Thеresa HUML, Plaintiff-Respondent, v. Robert W. VLAZNY, Defendant-Appellant, Todd J. CECCHI, Roy Cecchi, The St. Paul Companies, Inc., a/k/a St. Paul Fire & Marine Insurance Company, and St. Paul Insurance Company of Illinois, Defendants.
No. 2004AP36
Supreme Court of Wisconsin
July 7, 2006
2006 WI 87; 716 N.W.2d 807; 293 Wis. 2d 169
Oral argument March 2, 2006.
For the plaintiff-respondent, there was a brief by Michael J. Jassak, Kristin M. Cafferty, Racine, James P. Martin, Lake Geneva, and Habush Habush & Rottier, S.C., and oral argument by Kristin M. Cafferty.
¶ 2. We are presented with two issues. First, may a civil settlement agreement between a crime/tort victim and a criminal defendant/tortfeasor preclude the victim from collecting unpaid restitution that the defendant was ordered to pay in the criminal proceeding, after the defendant‘s probation ends and the unpaid restitution is reduced to a civil judgment pursuant to
¶ 3. Vlazny argues that
¶ 5. Wе conclude that a civil settlement agreement can have no effect upon a restitution order while the defendant remains on probation, unless the circuit court finds that enforcing the restitution order in addition to the settlement agreement would result in a double recovery for the victim. After a defendant is released from probation, however, and any unpaid restitution under the restitution order is converted to a civil judgment, a settlement agreement between the victim and defendant may—depending upon its terms—preclude the victim from enforcing the judgment. We conclude that the global settlement agreement that Huml entered into with Vlazny precludes her from enforcing the judgment converted from the restitution order.
¶ 6. Accordingly, we reverse the judgment of the circuit court.
I. BACKGROUND
¶ 7. On June 20, 1993, Vlazny seriously injured Huml when the automobile he was driving collided
¶ 8. At a January 24, 1994, restitution hearing, Court Commissioner Paul Barrett noted that the parties’ agreed-upon restitution schedule would leave the majority of the ordered restitution unpaid at the end of Vlazny‘s probation.3 Assistant District Attorney Steven Watson informed the commissioner that Huml planned to initiate a civil suit against Vlazny, and that any restitution payments would be set off in the civil suit.
¶ 9. On May 16, 1995, Huml filed a civil action against Vlazny and the insurer of the car he was driving, St. Paul Fire and Marine Insurance Company (St. Paul). Watson, who had left the district attorney‘s office, represented Huml in her civil suit. Huml settled her suit against Vlazny and St. Paul on December 12, 1996. The settlement agreement provided:
The parties agree that in consideration of the full discharge of past, present and future claims arising out
of the allegations set forth in Plaintiff‘s Amended Complaint ..., as a result of the alleged actions or omissions of Defendants, Insurer agrees to pay the sum hereinafter specified. ... This Settlement Agreement and Release shall apply to all claims, whether known or unknown, on the part of all parties to this Agreement. In consideration of the payments called for herein, Plaintiff completely releases and forever discharges Defendants, Insurer, and their agents ... from any or all claims, actions, causes of action, demands, rights, damages, costs, loss of service, expenses and compensation whatsoever, including court costs, legal expenses and attorneys’ fees which the undersigned now has or had or which may hereafter accrue on account of or in any way arising out of any and all known and unknown, foreseen and unforeseen bodily and personal injuries ... resulting from the accident, casualty or event listed in Plaintiff‘s Amended Complaint. (Emphasis added.)
In exchange for releasing Vlazny and St. Paul, Huml reсeived an initial lump sum payment of $548,000, monthly payments for the rest of her life in increasing amounts, and larger periodic payments paid on average every 16 to 18 months.
¶ 10. Meanwhile, Vlazny remained on probation. Because his restitution payments were sporadic, his probation was twice extended by the court. In August 2002, more than eight years after Vlazny was sentenced, his probation agent recommended that Vlazny be released from probation and that the unpaid restitution be reduced to a civil judgment. The circuit court terminated Vlazny‘s probation in December 2002. He had paid $33,705 to Huml, leaving a balance of $107,900.46. Pursuant to
¶ 12. The circuit court denied Vlazny‘s motion to reduce the judgment to zero, concluding that the settlement agreement had no effect upon Huml‘s ability to enforce the judgment. Vlazny appealed and the court of appeals certified the following question: “Whether a written settlement agreement and release discharging a defendant from civil liability for all past, present and future claims arising out оf his or her criminal conduct precludes the crime victim from enforcing a subsequent judgment for unpaid restitution entered after the defendant has been released from probation.” Huml v. Vlazny, No. 2004AP36, unpublished certification (Wis. Ct. App. Sept. 14, 2005).
II. STANDARD OF REVIEW
¶ 13. The issue presented requires us to interpret
III. STATUTORY INTERPRETATION
¶ 14. In statutory interpretation, we begin with the language of the statute. State ex rel. Kalal v. Circuit Court for Dane County, 2004 WI 58, ¶ 45, 271 Wis. 2d 633, 681 N.W.2d 110. If the meaning of the statute is unambiguous after considering the text of the statute, its context, and any policies evident from the text, our analysis ordinarily stops and we give effect to the intent of the legislature as set forth in the plain language of the statute. Id., ¶¶ 46, 48. In the absence of ambiguity, we do not look to extrinsic sources to ascertain legislative intent, except to bolster the plain meaning interpretation. Id., ¶ 51.
¶ 15. A statute is ambiguous when it is susceptible to more than one reasonable interpretation. Id., ¶ 47. “Ambiguity can be found in the words of the statutory provision itself, or by the words of the provision as they interact with and relate to other provisions in the statute and to other statutes.” Sweat, 208 Wis. 2d at 416. We conclude that when they are juxtaposed,
¶ 16. On one hand,
If the court does not extend probation, it shall issue a judgment for the unpaid restitution and direct the clerk of circuit court to file and enter the judgment in the
judgment and lien docket, without fee, unless it finds that the victim has already recovered a judgment against the probationеr for the damages covered by the restitution order. If the court issues a judgment for the unpaid restitution, the court shall send to the person at his last-known address written notification that a civil judgment has been issued for the unpaid restitution. The judgment has the same force and effect as judgments entered under s. 806.10. (Emphasis added.)
The statute appears to provide that upon completion of a defendant‘s probation, the circuit court shall enter a “civil judgment” “for the unpaid restitution,” “unless it finds that the victim has already recovered a judgment against the probationer for the damages covered by the restitution order.” This judgment has the same force and effect as other judgments for money under
¶ 17. On the other hand,
¶ 19.
¶ 20. In furtherance of these dual purposes,
¶ 21. The link between
¶ 23. The procedural posture of this case does not fit snugly within any of these three scenarios. Huml and Vlazny did not enter into the settlement agreement until after the sentencing court imposed the restitution order. We cannot tell—because we do not have the record—whether Vlazny had the opportunity to object to the entry of the civil judgment for the $107,900.46 of unpaid restitution.5 In any event, Vlazny does not seek
¶ 24. Because the timing of events in this case does not fit cleanly into the statutory scheme, and because Huml and Vlazny present competing reasonable interpretations, we look to (1) legislative history; (2) relevant сase law; and (3) public policy to determine which interpretation best accords with legislative intent.
A. Legislative History
¶ 25. The relevant portions of
¶ 26. Three notes are of interest. The first, the Judicial Council Prefatory Note, summarizes the changes to the then-existing law, and states that the Act “allows unpaid restitution to be enforced by the victim as a civil judgment when the offender is released from probation....” 1987 Wis. Act 398 (emphasis added).
The availability of a civil judgment for unpaid restitution enforceable by the victim under s. 973.20(1), stats., substantially reduces the necessity of extending probation solely for the purpose of enforcing court-ordered payments, a practice of questionable cost-effectiveness. [citation omitted] Probation may, however, be extended upon stipulation of the defendant, to enforce community service in satisfaction of restitution, or when the probationer has not made a good faith effort to make restitution or other payments.
Judicial Council Committee Note, 1987, Wis. Stat. § 973.09 (emphasis added).
¶ 28. The third relevant Judicial Council note states that
¶ 29. Governor Tommy Thompson vetoed the language in 1987 Assembly Bill 190 that would have converted a restitution order into a civil judgment.7 Gov. Tommy Thompson, Veto Message to Assembly Bill 190 (available at Legislative Reference Bureau, Madi-
¶ 30. The effect of Governor Thompson‘s veto was to perpetuate the practice of requiring crime victims to whom restitution was owed to institute seрarate civil actions to collect any unpaid restitution once a defendant was released from probation. See Legislative Reference Bureau Drafting File for 1989 Wis. Act 188, Analysis by the Legislative Reference Bureau of 1989 Assembly Bill 316.
¶ 31. In response to the veto, the Judicial Council sponsored 1989 Assembly Bill 316, which contained language nearly identical to that which was vetoed by the Governor. In a memo to the Senate Judiciary and Consumer Affairs Committee, James Fullin, Executive Secretary of the Judicial Council and the Reporter for the Judicial Council Restitution Committee, explained that (1) the proposal to allow a circuit court “to enter a civil judgment for unpaid restitution” was modeled on federal law, the Victim and Witness Protection Act of
¶ 32. In addition to the Judicial Council notes, the analysis of 1989 Assembly Bill 316 by the Legislative Reference Bureau, which is printed on the bill, stated:
Under present law, if a probationer or parolee does not pay the court-ordered restitution in full prior to termination of the probation or parole, or if a defendant not placed on probation or parole fails to pay the court-ordered restitution, the victim may start a civil action to collect any unpaid restitution. The victim may start a civil action, obtain a judgment for the unpaid restitution, and proceed with collection procedures on the judgment. Under this bill, restitution unpaid at the end of a probation or parole period is docketed as a civil judgment if the victim has not already obtained a judgment for the damages covered by the restitution order.
Legislative Reference Bureau Drafting File for 1989 Wis. Act 188, Analysis by the Legislative Reference Bureau of 1989 Assembly Bill 316 (emphasis added).
¶ 34. Simplifying the procedure by which a victim obtains a judgment to enforce unpaid restitution is entirely consistent with the overarching purposes of the legislation: to promote the dignity of crime victims, to maximize the respect afforded victims by the criminal justice system, and to increase the amount of restitution recovered. Allowing a victim to negotiate to extinguish his or her interest in a judgment derived from a restitution order as part of a global settlement is consistent with the legislature‘s desire to afford respect to the dignity of victims.
B. Relevant Case Law
1. Wisconsin Case Law
¶ 35. The parties focus their analyses on three Wisconsin cases: Sweat; State v. Walters, 224 Wis. 2d 897, 591 N.W.2d 874 (Ct. App. 1999); and Olson v. Kaprelian, 202 Wis. 2d 377, 550 N.W.2d 712 (Ct. App.
¶ 36. In Sweat the defendant claimed a civil statute of limitations barred the state from seeking restitution. Sweat, 208 Wis. 2d at 412. The defendant relied upon
¶ 37. The availability of accord and satisfaction and setoff as defenses to the amount of restitution a circuit court can order supports the idea that a victim can give up her right to enforce a judgment derived from a restitution order. Of course, a settlement agreement does not necessarily prevent the circuit court from ordering restitution, Walters, 224 Wis. 2d at 905, nor does it necessarily prevent enforcement of a restitution order during the term of probation. Only if a circuit court first finds that enforcement of the restitution order would result in double recovery for the victim
¶ 38. The court has broad power to require restitution, so long as the restitution serves statutory purposes. Restitution serves the dual purposes of making the victim whole and rehabilitating the defendant. Sweat, 208 Wis. 2d at 423. If a restitution order does not serve both purposes, restitution is not appropriate. Thus, if a settlement agreement fails to make the victim whole—as determined independently by the circuit court—the court may enter a restitution order and enforce it while the defendant remains on probation. See Herr v. Lanaghan, 2006 WI App 29, ¶¶ 19-20, 289 Wis. 2d 440, 710 N.W.2d 496.
¶ 39. In Walters the court of appeals held that a civil settlement does not restrict the power of a court to order a defendant to pay restitution after the defendant and victim settle. Walters, 224 Wis. 2d at 899. Like the present case, Walters arose out of an automobile accident for which the defendant was convicted of operating an automobile while intoxicated. Id. The defendant in Walters argued that a civil settlement, which included a release for “all claims and damages” that resulted from the accident, should prevent a circuit court from being able to enter a restitution order. Id. at 899-900. The court of appeals rejected the defendant‘s contention, explaining that restitution is a remedy that belongs to the State and that “a victim has no independent claim to restitution which he or she can release....” Id. at 904-05. Significantly, in Walters, the defendant made no attempt to prove that enforcement of the restitution order would result in a double recovery for the victim. Id. at 899-900. Moreover, unlike the present case,
¶ 40. In Olson the court of appeals confronted a sequence of events the reverse of that presented in Walters. In Olson the criminal court entered a restitution order before the parties entered into a settlement agreement.10 Olson, 202 Wis. 2d at 380. After a subsequent settlement, the victim attempted to enforce the outstanding restitution order. Id. at 380. The court of appeals acknowledged that a civil settlement and a pre-existing restitution order could affect one another. Id. at 383. The court of appeals explained that under
¶ 41. Finally, in a letter to the court that called our attention to supplemental authority, Huml invokes Herr. In Herr the defendant sought to reopen a civil judgment entered pursuant to a settlement аgreement to offset it by the amount of the restitution order imposed by the criminal court after the parties had settled. Herr, 710 N.W.2d 496, ¶ 6. The court of appeals affirmed the circuit court‘s decision to reopen the civil judgment, but reversed and remanded the circuit
¶ 42. Walters, Olson, and Herr do not address what happens to unpaid restitution upon the completion of probation. Accordingly, we agree with Vlazny that Huml‘s reliance on these cases is misplacеd. We decline Huml‘s invitation to extend the holdings of these cases—that a defendant must prove double recovery before a settlement agreement can affect a restitution order—to proceedings after the defendant is released from probation.
¶ 43. Huml‘s position is further undermined by State v. Davis, 127 Wis. 2d 486, 381 N.W.2d 333 (1986). Thelmer Davis was placed on probation for five years and ordered to pay restitution for committing welfare fraud. Id. at 487-88. Three times the circuit court extended Davis‘s probation because restitution remained unpaid. Id. at 489-491. This court concluded it was inappropriate to extend probation when the only reason to do so was to collect unpaid restitution. Id. at 497-98.
¶ 44. It is true that restitution in a criminal case is a remedy that belongs to the state, not to the victim. Walters, 224 Wis. 2d at 904. Termination of probation, however, signals the state‘s disavowal of any penal or rehabilitative interests. Cf. State v. Jackson, 128 Wis. 2d 356, 365-66, 382 N.W.2d 429 (1986); Huggett, 83 Wis. 2d at 803-04. Thereafter, only the goal of compensating the victim remains. This is an objective adequately accomplished by entry of a civil judgment, which can be enforced through civil enforcement mechanisms. Consequently, it is consistent with Wisconsin precedent to allow a victim, in anticipation of the defendant completing probation, to release her right to enforce any judgment derived from unpaid restitution as part of a settlement agreement.
2. Federal Case Law
¶ 45.
¶ 46.
An order of restitution may be enforced by the United States in the manner provided in sections 1812 and 1813 or in the same manner as a judgment in a civil action, and by the victim named in the order to receive the restitution in the same manner as a judgment in a civil action.
As the Judicial Council note indicates, the phrase, “in the same manner as a judgment in a civil action[]” in
C. Public Policy
¶ 47. Finally, Vlazny‘s interpretation of
¶ 48. Second, permitting a release gives a victim an additional source of leverage to negotiate a favorable settlement.
¶ 49. Third, there are safeguards to promote the recovery of restitution by victims. On the civil side, in most situations where a substantial dollar amount is at stake, a victim will be represented by an attorney when negotiating a settlement. Preserving the right to enforce a judgment derived from a restitution order, therefore, should be as simple as including an express exception in the settlement agreement. On the criminal side, because probation can be extended if a defendant with the ability to pay fails to make good faith efforts to
¶ 50. For all these reasons, we conclude that a civil settlement agreement can have no effect upon a restitution order while the defendant is on probation unless the circuit court first finds that continued enforcement of the restitution order would result in a double recovery for the victim. After a defendant is released from probation and any unpaid restitution becomes a civil judgment, however, a settlement agreement between the victim and the defendant may precludе the victim from enforcing the judgment.
IV. INTERPRETATION OF THE SETTLEMENT AGREEMENT
¶ 51. Having determined that a settlement agreement can preclude the enforcement of a judgment derived from a restitution order, we consider whether the terms of the settlement agreement between Vlazny and Huml have this effect.
¶ 52. The lodestar of contract interpretation is the intent of the parties. Dieter v. Chrysler Corp., 2000 WI 45, ¶ 15, 234 Wis. 2d 670, 610 N.W.2d 832. In ascertaining the intent of the parties, contract terms should be given their plain or ordinary meaning.
¶ 53. Vlazny contends the settlement agreement is clear; it bars Huml from enforcing “any or all claims, actions, causes of action, demands, rights, [or] damages,” without any language to exclude judgments derived from unpaid restitution from the scope of the settlement. It discharges “in full” past, present, and future claims. In using such sweeping words as “any,” “all,” and “whatsoever,” the settlement is “global” in its coverage. Huml does not dispute that the breadth of the language in the settlement agreement encompasses her judgment against Vlazny. Rather, she depends upon the argument that a judgment derived from a restitution order retains its nature as restitution and can never be affected by a settlement agreement, unless the defendant establishes that the victim would receive a double recovery.
¶ 54. We have already rejected Huml‘s argument. Once unpaid restitution imposed by a restitution order is reduced to a civil judgment under
¶ 55. We conclude that the global settlement agreement between Huml and Vlazny precludes Huml from enforcing the judgment for $107,900.46. The settlement agreement is a fully integrated contract intended to be the final expression of Huml and Vlazny‘s agreement. Absent ambiguity, it is improper to consider extrinsic evidence of intent. Dairyland Equip. Leasing, Inc. v. Bohen, 94 Wis. 2d 600, 607, 288 N.W.2d 852 (1980); Wis. End-User Gas Ass‘n v. PSC, 218 Wis. 2d 558, 567, 581 N.W.2d 556 (Ct. App. 1998). Because we conclude the plain language of the settlement agreement released all Huml‘s claims and rights to damages arising from the accident, we will not consider extrinsic evidence of a contrary intent. This settles the issue.
V. CONCLUSION
¶ 56. We conclude that a civil settlement agreement can have no effect upon a restitution order while the defendant remains on probation, unless the circuit court finds that enforcing the restitution order in addition to the settlement agreement would result in a double recovery for the victim. After a defendant is released from probation, however, and any unpaid restitution under the restitution order is converted to a civil judgment, a settlement agreement between the victim and defendant may—depending upon its terms—preclude the victim from enforcing the judgment. We conclude that the global settlement agreement that Huml entered into with Vlazny precludes her from enforcing the judgment converted from the restitution order.
By the Court.—The judgment of the circuit court is reversed.
¶ 57. JON P. WILCOX, J. (concurring). I agree with the majority that after the defendant‘s probation ends unpaid restitution is reduced to a civil judgment pursuant to
¶ 58. I am not at all confident that the parties in this case contemplated, or future parties in a similar position will contemplate, unpaid criminal restitution as falling within the terms of a civil settlement agreement as a matter of course. Given the policies behind restitution, I conclude the better result for future victims entitled to restitution payments is an express release of their right to enforcement of a civil judgment resulting from unpaid criminal restitution.
¶ 59. The majority recognizes that the overarching purposes of 1987 Wisconsin Act 398 and 1989 Wisconsin Act 188 are: “to promote the dignity of crime victims, to maximize the respect afforded victims by the criminal justice system, and to increase the amount of restitution recovered.” Majority op., ¶ 34. I agree; however, a better approach to achieving these three policy objectives is to require an express agreement to ensure that a victim truly intends to release her right to restitution payments after the defendant is released from probation.
¶ 60. Furthermore, restitution “serves the purposes of punishment and rehabilitation of the defendant, while seeking to make the victim of criminal acts whole in regard to the special damages sustained,” State v. Walters, 224 Wis. 2d 897, 904, 591 N.W.2d 874 (Ct. App. 1999). Given these policy implications, I believe
¶ 61. The public has an interest in having defendants pay the full amount of restitution. The public wants victims to be made whole. It is one thing if the victim expressly settles the unpaid amount of restitution. It is another thing to have the defendant get off the hook because of a “global” settlement agreement that lacks any apparent contemplation of such a judgment.
¶ 62. The majority concludes that the “global” settlement agreement Huml signed approximately six years prior to Vlazny‘s termination “is a fully integrated contract intended to be the final expression of Huml and Vlazny‘s agreement.” Majority op., ¶ 55. This settlement includes broad, boilerplate language, but it does not include any reference to judgments or restitution.
¶ 63. As I alluded to above, the actions of the parties seem to indicate that neither party intended for this agreement to include unpaid restitution after probation. Between December 1996, when the settlement agreement was signed and August 2002, Vlazny made 49 restitution payments, and at no time during his probation did Vlazny request any offset of his restitution payments based on the settlement agreement. Furthermore, at the time of Vlazny‘s release from probation, Vlazny‘s probation agent wrote that he had “spoken with the victim in the case and she has no objections to a Civil Judgment for restitution.” If Huml had realized the settlement agreement encompassed an unpaid restitution judgment, she likely would have contested the release of Vlazny from probation.
¶ 64. Despite the apparent confusion surrounding the issue of restitution in this case, I ultimately agree with the majority that the broad language of the settlement agreement releases Vlazny from any requirement of making future restitution payments. However, given the legislative intent behind
¶ 65. I am authorized to state that Justice N. PATRICK CROOKS joins this opinion.