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Restitution — Defenses — Set-Off

State v. Tony G. Longmire, 2004 WI App 90
For Longmire: Charles B. Vetzner, SPD, Madison Appellate

Issue: Whether the defendant was entitled to set-off as a defense to restitution for theft by (home improvement) contractor, for work that was paid for by the contractor to a subcontractor.

Holding:

¶18. We conclude that the trial court erroneously exercised its discretion by not allowing any offset whatsoever for Longmire’s undisputed expenditure of a portion of the deposit money in compliance with his contractual obligations. We also conclude, however, that the extent of the homeowners’ benefit from Longmire’s expenditure may be considered in determining the amount of offset to be allowed.

¶19. There can be little question that the homeowners in this case could recover as special damages in a civil action that part of the $30,000 they paid to Longmire that he misapplied or converted to his own use. See Topzant v. Koshe, 242 Wis. 585, 588, 9 N.W.2d 136 (1943) (explaining that damages for conversion is the value of items wrongfully taken). Longmire did not convert the entire $30,000, however, because he expended $5,533 of it to commence work pursuant to his contract with the homeowners. We thus conclude that Longmire has met his burden to establish that the $30,000 figure should be reduced or offset for the excavation and concrete work Longmire procured for the homeowners.

¶21. Our conclusion that Longmire is entitled to an offset for amounts he expended for work done does not necessarily mean that he is entitled to an offset of $5,533. That amount may have been excessive or unreasonable for the work actually performed. The homeowners claimed, and the trial court found, that, despite Longmire’s expenditure of $5,533 on excavation and concrete work, the work was poorly done and the homeowners were required to pay some $3,100 to correct it. Although, for reasons set forth in the next section of this opinion, we conclude that Longmire could not be ordered to pay for these additional expenses as a separate item of restitution, we see no barrier to considering the corrective expenses in determining the amount to be offset against the $30,000 deposit for work performed. We therefore conclude that the trial court’s factual finding regarding the homeowner’s additional expenses to correct the deficiencies in the excavation and concrete work, correctly applied, operates to reduce the allowable offset from $5,533 to $2,433, thereby crediting Longmire with the amount he expended on contract work less the amounts the homeowners expended to correct that work.

Separate, related charges of home improvement fraud don’t disqualify the defense, because the underlying conduct [failure to discharge certain duties in a timely way] didn’t cause any pecuniary loss. ¶20.

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