In re Farnsworth

• Decision Date: 16 September 2002
• Docket Number: Bankruptcy No. 02-22831-K.,Adversary No. 02-0455.
• Citation: 283 B.R. 503
• Parties: In re Paul Michael Biff FARNSWORTH a/k/a Ronnie Bradfield, Debtor. Tennessee Department of Corrections, Plaintiff, v. Paul Michael Biff Farnsworth, a/k/a Ronnie Bradfield, Defendant.
• Court: U.S. Bankruptcy Court — Western District of Tennessee

Page 503

283 B.R. 503

In re Paul Michael Biff FARNSWORTH a/k/a Ronnie Bradfield, Debtor Tennessee Department of Corrections, Plaintiff, v. Paul Michael Biff Farnsworth, a/k/a Ronnie Bradfield, Defendant.

Bankruptcy No. 02-22831-K.

Adversary No. 02-0455.

United States Bankruptcy Court, W.D. Tennessee, Western Division.

September 16, 2002.

COPYRIGHT MATERIAL OMITTED

Paul M. Biff Farnsworth, Memphis, TN, pro se.

George W. Stevenson, Memphis, TN, Chapter 7 Trustee.

MEMORANDUM AND ORDER RE PLAINTIFF'S MOTION FOR JUDGMENT ON THE PLEADINGS COMBINED WITH NOTICE OF THE ENTRY THEREOF

DAVID S. KENNEDY, Chief Judge.

Plaintiff, Tennessee Department of Corrections, by and through the Tennessee Attorney General ("TDOC"), has filed a motion for a judgment on the pleadings, pursuant to Fed.R.Bankr.P. 7012(b),¹ arising out of the above-captioned adversary proceeding previously filed by TDOC against the defendant, the above-named chapter 7 debtor, Paul Michael Biff Farnsworth a/k/a Ronnie Bradfield ("Debtor"). TDOC ultimately seeks a judicial determination that the particular debts owed to it in the aggregate amount of $4,913.17 arising our of the debtor's prepetition criminal and related actions (e.g., various court costs, fees, expenses, and a criminal fine for destroying state property) are non-dischargeable under 11 U.S.C. § 523(a)(7) and § 523(a)(17).

By virtue of 28 U.S.C. § 157(b)(2)(I), this is a core proceeding. The court has subject matter jurisdiction under 28 U.S.C. §§ 1334(b) and 157(a)-(b). Based on the pleadings and consideration of the case record as a whole, the following shall constitute the court's findings of fact and conclusions of law in accordance with Fed.R.Bankr.P. 7052.

I. Background Facts

The relevant background facts may be briefly summarized as follows. On February 4, 2002, the debtor, an inmate in the Tennessee state prison system, filed an original petition under chapter 7 of the Bankruptcy Code ("Code"). Debtor has been in prison during the entire administration of this bankruptcy case and remains incarcerated at the West Tennessee State Penitentiary located at Henning, Tennessee. As a result of the debtor's incarceration, he was excused without opposition from attending the statutory meeting of creditors under 11 U.S.C. § 341. In an effort to accommodate the debtor and allow the chapter 7 case to proceed notwithstanding his incarceration this court, after notice and a hearing and without opposition, allowed the debtor's sister to appear and give the testimony for the debtor at the duly scheduled section 341 meeting of creditors.

On May 7, 2002, the meeting of creditors was held; and the appointed chapter 7 trustee later filed a no-asset report. Upon the debtor's payment of the $200.00 filing fee prescribed by 28 U.S.C. § 1930(a)(1) and the Judicial Conference Miscellaneous Bankruptcy Court Fee Schedule accompanying 28 U.S.C. § 1930(b), the debtor received his routine discharge on June 13, 2002, however, the dischargeability of the debts owed to TDOC were expressly reserved awaiting the outcome of this adversary proceeding filed by TDOC.²

It is noted in this case that the only creditors listed in the debtor's schedules appear in his Schedule F. All of the debts listed in Schedule F by the debtor apparently represent debts owed solely to various governmental units arising out of the criminal and related actions dating back to 1996 involving multiple state and federal courts, the Appellate Cost Center of the State of Tennessee, and the Tennessee Department of Corrections. The aggregate amount of the scheduled debts listed by the debtor in his Schedule F is approximately $17,363.76. Debtor listed no other creditors or debts in his Schedule D, E, G, or H. As noted, the debtor did not schedule typical or traditional consumer type debts. Accordingly, the debtor seemingly filed this chapter 7 case seeking to discharge substantial amounts of debts arising out of the prior court costs, fees, expenses, and fines incurred by him arising out of the criminal and related actions. TDOC, an agency or instrumentality of the State of Tennessee,³ seeks to have the specific fine, fees, costs, and expenses owed to it by the debtor excepted from his chapter 7 discharge under section 523(a)(7) and (17) of the Code.

While the debtor lists $17,363.76 in the aggregate of court costs, fees, fines, and expenses in his Schedule F, TDOC only seeks to except from discharge certain particular debts owed to it in the aggregate amount of $4,913.76 consisting of one criminal fine and multiple court costs, fees, and attendant expenses. More specifically, TDOC seeks a judicial determination that the particular debts owed to it by the debtor are nondischargeable under, for example, section 523(a)(7) for $43.50 arising out of the aforesaid criminal fine incurred by the debtor for destroying state property. According to the TDOC's original complaint herein and instant motion seeking a judgment on the pleadings, the debtor pled guilty to this offense and has now paid this fine. Since the debtor also has revealed to the court that the fine has been paid evidenced by trust fund deduction noted in a document entitled, Disciplinary Decision Sentence Detail, the court considers this particular debt (i.e., this fine) extinguished and the dischargeability issue is thereby rendered moot.

TDOC also asserts that the debtor has incurred multiple nondischargeable debts under section 523(a)(17) including, for example, $406.89 in filing fees under the Prison Litigation Reform Act arising from prior complaints filed in the federal district courts; court costs totaling $4,113.73 arising from writs of execution in certain state court cases; and various expenses incurred as a result of the filing of the complaints and appeals in multiple state courts including $228.19 in postage expenses; $76.86 for copies; and $44.00 in notary services.

II. The Ultimate Issue, Burden of Proof, and Standard of Proof

The narrow and ultimate question presented for judicial determination here is whether these particular fines, fees, costs, and expenses incurred by the debtor and owed to TDOC are nondischargeable under to 11 U.S.C. § 523(a)(7) and (17).

The burden of proof in this adversary proceeding and instant motion seeking a judgment on the pleadings is on the plaintiff-creditor, TDOC, by a preponderance of the evidence. Grogan v. Garner, 498 U.S. 279, 291, 111 S.Ct. 654, 661, 112 L.Ed.2d 755 (1991). Exceptions to discharge are strictly construed against the objecting creditor and liberally in favor of the debtor. Gleason v. Thaw, 236 U.S. 558, 35 S.Ct. 287, 59 L.Ed. 717 (1915).

For the reasons mentioned below, this court finds and concludes, considering a totality of the particular facts and circumstances and applicable law, that the subject criminal court fine, fees, costs, and expenses incurred by the debtor in the amount of $4,869.67 arising out of the criminal actions are not subject to discharge under the laws of the Congress relating to bankruptcy. It is noted that the amount of the nondischargeable judgment here reflects a credit for the $43.50 fine that the debtor asserts he has paid arising out of his guilty plea previously entered for destroying state property. Therefore, the total nondischargeable judgment is $43.50 less than the requested amount of $4,913.17 set forth in the TDOC's complaint, discussed and clarified more fully, infra.

It generally is noted that the legal effect of a bankruptcy discharge is grounded upon the public policy of freeing the honest, but unfortunate, debtor from the financial burdens of prepetition debts. See, e.g., Williams v. United States Fidelity & Guar. Co., 236 U.S. 549, 554-55, 35 S.Ct. 289, 59 L.Ed. 713 (1915) Local Loan Co. v. Hunt, 292 U.S. 234, 244, 54 S.Ct. 695, 78 L.Ed. 1230 (1934). It is in the public and private interest to allow the honest, but unfortunate, debtor to begin a new opportunity in life with a clear field for the future free from the obligations and responsibilities consequent upon financial misfortunes. Hunt at 244, 292 U.S. 234, 54 S.Ct. 695, 78 L.Ed. 1230. See also S.Rep. No. 95-989, at 7 (1978), reprinted in 1978 U.S.C.C.A.N. 5787, 5793 (indicating that the very heart of the fresh start provisions lies in the section 727 discharge).

A bankruptcy discharge serves, in essence, to release an individual debtor's in personam dischargeable obligations and to permanently enjoin creditors from collecting discharged debts from the debtor. See 11 U.S.C. § 524(a). A discharge in bankruptcy, however, is not absolute. See 11 U.S.C. §§ 727(a) and 523(a). It is fundamental that a bankruptcy discharge is a privilege and not a constitutional right. See, among others, In re Krohn, 886 F.2d 123 (6th Cir.1989). Bankruptcy courts are charged with the duty to make sure the bankruptcy laws, including the debtor's discharge, are used and applied fairly and appropriately free from manipulation.

It is noted that the Congress has statutorily excepted 18 particular categories of specific debts from a chapter 7 debtor's general discharge. The debtor's general discharge serves countervailing policy considerations while preserving the integrity of the discharge and the honest, but unfortunate, debtor's fresh start. See, for example, George H. Singer Section 523 of the Bankruptcy Code: The Fundamentals of Nondischargeability in Consumer Bankruptcy, 71 AM.BANKR.L.J. 325, 326 (1997). Simply put, the nondischargeability of certain particular debts, as a policy consideration of the Congress, rises to a higher plane than the granting of a debtor's complete discharge and resulting fresh financial start. That is, a debtor may receive a general discharge, but one or more particular debts may be excepted from that general discharge. See 11 U.S.C. §§ 727(b) and 523(a).

For example, the Congress legislated via 11 U.S.C. § 523(a) that the following particular debts, among others, are not subject to a bankruptcy...