2015 Opinion No. 45
Appeal from the District Court of the Fourth Judicial District of the State of Idaho, Ada County. Hon. Darla S. Williamson, District Judge.
The district court's restitution order is affirmed in part, reversed in part, and vacated in part. The case is remanded for further proceedings.
Sara B. Thomas, State Appellate Public Defender, Boise, for appellant. Shawn F. Wilkerson argued.
Hon. Lawrence G. Wasden, Attorney General, Boise, for respondent. Jessica M. Lorello argued.
J. JONES, Justice. Chief Justice BURDICK, and Justices EISMANN, W. JONES, and HORTON CONCUR.
J. JONES, Justice
Kristi Hurles pleaded guilty to grand theft for embezzling from her employer, was sentenced to fourteen years with two years fixed, and was ordered to pay $204,174.61 in restitution. Hurles appealed, challenging the restitution order in a number of respects. The Court of Appeals initially considered the appeal, reversing the restitution order in part, affirming in part, and remanding the case to the district court. The State sought review, which this Court granted.
FACTUAL AND PROCEDURAL BACKGROUND
Hurles worked at the Crescent " No Lawyers" Bar and Grill (Crescent), owned by Jody and Butch Morrison, for 20 years. In recent years, Hurles was primarily responsible for maintaining Crescent's financial books, but she also spent time waiting tables and tending the bar. One of her duties as bartender was to sell and pay out on Idaho State Lottery pull-tabs. When the Morrisons noticed they were losing money on the lottery pull-tabs, they investigated and learned that Hurles' payouts on the game were over 12% higher than the maximum possible payout for the game. A lottery investigator concluded that Hurles had inflated the amount of the payouts by approximately $10,000 over the course of a year and pocketed that amount.
After learning of Hurles' theft with the lottery pull-tabs, the Morrisons began to suspect her of also being responsible for losses they were experiencing with their ATM since Hurles was responsible for maintaining a consistent balance in the machine. The Morrisons' accountant, James Warr, determined there had been a loss with respect to the operation of the ATM for each year 2004 through 2009. Hurles admitted to police that she would cash company checks to get money to stock the ATM but would then deposit only a portion of that cash into the machine, pocketing the remainder. She gave the example that if there was a $500 ATM check on a particular day, she would cash the check, put $400 into the ATM, and keep the other $100. Hurles admits she stole from Crescent in this manner for a year and a half, for a total of between $20,000 and $50,000. Based on the losses from the ATM for several years, Morrisons believed Hurles was stealing in this manner since 2004 until she was fired in 2010.
Based on the lottery investigation and Hurles' admission to stealing ATM funds, the State charged Hurles with two counts of grand theft. Count I alleged that between December 30, 2008, and December 31, 2009, she wrongfully took in excess of $1,000 " from the pull tab profits from the owner," while Count II alleged that between the same dates she wrongfully took in excess of $1,000 " from the ATM profits" of Crescent. Pursuant to a plea agreement, Hurles entered a guilty plea to Count II, while the State agreed to dismiss Count I. At the plea hearing, the State orally stated the plea agreement on the record, including a term referring to restitution though not specifying an amount.
The amount of restitution became highly contested, and the matter was set for a restitution hearing. A state lottery official testified that Hurles was responsible for stealing $10,000 through the lottery pull-tab payouts. That amount was part of the ultimate restitution award, and Hurles does not challenge that portion on appeal. The State also called a paralegal from the Givens Pursley law firm, which the Morrisons had hired to represent Crescent in civil litigation that arose in response to Hurles' thefts. The paralegal was responsible for organizing the information
from all the checks the Morrisons had written since 2005 for the purpose of internal accounting procedures, including stocking the ATM. The paralegal created a spreadsheet to document the different elements of these checks: check number, date, payee, whether they were stamped " for deposit only," who endorsed them, and any notes about the checks. This spreadsheet was simply a compilation of information taken from the checks themselves and does not reflect any information concerning what was done with the money after the checks were cashed, whether for example Hurles deposited the full amount of a particular check into the ATM, or only a portion, or kept it all. The State relied on this spreadsheet to reach the amount of restitution it ultimately requested in relation to Hurles' ATM thefts, $145,440. The district court advised the State that it wanted to know the amount the Morrisons had to spend in attorney fees that were related to Hurles' thefts because that amount should be included in the restitution order as well.
To rebut the amount of restitution claimed by the State, Hurles called the Morrisons' accountant to testify. However, the Morrisons asserted their accountant-client privilege when Warr was asked to describe the nature of the problem with the ATM balance at Crescent. Hurles argued the Morrisons had waived their privilege by (1) filing a lawsuit against Warr, (2) allowing Warr to talk to police and disclose certain documents in the presentence investigation (PSI) that tended to show amounts of the Morrisons' loss, and (3) testifying at the restitution hearing about Warr's work. The court seemed intrigued by Hurles' argument regarding Jody Morrison's testimony as to Warr's accounting work for Crescent. However, Hurles' attorney had only his personal notes from the previous hearing where she had testified, and the attorney admitted he had not reviewed the transcript and did not know specifically what had been asked or answered. Absent other evidence, the court decided to sentence Hurles based on the proof that had been offered up to that point. It did, however, tell Hurles' attorney that he would have thirty days to move for reconsideration to try to prove the accountant-client privilege had been waived or make an Idaho Criminal Rule 35 motion for reduction in sentence.
The district court ultimately ordered $204,174.61 in restitution, which consisted of (1) $10,000 from the lottery pull-tab thefts, (2) $145,440 from the ATM thefts, and (3) $48,734.61 for Morrisons' attorney fees. Hurles appealed the judgment of conviction, though her arguments are all related to the amount of restitution. On appeal, Hurles argues that the Morrisons implicitly waived their accountant-client privilege, that the restitution award was not based on substantial and competent evidence, and that the Morrisons' civil attorney fees were not an appropriate part of restitution. The case was originally assigned to the Court of Appeals, which affirmed in part, reversed in part, and remanded the case for further proceedings. This Court granted the State's petition for review.