Title: State v. Morris

State: north-carolina

Issuer: North Carolina Supreme Court

Document:

IN THE SUPREME COURT OF IOWA 
 
No. 13–0702 
 
Filed January 9, 2015 
 
 
STATE OF IOWA, 
 
 
Appellee, 
 
vs. 
 
BEAU JACKSON MORRIS, 
 
 
Appellant. 
 
 
 
Appeal 
from 
the 
Iowa 
District 
Court 
for 
Polk 
County, 
Christopher L. McDonald, Judge. 
 
 
Inmate appeals rescission by the district court of prior order 
increasing restitution payments deducted from his prison earnings.  
REVERSED. 
 
 
Beau Morris, Clarinda, pro se. 
 
 
Thomas J. Miller, Attorney General, Kevin R. Cmelik and 
William A. Hill, Assistant Attorneys General, and John P. Sarcone, 
County Attorney, for appellee. 
 
 
 
2 
 
CADY, Chief Justice. 
 
In this appeal, a prison inmate challenges a decision of the district 
court to rescind its prior order that increased the amount of restitution 
deducted from his prison earnings.  In deciding this case, we must 
interpret Iowa Code section 904.809(5) (2013) governing deductions from 
earnings by inmates employed by private industry.  On our review, we 
reverse the order of the district court.   
 
I.  Background Facts and Prior Proceedings.   
 
Beau Morris was convicted of first-degree robbery and second-
degree sexual assault in 2004.  He was sentenced by the district court to 
two consecutive twenty-five-year terms of incarceration.  The district 
court also ordered him to pay restitution in an amount in excess of 
$16,000.  Initially, Morris was required to pay twenty percent of all 
credits to his institutional account as restitution.  This order was later 
modified to fifteen percent of his income.   
 
In 2011, Morris began working for a private employer through the 
Iowa Prison Industries program.  He was paid a wage in excess of $10 
per hour for the work he performed.  This employment allowed him to 
earn significantly more than he was paid for performing labor for the 
prison.  Morris signed a work agreement as part of his application for 
employment with Iowa Prison Industries.  Under the agreement, Morris 
agreed that fifteen percent of his gross wages would be deducted for 
restitution, “unless otherwise specified.”1   
 
1The complete work agreement follows:  
I hereby agree voluntarily to participate in the Federal Prison Industry 
Enhancement Act (PIE) project.  Section 904.809 of the Code of Iowa.  I 
further agree to the deductions listed in items 1, 2, 3, 4, and 5 below 
made from gross wages, unless otherwise specified, as well as to all other 
financial arrangements made as to earned Federal Prison Industry 
                                      
 
 
 
3 
 
Enhancement Act (PIE) wages.  I will not initiate, acquiesce, or agree to 
any attempt to have my wages garnished or executed upon by any party 
prior to the distribution of such wages pursuant to Section 904.809 Iowa 
Code (2007).  Any deviation from this agreement, or change in 
deductions without written notification from the Department of 
Corrections is prohibited and will result in suspension or termination, 
additionally the offenders will be assessed reasonable Attorneys General 
fees for resolving any changes or attempts to modify this agreement. 
If I am offered and accept employment by H & H Trailer, I agree to the 
following. 
1. Deductions will be made from my wages to be distributed as follows: 
A. Payroll deductions as required by law, which may include but are 
not limited to state and federal income taxes and social security 
assessments.  You are allowed one (1) deduction unless you can 
produce a certified document for additional deductions. 
B. An amount legally obligated to pay by court order for the support 
of dependents being child support or family support.  If a court 
order does not exist dependent support will not be taken. 
C. Twenty percent (20%) of gross wages deposited to my inmate 
account.  Of the 20% of gross wages deposited to my inmate 
account the following, IF IT APPLIES, will be deducted from my 
inmate account; 20% to federal restitution and 10% to savings up 
to a maximum of $100.  IF IT APPLIES, deductions for state and 
federal court filing fees and DOC sanctions will be taken from the 
remaining amount deposited to my inmate account. 
D. Five percent (5%) of gross wages deducted for the victim 
compensation fund. 
E. Fifteen percent (15%) of gross wages deducted for state 
restitution.  If restitution does not exist, no amount will be taken. 
F. Any amount left above the deductions will go the General Fund as 
provided for in the Code of Iowa. 
2. I understand and agree that Workman’s Compensation while so 
employed is not a responsibility of H & H Trailers and will apply 
according to section 85.59, Code of Iowa. 
3. I understand and agree that I am not eligible for unemployment while 
employed as an inmate, and that my employer will not report my 
wages to the State for unemployment, and according[ly] execute an 
Iowa Short Form Power of Attorney. 
4. If employed under PIE, I hereby constitute and appoint the Director 
of Corrections or his/her designee my true and lawful agent and 
attorney in fact with respect to the receipt, disbursement, and 
custody of the wages arising from my employment, and accordingly 
execute an Iowa Short Form Power of Attorney. 
_____________________ 
 
 
4 
 
 
On July 30, 2012, Morris petitioned the district court to modify the 
restitution plan to allow him to pay a greater amount for restitution from 
his private-employment earnings.  He requested that fifty percent of his 
earnings be paid as restitution.  The district court granted the request 
and ordered the Iowa Department of Corrections (DOC) to increase the 
restitution deduction to fifty percent on August 15, 2012.   
 
The DOC did not immediately comply with the order and 
eventually filed a motion with the district court requesting that it be 
rescinded.  The district court, under a different presiding judge, granted 
the motion and rescinded the prior order modifying restitution.  The 
court rejected the State’s argument that federal law limited the total 
restitution deduction amounts to twenty percent, but held that the 
modified restitution order violated the state statutory scheme for the 
distribution of inmate earnings from private-sector employment.  The 
district court reinstated the prior restitution plan that set the amount of 
restitution at fifteen percent of his earnings.  The district court declined 
to address the additional claim made by the State that the employment 
agreement executed by Morris precluded any modification of restitution.   
 
Morris appealed.  He raises two issues.  First, Morris claims the 
district court abused its discretion by rescinding the modified restitution 
order.  Second, he claims the employment agreement did not preclude a 
modification of restitution.  The State argues the district court properly 
5. I will only perform the duties assigned to me by the company and will 
not operate any equipment that the company has not trained or 
certified me to operate.  I will also follow all applicable policies, 
procedures and safety regulations as described by the company. 
I have read and understand the forgoing, and if employed, I agree to 
abide by the guidelines set out above.  I understand that my employment 
is “at will” and that I am not guaranteed my employment will have any 
specific duration.   
_____________________ 
 
5 
 
rescinded the modified restitution order and asserts the issue of whether 
the modified restitution order violated the employment agreement was 
not properly before the court in this appeal.   
 
II.  Standard of Review.   
 
Our review of a restitution order is for abuse of discretion.  
“ ‘Abuse of discretion may be shown where . . . the court’s . . . decision is 
grounded on reasons that are clearly untenable or unreasonable.’ ”  
Office of Citizens’ Aide/Ombudsman v. Edwards, 825 N.W.2d 8, 14 (Iowa 
2012) (quoting Citizens’ Aide/Ombudsman v. Grossheim, 498 N.W.2d 
405, 407 (Iowa 1993)).  “A ground or reason is untenable . . . when it is 
based on an erroneous application of the law.”  Id. (citation and internal 
quotation marks omitted); accord Bottoms v. Stapleton, 706 N.W.2d 411, 
415 (Iowa 2005) (“A court abuses its discretion when its ruling is based 
on clearly untenable grounds, such as reliance upon an improper legal 
standard or error in the application of the law.”).  “When reviewing a 
restitution order, ‘we determine whether the court’s findings lack 
substantial evidentiary support, or whether the court has not properly 
applied the law.’ ”  State v. Klawonn, 688 N.W.2d 271, 274 (Iowa 2004) 
(quoting State v. Bonstetter, 637 N.W.2d 161, 165 (Iowa 2001)).  
Statutory construction is reviewed for correction of errors at law.  State v. 
Dudley, 766 N.W.2d 606, 612 (Iowa 2009).   
 
III.  Discussion.   
 
The resolution of this case requires us to consider the private-
employment program for inmates in Iowa prisons.  While prison inmates 
have historically earned very meager wages for performing labor while in 
prison, private employment opportunities for inmates now offer jobs that 
pay substantially higher wages.  See Iowa Code § 904.809(1)(c); Noah D. 
Zatz, Working at the Boundaries of Markets: Prison Labor and the 
 
6 
 
Economic Dimension of Employment Relationships, 61 Vand. L. Rev. 857, 
870–71 & n.49 (2008) [hereinafter Zatz].  However, inmates are only 
permitted to receive a portion of the wages paid.  Iowa Code 
§ 904.809(5)(b)–(c).  Most of the earnings are distributed to other entities 
designated by statute pursuant to a declared statutory priority scheme.  
Id. § 904.809(5).  Under this distribution scheme, the amount distributed 
to a recipient with priority over another recipient can reduce the amount 
ultimately distributed to the lower-priority recipient.  See id.  In this 
case, the State challenged the authority of the district court to modify a 
restitution order that increased the statutory distribution of an inmate’s 
earnings for restitution because it resulted in a decrease in the statutory 
distribution of the inmate’s earnings to the DOC as reimbursement for 
supervision costs of private-employment programs and to the general 
fund of the state as reimbursement for the costs of incarceration.  We 
first review the private-employment program to shed light on the 
resolution of this case.   
Congress 
authorized 
the 
Prison 
Industry 
Enhancement 
Certification Program as part of the Justice System Improvement Act of 
1979.  Pub. L. No. 96-157, § 827, 93 Stat. 1167, 1215 (codified at 18 
U.S.C. § 1761(c) (1982)).  Generally, this program joined private industry 
with prison industry by exempting qualified correctional systems from 
the existing legislative restrictions on the interstate transportation and 
sale of prison goods and generally allowing the unrestricted sales of 
goods produced by inmates.  See James J. Misrahi, Note, Factories with 
Fences: An Analysis of the Prison Industry Enhancement Certification 
Program in Historical Perspective, 33 Am. Crim. L. Rev. 411, 412 (1996).  
The program, among other things, established a minimum wage and 
authorized deductions of up to eighty percent of the inmate’s wages for 
 
7 
 
taxes, room and board, support, and victim compensation funds.  Id. at 
412–13.  The program was originally authorized in only five states, but 
has expanded to include over forty participating jurisdictions, including 
Iowa.  Zatz, 61 Vand. L. Rev. at 869 n.37; see also Prison Industry 
Enhancement Certification Program Guideline, 64 Fed. Reg. 17,000, 
17,002 (Apr. 7, 1999).   
 
The Iowa legislature established the Iowa State Industries program 
in 1977.2  1977 Iowa Acts ch. 87 (codified at Iowa Code ch. 216 (1979)).  
The private prison industry program in Iowa is codified in Iowa Code 
section 904.809 (2013).  This section establishes the conditions for 
private industry employment by inmates of correctional institutions in 
Iowa and includes provisions relating to the specific deductions from the 
earnings of inmates.3  Id.  Overall, the total earnings of inmates, less the 
employee deductions for taxes and other payroll deductions, are 
surrendered to the DOC, which then identifies the deductions pursuant 
to the statutory scheme contained in section 904.809(5)(b).  Id. 
§ 904.809(5).  Under this scheme, an inmate’s gross payroll earnings are 
distributed as follows:  
 
(1) Twenty percent, to be deposited in the inmate’s 
general account.   
 
(2) All required tax deductions, to be collected by the 
inmate’s employer. 
2In 1989, Iowa became part of the Federal Prison Industry Enhancement 
Certification Program.  See Nat’l Corr. Indus. Ass’n, Prison Industry Enhancement 
Certification Program Certification & Cost Accounting Center Listing 11 (2014), available 
at 
http://www.nationalcia.org/wp-content/uploads/Quarter-2-2014-Certification-
Listing.pdf.   
3The deductions were originally established in 1997 Iowa Acts ch.190, § 6 
(codified at Iowa Code § 904.809(5) (1999)).  The order of deductions was modified by 
1999 Iowa Acts ch. 182, § 6 (codified at Iowa Code § 904.809(5) (2001)), and the final 
alteration adding the department of corrections staff supervision deduction was added 
by 2004 Iowa Acts ch. 1175, § 203 (codified at Iowa Code § 904.809(5)(c)(3) (2005)). 
                                      
 
 
8 
 
 
(3) Five percent, to be deducted for the victim 
compensation fund created in section 915.94.   
Id. § 904.809(5)(b). 
After these deductions are made, the remaining balance is 
distributed pursuant to a separate priority scheme.  Id. § 904.809(5)(c).  
First, any dependent support obligation of the inmate is deducted from 
the remaining balance.  Id.  Up to a maximum of fifty percent of the 
inmate’s net earnings can be deducted for monthly spousal and child 
support obligations, as well as any amount for delinquent child support.  
Id.  From the remaining funds after this priority is satisfied, an amount 
is deducted for any restitution ordered by the court pursuant to an 
offender plan of restitution.  Id. § 904.809(5)(c)(2).  If funds remain after 
the restitution order is satisfied, the DOC may retain up to fifty percent 
of this balance.  Id. § 904.809(5)(c)(3).  The purpose of this deduction is 
to reimburse the DOC for the staff supervision costs of private-sector 
employment of inmates.  See id.  Finally, any funds that might remain 
after this deduction are deposited in the general fund of the state.  Id. 
§ 904.809(5)(c)(4).  The purpose of this deduction is to reimburse the 
state for the costs of the inmate’s incarceration.   
 
The statute is clear and unambiguous.  Specifically, it means that 
restitution pursuant to a plan established by the court takes priority over 
any amounts that may be retained by the DOC or deposited in the 
general fund of the state.  There is no dispute under the statute that 
restitution trumps funding for the DOC, just as dependent support 
orders trump restitution plans.  Additionally, funds are paid out under 
the statute after the three required payments identified in section 
904.809(5)(b) only to the extent that the greater priority deductions 
established by the legislature have been satisfied.   
 
9 
 
 
Thus, we turn to the specific dispute before us in this case.  The 
district court rescinded its prior order that modified restitution after it 
determined the modified terms of restitution were contrary to the 
statutory scheme prioritizing the distribution of earnings.  It held the 
modified restitution order altered the statutory distribution scheme by 
making restitution the first deduction.   
 
In deciding whether the order to rescind the modified restitution 
was based on an erroneous application of law, it is important to 
recognize that the modified restitution order only increased the amount 
of restitution from fifteen percent of earnings to fifty percent of earnings.  
This modification did not address the issue of priority in any way and 
expressed no intent for restitution to be elevated to the first deduction in 
violation of the statute.  The prior restitution plan, which was reinstated 
by the district court when it rescinded the modified order, directed fifteen 
percent of wages to be paid, and the modified order only increased the 
percentage of payment.  A district court is authorized to modify 
restitution payments.  See id. § 910.7(2).4  Additionally, the statutory 
4Authority to modify an offender’s restitution payment plan is governed by the 
Iowa Code.  See Iowa Code § 910.4(2)(d) (requiring court approval for modification when 
offender is on probation); id. § 910.5(1)(d) (permitting the director of the DOC or 
director’s designee to modify the plan of payment to reflect the offender’s present 
circumstances when incarcerated); id. § 910.5(2)(a) (permitting the chief of the bureau 
of community correctional services to modify payment plans for those on work release); 
id. § 910.5(3)(a) (permitting the office or individual in charge of supervising an offender 
on work release to modify the plan); id. § 910.5(4)(a) (permitting the district department 
of correctional services to prepare and modify a parolee’s payment plan); see also id. 
§ 910.2 (regarding restitution or community service ordered by sentencing court).  
Notwithstanding the delegations to prepare and modify restitution payment plans, 
section 910.7 gives the trial court authority to modify the restitution plan and 
restitution payment plan of an inmate, parolee, or probationer when petitioned either by 
the offender or by the office or individual preparing the plan.  See id. § 910.7(1)–(2).   
When preparing or modifying an offender’s restitution payment plan, the 
individual or office preparing it is to “tak[e] into consideration the offender’s income, 
physical and mental health, age, education, employment and family circumstances,” id. 
§ 910.4(2), with modification occurring “[w]hen there is a significant change in the 
                                      
 
 
 
10 
 
scheme for wage deductions for inmates in the prison industry program 
does not limit the percent of net earnings that can be deducted for 
restitution.  See id. § 904.809(5)(c)(2); see also Iowa Admin. Code r. 
201—20.11(7) (limiting restitution deductions to fifty percent of credits to 
offender’s account).   
 
It is also important to recognize that Morris did not have any 
deductions for dependent support.  As a result, the only deductions 
higher in priority than restitution were the statutorily required twenty 
percent to his inmate account, taxes, and the five percent deduction for 
the victim restitution fund.  Accordingly, the modified restitution order 
was not contrary to the distribution scheme for inmate private-sector 
employment under the statute.  The modified restitution order did not 
alter any of the categories of distribution with a greater priority under the 
statute, but merely increased the amount distributed for restitution, 
which left a lesser amount for the DOC and the state’s general fund.  See 
Iowa Code § 904.809(5)(c)(3)–(4).  However, this result is a consequence 
of the judgment of our legislature to compensate victims of crimes and 
other recipients of restitution before permitting the DOC to be 
reimbursed for its costs of supervising the private-sector employment of 
inmates and the state to be reimbursed for the costs of incarceration.   
 
This analysis reveals that the decision by the district court to 
rescind the amended restitution order was based on reasoning that 
constituted legal error.  Contrary to the reasoning of the district court in 
the rescission hearing, the amended restitution order was not contrary to 
the governing statutory scheme.  While the district court had discretion 
offender’s income or circumstances,” id. § 910.4(2)(d); accord id. § 910.5(1)(d)(1), 
(2)(a)(1), (3)(a)(1), (4)(a)(1).   
_____________________ 
 
11 
 
to amend the restitution order and rescind or modify the amended order, 
it had no discretion to rescind the amended order based on legal error.  
See Bottoms, 706 N.W.2d at 415. 
 
We have discretion to affirm the district court on grounds raised at 
trial but not on appeal.  See King v. State, 818 N.W.2d 1, 11 (Iowa 2012).  
However, we decline to do so in this case by considering whether the 
decision of the district court can be affirmed on the ground that the 
modified restitution order was contrary to the employment agreement.  
The State affirmatively elected not to pursue this issue, and there is no 
underlying supporting record.  Under the circumstances, we consider the 
issue waived on appeal.   
 
Accordingly, the district court order rescinding the modified 
restitution order was an abuse of discretion.  We reverse the district 
court decision to rescind the modified restitution order without prejudice 
to the State to seek further modification of Morris’s restitution.   
 
IV.  Conclusion.   
 
We reverse the decision of the district court.   
 
REVERSED.