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State v. Taylor


January 8, 2007


On appeal from Superior Court of New Jersey, Law Division, Morris County, Indictment No. 03-11-1283-I.

Per curiam.


Submitted November 14, 2006

Before Judges Skillman and Holston, Jr.

Defendant, Brian R. Taylor, appeals from the restitution order contained in his December 14, 2004 amended judgment of conviction for third-degree theft by deception, contrary to N.J.S.A. 2C:20-4b. We reverse and remand.

Defendant pled guilty, pursuant to a plea agreement, to third-degree theft by deception for stealing fifty-one electronic balances and scales from his employer, Ohaus Corporation (Ohaus). Defendant was sentenced on June 18, 2004 to two and one-half years probation, with the condition of fifteen days incarceration in the Morris County jail, to be served in the Sheriff's Labor Assistance Program and the payment of restitution. Under the plea agreement, defendant agreed to pay restitution in an amount to be determined by the court after an evidentiary hearing.

On September 24, 2004, the judge conducted the restitution hearing. Earl Myers, Director of Operations for Ohaus, testified for the victim. Myers testified that the retail price is composed of the actual cost of the scales, shipping expenses and Ohaus' profit. Myers also testified that the cost of the scales includes the price of materials, the expense to inventory and warehouse the scales, and the amount paid to employees to design, manufacture, and market the scales.

Ohaus sells scales for use in education, commerce, and research. Defendant was hired by Ohaus to sell scales directly to prospective buyers when they called Ohaus to ask about Ohaus products. Those prospective buyers included ultimate consumers and also retail sellers of Ohaus products, although defendant's sales position required him principally to initiate direct sales to consumers at Ohaus' suggested retail prices. The suggested retail prices included a profit to Ohaus.

In his guilty plea, defendant admitted that in August and September 2003, while he was an employee of Ohaus, he sold Ohaus scales on the internet on e-bay, appropriated the sale proceeds for himself, and did not turn the proceeds over to Ohaus. He admitted he used Ohaus shipping to deliver the scales to his ebay buyers.

In a December 14, 2004 written opinion, memorialized in the December 14, 2004 amended judgment of conviction, the court fixed defendant's restitution obligation at $48,545.72, payable in installments of $200 per month.*fn1 The restitution amount was comprised of $47,775, representing the retail price Ohaus would have received if it had sold the fifty-one scales to ultimate consumers, plus $770.72 in shipping costs.

Defendant contends that the judge erred in the imposition of the restitution order because the amount required to be repaid exceeds Ohaus' loss. He argues that Ohaus is a wholesale purchaser and the value of its loss was the wholesale purchase price.

We generally review a restitution determination on an abuse of discretion standard. State v. Harris, 70 N.J. 586, 598-99 (1976). However, "[a] trial court's interpretation of the law and the legal consequences that flow from established facts are not entitled to any special deference." Manalapan Realty v. Manalapan Twp. Comm., 140 N.J. 366, 378 (1995).

The judge, in making her determination that Ohaus' actual loss from defendant's theft was its retail price, relied on outof-state cases, which permit a restitution order to include loss profit from the theft of inventory, so long as the retail amount is not "speculative, contingent, conjectural or uncertain." Iowa v. Ihde, 532 N.W. 2d 827 (Iowa Ct. App. 1995); see Arizona v. Young, 842 P. 2d 1300 (Ariz. 1992); Vermont v. May, 689 A.2d 1075 (Vt. 1996).

In Harris, supra, the Supreme Court reiterated that "the significance of restitution as a condition of probation . . . extends beyond the concept of simple justice to one aggrieved and entitled to restitution of that unlawfully taken or reparation for loss unlawfully inflicted . . . . Restitution as a condition [of probation is] regarded as rehabilitative in nature." Id. at 592. Restitution "offers the individual something within reason that he can do here and now, within the limits of his ability to demonstrate to himself that he is changing." Id. at 593 (quoting D. Dressler, Practice and Theory of Probation and Parole, 176-77 (1959) (emphasis in original)). However, the Court, quoting from S. Rubin, The Law of Criminal Correction, 200-01 (1963), stated with respect to its limitations: "The restitution or reparation required may not go beyond the actual loss or damage as established in the prosecution and must be directly related to the crime." Ibid. (emphasis added). The Court indicated that a determination of the quantum of proof of loss required to be presented at a restitution hearing, conducted as part of the sentencing process is "sufficient facts" in the record to support the court's determination of the amount of restitution. Id. at 598-99. It is "subsumed in the requirement that the condition be 'reasonable and just.'" Id. at 599 (quoting People v. Tidwell, 338 N.E.2d 113, 118 (Ill. App. Ct. 1975)).

As we made clear in State v. Scribner, 298 N.J. Super. 366, 370 (App. Div.), certif. denied, 150 N.J. 27 (1997), "a sentencing court may impose only those sentences authorized by statute. Restitution in conjunction with a probationary term . . . is an authorized sentence." (Internal citations omitted).

However, "N.J.S.A. 2C:43-3 provides that the restitution ordered to be paid cannot exceed the loss to the victim." Ibid.

We are convinced that the amount of a restitution award in New Jersey is circumscribed by N.J.S.A. 2C:43-3, which states that the restitution ordered to be paid not exceed the "victim's loss." Loss is defined in subsection e. of this section, as:

[T]he amount of value separated from the victim or the amount of any payment owed to the victim and avoided or evaded and includes any reasonable and necessary expense incurred by the owner in recovering or replacing lost, stolen or damaged property or recovering any payment avoided or evaded, and, with respect to property of a research facility, includes the cost of repeating an interrupted or invalidated experiment or loss of profits. [(Emphasis added).]

The legislative history of N.J.S.A. 2C:43-3 indicates that "[s]ubsection e. was amended by L. 1995, c. 20 § 6 to include . . . in the definition of 'loss' . . . the loss of profits where the property is that of a 'research facility,' as defined at 2C:1-14p." Cannel, New Jersey Criminal Code Annotated, comment 1 on N.J.S.A. 2C:43-3 (2006).

"Research facility" is defined in N.J.S.A. 2C:1-14(p), as:

Any building, laboratory, institution, organization, school, or person engaged in research, testing, educational or experimental activities, or any commercial or academic enterprise that uses warm-blooded or cold-blooded animals for food or fiber production, agriculture, research, testing, experimental or education. A research facility includes, but is not limited to, any enclosure, separately secured yard, pad, pond, vehicle, building structure or premises or separately secured portion thereof.

In State v. Lewis, 185 N.J. 363, 369 (2005), the Supreme Court stated:

Our goal in construing a statute "is to discern and effectuate the Legislature's intent." We start by considering the plain language of the statute. If the language is clear, we interpret the statute consistent with its plain meaning. Ibid. If the meaning of the text is ambiguous, we construe a criminal statute in favor of the defendant. (citations omitted).

Additionally, "the canon of statutory construction, expressio unius est exclusio alterius - expression of one thing suggests the exclusion of another left unmentioned - sheds some light on the interpretative analysis." Brodsky v. Grinnel Haulers, Inc., 181 N.J. 102, 112 (2004).

In examining the plain meaning of N.J.S.A. 2C:43-3, and in construing any ambiguity in favor of the defendant, we are convinced that had the Legislature intended that "loss of profits" could be ordered as restitution for a victim other than a "research facility," N.J.S.A. 2C:43-3 would have so stated. The omission of the mention of "loss of profits" to any victim other than a "research facility" implies that the omission was intentional, and not an oversight. Brodsky, supra, 81 N.J. at 102.

The Supreme Court in State in the Interest of D.G.W., 70 N.J. 488, 504 (1976), held that, in determining the value of the losses incurred in setting a restitution order, "any recognized method of valuation may be utilized including, but not restricted to, cost of repair or replacement, market value, or other reliable indicia (e.g. appraisals)." However, based on the evidence presented at the restitution hearing, we are convinced that N.J.S.A. 2C:43-3 limits the restitution award in this case to the wholesale cost of the scales, plus the $770.72 in shipping costs incurred by Ohaus. The wholesale cost is Ohaus' replacement value. The wholesale cost represents the "victim's loss" and, therefore, the "amount of value separated from the victim" as provided by N.J.S.A. 2C:43-3.

At the restitution hearing, Myers did not testify to the wholesale cost of each of the scales that defendant had sold to his e-bay customers. Myers stated that he had not brought documentation to the hearing but indicated that such information was available. Myers testified that Ohaus' wholesale cost would include material costs, import duties,*fn2 expenses of warehousing and storage, and other overhead costs related to the fifty-one scales in question.

Accordingly, we vacate the restitution award contained in the December 14, 2004 amended judgment of conviction. We remand the matter to the trial court to conduct an evidentiary hearing to determine the "victim's loss" by determining the wholesale cost of the fifty-one scales that, when added to the $770.72 in shipping costs, should constitute the restitution order. We do not retain jurisdiction.

Reversed and remanded.

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