Kelly v. Robinson
| Decision Date | 12 November 1986 |
| Docket Number | No. 85-1033,85-1033 |
| Citation | 93 L.Ed.2d 216,479 U.S. 36,107 S.Ct. 353 |
| Parties | John J. KELLY, Connecticut Chief State's Attorney, et al., Petitioners v. Carolyn ROBINSON |
| Court | U.S. Supreme Court |
In 1980, respondent pleaded guilty in a Connecticut state court to a larceny charge based on her wrongful receipt of welfare benefits from the Connecticut Department of Income Maintenance. She was sentenced to a prison term, but the court suspended execution of the sentence and placed her on probation for five years. As a condition of probation, the court ordered respondent to make restitution through monthly payments to the Connecticut Office of Adult Probation until the end of her probation period. Under Connecticut statutes, restitution payments are sent to the Probation Office and are then forwarded to the victim. In 1981, respondent filed a voluntary petition under Chapter 7 of the Bankruptcy Code in Bankruptcy Court, listing the restitution obligation as a debt. The Connecticut agencies, although notified, did not file proofs of claim or objections to discharge, and the Bankruptcy Court subsequently granted respondent a discharge. She made no further restitution payments. After the Probation Office informed her that it considered the restitution obligation nondischargeable, she filed a proceeding against petitioner state officials in the Bankruptcy Court, seeking a declaration that the restitution obligation was discharged. The court concluded that even if the restitution obligation was a debt subject to bankruptcy jurisdiction, it was automatically nondischargeable under § 523(a)(7) of the Bankruptcy Code, which provides that a discharge in bankruptcy does not affect any debt that "is for a fine, penalty, or forfeiture payable to and for the benefit of a governmental unit, and is not compensation for actual pecuniary loss." The District Court adopted the Bankruptcy Court's proposed disposition of the case, but the Court of Appeals reversed.
Held: Section 523(a)(7) preserves from discharge in Chapter 7 any condition a state criminal court imposes as part of a criminal sentence. Thus, restitution obligations, imposed as conditions of probation in state criminal proceedings, are not dischargeable. Pp. 43-53.
(a) Despite the language of the earlier Bankruptcy Act of 1898 that apparently allowed criminal penalties to be discharged, most courts refused to allow a discharge to affect a state criminal court's judgment. When the present Bankruptcy Code was enacted in 1978, there was a widely accepted judicial exception to discharge for criminal sentences, including restitution obligations imposed as part of such sentences. In construing the scope of bankruptcy codifications, this Court has followed the rule that if Congress intends for legislation to change the interpretation of a judicially created concept, it makes that intent specific. Midlantic National Bank v. New Jersey Dept. of Environmental Protection, 474 U.S. 494, 106 S.Ct. 755, 88 L.Ed.2d 859. Pp. 43-47.
(b) The basis for the judicial exception here is the deep conviction that federal bankruptcy courts should not invalidate the results of state criminal proceedings. Although it might be true that Connecticut officials could have ensured continued enforcement of the criminal judgment against respondent by objecting to discharge under the Code, that fact does not justify an interpretation of the Code that is contrary to the long-prevailing view that fines and penalties are not affected by a discharge. Moreover, reliance on a right to appear and object to discharge would create uncertainties and impose undue burdens on state officials. The prospect of federal remission of judgments imposed by state criminal judges would hamper the flexibility of those judges in choosing the combination of imprisonment, fines, and restitution most likely to further the rehabilitative and deterrent goals of state criminal justice systems. Pp. 47-49.
(c) On its face, § 523(a)(7) does not compel the conclusion that a discharge voids restitution orders imposed as conditions of probation by state courts. Nothing in the House and Senate Reports indicates that this language should be read so intrusively. Section 523(a)(7) protects traditional criminal fines. Although restitution, unlike traditional fines, is forwarded to the victim and may be calculated by reference to the amount of harm the offender has caused, neither of the statute's qualifying clauses—namely, the fines must be "to and for the benefit of a governmental unit," and "not compensation for pecuniary loss"—allows the discharge of a criminal judgment that takes the form of restitution. The decision to impose restitution generally does not turn on the victim's injury, but on the penal goals of the State and the defendant's situation. Pp. 50-53.
776 F.2d 30 (CA2 1985) reversed.
Carl J. Schuman, Asst. State Atty., Wallingford, Conn., for petitioners.
Francis X. Dineen, New Haven, Conn., for respondent.
We granted review in this case to decide whether restitution obligations, imposed as conditions of probation in state criminal proceedings, are dischargeable in proceedings under Chapter 7 of the Bankruptcy Code.
In 1980, Carolyn Robinson pleaded guilty to larceny in the second degree. The charge was based on her wrongful receipt of $9,932.95 in welfare benefits from the Connecticut Department of Income Maintenance. On November 14, 1980, the Connecticut Superior Court sentenced Robinson to a prison term of not less than one year nor more than three years. The court suspended execution of the sentence and placed Robinson on probation for five years. As a condition of probation, the judge ordered Robinson to make restitution 1 to the State of Connecticut Office of Adult Probation (Probation Office) at the rate of $100 per month, commencing January 16, 1981, and continuing until the end of her probation.2
On February 5, 1981, Robinson filed a voluntary petition under Chapter 7 of the Bankruptcy Code, 11 U.S.C. § 701 et seq., in the United States Bankruptcy Court for the District of Connecticut. That petition listed the restitution obligation as a debt. On February 20, 1981, the Bankruptcy Court notified both of the Connecticut agencies of Robinson's petition and informed them that April 27, 1981, was the deadline for filing objections to discharge. The agencies did not file proofs of claim or objections to discharge, apparently because they took the position that the bankruptcy would not affect the conditions of Robinson's probation. Thus, the agencies did not participate in the distribution of Robinson's estate. On May 14, 1981, the Bankruptcy Court granted Robinson a discharge. See § 727.
At the time Robinson received her discharge in bankruptcy, she had paid $450 in restitution. On May 20, 1981, her attorney wrote the Probation Office that she believed the discharge had altered the conditions of Robinson's probation, voiding the condition that she pay restitution. Robinson made no further payments.
The Connecticut Probation Office did not respond to this letter until February 1984, when it informed Robinson that it considered the obligation to pay restitution nondischargeable. Robinson responded by filing an adversary proceeding in the Bankruptcy Court, seeking a declaration that the restitution obligation had been discharged, as well as an injunction to prevent the State's officials from forcing Robinson to pay.
After a trial, the Bankruptcy Court entered a memorandum and proposed order, concluding that the 1981 discharge in bankruptcy had not altered the conditions of Robinson's probation. Robinson v. McGuigan, 45 B.R. 423 (1984). The court adopted the analysis it had applied in a similar case decided one month earlier, In re Pellegrino (Pellegrino v. Division of Criminal Justice), 42 B.R. 129 (1984). In Pellegrino, the court began with the Bankruptcy Code's definitional sections. First, § 101(11) defines a "debt" as a "liability on a claim." In turn, § 101(4) defines a "claim" as a "right to payment, whether or not such right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, or unsecured." Finally, § 101(9) defines a "creditor" as an "entity that has a claim against the debtor that arose at the time of or before the order for relief concerning the debtor."
The Pellegrino court then examined the statute under which the Connecticut judge had sentenced the debtor to pay restitution. Restitution appears as one of the conditions of probation enumerated in Conn.Gen.Stat. § 53a-30 (1985). Under that section, restitution payments are sent to the Probation Office. The payments then are forwarded to the victim. Although the Connecticut penal code does not provide for enforcement of the probation conditions by the victim, it does authorize the trial court to issue a warrant for the arrest of a criminal defendant who has violated a condition of probation. § 53a-32.
Because the Connecticut statute does not allow the victim to enforce a right to receive payment, the court concluded that neither the victim nor the Probation Office had a "right to payment," and hence neither was owed a "debt" under the Bankruptcy Code. It argued: "Unlike an obligation which arises out of a contractual, statutory or common law duty, here the obligation is rooted in the traditional responsibility of a state to protect its citizens by enforcing its criminal statutes and to rehabilitate an offender by imposing a criminal sanction intended for that purpose." 42 B.R., at 133. The court acknowledged the tension between its conclusion and the Code's expansive definition of debt,...
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