Utah Supreme Court
Can attorney fees be included in criminal restitution awards? State v. Sevastopoulos Explained
Summary
Kathleen Sevastopoulos pled guilty to theft after making unauthorized electronic transfers from her elderly parents’ bank account. The district court ordered restitution including attorney and accountant fees her parents incurred in third-party litigation against credit card companies. The Utah Supreme Court affirmed that such fees constitute recoverable pecuniary damages under the third-party tort rule.
Practice Areas & Topics
Analysis
In State v. Sevastopoulos, 2021 UT 70, the Utah Supreme Court addressed whether attorney and accountant fees incurred in third-party litigation can be included in criminal restitution awards under the Crime Victims Restitution Act.
Background and Facts
Kathleen Sevastopoulos made hundreds of unauthorized electronic transfers from her elderly parents’ bank account to pay her credit card bills. Her parents hired an attorney and accountant who identified the unauthorized transfers and pursued claims against the involved credit card companies. The professionals incurred $40,000 in fees but recovered $131,701.63 from the credit card companies. Sevastopoulos pled guilty to misdemeanor theft and theft by deception, and the district court ordered restitution that included the attorney and accountant fees as pecuniary damages.
Key Legal Issues
The central issue was whether attorney and accountant fees incurred in third-party litigation qualify as recoverable “pecuniary damages” under Utah Code § 77-38a-102(6). Sevastopoulos argued such fees were consequential damages that should be excluded from restitution awards.
Court’s Analysis and Holding
The Court applied the third-party tort rule from Restatement (Second) of Torts § 914(2), which provides that one who is required to act in protection of his interests through litigation against a third person may recover reasonable attorney fees and other expenditures. The Court found the fees constituted “demonstrable economic injury” that the parents could recover in a civil action arising from Sevastopoulos’s criminal activities. The fees were incurred in litigation against credit card companies that was necessitated by the defendant’s criminal conduct, not as punitive damages.
Practice Implications
This decision clarifies that professional fees incurred in third-party litigation directly caused by criminal conduct are recoverable as restitution. Practitioners should ensure the record establishes a clear causal connection between the defendant’s criminal acts and the necessity for third-party litigation. The decision also reinforces that unpreserved arguments regarding restitution calculations will be forfeited on appeal.
Case Details
Case Name
State v. Sevastopoulos
Citation
2021 UT 70
Court
Utah Supreme Court
Case Number
No. 20200157
Date Decided
December 23, 2021
Outcome
Affirmed in part and Remanded
Holding
Litigation expenses incurred in third-party litigation necessitated by a defendant’s criminal conduct qualify as recoverable pecuniary damages under the Crime Victims Restitution Act.
Standard of Review
Clear error for factual findings
Practice Tip
When seeking restitution for professional fees, ensure the record clearly establishes that such fees were incurred in third-party litigation directly caused by the defendant’s criminal conduct, not in litigation against the defendant.
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