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Commonwealth v. Hunt

Superior Court of Pennsylvania

October 1, 2019

BRIAN F. HUNT Appellant

          Appeal from the Order Entered May 4, 2018 In the Court of Common Pleas of Dauphin County Criminal Division at No(s): CP-22-CR-0004356-2016

          BEFORE: BOWES, J., OLSON, J., and STABILE, J.


          BOWES, J.

         Brian F. Hunt appeals from the May 4, 2018 order denying his request for the modification of restitution imposed pursuant to 18 Pa.C.S. § 1106. After careful review, we reverse and remand for resentencing.

         The order of restitution at issue in this case stems from Appellant's guilty pleas to two felonies in connection with his misappropriation of funds from his former employer, Bass Pallets LLC ("Bass Pallets"), a Pennsylvania limited liability company that purchases and repurposes used pallets. While employed by Bass Pallets, Appellant had the authority to write checks on behalf of the company, and used that authority to initiate a series of sham transactions by writing checks from Bass Pallets to two unindicted co-conspirators, Jeff Stickle and Johanna Rodriguez-Cruz, in exchange for illusory sales of pallets. The co-conspirators then cashed these fraudulent instruments and split the resulting proceeds with Appellant. On July 27, 2016, Appellant was charged by criminal complaint with theft by unlawful taking, 18 Pa.C.S. § 3921(a), and forgery, 18 Pa.C.S. 4101(a)(2), following surveillance and investigation conducted by the Pennsylvania State Police. See Trial Court Opinion, 10/17/18, at 1-3.

         On February 1, 2018, Appellant pleaded guilty to both charges and was sentenced to sixty months of intermediate punishment, with the first nine months to be served under house arrest. See February 1, 2018 Guilty Plea Order at 1. As part of his sentence, Appellant was directed to pay restitution in the amount of $37, 625 to Bass Pallets pursuant to § 1106. This restitution reflected the total amount of all checks written to Stickle and Rodriguez-Cruz that "had no supportive documents legitimizing the transactions." See Trial Court Opinion, 10/17/18, at 2-3; see also February 1, 2018 Restitution Information at 1. During his guilty plea colloquy, Appellant requested a hearing to modify the restitution imposed by the trial court, which was granted. See February 1, 2018 Order.

         On May 4, 2018, the trial court held a modification hearing, at which Appellant argued that the trial court was not statutorily empowered to impose restitution upon him under § 1106 with respect to a limited liability company, citing our Supreme Court's holding in Commonwealth v. Veon, 150 A.3d 435 (Pa. 2016) in support of his position. See N.T. Modification Hearing, 5/4/18, at 4. An off-the-record sidebar took place concerning the legal specifics of Appellant's claims and the Commonwealth adduced factual testimony from Jeffrey L. Stoner, one of the co-owners of Bass Pallets. Id. at 3-24. At the conclusion of the hearing, the trial court declined to modify its restitution order, notwithstanding Appellant's argument that Bass Pallets was not a proper "victim" for the purposes of § 1106 under Veon. Id. at 24-25 (emphasis added). An order denying Appellant's request for modification of restitution was entered the same day. On June 4, 2018, Appellant timely filed a notice of appeal.[1] On June 6, 2018, the trial court directed Appellant to file a concise statement of matters complained of on appeal pursuant to Pa.R.A.P. 1925(b), and Appellant timely complied.

         Appellant essentially argues that it was "illegal for the court to order restitution to a victim who is a limited liability company because the definition of 'victim' in the version of Pennsylvania's restitution statute (18 Pa.C.S. § 1106) applicable on the offense dates of the instant prosecution failed to include any non-human business entity other than an insurance company . . . ." See Appellant's brief at 4; see also Appellant's Rule 1925(b) Statement at ¶ 6 ("As the restitution in this matter was ordered to compensate a business entity that is neither an enumerated victim under the statute nor an actual person, [the trial court] erred in ordering restitution in this matter."). The gravamen of Appellant's argument is that the definition of "victim" set forth at 18 Pa.C.S. § 1106 does not include corporate entities like Bass Pallets, rendering the restitution portion of Appellant's sentence illegal under Pennsylvania law.

         We note that "[i]n the context of criminal proceedings, an order of 'restitution is not simply an award of damages, but, rather, a sentence.'" Commonwealth v. Atanasio, 997 A.2d 1181, 1182-83 (Pa.Super. 2010) (quoting Commonwealth v. C.L., 963 A.2d 489, 494 (Pa.Super. 2008)). As such, "[a]n appeal from an order of restitution based upon a claim that a restitution order is unsupported by the record challenges the legality, rather than the discretionary aspects, of sentencing." Id. at 1183 (citing Commonwealth v. Redman, 864 A.2d 566, 569 (Pa.Super. 2004)). Accordingly, "'the determination as to whether the trial court imposed an illegal sentence is a question of law; our standard of review in cases dealing with questions of law is plenary.'" Id. (quoting Commonwealth v. Hughes, 986 A.2d 159, 160 (Pa.Super. 2009)). This case will also necessarily call upon us to engage in statutory construction, which similarly presents a pure question of law and also implicates the legality of Appellant's sentence. Commonwealth v. Shiffler, 879 A.2d 185, 189 (Pa. 2005) (citing Commonwealth v. Bradley, 834 A.2d 1127, 1131 (Pa. 2003)). Thus, our standard of review is de novo and our scope of review is plenary.

         Section 1106 was amended on October 24, 2018 by the Pennsylvania General Assembly during the pendency of this appeal but long after Appellant's criminal actions, guilty plea, and sentencing were completed. See 2018 Pa. Legis. Serv. Act 2018-145 (S.B. 897). Preliminarily, we observe that Appellant did not argue the retroactive application of § 1106 in his Rule 1925(b) concise statement. See Appellant's Rule 1925(b) Statement at ¶¶ 1-6. Nonetheless, both Appellant and the Commonwealth have devoted significant space in their respective briefs addressing which iteration of 18 Pa.C.S. § 1106 should be applicable to Appellant's sentence. See, e.g., Appellant's brief at 23-27; Commonwealth's brief at 8-10. However, the trial court did not apply the "new" version of § 1106 in crafting the restitution portion of Appellant's direct sentence.[2] Rather, as we discuss infra, the trial court properly applied the pre-amendment version of § 1106 in fashioning Appellant's sentence, but in doing so, it erroneously enlarged the definition of victim to include a corporate entity. See Trial Court Opinion, 10/17/18, at 6-9, 10-11.

         Instead, the retroactive application of the amendments to § 1106 is presented by the Commonwealth as a type of "savings" argument:

[A]fter the lower court in this instance filed its memorandum opinion, the General Assembly rewrote the definition of "victim" in 18 Pa.C.S. § 1106(h) on October 24, 2018. The new definition, as [Appellant] concedes, includes limited liability companies as victims. This new definition applies to [Appellant] as his judgment of sentence is not yet final and the General Assembly indicated that the 2018 amendment was effective immediately.

         Commonwealth's brief at 8. In apparent anticipation of the Commonwealth's claim, Appellant argues that the ex post facto application of the amended version of § 1106 would violate Article I, § 10 of the U.S. Constitution ("No State shall . . . pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any title of Nobility.") and Article I, § 17 of the Pennsylvania Constitution ("No ex post facto law, nor any law impairing the obligation of contracts, or making irrevocable any grant of special privileges or immunities, shall be passed."). See Appellant's brief at 23-27.

         We decline to give retroactive effect to the October 24, 2018 amendments to § 1106. While Pennsylvania's rules of statutory construction clearly provide that the General Assembly may give retroactive effect to legislation, it requires that the legislature do so unambiguously. See 1 Pa.C.S. § 1926 ("No statute shall be construed to be retroactive unless clearly and manifestly so intended by the General Assembly."). In relevant part, the legislation adopted by the General Assembly provides only that "[t]his act shall take effect immediately," see 2018 Pa. Legis. Serv. Act 2018-145 (S.B. 897) at § 3, and no provision therein explicitly calls for its retroactive implementation. Moreover, this Court has already held that these specific amendments to § 1106 should not be effective in criminal cases that began before the effective date of the legislation, holding that "[b]ecause the events that led to [a]ppellant's conviction occurred before October 24, 2018, [the since-repealed] version of the statute applies." Commonwealth v. Tanner, 205 A.3d 388, 396 n.7 (Pa.Super. 2019).[3] In Tanner, the appellant challenged the portion of his direct sentence requiring him to pay substantial restitution to Shenango Township in Lawrence County, Pennsylvania under § 1106. Id. at 395-96. Ultimately, this Court concluded this restitution was illegal because Shenango Township was not considered a "victim" under the relevant statutory provisions, relying directly upon our Supreme Court's guidance in Commonwealth v. Veon, 150 A.3d 435 (Pa. 2016). Id. at 398.

         Turning to the factual background of this case, we note that: (1) the events that formed the basis for Appellant's guilty plea took place during or about July 2016; (2) Appellant pleaded guilty and was sentenced on February 1, 2018; and (3) Appellant's challenge to the trial court's sentence of restitution was denied on May 4, 2018. See Trial Court Opinion, 10/17/18, at 1-3. Thus, all of the relevant events predate the effective date of the at-issue amendments to § 1106 by months (or years). In light of our previous holding in Tanner and the command of § 1926, we conclude that the October 24, 2018 amendments to § 1106 are not applicable in the instant case. Accordingly, we decline to address the constitutionality of ex post facto application of the amendments to § 1106 in this memorandum.[4], [5]

         Turning to the discrete issue of statutory interpretation, we must determine whether the trial court was properly empowered to sentence Appellant to pay restitution to a limited liability company under the pre-amendment version of § 1106. It is well-established under Pennsylvania law that "[r]estitution is a creature of statute and, without express legislative direction, a court is powerless to direct a defendant to make restitution as part of his sentence." Commonwealth v. Kinnan, 71 A.3d 983, 986 (Pa.Super. 2013) (citing Commonwealth v. Harner, 617 A.2d 702, 704 (Pa. 1992)). While Pennsylvania statutes generally should be construed liberally, "penal statutes are always to be construed strictly, and any ambiguity in a penal statute should be interpreted in favor of the defendant." Shiffler, supra at 189 (citing Commonwealth v. Driscoll, 401 A.2d 312, 316 (Pa. 1979)); see also 1 Pa.C.S. § 1928(b)(1). Finally, "where restitution is imposed in addition to a statutory punishment, such as imprisonment, the order must be strictly scrutinized since its purpose is primarily punitive." Harner, supra at 704 (Pa. 1992) (citing Commonwealth v. Walton, 397 A.2d 1179, 1184 (Pa. 1979)).

         The pre-amendment version of § 1106 provides as follows:

(a) General rule.--Upon conviction for any crime wherein property has been stolen, converted or otherwise unlawfully obtained, . . . or wherein the victim suffered personal injury directly resulting from the crime, the offender shall be sentenced to make restitution in addition to the punishment prescribed therefor.
. . . .
(c) Mandatory restitution.- ...

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