The PEOPLE, Plaintiff and Respondent, v. Andres Antonio CASTRO, Defendant and Appellant.
Following his conviction by a jury on several felony charges, with enhancements, appellant Andres Antonio Castro was sentenced to prison for 11 years 8 months and was ordered to pay a restitution fine of $5,000 pursuant to Government Code section 13967, subdivision (a). In the unpublished portion of this opinion we will conclude that one sentence enhancement was improperly imposed, and we will order it stricken. In the published portion we will address several issues involving the restitution fine.
PROCEDURAL HISTORY **
DISCUSSIONI.–IV.**V. Restitution Fine
Appellant contends it was error to impose the $5,000 restitution fine pursuant to Government Code section 13967, subdivision (a) because the trial court did not consider appellant's ability to pay the fine and because there is nothing in the record to support an implicit finding that appellant has an ability to pay the fine. Appellant notes the probation report recommends a $5,000 fine without discussion of ability to pay and notes appellant has no assets and has been unemployed since 1990. Respondent contends appellant waived any right to challenge the fine by failing to object to its imposition and that appellant has not made a showing that he cannot pay the fine. Respondent suggests the record supports the opposite conclusion because the probation report states appellant is in good health, has no handicaps, and has no liabilities.
The parties' positions in this case raise several issues concerning the imposition of restitution fines pursuant to Government Code section 13967, subdivision (a).
• Must the court consider and make a finding on the defendant's ability to pay?
• If a finding is required, must it be express or may it be implied?
• Does a defendant, with notice that a Government Code section 13967 fine is being recommended, waive the right to challenge the fine by failing to object at sentencing?
• What must appear in the record to support a finding of ability to pay?
A. Is an ability-to-pay finding required?
Government Code section 13967, subdivision (a) provides as follows:
“Upon a person being convicted of any crime in the State of California, the court shall, in addition to any other penalty provided or imposed under the law, order the defendant to pay restitution in the form of a penalty assessment in accordance with Section 1464 of the Penal Code and to pay restitution to the victim in accordance with subdivision (c). In addition, if the person is convicted of one or more felony offenses, the court shall impose a separate and additional restitution fine of not less than two hundred dollars ($200), subject to the defendant's ability to pay, and not more than ten thousand dollars ($10,000). In setting the amount of the fine for felony convictions, the court shall consider any relevant factors including, but not limited to, the seriousness and gravity of the offense and the circumstances of its commission, any economic gain derived by the defendant as a result of the crime, and the extent to which others suffered losses as a result of the crime. Those losses may include pecuniary losses to the victim or his or her dependents as well as intangible losses, such as psychological harm caused by the crime. Except as provided in Section 1202.4 of the Penal Code and subdivision (c) of this section, under no circumstances shall the court fail to impose the separate and additional restitution fine required by this section. This fine shall not be subject to penalty assessments as provided in Section 1464 of the Penal Code.” (Emphasis added.)
Penal Code section 1202.4, which is referred to in Government Code section 13967, subdivision (a), provides as follows:
“(a) In any case in which a defendant is convicted of a felony, the court shall order the defendant to pay a restitution fine as provided in subdivision (a) of Section 13967 of the Government Code. Such restitution fine shall be in addition to any other penalty or fine imposed and shall be ordered regardless of the defendant's present ability to pay. However, if the court finds that there are compelling and extraordinary reasons, the court may waive imposition of the fine. When such a waiver is granted, the court shall state on the record all reasons supporting the waiver.
“(b) In any case in which the defendant is ordered to pay restitution as a condition of probation, the order to pay the restitution fine, or portion thereof, may be stayed pending the successful completion of probation, and thereafter the stay shall become permanent.
“(c) If the restitution fine has been stayed pending successful completion of probation, upon revocation of probation and imposition of sentence the stay shall be lifted. The amount of restitution fine shall be offset by any restitution payments actually made as a condition of probation. Nothing in this section authorizes the stay of an order of restitution to the victim.”
There is an apparent conflict between Government Code section 13967's “ability to pay” language and that in Penal Code section 1202.4.
The legislative history of the “ability to pay” language can be divided into three stages. When Government Code section 13967 was first enacted in 1973, it allowed a trial court to assess restitution fines only against defendants convicted of a “crime of violence” if the court found that the defendant had a present ability to pay. (Gov.Code, § 13967, added by Stats.1973, ch. 1144, § 2, p. 2351.) Later amendments did not affect the “ability to pay” language. (People v. Vega–Hernandez (1986) 179 Cal.App.3d 1084, 1090–1091, 225 Cal.Rptr. 209.)
In 1983, Proposition 8 (The Victim's Bill of Rights) was passed by the voters of California, adding article I, section 28, subdivision (b) to the state Constitution. As a result of Proposition 8, pursuant to the enabling authority, Government Code section 13967 was rewritten and Penal Code section 1202.4 was enacted. (People v. Vega–Hernandez, supra, 179 Cal.App.3d at pp. 1090–1091, 225 Cal.Rptr. 209; People v. Romero (1985) 167 Cal.App.3d 1148, 1155, 213 Cal.Rptr. 774.) Both the revised Government Code section 13967 and Penal Code section 1202.4 made it very clear that the defendant's ability to pay was not relevant to the decision to impose a restitution fine. Under the new (post-Prop. 8) scheme, a trial court imposing a restitution fine had to consider several identified factors, none of which relate to the defendant's present or future ability to pay: seriousness and gravity of the offense, the circumstances of its commission, any economic gain derived by the defendant, and the extent others suffered loss as a result of the crime. (Gov.Code, § 13967, as amended Stats.1983, ch. 1092, § 135.2, p. 3998; Pen Code, § 1202.4, added by Stats.1983, ch. 1092, § 320.1, p. 4058; People v. Romero, supra, 167 Cal.App.3d at p. 1155, fn. 4, 213 Cal.Rptr. 774.)
Thus, before 1983, a defendant's ability to pay was a part of the equation in determining whether a restitution fine could be imposed. Between 1983 and 1992 it was not, and the trial court was required to impose at least the minimum (initially $10, later raised to $100) and could impose up to $10,000 without any consideration of a defendant's ability to pay.9 (People v. McGhee (1988) 197 Cal.App.3d 710, 715, 243 Cal.Rptr. 46.) After 1992, the defendant's ability to pay became a factor again, although Penal Code section 1202.4 continues to state that a fine shall be ordered “regardless of the defendant's present ability to pay.”
The state appellate courts have attempted to reconcile the apparent conflict in the language of the two statutes. In People v. Frye (1994) 21 Cal.App.4th 1483, 27 Cal.Rptr.2d 52, the Third Appellate District held that the clear language of the 1992 amendment and the link between the increase in the minimum fine and the “ability to pay” language in the legislative history requires the trial court to consider the defendant's ability to pay before imposing a restitution fine. (Id. at p. 1486, 27 Cal.Rptr.2d 52.) Other courts have decided the issue depending on the amount of fine imposed. Whether this is a valid approach under the statute is an issue currently before the California Supreme Court in a series of cases in which review has been granted. (See People v. Wilson (1994) 21 Cal.App.4th 885, 26 Cal.Rptr.2d 537, review granted, 29 Cal.Rptr.2d 152, 871 P.2d 204; People v. Robles (1994) 22 Cal.App.4th 256, 27 Cal.Rptr.2d 196, review granted, 29 Cal.Rptr.2d 152, 871 P.2d 204; People v. Hicks (1994) 22 Cal.App.4th 12, 27 Cal.Rptr.2d 292, review granted, 29 Cal.Rptr.2d 538, 871 P.2d 1133.)
The trial court imposed a $5,000 restitution fine on appellant. This is a significant fine well above the minimum of $200. We believe the clear language of Government Code section 13967, subdivision (a), as amended in 1992, requires a finding that the defendant has the ability to pay the fine before it can be imposed. This interpretation is consistent with earlier cases requiring such a finding under the pre–1983 language. (See People v. Maestas (1987) 194 Cal.App.3d 1499, 1511, 240 Cal.Rptr. 360; People v. Gray (1986) 187 Cal.App.3d 213, 221–223, 231 Cal.Rptr. 658; People v. Vega–Hernandez, supra, 179 Cal.App.3d at p. 1100, 225 Cal.Rptr. 209.)
The trial court did not conduct any formal hearing and did not make any express findings before imposing the $5,000 fine. A sentencing court is not under any constitutional or statutory duty to conduct a formal evidentiary hearing on ability to pay or any other aspect of a restitution fine unless the fine is made a condition of probation. Due process is afforded if a defendant is given notice of the amount of fine and a reasonable opportunity to respond at the sentencing hearing. (See People v. Goulart (1990) 224 Cal.App.3d 71, 84–85, 273 Cal.Rptr. 477; People v. Blankenship (1989) 213 Cal.App.3d 992, 997–998, 262 Cal.Rptr. 141; People v. Rivera (1989) 212 Cal.App.3d 1153, 1161, 261 Cal.Rptr. 93; People v. Sandoval (1989) 206 Cal.App.3d 1544, 1549, 254 Cal.Rptr. 674; People v. Long (1985) 164 Cal.App.3d 820, 826–827, 210 Cal.Rptr. 745.) Whether the trial court was required to make an express finding of ability to pay, however, is another question.
B. Implicit v. express findings
Cases decided under the pre–1983 version of Government Code section 13967 held that the ability-to-pay finding need not be expressed but could be implied. (People v. Goulart, supra, 224 Cal.App.3d at pp. 84–85, 273 Cal.Rptr. 477; People v. Blankenship, supra, 213 Cal.App.3d at p. 998, fn. 5, 262 Cal.Rptr. 141.) Case law also established that the trial court was not required to state reasons on the record for imposing any given amount of fine. (Ibid.; People v. Gray, supra, 187 Cal.App.3d at pp. 221–222, 231 Cal.Rptr. 658; People v. Romero (1985) 167 Cal.App.3d 1148, 1155–1156, 213 Cal.Rptr. 774.) The rationale of these decisions is that the imposition of a restitution fine is a sentencing choice within the discretion of the trial court and one which has only minimal impact on the defendant. We believe the same rationale applies under the current statutory language, and appellant has offered no persuasive argument to the contrary.
People v. Frye, supra, 21 Cal.App.4th 1483, 27 Cal.Rptr.2d 52, rejected an argument that the trial court must make an express determination of the defendant's ability to pay a restitution fine. (Id. at pp. 1485–1486, 27 Cal.Rptr.2d 52.) We do likewise and conclude that the court impliedly found appellant had the ability to pay a $5,000 restitution fine.
Respondent argues that appellant waived his right to challenge imposition of the fine by failing to object in the trial court. Respondent notes that the probation officers' reports recommended imposition of a $5,000 fine and appellant never contested that recommendation.
Respondent cites several cases in support of its position. (People v. Blankenship, supra, 213 Cal.App.3d 992, 262 Cal.Rptr. 141; People v. Ryan (1988) 203 Cal.App.3d 189, 249 Cal.Rptr. 750; People v. Vournazos (1988) 198 Cal.App.3d 948, 244 Cal.Rptr. 82). Those cases are not dispositive of the issues presented here.
In People v. Blankenship, supra, the defendant was ordered to pay restitution directly to two victims and the indemnity insurance company of one of the victims, under Government Code section 13967, subdivision (c). In addition, the court imposed a $100 restitution fine under subdivision (a) of that section. The probation officer's report gave the defendant notice of the recommended restitution amounts. The defendant made no objection and did not request a hearing on restitution issues. On appeal he attacked the restitution orders on various grounds.
The appellate court held that the attack on due process grounds was waived by the defendant's failure to object to the procedure or to challenge the accuracy of the monetary claims on which the order was based. (People v. Blankenship, supra, 213 Cal.App.3d at p.997,262Cal.Rptr.141.) The court held the waiver precluded review of the appellate challenge to the restitution order for lack of specificity. (Id. at p. 998, 262 Cal.Rptr. 141.) Nonetheless, the court considered the merits of the defendant's contention that the trial court erred in ordering restitution in favor of a victim's insurer. The appellate court ultimately agreed with the defendant and struck the ordered restitution to the insurer. (Id. at pp. 998–1000, 262 Cal.Rptr. 141.) By considering that issue on its merits, the appellate court impliedly rejected any claim of waiver based on the failure to object below.
We read Blankenship as holding that objections to the procedure followed by the sentencing court in making restitution orders are waived by failure to raise them in the trial court, but a claim that the sentencing court has exceeded its statutory power to impose a restitution fine may be raised for the first time on appeal. (See also People v. Neal (1993) 19 Cal.App.4th 1114, 1120, 24 Cal.Rptr.2d 129 [waiver not applicable to errors going to jurisdiction of court to impose sentence].) We also note that Blankenship was decided when restitution orders under Government Code section 13967 were not dependent upon the defendant's ability to pay. Thus, Blankenship is not direct authority on the issues before us.
In People v. Ryan, supra, 203 Cal.App.3d 189, 249 Cal.Rptr. 750, the defendant was ordered to pay restitution directly to a victim as a condition of probation. On appeal he was precluded from challenging the order on grounds there was no evidence or finding of his ability to pay. The reasons for the appellate ruling were that the defendant's counsel expressly told the sentencing court the defendant was ready to make full restitution to the victim, that he disputed only a small portion of the total claimed by the victim, and that he would comply with the conditions of probation. Ryan stands for the proposition that when a defendant in effect concedes he has the ability to pay restitution and is not denied the opportunity to present evidence, he may not challenge the order on appeal. (Id. at pp. 198–199, 249 Cal.Rptr. 750.) In our case respondent does not point us to any statement made by appellant or his attorney which amounts to any concession of ability to pay. Thus, we do not find Ryan helpful.
People v. Vournazos, supra, 198 Cal.App.3d 948, 244 Cal.Rptr. 82 also involved orders to pay restitution to a victim as a condition of probation. On appeal the defendant contended the orders were invalid because there was no finding of his ability to pay. (Id. at p. 957, 244 Cal.Rptr. 82.) The appellate court reached the merits of his claim without any discussion of waiver. The court concluded there was an implied finding of ability to pay (ibid.) and that the finding was supported by substantial evidence. (Id. at p. 958, 244 Cal.Rptr. 82.) Vournazos does not support the argument made by respondent here.
We know of two other cases, not cited by the parties, which bear discussion on the waiver issue. The first is People v. Zito (1992) 8 Cal.App.4th 736, 10 Cal.Rptr.2d 491. The defendant there was ordered to pay $300,000 restitution to the victim of thefts occurring in 1988, 1989, and 1990. He was also ordered to pay a $10,000 restitution fine under Government Code section 13967, subdivision (a). He challenged the order on appeal on several grounds. The appellate court found that by failing to present evidence or request a hearing the defendant waived claims that the court erred in not identifying and specifying the amount of the victim's losses. (8 Cal.App.4th at p. 742, 10 Cal.Rptr.2d 491.) Further, the failure to object in the trial court constituted a waiver of the right to contend on appeal that the victim had been reimbursed for its losses by an insurance company. (Id. at pp. 742–743, 10 Cal.Rptr.2d 491.)
The Zito court refused to find waiver, however, as to two other attacks on the restitution order. One of those attacks was that the order violated the prohibition against ex post facto legislation. The $300,000 order was based on an amendment to Government Code section 13967, subdivision (c), effective January 1, 1990, which removed the previous $10,000 limitation on such orders. Even though the appellant did not raise the issue below, he was allowed to raise it (successfully) on appeal, the appellate court likening the order to an unauthorized sentence. (8 Cal.App.4th at pp. 741–742, 10 Cal.Rptr.2d 491.) Similarly, the appellate court entertained, and upheld, a challenge to the $10,000 restitution fine because of the statutory provision that direct restitution under subdivision (c) is “in lieu of all or a portion of the restitution fine under subdivision (a).” (Id. at p. 743, 10 Cal.Rptr.2d 491, emphasis original.)
We interpret Zito as being consistent with People v. Blankenship, supra, 213 Cal.App.3d 992, 262 Cal.Rptr. 141 and People v. Neal, supra, 19 Cal.App.4th 1114, 24 Cal.Rptr.2d 129. That is, procedural challenges to restitution orders must be raised in the trial court or else they are waived on appeal. Challenges directed to the court's authority, however, may be raised for the first time on appeal.
The final case in our discussion is this court's decision in People v. McMahan (1992) 3 Cal.App.4th 740, 4 Cal.Rptr.2d 708. We there dealt with a different statute, Penal Code section 290.3, which mandated imposition of a $100 fine “unless the court determines that the defendant does not have the ability to pay the fine.” The appellant claimed the order should be vacated because the trial court failed to determine he had the ability to pay the fine before imposing it. We disagreed, first holding that the ability to pay is not a condition precedent to imposition of a fine. We went on to state that failure to object or present contrary evidence was a waiver of the right to complain on appeal. (Id. at p. 750, 4 Cal.Rptr.2d 708.)
McMahan is not dispositive here. The statute involved in that case, Penal Code section 290.3, required imposition of a modest fine, unless the court made a negative finding—that is, that the defendant did not have the ability to pay it. In effect, we held that the language of Penal Code section 290.3 placed the burden upon the defendant to show that he did not have the ability to pay the modest fine. Here, however, imposition of a fine is discretionary with the court, subject to the defendant's ability to pay. As we expressly noted in McMahan, the words “subject to” indicate a Legislative intention that the court make a determination of ability to pay prior to the order. (3 Cal.App.4th atp.749,4Cal.Rptr.2d708.) Nothing in Government Code section 13967 can be reasonably interpreted as placing any evidentiary burden upon the defendant.
With respect to the issues before us, we will draw the same distinction implicit in the holdings of People v. Blankenship, supra, 213 Cal.App.3d 992, 262 Cal.Rptr. 141; People v. Neal, supra, 19 Cal.App.4th 1114, 24 Cal.Rptr.2d 129 and People v. Zito, supra, 8 Cal.App.4th 736, 10 Cal.Rptr.2d 491. When a defendant challenges a restitution order under Government Code section 13967 on the ability-to-pay issue, procedural issues are waived if not raised in the trial court, but claims that the trial court exceeded its statutory power may be raised for the first time on appeal.
Here, appellant raises two issues. He first complains that the court did not consider and make a finding of his ability to pay. He also argues that the order is unsupported by any factual information before the sentencing court. The first issue is an attack upon the trial court's procedure. Because appellant made no objection below, he cannot now complain of the court's failure to expressly state that it considered his ability to pay and made a finding thereon.
The second issue, however, goes beyond mere procedural error. Under the statute, as we have interpreted it, a fine of $5,000 requires a finding that the defendant has the ability to pay. The court's power to impose a fine pursuant to Government Code section 13967 is thus limited by statutory language. It follows that if there is no evidence or information before the court supporting a finding of ability to pay, the court has exceeded its statutory power in imposing the fine. Thus, we hold that appellant did not waive his right to challenge the restitution order on the grounds that it is unsupported by evidence of an ability to pay.
D. Factual support
Having concluded that appellant did not waive his claim that the record does not support the implied finding of an ability to pay the $5,000 fine, we turn to the merits of that claim.
Neither party has referred us to, and we have not found, any information in the record, other than that contained in the presentence probation reports, which bears on the question of appellant's ability to pay the restitution fine. The reports contain the following limited facts: appellant claims no assets or liabilities; he has been unemployed since 1990 although he did work at one time as a gardener for $6.10 an hour, once as a food server, and once in a meat packing plant; he has an 11th grade education; he is in good health and apparently has no handicaps. Respondent argues this is sufficient support for the restitution order.
There is a paucity of case authority on what constitutes an adequate basis for finding an ability to pay under Government Code section 13967. The only case we know of on the subject is People v. Frye, supra, 21 Cal.App.4th 1483, 27 Cal.Rptr.2d 52, in which the Third Appellate District held that “the trial court is not limited to a consideration of a defendant's present financial circumstances; rather, the court may consider the future financial prospects of a defendant.” (Id. at p. 1487, 27 Cal.Rptr.2d 52.) In Frye the trial court had imposed the $200 minimum fine on the defendant who, while serving a life sentence in state prison, possessed methamphetamine in violation of Penal Code section 4573.6. The appellate court found evidentiary support for the implied finding of ability to pay based on the prospect the defendant would earn wages for performing assigned work while in prison.
“State prison inmates who perform assigned work are compensated for it. (See Pen.Code, §§ 2700, 2801, subd. (b); Cal.Code Regs., tit. 15, § 3040, subd. (a); Dept. of Corrections, Operations Manual, § 51120.1, p. 51120–2.) The trial court indicated defendant's fine could be paid out of defendant's prison wages pursuant to Penal Code section 2085.5․ When informed about this method of payment, defendant responded, ‘I understand that.’ If defendant was ineligible for prison work assignment, it was incumbent upon him to alert the court to any such disability. (See People v. Staley, supra, 10 Cal.App.4th  at p. 786 [12 Cal.Rptr.2d 816].) In the absence of objection by defendant, the trial court could presume the fine would be paid out of defendant's prison wages.” (Frye, supra, 21 Cal.App.4th at p. 1487, 27 Cal.Rptr.2d 52.)
In Frye the court was dealing with a $200 fine, and there was a reasonable basis for presuming the fine could be paid from prison wages. That presumption cannot be indulged, however, as to the $5,000 fine imposed in this case. The rates of pay for work performed by prison inmates are set in California Department of Corrections Operations Manual, section 51120.7. At present those rates range from $12 per month to $56 per month, and are subject to a statutory maximum of one-half the minimum wage. (Pen.Code, § 2811.) Penal Code section 2085.5 directs the Director of Corrections to deduct a reasonable amount, not to exceed 50 percent, from the prisoner's wages for credit against the prisoner's restitution fine. Under current regulations the amount deducted by the Director for that purpose is 20 percent. (Cal.Code Regs., tit. 15, § 3097.) Thus, even assuming appellant is placed in a prison job and earns the top rate of $56 per month for work performed in prison, the amount deducted for credit against his restitution fine will be only $11.20 per month. His prison sentence, modified in accordance with our holding in the unpublished portion of this opinion, is for a term of 10 years 8 months, less 444 days of local custody credits. The maximum time he will serve will thus be less than 116 months, and the deduction from prison wages for credit against the restitution fine will not exceed $1,299.20. Assuming appellant earns credits under Penal Code sections 2931 and 2933, the amount of fine payable from prison wages will be reduced accordingly.
Clearly, the $5,000 fine is out of appellant's reach while he is in prison. The only other possible basis for upholding the order would be some indication that he will have sources of income other than his prison wages, and/or that upon release from prison he will be gainfully employed at an income level enabling him to pay the fine. That indication is not contained in the record. What the probation report discloses about appellant's job skills, employment experience, and education simply does not support a reasonable inference that he will have a future ability to pay the $5,000 fine.
Requiring some record support for an implied finding of ability to pay a restitution fine should not impose an unreasonable burden upon sentencing courts. In many cases the probation report, or other evidence adduced at trial or in other presentencing proceedings, will provide sufficient information for the court to find an ability to pay. Factors such as the defendant's age, physical and mental condition, length of prison sentence, education, work history, family support liabilities and accumulated assets are all relevant to the defendant's ability to pay a restitution fine. Ideally, the probation report should provide a short analysis of these factors when making a recommendation to the court on the amount of restitution fine to be imposed. However, if the report does not provide the analysis or if the information is not already before the court permitting the court's own analysis, only a brief inquiry should be necessary to obtain the relevant information and to satisfy the statutory prerequisite.
We conclude that the implied finding of ability to pay is unsupported by the record. The imposition of a $5,000 restitution fine is thus not authorized by law.
We can envision cases in which it might be appropriate to remand for the trial court to determine a defendant's ability to pay and to impose a restitution fine consistent with that determination. In this case, however, the only likely source of income apparent on the record from which appellant can pay any fine will be prison wages. Under current rates and regulations, that anticipated income does not support a fine substantially greater than the statutory minimum. Remanding in a case like this could easily result in “the anomaly of restitution fines costing more money than they generate, and causing more harm than benefit to victims.” (People v. Walker (1991) 54 Cal.3d 1013, 1029, 1 Cal.Rptr.2d 902, 819 P.2d 861.) Under these circumstances, we follow the pragmatic example of our state Supreme Court and will reduce the fine to the statutory minimum. (Ibid.)
The judgment is modified as follows:
1. The enhancement pursuant to section 12022, subdivision (b) is stricken;
2. The restitution fine pursuant to Government Code section 13967, subdivision (a) is reduced to $200.
As so modified, the judgment is affirmed. The clerk of the superior court is directed to prepare an amended abstract of judgment reflecting a total prison term of 10 years 8 months and to transmit certified copies thereof to the appropriate authorities.
FOOTNOTE. See footnote *, ante.
9. A defendant could still under Penal Code section 1202.4 show compelling and extraordinary reasons to waive the fine. This language of course was not limited to economic reasons.
THAXTER, Associate Justice.
STONE (WM.A.), Acting P.J., and DIBIASO, J., concur.