State v. Wilkinson

SUPREME COURT OF ARIZONA
En Banc

STATE OF ARIZONA, ) Arizona Supreme Court
) No. CV-00-0365-PR
Petitioner, )
) Court of Appeals
v. ) Division One
) No. 1 CA-SA 00-0054
THE HONORABLE MICHAEL O. )
WILKINSON, Judge of the SUPERIOR ) Maricopa County Superior
COURT OF THE STATE OF ARIZONA, ) Court
in and for the COUNTY of ) No. LC 1999-000438
MARICOPA, )
) Phoenix Municipal Court
Respondent Judge, ) Nos. 8707011-12-1C
) and 8705327-1C
JOHN R. PORTER, )
)
Real Party in Interest. ) O P I N I O N
)
)
__________________________________)

Appeal from the City of Phoenix Municipal Court
The Honorable Richard A. Garcia
Nos. 8707011-12-1C and 8705327-1C
AFFIRMED IN PART; REVERSED IN PART; REMANDED
________________________________________________________________

Special Action from the Superior Court of Arizona
in Maricopa County
The Honorable Michael O. Wilkinson, Judge
VACATED
________________________________________________________________

Opinion of the Court of Appeals
Division One
198 Ariz. 376, 10 P.3d 634 (2000)
VACATED
________________________________________________________________

Peter A. Van Haren, Phoenix City Attorney Phoenix
By Bianca E. Bentzin, Assistant City Prosecutor
Attorneys for State of Arizona
Hurley & Mahowald Phoenix
By Michael E. Hurley
and Michael James Wicks
Attorneys for John R. Porter

Janet Napolitano, Attorney General Phoenix
By Randall M. Howe, Chief Counsel
Criminal Appeals Section
and Diane Leigh Hunt, Assistant Attorney General Tucson
Attorneys for Amicus Curiae State of Arizona

Richard M. Romley Phoenix
Maricopa County Attorney
By Diane Gunnels Rowley, Deputy County Attorney
Attorneys for Amicus Curiae Maricopa County
_________________________________________________________________

M c G R E G O R, Vice Chief Justice

¶1 We granted review to consider whether and to what extent

the courts can order restitution for victims of an unlicensed

contractor who performs incomplete and faulty work. We conclude

that a trial court may award restitution when and to the extent

that the criminal act of contracting without a license directly

causes a victim’s economic loss.

I.

¶2 John R. Porter, representing himself to be a licensed

contractor, separately contracted with T.S. and N.L. (the victims)

to perform remodeling work on their homes. T.S. purchased needed

materials and paid Porter $2,854.77. N.L. paid Porter at least

$9,040.27. In both instances, Porter failed to complete the work

and did some of the work improperly. The victims each filed a

complaint with the Registrar of Contractors, alleging both poor

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workmanship and non-performance. The Registrar of Contractors’

investigation revealed that Porter did not hold a valid

contractor’s license.

¶3 Porter was charged and convicted in Phoenix Municipal

Court of two counts of acting in the capacity of a contractor

without holding a contractor’s license, a class one misdemeanor.1

Arizona Revised Statutes (A.R.S.) §§ 32-1151, 32-1164. The

municipal judge conducted a restitution hearing pursuant to A.R.S.

section 13-603, and ordered Porter to pay $22,429.11 to T.S. and

$22,365.67 to N.L. The judge calculated these awards by adding the

amounts each victim had paid to Porter to the estimated cost of

repairing Porter’s faulty work and finishing work he left

incomplete.

¶4 Porter appealed the restitution order to the Maricopa

County Superior Court. Judge Wilkinson vacated the restitution

awards, stating that the victims’ economic losses were caused not

by Porter’s failure to procure a contractor’s license, but by

“shoddy and incomplete work.” State v. Porter, No. LC 1999-000438,

Minute Entry Order at 2 (Dec. 4, 1999). Having no further right to

appeal, the State filed a special action in the court of appeals.

The court of appeals accepted jurisdiction but denied relief,

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The court also convicted Porter of one count of
advertising to provide contracting services without first obtaining
a contractor’s license. Ariz. Rev. Stat. (A.R.S.) § 32-1165. The
trial judge did not base any restitution award on this conviction.

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holding that the economic loss the victims suffered was a “remote,

indirect, or consequential result” of Porter’s crime, and therefore

beyond the scope of criminal restitution. State v. Wilkinson, 198

Ariz. 376, 381 ¶ 22, 10 P.3d, 634, 639 ¶ 22 (App. 2000).

¶5 We granted review to determine whether a victim can

recover restitution from a person convicted of contracting without

a license in violation of A.R.S. section 32-1151.2 At the Court’s

request, the parties separately argued the question whether

Arizona’s restitution statutes are consistent with the Arizona

Constitution’s guarantee of the right to a civil jury trial.

II.

A.

¶6 To implement the important constitutional right of crime

victims to recover prompt restitution,3 the legislature enacted

several statutes that define the circumstances under which and the

extent to which a court may award restitution. Section 13-603

directs the court to “require the convicted person to make

restitution” to the victim, “in the full amount of the economic

loss as determined by the court . . . .” A.R.S. § 13-603.C

(emphasis added). Economic loss includes

2
We exercise jurisdiction pursuant to
Article VI, Section 5.3 and Arizona Rules of Procedure for Special
Actions section 8(b).
3
Ariz. Const. art. II, § 2.1.A.8.

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 any loss incurred by a person as a result of the
commission of an offense. Economic loss includes lost
interest, lost earnings and other losses which would not
have been incurred but for the offense. Economic loss
does not include losses incurred by the convicted person,
damages for pain and suffering, punitive damages or
consequential damages.

A.R.S. § 13-105.14 (emphasis added). Section 13-804.B further

defines the scope of restitution by directing the court to consider

“all losses caused by the criminal offense or offenses for which

the defendant has been convicted.” A.R.S. § 13-804.B (emphasis

added).

¶7 These statutes, considered together, define those losses

for which restitution should be ordered. First, the loss must be

economic. Second, the loss must be one that the victim would not

have incurred but for the defendant’s criminal offense. As the

court of appeals noted, however, “‘but for’ causation does not

suffice to support restitution, for if it did, restitution would

extend to consequential damages. Yet our criminal code expressly

provides the contrary.” Wilkinson, 198 Ariz. at 380 ¶ 19, 10 P.3d

at 638 ¶ 19. By eliminating consequential damages, the statutory

scheme imposes a third requirement: the criminal conduct must

directly cause the economic loss. If the loss results from the

concurrence of some causal event other than the defendant’s

criminal conduct, the loss is indirect and consequential and cannot

qualify for restitution under Arizona’s statutes. See State v.

Lindsley, 191 Ariz. 195, 198, 953 P.2d 1248, 1251 (App. 1997). We

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hold, therefore, that the statutes direct a court to award

restitution for those damages that flow directly from the

defendant’s criminal conduct, without the intervention of

additional causative factors.

B.

¶8 Applying the above standards, the court of appeals

concluded that Porter’s victims could not recover any restitution.

We disagree in part.

¶9 When Porter, presenting himself as a licensed contractor,

entered agreements with T.S. and N.L. to provide contracting

services, he violated A.R.S. section 32-1151. As a direct result

of Porter’s offer to act as a licensed contractor, T.S. and N.L.

agreed to pay, and did pay, all or a portion of the amounts due

under their agreements with Porter. Porter’s criminal actions

directly caused those losses. Indeed, the original conception of

restitution, and the form with the most direct link to criminal

conduct, is that

of forcing the criminal to yield up to his victim the
fruits of the crime. The crime is thereby made worthless
to the criminal. This form of criminal restitution is
sanctioned not only by history but also by its close
relationship to the retributive and deterrent purposes of
criminal punishment.

United States v. Fountain, 768 F.2d 790, 800 (7th Cir. 1985).

Under Arizona’s statutes, these victims are entitled to recover

their payments to Porter as restitution.

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¶10 A different result obtains, however, as to the expenses

the victims incurred because Porter failed to complete the work he

contracted to do or did so in a faulty manner. We agree with the

court of appeals that Porter’s criminal conduct of contracting

without a license did not cause these losses. These losses would

not have occurred without the concurrence of a second causal event,

Porter’s unworkmanlike performance. Therefore, the losses incurred

as a result of Porter’s poor and unfinished work constitute

indirect damages and cannot qualify for restitution.

C.

¶11 Our conclusion that the restitution statutes encompass

only damages directly caused by the criminal conduct involved not

only remains faithful to the statutory language, but also prevents

the restitution statutes from conflicting with the right to a civil

jury trial preserved by Arizona Constitution Article II, Section

23. Article II, Section 23 protects the right to a jury trial as

it existed when Arizona’s constitution was adopted. Rothweiler v.

Superior Court, 100 Ariz. 37, 41, 410 P.2d 479, 482 (1966); see

also Hoyle v. Superior Court, 161 Ariz. 224, 228, 778 P.2d 259, 263

(App. 1989) (discussing the extent of the common law right to jury

trial in 1910).

¶12 Potential problems arise if we too broadly combine civil

liability with criminal sentencing. As the court of appeals has

noted:

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 If reparations as a condition of probation are to
include elements beyond mere “special damages” we believe
a trial court must use great caution. The sentencing
phase of a criminal case is not the ideal forum for the
disposition of a [civil] case. Both parties are deprived
of a jury; the defendant may be limited in showing
causation or developing a defense of contributory
negligence or assumption of risk.4

State v. Garner, 115 Ariz. 579, 581, 566 P.2d 1055, 1057 (App.

1977).

¶13 By limiting restitution to those damages that flow

directly from a defendant’s criminal conduct, the legislature

focused upon the primary purposes of restitution: reparation to

the victim and rehabilitation of the offender. State v. Howard,

163 Ariz. 47, 51, 785 P.2d 1235, 1239 (App. 1989). Porter was

convicted of contracting without a license. Requiring him to pay

restitution for damages that resulted directly from the criminal

conduct serves to rehabilitate him and thereby to prevent him from

again violating A.R.S. section 32-1151. The penalty thus fits

squarely within the goals of criminal punishment and does not

deprive him of a civil trial to which he might otherwise be

entitled.

D.

¶14 The majority opinion of the court of appeals also

suggested that the reason the victims cannot recover damages for

4
In fact, the sentencing judge indicated that T.S. and
N.L. may not have been able to recover in a civil action because
they failed to investigate whether Porter held a valid contractor’s
license. (Hr’g Tr. at 75-76).

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the harm caused by Porter’s unworkmanlike performance is that such

damage is not an element of the crime of which he was convicted.

Wilkinson, 198 Ariz. at 381 ¶ 22, 10 P.3d at 639 ¶ 22. In his

dissent, Judge Ryan took issue with this statement, noting that

restitution is available for damage directly caused by criminal

conduct, even if the damage is not an element of the crime. Id.

at 383 ¶ 34, 10 P.3d at 641 ¶ 34 (Ryan, J. dissenting). As the

dissent stated, although breaking a window is not an element of the

crime of burglary, see A.R.S. § 13-1507.A, a burglar may be

required to pay restitution for a window he breaks when entering,

because his criminal conduct directly causes the damage. On this

issue we agree with the dissent: the conduct causing damage need

not be an element of the crime for which the defendant is convicted

to make the loss restitution-eligible. The test is whether

particular criminal conduct directly causes the victim’s loss. In

this case, damage caused by Porter’s unworkmanlike performance does

not meet the statutory requirements for restitution because the

criminal conduct did not directly cause the damage, not because the

statute omits unworkmanlike conduct as an element of the crime of

which Porter was convicted.

IV.

¶15 The State also argues that Porter’s conduct directly

caused the victims’ harm because they were barred from recovery

under A.R.S. section 32-1132. Section 32-1132 establishes a fund,

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administered by the Registrar of Contractors, to compensate persons

injured by residential contractors. A.R.S. § 32-1132.A. Because

Porter was unlicensed, he was not, by definition, a residential

contractor. The State contends that the victims’ lack of access to

the fund flowed directly from Porter’s criminal conduct.

¶16 The State’s argument confuses damage causation with

access to a particular source of recovery. The loss the victims

suffered consisted of the monies they paid to Porter, a loss

directly caused by Porter’s criminal conduct, and the loss they

suffered from Porter’s failure or inability to perform the work

properly, which is not a direct result of his acting without a

license. The necessary direct causal relationship between the

criminal conduct and the claimed losses must remain the focus of

the restitution statutes. The fact that the victims have no

recourse to the statutory recovery fund affects not their economic

loss, but rather the sources from which they can seek payment of

losses caused by a factor other than Porter’s criminal conduct.

V.

¶17 For the foregoing reasons, we vacate the opinion of the

Court of Appeals, vacate the judgment of the Superior Court, and

remand to the Phoenix Municipal Court for a new restitution

hearing, the restitution award to be made in a manner consistent

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with this opinion.

___________________________________
Ruth V. McGregor, Vice Chief Justice

CONCURRING:

____________________________________
Charles E. Jones, Chief Justice

____________________________________
Thomas A. Zlaket, Justice

____________________________________
Stanley G. Feldman, Justice

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