State v. Hienok Demessie

COURT OF APPEALS
DECISION NOTICE
DATED AND FILED This opinion is subject to further editing. If
published, the official version will appear in
the bound volume of the Official Reports.
February 14, 2023
A party may file with the Supreme Court a
Sheila T. Reiff petition to review an adverse decision by the
Clerk of Court of Appeals Court of Appeals. See WIS. STAT. § 808.10
and RULE 809.62.

Appeal No. 2021AP2114-CR Cir. Ct. No. 2019CF410

STATE OF WISCONSIN IN COURT OF APPEALS
DISTRICT III

STATE OF WISCONSIN,

PLAINTIFF-RESPONDENT,

V.

HIENOK DEMESSIE,

DEFENDANT-APPELLANT.

APPEAL from a judgment of the circuit court for Barron County:
JAMES C. BABLER, Judge. Affirmed.

Before Stark, P.J., Hruz and Gill, JJ.

Per curiam opinions may not be cited in any court of this state as precedent

or authority, except for the limited purposes specified in WIS. STAT. RULE 809.23(3).

¶1 PER CURIAM. Hienok Demessie appeals from a judgment
convicting him of three felonies. The sole issue on appeal is whether the circuit
No. 2021AP2114-CR

court erroneously exercised its discretion when it imposed a substantial restitution
award to be paid to an insurer, notwithstanding Demessie’s claimed indigency and
the outright dismissal of a charge related to the restitution award. We conclude
the court did not erroneously exercise its discretion when ordering restitution, and
we affirm the judgment of conviction.

BACKGROUND

¶2 The State charged Demessie with arson of a building, two counts of
burglary, theft of property worth more than $10,000, possession of burglarious
tools, criminal damage to property worth over $2,500, and taking and driving a
vehicle without the owner’s consent. Relevant to this appeal, the arson charge was
based upon allegations that Demessie intentionally damaged “by means of fire” a
building owned by Ignition Enterprises LLC, and the property damage charge was
based upon allegations that Demessie caused “total loss to building, equipment
and inventory at [a] laundromat, belonging to Ignition Enterprises LLC.”
Demessie eventually entered guilty pleas to the property damage charge, one count
each of burglary of a building and taking and driving a vehicle without owner’s
consent, in exchange for the outright dismissal of the arson charge and the
dismissal of the remaining counts as read-in offenses.

¶3 The plea agreement did not include a stipulation as to restitution. At
the sentencing hearing, the circuit court took evidence related to restitution, and
the parties also addressed the court and commented on a presentence investigation
report (PSI).

¶4 The State presented evidence from a fire investigator, a police
detective, and an insurance adjuster. The fire investigator testified that the damage
to the building was intentionally caused by a fire ignited by the application of open

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flame to ordinary combustibles in a storage room of a laundromat located in the
building at issue. The detective testified that Demessie was apprehended in a
vehicle that was seen leaving the parking lot of an adjoining building at the time of
the fire. In the front seat of the vehicle was a duffle bag containing items stolen
from the storage room where the fire had originated. The tread pattern on the
boots Demessie was wearing when apprehended matched a set of footprints from
the crime scene. A jail inmate also relayed to police several incriminating
statements that Demessie made about his involvement in the arson, including
details that were not public. Finally, the insurance adjuster testified and submitted
documents showing that Encova Insurance had paid a total of $854,640.14 for
claims of damage to the building and its contents as well as a resulting loss of
business income caused by the fire.

¶5 Demessie did not testify or present any witnesses. Demessie’s trial
counsel asserted it was “clear” that Demessie was indigent based upon the PSI
(one page of which he offered to introduce into evidence), Demessie’s
representation by the State Public Defender, and the likelihood that Demessie was
about to be incarcerated. Trial counsel then argued that justice did not require
having an indigent defendant reimburse an insurer in an amount that would “drag
him down emotionally and financially for the rest of his life.”

¶6 The PSI related that Demessie had a GED, some technical college
classes and training in carpentry and drywall installation, but that he was last
employed in 2018, when he lost a job due to suspected drug use. A COMPAS1

1
A Correctional Offender Management Profiling for Alternate Sanctions (COMPAS)
report is an evidence-based actuarial tool for assessing a defendant’s criminogenic risk and
treatment needs.

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No. 2021AP2114-CR

evaluation cited in the PSI concluded that Demessie “may have sufficient skills to
obtain or maintain a job and to manage [himself] financially.” Demessie told the
PSI author that he was behind in child support payments due to his unemployment
and student loan debt, but that he believed he would be able to gain employment in
the future.

¶7 The circuit court determined, based both upon Demessie’s guilty
plea and the evidence produced at the hearing, that Demessie had in fact started
the fire underlying the property damage charge and that Encova Insurance had
compensated the victim in the amount of $854,640.14 for losses that the victim
had sustained as a result of the fire. The court then observed that it was “a fallacy
to say that the insurance company isn’t a victim.” The court concluded that justice
required restitution to Encova Insurance because the losses were so substantial and
giving back lost sums would give Demessie “a sense of satisfaction and
accomplishment,” contributing to his rehabilitation. The court acknowledged that
it would be “pretty difficult” for the insurance company to collect on the
restitution award, but it noted that Demessie’s ability to pay could be taken into
account when setting the amount of restitution payments to be made while
Demessie was on extended supervision and that any remaining amount could be
converted to a civil judgment.

¶8 Adding $2,500 in restitution to the victim for the insurance
deductible, plus mandatory surcharges, the circuit court ordered Demessie to pay a
total of $942,854.15 in restitution. Demessie challenges the restitution order on
appeal.

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DISCUSSION

¶9 A circuit court is required by statute to order a criminal defendant to
make full or partial restitution to compensate a victim for losses suffered as a
result of any “crime considered at sentencing,” unless the court finds, and states on
the record, a substantial reason not to do so. WIS. STAT. § 973.20(1r) (2019-20);2
State v. Anderson, 215 Wis. 2d 673, 682, 573 N.W.2d 872 (Ct. App. 1997). In
addition, “if justice so requires,” the court may order restitution to reimburse any
insurer, surety or other person who has already compensated a victim for such a
loss. Sec. 973.20(5)(d). In determining what amount of restitution is warranted, a
circuit court shall take into account: (1) the amount of loss suffered by the victim
as a result of a crime considered at sentencing; (2) the financial resources of the
defendant; (3) the present and future earning capacity of the defendant; (4) the
needs and earning ability of the defendant’s dependents; and (5) any other factors
the court deems appropriate. Sec. 973.20(13)(a). People or entities claiming
restitution bear the burden of proving their losses while the defendant bears the
burden of demonstrating an inability to pay. Sec. 973.20(14).

¶10 The scope of a circuit court’s authority to order restitution presents a
question of statutory interpretation subject to de novo review. State v. Ziegler,
2005 WI App 69, ¶10, 280 Wis. 2d 860, 695 N.W.2d 895. However,
determinations as to the amount of restitution, whether the defendant’s conduct
was a substantial factor in causing any claimed expenses, and whether justice
requires compensation to an insurance company all lie within the court’s

2
All references to the Wisconsin Statutes are to the 2019-20 version unless otherwise
noted.

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discretion. Id.; State v. Fernandez, 2009 WI 29, ¶62, 316 Wis. 2d 598, 764
N.W.2d 509. We will uphold a discretionary restitution award as long as the court
applied the correct legal standard to a logical interpretation of the facts of record.
State v. Muth, 2020 WI 65, ¶14, 392 Wis. 2d 578, 945 N.W.2d 645. We will also
uphold findings of fact underlying the restitution award unless they are clearly
erroneous. State v. Queever, 2016 WI App 87, ¶13, 372 Wis. 2d 388, 887 N.W.2d
912.

¶11 Here, Demessie contends that the circuit court erroneously exercised
its discretion by: (1) determining that the victim’s losses were caused by a crime
considered at sentencing; (2) imposing an amount of restitution beyond the
defendant’s ability to pay; and (3) treating the insurance company as a “victim”
entitled to restitution. We will address each contention in turn.

¶12 Demessie first argues that there was insufficient evidence to
demonstrate a causal nexus between the victim’s losses and a crime considered at
sentencing because the arson charge was dismissed; Demessie never admitted to
starting the fire—only to breaking into the building and stealing items; and the
State provided only circumstantial evidence that Demessie started the fire.
Demessie’s first two arguments seem to be premised on the idea that the property
damage charge was based on damage caused by something other than the fire.3
However, the property damage charge in the amended Information expressly

3
It is telling that Demessie does not identify any other potential damage to which the
property damage charge could relate, other than that caused by the fire. In addition, we note that
Demessie did not oppose restitution to the building owner for the deductible on the same losses
for which the insurer sought restitution—i.e., damage to the building and its contents and loss of
business income. Whether compensated by insurance or uncompensated as a deductible, those
items of restitution were based upon the exact same causal nexus to the property damage charge.

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referred to the total loss of the building and its contents. Based upon the probable
cause portion of the complaint, the only possible cause for that extent of alleged
damage was the fire. It was reasonable, then, for the circuit court to rely in part
upon Demessie’s plea to the property damage charge to find that Demessie had
started the fire. That finding, in turn, supported the court’s resulting determination
that the insurance payout for damage to the building and its contents and loss of
business income was causally linked to that charge. The fact that the insurance
payout at issue was also causally linked to the dismissed arson charge is irrelevant.

¶13 Moreover, even if Demessie’s plea to the property damage charge
were insufficient on its own to establish that Demessie started the fire that caused
the claimed restitution damages, the circumstantial evidence submitted by the
State at the restitution hearing was more than sufficient to do so. As outlined
above, the State introduced several items of physical evidence linking Demessie to
the burglary that occurred in the same room and at the same time as the fire that
destroyed the building. That evidence was corroborated by a jailhouse informant
who relayed statements attributed to Demessie containing details of the incident
that were not released to the public.

¶14 Demessie secondly argues that the circuit court imposed an amount
of restitution in excess of what the court implicitly acknowledged that Demessie
had the ability to pay, and that the court improperly deferred a more precise
determination of Demessie’s actual ability to pay to the Department of
Corrections. As the State correctly points out, however, a defendant cannot
complain about a court’s failure to consider his or her financial circumstances
when the defendant did not present any evidence of his or her financial resources
or ability to pay. See State v. Boffer, 158 Wis. 2d 655, 663, 462 N.W.2d 906

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(Ct. App. 1990). Arguments by counsel and references to the PSI generally are
not a substitute for evidentiary submissions. Id.

¶15 Furthermore, even if the circuit court treated the PSI as an
evidentiary submission in this case based upon counsel’s offer to introduce a page
of it into evidence, the PSI contained no specific information regarding
Demessie’s past income level, his anticipated future earning capacity, the amount
of his child support obligations, or other expenses. Therefore, the PSI provided no
adequate basis for the court to determine the actual amount of money Demessie
could afford to pay in restitution. A general acknowledgement that it would be
difficult for the insurance company to fully collect on a restitution award of
hundreds of thousands of dollars does not equate to a finding that Demessie had no
ability to pay restitution—particularly given the prospect discussed in the PSI that
Demessie’s training would enable him to find some future employment. In setting
restitution, the court had no obligation to arbitrarily pick a number somewhere
between nothing and the full amount of damages suffered.

¶16 Nor, for that matter, does WIS. STAT. § 973.20 cap restitution at the
amount a defendant has the actual ability to pay prior to the discharge of a
sentence. Fernandez, 316 Wis. 2d 598, ¶¶4-5. The statute merely requires the
court to take a defendant’s ability to pay into consideration—which the circuit
court plainly did, as shown by its collectability comment. In light of Demessie’s
failure to satisfy his burden of proof regarding his alleged inability to pay, there
was nothing improper about the court’s award of the full amount of claimed
restitution or its observation that Demessie’s probation agent would be able to
determine the actual amount of restitution Demessie would be expected to pay
during his period of extended supervision.

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No. 2021AP2114-CR

¶17 Demessie argues thirdly that the circuit court’s comment that it was
“a fallacy to say that the insurance company isn’t a victim” demonstrates that the
court improperly treated the insurance company as a statutory victim entitled to
restitution under WIS. STAT. § 973.20(1r), rather than as an insurer entitled to
restitution under § 973.20(5)(d) only if justice so requires. Alternatively,
Demessie argues that the court employed a “preconceived policy” that justice
requires all insurance companies to be paid restitution.

¶18 We disagree with Demessie’s characterizations of the circuit court’s
comments. Taken in context, it is clear that the court was referring to the
insurance company as a “victim” only in the general sense of it having suffered a
monetary loss, not according to the statutory definition. The court distinguished
the statutory victim—i.e., the insured property owner—as the “direct victim” in its
discussion, before it concluded that “[j]ustice does require reimbursement of
losses here.” The court also stated that it could “see there may be some
circumstances in which the insurer should not be” reimbursed for compensation
paid to the statutory victim. In addition, the court rationally concluded that justice
required restitution to Encova Insurance because the losses were so substantial and
giving back lost sums would give Demessie “a sense of satisfaction and
accomplishment,” contributing to his rehabilitation. In sum, we are satisfied that
the court did not erroneously exercise its discretion when it awarded restitution to
the insurance company in this case.

By the Court.—Judgment affirmed.

This opinion will not be published. See WIS. STAT.
RULE 809.23(1)(b)5.

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