State v. Ryan M. Muth ( 2020 )

2020 WI 65
SUPREME COURT OF WISCONSIN
CASE NO.: 2018AP875-CR
COMPLETE TITLE: State of Wisconsin,
Plaintiff-Respondent-Petitioner,
v.
Ryan M. Muth,
Defendant-Appellant-Cross-Petitioner.
REVIEW OF DECISION OF THE COURT OF APPEALS
Reported at 388 Wis. 2d 257,932 N.W.2d 186
(2019 – unpublished)
OPINION FILED: July 7, 2020
SUBMITTED ON BRIEFS:
ORAL ARGUMENT: April 1, 2020
SOURCE OF APPEAL:
COURT: Circuit
COUNTY: Washington
JUDGE: Todd K. Martens
JUSTICES:
ROGGENSACK, C.J., announced the mandate of the Court, and
delivered an opinion, in which ZIEGLER, J., joined as to Parts
II.A., B. and D., except for ¶¶58-60, and in which KELLY, J.,
joined as to Parts II.A., B., and D. DALLET, J., filed a
concurring opinion, in which ANN WALSH BRADLEY and REBECCA
GRASSL BRADLEY, JJ., joined, and in which ZIEGLER, J., joined as
to ¶¶63-70 and ¶¶72-78. KELLY, J., filed an opinion concurring
in part and dissenting in part, in which HAGEDORN, J., joined as
to Parts I. and II. HAGEDORN, J., filed a dissenting opinion.
NOT PARTICIPATING:
ATTORNEYS:
For the plaintiff-respondent-petitioner, there were briefs
filed by Hannah S. Jurss, assistant attorney general; with whom on
the brief was Joshua L. Kaul, attorney general. There was an oral
argument by Hannah S. Jurss.
For the defendant-appellant-cross-petitioner, there were
briefs filed by Andrew Mishlove and Mishlove & Stuckert, LLC,
Glendale. There was an oral argument by Andrew Mishlove.
2
2020 WI 65
NOTICE
This opinion is subject to further
editing and modification. The final
version will appear in the bound
volume of the official reports.
No. 2018AP875-CR
(L.C. No. 2016CF85)
STATE OF WISCONSIN : IN SUPREME COURT
State of Wisconsin,
Plaintiff-Respondent-Petitioner,
FILED
v. JUL 7, 2020
Ryan M. Muth, Sheila T. Reiff
Clerk of Supreme Court
Defendant-Appellant-Cross-Petitioner.
ROGGENSACK, C.J., announced the mandate of the Court, and delivered
an opinion, in which ZIEGLER, J., joined as to Parts II.A., B. and
D., except for ¶¶58-60, and in which KELLY, J., joined as to Parts
II.A., B., and D. DALLET, J., filed a concurring opinion, in which
ANN WALSH BRADLEY and REBECCA GRASSL BRADLEY, JJ., joined, and in
which ZIEGLER, J., joined as to ¶¶63-70 and ¶¶72-78. KELLY, J.,
filed an opinion concurring in part and dissenting in part, in
which HAGEDORN, J., joined as to Parts I. and II. HAGEDORN, J.,
filed a dissenting opinion.
REVIEW of a decision of the Court of Appeals. Affirmed in
part and reversed in part.
No. 2018AP875-CR
¶1 PATIENCE DRAKE ROGGENSACK, C.J. We review an
unpublished decision of the court of appeals,1 which affirmed in
part the circuit court's2 order that Ryan M. Muth pay restitution
to the victims of his crime. Muth had argued that a civil
settlement precluded the restitution order. The court of appeals
reversed in part and remanded with directions to reduce the amount
of restitution because the amount included income lost as a result
of the spouses of Muth's victims missing work due to Muth's
criminal conduct.
¶2 We agree with the court of appeals that the civil
settlement did not preclude the circuit court from ordering
restitution. Restitution is not a cause of action but a sanction
for criminal conduct owned by the State; as such, victims cannot
unilaterally terminate the State's interest in making them whole,
rehabilitating the offender and deterring criminal conduct.
However, the court of appeals erred by reversing in part and
remanding with directions to reduce the amount of restitution.
Wisconsin, as the State argued, is a marital property state;
therefore, a victim suffers actual pecuniary damages when his or
her spouse does not work because the victim is a member of the
marital community that is affected by the loss of income. We
conclude that the circuit court's restitution order was a
reasonable exercise of discretion under the applicable law and
1 State v. Muth, No. 2018AP875-CR, unpublished slip op. (Wis.
Ct. App. June 6, 2019) (per curiam).
2 The Honorable Todd K. Martens of Washington County presided.
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No. 2018AP875-CR
facts presented. Accordingly, we affirm in part and reverse in
part the court of appeals decision.
I. BACKGROUND
¶3 In March 2016, Muth drove drunk and collided with T.K.'s
vehicle, which resulted in T.K.'s death. In April 2016, Muth and
his insurance company reached a civil settlement with T.K.'s three
adult children, H.M., K.M. and R.K. It stated, in part:
[H.M., K.M. and R.K.] for and in consideration of the
sum of One Hundred Thousand and 00/100 Dollars
($100,000), the receipt whereof is hereby acknowledged,
do hereby for myself, my heirs, executors,
administrators, successors and assigns and any and all
other persons, firms, employers, corporations,
associations, or partnerships release, acquit and
forever discharge Ryan Muth and Progressive Artisan &
Truckers Casualty Insurance Company, of and from any and
all claims, actions, causes of actions, demands, rights,
damages, costs, loss of wages, expenses, hospital and
medical expenses, accrued or unaccrued claims for loss
of consortium, loss of support or affection, loss of
society and companionship on account of or in any way
growing out of, any and all known and unknown personal
injuries and damages resulting from an automobile
accident . . . .
The civil settlement did not enumerate what part of the $100,000
was to cover special damages and what part was to cover general
damages, instead purporting to be a release from all liability.
Each child received one-third of the $100,000.
¶4 In October 2016, Muth pled no contest to one count of
homicide by intoxicated use of a vehicle with one or more prior
operating-while-intoxicated offenses. The circuit court sentenced
Muth to 13 years of initial confinement followed by 13 years of
extended supervision.
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No. 2018AP875-CR
¶5 In February 2017, the circuit court held a hearing on
restitution, at which the three children sought compensation for
various expenses, such as funeral costs. Regarding the civil
settlement, the circuit court asked questions to determine what
type of an agreement accompanied the payment from the insurance
company. The court asked H.M.:
Q. And so part of the settlement –– in your mind, what
did the settlement compensate you for?
A. To me, it was basically to –– trying to –– I don't
want to say replace my mom, but the $100,000 was towards
her life. Like I say, I don't want to try to replace,
but giving us money for replacing her, what they valued
her life at was $100,000.
H.M.'s husband was allowed to speak, though he was not under oath.
Muth did not object. H.M's husband stated:
[R.M.]: Your Honor, may I say a word?
THE COURT: Yes, sir. Your name?
[R.M.]: [R.M.]
I was the main contact for the insurance companies
contacting me. We had to deal with Progressive and State
Farm because of our vehicle. Progressive, the way it
was explained to me it, was that it was towards any civil
suit. I was not under the stipulation that it was for
any of the state criminal case at all.
THE COURT: The $100,000 was to resolve any civil?
[R.M.]: Civil, right.
THE COURT: Okay.
[R.M.]: Basically what they explained to me is
they could not come after Progressive, they did not want
to pay anything over $100,000. That is what Progressive
told me.
4
No. 2018AP875-CR
The circuit court ordered restitution to the adult children after
considering the civil settlement and Muth's claim that the
settlement precluded restitution.
¶6 The circuit court granted two requests that are the
subject of this dispute. H.M. and K.M. requested $2,600 and
$6,480, respectively, as compensation for income lost as a result
of their spouses missing work due to Muth's criminal conduct.
H.M.'s spouse missed 13 eight-hour shifts, and he earned $25 per
hour. K.M.'s spouse missed 54 hours of work, and he earned $120
per hour. In K.M.'s household, her spouse was the sole source of
income.
¶7 Muth filed a written objection to all restitution on two
grounds. First, he argued that the civil settlement precluded
restitution to the adult children. Specifically, he argued accord
and satisfaction arose from the insurance company payment and
barred liability for restitution. He also argued that setoff of
their claimed damages against the insurance company payment would
preclude restitution as well.3 Second, he argued that T.K.'s sons-
3 Accord and satisfaction is a common law contractual doctrine
that may be applied if accord and satisfaction is in consideration
for the settlement of all disputes between parties who have an
interest in the controversy. Superior Builders, Inc. v. Large, 52
Wis. 2d 563, 565-66, 190 N.W.2d 901 (1971). "[A]ccord and
satisfaction is an agreement to discharge an existing disputed
claim and constitutes a defense to an action to enforce the claim."
Parsons ex rel Cabaniss v. Am. Family Ins. Co., 2007 WI App 211,
¶9, 305 Wis. 2d 630, 740 N.W.2d 399 (citing Hoffman v. Ralston
Purina Co., 86 Wis. 2d 445, 453, 273 N.W.2d 214 (1979)).
Setoff is also a common law doctrine that operates much like
a counterclaim. For example, if a contract is substantially
performed in the construction of a building, the contractor can
5
No. 2018AP875-CR
in-law were not victims, and, therefore, the circuit court should
not have imposed restitution for their lost wages.
¶8 The State responded that restitution to the adult
children was proper because Muth failed to prove that the children
would receive a double recovery of special damages. The State
further argued that H.M. and K.M. could be compensated for the
income their spouses would have earned because Wisconsin is a
marital property state.4
¶9 The circuit court upheld its restitution order. The
circuit court acknowledged that victims are not permitted to
receive a double recovery, but it rejected Muth's first argument
because he had failed to prove that a double recovery of special
damages would result from the imposition of restitution. The court
explained that the civil settlement was "quite broad" and was "a
release for both special damages and general damages." The circuit
court found that H.M. and K.M. suffered both special and general
damages and concluded that Muth did not present evidence "that
particular amounts" of the civil settlement "were for general
collect the contract price less any setoff for such things as
defective workmanship that the owner paid another contractor to
correct. Klug & Smith Co. v. Sommer, 83 Wis. 2d 378, 385-86, 265
N.W.2d 269 (1978). Setoff also can be a contractual right. For
example, an insurance policy may assert that payout under the
policy will be subject to setoff by amounts paid by the tortfeasor.
Marotz v. Hallman, 2007 WI 89, ¶20, 302 Wis. 2d 428, 734 N.W.2d
411.
4 In a letter dated March 28, 2017, to the Washington County
Circuit Court, the State argued that the amount of restitution
should include the entirety of the spouses' lost wages because
"Wisconsin is a marital property state."
6
No. 2018AP875-CR
damages and other specific amounts were for special damages."
Therefore, the circuit court concluded that the civil settlement
did not preclude restitution by providing a double recovery of
special damages.
¶10 Furthermore, while the circuit court agreed that the
sons-in-law were not victims, it reasoned that "[l]oss of wages to
the husband is a loss of a marital asset. If it damages him, it
damages her." Because no one disputed that H.M. and K.M. were
victims, the circuit court reasoned that marital property law
authorized the imposition of restitution for income lost by their
spouses missing work due to Muth's criminal conduct.
¶11 Muth appealed. In an unpublished per curiam decision,
the court of appeals concluded that the civil settlement did not
preclude restitution. State v. Muth, No. 2018AP875-CR,
unpublished slip op., ¶10 (Wis. Ct. App. June 6, 2019) (per
curiam). However, the court reversed in part and remanded because
it concluded that marital property law was inapplicable to
Wisconsin's restitution statute. Id., ¶11.
¶12 The State petitioned for review, arguing that H.M. and
K.M. could recover income lost as a result of their spouses missing
work due to Muth's criminal conduct. Muth cross-petitioned,
arguing that the civil settlement precluded restitution to the
children. We granted the petition and cross-petition. We affirm
in part and reverse in part the decision of the court of appeals.
II. DISCUSSION
A. Standard of Review
7
No. 2018AP875-CR
¶13 This case requires us to review a circuit court's
discretionary restitution order and to interpret statutes.
Material facts are not in dispute.
¶14 When a defendant argues the amount of restitution should
be "offset or reduced for any reason," we review the circuit
court's restitution order for an erroneous exercise of discretion.
State v. Longmire, 2004 WI App 90, ¶16, 272 Wis. 2d 759, 681 N.W.2d
534 (citing State v. Johnson, 2002 WI App 166, ¶7, 256 Wis. 2d
871, 649 N.W.2d 284); see State v. Wiskerchen, 2019 WI 1, ¶18, 385
Wis. 2d 120, 921 N.W.2d 730 (quoting State v. Fernandez, 2009 WI
29, ¶20, 316 Wis. 2d 598, 764 N.W.2d 509). We look for reasons to
sustain a circuit court's discretionary decision. Wiskerchen, 385
Wis. 2d 120, ¶18 (quoting Farmers Auto. Ins. Ass'n v. Union Pac.
Ry. Co., 2009 WI 73, ¶32, 319 Wis. 2d 52, 768 N.W.2d 596).
Therefore, if the circuit court grounded its decision in a logical
interpretation of the facts and applied the correct legal standard,
we will uphold it. Wiskerchen, 385 Wis. 2d 120, ¶18 (quoting State
v. Behnke, 203 Wis. 2d 43, 58, 553 N.W.2d 265 (Ct. App. 1996);
citing Fernandez, 316 Wis. 2d 598, ¶20).
¶15 Whether victims can recover income lost as a result of
their spouses missing work due to Muth's criminal conduct turns on
whether the circuit court had statutory authority to award
restitution for that loss. See State v. Walters, 224 Wis. 2d 897,
901, 591 N.W.2d 874 (Ct. App. 1999). Stated otherwise, we
determine whether the circuit court applied the correct law in
exercising its discretion. The interpretation and application of
statutes present questions of law that we review independently.
8
No. 2018AP875-CR
Wiskerchen, 385 Wis. 2d 120, ¶16 (quoting Marder v. Bd. of Regents,
2005 WI 159, ¶19, 286 Wis. 2d 252, 706 N.W.2d 110); Westmas v.
Creekside Tree Serv., Inc., 2018 WI 12, ¶17, 379 Wis. 2d 471, 907
N.W.2d 68 (citing Highland Manor Assoc. v. Bast, 2003 WI 152, ¶8,
268 Wis. 2d 1, 672 N.W.2d 709).
B. Restitution's Burden-Shifting Scheme
¶16 Wisconsin Stat. § 973.20 (2017–18)5 is the restitution
statute from which we begin our discussion. Section 973.20(1r)
provides, in relevant part:
When imposing sentence or ordering probation for any
crime . . . for which the defendant was convicted, the
court, in addition to any other penalty authorized by
law, shall order the defendant to make full or partial
restitution under this section to any victim of a crime
considered at sentencing or, if the victim is deceased,
to his or her estate, unless the court finds substantial
reason not to do so and states the reason on the record.
§ 973.20(1r). A victim has the initial burden to prove by a
preponderance of the evidence that he or she sustained a loss as
a result of a crime considered at sentencing. Wiskerchen, 385
Wis. 2d 120, ¶25 (citing Wis. Stat. § 973.20(14)(a) (2015–16)).
Once this burden is satisfied, restitution is mandatory "unless
the court finds substantial reason not to do so and states the
reason on the record." Wis. Stat. § 973.20(1r); see Fernandez,
316 Wis. 2d 598, ¶21. Stated otherwise, the burden shifts to the
defendant to explain why the circuit court should not impose
5 All subsequent references to the Wisconsin Statutes are to
the 2017-18 version unless otherwise indicated.
9
No. 2018AP875-CR
restitution or why the amount thereof should be lower than the
loss that was proved.
¶17 Wisconsin Stat. § 973.20(14)(b) is relevant here. It
provides, in part that:
The burden of demonstrating, by the preponderance of the
evidence, the financial resources of the defendant, the
present and future earning ability of the defendant and
the needs and earning ability of the defendant's
dependents is on the defendant. The defendant may assert
any defense that he or she could raise in a civil action
for the loss sought to be compensated.
Therefore, we turn to § 973.20(14)(b) and decisions in which
§ 973.20(14)(b) has been interpreted.
C. The Civil Settlement
1. Wisconsin Stat. § 973.20(14)(b)
¶18 The first issue is whether the circuit court erroneously
exercised its discretion in concluding that Muth did not prove
either of his asserted defenses. The resolution of this issue
begins with our interpretation of Wis. Stat. § 973.20(14)(b).
¶19 From our previous interpretations we have established
two rules that we consider in light of the defenses to restitution
in this case. First, defenses raised under § 973.20(14)(b) can go
to the amount of restitution but not to whether there is liability
for restitution. State v. Sweat, 208 Wis. 2d 409, 418, 561 N.W.2d
695 (1997) (concluding that "the restitution statute goes to
establishing the amount of the loss sought to be compensated [and
that d]efenses to liability are not relevant once restitution is
available to crime victims"). Second, in order that a victim may
be made whole but not receive double recoveries, a defendant "may
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No. 2018AP875-CR
assert any defense, including accord and satisfaction or setoff,
in the sentencing hearing." Huml v. Vlazny, 2006 WI 87, ¶22, 293
Wis. 2d 169, 716 N.W.2d 807 (so opining in reliance on Sweat even
though Vlazmy did not challenge the restitution order but rather,
challenged the unpaid amount that Huml sought to convert to a civil
judgment). We also stated in Huml, while discussing accord and
satisfaction, that "[o]nly if a circuit court first finds that
enforcement of the restitution order would result in double
recovery for the victim can a settlement agreement affect a circuit
court's authority to enter or enforce a restitution order while a
defendant remains on probation." Id., ¶37.
¶20 We determine statutory meaning from the words chosen by
the legislature. State ex rel. Kalal v. Circuit Court for Dane
Cty., 2004 WI 58, ¶45, 271 Wis. 2d 633, 681 N.W.2d 110. "If the
words chosen for the statute exhibit a 'plain, clear statutory
meaning,' without ambiguity, the statute is applied according to
the plain meaning of the statutory terms." State v. Grunke, 2008
WI 82, ¶22, 311 Wis. 2d 439, 752 N.W.2d 769. Statutory purpose,
gleaned from the statutory text, has been a helpful component in
our prior interpretations. Wiskerchen, 385 Wis. 2d 120, ¶21.
"Statutory purpose is important in discerning the plain meaning of
a statute." Id. (quoting Westmas, 379 Wis. 2d 471, ¶19).
"[S]tatutory language is interpreted in the context in which it is
used; not in isolation but as part of a whole; in relation to the
language of surrounding or closely-related statutes; and
reasonably, to avoid absurd or unreasonable results." Wiskerchen,
385 Wis. 2d 120, ¶21 (citing Kalal, 271 Wis. 2d 633, ¶46).
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No. 2018AP875-CR
"Therefore, in construing a statute, 'we favor a construction that
fulfills the purpose of the statute over one that defeats statutory
purpose.'" Wiskerchen, 385 Wis. 2d 120, ¶21 (quoting Westmas, 379
Wis. 2d 471, ¶19).
¶21 Wisconsin Stat. § 973.20 has multiple purposes.
Primarily, it "reflects a strong equitable public policy that
victims should not have to bear the burden of losses if the
defendant is capable of making restitution." Wiskerchen, 385
Wis. 2d 120, ¶22. Therefore, "Wisconsin courts have repeatedly
held that 'restitution is the rule and not the exception.'" Id.
(quoting State v. Canady, 2000 WI App 87, ¶8, 234 Wis. 2d 261, 610
N.W.2d 147). "[R]estitution [also] serves the purposes of
punishment and rehabilitation of the defendant." Walters, 224
Wis. 2d at 904. In Huml, we confirmed the state's interest in
restitution when we affirmed Walters and said, "It is true that
restitution in a criminal case is a remedy that belongs to the
state, not to the victim." Huml, 293 Wis. 2d 169, ¶44 (citing
Walters, 224 Wis. 2d at 904). To explain further, "restitution is
recognized as an effective rehabilitative penalty because it
forces defendants to confront concretely——and take responsibility
for——the harm they have inflicted, and it appears to offer a
greater potential for deterrence." People v. Hall-Wilson, 505
N.E.2d 584, 585 (N.Y. 1987) (citing Kelly v. Robinson, 479 U.S.
36, 49 n.10 (1986); Note, Victim Restitution in the Criminal
Process: A Procedural Analysis, 97 Harv. L. Rev. 931, 937–41
(1984)). However, we have concluded that "[t]ermination of
probation [] signals the state's disavowal of any penal or
12
No. 2018AP875-CR
rehabilitative interests [in restitution]." Huml, 293 Wis. 2d
169, ¶44.
¶22 Statutory purpose informed our construction of Wis.
Stat. § 973.20(14)(b) in Sweat, where we concluded that criminal
statutes of limitations, not civil statutes of limitations, govern
the propriety of imposing restitution. Sweat, 208 Wis. 2d at 428.
Our interpretation was consistent with the purposes of the
restitution statute: "(1) rehabilitating a defendant and
(2) making all victims of his or her crimes whole to the extent
reasonably possible." Id. at 423. We concluded that the
rehabilitative goal of restitution would not be served if some
criminals were not subject to restitution solely because a civil
statute of limitations had run. Id. Similarly, the goal of victim
compensation would not be served either. Id. at 422–23.
¶23 We further explained in Sweat that "the entire subject
matter of the restitution statute goes to establishing the amount
of the loss sought to be compensated." Id. at 418. With this
understanding in mind, we concluded that "any defense" in Wis.
Stat. § 973.20(14)(b) means any "defenses as to the amount of
restitution, and not defenses to liability for restitutionary
payments or acts." Id. So while we recognized that defendants
"should be able to raise substantive defenses, such as mitigation,
set-off, or accord and satisfaction," we stated these defenses "go
to the measure or amount of total restitution." Id. at 424. We
also stated that "[d]efenses to liability are not relevant once
restitution is available to crime victims." Id. at 418.
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No. 2018AP875-CR
¶24 To summarize, we distinguished between defenses that
negate liability and defenses that lower the amount of restitution.
We concluded that accord and satisfaction is a permissible defense
but only as to "the measure or amount of total restitution." Id.
at 424.
¶25 Sweat relied on statutory purpose but, importantly, also
grounded its interpretation in the text of Wis. Stat. § 973.20.
First, § 973.20(14)(b) contains multiple sentences. Its first
sentence states, "[t]he burden of demonstrating, by the
preponderance of the evidence, the financial resources of the
defendant, the present and future earning ability of the defendant
and the needs and earning ability of the defendant's dependents is
on the defendant." Its second sentence provides that "[t]he
defendant may assert any defense that he or she could raise in a
civil action for the loss sought to be compensated." We explained
that the sentences, read in context, demonstrate that "the phrase
'any defense' . . . is really a reference to defenses relating to
the determination of the amount of loss to be compensated." Id.
at 426–27. Second, "the phrase 'any defense that he or she could
raise in a civil action' . . . is immediately followed by the
phrase 'for the loss sought to be compensated.'" Id. at 427.
"This placement seems to clearly indicate that the 'any defense'
to which the statute refers means any defense to the amount of
restitution ordered by the trial court, or 'any defense . . . for
the loss sought to be compensated.'" Id.
¶26 Sweat is in accord with the concept that restitution is
a part of our criminal justice system. Indeed, we made a point of
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No. 2018AP875-CR
noting in Sweat that "[a] restitution hearing in a criminal
proceeding is part of the criminal sentencing process, and serves
the goals of the criminal justice system." Id. at 422. To further
explain, restitution is located in Wis. Stat. ch. 973,
"Sentencing." In this criminal context, restitution is not a cause
of action but a sanction for criminal conduct.6 Indeed, Sweat
explained:
[T]he state [is] the movant on behalf of the victims.
The state is entitled to the criminal statute of
limitations in enforcing restitution. The statute of
limitations applies to the state and not to the victims
of crimes because it is the state, and not the victims,
which files criminal actions against the defendant. The
State brought the action against the defendant in a
timely manner, and has therefore met the statute of
limitations.
Id. at 423.
6 Restitution that results from crime commission is most often
held to be a form of punishment under federal statutes and
therefore subject to the Ex Post Facto Clause. 18 U.S.C.
§ 3663A(a)(1) (2012) provides that a federal sentencing court
"shall order" restitution "in addition to, or in the case of a
misdemeanor, in addition or in lieu of, any other penalty
authorized by law." This language is similar to Wis. Stat.
§ 973.20(1r). Notably, in reliance on § 3663A(a)(1), many federal
circuits concluded that restitution is a criminal sanction, as
opposed to a civil remedy, and therefore, 3663A(a)(1) could not be
imposed retrospectively without running afoul of the Ex Post Facto
Clause. United States v. Williams, 128 F.3d 1239, 1241 (8th Cir.
1997); see also United States v. Edwards, 162 F.3d 87, 89 (3d Cir.
1998) (concluding that "most of the Courts of Appeal that have
considered this question have found that the retrospective
application of the [Mandatory Victims Restitution Act] violates
the Ex Post Facto Clause because restitution imposed as a part of
a defendant's sentence is criminal punishment, not a civil
sanction." (Emphasis added.)). A minority of circuits conclude
otherwise. See, e.g., United States v. Newman, 144 F.3d 531 (7th
Cir. 1998).
15
No. 2018AP875-CR
¶27 As the court of appeals said in Walters:
The basic premise that drives the decision in Sweat is
that restitution in criminal cases is not a claim which
a defendant owns, as a civil claim is. It is a remedy
that belongs to the State.
Walters, 224 Wis. 2d at 904. Walters considered a civil settlement
that purported to release the defendant from "all claims and
damages." Id. at 900.
¶28 In regard to accord and satisfaction, Walters concluded
that it could not be a bar to liability for restitution but that
"payments made pursuant to a civil case may have a role in the
court's consideration of how much, if any, restitution is
appropriate in a companion criminal proceeding." Id. at 905
(emphasis added). As we said in Sweat, "[d]efenses to liability
are not relevant once restitution is available to crime victims."
Sweat, 208 Wis. 2d at 418.
¶29 In regard to setoff, Walters concluded that legislative
objectives "will be best served by applying any setoff which a
circuit court determines is appropriate to the total amount of
special damages which the victim has sustained." Walters, 224
Wis. 2d at 906. However, because the record before the court
showed that the victim had suffered both general and special
damages and Walters provided no proof of the amount of special
damages, he failed to meet his burden. Id. at 909. Therefore,
Walters concluded that the circuit court had not erroneously
16
No. 2018AP875-CR
exercised its discretion by refusing to lower the amount of
restitution because of the earlier settlement. Id. at 908–09.7
¶30 In Huml, while confirming Walters, we said that
"restitution in a criminal case is a remedy that belongs to the
state, not to the victim." Huml, 293 Wis. 2d 169, ¶44, (citing
Walters, 224 Wis. 2d at 904). We explained:
The availability of accord and satisfaction and setoff
as defenses to the amount of restitution a circuit court
can order supports the idea that a victim can give up
[their] right to enforce a judgment derived from a
restitution order. Of course, a settlement agreement
does not necessarily prevent the circuit court from
ordering restitution. Walters, 224 Wis. 2d at 905, []
nor does it necessarily prevent enforcement of a
restitution order during the term of probation. Only if
a circuit court first finds that enforcement of the
restitution order would result in double recovery for
the victim can a settlement agreement affect a circuit
court's authority to enter or enforce a restitution
order while a defendant remains on probation.
Huml, 293 Wis. 2d 169, ¶37 (emphasis added).
¶31 As one scholar explained, restitution is functionally
equivalent to "a legally binding obligation between the defendant
and the state." Cortney E. Lollar, What Is Criminal Restitution?,
100 Iowa L. Rev. 93, 95 (2014). Practically, restitution is
analogous to a fine, the proceeds of which go to the victim. Id.
Indeed, similar to other sanctions, restitution is sometimes
included in a deferred prosecution agreement or a plea agreement.
7 Contrary to other writings in this case, Walters never said
that the amount of a victim's damages could not be lowered based
on proof of accord and satisfaction or setoff if double recovery
was proved. Rather, Walters relied on Sweat. In addition, Walters
was repeatedly affirmed by Huml. Walters denied restitution solely
because of a failure of proof. See detailed discussion above.
17
No. 2018AP875-CR
Wis. Crime Victims Council, Crime Victim Restitution Collection in
Wisconsin: A Guide to Help Victims of Crime Understand How
Restitution Is Collected 10 (2014),
https://www.doj.state.wi.us/sites/default/files/ocvs/
navigating/Crime%20Victim%20Restitution%20Collection%20in%20Wisc
onsin%20Aug2014.pdf (last visited June 25 2020).
2. Application
¶32 To focus our discussion, we point out that "in addition
to any other penalty authorized by law, [the court] shall order
the defendant to make full or partial restitution under this
section." Wis. Stat. § 973.20(1r) (emphasis added). Although
restitution may take many forms, the restitution sought in this
case includes only special damages. There can be no award of
general damages, which are precluded by Wis. Stat. § 973.20(5)(a).
¶33 Muth asserts the defense of accord and satisfaction,
which, in a civil action, would be "a complete defense." Walters,
224 Wis. 2d at 904. Stated otherwise, in a civil action, accord
and satisfaction "bars further liability when an offer of
performance in exchange for full satisfaction of a disputed claim
is accepted and the promised performance occurs." Id. Muth
alternatively argues his restitution should be subject to setoff.
Muth fails to recognize the significance of our precedent, which
has thoroughly examined the language and purpose of Wis. Stat.
§ 973.20 and concluded that defenses to restitution must go to the
amount thereof as opposed to liability.
¶34 The circuit court did not erroneously exercise its
discretion in concluding that Muth did not prove either of his
18
No. 2018AP875-CR
asserted defenses. First, the circuit court concluded that the
victims "have met their burden of proving that the losses were
incurred." The court listed the restitution amount of $43,270.42
and then explained each loss that was contained within that amount.
The circuit court also found that it had been presented with no
evidence of the amount of special damages that were included within
the $100,000 insurance settlement and that providing such evidence
was the defendant's burden.
¶35 To explain, nothing intrinsic to the civil settlement
provided evidence as to whether the adult children would receive
a double recovery for the special damages they sustained. The
civil settlement purportedly released Muth from claims for lost
wages, a form of special damages, as well as claims for loss of
consortium, loss of support of affection and loss of society and
companionship, which are forms of general damages. The settlement
does not enumerate what portion of the proceeds cover special
damages. In this manner, the settlement terms are analogous to
the settlement reviewed in Walters, wherein the court of appeals
rejected similar defenses to a restitution order, which covered
"all claims and damages" because the defendant did not prove the
amount of special damages. Id. at 900. In addition, these special
and general damages all arise from what T.K. would have provided
had she not been killed in her accident with Muth. By contrast,
the special damages that were awarded here arose from a crime and
are not T.K's lost wages that were addressed in the settlement
agreement.
19
No. 2018AP875-CR
¶36 Moreover, Muth did not provide extrinsic evidence to
demonstrate what portion of the civil settlement, if any, covered
as special damages the lost wages of the spouses of T.K.'s adult
daughters. Extrinsic evidence confirms our understanding of the
settlement agreement.8 To explain, H.M.'s testimony and her
husband's nontestimonial statements indicated that they did not
agree that the civil settlement was meant to cover all damages.
Rather, they said that the settlement was what the insurance
company "valued her life at was $100,000."
¶37 Second, the circuit court applied the controlling and
correct legal standards: (1) defenses raised under Wis. Stat.
§ 973.20(14)(b) can go to the amount of restitution but not
liability; and (2) a civil settlement can lower the amount of
restitution only if the defendant proves a victim would receive a
double recovery of special damages. Huml, 293 Wis. 2d 169, ¶37.
Therefore, Muth's accord and satisfaction defense did not reduce
the amount of damages that the circuit court found the adult
children proved because Muth made no showing that they would
receive a double recovery from the restitution award. It was
Muth's burden to prove that the special damages they sought had
8 Extrinsic evidence cannot be used to contradict an
unambiguous contract provision. Hoffman, 86 Wis. 2d at 454,
("Assent does not necessarily, however, require mental assent or
a 'meeting of the minds.' The question is not the actual intent
of the offeree, but his manifested intent." (Internal citations
omitted.)).
Here, the settlement was for policy limits, $100,000, and is
ambiguous in regard to what portion of that amount was paid for
special damages.
20
No. 2018AP875-CR
already been paid by the insurance company settlement. However,
Muth provided no evidence about what portion of the settlement was
for special damages or that the settlement included the lost wages
of the spouses of T.K.'s adult daughters. Accordingly, the circuit
court's finding of fact that Muth did not meet his burden of proof
in regard to accord and satisfaction is not clearly erroneous.
¶38 Similarly, Muth's setoff defense did not reduce
restitution because he did not prove that a double recovery of
special damages would result from the imposition of restitution.
Stated otherwise, Muth did not prove "what part, if any" of the
civil settlement "was paid for special damages" or that any portion
of the "loss of wages" were for loss of wages of the spouses of
T.K.'s adult daughters, rather than for T.K.'s loss of wages.
Again, this was Muth's burden of proof. Walters, 224 Wis. 2d at
908. He did not meet it. As the court of appeals stated, "Muth
failed to present evidence on which the [circuit] court could have
reasonably differentiated between general and specific damages in
the payout under the settlement agreement." Muth, No. 2018AP875-
CR, ¶18.
¶39 The circuit court's rejection of Muth's defenses also
was consistent with the statutory purpose of Wis. Stat. § 973.20.
"Settlements of civil claims promote the public interest of
resolving disputes informally and without litigation." Walters,
224 Wis. 2d at 904 (citing Tower Ins. Co., Inc. v. Carpenter, 205
Wis. 2d 365, 371–72, 556 N.W.2d 384 (Ct. App. 1996)). "However,
the efficient resolution of civil disputes is not the policy on
which restitution in a criminal proceeding is based. Rather,
21
No. 2018AP875-CR
restitution serves the purposes of punishment and rehabilitation
of the defendant, while seeking to make the victim of criminal
acts whole in regard to the special damages sustained." Walters,
224 Wis. 2d at 904.
¶40 In our review of the circuit court's consideration of
Muth's defenses, we applied Sweat's conclusion that "'any defense'
[in Wis. Stat. § 973.20(4)(b)] . . . mean[s] only defenses as to
the amount of restitution, and not defenses to liability for
restitutionary payments or acts." Sweat, 208 Wis. 2d at 418. We
also considered Huml, which was not a challenge to a restitution
order such as we have here but rather, Huml arose when a
restitution order was converted to a civil judgment. In Huml, we
affirmed Walters, but also explained that questions presented in
Walters and Huml were different in significant ways:
It is true that restitution is a criminal case is a
remedy that belongs to the state, not to the victim.
Walters, 224 Wis. 2d at 904. Termination of probation,
however, signals the state's disavowal of any penal or
rehabilitative interests . . . . Consequently, it is
consistent with Wisconsin precedent to allow a victim,
in anticipation of the defendant completing probation,
to release her right to enforce any judgment derived
from unpaid restitution as part of a settlement
agreement.
Huml, 293 Wis. 2d 169, ¶44 (emphasis added). We further explained
that "there is considerable value in permitting a victim to release
her interest in a judgment derived from a restitution order because
it allows the victim to settle the case and replace an uncertain,
future recovery with a certain, immediate recovery." Id., ¶47.9
9 Some may confuse this statement in Huml v. Vlazny, 2006 WI
87, ¶44, 293 Wis. 2d 169, 716 N.W.2d 807, as impairing Sweat's and
22
No. 2018AP875-CR
¶41 In summary, the circuit court logically interpreted the
facts and applied the correct legal standards. Therefore, it did
not erroneously exercise its direction. Wiskerchen, 385 Wis. 2d
120, ¶18.
D. Restitution and Marital Property
¶42 Turning to the next issue, Muth argues that the spouses
of H.M. and K.M. are not victims for the sake of the restitution
statute. The State does not dispute that in-laws are not victims;
however, the State disputes the significance of this legal
conclusion on the ground that harm to the marital communities is
harm to H.M. and K.M. who are victims. The State's argument rests
on Wisconsin's marital property law.
¶43 To explain, Wis. Stat. § 973.20(1r) entitles "victims"
to restitution; however, § 973.20 does not define victim. Courts
have looked to Wisconsin's crime victims' rights statute, Wis.
Stat. § 950.02, for guidance. State v. Gribble, 2001 WI App 227,
¶¶71–74, 248 Wis. 2d 409, 636 N.W.2d 488. This approach is
consistent with the canon in pari materia: "In construing the
plain meaning of a particular statute, we may consider related
statutes." State v. Harrison, 2020 WI 35, ¶35, 391 Wis. 2d 161,
Walters' conclusion that defenses raised during a restitution
hearing lie to reduce only the amount of damages but not to
extinguish liability for restitution. State v. Sweat, 208 Wis. 2d
409, 418, 561 N.W.2d 695 (1997); State v. Walters, 224 Wis. 2d
897, 905, 591 N.W.2d 874 (Ct. App. 1999). However, as we have
explained, Huml arose when unpaid restitution was being converted
to a civil judgment, while Sweat and Walters arose from restitution
hearings at which restitution was ordered.
23
No. 2018AP875-CR
942 N.W.2d 310 (citing Winebow, Inc. v. Capitol-Husting Co., Inc.,
2018 WI 60, ¶30, 381 Wis. 2d 732, 914 N.W.2d 631).
¶44 Wisconsin Stat. § 950.02(4)(a) provides:
"Victim" means any of the following:
1. A person against whom a crime has been
committed.
2. If the person specified in subd. 1 is a child,
a parent, guardian or legal custodian of the child.
3. If a person specified in subd.1 is physically or
emotionally unable to exercise the rights granted under
s. 950.04 or article I, section 9m, of the Wisconsin
constitution, a person designated by the person
specified in subd. 1. or a family member of the person
specified in subd. 1.
4. If a person specified in subd. 1. is deceased,
any of the following:
a. A family member of the person who is deceased.
b. A person who resided with the person who is
deceased.
"Family member" is defined as "spouse, minor child, adult child,
sibling, parent, or legal guardian." § 950.02(3).
¶45 The definition of family member in the victims' rights
statute does not include in-laws, and, therefore, in-laws are not
victims. Cf. Johnson, 256 Wis. 2d 871, ¶¶18–19 (explaining that
stepparents are not victims under Wis. Stat. § 950.02(4)(a)4.).
¶46 Accordingly, the spouses of H.M. and K.M. cannot
directly seek restitution. The State argues, however, that marital
property law permits H.M. and K.M. to seek recovery on behalf of
the marital community for income lost as a result of their spouses
missing work due to Muth's criminal conduct.
24
No. 2018AP875-CR
1. Wisconsin Stat. § 766.31
¶47 Wisconsin is a marital property state. "[M]arital
property is a form of community property." Wis. Stat.
§ 766.001(2). "Modeled after the Uniform Marital Property Act,
the Marital Property Act transformed Wisconsin from a common law
property state to a community property state." Gerczak v. Estate
of Gerczak, 2005 WI App 168, ¶18, 285 Wis. 2d 397, 702 N.W.2d 72
"All property of spouses is presumed to be marital property." Wis.
Stat. § 766.31(2). Under Wisconsin law, property of the marital
community has a unitary concept of ownership "as being owned
entirely by both spouses." In re Schmiedel, 236 B.R. 393, 400
(Bankr. E.D. Wis., 1999). Accordingly, "one spouse's income is
marital property in which both spouses have a present undivided
half interest. In any claim for unpaid wages, a non-wage earning
spouse has the same interest in the potential income as the spouse
who earned the wages." Gerczak, 285 Wis. 2d 397, ¶19; Wis. Stat.
§ 766.31(3).10
2. Application
¶48 By application of marital property law, the circuit
court had the authority to exercise its discretion and impose
restitution for income lost as a result of the spouses of Muth's
victims missing work due to Muth's criminal conduct.11
10See also Jay E. Grenig & Nathan A. Fishbach, 1A Wisconsin
Practice Series: Methods of Practice § 24:12 Marital Property
(5th ed. updated Nov. 2019) ("Property classified as marital
property is owned by both spouses equally.").
11As the circuit court explained, "Wisconsin is a marital
property state. Income from a spouse is a marital asset. If [the
25
No. 2018AP875-CR
¶49 The State cites Wis. Stat. § 973.20(5)(a) and (b), which
provide that when imposing restitution, a circuit court may require
the defendant to:
(a) Pay all special damages, but not general
damages, substantiated by evidence in the record, which
could be recovered in a civil action against the
defendant for his or her conduct in the commission of a
crime considered at sentencing.
(b) Pay an amount equal to the income lost, and
reasonable out-of-pocket expenses incurred, by the
person against whom a crime considered at sentencing was
committed resulting from the filing of charges or
cooperating in the investigation and prosecution of the
crime.
Notably, § 973.20(5)(a) is not limited to a particular subset of
victims. However, § 973.20(5)(b) authorizes restitution only to
"the person against whom a crime considered at sentencing was
committed." In the case-at-hand, T.K. was the person against whom
the crime was committed, and, therefore, H.M. and K.M., her adult
daughters, are not entitled to restitution under § 973.20(5)(b).12
¶50 Turning to Wis. Stat. § 973.20(5)(a), the statutory
issue presented is whether the spouses' income loss is a form of
special damages that could be recovered in a civil action by H.M.
and K.M. against Muth for his conduct. As already explained,
special damages are "actual pecuniary losses." Holmgren, 229
loss] damages him, it damages her."
12Wisconsin Stat. § 950.02(4)(a)1. also uses the phrase "[a]
person against whom a crime has been committed" to refer to those
directly harmed by criminal conduct. The statute then defines
other people that are also victims by their relationship to the
person against whom the crime was committed.
26
No. 2018AP875-CR
Wis. 2d 358, 365, 559 N.W.2d 876 (1999). Lost wages are a type of
special damages. § 973.20(3)(c).
¶51 As a representative of the marital community, a spouse
can recover the full amount of income loss, not just his or her
present undivided one-half interest. First, Wis. Stat.
§ 766.31(7)(d) and (f) provide that "recovery for personal injury"
is "individual property" except for "the amount attributable to
loss of income during marriage." Because income is presumed to be
marital property, the amount of income recoverable is based on the
harm inflicted on the marital community.
¶52 Second, Wis. Stat. § 766.31(7)(f) is a departure from
the Uniform Marital Property Act, which influenced the drafting of
Wisconsin's Marital Property Act. An explanation of the departure
helps illustrate the meaning of § 766.31(7)(f):
The Wisconsin change was chosen because it better
reflects the principle of sharing during marriage and
protects the non-injured spouse in cases in which the
recovery becomes substantial income for a couple during
marriage and because it reflects the common practice in
Wisconsin of having the special verdict indicate the
amount of lost earnings. The Wisconsin rule follows the
usual classification rule developed in the community
property states.
Lynn Adelman, Donald Hanaway & Mary Lou Munts, Departures from the
Uniform Marital Property Act Contained in the Wisconsin Marital
Property Act, 68 Marq. L. Rev. 390, 393 (1985). The non-injured
spouse is unprotected if the injured spouse can recover only his
or her present undivided one-half interest in the income loss.
That is contrary to the remedial purpose of the statutory scheme.
27
No. 2018AP875-CR
¶53 And finally, appellate courts have long concluded that
when the claim is for lost wages, "a non-wage earning spouse has
the same interest in the potential income as the spouse who earned
the wages." Gerczak, 285 Wis. 397, ¶19. Therefore, the victims,
H.M. and K.M., could have sued Muth, on behalf of their marital
communities, for the income loss by their husbands due to Muth's
criminal conduct.13 In such a civil suit, they would have the
opportunity to recover because Muth's conduct was a "substantial
factor" in causing the loss. Fischer v. Ganju, 168 Wis. 2d 834,
857, 485 N.W.2d 10 (1992) (explaining that Wisconsin courts employ
substantial factor causation).
¶54 As the court of appeals has explained:
Before restitution can be ordered, a causal nexus must
be established between the "crime considered at
sentencing," and the disputed damage. In proving
13The court of appeals implied in a footnote that the State
conceded that the restitution order should have compensated H.M.
and K.M. for only one-half of the income lost as a result of their
husbands missing work due to Muth's criminal conduct. Muth,
No. 2018AP875-CR, ¶26 n.3. The State asserts that it never
conceded this point. Indeed, its brief before the court of appeals
appears to have argued that H.M. and K.M. could recover the full
amount of their spouses' lost wages. The State's brief stated:
H.M. and K.M. testified at the hearing about restitution
they sought for actual losses to them——income that, by
law, belongs to them just as much as it belongs to their
husbands.
If this is not "income lost" to H.M. and K.M.,
consider the reverse: Should H.M., for example, not be
able to claim lost wages from her work because those
wages really belong to her husband? Should she be able
to claim half because her husband also has an undivided
interest in half of her wages?
28
No. 2018AP875-CR
causation, a victim must show that the defendant's
criminal activity was a "substantial factor" in causing
damage. The defendant's actions must be the
"precipitating cause of the injury" and the harm must
have resulted from "the natural consequence[s] of the
action."
Canady, 234 Wis. 2d 261, ¶9 (internal citations omitted).
Certainly, the husbands' loss of work due to assistance of their
spouses was precipitated by Muth's criminal conduct and was a
"natural consequence" of his actions. Therefore, although
restitution is not a civil claim that the children of T.K. are
proceeding upon in this state-action for restitution, the wages
lost meet the caveat described in Wis. Stat. § 973.20(5)(a) for
potential recovery in a civil action.
¶55 The circuit court considered marital property law when
the court exercised its discretion to award restitution for lost
wages. The court concluded that "loss of wages to the husband is
a loss of a marital asset. If it damages him, it damages her."
In so doing, the circuit court applied the relevant law to the
facts of record, and did not erroneously exercise its discretion
in its restitution order.
¶56 Muth erroneously relies on Johnson. There, a victim's
stepfather sought restitution for lost wages under Wis. Stat.
§ 973.20(5)(b). Johnson, 256 Wis. 2d 871, ¶3. He "completed a
restitution form" to do so. Id. The circuit court had permitted
the stepfather to recover restitution for lost wages on the ground
that the mother was a victim and Wisconsin is a marital property
state. Id., ¶23. The court of appeals noted the State had not
developed this argument on appeal and further stated that:
29
No. 2018AP875-CR
[B]ecause there is no language in the restitution
statute or in Wis. Stat. § 950.02(4)(a) suggesting that
restitution be permitted through such an indirect route,
we conclude that the restitution statute intended to
limit the recovery of lost wages for attending court
proceedings to the persons identified in Wis. Stat.
§ 973.20(5)(b).
Id. Muth argues that these statements foreclose the State's
marital property argument.
¶57 We disagree. Muth fails to recognize that in Johnson,
the stepfather directly asserted a claim for restitution of his
lost wages under Wis. Stat. § 973.20(5)(b). His spouse did not
assert a community property claim under § 973.20(5)(a) as is
presented here. This distinction is significant because
§ 973.20(5)(a) and (b) present different legal theories under
which a victim can recover. As we explained above, § 973.20(5)(b)
addresses expenses incurred "by the person against whom a crime
considered at sentencing was committed." The stepdaughter was the
person against whom the crime was committed, not the stepfather.14
Id., ¶22 (explaining that the stepfather was not a person against
whom a crime was committed). Here, H.M. and K.M., who are victims,
14Notably, the stepfather recovered for the cost of
installing a security system in the home. State v. Johnson, 2002
WI App 166, ¶31, 256 Wis. 2d 871, 649 N.W.2d 284. That recovery
was premised not on Wis. Stat. § 973.20(5)(a) or (b) but on (d).
Id., ¶20. Wisconsin Stat. § 973.20(5)(d) provides that a
restitution order may "[i]f justice so requires, reimburse any
insurer, surety or other person who has compensated a victim for
a loss otherwise compensable under this section." The stepfather
was an "other person." Johnson, 256 Wis. 2d 871, ¶20. Therefore,
Johnson is not internally inconsistent. It permitted recovery
under § 973.20(5)(d) because an "other person" does not have to be
a victim; it denied recovery under § 973.20(5)(b) because the
stepfather was not "the person against whom a crime was committed."
At no point does Johnson ever discuss § 973.20(5)(a).
30
No. 2018AP875-CR
sought restitution for income loss, which was marital property, as
a result of their spouses missing work due to Muth's criminal
conduct. In sum, the legal issues relating to lost wages in
Johnson were presented differently than they were presented here.
There is no need to withdraw language from Johnson.
¶58 In her concurrence, Justice Dallet raises the wrongful
death statute. Muth did not raise it. No party has briefed it
for this court. Notwithstanding all of the above, Justice Dallet
is not deterred.
¶59 From the circuit court's order forward, this case has
addressed whether the civil settlement agreement into which H.M.
and K.M. entered precluded restitution for the crime Muth
committed. Muth raised only accord and satisfaction and setoff as
defenses to restitution.
¶60 Her concurrence has the potential to cause unnecessary
confusion in subsequent wrongful death actions partially because
there is no majority opinion of the court in State v. Muth to guide
future litigation and partially because Justice Dallet misstates
the law relating to wrongful death claims.
III. CONCLUSION
¶61 We agree with the court of appeals that the civil
settlement did not preclude the circuit court from ordering
restitution. Restitution is not a cause of action but a sanction
for criminal conduct owned by the State; as such, victims cannot
unilaterally terminate the State's interest in making them whole,
rehabilitating the offender and deterring criminal conduct.
However, the court of appeals erred by reversing in part and
31
No. 2018AP875-CR
remanding with directions to reduce the amount of restitution.
Wisconsin, as the State argued, is a marital property state;
therefore, a victim suffers actual pecuniary damages when his or
her spouse does not work because the victim is a member of the
marital community that is affected by the loss of income. We
conclude that the circuit court's restitution order was a
reasonable exercise of discretion under the applicable law and
facts presented. Accordingly, we affirm in part, reverse in part
the court of appeals' decision.
By the court.—The decision of the court of appeals is affirmed
in part, reversed in part.
32
No. 2018AP875-CR.rfd
¶62 REBECCA FRANK DALLET, J. (concurring). I concur with
the court's mandate but do not join the lead opinion's reasoning.
The lead opinion's analysis on accord and satisfaction fails to
meaningfully clarify State v. Walters, 224 Wis. 2d 897, 591
N.W.2d 874 (Ct. App. 1999). Additionally, while I would also
uphold the circuit court's award of restitution for the lost wages
of the victims' spouses, the lead opinion unnecessarily delves
into marital property law and improperly shoehorns the grant of
restitution into Wis. Stat. § 973.20(5)(a). Therefore, I
respectfully concur.
¶63 I begin with a brief recitation of the facts. T.K. died
in March 2016 after her vehicle was struck by Muth's vehicle. In
April 2016, while the criminal case against Muth was pending, Muth
and his insurance company reached a civil settlement with T.K.'s
three adult children. The $100,000 settlement agreement generally
released Muth from, among other things, all "claims, actions,
causes of actions, demands, rights, damages, costs, loss of wages,
expenses . . . ," resulting from the automobile accident.1 The
1 The agreement provided that the three adult children:
for and in consideration of the sum of One Hundred
Thousand and 00/100 Dollars ($100,000) . . . do hereby
for myself, my heirs, executors, administrators,
successors and assigns and any and all other persons,
firms, employers, corporations, associations, or
partnerships release, acquit and forever discharge Ryan
Muth and Progressive Artisan & Truckers Casualty
Insurance Company, of and any and all claims, actions,
causes of actions, demands, rights, damages, costs, loss
of wages, expenses, hospital and medical expenses,
accrued or unaccrued claims for loss of consortium, loss
of support or affection, loss of society and
1
No. 2018AP875-CR.rfd
insurance settlement agreement did not enumerate what part of the
$100,000 covered special damages and what part covered general
damages, instead purporting to be a release from all liability.
Each of T.K.'s three adult children received one-third of the
insurance settlement.
¶64 In October 2016 Muth pled no contest to one count of
homicide by intoxicated use of a vehicle as a second offense.
Shortly thereafter, T.K.'s three adult children and T.K.'s brother
sought restitution. Muth objected to the adult children's
restitution request because of the insurance settlement agreement
that they had signed.2
¶65 The circuit court held a hearing in February 2017 and
heard testimony from T.K.'s three adult children and the spouses
of the two adult daughters. Of import to this appeal, T.K.'s two
adult daughters, H.M. and K.M., sought their spouses' lost wages
related to T.K.'s death. H.M.'s husband missed 104 hours of work,
where he earned $25 per hour, totaling $2,600. K.M.'s husband
missed 54 hours of work, where he earned $120 per hour, totaling
$6,480. In K.M.'s household, her spouse was the sole source of
income. K.M. described the lost wages as follows:
those wages were claimed [] because our husbands were
there for support for us. And for my sister and myself,
our husbands are the primary income in the family. I
don't even work outside the home, so I would like to
companionship on account of or in any way growing out
of, any and all known and unknown personal injuries and
damages resulting from an automobile accident . . . .
2 The circuit court's restitution order included an amount
for T.K.'s brother, which was not challenged on appeal. T.K.'s
brother was not a party to the insurance settlement agreement.
2
No. 2018AP875-CR.rfd
kind of consider those because that's [] we lost income
that day regardless of whether it was my husband or
myself that worked.
K.M.'s husband's lost wages were also referred to as work "he
miss[ed] in order to fulfill obligations associated with [T.K.'s]
death."
¶66 The circuit court set restitution for the adult children
in the amount of $34,869.42. The restitution amount included an
award to H.M. and K.M. for their spouses' lost wages.
¶67 The circuit court gave Muth "an opportunity to submit a
brief on the issues related to restitution." Muth subsequently
filed a motion raising the defenses of accord and satisfaction and
setoff, and asserting that the adult daughters could not recover
their spouses' lost wages because the spouses were not "victims"
under Wis. Stat. § 950.02. The State filed a letter in March 2017
objecting to Muth's motion only as to K.M. The State asserted
that because Wisconsin is a marital property state and K.M.'s
husband is the sole provider for the family, "lost wages for Mr.
M[.] are lost wages for" K.M. The State filed a second letter
with the court in June 2017 explaining its position on setoff and
accord and satisfaction, and concluded with: "it is the State's
position that [H.M.] and [K.M.] are entitled to the loss of value
to their respective household."
¶68 At a July 2017 hearing, the circuit court upheld its
restitution order. As to Muth's setoff defense, the circuit court
explained that the civil insurance settlement was "quite broad"
and was "a release for both special damages and general damages."
The circuit court found that H.M. and K.M. suffered both special
and general damages and concluded that Muth did not present
3
No. 2018AP875-CR.rfd
"evidence or testimony that particular amounts of the settlement
-– the $100,000 settlement were for general damages and other
specific amounts were for special damages." Therefore, the circuit
court concluded that Muth had failed to meet his burden in proving
his setoff defense. Relying on Walters, 224 Wis. 2d 897, the
circuit court also concluded that the defense of accord and
satisfaction did not preclude a restitution order in a criminal
proceeding. Therefore, the circuit court concluded that neither
of Muth's defenses should be applied to reduce the restitution
amount set at the February 2017 hearing.
¶69 The circuit court also rejected Muth's argument that
because only K.M. and H.M. were "victims" under the statute, the
lost wages of their spouses could not be recovered as restitution.
The court reasoned:
Wisconsin is a marital property state. Income from a
spouse is a marital asset. Loss of wages to the husband
is a loss of a marital asset. If it damages him, it
damages her. So I find that it is appropriate to include
spouse's lost wages in the special damages in a
restitution order.
¶70 The court of appeals affirmed the circuit court's
conclusion regarding setoff but did not address Muth's accord and
satisfaction defense. State v. Muth, No. 2018AP875-CR,
unpublished slip. op., ¶¶13-22 (Wis. Ct. App. June 6, 2019) (per
curiam). The court of appeals reversed the circuit court's award
of restitution for lost wages of the victims' spouses, citing State
v. Johnson, 2002 WI App 166, 256 Wis. 2d 871, 649 N.W.2d 284. Id.,
¶¶23-28. Muth and the State both petitioned this court for review,
which the court granted.
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No. 2018AP875-CR.rfd
¶71 The lead opinion concludes that Muth failed to meet his
burden in presenting the defenses of accord and satisfaction and
setoff, and that the circuit court properly awarded restitution
for lost wages of the victims' spouses. Although I agree with
these conclusions, I take issue with the lead opinion's explanation
of how the defense of accord and satisfaction applies in the
context of restitution and the rationale upholding the award of
the spouses' lost wages as restitution.
I. ACCORD AND SATISFACTION
¶72 Our statute on criminal restitution, Wis. Stat.
§ 973.20, says "the court . . . shall order the defendant to make
full or partial restitution . . . to any victim of a crime[.]"
§ 973.20(1r). The circuit court has broad power to order
restitution pursuant to § 973.20. Criminal restitution serves not
only to make a victim whole, but also serves penal and
rehabilitative purposes. See State v. Sweat, 208 Wis. 2d 409,
422, 561 N.W.2d 695 (1997) ("Restitution serves a dual purpose,
making the victim whole and rehabilitating the defendant.").
¶73 Pursuant to Wis. Stat. § 973.20(14)(b), a defendant in
a restitution proceeding may "assert any defense that he or she
could raise in a civil action for the loss sought to be
compensated." As our case law makes clear, "any defense" includes
the defense of accord and satisfaction. See Huml v. Vlazny, 2006
WI 87, ¶37, 293 Wis. 2d 169, 716 N.W.2d 807; Sweat, 208 Wis. 2d at
424. Accord and satisfaction is defined as "[a]n agreement to
substitute for an existing debt some alternative form of
discharging that debt, coupled with the actual discharge of the
5
No. 2018AP875-CR.rfd
debt by the substituted performance." Accord and Satisfaction,
Black's Law Dictionary (11th ed. 2019).
¶74 A defendant on supervision may successfully assert
accord and satisfaction as a defense to restitution if he or she
can show that a restitution order will result in the victim
obtaining double recovery. Huml, 293 Wis. 2d 169, ¶37.3 In other
words, a defendant must not only prove that there was an agreement
to discharge a debt, but also the actual discharge of the debt by
the substituted performance, such that recovery in a restitution
proceeding would result in a victim receiving double recovery.4
¶75 In this case, Muth did not prove the defense of accord
and satisfaction because he did not show that the entry of
restitution would result in T.K.'s adult children receiving double
3Alternatively, a defendant may successfully prove accord
and satisfaction to discharge an unpaid restitution order that has
been reduced to a civil judgment after supervision of the defendant
in the criminal case has been terminated. Huml v. Vlazny, 2006 WI
87, ¶44, 293 Wis. 2d 169, 716 N.W.2d 807. This is because the
termination of supervision "signals the state's disavowal of any
penal or rehabilitative interests" leaving only a civil debt. Id.
4Contrary to Justice Hagedorn's dissent, merely producing an
insurance settlement agreement at a restitution hearing without
proof that an order of restitution will result in double recovery
to the victim is not enough to prove accord and satisfaction. See
Justice Hagedorn's dissent, ¶131.
The defense of accord and satisfaction typically serves a
civil litigant's interest in an efficient resolution to a civil
dispute, but there are other interests involved in a criminal
proceeding for restitution. See State v. Walters, 224 Wis. 2d 897,
904, 591 N.W.2d 874 (Ct. App. 1999). In addition to seeking to
make the victim whole for special damages sustained, restitution
also serves the purposes of punishment and rehabilitation of the
defendant. See State v. Sweat, 208 Wis. 2d 409, 422, 561
N.W.2d 695 (1997).
6
No. 2018AP875-CR.rfd
recovery. The $100,000 insurance settlement agreement, divided
into $33,333.33 for each of T.K.'s adult children, covered both
special and general damages, and used broad, vague terms like
"costs," "expenses," and "lost wages." There is no evidence that
the losses compensated by the restitution granted to T.K.'s adult
children had already been satisfied by payment from the insurance
settlement. Muth ultimately provided no evidence to the circuit
court that the $34,869.42 awarded to the adult children as
restitution would result in them receiving double recovery for
those special damages as a result of the money paid by the
insurance settlement. See Huml, 293 Wis. 2d 169, ¶37.
¶76 I also write to draw attention to the confusion caused
by the lead opinion in its analysis of accord and satisfaction.
For example, the lead opinion relies upon extrinsic evidence
regarding what T.K.'s daughter and her husband believed the
insurance settlement agreement covered. See lead op., ¶36.
However, this extrinsic evidence regarding the parties' subjective
understanding of the insurance settlement agreement is irrelevant
to establishing the defense of accord and satisfaction which "does
not . . . require mental assent or a 'meeting of the minds.'"
Hoffman v. Ralston Purina Co., 86 Wis. 2d 445, 454, 273 N.W.2d 214
(1979).
¶77 Additionally, as Justice Hagedorn observes in his
dissent, the lead opinion "cites and quotes Walters, but never
acknowledges its inconsistency with our cases and the statute
itself." Justice Hagedorn's dissent, ¶128 n.5. The lead opinion
never addresses the circuit court's broad conclusion, based on the
7
No. 2018AP875-CR.rfd
language in Walters, that civil defenses "which could be used as
a complete bar to liability in a subsequent civil action," like
accord and satisfaction, "do not preclude a restitution order in
a criminal proceeding." See Walters, 224 Wis. 2d at 904-05. The
lead opinion affirms this statement, directly at odds with our
language in Sweat and Huml, by repeating that "in regard to accord
and satisfaction, Walters concluded that it could not be a bar to
liability for restitution." Lead op., ¶28. The confusion lies in
the use of the term "liability" which originated in Sweat, was
cited to in Walters, and now is perpetuated by the lead opinion.
The language of Wis. Stat. § 973.20(14)(b), however, does not speak
in terms of "liability" but rather in terms of "the loss sought to
be compensated." When read in the context of the plain language
of the statute, a settlement agreement may operate to prevent a
circuit court from ordering restitution for the loss sought to be
compensated. Huml, 293 Wis. 2d 169, ¶37.
¶78 To the extent that Walters has been interpreted to mean
that the defense of accord and satisfaction can never prevent a
circuit court from ordering restitution to compensate a victim for
a loss caused by the defendant, that interpretation cannot stand.
See Walters, 224 Wis. 2d at 904-05. As discussed above, the
defense of accord and satisfaction is a defense to a circuit
court's order of restitution when a defendant successfully proves
that as a result of money received pursuant to a settlement
agreement, the restitution order will result in double recovery to
the victim. Ultimately, Muth failed to meet that burden here.
II. THE SPOUSES' LOST WAGES
8
No. 2018AP875-CR.rfd
¶79 Next, I address the appropriate framework in which to
analyze the circuit court's award of restitution for lost wages of
the victims' spouses. A restitution order involves a discretionary
decision of the circuit court. State v. Wiskerchen, 2019 WI 1,
¶18, 385 Wis. 2d 120, 921 N.W.2d 730. This court will reverse a
circuit court's discretionary decision "only if the trial court
applied the wrong legal standard or did not ground its decision on
a logical interpretation of the facts." Id. (quoting State v.
Behnke, 203 Wis. 2d 43, 58, 553 N.W.2d 265 (Ct. App. 1996)). "We
look for reasons to sustain a trial court's discretionary
decision." Farmers Auto. Ins. Ass'n v. Union Pac. Ry. Co., 2009
WI 73, ¶32, 319 Wis. 2d 52, 768 N.W.2d 596.
¶80 The lead opinion unnecessarily delves into an analysis
of marital property law regarding ownership of a spouse's lost
wages and concludes that T.K.'s adult daughters are entitled to
recovery of those wages pursuant to Wis. Stat. § 973.20(5)(a).
However, regardless of the outcome of a marital property analysis,
lost wages of a spouse are not recoverable as restitution under
subsection (5)(a).
¶81 Subsection (5)(a) provides that a restitution order may
require a defendant to "[p]ay all special damages, but not general
damages, substantiated by evidence in the record, which could be
recovered in a civil action against the defendant for his or her
conduct in the commission of a crime considered at sentencing."
Restitution ordered pursuant to this subsection is limited to the
type of special damages T.K.'s adult children could recover in a
civil action against Muth for his conduct in colliding with T.K.'s
9
No. 2018AP875-CR.rfd
car causing her death. The lead opinion fails to point to any
wrongful death case in Wisconsin that allows a family member of
the deceased to recover their own lost wages, let alone the wages
of that family member's spouses. Wisconsin's wrongful death
statute permits the recovery of the deceased person's lost wages,
not the lost wages of the deceased person's family members.5
Accordingly, the lead opinion's assertion that T.K.'s adult
daughters could have recovered their husbands' lost wages "in a
civil action against the defendant for his or her conduct in the
commission of a crime considered at sentencing," is
unsubstantiated, and the resulting restitution order cannot be
upheld under § 973.20(5)(a).6
5 One of Wisconsin's wrongful death statutes provides in part:
Judgment for damages for pecuniary injury from wrongful
death may be awarded to any person entitled to bring a
wrongful death action. Additional damages not to exceed
$500,000 per occurrence in the case of a deceased minor,
or $350,000 per occurrence in the case of a deceased
adult, for loss of society and companionship may be
awarded to the spouse, children or parents of the
deceased, or to the siblings of the deceased, if the
siblings were minors at the time of the death.
Wis. Stat. § 895.04(4). Although general damages for loss of
society and companionship are recoverable under § 895.04(4),
general damages are not recoverable pursuant to the language of
Wis. Stat. § 973.20(5)(a).
6Wisconsin Stat. § 973.20(5)(b) allows recovery of lost wages
and out of pocket expenses that resulted "from the filing of
charges or cooperating in the investigation and prosecution of the
crime." However, the lead opinion does not analyze the restitution
award under subsection (5)(b), despite the State's reliance on
this section, likely in an effort to avoid overruling State v.
Johnson, 2002 WI App 166, 256 Wis. 2d 871, 649 N.W.2d 284.
10
No. 2018AP875-CR.rfd
¶82 The lead opinion creates further confusion by refusing
to withdraw contradictory language in Johnson, 256 Wis. 2d 871,
which the court of appeals in this case relied upon. See Muth,
No. 2018AP875-CR, ¶¶26-28, ¶27 n.4. In reversing the circuit
court's grant of restitution for lost wages, the court of appeals
felt bound by the following language in Johnson:
The circuit court held that W.L.'s lost wages were
tantamount to a victim's lost wages or property due to
the operation of Wisconsin's marital property laws. The
State mentions, but does not develop this argument on
appeal. Additionally, because there is no language in
the restitution statute or in Wis. Stat. § 950.02(4)(a)
suggesting that restitution be permitted through such an
indirect route, we conclude that the restitution statute
intended to limit the recovery of lost wages for
attending court proceedings to the persons identified in
Wis. Stat. § 973.20(5)(b).
Johnson, 256 Wis. 2d 871, ¶23 (emphasis added); see Muth, No.
2018AP875-CR, ¶26. Instead of simply withdrawing the
contradictory language in Johnson as to an undeveloped argument,
the lead opinion attempts to distinguish Johnson by declaring that
the restitution order in this case falls under Wis. Stat.
§ 973.20(5)(a). As discussed above, this attempt fails. I would
withdraw the final sentence of paragraph 23 in Johnson for the
sake of clarity and to dispel any confusion moving forward.
¶83 Rather than wading into the unnecessary waters of
marital property law, I would uphold the circuit court's award of
restitution for the spouses' lost wages on the ground that the
circuit court properly exercised its discretion under Wis. Stat.
§ 973.20(13)(a)5. This court has repeatedly affirmed that a broad
reading of the restitution statute is necessary in light of the
important public policy behind the statute. Section 973.20
11
No. 2018AP875-CR.rfd
"reflects a strong equitable public policy that victims should not
have to bear the burden of losses if the defendant is capable of
making restitution," and that "restitution is the rule and not the
exception." Wiskerchen, 385 Wis. 2d 120, ¶22 (quoted source
omitted). Since the primary purpose of restitution is to
compensate victims, courts are required to construe § 973.20
"broadly and liberally in order to allow victims to recover their
losses as a result of a defendant's criminal conduct." State v.
Madlock, 230 Wis. 2d 324, 332, 602 N.W.2d 104 (Ct. App. 1999)
(quoted source omitted).
¶84 Wisconsin Stat. § 973.20(13)(a) authorizes the circuit
court to consider five factors to determine whether to order
restitution and the appropriate restitution amount. Subdivision
5 gives the circuit court the discretion to consider "[a]ny other
factors which the court deems appropriate." § 973.20(13)(a)5.
Admittedly, the circuit court's decision invoked marital property
law. But, the record also reflects that the circuit court awarded
T.K.'s adult daughters their spouses' lost wages because neither
daughter worked full time and the circuit court considered the
spouses' lost wages as a loss of the household. The circuit court
heard testimony that the lost wages were incurred in supporting
their wives and "fulfill[ing] obligations associated with [T.K.'s]
death."
¶85 I conclude that the circuit court did not erroneously
exercise its discretion in viewing the spouses' lost wages as lost
household income and that it made a reasonable determination to
include these amounts in the restitution award. These lost wages
12
No. 2018AP875-CR.rfd
were a damage to T.K.'s daughters that occurred solely as a result
of Muth's criminal conduct; the circuit court did not erroneously
exercise its discretion in awarding the lost wages under the broad
grant of authority given in Wis. Stat. § 973.20(13)(a)5.7
¶86 For the foregoing reasons, I respectfully concur.
¶87 I am authorized to state that Justices ANN WALSH BRADLEY
and REBECCA GRASSL BRADLEY join this concurrence and that Justice
ZIEGLER joins ¶¶63-70 and ¶¶72-78 of this concurrence.
7 This concurrence should not be read as giving circuit courts
boundless discretion to order restitution relying solely on Wis.
Stat. § 973.20(13)(a)5. Rather, a circuit court ordering
restitution must do so consistently with § 973.20 as a whole. In
this case, the circuit court did not erroneously exercise its
discretion when it viewed the spouses' lost wages as a household
loss and included these amounts in the restitution award.
13
No. 2018AP875.dk
¶88 DANIEL KELLY, J. (concurring in part, dissenting in
part). I agree that Wis. Stat. § 973.20 allows victims to pursue
their spouses' lost income as restitution in a criminal case
because it qualifies as marital property, and so I join parts
II.A., II.B., and II.D. of Chief Justice Roggensack's opinion.
But the same statute that allows victims to pursue restitution
says their claims are subject to "any defense that [the defendant]
could raise in a civil action for the loss sought to be
compensated." § 973.20(14)(b). Because K.M. and H.M. (the victims
in this case) settled their claims against Mr. Muth,1 he could have
successfully raised the defense of "accord and satisfaction"2 if
they had pursued their claims in a civil action. The statute,
therefore, says he may raise that defense here. Therefore, I
dissent from the court's mandate that he may not.
I. REMEDIES, CAUSES OF ACTION, AND THEIR OWNERS
¶89 A majority of this court says "accord and satisfaction"
is not included in the category defined as "any defense that [the
defendant] could raise in a civil action for the loss sought to be
compensated." This is so, the Chief Justice says, because
"[r]estitution is not a cause of action but a sanction for criminal
conduct owned by the State." Lead op., ¶2. Therefore, according
1 H.M and K.M sought restitution from Mr. Muth in the amount
of $2,600 and $6,480 respectively specifically for their husbands'
lost wages.
2 Flambeau Prod. Corp. v. Honeywell Info. Sys., Inc., 116
Wis. 2d 95, 112, 341 N.W.2d 655 (1984) ("An 'accord and
satisfaction' is an agreement to discharge an existing disputed
claim; it constitutes a defense to an action to enforce the claim."
(citation omitted)).
1
No. 2018AP875.dk
to a majority of the court, accord and satisfaction is not an
available defense because victims cannot release the defendant
from whatever it is the state is doing when it imposes a
restitution order. Whether that is true depends on the
relationship between restitution, causes of action, and those who
own them. Once we know who owns the causes of action, we will
also know who may release them and, consequently, whether Mr. Muth
may raise accord and satisfaction as a defense in this case.
¶90 Let's start with the nature of restitution. The Chief
Justice says it's not a cause of action, and that's certainly true.
It's a remedy. Great-W. Life & Annuity Ins. Co. v. Knudson, 534
U.S. 204, 213 (2002) ("'[R]estitution is a legal remedy when
ordered in a case at law and an equitable remedy . . . when ordered
in an equity case,' and whether it is legal or equitable depends
on 'the basis for [the plaintiff's] claim' and the nature of the
underlying remedies sought." (citation omitted, ellipses and
insertions in original)); Harris v. Metro. Mall, 112 Wis. 2d 487,
496, 334 N.W.2d 519 (1983) ("The remedy of restitution is not
limited to rescission cases."); Wisconsin Mut. Plate Glass Ins.
Co. v. Guaranteed Bond Co., 218 Wis. 197, 202, 260 N.W. 484 (1935)
("The purpose of restitution as a remedy for breach is the
restoration of the status quo ante as far as is practicable.").
¶91 Understanding that restitution is a remedy is critical
because a remedy is simply the mechanism by which to operationalize
a cause of action, and whoever owns the cause of action may release
it. "A cause of action is distinguished from a remedy which is
the means or method whereby the cause of action is effectuated."
2
No. 2018AP875.dk
Goetz v. State Farm Mut. Auto Ins. Co., 31 Wis. 2d 267, 273, 142
N.W.2d 804 (1966) (citation omitted); Tikalsky v. Friedman, 2019
WI 56, ¶15, 386 Wis. 2d 757, 928 N.W.2d 502, reconsideration
denied, 2019 WI 89, 388 Wis. 2d 656, 933 N.W.2d 32; Wussow v.
Commercial Mechanisms, Inc., 97 Wis. 2d 136, 146, 293 N.W.2d 897
(1980) ("[T]he remedy or relief sought should not be confused with
the concept of cause of action. Whether compensatory damages,
special damages, or punitive damages are sought as a matter of
remedy or relief is immaterial to the cause of action itself.").
¶92 Just as there is no remedy without a cause of action,
there is no cause of action without an owner. See, e.g., Rural
Mut. Ins. Co. v. Lester Buildings, LLC, 2019 WI 70, ¶13, 387
Wis. 2d 414, 929 N.W.2d 180, reconsideration denied, 2019 WI 98,
389 Wis. 2d 34, 935 N.W.2d 681 ("'[T]ort liability' is the legal
obligation or responsibility to another resulting from a civil
wrong or injury for which a remedy may be obtained."); Id., ¶32,
(Kelly, J., dissenting) ("The one with the right to a remedy is
the one to whom the legal obligation is owed."); Traeger v.
Sperberg, 256 Wis. 330, 333, 41 N.W.2d 214 (1950) ("The general
rule followed in Wisconsin is that in an action for conversion the
plaintiff may recover the value of the property at the time of the
conversion plus interest to the date of the trial. However, it is
universally recognized that the purpose of this rule is to
compensate the plaintiff for the loss sustained because his
property was taken." (citations omitted)); Venegas v. Mitchell,
495 U.S. 82, 88 (1990) ("A cause of action under § 1983 belongs
'to the injured individua[l.]'" (alteration in original)); see
3
No. 2018AP875.dk
also Pritzlaff v. Archdiocese of Milwaukee, 194 Wis. 2d 302, 315,
533 N.W.2d 780 (1995) ("A party has a present right to enforce a
claim when the plaintiff has suffered actual damage, defined as
harm that has already occurred or is reasonably certain to occur
in the future."); Schultz v. Vick, 10 Wis. 2d 171, 174–75, 102
N.W.2d 272 (1960) ("The plaintiffs' cause of action arose when the
collision[, the injury,] took place. The substantive rights of
the parties came into being at that time."); Johnson v. Winstead,
900 F.3d 428, 434 (7th Cir. 2018), cert. denied, 139 S. Ct. 2776
(2019) (quoting Wallace v. Kato, 549 U.S. 384, 391 (2007) ("[T]he
traditional common-law rule [is] that a 'tort cause of action
accrues . . . when the wrongful act or omission results in
damages.'").3
¶93 So, if restitution is a remedy, and remedies
operationalize causes of action, and causes of action belong to
someone, then the real work of the court was to identify the owner
of the cause of action for which restitution was sought in this
case, which would necessarily identify who has the authority to
release the claim. If it is the state, then the lead opinion's
3 The rule that causes of action belong to the persons wronged
also shows up when we consider who has standing to pursue the
cause. See, e.g., Krier v. Vilione, 2009 WI 45, ¶20, 317
Wis. 2d 288, 766 N.W.2d 517 ("'Standing' is a concept that
restricts access to judicial remedy to those who have suffered
some injury because of something that someone else has either done
or not done." (quoted source omitted)); Marx v. Morris, 2019 WI 34,
¶75, 386 Wis. 2d 122, 925 N.W.2d 112 (Kelly, J., concurring in
part, dissenting in part) reconsideration denied, 2019 WI 84, 388
Wis. 2d 652, 931 N.W.2d 538 ("A person has standing, and therefore
owns a cause of action, only if he has been injured (or threatened
with injury)[.]" (emphasis added; citations omitted)).
4
No. 2018AP875.dk
conclusion that the victims may not release Mr. Muth from his
restitution obligation is correct. But it also would mean (as I
explain below) that Wis. Stat. § 973.20(14)(b) would apply only
when the state is the victim. On the other hand, if the victims
own the cause of action that restitution is supposed to effectuate,
then there is nothing to prevent them from releasing those claims,
which would mean Mr. Muth could raise accord and satisfaction as
a defense.
II. WHO MAY SETTLE CAUSES OF ACTION?
¶94 There are two alternative paradigms by which to
understand what Wis. Stat. § 973.20 says about who may release a
cause of action remediable by restitution, each of which I will
address in turn. The first requires that we dismantle the
relationship between remedies, causes of action, and their owners.
The second leaves the traditional relationship between those
concepts intact, and applies the simple language of the statute.
For the following reasons I think our responsibility is to follow
the latter even if we prefer the policy results of the former.
A. The Separation of Victims From Their Causes of Action
¶95 The Chief Justice says restitution is a "sanction for
criminal conduct owned by the State." Lead op., ¶2. The statute,
however, does not say this; the idea is, instead, the culmination
of a line of cases in which we allowed the statute's goals to
smother its actual text. We started down this path in State v.
Sweat, 208 Wis. 2d 409, 561 N.W.2d 695 (1997), where we considered
whether the "any defense" language meant that the defendant could
assert a civil statute of limitations. After consulting the
5
No. 2018AP875.dk
legislative history and purpose of Wis. Stat. § 973.20, we
concluded that the phrase "any defense" was ambiguous. Sweat, 208
Wis. 2d at 417. So we said "any defense" meant only those that
relate to the amount of restitution, but not those comprising
procedural bars. Id. at 418. The statute doesn't make this
distinction, but we figured it was good policy because it would
"serve[] the goals of the criminal justice system." Id. at 422.
¶96 The court of appeals took up our theme and extended it
in State v. Walters, 224 Wis. 2d 897, 591 N.W.2d 874 (Ct. App.
1999). The Walters court observed that "restitution serves the
purposes of punishment and rehabilitation of the defendant, while
seeking to make the victim of criminal acts whole in regard to the
special damages sustained." Id. at 904. To this it added its
interpretation of our Sweat decision: "The basic premise that
drives the decision in Sweat is that restitution in criminal cases
is not a claim which a defendant owns, as a civil claim is. It is
a remedy that belongs to the State." Id. But Sweat doesn't say
that, nor does it conceptually support such a statement. In fact,
Sweat doesn't mention the concept of ownership at all, much less
as a driving premise. By the time Walters reached its conclusion,
however, the claim definitively belonged to the state: "Because
restitution is not a claim belonging to the victim which he or she
can release, the settlement for [the victim's] claims arising out
of the accident was not an absolute bar to the circuit court's
consideration of restitution in this criminal case." 224
Wis. 2d at 909.
6
No. 2018AP875.dk
¶97 This issue came back to us in Huml v. Vlazny, 2006 WI 87,
¶44, 293 Wis. 2d 169, 716 N.W.2d 807, in which we said that "[i]t
is true that restitution in a criminal case is a remedy that
belongs to the state, not to the victim." (citing Walters, 224
Wis. 2d at 904). We provided no analysis to support that
statement, and the only authority we cited was Walters, which based
that proposition on something we didn't say in Sweat.4 So much
for the principle's provenance. Now to assess its effect.
¶98 If this truly is what the statute says, then Wis. Stat.
§ 973.20(14)(b) would have no application at all except when the
state itself is the victim. This is true because § 973.20 does
nothing to break the linkage between remedies and causes of action,
or between causes of action and their owners. Therefore, the
assertion that "restitution in a criminal case is a remedy that
4 The lead opinion refers to federal cases interpreting the
Mandatory Victims Restitution Act (18 U.S.C. § 3664A) ("MVRA") to
support the proposition that restitution is a criminal sanction as
opposed to a civil remedy. The MVRA does contain language similar
to Wis. Stat. § 973.20, although it is not the same in at least
one key respect——it contains no provision that the defendant may
raise civil defenses against the victim's restitution claim in the
criminal proceedings. While some federal courts interpret the
MVRA as imposing a criminal sanction, see United States v.
Williams, 128 F.3d 1239, 1241 (8th Cir. 1997), others (such as the
7th Circuit Court of Appeals) reject this idea. See United States
v. Newman, 144 F.3d 531, 537 (7th Cir. 1998).
The Newman court characterized the Williams' analysis as
"fundamentally flawed" and flatly stated that "[r]estitution is
not 'punishment' within the meaning of the Ex Post Facto Clause."
Id. at 538–39. So although there is some similarity between our
restitution statute and the MVRA, analogizing to a federal statute
regarding which there is a split amongst the circuits is probably
not the most persuasive source of reasoning. However, for those
interested in judging which of the circuits has the more compelling
argument, Newman will reward your time well.
7
No. 2018AP875.dk
belongs to the state," lead op, ¶21 (quoting Huml, 293 Wis. 2d 169,
¶44), can only be true if the cause of action it operationalizes
also belongs to the state (because a remedy is inextricably tied
to the cause of action it is effectuating). As noted above,
restitution is "the restoration of the status quo ante as far as
is practicable," Wisconsin Mut., 218 Wis. at 202, so the person
for whom it has its restoring effects must have been injured by an
adverse change in that status. It is only that person who can
have a cause of action for which restitution is an available
remedy. This means that restitution can only belong to the state
if the state suffered an adverse change in status. The natural
consequence, therefore, would be that § 973.20 allows restitution
only when the state is the victim. The other consequence is that
what the Chief Justice says about the remedy is internally
contradictory: "[R]estitution in a criminal case is a remedy that
belongs to the state, not to the victim." Lead op, ¶21 (quoting
Huml, 293 Wis. 2d 169, ¶44). The first clause means that
restitution is available only when the state is the victim (because
of the necessary remedy-claim-owner nexus), while the second
clause says the state may not have restitution because restitution
does not belong to the victim (the state). There is no squaring
that circle.
¶99 The Chief Justice, of course, does not believe
restitution is available only when the state is the victim. But
the only way she can maintain her position that restitution
"belongs to the state" and that victims other than the state are
eligible for restitution is to break the remedy-claim-owner nexus.
8
No. 2018AP875.dk
That is to say, that paradigm won't work unless we believe that
Wis. Stat. § 973.20 says a remedy can belong to someone who has
not been injured (the state), thereby wresting its control from
the cause of action's owner (the victim). And further, we must
believe that the statute says the victim may not release the cause
of action that restitution is supposed to vindicate so that the
state may use the remedy for its own purposes. Thankfully, this
bizarre relationship between remedies, claims, and owners appears
to be entirely unique to our § 973.20 jurisprudence.
¶100 Let's remember, for a moment, why we contorted the
otherwise uncontroversial relationship between these legal
concepts. We are trying to decide whether "accord and
satisfaction" is part of the category "any defense that he or she
could raise in a civil action for the loss sought to be
compensated." Wis. Stat. § 973.20(14)(b). Accord and
satisfaction is, quite obviously, a defense Mr. Muth could
successfully raise in a civil action against the losses for which
the victims seek compensation in this case. So we had to figure
out why "any defense" cannot include this defense. The only way
we could accomplish that was to separate the victims from their
remedies (and, in consequence, their causes of action), and turn
them over to the state for safekeeping, thereby preventing victims
from settling their claims on terms not approved by the state.5
5 This, the lead opinion says, is desirable because: (1)it
makes the victim whole; (2) it rehabilitates the offender; and (3)
it deters criminal conduct. See lead op., ¶2. I agree that these
are desirable benefits. I just don't believe we can let them
dictate what the statute actually says.
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The statute's natural reading, however, doesn't support any of
that.6
B. Restitution Belongs To The Victim
¶101 Everything the statute says about restitution is
consistent with our traditional understanding of the remedy-claim-
owner nexus. In fact, its salient command is a reaffirmation of
that linkage:
When imposing sentence or ordering probation for any
crime . . . for which the defendant was convicted, the
court, in addition to any other penalty authorized by
law, shall order the defendant to make full or partial
restitution under this section to any victim of a crime
considered at sentencing or, if the victim is deceased,
to his or her estate, unless the court finds substantial
reason not to do so and states the reason on the record.
Wis. Stat. § 973.20(1r) (emphasis added). A "victim," within the
meaning of the statute is "[a] person against whom a crime has
6 The lead opinion points out that there are circumstances in
which the defense of "accord and satisfaction" could be available
to the defendant——just not in the Wis. Stat. § 973.20 restitution
hearing. It reminds us that, in Huml v. Vlazny, we considered a
victim's interest in settling a restitution claim that had been
reduced to a civil judgment. We said there, and the Chief Justice
repeats here, that "there is considerable value in permitting a
victim to release her interest in a judgment derived from a
restitution order because it allows the victim to settle the case
and replace an uncertain, future recovery with a certain, immediate
recovery." Lead op., ¶40 (quoting Huml, 293 Wis. 2d 169, ¶44).
That's true. But there's no reason this is not just as true prior
to the restitution hearing as after. In any event, whether the
defense of accord and satisfaction is available and useful after
the restitution hearing says nothing about whether it is a defense
in the category of "any defenses" that the defendant may raise at
the restitution hearing pursuant to § 973.20(14)(b).
10
No. 2018AP875.dk
been committed." Wis. Stat. § 950.02(4)(a)1.7 The victim is,
therefore, the injured person, and the statute directs restitution
to that person. This is our classic remedy-claim-owner
formulation.
¶102 The balance of the statute confirms that this is the
operative relationship. At the sentencing hearing, the court must
inquire into the amount of restitution the victim seeks——the
victim, not the state. Wis. Stat. § 973.20(13)(c) ("The
court . . . shall inquire of the district attorney regarding the
amount of restitution, if any, that the victim claims." (emphasis
added)). The lead opinion does not inquire into the amount the
state believes will be effective in rehabilitating the defendant
or deterring future criminal conduct. It asks the measure of the
victim's injury because restitution effectuates the victim's
claim. The statute also places the onus on victims to prove the
amount of restitution owed to them. § 973.20(14)(a) ("The burden
of demonstrating by the preponderance of the evidence the amount
of loss sustained by a victim as a result of a crime considered at
sentencing is on the victim. The district attorney is not required
to represent any victim unless the hearing is held at or prior to
the sentencing proceeding or the court so orders." (emphasis
added)). But if restitution is a "sanction for criminal conduct
owned by the State," lead op., ¶2, why is it the victim's
responsibility to prove how much sanction the state ought to levy
against the defendant? Why would the district attorney ever have
7 Under certain circumstances, a "victim" can also be someone
who acts on behalf of the person against whom the crime was
committed. See Wis. Stat. § 950.02(4)(a)2.-3.
11
No. 2018AP875.dk
need to represent the victim if the remedy/claim belongs to the
state? The only answer is that restitution is not a sanction, but
is instead a remedy for a cause of action owned by the victim.
This is in accord with our recognition, just last term, that "[t]he
primary purpose of Wis. Stat. § 973.20 is to compensate the
victim." State v. Wiskerchen, 2019 WI 1, ¶22, 385 Wis. 2d 120,
921 N.W.2d 730 (citation omitted); see also State v. Storlie, 2002
WI App 163, ¶8, 256 Wis. 2d 500, 647 N.W.2d 926 ("We construe Wis.
Stat. § 973.20 broadly to allow victims to recover their losses as
a result of a defendant's criminal conduct."). There may be
pedagogical and deterrent effects as well, but they are the subtext
to the statute's textual purpose of creating a process within a
criminal proceeding by which victims can recover what they would
otherwise have to pursue in a civil case. Subtext should remain
where it is, to wit, subordinate to the actual text.
¶103 The objective shared between the victims' civil actions
and restitution proceedings in criminal cases is the key to making
sense of Wis. Stat. § 973.20(14)(b). Defendants may raise civil
defenses to victims' restitution claims precisely because both are
aimed at the same objective: obtaining recovery for what the
victim lost due to the defendants' crimes. If restitution is,
instead, a "sanction," or "analogous to a fine," lead op., ¶¶2,
31, as the Chief Justice says, allowing defendants to raise civil
defenses would be pointless because there are no civil defenses to
sanctions or fines. This would also cross wires with respect to
the person against whom the defendant may assert the defense. How
does a defendant assert against the state a defense he has against
12
No. 2018AP875.dk
the victim? It would be senseless to use a defense to a victim's
civil case against the state's attempt to impose a sanction or a
fine-analog because the plaintiff is not the same.8
¶104 All of the statutory pieces line up, without one out of
place, if we preserve the traditional remedy-claim-owner nexus.
The defendant commits a crime against a victim, which gives rise
to a cause of action belonging to the injured victim, not the
state. The statute provides an avenue by which the victim, not
the state, may pursue a remedy, which effectuates the victim's
claim. Wis. Stat. § 973.20(1r) ("[T]he court . . . shall order
the defendant to make full or partial restitution under this
section to any victim of a crime considered at sentencing[.]").
The responsibility for proving the amount of restitution owed
belongs to the victim, not the state. § 973.20(14)(a) ("The burden
of demonstrating by the preponderance of the evidence the amount
of loss sustained by a victim as a result of a crime considered at
sentencing is on the victim."). The amount of restitution may be
affected by how much the defendant has already paid the victim.
§ 973.20(8) ("Any restitution made by payment or community service
shall be set off against any judgment in favor of the victim in a
8 The lead opinion's characterization of restitution as a
sanction or fine-analog is also difficult to square with the
statutorily-imposed effect it has on a subsequent civil action:
"Any restitution made by payment or community service shall be set
off against any judgment in favor of the victim in a civil action
arising out of the facts or events which were the basis for the
restitution." Wis. Stat. § 973.20(8). If restitution is a
sanction/fine belonging to the state, there is no discernible
reason for reducing the victim's judgment in a subsequent civil
action against the criminal defendant. But if restitution belongs
to the victim, this makes perfect sense.
13
No. 2018AP875.dk
civil action arising out of the facts or events which were the
basis for the restitution."); see also Huml, 293 Wis. 2d 169, ¶22
("[B]efore a circuit court reduces any unpaid restitution to a
civil judgment, the probationer may prove that the victim has
already recovered damages from him that are the same as the damages
covered by the restitution order. [Wis. Stat.] § 973.09(3)(b).").
And the restitution award goes to the victim, not the state.
§ 973.20(1r). All of this establishes that § 973.20 does nothing
to break the remedy-claim-owner linkage. And that is why a
defendant may assert "any defense" against the restitution claim
he would have had if the victim had pursued his claim in a civil
action——because it is the same person pursuing the same cause
against the same malefactor. § 973.20(14)(b).
¶105 Therefore, when victims seek restitution from criminal
defendants, the claims they assert belong to the victims, not the
state. And because the claims belong to the victims, not only may
they release them just like any other claim, they are the only
ones who may release them. Having released their claims, victims
would be subject to the accord and satisfaction defense if they
attempted to assert the released claims in a civil action.
Flambeau Prod. Corp. v. Honeywell Info. Sys., Inc., 116 Wis. 2d 95,
112, 341 N.W.2d 655 (1984) ("An 'accord and satisfaction' is an
agreement to discharge an existing disputed claim; it constitutes
a defense to an action to enforce the claim." (citation omitted)).
14
No. 2018AP875.dk
Accordingly, accord and satisfaction is one of the defenses a
defendant may raise pursuant to Wis. Stat. § 973.20(14)(b).9
9 Justice Dallet's concurrence confuses the defense of "accord
and satisfaction" with "set-off." Justice Dallet's concurrence,
¶¶73-75. She says that to establish the former, "a defendant must
not only prove that there was an agreement to discharge a debt,
but also the actual discharge of the debt by the substituted
performance, such that recovery in a restitution proceeding would
result in a victim receiving double recovery." Id., ¶74. That's
not accord and satisfaction, that's set-off.
[Set-off] is the right which exists between two parties,
each of whom under an independent contract owes an
ascertained amount to the other, to set-off their
respective debts by way of mutual deduction, so that in
any action brought for the larger debt the residue only,
after deduction, may be recovered. The right of set-off
is a common-law right, which belongs to every creditor,
to apply unappropriated monies of the debtor, in his or
her hands, in extinguishment of debts due to him or her.
It allows parties that owe mutual debts to each other to
assert amounts owed, subtract one from the other, and
pay only the balance.
80 C.J.S. Set-off and Counterclaim § 3 (footnotes omitted). Setoff
measures the amount paid against the amount owed and ensures the
former does not exceed the latter so that the obligor does not
receive a double-recovery.
Accord and satisfaction, on the other hand, is not concerned
with how much a debtor pays on a claim, it is concerned with its
extinguishment:
An "accord and satisfaction" is an agreement to
discharge an existing disputed claim, whether the claim
be one arising in contract, tort, or otherwise. An
"accord and satisfaction" constitutes a defense to an
action to enforce the claim.
Ordinary contract principles apply in determining
whether an agreement of "accord and satisfaction" is
reached. . . . There must be expressions sufficient to
make the creditor understand or to make it unreasonable
for him not to understand that the performance is offered
in full satisfaction of the claim.
15
No. 2018AP875.dk
¶106 Mr. Muth did, in fact, raise the defense, and provided
a copy of the settlement agreement. It says, in pertinent part,
that in exchange for the settlement amount H.M. and K.M.
acquit and forever discharge Ryan Muth and Progressive
Artisan & Truckers Casualty Insurance Company, of and
from any and all claims, actions, causes of actions,
demands, rights damages, costs, loss of wages, expenses,
hospital and medical expenses, accrued or unaccrued
claims for loss of consortium, loss of support or
affection, loss of society and companionship on account
of or in any way growing out of, any and all known and
unknown personal injuries and damages resulting from an
automobile accident which occurred on or about March 6,
2016 . . . .
The Chief Justice, however, says "H.M.'s testimony and her
husband's nontestimonial statements indicated that they did not
agree that the civil settlement was meant to cover all damages."
Lead op., ¶36. With the greatest of respect, and with apologies
for the frankness of this statement, H.M. and her husband may have
subjectively believed the settlement was not meant to cover all
damages, but it did. The language of the settlement agreement
unequivocally releases the claims they made in the restitution
proceeding in exchange for the settlement payment. Therefore, the
defense of accord and satisfaction was available to Mr. Muth.
III. CONCLUSION
¶107 The remedy-claim-owner linkage has not been disturbed by
Wis. Stat. § 973.20, so victims may release claims whose remedies
include restitution. Because accord and satisfaction is one of
Hoffman v. Ralston Purina Co., 86 Wis. 2d 445, 453, 273 N.W.2d 214
(1979) (citations omitted). So to the extent Justice Dallet tries
to make "accord and satisfaction" patrol how much an obligee pays
an obligor, she's using the wrong tool.
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No. 2018AP875.dk
the "any defenses" encompassed by § 973.20(14)(b), criminal
defendants may raise it against claims asserted by victims in the
restitution proceedings. Therefore, I join parts II.A., II.B.,
and II.D. of the lead opinion. I do not join part II.C because I
believe that Mr. Muth should have been allowed to raise "accord
and satisfaction" as a defense to the restitution sought in this
case.
¶108 I am authorized to state that Justice BRIAN HAGEDORN
joins parts I and II of this opinion.
17
No. 2018AP875-CR.bh
¶109 BRIAN HAGEDORN, J. (dissenting). The text of a
statute——not its purpose——is the law. The freedom circuit courts
possess to make discretionary decisions does not permit discarding
the text to achieve a statute's goals, however laudatory they may
be. Wisconsin's restitution statute may serve noble ends, but it
does so with specific statutory limits, structure, and process.
On both issues before us now, the statutory text is
straightforward; we should follow where it leads.
¶110 On the first issue, the restitution statute enables a
defendant to raise "any defense" that could be raised in a civil
action covering the same losses. Wis. Stat. § 973.20(14)(b) (2017-
18).1 Here, Ryan Muth challenged certain restitution claims by
raising a defense that can be raised in a civil action: accord
and satisfaction. Muth entered into an agreement whereby three of
the victims agreed to release him from all claims they held,
including any claims for special damages, in exchange for $100,000.
Muth performed on that agreement. There's no need to prove a
specific amount of special damages. By definition, Muth's
performance on the accord has satisfied the full amount of special
damages; that's what accord and satisfaction is. Under the plain
language of the law, Muth's accord and satisfaction defense should
have precluded further recovery of special damages, and the circuit
court's discretionary decision granting those damages should be
reversed.
All subsequent references to the Wisconsin Statutes are to
1
the 2017-18 version.
1
No. 2018AP875-CR.bh
¶111 On the second issue (which would not need to be reached
if the accord and satisfaction defense were deemed successful),
the circuit court erroneously exercised its discretion because it
relied on an improper legal standard. The law defines with
precision who is a victim and thereby entitled to seek restitution
for their losses; it's a small circle. Under the statute, the
spouses of the adult children are not victims in this case and
therefore are not entitled to restitution for their losses. And
if the losses for the sons-in-law are not compensable through
restitution, the daughters do not have any marital property
interest in a non-existent lost wages claim. The long and short
of it is the legislature granted a legal claim to one marital
spouse and not the other. Because the circuit court relied on a
rationale that conflicts with what our statutes provide, its
exercise of discretion cannot be sustained, nor can its rationale
be ignored if we are to apply our standard of review.
¶112 We have no need in this case to resort to the policies
and purposes underlying restitution or to incorporate wholly
unrelated statutes. The specific terms of the restitution statute
do the job. The circuit court applied the wrong standard of law
to both issues, and therefore it erroneously exercised its
discretion. State ex rel. Wren v. Richardson, 2019 WI 110, ¶39,
389 Wis. 2d 516, 936 N.W.2d 587. I respectfully dissent.
I. RESTITUTION DEFENSES
A. Restitution Generally
¶113 Absent a substantial reason not to, a circuit court must
order a defendant to pay restitution to any victim of a crime
2
No. 2018AP875-CR.bh
considered at sentencing. Wis. Stat. § 973.20(1r). Thus, payment
of restitution is the norm. As relevant here, restitution may be
awarded for all special damages that could be recovered in a civil
action against the defendant. § 973.20(5)(a). Special damages,
in contrast to general damages, constitute "any readily
ascertainable pecuniary expenditure paid out because of the
crime." Huml v. Vlazny, 2006 WI 87, ¶41 n.11, 293 Wis. 2d 169,
716 N.W.2d 807 (quoted source omitted) (comparing general damages
such as pain and suffering).
¶114 For every restitution claim, the victim has the burden
to prove the amount of loss suffered as a result of the defendant's
crime. Wis. Stat. § 973.20(13)(a), (14)(a). When disputing a
restitution claim, the defendant has the burden to demonstrate his
financial resources and earning ability, as well as his dependents'
needs and earning ability. § 973.20(13)(a), (14)(b).
¶115 The defendant can also assert against a restitution
claim "any defense that he or she could raise in a civil action
for the loss sought to be compensated." Wis. Stat. § 973.20(14)(b)
(emphasis added). Muth asserted two: (a) setoff and (b) accord
and satisfaction. When raised against a restitution claim, both
defenses are aimed at reducing the bottom-line amount. But each
gets there through a different path.
¶116 Broadly, a setoff theory involves dueling claims of
indebtedness. The defendant seeks to reduce an amount owed on the
plaintiff's claim based on his own claim that the plaintiff is
indebted to him from a separate transaction. See Piotrowski v.
Czerwinski, 138 Wis. 396, 400, 120 N.W. 268 (1909) (explaining
3
No. 2018AP875-CR.bh
that defendants had an equitable right to set off their own claims
of indebtedness against the plaintiff's action on notes the
defendants made); see also Setoff, Black's Law Dictionary (11th
ed. 2019) ("A debtor's right to reduce the amount of a debt by any
sum the creditor owes the debtor; the counterbalancing sum owed by
the creditor."). The restitution statute explicitly recognizes
the validity of setoff in a related context. It provides that
restitution paid in a criminal proceeding "shall be set off against
any judgment in favor of the victim in a civil action" if it arose
from the same events. Wis. Stat. § 973.20(8).
¶117 Accord and satisfaction, on the other hand, is an
agreement between parties to discharge a disputed claim or debt.
Hoffman v. Ralston Purina Co., 86 Wis. 2d 445, 453, 273 N.W.2d 214
(1979). That is, the parties agree to a performance different
from and in lieu of actual performance on the claim or debt in
dispute. See Huml, 293 Wis. 2d 169, ¶36 n.9 ("'Accord and
satisfaction' means '[a]n agreement to substitute for an existing
debt some alternative form of discharging that debt, coupled with
the actual discharge of the debt by the substituted performance.'"
(quoting Black's Law Dictionary (7th ed. 1999) (alteration in
original)). The defense comprises two basic elements: the
"accord" is the parties' agreement, while the "satisfaction" is
performance on that agreement. See Flambeau Prods. Corp. v.
Honeywell Info. Sys., Inc., 116 Wis. 2d 95, 112-14, 341 N.W.2d 655
(1984).2 To ascertain whether these elements are present, a court
2A preeminent contract law treatise describes the same two
elements as such:
4
No. 2018AP875-CR.bh
applies ordinary principles of contract law. Hoffman, 86
Wis. 2d at 453. The accord requires an offer, an acceptance, and
consideration, and the satisfaction requires performance complying
with the parties' agreement. Id. When both elements are proved,
the defense bars actions to enforce the discharged claim. Id.
B. Conflicting Caselaw
¶118 The circuit court held that Muth failed to prove his
setoff defense, and that accord and satisfaction may not be raised
as a defense in restitution proceedings.3 A trilogy of cases have
addressed these questions and form the backdrop for our discussion.
¶119 First, in State v. Sweat, we addressed a defendant's
argument that "any defense available in a civil action" meant he
could raise a civil statute of limitations defense pursuant to
Wis. Stat. § 973.20(14)(b). 208 Wis. 2d 409, 413, 561 N.W.2d 695
(1997). We disagreed and concluded that this language "was
intended to include only defenses relating to the amount of
[A]n accord and satisfaction consists of two elements:
First, the accord or agreement, under which one of the
parties undertakes to give or perform, and the other to
accept, in satisfaction of a claim, something other than
or different from that which the second party is, or
considers itself to be, entitled to; and second, the
satisfaction, that consists of the execution or
performance of the accord or agreement.
29 Williston on Contracts § 73.27 (4th ed.) (footnotes omitted).
3 The court of appeals affirmed the circuit court's setoff
conclusion. State v. Muth, No. 2018AP875-CR, unpublished slip
op., ¶22 (Wis. Ct. App. June 6, 2019) (per curiam). Despite full
briefing on a preserved issue, the court of appeals did not address
Muth's accord and satisfaction argument. See generally id.
5
No. 2018AP875-CR.bh
restitution and not those relating to liability." Id. at 425.
This means defendants "should be able to raise substantive
defenses, such as mitigation, set-off, or accord and satisfaction,
which go to the measure or amount of total restitution." Id. at
424 (emphasis added).
¶120 Two years later, the court of appeals squarely addressed
whether the restitution statute permitted a defendant to raise
accord and satisfaction as a defense under Wis. Stat.
§ 973.20(14)(b). State v. Walters, 224 Wis. 2d 897, 591
N.W.2d 874 (Ct. App. 1999). The court of appeals held that the
language in Sweat was dicta, and thus did not bind the court.
Id. at 904. Instead, the court of appeals said that accord and
satisfaction should not be available because criminal restitution
"is a remedy that belongs to the State," not the victim. Id. at
904-05.
¶121 Finally, in Huml, this court weighed in yet again in a
case involving a civil judgment for unpaid restitution after the
defendant was released from probation. 293 Wis. 2d 169. We
discussed the evident policy in the restitution statute of making
"victims whole without allowing them to receive double
recoveries." Id., ¶22. The statutory text, we explained, affords
three ways to avoid double recovery. Id. Two dealt with the
issues not relevant here, but one was directly on point. Namely,
the restitution statute grants the defendant an opportunity to
"assert any defense, including accord and satisfaction or setoff."
Id. (citing Wis. Stat. § 973.20(14)(b) and Sweat, 208 Wis. 2d at
424). In making that statement, we did not directly overrule
6
No. 2018AP875-CR.bh
Walters' conflicting holding, but we did explicitly state that the
law is to the contrary.
¶122 Pronouncements of this court control over those of the
court of appeals, just as the most recent pronouncement controls
over any earlier ones. Cuene v. Hilliard, 2008 WI App 85, ¶15,
312 Wis. 2d 506, 754 N.W.2d 509. Thus, as we stated in Huml, the
law as it stands right now is that accord and satisfaction is an
available defense under Wis. Stat. § 973.20(14)(b). Huml, 293
Wis. 2d 169, ¶22. Like setoff, accord and satisfaction goes to
the amount of recovery and is meant to prevent a double recovery.
And in harmony with the text of § 973.20(14)(b), accord and
satisfaction is undoubtedly a defense that could be raised in a
civil action covering the same losses as a restitution order.
¶123 Walters's holding that accord and satisfaction may not
be raised as a defense is not the governing law. In my view, it
is also wrong in its reasoning, contradicts the statute, and should
be expressly overruled on this point. Walters rested its
conclusion largely on the grounds that a restitution claim belongs
to the State, not to the victim. 224 Wis. 2d at 904-05. This
meant the victim had no independent authority to agree with the
defendant to release the claim, thus defeating the theory of the
defense. Id. The court also based its conclusion on the notion
that restitution serves the dual purpose of punishing and
rehabilitating a defendant. Id. at 904 (referencing Sweat, 208
Wis. 2d at 428-29). As Walters put it, accord and satisfaction
conflicts with these purposes——and thus cannot be used——because it
7
No. 2018AP875-CR.bh
acts as a complete defense to an action to enforce a claim. Id. at
904-05.
¶124 The problem is, as worthy as the purposes of restitution
may be, this logic does not come from the statutory text. Nothing
in the statute indicates that the State itself is the owner of the
restitution claim. Nor should it be. See Justice Kelly's
concurrence/dissent, ¶¶98-100, 104-05. Restitution is remedial
compensation to victims of a crime, and victims must prove the
damages they have sustained. § 973.20(1r), (5)(a), (14)(a). The
State, in contrast, does not recover restitution. It does not
suffer losses compensable through restitution, and the State is
not a restitution victim under the law.
¶125 In fact, under the statute, there's no guarantee the
State will even be present when restitution is determined. Before
sentencing, the district attorney obtains from the victim any
information pertaining to claimed losses.4 Wis. Stat.
§ 973.20(13)(b). When restitution is resolved at the sentencing
hearing, the district attorney is present and represents the
victim. § 973.20(13)(c). In other cases, such as here,
restitution has to be resolved in a separate hearing and the
district attorney's presence is only required if the court so
orders (not the case here). § 973.20(14)(a). And even when it
4 In completing that task, the district attorney is to receive
full cooperation and assistance from law enforcement, the
department of corrections, and any agency providing victims'
rights services. Wis. Stat. § 973.20(13)(b). The department of
justice also provides technical assistance by way of model forms
and procedures for collecting and documenting the relevant
information. Id.
8
No. 2018AP875-CR.bh
does appear, the State at most only represents the victim. The
State does have a statutory role in advocating for victims, but in
no sense does the law represent that it holds the claim.
¶126 The missteps in Walters' reasoning are further amplified
when that logic is applied to a setoff defense raised against a
restitution claim. Like here, the Walters court also considered
a setoff defense premised on a pre-restitution settlement
agreement. 224 Wis. 2d at 905-09. In light of its accord and
satisfaction holding, one would expect the State's ownership of
the restitution claim to similarly preclude use of a setoff
defense. After all, a setoff is also based on a transaction that
the State plays no part in, one negotiated by the victim and the
defendant. But that's not what Walters said. Rather, the court
concluded that a setoff defense could be raised. Id. at 906. As
Walters left it, a defendant could negotiate to pay off all of the
victim's special damages such that the whole restitution amount
would be set off. See id. at 906 n.2 (noting there may be cases
where a settlement agreement is for the same amount as the victim's
special damages). But the same defendant could not challenge a
restitution claim based on his agreement with the victim to pay
five times as much for the release of any and all damages claims.
That makes no sense.
¶127 The clear answer to this confusion is found in the text
of the restitution statute, not the uncodified purposes of
restitution or the State's supporting role in restitution
proceedings. Wisconsin Stat. § 973.20 dictates that restitution
is designed to compensate victims for their special damages
9
No. 2018AP875-CR.bh
incurred as a result of defendants' criminal actions. Between
securing the defendant's conviction and entering the restitution
order, State actors and institutions play a part in that process.
But under § 973.20(14)(b), a defendant may raise "any defense"
that could be raised in a civil action covering the same losses.
Accord and satisfaction checks this box, which is exactly what we
said in Sweat and Huml.
C. The Court's Decision
¶128 The circuit court relied on Walters to conclude that
accord and satisfaction is not an available defense under Wis.
Stat. § 973.20(14)(b). A majority of this court acknowledges the
problem that Walters created below and now clarifies that any
interpretation of Walters that acts to affirmatively bar an accord
and satisfaction defense cannot stand. Justice Dallet's
concurrence, ¶78.5
¶129 But between the lead and concurring opinions, the court
brings another problem to the table. Specifically, the court
rejects Muth's accord and satisfaction defense on its merits
because he failed to prove what portion of the settlement
agreement, if any, covered the victims' special damages. Lead
op., ¶37; Justice Dallet's concurrence, ¶75. In essence, the court
reviews this defense under the same standard it uses to reject
Muth's setoff defense. As explained above, however, these defenses
are similar, but not the same.
5In contrast, the lead opinion declines to grapple with any
of this. It cites and quotes Walters, but never acknowledges its
inconsistency with our cases and the restitution statute itself.
10
No. 2018AP875-CR.bh
¶130 A setoff tries to reduce a claim of indebtedness based
on a competing claim of indebtedness. In this context, the
defendant argues that he paid for the victim's special damages
such that the restitution award for those damages must be reduced
in kind. In contrast, an accord and satisfaction defense is based
on the defendant paying for the victim's release of any claims
based on those damages. The defendant must show that he agreed to
pay for the victim's release, and that he performed on that
agreement. When proved, the defense bars enforcement of the
restitution claim because the defendant has already paid off the
special damages debt underlying that claim. The merits or
specifics of that debt do not affect the operation of the defense.
See Kercheval v. Doty, 31 Wis. 476, 485 (1872) ("[N]o matter what
the actual and true merits of their respective claims may have
been pending the controversy, the same will not afterwards be
inquired into or examined. The settlement is a complete bar to
such inquiry and examination.").
¶131 The record here shows that Muth proved his accord and
satisfaction defense by producing the settlement agreement at the
restitution hearing.6 The agreement is titled "FULL RELEASE OF
ALL CLAIMS WITH INDEMNITY." It states that in exchange for
$100,000, the three surviving children would "release, acquit and
6 Interpretation of contractual language is an issue of law
we review de novo. Huml v. Vlazny, 2006 WI 87, ¶13, 293
Wis. 2d 169, 716 N.W.2d 807. In so doing, we give the terms used
in a contract their plain and ordinary meaning in an effort to
ascertain the parties' intent. Id., ¶52. When those terms are
unambiguous, we determine the parties' intent based on the four
corners of the contract, without consideration of extrinsic
evidence. Id.
11
No. 2018AP875-CR.bh
forever discharge" Muth "of and from any or all claims, actions,
causes of action, demands, rights, damages, costs, loss of wages,
expenses, hospital and medical expenses, accrued or unaccrued
claims for loss of consortium, loss of support or affection, loss
of society and companionship" arising from that accident. The
lead opinion says this is ambiguous, but it seems about as clear
as a release can be. Lead op., ¶36. It contains no language
drawing any exceptions from this release, which no doubt includes
special damages. All three children signed under an
acknowledgement that they had read and understood the release, and
Muth performed on his end of the agreement. When that payment was
made, so was Muth's defense. See Olson v. N.W. Furniture Co., 6
Wis. 2d 178, 182, 94 N.W.2d 179 (1959) ("A claimant's acceptance
and retention of a payment which he knows is tendered by an alleged
debtor in full settlement of a disputed obligation constitutes an
accord and satisfaction.").
¶132 The court concludes that this was not good enough, and
that Muth failed to prove that the restitution order resulted in
a double recovery. Lead op., ¶37; Justice Dallet's concurrence,
¶75. It's unclear how exactly the court believes Muth could have
proved his defense. While it explains he had to show a double
recovery, Muth did just that. The restitution order constituted
a recovery for the victims' special damages sustained as a result
of the underlying accident. Through the settlement agreement,
Muth paid the victims for the release of their claims based on the
special damages they sustained as a result of the underlying
accident. The settlement agreement is the accord, and it provided
12
No. 2018AP875-CR.bh
that Muth's payment satisfied the amount owed for special damages
(whatever that amount may be). No specific amount needed to be or
even could have been shown; it was a substituted performance.
That's what accord and satisfaction is.
¶133 The circuit court rejected both of Muth's defenses and
awarded $34,869.42 in restitution to the three children.7 I agree
that Muth's setoff defense was correctly denied. The terms of the
settlement agreement do not specifically allocate the $100,000
against any particular damages. Without proof of the special
damages amount, Muth did not meet his burden to prove how much the
restitution amount should be set off. Huml, 293 Wis. 2d 169, ¶22.
¶134 But the circuit court, relying on Walters, concluded
that accord and satisfaction is not an available defense in
contravention of Huml and the restitution statute itself.
Therefore, its discretionary decision to reject Muth's accord and
satisfaction defense, which should have prevailed, was based on an
incorrect legal standard and should be reversed. LeMere v. LeMere,
2003 WI 67, ¶14, 262 Wis. 2d 426, 663 N.W.2d 789 ("[T]he failure
to apply the correct legal standards is an erroneous exercise of
discretion.").
7 The circuit court's restitution order included an amount
($8,401) for the deceased victim's brother, who himself was a
restitution victim but not a party to the settlement agreement.
In raising his defenses, Muth has never challenged this portion of
the restitution order.
13
No. 2018AP875-CR.bh
II. RESTITUTION VICTIMS
¶135 Because it upholds the rejection of Muth's defenses, the
court also addresses an issue regarding specific restitution
awards for the deceased victim's sons-in-law. While accepting
Muth's accord and satisfaction defense would moot this issue, I
address it nonetheless as the court's analysis further divorces
our restitution jurisprudence from the statutory text and
misapplies our standard of review.
¶136 As part of its order, the circuit court awarded
restitution for the lost wages of the deceased victim's two sons-
in-law. Muth contested these amounts on the grounds that the sons-
in-law are not victims under the restitution statute. The circuit
court rejected this argument, determining that the lost wages also
belonged to the deceased victim's daughters (who themselves were
statutorily permitted to recover restitution) by way of our marital
property laws. This is an erroneous application of the relevant
statutes.
¶137 Restitution may be granted for losses suffered by
victims. Wis. Stat. § 973.20(1r). And for purposes of
restitution, victims are defined under Wis. Stat. § 950.02(4).
See State v. Gribble, 2001 WI App 227, ¶71, 248 Wis. 2d 409, 636
N.W.2d 488. Generally, a victim is someone "against whom a crime
has been committed," with some expansion to guardians and similar
individuals for children, those adjudicated incompetent, and those
physically or emotionally unable to exercise their rights.
§ 950.02(4)(a)1.-3., 5. If the person against whom a crime was
committed is deceased, the definition of victim expands, but only
14
No. 2018AP875-CR.bh
in a limited fashion. A victim in that situation is one "who
resided with the person who is deceased" or is a "family member"
of the deceased victim. § 950.02(4)(a)4. But a family member is
not a vague term left for judicial exposition. It is a statutorily
defined term as well; it means a "spouse, minor child, adult child,
sibling, parent, or legal guardian." § 950.02(3).
¶138 Thus, unless they lived with the deceased victim, in-
laws are not victims for purposes of restitution. The legislature
could have defined family members to include spouses of the persons
listed, but it did not. Reading the list as a whole, the itemized
victims represent immediate family members of the deceased victim,
but not their spouses or children or other relatives. As evident
from the statutory text, restitution is available only for a narrow
subset of individuals. Victims are not anyone and everyone who
suffered losses. In fact, when a person against whom a crime was
committed is not deceased, her children are not victims and receive
no recovery, despite the fact that they may suffer losses resulting
from the crime. The most reasonable reading of the statute is
that only those who the legislature defined as victims may have
their losses covered.8 Accordingly, under the relevant statutes,
the sons-in-law are not entitled to have their losses compensated
via the mechanism of criminal restitution to victims.
8 This conclusion flows from the canon of construction known
as expression unius est exclusion alterius, which instructs that
the expression of a term or terms implies the exclusion of others.
State v. Dorsey, 2018 WI 10, ¶29, 379 Wis. 2d 386, 906 N.W.2d 158
(citations omitted).
15
No. 2018AP875-CR.bh
¶139 Instead of letting the statutes speak for themselves
regarding who victims are, the lead opinion evades this
straightforward conclusion by roping in our marital property
statutes.9 Lead op., ¶55. I see no principled reason for straying
9 The circuit court went down this same path and used our
marital property statutes as the basis for its decision. If that
route is incorrect, our standard of review requires reversal.
LeMere v. LeMere, 2003 WI 67, ¶14, 262 Wis. 2d 426, 663 N.W.2d 789
("[T]he failure to apply the correct legal standards is an
erroneous exercise of discretion."). This also means we cannot
skip over the circuit court's legal basis. Reviewing an exercise
of discretion requires an evaluation of the legal standard applied.
For her part, Justice Dallet concludes that restitution could
not be ordered for the lost wages under Wis. Stat. § 973.20(5)(a)
and rejects integration of our marital property statutes to
overcome that barrier. But Justice Dallet still upholds the awards
by claiming they were proper exercises of discretion under Wis.
Stat. § 973.20(13)(a)5., a statute that was not relied upon by the
circuit court nor raised by the parties below or before us.
Justice Dallet's concurrence, ¶83. In other words, Justice Dallet
finds that the circuit court applied an incorrect legal standard
yet still permissibly exercised its discretion under a statutory
provision that it did not use. This is not how we review
discretionary decisions.
16
No. 2018AP875-CR.bh
from the relevant statutes to create an indirect route for
restitution that could not otherwise be obtained. Certainly
nothing in the text suggests such a link. The court of appeals
said as much in State v. Johnson, a decision that the lead opinion
does not overrule here. 2002 WI App 166, ¶23, 256 Wis. 2d 871,
649 N.W.2d 284 (rejecting use of marital property laws to create
an indirect route for restitution where Wis. Stat. §§ 950.02(4)(a)
and 973.20 provided no direct route for a stepparent's recovery of
lost wages).10
¶140 Moreover, the lead opinion's use of our marital property
statutes has its own flaws. Its conclusion rests on the daughters
Further, Justice Dallet's tour down the trail of Wis. Stat.
§ 973.20(13)(a)5 opens up a precarious path. That provision is
found after a list of four factors a court must consider before
ordering a restitution award: the victim's losses, the defendant's
financial resources and earning ability, and the defendant's
dependents' needs and earning ability. § 973.20(13)(a). The fifth
and final item on this list allows the court to consider "[a]ny
other factors which the court deems appropriate."
§ 973.20(13)(a)5. In essence, this is the catchall provision for
judicial determinations as to what amount of restitution should be
ordered. Justice Dallet's application appears to treat
§ 973.20(13)(a)5. as something that can catch all kinds of
discretionary restitution awards. One wonders what the limits of
this might be. For example, what other persons who are not
statutorily entitled to restitution can nonetheless receive it
under this view of § 973.20(13)(a)5.? Justice Dallet tries to
close the door on this line of thinking by explaining that future
courts must order restitution in a manner consistent with our
restitution statute as a whole. Justice Dallet's concurrence, ¶85
n.7. I agree, but I think we should do that in this case too.
The court of appeals reversed the circuit court's
10
restitution order on this issue, concluding that Johnson
controlled the outcome. Muth, No. 2018AP875-CR, unpublished slip
op., ¶27 & n.4 ("We express no opinion as to whether, in the
absence of Johnson, the State's policy and legislative intent
arguments, or any other argument, would have merit.").
17
No. 2018AP875-CR.bh
(who are themselves victims for purposes of restitution) holding
a marital property interest in their husbands' lost wages. This
theory does not work because that interest does not exist.
¶141 To have a marital property interest, a spouse must first
have property. Wis. Stat. § 766.31(1) ("All property of spouses
is marital property . . . ."). The marital property chapter
defines "property" as "an interest, present or future, legal or
equitable, vested or contingent, in real or personal property."
Wis. Stat. § 766.01(15). Thus, every marital property interest
traces back to a property interest.
¶142 At stake here is a property interest in the lost wages
of the sons-in-law. But the sons-in-law do not have restitution
claims of their own. And although our statutes provide that income
earned by spouses constitutes marital property, Wis. Stat.
§ 766.31(3)-(4), that does not mean spouses also have an undivided
interest in income that has not yet been earned. Nothing else in
the chapter even hints at an interest of this kind. Cf.
§ 766.31(7m) (referring to marital property based on lost income
that has been converted to damages through a personal injury claim
of a surviving spouse).
¶143 There can be no marital property interest that the
daughters can assert here without first showing that the sons-in-
law have an independent interest in their own lost wages. Because
the sons-in-law are not victims and do not have a compensatory
interest in their own lost wages, the daughters have no marital
property interest that could be asserted in the first place.
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No. 2018AP875-CR.bh
¶144 Thus, while restitution should not have been ordered
based on Muth's accord and satisfaction defense, the circuit
court's award of restitution based on the lost wages of the sons-
in-law should be reversed for this independent reason as well.
III. CONCLUSION
¶145 Those convicted of crimes should, so far as it is
possible, make their victims whole. But as commendable as that
policy goal may be, we must not disregard our duty to actually
interpret and apply the text of the relevant statutes, no matter
how broadly and liberally we are to construe them. Across two
issues, the court fails to apply our standard of review and
elevates the policy underlying our restitution statute above the
statutory text itself. The text is the law, and I would follow
it. I respectfully dissent.
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No. 2018AP875-CR.bh
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