State v. Irwin

2016 UT App 144

THE UTAH COURT OF APPEALS

STATE OF UTAH,
Appellee,
v.
COLORADO STEVEN IRWIN,
Appellant.

Opinion
No. 20150217-CA
Filed July 14, 2016

Third District Court, West Jordan Department
The Honorable Charlene Barlow
No. 131401107

Teresa L. Welch and Christine Seaman, Attorneys
for Appellant
Sean D. Reyes and William M. Hains, Attorneys
for Appellee

SENIOR JUDGE JUDITH M. BILLINGS authored this Opinion, in
which JUDGES GREGORY K. ORME and KATE A. TOOMEY
concurred. 1

BILLINGS, Senior Judge:

¶1 Colorado Steven Irwin appeals the trial court’s calculation
of restitution in connection with his theft of a number of watches
from a retail store. We vacate the restitution order and remand
for further proceedings.

1. Senior Judge Judith M. Billings sat by special assignment as
authorized by law. See generally Utah R. Jud. Admin. 11-201(6).
State v. Irwin

BACKGROUND

¶2 On May 23, 2013, Irwin broke into a watch shop in Sandy,
Utah, and stole 102 Rockwell watches with retail values ranging
from $79 to $2,500 each. On November 26, 2013, Irwin pleaded
guilty to theft by receiving stolen property, a third-degree
felony, and burglary, a third-degree felony. In connection with
his plea, Irwin agreed to pay restitution.

¶3 At the restitution hearing, the State presented evidence
indicating that the manufacturer’s suggested retail price (MSRP)
of the stolen watches was $39,004 and that the wholesale value
was $19,244. A spreadsheet submitted to the trial court with the
victim impact statement calculated the replacement cost of the
watches as $13,651.40. 2 The insurer calculated the loss at
$35,155.48 but paid the retailer only $6,250.48, due to policy
limitations. The State argued that restitution should be based on
retail value, calculated using the MSRP value of the watches or,
alternatively, the insurer’s valuation. Irwin argued that
restitution should be based on the $13,651.40 replacement cost.
The court agreed with the State that retail value was a more
appropriate valuation than replacement cost and used the
insurance valuation to calculate restitution. Accordingly, the
court ordered Irwin to pay $35,155.48 in restitution—$6,250.48 to
the insurance company and $28,905 to the victim. Irwin appeals.

ISSUE AND STANDARD OF REVIEW

¶4 Irwin argues that the trial court exceeded its discretion in
determining that restitution should be based on the retail value
of the watches rather than their replacement cost. “We will not

2. It is unclear why the replacement cost and the wholesale value
differ. We leave it to the trial court to determine which of these
numbers represents the actual loss suffered by the victim.

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disturb a trial court’s restitution order unless it exceeds that
prescribed by law or [the trial court] otherwise abused its
discretion. A trial court will be deemed to have abused its
discretion only if no reasonable [person] would take the view
adopted by the trial court.” State v. Ludlow, 2015 UT App 146,
¶ 5, 353 P.3d 179 (alterations in original) (citation and internal
quotation marks omitted).

ANALYSIS

¶5 “In the calculation of . . . restitution, the victim is limited
to recovering only ‘pecuniary damages.’” State v. Brown, 2014 UT
48, ¶ 22, 342 P.3d 239. For purposes of the restitution statute,
“pecuniary damages” are defined as “demonstrable economic
injury . . . which a person could recover in a civil action arising
out of the facts or events constituting the defendant’s criminal
activities and includes the fair market value of property taken,
destroyed, broken, or otherwise harmed.” Utah Code Ann. § 77-
38a-102(6) (LexisNexis Supp. 2015). Often, “[f]air market value is
measured by what the owner [of the property] could expect to
receive, and the amount a willing buyer would pay to the true
owner for the stolen item.” State v. Greene, 2006 UT App 445,
¶ 11, 147 P.3d 957 (second alteration in original) (citation and
internal quotation marks omitted) (defining fair market value in
the context of determining the degree of a theft offense).

¶6 Nevertheless, as the “primary objective in rendering an
award of damages for conversion[ 3] is to award the injured party

3. “Cases addressing damages in the context of civil conversion
actions are relevant to our analysis because pecuniary damages
in the restitution context are those damages ‘which a person
could recover in a civil action arising out of the facts or events
constituting the defendant’s criminal activities.’” State v. Ludlow,
(continued…)

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full compensation for actual losses . . . , rules relating to the
measure of [restitution] damages are flexible, and can be
modified in the interest of fairness.” State v. Corbitt, 2003 UT App
417, ¶ 9, 82 P.3d 211 (emphasis added) (citations and internal
quotation marks omitted); see also Mahana v. Onyx Acceptance
Corp., 2004 UT 59, ¶ 26, 96 P.3d 893 (“To the extent possible, the
fundamental purpose of compensatory damages is to place the
plaintiff in the same position he would have occupied had the
tort not been committed.”). For example, we have held that
calculation of restitution for the loss of a two-week-old truck
should be based on purchase price where the depreciated market
value would not adequately compensate the victim for his loss.
See Corbitt, 2003 UT App 417, ¶¶ 15–16.

¶7 Purchase price—or replacement cost—is a better measure
of a victim’s loss than retail value where, as here, the victim had
the ability to replace the stolen items for much less than their
retail value. 4 Indeed, “wholesale market price is to be preferred
as a test over the retail when . . . it is clearly the more accurate

(…continued)
2015 UT App 146, ¶ 6 n.3, 353 P.3d 179 (quoting Utah Code Ann.
§ 77-38a-102(6) (LexisNexis 2012)).

4. When value is an element of an offense, “the weight of
authority supports the rule that an item’s retail price is prima
facie evidence of its market value at the time of the theft.” Morris
v. State, 334 P.3d 1244, 1248 & n.13 (Alaska Ct. App. 2014)
(collecting cases). It does not necessarily follow that the same is
true in calculating value for purposes of restitution, as “rules
relating to the measure of [restitution] damages are flexible,”
State v. Corbitt, 2003 UT App 417, ¶ 9, 82 P.3d 211 (citation and
internal quotation marks omitted), and intended to further the
purpose of restitution—“to compensate victims for the harm
caused by a defendant,” Monson v. Carver, 928 P.2d 1017, 1027
(Utah 1996).

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measure” of the victim’s loss. Illinois Cent. R.R. v. Crail, 281 U.S.
57, 65 (1930); accord 22 Am. Jur. 2d Damages § 293 (2013). To
calculate restitution based on retail value when the loss is
“capable of replacement . . . at wholesale market price without
added expense,” “ignores the basic principle underlying
common law remedies that they shall afford only compensation
for the injury suffered.” Illinois Cent. R.R., 281 U.S. at 63–64.

¶8 The Restatement (Second) of Torts explains that fair
market value may vary depending on the markets in which an
item is sold: “Since the measure of recovery is determined by the
harm done, the market that determines the measure of recovery
by a person whose goods have been taken, destroyed or
detained is that to which he would have to resort in order to
replace the subject matter.” Restatement (Second) of Torts § 911
cmt. d (Am. Law Inst. 1979). Thus, the market value of goods
taken from a retail dealer should generally be based on
wholesale value, and “[d]amages for the profits that the . . . retail
dealer would normally anticipate from a sale are not ordinarily
allowed” unless the retailer can demonstrate certainty regarding
lost profits, such as by demonstrating that he was unable to
obtain substitutes to satisfy his customers. 5 Id.

5. The State asserts that the victim should be compensated for his
inability to sell the stolen watches. But there is no evidence to
suggest that the victim actually suffered further pecuniary loss
as a result of his inability to sell the stolen watches (e.g., that the
victim was unable to satisfy its customers by obtaining
replacement watches or that the retail value of the watches has
decreased since the theft). As Irwin points out, awarding the
victim the retail value of the watches would allow him to receive
a profit twice—he could “repurchase 102 Rockwell watches at
the replacement cost . . . , pocket the remaining monies, and then
make even more additional monies by selling the Rockwell
watches ‘at the [retail] price again.’”

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¶9 This approach is consistent with our jurisprudence
indicating that restitution should be limited “to that amount
which is necessary to compensate a victim for losses caused by
the defendant,” Monson v. Carver, 928 P.2d 1017, 1027 (Utah
1996); see also Utah Code Ann. § 77-38a-302(2)(a) (LexisNexis
Supp. 2015) (defining “complete restitution” as “restitution
necessary to compensate a victim for all losses caused by the
defendant”), and that restitution should not be used to grant a
windfall to the victim, State v. Ludlow, 2015 UT App 146, ¶ 13,
353 P.3d 179; see also Utah Code Ann. § 77-38a-102(6), (11)
(excluding punitive damages from being considered as part of a
restitution award). Thus, while we acknowledge that the “legal
definition” of market value is ordinarily “retail, not wholesale,”
Winters v. Charles Anthony, Inc., 586 P.2d 453, 454 (Utah 1978),
wholesale value or replacement cost is generally a more
appropriate measure of pecuniary loss where the victim is a
retail dealer.

CONCLUSION

¶10 Because restitution is limited to the amount necessary to
compensate the victim for its loss, we conclude that retail value
was not an appropriate measure of the victim’s pecuniary
damages in this case. Thus, we reverse the trial court’s
restitution order and remand for recalculation of an appropriate
restitution award, in accordance with the guidance offered in
this decision.

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