Gilbert Prosecutor v. Hon. downie/matykiewicz

• Court: Arizona Supreme Court
• Decided: August 4, 2008
• Status: Published

Opinion

SUPREME COURT OF ARIZONA En Banc

TOWN OF GILBERT PROSECUTOR’S ) Arizona Supreme Court OFFICE, ) No. CV-07-0300-PR ) Petitioner, ) Court of Appeals ) Division One v. ) No. 1 CA-SA 07-0078 ) THE HONORABLE MARGARET H. DOWNIE, ) Maricopa County JUDGE OF THE SUPERIOR COURT OF ) Superior Court THE STATE OF ARIZONA, in and for ) No. LC2006-000817-001DT the County of Maricopa, ) ) Gilbert Municipal Court Respondent Judge, ) No. 05TR192310C ) MITCHELL MICHAEL MATYKIEWICZ, ) ) O P I N I O N Real Party in Interest. ) _________________________________ )

Appeal from the Town of Gilbert Municipal Court The Honorable John E. Hudson, Judge

REMANDED ________________________________________________________________

Special Action from the Superior Court in Maricopa County The Honorable Margaret H. Downie, Judge

AFFIRMED ________________________________________________________________

Opinion of the Court of Appeals, Division One 216 Ariz. 30, 162 P.3d 669 (2007)

REVERSED ________________________________________________________________

LYNN R. AROUH, GILBERT TOWN PROSECUTOR Gilbert By Denise E. Boode, Assistant Town Prosecutor Attorneys for Town of Gilbert Prosecutor’s Office LAW OFFICES OF MICHAEL J. DEW Phoenix By Michael J. Dew Attorneys for Mitchell Michael Matykiewicz

CARON L.B. CLOSE, SCOTTSDALE CITY PROSECUTOR Scottsdale By Anna C. Johnston, Assistant City Prosecutor Attorneys for Amicus Curiae City of Scottsdale

AARON J. CARREON-AINSA, PHOENIX CITY PROSECUTOR Phoenix By Rebecca M. Gore, Assistant City Prosecutor Attorneys for Amicus Curiae City of Phoenix ________________________________________________________________

B E R C H, Vice Chief Justice

¶1 We have been asked to decide whether the amount of

restitution to be paid by a defendant convicted of contracting

without a license may be reduced by any value conferred on the

homeowner. We hold that such a reduction is appropriate.

I. FACTS AND PROCEDURAL HISTORY

¶2 In January 2005, Richard and Felicita Rada hired

Mitchell Matykiewicz to perform remodeling work on their home in

Gilbert, Arizona. Over the course of nine months the Radas paid

$52,784.22 to Matykiewicz. Matykiewicz claims to have hired

licensed subcontractors to do the work, which included

installing a pool, barbeque, and fire pit; moving the hot tub

from one location to another; removing bushes, tree stumps, and

gravel from the back yard; raising and painting the walls all

around the house; performing interior remodeling work, such as

moving sinks and installing doors; and obtaining the required

permits from the Town of Gilbert. - 2 - ¶3 Mr. Rada discovered that Matykiewicz was not properly

licensed and filed a complaint with the Registrar of

Contractors. The Town of Gilbert charged Matykiewicz with

contracting without a license in violation of Arizona Revised

Statutes (“A.R.S.”) section 32-1151 (2008).1 The municipal court

convicted Matykiewicz and, based on its reading of State v.

Wilkinson, 202 Ariz. 27, 39 P.3d 1131 (2002), ordered him to pay

restitution of $52,784.22, the entire amount the Radas had paid.

The court also placed Matykiewicz on probation and imposed a

fine of $1855.

¶4 On appeal, the superior court vacated the restitution

order. Concluding that Wilkinson decided only whether damages

for incomplete or faulty work were recoverable as restitution,

the superior court remanded the case for a determination of the

Radas’ economic loss.

¶5 The court of appeals accepted jurisdiction of the Town

of Gilbert’s petition for special action, granted relief,

reversed, and, over a dissent, reimposed the $52,784.22

restitution order. Town of Gilbert Prosecutor’s Office v.

Downie, 216 Ariz. 30, 35, ¶ 19, 162 P.3d 669, 674 (App. 2007).

The majority held that Wilkinson requires disgorgement of “all

1 Unless otherwise indicated, we cite the current version of the applicable statutes, as they have not been changed since the criminal conduct occurred.

- 3 - payments made by victims to an unlicensed contractor under a

contract.” Id. at 34, ¶ 14, 162 P.3d at 673. This amount, it

concluded, “constitute[s] economic loss subject to restitution.”

Id. The majority noted that, while the result seems harsh, such

a restitution order would help deter unlicensed contractors.

Id. at 34-35, ¶¶ 16-17, 162 P.3d at 673-74. The dissent

countered that Wilkinson did not create a per se rule of

disgorgement of all proceeds. Instead, Wilkinson held that the

trial court could not order as restitution additional sums for

consequential damages caused by faulty or incomplete work. Id.

at 35, ¶ 20, 162 P.3d at 674 (Hall, J., dissenting). The

dissent concluded that the restitution inquiry should be guided

by general restitution principles. Id. ¶¶ 20-21.

¶6 We granted Matykiewicz’s petition for review to decide

this issue of statewide importance and to clarify our holding in

Wilkinson. We have jurisdiction pursuant to Article 6, Section

5(3) of the Arizona Constitution.

II. DISCUSSION

¶7 The Victims’ Bill of Rights gives victims the right to

prompt restitution for any loss they incur as a result of a

crime. Ariz. Const. art. 2, § 2.1(A)(8). Arizona’s criminal

code implements this constitutional guarantee by requiring “the

convicted person to make restitution to . . . the victim of the

- 4 - crime . . . in the full amount of the [victim’s] economic loss.”

A.R.S. § 13-603(C) (2001).

¶8 In ascertaining the victim’s “economic loss,” the

sentencing court must “consider all losses caused by the

criminal offense or offenses for which the defendant has been

convicted.” Id. § 13-804(B); see also id. § 13-105(14)

(defining economic loss). The court must then exclude “damages

for pain and suffering, punitive damages [and] consequential

damages.” Id. § 13-105(14). The “economic loss” recoverable as

restitution thus includes all “losses” the victim incurred as a

result of the criminal offense that are not excluded by § 13-

105(14).

¶9 In Wilkinson, we identified a three-part test for

determining which losses qualify for restitution under § 13-

603(C). “First, the loss must be economic. Second, the loss

must be one that the victim would not have incurred but for the

defendant’s criminal offense.” Wilkinson, 202 Ariz. at 29, ¶ 7,

39 P.3d at 1133. Third, “the criminal conduct must directly

cause the economic loss.” Id. In Wilkinson, we focused on the

third part of the test – whether the defendant’s criminal

actions directly caused the damages that arose from the

unlicensed contractor’s “shoddy and incomplete work.” Id. at

28-30, ¶¶ 4, 7-13, 39 P.3d at 1132-34. In this case, we analyze

- 5 - the first part of the test – how to ascertain “economic loss.”

We must decide whether, in determining how much “economic loss”

a victim has suffered, the court may consider any value

conferred on the homeowner. Resolution of this issue is a

question of law, which we review de novo. See State v. Getz,

189 Ariz. 561, 563, 944 P.2d 503, 505 (1997).

A. The meaning of “loss”

¶10 Because statutory language is the best evidence of the

legislature’s intent, Mejak v. Granville, 212 Ariz. 555, 557,

¶ 8, 136 P.3d 874, 876 (2006), we begin by examining the

criminal code to find the meaning of the term “loss.” Arizona’s

criminal code defines “economic loss” as “any” or “all” losses,

A.R.S. §§ 13-105(14), -804(B), but does not define the word

“loss” in the context of restitution.2 The code similarly does

not specify whether a determination of “loss” permits

consideration of any benefits conferred on the victim.

¶11 “Loss” is commonly defined as the difference between

what was had before and after a specified event. E.g.,

2 The only definition of “loss” in Arizona’s criminal code appears in a provision establishing crime victim accounts if defendants sell media rights. See A.R.S. § 13-4202 (2001). This definition, which “includes the value of any property damaged, destroyed or taken, the cost of medical treatment or counseling, lost wages and any other damage suffered as a result of the crime,” applies only to media rights cases. Id. § 13- 4202(M).

- 6 - Webster’s College Dictionary 778 (2d ed. 1997) (defining “loss”

to mean “the act of losing possession of something” or “an

amount or number lost”); see also A.R.S. § 1-213 (2002)

(requiring that words be given their ordinary meaning). The

restitution provisions of the criminal code confirm that the

legislature contemplated a similar definition of “loss” as being

“out” something as a result of a crime. Section 13-804(E), for

example, provides that if a victim receives compensation from a

collateral source to cover economic loss caused by criminal

conduct, the court must reduce the victim’s recovery by that

amount. Requiring reduction of a victim’s recovery for sums

already received demonstrates the legislature’s intent that the

victim’s “loss” reflect benefits conferred. See Moreno v.

Jones, 213 Ariz. 94, 99, ¶ 28, 139 P.3d 612, 617 (2006) (looking

to other provisions in a statutory scheme to assist in

determining meaning).

¶12 Consistent with this understanding, Arizona courts

credit victims with the value of returned property when

considering restitution. E.g., State v. Ferguson, 165 Ariz.

275, 277-78, 798 P.2d 413, 415-16 (App. 1990) (concluding that

the trial court erred by failing to take into account evidence

that stolen property had been returned). The concept that

restitution compensates victims only for loss actually suffered

- 7 - is well established. See, e.g., ABA Standards for Criminal

Justice § 18-3.15(c)(i) (3d ed. 1994) (limiting restitution “to

the greater of the benefit to an offender or actual loss to

identified persons or entities”).

¶13 Reducing “loss” by any benefits conferred furthers the

restitutory purposes of making the victim whole, State v.

Guilliams, 208 Ariz. 48, 52, ¶ 12, 90 P.3d 785, 789 (App. 2004);

In re Kory L., 194 Ariz. 215, 219, ¶ 10, 979 P.2d 543, 547 (App.

1999), and rehabilitating the offender, Wilkinson, 202 Ariz. at

30, ¶ 13, 39 P.3d at 1134; State v. Iniguez, 169 Ariz. 533, 536,

821 P.2d 194, 197 (App. 1991). Restitution is not meant to

penalize the defendant; that function is served by

incarceration, fines, or probation. See Kory L., 194 Ariz. at

219, ¶ 10, 979 P.2d at 547. Restitution therefore should not

compensate victims for more than their actual loss. See

generally George Blum, Measure and Elements of Restitution to

Which Victim is Entitled Under State Criminal Statute, 15

A.L.R.5th 391, § 2(b) (1993). Courts in other jurisdictions

agree. See, e.g., People v. Fortune, 28 Cal. Rptr. 3d 872, 874-

75 (Cal. Ct. App. 2005); Maurer v. State, 939 So. 2d 234, 235

(Fla. Dist. Ct. App. 2006); State v. Baxter, 118 P.3d 1291, 1293

(Kan. Ct. App. 2005); State v. Beavers, 3 P.3d 614, 616 (Mont.

2000), overruled on other grounds by State v. Herman, ___ P.3d

- 8 - ___, 2008 WL 2221908 (Mont. May 29, 2008); People v.

Tzitzikalakis, 864 N.E.2d 44, 46 (N.Y. 2007).

¶14 Limiting the victim’s restitution to the amount

necessary to recompense direct losses comports with the language

of the restitution statutes, makes practical sense, and

preserves the proper place and function of a civil jury to

determine a victim’s actual damages, including damages for pain

and suffering, punitive damages, and consequential damages. See

A.R.S. §§ 13-807 (2001) (providing that a restitution order

“does not preclude [a victim] from bringing a separate civil

action and proving in that action damages in excess of the

amount of the restitution order”); 13-804(G) (recognizing that

restitution is not a substitute for civil litigation because

“[t]he state does not represent persons who have suffered

economic loss”); Wilkinson, 202 Ariz. at 29-30, ¶ 11, 39 P.3d at

1133-34 (interpreting the restitution statute to avoid a

conflict with Arizona’s civil jury trial right). To hold

otherwise would upset the relationship among reparation,

retribution, and rehabilitation, and blur the distinction

between criminal restitution and recovery for ancillary damages

protected by the civil jury trial. It might also provide a

windfall to the victim and encroach into punishment for the

defendant.

- 9 - ¶15 Several jurisdictions permit reductions in restitution

for value conferred on the victim. E.g., Beavers, 3 P.3d at 616

(citing Bowman v. State, 698 So. 2d 615, 616 (Fla. Dist. Ct.

App. 1997)); Tzitzikalakis, 864 N.E.2d at 46. In Tzitzikalakis,

for example, the defendant owned a construction company that

contracted with the City of New York. 864 N.E.2d at 44-45. He

pled guilty to crimes stemming from the submission of falsified

invoices. Id. at 45. The trial court ordered restitution in

the face amount of the falsified invoices and excluded evidence

showing that the defendant completed some construction work.

Id. The New York Court of Appeals held that the trial court

erred by excluding evidence of “the fair market value of the

goods and services [the defendant] provided to the city under

the contract.” Id. at 45-46. The court observed that trial

courts “must consider not only the amount taken by [the

contractor,] but also the value of any benefit received by the

victim.” Id. at 46; see also People v. Kom, 467 N.Y.S.2d 495,

495 (N.Y. App. Term 1983) (requiring reductions for value

victims received when determining restitution to be paid by one

convicted of performing home improvement work without a

license). We find the reasoning in Tzitzikalakis persuasive.

¶16 We also find guidance in decisions interpreting the

Mandatory Victims Restitution Act of 1996 (“MVRA”), 18 U.S.C.

- 10 - § 3663A (2000 & Supp. 2007). Much like Arizona law, the MVRA

requires defendants to pay restitution to their victims. See

id. § 3663A(a)(1). The MVRA defines the amount of restitution

to be the value of property “loss” less the value “returned.”

Id. § 3663A(b)(1)(B). Several federal circuits have interpreted

“returned” to require reductions in restitution for value

conferred on victims. E.g., United States v. Swanson, 394 F.3d

520, 528 (7th Cir. 2005); United States v. Matsumaru, 244 F.3d

1092, 1109 (9th Cir. 2001).

¶17 In United States v. Shepard, for example, the defendant

embezzled funds from a hospital patient under the guise of

making improvements to the patient’s home. 269 F.3d 884, 885

(7th Cir. 2001). The Seventh Circuit concluded that the

starting point for determining restitution was the amount

embezzled from the victim. Id. at 887. From this amount, the

court subtracted expenditures made on improvements to the

victim’s home. Id. at 887-88. The court concluded that such

expenditures did not differ “in principle from taking the money

from one of [the victim’s] bank accounts and depositing it in

another.” Id. “[T]he change of the property’s form - from cash

to, say, central air conditioning –” does not mean the property

has not been “returned.” Id. at 888.

¶18 We agree with the many courts that have concluded that,

- 11 - when determining the proper amount of restitution to be paid to

a victim, consideration should be made for value conferred on

the victim.3

B. State v. Wilkinson

¶19 The Town of Gilbert argues and the court of appeals

concluded that our decision in Wilkinson created a per se rule

that the entire amount of consideration paid by the victim in an

unlicensed contractor case is the proper amount of restitution,

regardless of any benefit conferred on the victim. We disagree

that Wilkinson created such a rule. Although Wilkinson also

involved the restitution due from an unlicensed contractor, it

decided an entirely different issue from the one now facing the

court.

¶20 In Wilkinson, John Porter was convicted of contracting

without a license under § 32-1151. 202 Ariz. at 28, ¶ 3, 39

P.3d at 1132. Porter had contracted with two homeowners, T.S.

and N.L., to perform remodeling work. Id. ¶ 2. T.S. and N.L.

paid Porter $2854.77 and $9040.27, respectively. Id. At

Porter’s restitution hearing, the trial court awarded $22,429.11

to T.S. and $22,365.67 to N.L., which it calculated by “adding

3 The Town of Gilbert has cited no published opinion from any other jurisdiction holding that the entire amount of consideration paid by homeowner-victims must be disgorged as restitution, nor has our research revealed any such authority.

- 12 - the amounts each victim had paid to Porter to the estimated cost

of repairing Porter’s faulty work and finishing work he left

incomplete.” Id. ¶ 3.

¶21 This Court concluded that the consideration paid by

T.S. and N.L. was the “loss” that flowed directly from Porter’s

illegal conduct. Id. at 29, ¶ 9, 39 P.3d at 1133. Any damages

for repairing T.S’s and N.L.’s homes or completing the work were

not “direct” because those damages required the occurrence of a

second causal event unrelated to the criminal activity itself -

that is, Porter’s faulty and unprofessional performance. Id.

¶¶ 9-10.

¶22 Although Wilkinson explored the extent to which “courts

can order restitution for victims of an unlicensed contractor

who performs incomplete and faulty work,” id. at 28, ¶ 1, 39

P.3d at 1132, and more specifically, whether losses not

resulting from criminal conduct are subject to restitution, it

never addressed whether losses incurred by victim-homeowners may

be reduced by benefits conferred upon them.4 Because it did not

4 By focusing on payments made by the victim to the defendant, Wilkinson did not adopt a per se rule for all unlicensed contractor cases, but instead recognized that a victim must incur a loss to recover any restitution. A defendant can violate § 32-1151 without receiving any payments. See A.R.S. § 32-1151 (making it unlawful for an unlicensed contractor to engage in the business of contracting without a license, to submit bids or proposals, to respond to requests for

- 13 - address the issue before us, Wilkinson is not dispositive.5

¶23 We recognize the legislature’s strong interest in

protecting the public from unlicensed contractors, which is

evidenced by the onerous requirements for licensure. The

applicant seeking a license must post a bond, obtain experience

or train at an accredited institution, and pass a written

examination; he may also have to submit fingerprints for a

background check. A.R.S. § 32-1122(B)(2), (F). Harsh

qualification or proposals for construction services, to act or offer to act as a licensed contractor, or to purport to have the capacity of a licensed contractor). Because the fact of payment is not determinative as to the commission of the offense, it would be anomalous to treat such payments as conclusively establishing a right to restitution in the amount paid. 5 Our dissenting colleague asserts that Wilkinson governs the result in this case and that principles of stare decisis dictate adherence to it. We disagree. Before applying the doctrine of stare decisis, a court must first identify the legal principle entitled to respect. E.g., Michael Abramowicz & Maxwell Stearns, Defining Dicta, 57 Stan. L. Rev. 953, 957 (2005) (noting that before applying stare decisis, a court “must first determine just what that case purports to establish”). As we explained in paragraphs 19-22, Wilkinson simply did not address the issue presented here. There are good reasons not to over-read Wilkinson as holding that a homeowner is entitled to restitution for all amounts paid to an unlicensed contractor regardless of any benefits the homeowner received. Over-reading a decision can be corrosive to the rule of law because it may lead a court to ignore concerns not present in the earlier case and to embrace conclusions that are contrary to common sense or experience. This case illustrates this point; treating Wilkinson as dispositive could lead to results that are contrary to the language of the restitution statute, which contemplates that victims will recover their losses, not a windfall.

- 14 - consequences await the unlicensed contractor. Violation of

§ 32-1151 is a class one misdemeanor, A.R.S. § 32-1164(A)(2),

for which incarceration, probation, and statutory fines serve as

punishment, id. §§ 13-707, 32-1164(B). Conviction may also

disqualify the defendant from obtaining a license, § 32-1122(D),

(E).6

¶24 The State thus already has many tools with which to

punish unlicensed contractors. Reading Wilkinson to forge

another tool - a rule of total disgorgement regardless of any

benefit conferred on the victim – would unnecessarily strain

Arizona’s restitution scheme and may lead to absurd or troubling

results.

¶25 Consider, for example, the situation in which an

unlicensed contractor obtained $5000 from a homeowner to perform

construction work. Under the Town’s reading of Wilkinson, the

unlicensed contractor has committed a crime under § 32-1151 and

the homeowner has incurred a $5000 “loss.” See 202 Ariz. at 29,

¶ 9, 39 P.3d at 1133. Assume further, however, that one day

6 After Matykiewicz was convicted, the legislature amended A.R.S. § 32-1164 to require unlicensed contractors to pay transaction privilege taxes as a condition of probation. 2007 Ariz. Sess. Laws, ch. 174, § 1 (1st Reg. Sess.). This statute also demonstrates the legislature’s understanding that one convicted of contracting without a license may retain some compensation, but must pay appropriate taxes on it.

- 15 - later the unlicensed contractor decided not to do the job and

returned the $5000. To be sure, a crime has still been

committed under § 32-1151, but the homeowner has suffered no

loss. No reasonable jurist would conclude, and the legislature

could not have intended, that the unlicensed contractor must pay

$5000 in restitution in addition to the $5000 already returned.

Such an outcome would result in a windfall for the victim. The

victim would similarly receive a windfall if an unlicensed

contractor flawlessly performed all work for which the victim

contracted, but then was required to disgorge all payments.7 We

find no significant difference between returning cash, one form

of value, and returning other forms of value, such as permits,

chattels, services, or other property. See Shepard, 269 F.3d at

887-88. “Loss” is a concept rooted in value, not solely in the

exchange of money. We thus decline to read Wilkinson as

creating an inflexible rule of total disgorgement regardless of

7 The concern has been raised that requiring defendants to pay as restitution the full amount of consideration received for their services may encourage homeowners to knowingly hire unlicensed contractors because upon conviction for contracting without a license, the defendant must refund all payments. See A.R.S. § 32-1153 (preventing unlicensed contractors from bringing civil action to recover payment). Such conduct, however, might render the homeowner an accomplice and forfeit the right to restitution. See State v. Wilkinson, 198 Ariz. 376, 383, ¶ 36, 10 P.3d 634, 641 (App. 2000) (Ryan, J., dissenting), overruled by Wilkinson, 202 Ariz. at 31, 39 P.3d at 1135.

- 16 - value conferred.

¶26 We are persuaded that determining a victim’s “loss”

requires consideration of any benefits conferred on the victim.

“Most often there will be no reductions, as criminals rarely

confer a benefit on their victims.” Tzitzikalakis, 864 N.E.2d

at 47. If value is conferred, however, courts must consider

such benefits in determining a victim’s loss.

C. Remand

¶27 On remand, the trial court must determine the amount of

the Radas’ loss. While determination of a victim’s loss will

depend upon the unique facts of each case, the Radas’ payments

to Matykiewicz constitute prima facie evidence of their loss.

Wilkinson, 202 Ariz. at 29, ¶ 9, 39 P.3d at 1133. The court

must then subtract from this sum any value Matykiewicz conferred

on the Radas. This difference will usually be the victim’s

loss. To this figure, the court must apply the remaining parts

of Wilkinson’s three-part test – that is, it may not compensate

the Radas for “expenses [they] incurred because [the unlicensed

contractor] failed to complete the work he contracted to do or

did so in a faulty manner.” Id. ¶ 10.

¶28 We are aware that criminal restitution may not provide

victims the full benefit of their bargain because giving such

relief may require consideration of losses that do not flow

- 17 - directly from the crime or involve losses that are not

“economic.” But we cautioned in Wilkinson that “[p]otential

problems arise if we too broadly combine civil liability with

criminal sentencing.” Id. at 30, ¶ 12, 39 P.3d at 1134. The

concern remains valid today. We quoted with approval the

following description of the problems that may arise in not

adhering to the legislative limitation of restitution to

“economic loss”:

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

Id. (quoting State v. Garner, 115 Ariz. 579, 581, 566 P.2d 1055,

1057 (App. 1977)) (alteration in Wilkinson). Today’s decision

does not alter any rights a homeowner may have to recover any

indirect or non-economic damages in a subsequent civil action

against the unlicensed contractor. See A.R.S. § 13-807. Nor

does our decision limit any defenses an unlicensed contractor

may have in such actions. It preserves each party’s civil jury

trial right.

III. CONCLUSION

¶29 For the foregoing reasons, we reverse the opinion of

the court of appeals, affirm the judgment of the superior court, - 18 - and remand the case to the Town of Gilbert Municipal Court for

proceedings consistent with this opinion.

_______________________________________ Rebecca White Berch, Vice Chief Justice

CONCURRING:

_______________________________________ Michael D. Ryan, Justice

_______________________________________ W. Scott Bales, Justice

H U R W I T Z, Justice, concurring in part and concurring in the result

¶30 The term “economic loss” in A.R.S. §§ 13-603(C) and -

804 should be given its commonsense meaning when the case

involves contracting without a license. Thus, the victim should

receive the difference between what he paid the unlicensed

contractor and the value of what he received in return. If the

restitution statutes are read to require that the amount paid is

invariably the measure of restitution, an untenable result would

obtain – a homeowner who received flawless work from an

unlicensed contractor would be refunded the full amount paid but

would nonetheless also retain the work performed. It is

- 19 - impossible for me to view such a victim as having suffered any

loss, economic or otherwise, and I therefore concur in ¶¶ 1-18

of the majority opinion.

¶31 I write briefly, however, to address the subject that

divides the majority and the dissent – the effect to be given to

State v. Wilkinson, 202 Ariz. 27, 39 P.3d 1131 (2002). The

majority correctly notes that Wilkinson is factually

distinguishable. The issue in that case was whether the victim

could recover restitution above the amount paid to the

unlicensed contractor; the issue here is whether the amount paid

is the appropriate amount of restitution when the homeowner has

received value in return. Thus, the narrow holding in Wilkinson

does not control the case before us.

¶32 But it is not just the narrow holdings of our prior

cases that are entitled to respect under the doctrine of stare

decisis. Rather, deference should also properly extend to the

Court’s core rationale, the reasoning essential to the result in

the prior case. See Seminole Tribe of Florida v. Florida, 517

U.S. 44, 66-67 (1996); Miller v. Gammie, 335 F.3d 889, 900 (9th

Cir. 2003) (en banc).

¶33 As the Chief Justice notes in her dissent, the

essential premise of Wilkinson was that the crime of contracting

without a license was complete when the victims paid the

- 20 - unlicensed contractor. See Wilkinson, 202 Ariz. at 29 ¶¶ 9, 39

P.3d at 1133. Wilkinson therefore held that the quality of any

work performed under the contract was irrelevant to the issue of

criminal restitution. Id. ¶ 10. Rather, because the crime was

complete before any work was done, Wilkinson reasoned that the

appropriate measure of “economic loss” suffered by a victim of

unlicensed contracting is the amount paid to the contractor.

Id. at 29-30 ¶¶ 8-14, 39 P.3d at 1133-34. Applying this

rationale, the victims in this case would receive restitution of

their total payments to Matykiewicz, regardless of the value of

any completed work.

¶34 This, however, does not end the inquiry. Although

stare decisis has powerful force, “[i]t is a doctrine of

persuasion . . . and not an ironclad rule.” Lowing v. Allstate

Ins. Co., 176 Ariz. 101, 107, 859 P.2d 724, 730 (1993). Even in

cases involving statutory construction, “we are not prisoners of

the past,” particularly when the language of the statute at

issue “does not compel the interpretation reached in previous

cases.” Id.

¶35 Applying the rationale of Wilkinson to the case before

us would lead to a conclusion that a victim has “economic loss”

under the restitution statutes even if he has none in reality.

Whatever its stare decisis effect, I cannot accept Wilkinson’s

- 21 - rationale when it would produce a result at odds with the

language of the restitution statutes.

¶36 The policy behind the doctrine of stare decisis is

that the public should be able to rely on prior judicial

opinions in conducting affairs. Lowing, 176 Ariz. at 107, 859

P.2d at 730. That policy is not implicated in this case. No

victim of an unlicensed contractor could have relied on

Wilkinson. As then-Judge Ryan once aptly noted, those with

knowledge that a contractor with whom they deal is unlicensed

are not victims at all, but rather accomplices to the offense

not entitled to restitution. State v. Wilkinson, 198 Ariz. 376,

383 ¶ 36, 10 P.3d 634, 641 (App. 2000) (Ryan, J., dissenting).

And it goes without saying that an unlicensed contractor could

not have relied to his detriment on Wilkinson, as that case

would impose broader liability on him than the Court’s decision

today. See Benjamin N. Cardozo, The Nature of the Judicial

Process 151 (1921) (“There should be greater readiness to

abandon an untenable position when the rule to be discarded may

not reasonably be supposed to have determined the conduct of the

litigants.”).

¶37 In short, although I recognize that Wilkinson’s

rationale would produce a different result if applied to this

case, I find its reasoning contrary to the clear directive of

- 22 - the statute that a victim must suffer an actual loss before

receiving restitution. In the case of unlicensed contracting,

loss is measured by the difference in value between what the

victim paid and what he received. I therefore concur in the

judgment of the Court.

__________________________________ Andrew D. Hurwitz, Justice

M c G R E G O R, Chief Justice, dissenting:

¶38 I respectfully dissent. Today’s decision, without

compelling reason or justification, essentially overturns this

Court’s recent decision in State v. Wilkinson, 202 Ariz. 27, 39

P.3d 1131 (2002). Because I cannot join an approach that so

casually ignores the basic doctrine of stare decisis, I cannot

join today’s Opinion.

¶39 Despite the majority’s assertions otherwise, this case

fits precisely within the rule of law we established in

Wilkinson. The action against Matykiewicz, like the action

against the defendant in Wilkinson, began when dissatisfied

homeowners filed a complaint against a contractor with the

Registrar of Contractors. In both instances, the homeowners

- 23 - then learned that the person with whom they had contracted was

not licensed. In both cases, the unlicensed contractor was

convicted of violating Arizona Revised Statutes (A.R.S.) section

32-1151 (2008). In Wilkinson, we concluded:

As a direct result of [the defendant’s] offer to act as a licensed contractor, [the victims] agreed to pay, and did pay, all or a portion of the amounts due under their agreements with [the defendant]. [The defendant’s] criminal actions directly caused those losses. . . . Under Arizona’s statutes, these victims are entitled to recover their payments to [the defendant] as restitution.

202 Ariz. at 29 ¶ 9, 39 P.3d at 1133.

¶40 The doctrine of stare decisis thus compels that

Matykiewicz be ordered to return all monies paid under the

agreement as restitution because his criminal actions caused

those losses without the intervention of additional causative

factors. See White v. Bateman, 89 Ariz. 110, 114, 358 P.2d 712,

714 (1961) (“The fact that the construction of the statute in

question rests on a single case does not render it any less the

duty of this court to utilize the doctrine of stare decisis

. . . .”).

¶41 The rule of law depends to a great extent upon a

healthy respect for precedent. “The doctrine of stare decisis,

which requires us to give weight to previous decisions

addressing the same issue, seeks to promote reliability so that

parties can plan activities knowing what the law is.” Galloway - 24 - v. Vanderpool, 205 Ariz. 252, 256 ¶ 16, 69 P.3d 23, 27 (2003)

(McGregor, J.). “Stare decisis reflects a policy judgment that

in most matters it is more important that the applicable rule of

law be settled than that it be settled right.” State Oil Co. v.

Khan, 522 U.S. 3, 20 (1997) (internal quotation omitted). Stare

decisis “promotes the evenhanded, predictable, and consistent

development of legal principles, fosters reliance on judicial

decisions, and contributes to the actual and perceived integrity

of the judicial process.” Payne v. Tennessee, 501 U.S. 808, 827

(1991).

¶42 Because an evenhanded, predictable, and consistent

approach to applying the law is essential to the integrity of

the judicial process, we do not lightly overrule precedent; we

do so only for compelling reasons. “[A]ny departure from the

doctrine of stare decisis demands special justification.”

Arizona v. Rumsey, 467 U.S. 203, 212 (1984); see also State v.

Davis, 206 Ariz. 377, 384 n.4 ¶ 34, 79 P.3d 64, 71 n.4 (2003)

(Berch, J.) (A relatively recent decision of this Court is not

“lightly overrule[d].”). “While the phrase ‘special

justification’ defies simple definition, it does require more

than that a prior case was wrongly decided.” State v. Hickman,

205 Ariz. 192, 200 ¶ 37, 68 P.3d 418, 426 (2003) (Ryan, J.).

Even when this Court has doubted the wisdom of precedent, we

- 25 - have followed previous opinions based upon our respect for the

doctrine of stare decisis and our recognition of its importance.

See State v. Lara, 171 Ariz. 282, 285, 830 P.2d 803, 806 (1992)

(restating the holding of a previous case despite the fact that

if the Court had been “writing on a clean slate” it might have

taken another approach); Stewart v. Damron, 63 Ariz. 158, 165,

160 P.2d 321, 324 (1945) (doubting the wisdom of prior

decisions, but finding the matter foreclosed by stare decisis).

¶43 Our failure to apply the doctrine of stare decisis in

this case is especially troubling for two reasons. First,

resolving the issue presented here and in Wilkinson required us

to interpret a statute. “When a court proposes to abandon

precedent in a case involving . . . statutory interpretation[,]

the burden is highest.” Hickman, 205 Ariz. at 201 ¶ 38, 68 P.3d

at 427; see also State v. Fell, 210 Ariz. 554, 561 ¶ 26, 115

P.3d 594, 601 (2005) (Hurwitz, J.) (“[O]ur deference to

precedent is strongest when prior decisions construe a statute.”

(quoting Galloway, 205 Ariz. at 256 ¶ 16, 69 P.3d at 27)). The

reason we give the most deference when construing a statute is

because “if we have interpret[ed] the statute other than as the

legislature intended, the legislature retains the power to

correct us.” Hancock v. Bisnar, 212 Ariz. 344, 349 ¶ 22, 132

P.3d 283, 288 (2006) (Hurwitz, J.) (internal quotation omitted).

- 26 - In the six years since Wilkinson, the legislature has given no

indication whatsoever that we incorrectly construed Arizona’s

restitution statutes. Today, the majority simply ignores the

legislature’s apparent approval of the statutory interpretation

of Wilkinson and adopts a new interpretation.

¶44 Second, the majority neither provides any compelling

reason nor points to any change in the law that justifies

overturning our prior decision. That approach is inconsistent

with our insistence that some strong reason justify a departure

from prior decisions. The doctrine of stare decisis “should be

adhered to unless the reasons of the prior decisions have ceased

to exist or the prior decision was clearly erroneous or

manifestly wrong.” White, 89 Ariz. at 113, 358 P.2d at 714; see

also Neal v. United States, 516 U.S. 284, 295 (1996) (finding

that once a court has determined a statute's meaning, the court

should adhere to that ruling absent “intervening development of

the law” or “compelling evidence bearing on [the legislature’s]

original intent”). The ordinary reasons for failing to adhere

to the doctrine of stare decisis are not present in this case.

No intervening development in the law pertaining to criminal

restitution has occurred since Wilkinson was issued in 2002.

Also, the result directed by Wilkinson, that all monies paid

under the contract must be returned, is not clearly erroneous.

- 27 - It remains true that forcing a criminal to yield the fruits of

his crime to his victim furthers the original conception of

restitution. See Wilkinson, 202 Ariz. at 29 ¶ 9, 39 P.3d at

1133. It remains true that the rule of Wilkinson protects the

public from unlicensed contractors by rehabilitating offenders

and thus preventing them from again contracting without a

license. Id. at 30 ¶ 13, 39 P.3d at 1134. Further, the result

in Wilkinson prevents the problems that arise when we “too

broadly combine civil liability with criminal sentencing.” See

id. at 30 ¶ 12, 39 P.3d at 1134 (“The sentencing phase of a

criminal case is not the ideal forum for the disposition of a

[civil] case.” (quoting State v. Garner, 115 Ariz. 579, 581, 566

P.2d 1055, 1057 (App. 1977))). Today’s opinion will transform

restitution hearings into the equivalent of complex civil

trials, held without benefit of a jury.

¶45 The doctrine of stare decisis ensures that a court’s

current decisions remain tied to precedent, not simply to

respect precedent, but to promote the continuity and

predictability so essential to the rule of law. My greatest

concern with today’s decision is that it separates this Court’s

analytical framework from our long adherence to stare decisis.

When we ignore precedent without a compelling reason for doing

so, we undermine public trust in the integrity of the law. I do

- 28 - not believe this case justifies undermining such trust and

confidence, and therefore dissent.

__________________________________ Ruth V. McGregor, Chief Justice

- 29 -