State of Missouri, ex rel., Jeremiah W. Nixon, Attorney General, State of Missouri, Respondent, v. Richard Dale Peterson, Appellant.

This slip opinion is subject to revision and may not reflect the final opinion adopted by the Court. Opinion Missouri Court of Appeals Western District Case Style: State of Missouri, ex rel., Jeremiah W. Nixon, Attorney General, State of Missouri, Respondent, v. Richard Dale Peterson, Appellant. Case Number: WD67494 Handdown Date: 07/24/2007 Appeal From: Circuit Court of Cole County, Hon. Richard G. Callahan Counsel for Appellant: Party Acting Pro Se Counsel for Respondent: Paul Harper Opinion Summary: Richard Peterson appeals from a summary judgment in favor of the state granting its petition for incarceration reimbursement under the Missouri Incarceration Reimbursement Act (MIRA). He argues that only the Supreme Court of Missouri has jurisdiction to review the constitutional validity of MIRA, and MIRA is unconstitutionally vague and uncertain, and lacks sufficient due process. Peterson claims the trial court should have ruled on the constitutional validity of the statute first, before ruling on the merits under MIRA. He contends the trial court erred in implicitly ruling in favor of the constitutionality of MIRA. Peterson assets the trial court committed reversible error in sustaining the state's motion for summary judgment against him because the attorney general failed to satisfy the conditions precedent of section 217.831.3, RSMo, thereby rendering the MIRA petition and the subsequent judgment void. REVERSED. Division One holds: Peterson's constitutional claims are merely colorable, so jurisdiction was proper in this court. The language of the statute is not vague and uncertain. He had an opportunity to respond to the MIRA petition filed by the state, so his due process rights were not violated. In the final point, Peterson correctly challenged the filing of the petition as void, because the attorney general did not meet the conditions precedent for filing a MIRA petition. Peterson did not have sufficient assets in his account to meet the minimum required by MIRA.

Citation: Opinion Author: Thomas H. Newton, Presiding Judge Opinion Vote: REVERSED. Smart and Holliger, JJ., concur. Opinion: Mr. Richard Peterson appeals from a summary judgment in favor of the State granting its petition for incarceration reimbursement. In 1995, Mr. Peterson was convicted of first-degree robbery under section 569.020(FN1) and sentenced to twenty-five years in prison. He is an inmate in a state correctional center. In 2006, the Attorney General filed a petition for incarceration reimbursement under the Missouri Incarceration Reimbursement Act (MIRA) against Mr. Peterson. The State alleged that it spends approximately $14,000 a year for each inmate and the estimated expense for Mr. Peterson totaled $127,567.94 or more. The State also alleged that it had good cause to believe that it will recover not less than either ten percent of the estimated cost of care of Mr. Peterson or ten percent of the costs of care for the Defendant for two years, whichever amount was less. The Circuit Court of Cole County issued a show cause order and ex parte order appointing a receiver. The State filed a motion for summary judgment, and Mr. Peterson filed a response to both the show cause order and the motion for summary judgment. The trial court entered summary judgment in favor of the State, ordering that the funds in Mr. Peterson's inmate account and future deposits into that account, excluding wages and salary earned while incarcerated, be used to pay for his cost of care while incarcerated. Mr. Peterson raises four points on appeal. First, he argues that only the Supreme Court of Missouri has the jurisdiction to review the constitutional validity of MIRA, and MIRA is unconstitutionally vague and uncertain, and lacks sufficient due process. Second, he argues that the trial court should have ruled on the constitutional validity of the statute first, before ruling on the merits under MIRA. Third, he argues that the trial court erred in implicitly ruling in favor of the constitutionality of MIRA. Fourth, he argues that the trial court committed reversible error in granting summary judgment in favor of the State and against him because the Attorney General failed to satisfy the conditions precedent of section 217.831.3, thereby rendering the MIRA petition and the subsequent judgment void.

In his first three points, Mr. Peterson challenges the constitutionality of MIRA and this court's jurisdiction. Under article V, section 3 of the Missouri Constitution, the Supreme Court has exclusive appellate jurisdiction for constitutional challenges to statutes. The standard of review for constitutional challenges to a statute is de novo. Hodges v. City of St. Louis, 217 S.W.3d 278, 279 (Mo. banc 2007). "We review the constitutional challenge to see if it is substantial, in which case jurisdiction would vest in the Missouri Supreme Court. If the challenge is merely colorable, we retain jurisdiction." Tadrus v. Mo Bd. of Pharmacy, 849 S.W.2d 222, 225 (Mo. App. W.D. 1993) (citation omitted). "In determining whether a constitutional claim is real and substantial, we make a preliminary inquiry as to whether it presents a contested matter of right that involves fair doubt and reasonable room for disagreement." McCormack v. Capital Elec. Constr. Co., 159 S.W.3d 387, 404 (Mo. App. W.D. 2004). "If the initial inquiry discloses [that] the claim is so legally or factually insubstantial as to be plainly without merit, the claim may be deemed merely colorable." Id. We must decide whether Mr. Peterson's constitutional claims are substantial or sufficient to determine if jurisdiction is proper in this court. Mr. Peterson claims that because the term "assets" as used in MIRA is unconstitutionally vague and uncertain, and violates his constitutional due process rights, that this court lacks appellate jurisdiction. Mr. Peterson argues that he reasonably believed that the funds in his inmate account totaling $1,770.65, which consisted of his state payroll and profits from his woodcraft projects, were not assets for the purposes of the MIRA. The standard for determining whether a statute is unconstitutionally vague is whether the terms are understandable by persons of ordinary intelligence. AG Processing, Inc. v. S. St. Joseph Indus. Sewer Dist., 937 S.W.2d 319, 322 (Mo. App. W.D. 1996). When determining whether terms are unconstitutionally vague, "[n]either absolute certainty nor impossible standards of specificity are required." State v. Duggar, 806 S.W.2d 407, 408 (Mo. banc 1991). And, the vagueness challenge is applicable only to the facts at hand. Cocktail Fortune, Inc. v. Supervisor of Liquor Control, 994 S.W.2d 955, 958-59 (Mo. banc 1999). "'If the terms or words used in the statute are of common usage and are understandable by persons of ordinary intelligence, they satisfy the constitutional requirements as to definiteness and certainty.'" State v. Mahurin, 799 S.W.2d 840, 842 (Mo. banc 1990) (quoting State v. Brown, 660 S.W.2d 694, 697 (Mo. banc 1983)), cert. denied, 502 U.S. 805 (1990).

"Asset" is defined under MIRA as: property, tangible or intangible, real or personal, belonging to or due an offender or a former offender, including income or payments to such offender from Social Security, workers' compensation, veterans' compensation, pension benefits, previously earned salary or wages, bonuses, annuities, retirement benefits, or from any other source whatsoever, including any of the following: . . . c. A current stream of income from any source whatsoever, including a salary, wages, disability, retirement, pension, insurance or annuity benefits or similar payments[.] Section 217.827(1)(a). Up to $2,500.00 of savings from wages and salary earned while the offender is in the state correctional center are excluded from assets. Section 217.827(1)(b). The definition of "asset" in MIRA is explained with words of common usage, and the exclusions from assets are also clear to people with ordinary intelligence. Therefore, the term "assets" in MIRA is not void for unconstitutional vagueness, and Mr. Peterson's claim that it is unconstitutional is merely colorable. MIRA does not require, nor did the trial court afford Mr. Peterson, a pre- or post-deprivation hearing upon the freezing of his assets where Mr. Peterson could raise a challenge that the Attorney General did not have the required good cause to file a MIRA petition against Mr. Peterson. In this case, there is no dispute that Mr. Peterson was deprived of assets. The question is whether the proper procedures were followed to satisfy the requirements of due process. Mr. Peterson argues that his due process rights were violated because he did not have pre- or post- deprivation hearing to challenge the Attorney General's good cause to file the petition. A two-step analysis is required to examine whether the statute violates constitutionally protected due process rights. Laubinger v. Laubinger, 5 S.W.3d 166, 174 (Mo. App. W.D. 1999). In the first step, we determine whether he was deprived of a constitutionally protected interest. Id. In the second step we determine whether the procedures followed were sufficient to satisfy constitutional due process requirements. Id. The essential requirements of due process "are notice and an opportunity to respond. The opportunity to present reasons, either in person or in writing, why proposed action should not be taken is a fundamental due process requirement." Cleveland Bd. of Educ. v. Loudermill, 470 U.S. 532, 546 (1985). Mr. Peterson was offered the opportunity to provide written reasons as to why the Attorney General did not have good cause to file a MIRA petition when the trial court issued the show cause order. Mr. Peterson did, in fact, respond

in writing several times. Therefore, his due process rights were not violated. Based on the analysis above, Mr. Peterson's constitutional claims are merely colorable, and this court has jurisdiction. In his final point, Mr. Peterson argues that under section 217.831 the condition precedent of a MIRA petition was not satisfied. He claims the MIRA petition filed by the State was invalid because the Attorney General lacked good cause to file the MIRA petition. Mr. Peterson considers "good cause" to be a necessary element of the Attorney General's petition, and he argues that the Attorney General's determination that good cause existed to file a MIRA petition was not supported by competent and substantial evidence on the record. Pursuant to section 217.831.1, in order to file a MIRA petition the Attorney General has to reasonably believe that Mr. Peterson had assets totaling at least $2,800 (ten percent of the estimated cost of care for two years). However, the evidence put forth showed that Mr. Peterson only had $1,770.65 in "assets," falling $1,029.35 short of the lesser amount. Mr. Peterson also claims that the State never pleaded that Mr. Peterson had a stream of income sufficient to pay such amounts within a five- year period. Pursuant to section 217.831.3, [i]f the Attorney General upon completing the investigation . . . has good cause to believe that an offender . . . has sufficient assets to recover not less than ten percent of the estimated cost of care of the offender or ten percent of the estimated cost of care of the offender for two years, whichever is less, or has a stream of income sufficient to pay such amounts within a five-year period, the attorney general may seek to secure reimbursement for the expense of the state of Missouri for the cost of care of such offender[.] From the record of Mr. Peterson's inmate account, the balance of the account was $1770.65, so his assets at the time of filing were insufficient to satisfy the 10% threshold under MIRA. However, the Attorney General could still have "good cause" to file a MIRA petition if there is a stream of income which could satisfy the 10% threshold in five years. But, the Attorney General never claimed that Mr. Peterson has a stream of income, so the petition was insufficient to inform Mr. Peterson that the condition precedent for MIRA was satisfied by a stream of income. The petition presented to Mr. Peterson, which his show cause order was to address, stated that Mr. Peterson "has the following known assets: Defendant receives regular deposits in his inmate account." This statement of fact was not clear enough to provide Mr. Peterson with an adequate basis to show cause, in that it did not provide him with sufficient information to counter the Attorney General's good cause determination based on a stream of income. See

Rule 55.05. Nevertheless, we will analyze whether Mr. Peterson had a stream of income based on the facts in this case. In determining the issue presented, we must interpret section 217.827(1)(a)c to determine what constitutes a stream of income. Statutory interpretation is purely a question of law, which we determine de novo. State ex rel. Nixon v. Koonce, 173 S.W.3d 277, 282 (Mo. App. W.D. 2005). Mr. Peterson has money in his inmate account and receives deposits into that account such that he received $1767.50 in deposits from October 1, 2005, through April 14, 2006. The trial court determined that these deposits were from sources other than wages and salary. The record shows that the sources were from different individuals and according to the affidavits of Delbert O. Peterson, Jerretta L. Peterson, Donald R. Peterson, Judith L. Flesher, and Lynette R. Christian, the deposits were gifts from them and from the sale of Mr. Peterson's woodcrafts; they all alleged that they would no longer send anything of value to Mr. Peterson and that they had no intention of sending any more money or funds to Mr. Peterson's inmate account. These affidavits constitute the only evidence about the characterization of these deposits in Mr. Peterson's inmate account. The trial court characterized these deposits as "regular deposits." Thus, we need to determine whether the "regular deposits" in this case fall within the category of "stream of income." "A stream of income," for purposes of section 217.831.3, is defined in section 217.827(1)(a)c as coming "from any source whatsoever, including a salary, wages, disability, retirement, pension, insurance or annuity benefits or similar payments." Though "a stream of income" could come from any source whatsoever, the purpose of this statute is to explain how any income becomes a stream of income. The incomes numerated in the statute are regular and steady, which means there is a forseeability that the receiver of this income could receive regular deposits from this source for an ongoing period. In this case, though the deposits from Mr. Peterson's friends and family members are regular from October 1, 2005, through April 14, 2006, this does not necessarily mean that these deposits will continue in the future, since gifts are always subject to the donor's discretion. According to the affidavits, all the senders have intentionally ceased sending anything of value to Mr. Peterson since May 12, 2006, and none of them have any intention of sending any more money or funds to Mr. Peterson's inmate account. Furthermore, if the deposits were from the sale of his woodcrafts, no further deposits would be made upon the cessation of those sales. Practically, these deposits could not ever constitute "a stream of income" which could satisfy the 10% threshold within five years. Although the

Attorney General thought he had good cause to believe that there was a stream of income which would satisfy the 10% threshold at the time when he filed the petition, the affidavits showed that there would be no stream of income which could satisfy the 10% threshold in five years, because the affiants stated that the deposits would cease. The "good cause" requirement of section 217.831.3 is a condition precedent to the filing of the petition. State ex rel. Nixon v. Watson, 204 S.W.3d 716, 721 (Mo. App. W.D. 2006). In Watson, the Appellant didn't succeed in his good cause claim because he did not attack the validity of the State's MIRA petition, seeking to void it, but simply claimed that the trial court erred in granting the State's motion for summary judgment. Id. A good cause challenge may void the State's MIRA petition. See id. In our case, Mr. Peterson challenged the validity of the State's MIRA petition, and the above analysis shows that the Attorney General did not have good cause to file the petition. We reverse the trial court's decision granting the State's summary judgment and remand for the trial court to issue an order consistent with the foregoing, and to release Mr. Peterson's inmate account from the receiver. Footnotes: FN1. All statutory references are to RSMo (2000) and the Cumulative Supplement (2006). Separate Opinion: None This slip opinion is subject to revision and may not reflect the final opinion adopted by the Court.