In re Newton

• Decision Date: 15 October 1981
• Docket Number: Adv. No. 81-0892A.,Bankruptcy No. 81-01616A
• Citation: 15 BR 708
• Parties: In re Monroe NEWTON, Debtor. Monroe NEWTON, Plaintiff, v. FRED HALEY POULTRY FARM and Department of Offender Rehabilitation, Defendants.
• Court: U.S. Bankruptcy Court — Northern District of Georgia

15 B.R. 708 (1981)

In re Monroe NEWTON, Debtor Monroe NEWTON, Plaintiff, v. FRED HALEY POULTRY FARM and Department of Offender Rehabilitation, Defendants.

Bankruptcy No. 81-01616A, Adv. No. 81-0892A.

United States Bankruptcy Court, N.D. Georgia, Atlanta Division.

October 15, 1981.

Small & Stamps, P.C., Atlanta, Ga., for plaintiff.

William E. Andrews, Candler, Cox, Andrews & Hansen, Atlanta, Ga., for Fred Haley Poultry Farm.

Brenda Hill Cole, Asst. Atty. Gen., State of Ga., Atlanta, Ga., for Dept. of Offender Rehabilitation.

ORDER

W. HOMER DRAKE, Bankruptcy Judge.

This case is before the Court on the motion of the Department of Offender Rehabilitation for summary judgment, Fred Haley Poultry Farm's motion for summary judgment, and Monroe Newton's cross-motion for summary judgment in the above-styled adversary proceedings.

The facts in the instant case as stipulated to by the parties are as follows:

On or about March 19, 1979, a General Bill of Indictment in Cherokee Superior Court was issued in the case known as The State v. Monroe Newton, accusing Mr. Newton of livestock theft and forgery in the first degree during the period November 10, 1976 through January 17, 1979.

On or about June 25, 1979, Mr. Newton entered a plea of guilty to the above-referenced charges. Thereafter, on July 16, 1979, Mr. Newton was sentenced by the order of the Honorable Richard B. Neville, Judge, Blue Ridge Judicial Circuit, Cherokee County Superior Court, to a term of confinement for a period of ten years, to serve one year with the remaining nine years to be served on probation, conditioned upon the debtor making restitution payments of $25,000.00, with payments to be made through the Canton Probation Office for and on behalf of defendant Fred Haley Poultry Farm. Mr. Newton made a cash payment of $15,000.00 and began making payments of $80.00 per month on or before January, 1980, in order to liquidate the remaining $10,000.00 of the restitution payments. The balance owing by Mr. Newton as of the date of the filing of the debtor's petition was approximately $8,720.00.

On April 15, 1981, Monroe Newton filed his petition under Chapter 13 of the United States Bankruptcy Code. On or about May 18, 1981, Fred Haley Poultry Farm submitted a proof of claim in the amount of $8,720.00. On May 19, 1981, Mr. Newton filed the above-styled adversary proceeding seeking injunctive and declaratory relief regarding the dischargeability of the restitution in his Chapter 13 case.

The issue in the instant case is whether an order of restitution is a debt within the ambit of 11 U.S.C. § 1328 and if it is a debt, whether it is dischargeable under Chapter 13 of the Bankruptcy Code. There is not a genuine issue of material fact in dispute in the case sub judice and, therefore, said case is appropriate for determination by summary judgment.

11 U.S.C. § 1328 reads in relevant part as follows:

"(a) As soon as practicable after completion by the debtor of all payments under the plan, unless the court approves a written waiver of discharge executed by the debtor after the order for relief under this chapter, the court shall grant the debtor a discharge of all debts provided for by the plan or disallowed under section 502 of this title, except any debt —"

The only exceptions to discharge provided in § 1328(a) of the Bankruptcy Code are for long-term debts and for alimony and child support. In re Josephine Osborne, 3 CBC 2d 586, 8 B.R. 200 (Bkrtcy.N.D.Ill.1981). Thus, if an order for restitution created a debt, that debt would be dischargeable under Chapter 13 of the Bankruptcy Code in the same way debts which are not dischargeable under Chapter 7 of the Bankruptcy Code are dischargeable under Chapter 13 of the Code. In the Matter of Velma R. Lambert, 7 BCD 565, 10 B.R. 223 (Bkrtcy.E.D.N.Y.1981).

The order of restitution in the instant case was issued in 1979. In 1980, Georgia Code Chapter 27-30 titled Restitution was enacted. The elements of this title of the Georgia Code may be used to discern the nature of an order of restitution made under Georgia Code § 27-2711 enacted in 1956. This can be done since under Georgia Code § 27-2711 "restitution" was an authorized condition of probation and the enactment of Georgia Code Chapter 27-30 "is merely a more detailed enactment regarding restitution." Cannon v. The State, 246 Ga. 754, 272 S.E.2d 709 (1980).

Georgia Code § 27-3011 states that

"An order for restitution shall not bar any civil action against the offender, but any payments made by an offender to a victim under an order for restitution may be set off against any judgment awarded to the victim in a civil action based on the same facts for which restitution was ordered."

The fact that a victim has a civil cause of action against an offender which is not barred by an order of restitution might tend to indicate that restitution does not create a debtor-creditor relationship. However, a further examination of the law indicates that this is not the case, at least not in Georgia.

11 U.S.C. § 101(11) defines "debt" to mean "liability on a claim." 11 U.S.C. § 101(4) defines "claim" to mean:

"(A) right to payment, whether or not such right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, secured, or unsecured; or"

In the instant case, the victim, who is the subject of an order of restitution, has a cause of action in his own right for enforcement of said order. Georgia Code § 27-3013 provides that "a restitution order shall be enforceable as a civil judgment by execution." This cause of action is for the benefit of the recipient of the restitution. While the Department of Offender Rehabilitation...