.
APPEAL from the Superior Court of San Bernardino County. Dwight W. Moore,
Judge. Reversed.
Rob Bonta, Attorney General, Matthew Rodriquez, Acting Attorney General,
Michael P. Farrell, Assistant Attorney General, Julie A. Hokans and Galen N. Farris,
Deputy Attorneys General, for Plaintiff and Appellant.
Brown & Stedman and Edwin B. Brown for Defendant and Respondent.
1
FACTUAL AND PROCEDURAL HISTORY
On January 29, 2018, the California Attorney General filed a felony complaint
against defendant and respondent Ryan Potter and codefendant Steven Korff
(codefendant). The complaint charged defendant and codefendant with one count of
conspiracy under Penal Code1 section 182, subdivision (a)(1), 126 counts of forgery
People v. Hamilton (2003) 114 Cal.App.4th 932, 939.) Section 1202.4 provides: “[I]n
every case in which a victim has suffered economic loss as a result of the defendant’s
conduct, the court shall require that the defendant make restitution to the victim . . . in an
amount established by court order, based on the amount of loss claimed by the
victim . . . .” The court shall order full restitution “unless it finds compelling and
extraordinary reasons for not doing so and states those reasons on the record.” (Id. at
subds. (b) & (f), italics added.) Section 1202.4, subdivision (f)(3) directs that the
restitution ordered “shall be of a dollar amount that is sufficient to fully reimburse the
victim . . . for every determined economic loss incurred as the result of the defendant’s
criminal conduct.” (Italics added.)
A restitution order is reviewed for abuse of discretion and will not be reversed
unless it is arbitrary or capricious. No abuse of discretion will be found where there is a
rational and factual basis for the amount of restitution ordered. (People v. Smalling
(2019) 36 Cal.App.5th Supp. 1, 4.) However, where a restitution order rests upon a
“ ‘demonstrable error of law,’ ” abuse of discretion appears. (Id. at p. 4.) In other words,
7
“ ‘if the trial court misunderstands or misapplies the applicable legal standard, it has not
properly exercised its discretion.’ ” (Id. at p. 5.) Therefore, “ ‘an appellate court’s
consideration of a claim that a trial court abused its discretion in awarding [or denying]
restitution because the lower court applied an incorrect legal standard is tantamount to
independent or de novo review.’ ” (Ibid.)
3. THE CIVIL AGREEMENT DID NOT BAR DEFENDANT’S
RESTITUTION OBLIGATION IN THE FULL AMOUNT HE
EMBEZZLED
In this case, the trial court imposed restitution in the amount defendant had already
paid Squires in connection with its civil settlement agreement. The court concluded that
Squires had waived its right to further restitution from defendant.
In determining whether the settlement and release precluded restitution as a
condition of probation in the criminal action, we find guidance in Bernal, supra, 101
Cal.App.4th 155. In Bernal, the defendant pled guilty to driving under the influence and
causing great bodily injury. The trial court declined to order restitution to the victim
because the defendant’s insurance company had paid the victim for her losses, she had
signed a waiver and release of all claims, and the waiver and release specifically listed
the defendant. (Id. at pp. 158-161.)
On appeal, the court held that the victim’s settlement and release did not abrogate
the defendant’s restitution obligation. (Bernal, supra, 101 Cal.App.4th at pp. 160-161,
164.) The court noted that under both the state constitution and section 1202.4, the
victims of crimes had a right to restitution, and the court was required to order those
8
defendants convicted of crimes to pay restitution for losses suffered by victims regardless
of the indemnification or subrogation rights of third parties. (Bernal, at p. 161 & fn. 4;
see Cal. Const., art. I, § 28, subd. (b); § 1202.4, subds. (a)(1) & (f).)
The court further noted that “[a] restitution order has objectives beyond simply
indemnifying the victim. It also seeks to rehabilitate the defendant and deter defendant
and others. [Citation.] ‘Among other things, California’s restitution law ensures that
amends are made to society for a breach of the law, serves a rehabilitative purpose, and
acts as a deterrent to future criminality. [Citations.] Restitution “is an effective
rehabilitative penalty because it forces the defendant to confront, in concrete terms, the
harm his actions have caused. Such a penalty will affect the defendant differently than a
traditional fine, paid to the State as an abstract and impersonal entity, and often calculated
without regard to the harm the defendant has caused. Similarly, the direct relation
between the harm and the punishment gives restitution a more precise deterrent effect
than a traditional fine.” ’ ” (Bernal, supra, 101 Cal.App.4th at pp. 161-162.)
The court reasoned that “a release by a victim cannot waive the People’s right to
have a defendant pay restitution ordered as part of his sentence.” (Bernal, supra, 101
Cal.App.4th at p. 160.) “While a settlement agreement with, and release of, a defendant’s
insurance company may reflect a victim’s willingness to accept the amount paid in full
satisfaction for all civil liability, it does not reflect the willingness of the People to accept
that sum in satisfaction of the defendant’s rehabilitative and deterrent debt to society. A
restitution order pursuant to a defendant’s plea is an agreement between the defendant
and the state. [Citation.] The victim is not party to the agreement, and a release by the
9
victim cannot act to release a defendant from his financial debt to the state any more than
it could terminate his prison sentence.” (Id. at p. 162.)
The court also explained that a restitution order “need not mirror what a victim
might obtain in a civil action. ‘There is no requirement the restitution order be limited to
the exact amount of the loss in which the defendant is actually found culpable, nor is
there any requirement the order reflect the amount of damages that might be recoverable
in a civil action . . . .’ [Citation.] Since the categories of loss recoverable by restitution
and the dollar amounts ordered are not identical to the defendant’s civil liability, there is
no reason that a release of civil liability should release a restitution obligation, just as a
satisfied restitution obligation does not bar a civil action for further damages.” (Bernal,
supra, 101 Cal.App.4th at pp. 162-163, fn. omitted.) Furthermore, “even the statutory
goal of fully reimbursing the victim’s losses might be undermined if a civil settlement
with a defendant’s insurance carrier barred further restitution. A victim might rationally
choose to accept an insurance settlement for substantially less than his or her losses rather
than risk the uncertain, or even unlikely, possibility that the defendant will pay the entire
restitution amount. If a settlement release automatically terminated a defendant’s
restitution obligation, the victim would lose all possibility of ever being made whole.”
(Id., at p. 163.)
The court found support for its analysis in People v. Clifton (1985) 172
Cal.App.3d 1165. There, the victim of defendant’s offense settled with an insurance
carrier for partial payment of losses, damages, and medical expenses. On appeal, the
court found the settlement irrelevant concerning whether the trial court had power to
10
order restitution. The court explained that “[j]ust as a restitution order pursuant to the
criminal law is not a substitute for a civil action to recover damages [citation], a partial
civil settlement is not a substitute for restitution in a criminal proceeding. Aside from
compensating an individual for injuries suffered, restitution may also serve the salutary
purposes of deterring future criminality and impressing upon a criminal offender that he
must accept responsibility for his crime.” (Id. at p. 1168.)
We find Bernal persuasive and applicable and conclude that the settlement here
did not bar restitution.
Defendant contends that that Bernal is inapplicable. Defendant notes that in
Bernal, the victim settled with the defendant’s insurance company; but in this case,
defendant settled directly with Squires. The fact that the victim settled directly with
defendant, rather than an insurance company, is a difference without a legal distinction.
The person or entity with whom a criminal victim settles is irrelevant because, as Bernal
explains, a victim has no authority to extinguish a criminal defendant’s obligation to the
state to pay restitution as a condition of probation or waive the state’s right to order
restitution in order to achieve the goals of restitution and probation.
Moreover, defendant contends that “Squires specifically waived its right to receive
any restitution from the criminal court case against [defendant].” (Underscore omitted.)
Defendant mischaracterizes the terms of the civil settlement agreement, which provides:
“F. Squires will not request criminal restitution in any case that may be filed in
the future against [defendant], but will accept any restitution that is provided. In the
event criminal restitution is ordered, Squires agrees to consider the sums paid under this
11
Agreement to be an offset in relation to any criminal restitution judgment.” (Italics
added.)
Therefore, according to the civil settlement agreement, Squires did not waive its
right to receive future restitution from defendant. Squires only agreed that it would not
request additional restitution against defendant. In the agreement, Squires agreed to
accept any restitution, if ordered by the court. The civil settlement agreement expressly
contemplated the possibility that the People would seek additional restitution in a future
criminal case, and provided that any sums paid by defendant in connection with the civil
agreement would offset the criminal restitution judgment. Furthermore, we note that the
parties could not waive the right of the state, a nonparty to the civil agreement, to seek
restitution on behalf of the victim. As noted above, even if Squires had waived any
additional restitution, a crime victim is not a party to a restitution order, and “a release by
the victim cannot act to release a defendant from his financial debt to the state any more
than it could terminate his prison sentence.” (Bernal, supra, 101 Cal.App.4th at p. 162.)
“A restitution order has objectives beyond simply indemnifying the victim. It also seeks
to rehabilitate the defendant and deter defendant and others. [Citation.] ‘Among other
things, California’s restitution law ensures that amends are made to society for a breach
of the law, serves a rehabilitative purpose, and acts as a deterrent to future criminality.’ ”
(Id. at pp. 161-162.)
Based on the above, we will remand for the trial court to amend its restitution
order. Here, the parties have agreed that the total amount of restitution owed was
$6,300,827.27. Therefore, the trial court shall order restitution in the amount of
12
$6,300,827.27, offset by the $450,835.61 that defendant already paid Squires pursuant to
the civil settlement agreement—$5,849,991.66.
DISPOSITION
The October 30, 2020, restitution order is reversed and the matter is remanded to
the trial court with directions to enter a new restitution order in the amount of
$5,849,991.66.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
MILLER Acting P. J.
We concur:
FIELDS J.
RAPHAEL J.
13
AI Brief
AI-generated · verify before citing
Holding. A victim's civil settlement and release of a defendant does not bar the court from ordering full criminal restitution, as the victim lacks the authority to waive the state's interest in restitution for rehabilitation and deterrence.
Issues
Whether a victim's civil settlement agreement with a defendant precludes the court from ordering full criminal restitution.
Whether a victim has the legal authority to waive the state's right to seek restitution as part of a criminal sentence.
Disposition. reversed and remanded
Quotations verified verbatim against the opinion
“a release by a victim cannot waive the People’s right to have a defendant pay restitution ordered as part of his sentence.”
“a victim has no authority to extinguish a criminal defendant’s obligation to the state to pay restitution”
“a restitution order pursuant to a defendant’s plea is an agreement between the defendant and the state.”