The opinion
IN THE SUPREME COURT OF IOWA
No. 13–0702
Filed January 9, 2015
STATE OF IOWA,
Appellee,
vs.
BEAU JACKSON MORRIS,
Appellant.
Appeal from the Iowa District Court for Polk County,
Christopher L. McDonald, Judge.
Inmate appeals rescission by the district court of prior order
increasing restitution payments deducted from his prison earnings.
REVERSED.
Beau Morris, Clarinda, pro se.
Thomas J. Miller, Attorney General, Kevin R. Cmelik and
William A. Hill, Assistant Attorneys General, and John P. Sarcone,
County Attorney, for appellee.
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CADY, Chief Justice.
In this appeal, a prison inmate challenges a decision of the district
court to rescind its prior order that increased the amount of restitution
deducted from his prison earnings. In deciding this case, we must
interpret Iowa Code section 904.809(5) (2013) governing deductions from
earnings by inmates employed by private industry. On our review, we
reverse the order of the district court.
I. Background Facts and Prior Proceedings.
Beau Morris was convicted of first-degree robbery and second-
degree sexual assault in 2004. He was sentenced by the district court to
two consecutive twenty-five-year terms of incarceration. The district
court also ordered him to pay restitution in an amount in excess of
$16,000. Initially, Morris was required to pay twenty percent of all
credits to his institutional account as restitution. This order was later
modified to fifteen percent of his income.
In 2011, Morris began working for a private employer through the
Iowa Prison Industries program. He was paid a wage in excess of $10
per hour for the work he performed. This employment allowed him to
earn significantly more than he was paid for performing labor for the
prison. Morris signed a work agreement as part of his application for
employment with Iowa Prison Industries. Under the agreement, Morris
agreed that fifteen percent of his gross wages would be deducted for
restitution, “unless otherwise specified.” 1
1The complete work agreement follows:
I hereby agree voluntarily to participate in the Federal Prison Industry
Enhancement Act (PIE) project. Section 904.809 of the Code of Iowa. I
further agree to the deductions listed in items 1, 2, 3, 4, and 5 below
made from gross wages, unless otherwise specified, as well as to all other
financial arrangements made as to earned Federal Prison Industry
3
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Enhancement Act (PIE) wages. I will not initiate, acquiesce, or agree to
any attempt to have my wages garnished or executed upon by any party
prior to the distribution of such wages pursuant to Section 904.809 Iowa
Code (2007). Any deviation from this agreement, or change in
deductions without written notification from the Department of
Corrections is prohibited and will result in suspension or termination,
additionally the offenders will be assessed reasonable Attorneys General
fees for resolving any changes or attempts to modify this agreement.
If I am offered and accept employment by H & H Trailer, I agree to the
following.
1. Deductions will be made from my wages to be distributed as follows:
A. Payroll deductions as required by law, which may include but are
not limited to state and federal income taxes and social security
assessments. You are allowed one (1) deduction unless you can
produce a certified document for additional deductions.
B. An amount legally obligated to pay by court order for the support
of dependents being child support or family support. If a court
order does not exist dependent support will not be taken.
C. Twenty percent (20%) of gross wages deposited to my inmate
account. Of the 20% of gross wages deposited to my inmate
account the following, IF IT APPLIES, will be deducted from my
inmate account; 20% to federal restitution and 10% to savings up
to a maximum of $100. IF IT APPLIES, deductions for state and
federal court filing fees and DOC sanctions will be taken from the
remaining amount deposited to my inmate account.
D. Five percent (5%) of gross wages deducted for the victim
compensation fund.
E. Fifteen percent (15%) of gross wages deducted for state
restitution. If restitution does not exist, no amount will be taken.
F. Any amount left above the deductions will go the General Fund as
provided for in the Code of Iowa.
2. I understand and agree that Workman’s Compensation while so
employed is not a responsibility of H & H Trailers and will apply
according to section 85.59, Code of Iowa.
3. I understand and agree that I am not eligible for unemployment while
employed as an inmate, and that my employer will not report my
wages to the State for unemployment, and according[ly] execute an
Iowa Short Form Power of Attorney.
4. If employed under PIE, I hereby constitute and appoint the Director
of Corrections or his/her designee my true and lawful agent and
attorney in fact with respect to the receipt, disbursement, and
custody of the wages arising from my employment, and accordingly
execute an Iowa Short Form Power of Attorney.
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On July 30, 2012, Morris petitioned the district court to modify the
restitution plan to allow him to pay a greater amount for restitution from
his private-employment earnings. He requested that fifty percent of his
earnings be paid as restitution. The district court granted the request
and ordered the Iowa Department of Corrections (DOC) to increase the
restitution deduction to fifty percent on August 15, 2012.
The DOC did not immediately comply with the order and
eventually filed a motion with the district court requesting that it be
rescinded. The district court, under a different presiding judge, granted
the motion and rescinded the prior order modifying restitution. The
court rejected the State’s argument that federal law limited the total
restitution deduction amounts to twenty percent, but held that the
modified restitution order violated the state statutory scheme for the
distribution of inmate earnings from private-sector employment. The
district court reinstated the prior restitution plan that set the amount of
restitution at fifteen percent of his earnings. The district court declined
to address the additional claim made by the State that the employment
agreement executed by Morris precluded any modification of restitution.
Morris appealed. He raises two issues. First, Morris claims the
district court abused its discretion by rescinding the modified restitution
order. Second, he claims the employment agreement did not preclude a
modification of restitution. The State argues the district court properly
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5. I will only perform the duties assigned to me by the company and will
not operate any equipment that the company has not trained or
certified me to operate. I will also follow all applicable policies,
procedures and safety regulations as described by the company.
I have read and understand the forgoing, and if employed, I agree to
abide by the guidelines set out above. I understand that my employment
is “at will” and that I am not guaranteed my employment will have any
specific duration.
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rescinded the modified restitution order and asserts the issue of whether
the modified restitution order violated the employment agreement was
not properly before the court in this appeal.
II. Standard of Review.
Our review of a restitution order is for abuse of discretion.
“ ‘Abuse of discretion may be shown where . . . the court’s . . . decision is
grounded on reasons that are clearly untenable or unreasonable.’ ”
Office of Citizens’ Aide/Ombudsman v. Edwards, 825 N.W.2d 8, 14 (Iowa
2012) (quoting Citizens’ Aide/Ombudsman v. Grossheim, 498 N.W.2d
405, 407 (Iowa 1993)). “A ground or reason is untenable . . . when it is
based on an erroneous application of the law.” Id. (citation and internal
quotation marks omitted); accord Bottoms v. Stapleton, 706 N.W.2d 411,
415 (Iowa 2005) (“A court abuses its discretion when its ruling is based
on clearly untenable grounds, such as reliance upon an improper legal
standard or error in the application of the law.”). “When 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. Klawonn, 688 N.W.2d 271, 274 (Iowa 2004)
(quoting State v. Bonstetter, 637 N.W.2d 161, 165 (Iowa 2001)).
Statutory construction is reviewed for correction of errors at law. State v.
Dudley, 766 N.W.2d 606, 612 (Iowa 2009).
III. Discussion.
The resolution of this case requires us to consider the private-
employment program for inmates in Iowa prisons. While prison inmates
have historically earned very meager wages for performing labor while in
prison, private employment opportunities for inmates now offer jobs that
pay substantially higher wages. See Iowa Code § 904.809(1)(c); Noah D.
Zatz, Working at the Boundaries of Markets: Prison Labor and the
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Economic Dimension of Employment Relationships, 61 Vand. L. Rev. 857,
870–71 & n.49 (2008) [hereinafter Zatz]. However, inmates are only
permitted to receive a portion of the wages paid. Iowa Code
§ 904.809(5)(b)–(c). Most of the earnings are distributed to other entities
designated by statute pursuant to a declared statutory priority scheme.
Id. § 904.809(5). Under this distribution scheme, the amount distributed
to a recipient with priority over another recipient can reduce the amount
ultimately distributed to the lower-priority recipient. See id. In this
case, the State challenged the authority of the district court to modify a
restitution order that increased the statutory distribution of an inmate’s
earnings for restitution because it resulted in a decrease in the statutory
distribution of the inmate’s earnings to the DOC as reimbursement for
supervision costs of private-employment programs and to the general
fund of the state as reimbursement for the costs of incarceration. We
first review the private-employment program to shed light on the
resolution of this case.
Congress authorized the Prison Industry Enhancement
Certification Program as part of the Justice System Improvement Act of
1979. Pub. L. No. 96-157, § 827, 93 Stat. 1167, 1215 (codified at 18
U.S.C. § 1761(c) (1982)). Generally, this program joined private industry
with prison industry by exempting qualified correctional systems from
the existing legislative restrictions on the interstate transportation and
sale of prison goods and generally allowing the unrestricted sales of
goods produced by inmates. See James J. Misrahi, Note, Factories with
Fences: An Analysis of the Prison Industry Enhancement Certification
Program in Historical Perspective, 33 Am. Crim. L. Rev. 411, 412 (1996).
The program, among other things, established a minimum wage and
authorized deductions of up to eighty percent of the inmate’s wages for
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taxes, room and board, support, and victim compensation funds. Id. at
412–13. The program was originally authorized in only five states, but
has expanded to include over forty participating jurisdictions, including
Iowa. Zatz, 61 Vand. L. Rev. at 869 n.37; see also Prison Industry
Enhancement Certification Program Guideline, 64 Fed. Reg. 17,000,
17,002 (Apr. 7, 1999).
The Iowa legislature established the Iowa State Industries program
in 1977. 2 1977 Iowa Acts ch. 87 (codified at Iowa Code ch. 216 (1979)).
The private prison industry program in Iowa is codified in Iowa Code
section 904.809 (2013). This section establishes the conditions for
private industry employment by inmates of correctional institutions in
Iowa and includes provisions relating to the specific deductions from the
earnings of inmates. 3 Id. Overall, the total earnings of inmates, less the
employee deductions for taxes and other payroll deductions, are
surrendered to the DOC, which then identifies the deductions pursuant
to the statutory scheme contained in section 904.809(5)(b). Id.
§ 904.809(5). Under this scheme, an inmate’s gross payroll earnings are
distributed as follows:
(1) Twenty percent, to be deposited in the inmate’s
general account.
(2) All required tax deductions, to be collected by the
inmate’s employer.
2In 1989, Iowa became part of the Federal Prison Industry Enhancement
Certification Program. See Nat’l Corr. Indus. Ass’n, Prison Industry Enhancement
Certification Program Certification & Cost Accounting Center Listing 11 (2014), available
at http://www.nationalcia.org/wp-content/uploads/Quarter-2-2014-Certification-
Listing.pdf.
3The deductions were originally established in 1997 Iowa Acts ch.190, § 6
(codified at Iowa Code § 904.809(5) (1999)). The order of deductions was modified by
1999 Iowa Acts ch. 182, § 6 (codified at Iowa Code § 904.809(5) (2001)), and the final
alteration adding the department of corrections staff supervision deduction was added
by 2004 Iowa Acts ch. 1175, § 203 (codified at Iowa Code § 904.809(5)(c)(3) (2005)).
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(3) Five percent, to be deducted for the victim
compensation fund created in section 915.94.
Id. § 904.809(5)(b).
After these deductions are made, the remaining balance is
distributed pursuant to a separate priority scheme. Id. § 904.809(5)(c).
First, any dependent support obligation of the inmate is deducted from
the remaining balance. Id. Up to a maximum of fifty percent of the
inmate’s net earnings can be deducted for monthly spousal and child
support obligations, as well as any amount for delinquent child support.
Id. From the remaining funds after this priority is satisfied, an amount
is deducted for any restitution ordered by the court pursuant to an
offender plan of restitution. Id. § 904.809(5)(c)(2). If funds remain after
the restitution order is satisfied, the DOC may retain up to fifty percent
of this balance. Id. § 904.809(5)(c)(3). The purpose of this deduction is
to reimburse the DOC for the staff supervision costs of private-sector
employment of inmates. See id. Finally, any funds that might remain
after this deduction are deposited in the general fund of the state. Id.
§ 904.809(5)(c)(4). The purpose of this deduction is to reimburse the
state for the costs of the inmate’s incarceration.
The statute is clear and unambiguous. Specifically, it means that
restitution pursuant to a plan established by the court takes priority over
any amounts that may be retained by the DOC or deposited in the
general fund of the state. There is no dispute under the statute that
restitution trumps funding for the DOC, just as dependent support
orders trump restitution plans. Additionally, funds are paid out under
the statute after the three required payments identified in section
904.809(5)(b) only to the extent that the greater priority deductions
established by the legislature have been satisfied.
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Thus, we turn to the specific dispute before us in this case. The
district court rescinded its prior order that modified restitution after it
determined the modified terms of restitution were contrary to the
statutory scheme prioritizing the distribution of earnings. It held the
modified restitution order altered the statutory distribution scheme by
making restitution the first deduction.
In deciding whether the order to rescind the modified restitution
was based on an erroneous application of law, it is important to
recognize that the modified restitution order only increased the amount
of restitution from fifteen percent of earnings to fifty percent of earnings.
This modification did not address the issue of priority in any way and
expressed no intent for restitution to be elevated to the first deduction in
violation of the statute. The prior restitution plan, which was reinstated
by the district court when it rescinded the modified order, directed fifteen
percent of wages to be paid, and the modified order only increased the
percentage of payment. A district court is authorized to modify
restitution payments. See id. § 910.7(2). 4 Additionally, the statutory
4Authority to modify an offender’s restitution payment plan is governed by the
Iowa Code. See Iowa Code § 910.4(2)(d) (requiring court approval for modification when
offender is on probation); id. § 910.5(1)(d) (permitting the director of the DOC or
director’s designee to modify the plan of payment to reflect the offender’s present
circumstances when incarcerated); id. § 910.5(2)(a) (permitting the chief of the bureau
of community correctional services to modify payment plans for those on work release);
id. § 910.5(3)(a) (permitting the office or individual in charge of supervising an offender
on work release to modify the plan); id. § 910.5(4)(a) (permitting the district department
of correctional services to prepare and modify a parolee’s payment plan); see also id.
§ 910.2 (regarding restitution or community service ordered by sentencing court).
Notwithstanding the delegations to prepare and modify restitution payment plans,
section 910.7 gives the trial court authority to modify the restitution plan and
restitution payment plan of an inmate, parolee, or probationer when petitioned either by
the offender or by the office or individual preparing the plan. See id. § 910.7(1)–(2).
When preparing or modifying an offender’s restitution payment plan, the
individual or office preparing it is to “tak[e] into consideration the offender’s income,
physical and mental health, age, education, employment and family circumstances,” id.
§ 910.4(2), with modification occurring “[w]hen there is a significant change in the
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scheme for wage deductions for inmates in the prison industry program
does not limit the percent of net earnings that can be deducted for
restitution. See id. § 904.809(5)(c)(2); see also Iowa Admin. Code r.
201—20.11(7) (limiting restitution deductions to fifty percent of credits to
offender’s account).
It is also important to recognize that Morris did not have any
deductions for dependent support. As a result, the only deductions
higher in priority than restitution were the statutorily required twenty
percent to his inmate account, taxes, and the five percent deduction for
the victim restitution fund. Accordingly, the modified restitution order
was not contrary to the distribution scheme for inmate private-sector
employment under the statute. The modified restitution order did not
alter any of the categories of distribution with a greater priority under the
statute, but merely increased the amount distributed for restitution,
which left a lesser amount for the DOC and the state’s general fund. See
Iowa Code § 904.809(5)(c)(3)–(4). However, this result is a consequence
of the judgment of our legislature to compensate victims of crimes and
other recipients of restitution before permitting the DOC to be
reimbursed for its costs of supervising the private-sector employment of
inmates and the state to be reimbursed for the costs of incarceration.
This analysis reveals that the decision by the district court to
rescind the amended restitution order was based on reasoning that
constituted legal error. Contrary to the reasoning of the district court in
the rescission hearing, the amended restitution order was not contrary to
the governing statutory scheme. While the district court had discretion
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offender’s income or circumstances,” id. § 910.4(2)(d); accord id. § 910.5(1)(d)(1),
(2)(a)(1), (3)(a)(1), (4)(a)(1).
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to amend the restitution order and rescind or modify the amended order,
it had no discretion to rescind the amended order based on legal error.
See Bottoms, 706 N.W.2d at 415.
We have discretion to affirm the district court on grounds raised at
trial but not on appeal. See King v. State, 818 N.W.2d 1, 11 (Iowa 2012).
However, we decline to do so in this case by considering whether the
decision of the district court can be affirmed on the ground that the
modified restitution order was contrary to the employment agreement.
The State affirmatively elected not to pursue this issue, and there is no
underlying supporting record. Under the circumstances, we consider the
issue waived on appeal.
Accordingly, the district court order rescinding the modified
restitution order was an abuse of discretion. We reverse the district
court decision to rescind the modified restitution order without prejudice
to the State to seek further modification of Morris’s restitution.
IV. Conclusion.
We reverse the decision of the district court.
REVERSED.