Gilbert Prosecutor v. Hon. downie/matykiewicz ( 2008 )

SUPREME COURT OF ARIZONA
En Banc
TOWN OF GILBERT PROSECUTOR’S ) Arizona Supreme Court
OFFICE, ) No. CV-07-0300-PR
)
Petitioner, ) Court of Appeals
) Division One
v. ) No. 1 CA-SA 07-0078
)
THE HONORABLE MARGARET H. DOWNIE, ) Maricopa County
JUDGE OF THE SUPERIOR COURT OF ) Superior Court
THE STATE OF ARIZONA, in and for ) No. LC2006-000817-001DT
the County of Maricopa, )
) Gilbert Municipal Court
Respondent Judge, ) No. 05TR192310C
)
MITCHELL MICHAEL MATYKIEWICZ, )
) O P I N I O N
Real Party in Interest. )
_________________________________ )
Appeal from the Town of Gilbert Municipal Court
The Honorable John E. Hudson, Judge
REMANDED
________________________________________________________________
Special Action from the Superior Court in Maricopa County
The Honorable Margaret H. Downie, Judge
AFFIRMED
________________________________________________________________
Opinion of the Court of Appeals, Division One
216 Ariz. 30, 162 P.3d 669 (2007)
REVERSED
________________________________________________________________
LYNN R. AROUH, GILBERT TOWN PROSECUTOR Gilbert
By Denise E. Boode, Assistant Town Prosecutor
Attorneys for Town of Gilbert Prosecutor’s Office
LAW OFFICES OF MICHAEL J. DEW Phoenix
By Michael J. Dew
Attorneys for Mitchell Michael Matykiewicz
CARON L.B. CLOSE, SCOTTSDALE CITY PROSECUTOR Scottsdale
By Anna C. Johnston, Assistant City Prosecutor
Attorneys for Amicus Curiae City of Scottsdale
AARON J. CARREON-AINSA, PHOENIX CITY PROSECUTOR Phoenix
By Rebecca M. Gore, Assistant City Prosecutor
Attorneys for Amicus Curiae City of Phoenix
________________________________________________________________
B E R C H, 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.
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¶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
1
Unless otherwise indicated, we cite the current version of
the applicable statutes, as they have not been changed since the
criminal conduct occurred.
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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.
¶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
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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
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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.,
2
The only definition of “loss” in Arizona’s criminal code
appears in a provision establishing crime victim accounts if
defendants sell media rights. See A.R.S. § 13-4202 (2001).
This definition, which “includes the value of any property
damaged, destroyed or taken, the cost of medical treatment or
counseling, lost wages and any other damage suffered as a result
of the crime,” applies only to media rights cases. Id. § 13-
4202(M).
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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
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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, 28 Cal. Rptr. 3d 872, 874-
75 (Cal. Ct. App. 2005); Maurer v. State, 939 So. 2d 234, 235
(Fla. Dist. Ct. App. 2006); State v. Baxter, 118 P.3d 1291, 1293
(Kan. Ct. App. 2005); State v. Beavers, 3 P.3d 614, 616 (Mont.
2000), overruled on other grounds by State v. Herman, ___ P.3d
- 8 -
___, 2008 WL 2221908 (Mont. May 29, 2008); People v.
Tzitzikalakis, 864 N.E.2d 44, 46 (N.Y. 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 restitution order
“does not preclude [a victim] from bringing a separate civil
action and proving in that action damages in excess of the
amount of the restitution order”); 13-804(G) (recognizing that
restitution is not a substitute for civil litigation because
“[t]he state does not represent persons who have suffered
economic loss”); Wilkinson, 202 Ariz. at 29-30, ¶ 11, 39 P.3d at
1133-34 (interpreting the restitution statute to avoid a
conflict with Arizona’s civil jury trial right). To hold
otherwise would upset the relationship among reparation,
retribution, and rehabilitation, and blur the distinction
between criminal restitution and recovery for ancillary damages
protected by the civil jury trial. It might also provide a
windfall to the victim and encroach into punishment for the
defendant.
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¶15 Several jurisdictions permit reductions in restitution
for value conferred on the victim. E.g., Beavers, 3 P.3d at 616
(citing Bowman v. State, 698 So. 2d 615, 616 (Fla. Dist. Ct.
App. 1997)); Tzitzikalakis, 864 N.E.2d at 46. In Tzitzikalakis,
for example, the defendant owned a construction company that
contracted with the City of New York. 864 N.E.2d at 44-45. He
pled guilty to crimes stemming from the submission of falsified
invoices. Id. at 45. The trial court ordered restitution in
the face amount of the falsified invoices and excluded evidence
showing that the defendant completed some construction work.
Id. The New York Court of Appeals held that the trial court
erred by excluding evidence of “the fair market value of the
goods and services [the defendant] provided to the city under
the contract.” Id. at 45-46. The court observed that trial
courts “must consider not only the amount taken by [the
contractor,] but also the value of any benefit received by the
victim.” Id. at 46; see also People v. Kom, 467 N.Y.S.2d 495,
495 (N.Y. App. Term 1983) (requiring reductions for value
victims received when determining restitution to be paid by one
convicted of performing home improvement work without a
license). We find the reasoning in Tzitzikalakis persuasive.
¶16 We also find guidance in decisions interpreting the
Mandatory Victims Restitution Act of 1996 (“MVRA”), 18 U.S.C.
- 10 -
§ 3663A (2000 & Supp. 2007). Much like Arizona law, the MVRA
requires defendants to pay restitution to their victims. See
id. § 3663A(a)(1). The MVRA defines the amount of restitution
to be the value of property “loss” less the value “returned.”
Id. § 3663A(b)(1)(B). Several federal circuits have interpreted
“returned” to require reductions in restitution for value
conferred on victims. E.g., United States v. Swanson, 394 F.3d
520, 528 (7th Cir. 2005); United States v. Matsumaru, 244 F.3d
1092, 1109 (9th Cir. 2001).
¶17 In United States v. Shepard, for example, the defendant
embezzled funds from a hospital patient under the guise of
making improvements to the patient’s home. 269 F.3d 884, 885
(7th Cir. 2001). The Seventh Circuit concluded that the
starting point for determining restitution was the amount
embezzled from the victim. Id. at 887. From this amount, the
court subtracted expenditures made on improvements to the
victim’s home. Id. at 887-88. The court concluded that such
expenditures did not differ “in principle from taking the money
from one of [the victim’s] bank accounts and depositing it in
another.” Id. “[T]he change of the property’s form - from cash
to, say, central air conditioning –” does not mean the property
has not been “returned.” Id. at 888.
¶18 We agree with the many courts that have concluded that,
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when determining the proper amount of restitution to be paid to
a victim, consideration should be made for value conferred on
the victim.3
B. State v. Wilkinson
¶19 The Town of Gilbert argues and the court of appeals
concluded that our decision in Wilkinson created a per se rule
that the entire amount of consideration paid by the victim in an
unlicensed contractor case is the proper amount of restitution,
regardless of any benefit conferred on the victim. We disagree
that Wilkinson created such a rule. Although Wilkinson also
involved the restitution due from an unlicensed contractor, it
decided an entirely different issue from the one now facing the
court.
¶20 In Wilkinson, John Porter was convicted of contracting
without a license under § 32-1151. 202 Ariz. at 28, ¶ 3, 39
P.3d at 1132. Porter had contracted with two homeowners, T.S.
and N.L., to perform remodeling work. Id. ¶ 2. T.S. and N.L.
paid Porter $2854.77 and $9040.27, respectively. Id. At
Porter’s restitution hearing, the trial court awarded $22,429.11
to T.S. and $22,365.67 to N.L., which it calculated by “adding
3
The Town of Gilbert has cited no published opinion from any
other jurisdiction holding that the entire amount of
consideration paid by homeowner-victims must be disgorged as
restitution, nor has our research revealed any such authority.
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the amounts each victim had paid to Porter to the estimated cost
of repairing Porter’s faulty work and finishing work he left
incomplete.” Id. ¶ 3.
¶21 This Court concluded that the consideration paid by
T.S. and N.L. was the “loss” that flowed directly from Porter’s
illegal conduct. Id. at 29, ¶ 9, 39 P.3d at 1133. Any damages
for repairing T.S’s and N.L.’s homes or completing the work were
not “direct” because those damages required the occurrence of a
second causal event unrelated to the criminal activity itself -
that is, Porter’s faulty and unprofessional performance. Id.
¶¶ 9-10.
¶22 Although Wilkinson explored the extent to which “courts
can order restitution for victims of an unlicensed contractor
who performs incomplete and faulty work,” id. at 28, ¶ 1, 39
P.3d at 1132, and more specifically, whether losses not
resulting from criminal conduct are subject to restitution, it
never addressed whether losses incurred by victim-homeowners may
be reduced by benefits conferred upon them.4 Because it did not
4
By focusing on payments made by the victim to the
defendant, Wilkinson did not adopt a per se rule for all
unlicensed contractor cases, but instead recognized that a
victim must incur a loss to recover any restitution. A
defendant can violate § 32-1151 without receiving any payments.
See A.R.S. § 32-1151 (making it unlawful for an unlicensed
contractor to engage in the business of contracting without a
license, to submit bids or proposals, to respond to requests for
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address the issue before us, Wilkinson is not dispositive.5
¶23 We recognize the legislature’s strong interest in
protecting the public from unlicensed contractors, which is
evidenced by the onerous requirements for licensure. The
applicant seeking a license must post a bond, obtain experience
or train at an accredited institution, and pass a written
examination; he may also have to submit fingerprints for a
background check. A.R.S. § 32-1122(B)(2), (F). Harsh
qualification or proposals for construction services, to act or
offer to act as a licensed contractor, or to purport to have the
capacity of a licensed contractor). Because the fact of payment
is not determinative as to the commission of the offense, it
would be anomalous to treat such payments as conclusively
establishing a right to restitution in the amount paid.
5
Our dissenting colleague asserts that Wilkinson governs the
result in this case and that principles of stare decisis dictate
adherence to it. We disagree.
Before applying the doctrine of stare decisis, a court must
first identify the legal principle entitled to respect. E.g.,
Michael Abramowicz & Maxwell Stearns, Defining Dicta, 57 Stan.
L. Rev. 953, 957 (2005) (noting that before applying stare
decisis, a court “must first determine just what that case
purports to establish”). As we explained in paragraphs 19-22,
Wilkinson simply did not address the issue presented here.
There are good reasons not to over-read Wilkinson as
holding that a homeowner is entitled to restitution for all
amounts paid to an unlicensed contractor regardless of any
benefits the homeowner received. Over-reading a decision can be
corrosive to the rule of law because it may lead a court to
ignore concerns not present in the earlier case and to embrace
conclusions that are contrary to common sense or experience.
This case illustrates this point; treating Wilkinson as
dispositive could lead to results that are contrary to the
language of the restitution statute, which contemplates that
victims will recover their losses, not a windfall.
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consequences await the unlicensed contractor. Violation of
§ 32-1151 is a class one misdemeanor, A.R.S. § 32-1164(A)(2),
for which incarceration, probation, and statutory fines serve as
punishment, id. §§ 13-707, 32-1164(B). Conviction may also
disqualify the defendant from obtaining a license, § 32-1122(D),
(E).6
¶24 The State thus already has many tools with which to
punish unlicensed contractors. Reading Wilkinson to forge
another tool - a rule of total disgorgement regardless of any
benefit conferred on the victim – would unnecessarily strain
Arizona’s restitution scheme and may lead to absurd or troubling
results.
¶25 Consider, for example, the situation in which an
unlicensed contractor obtained $5000 from a homeowner to perform
construction work. Under the Town’s reading of Wilkinson, the
unlicensed contractor has committed a crime under § 32-1151 and
the homeowner has incurred a $5000 “loss.” See 202 Ariz. at 29,
¶ 9, 39 P.3d at 1133. Assume further, however, that one day
6
After Matykiewicz was convicted, the legislature amended
A.R.S. § 32-1164 to require unlicensed contractors to pay
transaction privilege taxes as a condition of probation. 2007
Ariz. Sess. Laws, ch. 174, § 1 (1st Reg. Sess.). This statute
also demonstrates the legislature’s understanding that one
convicted of contracting without a license may retain some
compensation, but must pay appropriate taxes on it.
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later the unlicensed contractor decided not to do the job and
returned the $5000. To be sure, a crime has still been
committed under § 32-1151, but the homeowner has suffered no
loss. No reasonable jurist would conclude, and the legislature
could not have intended, that the unlicensed contractor must pay
$5000 in restitution in addition to the $5000 already returned.
Such an outcome would result in a windfall for the victim. The
victim would similarly receive a windfall if an unlicensed
contractor flawlessly performed all work for which the victim
contracted, but then was required to disgorge all payments.7 We
find no significant difference between returning cash, one form
of value, and returning other forms of value, such as permits,
chattels, services, or other property. See Shepard, 269 F.3d at
887-88. “Loss” is a concept rooted in value, not solely in the
exchange of money. We thus decline to read Wilkinson as
creating an inflexible rule of total disgorgement regardless of
7
The concern has been raised that requiring defendants to
pay as restitution the full amount of consideration received for
their services may encourage homeowners to knowingly hire
unlicensed contractors because upon conviction for contracting
without a license, the defendant must refund all payments. See
A.R.S. § 32-1153 (preventing unlicensed contractors from
bringing civil action to recover payment). Such conduct,
however, might render the homeowner an accomplice and forfeit
the right to restitution. See State v. Wilkinson, 198 Ariz.
376, 383, ¶ 36, 10 P.3d 634, 641 (App. 2000) (Ryan, J.,
dissenting), overruled by Wilkinson, 202 Ariz. at 31, 39 P.3d at
1135.
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value conferred.
¶26 We are persuaded that determining a victim’s “loss”
requires consideration of any benefits conferred on the victim.
“Most often there will be no reductions, as criminals rarely
confer a benefit on their victims.” Tzitzikalakis, 864 N.E.2d
at 47. If value is conferred, however, courts must consider
such benefits in determining a victim’s loss.
C. Remand
¶27 On remand, the trial court must determine the amount of
the Radas’ loss. While determination of a victim’s loss will
depend upon the unique facts of each case, the Radas’ payments
to Matykiewicz constitute prima facie evidence of their loss.
Wilkinson, 202 Ariz. at 29, ¶ 9, 39 P.3d at 1133. The court
must then subtract from this sum any value Matykiewicz conferred
on the Radas. This difference will usually be the victim’s
loss. To this figure, the court must apply the remaining parts
of Wilkinson’s three-part test – that is, it may not compensate
the Radas for “expenses [they] incurred because [the unlicensed
contractor] failed to complete the work he contracted to do or
did so in a faulty manner.” Id. ¶ 10.
¶28 We are aware that criminal restitution may not provide
victims the full benefit of their bargain because giving such
relief may require consideration of losses that do not flow
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directly from the crime or involve losses that are not
“economic.” But we cautioned in Wilkinson that “[p]otential
problems arise if we too broadly combine civil liability with
criminal sentencing.” Id. at 30, ¶ 12, 39 P.3d at 1134. The
concern remains valid today. We quoted with approval the
following description of the problems that may arise in not
adhering to the legislative limitation of restitution to
“economic loss”:
If reparations as a condition of probation are to
include elements beyond mere “special damages” we
believe a trial court must use great caution. The
sentencing phase of a criminal case is not the ideal
forum for the disposition of a [civil] case. Both
parties are deprived of a jury; the defendant may be
limited in showing causation or developing a defense
of contributory negligence or assumption of risk.
Id. (quoting State v. Garner, 115 Ariz. 579, 581, 566 P.2d 1055,
1057 (App. 1977)) (alteration in Wilkinson). Today’s decision
does not alter any rights a homeowner may have to recover any
indirect or non-economic damages in a subsequent civil action
against the unlicensed contractor. See A.R.S. § 13-807. Nor
does our decision limit any defenses an unlicensed contractor
may have in such actions. It preserves each party’s civil jury
trial right.
III. CONCLUSION
¶29 For the foregoing reasons, we reverse the opinion of
the court of appeals, affirm the judgment of the superior court,
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and remand the case to the Town of Gilbert Municipal Court for
proceedings consistent with this opinion.
_______________________________________
Rebecca White Berch, Vice Chief Justice
CONCURRING:
_______________________________________
Michael D. Ryan, Justice
_______________________________________
W. Scott Bales, Justice
H U R W I T Z, Justice, concurring in part and concurring in the
result
¶30 The term “economic loss” in A.R.S. §§ 13-603(C) and -
804 should be given its commonsense meaning when the case
involves contracting without a license. Thus, the victim should
receive the difference between what he paid the unlicensed
contractor and the value of what he received in return. If the
restitution statutes are read to require that the amount paid is
invariably the measure of restitution, an untenable result would
obtain – a homeowner who received flawless work from an
unlicensed contractor would be refunded the full amount paid but
would nonetheless also retain the work performed. It is
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impossible for me to view such a victim as having suffered any
loss, economic or otherwise, and I therefore concur in ¶¶ 1-18
of the majority opinion.
¶31 I write briefly, however, to address the subject that
divides the majority and the dissent – the effect to be given to
State v. Wilkinson, 202 Ariz. 27, 39 P.3d 1131 (2002). The
majority correctly notes that Wilkinson is factually
distinguishable. The issue in that case was whether the victim
could recover restitution above the amount paid to the
unlicensed contractor; the issue here is whether the amount paid
is the appropriate amount of restitution when the homeowner has
received value in return. Thus, the narrow holding in Wilkinson
does not control the case before us.
¶32 But it is not just the narrow holdings of our prior
cases that are entitled to respect under the doctrine of stare
decisis. Rather, deference should also properly extend to the
Court’s core rationale, the reasoning essential to the result in
the prior case. See Seminole Tribe of Florida v. Florida, 517
U.S. 44, 66-67 (1996); Miller v. Gammie, 335 F.3d 889, 900 (9th
Cir. 2003) (en banc).
¶33 As the Chief Justice notes in her dissent, the
essential premise of Wilkinson was that the crime of contracting
without a license was complete when the victims paid the
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unlicensed contractor. See Wilkinson, 202 Ariz. at 29 ¶¶ 9, 39
P.3d at 1133. Wilkinson therefore held that the quality of any
work performed under the contract was irrelevant to the issue of
criminal restitution. Id. ¶ 10. Rather, because the crime was
complete before any work was done, Wilkinson reasoned that the
appropriate measure of “economic loss” suffered by a victim of
unlicensed contracting is the amount paid to the contractor.
Id. at 29-30 ¶¶ 8-14, 39 P.3d at 1133-34. Applying this
rationale, the victims in this case would receive restitution of
their total payments to Matykiewicz, regardless of the value of
any completed work.
¶34 This, however, does not end the inquiry. Although
stare decisis has powerful force, “[i]t is a doctrine of
persuasion . . . and not an ironclad rule.” Lowing v. Allstate
Ins. Co., 176 Ariz. 101, 107, 859 P.2d 724, 730 (1993). Even in
cases involving statutory construction, “we are not prisoners of
the past,” particularly when the language of the statute at
issue “does not compel the interpretation reached in previous
cases.” Id.¶35 Applying the rationale of Wilkinson to the case before
us would lead to a conclusion that a victim has “economic loss”
under the restitution statutes even if he has none in reality.
Whatever its stare decisis effect, I cannot accept Wilkinson’s
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rationale when it would produce a result at odds with the
language of the restitution statutes.
¶36 The policy behind the doctrine of stare decisis is
that the public should be able to rely on prior judicial
opinions in conducting affairs. Lowing, 176 Ariz. at 107, 859
P.2d at 730. That policy is not implicated in this case. No
victim of an unlicensed contractor could have relied on
Wilkinson. As then-Judge Ryan once aptly noted, those with
knowledge that a contractor with whom they deal is unlicensed
are not victims at all, but rather accomplices to the offense
not entitled to restitution. State v. Wilkinson, 198 Ariz. 376,
383 ¶ 36, 10 P.3d 634, 641 (App. 2000) (Ryan, J., dissenting).
And it goes without saying that an unlicensed contractor could
not have relied to his detriment on Wilkinson, as that case
would impose broader liability on him than the Court’s decision
today. See Benjamin N. Cardozo, The Nature of the Judicial
Process 151 (1921) (“There should be greater readiness to
abandon an untenable position when the rule to be discarded may
not reasonably be supposed to have determined the conduct of the
litigants.”).
¶37 In short, although I recognize that Wilkinson’s
rationale would produce a different result if applied to this
case, I find its reasoning contrary to the clear directive of
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the statute that a victim must suffer an actual loss before
receiving restitution. In the case of unlicensed contracting,
loss is measured by the difference in value between what the
victim paid and what he received. I therefore concur in the
judgment of the Court.
__________________________________
Andrew D. Hurwitz, Justice
M c G R E G O R, Chief Justice, dissenting:
¶38 I respectfully dissent. Today’s decision, without
compelling reason or justification, essentially overturns this
Court’s recent decision in State v. Wilkinson, 202 Ariz. 27, 39
P.3d 1131 (2002). Because I cannot join an approach that so
casually ignores the basic doctrine of stare decisis, I cannot
join today’s Opinion.
¶39 Despite the majority’s assertions otherwise, this case
fits precisely within the rule of law we established in
Wilkinson. The action against Matykiewicz, like the action
against the defendant in Wilkinson, began when dissatisfied
homeowners filed a complaint against a contractor with the
Registrar of Contractors. In both instances, the homeowners
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then learned that the person with whom they had contracted was
not licensed. In both cases, the unlicensed contractor was
convicted of violating Arizona Revised Statutes (A.R.S.) section
32-1151 (2008). In Wilkinson, we concluded:
As a direct result of [the defendant’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 [the defendant]. [The
defendant’s] criminal actions directly caused those
losses. . . . Under Arizona’s statutes, these victims
are entitled to recover their payments to [the
defendant] as restitution.
202 Ariz. at 29 ¶ 9, 39 P.3d at 1133.
¶40 The doctrine of stare decisis thus compels that
Matykiewicz be ordered to return all monies paid under the
agreement as restitution because his criminal actions caused
those losses without the intervention of additional causative
factors. See White v. Bateman, 89 Ariz. 110, 114, 358 P.2d 712,
714 (1961) (“The fact that the construction of the statute in
question rests on a single case does not render it any less the
duty of this court to utilize the doctrine of stare decisis
. . . .”).
¶41 The rule of law depends to a great extent upon a
healthy respect for precedent. “The doctrine of stare decisis,
which requires us to give weight to previous decisions
addressing the same issue, seeks to promote reliability so that
parties can plan activities knowing what the law is.” Galloway
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v. Vanderpool, 205 Ariz. 252, 256 ¶ 16, 69 P.3d 23, 27 (2003)
(McGregor, J.). “Stare decisis reflects a policy judgment that
in most matters it is more important that the applicable rule of
law be settled than that it be settled right.” State Oil Co. v.
Khan, 522 U.S. 3, 20 (1997) (internal quotation omitted). Stare
decisis “promotes the evenhanded, predictable, and consistent
development of legal principles, fosters reliance on judicial
decisions, and contributes to the actual and perceived integrity
of the judicial process.” Payne v. Tennessee, 501 U.S. 808, 827
(1991).
¶42 Because an evenhanded, predictable, and consistent
approach to applying the law is essential to the integrity of
the judicial process, we do not lightly overrule precedent; we
do so only for compelling reasons. “[A]ny departure from the
doctrine of stare decisis demands special justification.”
Arizona v. Rumsey, 467 U.S. 203, 212 (1984); see also State v.
Davis, 206 Ariz. 377, 384 n.4 ¶ 34, 79 P.3d 64, 71 n.4 (2003)
(Berch, J.) (A relatively recent decision of this Court is not
“lightly overrule[d].”). “While the phrase ‘special
justification’ defies simple definition, it does require more
than that a prior case was wrongly decided.” State v. Hickman,
205 Ariz. 192, 200 ¶ 37, 68 P.3d 418, 426 (2003) (Ryan, J.).
Even when this Court has doubted the wisdom of precedent, we
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have followed previous opinions based upon our respect for the
doctrine of stare decisis and our recognition of its importance.
See State v. Lara, 171 Ariz. 282, 285, 830 P.2d 803, 806 (1992)
(restating the holding of a previous case despite the fact that
if the Court had been “writing on a clean slate” it might have
taken another approach); Stewart v. Damron, 63 Ariz. 158, 165,
160 P.2d 321, 324 (1945) (doubting the wisdom of prior
decisions, but finding the matter foreclosed by stare decisis).
¶43 Our failure to apply the doctrine of stare decisis in
this case is especially troubling for two reasons. First,
resolving the issue presented here and in Wilkinson required us
to interpret a statute. “When a court proposes to abandon
precedent in a case involving . . . statutory interpretation[,]
the burden is highest.” Hickman, 205 Ariz. at 201 ¶ 38, 68 P.3d
at 427; see also State v. Fell, 210 Ariz. 554, 561 ¶ 26, 115
P.3d 594, 601 (2005) (Hurwitz, J.) (“[O]ur deference to
precedent is strongest when prior decisions construe a statute.”
(quoting Galloway, 205 Ariz. at 256 ¶ 16, 69 P.3d at 27)). The
reason we give the most deference when construing a statute is
because “if we have interpret[ed] the statute other than as the
legislature intended, the legislature retains the power to
correct us.” Hancock v. Bisnar, 212 Ariz. 344, 349 ¶ 22, 132
P.3d 283, 288 (2006) (Hurwitz, J.) (internal quotation omitted).
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In the six years since Wilkinson, the legislature has given no
indication whatsoever that we incorrectly construed Arizona’s
restitution statutes. Today, the majority simply ignores the
legislature’s apparent approval of the statutory interpretation
of Wilkinson and adopts a new interpretation.
¶44 Second, the majority neither provides any compelling
reason nor points to any change in the law that justifies
overturning our prior decision. That approach is inconsistent
with our insistence that some strong reason justify a departure
from prior decisions. The doctrine of stare decisis “should be
adhered to unless the reasons of the prior decisions have ceased
to exist or the prior decision was clearly erroneous or
manifestly wrong.” White, 89 Ariz. at 113, 358 P.2d at 714; see
also Neal v. United States, 516 U.S. 284, 295 (1996) (finding
that once a court has determined a statute's meaning, the court
should adhere to that ruling absent “intervening development of
the law” or “compelling evidence bearing on [the legislature’s]
original intent”). The ordinary reasons for failing to adhere
to the doctrine of stare decisis are not present in this case.
No intervening development in the law pertaining to criminal
restitution has occurred since Wilkinson was issued in 2002.
Also, the result directed by Wilkinson, that all monies paid
under the contract must be returned, is not clearly erroneous.
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It remains true that forcing a criminal to yield the fruits of
his crime to his victim furthers the original conception of
restitution. See Wilkinson, 202 Ariz. at 29 ¶ 9, 39 P.3d at
1133. It remains true that the rule of Wilkinson protects the
public from unlicensed contractors by rehabilitating offenders
and thus preventing them from again contracting without a
license. Id. at 30 ¶ 13, 39 P.3d at 1134. Further, the result
in Wilkinson prevents the problems that arise when we “too
broadly combine civil liability with criminal sentencing.” See
id. at 30 ¶ 12, 39 P.3d at 1134 (“The sentencing phase of a
criminal case is not the ideal forum for the disposition of a
[civil] case.” (quoting State v. Garner, 115 Ariz. 579, 581, 566
P.2d 1055, 1057 (App. 1977))). Today’s opinion will transform
restitution hearings into the equivalent of complex civil
trials, held without benefit of a jury.
¶45 The doctrine of stare decisis ensures that a court’s
current decisions remain tied to precedent, not simply to
respect precedent, but to promote the continuity and
predictability so essential to the rule of law. My greatest
concern with today’s decision is that it separates this Court’s
analytical framework from our long adherence to stare decisis.
When we ignore precedent without a compelling reason for doing
so, we undermine public trust in the integrity of the law. I do
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not believe this case justifies undermining such trust and
confidence, and therefore dissent.
__________________________________
Ruth V. McGregor, Chief Justice
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