Restitution for civil attorney fees paid by a victim may be ordered in a criminal case

People v. Marrero (2021) 60 Cal.App.5th 896

 Summary: Armando Milan Marrero pleaded guilty to driving under the influence of alcohol and causing bodily injury to another person (Veh. Code, § 23153, subd. (a)). The trial court suspended imposition of sentence for five years and granted formal probation. Two victims retained an attorney and paid him $375,000 in accordance with their contingency fee agreement, after a settlement was reached.

In Marrero’s criminal case, the prosecutor requested that the victims be awarded $375,000 in restitution based on the actual fee paid to the attorney.   The court ordered restitution in the amount of $358,047.79, covering $350,000 in attorney fees and approximately $8,000 in travel expenses.

Marrero  argued that the fee was unreasonable because the matter settled quickly.  Marrero maintained that the court should (1) use the lodestar method to determine the fee award and (2) reduce the fee award based on any portion attributable to the recovery of noneconomic damages.

Marrero appealed the attorney fees order. The Court of Appeal upheld the order.

Attorney Fees as Restitution

“Restitution is ‘intended to make the victim whole.’ ” (People v. Grundfor (2019) 39 Cal.App.5th 22, 30, 251 Cal.Rptr.3d 586 (Grundfor).) “The restitution order ‘shall be of a dollar amount sufficient to fully reimburse the victim’ for economic losses caused by the defendant’s criminal conduct.” (People v. Maheshwari (2003) 107 Cal.App.4th 1406, 1409, 132 Cal.Rptr.2d 903.) “ ‘[T]he trial court is vested with broad discretion in setting the amount of restitution; it may “ ‘use any rational method of fixing the amount of restitution which is reasonably calculated to make the victim whole ….’ ” ’  ‘Thus, while the amount of restitution cannot be arbitrary or capricious, “[t]here is no requirement the restitution order be limited to the exact amount of the loss in which the defendant is actually found culpable, nor is there any requirement the order reflect the amount of damages that might be recoverable in a civil action….”  ‘In determining the amount of restitution, all that is required is that the trial court “use a rational method that could reasonably be said to make the victim whole, and may not make an order which is arbitrary or capricious.” The order must be affirmed if there is a factual and rational basis for the amount.’ ” (People v. Beaver (2010) 186 Cal.App.4th 107, 129, 111 Cal.Rptr.3d 726.)

Penal Code section 1202.4, subdivision (f)(3)(H) identifies “[a]ctual and reasonable attorney’s fees” as an example of economic loss recoverable in a restitution order. Recoverable attorney fees include “those incurred in the recovery of damages the victim suffered as a result of the defendant’s criminal conduct.” (Fulton, supra, 109 Cal.App.4th at pp. 883-884, 135 Cal.Rptr.2d 466.) The damages for which attorney fees are recoverable are limited to other items of restitution otherwise permitted by the statute. (Id. at p. 885, 135 Cal.Rptr.2d 466.) Because restitution is limited to economic losses, this limitation precludes recovery of attorney fees incurred solely to recover noneconomic losses. But a victim is not prohibited from recovering attorney fees “if those fees are incurred to recover both economic and noneconomic losses. Because the Legislature has directed that a victim be ‘fully reimburse[d]’ for economic losses,  it would be improper to reduce the attorney fees incurred to obtain economic damages merely because those same attorney fees also led to the recovery of nonrecoverable

damages (e.g., pain and suffering damages). Moreover, because of the strong public policy seeking to provide crime victims with direct restitution for all the ‘losses they suffer’ (Cal. Const., art. I, § 28, subd. (b)), when fees cannot be reasonably divided between the pursuit of economic losses as opposed to noneconomic losses, the victim is entitled to be fully reimbursed for all actual and reasonable attorney fees.” (Fulton, at p. 885, 135 Cal.Rptr.2d 466; accord, Grundfor, supra, 39 Cal.App.5th at p. 30, 251 Cal.Rptr.3d 586.)

The lodestar method for calculating attorney fees is inapplicable to restitution for crime victims

In People v. Millard (2009) 175 Cal.App.4th 7 (Millard), the court considered the proper standard for determining whether a victim’s claimed attorney fees were reasonable. Millard directed the trial court to use the lodestar method “unless the People on remand show the Legislature intended another method to be used in determining reasonable attorney fees” in the context of restitution.

The lodestar method begins with the calculation of hours worked multiplied by a reasonable hourly rate for such work.  A court may then “make adjustments upward or downward based on factors including whether there is a contingency fee arrangement.  After considering all relevant factors, a court may ultimately, but is not compelled to, award as reasonable those fees set forth in a contingency fee agreement.”

“Applying the lodestar to attorney fees incurred by crime victims overlooks the fundamental purpose of the statutory and constitutional right to victim restitution, awarding ‘full restitution’ to the victim absent ‘compelling and extraordinary reasons for not doing so ….’  Since a victim will likely have to pay a contingent fee in any personal injury action resulting from the crime, evidence that the victim incurred the contingent fee is prima facie evidence of a loss entitling him to compensation.” (Taylor, supra, 197 Cal.App.4th at p. 764, 128 Cal.Rptr.3d 399.) “[W]here there is uncontradicted evidence the victim incurred attorney fees as a result of the defendant’s actions, it is not an abuse of discretion to award restitution for the fee without resorting to the lodestar method.” (Ibid.)

The lodestar method runs directly counter to the purpose of restitution, which is to make the victims whole. (See Grundfor, supra, 39 Cal.App.5th at p. 30, 251 Cal.Rptr.3d 586.) The restitution order does not compensate the attorney. It compensates the victims for their losses caused by Marrero’s criminal conduct. Those losses include the standard contingency fee paid to their attorney, out of a settlement that would otherwise have compensated them for their injuries. There is nothing inequitable about ensuring that those losses are paid by Marrero, who caused the victims’ injuries and was the reason the victims retained an attorney  in the first place. (See People v. Pinedo (1998) 60 Cal.App.4th 1403, 1406, 71 Cal.Rptr.2d 151.)2