In re Pellegrino

• Decision Date: 26 July 1984
• Docket Number: Bankruptcy No. 5-83-00361,Adv. No. 5-83-0554.
• Citation: 42 BR 129
• Court: U.S. Bankruptcy Court — District of Connecticut
• Parties: In re Louis Pasquale PELLEGRINO and Florence Ann Pellegrino, Debtors. Louis Pasquale PELLEGRINO and Florence Ann Pellegrino, Plaintiffs, v. DIVISION OF CRIMINAL JUSTICE, Chief State's Attorney for the J.D. of New Haven, Judicial Department; Director, Office of Adult Probation; Commissioner, Department of Income Maintenance; Commissioner of Administrative Services, Bureau of Collection Services, Defendants.

42 B.R. 129 (1984)

In re Louis Pasquale PELLEGRINO and Florence Ann Pellegrino, Debtors Louis Pasquale PELLEGRINO and Florence Ann Pellegrino, Plaintiffs, v. DIVISION OF CRIMINAL JUSTICE, Chief State's Attorney for the J.D. of New Haven, Judicial Department; Director, Office of Adult Probation; Commissioner, Department of Income Maintenance; Commissioner of Administrative Services, Bureau of Collection Services, Defendants.

Bankruptcy No. 5-83-00361, Adv. No. 5-83-0554.

United States Bankruptcy Court, D. Connecticut.

July 26, 1984.

COPYRIGHT MATERIAL OMITTED

Francis X. Dineen, Joanne S. Faulkner, New Haven Legal Assistance Ass'n, Inc., New Haven, Conn., for plaintiffs.

Edward F. Reynolds, Asst. Atty. Gen., State of Conn., Hartford, Conn., for defendants Com'r, Dept. of Income Maintenance and Com'r of Administrative Services, Bureau of Collection Services.

Carl Schuman, Asst. State's Atty., Wallingford, Conn., for defendants Div. of Criminal Justice and Director, Office of Adult Probation.

MEMORANDUM AND PROPOSED ORDER

ALAN H.W. SHIFF, Bankruptcy Judge.

The plaintiffs, debtors, brought this action to determine, inter alia, the dischargeability of an order of restitution entered by the Superior Court of the State of Connecticut for the Judicial District of New Haven as a condition of probation in connection with a larceny conviction of the debtor Florence Pellegrino.

I. BACKGROUND

On June 30, 1982, Florence Pellegrino was arrested for larceny in the second degree for fraudulently obtaining food stamps in the amount of $15,960.00 in violation of Connecticut General Statutes §§ 17-83i and 53a-123. Pellegrino pleaded guilty to the charges, and on October 29, 1982, she was sentenced to a two year prison term.¹ Execution of the prison term was suspended, and Pellegrino was placed on probation for five years on the condition that she make restitution in the amount of $15,960.00 to the State of Connecticut. At the sentencing, Pellegrino and her husband, Louis, pleaded for probation as an alternative to incarceration and suggested that restitution be paid out of Louis Pellegrino's wages. A wage execution was thereafter ordered in the amount of $40.00 per week. Because the parties have treated the wage execution as a part of the so-called restitution debt, this court will adopt that view.

On April 14, 1983, the plaintiffs filed a voluntary joint petition in this court under Chapter 7 of the Bankruptcy Code. Each of the plaintiffs listed the defendants State of Connecticut Department of Income Maintenance, Bureau of Collection Services and Office of Adult Probation as unsecured creditors on their Schedule A-3.² The plaintiffs obtained a discharge by the August 26, 1983 order of this court.

On February 7, 1984, the plaintiffs filed an amended complaint, seeking, in the First Count, a determination that the restitution order of the state court is a dischargeable debt which had been discharged by the order of this court. The Second Count alleges that the defendants violated the automatic stay provided by Code § 362(a) when they "continued to enforce the wage execution and collect amounts from Mr. Pellegrino's pay pursuant to the restitution order."³ The plaintiffs further allege that the continued acceptance of money from Louis Pellegrino's wages "and any effort defendants may make to enforce the restitution order is in violation of this Court's order discharging the debtors and of 11 U.S.C. §§ 524 and 525."⁴ The plaintiffs allege in the Third Count of their Amended Complaint that the actions of the defendants "have deprived and are depriving the plaintiffs of their civil rights, privileges, or immunities under color of state law" in violation of the Civil Rights Act, 42 U.S.C. § 1983.⁵

The plaintiffs seek the following relief from this court:⁶

1. an order declaring that the larceny debt⁷, for which Pellegrino was convicted, and the "restitution debt", ordered by the state court, are dischargeable and have been discharged;

2. an order enjoining the defendants from taking any steps to obtain payment of the restitution or otherwise enforcing the criminal judgment;

3. an order enjoining the defendants from continuing the wage execution on Louis Pellegrino's wages;

4. an order assessing attorney's fees and costs against the defendants pursuant to this court's equitable powers and 42 U.S.C. § 1988, payable to New Haven Legal Assistance Association;

5. appropriate orders for contempt and violation of the plaintiff's civil rights; and

6. such other and further relief as this court deems just and fair.

II. DISCUSSION

A. IS RESTITUTION A DEBT?

Bankruptcy Code § 101(11) provides that the word "debt" means "liability on a claim." "Claim" is defined in § 101(4) 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." A "creditor," under § 101(9) is an "entity that has a claim against the debtor that arose at the time of or before the order for relief concerning the debtor."

Under Connecticut's penal code, restitution is one of nine conditions of probation enumerated in Conn. Gen. Stat. § 53a-30. Criminal defendants ordered to make restitution by the court send their payments to the Connecticut Office of Adult Probation which is responsible for monitoring compliance with the court's order of restitution. Conn.Gen.Stat. § 53a-30(b). The crime victim receives payments from the Office of Adult Probation. Under the penal code, a victim cannot enforce a court's order of restitution if the criminal defendant fails to make payments to the Office of Adult Probation. The state court may, however, issue a warrant for the arrest of the criminal defendant for violation of a condition of probation. Conn.Gen.Stat. § 53a-32. Since a crime victim has no "right to payment," restitution is not a "debt" under Bankruptcy Code § 101(11). Accord, In re Johnson, 32 B.R. 614 (Bankr. D.Col.1983) (applying Colorado law); In re Magnifico, 21 B.R. 800, 9 B.C.D. 670 (Bankr.D.Ariz.1982) (applying Arizona law); In re Button, 8 B.R. 692, 7 B.C.D. 307 (Bankr.W.D.N.Y.1981) (applying New York law). Compare In re Newton, 15 B.R. 708, 8 B.C.D. 522 (Bankr.N.D.Ga.1981) aff'd, No. C81-2170A (N.D.Ga. May 24, 1982). (where the bankruptcy court held that an order of restitution is a debt in Georgia where state law provides that "a restitution order shall be enforceable as a civil judgment by execution.")

Furthermore, the relationship in this proceeding between the criminal defendant and her victim lacks other typical attributes of a debtor-creditor relationship. 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.

As noted, Pellegrino was prosecuted, convicted and sentenced to two years in prison. Acting under the authority of Conn.Gen.Stat. § 53a-28, the state court suspended Pellegrino's prison term and placed her on probation. Using its wide discretion in setting conditions of probation, State v. Pilch, 35 Conn.Supp. 536, 539, 394 A.2d 1364 (1977), the court ordered Pellegrino to make restitution to the State of Connecticut. In ordering restitution under Conn.Gen.Stat. § 53a-30(a)(4), the court fixed the amount she had to pay and the manner of payment. Clearly the plaintiff's payments to the Office of Adult Probation are not a debtor's payments to a creditor. The obligation here arose from a court ordered sanction following a criminal conviction. The fact that the victim is an incidental beneficiary of that process does not alter the basic relationship between Pellegrino and the State.

Other courts have similarly held that a debtor's obligation to make restitution as a condition of probation is not a debt within the meaning of the Bankruptcy Code. See In re Johnson, supra; In re Magnifico, supra; In re Button, supra.⁸ But see In re Brown, 11 B.C.D. 1048, 39 B.R. 820 (Bankr. M.D. Tenn.1984), appeal docketed, No. 384-0585 (M.D. Tenn. May 22, 1984).

In Button, the debtor pleaded guilty to petty larceny, was placed on probation, and ordered to make restitution to the victim. As in this case, the debtor filed a Chapter 7 petition and listed his victim as a creditor. When the debtor stopped making restitution payments, he was charged with violation of probation which prompted him to seek a bankruptcy court order enjoining enforcement of the state court order of restitution.

The Button Court held that restitution ordered as a condition of probation, pursuant to § 65.10(2) of the Penal Law of the State of New York,⁹ was not a debt and the victim was not a creditor. Button, supra, 8 B.R. at 694. As the Button court explained,

With restitution, the victim has no right to payment. It is the criminal court which sets the restitution amount and if it is not paid the victim cannot proceed against the debtor to enforce payment, but instead the probation officer must report the event of nonpayment to the court which in turn determines if a violation of probation has occurred.

Id.

The court in In re Magnifico, supra, 21 B.R. 800, likewise held that an obligation to pay restitution "is not a debt contemplated by the Bankruptcy Code." Id. at 803. The Magnifico court described restitution as "an obligation made directly to the State of Arizona, acting on behalf of its citizens for their benefit, and to further impress upon the debtor . . . his criminal responsibility for his criminal acts." Id.

This court is aware that the bankruptcy court in In re Brown, supra, 11 B.C.D. 1048, 39 B.R. 820, recently held that restitution is a debt for purposes of the Bankruptcy Code. In so holding, the Brown court stated:

If the right of payment and the liability in a criminal

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