State v. Allen (Slip Opinion)
147 N.E.3d 618
Ohio2019Background
- Defendant Zachary Allen cashed seven forged checks at branches of three banks; he pleaded guilty to seven counts of forgery.
- The trial court ordered Allen to pay restitution to the banks in the amounts of the forged checks; Allen appealed.
- The Tenth District vacated the restitution order, holding the banks were third parties who reimbursed the true victims (account holders) and thus were not "victims" under R.C. 2929.18(A)(1).
- The Ohio Supreme Court granted review to construe R.C. 2929.18(A)(1) and whether a bank that cashes a forged check and later recredits the depositor’s account is a "victim" eligible for restitution.
- The Court held the banks were victims because (1) a bank holds a property interest that is lost at the moment it pays a forged check; (2) statute and caselaw place the economic loss on the bank (strict liability for payment of forged checks); and (3) the banks were the direct targets duped by the forger.
- The dissent argued the victim definition in the victims’ rights chapter and the legislature’s removal of third-party restitution language support the Tenth District’s result and raised policy/resource concerns.
Issues
| Issue | Plaintiff's Argument (State) | Defendant's Argument (Allen) | Held |
|---|---|---|---|
| Whether a bank that cashes a forged check (and later recredits the depositor) is a "victim" under R.C. 2929.18(A)(1) | Banks are victims because they lose property upon payment, bear the economic loss by statute, and were the direct targets | Banks are not victims; they are third parties who reimburse the true victims (account holders) and thus are not eligible for restitution | Held: Yes. Banks are victims and may receive restitution |
| Whether the definition of "victim" in the victims’ rights chapter (R.C. 2930.01) controls R.C. 2929.18 | Statutory context and ordinary meaning govern; "victim" is not defined in 2929.18, so ordinary meaning applies | The victims’ rights chapter defines "victim" and that definition limits who can receive restitution (charging instruments must identify victims) | Held: Definitions in R.C. 2930.01 do not govern R.C. 2929.18; ordinary meaning applies |
| Whether a bank that reimburses a customer is analogous to an insurer (i.e., a third party not entitled to restitution) | Banks differ from insurers: banks are defrauded/targeted and suffer the loss at payment; insurers voluntarily assume risk under contract | Like insurers, banks may be third-party payors; legislature removed third-party restitution references, signaling such payors should not be paid restitution | Held: Banks are not analogous to insurers in this context; insurer precedent does not bar restitution to banks |
| Whether legislative deletion of express third-party restitution language bars restitution to banks | Current statute requires only that the recipient be a victim who suffered an economic loss—no categorical bar on payees that reimbursed others | Deletion of third-party language shows intent to prevent restitution to third-party payors (e.g., banks) and favors the appeal court’s approach | Held: Deletion does not preclude restitution to banks that are victims; statutory text supports victim/economic-loss inquiry |
Key Cases Cited
- Great Lakes Bar Control, Inc. v. Testa, 124 N.E.3d 803 (Ohio 2018) (ordinary-meaning statutory interpretation)
- Shaw v. United States, 137 S. Ct. 462 (U.S. 2016) (a scheme to obtain funds from a depositor is also a scheme to obtain property from the bank; loss occurs at payment)
- Ed Stinn Chevrolet, Inc. v. Natl. City Bank, 503 N.E.2d 524 (Ohio 1986) (bank strictly liable to customer for payment of forged check)
- State v. Aguirre, 41 N.E.3d 1178 (Ohio 2014) (discussing legislative removal of third-party restitution language)
- Union Properties, Inc. v. Baldwin Bros. Co., 47 N.E.2d 983 (Ohio 1943) (bank–customer relationship creates creditor/debtor rights and bank property interest in deposited funds)