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Vigilant Insurance Co. v. Chiu

June 29, 2009

VIGILANT INSURANCE COMPANY, PLAINTIFF AND RESPONDENT,
v.
ROBERT C. CHIU ET AL., DEFENDANT AND APPELLANT.



APPEAL from a judgment of the Superior Court of Los Angeles County, R. Bruce Minto, Judge. Affirmed. (Los Angeles County Super. Ct. No. KC048092).

The opinion of the court was delivered by: Croskey, J.

CERTIFIED FOR PUBLICATION

In this case, the appellant, Robert G. Chiu aka Chih Yuan Chiu (Robert), seeks reversal of a judgment entered in favor of the respondent, Vigilant Insurance Company (Vigilant). Robert claims that Vigilant cannot obtain a judgment in this action since he has already been ordered to pay restitution as part of his criminal sentence for grand theft and that the restitution order includes the same amounts which Vigilant has recovered in the instant case. We disagree and hold that the restitution statute (Penal Code, § 1202.4) does not preclude entry of a civil judgment for economic losses that may also be the subject of the criminal restitution order.*fn1

FACTUAL AND PROCEDURAL BACKGROUND*fn2

On April 7, 2004, Robert was convicted of the crime of grand theft. Over a period of time, he had stolen $397,085.31 worth of computer accessories, including monitors, peripherals, keyboards and other parts, from his employer, ViewSonic.*fn3 As a part of his sentence, Robert was ordered to pay restitution to ViewSonic in the total sum of $615,000 pursuant to Penal Code, section 1202.4 (Section 1202.4), subdivision (f). This included the value of the stolen property, as well as lost profits and opportunity costs, and pre-order interest.

Vigilant had issued a policy of crime insurance to ViewSonic covering the period March 1, 2003 to March 1, 2004 (Crime Insurance Policy No. 3533-19-86/029 [the Policy].) It covered ViewSonic for the loss resulting from Robert‟s theft of its property. On September 4, 2005, pursuant to the terms of the Policy, Vigilant paid to ViewSonic the sum of $347,085.31 (after subtracting a $50,000 deductible). In consideration of such payment, ViewSonic executed a release and assignment of all of its rights against Robert in favor of Vigilant.*fn4

Vigilant filed this action against Robert on March 30, 2006, alleging counts for fraud, conversion and embezzlement. It sought recovery for the loss it had actually paid to its insured, $347,085.31, plus the insured‟s deductible of $50,000. After a bench trial, the court awarded judgment in favor of Vigilant totaling $504,306.89 which consisted of $397,085.31 in actual damages, interest of $105,853.15 and costs in the amount of $1,368.43.

At trial, Robert sought to defeat Vigilant‟s action by arguing that Vigilant, by virtue of the assignment from ViewSonic, already had what amounted to a judgment against Robert in the sum of $615,000 based on the same facts.*fn5 While Section 1202.4, subdivision (i) does provide that, "[a] restitution order imposed pursuant to subdivision (f) shall be enforceable as if the order were a civil judgment," the trial court nonetheless rejected Robert‟s contention that entry of judgment in favor of Vigilant would amount to an unlawful duplicative judgment. It held that nothing in Section 1202.4 precluded a separate civil action by the victim (or assignee) despite the existence of a restitution order.

Robert filed this timely appeal arguing that the judgment was improper because (1) Vigilant, as the assignee of its insured, already had an enforceable judgment against Robert and was not entitled to a second duplicative judgment; (2) as a matter of law, there cannot be two civil judgments for the same injury; and (3) the trial court erred in excluding expert testimony as to the legislative purpose and intent behind Section 1202.4 and its provisions for restitution.

DISCUSSION

The resolution of this case, in reality, depends on the answer to a single question. Does an order of restitution under Section 1202.4 in favor of a victim of a crime preclude the victim (or the victim‟s assignee) from pursuing a separate civil action based on the same facts from which the criminal conviction arose? We conclude that it does not.

The people of California voted to enact Proposition 8, the "Victim‟s Bill of Rights," on June 8, 1982. The proposition added article I, section 28, subdivision (b) to the California Constitution, which declared that "all persons who suffer losses as a result of criminal activity shall have the right to seek and secure restitution from the persons convicted of the crimes causing the losses they suffer." Article I, section 28, subdivision (b) required the Legislature to enact these rights within one calendar year; Section 1202.4 was one of many statutes passed in response.

The purpose of Section 1202.4 reflects the mandate of the article I, section 28, subdivision (b). Section 1202.4 starts: "It is the intent of the Legislature that a victim of crime who incurs any economic loss as a result of the commission of a crime shall receive restitution directly from any defendant convicted of that crime." All defendants who have been convicted of a crime must make restitution for the economic losses suffered by their victims as well as to pay a fine payable to the Restitution Fund.*fn6 As set out in Section 1202.4, subdivision (f), full restitution for the victim‟s economic loss is required, unless the court finds "compelling and extraordinary reasons for not doing so."

While Section 1202.4 is partly based on the right of victim compensation set out in Proposition 8 and article I, section 28, subdivision (b) of the California Constitution, restitution orders also serve the state‟s interest "in rehabilitation and punishment." (People v. Moser (1996) 50 Cal.App.4th 130, 135.) Accordingly, restitution also serves a rehabilitative purpose by " "ensur[ing] that "amends [are] made to society for the breach of the law.‟ " (People v. Crow (1993) 6 Cal.4th 952, 957.) It acts as a "deterrent to future criminality" by forcing criminals to directly face the harm they have caused to their victims. (Ibid.; see People v. Moser, supra, at p. 134.) ...


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