Drimmel v. Moran (In re Drimmel)

143 B.R. 249, 1992 Bankr. LEXIS 1128, 1992 WL 174371
CourtUnited States Bankruptcy Court, D. Montana
DecidedJuly 23, 1992
DocketBankruptcy No. 90-21194-13; Adv. No. 92/00039
StatusPublished

This text of 143 B.R. 249 (Drimmel v. Moran (In re Drimmel)) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, D. Montana primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Drimmel v. Moran (In re Drimmel), 143 B.R. 249, 1992 Bankr. LEXIS 1128, 1992 WL 174371 (Mont. 1992).

Opinion

ORDER

JOHN L. PETERSON, Bankruptcy Judge.

In this adversary proceeding the Chapter 13 Debtor/Plaintiff seeks declaratory relief and an injunction against the Defendant state district court judge from enforcing a post-petition restitution condition of a deferred sentence imposed against the Debt- or in a criminal conviction for forgery. Af[250]*250ter due notice, trial was held at Butte on June 23, 1992. Both sides appeared or were represented by counsel. Several exhibits, consisting of the information, complaint, and sentencing Order entered in case No. DC91-32 in the Montana Eighteenth Judicial District Court, Gallatin County, were entered into evidence. The parties also filed a stipulation of fact. No testimony was heard. At the close of trial the Court granted the parties time to file briefs. Those having now been filed, this Court deems this matter submitted and ripe for decision.

At issue is whether a post-petition restitution condition of Debtor’s deferred sentence for forgery is included under the Debtor’s Chapter 13 Plan based on a Proof of Claim filed by the forgery victim, and therefore subject to discharge under 11 U.S.C. § 1328(a). Also at issue is whether the Debtor is entitled to an injunction against the Defendant to prevent enforcement of the restitution. For the reasons set forth below, this Court holds that the restitution condition is not provided under the Plan, the Debtor has failed to make a sufficient showing in support of an injunction, and enters judgment for the Defendant dismissing the Complaint.

The facts are not in dispute. The Debtor filed a voluntary Chapter 13 Petition on August 14, 1990. In his Schedules Debtor listed Roger Koopman (Koopman) as an unsecured creditor in the sum of $40,797. The Debtor amended his schedules on February 11, 1991. On March 28, 1991, this Court entered an Order confirming the Debtor’s second Chapter 13 Plan over the good faith objection of Koopman. On the Chapter 13 Trustee’s motion, this Court entered an Order modifying the Plan on October 10, 1991. Despite the amendment and modification, nowhere in the Debtor’s Schedules or Plan is a restitution obligation listed as a claim or treated under the Plan.

On February 27, 1991, a Complaint was filed charging the Debtor with felony forgery under Mont.Code Ann. § 45-6-325 (1991), in the Montana Eighteenth Judicial District Court, Gallatin County, No. DC91-32, the Hon. Larry Moran (Defendant) presiding (“forgery charge”). On October 8, 1991, the Debtor pleaded guilty to the felony charge. The sentencing hearing took place on January 7, 1992, and the Defendant entered an Order deferring imposition of sentence for six (6) years with conditions on February 26,1992, (“forgery sentence”).

Among the conditions of the Debtor’s sentence is a requirement that the Debtor pay restitution in the amount of $41,297.01 to the clerk of the district court, together with costs of $270, for distribution to Koop-man and St. Paul Fire and Marine Insurance Company. On March 20, 1992, the Debtor filed this adversary proceeding seeking a declaration that the restitution condition is void and illegal, and further seeking an injunction against the Defendant’s enforcement of the restitution condition.

The Debtor argues that the restitution condition was disposed of under the Debtor’s confirmed Chapter 13 Plan through its treatment of Koopman’s unsecured claim, and that the restitution order is illegal under the Bankruptcy Code and the Supremacy Clause of the United States Constitution. Debtor cites Pennsylvania Department of Public Welfare v. Davenport, 495 U.S. 552, 110 S.Ct. 2126, 109 L.Ed.2d 588 (1990), and In re Hucke, 128 B.R. 675 (D.Or.1991) in support of his argument. The facts of those cases, however, differ from the facts of the instant case so as to render those holdings inapposite to the instant adversary proceeding.

In Davenport, the U.S. Supreme Court held that restitution obligations constitute debts under the Bankruptcy Code and are therefore dischargeable under Chapter 13. 495 U.S. at 564, 110 S.Ct. at 2133-34. The debtors in Davenport plead guilty to welfare fraud in September of 1986, and were ordered to pay restitution. Id. at 556, 110 S.Ct. at 2129. In May of 1987 the debtors filed for Chapter 13 protection and listed the restitution debt as an unsecured debt. The restitution debt, being provided for by the debtors’ Plan, was dischargeable under 11 U.S.C. § 1328(a) as it was then written. Id. at 564, 110 S.Ct. at 2133-34. Unlike the debtors in Davenport, the restitution condi[251]*251tion of Debtor’s forgery sentence was not imposed until January of 1992 at the sentencing hearing, more than nine (9) months after the Debtor’s Plan was confirmed. Unlike Davenport, the Debtor’s restitution condition from the forgery sentence was not scheduled, as it was not imposed until more than a year after the chapter 13 petition was filed. This fact is fatal to the Debtor’s argument.

After Davenport, Congress amended the Bankruptcy Code to except criminal restitution from discharge under Chapter 13. P.L. 101-581, 104 Stat. 2865 (November 15, 1990) (adding 11 U.S.C. § 1328(a)(3)). In re Hucke, 128 B.R. 675, 679 (D.Or.1991). The parties agree that the new § 1328(a)(3) does not apply to bankruptcies which commenced before November 15, 1990. Therefore, a discharge under Chapter 13 discharges restitution debts provided for by a plan.

As in Davenport, the restitution debt in Hucke was provided for under the debtor’s plan. 128 B.R. at 676. The debtor in Hucke plead guilty to rape in May of 1990 and received a sentence including restitution. Id. The debtor filed a Chapter 13 petition and listed the restitution debt in his schedules. Id. When the debtor was jailed for probation revocation for failure to make restitution payments, the district court applied Davenport, held that the state violated the automatic stay, and voided the judgment revoking probation.

The facts of the instant case differ from the facts of Davenport and Hucke in one critical aspect. As noted above, those debtors listed their restitution debts in their schedules. The Debtor in the instant case did not. Indeed, he could not because the restitution condition was not imposed until more than sixteen (16) months after the petition was filed.

Under 11 U.S.C. § 521(1), the Debtor is required to file a list of creditors. “Creditor” is defined in 11 U.S.C. § 101(10)(A) as an entity that has a claim against the debt- or that arose at the time of or before the order for relief concerning the debtor. This definition includes, with certain exceptions, only holders of prepetition claims against the debtor. H.R.Rep. No. 595, 95th Cong., 1st Sess. 309-310 (1977), U.S.Code Cong. & Admin.News 1978, p. 5787.

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Related

Younger v. Harris
401 U.S. 37 (Supreme Court, 1971)
Bearden v. Georgia
461 U.S. 660 (Supreme Court, 1983)
State v. Stroud
683 P.2d 459 (Montana Supreme Court, 1984)
In Re Asay
141 B.R. 201 (D. Montana, 1992)
In Re Hucke
128 B.R. 675 (D. Oregon, 1991)

Cite This Page — Counsel Stack

Bluebook (online)
143 B.R. 249, 1992 Bankr. LEXIS 1128, 1992 WL 174371, Counsel Stack Legal Research, https://law.counselstack.com/opinion/drimmel-v-moran-in-re-drimmel-mtb-1992.