Opinion
22-1800
03-06-2024
SARA JO WEISBECK, Plaintiff-Appellant, v. IOWA DISTRICT COURT FOR SCOTT COUNTY, Defendant-Appellee.
Martha J. Lucey, State Appellate Defender, and Ella M. Newell, Assistant Appellate Defender, for appellant. Brenna Bird, Attorney General, and Martha E. Trout, Assistant Attorney General, for appellee.
Appeal from the Iowa District Court for Scott County, Tamra Roberts, Judge.
Defendant challenges the award and amount of victim restitution. WRIT SUSTAINED AND REMANDED.
Martha J. Lucey, State Appellate Defender, and Ella M. Newell, Assistant Appellate Defender, for appellant.
Brenna Bird, Attorney General, and Martha E. Trout, Assistant Attorney General, for appellee.
Considered by Greer, P.J., Schumacher, J., and Blane, S.J. [*]
BLANE, Senior Judge.
Sara Jo Weisbeck, through writ of certiorari, challenges the district court's imposition of restitution following her convictions for identity theft and insurance fraud. She contends the State did not prove she was the factual cause of the damage or that the damage was within the scope of liability, and the district court erred in its determination of the amount of restitution. We sustain the writ and remand for further proceedings.
Although Weisbeck initially filed a notice of appeal, the supreme court determined the proper form of review was a petition for writ of certiorari. See Iowa R. App. P. 6.108. The supreme court granted certiorari review and transferred the case to the court of appeals.
I. Background facts and proceedings.
We set out the facts underlying the criminal convictions in State v. Weisbeck, No. 22-1068, 2023 WL 6620330, at *1-2 (Iowa Ct. App. Oct. 11, 2023).
In spring 2019, Weisbeck was renting a house from Lisa Smith in LeClaire. The house did not come with appliances, so Weisbeck provided her own refrigerator, stove, microwave, washer, and dryer. The night of June 30, there was a severe storm in the area. The following morning, Weisbeck sent Smith this text message:
Hey you . . . first of all, thank you SO much for the air conditioner!!!
I don't want to sound sketchy, but the house totally got struck [b]y lightening [sic] last night, and there are trees like splitting down the middle .... I don't know if you want to call your insurance and report it as part of the damage or not, but it would be good timing to do so if you did!
That evening, Smith and her son went over to the house. Weisbeck was in the back yard and showed Smith the splitting tree at the back of the large lot. But Smith did not see or smell any scorching. Weisbeck then told Smith that lightning had struck the roof of the house and knocked a window out of its frame. Smith saw a window frame lying on the ground with one pane missing, but no shattered glass was around it. Weisbeck also said, because of the lightning strike, all of her appliances got "fried." Weisbeck would not, however, let Smith into the house to inspect the damage to the
window. She only allowed Smith in several days later. Smith ultimately did not file any claim with State Farm, her property insurer.
On July 2, the day after speaking with Smith, Weisbeck reported to her insurer, Nationwide Insurance, that lightning struck a tree on her lawn, and the electricity traveled into her house, damaging her appliances. She gave a list of the damaged items, which included: a refrigerator, "gas stove/oven," microwave, frontloading washer, dryer, HP Compaq computer, 65" Samsung OLED flatscreen television, 60" Samsung television, PlayStation 3, X Box, Blu-ray/DVD player, and $200 worth of spoiled groceries from the refrigerator. She was also asked for and provided photographs of the items.... ....
Joe Martinez, a special investigator with Nationwide, took over the case around July 10. He tried calling Weisbeck with no answer. So, on July 12, he went out to the house for a "cold call." Weisbeck answered the door, and Martinez gave her his business card advising her that he needed to inspect the property for her insurance claim. Weisbeck took Martinez to the back yard to look at the tree. She said lightning struck the tree, travelled through the roots into the house, and shorted out all her electronics.
When he asked to inspect the interior of the home, Weisbeck would not let him in. He explained that they needed to inspect the home and conduct an interview to collect additional information on the claim. Weisbeck said she needed to call Nationwide and verify his story. Martinez asked if he could continue taking pictures of the outside of the house, and Weisbeck said that was fine. Martinez photographed the tree and the house exterior, noting that the electrical meter was still functioning and there appeared to be no electrical or fire damage to the house.Weisbeck, 2023 WL 6620330, at *1-2 (footnotes omitted). A jury found Weisbeck guilty of insurance fraud for fraudulently trying to obtain an insurance payout for those appliances and electronics by submitting photographs of her parents' appliances to the insurer instead of the items she alleged were in her home. The jury also found she committed identity theft when she sent emails to Nationwide posing as Smith with the intent to obtain that payout. We affirmed those convictions on direct appeal. See Weisbeck, 2023 WL 6620330, at *4.
Iowa Code section 507E.3(2) (2019) provides that
A person commits the offense of insurance fraud, as a class "D" felony, if the person with the intent to defraud an insurer . . .:
(a) Presents or causes to be presented to an insurer, any written document or oral statement, including a computer-generated document, as part of, or in support of, a claim for payment or other benefit pursuant to an insurance policy, knowing that such document or statement contains any false information concerning a material fact.
Iowa Code section 715A.8(2) and (3)(b) provide a person commits the offense of identity theft of property with value exceeding $1500 and less than $10,000, a class "D" felony, "if the person fraudulently uses or attempts to fraudulently use identification information of another person, with the intent to obtain credit, property, services, or other benefit." "Identification information" includes a person's name or electronic name signature or electronic identifier or screen name. Iowa Code § 715A.8(1)(a).
Following the conviction, Lisa Smith, through the county attorney, requested victim restitution. Among the items Smith submitted was $1240 for replacing the window Weisbeck had shown Smith on July 1 as it was lying on the ground next to the house and that Weisbeck had stated was knocked out of its frame by the lightning strike. The court held a restitution hearing where Smith testified she hired a contractor to replace the window. Since the window was on the front of the house and the replacement did not match the other window on the front of the house Smith had both windows replaced so they would aesthetically match. The contractor submitted one invoice to Smith for $1240. The invoice broke out the charges in two categories. First, $85 for labor and materials to replace the front door lock and cover over a broken window. Second, $1155 for labor and materials for the two front lower-level windows as well as a window over the kitchen sink. Smith also testified that she replaced the air conditioner and completed renovations Weisbeck left unfinished in the kitchen, such as painting the cabinets and wall and repairing the countertop.
Smith's restitution request included "windows" for $1240, kitchen cabinet repairs of $2106, kitchen wall and countertop repairs for $229.35, air conditioner replacement for $2600, lost wages of $289.52, labor costs of $316.66, a bounced check and unpaid rent during Weisbeck's occupancy of $2000, and rent while the house was vacant for repairs of $3000.
In its victim restitution order, the court found: the only loss the landlord suffered as a result of the insurance fraud was a broken window. Two windows were replaced so they would match. The Court does not find that the other requested damages are tied in any way to the crime that occurred. They seem to be normal landlord tenant issues that were piled on this case in hope of recovery. They were in no way damages that could be recovered in a civil court for the insurance fraud.
The court ordered restitution in the amount of $1240 based on the contractor's invoice. Weisbeck challenges the restitution order by writ of certiorari.
II. Standard of review.
"In a certiorari case, we review the district court's ruling for correction of errors at law." Weissenburger v. Iowa Dist. Ct., 740 N.W.2d 431,434 (Iowa 2007). "We . . . interpret[] this standard liberally." State v. Patterson, 984 N.W.2d 449, 456 (Iowa 2023) (citation omitted). "A writ of certiorari lies where a lower . . . court has exceeded its jurisdiction or otherwise acted illegally." Weissenburger, 740 N.W.2d at 434 (citation omitted). Illegality "occurs 'when the court's findings lack substantial evidentiary support, or when the court has not properly applied the law.'" Patterson, 984 N.W.2d at 456 (citation omitted).
III. Analysis.
Weisbeck argues the district court erred by ordering her to pay restitution to Smith in the amount of $1240. She asserts there is a "lack [of] substantial evidentiary support that Ms. Weisbeck was the factual cause of the damage to the window." Weisbeck claims that "[i]n order for restitution to be ordered, the State must establish that Ms. Weisbeck intentionally damaged the window by a preponderance of the evidence." She further claims "[t]here was also insufficient evidentiary support for the amount of restitution ordered."
Iowa Code section 910.2(1) requires a defendant to pay any pecuniary damages to the victim of their offense as part of restitution. A "victim" is "a person who has suffered pecuniary damages as a result of the offender's criminal activities." Iowa Code § 910.1(11). "Pecuniary damages" are
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(6). "The State bears the burden of proof to recover damages due [to] the victim." State v. Roache, 920 N.W.2d 93, 100 (Iowa 2018).
"In calculating a restitution order, the district court must find a causal connection between the established criminal act and the injuries to the victim." State v. Bonstetter, 637 N.W.2d 161, 168 (Iowa 2001). "The damage must have been caused by the offender's criminal act to justify the restitution order." Id. The statute allows recovery of "all damages" that "the State can show by a preponderance of the evidence." Roache, 920 N.W.2d at 104 (quoting Bonstetter, 637 N.W.2d at 168.)
Causation has two parts: factual cause and scope of liability. Id. at 101. We evaluate factual cause with a but-for test:
The 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.Id. (cleaned up for readability). And to determine the scope of liability, we apply the risk standard from the Restatement (Third) of Torts. Id. at 102 ("[W]e now hold that the Restatement (Third) of Torts' risk standard for scope of liability applies in criminal restitution determinations.").
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. (cleaned up for readability) (citation omitted). "The scope of liability is broader for intentional torts." Id.
Factual causation. Weisbeck contends that the evidence does not support factual causation-the "but for" test. She argues, "The facts at trial or at the restitution hearing did not establish that Ms. Weisbeck's actions were responsible for damaging the window." Weisbeck points out that there is no dispute that a storm occurred on the night of June 30 and claims that the storm blew the window out of the frame. She also points out that she did not admit to damaging the window. But this is inconsistent with Weisbeck's statement to Smith that the cause was the lightning strike to the house.
We agree no one saw Weisbeck damage the window. And she did not admit to damaging it. But Weisbeck does not dispute that the window was broken. She also argues, "Although Ms. Weisbeck told Smith about the damaged window, there's no indication she did it to further her insurance claim." We do not agree. Weisbeck's action in pointing out the broken window in conjunction with her contemporaneous statement that it was caused by lightning striking the house is a sufficient link that Weisbeck caused the damage to the window to support her fraudulent insurance claim. Before the claimed lightning strike, Weisbeck had rented the house for quite some time. She had not reported to Smith, her landlord, that the window was broken and needed repair. When Weisbeck notified Smith of the purported lightning event, not yet mentioning the window, Smith made arrangements to come to the house to view the damage. Weisbeck's text message even suggested that Smith would want to make her own insurance claim for damage due to the lightning strike.
Weisbeck first took Smith to the back yard area to inspect the tree supposedly hit by lightning. Smith did not see any evidence of a lightning strike. Weisbeck then took Smith around to the front of the house and specifically pointed out the window lying on the ground and told Smith that "lightning struck the roof of the house and knocked the window out of its frame." Smith saw the window lying on the ground with one pane missing, but no shattered glass around it. Smith testified that it looked like someone had knocked the window out of the house. The photographs of the window suggest the window had not been on the ground for an extended period of time before Smith's arrival to inspect damage to the residence, indicating the window was damaged a short time before Smith arrived for the inspection. Weisbeck also denied Smith access inside the house to view any other possible damage supposedly caused by the lightning strike. "Evidence is substantial if a jury could reasonably infer a fact from the evidence." Spreitzer v. Hawkeye State Bank, 779 N.W.2d 726, 734 (Iowa 2009) (quoting Gibson v. ITT Hartford Ins. Co., 621 N.W.2d 388, 391 (Iowa 2001)). We find there is substantial evidence for a factfinder to infer that Weisbeck broke the window to support her fraudulent claim that lightning struck the house. So "but for" Weisbeck's need for evidence to support that claim, the window would not have been broken. The district court did not act outside its jurisdiction or otherwise illegally when it found a preponderance of the evidence to show Weisbeck was the factual cause of the window breaking.
Scope of liability. Weisbeck contends that since the broken window was not part of her claim to the insurance company, it is not part of the damages for which there can be a restitution claim based on her insurance fraud conviction.She also argues that she never advised the insurance company about the broken window in support of her claim so it is not within the scope of liability. It is true Weisbeck could not make a claim for damage to the window as it was not her property. Smith would have had to make that claim. But Weisbeck inquired if Smith was going to make a claim to her insurance carrier for damage to the house due to the "lightning strike," which presumably would include damage to the window. If Smith made her own insurance claim this would bolster Weisbeck's claim. Smith never pursued such a claim as she did not believe Weisbeck that there had been a lightning strike. The evidence supports that Weisbeck attempted to use the broken window to support her fraudulent insurance claim.
We agree that Weisbeck's conviction for identity theft would not support an award of restitution for the broken window.
A representation must be false at the time it was made to support a claim of fraud. Spreitzer, 779 N.W.2d at 735. Fraudulent misrepresentation is an intentional tort. Id. at 737. Both Weisbeck's claim to her insurance company of a lightning strike and her statement to Smith that the window was blown out by a lightning strike were false. Her conviction for insurance fraud equates to a finding that Weisbeck committed an intentional tort.
Weisbeck ignores that the supreme court, in adopting the Restatement (Third) of Torts in Roache, particularly section 33, provides that the scope of liability is broader for intentional torts. Id. 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."). "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: Scope of Liab. for Intentional and Reckless Tortfeasors § 33(b) (Am. Law. Inst. Mar. 2024 Update)..
The risk of harm-fraud-was increased by Weisbeck damaging the window to support her insurance claim that a lightning strike caused damage to her property. Smith, as the property owner, suffered damage to the window-a broader harm-as part of Weisbeck's scheme to defraud her insurance company. This fits within the scope of liability provided in section 33 of Restatement (Third) of Torts. Smith was entitled to restitution damages from Weisbeck. See generally also State v. Jauregui, 964 N.W.2d 358 (Iowa Ct. App. 2021) (mother of victim awarded restitution from defendant for lost wages due to time off work to deal with daughter's emotional issues who was direct victim of defendant's criminal conduct).
Amount of restitution. Weisbeck challenges the court's award of $1240 in restitution to Smith. Her challenge is two-fold. First, she argues that the award of $1240 is not supported by the evidence. Second, she contends that the court's award included more than the cost of the one broken window. We agree.
Smith's evidence of the amount of damage was the one invoice from the contractor who performed repairs on the house. The invoice covers five items: a front door lock, boarding up a broken window, replacing two lower-level windows on the front of the house, and replacing a kitchen window. The invoice breaks out the charges as $85 for the front door lock and covering up a broken window. The evidence does not support a restitution order for the front door lock. And the invoice is not specific if the covering up of a broken window is the same window that Weisbeck claimed was knocked out by a lightning strike.
The remaining $1155 is for replacing two front, lower-level windows and a kitchen window. Smith explained that the replacement window for the broken window did not match a second window on the front of the house and required her to also replace it. But replacing the kitchen window was not part of any damage related to Weisbeck's fraudulent insurance claim, so Smith is not entitled to recover the cost of its replacement.
In addition, the district court's ruling authorized restitution for the two front windows stating the "two windows were replaced so they would match." Pecuniary damages are "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." Iowa Code § 910.1(3) ; Bonstetter, 637 N.W.2d at 167. In fixing the appropriate measure of recovery, it is incumbent upon the court to keep in mind "that the principle underlying allowance of damages is that of compensation, the ultimate purpose being to place the injured party in as favorable a position as though no wrong had been committed." Bangertv. Osceola Cnty., 456 N.W.2d 183, 190 (Iowa 1990) (citing Dealers Hobby, Inc. v. Marie Ann Linn Reality Co., 255 N.W.2d 131, 134 (Iowa 1977)).
On this record we are unsure whether Smith is legally entitled to an award of restitution for the second front window that was only replaced for aesthetic purposes. See id. (finding that plaintiffs had not established a compensable aesthetic loss). Smith would only be able to recover damages for replacement of a second front window for matching purposes if the replacement of the broken window was unique and could not be readily replaced with a matching window. From our review of the record before us, it appears that the front window to be replaced is a standard vinyl-clad window and not a style that would be difficult to match, but we recognize that the record is minimal on that issue.
The contractor invoice did not provide the district court with a sufficient breakdown of repair costs to support the restitution award of $1240. We find that the restitution order should be vacated and this matter remanded to the district court to determine the costs associated with the broken front window and the window that was required to be replaced to match the broken window, if aesthetically necessary, which would include labor and materials for replacement. The court may also determine whether the covering up of a broken window shown in the invoice is related specifically to the damaged front window and the specific amount of that expense. Thus we sustain the writ and remand to the district court for further proceedings.
WRIT SUSTAINED AND REMANDED.
[*] Senior judge assigned by order pursuant to Iowa Code section 602.9206 (2024).