Opinion ID: 1837559
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Heading: Determination of Amount of Victim Restitution.

Text: Iowa criminal defendants who plead guilty or who are found guilty must make restitution ... to the victims of the offender's criminal activities. See Iowa Code § 910.2. Restitution includes the payment of pecuniary damages to a victim. Id. § 910.1(4). Pecuniary damages are defined as all damages to the extent not paid by an insurer, which a victim could recover against an offender in a civil action arising out of the same facts or event, except punitive damages and damages for pain, suffering, mental anguish, and loss of consortium. Id. § 910.1(3) (emphasis added). The words used by the legislature to define pecuniary damages clearly indicate a legislative intent that restitution to a victim depend on what the victim could obtain in a civil action against the defendant. See generally State v. Pickett, 671 N.W.2d 866, 870 (Iowa 2003) (`When we interpret a statute, we attempt to give effect to the general assembly's intent in enacting the law. Generally, this intent is gleaned from the language of the statute.' (Citation omitted.)); Teggatz v. Ringleb, 610 N.W.2d 527, 530 (Iowa 2000) ([I]f the terms of the statute are explicit, the plain meaning of the language will be applied.). Therefore, in determining whether a defendant's restitution obligation is reduced by payments from third parties vicariously liable for the defendant's conduct, we start with an examination of the victim's potential civil recovery. The question here is whether any judgment obtained by Clauss against Paxton would be subject to a dollar-for-dollar credit for payments made by Paxton's employer. This type of credit, known as the pro tanto credit rule, is designed to prevent a double recovery by the injured party. Jamieson v. Harrison, 532 N.W.2d 779, 781-82 (Iowa 1995). In examining the matter before us, we think a pro tanto credit would be required under any theory of recoverynegligence, fraud, or breach of contractavailable to Clauss in an action against Paxton. We have held that the pro tanto rule remains viable in cases not affected by the enactment of chapter 668, Iowa's comparative fault statute. Tratchel v. Essex Group, Inc., 452 N.W.2d 171, 181 (Iowa 1990); see also Thomas v. Solberg, 442 N.W.2d 73, 76-77 (Iowa 1989) (stating chapter 668 adopted the proportionate credit rule). Fraud actions are not included within the scope of chapter 668. See Tratchel, 452 N.W.2d at 181. Nor are breach-of-contract actions encompassed in that statute. See Vasquez v. LeMars Mut. Ins. Co., 477 N.W.2d 404, 409-10 (Iowa 1991). Therefore, the pro tanto credit rule would apply to any recovery by Clauss under one of these theories. Even if Clauss could recover under a negligence theory subject to chapter 668, we do not think the proportionate credit rule of that statute would apply. Because Everen Securities was vicariously liable for Paxton's conduct (rather than independently liable to Clauss), Everen Securities and Paxton would be treated as a single party under the comparative fault statute. See Iowa Code § 668.3(2)( b ) (instructing court to treat defendants, where appropriate, as a single party for purposes of allocating fault); Biddle v. Sartori Mem'l Hosp., 518 N.W.2d 795, 799 (Iowa 1994) (stating doctor and hospitalvicariously liable for doctor's negligencewere properly `treated as a single party' for purposes of release obtained by doctor (citing Iowa Code section 668.3(2)( b ))). Consequently, Everen Securities and Paxton would be liable for the same act of fault and accordingly would be jointly allocated the same portion of Clauss' damages (in this case one hundred percent since there are no other parties at fault). Thus, as between Everen Securities and Paxton, there is no separate fault that could be subject to or give rise to a proportionate credit under chapter 668. It follows, then, that the pro tanto credit rule would apply and any payment made by Everen Securities or Paxton would serve to reduce their joint liability to Clauss to the extent of the payment made. [1] See Jamieson, 532 N.W.2d at 782 (pro tanto credit rule continues to govern where proportionate credit rule of comparative fault statute does not apply). Because the pro tanto rule would apply in any civil suit brought by Clauss against Paxton, Clauss's recovery would be reduced by the $40,000 already paid by Paxton's employer as partial satisfaction of Everen Securities and Paxton's joint liability to Clauss. Since the victim's pecuniary damages under section 910.1(3) are measured by the amount of the victim's potential civil recovery and because any civil judgment obtained by Clauss would be subject to a credit for the amount already paid by Paxton's employer, we conclude Paxton's obligation for victim restitution under chapter 910 would also be subject to the same credit. The State has argued that recognition of such a credit is inappropriate because it would frustrate the intent of restitution, which is to instill responsibility in offenders. State v. Izzolena, 609 N.W.2d 541, 548 (Iowa 2000). The State also claims Paxton should not be entitled to a credit because he was not a party to the arbitration between Clauss and Everen Securities. The State's final argument against a credit, apparently premised on the assumption that the arbitration award was paid by an insurer, is that it would be tantamount to insuring against criminal conduct, which is against ... public policy. We find these arguments unpersuasive in view of the clear language of the statutory definition of pecuniary damages, a definition that expressly ties victim restitution to the amount recoverable in a civil suit. The legislature presumably considered the policy implications of the definition it adopted and reached the legitimate conclusion that the victim of criminal conduct should be entitled to recover no more through the criminal process than the victim could have obtained in a civil action. Cf. Teggatz, 610 N.W.2d at 530 (giving effect to section 910.8 as written, even though the statute may appear to conflict with traditional application of issue preclusion, because that was the decision made by the legislature when it enacted that provision). In fact, rather than maximizing the amount of victim restitution under chapter 910, the legislature actually did just the opposite by eliminating punitive damages and damages for pain, suffering, mental anguish, and loss of consortium from the scope of pecuniary damages payable by the defendant as restitution. See Iowa Code § 910.1(3). We also observe that our interpretation of the statute does not thwart the rehabilitative goals of restitution. Reduction of Paxton's restitution obligation to Clauss does not eliminate Paxton's potential liability to his former employer for reimbursement of his employer's payment to Clauss. See Biddle, 518 N.W.2d at 799 (noting comparative fault act did not disturb well settled rule that a principal found vicariously liable for the negligent acts of an agent retains a right of full indemnity against the actual tortfeasor). Nor does the restitution order preclude Clauss from relitigating the amount of his damages in a civil suit against Paxton. Teggatz, 610 N.W.2d at 530-31. Thus, the legislative scheme permits the criminal court to preclude a double recovery by the victim, but does not abolish the offender's ultimate accountability for the damages caused by his criminal conduct. We also find no inconsistency in our interpretation of the statute today and our decision in Bonstetter where we disallowed any offset against restitution for monetary claims held by the defendant against the victim. In Bonstetter, the defendant, convicted of converting monies from his employer, sought an offset against the restitution he was ordered to make to his former employer for amounts he claimed his employer owed him for accrued vacation and retirement benefits. 637 N.W.2d at 164. We held the trial court had correctly denied the defendant the claimed offset because the only reduction of the victim's damages mentioned in the statute was for amounts paid by an insurer. Id. at 167. Our decision was based on an interpretation of a portion of the statutory definition of pecuniary damages, specifically the language `all damages to the extent not paid by an insurer.' Id. (quoting Iowa Code section 910.1(3)). In contrast, here, our focus is on that part of the definition following the language interpreted in Bonstetter, namely, which a victim could recover against the offender in a civil action arising out of the same facts or event. Iowa Code § 910.1(3). As we have already discussed, any damages recoverable in a civil action would be subject to reduction to the extent of payments made to the victim for the same damages. Thus, the prohibition against double recovery, and the consequent credit for payments already received by the victim, is inherent in the statutory measure of recovery. The same cannot be said for the offset sought in Bonstetter, which was based on claims unrelated to the calculation of the victim's damages.