On
Appeal from Superior Court, Chittenden Unit, Criminal
Division James R. Crucitti, J.
David
Tartter, Deputy State's Attorney, Montpelier, for
Plaintiff-Appellee.
Matthew F. Valerio, Defender General, and Dawn Matthews,
Appellate Defender, Montpelier, for Defendant-Appellant.
PRESENT: Reiber, C.J., Skoglund, Robinson and Eaton, JJ., and
Dooley, J. (Ret.), Specially Assigned.
ROBINSON, J.
¶
1. This case requires us to consider whether a bank is
entitled to restitution as a "direct victim" of a
crime when it incurred financial harm by reimbursing an
accountholder for funds it had previously drawn from the
account to pay a check that turned out to be forged.
Defendant, who was convicted of embezzling from her former
employer, appeals the trial court's restitution order
that required her to pay the bank the amount that she had
embezzled, arguing that the bank is not a direct victim of
the crime and therefore is not entitled to restitution. We
affirm.
¶
2. The relevant facts are as follows. From December 2014 to
July 2015, defendant was a secretary at a law firm. In June
2015, she took two checks from the law firm, made each
payable to herself in the amount of $2500, forged an
authorized signer's signature, and deposited them in her
TD Bank account. In July, defendant's employer discovered
that she had stolen the two checks and reported the incident
to the police. The employer also filed a claim with its bank,
People's United (the bank), and the bank reimbursed the
employer's account for the funds it had cleared through
the employer's account pursuant to the forged checks. The
bank reported that it had no insurance to cover this loss.
¶
3. Defendant was arraigned on two counts of felony
embezzlement in August 2015. In October, she entered a plea
agreement with the State and pleaded guilty to one count of
embezzlement; the State dismissed the other count. The court
placed defendant on probation and deferred her sentence for
three years.
¶
4. At the restitution hearing, the bank sought restitution in
the amount of $5000 to cover the loss it incurred as a result
of these events.[1] In its written decision, the court
concluded that defendant must pay restitution to the bank.
The court distinguished the bank from an insurer that could
not receive restitution because the bank was "not in the
business of taking payments in order to cover for the loss of
others." It concluded that the bank was entitled to
receive restitution because it "incurred a material loss
as a direct victim." Defendant appealed.
¶
5. The only issue on appeal is whether the bank in this case
is a "victim" under Vermont's restitution
statute. We review without deference the trial court's
interpretation of the term "victim" as used in
Vermont's restitution statute. See State v.
Gorton, 2014 VT 1, ¶ 8, 195 Vt. 460, 90 A.3d 901.
Citing to our prior precedent, defendant contends that the
bank is not entitled to restitution because it is not a
"direct victim" of the crime. She argues that the
bank only incurred harm due to its relationship with her
employer, and thus the harm was an indirect consequence of
defendant's actions. She also argues that the bank cannot
receive restitution because it has alternative civil
remedies.
¶
6. We conclude that the bank was a direct victim and affirm
the trial court's restitution order. Even though
Vermont's restitution statute defines "victim"
narrowly, in this case, as a result of its own legal
obligations relative to the forged checks, the bank was
harmed financially as a direct result of defendant's
crime. The cases relied upon by defendant do not persuade us
otherwise, as the bank here was harmed as a direct result of
defendant's crime, and the bank is not an insurer. The
availability of civil remedies to the bank likewise does not
undercut the applicability of the restitution statute.
¶
7. We note at the outset that our restitution statute is
drawn narrowly. Pursuant to 13 V.S.A. § 7043(a)(1), the
trial court is to consider restitution "in every case in
which a victim of a crime . . . has suffered a material
loss." Section 5301(4) defines victim as "a person
who sustains physical, emotional, or financial injury or
death as a direct result of the commission or attempted
commission of a crime." "The Legislature's use
of the words 'direct result' indicates that it
intended to provide restitution only to direct victims of
crime." State v. Thomas, 2010 VT 107, ¶
17, 189 Vt. 106, 14 A.3d 961. Thus, Vermont's restitution
statute "has a narrow definition of victim" as
compared to other states' statutes. Id.
¶
8. Even with this narrow definition, as a result of its own
legal obligations, the bank in this case was directly harmed
by defendant's crime. A bank may not charge a
customer's account for a check that is not properly
payable, and because a forged check is not properly payable,
the bank is therefore obligated to reimburse the account if
it pays out a forged check. See 9A V.S.A. § 4-401(a);
J. Walter Thompson, U.S.A., Inc. v. First
BankAmericano, 518 F.3d 128, 132 (2d Cir. 2008)
("In most cases, a drawee/payor bank is strictly liable
for charging its customer's account for a forged or
altered check pursuant to Section 4-401"); Braden
Furniture Co., Inc. v. Union State Bank, 109 So.3d 625,
630 (Ala. 2012) (explaining that under the UCC, "if a
drawee bank debits a drawer's account for an improperly
payable item, the drawee bank is obligated to recredit the
drawer's account"); Monreal v. Fleet Bank,
735 N.E.2d 880, 881-82 (N.Y. 2000) (citing § 4-401 for
proposition that "[a] check bearing a forgery of the
customer's signature is an 'item' not
'properly payable and therefore may not be charged
against the customer's account"). Even though the
money to pay the forged check was initially drawn from the
employer's account, defendant effectively stole from the
bank and not the employer because of the bank's
obligation to reimburse the employer for the money paid
pursuant to forged checks.
¶
9. In that respect, State v. Thomas, relied upon by
defendant, is readily distinguishable. 2010 VT 107, 189 Vt.
106, 14 A.3d 961. In that case, the defendant was convicted
of aggravated assault. The victim sought treatment at a
hospital, and the trial court ordered the defendant to pay
restitution to the hospital for an outstanding bill that the
victim did not pay. We reversed the trial court's order,
noting that the restitution statute defined
"victim" narrowly and concluding that the
hospital's financial injury was only an "indirect
result" of the defendant's crime. Id.
¶ 17. Therefore, the hospital was not a direct victim
and could not receive restitution. Id. In
Thomas, the hospital's harm was indirect because
it was the result of the victim's failure to pay an
outstanding bill, and not directly because of the
defendant's actions. Unlike the hospital in
...