United States v. Margaret Ann Gordon

480 F.3d 1205, 2007 U.S. App. LEXIS 7202, 2007 WL 915074

• Court: Court of Appeals for the Tenth Circuit
• Decided: March 28, 2007
• Docket: 04-6384
• Status: Published

Opinions

PAUL KELLY, JR., Circuit Judge.

Defendant-Appellant Margaret Ann Gordon appeals from the district court’s order requiring her to pay restitution for credit card fraud in the amount of $68,698.52. Ms. Gordon argues the amount of restitution exceeds the statutory limits set forth in the Mandatory Victim Restitution Act (MVRA). See 18 U.S.C. § 3663A. The government filed two motions for enforcement of the plea agreement,¹ see United States v. Hahn, 359 F.3d 1315, 1328 (10th Cir.2004) (en banc) (per curiam), arguing that Ms. Gordon waived her right to appeal the amount of restitution. Ms. Gordon responds that her challenge to the amount of restitution is not covered by her waiver of appellate rights and that, if it is, she did not enter the waiver knowingly and voluntarily. Exercising jurisdiction pursuant to 28 U.S.C. § 1291, we determine that Ms. Gordon may appeal the restitution order. We vacate that order and remand to the district for the entry of a restitution order in the amount of $7,950.98.

Background

On August 9, 2004, Ms. Gordon pled guilty to an Information charging her with a single count of credit card fraud in violation of 18 U.S.C. § 1029(a)(2):

[T]he defendant herein, knowingly and with intent to defraud used an unauthorized access device during a one-year period, that is Mastercard XXXX-XXXX-XXXX-9512, in a manner that affected interstate commerce, and by such conduct obtained something of value of $1,000 or more.

R. Doc. 1, at 1.

The loss associated with this count was $7,950.98. Ms. Gordon entered into a written plea agreement that did not place an express limit on the amount of restitution that could be ordered. Instead, the agreement stated: “the Court must order the payment of restitution to the victim(s) of the offense.” I.R. Doc. 8, at 2. It also contained a waiver of Ms. Gordon’s appellate rights. On November 19, 2004, the district court sentenced Ms. Gordon to serve eighteen months of imprisonment followed by three years of supervised release. It ordered her to pay restitution in the amount of $68,698.52.

The Pre-Sentence Report (PSR) included, as relevant conduct, monetary losses other than those associated with the count of conviction. Specifically, the PSR considered losses resulting from six other incidents where Ms. Gordon fraudulently used credit cards belonging to other persons.² The total loss resulting from the count of conviction and the other incidents was $68,698.52. The district court used that amount to calculate the guidelines sentence, and also based its restitution order on that amount. Ms. Gordon did not object to the restitution order at sentencing. On appeal, she challenges the restitution order to the extent it requires payments for losses not causally linked to the count of conviction. The government argues that Ms. Gordon’s waiver of appellate rights bars, her challenge to the restitution order.

Discussion

I. The Scope of the Waiver of Appellate Rights

Waivers of appellate rights are generally enforceable. Hahn, 359 F.3d at 1318. Consequently, before reaching the merits of this appeal, we must determine whether such review is precluded by the waiver. First, we must determine “whether the disputed appeal falls within the scope of the waiver of appellate rights.” Id. . at 1325. If the appeal does not fall within the scope of the waiver, our analysis ends and we may proceed to the merits. If the appeal is within the scope of the waiver, we must next determine “whether the defendant knowingly and voluntarily waived [her] appellate rights,” and “whether enforcing the waiver would result in a miscarriage of justice....” Id.

Plea agreements are governed by contract principles. United States v. Rockwell Int’l Corp:, 124 F.3d 1194, 1199 (10th Cir.1997). One key principle is the doctrine of contra proferentem; that ambiguities in agreements are to be construed against the drafter. See Restatement (Second) of Contracts § 206 (1981). Thus, in determining the scope of a waiver, the court must strictly construe any ambiguities in the agreement against the government (the drafter) and in favor of the defendant. Hahn, 359 F.3d at 1325. This means waivers should be narrowly construed. Id.

Ms. Gordon’s plea agreement contains the following waiver of appellate rights:

Defendant understands that a sentencing guideline range for her case will be determined by the Court under the guidelines issued by the U.S. Sentencing Commission. Defendant also understands that the Court has jurisdiction and authority to impose any sentence within the statutory maximum for the ojfense(s) to which she is pleading guilty. Defendant further understands that Title 28, United States Code, Section 1291, and Title 18, United States Code, Section 3742 give her the right to appeal the judgment and sentence imposed by the Court. Acknowledging all this, defendant in exchange for the promises and concessions made by the United States in this plea agreement, knowingly and voluntarily waives her right to:

(a) Appeal or collaterally challenge her guilty plea and any other aspect of her conviction, including but not limited to any rulings on pretrial suppression motions or any other pretrial dispositions of motions and issues;

(b) Appeal, collaterally challenge, or move to modify under 18 U.S.C. § 3582(c)(2) or some other ground, her sentence as imposed by the Court and the manner in which the sentence is determined, provided the sentence is within or below the applicable guideline range determined by the Court to apply to this case. ...

(c) It is provided that (i) defendant specifically does not waive the right to appeal an upward departure from the sentencing guideline range determined by the Court to apply to this case, and (ii) her waiver of rights to appeal and to bring collateral challenges shall not apply to appeals or challenges based on changes in the law reflected in Tenth Circuit or Supreme Court cases decided after the date of this agreement that are held by the Tenth Circuit or Supreme Court to have retroactive effect.

R. Doc. 8, at 5-6 (emphasis added).

Other relevant provisions of the plea agreement stated: (1) “[t]his agreement applies only to the criminal violations described and does not apply to any civil matter or any civil forfeiture proceeding except as specifically set forth,” id. at 1, and (2) “the Court must order the payment of restitution to the victim(s) of the offense,” id. at 2.

Ms. Gordon’s petition to enter a plea of guilty further stated:

If you plead GUILTY the judge may require you to make restitution to any victim of the offense (18 U.S.C. § 3579 [for pre-Guidelines violations], 3663, and 3664). If you plead GUILTY to an offense that occurred on or after April 24, 1996, and the offense falls into certain categories of offenses, including property offenses and crimes of violence, ordinarily the judge is required to order you to pay restitution to any victim of the offense (18 U.S.C. § 3663A).

R. Doc. 9, at 4 (emphasis added) (bracketed text in original)

Because Ms. Gordon argues that the restitution order is unlawful under the MVRA, our task is discrete: we need only determine whether Ms. Gordon waived the right to challenge an unlawful restitution order.³ In this regard, we think it clear that Ms. Gordon preserved her right to appeal such an order.

Analysis of the scope of a waiver of appellate rights must extend beyond discrete clauses. A contract must be “interpreted as a whole,” and “[w]ords and other conduct are interpreted in the light of all the circumstances.” Restatement, supra, at § 202(1),(2). Furthermore, “if the principal purpose of the parties is ascertainable it is given great weight.” Id. § 202(1). In this case, the plea agreement, read in its totality, suggests the parties only intended that Ms. Gordon would waive the right to appeal aspects of her sentence and restitution that were imposed within the authority granted to the district court by the relevant statutes.⁴ For example, the first paragraph of the waiver states: “Defendant also understands that the Court has jurisdiction and authority to impose any sentence within the statutory maximum for the offense(s) to which she is pleading guilty.” R. Doc. 8, at 5 (emphasis added). Furthermore, Ms. Gordon only waived the right to collaterally attack her sentence “provided the sentence is within or below the applicable guideline range determined by the Court.” Id. at 6 (emphasis added). These clauses suggest, at the very least, that Ms. Gordon did not waive the right to appeal a sentence of imprisonment beyond that which could be lawfully imposed. More broadly, they also suggest Ms. Gordon did not intend to waive the right to appeal an unlawful restitution order. See United States v. Gordon, 393 F.3d 1044, 1050 (9th Cir.2004) (“A restitution order which exceeds its authority under MVRA is equivalent to an illegal sentence. Such a restitution order is in excess of the maximum penalty provided by statute and, therefore, the waiver of appeal is inapplicable to it.”) (internal citations, alterations, and quotations omitted); United States v. Broughton-Jones, 71 F.3d 1143, 1147 (4th Cir.1995) (“Because a restitution order imposed when it is not authorized ... is no less ‘illegal’ than a sentence of imprisonment that exceeds the statutory maximum [such] appeals ... are similarly outside the scope of a defendant’s otherwise valid appeal waiver.”).

Moreover, we question whether Ms. Gordon could have waived her right to appeal an unlawful restitution order, even if she wanted to do so. A plea agreement permitting a court to impose a restitution order beyond that authorized by statute might well be unenforceable on grounds of public policy. See Richard A. Lord, 6 Williston on Contracts, § 12:4 (4th ed.2006). In fact, several reported cases have suggested a defendant cannot waive the right to' appeal an unlawful sentence. See, e.g., United States v. Cockerham, 237 F.3d 1179, 1182 (10th Cir.2001); DeRoo v. United States, 223 F.3d 919, 923 (8th Cir.2000); United States v. Baramdyka, 95 F.3d 840, 843 (9th Cir.1996). The same reasoning applies to cases involving an unlawful restitution order. Indeed, Hahn implies this rule, because an otherwise valid waiver of appellate rights may be invalidated if it results in a miscarriage of justice and an unlawful sentence or an unlawful restitution order results in a miscarriage of justice. See 359 F.3d at 1327. Nevertheless, the language of the plea agreement itself suggests Ms. Gordon did not intend to waive the right to appeal any aspect of her sentence or restitution that was beyond that authorized by the pertinent statutes.

Furthermore, we must construe the plea agreement against a general backdrop of legality. See United States v. Ready, 82 F.3d 551, 559 (2d Cir.1996). This means that we should presume that “all promises made were legal, and that the non-contracting ‘party’ who implements the agreement (the district judge) will act legally in executing the agreement.” Id. (citing Walsh v. Schlecht, 429 U.S. 401, 408, 97 S.Ct. 679, 50 L.Ed.2d 641 (1977)). Surely then, Ms. Gordon was also entitled to presume, when she entered the plea agreement, that the judge would order restitution in a legal manner. See E. Allen Farnsworth, Farnsworth on Contracts § 9.2 (3d ed.2004) (noting that “existing law is part of the state of facts at the time of agreement” and that a mistake of fact is grounds for relief). Indeed, this would seem to be an implied term of the agreement. Accordingly, Ms. Gordon’s challenge to the lawfulness of the restitution order is beyond the scope of the waiver of appellate rights.

II. The Unlawful Restitution Order

Because we find that Ms. Gordon’s appeal is outside the scope of her waiver of appellate rights, we may proceed directly to the merits of her claim. This court reviews the legality of a restitution order de novo. United States v. Nichols, 169 F.3d 1255, 1278 (10th Cir.1999). Because Ms. Gordon did not object to the amount of restitution at sentencing, we review for plain error. United States v. Mitchell, 429 F.3d 952, 961 (10th Cir.2005).

In the past, we have implied that the MVRA does not set a statutory maximum on the amount of restitution. See United States v. Wooten, 377 F.3d 1134, 1144 n. 1 (10th Cir.2004); see also United States v. Sharp, 442 F.3d 946, 952 (6th Cir.2006). In reality, however, the MVRA does set a statutory maximum on the amount of restitution — it is, absent two exceptions discussed below, the amount causally linked to the offense of conviction.⁵

The MVRA states in relevant part:

[W]hen sentencing a defendant convicted of an offense ... the court shall order, in addition to, or in the case of a misdemeanor, in addition to or in lieu of, any other penalty authorized by law, that the defendant make restitution to the victim of the offense or, if the victim is deceased, to the victim’s estate.... For the purposes of this section, the term “victim” means a person directly and proximately harmed as a result of an offense for which restitution may be ordered....

18 U.S.C. § 3663A(a)(l),(2) (emphasis added).

Courts have no inherent power to order restitution; they may only do so as authorized by statute. Nichols, 169 F.3d at 1278. Interpreting the Victim and Witness Protection Act of 1982 (VWPA), we held that restitution “is authorized only for losses caused by conduct underlying the offense of conviction.” United States v. Brewer, 983 F.2d 181, 183-84 (10th Cir.1993) (citing Hughey v. United States, 495 U.S. 411, 420, 110 S.Ct. 1979, 109 L.Ed.2d 408 (1990)). In Hughey, the defendant was indicted for multiple counts of fraudulent credit card use but pled guilty to only one count. 495 U.S. at 413, 110 S.Ct. 1979. The Supreme Court held that the defendant could be ordered to pay restitution under the VWPA only for the amount of loss resulting from the count to which he pled guilty. Id. at 422, 110 S.Ct. 1979.

The MVRA, which amended the VWPA in 1996, did not change the general rule that restitution may only be oidered for losses caused by the offense of conviction. In only two cases does the MVRA authorize restitution to be paid to someone other than the victim (or his estate) of the offense of conviction. The first is where the criminal conduct involves a “scheme, conspiracy, or pattern of criminal activity.” 18 U.S.C. § 3663A(a)(2); see also id. (extending restitution in such cases to “any person directly harmed by the defendant’s criminal conduct”); United States v. Fogg, 409 F.3d 1022, 1028 (8th Cir.2005) (“Unless the charged offense has a scheme, conspiracy, or pattern of criminal activity as an element, ... the restitution order may only cover losses from the specific offense for which the defendant was indicted and convicted.”). In this case, the offense of conviction does not contain as an element a scheme, conspiracy, or pattern of criminal activity.

Second, the MVRA authorizes restitution “to persons other than the victim of the offense,” “if agreed to by the parties in a plea agreement.” 18 U.S.C. § 3663A(a)(3). We' do not think such a promise can be found in the plain language of Ms. Gordon’s plea agreement, although such a promise could have been included. The plea agreement stated, “the Court must order the payment of restitution to the victim(s) of the offense.” I.R. Doc. 8, at 2 (emphasis added). Additionally, Ms. Gordon’s petition to enter a guilty plea stated, “the judge may require you to make restitution to any victim of the offense.” R. Doc. 9, at 4 (emphasis added). It is noteworthy that the plea agreement and petition to enter a guilty plea refer to “the offense” in the singular. Ms. Gordon pled guilty to only one offense, and that was the illegal use of Mastercard # 9512. That offense had only one victim, and the loss to that victim caused by the offense was only $7,950.98. Tf Ms. Gordon agreed to pay restitution to multiple victims, it was only to the extent that the single count to which she pled guilty caused loss to multiple victims. Although it could have been so structured, nowhere in the plea agreement, the petition to enter a guilty plea, or the plea colloquy did Ms. Gordon ever agree to pay restitution for losses caused by acts of credit card fraud other than the single count to which she pled guilty.

Although it may be argued that Ms. Gordon’s post-plea conduct at the sentencing hearing indicates she was willing to pay restitution to all the victims of her alleged credit card fraud, that is not the agreement that was entered into. When a contract is sufficiently clear on its face, we cannot reach a contrary interpretation based on post-hoc statements of intent or subsequent actions. See Restatement, supra, at § 203(b) (noting that “express terms are given greater weight than course of performance”). If the language of Ms. Gordon’s plea agreement was ambiguous, her post-plea conduct might be relevant. See United States v. Gebbie, 294 F.3d 540, 551-52 (3d Cir.2002). But, in this case, the plain language of the plea agreement shows Ms. Gordon did not agree to pay restitution beyond the amount causally linked to the single count to which she pled guilty. Thus, the district court was only authorized to order restitution in the amount of $7,950.98. As a result, the $68,698.52 restitution order is unlawful in these circumstances.

The government urges that we should exercise discretion and not recognize plain error. See United States v. Olano, 507 U.S. 725, 732, 113 S.Ct. 1770, 123 L.Ed.2d 508 (1993) (noting that appellate courts may decline to reverse plain error). It suggests that our power to recognize plain error should be used sparingly, and only in those circumstances in which a miscarriage of justice would result. See id. at 736, 113 S.Ct. 1770. Aside from the fact that an unlawful restitution order does constitute a miscarriage of justice because it is beyond the remedy authorized by statute, see Hahn, 359 F.3d at 1327, this court has, on several previous occasions, held that an unlawful restitution order constitutes plain error, see, e.g., United States v. Smith, 156 F.3d 1046, 1057 (10th Cir.1998); United States v. Guthrie, 64 F.3d 1510, 1515 (10th Cir.1995); United States v. Herndon, 982 F.2d 1411, 1421-22 (10th Cir.1992). We see no reason to deviate from that precedent. The district court’s restitution order is VACATED and the case is REMANDED for entry of an order in the amount of $7,950.98.

1 . We denied the government’s first motion in an order dated April 12, 2005.

2 . Ms. Gordon was hired to be a caretaker for two elderly women who subsequently died. She used credit cards in their names (and procured new credit cards using their personal information) and had the credit card statements mailed to a post office box under her control. Ms. Gordon also used the personal checks of one of the women after she died.

3 . We need not decide whether Ms. Gordon waived the right to appeal the amount of restitution generally, although we have no doubt that a defendant may, by inclusion of specific language in the plea agreement, agree to such a waiver.

4 . This case is different from one where a defendant merely challenges the district court’s factual calculation of the amount of restitution linked to an offense. Such an appeal would be precluded by a general waiver of the right to appeal the amount of restitution. In this case, however, the parties appear not to dispute that only $7,950.98 is causally linked to the offense of conviction. Thus, Ms. Gordon asks us to determine whether, as a legal matter, the district court's restitution order was unlawful.

5 . The point we implied in Wooten is that the amount causally linked to the offense charged is not capped by the statute. See Wooten, 377 F.3d at 1144 n. 1.