USCA4 Appeal: 22-2252 Doc: 47 Filed: 06/28/2024 Pg: 1 of 17
PUBLISHED
UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT
No. 22-2252
DEDRE V. FEYIJINMI,
Plaintiff − Appellant,
v.
STATE OF MARYLAND CENTRAL COLLECTION UNIT,
Defendant – Appellee.
------------------------------
NATIONAL ASSOCIATION OF CONSUMER BANKRUPTCY ATTORNEYS,
Amicus Supporting Appellant.
Appeal from the United States District Court for the District of Maryland, at Baltimore. Richard D. Bennett, Senior District Judge. (1:22−cv−00904−RDB)
Argued: December 5, 2023 Decided: June 28, 2024
Before DIAZ, Chief Judge, HARRIS and HEYTENS, Circuit Judges.
Affirmed by published opinion. Chief Judge Diaz wrote the opinion, in which Judge Harris and Judge Heytens joined.
ARGUED: Marie Lott Pharaoh, Greenwood, Mississippi, for Appellant. Susan Christine Scanlon, OFFICE OF THE ATTORNEY GENERAL OF MARYLAND, Baltimore, Maryland, for Appellee. ON BRIEF: Anthony G. Brown, Attorney General, OFFICE OF USCA4 Appeal: 22-2252 Doc: 47 Filed: 06/28/2024 Pg: 2 of 17
THE ATTORNEY GENERAL OF MARYLAND, Baltimore, Maryland, for Appellee. Peter Goldberger, Ardmore, Pennsylvania, for Amici Curiae.
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DIAZ, Chief Judge:
Dedre Feyijinmi filed an adversary proceeding in her Chapter 13 bankruptcy case
seeking to discharge a restitution debt. But under the Bankruptcy Code, a debt “for
restitution . . . included in a sentence on the debtor’s conviction of a crime” isn’t
dischargeable. 11 U.S.C. § 1328(a)(3).
Feyijinmi insists, however, that this provision doesn’t apply to her because she
wasn’t convicted under Maryland law. Alternatively, she argues that the debt was
discharged because the state of Maryland identified the debt as dischargeable court fees on
its proof of claim.
The bankruptcy court rejected these arguments, and the district court affirmed. For
the reasons below, we do too.
I.
A.
In 2006, Feyijinmi was found guilty in Maryland state court of welfare fraud and
sentenced to three years’ imprisonment. As allowed under state law, the court deferred the
entry of conviction and placed her on three years’ supervised probation. The court also
ordered $14,487 in restitution, plus the statutory collection fee. It recorded and indexed
the restitution as a civil judgment.
Feyijinmi paid $890 before the court discharged her from probation. The State then
transferred her outstanding balance to its Central Collection Unit.
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A Maryland state court subsequently expunged Feyijinmi’s criminal records. 1 But
Feyijinmi’s restitution obligation survived. So the court converted the judgment of
restitution into a civil matter and granted the State’s motion to garnish Feyijinmi’s wages
to pay down her balance.
B.
A year later, Feyijinmi petitioned for Chapter 13 bankruptcy. She scheduled the
Central Collection Unit as a creditor. The State filed a proof of claim for $16,008.80. In
the “Basis for Claim” section of the form, the State wrote, “Court Ordered fees.” J.A. 11.
It also attached a statement of the claimed amount. 2
Feyijinmi informed the State that its claimed amount wasn’t correct and provided
proof of her restitution payments. So the State filed an amended proof of claim for
$7,275.33. Again, it stated that the basis for the claim was “Court Ordered Fees,” J.A. 15,
and attached another statement of the claimed amount. It also attached the judgment of
restitution from Feyijinmi’s criminal proceeding.
Feyijinmi didn’t object to the State’s amended proof of claim, and the bankruptcy
court later confirmed Feyijinmi’s plan. Feyijinmi made all plan payments, through which
the State received $787.49. The court then entered an order of discharge.
1 As a result, certain information about her criminal proceedings isn’t available. 2 When a claim includes interest, fees, expenses, or other charges in addition to the principal amount, the creditor must attach an itemized statement of the claimed amount to its proof of claim. Fed. R. Bankr. P. 3001(c)(2)(A).
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The court’s order explained that “[s]ome debts are not discharged” and listed
examples, including “debts for restitution . . . included in a sentence on debtor’s criminal
conviction.” J.A. 28. It also advised Feyijinmi that “[b]ecause the law is complicated, you
should consult an attorney to determine the exact effect of the discharge in this case.” J.A.
28.
The court later closed the bankruptcy case.
C.
Then the State notified Feyijinmi that she had an outstanding restitution debt.
Feyijinmi objected, arguing that the debt was discharged through bankruptcy. But the State
claimed that under 11 U.S.C. § 1328(a)(3), any debt “for restitution . . . included in a
sentence on the debtor’s conviction of a crime” isn’t dischargeable.
So Feyijinmi reopened her bankruptcy case and filed an adversary proceeding to
obtain a dischargeability determination. The bankruptcy court held that Feyijinmi’s
restitution was nondischargeable under § 1328(a)(3).
It determined that the term “conviction” includes a determination of guilt—whether
by a court’s finding or a defendant’s guilty plea—and a “sentence” includes probation
granted before judgment. Thus, Feyijinmi’s probation before judgment qualified as a
conviction because Maryland law permits such disposition only when there’s a finding of
guilt. The bankruptcy court also held that the State’s labeling the debt as court fees (which
are dischargeable) on its proof of claim had no legal effect.
The district court agreed, and this appeal followed.
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II.
We review the judgment of a district court sitting in review of a bankruptcy court
de novo, applying the same standards that the district court applied. Copley v. United
States, 959 F.3d 118, 121 (4th Cir. 2020). Thus, “we review the bankruptcy court’s legal
conclusions de novo, its factual findings for clear error, and any discretionary decisions for
abuse of discretion.” Id.
Feyijinmi makes two arguments on appeal. First, that her restitution was
dischargeable because it was neither a consequence of a “conviction” nor “included in a
sentence,” as those words are used by § 1328(a)(3). And second, that the bankruptcy court
should have treated the debt as dischargeable because the State labeled it as court fees on
its proof of claim. We reject both arguments.
1.
Once a Chapter 13 debtor completes her plan payments, all debts provided for in the
plan are discharged. 11 U.S.C. § 1328(a). But the Bankruptcy Code excludes certain debts
from discharge. As relevant here, § 1328(a)(3) excludes any debt “for
restitution . . . included in a sentence on the debtor’s conviction of a crime.”
Feyijinmi claims that this section of the Code doesn’t exclude her restitution debt
from discharge because (1) she wasn’t convicted and (2) the restitution wasn’t part of a
sentence.
To start, we must determine whether a probation-before-judgment disposition in
Maryland state court constitutes a “conviction” under § 1328(a)(3). Because the
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Bankruptcy Code doesn’t say otherwise, the definition of “conviction” under § 1328(a)(3)
is a matter of federal law, even though the predicate offense and punishment are matters of
state law. Dickerson v. New Banner Inst., Inc., 460 U.S. 103, 111–12 (1983), superseded
by statute, Firearms Owners’ Protection Act, Pub. L. No. 99-308, 100 Stat. 449; cf. Yanez-
Popp v. INS, 998 F.2d 231, 236 (4th Cir. 1993) (explaining that this proposition from
Dickerson remains good law).
The Code doesn’t define “conviction.” And neither this court nor our sister circuits
have defined the statutory term. 3 But we have some guidance from the Supreme Court.
In Dickerson, the Court considered whether an expunged state probation-before-
judgment disposition, imposed after the defendant pleaded guilty, constitutes a conviction
under federal gun control laws. 460 U.S. at 105, 110–11. The Court held that “a plea of
guilty and its notation by the state court, followed by a sentence of probation,” equates to
a conviction under the statutes. Id. at 114.
It explained that although there’s “no written adjudication of guilt” in a deferred
judgment, a defendant can’t be placed on probation unless the court “deem[s] him to be
guilty of a crime.” Id. at 113–14. That determination of guilt—whether entered upon a
jury’s verdict, a court’s finding in a bench trial, or a defendant’s plea—is what Congress
intended to include as a “conviction.” Id.
3 The Tenth Circuit has held that § 1328(a)(3) doesn’t include restitution ordered under an adjudication of juvenile delinquency. Colo. Jud. Dep’t v. Sweeney (In re Sweeney), 492 F.3d 1189, 1191 (10th Cir. 2007). But that court’s precedent established that juvenile delinquency, as defined by federal law, is “an adjudication of status—not a criminal conviction.” Id. (cleaned up). So it didn’t need to define “conviction” as used in § 1328(a)(3).
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The Court reasoned that Congress has specifically limited “conviction” in other
statutes to include only those in which the court entered a formal judgment. Id. at 112 n.6.
And the relevant legislative history showed that Congress intended to broadly keep
firearms out of the hands of “risky people”—a presumption that depends on the fact that
the underlying offense occurred. Id. at 112–14, 112 n.6.
The Court also held that a state’s expungement of the defendant’s deferred judgment
didn’t nullify his conviction for purposes of the statutes. Id. at 114–15. The Court
explained that expungement doesn’t alter the underlying determination of guilt. Id. And
it reasoned that in other statutes, Congress has expressly said that a “conviction” doesn’t
include deferred judgments later expunged. Id. at 118. So to give effect to state
expungements where Congress has said nothing would “seriously hamper” the federal
statutes’ enforcement. See id. at 121–22.
Several courts (including ours) have applied Dickerson’s reasoning when defining
“conviction” in other federal statutes. See Aldaco v. RentGrow, Inc., 921 F.3d 685, 687–
88 (7th Cir. 2019) (cataloging cases). The cases hold that unless Congress expressly
provides otherwise in the statute, a “conviction” includes probation-before-judgment
dispositions, even if expunged. See, e.g., United States v. Campbell, 980 F.2d 245, 251
(4th Cir. 1992) (holding that an expunged deferred sentence was a “conviction” for
purposes of a sentencing enhancement); United States v. Bridges, 741 F.3d 464, 467–71
(4th Cir. 2014) (holding that a nolo contendere plea with adjudication withheld was a
“conviction” under the Sex Offender Registration and Notification Act [SORNA]).
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Applying Dickerson’s reasoning, a bankruptcy appellate panel has defined
“conviction” for purposes of § 1328(a)(3) as including “a plea of guilty followed by a
sentence of probation, despite the absence of the formal entry of a conviction by the
criminal court.” Wilson v. Cumis Ins. Soc’y (In re Wilson), 252 B.R. 739, 742 (B.A.P. 8th
Cir. 2000).
We too follow Dickerson’s reasoning to reach the same conclusion. The term
“conviction” as used in § 1328(a)(3) includes a determination of guilt—whether upon trial
or guilty plea—followed by a sentence of probation, even without the formal entry of a
conviction.
We find more support for our holding in Congress’s response to a pair of Supreme
Court decisions addressing restitution in state court proceedings.
In Kelly v. Robinson, the Supreme Court held that restitution imposed as a condition
of probation in state court isn’t dischargeable in a Chapter 7 bankruptcy proceeding. 479
U.S. 36, 52–53 (1986). That chapter generally excludes from discharge any debt “for a
fine, penalty, or forfeiture” that’s “for the benefit of a governmental unit” and “not
compensation for actual pecuniary loss.” 11 U.S.C. § 523(a)(7).
But the Court later held in Pennsylvania Department of Public Welfare v. Davenport
that restitution imposed as a condition of probation in state court is dischargeable in a
Chapter 13 proceeding. 495 U.S. 552, 564 (1990), superseded by statute, Criminal Victims
Protection Act of 1990, Pub. L. No. 101-581, 104 Stat. 2865. At the time, § 1328(a)
discharged “all debts,” with narrow exceptions for certain long-term and divorce-related
debts. See 11 U.S.C. § 1328(a) (1984) (amended 1990).
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Congress promptly responded by amending § 1328(a) to except restitution from
discharge. See Criminal Victims Protection Act § 3, 104 Stat. at 2865. And the
amendment’s legislative history shows that Congress intended to prevent federal
bankruptcy proceedings from invalidating restitution ordered in state proceedings. See S.
Rep. No. 101-434, at 7 (1990), as reprinted in 1990 U.S.C.C.A.N. 4065, 4071 (explaining
that the amendment invalidates Davenport and has the “effect of barring the use of chapter
13 by convicted criminals seeking to discharge court-ordered restitution payments”); H.R.
Rep. No. 101-681, pt. 1, at 165 (1990), as reprinted in 1990 U.S.C.C.A.N. 6472, 6570
(explaining that the amendment invalidates Davenport and ensures that “no debtor with
criminal restitution obligations will be able to discharge them through any bankruptcy
proceeding”).
Nothing in that history suggests that Congress wanted to limit § 1328(a)(3)’s reach
based on the ultimate disposition of the state proceeding that imposed the restitution. And
as noted in Dickerson, Congress has elected to carve out such exceptions in other statutes.
See 460 U.S. at 111–12, 112 n.6.
Had it wanted to do so for § 1328(a)(3), it could have done so expressly. Congress
has not, so we will not.
2.
Applying these legal principles, we hold that Feyijinmi’s “probation before
judgment” adjudication is a “conviction” under § 1328(a)(3).
Under Maryland law, when a defendant pleads guilty or nolo contendere or is found
guilty of a crime, the court may “stay the entering of judgment, defer further proceedings,
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and place the defendant on probation before judgment.” Md. Code Ann., Crim. Law § 6-
220(b)(1).
The records from Feyijinmi’s Maryland state court proceedings aren’t available.
But we know that for Feyijinmi to be placed on probation before judgment, a court first
needed to find her guilty. See Howard Cnty. Dep’t of Soc. Servs. v. Linda J., 869 A.2d
404, 410 (Md. Ct. Spec. App. 2005). And that’s all that is required for the state disposition
to qualify as a “conviction” under § 1328(a)(3).
That Maryland doesn’t consider probation before judgment to be a “conviction”
under state law is irrelevant. See Md. Code Ann., Crim. Law § 6-220(i)(3) (explaining that
a defendant’s discharge upon her completion of probation before judgment “shall be
without judgment of conviction and is not a conviction for the purpose of any
disqualification or disability imposed by law because of conviction of a crime”). Again,
federal law governs the definition of “conviction” in § 1328(a)(3). Cf. Dickerson, 460 U.S.
at 111–12.
And for good reason. Applying the federal definition promotes “national
uniformity,” id. at 112, and wards off “anomalous and unfair results,” Yanez-Popp, 998
F.2d at 235 (cleaned up).
It also doesn’t matter that the Maryland court struck its guilty finding when it
granted Feyijinmi probation before judgment. We rejected this same argument in Yanez-
Popp. See 998 F.2d at 237. As we explained there, “[s]triking the guilty finding did not
mean the facts supporting the finding no longer existed; it merely rewarded petitioner for
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good behavior during probation by technically erasing his conviction for reasons unrelated
to its validity on the merits.” Id.
The state’s decision to expunge Feyijinmi’s criminal records is similarly of no
import. Cf. Dickerson, 460 U.S. at 114–15 (explaining that “expunction does not alter the
legality of the previous conviction” and merely means that the state “has provided a means
for the trial court not to accord a conviction certain continuing effects under state law”).
What matters is that Feyijinmi was found guilty by a Maryland state court, which in turn
means that Feyijinmi suffered a “conviction” under § 1328(a)(3).
3.
As a fallback argument, Feyijinmi claims that even if her probation before judgment
is a “conviction,” her restitution wasn’t “included in a sentence.” According to Feyijinmi,
a sentence can’t exist without a final judgment. And because probation before judgment
in Maryland precludes the entry of a final judgment, she argues, her restitution wasn’t
ordered as part of a sentence. Not so.
Because the Code doesn’t define “sentence,” federal law again controls. Cf.
Dickerson, 460 U.S. at 111–12. And we think it’s clear that as used in § 1328(a)(3),
“sentence” means the consequences resulting from a determination of guilt. See, e.g.,
Bernstein v. United States, 254 F. 967, 968 (4th Cir. 1918) (“In a legal sense, the sentence
is the punishment fixed for the offense of which the accused has been convicted . . . .”);
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Sentence, Black’s Law Dictionary (11th ed. 2019) (defining “sentence” as “the punishment
imposed on a criminal wrongdoer”). 4
A deferred judgment followed by probation is a “sentence” under § 1328(a)(3).
That’s because “probation is a penal consequence.” See Bridges, 741 F.3d at 469 (holding
that probation assigned following a withheld adjudication was a sentence for purposes of a
SORNA regulation).
There’s no indication that Congress intended any other meaning of “sentence” for
purposes of § 1328(a)(3). To the contrary, in amending the statute to “correct the effect”
of Davenport, Congress intended to codify Kelly 5 and make “criminal restitution
obligations nondischargeable in Chapter 13, as they currently are in Chapter 7.” H.R. Rep.
No. 101-681, pt. 1, at 164.
Thus, it follows that § 1328(a)(3) at least encompasses restitution that arises from
the circumstances considered in Kelly. And there, restitution was ordered in a state
probation-before-judgment disposition, after the defendant pleaded guilty to larceny.
Kelly, 479 U.S. at 38–39.
4 It’s true that we’ve said that “a criminal judgment includes both a conviction and its associated sentence” and thus a “final judgment in a criminal case means sentence.” Woodfolk v. Maynard, 857 F.3d 531, 542 (4th Cir. 2017) (cleaned up). But that a judgment requires a sentence doesn’t mean that a sentence requires a judgment. In any event, Woodfolk addressed the time at which a judgment becomes final for purposes of the statute of limitations for a habeas petition, see id. at 536, 539—a statute and definition distinct from § 1328(a)(3). So it doesn’t bind us here.
Recall that Kelly held that restitution isn’t dischargeable in Chapter 7 proceedings. 5
479 U.S. at 52–53.
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Accordingly, we find that Feyijinmi’s restitution—ordered in a probation-before-
judgment disposition after a Maryland state court found her guilty of welfare fraud—was
“included in a sentence” under § 1328(a)(3).
We also reject Feyijinmi’s claim that her restitution was no longer a sentence when
the debt was transferred to Maryland’s Central Collection Unit and later converted to a
civil matter. Just as expungement doesn’t alter the legality of a “conviction,” a state’s
decision to enforce restitution as a civil judgment “does not divest the restitution obligation
of its identity as part of a criminal sentence.” Ulwelling v. Dick Wehner Crane Serv., Inc.
(In re Ulwelling), 133 F.3d 923, 923 (8th Cir. 1998) (per curiam) (unpublished table
decision). 6
We next address Feyijinmi’s arguments related to the State’s labeling the debt as
“Court Ordered Fees” on its proof of claim. First, she argues that in so doing, the State
waived its right to collect the debt post-discharge. Second, she argues that the bankruptcy
court needed to determine whether the State’s actions prejudiced Feyijinmi before it
declared the debt nondischargeable. We are not persuaded.
6 Nor was the bankruptcy court required to hold a plenary hearing to determine the correct interpretation of § 1328(a)(3). See Appellant’s Br. at 23. Feyijinmi doesn’t explain why such a hearing was necessary when the meaning of § 1328(a)(3) is a question of law, and there was no dispute that Feyijinmi was ordered to pay restitution as a condition of her probation before judgment. Cf. Hensley v. Alcon Lab’ys, Inc., 277 F.3d 535, 541 (4th Cir. 2002) (discussing the need for a plenary hearing before enforcing a settlement when there’s a dispute about the settlement’s existence or terms).
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To begin, there’s no basis for waiver because the State’s proof of claim sufficiently
characterized the debt as restitution.
A creditor may file a proof of claim to participate in bankruptcy. 11 U.S.C. § 501(a).
The proof of claim must “conform substantially to the appropriate Official Form.” Fed. R.
Bankr. P. 3001(a). If the claimed amount includes interest or fees in addition to the
principal amount, the creditor must include an itemized statement of those expenses. Fed.
R. Bankr. P. 3001(c)(2)(A).
The State adhered to this process. And to the extent that the proof of claim was
ambiguous, it was cleared up by the attached restitution order, entitled “Judgment of
Restitution.” J.A. 18; see In re Avery, 272 B.R. 718, 723–24 (Bankr. E.D. Cal. 2002)
(finding that although the proof of claim was “silent about the amount and classification of
the claim,” the attachments “made up for this paucity of detail and dispelled any doubt”
about the debt’s nature). If Feyijinmi needed more information about the debt or its
characterization, she could have objected to the claim. See 11 U.S.C. § 502(a).
We also think it clear that restitution debts are nondischargeable without any action
by the creditor. Compare 11 U.S.C. § 523(c)(1) (providing that certain debts are
nondischargeable only if the bankruptcy court makes such a determination upon the
creditor’s request), with 11 U.S.C. § 1328(a)(3) (providing that restitution is
nondischargeable, without qualification). Indeed, a restitution creditor isn’t even required
to file a proof of claim to collect on the debt post-discharge. Cf. Kelly, 479 U.S. at 39, 53
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(determining that restitution is nondischargeable in Chapter 7, even though the creditors
didn’t file proofs of claim); Aguiluz v. Bayhi (In re Bayhi), 528 F.3d 393, 399 (5th Cir.
2008) (“[P]er se non-dischargeable [debts] “need not be claimed in bankruptcy
proceedings to remain completely immune from discharge.”).
So we reject any notion that the State waived its right to collect restitution by doing
something (filing a proof of claim) it had no duty to do.
We also reject Feyijinmi’s claim of prejudice.
According to Feyijinmi, the State essentially amended its proof of claim when it
characterized the debt as nondischargeable restitution post-discharge, given that it
originally characterized the debt as dischargeable court fees. She claims that the
bankruptcy court shouldn’t have allowed the amendment without first considering any
prejudice to her. See, e.g., In re City of Caps., Inc., 55 B.R. 634, 637 (Bankr. D. Md. 1985)
(explaining that the bankruptcy court must consider whether the debtor would be “unduly
prejudiced” before allowing an amendment to a proof of claim (cleaned up)).
But the State’s proof of claim properly characterized the debt as restitution. In any
event, we fail to see how Feyijinmi was prejudiced. When assessing prejudice in this
context, courts ordinarily consider facts tending to show “bad faith or unreasonable delay
in filing the amendment, impact on other claimants, reliance by the debtor or creditors . . .
and change of the debtor’s position.” Id.
No such facts appear in this record. So Feyijinmi’s prejudice claim fails.
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* * *
For these reasons, we affirm the district court’s judgment.
AFFIRMED