State v. Taylor

• Decision Date: 20 October 1993
• Docket Number: No. 92-1668,92-1668
• Citation: 506 N.W.2d 767
• Parties: STATE of Iowa, Appellee, v. Kevin TAYLOR, Appellant.
• Court: Iowa Supreme Court

Page 767

506 N.W.2d 767

STATE of Iowa, Appellee, v. Kevin TAYLOR, Appellant.

No. 92-1668.

Supreme Court of Iowa.

Oct. 20, 1993.

Linda Del Gallo, State Appellate Defender, and Shari Barron, Asst. Appellate Defender, for appellant.

Bonnie J. Campbell, Atty. Gen., Chris Odell, Asst. Atty. Gen., J. Patrick White, County Atty., and Rod Reynolds, Asst. County Atty., for appellee.

Considered by McGIVERIN, C.J., and LARSON, CARTER, SNELL, and TERNUS, JJ.

LARSON, Justice.

Kevin Taylor pled guilty to first-degree theft and falsifying public documents under Iowa Code sections 714.2(1) and 718.5 (1991). The district court sentenced him to serve prison terms of ten and five years, respectively, but suspended the sentences and placed him on five year's probation. The issue on appeal is whether the court erred in imposing, as a condition of probation, a restitution order that included the costs of an audit. We affirm.

Taylor was the director of campus programs at the University of Iowa from 1985 to 1991. State auditors discovered altered invoices in March 1991, and a full-scale investigation followed. On April 10, 1991, Taylor and his attorney met with an independent auditor for the university and an agent of the state department of criminal investigation. Taylor admitted embezzling "around $28,000" beginning in January 1990. He offered at that time to assist in the audit, but the offer was declined.

It soon became apparent that Taylor's defalcations were complex and involved a systematic altering of cash records and vouchers for services in connection with university activities. The total amount of the thefts, and the time period over which they occurred, were not readily ascertainable. The audit, which was not completed until August 1991, revealed approximately $58,000 in losses, commencing well before 1990.

The university was charged $19,100 for the audit, but the district court concluded that twenty-five percent of the total cost was not attributable to Taylor's theft and declined to include that amount in the restitution order. The balance, $14,325, was added to the $100 deductible amount on the university's insurance policy, making a total restitution amount of $14,425.

The State urges that the nature of our review is for an abuse of discretion, while Taylor argues that the standard is for errors of law. We believe the question is not whether the district court abused its discretion in ordering restitution for the audit cost, but whether the court had the statutory authority to do so. If the State had that authority, we believe the restitution order was well within the broad discretion granted to the sentencing court. See State v. Janz, 358 N.W.2d 547, 549 (Iowa 1984); State v. Wagner, 484 N.W.2d 212, 214 (Iowa App.1992).

Under our statute, a restitution order may include

all damages to the extent not paid by an insurer, which a victim could recover against the offender in a civil action arising out of the same facts or event, except punitive damages and damages for pain, suffering, mental anguish, and loss of consortium.

Iowa Code § 910.1(2) (1991) (emphasis added). The basis of Taylor's appeal is that the audit was done in preparation for trial, merely an investigation expense, and therefore not recoverable in a civil case. Also, he argues, the cost of the audit could have been reduced if the auditor had accepted Taylor's offer of help.

The civil equivalent of a theft prosecution is an action for conversion, Kendall/Hunt Publishing Co. v. Rowe, 424 N.W.2d 235, 247 (Iowa 1988), so the issue in applying section 910.1(2) is whether the cost of an audit is a proper element of damage in a conversion suit.

The general rule is that, in the absence of specific authority to the contrary, expenses of a civil suit are not recoverable. 89 C.J.S. Trover & Conversion § 175, at 650 (1955). However, in conversion cases, the reasonable and necessary expenses incurred in recovering the property are a proper element of damage. Id. § 174, at 650; 18 Am.Jur.2d Conversion § 117, at 231 (1985). In such cases, the expense of recovery is a "further pecuniary loss" recoverable under the Restatement rule. See Restatement (Second) of Torts § 927(2)(b) (1977).

In General Insurance Co. v. Dyer, 7 Wash.App. 411, 412, 499 P.2d 910, 911 (1972), a town treasurer was sued for conversion. In connection with the expense of an audit, the court stated:

If the only...