State of Maine v. Wendy L. Gagne

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.