Peo in Interest of B.H

2021 COA 86

• Court: Colorado Court of Appeals
• Decided: June 25, 2021
• Docket: 19CA2273
• Status: Published

Opinion

The summaries of the Colorado Court of Appeals published opinions constitute no part of the opinion of the division but have been prepared by the division for the convenience of the reader. The summaries may not be cited or relied upon as they are not the official language of the division. Any discrepancy between the language in the summary and in the opinion should be resolved in favor of the language in the opinion.

SUMMARY June 24, 2021

2021COA86

No. 19CA2273, Peo in Interest of B.H. — Criminal Law —

Sentencing — Restitution — Prejudgment Interest

A division of the court of appeals determines, as a matter of

first impression, that under section 18-1.3-602(3), C.R.S. 2020,

prejudgment interest only begins to accrue on a restitution claim

for property damage from the date of the victims’ out-of-pocket

losses, which is not necessarily the same date as when the property

was damaged. COLORADO COURT OF APPEALS 2021COA86

Court of Appeals No. 19CA2273 El Paso County District Court Nos. 18JD915 & 18JD1115 Honorable Shannon Gerhart, Judge

The People of the State of Colorado,

Petitioner-Appellee,

In the Interest of B.H.,

Juvenile-Appellant.

ORDER REVERSED AND CASE REMANDED WITH DIRECTIONS

Division A Opinion by JUDGE GROVE Bernard, C.J., and Richman, J., concur

Announced June 24, 2021

Philip J. Weiser, Attorney General, Kevin E. McReynolds, Senior Assistant Attorney General, Denver, Colorado, for Petitioner-Appellee

Hardy & Juba LLC, Michael S. Juba, Denver, Colorado, for Juvenile-Appellant ¶1 B.H., a juvenile, appeals the district court’s order awarding

prejudgment interest on restitution for property losses that he

caused while committing a string of burglaries and other crimes in

El Paso County. We reverse the district court’s order and remand

the case with directions to recalculate prejudgment interest from

the date of the victims’ out-of-pocket losses.

I. Background

¶2 After B.H. was charged in several juvenile delinquency cases,

he reached a stipulated agreement with the prosecution under

which he pleaded guilty to several offenses in exchange for the

dismissal of other pending cases. The agreement called for a two-

year sentence in the Division of Youth Services and required B.H. to

pay restitution related to each of the original charges. The

agreement was silent, however, as to the accrual of interest on that

amount.

¶3 After sentencing, the People filed a motion seeking more than

$100,000 in restitution on behalf of a number of individuals,

businesses, and insurance companies that had suffered losses as a

result of B.H.’s conduct. The requested amounts each included

“interest accrued at 8% from the time of loss.”

1 ¶4 A few weeks later, the General Assembly passed legislation

providing that “[i]nterest on an order for restitution does not accrue

while . . . [t]he defendant is in a juvenile delinquency case and is

under twenty-one years of age.” § 18-1.3-603(4)(b.5)(I)(B), C.R.S.

2020; see Ch. 303, sec. 1, § 18-1.3-603(4)(b.5), 2019 Colo. Sess.

Laws 2778. The parties agreed that the amendment applied to

B.H., and that postjudgment interest would not accrue so long as he

met the statutory criteria. But they disagreed about the effect of

the amendment on prejudgment interest. In a written response to

the prosecution’s motion for restitution, B.H. asserted that the

statutory amendment foreclosed interest of any kind. (He does not

pursue this argument on appeal.) At the restitution hearing, B.H.

argued that prejudgment interest does not accrue at all on

restitution relating to property damage.

¶5 The district court rejected both arguments and ruled that “full

restitution” for property damage includes prejudgment interest

“from the date of the offense up until the restitution award.” It

accordingly imposed prejudgment interest on the stipulated

amounts accruing from the dates of B.H.’s offenses. B.H. contends

that this was error, and we agree in part. We therefore reverse the

2 district court’s order and remand the case with directions to award

prejudgment interest from the times that the various victims first

spent money out of pocket, if any, to repair or replace the property

that B.H. damaged, stole, or otherwise deprived them of when

committing the offenses covered by his plea agreement.

II. Standard of Review and Preservation

¶6 The narrow issue before us is whether prejudgment interest

accrues on a restitution claim that is only for property damage, and

if so, when it begins accruing. Because this is inherently an issue

of statutory interpretation, we consider it de novo. See People v.

Cross, 127 P.3d 71, 73 (Colo. 2006).

¶7 B.H. timely objected to the People’s request for prejudgment

interest, thereby preserving the issue for our review.

III. Applicable Law

¶8 A defendant who causes a victim money damages must pay

“full restitution.” § 18-1.3-601(1)(b), C.R.S. 2020; see § 18-1.3-

603(1); see also People v. Reyes, 166 P.3d 301, 302 (Colo. App.

2007). Restitution is “any pecuniary loss suffered by a victim,”

including but not limited to “all out-of-pocket expenses, interest,

loss of use of money, . . . and other losses or injuries proximately

3 caused by an offender’s conduct and that can be reasonably

calculated and recompensed in money.” § 18-1.3-602(3)(a), C.R.S.

2020.

IV. Analysis

¶9 B.H. contends that prejudgment interest cannot be awarded

on restitution for a crime involving only property damage. The

People respond that “full restitution” under the statute necessarily

includes prejudgment interest on the amount of restitution owed,

beginning on the date of the offense. We do not fully agree with

either party’s position, and instead hold that while the statute

requires a court to impose prejudgment interest on a restitution

award arising from property damage, prejudgment interest only

begins to accrue once the victim has experienced a loss of use of

money associated with the property damage or loss.

A. Prejudgment Interest Applied to Crimes Against Property

¶ 10 When interpreting a statute, we first determine and give effect

to the legislature’s intent by examining the plain and ordinary

meaning of the statutory language. People v. Madden, 111 P.3d

452, 457 (Colo. 2005). Statutes governing restitution should be

liberally construed to accomplish the goal of making crime victims

4 whole. Roberts v. People, 130 P.3d 1005, 1009 (Colo. 2006); accord

People v. Rivera, 250 P.3d 1272, 1274 (Colo. App. 2010). That is,

restitution should place the victim in the same financial position as

if the crime had not been committed. Reyes, 166 P.3d at 304.

¶ 11 Prejudgment interest itself is intended to “compensate fully

victims for loss of use of money.” Roberts, 130 P.3d at 1006

(emphasis added). Damaged property costs money to repair. Stolen

property costs money to replace. And a crime victim’s use of that

money to repair or replace damaged or stolen property prevents the

victim from making use of it elsewhere. Thus, to the extent that a

victim has spent money on repair or replacement, she is entitled to

prejudgment interest in an amount that “represents the proper

measure of the value of the use of the money the victim lost

because the defendant deprived the victim of the use of her money.”

Id. at 1007.

B. Date Prejudgment Interest Begins to Accrue

¶ 12 A crime victim who loses money in a theft is immediately

deprived of its use. The same is not necessarily true, however, for

the victim of a property crime. Damage to or theft of property, as

opposed to cash, does not immediately deprive the victim of the use

5 of the money that he or she will eventually spend to repair or

replace the stolen or damaged items. That is, a victim of property

damage or theft is not deprived of the use of the money spent to

repair the damage or replace the stolen goods until the victim

actually incurs out-of-pocket expenses for that purpose. If the

damage is never repaired or the stolen goods never replaced, then

the victim has not lost the use of the money spent to acquire them.

While the victim is of course entitled to an award of restitution

equal to the value of repairing or replacing those items, it does not

follow that prejudgment interest must accrue on that amount.

¶ 13 Our supreme court has considered when prejudgment interest

begins to accrue in two circumstances analogous to those here: a

criminal case involving the theft of government benefits and a civil

case involving property damage. In both situations, the court held

that prejudgment interest began accruing at a point distinct from

the date of the triggering event — specifically, the moment at which

the victims diverted money that could have been used for other

purposes to pay for the loss.

¶ 14 In Valenzuela v. People, 893 P.2d 97, 98 (Colo. 1995), the

court held that prejudgment interest begins to accrue at the time of

6 the victim’s actual pecuniary injury, which is not necessarily the

time of the theft. There, the district court ordered the defendant to

pay restitution for fraudulently obtained food stamp benefits.

Rather than imposing prejudgment interest from the date of the

theft, however, the supreme court held that prejudgment interest

was appropriately calculated from the date on which the county was

required to reimburse the federal government for those food stamps.

Id. at 101.

¶ 15 Similarly, in Goodyear Tire & Rubber Co. v. Holmes, 193 P.3d

821, 823 (Colo. 2008), a civil plaintiff’s vacation home was damaged

by a leak in an embedded heating system. The plaintiff replaced the

heating system, and the manufacturer was held liable for the

replacement costs. Id. The court held that the victim was entitled

to prejudgment interest as of the date he incurred costs to replace

the heating system, not the date that he first observed the defect.

Id. at 829.

¶ 16 Applying the logic of both Valenzuela and Goodyear Tire here,

we conclude that when a criminal defendant damages or steals

property, prejudgment interest begins to accrue under section 18-

1.3-603 on the date on which the victim first incurs out-of-pocket

7 expenses arising from that property damage. For example, if a

defendant stole a car and damaged it, prejudgment interest would

begin accruing on the date when the owner or her insurance

company (or both, depending on deductibles) paid for repairs, and

not from the date on which the car was actually damaged.

Similarly, if a business suffered property damage and theft losses

during a burglary, that business (or, again, its insurer) would be

entitled to receive prejudgment interest from the date on which it

began expending funds to secure the building or replace the stolen

goods.

¶ 17 In both cases, the victim only “loses the use of the money

involved” when he or she pays to repair or replace the items, and it

is only when the victim loses the use of the money that

prejudgment interest is necessary “to compensate the victim for

such a loss of use.” Valenzuela, 893 P.2d at 99-100. Sometimes,

such as where a storefront has been damaged, those out-of-pocket

expenses might be necessary almost immediately. In other

situations, repairs or replacement might be less urgent or might

never happen at all.

8 ¶ 18 Here, the district court did not determine if or when each

victim of B.H.’s crimes incurred repair or replacement costs.

Instead, the court directed B.H. to pay prejudgment interest

beginning at “the time of loss.” Because the time of loss is not

necessarily the same as the time at which repair or replacement

costs are incurred, this was not an appropriate measure of when

prejudgment interest should have begun to accrue.

V. Conclusion

¶ 19 We reverse the district court’s order and remand the case so

that it may determine the exact date upon which each victim first

incurred out-of-pocket expenses, if any, to repair or replace the

items or property that B.H. damaged or stole. Based on those

findings, the court should order prejudgment interest specific to

each victim beginning on that date.

CHIEF JUDGE BERNARD and JUDGE RICHMAN concur.