IN THE COURT OF APPEALS OF THE STATE OF IDAHO 

Docket No. 32625 

STATE OF IDAHO, 

Plaintiff-Respondent, 

v. 

RUTH M. CHEENEY, 

Defendant-Appellant. 

)

)

)

)

)

)

)

)

)

)

2007 Opinion No. 25 

Filed: May 7, 2007 

Stephen W. Kenyon, Clerk 

Appeal from the District Court of the Second Judicial District, State of Idaho, Nez 

Perce County. Hon. Jeff M. Brudie, District Judge. 

Order of restitution, affirmed in part, reversed in part, and remanded; judgment of 

restitution in favor of Wells Fargo Bank, vacated; judgment of restitution in favor 

of Stuart Allan and Associates, vacated. 

Clark & Feeney, Lewiston, for appellant. Charles M. Stroschein argued. 

Hon. Lawrence G. Wasden, Attorney General; Daniel W. Bower, Deputy 

Attorney General, Boise, for respondent. Daniel W. Bower argued. 

______________________________________________ 

PERRY, Chief Judge 

Ruth M. Cheeney appeals from the district court’s order of restitution and judgments of 

restitution. For the reasons set forth below, we vacate the judgments of restitution in favor of 

Wells Fargo Bank and Stuart Allan and Associates and remand for entry of an amended 

judgment of restitution payable to the direct victim of Cheeney’s crime. 

I. 

FACTS AND PROCEDURE 

 As an employee at a doctor’s office, Cheeney was responsible for billing and deposits, 

including deposits of checks received for the doctor’s services, into his account at Wells Fargo 

Bank. When making the deposits at Wells Fargo, Cheeney would apparently deposit all checks 

but one, instructing the teller that one check needed to be cashed for use at the doctor’s office. 

Cheeney would keep the cash. In August 2003, the doctor terminated Cheeney’s employment 

for allegedly procuring fraudulent prescriptions and for irregularities with office petty cash. The 

1
doctor soon thereafter discovered that substantial amounts of money were missing. Cheeney 

allegedly embezzled over $200,000 between January 2000 and August 2003. 

Thereafter, Wells Fargo entered into a settlement agreement with the doctor, whereby the 

bank paid the doctor $157,500 for losses he incurred as a result of Cheeney’s theft. Additionally, 

Safeco Insurance Company apparently paid the doctor $15,000 for his loss. Stuart Allan and 

Associates, a collection agency, began pursuing the $15,000 from Cheeney on behalf of the 

insurance company. 

 The state charged Cheeney with grand theft. I.C. §§ 18-2403(2)(b) and 18-2407(1)(b)(8). 

Cheeney pled guilty, and the state dismissed charges filed in a separate criminal case. The 

district court sentenced Cheeney to a unified term of seven years, with a minimum period of 

confinement of three years, and ordered restitution in the amount of $232,788.49. The district 

court subsequently suspended Cheeney’s sentence and placed her on probation for seven years. 

Cheeney objected to the order of restitution. At a hearing on Cheeney’s objection, Cheeney 

stipulated to $220,589.55 being the proper amount of restitution but argued that the bank and the 

collection agency were not entitled to restitution. The district court entered an order for 

restitution and separate judgments in favor of the doctor for $48,089.55, Wells Fargo Bank for 

$157,500, and Stuart Allan for $15,000. Cheeney appeals the order of restitution and the 

judgments in favor of Wells Fargo and Stuart Allan. 

II. 

ANALYSIS 

Cheeney does not dispute that the doctor was authorized to receive restitution. Cheeney 

disputes the district court’s ruling and the state’s argument on appeal that the bank and the 

insurance company’s collection agency were also authorized to receive restitution. 

Orders for the payment of restitution to crime victims are governed by I.C. § 19-5304. 

State v. Taie, 138 Idaho 878, 879, 71 P.3d 477, 478 (Ct. App. 2003). The decision whether to 

require restitution is committed to the trial court’s discretion. Id. It is generally recognized, 

however, that courts of criminal jurisdiction have no power or authority to direct reparations or 

restitution to a crime victim in the absence of a statutory provision to such effect. State v. 

Richmond, 137 Idaho 35, 37, 43 P.3d 794, 796 (Ct. App. 2002). Therefore, the trial court’s 

exercise of discretion in requiring restitution must be within the boundaries provided in Section 

19-5304. To qualify for restitution, a claimant must be a “victim” as that term is used in the 

2
statute. I.C. §§ 19-5304(1)(e), (2). Restitution may be ordered only for actual economic loss 

suffered by a victim. I.C. §§ 19-5304(1)(a), (2). Determination of the amount of economic loss 

shall be based upon the preponderance of evidence submitted to the court by the prosecutor, 

defendant, victim or presentence investigator. I.C. § 19-5304(6). Each party shall have the right 

to present such evidence as may be relevant to the issue of restitution, and the court may consider 

such hearsay as may be contained in the presentence report, victim impact statement, or 

otherwise provided to the court. Id. On appeal, the award will be upheld if it is supported by 

substantial evidence. See Taie, 138 Idaho at 879, 71 P.3d at 478; State v. Hamilton, 129 Idaho 

938, 943, 935 P.2d 201, 206 (Ct. App. 1997); State v. Bybee, 115 Idaho 541, 544, 768 P.2d 804, 

807 (Ct. App. 1989). 

 The present case requires us to determine whether the bank and the insurance company’s 

collection agency fall within the statutory definition of “victims” who are authorized to receive 

restitution. This Court addressed this issue in State v. Gardiner, 127 Idaho 156, 898 P.2d 615 

(Ct. App. 1995) under a prior version of Section 19-5304, which did not include insurers within 

the definition of victims. We held that the district court could award the directly-injured victim 

the full amount of the economic loss even though an insurance company had already paid the 

directly-injured victim for the loss. See Gardiner, 127 Idaho at 167, 898 P.2d at 626. This Court 

reasoned that, pursuant to Section 19-5304(2), the existence of an insurance policy covering the 

victim’s loss does not absolve a defendant of the obligation to pay restitution. The defendant 

was thus prevented from gaining a “windfall” just because the victim had the foresight to obtain 

insurance. The definition of victim in Section 19-5304(1)(e) was amended to include insurers 

and certain other persons and entities after the Gardiner decision.1

 See 1997 Idaho Sess. Laws, 

ch. 112 at 272. Section 19-5304(1)(e) now includes four categories of victims. See I.C. §§ 19-

5304(1)(e)(i), (ii), (iii), and (iv). Pertinent to this appeal, Section 19-5304(1)(e)(iv) defines 

victim to include “a person or entity who suffers economic loss because such person or entity has 

made payments to or on behalf of a directly injured victim pursuant to a contract including, but 

not limited to, an insurance contract.” 

 

1

 Cheeney’s reliance on Gardiner as authority establishing which persons or entities may 

be victims is therefore misplaced. This Court recognized the amendment to the definition of 

victim in a case not cited in Cheeney’s opening brief. See Taie, 138 Idaho at 879 n.1, 71 P.3d at 

478 n.1. 

3
This Court exercises free review over the application and construction of statutes. State 

v. Reyes, 139 Idaho 502, 505, 80 P.3d 1103, 1106 (Ct. App. 2003). Where the language of a 

statute is plain and unambiguous, this Court must give effect to the statute as written, without 

engaging in statutory construction. State v. Rhode, 133 Idaho 459, 462, 988 P.2d 685, 688 

(1999); State v. Burnight, 132 Idaho 654, 659, 978 P.2d 214, 219 (1999); State v. Escobar, 134 

Idaho 387, 389, 3 P.3d 65, 67 (Ct. App. 2000). The language of the statute is to be given its 

plain, obvious, and rational meaning. Burnight, 132 Idaho at 659, 978 P.2d at 219. If the 

language is clear and unambiguous, there is no occasion for the court to resort to legislative 

history or rules of statutory interpretation. Escobar, 134 Idaho at 389, 3 P.3d at 67. When this 

Court must engage in statutory construction, it has the duty to ascertain the legislative intent and 

give effect to that intent. Rhode, 133 Idaho at 462, 988 P.2d at 688. To ascertain the intent of 

the legislature, not only must the literal words of the statute be examined, but also the context of 

those words, the public policy behind the statute, and its legislative history. Id. It is incumbent 

upon a court to give a statute an interpretation, which will not render it a nullity. State v. Beard, 

135 Idaho 641, 646, 22 P.3d 116, 121 (Ct. App. 2001). Constructions of a statute that would 

lead to an absurd result are disfavored. State v. Doe, 140 Idaho 271, 275, 92 P.3d 521, 525 

(2004); State v. Yager, 139 Idaho 680, 690, 85 P.3d 656, 666 (2004). 

 Section 19-5304(1)(e)(iv) unambiguously includes in the definition of victim any person 

or entity who suffers economic loss because such person or entity has made payments to or on 

behalf of a directly-injured victim pursuant to a contract. A plain reading therefore includes third 

parties who incurred a loss pursuant to a contractual obligation to make payments to or on behalf 

of a directly-injured victim. Without such a contractual obligation, the third party is not a victim 

as defined in Section 19-5304(1)(e)(iv). Such third-party victims could include insurance 

companies or any other party that makes payments to or on behalf of the directly-injured victim 

pursuant to a contract. The determination of whether payments were made pursuant to a contract 

is a question of fact for the trial court. Each party has the right to present evidence on whether a 

person or entity qualifies as a victim, and the court may consider such hearsay as may be 

contained in the presentence report (PSI), victim impact statement, or otherwise provided to the 

court. See I.C. § 19-5304(6). On appeal, factual findings in ordering restitution will not be 

disturbed if supported by substantial evidence. See Hamilton, 129 Idaho at 943, 935 P.2d at 206; 

Bybee, 115 Idaho at 544, 768 P.2d at 807. 

4
 Nothing in Section 19-5304 requires that the directly-injured victim’s award must be 

reduced by amounts paid to him or her by any third party who does not qualify as a victim under 

the statute. As it did at the time of the Gardiner decision, Section 19-5304(2) still provides that 

the existence of an insurance policy covering the victim’s loss does not absolve a defendant of 

the obligation to pay restitution. We conclude that, in amending Section 19-5304, the legislature 

did not intend to supersede the portion of the Gardiner decision holding that the district court 

could award the directly-injured victim the full amount of the economic loss even though a third 

party had already paid the directly-injured victim for the loss. See id., 127 Idaho at 167, 898 

P.2d at 626. A defendant is therefore still prevented from gaining a windfall in the event that a 

victim had the foresight to obtain insurance or the diligence to pursue some other form of 

compensation for his or her loss. 

This Court has relied on Section 19-5304(1)(e)(iv) to hold that insurance companies that 

paid benefits for damage inflicted by a defendant’s criminal actions were victims entitled to 

recover their economic loss. See Taie, 138 Idaho at 879, 71 P.3d at 478. The defendant in Taie

did not argue, however, that the state failed to prove the insurance companies were contractually 

obligated to make payments to the directly-injured victims. Rather, the defendant’s argument 

was limited to challenges that the evidence did not support the amount of the restitution order 

and that the district court failed to adequately consider Taie’s inability to actually pay the total 

award. Therefore, Taie did not address the sufficiency of the evidence presented by the state to 

establish that the insurance companies were victims who made their payments pursuant to 

contractual obligations. 

In the present case, Cheeney argues that the state did not present sufficient evidence that 

Wells Fargo or Safeco were victims who made their payments to the doctor because of 

contractual obligations requiring them to do so. The district court found, in a written order on 

restitution, that the doctor carried a business insurance policy with Safeco and that the insurance 

company subsequently contracted with Stuart Allan to collect the $15,000 payment from 

Cheeney. If the district court’s findings were supported by substantial evidence, Safeco could be 

a victim because the district court found that Safeco paid the doctor pursuant to a contract--an 

insurance policy. However, the district court did not find, and the state does not argue, that the 

collection agency paid the doctor $15,000. The district court could therefore order restitution to 

be paid directly to Stuart Allan only if Section 19-5304 authorizes payment of restitution to be 

5
made to an agent of a person or entity that qualifies as a victim. We need not decide whether the 

district court may award restitution to Stuart Allan, as Safeco’s agent, because the record before 

us does not contain substantial evidence of an insurance contract to qualify Safeco as a victim. 

The only evidence pertinent to Safeco is a collection letter to Cheeney from Stuart Allan for 

$15,000. The letter indicates that Safeco is Stuart Allan’s client, but it makes no reference to an 

insurance policy or a payment from Safeco to the doctor. 

Likewise, we need not determine whether the district court made a finding that Wells 

Fargo made its payment pursuant to a contract because the record before us does not support 

such a finding. The record includes a settlement agreement between Wells Fargo and the doctor, 

a letter from the bank’s counsel regarding the settlement agreement, and a copy of a check for 

$157,500 from the bank to the doctor. These exhibits refer to an agreement to settle an account 

dispute, but the exhibits do not indicate that the dispute arose from a contract between the bank 

and the doctor. Based on the evidence before us, the dispute could have arisen, as Cheeney 

asserts it did, from an allegation that the bank acted negligently rather than from a contractual 

obligation the bank had to the doctor. We are therefore not persuaded by the state’s argument 

that evidence of the settlement agreement qualifies as evidence that the $157,500 payment was 

made pursuant to a contract. 

The state argues that it provided Cheeney with a three-inch-thick stack of documents 

regarding restitution, which included information establishing that the payments made by Wells 

Fargo and Safeco were made pursuant to contracts with the doctor. The state does not show, 

however, that this three-inch-thick stack of documents was ever presented to the district court 

and it is not included in the record before us. The district court therefore could not rely upon it. 

The state also cites several pages from the PSI. None of the portions of the PSI cited by the state 

refer to Safeco or Stuart Allan. The PSI indicates that Cheeney embezzled the money at the 

bank, but it does not indicate that the bank paid the doctor pursuant to a contract. 

The transcript from the restitution hearing indicates that the state did not present any 

testimony or evidence during the hearing. At the hearing, however, the doctor and the prosecutor 

represented that the doctor had an insurance policy with Safeco. 

THE COURT: Safeco Insurance was evidently the insurance provider for 

[the doctor], some kind of business operation policy. 

[DOCTOR]: That’s correct, Your Honor. 

[PROSECUTOR]: Yes, Your Honor. 

6
[DEFENSE COUNSEL]: Judge, I’m going to object to people in the gallery 

making comments to the court. 

THE COURT: That’s fine. . . . 

The doctor was not under oath when he responded to the district court. Pursuant to Section 19-

5304(6), the court may consider such hearsay as may be contained in the PSI, victim impact 

statement, or otherwise provided to the court. Section 19-5304(6) therefore sets a lower standard 

than the rules of evidence that would apply to a criminal trial. If the doctor had indicated that he 

had an insurance policy with Safeco while testifying under oath at the restitution hearing or in his 

victim impact statement in the PSI, the district court could have relied upon his statement as 

evidence. However, the doctor’s unsolicited comment while he was not under oath and the 

prosecutor’s unsupported representations cannot be relied upon as evidence of the existence of a 

contract, even under the low evidentiary standard established in Section 19-5304(6).

 In sum, the record is devoid of any evidence, hearsay or otherwise, that Wells Fargo and 

Safeco made payments pursuant to contractual obligations to the doctor. Section 19-

5304(1)(e)(iv) requires evidence of a contractual obligation before the district court may enter an 

order of restitution and judgment for a third-party victim that incurred a loss by making 

payments to a directly-injured victim. Courts of criminal jurisdiction have no power to direct 

restitution to a crime victim in the absence of a statutory provision authorizing such restitution. 

See Richmond, 137 Idaho at 37, 43 P.3d at 796. We are therefore constrained to hold that the 

district court erred when it ordered restitution to be paid directly to Wells Fargo and Safeco’s 

collection agency, Stuart Allan. 

Cheeney, however, does not gain a windfall due to the doctor’s foresight and diligence in 

securing substantial compensation for his loss. Cheeney stipulated that the proper amount of 

restitution was $220,589.55. As noted above, nothing in Section 19-5304 limits the 

directly-injured victim’s award by amounts paid to him or her by any other third party who does 

not qualify as a victim under the statute. Indeed, in Gardiner, this Court held that the district 

court could award the directly-injured victim the full amount of the economic loss even though 

an insurance company had already paid the directly-injured victim for the loss. See Gardiner,

127 Idaho at 167, 898 P.2d at 626. That holding in Gardiner was not superseded by the statutory 

amendment redefining the term “victim.” In the absence of evidence that payments by Wells 

Fargo and Safeco were made pursuant to contractual obligations, the statute authorizes the 

7
district court to order Cheeney to pay the doctor restitution for the entire amount of the economic 

loss that Cheeney stipulated to have caused, $220,589.55.2 

III. 

CONCLUSION 

We hold that the district court erred by ordering Cheeney to pay restitution directly to 

Wells Fargo and Stuart Allan when the state failed to present substantial evidence that those 

parties incurred an economic loss pursuant to contracts with the doctor. We therefore reverse the 

district court’s order to the extent that it awarded restitution to the bank and collection agency 

and vacate the judgments of restitution for the bank and the collection agency. The district court 

was authorized, however, to order Cheeney to pay restitution in favor of the doctor for the entire 

amount of the economic loss to which Cheeney stipulated, $220,589.55. We therefore affirm the 

district court’s order to the extent that it awarded restitution to the doctor in the amount of 

$48,089.55. On remand, however, the district court is instructed to enter an amended order of 

restitution and enter an additional judgment for $172,500 in favor of the doctor. 

Judge LANSING and Judge Pro Tem WALTERS, CONCUR.

 

2

 It will be up to Wells Fargo and Safeco to work out with the doctor any reimbursement 

for the amounts they paid to the doctor. See Gardiner, 127 Idaho at 167, 898 P.2d at 626. 

8