Watch the full video at https://rumble.com/v2rm3ho-restitution-order-cant-be-discharged-in-bankruptcy.html and at https://youtu.be/lzmUyhxuJMI
After Frayba Tipton and William Tipton pleaded guilty to insurance fraud, after claiming the loss of the priceless “Starry Night” by Vincent Van Gogh, they were ordered to pay restitution to the national insurance company Nationwide Insurance Company of America (Nationwide). Nationwide obtained a civil judgment and award of over $1,200,000 in civil litigation against Tipton’s only to have the judgment vacated in bankruptcy. Nationwide then petitioned the trial court to convert the criminal restitution orders into civil judgments against both defendants. The district court granted Nationwide’s motion and entered civil judgments against the defendants.
IN Nationwide Insurance Company Of America v. Frayba Tipton et all., C095606, California Court of Appeals, Third District, San Joaquin (May 26, 2023), the court agreed that the restitution order could be made enforceable as a civil judgment and not subject to discharge in bankruptcy.
BACKGROUND
After a fire destroyed the defendants’ home, they filed an insurance claim overestimating losses related to the contents of their home. (People v. Tipton, supra, 3C083065.) Nationwide alleged in court filings that among the overstated losses was the alleged loss of an original Vincent van Gogh “Starry Night” painting that is still safely in a museum. The defendants pleaded guilty to one count of aggravated insurance fraud and no contest to one count of perjury, and the trial court placed them on five years of formal probation. After advising the defendants of their right to obtain a judicial order as to the amount of restitution owed to Nationwide and holding an evidentiary hearing to determine the amount, the trial court ordered the defendants to pay $792,597.22 in victim restitution to Nationwide in 2016 .
Although the defendants were later able to have the award against them discharged in federal bankruptcy proceedings, the discharge order stated that “debts for most fines, penalties, . . . or criminal restitution obligations” were not discharged.
In 2020, the Department of Corrections informed the parties that they would cease their efforts to collect restitution because probation had expired even though they should have been moved to prison by the Tiptons for failure to pay restitution.
The trial court agreed with Nationwide after the hearing and entered civil judgments against each defendant in favor of Nationwide in excess of $1,000,000 (equal to the outstanding unpaid refund plus 10 percent annual interest).
DISCUSSION
California law provides: “In any case where a victim has suffered financial loss as a result of the defendant’s conduct, the court shall require the defendant to make restitution to the victim.” (§ 1202.4, subd. (f).) A district court must order full refund. A restitution order entered under section 1202.4, subdivision (f) is enforceable “as if” it were a civil judgment and is enforceable in the same manner as provided for the enforcement of other money judgments.
As seen in the criminal restitution order used in criminal cases, Penal Code section 1214 provides that once a dollar amount has been ordered, the order is enforceable as if it were, and in the same manner as, a civil judgment.
The Victims’ Bill of Rights Act of 2008, known as “Marsy’s Law,” amended Article I, Section 28 of the California Constitution by expanding and constitutionalizing the protection of victims’ rights, including the right to restitution. (Looks People v. Gross (2015) 238 Cal.App.4th 1313, 1317.)
A victim’s constitutional right to restitution cannot be waived or limited, nor can the prosecution waive it. Victims are first in line to receive money collected from defendants ordered to pay restitution. Because the California Constitution guarantees victims of crime the right to restitution and that right is given a broad and liberal construction, statutes on the right should be interpreted in the context of the relevant statutory scheme.
ANALYSIS
The Court of Appeals concluded that the trial court did not err in converting the restitution orders because it clearly had authority to treat them as money judgments under section 1214, subdivision (b) and properly did so.
Although enforceable as if it were a civil judgment, an order for restitution is not a civil judgment” and the victim restitution statutes demonstrate legislative recognition of the victim’s distinct and separate right to civil action independent of the restitution order
The plain language of section 1214 equates an order of restitution with a civil judgment and articulates how such orders may be enforced in the criminal courts, but if a civil court is asked to convert such an order of restitution into a civil judgment, as in the case here, it is not wrong that it does.
The judgments are upheld.
Claiming that they lost the original Vincent van Gogh painting “Starry Night” was stupid enough because it is in the Museum of Modern Art in New York and has been there for many years, should have made the fraud claim easy for Nationwide to prove and it does the civil judgment and the decision on restitution comprehensible. Even if they enforced the civil judgment in bankruptcy, they could not enforce the repayment order. Nationwide is now able to raise over $1 million from all the assets held by the Tiptons. They violated the terms of their probation by not paying restitution and should have been jailed. The Tiptons should consider their freedom from prison a lucky prize.
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