P. v. Shim
Filed 4/25/13 P. v. Shim CA1/5
California
Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or
relying on opinions not certified for publication or ordered published, except
as specified by rule 8.1115(b). This
opinion has not been certified for publication or ordered published for
purposes of rule 8.1115.
IN
THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FIRST
APPELLATE DISTRICT
DIVISION
FIVE
and Appellant,
and Respondents.
A134563
(
Super. Ct. Nos.
212129-01, 212129-02 & 212129-03)
This
case involves crimes by an employer relating to an employee’s death while on
the job, and the extent to which benefits paid under a workers’ compensation
policy can be used to offset direct victim restitution owed under Penal Code
sections 1202.4 and 1203.1.
name="_ftnref1" title="">[1] The trial court credited the
defendant-employer with death benefits paid by his workers’ compensation
carrier to the victim’s family, following the general rule that a defendant is
entitled to an offset for any amounts paid to the victim by the defendant’s own
insurance company. (People v. Bernal (2002) 101 Cal.App.4th 155, 167-168 (
was not entitled to an offset because he had fraudulently failed to report the
victim’s wages to the workers’ compensation carrier, meaning that the victim’s
employment was not reflected in the insurance premiums. In light of the defendant-employer’s
restitution to the workers’ compensation carrier for that fraud (the subject of
a separate criminal count in this proceeding), and in light of trial court’s
broad discretion to set an appropriate amount of restitution, we affirm.
BACKGROUND
Antonio
Martinez, an undocumented worker from Mexico,
was employed by defendant California C&R, Inc. (C&R), a roofing company
owned by defendant Sam Hyung Goo Shim.
C&R did not report Martinez’s
wages to its workers’ compensation insurance carrier, State Compensation
Insurance Fund (SCIF), and did not pay state unemployment insurance taxes on
behalf of Martinez.
Martinez
died on the job after a fall from the roof of a four-story apartment building
in San Francisco. Defendant Jwa Young Kim, who was also
employed by C&R, was the foreman at the worksite and Martinez’s
supervisor. Martinez
was not wearing a harness and there were no railings or barriers on the roof to
prevent a fall to the sidewalk. Cal/OSHA
regulations (Cal. Admin. Code, Tit. 8, § 1730) require safeguards for
roofing work higher than 20 feet off the ground.
The
grand jury issued an indictment charging C&R, Shim and Kim with felony
counts of involuntary manslaughter and willfully violating an occupational
health and safety standard resulting in death.
(§ 192, subd. (b); Lab. Code, § 6425.) C&R and Shim were also charged with
several counts of workers’ compensation premium fraud and failure to withhold
or pay unemployment insurance tax. (Ins.
Code, § 11880, subd. (a); Unemp. Ins. Code, § 2117.5.)
Shim
pled guilty to one felony count each of involuntary manslaughter, violating an
occupational health and safety standard resulting in death, workers’
compensation premium fraud, and failure to pay or withhold unemployment
insurance tax, in exchange for an indicated disposition of five years probation
and one year in county jail.
(§ 192, subd. (b); Lab. Code, § 6425, subd. (a); Ins. Code,
§ 11880; Unemp. Ins. Code, § 2117.5.)
C&R pled guilty to a single felony count of violating an
occupational health and safety standard, with an indicated disposition of five
years probation. (Lab. Code,
§ 6425.) The district attorney
amended the indictment to charge Kim with a misdemeanor count of violating an
occupational health and safety standard causing death, and Kim pled no contest
to this single misdemeanor count, with an indicated disposition of 364 days in
county jail and three years probation. (Lab.
Code, § 6425, subd. (a).)
name="_ftnref2" title="">[2] Shim and C&R entered waivers of their
rights under People v. Harvey (1979)
25 Cal.3d 754, thus allowing the court to consider the dismissed counts when
imposing sentence and calculating the amount of victim restitution. (See People
v. Hume (2011) 196 Cal.App.4th 990, 994-995 (Hume).) The court imposed
the probationary dispositions contemplated by the plea agreements and the
remaining charges were dismissed.
As
a condition of their pleas, Shim and C&R agreed to pay restitution to the
Employment Development Fund in the amount of $3,152.34 and to SCIF in the
amount of $108,205.61. All defendants
reserved their right to challenge the amount of restitution to be awarded to
Martinez’s heirs, who had already received a settlement of $320,000 in death
benefits from SCIF under C&R’s workers’ compensation policy. At a separate hearing to determine the
restitution to be paid to Martinez’s heirs, the primary issue presented was
whether the defendants were entitled to offset the $320,00 payment made by SCIF
to the family against the obligation to pay restitution. The People took the position that no offset
should be allowed, because Shim and C&R had failed to report Martinez’s
employment to SCIF and had committed fraud with respect to the workers’
compensation insurance premiums.
Defendants pointed out that SCIF had been made whole by the $108,000
that Shim and C&R agreed to pay to SCIF as restitution, an amount that
represented the delinquent premium payments owed to SCIF to cover Martinez’s
employment.
The
parties stipulated to the following facts for purposes of resolving the
restitution issue: (1) C&R and Shim
had workers’ compensation insurance through SCIF; (2) Martinez was employed by
C&R and Shim; (3) after Martinez died on the job, SCIF paid his family
members a death benefit of $320,000; (4) Shim had failed to report any of
Martinez’s wages to SCIF in violation of Insurance Code section 11880,
subdivision (a); (5) C&R and Shim had agreed to pay SCIF $108,205.61 in
restitution, an amount reflecting the unpaid premiums associated with
Martinez’s employment; and (6) SCIF’s workers’ compensation payment to
Martinez’s heirs was greater than any restitution that would be owed by
defendants to the family.
name="_ftnref3" title="">[3] The parties additionally agreed that Shim and
C&R had paid workers’ compensation premiums to SCIF for at least two
employees other than Martinez.
The
trial court concluded that defendants were entitled to offset SCIF’s settlement
with the Martinez family: “I must say,
as the attorneys have pointed out to me, it’s a case of first impression. And I’m going to find that there’s an
offset. I’m doing that because I think
its clear that in criminal matters such as this, the restitution, the idea is
to make the victim whole. We definitely
want to see that happen. [¶] Also, that
if a defendant’s insurance carrier, that they have paid insurance for, does
make the victim whole, then the defendant is entitled to that offset. [¶] The question here, as I see it, is it’s
clear that the defendants’ insurance carrier did make the victims whole. That’s by stipulation, saying the 320,000 is
more than what would be required. And
the real question is should the defendant then have to pay monies to the victim,
doubling whatever the victim got, albeit he’s already satisfied himself with
his insurance carrier by paying, I think it was 108,000. [¶] So the defendant has paid 108,000 in
settling whatever claims he had with his insurance carrier that the insurance
carrier, workers’ comp folks are satisfied that he’s up to date. . . . [¶] .
. . .[¶] . . . . So the workers’ comp folks would be satisfied with that
108,000, it seems to me, is the way I read that, and they have then said that
they paid the 320[,000]. . . . [¶] . . . So it seems to me that the main
thing that I am concerned with is that the victim becomes whole. In this case, if that has happened, and if
there’s any fraud here, it was between the defendants and the workers’ comp,
SCIF, and SCIF and [the defendants] have already settled that claim so I . . .
therefore I am going to find it as an offset.â€
The
People appeal. (§ 1238, subd.
(a)(5); People v. Hamilton (2003) 114
Cal.App.4th 932, 938 [post-sentence order regarding restitution affects
substantial rights of the People and is appealable] (Hamilton).)
DISCUSSION
The
People contend the trial court should not have granted defendants an offset for
benefits paid under the SCIF workers’ compensation policy. They reason that because Shim and C&R
failed to report Martinez’s employment to SCIF, they should not receive the benefit
of that policy. The People further argue
that defendant Kim has no basis for claiming an offset because he did not, in
any event, secure the insurance policy under which Martinez’s family members
were paid. We reject these claims.
Two
statutes govern a victim’s right to direct restitution when probation has been
granted. The first, section 1202.4,
gives all direct victims of a crime a mandatory right to restitution “directly
from†the defendant, in an amount sufficient to fully reimburse the victim for
every determined economic loss suffered as a result of the crime. (§ 1202.4, subds. (a)(1), (f)(3)
& (k)(1); People v. Anderson
(2010) 50 Cal.4th 19, 27-29 (Anderson).) The second, section 1203.1, governs probation
conditions in general and allows a court to impose restitution as a condition
of probation. (§ 1203.1, subd.
(b).) The scope of a trial court’s
discretion is broader when restitution is imposed as a condition of probation
under section 1203.1, and restitution under that statute is not strictly tied
to economic losses directly caused by the defendant’s criminal conduct. (Anderson,
at pp. 27, 29; People v. Giordano
(2007) 42 Cal.4th 644, 663, fn. 7 (Giordano).)
Generally
speaking, a defendant who is obligated to pay victim restitution is not
entitled to offset amounts that the victim receives from a collateral source
that is independent of the defendant, such as the victim’s own insurance,
Medicare, or a professional fund designed to compensate parties injured by a
member of that profession. (
Cal.App.4that p. 996.) This is because
the fortuity that the victim has purchased insurance, or qualifies for some
other kind of benefit or compensation not attributable to the defendant,
“should not shield [the] defendant from a restitution order which requires him
to pay the full amount of the losses caused by his crime.†(Hove,
supra, 76 Cal.App.4th at p.
1272.) Also, such payments are subject
to claims for reimbursement and subrogation against the defendant. (Bernal,
supra, 101 Cal.App.4th at pp. 166-167.)
“As a result of these reimbursement claims, equitable principles would
tend to place the loss on the wrongdoing defendant, preclude a windfall
recovery by the victim, and reimburse the third party.†(Id.
at p. 167.)
By
contrast, a defendant generally is
entitled to an offset for amounts paid to the victim by the defendant’s own
insurer. (Bernal, supra, 101
Cal.App.4th at pp. 165-168; see also Hume,
supra, 196 Cal.App.4th at p. 996;
899, 901, 905 (Short).) As explained in Bernal, when a defendant’s insurance company makes payments to a
victim pursuant to an insurance contract, it generally has no recourse against
the insured defendant. (
restitution obligation with no credit for the . . . insurance payment, the
victim would receive a windfall to the extent that such payments duplicated
items already reimbursed by [defendant’s] carrier.†(Ibid.)
Additionally,
section 1202.4, subdivision (a)(1) mandates that the victim receive payments
“directly from†the defendant. (
Unlike a payment from an unrelated source, a payment to the victim under
the defendant’s insurance policy is a payment “directly from†the
defendant: “The defendant’s own
insurance company is different than other sources of victim reimbursement, in
that (1) the defendant procured the insurance, and unlike the other third-party
sources, its payments to the victim are not fortuitous but precisely what the
defendant bargained for; (2) the defendant paid premiums to maintain the policy
in force; (3) the defendant has a contractual
right to have the payments made by his insurance company to the victim, on
his or her behalf; and (4) the defendant’s insurance company has no right
of indemnity or subrogation against the defendant.†(Id.
at p. 168; see also Hume,
In
the case before us, Shim and C&R maintained workers’ compensation insurance
through SCIF. SCIF paid Martinez’s
family members $320,000 under this policy as compensation for Martinez’s
death. The $320,000 came “directly fromâ€
Shim and C&R within the meaning of section 1202.4. As the parties agree, SCIF would have no
basis for recovering any portion of the $320,000 from Martinez’s family if the
family were to recover restitution from the defendants. The offset avoided double payment to
Martinez’s family, which had been fully compensated by the insurance
payment. (Bernal, supra, 101
Cal.App.4th at p. 167.)
The
People argue that Shim and C&R should not be credited with SCIF’s payment
of $320,000 to Martinez’s family given that those defendants had failed to
report Martinez’s wages to SCIF and had paid a lower insurance premium as a
result. They note that restitution in
this case was authorized by section 1203.1, which, in addition to compensating
the victim, “addresses the broader probationary goal of rehabilitating the
defendant.†(Anderson, supra, 50
Cal.4th at p. 27.) As the People
observe, restitution is “ ‘ “an effective rehabilitation penalty because it
forces the defendant to confront, in concrete terms, the harm his actions have
caused.†’ †(Ibid., citing People v.
Carbajal (1995) 10 Cal.4th 1114, 1124.)
The People argue that the offset in this case did not promote the goal
of fostering defendants’ rehabilitation, because the defendant did not have to
pay anything out of pocket for Martinez’s death—including the insurance
premiums to SCIF.
We
review a restitution order made as a condition of probation for abuse of
discretion, a standard that requires us to affirm unless the order is
“arbitrary or capricious or otherwise exceeds the bounds of reason.†(Anderson,
supra, 50 Cal.4th at p. 32; see
663.) So long as the trial court
employed a rational method of fixing the amount that was calculated to make the
victim whole, the order must be affirmed.
(People v. Fortune (2005) 129
Cal.App.4th 790, 794; People v. Baker
(2005) 126 Cal.App.4th 463, 470.) An
abuse of discretion is not established simply by showing that a different court
considering the same facts might have utilized a different method of
calculating restitution and reached a different result. (See People
v. Akins (2005) 128 Cal.App.4th 1376, 1386-1387.)
We
find no abuse of discretion in this case.
The trial court considered the People’s arguments, but concluded that
the defendants’ fraudulent conduct toward SCIF
did not render an offset inappropriate when calculating the restitution to be
paid to the family of Martinez. Significantly, Shim pled guilty to the
separate crime of insurance fraud against SCIF, and Shim and C&R had agreed
to pay SCIF over $108,000 to compensate it for the unpaid premiums associated
with Martinez’s employment. In light of
this restitution to SCIF, the court did not act arbitrarily and capriciously when
it allowed Shim and C&R to offset the payment made by SCIF on their
behalf. Martinez’s family had been fully
compensated and, presumably, so had SCIF.
“A restitution order is intended to compensate the victim for its actual
loss and is not intended to provide the victim with a windfall.†(People
v. Chappelone (2010) 183 Cal.App.4th 1159, 1172; see also
612; Fortune, supra, 129 Cal.App.4th at p. 795.)
We
turn next to the People’s argument that defendant Kim was not entitled to an
offset for SCIF’s payment to Martinez’s family because he did not procure the
workers’ compensation policy. We reject
the argument for the reasons stated in Short,
supra, 160 Cal.App.4th 899, in which
the defendant pled guilty to driving under the influence and causing great
bodily injury, a crime that occurred while he was operating his employer’s
vehicle. The defendant in
in victim restitution; later, his employer’s insurance company paid the victim
the policy limits of two insurance policies totaling $3 million. (Id.
at pp. 901-902.) The appellate court
concluded the employee-defendant was entitled to an offset, even though he had
not paid for the insurance policy: “This
is not, as the People claim, a fortuitous windfall that should not inure to
defendant’s benefit. Labor Code section
2802 requires an employer to insure or otherwise indemnify an employee ‘for all
. . . losses incurred by the employee in direct consequence of the discharge of
his or her duties.’ (Lab.Code, §
2802.) Thus, the statute requires an
employer ‘to pay any judgment entered against the employee for conduct arising
out of his employment.’ (
Cal.App.4th 1096, 1100.) Nor was the
policy, in the trial court’s words, ‘procured not for the benefit of the
Defendant [but] rather to protect Defendant’s employer from vicarious liability
for the acts of its employees.’ As the
purpose of Labor Code section 2802 is ‘to protect employees from suffering
expenses in direct consequence of doing their jobs’ (Grissom v. Vons Companies, Inc. (1991) 1 Cal.App.4th 52, 59–60[]),
procurement of the insurance policy to cover those losses was a benefit for
defendant as much as it was for the employer.â€
(Short, supra, 160 Cal.App.4th at p. 905; see also People v. Jennings (2005) 128 Cal.App.4th 42 [defendant who pled
guilty to causing injury while driving under the influence was entitled to
offset money paid by his mother’s insurance policy, on which he was a named
insured, even though mother had paid for the policy].)
Effective
January 1, 2013, prompted by the trial court’s ruling in this case, the
Legislature amended section 1202.4 to include the following provision as
subdivision (f)(12): “In cases
where an employer is convicted of a crime against an employee, a payment to the
employee or the employee’s dependent that is made by the employer’s workers’
compensation insurance carrier shall not be used to offset the amount of the
restitution order unless the court finds that the defendant substantially met
the obligation to pay premiums for that insurance coverage.†(Stats. 2012, ch. 868, § 3 (Sen. Bill
No. 1177), ch. 873, § 1.5 (Sen. Bill No. 1479); see Rep. on Hearing on
Sen. Bill No. 1177 as introduced and amended Feb. 22, 2012, Apr. 11, 2012.)
The
parties agree that this amendment is not retroactive and does not directly
apply to this case. (See § 3;
740-741; Hamilton, supra, 114
Cal.App.4th at p. 939, fn. 5.) Indirectly,
the amendment provides support for upholding the trial court’s restitution
order. “ ‘An amendment to a statute
making a material change in its wording bespeaks a
of the prior statute.’ †(See
Cal.App.4th 920, 932.) The Legislature’s
explicit curtailment of a trial court’s discretion to order an offset under
circumstances like those in this case suggests that such an offset was not
prohibited under previous law.
DISPOSITION
The
judgment is affirmed.
NEEDHAM,
J.
We concur.
JONES, P. J.
SIMONS, J.
name="_ftn1" title=""> [1] Further statutory references are to the Penal
Code except where otherwise indicated.
name="_ftn2" title=""> [2] A violation of Labor Code section 6425,
subdivision (a) is a “wobbler†offense, alternatively punishable as a felony or
a misdemeanor. (See § 17, subd.
(b); People v. Myers (2009) 170
Cal.App.4th 512, 516.)
