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TEACHERS INS. & ANNUITY ASSN. v. GREEN

June 11, 1986

TEACHERS INSURANCE AND ANNUITY ASSOCIATION and COLLEGE RETIREMENT EQUITIES FUND, Plaintiffs, against CHRISTINE GREEN, Defendant


The opinion of the court was delivered by: EDELSTEIN

EDELSTEIN, District Judge:

OPINION AND ORDER

Plaintiffs Teachers Insurance and Annuity Association and College Retirement Equities Fund brought this action for complete and immediate restitution of unpaid monies defendant Christine Green embezzled as an employee of plaintiffs She has acknowledged liability. Plaintiffs complaint includes claims for conversion, fraud, and breach of fiduciary duty. Plaintiffs also seek consequential damages resulting from defendant's conduct.

 Plaintiffs moved pursuant to Rule 56 of the Federal Rules of Civil Procedure for summary judgment. The motion for summary judgment is granted in part and denied in part.

 BACKGROUND

 Plaintiffs Teachers Insurance and Annuity Association ("TIAA") and College Retirement Equities Fund ("CREF") are companion non-profit New York corporations which sell retirement annuities to teachers and other employees of non-profit colleges, universities and educational institutions throughout the country. In the normal course of business, the teachers and others who purchase TIAA and CREF annuities surrender them to plaintiffs for cash. Defendant Christine Green ("Green") was an employee of TIAA from April 25, 1983 to April 28, 1984. In the course of her employment with TIAA, defendant Green was required to perform services for CREF. The complaint in this action alleges that on four separate occasions while employed by TIAA, defendant Green forged the endorsement on TIAA and CREF annuities, thus causing the surrender of the annuity for cash, payable to herself, without the knowledge or permission of TIAA, CREF, or the true holders of the annuity.

 On September 13, 1984, Green pled guilty to a one-count information in United States v. Green, 84 Cr. 672 (LBS). The information charged that she had obtained and received the cash surrender value of two checks from plaintiff TIAA totalling $20,484.91 and two checks from plaintiff CREF totalling $21,337.37, in violation of 18 U.S.C. ยง 1341, the mail fraud statute.

 On October 29, 1984, Green was sentenced by Judge Leonard B. Sand and placed on probation. The conditions of probation required that Green a) immediately restore $17,000.00 then in her possession to the victims, and make such other restitution pursuant to a payment schedule arranged through the Probation Department as necessary to restore all embezzled funds; b) continue in a program of psychotherapy; and c) perform 300 hours of community service during the course of her probation. Defendant Green has complied with each and every condition of her probation. In particular she immediately returned the $17,000.00 then in her possession, and has made every payment required by the authorized schedule of payments.

 Plaintiffs seek judgment for the unpaid portion of the embezzled funds, as well as consequential damages of $4,706.45. This figure represents costs incurred by the plaintiffs for outside investigative services, outside legal services and mailings to annuity holders to confirm the loss of funds. Plaintiffs claim these expenses were caused by defendant's conduct.

 DISCUSSION

 In asserting Green's liability for immediate restitution of monies yet unpaid to them, plaintiffs contend that Green's guilty plea to the information charging mail fraud precludes her from denying liability for the monies embezzled. These are the funds involved in this civil action.

 Green admits liability for the monies embezzeled as charged in the criminal matter. *fn1" Green, however, contends that under the theory of collateral estoppel the restitution order in the criminal matter bars plaintiffs from bringing a civil suit for the same monies. Under the doctrine of collateral estoppel, "once an issue is actually and necessarily determined by a court of competent jurisdiction, that determination is conclusive in subsequent suits involving a party to the prior litigation." See Montana v. United States, 440 U.S. 147, 153, 59 L. Ed. 2d 210, 99 S. Ct. 970 (1979). Defendant claims that Judge Sand's order requiring full restitution pursuant to a payment schedule precludes a civil judgment to recover those same monies.

 Defendant Green also contends that the criminal restitution statute does not permit a civil judgment for restitution where a court has already ordered full restitution. The statute provides that:

 
Any amount paid to a victim under an order of restitution shall be set off against any amount later recovered as compensatory damages by such ...

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