Decision stands not to collect accounting fees from Demers

State's high court decides not to hear appeal for restitution for volunteers' time in folk-festival theft case

Posted: Sunday, July 07, 2002

A Juneau man convicted of stealing about $13,000 from the Alaska Folk Festival won't have to reimburse the nonprofit group for time volunteers spent documenting his crime.

The Alaska Supreme Court recently decided not to hear the case of Jim Demers, who was convicted of felony theft and falsifying business records. As a result, the former folk festival treasurer will not be required to pay $5,000 to cover some 200 hours of work volunteers put into reviewing the organization's books after the theft was discovered.

Three of the five Supreme Court justices voted to hear the appeal by state prosecutors, who wanted to overturn a lower appeal court's decision against forcing Demers to reimburse the festival for the volunteer work. Two justices supported hearing the case, arguing it could hurt other legal efforts to force criminals to reimburse their victims.

"It can be expected that many other citizens and organizations will be affected by this ruling," wrote Justice Walter Carpeneti in a dissenting opinion opposing the June 13 Supreme Court order not to take up the case.

Demers was accused in 1999 of embezzling the money while acting as treasurer of the group that puts on the annual, week-long, free music event at Centennial Hall. Prosecutors said $13,000 was taken during more than 40 transactions between 1995 and 1999. Demers admitted taking some money, but claimed it was far less than $13,000.

Juneau Superior Court Judge Patricia Collins sentenced Demers to serve six months in jail and pay up to $24,000 in restitution, including the money he took, interest, accounting fees and volunteer time put into straightening out the group's books.

His lawyer appealed the sentence, and the state Court of Appeals struck down the $5,000 in restitution for the volunteer work. In a 2-1 decision, the court said state law was not written to reimburse unpaid work.

"We conclude that the Legislature did not provide a sentencing court with the power to order restitution to a victim who was injured but who did not sustain actual damages or loss because the injury was cured by volunteer efforts," said the majority ruling written by Judge David Stewart.

Chief Judge Robert Coats, in a dissenting opinion, suggested the festival was penalized for trying to save money by having volunteers do the work.

"Had the folk festival hired accountants to audit the books and reconstruct the records, it would have been far more expensive for the board. By conducting the audit with volunteers, the folk festival saved itself - and Demers if he pays the restitution award - a substantial amount of money" Coats wrote.

Juneau District Attorney Rick Svobodny said his office wants the state Department of Law to try to get the Legislature to change the law so injured parties can be awarded restitution for volunteer work in similar future cases.

An example would be if a vandal broke his car's windshield, he said. If an auto shop did the repairs, a judge would have no problem ordering restitution for the work. But if a friend or relative replaced the window as a favor, the criminal would escape financial responsibility, Svobodny said.

"If I took it to my brother and he fixed it and he didn't charge anything, under the Demers decision, neither one of us would get anything," he said.

Demers' attorney, Philip Pallenberg, said he doubted the court action would impact other cases. He said the Court of Appeals' ruling was narrow, focusing on payment to an organization, not the person who does the work.

"I thought the issue here should be whether the folk festival should be paid for volunteer labor, not whether the people themselves should be paid for that work," he said.

Ed Schoenfeld can be reached at

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