State v. Steed

2017 UT App 6THE UTAH COURT OF APPEALS
STATE OF UTAH,
Appellee and Cross-appellant,
v.
JOAN A. STEED AND FRANK J. STEED,
Appellants and Cross-appellees.
Opinion
No. 20141044-CA
Filed January 6, 2017
Third District Court, Salt Lake Department
The Honorable Robin W. Reese
No. 081907873
Max D. Wheeler, Rodney R. Parker, and Richard A.
Van Wagoner, Attorneys for Appellants
and Cross-appellees
Sean D. Reyes, Bridget K. Romano, and Stanford E.
Purser, Attorneys for Appellee and Cross-appellant
Scott H. Sweat and Tyler J. Berg, Attorneys for
Amicus Curiae Wasatch County
JUDGE KATE A. TOOMEY authored this Opinion, in which JUDGES
GREGORY K. ORME and JILL M. POHLMAN concurred.
TOOMEY, Judge:
¶1 Joan A. Steed and Frank J. Steed appeal the district court’s
order denying the refund of tax penalties and interest, as well as
incarceration and probation costs after their convictions for
State v. Steed
failure to file tax returns were reversed. 1 We affirm in part and
reverse in part.
BACKGROUND 2
¶2 The Steeds were convicted of three counts of failure to file
tax returns and one count of conducting a pattern of unlawful
activity. Prior to sentencing, the Steeds agreed to accept the Utah
State Tax Commission’s determination of past-due taxes owed
for purposes of calculating restitution. Mr. Steed was sentenced
to zero to five years in prison on each count of the failure to file
tax returns. In addition, Mr. Steed was sentenced to one to
fifteen years in prison for the pattern-of-unlawful-activity
conviction and fined $5,300. These prison sentences were stayed
and the district court imposed a total of six years of probation 3
1. After the Steeds filed their motion for a refund of tax penalties
and interest and costs of incarceration and probation, Mr. Steed
died. Before the district court issued its ruling on the motion, the
Steeds filed a Suggestion of Death seeking the substitution of Mr.
Steed’s estate in his stead. The district court issued its ruling on
the motion for a refund in October, 2014, and the parties
appealed. This court issued a limited remand to reform the
district court’s ruling and order to identify the State of Utah as
the obligor for the partial refund the district court had granted.
The order reforming the ruling substituted the estate of Mr.
Steed for Mr. Steed.
2. A more complete history of this case is given in State v. Steed,
2014 UT 16, 325 P.3d 87. We recount only those facts pertinent to
this appeal.
3. The court imposed three years of probation for each failure-to-
file count, the first two to run consecutively and the last count to
run concurrently. The court also ordered three years of
(continued…)
20141044-CA 2 2017 UT App 6State v. Steed
and ordered him to serve 365 days in Salt Lake County jail as a
term of the probation. Mr. Steed was ordered to pay restitution
in the amount of the tax owed for the years he did not file a tax
return, a ten percent failure-to-file fee, a ten percent late-
payment fee, and interest.
¶3 Mrs. Steed was also sentenced to zero to five years in
prison for each of the three counts of failure to file a tax return
and one to fifteen years in prison for the pattern-of-unlawful-
activity conviction. She was also ordered to pay a $140,298 fine
pursuant to the pattern-of-unlawful-activity statute. 4 These
sentences were stayed and Mrs. Steed was placed on probation
for a total of six years and ordered to serve 180 days in the Salt
Lake County jail after her husband was released. 5 Like Mr.
Steed, Mrs. Steed was ordered to pay restitution in the amount
of the taxes owed for the years she did not file a tax return, an
additional twenty percent in penalties, and interest.
(…continued)
probation for the pattern-of-unlawful-activity conviction, with
that three-year term to run concurrently with the other
probationary terms.
4. The Steeds filed separate tax returns and owed different
amounts. The pattern-of-unlawful-activity statute allows for the
imposition of a fine “not more than twice the amount” of net
proceeds derived from a defendant’s prohibited conduct. See
Utah Code Ann. § 76-10-1603.5(2) (LexisNexis Supp. 2016). The
court ordered that the Steeds each pay a fine pursuant to this
statute in the amount of one-half of their individual tax
liabilities.
5. The court staggered the jail terms so that one of the Steeds
would be “available to operate the business while the other is
serving the jail commitment.”
20141044-CA 3 2017 UT App 6State v. Steed
¶4 The court clarified that the amount of restitution it
ordered for taxes due was based on “the figures that were
developed by the State Tax Commission,” which “both sides had
agreed that they would accept.” The court asked that the Steeds’
accountant and the Commission’s accountant work together to
determine the penalties and interest portion of the restitution.
¶5 Because of Mr. Steed’s poor health, the Steeds requested
that they be able to serve their jail terms “where they live.” 6 The
court ordered Mr. Steed to notify the court within two weeks
whether he had “made arrangements at his own expense to
serve the time in the Duchesne County jail” or report to the Salt
Lake County jail in thirty days.
¶6 Mr. Steed reported to the Salt Lake County Adult
Detention Center but was transferred to the Wasatch County jail
to “serve the remainder of his 365 day jail sentence.” 7 The order
approving Mr. Steed’s transfer to the Wasatch County jail stated,
“The defendant shall sign and be bound by any such conditions
contained in a contract of confinement by and between [him]
and Wasatch County, including per diem costs, work release
conditions and any [and] all such costs and conditions of
confinement and release imposed by Wasatch County.” Mrs.
Steed was also transferred to the Wasatch County jail and served
her sentence under the same terms.
6. It appears from Mr. Steed’s contract with Wasatch County jail
and a probation violation report that the Steeds were living in
Midway, Utah, in Wasatch County. Duchesne County was “the
county of [their] business and alternate residence.”
7. It is not clear from the record why Mr. Steed was transferred
from the Salt Lake County Adult Detention Center to the
Wasatch County jail rather than the Duchesne County jail as
originally requested.
20141044-CA 4 2017 UT App 6State v. Steed
¶7 The Steeds appealed their convictions, and our supreme
court concluded “there was insufficient evidence to support the
verdicts” and reversed and remanded the case “with instructions
to enter a judgment of acquittal.” State v. Steed, 2014 UT 16, ¶¶ 2,
55, 325 P.3d 87. On remand, the Steeds moved for the district
court to order a refund of the tax penalties and interest, fines,
and costs associated with incarceration and probation as part of
its judgment of acquittal. 8 The court ordered a refund of the fines
for the pattern-of-unlawful-activity counts but denied a return of
the tax penalties and interest and the costs of incarceration and
probation. The Steeds appeal.
ISSUES AND STANDARDS OF REVIEW
¶8 The Steeds contend due process “requires restoration of
all funds taken from or paid by [them] as a result of the now-
reversed convictions.” These funds fall into three categories:
money paid to the Utah State Tax Commission for penalties and
interest on back taxes, money paid to Wasatch County pursuant
to a private incarceration contract, and money paid to Adult
Probation and Parole for probation services. The court gave
different legal reasons for denying the refund of these different
costs, and “[w]e review a district court’s legal conclusions for
correctness.” Salt Lake City Corp. v. Jordan River Restoration
Network, 2012 UT 84, ¶ 117, 299 P.3d 990.
ANALYSIS
¶9 As a threshold matter, the State argues the Steeds cannot
challenge the civil tax penalties and interest imposed as part of
8. The Steeds did not request a refund of the back taxes they had
paid as part of restitution, nor do they request this on appeal.
There is apparently no dispute the taxes were properly owed.
20141044-CA 5 2017 UT App 6State v. Steed
their sentences “because they did not raise the issue in their first
appeal.” In the current appeal, the Steeds challenge the district
court’s refusal to vacate the tax penalties and interest portions of
their restitution orders following acquittal. The crux of the
Steeds’ complaint is that, after their acquittal, the district court
lacks jurisdiction to uphold part of a restitution order. This is not
an issue that could have been raised before the Steeds’
convictions were reversed. To argue that the court cannot
impose tax penalties and interest absent conviction on the first
appeal would have been unripe for adjudication. See Bodell
Constr. Co. v. Robbins, 2009 UT 52, ¶ 29, 215 P.3d 933 (“An issue is
not ripe for appeal if there exists no more than a difference of
opinion regarding the hypothetical application of [law] to a
situation in which the parties might, at some future time, find
themselves.” (citation and internal quotation marks omitted)); cf.
State v. Ortiz, 1999 UT 84, ¶¶ 1–5, 987 P.2d 39 (holding that
defendants’ challenge to a sentencing structure before conviction
was not ripe for review). We thus conclude that the Steeds may
challenge the district court’s refusal to vacate the tax penalties
and interest imposed as part of their sentences.
¶10 The State also argues that to allow the Steeds to litigate a
refund “exceeds the scope of the [Utah] Supreme Court’s
mandate” to enter a judgment of acquittal on remand. To
support its contention, the State relies on Utah Department of
Transportation v. Ivers, 2009 UT 56, 218 P.3d 583, and J. Pochynok
Co. v. Smedsrud, 2007 UT App 88, 157 P.3d 822. These cases are
inapposite.
¶11 In Ivers, a fast-food restaurant sued for loss of view due to
a Utah Department of Transportation (UDOT) construction
project. Ivers, 2009 UT 56, ¶ 1. On appeal, our supreme court
“addressed whether damages were awardable for [the] loss of
view where the view-impairing structure was not built on the
condemned property but was part of the project for which the
property was condemned.” Id. The case was remanded to
20141044-CA 6 2017 UT App 6State v. Steed
determine whether the “condemned property was essential to
the project, and if so, . . . the district court [was] to award the
restaurant appropriate damages.” Id. On remand “UDOT
argued, for the first time, that the statute granted it the right to
amend its taking at any time during the course of the
proceedings.” Id. ¶ 7. The district court allowed UDOT to amend
its complaint to “no longer [claim the taking of] the restaurant’s
right of view.” Id. ¶¶ 1, 7. On appeal the second time, the
supreme court “conclude[d] that the district court violated [its]
mandate” because allowing UDOT to amend its complaint was
beyond the scope of the remand. Id. ¶¶ 14–15, 20. Thus in Ivers,
the remand involved a change of claim. In this case, the parties
are merely arguing about the consequences of an acquittal, not
changing the scope of the action.
¶12 In Pochynok, the prevailing party, the Smedsruds,
successfully garnished $37,585 from Pochynok for attorney fees
and costs. J. Pochynok Co., 2007 UT App 88, ¶ 4. On appeal, this
court affirmed the trial court’s decision on the award of attorney
fees and costs. Id. ¶ 5. Our supreme court granted certiorari and
reversed the award, “directing this court to remand [the case] to
the trial court for a factual determination of awards and offsets,
followed by a ruling on who [was] the successful party . . . and
whether an award of attorney fees . . . [was] proper.” Id. (citation
and internal quotation marks omitted). Back in the trial court,
Pochynok filed a motion to set aside the garnishment and to
reinstate a mechanics’ lien. Id. ¶ 6. The trial court subsequently
denied the motion and determined that the Smedsruds were the
prevailing party and again awarded them attorney fees and
costs. Id. On appeal a second time, Pochynok asserted the trial
court erred in denying its motion to reinstate the lien and set
aside the garnishment. Id. ¶ 15. But this court stated that “these
issues were not before the trial court on remand” and it would
not address them. Id. The “original challenge to the garnishment
. . . was unsuccessful” on the first appeal and “not accepted for
review under the Utah Supreme Court’s writ of certiorari” and
20141044-CA 7 2017 UT App 6State v. Steed
thus should not have been entertained by the trial court on
remand. Id. ¶ 16. Thus, as the Steeds correctly point out, “the
question was whether the trial court was free to reconsider a
garnishment order that had been specifically appealed and
affirmed. Obviously, it was not.” That is not the case here.
¶13 We conclude that these cases are distinguishable from the
one before us and in no way preclude the relief the Steeds
request.
I. Tax Penalties and Interest
¶14 The district court denied the Steeds’ request for a refund
of the penalties and interest they paid on back taxes because the
Steeds admitted they had not filed their tax returns for the years
in question and because the Tax Commission has
“statutory authority” independent of a criminal conviction “to
charge penalties and interest.” The court also based its decision
on “the fact that [the Steeds] worked with the Utah State Tax
Commission to agree upon taxes due along with penalties and
interest.” 9
¶15 The Steeds contend that because their convictions were
reversed, “the court’s jurisdiction to impose restitution
disappeared” and “[d]ue process therefore requires the return of
the penalties and interest.” We agree.
9. At the presentencing hearing, the Steeds agreed to accept the
Tax Commission’s figures for the taxes they owed. At
sentencing, they were ordered to work with the Tax Commission
to determine the amount of restitution, including penalties and
interest. There is no indication in the record that the Steeds
collaborated with the Tax Commission on penalties and interest
before being ordered to do so by the court. Thus, these amounts
were determined after sentencing and have no bearing on the
scope of relief they are entitled to upon being acquitted.
20141044-CA 8 2017 UT App 6State v. Steed
¶16 Restitution orders are part of sentencing. See State v.
Cabrera, 2007 UT App 194, ¶¶ 11–12, 163 P.3d 707; see also State v.
Laycock, 2009 UT 53, ¶ 18, 214 P.3d 104 (stating that
“restitution . . . is a part of a criminal sanction imposed by the
state”). A sentence is part of a conviction and is therefore
necessarily implicated in an acquittal. See State v. Walker, 2002 UT
App 290, ¶ 11, 55 P.3d 1165 (“[I]n the technical legal sense,
sentence is ordinarily synonymous with judgment, and denotes
the action of a court of criminal jurisdiction formally declaring to
the accused the legal consequences of the guilt which he has
confessed or of which he has been convicted.” Accordingly,
“under Utah law a trial court must impose a sentence in order to
create a final, appealable order.” (citation and internal quotation
marks omitted)). Thus, when the Steeds were acquitted of the
charges underlying their convictions, the court no longer had
jurisdiction to impose a sentence, including the restitution order
that was part of the sentence. See In re Barton, 21 P. 998, 999 (Utah
1889) (“If it is found that no crime has been committed, the
jurisdiction of the court ceases . . . .”) Because the conviction has
been undone, the sentence is also necessarily null.
¶17 In this case, the tax penalties and interest were ordered as
part of restitution. The district court judge ordered the
restitution for the failure-to-file counts to be “the tax due” and
stated, “I will add to that the 10 percent failure to file fee and the
10 percent late payment fee . . . . I’ll also include interest at the
statutory rate . . . .” Because the restitution order was part of the
sentence, it is no longer valid, and the obligation to pay penalties
and interest as part of that order is now also void.
¶18 Although the Tax Commission could have assessed
penalties and interest pursuant to section 59-1-401 of the Utah
Code, these are civil assessments that, absent a criminal
proceeding, would have been imposed through a different
process. See Utah Code Ann. § 59-1-401(2)(c)(i)(B), (3)(b)(i)(B),
(14) (LexisNexis 2016); see also State v. Steed, 2014 UT 16, ¶ 22, 325
20141044-CA 9 2017 UT App 6State v. Steed
P.3d 87 (“A defendant’s failure to file without a corresponding
intent gives rise only to civil penalties . . . .”). And even though it
is possible to assess penalties and interest under the civil tax
code, the Steeds would need to be afforded separate due process
in a separate civil proceeding. Cf. State v. Lindquist, 674 P.2d
1234, 1236, 1238 (Utah 1983) (stating that a defendant who was
committed to the Utah State Hospital under both criminal and
civil statutes “[was] entitled to the full procedural protections
inherent in both commitment statutes, including the hearing
requirements of both”). We therefore conclude the Steeds are
entitled to a refund of the tax penalties and interest assessed as
part of the criminal restitution order. 10
II. Costs of Incarceration
¶19 The district court determined that the Steeds were not
entitled to a refund of the money they paid Wasatch County to
serve their time in the Wasatch County jail because they were
ordered to “serve their time in Salt Lake County jail” and
“Defendants chose to enter into a private contract with Wasatch
County.” The court concluded,
While the Defendants were required to serve a
period of incarceration, they voluntarily assumed
the costs associated with serving that time in
Wasatch County jail. . . . [T]he money paid to
Wasatch County was the result of a civil contract
entered into by Wasatch County and Defendants
10. The State also argues that this court cannot compel the Tax
Commission to refund these assessments because the
Commission is not a party to the case. We doubt that compulsion
would be required for the Commission to discharge its court-
determined responsibility. And, of course, the Commission may
be brought in as a party on remand if necessary.
20141044-CA 10 2017 UT App 6State v. Steed
and was not paid as a fine or restitution in the
underlying criminal action.
¶20 The Steeds argue they should be refunded the costs of
incarceration because their incarceration was not voluntary,
stating, “[t]his was not a voluntary stay as it would have been if
they checked into the Grand America Hotel. [The Steeds’]
agreement to pay the costs of incarceration was extracted
pursuant to the coercive power of the convictions, just like the
fines and restitution were extracted from them.” But the Steeds
do not address the primary basis for the court’s decision: that
they voluntarily chose to transfer to Wasatch County fully
understanding that they would bear the cost of the change of
location, and, more importantly, that this arrangement was the
result of a civil contract between the Steeds and Wasatch County.
“Because [the Steeds] fail[] to address the basis of the district
court’s ruling, we reject this challenge.” See Golden Meadows
Props., LC v. Strand, 2010 UT App 257, ¶ 17, 241 P.3d 375. “[W]e
will not assume [a party’s] burden of argument and research.”
Id. (alterations in original) (citation and internal quotation marks
omitted). Accordingly, we affirm the district court’s ruling on
the costs of incarceration. 11
11. It may be that the Steeds could have been entitled to a refund
of the costs of incarceration under Utah Code section 76-3-
201(6)(d), which states, “If on appeal the defendant is found not
guilty of the criminal activity . . . and that finding is final . . . , the
county shall reimburse the defendant for restitution the
defendant paid for costs of incarceration.” Utah Code Ann. § 76-
3-201(6)(d) (LexisNexis Supp. 2016). But it is not clear whether
this statute applies if a civil contract is in place and the Steeds do
not make this argument. Indeed, they do not address this statute
at all. Consequently, we do not address it further. See O’Dea v.
Olea, 2009 UT 46, ¶ 21, 217 P.3d 704 (“Because [the party] did not
(continued…)
20141044-CA 11 2017 UT App 6State v. Steed
III. Costs of Probation
¶21 The district court determined that the Steeds are not
entitled to a refund of the fees they paid to Adult Probation and
Parole. It based its decision on State v. Parker, 872 P.2d 1041(Utah Ct. App. 1994). In Parker, the defendant “successfully
appealed his burglary convictions” and “the trial court
[subsequently] entered an order dismissing the criminal
case . . . , thereby vacating his convictions.” Id. at 1043. The
defendant “sought reimbursement for the fees and fines he paid
following his conviction,” including fees he paid to a “secure
residential facility run by the State Department of Corrections
for parolees and probationers.” Id. at 1042–43. This court
determined that the defendant was not entitled to a return of the
fees paid for probation because the “fees are part of the
rehabilitative process rather than punitive, and . . . [the
defendant] received a benefit for those fees.” 12 Id. at 1049. “The
purposes of probation are reform and rehabilitation rather than
punishment.” Id. (citation and internal quotation marks omitted).
A subsequent case from the Idaho Court of Appeals, relying on
Parker, concluded that “requiring the payment of fees to defray
costs of supervision on probation, if possible to perform, is
reasonable and has a rehabilitative effect.” State v. Walker, 887
P.2d 53, 56–57 (Idaho Ct. App. 1994). Here, the district court
(…continued)
raise this argument below, [it] did not preserve it and we will
not address it.”).
12. State v. Parker, 872 P.2d 1041 (Utah Ct. App. 1994), is a
fractured opinion. Judge Billings wrote the majority opinion, but
neither Judge Davis nor Judge Greenwood concurred in her
analysis of the return of fees. Judge Greenwood concurred with
Judge Davis as to the return of fees, and thus the lead opinion is
not the holding of the court on that issue. Id. at 1048, 1051.
20141044-CA 12 2017 UT App 6State v. Steed
determined that, “[g]iven the conclusions by both the Utah
Court of Appeals and the Idaho Court of Appeals, . . . it would
be inappropriate to refund the fees paid by Defendants to Adult
Probation and Parole . . . because Defendants actually received
the State’s supervision services.”
¶22 The Steeds contend that Parker does not preclude a refund
of the costs of probation. In their view, “Parker supports [a]
refund” because “[u]nlike the treatment the defendant in Parker
received, the Steeds received no treatment.” Instead, the Steeds
assert that their probation “was clearly punitive” and the
periods of incarceration “were not therapeutic.”
¶23 But our supreme court has determined that the purpose
of probation is reform and rehabilitation generally. Baine v.
Beckstead, 347 P.2d 554, 557 (Utah 1959). And the court has not
distinguished between probation where therapeutic treatment is
prescribed and probation that does not include therapeutic
treatment. See id. Further, other courts have also determined that
because “the purpose of probation is primarily rehabilitative,”
where the State provided supervision services, refunds for
probation supervision fees are appropriately denied. People v.
Noel, 134 P.3d 484, 487 (Colo. App. 2005); see also Walker, 887 P.2d
at 57.
¶24 We conclude the district court appropriately denied the
Steeds’ request for a refund of the costs of probation, even
though we acknowledge that this result is troubling at an
intuitive level.
CONCLUSION
¶25 We conclude that because the Steeds’ convictions were
reversed, the restitution order including tax penalties and
interest is void, and they are entitled to a refund of those
assessments. Because the Steeds have not addressed the basis for
20141044-CA 13 2017 UT App 6State v. Steed
the district court’s ruling that they are not entitled to a refund of
the costs of incarceration, we affirm that determination. We
likewise affirm the court’s determination that the Steeds are not
entitled to a refund of the costs of probation paid to Adult
Probation and Parole.
¶26 Affirmed in part and reversed in part.
20141044-CA 14 2017 UT App 6