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State v. Rosenbaum

Supreme Court of Rhode Island

April 17, 2015

Judith Rosenbaum

Newport County Superior Court. (N2/09-161A). Associate Justice Judith C. Savage, General Magistrate Patricia L. Harwood .

For State: Jane M. McSoley, Department of Attorney General.

For Defendant: Joseph F. Hook, Esq.

Present: Suttell, C.J., Goldberg, Flaherty, Robinson, and Indeglia, JJ.


Paul A. Suttell, Chief Justice.

" And my more-having would be as a sauce
To make me hunger more; that I should forge
Quarrels unjust against the good and loyal,
Destroying them for wealth." [1]

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The defendant, Judith Rosenbaum, appeals from a judgment of the Superior Court denying her request to reduce the amount of her monthly restitution obligation. The defendant was ordered to pay $95,000 in restitution to the victim of a crime, in monthly installments of $500; she now claims that she is able to pay only $237[2] per month and that, therefore, her payments should be reduced by $263.

This case came before the Supreme Court pursuant to an order directing the parties to appear and show cause why the issues raised in this appeal should not be summarily decided. After considering the parties' written and oral submissions and reviewing the record, we conclude that cause has not been shown and that this case may be decided without further briefing or argument. For the reasons set forth in this opinion, we affirm the judgment of the Superior Court.


Facts and Procedural History

On June 23, 2009, defendant was charged by criminal information with four counts of uttering or delivering checks in an amount exceeding $1,500 with intent to defraud, in violation of G.L. 1956 § 19-9-25 (counts 1-4); one count of misappropriating property, in violation of G.L. 1956 § 11-41-11.1 (count 5); and one count of obtaining goods valued at more than $500 by false pretenses with intent to cheat or defraud, in violation of § 11-41-4 and § 11-41-5 (count 6). The charges stemmed from defendant having issued and then stopped payment on several checks paid to James Sangiovanni, d/b/a Design House Bath and Kitchen Studio, in connection with a $129,592 home renovation that Sangiovanni performed for defendant and her husband, on property that the couple owned in Portsmouth, Rhode Island.[3]

The defendant pled nolo contendere before a Superior Court justice to counts 1, 5, and 6; the remaining counts were dismissed by the state. On August 10, 2010, defendant was sentenced to two years suspended with two years of probation on count 1, and seven years suspended with seven years of probation on counts 5 and 6, and she was ordered to pay $95,000 in restitution relating to count 5 (misappropriation of property, to wit, custom kitchen cabinets). The issue of payment of restitution was referred to a Superior Court magistrate. In January 2011, the magistrate set defendant's monthly restitution payments at $500. The defendant submitted $500 payments in February, March, April, June, August, September, October, and December 2011, as well as an additional $1,000 payment in October 2011.[4] In 2012, defendant made $1,000 payments in January, May, and August, as well as a $500 payment in September and a $2,000 payment in December.

On January 17, 2013, defendant appeared before the magistrate on a motion to reduce her monthly payments.[5] The defendant argued that her payments should be reduced to $237, which was the amount that she received monthly from a

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pension benefit. She asserted that the remainder of her income consisted of $907 per month in social security benefits, and that it would be a violation of federal social security law to require her to allot any portion of this money to her restitution obligation.

During the hearing on January 17, 2013, defendant testified that her husband had lost his job as a physician in June 2012 and that, therefore, her financial circumstances had changed since she was originally ordered to pay $500 per month in restitution. The majority of this hearing consisted of defendant's testimony relating to a financial statement that was introduced into evidence. This testimony revealed that she and her husband were apparently attempting to maintain their erstwhile lifestyle, one which their income no longer supported.

The defendant disclosed at the hearing that she and her husband resided in a waterfront house located in Portsmouth, Rhode Island, valued at $950,000.[6] Although they had purchased this house in the early 1990s for approximately $600,000, the mortgage balance as of January 2013 was $1,300,000; thus, after owning the property for roughly twenty years, they had accrued negative equity in the amount of $350,000.[7] The financial statement revealed that the monthly mortgage payment for this property was $8,850, with a monthly property tax obligation of $1,542. She and her husband, however, were more than one year in arrears on their payments and were currently in the midst of foreclosure proceedings.[8] She testified that they were not currently making their monthly mortgage payments and that the bank was paying their property taxes.

The defendant's financial statement also revealed that she and her husband owned two cars, a 2007 Toyota Highlander and a 2008 Toyota Prius, and were making monthly payments of $865 and $680, respectively. The loans on these vehicles showed balances of $32,000 and $21,000, with no equity in either car. The defendant testified that her husband drove the Prius and that she had previously been using the Highlander but now had an " incredible difficulty driving" because of a back injury.[9] In addition to the vehicle loan payments, defendant and her husband spent $174 per month on car insurance and $256 per month on gas.

The defendant's additional monthly expenditures included $804 on homeowner's insurance; $745 on life insurance; $200 on clothing and shoes; $150 on cable television/internet; and $100 on charitable donations. Additionally, she and her husband owed $11,000 on a line of credit with Harris Furs and had been making $600 monthly payments on this account until her husband became unemployed. When asked at the hearing whether defendant had considered selling some of the furs so that she could pay restitution, she admitted that

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this " was a possibility." The defendant did not indicate that she had seriously considered selling the Highlander, canceling her cable subscription, or reducing her monthly expenditures on charity, clothing, or shoes[10] in order to pay her restitution obligation. She also testified that she owned jewelry but had not thought about selling any of it.[11]

At the conclusion of defendant's testimony, the magistrate issued a bench decision denying defendant's motion to reduce her monthly restitution payments and ordering her to continue making monthly payments of $500.[12] The magistrate found that defendant had failed to " present[] any indication to the court that [she was] financially unable to make [the restitution] payments" without dipping into her social security funds. The magistrate noted that defendant was paying nearly $900 per month on a vehicle that she barely used, and that her expenditures on cable television, charity, clothing, and shoes were resources that could be allocated toward her restitution obligation. Additionally, the magistrate noted that defendant had not presented evidence regarding the value of her assets in personal property, such as her jewelry or the furnishings in her " million dollar home." An order reflecting the magistrate's decision was entered on February 1, 2013, and defendant appealed the matter to the Superior Court.

The defendant made two payments of $500 in March and May of 2013 and then moved on May 21, 2013 to stay the restitution order pending appeal. The magistrate denied this motion and ordered defendant to pay $2,000 by May 28, 2013, and to continue to pay $500 per month thereafter. On May 30, 2013, a justice of the Superior Court entered an order that stayed the previous order pending a hearing on June 6, 2013, on the condition that defendant pay $1,000 by 9:30 a.m. on May 30, 2013. The defendant complied with this order.

A hearing was held in Superior Court on June 6, 2013, on the appeal of the magistrate's decision denying defendant's motion to reduce her restitution payments. The hearing justice noted that she had reviewed the transcript of the previous hearing before the magistrate, as well as the filings of defendant and the state. She then explained that the standard of review for this matter was set forth in G.L. 1956 § 42-35-15, which was a " very deferential standard[] to the decision of * * * the magistrate as to questions of fact." The hearing justice further explained that, under this limited standard of review, factual findings would be overturned if clearly erroneous, and issues of law would be reviewed de novo.

The defendant argued that the magistrate had erroneously concluded that she had sufficient assets, aside from her social security benefit, to pay $500 per month. The defendant also reminded the court that her husband was not obligated to pay restitution and, therefore, that his assets could not be counted toward defendant's ability to make the required payments. The state, for its part, argued that defendant had access to numerous assets that could be liquidated, and that she could easily reallocate some of the funds she was spending on unnecessary expenses in order to satisfy her restitution obligation.

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The hearing justice began her bench decision by noting that defendant had borne the burden of proof in seeking to show that she was unable to make the $500 monthly payments, and that she had " willfully failed to meet" this burden. Next, the hearing justice briefly summarized the potential areas that could yield additional funds for the payment of restitution, including the furs, the Highlander, insurance on the Highlander, cable television, life insurance, clothing, shoes, and charitable donations. The hearing justice also noted that defendant had " acknowledged being in possession of numerous items of jewelry," and that " it was her burden to establish that that jewelry could not be sold and to establish the value and what amount of money could be yielded from that." Similarly, defendant had failed to account for the furnishings inside her home. The hearing justice also noted that defendant had failed to provide any tax returns relating to years after 2007, which " further mudd[ied] the record" as to her potential assets. Accordingly, the hearing justice denied defendant's appeal. She also vacated the previously imposed stay and ordered defendant to pay the additional $1,000 pursuant to the magistrate's order.[13] Judgment reflecting the hearing justice's decision was entered on October 1, 2013, and defendant filed a timely appeal.[14]


Standard of Review

General Laws 1956 § § 8-2-11.1(e) and 8-2-39(f) provide that final orders of the Superior Court entered in a proceeding to review an order of a magistrate may be appealed to the Supreme Court. On appeal, this Court will not disturb the factual determinations of the Superior Court justice unless he or she made clearly erroneous findings or misconceived or overlooked material evidence. See Wilby v. Savoie,86 A.3d 362, 372 (R.I. 2014). The hearing justice may " draw inferences from the testimony of witnesses, and such inferences, if reasonable, are entitled on review to the same weight as other factual determinations." Rhode Island Mobile Sportfishermen, Inc. v. Nope's Island Conservation Association, Inc., 59 A.3d 112, 118 (R.I. 2013) (quoting Cahill v. Morrow, 11 A.3d 82, 86 (R.I. 2011)). Furthermore, we shall " accord great weight to a [hearing] justice's determinations of credibility, which, inherently, are the functions of the trial court and not the functions of the appellate court." Wilby, 86 A.3d at 372 (quoting Cullen v. Tarini, 15 A.3d 968, 976 (R.I. 2011)). " We will, however, review questions of law de novo." Id.



On appeal, defendant argues that the findings of the magistrate and the hearing justice " were clearly erroneous in view of the reliable, probative, and substantial evidence on the whole record * * * ." According to defendant, the financial statement introduced into evidence

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at the hearing showed that defendant's only source of income was from her social security and pension benefits, and she contends that this proved her inability to pay more than the amount of the pension benefit. The defendant avers that " there was no evidence in the record that ...

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