State v. Lowry, 446 P.3d 1148

Background

Lowry, a senior project engineer at Industrial Automation Consultants (IAC), left in April 2015 without returning a company laptop and backup drive containing his work product. IAC reported the theft and charged Lowry with felony embezzlement; he pleaded no contest in 2016.
IAC refused to release Lowry’s final paycheck; the parties settled a wage dispute with deductions for missing items and other charges.
At restitution hearing the State sought $25,835.37: replacement cost for equipment, labor to recreate work, lost profits (billable hours not billed to client), wages paid to Lowry for training/leave, and billable value of time IAC personnel spent cooperating with investigation.
The District Court found IAC’s president credible and ordered full restitution of $25,835.37; Lowry was later sentenced and restitution was included in the sentence.
On appeal Lowry challenged $13,989.31 of the restitution as unauthorized by § 46-18-243, MCA — specifically (1) other engineers’ wages to recreate work, (2) wages IAC paid Lowry for training/conference/paid time off, and (3) billable value of IAC personnel’s time cooperating with law enforcement.

Issues

Issue	Plaintiff's Argument (Lowry)	Defendant's Argument (State/IAC)	Held
Whether wages paid to other engineers to recreate Lowry’s work are recoverable restitution	Those wages are not a pecuniary loss recoverable because the engineers would have worked same hours elsewhere; employer cannot recover defendant’s wages	IAC sought recovery for labor costs and lost billings caused by recreating work	Court: Engineer wages as paid are not recoverable; but IAC is entitled to recover lost billable income ($15,975) without deducting Lowry’s wages
Whether wages paid to Lowry for training/conference/paid time off are recoverable	Such wages were an economic loss to IAC and should be reimbursed	IAC argues wages paid were wasted investment and recoverable as pecuniary loss	Court: Wages paid to the employee are not recoverable as restitution; award of $1,788.39 for these wages was reversed
Whether billable value of IAC personnel’s time cooperating with law enforcement is recoverable under § 46-18-243(1)(d)	The billable/hourly value represents lost income and should be compensated	IAC contends its outlay in cooperating (compensating staff) entitles it to recover the expense; requested amount used billable rates	Court: Out-of-pocket cash wages paid for cooperation are recoverable under (1)(d), but not billable rates; remand to prove actual wage rates so restitution can be recalculated
Proper method to calculate lost profits for recreated work	Lowry disputed the deduction and basis used for lost profits	IAC calculated lost profits using Lowry’s reported billable hours × Lowry’s billable rate, then subtracted wages	Court: Lost profits properly based on billable hours × billable rate ($15,975); the District Court erred by deducting Lowry’s wages from that figure

Key Cases Cited

State v. Hill, 384 Mont. 486, 380 P.3d 768 (standard of review for restitution and findings of fact)
State v. Barrick, 378 Mont. 441, 347 P.3d 241 (restitution under § 46-18-243(1)(a) contingent on civil recoverability; (1)(d) requires out-of-pocket expense)
State v. Kalal, 350 Mont. 128, 204 P.3d 1240 (use tort/contract law precedent to assess restitution recoverability)
State v. Brewer, 296 Mont. 453, 989 P.2d 407 (wages paid to employee generally not recoverable as restitution)
State v. Coluccio, 352 Mont. 122, 214 P.3d 1282 (remand for insufficient restitution evidence; district court must factually support restitution calculation)
State v. Kim, 364 Mont. 356, 274 P.3d 746 (overruled other aspects; cited for procedural context)