GILBERT PROSECUTOR v HON. DOWNIE/MATYKIEWICZ

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SUPREME COURT OF ARIZONA En Banc TOWN OF GILBERT PROSECUTOR S OFFICE, Petitioner, v. THE HONORABLE MARGARET H. DOWNIE, JUDGE OF THE SUPERIOR COURT OF THE STATE OF ARIZONA, in and for the County of Maricopa, Respondent Judge, MITCHELL MICHAEL MATYKIEWICZ, Real Party in Interest. _________________________________ ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) Arizona Supreme Court No. CV-07-0300-PR Court of Appeals Division One No. 1 CA-SA 07-0078 Maricopa County Superior Court No. LC2006-000817-001DT Gilbert Municipal Court No. 05TR192310C O P I N I O N 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 By Denise E. Boode, Assistant Town Prosecutor Attorneys for Town of Gilbert Prosecutor s Office Gilbert LAW OFFICES OF MICHAEL J. DEW By Michael J. Dew Attorneys for Mitchell Michael Matykiewicz Phoenix 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. ¶2 In FACTS AND PROCEDURAL HISTORY 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. licensed subcontractors to Matykiewicz claims to have hired 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 Contractors. The a Town complaint of Gilbert with the charged Registrar Matykiewicz of 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 of The court of appeals accepted jurisdiction of the Town Gilbert s reversed, restitution petition and, over order. for a Town special dissent, of action, reimposed Gilbert granted the Prosecutor s relief, $52,784.22 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. a The majority noted that, while the result seems harsh, such restitution Id. at 34-35, countered that order ¶¶ would help deter 16-17, 162 P.3d Wilkinson did not disgorgement of all proceeds. at unlicensed 673-74. create a per contractors. The se dissent rule of 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. ¶6 Id. ¶¶ 20-21. 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. ¶7 DISCUSSION 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 sentencing ascertaining court must the victim s consider all economic losses loss, caused by the the criminal offense or offenses for which the defendant has been convicted. Id. § 13-804(B); (defining economic loss). for pain and damages. suffering, see also id. § 13-105(14) The court must then exclude damages punitive Id. § 13-105(14). damages [and] consequential 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 § 13105(14). ¶9 In Wilkinson, we identified a three-part test for determining which losses qualify for restitution under § 13603(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. 39 P.3d at 1133. Wilkinson, 202 Ariz. at 29, ¶ 7, Third, the criminal conduct must directly cause the economic loss. Id. third part actions of the directly test caused In Wilkinson, we focused on the whether the the damages defendant s that arose unlicensed contractor s shoddy and incomplete work. 28-30, ¶¶ 4, 7-13, 39 P.3d at 1132-34. - 5 - criminal from the Id. at In this case, we analyze the first part of the test how to ascertain economic loss. We must decide whether, in determining how much economic loss a victim conferred has on suffered, the the homeowner. court may Resolution consider of question of law, which we review de novo. this any value issue is a 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 criminal code to find the meaning of the term loss. the 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 not specify whether a The code similarly does determination of loss permits consideration of any benefits conferred on the victim. ¶11 what Loss is commonly defined as the difference between 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. § 134202(M). - 6 - Webster s College Dictionary 778 (2d ed. 1997) (defining loss to mean amount the or act of number losing lost ); possession see also of something A.R.S. § or 1-213 an (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 credit victims with with the considering restitution. this understanding, value of Arizona returned courts property when 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). penalize the defendant; Restitution is not meant to that incarceration, fines, or probation. function is served by See Kory L., 194 Ariz. at 219, ¶ 10, 979 P.2d at 547. Restitution therefore should not compensate than victims for more their actual loss. See generally George Blum, Measure and Elements of Restitution to Which Victim is Entitled Under A.L.R.5th 391, § 2(b) (1993). agree. State Criminal Statute, 15 Courts in other jurisdictions 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 preserves the statutes, proper makes place function and practical of a sense, civil and jury to determine a victim s actual damages, including damages for pain and suffering, punitive damages, and consequential damages. A.R.S. §§ 13-807 (2001) (providing that a restitution See 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 conflict (interpreting with otherwise Arizona s would retribution, the and upset restitution civil the jury statute trial right). relationship rehabilitation, and to blur avoid To a hold among reparation, 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 Id. that the defendant completed some construction work. 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. courts must Id. at 45-46. consider not The court observed that trial only the amount taken by [the contractor,] but also the value of any benefit received by the victim. 495 Id. at 46; see also People v. Kom, 467 N.Y.S.2d 495, (N.Y. App. Term 1983) (requiring reductions for value victims received when determining restitution to be paid by one convicted of license). We find the reasoning in Tzitzikalakis persuasive. ¶16 performing home improvement work without a 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. id. § 3663A(a)(1). See The MVRA defines the amount of restitution to be the value of property loss less the value returned. Id. § 3663A(b)(1)(B). returned to Several federal circuits have interpreted require conferred on victims. reductions in restitution for value 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 making improvements to the patient s home. (7th Cir. starting 2001). point The for Seventh determining embezzled from the victim. court subtracted victim s home. Circuit expenditures Id. at 887-88. made on guise of 269 F.3d 884, 885 concluded restitution Id. at 887. the was that the the amount From this amount, the improvements to the 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. ¶18 Id. at 888. 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. that Wilkinson created such a rule. We disagree 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. P.3d at 1132. Porter had contracted with two homeowners, T.S. and N.L., to perform remodeling work. paid Porter 202 Ariz. at 28, ¶ 3, 39 $2854.77 and $9040.27, Id. ¶ 2. T.S. and N.L. 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. ¶21 Id. ¶ 3. 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 protecting evidenced recognize the by public the the legislature s from unlicensed onerous strong interest contractors, requirements for in which licensure. is The applicant seeking a license must post a bond, obtain experience or train at examination; background an he accredited may check. also institution, have A.R.S. § to submit and pass a fingerprints 32-1122(B)(2), (F). written for a 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 punish The State thus already has many tools with which to 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. ¶ 9, 39 P.3d at 1133. See 202 Ariz. at 29, 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. victim would similarly receive a windfall if an The 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. 887-88. exchange See Shepard, 269 F.3d at Loss is a concept rooted in value, not solely in the 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. at 47. Tzitzikalakis, 864 N.E.2d If value is conferred, however, courts must consider such benefits in determining a victim s loss. C. ¶27 Remand 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. loss. This difference will usually be the victim s 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. ¶28 Id. ¶ 10. 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 economic. the crime or involve losses that are not But we cautioned in Wilkinson that [p]otential problems arise if we too broadly combine civil liability with criminal sentencing. concern remains valid Id. at 30, ¶ 12, 39 P.3d at 1134. today. We quoted with approval The 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. ¶29 CONCLUSION 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 ¶30 804 The term economic loss in A.R.S. §§ 13-603(C) and should be given its commonsense involves contracting without a license. receive the difference between what meaning when the case Thus, the victim should 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 - 19 - work performed. It is 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). majority correctly distinguishable. could recover notes that Wilkinson is The factually The issue in that case was whether the victim 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 - 20 - when the victims paid the unlicensed contractor. P.3d at 1133. See Wilkinson, 202 Ariz. at 29 ¶¶ 9, 39 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 stare This, however, does not end the inquiry. decisis has powerful force, [i]t persuasion . . . and not an ironclad rule. is a Although doctrine of 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. ¶35 Id. 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 that The policy behind the doctrine of stare decisis is the public should be able opinions in conducting affairs. P.2d at 730. victim of rely on prior judicial Lowing, 176 Ariz. at 107, 859 That policy is not implicated in this case. an Wilkinson. to unlicensed contractor could have relied No on 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, P.3d 1131 (2002). 202 Ariz. 27, 39 Because I cannot join an approach that so casually ignores the basic doctrine of stare decisis, I cannot join today s Opinion. ¶39 fits Despite the majority s assertions otherwise, this case precisely within Wilkinson. The against defendant the homeowners filed action a the rule against in law we Matykiewicz, Wilkinson, complaint Registrar of Contractors. of against began a established like when the in action dissatisfied contractor with the 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 Matykiewicz agreement doctrine of stare decisis ordered to return all be as restitution because his thus monies criminal compels paid that under actions the 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 weight requires us to give to previous decisions addressing the same issue, seeks to promote reliability so that parties can plan activities knowing what the law is. - 24 - Galloway 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. doctrine of stare decisis demands [A]ny departure from the 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 correct us. intended, the legislature retains the power to 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 overturning our prior decision. in the law that justifies 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 manifestly wrong. prior decision was clearly erroneous or 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. 1133. See Wilkinson, 202 Ariz. at 29 ¶ 9, 39 P.3d at It remains true that the rule of Wilkinson protects the public from unlicensed contractors by rehabilitating offenders and thus license. in preventing them from again contracting Id. at 30 ¶ 13, 39 P.3d at 1134. Wilkinson prevents the problems that without a Further, the result 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))). restitution hearings into the Today s opinion will transform equivalent of complex civil trials, held without benefit of a jury. ¶45 current respect The doctrine of stare decisis ensures that a court s decisions precedent, remain but tied to to precedent, promote the not simply continuity predictability so essential to the rule of law. to and 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. - 28 - I do not believe this case justifies undermining such trust and confidence, and therefore dissent. __________________________________ Ruth V. McGregor, Chief Justice - 29 -

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