Filed 6/14/17 P. v. Kuahuia CA4/3






NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). The opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FOURTH APPELLATE DISTRICT

DIVISION THREE


THE PEOPLE,

Plaintiff and Respondent,

v.

BENJAMIN MOHANEA KUAHUIA,

Defendant and Appellant.


G052850

(Super. Ct. No. 13WF0042)

O P I N I O N
Appeal from a postjudgment order of the Superior Court of Orange County, Dan McNerney, Judge. Reversed in part with directions.
Melissa Hill, under appointment by the Court of Appeal, for Defendant and Ayala.
Kamala D. Harris, Attorney General, Gerald A. Engler, Chief Assistant Attorney General, Julie L. Garland, Assistant Attorney General, Theodore M. Cropley and Warren J. Williams, Deputy Attorneys General, for Plaintiff and Respondent.
* * *
A jury convicted Benjamin Kuahuia of commercial robbery and other offenses. This court affirmed his convictions and sentence in an unpublished opinion. (People v. Kuahuia (Feb. 28, 2017, G051802 [nonpub. opn.].) Kuahuia now appeals from the postjudgment order requiring him to pay victim restitution. (Pen. Code, § 1202.4, subd. (f); all statutory citations are to the Penal Code unless noted.) Because the record is unclear whether the trial court awarded victim Susan W. restitution in excess of her economic losses, we reverse in part, and remand for further proceedings.

I
FACTUAL AND PROCEDURAL BACKGROUND
Kuahuia and an accomplice entered a Huntington Beach antique mall on the afternoon of September 25, 2012, pointed a handgun at the proprietor Susan W., physically assaulted her, and stole approximately 100 pieces of costume jewelry belonging to a vendor, Jewell C., who was not present during the robbery.
Before pronouncing judgment, the trial court conducted a contested restitution hearing. Susan W. requested $37,406.38 in restitution. She testified she closed her business from September 25, 2012, the date of the robbery, until April 16, 2013. Susan verified the document marked as exhibit 1 reflected her business losses and expenses, as well as her medical expenses. Susan used State Board of Equalization statements to calculate the “loss/profit” she did not receive during the relevant time periods.
Defense counsel cross-examined Susan about bank fees of $120 listed on exhibit 1. This was apparently for a credit card machine. The bank charged a fee even when the business was not operating. This was “something that [Susan] would have normally had to pay whether [she was] operating the business or not.” She did not contact the bank to suspend the account.
Counsel also asked about advertising expenses listed in exhibit 1. Susan paid $1,800 yearly for one publication, Striker, but the company allowed her to make $450 installment payments. She signed the most recent advertising contract in January 2013 while the business was closed. She described a similar arrangement with another publication, Antique Retro Guide. She also testified about phone and electricity expenses, and agreed she did not suspend services while the business was closed. Nor did she hire someone to work in the store during the closure. She paid the advertising, bank fees, and utilities because she anticipated reopening the business and therefore “kept everything going.”
Susan testified vendors rented space from her. Jewell’s rent was $900 at the time of the restitution hearing, but Susan was unsure what it had been three years earlier. Susan earned a 10 percent commission on items sold by Jewell in 2012.
Asked how she calculated “profit not realized,” Susan stated “[t]his was established by my accountant.” Defense counsel asked if she knew “whether that takes into effect business expenses off your proceeds to come up with a profit.” Susan stated “I would imagine that my accountant did that with Cyril [the prosecutor].”
Exhibit 1 is a one-page document listing income and expense items for October through December 2012, and for January through March 2013. The first listed line item for the October through December 2012 period is “Profit (Not Realized)*” The asterisk directs the reader to an adjacent box that provides: “* Average of gross sales for 2011 Oct/Nov/Dec & 2013 Oct/Nov/Dec[ ] = 29,133 + 28,045.00 = 57,178 / 2 = 28,589.00. [Susan’s] ‘profit’ that she would have realized is 50% of that amount (half goes to the vendor and half goes to her) = $14,294.50.” The next line item listed is “Rent ($1350 per month),” followed by expenses for advertising, bank fees, phone, and “Edison” (presumably the electric bill). Exhibit 1 provides similar information for the first quarter of 2013, including “Profit (Not realized)**” of $12,024.25 (“** Average of gross sales for 2011 Jan/Feb/Mar & 2012 Jan/Feb/Mar = 22,435 + 25,662 = 48,097 / 2 = 24,048.50. [Susan’s] ‘profit’ she would have realized is 50% of that amount = $12,024.25.” The trial court ordered Kuahuia to pay Susan $37,406.38 in restitution.
Jewel C.
The court judicially noticed Jewell’s trial testimony the robbers took approximately 100 items, including costume jewelry and watches. The items ranged in value from $8 to $175. The prosecutor also submitted a statement from Jewell (exhibit 2). Jewell stated she was a professional estate agent and antique dealer, specializing in vintage costume and fine jewelry. She rented a sales space in Susan’s mall. “The way my inventory system works is I buy the jewelry and put it in the store with no inventory number. When the item sells, I get a tag back from the store and it is inventoried at that time. My case is always very full - not a blank space anywhere! The jewelry items in my case range from $8.00 [to] $3,500.00. The area that was affected by the robbery had strictly costume jewelry, with the exception of possibly a few watches with gold bezels. The items there would have ranged from $8.00 [to] $175.00. There was most likely approximately 100 items there. A modest estimate of the items value - in my closest expert opinion - might be around $5,000. [¶] Again, this is an estimate. I freely admit that I do not know exactly what was taken because of both the volume of jewelry I deal with on a daily basis and the way I handle the inventory of costume jewelry.” The trial court ordered $5,000 in restitution as a reasonable estimate of the fair market value of the stolen jewelry.


II
DISCUSSION
A. Restitution to Susan W.
Kuahuia contends the trial court erred by awarding Susan both her lost “profit,” which he argues was her gross sales for the months her store was closed, and her overhead expenses (rent, advertising, utilities) for that period. He observes the term “gross sales” refers to overall sales not including operating expenses or other charges. (See <http://www.investopedia.com/terms/g/grosssales.asp> (as of June 7, 2017).) Kuahuia asserts Susan “would have had to pay business overhead out of gross sales revenue even if she had not been robbed. The price set as commission on other vendors’ booth sales would have taken into account the antique mall’s overhead, depreciation and profit. [] Accordingly, the victim’s business overhead was not a compensable loss under the statutory scheme.”
1. Forfeiture
The Attorney General contends Kuahuia forfeited this claim because he did not “challenge whether [Susan] calculated her losses using the proper calculations.” (See People v. Nelson (2011) 51 Cal.4th 198, 227 [defendant forfeited claim trial court erred by imposing $10,000 restitution fine by failing to object at sentencing]; People v. Gamache (2010) 48 Cal.4th 347, 409 [same].)
Kuahuia contends he did not forfeit the claim because the restitution order was in excess of what was authorized by section 1202.4. (See People v. Scott (1994) 9 Cal.4th 331, 354 [sentence is unauthorized where it could not lawfully be imposed under any circumstances in the particular case]; People v. Rowland (1988) 206 Cal.App.3d 119, 126 [sentence failing to impose Government Code section 13967 restitution fine “‘unauthorized’” and subject to correction at any time]; People v. Terrell (1999) 69 Cal.App.4th 1246, 1255-1256 [failure to impose parole revocation fine under section 1202.45 unauthorized].) Alternatively, he claims any failure to preserve the issues amounted to the ineffective assistance of counsel. (People v. Pangan (2013) 213 Cal.App.4th 574.)
The prosecutor argued in the trial court exhibit 1 laid “out the calculation how we got to the number of $37,406.38. [¶] Even though the business remained closed, the business continued to have expenses. And as [Susan] testified to, the intention all along even after the incident was to reopen the store. So the incurring of those costs is reasonable under these circumstances.”
Defense counsel responded the court should “cut the restitution amount down to a more reasonable amount of months. I believe the victim in this case would have the duty to mitigate some of these damages. The business was closed for six, almost seven months.” Counsel noted “business expenses would have continued had the business been open or the business closed. And some of those expenses [Susan incurred] at the beginning of the year would have had to remain paying her monthly payments via contract. We don’t have an issue with any of those expenses that would have continued. [¶] But the fact that she didn’t reopen . . . the store, didn’t hire someone to reopen . . . within a reasonable time . . . perhaps three months would be reasonable . . . . [¶] [¶] In addition to that, the business did gain benefit from the advertising that was paid for, the rent would have had to have been paid whether the business was operating or closed as it were. And the profit, which defense doesn’t have an issue with the actual number there, likely would have included all those expenses. [¶] So with that, I would ask the court to cut down the amount of months that Mr. Kuahuia is responsible for.” (Italics added.)
Here, although Kuahuia’s primary claim below dealt with the victim’s alleged failure to reopen the store earlier and mitigate her losses, counsel also contested whether the victim’s gross profits “included all those expenses.” Kuahuia therefore did not forfeit the claim.


2. Merits
A crime victim has the right to restitution for losses caused by the defendant. (Cal. Const., art. I, § 28, subds. (b)(13)(A) & (B); People v. Giordano (2007) 42 Cal.4th 644, 652 (Giordano) “[I]n every case in which a victim has suffered economic loss as a result of the defendant’s conduct, the court shall require that the defendant make restitution to the victim or victims in an amount established by court order, based on the amount of loss claimed by the victim or victims or any other showing to the court. . . . The court shall order full restitution.” (§ 1202.4, subd. (f).) “unless it finds compelling and extraordinary reasons for not doing so . . . .” (§ 1202.4, subd. (g).)
“The defendant has the right to a hearing before a judge to dispute the determination of the amount of restitution.” (§ 1202.4, subd. (f)(l).) “At a victim restitution hearing, a prima facie case for restitution is made by the People based in part on a victim’s testimony on, or other claim or statement of, the amount of his or her economic loss. [Citations.] ‘Once the victim has . . . made a prima facie showing of his or her loss, the burden shifts to the defendant to demonstrate that the amount of the loss is other than that claimed by the victim.” (People v. Millard (2009) 175 Cal.App.4th 7, 26.)
“A restitution order is intended to compensate the victim for its actual loss and is not intended to provide the victim with a windfall. [Citations.] While the court need not order restitution in the precise amount of loss, it ‘must 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.’ [Citations.]” (People v. Chappelone (2010) 183 Cal.App.4th 1159, 1172-1173 (Chappelone).) A trial court has broad discretion to choose a method for calculating the amount of restitution, but must employ a method that is rationally designed to determine the victim’s economic loss. (Giordano, supra, 42 Cal.4th at p. 663.) A trial court’s restitution order is reviewed for abuse of discretion. (Giordano, supra, at p. 663 [whether ruling falls outside the bounds of reason under the applicable law and the relevant facts].) To facilitate appellate review, the trial court must “make a clear statement of the calculation method used and how that method justifies the amount ordered.” (Id. at p. 664.)
Susan was entitled to restitution in full for her economic losses. (§ 1202.4, subds. (a)(1), (f).) This would include the “profits” she lost while the store was closed. (§ 1202.4, subd. (f)(3)(D) [profits lost due to the victim’s injury].) “Profit” is generally calculated by taking gross revenue and subtracting expenses. (Cf. Kids’ Universe v. In2Labs (2002) 95 Cal.App.4th 870, 884 [net profits are the gains made from sales after deducting labor, materials, rents, and all expenses, together with the interest of the capital employed].) Susan received a windfall if the trial court awarded Susan her gross sales revenue plus her overhead expenses (rent, advertising, bank fees, phone, electric). (Chappelone, supra, 183 Cal.App4th at p. 1172; see People v. Thygesen (1999) 69 Cal.App.4th 988, 994 (Thygesen) [overhead is an ongoing factor in any business; restitution to owner of stolen rental item might include loss of revenue the stolen item would have produced, but price set on rental necessarily provides for overhead, depreciation, and profit].)
Exhibit 1 refers to the “[a]verage of gross sales” for the prior periods, and states Susan’s realized profit was “50% of that amount (half goes to the vendor and half goes to [Susan].” Susan stated she or her accountant used Board of Equalization statements to estimate her losses. The Board of Equalization collects sales and use tax, which are taxes based on total or gross sales. (See <https://www.boe.ca.gov/pdf/ boe401ez2.pdf> (as of June 7, 2017) [short form sales and use tax return].) The evidence suggests Susan’s accountant was reporting Susan’s gross sales rather than her net profit for these periods. The court’s ruling focused only on the reasonableness of the store closure, and it did not expressly determine whether “Profit (Not Realized)” referred to gross sales or net profits. Consequently, we must remand for a new hearing on this issue. The parties may present additional evidence. (See also Giordano, supra, 42 Cal.4th at p. 664 [to facilitate appellate review trial court must make a record of the restitution hearing, analyze the evidence presented, and make a clear statement of the calculation method used and how that method justifies the amount ordered].)
B. Restitution to Jewell C.
Section 1202.4, subdivision (f)(3)(A), provides a victim shall be reimbursed for “the value of stolen []property. The value of stolen [] property shall be the replacement cost of like property . . . .”
The prosecutor argued the trial court should award Jewell restitution based on the number of items (100) multiplied by $91.50, the average value of the items (average of $8 and $175), or $9,150. Alternatively, the court could award Jewell $5,000 based on Jewell’s estimate.
The trial court explained, “I believe that the test is the fair market value of the goods at the time of the incident,” and therefore awarded $5,000 based on Jewell’s “extremely conservative estimate.”
Kuahuia argues Jewell’s testimony and letter “setting forth the average sale prices of items in the costume jewelry showcase from which an estimated 100 items were taken” established “the amount of restitution based on the claimed fair market value of the stolen property [] rather than . . . profit loss, or an estimate of the ‘replacement cost of like property.’” He also states “[t]here was no evidence . . . of [her] customary markup on jewelry purchased at private sales, her average monthly profits from the sale of costume jewelry at the [antique mall], or even the number of items she typically sold each month from that location.” “There is no testimony, and no statement in [Jewell’s] letter, suggesting that the valuation of the jewelry was based on the price she paid when buying ‘large quantities of jewelry from people who want to sell.’ [] Her testimony and letter are clear that she does not even attempt to establish values for individual pieces of jewelry until they are sold for a particular price. [] [¶] Moreover, the trial court clearly understood this to be the case, and established a restitution amount based on an estimate of fair market value. [] The court also refused to make a deduction for the ten percent commission that [Jewell] would have had to pay to [Susan].”
Kuahuia relies on Chappelone, supra, 183 Cal.App.4th 1159. There, the court awarded a retailer restitution based on the “last retail price” of the stolen merchandise, even though most of it was unsellable or broken, and had an actual value to the store of much less than the requested restitution amount. (Id. at p. 1173.) The appellate court concluded the retailer “was entitled only to restitution equal to the value of the stolen property, and by all accounts at the hearing, the value was substantially less than the last retail price for most goods. By failing to account for the fact that a majority of the stolen merchandise was already damaged at the time of the theft – and thus destined for donation – the trial court awarded [the retailer] restitution for property that was of greater quality than that which defendants stole. This contravened section 1202.4, subdivision (f)(3)(A)’s, mandate that the victim is only entitled to compensation for like property. As such, it was an abuse of discretion.” (Id. at pp. 1176-1177, italics added; see Thygesen, supra, 69 Cal.App.4th at pp. 994-995 [if a car rental agency lost a 1995 Ford Taurus it would be entitled to the replacement value of a similar 1995 Ford Taurus, not a 1999 model].)
Chappelone is distinguishable from the restitution order here. In Chappelone, the prosecution argued for restitution based on the retail price because profit lost by a victim is a compensable item. The court agreed the victim’s economic loss may include lost revenue or profit where there is evidence of such loss. (Chappelone, supra, 183 Cal.App.4th at p. 1179.) But the prosecutor presented no evidence the retailer lost any profits from the theft because most of the stolen merchandise was damaged and never going to be sold to customers, and as to the small percentage of new, sellable items, there was no evidence that there was not a comparable replacement to sell to the retailer’s customers. “These were not unique products, but were mass-produced consumer goods that [the retailer] sold in abundance.” (Ibid.)
Chappelone holds a seller of goods is entitled to the fair value of the property at the time of the theft. Nothing suggests the value of the stolen property was less than the estimated value ascribed by Jewell. The court also could conclude the stolen jewelry was not a mass-produced good, but was a unique, albeit inexpensive product. The trial court therefore reasonably relied on Jewell’s estimate as a basis to make her whole. Kuahuia does not provide legal argument why the court should have deducted a 10 percent commission on property that was not sold. Finally, there was evidence the value of Jewell’s property exceeded $5,000. We discern no abuse of discretion.
III
DISPOSITION
The award of restitution to Susan W. is reversed in part, and the matter is remanded to the trial court to determine whether Susan’s claim for “Profit (Not Realized)” refers to gross sales or net profits. The order is affirmed as to Jewell C.



ARONSON, J.

WE CONCUR:



BEDSWORTH, ACTING P. J.



THOMPSON, J.