THE PEOPLE, Plaintiff and Appellant, v. NOLAN TAKAO NONAKA, Defendant and Respondent. (Cal. Ct. App., Sept. 30, 2022, No. 2D CRIM. B313848) 2022 WL 4591497, at *1–3
Summary: The People appeal the denial of the motion for victim restitution, including attorney fees and costs, after Nonaka was convicted by plea of felony driving with a .08 blood alcohol level or higher causing bodily injury. The People contend the trial court erred when it concluded the civil settlement and release of liability signed by the victim in the civil case discharged Nonaka’s obligation to pay restitution in the criminal case. The Court of Appeal agreed and reversed.
While driving with a blood alcohol level of .14 percent, Nonaka ran a red light and crashed into another vehicle, severely injuring its occupants. As part of the negotiated plea, Nonaka acknowledged that he would be ordered to pay victim restitution in an amount to be determined at a restitution hearing in criminal court. The victims hired an attorney on a contingency fee basis and settled a civil lawsuit against respondent. This settlement was paid by Nonak’s insurance carrier and as part of this settlement, the victim signed a general release in which she agreed to “release, discharge and acknowledge as fully paid and compromised, all claims, demands and causes of action” against Nonaka and his insurance carrier. (Capitalization omitted.) The People of the State of California did not agree to this settlement.
Prior to the restitution hearing in criminal court, the People filed briefing and requested that the trial court order respondent to pay victim restitution for attorney fees and costs. The briefing included the “Petition to Approve Compromise of a Disputed Claim for Minor,” and the release of liability.
At the restitution hearing, Nonaka’s counsel acknowledged that attorney fees “are compensable.” However, he argued that since the victims signed releases, they “have received full and complete compensation.” The People argued the fees were reasonable, and victim restitution is consistent with the intent of the law to make the victim whole.
The trial court denied the People’s motion. The trial court also stated, “The negotiated settlement between the parties to the civil action was an arm’s length transaction in which the victims knew precisely what their net recovery would be following the deduction of fees and costs. Accepting this settlement established that net recovery as the reasonable compensation for their damages and, therefore, the recovery they were entitled to.”
Restitution is constitutionally required “in every case in which a victim has suffered economic loss as a result of the defendant’s conduct,” regardless of the sentence or disposition imposed. (Cal. Const., art. I, § 28, subd. (b)(13)(B); Pen. Code, § 1202.4, subds. (f), (a)(1).) Actual and reasonable attorney fees are among the economic losses properly addressed by a restitution order. (Pen. Code, § 1202.4, subd. (f)(3)(H).)
Release of Liability Did Not Discharge Respondent’s Constitutional Obligation to Pay Restitution
The People contend the trial court erred when it denied the victim’s attorney fees and costs because the civil settlement did not discharge respondent from his constitutional obligation to pay restitution in the criminal case.
A restitution order does not simply indemnify a crime victim for her economic losses, but also seeks to rehabilitate and deter the defendant from future criminality. (People v. Bernal (2002) 101 Cal.App.4th 155, 161-162.) A civil settlement between a victim and the defendant’s insurer does not relieve the defendant of his restitution obligation to the state. However, settlement payments made to a victim on the defendant’s behalf must be used to offset the restitution award “to the extent that those payments are for items of loss included in the restitution order.” (Id. at p. 168; People v. Vasquez (2010) 190 Cal.App.4th 1126, 1134-1135 (Vasquez).)
A settlement with an insurance company and the state’s right to compel a defendant to pay restitution “operate independently” of each other. (People v. Grundfor (2019) 39 Cal.App.5th 22 (Grundfor), at p. 28.) Legal expenses incurred by a victim to recover these damages from appellant’s insurance carrier are proper, necessary, and a logical result of criminal conduct.
Here, the People seek, $58,750 in attorney fees and $2,824.44 in costs.
Nonaka Did Not Meet His Burden to Show the Attorney Fees were Unreasonable or that Offset was Required
Evidence showing what a victim actually paid as attorney fees is “ ‘prima facie evidence of a loss entitling [the victim] to compensation.’ ” (Grundfor, supra, 39 Cal.App.5th at p. 31.) The burden then shifts to the defendant to disprove that amount or to seek an offset. (People v. Fulton (2003) 109 Cal.App.4th 876, 886-887 (Fulton)
Here, the People presented evidence that the victim received a civil settlement of $235,000. Of the settlement, $61,574.44 was paid to the attorney as a contingency fee of 25 percent plus costs.
A “crime victim who seeks redress for his injuries in a civil suit can expect to pay counsel with a contingency fee.” (Taylor, supra, 197 Cal.App.4th at p. 763; Fulton, supra, 109 Cal.App.4th at p. 889.) The People established that the victim paid her attorney a contingency fee of 25 percent as well as costs so the burden shifted to respondent to refute this showing. (See Vasquez, supra, 190 Cal.App.4th at p. 1137; People v. Millard (2009) 175 Cal.App.4th 7, 33-34.) This he did not do.
The trial court’s order is reversed. The matter is remanded with directions to enter a restitution order consistent with this opinion.
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