In re Miller

511 B.R. 621, 71 Collier Bankr. Cas. 2d 1642, 2014 WL 2012828, 2014 Bankr. LEXIS 2194
CourtUnited States Bankruptcy Court, W.D. Missouri
DecidedMay 15, 2014
DocketNo. 12-50873-can7
StatusPublished
Cited by6 cases

This text of 511 B.R. 621 (In re Miller) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, W.D. Missouri primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re Miller, 511 B.R. 621, 71 Collier Bankr. Cas. 2d 1642, 2014 WL 2012828, 2014 Bankr. LEXIS 2194 (Mo. 2014).

Opinion

MEMORANDUM OPINION AND ORDER GRANTING SUMMARY JUDGMENT

CYNTHIA A. NORTON, Bankruptcy Judge.

Michael Miller filed this Chapter 7 case pro se, as an inmate under the custody of the Missouri Department of Corrections (“MDOC”). He scheduled the MDOC as an unsecured creditor to whom he owed $831.25 for what he described as “Inmate Revolving Fund Debt,” or for certain fees the MDOC and the Missouri Board of Probation and Parole (the “Board”) had assessed against him before he filed bankruptcy. Mr. Miller subsequently received his discharge. He now reopens the case, asserting that the MDOC violated the discharge injunction by deducting those fees from his “inmate fund account.” The MDOC does not dispute that it imposed fees against Mr. Miller prepetition, or that it collected the fees from Mr. Miller after [623]*623the discharge. Instead, the MDOC argues that the fees constitute a nondischargeable “fine, penalty, or forfeiture” within the meaning of 11 U.S.C. § 523(a)(7), such that collection of them does not violate the discharge injunction.

This matter comes before the Court on Mr. Miller’s amended motion for summary judgment, based on undisputed facts. The Court has jurisdiction over this matter, which is a core proceeding. 28 U.S.C. §§ 1334, 157(b)(2)(I). Having reviewed the motion and response, the Court finds the “intervention fees” the MDOC collected from Mr. Miller constitute dischargea-ble fees for services, and are not nondis-chargeable fines, penalties or forfeitures under § 523(a)(7). The MDOC therefore violated the discharge injunction as a matter of law. The Court’s reasoning follows.

Findings of Fact

At the time Mr. Miller filed bankruptcy, he was incarcerated and under the custody of the MDOC. He owed the MDOC for three types of fees: (1) “electronic monitoring fees”1 in the amount of $210.00; (2) “housing maintenance fees”2 of $510.06; and (3) “intervention fees”3 of $90.00 imposed by the Board. The MDOC deducted some or all of these fees post-discharge fi'om Mr. Miller’s inmate fund account, with knowledge of Mr. Miller’s bankruptcy filing and his subsequent discharge.

The MDOC now admits that the electronic monitoring fees were imposed in error, and represents that the $210.00 has been restored to Mr. Miller’s account. Likewise, the MDOC says it has returned the $510.06 in housing maintenance fees; although not waiving the issue for future cases, the MDOC concedes the argument in this case “given the length of time since impositions of the fees.”4 Mr. Miller has not disputed that these amounts have been returned to him. Therefore, the only issue here is whether the $90.00 in prepetition “intervention fees” constitutes a nondis-chargeable “fine, penalty or forfeiture” within the meaning of § 523(a)(7).

Discussion

A motion to determine whether a creditor has violated the discharge injunction is a contested matter. Fed. R. Bankr.P. 9014. Fed.R.Civ.P. 56, governing summary judgment, is incorporated in Fed. R.Bankr.P. 7056, and is applicable to contested matters. Rule 9014(c). Rule 56 authorizes the Court to grant summary judgment “if there are no genuine issues of material fact and the moving party is enti-[624]*624tied to judgment as a matter of law.”5

11 U.S.C. § 523(a)(7) provides that the discharge under § 727 does not discharge an individual debtor from any debt “to the extent such debt is for a fíne, penalty, or forfeiture payable to and for the benefit of a governmental unit, and is not compensation for actual pecuniary loss,” with the exception of certain tax penalties (not relevant here). The “fíne, penalty, or forfeiture” exception to discharge is automatic, meaning that the governmental unit to whom the debt is owed need not object to the bankruptcy proceeding in order to preserve the nondischarge-ability of the debt. Cf. 11 U.S.C. § 523(c)(1).6 Section 524(a)(2) of the Bankruptcy Code provides that a discharge operates as an injunction against acts to collect discharged debts. A bankruptcy court may use its § 105(a) contempt powers to enforce the § 524(a) discharge injunction and to order damages for contempt.7

Arguments of the Parties

In this case, Mr. Miller argues that the intervention, housing and related fees were not imposed as part of his criminal sentence, and therefore that such fees are not penal in nature. Pointing to a Missouri Supreme Court case that describes such fees as for “current and future services rendered,”8 Mr. Miller contends that these fees are merely compensation for pecuniary loss, since the fees are imposed to cover the MDOC’s and the Board’s costs for providing various services to inmates and offenders. The MDOC, for its part, candidly acknowledges that the fees do reimburse the State for part of its costs. It argues, in essence, that although the fees are civil rather than criminal in nature, such fees are nonetheless assessed against offenders as part of the administration of the criminal justice system. And, the MDOC notes, failure to pay such fees may be punished by revocation of probation, parole or supervised release, as well as further incarceration. Thus, according to the MDOC, it is irrelevant that no court imposed the fees as part of a criminal sentence; the fees were imposed to further penal goals — penal goals that would be thwarted if Mr. Miller were permitted to discharge the fees.

Thus, before delving into the language of § 523(a)(7), the Court needs to examine the nature of intervention fees under Missouri law.

The Nature of Missouri’s “Intervention Fees

The parties do not dispute the State’s authority to impose fees against offenders, and agree that the State may use the fees to provide community services to assist offenders in, among other uses, completing probation, parole, or conditional release.

The so-called “intervention fees” are imposed under the authority of § 217.690 RSMo 1995. This statute is part of the provisions regarding the powers and duties of Missouri’s Probation and Parole Board. Subsection 217.690.1 authorizes [625]*625the Board to release or parole certain offenders when, in the Board’s opinion, there is a reasonable probability that an offender can be released without detriment to the community or himself. Subsection part 2 makes clear that an offender while on parole remains in the legal custody of the department of corrections but is still subject to the orders of the Board.

Subsection 217.690.3 provides the authority for imposing the fees in this case. That subsection provides:

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Cite This Page — Counsel Stack

Bluebook (online)
511 B.R. 621, 71 Collier Bankr. Cas. 2d 1642, 2014 WL 2012828, 2014 Bankr. LEXIS 2194, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-miller-mowb-2014.