State v. Bonstetter

Decision Date19 December 2001
Docket NumberNo. 00-2044.,00-2044.
Citation637 N.W.2d 161
PartiesSTATE of Iowa, Appellee, v. John Richard BONSTETTER, Appellant.
CourtIowa Supreme Court

John R. Sandre of Coppola, Sandre, McConville & Carroll, P.C., West Des Moines, for appellant.

Thomas J. Miller, Attorney General, Martha E. Boesen, Assistant Attorney General, Ron Robertson, County Attorney, and Stephen Lickiss, Assistant County Attorney, for appellee.

STREIT, Justice.

A cooperative executive seeks bonus and 401K benefits accrued during the time he was stealing from his employer. John Richard Bonstetter appeals the district court's denial of this claim and order of restitution resulting from his conviction of first-degree fraudulent practice and forgery. Specifically, Bonstetter challenges the trial court's denial of his request to offset damages allegedly owed him by his victim. He further challenges the district court's inclusion of the cost of an audit in the restitution order. We find the district court was correct in not allowing Bonstetter's claim against his victim. Further, while the costs of an audit are certainly recoverable, the State failed to offer sufficient proof of this audit as an item of damage. We affirm in part, reverse in part, and remand.

I. Background Facts

Bonstetter converted over $422,000 from his employer, NEW Cooperative, for private use. In 1992 Bonstetter became director of finance at NEW Cooperative. In 1997 he was promoted to the position of grain market manager and assistant general manager. In these capacities, Bonstetter had authority to issue checks without prior authorization from anyone in the company. During these years, through a series of eleven fraudulent-check transactions, Bonstetter converted the money from his employer.

In 2000, Bonstetter pled guilty to first-degree fraudulent practice and forgery. The district court sentenced Bonstetter to five and ten-year consecutive indeterminate terms of incarceration. The sentences were suspended. Bonstetter repaid $463,597. The State sought to recover restitution for lost profits, audit fees, and attorney fees. During the hearing on damages, the State presented a bill from the auditor for $19,763. Bonstetter testified as part of his compensation package he was entitled to a bonus if he reached certain goals. He claimed he reached the goal prior to resignation and therefore was entitled to the bonus. Bonstetter also sought accrued vacation and 401K benefits. The total amount of these accrued benefits was $54,812. The court ordered Bonstetter to pay $89,318 for lost profits and $19,763 in audit costs. Bonstetter received credit for $21,386 against these amounts for the restitution he previously overpaid.

On appeal, Bonstetter contends he should have been given an offset for the money NEW Cooperative owes him. He also contends the audit fees should not have been included in the restitution order as there was no evidence in the record as to what services were rendered or whether the fees were necessary, fair, and reasonable.

II. Scope of Review

Bonstetter claims he should be allowed an offset as part of the statutory scheme for restitution. We resolve this issue by our rules of statutory construction. We normally construe statutes on the basis of their ordinary and commonly understood meanings. State v. Petrie, 478 N.W.2d 620, 622 (Iowa 1991). We will not search for a different meaning when the statutory language is clear. Id. Our review is at law as to Bonstetter's claim the court erred in including the audit fees in the restitution order. State v. Watts, 587 N.W.2d 750, 751 (Iowa 1998) ("[r]estitution orders are reviewed for errors at law"). The court's findings of fact have the effect of a special verdict. See Iowa R.App. P. 4. When reviewing the restitution order, we determine whether the court's findings lack substantial evidentiary support, or whether the court has not properly applied the law. Christensen v. Iowa Dist. Ct., 578 N.W.2d 675, 678 (Iowa 1998). "Evidence is substantial when a reasonable mind would accept it as adequate to reach a conclusion." Hasselman v. Hasselman, 596 N.W.2d 541, 545 (Iowa 1999) (quoting Johnson v. Dodgen, 451 N.W.2d 168, 171 (Iowa 1990)).

III. The Merits
A. Offset in the Restitution Order

Bonstetter claims NEW Cooperative owes him monies for a bonus, accrued vacation time and salary, and benefits from his 401K plan. It is not clear if he sought extra bonus money for the increased profits from his repayment of the money he stole. At sentencing, the trial court denied Bonstetter's request for such monies.

Before we turn to the merits of this issue, we first briefly explore the concept of criminal restitution. The word "restitution" connotes restoring or compensating the victim for loss. 24 C.J.S. Criminal Law § 1771, at 428 (1999). Unlike other forms of penal sanctions, restitution forces the offender to answer directly for the consequences of his or her actions. See State v. Kluesner, 389 N.W.2d 370, 372-73 (Iowa 1986)

. The rationale of restitution under criminal law is similar to the rationale of tort under civil law. See State v. Mayberry, 415 N.W.2d 644, 645-46 (Iowa 1987). "A wrong has been done. A person has been injured or property damaged. The victim deserves to be fully compensated for the injury by the actor who caused it." State v. Ihde, 532 N.W.2d 827, 829 (Iowa Ct.App.1995) (citing Mayberry, 415 N.W.2d at 645-46). Since restitution is a penal sanction separate from civil remedies, it makes it possible to avoid the necessity of a separate civil action and ensures the efficient use of time and resources in the sentencing process. Matthew Spohn, Note, A Statutory Chameleon: The Mandatory Victim Restitution Act's Challenge to the Civil/Criminal Divide, 86 Iowa L.Rev. 1013, 1034 (2001).

As a general rule, restitution depends on the existence of a crime for which the offender was convicted. 24 C.J.S. Criminal Law § 1774, at 431. In Iowa, restitution shall be ordered in all criminal cases in which the defendant pleads guilty or is found guilty. See Iowa Code § 910.2 (1999); Teggatz v. Ringleb, 610 N.W.2d 527, 529 (Iowa 2000); Watts, 587 N.W.2d at 751 (restitution is mandatory in all criminal cases in which the defendant pleads guilty). After conviction, the court must identify the "victim" entitled to restitution. Wayne R. LaFave, Criminal Procedure § 26.6(c), at 801 (2d ed.1999). A victim is "a person who has suffered pecuniary damages as a result of the offender's criminal activities." Iowa Code § 910.1(5).

Once the victim is identified, the court must determine what losses may be considered in calculating the amount of restitution. Any damages that are causally related to the criminal activities may be included in the restitution order. 24 C.J.S. Criminal Law § 1776, at 432. Damages not causally related to the crime are improper. Id. A restitution order is not excessive if it bears a reasonable relationship to the damage caused by the offender's criminal act. Ihde, 532 N.W.2d at 829. The relationship must be shown by a preponderance of the evidence. Iowa Code § 910.2.

A court is authorized to order criminal restitution pursuant to the statutes. 24 C.J.S. Criminal Law § 1771, at 428. In the absence of such statutes, the court has no power to issue a restitution order. Id. The sentencing judge performs two functions in entering a restitution order. Ihde, 532 N.W.2d at 829, First, the judge determines the damage caused by the defendant's actions. Id. Second, the judge fashions a reasonable method of payment. Id.

Restitution serves multiple purposes. It compensates the victim. Teggatz, 610 N.W.2d at 529 ("the purpose of restitution is to protect the public by compensating victims of criminal activity"). It is rehabilitative in nature. "Restitution goes beyond revenue recovery and is designed to instill responsibility in criminal offenders." State v. Izzolena, 609 N.W.2d 541, 548 (Iowa 2000). When the court orders restitution, it must consider the appropriate goal of restitution desired in the particular circumstances of the case before it.

In reviewing a restitution award, we must determine if the trial court applied the correct law in fixing damage. State v. Petrie, 478 N.W.2d 620, 622 (Iowa 1991). We must also consider whether there is substantial evidence supporting the damages awarded. See State v. Kaelin, 362 N.W.2d 526, 528 (Iowa 1985)

. The district court is confined to the statute in determining what damages to include in the restitution order.

In this case the trial court determined the amount of restitution under Iowa Code chapter 910. This chapter provides, in part:

[T]he sentencing court shall order that restitution be made by each offender to the victims of the offender's criminal activities, to the clerk of court for fines, penalties, ... and, to the extent that the offender is reasonably able to pay, ... court costs ..., court-appointed attorney's fees, or the expense of a public defender when applicable...."

Iowa Code § 910.2.

The trial court denied Bonstetter's request for an offset because the statute does not authorize a reduction of the damages by a claimed offset by the criminal defendant. The trial court correctly applied the rule of strict statutory construction. The restitution statute in Iowa Code chapter 910 is a penal statute and must be interpreted strictly. See White v. Iowa Dep't of Transp., 407 N.W.2d 606, 608 (Iowa 1987)

(in statutes relating to a penal sentence, we apply rules of strict construction). The court must determine the legislative intent, considering the language in the statute, the object sought to be accomplished, and the evil sought to be remedied. State v. Akers, 435 N.W.2d 332, 334 (Iowa 1989) (citing Brown v. John Deere Waterloo Tractor Works, 423 N.W.2d 193, 195 (Iowa 1988)). Strict statutory construction is not to be used to inject doubt when legislative intent is evident through a reasonable construction of the statute. Iowa Code § 4.1(38) (when statute...

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