Metropolitan News-Enterprise


Wednesday, June 22, 2011


Page 1


Court of Appeal Declares:

Restitution Order Not Offset by Security Fund Payment




A former attorney convicted of embezzling more than $1 million from clients may not offset the payments received by the victims from the Client Security Fund of the State Bar against court-ordered restitution, the First District Court of Appeal ruled yesterday.

Div. Four affirmed the conviction of Edward Duff Hume, who resigned from the State Bar with charges pending in 2008. He had previously been disciplined twice for ethics violations and suspended for failure to pay dues.

Hume was charged by San Mateo County prosecutors with embezzlement, grand theft, burglary, and forgery in 2009. He entered a plea agreement whereby he pled no contest to embezzlement with an enhancement for taking more than $200,000, and all other counts were dismissed subject to a Harvey waiver, meaning he could be ordered to pay restitution as to the dismissed counts.

Embezzlement Victim

San Mateo Superior Court Judge Judge Stephen M. Hall ordered Hume to pay restitution of $1.26 million to a living trust, which was the victim on the embezzlement count, and nearly $100,000 to two other trusts that were victims on the dismissed counts.

The Client Security Fund reimbursed the victims a portion of what was taken from the latter trusts.

Hall rejected Hume’s request that those amounts be deducted from what he owed. The judge reasoned that CSF payments are not equivalent to payment by a defendant’s own insurance company to a victim, which would be credited against restitution under People v. Bernal (2002) 101 Cal.App.4th 155.

Justice Timothy Reardon agreed with the trial judge, saying it was “obvious...that appellant fails the Bernal test” because his relationship to the State Bar and the CSF was not that of an insured to an insurer.

“He has no status with the CSF or State Bar as an insured or member of a class of insureds, and, patently, payments by the State Bar to the victims were not payments directly from appellant within the meaning of [Penal Code] section 1202.4, subdivision (a)(1),” the justice wrote. “These payments were, moreover, fortuitous because the decision to reimburse was solely within the State Bar’s discretion. Further, appellant had no contractual right to compel reimbursement from the fund. And finally, the State Bar has statutory subrogation rights against appellant.”

No Double Payment

Reardon rejected the argument that denying the offset could result in Hume being forced to pay twice, since the State Bar is likely to obtain a judgment against him for the amounts paid by the CSF.

Since restitution awards are enforceable in the same manner as civil judgments, and the victims have assigned their rights against Hume to the State Bar—to the extent of the amounts received from the CSF—as a condition of being reimbursed, the amount that can ultimately be collected from Hume will not exceed the amount taken, the justice explained.

The case is People v. Hume, A128757.


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