2014 Opinion No. 3
Appeal from the District Court of the Fourth Judicial District, State of Idaho, Ada County. Hon. Darla S. Williamson, District Judge.
Sara B. Thomas, State Appellate Public Defender; Shawn F. Wilkerson, Deputy Appellate Public Defender, Boise, for appellant. Shawn F. Wilkerson argued.
Hon. Lawrence G. Wasden, Attorney General; Jessica M. Lorello, Deputy Attorney General, Boise, for respondent. Jessica M. Lorello argued.
GUTIERREZ, Chief Judge
Kristi L. Hurles appeals from the judgment of conviction entered upon her guilty plea to one count of grand theft, in violation of Idaho Code §§ 18-2403(2)(b) and 18-2407(1)(b). After holding restitution hearings, the district court ordered Hurles to pay $204, 174.61 in restitution, under Idaho Code § 19-5304, for embezzlement losses and the victim's attorney fees. Hurles argues the district court erred by determining that the holders of the accountant-client privilege did not impliedly consent to waive the privilege. Hurles also contends the district court abused its discretion by awarding restitution for the alleged embezzlement that occurred outside of the time period of the theft Hurles pled guilty to. Furthermore, Hurles claims the restitution award for the embezzlement losses is not based on substantial evidence. As for the attorney fees restitution award, Hurles maintains that the district court abused its discretion by awarding attorney fees incurred by the victim for civil cases. For the reasons that follow, we reverse the restitution order in part, affirm in part, and remand the case to the district court.
FACTS AND PROCEDURE
The evidence adduced at the restitution hearings reveals that Hurles worked for a Boise bar and grille (the business and victim) for a total of twenty years. She was a trusted employee and most recently served as the business's bookkeeper. Hurles also served as a bartender. One of Hurles' duties as a bartender was to sell Idaho State Lottery pull-tabs and to pay out on the winning pull-tabs. As the bookkeeper, Hurles was one of two employees, besides the owners, authorized to stock the on-site ATM with petty cash; Hurles, though, was primarily responsible for stocking the ATM. Hurles would also often make the daily deposit at the bank.
After noticing that the business was not receiving the expected commissions from the pull-tab operation, the owners of the business contacted the Idaho State Lottery. The Idaho State Lottery conducted an investigation and determined that Hurles had inflated the pay-out amounts of winning pull-tabs, keeping the excess amounts for herself. In a letter to the Ada County Prosecutor, the Idaho State Lottery Enforcement Division informed the prosecutor of its determination that Hurles had embezzled approximately $10, 000 via inflated lottery pull-tab payouts.
The business owners also contacted the Boise Police Department because they were made aware of a discrepancy involving petty cash replenishment checks. An on-site ATM was owned by a third party, but operated by the business. The business was responsible for placing cash in the ATM. The ATM owner would reimburse the business for amounts withdrawn from the ATM and pay the business a portion of the fee collected on each transaction. When the ATM needed to be refilled, a process was implemented to replenish the ATM with cash from the petty cash safe and to track the replenishment of the petty cash through an "IOU" marker and a replenishment check. The petty cash replenishment check was to be deposited in the business's bank account with the other daily receipts; the amount of petty cash originally removed to replenish the ATM, as written on the replenishment check, was to be replaced with the daily cash receipts. The goal of the process was to maintain a steady balance of petty cash in the petty cash safe and to keep track of the amount of money placed in the ATM. After the Boise Police Department began their investigation, Hurles admitted to the police that she had taken money from the business; she estimated she had taken around $20, 000 to $50, 000. There is no dispute that Hurles was cashing checks and retaining monies she was supposed to deposit into the business's bank account.
As a result, Hurles was charged by information with two counts of grand theft, each occurring "on or between the 30th day of December, 2008 and the 31st day of December, 2009." (for simplicity, this is referred to as the December 2008 to December 2009 time period). One count related to the lottery pull-tab commissions; the other count related to the petty cash replenishment checks. Hurles and the prosecutor reached a plea agreement wherein Hurles agreed to plead guilty to the count relating to the petty cash replenishment checks and the State agreed to dismiss the other count. The plea agreement was not reduced to writing, but was instead offered into the record orally by the prosecutor at the plea hearing. Following the plea hearing, the district court scheduled a restitution hearing and requested a presentence investigation (PSI) report be prepared.
At the first restitution hearing, the State presented testimony from three witnesses: an Idaho State Lottery investigator; a paralegal, employed by the law firm retained by the business, who prepared a spreadsheet of losses related to the petty cash replenishment checks; and one of the owners of the business. The lottery investigator testified to the steps she used in determining that the business was short $10, 000 from the lottery pull-tab commissions. The paralegal testified that she reviewed copies of checks provided by the owners and then constructed a spreadsheet based on her review of the checks. The spreadsheet was entered into evidence. The spreadsheet contained "a small portion of the universe of checks" the paralegal reviewed because it contained only the checks that were cashed.
The paralegal testified she reached a total of $153, 920 in petty cash replenishment check losses from 2005 through 2010. This total was based on the sum of cashed checks that were: (1) stamped "for deposit only, " but endorsed by Hurles (totaling $7, 200); (2) unstamped, but endorsed by Hurles (totaling $27, 760); (3) stamped "for deposit only, " but with the stamp stricken and endorsed by Hurles (totaling $4, 300); and (4) stamped "for deposit only, " but not endorsed (totaling $114, 660). Excluded from the restitution total, according to the paralegal, were cashed checks that were: (1) stamped "for deposit only, " but endorsed by someone other than Hurles (totaling $11, 100); (2) unstamped and not endorsed (totaling $99, 110); (3) unstamped, but endorsed by someone other than Hurles (totaling $5, 400); (4) unstamped, but signed by an unauthorized signatory (totaling $4, 100); (5) stamped with the business's typical deposit stamp, but not stamped "for deposit only" (totaling $500); and (6) stamped "for deposit only, " but with the stamp stricken and endorsed by someone other than Hurles (totaling $6, 600).
One of the owners of the business testified and was cross-examined by Hurles' defense attorney. Following this witness, Hurles' defense attorney informed the district court that he wished to call the business's accountant. The district court then scheduled a second restitution hearing.
At the second restitution hearing, Hurles' defense attorney called the business's accountant to testify. The accountant testified to his employment and confirmed the business was a client. Hurles' defense attorney asked the accountant if the accountant was familiar with the ATM balance problem, to which the accountant said yes. The defense attorney then asked the accountant to describe the nature of the ATM balance problem. At that point, the prosecutor informed the court that the owners of the business wished to assert their accountant-client privilege. After discussion between the court, Hurles' defense attorney and the prosecutor, the court excused the accountant from the stand. Also during the second restitution hearing, the prosecutor offered a revised total embezzlement loss of $155, 440, including both the lottery and petty cash replenishment check losses, after correcting some errors discovered during and in the period following the first hearing. The court continued the hearing.
At the third restitution hearing and sentencing, Hurles' defense attorney informed the court that the defense had no other witnesses. Hurles' defense attorney, the prosecutor, and the court then began a discussion concerning the accountant and whether the accountant-client privilege had been waived. Following the discussion, the court moved forward with sentencing and heard statements from the owners, arguments from the prosecutor and defense attorney, and heard a statement from Hurles. The district court then sentenced Hurles to a unified term of fourteen years, with two years determinate, and ordered restitution in favor of the business in the amounts of $155, 440 for embezzlement losses and $48, 734.61 for attorney fees for civil cases. Hurles appeals.
Hurles argues four points on appeal: (1) the district court erred by determining that the owners of the business did not impliedly consent to waive their accountant-client privilege; (2) the district court abused its discretion by awarding restitution for the alleged embezzlement that occurred outside of the time period of theft Hurles pled guilty to; (3) the restitution award for the embezzlement losses is not based on substantial evidence; ...