Court Opinion

ID: 4342216
Source: CourtListenerOpinion
Date Created: 2018-11-16 15:08:01.464158+00
Date Added: 2024-06-11T10:14:18.180557
License: Public Domain

IN THE SUPREME COURT OF IOWA
                                No. 17–0931

                           Filed November 16, 2018

STATE OF IOWA,

      Appellee,

vs.

TERRAN ROACHE,

      Appellant.

      On review from the Iowa Court of Appeals.

      Appeal from the Iowa District Court for Story County, James B.

Malloy, District Associate Judge.

      Defendant seeks further review of court of appeals decision affirming

restitution judgment. DECISION OF COURT OF APPEALS VACATED;

DISTRICT COURT JUDGMENT AFFIRMED IN PART AND REVERSED

IN PART.

      John L. Dirks of Dirks Law Firm, Ames, for appellant.

      Thomas J. Miller, Attorney General, Martha E. Trout, Assistant

Attorney General, Jessica Reynolds, County Attorney, and Adam

Kenworthy, for appellee.
                                       2

WATERMAN, Justice.

         In this appeal, we review the level of scrutiny for a criminal

restitution award. The operator of a training course for commercial truck

drivers imposed a $1900 “fine” on its student for the loss of a paperback

study guide, a multiple of the full cost of the course that included the

guide.     The study guide was in a backpack stolen from the student’s

parked car. The student has not paid the fine, and his automobile insurer

determined the paperback guide had no value.              The district court

presumed that $1900 far exceeded the actual cost to print the guide but

nevertheless ordered the defendant who pled guilty to the theft to pay that

amount in victim restitution. The defendant appealed to challenge that

amount alone, and we transferred the case to the court of appeals, which

affirmed.     We assuaged our sticker shock by granting the defendant’s

application for further review.

         We hold that the scope-of-liability analysis in sections 29 and 33 of

the Restatement (Third) of Torts: Liability for Physical and Emotional Harm

(Am. Law Inst. 2010) [hereinafter Restatement (Third) of Torts] applies in

criminal restitution determinations. For the reasons set forth below, we

reverse the $1900 fine-based restitution award as punitive and

unsupported by substantial evidence.

         I. Background Facts and Proceedings.

         On October 8 and 14, 2016, police received multiple reports of

vehicle break-ins at a parking garage in Ames, Iowa. Officers interviewed

victims and reviewed surveillance video from security cameras. One victim

reported that her stolen credit card was being used at a local liquor store

and bar. Officers went to that vicinity and approached a man recognized

from the video.      The man, Terran Roache, attempted to flee.       Officers
                                      3

apprehended him after a brief pursuit. Roache possessed property stolen

from several of the victims and a tire iron.

         The State charged Roache with eleven counts: two counts of criminal

mischief in the second degree in violation of Iowa Code sections 716.1,

716.2, and 716.4; six counts of burglary in the third degree in violation of

sections 713.1 and 713.6A(2); one count of possession of burglar’s tools in

violation of section 713.7; one count of unlawful use of a credit card in

violation of sections 715A.1, 715A.6(1), and 715A.6(2)(c); and one count of

theft in the second degree in violation of sections 714.1 and 714.2(2). In

January 2017, Roache, pursuant to a written plea agreement, entered a

guilty plea to one count of criminal mischief and one count of burglary.

He agreed to pay restitution on all eleven counts. In exchange, the State

agreed to dismiss the remaining nine counts. At the plea hearing, after

engaging in a colloquy with Roache, the district court accepted his guilty

pleas.

         The district court sentenced Roache to an indeterminate prison term

not to exceed five years for criminal mischief and two years for burglary,

with the sentences to run concurrently and with credit for time served.

The court dismissed the remaining counts but ordered Roache to pay

restitution on all eleven counts consistent with his plea agreement. The

court gave the State thirty days to file a pecuniary damages statement

itemizing the amount of restitution each victim was seeking. See Iowa

Code § 910.3 (2016).

         The State submitted a pecuniary damages statement seeking a total

of $4515.80 in restitution to reimburse Roache’s victims for vehicle

damage and stolen property. The court approved the amount in full, but

gave Roache thirty days to object.
                                     4

      Roache timely filed a written objection to two items: $1900 to replace

Jordan Hagedon’s stolen study guide and $958.72 to repair Haoran

Wang’s windshield. Roache requested a hearing on his objections.

      At the restitution hearing, Hagedon testified he found his Hyundai

Santa Fe with a broken window and his backpack missing from the

backseat. The study guide, a laptop, a laptop charger, a change of clothes,

and prescription eyeglasses were inside the backpack.          Neither the

backpack nor its contents were recovered. Hagedon submitted a claim to

his insurance company. The insurance company determined the study

guide had no value, but reimbursed Hagedon for the cost of the remaining

items, less his $500 deductible. Hagedon also sought the $500 deductible

in restitution, and Roache does not dispute the award of that amount.

      Hagedon was enrolled in a course through Northland CDL Training

& Licensing to obtain his commercial driver’s license (CDL). As part of the

course, Northland issued Hagedon a “Pre-Trip Inspection Study Guide.”

The study guide was soft-covered, approximately six inches wide by eight

or ten inches long, and between a quarter- and half-inch thick. Two weeks

before the theft, Hagedon had signed Northland’s “check-out agreement”

for the study guide, which stated,

      I, Jordan Hagedon am a student in the CDL Driver Prep.
      Course that includes the use of the “Pre-Trip Inspection Study
      Guide”, a published, marked and copyright[ed] booklet, and
      the sole property of Northland CDL Training, © 2012.
      I was made fully aware at the opening class session that I am
      responsible for returning aforementioned study guide. It was
      explained fully that if I did not complete ALL portions of the
      assignments I AM NOT eligible to continue with the CDL Skills
      testing conducted with a tractor/trailer by the college staff.
      By not returning the said study guide on my final testing date,
      I also fully understand that in addition to a fine for claiming
      the booklet was lost, I will be listed as incomplete for that
      assignment and may be deemed as not eligible to be tested for
      a CDL, thus having any test results become Null and Void. In
                                           5
       that event, I fully understand and agree that I may not be
       issued a CDL regardless of the outcome of the Skills Testing.
       The “Pre-Trip Inspection Study Guide” text is copyright
       protected. Any use in an unauthorized manner, the copyright
       holders will pursue damages to the full extent of the copyright
       infringement laws, according to Chapter Five, Article 504 of
       the U.S. Copyright Act, each infringement carries a minimum
       $750 and maximum $30,000 penalty, while willful
       infringement carries a maximum penalty of $150,000. This
       in addition to court orders to pay all legal fees involved.
       I understand and agree with these terms and conditions on
       this date with my pledge to return the Pre-Trip Inspection
       Study Guide when I come for my final testing day or by mail
       to the above address if for any reason I do not complete the
       course.
       I am taking Study Guide Number 1895.

The agreement was silent as to the amount of the fine Northland would

charge Hagedon if he failed to return the study guide.

       On October 10, two days after the theft, but before Roache’s arrest,

Hagedon signed another Northland document that for the first time set the

dollar amount of the fine at $1900, and stated,

       I was made fully aware at the opening class session that I am
       responsible for the “Pre-Trip Inspection Study Guide” and by
       not returning it would result in a FINE (see attached copy of
       presentation slide, class handout and check-out agreement
       signed by the student). The “Pre-Trip Inspection Study Guide”
       book I was issued was Number 01895.
       By losing and not returning the said study guide on my final
       testing date, I also fully understand I will be charged a fine of
       4X the course tuition. The calculated charge for this course
       is $1,900 (one thousand, nine hundred dollars). 1

The attached presentation slide describes the study guide and states, “You

MUST Return [the study guide] To Us When You Come For Your Phase 3

Training/Testing. YOU WILL BE CHARGED A FINE IF YOU LOSE IT!!!”

The handout attached to the contract is a letter from Randy Grey, Lead

Instructor, stating in part, “The Study Guide Is Copyright Protected And

       1The  record is unclear whether $1900 is the cost of the course or four times the
course tuition.
                                      6

Is On LOAN To You. It MUST Be Returned When You Come For Final

Testing. Failure to return it will result in a COSTLY FINE.” No dollar

amount of the fine was mentioned in the handout or slide.

      Hagedon has not paid Northland any amount for the stolen study

guide, but has an outstanding $1900 balance with Northland for the full

amount of its fine. Hagedon testified that “[Northland has] been waiting

for what we would hear from restitution.”           Hagedon has completed

Northland’s course and received his CDL.

      On cross-examination, Hagedon agreed that the value of the study

guide was not $1900.      The court asked Hagedon if he had talked to

Northland about waiving the fine because the study guide was stolen.

Hagedon replied,

      I did. All they said was that they reiterated the fact that people
      have not returned them in the past, and they do charge the
      four times the cost of the class. And I did ask that, and they
      said that if I did get money out of the restitution, they’d like
      to see that, because it’s still a risk to them, I guess, with their
      copyrighting or their—they wrote that book, they publish that
      book themselves, and they didn’t want that getting out. And
      any restitution that came out of this, they would still like to
      get. I haven’t spoke[n] with them since probably the day of
      the class.

Hagedon testified he did not know what would happen if he failed to pay

the fine or if the fine was omitted from the restitution award.

      In a written ruling, the district court ordered Roache to pay

$3557.08 in restitution, including $1900 for Hagedon’s study guide. In its

ruling, the district court found

      [t]he “damage” to the victim for failing to return the study
      guide came to $1,900. But for the defendant’s criminal
      actions, [Hagedon] would not have been assessed that “fine.”
      The Court would presume that $1,900 far exceeds the actual
      cost to print the study guide, but the actual cost of the study
      guide does not reimburse [Hagedon] for the loss he sustained
      as a result of the defendant’s actions.
                                       7

Neither the State nor the victim introduced evidence on Wang’s $958.72

claim for his windshield repair, and accordingly, the court disallowed that

amount.

         Roache appealed, challenging only the $1900 restitution award for

the study guide. We transferred the case to the court of appeals. The

court of appeals determined that the $1900 award was supported by

substantial evidence and Hagedon’s “loss” in that amount was causally

related to Roache’s criminal activities. The court of appeals affirmed the

district court’s restitution award in full. We granted Roache’s application

for further review.

         II. Standard of Review.

         We review the district court’s restitution order for correction of

errors at law. State v. Iowa Dist. Ct., 889 N.W.2d 467, 470 (Iowa 2017).

“In 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. Hagen, 840 N.W.2d 140, 144 (Iowa 2013)

(quoting State v. Bonstetter, 637 N.W.2d 161, 165 (Iowa 2001)). “Evidence

is substantial when a reasonable mind would accept it as adequate to

reach a conclusion.” Bonstetter, 637 N.W.2d at 165 (quoting Hasselman

v. Hasselman, 596 N.W.2d 541, 545 (Iowa 1999)).

         III. Analysis.

         We must decide whether the district court erred by including the

$1900 fine for the stolen study guide in the restitution order. We begin

with an overview of the law governing restitution. We adopt the scope-of-

liability analysis in the Restatement (Third) of Torts for criminal restitution

cases.     We then address Roache’s challenges to the $1900 award and

conclude the district court erred by awarding that amount without

substantial evidentiary support.
                                       8

      A. Restitution Framework. “[T]he purpose of restitution is two-

fold. It not only serves to protect the public by compensating victims for

criminal activities, but it also serves to rehabilitate the defendant.” State

v. Izzolena, 609 N.W.2d 541, 548 (Iowa 2000). “Unlike other forms of penal

sanctions, restitution forces the offender to answer directly for the

consequences of his or her actions.” Bonstetter, 637 N.W.2d at 165. We

thoroughly reviewed the history of criminal restitution in State v. Jenkins,

788 N.W.2d 640, 642–43 (Iowa 2010) (surveying state and federal

legislation and caselaw).

      Iowa Code chapter 910 governs criminal restitution. “Restitution is

mandatory ‘[i]n all criminal cases in which there is a plea of guilty, verdict

of guilty, or special verdict upon which a judgment of conviction is

rendered.’ ” Hagen, 840 N.W.2d at 149 (alteration in original) (quoting

Iowa Code § 910.2(1)).       Restitution orders may include payment of

pecuniary damages to the victim and payment of criminal fines, penalties,

and surcharges to the clerk of court. Iowa Code §§ 910.1(4), .2(1); Hagen,
840 N.W.2d at 149.        Section 910.1 limits restitution for the victim’s

pecuniary damages to those recoverable in a civil action and unreimbursed

by insurance:

      “Pecuniary damages” means all damages to the extent not
      paid by an insurer, which a victim could recover against the
      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. Without limitation,
      “pecuniary damages” includes damages for wrongful death
      and expenses incurred for psychiatric or psychological
      services or counseling or other counseling for the victim which
      became necessary as a direct result of the criminal activity.

Iowa Code § 910.1(3) (second emphasis added). 2

      2In State v. Dubois, we held a victim was not required to submit a claim to
her insurer, noting the term “ ‘all damages to the extent not paid by an insurer’
means all amounts not actually paid. It does not mean amounts that might be
                                      9

      Criminal restitution is further linked to civil tort recoveries through

section 910.8, which provides, “[A]ny restitution payment by the offender

to a victim shall be set off against any judgment in favor of the victim in a

civil action arising out of the same facts or event.” Id. § 910.8. In State v.

Driscoll, we observed “the purpose of section 910.8 [is] to coordinate a

criminal-restitution payment with a civil-damage award to prevent the

victim from receiving a windfall.” 839 N.W.2d 188, 191 (Iowa 2013). The

setoff provision also applies to reduce the restitution award by the amount

recovered in the civil suit to avoid a double recovery. Id.

      The state bears the burden of proof to recover damages due the

victim. Bonstetter, 637 N.W.2d at 170. In Bonstetter, we set forth the

procedure for determining the amount of restitution, including proof of

causation, stating,

             In calculating a restitution order, the district court must
      find a causal connection between the established criminal act
      and the injuries to the victim. The damage must have been
      caused by the offender’s criminal act to justify the restitution
      order. Once the causal connection is established by a
      preponderance of the evidence, “the statute allows recovery of
      ‘all damages’ . . . which the state can show by a
      preponderance of the evidence.” A restitution order is not
      excessive “if it bears a reasonable relationship to the damage
      caused.”

Id. at 168 (alteration in original) (citations omitted) (first quoting State v.

Ihde, 532 N.W.2d 827, 829 (Iowa Ct. App. 1995); then quoting State v.

Mayberry, 415 N.W.2d 644, 647 (Iowa 1987)); see also Jenkins, 788
N.W.2d at 647 (allowing district court review of factual causation in

restitution claims by Crime Victim Compensation Program).

      “Generally, causation exists in criminal law, often without much

fanfare, as a doctrine justifying the imposition of criminal responsibility by

paid, could be paid, will be paid, or even should be paid by the insurer.” 888
N.W.2d 52, 54–55 (Iowa 2016).
                                     10

requiring a ‘sufficient causal relationship between the defendant’s conduct

and the proscribed harm.’ ” State v. Tribble, 790 N.W.2d 121, 126 (Iowa

2010) (quoting State v. Marti, 290 N.W.2d 570, 584 (Iowa 1980)).          We

previously observed that

      [c]ausation has two components: “(1) the defendant’s conduct
      must have in fact caused the plaintiff’s damages (generally a
      factual inquiry) and (2) the policy of the law must require the
      defendant to be legally responsible for the injury (generally a
      legal question).”

Berte v. Bode, 692 N.W.2d 368, 372 (Iowa 2005) (quoting Gerst v. Marshall,

549 N.W.2d 810, 815 (Iowa 1996)); see also State v. Watts, 587 N.W.2d
750, 751 (Iowa 1998) (“We have said that section 910.1(3) ‘connote[s] a

requirement that the victim prove a prima facie case of liability premised

on some civil theory such as fault or intentional tort. Proximate cause, of

course, would be a necessary element of such a prima facie case.’ ”

(quoting State v. Starkey, 437 N.W.2d 573, 574 (Iowa 1989))). Factual

causation is determined through a “but for” test:

      [T]he defendant’s conduct is a cause in fact of the plaintiff’s
      harm if, but-for the defendant’s conduct, that harm would not
      have occurred. The but-for test also implies a negative. If the
      plaintiff would have suffered the same harm had the
      defendant not acted negligently, the defendant’s conduct is
      not a cause in fact of the harm.

Berte, 692 N.W.2d at 372 (quoting Dan B. Dobbs, The Law of Torts § 168,

at 409 (2000)).

      In Thompson v. Kaczinski, we bifurcated proximate cause into

factual cause and scope of liability and adopted the Restatement (Third) of

Torts risk standard for civil tort actions. 774 N.W.2d 829, 837–39 (Iowa

2009). This standard “is intended to prevent the unjustified imposition of

liability by ‘confining liability’s scope to the reasons for holding the actor

liable in the first place.’ ” Id. at 838 (quoting Restatement (Third) of Torts
                                     11

§ 29 cmt. d, at 496). “The scope-of-liability issue is fact-intensive as it

requires consideration of the risks that made the actor’s conduct tortious

and a determination of whether the harm at issue is a result of any of

those risks.” Id. To determine whether

      the plaintiff’s harm is beyond the scope of liability as a matter
      of law, courts must initially consider all of the range of harms
      risked by the defendant’s conduct that the jury could find as
      the basis for determining [the defendant’s] conduct tortious.
      Then, the court can compare the plaintiff’s harm with the
      range of harms risked by the defendant to determine whether
      a reasonable jury might find the former among the latter.

Id. (alteration in original) (quoting Restatement (Third) of Torts § 29 cmt.

d, at 496); see also Spreitzer v. Hawkeye State Bank, 779 N.W.2d 726,

741–45 (Iowa 2009) (applying scope-of-liability analysis to determine

damages recoverable for fraud).

      The scope of liability is broader for intentional torts. Spreitzer, 779
N.W.2d at 741 (“We readily acknowledge legal causation for intentional

torts often reaches a broader range of damages for harm than legal

causation reaches in cases involving unintentional torts.”). The applicable

Restatement section provides, “An actor who intentionally or recklessly

causes harm is subject to liability for a broader range of harms than the
harms for which that actor would be liable if only acting negligently.”

Restatement (Third) of Torts § 33(b), at 562.      However, “an actor who

intentionally or recklessly causes harm is not subject to liability for harm

the risk of which was not increased by the actor’s intentional or reckless

conduct.” Id. § 33(c), at 562.

      We have not extended the Restatement (Third) of Tort’s scope-of-

liability analysis to criminal cases, but we have referred to its factual-

causation standard. In Tribble, we stated, “The conduct of a defendant is

a ‘factual cause of harm when the harm would not have occurred absent
                                      12

the conduct.’ ” 790 N.W.2d at 127 (quoting Restatement (Third) of Torts

§ 26, at 346). We limited our analysis in that felony murder case to factual

causation.    Id. at 127 n.1 (“The nature of the argument presented by

Tribble in this case does not require us to consider the element of

causation beyond a factual-cause analysis.”). We applied the Restatement

(Third) of Torts factual-causation but-for test in several subsequent

criminal cases. See State v. Tyler, 873 N.W.2d 741, 747–50 (Iowa 2016)

(reviewing such cases). We expressly left open whether we would replace

the legal or proximate cause analysis in criminal cases with the scope-of-

liability approach of the Restatement (Third) of Torts. See id. at 750 (“[W]e

need not resolve that question today either.”).

      Iowa Code chapter 910 expressly relies on civil liability principles to

determine restitution for a crime victim’s pecuniary damages. Iowa Code

§ 910.1(3); see also id. § 910.8 (providing for setoffs for recoveries in civil

action and criminal restitution proceedings). Accordingly, we now hold

that the Restatement (Third) of Torts’ risk standard for scope of liability

applies in criminal restitution determinations. Against this backdrop, we

turn to the issues presented in Roache’s appeal.

      B. Factual Causation.       Roache claims his actions were not the

factual cause of the $1900 fine. Roache concedes that his theft resulted

in Hagedon’s loss of the study guide, but contends the guide’s value is

negligible.   Roache argues that there was no substantial evidence

supporting the district court’s finding that his actions were the factual

cause of Hagedon’s $1900 fine. Instead, Roache asserts the $1900 fine

resulted from Hagedon’s voluntary execution of the agreement with

Northland after the theft. We readily conclude that Roache’s actions were

the factual cause of Hagedon’s loss of the study guide. But for the theft,
                                      13

the study guide would not have been lost, and Hagedon would not have

faced liability to Northland for his failure to return the guide.

      C. Scope of Liability. Roache also argues that Hagedon’s $1900

fine after the theft falls outside the scope of liability. The State argues that

Roache’s act of stealing an expensive item in a backpack falls within the

scope of liability for the theft and that he is therefore liable for the $1900

fine. The district court did not expressly address scope of liability in its

restitution order.    The court of appeals, however, determined that

“Hagedon’s loss was also within the scope of liability of Roache’s action, as

it was likely—and presumably Roache’s hope—that the backpack he stole

from Hagedon’s car would contain valuable items.” We agree that a stolen

item’s reasonable value falls within the scope of liability for theft. But,

here, we must consider the role of a third party, Northland, that imposed

the $1900 fine on Hagedon.

      “Restitution damages are to be determined . . . in the same manner

as in a civil case.” Watts, 587 N.W.2d at 751–52. Thus, we consider

whether Hagedon could recover the $1900 fine from Roache in a civil

action.   Roache’s theft was an intentional act.      The intentional tort of

conversion is the civil counterpart to theft. State v. Taylor, 506 N.W.2d
767, 768 (Iowa 1993). Liability for intentional torts extends to a broader

range of harms than merely negligent conduct. Restatement (Third) of

Torts § 33(b), at 562. Roache’s theft of the study guide exposed Hagedon

to liability to Northland for loss of the guide. The victim of a tort may seek

indemnity from the tortfeasor for the victim’s liability to a third party

resulting from the tort. See, e.g., Peters v. Lyons, 168 N.W.2d 759, 770–

71 (Iowa 1969) (allowing recovery under indemnity theory for liability to

third party). See generally Wells Dairy, Inc. v. Am. Indus. Refrigeration,
                                        14

Inc., 762 N.W.2d 463, 471–72 (Iowa 2009) (discussing equitable

indemnity).

      Essentially, the State on behalf of Hagedon, as the crime victim,

seeks indemnity from the criminal/tortfeasor Roache for Hagedon’s

liability to Northland resulting from the theft of the study guide.     But

liability in what amount? Could Northland enforce its $1900 fine and

collect it in full from Hagedon? The State as the party seeking indemnity

in Hagedon’s shoes “has the burden of proving [it] is entitled to the relief

requested.” In re Marriage of Ginsberg, 750 N.W.2d 520, 522 (Iowa 2008);

see also Bonstetter, 637 N.W.2d at 170 (indicating state bears burden of

proving amount of criminal restitution). We look to general principles of

the law of damages to determine whether the State met its burden of proof

as to restitution for the $1900 fine.

      D. Roache’s Avoidable Consequences Defense. Roache argues

that Hagedon, by acquiescing to an excessive $1900 fine, failed to protect

his own interests and minimize his damages after the theft and that the

doctrine of avoidable consequences would bar him from recovering the fine

in a civil action. Under the doctrine of avoidable consequences,

      a party cannot recover damages that result from
      consequences that a party could reasonably have avoided.
      The doctrine comes into play after a legal wrong occurs, but
      while some damage may still be averted, and bars recovery
      only for such damages. The doctrine is akin to mitigation of
      damages in contract actions when plaintiffs must attempt to
      reduce damages after an injury occurs.

Olson v. Prosoco, Inc., 522 N.W.2d 284, 291 (Iowa 1994) (citations omitted).

      The doctrine of avoidable consequences is a comparative fault

principle. See, e.g., Coker v. Abell-Howe Co., 491 N.W.2d 143, 150 (Iowa

1992) (“We hold that the Iowa legislature adopted the avoidable

consequences doctrine as an element of fault in Iowa Code section 668.1.”).
                                    15

“Tort theories dealing with fraud and intentional torts are not included in

the definition of ‘fault’ to which chapter 668[, Iowa’s comparative fault

statute,] applies.” State v. Wagner, 484 N.W.2d 212, 216 (Iowa Ct. App.

1992) (addressing restitution for kidnapping and insurrection during a

prison riot).   An intentional wrongdoer cannot raise the victim’s

comparative fault as a defense. Id.; see also Tratchel v. Essex Grp., Inc.,

452 N.W.2d 171, 180–81 (Iowa 1990), abrogated on other grounds by

Comes v. Microsoft Corp., 775 N.W.2d 302, 309–10 (Iowa 2009); see also

Mulhern v. Catholic Health Initiatives, 799 N.W.2d 104, 117 (Iowa 2011)

(“Tratchel remains good law for the proposition that an intentional

tortfeasor cannot reduce his liability by raising a defense of the victim’s

comparative negligence.”).   Further, in Wagner, the court of appeals

“determine[d] comparative fault principles do not apply to restitution for

criminal acts under Iowa Code chapter 910.” 484 N.W.2d at 216. We

agree as to intentional criminal acts.        Accordingly, the avoidable

consequences doctrine is inapplicable here.

      E. Evidentiary Support for the $1900 Restitution Award. To

prove the $1900 amount of restitution for the stolen study guide, the State

presented Hagedon’s testimony, as well as the agreements Hagedon signed

and the accompanying documents. Roache argues Hagedon has no legal

duty to pay the fine and has suffered no injury. For that reason, Roache

argues there is not substantial evidence to support the $1900 restitution

award.

      1. The State’s burden to prove restitution. The restitution statute

“allows recovery of ‘all damages’ . . . which the state can show by a

preponderance of the evidence.” Bonstetter, 637 N.W.2d at 168 (quoting

Ihde, 532 N.W.2d at 829).      A crime victim is entitled to recover in

restitution the amount that “a victim could recover against the offender in
                                          16

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.” Iowa Code § 910.1(3).

       When reviewing a restitution award, we must “determine whether

the court’s findings lack substantial evidentiary support.” Hagen, 840
N.W.2d at 144 (quoting Bonstetter, 637 N.W.2d at 165). We will not find

the restitution order is “excessive if it bears a reasonable relationship to

the damage caused.” Bonstetter, 637 N.W.2d at 168. We must determine

whether substantial evidence supports the $1900 restitution award.

       2. Restitution for crime victim’s obligations to a third party. The State

on behalf of Hagedon is seeking indemnification from Roache for the fine

Northland imposed for the stolen study guide. Our cases permit the party

seeking indemnity (the indemnitee) to recover from the wrongdoer (the

indemnitor) the amount the indemnitee “has been compelled to pay as a

natural consequence of the [indemnitor]’s negligence or other wrong.” In

re Marriage of Ginsberg, 750 N.W.2d at 522–23 (alteration in original)

(quoting Howell v. River Prods. Co., 379 N.W.2d 919, 921 (Iowa 1986)); see

also Iowa Dep’t of Human Servs. ex rel. Palmer v. Unisys Corp., 637 N.W.2d
142, 156–57 (Iowa 2001) (describing indemnity and subrogation as forms

of restitution to recover what one “has been compelled to pay” and

recognizing the party seeking restitution must first pay the obligation

(quoting Am. Sur. Co. of N.Y. v. Bethlehem Nat’l Bank of Bethlehem, 314
U.S. 314, 317, 62 S. Ct. 226, 228 (1941))). 3              Hagedon has not been

“compelled to pay” any part of the $1900 fine. He simply acknowledged

       3Parties  may nevertheless file pleadings asserting claims for restitution before
paying the amount at issue, with the court imposing restrictions on enforcement until
the claim is paid. See Unisys Corp., 637 N.W.2d at 157.
                                           17

Northland’s outstanding balance for his “fine” in that amount without

expressly agreeing to pay it.

       In Iowa, Chicago & Eastern Railroad Corp. v. Pay Load, Inc., the

United States District Court for the Northern District of Iowa addressed

Iowa tort damages in a somewhat analogous situation. 348 F. Supp. 2d
1045 (N.D. Iowa 2004). A truck driver employed by the defendant failed to

stop at a grade crossing, resulting in a train–truck collision that destroyed

a locomotive the plaintiff had been leasing from a third party. Id. at 1048–

49. Applying Restatement (Second) of Torts section 927, and comment m

thereto, 4 the federal district court noted,

       Here, under the terms of the lease, IC & E is obligated, upon
       demand by First Union, in the event of loss or destruction of
       a locomotive, to pay First Union a pre-determined amount as
       set forth in a Stipulated Loss Schedule which is attached to
       the lease. Such a loss appears to fall squarely within the
       framework of comment m. Moreover, such a result is in
       keeping with the principles underlying the allowance of
       damages in tort actions.

Iowa, Chi. & E. R.R., 348 F. Supp. 2d at 1053; Restatement (Second) of

Torts § 927 cmt. m, at 542 (Am. Law Inst. 1979). No party challenged this

liquidated-damages provision as an unenforceable penalty. “[T]he court

conclude[d] that in order to permit IC & E full compensation it will be

entitled to seek to recover the amount set forth in the lease’s Stipulated

Loss Schedule.”         Iowa, Chi. & E. R.R., 348 F. Supp. 2d at 1053.

Importantly, however, the court conditioned recovery on proof the plaintiff

will actually be required to pay the amount stipulated in the lease. Id. (“[I]f

       4Comment   m states in part,
               m. Further loss. The person entitled to the value of a thing taken
       or destroyed by a tortfeasor is entitled to recover for any further loss
       suffered by him as the result of the deprivation, subject to the rules stated
       in §§ 912 and 917 as to certainty and causation.
Restatement (Second) of Torts § 927 cmt. m, at 542.
                                     18

the evidence at trial establishes that IC & E will not be required to pay

First Union the amount set forth in the lease’s Stipulated Loss Schedule,

but instead a lesser amount, IC & E will not be permitted to seek such

damages.”).   Here, the State failed to prove Hagedon actually will be

“compelled to pay” Northland’s $1900 fine and failed to rebut Roache’s

argument that the fine is an unenforceable penalty.

      3. Northland’s unpaid fine alone is insufficient. The amount actually

paid because of the wrongdoing is evidence of the amount recoverable

through indemnification, particularly when the amount paid is fixed

through an arm’s-length transaction. See In re Marriage of Ginsberg, 750
N.W.2d at 522–23. The amount billed is not conclusive in tort cases, and

fact finders consider whether the plaintiff has paid the amount charged as

a factor in determining whether that amount was reasonable. See Pexa v.

Auto Owners Ins., 686 N.W.2d 150, 156 (Iowa 2004) (“The amount charged,

standing alone, is not evidence of the reasonable and fair value of the

services rendered. The billed amount is relevant only if that figure was

paid or an expert witness has testified to the reasonableness of the

charges.” (Citations omitted.)); see also Stanley v. State, 197 N.W.2d 599,

606–07 (Iowa 1972) (“The amount charged, without payment, is not

evidence of the propriety of the charges.”). Indeed, it is speculative whether

Northland will attempt to collect any amount from Hagedon beyond

whatever Roache pays in court-ordered restitution. And no expert or lay

witness testified that the $1900 amount was reasonable.

      Bonstetter is instructive.      John Bonstetter was convicted of

embezzling over $422,000 from his employer. 637 N.W.2d at 164. In the

restitution hearing, the state submitted a bill in the amount of $19,763 for

the cost of an audit, and the sentencing court included that amount in the

restitution award. Id. Bonstetter challenged the audit award on appeal,
                                      19

and we reversed, concluding the auditor’s bill alone (without proof the

victim paid it) was insufficient to meet the state’s burden of proof that the

cost of this audit was reasonable and necessary. Id. at 169–70 (holding

“the inclusion of the costs of the audit as an item of damage was not

supported by substantial evidence”).

      The State argues that Hagedon has suffered $1900 in damages. The

record shows, however, that Hagedon has not paid the $1900 fine and that

Northland to date has not attempted to collect the fine from him. Hagedon

testified Northland was “waiting for what we would hear from restitution.”

When the court asked whether Hagedon talked to Northland about waiving

the fine, Hagedon stated, “[A]ny restitution that came out of this, they

would still like to get. I haven’t spoke[n] with them since probably the day

of the class.” Hagedon did not know what would happen if the court did

not include the fine in the restitution award or if he failed to pay the fine.

In any event, Hagedon completed Northland’s training course and

obtained his CDL despite his $1900 outstanding balance with Northland

for the loss of the study guide. We conclude that Northland’s unpaid fine

is akin to the unpaid billing invoice in Bonstetter and is insufficient without

more to support the restitution award.

      4. Methods of calculating damages. We next consider whether other

evidence supports the restitution award. “We have said that tort damages

are not limited by the reasonable contemplations of the parties. Instead,

the amount of direct injury is compensated, whether its extent was

contemplated or not.” R.E.T. Corp. v. Frank Paxton Co., 329 N.W.2d 416,

420 (Iowa 1983). “In civil cases, we will affirm a damage award if it is

within a reasonable range of the evidence.” Watts, 587 N.W.2d at 752.

      [T]here is a recognized distinction between proof of the fact
      that damages have been sustained and proof of the amount of
      those damages. One cannot recover if it is speculative and
                                    20
      uncertain as to whether the damages claimed have actually
      been sustained, but if the uncertainty lies only in the amount
      of damages, recovery may be had if there is proof of reasonable
      basis from which the amount may be inferred.

Id. (quoting Natkin & Co. v. R.F. Ball Constr. Co., 255 Iowa 1156, 1167, 123
N.W.2d 415, 422 (1963)). With regard to reviewing damage awards, we

stated,

      Although it may not be possible to value the property with
      absolute certainty as of a particular date, an award of
      damages may still stand so long as the figure has a reasonable
      basis and is not speculative, possible or imaginary,
      particularly where the conduct of the wrongdoers has
      rendered it difficult to ascertain the damages suffered with the
      precision otherwise possible.

Id. (quoting 22 Am. Jur. 2d Damages § 430, at 515–16 (1988)).

      i. Replacement cost or actual value. One measure of damages is the

replacement cost of the study guide. “The general rule in Iowa for repairs

or for replacement [of property] is the fair and reasonable cost of

replacement or repair, but not to exceed the value of the property

immediately prior to the loss or damage.” State v. Urbanek, 177 N.W.2d
14, 16 (Iowa 1970).

      Roache argues that the $1900 fine has no reasonable relationship

to the actual replacement cost of the study guide. The study guide was

soft covered, approximately six inches wide by eight or ten inches long,

and between a quarter- and half-inch thick.       The State presented no

evidence regarding the replacement cost of the study guide. The district

court “presume[d] that $1,900 far exceeds the actual cost to print the

study guide.”    Hagedon testified without objection at the restitution

hearing that his insurance company determined the study guide had no

value and that $1900 was the amount of the fine, but “not the actual value

of the book.” The State did not show the guide’s value exceeds the cost of
                                      21

the course tuition that included use of the guide—yet Northland

admittedly imposed a fine of four times the cost of tuition.

      The study guide’s contents may well have value as intellectual

property, but the State presented no expert or lay testimony to prove such

value. No copyright infringement, trade secret, or business competition

injury was shown to justify the $1900 amount.

      ii. Hagedon’s damages for breach of contract. The State argues the

$1900 restitution award is supported by the evidence showing Hagedon’s

liability for breach of Northland’s contract as liquidated damages for loss

of the study guide. The parties agree on the applicable general principles

of contract law but disagree as to the result when those principles are

applied to this evidentiary record.

      Damages for breach of contract . . . are limited to “those
      injuries which may reasonably be considered as arising
      naturally from the breach of contract itself, or such as may
      reasonably be supposed to have been in the contemplation of
      the parties, at the time of contracting, as a probable result of
      the breach.”

R.E.T. Corp., 329 N.W.2d at 420 (emphasis added) (quoting Meyer v.

Nottger, 241 N.W.2d 911, 920 (Iowa 1976)).

      When the amount of damages resulting from a breach of contract is

uncertain,

      [d]amages for breach by either party may be liquidated in the
      agreement but only at an amount that is reasonable in the
      light of the anticipated or actual loss caused by the breach
      and the difficulties of proof of loss. A term fixing unreasonably
      large liquidated damages is unenforceable on grounds of
      public policy as a penalty.

Rohlin Constr. Co. v. City of Hinton, 476 N.W.2d 78, 80 (Iowa 1991) (quoting

Restatement (Second) of Contracts § 356(1), at 157 (Am. Law Inst. 1981)).

      We consider two factors in determining whether a liquidated-

damages provision constitutes an unenforceable penalty: (1) “the
                                     22

anticipated or actual loss caused by the breach” and (2) “the difficulty of

proof of loss.” Id. (quoting Restatement (Second) of Contracts § 356(1)

cmt. b, at 157–58); see also City of Davenport v. Shewry Corp., 674 N.W.2d
79, 85 (Iowa 2004) (same). “The greater the difficulty either of proving that

loss has occurred or of establishing its amount with the requisite certainty,

the easier it is to show that the amount fixed is reasonable.” Rohlin Constr.

Co., 476 N.W.2d at 80 (quoting Restatement (Second) of Contracts § 356(1)

cmt. b, at 158).

      The State argues that the contract documents support the $1900

restitution award based on Hagedon’s purported contractual liability to

Northland in that amount. Roache responds that the amount of the fine

is an unenforceable penalty rather than a valid contractual liquidated-

damages provision.

      We agree with the State that the uncertain value of the study guide

permits its loss to be set through a liquidated-damages provision in

Northland’s contract with its students such as Hagedon.         But Roache

argues Hagedon never agreed to the $1900 amount when he signed his

contract for the training course. See Golden Sun Feeds, Inc. v. Clark, 258
Iowa 678, 683, 140 N.W.2d 158, 161 (1966) (“The phrase ‘liquidated

damages’ means a sum stipulated and agreed upon by the parties, at the

time of entering into a contract, as being payable as compensation for

injuries in the event of a breach.” (emphasis added) (quoting 22

Am. Jur. 2d Damages § 212, at 297 (1965))).       The State responds that

Hagedon’s initial contract made clear he would be assessed a costly fine

in an unspecified amount for loss of the study guide and that after the

theft, he signed a second Northland document acknowledging the $1900

amount of the fine. In our view, this paper trail remains inadequate to

establish Hagedon’s legal obligation to pay Northland that amount for the
                                   23

loss of the study guide because an excessive amount can be an

unenforceable penalty.

      The State failed to meet its burden to prove $1900 is reasonably

related to the anticipated damages for Hagedon’s breach of the Northland

contract.   As noted, the State offered no testimony to support an

intellectual property value for the guide or its replacement cost.

Northland’s own description of the $1900 amount as a “fine” supports the

conclusion that it is an unenforceable penalty rather than a valid

liquidated-damages amount. Northland could not compel Hagedon to pay

such a penalty in a civil action. For that reason, Hagedon would be unable

to seek indemnification from Roache in that amount in a civil action for

breach of contract.

      iii. Punitive damages. Roache argues the $1900 fine constitutes an

award of punitive damages prohibited by the governing statute. See Iowa

Code § 910.1(3) (“ ‘Pecuniary damages’ means all damages . . . except

punitive damages and damages for pain, suffering, mental anguish, and

loss of consortium.”). Punitive damages are distinct from pecuniary or

actual damages. “Punitive damages exist to punish a defendant who has

‘intentionally violated another’s rights.’ ” Papillon v. Jones, 892 N.W.2d
763, 771 (Iowa 2017) (quoting Ackelson v. Manley Toy Direct, L.L.C., 832
N.W.2d 678, 686 (Iowa 2013)).      Punitive damages also serve to deter

similar misconduct by the defendant and others in the future.          Id.

Northland’s documents show it threatens students with a “costly fine” to

deter students from retaining the study guides and punish those who fail

to return them. Given the lack of any evidence of the study guide’s actual

value, we conclude Northland’s $1900 fine was punitive.          For that

additional reason, the $1900 fine must be excluded from the restitution

award. See Iowa Code § 910.1(3).
                                    24

      Sentencing courts should not rubber-stamp victim restitution

claims. The sentencing court in this case clearly explained its reasoning

for awarding restitution, as did the court of appeals in affirming the $1900

award, which facilitated our review. Nevertheless, we reach a different

conclusion. In our view, the State failed to meet its burden of proof, and

the amount of pecuniary damages awarded in restitution for this study

guide is unsupported by substantial evidence. Perhaps Northland could

have enforced a smaller amount in a valid liquidated-damages provision

with its students. Northland’s assessment of the $1900 fine for its paper

study guide invokes the adage, “pigs get fat, hogs get slaughtered.”

      IV. Disposition.

      For these reasons, we vacate the decision of the court of appeals and

reverse the district court’s restitution order as to the $1900 award for the

study guide. We affirm the restitution judgment as modified.

      DECISION OF COURT OF APPEALS VACATED; DISTRICT COURT

JUDGMENT AFFIRMED IN PART AND REVERSED IN PART.

      All justices concur except Mansfield, J., who dissents.
                                        25
                                                    #17–0931, State v. Roache
MANSFIELD, Justice (dissenting).

         I respectfully dissent. I believe the court is looking at the wrong law,

thereby leading it to the wrong result.

         The restitution statute authorizes “payment of pecuniary damages

to a victim.” Iowa Code § 910.1(4) (2016). “Pecuniary damages” means

         all damages to the extent not paid by an insurer on an
         insurance claim by the victim, which a victim could recover
         against the 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). So the relevant question is what damages could Jordan

Hagedon, the victim, recover from Terran Roache, the defendant, in a civil

action.

         As the court ultimately recognizes, this is an issue of damages, not

scope of liability. The loss of the CDL study guide was certainly within the

scope of liability; Roache took the backpack that contained this study
guide.     The Third Restatement has not yet addressed the subject of

damages for intentional torts to property.         See Restatement (Third) of

Torts: Liab. for Physical & Emotional Harm Introduction, at 1–2 (Am. Law

Inst. 2010) (“Determining the recoverable damages and their amount is

beyond the scope of this Restatement and remains within the Second

Restatement’s coverage until future installments of the Restatement Third,

Torts.”). Hence, we revert to prior law.

         The Second Restatement provides that damages for conversion of a

chattel include the value of the chattel and “the amount of any further

pecuniary loss of which the deprivation has been a legal cause.”

Restatement (Second) of Torts § 927, at 534 (Am. Law Inst. 1979). In State

v. Taylor, which involved court-ordered restitution in a theft case, we

quoted and relied on this provision. See 506 N.W.2d 767, 768, 769 (Iowa
                                    26

1993). There we concluded that theft was analogous to conversion, and

the university’s recoverable restitution in a theft case included not only

the uninsured loss but also $14,425 for the audit the university had to

perform. Id. at 768–69.

      So the only issue for me is whether Hagedon in fact has to pay the

fine. The record leaves some doubt.

      It is notable that Hagedon agreed in writing at the outset to pay a

fine if the copyrighted study guide was not returned.       After the theft

occurred, and before it had been solved, Hagedon signed a further

agreement to pay $1900 for the loss of the study guide. I give weight to

this agreement because it was not developed for purposes of the restitution

hearing but was in fact a binding, arm’s length commitment by Hagedon

to pay $1900.

      On the other hand, Hagedon’s testimony at the restitution hearing

was inconclusive. He said he was told Northland has charged the $1900

in the past, but he did not know if he would actually be charged the $1900

if he was unable to get it included in the restitution award.

      The district court found,

      The “damage” to the victim for failing to return the study guide
      came to $1,900.        But for [Roache’s] criminal actions,
      [Hagedon] would not have been assessed that “fine.” The
      Court would presume that $1,900 far exceeds the actual cost
      to print the study guide, but the actual cost of the study guide
      does not reimburse [Hagedon] for the loss he sustained as a
      result of [Roache’s] actions. The amount claimed for damages
      for Jordan Hagedon is approved in the amount of $1,900.00
      for the study guide and $500.00 for his insurance deductible.

      The majority correctly states that restitution proceedings are

reviewed for correction of errors at law. See State v. Hagen, 840 N.W.2d
140, 144 (Iowa 2013). If substantial evidence supports the district court’s

factual finding, we are bound to affirm it. See id. Because substantial
                                           27

evidence supports the fact-finding here, I would affirm.                  Although the

evidence would probably also support a contrary finding that Hagedon is

not actually obligated to pay the $1900, it is not our job to reweigh the

evidence.

       I do not think liquidated-damages caselaw has much relevance here.

This isn’t a breach of contract case between Hagedon and Northland CDL

Training & Licensing, subject to a breach-of-contract measure of damages.

It’s a hypothetical tort claim by Hagedon against Roache. Usually tort

defendants must compensate victims as they find them.

       More relevant, in my view, is a decision of the United States District

Court for the Northern District of Iowa addressing tort damages in a

somewhat analogous situation. In Iowa, Chicago & Eastern Railroad Corp.

v. Pay Load, Inc., a truck driver employed by the defendant failed to stop

at a grade crossing, resulting in a train–truck collision that totally

destroyed a locomotive the plaintiff had been leasing from a third party.

348 F. Supp. 2d 1045, 1048–49 (N.D. Iowa 2004). Applying Restatement

(Second) of Torts § 927, and comment m thereto, 5 the federal district court

noted,

       Here, under the terms of the lease, IC & E is obligated, upon
       demand by First Union, in the event of loss or destruction of
       a locomotive, to pay First Union a pre-determined amount as
       set forth in a Stipulated Loss Schedule which is attached to
       the lease. Such a loss appears to fall squarely within the
       framework of comment m. Moreover, such a result is in
       keeping with the principles underlying the allowance of
       damages in tort actions.

       5Comment   m states in part,
               m. Further loss. The person entitled to the value of a thing taken
       or destroyed by a tortfeasor is entitled to recover for any further loss
       suffered by him as the result of the deprivation, subject to the rules stated
       in §§ 912 and 917 as to certainty and causation.
Restatement (Second) of Torts § 927 cmt. m, at 542.
                                     28

Id. at 1053. The court went on to conclude that “in order to permit IC &

E full compensation it will be entitled to seek to recover the amount set

forth in the lease’s Stipulated Loss Schedule.”       Id.    However, “if the

evidence at trial establishes that IC & E will not be required to pay First

Union the amount set forth in the lease’s Stipulated Loss Schedule, but

instead a lesser amount, IC & E will not be permitted to seek such

damages.” Id.

      This simple and straightforward analysis should apply with equal

force here. If Hagedon will have to pay the $1900, it should be awarded

as restitution; if not, it shouldn’t.   Substantial evidence supports the

district court finding that Hagedon actually owes the $1900.

      Rather than giving us a clear and precise explanation for why it is

overturning the district court’s award of restitution, the majority offers a

series of partial explanations. I find them unpersuasive.

      For example, the majority states that Roache should not have to

indemnify    Hagedon     for   the   $1900    because       Hagedon   “simply

acknowledged” this amount “without expressly agreeing to pay it.” I do

not follow this distinction. After the theft, Hagedon agreed in writing that

he “will be charged” the $1900. To me, that is an agreement to pay it.

Again, notwithstanding the text of the written agreement, Hagedon could

not confirm at the hearing that he actually would be charged the $1900 if

it wasn’t included in the restitution award. Still, there was enough in the

record to sustain the district court’s finding that an actual loss of $1900

would be incurred by Hagedon.

      Next, consider the duo of cases cited by the majority relating to the

recovery of medical expenses in personal injury cases. Undeniably, our

law limits injured plaintiffs to recovery of “reasonable and necessary” costs

of medical care. Pexa v. Auto Owners Ins., 686 N.W.2d 150, 156 (Iowa
                                        29

2004); see also Stanley v. State, 197 N.W.2d 599, 606 (Iowa 1972). We

have a long-standing corollary rule that in proving the reasonable value of

medical services, the amount billed is relevant only if it has been paid or

if an expert witness testified to its reasonableness. See Pexa, 686 N.W.2d

at 156; Stanley, 197 N.W.2d at 606–07. Any patient who receives a bill

nowadays from a health care provider would understand why we have that

rule and would agree that it makes sense. But it is a rule for medical

expenses in personal injury cases, not for every category of tort damages.

The court’s implication to the contrary is incorrect. Compare Restatement

(Second) of Torts § 927, at 534 (relating to damages for conversion or

destruction of a thing), with id. § 924, at 523 (relating to personal injury

damages       and   indicating   that   reasonable   medical    expenses    are

recoverable).

      Nor is this a case like State v. Bonstetter, 637 N.W.2d 161 (Iowa

2001). The issue there, as in Taylor, was whether the cost of an audit

could be recovered. Id. at 168. But no evidence was presented except the

$19,763 auditor’s bill. Id. at 169–70. We concluded,

      [P]resentation to the court of the bill alone is not enough to
      prove the costs of the audit are necessary, fair, and
      reasonable. Some other proof is necessary before we can
      conclude the audit was a reasonable, fair, and necessary
      element of damage.

Id. at 170.

      I think it is self-evident that a $19,763 audit bill as a restitution item

in an embezzlement case is not self-explanatory and requires something

more than just the bill. Notably, we said in Bonstetter that testimony from

a witness that the audit fees were “necessary, fair, and reasonable” was

not required; all that was needed was “evidence to support the conclusion

the audit is necessary, fair, and reasonable.” Id. at 169. Here, by contrast,
                                    30

the State submitted more than a bill: it presented two separate contracts

plus testimony from Hagedon.

      Most of all, as I’ve already noted, the majority relies on liquidated

damages law. But even if this body of contract law were relevant, I would

disagree with the majority’s liquidated-damages analysis.

      To begin with, the $1900 are not liquidated damages. This amount

was agreed upon after the breach occurred, not before. Cf. Restatement

(Second) of Contracts § 356 cmt. a, at 157 (Am. Law Inst. 1981) (explaining

that a liquidated-damages clause “effectively provide[s] in advance the

damages that are to be payable in the event breach”). “In a contract of

accord for breach of a previously broken contract, the parties may agree

on what terms of settlement they will accept . . ., however unfavorable the

accord may be to the party in default.” 24 Richard A. Lord, Williston on

Contracts § 65:5 (4th ed.), Westlaw (database updated Nov. 2018).

      Additionally, even if the $1900 could be viewed as liquidated

damages, the majority misallocates the burden of proof.          Under our

caselaw, stipulated-damages clauses are presumptively valid. See Gordon

v. Pfab, 246 N.W.2d 283, 288 (Iowa 1976) (“A party who contends that a

liquidation clause is in reality a penalty has the burden to plead that fact

and prove the actual damages in the trial court.”); see also Heaberlin v.

Heaberlin, 255 Iowa 403, 409, 122 N.W.2d 841, 844 (1963) (citing cases).

It is not the proponent’s burden to prove validity of the clause, but the

burden of the party contesting the clause to prove its invalidity.

      Nor is the issue the “value” of the study guide. Rather, the issue is

the potential damage that would befall Northland if its copyrighted,

proprietary study guide began to circulate, where others could copy it for

their purposes such as to offer their own CDL course. How much is that

damage, and how difficult is it to estimate? See Restatement (Second) of
                                     31

Contracts § 356 cmt. b, at 158 (“The greater the difficulty either of proving

that loss has occurred or of establishing its amount with the requisite

certainty, the easier it is to show that the amount fixed is reasonable.”).

      Lastly, whether the $1900 is denominated a fine or liquidated

damages in the parties’ agreements has little significance. See id. cmt. c,

at 159 (“Neither the parties’ actual intention as to its validity nor their

characterization of the term as one for liquidated damages or a penalty is

significant in determining whether the term is valid.”).

      For the foregoing reasons, I would uphold the district court’s

restitution award as supported by substantial evidence. In my view, the

majority’s criticisms are more aptly directed to our laws regarding fines,

surcharges, and restitution generally, rather than to anything the district

court or anyone else did in this particular case.