USA v. Nicholas Espinoza

Filing

PUBLISHED OPINION FILED. [11-50369 Vacated and Remanded] Judge: EHJ , Judge: PRO , Judge: SAH. Mandate pull date is 05/08/2012 for Appellant Nicholas Espinoza [11-50369]

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IN THE UNITED STATES COURT OF APPEALS
United States Court of Appeals
FOR THE FIFTH CIRCUIT
Fifth Circuit

FILED
April 17, 2012

No. 11-50369

Lyle W. Cayce
Clerk

UNITED STATES OF AMERICA,
Plaintiff–Appellee,
v.
NICHOLAS ESPINOZA, also known as Nick Espinoza,
Defendant–Appellant.

Appeal from the United States District Court
for the Western District of Texas

Before JONES, Chief Judge, and OWEN and HIGGINSON, Circuit Judges.
PRISCILLA R. OWEN, Circuit Judge.
Defendant Nicholas Espinoza appeals from his sentence after pleading
guilty to being a felon in possession of a firearm in violation of 18 U.S.C.
§ 922(g). Because restitution to a pawn shop to which Espinoza sold stolen
firearms that he unlawfully possessed was not authorized by 18 U.S.C. § 3663
under the facts of this case, we vacate and remand for resentencing. We
additionally conclude that the district court plainly erred in calculating
Espinoza’s criminal history but do not reach the question of whether that error
affected Espinoza’s substantial rights since resentencing will occur.

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I
In late January 2010, the Fredericksburg, Texas Police Department
received a report that four firearms had been stolen from a home. In early
February, a detective received a phone call from a confidential informant who
reported that Espinoza and his wife, Pamla Meier, had been pawning stolen
property in San Antonio and Austin. Investigators subsequently learned that
three of the four stolen firearms had been pawned at Cash America Pawn in
Austin (Cash America) by Espinoza for a total of $525. A criminal record check
revealed that Espinoza had been convicted of two prior felonies in Texas.
Espinoza was subsequently indicted on one count of being a felon in possession
of a firearm in violation of 18 U.S.C. § 922(g).
Espinoza pleaded guilty. Espinoza’s counsel made clear that Espinoza was
admitting to possessing and pawning the firearms but not stealing them. The
court accepted Espinoza’s plea, and a Presentence Investigation Report (PSR)
was prepared. The total offense level was calculated to be fifteen. In addition,
the PSR attributed five criminal history points to Espinoza for three countable
offenses and added two more because the instant offense was committed while
on probation. Consequently, the PSR calculated Espinoza’s Guidelines range
of imprisonment to be thirty to thirty-seven months. It also recommended that
Espinoza be ordered to pay $525 in restitution to Cash America, as the stolen
firearms were seized and returned to their owner.
Espinoza only objected to the recommendation that he be required to pay
restitution. The district court overruled that objection and adopted the findings
and recommendations of the PSR. The district court subsequently sentenced
Espinoza to thirty months of imprisonment and three years of supervised
release. The district court also ordered that Espinoza pay restitution in the
amount of $525 to Cash America.

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II
Espinoza objected to the award of restitution at his sentencing, and the
issue is therefore preserved. Whether the law permits restitution to be imposed
as part of a sentence in a particular case is reviewed de novo.1
“A federal court cannot order restitution ‘except when authorized by
statute.’”2 Under the Victim and Witness Protection Act (VWPA), a district court
may order a defendant to pay restitution to any victim of an offense under Title
18 of the United States Code as well as victims of a number of other enumerated
offenses.3 Under the Mandatory Victims Restitution Act (MVRA), a district
court is required to order a defendant to pay restitution to a victim under certain
circumstances, which include those in which the victim suffered a pecuniary loss
as a result of a crime of violence or an offense against property under Title 18,
including any such offense committed by fraud or deceit.4 Under both statutes,
restitution can be awarded to a “victim,” defined as “a person directly and
proximately harmed as a result of an offense for which restitution may be
ordered including, in the case of an offense that involves as an element a scheme,
conspiracy, or pattern of criminal activity, any person directly harmed by the
defendant’s criminal conduct in the course of the scheme, conspiracy, or
pattern.”5 Relying on the Supreme Court’s decision in Hughey v. United States,6
we have held that “a district court can award restitution to victims of the offense,
1

United States v. Arledge, 553 F.3d 881, 897 (5th Cir. 2008) (citing United States v.
Adams, 363 F.3d 363, 365 (5th Cir. 2004)).
2

United States v. Love, 431 F.3d 477, 479 (5th Cir. 2005) (quoting United States v. Bok,
156 F.3d 157, 166 (2d Cir. 1998)).
3

18 U.S.C. § 3663(a)(1)(A).

4

Id. § 3663A(a)(1), (c)(1).

5

Id. §§ 3663(a)(2), 3663A(a)(2).

6

495 U.S. 411 (1990).

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but the restitution award can encompass only those losses that resulted directly
from the offense for which the defendant was convicted.”7
The record reflects that restitution was imposed pursuant to § 3663. We
first note that the probation officer appears to have recommended, and the
district court appears to have imposed, restitution partially because Espinoza’s
possession of the firearms was part of a scheme in which he would steal and then
sell property, including firearms. However, acts in furtherance of a conspiracy,
scheme, or pattern of criminal activity can only support restitution if the scheme,
conspiracy, or pattern is an element of the offense.8 Espinoza was charged and
pleaded guilty to being a felon in possession of a firearm pursuant to 18 U.S.C.
§ 922(g). This offense does not “involve[] as an element a scheme, conspiracy, or
pattern of criminal activity.”9 Therefore, the only ground for a restitution award
pursuant to § 3663 is if Cash America was directly and proximately harmed as
a result of Espinoza’s possession of the firearms.
Espinoza was convicted only of possessing firearms, not stealing or
illegally transferring firearms. In United States v. Mancillas, the defendant
pleaded guilty to “knowingly possessing counterfeited securities” and “knowingly
possessing implements designed to make counterfeited securities with the intent

7

United States v. Maturin, 488 F.3d 657, 660-61 (5th Cir. 2007) (citing Hughey, 495
U.S. at 413); see also United States v. Mancillas, 172 F.3d 341, 343 (5th Cir. 1999) (per curiam)
(“We therefore hold that a defendant sentenced under the provisions of the MVRA is only
responsible for restitution for the conduct underlying the offense for which he has been
convicted.”).
8

18 U.S.C. § 3663(a)(2).

9

See id.; United States v. Ybarra, 70 F.3d 362, 365 (5th Cir. 1995) (“In order to convict
one for felon in possession of a firearm, the government must prove that the defendant (1) has
been convicted of a felony; (2) possessed a firearm in or affecting interstate commerce; and (3)
knew that he was in possession of the firearm.” (citing United States v. Dancy, 861 F.2d 77,
81 (5th Cir. 1988)).

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that they be so used.”10 The district court ordered that the defendant pay
restitution to five check-cashing entities.11 We reversed the restitution order,
holding that “[the defendant’s] possession of the implements with the intent to
use them in the future can in no way be said to directly and proximately have
caused a previous harm, specifically, the harm to the check-cashing
companies.”12 Because the restitution order was not for conduct underlying the
offense for which the defendant had been convicted, we held that restitution was
not proper.13 Similarly, in United States v. Hayes, the defendant pleaded guilty
to possession of stolen mail “on or about” March 31, 1989.14 The stolen mail was
three credit cards.15

The district court ordered that the defendant pay

restitution to the credit card companies for charges he had made in the months
prior to March 31.16 We vacated the restitution order, observing that “Hayes
pleaded guilty to an indictment charging him with mere possession on one day,
not with conduct or a scheme that resulted in losses to any victims.”17 We noted
that the loss was not from Hayes’s possession of the cards but from Hayes’s
unauthorized use of the cards.18

10

Mancillas, 172 F.3d at 341.

11

Id. at 341-42.

12

Id. at 343.

13

Id.

14

32 F.3d 171, 172 (5th Cir. 1994).

15

Id.

16

Id.

17

Id.

18

Id. at 173.

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The harm to the pawn shop in this case is not based on the conduct
underlying Espinoza’s offense—possession of a firearm—but rather the theft and
subsequent sale of stolen firearms. Espinoza was not charged with or convicted
of possession and transfer of stolen firearms. Mere possession of a firearm is not
the equivalent of transferring stolen firearms.
The Government argues that the harm to Cash America would not have
occurred “but for” Espinoza’s possession of the firearms. Assuming, without
deciding, that a relevant inquiry is whether the harm was a reasonably
foreseeable result of the offense, the fact remains that Espinoza was not charged
either with stealing firearms19 or illegally transferring firearms.20 It may be that
the harm here would be a foreseeable result of stealing firearms, and it is even
more likely that it would be a foreseeable result of illegally transferring
firearms. However, there is nothing inherent in the possession of firearms by
a felon that would make one foresee that those firearms were stolen and would
later be transferred, causing financial harm to the transferee. Accordingly, Cash
America was not a “victim” within the meaning of the VWPA.
The district court erred in ordering restitution, and the portion of the
sentence imposing restitution must be vacated. It is unclear whether the
remainder of the sentence should be vacated. Our court has in some cases

19

See 18 U.S.C. § 922(u) (“It shall be unlawful for a person to steal or unlawfully take
or carry away from the person or the premises of a person who is licensed to engage in the
business of importing, manufacturing, or dealing in firearms, any firearm in the licensee's
business inventory that has been shipped or transported in interstate or foreign commerce.”).
20

See 18 U.S.C. § 922(j) (“It shall be unlawful for any person to receive, possess,
conceal, store, barter, sell, or dispose of any stolen firearm or stolen ammunition, or pledge or
accept as security for a loan any stolen firearm or stolen ammunition, which is moving as,
which is a part of, which constitutes, or which has been shipped or transported in, interstate
or foreign commerce, either before or after it was stolen, knowing or having reasonable cause
to believe that the firearm or ammunition was stolen.”)

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vacated the entire sentence when an order of restitution was vacated,21 but in
other cases, our court has vacated only the restitution order and left in place a
term of imprisonment that was also included in the sentence.22 We conclude that
21

See, e.g., United States v. Hickman, 331 F.3d 439, 448 (5th Cir. 2003) (“Because the
district court imposed the same amount of restitution . . . to run concurrently in both cases and
because the order for restitution is part and parcel of each overall sentence, both sentences are
VACATED and the case is REMANDED for resentencing not inconsistent with this opinion.”
(citing Hayes, 32 F.3d at 173)); United States v. Jimenez, 77 F.3d 95, 100 (5th Cir. 1996) (“We
therefore vacate the sentence and remand for resentencing keeping in mind that the district
court imposed no fine in light of the restitution order.” (citing Hayes, 32 F.3d at 173; United
States v. Aguirre, 926 F.2d 409 (5th Cir. 1991))); Hayes, 32 F.3d at 173 (“Since the order for
restitution represents only one component of the sentencing court’s balance of sanctions, the
entire sentence is VACATED and the case is REMANDED for resentencing.”); Aguirre, 926
F.2d at 410 (recognizing that some cases merely vacate the order of restitution, but deciding
to vacate the entire sentence in light of the fact that the district court did not fine the
defendant because of the restitution order, recognizing that “[t]o vacate the restitution order
and allow the remainder of the sentence to stand might undermine the deterrent and punitive
effect that the original, albeit illegal, sentence was intended to achieve”); see also United States
v. Chaney, 964 F.2d 437, 451 (5th Cir. 1992) (“Restitution under the VWPA is a criminal
penalty and a component of the defendant’s sentence.”).
22

See, e.g., United States v. Arledge, 553 F.3d 881, 898-99, 901 (5th Cir. 2008) (vacating
a restitution order under the MVRA for recalculation of the actual loss but affirming the
district court’s use of the 2006 Sentencing Guidelines and the term of imprisonment imposed
under those Guidelines); United States v. Maturin, 488 F.3d 657, 663-64 (5th Cir. 2007)
(vacating only the restitution order and remanding after holding that the district court plainly
erred in ordering restitution for losses caused by conduct other than that for which the
defendant was convicted); United States v. Austin, 479 F.3d 363, 373 (5th Cir. 2007) (vacating
the restitution order and remanding for resentencing but affirming the term of imprisonment);
United States v. Beydoun, 469 F.3d 102, 107-09 (5th Cir. 2006) (affirming the defendant’s
sentence of imprisonment because there was sufficient evidence to support the enhancement,
but vacating the restitution order under the MVRA and remanding for determination of the
actual loss); United States v. Adams, 363 F.3d 363, 368 (5th Cir. 2004) (vacating only the
restitution order and remanding for recalculation); United States v. Norris, 217 F.3d 262, 275
(5th Cir. 2000) (vacating only the restitution order and affirming the sentence in all other
respects without remand); United States v. Campbell, 106 F.3d 64, 70 (5th Cir. 1997)
(affirming the sentence of imprisonment, but reversing and vacating the court’s restitution
order without remand); United States v. Upton, 91 F.3d 677, 689 (5th Cir. 1996) (vacating two
defendants’ restitution orders and remanding for recalculation, but affirming the sentences
in all other respects); United States v. Stout, 32 F.3d 901, 904-05 (5th Cir. 1994) (finding an
erroneous upward departure to be harmless, vacating only the restitution award, and
remanding for resentencing); United States v. Holley, 23 F.3d 902, 915 (5th Cir. 1994)
(vacating the restitution order and remanding); United States v. Reese, 998 F.2d 1275, 1286
(5th Cir. 1993) (vacating the portion of the district court’s judgment as to the amount of
restitution and remanding); United States v. Cockerham, 919 F.2d 286, 287 (5th Cir. 1990)

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the entire sentence should be vacated in the present case because restitution is
“only one component of the sentencing court’s balance of sanctions,”23 and as we
discuss below, there was other error in the sentencing process. Under these
circumstances, we choose to follow the line of our decisions that vacates the
entire sentence when restitution was erroneously imposed.
III
Espinoza additionally argues that the district court erred in calculating his
criminal history. Because this issue is likely to recur following remand, we
consider it. Espinoza admits that he did not object when the district court
counted two of his prior convictions and sentences as separate sentences, and
therefore we review his challenge to the district court’s application of
§ 4A1.2(a)(2) for plain error.24 When reviewing for plain error, we determine
whether the error is “clear or obvious, rather than subject to reasonable dispute,”
and if the error “affected the appellant’s substantial rights.”25 Even if the
appellant can meet this standard, we will only reverse if the error “seriously
affect[s] the fairness, integrity or public reputation of judicial proceedings.”26
Espinoza argues that the district court plainly erred in assessing separate
criminal history points for his two Texas convictions in 2006. He argues that the
Sentencing Guidelines require those convictions to be treated as a single
conviction, lowering his criminal history score and resulting in a Guidelines

(vacating restitution order, but affirming other aspects of the sentence).
23

See Hayes, 32 F.3d at 173.

24

United States v. John, 597 F.3d 263, 282 (5th Cir. 2010).

25

Puckett v. United States, 556 U.S. 129, 135 (2009) (citing United States v. Olano, 507
U.S. 725, 734 (1993)).
26

Olano, 507 U.S. at 732 (quoting United States v. Young, 470 U.S. 1, 15 (1985))
(internal quotation marks omitted).

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range of twenty-four to thirty months of imprisonment instead of thirty to thirtyseven months as calculated by the district court.
The Sentencing Guidelines in effect when Espinoza was sentenced state:
If the defendant has multiple prior sentences, determine whether
those sentences are counted separately or as a single sentence.
Prior sentences always are counted separately if the sentences were
imposed for offenses that were separated by an intervening arrest
(i.e., the defendant is arrested for the first offense prior to
committing the second offense). If there is no intervening arrest,
prior sentences are counted separately unless (A) the sentences
resulted from offenses contained in the same charging instrument;
or (B) the sentences were imposed on the same day.27
The PSR indicates, and neither party disputes, that Espinoza was sentenced for
both of his 2006 Texas convictions on the same day. Thus, the Guidelines,
quoted above, state that if there was no intervening arrest between the first and
second offenses, the sentences are not to be treated separately.
The PSR indicates that Espinoza committed burglary on November 29,
2005. On February 3, 2006, police found Espinoza in possession of cocaine, a
state offense, and immediately arrested him. He was released on bond and was
subsequently arrested on August 23, 2006, for his prior burglary. He was
sentenced in state court for both offenses on November 9, 2006.
Although we understand why a court might conclude that the intent of the
Guidelines is to count sentences for demonstrably different offenses separately,
the literal language of § 4A1.2(a)(2) does not permit that result in the present
case. The Guidelines unambiguously direct that “[i]f there is no intervening
arrest, prior sentences are counted separately unless . . . the sentences were
imposed on the same day.”28 Under the Guidelines, offenses are separated by
an intervening arrest when “the defendant is arrested for the first offense prior
27

U.S. SENTENCING GUIDELINES MANUAL § 4A1.2(a)(2) (2010).

28

Id.

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to committing the second offense.”29 Espinoza was not arrested for the first
offense until six months after committing the second offense. Accordingly, there
was no intervening arrest between the first and second offenses. The district
court should not have treated the offenses separately. Because the error is clear
from the language of the Guidelines,30 the district court plainly erred in treating
Espinoza’s two 2006 convictions separately.
The Government argues that the February 2006 arrest was an intervening
arrest because it occurred after Espinoza had committed the burglary offense in
November 2005. According to the Government, “It doesn’t matter whether the
arrest comes after the commission of the second crime or the first crime.” This
argument contravenes the plain language of the Guidelines. The Eighth Circuit
was faced with a similar argument under the predecessor to the current
Guidelines and rejected it.31 The defendant in that case was arrested in July
2002 by state police for a drug offense.32 Federal authorities later arrested the
defendant in October 2002 for offenses occurring in late 2001 and early 2002.33
Just as in this case, the Government argued that the two convictions were
separated by an intervening arrest because the defendant was arrested at
different times.34 The Eighth Circuit held that “[t]he government’s argument
overlooks the fact that the relevant ‘intervening arrest’ inquiry looks at whether

29

Id.

30

See United States v. Blocker, 612 F.3d 413, 416 (5th Cir. 2010), cert. denied, 131 S.
Ct. 623 (2010) (“As our conclusion is reached by a straightforward application of the
guidelines, the error was also plain.”).
31

United States v. Williams, 533 F.3d 673, 676-77 (8th Cir. 2008).

32

Id. at 675.

33

Id.

34

Id. at 676.

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the defendant committed the second offense before he was arrested for the
first.”35
The Government also argues that “the purpose of the guideline is to count
convictions for related crimes committed during one criminal episode together
and to count those separated by time that are not part of a single criminal
episode separately.” Prior to 2007, the Sentencing Guidelines required that
prior sentences in unrelated cases were to be counted separately, while prior
sentences in related cases were to be treated as one sentence.36 The comments
instructed that sentences were not considered related if they were separated by
an intervening arrest.37

They were considered related, however, if the

corresponding offenses “(A) occurred on the same occasion, (B) were part of a
single common scheme or plan, or (C) were consolidated for trial or sentencing.”38
The current Guidelines were amended in an effort to resolve perceived
confusion.39

The comments to § 4A1.2 note that counting multiple prior

sentences as a single sentence may underrepresent a defendant’s criminal
history and therefore warrant an upward departure from the Guidelines.40 We
therefore conclude that the Government’s arguments regarding the intent of this
section of the Guidelines find no support in the section’s provisions.

35

Id.

36

U.S. SENTENCING GUIDELINES MANUAL § 4A1.2(a)(2) (2006).

37

Id. § 4A1.2 cmt. n.3.

38

Id.

39

See United States v. Marler, 527 F.3d 874, 877 n.1 (9th Cir. 2008) (“The Sentencing
Commission explained that § 4A1.2 needed to be amended because the ‘related cases’ rule was
too complex and had led to confusion and a ‘significant amount of litigation.’” (citation
omitted)).
40

U.S. SENTENCING GUIDELINES MANUAL § 4A1.2 cmt. n.3 (2010).

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Espinoza contends that the district court’s error in calculating the
Guidelines advisory sentencing range as thirty to thirty-seven months instead
of twenty-four to thirty months resulted in substantial harm because it is
reasonably probable that had the correct sentencing range been utilized the
district court would have sentenced him to less than the thirty months of
imprisonment that was imposed. Because we are vacating the entire sentence
for the reasons discussed above, we do not consider whether the error in
calculating Espinoza’s criminal history affected his substantial rights.
*

*

*

For the foregoing reasons, the judgment of the district court is VACATED,
and the case is REMANDED for resentencing.

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