Cregger v. State of Maryland Central Collection Unit

Filing 8

MEMORANDUM. Signed by Judge J. Frederick Motz on 10/1/2015. (nd2s, Deputy Clerk)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND

*
*
*
*
*
*

ANNE MARIE CREGGER

v.
STATE OF MARYLAND, CENTRAL
COLLECTION UNIT

Civil No. -JFM-15-818

*
******
MEMORANDUM

This is an appeal from an order of the Bankruptcy Court denying Anne Marie Cregger's
motion to reopen her bankruptcy proceedings.

Underlying the Bankruptcy Court's denial of the

motion was its belief that the restitution obligation imposed upon Cregger in juvenile
delinquency proceedings involving her son was not dischargeable.

The issue presented is a close

one, but in my view the restitution obligation imposed upon Cregger was dischargeable.
Accordingly, the order of the Bankruptcy Court denying Cregger's motion to reopen will be
reversed.
1.
Cregger's son committed certain acts which resulted in a finding of juvenile delinquency
in the Circuit Court for Cecil County. A series of restitution orders totaling $75,458.20 was
entered against the son, and a judgment was entered against Cregger in the same amount. On
January 11,2012, Cregger filed a Chapter 7 petition, and a discharge was issued pursuant to 11
U.S.C. 92727 on April 10, 2012. The restitution amount was payable to the State of Maryland
Central Collection Unit ("CCU") which, presumably, would process any restitution payments
made and forward them to the victims of the juvenile's delinquency.

I

Cregger scheduled the

claim of the CCU in her petition, and her counsel attempted to negotiate a resolution ofthe liens
with the CCU. He was unsuccessful and in July 2014, Cregger's wages were attached. Cregger
(through her former counsel) again was unable to obtain a voluntary resolution of the
attachments. Cregger was advised that her tax refunds would be seized, and she then filed a
motion to reopen her bankruptcy proceedings.
The Bankruptcy Court held two hearings on the motion and eventually denied it.
II.
II U.S.C. s523(a)(7) provides that a debit which "is for a fine, penalty, or forfeiture
payable to and for the benefit of a governmental unit, and is not compensation for actual
pecuniary laws" is not subject to discharge. Under Maryland law restitution ordered against a
child in a juvenile delinquency proceeding is rehabilitative in nature. See In re Herbert B., 303
Md. 419, 427-28, 494 A.2d 680, 684 (1985). The Maryland Court of Appeals has held, however,
that an order of restitution against the parent of a juvenile offender is "penal" or "retributive" in
nature. See e.g., Robey v. State, 397 Md. 449, 459, 918 A.2d 499,505 (2007). In light of this
language, it is not at all surprising that the Bankruptcy Court believed that the restitution order
entered against Cregger was not dischargeable.
I am of a different view, however, for several reasons. First, juvenile delinquency
proceedings are not criminal in nature. Second, although the parents of the juvenile delinquent
can be held liable for restitution owed to victims, it is not their own conduct that is adjudicated in
the juvenile delinquency proceedings.

Thus, the restitution order involved in this case is unlike

the monetary judgment imposed in a civil action brought to enforce the antifraud provision of the
Interstate Land Sales Full Disclosure Act or under state consumer protection statutes which have
been found to be nondischargeable.

See Us. Dep't of Housing & Urban Dev. v. Cost Control

2

Marketing & Sales Mgmt a/Virginia, Inc., 64 F.3d 920, 927-28 (4th Cir. 1995); In Re Hessler,
No. 09-13371-JS, Adv. No. 11-00992-JS, 2013 WL 5429868, at *3 (Bankr. D. Md. Sept. 30,
2013). Third, although every parent wants her or his child to be well behaved, free will exists,
and a parent's inability to make his or her child law abiding is not penal in nature.!
Fourth, Kelly v. Robinson, 479 U.S. 36 (1986), heavily relied upon by the CCU, is plainly
distinguishable.

That case involved a restitution order entered against the defendant in a state

criminal court proceeding, and under Connecticut law (which was applicable in Kelly)
restitution was not compensatory in nature but "provide[ d] for a flexible remedy tailored to the
defendant's situation." 479 U.S. at 36. Kelly is clearly different from the present case which
involves a juvenile proceeding against someone other than the person against whom restitution is
ordered and where the uneven amount of the restitution order reflects that the order is intended to
be compensatory in nature.
III.
As to the timeliness of the motion, I find in favor of Cregger. The motion was filed as
soon as it became apparent that the CCU was adamant about enforcing its lien (that I find had
been discharged) .
IV.
The only relief that I am technically granting is a reversal of the order of the Bankruptcy
Court denying Cregger's motion to reopen. However, in the final analysis I am finding that not
only was the motion to reopen timely but also that the debt imposed by the restitution order
imposed upon creditor is dischargeable.

Therefore, I ask the parties to confer with one another

Of course, if a parent is negligent in performing her or his child-rearing responsibilities, the
victim of an act of juvenile delinquency committed by the child may bring a civil action against
the parent.
1

3

and report to me on or before October 14, 2015 as to whether they are able to agree upon a form
of order that would prevent the waste of time and resources that a remand would entail.

Date: I~I/:,(

1=0

"

~rederick
Motz ~
mted States Dlstnct Judge

4