2003 #17           MEINDERS 8-26-03



IN RE: GRAHAM V. MEINDERS (In re Meinders), Adversary No. 02-4062;

Bankr. No. 00-40914; Chapter 13

 

 

    The matter before the Court on the record Footnote and briefs is whether Plaintiff Delores Graham’s claim against Defendants-Debtors Ray and Joy Meinders is nondischargeable under 11 U.S.C. § 1328(a)(3). This is a core proceeding under 28 U.S.C. § 157(b)(2). This letter decision and accompanying order shall constitute the Court’s findings and conclusions under Fed.R.Bankr.P. 7052. As set forth below, the Court concludes that Plaintiff’s claim against Defendant-Debtor Joy Meinders is excepted from discharge under § 1328(a)(3).

 

    Summary. The material facts are not in dispute. In 1998, Joy Meinders was convicted in state court of stealing money from her mother, Florence Docken. By order entered January 11, 1999, the criminal court judge gave her inter alia a short jail term and probation and ordered her to pay $90,000 in restitution to her mother’s estate. The restitution paid was to be offset by any funds Joy Meinders was to receive from her mother’s estate. By order entered April 13, 1999, the criminal court entered a second order. It denied Joy Meinders’ request for a reduction in the restitution amount. The criminal court also provided in the April 13, 1999, order

 

that pursuant to SDCL § 23A-27-25.6, and to better facilitate the collection of the Restitution amount and Costs Ordered by the Court in this matter, that the Clerk of Courts for Minnehaha County is ordered to docket this Order, and the Judgment filed in this matter as a Civil Judgment for levy and execution thereon.

 

    Joy Meinders and her husband Ray Meinders filed a Chapter 13 petition in bankruptcy on October 30, 2000. Just before a plan was confirmed, Footnote Delores Graham, as the special administrator for the Florence Docken Estate, filed an adversary complaint against a bank and Debtors seeking a constructive trust on some realty and also seeking a determination that the restitution claim that it holds is nondischargeable. The claims against the bank and one nondischargeability claim against Debtors were dismissed in an earlier order. Graham's remaining claim was whether the probate estate’s claim arising from the criminal restitution order was nondischargeable pursuant to 11 U.S.C. § 1328(a)(3) where the criminal restitution order had been docketed as a civil judgment.

 

    Section § 1328(a)(3) provides:

 

(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–-

....

(3) for restitution, or a criminal fine, included in a sentence on the debtor's conviction of a crime. Footnote

 

    Discussion. This Court joins other courts in concluding that the docketing of a criminal restitution order as a civil judgment does not remove the claim from under § 1328(a)(3). Ulwelling v. Dick Wehner Crane Service, Inc. (In re Ulwelling), 133 F.3d 923, 1998 WL 42582 (8th Cir. 1998)(a state’s decision to allow enforcement of a criminal restitution obligation as a civil judgment does not divest the restitution obligation of its identity as part of the criminal sentence); Bova v. St. Vincent De Paul Corp. (In re Bova), 326 F.3d 300, 302 and 302 n.3 (1st Cir. 2003) (state law that provides that a restitution judgment operates like a civil judgment for enforcement does not mean restitution judgment loses its criminal character)(cites therein); see Hardenberg v. Virginia Department of Motor Vehicles (In re Hardenberg), 42 F.3d 986, 989-92 (6th Cir. 1994)(with 1990 legislation, Congress intended that state criminal restitution orders not be discharged in Chapter 13 cases).

 

    Clearly, § 1328(a)(3) applies to the facts presented here. Debtor was convicted of a crime and was ordered to pay restitution of $90,000 to the Florence Docken Estate. State law provides that execution of the restitution order may issue like a judgment in a civil action against Debtor Joy Meinders, the convicted defendant. S.D.C.L. § 23A-27-25.6. There is nothing in the state criminal court’s use of this statute that altered or supplanted the criminal nature of the restitution order against Debtor Joy Meinders. Accordingly, under § 1328(a)(3) the restitution debt is not dischargeable as to Debtor Joy Meinders.

 

 

    No restitution order was entered against Debtor Ray Meinders. Section 1328(a)(3), therefore, does not operate to alter or except from discharge any pre-petition claim against him.

 

    An appropriate order will be entered.