Hearn v. Commonwealth

JOHNSTONE, Justice,

dissenting.

Hard cases make bad law. The majority would do well to heed these words of the preeminent United States Supreme Court Justice Oliver Wendell Holmes, Jr. This maxim is grounded firmly on the notion that result-oriented decision making driven by particularly difficult facts can lead to unwise and unintended consequences.

The Hearns pled guilty to theft charges related to the conversion of hundreds of thousands of dollars that were intended for the school children of Jefferson County. In months of unparalleled media coverage, the public was repeatedly saturated with the details of the Hearns’ devious criminal scheme. The citizens of Jefferson County were repulsed by the Hearns’ breach of faith, and rightfully so.

Yet, the trial judge was confronted with the straightforward issue of whether the trial courts of Kentucky are empowered to order interest to be paid on restitution that is ordered in a criminal ease. The trial court thoroughly weighed the issue and answered the question in the negative. Today, the majority opinion ignores common law and long-standing rules of statutory construction to answer that question in the affirmative. The majority and the courts below all agree that the relevant statute, KRS 533.030(3), is silent with respect to interest. Thus, resolution of this issue is reduced to the application of basic principles of statutory construction.

The proper construction of the statute begins with the foundation laid by the majority opinion. First, under the rule of lenity, courts are hound to construe criminal statutes narrowly and give the accused the benefit of any ambiguities in the statute. Next, under the common law, interest is not allowed on judgments and, further, criminal fines and penalties are not subject to prejudgment interest. Add the Court of Appeals’ observations that legislative deviations from the common law require a clear statutory mandate and that such statutes are construed narrowly, and the foundation becomes rock solid — the conclusion inevitable. In fact, the Court of Appeals stated it correctly: “Under these rules of construction ... interest on the Hearns’ restitution obligation would be improper unless the General Assembly had expressly provided for it.”1 But somehow despite their fine beginnings, both the majority and the Court of Appeals only manage to build a house of cards.

Through the looking glass, both the majority and the Court of Appeals leave their solid bases to embark upon a tortuous journey of discovery contrived to arrive at a legislative intent that mirrors their desired result. The Court of Appeals finds that our “revised statute is a manifestation, among many others throughout the country, of the ‘victim’s rights movement,’ which has gained impetus during the past two or three decades. This shift in purpose evinces a legislative intent....”2 The majority opinion divines its legislative intent in the language of KRS 533.030(3), which states that restitution shall be or*438dered in the full amount of the damages. Thus, it proclaims, “[i]f restitution is to be considered full, it'will need to include post-judgment interest in most cases.”3

Yet, it is clear that the legislature knows how to expressly provide for interest in connection with a restitution order. It did just that in KRS 205.8467(l)(a) when the General Assembly explicitly provided that medical service providers who are found guilty of Medicaid fraud must pay interest in addition to the base amount of restitution. Glaringly absent from KRS 533.030(3), or any of the other statutes cited by the majority, is the provision for interest to be added to an order of restitution.

In deciding whether interest was authorized in addition to restitution in the absence of statutory language with respect to interest, the Iowa Supreme Court stated eloquently in State of Iowa v. Akers:4

Our ultimate goal in interpreting these sections is to determine legislative intent, considering language used in the statute, the objects sought to be accomplished, and the evils sought to be remedied.... We think, for a number of reasons, that the legislative intent here was not to permit the imposition of interest on restitution amounts.
First, as Akers points out, we have said that “legislative intent is expressed by omission as well as by inclusion. The express mention of certain conditions of entitlement implies the exclusion of others.” Barnes v. Iowa Dep’t of Transp., 385 N.W.2d 260, 263 (Iowa 1986). We agree with Akers that the inclusion of pecuniary damages, attorney’s fees, and other costs in the statutory definition of “restitution” indicates a legislative intent to exclude interest.
Interest is simply not one of the components of “restitution” under the statutory definition: it is not pecuniary damages, court costs, attorney’s fees, the expense of a public defender, or public service. See Iowa Code § 910.1(4). As such, the sentencing court here should not have imposed it. The courts of other states have taken a similar view. See People v. Engel, 746 P.2d 60, 62-63 (Colo.App.1987) (imposition of interest on restitution amount was not proper because interest was not “pecuniary damages” under the restitution statute); State v. Dickenson, 68 Or.App. 283, 285-87, 680 P.2d 1028, 1028-29 (1984) (order to pay interest on restitution not proper because interest was not “special damages” under restitution statute).

The same is true of our statutory definition of restitution in this Commonwealth. The legislature enacted the following definition in KRS 532.350:

(l)(a) “Restitution” means any form of compensation paid by a convicted person to a victim for counseling, medical expenses, lost wages due to injury, or property damage and other expenses suffered by a victim because of a criminal act.

Here again, the General Assembly could have, but did not, authorize interest in connection with restitution orders.

Moreover, the Court of Appeals’ and majority opinions need look no further than subsection (1) of KRS 533.030 to glean the legislative intent. It provides in pertinent part:

The conditions of probation and conditional discharge shall be such as the court, in its discretion, deems reasonably necessary to insure that the defendant *439will lead a law-abiding life or assist him to do so....

(Emphasis added).

Clearly, the intent of the legislature was to promote rehabilitation, provide deterrence, and monitor the defendant. Yet, the majority stirs its tea leaves to reveal an intent by the General Assembly to make a victim whole, or provide full restitution. That interpretation ignores the clear and unambiguous language of the statute.

KRS 533.030 has been in effect in this Commonwealth for two decades. The Commonwealth has cited no case which has interpreted this statute to be a vehicle for assessing costs — not one. The Commonwealth never attempted before or after the Hearn case to have interest assessed along with restitution ordered in a criminal case — not once. The implication is obvious: the Commonwealth has never before seen this statute as providing authority for adding interest to an order of restitution.

And, the implications of assessing interest along with court-ordered restitution are troubling. The majority opinion makes it clear that such a power is purely discretionary with the trial judge. Among the unanswered questions are:

• When should the trial judge use this discretionary power?
• What is the appropriate rate of interest to apply?
• Will victims in cases already decided involving restitution be able to move for retroactive application for interest?
• Will some standard need to be provided in the future if interest awards become divergent among the trial judges and jurisdictions in the Commonwealth?
• Will the majority opinion’s post-judgment interest awards be extended to prejudgment scenarios?

After agonizing long and hard over this issue, Circuit Judge Mershon stated in his thirteen page order that “if this Court found existing Kentucky law to justify it, it would order the Hearns to pay interest in a heartbeat. But the Legislature has not enacted any such statute nor has the Court been cited to any Kentucky appellate decision permitting the imposition of interest on restitution.”5

Apparently, Judge Mershon once heard that hard cases make bad law.

STUMBO, J., joins.

. Commonwealth v. Hearn, No. 1999-CA-002638-MR, slip op. at 5, 2000 WL 1252552 (September 1, 2000).

. Commonwealth v. Hearn, No. 1999-CA-002638, slip op. at 7, 2000 WL 1252552 (September 1, 2000).

. Majority Opinion at 434.

. 435 N.W.2d 332, 334 (Iowa 1989).

. Order, Jefferson Circuit Court No. 98CR2403, pp. 11-12 (October 13, 1999).