Town Prosecutor's Office v. Downie

• Decision Date: 04 August 2008
• Docket Number: No. CV-07-0300-PR.,CV-07-0300-PR.
• Citation: 189 P.3d 393,218 Ariz. 466
• 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 Supreme Court

189 P.3d 393

218 Ariz. 466

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.

No. CV-07-0300-PR.

Supreme Court of Arizona, En Banc.

August 4, 2008.

Lynn R. Arouh, Gilbert Town Prosecutor By Denise E. Boode, Assistant Town Prosecutor, Gilbert, Attorneys for Town of Gilbert Prosecutor's Office.

Law Offices of Michael J. Dew By Michael J. Dew, Phoenix, Attorneys for Mitchell Michael Matykiewicz.

Caron L.B. Close, Scottsdale City Prosecutor By Anna C. Johnston, Assistant City Prosecutor, Scottsdale, Attorneys for Amicus Curiae City of Scottsdale.

Aaron J. Carreon-Ainsa, Phoenix City Prosecutor By Rebecca M. Gore, Assistant City Prosecutor, Phoenix, Attorneys for Amicus Curiae City of Phoenix.

OPINION

BERCH, Vice Chief Justice.

¶ 1 We have been asked to decide whether the amount of restitution to be paid by a defendant convicted of contracting without a license may be reduced by any value conferred on the homeowner. We hold that such a reduction is appropriate.

I. FACTS AND PROCEDURAL HISTORY

¶ 2 In January 2005, Richard and Felicita Rada hired Mitchell Matykiewicz to perform remodeling work on their home in Gilbert, Arizona. Over the course of nine months the Radas paid $52,784.22 to Matykiewicz. Matykiewicz claims to have hired licensed subcontractors to do the work, which included installing a pool, barbeque, and fire pit; moving the hot tub from one location to another; removing bushes, tree stumps, and gravel from the back yard; raising and painting the walls all around the house; performing interior remodeling work, such as moving sinks and installing doors; and obtaining the required permits from the Town of Gilbert.

¶ 3 Mr. Rada discovered that Matykiewicz was not properly licensed and filed a complaint with the Registrar of Contractors. The Town of Gilbert charged Matykiewicz with contracting without a license in violation of Arizona Revised Statutes ("A.R.S.") section 32-1151 (2008).¹ The municipal court convicted Matykiewicz and, based on its reading of State v. Wilkinson, 202 Ariz. 27, 39 P.3d 1131 (2002), ordered him to pay restitution of $52,784.22, the entire amount the Radas had paid. The court also placed Matykiewicz on probation and imposed a fine of $1855.

¶ 4 On appeal, the superior court vacated the restitution order. Concluding that Wilkinson decided only whether damages for incomplete or faulty work were recoverable as restitution, the superior court remanded the case for a determination of the Radas' economic loss.

¶ 5 The court of appeals accepted jurisdiction of the Town of Gilbert's petition 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 victims to an unlicensed contractor under a contract." Id. at 34, ¶ 14, 162 P.3d at 673. This amount, it concluded, "constitute[s] economic loss subject to restitution." Id. The majority noted that, while the result seems harsh, such a restitution order would help deter unlicensed contractors. Id. at 34-35, ¶¶ 16-17, 162 P.3d at 673-74. The dissent countered that Wilkinson did not create a per se rule of disgorgement of all proceeds. Instead, Wilkinson held that the trial court could not order as restitution additional sums for consequential damages caused by faulty or incomplete work. Id. at 35, ¶ 20, 162 P.3d at 674 (Hall, J., dissenting). The dissent concluded that the restitution inquiry should be guided by general restitution principles. Id. ¶¶ 20-21, 162 P.3d 669.

¶ 6 We granted Matykiewicz's petition for review to decide this issue of statewide importance and to clarify our holding in Wilkinson. We have jurisdiction pursuant to Article 6, Section 5(3) of the Arizona Constitution.

II. DISCUSSION

¶ 7 The Victims' Bill of Rights gives victims the right to prompt restitution for any loss they incur as a result of a crime. Ariz. Const. art. 2, § 2.1(A)(8). Arizona's criminal code implements this constitutional guarantee by requiring "the convicted person to make restitution to ... the victim of the crime ... in the full amount of the [victim's] economic loss." A.R.S. § 13-603(C) (2001).

¶ 8 In ascertaining the victim's "economic loss," the sentencing court must "consider all losses caused by the criminal offense or offenses for which the defendant has been convicted." Id. § 13-804(B); see also id. § 13-105(14) (defining economic loss). The court must then exclude "damages for pain and suffering, punitive damages [and] consequential damages." Id. § 13-105(14). The "economic loss" recoverable as restitution thus includes all "losses" the victim incurred as a result of the criminal offense that are not excluded by § 13-105(14).

¶ 9 In Wilkinson, we identified a three-part test for determining which losses qualify for restitution under § 13-603(C). "First, the loss must be economic. Second, the loss must be one that the victim would not have incurred but for the defendant's criminal offense." Wilkinson, 202 Ariz. at 29, ¶ 7, 39 P.3d at 1133. Third, "the criminal conduct must directly cause the economic loss." Id. In Wilkinson, we focused on the third part of the test — whether the defendant's criminal actions directly caused the damages that arose from the unlicensed contractor's "shoddy and incomplete work." Id. at 28-30, ¶¶ 4, 7-13, 39 P.3d at 1132-34. In this case, we analyze the first part of the test — how to ascertain "economic loss." We must decide whether, in determining how much "economic loss" a victim has suffered, the court may consider any value conferred on the homeowner. Resolution of this issue is a question of law, which we review de novo. See State v. Getz, 189 Ariz. 561, 563, 944 P.2d 503, 505 (1997).

A. The meaning of "loss"

¶ 10 Because statutory language is the best evidence of the legislature's intent, Mejak v. Granville, 212 Ariz. 555, 557, ¶ 8, 136 P.3d 874, 876 (2006), we begin by examining the criminal code to find the meaning of the term "loss." Arizona's criminal code defines "economic loss" as "any" or "all" losses, A.R.S. §§ 13-105(14), -804(B), but does not define the word "loss" in the context of restitution.² The code similarly does not specify whether a determination of "loss" permits consideration of any benefits conferred on the victim.

¶ 11 "Loss" is commonly defined as the difference between what was had before and after a specified event. E.g., Webster's College Dictionary 778 (2d ed.1997) (defining "loss" to mean "the act of losing possession of something" or "an amount or number lost"); see also A.R.S. § 1-213 (2002) (requiring that words be given their ordinary meaning). The restitution provisions of the criminal code confirm that the legislature contemplated a similar definition of "loss" as being "out" something as a result of a crime. Section 13-804(E), for example, provides that if a victim receives compensation from a collateral source to cover economic loss caused by criminal conduct, the court must reduce the victim's recovery by that amount. Requiring reduction of a victim's recovery for sums already received demonstrates the legislature's intent that the victim's "loss" reflect benefits conferred. See Moreno v. Jones, 213 Ariz. 94, 99, ¶ 28, 139 P.3d 612, 617 (2006) (looking to other provisions in a statutory scheme to assist in determining meaning).

¶ 12 Consistent with this understanding, Arizona courts credit victims with the value of returned property when considering restitution. E.g., State v. Ferguson, 165 Ariz. 275, 277-78, 798 P.2d 413, 415-16 (App. 1990) (concluding that the trial court erred by failing to take into account evidence that stolen property had been returned). The concept that restitution compensates victims only for loss actually suffered is well established. See, e.g., ABA Standards for Criminal Justice § 18-3.15(c)(i) (3d ed.1994) (limiting restitution "to the greater of the benefit to an offender or actual loss to identified persons or entities").

¶ 13 Reducing "loss" by any benefits conferred furthers the restitutory purposes of making the victim whole, State v. Guilliams, 208 Ariz. 48, 52, ¶ 12, 90 P.3d 785, 789 (App.2004); In re Kory L., 194 Ariz. 215, 219, ¶ 10, 979 P.2d 543, 547 (App.1999), and rehabilitating the offender, Wilkinson, 202 Ariz. at 30, ¶ 13, 39 P.3d at 1134; State v. Iniguez, 169 Ariz. 533, 536, 821 P.2d 194, 197 (App. 1991). Restitution is not meant to penalize the defendant; that function is served by incarceration, fines, or probation. See Kory L., 194 Ariz. at 219, ¶ 10, 979 P.2d at 547. Restitution therefore should not compensate victims for more than their actual loss. See generally George Blum, Measure and Elements of Restitution to Which Victim is Entitled Under State Criminal Statute, 15 A.L.R.5th 391, § 2(b) (1993). Courts in other jurisdictions agree. See, e.g., People v. Fortune, 129 Cal.App.4th 790, 28 Cal.Rptr.3d 872, 874-75 (2005); Maurer v. State, 939 So.2d 234, 235 (Fla.Dist.Ct.App.2006); State v. Baxter, 34 Kan.App.2d 364, 118 P.3d 1291, 1293 (2005); State v. Beavers, 300 Mont. 49, 3 P.3d 614, 616 (2000), overruled on other grounds by State v. Herman, 343 Mont. 494, 188 P.3d 978, 2008 WL 2221908 (2008); People v. Tzitzikalakis, 8 N.Y.3d 217, 832 N.Y.S.2d 120, 864 N.E.2d 44, 46 (2007).

¶ 14 Limiting the victim's restitution to the amount necessary to recompense direct losses comports with the language of the restitution statutes, makes practical sense, and preserves the proper place and function of a civil jury to determine a victim's actual damages, including damages for pain and suffering, punitive damages, and consequential damages. See A.R.S. §§ 13-807 (2001) (providing that a...