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,
1
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.
4
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).
8
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,
9
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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