State v. Sevastopoulos ( 2021 )

2021 UT 70IN THE
SUPREME COURT OF THE STATE OF UTAH
STATE OF UTAH,
Respondent,
v.
ATHANASIOS CAPTAIN SEVASTOPOULOS, acting as the personal
representative of the Estate of KATHLEEN SEVASTOPOULOS,
Petitioner.
No. 20200157
Heard September 13, 2021
Filed December 23, 2021
On Certiorari to the Utah Court of Appeals
Third District, Salt Lake
The Honorable James Blanch
No. 161904929
Attorneys:
Sean D. Reyes, Att’y Gen., William M. Hains, Asst. Solic. Gen.,
Salt Lake City, for respondent
Nathalie S. Skibine, Salt Lake City, for petitioner
ASSOCIATE CHIEF JUSTICE LEE authored the opinion of the Court
in which CHIEF JUSTICE DURRANT, JUSTICE HIMONAS, JUSTICE PEARCE,
and JUSTICE PETERSEN joined.
ASSOCIATE CHIEF JUSTICE LEE, opinion of the Court:
¶1 Kathleen Sevastopoulos made electronic transfers from her
elderly parents’ bank account to pay her credit card bills. Her
parents hired an attorney, who in turn hired an accountant, to look
into the transfers and seek to recover the funds. The attorney and
accountant identified hundreds of unauthorized transfers and
asserted claims against several credit card companies involved in
these transactions. Ultimately, the attorney and accountant incurred
fees in the amount of $40,000 and recovered $131,701.63 from the
credit card companies.
STATE v. SEVASTOPOULOS
Opinion of the Court
¶2 The State charged Sevastopoulos with one count of felony
theft and two counts of exploitation of a vulnerable adult. She pled
guilty to misdemeanor counts of theft and theft by deception. In
entering into this plea, Sevastopoulos signed a plea agreement
indicating that the charges against her were based on conduct arising
“[o]n or about January 17, 2015.” The agreement also stated that
Sevastopoulos had pled guilty to counts one and two, and the
amended information had listed the offenses as occurring “on or
about July 01, 2013 to January 17, 2015.” And it further provided that
Sevastopoulos would pay “any restitution that may be owed on
charges that are dismissed as part of [the] plea agreement.”
¶3 The district court sentenced Sevastopoulos to a term of 180
days in jail but suspended jail time in favor of probation on the
condition of her payment of restitution. It later held an evidentiary
hearing on the amount to be reflected in a restitution order. After
hearing testimony from the parents, the parents’ attorney and
accountant, and a detective, and upon consideration of documentary
evidence, the district court concluded that Sevastopoulos had
proximately caused economic injury in the amount of $148,243.27—
an amount calculated by subtracting attorney fees, accountant fees,
and money recovered from the credit card companies from the
amount that Sevastopoulos was found to have stolen from her
parents.
¶4 Sevastopoulos appealed. She challenged the decision to
include the fees incurred by the parents’ attorney and accountant in
the restitution order. She also raised a series of objections to the
inclusion of 219 electronic transfers in the calculation of the amount
of her parents’ losses, asserting that the State had failed to establish a
factual basis for (a) any transfers other than those that occurred on
the date listed in the plea agreement (January 17, 2015); (b) any
transfers that were tied to specific check numbers, or (c) any
transfers involving U.S. Bank. Finally, Sevastopoulos asserted that
the record established that two specific transfers (totaling $657.43)
had been authorized by her mother and should thus have been
excluded from the restitution award.
¶5 The State confessed error on the latter point and the court of
appeals reversed and remanded for entry of an amended order of
restitution. But the court of appeals rejected Sevastopoulos’s other
contentions. It upheld the inclusion of attorney fees and accountant
fees on the ground that they “fall directly within the parameters of
the third-party tort rule,” an established ground for recovery of
attorney fees. State v. Sevastopoulos, 2020 UT App 6, ¶ 14, 458 P.3d
2Cite as: 2021 UT 70Opinion of the Court
1149. And it held that Sevastopoulos’s remaining arguments
“focus[ed] narrowly on the facts favorable to her, while ignoring
important countervailing evidence”—and thus failed to establish a
basis for questioning the inclusion of any more of the remaining
217 electronic transfers in question. Id. ¶ 21.
¶6 Sevastopoulos filed a petition for writ of certiorari. 1 We
granted review on two issues: (1) whether the court of appeals erred
in upholding the third-party tort rule as a basis for affirming the
district court’s inclusion of litigation expenses in the restitution
order, and (2) whether the court of appeals erred in affirming the
determination that 217 electronic transfers had not been authorized
by the parents. In the briefing in our court, the State confessed error
as to two additional electronic transfers, acknowledging that the
record established that such transfers (in the total amount of $13,271)
had been authorized.
¶7 We reverse and remand to the district court to allow it to enter
an amended restitution order excluding the amounts of the four
transactions that the State concedes were authorized by the parents.
But we otherwise affirm. We hold that (1) litigation expenses
incurred in collateral litigation are an appropriate element of
restitution under the Crime Victims Restitution Act, and
(2) Sevastopoulos has failed to establish any ground for questioning
any of the other electronic transfers in question.
I
¶8 When a defendant is convicted of a crime resulting in
“pecuniary damages,” our code 2 requires the court to “order that the
defendant make restitution” to the victims. UTAH CODE § 77–38a–
302(1) (2015). Only “pecuniary damages” are recoverable. Id. § 77–
38a–102(11) (limiting restitution to “full, partial, or nominal payment
for pecuniary damages to a victim, including prejudgment interest
. . . .”). And “[p]ecuniary damages” are defined to extend to “all
_____________________________________________________________
1 Sevastopoulos passed away during the pendency of these
proceedings. The personal representative of her estate was
substituted as a party.
2 The legislature amended the Crime Victims Restitution Act in
2015. But we cite and apply the version of the statute in effect at the
time of Sevastopoulos’s crimes. See State v. Clark, 2011 UT 23, ¶ 13,
251 P.3d 829 (noting that we apply “the law as it exists at the time of
the event regulated by the law in question”).
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STATE v. SEVASTOPOULOS
Opinion of the Court
demonstrable economic injury, whether or not yet incurred, which a
person could recover in a civil action arising out of the facts or
events constituting the defendant’s criminal activities.” Id. § 77–38a–
102(6). This definition “includes the fair market value of property
taken, destroyed, broken, or otherwise harmed, and losses including
lost earnings and medical expenses, but excludes punitive or
exemplary damages and pain and suffering.” Id.
¶9 Sevastopoulos asks us to hold that the attorney fees incurred
by her parents do not qualify as pecuniary damages. She asserts that
such fees are a form of “consequential damages” that are “special”
and in some sense “punitive or exemplary.” And she invites us to
hold that the “third-party tort rule” does not extend to restitution
cases, or at least to cases involving charges of conversion.
¶10 We see no basis for this position. The central question
presented is not whether attorney (or accountant) fees are in some
sense “consequential” or “special.” It is whether they qualify as the
sort of “pecuniary damages” that are included in a restitution award.
And the answer to that question is clear under the plain language of
the governing statute.
¶11 The fees in question represent “demonstrable economic
injury . . . which a person could recover in a civil action arising out of
the facts or events constituting the defendant’s criminal activities.”
Id. § 77–38a–102(6) (2015). This is clear from the “third-party tort
rule.” Such rule provides that “[o]ne who through the tort of another
has been required to act in the protection of his interests by bringing
or defending an action against a third person is entitled to recover
reasonable compensation for loss of time, attorney fees and other
expenditures . . . .” RESTATEMENT (SECOND) OF TORTS § 914(2) (AM. L.
INST. 1979); see USA Power, LLC v. PacifiCorp, 2016 UT 20, ¶ 93 n.128,
372 P.3d 629 (endorsing the third-party tort rule).
¶12 The fees at issue fit squarely within this rule. The parents
incurred these fees “in the protection of” their “interests” in
litigation with third parties—the credit card companies. This third-
party litigation was proximately caused or necessitated by
Sevastopoulos’s tortious, criminal acts. In fact, it resulted in a
mitigation of the injury that otherwise would have impacted the
parents, through recovery of amounts wrongfully transferred to the
credit card companies. This is not a form of “punitive or exemplary
damages.” It is “demonstrable” economic harm, which the parents
would have been entitled to recover in a civil action under our law.
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Cite as: 2021 UT 70Opinion of the Court
¶13 That conclusion holds for both the attorney fees and the
accountant fees in question. The State presented ample evidence in
support of the conclusion that the accountant fees were incurred in
proximate connection with the parents’ third-party litigation.
Perhaps the accountants’ investigation bore some resemblance to a
criminal law enforcement investigation, as Sevastopoulos suggests.
But she cites no authority for the proposition that such resemblance
should foreclose the recoverability of these fees as damages under
the third-party tort rule. We know of no such authority. And we thus
affirm the court of appeals’ decision to include the $2,000 amount in
its restitution award.
¶14 Our case law does not establish a basis for a “conversion”
exception to this general rule. In Broadwater v. Old Republic Surety, we
declined to apply the third-party exception to a request for attorney
fees in a case involving conversion of stock. 854 P.2d 527, 534–35
(Utah 1993). But we did not base our decision on the type of property
converted or on a reluctance to apply the exception to conversion
cases generally. We simply found that the attorney fees in question
were not incurred in third-party litigation. See id. at 535 (noting that
the third-party exception applies only “to the recovery of fees
incurred in resolving third-party disputes caused by a defendant’s
negligence” and does not extend to “fees incurred in recovering
damages from that defendant”).
¶15 Sevastopoulos’s remaining objections are not properly
presented for our review. She complains that the State failed to
adequately plead or prove the basis for a recovery of attorney fees.
But these assertions were not preserved in the district court and not
even advanced on appeal until the reply brief. They were
accordingly forfeited. See Allen v. Friel, 2008 UT 56, ¶ 8, 194 P.3d 903.
II
¶16 A restitution award is available for pecuniary damages that
can be recovered “in a civil action arising out of the facts or events
constituting the defendant’s criminal activities.” UTAH CODE § 77–
38a–102(6) (2015). And the covered criminal activities encompass
“any criminal conduct admitted by the defendant to the sentencing
court or to which the defendant agrees to pay restitution.” Id. § 77–
38a–302(5)(a).
¶17 Sevastopoulos advances a series of grounds for challenging
the amount of restitution awarded by the district court. But her
challenges are either unpreserved or meritless.
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STATE v. SEVASTOPOULOS
Opinion of the Court
¶18 First, Sevastopoulos failed to preserve the claim that she is
legally liable for restitution only for electronic transfers made on the
date(s) identified in the plea agreement—“on or about January 17,
2015.” She points us to two record pages in support of her contrary
conclusion. But neither of the cited objections was specific enough to
alert the district court of the argument she now raises. This claim is
unpreserved because she did not present the district court with a
meaningful opportunity to rule in her favor.
¶19 Second, Sevastopoulos has not advanced persuasive
grounds for questioning the district court’s calculation of a
restitution award that included electronic transfers tied to specific
check numbers and extended to transfers made to U.S. Bank. The
district court’s findings were supported by ample evidence (except
as to the four transactions on which the State has confessed error).
And as the court of appeals noted, Sevastopoulos cannot establish
clear error where she “focus[es] narrowly on the facts favorable to
her” while failing to deal with “important countervailing evidence.”
State v. Sevastopoulos, 2020 UT App 6, ¶ 21, 458 P.3d 1149.
III
¶20 We affirm on the central questions presented for our review.
But we remand to the district court to allow it to enter an amended
restitution order.
¶21 The State has confessed error as to four transfers totaling
$13,928.43. We remand to the district court for entry of an amended
restitution order excluding these amounts. But we find no basis for
concluding that the State’s confession of error creates a cloud of
doubt on the remainder of the district court’s order, as
Sevastopoulos has suggested in the briefs on certiorari.
6