State v. Ramos

“Economic damages” awarded as restitution under ORS 137.106 must be the result of reasonably foreseeable risks of harm, and victim’s attorney fees and litigation costs may constitution “economic damages” under ORS 137.106.

Defendant appealed an award of restitution to her insurer for fees the insurer, the victim, had paid to attorneys and investigators for their time spent investigating Defendant’s claim for benefits and providing grand jury and trial testimony. Defendant set fire to her restaurant and subsequently filed a claim for benefits. The insurer employed attorneys and investigators to determine its coverage obligations and the cause and origin of the fire. Defendant was convicted of second-degree arson and attempted first-degree aggravated theft, after which the State sought restitution on behalf of the insurer. On appeal to the Court of appeals, Defendant argued the fees paid to an attorney and for investigators’ time investigating and testifying were impermissible, as were amounts awarded for investigation performed after the insurer had denied Defendant’s claim. In support of her argument, Defendant argued awarding these amounts as restitution violated limitations on restitution drawn from civil law in defining “economic damages” under ORS 137.103(2) and ORS 137.106. The Court of Appeals held the restitution amounts were proper because, after the legislature amended the restitution statutes in 2005 to allow “economic damages” rather than the narrower “pecuniary damages,” restitution damages were no longer limited to only those recoverable in a civil action and a court must award all of a victim’s economic damages that “result from” a defendant’s criminal activities (damages that would not have been incurred “but for” the defendant’s criminal conduct). On appeal, Defendant reasserted that “economic damages” recoverable as restitution are limited to those damages recoverable in a civil action, which excludes some of the damages awarded as restitution in this case. The State argued that the “but-for” causation is necessary for determining restitution damages, though this would not include damages that are too remote or attenuated. The issues on this appeal include whether restitution damages are limited (1) to harms that result from reasonably foreseeable risks, and (2) because attorney fees and litigation costs are generally not recoverable unless authorized by contract or statute. The Court found that (1) the legislature’s cross-reference to “economic damages” in civil actions and the purpose for creating the restitution procedure as a substitute for a separate civil trial makes the civil law concept of reasonable foreseeability applicable to restitution damages under ORS 137.106, and (2) “economic damages” does not necessarily exclude attorney fees and litigation costs because the American Rule would not bar recovery of attorney fees and investigative costs incurred because Defendant filed a claim and as a result of the insurer victim’s involvement in a separate criminal proceeding to prosecute Defendant for a crime. The Court held that Defendant did not argue the insurer’s costs of investigating and testifying were not reasonably foreseeable; therefore, the trial court did not err in awarding restitution in this case. Decision of the Court of Appeals and judgment of the circuit court are affirmed.