April 29, 2009 - Criminal defendants’ restitution is not capped at the amount they can pay during the length of a sentence, the Wisconsin Supreme Court held on April 28.

The court held in State v. Fernandez, 2009 WI 29, that under Wis. Stat. § 973.20, a judge may order full restitution so long as it properly considers the defendant’s ability to pay.

In this case, Alberto Fernandez pleaded “no contest” to charges that he stole a car while drunk and drove it recklessly in a rail yard, causing railroad employee Bruce Dalka to twist his knee while diving out of the way. Canadian National Railroad (CNR), Dalka’s self-insured employer, and MetLife, insurer of the car, sought nearly $69,000 in restitution which the circuit court ordered Fernandez to pay at $400 per month.

Fernandez argued that the circuit court exceeded its authority by ordering restitution payments extending far beyond his two-year probation, citing  State v. Loutsch, 2003 WI App. 16, which held that a court may only order as much restitution as a defendant could pay within the term of the sentence. Under that formula, Fernandez would only be liable for $9,600.

Finding portions of Loutsch have confused the meaning and purpose of Wis. Stat. § 973.20, the justices overruled them.

Fernandez’s argument

The court stated that Fernandez’s interpretation of Wis. Stat. § 973.20 results from “jumbling concepts” of the statutory language. Untangling Fernandez’s argument, the court observed that under the statute, a judge has the option of ordering restitution “immediately,” “over a specified period of time,” or “in specified installments.”

Fernandez begins with the assumption that the payment plan chosen from the “within a specified period” option, the court said. Next, the court continued, Fernandez assumes that placing a defendant on probation automatically puts him on the “within a specified period” plan.  Then Fernandez infers that when probation is imposed and the “within a specified period” concept comes into play, the total ordered restitution must be paid before the end of probation, the court said.

In actuality, the option to pay “within a specified period” is not equivalent to the period of probation, the court found. The court noted that neither of the other two payment options carry that kind of limitation and that Fernandez had only found this restriction for the “within a specified period” alternative by applying unrelated language in the statute.

There may be temporal overlap between the period of restitution payment and a term of probation, but they are independently determined, the court remarked. The court rejected an effort to link them as an attempt to rewrite the statute.  “Reading the statute the way Fernandez urges would mean that probation essentially determines the maximum amount that can be set in restitution and would rewrite the ‘ability to pay’ consideration to become the ‘ability to pay within the period of time of probation,’” the court said.

Further, the court said that Fernandez’s interpretation would unfairly impair the judge’s discretion to determine how much restitution to order. “The ‘before the end of the sentence’ rule, as applied here, would limit restitution to under $10,000 while the damages were six times that amount,” the court said.

“Adopting such a rule might create incentives to increase the length of probation ordered, as well,” the court continued, noting that it is improper to use probation solely to seek payment of restitution.

The court noted that the Legislature recognized that there would be circumstances where all the necessary restitution would not be paid upon completion of the sentence or probationary period when it provided for conversion of unpaid restitution into a civil judgment.

Does justice require payment to insurance companies?

A sentencing court must order restitution to crime victims upon consideration of the defendant’s ability to pay, but such an order in favor of an insurer is discretionary and is given only “if justice so requires.”

Fernandez argued that justice did not require a man who washes dishes for a living to reimburse insurance companies worth billions of dollars. A majority of justices were unmoved by this argument, simply commenting that the lower court appeared to have applied the correct legal standard to the evidence of the costs.

Justice Ann Walsh Bradley, joined by Chief Justice Shirley Abrahamson, vigorously dissented.

“Rather than requiring adherence to the plain language of the statute, the majority looks the other way and concludes that the circuit court ‘appears to have applied the correct legal standard,’” wrote Bradley, joined by Chief Justice Shirley Abrahamson.

“A review of the record reveals that the circuit court’s only articulated standard was: ‘they paid money,’” Bradley wrote. This is not a sufficient basis to lump insurance companies together with the victims and does not satisfy the heightened legal standard of “if justice so requires,” she concluded.