State v. LowryState v. Lowry
PROCEDURAL AND FACTUAL BACKGROUND
¶2 Lowry began working as a senior project engineer for IAC in March 2015. IAC provided Lowry with a laptop, an external backup hard drive, and an adapter cable for his work. Lowry spent most of his time with IAC on a project to retrofit an existing control system to a new control platform for an IAC client. During his month-long tenure with IAC, Lowry recorded 112.5 hours on IAC client projects, 18.5 hours in internal training, 8 hours at a quarterly meeting and a
¶3 After Lowry left the company without returning the laptop, IAC refused to send him his last paycheck. Lowry filed a complaint with the Montana Department of Labor & Industry. In August 2016, the parties settled the wage dispute. In the settlement, IAC and Lowry agreed to deduct from Lowry's final paycheck the costs of a missing office key, the laptop, and an unpaid hotel bill that Lowry incurred during his employment and IAC paid on his behalf.
¶4 In September 2016, Lowry entered into a plea agreement with the State and pleaded no contest to the charged offense. He admitted that he refused to return the laptop to IAC. The court adjudged Lowry guilty of felony theft of property by embezzlement and scheduled a restitution hearing.
¶6 Wambeke testified that IAC's standard operating procedures required engineers to upload their work product to IAC's server daily, but that Lowry had not done so. Because Lowry did not back up his work to the server or return the laptop, IAC essentially lost all of Lowry's work product when he left the company and had to recreate it. IAC pulled two engineers from other projects to complete the project by the client's deadline. Wambeke testified that the engineers would have been working on other billable projects during this time but for Lowry's theft of the laptop containing the saved work product. Wambeke requested reimbursement to IAC for the wages it paid Lowry for training, meetings, and paid time off, because "it turned out to be a bad investment" and "was of no value" to the company. He also
¶7 Lowry also testified during the hearing. Though he acknowledged taking the laptop, he claimed that he had not taken the cable or external hard drive. He further contended that he uploaded his work product to IAC's server and to the client and that IAC did not have to recreate it. In its Findings of Fact, Conclusions of Law, and Order for Restitution, the District Court found Wambeke credible and stated that it had "serious concerns" about Lowry's honesty. It ordered Lowry to pay the entire $25,835.37 restitution request. At a later sentencing hearing, Lowry was sentenced to ten years, with five suspended, to the Department of Corrections. The District Court included $25,835.37 restitution in the sentencing order.
STANDARDS OF REVIEW
¶8 A district court's determination of restitution is an issue of law, which we review for correctness. State v. Hill ,
DISCUSSION
¶9 Lowry argues that § 46-18-243, MCA, does not authorize all the restitution that the District Court ordered. He maintains that the District Court had no authority to order restitution for (1) the cost of the wages paid to other employees to recreate his work, (2) the reimbursement of wages paid to him for time off and training, or (3) the billable value of the hours that IAC's office administrator and president worked with law enforcement on the case. These amounts add up to $13,989.31 of the ordered restitution.
¶10 Section 46-18-201(5), MCA, requires a sentencing court to "require payment of full restitution to the victim" of the crime for "a pecuniary loss." A sentencing court must "require an offender to make full restitution to any victim who has sustained pecuniary loss, including a person suffering an economic loss." Section 46-18-241(1), MCA. Section 46-18-243(1), MCA, defines "Pecuniary loss" in pertinent part to include:
(a) all special damages, but not general damages, substantiated byevidence in the record, that a person could recover against the offender in a civil action arising out of the facts or events constituting the offender's criminal activities, including without limitation out-of-pocket losses, such as medical expenses, loss of income, expenses reasonably incurred in obtaining ordinary and necessary services that the victim would have performed if not injured, expenses reasonably incurred in attending court proceedings related to the commission of the offense, and reasonable expenses related to funeral and burial or crematory services;
(b) the full replacement cost of property taken, destroyed, harmed, or otherwise devalued as a result of the offender's criminal conduct;
...
(d) reasonable out-of-pocket expenses incurred by the victim in filing charges or in cooperating in the investigation and prosecution of the offense.
¶11 Our case law establishes that restitution ordered under § 46-18-243(1)(a), MCA, "is clearly contingent upon the victim being able to recover the claimed damages in a civil action." State v. Barrick ,
¶12 Lowry first challenges the District Court's order of $4,326.92 for "lost wages" to other engineers to recreate Lowry's work. Lowry argues on appeal that IAC could not recover the wages it paid to other engineers to recreate his work, because those engineers would have worked the exact same hours, albeit on different projects, regardless of his crime.
¶13 The District Court ordered $4,326.92 in restitution for the labor to recreate stolen work product and $11,648.08 for lost profits. Although the District Court characterized the $4,326.92 as "lost wages" for other engineers to recreate Lowry's work, the amount was calculated using the number of billable hours Lowry reported and Lowry's hourly wage of $38.46, not the number of hours other engineers worked on the project and their hourly wages. Timesheets and a payroll log admitted into evidence showed that other engineers spent more time than Lowry to recreate his work and that one engineer's wage rate was higher than Lowry's rate. The District Court then calculated $11,648.08 in lost profits by using the number of
¶14 The District Court erred in ordering $4,326.92 in "lost wages." As a general rule, wages an employer pays to a defendant are not recoverable as restitution. State v. Brewer ,
¶15 Lowry next challenges the District Court's order that he pay $1,788.39 in restitution to reimburse IAC for the wages it paid Lowry for training, conferences, and
¶16 We turn last to the restitution ordered for the billable value of the
¶17 The District Court ordered restitution pursuant to § 46-18-243(1)(d), MCA, for the billable value of the time the office administrator and president spent cooperating with law enforcement. Subsection (1)(d) allows for the recovery of "reasonable out-of-pocket expenses incurred by the victim in filing charges or in cooperating in the investigation and prosecution of the offense." Section 46-18-243(1)(d), MCA. Unlike restitution ordered under subsection (1)(a), subsection (1)(d) "provides for recovery of victim expenses involving a cash payment or outlay." Barrick , ¶ 17 (holding that a victim's lost wages resulting from defendant's killing of the family dog were not an out-of-pocket expense under the plain language of § 46-18-243(1)(d), MCA ).
¶18 The compensation IAC paid to the office administrator and president for the time they spent working with law enforcement is a "cash payment or outlay" that the company expended "cooperating in the investigation and prosecution of the offense." Section 46-18-243(1)(d), MCA ; Brewer , ¶ 17. But the billable value of those hours is not. The District Court erred in ordering $2,635 in restitution for the billable value of the office administrator's time and $5,239 for the billable value of the president's time spent cooperating with law enforcement under § 46-18-243(1)(d), MCA. Under subsection (1)(d), the out-of-pocket expense IAC incurred for the office administrator's and the president's time is limited to the amount of wages the company paid to them for the time spent cooperating in the investigation and prosecution. The only evidence at the restitution hearing was the billable hourly rate for each. We remand with instructions for the District Court to receive evidence regarding the wage rate of the office administrator and president at the time of their cooperation in the investigation and to recalculate the restitution based on their wage rates. See State v. Coluccio ,
CONCLUSION
¶19 We affirm in part and reverse in part. We remand with instructions for the District Court to receive evidence regarding the wage rates of the office administrator and president of the company at the time of their cooperation in the investigation and to recalculate restitution in accordance with this Opinion.
We Concur:
MIKE McGRATH, C.J.
INGRID GUSTAFSON, J.
DIRK M. SANDEFUR, J.
JAMES JEREMIAH SHEA, J.
Notes
It does not matter that IAC agreed to pay Lowry his wages in the Department of Labor & Industry settlement. Lowry was entitled to be paid, and his employer was entitled to what it would have recovered from the client had Lowry turned in his work.