State v. Johnson
2011 MT 116
| Mont. | 2011Background
- Johnson was a licensed life and disability insurance producer; the State Auditor investigated alleged improper transfers of clients’ annuities with undisclosed penalties.
- Johnson admitted to taking loans from victims, transferring annuities without full penalty disclosures, and earning commissions on transfers.
- On July 21, 2009, Johnson pled guilty to two counts of felony theft and agreed to restitution for loans; restitution for annuity transfers was to be determined by the court if not resolved by agreement.
- The plea agreement directed the court to determine restitution if the parties could not reach agreement; the PSI noted restitution had not yet been determined.
- A restitution hearing was held January 28, 2010; the State did not present sworn victim affidavits but offered portfolios and expert testimony on damages from surrender penalties.
- The District Court ordered $71,364.50 in restitution, adopting the State’s approach and citing Nesbit v. McNeil; Johnson objected to the lack of victim affidavits and to the restitution measure.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Proper restitution measure for annuity transfers | State: losses consist of surrender penalties; offsetting gains from new annuities is inappropriate. | Johnson: any penalty losses should be offset by overall gains, potentially reducing restitution. | Restitution measured by surrender penalties; gains offset not applied. |
| Effect of missing sworn victim affidavits on restitution | Affidavits required under § 46-18-242(1)(b) to document pecuniary loss. | No specific objection to affidavits; issue not properly preserved; hearing relied on other evidence. | Johnson failed to preserve the objection; restitution affirmed. |
Key Cases Cited
- Nesbit v. McNeil, 896 F.2d 380 (9th Cir. 1990) (deterrence prevents allowing uplift from client gains to offset losses)
- Hilgers, 989 P.2d 866 (Mont. 1999) (PSI documentation sufficiency and evidence supporting restitution)
- Pritchett, 11 P.3d 539 (Mont. 2000) (restitution where PSI lacks loss documentation; preserves requirement to the extent applicable)
- McMaster, 190 P.3d 302 (Mont. 2008) (establishes standard for reviewing statutory authority and restitution measures)