Town of Gilbert Prosecutor's Ofc. v. Downie
| Decision Date | 24 July 2007 |
| Docket Number | No. 1 CA-SA 07-0078.,1 CA-SA 07-0078. |
| Citation | 216 Ariz. 30,162 P.3d 669 |
| Parties | TOWN OF GILBERT PROSECUTOR'S OFFICE, Petitioner, v. The Honorable Margaret H. DOWNIE, Judge of the Superior Court of the State of Arizona, in and for the County of Maricopa, Respondent Judge, Mitchell Michael Matykiewicz, Real Party in Interest. |
| Court | Arizona Court of Appeals |
Lynn R. Arouh, Gilbert Town Prosecutor by Denise E. Boode, Assistant Town Prosecutor, Gilbert, Attorneys for Petitioner.
Robert A. Butler, Phoenix, Attorney for Real Party in Interest.
¶ 1 After a bench trial, the Gilbert Municipal Court found Mitchell Michael Matykiewicz guilty of contracting without a license and awarded restitution to the homeowners/victims, as required by Arizona's restitution statutes, for the full amount of the payments they made to Matykiewicz. On appeal, the superior court vacated the restitution order and remanded for the municipal court to determine the victims' economic loss. The Town of Gilbert Prosecutor's Office ("Petitioner") filed a petition for special action, arguing that the superior court erred in vacating the restitution order because the full amount of the payments the victims made to Matykiewicz constitute economic loss for restitution purposes.
¶ 2 In support of its argument, Petitioner relies on State v. Wilkinson, 202 Ariz. 27, 30-31, ¶ 16, 39 P.3d 1131, 1134-35 (2002), in which the Arizona Supreme Court determined on the basis of Arizona statutory law that the loss the victims suffered that was subject to restitution consisted of the money they paid to an unlicensed contractor because that was the loss directly caused by the criminal conduct. Concluding that our supreme court meant what it said in Wilkinson, and heeding that court's caution not to consider succeeding causal events and, therefore, consequences that do not flow directly from the unlicensed contractor's criminal conduct, we accept jurisdiction and grant relief.
¶ 3 Through a business known as MLM Construction Services ("MLM"), Matykiewicz made a series of written proposals to construct a swimming pool and make numerous other improvements to the victims' Gilbert home. Work began, and although Matykiewicz personally performed some of the work, most of it was done by individuals under Matykiewicz's supervision. Over the course of the next ten months, the victims paid $52,784.22 to MLM and did not pay anyone else who worked on the job. Matykiewicz personally endorsed the victims' checks. The victims were unhappy with the progress and quality of the work performed, so they contacted the Registrar of Contractors, where they learned that neither Matykiewicz nor MLM was licensed as a contractor. Matykiewicz was charged with contracting without a license, a class one misdemeanor. See Ariz.Rev.Stat. ("A.R.S.") §§ 32-1151 (2002), -1164 (2002).
¶ 4 A bench trial ensued in the Gilbert Municipal Court. Matykiewicz claimed that he was merely a consultant on the victims' project — retaining only a $2,500 consulting fee — and had paid the remainder of the money received from the victims to licensed subcontractors who actually performed the work.1 Noting that the bid had been written by MLM and that MLM was the payee on every check tendered by the victims, the court convicted Matykiewicz of contracting without a license in violation of A.R.S. § 32-1151.
¶ 5 Immediately after trial, the municipal court proceeded to the restitution hearing. Relying on Wilkinson, the prosecutor argued that the victims were entitled to restitution in the full amount they paid to Matykiewicz. Matykiewicz argued that requiring him to make restitution of the full amount paid to him would result in a windfall to the victims and that he should be liable for only the amount he claimed to have retained. Acknowledging Wilkinson, the municipal court ordered Matykiewicz to pay $52,784.22 in restitution.2
¶ 6 Matykiewicz appealed to the Maricopa County Superior Court, see A.R.S. §§ 22-371 (2002), -425 (2002), arguing that the municipal court erred in ordering that he pay restitution in the full amount of $52,784.22. Finding that "the record in the case at bar is not adequately developed regarding incomplete or faulty work," the superior court vacated the restitution order and remanded to the municipal court for a new restitution hearing "to establish the extent of the [victims'] economic loss."3
¶ 7 The State, through the Gilbert Town Prosecutor, filed a motion for rehearing, arguing that "the amount of the [victims'] economic loss is the full amount of their payments to [Matykiewicz] pursuant to the contract" and that "[a]ny consideration of faulty or incomplete work is expressly prohibited by [Wilkinson]." The superior court denied the motion. The municipal court set the case for a sentencing/restitution hearing on April 26, 2007.
¶ 8 On April 16, 2007, Petitioner filed a petition for special action and requested an interlocutory stay of proceedings. The superior court denied Petitioner's interlocutory stay request, and on April 19, 2007, this court granted the stay request pending disposition of the petition for special action.
¶ 9 We accept jurisdiction of the petition for special action for multiple reasons. Petitioner lacks any further remedy by direct appeal because the superior court rendered its judgment on appeal from the municipal court. See A.R.S. § 22-375 (2002); Guthrie v. Jones, 202 Ariz. 273, 274, ¶ 4, 43 P.3d 601, 602 (App.2002); Ariz. R.P. Spec. Act. 1(a). Further, the petition raises a pure question of law that is one of first impression, appears likely to continue arising until it is resolved, and is one upon which lower courts, lacking appellate guidance, have rendered inconsistent judgments. See Guthrie, 202 Ariz. at 274, ¶ 4, 43 P.3d at 602; Mack v. Cruikshank, 196 Ariz. 541, 543, ¶ 1, 2 P.3d 100, 102 (App.1999); Vo v. Superior Court, 172 Ariz. 195, 198, 836 P.2d 408, 411 (App.1992).
¶ 10 In Arizona, the legislature has created a statutory scheme that sends a very clear signal: Contractors who engage in contracting without a license do so at their own peril. For example, a contractor may not commence or maintain a civil action to collect compensation for services requiring a license if the contractor was not licensed when the contract sued upon was entered and when the alleged cause of action arose. A.R.S. § 32-1153 (2002).4 Additionally, an unlicensed contractor may be charged criminally for contracting without a license, see A.R.S. §§ 32-1151, -1164, as occurred in this case to Matykiewicz, and be required to pay restitution to his or her victims.
¶ 11 Under A.R.S. § 13-603(C) (Supp. 2006),5 victims of criminal acts are entitled to restitution for the full amount of their economic loss:
If a person is convicted of an offense, the court shall require the convicted person to make restitution to the person who is the victim of the crime . . . in the full amount of the economic loss as determined by the court. . . .
¶ 12 "Economic loss" is defined in A.R.S. § 13-105(14) (Supp.2006) as follows:
"Economic loss" means any loss incurred by a person as a result of the commission of an offense. Economic loss includes lost interest, lost earnings and other losses which would not have been incurred but for the offense. Economic loss does not include losses incurred by the convicted person, damages for pain and suffering, punitive damages or consequential damages.
Additionally, A.R.S. § 13-804(B) (2001) directs that, in ordering restitution for economic loss pursuant to § 13-603(C) or § 13-804(A), "the court shall consider all losses caused by the criminal offense for which the defendant has been convicted." "These statutes, considered together, define those losses for which restitution should be ordered." Wilkinson, 202 Ariz. at 29, ¶ 7, 39 P.3d at 1133.
¶ 13 In Wilkinson, our supreme court held "that the [restitution] statutes direct a court to award restitution for those damages that flow directly from the defendant's criminal conduct, without the intervention of additional causative factors." Id. In that case, the court differentiated between money paid by the victims to the defendant (Porter) as part of the original contract and those losses incurred by the victims as the result of poor and/or unfinished work:
When Porter, presenting himself as a licensed contractor, entered agreements with [the victims] to provide contracting services, he violated A.R.S. section 32-1151. As a direct result of Porter's offer to act as a licensed contractor, [the victims] agreed to pay, and did pay, all or a portion of the amounts due under their agreements with Porter. Porter's criminal actions directly caused those losses. Indeed, the original conception of restitution, and the form with the most direct link to criminal conduct, is that
of forcing the criminal to yield up to his victim the fruits of the crime. The crime is thereby made worthless to the criminal. This form of criminal restitution is sanctioned not only by history but also by its close relationship to the retributive and deterrent purposes of criminal punishment.
United States v. Fountain, 768 F.2d 790, 800 (7th Cir.1985). Under Arizona's statutes, these victims are entitled to recover their payments to Porter as restitution.
A different result obtains, however, as to the expenses the victims incurred because Porter failed to complete the work he contracted to do or did so in a faulty manner. We agree with the court of appeals that Porter's criminal conduct of contracting without a license did not cause these losses. These losses would not have occurred without the concurrence of a second causal event, Porter's unworkmanlike performance. Therefore, the losses incurred as a result of Porter's poor and unfinished work constitute indirect damages and cannot qualify for restitution.
Id. at ¶¶ 9-10. Our supreme court further...
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Town Prosecutor's Office v. Downie
...for special action, granted relief, reversed, and, over a dissent, reimposed the $52,784.22 restitution order. Town of Gilbert Prosecutor's Office v. Downie, 216 Ariz. 30, 35, ¶ 19, 162 P.3d 669, 674 (App.2007). The majority held that Wilkinson requires disgorgement of "all payments made by......