State of Maine v. Wendy L. Gagne , 199 A.3d 1179 ( 2019 )

MAINE SUPREME JUDICIAL COURT Reporter of Decisions
Decision: 2019 ME 7 Docket: Ken-18-152
Argued: November 6, 2018
Decided: January 17, 2019
Panel: SAUFLEY, C.J., and ALEXANDER, MEAD, GORMAN, JABAR, HJELM, and HUMPHREY, JJ.
STATE OF MAINE
v.
WENDY L. GAGNE
ALEXANDER, J.
[¶1] Wendy L. Gagne appeals from an order to enforce payment of
restitution entered by the Superior Court (Kennebec County, Stokes, J.)
following a hearing on a motion to enforce payment of a restitution obligation
originally imposed as part of a 2003 sentence imposed by the court
(Studstrup, J.). Because the motion court erred in imposing the burden on
Gagne to prove the current balance of the court-ordered restitution for the
victim’s uncompensated losses—information more accessible to the State
because it relates to or is available from the victim of the crime—we vacate and
remand for a further hearing.
2
I. CASE HISTORY
[¶2] The relevant facts are drawn from the docket entries, the trial
court’s file and the record of the motion hearing.
[¶3] On October 10, 2002, Gagne waived indictment and was charged by
information with theft by deception (Class B), 17-A M.R.S. § 354(1), (2)(A)
(2017).1 Maine Pulp and Paper Association (MPPA), Gagne’s employer, was
identified as the victim of the theft. Gagne initially pleaded not guilty, but on
October 30, 2002, she changed her plea to guilty of the Class B theft, with the
case continued for sentencing.
[¶4] Following her plea, but prior to sentencing, Gagne and her husband,
as part of an effort to compensate MPPA for losses occasioned by the theft,
granted mortgages to MPPA on properties they owned located in Augusta,
Gardiner, and Pittston.
[¶5] Sentencing occurred on February 6, 2003. On Gagne’s plea of guilty
to theft by deception (Class B), the court sentenced Gagne to the Department of
Corrections for a term of seven years, with all but thirty months suspended, to
be followed by probation for a term of four years. As part of the judgment,
1 The crime at issue was committed throughout the years of 1997-2002. The theft statute
applicable during that time does not differ materially from the current theft statute in any way
relevant to this appeal. Cf. 17-A M.R.S.A. § 354 (1983 & Supp. 2002); 17-A M.R.S.A. § 354 (1983).
3
Gagne was ordered to pay restitution in the amount of $400,000. Gagne’s
conditions of probation separately required that she pay a “maximum” amount
of restitution of $400,000 for the benefit of MPPA.
[¶6] In March 2009, around the time when Gagne’s term of probation
would have been scheduled to end, the State filed a motion to revoke Gagne’s
probation because the ordered restitution had not been paid in full. Following
a hearing on December 10, 2009, the court (Mills, J.) denied the motion. The
facts related to the 2009 hearing are addressed in the 2017 motion court’s
findings, stated below. The record does not indicate that Gagne’s term of
probation was extended beyond its scheduled expiration.
[¶7] In June 2016, the State filed a motion to enforce payment of
restitution. In January 2017, Gagne filed a motion to dismiss the motion to
enforce. The grounds for the motion to dismiss were (1) res judicata based on
the 2009 denial of the motion to revoke probation for nonpayment of
restitution and (2) the early 2017 dissolution of MPPA. The motions were
heard on April 28, 2017, and decided by an opinion (Stokes, J.) dated
May 4, 2017. In that decision, the court ordered Gagne to pay $200 per month
beginning in May and indicated that a further hearing would be scheduled for
June to determine the amount of any credit to be given to Gagne for any funds
4
recovered by MPPA from insurance or foreclosure of the three mortgages given
by Gagne and her husband.
[¶8] Gagne filed an appeal from the May 4, 2017, order. We dismissed
that appeal as interlocutory because the order contained a footnote stating that
the court had “scheduled a follow-up hearing” in case there was a “need to take
additional evidence relevant to the issue of whether the victim has received
compensation from a collateral source or has received any proceeds from the
mortgaged real estate.” After remand, however, the motion court indicated that
its decision was final and that no further hearing would be scheduled. In
April 2018, Gagne filed a timely notice of appeal from the motion court’s final
order. See 15 M.R.S. § 2115 (2017); M.R. App. P. 2A, 2B.
[¶9] The relevant facts are outlined in the following findings of fact stated
by the motion court. These findings are supported by competent evidence in
the record. See State v. Nisbet, 2018 ME 113, ¶ 9, 191 A.3d 359.
As part of the [2003] judgment and commitment the sentencing
court ordered [Gagne] to make restitution in the amount of
$400,000 for the benefit of the victim. As a condition of her
probation, [Gagne] was ordered to pay restitution in the
“maximum” amount of $400,000 for the benefit of the named
victim.
In his letter to the sentencing court, [MPPA’s attorney]
requested restitution for his client in the amount of $367,400,
which represented the claimed theft of $400,000 minus payments
5
already made by [Gagne] to MPPA of $32,600. The State sought an
identical amount of restitution. State’s Exhibit 1 admitted at the
hearing on April 28, 2017, reflects restitution payments made by
[Gagne] while incarcerated and/or on probation totaling
$15,317.39.
The court finds that the $400,000 restitution amount made
part of [Gagne’s] judgment and her probation, was intended to be a
maximum amount before application of any cash payments made
by [her] to the victim. Accordingly, the court further finds that
[Gagne] has made cash payments totaling $47,917.39 ($32,600 +
$15,317.39), leaving a balance of $352,082.61 prior to the
application of any other credits to which [Gagne] may be entitled
as discussed below.
In his letter to the sentencing court dated January 29, 2003,
[MPPA’s attorney] made reference to three (3) properties owned
by [Gagne] in the central Maine area as to which [Gagne] (and
apparently her husband) granted the victim mortgages. At the
hearing on April 28, 2017, [Gagne] offered into evidence
Defendant’s Exhibits 1, 2 and 3 being recorded mortgage deeds on
real estate in Pittston, Augusta and Gardiner, respectively, each
dated January 31, 2003. [Gagne] testified that neither she nor her
husband had any further ownership interest in these properties,
and she had no knowledge or information about the properties at
this time.
[Gagne] also raised the possibility that MPPA may have
received an insurance settlement as a result of [Gagne’s] employee
theft, but no details of any such payment was provided to the court.
During a hearing on the State’s Motion to Revoke [Gagne’s]
Probation held on December 10, 2009 (Mills, J.), [Gagne] presented
several letters her counsel had sent to [MPPA’s attorney] in 2009
seeking information regarding any insurance payments and/or any
proceeds obtained from the foreclosure of the 3 properties that
were the subject of the mortgage deeds identified as Defendant’s
Exhibits 1, 2 and 3. . . . According to counsel for [Gagne], [MPPA’s
6
attorney] did not provide any information regarding insurance
payments or any proceeds from the three parcels of real estate.
. . . [Gagne’s] obligation to make restitution was part of the
sentencing judgment, in addition to being a condition of her
probation. See 17-A M.R.S. §§ 1326-A, 1326-F and 1329.
. . . [Gagne] argues[] there is no longer a victim for whose
benefit restitution must be paid. The Maine Criminal Code does not
appear to clearly address this issue. Nevertheless, the court
concludes that the corporation’s entitlement to restitution from
[Gagne] is an asset of the corporation and the directors of the
corporation, as liquidating trustees, have the authority to dispose
of any undistributed property of the corporation. See 13-B M.R.S.
§§ 1111(2) and 1104(1)(D) & (2).
. . . .
. . . The court agrees that it is the State’s initial burden of
proving “the extent of the victim’s loss.” State v. Berube,
1997 ME 165, ¶ 19, 698 A.2d 509. On that issue, the State has
satisfied its burden. In the court’s view, it is [Gagne’s] burden to
present evidence that she should be credited with additional amounts
that may have been subsequently paid to the victim from a collateral
source or from the sale of the three parcels of mortgaged real estate.
(Emphasis added.) [After this sentence, the court added a footnote
stating that a “follow-up hearing” was set for June 30, 2017, “if
there is a need to take additional evidence relevant to the issue of
whether [MPPA] has received compensation from a collateral
source or has received any proceeds from the mortgaged real
estate.”]
During her testimony on April 28, 2017, [Gagne] stated that
based on her current income and financial resources she has the
ability to pay $200 per month towards restitution.
Based upon the foregoing, the court finds that [Gagne] is in
default of her obligation to make restitution and further finds that
7
the default was not inexcusable. IT IS ORDERED, that [Gagne] shall
pay restitution for the benefit of the victim as follows: up to the
amount of $352,082.61 in payments of $200 per month beginning
in May, 2017, to be paid to the Office of the District Attorney . . . .
[¶10] Gagne contends that the motion court’s conclusion that she was in
default of her obligation to pay restitution was error for four reasons: (1) the
court’s 2009 ruling denying the State’s motion to revoke Gagne’s probation
stands as res judicata on the issue of default; (2) 17-A M.R.S. § 1326-F (2017)
does not apply because it was not in effect when the offense was committed
during the years of 1997-2002; (3) the restitution order is not enforceable
because MPPA has been dissolved; and (4) the court was not presented with
sufficient evidence to conclude that any amount of restitution remained unpaid
and, if so, in what amount.
II. LEGAL ANALYSIS
[¶11] A court’s factual findings are reviewed for clear error and the legal
conclusions it derived from those findings are reviewed de novo. See State v.
8
Milliken, 2010 ME 1, ¶ 19, 985 A.2d 1152. Questions of statutory interpretation
are reviewed de novo. See State v. Knight, 2016 ME 123, ¶ 9, 145 A.3d 1046.
A. Res Judicata
[¶12] Gagne contends that the motion court’s 2009 ruling that denied
the State’s motion to revoke her probation is res judicata on the issue of
whether she defaulted on her restitution obligation.
[¶13] “The doctrine of res judicata prevents the relitigation of matters
already decided: The law is plain that [parties] cannot again come forward in
the same legal mission against the same parties to secure a remedy . . .
previously denied.” Portland Water Dist. v. Town of Standish, 2008 ME 23, ¶ 7,
940 A.2d 1097 (alterations in original). Claim preclusion bars the relitigation
of a claim if
(1) the same parties or their privies are involved in both actions;
(2) a valid final judgment was entered in the prior action; and
(3) the matters presented for decision in the second action were,
or might have been, litigated in the first action.
Johnson v. Samson Constr. Corp., 1997 ME 220, ¶ 6, 704 A.2d 866. Although
there was a final judgment entered in the prior proceeding in this action that
involved the same parties, the issue litigated was whether Gagne had violated
conditions of probation. The Superior Court’s action on the probation
9
revocation motion did not address or otherwise affect the stand-alone
restitution provision in the judgment.
[¶14] As the legislative history of the probation laws indicates, the denial
of the motion to revoke probation did not terminate Gagne’s obligation to pay
restitution. See Comm. Amend. A to L.D. 882, Summary, No. S-305 (118th Legis.
1997) (“The option [in the bill] of allowing the court to revoke the unpaid
portion of the restitution in whole or in part has been removed as an apparent
unconstitutional intrusion into the Governor’s exclusive postconviction pardon
power.”); see also State v. Hunter, 447 A.2d 797, 799-803 (Me. 1982).
[¶15] Accordingly, principles of res judicata do not bar the pending
enforcement action.
B. Application of Section 1326-F
[¶16] Gagne further contends that the court erred by applying section
1326-F, which provides that “[a]n offender is responsible for paying any
restitution at the time the term of commitment to the Department of
Corrections or period of probation is completed,” and that because section
1326-F had not yet taken effect at the time of Gagne’s offense, we should
assume that the restitution provision of the judgment terminated upon her
discharge from probation or Department of Corrections supervision. We
10
review questions of statutory interpretation de novo. Knight, 2016 ME 123, ¶ 9,
145 A.3d 1046.
[¶17] Section 1326-F did not take effect until 2010—seven years after
Gagne’s conviction and eight years after the commission of the crime ended.
See P.L. 2009, ch. 608, § 14 (effective July 12, 2010). The legislative history of
the restitution statutes provides guidance to determine whether section
1326-F could be applied in the present case. The summary accompanying the
legislative document from which section 1326-F was drawn states, in pertinent
part:
The bill enacts a new section that comprehensively
addresses the situation in which an offender who has completed
the term of commitment to the Department of Corrections or the
period of probation still has not paid the restitution ordered by the
court in full. It provides notice to former Department of
Corrections’ clients still owing restitution that the duty to pay
remains; requires that monetary compensation continue to be paid
to the Department of Corrections; and requires that, unless
otherwise modified by the court, the time and method of payment
determined by the Department of Corrections during the former
term of commitment or period of probation continues to control.
L.D. 1789, Summary (124th Legis. 2010). We construe section 1326-F to
confirm the then-existing continuing obligation to pay the restitution required
by the judgment, to provide clarity to the then-existing practice, and to add the
requirement of notice to obligors of their obligations. The adoption of section
11
1326-F did not operate to terminate obligations to pay restitution imposed
prior to its enactment. C.f. Hunter, 447 A.2d at 803 (“[T]he power to reduce an
offender’s sentence on the basis of his post-conviction behavior is not part of
the traditional judicial power; rather, it is encompassed within the executive
commutation power.” (citation omitted)).
C. Effect of Dissolution of MPPA
[¶18] At the hearing, Gagne presented evidence that, in early 2017,
MPPA filed Articles of Dissolution with the Maine Secretary of State. Gagne
asserts that the restitution order is now unenforceable because there no longer
exists a victim to be made whole.
[¶19] “We examine [the restitution statutes] in the context of the entire
statutory scheme.” State v. Kendall, 2016 ME 147, ¶ 14, 148 A.3d 1230. Maine’s
restitution statutes are silent on the enforceability of an order of restitution
owed to a corporate entity that is dissolved after the issuance of the order. As
those statutes apply to other kinds of post-judgment changes in circumstances
affecting the victim of a crime, however, they are explicit. If a victim who is a
natural person dies after the court issues a restitution order, the State must
forward restitution payments to the victim’s estate. 17-A M.R.S. § 1326-C
(2017). If the victim’s location becomes unascertainable after the restitution
12
order is issued, the restitution payments must be forwarded to the State
Treasurer as unclaimed property. 17-A M.R.S. § 1326-D (2017).
[¶20] The combined effect of these statutes indicates a legislative resolve
to require criminal offenders to pay restitution and not excuse that obligation
because of post-judgment changes in the availability of the victim to receive
that compensation. The proper identification of the specific recipient—
whether it be the victim’s estate or a governmental entity—is a matter to be
determined by the State pursuant to the restitution statutes and has no bearing
on the defendant’s underlying obligation to pay restitution.
[¶21] There is no reason to treat the dissolution of a corporate victim
differently given the Legislature’s pronouncement that the purposes of
restitution include rehabilitating the offender and “reinforc[ing] the offender’s
sense of responsibility for the offense.” 17-A M.R.S. § 1321 (2017). If the
identity or location of a victim cannot be determined at the time of sentencing,
the court remains authorized to impose a restitution order, after which the
State must forward restitution payments to the county where the case is
prosecuted. 17-A M.R.S. § 1324(2) (2017). This demonstrates that even the
initial issuance of an enforceable restitution order is not predicated on the
availability of a victim. The dissolution of MPPA as a corporate entity therefore
13
did not render the restitution order unenforceable. See Allocca v. York Ins. Co.
of Me., 2017 ME 186, ¶ 22, 169 A.3d 938 (“[T]he fundamental rule in statutory
construction is that the legislative intent as divined from the statutory language
controls the interpretation of the statute.” (alteration in original)); Damon v.
S.D. Warren Co., 2010 ME 24, ¶ 10, 990 A.2d 1028 (“[W]here statutory
construction is at issue, we construe a statute to give effect to legislative intent.”
(citation omitted)).
D. Sufficiency of Evidence of Default
[¶22] Gagne contends that the court erred by finding that she had
defaulted on her obligation because the court was not presented with sufficient
evidence to conclude whether any restitution remained unpaid and, if it did, in
what amount.
[¶23] On restitution issues, the State has the initial burden to prove the
extent of a victim’s loss by a preponderance of the evidence. State v. Nelson,
2010 ME 40, ¶¶ 16-17, 994 A.2d 808; see also State v. Berube, 1997 ME 165,
¶ 19, 698 A.2d 509 (“[I]t is the burden of the State to produce evidence as to the
extent of the victim’s loss and to prove, by a preponderance, a causal connection
between the loss and the offender’s conduct.” (citations omitted)).
14
[¶24] As we conclude below, the burden to establish the amount still
owed remains with the State when it files a motion to enforce the restitution
obligation. In this case, the motion court found that Gagne had “made cash
payments totaling $47,917.39 ($32,600 + $15,317.39), leaving a balance of
$352,082.61 prior to the application of any other credits to which [Gagne] may
be entitled to as discussed below.” (Emphasis added.) The court went on to
discuss the three properties that Gagne owned to which she and her husband
granted MPPA mortgages, as well as a possible insurance settlement received
by MPPA. The court found that, although Gagne had sought information in 2009
regarding proceeds from the properties and possible insurance payments from
MPPA’s counsel, no information had been provided.
[¶25] At the time of the order, the court scheduled a follow-up hearing
for June 30, 2017, to take additional evidence regarding any compensation
received by the victim from the proceeds of real estate sales or collateral
sources. This hearing never occurred—after her initial appeal was dismissed
as interlocutory, the motion court determined that such a hearing “is not
necessary at this time” and declared the restitution order final for purposes of
the appeal. Thus, the restitution order was made final without evidence of what
amount, if any, Gagne should be credited for proceeds from the mortgage
15
foreclosures and real estate sales or other collateral sources—evidence which,
the record indicates, would be in the possession of MPPA or its attorney.
[¶26] While the restitution chapter of the Criminal Code makes clear that
the State has the burden to prove the amount of the victim’s loss and the
amount to be paid in restitution, Nelson, 2010 ME 40, ¶¶ 16-17, 994 A.2d 808,
it is silent regarding the burden of proving past restitution payments when a
default is alleged. Section 1325, which relates to criteria to be considered in
authorizing a restitution order in a criminal judgment, states the following
about burdens of proof, addressing only proof of incapacity to make payments:
An offender who asserts a present or future incapacity to pay
restitution has the burden of proving the incapacity by a
preponderance of the evidence. On appeal of a restitution order,
the offender has the burden of demonstrating that the incapacity
was proven as a matter of law.
17-A M.R.S. § 1325(4) (2017). The statutes provide no further guidance
regarding pre- and post-judgment burdens of proof in restitution matters. See
generally 17-A M.R.S. §§ 1321 to 1330-C (2017).
[¶27] Our precedents provide helpful insights. In State v. Bouchard,
2005 ME 106, ¶ 22, 881 A.2d 1130, we specifically noted that it “remains for
the Division of Probation and Parole to determine the actual amount that [the
defendant] should be required to pay in restitution” and “[i]n making that
16
determination, the probation officer should consider any evidence that may be
offered by [the defendant] as to how much of the [restitution amount] he used
[for legitimate purposes] that would reduce the total amount of the [victim’s]
economic loss, and thus the amount of restitution to be paid.” See also Nelson,
2010 ME 40, ¶ 17, 994 A.2d 808 (holding that the State met its burden of
proving the amount of restitution to be ordered when it presented the
testimony of a forester, whose testimony consisted of the method used to
calculate the value of stolen wood, and that “to the extent that [his calculation]
is imprecise, it is a ‘conservative’ estimate”).
[¶28] The State, directly or through access it may have to information
from MPPA, is in the better position to determine the restitution or insurance
payment information. Applying our general civil principles on assignment of
the burden of proof or persuasion, the State, on its motion to enforce, has the
burden of persuasion. See Dowley v. Morency, 1999 ME 137, ¶ 11,
737 A.2d 1061 (“[T]he party asserting the affirmative of controlling issues . . .
bears the risk of nonpersuasion.”); Markley v. Semle, 1998 ME 145, ¶ 5,
713 A.2d 945 (“The party who asserts the affirmative of the controlling issues
in the case, whether or not he is the nominal plaintiff in the action, bears the
risk of non-persuasion.”).
17
[¶29] Here, the State never met the burden assigned to it in Nelson and
Berube to determine the amount of MPPA’s loss, payments credited to cover
that loss, and thus the remaining sum that Gagne should have been obligated to
pay in restitution. The burden cannot be shifted to Gagne by imposing a “not to
exceed” restitution amount and then leaving it to her to learn from the
now-dissolved MPPA the amounts that MPPA had recovered from insurance
and from sale of her mortgaged properties—information Gagne had tried,
without success, to obtain from MPPA in 2009.
[¶30] The failure of proof by the party that bears the burden of proof
usually requires, as a matter of law, entry of a judgment adverse to that party.
See Nelson, 2010 ME 40, ¶¶ 16-17, 994 A.2d 808; c.f. Ma v. Bryan, 2010 ME 55,
¶ 6, 997 A.2d 755 (stating that it is the plaintiff’s burden of proof to establish
the elements of a cause of action). Such a result should not obtain here,
however, because neither the parties nor the court had the benefit of the
clarification that we provide today, and as a result the State was not on proper
notice that it was responsible for presenting evidence of the amount, if any, of
restitution that remains due.
[¶31] We therefore vacate the motion court’s order and remand for a
new hearing on the enforcement of the restitution obligation, with the State
18
having the burden to prove the restitution obligation remaining after receipt of
payments directly from Gagne, proceeds from the foreclosure and sale of the
mortgaged properties, and any proceeds from insurance.2
The entry is:
Order granting the State’s motion to enforce the
payment of restitution vacated. Remanded for further
proceedings as indicated in paragraph 31 of this
opinion.
Robert E. Sandy, Jr., Esq. (orally), Sherman & Sandy, Waterville, for appellant
Wendy L. Gagne
Maeghan Maloney, District Attorney, and Paul Cavanaugh II, Dep. Dist. Atty.
(orally), Office of the District Attorney, Augusta, for appellee State of Maine
Kennebec County Superior Court docket number CR-2002-316
FOR CLERK REFERENCE ONLY
2 These are the sources of satisfaction from collateral sources that have been suggested by the
record. Our holding today, that the State bears the burden of proving the outstanding balance of a
restitution obligation, should not be construed to mean that the State is required to account for any
imaginable credit, but only for payments or credits from sources identified in the evidence.