Kimberly Y. Morgan v. State of Indiana
2016 Ind. App. LEXIS 17
| Ind. Ct. App. | 2016Background
- Kimberly Y. Morgan, former sales manager for the Howard County Convention and Visitors Commission, was discharged in Jan. 2014 after an internal inquiry into mishandled funds.
- State charged Morgan with seven counts of theft; she pled guilty to three counts and agreed to pay restitution for all charged conduct.
- Selective Insurance investigated and paid $11,455.48 on the Commission’s claim (after a $250 deductible); forensic accounting indicated employee-dishonesty loss around $11,705.48.
- The Visitors Commission’s controller commissioned a “deep dive” audit that reported additional missing funds totaling $21,450 and incurred $6,500 in audit costs.
- At the restitution hearing, Morgan admitted to diverting about $11,455 via a Square account but denied other alleged shortages; the trial court ordered restitution of $11,455.48 to Selective Insurance and $16,000 to the Visitors Commission (the $16,000 made a probation condition).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether trial court properly ordered $16,000 restitution to the Visitors Commission | State/Visitors Commission sought restitution for total alleged shortfall and audit costs beyond insurance payout | Morgan argued only $11,455.48 (insurance payout) plus $250 deductible to the Commission were supported; audit costs and additional alleged losses lacked nexus to her crimes | Partially reversed: only $11,455.48 to Selective Insurance and $250 to the Visitors Commission; excess restitution vacated |
| Whether costs of the special/deep audit are recoverable as criminal restitution | Commission sought $6,500 audit expense as restitution | Morgan argued audit costs are not an actual loss compensable under restitution statute | Reversed: audit costs not recoverable under criminal restitution statute |
| Burden to show losses are direct result of defendant's acts | State relied on testimony and documents from insurer and audit | Morgan pointed to lack of direct evidence linking additional missing funds to her | Held State failed to prove additional losses beyond insurer payout and deductible |
| Whether restitution must be strictly tied to losses caused by the convicted acts | State sought broader recovery for all alleged shortfalls | Morgan invoked strict construction of restitution statute and requirement of direct, immediate result from the crime | Court applied strict construction and required direct nexus; limited restitution accordingly |
Key Cases Cited
- Bailey v. State, 717 N.E.2d 1 (Ind. 1999) (trial court may order restitution as part of sentence or probation)
- Iltzsch v. State, 981 N.E.2d 55 (Ind. 2013) (restitution serves to compensate the victim and vindicate societal rights)
- Rich v. State, 890 N.E.2d 44 (Ind. Ct. App. 2008) (restitution must reflect loss sustained as direct and immediate result of defendant's criminal acts)
- Cherry v. State, 772 N.E.2d 433 (Ind. Ct. App. 2002) (restitution statute construed strictly against the State)
- Lang v. State, 911 N.E.2d 131 (Ind. Ct. App. 2009) (expenditure to determine amount of loss is not recoverable as criminal restitution)
- Polen v. State, 578 N.E.2d 755 (Ind. Ct. App. 1991) (defendant may not be ordered to pay restitution for acts not resulting in conviction)