         IN THE COURT OF CRIMINAL APPEALS OF TENNESSEE

                              AT JACKSON

                         JANUARY 1999 SESSION
                                                         FILED
                                                            June 7, 1999

                                                        Cecil Crowson, Jr.
                                                       Appellate Court Clerk
STATE OF TENNESSEE,             )
                                ) C.C.A. No. 02C01-9710-CR-00395
      Appellee,                 )
                                ) Shelby County
V.                              )
                                ) Honorable L. T. Lafferty, Presiding Judge
                                )
JOY SCHMIDT,                    ) (Theft of Property Over Sixty Thousand
                                ) Dollars)
      Appellant.                )
                                )



FOR THE APPELLANT:                  FOR THE APPELLEE:

WAYNE EMMONS                        JOHN KNOX WALKUP
2502 Mt. Moriah Road, Suite A-100   Attorney General & Reporter
Memphis, TN 38115
                                    PETER COUGHLAN
                                    Assistant Attorney General
                                    425 Fifth Avenue North
                                    2d Floor, Cordell Hull Building
                                    Nashville, TN 37243-0493

                                    WILLIAM L. GIBBONS
                                    District Attorney General

                                    J. ROBERT CARTER
                                    Assistant District Attorney General
                                    Criminal Justice Center-Third Floor
                                    201 Poplar Avenue
                                    Memphis, TN 38103




OPINION FILED: ___________________



AFFIRMED AS MODIFIED



JOHN EVERETT WILLIAMS,
Judge
                                   OPINION

        The defendant, Joy Schmidt, appeals from the Shelby County Criminal

Court’s modifying her probation. She had pleaded guilty to theft of property over

sixty thousand dollars, a Class B felony, and received a sentence of eight years

as a standard Range I offender. The trial court then suspended her sentence to

ninety days, to be served on weekends, and imposed ten years of probation,

restitution of approximately $82,000, and a fine of $500. Approximately two

months later, the trial court modified the probation by ordering the defendant to

immediate incarceration for ninety consecutive days. The defendant appeals,

asserting that the trial court improperly modified her probation because she was

unable to make the monthly restitution payments of $750. The defendant also

asserts that the restitution should be reduced by the amount paid to the victim

under a dishonesty/theft insurance policy. We MODIFY the judgment, limiting

the maximum amount of restitution to $32,000, and AFFIRM.



                                 BACKGROUND

          In less than a year, the defendant forged at least sixty-two checks,

totaling approximately $82,000, on United Agriculture, her employer at that time.

The trial court accepted her plea and sentenced her to eight years with the

Tennessee Department of Correction. The trial court suspended all but ninety

days, to be served on weekends. That court placed the defendant on ten years

probation and, as a specific condition of her probation, ordered her to make

restitution payments of $750 per month to United Agriculture.



          At the hearing for her Petition to Suspend Sentence, the defendant

testified that she had no assets remaining from the stolen funds, because she

spent the overwhelming majority of the money on clothes; tanning sessions;

cosmetic services; private school for her daughter; extravagant meals; furniture;

lessons for dancing, beauty contests, and related training for her daughter; and


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similar expenditures. The defendant further testified that she liquidated all her

assets during several months of unemployment, after United Agriculture

discovered the thefts. With no foreseeable help from her family, her present and

future pay were her sole source of funds for the restitution payments. At the time

of the hearing, she worked approximately forty hours per week and earned

$10.25 per hour.



       Dr. Roger Hanes, the president of United Agriculture, testified that their

insurer, State Auto Insurance, had paid $50,000 of United’s loss under a

dishonesty/theft policy.



       The trial court presided over a revocation hearing approximately two

months later. The defendant had made only one payment of two hundred

dollars, paid the week of the revocation hearing. The trial court modified her

probation, ordering her to serve ninety consecutive days, because of her

dishonesty with that court and her failure to extend a good faith effort to make

her restitution payments to the victim. The defendant also asserts that the

restitution should be lowered in accordance with a recent decision from the

Tennessee Supreme Court.



                             STANDARD OF REVIEW

       On an appeal from a trial court’s modification of probation, this Court

reviews the record for an abuse of discretion. See State v. Harkins, 811 S.W.2d

79, 82 (Tenn. 1991); see also State v. Cheakeater Johnson, No. 01C01-9308-

CC-00285 (Tenn. Crim. App. filed July 21, 1994) (“[T]he standard of review is the

same whether the trial judge actually revoked probation or simply modified the

conditions.”). This Court will not disturb the trial court’s judgment unless “the

record contains no substantial evidence to support the conclusion of the trial

judge that a violation of the conditions probation has occurred.” Harkins, 811

S.W.2d at 82.



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                                             ANALYSIS

        We first address the amount of the monthly restitution payment. In

Tennessee, a court exercising criminal jurisdiction has no “inherent power or

authority to order payment of restitution except as is derived from legislative

enactment.” State v. Alford, 970 S.W.2d 944, 945 (Tenn. 1998). “A sentencing

court may direct a defendant to make restitution to the victim of the offense as a

condition of probation,” if that court “consider[s] the financial resources and

future ability of the defendant to pay or perform” and does not extend the

payment schedule beyond the statutory maximum term of applicable probation

supervision. Tenn. Code Ann. § 40-35-304(a), (c), (d) (emphasis added).



        However, the statute’s “to the victim” language does not comprise

“insurers which pay claims under an insurance contract.” Alford, 970 S.W.2d at

946. The Tennessee Supreme Court has ruled that the General Assembly did

not authorize restitution payments to insurers, even through subrogation, under

these circumstances. Id. at 947. The state concedes that State Auto’s payment

to United Agriculture reduces the restitution owed United by $50,000. We

therefore modify the judgment below, such that the restitution shall not exceed

$32,000.1



        We next address the trial court’s modifying probation such that the

defendant serves ninety consecutive days. This Court will not disturb the trial

court’s finding that the defendant had been untruthful with that court on several

matters. Further, the trial court found that she had not extended the good faith

effort at restitution that the court specifically established as a condition of her

probation. Although she had been on probation over two months and owed at

least $1500 by the day of the revocation hearing, she had made only one

payment of $200 the week of that hearing. The trial court modified the


        1
         On proper motion, the trial court may consider lowering the monthly payments by an
amo unt prop ortional to this re duced total restitution.

                                              -4-
defendant’s probation for these reasons--not merely because the defendant had

not paid the full scheduled amount of restitution. Lack of truthfulness and good

faith with a trial court is a valid reason for that court’s modifying probation. See

State v. Bunch, 646 S.W.2d 158 (Tenn. 1993). We do not find an abuse of

discretion by the trial court in its finding sufficient evidence for this modification.

This issue is without merit.



                                    CONCLUSION

       The judgment below is AFFIRMED AS MODIFIED.




                                                 _____________________________
                                                 JOHN EVERETT WILLIAMS, Judge




CONCUR:




_____________________________
DAVID G. HAYES, Judge




_____________________________
JOE G. RILEY, Judge




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