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No. 105,222 IN THE COURT OF APPEALS OF THE STATE OF KANSAS STATE OF KANSAS, Appellee, v. AUSTIN J. BEHRENDT, Appellant.

SYLLABUS BY THE COURT 1. An item's fair market value is the usual standard for calculating restitution for a victim's loss of, or damage to, the item as a result of the defendant's crime.

2. The fair market value of inventory is the price that a willing seller and a willing buyer would agree upon in an arm's length transaction.

3. Although the rigidness and proof of value that lies in a civil damage suit does not apply in a criminal case, the court's determination on restitution must be based on reliable evidence which yields a defensible restitution figure.

4. A property crime victim is entitled to restitution only up to the amount of his or her actual loss.

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5. When crime victims have purchased their business inventory at wholesale prices rather than at retail market prices and when they can replace their missing or damaged inventory at similar wholesale prices, they have lost no retail sales because of the missing or damaged inventory. As a result, restitution based on retail market prices is not a defensible restitution figure.

Appeal from Reno District Court; RICHARD J. ROME, judge. Opinion filed April 27, 2012. Affirmed in part, reversed in part, vacated in part, and remanded with directions.

Charles A. O'Hara, of O'Hara & O'Hara LLC, of Wichita, for appellant.

Keith E. Schroeder, district attorney, and Derek Schmidt, attorney general, for appellee.

Before HILL, P.J., GREEN, J., and LARSON, S.J.

GREEN, J.: Austin J. Behrendt pled no contest to a felony charge of theft. The trial court imposed a guidelines sentence of 6 months in prison. The trial court further ordered that Behrendt serve a 45-day jail sanction followed by 12 months of probation. In addition, the trial court ordered restitution to the victim in the amount of $7,870.55. On appeal, Behrendt contends that the trial court erred in relying on the retail value of beer, a perishable good, instead of the wholesale value in calculating the amount of restitution. We agree. Accordingly, we reverse, vacate the amount of restitution awarded, and remand to the trial court to determine the amount of restitution owed based on the wholesale cost of the crime victim's inventory.

In addition, Behrendt asserts that the trial court erred in ordering him to serve 45 days in jail as a condition of probation. We disagree and affirm this issue. Accordingly, we affirm in part, reverse in part, vacate in part, and remand with directions.

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Behrendt was employed by City Beverage, a beer distributor located in Hutchinson, Kansas. Behrendt was charged under an amended complaint with felony theft for stealing beer from City Beverage valued between $1,000 and $25,000 in violation of K.S.A. 21-3701(a)(2). He was also charged with conspiracy to commit felony theft and with selling liquor without a license, a misdemeanor. Behrendt later pled no contest to one count of felony theft. In exchange for Behrendt's no contest plea, the State agreed to dismiss the other charges and agreed to recommend that Behrendt receive probation without jail time.

At Behrendt's plea hearing, the trial court advised Behrendt about the consequences of entering a no contest plea and told him that it was not bound to follow his plea agreement with the State. Behrendt stated that he understood the court was not bound by the agreement, and he reiterated his wish to plead no contest to the felony theft charge. At sentencing, the State complied with the plea agreement and recommended that the trial court sentence Behrendt to probation instead of jail. The State also requested that Behrendt pay City Beverage restitution in the amount of $7,870.55 as a condition of his probation.

The trial court imposed an underlying sentence of 6 months in prison and placed Behrendt on probation for 12 months. As conditions of Behrendt's probation, the trial court required him to pay $7,870.55 in restitution to City Beverage and to serve 45 days in jail. The trial court, however, allowed Behrendt the right to request a restitution hearing within 30 days to challenge its restitution calculation. Within the required 30 days, Behrendt filed a motion to determine restitution. The trial court held a hearing to determine the appropriate amount of restitution. Ann Bush, co-owner of City Beverage, testified that her company suffered a loss of $7,870.55 because of Behrendt's theft. She calculated the loss by using the retail price that City Beverage would have received from its customers for the stolen beer.

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At the conclusion of the restitution hearing, the parties argued their opposing positions on the amount of restitution Behrendt should be required to pay for his crime. The State insisted the court should order Behrendt to pay restitution totaling $7,870.55, which was the full amount requested by City Beverage. Behrendt disagreed, however, and argued that he should be required to pay only City Beverage's wholesale cost of the stolen inventory. Agreeing with the State, the trial court ordered Behrendt to pay $7,870.55 in restitution for City Beverage's retail price of the beer. The trial court explained that $7,870.55 was the appropriate amount of restitution because City Beverage was "in business and they did lose the profit and plus the . . . actual costs of the beer."

Did the Trial Court Err in Relying on the Retail Value of Beer Instead of the Wholesale Value of the Beer when Calculating Restitution?

Behrendt argues that the trial court erroneously ordered him to pay City Beverage the retail value of their beer, which resulted in a windfall to the beer distributor. Behrendt maintains that he should have to pay restitution only for City Beverage's actual cost of beer, not for the beer's retail value.

Neither party disputes that the trial court could order Behrendt to pay restitution as a condition of his probation under K.S.A. 21-4610(d)(1), which provides in pertinent part:

"(d) In addition to any other conditions of probation, . . . the court shall order the defendant to comply with each of the following conditions: (1) Make reparation or restitution to the aggrieved party for the damage or loss caused by the defendant's crime, in an amount and manner determined by the court and to the person specified by the court . . . ."

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See also State v. Phillips, 45 Kan. App. 2d 788, 794, 253 P.3d 372 (2011) (recognizing "[t]he appropriate amount of restitution is the amount required to reimburse the victim for the actual loss suffered") (citing State v. Hunziker, 274 Kan. 655, 664, 56 P.3d 202 [2002]); State v. Casto, 22 Kan. App. 2d 152, 154, 912 P.2d 772 (1996) (property crime victim entitled to restitution only up to amount of his or her actual loss).

Kansas appellate courts have held that fair market value (FMV) is the common standard for calculating restitution for a victim's loss of, or damage to, an item because of a defendant's crime. See, e.g., State v. Maloney, 36 Kan. App. 2d 711, 714-15, 143 P.3d 417, rev. denied 282 Kan. 794 (2006); State v. Baxter, 34 Kan. App. 2d 364, 365, 118 P.3d 1291 (2005); State v. Rhodes, 31 Kan. App. 2d 1040, Syl.

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