Filed 8/18/16 P. v. Schauman CA3
NOT TO BE PUBLISHED
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication
or ordered published for purposes of rule 8.1115.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
THIRD APPELLATE DISTRICT
(Shasta)
----
THE PEOPLE, C078274
Plaintiff and Respondent, (Super. Ct. No. 11-F-02854)
v.
LENNART CHRISTIAN SCHAUMAN,
Defendant and Appellant.
Defendant Lennart Christian Schauman was convicted of battery with serious
bodily injury after he punched Adam Martinez, who fell to the ground, hit his head, and
later died from the impact injury. As part of the victim-restitution order, the trial court
included costs and attorney fees incurred by the parents in their civil action against
defendant, which civil action resulted in a settlement for the limit of defendant’s
homeowner’s insurance policy.
1
On appeal from the restitution order, defendant contends that the trial court should
not have included the costs and attorney fees from the civil litigation because: (1) the
civil settlement included a clause requiring the parents to hold harmless and indemnify
defendant and his insurance company for any claim for costs and attorney fees, (2) the
court improperly used the amount of the contingency fee rather than applying the lodestar
method, (3) the parents were estopped from claiming costs and attorney fees, and (4) the
inclusion of costs and attorney fees in the restitution order unconstitutionally impaired the
contract between defendant and the parents.
None of these contentions has merit.
The provision of the civil settlement in which the parents agreed to hold harmless
and indemnify defendant and his insurance company does not supersede the trial court’s
duty to impose restitution for economic damages.
Inclusion in the restitution order of the contingency fee paid by the parents, rather
than a fee determined using the lodestar method, was proper because restitution is for
actual economic damages.
Defendant’s estoppel claim does not apply in this action which does not include
the parents as a party.
And inclusion in the restitution order of costs and attorney fees did not
unconstitutionally impair the civil settlement between defendant and the parents because
the order protects the vital interests of the state.
BACKGROUND
In a prior appeal, we affirmed defendant’s conviction for battery with serious
bodily injury. (People v. Schauman (Oct. 3, 2013, C070009) [nonpub. opn.].) On
January 26, 2012, the trial court entered a victim restitution order totaling $387,514.11,
covering various items of economic loss to the estate of the victim (mostly costs owed to
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medical providers for the deceased’s care) and to his parents Jane Heinan and Joe
Martinez.1
After the trial court entered the order for victim restitution, the parents filed an
action against defendant and the nightclub where the incident took place.2 Defendant’s
insurer Allstate Insurance Company agreed to settle the case for the limit of defendant’s
policy—$100,000. In connection with the settlement, various medical providers agreed
to accept a fraction of their bills as payment in full. The parents received $15,082.72
each. The firm representing the parents collected $3,997.97 in costs advanced and
$33,333.33 under the firm’s contingency fee agreement with the parents.
As part of the settlement, the parents agreed to release all claims against defendant
and Allstate. They also agreed to a clause holding harmless and agreeing to indemnify
defendant and Allstate for costs and attorney fees.3
After the settlement of the civil litigation, the parents filed a motion in this
criminal action to modify the victim restitution order. (See §§ 1202.4, subd. (f)(1),
1202.46 [allowing victim to file motion to correct restitution order].) The parents were
represented by two different law firms in their civil case against defendant and in their
1 In the remainder of this opinion, we refer to Heinan and Martinez collectively as
“the parents,” and for simplicity we refer to their actions collectively even though at
times they acted separately, because referring to them as such does not affect the
reasoning or result.
2 Defendant acknowledges that whether the parents are acting on their own behalf or
on behalf of the estate is immaterial to these proceedings. We therefore make no
distinction in that regard.
3 The clause provided: “In consideration of the payment of the above sum, the
undersigned[] agree to indemnify LENNART CHRISTIAN SCHAUMAN and Allstate
Insurance Company . . . and agrees to hold the same harmless against any claim, suit,
action or demand asserting a lien against said sum, settlement or recovery, including the
expenses of investigation, attorney’s fees, and other costs of litigation.”
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motion to modify restitution. Among other requests, the motion to modify sought a
restitution order reflecting the amount of costs and attorney fees incurred, totaling
$37,331.30.
After a hearing, the trial court granted the motion to modify the restitution order.
The only part of the modification relevant to this appeal is that the court added to the
amount of restitution $37,331.30, representing the costs and attorney fees incurred in the
civil litigation.4
DISCUSSION
I
Civil Settlement and Criminal Restitution
Contrary to defendant’s argument, the trial court did not err by including the costs
and attorney fees from the civil litigation in the restitution order, even if the civil
settlement contained a hold harmless and indemnity clause relating to costs and attorney
fees. The trial court’s duty is to order restitution for economic losses, including the
amount of costs and attorney fees incurred in the victim’s civil suit.
Victims have a constitutional right to restitution. “It is the unequivocal intention of
the People of the State of California that all persons who suffer losses as a result of
criminal activity shall have the right to seek and secure restitution from the persons
convicted of the crimes causing the losses they suffer.” (Cal. Const., art. I, § 28, subd.
(b)(13)(A).) “[I]n every case in which a victim has suffered economic loss as a result of
the defendant’s conduct, the court shall require that the defendant make restitution to the
victim or victims in an amount established by court order, based on the amount of loss
claimed by the victim or victims or any other showing to the court.” (Pen. Code, §
4 Incidentally, the modification included a drastic reduction of the restitution order
(by more than $300,000) because the parents successfully negotiated with the deceased’s
medical providers to accept pennies on the dollar in settlement of their bills.
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1202.4, subd. (f).) A trial court cannot stray from the mandate of full restitution, and
civil settlement and release of a victim’s claim for damages against the defendant does
not eliminate the court’s duty to determine and impose a full restitution order. (People v.
Bernal (2002) 101 Cal.App.4th 155, 164-165 (Bernal).)
Economic loss for which the victim may receive restitution includes “[a]ctual and
reasonable attorney’s fees and other costs of collection accrued by a private entity on
behalf of the victim.” (Pen. Code, § 1202.4, subd. (f)(3)(H).) And “[d]etermination of
the amount of restitution ordered pursuant to [Penal Code section 1202.4, subdivision (f)]
shall not be affected by the indemnification or subrogation rights of a third party.” (Pen.
Code, § 1202.4, subd. (f)(2).) The trial court must include in the restitution order the
victim’s actual and reasonable costs and attorney fees incurred to obtain a settlement with
the defendant. (People v. Maheshwari (2003) 107 Cal.App.4th 1406, 1409.)
There is no dispute here that costs and attorney fees are an economic loss. Instead,
defendant claims that he should benefit from the parents’ payment of costs and attorney
fees to their own attorney. Neither defendant’s reasoning nor his precedential offerings
persuades us.
Defendant notes that, in Bernal, the court determined that payments to a victim on
behalf of the defendant’s insurance company constituted restitution payment directly
from the defendant for the purpose of determining whether restitution had been provided.
(Bernal, supra, 101 Cal.App.4th at pp. 167-168.) Citing Bernal, defendant asserts that
the settlement payment of $100,000 from Allstate to the parents “implicitly included
payment of [the] attorney fees.” Defendant argues: “The economic reality of the
settlement agreement was that payment was made on behalf of [defendant] by Allstate
Insurance which included a sum for attorney fees and costs. This Court should recognize
the economic reality of that transaction.” That is not self-evident to us. The parents
settled for defendant’s policy limit. While it is true that their contingency fee agreement
with their attorney resulted in payment of attorney fees out of the settlement, it is not true
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that either defendant or Allstate paid those attorney fees. To the contrary, the settlement
agreement did not expressly require either defendant or Allstate to pay for the parents’
attorney fees, and the fact that the parents actually paid the attorney fees out of the
settlement amount they were entitled to receive is between them and their attorney.
Defendant also claims that we must honor the hold harmless and indemnity clause
by reversing the restitution order to the extent it included costs and attorney fees from the
civil action because the parents’ request for costs and attorney fees “puts [them] in breach
of the civil settlement agreement.” This is simply a request for the court to ignore its
statutory and constitutional duty because of a private agreement. It fails.
The victim of a crime is not a party to the criminal action. While a victim may be
willing to accept a sum in settlement of the victim’s civil claim against the defendant, the
court still has a duty to impose a restitution order. (People v. Vasquez (2010) 190
Cal.App.4th 1126, 1133.) “Just as a restitution order does not fully replicate a civil
judgment, so too the judgment obtained in a civil action does not completely satisfy the
purpose of an order of restitution entered in a criminal case. In addition to compensating
the victim, a restitution order is intended to rehabilitate the defendant and to deter the
defendant and others from future crimes. [Citations.]” (Ibid.) “Because of the separate
interests at stake and different purposes served by a restitution order and a civil action for
damages by the crime victim, as well as the different categories of damages recoverable
in the two proceedings, the settlement of a civil action and release of the defendant by the
crime victim does not discharge the defendant’s responsibility to satisfy the restitution
order.” (Ibid., fn. omitted.)
Here, the trial court had a statutory and constitutional duty to impose a restitution
order accounting for economic losses caused by defendant’s actions. The court fulfilled
that duty when it included costs and attorney fees from the civil action in the restitution
order.
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II
Lodestar Method
Defendant argues that, instead of using the actual amount of the attorney fees
incurred in the civil action, the trial court should have used the lodestar method of
determining what a reasonable attorney fee was and awarded that amount. We need not
explain this argument further because, as defendant acknowledges, we already rejected it
in People v. Taylor (2011) 197 Cal.App.4th 757, at pages 761 to 764. (Cf. People v.
Millard (2009) 175 Cal.App.4th 7 [contrary view].)
III
Estoppel
Defendant contends that the parents should be estopped from seeking costs and
attorney fees.5 As should already be apparent from our discussion above, defendant
cannot assert that the victim is estopped in this criminal proceeding in which the victim is
not a party. Defendant argues, however, that we should ignore that problem with his
argument because (1) the parents initiated the request to include costs and attorney fees in
the restitution order and (2) the parents already bargained away their claim for costs and
attorney fees. Not surprisingly, defendant offers no authority for this argument that
estoppel against the victim should prevent the trial court from entering a proper order for
restitution in a criminal proceeding. Logic and law dictate the contrary view. First, as
noted, the victim is not a party to the criminal action. (People v. Vasquez, supra, 190
Cal.App.4th at p. 1133.) And second, considering an equitable doctrine such as estoppel
between the defendant and a nonparty has nothing to do with determining what economic
loss a defendant caused.
5 The Attorney General argues that defendant forfeited this contention and the next
contention (about unconstitutional impairment of an obligation). We need not consider
forfeiture because the contentions are so easily dispensed with on legal grounds.
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IV
Impairment of Obligation
Finally, defendant contends that nothing less than the United States and California
Constitutions bar inclusion of costs and attorney fees in the restitution order. The
contention is without merit because of the state’s vital interest in victim restitution.
Under the United States Constitution, “[n]o state shall . . . pass any . . . law
impairing the obligation of contracts.” (U.S. Const., art. I, § 10.) And under the
California Constitution, “[a] . . . law impairing the obligation of contracts may not be
passed.” (Cal. Const., art. 1, § 9.) We refer to these federal and state provisions together
as the contract clause.
Even though the contract clause contains language absolutely prohibiting
impairment of obligations in contracts, that prohibition must accommodate the state’s
power to protect the vital interests of its people. (People v. Gipson (2004) 117
Cal.App.4th 1065, 1069-1070.) And existing law is to be read into the contract. (Ibid.)
Here, the law existing at the time defendant and the parents entered into the civil
settlement agreement was that the trial court had a duty to impose restitution for
economic losses, including for costs and attorney fees in a civil suit. And such restitution
is a vital interest of the people of California. (See People v. Giordano (2007) 42 Cal.4th
644, 652.) Therefore, with respect to determining whether the restitution order violates
the contract clause, the civil settlement agreement must be read to accommodate the trial
court’s duty to impose restitution.
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DISPOSITION
The order modifying restitution is affirmed.
NICHOLSON , J.
We concur:
BLEASE , Acting P. J.
HOCH , J.
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