Utah Court of Appeals
Can criminal restitution orders include attorney fees from third-party litigation? State v. Sevastopoulos Explained
Summary
Kathleen Sevastopoulos stole over $246,000 from her parents through unauthorized electronic transfers to pay her credit card bills. After pleading guilty to theft and theft by deception, she challenged the district court’s restitution order of $148,243.27. The court of appeals affirmed most of the order but reversed the inclusion of two transfers totaling $657.43 that the mother had explicitly authorized.
Analysis
In State v. Sevastopoulos, the Utah Court of Appeals addressed whether criminal restitution orders can include attorney and accountant fees incurred in third-party litigation necessitated by a defendant’s crimes. The decision clarifies an important exception to the general rule that litigation expenses are not recoverable in criminal restitution proceedings.
Background and Facts
Kathleen Sevastopoulos admitted to making approximately 200 unauthorized electronic transfers from her parents’ bank account, stealing over $246,000 to pay her credit card bills. After her parents discovered the thefts, they hired an attorney who retained a forensic accountant to investigate. The attorney filed lawsuits against multiple credit card companies to recover the stolen funds, ultimately recovering $131,701.63. The legal and accounting fees totaled $40,000. Sevastopoulos pleaded guilty to theft and theft by deception, and the district court ordered restitution of $148,243.27, which included the attorney and accountant fees.
Key Legal Issues
The primary issue was whether attorney and accountant fees incurred in third-party litigation are recoverable as pecuniary damages under Utah’s Crime Victims Restitution Act. Under the statute, pecuniary damages include “all demonstrable economic injury, whether or not yet incurred, which a person could recover in a civil action arising out of the facts or events constituting the defendant’s criminal activities.”
Court’s Analysis and Holding
The court applied the third-party tort rule, which provides that “one who through the tort of another has been required to act in the protection of his interests by bringing or defending an action against a third person is entitled to recover reasonable compensation for loss of time, attorney fees and other expenditures.” The court distinguished these fees from general litigation costs or criminal investigative expenses, emphasizing that the parents incurred these expenses specifically to pursue recovery from the credit card companies—third parties—not to assist in Sevastopoulos’s prosecution. The court noted this rule promotes equity by incentivizing victims to protect their interests and mitigate damages.
Practice Implications
This decision provides important guidance for practitioners handling restitution matters. When victims incur attorney fees in third-party litigation necessitated by a defendant’s criminal conduct, these fees may be recoverable as restitution. However, courts must ensure proper allocation between recoverable fees for third-party litigation and non-recoverable fees for pursuing the defendant directly. The decision also demonstrates that defendants cannot successfully challenge restitution orders by focusing only on favorable evidence while ignoring contradictory testimony and documentary proof of their criminal conduct.
Case Details
Case Name
State v. Sevastopoulos
Citation
2020 UT App 6
Court
Utah Court of Appeals
Case Number
No. 20180452-CA
Date Decided
January 3, 2020
Outcome
Affirmed in part and Reversed in part
Holding
Attorney and accountant fees incurred in third-party litigation to recover stolen funds are recoverable as restitution under the third-party tort rule, but courts cannot order restitution for explicitly authorized transfers.
Standard of Review
Abuse of discretion for restitution orders; correctness for ineffective assistance of counsel claims raised for the first time on appeal
Practice Tip
When challenging restitution orders, focus on the complete evidentiary record rather than cherry-picking favorable facts, as courts will consider all evidence supporting proximate causation.
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